In English law

English law

English law is the legal system of England and Wales, and is the basis of common law legal systems used in most Commonwealth countries and the United States except Louisiana...

, a secret profit is a profit

Profit (economics)

In economics, the term profit has two related but distinct meanings. Normal profit represents the total opportunity costs of a venture to an entrepreneur or investor, whilst economic profit In economics, the term profit has two related but distinct meanings. Normal profit represents the total...

 made by an employee who uses his employer's premises and business facilities in order to engage in unauthorised trade on his own behalf. A common example is a bar

Bar (establishment)

A bar is a business establishment that serves alcoholic drinks — beer, wine, liquor, and cocktails — for consumption on the premises.Bars provide stools or chairs that are placed at tables or counters for their patrons. Some bars have entertainment on a stage, such as a live band, comedians, go-go...

 manager

Management

Management in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively...

 who purchases beer

Beer

Beer is the world's most widely consumed andprobably oldest alcoholic beverage; it is the third most popular drink overall, after water and tea. It is produced by the brewing and fermentation of sugars, mainly derived from malted cereal grains, most commonly malted barley and malted wheat...

 from a brewery

Brewery

A brewery is a dedicated building for the making of beer, though beer can be made at home, and has been for much of beer's history. A company which makes beer is called either a brewery or a brewing company....

 in his own right and sells it in the bar in competition with, or in preference to, that of his employer. The profit made thereby is a secret profit.

Where the employee deceived a customer before 15 January 2007 he could be prosecuted for obtaining property by deception

Obtaining property by deception

Obtaining property by deception was formerly a statutory offence in England and Wales and Northern Ireland.-England and Wales:This offence was created by section 15 of the Theft Act 1968...

, the property being the customer's money and the deception that he was selling his employer's produce. Such offences were predicated on the presumption that a customer would not purchase illicit goods were he aware of their true provenance. The offence of obtaining property by deception has since been repeal

Repeal

A repeal is the amendment, removal or reversal of a law. This is generally done when a law is no longer effective, or it is shown that a law is having far more negative consequences than were originally envisioned....

ed and is now replaced by the offence of fraud by false representation.

The employee is not a constructive trust

Constructive trust

A constructive trust is an equitable remedy resembling a trust imposed by a court to benefit a party that has been wrongfully deprived of its rights due to either a person obtaining or holding legal right to property which they should not possess due to unjust enrichment or interference...

ee of the profit for the employer and the employer has no proprietary interest

Ownership

Ownership is the state or fact of exclusive rights and control over property, which may be an object, land/real estate or intellectual property. Ownership involves multiple rights, collectively referred to as title, which may be separated and held by different parties. The concept of ownership has...

 in the profit. Hence, there is no theft

Theft

In common usage, theft is the illegal taking of another person's property without that person's permission or consent. The word is also used as an informal shorthand term for some crimes against property, such as burglary, embezzlement, larceny, looting, robbery, shoplifting and fraud...

 from the employer and the profit is merely a civil debt

Debt

A debt is an obligation owed by one party to a second party, the creditor; usually this refers to assets granted by the creditor to the debtor, but the term can also be used metaphorically to cover moral obligations and other interactions not based on economic value.A debt is created when a...

 owed by the employee to the employer. However, where more than one person is involved there could be a conspiracy to defraud

Conspiracy to defraud

Conspiracy to defraud is an offence under the common law of England and Wales and Northern Ireland.-England and Wales:The standard definition of a conspiracy to defraud was provided by Lord Dilhorne in Scott v Metropolitan Police Commissioner, when he said that Conspiracy to defraud therefore...

 and, since the coming into force of the Fraud Act 2006

Fraud Act 2006

The Fraud Act 2006 is an Act of the Parliament of the United Kingdom. It affects England and Wales and Northern Ireland. It was given Royal Assent on 8 November 2006, and came into effect on 15 January 2007.-Purpose:...

, the employee could be guilty of fraud by abuse of position.