Employee working for rival business?

familyguy12

Hi, sorry I wasn't sure where to put this as it's more a general query on the topic rather than a personal query about finances.
I am just looking for advice.  I work for a small limited company.
Recently we were tipped off that a current full time employee (colleague) has become a director of a new company (incorporated late 2020) which is in the same industry, so clearly a conflict of interest. This person continues to work as normal and has not given any notice that they will be moving on anytime soon.
We also suspect that this individual is double jobbing effectively, we have reason to believe that thay have been carrying out duties on behalf of the new company on our (my company's) time.
I know employment law can be quite complicated, but just in general, I would assume just from a common sense perspective that whether is is stated in black and white or not
(I don't know) on their contract, that this a breach of trust and if this person has a vested interest in a rival business under the nose of their current employer that, that would be grounds for immediate dismissal?

I would just like to know if there's anyone on here who might be a business owner or director who has encountered this kind of scenario and what next steps you took with your employee etc? Or if there are any emplyment statute you could direct me to.

Many thanks

General_Grant

familyguy12 said:

Hi, sorry I wasn't sure where to put this as it's more a general query on the topic rather than a personal query about finances.
I am just looking for advice.  I work for a small limited company.
Recently we were tipped off that a current full time employee (colleague) has become a director of a new company (incorporated late 2020) which is in the same industry, so clearly a conflict of interest. This person continues to work as normal and has not given any notice that they will be moving on anytime soon.
We also suspect that this individual is double jobbing effectively, we have reason to believe that thay have been carrying out duties on behalf of the new company on our (my company's) time.
I know employment law can be quite complicated, but just in general, I would assume just from a common sense perspective that whether is is stated in black and white or not
(I don't know) on their contract, that this a breach of trust and if this person has a vested interest in a rival business under the nose of their current employer that, that would be grounds for immediate dismissal?

I would just like to know if there's anyone on here who might be a business owner or director who has encountered this kind of scenario and what next steps you took with your employee etc? Or if there are any emplyment statute you could direct me to.

Many thanks

search "duty of fidelity in employment"

oh_really

Pushed for time at the moment but this individual could very well be on thin ice.

Search implied duties, pay particular attn to duty of fidelity and duty to supply trust and confidence.

getmore4less

if a director of a ltd company you can find that information just using their name on 
Companies House service (company-information.service.gov.uk

get the information and do more research into what they might be up to.
key would be if they have a controlling or significant interest

if you have reason to believe they are doing stuff on company time that may be enough with little evidence.
 
if you can let them go(no one should be indispensable) you can look at gross misconduct

if the evidence stacks up  you have loss of trust, just taking the directorship of a company with conflict could be enough.

how long have they worked for you.
Don't under estimate the cost and time if they try an ET claim

TELLIT01

Is there anything in their contract of employment stating they must be permission before taking on a 2nd job?

TBagpuss

there are a few potential issues here.

The first is is their contract t contains any provisions either preventing them from taking on a second job without the employers consent or any restrictive covenants preventing them from working for a competitor. 

In wither of those cases the employer can go down the disciplinary route based on breach of contract, and could potentially see it as gross misconduct. 

If there is nothing explicit in the contract then you would be looking at implied terms, (there is generally an implied term of good father in employment contracts)  and whether they were in fact working on the company's time, in which case they could be disciplined for that, regardless of who the external work was for.
As you say you are a coworker, not their employer, it's not your problem to solve, and your employer would be sensible to talk to an employment lawyer if they are not sure about their options, before they do anything. 

familyguy12

Thanks for the replies folks, I'm told there have been further developments today so I'll park this topic for now until I know a bit more. The responses above are very helpful. Cheers.

robatwork

If what you say is correct, and you can gather some proof of this person working elsewhere on company time (not just being a director) I'd have considered this gross misconduct and instant dismissal.

Obviously depends on the exact facts.