Siblings but not Twins: Making Sense of ‘Mutual Trust’ and ‘Good Faith’ in Employment Contracts

Abstract

Since the 1970s English employment law has recognized a duty not to destroy mutual trust and confidence in the employment relationship, and has developed more general duties of good faith and fair dealing at work. Australian employment contract law, on the other hand, has been slow to articulate clear principles around these concepts. This article proposes a framework for understanding both concepts – mutual trust and confidence on the one hand, and good faith performance of contracts on the other – in the hope that the articulation of clear and bounded principles may encourage general judicial acceptance and greater certainty in employment contract law.

Keywords: employment contracts, mutual trust and confidence, good faith

JEL Classification: K10, K30, K31