Restraining Restraints: Australia’s Post-Employment Shake-Up

The Australian Labor Government has recently released draft legislation that would restrict the use of non-compete clauses in contracts of employment. If the proposal is passed in its current form, it would be a first for two reasons: (1) it would be the first time the Federal Government has intervened in the post-employment restraint space; and (2) it would be the first time Australian legislation would operate to penalise an employer for merely including them in a contract of employment (even if the restraint was never enforced). More broadly, the proposals signal the increasing willingness of the Government not just to legislate directly to set minimum entitlements for workers (such as rates of pay and entitlements to leave), but to legislate about the terms that can – and can’t – be included in individual contracts of employment.