Restraint Clauses Under Review
The Federal Treasury is currently engaging in consultation as part of a comprehensive review into worker non-compete clauses and other related restraints. This initiative is in response to concerns raised by stakeholders and recent court decisions. Here’s what you need to know about this important development:
Key Issues Identified:
- Prevalence in Contracts: Restraint clauses are frequently included in employment contracts, even for low-paid workers who often do not receive additional compensation for these restrictions.
- Impact on Worker Mobility: These clauses can significantly impede worker mobility, thereby reducing the availability of skilled labour in the market.
What’s Happening?
- Competition Review: The ongoing review is thoroughly examining these issues. The findings will be reported to the Federal Government between June and December 2024.
- Potential Outcomes: Depending on the review’s findings, there may be further industrial relations reforms aimed at addressing the identified concerns.
Action for Employers:
This review, along with recent court decisions, serves as a crucial reminder for employers to scrutinise their restraint clauses. It’s essential to assess whether these clauses reasonably protect your legitimate business interests or if they unnecessarily restrict employees from pursuing other employment opportunities.
Recommendations:
- Review Existing Clauses: Conduct a thorough review of all existing non-compete and restraint clauses in your employment contracts.
- Consult Legal Expertise: Engage with legal professionals to ensure your clauses are fair, compliant with current laws, and justifiable.
- Consider Alternatives: Explore alternative measures that can protect your business interests without unduly restricting employee mobility.
- Stay Informed: Keep abreast of the developments in the review and be prepared to adjust your contracts and policies in response to any legislative changes.
For further guidance on how to manage restraint clauses and ensure compliance with evolving regulations, feel free to contact us at Harmonise HR.