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The implied Duty of Fidelity

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Lawdit Solicitors - Expert Author

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8 March 2012

An implied duty of fidelity may be relied upon by an employer to prevent an employee from carrying out various activities that prove to be competitive for the employer. Competitive activities may include carrying out other work whilst employed, poaching customers or suppliers. However, it is not simple to determine whether or not an employee has breached the duty of fidelity as many factors have to be taken into account to determine such a breach. Some of which are and not limited to:

- Whether the particular work is being carried out during or after work?

- The nature of the work being undertaken.

- Whether work undetaken has a significant impact on the employers work?

- Whether there are express terms relating to the duty of fidelity

As an employee, the implied duty of fidelity requires employees to devote the whole of their time and attention to the job they are employed to do. Therefore, an employee who carries out work which is not related to the work that he is supposed to carry out during his working hours will lead to a breach of the duty of fidelity.

On the other hand if the employee carries out other work outside of working hours, even though it is in direct competition with the employer he will not be in a breach of the duty of fidelity unless the duty is expressed in the contract of employment. However the work must not be of a nature that would cause significant harm to his employer. For example:

In the case of Hivac Ltd v Park Royal Scientific Instruments Limited, 5 employees of H Ltd started working for P Ltd on Sundays, H ltd's sole competitor. An injunction was sought and granted after the court of appeal held that the employees were in breach of their implied duty of fidelity and that it was not consistent with their employment contracts that they were doing something in their spare time that would 'potentially conflict great harm on the company.'

In contrast was the case of Nova Plastics Limited v Froggatt where the court of appeal upheld an unfair dismissal claim after an employee was dismissed after the employer found out he was working for a competitor. The court of appeal concluded that 'the nature of the work the employee did was not something that could contribute very seriously to any competition and that the employee was not in breach of the duty of fidelity.'

In order for employers to prevent employees undertaking spare - time activities, the duty of fidelity and restriction of such activities should be expressed in the contract of employment.

Aneela Akbar can be contacted at aneela.akbar@lawdit.co.uk Lawdit is a commercial law firm based on Southampton with associate offices in London, Malaga and Rome


About the Author

Lawdit Solicitors offer services and advice for litigation, commercial contracts, Intellectual Property and IT legal agreements. We are experts in commercial law with a heavy emphasis on Intellectual Property, Internet and e-commerce law. Lawdit is a member of the International Trademark Association, the Solicitors' Association of Higher Court Advocates and we are the appointed Solicitors to the largest webdesign association in the world, the United Kingdom Website Designers Association.



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Article Published/Sorted/Amended on Scopulus 2012-04-18 13:15:04 in Legal Articles

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