Employment Contracts

The Supreme Court of NSW has provided a timely reminder of the importance of paying attention to the terms of a contract of Employment for Employee’s who wish to change from one Employer to another or for Employer’s who are contemplating taking on new staff. In the case of HRX Pty Ltd v Scott the Court considered the consequences when Mr Scott resigned from his employment with HRX Pty Ltd and commenced employment with a new employer, Talent 2 Pty Ltd. The terms of the employment contract between Mr Scott and HRX Pty Ltd included provisions which prohibited Mr Scott from taking employment with a competitor business for a particular period of time after he stopped working for HRX Pty Ltd.

As a result of the legal proceedings brought in the Supreme Court of NSW by HRX Pty Ltd, Mr Scott was ordered not to solicit work from clients of HRX Pty Ltd and not to engage in employment in competition with HRX Pty Ltd for a period of 12 months. In addition, because Talent 2 Pty Ltd had initially helped Mr Scott to try and defend the proceedings from HRX Pty Ltd and had paid his legal costs for his defence, Talent 2 Pty Ltd were ordered to pay a significant amount of the costs incurred in bringing the proceedings by HRX Pty Ltd.  This case contains a very clear lesson that Employees and Employers need to take great care when they move from one job to another or when they recruit new staff, especially from their local competitors.

In regards to advice in relation to employment matters contact Mr Ian Field or Mark Game.