Legal Question in Business Law in United Kingdom

Re: Working Ehile On Unpaid Leave

The short answer is no for reasons I will explain below.

The long answer, on the assumption that you are unwilling to seek your employer's consent to work for its competitor (or you know that the consent would not be forthcoming), is that whether you could legally work for a competitor during your leave period could depend on details which have not been provided.

You owe a duty of loyalty and good faith towards your employer while employed by him and obviously, this precludes working for any competitors unless legislation or the employment contract provide otherwise. Employers generally owe these duties for as long as they continue to be employed by the employer in question, whether they are not on active duty or not.

Employment law statutes generally do not address duties of loyalty and good faith so employers and employees are free to settle this among themselves. In my experience, employment contracts seldomly expressly provide that employees are free to pursue employment with competitors, in which case the common law duties of loyalty and good faith would step in.

If the employer will expressly consent to employment with a rival, then that would constitute a variation of the original employment contract term or, in the absence of such a contractual provision (ie: if the contract was silent as to this issue or if there was no contract at all), then it would constitute a waiver of the common law duties.

The potential consequence of working for a competitor without the employer's consent is that if you were discovered, it would constitute a breach of either the common law duties or terms of the employment contract or both and would probably afford grounds for summary dismissal (immediately), depriving you of any redress or, in most jurisdictions, claims for payment in lieu of notice.

On the other hand, if you were inclined to inform your current employer (the one you would be taking a one year leave of absence from) and could possibly obtain its consent for the period you will be on leave, you could avoid the risk of having your employment terminated. Depending on how understanding your employer is and factors such as whether you would be continuing to receive any benefits while on leave, he may or may not agree.

I hope this helps. For additional information, you can probably get details pertaining to local laws and dispute resolution procedures from your local labour board.