{"id":5618,"date":"2026-01-29T00:00:00","date_gmt":"2026-01-29T00:00:00","guid":{"rendered":"https:\/\/shooklin.com\/singapore-high-court-affirms-the-existence-of-the-implied-term-of-mutual-trust-and-confidence-in-employment-contracts-under-singapore-law\/"},"modified":"2026-06-30T03:43:14","modified_gmt":"2026-06-30T03:43:14","slug":"singapore-high-court-affirms-the-existence-of-the-implied-term-of-mutual-trust-and-confidence-in-employment-contracts-under-singapore-law","status":"publish","type":"post","link":"https:\/\/shooklin.com\/zh-hans\/singapore-high-court-affirms-the-existence-of-the-implied-term-of-mutual-trust-and-confidence-in-employment-contracts-under-singapore-law\/","title":{"rendered":"Singapore High Court affirms the existence of the implied term of mutual trust and confidence in Employment contracts under Singapore Law"},"content":{"rendered":"

\"Employment<\/p>\n

[Employment contracts \u2013 Implied term of mutual trust and confidence]<\/em><\/p>\n

As noted by the Appellate Division of the Singapore High Court in Dong Wei v Shell Eastern Trading (Pte) Ltd and another<\/em> [2022] 1 SLR 1318 (\u201cDong Wei\u201d), the question of whether the implied term of mutual trust and confidence exists in Singapore law remains an open one for the Singapore Court of Appeal to resolve in an appropriate case. In the recent case of Prashant Mudgal v SAP Asia Pte Ltd<\/em> [2026] SGHC 15, however, the Singapore High Court boldly affirmed that the implied term of mutual trust and confidence does exist in employment contracts under Singapore law, and outlined the contours of this implied term.<\/p>\n

Background Facts<\/h4>\n

In Prashant Mudgal v SAP Asia Pte Ltd<\/em> [2026] SGHC 15 (\u201cJudgment\u201d), the claimant was a former employee of the defendant, SAP Asia Pte Ltd. His last held position was the \u201cHead of Services Sales\u201d for the Ariba line of business in the Asia Pacific and Japan region. Following a couple of incidents referred to in the Judgment as the \u201cWipro Incident\u201d and the \u201cSesa Goa Incident\u201d, the claimant\u2019s relationship with his superiors within his direct reporting line (amongst others) became increasingly fraught. The defendant purported to place the claimant on a Performance Improvement Plan (\u201cPIP\u201d) which was stated to have been completed on 5 May 2019. The defendant subsequently terminated his employment on or around 21 November 2019 by giving to the claimant the required notice in accordance with his employment contract.<\/p>\n\n

The claimant commenced the suit against the defendant, alleging that there had been a conspiracy to terminate his employment. The claimant also alleged that the defendant had breached the implied term of mutual trust and confidence in his employment agreement (amongst other things) and claimed damages amounting to approximately $4.9 million.<\/p>\n

Decision<\/h4>\n

The Singapore High Court readily dismissed the claimant\u2019s claims for conspiracy, finding that the defendant had the contractual right to terminate the claimant\u2019s employment and the termination was not wrongful.<\/p>\n\n

The Judge, however, affirmed that the implied term of mutual trust and confidence existed in employment contracts under Singapore law, and the defendant had breached this implied term by placing the claimant on a PIP, when the outcome of the PIP was \u201cpre-ordained\u201d and the defendant had already made up its mind to terminate the claimant\u2019s employment.<\/p>\n\n

In affirming that the implied term of mutual trust and confidence existed in Singapore law governed employment contracts, the Judge made the following key points:<\/p>\n

\n