Commonwealth Bank of Australia v Barker

The High Court of Australia considered an appeal by the Commonwealth Bank of Australia (the appellant) against a decision of the Full Court of the Federal Court of Australia concerning the termination of Mr Barker's (the respondent) employment. Mr Barker had been employed by the Bank for a significant period, and his position was made redundant. The dispute centred on whether the Bank's conduct in denying Mr Barker the opportunity of redeployment constituted a breach of his employment contract, specifically in relation to an alleged implied term of mutual trust and confidence.

The primary legal issue before the High Court was whether a term of mutual trust and confidence should be implied by law into employment contracts generally. A secondary issue, raised by Mr Barker, was whether such a term should be implied as a matter of fact into his specific employment agreement. The Court was required to determine the criteria for implying such terms and whether they were met in this instance.

The High Court determined that a term of mutual trust and confidence should not be implied by law into all employment contracts, as it did not meet the criterion of necessity. The Court also rejected the submission that such a term should be implied as a matter of fact into Mr Barker's agreement, as no particular feature of the agreement supported this implication. However, the Court found that there was a conceded entitlement to damages for Mr Barker, amounting to $11,692.31 plus interest, based on a breach of clause 6 of his Employment Agreement as found by the primary judge. The appeal was allowed, and the orders of the Full Court were set aside, with judgment entered for Mr Barker in the conceded amount. The appellant was ordered to pay Mr Barker's costs of the appeal and the application for special leave.