Protecting your business amid increased employee movement

Many industries continue to experience increased movement in the labour market as an impact of COVID-19. In this fast-paced environment, it is particularly important for employers to be wary of the risks that may arise from an employee’s departure and where possible, avoid vulnerabilities.

So, what are some key measures employers can rely upon to ensure their business is protected?

Notice periods

When entering into employment agreements, it’s important to think ahead. Consideration should always be given to notice provisions to give employers the time needed to find an adequate replacement and/or manage handovers when an employee departs.

Confidentiality and company property

It is also important to include robust confidential information provisions in employment contracts, which clearly define what constitutes confidential information, and make clear that an employee’s confidentiality obligations persist post-termination of employment.

Similarly, a requirement to return company property upon termination, including confidential documentation, is critical.

Employers also have other recourse available if a departing employee misuses confidential information or fails to return company property, regardless of any contractual protections, including:

• based on fiduciary duties, depending on the position of employment; and
  under the Corporations Act 2001 (Cth).

IT surveillance

Effective surveillance of emails, internet use, access to confidential information, etc. may also be used by employers to help detect any improper conduct by outgoing employees, to the extent this is done lawfully.

Generally, this includes having a suitable policy in place, notifying employees of such surveillance.

“Gardening leave” provisions

Client relationships are often at the forefront of a business’ success, so care should be taken to maintain these relationships when employees responsible for them plan to leave the company. To help manage this, employers should consider including a “gardening leave” provision in employment contracts, particularly for employees at a senior level or for employees with client-facing roles.

Gardening leave provisions allow an employer to direct a departing employee to “work out” part or all of their notice period (during which time they remain an employee) but without undertaking all of their usual responsibilities or otherwise being involved in business operations.

Employers may use this time to get their “ducks in a row”, including by firming up relationships with clients or customers, and perhaps other employees who may seek to follow the departing employee to their new employer.

Exit processes

As well as understanding the reasons behind an employee’s departure, exit interviews (and related correspondence) also present employers with an opportunity to clarify expectations before the employment relationship ends and to remind departing employees of their post-employment obligations.

Post-employment restraints

The inclusion of carefully drafted post-employment restraints, such as non-competition, non-solicitation, and non-dealing provisions, are a helpful tool for employers seeking to prohibit certain conduct post-termination of employment with the aim of protecting legitimate business interests.

However, it is important that restraints are appropriately tailored to specific positions (taking into account the nature of the role) to increase enforceability prospects - a “one size fits all” approach should be avoided.

Don’t be afraid to reach out for help

Navigating an influx of incoming and outgoing staff can get messy. You can reach out to an employment lawyer for legal advice if you require assistance implementing any of these protective measures or dealing with the departure of employees.

Getting the right advice before the ink dries can save you from a headache later.

Written by Luke Gattuso, Principal Lawyer – Employment, Safety and Migration, Macpherson Kelley and Anabelle Uebergang, Associate – Employment, Safety and Migration, Macpherson Kelley