An employment contract operates for all the different types of employees from senior to junior and self-employed consultants. It determines the terms by which the employer and employee relationship operates. It shows the duties, roles and responsibilities of the employee and the terms and conditions of employment from salary and bonuses to holidays. An employee is entitled to have a contract of employment or a written statement of terms and conditions of employment. An employment contract for a senior or crucial employee may contain restrictions upon termination. These refer to dealing, soliciting and confidential information and state what an employee cannot do for a specified duration after the employment has ended. The restrictions prevent poaching of staff or clients and are to protect the employer’s business interests but must not impinge on the freedom of trade. A non-compete restriction must be reasonable to be enforceable in that it must be limited in area – a worldwide ban would not be enforceable. Similarly an employee should not deal with clients with whom he had previous dealings in the precious six months.
The purpose of the restrictions are to protect the business interests but they must not be unreasonable so as to hinder competition. The shorter or more limited the restriction the more likely for it to be upheld by the courts/tribunals. Enforceability will depend on the facts as well as other factors.