employment law in uk

The relationship between employer and employee on a continuing bond of trust and confidence. In this context, the terms" duty of loyalty "and" fiduciary duties "are in relation to employees and directors. These terms have been many years, but the definition of the scope of tasks remains a challenge.

All employees owe a duty of loyalty to their employer that they act in good faith, in executing their contractual obligations. In addition, directors owe "fiduciary duties", requiring them to act positively in the best interest of the company and, in contrast to ordinary workers, even their own misdeeds. Directors' fiduciary duties differ from and go beyond the duty of loyalty to all employees.

In an interesting new development, two similar cases, which provide useful guidance on the scope of that implicit tasks and the extent to which they may be an employee who is preparing to go into competition with his employer. The judgments, while at other conclusions on their facts, which provide a useful insight into this area of law.

The Sliding Scale

In Shepherds Investments Ltd v Walters, the Court of Appeal pointed out that the behavior of sliding scale in relation to an employee of the preparations for the establishment of a competing company. The exact date on which such an illegal action (ie, against the duty of loyalty or a duty of care) is about the circumstances of the particular case. At one end of the scale, only a decision to set up a competing company for a certain time in the future and discuss it with friends and family "not as a violation. At the other end of the spectrum, "Advertising customers of the company ... or the effective exercise of trade by a competing company" would be a clear breach of the duty. The area between was left open for future court interpretation.

On the facts of this case, directors and senior executives were in breach of their fiduciary duties and obligations of loyalty by promoting their own competing company while still employed. It is interesting that the court was quite prepared to extend the scope of "fiduciary duties" for executives who are not officially directors (ie staff parading as "Sales Director" or "marketing", etc., but who have not yet registered, officials) . It could be a surprise for those concerned that the designation of such a title carries with him the more stringent duties as trustee.

The importance of preparation

In Helmet Integrated Systems Ltd v Tunnard, the Court of Appeal went one step further and describes a "middle-ranking" senior seller as a trustee on the basis of its activities - it is part of his duties to advise on competition with the work and employers are depending on him to respond to these claims. In essence, therefore, the test for a "trustee" is a function and not as a status.

In this case, workers have the preparatory steps while remaining employees, to market his own safety helmet in competition with his employer. Despite the decision that the employee against the fiduciary obligations, the court did not accept that these preparatory steps are sufficient to create a breach of these obligations. According to the court: "Clear words are needed to ensure the freedom of ordinary workers who are considering setting up in competition with his former employer" and wish "to the viability of the concept."

Comment

These cases are made by the employer for the extension of fiduciary duties to a broader range of employees. However, even the cases, the importance of a clear contractual drafting. Although many employers, even after termination restrictive covenant in their standard contracts of employment, a restriction on "preparatory acts", while still in employment is much less common.

If you need assistance in the preparation or implementation of these restrictions, the Michelmores Employment-Team.

AND IN OTHER NEWS:

Legislation comes into force in April 2007 ...

From 1 April:

The basic rate of maternity pay, paternity and adoption pay money wage increases to € 112.75.

From 6 April:

Statutory sick pay rises to £ 72.55

The Sex Discrimination Act 1975 is amended to include a legal obligation for all public authorities for unlawful discrimination and harassment and promote equality of opportunity between men and women.

The Information and Consultation Regulations on employers with 100 or more employees

The flexible working regulations are in the care of adults.

And on the horizon ...

The Employment Retention Bill had its first reading in the House of Commons on 13 March 2007 and is on its second reading on 18 May 2007. The Bill provides a statutory right to rehabilitation leave (disability leave) for newly disabled people and people whose existing impairments change.