An open letter
Free to Start and Scale
Outdated employment practices are holding back Britain’s start-ups and scale-ups. British workers deserve the freedom to switch jobs and start innovative new companies. But a large and growing number are bound by unfair restrictions, ranging from lengthy notice periods to non-competes.
Labour mobility is particularly important in the technology sector. Britain’s technology boom promises to create good economic growth, increasing productivity across the country. But contracts written for another era are putting this at risk. In California, workers can start or join new companies overnight. If it is easier for companies to hire in California, they will hire in California.
Labour mobility is a classic collective action problem. Competition for technology talent is fierce, and no company wants to lose out. Not all start-ups and scale-ups can unilaterally disarm, when the dominant technology companies use contractual restrictions to make competing harder. But the current status quo is bad for workers, businesses, and the British economy. We urgently need to set a new norm.
The Government is rightly considering banning non-competes. But there is a risk that banning non-competes causes businesses to rely more heavily on other contractual restrictions, like lengthy notice periods and garden leave. This would undermine the Government’s own objectives, cause endless litigation, and prevent Britain’s most dynamic businesses from starting and scaling.
We therefore call on the Government to ban lengthy post-termination restrictions and restrict the use of extended notice periods and garden leave. These terms lower wages, reduce competition, and undermine the innovation that drives economic growth.
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The letter is open to founders, executives and investors.