DUTY TO OBEY REASONBLE ORDER
Case: Shirlaw v Southern Foundries (1926) Ltd and Federated Foundries Ltd
Facts: S made managing director of SF Ltd, for 10 yrs, company had power to appoint one director managing director, managing
director subject removal, resignation as other directors; “subject to provisions of contract b/w him, company;” FF Ltd
acquired control of SF Ltd; new
articles gave power to FF Ltd to remove directors; S removed; appointment as managing
director ipso facto terminated; argued implied term SF Ltd would not remove S from office of director, but could not be read
into contract
Held: Removal of S as director breach of contract, implied term that SF Ltd would not alter articles to remove S as director
Case: Mears v Safecar Security Ltd
Facts: Appellant security guard; given written ‘Terms of Reference;’ set out job description, date employment began, remuneration,
hours, holidays, conditions for payment of bonus, notice required to terminate agreement; no provision for sick pay; no
discussion of sick pay; appellant took sick leave; later discontinued employment; appellant applied tribunal; held
presumption employee’s wages payable when sick, but thru deductions; appealed to EAT against decision payment of wages
subject to deductions, company cross-appealed that sick pay not implied into contract; EAT held practice of company not to
pay sick pay; appealed to HOL
Held: Appeal dismissed (1) tribunal should first determine if term agreed to expressly either orally, by implication; if yes, then
tribunal determine particulars ought to be in statement of terms, if not, tribunal w/ open mind unprejudiced consider
circumstances, relationship b/w E, e, including way they worked, in order to imply, determine missing term which ought to
have been particularized to complete contract (2) industrial tribunal wrong to treat term implied b/c of presumption of sick
pay; practice of company not to sick pay; well known; appellant took sick nearly 7 of 14 months; not asked for sick pay
Case: Sagar v H. Ridehalgh & Sons Ltd
Facts: E claimed benefit of custom of making fine, deductions for careless work; in existence for many years at mills; argued that
majority of mills practice custom; e stated at time of employment he knew nothing of custom, became aware much later;
Farewell J usage not sufficiently general (15% of mills did not use practice); not reasonable, certain
Held: CA reversed decision; Lawrence LJ e knew of practice, practice in operation for 30 yrs; e accepted employment at mills on
same term, conditions as other e; practice sufficiently general, not arbitrary, limited to cases where e did bad work, amounts
not to exceed actual, estimated damage, loss
Case: Laws v London Chronicle (Indicator Newspapers) Ltd
Facts: e of D, engaged by company as ad rep three weeks previously, followed ad manager, her immediate superior, out of room of
managing director after embarrassing interview b/w ad manager, director, despite latter saying “stay where you are;” she left
room out of loyalty to immediate superior, who asked her to follow; b/c situation was embarrassing, unpleasant; she
dismissed summarily for misconduct
Held: Appeal dismissed; single act of disobedience could justify dismissal only if show that servant was repudiating contract of
service or one of its essential conditions, constitute act of willful disobedience; in present case P’s not willful disobedience,
dismissal wrongful
Case: Morrish v Henlys (Folkestone) Ltd
Facts: e, store driver, obliged to draw diesel oil for vehicle from E’s pumps; three occasions e drew five gallons of diesel oil;
recorded on monthly fuel invoice; each occasion he subsequently discovered entry of five gallons changed to one of seven
gallons; alterations made by Es’ manager who explained to employee this done to cover deficiency of two gallons; e refused
entry; e dismissed; industrial tribunal awarded e £100 compensation for unfair dismissal; e appealed against amount E crossappealed on ground that e not unfairly dismissed
Held: Appeal allowed, cross-appeal dismissed (i) e not unreasonable; no implied term to connive falsification, entitled to refuse
such falsity; tribunal failed to show reasons for award; (iii) no reduction to e’s compensation even if contributed
Case:
Macari v Celtic Football and Athletics Ltd
on work sheet
DUTY OF FIDELITY
Case: Faccenda Chicken Ltd v Fowler and others
Facts: P in business of making fresh chickens; employed F as sales manager; at F’s suggestion adopted method of selling from
refrigerated vans that traveled particular routes; F left P’s company, started his own, several e also left; same business, same
area, same marketing strategy; P sued for breach of contract, using P’s sales information (names of clients, contracts, etc.),
injuring P’s good will, abuse of confidential info; judge dismissed claim; appealed
Held: Duty of fidelity owed by e former employer not as great as duty implied on present e; use or disclosure of confidential
information, even though not trade secret, breach of good faith; confidential info on E’s business acquired by e in course of
service could be used after employment unless info trade secret, so confidential that it required same protection as trade
secret; must give regard to nature of e, if regularly held sensitive info, if info restricted; applying tests, clear neither sales info
nor prices were confidential
Case: Hivac Ltd v Park Royal Scientific Instruments Ltd
Facts: A manufactured thermionic valves, including midget valves for hearing aids; required considerable skill; R, manufactured
not merely thermionic valves but complete hearing aids; five of A’s workers worked for R on free day, Sunday w/out A’s
knowledge; no evidence five disclosed confidential info; appeal against refusal of interlocutory injunction restraining R from
employing workers question if breach of contract for e to devote spare time to service of R; recourse for A is to fire e
Held: A made prima facie case of e’s obligation to serve w/ good faith, fidelity; implied term; no reason why court should not
decide matter in absence of e (brought suit against company not e); having regard to labor shortage, difficult, unreasonable to
have E resort to dismiss e; interlocutory injunction barring R from hiring e granted
Case: Neary v Dean of Westminister
Facts: Employee failed to disclose profits, which he made from recording contracts, related arrangements which he entered into by
virtue of position as organist at Westminster Abbey
Held: Liable for breach of duty of mutual trust, confidence, fidelity
DUTY OF COOPERATION
Case: The Secretary of State for Employment v Associated Society of Locomotive Engineers and Firemen and others
Facts: As result of industrial dispute, executive of three unions instructed members to ban overtime, act strictly in accordance w/
British Railway regulation, undertake nothing other than normal duties; secretary petitioned tribunal for discontinuance of
industrial action, evidence railway system effectively in state of chaos, would result in grave injury to national economy
Held: Action ordered by union breach of contractual conditions which applied to railway service to constitute “irregular industrial
action short of strike; ground that secretary of state could take view irregular industrial action short of strike had begun;
secretary’s view that it would be conductive to settlement if industrial action temporarily discontinued not open to attack, that
such action cause interruption to national economy on grave scale supported by evidence; accordingly statutory conditions
fulfilled, courts duty to make order, require unions to discontinue industrial actions
Case: British Telecommunications v Ticehurst
Facts: P managers, members of trade union; took part in industrial action, w/drew goodwill, participated in half day strike; on return
told further strike action in breach of contract; two took further strike action; asked to sign undertaking that they would
comply w/ contract; refused; sent home for four consecutive day; sued to recover lost wages; IT ruled in e favor
Held: Allowing appeal in favor of E; term in contract to serve E’s interests faithfully; e manager, given responsibility for others,
entrusted w/ judgment, discretion, supervising other workers; breached term when participated in strike, w/drew good will;
did so as to disrupt business, cause most inconvenience; both Ps show not ready, unwilling to work according to contract;
evidenced continued intention of industrial action; E did not have to accept part performance; could w/hold part salary
Case: Sim v Rotherham Metropolitan Borough Council and other actions
Facts: Dispute b/w teachers, E, local education authorities; union instructed members to refuse to co-operate w/ practice of
covering, standing in for absent teachers; four P teachers refused to cover; D deducted pay from monthly salaries by way of
damages; contract contained no provision for either obligation to provide cover, extent of obligation as teacher; P sued
arguing cover matter of goodwill, not contractual obligation, thus D not entitled to make deductions
Held: Must determine if obligation contractual, professional duty owed to student, teachers; if so, then breach; cover arrangements
administrative directions necessary for proper conduct of school, teachers always accepted professional obligation to comply
in same way accepted professional obligation to comply with school timetable; followed that P had contractual obligation to
cover, refusal breach of contract; equitable set-off available to E as defense to action for salary by e b/c damage suffered by
E; irrelevant that breaches short, damages small
Case: Burgess v Stevedoring Services Ltd
Facts: P stevedoring company, port workers union entered into collective agreement that union undertook to provide gangs to work
overtime when requested by P; agreement provided failure to turn up for overtime w/out notice call for disciplinary action;
Trade Union Act: collective agreement not directly enforceable by P against union; labor dispute erupted, industrial action,
ban on overtime; P brought action in SC claiming part of essential services as dock, port workers, ban from “irregular actions
short of strike;” court grant injunction banning action; dispute settled, another dispute emerged; court issued contempt order;
D petitioned for injunction; dismissed; appeal at CA dismissed; appealed to PC
Held: Allowing appeal in favor of D, Ds part of essential services; overtime part of contract of every e; e committed no breach b/c
union had not assigned them; so ban on overtime no part of industrial action
DUTY OF CARE
Case:
Lister v Romford Ice & Cold Storage Co Ltd 1957
Facts: While backing lorry in yard of slaughter-house which he sent to collect waste, appellant, lorry driver employed by
respondents, negligently injured his father, also employed by respondents; father obtained judgment for damages for
negligence against respondents; respondents’ insurers, brought action against appellant for negligence, breach of contractual
duty to drive w/ due care; appellant alleged terms (among others) implied in contract: that R indemnify him for negligence in
course of employment; that he benefit from E’s insurance
Held: A breach of duty to E, respondents to take due care; R entitled to recover damages from A for payment to father; no term
implied in contract of driver of motor vehicle, either that he entitled to be indemnified by E or that he entitled to benefit of
insurance for accidents due to his lack of care
EMPLOYER’S DUTY TO PAY WAGES
Case: Devonald v Rosser & Sons
Facts: E, owned tinplate works, closed works for lack of business during depression in trade; two weeks later gave notice of one
month to terminate contract of manual workforce; during this six week period, es who were piece workers, received no pay;
could not bring claim in debt, since paid for each completed piece of work, no work done in period in question;
Held: Claim in damages succeeded b/c of implied term that E would find work for period they remained employed
Case: Miles v Wakefield Metropolitan District Council HOL
Facts: P, superintendent registrar of births, deaths, marriages in D council’s area; by law council responsible for paying P salary;
law stated superintendent registrars held office during pleasure of Registrar General; P worked weekdays, three hours on Sat;
as part of industrial action P refused to conduct marriage ceremonies but did all other duties on Sat; P not paid unless
prepared to do all work; when he refused council w/held part of salary; action by P to recover amount w/held dismissed, but
CA allowed P’s appeal on grounds that P was statutory office-holder who had no contractual relationship w/ council, which
was under unqualified obligation to pay P for as long as he held office; council not entitled to take disciplinary action against
P by way of w/holding salary; only remedy was dismissal; council appealed
Held: Appeal allowed; salary P received from council constituted remuneration for work done; not simply honorarium; although no
contract b/w P, council, nature of P’s remuneration, terms of tenure so closely analogous to contract of employment that
claim to salary payable under 1953 Act to be considered same as claim to salary or wages under contract of employment
P, in action for remuneration under contract of employment must prove he ready, willing to render services required
of him by contract; he could not do that if he refused to perform full duties required; follows that if E offered partial
performance of contract, eg by refusing to perform part b/c of industrial action, E entitled to decline to accept, E cannot sue
for payment for unwanted services; since P w/held services, cannot recover
 Quantum meruit: payment for value of services, v no pay, E does not have to accept partially performance
Case: Browning v Crumlin Valley Collieries
Facts: P, miners, employed by D; P refused to work b/c unsafe b/c of shafts; dangerous condition not due to negligence, breach of
duty of D; mine closed for repairs’ P sued for loss wages
Held: Necessary to imply term that in event such what happen E not liable to pay wages or damages to workmen during time
reasonably required to effect repairs; D could not prevent shaft’s condition, thus not liable; applied “no work, no pay”
SUSPENSION AND LAY OFF
Case: Hanley v Pease & Partners Ltd
Facts: E mineworker; overslept, missed shift; E had rule if more than ten minutes late, not work on that day; showed up for second
day, suspended for day
Held: Contract contained no express right of suspension for second day; no right could be implied; after declining to dismiss
worker, treating contract as continuing E took upon themselves to suspend worker, deprive him of wages, had no right
Case: Minnevitch v Café de Paris (Londres) Limited
Facts: P leader of orchestra whose performance was light, comical nature; contract of employment w/ d contained “no play, no pay”
clause; Mon news spread King George V ill; P informed by D performance not required; upon King’s death, P’s performance
postponed until end of week; P, orchestra ready, willing to play; D sued; P claimed circumstances beyond control
Held: Refusal of D to allow performance on M, T reasonable, no reason for refusal on other four days, P entitled to fee
No implied term can be read into contract. If P asked to agree to term would refuse b/c he had to pay his own orchestra if
performed or not; “no play, no pay” clause not apply so long as P ready, willing to play; MacNaghten J: D argued they under
no obligation b/c in fact no performance; but while agreement imposed on P obligation to attend at appointed time, play, also
imposed on D obligation to permit P to give performance; if w/out just cause or excuse they refuse performance they must
pay; tried to imply public mourning clause; turns on if D can establish just cause, excuse for refusing P permission to
perform; establish M, T, not for other four days (implied term: if cause which they have no control occurs, contract becomes
impossible)
DUTY TO PROVIDE WORK
Case: Breach v Epsylon Industries
Facts: A employed by R as chief engineer; most of work A engaged in transferred to Canada; A made almost redundant; did not
want to resign for fear of losing redundancy benefit; did not want to remain quickly get out of touch w/ expertise required in
industry; A’s solicitors wrote R stating due to failure to provide work as chief engineer, A considered contract repudiated;
claimed redundancy payment
Held: EAT upheld appeal; whether repudiation by E depends if term ought to be implied that there was obligation on E to provide
work suitable as chief engineer; Turner does not lay done principle that E under no duty to provide work – obligation to pay
wages, not to provide work, but very well may be cases where duty to provide work; necessary to look at circumstances,
background to see if obligation to provide work exists; Turner may be out of touch; may now be obligation; appeal allowed
DUTY TO MAINTAIN TRUST AND CONFIDENCE
Case: Malik v BCCI
Facts: Applicants e of bank; provisional liquidators made positions redundant; bank widely know to be operating fraudulently;
neither e able to obtain employment in financial services industry, allegedly b/c of stigma; each submitted proof of debt in
liquidation claiming substantial compensation for alleged stigma; on appeal by applicants
Held: Allowing appeal; implied obligation on E to not carry on dishonest, corrupt business, if reasonably foreseeable that b/c of
corruption e suffered, E liable, even if e did not know until after they left
Case: Moores v Bude-Stratton Town Council
Facts: M employed as gardener, technician by council; subjected to abuse in front of others, accusations of dishonesty by Mrs.
Parsons, councilor; council reprimanded Parsons, at meeting, suspended her from office for one month; M resigned; claimed
constructive dismissal; IT held E not liable, b/c council his E, not Parson
Held: EAT: council vicariously liable; individual councilors under duty not to undermine trust, confidence; test for breach of trust,
confidence: whether conduct reasonably, sensibly disable other party from properly carrying out obligations; E must provide
environment reasonably tolerable for every e