BlandsLaw - Conflict of Interest and Secondary Employment
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Conflict of Interest and Secondary Employment

A recent unfair dismissal case has highlighted some interesting issues in relation to secondary employment.

In Jim Bril v Rex Australia Limited t/a K & K Glass [2015] FWC 884, the employee Mr Bril was a truck driver for K&K. Mr Bril undertook paid work for a customer of his employer while on a period of annual leave. The General Manager saw Mr Bril at the customer’s workshop while he was on annual leave and then upon Mr Bril’s return from leave he submitted what was held to be a forced resignation following a meeting with management.

Mr Bril lodged an unfair dismissal application and was awarded just over $12,000 in compensation.

The initial question to be resolved was whether Mr Bril had voluntarily resigned or whether the actions of the employer had forced him to resign his employment and therefore amounted to a dismissal. On the evidence it was held that Mr Bril was dismissed as he was essentially given an ultimatum upon his return to work that he either resign or be terminated.

In relation to whether there was a valid reason for the dismissal, Vice President Hatcher made the following important comments:

-       The employee was under no obligation to disclose the reason, or all the reasons, for his annual leave;

-       The work performed for the customer was not in the same field of business and would not otherwise have been work that he would have done for them; and

-       The employee was not required to disclose that he was engaging in such work.

Consequently, there was neither a conflict of interest nor a breach of the implied term of good faith. The employee was entitled to take annual leave without disclosing the reasons to his employer and his secondary employment was not a breach of the terms of his employment with K&K and could not form the basis for his termination.

Lessons for Employers

Employees are not required to provide reasons for the taking of annual leave. It will depend on the facts but employees may be able to engage in secondary employment including, as is demonstrated by this case, while on annual leave.

Whether or not employees can undertake other employment will depend on a number of factors including the nature of the work, who the work is with and the terms of the applicable contract (if any).

If secondary employment is likely to be a problem, you may want to consider including a conflict of interest clause in your employment contract for new employees. A conflict of interest or secondary employment clause can include that permission is sought prior to engaging in other paid work and/or prohibits employees from undertaking certain types of work while they are employed in that role (provided it is reasonable and there is a legitimate business interest to protect).

Sarah Waterhouse

Solicitor - BlandsLaw

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

 

 

 

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