W3 - Implied Terms

Implied term of mutual trust and confidence

Sets out min standard of conduct / justified by imbalance of bargaining power / breach = repudiation of employment

Academics on implied term of MTC (F, C and H)

Freedland: ‘most powerful engine of movement in the modern law of employment contracts’ / Hugh and Collins: ‘MTC has been one of the most remarkable and significant developments of the common law of the contract of employment’

MTC case examples

Post Office v Roberts - manager carelessly made a mistake / Isle of Wight Tourist Board v Combes - director spoke badly of Combes to another employee / Bournemouth Uni v Buckland - changed professor’s marks without consulting him

Arbitrariness and irrationality in discretionary decisions

Discretionary decisions must be rational and in good faith

Performance in good faith - cases

Sec of State for Employment v ASLEF - employees have implied term to cooperate / British Telecoms v Ticehurst - employees have duty to sere employers faithfully (trusted by employer, doesn’t have to harm business interests)

Loyalty and confidentiality - case examples

Bell v Lever Bros - no duty disclose misconduct to prior breaches when negotiating a severance package (unless employee lied as part of a cover-up = fraud) / AG v Blake - express terms can be used to continue confidentiality even post-employment

Loyalty and confidentiality - overview

Employees have to respect company’s privacy and vice versa / senior roles have enhanced fidelity duty / fiduciary vs contractual duty of loyalty (FD = director and company, CDL = contract, narrower than FD)

Further implied terms

Lawfulness (employers must remain within legal constraints) / health and safety risks

Health and safety/lawfulness case

Barber v RJB Mining - employer not entitled to enforce 48 hours of work per week (contravened Working Time Regulations) - these duties can even take precedence over express terms

Tax evasion case example

Hall v Woolstone Hall - test for what counts as participation in tax evasion for priorities / illegality test - employment claims only barred if employee knew + actively involved in illegality

Immigration - overview + case

Employers have a duty to select employees with right to work / links to Hounga v Allen (even though illegal, right to not be discriminated - shows limits of illegality)

Malik v BCCI (MTC) - facts

Malik v BCCI / M long-serving senior employee - bank collapsed due to corruption, M dismissed under redundancy = disadvantaged strenght in the labour market

Malik v BCCI (MTC) - Ruling + Lord Nicholls quote

Lords ruled in Malik’s favour - established default obligation of ITMTC, includes that employers will conduct honest business / recognised dependency in employment contracts / Lord Nicholls: ‘bank under an implied obligation not to conduct a dishonest or corrupt business’

Transco v O’Brien - overview + LJ Pill quote

Transco gave enhanced redundancy package to employees, left out O’Brien mistakenly / Court ruled in OB’s favour - singling out employees arbitrarily is wrong, even if it was just a mistaken belief / LJ Pill: ‘to single out an employee on capricious grounds… is a breach of the ITMC’

United Bank v Akhtar - overview

United Bank v Akhtar / A worked at UB - told to move to another branch within 6 days (contract had a mobility clause) - bank gave no extra money or time, A forced to resign (constructive dismissal) / EAT ruled in A’s favour - written rules don’t give bosses unlimited power

Academic - Freedland - overview

Freedland argues binary distinction between contract of employment and for services = too rigid, doesn’t reflect complexity of modern relationships / proposed broader ‘personal employment contracts’ concept / labour law can’t be understood purely through orthodox contract law

Academic - Collins - overview

Collins distinguishes between terms implied in fact vs by law / ITs important = framework for fair dealing, prevents unfair treatment and exploitation / IT’s protective function helps to correct power imbalance between employers + employees / ITMC not enough - procedural fairness needed too

Academic - Collins - case + argument

Burn v Alder Hey’s NHS Foundation - Court suggested possible IT to act in accordance with procedural fairness during disciplinary procedures / Collins supportive / good normatively (responds to employees’ vulnerability) + specifically (achieves fair balance between specific parties)

Academic - Brodie - overview

Brodie examines ITMTC - significant because helps employees’ dignity, loyalty and expectations / introduces reciprocal obligations - can correct power imbalance, moves law from a narrow, transactional understanding

Academic - Sanders - overview

Sanders argues that recent cases suggest increasing fairness (despite Johnson v Unisys establishing how employees can’t claim damages for the distressing manner of their dismissal (purely procedural, not a substantive issue) / Sanders argues law should develop for more fairness (incremental judicial developments = uncertain and uneven protections)

Spring v Guardian Assurance

Spring v Guardian Assurance / IT to provide employees with reference / employers should care for physical, financial and even psychological welfare of the employee

Johnstone v Bloomsbury

Johnstone v Bloomsbury / J worked at a uni hospital - 40 hour basic week plus 48 hour on call / extreme workload = health impacts / court ruled employers have implied duty to care for employee’s health - overtime power is discretionary, mustn’t breach IT

Edwards v Chesterfield Royal Hospital

Edwards v Chesterfield Royal Hospital / SC reinforced the Johnson Exclusion Zone (MTC doesn’t apply to act/manner of dismissal - only procedural)

Bates v Post Office

Bates v Post Office