Conflicts of interest - Contract of Employment

This refers to employees undertaking activities which are in conflict with the duty of service they owe to their employer examples are other paid work, directorships, significant share holdings etc. Some companies extend such restriction clauses to the individual's family. In any contract there is an implied term that employees will not enter into activities that are in direct conflict with their employer but the exact nature of that term may not cover the employer's requirements. It is probably sufficient to rely upon a reasonable implied term for most staff. But in the case of senior managers, directors and specialist technical staff who may have knowledge of commercially sensitive information it is preferable to include a specific written term in their contracts.

Example Clause

Conflict of Interest and Gifts

1 You may not engage in any commercial activity outside your employment under this Agreement without written consent given by the Company, nor in any activity prejudicial to the interests of the Company.

2 You shall avoid potential conflicts between your personal or family interest and that of the Company in any dealings with third parties. Any such interests, including directorships, ownership or significant shareholdings in any public or private company must be registered with and authorised by the Chief Executive.

3 The Company is committed to the avoidance of corrupt practices in all its commercial and business dealings. The offer or acceptance of any gift or benefit in kind as a bribe or inducement to doing business is expressly forbidden as is the offer or acceptance of cash or improper use of Company funds or assets.

4 For the avoidance of doubt the receipt of any gifts or benefits beyond simple courtesies or gifts of purely nominal value such as calendars, pens and diaries should be recorded in writing to your manager.