High Court to Examine Whether There is an Implied Term of Mutual Trust and Confidence in Australian Employment Contracts

By Adriana Orifici

The High Court has granted the Commonwealth Bank leave to appeal the decision of a majority of the Full Court of the Federal Court in Commonwealth Bank of Australia v Barker [2013] FCAFC 83 (Jacobson and Lander JJ, Jessup J dissenting), which recognised that an implied term of mutual trust and confidence (the Implied Term) exists in employment contracts in Australia. In the special leave application, the issues in dispute were described as giving rise to a ‘test case’.

In Australian employment contracts, terms may be implied in fact or in law.

The Implied Term is implied in law and requires that a party to an employment contract will not, without reasonable cause, conduct themselves in a manner likely to destroy or seriously damage the relationship of confidence and trust between employer and employee. Continue reading