Burnham Promises Curb on Non-Compete Clauses Ahead of Budget
Andy Burnham has promised to curb how firms can restrict what staff do after they leave.
Speaking at a business summit in Manchester, Mr Burnham confirmed the government will bring legislation to ensure non-compete clauses can "no longer be a barrier" to hiring new staff. He said details will be published alongside the Budget on 28 October. BBC
Mr Burnham said the use of non-compete clauses in employment contracts had "gone too far". He said it was holding back innovative UK companies.
The choice of language here is revealing. It pitches the policy as pro-enterprise rather than pro-regulation. It links two arguments. One is about workers moving freely. The other is about firms being able to recruit.
Mr Burnham said the clauses had forced workers to go without pay after leaving a role. He also said they made it harder for growing firms to hire staff.
He suggested the change could be the "Bosman ruling for the innovation sector", a reference to the football case that let players move clubs more freely. He said the limits would help "promising start-ups and scaling firms" as well as the "everyday economy".
Research cited by the government estimated about 5 million jobs in Britain are covered by non-competes. The typical length is about six months.
The relevance of that figure in Whitehall is scale. It is used to argue the issue is widespread, not limited to senior executives or niche technology roles.
Mr Burnham said there was "more to do" on tax to encourage promising firms to stay in the UK. He did not set out what that would involve.
Earlier reporting had put the pledge in stronger terms. The Financial Times reported on 8 October that Mr Burnham had pledged to end the use of non-competes, calling them a "drag on innovation". Financial Times A separate report on 9 October said he was set to announce a clampdown on non-competes and long notice periods. Personnel Today
The broader context here is familiar in Whitehall. Reform of post-termination restraints has been discussed for several parliamentary sessions. Past consultations stalled on enforceability, compensation, and the line between legitimate protection of trade secrets and unreasonable restraint of trade. A Bill would need to define scope, duration, earnings thresholds if any, transitional provisions and enforcement.
Looking at what this means for employers and advisers, three questions stand out. First, whether legislation will impose an outright ban, a time cap, or a requirement for paid garden leave. Second, whether long notice periods and non-solicitation and non-dealing covenants are in scope or left for case law. Third, how the tax measures trailed for the Budget interact with the employment reform. For start-ups and scale-ups, hiring timelines matter as much as headline rights.
Looking ahead, ministers will expect business support. They will also expect pushback from firms that rely on non-competes to protect client relationships and proprietary processes. Parliament will test the drafting closely.
