PRIVATE MEMBERS' BUSINESS
Ms BRISKEY (Maribyrnong) (17:54): I move: That this House: (1) recognises that workers should be able to use their skills, change jobs, and pursue better opportunities without unreasonable restraints on their mobility; (2) welcomes the Government's decision to ban non-compete clauses from 1 January 2027 for workers earning below the high-income threshold in the Fair Work Act, currently $190,100, covering around nine in ten Australian workers; (3) notes that: (a) non-compete clauses can make it harder for workers to move to a better job, negotiate higher wages, or start their own business; (b) greater job mobility helps skills, knowledge, and ideas move through the economy; (c) removing unnecessary restraints encourages employers to compete for workers through better wages, conditions, and opportunities; and (d) the Government has estimated that reforming non-compete clauses could lift the wages of workers covered by them by up to $2,500 a year; (4) further welcomes the Government's reforms to prohibit wage-fixing and no-poach agreements between employers, which restrict competition for workers; and (5) supports a labour market in which businesses compete for talent, and Australians are free to take their skills to the jobs where they can make the greatest contribution.
Right now, more than three million Australian workers have a non-compete clause in their contract. That is over 20 per cent of the nation's working population. To the average Australian, I'm sure when they hear the words 'non-compete clause' they picture someone in a corner office.
We've seen them mentioned in films and TV shows, usually in the context of a senior executive or a high-profile lawyer being told that they can't walk the company's secrets or clients across the road to a rival. While some of them are similar to these examples, this is not the reality for the majority of the three million Australian workers. These clauses turn up in the contracts of hairdressers, construction workers and early childhood educators.
Unions and their workers, many on the minimum wage, presented to the Treasury's competition review. Some of them told us that they were being sued by their former employers or that they were threatened with legal action because they had found a better job and wanted to take it. This week I'll be meeting with early childhood educators who are coming to this parliament to continue to fight for a fairer and more inclusive early education system.
They are part of a workforce that fought for years to be paid what they are worth, and they won a 15 per cent pay rise. But a pay rise only go goes so far if you can't take your skills to the centre down the road that may pay better. What makes me angry is that plenty of these clauses that are embedded in the contracts of low-income workers and workers where English is their second language wouldn't even stand up in court.
But, you see, that doesn't matter. The threat does work. People read the letter and they think about months without pay and they stay put.
Because working people are already doing it tough, they aren't in a position to take a risk like that. In my local community, I think of the dominant professions—education and healthcare work. That's over 20,000 people sitting where they are because of something they signed on their first day in the job.
So there's a fairness argument here, and it's a strong one. Of course, there's an economic one too. The most ordinary bit of bargaining power any worker has is being able to say, 'I've had a better offer.' Take that away and an employer has a lot less reason to lift pay.
The research suggests ending these clauses could lift wages for affected workers up to four per cent. On the median wage, that's about $2,500 dollars a year. This is huge for people who want to work for themselves as well.
I think straightaway about hairdressers, especially those I've met in my community. We know they spend many years building up a client base, and I'm sure many of them have dreams of opening their own salon. Then, on the flip side, there are tradies who want to go out on their own.
These clauses are a handbrake on their aspirations. The Productivity Commission's modelling suggests these changes could add $5 billion a year to the economy and help bring down inflation, which is not bad for a clause that, sadly, most workers never read before they sign their contract. So from 1 January 2027 we're banning non-compete clauses for workers earning under the high-income threshold in the Fair Work Act.
That's currently $190,100. We're also closing the loopholes that let businesses quietly cap wages through arrangements their own workers never agreed to. We're shutting down the no-poach deals that stopped competitors hiring each other's staff.
These changes bring us into line with a lot of other advanced economies. It sits alongside a tough new merger regime and the next phase of our National Competition Policy. Our government takes competition seriously, which is more than you can say for the decade those opposite occupied the government benches.
Under them, we had the slowest decade of productivity growth in 60 years. Markets got more concentrated and mark-ups went up. They blocked sensible competition reform at just about every turn.
This ban means the educator can take a better job at the centre down the road. It allows a hairdresser to realise her dream of opening her own salon. It means the apprentice with a better offer can just say yes to it.
Our government made a promise to build Australia's future. That future centres around working people. Our aim is to give them the best opportunities— (Time expired)