Confidential information for the purposes of an employment relationship is information that is unique to the business. It is this information that should be protected in a deed of release and employment contract.
Defining what is confidential information
Information or skills that are ordinarily known in a certain business or industry would not constitute confidential information, however specific techniques or strategies adopted by the business may be confidential information.
The below example demonstrates the difference between these two types of knowledge:
An electrical company that constructs and runs substations employs a marketing professional as an executive director. During her time with the electrical company she develops her professional skills. As it is her first time working for an electrical company, she greatly builds her knowledge and expertise of marketing in this industry. The marketing professional, alongside her team, creates tailored marketing strategies, as well as business plans and reports as part of this role. If she moved to a competing company, specific work she did, for example strategies and business plans, would be considered confidential, however, her skills and experience would be considered “know-how”.
The following should be considered when defining what information is confidential and what is industry knowledge:
- The extent to which the information is known outside the employer’s business;
- The level of skill and effort expended by the employer in the context of the information;
- The extent to which the employer closely guards the secrecy of the information, such that it is difficult for a third party to acquire it;
- The extent to which the employer made it known to the employee or contractor that the employer regarded the information as confidential;
- Whether similar information is regarded as confidential in the relevant industry;
- The extent to which it is important to the employer that confidentiality is preserved;
- Whether the employer makes the information freely available to all employees and contractors, or whether the employer only makes the information available to senior employees or employees with special responsibilities.
Policies to protect confidential information
Confidential information should be kept appropriately within the business. There are many ways of storing or sending information which can reduce the chance of confidential information being shared. Some examples are: having passwords to documents or folders to allow only authorised employees to access the information, limiting shared email inboxes as well as informing your clients if it is necessary to share information.
Privacy Act 1988 (Cth)
There are many ways confidential information can be brought up. Legislation is put in place to protect the privacy of one’s information. Pursuant to Part VIII of the Privacy Act 1988, the Act states that a person who works in an agency is obliged to keep the information confident if the information ought to be personal or whether the information could impact the individual or a third party.
Confidential information in employment contracts
Confidential information should be carefully protected in employment contracts to ensure that employees who leave a business do not use, distribute or on-sell information belonging to your business.
Contact JFM Law for help in drafting employment law contracts, protecting confidential information in a deed of release or any other employment law issues.
The information contained in this post is current at the date of editing – 08 October 2025.
