NSW Employment Law - Restraints Clause Enforced in QLD Valid in NSW?

[WarrenH1244]

Hi all,

I work for a Qld based employer who has a restraint clause on me which says if I leave, I can't work in my profession for someone else or myself for 3years (cascading down to lesser periods if a 'reasonable court' deems so); and the restraints area is Australia, then Qld and NSW, then NSW, etc.

I just realised it says in the Deed that it's under Qld Employment Law. Can they enforce this in NSW where I work? Or is it legally invalid (thinking of the Restraints of Trade Act 1976 in NSW and legal precedent of Provida Pty Ltd vs Sharpe 2012) as it has no jurisdiction in NSW?

My understanding is that the Company has to have a 'strong connection with NSW'. The head office is in Qld and they're NSW office is my old office - I was self-employed. All the clients here are also mine.

 

[Serge Gorval]

I'm slightly confused. You say that you were self-employed implying that you were engaged as a contractor, however, you have a restraint clause in a deed (following some sort of settlement agreement).

Also, note that NSW restraints are quite differently interpreted. If part of a cascading restraint is unreasonable, the others can still have an operation. In QLD that is not the case.

 

[WarrenH1244]

No worries. I'm an employee with this company. I used to be self-employed and had employees.

Yes, as per the legal precedent I quoted, the cascades can be read down.

The key question I'm asking is: Is a deed of employment made under Qld law enforceable in NSW, i.e. can they stop me working in NSW if they are not based in NSW and have no strong connection; and ideally, the Qld legislation has no bearing on me in NSW?

This is where I live. If it remains valid, then I'm pushed out of my industry in NSW and Qld, unless I go to the devastating expense of a legal challenge and hopefully win under the Restraints of Trade Act.

 

[Serge Gorval]

Hi Warren,

Can you please provide some more info:

1. Which specific agreement gives rise to the restraint? You refer to a "deed of employment". I suspect that your employment agreement was not created by way of deed and that this is an additional document that you entered into after cessation

2. Generally speaking, no court will restrain you from working in 2 states.

3. If this deed expressly confers jurisdiction on QLD, then QLD law will apply. Seems odd as NSW generally has greater scope for enforcement. If the document giving rise to the restraint is unclear on which jurisdiction applies, then consider the employer's connection to NSW. If the agreement expressly mentions QLD, they will struggle to apply NSW legislation.

4. Generally speaking, restrictive covenants are against public policy and the burden is on the employer to establish that the restraint is reasonable and justified.This is expensive and many will simply write a cease and desist in the hope you actually do.

It sounds like you've got good grounds to challenge ( or simply not comply). I would need to know more, though. .

 

[WarrenH1244]

Hi, Serge, it's just called a "Deed of Employment". It's all I've signed to begin the job. My googling suggests it's called a deed, not a contract to make the various clauses more enduring (ie if I get out of one, another survives like the cascades in the restraint) than under a 'contract'. It has all the usual information about working hours, confidentiality, etc.

It says under Governing law:

"This Deed is governed by the law applicable in Queensland and the parties irrevocably and unconditionally submit to the non-exclusive jurisdiction of the courts of Queensland"

So I'm counting on it not being enforceable in NSW, or I'm facing severe financial hardship ie lose my house.

It also states this which I'm now wondering is incorrect:

"If you are covered by an Award but receive a rate of pay that is higher than the applicable Award rate, you agree that payment of your Remuneration and other employment related benefits results in you being better off overall as compared to any applicable Award, enterprise agreement or other industrial instrument;"

I'm technically under an Award, but the Deed has me listed under a non-award position. I'm working >60hrs, week in, week out. I'm certainly not better off. I wish I knew if that was a way to invalidate the deed.

I feel trapped.

 

[WarrenH1244]

I've had legal advice. Short answer is I would have to fight in court (cost prohibitive), but probably end up with some restraint, and if I started up my own business. Its likely I'd be sued for loss of profit. Hence I lose my house either way.