Recruitment trade bodies call for ‘sensible’ reform of non-compete clauses

With the consultation on non-compete clauses now closed, the government is being urged to approach any reforms with caution and to look at making sensible changes rather than an outright ban on using them.

Non-compete clauses

Non-compete clauses are added to employment contracts to restrict an employee’s ability to work for, or establish, a competing business after they have moved on from a job.

In January 2026, an online survey of 238 employers of different sizes and locations, undertaken by REC/Whitestone Insight, found that 55% of respondents said non-compete clauses were ‘very important’ or ‘fairly important’ to their business, with only 17% stating that they were not important.

Why an all-out ban on non-compete clauses would be disastrous

The Recruitment and Employment Confederation (REC) highlights that an all-out ban on non-compete clauses would mean that highly portable trade secrets can more easily be taken to a competing firm or be used to start a rival business.

They are vital to protect intellectual property, and there is no reason for intellectual property to enjoy any less legal protection than tangible property, argues the REC.

The unfair advantage could threaten the viability of existing firms and the jobs of their employees.

Both the REC and APSCo suggest a statutory six-month limit on the length of non-compete clauses would appropriately balance competing interests if the government is adamant on reform.

Shazia Ejaz, REC Director of Campaigns, said, “Non-competes work well on the whole, but a time-limit on their length is a reasonable middle ground to protect both employer and worker.

“The use of non‑compete clauses gives firms the confidence that their confidential information, intellectual property, trade secrets and customer relationships will not easily land in a rival’s hands. Strip away that protection, and you weaken the UK’s reputation as a place where enterprise can flourish, and businesses can grow.”

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