King St Industries Case

Implications of terminating an employment Contract

An employment contract is an informal (oral) or formal (written) legally binding agreement between an employer and an employee specifying the legal rights and obligations of each party. (Stone 2006 p.682) This essay will discuss the implications of having no written or no relevant employment contract for both the employer and the employee, it will also discuss the implications that can arise once employment has been terminated. Specifically, Four main points will be identified and researched to help Kings St Industries formalise this situation. These main points are; How can the company successfully terminate Bert’s employment? What restrictions apply to Bert if he leaves and joins a competitor? What happens if Bert provides confidential marketing information to a new employer? And, what happens if Bert lures away and hires other staff currently employed by King Street Industries?

In order for King St Industries to terminate Dooleys employment successfully they must determine the nature
King St Industries could have contractually restricted Dooley from Poaching its staff if the employment contract contained an Anti-poaching clause. However as a general rule anti-poaching clauses are hard to enforce due to the fact that employees have the right to work for anyone they choose, this was proven in the case of Aussie Home Loans who tried to enforce an anti-poaching clause against a former employee. As stated in an article by Mark Brown the anti-poaching clause prevented the former employee from approaching staff for 12 months after termination of his employment. A court found that the restraint on poaching clause was “excessive” and that contractors have the right to work for a rival business, which may offer more attractive terms of engagement upon duly terminating their arrangements with Aussie Home