Prime Minister Andy Burnham has confirmed that the Government will legislate to reduce the ability of non-compete clauses to stop workers joining rival businesses or launching companies of their own, presenting the reform as part of a wider push to make the UK a more dynamic innovation economy. Speaking at the Innovation Nation Summit in Manchester on 9 October, Burnham said restrictive employment practices had gone too far in some businesses and argued that talented workers should be able to move more freely between companies, start new ventures and take their skills into growing firms.
The announcement is significant for technology and scale-up businesses, but its potential reach is wider. The Prime Minister also said workers in what he called the “foundational” or “everyday” economy should not be prevented from moving jobs, opening the prospect of reform affecting employment contracts across a much broader range of UK sectors. The law has not changed yet. The Government has confirmed its intention to legislate, but it has not yet published the final legal mechanism, salary thresholds, statutory time limits or an implementation date. Those details will determine how far the eventual reform goes.
Active construction and urban development in London, photographed on September 2026. Image: London Construction Magazine.
Prime Minister Andy Burnham's comments in full
Non-compete clauses that stop workers from joining a rival organisation, or indeed setting up one of their own after they've left, are a drag on innovation. They prevent the best and brightest from bringing their energy and dynamism to the economy.
Honestly, I think some businesses have gone too far in their use of these restrictive practices. We need our innovators to move freely between companies and start their own without constraint.
So, I want to change that. We will legislate to make sure that non-compete clauses will no longer be a barrier to hiring for our most promising start-ups and scaling firms.
Call it if you like the Bosman ruling for the innovation sector. It's much needed and much overdue. And we'll ensure workers in the everyday economy are not prevented from moving jobs too.
I'm also keen to bring forward options to address the use of wider restrictive practices.
We are doing a lot right, but we can do so much more.
Government confirms legislation will follow
The Prime Minister's remarks were reinforced in his official Number 10 speech, where he confirmed that legislation will be introduced to make sure non-compete clauses are no longer a barrier to hiring for promising start-ups and scaling businesses. Burnham described the reform as a possible “Bosman ruling for the innovation sector”, a reference to the landmark football ruling associated with giving out-of-contract players greater freedom to move between clubs. The Government's argument is that labour markets can suffer when employees with valuable skills are prevented, or believe they are prevented, from moving to competitors, joining younger companies or establishing their own businesses.
What are non-compete clauses?
A non-compete clause is a contractual restriction intended to prevent an employee from working for a competing business, or establishing a competing business, for a period after leaving their employer. They remain legal in the UK today, but they are not automatically enforceable. The Government's own working paper on non-compete reform states that the starting point under existing law is that a restraint-of-trade clause is unenforceable unless an employer can demonstrate that it is reasonable. The practical difficulty is that workers may comply with a restriction even where its enforceability is uncertain because challenging an employer in the courts can be expensive and risky.
Around five million workers may have non-competes
The scale of the issue is substantial. Government analysis published ahead of the latest announcement estimates that around five million employees in Great Britain work under contracts containing a non-compete clause, with a typical duration of approximately six months.
The same working paper cites research suggesting around 26% of workers may be subject to them and notes that non-competes are not confined to highly paid executives or specialist technology roles. They also appear in lower-paid occupations. That helps explain why the Prime Minister has deliberately framed the policy as being about both high-growth innovation businesses and the wider economy.
Why the Government sees reform as pro-growth
The economic argument in favour of reform is straightforward: workers moving between businesses can carry skills, experience and technical knowledge into companies that need them, while younger firms gain access to people who may previously have been effectively locked out of the recruitment market. The Government's working paper identifies four core objectives for reform: improving labour-market dynamism, reducing recruitment barriers for innovative and scaling businesses, increasing competition and innovation, and protecting workers from extended periods outside their area of expertise.
It also notes that start-ups can be placed at a disadvantage because established firms are often the main source of experienced recruits. Restrictive clauses can therefore make it harder for smaller businesses to hire the specialist people required to grow.
CMA backs reform but supports a balanced model
The Competition and Markets Authority has already backed reform of the current framework. In its February 2026 response to the Government's working paper, the CMA supported a combined approach involving a ban below a salary threshold alongside a statutory limit on the duration of non-competes above that threshold. That is one possible model rather than the Government's final policy. Burnham has not yet said whether ministers will choose a complete ban, a salary threshold, a fixed time limit or another structure.
What could this mean for construction and engineering?
For construction and the wider built environment, greater labour mobility could be significant because specialist experience frequently sits with individuals rather than organisations. Project directors, structural engineers, building-services specialists, estimators, commercial managers, planners, digital construction specialists, temporary works professionals and technical consultants often develop expertise across a relatively small number of major contractors, consultancies and specialist businesses.
A less restrictive employment market could make it easier for SMEs and specialist firms to recruit experienced people from larger competitors, while giving professionals greater freedom to move towards projects offering better pay, greater responsibility or stronger technical opportunities. It could also support new business formation. An experienced engineer, consultant or construction manager with a viable business idea could face fewer contractual barriers to establishing a competing practice or specialist contractor, subject to the eventual legislation.
Competition for talent could become more important
For employers, reform could also change the emphasis from restricting departures to persuading valuable people to stay. The Government's own policy paper suggests that businesses facing tighter rules on non-competes may respond through positive retention measures such as stronger pay, bonuses and greater flexibility, or through paid garden leave where an employer has a legitimate reason to keep a departing employee away from sensitive work for a defined period.
For a construction industry already competing heavily for experienced technical and commercial staff, that could increase pressure on employers to offer stronger career progression and retention packages rather than relying on post-employment restrictions.
Businesses would still be able to protect genuine commercial interests
Reforming non-compete clauses does not mean employees would become free to take confidential information, intellectual property, tender data or client lists to a competitor. Confidentiality provisions, intellectual-property protections, non-solicitation arrangements, non-dealing provisions and garden leave are separate mechanisms. The precise relationship between these restrictions and the new legislation will matter, particularly because Burnham said the Government also intends to consider the wider use of restrictive practices.
The challenge for ministers will therefore be to increase worker mobility without undermining legitimate protections around commercially sensitive information, customer relationships and intellectual property.
The previous three-month proposal never became law
This is not the first attempt to reform UK non-competes. In 2023 the previous Government announced plans for a statutory three-month limit on non-compete clauses, but that proposal was never implemented.
The current Government reopened the issue through a working paper published in November 2025, considering options including statutory time limits, a complete ban, salary thresholds and combinations of those approaches. Burnham's latest announcement moves the issue beyond an exploratory policy paper by confirming that legislation will now be brought forward.
What happens next?
The important next step is the legislation itself. The Prime Minister has confirmed the direction of travel, but the Government has not yet published the Bill, the exact statutory test, any salary threshold, a maximum duration or a commencement date. Until legislation takes effect, existing UK law continues to apply.
If ministers deliver a workable framework, the reform could become one of the more consequential labour-market changes for innovative and specialist businesses: making it easier for workers to follow opportunities, giving growing firms access to experienced talent and encouraging people with skills and ideas to establish businesses of their own. For construction, engineering and professional services, where experience moves from project to project and competition for specialist talent remains intense, that greater freedom could prove particularly important.
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Expert Verification & Authorship: Mihai Chelmus
Founder, London Construction Magazine | Construction Testing & Investigation Specialist |
