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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
  • especially relevant, the account set up his own business. Consequently, the employer sought to enforce the restraint clause

Employment Law – Decision

The Victorian Court of Appeal:

  • concluded that the accountant-employee’s interpretation of the bonus clauses was correct
  • held that the organisational changes could not justify the refusal to pay hence he should have been paid the bonuses
  • found that in conclusion, the refusal to pay was a breach of the employment contract. Consequently, the right to enforce the restraint clause ended

Employment Law – Tips for Employers

Our Matthews Folbigg Workplace Solutions employment law team recommends employers: [...]  READ MORE →

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Employment Law – Modern Awards Reductions

Employment Law – Background

In June this year, the Fair Work Commission (FWC) announced the reductions of public holiday penalty rates for the hospitality, retail, fast food and pharmacy sectors. The reductions were decided as part of the FWC’s four-yearly review of modern awards.

As of 1 July 2017, public holiday penalty rates were reduced while Sunday rates will reduce over three to four years. Although the unions argued for the delay in reductions, the FWC agreed with employer organisations. As a result, the first transition step is smaller than later transitions. Furthermore, the retail and pharmacy sectors will have longer transition periods due to their reductions being more significant. [...]  READ MORE →

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Employment Law – The Need for Proper Workplace Investigations

Employment Law – Background

Employment claims like bullying and unfair dismissal continually on the rise in employment law. Consequently, employers are increasingly required to take pro-active steps to investigate suspected workplace incidents and disputes before they lead to such claims.

A workplace investigation is a formal investigative process into an alleged workplace incident or dispute and it may be necessary to undertake same even if the complainant objects to it (ie, because they only wish to make an informal complaint). [...]  READ MORE →

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Employment Law – Redundancy Consultation

Employment Law – Background

Currently, there are no specific guidelines on how long employers should or must conduct redundancy consultations under a Modern Award.

Different rules of course may apply to enterprise agreements, under company policies or in some cases under the terms of an employee’s employment agreement.

We understand that employers may want to rush a business restructure in order to continue running the business, however, there are a few tips employers should consider to minimise any possible adverse effects. [...]  READ MORE →

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Employment Law – s 457 Visa Entitlements

Employment Law – Background

The Australian Government announced the abolition of the Temporary Work (Skilled) visa (subclass 457 visa) in April 2017. They will be replaced with the Temporary Skill Shortage (TSS) visa in March 2018. Consequently, employment law questions have arisen regarding the entitlements afforded to such workers in this transition period.

Common questions include:

  • Could the employee successfully claim unfair dismissal?
  • Is an employee on a 457 visa entitled to redundancy pay if there is no further work when the visa expires?

Employment Law – The Fair Work Act 2009 (Cth)

s386(2) provides that an employee is excluded from claiming unfair dismissal if:

  • the employee is employed on a contract;
  • for an unambiguous specified period of time; and
  • whose employment is terminated at the end of that specified period

Employment Law – Case Decision

A decision of the Full Bench of the (then) Australian Industrial Relations Commission held that a s457 visa can be used to specify the fixed time period of an employment contract. This is provided that the parties have a sufficiently proven understanding of the terms of the visa and the contract of employment. This understanding must therefore include the period of employment and most notably, the end date. [...]  READ MORE →

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Employment Law – FWC Slams Poor Agreement Drafting

Employment Law – Background

A poorly drafted enterprise agreement has been criticised by the Fair Work Commission (FWC). The case was brought by the Electrical Trades Union (ETU) and the Communications Union (CEPU) against electrical contractor Kentz Pty Ltd (Kentz) in dispute of a clause requiring the purchase of particular income protection products.

The case was initially heard in February this year when Commissioner Michelle Bissett found “no ambiguity” in the wording of the contractual requirement to purchase income protection insurance. However, an appeal was permitted by the Commission because the decision was “attended with sufficient doubt” to permit a rehearing. The full bench of the FWC reaffirmed the earlier decision. Furthermore, it highlights the importance of clear drafting of enterprise agreements in employment law. [...]  READ MORE →

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Employment Law – Landmark Sham Contracting Case

Employment Law – Background

In March 2015, the Fair Work Ombudsman (FWO) brought a case against Quest South Perth Holdings Pty Ltd (Quest) for breaches of the Fair Work Act 2009 (Cth) (the Act). In a long-running legal saga, the Federal Court found that Quest and Contracting Solutions Pty Ltd had not contravened the Act by moving employees onto independent contractor arrangements. By the end of 2015, the High Court of Australia overturned the Federal Court ruling and therefore found Quest had engaged employees in a ‘triangular’ sham contracting arrangement. [...]  READ MORE →

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Employment Law – Informal Approach Acceptable

Employment Law – Background

Recently, the Fair Work Commission refused an unfair dismissal claim by an employee who was terminated without receiving prior formal warnings.

The case demonstrates the flexibility of the Fair Work Commission in accepting an employer’s informal efforts to address workplace issues.

Employment Law – Facts

In essence:

  • in July 2015, the FMG Personnel Services (FMG) inventory controller and his manager discussed his work requirements for the next 12 months
  • it became evident the employee “lacked the necessary skills, capabilities and knowledge to adequately perform his role and that his manner and attitude to customers and internal personnel was unsatisfactory”
  • the manager believed the employee failed to grasp concepts required of his role or prioritise duties
  • the employee was alleged to have failed to comply with business processes. Furthermore, he was considered to be incapable of maintaining effective work relationships
  • from September 2015, a manager ‘informally’ performance managed the employee for a period of 10 months. In this period, the seating arrangement was changed to sit the employee next to the manager for daily coaching and individual training sessions
  • on one occasion, the manager conducted training for the entire team offsite despite the training being targeted only at the employee
  • in July 2016, FMG placed the employee on a performance improvement plan. Following this, the employee emailed HR denying any supposed performance issues
  • customers consequently eventually refused to communicate with the employee
  • consequently, the employee was dismissed in August 2016
  • the employee made a claim for unfair dismissal because he alleged there were no formal warnings, contemporaneous file notes or formal performance management

Employment Law – Fair Work Commission Decision

The Fair Work Commission:

  • held there was a “complete divergence” between the views of FMG and the employee
  • stated “…FMG sought to clearly communicate to [the inventory controller] what their performance expectations were and that FMG diligently endeavoured to assist [the inventory controller] to achieve these expectations”
  • considered FMG had reasonable grounds to conclude an informal approach was likely to be more successful
  • furthermore, accepted FMG had genuine and reasonable concerns about the employee’s ability to comprehend deficiencies in his performance. In addition, the employee believed training and coaching were “ordinary workplace conversations”
  • stated that such “exchanges were intended to be, and are properly characterised as, informal performance management”

The decision is available for you to read through the following hyperlink:

Mr Robert Etienne v FMG Personnel Services Pty Ltd [2017] FWC 1637 (25 May 2017)

Employment law – Tips for Employers

Our Matthews Folbigg Workplace Solutions employment law team recommends employers: [...]  READ MORE →

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Employment Law – Unenforceable Restraints

Employment Law – Background

An ex-employee’s post-termination restraints have been deemed unenforceable by the Supreme Court of Victoria. This case highlights the impact of employer’s actions on the validity of a contract of employment. Furthermore, it highlights the limits of post-employment restraints in employment law. The failure to remunerate an employee can result in a constructive dismissal. Consequently, post-employment restraints may become ineffective.

Post-employment restraints are inserted in contracts of employment to prevent an employee working elsewhere. In addition, it prevents the ex-employee from engaging with former clients for a period of time. [...]  READ MORE →

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Employment Law – Ex-Director Restrained by IP

Employment Law – Background

Climate Change Technology P/L (‘CCT’) has sought an interlocutory injunction to restrain a former director and inventor of a thermal energy battery.  The employment law decision raises the importance of documenting relationships.

Employment Law – Facts

In essence:

  • first of all, Dr Patrick Glynn was employed by CCT between 2011 and 2016. He was its principal research officer and director. In addition, Dr Glynn was appointed its chief executive towards the end of his tenure at CCT
  • he invented a thermal energy storage device and assigned a patent to it in 2011. Furthermore, he signed an intellectual property agreement
  • CCT submitted that they spent about $5 million over the last six years on researching and developing the device and associated technology
  • when Dr Glynn quit in 2016, he allegedly retained intellectual property and confidential information in relation to the device. Furthermore, he set up another research and development company and an umbrella company
  • in addition, CCT alleged that Dr Glynn and the companies had been negotiating with third parties he had first dealt with when he was employed at CCT
  • consequently, CCT was granted an interim injunction in March
  • as a result, CCT are seeking the return of intellectual property and confidential information to stop its ‘misuse and dissemination’
  • furthermore, CCT are seeking to prevent Dr Glynn and the companies from exploiting business opportunities which arose while he was director and representative

Employment Law – Decision

Justice Nicholson:

  • noted an intellectual property agreement appeared to be the ‘only express written agreement potentially relevant to the parties’ relationship’
  • noted there was ‘no written employment agreement, no deed of confidentiality or restraint of trade regulating the parties’ relationship or [Dr Glynn’s] post-employment obligations with respect to [CCT] is in evidence’
  • accepted direct supporting evidence Dr Glynn worked full-time as a chief scientist. In addition, he devoted thousands of hours to its project and possessed a significant amount of confidential information about its intellectual property
  • was satisfied there was support for potential findings that CCT was the owner of the intellectual property. Furthermore, such support indicates a large number of digital files were transferred following Dr Glynn’s resignation
  • said it was open to the court to discern from email correspondence that Dr Glynn and the companies had been negotiating with third parties
  • was satisfied that damages would not be an adequate remedy
  • concluded CCT is entitled to an interlocutory injunction. The injunction will restrain Dr Glynn and the two companies from using, exploiting, destroying or altering the ‘project intellectual property and confidential information’
  • the injunction also names entities and individuals whom they are restrained from any dealings relating to the device. Furthermore, it requires the recording of any transactions or dealings in relation to the device

Employment Law – Tips for Employers

Our Matthews Folbigg Workplace Solutions employment law team recommends employers:

  • review this employment law decision
  • seek the assistance of an employment lawyer to understand the impacts of this employment law decision
  • engage an employment lawyer to draft a written employment agreement with a suitable restraint of trade clause relevant to the position
  • engage an employment lawyer to draft a suitable deed of confidentiality
  • update employment contracts in response to this employment law decision
  • consult an employment lawyer if you suspect company confidential information or intellectual property has been misused

Employment Law – More Information

Please call the leading employment lawyers in Parramatta, the Matthews Folbigg Workplace Solutions employment law team on 9635-7966 to speak with one of our employment lawyers. [...]  READ MORE →

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Employment Law – Protecting Company Connections

Employment Law – Background

Employers can take pre-employment steps to safeguard intellectual and commercial property such as company information or Linkedin connections. Furthermore, HR needs to establish a compliance framework for employee conduct, expectations and obligations.

In addition, an ex-employee’s Linkedin connections are ‘unlikely’ to be defined as trade secrets belonging to the former employer.

Employment Law – Tips for Employers

Our Matthews Folbigg Workplace Solutions employment law team recommends employers:

  • insert key restraint of trade provisions. These should explicitly refer to the use of social media connections
  • include restrictive terms for the post-employment period. For instance, restricting the use of social media to publish or share content
  • obtain a list of the employee’s current social media connections
  • include terms which provide that connections gained during the course of employment are the property of the employer
  • creating appropriate social media policies and guidelines. These should cover the course of employment and post-employment.
  • train employees to ensure understanding of obligations
  • draft new/changes to employment contracts with the assistance of an employment lawyer
  • draft new/changes to employment law policies with the assistance of an employment lawyer
  • speak to an employment lawyer about what company information can be protected
  • ensure employment contracts and employment law policies comply with relevant employment laws, Fair Work Commission decisions, common law employment law principles and contractual obligations

Employment Law – More Information

Please call the leading employment lawyers in Parramatta, the Matthews Folbigg Workplace Solutions employment law team on 9635-7966 to speak with one of our employment lawyers. [...]  READ MORE →

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Employment – Personal Liability for Directors and Managers

Cause for Vigilance!

A string of recent employment cases involving the Fair Work Ombudsman have clearly illustrated the risk posed by the ‘accessorial liability’ provisions within the Fair Work Act.

In essence:

  • accessorial liability is a legal doctrine used to extend legal responsibility for an unlawful act to those involved in or associated with the act
  • in employment claims, accessorial liability can also render a director and/or manager liable for an employer’s contravention of the Fair Work Act

Accessorial Liability under the Fair Work Act

Under the Fair Work Act a person who is ‘involved’ in a contravention of the Fair Work Act is taken to have contravened that provision, where the person:

  • has aided, abetted, counselled or procured the contravention; or
  • has induced the contravention, whether by threats or promises or otherwise; or
  • has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
  • has conspired with others to effect the contravention.

Founding Employment Decision

The foundation for such claims brought under the Fair Work Act was the decision of Guirguis v Ten Twelve Pty Ltd & Anor where the court held that in order for a person to be liable under the accessorial liability provisions of the Fair Work Act the person must: [...]  READ MORE →