Publications / Employment

10 Sep 14
Employers relieved as High Court rules on duty of trust and confidence

The High Court has today found that employment contracts do not contain an implied term that the parties must not, without reasonable cause, engage in conduct likely to destroy or seriously damage the relationship of trust and confidence between them.

This decision overturned the decision of the Full Court of the Federal Court in Commonwealth Bank of Australia v Barker [2013] FCAFC 83 which found that the Bank had breached this implied term and, as a result, ordered it to pay Barker damages of $335,623.57.

The decision will be welcomed by employers, who feared the implication of such a duty into all employment contracts could lead to significant uncertainty in relation to their ability to terminate employment contracts.

A further article examining the detail of the decision will be released shortly.

Focus covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. Focus is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.

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