Non-Compete Clause UK: Burnham Confirms New Law

Quick answer: A non-compete clause in the UK is currently unenforceable unless the employer proves to a court it is reasonable. On 9 October 2026 Prime Minister Andy Burnham confirmed the government will legislate to stop non-competes blocking hiring, but no bill or start date exists yet, so existing contracts still apply.

Key takeaways

Andy Burnham confirmed on 9 October 2026 that the government will legislate on non-compete clauses, but nothing has changed in law yet.
Under current law a non-compete is unenforceable unless the employer shows a court it is reasonable.
The government's working paper weighed a time cap, an outright ban, a ban below a salary threshold, or a mix of both.
Around 5 million employees in Great Britain are estimated to have a non-compete, typically lasting about 6 months.
If your contract has one, check the wording and take advice before joining a competitor.

Last updated: 9 October 2026

The rules on a non-compete clause UK employers put in contracts are set to change. Speaking at the Innovation Nation Summit in Manchester on 9 October 2026, Prime Minister Andy Burnham confirmed the government will legislate so that non-compete clauses no longer block hiring by promising start-ups and scale-ups, the Wiltshire Times reports. No bill or start date has been published yet, so existing contracts still apply for now. This guide explains where things stand today, what reform options the government has already examined, and what you can do if your own contract contains one of these restrictions.

What is a non-compete clause in the UK?

A non-compete clause is a term in an employment contract that stops you working for a rival, or launching a competing business, for a set period after you leave. The Department for Business and Trade (DBT) describes these clauses as limits on a person's ability to work for, or establish, a competitor once they have moved on.

They sit within a wider family of restrictions often called restrictive covenants. Non-dealing clauses are one example the government names alongside them. Personnel Today notes that non-competes have become more common in technology and finance, where firms worry about trade secrets travelling to a competitor.

Is a non-compete clause in the UK enforceable right now?

Not automatically. Under current law the starting point is that a non-compete clause is unenforceable unless the employer can show a court that it is reasonable. The catch, as the government itself admits, is that there are few limits on employers adding these clauses to contracts in the first place.

That gap matters in practice. DBT's working paper points to YouGov polling in which roughly half of those asked thought their employer was likely to try enforcing such a clause. In county court or High Court claims the losing side usually pays the winner's legal costs, which can make workers cautious about testing a clause even when it may be too broad to stand up.

What did Burnham announce about non-competes?

The Prime Minister said ministers will bring in legislation so that non-competes stop getting in the way when fast-growing start-ups and scale-ups try to recruit. He added that people in everyday, lower-profile jobs should also be free to switch employers.

According to the Wiltshire Times report, Burnham argued that some firms have overused restrictive practices, leaving staff stuck on the sidelines, often without pay, after they leave. He described the plan as the "Bosman ruling for the innovation sector".

Ahead of the speech, Personnel Today and City AM, citing the Financial Times, reported that the crackdown would also target very long notice periods, with finer detail of the changes coming later. The exact rules, start date and any salary threshold have not yet been confirmed.

The pressure has been building for weeks:

Founders from fast-growing start-ups, including Synthesia, Fuse Energy and ElevenLabs, wrote to the Prime Minister and the Business Secretary describing these terms as "unfair", City AM reports.
Enterprise Britain's research, cited by City AM, found 87 per cent of scale-up bosses named non-competes as a barrier to their hiring plans.
Analysis by law firm Nockolds, cited by Personnel Today, shows High Court claims by employers seeking to enforce these clauses climbed 43% between January and September 2025.
The Confederation of British Industry (CBI) has previously argued there is little evidence these conditions hold back innovation, and City AM reports the move may provoke a backlash from more established businesses.

What non-compete clause UK reforms are on the table?

DBT has already tested four main options. It published a working paper on 26 November 2025, and responses were due by 18 February 2026. The paper set out these routes:

A statutory cap on length. The previous government said in May 2023 it would cap non-competes at 3 months, but no action followed. DBT also floated different caps by company size, such as 3 months for firms with more than 250 staff and 6 months for smaller ones.
An outright ban. Non-compete clauses in employment contracts would become unenforceable, similar to California.
A ban below a salary threshold. Clauses would only bite on higher earners. The paper uses the £125,140 additional rate threshold as one illustration.
A combination. A ban under a salary threshold, plus a 3-month cap for anyone above it.

The working paper also flags a risk with any cap: a statutory limit could start to be treated as an "industry standard", leading people to assume any clause within the limit is automatically valid. DBT said it would need to make clear that the existing reasonableness test still applies.

Who has a non-compete clause in the UK?

Far more people than the stereotype of the City banker suggests. Previous analysis cited in the government's working paper estimated that around 5 million employees in Great Britain (England, Scotland and Wales) have a non-compete in their contract, typically lasting about 6 months. Reports so far have not set out how any change would apply in Northern Ireland.

Competition and Markets Authority (CMA) research shows 20 to 30% of workers earning under £99,000 have a non-compete, rising above 40% for those on £100,000 or more.
Over 10% of teaching and retail workers have one, and over 20% of people in accommodation or food services.
YouGov polling found 71% of non-competes run for longer than 3 months, and some last up to 24 months.
Notice periods in parts of finance and big tech can reach 18 months, City AM reports, often spent on garden leave.

What should you do about a non-compete clause UK contract term?

Treat the clause as still live for now and get advice before you rely on any announced reform. A plan or speech is not law, and it has not been confirmed whether any change would cover contracts already signed.

Find the exact wording. Note the length, the area covered and which competitors or roles it names.
Check your notice period and garden leave terms. These can restrict you even if the non-compete is weak.
Negotiate before you sign. If you are job hunting, ask for a shorter or narrower clause at offer stage.
Get legal advice before moving to a rival. An employment solicitor or your trade union can assess whether the clause looks reasonable.
Keep confidential information separate. Enterprise Britain's call for a ban, for example, would keep protections for confidentiality and intellectual property in place.

Common mistakes to avoid

Assuming the clause disappeared the day the speech was made.
Ignoring other restrictive covenants, such as non-dealing clauses, which DBT says some employers might rely on more if non-competes were banned.
Taking client lists or files when you leave, which can breach other obligations.

What happens next?

Expect detailed proposals and then legislation. Watch for a formal government response to the working paper setting out which option it has chosen, any salary threshold or time cap, and a start date. Employment lawyers cited by Personnel Today have suggested that if non-competes go, businesses would lean more on other restrictions to guard confidential information and intellectual property.

What this means for you

If you work under a non-compete clause in the UK, the direction of travel favours more freedom to change jobs, but your current contract still stands today. Use this period to understand your terms, raise them when negotiating a new role, and take advice before joining a competitor. For more on your rights at work, see our guides Employment Tribunal Time Limits: New 6-Month Rule (UK), Third Party Harassment October 2026: New UK Rules and UK Job Vacancies at 702,000: What Jobseekers Need (2026).

Frequently asked questions

Are non-compete clauses legal in the UK?

Yes, employers can still include them, but they are unenforceable unless the employer can show a court that the restriction is reasonable.

Has the UK banned non-compete clauses?

Not yet. On 9 October 2026 Prime Minister Andy Burnham confirmed the government will legislate so non-competes no longer block hiring by start-ups and scale-ups, but no bill or start date has been published, so current contracts still apply.

How long can a non-compete clause last in the UK?

There is currently no fixed legal maximum. Analysis cited by the government found a typical length of around 6 months, with 71% running longer than 3 months and some lasting up to 24 months. Clauses over 12 months are only likely to be upheld in exceptional circumstances.

Will a ban apply to my existing contract?

That has not been confirmed. Until the government publishes detailed proposals, assume your current clause still applies and take legal advice before joining a competitor.

What is the difference between a non-compete clause and garden leave?

A non-compete restricts what you do after your employment ends and, unlike garden leave, is not normally paid. Garden leave keeps you employed and paid during your notice period while stopping you from working, and DBT has noted some employers may use it as an alternative.

Do non-compete clauses affect lower-paid workers?

Yes. CMA research found 20 to 30% of workers earning under £99,000 have one, and over 20% of people in accommodation or food services report a non-compete in their contract.

Sources

This article was compiled by Jobsiz from the sources listed above, with AI-assisted writing and automated fact-checking. Published 9 October 2026. We update stories when new verified information becomes available.

Non-Compete Clause UK: Burnham Confirms New Law Is Coming