NSW Supreme Court has ruled an Employsure contract is not enforceable

If you have clients who are unhappily locked into an Employsure contract, you may want to share this news article with them.

Employsure sued their client, Zintix, after they attempted to quit their contract with Employsure ceasing to pay their instalments required against the contract 8 months after signing.  Employsure pursued legal action, demanding payment of $18,463, stating that the contract clause (c) required that non-payment would “result in the total balance outstanding becoming payable immediately in full”.  Whilst initially being successful with their claim in the NSW Local Court, however, when Zintix appealed this decision to the NSW Supreme Court, the result was quite different.

Under contract law, a key principle is that a penalty clause is “void” and therefore not enforceable.  The NSW Supreme Court ruled that the clause (c) in question was indeed a penalty clause and was therefore unenforceable.  The Court further ruled that Zintix would not have to pay the claimed money and Employsure would have to pay their customers legal expenses.