When there is a dispute between an employer and an employee, often the first point of reference is the employment agreement. A poorly drafted (or non-existent) written employment agreement could result in the employer being exposed to having employees poaching existing clients or competing with the employer.
Some of the key terms an employer should consider including in its employment agreement are:
- Restraints: After the termination of an employee’s employment, it may be necessary to prevent the employee from competing with the employer’s business, or poaching existing clients or employees of the business. A restraint clause will prohibit an employee from doing so for a fixed period of time. Care should be taken to ensure that a restraint is enforceable, as an excessively broad restraint may be held by courts to be unenforceable.
- Confidentiality: In the course of their employment, an employee will gain knowledge of confidential information and form working relationships with customers or clients of the business. It is critical to ensure that there exists a provision which prevents an employee from using confidential information such as client lists or trade secrets to poach clients or use trade secrets for their own benefit after terminating their employment.
- Intellectual property: An employee may be required to create intellectual property during the course of their employment. It is important to have sufficient provisions to ensure that ownership of such intellectual property is assigned to the business, and prevent the employee from asserting ownership over any intellectual property created during the course of their employment.
- Policies: The employer may need to consider whether employment policies should form part of the employment agreement. Employment policies can assist in setting out the expectations for employees and consequences for misconduct. Having an effective employment policy allows for clear expectations to be established and provides greater flexibility in the event of misconduct by an employee.
- Remuneration: It is important to ensure that employees are being paid in accordance with the relevant applicable award. The relevant employment awards should be reviewed annually to ensure that the employees’ wages meet or exceed the minimum wage.
MistryFallahi can advise on employment terms and policies to ensure that effective protections on key issues are included in a business’ employment agreements.