Terms implied into a contract of employment by the common law
Duty to maintain mutual trust and confidence.
Neither employer nor employee should act in a way to damage the mutual trust and confidence which ought to exist between them.
Employees' duty to obey reasonable and lawful orders.
The employee must obey the employer's reasonable and lawful orders. An order relating to tasks outside the employee's normal job description may depend on the status of the work, whether it is a temporary or permanent requirement, the company's financial position and even the job market. An extension of this is a duty to co-operate with the employer.
Fiduciary duties of employees.
The general fiduciary duties arising under the contract of employment can be broken down to a number of more specific duties.
Duty not to compete.
In Hivac Ltd v. Park Royal Scientific Instruments Ltd [1946], a skilled employee was restricted from working, even in a spare-time capacity, for an employer's rival.
Duty of confidentiality. An employee cannot use for his own benefit or communicate to others any confidential information which came to his knowledge during his employment. In Faccenda Chicken Ltd v. Fowler [1987]; the court identified three categories of information acquired during the course of their employment. The first category was so readily available that it was never confidential and could be freely communicated even during employment. A second category of information was confidential during employment but employees were entitled to use the information to their own benefit after leaving employment. The third category consisted of information of such a highly confidential nature that the employee could be restrained from using or communicating it even after his employment was terminated. In the case in question, the court held that information concerning clients of the past employer was within category two. In this case the defendant was dismissed by the plaintiff for allegedly stealing chickens. He then, together with other ex-employees of the plaintiff, set up a rival operation supplying chickens to past clients of the plaintiff using sales information – client list and requirements, delivery routes, times and pricing.
An important exception relates to 'whistle blowers' who reveal information in the public interest. In Initial Services v. Putterill [1968]; a employee was not in breach of confidentiality in revealing that his employer was involved in an illegal price fixing scheme, and in Lion Laboratories v. Evans [1985] employers were refused an injunction when an ex-employee revealed that a breathalyser was inaccurate.
Duty not to make secret profits. An employee is not allowed to make a secret profit from his employment by using the employer's name or equipment for his own purposes or deriving a personal benefit from confidential information gained as an employee. Where the secret profit is innocent, the employer will be able to recover the profit from the employee but not dismiss him or refuse to pay remuneration. However, where the secret profit is not innocent, as where the employee takes bribes from suppliers, the employer will be able to dismiss the employee.
Duty to disclose misconduct. In Sybron Corp v. Rochem [1985], it was established that a senior executive has a duty to report misconduct of other employees to the employer. In this case the employee was the European operations manager of an American company who was given a generous payment by the company on taking early retirement. It was later discovered that the employee, in conspiracy with other employees, had been defrauding the company for years by diverting business to a rival company set up for the purpose. The court held that his breach of duty to disclose the misconduct of the employees (which would have revealed his own complicity) entitled the employer to set aside the compensation payments.
Duty of care. The employer must: (i) take reasonable care for the safety of the employee; (ii) provide safe tools and equipment; (iii) provide a safe place of work and a safe system of work; and (iv) ensure that the employee has properly skilled co-employees. Employers are liable for injuries to employees due to defective equipment, even where the defect is attributable wholly or partly to a third party, that is, the manufacturer of the equipment.