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Tuesday, September 26, 2023

UK: session paperwork present extra element on non-compete, working time and TUPE reform proposals

The Authorities has now printed additional particulars of the proposed reforms to employment legislation introduced in its coverage paper on 10 Could (see our submit right here).


The response to the 2020 session right here confirms the next:

  • the proposed statutory restrict of three months shall be utilized to non-compete clauses solely, and never different varieties of restrictive covenant resembling non-solicitation or non-dealing clauses;
  • widespread legislation ideas will proceed to use to non-competes of three months or much less (so they are going to stay enforceable provided that they go no additional than within reason mandatory to guard reputable commerce pursuits);
  • the restrict shall be utilized to contracts of employment and ‘limb (b)’ employee contracts solely, and never different contractual agreements resembling partnership agreements, LLP agreements, and shareholder agreements;
  • the Authorities acknowledges that employers might reply to the proposed restriction on using non-competes through the use of different varieties of restrictive covenants, backyard depart clauses, confidentiality clauses and mental property protections however considers that this response could be extra vital if non-competes had been banned utterly.  There is no such thing as a point out of any intention to scale back the three month restrict by setting off any interval of backyard depart;
  • there is no such thing as a info as as to if and the way the restrict would apply retrospectively to current contracts;
  • the opposite approaches thought-about within the earlier session, together with obligatory compensation and limits on an employer’s capability to unilaterally waive a covenant, is not going to be taken ahead. The Authorities will improve transparency by producing steerage on non-compete clauses;
  • as beforehand acknowledged, laws shall be introduced ahead “when parliamentary time permits”.

Given uncertainty as to the probably timescale and retrospectivity of those adjustments, it’s in all probability untimely for employers to vary their use of non-compete clauses in the meanwhile.  It might be prudent to assessment the drafting of different varieties of covenants, confidentiality/IP clauses, discover provisions and backyard depart clauses, to make sure applicable different protections are in place.

New session on working time and TUPE reform proposals

The Authorities is consulting till

  • Annual depart and vacation pay calculations: the proposal is to mix the EU-derived 4 weeks and the extra 1.6 weeks of depart right into a single depart entitlement ruled by one algorithm.  There could be no sensible change to the carry-over provisions, in that only one.6 weeks could possibly be carried over the depart 12 months finish (if that is offered for in a written settlement between employer and employee) and the remaining 4 weeks might solely be carried over the place a employee has been unable to take it because of being on long-term sick or household depart.  The session seeks views on whether or not the strategy of calculating minimal vacation pay for the brand new mixed entitlement ought to be ‘regular remuneration’ (as at the moment applies to the EU-derived 4 weeks’ depart) or primary pay (excluding additional time, bonuses, and fee).  The Authorities additionally proposes clarifying that staff accrue their annual depart entitlement on the finish of every pay interval till the tip of their first 12 months of employment.
  • Rolled-up vacation pay: the Authorities proposes permitting rolled-up pay at 12.07% of a employee’s pay on every payslip (offered it’s clearly proven on the payslip), for each irregular and common hours staff.
  • TUPE transfers: the session doc makes clear that the proposal is to permit employers with no applicable worker representatives in place to tell and seek the advice of staff straight the place both they make use of fewer than 50 staff in complete, or the switch impacts fewer than 10 staff (no matter measurement the employer is).  The session additionally asks for views as to different methods TUPE could possibly be improved.

To debate the implications of those proposals additional please do get in contact together with your ordinary HSF contact.

Anna Henderson

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