Ministers have set out plans to curb the use of non-compete clauses in UK employment contracts, in a move that would upend the approach of major employers to retaining their staff.
The Department for Business and Trade on Wednesday outlined proposals that could ban non-compete clauses outright, or introduce a minimum salary threshold or limits on the length of time for which they can apply — reviving a drive that began under the previous Conservative government.
Non-compete clauses are used to restrict workers’ ability to work for, or set up, a rival after they have left a job. The government said they were worsening persistently low job mobility, putting downward pressure on wages and making it harder for fast-growing start-ups to hire and expand.
John Van Reenen, growth adviser to chancellor Rachel Reeves, is among economists whose research found use of the clauses to be more widespread in the UK than the US or Europe, with about one worker in four subject to them.
Accounting and consulting groups, technology companies and financial services groups are among the biggest users of the clauses. They applied to 40 per cent of staff at companies in the first two sectors and 30 per cent of workers in the last, the UK competition watchdog said last year.
But they are also widely used in low-paid sectors, for example to deter hairdressers or childcare workers in nurseries from moving to local rivals and taking clients with them.
Workers bound by non-competes can be locked out...
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