Context
The government has suggested a variety of changes to employment law in its policy paper Smarter Regulation to Grow the Economy, which it claims “will cut red tape for businesses and save £1 billion per year while safeguarding the rights of workers”.
Key points to note
In the paper, the Department for Business and Trade has announced plans to legislate to limit non-compete clauses in employment contracts to a three-month duration, in addition to; consulting on suggestions to enhance the Working Time Regulations; rolling up holiday pay; and removing the requirement to elect employee representatives in TUPE consultations.
Limiting the length of non-compete clauses to 3 months will provide employees with more flexibility to join a competitor or start up a rival business after they have left a position. This will give up to 5 million UK workers greater freedom to switch jobs, apply their skills elsewhere and even earn a pay rise. The change will also provide a boost to the wider UK economy, supporting employers to grow their businesses and increase productivity by widening the talent pool, and improving the quality of candidates they can hire.
This limiting of non-compete clauses, says the Department for Business and Trade, “will not interfere with the ability of employers to use (paid) notice periods or gardening leave, or to use non-solicitation clauses. These reforms will not cut across arrangements on confidentiality clauses, nor will they affect restrictions on (former) public sector employees under the business appointment rules.” Plans have also been outlined for scrapping the ‘sunset clause’ in its Retained EU Law (Revocation and Reform) Bill, which would have automatically deleted every EU law which hadn’t already been reviewed by the government at the end of 2023. It will instead “amend it to be clear which laws we intend to revoke at the end of this year”. “This will also provide certainty to business by making clear which regulations will be removed from our statute book.”
Business and trade secretary Kemi Badenoch said: “I have listened to the concerns of businesses of all sizes and have made it a priority to tackle the red tape that holds back UK firms, reduces their competitiveness in global markets and hampers their growth.”
Next actions
None – for information and awareness.