In the blue corner
The summer break is a time when many New Zealanders reassess their lives and often consider changing jobs, and in a very tight labour market as we have at the moment, there are plenty of jobs available and not enough people to fill them.
Businesses have spent the summer trying to fill vacancies and employees have dusted off their CVs and employment contract’s as part of their own due diligence in considering a change.
An employment contract sets out the rights and obligations of both parties in an employment relationship and is a legal requirement.
The purpose of a restraint of trade clause in a contract is to protect an employer’s processes, sensitive information such as intellectual property, which includes theway things are done and customer contractual arrangements.
They are legitimate and appropriate in many cases and there are rules to ensure they are reasonable and do not affect an employee’s ability to get a new job.
However, the case of a seamstress on $20 an hour being subject to a six-month restraint of trade on the face of it appears to be well outside the existing rules.
If it is, the courts would likely take a dim view of this and rule accordingly, that of course requires the employee concerned to take the matter to court.
It has been suggested that a Labour MP’s proposedmember’s bill that would establish a threshold for restraint of trade clauses would fix this issue.
However, the Labour Party voted against amember’s bill put forward by Paul Goldsmith thatwould have introduced thresholds into employment contracts.
We often hear the call for a new law to deal with all sorts of issues, but they often do not achieve what they set out to and create more bureaucracy and red tape along the way. This in turn creates more problems than they set out to solve.
What we do not need are more interventions such as the ‘‘Unfair Pay Agreements’’ being pushed by the Government that will take New Zealand back to the bad old days of ‘‘National Awards’’ in the 1970s.
We need fewer but more effective rules that allow a flexible labourmarket that will enable our recovery from the Covid lockdowns that have wreaked havoc through the business sector.