An autocratic style of management is no justification for breaching the contractual term of trust and confidence

The ET had no right to imply terms into a contract that were not originally understood or agreed by the parties

McBride v Falkirk Football & Athletic Club [2011] UKEAT 0058_10_1706

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• An autocratic style of management does not justify breaching the contractual term of trust and confidence.
• The ET may not imply terms into a contract unless they were originally understood by the parties to be part of the agreement.
• Terms may not to be implied into an employment contract if they are not precise, necessary or obvious.

Lady Smith in the EAT ruled in McBridge v Falkirk Football Club that an employer's duty not to act in a manner that undermines trust and confidence is an objective one which means that the employer is unable to claim that in his particular industry exceptions apply.

An 'autocratic style of management' although normative in football is not a defence to breaching the implied term of trust and confidence.

It was further decided that terms may not to be implied into an employment contract if they are not precise, necessary or obvious.

The Claimant a youth football team manager resigned and claimed constructive dismissal when his right to choose member of the team was removed without consultation. The employment tribunal rejected the Claimant's claim for Constructive Dismissal implying a term into his contract allowing for this.

This ruling was overturned by the EAT on appeal which rejected the ET's right to imply a contractual term arbitrarily, especially when this contradicted an express term. The EAT substituted a finding of Constructive Unfair Dismissal and remitted it to a fresh tribunal to determine the compensation.

Paragraphs 54 and 55 explain when a term may be implied:

54.         The general principle is that the express terms of a contract prevail; it is to be assumed that parties will have expressed, at the time of contracting, all the material terms of their contract.  It is only appropriate to imply a term where, on a consideration of the express terms of the agreement and the facts and circumstances surrounding it, an implication arises that parties actually intended the term in question to be part of their original contract.  In this case, the express term – unqualified control of the team without any interference – was contrary to the term implied by the Tribunal.  The term implied was not an obvious inference.  There was no necessity for it.  The evidence about what happened in other clubs was not such as to set up an implication from usage or custom.  It said nothing about the particular contractual arrangements involved in other clubs and, importantly, nothing about the terms on which a manager and head coach of an under 19 team was appointed when there was no Youth Academy Director in post.  There was no previous course of dealing which pointed to the implication of the term.  In any event, implication from custom or usage can only normally be on the basis that it does not conflict with an express term.

55.         We also agree that the wording of the term implied by the Tribunal is insufficiently precise – what was meant by “the position would necessarily change”?  Would some change be imposed on the Claimant without warning?  If so, what change?  If not, what consultation and discussion would that involve?  What was meant by “once [he was] properly fulfilling the role” so far as the timing of any change that was to take place was concerned?  The generality of the Tribunal’s implied term points to the Respondent intending to seek to bring about changes in the Claimant’s role so as to reduce his autonomy, once they had appointed an Academy Director and that person was, in their judgment, “up to speed” but that does not show that that was what was agreed with the Claimant when he was appointed.

© 2011 Workrep