Implications of terminating an employment Contract
An employment contract is an informal (oral) or formal (written) legally binding agreement between an employer and an employee specifying the legal rights and obligations of each party. (Stone 2006 p.682) This essay will discuss the implications of having no written or no relevant employment contract for both the employer and the employee, it will also discuss the implications that can arise once employment has been terminated. Specifically, Four main points will be identified and researched to help Kings St Industries formalise this situation. These main points are; How can the company successfully terminate Bert’s employment? What restrictions apply to Bert if he leaves and joins a competitor? What happens if Bert provides confidential marketing information to a new employer? And, what happens if Bert lures away and hires other staff currently employed by King Street Industries?
In order for King St Industries to terminate Dooleys employment successfully they must determine the nature of the dismissal. A dismissal by where there has been no serious misconduct by the employee and there has been a serious downturn in business is referred to as an employment redundancy. “Redundancy is a dismissal based on the employers commercial or economic decisions regarding the management of the business, it is the termination of an employment contract due to the permanent elimination of a position.” (Stone 2006, p. 132)
A well drafted and documented employment contract can minimise employment disruptions caused by disgruntled ex-employees, both in terms of public relations and potential litigation. (Stone 2006, p. 113) However, by Law in cases such as King St Industries where there ...