BEIS have sent reminder that this is final week to respond to the Government consultations on options for reform to non-compete clauses & exclusivity clauses in contracts of employment. Both consultations close this Friday, 26th February.
The proposed reforms form part of the government’s plans to build back better, ensuring the UK’s recovery from Covid-19 creates new jobs, increases competition and maximises opportunities for the most talented innovators, job creators and entrepreneurs in the UK.
Non-compete clauses are used in contracts of employment to restrict an individual’s ability to work for a competing business, or to establish a competing business for a defined period after they leave.
The purpose of the consultation is to seek views on:
- proposals to make non-compete clauses enforceable only when the employer provides compensation during the term of the clause, and whether this could be complemented by additional transparency measures and statutory limits on the length of non-compete clauses
- an alternative proposal to make post-termination, non-compete clauses in contracts of employment unenforceable.
The Government is also interested in options short of banning non-compete clauses which limit their enforceability in the interests of spreading innovation.
The government is also seeking views on a specific proposal to extend the ban on exclusivity clauses beyond zero hours contracts, to contracts where the workers’ guaranteed weekly income is less than the Lower Earnings Limit, currently £120 a week. The intention is to allow low-income workers who are not able to secure the number of hours they would like from their current employer to seek additional work elsewhere.