The Impact of Case Law on the Duty of Trust and Confidence in the English Legal System

Abstract

It is now established in employment law that an implied term of trust and confidence exists in the contract of employment which subjects’ parties to a duty not to conduct themselves without reason in such manner that will likely destroy or damage the existing trust and confidence between them. This duty developed from the duty of cooperation and has since assumed a central role in the contract of employment. Constructive dismissal under the Industrial Relations Act 1971 enhanced the popularity of the implied term of trust and confidence since it requires an employee to demonstrate that a contract was repudiated due to an employer’s breach of the contract.

Despite it being a mutual obligation on both parties, its effect on the employer has raised more issues in the courts than that on the employee. This may be based on the public view that employees are the weaker party in the contract and as such should be protected. On the other hand, an employer may use this implied term as a defence for dismissing an employee without notice.

Case-law has played an important role in the development of the employer’s duty of trust and confidence and parliament is yet to put in place a statute to constrain it or set out guidelines for its further development . There have been many arguments on the origin of the mutual trust and confidence. However most courts and employment tribunals have adopted the principle in Woods v W.M. Car Services (Peterborough) Ltd where Browne-Wilkinson J stated that “….employers will not without reasonable and proper cause, conduct themselves in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee.”

In this paper, the discussion shall be firstly, how the courts have extended or limited the scope of the employer’s duty of trust and confidence since Woods v W.M. Car Services and secondly factors which may affect the further development of the employer’s duty of trust and confidence.