Overview — Employee obligations

Employee obligations can derive from their employment contract through either express or implied terms. Theoretically, the obligations that the employment contract can impose upon an employee is limited only by reference to the requirement that the parties to that agreement must not contract in a manner that is contrary to public policy, or that is otherwise contrary to law.

For many employees, the express terms of the contract will only be of minor practical significance. For such employees, key issues such as rates of pay, hours, leave and other entitlements will be regulated by either or both of industrial instruments and statute. The situation for professional and managerial employees will likely be much different, with written contracts making more or less detailed provision in relation to most key aspects of their employment relationship.

Despite the above differences, for all employees, there are a number of matters that are commonly regulated primarily by means of terms implied in the contract by the operation of law. These include duties imposed upon employees in relation to:

• • obedience and cooperation (see Duty to comply with lawful and reasonable directions);
• • care and skill, including indemnity and insurance issues (see Duty of care and skill);
• • fidelity and good faith (see Non-solicitation of customers/poaching of employees);
• • fidelity and good faith: non-disclosure/misuse of confidential information (see Non-disclosure/misuse of confidential information);
• • fidelity and good faith: non-competition & use of employees' spare time (see Non-competition/use of employees’ spare time); and
• • fidelity and good faith: rights re inventions/IP (see Ownership of intellectual property created by employees).

It is, of course, open to the parties to make express provision in relation to any of these matters if they so choose. Any such express term will override an otherwise applicable implied term. However, where the parties do so, they need to be aware that the terms of their agreement will operate subject to the common law principles relating to restraint of trade. These principles proceed from the assumption that all contractual provisions that are in restraint of trade are void on grounds of public policy. However, restraints may be upheld if they can be shown to be reasonable in the public interest and in the interests of the parties. See Introduction to restraint clauses and Drafting post-employment restraint clauses.