VIC Clarification of Clawback Clause on Employment Contract?

[JON BENTON]

Hi,

I have the following clause in my employment contract:

"If you resign from your employment within 12 months of your commencement date, you will be required to repay all relocation costs paid or reimbursed by the Company under this clause."

I am considering leaving my job and want to be sure about when I can hand my notice period in (1 month notice) to ensure I won't have to pay anything back.

E.g. If I started on 25th April last year, will I be covered if I hand my notice in on 25th March and work up until 24th April, or based on the clause do I have to wait until the 25th April before I can hand my notice in?

Thanks,

 

[Lance]

Hi Jon,

I think it's pretty clear - if you resign within 12 months from commencement date you will be required to repay. The act of resigning is the announcement of your decision, not the day you leave.

The other thing is I wouldn't resign on the 25th of April, depending on how difficult they want to be they might say you haven't completed the 12 months until the end of the 25th April 2017. I would resign on the 26th April and either work or get payed out for your 1 months notice.

It can get a bit messy and could depend on the companies interpretation of 12 months so I wouldn't risk it.

 

[Serge Gorval]

Hi Jon

Claw back clauses such as these are murky in their nature. under the FWA, an Employer cannot withhold wages or entitlements unless the reason is principally for the employee's benefit ( naturally this isn't the case in this instance).

The only claim your employer would be contractual and frankly the term is capricious in its very nature. If you want to avoid a hairy situation just ensure you have a year's service before resigning or handing in your notice would be by recommendation.

 

[Tim W]

I agree with @Serge Gorval .
If you possibly can, wait until 12 months is up before giving notice.

I agree with the term "capricious". I would also add "oppressive",
Oppressive in the sense that the purpose of the clause can only be to to bind you to the position
in an extra-contractual way.