Posts Tagged ‘employment’

Lawrence Stephens advises Genuine Dining on its acquisition by WSH

Posted on: September 26th, 2024 by Hugh Dineen-Lees

Lawrence Stephens advised workplace caterer Genuine Dining and its shareholders, including investor Luke Johnson and CEO Chris Mitchell, on its acquisition by WSH, a leading food and hospitality company.

This acquisition by WSH will support Genuine Dining’s growth and development in partnership with an industry-leading business.

The team was led by Director James Lyons and Managing Director Steven Bernstein, with assistance from Solicitors Lucy Cadley, Carla Bernstein, and Avni Patel from our Corporate and Commercial team. Employment advice was provided by Senior Associate Joanne Leach and Solicitor Becci Collins.

CEO of Genuine Dining, Chris Mitchell, commented: “The excellent advice and personal attention of the team at Lawrence Stephens were a huge help in making this transaction as smooth as possible.

Director James Lyons added: “We are delighted to have advised the selling shareholders of Genuine Dining on this significant transaction – Lawrence Stephens has worked alongside Luke, Chris and the rest of the Genuine Dining team for a number of years and the sale to WSH marks an exciting moment in the continued growth ambitions of the business.”

If you need assistance with a corporate transaction or need advice on the drafting of employment agreements, please contact a member of our Corporate and Commercial or Employment teams.

Emma Cocker comments on Employment Tribunals and the Employment Bill in City A.M.

Posted on: August 29th, 2024 by Hugh Dineen-Lees

With the upcoming Employment Bill on the horizon, Senior Associate in the Employment team Emma Cocker comments on whether current Employment Tribunals will be fit for purpose, in City A.M.

Emma’s comments were published in City A.M., 28 August 2024, and can be found here.

“The government’s intention to significantly expand employment rights will have a monumental effect on employment tribunals. We already know that tribunal claims are up by around 7% compared with 2022/23 with over 650,000 open cases. Giving employees protection against unfair dismissal from day one of their employment along with the extension of time limits for bringing claims from three to six months is likely to significantly effect the Tribunal’s ability to deal with cases in a timely manner. 

“Worryingly, parties are already experiencing significant delays, with some cases taking over 18 months to reach a final hearing. Complex discrimination claims face the longest waits, with Tribunals struggling to find capacity for hearings that are often listed for a minimum of seven days.  

“The former Conservative government had consulted on the reintroduction of Tribunal fees; however these were nominal and would be unlikely to make any difference in combating delays. The current government’s main solution appears to be the digitisation of claims, but it is unclear what further improvements are proposed beyond the existing online platform for submitting claims and liaising with the Tribunal. 

“Employment Tribunals could become overwhelmed with increased claims on top of already long delays, meaning both employers and employees may face longer waits to resolve workplace disputes.”

If you would like any advice on the upcoming Employment Bill or Employment Tribunals, please contact a member of our employment team.

Joanne Leach comments on anti-bullying policies in People Management

Posted on: August 6th, 2024 by Natasha Cox

Joanne Leach, Senior Associate in the Employment team, comments on a recent study which found that more than half of UK employees do not think that shouting at work counts as bullying and discusses how employers can address workplace bullying.

Joanne’s comments were published in People Management, 5 August 2024, and can be found here.

“Adopting an anti-bullying and anti-harassment policy is merely the first step an employer must take towards addressing workplace bullying. To ensure it is effective, employers must also train the whole workforce on what is required of them regarding their interaction with colleagues.

“What constitutes ‘acceptable conduct’ has shifted significantly in recent years, and behaviour that used to be tolerated can now lead to significant liabilities for an individual and their employer.

“When an incident of bullying occurs, employers are more likely to minimise liability with clear grievance and whistleblowing policies in place which employees can access and managers can understand.

“Policies that address workplace culture, such as a clear diversity, equity and inclusion policy and training on unconscious bias and allyship, also empower employees to support their colleagues and call out wrongdoing if they witness unacceptable conduct.”

If you would like any assistance in developing whistleblowing, workplace culture or diversity, equality and inclusion policies, please contact a member of our Employment team.

Employment law insight: what were the BBC’s obligations during the Huw Edwards scandal?

Posted on: August 5th, 2024 by Natasha Cox

The BBC have come under questioning regarding its handling of the Huw Edwards case in the wake of him pleading guilty to child sex offences on 31 July 2024. There is a particular focus on the period of Edwards’ suspension from July 2023, when he continued to receive his full pay of £475,000 per annum, and also received a pay rise of £40,000 during this time. We now know that the BBC were made aware of his arrest during November 2023. The underlying question here is whether his employer should have dismissed him at this point.

Putting aside the awful nature of his crimes, there is no getting away from the fact that, from an employment law perspective, the BBC had obligations towards Edwards until his resignation in April 2024.

Obligations during suspension

Once an employer is made aware of allegations of criminal activity and criminal charges relating to its employee, they are obligated to investigate to try and obtain as much information as possible.

Right to suspend

In most cases of gross misconduct (and more serious cases of simple misconduct), employers should consider suspending an employee pending the results of their investigation. Whilst suspension is by no means the default position, the ACAS code of Practice suggests suspension is acceptable if the employer reasonably believes it would be protecting any of the following:

  • the investigation: for example, if you’re concerned about someone damaging evidence or influencing witnesses;
  • the business: for example if there’s a genuine risk to your customers, property or business interests;
  • other staff; or
  • the person under investigation.

During the suspension, the employer will need to carefully consider decisions surrounding pay. Unless there is a clear contractual right to do so, the employer is not entitled to suspend a salaried employee without pay or contractual benefits.

In this case, if the BBC withheld or reduced Edward’s pay during his suspension, there would have been a risk of legal action by Edwards, although it is questionable whether Edwards would have wished to attract further media attention by instigating legal proceedings. In fact, there would still have been a risk of legal action, such as a claim of constructive unfair dismissal even if the contract allowed reduced or no pay during suspension.  

Would it have been fair to dismiss Edwards from November 2023, had he not resigned in April 2024?

Following the allegations, careful consideration ought to have been given to the pending disciplinary process and what action to take.

Prior to any dismissal, employers should consider the following:  

  • nature of the conduct: in cases of misconduct, consider whether actions or allegations relating to actions outside of work are sufficiently serious to warrant disciplinary action at work. Sometimes even cases that appear to be obvious misconduct affecting employment can lead to successful claims of unfair dismissal, such as in Walters v Asda Stores.
  • the evidence: when considering dismissal, the employer should endeavour to have as much information as possible prior to making any decision.
  • employee’s health: prior to any dismissal, the employer ought to consider whether there are any allegations or information to suggest ill-health on the part of the employee. If so, the employer ought to investigate the employee’s health. If the employee refuses to co-operate, it may be fair for the employer to dismiss.
  • the procedure: an employer must still follow a fair and reasonable procedure if an employee is accused of misconduct, including gross misconduct. What is fair and reasonable will vary from case to case, but there are certain minimum requirements, which ought to be followed in all cases. For example, employees have the right to be accompanied by a colleague or Trade Union representative at a disciplinary hearing.

In the case of Edwards, the complexity arises from the fact his criminal activity and convictions were unrelated to his work. Further, at the time of his arrest, the BBC claimed it did not have all the details surrounding the offences. It was also known that Edwards was hospitalized due to experiencing severe mental health issues which had worsened since the allegations were made. 

While criminal allegations or convictions alone may not justify disciplinary action or dismissal, there may still be grounds to dismiss. An employer may be able to establish a potentially fair reason for dismissal, if they can show there is misconduct sufficiently serious to justify dismissal for some other substantial reason. 

Employers may consider that an employee’s conduct (in this case criminal conduct outside of the workplace) is sufficiently serious to justify a dismissal on the basis that continuing to employ them would have a reputational impact. They would have to consider the nature of the offence and whether this will attract negative publicity. If so, they would need to consider reputational risk, as well as their health and safety obligations towards other staff, or service users. 

In the case of Edwards, given the nature of his offending, the reputational damage would have had a huge negative effect on the reputation of the BBC – a body that must be seen to uphold the highest standards. Had Edwards not resigned and the BBC continued to employ him, this would have exposed the BBC to disrepute, scandal and contempt. Edward’s link to the BBC could have caused sufficient damage to its reputation to affect the amount of licence revenue the BBC could generate for years to come.   

The BBC probably had all these considerations in mind when it decided not to dismiss Edwards. Edwards had not been found, or pled, guilty and the complex investigation was still ongoing. He was also hospitalised due to a mental health crisis. Failing to follow a fair and reasonable procedure, and disregarding his ill-health, could have exposed the BBC to liability for a claim of unfair dismissal. However, had Edwards not resigned in April 2024, the BBC would have had fair reason to dismiss him following his guilty plea.

When should an employer take action against the employee?

There are no hard and fast rules to apply when determining whether to go ahead with disciplinary proceedings when there is a criminal trial pending. The most important thing is for the employer to conduct its own investigations into the issues and to properly consider the options available in line with their requirements in the Employment Rights Act 1996. Employers have discretion whether to postpone disciplinary action where the employee’s misconduct is also the subject of a criminal investigation and prosecution. Even in emotive cases such as this, an employer ought to be careful not to act precipitously. 

BBC’s obligations to other staff

Whistleblowers who gave evidence to the BBC internal inquiry into Huw Edwards have criticised the way it was handled. One staff member says they were sent flirtatious private messages by the presenter in 2023. They complained that they had not been kept informed about the progress of the inquiry. Another staff member claimed that Edwards sent suggestive messages alongside a picture of his hotel suite.

Such allegations may constitute whistleblowing, which affords the employee various protections from dismissal and detriment, on the ground that they have made a protected disclosure. Providing effective protection for whistleblowers is important for several reasons, including:

  • encouraging a speak-up culture;
  • internal risk control;
  • limiting reputational damage;
  • protecting staff morale; and
  • avoiding unnecessary litigation.

If an employee is dismissed or is subjected to detriment on the ground that they have made a protected disclosure, this can expose the employer to potential tribunal claims for automatically unfair dismissal or whistleblowing detriment. Importantly, financial compensation in respect of these claims is uncapped, so employer liability can be significant.

When someone blows the whistle, the employer should explain its procedures for making a disclosure and whether the whistleblower can expect to receive any feedback. Often a whistleblower expects to influence the action the employer might take, or expects to make a judgement on whether an issue has been resolved, but this will rarely be appropriate.  

It is in the employer’s best interests to deal with a whistleblowing disclosure promptly. This allows the employer to fully investigate, make any further necessary enquiries and determine any appropriate action.  

There are several things an employer should do when a whistleblowing disclosure is made. It is important to make sure that as an employer, you:

  • handle any whistleblowing complaint fairly and consistently;
  • follow any process your organisation has for whistleblowing; and
  • keep the identity of the whistleblower confidential. 

The Government’s Whistleblowing Code of Practice encourages clear and prompt communications between the whistleblower and the employer. They should provide feedback to whistleblowers, within the confines of their internal policies and procedures. This is vital so that whistleblowers understand how their disclosure has been handled and dealt with. Failing to do so may result in the whistleblower approaching other individuals or organisations to blow the whistle externally. Therefore, it is strongly advisable for an employer to have a policy which explains the benefits of making a disclosure, the process and how the disclosure will be dealt with.

Takeaways from this case

It is reasonable to say that this case is far more complex than it may have initially appeared. If you need further guidance in relation to employee misconduct, suspension or dismissal, or you need a whistleblowing or disciplinary policy, please speak to our specialist employment team.

 

 

 

 

New duty imposed on employers to prevent sexual harassment in the workplace

Posted on: April 10th, 2024 by Natasha Cox

A new duty will be imposed on employers to prevent sexual harassment in the workplace from October 2024.

Currently workers are protected against sexual harassment carried out at work by their employer or its employees under the Equality Act 2010. Sexual harassment is defined as unwanted conduct of sexual nature which has the effect of violating the victim’s dignity, or creating an environment that is intimidating, hostile, degrading, humiliating or offensive.

Employers are also liable for sexual harassment carried out by their employees during the course of their employment, even if the employer was not aware of their actions.  However, employers may have a defence if they can show that they took “all reasonable steps” to prevent the harassing employee from acting unlawfully. However, the new rules will go further, placing employers under a duty to consider what steps can reasonably be taken to ensure that sexual harassment does not occur in the first place. This represents a shift from the current post-harassment liability to a proactive duty, and employers must therefore prioritise the prevention of sexual harassment in the workplace.

However, employees will not be able to bring standalone claims in the employment tribunals for a breach of the new duty. Instead, an uplift to compensation of up to 25% may be made to successful sexual harassment claims where an employer is found to have breached the new duty.

It is currently unclear what proactive “reasonable steps” employers are required to take, but the government has confirmed that further guidance will be published later this year. The Equality and Human Rights Commission will also issue a Code of Practice. We consider that  reasonable steps are likely to include implementing anti-harassment policies and procedures and training the workforce appropriately.

Although the new duty does not come into force until October 2024, employers should review the current suite of relevant policies to ensure they offer as much protection as possible. Contact us if you need assistance with such policies, or in dealing with complaints of sexual harassment.

Tribunal compensation limits increase

Posted on: April 7th, 2024 by Natasha Cox

From 6 April 2024, new increased compensation limits for employment tribunal claims will come into force under the provisions of the Employment Rights (Increase of Limits) Order 2024.

The changes are as follows:

  • maximum amount of a week’s pay (used for calculating a redundancy payment or for various awards including the unfair dismissal basic award): £700 (increased from £643)
  • limit on amount of unfair dismissal compensatory award: £115,115 (increased from £105,707)
  • minimum amount of unfair dismissal basic award for trade union, health and safety, working time representative, pension scheme trustee and employee representative dismissals: £8,533 (increased from £7,836)
  • minimum amount for unlawful exclusion or expulsion from trade union: £13,032 (increased from £11,967)
  • maximum guarantee payment per day: £38 (increased from £35)
  • amount for unlawful inducement relating to trade union membership/activities or collective bargaining: £5,584 (increased from £5,128)

With effect in respect of claims presented on or after 6 April 2024, the Presidential Guidance on the Vento bands for making awards for injury to feelings in discrimination claims is being amended by a Seventh Addendum which increases the bands to:

  • £1,200 to £11,700 for the lower band—less serious cases (previously £1,100 to £11,200)
  • £11,700 to £35,200 for the middle band (previously£11,200 to £33,700)
  • £35,200 to £58,700 for the upper band—the most serious cases (previously £33,700 to £56,200)
  • £58,700 and above for the most exceptional cases (previously £56,200 and above)

The potential pitfalls of unlimited annual leave

Posted on: March 20th, 2024 by Natasha Cox

Many employers including LinkedIn, Netflix, Eventbrite and Dropbox are now offering their employees unlimited annual leave.

Unlimited leave reflects a significant uplift on the statutory minimum position. Under the Working Time Regulations 1998, full-time employees are legally entitled to 5.6 weeks’ paid holiday each year, which translates to 28 days, including bank holidays. Part-time staff are also entitled to 5.6 weeks, the number of days being dictated by how pro-rated their working time is.

While undoubtedly a great selling point to potential new recruits, is unlimited annual leave more hassle than its worth for an employer?

Potentially, yes. Employers need to be extremely careful when implementing an unlimited annual leave policy because failing to set appropriate expectations and creating a clear and well-structured policy could lead to significant problems. For example, how does one calculate the annual leave owing (or owed) when an employee’s employment comes to an end if this is not specified in their contract or the leave policy? Likewise with the continued accumulation of leave during a period of family leave.

No employer is likely to be content with an employee taking 52 weeks’ annual leave in a leave year, not least because they won’t be able to do the job that they’re employed to do. If you are offering unlimited annual leave, employers must ensure adoption of and adherence to minimum performance criteria, as well as having robust performance measures in place to objectively assess how well the employee is performing.

Further, employees will still need their manager’s permission to take time off, which could result in the policy being enforced differently from one manager to another. This may lead to accusations of favouritism, or differing treatment of employees in relation to any of the nine protected characteristics under the Equality Act 2010.

Lack of cover during an employee’s holiday may also discourage them from taking time off, undermining the incentive for annual leave altogether.

It is ultimately important to strike a balance between the needs of the business for employees to carry out the jobs they are employed to do, and the ability to attract and retain the right talent. While offering unlimited annual leave is certainly likely to assist with recruitment and retention, its implementation needs careful handling to avoid unintended consequences.

Talk to us if you would like to discuss the pros and cons of enhanced employee benefits.

Proposal to reintroduce employment tribunal fees

Posted on: January 10th, 2024 by Natasha Cox

The government has announced a consultation on the proposal to reintroduce fees for bringing employment tribunal claims.

First introduced in 2013, employment tribunal fees saw claimants having to pay separate fees to issue their claims and to have them heard. Fee levels differed according to the nature of the claim.

On 26 July 2017, the Supreme Court declared employment tribunal fees to be an unlawful interference with the common law right of access to justice and the fees were subsequently abolished.  

However, the government has now announced proposals to reintroduce tribunal fees. Under the proposed scheme, tribunal issue fees would be at the flat rate of £55 per claim. In the event of a multi-claimant claim, the fee would be unchanged, with the multiple claimants being treated as a single entity. No separate hearing fee would be payable.

The £55 fee would also apply on lodging an appeal in the Employment Appeal Tribunal (EAT), however the fee would apply per tribunal decision, direction or order being appealed. Therefore, an appellant seeking to appeal more than one tribunal decision or direction could incur multiples of the £55 fee.

A fee exemption would apply in the case of claims in which individuals are seeking a right to payment from the national insurance fund. Further, individuals could apply under the Help with Fees remission scheme where eligible. 

Based on 2022-23 volumes, the government estimates that the proposed fees could generate between £1.3 million and £1.7 million a year from 2025-26 onwards. It is expected that, if the consultation is successful, these new fees will be implemented from November 2024. For now, the status quo remains and claimants may continue to submit claims free of charge. However given the modest level of proposed fees and the cost of administering the employment tribunal, it is arguably not unreasonable to expect that fees will be reintroduced.

Round up of 2023 employment law

Posted on: December 18th, 2023 by Natasha Cox

As 2023 draws to an end, the employment team at Lawrence Stephens examines employment law developments of 2023 and what we’re expecting in 2024.

Holiday and holiday pay

Changes have also been made to the Working Time Regulations 1998.

All employees are entitled to 5.6 weeks’ annual leave entitlement per leave year. The 5.6 weeks is split into two ‘pots’: one pot of ordinary leave, which is four weeks, and one pot of 1.6 weeks additional leave.

Ordinary annual leave should be paid at the employee’s ‘normal’ rate of pay. This does not necessarily apply to the additional leave.

The government is amending regulations to set out what elements of pay are to be included as ‘normal’ for the purposes of the first four weeks’ leave entitlement. Unfortunately, the regulations do not list specific payments that should be included, and instead refer to certain categories, including:

  • payments, including commission payments, which are ‘intrinsically linked’ to the performance of tasks that a worker is contractually obliged to carry out;
  • payments for professional or personal status relating to length of service, seniority or professional qualification; and
  • other payments, such as overtime payments, which have been regularly paid to a worker in the 52 weeks preceding the calculation.

As per previous case law, results-based commission, certain overtime payments, allowances, etc., will still be caught, however there is still uncertainty about payments such as annual or semi-annual bonuses, and it remains to be seen whether this amendment changes much.

For irregular hours workers and part-year workers (both now defined in the regulations), the government is also introducing a new method to calculate their holiday entitlement. Essentially, an irregular hour worker or a part-year worker accrues annual leave at the rate of 12.07% of the number of hours worked, subject to a maximum of 28 days per leave year. A worker will be an ‘irregular hours worker’ if the number of paid hours that they work is ‘wholly or mostly variable’. A worker will be a ‘part-year worker’ if they are required to work only part of that year and there are periods of at least a week in which they are not required to work (and for which they are not paid). This change is intended to address the issues caused by the Supreme Court’s decision in Harpur Trust v. Brazel, in which it held that part-year workers were entitled to 5.6 weeks’ leave per year, irrespective of the hours they worked. 

The government is also introducing ‘rolled up holiday pay’ for irregular hours workers and part-year workers. Rolled up holiday pay is a system under which a worker’s holiday pay is included in their basic pay, rather than paying them when their holiday is actually taken. The practice has been unlawful since 2006 but will now be lawful under the updated regulations.

These changes come into force on 1 January 2024 for holiday years commencing on or after 1 April 2024.

TUPE

The government has announced its intention to change the transfer of undertaking consultation obligations so that there can be direct consultation with affected staff for businesses with fewer than 50 employees, or businesses of any size with fewer than 10 transferring employees. This assumes in both cases that no existing employee representatives are already in place. The regulations are expected to come into force on 1 January 2024 and the changes will apply to transfers that take place on or after 1 July 2024.

National Insurance and Minimum Wage

Class 1 employee NICs will be cut from 12% to 10% from 6 January 2024.

The NICs holiday for veterans in their first year of civilian employment will be extended to 5 April 2025.

For the self-employed, Class 2 NICs will be abolished, and the main rate of Class 4 self-employed NICs reduced from 9% to 8%, from 6 April 2024.

New national minimum wage rates to apply from 1 April 2024 have also been announced, along with a change to the threshold for being eligible for the highest rate. Over 21s will now be entitled to £11.44 per hour, with 18- to 20-year-olds being entitled to £8.60 per hour. 16- to 17-year-olds and apprentices will be entitled to £6.40 per hour.

Fire and rehire

The government has issued a draft Code of Practice on dismissal and re-engagement. It is designed to cover situations such those seen recently with P&O, where an employer makes changes to terms and conditions by dismissing employees under their old contracts and offers to re-engage them on new contracts (with less favourable terms and conditions).

The aim of the code is to clarify how employers should behave when seeking to change employees’ terms and conditions of employment. A court or tribunal will be able to take the code into account when considering relevant cases and they will have the power to increase an employee’s compensation by up to 25% if an employer unreasonably fails to comply with the code. They could also decrease any award by up to 25% where an employee has unreasonably failed to comply.

The consultation on the Code closed on 18 April 2023 and it is anticipated that the government’s response will be delivered in Spring 2024. While the code is still in draft form it is not binding, but any proposed fire and rehire processes should be carefully considered in the meantime.

Flexible working

The Flexible Working (Amendment) Regulations 2023 come into force on 6 April 2024. The regulations amend the existing Flexible Working Regulations 2014 so that the right to make a flexible working application becomes a ‘day one right’ on 6 April 2024. Currently employees must have 26 weeks’ continuous service to make a flexible working request under the legislation (however, nothing prevents employers and employees agreeing flexible working arrangements between themselves, whether formally through contractual variations, or informally). 

It is assumed that the other flexible working reforms contained in the Employment Relations (Flexible Working) Act 2023 will also commence on that date, but this has not yet been confirmed. These reforms will:

  • allow employees to make two flexible working applications every 12 months instead of one;
  • remove the requirement for employees to have to explain what effect they think their flexible working request will have on the employer;
  • require employers to consult with the employee before refusing their flexible working application; and
  • require employers to respond to flexible working requests within two months instead of three months.

Carer’s leave

The draft Carers’ Leave Act 2023 (Commencement) Regulations 2023 have been published, bringing the Carers’ Leave Act 2023 into force from 6 April 2024.

The draft regulations set out important detail relating to the Act. They state that the legislation will cover employees in England, Wales and Scotland. To be entitled to the provision, employees need to be providing long term care. Carer’s leave will be able to be taken in half or full days, up to and including taking a block of a whole week of leave at once. In a similar way to other types of leave, the notice an employee needs to give to take the leave is twice the length of time that needs to be taken. Leave requests do not need to be made in writing.

Employees taking carer’s leave will have the same employment protections associated with other forms of family related leave. This includes protection from dismissal or detriment as a result of having taken the leave.

The draft regulations still need to be passed by Parliament and it is also expected that guidance will be made available before 6 April.

Strike action

The Strikes (Minimum Service Levels) Act 2023 was passed in July. The act gives powers to make regulations to set minimum service levels in certain industries during strike action. The government has now made regulations under these powers to set minimum service levels for ambulance, railway and border security staff. Although the regulations are not yet in force, they are expected to be by the end of the year. A draft code of practice has also been laid before Parliament, but no minimum service levels are yet in force.

Government consultation response: non-compete clauses to be limited to three months

Posted on: October 25th, 2023 by Natasha Cox

The government has announced plans to limit the length of non-compete clauses in employment contracts in its response to a 2020 consultation on their reform.

Non-compete clauses are one of several types of post-termination restrictions that are often found in employment contracts. These restrictions typically restrict an employee’s ability to work for a competitor for a set period following the termination of their employment, but can also restrict their ability to canvass or solicit clients and customers, as well as poaching colleagues.

To be enforceable, restrictions must not be any wider than reasonably necessary to protect legitimate business interests. Examples of legitimate business interests include client, supplier or customers relationships, and confidential information.

Non-compete clauses are the most restrictive option, with employees frequently seeking to argue they prevent them from securing alternative employment during the restricted period. 

In 2020, the Government published a consultation paper exploring options for reform, including mandating that non-compete clauses be unenforceable unless the employer provides compensation for the period of restraint, or making all non-compete clauses unenforceable.

The government has now rejected the possibility of making employers pay employees during a restricted period, citing concerns around substantial costs and supressing growth. Instead, it has proposed to limit the period of non-compete restrictions to just three months.

While these are just proposals, and properly drafted non-compete clauses lasting longer than three months continue to remain effective at present, employers need to carefully consider the impact on their business if the option to have a longer non-compete period is removed. It is worth considering what other protections can be put in place to achieve as near as possible the same level of protection currently afforded by a non-compete restriction.

Contact us for advice on post-termination restrictions and updating your contracts of employment.