Non-competes
We discussed the future of non-compete clauses with Paul Goulding KC in the June 2023 podcast, and one of the points he flagged was a proposal by the US regulator, the Federal Trade Commission, to ban non-competes in employment contracts altogether. That proposal has now been passed, and will come into effect later this year. A number of business groups have indicated they are likely to challenge the ban in the courts, so multinational organisations with US operations will need to keep a close eye on developments. In the UK, the Government’s proposal to cap non-competes at three months has not been prioritised, and appears unlikely to be brought before Parliament before the next general election. If that changes, we will of course let readers know.
Carer’s leave
Both Acas and the Government have published guidance to accompany the entry into force of the new right to one week’s paid leave to assist with the care of a dependant with a long-term care need. Several clients have introduced their own staff policies to inform employees about the new regime, and we would be delighted to help if your organisation is considering this.
Industrial action
The Supreme Court has reviewed the interaction of the protections in the UK for those taking part in industrial action and the right in Article 11 of the European Convention on Human Rights to freedom of assembly, and to form and join trade unions. The UK legislation is extremely complex, and gives different degrees of protection depending whether the industrial action is in normal working hours, whether the workers are taking part in industrial action or in other trade union activities, and whether the action taken by the employer is to dismiss the worker or to subject them to some other form of detriment.
The worker in this case was involved in planning and organising a series of strikes, and she also took part in them. Her employer suspended her and gave her a disciplinary sanction. It became clear in the subsequent litigation that the UK regime did not protect the worker because the protection from detriments only covered trade union activities, which did not include industrial action when the legislation was considered in the round. The question for the Supreme Court was whether this gap in protection was compatible with the Article 11 right, and the court’s answer was that it was not because it fails to provide any protection against sanctions, short of dismissal, intended to deter or penalise trade union members from taking part in lawful strike action organised by their trade union. A declaration of incompatibility under the Human Rights Act 1998 was therefore made, which now leaves it for Parliament to take forward if it so chooses.
Pension schemes updates
There are a couple of pension updates to make readers aware of. The first is that two important rates have been maintained: the auto-enrolment earnings trigger has been kept at the existing threshold of £10,000, and the annual allowance has been kept at £60,000. The second is a change: the lifetime allowance has been abolished from 6 April 2024, and replaced by two new lump sum allowances:
- a lump sum allowance of £268,275; and
- a lump sum and death benefit allowance of £1,073,000.
The tax implications of that change, and the options for employers, are both complicated, so please do reach out to us to discuss your organisation’s particular position.
