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WA Redundancy and Breach of Contract - Options in Relation to Restraint Clause?

Discussion in 'Employment Law Forum' started by littlemisses, 26 January 2016.

  1. littlemisses

    littlemisses Member

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    Hi

    Here is the story behind my redundancy:

    I was in the office on a Sunday completing a job application form for a job interstate when the boss came into the office. She asked what I was doing & I told her that I was applying for a job interstate. The current company is struggling and we were on reduced hours since Sept, and since Jan on a 5 day fortnight, so financially I am struggling.

    On the following Monday, I was informed that as I used the company PC to apply for a job it was a breach of trust. The boss also said that the quality of my work had deteriorated, that I wasn't committed to the company as I was actively seeking work and that they were making my position redundant. I had a performance review in Dec & the quality of my work wasn't an issue. I also had very positive feedback from clients so I know my work isn't an issue. I was informed that I was to leave the office that evening. They paid me notice in lieu.

    My query is that I have a restraint clause in my contract that prevents me from working in the same industry (Consultancy) with any competitor within 50 km of my previous employer for 2 years. There is also a clause in the contract that my employer can take an 'injunctive relief' against the employee (me) for any breach of contract.

    I have an interview with a competitor on Wednesday - what are my options under Employment Law in relation to the restraint clause?

    In relation to payment in lieu - should that be 2 weeks at 38 hrs per week or 2 weeks at 5 day fortnight? I didn't sign any new contract for reducing working hours.

    Thanks
     
  2. Sophea

    Sophea Well-Known Member

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    Hi Littlemisses,

    So are you being made redundant? Or is your employment simply being terminated? If it is a redundancy then you can calculate the pay and notice you would be entitled to here. Usually, a redundancy package would pay out more than just a few weeks notice that is required by your employment contract for termination. A lawyer will be able to give you advice after they review your contract.

    If you are legally made redundant you cannot claim unfair dismissal. From what I understand, your employer can legally make you redundant if:

    • Your job doesn't need to be done by anyone
    • your employer followed any consultation requirements in the award, enterprise agreement etc.

    Your dismissal is not a genuine redundancy if your employer:

    • still needs your job to be done by someone (eg. hires someone else to do the job)
    • has not followed relevant requirements to consult with the employees about the redundancy under an award or registered agreement or
    • could have reasonably, in the circumstances, given you another job within the employer’s business or an associated entity.

    If you have simply been dismissed, for breach of trust and alleged deterioration of work quality, I think you may have grounds to make an unfair dismissal claim. If not and you were made genuinely redundant, then you may have grounds to argue the restraint of trade clause doesn't apply.
     
  3. littlemisses

    littlemisses Member

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    Thanks for the help Sophea. Just to clarify, I worked for a small business <15 employees & was made redundant.

    I had to hand my current work over to another employee to continue on with the work.
     
  4. Sophea

    Sophea Well-Known Member

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    Yes, that's correct. A business with fewer than 15 employees is considered a small business and such may not be required to pay redundancy pay when making you redundant. However, you may still have grounds to dispute the restraint of trade if you were made redundant or were dismissed.
     
  5. littlemisses

    littlemisses Member

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    I have been given different pieces of advice in relation to restraint clauses:

    1- to protect myself, I should have a deed of severance drawn up and sent to my ex-employer for them to sign. That way, I am free to work with whomever I choose. Obtained a quote for this is $1,000 & if the ex-employer doesn't sign it, where does that leave me (apart from being $1,000 less off)?

    2- because I was made redundant the restraint clause has no effect

    3 - if I don't do anything and go work for a competitor within the 50 km radius in the same industry, what can the ex-employer legally do to me? After all, they made me redundant.

    Could somebody comment on this?
     
  6. Sophea

    Sophea Well-Known Member

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    Dear Littlemisses,

    I think all the advice you have received is correct. The conundrum you face is: pay for legal advice and representation to ensure that you are not sued or restrained from taking on a new job or take the risk and get legal advice and representation later if necessary.
     

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