In a very important case for companies and business of all sizes, the High Court has held that a company director was not required to hand in confidential documents after termination of his employment.
The High Court found that there were no grounds for finding that the director was subject to an implied term requiring him to deliver up confidential documents when he left his position with the company, because there was nothing in his service agreement to explicitly state that this was to be the case.
Detail: service agreements
Whilst the director’s service agreement clearly stated that all information acquired during his appointment was confidential and should not be disclosed to third parties or used for any other reason other than in the interests of the company, there was no specific requirement for him to deliver up confidential documents once his contract terminated.
Expert advice: employment contracts
As with many important contractual documents, once the basis of an employment contract is complete and correct, often a template can be easily amended to suit a variety of employment requirements. However, if the contract is not right in the first instance, it then becomes very difficult and even impossible to add in terms, later on in employment.
All contracts of employment, whether relating to directors or other employees, should impose an obligation to keep confidential information secret. This should specifically state that employees should not disclose nor use information for any other purpose. Importantly, as demonstrated in this case, contracts of employment should also state that employees must deliver up all documents and copies, on termination of their employment.