The Australian Department of the Treasury has published exposure draft legislation that would restrict post-employment restraints and bring agreements between businesses not to hire staff or to control wages and employment conditions within the existing cartel framework. No-poach and wage-fixing agreements would attract civil and criminal penalties, subject to targeted exemptions for arrangements including joint ventures, secondments, labour hire and professional sporting leagues. These exemptions generally require the restraint to be necessary and time limited, with affected workers notified and consenting before it takes effect. For national system employees, non-compete terms would be banned where annualised full-time equivalent earnings are equal to or below the high income threshold, which is AUD 190,100 for the financial year ending June 30, 2027. The ban would apply to all casual employees and pieceworkers regardless of earnings, while co-worker non-solicitation terms would be prohibited for all employees. Prohibited terms would have no effect, and employers could face civil penalties of up to 600 penalty units for serious contraventions or 60 penalty units otherwise, with corporate maxima five times higher. Permitted post-employment restraints would need to protect specified legitimate interests, be reasonable and avoid cascading alternative restrictions. The amendments would commence on the first Jan. 1, April 1, July 1 or Oct. 1 after royal assent. Existing employment arrangements would generally be brought within the new restrictions when varied after commencement, while the civil penalty provisions for including prohibited non-compete and co-worker non-solicitation terms would apply after a six-month transition. The cartel rules would cover new agreements from commencement and the subsequent implementation of prohibited provisions contained in earlier agreements.
2026-09-07Department of Treasury (Australia)
Australian Department of the Treasury launches consultation on worker restraint bans and new no-poach and wage-fixing cartel offences
The Australian Department of the Treasury is consulting on draft legislation that would ban non-competes for employees at or below the high income threshold and prohibit co-worker non-solicitation terms for all employees. It would also treat no-poach and wage-fixing agreements between businesses as cartel conduct subject to civil and criminal penalties. Permitted restraints and targeted business exemptions would need to meet conditions including necessity, reasonableness and, in relevant cases, worker notice and consent.