IMPLIED TERM OF MUTUAL TRUST AND CONFIDENCE

The recent Federal Court decision of Commonwealth Bank of Australia (CBA) v Barker [2013] sets an important new precedent for employment law. For the first time in Australia, an implied term of mutual trust and confidence has been incorporated into an employment contract, and damages awarded for a breach of that term.

The implied term of mutual trust and confidence has been recognised by UK courts since the 1970s, but until now has not found a home in Australian common law.

The employee, Barker, was an executive manager at CBA. Barker's employment contract required CBA to consider redeployment opportunities prior to termination. When CBA moved to make Barker redundant, not only did they fail to consider redeployment opportunities, but they withdrew his email and phone facilities without notifying the redeployment officer. The redeployment officer had made a number of unsuccessful attempts to contact Barker by phone and email.

The court held that the implied term of mutual trust and confidence existed as part of Barker's employment contract and the CBA had breached this implied term when it failed to consider redeployment opportunities and withdrew Barker's email and mobile phone facilities, damaging the relationship of confidence that existed between the bank and Barker.

Barker was awarded $335,623 in damages for breach of the implied term.

ALLEGED HARASSMENT AT ENERGYAUSTRALIA

A former executive is pursuing reinstatement and $1m in backpay in a Federal Court general protections claim based on allegations of sexual harassment and the poor handling of her subsequent complaints.

EnergyAustralia's former director of corporate and government affairs has told the Federal Court she was sacked in February last year because she complained about being physically harassed by a male colleague at a work function in Hong Kong in 2010, and then made further complaints about how the company, including the managing director, had followed the incident up.

The company denies the director was dismissed over the sexual harassment complaints, claiming she was made redundant as part of a restructure.

The case continues.

BROTHER VS BROTHER IN COURT

An employee who told his operations manager to go and get lost (in an abusive fashion ), walked off the job and then told his brother – who was the owner and managing director of the business – that he could not work with the operations manager any more has failed to convince the Victorian Magistrates Court that he was constructively dismissed.

The employee went to his brother's house(the managing director) to tell him what happened, but by the time he arrived, the operations manager had already spoken to the managing director.

The managing director and his brother spoke about the issue and the brother responded: "I don't want to work with that snotty nose {***} anyway and I will look for another job".

The managing director took the brothers statement as a resignation. He said his brother rang him two days later and told him he felt he had been sacked. The brother had been to see a solicitor and claimed that he had not resigned.

The two brothers were the only witnesses in the case, which centered on whether Allianz had the power to refuse to pay the employee weekly workers' compensation payments after his employment ended.

The Magistrate found that the brother had resigned and rejected the brother's argument that the incident amounted to a constructive dismissal.  Notwithstanding this, the Court found that Allianz should not have refused the brother workers' compensation payments.