What will change, and how do the changes affect you?
An addition was made to the Employment Contracts Act, Chapter 3, Section 5, according to which the employer shall be liable to pay the employee a compensation for the restrictive period related to the prohibition of competition. From the employee’s viewpoint, this amendment will have a major effect. Watch the video to see what will change.
The legislation governing non-competition agreements will remain largely unchanged. The reform will, however, have significant practical consequences. If you resign and you have a currently valid non-competition agreement, your employer is liable to pay you compensation for the restrictive period.
The minimum amount of compensation is stated in the law.
The restrictive period specified in your agreement is six months or less.
→ The compensation is a minimum of 40 percent of the average salary during the last six months of your employment relationship.
The restrictive period as specified in your agreement is more than six months.
→ The compensation is a minimum of 60 percent of the average salary during the last six months of your employment relationship.
