Australian Government Proposed Ban on the Use of Non-compete/Restraint Clauses in Employment Contracts

On 7 September, 2026, the Australian Government released its proposed legislation – Competition and Fair Work Legislation Amendment (Banning Unfair Non-Competes) Bill 2026 – which will ban non‑compete clauses in employment contracts for low and middle income Australian workers, with some exceptions. Businesses affected by the proposed ban can make submissions to the Government on the draft Bill until 2 October 2026 via https://consult.treasury.gov.au/

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Why are non-compete/restraint clauses required in employment contracts?

On 25 March 2025, the Australian Government announced a proposal to ban non-compete clauses for employees earning less than the high-income threshold. The Government has consulted on the reform to non-compete clauses and on potential additional reforms to other restraints on workers. In this article, Stephens Lawyers and Consultants discusses a recent case which demonstrates why non-compete clauses should be maintained in employment contracts.

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