Termination of Employment - Restraint Period

sleet on 24/11/2018 - 14:33
Last edited 25/11/2018 - 22:31 by 1 other user

Hi guys,

Not sure if you can direct me to somewhere but I signed a contract stating a period of employment between 12/2014 and 12/2015. However, my employment has been extended but I did not sign a new contract and have been working there till this day.

I'm reading through it again and there is a restraint clause stating I must not work in a 2km of the business, that is in competition with it for 12 months.

I will be terminating, or my boss will be terminating my job, whoever pulls the trigger first. Due to late paid super (which I don't mind but my colleagues and I are losing potential interest on it) and non-existent pay slips, among a few shoddy business practises.

Would that restraint clause still apply even though I have not signed a new contract since 2015?

Is there a 'free' legal aid I can turn to?

Education & Work

Comments

  • mbck on 24/11/2018 - 14:59
    +3

    2 different things.

    Work is at fault for poor book keeping.

    If you work within the restraint period, then you'll be at fault.

    • [Deactivated] on 24/11/2018 - 22:37
      +9

      The restraint period only applies so long as they pay you during that period.

      They can't stop you from getting another job, nor can they sue you for it.

      • mbck on 24/11/2018 - 23:26
        +1

        Pretty sure there's a time limit after you leave your work place. It's not just stealing clients but stealing networks around the area (within reasonable distance).

        Most say 12 months, but I've heard 6 months is the most they can enforce that.

        Ofc they can't stop you from getting a job, rather getting a job within that distance for that period of time.

        • [Deactivated] on 25/11/2018 - 00:47
          +6

          It is 2018, the only businesses that are bound by such an arbitrarily small distances is convenience stores and cafes.

          It really makes no difference for an office worker. And if it is based in CBD, the it is unreasonable to lock someone out of such an area.

      • skyva on 25/11/2018 - 10:50
        +13

        As this is a question best answered by someone with a good understanding of employment and contract law, which you don't have, I suggest you don't making statements that are wrong. Frugal Rock answered it best below.

        My 2c:
        "The restraint period only applies so long as they pay you during that period." is wrong. Subject to a review of the type of employment, 12 months may well be too long for a junior role (assuming a senior exec isn't asking advice on Ozbargain).

        "They can't stop you from getting another job" is correct in so far as they cannot legally bar you from work. They can however write a nasty letter to your new employer claiming they employee is breaching a contract, that the old employer intends to sue, and that they will drag the new employer into the lawsuit. Often the new employer will just drop the employee as it is all too hard. The old employer can take the person to court over breacvh of contract.

        "nor can they sue you for it" They can sue, and bear in mind that to defend it you will need to spend tens of thousands of dollars. Civil action can take a long time, during which the employee may struggle to get work, whilst paying large legal fees.

        These issues can get nasty if an existing business is trying to push back against a new player, or they fear losing lots of staff. It may not be just about the employee leaving.

        If it was me I would keep a low profile for a while and make sure I wasn't seen taking any clients with me, at least for the first 3-6 months. If the old employer has done a few dodgy things, such as not paying your entitlements, you might argue they broke the contract first and therefore the restraint is ineffective (but this is not legal advice).

        • bluesky on 25/11/2018 - 13:54

          They can however write a nasty letter to your new employer claiming they employee is breaching a contract, that the old employer intends to sue, and that they will drag the new employer into the lawsuit. Often the new employer will just drop the employee as it is all too hard. The old employer can take the person to court over breacvh of contract.

          Exactly, this is what one fears - worse for me, they reminded me (veiled threats) about the restraints before my departure, took me aback, had to dig up my contract to look. Seeking legal advice was the right move, legal bills amounted to 5 figure sum, which fortunately I was not out-of-pocket in the end.

          Much of the discussion here centres on enforceability; in truth if a company has lots of resources, they can still cause you headache and time, irrespective of the enforceability. They can be litigious and a bully against the individual.

          In OP's case, keeping a low-profile (no poaching of clients etc) is good advice.

          • Blitzfx on 25/11/2018 - 18:07

            @bluesky: Can I get clarification that you paid 5-figures just to ask for advice? Not actually paying to defend yourself against your ex-employer sueing you?

            • bluesky on 25/11/2018 - 18:25
              +1

              @Blitzfx: Not just advice, they were pursuing, I wanted the restraint legally rendered void, quite a bit of to and fro and stretched a while - lawyer and barrister involved, I was prepared for court case - culminating in settlement.

        • [Deactivated] on 25/11/2018 - 21:07
          +2

          Nonsense, absolute nonsense.

          Your new employer isn't an idiot (or maybe they are) and know that such clauses are unenforceable.
          It doesn't matter how senior or junior you are, the only way it is enforceable is if they keep you on the payroll for the term.
          The second they stop paying, the clause is void and you're free to do whatever you want.

          In the extremely unlikely event it does go before a judge, they will make them pay you for the time you're under that contract and then enforce the clause.
          A company can't just stop you from working, and not fully compensate you for it.

          • orangetrain on 26/11/2018 - 09:19

            @[Deactivated]: What if contracts say the restraint is paid as part of your salary?

            • [Deactivated] on 26/11/2018 - 10:41
              -1

              @orangetrain: Regardless, if they want to enforce it, they have to pay you.

              • orangetrain on 26/11/2018 - 12:40

                @[Deactivated]: I don't think you understand, some companies work around the restraint by saying you were already compestated as part of your salary. So when you quit and complain about not being paid, they said they 'did' pay you

                • [Deactivated] on 26/11/2018 - 13:37
                  -1

                  @orangetrain: No, they do not.

                  You're just making things up now.

                  • orangetrain on 26/11/2018 - 15:18

                    @[Deactivated]: It was in my contracts.

                    • [Deactivated] on 26/11/2018 - 15:42

                      @orangetrain: That does not mean that they are legal nor enforceable.

                      If they wish to enforce it, they must continue to pay you at your normal rate or higher.

          • bluesky on 26/11/2018 - 16:20
            +1

            @[Deactivated]:

            Your new employer isn't an idiot (or maybe they are) and know that such clauses are unenforceable.

            The new employer may well know in majority of cases, they are unenforceable before the court. However, they are not yet so invested in you, that they are prepared to defend a lawsuit by the old employer, especially one with deep pockets. They do not need the distraction. field1985 example a case in point.

            If you are a developer, building new employer's software product, they do not need a link, which you provide, for the old employer to allege, that some IP of that belongs to them – if old employer has already proven to be litigious. Not saying any of this is true or would stand up in court, BTW. Just not appealing to the new employer. They would prefer to hire someone else.

            Another point often missed - when they are after you for restraint, the lawsuit does not just stop at the restraint. Usually, other spurious false claims are made as well. You still have to defend them.

            The second they stop paying, the clause is void and you're free to do whatever you want.

            You are free to do whatever, yes, and they are free to sue you – and often they do not care if they win or lose ultimately. It might even be harassment, there is still costs to you, and you have to judge if it is worth the while.

            In the extremely unlikely event it does go before a judge, they will make them pay you for the time you're under that contract and then enforce the clause.

            Yes, it could go before a judge or even settle before or out of court. And yes, you may even get a payout and compensation. In some way, its like a poker game. But is the pain worth it (even if you know chances are you will win in the end)? Perhaps for some. Not for others, and not for me, considering the disruptions, costs, time, uncertainty during the period. When all you want is to get on with life and work.

            So, if it is avoidable by keeping a low-profile, and not invite their attention, why wouldn't you? Of course, I am not saying you should not stand up, if restraint is unreasonable and they are bullying. I was prepared to go all the way.

            • mizazn on 27/11/2018 - 12:45
              +1

              @bluesky: I have recently been dealt with legal papers with the restraint period being 'thrown in' amongst other ludacris claims. My lawyer stated that you must clearly state in your letter of response that you were in a non-managerial position and are now in a non-managerial position and only an employee. I was also advised to be very careful in using words such as a 'consultant' and 'manager' which could open a can of worms.

              If you are just a junior/non-managerial position, my lawyer stated they don't have a leg to stand on

              This also is heavily swayed by how petty your ex-manager is and just like someone said below, they hide behind a big corporation utilising their legal fees which has no bearing on that manager themselves so they will push it as much as they can until higher management puts their foot down and works out the actual cost

              • bluesky on 27/11/2018 - 19:08

                @mizazn: All the best! Hope you get a good resolution. And thanks for sharing.

      • doodo477 on 25/11/2018 - 13:36
        +2

        @Drew22 is correct.

        Last time I talked to a employment lawyer, it would be considered un-reasonable in the judge to prevent/restrict another person from employment without compensation. If I remember correctly a judge did rule in favor of a employer to lock out a employee from employment in the area of expertise but set the compensation for employee was 3x yearly wage and super contribution for the duration of the restriction clause in the contract.

        • netsurfer on 26/11/2018 - 12:10
          +2

          It is not about correctness. There are a few more non-legal issues in play here. I agree with bluesky (on keeping a low profile).

          It is really up to your boss / manager. The reasons why company decided to do something even though they know it is not enforceable can be:

          • They need to show other staff (still at work) that they don't take these things lightly. i.e. that clause (to them) is not a joke.
          • If this is a repeated case (i.e. you are the second or third person in a row to do the same) and they let the first case go, then they might do something about it.
          • Keeping a low profile at least give your ex-manager an excuse that he/she didn't know.
          • It really depends on the message your ex-manager send to the upper management. If he/she gone and said that he/she wants the company to do something to prevent him/her from losing more staff, the company might do so.

          Being honest and going down the path that you know they don't have the law on their side may not be the best thing. They might think of it as you are provoking them. If you have a bad relationship with your ex-manager, he/she doesn't care about how much the company is going to waste on the law case, he/she just wants to make your life difficult (and it will be the lawyers doing all the dirty work, not him/her).

          • doodo477 on 26/11/2018 - 12:20

            @netsurfer: Everything you've listed is border-lining on intimidation of employees and I would never accept that business behavior and seek employment elsewhere.

            Under the law a former employer cannot prevent your employment, if the case is made they're restricting your employment by slander or intimidation you can take them to court for defamation of character.

            You have no legal obligation to the prior Employer outside of trade secretes and intellectual property. The only legal obligation is when they compensate you to RESTRICT or WITH-HOLD your employment option's that under the law is adequate.

            • netsurfer on 26/11/2018 - 12:27

              @doodo477: I understand, but things don't operate this way.

              I had an ex-colleague which left and join the client the next day. He kept a low profile and while my manager at the time was pissed, he didn't do anything about it.

              Months later, when another colleague wanted to do something similar, he went the honest way (and told the manger the truth before hand - after consulting with the new company first BTW). It all went pear shape very quickly. The end result was that his new employer, despite knowing very well the laws (and have big gun lawyers), decided to work out a deal, which resulted in that colleague working at the company for additional 6 months BEFORE he can join the new company.

              Unless you are a very high pay managers and willing to get lawyers, doing what "seems" to be the right thing can hurt you. In the case I mentioned, both companies already agreed, so what can that colleague do?

              That colleague told me he checked the cause with lawyers before talking to my ex-manager, but still…

              • doodo477 on 26/11/2018 - 13:43

                @netsurfer: Oh oh, yeah never be honest! In any negotiation the person who has the position of power is the one that can walk away from the deal.

                I don't understand this concept of honesty with employers really. You say you're leaving and hand in your resignation. They then can decide to offer a better position/pay to keep you or pay you forward and escort you out of the building.

                In either situation I've been asked why I'm leaving I just politely decline to give a explanation and wish the company best of luck in the future.

              • dannyhc on 18/12/2018 - 15:54

                @netsurfer: 6 Months before he could "leave" what the mother shit is going on there?

                Pimp Daddy Hustler: Y0 man got my finest hoe making 3 large, you want in?

                Pimp Daddy #2: w0rd up, sheeeet, damn I got my other hoes busy playing tricks right now, I'll be ready in 6 months.

  • [Deactivated] on 24/11/2018 - 15:07
    +4

    I think the terms of the contract would be reasonably expected to continue as previously.

    Regarding restraint, you have some protections under restraint of trade. If you shamelessly take an existing client list or pass off that you still work there, the contract might be successfully applied, but if you were to only deal with new clients and not cut the previous employer's lunch, you have a reasonable right to apply your trade fairly. If you were terminated, it's pretty hard for an employer to enforce the restraint clause such as working for a competitor. If they could demonstrate you were siphoning clients or stealing ideas, that would be much different.

    • mizazn on 27/11/2018 - 13:23

      Not entirely true - it is based on the industry too. My clients have a freedom to transfer and move between companies to be serviced and if they choose to follow you to another company it would be very hard for your previous company to prove that you 'stole' them. So they may use scare tactics such as go through your print history and say why did you print XYZ etc etc

  • qwerty on 24/11/2018 - 15:16
    -2

    Since you continued on the contract for 3 years after it expired you agreed to its terms - a court will most likely find in their favor if you work 2kms unless you find a breach of contract in their terms i.e they are supposed to pay on time and supposed to supply pay slips - talk to fair work

    • ely on 25/11/2018 - 22:45
      +1

      Talk to fair work; after the length of time it's very likely that you'd be considered an employee with the relevant rights (leave, super) if that haven't been giving them to you too.

      Very unlikely that the restraint clause could be enforced, but it's possible that they could be a pain by trying to do so if they were willing to burn the cash to do so.

      Source: I have some moderately insane restraint clauses in my own employment contract and spent some time arguing with my employer and sellin seeking advice about it. Eventually left them in as they're worrie worthless (and I'm not important enough for them to try to enforce them).

  • bluesky on 24/11/2018 - 15:45
    +1

    5 FAQs About an Expired Contract.

    If both parties continue ‘business as usual’, this will suggest that the parties intended to have the contract’s old terms dictate their relationship. The court will then decide as to whether the entire expired contract applies or only parts.
    …

    Yes, best to seek legal advice.

    • [Deactivated] on 24/11/2018 - 15:59
      +2

      I can understand that everyone says get legal advice, but in cases like these, the most common action of the employer is to take civil action to stop the activity. A fancy threatening legal letterhead letter served on a Friday afternoon trying to bluff authority. If the breach was major, maybe damages later, but realistically the choice is to stop/change the activity or to continue doing it in defiance. Up until that point, there isn't a huge risk, provided you aren't stealing trade secrets or poaching clients etc. If you are just a humble employee appying your trade reasonably, I don't see huge risks. The most likely outcome is having to stop in the future. I've been served cease and desists several times, cost the other party plenty and me nothing. Thanks to a family connection I've been able to respond in fancy pants legal letterhead, but underlying, nothing changed.

      • bluesky on 24/11/2018 - 16:11

        As you said, it is circumstantial (I do not know OP's specific circumstances, hence an advice that takes into account the worst-case scenario). If employer deemed there is valuable IP which you have created for them, and might be used in future employment, they can be quite vindictive (from personal experience). I prevailed (with legal help) because the restraint was unreasonable.

      • qwerty on 24/11/2018 - 19:45
        +1

        Your example you had a lawyer help you out because they are your family it cost you nothing- op will have to go to a lawyer to get that same level of help and that will cost him something .

        • [Deactivated] on 24/11/2018 - 19:56

          True, but that is at the point that I was served. At that point, perhaps legal advice is prudent and the counter bluffy legal letter is probably the most helpful thing. Before getting served, in my view, legal advice is optional in this matter if the OP has a clean conscience. The employer is unlikely to suffer immediate, sudden damages, so a likely scenario is just a formal letter saying stop, not a big sensational court case.

  • oscargamer on 24/11/2018 - 15:50

    What penalty would /could be applied to the op is they did work within the 2km limit?

    • bluesky on 24/11/2018 - 15:55

      They can tie you up in court. Within 2km for 12 months does not seem unreasonable. If you don't have a vindictive employer, and not much is at stake for them (e.g. valuable Intellectual Property, poaching their clients) - as Frugal Rock said, most will take no action.

      If the former employer pursues, there is a risk to the new employment, if there is a trial period at the new job.
      New employers are generally not keen to take on employees who are pursued by old employers.

    • field1985 on 26/11/2018 - 14:18
      +2

      My housemate had a non-compete clause in his contract. He ended up working for a competitor and was sued by his previous employer.

      He also lost his job with his new employer (who was also sued by his previous employer).

      He is now unemployed and with a huge debt for the court ordered damages ($50k+) and his own legal fees.

      This was in the Superannuation industry. Other industries might not be as litigious, but if in doubt, don't do it!

      What's the worst they could do? Destroy your life, by stripping you of your job, your savings (court costs) and any future career prospects/reputation in that industry

      • mizazn on 27/11/2018 - 13:34

        What sort of role was he in? If you're in a managerial position this is a possible outcome. Not generally for those in an non-managerial role

        • field1985 on 27/11/2018 - 18:14

          Sales role, not management. But he was exceptional at it. He secured $3 million in sales contracts in the 9 months he worked there.

          Which was more then the rest of the sales team combined. So they really didn't want to lose him.

          He was on $80k + commissions, but then the company changed the commission structure and screwed him out of $20k-30k.

          This led to him quitting. Then the competitor offered him $300k, he couldn't say no, and the rest is history.

          • bluesky on 27/11/2018 - 18:36
            +1

            @field1985: What an awful outcome! If he was ordered to pay damages, the court must have deemed the non-compete to be reasonable. Otherwise, the court would have set it aside.

  • thatonethere on 24/11/2018 - 16:34

    Maybe dont worry about it until mext year as it sounds like they would be out of business anyways. There is a big diff from setting up your own business to compete vs just joining an existing one too. It would heavily depend if you were to take the client list or not too.

    If you have an active trades based union they could be a good source of advice (and potentially them showing up at the workplace might be enough to back them off).

  • picklewizard on 24/11/2018 - 16:35

    Your wording is unclear - is it that you may not work within two kilometers of your current place of employment, if your new employer is in competition with the existing employer?

    1) Is that legally enforceable?
    2) Would they ever actually bother?

    • [Deactivated] on 24/11/2018 - 19:32

      1) Yes provided it's reasonable (eg, they can't stop you from working but this sounds quite reasonable).
      2) Only if vindictive or you cost them money. Depending on the industry you could cost them a significant amount of money to the point that they would. (eg. If you take a fair proportion of the clients you have gained while at this employer and they follow you to your next employer / own business). If it's a regular service, they'll take note of a loss in repeat your clients.

      • picklewizard on 25/11/2018 - 11:51

        I don't think that's reasonable at all! If you were talking about a capital city CBD, that basically makes you unemployable.

        • [Deactivated] on 25/11/2018 - 14:22

          It depends on where you're talking and the job you're in. Most jobs that have similar clauses are things like hairdressers in the suburbs etc. They don't want you just leaving and taking all their clients. Even 2km is probably really tiny in that instance. The 12 months may be a bit much though, they're usually written as
          - 12 months
          - 6 months
          - 3 months
          - 4 weeks

          or similar, so if a court finds 12 months is unreasonable, the 6 months stands etc.

          If you're in the CBD probably you're less likely to have customers who are loyal to a particular service provider in any case, given how many are within 2km. If you're in an office job this sort of restraint of trade is usually not used in favour of simply stopping you from poaching clients which is more relevant than 'where' you work.

    • field1985 on 26/11/2018 - 14:22
      +1

      1) Yes (if taken to court)
      2) Yes (I've seen it happen, see my response above)

  • cjbowden on 24/11/2018 - 16:49
    +3

    Unenforceable! The only exception would be a case where you sold your business to your employer. If you are just a regular employee, ignore it.

    • qwerty on 24/11/2018 - 19:46
      +4

      AGA Assistance Australia Pty Ltd v Tokody (2012)
      Freshfood Management Services Pty Ltd

      Case law says reasonable non competes are enforceable

      • Tnetennba on 25/11/2018 - 19:30
        -2

        That's a QLD case though, OP is in Sydney according to his profile. IANAL but I assume there would need to be a relevant case in the NSW courts or federal.

  • robbyjones on 24/11/2018 - 19:45
    -2

    If your contract has specific dates and no "ongoing" clause then your contract is over already. If the company you work for is in breach of their legal obligations to you then I would think they have already broken the contract. I wouldn't worry too much about it.

  • bobbified on 24/11/2018 - 20:07
    +1

    What is your role at this company?

    The more senior you are and the more access to confidential information you have/had, the more enforcement that clause is likely to be.

    If you're a junior employee without the above access you information, then that clause is likely to be deemed unreasonable.

  • hawkeye on 24/11/2018 - 22:30

    Is that 2 Km radius or by road shortest route longest route or walking via footpath including short cuts?

    No clear definition on 2Km

    • altomic on 25/11/2018 - 04:15
      +3

      so you're saying the OP could open a business in a hot air balloon directly over the soon-to-be-former employers business ?

  • elgrande on 24/11/2018 - 22:40
    +5

    Surely if your not getting paid your super then that is a breach of contract and you could terminate on those grounds.

    • kale chips suck on 25/11/2018 - 10:11

      To expand on this a little - there are really several questions here. 1. Is there a valid contract and 2., if there is, is in enforceable? 3. If it is enforceable, is the employer likely enforce it and 4., assuming they do and they win, what is the likely outcome.

      If there is no longer a valid contract then it's essentially moot. The rest falls away.

  • Hardlyworkin on 25/11/2018 - 03:35
    +6

    If they can't manage to give you a payslip then I doubt they are going to take legal action against you. Move on

  • zambuck on 25/11/2018 - 07:32
    +1

    You mention late paid super. My understanding is an employer may choose to pay super only quarterly, so if for example you were paid on Jan 1st, the employer could pay super on that pay as late as April 28th.

    https://www.ato.gov.au/Business/Super-for-employers/Paying-s…

    My experience is that businesses vary a lot in this, some paying super to funds on payday, others holding out as long as they legally can.

    • sleet on 26/11/2018 - 16:10

      I probably wasn't very clear in my first post. Please see the post below for a better explanation. Thanks for the input though, appreciate it.

  • gyrex on 25/11/2018 - 10:35
    +3

    Non compete or restriction clauses have to be reasonable and can't restrict you from finding work. Obviously an employee cannot steal information such as account records, names, phone numbers from the company they're terminating employment with since this is the property of the employer - this would be illegal and prosecutable.

    I'd argue that their restrictive clause wouldn't hold any water with fair work or court.

    https://insightsresources.seek.com.au/restraints-trade-non-c…

  • happydude on 25/11/2018 - 12:32
    +9

    You want free legal advice?! OzBargain the the right place!

    Restraint of trade clauses are generally unenforceable because they are written by idiots or they think they think you won't challenge it.

    A company can apply a restraint of trade clauses for one reason - to reasonably protect their interests.

    A court will generally assess this against your need to earn an income.

    It will depends on your role. If you are a checkout chick at Woolworths there are not exactly any company secrets you can take away and damage the company. If you are a sales manager with extensive industry contacts that if convinced to jump ship would cripple the business then, yeah a restraint of trade would be reasonable.

    Then there is the matter of the length of time and distance being reasonable.

    Only one element need be considered unreasonable for the whole clause to be struck out.

    From memory in NSW a court can vary a restraint of trade clauses to a reasonable level. Everywhere they are either reasonable or they are not.

    EDIT: my view - 12 months won't hold water unless you are making $250K+

  • Tech5 on 25/11/2018 - 12:38

    Restraint clauses are very hard to enforce, which is why most correctly written contracts write it in like a cascade. E.g. 1 year 2km, 6 months 1km or 3montbs 500meters. The court will choose if it goes to that stage. If it is literally just one written in, I would just test it by ignoring it

  • cashless on 25/11/2018 - 14:07
    +1

    Ignore it & call their bluff (after they’ve paid your super of course).
    Your right to make a living is always likely to win out in the event of any legal threats against you

  • peteru on 25/11/2018 - 14:41

    You can completely get sued and screwed over big time. See Ross and Anor v IceTV[2010]. I've worked with these guys and at both of the companies mentioned in the lawsuit. From what I know, the defendants have not done anything shifty that would have justified the lawsuit, damages or restraint. However, they were sued by the same person that spent years in courts with Channel Nine and eventually won. Some people just know how to win "lawyer wars". ;-)

    Here's a quick run down on the topic: http://www.chamberlains.com.au/restraint-of-trade-clauses-in…

    If you know that you are going to finish up at a particular time and the relations with the employer are good, you may want to talk to them about preparing paperwork that either modifies or removes that clause so that the result is acceptable to both parties. If you think that this is a possible point of contention that could flare up, it may be worth your while to spend a few hundred dollars to get a legal professional to advise. It will all depend on your specific circumstances - there's no generic answer.

  • rjstev on 25/11/2018 - 15:42
    +2

    I put a restraint of trade clause in employment agreements under legal advice but when I wanted use it the same lawyers (top Sydney firm) said forget it, it will never hold up in court it’s really just a bluff.

  • Plug on 25/11/2018 - 16:07
    +1

    In which line of work are you?

  • sleet on 25/11/2018 - 22:23

    Thanks for all the replies.

    To be a bit clearer, it is retail pharmacy. Being the prominent pharmacist at the store and working more days than my boss, I have a big clientele.

    Customers, patients prefer to see me, also confirmed by the neighbouring doctor. I guess it it's similar to how some people perfer certain doctors and some people prefer certain pharmacies, without sounding too cocky.

    I've had enough of the unethical practises and shortcuts on staff wages so I will be quitting. I was not aware that my super was not paid quarterly until now. So those 4 years of employment, each financial year the super was paid in 4 parts all in July - rather than one payment per quarter. Being an ozbargainer, i'm annoyed about the loss of potential interest earned.

    As it stands, I figured/assume the contract still extends to today even though I haven't signed anything.

    There is a neighbouring pharmacy with a team who I know and have had dinner with and have tried to poach me. I wasn't entirely sure if the restraint period would still apply.

    I'm guessing yes but hoping no.

    • buckster on 25/11/2018 - 23:20
      +1

      I would just go for it, they probably don't want you airing their unethical practices as payback for causing trouble

    • happydude on 26/11/2018 - 02:33

      Then I can see a restraint of trade being reasonable…. but for 12 months?… this seems very high. This is why cascade/ladder clauses are the way to go if a company is going to put one in.

      Unless you are in NSW my view is it wouldn't hold up.

      It is also worth noting if your boss "pulls the trigger" it won't be enforceable.

      (don't take my word for it though)

    • charzy on 26/11/2018 - 07:56

      I've rarely seen restraint of trade for pharmacist employees in my previous years of practice. It's more common with proprietor pharmacists when they sell their pharmacy, they don't buy a neighboring pharmacy that can harm the goodwill that was initially sold.

      IANAL, here are my 2cents.
      Check the clause more specifically. Normally there's a reason to why a ROT is specified, and the geographic distance with more specific details e.g. You will not actively take the former employer's clientele etc. I'm sure I've read somewhere that ROT shouldn't prevent your livelihood (and thus won't hold in many cases), and it's more to restrict malicious damage e.g. taking 'secret' trade business to another competitor etc. If the specifics are too vague, they usually cannot be held against you.
      In your situation, if customers learned that you were moving away from the current workplace to another AFTER you've left, and decided to see you instead, that should be OK as opposed to you still being at the current workplace and soliciting the customers that you will be working elsewhere.
      Very hard to prove the latter though in most cases, word of mouth always spread around however that shouldn't be your problem.

    • [Deactivated] on 26/11/2018 - 08:37

      If your new job is rock solid, it might be simpler to get fired.

    • zambuck on 26/11/2018 - 09:19

      Sounds like you might want to visit https://www.ato.gov.au/Individuals/Super/Unpaid-super-from-y… and make a report. Employers who don't themselves do the right thing can be required by the ATO to submit extra compliance paperwork and potentially be subject to more rigorous enforcement including fines, interest charges, etc. They won't be looking at your employer though unless someone tells them to take a look.

  • InfiniteRegression on 26/11/2018 - 09:18
    +1

    hi Sleet,

    While a lawyer would have more information, I've been working in the HR industry for some time. while it could be in the contract you would only honour it if they pay you for the period you are restrained. This is generally called Garden leave

    Hope this helps

    • sleet on 26/11/2018 - 09:19

      Thank you so much!

  • [Deactivated] on 26/11/2018 - 11:08

    Is it a small pharmacy? or a Multi national ?

    I very very very highly doubt a small individual pharmacy would bother to try enact such a clause, it takes a LOT of time and money to pursue something like this, and your boss already comes off as quite lazy.

  • netsurfer on 26/11/2018 - 11:39

    The clause is generally not enforceable. Honestly, it depends more on your boss / manager. Good bosses are nice and they respect your decision and they will not do those silly things. I have had great bosses (they are like good friends and I still get in touch with them). For those bosses, I will tell them the situation (and they will support you).

    However, I sense that's not the case for you. Therefore:

    • Don't go and tell everyone at work where you will be working (keep a low profile). Just say you have a couple of options and still deciding (or you have a few unconfirmed offers). If you tell them about it, even if they didn't want to do anything initially, they might feel the need to do so (to prevent other staff from doing the same).
    • Still try to leave in good terms with the old company if possible. If they do any action, those would generally be to deter your new employer from hiring you.
    • They could do some actions if they know your new employer really want you and might be willing to pay them some compensation or negotiate a transition period deal.
    • Tell the new company your concern and see what they say. See if they will back you.

    If they terminate your contract, then it will be really silly for them to sue you. It can be the opposite for big companies (i.e. banks). When you informed them you will be joining another bank, they normally try to pay you the remaining days early and ask you to leave a.s.a.p. (they are more concerned about you carrying information to another bank).

    In short, if your relationship with your current boss is at "close friends" level, talk to him/her privately and come up with the best solution. Otherwise, keep a low profile. Even if the law is on your side, playing hard ball is not a good idea. A clean and happy break up is better for both parties.

  • Plug on 26/11/2018 - 13:07
    +1

    Years ago I worked for a company, A, who bought out a competitor, B. The boss of B wasn't allowed to work in tbe same field for a year. A year and a day later the boss of B started a new company in the same line of work, visted all his old clients and poached them all back. Just thought I'd share.

  • bemybubble on 26/11/2018 - 16:35

    From my understanding is that unless consideration has been made towards the clause (i.e. they've paid you) then they are going to have extreme diffuculty enforcing…

  • T1OOO on 26/11/2018 - 19:48

    Legally they don’t have a leg to stand on. It’s not enforceable by law except to business entities rather than individuals.

  • AAAB on 26/11/2018 - 20:56
    +1

    FYI, your employer is required to lodge an SGC statement and pay the relevant interest and penalties on all late super.

    If his payment schedule is what you have said it is to be per above, then they will be in for a pretty substantial penalty + interest.

    This may be incentive enough for him to pay your outstanding super..

    • sleet on 26/11/2018 - 22:06

      I have all the evidence. I will report after I finish up. I have too much on my plate, working 2 jobs, 6 days a week (for a few weeks) to really take the time and report to ATO.

      But thanks, I will definitely be doing all you've mentioned.

      • AAAB on 27/11/2018 - 00:44

        Good to hear, the ATO doesn't take kindly to anything super related so this shouldn't fall on deaf ears

        I wish you all the best in a resolution

  • ankor on 26/11/2018 - 21:35

    Coming to ozbargain for legal advice is like going to facebook for medical advice. If you really want proper legal advice, talk to the state law society and get a referral to a lawfirm who specialises in employment law matters.

    • sleet on 26/11/2018 - 22:02

      I treat ozbargain like Wikipedia. It's great to use as general idea and directions to proper resources and references. The community come from a wide range of different backgrounds and experiences.

  • gstfree on 26/11/2018 - 21:40
    +3
    1. Generally the "non competition" clause is not enforceable. When you terminate the "employment contract", all clauses become bullshits. Please make sure you did not sign any "Deed of Release" that have "Non competition" clause. If yes, you must follow what's saying in the Deed.

    Normally I advise my employees: do not include unnecessary information when writing resignation letter. What the employer requires is your statement that you would like to terminate employment on the date xx.xxx.xxxx. You don't need to specify reason or who is your next employer.

    1. Normally the business owner would not spend legal costs for such "non competition" clauses. Unless you are senior executive in multi billions company, the chance of employer wining is low. The employer must provide solid evidence of financial loss and it's nearly impossible for a small company.
    • sleet on 26/11/2018 - 22:02

      I will keep this in mind, thanks!

    • [Deactivated] on 15/12/2018 - 16:20

      Good advice on the resignation letter. I've always followed that. No need to put any more information in writing than what is required full stop. You're otherwise making your own noose.

      And yeah, the employer would have to have a noticeable impact to their business to bother taking action against someone outside of a very senior executive. Eg, If you take 10%+ of their clients with you, particularly if those were clients you obtained while working for them. If there's no significant impact on their business they're not going to win as the clause was obviously unreasonable.

      Even in one case I know where someone left to work for a client, basically cutting the employer out of the business and costing them money they still didn't bother pursing it, though the relationship with that client was terminated immediately.

  • SteatoLegato on 27/11/2018 - 22:07

    don't worry about it
    virtually impossible to enforce
    plus the contract is out of date

  • em on 28/11/2018 - 15:07

    Depends on how much money is at stake. If you're a hedge fund manager, I'd be worried about them going after you. If you're earning 40,000 a year I wouldn't

  • justwaitingforamate on 07/12/2018 - 23:00

    Probably already mentioned a few hundred times but call ATO they will make sure that super is paid and that they pay (by memory so my be different) 10% for missed interest. I found this out but didn't pull the trigger on my ex employer as wanted to leave it amicably but in hindsight wish that I had for other employees sake and for other legal reasons.

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