25 May EMPLOYERS TO CONSIDER THE IMPLICATIONS OF CHANGING TERMS OF EMPLOYMENT WHEN EMPLOYING ACROSS MULTIPLE JURISDICTIONS

In Qantas Airways Ltd v Tohrlach [2021] NSWCA 48, Qantas appealed a decision of the New South Wales Supreme Court seeking to have a post-employment restraints dispute determined in Australia after an employee had commenced proceedings in Singapore seeking declarations the restraints were void and unenforceable.

Specifically, the dispute arose when a former employee of Qantas was seeking employment with a rival airline. Qantas argued that the former employee knew of strategic and commercially valuable information which could be used by the competitor and Qantas commenced proceedings in New South Wales to enforce post-employment restraints and obtain an anti-suit injunction preventing the employee from continuing the Singapore proceedings.  The issue became a jurisdictional issue because the Employment Agreement (“the Agreement”) contained an exclusive jurisdiction clause limiting the jurisdiction to Singapore and an entire agreement clause. 

The Agreement was governed by the law in force in Singapore and the parties agreed to submit to the exclusive jurisdiction of the Courts of Singapore. As Qantas operates across many jurisdictions, the employee had worked in Singapore and then been reassigned to Japan. Following reassignment, the employee signed an Assignment Letter (“the Letter”) which confirmed that he continued to be subject to the terms and conditions of the Agreement, except as amended by the Letter. The Letter did not change the Agreement’s exclusive jurisdiction clause. The terms of the Letter clearly stated the Letter was to be read in conjunction with the Agreement.

A Deed Poll (“the Deed”) was attached to the Letter. The Deed contained post-employment restraints and identified the laws of Japan as the governing law but the Deed did not contain an exclusive jurisdiction clause or an entire agreement clause.

Qantas argued that the Deed was an independent document and was legally binding, arguing that New South Wales Court Justice Hammerschlag wrongly found the Deed was “one of a coherent and congruently operating suite of three agreements”. New South Wales Court of Appeal Justice Bell took the view that it needed a “proper construction of the clause” and noted that the Deed was “not inconsistent with the employment agreement jurisdiction clause”. Justice Bell acknowledged the Deed did not contain an entire agreement clause and therefore, the Deed did not supersede previous agreements. Justice Bell stated that “Qantas is a sophisticated commercial operator and it would have been open to it to include a clause in the deed poll varying the employment agreement’s exclusive Singapore jurisdiction clause”. Although the Deed had a different jurisdiction, the Letter referred to the continuation of the terms of the Agreement. 

The appeal was dismissed with costs.

Practical Implications

This decision highlights the importance that multi-jurisdictional employers should ensure that any amendments or changes in employment terms are consistent across all employment agreements and documentation.  Should businesses wish to invoke new terms, this should be expressly provided in any later documentation.

Employers should also pay attention to the operation of exclusive jurisdiction and entire agreement clauses. A court will consider the whole arrangement between the parties in deciding what is applicable.

If the above raises any concerns about your contract documentation, please get in touch with the team at HR Law for advice. 

The content of this article is intended to provide a general guide to the subject matter.  Specialist advice should be sought about your specific circumstances.