Proposed reforms to Australia’s workplace laws could change how businesses protect their staff and client relationships, according to employment lawyer Roger Lewis of Arch Law in Perth.
Lewis said plans to ban non-compete clauses would reshape employment contracts in Australia. The provisions could become unenforceable for workers earning below the high-income threshold under the Fair Work Act.
“Non-compete clauses have long been used as a standard protection in many Australian employment contracts,” Lewis said. “If the proposed reform proceeds as indicated, those clauses will no longer be effective for a very large segment of the workforce.”
Under the Australian Government’s proposal, the ban is expected to take effect from 2027. It would apply to workers earning below the Fair Work Act high-income threshold, currently set at $175,000 excluding superannuation.
The reform is also expected to apply retrospectively. This means non-compete provisions in existing employment contracts for workers below the threshold could lose legal effect.
The Government has indicated that some protections are expected to remain in place, including confidentiality obligations and non-solicitation clauses.
According to Lewis, the change would require businesses to adjust how they structure employment protections. Rather than relying on non-compete clauses, companies would need to focus more on recruitment, employee management and internal systems to reduce the risk of competition after staff leave the business.
He said businesses in sectors that rely on client relationships would be among the most affected. He recommended that employers review existing agreements ahead of the proposed implementation date.
“For lawyers advising employers, the emphasis will shift from broad non-compete provisions to ensuring the remaining permissible restraints – such as non-solicitation and confidentiality clauses – are drafted carefully and are genuinely enforceable,” he said.
