The 2027 Non-Compete Ban in Australia: A Critical Prep Guide for HR and Employers
29 July 2026
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The Australian Government has announced its intention to ban non-compete clauses for most Australian employees, with the reform proposed to take effect from 2027. Legislation has not yet passed, and the precise design of the ban remains subject to further development. For employers that currently use non-compete clauses as part of their employment contracts, understanding what is proposed and what alternative protections remain available is a practical starting point.
What is Proposed Under the 2027 Australian Non-Compete Ban?
The Australian Government announced its intention to ban non-compete clauses for employees earning below the high-income threshold under the Fair Work Act. The threshold is indexed annually on 1 July — from 1 July 2026, it is set at $190,100. If implemented, the ban would cover the significant majority of Australian employees.
The reform is part of a broader package that also includes proposed restrictions on no-poach agreements between businesses and anti-competitive wage-fixing arrangements. Treasury released a Consultation Paper in July 2025. The design of the reforms — including how the ban would apply to existing contracts, what exceptions would apply, and how it would be enforced — remains subject to further consultation and legislation.
What employers can still use to protect business interests
Non-compete clauses are one of several tools employers use to protect confidential information, client relationships, and intellectual property after an employee leaves. The proposed ban would not affect the availability of other protective mechanisms, which are expected to remain in place regardless of the reform's outcome.
Protection Tool | What It Safeguards | Proposed 2027 Reform Status |
|---|---|---|
Confidentiality Agreements | Sensitive business data & trade secrets | No impact (Fully active) |
IP Assignment Clauses | Intellectual property created by staff | No impact (Fully active) |
Non-Solicitation Clauses | Poaching of clients or remaining staff | Under scrutiny (Final rules pending) |
Garden Leave & Notice Periods | Immediate competitive impact during departure | No impact (Highly recommended buffer) |
The proposed ban is not yet law, and the final shape of the reform — including how it applies to existing contracts and what exceptions will be available — will only be confirmed once legislation passes Parliament. Employers do not need to act immediately, but those who use non-compete clauses as a standard feature of employment contracts have time to assess their position and consider what alternative protections may be appropriate for their circumstances.
For specific advice on existing contracts, post-employment restraints, or the implications of the proposed reform for a particular business, consult a workplace relations or employment lawyer.
Official sources:
Last updated: July 2026
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