Employment Law

Mutual trust and confidence in Australia – again…

I have said it here before – Australia’s workplace rights are becoming more and more similar to New Zealand’s. Here’s another decision, this time from the Australian Federal Court, confirming that there is an implied term of mutual trust and confidence in every employment relationship. Whereas in New Zealand such term is a part of every employment relationship by statute law (s3 Employment Relations Act – ‘implied obligations of trust and confidence’), Australia’s Fair Works Act does not have such provision. So it is quite remarkable that the Court went beyond and outside the scope of the legislation and implied such a term.

This seems to be in line with a general recognition that employment relationships, are unlike any other contractual relationship. People are not dealing at an arms length here. They cant just walk away when a problem arises. And the relationship (contract) cant work if you cant trust the other side. 

Note though that the decision is under appeal, but I think its a safe bet that it will be upheld.