Employment Law – What does “The Implied Term of Mutual Trust and Confidence” Mean?

Every contract of employment has an “implied term” that the employer “shall not conduct itself in a manner, calculated or likely to destroy the mutual trust and confidence between employer and employee” as held in the authority of Kaur v Leeds Teaching Hospitals NHS Trust [2018] EWCA Civ 978 (01 May 2018) at paragraphs 38(2)(4):

“It is an implied term of any contract of employment that the employer shall not without reasonable and proper cause conduct itself in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee: see, for example, Malik v Bank of Credit and Commerce International SA [1998] AC 20, 34H-35D (Lord Nicholls) and 45C-46E (Lord Steyn). I shall refer to this as ‘the implied term of trust and confidence’.”

“The test of whether there has been a breach of the implied term of trust and confidence is objective. As Lord Nicholls said in Malik at page 35C, the conduct relied on as constituting the breach must ‘impinge on the relationship in the sense that, looked at objectively, it is likely to destroy or seriously damage the degree of trust and confidence the employee is reasonably entitled to have in his employer’.”

In the case of Morrow v Safeway Stores [2002] IRLR 9 the Employment Appeal Tribunal held that:

“Conduct which amounts to a breach of the implied term of trust and confidence will mean that there has been a fundamental or repudiatory breach going to the root of the contract’.

This is significant; in laypersons terms, it means that the onus is on your employer not to abuse its position of power, or that power which it delegates. Put shortly, the employer shall not conduct itself in a manner which is “calculated” or “likely to destroy” the “mutual trust and confidence” between employer and employee.

Should the employer “act” harshly, oppressively, unreasonably, unfairly, capriciously or arbitrarily during the grievance, disciplinary, capability or sickness absence procedures, then the employee may have the right to resign and claim ‘constructive unfair dismissal’ due to the employer’s failure to observe the “mutual trust and confidence”.

You won’t find the words “mutual trust and confidence” in your contract of employment. When you lodge a letter of grievance to enter the grievance procedure, make it very clear that you expect your employer to observe the “mutual trust and confidence”. Your employer is obliged to provide you with a fair and impartial grievance procedure, see case law below.

“A Fair & Impartial Grievance Procedure”

Wigan Borough Council v Davies [1979] ICR 411
An implied term in contracts of employment is that the employer will provide reasonable support to ensure that the employee can carry out his/her duties without harassment or disruption by fellow workers; and where an employer has an obligation to take reasonable steps to achieve something and takes few or no steps, the onus of proving what steps would have been reasonable is on the employer.

Bracebridge Engineering Ltd v Darby [1990] IRLR 3 EAT
A failure to seriously consider a genuine grievance, or to operate an ineffective grievance procedure could be grounds for constructive dismissal.

Goolds v MccOnnell [1995] IRLR 516
The duty to reasonably and promptly afford an opportunity to employees to obtain redress of any grievance they may have.

Spink -v- Express Foods Limited [1990] IRLR 320
“It is a fundamental part of a fair disciplinary procedure that an employee know the case against him. Fairness requires that someone accused should know the case to be met; should hear or be told the important parts of the evidence in support of that case; should have an opportunity to criticise or dispute that evidence and to adduce his own evidence and argue his case.”

Click here for a list of cases regarding “mutual trust and confidence”.

Click here for a list of legal terminology, which you can use within your grievance letter to your employer

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