Exclusivity clauses in zero hours contracts are to be banned so that employees can no longer be tied to a company that may not have any work to offer them.

Some firms, including recruitment agencies, have been using exclusivity clauses to prevent an individual from working for another employer, even if the firm has nothing to offer them for long periods.

Ministers believe this undermines choice and flexibility for the individuals affected.

The ban, set to benefit the 125,000 zero hours contract workers estimated to be tied to an exclusivity clause, is part of a bid to clamp down on abuses in the workplace. It will allow workers to look for additional work to boost their income.

Business Secretary Vince Cable said: “Zero hours contracts have a place in today’s labour market. They offer valuable flexible working opportunities for students, older people and other people looking to top up their income and find work that suits their personal circumstances.

“But it has become clear that some unscrupulous employers abuse the flexibility that these contracts offer to the detriment of their workers. Last December (2013), I launched a consultation into this issue. Following overwhelming evidence we are now banning the use of exclusivity in zero hours contracts.”

The change is one of several included in the Small Business, Enterprise and Employment Bill, which is designed to help small businesses prosper while protecting the rights of the workers.

The government will also work with unions and businesses to develop a best practice code of conduct for employers that wish to use zero hours contracts for their workforce.

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