Venu Parmeshwaran Nair v Lagardère Sports and Entertainment UK Ltd

The implied term of trust and confidence is fact-sensitive and requires consideration of all the circumstances. It is not confined in every case to positive prohibitions or to conduct directed expressly at the employee. A failure to act may constitute conduct capable of breaching the term, particularly where it forms part of an egregious and knowing course of prevarication concerning substantial sums known to be due.

The authorities rejecting a general duty to protect an employee’s financial wellbeing do not make every claim involving unpaid remuneration hopeless. Whether conduct is a mere omission, or positively destructive conduct, depends on the facts. At the strike-out or summary judgment stage, a claim should proceed where its legal character depends on facts reasonably expected to emerge at trial.

The claimant had worked within a group of companies and was employed by the defendant following a corporate reorganisation. He alleged that substantial bonus payments due under contracts with other companies in the group had not been honoured. He claimed that the defendant’s failure to secure payment, together with prolonged conduct said to have strung him along, breached the implied term of trust and confidence.

The defendant applied to strike out the claim and/or obtain summary judgment. It argued that the implied term imposed no positive duty to protect an employee’s financial wellbeing or procure payment by separate companies, and that the claim was also unsustainable for want of causation. The central issue was whether the pleaded conduct was incapable in law of breaching the implied term.

1. Application dismissed in relation to the principal claim. The claim was not fanciful and was not shown to have no real prospect of success. The factual evidence was incomplete, disclosure had not taken place, and the legal characterisation of the alleged conduct depended on facts reasonably expected to be available at trial.
2. The recognised implied term of trust and confidence is whether, in all the circumstances, the employer conducted itself without reasonable and proper cause so as to destroy or seriously undermine the relationship of trust and confidence. The term may be breached in many ways. It is not necessary to classify conduct rigidly as either positive or negative.
3. A failure to secure payment by companies within the same broad corporate group could, in an appropriate factual context, amount to conduct capable of breaching the term. A prolonged course of prevarication or stringing along concerning a substantial bonus might be viewed as positively destructive conduct rather than a bare omission. Whether the defendant had sufficient control over the other companies, and what occurred in the relevant discussions, required fuller evidence.
4. Crossley v Faithful & Gould Holdings Ltd [2004] EWCA Civ 293, Greenway and others v Johnson Matthey Plc [2016] EWCA Civ 408 and James-Bowen v Chief Commissioner of the Metropolitan Police [2018] UKSC 40 did not establish that the present claim was necessarily barred. They concerned extensions or derivative duties requiring cautious treatment, whereas the claimant relied on application of the existing term to alleged conduct concerning an accrued bonus.
5. The causation argument did not justify summary disposal. If contract and breach were established, failure to prove the full quantum of loss would not defeat the contractual claim. The expenses claim also had to proceed to proof and trial.