Update on the new non-competition bill

The government has recently published their draft bill on the modernisation of the non-competition clause. This includes (inter alia) the following proposed changes for the non-competition clause (also applicable to the business relations clause):

• a maximum duration of the non-competition clause for twelve months after the end of the employment contract;
• a mandatory geographical limitation of the non-competition clause;
  
  
• the employer has the obligation to inform the employee timely whether employer wants to invoke the non-competition clause;
  
  
• an employer must pay the employee 50% of the last-earned salary for each month that the employer wants to invoke the non-competition clause. This compensation must be paid in a lump sum on the last day of the employment contract (or within 15 days of termination by court);
  
  
• the requirement of a substantiation of serious business- or service interests will also apply to employment contracts of indefinite duration;
  
  
• there will be transitional law for current non-competition clauses, which (among other things) will also require payment of compensation for invoking the clause.

Please note that this is, at this stage, just a draft bill, which has been published online for consultation. If this bill is confirmed by parliament, it is the expectation that employers and employees will have to take this into account per end of 2024 / start of 2025.

Any questions?

If you want to discuss how to best anticipate on this bill (for employers and employees), don't hesitate to contact one of our employment lawyers Floris Asscher. Floris can be reached by phone on 0031 88 627 22 20 or by email at floris.asscher@pellicaan.nl.