Proposed reforms concerning working from home entitlement and post-employment restraints
Authors: Amy Zhang & Simone Gangal
The government has finally released the draft terms of its proposed ban on non-compete clauses and other limitations on restrictive covenant use. A term establishing an entitlement to request to work from home will also soon be included in the award. These are two significant areas of reform that will have significant impacts on employers. While neither reform is yet in force, employers should be prepared for them to take effect over the coming year.
Working from home term in the Clerks Award
On 27 August 2026, a Full Bench of the Fair Work Commission decided to insert a new working from home term into the Clerks—Private Sector Award 2020: [2026] FWCFB 225. The new clause 5A creates a right to request to work from home, not a right to work from home. A request and any agreement must be in writing, and where an arrangement is agreed, the parties may vary the award requirements for continuous ordinary hours, the working of ordinary hours and the timing of breaks. A draft determination has been published, and submissions close on 17 September 2026. The term may later be adopted in other modern awards.
Proposed limitations on restrictive covenants
On 7 September 2026, the federal government released draft legislation in relation to limitations on the use of restrictive covenants. This has been a long-telegraphed reform.
The major points arising from the proposed reforms are the following:
- Ban non-compete clauses for employees earning below the high income threshold, currently $190,100.
- Ban on co-worker non-solicitation clauses, irrespective of income level.
- Ban on cascading restraints. Employers will need to choose the restraint duration and area at the outset. If the selected duration and area are deemed too broad and unreasonable, the restraint will not be upheld.
- The reforms are proposed to apply prospectively;
- Confidentiality protections and protections relating to non-poaching of customers are not affected.
The draft legislation is currently subject to consultation and the government is taking submissions on the draft legislation until 2 October 2026.
The reforms are intended to commence in 2027, subject to the passage of the legislation through Parliament. Whether the reforms will ultimately be passed in their current form remains to be seen.
Key Actions for HR and In-House Counsel
- Keep updated on the reforms.
- Review existing and potential working from home arrangements for employees covered by the Clerks Award and be aware of obligations for responding to a request to work from home.
- Review employment contracts and restrictive covenant agreements to ensure compliance with reforms and consider alternative avenues of protection available, including confidentiality obligations, longer notice periods and garden leave.
If you require legal advice or assistance, please contact our Harmers team at +61 2 9267 4322.
