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Non-compete restrictions: should employers have to pay during the restricted period?

The government has issued a consultation paper outlining two proposals for amending the law in relation to post employment non-compete restrictive covenants:

  1. A complete ban on such restrictions, or

  2. In order for the restrictions to be enforceable, requiring employers to continue paying remuneration during the period of the restrictions.

In the paper, the government’s rationale for the proposals is “To support our economic bounce back, the Government is exploring avenues to unleash innovation, create the conditions for new jobs and increase competition. We want to maximise opportunities for individuals to start new businesses, find new work and apply their skills to drive the economic recovery. For these reasons we are seeking views on reforms to noncompete clauses”.

The consultation closes on the 26 February 2021.



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