UK businesses with employees or operations in Australia should review employment contracts ahead of proposed Australian non-compete reforms that could render existing clauses unenforceable from 2027, according to employment specialist Roger Lewis of arch.law.
The Australian Government has announced plans to prohibit non-compete clauses for workers earning below the Fair Work Act high-income threshold, currently $183,100 excluding superannuation*.
The proposed reforms are expected to apply retrospectively, meaning existing non-compete clauses affecting employees below the threshold could become unenforceable.
Lewis said UK-headquartered organisations with Australian subsidiaries, offices or employees should ensure Australian contracts are not overlooked as part of wider employment risk and compliance reviews.
“Many international businesses operate using standardised employment contracts across multiple jurisdictions. The proposed Australian reforms are a reminder that local employment laws can have a significant impact on the effectiveness of contractual protections.”
He said businesses should review whether Australian employment contracts rely heavily on non-compete provisions and consider whether confidentiality, non-solicitation and other protective measures remain appropriate.
“For organisations with operations in both the UK and Australia, it is important not to assume that restrictions which remain enforceable in one jurisdiction will necessarily be effective in another.”
Lewis added that HR teams, legal advisers and business leaders should begin assessing potential exposure well before any legislative changes take effect.
* The current Fair Work Act high-income threshold is A$183,100 excluding superannuation (approximately £85,000)
