Good Faith

“Good Faith Performance” in Employment

The good faith performance covers all aspects of the employment contract, and includes both the employer and employee observing the “implied” and “expressed” terms of the employment contract. An example of this is when either the employee or employer [prevents] one side of the party performing the contract, or delaying the contract. “Good faith” requires moral or ethical standards in which the employee and employer deal with each other, such as the implied term of “mutual trust and confidence“.

In the case of Morrow v Safeway Stores plc [2002] IRLR 9 the EAT held that ‘conduct which amounts to a breach of the implied term of trust and confidence will mean, inevitably, that there has been a fundamental or repudiatory breach going necessarily to the root of the contract’. This is significant, in so far that employers who abuse the process of power during the grievance procedure (“No man is permitted to be judge in his own cause” ) will likely have destroyed, or seriously have damaged the implied term of “mutual trust and confidence” giving rise for the aggrieved employee to claim constructive dismissal.

In the case of Laver v National Trust the Judge decided the National Trust had acted in ‘bad faith’ and awarded Mr. Laver £30,000 for unfair dismissal.

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