Select Committee Submission on Employment Relations (Restraint of Trade) Amendment Bill

Restraint of trade provisions are often inserted into the employment agreements of lower and middle-income earning workers. These clauses bind workers to not perform certain kinds of work for a period of time after the employment relationship has ended.

Legally, restraint of trade provisions should be justifiable and no greater than what is needed to protect a demonstrable and reasonable ‘proprietary interest’ of the former employer. However, many employers insert restraint of trade clauses without meeting these criteria and, workers do not have the resources to challenge them in the court.

This Bill codifies the common law around the situations where a restraint of trade provision may be lawfully inserted into an employment agreement. It also places important protections for lower to middle income earners and requires reasonable remuneration for any employee who is lawfully subject to such a clause.

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