Examine how the courts have interpreted and applied the duty of trust and confidence and whether the balance has been struck. The traditional relationship in the past centuries between Employers and Employees have been largely seen as likened to that of masters and slaves. The all-powerful masters lord it over the slaves. State intervention was also largely in support of the masters.
What is the significance of this development for the law of employment generally? In this connection, the requirement for a fundamental breach may be constituted by the conduct on the part of the employer amounting to a repudiatory breach of a term of the contract or a breach of the implied term of mutual trust and confidence or both.
As the implied term of mutual trust and confidence originated from the doctrine of constructive dismissal, the Malaysian courts, in their endeavour to bring into play the implied term of mutual trust and confidence in the context of the concept of dismissal without just cause under section 20 1have incorporated through this provision the doctrine of constructive dismissal.
This is commonly referred to as the contract test.
This gave rise to the reasonableness test. In the context of the doctrine of implied term of mutual trust and confidence, this doctrine is not compatible with the contract test. This is because the contract test, as it is understood under the common law, does not provide for any element of good faith or fair dealing.
Since the right to claim damages for any breach by the counterpart party is available, there is no reason why any party in a commercial relationship such as employment would wish to help each other. Accordingly, there is no room for any implication of the term of mutual trust and confidence under the contract test.
As a result, the term can only be presumably implied under the reasonableness test. As will be discussed however, the Industrial Courts in Malaysia seemed to have found a way around this conundrum by mitigating the harshness of the contract test by imposing a Mutual trust confidence essays of reasonableness upon the exercise by a employer of its contractual powers.
The Supreme Court in Wong Chee Hong seemed to have erroneously related the concept of dismissal without just cause or excuse in Malaysia with the common law doctrine of constructive dismissal. Taking into account the fact that the remedy of reinstatement is available for any dismissal found to be without just cause, it can be said that the purpose and effect of the section is to ensure security of tenure.
In effect this means that the employer should not be allowed to treat their employees unfairly during employment while escaping liability by only treating the employees during the point of dismissal.
Irrespective of the applicable test, it is submitted that this approach would allow the implication of the term of mutual trust and confidence.
The remark by the Supreme Court in Wong Chee Hong relating to the dangers of the reasonableness test was not followed by the Industrial Courts in later cases. Lee Poh Kheng, the Industrial Court after paying lip service in stating that the contract test is applicable to claims of constructive dismissal nevertheless went on to hold that an employer is not allowed to unreasonably exercise its contractual powers to the detriment of the relationship of trust and confidence between the parties.
Additionally in Rimex Sdn. It is submitted that the reasonable test should be given preference over the contract test. This is because if the contract test is applicable, employers may engage in unreasonable conduct without giving rise any entitlement on the part of the employee to resign and claim damages so long as the conduct does not amount to a fundamental breach.
Illustrative Example of Breaches In the course of this assignment, case laws of the United Kingdom jurisdiction which were decided prior to the landmark case of Malik and Mahmud v Bank of Credit and Commerce International SA will be discussed.
The case laws serves as an illustration of the circumstances in which employers have been found to be in breach of the implied term of mutual trust and confidence will be discussed. The choice of referring to United Kingdom case laws was made on the basis that the legal jurisprudence as well as employment protection in the United Kingdom is much more developed than other common law jurisdiction.
Among the examples of conduct by employers in the United Kingdom which have been found to amount to breaches of the implied term of mutual trust and confidence are as follows: The Industrial Tribunal held that any expression of criticism by the employer, however trenchant it may be, will not automatically lead to the result that the criticism amounts to a repudiatory breach resulting in a finding of constructive dismissal.
An evaluation has to be done based on the facts of each case to ascertain as to whether the criticism is appropriate under the circumstances of the case. Only if the criticism is inappropriate would it lead to a possible finding of repudiation. On the facts, as the criticism was not a true reflection of the actual situation, it amounted to a breach of the implied term of mutual trust and confidence giving rise to a finding of constructive dismissal.
Unfortunately for the employee, her senior officer was not satisfied with her performance and the officer, without proper considerations, unjustifiably appraised the employee as being unsuited to qualify for promotion though the employee was not notified of this.
When the employee found out about the real reason for the rejection, she resigned and initiated a constructive dismissal claim against the company.
The RMO referred the matter to a committee which found no pathological behaviour on the part of the employee. Nonetheless, the RMO wanted to have a meeting with the employee.
However the employee refused to attend the meeting whereupon the RMO requested the employee to undergo a medical examination which the employee also refused. This resulted in a temporary suspension of the employee from his duties while disciplinary proceedings were brought against him.
The proceeding ended with the committee of inquiry acquitting the employee of all charges. The employee alleged that the employer has wrongfully repudiated their contract of employment and that he had elected to accept this repudiation in relation to which he is claiming damages.
The Court of Appeal held that the imposition by the employer of the requirement of psychiatric examination without reasonable cause amounted to a breach of the implied term of mutual trust and confidence of the employment contract between the parties thereby rendering the employer to have wrongfully repudiated the contract giving rise to a valid claim for damages on the part of the employee.
Another employee at the pub received a message which advised the employee not to be present in the bar during a particular time period. The employee was worried that his life was at risk and harboured the expectation that the employer will take protective action for his benefit.This essay focuses on the development and Significance of the Implied Duty of Mutual Trust and Confidence.
It will also consider juridical nature, content and wide duty of trust and confidence. Implied Terms in the Contract of Employment The implied terms enable the courts to achieve justice between the employer and the employee.
Mutual Trust and Confidence Malik & Mahmud v BCCI  AC 20 (HL) ‘ the employer shall not without reasonable and proper cause, conduct itself in a manner calculated and likely to destroy or seriously damage the relationship of confidence and trust . Employment law/ contractual principles (implied duty of mutual trust and confidence) - Essay Example Nobody downloaded yet Extract of sample Employment law/ contractual principles (implied duty of mutual trust and confidence).
Mutual trust and confidence in contracts of employment | Example Law Essay This essay was produced by one of our professional writers as a learning aid to help you with your studies Example Law Essay Mutual Trust and Confidence in Contracts of Employment In order to answer this question one must first assess and consider the law relating to the.
Mutual trust and confidence combats abuse of power and exploitation which is a risk in exchange relations. The courts have used the implied term of mutual trust and confidence to ensure the equality of the relationship in many circumstances.
These characteristics include: virtue, love, empathy, honesty, kindness, altruism, mutual understanding, compassion, trust, and appreciation of each other’s friendship, to convey one’s feelings, and make faults without the anxiety of being judged by friends.