When a university embryologist, the respondent, worked abroad he did not act in any breach of fiduciary duty. He remained under a specific duty to direct his fellow embryologists to work in the interests of the university and not in his own financial interest. When receiving financial reward for work undertaken by other embryologists abroad, he was acting in breach of his fiduciary duty and was required to account for the profit he had made.
In the absence of an explicit term in his contract for this purpose, an employee has no duty to inform his employer of any employment taken by him outside that contract, even if it was in breach of that contract. The relation of trust and confidence between employer and employee did not make it a fiduciary relationship. An employee other than a senior employee is in a different position to a director, and an employee had no duty to pursue his employer’s interests at the expense of his own. Care must be taken not to equate the duty of good faith and loyalty owed by every employee with a fiduciary obligation. Unless that distinction is maintained common law rules of causation and remoteness of damages may be:- ‘miraculously sidestepped by intoning the magic formula (breach of fiduciary duty)’.
‘in determining whether a fiduciary relationship arises in the context of an employment relationship, it is necessary to identify with care the particular duties undertaken by the employee, and to ask whether in all the circumstances he has placed himself in a position where he must act solely in the interest of his employer. It is only once those duties have been identified that it is possible to determine whether any fiduciary duty has been breached.’
Judges:
Elias J
Citations:
Times 31-Mar-2000, [2000] EWHC 221 (QB), [2000] Ed CR 505, [2001] RPC 22, [2000] ICR 1462, [2000] IRLR 471, [2000] ELR 385
Links:
Jurisdiction:
England and Wales
Cited by:
Cited – SG and R Valuation Service Co v Boudrais and others QBD 12-May-2008
The claimant sought to require the defendants not to work during their notice period to achieve the equivalent of garden leave despite there being no provision for garden leave in the contracts. It was said that the defendants had conspired together . .
Cited – Helmet Integrated Systems Ltd v Tunnard and others CA 15-Dec-2006
Whilst employed by the claimants as a salesman, the defendant came to want to develop his idea for a modular helmet suitable for fire-fighters and others. He took certain steps including showing the proposal confidentially to a competitor, and then . .
Cited – Ranson v Customer Systems Plc CA 27-Jun-2012
Lewison LJ considered the contractual duty of fidelity within an employment contract:
‘It is not disputed that an employee has an obligation of fidelity towards his employer. If the obligation is not expressed, it will invariably be implied.
Cited – Whitmar Publications Ltd v Gamage and Others ChD 4-Jul-2013
Whitmar claimed damages for breach of contract; an account of profits; damages for breach of fiduciary duty and/or for infringement of its Database Rights under the Copyright and Rights in Database Regulations 1997; and for a permanent injunction . .
Lists of cited by and citing cases may be incomplete.
Employment
Updated: 19 May 2022; Ref: scu.84377