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On 25 March 2025 the Federal Government announced, as part of its 2025-26 Federal Budget, that if re-elected, it will introduce a ban on “non-compete” clauses for workers earning less than $175,000, with the proposed ban to take effect from 2027.

The Government’s media release states that “more than 3 million workers are covered” by non-compete clauses “including childcare workers, construction workers, and hairdressers”.

The media release further states that the “Treasury’s Competition Review heard troubling accounts about the misuse of non‑compete clauses, including minimum wage workers being sued by former employers and workers being threatened with legal action if they switched jobs”.

The Government’s plans also include proposals to “close loopholes” in Australia’s competition law that currently allow businesses to:

• • Fix wages by making anti-competitive arrangements that cap workers’ pay and conditions, without the knowledge and agreement of affected workers; and
  • Use ‘no-poach’ agreements to block staff from being hired by competitors.

The Government has indicated it will “consult further on non-solicitation clauses for clients and co-workers, and non-compete clauses for high-income workers”.

The Government’s media release can be found at https://ministers.treasury.gov.au/ministers/jim-chalmers-2022/media-releases/cracking-down-non-compete-clauses-boost-wages-and

We will keep you updated regarding further legislative developments in this area.