The implied term of mutual trust and confidence

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The case of RDF Media Group v Clements has served to clarify the meaning of the implied contractual term of mutual trust and confidence. Proving a breach of the term of mutual trust and confidence is essential to winning a case for constructive unfair dismissal in an employment tribunal.

In brief:-
• private company discussions regarding an employee, even where highly negative remarks are made, do not necessarily breach the term of trust and confidence.
• It may be justified for a company to put out factual statements to the media regarding an employee, but if they are condemnatory or abusive they may well be seen to breach the term of trust and confidence.
• If an employee through his own behaviour has himself undermined trust and confidence, he can not then seek his own advantage by accepting a repudiatory breach on the part of his employer.

Clements had unbeknown to RDF switched allegiance to another media company SMG and planned to work for them, taking with him people from RDF. As Clements had recently made £2m at RDF they were somewhat miffed at the prospect of him wishing to transfer to the competition.

The dispute arose out of a restrictive covenant that would normally last for 3 years after Clements and other key employees left the company. Should he be unlawfully dismissed, the covenant would last 2 years.

Clements seemingly forgot the covenant he had signed that committed him to 3 years with RDF and resigned his job. RDF briefed the press against him and spoke about Clements in unflattering terms. If this could be described as having broken mutual trust and confidence, Clements could hope to be released from the contractual 3 years covenant. Clements was however co-ordinating his actions with SMG and supplied confidential information to them.

Although most on and off the record briefings about Clements by RDF were factual, one included a comment that "if you take the money then you do the bloody job. It's just very dishonourable. "Judge Livesey of the QBD decided that although factual briefings could be acceptable, but this comment did in fact break the implied contractual term of mutual trust and confidence.

"I have come to the conclusion that they constituted a serious attack on Mr Clements character and, whether they were true or not, constituted conduct, beyond what was reasonable or proper, by RDF which was calculated or likely to destroy or seriously damage the relationship of trust and confidence between it and Mr Clements."

That Clements had earlier switched his allegiance to SMG meant that:

"where as here the defendant is himself in repudiatory breach of a mutual obligation he is not entitled to accept any repudiation by RDF by reason of his own breaches. "

The transcript of the decision in this case can be found:   Here

© Workrep 08 / 12 / 2007