#13072 - The Employee's Implied Duties - Employment Law

Topic 4: The employee’s implied duties

• Introduction

  • A term should only be implied by law when it is necessary to ensure that the rights created by a K are not undermined Byrne

• Duty to obey lawful & reasonable orders (obedience)

  • General Test (Darling Island): If a command relates to the subject matter of the employment [ie falls within the scope of the contract] and involves no illegality, the obligation of the servant to obey it depends at common law on it being reasonable.

1. Is it illegal/unlawful? If so, it does not need to be obeyed

   • Does it place them in physical danger?

   • Does it require them to break the law? Kelly v Alford

2. If it is legal/lawful, is it reasonable?

   • What is reasonable is not determined in a vacuum, but depends on Darling Island:

     • the nature of the employment

     • its established usages

     • common practices and any instrument affecting it e.g. EA, MA or KoE

   • General principle: An employee can only be expected to perform tasks or comply with instructions which ‘properly ascertain’ to their job e.g. within the scope of their contract Royall

     • Orders are likely to be unreasonable if they completely change the nature of the job or compromise someone’s ability to do their original job e.g. library teaching having to teach English classes Redbridge

     • Has it been common practice? If so, more likely to be reasonable e.g. teachers covering classes Sim v Rotherham MBC

     • However, employers do have flexibility in varying an employee’s duties, provided they remain within the scope of the original job e.g. Cresswell v Inland Revenue

   • Reasonableness and Managerial Authority

     • Managerial prerogative: right of an owner of the business or a manager to have a substantial say in how the business is run and what employees do.

     • Is it reasonable?

       • Not what the reasonable person would think, but through the perspective of owners and managers, employers have a substantial discretion to require things of employees for the business to operate effectively.

       • The decision in Cwth Bank v Barker suggests that the exercise of managerial power is not subject to any general obligation to act fairly and reasonably. Nevertheless, it appears that any powers that explicitly require the exercise of a discretion must be at least exercised honestly, not arbitrarily or capriciously.

     • Courts and tribunals have been willing to take a broad view of managerial authority. It appears to be lawful and reasonable to:

       • Impose dress standards or appearance standards on employees who deal with customers ATC v Hart

       • Order a senior employee not to make public comments about the employer’s business Lane v Fasciale

       • Implement a computerised system for a task, so long as the nature of the job stayed the same Creswell v Board of Inland Revenue

       • Create a policy regarding alcohol outside work time if the employer has a legitimate interest in the conduct of an employee’s private life Kolodjashnij

       • Direct an employee to use a time clock to record the start and finish of their shift Pettet v Readiskill

       • Require an employee to undertake a medical examination in order to determine fitness for work AIPA v Qantas 2014

     • But there are limits to this power

       • For example, the inconsistent application of a dress or appearance standard may expose an employer to the risk of an unfair dismissal claim, even if they had the power to impose the standard Woolworth v Miller 2006

• Duty of co-operation and proper conduct (i.e. no misconduct)

  • Employees are generally obliged to conduct themselves properly whilst at work and to co-operate with the employer (these duties overlap with the duty of fidelity).

  • General test: have they wilfully disrupted the employer as he goes about his business, acting contrary to the spirit of co-operation Sec of State v ASLEF

    • Be careful though as compare legitimate industrial action to misconduct

  • Examples of misconduct:

    • Insolence towards a supervisors Farley v Lums 1917

    • Offensive abuse of a subordinate or co-worker Bahonko v Sterjov 2007

    • Disparaging the employer’s business R W Jaksch & Associates v Hawks 2005

    • Assaulting another workers Quinn v Australian Stevedoring Industrial Authority

    • Making private use of employer’s property and personnel Concut v Worrell 2000

    • Accepting a bribe or secret commission Boston Deep Sea Fishing v Ansell 1889

    • An executive entering into legally questionable salary and loan arrangements Downer EDI v Gillies 2012

    • Working ‘to rule’ as part of a disruptive campaign of industrial action Secretary of State v ASLEF 1972

    • Inciting other employees to take unlawful industrial action Cicciarelli v Qantas 2012

    • Failing to answer questions truthfully, provided the questions are fair and reasonable Streeter v Telstra 2008

      • Even if the questions regard private life.

    • Failing to disclose the fact that a subordinate has engaged in some form of misconduct Turner v Carpet Call 1994

    • Bad-mouthing employer on social media Dover-Ray v Real Insurance

  • Conduct out of working hours

    • It is clear that in certain circumstances, employment may be terminated because of private conduct, but such circumstances are limited. Take into account: Rose v Telstra Corp

      1. Conduct must be such that viewed objectively likely to cause serious damage between relationship of employer and employee; or

         • The conduct must be of such gravity or importance as to indicate a repudiation of the employment contract Kolodhashnij

      2. Conduct must damage the employer’s interests; or

         • If they are not in their uniforms and can’t be identified, may not hurt reputation

         • Even a criminal conviction is not always sufficient to warrant termination unless the misconduct has a relevant connection to the employment Commissioner for Railways v O’Donnell

      3. Conduct must be incompatible with employee’s duty as an employee

         • There must be a close and sufficient connection between the misconduct and the requirements of the job

         • E.g. a conviction for drink-driving which occurred outside of work hours may be relevant if they were a truck or taxi driver Hussein v Westpac

    • Caution should be exercised. Any extension over private activities should be contained and fully justified McManus v Scott-Charlton

  • Disclosure: An employee is not under a duty to volunteer details of their own misconduct Hodgson v Amco

    • But the HC left the point open in Concut with some members noting that disclosure might be required in certain cases to avoid any breach of the employee’s fiduciary obligations.

    • Where there is a conflict or potential conflict between a senior employee’s duties to their employer and their involvement in an outside business activity, they can only avoid breaching their fiduciary duty by making full disclosue and seeking permission Buitendaf v Ravensthorpe Nicke 2014. However more recent cases say that no duty to positively disclose.

  • Timing: even if the employer only becomes aware of the misconduct later on, it is still grounds for dismissal Concut v Worrell

• Duty to exercise skill and care

  • In carrying out their duties, an employee is expected to achieve whatever standard of skill and competence can reasonably be excepted of someone with their particular experience and training.

    • All employees are also under a general duty to take reasonable care not to cause injury or damage in the course of doing their work X v Cwth

    • But if they are asked to do a job for which they claim no particular expertise, the employer cannot complain if their work falls short of what a more skilled employee might have been able to do Printing Industry Union v Jackson & Sullivan

  • Examples of what breaches the duty to exercise skill and care:

    • Not being able to bleed safely and causing a risk to the health of others X v Cwth

    • Not taking the same level of care with employers’ property as they would with theirs (objective). Consciously disregarding employer’s instructions and taking risks Bolton Gems v Grigoire

• Duty of fidelity (good faith)

  • General principle: Robb v Green: There is a confidential relation between the master and servant. Relationship of confidence or trust. Employer should be able to trust the employee to advance the employer’s interests.

    • Every employee has a duty to serve their employer ‘faithfully’. If there is an actual repugnance between the employee’s acts and his relationship with his employer, this will be a breach Blyth Chemicals v Bushnell

      • Must involve the incompatibility, conflict or impediment, or be destructive of confidence.

      • The employee must not place themselves in a position in which their own interests conflict with their duty to act solely I the employer’s interests Digital Pulse v Harris

    • Under common law this continues for as long as the employment contract subsists

    • The duty of fidelity overlaps with the duties of obedience, co-operation and proper conduct.

  • Examples:

    • Establishing or moving to a competing business

      • So long as they do nothing to undermine their existing employer’s business, the mere fact that they have commenced the process of establishing a future business may not of itself breach their obligations Independent Management Resources v Brown 1987

        • So long as they don’t do it using the employer’s resources and on employer’s time.

      • Ask: Blyth

        • Is the second activity incompatible for his duty?

        • Does it involve a conflict between personal interest and duty to employer?

        • Does it impede the faithful performance of his obligations?

        • Is it destructive of the necessary confidence?

    • Soliciting the employer’s client to switch to the new business Mason Gray Strange v Eisdell 1989

    • Recruiting other staff presently working for the employer...