A recent Australian Bureau of Statistics (ABS) survey found that 46.9% of businesses surveyed used some kind of restraint clause, including for workers in non-executive roles. The survey also found 20.8% of businesses use non-compete clauses for at least some of their staff and 68.2% for more than three-quarters of their employees.
Over the last 30 years, Australia has seen a decline in job mobility. Australia is not alone in this and other advanced economies have
experienced the same issue. While restraint clauses are not the only factor contributing to the decline – an ageing population and a rise in
post-pandemic market concentration in some industries has also contributed, it is specifically the role of restraints that is the focus of
the Competition Review issues paper (submissions close 31 May 2024).
From an economic perspective, declining job mobility impacts wage growth and innovation as restraints prevent access to skilled workers
within the economy. Productivity is a key concern as Australia’s productivity has declined in the last 20 years.
The review states that, “The direct consequence of a non-compete clause is that it hinders competition among businesses: it disincentivises
workers from leaving their current job, creating a barrier to the entry of new businesses and the expansion of existing businesses.”
For business however, this is the point - restricting the knowledge developed by a worker during their employment from benefiting a
competitor, limiting the likelihood of a ‘mass exodus’ of key workers from the business to a competitor, preventing clients from employing
key workers, and protecting the value of the business by preventing employees from walking away with customers that were hard won, at a
cost, by the business.
However, the impact of restraints appears to be a psychological deterrent given that most are not contested. Of the 115 matters relating to
restraints of trade between 2020 and 2023 dealt with by Legal Aid NSW, only one business commenced proceedings in court against a former
worker. And, a further study indicates that where employers seek legal redress in the courts, they are more likely than not to fail.
The international trend is to either ban restraints for workers under a certain income level and time limit restraints for higher paid
workers, or to limit the duration of restraints generally but specify a level of compensation to the worker for the restraint period.
| Non-compete clauses | prevent workers from joining a competitor or starting a new business in competition with their current employer for a period of time. |
| Non-solicitation clauses | prevent workers from soliciting former customers and co-workers. |
| Non-disclosure clauses | prevent workers from disclosing confidential information relating to their employment. |
We'd love to help you experience life with greater choice.
ALL DAY CONFERENCE @ Mornington Racecourse
6 May 2025 - 8:30am - 5:30pm
In today’s fast-changing world, staying competitive means embracing new trends and technologies. At B.I.T.E.
Conference 2025, you'll discover groundbreaking strategies and tools—like A.I. and robotic process automation—designed to
help you navigate and succeed in the evolving business landscape.
Treasury has released exposure draft legislation for Payday Super that will require employers to pay superannuation at around the same time as salary and wages are paid to the employee. The changes are proposed to commence from 1 July 2026.
Shannon Smit dives deep into the compelling world of using self-managed super funds (SMSFs) to invest in property. With her signature energy and expertise, Shannon explains the mechanics of SMSFs, contrasting them with retail and industry super funds, and revealing the unique power they offer individuals to take control of their financial future.
What does it take to turn a modest property portfolio into a self-sufficient powerhouse? In this episode of The Accountant That Builds, Shannon Smit invites you into the fascinating journey of property investment, revealing the key steps, strategies, and mindset shifts that can transform two properties into a thriving, cash flow-neutral portfolio.
The Government’s big moment in the 2025-26 Federal Budget was the personal income tax cuts. Income tax cuts are a dazzling headline but in reality they deliver a tax saving of up to $268 in the 2026-27 year, with a tax saving of up to $536 from the 2027-28 year.
Paying off your mortgage is a significant financial milestone, but once you’ve reached the halfway mark, what’s the best next step? Should you continue aggressively paying it down, start investing, or focus on building your superannuation?
If you’re wondering whether it’s possible to finance your wedding, the answer is yes. A wedding loan could help cover your expenses while allowing you to spread the cost over time.
Self-Managed Super Funds (SMSFs) offer Australians greater control over their retirement savings, and property investment is one way people can take advantage of this flexibility.
Retail fitouts require a strategic approach to attract customers and drive sales. A visually appealing and functional layout can influence purchasing behaviour, making the investment critical.
The Fringe Benefits Tax year (FBT) ends on 31 March. We explore the problem areas likely to attract the ATO’s attention.
On 31 March, the Fringe Benefits Tax (FBT) year ends. With the ever increasing budget deficits, the ATO will be reviewing whether all employers who should be paying FBT are, and that they are paying the right amount. Who needs to lodge a FBT return? Find out here.
Retirement is a major life milestone, and planning for it requires careful financial preparation. With people living longer and enjoying more active retirements, having a well-structured superannuation plan is crucial. If you’re aiming to retire at 60, how much super do you need?
With the right strategy and financial discipline, borrowers can take full advantage of rate cuts and get ahead on their mortgage, potentially saving hundreds of thousands in interest.
Small businesses with a history of non-compliance may be required to transition to monthly GST reporting starting in April, as part of an initiative by the Australian Taxation Office.
How a trust distribution resolution is worded directly impacts the tax liability. It is important not because it determines what is taxable but because it is the basis for determining where the tax liability falls.
A car fringe benefit commonly arises when an employer makes a car they own or lease available for the private use of an employee.
Treasury has released exposure draft legislation for Payday Super that will require employers to pay superannuation at around the same time as salary and wages are paid to the employee. The changes are proposed to commence from 1 July 2026.
