| A new avenue for employee claims |
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In late February 2007, a Justice of the Supreme Court of New South Wales became the first Australian judge to find that the implied term of 'mutual trust and confidence' does apply to employment contracts. This decision marks a significant step in the common law of employment in Australia. While WorkChoices has decreased unfair dismissal claims; this term provides a new avenue for employees and will potentially lead to an increase in claims made by employees against employers alleging breach of contract. Justice Rothman delivered this finding in the case Russell-v-Trustees of Roman Catholic Church, which concerns the manner in which the employer had conducted an investigation into an allegation of impropriety against the employee. While this legal issue is still to be determined by an appellate court, Justice Rothman held that under the common law of Australia, employment contracts contain implied terms to the effect that:
The term has far reaching implications for employers, and no matter how well-intentioned, all employers must act with care. Whilst WorkChoices has reduced employment regulation, this term increases the importance of general principles in employment relationships. Claims may be brought for a broad range of reasons, even where there is not any direct maltreatment and the employment relationship has ended. Employers can enhance their employment policies and reduce the risk of claims by:
For more information on the potential implications of this decision, please go to the publications area of our website www.macrossans.com.au and view section four of the published paper Implied Terms In Contracts by Andrew Knott and Belinda Weir.
Further information:
Belinda Weir |