Written by: Eloise Turnbull, Associate Solicitor, Employment Law (Updated: 15 September 2026)
Understand the 2026 draft legislation banning restraints of trade and how to protect your business interests.
For decades, employers have relied on restrictive covenants to protect their clients and confidential information from departing staff. However, incoming federal legislation proposing a non-compete ban in Australia will soon disrupt these traditional protections. Applying under Commonwealth law with direct impacts for Queensland businesses, the draft laws significantly restrict how you manage post-employment risks. Our employment lawyers on the Sunshine Coast have reviewed the proposed changes to help you prepare before they take effect in mid-2027.
Proposed Non-Compete Ban Australia: Changes To Restraint Clauses
The Treasury Laws Amendment (Banning Unfair Non-Competes) Bill 2026 fundamentally changes how you can restrict departing staff. Amending the Fair Work Act 2009 (Cth), this draft federal legislation applies universally across Queensland and the Commonwealth. This Bill confirms heavy restrictions are imminent.
This proposed framework alters standard contractual protections by introducing two major prohibitions:
- Income-based bans: A post-employment restraint of trade is completely prohibited for employees earning at or below the high-income threshold (currently $190,100).
- Cascading clause bans: The common drafting practice of using cascading restraint clauses—where multiple time limits and geographic radii are listed to ensure at least one survives judicial scrutiny—is banned entirely.
To assess your immediate risk, determine the specific high-income threshold under the Fair Work Act for each of your employees. Standard employment templates relying on these traditional mechanisms risk becoming legally void.
How Does The Non-Compete Ban Australia Affect Non-Solicitation?
New Commonwealth employment law reforms directly affect how you manage departing staff. While public discussion often focuses on non-competes, these changes also heavily restrict the enforceability of non-solicitation clauses.
The Bill dictates that your ability to restrict an ex-employee’s actions depends entirely on who they attempt to recruit:
- Co-workers: You cannot prevent a former employee from hiring your current staff. The reforms reshape employee poaching laws by prohibiting co-worker non-solicitation clauses outright.
- Clients: You face stricter limitations when attempting to stop departing staff from approaching your customer base. You may only impose these restrictions if you can demonstrate they are strictly necessary to protect commercial interests, rather than merely suppressing fair competition.
If you need to enforce a non-solicitation clause in Queensland, you must clear these federal thresholds to prove your business requires protection.
How No-Poach Agreements Are Classified As Cartel Conduct
Provisions in the draft legislation capture business-to-business arrangements as well as individual contracts. The impact of the national ban extends to agreements with competitors, where strict new competition rules apply. Entering a no-poach agreement will soon be reclassified as cartel conduct.
Amendments to the Competition and Consumer Act 2010 (Cth) explicitly prohibit wage-fixing and mutual agreements not to hire a competitor’s staff. Previously, businesses often questioned whether these specific restraint of trade clauses were enforceable. The 2026 Bill removes that ambiguity by treating them as serious anti-competitive behaviour.
Because these arrangements fall under Commonwealth jurisdiction, the consequences for participating businesses are severe. Regulatory action may include:
- Significant corporate fines based on business turnover.
- Pecuniary penalties for directors and managers involved in the agreement.
- Potential criminal charges for serious or systemic breaches.
Relying on informal handshake agreements with competitors to retain your workforce exposes your business to regulatory prosecution.
Steps For Sunshine Coast Employers To Audit Contracts
Priority should be given to auditing your existing employment agreements before the changes take effect by the mid-2027 commencement date.
Historically, managing a restraint of trade in Queensland involved proving a clause reasonably protected legitimate commercial interests. With traditional restraints facing strict prohibition under the new reforms, you must shift your focus toward alternative mechanisms to secure your assets.
To protect your business under the new framework, you should implement the following:
- Robust confidentiality clauses: Clearly define confidential information and outline specific post-employment obligations.
- Intellectual property provisions: Ensure your contracts explicitly assign all intellectual property created during employment to your company.
- Garden leave: Use paid garden leave to keep an employee out of the market during their notice period while maintaining their duty of loyalty.
While the non-compete bans operate under Commonwealth law, enforcing confidentiality and intellectual property protections heavily relies on Queensland common law and equity. Our business lawyers on the Sunshine Coast can review your current contracts to identify vulnerabilities. Updating your agreements now clarifies your legal position before the legislation commences.
Key Takeaways
The draft Treasury Laws Amendment (Banning Unfair Non-Competes) Bill 2026 signals a significant shift in employment law, introducing a non-compete ban in Australia that limits traditional methods of protecting business interests. By restricting restraints for employees earning under the high-income threshold and banning no-poach agreements, the reforms require a proactive approach. Employers must review their contracts before mid-2027 and implement stronger confidentiality and intellectual property safeguards to protect their commercial assets.
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Disclaimer: This article provides general information only and does not constitute legal advice. It does not take into account your personal circumstances and should not be relied on as a substitute for professional legal advice. Strict time limits apply to employment claims under Australian law. For advice about your specific situation, please contact Greenhalgh Pickard on (07) 5444 1022.
Greenhalgh Pickard’s Employment Law Team
