The Government recently published a paper entitled 'Smarter Regulation to Grow the Economy,' indicating plans to reform employment law post-Brexit. There are several proposed measures including changes to: non-compete clauses, Working Time Regulations 1998 and TUPE. The Government has also scrapped the 'sunset clause' in the Retained EU Law (Revocation and Reform) Bill.
This alert summarises the key changes proposed by the Government.
Non-compete clauses
The Government intends to limit the length of non-compete clauses to three months. Non-compete clauses can be included in employment contracts to restrict an individual’s ability to work for, or establish, a competing business after they have left their current employer (typically for a period of 3-12 months post-termination).
Whilst non-compete clauses can protect the legitimate business interests of companies, the Government has concluded that lengthy non-compete clauses have become far too common in employment contracts, and often disproportionately impact the employee.
There will be no changes to non-solicitation clauses, confidentiality clauses or garden leave clauses under the current proposals and, as such, we may see employers introducing longer notice periods or relying on garden leave clauses to keep the employee from joining competitors. It is unclear how the legislation will impact current non-competes (i.e. will they be void or only enforceable up to a maximum of three months?).
This change requires primary...
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