Burnham promises to curb non-compete rules in job contracts

Andy Burnham, the UK's Prime Minister, has promised to limit the usage of non-compete clauses in employment contracts. Speaking at a business summit in Manchester, Burnham argued that these clauses were hindering innovation within firms. He pointed out that such clauses were forcing workers to go without pay post-employment and making it challenging for startups and scaling companies to attract new talent.

Ahead of the upcoming Budget, Burnham announced that the government would explore potential restrictions on non-compete clauses, including a total ban or a limit on their duration. Although non-compete clauses are typically associated with financial services and technology sectors, they cover around 5 million jobs in Britain, averaging six months in length.

Burnham emphasized that such clauses were acting as a barrier to hiring new staff and preventing employees from joining other companies or starting their own firms. He compared the potential impact of these restrictions to the 1995 Bosman ruling, which transformed the European football transfer market. While the government has been considering possible restrictions on non-compete clauses since late last year, Burnham did not disclose the scope of these proposed limitations.

However, he suggested they would apply broadly across various industries to support promising startups and scaling firms. The government plans to reveal further details of these restrictions alongside the Budget on October 28th.