In a recent High Court case, a former employee claimed that his employer should be liable for his loss of career earnings on the basis that they owed him either a duty of care to protect employees from criminal convictions or an implied duty to indemnify him for his losses.
The employee had been working as an investment banker in Romania when he was arrested and convicted as a result of a transaction he was working on. The employee was then made redundant and was unable to secure further employment in his industry because of his Romanian criminal conviction.
Due to his failure to secure further employment, the employee brought a claim that his employer had a duty of care to (1) ensure their employees are not exposed to the risk of criminal conviction whilst pursuing their duties, (2) reasonably protect employees from subsequent financial losses and (3) indemnify employees for any losses they suffer as a result.
The High Court dismissed the employee’s claim, deciding that whilst there is (in theory) a duty on the employer to reasonably care for their employee’s safety and protect them from resulting financial losses, this will depend on the specific facts of the case, how foreseeable the harm is and whether it is fair, just and reasonable to impose such a duty. However, the employer in this case had not breached this duty as Romania was not a high-risk country in which to do business at the time of the employee’s conviction.
As for the employee’s claim on the implied duty to indemnify, the High Court held that such a duty only applies to employees’ losses that are suffered in the course or as a consequence of their employment. As such, this duty did not extend to loss of career earnings, but the High Court did comment the duty may be widened by an implied indemnity of fact in future cases.
