Every recruitment agency owner has a story about the consultant who left on a Friday and was placing the same candidates with the same clients from a rival’s desk on the Monday. It is why almost every recruiter’s contract carries a restrictive covenant, and why many carry a non-compete, the clause that says you may not work in recruitment at all for six or twelve months after you leave.
On 9 October 2026, at the Innovation Nation Summit in Manchester, the Prime Minister put those clauses on notice. The government, he said, “will legislate to make sure that non-compete clauses will no longer be a barrier to hiring for our most promising startups and scaling firms”, and “will ensure that workers in the foundational economy, the everyday economy, are not prevented from moving jobs too”, with “options to address the wider use of restrictive practices” to follow. There is no bill, no date and no detail yet. The last attempt, a 2023 proposal for a statutory three-month cap, was never legislated, and a working paper on options closed in February 2026 without a decision. So nothing has changed in law this week. But the direction has been stated at the top of government, and an agency that waits for the bill to read its own contracts will be reading them in a hurry.
Here are six questions to ask now. They are the questions the existing law already asks, which is the point. A covenant that passes them today is the one most likely to survive whatever comes.
1. What does each clause actually protect?
The law has never enforced a restriction because an employer wanted one. A post-termination restriction is enforceable only so far as it protects a legitimate business interest, which for an agency means client connections, candidate relationships and confidential information built on the agency’s time and money, and only so far as it goes no further than reasonably necessary to protect it. Write, against each clause in your contract, the interest it protects. If the honest answer for a clause is “it stops them competing with us”, that clause is the one the Prime Minister described.
2. Could a narrower clause do the same job?
A non-solicitation clause stops a leaver approaching the clients and candidates they dealt with. A non-dealing clause stops them acting for those clients even when the client calls first. A confidentiality clause protects the database. Garden leave keeps the leaver out of the market, on pay, while their knowledge goes stale. Between them these protect what an agency owns without stopping anyone earning a living in their trade, and they are far more likely to be upheld. If your contracts rely on a bare non-compete to do the work these four could do, that is the change to make, and it does not need Parliament.
3. How long, and why that long?
Twelve months is the figure many agency contracts carry because they always have. Ask how long it actually takes for a leaver’s knowledge of your clients’ needs and your candidates’ situations to go out of date. In most recruitment markets that is a few months at most. A period you can explain is a period you can defend; a period inherited from a template is not.
4. Does it fit the person?
A covenant that is reasonable for a director with the client list in their head is not reasonable for a resourcer in their first year. One-size clauses are where restrictions fail, because the court asks whether the restriction was reasonable for this employee at the time they signed. Grade the covenants by role, and when someone is promoted, re-sign them, because a clause agreed as a junior does not grow with the job.
5. What did you give for it?
A restriction agreed on day one is supported by the job itself. One added later, by a letter nobody signed or a handbook nobody read, may be supported by nothing and may fail for that reason alone. If covenants were tightened at some point in your agency’s history, check how, and whether the people they bind ever agreed to them.
6. What will you say when the consultation comes?
The government has said it will bring forward options on the wider use of restrictive practices. That is a consultation, and recruitment has a case to make in it. The relationships a recruiter builds are built on an employer’s time, data and brand, and a fair, short period of protection for those relationships is not the same as stopping a person working in their trade. BIOR will put that case in the recruiter’s words when the consultation opens, as we did on the equal pay proposals, which closed on 27 October, and on the workplace monitoring proposals before them. Members will see the draft in the Member Briefing first.
The practical order
Read every covenant this month and write its purpose beside it. Replace bare non-competes with non-solicitation, non-dealing and confidentiality clauses and garden leave where those do the job. Shorten what you cannot explain. Grade by role and re-sign on promotion. Keep the paperwork that shows what was agreed and when. And have the result checked by your own solicitor before it goes into a contract, because the law of restrictive covenants turns on facts, and this article is general information, not advice.
Our Employment Rights Hub carries the government’s timetable for every change as it is confirmed, including this one when a bill gives it a date. The member library carries the 2026 employment contract template for agency staff with its covenant notes. Agency Membership includes the certification assessment; pass it and you are certified for five years. Check any recruiter at ior.org/certified.
Sources. PM speech at the Innovation Nation Summit, 9 October 2026, gov.uk (transcript as delivered). Measures to reform post-termination non-compete clauses in contracts of employment, government response, gov.uk. Reform of non-compete clauses in employment contracts, working paper, Department for Business and Trade, published 26 November 2025, closed 18 February 2026, gov.uk. Plan to Make Work Pay and Employment Rights Act, timeline update, gov.uk, 25 September 2026.
General information from government sources, not legal advice. Have your contracts checked by your own solicitor before use. BIOR accepts no responsibility for any loss arising from reliance on this article.