Consistent with its pre-election announcement, the Federal Government has recently released a Consultation Paper on its proposed Reform to Non-compete Clauses and Other Restraints on Workers.  Feedback is now being invited, with submissions required to be filed by 5 September 2025.  A copy of the Consultation Paper and further information about the feedback process can be obtained here.

As part of the consultation process, specific responses are being sought by the Government to a range of direct questions, including:

• What restrictions should fall within, and outside of a non-compete clause that will be the subject of the ban? For example, should non-solicitation clauses be caught?
• Whether the ban on non-compete clauses should extend to non-employee workers? For example, should it apply to independent contractor relationships, or to the terms of the relationships between companies (that restrict the poaching of each other’s workers)?
• What penalties should be applied to breaches of the ban on non-compete clauses, and what should their magnitude be?
• Should compensation be payable for non-compete clauses?
• What role should the Fair Work Ombudsman play in enforcement?
• What role should the Fair Work Commission play in disputes?
• For non-compete clauses that fall outside the ban (for example, employees above the High-Income Threshold), what changes to the common law position around post-employment restrictions should be made?
• Should restrictions on concurrent employment relationships be permitted? For example, should an employer be able to restrict a worker from holding a second employment relationship with a competitor?

As is becoming self-evident, the impact of the Government’s proposed changes may be wider than first thought, and are increasingly likely to extend beyond the mere removal of provisions that prevent post‑termination employment with a competitor for those employees who fall under the High‑Income Threshold.  While the ultimate scope of change is yet to be determined, it’s never too early to begin reassessing your business’ use of contractual restraints, and to begin developing a broader suite of strategies to maximise the protection of your legitimate business interests.

For many businesses, should also be seen as an opportunity to rebalance their strategies away from a disproportionate reliance on a legal response, and to refocus on systems and operational protections.  While the opportunities may vary from business-to-business, the low-hanging fruit includes:

• The maintenance of all elements of a high-performance culture with clear and consistent organisational-wide communications.
• Ensuring information we say is confidential is restricted, protected, and genuinely treated that way.
• Avoiding important relationships (whether client or supplier) falling to a single employee to manage, and considering relationship rotations where possible and appropriate.
• Actively promoting and maintaining multi-level and multi-contact point depth to important corporate relationships.
• Considering the introduction of situational notice periods for employees occupying functionally important relationship.
• Managing notice periods proactively, and effectively.
• Maintaining systems to capture important business information in real time, and protected in a timely manner (to information loss through employee exits).

For those businesses where a legal response remains important, the opportunity to provide that feedback to the Government is now.