COURTNEY MCNISH

As so many of you may be aware, a contract of employment is a unique agreement. Indeed, when parties enter into this contract, many individuals are unaware of all the terms and conditions contained therein. This truism may apply to both the intended employer as well as the candidate employee.

If you are puzzled by this reality, you are not alone, as all contracts of employment contain both written and unwritten terms and conditions. These unwritten terms and conditions are more legally defined as implied terms, with which this article is concerned.

The implied terms of a contract of employment are just as important as the expressed terms and weights equally for both the employee and employer.

One of the most troublesome and controversial of these implied terms is the principle of mutual trust and confidence.

What are the rights and obligations that this principle requires parties to observe and honour?

There have been many judgments from the English jurisprudence as well as our Industrial Court with regard to the importance of trust between employer and employee, and yes, as previously said, the term applies to both parties in the relationship.

The term came from case law and obliges both parties not to act in any way that is calculated to, or likely to, breach trust and confidence without which it impossible to sustain the employment relationship. The principle is based on a rational concept of behavioural expectations.

An employee should not be expected to work in an environment where:

• Employees are constantly making unfounded or abusive comments about him/her without any intervention from the employer

• It is made impossible for him/her to do their job, by for example, by giving them too much work or not responding to their requests for help with their workload

• Disciplinary actions are unfairly taken against the employee

• Exercising discretion (for example to award a bonus) in bad faith

• Using (or permitting others to use) foul, offensive or discriminatory language in the workplace, without intervention.

The examples above are based on the premise which supports the expectations that the parties involved in an employment contract ought not to act in a manner that undermines the relationship. This duty to act and behave consistently with expected standards was first established by the House of Lords in its decision in Malik v BCCI [1997] IRLR 462.

Malik was unable to obtain employment after his company (BBCI) crashed owing to its international criminal conduct. He sued and it was the unanimous view of the Lords that: “On the premise that BCCI had operated its business in that manner (criminal conduct), BCCI was in breach of that implied term trust and confidence, and the employees could, in principle, recover damages for their losses caused by the stigma resulting from their association with BCCI.”

As a direct result, this implied term became incorporated in all contracts of employment. Some labour-law scholars now talk of the duty of good faith as an attach