Most Read Contributor in Australia, September 2016
Commonwealth Bank of Australia v Stephen Barker 
The High Court in Commonwealth Bank of Australia v Stephen
Barker  HCA 32 has ruled Australian employers do not owe an
implied contractual duty to refrain from engaging in
Prior to this decision, Australian courts had recognised a duty
implied into all employment contracts which prevented the parties
from engaging in conduct likely to undermine the trust and
confidence relationship underpinning the employment contract.
The trust and confidence term was said prevent an employer from
such conduct as:
engaging in conduct designed to force an employee to
wrongfully suspending an employee
conducting disciplinary proceedings improperly
engaging in discriminatory behaviour.
In Barker's case the High Court noted the arguments in
support of the recognition of the term were predicated on a
contemporary view of the employment relationship, being one
involving common interests and akin to a partnership. Given the
recognition of the term favoured a particular view of social
conditions and desirable social policy, its recognition should be
determined by parliaments not courts.
The Court concluded an employment contract does not need to
impose a positive mutual trust and confidence obligation on the
parties in order for the employment contract to operate. On the
other hand, the recognition of the term would create uncertainty.
For example, given it would be imposed on employees as well as
employers, you might have a situation where an employee breaches
his or her implied duty of mutual trust and confidence by conduct
which was neither intentional nor negligent, but objectively caused
serious disruption to the conduct of their employer's
What does this mean going forward?
The rejection of the implied mutual trust and confidence term is
unlikely to thwart the trend of Australian courts and tribunals in
treating employment as a relationship rather than a binary division
of rights and obligations. In an employment context, the Barker
decision reaffirms the implication of duties of cooperation and
gives a green light for recognition of an implied duty of good
Courts will continue to recognise terms imposing obliging mutual
obligations of loyalty, cooperation, fairness and fidelity on
employers and employees, whether they be expressed in contracts,
incorporated by reference from human resources policies or implied
by reason of the specific circumstances of the industry or
workplace in which an employee works. Employers still need to be
careful about how those documents are drafted.
This publication does not deal with every important topic or
change in law and is not intended to be relied upon as a substitute
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specific circumstances. If you have found this publication of
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Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
Australian employees receive certain entitlements (such as annual leave and superannuation) where contractors do not.
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