When dismissing an employee, employers often think that they are helping their employee by toning down the reason for dismissal, rather than directly addressing the employee’s flaws.  Unfortunately, a fabricated reason that is intended to make the dismissal easier on the employee can have unintended consequences for your business.

In a recent case, an employer identified concerns about an employee’s capabilities but did not raise any concerns.  The employer decided to soften the blow when deciding to dismiss him and rather than refer to his [in]capability it made a nicer excuse instead.

The employee claimed constructive dismissal, it was held on appeal that the employer had breached the implied term of trust and confidence when it gave false reason for employee’s dismissal.

In all but the most unusual of cases, the implied term had to import an obligation not to deliberately mislead. How otherwise could trust and confidence be maintained? That did not necessarily place an employer under some broader obligation to volunteer information, but where a choice was made to do so, the implied term required it to be done in good faith. Even if there could be particular cases in which the operation of the implied term would permit some element of deceit (”the white lie that serves some more benign purpose”), this was not such a case.