It’s that time of the year where resolutions have been made (for some, already broken) and for us to take stock of the year that has passed, as well as contemplating the year ahead. One of the areas of obvious consideration is that of employment, and the possibility of finding a new job that’ll hopefully be stimulating and of course, pay more. However, it’s also worth bearing in mind that if you are indeed looking for greener work pastures, you still have an obligation to your current employer in terms of giving notice, which is more than just showing up to work one day and informing your employer that you won’t be turning up to work any more. Adherence to the valid notice requirements is essential and by having an understanding of what is valid notice – as well as whether or not your soon to be former employer – is able to restrain you from practicing your trade elsewhere, are just some of the issues that may arise if you are intending on leaving your current job.
How much notice must be given?
The requirement for valid notice will usually be stipulated in the contract of employment, as well as the relevant modern award, or agreement which is applicable to your industry.
Some readers may be wondering what would happen if they leave before the period of notice? Well, there may be a technical breach of the contract of employment and in such a circumstance for some employees, if the award, agreement, or contract allows for such an action, an employer can withhold money owed to you in the event that the required notice was not given.
However, if there is no modern award, agreement or contractual obligation that outlines how much notice is to be given, the only real requirement is that the employer must receive notice of your intention to resign.
Must notice be in writing?
Unless there is a specification that notice is to be given in writing, anyone who wishes to resign can do so orally. Additionally, any requirement which states that you must give notice by writing can be bypassed upon agreement between yourself, and your employer, if your oral resignation is accepted. The overarching element when resigning is that the intention to quit should be unambiguous and unequivocal.
What effects (if any) does notice have on the employment contract?
Any valid notice will not have any drastic effects and the employment relationship will come to a conclusion on the date in which notice will expire. However, you should be mindful that despite the fact that you may have given valid notice of your intention to resign, duties such as fidelity and good faith to the employer are still be applicable.
Can an employer restrain you from plying your trade elsewhere?
Employers can invest a large amount of time and expenditure in training you to meet the requirements of the job, and sometimes may include clauses within the contract of employment, preventing you from undertaking certain actions – such as working for a competitor and taking your clients with you to your new job upon resignation. On the other hand, after working in a place for a period of time you may want to – and are entitled to, look elsewhere to further utilise your skills and to get more money – which in some instances, can lead to a restraint of trade issue between yourself and your employer.
If the issue of restraint of trade does arise, the matter of Nordenfelt v Maxim Nordenfelt Guns and Ammunitions Co Ltd from the English Court of Appeal may provide some guidance regarding restraint of trade, with the court ruling that employers do not have the right to unreasonably prevent competition and that a restraint of trade clause will only be considered valid in the application of the following test:
- the clause legitimately protects the interests of the employer;
- the clause is reasonable insofar as to the time and geographical limits which are placed on the employee, as well as the functions in which the employee is restrained from undertaking eg working for a direct competitor.
However, when the issue of restraint of trade does arise, the courts will attempt to strike a balance between the rights of both you and your employer when making a decision.
What is ‘reasonable’ restraint of trade?
One of the difficulties when a point of law revolves around the question of reasonableness; is what is ‘reasonable’? The answer to the question of reasonableness may need to be tested before a court and in some instances, the court may sever the part of the clause which is invalid, while not invalidating the whole clause.
Perhaps the judgment of White J in Portal Software v Bodsworth can provide some illumination regarding reasonableness.
The matter involved a plaintiff who sought to enforce a clause within the contract of employment restraining a former employee from being employed elsewhere six months after resigning. The insertion of such a clause was based on the fact that the defendant was a high level employee who was privy to sensitive information, and furthermore, the defendant was also part of an industry which dealt in a highly specialised product, with a small client base.
Ultimately, the injunction was granted to the plaintiff based on the facts surrounding the case, however, it is the comments on reasonableness of White J which is of particular interest with his Honour noting, that a restraint of trade clause is valid “…only if it goes no further than is reasonably necessary to protect the interests of the plaintiff, and is reasonable in the interests of the public… An employer is not entitled to be protected from mere competition from an employee. However, he is entitled to protection against disclosure or use of his trade secrets, or the use of a connection built up by the employee with the employer's customers.”
This piece has for the most part has dealt with the common law position in regards to employment law. If you have any questions regarding any work related issue, please seek the assistance of a lawyer who will be able to assist you with your matter.
