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NSW Trapped by Restraint of Trade Clause in Employment Contract?

Discussion in 'Employment Law Forum' started by WarrenH1244, 8 November 2015.

  1. WarrenH1244

    WarrenH1244 Active Member

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    I hope someone can help give me some guidance on my options under Employment Law, as I don't feel I have any that won't leave me in severe financial hardship. I have been doing a bit of reading into Restraints Clauses (including the blog here which is how I found this Q&A blog), but the information seems very open ended and depends on the burden of proof (and exorbitant cost) to define what is 'reasonable' - and that has to happen in Court which is financially out of reach for me. I know I need to seek formal advice soon, but I also need some help in being sure what to ask. I hope someone can help me with the latter.

    Due to extenuating personal circumstances at the time, I signed an employment contract that I have come to deeply regret not seeking legal advice beforehand. I entered naively in good faith and thought I'd brokered a great package that would benefit my family's future. However, while initially I thought it was a teething period and keen to 'prove I was worth it', I have been consistently working 6-7 days/>55hrs a week for over a year, including virtually all public holidays (e.g. all Easter), and never taking sick days even tho I'm living on energy drinks and sugar because I am so exhausted and not sleeping. I have developed a serious anxiety disorder due to the stress, and seen a Dr about it.

    I work like this to maintain customer satisfaction, keep my division running (i.e. ensure staff have work to do), and especially to meet tender deadlines and most of all my division's financial targets.

    While I am not specifically told to work these hours (though my "ordinary hours" are stated to be 40-55hrs/week in the contract), I am told I am responsible for P&L as the division manager and head specialist; and hence I cop a lot of flack when the P&L falls below target (due to the fact work is not finished in time and invoiced, or I've had to spend so much unbillable time on tenders which I had been pushed to go for even though I know we aren't competitive).

    I used to be self-employed, so I'm a hard worker, but not like this. I have staff under me, but the company I realise has a habit of under-hiring in terms of skillsets and experience, to keep overheads down no doubt.

    So to keep the quality control and meet client expectations - I have to rework most of their outputs (at the last minute as I'm so flat out with other things), blowing out my days, my delivery timelines, budgets, etc - meaning consistent 10-11hr days, and working weekends. I don't have time to adequately mentor, or wait until they are up to speed.

    I have reported this to my superiors and documented it in formal presentations, but they have been slow to act, don't seem to 'get it' or not remedied the situation effectively. It took some time but they have tried to recruit more suitable people this year, but the applicants have either been well below par, or reject the offer (package too low or legal advice on the contract). I've lost hope.

    I feel they either don't have my best interest in mind, and it's only getting worse, not better. Everyone I confide in tells me I should get out. The turnover rate in this company is unprecedented from the manager level down (>75% in 1 year). I learnt too late that they have a reputation for this.

    I feel I can't leave (and hence another reason I work so hard - fear of losing this job) due to the Restraints Clause in my employment deed. It says for 3 years that I can't go back to being self-employed (not allowed to go back to my clients who I brought to this company with me - though I have no interest in their clients - too big for me to manage their work) or work for someone else (in virtually any form) who does the same kinds of services and be 'reasonably considered' to be in competition with the company - and I'm very specialised which means I don't have many options. I would have to give up what I do, or not work.

    I forgot to mention: the clause covers Australia, or failing that, its cascades from Qld and NSW, down 7 steps to 100km of any premises in NSW or Qld. The last level is within proximity to my home. It is written to make the Court fall down to an option which will push me out of the industry no matter what, unless I take the risk of going to court to fight it to prove its 'unreasonable' - but that will cost me my mortgage.

    But I have a family to support, and my health to consider. My best option is to go back to what I used to do, but the Restraints Clause specifically forbids this (even though my clients would not use this company if I left and the local office I believe would not be viable). I fear telling them I want to go due to the way they've treated other employees. I hope that the best outcome I can get an agreement with them to let me go and be friends, but I have my doubts. I feel very powerless.

    I have looked at ways I can get the contract declared void, but it's only nit-picking fine details. It does say I'm supposed to reimbursed for all costs for instance, but for the first 6 months I was not compensated for travel costs (eg accommodation and meals) for interstate travel - until I asked more than once. The defence could be that I didn't fill out a PO I guess.

    The 'ordinary hours' of 40-55hrs could possibly be argued to be breached given my timesheets show majority of weeks >55 (many 60-70). But I don't think that's going to cut it. It also says that I agree that my salary package includes "reasonable overtime" which covers working overtime and public holidays, but there's no definition of whats 'reasonable'. I have never been offered 'time off in lieu', nor have I asked (not heard of anyone getting it).

    I also wasn't specifically paid the specified package for 2014-2015 FY - part of a 'bonus' payment for that year fell into this FY. I dont know it thats a deal breaker.

    I also fall below the 'high income' threshold of the MNES and I think they've breached the Fair Work Commision, which I hope could be my 'big stick'. For one thing, I've never been given the Fair Work Information Sheet (no-one else to my knowledge either); and my hours also exceed it, and its arguable that I'm 'better off' under this contract.

    Finally, the contract also says my job is a non-Award position, but I'm pretty sure its covered by the Professional Employees Award 2010, and I'd be a level 4 employee. Although I'm a manager as well, I'm still mostly doing what my qualifications are in 50-75% of my time.

    Under the Award, I'm supposed to be working a 38hr week with overtime compensated as financial or time off in lieu unless my package adequately compensates (if I was working say 50hrs per week, it would). It also doesn't spell out that I'm entitled to 2 days compassionate leave into 10 days personal/carer's leave. I don't know if this is contract breaker. I also hear the FWC is not a toothless tiger.

    So again, my options are limited to say the least.
     
  2. Rod

    Rod Well-Known Member

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    Bottom line with court is that unless you were being a premium for your skill set, the court will not stop anyone earning a living.

    Options:
    1. Do nothing
    2. Work to contract.
    3. Negotiate a pay rise for the extra work you are doing
    4. Seek help for stress, may need leave to recover.
    5. Quit and call their bluff.
    6. Some combination of the above.

    If you seriously have the option of resuming self-employment (forgetting the restraint of trade clause for the moment) and can support your family, then this seems to put you in a position to take a harder line at work.

    Don't let them push you around, your health is not worth losing over a few dollars. Be firmer and push back on unreasonable workloads. Just because they demand extra it doesn't mean you have to do it. If they continue to push, tell them firmly 'no' and say that your health may suffer. Saying 'no' can be liberating!
     
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  3. JS79

    JS79 Well-Known Member

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    If you can prove that the restraint clause is too broad you would have a chance to make the restraint clause void.

    An employment lawyer will be able to tell you if you would be able to prove this. See Get Connected with the Right Lawyer for You to be connected to a local employment lawyer.
     
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  4. WarrenH1244

    WarrenH1244 Active Member

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    Thank you both for your responses. Its come to crunch time. I've now been all but accused of being a whinger and unprofessional for talking about the excessive hours I'm working at management meetings as its 'negatively affecting my peers'; and that I'm 'claiming' to work these hours ie hint that I'm making it up.
     
  5. Cjg123

    Cjg123 Member

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    My old employer tried including similar restrictive clauses in a new employment contract. I refused to sign it because like yours it prevented me from undertaking the same role whilst in Australia or if that was too restrictive then my state (ACT) and if that was too restrictive then my city (Canberra!) for a cascading time period.

    I got some free legal advice before contacting the head of HR for the company in Australia and advised that it prevented me from earning a living and would be deemed as too restrictive by a court. They advised that I didn't have to sign it but they were trying to align the contracts of all employees (which I later found out to be not the case since some people had these new restrictions and others didn't).
     
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  6. WarrenH1244

    WarrenH1244 Active Member

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    Here's an update for anyone in a similar situation.

    First, Workcover is all but useless unless you've lost an arm. You just get a very dry, reserved, and bureaucratic response to your questions, and unless you can prove 'bullying' has to led to your anxiety and depression, good luck.

    Secondly. the Fair Work Ombudsman is a toothless tiger - you'll just get the same information you read off the information sheets, and to 'negotiate with your employer'.

    So overall, don't believe that as an employee, you're well protected and have the law on your side. You're on your own.

    Thirdly, it looks like they're going to go for me leaving (as I've decided to do, as it's only getting worse and now they're attacking me for speaking out) and not complying with the clause. I've since heard from networking in the industry that I won't be the first. The CEO has a reputation for being a bully and litigating. Someone else has been pushed out of the industry before.

    So it looks like I leave the industry for 3 years, or get ready to incur a major debt fighting for my own rights in court. I may win, but I still lose due to the legal costs. And if I lose, I'm really screwed.

    Message to any readers: be very, very careful what contract you sign. SPEND THE MONEY to get a solicitor to check it first.
     
  7. Rod

    Rod Well-Known Member

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    Thanks for the update.

    Have they sent you any demands since you left?
     
  8. JS79

    JS79 Well-Known Member

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    I would still be talking to an employment lawyer regarding your situation. You might have the basis for a constructive dismissal claim. In regards to employment law they only have a very small limitation period of 21 days - it is important to get onto it straight away.

    See https://lawanswers.wufoo.com/forms/get-connected-with-the-right-lawyer-for-you to be connected to a local employment lawyer.
     
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  9. Rod

    Rod Well-Known Member

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    JS79 means that YOU, or your employment lawyer, only have 21 days to file a case for unfair dismissal.
     
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  10. WarrenH1244

    WarrenH1244 Active Member

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    I'm still stuck in this situation. I received an email from the CEO now saying that my performance since signing the employment deed had been disappointing (note - due to my commitment, we're running in profit) and that 'saying you have, no time will no longer be tolerated' in terms of working on business development. I'm killing myself delivering due to lack of resources - I have no time for business development, let alone the capacity to handle any more work!

    I'm stuck in a very bad place.
     

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