Federal government progresses election commitments on non-competes and protecting penalty awards

At a glance

• A consultation has been launched on the federal government's proposals to ban non-compete clauses for certain workers.
• A new bill has been introduced seeking to protect penalty rates of pay within modern awards.

The federal government has now taken steps to progress some of the commitments made in its 2025 - 2026 budget including:

• Launching a consultation on 25 July 2025 seeking views on its proposals to ban non-compete clauses for low and middle-income workers ie those earning less than the high income threshold, currently base salary of AUD183,100 (excluding superannuation). The government is also seeking views on its plans to ban no-poach agreements and wage-fixing agreements between employers. The consultation runs until 5 September 2025, after which the government will consider next steps.
• Introducing a bill to preserve penalty rates for employees in modern awards. Penalty rates are higher rates of pay for certain types of work including overtime work and work on weekends and public holidays. The legislation seeks to ensure that 'pre-existing penalty and overtime rates in modern awards are not reduced, and no terms are included in modern awards that would substitute penalty or overtime rate entitlements with alternative entitlements that would reduce additional remuneration from penalty or overtime entitlements that any employee would otherwise receive'. The bill is currently at an early stage and is before the House of Representatives.