Employers should review contracts ahead of proposed 2027 non-compete ban for workers below high-income threshold
The Albanese government has announced plans to significantly reform the use of non-compete clauses and other worker restraints in Australia, as part of its broader competition agenda. While the proposed legislation has not yet been released, the changes are likely to have a significant impact on how employers protect confidential information, customer relationships and workforce stability.
For many organisations, non-compete clauses have long formed part of a broader legal framework designed to protect legitimate business interests. However, as a result of the proposed reforms employers may increasingly need to rely on alternative strategies to manage risk when employees leave and join competitors.
While the reforms are not expected to commence until 2027, organisations should begin preparing now. Below we consider some of the steps employers should be taking in anticipation of the proposed changes.
The federal Labor government argues that non-compete clauses have become increasingly common across a broad range of occupations and income levels, serving to discourage employees from changing jobs, contributing to lower worker mobility and reduced competition within labour markets.
In response to the findings of its Competition Review, the government has announced that it intends to prohibit non-compete clauses for low-to-medium...
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