The Business Council of Australia (BCA) welcomes the opportunity to make a submission on the exposure draft Competition and Fair Work Legislation Amendment (Banning Unfair Non-Competes) Bill 2026 (the draft bill). The BCA is a member-led organisation, representing more than 120 of Australia’s leading employers.
Australia needs stronger productivity growth to lift living standards and a bold vision for the nation to be a top ten investment destination globally. The draft bill would undermine these objectives. It would make routine contracting and business transactions more difficult, discourage investment in employees and innovation, impose substantial red tape and create potential criminal liability for conduct that does not harm competition.
The BCA supports the objectives of improving worker mobility and promoting fair competition. We recognise the case for a targeted prohibition on agreements between businesses that compete in a relevant market not to recruit one another’s employees or to fix remuneration or employment conditions, where the agreement is intended to suppress competition and is not reasonably necessary for a legitimate commercial arrangement.
However, the draft bill goes much further than this. Schedule 1 may capture ordinary workforce provisions in service contracts, business sales, joint ventures, secondments, labour-hire arrangements and franchise agreements, even where the parties do not compete. The Schedule can apply even where there is no anti-competitive purpose or effect. Many contractual provisions would be affected, including those that promote safety, service quality, employee protections, investment in training or the efficient delivery of services. The proposed exemptions are narrow and uncertain, and depend on businesses satisfying onerous requirements.
Treasury has acknowledged that it is difficult to estimate the prevalence of no-poach and wage-fixing agreements and that there is limited evidence of their use. This evidence does not justify the breadth of the proposed prohibitions or the exposure of businesses to potential criminal liability.
The proposed ban on non-competes in Schedule 2 creates a further productivity risk. Post-employment restraints are highly fact-specific. Once confidential information is misused or valuable customer or workforce relationships are lost, the resulting harm can be difficult or impossible to remedy. A one-size-fits-all rule cannot account for every circumstance without unintended consequences. Over many decades, courts have developed and applied principles that stop the enforcement of unreasonable restraints, while permitting appropriately tailored restraints where necessary to protect legitimate business interests. The draft bill goes beyond codifying the common law by imposing blanket rules based on income, employment status and form of instrument. It would invalidate some restraints that satisfy the common law requirements, including co-worker non-solicitation and cascading terms, and is likely to discourage investment in training, workforce capability and commercially sensitive work.
The draft bill also conflicts with other Government policies. The Government has separately proposed new criminal penalties for a failure to prevent modern slavery. It is likely that the modern slavery reform would encourage (or potentially require) affected businesses to set and monitor contractual labour standards throughout their supply chains to establish a defence to criminal liability. There is a real risk that those same contractual protections could be characterised as wage-fixing under this draft bill. This creates a serious policy conflict. Businesses may need contractual labour protections to reduce their exposure under the modern slavery reforms, but those same protections could expose them to criminal cartel liability under the draft bill.
There is a more egregious inconsistency in the Government’s approach to multi-employer bargaining. Its workplace relations reforms have expanded union-led coordination of wages and conditions across businesses competing for the same customers or work, despite recognised risks to competition and productivity. It is fundamentally inconsistent to protect and expand that coordination while exposing businesses to potential criminal cartel liability for ordinary provisions in commercial agreements between businesses that may not compete, without requiring proof of competitive harm. Multi-employer bargaining can facilitate collusion between businesses that compete; while the draft bill may prohibit (or even criminalise) labour standards being set for businesses that do not compete.
The BCA’s primary position is that the proposed Schedule 1 cartel prohibitions should not proceed and, as well, the Schedule 2 rules about post-employment restraints should not proceed – instead the common law should continue to govern post-employment restraints. Clearer public information would complement the existing framework and help employers and employees understand their rights and obligations. Further regulatory intervention would not be the most effective or proportionate way to improve worker mobility and promote fair competition.
If the Government proceeds, the cartel provisions in Schedule 1 should be confined to conduct that presents a genuine competition concern and supported by broad, certain exemptions for legitimate commercial arrangements. If the Government proceeds with Schedule 2, no category of post-employment restraint should be prohibited outright where an employer can demonstrate that it is reasonable and necessary to protect a legitimate business interest. Criminal sanctions should not apply to the new cartel provisions, and invalidity or unenforceability should be the primary consequence of a non-compliant employment restraint. Businesses should also receive at least two years to implement any reforms, with appropriate protection for existing arrangements. Without substantial amendment, the draft bill will increase the cost of doing business, deter productive activity and expose legitimate commercial arrangements to consequences that are disproportionate to the harm the reforms are intended to address.