| Restrictions | OK |
|---|---|
| Jurisdiction | Employment Relations Authority - Wellington |
| Reference No | WA 107/05 |
| Hearing date | 24 Jun 2005 |
| Determination date | 04 July 2005 |
| Member | D Asher |
| Representation | L Campbell ; P Northway |
| Location | Palmerston North |
| Parties | Total Beauty Supplies Ltd v Northway |
| Summary | RESTRAINT OF TRADE - Applicant sought declaration that respondent comply with restraint of trade and damages for breach of restraint - Employment agreement prohibited respondent from working in competition to applicant within 100 kilometre radius for six months following termination of employment - Respondent resigned and commenced work for competitor - Size of geographical area and duration of restraint arbitrary and unreasonable - Not established that respondent built up wealth of knowledge about applicant's sales and business practices and relationship with clients such that would be grossly unfair to allow her to exploit that knowledge immediately after resignation for benefit of competitor - Highly competitive industry - Applicant did not enjoy market share that stood to be undermined by respondent's departure to competitor - Applying restraint would have serious implications for respondent's employment, financial, and domestic situations - Unfair to enforce restraint when other employees of applicant had not been similarly restrained - Applicant failed to meet obligation to show reasonableness of restraint - No evidence to justify amending terms of restraint - Restraint unenforceable - BREACH OF CONTRACT - PENALTY - Employment agreement required one month's notice of termination of employment - Applicant sought damages and penalty as respondent gave 28 days notice rather than one calendar month - One ordinary meaning of month" was "a period of 28 days or four weeks" - Respondent's notice met that requirement - In any case, matter not raised with respondent during notice period - Difference amounted to one day and no measurable damage to applicant - COUNTER CLAIM - Counter claim by respondent for monies deducted from final pay for damage to company motor vehicle - Provision in employment agreement required payment of insurance excess by employee where damage was fault of employee - Fault disputed - Further, clause permitting deduction for any debt owing to applicant probably ineffective as applicant purported to reserve right to deduct from wages without express permission - Harrison v Tuckers Wool Processors applied - Repayment of illegal deduction ordered - Hair salon area manager" |
| Result | Applications dismissed ; Counterclaim granted ; Repayment of illegal deduction ($519.50) ; Costs reserved |
| Statutes | Illegal Contracts Act s8;Wages Protection Act 1983 |
| Cases Cited | Cain v Turner and Growers Fresh Ltd [1998] 3 ERNZ 314;Gallagher Group Limited v Whalley [1999] 1 ERNZ 490;Harrison v Tuckers Wool Processors Ltd [1998] 3 ERNZ 418;Welsh v Cooney [1993] 1 ERNZ 407 |
| Number of Pages | 9 |
| PDF File Link: | wa 107_05.pdf [pdf 40 KB] |