CONFIDE IN ME

RDF Media Group Ltd v Clements

Every employment contract contains a number of implied clauses, including one of trust and confidence. In RDF Media Group Ltd v Clements, the High Court said that it is a mutual obligation and employees must not be in breach of the clause themselves if they want to rely on the employer’s breach in a constructive dismissal claim.

Basic facts

Following the sale of IWC Media Ltd to RDF in December 2005, Mr Clements started work as their director of content. He agreed to a number of restrictive covenants, including one which said he would not work for a competitor for three years. He also agreed to a six month notice period.

Sixteen months into the agreement, Mr Clements handed in his notice, saying that he intended to work for a competitor, and wanted to negotiate a reduced notice period. RDF refused and said it would put him on “garden” leave for the full notice period and hold him to the covenants.

Mr Clements then accused the company of briefing against him in the press and claimed constructive dismissal on the basis that they were in breach of the implied term of trust and confidence. RDF sought an injunction requiring Mr Clements to stick to the non-competition clauses of his contract.

Trust and confidence

The court pointed out that employers must not do anything "without reasonable and proper cause” that might breach the clause of mutual trust and confidence. Although it is a mutual obligation, it made clear that it is the impact of the employer's behaviour on the employee that is significant.

However, the onus is on the employee to prove that there has been a breach and that is far from easy. It is not enough to prove that their employer has done something which was in breach of contract or “out of order” or caused some damage to the relationship. Instead, they have to prove that their employer did something so serious that it can be regarded as “repudiatory” of the contract of employment, entitling them to leave immediately.

General guidance

The court made the following points about proving breach of the implied term of trust and confidence:

• Employees can rely on comments made orally or in writing by their employer to argue that there has been a breach of trust and confidence if they are sufficiently serious
• Employees are unlikely to succeed in a claim if the comments are made by one company board member to another, however negative as this is effectively the company “thinking aloud”
• Likewise it will be difficult for employees to succeed if comments are made by executive members of the company (including managers and personnel officers) to one another or to an external adviser if there was "reasonable and proper cause” to make them
• The status of the person who makes the comments is also important. For example, if they manage the employee who has resigned and make their comments in an employment context then it is more likely that the breach will be proven.
• If an employer publishes information about an employee in the press (as in this case) then the fact that the information may be true is not a defence to the allegation that it was a breach of the duty of mutual trust and confidence.
• A court should consider whether the employee is in repudiatory breach of their relationship before finding that the employer is in breach. If the employee has already seriously damaged or destroyed the relationship they should not be allowed to claim that subsequent acts by the employer did so.
  
  

In this case, the court said that as Mr Clements had already damaged the relationship with his employer through his own conduct, he could not claim that RDF was in breach of the implied term of trust and confidence.