Irving v Kleinman

The New South Wales Court of Appeal considered an appeal by Irving (the claimant) against Kleinman (the employer) concerning the employer's conduct during disciplinary proceedings. The dispute centred on whether an employer owes a duty of care to an employee in the conduct of such proceedings, particularly in relation to implied terms concerning the relationship of trust and confidence.

The primary legal issues before the Court of Appeal were whether an employer has an implied contractual duty to conduct disciplinary proceedings fairly and reasonably, and whether an employer owes a duty of care in tort to an employee regarding the manner in which disciplinary proceedings are conducted. The Court was required to determine if these duties extended to ensuring the proceedings themselves were conducted in a way that did not cause the employee foreseeable harm.

The Court of Appeal allowed the appeal, finding that an employer does owe a duty of care to an employee in the conduct of disciplinary proceedings. This duty arises from the implied term of trust and confidence in the employment contract, which requires employers to act reasonably and not to conduct themselves in a manner likely to destroy or seriously damage the relationship of trust and confidence. The Court held that this duty could extend to the manner in which disciplinary proceedings are conducted, and that a breach of this duty could give rise to a claim in tort. Consequently, certain paragraphs of the Amended Statement of Claim were struck out, with liberty to re-plead the contract and tort claims.