Malik v BCCI (1997 IRLR)

Employers must take care not to damage their employees' future employment prospects, by harsh and oppressive behaviour or by any other form of conduct that is unacceptable today as falling below the standards set by the implied trust and confidence term.

Case facts

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


Conclusion for me

It is an implied term of any contract of employment that the employer shall not without reasonable and proper cause conduct itself in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee. An employer might be liable in damages to an employee stigmatised by association with the employers’ improper methods of conducting business, even though he only learned of the misdeeds after the termination.

Employers must take care not to damage their employees' future employment prospects, by harsh and oppressive behaviour or by any other form of conduct that is unacceptable today as falling below the standards set by the implied trust and confidence term.


Updated: 3rd May, 2021
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