A new implied term?
A recent discussion in the Court of Appeal seems to have opened up the possibility of an implied duty to act fairly in disciplinary processes, separate from the obligations under the implied term of trust and confidence.
Employment contracts are comprised of express terms (the ones to which the parties expressly agree) and implied terms (the ones left unsaid). Implied terms are ones that are necessary to give ‘business efficacy’ to the contract, or it is so obvious that it goes without saying or they can be imposed by conduct, custom or as a characteristic of contracts of a particular kind.
Employees are generally regarded as having the following as among the terms implied into their contracts of employment: obeying lawful instructions, exercising reasonable care and skill, and showing loyalty and good faith. A repudiatory breach of any of these terms may, depending on the circumstances, entitle the employer to terminate the contract.
Among the duties commonly implied on employers are the duty to pay wages/salary, the duty to provide a safe system of work and a safe workplace, and the duty a maintaining a relationship of mutual trust and confidence.
A discussion by two Court of Appeal judges (who are experts in employment law), in a case about the construction of a particular disciplinary/capability policy (Burn v Alder Hey Children’s NHS Foundation Trust), appears to have opened up the possibility of another implied duty of employers. The case itself isn’t really of interest as it was decided very much on its own facts and broke no new legal ground. What is of interest however are the musings of the two judges on whether, and in what sense, there exists/should exist an implied duty on the employer to act fairly towards the employee in disciplinary proceedings. Such a duty could be independent of the implied term of trust and confidence. Both judges made clear that they weren’t deciding this issue but rather flagging it up. Their comments were what the law calls ‘obiter dicta’, in other words, a judge’s opinion but not essential to the actual decision. Despite this caveat, it’s a case of ‘watch this space’ as future litigants may well see the worth of raising such an issue directly.