Newsflash: Have your say on restrictions and watch out for illegal working new law

What do we already know?

1. Restrictive covenants:  we updated you in our May 2016 Newsletter Government reforms (1): Restrictive covenants – call for evidence on Government plans to launch a call for evidence seeking views on non-compete clauses and that this was due to be launched shortly.
2. Illegal working:  we updated you in our May 2016 Newsletter Government reforms (2): Immigration Act 2016 – Clamping down on illegal working that the Immigration Bill had become the Immigration Act 2016 and would now become law over the course of 2016 (except for the Immigration Skills Charge which is due to be introduced in April 2017).

What’s new?

1. Restrictive covenants: The Government has launched its call for evidence on the use of non-compete clauses, available here, and is seeking views from businesses and workers. The Government defines non-compete clauses widely, to include traditional non-compete clauses, non-dealing with customers clauses and non-solicitation of employees clauses. The Government wants evidence on how non-compete clauses are currently used and what the impacts are and to ensure that when used, such clauses are justified, well-constructed and reasonable. The call for evidence seeks views in seven areas, in particular:

• what is currently understood by the term ‘non-compete’;
• whether non-compete clauses are particularly prevalent in specific sectors and roles;
• specific examples from employers who have used non-compete clauses, including where action was taken to enforce them;
• specific examples from workers about how they were affected by non-compete clauses;
• the extent to which, for employer and worker, non-compete clauses have hindered mobility and enterprise;
• whether restrictions on the use of non-compete clauses would be useful and/or have unintended consequences; and
• whether guidance would be helpful in this area, including on the distinction between non-compete clauses and intellectual property and confidentiality rights.

The call for evidence closes on 19 July 2016. Responses can be emailed to labourmarket.consultations@bis.gsi.gov.uk.

2. Illegal working: Parts of the Immigration Act 2016 are to become law on 12 July 2016:

• New post of Director of Labour Market Enforcement: The Director will be tasked with over-seeing and co-ordinating enforcement of worker exploitation legislation by the three main bodies responsible: the Gangmasters and Labour Abuse Authority, the Employment Standards Inspectorate and HMRC;
• New offence of ‘illegal working’: this offence will enable the earnings of illegal workers to be seized under the Proceeds of Crime Act 2002; and
• Extended criminal offence: the existing criminal offence of knowingly employing an illegal migrant will be extended to apply where an employer has reasonable cause to believe that a person is an illegal worker. Conviction on indictment for this offence will increase from two to five years.