Limitation Period: Mutual Trust and Confidence Claims

Mutual trust and confidence claims arise in employment law where it is alleged that an employer has breached the implied term of mutual trust and confidence in the employment contract. This implied term requires employers and employees not to act in a manner that destroys or seriously damages the relationship of trust and confidence between them.

These claims are commonly raised in constructive unfair dismissal cases, breach of contract disputes, and claims involving workplace treatment such as bullying, harassment, or unjustified disciplinary action. A key issue in all such disputes is the limitation period, which determines the strict time limit for bringing a claim in the Employment Tribunal or civil courts.

Because mutual trust and confidence is an implied contractual term, limitation rules depend heavily on how the claim is framed and which legal forum is used.

What Is the Implied Term of Mutual Trust and Confidence?

The implied term of mutual trust and confidence is a fundamental principle of UK employment law. It requires that:

• Employers must not, without reasonable and proper cause, conduct themselves in a manner likely to destroy or seriously damage the employment relationship
• Employees must also act in good faith towards their employer

This term is implied into all employment contracts by law, regardless of whether it is written explicitly.

Examples of potential breaches include:

• Unfair or arbitrary disciplinary action
• Failure to address workplace bullying or harassment
• Unjustified demotion or exclusion from work
• Sudden unilateral changes to working conditions
• Humiliating or degrading treatment by management

Legal Basis for Mutual Trust and Confidence Claims

Claims involving breach of mutual trust and confidence may arise in several legal contexts:

1. Constructive unfair dismissal

Where an employee resigns in response to a fundamental breach of contract by the employer, including breach of mutual trust and confidence.

2. Breach of contract claims

Where the employment relationship continues or has ended, a claimant may seek damages for contractual breach.

3. Discrimination-related claims

Although discrimination claims are governed by separate legislation, breach of trust and confidence is often pleaded alongside Equality Act 2010 claims.

Limitation Periods for Mutual Trust and Confidence Claims

The limitation period depends on the legal route taken.

1. Employment Tribunal claims: 3 months less one day

Most mutual trust and confidence claims brought in Employment Tribunals are subject to the limitation period of:

• Three months less one day from the effective date of termination or the act complained of

This applies to:

• Constructive unfair dismissal claims
• Discrimination claims involving breach of trust
• Unlawful deduction from wages linked to workplace conduct
• Claims arising from resignation due to breach of contract

The deadline is strictly enforced.

When Does Time Start Running?

The starting point depends on the type of claim.

Constructive dismissal claims

Time runs from:

• The effective date of termination, usually the date of resignation

Even though the breach may have occurred earlier, the limitation clock starts at resignation.

Ongoing conduct or workplace treatment

Where the claim involves a series of acts:

• The limitation period usually runs from the last act in a “continuing act”
• This is often relevant in harassment or bullying cases

However, tribunals distinguish between:

• A continuing course of conduct
• Isolated acts with ongoing consequences

Single breach of contract

If the claim is purely contractual:

• Time runs from the date of the breach

ACAS Early Conciliation and Time Limits

Before bringing most Employment Tribunal claims, claimants must notify ACAS for Early Conciliation.

This affects limitation as follows:

• The limitation period is paused during Early Conciliation
• Time resumes once the ACAS certificate is issued
• A short extension applies after certification to submit the claim

Important limitations:

• Early Conciliation does not revive expired claims
• It must begin before the limitation period ends

2. Civil court claims: 6-year limitation period

Where mutual trust and confidence claims are brought as breach of contract in civil courts, the limitation period is:

• 6 years from the date of breach
  (Limitation Act 1980, section 5)

This applies to:

• Contractual claims not pursued in tribunals
• Post-employment claims for damages
• High-value employment contract disputes

3. Continuing breach of mutual trust and confidence

Many claims involve ongoing workplace issues. Courts assess whether:

Continuing breach

• The employer's conduct forms a continuous pattern
• Limitation may run from the last act in the series

Single breach with continuing effects

• One act causes long-term harm
• Limitation runs from the date of the original act

This distinction is often decisive in limitation disputes.

4. Fraud, concealment, and delayed discovery

Under section 32 of the Limitation Act 1980, limitation may be postponed where:

• The employer deliberately concealed wrongdoing
• Facts relevant to the claim were hidden
• The claimant could not reasonably discover the breach

In such cases:

• Time begins when the claimant discovered or could reasonably have discovered the breach

This is particularly relevant in workplace disputes involving hidden investigations, falsified records, or concealed misconduct.

Key Case Law Principles

The implied term of mutual trust and confidence has been developed through case law, including principles that:

• Employers must not act in a way that is calculated or likely to destroy trust and confidence
• The test is objective, assessed from the perspective of a reasonable employee
• Intention is not always required; effect may be sufficient

These principles influence when a breach is said to occur, which in turn affects limitation.

Practical Steps in Mutual Trust and Confidence Claims

1. Identify the legal claim type

Determine whether the claim is:

• Constructive dismissal
• Breach of contract
• Discrimination-related claim

2. Establish key dates

• Date of alleged breach
• Date of resignation (if applicable)
• Date of last incident in ongoing conduct

3. Determine limitation route

• 3 months less one day (tribunal claims)
• 6 years (civil contract claims)

4. Initiate ACAS Early Conciliation

Mandatory for most tribunal claims.

5. Prepare supporting evidence

• Emails and internal communications
• HR records and grievance documents
• Witness statements
• Medical or impact evidence (if relevant)

Risks of Missing the Limitation Period

If limitation expires:

• Tribunal claims will be rejected
• Civil claims become statute-barred
• Constructive dismissal claims cannot proceed
• Loss of potential compensation for unfair dismissal or breach of contract

Because mutual trust and confidence claims often underpin constructive dismissal, missing limitation deadlines can eliminate multiple legal remedies at once.

Common Questions

Is breach of trust and confidence always constructive dismissal?

No. It can also form part of a general breach of contract claim without resignation.

Does resignation restart limitation?

No. Limitation runs from resignation or breach, depending on claim type.

Can internal grievance procedures extend limitation?

No. They do not pause or extend statutory time limits.

Key Takeaways

Mutual trust and confidence claims in England and Wales arise from an implied contractual duty in employment relationships. Limitation periods depend on the legal route taken. Employment Tribunal claims are generally subject to a three months less one day deadline, while civil breach of contract claims allow six years. In constructive dismissal cases, time runs from resignation. ACAS Early Conciliation pauses limitation but does not revive expired claims. Because these claims often involve ongoing workplace conduct, identifying the correct breach date is essential to preserving legal rights.