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Mutual Trust and Confidence

Some of our other articles have highlighted that the Fair Work Act seems to be forever changing, with new obligations falling on employers as a result of changes to the legislation. The Full Court of the Federal Court has now added to the changing landscape in a decision made in the case of Commonwealth Bank of […]

Mutual Trust and Confidence

Mutual Trust and Confidence

By Aylward Game - Aug 29, 2013 Employment Law

Some of our other articles have highlighted that the Fair Work Act seems to be forever changing, with new obligations falling on employers as a result of changes to the legislation. The Full Court of the Federal Court has now added to the changing landscape in a decision made in the case of Commonwealth Bank of Australia and Barker.

In this case the court held that there is an implied term of mutual trust and confidence within all Employment Contracts. This has long been recognised in England and Wales and now appears to be part of all employment relationships in Australia. In that case the court decided that a breach of that implied term by the employer can result in the employee being able to claim damages. It will be interesting to see whether the courts take the same approach in the event that an employee is found to have breached that implied term of mutual trust and confidence.

This consideration is likely to be particularly relevant in the event an employer is considering any disciplinary proceedings against an employee or when considering the possibility of redundancies. This is a complex area and you should always seek expert advice before taking any steps.

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