Goodbye, Non-Compete Clause?

For years, the non-compete clause has been the go-to tool for businesses wanting to protect their business, especially when staff leave.

But the Federal Government has announced plans to ban non-compete clauses for anyone earning under $175,000 a year. The clause you’ve probably had sitting in your contracts for years might be illegal by 2027.

If you’re relying on a non-compete to protect your business, it may be time to start thinking differently.

1. What’s Actually Happening With The Non-Compete Clause?

As part of the 2025 Budget, the Government announced it wants to put a stop to non-compete clauses for most employees.

The argument? These clauses:

• Lock workers into roles

• Suppress wages

• Kill innovation and fair competition

Industries like construction, healthcare, and hairdressing are in the spotlight, but this change could hit every small business using templated contracts with standard restraint clauses.

This isn’t law yet, but it’s heading in that direction:

Treasury’s Competition Taskforce is currently reviewing it. So it's still early days, there is no draft legislation that has been released and details are still up in the air, but the intent is clear.

Once introduced, the change could be introduced as early as 2027, but waiting until then to act is risky.

2. Why It Matters To Your Business?

Non-compete clauses have long been the “security blanket” of employment contracts. They’ve helped stop employees from:

• Walking out the door and poaching your clients

• Taking inside knowledge to a competitor

• Setting up a competing business next door

Without them, you’ll need to rethink your contract strategy and how you protect your intellectual property, client base, and competitive edge.

You don’t need to stress, but you do need to prepare.

Here’s what I recommend:

→ Audit your contracts to understand where you are relying on non-compete clauses.

→ Strengthen other protections, such as confidentiality, intellectual property, and non-solicitation clauses.

→ Think retention, not restriction. Switch your thinking to investing in making people want to stay, instead of fearing them leaving.

Don’t wait for legislation to to come out and then scramble around to deal with it. We can review your contracts, tighten up your protections, and make sure your business is ready, without relying on outdated clauses.

👉 Book a free 15-minute consult today to start discussing your options. It’ll be cheaper than a court battle, and smarter than doing nothing.

Get in Touch

Need help? Contact us today - sandra@hrconsultingtas.com.au or 0408 408 225  

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