Duties of Employee — Ontario Employment Law

8 casesDecisions from 1964–2005

About Duties of Employee

When exploring Ontario employment law, discussions typically revolve around the employer's obligations, such as providing termination pay, maintaining a safe workplace, or accommodating disabilities. However, at common law, the employment relationship is a two-way street. Every worker in Ontario owes fundamental legal duties to their employer, formally recognized as implied duties of loyalty, fidelity, competence, and obedience.

The most prominent of these is the duty of fidelity (often called the duty of loyalty). Even if you have not signed a formal, written employment contract, Ontario courts impose an implied promise that you will act in your employer's best interest while on the payroll. For a standard employee, this means you cannot actively compete with your current employer, sabotage their operations, steal corporate opportunities, or misappropriate confidential client lists.

Another core expectation is the duty of obedience, meaning an employee must follow the lawful and reasonable directions of their managers. Repeated refusal to do so may cross the line into insubordination, potentially justifying termination for cause. Additionally, workers owe a duty of competence and care—an implied promise that they possess the skills they claimed to have and will carry out their tasks without reckless negligence.

Statute law in Ontario also places firm duties on workers. Under the Occupational Health and Safety Act (OHSA), employees have a legal obligation to work safely, report known workplace hazards or safety contraventions to their supervisor, and properly use required protective equipment.

Importantly, the extent of a worker's loyalty depends heavily on their role. A front-line cashier owes a basic duty of good faith during working hours, whereas a senior executive or key management figure may owe elevated 'fiduciary duties,' strictly restricting how they interact with clients or corporate assets both during and sometimes after their employment (a concept explored deeply in our specific section on Fiduciary Duties).

Failing to uphold these obligations can result in severe consequences, ranging from disciplinary action and termination for just cause to civil lawsuits for damages if an employer suffers financial losses due to the breach. Because determining exactly what you can and cannot do—particularly when planning to start a new business or leave a job—hinges on your specific role and contract wording, having your situation reviewed by a qualified Ontario employment lawyer is the smartest way to ensure you stay on the right side of the law.

Frequently Asked Questions

Can I work a second job or start a side business while employed?

Generally, yes, unless your employment contract expressly forbids it. However, under your implied duty of fidelity, your side business or second job cannot directly compete with your current employer, cannot be performed during your working hours, and must not compromise your primary job performance.

What is the difference between basic duties and fiduciary duties?

All employees owe a basic duty of loyalty, meaning they cannot actively harm or compete with their employer while employed. High-level employees, such as directors or key management, owe stricter 'fiduciary duties', requiring them to put the company's interests above their own and strictly limiting competitive acts even after resignation.

Can my employer sue me if I copy their client list before I quit?

Yes. Misappropriating confidential information, such as proprietary client lists, is a severe breach of your duty of loyalty. In Ontario, employers routinely sue former employees for monetary damages if they steal data to solicit clients for a new venture.

Do I have any legal responsibilities regarding workplace health and safety?

Absolutely. Under Ontario's Occupational Health and Safety Act (OHSA), every worker must work in a safe manner, use required protective equipment, and promptly report any hazards or defective equipment to their supervisor.

Is it completely illegal to prepare to compete with my employer while I still work there?

No, preliminary preparation is usually lawful. Ontario courts generally allow employees to take passive steps, such as registering a new business name, signing a commercial lease, or getting a loan on their own time, provided they do not actively solicit clients or use company resources to do so.

If my employer alleges I breached my duties and threatens a lawsuit, how long do I have to act?

If you are served with a Statement of Claim by your employer, you typically have only 20 days to file a Statement of Defence in Ontario. You must consult legal counsel immediately, as missing this tight window can result in a default judgment against you.

Common Scenarios

  • A graphic designer moonlights by taking on freelance clients that directly compete with their employer's marketing agency, utilizing the employer's specialized software licenses to complete the freelance work.
  • A warehouse worker notices a faulty safety latch on a forklift but ignores it. The failure to report the hazard constitutes a breach of their worker duties under the Occupational Health and Safety Act.
  • Two weeks prior to resigning, an IT sales representative downloads the company’s entire master customer database onto a personal flash drive with the intention of using those contacts to jumpstart their own tech firm.
  • A mid-level manager signs a lease for a storefront on an evening weekend, registers a business name, and sets up a separate bank account, ensuring none of this preliminary planning interferes with their current job or utilizes company time.

What You Should Know

  • Keep your side projects entirely separate from your primary job by never using company laptops, phones, email addresses, or working hours to advance your personal business ventures.
  • Review your employment contract upon hiring, as many employers include explicit conflict-of-interest policies that define exactly what types of outside activities they consider a breach of duty.
  • Fulfill your statutory safety obligations by documenting and reporting any workplace hazards, harassment, or safety violations to your manager in writing to create a verifiable record.
  • If you are orchestrating a team departure or planning to launch a competing enterprise, seek guidance from an employment lawyer before making any moves while still employed to avoid triggering a costly breach of loyalty lawsuit.

Featured Cases

Professional Court Reporters v. Carter

1993 CanLII 17488 (ON SC) · 1993-02-11

Employment Fiduciary Duty Case: Professional Court Reporters v. Carter

An employment case addressing the fiduciary duties of an employee in the context of their employment relationship.

duties of employee employment fiduciary duties

Beyen Corp. of Canada, Inc. v. IMR Research of Canada Inc.

1992 CanLII 15507 (ON SC) · 1992-09-14

Employee Fiduciary Duties in Employment Contract Dispute

An employment case addressing the fiduciary duties of an employee in the context of their employment relationship.

duties of employee employment employment contract fiduciary duties

Bratton v. Sinnige

1988 CanLII 10273 (ON SC) · 1988-12-09

Employee Fiduciary Duty Case: Bratton v. Sinnige

An employment case addressing the fiduciary duties of an employee.

duties of employee employment fiduciary duties

Wallace Welding Supplies Ltd. v. Wallace et al.

1986 CanLII 7626 (ON SC) · 1986-03-06

Employee Fiduciary Duties in Employment Contract Dispute

An employment case addressing the fiduciary duties of an employee in the context of their employment relationship.

duties of employee employment fiduciary duties

Genesta Manufacturing Ltd. v. Babey et al.

1984 CanLII 2032 (ON SC) · 1984-10-02

Employee Breach of Duty: Competing While Employed and Misusing Customer Lists

A case involving an employee who allegedly breached his duty of loyalty by competing with his employer while still employed, copying customer lists, and soliciting customers. The court addressed whether the employee was liable for misappropriating confidential information, using skills acquired during employment, and misappropriating a corporate opportunity.

breach of loyalty corporate opportunity duties of employee employment contract misuse of confidential information

Protective Plastics Ltd. v. Hawkins

1964 CanLII 198 (ON SC) · 1964-11-24

Employee Breach of Duty: Employer Recovers One-Third Salary in Damages

A case involving an employee's breach of duty by using employer resources and confidential information while negotiating with a competitor. The employer sought damages for loss of customers and insufficient performance, with the court assessing damages at one-third of the employee's salary during the breach period.

breach of duty damages duties of employee employment contract fiduciary duties