Don’t go breaking my heart – what to do when key employees leave your business

Oct 1, 2018

They’ve been with you from the start, through the good times and the bad. They know your business inside and out. But what happens when key employees resign?

Get it right from the outset

The key to ending any business relationship amicably is to ensure that rights and responsibilities are established at the start in a well worded employment agreement and workplace policies.

Even if you have employment agreements in place, it is important to review them regularly. The annual performance review is an opportune time to ensure that your employment agreements still reflect the key terms.

An employment agreement signed when an employee starts with your business in a junior role will generally not be sufficient to ensure that it protects your business as they move to senior roles. Confidentiality clauses and restraints, for example, may need reviewing and tightening. The small investment of reviewing your contracts is likely to offer you significant protection and savings later on.

Protect yourself at the end

If a key employee resigns, know your rights. Is there an enforceable restraint in their employment agreement? Can you pay out their notice period rather than have them attending work?

If you believe an employee has misused or is likely to misuse confidential information, act quickly. There are a number of circumstances where it is possible to seek an injunction from the Courts to prevent the misuse of confidential information.

If you have evidence that an employee or former employee has stolen from your company, you may be able to issue proceedings seeking orders to recover the stolen company property, or damages (monetary relief) to the same value. Where there is a risk that money may be removed from the jurisdiction, you may have grounds to seek a freezing order. A thorough investigation, most likely involving forensic accountants, would be required before you could consider such a step.

The key though is to get it right at the start. Are your employment agreements and policies up to date?

If you would like to discuss any aspect of protecting your business, please contact Heather Richardson.