Exclusivity contracts for the low-paid set to be barred

The Government is proposing to ban exclusivity clauses for low paid workers so they can do more than one job while a report from the Fabian Society warns that benefits reductions next year could significantly increase child poverty.

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The Government is to consult on proposed new measures to allow low paid workers to find new or additional work, and ban exclusivity contracts.

The Government will consult on banning the use of exclusivity clauses in contracts, which prevent workers from taking on additional work with other employers. This would apply to a worker’s whose guaranteed weekly income is below the Lower Earnings Limit, currently £120 a week, affecting an estimated 1.8 million workers across the UK. Exclusivity clauses were banned for workers on zero hours contracts in 2015.

The proposals also look to reform the use of non-compete clauses, which can prevent individuals from starting up or joining competing businesses after they leave a position. The Government says this will “ensure talented individuals have the freedom to apply their skills in another role if they wish while unleashing a wave of new start-ups across the country”.

The plans involve introducing a mandatory compensation requirement for any employer that wishes to use non-compete clauses. The aim is to discourage the use of non-compete clauses by employers. The Government is also seeking views on whether it is necessary to go further and ban non-compete clauses altogether.

Meanwhile, a report from the Fabian Society examines the potential impact of increases in unemployment after the furlough scheme ends next April and cuts in social security policies announced at the start of the pandemic, including the additional £20 a week universal credit boost under the adult allowance.

It projects that an extra 3.2 million people will slip into poverty as a result of benefit cuts and mass unemployment – a rise from 11.4 to 14.6 million.  It says child poverty could increase by 850,000, a rise from 21 per cent to 29 per cent of children. Of these children, it ways 210,000 live with a lone parent and 650,000 live with two parents. It estimates that overall 1.7 million of the people moving into poverty will be in families with children, compared to 1.5 million who live without children.


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