General news

The government will ban non-compete clauses that apply to workers earning less than the high-income threshold (in the Fair Work Act) currently at $175,000. Non-compete clauses, which are included in many finance sector employment contracts, can prevent an employee from taking a job with a new employer.  

The FSU has long called for them to be removed (including through an ACTU submission to Treasury last year). Doing so is expected to lift incomes for workers covered by these clauses by up to $2500 a year. According to the ACTU, workers in firms that use non-compete clauses are paid around 4% less on average than workers at other comparable firms that don’t. 

Read a case study below explaining how a non-compete clause impacted one FSU member, and how they would have benefited from it being banned. You can also read more about non-compete clauses here.

More budget relief 

The budget also contains other cost-of-living relief that will benefit working families, including: 

• An additional two tax cuts that, when combined with the government’s first round of tax cuts, will save workers on an average wage $2548 a year from the 2027-28 financial year (or $50 a week).  
• $150 energy bill relief ($75 per quarter). 
• Expanded Medicare, with nine out of 10 GP visits to be fully covered by Medicare. 
• Guaranteed three days of early childhood education and care, with parents no longer required to have to work, study or be looking for work for at least 16 hours each fortnight. 
• Adding contraceptive and endometriosis medications onto the PBS, along with a new Medicare rebate for menopause health assessments. 
• Further reduction in PBS-listed medications, cutting the cost of a script from $31.60 to $25. 

These are just some of the highlights. Read more analysis via the ABC here. 

The FSU welcomes the Federal Government’s announcement to ban non-compete clauses. We know these clauses have left workers stranded in jobs they didn’t want to be in while knowing they could be earning more income elsewhere. The ban is also projected to improve productivity by adding $5 billion to GDP. 

This upcoming federal election, we must vote for what will benefit workers the most. That includes locking in the progress we’ve made so far, and building on the work underway to lift wages and strengthen our working conditions. 

Don’t risk Dutton this election – get involved in our campaign here. 

Case study: What does removing non-compete clause mean for me? 

Illustrating how non-compete clauses can unfairly impact finance workers, the FSU assisted an insurance broker member, who left their employer for poor treatment, bullying and harassment. 

Our member, who lived in regional Australia, was bound by a geographically defined restraint for 12 months so they did not attempt to poach their former clients, despite being contacted by many of them out of the blue. 

During the restraint period, our member became aware that their former employer wasn’t putting their best foot forward in terms of client retention. For example, the former employer inflated one business’ premium by about 30%, despite a net saving being available. They also didn’t maintain a staff presence in the regional location. 

When the restraint period ended, our member established their own business.  

The member soon received a letter from their former employer’s solicitor. It accused them of speaking to former clients who had taken their business elsewhere, alleged our member had breached their contract, and demanded our member pay damages of $40,000. 

Fortunately, we were able to fight this and our member never heard back from their former employer after we wrote to them.  

However, it demonstrates the heavy-handed enforcement tactics that some employers will use to intimidate their former employees out of legitimately competing with them.