Week 5 Seminar Questions

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Week 5: Employee Duties Issues • Status of implied terms: terms implied by law • Duty to disclose • Duty of fidelity and good faith • Equitable duties: confidentiality, fiduciary duties • Inventions, confidential information • Secret profits, emerging business opportunities • Confidentiality: whistleblowers’ exception Reading Macken ch 5 pp 212-265 Subject Readings: O’Brien v Associated Fire Alarms [1969] 1 All ER 93 Robb v Green [1895] 2 QB 315 Byrnes v Treloar (1997) 77 IR 332 SRA v Earthline Constructions Pty Ltd (1995) AILR 5-018 Questions 1. What principles govern the employee’s duty to obey the orders of their employer? What limits are imposed by the requirement that orders must be ‘reasonable’? Obligation to obey all lawful and reasonable commands given by the employer = mechanism which allows adaptation and change to meet the needs of the workplace. Commands by an employer to perform unlawful acts need not be obeyed. An employer cannot lawfully require an employee to do what the employee was not contracted to do. An employer cannot lawfully direct an employee to perform duties outside the scope of the agreed employment. What is reasonable will depend upon the particular employment. The employee’s duty to obey orders assumes a specific direction or required policy relating to the work that it is to be done. But this duty should be seen as an aspect of a broader duty requiring the employee to co-operate in order to get the job done. Explain when an employee is not required to a. change their place of work – discuss O’Brien v Associated Fire Alarms

The contrat may give the employer an express power to direct the employee to work at another locationl. The law will, in the absence of agreement , imploy some term about job mobility. But what is implied will depened on the facts. Ultimately, it may just be a question whether, in the absence of a job mobility clause in the contract, award or industrial agreement, it is reasonable to request the employee to work at another location. b. do different work the issue whether the employer is entitled to change the principal duties or the employee ’ s job is essentially concerned with the question of what are the express or implied terms of the contract of employment Will depend on facts of case unless express agreement. an employee may not be obliged to undertake tasks outside those agreed either initially or by subsequent variation, the employee will be obliged to adapt to different work method c. change the method of doing work. In Cresswell v IRC 386 the Board of Inland Revenue required staff to operate a new computer system to facilitate the work of tax assessors. The plaintiffs refused to operate the new equipment arguing that it constituted a breach of their employment contracts to introduce the new system without their agreement. Walton J held that employees are not entitled to preserve their working obligations completely unchanged from the time they first start work. Provided that the nature of the job has not fundamentally changed the employee cannot object if instead of using paper and pens he or she is now required to use a computer. 2. When will an employee be liable to the employer for failure to exercise adequate care and skill? How is the standard of care required by an employee determined? When is an employee required to indemnify the employer for loss occasioned by the employee’s own conduct? An employee has a general duty to exercise reasonable care in carrying out the employment. This obligation is implied as an incident of the contractual relationship and is also impose independently by law of torts. Liability: An employer could claim contribution from the employee which would usually amount to 100% except where emolyer is not blameless. When the harm results from the employees conduct duting the course of employment such a where employee injusrs a. fellow worker, both the employee and employer will be liable to a fellow employee or third party. The common law rule that an employee 336 is liable to indemnify the employe r for torts committed within the course of employment is subject to statutory modification in some States. In New South Wales, Northern Territory and South Australia, an employer

who is vicariously liable for the employee ’ s wrongdoing is required to indemnify the employee and the employer cannot recover contribution 337 an employment contract can contain a provision whereby the employee expressly agrees to indemnify the employe r for certain kinds of losses, as for example, a portion of the bad debts incurred by the employer arising from transactions effected for clients for whom a. Explain the employee’s contractual duty of fidelity and good faith. Not easily defined incl all broad general duties –‘every aspect of an emplpoyees duty towards the employer, varying according to the nature of employment’. It is not a mutual duty. It can be said that any act inconsisten or injurious to the proper performance of an employees duties under the contract will amount to a breach of the duty. b. What are its limits? Explain the relationship between common law and equitable dimensions of the employee’s duty. The equitable action also provides more extensive remedies 435 than the contractual duty c. How did the judges explain the source and content of the duty in Robb v Green ? ‘there will always be an implication in the contract that the employee willmnact in good faith towards the employer The defendant, who was employed as a manager, secretly copied a list of the names and addresses of his employer ’ s customers and then set up a similar business for himself after he had left his employer. He used the list for this purpose and it was held that he was in breach of his obligation to observe good faith. It is clearly established that employees cannot make use of an employer ’ s time in a conscious and secret manner to advantage themselves in setting up in business in opposition to the employer. d. Why was the employee in breach of her duty of fidelity in Byrnes v Treloar ? the duty of fidelity and good faith to preclude employees from commenting on or speaking adversely to outsiders about their employers business wvene where no disclosure or use of information is involved. e. When does an employee owe fiduciary duties to their employer? What approach to this question was taken in SRA v Earthline Constructions ? What are the consequences of a finding that the employee was a fiduciary? Fuiduciary obligations sit side by side with contractual obligations. Must be a fiduciary relztionship  the fiduciary undertakes or agrees to act for or on behalf of or in the intrests of another person  Secondly, where a person (fiduciary) has undertaken to act in the interests of another (beneficiary), equity requires the fiduciary to act in the interests of the beneficiary rather than in their own self interest. hether there is a fiduciary relationship depends on the circumstances of the individual case. There is no exhaustive definition of what factors determine whether there is a fiduciary relationship, so it is not sufficient simply to point to an employment relationship.

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