No implied duty of trust and confidence in Australia3 December 2014
The High Court, on 12 September 2014, handed down its highly anticipated ruling on the Commonwealth Bank’s appeal against the Full Federal Court ruling that it breached an implied term of trust and confidence in an executive’s (Mr Barker) employment contract.
Previously a Full Federal Court in a two to one majority decision found that the Commonwealth breached an implied term of trust and confidence. The Federal Court case stood for the position that the doctrine of trust and confidence applies in Australia. The doctrine can be stated that the employer has a duty of trust and confidence to the employee and that if that trust is breached, the employee can sue the employer for damages. The doctrine has had a chequered history in Australia and, over the last 15 years, there was considerable doubt about its existence and applicability in the Australian context. The High Court’s decision has emphatically decided that the doctrine of trust and confidence, although well-established in Great Britain, has no place in Australia.