If you are an employee who has left your job, there are a few things you should keep in mind prior to starting a new role in another business. In this article, we will discuss the typical post-employment obligations placed on employees and provide tips to avoid breaching them.

What Does ‘Post-Employment’ Mean?

Post-employment obligations are any obligations that continue past the end of your employment. These exist regardless of whether you resigned or your employment was terminated for another reason (such as a redundancy).

Your employment agreement will set out most of your post-employment obligations. There are two types of obligations:

  • indefinite obligations: These responsibilities continue indefinitely, and often include confidentiality and intellectual property (IP) obligations; and
  • ongoing obligations: These responsibilities have a set time period attached to them, such as a non-compete or non-solicitation restraint clauses.

Return of Property

It is likely that your employer will ask you to return any business property or equipment upon termination of your employment. This might include a laptop, mobile phone or other equipment. 

Sometimes, an employer may also ask that you present your own phone or device which you used during your employment. They will then remove any confidential business information before returning it to you. You may request that you delete this information yourself but it is ultimately the employer’s decision.

Confidentiality Obligations

You will owe three key confidentiality obligations to your employer even after your employment has ended.

1. Contractual Obligations

Most employers will include several confidentiality obligations in their employment agreements that apply during and after employment. These may include:

  • not disclosing any confidential information gained through employment to third parties; and
  • returning any confidential information in your possession when you end employment.

2. Common Law Obligations

Even if your employer does not include a confidentiality clause in your contract, you will still owe confidentiality obligations to your employer due to the employee-employer relationship. These are called common law duties.

3. Statutory Obligations

Similarly, you also have statutory responsibilities with your employer even if they are not written into your employment agreement. They include an obligation to not personally benefit from information gained during your employment, to the detriment of your employer.

Tip: To reduce risk of breach:

  • delete confidential information owned by your employer off your personal devices before your last day; and
  • think twice before sharing any related information with your new employer in case it may be confidential. 

 

IP

Generally, all IP you create during and in connection with your employment will be owned by your employer. This is the case unless your employment contact states otherwise. 

Any IP that you have access to during employment (like reports or templates) also remains the property of your employer. So you can only use these materials in your new role if you have permission to do so.  

Tip: To reduce the risk of breach:

  • ensure that you understand what IP is captured by your employment contract; and
  • check if you can legally use any IP that you have created outside your employment but which may have some connection to your job.

 

Post-Employment Restraints

Unlike confidentiality and IP clauses, a restraint of trade clause is a ‘dormant clause’. This means that it is only activated when your employer chooses to enforce it.

Typically, a restraint clause contains three components that work together.

1. Nature of Restraint

The substance of a restraint clause can vary in its specifics. It may take the form of a:

  • non-compete clause stopping you from working in a competing business;
  • non-solicitation clause in relation to clients and suppliers;
  • non-solicitation clause in relation to employees and contractors; or
  • clause stopping you from helping a third party to do any of the above.

2. Restraint Area

This part of the clause sets out what geographical areas the restraint clause applies to. For example, you may be able to work in a competing business in New South Wales,but not Victoria.

Usually, the clause sets out the restraint area in a cascading manner, from a larger geographical region to a more specific (e.g. “New South Wales, Sydney, and Surry Hills”). This way, in the event of a dispute, the court can decide on the most appropriate restraint area depending on the circumstances.

3. Restraint Period

This part of the clause sets out how long the restraint clause will operate. Restraint clauses are very unlikely to be enforced indefinitely.

Similar to the restraint area, the clause sets out the restraint period in a cascading manner (e.g. “12 months, 6 months and 3 months”). 

Tip: To reduce risk of breach, get legal advice to ensure your compliance with any restraint of trade clause, particularly if you are concerned with its substance. However, do note that employers are unlikely to enforce a restraint clause if they have not suffered any loss or detriment to their business.

 

Can My Employer Impose Additional Obligations After Termination?

When you leave your job, your employer may attempt to have you sign a document or letter which includes additional post-employment obligations. Remember you are under no obligation to sign such a document.

If the document or letter simply reiterates your employment contract, then let your employer know you are happy to comply with your signed contract and that a new document is not necessary.

Typically, the only reason to agree to any additional post-employment obligations is if your employer is:

  • offering you some sort of benefit or additional financial incentive; or
  • settling a dispute with you.

Key Takeaways

Before you leave your job, reread your employment contract to identify your post-employment obligations. Obtain legal advice on any clauses you have concerns about so that you are sure you can take on your new role or start your new business. Importantly, avoid signing a letter imposing additional post-employment obligations unless you have received legal advice from an employment lawyer.

If you would like assistance figuring out your post-employment obligations, get in touch with LegalVision’s employment lawyers on 1300 544 755 or fill out the form on this page.

Edith Moss
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