In Commonwealth Bank of Australia v Barker [2014] HCA 32, the High Court has decided that a term of mutual trust and confidence as between employer and employee should not be implied as a matter of law into employment contracts, under the common law of Australia.

Author of Commercial Contract Clauses, Leigh Warnick, highlights that for employment law practitioners, the High Court’s decision in Barker means:

• Claims by employees based on breach of an obligation of mutual trust and confidence, implied as a matter of law, will not be sustainable.
• Claims by employees based on breach of an obligation of trust and confidence, implied as a matter of fact, will be sustainable only if there is some special feature of the employment contract making the implication necessary to give efficacy to the contract – that is, to prevent the rights of the employee under the contract from being deprived of substance. It is likely to be very difficult for an employee to win a case on this basis.

The decision also contain a number of statements of more general application about the implication of contractual terms which should be studied by any practitioner engaged in a case involving the implication of terms, either at law or in fact.

The highlight by Leigh Warnick is now available to subscribers in the New Developments section of Commercial Contract Clauses.

Full analysis of the implications of the High Court decision will be included in the next update due out in December.