Barbara Buckett and Associates Barristors and Solicitors

trendz - our client newsletter

may 2007

are restraint of trade clauses enforceable?

An action between a street coffee cart chain and a former employee has revisited the law on restraint of trade provisions.

Restraint of trade clauses are common in employment agreements where there is a risk that an employee might leave to work for another competing business or set up business on their own account in competition with their former employer. Such clauses typically place a restriction on other employment or business activity in competition with the employer for a defined period and within a certain location after the employment ends. The Court of Appeal has found that a promise is a promise - a person who makes a commercial promise expects to have to perform it and correspondingly, one who receives such a promise expects it to be kept.

But a restraint of trade cannot be used simply to avoid competition. For the restraint to be enforceable there needs to be something that the employer wishes to be protected, such as trade secrets, business systems and client lists that if known could be of value to a competing employer or the employee if they set up in business. It is also important that the restraint of trade be reasonable and not unfairly restrict the employee from making a living after leaving their job. Click for more on this aspect of employment law …

workplace fighting

Unlike in rugby where often the player who retaliates against foul play gets the penalty, in Housham v Juken New Zealand the Employment Court awarded $20,000 for lost wages and compensation of $20,000 against a timber industry employer who dismissed an employee who defended himself in a fight.

The Employment Court found that an employer may properly regard assault, other physical aggression and fighting as serious misconduct and with the appropriate proof employees involved can be dismissed. However it decided that this cannot reasonably extend to every participant in such a confrontation under any circumstances. Find out why the Court made this ruling …

identity crime a concern for businesses too

Recent focus on identity theft in New Zealand and worldwide has highlighted the need for organisations to ensure that they have secure practices in relation to the storage and destruction of personal and business information. There are a number of steps that a business can take to reduce the risk of identity fraud in and around the workplace. What should you being doing?

drug testing - can you do it?

A recent report on national drug and alcohol usage in Australia raises questions as to the need to monitor and manage drug usage and the impact in the workplace on things such as health, safety and productivity. The report states that the workplace is a usual place for 9.5 percent of methamphetamine users to use the substance. The report also linked alcohol consumption to absenteeism and negative work-related behaviours.

The answer as to whether you can drug test or not is straightforward because there are only limited situations where staff can be drug tested. The law in this area balances civil liberties and the obligations of an employer to ensure a workplace is safe. Read on for more on this important issue.

important cases to watch

New Zealand Professional Firefighters' Union v New Zealand Fire Service Commission [2007]
New Zealand Tramways and Public Transport Employees Union Inc v Transportation Auckland Corporation Ltd [2007]

The firefighters union is challenging in the Supreme Court a Court of Appeal ruling concerning the interpretation of section 57 of the Holidays Act 2003. This section of the Act specifies the requirements that apply to taking alternative holidays.

The bus drivers union is appealing an Employment Court ruling that decided that an employment agreement service holiday provision did not require an additional week of holiday to be given as a result of the increase of the minimum statutory annual holiday entitlement to 4 weeks from 1 April 2007. This an important case as there are a number of employment agreements that contain the wording that is in dispute in this case.

Make a note to follow these cases ...

serious harm definition reviewed

The government is seeking public feedback on the definition of "serious harm" prescribed in Schedule 1 of the Health and Safety in Employment Act 1992.

The definition of serious harm is central to the Act. It helps employers manage hazards and outlines what their notification requirements are. It also gives employees direction in terms of their rights to refuse to do dangerous work, and defines inspectors' powers to issue prohibition notices.

As a basis for the consultation, the Department of Labour has released a discussion paper that contains a draft revised definition. The discussion paper and more information can be found at the Department of Labour website: www.osh.dol.govt.nz/serious-harm/

The public has until 15 June 2007 to make submissions.

We can assist with drafting submissions or representation at select committees. Read on ...

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Disclaimer: These articles are necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication. Please refer to our Legal Notices.