Restrictive clauses aim to protect employers

PHOTO: Restrictive clauses aim to protect employers

Mr Francis Cheng argues that restrictive clauses in employment contracts "are unenforceable as they are generally against public policy" ("Protect workers from unfair restrictive clauses"; last Saturday).

In trying to protect workers' interests, he seems to have forgotten the interests of employers whose livelihoods depend on the survival of their business. Restricting the use of vital information by workers after their employment has ended may be needed to protect the employer's business.

A former employee who has knowledge of the employer's technology and strategic information may be an attractive asset to a competitor.

Many employers have included clauses in the contracts of their senior or highly skilled staff at the outset of their employment, which may help to deter employees from joining a rival company, especially if the competitor has the habit of poaching skilled staff.

A restrictive covenant is a clause in a contract that prohibits an employee from competing with his former employer for a certain period and within a certain geographical area after the worker has left the business, or prevents him from soliciting customers of the business by using knowledge gained during his prior employment.

If the former employer can convince a court that the covenant is designed to protect his legitimate interests and extends no further than is reasonably necessary to achieve that aim, then it will be upheld and enforced.

After all, employment laws must protect both employers and employees to an equal extent if labour disputes are to be avoided.

If a covenant is deemed to be unreasonable by the court, then it will be null and void. If an employee believes he has been short-changed by his previous employer, he has recourse to the courts to protect his rights under the relevant labour laws.

Heng Cho Choon

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