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Monthly Archives: June 2015

Government Bans Exclusivity Clauses In Zero Hour Contracts

What are zero hour contracts?

The exploitation of workers through the use of zero hour contracts was a hot topic in the General Election and it’s easy to see why.  Zero hour contracts are contracts that do not guarantee a minimum number of hours’ employment and, as of August 2014, a staggering 1.8 million workers were employed on these controversial contracts. This figure, from the Office for National Statistics (ONS) shows that the number of workers on zero hour contracts has increased by more than a quarter from 2013, when figures were first collected.

Who uses zero hour contracts?

Zero hour contacts are particularly popular in the hotel and catering industries where they are used by more than half of businesses. According to the ONS, most workers on zero hour contracts are students or women, and one-third of these workers would like more hours of work compared with just 10% of other people in employment.

It’s easy to see the appeal of zero hours contracts for employers who are afforded greater flexibility in their work force in order to cater for seasonal or fluctuating demand. However, some employees (especially students) like them too and find that zero hour contracts enable them to pursue other interests or commitments alongside a flexible working pattern.

There is general agreement, however, that some employers do not use zero hours contracts in a fair and equitable way. One of the biggest bugbears in this regard is the use of exclusivity clauses in zero hour contracts and a key part of the Conservative Party’s election campaign was a promise to ban such clauses.

Why the fuss about exclusivity?

An exclusivity clause is a contractual clause that prevents workers on zero hour contracts from being able to take work elsewhere, even though the employer does not guarantee any hours of work. As of 26 May 2015, the government finally took some action, bringing into force the much-trailed ban on exclusivity clauses in zero hour contracts.

According to the government, an estimated 125,000 workers in the UK have exclusivity clauses in their zero hour-contracts and so this change could have far-reaching effects.

A proportionate response?

The government’s thinking in banning such exclusivity clauses is that these clauses undermine choice and flexibility for the employee and could constitute an abusive practice on the part of the employer. Neil Carberry of  Confederationof British Industry (CBI) commented: “Banning exclusivity clauses in zero hours contracts is a proportionate response to tackling examples of poor practice”.

As of 26 May, therefore, exclusivity clauses in existing and new contracts will be unenforceable and employers will not be able to rely upon them.

Anti-avoidance measures

The new legislation has, in addition, a section giving the government power to take additional steps to prevent workers on zero hour contracts from being stopped from working for other employers. The law, however, does not give protection from detriment to workers on zero hour contracts and so there are no anti-avoidance measures in place as yet. Watch this space!

By Iain Mackintosh


How to Ensure Your Estate Agency Business Complies with Consumer Protection Legislation

A range of consumer protection laws apply to estate agents, lettings agents and property managers. In this blog post we look at the laws that apply and the steps agents and managers can take to ensure compliance.What are the relevant consumer protection laws?

The Consumer Protection from Unfair Trading Regulations 2008 prohibit businesses (including estate agents, lettings agents and property managers) from engaging in unfair commercial practices in their dealings with consumers.

Other relevant legislation includes the Unfair Contract Terms Act 1977 and the Unfair Terms in Consumer Contracts Regulations 1999 (both of which outlaw unfair terms in contracts with consumers) and the Supply of Goods and Services Act 1982 (requiring services to be provided with reasonable care and skill).

Agents and managers who breach these laws can face:

•   Criminal penalties (fines or in serious cases imprisonment)
•   Unfair contract terms being unenforceable in the civil courts
•   Action by the Advertising Standards Authority
•   Disciplinary action by their professional body
•   A complaint being made to a redress scheme (Ombudsman)

What do I need to do?

Remember that the laws are relevant to every aspect of the agent’s service, including face-to-face interactions and the preparation of written materials. Therefore estate agents, lettings agents and property managers should take the following practical steps to ensure they are compliant with consumer protection legislation:

•    Make sure written information given to sellers, prospective buyers, landlords and prospective tenants is expressed clearly in plain English and is not capable of misleading them. This applies to contracts with sellers/landlords, particulars provided to buyers/tenants and tenancy agreements and related documentation.
•    Make sure that no relevant information is omitted from contracts, particulars or other documents.
•    Have draft particulars approved (in writing) by sellers and landlords. Draw their attention to the need for particulars to contain complete and accurate information.
•    When handling enquiries, ensure that the information given is clear, complete and accurate.
•    Ensure that sellers, buyers, landlords and tenants are given full details of any fees that will be payable. Make sure this information is provided in an accessible format. Ideally, quote the VAT-inclusive amount.
•    Make sure tenants are fully appraised of all fees, charges and other sums that are payable in addition to the rent (e.g. agent’s fees, cleaning costs, tenancy deposit).
•    Give material information at the appropriate time rather than waiting for the person to request it. For example, if you become aware of new information about a property, tell prospective buyers/tenants at the earliest opportunity.
•    If you spot a problem or a potential problem, e.g. you have concerns about the legal rights of access to a property you are marketing for sale, or there is a maintenance issue at a property you are managing, ensure it is investigated and that appropriate action is taken.
•    Do not act aggressively, e.g. when dealing with difficult tenants.
•    Be professional and act in accordance with the rules of your professional body.
•    Advise sellers, prospective buyers, landlords and prospective tenants of your complaints procedures, including details of any redress scheme to which you belong.

Further Information

The Competition and Markets Authority has published guidance for lettings agents on compliance with consumer protection legislation. See https://www.gov.uk/government/publications/consumer-protection-law-for-lettings-professionals.

Simply-Docs offers a range of professionally drafted template documents to help meet the needs of your estate agency business. Please click here for template terms and conditions, agency appointment forms and complaints handling documents.

By Iain Mackintosh