Non Compete Clause
What is a Non Compete Clause?
A non compete clause is a clause in a contract. These clauses aim to prevent a person from carrying out competing activities against another business. A contract may refer to
Termination of an employment contract is not merely a conclusion of work duties. Instead, it marks the beginning of a series of critical post-termination steps. These steps ensure a smooth and legally compliant transition for both employers and employees.
In this article our employment lawyers discuss the important steps employers should take after terminating an employment contract in Australia.
Employers must pay employees their final pay within 7 days of their employment ending. This includes unpaid wages, earned vacation time, and other benefits like long-term leave or severance pay.
Learn more about payments in lieu of notice.
Employers must promptly retrieve any company-owned items from former employees after terminating their work agreement. These items may include electronic devices, access cards/keys, and uniforms/equipment.
Failure to retrieve company property after termination can have serious consequences for both employers and employees. For employers, it can result in the loss of valuable assets, compromised security, and potential legal issues. It can also cause misuse or unauthorized access to company information, which can harm the business.
On the other hand, for employees, failure to return company property can damage their professional reputation, hinder future job prospects, and even result in legal action. Therefore, it is essential for both parties to prioritize the prompt retrieval of company-owned items to ensure a smooth transition and protect the interests of all involved.
Although Australian law does not require references to be issued, offering support and guidance during this transition can encourage goodwill.
Consider:
Reference letters. If the termination of employment is amicable, a favourable reference can enhance the employee’s future employment prospects.
Support services. Offer information on outplacement services or career counselling to assist the employee in their job search.
Secure the company’s access after termination to protect sensitive information.
The employer must terminate access to:
Company systems. Swiftly deactivate the terminated employee’s access to all company systems, including email, shared drives and software platforms. This is not only to protect confidential information but is also consistent with cybersecurity best practices.
Physical premises: Ensure physical security by blocking access to the workplace. This involves disabling access cards, updating security codes, and informing relevant employees about the terminated employee’s status.
Maintain an reiterate post-termination confidentiality obligations to the employee. This includes:
Remind the employee of their ongoing obligation to keep company trade secrets and proprietary information confidential. Clearly communicate the consequences of breaching confidentiality agreements. Put emphasis on the legal consequences.
Reaffirm any existing non-disclosure agreements in place to protect sensitive company information. Consider a debriefing session to reinforce the importance of maintaining confidentiality even after leaving.
Thorough documentation is crucial for legal compliance and potential future disputes. Ensure:
Draft a comprehensive termination letter that outlines the reasons for termination, the effective date, and any post-termination obligations. Clearly communicate the employee’s rights and obligations to avoid any possible misunderstandings.
If possible, conduct an exit interview to gather feedback and insights that may be valuable for improving the organisation. It also gives the departing employee to share feedback and potentially identify areas for improvement.
Retain records related to the termination of employment. These records may include correspondence, performance evaluations and any signed agreements. Sound record retention is invaluable in the event of legal challenges.
Learn more about other employment termination scenarios & procedures.
The binding effect of an employment contract generally ceases under the following circumstances:
There are some clauses that are likely to continue to apply after the contract has ended. It is important to speak with a qualified employment lawyer about any post-termination obligations.
An Employment Agreement in Australia is a contract between an employer and an employee. It sets out the terms of employment, including work hours, pay, and leave. It must meet the legal requirements in the National Employment Standards and the relevant industry award or agreement. The agreement must follow Australian Government rules.
It can be written or spoken. It can have clauses to safeguard businesses. These clauses can include confidentiality and intellectual property terms.
If you believe you have been unfairly dismissed in Australia, it is recommended to first speak with your employer about your concerns and any potential obligations they may have overlooked.
If this initial conversation does not resolve the issue, you can then contact the Fair Work Commission promptly. It is important to note that you must apply to the Commission within 21 days of the dismissal taking effect. If you are uncertain about any aspect of the process or your rights, seeking legal advice is advisable.
The best way to prevent dispute at the post-termination stage is to ensure you have robust employment contracts in place. This means having contracts or templates that outline post-termination obligations.
This ensures both employer and employee know their rights and obligations at the end of the employment relationship.
Learn more about important clauses to include in an employment contract to mitigate these disputes.
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A non compete clause is a clause in a contract. These clauses aim to prevent a person from carrying out competing activities against another business. A contract may refer to
Non-compete clauses should be enforced when the business (usually an employer or new business purchaser): has advice from an employment law firm that the restraint is likely to be enforceable
There is a 21 day time limit that applies to applying for an unfair dismissal remedy. An employee will need to prove that there was an exceptional circumstance if they