Reform to Non-Compete Clauses and Other Worker Restraints
- additionaccounting
- Sep 10
- 2 min read
The Federal Government is continuing its focus on workplace reform, with new consultation underway on non-compete clauses and restraints of trade in employment. This follows the announcement made in the 2025/26 Federal Budget.
The consultation covers several key areas, including:
Implementing a ban on non-compete clauses for employees earning below the high-income threshold under the Fair Work Act.
Closing loopholes that have allowed no-poach and wage-fixing agreements under the Competition and Consumer Act.
Considering further reforms for high-income workers and non-solicitation clauses, as well as whether clarity is needed for restraints on concurrent employment for part-time and casual workers.
It’s important to note that the Government is not proposing changes to:
Restraints of trade outside of employment (such as the sale of a business); or
The use of confidentiality clauses in employment contracts.
A consultation paper released by the Government explored these topics in detail:
Section 3: Addressed how to define and enforce the non-compete clause ban, who it should cover (including high-income earners and contractors), possible penalties, and any exemptions on public interest grounds.
Section 4: Considered whether further reforms should be made to post-employment restraints, including limits on non-compete or non-solicitation clauses for high-income employees.
Section 5: Examined whether changes are needed to clarify restrictions on concurrent employment for part-time and casual employees.
Section 6: Focused on implementing the ban on no-poach and wage-fixing agreements under the Competition and Consumer Act, including whether any exemptions should apply.
These reforms are still under consultation, but they may significantly impact employment contracts and business practices in the future.
At Addition Accounting, we’re monitoring these developments closely to help employers and businesses stay compliant and prepared as new legislation takes shape.
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