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Selected cases

High Court of Australia · [2014] HCA 32

Commonwealth Bank v Barker

A High Court employment contract case about redundancy, redeployment and the rejected implied term of mutual trust and confidence.

High Court of Australia10 Sept 2014

Plain-English explainers, not legal advice. Check the linked official source before you rely on a specific section, and get advice for your situation.

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Quick read

  • Employment policies should be drafted and used carefully.
  • A High Court employment contract case about redundancy, redeployment and the rejected implied term of mutual trust and confidence.

Use this to check

  • Australian employment contracts do not automatically include a broad implied term of mutual trust and confidence.
  • Policies can still matter if they are incorporated into the contract or shape statutory processes.
  • Redundancy and redeployment communications should be clear, timely and documented.

Decision snapshot

  1. 1

    What happened

    • Mr Barker was a senior Commonwealth Bank employee whose position was made redundant.
    • The bank told him redeployment was its preference, but his work email and voicemail access were cut off and he was not told about a possible alternative position until late in the process.
    • He alleged the bank breached an implied term of mutual trust and confidence by denying him a proper redeployment opportunity.
  2. 2

    What the court had to decide

    • The High Court had to decide whether a term of mutual trust and confidence should be implied by law into Australian employment contracts, and whether that alleged term could support Mr Barker's claim about the bank's handling of redeployment.
  3. 3

    What the court decided

    • The High Court allowed the bank's appeal and held that the proposed term of mutual trust and confidence should not be implied by law into all employment contracts.
    • The decision reduced one common-law pathway for employees, while leaving other contractual and statutory duties untouched.

Practical impact

Practical read

  • Employment policies should be drafted and used carefully.
  • Barker rejected a broad implied duty of mutual trust and confidence, but sloppy redeployment or redundancy processes can still create contractual, statutory and reputational risk.

Useful next steps

  • Australian employment contracts do not automatically include a broad implied term of mutual trust and confidence.
  • Policies can still matter if they are incorporated into the contract or shape statutory processes.
  • Redundancy and redeployment communications should be clear, timely and documented.
  • Check whether staff policies are contractual or non-contractual.
  • Keep redundancy and redeployment steps visible to the affected employee.

Practical read

Barker is useful because it separates two things employers often blur together: whether Australian employment contracts contain a broad implied duty of mutual trust and confidence, and whether an employer has still created obligations through its own contract, policy or conduct.

The High Court rejected the broad implied term. That does not mean redundancy or redeployment processes are risk-free. A badly handled process can still create unfair dismissal, adverse action, discrimination, consultation or contract risk depending on the facts and documents.

Checks to run

Key points

  • Check whether staff policies are contractual or non-contractual.
  • Keep redundancy and redeployment steps visible to the affected employee.
  • Do not switch off communication channels before critical process steps are complete.
  • Review consultation obligations under awards, agreements and the Fair Work Act.

Key takeaways

  • Australian employment contracts do not automatically include a broad implied term of mutual trust and confidence.
  • Policies can still matter if they are incorporated into the contract or shape statutory processes.
  • Redundancy and redeployment communications should be clear, timely and documented.

Related topics

Employment & Workplace

How Sprintlaw can help

Employment Contract