Employment is a complex area of the law, which is constantly evolving. AWB Charlesworth Solicitors Limited provides practical, cost effective advice in line with current best practice.
Our aim is to ensure your business avoids potential problems with staff by ensuring you follow correct employment procedures in line with current legislation.
We will draft or check your existing employment contracts, service and consultancy agreements to avoid exposure to risk. Should difficulties arise we provide timely advice on redundancy, grievance, disciplinary and dismissal procedures including compromise agreements and settlements for departing employees.
Where required we will represent your business through mediation with ACAS or other intermediaries, the courts and through an appeal process.
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Restrictive Covenants in Employment Contracts
Many employers worry about staff leaving to work for their competitors- taking valuable clients and company knowledge with them. It is because of this that companies place restrictive covenants into employment contracts in order to restrict what an employee can and can’t do once they have left the business. But how feasible is it to actually enforce these restrictions?
Restrictive covenants are commonly written into employment contracts to protect the business against the misuse of confidential information and to prevent employees taking or abusing the clients of the business. However not all restrictive covenants are enforceable and it can be difficult for the employer to rely upon them if they are not correctly drafted.
For a restrictive covenant to be potentially enforceable by the courts the clause needs to satisfy the following criteria:
- It must protect a legitimate business interest of the employer; and
- It must not go further than is reasonably necessary to give that interest adequate protection.
It is often necessary to consider if there are any other methods available to the employer that will afford the business adequate protection. Any alternative options should be explored fully and used where possible. Courts will also look to see how wide the scopes of the covenants are with regard to both time and area. Any covenants deemed to be too wide in their scope will be unenforceable by the employer.
Employers also need to be aware that in some cases the time limit upon the restrictive covenants can begin when an employee is placed onto garden leave even though their contract has not yet terminated. In cases where the restrictive covenants are set to run for the same amount of time as the garden leave, the restrictive covenants will expire at the same time as the employment contract terminates and therefore not providing the employer with any further protection.
Probation Period Dismissals
Many employment contracts contain a probation period for new employees. Often this will be a three or six month period that the employer will use to monitor the employee’s performance and which, in some cases, can be extended when the performance is not satisfactory. When the employee performs poorly can the employer use the probationary period for dismissal?
Although probationary periods are commonly used in employment contracts, employers do not automatically have the right to dismiss the employee without good reason. Failing a probationary period could give an employer reason to terminate the contract on capability grounds but the normal rules when dismissing an employee will apply.
As probationary periods can only run for a reasonable amount of time and are used mainly for new employees, it is highly unlikely that the employee will have worked the two continuous years needed to gain the right to claim for unfair dismissal. This makes terminating the contract somewhat easier for the employer. However, the employee can still claim where dismissal is deemed to be automatically unfair or is due to discrimination in relation to a protected characteristic.
Employers will be best scheduling meetings with the employee during the probationary period to discuss progress in the new role and to bring up any issues that may be arising. Documenting these meetings would also be advised in order for both parties to understand what is expected of them. Then, should the employee perform poorly, if the employer chooses to terminate the contract, there will be documentary evidence to support the reasoning for the decision.