QLD Employment Law - Contact Terms Valid after Resignation?

[Wombat]

Hi All,

Just wondering, I work for a CompanyA that puts me onsite for another, CompanyB, essentially contacting me out fulltime. In my contract, it states that I can not work for the CompanyB after termination or resignation for a term off 12months. And if so, I need to pay a % damage fee.

Does this seem correct under employment law or contract law? Just wondering if the term is something valid after no longer working for CompanyA.

Reason I am asking is I have been approached by CompanyB to work directly for them.

Thanks

 

[Ivy]

Hi Wombat,

This is a restraint of trade clause. Have a read of this blog post about the law on restraint of trade clauses in employment contracts: Employment Contract Restraints of Trade - So What? - Legal Blog - LawAnswers.com.au

I am guessing that Company A is an employment recruitment firm? Restraint of trade clauses help these recruitment firms by limiting the contractee and the contractor business from forming an employment relationship that cuts the recruitment firm out of receiving its cut.

I am not sure whether a 12 month restraint would be considered reasonable (as per the legal standard), however given that it applies to only one company and presumedly only in one city, it may be. If you want to challenge the validity of this clause so you can work for the company, you will need to get in touch with an employment lawyer.