An employee who claimed that the employer breached implied contractual terms of cooperation and good faith has failed in proceedings before the Federal Court of Australia. The Court ruled that neither of the implied terms relied on by the employee were part of Australian law.
The case is the first to consider the applicability of these implied terms since the decision by the High Court in Barker and confirms the difficulty which confronts any plaintiff employee in Australia seeking to rely on general implied terms as a basis for complaining about the behaviour of the employer.
The applicant was employed within a state government department.
He was implicated in offensive and insubordinate behaviour meted out to the leader of the team of which he was a member. As a consequence the applicant received a severe reprimand from a more senior manager. The applicant complained about the senior manager’s behaviour.
During the course of the subsequent investigation the applicant became unwell and submitted a claim for workers compensation.
The investigation found that the senior manager had breached the applicable code of conduct because the reprimand had been couched in somewhat abusive terms. It was recommended that the senior manager receive counselling and that there be a mediation between him and the applicant.
Meanwhile, the applicant had remained absent from work and in receipt of workers compensation benefits. Following a conciliation hearing, the workers compensation dispute was settled.
Disagreement developed over the implementation of the settlement, particularly in respect of the applicant’s return to work and the date on which compensation payments were to be discontinued.
The applicant resigned from employment and commenced proceedings for compensation under the Fair Work Act 2009 (Cth) on the basis that he had been the victim of unlawful adverse action. In essence, the applicant claimed that the reprimand, the investigation and the workers compensation claim were all handled by the employer in a way that was adverse to him because he had made a number of prior complaints.
The applicant also claimed that the respondent’s behaviour breached implied duties of cooperation and good faith within his contract of employment, entitling him to common law damages.
The trial judge (Jessop J) disposed of the adverse action claims by finding that the behaviour of the respondent about which the applicant complained had no connection with any of the prior complaints.
The trial judge then turned to the claims in contract.
The applicant pleaded that the contract contained an implied term requiring the parties to cooperate with each other “to enable the continuity of employment” of the applicant, and a further implied term requiring the parties to act in good faith towards each other. Both terms were said to be breached by the way the employer had dealt with the reprimand and the workers compensation claim.
The High Court in Barker had confirmed the existence of an implied term of cooperation within all employment contracts, and left open the possible existence of an implied term of good faith.
The trial judge ruled that the implied term of cooperation does not exist at large. The duty to cooperate is a specific one and must be invoked in relation to a particular right or benefit in the contract. In this case, the applicant invoked the term in relation to an imprecise concept of “continuity” of employment. No such term could properly exist.
In relation to the implied term of good faith, Jessop J held that no such implied term is known to Australian law.
The contract claims were, therefore, dismissed.