Australian Iron & Steel Pty Ltd v Banovic

The High Court of Australia considered an appeal by Australian Iron & Steel Pty Ltd (the employer) against a decision of the Industrial Commission of New South Wales, which had granted an injunction to Mr. Banovic (the employee). The dispute concerned the employer's right to dismiss the employee, who had been absent from work due to a work-related injury. The employee had been granted workers' compensation, and the employer sought to terminate his employment during this period of incapacity.

The central legal issue before the High Court was whether the employer was entitled to terminate the employee's contract of employment at common law while the employee was absent from work due to a work-related injury for which he was receiving workers' compensation. This involved an examination of the employer's common law right to terminate employment and its interaction with statutory workers' compensation provisions.

The High Court held that the employer's common law right to terminate the employment contract was not abrogated by the Workers' Compensation Act 1926 (NSW). However, the Court found that the employer's conduct in terminating the employee's employment while he was incapacitated due to a work-related injury constituted a breach of an implied term of the employment contract. This implied term, the Court reasoned, required the employer to refrain from conduct that would deprive the employee of the benefit of his employment, particularly during a period of incapacity for which he was entitled to compensation. The employer's termination was therefore wrongful.

The High Court dismissed the employer's appeal, upholding the Industrial Commission's decision to grant the injunction.