The organization described such clauses as "inappropriate and unjust"
The Redfern Legal Centre (RLC) has lauded the Australian government’s prohibition of non-compete clauses for workers making less than $175,000.
The centre said in a statement that the announcement, which was made in the 2025 Federal Budget, represented “a significant victory for low-income workers in industries such as hospitality, wellness, and childcare, removing barriers to opportunity, better pay and conditions”.
“The use of non-compete clauses to restrict workers' mobility is an inappropriate and unjust clause for lower paid industries and workers”, the RLC said. “Low-income workers, such as baristas, hairdressers, and childcare workers, who are already dealing with low wage growth, rising rents, utility bills, and mortgage repayments, should not have to seek legal advice to pursue a better job”.
The centre indicated that granting workers better ability to shift between jobs and sectors drives employers to improve pay and conditions to the benefit of the wider community.
“Instead of being forced to remain in exploitative and often unlawful working conditions, this reform will empower workers to seek jobs with better pay and improved conditions”, said Seri Feldman-Gubbay, senior solicitor at the RLC’s Employment Rights Legal Service.
She explained that non-competes were initially intended to shield legitimate business interests; however, the clauses’ “widespread use and onerous restrictions” were “deeply inappropriate”.
“I frequently assist workers earning under $70,000 who have clauses in their contract that prevent them from working in the same industry anywhere in Australia for up to 12 months. In one case, a worker was banned from working in the same industry for 12 months after being employed for just two weeks with the employer”, Feldman-Gubbay said.
The RLC said that while the banning of non-competes was welcomed, low-income workers and others being exploited needed the protection of additional reforms like funding and expanding organisations accredited to certify Workplace Justice Visas. In particular, community legal centres require more funds urgently to facilitate their assistance of exploited workers.
“Banning non-compete clauses for low-income workers is a step forward, but there is still much work to be done to ensure that all workers are treated fairly and equitably, and to ensure in instances where that doesn’t occur, employers are held accountable”, the centre said.
