The Loss of Mutual Trust and Confidence Part II
– what does it mean for your employment documents?
So, you have gone to the trouble of making sure you have an
employment agreement with all of your employees, and you have
employment policies in place. That should mean that if you have a
problem with one of your employees, or you decide you need to
restructure your workforce, it should be easy, right?
Well, perhaps not.
Our previous blog discussed how the recent High Court decision
in the case of Barker removed the implied term of mutual trust and
confidence from Australian employment agreements. This can
significantly impact how businesses handle restructuring their
workforce or terminating employees. But now that the implied term
is gone, what does that actually mean for your employment
Firstly, let's go back to basics:
Do you have employment agreements in place with ALL your
employees, including your high level and managerial staff
Do you have employment policies in place
Do these employment agreements and policies comply with the
employment laws, and are they appropriate both for your employees
and your industry?
And, perhaps most importantly, are you actually complying with
your employment agreements and policies?
While the Court in Barker found there was no implied term of
mutual trust and confidence, they did find that the employer had
not complied with their notice obligations as set out in the
employment agreement. We often see employers who have very well
drafted employment agreements and policies fall down at the last
minute because they have not actually gone through the steps that
their agreements say they should when they go to discipline or
terminate an employee.
If you are disciplining or terminating employees, or
restructuring your workforce for any reason, you should seek legal
advice on Employment Law to minimise the risk of a costly and time
In our next blog, The Loss of Mutual Trust and Confidence Part
III, we will discuss the principle of "good faith" and
how this may impact your employment arrangements and
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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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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