Sonny Bill urge may land you in trouble
Switch to rival with caution
By Henry Budd
Imagine a rival company has offered you an equivalent role at three times your salary if you quit your job and join them immediately. Would you follow Sonny Bill Williams’s lead and sneak off without telling your boss? It might sound tempting to take the cash, walk out the door and never look back, but an employment law specialist warns that the consequences of such action can be ugly.
According to Harmers Workplace Lawyers partner Shana Schreier-Joffe most employment contracts include a clause outlining how much notice an employee must give their employer when they resign.
"You can’t just up and go whenever you want," Schreier-Joffe says.
If you do part ways without notice there is a chance you could end up in court, she says.
While the case of Williams is slightly unusual because he was on a fixed-term contract with the Canterbury Bulldogs, Schreier-Joffe says the club’s action to haul him before the courts is not.
Although the courts are highly unlikely to force you to go back to work for your previous employer, Schreier-Joffe says they may stop you from taking up your new role.
"If people in their everyday jobs are saying, ‘Yes, I have to give three weeks notice, but the new place wants me to start next week so I’m just going to go and there is nothing anyone can do about it’, they are very wrong because the courts are, in my opinion, more willing to look at the bargains people are entering into," she says.
The courts leave you in no-man’s-land regarding your employment and could force you to pay damages to your ex-employer.
"What they have to show is that as an employer you have suffered damage by the employee breaching the contract," she says.
The amount of damages payable depends on how much notice was to be given.
However, quantifying the damage caused to the company by an employee leaving on short notice is difficult, she says.
Courts can elect to fine an employee up to $6600 for breach of contract.
Bad news doesn’t end there for those wanting to work with a competing business.
One buzz phrase to come out of the Sonny Bill Williams saga is "restraint of trade".
Williams is arguing that the NRL’s salary cap is an unfair restraint of trade and limits his ability to earn his market value.
Schreier-Joffe says it is usual for an employment contract to include a "restraint of trade" clause forbidding someone from working for a direct competitor for a set period of time after they leave their job.
A clause in a sales manager’s contract might prevent them from taking up a job with a direct competitor for six months after they cease employment. This is to ensure they don’t take previous clients with them when they jump ship, she says.
"If it is reasonable and does nothing more than protect your employer in the circumstances then there is a good chance that it will be enforced," she says.
If going to a new employer means you are breaching your contract you should inform them, Schreier-Joffe says.
"There is nothing worse than the new employer finding out and then dropping you like a hot potato when the litigation reaches them," she says.
While it is a "high mountain to climb" for a business to prove a restraint of trade clause is justified, if the company is disgruntled enough to take you to court it is going to cost you.
"If you find yourself in the Supreme Court facing down an injunction you are well advised to have a trust fund," she says.
"If you win you might get your costs back, or some of them back, but you might not [win] and then you will be up for the costs of the company. So it is a huge risk."
Schreier-Joffe says the best option is to sit down with your current employer before you leave to discuss your departure.
"My advice would be to negotiate with your employer so you don’t end up with a breach of contract because you can always amend your contract by agreement," she says. "Celebrities aside, most employers just don’t want the hassle of having someone around who doesn’t want to work."
Employee fined for contract breach
It would appear courts are taking more notice of employer grievances. Last Monday a Griffith university lecturer was fined $500 by the Federal Magistrates’ Court for failing to provide enough notice of resignation.
It is the only known prosecution of such an offence in Australia, reports Workplace Express. The lecturer gave notice of seven weeks and one day when her collective agreement required a six-month notice period.
The university had been seeking $4000 out of a maximum $6600 for the breach of contract.
Federal Magistrate Michael Burnett said the penalty reflected the profit gained by the lecturer moving to a higher-paid position plus "a sum to reflect a sanction for her wilful breach of contract".
The Daily Telegraph