Key update re: duty of trust and confidence in employment contracts

Posted on 21 October 2014

In update to our blog from 10 September 2013  the High Court has ruled in favour of the Commonwealth Bank of Australia in unanimous decision finding that contracts of employment in Australia do not automatically include a mutual duty of trust and confidence. 

Whilst the judgment is welcome relief for employers, it does not mean that there is now no obligation to act without regard to the issues of trust and confidence in the other party as there are still many legal obligations between both employer and employee when it comes to how the parties must interact with each other. 

The decision is also a timely reminder for employers to ensure that they have appropriately worded contracts of employment and written policies and procedures in place to ensure that the boundaries of the employment relationship are properly defined. The Courts are still free to imply terms into contracts of employment where it is necessary to ensure that the rights of the parties are not rendered worthless or seriously undermined so as to ensure that the contract is not deprived of its substance, seriously undermined or drastically devalued. 

As the three court judgments in the Commonwealth v Barker cases display, caution should always be exercised at all stages of the employment relationship and especially when deciding to make significant decisions which will impact on the employment relationship. 

If you need any guidance on a difficult workplace law issue, contact the expert team at Dooley & Associates Solicitors who will be happy to help you whatever your needs may be.