Restructuring and Employment Law – Part 2

The Loss of Mutual Trust and Confidence Part II – what does it mean for your employment documents?

So, you have gone to the trouble of making sure you have an employment agreement with all of your employees, and you have employment policies in place. That should mean that if you have a problem with one of your employees, or you decide you need to restructure your workforce, it should be easy, right?

Well, perhaps not.

Our previous blog discussed how the recent High Court decision in the case of Barker removed the implied term of mutual trust and confidence from Australian employment agreements. This can significantly impact how businesses handle restructuring their workforce or terminating employees. But now that the implied term is gone, what does that actually mean for your employment documentation?

Firstly, let's go back to basics:

• Do you have employment agreements in place with ALL your employees, including your high level and managerial staff
• Do you have employment policies in place
• Do these employment agreements and policies comply with the employment laws, and are they appropriate both for your employees and your industry?

And, perhaps most importantly, are you actually complying with your employment agreements and policies?

While the Court in Barker found there was no implied term of mutual trust and confidence, they did find that the employer had not complied with their notice obligations as set out in the employment agreement. We often see employers who have very well drafted employment agreements and policies fall down at the last minute because they have not actually gone through the steps that their agreements say they should when they go to discipline or terminate an employee.

If you are disciplining or terminating employees, or restructuring your workforce for any reason, you should seek legal advice on Employment Law to minimise the risk of a costly and time consuming dispute.

In our next blog, The Loss of Mutual Trust and Confidence Part III, we will discuss the principle of "good faith" and how this may impact your employment arrangements and negotiations.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.