A written contract of employment is a very important document that sets out the agreed way in which you and your staff will work. It is highly valued by your staff as they want to understand their entitlements, what is expected of them by their employer and what if any restrictions are placed on them.

From a business’s perspective a contract of employment is an essential and critical document that can protect your business assets. Without a well written contract of employment all the hard work you have put in to build up your business could be lost if an employee sets up in competition and takes all of your clients.

This is how the contract of employment can protect your business.

Garden Leave

This is where someone resigns or is dismissed and you want to remove them from the business to serve out their notice period. This will stop them from contacting your clients and prospects for a period whilst you develop relationships and secure your business. They are still employed by you but are not required to work and they cannot work for anyone else. It may also keep the employee out of the market for long enough for confidential information that he or she holds to become obsolete.

However, you cannot do this unless the contract of employment gives you this right.

Confidentiality

During someone’s employment with you they may obtain information that may be  confidential. Whilst this can be protected by implied terms it is always a good idea to protect your most commercially  sensitive information by setting out and  defining confidential information by reference to a non-exhaustive list.

An employee has a duty during their employment with you not to disclose confidential information however you are at risk once they leave if this does

not extend beyond the term of the employment (other than for trade secrets such as unique formula). So unless you have specific clauses in the contract you will not be able to prevent someone from using the information.

You should make it clear in the contract any breaches of confidentiality could result in the disciplinary action being taken.

Post-termination restrictions

One way to protect your business is to incorporate restrictive covenant clauses in to the employment contracts that will try to prevent employees from working in competition with you after employment has ended. These restrictions can protect the business and restrict the former employee for a defined period and within a defined geographical range.

There are various restrictive covenants that can be used such as non-competition, non-dealing and non-solicitation.  These will prevent the former employee from approaching your customers and suppliers, poaching clients, staff and potential clients.

Care must be taken when drafting these clauses so that they are not deemed to be overly protective and restrictive and are a restraint of trade. A covenant will be enforceable only if it protects legitimate business interests and goes no further than is necessary to protect those interests (ie in terms of the activities that are restricted and any time and geographical limitations). Covenants that are too wide will be void. Employers that are drafting covenants should first identify what business interests they genuinely need to protect and limit each clause to cover this.

How we can help you.

We have a specialist contract drafting service that will provide your business with a bespoke contract, please visit our web page  https://qandahr.co.uk/employment-law-and-hr/engage-package/

Or you can access template contracts that have been drafted by us and will protect your business on our software portal service https://qandahr.co.uk/employment-law-and-hr/hr-portal/

Or call Iain Lock on 01920 463777 or email ilock@qandalaw.co.uk