Your Advocate
This week Your Advocate is Barrister Omar Khan Joy, Advocate, Supreme Court of Bangladesh. He is the head of the chambers of a renowned law firm, namely, 'Legal Counsel', which has expertise mainly in commercial law, corporate law, family law, employment and labor law, land law, banking law, constitutional law, criminal law, IPR and in conducting litigations before courts of different hierarchies. Our civil and criminal law experts from reputed law chambers will provide the legal summary advice.
Query
I worked three years with a private company which is involved with Jute export. I had an agreement (appointment letter in official pad) of not being involved (neither disclose information nor job/business) with Jute sector for 2 years after leaving the company. There was a mistake in salary clause, it is written Tk. 20000(Taka twenty thousand)). The actual salary was Tk.12000 in the beginning. I suffered a lot during my service, worked at odd time till 9,10, 11pm, faced some discrimination like afterward I got promotion as asst. marketing manager but pay was less than some executive in the company. The company also under invoice some times and directly transfer the extra value from foreign to Singapore (Is it money laundering?). In these circumstances I left the job and become involved with another jute company. Now my ex-employer started threatening me for legal action/notice. After leaving the company the Managing Director has to come to know that I have become involved so he sent me an email asking about it. I replied straightly admitting the truth. Because I believe I have the fundamental right to work any sector which is not illegal. I know that any law conflicting with fundamental right of constitution is void. Now I am a bit worried about his threats. Can he do something against me? What he can do so far? I would like to know what the law says on this regards. Please let me have an answer.
An ex-employee
Dhaka.
Response
I would like to thank you very much for asking me to provide opinion regarding the contractual matters related to your previous employment. Having gone through your query, we have understood that you are willing to know whether your previous employer has any cause of action in consequence of his threat.
Considering the term of the agreement preventing you from being involved in any subsequent job in similar sector for two years after leaving and concerning non-disclosure of information related to the job or business appears to be one related to restraint of trade. In English law, a contract which is in restraint of trade is void and unenforceable, unless it can be shown to be reasonable. As far as the restraint of trade within the context of a contract of employment is concerned, the reasonability may be determined by the few relevant factors which include public interest, place, time etc. On the other hand, as far as the local law is concerned, the Contract Act of 1872 is the one dealing with such situation.
The Contract Act 1872 specifically deals with Restraint of Trade and renders any agreement preventing anyone from carrying out any lawful profession, business void subject to an exception concerning the selling of good will of a business. Besides, considering the case law providing interpretation of this section it appears that employment contracts, whereby the employer restricts the right of the employee to join a competitor or set up similar business falls within this section and consequently void. Such restraint cannot operate beyond the employment contract period. Therefore, if your former employer goes for any action on account of your new job, it is likely to be void as you entered into the new job after leaving the earlier one.
However, the employer is entitled to protect trade secrets and confidential information provided the worker has access to trade secrets. Thus, the clause of the agreement concerning non-disclosure of information is likely to be valid. Disclosure of information may take place in many ways even involving any third party. Therefore, in case of any loss or damage resulting from such disclosure, your former employer may go for an action for breach of contract claiming damages. Much depends on the term containing in the employment contract as the breach of such terms are often considered as serious. Even if any such term is not expressly contained in the agreement, it may even be implied.
As far as the mistake in the salary clause is concerned, it appears that you have performed your contractual obligation by accepting the salary although it is not clear how did you receive it. In law of contract acceptance is possible by way of conduct.
Considering the issue of discrimination that was inflicted upon you, it is not entirely clear. However, such discrimination may amount to the breach of the contract which depends on the terms of the employment contract. You may have the option of having recourse to the competent court in case there is any possible cause of action.
Hence, it may be opined that as you are no longer in that private company, the clause concerning with Restraint of Trade is no longer effective and any action taken by the Managing Director relying on such clause is likely to have no prospect of success. But care must be taken as far as confidential information is concerned.
I hope that the above reply shall help you to understand your position and to take the appropriate next course of action(s). Please feel free to revert back to us, should you require any further clarification.
For detailed query contact: omar@legalcounselbd.com.
