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The nature of the term or duty

Every contract of employment is treated as containing a term of trust and confidence. This requires Employers and employees not to conduct themselves, without reasonable and proper cause, in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee. The term can affect every aspect of the relationship between employer and employee and creates a ‘catch all’ means of describing unreasonable conduct in employment. It is a two-way duty, binding on both employer and employee.

While the term of trust and confidence is often referred to as an implied term, it is better to think of it as an imposed term because, unlike implied terms, it cannot be excluded by an express term. For further information, see Practice Note: Types of contractual term in employment—Implied terms.

Mutual trust and confidence has two different