The Federal Government has released an exposure draft for proposed legislation banning the use of post-employment non-compete clauses for employees earning under the high income threshold (currently a base salary of $190,100), and co-worker non-solicitation clauses for all employees. The Competition and Fair Work Legislation Amendment (Banning Unfair Non-Competes) Bill 2026 also proposes to extend the current cartel framework within the Competition and Consumer Act 2010 (Cth) to cover no-poach and wage-fixing arrangements between businesses.
If the draft legislation is enacted in its current form, it will come into effect in 2027 and will necessitate comprehensive contract reviews and likely amendments for all employers who currently include non-solicitation and/or non-compete provisions in their employment contracts.
Snapshot of key proposed changes
Proposed reform | Impact on employers |
Ban on co-worker non-solicitation clauses | Applies to all employees regardless of earnings
|
Ban on non-compete clauses
| Applies to employees earning at or below a base
|
Restrictions on enforceable restraints | Increased regulation, including that permitted
|
Extended cartel laws: no-poaching | Businesses will be prohibited from agreeing not to
|
Extended cartel laws: wage-fixing | Businesses will be prohibited from agreeing on
|
Civil Penalties
Civil penalties of up to hundreds of thousands of dollars may be imposed on employers that either include prohibited clauses in new or varied employment contracts, or that seek to enforce such clauses in circumstances where they are unlawful.
Next Steps
Submissions on the exposure draft are open until 2 October 2026.
Employers should be proactively reviewing their employment arrangements ahead of these changes.
Get in touch with the team at HMB Employment Lawyers to discuss these proposed changes and their impact on your business further: admin@hmblaw.com.au
