In this edition, we discuss the Federal Government’s consultation on reforms to non-compete clauses and other restraints, the new approach of the Australian Securities Exchange (ASX) to the release of listing rule waivers and the Takeovers Panel’s reasons for its decisions not to conduct proceedings in relation to the affairs of FBR Limited (ASX:FBR) (FBR) and Pact Group Holdings Ltd (ASX:PGH) (Pact Group).
In Risk Radar, we cover ASX’s renewed focus on earnings surprises during the 2025 reporting season.
Regulation
Federal Government consults on reforms to non-compete clauses and other restraints
On 24 July 2025, the Federal Government released a consultation paper seeking feedback on proposed reforms to ban non-compete clauses for low and middle-income workers, no-poach agreements and wage-fixing agreements, which are aimed at boosting wages and productivity across the Australian workforce. The initiative responds to concerns that these mechanisms restrict worker mobility and limit opportunities for higher pay, with over three million Australian workers currently covered by non-compete clauses alone. Research cited by the Treasurer suggests that removing non-competes could increase wages for impacted workers by up to 4% and add $5 billion to Australia’s gross domestic product annually. Organisations that would be affected by these reforms should consider their potential impact on talent retention strategies, employment contracts and broader workforce planning and may wish to participate in the consultation process before submissions close on 5 September 2025.
ASX reforms to waiver disclosures
On 22 July 2025, the ASX released its latest compliance update, announcing a change to its approach to the disclosure of listing rule waivers. From September 2025, listed entities will be required to release public statements outlining the nature, effect and rationale of any granted waiver within one business day of the ASX granting the waiver. However, where waivers relate to a confidential or incomplete proposal or notification, such disclosure must be made when the matter ceases to be confidential or incomplete. This change is aimed at closing the information gap between the grant of a waiver and its later publication in the ASX waivers register, thereby enhancing transparency for investors. It is also a prelude to the ASX releasing a formal consultation paper on its broader review of ASX Listing Rules relating to shareholder approval requirements, at the end of the 2025 financial year or in early 2026. These requirements were last reviewed in 2017 with a particular focus on reverse takeovers, but this time around, the ASX may well take a broader approach in a move to address the controversy over the James Hardie / Azek transaction.
Legal
Takeovers Panel publishes reasons for its decision not to conduct proceedings in relation to the affairs of FBR Limited
On 22 July 2025, the Takeovers Panel published reasons for its decision not to conduct proceedings in relation to the affairs of FBR. As discussed in a previous edition of Boardroom Brief, the matter concerned a $6.3 million two-tranche placement at an issue price of $0.01 per share to sophisticated and professional investors under FBR’s existing placement capacity (Placement). The applicant argued that the Placement approved at FBR’s general meeting “consolidated control in institutional hands” and the outcome was facilitated by a “procedurally deficient voting process that excluded and confused retail shareholders” through inadequate disclosure and unclear meeting materials. The Panel was not satisfied there was any evidence to suggest that the Placement conferred a control benefit on any particular shareholder, nor that it was structured to avoid shareholder approval or entrench the voting powers of a particular shareholder group. The Panel noted that the issues raised by the applicant, relating to general corporate governance and operational decision-making (including the management or ownership of intellectual property and the risk of offshore transfer), were not matters for the Panel’s remit unless connected to a control transaction or the acquisition of a substantial interest or were inconsistent with the principles in section 602 of the Corporations Act.
Takeovers Panel publishes reasons for its decision not to conduct proceedings in relation to the affairs of Pact Group
On 24 July 2025, the Takeovers Panel published the reasons for its decision not to conduct proceedings in relation to the affairs of Pact Group. As discussed in a previous edition of Boardroom Brief, the Panel received two applications from shareholders alleging that a proposed delisting would have a substantial coercive effect on minority shareholders and the Panel decided that it was not satisfied that the circumstances set out in the applications had or were likely to have an effect on the control or potential control of Pact Group. The Panel’s reasons emphasise that it does not have a general oversight role over listed entities, but rather its jurisdiction is limited to circumstances affecting the control of a public company or the acquisition or proposed acquisition of a substantial interest in a public company. The Panel was not satisfied that the circumstances set out in the applications were within its jurisdiction because (among other things) there had been no effect on control of Pact Group, the proposed delisting had been clearly disclosed to Pact Group shareholders in advance, the ASX had approved the proposed delisting and other remedies were available to shareholders (including if unacceptable circumstances were to arise at a later stage).
Risk Radar
New ASX disclosure expectations in relation to earnings surprises
In its 22 July 2025 compliance update, the ASX also announced that it will closely monitor listed entities – particularly those in the S&P/ASX 200 – for unexplained share price movements of 10% or more following results announcements this reporting season. Entities that trigger such moves can expect to receive ‘aware’ letters requiring them to justify their approach to managing their continuous disclosure obligations. Directors of listed entities should note that if the entity’s results are tracking more than ~10% below any previously issued earnings guidance (or more than ~15% below market consensus), it may be necessary to update the market or have a well-documented, defensible reason for not doing so – such as genuine uncertainty around where 2025 financial year earnings will ultimately land or difficulty in establishing a reliable market consensus. See our G+T insight article here.