The high court of australia (high court) has determined that employment contracts in australia do not contain an implied term of mutual trust and confidence imposing an obligation on employers to treat their employees fairly or reasonably. In the opening paragraph of the judgment, chief justice french and justices bell and keane note that the implication of the term of mutual trust and confidence into all employment contracts “is a step beyond the legitimate law-making function of the courts” this is a recurring theme throughout the judgment. The development of the implied term of mutual trust and confidence in the united kingdom, was a shift away from the historical construct of employment as a “master and servant” relationship, towards recognition of the necessity of a relationship between employer and employee for employment to exist.
The evolving duty of trust and confidence have courts and tribunals gone further than necessary in implying a duty of mutual trust and confidence in a contract of employment. High court ends the debate: no implied term of mutual trust and confidence in australian employment contracts overview for years australian courts and tribunals have tangoed with and side-stepped around the sticky issue of whether australian law recognises an implied term of mutual trust and confidence in employment contracts. The primary judge besanko j held that there was a term of mutual trust and confidence implied into the employment contract which would be breached if a party had, without reasonable and proper cause, engaged in conduct likely to destroy or damage the relationship of trust and confidence. Malik and mahmud v bank of credit and commerce international sa  ukhl 23 is a leading english contract law and uk labour law case, which confirmed the existence of the implied term of mutual trust and confidence in all contracts of employment.
3 employment contracts, like other contracts which describe long-term (or at least, indefinite) relationships for the mutual benefit of the parties, are to joellen riley and jill murray, the law of work (oxford university press, 2 nd ed, 2011. In all the employment contracts a term mutual trust and confidence which is also known as the duty to act reasonably and fairly is implied or not is the question for over the past years as per the labor regulations in australia, different range of sources provides different rights and. Implied duties in an employment context in that ruling australia's highest court decided that a duty of mutual trust and confidence is not implied into australian contracts of employment our previous article provides a comprehensive summary of the. Barker brought proceedings in the federal court alleging that cba had breached the implied term of mutual trust and confidence in his employment contract by failing to make proper efforts to redeploy him in accordance with cba’s redeployment policy.
Employment contracts do not contain an implied term of mutual trust and confidence this article briefly summarises the history of the case, sets out the high court's findings and explains what this means for employers commonwealth bank of australia v barker [2014. Employment contracts include an implied term of mutual trust and confidence this duty requires the employer to not, without reasonable cause, conduct itself in a manner likely to destroy or seriously damage the ongoing relationship between employer and employee. Whether a term of mutual trust and confidence is implied in every employment contract has received considerable attention in recent years in australia, it has now been accepted that it will generally be implied into employment contracts, but australian courts have been reluctant to award damages. Probationary employment contracts are no exception after rejecting the implied term of mutual trust and confidence in light of barker, the queensland court of appeal went on to consider whether an obligation to act in good faith was implied into the contract.
It is important to note that, in all employment contracts, there is an implied term of mutual trust and confidence that the employer will not conduct itself in such a way as to undermine the fundamental trust and confidence that. In a separate judgment gageler j, who also rejected the implication of the duty, added that to import the implied term of mutual trust and confidence into australian employment law contracts would be a potential “trojan horse” in the sense that implied duty would often only be clarified after the event. The high court has unanimously held that there is no implied term of mutual trust and confidence in australian employment contracts in august 2013, a majority of a full court of the federal court found that all australian employment contracts had an implied term of mutual trust and confidence. In a much anticipated decision, the high court of australia has unanimously ruled that contracts of employment in australia do not automatically include a mutual duty of trust and confidence: commonwealth bank of australia v barker  hca 32 (10 september 2014) background.
Two such terms with this effect are: mutual obligation of trust and respect 16 and the employer's duty to take reasonable care of the employee's health and safety 17 by virtue of s 2 of the unfair contract act 1977, the duty to take reasonable care cannot be excluded by contract. The employment appeal tribunal recently ruled in assamoi v spirit pub company (services) ltd that an employer can prevent a breach of the duty of mutual trust and confidence by apologising to an employee for any actions taken.
However, in commonwealth bank of australia v barker  hca 32, the high court of australia pronounced authoritatively on the matter of whether there was a term of mutual trust and confidence implied by law into employment contracts in australia. Employers should be wary of the possibility that a court could imply the term of mutual trust and confidence into an employment contract, and that a breach could bring consequences. In one of the most significant decisions in the history of australian employment law, the high court of australia (hca) has today unanimously reversed an august 2013 majority decision of the full federal court of australia (ffca), concluding that there is no implied duty of mutual trust and confidence implied by law into australian employment contracts.