UK Government to legislate to reform non-compete clauses
The Prime Minister has confirmed that the UK Government intends to legislate to reform the use of non-compete clauses. The intention is to ensure that they cannot be used to prevent workers from moving jobs or as barriers to hiring for start-ups and upscaling firms. He also stated that other wider options to address restrictive practices will also be brought forward. No timescales or further details of the proposed legislation were provided.
Real living wage to increase by 4.8%
The Living Wage Foundation has announced a 4.8% increase to the real living wage. This translates to a 65p increase to £14.10 per hour across the UK. In London there is a 4.4% increase, again equating to 65p, to £15.45 per hour. Real living wage employers must implement the increase by 1 May 2027. The real living wage is a voluntary rate for workers aged 18 and over and is not connected to the statutory national minimum wage or national living wage.
Consultation on current whistleblowing framework opened
The UK Government has launched a consultation on whether the UK whistleblowing regime is working effectively and is seeking views on a range of reforms. The current framework is intended to protect workers who report wrongdoing in the public interest from retaliatory detriment or dismissal. Proposals include extending protection to additional groups (particularly some self-employed individuals), and reviewing the effectiveness of the public interest test and whether additional guidance would be helpful. Views are also sought on whether the current categories of wrongdoing are adequate, whether disclosure routes need extended and simplified, and whether employer obligations to have whistleblowing policies and procedures should be strengthened. The consultation also considers extending the time limit for interim relief applications, whether a central whistleblowing body is needed, and the possible use of AI tools to help whistle-blowers identify the correct reporting channel. Separately, the consultation seeks views on a proposed Serious Fraud Office reward scheme for individuals who provide information about economic crime, with the aim of increasing reporting and supporting the investigation and prosecution of serious fraud, bribery and corruption.
The consultation is open for responses until 8 January 2027.
Employment status consultation
A Consultation on employment status reform and protections for the self-employed has opened. This particularly thorny issue has been the subject of promises for change for a significant number of years. The consultation does not, however, currently propose moving away from the three-tier framework of employee, worker and self-employed. Creating a single status of worker will be considered by the UK Government as a "longer-term goal". Key proposals include:
Placing less emphasis on personal service in the test for a "worker" - this means that having a valid right of substitution will not prevent someone from being a worker in situations where their activities are under a significant degree of control by the person or organisation they are working for;
Creating a presumption of worker status - this means that the burden of proof would lie with the employer to prove an individual was not a worker;
Increasing penalties for organisations who repeatedly misclassify their workforce;
The involvement of the Fair Work Agency in employment status cases; and
The use of an interactive online tool for assessing status.
The consultation also covers new protections for the genuinely self-employed including the introduction of a right to receive a written statement of key contract terms and extending blacklisting and health and safety protections. The consultation is open for responses until 8 January 2027.
