More than three million Australian workers covered by non-competes
The Australian government is seeking feedback from businesses and the public on its plan to ban non-compete clauses to boost productivity and wages.
The government this week released a consultation paper to gain feedback from workers, businesses, and the broader community on policy details to support its reforms.
It aims to seek views on "whether further changes are required to other worker restraints and what these changes could look like."
It also wants opinions on complementary reforms to close loopholes in Australia's competition laws, which the government said allow employers to make agreements that can cap wages or block staff from being hired by competitors.
"This important step is just one part of the government's broad and ambitious competition agenda, including progressing a national licensing scheme for electrical trades people," the government said in a statement.
Submissions can be made online on the Treasury consultation hub until September 5.
"The feedback we receive from this consultation will be used to inform legislation for these important reforms," the government added.
Non-compete clauses in Australia
Non-compete clauses are contractual provisions that restrict employees from working for a competitor.
"Right now, more than three million Australian workers are covered by these clauses, including childcare workers, construction workers, disability support workers, and hairdressers," the government said.
Treasury's Competition Review found that some employers are misusing non-compete clauses to sue minimum wage workers, as well as threaten them with legal action if they switch jobs.
"Workers should not be handcuffed to their current job when there are better opportunities available for them and that's what these reforms address," the government said.
Previous research estimates that banning non-compete clauses could lift wages by up to four per cent, or about $2,500 per year for a worker on median wages.
The Productivity Commission also suggested that changes could improve productivity and add $5 billion to the GDP annually.
"Reforming non‑compete clauses is about encouraging aspiration, unlocking opportunity, lifting wages for working people, and making Australia's economy more dynamic and competitive," the government said.
Businesses across Australia have criticised the government's plan to ban non-compete clauses.
The Ai Group previously said the "deeply concerning" proposal to abolish non-compete clauses is a "disincentive to hire, train, and upskill workers."
"It will undoubtedly lead to the difficult renegotiation of employment contracts and litigation where employers will seek to protect their intellectual property and customer base built up over years of risk and effort which will now be threatened," said Ai Group chief executive Innes Willox in a previous statement.
