The Future of the Employment Contract

Dr Joellen RileyLaw Faculty

University of New South Wales

Rising individualism . . .… declining collectivismMust we blame global capital?

Or the emergence of HRM theory?

Or “Gen Y” preferences?

Proof?

Even ALP policy acknowledges a role for the individual agreement:

Forward with Fairness anticipates the use of “common law arrangements which will allow employers and employees to create flexible and fair workplace arrangements which best suit their needs” (page 7).

The challenges of regulation based on individual contracts . . . 1. Construction and interpretation

2. Remedies

3. Dispute resolution

1. Construction and interpretation:

What is the “contract”? Is this sheaf of papers the contract?

What does it really mean?

“What is the contract” problems The “entire contract” problem:

e.g. Network Ten v Rowe. Inconsistent communications

e.g.: Walker v Citigroup Other communications: HR policies.

E.g. Nikolich

“What does it mean” problems An implied obligation “not to destroy mutual

trust and confidence”. Is this a “good faith” obligation? And what is its practical effect? Observations from some cases:

Walker v Citigroup Taske

Russell [2007] NSWSC 104 “In the context of an employment relationship,

if there exists a duty to act in good faith it ‘imports a requirement that the person doing the act exercise prudence, caution and diligence’, which would mean due care to avoid or minimise adverse consequences to the other party.” [117]

No effect on decisions to terminate? At [138]: “There is no authority in Australia or

England for the proposition that the implied term . . . applies to affect the right to terminate.”

Kerry Foods [2005] IRLR 680: “The giving of lawful notice cannot of itself constitute a breach of the implied term.”

2. Remedies

How are damages assessed (Taske)? Is there room for ‘loss of chance’ (Walker)? Is there room for general damages for mental

anguish (Nikolich, Walker)? Is there room for reinstatement/ specific

performance (Mezey [2007] IRLR 237)?

Dispute resolution

Needs to Be accessible and affordable Generate acceptable and reasonable standards Communicate those standards

Avoid the ‘dark side’ of informality

This is the single greatest challenge for a system based on individual agreements

Solutions?