Labor’s employment landscape changes

We have seen considerable changes to the employment landscape over the past few years under the Albanese government. Following Labor’s emphatic re-election, there is likely to be a period of consolidation in this area followed by yet more employee-centric HR reforms.

The anticipated changes will have a significant impact on businesses of all sizes.

The key changes are likely to include:

1.             a ban on non-compete clauses and other post-employment restraints in certain circumstances;

2.             higher Award wages and protection of penalty rates; and

3.             a national framework for long service leave (including portable long service leave).

Non-compete clauses & post-employment restraints

From 2027, Labor has indicated that it will prohibit non-compete clauses for workers earning under the high-income threshold (currently $175,000 per year).

The change was pitched as a cost-of-living measure to boost incomes for middle and low-income workers.

With more than three million workers covered by non-competes in Australia, Labor claims the measure will increase workers’ wages by up to $2,500 for workers on median wages and also their bargaining power.

The Government is also considering amending competition laws to prevent:

(a)           no-poach agreements which block staff from being hired by competitors; and

(b)           employers from capping workers’ pay and conditions.

These changes are intended to increase job mobility generally and will have far-reaching implications for the protection of an employer’s confidential information and trade secrets.

Wages and penalty rates

The Government intends to increase Award rates and is also set to pass laws to ensure penalty rates are protected. The crackdown on wage theft will continue.

National framework for long service leave

In light of pressure from the Australian Council of Trade Unions, the Government is considering a unified, national framework for long service leave which may include portable long service leave.

Preparing your business for these changes

These anticipated changes, together with recent legislative changes already in force, mean that it is more important than ever for employers to:

(a)          review employment contracts now to ensure their business interests are adequately protected and will be in the future. We anticipate that employers will increasingly be required to rely on robustly drafted confidentiality and IP clauses (rather than traditional restraint clauses) in cases where employees leave to work for a competitor; and

(b)           understand recent and anticipated changes to Modern Awards, including changes relating to pay and penalty rates. Ongoing compliance is imperative given that wage theft may amount to a criminal offence in certain circumstances, resulting in imprisonment and/or high penalties.

If you require assistance or seek any further information, you may reach out to our experienced employment law team by writing to us on hello@pragma.law or telephone us on +61 (8) 6188 3340.