Look beyond employment restraints in contracts for solutions!
The employment landscape is changing – from permanent full time roles to casual employment, part time employment, working remotely, flexible arrangements and so on. This is supported by research and publications on the megatrends and suggested actions for businesses to manage some of the issues raised in this year’s Intergenerational Report 2015 which was recently released. As Lincoln Crawley, MD of ManpowerGroup Australia and New Zealand recently said, ‘….The nine to five workday is history’.
What about the impact of restraint clauses during employment (in employment contracts) with our changing employment landscape of flexibility in the workplace? Many employees are choosing these employment arrangements for their own work / life balance for various reasons and some are having to do this due to the lack of suitable full time employment– but what happens when there is more than 1 employer? Have you considered this?
A restraint during employment is an attempt to regulate employees conduct whilst still engaged in the employment relationship. Restraint of trade clauses will be enforceable to the extent that the restraint is reasonably necessary to protect the legitimate business interests of the employer. Whether a clause is reasonably necessary will turn on the particular clause and facts of the case.
It’s easy and reasonable when there is one employer and a full time employee but when there is more than one employment relationship for the employee with part time and casual employment then things become much harder and I don’t think this is being thought out. As a business owner and a professional that works with businesses to ensure that their business interests are protected as much as possible I appreciate and respect these restraint clauses. However, when employment offered isn’t full time and these restraints restricts other businesses and the individual in continuing and / or gaining other employment to top up hours then I have to say regardless of what the law determines I think this is extremely unfair, unrealistic and I will be interested to see how this plays out when someone is in a position to actually defend and test it!
A situation I recently became aware of involved an employee that worked with a number of businesses in various flexible capacities. This situation changed due to an acquisition. The new employer offered similar part-time employment with the inclusion of a restraint during employment – not restricting work with other employers BUT restricting the employee from being identified with any other employer. This meant no identification on LinkedIn and no marketing in any form that would show this person as part of any other team.
My question to you is – would (or could) you as an employer accept an employee with such a restraint? Would you employ someone in a professional services firm where you are forced to hide your employee on LinkedIn and other forms of marketing? I haven’t spoken to any Business Owner that thinks this is fair and reasonable – and therefore I believe, this situation is actually unreasonably restricting employment with others to top up employment beyond part time hours.! A clever strategy for them perhaps, but very unfair for the employee and the other employers involved..
The law requires the restraint to be reasonable in the circumstances. It is questionable whether such as clause would be considered reasonable in the case of part time employment. The law also talks about protecting legitimate business interests – well I would challenge you to determine what the business interests are and find a way to manage them. Relationships, social media connections, returns from marketing can be managed! I understand the business actions in this case, regardless of my personal opinion but by giving consideration to the concerns and risks for all parties would allow them to determine how to best manage them in the interests of all parties.
Businesses need to take their business interests seriously and protect them but open your eyes! There is so much more to be gained. Imagine the skills and the experience that employee will gain from working with different employers – everyone gains from that. When services differ, although to a degree in competition, then referrals for each other can also be gained as there is an individual looking out for all businesses interests. It would also be important to monitor, and the individual plays a big role in this, where work comes from and as a result of what marketing efforts. This is simple stuff to manage really though.
For businesses that don’t open their eyes and reap other benefits whilst managing their business interests then in my opinion they will end up with an unengaged employee or no employee at all!
At HR Business Direction we are able to assist with employment contracts and restraints but also managing employees in the workplace and finding ways to make things work! Contact us here.
Leisa Messer BBus(HRM); GradDipIR; CAHRI; IRSQ
Managing Director | HR Strategist
leisa.messer@hrbd.com.au
07 3890 2066
www.hrbd.com.au
