Recruitment

Sajid Javid promises action to improve employment rules that stifle startups

Fred Heritage | 25 April 2016 | 8 years ago

Non-compete clauses in employment contracts stop workers from competing against former employers for business
Non-compete clauses in employment contracts stop workers from competing against former employers for business
The government has announced plans to look into UK employment rules that could be suffocating entrepreneurship and the country’s small businesses.

In a speech on 24 April, the business secretary Sajid Javid launched a call for evidence? from small business leaders across Britain, asking for their views on non-compete clauses frequently written into employment contracts and which can prevent workers from competing for business against a former employer, or working for a competitor for a set period.

Such clauses are only enforceable and upheld to protect proven and legitimate business interests, yet it has been suggested that non-compete clauses reduce the ability of startups and small firms to hire top talent.

The call for evidence will ask employers and workers to submit views on whether non-compete clauses act as a barrier to innovation and UK employment, as part of the government’s wider Innovation Plan that aims to turn Britain into Europe’s most desired destination to start a business.

Javid said: I want to see more enterprising startups and greater productivity in a free and fair marketplace, by taking down any barriers that are curbing innovation and entrepreneurship.

Due to be published in late 2016, the Innovation Plan will look into a range of areas and set out a plan to turn Britain into a better place to turn ideas into new products and services.

Amongst other measures, the research will investigate how better regulation can boost innovation and create opportunities to use a larger proportion of public procurement funds to support new businesses.

Commenting on the government’s call for evidence, Enterprise Nation founder Emma Jones said: Entrepreneurial individuals need to be able to ease out of employment and into self-employment so a move to look into how employment contracts reflect this and the modern economy is warmly welcomed.

Unlike previous government research initiatives into entrepreneurship, it’s not yet clear whether a figurehead from the world of business will be chosen to lead the project. Previous government-led initiatives of a similar nature have seen leaders like lingerie mogul Michelle Mone and Conservative MP Lord Young deliver research findings to parliament.

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