A recent decision of the New South Wales Court of Appeal serves as a strong reminder to employers of the importance in both drafting and maintaining copies of their employees’ contracts of employment.
In Agha v Devine Real Estate Concord Pty Ltd [2021] NSWCA 29 the Court considered appeals from the New South Wales Supreme Court by two real estate agents, Mr Agha and Mr Coombe.
The employer, Devine Real Estate Concord Pty Ltd and related entities, accused Mr Agha and Mr Coombe of obtaining confidential information and competing with the employer in breach of restraint provisions. The Supreme Court in the first instance found that whilst Mr Coombe’s employment agreement was not located, it was probable that it was signed in similar terms to Mr Agha’s employment agreement and the Court found its terms to therefore be enforceable against him.
A common issue in employment law disputes is the lost or missing contract of employment which leads to, as an alternative, evidence as to standard templates used by an employer or other contracts executed at a similar time often being relied on by employers who are seeking to enforce terms such as restraints of trade and confidentiality obligations.
However, in this matter, the New South Wales Court of Appeal found that the trial judge had erred in finding that Mr Coombe had executed a contract of employment in circumstances in which it could not be located. As a result, Mr Coombe was found not to be bound by the express contractual obligations of restraints and confidentiality. The Court otherwise upheld the Supreme Court’s findings as to restraints of trade against Mr Agha.
The Court of Appeal’s decision provides some critical reminders for employers that:
- it is important to carefully store a copy of each employee’s contracts of employment; and
- a carefully drafted employment contract with terms as to restraints and confidentiality is vital in helping to protect the company’s interests following the departure of an employee.
Our Commercial and Disputes Teams are able to assist in the preparation of employment contracts and in relation to a dispute you might be contemplating or involved in.
Please contact Rosy Dean (nee Rosy Roberts), Principal or Meghan Warren, Principal on rroberts@burkelawyers.com.au, mwarren@burkelawyers.com.au respectively, or by contacting our office on + 61 3 9822 8588.
Insight written by Rosy Dean (nee Rosy Roberts) with special thanks and acknowledgement to Tim Donaghey of Counsel for his Case Note Summary about this matter and the related legal issues dated 22 March 2021.
