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Document updated/added on 06.12.2019

Topic: Contractual clauses

Employee warranties
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Employee warranties

Employee warranties

Our warranties ask the employee to warrant that they have both the freedom to work and specific professional qualifications.

Freedom to work

Our Employee Warranties are drafted as a clause for insertion into a senior employee’s employment contract. There are two different warranties. The first provision asks the new employee to warrant that they won’t be in breach of any obligations in entering into their employment contract with you. The aim here is to focus the employee’s mind on any restrictions which may prevent them from taking up their role with you, e.g. ongoing restrictive covenants contained in a contract with a previous employer. If you employ someone despite knowing that they’ll be in breach of their obligations to a former employer, you may be liable in damages for the tort of inducing breach of contract. Including a warranty of this kind will therefore help you to show that you didn’t have the relevant knowledge before you employed the employee, provided you get the contract agreed prior to their starting work for you. As such, it can assist you in defending yourself against any action by their former employer. Conversely, the danger in including this clause is that it may end up highlighting restrictions of which you weren’t previously aware, e.g. if the employee then brings them to your attention once they read the clause. Ideally, you should also require your new employee to give you an indemnity with regard to any loss that you may incur as a result of their being in breach of any obligation. Our clause is drafted to include such an indemnity.

Professional qualifications

The second provision asks the employee to warrant that they have a particular professional qualification which they will continue to maintain at all times during their employment with you. This would include qualifications which they need to have in order to continue to practice in their specific role. The clause goes on to require the employee to immediately notify you if they cease to hold that qualification during their employment.




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