[Australia] Push to ban non-compete clauses from work contracts

The Australian Council of Trade Unions (ACTU) is pushing for a ban on non-compete clauses being written into work contracts, Yahoo Finance reports.

Government data revealed that at least one in five Australians (or four million workers) are locked into an agreement preventing them from starting their own business or working with a competitor. 

Joseph Mitchell - ACTU assistant secretary - told The Australian Financial Review that businesses had recently gone “completely haywire” on some workers with some non-compete rules. 

Recruitment expert Graham Wynn reportedly told Yahoo Finance that this rule is intended to protect businesses if someone jumps ship.

"Companies will say in their agreements or contracts, if you leave this organisation you cannot contact our clients or competitors within a three, six or 12-month period," he said.

"It's designed to stop people leaving the company and taking a whole list of clients with them, or pinching business from them ... that's what it's designed to do."

From an employer's perspective, non-competes allow them to retain staff and clients while protecting their intellectual property.

But, from an employee's perspective, being banned from working for a competitor can impact their ability to get a new job and prevent them from making money with a ‘side hustle’.

Mr Wynn told Yahoo Finance that there is a "grey area" in the rules, allowing employees to inform clients they are moving to a different company while still employed at their current business. This action doesn't infringe on a non-compete contract but contacting clients after leaving an employer can cause legal issues.

He pointed out that businesses can pay a departing employee a sum of money to uphold the non-compete after they leave.

Mr Mitchell said the ACTU would campaign for this type of work rule to be abolished, adding that some people are being prevented from working for up to 12 months.

He reportedly stated that the ACTU's push is not solely for full-time workers.

The union will also try to ban non-compete clauses for part-time and casual staff, together with gig economy workers.

“If a business is not providing you with full-time hours, and you’re a contractor, part-time or casual, we don’t think it’s reasonable they have a veto right over where else you work,” Mr Mitchell told the AFR.

Source: Yahoo Finance

(LInks and quotes via original reporting)

The Australian Council of Trade Unions (ACTU) is pushing for a ban on non-compete clauses being written into work contracts, Yahoo Finance reports.

Government data revealed that at least one in five Australians (or four million workers) are locked into an agreement preventing them from starting their own business or working with a competitor. 

Joseph Mitchell - ACTU assistant secretary - told The Australian Financial Review that businesses had recently gone “completely haywire” on some workers with some non-compete rules. 

Recruitment expert Graham Wynn reportedly told Yahoo Finance that this rule is intended to protect businesses if someone jumps ship.

"Companies will say in their agreements or contracts, if you leave this organisation you cannot contact our clients or competitors within a three, six or 12-month period," he said.

"It's designed to stop people leaving the company and taking a whole list of clients with them, or pinching business from them ... that's what it's designed to do."

From an employer's perspective, non-competes allow them to retain staff and clients while protecting their intellectual property.

But, from an employee's perspective, being banned from working for a competitor can impact their ability to get a new job and prevent them from making money with a ‘side hustle’.

Mr Wynn told Yahoo Finance that there is a "grey area" in the rules, allowing employees to inform clients they are moving to a different company while still employed at their current business. This action doesn't infringe on a non-compete contract but contacting clients after leaving an employer can cause legal issues.

He pointed out that businesses can pay a departing employee a sum of money to uphold the non-compete after they leave.

Mr Mitchell said the ACTU would campaign for this type of work rule to be abolished, adding that some people are being prevented from working for up to 12 months.

He reportedly stated that the ACTU's push is not solely for full-time workers.

The union will also try to ban non-compete clauses for part-time and casual staff, together with gig economy workers.

“If a business is not providing you with full-time hours, and you’re a contractor, part-time or casual, we don’t think it’s reasonable they have a veto right over where else you work,” Mr Mitchell told the AFR.

Source: Yahoo Finance

(LInks and quotes via original reporting)