Employee duties and restrictions on competition

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This overview outlines the Practice Notes in the subtopic 'Employee duties and restrictions on competition'.

All employees are under a duty of fidelity to their employer, which is also known as the duty of good faith, or of loyalty.

Fidelity is a broad concept containing a number of more specific duties, some of which overlap both with each other and with the duty of trust and confidence:

  1. •

    to behave honestly

  2. •

    not to work in competition

  3. •

    not to make a secret profit

  4. •

    to disclose information

  5. •

    not to misuse confidential information

Some employees will also owe additional, more onerous duties as a result of their being a fiduciary, or being a fiduciary in respect of some part of their duties. These may include:

  1. •

    a duty to act in the best interests of the employer, ie to act selflessly and with undivided loyalty, which in turn comprises:

    1. ◦

      the duty to account for all property and profits made from the employee’s position as a fiduciary (the ‘no profits’ rule)

    2. ◦

      the duty not to let their own interest and that

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Latest Employment News

Supreme Court rejects attempt to modify fiduciary profit rule (Rukhadze and others v Recovery Partners GP Ltd and another)

A panel of seven justices sitting in the Supreme Court has unanimously declined to introduce a ‘but for’ causation test that would have allowed fiduciaries to retain profits if they could show they could have made them without breaching their fiduciary duties. The Supreme Court’s decision, featuring a leading opinion from Lord Briggs and three concurring judgments, maintains that profits made by fiduciaries are held on constructive trust for their principal from the moment they are made, regardless of whether they could have been obtained legitimately.

Extended visa checks put companies at risk, lawyers warn

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Cabinet Office publishes updated Civil Service settlement agreement forms and guidance

The Cabinet Office has released updated versions of two key documents relating to Civil Service settlement agreements: the Data Capture Proforma for Special Severance Payments and Confidentiality Clauses, and the application form for ministerial approval of confidentiality clauses. These documents form part of the guidance framework for settlement agreements, special severance payments and confidentiality clauses across Civil Service organisations and their arm's length bodies. The updates replace previous versions from July 2019.

HMRC beats locum doctor’s employee tax status appeal

Law360: The Upper Tribunal (Tax and Chancery Chamber) has upheld a First-tier Tribunal (FTT) decision that a locum urologist's contract with a hospital qualifies as employment for tax and National Insurance contributions (NICs) purposes, despite an earlier decision misconstruing the nature of the arrangement.

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