Labour & European Law Review Weekly Issue 236 22 September 2011
As well as express terms, contracts of employment also contain implied terms, such as the term of trust and confidence. In McBride v Falkirk Football & Athletic Club, the Employment Appeal Tribunal (EAT) said that employers cannot defend a breach of the implied term of trust and confidence by arguing that it’s alright to treat an employee badly because that’s how everyone in the industry is treated.
After working part time in a coaching role from 2002, Mr McBride was appointed first team coach in 2007 and put in charge of the reserve team at Christmas 2008. In June 2009 he was appointed manager/head coach of the under 19s team and was assured that he could manage them “without interference”.
In December 2009 Mr McBride was told, without any consultation or explanation, that the director of the youth academy would pick the under 19s team in future. The club had always intended that the academy director would take over that role some day but Mr McBride did not know that.
After a conversation with the manager on 10 December at which the manager made clear he would not reconsider, Mr McBride responded “that he could not work under those circumstances.” He resigned and claimed constructive unfair dismissal.
The Tribunal found that the club’s instruction that he was no longer responsible for the selection of the under 19s team was not a breach of contract.
It found that the real intention of the parties was not that stated by the manager when he was appointed, and found instead that there was an implied term in the contract that the academy director, once appointed, would have the final say.
The Tribunal was heavily influenced by evidence from the assistant coach that everyone in the football world knew that the manager and academy director were the “two kingpins” and that Mr McBride would know that the academy director would have the power to select the teams.
In any event, the Tribunal said that even if it had found the club to be in breach of contract, Mr McBride’s claim would still fail because he did not leave in response to the breach. He left because he had said he could not work in circumstances where someone else retained the final say on team selection.
The EAT disagreed, holding that Mr McBride had been unfairly dismissed.
It was critical of the Tribunal for implying a term in his contract and said that it was only appropriate to do so where the parties “intended the term in question to be part of their original contract”.
Apart from the fact that the term implied by the Tribunal was too “imprecise to be enforceable”, no one had said anything remotely like that to Mr McBride when he was appointed. On the contrary, he had been told he was to be in control without interference. Accordingly, the EAT found that the transfer of the responsibility for picking the under 19s team to the Academy Director was a substantial alteration of Mr McBride’s duties.
As to the way in which this decision was communicated to Mr McBride, the EAT also rejected the Tribunal’s reason for refusing to find the club was in breach of the mutual term of trust and confidence because an “autocratic style of management” was the norm in football. It said that it was no defence to argue that it was okay to treat Mr McBride badly because that’s the way everyone in the industry was treated. The standard of conduct expected of employers was an objective one, and not confined to the industry in question.
It concluded that the club was therefore in breach of contract and this was what had caused Mr McBride to resign. It upheld the appeal, substituting its own decision that the dismissal was unfair, and remitted the case to another Tribunal to decide compensation.
This case reinforces the legal principle that it is only appropriate to imply a term into a contract where, considering what has been expressly agreed, the implied term is necessary, obvious and precise. The breach of contract in this case consisted not only removing important aspects of Mr McBride’s managerial role, but also the manner in which this was done. The EAT found that the club manager who made the decision should have met with Mr McBride himself, and sought his views on how the arrangement was going to work in practice.