The implied Duty of Fidelity
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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.
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
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
firstname.lastname@example.org 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
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Article Published/Sorted/Amended on Scopulus 2012-04-18 13:15:04 in Legal Articles