One key element of the employment contract is the importance of CONSIDERATION which provides that parties to a contract must enjoy some benefits, rights or interests in a mutually beneficial manner as a direct consequence performing some actions, or in carrying out specific responsibility or assignment.
It has been noted, however, that consideration can be an inducement for entering into a non-competition Restriction Covenants. Unfortunately, they are often absent in most employment contracts, particularly in Nigeria.
When a staff undertakes to abide by the doctrine of non-compete or non-solicitation for a specific period of time, it is, therefore, required that due considerations be given by the employer or demanded by the employee.
The commonly recognized considerations will include:
This is a practice that is aimed at protecting the interest of the employer without causing the employee pay loss, non-payment of salary or yet ensures that restrictive covenant is complied with.
It provides that the employee whose employment has been terminated with notice period, or an employee that resigned his or her appointment or someone on suspension pending a disciplinary proceeding will not be allowed access to the workplace or have access to current privileged information yet will continue on the employer payroll on full salary or permitted to work from home and prevented from taking up a new appointment during such period.
This practice originated from the British Civil Service and has gain currency in some part of the world.
INVENTION ASSIGNMENT AGREEMENT
This is an agreement that cedes the right of ownership of inventions or discovery made by an employee during the period of his or her employment to the employer. This agreement portends that such inventions were consequent upon the employment relationship using the employer facilities, resources and time.
It should be noted, however, that such discoveries or inventions will exclude inventions made and listed before the employee joins the organization and things invented at his own time outside the workplace.
It is my opinion that before such agreement is signed it is of utmost importance that the employee seeks the services of a lawyer or professional HR practitioner for guidance and advice.
PAY-BACK CLAUSE AND EMPLOYEE REIMBURSEMENT AGREEMENT
The payback agreement requires an employee who joins a company for a limited time to refund the employer part or all of the cost invested in the training of such an employee when he or she leaves within a limited time of joining the organization.
On the other hand, an employee would also be reimbursed expense incurred in attending training authorized by the company for which he has not be paid if such agreement exists in the organization.
The case of Overland Airways Limited v Captain Raymond Jam.
In this case, the pilot was sponsored by the company to attend training upon the assumption of office with the provision that he will serve the company for a minimum of 4 years. After the training, however, he attempted to resign from the employment of the Overland Airways.Â The National Industrial Court in its judgment held that the restrictive agreement is enforceable and reasonable.
POST-CONTRACTUAL NON-COMPETITION AGREEMENT
This provision holds that for a non-competition agreement to be valid there must be clear provision for compensating the employee. In Germany, the Hamm Labour Court pronounced a 50% salary to an ex-employee during the period of restriction.
The Spanish law, Article 21.2 of the workers Statute provides for financial competition in drafting non-competition clauses. Belgium, Poland, Italy (article 2125 of the Italian Civil Code). The French employment clearly support this as can be seen in a July 10th July 2002 judgment by the French court of Cassation, which stated that non-compete clause can only be legitimate only if it makes provision for competition.
However, the Nigerian Labour Acts or the Employee Compensation Act 2010 is not clear on this as such responsibilities are left to the employer and the employee to negotiate and agreed on.
The requirements for the protection of employer trade secrets against a disgruntled employee or having such information in the hands of competitors has given serious legal backing for the inclusion of Non-competition Restrictive Agreement in an employment contract. However, it is the opinion of this writer that such agreements must be treated within the ambit of relevant laws and international best practices.
It has been recommended that to be enforceable restrictive covenants must satisfy the burden of enforceability as listed in the proceedings page of this article. Lastly, it would be totally unjustifiable to expect compliance with a non-competition clause when consideration is not given to proper documentation and reward to the ex-employee.
I have made these recommendations for enforcement and what the employee should also note before signing a non-compete agreement.
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