The UK government has said it will legislate on non-compete clauses, starting with the hiring of workers at start-ups and scaling firms. The commitment came in a speech on 9 October, and it arrived with no bill, no date and no definition of which companies count. For HR teams, that leaves a gap between a political signal and a legal change.
What the Prime Minister said
Prime Minister Andy Burnham made the announcement at the Innovation Nation Summit in Manchester. The published transcript of the speech records how he framed the problem: “I believe some businesses have gone too far in their use of restrictive practices such as non-compete clauses.” (Andy Burnham, Prime Minister, UK Government.)
He described the clauses as stopping workers from joining a rival organisation, or setting up one of their own, after they leave a role. He said workers are often held back and unpaid during the period they have to sit out, and that the effect is to stunt innovation and trap workers.
Then came the commitment itself. The Prime Minister said the government will legislate so that non-compete clauses are no longer a barrier to hiring for “our most promising startups and scaling firms”. He added a second, wider promise: workers in the foundational economy, the everyday economy, should not be prevented from moving jobs either. The government will also bring forward options on the wider use of restrictive practices.
What is settled and what is not
Three things are on the record. The government intends to legislate. The first target is non-compete clauses that block hiring by start-ups and scaling firms. And the Prime Minister extended the principle, in general terms, to workers in the everyday economy.
Several things are not. The transcript names no bill and gives no date. It does not say whether the change will be a ban or a cap on duration. It does not define “promising” or “scaling”, which matters because any threshold in the statute decides which employers’ existing contracts are affected. It says options on the wider use of restrictive practices are coming, but it does not list them. The transcript names non-compete clauses only, so notice periods, garden leave and non-solicitation terms are not covered by anything the Prime Minister said on the day.
That distinction is the practical point for HR. A speech does not change an enforceable contract. Every non-compete currently in an offer letter or employment agreement stays enforceable on its present terms until Parliament passes something that says otherwise.
What it means for the HR leader
The sensible response is an inventory, not a rewrite. A non-compete reform would sit alongside the changes covered in our piece on three UK employment rights changes before 2027, with the difference that this one has no date yet.
Start with where restrictive terms live. Contract templates, executive agreements, equity award documents and settlement agreements can each carry their own covenant, and they are often drafted by different teams. A single register of who is bound by what, for how long and under which document lets legal counsel answer quickly once the draft legislation appears.
Then split the register by exposure. Roles in start-ups and fast-growing companies sit closest to the stated scope. Roles in larger employers sit in the wider-practices bucket, where the government has promised options but not decisions. Treat the two groups differently in planning, because the first group has a firm commitment behind it and the second has a promise to produce proposals.
Recruiters feel the change from the other side. Candidates who today decline offers because a covenant binds them, or who ask a prospective employer to cover the cost of sitting out, are the people the Prime Minister described. Talent acquisition teams that hire from competitors should record which hires arrived with restrictions and how those were resolved. That history shows what the legislation would have changed.
Employee records matter here too. Our piece on the UK tribunal claim window doubling to six months from 1 October is relevant background. When claims can be brought later, the paperwork behind each term has to stay findable for longer, and a restrictive covenant is a term worth being able to produce on request.
A note on scope
The Prime Minister tied the commitment to innovation and hiring by growing firms, which is a narrower case than a general ban. Employers outside technology should not assume they are out of scope, though. He also said workers in the everyday economy should not be prevented from moving jobs, and the government has promised options for the wider use of restrictive practices. How those two statements fit with the start-up commitment is a drafting question that nobody has answered yet.
Where employers should watch next
Watch for the vehicle first. A government that says it will legislate has to choose between a standalone bill, an amendment to existing employment legislation or secondary powers, and each route implies a different timetable and a different level of parliamentary scrutiny. Watch for the definition second. The wording that fixes which firms count as start-ups or scaling firms will decide whether the change reaches a handful of employers or a large share of the technology sector.
Watch third for the options paper on wider practices. The Prime Minister gave no date for it, but it is the document most likely to speak to notice periods and similar terms that employers use alongside covenants today.
Until those arrive, the position is simple. The commitment is real and public. The law has not moved. HR teams that map their covenants now will be ready for either outcome, and those that wait will be reading a bill and an inventory at the same time.
Source: UK Government, PM speech at the Innovation Nation Summit: 9 October 2026
