''Malik and Mahmud v Bank of Credit and Commerce International SA'' UKHL_23
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UKHL 23
is a leading English contract law">997
UKHL 23
is a leading English contract law and UK labour law case, which confirmed the existence of the implied term of

mutual trust and confidence Mutual trust and confidence is a phrase used in English law, particularly with reference to contracts in UK labour law, to refer to the obligations owed in an employment relationship between the employer and the worker. This concept relates to a n ...

in all Contract of employment, contracts of employment.

Facts

Mr Malik and Mr Mahmud both worked for the Bank of Credit and Commerce International. BCCI went

insolvent In accounting, insolvency is the state of being unable to pay the debts, by a person or company ( debtor), at maturity; those in a state of insolvency are said to be ''insolvent''. There are two forms: cash-flow insolvency and balance-sheet i ...

due to massive fraud, connection with terrorists, money-laundering, extortion and a raft of other criminal activity on a global scale. Malik and Mahmud had both lost their jobs and they sought employment elsewhere. They could not find jobs. They sued the company for their loss of job prospects, alleging that their failure to secure new jobs was due to the reputational damage they had suffered from working with BCCI. Nobody, they said, wanted to hire people from a massive fraud operation like that at the company. This raised the question of what duty the company had owed to its employees that had been broken. Although there was no express term in their contracts, Malik and Mahmud argued there was an implied term in their employment contract that nothing would be done calculated to undermine mutual trust and confidence. The House of Lords unanimously held that the term of

would be implied into the contract as a necessary incident of the employment relation. This was a term implied by law.

Lord Nicholls Donald James Nicholls, Baron Nicholls of Birkenhead, (25 January 1933 – 25 September 2019) was a British barrister who became a Law Lord (Lord of Appeal in Ordinary). Biography Nicholls was educated at Birkenhead School, before readi ...

said the following.

Lord Steyn Johan van Zyl Steyn, Baron Steyn, PC (15 August 1932 – 28 November 2017) was a South African-British judge, until September 2005 a Law Lord. He sat in the House of Lords as a crossbencher. Early life and education Steyn was born in Stellen ...

said the term, as it had evolved, was a ‘sound development’. He continued.

998 Year 998 ( CMXCVIII) was a common year starting on Saturday (link will display the full calendar) of the Julian calendar. Events By place Europe * Spring – Otto III retakes Rome and restores power in the papal city. Crescenti ...

AC 20, 44-5 The principle was not limited by any rule that an employee had to know of the breach while the employment relationship subsisted, since if that ‘were right it would mean that an employer who successfully concealed dishonest and corrupt practices before termination of the relationship cannot in law commit a breach of the implied obligation whereas the dishonest and corrupt employer who is exposed during the relationship can be held liable in damages.

Notes

References

* D Brodie, ‘Recent cases, Commentary, The heart of the Matter: Mutual Trust and Confidence’ (1996) 25 ILJ 121 *E McGaughey, ''A Casebook on Labour Law'' (Hart 2019) ch 5, 221 {{DEFAULTSORT:Malik And Mahmud V Bank Of Credit And Commerce International Sa United Kingdom labour case law English contract case law House of Lords cases 1997 in case law 1997 in British law United Kingdom employment contract case law

Facts

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References