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Cover yourself with clauses in a new contract

Tuesday, April 3, 2018

As posted in the Sunday Business Post on April 1st, 2018.

Precedent employment contracts aren’t hard to come by – a simple Google search will present a range of options in seconds. However, employers should proceed cautiously with “off-the-shelf” precedents. As always, when it comes to employment law, the devil is in the detail, and there are certain areas that are worth focusing on.

Probationary period
It is important to have a robust probationary period clause. Once an Irish employee has 52 weeks of continuous service, their dismissal is automatically deemed unfair by the law, and parting company with a troublesome employee (or simply an employee who is not working out in the way that you wanted) can be extremely difficult.

For that reason, the probationary period is of supreme importance. Unfortunately, the wording is sometimes neglected, which can cause problems.

It is important to clearly define the duration of the probationary period but, equally, give yourself the right to extend it at your discretion (while ensuring you never cross the one-year threshold, including the notice period).

It’s also important to state clearly that the company’s disciplinary procedures will not apply in the event of a termination during the probationary period.

Finally, an employer should make it clear that they are entitled to invoke a considerably shorter period of notice (for example, one week) if they opt to dismiss during probation. Employers lose sight of this level of detail at their peril.

Confidentiality clause
It is always a good idea to ensure that the contract contains a carefully-worded confidentiality clause. In the absence of a confidentiality clause, you run the risk of an employee being able to discuss confidential information relating to your workplace post-employment.

If there is no specific confidentiality clause in the document, the most the courts will do is protect information that has the status of a “trade secret” which may be wholly insufficient for your purposes.

A confidentiality clause should be tailored to your particular workplace and, if necessary, make specific reference to particular types of information that it is absolutely prohibited to discuss or disseminate either during the course of employment or after it.

The best contracts will make it clear that any confidential information in the possession of an employee (including any notes prepared by them during their employment), whether in electronic format or hard copy, must be returned to the employer at the end of employment. This is a simple precaution, but an eminently worthwhile one.

Gardening leave
It is very important to include a comprehensive gardening leave clause, especially when you are hiring high-level or key employees. A prudent employer will take particular care to ensure that this point is always covered off. It is valuable in circumstances where the employee decides to leave and the employer wants to isolate them from key clients for the duration of the notice period.

This is obviously to try to prevent key clients from leaving with the employee (and, in certain cases, to prevent the employee from attempting to poison the well before they go). A gardening leave clause allows an employer to quarantine the employee, but only if it is well constructed.

A good gardening leave clause will allow the employer to peremptorily remove the employee from the office environment, prevent them from contacting clients or customers and, if needs be, stay at home. Such a clause will also allow the employer to bring the employee back to the office for key debriefing meetings or other tasks, again at the employer’s discretion.

In the absence of a good gardening leave clause, an employer may find it difficult to do any of these things, something that can be a significant liability if there is a flight risk of important clients or customers.

If you have any questions or queries on this topic, please contact head of our employment team, Patrick Walshe.


Patrick Walshe