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  1. #1
    Join Date
    Aug 2007
    Melbourne, Australia

    Default Restraint clauses and Awards

    Does anyone know whether industrial awards have any affect on a restraint clause in an employment contract, or they completely separate?

    I'm asking because a friend who has been employed under an award and has been made redundant, has restraint clauses in his employment contract which appear to be unreasonable, as they preclude him from working with any competitor of his previous employer, for an extended period of time.

    Aside from how a court would view these clauses, I wondered whether an award interacts with such clauses in an employment contract.

  2. #2
    Join Date
    Jul 2007


    The effect of the award and the contract will be separate.

    Awards set out the entitlements and obligations that apply to a particular instance of employment of a worker by an employer. With the exception of "Transfer of business" provisions in some awards (where connected periods of employment make a difference to entitlements), I can't think of any instances where Modern Awards make any reference to other employment of a worker aside from the role covered by the award. Of course, most people will have other roles later in their career, or simultaneously (especially part-time or casual workers) but the "other" employment is not canvassed in Modern Awards as it is not relevant to the "primary" employment covered by the award.

    In a contract, a worker cannot "sign away" a right that they have under legislation or under an applicable award. However, as "other employment" is not covered by awards, the parties to a contract of employment are free to make any agreement that they consider reasonable about "other employment" that the worker might undertake.

    The key issue will be whether or not the restraint of trade provisions in the contract were valid and reasonable. If push comes to shove, this is something that the courts may have to decide.


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