Imagine, for a moment, you’re a first year apprentice hairdresser. You’re 16 years old, still living at home with your parents, and getting by on an annual trainee wage of less than $40,000. It’s highly unlikely that you have a deep understanding of Australia’s industrial relations system because the only contract you’ve come across to date is for your smartphone.

Despite the modest wage and entry-level position, a business in the nation’s capital employing this teenager required her to sign a non-compete clause when joining the salon.

Credit: Dionne Gain

That non-compete clause meant if she left the salon (or was sacked), she would be barred from working at another hairdresser within a 30-kilometre radius, cutting the hair of any of her previous clients or even talking to salon suppliers for 12 months.

Businesses talk a big game about enjoying the cut-and-thrust of competition, how it brings out the best of them. But when a 16-year-old on $39,559 is considered such a threat to a business’s survival that they’re barred from colouring the hair of anyone in suburban Canberra, I call bullshit.

Non-compete clauses have long been a particular bugbear of Assistant Competition Minister (and economist) Andrew Leigh, driven in part by mounting evidence that the growth in these clauses have contributed to the global slowdown in productivity. Hence, the federal government’s promise to ban non-compete clauses in work contracts for people earning less than $183,000 a year from 2027.

The Australian Bureau of........

© The Sydney Morning Herald