Non-Compete Clauses: Sensible Shift or Slippery Slope?

In a move that’s caught many by surprise, the Federal Government has announced that non-compete clauses will be banned from 2027 for workers earning below $175,000 a year. It’s pitched as a way to give Aussie workers more freedom to move toward better, higher-paying jobs—especially in industries like childcare, construction and hairdressing. And in those cases?

Fair enough. Locking someone into a job when there’s no real risk to the business does feel out of touch. But if you’re leading a firm where people are the custodians of your client relationships, your strategy, your IP—and let’s be real, your reputation—then this might have raised an eyebrow (or two), or in my case, lost my breath.

At Exceler8, we’re often seen when a trusted team member leaves and takes a chunk of your hard-earned client base—or team—with them. So what should you be doing now? Here’s our honest advice (no panic, just prep):

1. Give your contracts a proper once-over. 📃
Don’t wait for 2027 to roll around before realising your restraint clauses are outdated or too vague to stand up. Start by reviewing your non-competes and shift your focus to non-solicitation clauses—the ones that stop a former employee from taking clients, team members, or suppliers with them.

2. Make sure you’re protecting the right things.
Ask yourself: What am I actually trying to safeguard?
– Is it confidential info?
– Client relationships?
– Future plans or strategy?
Not every role needs a heavy-handed restraint. But some do – and there are smarter ways to do it than relying on old templates.

3. Talk to your leaders. 🔊
If you’ve got managers or partners signing contracts, do they know what these changes mean? Now’s the time to get everyone on the same page—especially those in roles where risk and relationships run high.

4. Don’t rely on a clause to do the work of culture.
Restraints are a last line of defence—not your only one. If your people feel seen, supported, and genuinely valued, they’re far less likely to jump ship in the first place. (Yes, that’s your reminder to keep investing in your leadership, too.)

5. Keep your ear to the ground. 👂
This change is still in consultation, which means the details are a moving target. We’ll be keeping a close eye on the updates—and translating them into plain English as they come.

This isn’t about doom or drama. It’s just about being prepared.

Because whether or not you’ve ever enforced a non-compete, chances are you’ve relied on the comfort of having one there. If this announcement has you digging through old contracts or wondering if your people protections still hold up—start the conversation now. You can check out further info via this ABC article.

We’re here when the people stuff gets messy. No suits. No scare tactics. Just real-world advice that won’t give you a headache.