Federal budget confirms ban on non-compete clauses

As part of the 2025 Federal Budget, the Australian Government has announced it will ban non-compete clauses for employees earning under $175,000. This significant reform, set to take effect from 2027, will affect more than 3 million workers— including hairdressers, apprentices, and salon staff.

Non-compete clauses are contract terms that restrict employees from working for a competitor or starting a similar business for a set time after leaving a role. Originally designed to protect commercial interests, these clauses now commonly appear in industries like hairdressing—where small business owners often invest heavily in their teams through apprenticeship programs, ongoing training, and career development.

Employee perspective: more freedom to grow

Many employees will welcome this change. By removing restrictive clauses, the reform allows greater career mobility and empowers individuals to pursue new roles or independent ventures without legal barriers. The government suggests this move will increase wages, drive competition, and boost small business creation across the country.

Employer perspective: concerns about business stability

Salon owners and employers, however, face real concerns. Many invest significant time and resources into training staff, building client bases, and fostering strong workplace cultures. Without non-compete clauses, employers risk losing both staff and clientele with little recourse. As a result, some salons may move toward contractor-based or rent-a-chair models, which could reduce secure employment opportunities and structured training pathways for new stylists.

AHC’s position and ongoing advocacy

The AHC recognises the complexity of this reform. We support employment models that protect workers and encourage career progression. At the same time, we acknowledge the risks faced by business owners who operate ethically and contribute to long-term workforce development.

We will continue to monitor how the government plans to implement this change and what, if any, protections may remain for employers. The AHC will keep members informed as further details emerge.

Share your voice

This change has the potential to reshape our industry—and we want to hear from you.

📣 Join the discussion in the AHC Member Community to share how this may impact your salon, employment model, or career path.
📱 Contribute your thoughts on our Instagram or Facebook posts to help raise awareness and shape the national conversation.

Your collective feedback will guide our advocacy and ensure your voice is heard.