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The Implied Duty of Mutual Trust and Confidence

25th September, 2012

A contract of employment will usually set out express terms; however implied terms also govern the employment relationship. Employers and employees are bound by an implied term which states that they will not act in a manner “which is calculated, or likely, to destroy or seriously damage the relationship of mutual trust and confidence between them”. Any serious or “repudiatory” breach of this duty by an employer can entitle an employee to treat themselves as having been dismissed and bring a claim for constructive unfair dismissal. The Employment Appeal Tribunal recently ruled in Assamoi v Spirit Pub Company (Services) Ltd that an employer can prevent a breach of the duty of mutual trust and confidence by apologising to an employee for any actions taken.

Mr Assamoi worked in the kitchens of Spirit’s West London pubs between 1993 and 2009. Mr Assamoi’s request to transfer to another pub was granted in 2009, after he had been given warnings about his conduct and he had raised grievances against his then manager which were not upheld. Mr Assamoi had a number of disputes with his new manager, Mr Cooper, which resulted in him refusing to sign a new contract of employment. One day Mr Assamoi was absent, the kitchen was understaffed and customers had to be turned away. Mr Cooper invited Mr Assamoi to a meeting to discuss this, but he did not attend. Mr Cooper accused the kitchen staff of unauthorised absences and suspended them pending investigation. In actual fact, Mr Assamoi had been on annual leave on both days, which had been agreed by Mr Cooper in advance. This was soon realised in the investigatory meeting, where two managers from other pubs told Mr Assamoi no action would be taken and any references to this incident removed from his record. At a subsequent meeting, Mr Assamoi demanded an apology from Mr Cooper. Instead he was offered a transfer to another pub if he signed his new contract (which he claimed consisted of a demotion and a reduction in his hours). He refused, submitted a grievance against Mr Cooper for his treatment and later resigned. At the grievance meeting, Mr Assamoi said he would not return to work even if Mr Cooper apologised.

Mr Assamoi brought a claim for unfair dismissal. The Employment Tribunal held that Mr Cooper’s acts were “likely to damage the relationship of trust and confidence” but were not “likely to destroy or seriously damage the relationship of trust and confidence” between himself and Mr Assamoi. Therefore, the facts of this case did not meet the necessary test for breach of mutual trust and confidence to have occurred. As a result his claim for unfair dismissal failed. The Tribunal ruled that what he had been told by the other two managers resurrected the potential breach by Mr Cooper; and that the terms of his new contract were actually no less favourable. Mr Assamoi appealed this decision, arguing that the Tribunal should not have treated Mr Cooper’s breaches of trust and confidence as having been cured by the subsequent actions of the two managers.

 

The Employment Appeal Tribunal dismissed his appeal. It held that the Tribunal had correctly decided that Mr Cooper had behaved in an inappropriate manner but that his behaviour was not so serious to amount to fundamental breach of contract. It was further held that the acts of an employer in trying to resolve a potential breach of trust and confidence may prevent a repudiatory breach from occurring, but will not be able to save an employer once a breach has been committed. This case demonstrates the importance of being aware of all the contractual terms which bind both employer and employee; and not just those terms which are expressly stated.

For further information or advice on express and implied terms to be found in your contracts of employment, please contact Claire Brook on 01244 405575, or send an email to [email protected].

 

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