Commonwealth Bank of Australia v Barker  HCA
The High Court has determined that the term of mutual
"trust and confidence" is not implied into every contract
of employment in Australia.
This judgment overturns the Federal Court's decision in
Barker v Commonwealth Bank of Australia, which found that
the Commonwealth Bank breached the implied term of trust and
confidence when it failed to consider redeployment opportunities
for one of its executive managers shortly before dismissing
This decision is good news for employers, as it alleviates the
concern created by the Federal Court decision that every employer
would potentially be liable for damages caused by conduct that
"destroys or seriously damages the relationship of trust and
confidence between itself and each employee".
What was the significance of the case?
The decision has allayed the fears of employers that the implied
term of mutual "trust and confidence" would be imported
into nine million Australian employment contracts: an outcome that
would have been a real game changer for Australian employment law.
The potential breadth of such an implied term would have created
uncertainty for employers when managing human resources risks. For
example, in the UK, where an implied term of "trust and
confidence" exists, the implied term has been used to sue
employers in a number of circumstances including:
lack of procedural fairness in workplace investigations
excessive workloads, and
unreasonable location requests.
The High Court's decision has certainly closed off the
avenue of contesting workplace decisions and actions on the basis
of an implied term of mutual trust and confidence. However, other
avenues still remain and are frequently used.
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.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
When employees engage in out-of-hours misconduct, it can negatively affect the reputation of the employer.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).