ERA orders $7,000 penalty after worker commenced employment during paid garden leave
The Employment Relations Authority (ERA) ordered a senior financial officer to pay a $7,000 penalty to his former employer after he breached a settlement agreement by commencing employment with a competitor one month into a three-month paid garden leave period.
The worker sought enforcement of the settlement to receive two lump sum payments that the employer withheld, while the employer counterclaimed for penalties alleging the worker breached multiple settlement terms, including starting competitor employment during garden leave, accessing digital files for improper purposes, and disclosing confidential circumstances.
The ERA found the worker breached the settlement by starting new employment without consent, but dismissed claims regarding file access and confidentiality disclosure. The Authority awarded the penalty entirely to the employer, given that the breach triggered the long-running dispute.
The worker's employment ended on terms contained in a Record of Settlement signed by parties and certified in June 2024, providing for employment to terminate on 30 September 2024 after a three-month garden leave period.
During garden leave, the worker would continue receiving full pay and benefits while remaining bound by obligations and restrictions in his employment contract, including remaining available to assist with handover activities.
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