It is a common practice for employers to enter into agreements with their employees to start an employer-employee relationship. The agreements are usually made in writing by the employer by incorporating conditions, which the employer and the employee mutually agree upon at the beginning as a standard form or terms negotiated between the parties. Surprisingly, many employers make verbal agreements with employees and do not finalize employment conditions in writing.
Over time, a company’s operations and employee responsibilities may change, but these changes are not incorporated into verbal or written contracts. This often leaves employers and employees exposed to uncertainty and potentially legal exposure.
Written contracts allow the terms of employment to be clear and unambiguous to ensure that both parties know and understand their responsibilities, duties and obligations under the agreement from the start of employment until it is changed or terminated. These contracts are known as common law work contracts.
Contract of common law and conventions in the workplace
Common law work contracts are not “industrial instruments” in contrast to the Australian Workplace Agreements (AWA), rewards and theoretical agreements that preserve state rewards (NAPSA).
A common labor contract can work simultaneously with an AWA, but employers should keep in mind that common law work contracts can not undermine the terms of an industrial instrument.
Protect your business: if you use common law contracts in your company, it is imperative that you ensure that all conditions or any relevant industrial instrument are scrupulously respected.
Restriction of commercial clauses
A business restraint clause is intended to impose limits or restrictions on an employee’s behavior after leaving employment. The restriction of trade clauses is intended to protect the legitimate commercial interests and goodwill of employers. There will always be two opposing interests, the freedom of an employee to make a living against an employer’s need to protect its legitimate commercial interest.
Employers should keep in mind that the restriction of the commercial terms will only be valid if they are reasonable in accordance with the applicable
restrictions to the commercial legislation in each state and territory.
In New South Wales; What is reasonable under the restrictions of the Trade Act of 1976 (NSW) will depend on the following factors:
the question of the restriction, the timing and extent of its operation, the nature of the employer’s business and the industry in which the employer operates the employee’s relationship with the clients and clients of the employer, the nature of the work performed by the employee
A business restraint clause written appropriately for an employee is an effective tool to protect the legitimate interests of an employer and can be applied when it can be determined that an employee has deliberately copied customer lists or business documents. before leaving your job. intention to compete with your employer. An employee may be prevented from continuing to behave in a manner contrary to his obligations under an employment contract and damages may be awarded to the employer in special circumstances.
Considerations for employers
Restriction clauses can be a useful way to protect legitimate business interests; However, employers should consider that determining the proper scope and application of valid restraint clauses is often complex and difficult and should seek legal advice with respect to employment contracts