Idealogical nonsense

The Employment Relations (Restraint of Trade) Amendment Bill is an example of pointless and unnecessary legislation being rushed through Parliament.

The law is currently well-settled in this area.

A restraint of trade is unenforceable unless the Employment Court decides otherwise. This reflects the reality that every worker should have the right to earn a lawful living, but if that worker wants to earn an un-lawful living, by stealing clients, IP, confidential information, or such like belonging to their boss – then the court will say no, that is unlawful.

This bill has decided only wealthy people should be bound by a restraint of trade meaning if this bill became law, it could only apply to employees earning more than three times the minimum wage. That is currently just over $68 per hour or around $2700 per week, and the maximum period a restraint could last, is six months.

And if you do want to impose a restraint of trade on one of your highly paid employees, you have to pay them half of their average weekly earnings for the length of the restraint. So (using the above figures) that is just over $1300 per week for six months – simply to enforce the restraint.

What absolutely mind-numbing ideological nonsense. This bill completely removes the focus on what restraints of trade are about – preventing unlawful competition – and instead would have you believe only wealthy people need a restraint of trade.

This bill simply makes it uneconomic for most employers to try and protect their business through a restraint of trade. Thankfully we have an election coming up soon.If I can help you with employment law, email me at paul@pblaw.nz.