Redfern Legal Centre (RLC) welcomes the Australian Government’s announcement in the 2025 Federal Budget that it will ban non-compete clauses for workers earning under $175,000.
The use of non-compete clauses to restrict workers' mobility is an inappropriate and unjust clause for lower paid industries and workers.
This is a significant victory for low-income workers in industries such as hospitality, wellness, and childcare, removing barriers to opportunity, better pay and conditions.
Low-income workers, such as baristas, hairdressers, and childcare workers, who are already dealing with low wage growth, rising rents, utility bills, and mortgage repayments, should not have to seek legal advice to pursue a better job.
Strengthening workers’ ability to move between jobs and sectors, incentives employers to offer better pay and conditions which benefits everyone in the community.
Seri Feldman-Gubbay Senior Solicitor at the Redfern Legal Centre’s Employment Rights Legal Service says:
“Instead of being forced to remain in exploitative and often unlawful working conditions, this reform will empower workers to seek jobs with better pay and improved conditions”.
“When non-compete clauses were first introduced, they were meant to protect legitimate business interests. However, their widespread use and onerous restrictions are deeply inappropriate,” she said.
“I frequently assist workers earning under $70,000 who have clauses in their contract that prevent them from working in the same industry anywhere in Australia for up to 12 months.
In one case, a worker was banned from working in the same industry for 12 months after being employed for just two weeks with the employer.”
While RLC welcomes this crucial change, more reforms are necessary to protect low-income workers and others targeted for exploitation, such as funding and expansion of organisations accredited to certify Workplace Justice Visas.
More funding is urgently required to enable community legal centres to assist all workers who are being exploited at work.
Banning non-compete clauses for low-income workers is a step forward, but there is still much work to be done to ensure that all workers are treated fairly and equitably, and to ensure in instances where that doesn’t occur, employers are held accountable.
