Many employees have clauses in their employment contracts restricting who they can work for after they leave their current employment (‘Non-compete clause’).
As part of the 2025 Federal Budget, the Government has announced a major shake-up: non-compete clauses will be banned for employees earning below the high-income threshold ($175,000).
Employers seek to protect their business with non-compete clauses. However, economists point to the negative effect on the economy caused by their overuse. The Government state the changes aim to:
– Boost wages
– Increase productivity
– Encourage innovation and entrepreneurship
Employers will need to rethink how they protect their businesses in light of these changes. Confidentiality, IP protection, and well-drafted employment agreements will become more important than ever.
If you want to know how this could affect your business or your employment contracts – reach out to our employment team. We can advise you on the changes and assist with redrafting your employment agreements.
Federal Government restricts employers’ ability to stop employees working for competing businesses
