Employment Contract / Redundancy Question

subfreq

I signed a standard employment contract a few years ago. One of the clauses was that I was prevented from taking employment in a similar or competing company for a set period of 12 months after leaving my current position.

I am now being made officially redundant in this job. Does that mean my contract is void or does this clause still stand?

I work in highly skilled niche position and with current market circumstances I have very few options. All of them could be considered to be in competing companies.

Sleepy

The clause isn't legally binding in the first place. I'm afraid I can't quote the case law but AFAIK this has been tried in Irish courts and these 'non competition' clauses in an employment contract were found to be unenforceable. A former colleague got legal advice on this while leaving the company to take up employment with a client of the organisation.

As someone in the same situation, i.e. recently made redundant with the same sort of clause in my old employment contract I've completely disregarded it and have fired off CV's to all their clients that I'd be prepare to work for.

jeckle

Whatever about the legalities of the clause, the fact is that you did not leave of your own accord – you were basically ‘let go’ by your previous employer. It’s not as if you were poached by a competitor or resigned because of a better offer from them.

They cannot make you redundant & then expect you to sit around for 12 months without working in your field of expertise. If they were to expect you to do that, you would expect them to pay you full salary for the 12 months as well as any redundancy package?

Also, I’m sure that this would perhaps have some implications regarding your entitlement to claim Jobseekers Benefit, as you would in effect not be available for work for 12 months (in your particular field anyway).

subfreq

Thanks for the advice.

My boss is very aggressive towards his competitors. More so than usual company rivalry. Almost personal.

I am almost positive he would pull this card out if I took any work with them so I want to know if I have any come back or not.

Ultimately I have to do what pays the mortgage but I also don't want to take on a legal dispute at the same time as working through a redundancy.

Nody

Sleepy wrote: »

The clause isn't legally binding in the first place. I'm afraid I can't quote the case law but AFAIK this has been tried in Irish courts and these 'non competition' clauses in an employment contract were found to be unenforceable. A former colleague got legal advice on this while leaving the company to take up employment with a client of the organisation.

As someone in the same situation, i.e. recently made redundant with the same sort of clause in my old employment contract I've completely disregarded it and have fired off CV's to all their clients that I'd be prepare to work for.

Sorry Sleepy but you are wrong; the clause IS legally binding and enforcable AND has successfully been tested in court.

How ever the caveat here is if it is reasonble in relation to the seniority of the position. So a customer support agent can walk in tomorrow to a competitor with out question but the Vice president of Intel could not as extreme example. Also the duration is dependant on the seniority of the position held previously.

Sleepy

Must depend on the wording of the contract so Nody, the former colleague of mine I was speaking to had legal advice to the effect that he could go work for whoever he felt like.

In subfreq's position, they've let him go, it's not like he's being head-hunted. I can't see any court saying he can't go work for a competitor unless he was to provide them with insider info on his former company's dealings etc.

jeckle

According to the Citizen's Information Website :

In recent times, some employers are adding in specific provisions in contracts of employment that limit the ability of employees to work in a certain sector, with certain suppliers, clients, for a period following termination of employment. (For example, it may specifically state that the employee cannot work in a certain sector, with or for suppliers or clients of the former employer, etc.). There is nothing in employment law in Ireland that strictly forbids this, but there is no provision in employment law that allows this either.

Essentially, this is an issue of contract law - that is, the contract of employment signed and agreed between the employer and employee. If you have any concerns about this issue, you are strongly advised to seek legal advice from a competent legal professional in advance of signing this contract. However, even if the contract is signed, you are always free to seek such legal advice. Solicitors' fees in Ireland can vary widely so shop around and obtain some quotes for legal advice before you proceed.