The High Court has today found that employment contracts do not contain an implied term that the parties must not, without reasonable cause, engage in conduct likely to destroy or seriously damage the relationship of trust and confidence between them.

This decision overturned the decision of the Full Court of the Federal Court inCommonwealth Bank of Australia v Barker [2013] FCAFC 83 which found that the Bank had breached this implied term and, as a result, ordered it to pay Barker damages of $335,623.57.

The decision will be welcomed by employers, who feared the implication of such a duty into all employment contracts could lead to significant uncertainty in relation to their ability to terminate employment contracts.