The ban on most non‑compete clauses could transform talent retention, poaching risks and pay negotiations – especially in relationship‑driven sectors

The Albanese Government is moving ahead with sweeping reforms that would ban most non‑compete clauses and other post‑employment restraints for a large portion of the Australian workforce. For HR leaders, this is not a distant policy discussion – it is a fundamental shift in how organisations will attract, retain and protect talent over the next few years.

Under the proposal, non‑compete clauses and various post‑employment restrictions would be prohibited for workers earning under the “high‑income threshold”, the same benchmark used for unfair dismissal eligibility in the Fair Work Commission. That threshold is currently $183,100, and employers would also face new limits on no‑poach and other anti‑competitive arrangements.

According to Melini Pillay, principal at McCabes, these reforms are tightly tied to the government’s worker‑centric agenda. The Treasurer has argued that loosening restraints on movement will boost job mobility, lift wages and support productivity. Treasury estimates suggest the changes could increase GDP by around $5 billion and raise wages by 2–4%, on the assumption that workers who are free to move will secure better pay when changing jobs.

At the same time, the government sees non‑competes as a drag on the broader economy. In April 2024, the Treasurer described these practices as restrictive for both job...

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