Tuesday, August 25, 2009


Yo folks! Today I share with you a very good article by Bhag Singh on your obligations after you quite your job. Worth thinking over, for those who are contemplating making the leap.

You can view the original version here.

Quitting your job

Where an employees is engaged for a fixed term, refusal to continue does not always bring the contract to an end. The employee may leave but other obligations remain.

THE days of slavery are long over. Today a person only works if he wants to. Increased protection of the rights of employees has gone hand in hand with development and progress. A vast array of laws protect employees.

However, does that mean that an employee can do whatever he wishes?

An employment relationship is a contract between the employer and the employee. The employee must be at the stipulated place and time to perform his work. On the other hand, the employer must remunerate him. Failure to do so would be a breach. This would entitle either party to terminate the employment.

The law requires an employer to give due notice unless the breach warrants instant and summary dismissal. Even then, the law expects the employer to give an employee opportunities to rectify shortcomings.

What if an employee walks out of his job and does not turn up for work thereafter? Can an employer stop this or do so if the employee seeks employment with a competitor next door? Such a situation would be a cause for concern to the employer.

An employee who joins a competitor next door can give the competitor an advantage because he takes along with him knowledge and information which will be useful to the new employer.

Specific performance

An employee who does not wish to continue employment cannot be compelled to do so. This is because the remedy of specific performance is, as a matter of law and policy, not granted against an employee.

Specific performance would be an order directing the employee to continue to work for the employer. Failure to comply would be contempt of court.

Courts have long acknowledged that it would be impractical for such an order to be made. As was noted by Sir Robert Megarry in Howard vs Pickford Tool Co Ltd: “If without just cause a servant who has contracted to serve for a term of years refuses to do so, it is easy to see that the court is powerless to make him do what he has contracted to do.”

His lordship added: “Neither by decreeing specific performance nor by granting an injunction can the court make the servant perform loyally what he is refusing to do, however wrongfully. Such an order quite apart from its impracticability would also be self-defeating if carried out to its logical conclusion.”

The judge said that if such an order were to be made, the ultimate sanction for disobedience being committal to prison would far from forcing the servant to work for his master, effectively stop him from doing so.

But why should the court’s inability to make an employee work for his employer mean that as soon as the employee refuses to do so, the court is disabled from restraining him from committing any breach however flagrant his other obligations during the period of his contract?

The manner in which the employee’s departure is dealt with can have significance. If the contract allows the employee to terminate the contract, then his doing so brings it to an end.

However, where the employee’s resignation is not accepted, it is a repudiation which on failure of the employer to accept, results in the contract subsisting. In such a situation, the other obligations under the agreement continue though the employee leaves.

There is the view that an employee cannot thereafter be restrained from working elsewhere. Such a belief is founded on Section 28 of the Contracts Act 1950 which provides that “every agreement by which anyone is restrained from exercising a lawful profession is to that extent void.”

Although the court is unable to order specific performance, it could restrain the employee from committing a breach of an express or implied negative undertaking because the contract of employment is still in being (as the repudiation of the employee in refusing to work has not been accepted by the employer).

This is because Section 54 of the Specific Relief Act 1950 states: “Where a contract comprises an affirmative agreement to do a certain act, coupled with a negative agreement, express or implied, not to do a certain act, the circumstances that the court is unable to compel specific performance of the affirmative agreement shall not preclude it from granting an injunction to perform the negative agreement”.

However, this right to apply for an injunction is subject to a proviso that the applicant himself has not failed to perform his obligations under the contract. The existence of this proviso clearly contemplates that the contract is subsisting.

If it were the law that a contract could be terminated merely by the repudiation by one party without acceptance by the other, then because the contract had come to an end, there would not remain obligations under the contract to be performed.

Case of restraint

In Broom (Selangor) Rubber Plantations vs R.H. Whitley, the defendant, Whitley, entered into an agreement to serve the plaintiffs as an assistant on their rubber estate for a period of three years and eight months. Whitley unilaterally terminated the employment saying that he had been offered a much better position.

The plaintiff sought an injunction which was granted and it was said: “The plaintiffs have performed the contract so far as it is binding on them. The defendant threatens to break his affirmative agreement with them. I find that there is on the part of the defendant an implied negative agreement, viz not to enter the service of any other employer until the expiration of his period of service with the plaintiffs until the end of the contract period.”

It will be seen that whether an employee can be restrained from working elsewhere will depend on the terms of the contract. It also involves a consideration of the manner in which the employment contract is brought to an end.