Hospitality sector to benefit from ban on exclusivity clauses

What is an exclusivity clause?

When an exclusivity clause is put into an employee’s contact, it restricts the employee from being able to take on additional work with another employer. In 2015, exclusivity clauses were banned from being placed into zero-hours contracts. The government judged this unfair when work is not guaranteed to the employee.

What are the new rules on exclusivity clauses?

Business Minister Paul Scully has recently announced that the Government has decided to extend the ban on exclusivity clauses further which includes those earning less than £123 per week. This rule changes means employers will no longer be able to insert exclusivity clauses into employee’s contracts where their guaranteed weekly income is £123 of less (the Lower Earnings Limit). It has been estimated that 1.5 million workers across the UK are earning £123 or less per week. The intention of the new rules is to ensure that workers within this group with exclusivity clauses have the option to top up their income with additional work.

How will this benefit hospitality businesses?

This announcement has been welcomed by the hospitality sector and has been described as ‘positive for businesses and workers in hospitality’ and UKHospitality have said that the reform will benefit firms that are currently experiencing recruitment issues. The reform to the rules will enable those who would like a second job to have one. The hospitality sector has over 160,000 vacancies and enabling people to work with contracts that suits them should help with recruitment and increase business confidence.

Hospitality employees working longer hours

As referenced earlier, the hospitality sector currently has over 160,000 vacancies which is double the number of vacancies the sector had before the pandemic. The shortage of employees in the sector means that employees are being asked to work longer hours. According to a survey conducted by workforce management specialist Bizimply, it has been found that staff working hours in the hospitality sector has increased on average by 6 hours per week (25 hours per week compared to 19 hours per week) than before the pandemic. The hospitality sector is hoping that changes to exclusively clauses will help fill some of the many vacancies available. This may alleviate some of the pressure on their current staff who are working additional hours.

How can we help?

At Hawsons we have a dedicated team of leisure and hospitality accountants in Sheffield, Doncaster, and Northampton.

As the sector continues to become ever more challenging, with changes in fierce global, national and regional competition leading to unrelenting pressures to maintain margins, it is more crucial than ever to seek sound and proactive advice.

At Hawsons our dedicated team of specialist hotel, pub and restaurant accountants offer professionals advice and guidance that is tailored to their individual needs and requirements, providing a full range of proactive services.