Duty of Fidelity (good faith)

  • Duty of Fidelity (good faith)

An employee owes an employer a duty of trust and confidence, so that

  • During their employment
    • They will not compete with the employer;
      • In Nova Plastic Ltd v Carpet cleaning Glasgow (1982), an odd-jobs man worked for a competitor in his spare time and was found not to be in breach since he was not actively damaging his employer’s business, BUT
      • In Hivac Ltd v Park Royal Scientific Instruments (1946), 5 skilled manual workers who worked for the sole competitor on Sundays were found to be in breach.
  • They must not allow their self interest to conflict with the employer’s
  • They must respect their employer’s trade secrets and confidential information.
      • By not making/memorising lists of customers before leaving
      • Not inducing employees to break their contracts
      • Not working personally for customers of their employer

 

  • After their employment;
  • A lesser duty
  • This only covers trade secrets and highly confidential information.
      • Faccenda Chicken Ltd v Fowler (1986) held that the following was important in deciding whether the information could be revealed.
      • The nature of the information
      • The nature of employment
      • Did the employer tell the employee that the information was confidential?
      • Can the information be isolated from other non-confidential information which the employee was free to use?

 

NB The implied terms do not give the employer as much protection after the employment has ended and are usually reinforced with express terms especially with regard to;

        • Competition
        • Solicitation

 

Restrictive Covenants  (‘covenants in restraint of trade’)

  • Non-competition
  • Preventing ex-employees from setting up in competing business, OR
  • Working for a competitor
  • A time period of one year or more can only be justified in exceptional circumstances.
  • The area in which an employee is barred from working must be no wider than the area in which the ex-employer does business.
  • The business from which the employee is barred must be no wider than the business in which he was employed.