An interesting case arose recently in the High Court of Australia (‘HCA’) when a loyal employee took on his former employer, one of Australia’s largest banks.
Mr Barker had been employed by the Commonwealth Bank of Australia (CBA) for about 18 years in its financial services sector, which was being restructured.
On 2 March 2009, Mr Barker was told by his bosses that the bank had decided to make him redundant. The bank was going to try and find Mr Barker another suitable position within the bank (‘the redeployment’), but failing that, he would be terminated four weeks later (‘the notice period’). Mr Barker was told to spend the rest of the day cleaning out his desk, but not to return to work the following day, or for the remainder of the notice period. At the same time Mr Barker’s access to his work email account and his work voicemail messages was blocked.
On 20 March 2009, members of the bank’s management sent correspondence to Mr Barker’s work email, seeking to assist Mr Barker with the redeployment. Having no access to his work email, Mr Baker did not receive that correspondence until it was passed onto him later on 26 March 2009.
Having received notice of the possible redeployment initiative only days before his scheduled termination, Mr Barker argued that he had lost the chance to participate in the redeployment process.
Mr Barker was covered by a written employment contract (‘the contract’) and his termination had largely been conducted in accordance with it. Mr Barker argued however, that although it did not appear in the writing of the contract, the court should imply into the contract a term that the bank would maintain trust and confidence with [Mr Barker] (‘the term of trust’). Mr Barker further argued that, because of the failure on the bank’s behalf to properly notify him of the redeployment initiatives, the bank had breached the term of trust, which he asserted to be implied.
Mr Barker won his argument in front of a single Judge of the Federal Court of Australia (‘FCA’), but the bank appealed to the full court (seven Judges) of the FCA, where Mr Barker won again. The bank then appealed again to the High Court of Australia (‘HCA’), which is the last right of appeal in the Australian court system.
Mr Barker lost in the HCA. The HCA said that the term of trust could not be implied into the contract because it was not necessary for the contract to act effectively. The fact that such a term may have made the contract more reasonable, was not enough to force its implication.
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