Implied Duty of Mutual Confidence as All-Embracing Super-Principle - Essay Example

? "The implied duty of mutual trust and confidence will evolve to form an all-embracing super-principle under which each of the more 'traditional' implied duties will rest" ( David cabrelli , ' the implied duty of trust and confidence :an emerging overarching principle?' (2005) 34 (4) ILJ 284 Introduction Under UK’s employment law, an employer is having an implied duty to exhibit adequate care for the well-being and welfare of the employees. Thus, under English employment law, an employer has the implicit duty of mutual confidence and trust. Thus, an employer should not to act in such a style that would damage or destroy the relationship of confidence and trust between the employer and employee as held in Hagen v ICI Chemicals and Polymers Ltd1. (Selwyn 2006:9.55).This research essay will make a best endeavour to find out whether the implied duty of mutual trust and confidence will evolve to form an all-embracing super-principle under which each of the more 'traditional' implied duties will rest Mutual Trust and Confidence under British Employment Law – An Analysis The traditional implied duties of the employer include to exhibit adequate care for the employees’ safety, health and welfare. Under common law implicit terms, the duty of reciprocal confidence and duty is being imposed on the employer to offer employment and remuneration, obligation of care as regards to safety and health and this is known as traditional implicit duties of the employer. In Johnson v Unisys Limited2, the meaning of the trust and confidence was explained as an “overarching duty vested by law as an incident of the contract of employment.” (Holland 2013:221). Generally , the implied duty to exhibit adequate care do not cover any financial claim under contract or tort law to facilitate an employee to seek fiscal relief where the employer has failed to warn , act or intimate the employee of some issues. In Visa International Service Association v Paul, where an employer infringed the implicit obligation of confidence and trust where the employer failed to intimate an employee about the creation a position for which she regarded herself eligible. This case law suggests that an employee can be triumphant if they file a claim of recovery of fiscal loss for a failure of the employer to inform her footed upon repudiatory infringement of the duty of confidence and trust. (Honeyball 2012:300). It is to be observed that the implicit obligation to exhibit adequate care as held in “Spring, Sally, Hagen, Eyett, Crossley and Outram “ cases, there was no financial relief extended to such an employee in the analogues’ scenarios. However, in Visa International, it conceived the duty of confidence and trust as an overarching principle diverse from the other customary implicit duties. (Collins, Ewing & McColgan 2012:139). Both in Brodin v A/R Seljan and in Smith v British European Airways Corporation, it was held that the obligation to exhibit adequate care functions as a compulsory, non-derogable rule of law. The above rule has been strengthened through the section 2 of the Unfair Contract Terms Act 1977 (UCTA) which states that any endeavour to contractually exempt accountability for death or personal injury will not be accepted. (Hepple 2005:154). Any effort to contracting out the implicit obligation or care will be void as held in Johnstone v Bloomsbury Health Authority3. Further, it is to be observed that the common law also obliges to exhibit adequate care for the safety of the employee through the section 2 of the Health and Safety at Work Act 1974. Section 3 (1) of the UCTA is applicable to a contract between parties where one- party deals as a consumer or on the other’s printed benchmark terms of business. (Chen-Wishart 2012:383). The contract of employment is also one of the forms of contract law, there is a close relationship between employment law and contract law as each and every employment law will have a mandatory clause that neither employee, nor the employer will operate so as to infringe the obligation of reciprocal confidence and trust that remains between them without adequate reason. In Brigden v Express Bank Limited,4 it was observed that a contract of employment was a guise of contract fall under the section 3 (1) UCTA. (Holland & Burnett 2007:99). In Chapman v Aberdeen Construction Group Plc, it was held that contract of employment is a consumer contract. Lord Steyn in Malik case observed that the implicit term of reciprocal confidence and trust, which functioned as a default norm. This was also confirmed in Johnson v Unisys Ltd case also. In Horkulak v Cantor Fitzgerald International, it was observed that if the quantum of the employee’s salary package warranted the non-application of the obligation of confidence and trust, it was held to be void. (Watson 1995: 323). In Western Excavating (ECC) Ltd v. Sharp,5 it was held that it is the duty of the employee to demonstrate the employer was responsible of conduct reaching to the root of the contract of employment and that the such infringement may be a real flouting of a contract or a disrespect of the implicit term of confidence and trust or its fair dealing. (Carty 1986:240). In Hilton v Shiner Builders Merchants6 , it was held that change of a job of an employee where there had been no charges of dishonesty or allegations would amount to deviation from the employment contract as it had been implemented without his consent. (Smith & Thomas 2007:150). In BG Plc v O’ Brie7n case, the defendant was not offered analogous terms of redundancy as compared his colleagues and this was held to be an infringement of mutual confidence and trust or their duty of fair dealing. It is further stressed that the court has to find out whether, looked impartially, the employer has functioned in a style likely to damage confidence and trust. (Austen-Baker 2011:60). In Quinn v Weir Systems Ltd,8 where an employee resigned on the fear that he might be selected for redundancy held that there was no breach of mutual confidence or trust by the employer. (Lexisweb.co.uk 2001). In Johnstone v W Wilson and Sons,9 the claimant was demoted, though the tribunal held that there was no constructive dismissal involved as his demotion was rational. Though, EAT held that the decision of the tribunal was unsound but there was no evidence of breach of contract as the demotion was footed upon his poor performance. (Thompsons.law.co.uk 2013). In Anderson v Pringle case, the court has applied the cannon of reciprocal confidence and trust for safeguarding the job security .In Powell v London Borough of Brent, it was held that the part played by reciprocal confidence and trust can be considered as safeguarding status. (Thompsons.law.co.uk 2013). An employee has the privilege to consider themselves as constructively dismissed from the employment if an employer has engaged in a fundamental or serious infringement of employment of contract. Some of the advantages of the reciprocal confidence and trust are that employer should not engage in one-sided decision to lessen an employee’s salary without his assent as it is regarded as a fundamental duty, not to single out the employee for unjust treatment, failure to examine into allegations of harassment or other grievances, failure to stop undermining or bullying the employee, etc. Judicial recognition of the reciprocal confidence and trust is mainly to stop exploitation of employees, and it attempts to stop abuse of authority by the employer as under common law also, such abuse of power will not be safeguarded. The implicit duty is arrived at by various judicial reviews, and it mirrors the foundation of private law policies, which has been observed to prevent employer’s authority over the employee. The main disadvantage is that a poor performing employee may use this provision to harass or threaten the employer as happened in Hilton v Shiner Builders Merchants and in Quinn v Weir Systems. There is a close nexus of reciprocal confidence and trust both in employment contract and contract law in UK, The Contract Act in UK is also governed by mutual confidence and trust by the provision of a valid consideration, contract should not be vitiated by fraud, negligence or undue influence, it should not offer undue authority to one contracting party, etc. Further, the English contract law demands that there is an implied duty on the contracting parties to carry out their duties in good faith. (Hardy 2011:79). UK government is endeavouring to reform the employment law by introducing no-fault dismissal where an employer is empowered to dismiss an incompetent employee without recognising any fault on the employee’s side, paying a fixed amount of compensation. The proposal facilitates the businesses to administer the performance of their staffs efficiently without incurring inflated costs and going through a time-consuming procedure. However, this has vehemently opposed by the pro employee associations that the proposal will destabilise the cannon of reciprocal confidence and trust that rests at the root of productive and positive employment relations. (Holmes 2012:8). Thus, reciprocal confidence and trust principle has acted to combat the exploitation of authority and abuse by the employer towards employee. Thus, the implicit term guarantees the balance of power in the employment contract from tilting towards employers’ side. The above case laws have corroborated that the implicit obligations will progress to form an all-embracing super-norm under which each of the customary implicit duties will rest. Thus, the recent case laws have highlighted the uniqueness of the obligations to exhibit adequate care and mutual confidence and trust. Conclusion Thus, the implicit term of reciprocal confidence and trust can be regarded as a significant term and acts as a fundamental and root of all employment contracts. From the increasing importance to such implicit term, we can understand that the employees’ privileges will be safeguarded adequately. Hence , the reciprocal confidence and trust cannon is now the crux of the employment law in UK, and its ever increasing significance in the UKs judicial system cannot be undermined. In view of the above, I fully agree the views of David cabrelli10 that “ the implied duty of trust and confidence is a budding dominant principle in employment law in UK as it safeguards the interest of the employees from the discretionary powers by employers. “ List of References Austen-Baker, R. (2011) Implied Terms in English Contract Law. London: Edward Edgar Publishing. Carty, H. (1986). Contract Theory and Employment Reality. The Modern Law Review, 49(2), 240-245. Chen-Wishart, M. (2012). Contract Law. Oxford: Oxford University Press. Collins H, Ewing K & McColgan A. (2012). Labour Law. Cambridge: Cambridge University Press. Hardy, ST (2011) Labour in Great Britain .London: Wolters Kluwer Hepple, B A. (2005). Labour Laws and Global Trade. London: Hart Publishing. Holland, J. (2013) Employment Law. Oxford: Oxford University Press. Holland, JA & Burnett S. (2007) Employment Law. Oxford: Oxford University Press. Honeyball, S. (2012). Honeyball and Bower’s Textbook on Employment Law. Oxford: Oxford University Press. Lexis.co.uk. (2001). Quinn v Weir Systems Ltd. [online] available from [accessed 9 December 2013]. Painter, R. (2012) Cases and Materials on Employment Law. Oxford: Oxford University Press. Selwyn, N. (2006). Selwyn’s Law of Employment. Oxford: Oxford University Press. Smith I & Thomas G. (2007) Smith & Thomas Employment Law. Oxford: Oxford University Press. Thompsons.law.co.uk. (2013). Breaching of Trust and Confidence: Latest cases. online] available from www.thompsons.law.co.uk/ltext/l0960005.htm [accessed 9 December 2013]. Watson, L. (1995). Employees and the Unfair Contract Terms Act. Indus. LJ, 24, 323. Read More