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Employment Law – Ex-Employee Restraint Clause Unenforceable    

Employment Law – Background

The Victorian Court of Appeal reaffirmed a decision that an employer was unable to enforce a restraint clause against an employee. The accounting firm’s breach of an employment contract consequently ended its right to enforce a restraint clause against the accountant. The case highlights the importance of carefully assessing any differing views between the employee and employer in employment law.

Employment Law – Facts

In essence:

  • the employee-accountant signed an employment contract in 2012
  • the contract contained a restraint clause that operated for 12 months. Notably, the terms were found to be reasonable by judges in earlier cases
  • the accounting firm expanded its business over 2015-16
  • the accounting firm denied the accountant certain bonuses he believed he was entitled to
  • as a result, the accountant requested payment to which the employer refused
  • the accountant took a week’s leave. A few days after he returned, he informed the employer he considered the refusal to pay the bonuses as a repudiation of the employment contract
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Employment Law – New Employer Liable in Confidential Information Case

Employment Law – Background

The following is a recent example of where a new employer was stung for the wrongs a new employee committed against their former employer …

Employment Law – The Case

In essence:

  • Lifeplan and Foresters were competitors in the business of funds management and the provision of investment products, principally for the purpose of funeral plans
  • whilst employed by Lifeplan, a manager emailed confidential Lifeplan documents to his personal email address and used these documents to prepare a business plan which he then presented to Foresters with the assistance of another manager
  • at the same time, both managers solicited the business of several funeral companies and service providers in order to secure business for Foresters and themselves
  • the managers used Lifeplan contracts, brochures and other marketing materials to prepare similar documents for themselves, and utilised Lifeplan’s printing company to generate this material
  • Lifeplan commenced proceedings against the managers and Foresters (who by this time employed the managers)
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Misuse of Confidential Information – Evidence relied upon after the fact

In the recent decision of Finemore v CMIB Insurance Services Pty Limited [2016] FWC 8517, an employer successfully relied upon evidence of misuse of its confidential information discovered following the termination of employment, in order to defend itself from an unfair dismissal claim.

The Facts

The Applicant had been employed by the Respondent (a small business employer) for approximately six years, most recently in the role of Account Executive. The Applicant was employed under a written employment contract containing several post-employment obligations including an obligation to preserve the Respondent’s confidential information

On 28 April 2016, the Applicant notified the Respondent that she was resigning her employment, and provided one month’s notice of resignation.  The Respondent accepted the Applicant’s resignation and confirmed the Applicant’s final day of employment would be 31 May 2016.

However, on 3 May 2016, the Respondent discovered that the Applicant had emailed to her personal email address a detailed Excel spreadsheet (along with other confidential files) shortly after submitting her resignation. The Respondent’s directors directed the Applicant to attend a meeting, at which time the allegations were put to her. The Respondent considered the Applicant’s responses to the allegations to be unsatisfactory, and summarily terminated her employment on the ground of serious misconduct.
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