Forum cautiously welcomes the consultation on “non-compete” clauses
The Forum of Private Business welcomes the consultation on clauses that stop employees moving to a competitor of their current employer, so long as they ultimately protect our members businesses. The Forum would however, like the consultation framed within a wider review on how regulation can be changed to improve business productivity, a conclusion that NESTA has recently reached independently.
Banning such clauses would remove a layer of regulation, but needs to be addressed carefully as their removal could hit small employers more than it helps them. There is clearly the potential for larger firms to “poach” staff from smaller innovative competitors as a strategy to wreck projects that would disrupt the market. This could also leave innovative projects from smaller firms in tatters especially in an age where knowledge is a premium business asset.
Ian Cass, Chief Executive of the Forum of Private Business stated “currently the smallest employers pay ten times as much per employee in terms of complying with employment law as the large corporations, so anything that reduces this burden is helpful.
"However small employers currently put in non-compete clauses for good reason and this is something we help our members to do through our helpline. We feel instinctively that our members want faster, more effective resolution of such cases and that they will be worried that this consultation might lead to employees and competitors breaking the terms of the employment contracts with impunity” concluded Ian.
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The Forum operates a 24/7 helpline that offers insured advice to members on a wide range of compliance issues, the majority of which are employment law issues.
In addition the company provides to members a series of templates to help them to protect their business including contracts of employment and will advise members on whether or not to use non-compete clauses.
A wider review of regulation and its impact on the business climate was first suggested by the Forum in 2011 and is now a concept backed by a large number of organisations including NESTA