Managers and Executive Staff: Fiduciary Duties and the Contract of Employment

Fiduciary duties in contract arise from a relationship between the parties that depend on the maintenance of trust. The employer as contracting party for whose benefit the fiduciary acts is in the less advantaged position and this is redressed by imposing trust-obligations upon the employee. Where their employment is not award-based employees in Australia must rely on action in the I.R.C. for procedural unfairness under S170 of the Industrial Relations Reform Act 1993 or pursue a common law action in the damages for breach of contract. If they earn more than $A60,000 p.a. as many managers do, they have no right of action in a Victorian tribunal. While the managers' remedies are few and expensive the grounds for their dismissal are many and expanding. The essentials of serious misconduct inherent in breach of trust are expanding into breach of wider fiduciary duties owed to the employer by nature of the employment. These have their origins in equity not in the common law and resemble duties of trustees more closely than of employees.