Employment contracts

That an employee should sign their contract of employment sounds obvious, but employers must ensure that any variation to the original contract is also signed.

The Operations Director of Tenon FM Limited (Tenon) had worked for the company for 10 years - her original contract of employment was dated 2008. There had been two subsequent contracts in 2011 and 2012 which contained more onerous obligations regarding what she could and could not do after her contract ended (known as 'post termination covenants').  The employee gave in her notice and intended to work for a competitor organisation. Tenon found out that the departing Operations Director had tried to persuade another Tenon employee to join her at her new company. As a result, Tenon brought proceedings for an interim injunction to enforce the post termination covenants.

It is fair to say that Tenon did not do itself any favours in the eyes of the court as the company's behaviour was pretty poor. It only gave the employee 12 hours to respond - nowhere near enough time for the employee to obtain any legal advice. It also served the proceedings on the employee on the eve of her father's funeral - and what's more, the company knew the date of the funeral.

Tenon were unable to produce any signed contracts of employment.  The employee argued that she had failed to sign them because they contained more onerous provisions that she did not agree to. The Court refused the application for the injunction on the basis that Tenon could not produce the 2011 and 2012 signed contracts and they were thus not binding.

It is therefore important for employers to ensure that:

  • Contracts of senior employees are signed and properly stored
  • Any variations to the contract are signed and placed in the system
  • Valuable consideration must be given for any alteration to the original contract of employment which is more onerous or negative, for example a one-off payment or a bonus
  • Employees with a similar level of seniority have the same post termination restrictions to ensure that the employer can argue that there is a legitimate business interest to protect in imposing the covenants

To discuss this or any other employment related issue, contact us.

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