Commonwealth Bank of Australia v Barker: High Court closes the door on the invisible trust and confidence term, but will another door then open to something more effective and visible?

Anyone who took the time to read the transcript of the hearing of Commonwealth Bank of Australia v Barker in May 2014 would not (could not possibly) have been surprised that in its 10 September 2014 decision the Court unanimously rejected the contention that all employment contracts in Australia have or should have implied into them by law a term that neither party would do anything to destroy or seriously damage the necessary "trust and confidence" that should exist between employer and employee (Commonwealth Bank of Australia v Barker [2014] HCA 32).

The response from the legal fraternity has been starkly divided - at one extreme the decision was decried as being "the effective death of employment contract law" (Workforce, 19315, 12 September 2014); at the other extreme the Court was undoubtedly right to reject a so called "invisible term" into the employment contract, for if it had not the result in employment law would be equivalent to enshrining communism - ie the same terms for everyone whether a mere worker or a senior executive (see Australian Financial Review Friday 19 September 2014).

I respectfully suggest that everyone who has been stirred up by the High Court's decision (at either end of the spectrum or anywhere in between) needs to get a grip. I would like to make the following observations from my relatively privileged perspective of having been on either side of the "mutual trust and confidence" argument innumerable times in the fifteen years since the House of Lords decision in Malik v Bank of Credit & Commerce International SA (In Liq) [1998] AC 20 (Malik's case).

First, the High Court demonstrated that the House of Lords' decision in Malik's case was a significant...