Last reviewed 21 June 2016

A number of government consultations and calls for evidence have been launched in recent weeks or will be launched shortly, which HR practitioners across a number of sectors should be aware of, explains Amy Cunningham of Cunningham Legal. Three of the most relevant are summarised below.

Non-compete clauses

In April 2016, the Department for Business, Innovation and Skills announced that it would be investigating employment practices that could be stifling small businesses and entrepreneurship. These investigations include a call for evidence seeking views on non-compete clauses, and in particular whether such post-termination restrictive covenants act as a barrier to employment and entrepreneurship in the UK.

The basic legal position is that post-termination restrictive covenants in employment contracts (including non-compete clauses, which are usually the hardest to enforce) will only be enforced by a court if they go no further than is reasonably necessary to protect a legitimate business interest (such as trade secrets/confidential information, trade connections with clients/customers and suppliers, and goodwill). However, employers often include extensive post-termination restrictive covenants in an employment contract in order to simply deter an employee from joining a competitor. The Government is, therefore, concerned that such practices are stifling the efforts of start-ups and small businesses to employ the best and brightest people. It is asking for the views of both employers and individuals as to whether these practices are acting as a barrier to innovation and employment in the UK.

Further details on the consultation can be found in the press release — Government Pledges to Act on Employment Rules That Could be Stifling British Innovation.

Tips, gratuities and service charges

The Government has launched a consultation on tipping, gratuities, cover and service charges. There are apparently 150,000 businesses in the hospitality sector where tipping is common. Although a voluntary Code of Practice was launched in October 2009 to improve the information available about the treatment of such payments, there are still concerns regarding the treatment of these additional payments to workers and also the transparency and information available to both consumers and the workers themselves. Following a call for evidence in August 2015, the Government has now published its proposals. Responses are required by 27 June 2016.

In summary, the Government believes that all “discretionary payments for service”, (ie tips, gratuities and service charges) should be:

  • discretionary, (ie it is made clear to consumers that they are voluntary)

  • received by workers

  • clear and transparent to consumers and workers in terms of how the payments are treated.

The consultation document sets out a number of proposals relating to each of these policy objectives, including that the current voluntary Code of Practice be given statutory force.

As well as the hospitality sector, the potential changes are relevant to employers in the gambling/betting industry, to hairdressers and to taxi operators.

The full consultation document can be found in the open consultation document — Tips, Gratuities, Cover and Service Charges: Proposals for Further Action.

Extension of shared parental leave

The Government is expected to launch a consultation into how it will extend shared parental leave and pay to working grandparents. This was announced in the March 2016 budget. The extension is due to come into force in 2018.

The consultation will apparently also cover the Government’s proposals for streamlining the shared parental leave and pay system, including simplifying the eligibility requirements and notification system, which are notoriously complicated. Any such changes are likely to be welcomed by practitioners.