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Tuesday, September 15, 2026

Non-compete clauses to be capped at three months as the ... - Macfarlanes

The Government has announced a number of employment law measures in its policy paper: Smarter Regulation to Grow the Economy. The measures are intended to create a more competitive and productive economy by reducing existing regulation which the Government considers places an unnecessary burden on business, impedes competition or acts as a block on innovation. The proposed measures target three areas: non-compete clauses, the Working Time Regulations and TUPE.

  • Non-compete clauses: the Government intends to legislate to limit the length of non-compete clauses to three months. This is expressly stated not to interfere with the use of paid notice periods, i.e. gardening leave, non-solicitation clauses or confidentiality clauses. No detail is provided on the impact on paid non-competes or indirect restrictions, nor is there commentary on how this will impact non-competes in sale agreements, or in carried interest agreements or other quasi-employment documents such as consultancy agreements. The policy paper estimates that this change will affect up to five million UK workers. This radical change would require primary legislation, which the Government’s paper notes will be introduced "when Parliamentary time allows" – no further consultation or timeframe is indicated at this time.
  • The Working Time Regulations: the Government will consult on proposals to improve how the Working Time Regulations work including removing “time-consuming and disproportionate” requirements on...


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