Fair work duties of fidelity and good faith

 

All employees have an implied duty of fidelity to an employer; this is how it is explained.

“Applicant’s legal obligations (as an employee) to the Respondent (as his employer)

[25] Whether express or implied, every employee has a duty of fidelity to their employer.

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[26] Sometimes also described as a duty of loyalty and good faith, the scope of the duty of

fidelity was outlined by Palmer J in Digital Pulse Pty Ltd v Harris,

27 where his Honour said:

“[20] An employee has a duty to act in the interests of the employer with good faith and

fidelity. That duty is implied in every contract of employment if it is not otherwise

imposed by an express term. In addition, the duty is imposed upon every employee by

the law of fiduciaries, the relationship of employer and employee being recognised as a

paradigmatic fiduciary relationship.

[21] The obligations imposed by the duty are not coterminous with the employee’s

normal working hours: they govern all the activities of the employee, whenever

undertaken, which are within the sphere of the employer’s business operations and

which could materially affect the employer’s business interests. Whether a particular

activity could materially affect the employer’s business interests is a question of fact

and degree.

[22] The duty of loyalty requires that an employee not place himself or herself in a

position in which the employee’s own interest in a transaction within the sphere of the

employer’s business operations conflicts with the employee’s duty to act solely in the

employer’s interest in relation to that transaction. A fortiori, an employee may not take

for himself or herself an opportunity within the sphere of the employer’s business

operations without the employer’s fully informed consent.”.

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[27] The duty of fidelity is essentially replicated in the Woolworths Group Code of Conduct

(Woolworth’s Code), that applied to the Applicant during his employment with the

Respondent.29 The Applicant has never asserted in these proceedings that he was not bound by

the Woolworth’s Code. Further, clauses 2.1.1 and 2.1.2 of the Big W Stores Agreement 2019

(which relevantly applied to the Applicant at the time of his dismissal), reads:

“2.1 What are BIG W’s standards and policies?

2.1.1 BIG W aspires to be a great place to work and a great place to shop. We are all

responsible for contributing to an environment where everyone at BIG W is treated with

dignity, courtesy and respect. To ensure we do the right thing by our teams, our

customers and our communities, BIG W has standards and policies that we expect our

team members to follow at all times.

2.1.2 All team members at BIG W are required to read, understand and follow the

[Woolworth’s] Code of Conduct and all applicable BIG W policies. However, such

policies are not incorporated into this Agreement or any team member’s contract of

employment. The [Woolworth’s] Code of Conduct and all policies are available on the

BIG W intranet, and may be updated from time to time.”

 

Best v Woolworths Group Limited [2023] FWC 1283 delivered 10 July per Boyce DP