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Employment Agreements

The Importance of Comprehensive Employment Agreements
Navigating Australia’s complex employment system can pose significant challenges for employers including when it comes to employment agreements.

Protect and Defend
The importance of comprehensive employment agreements cannot be overstated as they can:

  • afford an employer greater control and power over matters such as remuneration, duties, termination, confidential information, intellectual property and restrictive covenants
  • promote compliance and consistency with the Fair Work Act and relevant industrial laws and instruments
  • assist employees to minimise (and sometimes eliminate) a wide variety of claims including underpayment claims and breach of contract / constructive dismissal claims
  • assist employers to pursue claims for any loss suffered due to an employee breach of a confidentiality, intellectual property and/or restrictive covenant obligation

Depending upon the situation at hand, the costs of not having comprehensive employment agreements in place can be catastrophically high.

Essential Terms
Terms that should be contained in a comprehensive employment agreement include:

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Religious Law Trumps Dismissal

The Supreme Court has confirmed the power of religious laws within employment contracts, in ruling that administrators of a Sydney synagogue wrongfully dismissed a high earning rabbi when they made him redundant. The court confirmed that his employment contract conferred lifetime tenure under Orthodox Jewish Law.

Employment Law – Facts

In essence:

  • Administrators were called in to assist the Rose Bay synagogue over concerns about finances and declining congregation.
  • In April 2017 the administrators sent the rabbi a “termination” letter after concluding they could no longer afford the rabbi’s remuneration package. The rabbi had earnt over $2million over the last three years.
  • However, the rabbi claimed that his employment contract was bound by the Orthodox Jewish law principles of Halacha, which made a guarantee of lifetime tenure (Hazakah), a contractual term by incorporation or implication.
  • The administrator argued that the principles of Halacha, including Hazakah, were not incorporated into the employment contract and they were entitled to end the rabbi’s contract.
  • Continue reading…

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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
  • Continue reading…

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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.

In June 2017, the Federal Court fined Quest a total of almost $60,000 in penalties for contraventions of the Act. This outcome underlines the importance of employment protections in employment law.

Employment Law – Facts

In essence:

  • Quest and Contracting Solutions Pty Ltd (‘Contracting Solutions’) moved two housekeepers and a receptionist onto independent contractor arrangements
  • the receptionist faced ‘significant’ financial issues because she no longer received any shifts
  • Continue reading…

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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
  • Continue reading…

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Employment Law – Recommendations for Employment Entitlements

Employment Law – Background

This article provides a consideration of the pros and cons of including employment entitlements in the following forms:

  • HR policy
  • Enterprise agreement
  • terms in a separate employment contract

Employment Law – Enterprise Agreements

Employers should actively encourage diversity and inclusion by using ‘inclusive’ language in the Enterprise Agreement. It should include:

  • Paid parental leave for both primary and secondary carers (this language includes same-sex couples)
  • A flexibility term
  • A consulation term
  • A disputes, grievance handling provision
  • Rates of pay
  • Provisions that enhance productivity improvement and flexibility.

Employment Law – HR policy versus Enterprise Agreement

Pros of using a HR policy include:

  • the benefit of non-binding application compared to a binding provision for the life of the Enterprise Agreement
  • less legal exposure in policy statements as breaches of enterprise agreements can incur fines or legal action
  • HR policies can be amended from time to time
  • a policy statement adds details and implementation procedures to the core entitlements contained in the Enterprise Agreement
  • Continue reading…

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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.
Continue reading…