| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Wellington |
| Reference No | WA 49A/05 |
| Hearing date | 24 Mar 2005 |
| Determination date | 23 May 2005 |
| Member | G J Wood |
| Representation | P Swarbrick ; D France |
| Location | Wellington |
| Parties | Cullen Building Supplies Ltd v Caddick and Anor |
| Other Parties | Bunnings Ltd |
| Summary | PENALTY - Applicant sought penalties against first respondent, a former employee, and first respondent's present employer, second respondent, for breaching restraint of trade clause - Applicant a building products retailer in Hawera servicing Taranaki area south of Mt Taranaki - Applicant and first respondent entered into new employment agreement providing for pay increase of $6,000 per year and restraint of trade and non-solicitation clause - Restraint for one month with no geographical location - First respondent accepted position with second respondent in Hawera and commenced employment halfway through restraint period - Restraint protected proprietary interests relating to customer contacts - Restraint unreasonable only on grounds of geographical area - Agreement modified to area of Taranaki region south of Mt Taranaki - Second respondent encouraged first respondent to breach restraint and took risk it would prove unenforceable - Penalties appropriate - COUNTERCLAIM - Applicant required first respondent to go on garden leave during notice period - Agreement did not provide for payment in lieu of notice - At time applicant accepted being placed on garden leave and did not suffer any damage - Even if technical breach of employment agreement no penalty awarded - Even if technical breach of s63A Employment Relations Act 2000 penalty not warranted - Costs reserved |
| Result | Application granted ; Penalties ($2,500)(payable by first respondent to Crown) ; ($5,000)(payable by second respondent to Crown) ; Counterclaim dismissed ; Costs reserved |
| Statutes | ERA s63A |
| Cases Cited | Cain v Turners and Growers Fresh Ltd [1998] 3 ERNZ 314;Xu v Naenae Auto Service Station Ltd and Anor unreported, Goddard CJ, 27 November 2002, WC 44/02 |
| Number of Pages | 6 |
| PDF File Link: | wa 49a_05.pdf [pdf 30 KB] |