The Development and Significance of the Implied Duty of Mutual Trust - Essay Example

Discussion of the Development and Significance of the Implied Duty of Mutual Trust and Confidence 2211 words Overview In an employment contract, the employer subjected to the implied term of mutual trust and confidence. This forms part of the obligations of the employer1. The employer acts with reasonable means in order not to destroy or cause damage to the relationship of trust and confidence that already exist between the employer and the employees. The terms of mutual trust and confidence have taken a central duty in the law of contract of employment. It is the most powerful rule in the modern law of employment contracts. It has thus formed the pillar of the legal construction of employment contacts. The implied duty has formed part of the law of the contract of employment for over 70 years2. It has established as a duty used, by courts, to compel the employers to conduct themselves carefully. This essay focuses on the development and Significance of the Implied Duty of Mutual Trust and Confidence. It will also consider juridical nature, content and wide duty of trust and confidence. Implied Terms in the Contract of Employment The implied terms enable the courts to achieve justice between the employer and the employee. These terms apply using the ‘officious bystander’ test or using the law test. In the officious Bystander’ Test, the courts do not depend on the statutory requirement3. It implies terms which haves not been expressly agreed by the parties. A case law applies in the Moorcock case six. While the parties bargained, the bystanders suppressed the whole thing saying, ‘Oh, of course’. Terms Implied by Law apply in cases where a contractual term implied on the basis and not on the intention of the parties4. They depend on the nature of the contract. This applied in Becton, Dickinson Ltd v Lee 10. The Court held that an implied term read into every contract of employment on conditions of notices of termination’ the notices should allow adequate time to terminate the contract. In either case when determining the judgments the ruling authority influenced by the express and implied contractual terms agreed by the parties. The case of Courthaulds Northern Textiles Ltd in the late 1970’s implied a duty formulated. Employers should not behave in a way likely to damage the trust and confidence between the parties. The House of Lords, however, rejected the decision and asked a consideration in the case in which an employer was conducting a corrupt and fraud business. The plaintiffs in that case had not been involved in the corruption but suffered financial losses and harm to their reputations. Their employment terminated for redundancy as the bank liquidities due to corruption and dishonest allegations. The plaintiffs declared how difficult it was for them to find other jobs. This was not their wrong doing anyway but due to the implied term of confidence. They sought ways to recover their losses without success. Their reputations damaged especially in the financing sector. The House of Lords said that the employer’s conduct was a breach of duty to ensure trust and confidence, which affected an employee’s future employment prospects. Lord Nicholls and Lord Steyn said that if one agrees to work with an employer, them cases of dishonest and fraud not tolerated. In case one found guilty of such cases then, he or she dismissed immediately. A breach of this term characterized with a reputation that leads employees into resigning or terminating their contract. Employees rely, on the implied term of mutual trust and confidence, to get greater damages than those traditionally available for breach of contract5. In Addis v Gramophone Co Ltd23, the House of Lords said that the employee could not recover damages if dismissed for wrong behaviors as theft or corruption. The Chief Justice, Kennedy, objected and said that breach of contract damages given to cover up disappointment of mind and humiliation and the fact of the possibility of employee’s future employment prospects handicapped. The implied term of trust and confidence has proved as used by employees seeking redress against their employers. In Gogay versus Herts CC30, the issue was to find out if the defendant local authority acted right by suspending the employee from her post6. This might have happened as they investigated the events surrounding a child who lived in that home. The investigation showed that there was no case to answer. The employee suffered psychiatric illness and financial loss upon losing her job. The implied term of confidence and trust requires that an employer not involved in activities to lower the trust and confidence given to him / her by employees for a good relationship. It, however, focuses on the possible damages and injuries associated where the employer entitled to cater for the employee’s injuries. Hale LJ had serious considerations on whether the authority’s conduct amounted to a breach of this implied term, but had the opinion that the conduct is one that destroys or seriously damage the relationship. This conduct not only suspended the employee verbally but a letter used. The allegation based on sexual abuse not tolerated. The situation was difficult to evaluate. In differentiating, the two types of suspension i.e. Punitive & Holding Barr J the high court judgment of Morgan v Trinity College367. The plaintiff employed as a senior lecturer Trinity College, Department of English. He suspended with pay another case involved a complaint made by a female for physical intimidation and harassment. Restraining employees from work and embarking them on a disciplinary inquiry has occurred. It resulted, in failure, to comply with natural justice. The employer was not to challenge his accusers during the investigation, and the suspension was invalid. This was because it had a second suspension and had stayed long enough. Suspension amounts to a sanction such that can invoke concepts of natural justice or give rise to an inference that the person concerned found guilty of significant misconduct. It is crucial to distinguish between a holding suspension and a punitive suspension. The implied terms allow the court to achieve justice between employees and employers especially where the express terms of the contract and existing statutory board become inadequate to the task8. The mechanism of the law may apply when the contractual term implied on the basis and not on the intensions of involved parties and not according to contract itself. The Supreme Court holds that an implied term read into every detail pertaining giving notices to terminate the contract. These details should have a suitable provision notice for contact termination among other notices. Another mechanism of implying terms is by use of the officious bystanders test. The court does not dependent on statutory requirements. It implies terms not expressly agreed by the parties. An example is the Moorcock case where a term not expressly agreed by the parties inferred based on pre assumed intensions. Implied terms develop in the context of constructive dismissal and employer’s right to dismiss an employee without notice. The authority then passes judgment depending on the express and implied contractual terms agreed by parties. Whether the law test or the out standers test used to pass judgment, a term not implied into a contract or the surrounding circumstances. The implied term of mutual trust and confidence develops to the extent of becoming wide enough to accommodate the traditional implied terms. In case, it does absorb the traditional implied terms then it becomes a super principle. It then manifests itself as a significant, high in level above the implied duties. Such a super principle has two possible effects on the relationship between the mutual trust and confidence. For instance, exercising reasonable care for the employees and remaining employer orientated implied duties. The mutual trust and confidence would be greater than the estimates of each group. It could then occur that the law at a point is inapplicable based on the implied duty to exercise reasonable care. As the concept of mutual trust and confidence pitched at a high level, it forms an all embracing though distinct concept in that the process of making rules in not possible. This concept of mutual trust and confidence is not applicable while the collection of implied duties directly equates the scope to the overarching concept of mutual trust and confidence. The rule of the implied duties should not conflict the super principles of trust and confidence. In case of a court case then the employers implied duties should be consistent with the expression of the doctrine of trust and confidence. There should be no cases that relief is available in favor of one implied duty while it denies the superior principle the opportunity of trust and confidence. The vice versa also applies. The summation of each of the implied duties should not exceed the concept of mutual trust and confidence. Any argument arising that disputes the super principle negated. Thus, mutual trust and confidence in such a case regarded as equality of other implied duties. Each of the implied duties treated as if they operate separately and they are standing alone at diverse levels of juridical developments. Issues relating to employment law As a matter of tort or contract law, the implied duty to exercise is unavailable. This allows an employee to speak out financial problems upon failure of the employee to act or inform employees of rising matters. The employee entitled to financial relief and reasonable care in matters to do with finance. An example is the case of visa international held an employer upon breaching of the implied duty of confidence and trust. In this case, the employer failed to tell the employee of an emerged post for which she felt was suitable for her. The employee may raise a claim for recovery of economic loss due to the failure of the employer to pass the necessary information thus breaching the duty of trust and confidence. However, no financial relief is available for the employee in such cases. The result of the visa international shows the duty of trust and confidence as a premise distinguishable from the traditional implied duties. The misunderstanding between the duty to give reasonable care, confidence, and mutual trust are evident in these cases. It, however, seen that the implied duty plays a significant role in the employment law. Basic principles of employment law in the UK The UK government has employment laws that bring harmony between employees and employer. The three sources i.e. common law, statue law and the European law. The common law is the law of contract. It forms the relationship between the employee and his employer9. An employment contract usually recorded or in written documentation. Parties involved chose the appropriate contract although mandatory statutory employment protection rights apply. The law of tort governs matters like employee’s liability to industrial accidents and employer’s liability for the acts of its employees. The statue law accompanied with employment protection legislation. Legislation supported by practice codes from various government agencies. Employment Tribunals consider these codes when deciding if an employer has compiled with its statutory rules. This works hand in hand with the employment law statues including Employment Tribunals Act 1996, Employment Rights Act 1996, the minimum working wage act 1998 and employment relations act 2004. The European Law is one that particularly emphasizes on equal pay, employee rights on business transfer and fight against discrimination. The European court of Justice is the final arbiter in matters to do with interpretation of European legislation. It is essential when judgments in the interpretation of duties and responsibilities of European directives made. Conclusions Mutual trust and confidence is a commonly implied term in an employment contract. There should be mutual trust and confidence by the employer to the subordinates. The employer must not be weird in a manner that makes employees loose trust in him / her. The employer ensures none of the employee suffers from any form of harassment and bullying while at the workplace. The employee too has to respect and have a firm faith in the employer. The working environment should be safe with all the necessary resources with all equipments in proper working conditions. Confidentiality should be highly maintained, as the employer tends to know individual employees better than the other staff. Behaviors that demolish, the trust and confidence include demotion of an employee, employers using offensive or inappropriate language towards employees, invasion into the private life of an employee, bullying, and harassment. Other behaviors are failing to listen to an employee’s grievance. The employer then gives unwarranted disciplinary action against the employee. Such behaviors can lead to the employee suing the employer. References B, Aaron. Industrial Law Journal, Vol. 31 (2), (2002) p113-134, 22p. C, Indira & l, David, Industrial Law Journal, Vol. 39 (1), (2010), pp 52-81, 30p. 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