In the much anticipated decision of the High Court in
Commonwealth Bank of Australia v Barker  HCA 32 (10
September 2014) a majority of the High Court held there was no
common law duty of mutual trust and confidence implied as a term in
an employment contract and overturned the Full Federal Court's
$317,000 damages award to a bank executive who brought the claim
against the bank.
The High Court considered whether, under the common law of
Australia, employment contracts contain a term that neither party
will, without reasonable cause, conduct itself in a manner likely
to destroy or seriously damage the relationship of trust and
confidence between them.
High Court moves away from judicial law making
In a decision that will be welcomed by employers around the
country, the majority of the High Court said the creation of a new
standard of that kind was a form of 'judicial-law making'
and 'not a step to be taken lightly'.
The majority went on to find that the implied term of mutual
trust and confidence imposes mutual obligations 'wider than
those which are "necessary", even allowing for the broad
considerations which may inform implications in law. It goes to the
maintenance of a relationship'.
Other implied duties concerning the conduct of employers and
employees remain in employment contracts
The majority of the High Court said that its rejection of the
implied duty of trust and confidence did not affect the existing
implied duty of cooperation, which prohibits conduct that would
frustrate the performance of a contract.
Further, Chief Justice French and Justices Bell and Keane said
their rejection of the implied term of mutual trust and confidence
does not impact on the question of whether there is a general
obligation to act in good faith in the performance of
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2010, 2011 and 2012
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2012 (Best Brisbane Firm)
Winner – BRW Client Choice Awards 2009 and 2010 - Best
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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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