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

At a glance

• A consultation has been launched on the 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 AUD183,100. The government is also seeking views on its plans to ban no-poach agreements and wage-fixing agreements.  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 overtime work and work on weekends and public holidays. The legislation seeks to ensure that 'the specified penalty rate or overtime rate in modern awards that employees are entitled to receive are not reduced, and modern awards do not include terms that substitute employees' entitlements to receive penalty rates or overtime rates, where those terms would have had the effect of reducing that additional remuneration employees would otherwise receive'. The bill is currently at an early stage in the House of Representatives.