The area of employment law in the UK has undergone significant alterations over time. The development of the implied obligation of mutual faith and confidence is the one that stands out the most. The connection between an employer and an employee was originally wholly predicated on the idea of contract law. Additionally, in the 18th century, the bond between an employer and an employee was seen as one of master and slave. Since the employers were frequently shielded by state institutions, they were seen as very influential people. The managers, who had complete discretion over when and how to fire them, frequently showed bias toward the workers. This viewpoint was eloquently stated by Lord Reid in the Malloch v. Aberdeen Corporation case. However, in the contemporary world, times have changed, and employers are required to be sympathetic to their employees’ difficulties and needs and to treat them with respect. Lord Slynn in the case of Spring v Guardian Assurance stated that as a result of the numerous changes that had been witnessed in employment law, employers were mandated to consider the financial, psychological, and physical welfare of the employees.
The Development of the Implied Duty of Mutual Trust and Confidence
Before Lord Slynn's decision in the Spring case was made, the courts had already developed case law dealing with unfair constructive dismissal. However, at times, these decisions would fail to refer to the duty of mutual trust and confidence. Most of these decisions were given in favour of the employees who had been prejudiced by their employers. For example, in the case of Associated Tyre Specialists (Eastern) Ltd vs Waterhouse, the court found that Waterhouse had been constructively dismissed since her employer sided with other junior employers instead of supporting her. In the case of Post Office vs Roberts, the court held that employers should not undermine or destroy the trust and confidence relationship with their employees.
Even though the concept of implied duty of mutual trust and confidence was advanced in earlier cases, it was however elaborated further in the case of Woods vs W M Car Services (Peterborough) Ltd. In this case, Browne-Wilkinson J. stated that “an employer who consistently attempts to vary an employee's conditions or terms of service with a view of getting rid of the employee does act in a manner calculated or likely to destroy the relationship of confidence and trust between the employer and employee.” In essence, this means that the employer has breached the implied terms of the contract.
Following Browne-Wilkinson's conception of the implied duty of mutual trust and confidence, Knox J. in United Bank v Akhtar ruled in favour of Akhtar, the employee who had treated himself as constructively dismissed. In light of the learned judge's ratio decidendi in Akhtar, as much as the express terms take prominence over the implied ones, the power derived from the former may be limited by the latter. Moreover, if the court in Akhtar had applied the literal rule of interpreting the contract of employment, the employee's claim would possibly have failed. The decision made by Knox J. in Akhtar should not be assumed to imply that explicit terms are subject to a test of reason. For instance, in the case of White vs Reflecting Road Studs Ltd [1990] IRLR 191, the EAT supported the employer’s decision to transfer an employee to a lower paid work. The argument presented to back up the case was that it was an act of expressing the clause permitting flexibility, through which capricious behaviour by the employer would transgress its implicit duties.
Progressively, the implied duty of trust and confidence has become a parallel component that needs to be considered in addition to employment contracts. However, it is not a new phenomenon in relation to employment law since other implied terms are prescribed by statutory provisions within the United Kingdom. Holding of the court in Akhtar was reiterated and elaborated further in the case of Malik v BCCI, where the court held that it is“a duty upon the employer not, without reasonable and proper cause, to act in such a way as would be calculated or likely to destroy or seriously damage the relationship of trust and confidence existing between the employer and its employees.”
The Goal of the Implied Duty
The objective of the implied duty of mutual trust and confidence is aimed at enhancing cooperation and fairness between the employers and the employees. Nonetheless, the inherent nature of this concept makes it possible to breed ground for a raft of claims ranging from constructive dismissal to harassment lawsuits. In the UK, as a general rule, an employee has the right not to be unfairly dismissed by his employer. However, the worker needs to have been employed continuously for at least two years before the termination. Although there is a statutory provision proscribing the unfair dismissal, no legislative provisions are dealing with unfair treatment, but this aspect is deemed to be an implied term.
The factors that can be construed as amounting to contravening the implied duty of mutual trust and confidence tend to vary on a case-by-case basis. For example, in the Spring case, the court found that unfavourable and unfair reference contravened the implied duty of mutual trust and confidence. Moreover, in the case of Cantor Fitzgerald International vs Bird, the court held that the use of obscene materials coupled with some violent behaviour fell within the spectrum of contravening mutual trust and confidence. This point of view was also articulated in the case of Morrow vs Safeway Stores plc, when the court was of the view that if employers publicly make fun of their employees, it can contravene the implied duty.
Even though the implied duty of mutual trust and confidence was advanced to bring about fairness between employers and employees, the latter have been the biggest beneficiaries. However, some of the employees have utilised this prerogative to lodge some frivolous and vexatious claims in order to prejudice their employers. When the courts are convinced that the intention of employees is to escape their obligations and are therefore more inclined to rule the matter in favour of the employer in financial matters. For instance, in the case of Western Excavating (ECC) Ltd vs Sharp, Lord Denning MR stated that before an employer can be said to have breached the implied duty of mutual trust and confidence, the alleged violation has to “go to the roots of the employment relationship” for the court to find the employer culpable.
The Divergence of Opinion concerning Mutual Trust and Confidence
There are various perceptions that the implied duty of mutual trust and confidence draws in the United Kingdom. For example, some scholars assert that due to the fact that this concept has been rapidly changing over time and became widely accepted in the country, there is a likelihood that it might be deemed as the universal criteria for addressing challenges on the employment scene. By extension, this might mean that the implied duty of mutual trust and confidence can possibly ensure that other implied terms are removed. Moreover, it is also believed that in future, there is a possibility that the concept of mutual trust and obligation might be perceived as a common law obligation stipulating the manner in which employees need to be treated as they render their services to their respective employers.
Furthermore, a thorough evaluation of the Human Rights Act 1998 made it mandatory for the courts to consider the respect for the Convention rights of employees as an extension of the implied duty of trust and confidence. Woods, Akhtar, and Malik's decisions highlight the fact that mutual trust and confidence is a fundamental concept designed to safeguard the workforce from being mistreated by their employers. Nonetheless, the courts have limited the applicability of this duty in contracts for employment, which means that only persons working under contracts of employment can lodge a claim citing the duty.
Conclusion
The courts in the United Kingdom have made numerous decisions relating to the duty of mutual trust and confidence in disputes relating to employment. From the perspective of the available case law, it seems that the implied one generally seeks to address two aspects of the employer/employee relationship. The first one is to ensure that the dignity and respect of employees are upheld, while the second point is a competing interest in protecting the employers. The Western Excavating case is a good example of how the courts of law protected the employer in light of the frivolous claim lodged by an employee. Regarding workers, the duty of mutual trust and confidence in the case of Hughes vs London Borough of Southwark and Anderson vs Pringle of Scotland illustrate that the duty protects job security. In the case of Powell vs London Borough of Brent, the concept was used to address the status of employees. It would be interesting to see how the duty of mutual trust and confidence would grow to encompass in the near future.
Works Cited
Primary Sources
List of Cases
Associated Tyre Specialists (Eastern) Ltd v Waterhouse [1976] IRLR 386
Anderson v Pringle of Scotland [1998] IRLR 64
Cantor Fitzgerald International v Bird [2002] IRLR 867 HC
Express and Echo Publications v Tanton [1999] IRLR 367
Hughes v London Borough of Southwark [1988] IRLR 55
Malik v BCCI [1998] AC 20
Malloch v Aberdeen Corporation [1971] 1 WLR 1578 at 1581
Morrow v Safeway Stores plc [2002] IRLR 9
Post Office v Roberts [1980] IRLR 347, EAT
Spring v Guardian Assurance [1994] 3 All. E.R. 129
Powell v London Borough of Brent [1987] IRLR 466
United Bank v Akhtar [1989] IRLR 507
Western Excavating (ECC) Ltd v Sharp [1978] ICR 221
White v Reflecting Road Studs Ltd [1990] IRLR 191
Woods v W M Car Services (Peterborough) Ltd [1982] ICR 693
List of Statutes
Employment Rights Act 1996
Secondary Sources
List of Articles
Brodie Douglas, “Mutual Trust and the Values of the Employment Contract” (2001) 30 Industrial Law Journal 85
Ivanus Catalina-Adriana, “Justification for Indirect Discrimination in EU” (2014) 3 Persp. Bus. LJ 153
List of Books
Bingham, Tom. “Lives of the Law: Selected Essays and Speeches: 2000-2010” (Oxford University Press 2011)
Emir Astra, “Selwyn's law of employment” (Oxford University Press 2016)
Freedland Mark, “The personal employment contract" (Oxford University Press 2005)
Question 2
There are various legal issues arising in each of the four scenarios provided. However, all such questions are related to the concept of unfair dismissal at the workplace. It should be noted that while employers have a right to terminate the contracts of employment, they are required to follow the due process of the law lest their actions are construed as amounting to unlawful or unfair dismissal. Lawful termination of employment contract ideally requires a notice being issued to the involved individuals. In case a notice is not issued by either the employer or the employee, such situation would prima facie result in a breach of contract.
Ahsan
Ahsan faced a problem of unfair dismissal claims. Therefore, it would be necessary to evaluate some of the reasons attributed to unfair dismissal to determine whether the given dismissal was in accordance with the Employment Rights Act. According to section 86 of this document, both the employee and employer have statutory obligations to give a proper notice of termination, which is referred to as the statutory minimum period. Furthermore, the employee is supposed to give a minimum of one week notice to the employer, who is expected to give notice to the former concerning their length of service. The notice should be issued in one week if the period of continuous employment is under two years.
In the light of such provisions, Frontline did not follow the prescribed procedures when dismissing Ahsan because the employee was not given a written statement of the notice of termination of their contract of employment. The notice is usually required to be reasonable. Having been informed of a performance management meeting cannot be the ground for being aware of the findings from that meeting. Frontline should have stated unequivocally the basis for terminating Ahsan's contract and give the prescribed notice. The casual manner in which Frontline handled the matter gave Ahsan valid grounds to submit a potential claim to the Employment Tribunal for unfair dismissal.
Ahsan has been an employee of Frontline since January 2015, which means a two-year duration up to 21st August 2017. The claim submitted by Ahsan for unfair dismissal to Leeds Employment Tribunal is valid since there was an apparent breach of contract by Frontline when they terminated his employment. According to the statutory obligations and section 86 of the Employment Rights Act 1996, the employer was required to issue a notice to Ahsan in one week since the period of continuous employment was under two years. In summary, the difference between contractual and statutory notice could be drawn from the fact that legislative notice is articulated in legislation using Section 86 of the Employment Rights Act 1996. Conversely, the contractual notice is recounted in an employee’s contract of employment, and provided that it is equal to or greater than the statutory minimum period, the contractual notice could be enforced and would prevail.
Gerry
Gerry has been dismissed due to his inappropriate behaviour. Therefore, it is important to examine some of the possible reasons that could result in fair dismissal.
When a Dismissal is Considered Fair
Dismissals are normally considered to being fair if the employer can confidently provide a possible reason related to an employee’s conduct. Other reasons for fair dismissal could include the lack an employee’s capability or qualifications required for carrying out the assigned responsibilities within the organisation. The circumstances observed in Gerry’s case form a ground for fair dismissal. The term “conduct” covers a rather extensive area of behaviour within the workplace. For that reason, before considering dismissing an employee, the employer is expected to distinguish between gross conduct and ordinary instances of misconduct. Ordinary instances of misconduct that an employee can get involved in include a series of minor incidences, which can lead to dismissal when combined. A single incident of insignificant seriousness should not warrant an individual losing their employment opportunity.
Ideally, the employers are expected to analyse cases of misconduct carefully in order to obtain all the relevant and valid facts of the case before deciding to dismiss their employees. Apart from cases of gross misconduct, the employers are usually expected to have issued appropriate warnings to their employees regarding their cases of misconduct. Furthermore, they should also inform the employees in advance of the possibility of being dismissed if the conduct that they have been cautioned of will be observed in the future. When all the factors mentioned above are considered, the dismissal would still be termed to be fair because the employee has been given a chance by the employer to improve his/her conduct.
In the excerpt, one might be made to believe that Sally followed the required procedure before dismissing Gerry, yet in real sense, she did not. She made sure that she had gathered all the facts about the incidence and made an effort of reviewing Frontline’s staff handbook, having considered that the definition of gross misconduct, which included threatening and violent behaviour. However, the fact that she had reprimanded Gerry at any given point and warned him of his conduct was not mentiones. She should have given him a number of warnings and informed him that if he continued with the same trend, there was a likelihood that he was going to be dismissed.
It should be noted that according to the Employment Rights Act 1996, employees are entitled to a fair dismissal based on their ability to do the job irrespective of their conduct and position, which could be economically redundant. Furthermore, it is necessary to point out that inappropriate or gross misconduct at the workplace is likely to change over time. Individuals might be committing wrong deeds, but after being cautioned, they can change for the better.
Presently, many employers include the use or misuse of social media in employment contracts as a form of misconduct. For instance, in the case of Preece vs J D Wetherspoon PLC, the tribunal concluded that the employee’s dismissal was done under fair circumstances. The rationale of this decision was premised on the fact that the pub manager, who had complaints about two customers, went ahead and posted the complaints on Facebook while the employee was at work. The action of the manager contradicted the employer’s policies.
Frontline should consider educating and enlightening its employees of the employment code of behaviour as well as the expected levels of behaviour. By doing so, the company could help avoid some potential liabilities associated with employee misconduct. In any event, an employer discovers that an employee has been involved in gross misconduct, he or she can instantly dismiss such worker without giving notice or pay lieu. Some typical examples of gross misconduct occurring within an organisation include assault, drunkenness, bullying, and serious breach of the stipulated work policies and practices. The employee contract of employment also entails detailed information concerning gross misconduct. For this particular case, compensation will be awarded only if it was stated in the employment agreement.
Frontline would consider reductions unfair dismissal remedy because the company caould argue that Gerry, in essence, had contributed to his dismissal. If the tribunal was convinced about this argument, they might also reduce Gerry’s compensation. The contributory fault at times could be scaled upwards to be determined at 100%.
Karen
In a situation when an employer offers employees a settlement agreement, the decision of whether to accept the offer could be daunting. In fact, Karen’s scenario is not an exception; she needs to analyse the situation and ascertain that the condition would not result in cases of unfair dismissal in future. Settlement agreements are standards introduced in the practices of the organisation seeking to engage the employees considered redundant. The documents of the proposal explicitly outline the terms of the deal, for instance, not raising claims against the employer. Such a situation could be an ultimate sign-off before the employment is eventually terminated.
A recent legal case illustrating on the various aspects of settlement agreements would be the Bieber and Others v Teathers Ltd. The decision made in this scenario stresses on the fact that negotiation on the draft settlement agreement does not imply that the parties have not entered into a binding agreement, which would help settle the present dispute. Therefore, it can be concluded that it is important to be clear irrespective of whether negotiations are subject to contract. The second decision of the Bieber and Others vs Teathers Ltd relative to Karen’s scenario is centred on the agreement. It is important for Karen as a member of the human resource team to have comprehensive state of knowledge of the parties at the time of signing a settlement agreement.
The decision to be made concerning Karen’s situation will be based on the importance of preserving the certainty of contracts. The principles that will be laid down upon reaching the decision are of general application and relevance, particularly in an organisation facing unmeritorious claims. If the settlement agreement will be considered preferable to defending Karen’s claims in the Employment Tribunal careful wording will be inserted in the settlement agreement. Insertion of careful wording will aid in making it clear that the settlement is entered based on the representations made, and that the defendants’ rights will not be violated in a situation when the representations are incorrect.
The failure to sign the settlement agreement would result in disciplinary actions enforced by an employee or a redundancy situation. Karen should consider writing a note about what transpired and what was said during the meeting. Such records would help provide precise evidence of the incident that she raises a claim against her employer. The next approach she should do is seek some decent advice. At most times, the employer will most likely pay the legal costs for the employees to see a solicitor or qualified adviser. It is a legal obligation that Karen seeks the help of a qualified professional. Settlement agreements like for Karen’s case will most likely turn out to be binding once the employees have general self-governing legal advice about the issue.
According to section 111A of the ERA 1996, it is a requirement that offers made to the end of an employment relationship on agreed terms by both parties should be made on a confidential basis, which implies that neither of the involved parties could use as evidence when filing an unfair dismal claim to an employment tribunal. Therefore, Karen should consider the agreed terms with the employer regarding the employment relationship status to confirm that it was on a confidential basis. If she realises that it meets these features, then the law will limit her from using it to file a dismissal claim. Under the section 111A, in case there are pre-termination negotiations, they could be treated as confidential, even in situations where there are no present disputes between the employer and employee on the employment relationship. Section 111A also applies for the offers made on the settlement agreements against the background regarding the employment terms due to the presence of an existing dispute. In such cases, the “without prejudice” principle is applicable.
Karen’s situations could be described to be an exception with respect to the application of section 111A because the presented claims relate to an automatic unfair grounds for dismissal such as whistleblowing and union membership. Another reason is that the statutory rights are not protected by the confidentiality provisions as detailed in section 111A. The claims can be considered as those made on grounds other than unfair dismissal, for instance, victimisation, harassment and other conducts outlawed by the Equalities Act 2010. Moreover, the claims could also be centred on the breach of contract or wrongful dismissal.
The confidentiality provisions detailed under section 111A, require that there be no cases of improper behaviour. The code outlines what is considered improper behaviour under paragraphs 17 and 18. In case Karen discovers that there were incidences of such actions, then anything that will be said or done during the pre-termination negotiations will be classified as unacceptable as evidence during the claims in an employment tribunal to the extent that will be considered as just. If Karen’s situation was realised to have had a form of unlawful discrimination during the settlement discussion, it would form the basis of her claim that she could present to the employment tribunal.
If it was found out that there were some improper misconducts, it would not guarantee that the employer is likely to lose any subsequent unfair dismissal claims Karen presented to the employment tribunal. Consequently, if Frontline Limited was found not to have engaged in any form of inappropriate behaviour, it would not mean that the company will win any subsequent unfair dismissal claims Karen will have filed.
Where Karen finds out that the employees had signed a valid settlement agreement, then Frontline Limited, will not be in a position of presenting to the employment tribunal a claim about any one listed under the signed agreement. In case no regulations were set, then Frontline Limited could present to the tribunal a subsequent claim relating to the allegations presented by Karen about unfair dismissal according to the legal requirement of section 111A of the ERA 1996.
The court’s ruling on Brazier vs News Group Newspaper Ltd case concerning the scope of the settlement agreement was held that the agreement had the impact of resolving existing legal activities. Some of the facets included in the scope of the settlement agreement were related to the future claims projected by the claimant, not considering what he or she was not aware of during the time of settlement. The legal principle involved in Karen’s scenario, with reference to the theme of the scope of the settlement agreement, would be the construction of the basics of the claim of the initial proceedings the settlement agreement referred to.
In conclusion, it is essential for Frontline Limited to consider all the employment law acts to avoid future issues related to unfair dismissal claims by its employees. Moreover, employee education, the knowledge of the employment laws, and awareness among workers of what is expected of them regarding conduct while working for the company would help to avoid such conflicts. The signing of settlement agreements is important in any organisation. Such agreements would help in such situations since they would outline what is expected of the situation. In Karen’s situation, she and her colleagues should be compensated by the company. The employees are entitled to re-engagement type of compensation. Such type of compensation applies to the employees because their original job is gone and they are no longer practicable.
Works Cited
Primary Sources
List of Cases
Bieber and Others v Teathers Ltd [2014] EWHC 4205
Brazier v News Group Newspaper Ltd [2015] EWHC 125 (Ch)
Preece v J D Wetherspoon PLC ET/2104806/10
List of Statutes
Employment Rights Act 1996
Secondary Sources
List of Articles
Anderman Steven, “The interpretation of protective employment statutes and contracts of
employment” (2000) 29 Industrial Law Journal 223
Arnow-Richman Rachel , “Mainstreaming Employment Contract Law: The Common Law Case
for Reasonable Notice of Termination” (2014) 66 Fla. L. Rev.1513
Brodtkorb Tor, “Employee misconduct and UK unfair dismissal law: Does the range of
reasonable responses test require reform?” (2010) 52 International Journal of Law and Management 429-450
Harcourt Mark, Helen Lam, and Maureen Hannay, “Employment at will versus just cause
dismissal: Applying the due process model of procedural justice” (2013) 64 Labor Law Journal 67
Howe Joanna, “Poles Apart? The Contestation between the Ideas of No Fault Dismissal and
Unfair Dismissal for Protecting Job Security” (2013) 42 Industrial Law Journal 130
Smit Nicola, “How do you determine a fair sanction? Dismissal as appropriate sanction in cases
of dismissal for (mis) conduct” (2011) 44 De Jure 49
Vogel David, “The private regulation of global corporate conduct: Achievements and
limitations” (2010) 49 Business & Society 70
List of Books
Cushway Barry, “The Employer's Handbook 2014-15: An Essential Guide to Employment Law,
Personnel Policies and Procedure” (Kogan Page Publishers 2014)
Gibbons Michael, “A review of employment dispute resolution in Great Britain” (London DTI
2007)
Thomas Kruppe, Ralf Rogowski, and Klaus Schömann, “Labour market efficiency in the
European Union: Employment protection and fixed term contracts” (Routledge 2013)
Sandra Laleta “Termination of employment contract” (Diss. Pravni fakultet, Sveučilište u
Zagrebu, 2011)
David Lewis and Malcolm Sargeant, “Essentials of employment law” (CIPD Publishing 2004)
Gwyneth Pitt, “The Changing Institutional Face of British Employment Relations” (2007)
