Employers: Don’t Make the Mistake of Looking for ‘Bullet Proof’ Contracts or Waivers

Mick came in to see me last week. He had had enough.

’Enough is enough’, he barked.

Mick is a small employer. Old fashioned, grim, swarthy.

He had enough of this employment law nonsense. He was looking for a way to ensure that his workers would stop giving him grief, and ‘cop themselves on’.

Or, as he put it, ‘show up and shut up and do what they’re told’.

‘Now? Now, they’re always going on in such a bloody tiresome way about their rights..paternity this, maternity that, force majeure, bereavement leave, unfair dismissal, bullying, harassment, health and safety. In the good old days if a lad came and complained about bullying I’d tell him to grow a pair of balls and sort it out in five minutes at the back of the shed..’

‘Mick, my friend, take a seat.That ship has sailed’, I said.

When he calmed down Mick made it clear he wanted two things:

  1. A “bullet proof” contract of employment
  2. A form or agreement that an employee would sign when he was leaving promising he would not bring any claims against Mick after he was gone.

Bullet Proof Contract

What Mick wanted was a contract that set out exactly what the employee could and couldn’t do, and it was heavily loaded in favour of Mick and the needs of his business.

I had to explain to him that I could help him with that but it would not be bulletproof. I told him that regardless of how he and a future employee might negotiate an agreement, and even if the employee went ahead and signed it, the employee still had legal rights and entitlements, no matter how one sided it was drafted.

Therefore, no matter what was put in the contract, no matter how agreeable (or naive) the new employee was, no matter how keen he was to work for Mick (or anyone), the new employee had statutory rights.

These rights are set out in the statute books in pieces of legislation such as the Unfair Dismissal Acts or the Organisation of Working Time Act or the Redundancy legislation or the Payment of Wages acts.

He also had rights to fair play in raising grievances in the workplace or how any disciplinary procedure might be carried out, I told him. These were set out in statutory instruments. I could see Mick visibly wincing, and the blood draining from his face.

On top of that, I had to tell Mick that employees had rights arising from EU law, common law, and the constitution. I could see Mick visibly perking up when I mentioned “Bunreacht na hÉireann”.

Nevertheless, I had to advise Mick that no matter what way the contract was drafted the employee had protections and rights which were imposed on the employment relationship, whether he liked it or not and whether the employee was agreeable or not.

And he had to just get over it and perhaps improve his relationship with his staff, starting with how he viewed them.

A Leaving the Employment Indemnity/Waiver

He also wanted some sort of a one page, straightforward, easy to understand form which would do two things:

  • Prevent the employee from working for any competitors or starting his own business
  • Promise not to bring any claims against Mick.

I explained to Mick that if he wanted to try to prevent former employees from working for competitors or starting their own business nearby or stealing Mick’s customers or staff he needed to provide for this in the contract of employment. He would need a restrictive covenant which would only be enforceable if it was reasonable.

I had to break the news to him that looking for an employee to sign such a form when he was leaving Mick was too late, and akin to bolting a stable door when the horse was long gone.

As for promising not to bring any claims against Mick, I asked Mick to think about this: ‘why would an employee do that? Why would he give up those rights without some incentive? Would he not be asking, if presented with such a form, what was in it for him?’

In short, if he wanted the employee to waive his rights in respect of claims arising from the employment he’s better get out the cheque book and provide an incentive. Because, otherwise, it would be an act of folly for an employee to sign such a form.

And even if he did it could be overturned and set aside later on as he could claim that he did not know what he was signing and had no legal advice at the time.

Conclusion

Mick learned that the answer to his staff problems was in improving his attitude and approach to his employees. This would lead to a better atmosphere in the workplace, lads taking more care with his equipment and vehicles, a better working relationship, and less chance of claims against him.

And if there were claims against him?

Provided Mick did not ride roughshod over their rights, give them contracts of employment that were fair and lawful, maybe have a staff handbook in the workplace, too, to deal with discipline and grievances and bullying, he would have a far better chance of successfully defending any claims that arose.

Or even make it less likely that claims would be brought once the employee learned the chances of success were not great.