Franchise lawyers at Fisher Cartright & Berriman discuss implied term of good faith in employment contracts

A recent decision passed down in the West Australian Supreme Court has confirmed the existence of an implied term of good faith in employment contracts, Fisher Cartright & Berriman franchise lawyers report.

In passing judgement, the Court confirmed that a contractual duty exists on employers to act fairly and in good faith when dealing with their employees, but that this obligation does not extend to the termination of an employee’s employment.

In addition, the Court confirmed that a reasonable notice of termination term is implied in employment contracts where no express notice provision is included.

Fisher Cartright & Berriman note that this case reiterates the need for employers to consider what it means to act fairly and in good faith when dealing with employment issues, and to have carefully drafted employment contracts, including express notice terms.

Where express notice terms do not exist, the franchise lawyers note, employers may be exposed to claims for reasonable notice by employees on termination of their employment.