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Employment rules ‘stifling’ entrepreneurship

Employment rules ‘stifling’ entrepreneurship

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Employment rules which prevent employees from starting up their own business after leaving a job could be stifling British entrepreneurship, the government has suggested.

The government has launched a call for evidence asking for views on what are known as ‘non-compete clauses’ – which can be written into employment contracts and can prevent individuals from competing against their former employer or working for a competitor for a set period of time, sometimes up to nine months after leaving a firm.

The clauses are only enforceable in a court of law if it protects a legitimate interest and is reasonable. However, there have been suggestions that they can hinder start-ups from hiring the best and brightest talent, so the government is asking for views from individuals and employers on whether this type of practice is acting as a barrier to innovation and employment.

UK businesses are being asked to give their ideas on how to make sure it works, with a survey asking for their views being launched online. The results of the survey will feed into the government’s Innovation Plan, which is due to be published later this year.

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