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15
Return of Company Property
It may be sensible for employers to consider including
an express clause in the employee’s employment
contract and/or separaon agreement requiring
the employee to return all company property and/
or delete any condenal informaon and materials
relang to the business of the employer prior to his
or her departure.
Such condenal informaon may include customer
lists and records, electronic data and oce les, which if
disclosed, may be very valuable to a competor and cause
signicant damage to the employer. Oce equipment,
such as keys, laptops and credit cards, should also be
returned on terminaon.
Post Terminaon Restricve Covenants (“PTRs”)
In certain circumstances, the departure of an employee
could have an adverse eect on an employer’s business
parcularly if the deparng employee joins a direct
competor, solicits and/or poaches clients and sta.
Accordingly, an employer can agree certain PTRs to
protect its business from such conduct.
PTRs in contracts which restrict an employee’s acvies,
especially aer his/her employment has ended, are
considered prima facie unenforceable as being contrary
to public policy. Two condions must be fullled if the
restraint is to be held valid. First, the employer has
shown a legimate interest to protect, in relaon to
that employee’s employment. Second, the PTR must be
shown to be no wider than is reasonably necessary for
the protecon of that interest.
PTR is unreasonable, individual words or phrases may be
ignored, so perming a reasonable call to stand.
It follows that when draing PTRs, employers should
take care to ensure that the PTRs are reasonable in scope
when properly construed.
Retaining Employee Records
There are various statutory obligaons which require
employers to keep certain records such as identy
records, employment records, leave records and records
in relaon to the employee’s right to work. Such records
must be retained for a minimum of 6 months aer the
terminaon of the employment and should generally be
retained for a longer period in case of any future disputes.
Terminaon payments
• contractual severance payments (in excess of the
above statutory minimum);
• wages up to and including the date of terminaon
of employment;
• payment in lieu of noce (if applicable);
• payment in lieu of accrued but untaken annual
leave;
• allowances and/or reimbursement of personal
expenses contracted and incurred by the employee
(such as for food, travel, housing, cost of living);
• any maternity leave pay due;
• accrued end of year payment;
• any sickness allowance due;
• any payment of bonuses and/or commissions; and
• any deferred compensaon including stock or
stock opons where terminaon accelerates
vesng.
• Is the employee entled to any statutory and/or
contractual severance payment?
• Has the employee been paid all other applicable
terminaon payments within 7 days including:
If a PTR is held to be unreasonable, it will be struck
down and will not be enforced unless the oending
parts can be severed by applying the “blue pencil”
test.
Courts cannot enforce a restricon of lesser extent which
would have been reasonable. However, if only part of a
Nocaon
• Has the employee been noed of the decision in
wring?
• Does the nocaon clearly idenfy the employee’s
last day at work and terminaon payments?