Minister Van Gennep stated in a letter explained in more detail to the House how it intends to reform the rules on non-competition clauses.
In our article Reform of the rules on non-competition clauses We refer to the Minister’s previous letter, in which she outlines the policy options. In her recent letter, she states that she is preparing a bill setting out the following amendments:
- to impose a statutory limit on the duration of the non-competition clause;
- When including a non-competition clause, the geographical scope must be set out, specified and justified;
- Employers must also justify the overriding business interest in a non-competition clause in the case of a permanent employment contract (at present, this is only required for fixed-term employment contracts);
- When invoking this clause, the employer must, in principle, pay compensation (a percentage of the employee’s last salary, as determined by law).
Van Gennip had previously indicated that he wished to waive the non-competition clause should the employer go into liquidation. However, this fails to take sufficient account of the fact that, even in the event of liquidation, there may still be a compelling interest in ensuring that the employee adheres to the non-competition clause. This is particularly the case when the bankrupt employer’s business is sold as a going concern and continued by the purchaser.
The Minister expects to publish the draft bill for public consultation online by the end of 2023. The new rules will therefore not come into force in the very near future.