A recent Australian Bureau of Statistics (ABS) survey found that 46.9% of businesses surveyed used some kind of restraint clause, including for workers in non-executive roles. The survey also found 20.8% of businesses use non-compete clauses for at least some of their staff and 68.2% for more than three-quarters of their employees.
Over the last 30 years, Australia has seen a decline in job mobility. Australia is not alone in this and other advanced economies have
experienced the same issue. While restraint clauses are not the only factor contributing to the decline – an ageing population and a rise in
post-pandemic market concentration in some industries has also contributed, it is specifically the role of restraints that is the focus of
the Competition Review issues paper (submissions close 31 May 2024).
From an economic perspective, declining job mobility impacts wage growth and innovation as restraints prevent access to skilled workers
within the economy. Productivity is a key concern as Australia’s productivity has declined in the last 20 years.
The review states that, “The direct consequence of a non-compete clause is that it hinders competition among businesses: it disincentivises
workers from leaving their current job, creating a barrier to the entry of new businesses and the expansion of existing businesses.”
For business however, this is the point - restricting the knowledge developed by a worker during their employment from benefiting a
competitor, limiting the likelihood of a ‘mass exodus’ of key workers from the business to a competitor, preventing clients from employing
key workers, and protecting the value of the business by preventing employees from walking away with customers that were hard won, at a
cost, by the business.
However, the impact of restraints appears to be a psychological deterrent given that most are not contested. Of the 115 matters relating to
restraints of trade between 2020 and 2023 dealt with by Legal Aid NSW, only one business commenced proceedings in court against a former
worker. And, a further study indicates that where employers seek legal redress in the courts, they are more likely than not to fail.
The international trend is to either ban restraints for workers under a certain income level and time limit restraints for higher paid
workers, or to limit the duration of restraints generally but specify a level of compensation to the worker for the restraint period.
| Non-compete clauses | prevent workers from joining a competitor or starting a new business in competition with their current employer for a period of time. |
| Non-solicitation clauses | prevent workers from soliciting former customers and co-workers. |
| Non-disclosure clauses | prevent workers from disclosing confidential information relating to their employment. |
We'd love to help you experience life with greater choice.
With strong capital growth and tight vacancy rates driving up rents, more and more investors have been looking to regional areas.
With home prices rising substantially over the past decade, homeowners are often sitting on a large amount of equity that they could use for other things.
If you’re looking to purchase business equipment, vehicles or just looking to better manage your short-term cash requirements, asset finance can be a big advantage.
Service stations were some of the strongest performing assets, with transactions up 50 per cent during 2022.
The record run of industrial rent growth is finally showing its first signs of easing after posting a 23 per cent rise in 2022.
The latest innovation to take the world by storm is ChatGPT, and its ability to work with the Australian tax system.
The ATO has released its final position on how it will apply some integrity rules dealing with trust distributions.
From 1 January 2023, those 55 and over can make a ‘downsizer’ contribution to superannuation.
The downside of not taking time out for your strategy is that there is a tendency to keep a short-term. Sometimes in the process, this short-term focus undermines longer term value and returns.
SMSF loan is the possibility of getting a better interest rate to save more money. You could save thousands more if you refinance to a lower rate SMSF loan.
Buying your first home can be exciting and overwhelming at the same time. We have provided this guide to assist you in preparing for the home buying journey and we will be here with you, every step of the way.
Our Borrowers Guide to Construction Loan has been designed to assist you gain a better understanding of how the lending process works
for building and construction.
The amount you can borrow will depend on several factors and is another reason why it is important to engage your Mortgage Broker in the
process before you are wanting to buy land or build.
Our Borrowers Guide to Lending has been designed to assist you gain a better understanding of how the lending process works.
The mortgage process can be overwhelming and confusing at times, but when you understand the basic process, you will be much more prepared.
Rebalancing is a clever way to keep your superannuation fund investments in order.
The good news is that you may be able to use some of your home equity to boost your super and help fund your life in retirement.
Falling property prices and rent hikes mean the average income earned from residential property has risen.
ONLINE Webinar
19 January 2023 @ 12:30 - 1:30pm
Phase 2 STP will be the compulsory way to process Xero payroll as of March 2023.
Increasing gross rental yields. Falling property prices combined with rent hikes means the average income earned from residential property, as a percentage of property values, has risen.
Smart Business Solutions chief executive Shannon Smit, winner of SMSF Adviser of the Year award, talks about the evolution of her business and shares her insights on complex SMSF planning issues.
This video offers a Xero how-to on the latest details of the compulsory STP (Single Touch Payroll) Phase 2 rollout including Pay Item Transition.
This video offers a Xero how-to on the latest details of the compulsory STP (Single Touch Payroll) Phase 2 rollout including Leave Transitions.
Changes are coming about how you manage Xero payroll with Single Touch Payroll (STP) Phase 2. This video explains how to manage Employee Transition in STP Phase 2.
Summer is a great time to list and a sell a home as buyers have been thinking about property over the summer.
When new couples start living together one of the first things they need to consider is how they will manage their finances.
A great way to deal with the post-Christmas financial hangover is to look at different ways to consolidate your debts.
Giving peace of mind and a sense of direction and calm is one of the greatest gifts that we feel privileged to offer our clients.
Getting a good grasp of your business’s cash flow situation will help put you in a strong financial position.
Commercial office assets represented 34.2 percent of all commercial property sales during 2022, up from 27.2 percent last year.
The commercial property sector continues to grow. 2023 is shaping up well with a range of opportunities for investors.
You will be amazed in this race against time to reach the finish line. Welcome to The Amazing Race memoir - Smart Business Solutions 2022 End of Year Team Building and Christmas party.
The Government’s ‘Secure Jobs, Better Pay’ legislation passed Parliament on 2 December 2022.
If you are required to but have not yet applied for your ID, you should seek an extension immediately.
The most effective way of sharing Christmas joy with customers is not necessarily the most tax effective.
In many instances, businesses might need to wait 60 days or more to get paid, which can put a strain on the business's cashflows.
While conditions for retail tenants have been tough during lockdowns, the luxury end of the market and certain sectors continue to perform strongly.
After a record-setting few years, industrial property has continued to perform strongly throughout 2022.
The headlines say negative gearing is "gone." For most investors, that is not what the new law does.
From 1 July 2027, the 50% CGT discount will be replaced — for individuals, trusts and partnerships — by two mechanisms working together: indexation of the asset's cost base, and a minimum 30% tax on the resulting net gain.
.png)
.jpg)
