The Common Law Obligations of the Employee under the Contract of Employment
Author | Geoffrey England |
Pages | 49-83 |
49
CHAPTER 4
THE COMMON LAW
OBLIGATIONS OF THE
EMPLOYEE UNDER
THE CONTRACT OF
EMPLOYMENT
An employee owes his or her employer obligations under both the ex-
press and the implied terms of the employment contract.1 Regarding
the employee’s express obligations, in Chapter 3 we saw that employ-
ment contracts generally do not contain a detailed and comprehensive
list of the employee’s duties, except perhaps for higher echelon execu-
tives, sports stars, and entertainers. Usually, the contract of employ-
ment will state little about the employee’s obligations beyond providing
a brief job description and summarizing the basic pay, the basic hours
of work, and annual vacations. The most common exception is a re-
strictive covenant that prevents the employee from competing with
his or her employer within a defined area and for a defined time after
the employment relationship ends. We examine the law on restrictive
covenants in this chapter. The explanation for the relative dearth of ex-
press terms in employment contracts is that the parties cannot, when
they are negotiating their contract, foresee all possible contingencies
that might occur over the lifetime of their relationship and deal with
them in advance. Consequently, the courts have had to fill the gap by
implying terms into the employment contract, and the scope of the
employee’s obligations to the employer at common law depends almost
exclusively on these implied terms.
1 For further det ailed elaboration on this topic , see G. England, R. Wood, & I.
Christie, Employ ment Law in Canada, 4th ed ., looseleaf (Markham, ON: Lex is-
Nexis Can ada, 2005–) c. 11 (II–III).
INDIVIDUAL EMPLOYMEN T LAW50
According to the general principles of contract law, terms must be
implied into a contract in order to give effect to the unstated factual
intentions of the parties; otherwise “freedom of contract” would be
jeopardized. In reality, courts often imply terms into contracts in order
to reflect the judges’ perceptions of what the parties’ respective rights
and obligations ought to be as a matter of public policy. This has clear-
ly happened in the case of the employee’s implied obligations under
the employment contract. The courts have, over the years, developed
a standardized body of particular obligations that are implied into all
employment contracts. The cornerstone of these particular obligations,
however, is an overriding residual duty of the employee to conduct
himself or herself in the best interests of the employer, usually referred
to as the “duty of fidelity.”2 This duty is critically important for employ-
ers. Because the employer cannot predict and set specific rules in ad-
vance for the myriad circumstances that can arise during the course of
a long-term employment relationship, it is essential that the employer
have the flexibility to command obedience from its employees as new
circumstances arise.3 Plainly, it would be grossly inefficient if the em-
ployer had to renegotiate the express terms of the employment con-
tract every time an unexpected occurrence arose! The implied duty of
fidelity, therefore, delineates the scope of “managerial prerogative” at
common law.
Most of the cases on the implied obligations of the employee arise
in the context of litigation over wrongful dismissal, since the employ-
er’s usual reaction to a perceived breach of duty is to fire the worker
summarily without notice or wages in lieu. Consequently, the scope
of the employee’s implied obligations becomes inextricably interwoven
with the issue of whether the employer had “just cause” for summary
dismissal. We shall see in our examination of just cause how the rigour
of the employee’s implied duty of fidelity has been tempered to reflect
modern notions of proportionality, equality, and fairness.4 The Charter
has indirectly influenced the development of the common law greatly
2 The historica l antecedents of the employee’s duty of fidelit y can be traced to
the pre-Industr ial Revolution law of master and s ervant in England. See, for
example, A. Fox, Beyond Con tract: Work, Power and Trust Relation s (London:
Faber, 1974) at 154–59, 178–81, 184–88; D. Hay, “England, 1562–1875: The
Law and Its Use s” in D. Hay & P. Craven, eds., Masters, Se rvants and Magistrates
in Britain and the Empire, 1562–1955 (Chapel Hill, NC: Universit y of North Caro-
lina Pre ss, 2004) at 59.
3 The centralit y of this point cannot be overemph asized. See, for example, J. Go -
dard, “The Progre ssive HRM Paradigm: A Theoret ical and Empirical Re-Ex am-
ination” (1991) 46 Rel. Indus. 378 at 383.
4 See Chapter 9.
The Common Law Obligat ions of the Employee51
in this respect. Although the Charter does not apply directly to private
contracts of employment, the courts have transposed its fundamental
values of fairness, equality, and proportionality into the contract of em-
ployment under the rubric of malleable contract law principles, such
as the implied duty of fidelity, “just cause” for dismissal, and others.5
However, an employer may sometimes sue an employee for damages
to recoup losses it has suffered as a result of the employee’s breach of
implied obligations, and may seek an injunction to restrain breaches
of particular obligations, such as the duty not to compete or divulge
confidential information.
A. THE EMPLOYEE’S EXPRESS CONTRACTUAL
OBLIGATIONS: RESTRICTIVE COVENANTS
Any express terms in the employment contract regarding the employee’s
obligations to the employer will be enforced by the courts according to
their literal meaning. Only where the express terms are ambiguous can
the courts rely on extrinsic evidence, such as the parties’ past practi-
ces in interpreting contractual language. If the contractual language is
unambiguous, however, the court normally applies the terminology in
question as it stands, no matter how unfair the judge might feel the out-
come to be.6 The courts will interpret contractual language contra pro-
feren tem the interests of the employer if the clause in question appears
to be unduly onerous for the employee, normally the weaker party to
the bargain. Frequently, the employment contract will expressly state
that the employee’s obligations, along with other terms and conditions
of employment, are to be found in a personnel manual or in some other
documentation, in which case such documentation will be expressly
incorporated into the employment contract. Next, we examine the
most frequently litigated express term in the employment contract: the
“restrictive covenant.”
A restrictive covenant seeks to prevent an employee from exploit-
ing an employer’s trade secrets, confidential information, or general
business goodwill, or from competing with the employer after their
employment relationship has ended. Not surprisingly, such clauses are
5 G. England, “The Impact of t he Charter on Individual Employ ment Law in Can-
ada: Rewr iting an Old Story” (2006) 13 C.L.E.L.J. 1.
6 Subject, of course, to the d octrines of unconscion ability and duress, which a l-
low unambiguous t erms to be avoided in limited c ircumstances. See C hapter 3,
Section B(3).
Get this document and AI-powered insights with a free trial of vLex and Vincent AI
Get Started for FreeUnlock full access with a free 7-day trial
Transform your legal research with vLex
-
Complete access to the largest collection of common law case law on one platform
-
Generate AI case summaries that instantly highlight key legal issues
-
Advanced search capabilities with precise filtering and sorting options
-
Comprehensive legal content with documents across 100+ jurisdictions
-
Trusted by 2 million professionals including top global firms
-
Access AI-Powered Research with Vincent AI: Natural language queries with verified citations

Unlock full access with a free 7-day trial
Transform your legal research with vLex
-
Complete access to the largest collection of common law case law on one platform
-
Generate AI case summaries that instantly highlight key legal issues
-
Advanced search capabilities with precise filtering and sorting options
-
Comprehensive legal content with documents across 100+ jurisdictions
-
Trusted by 2 million professionals including top global firms
-
Access AI-Powered Research with Vincent AI: Natural language queries with verified citations

Unlock full access with a free 7-day trial
Transform your legal research with vLex
-
Complete access to the largest collection of common law case law on one platform
-
Generate AI case summaries that instantly highlight key legal issues
-
Advanced search capabilities with precise filtering and sorting options
-
Comprehensive legal content with documents across 100+ jurisdictions
-
Trusted by 2 million professionals including top global firms
-
Access AI-Powered Research with Vincent AI: Natural language queries with verified citations

Unlock full access with a free 7-day trial
Transform your legal research with vLex
-
Complete access to the largest collection of common law case law on one platform
-
Generate AI case summaries that instantly highlight key legal issues
-
Advanced search capabilities with precise filtering and sorting options
-
Comprehensive legal content with documents across 100+ jurisdictions
-
Trusted by 2 million professionals including top global firms
-
Access AI-Powered Research with Vincent AI: Natural language queries with verified citations

Unlock full access with a free 7-day trial
Transform your legal research with vLex
-
Complete access to the largest collection of common law case law on one platform
-
Generate AI case summaries that instantly highlight key legal issues
-
Advanced search capabilities with precise filtering and sorting options
-
Comprehensive legal content with documents across 100+ jurisdictions
-
Trusted by 2 million professionals including top global firms
-
Access AI-Powered Research with Vincent AI: Natural language queries with verified citations
