NSW Restraint of Trade on Employment Contract?

[Requestor]

I used to work for Company A as a contractor for Client 1. I have been recruited by Company B as all the work for Client 1 went to Company B (no change in my job profile). For me it's only a change of employer.

Before joining company B, I refused to sign the offer stating that It will not allow me to take up any employment opportunity with Client 1. The employment contract has the restraint of trade clause. HR of the company B gave me an email stating that the restraint of trade clause does not apply to me if I work for more than 12 months through Company B for Client 1.

Now it's been more than 3 years that I have been working through Company B for Client 1, now we have an opening in Client 1 can I apply?

 

[Matthew Karakoulakis]

Hi Requestor

It would be wise to save the email that HR sent you stating that the restraint of trade clause does not apply to you. However, if you did not sign the contract with the restraint of trade clause, did you sign another employment contract with Company B at all?

As I do not have all the facts, I am unsure if there is a restraint of trade clause that applies, but if it does, typically, restraint of trade clauses have to be considered reasonable by the Court in order to be valid. In your state of NSW, the Restraint of Trade Act 1976 (NSW) will apply. In particular s 4(3) allows the court to declare the clause valid or invalid, or order that the clause be read down. In determining if a clause is valid or invalid, or if it should be read down, the Court will factors such as time and area restraints.

If you require any further assistance on this matter, please do not hesitate to contact me via the link below to arrange for an appointment to discuss your options.

Matthew Karakoulakis, Melbourne Lawyer: Book Online

 

[Serge Gorval]

Hi Requestor

I'm unsure if you're interchanging "contractor" and "employee" to mean the same thing because they are remarkably different.

You said you were engaged a contractor for Company A. We're you then offered employment and became a full-time/part-time employee of company B or keep to the contractor arrangement ? E.g. issuing invoices using your equipment etc --> this is a critical issue.