Continuing its far-reaching competition law reform and productivity agenda, the Australian Government is poised to introduce sweeping reforms to ban non-compete clauses by overriding the common law with new statutory bans, and prohibit agreements between businesses not to solicit (or poach) employees from each other and wage-fixing agreements under competition law. Treasury has begun consulting on the changes, which if passed, would be expected to take effect from 2027. If passed, the amendments would have significant implications for businesses and particularly so for small to medium businesses and their financial sponsors. Interested parties are invited to make submissions up until 5 September 2025.
On Friday 25 July 2025, the government announced that it had begun consulting on non-compete clauses and other restraints on workers. The key proposals the government is seeking consultation on includes:
Implementation of bans on non-compete clauses - How to define and implement a ban on non-compete clauses for employees earning below the high-income threshold ($183,100 for 2025-2026, indexed annually), including who is covered, how the ban will be enforced, possible exceptions and how the transition will be managed.
Additional reforms - Whether reforms are required for non-compete clauses affecting high-income employees, whether to restrict or clarify the use of client and co-worker non-solicitation clauses, as well as how the law should...
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