In a recent case before the New South Wales Supreme Court, an employer has been successful in securing an injunction against an employee. The employee has been restrained from departing from his contractual obligations until 11 September 2016.
The case of BCG Partners (Australia) Pty Ltd v Hickey  NSWSC 90 involved a senior broker who sought to resign from his employment.
The employee, Mr Hickey, was employed by BCG Partners (Australia) Pty Ltd (BCG) on 1 April 2006 for an initial period of three years. The employment contract was extended as follows:
The contract provided that either party could give notice to the other in writing to terminate the contract within the last two weeks of the initial period and the employment would subsequently end three months after the expiration date.
In the beginning of November 2015, Mr Hickey was offered employment with a competitor of BCG and resigned from his employment, providing only one months’ notice.
BCG subsequently commenced proceedings against Mr Hickey.
The Court held that the contract remained on foot and ordered that Mr Hickey be restrained from departing from his contractual obligations under 11 September 2016.
Whilst the Court acknowledged that it could order that the contract continue until 31 July 2018, given that the “actual employment” was over the period was shortened to September this year.
The decision in this case shows that the courts are willing to remedy a breach of contract by employees and uphold a reasonable restraint. If drafted carefully, employers can use termination clauses and restraints as an effective tool for protecting the interests of the business.
Source : Kempstrang
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