Matthews v Cool or Cosy Pty Ltd
[2004] WASCA 114
•1 JUNE 2004
JURISDICTION : WESTERN AUSTRALIAN INDUSTRIAL APPEAL COURT
CITATION: MATTHEWS -v- COOL OR COSY PTY LTD & ANOR [2004] WASCA 114
CORAM: STEYTLER J (PRESIDING JUDGE)
PULLIN J
EM HEENAN J
HEARD: 1 APRIL 2004
DELIVERED : 1 JUNE 2004
FILE NO/S: IAC 1 of 2004
BETWEEN: ANTHONY GEOFFREY MATTHEWS
Appellant
AND
COOL OR COSY PTY LTD
CEIL COMFORT HOME INSULATION PTY LTD
Respondents
ON APPEAL FROM:
Jurisdiction : WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
Coram :SHARKEY P, COLEMAN CC, GREGOR C
Citation Number : [2003] WAIRC 10388
File Number : FBA 52 of 2002
Catchwords:
Industrial relations - Claim for unfair dismissal and claim for disallowed contractual benefits - Whether Commission may "deal with" claim for disallowed contractual benefit by awarding damages - Whether employee's contractual right to notice before termination of employment is a contractual "benefit"
Words and phrases - "Benefit"
Legislation:
Industrial Relations Act 1979, s 7, s 7(1a), s 23, s 23A, s 29(1)(b)(i) and s 29(1)(b)(ii)
Result:
Appeal allowed
Category: A
Representation:
Counsel:
Appellant: Mr A L Drake-Brockman
Respondents : Mr A J Power
Solicitors:
Appellant: Gadens Lawyers
Respondents : Jackson McDonald
Case(s) referred to in judgment(s):
Australian National Airlines Commission v Robinson [1977] VR 87
Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435
Balfour v Travelstrength Ltd (1980) 60 WAIG 1015
BGC (Australia) Pty Ltd v Phippard (2002) 115 IR 430
Byrne & Frew v Australian Airlines Ltd (1995) 185 CLR 410
City of Geraldton v Cooling [2000] WASCA 346
Fencott v Muller (1983) 152 CLR 570
Garbett v Midland Brick Co Pty Ltd (2003) 83 WAIG 893
HotCopper Australia Ltd v Saab (2002) 117 IR 256
McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457
Perth Finishing College Pty Ltd v Watts (1989) 69 WAIG 2307
Poliniak v Kaiser Engineers Australia Pty Ltd (1991) 71 WAIG 2624
Robe River Iron Associates v Association of Draughting, Supervisory and Technical Employees of Western Australia (1987) 68 WAIG 11
Siagian v Sanel Pty Ltd (1994) 122 ALR 333
Slee and Stockden Pty Ltd v Blewitt (1992) 47 IR 104
Spencer v Marchington [1988] IRLR 392 (Ch)
Turner v Australasian Coal & Shale Employees' Federation (1984) 6 FCR 177
Wardell v Donnybrook Stone Company (1992) 72 WAIG 2250
Waroona Contracting v Usher (1984) 64 WAIG 1500
Welsh v Hills (1982) 62 WAIG 2708
Westralian Farmers Ltd v Commonwealth Agricultural Service Engineers Ltd (In Liq) (1936) 54 CLR 361
Young v Queensland Trustees Ltd (1956) 99 CLR 560
Case(s) also cited:
Coles Myer Ltd (t/as Coles Supermarket) v Coppin, Ryan & Sweeting (1993) 11 WAR 20
Dellys v Elderslie Finance Corp Ltd (2002) 82 WAIG 1193
Epath WA Pty Ltd v Adriansz (2003) 83 WAIG 3048
Mountain v Winston Gellard Pty Ltd t/as Winston Gellard Real Estate (1994) 74 WAIG 2323
Robertson v Civil Service Association of Western Australia Inc (2003) 83 WAIG 3938
Ross v Chevron Australia Pty Ltd (2003) 84 WAIG 345
United Construction Pty Ltd v Birighitti (2003) 83 WAIG 434
STEYTLER J (PRESIDING JUDGE): This is an appeal from a decision of the Full Bench of the Western Australian Industrial Relations Commission. The appeal is brought under s 90(1)(b) of the Industrial Relations Act1979 ("the Act") upon the ground that the Full Bench has erred in its construction of s 23, s 23A and s 29 of the Act.
The appeal arises out of the dismissal of the appellant from his employment with the second‑named respondent ("Ceil Comfort") on 30 July 2001.
On 7 August 2001 the appellant lodged with the Commission an application which was expressed to be "for an order pursuant to Section 29" of the Act. There were three respondents to that application, being the two named respondents to this appeal, Cool or Cosy Pty Ltd ("Cool or Cosy") and Ceil Comfort, and a third company, Citigroup Pty Ltd ("Citigroup"). The grounds on which the application was made were expressed as being:
"(a)harsh, oppressive or unfair dismissal, and/or
(b)outstanding benefits (non‑award entitlements)
as set out in attached particulars of claim."
The particulars of claim assert that the appellant had been employed by the respondents to the application as their "National General Manager", in which capacity he had overseen "all the daily operations of the business". The particulars also record that the appellant had been employed by the three companies since 14 August 1995 and that his salary was an amount of $160,000 per year. His dismissal was said to have been harsh, oppressive and unfair because he had been summarily dismissed, had not been afforded procedural fairness, had not been provided with reasonable notice and had not received a reasonable redundancy payment. The particulars also disclose, in that part of the application (item 24) which relates to contractual benefits "that were arranged between … [the appellant] and … [his] former employer under a contract of employment", that the appellant sought "a reasonable redundancy payment and reasonable notice payment".
By the time the appellant's application came on for hearing before a single Commissioner, Citigroup had gone into voluntary liquidation. Counsel for the appellant consequently advised the Commissioner that the appellant did not intend to pursue the claim against Citigroup "at that time". The application accordingly proceeded only against the other two respondents, Cool or Cosy and Ceil Comfort. It was dismissed by the Commissioner (whose reasons for decision have not been made available to us). The basis for the dismissal of the application was that the appellant had been employed by Citigroup and not by either of Cool or Cosy and Ceil Comfort and that his dismissal had not, in any event, been unfair. She also said (as the Full Bench put it) that she would "not reach any conclusion on the matter of notice in the absence of clear evidence, and given her conclusions in respect of … [the appellant's] employer not being one of the named respondents against whom he proceeded" (par 185 of the President's reasons).
The appellant appealed to the Full Bench against that decision. For some reason which is not readily apparent, Citigroup was named as a respondent to the appeal notwithstanding that no application had been pursued against it at first instance. However, the appellant made an application to discontinue the appeal as against Citigroup and, as the President put it in par 10 of his reasons, that application "was acceded to by the Full Bench, save and except that the Full Bench … decided to dismiss the appeal insofar as it lay against Citigroup".
As to the merits of the appeal, the Full Bench found, for a number of reasons, that the appellant had been harshly, oppressively or unfairly dismissed. The President, with whom the other two members of the Full Bench (Chief Commissioner Coleman and Commissioner Gregor) were in agreement, found that the appellant had been given no notice of his dismissal and that the dismissal was "unfair, peremptory and preceded by … flawed and callous behaviour …" (par 327).
Having made those findings, the President turned to the question of remedies. In the course of doing so, he considered what were the terms of the contract under which the appellant had been employed. He found, firstly, that there had been no express term in the contract of employment as regards the giving of notice (par 330). That being so, he said (par 331), there was an implied term that reasonable notice was required to be given. That, he found (par 336), amounted to a period of 12 months' notice. Next, the President found that the appellant's annual remuneration package amounted, in all, to $169,840. Then, in pars 338 to 341, he said:
"Accordingly the amount of reasonable notice of 12 months, which is the established loss, is quantifiable at $169,840.00 less $10,000.00 already paid [this had been an "ex gratia" payment made to him by the respondents], which amounts to $159,840.00. That is the remuneration as defined in s 23A of the Act (see Gilmore and Another v Cecil Bros and Others 76 WAIG 4434 (FB)).
As was said in Garbett v Midland Brick Co Pty Ltd (2003) 83 WAIG 893 at 903 (IAC), paragraph 85, per Heenan J, this amount is an amount of loss in respect of a lawful entitlement and also as compensation at the same time for a demonstrated loss.
It is required to be capped at an amount equal to six months remuneration and that amount is $79,920.00 therefore. That is the amount of established loss and the amount in which I would order compensation to be paid. I so find.
For those reasons, it is not necessary to determine any question of contractual benefit."
The President (with, as I have said, the concurrence of the other two members of the Full Bench), went on to find (par 345) that Ceil Comfort was the appellant's employer but that Cool or Cosy, "which was not so dormant as not to be part of the group", was also liable. However, because the application against Cool or Cosy had not been pressed, only Ceil Comfort was ordered to pay to the appellant what was described as "the sum of $79,920 [less tax] as and by way of compensation".
Notwithstanding that the application against Cool or Cosy was not pressed before the Full Bench, that company has, for some reason, been named as a respondent in the appeal to this Court. However, we were told that no relief is sought against it and, indeed, no relief could, in the circumstances, be sought against it.
The grounds of appeal to this Court assert, in summary, that the decision of the Full Bench to "cap" the award made in favour of the appellant at an amount of $79,920 was an error. That is said to be so essentially because the Full Bench overlooked the fact that the claim based upon the denial of a contractual benefit in the form of reasonable notice was brought pursuant to s 29(1)(b)(ii) of the Act, with the consequence that the provisions of s 23A, being the section which provides for a cap in the case of compensation for loss or injury caused by a harsh, oppressive or unfair dismissal, had no application.
In order to consider these grounds, it is necessary for me to say something about the applicable provisions of the Act.
By s 23(1) of the Act, the Commission is given jurisdiction to inquire into and deal with any industrial matter. A matter relating to the dismissal of an employee by an employer, or the refusal or failure of an employer to allow an employee a benefit under his contract of service, is an industrial matter. So much is apparent from the terms of s 29(1)(b) of the Act, relied upon by the applicant in bringing his application before the Commission. That section provides that an industrial matter may be referred to the Commission:
"(b)in the case of a claim by an employee -
(i)that he has been harshly, oppressively or unfairly dismissed from his employment; or
(ii)that he has not been allowed by his employer a benefit, not being a benefit under an award or order, to which he is entitled under his contract of employment,
by the employee."
While that section is not itself a source of jurisdiction, and merely confers standing to an employee to refer to the Commission an industrial matter of the kind referred to (see HotCopper Australia Ltd v Saab (2002) 117 IR 256 at [18] and BGC (Australia) Pty Ltd v Phippard (2002) 115 IR 430 at [26]), it plainly evinces a legislative intention that claims of the kind referred to are to be taken to be included within the notion of an "industrial matter" for the purposes of the Act. (cf Robe River Iron Associates v Association of Draughting, Supervisory and Technical Employees of Western Australia (1987) 68 WAIG 11 at 14, per Kennedy J). Also, s 7(1a) of the Act provides that:
"A matter relating to -
(a)the dismissal of an employee by an employer; or
(b)the refusal or failure of an employer to allow an employee a benefit under his contract of service,
is and remains an industrial matter for the purposes of this Act even though their relationship as employee and employer has ended."
Section 23A of the Act, as it stood at the material time (it has since been amended), reads as follows:
"23A. Powers of Commission on claims of unfair dismissal
(1)On a claim of harsh, oppressive or unfair dismissal, the Commission may -
(a)order the payment to the claimant of any amount to which the claimant is entitled;
(b)order the employer to reinstate or re‑employ a claimant who has been harshly, oppressively or unfairly dismissed;
(ba)subject to subsections (1a) and (4), order the employer to pay compensation to the claimant for loss or injury caused by the dismissal; and
(c)make any ancillary or incidental order that the Commission thinks necessary for giving effect to any order made under this subsection.
(la)The Commission is not to make an order under subsection (1)(ba) unless-
(a)it is satisfied that reinstatement or re-employment of the claimant is impracticable; or
(b)the employer has agreed to pay the compensation instead of reinstating or re-employing the claimant.
(2)An order under subsection (1) may require that it be complied with within a specified time.
(3)If an employer fails to comply with an order under subsection (1)(b) the Commission may, upon further application, revoke that order and, subject to subsection (4), make an order for the payment of compensation for loss or injury caused by the dismissal.
(4)The amount ordered to be paid under subsection (1)(ba) or (3) is not to exceed 6 months' remuneration of the claimant, and for the purposes of this subsection the Commission may calculate the amount on the basis of an average rate received during any relevant period of employment.
(5)For avoidance of doubt, an order under subsection (1)(ba) may permit the employer concerned to pay the compensation required in instalments specified in the order."
It is readily apparent, from the opening words of s 23A(1), that that section applies only in the case of a claim of harsh, oppressive or unfair dismissal. The section consequently does not apply to a claim by an employee that he has not been allowed, by his employer, a contractual benefit.
While the Commission is empowered by s 23A(1)(a) to order the payment to a claimant, in a case of harsh, oppressive or unfair dismissal, of any amount to which the claimant is entitled (and it is apparent, from the existence of subs (ba), that the reference in subs (a) to the "amount to which the claimant is entitled" does not encompass compensation for loss or injury caused by the dismissal), the power given by s 23A(1)(a) appears to be narrower than that given by s 23 to inquire into and deal with an industrial matter arising in the case of a claim, referred by an employee under s 29(b)(ii), that he has not been allowed by his employer a benefit to which he is entitled under his contract of service.
It is, I think, self‑evident that there may be contractual benefits which cannot be described as an "amount to which the claimant is entitled" (my italics), that phrase having been suggested by Anderson J (with whom Parker and Hasluck JJ were in agreement), in HotCopper Australia Ltd v Saab, above, at [25] to be "restricted to sums accrued due under an express or implied term of the contract" and not to "extend to monetary awards in the nature of damages for breach of that term". The word "benefit" is defined by the Macquarie Dictionary (The Macquarie Library, 3rd ed) as meaning, inter alia, "anything that is for the good of a person or thing" and by the Shorter Oxford English Dictionary as meaning, in its ordinary sense, "Advantage, profit, good". Moreover, the wide meaning of the word has frequently been recognised by the Full Bench of the Western Australian Industrial Commission: see Welsh v Hills (1982) 62 WAIG 2708 at 2710; Waroona Contracting v Usher (1984) 64 WAIG 1500 at 1502 (where a contractual obligation to employ an employee for a minimum term was regarded as a "benefit"); Perth Finishing College Pty Ltd v Watts (1989) 69 WAIG 2307 at 2313 (where the Full Bench adopted the definition offered by a single Commissioner, Johnson C, in Balfour v Travelstrength Ltd (1980) 60 WAIG 1015, which encompassed "an advantage, entitlement, right, superiority, favour, good or perquisite"); and Slee and Stockden Pty Ltd v Blewitt (1992) 47 IR 104 at 114 (a case involving a contractual obligation to give reasonable notice of termination of employment).
If, as I consider to be the position, s 23A had no application to the claim referred by the appellant under s 29(1)(b)(ii), the Full Bench was required to consider what should be done in respect of that claim. While the appellant's claim in that respect was not particularly elegantly dealt with in the particulars of claim filed with the Commission, it is plain enough, from those particulars, that a claim for denial of a contractual benefit in the form of reasonable notice was brought as, indeed, the Commissioner at first instance and the Full Bench recognised. In any event, by s 26(2) of the Act, the Commission was not restricted to the specific claim made, or to the subject matter of the claim, in granting relief or redress under the Act.
The Full Bench having found that it was an implied term of the appellant's contract of employment that he should be given reasonable notice, that a reasonable period of notice was one of 12 months and that the appellant had been denied that benefit (and, in my opinion, it plainly was a "benefit" for the purpose of s 29(b)(ii), having been for the advantage or good of the appellant: cf Slee and Stockden Pty Ltd v Blewitt, above, and Wardell v Donnybrook Stone Company (1992) 72 WAIG 2250), the only remaining question was that of whether it was empowered to award to the appellant compensation in lieu of that benefit, it obviously having been impracticable to require the employer to let the appellant work out that period of notice.
The question whether the Commission is empowered to award monetary compensation in lieu of a denied contractual benefit has been the subject of a good deal of discussion and, after inviting supplementary written submissions, we were referred to a number of the cases which have touched upon this issue.
Some of the cases to which we were referred by counsel for the respondent were cited in support of the proposition that damages in lieu of a denied contractual entitlement could not be a "benefit ... to which ... [an employee] is entitled under his contract of employment" for the purposes of s 29(1)(b)(ii) as the "benefit" there referred to is the contractual entitlement itself and damages "is a common law remedy which is not based on any doctrine relating to implied contractual terms or their enforcement": HotCopper, above, per Anderson J at [22]. However, the "benefit" which was denied in this case is, as I have said, the entitlement to reasonable notice itself and the question is not whether damages in lieu can be regarded as a benefit for the purposes of s 29(1)(b)(ii), but whether the Commission can, in the exercise of its power under s 23(1) to inquire into and "deal with" a matter referred to it under s 29(1)(b)(ii), award compensation in lieu of the denied contractual benefit.
That distinction has not been fully recognised in the cases which touch upon this issue. So, for example, some of the observations made in Perth Finishing College v Watts, above, appear to support the proposition that damages, "whether liquidated or not", can, in some cases at least, be regarded as "benefits" for the purposes of s 29(1)(b)(ii) (see page 2316 of the report), while other observations in that case suggest that a claim under s 29(1)(b)(ii) cannot lie for "compensation as such" (see page 2313). In Wardell, above, "moneys otherwise payable during a defined period of notice though not recoverable as wages" were said, applying Perth Finishing College, nonetheless to be a "benefit" for the purpose of s 29(1)(b)(ii): see page 2251. Also, in Slee and Stockden the Full Bench, in dealing with a failure to give reasonable notice, applied Perth Finishing College in the following way, saying, at 115‑116:
"In that case, it was held that the claim for monies, which would have been due and payable had a fixed term contract of employment not been terminated by the employer, was a claim for a benefit under a contract and was a claim within s 23 and s 29(b)(ii) of the Act. It was not a claim for compensation, because it was a claim for a benefit to which the applicant was entitled under the contract of service and there was jurisdiction conferred by s 23 and s29(b)(ii) of the Act.
Indeed, the Full Bench in Perth Finishing College v Watts observed that the words 'Subject to this Act', with which s 23 commences, means that the extent of the authority of Commission [sic] is governed by the whole of the Act.
It is quite clear that a benefit … to which Mr Blewitt was entitled under the contract was, in this case, reasonable notice. That reasonable notice carried with it the right to earn and receive the wage due and payable under the contract of service. If that notice is not given, then the benefit which derives and which is recoverable is an amount due and payable under the contract of service by way of wages due, had reasonable notice been given. This was and is clearly a 'benefit'. In particular, in not receiving reasonable notice Mr Blewitt was deprived of an entitlement.
Indeed, this is supported by the view that the making of an order for specific performance in a matter such as this may well be a remedy open to a court (see per Wilcox and Ryan JJ in Gregory v Philip Morris Ltd (1988) 24 IR 397 at 423; 80 ALR 455 at 481 and see also Turner v A/asian Coal and Shale Employees Federation (1984) 9 IR 87 at 94 and 96; 55 ALR 635 at 645 and 647 (FC of the Federal Court)).
The view that this claim is within jurisdiction and power is because it is a benefit which is the subject of an enforceable legal right (see Perth Finishing College v Watts at 2315 and the cases cited therein). It therefore follows that this was a benefit, whether it was measurable in liquidated or unliquidated damages, or whether it might be enforced by specific performance. It was a benefit because Mr Blewitt established that he had been deprived of an advantage, an entitlement, a right, a superiority, a favour, a good or a perquisite in contravention of a condition of his contract of service. Because this was a claim for an entitlement under s 29(b)(ii) of the Act, it could not be said to be compensation."
In my respectful opinion, the better analysis in each of those cases should have been that the contractual benefit which was denied by the employer was that which was provided for by the contract of employment itself (respectively the full term of employment provided for by the contract, the right to a defined period of notice and the right to reasonable notice) and that the award of compensation was the means by which the Commission dealt with the industrial matter referred to it under s 29(1)(b)(ii), utilising the broad power given it under s 23(1) of the Act read, if necessary, with s 26(2) thereof.
There has, in the cases (see, for example, Perth Finishing College at 2313 and 2316 and Poliniak v Kaiser Engineers Australia Pty Ltd (1991) 71 WAIG 2624 at 2625‑6), been some discussion of the observations of Kennedy J in Robe River Iron Associates, above, at 17, where his Honour said:
"If it be accepted, as I consider it should, that the Commission has jurisdiction to order an employer to re‑employ a recently dismissed employee, does it follow, as the respondent contends, that, if it declines to exercise that jurisdiction, it has the jurisdiction to make an order that the employer compensate the employee, and, in particular, that the employer compensate the employee beyond any amount which the employee could reasonably have recovered at common law. This is not a conclusion which sits easily with s 29(b) of the Act, for it would mean that, under paragraph (i) the Commission's jurisdiction to order compensation is at large, whereas, under paragraph (ii), it is strictly limited to allowing an entitlement arising out of the employee's contract of service. The preferable view appears to me to be that the jurisdiction under paragraph (i) is limited to ordering re‑employment whilst the remedy under paragraph (ii) is restricted to the employee's contractual rights."
I should say, as regards those observations, that it seems to me that Kennedy J was there considering only the question whether the Commission had the jurisdiction (under the legislation as it then stood), if it declined to order an employer to re‑employ a recently dismissed employee, to make an order compensating the employee, in particular, in an amount beyond that which the employee could have recovered at common law (and it should be remembered that a harsh, oppressive or unfair dismissal is not necessarily a wrongful dismissal for the purposes of the common law) and that it was in that context only that his Honour said that the remedy under s 29(b)(ii) was, by way of comparison, restricted to the employee's contractual rights. As I read his Honour's comments, he did not intend to address the question whether, if the benefit in the form of the employee's contractual rights was denied, the Commission was empowered, in dealing with the matter, to award compensation in lieu thereof. In any event, Kennedy J's comments were made prior to the introduction of s 7(1a) of the Act (that section was introduced on 9 May 1995) and that section seems to me to evince a legislative intention that compensation may be awarded in lieu of a denied contractual benefit. Were the position otherwise, the extended definition of "industrial matter" provided for by s 7(1a)(b) would have application only in cases in which the "benefit" was one which was still capable of being provided in the form contracted for, even though the employment relationship had ended. I very much doubt that could have been the legislature's intention.
The approach which I have favoured is that which was favoured, also, by Anderson J in HotCopper, above, at [24], where, without intending to express a concluded view, his Honour said (with the concurrence of the other two members of the Court) in the context of a claim referred under s 29(1)(b)(ii) that he was inclined to think that the Commission was empowered to make "a monetary order for compensation - that is, a damages award - in an appropriate case, as long as its purpose is to do no more than is necessary to 'redress the matter by resolving the conflict in relation to the industrial matter' - Welsh v Hills (1982) 62 WAIG 2708 - and as long as its effect is so limited".
It consequently seems to me that the Full Bench was in error in its conclusion that it was unnecessary to determine the "question of contractual benefit". That conclusion, as will be apparent from the extract from the judgment of the President which I have quoted above, appears to have been supported by reference to what was said by Heenan J in Garbett v Midland Brick Co Pty Ltd (2003) 83 WAIG 893 at 903, [85]. His Honour had there said no more than that a harsh, oppressive or unfair dismissal might not constitute a wrongful dismissal at law and that, conversely, a wrongful dismissal at law would not necessarily constitute a harsh, oppressive or unfair dismissal for the purposes of the Act and that, even if a wrongful dismissal at law should be so characterised, it did not follow that the dismissed employee was thereby automatically entitled to relief under s 23A. He went on to say, in this last respect:
"Leaving aside cases where an order for reinstatement might be made, which are likely to be rare where there has been dismissal for genuine redundancy, issues of the claimant's entitlement to the payment of any moneys due under his contract of employment, or to compensation for the loss or injury caused by the dismissal are discretionary under s 23A of the Act. There can be little doubt that the discretion should be exercised in favour of the claimant where actual loss or damage can be proved, but where no loss or damage is proved, or where any entitlement to damages or compensation is adequately covered by payments made by the employer to the employee at the time of termination, whether as wages in lieu of notice and/or for other accrued benefits, will always be a matter for investigation. If no loss or damage, nor entitlement to compensation for the former employee is established beyond payments which have been made by the employer then there would be no entitlement to redress because the powers conferred under s 23A are intended to compensate the employee who has been harshly, oppressively or unfairly dismissed in respect of losses so caused and no more. They are not a means for punishing the employer
or for conferring any windfall gain upon the claimant. This does not mean that the compensation which the Commission may order under s 23A(1)(ba) of the Industrial Relations Act is restricted to the damages which might be recovered at law for wrongful dismissal, but it does mean that payments ordered under s 23A must be in respect of a lawful entitlement and/or as compensation for a demonstrated loss or injury caused by the harsh, oppressive or unfair dismissal."
His Honour did not there address, at all, a claim brought by means of s 29(b)(ii) of the Act in respect of the failure, by an employer, to allow to the employee a benefit to which he is entitled under his contract of service. However, just as it would, as his Honour pointed out, be necessary for the Commission, in considering what, if any, payment should be made to a harshly, oppressively or unfairly dismissed employee under s 23A(1)(ba) of the Act, to take into account any payment ordered to be made to the employee under s 23A(1)(a), so, too, it would be necessary for the Commission to take into account (insofar as it might be relevant) any payment ordered to be made by the employer to the employee by way of compensation for the loss of a contractual benefit the subject of the claim referred under s 29(1)(b)(ii) of the Act.
Consequently, in my respectful opinion, what should have been done in this case is that the Full Bench should first have dealt with the claim in respect of the denial of a contractual benefit, in the form of reasonable notice, and then, having done so, gone on to consider what, if any, compensation should be ordered under s 23A(1)(ba). Because it failed to deal with the former claim, the appeal should be allowed, and the orders made by the Full Bench set aside.
I would hear further from the parties as to the form of the consequential orders which should now be made.
PULLIN J: This is an appeal from an order of the Full Bench of the Western Australian Industrial Relations Commission, dated 13 January 2004. The appeal to the Full Bench was from a decision of Commissioner P E Scott, who dismissed the appellant's claims for compensation for unfair dismissal and for denied contractual benefits. The Full Bench allowed the appeal and ordered that the respondent pay the appellant a sum of $79,920 by way of compensation.
The Full Bench, in its reasons for decision, found that the appellant had been unfairly dismissed, because he had not been given reasonable
notice before dismissal; that 12 months' notice was reasonable notice; and that at the time of dismissal he was earning $160,000 per annum by way of salary, with a car allowance of $9,840. None of those findings are challenged.
The President, who delivered the reasons of the Full Bench, said:
"338Accordingly the amount of reasonable notice of 12 months, which is the established loss, is quantifiable at $169,840.00 less $10,000.00 already paid, which amounts to $159,840.00. That is the remuneration as defined in s23A of the Act (see Gilmore and Another v Cecil Bros and Others 76 WAIG 4434 (FB)).
339As was said in Garbett v Midland Brick Co Pty Ltd (2003) 83 WAIG 893 at 903 (IAC), paragraph 85, per Heenan J, this amount is an amount of loss in respect of a lawful entitlement and also as compensation at the same time for a demonstrated loss.
340It is required to be capped at an amount equal to six months remuneration and that amount is $79,920.00 therefore. That is the amount of established loss and the amount in which I would order compensation to be paid. I so find.
341For those reasons, it is not necessary to determine any question of contractual benefit."
In par 340 of the quoted part of the reasons, the reference to what is "required", is a reference to s 23A(4) of the Industrial Relations Act 1979 (before it was amended by Act 20/2002), which refers to the order for compensation which may be made in a case of harsh, oppressive, or unfair dismissal, and which reads that:
"The amount ordered to be paid under subsection (1)(ba) or (3) is not to exceed 6 months' remuneration of the claimant ..."
(A provision to the same effect (since the 2002 amendments) is now found in s 23A(8)).
The appellant submits that the Full Bench erred, because the appellant's original claim to the Commission was a claim, not only for unfair dismissal under s 29(1)(b)(i), but also a claim under s 29(1)(b)(ii) for a benefit to which he was entitled under his contract of service; that there was no restriction on the award of compensation or damages in relation to the latter claim; and that, as a result, the Full Bench erred in not making an order requiring the respondent to pay $159,840.00. There was nothing in the conduct of the proceedings which resulted in any abandonment of the claim under s 29(1)(b)(ii). That there were two claims, one for unfair dismissal and the other for contractual benefits, is clear from [29] of the Full Bench's reasons for decision. It is not therefore correct to say, as the respondent's counsel submits in his written submissions, that "… there would have been no claim by the appellant under sub‑section 29(1)(b), but for [the appellant's] unfair dismissal". To deal with the appellant's submission that the Full Bench erred, it is necessary to refer in detail to the relevant statutory provisions.
Section 7 defines an "industrial matter" to mean relevantly:
"any matter affecting or relating to the work, privileges, rights, or duties of employers or employees in any industry or of any employer or employee therein and, without limiting the generality of that meaning, includes any matter relating to …
(b)… terms, and conditions of employment …"
Section 7(1a) provides that:
"a matter relating to -
(a)…
(b)the refusal or failure of an employer to allow an employee a benefit under his contract of service,
is and remains an industrial matter for the purposes of this Act even though their relationship as employee and employer has ended."
Section 23(1) provides that:
"… the Commission has cognizance of and authority to enquire into and deal with any industrial matter."
Section 23A provides that:
"(1)On a claim of harsh, oppressive or unfair dismissal, the Commission may -
(a)order the payment to the claimant of any amount to which the claimant is entitled;
(b)order the employer to reinstate or re‑employ a claimant who has been harshly, oppressively or unfairly dismissed;
(ba)subject to subsections (1a) and (4), order the employer to pay compensation to the claimant for loss or injury caused by the dismissal; and
(c)make any ancillary or incidental order that the Commission thinks necessary for giving effect to any order made under this subsection.
(1a)The Commission is not to make an order under subsection (1)(ba) unless -
(a)it is satisfied that reinstatement or re‑employment of the claimant is impracticable; or
(b)the employer has agreed to pay the compensation instead of reinstating or re‑employing the claimant. …
(4)The amount ordered to be paid under subsection (1)(ba) … is not to exceed 6 months' remuneration of the claimant, and for the purposes of this subsection the Commission may calculate the amount on the basis of an average rate received during any relevant period of employment. …"
Section 29(1)(b) reads:
"(1) An industrial matter may be referred to the Commission
…
(b)in the case of a claim by an employee -
(i)that he has been harshly, oppressively or unfairly dismissed from his employment; or
(ii)that he has not been allowed by his employer a benefit, not being a benefit under an award or order, to which he is entitled under his contract of service,
by the employee."
Section 29 does not confer jurisdiction or additional powers on the Commission. It gives the employee standing to refer a claim to the Commission in certain circumstances: see BGC (Australia) Pty Ltd v Phippard [2002] WASCA 191 at [26].
In the case of an industrial matter consisting of a claim under s 29(1)(b), the Commission may, by reason of s 23(1), "enquire into and deal with" those matters. In the case of claims under s 29(1)(b)(i) (unfair dismissal claims), the Act spells out in s 23A what orders the Commission may make, and imposes the restriction, referred to above, about the amount of compensation which may be ordered. However, in the case of a claim under s 29(1)(b)(ii) (claims of denied contractual benefits), there is nothing in the Act, other than s 23(1), which says what the Commission may do. The only direction given to the Commission is to "deal with" such claim.
By implication, the Commission must be able to "deal with" a claim that there "has not been allowed" a "benefit" under a contract of employment, at least by ordering payment of that entitlement if the entitlement is a sum of money. What, though, is the position if the benefit is not a money sum? Does the Commission have power to award damages? I will deal with these questions below.
Did the Full Bench err in law?
It will be noted from the definition of "industrial matter" set out above, that it contains within it the word "matter". In Fencott v Muller (1983) 152 CLR 570 at 603, Mason, Murphy, Brennan and Deane JJ said, when speaking about the conferral of jurisdiction on the Federal Court under the Trade Practices Act conformably with s 77(I) of the Constitution:
"Though the concept of 'matter' may be narrower than that of a 'legal proceeding', it is a term of wide import. 'The word "matters"', Griffiths CJ said in South Australia v Victoria, 'was in 1900 in common use as the widest term to denote controversies which might come before a Court of Justice'. The concept of 'matter' as a justiciable controversy, identifiable independently of the proceedings which are brought for its determination and encompassing all claims made within the scope of the controversy, was accepted by the majority of the Court in Philip Morris."
In my opinion, those comments apply to the word "matter" as used in the definition of "industrial matter".
The controversies were, first, that he had been unfairly dismissed (which claim was dealt with under express provisions applying to unfair dismissal) and, secondly, that he was not allowed by his employer, a benefit to which he was entitled under his contract of service.
"Benefit"
The appellant argues that the "benefit" he was not allowed was the contractual right to receive written notice. The word "benefit" is a word of wide meaning: see Balfour v Travelstrength Ltd (1980) 60 WAIG 1015. A benefit is in ordinary meaning "anything that is for the good of a person or thing"; "Macquarie Dictionary". A contractual promise by an employer to give an employee 12 months' notice before employment is terminated, confers a right on the employee to be given such notice. Such a contractual right is a benefit with real and measurable value. If a contract containing a term requiring notice to be given, is terminated by an employer without cause and without notice, and therefore in breach of such a term, then the employee is entitled to an award of damages: see Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 at 465.
In the language of s 29(1)(b)(ii), an employee dismissed without notice in breach of contract, may refer to the Commission a claim "that he [had] not been allowed by his employer a benefit … to which he [was] entitled under his contract of service". Once the claim has been referred, the authority or jurisdiction of the Commission to grant remedies, is to be found in s 23. The section is extraordinary in its brevity. As I have already said, it simply confers jurisdiction on the Commission to enquire into and "deal with" the claim. In my opinion, this provision confers jurisdiction on the Commission to order damages for the non‑allowance of a benefit if the non‑allowance amounts to a breach of contract. The principal objects of the Act are set out in s 6, and they include a statement that the objects of the Act are to provide a means for conciliation with a view to amicable agreement, thereby preventing and settling industrial disputes, and to provide means for "settling industrial disputes not resolved by amicable agreement". If there were no power to award damages, then the Commission would not be able to settle this type of dispute.
The view has been expressed in other cases in the Commission, that damages cannot be awarded in these circumstances, and that in relation to claims under s 29(1)(b)(ii), only orders requiring performance of the contract in specie can be made: see Perth Finishing College Pty Ltd v Watts (1989) 69 WAIG 2307 at 2313 and Welsh v Hills (1982) 62 WAIG 2708 at 2709. In the latter case, the point was put briefly by Senior Commissioner Cort in a dissenting set of reasons for decision, where he said:
"… in my view that [s 23] would not permit the Commission to grant relief or redress outside that which he may refer to the Commission pursuant to section 29. … I am persuaded that the Commission may allow a benefit to which an employee is entitled under his contract of service. But nothing else. It would not be proper, for example, to allow moneys which may otherwise be claimed by a person if other action were taken. … It would seem to me that the finding by the Commission that Welsh was entitled to damages was purely gratuitous and with due respect has confused what may be allowed by the Commission under the Act and that to which a person may be entitled at law."
Counsel for the respondent also referred to obiter dictum of Hasluck J at [28] in BGC (Australia) Pty Ltd v Phippard (supra) and what was said by Kennedy J at [17] in City of Geraldton v Cooling [2000] WASCA 346 as being to similar effect. In my view, Phippard's case and Cooling's case are not relevant to the issue here. Those two cases were concerned with what orders could be made under s 23A(1)(a) or (ba) in relation to an unfair dismissal claim. Those two authorities did not bear at all on the question about whether the Commission had jurisdiction to "deal with" a claim for a disallowed contractual benefit to notice before dismissal, by awarding damages for breach of the contractual promise to give notice.
With respect, I do not agree with the view expressed by Senior Commissioner Cort in the passage quoted above. Parliament has conferred jurisdiction on the Commission to deal with a claim for denied contractual benefits. If the Commission could only deal with the claim by ordering that the contract be performed in specie, then it could only order that the employer give notice. In circumstances when the contract of employment had already been terminated, that would be a meaningless order. Parliament, by s 7(1a), has made it clear that the Commission still has authority to deal with this type of claim after employment was terminated. In those circumstances, the only way that the Commission could deal with a claim of this nature, and to thereby settle the industrial dispute, would be to order damages in lieu of notice.
I therefore agree with the obiter of Anderson J in HotCopper Australia Ltd v Saab [2002] WASCA 190. In that case, his Honour referred to the decision of Gregor C at first instance. Gregor C noted that an award of monetary compensation in lieu of a denied contractual benefit, is not the benefit, allowance, or entitlement set out, or implied, in the contract. Gregor C described the compensation as a "substituted form of specific performance". Anderson J disagreed with that conclusion, and I agree with Anderson J's reasons on that point. Anderson J then went on to say at [24]:
"This does not necessarily mean that the Commission may not entertain a reference under s 29(1)(b)(ii) unless it is in its form and in its terms a claim by an employee to recover in specie the precise benefit expressed or implied in the employment contract. In the context of the exercise of jurisdiction to resolve an industrial dispute of the kind described in s 29(1)(b)(ii), nothing much would seem to turn on the distinction between the two remedies (damages and specific performance) in the general run of cases. It seems to me that if there is a dispute which is an industrial matter, and the subject matter of it is a claim (in the sense of a complaint) of the kind defined in s 29(1)(b)(ii), it is a dispute that may be dealt with by the Commission on a reference by the employee. How it is dealt with will be for the Commission to decide within the powers and discretions conferred on it by those sections of the Act which regulate the manner in which the Commission may exercise its jurisdiction in any particular case. Without intending to express a concluded view, I am inclined to think that this would include making a monetary order for compensation - that is, a damages award - in an appropriate case, as long as its purpose is to do no more than is necessary to 'redress the matter by resolving the conflict in relation to the industrial matter' - Welsh v Hills (1982) 62 WAIG 2708 - and as long as its effect is so limited."
I agree with his Honour's tentative view, for the reasons set out above. Although I am repeating myself, it is my opinion that in a case where the employer dismisses an employee without cause, and in breach of a contractual promise to give notice, then the employee may refer a claim to the Commission that he has been denied a contractual benefit, and the Commission may "deal with" the claim by awarding damages. My decision on this point means that an employee who has a contractual right to more than six months' notice, and who is dismissed without cause, will be able to bring a claim for damages for a disallowed contractual benefit, and thereby avoid the restriction on the amount of compensation (imposed by s 23A(4) (now s 23A(8)) which may be ordered on a claim for unfair dismissal. Counsel for the respondent submits that the appellant's claim for unfair dismissal "underpinned" the respondent's claim under s 29(1)(b). I do not agree with that submission. There were separate claims, and one did not "underpin" the other. The consequence of the decision I have reached is a result of the way the Act has been drafted. The restriction on the award of compensation imposed by Parliament in s 23A(4) was imposed only "on a claim" of harsh, oppressive, or unfair dismissal. If the section had imposed the restriction not in relation to "claims" but in relation to cases in relation to which there had been harsh, oppressive, or unfair dismissal, then the restriction would have applied no matter how the claim was formulated. It is a well‑known canon of statutory construction, that if common‑law rights are to be taken away by Parliament, then Parliament must do so using clear language. The right to damages for a breach of contract is a common‑law right, and the restriction on the right to compensation which has been imposed by s 23A(4), has been imposed by Parliament only in relation to an employee who formulates his or her claim as a claim that he or she has been harshly, oppressively, or unfairly dismissed.
Finally, I should mention that in [339] of the President's reasons for decision, reference was made to what Heenan J said at [85] in Garbett v Midland Brick Co Pty Ltd (2003) 83 WAIG 893 at 903. That case dealt only with the claim of harsh, oppressive, or unfair dismissal. It was not a case involving a claim for denied contractual benefits. Heenan J made it clear at [84] that the case was not an enquiry about "what damages or other relief the appellant could obtain for breach of an implied condition in the contract of employment". As a result, Garbett's case provides no support for the President's conclusion that the appellant's claims must be "capped at an amount equal to six months remuneration".
The Full Bench implicitly assumed that it had no jurisdiction to award damages in relation to the claim under s 29(1)(b)(ii), and it thereby erred in law in its interpretation of the Act. The appeal should be allowed.
EM HEENAN J: I have read in draft the reasons for decision to be given by Steytler J and by Pullin J. I agree with their Honours' conclusions that this appeal should be allowed.
I gratefully adopt the description of the events leading to this appeal and the summary of the submissions which have been made on the hearing of the appeal contained in the judgments of Steytler J and Pullin J. I only desire to add some observations of my own about the power of the Commission to deal with an application by a former employee referred to the Commission under s 29(1)(b)(ii) of the Industrial Relations Act 1979 ("the Act") that he has not been allowed by his employer a benefit, to which he is entitled under the contract of employment, not being a benefit under an award or order.
I agree that there are differences in the powers which the Commission possesses when dealing with an employee's claim alleging harsh, oppressive or unfair dismissal under s 29(1)(b)(i) and s 23A of the Act on the one hand, and when dealing with a claim by an employee that he has not been allowed by his employer a benefit, not being a benefit under an award or order, to which he is entitled under his contract of employment, pursuant to s 29(1)(b)(ii) and s 23 of the Act on the other hand. Only in the former case is the compensation which may be awarded to the employee for loss or injury caused by the dismissal limited to not more than six months' remuneration of the employee (s 23A(4) of the Act as it stood in August 2001, the date material to this application, and s 23A(8) of the Act as since amended by Act No 20 of 2002). It is important to note that, when dealing with monetary relief in a case of harsh, oppressive or unfair dismissal under s 23A, the relief which the Commission could grant, at the time of these proceedings before the recent amendment to s 23A, was of one or more of the following kinds:
(a)an ability to order payment of any amount to which the employee is entitled (former s 23A(1)(a));
(b)subject to subsections 1(a) and (4) an ability to order the employer to pay compensation to the employee for loss or injury caused by this dismissal;
(c)in other circumstances, where an employer fails to comply with an order made under the former subs 23A(1)(b), an
ability to make an order for the payment of compensation for loss or injury caused by the dismissal.
These provisions distinguish between the payment "of any amount to which the claimant is entitled" and the payment of "compensation -- for loss or injury caused by the dismissal". This same distinction continues in s 23A, as amended, when read in conjunction with s 29(1)(b)(ii) except that now, the Commission in a case of harsh, oppressive or unfair dismissal, has the power to order the employer to pay to the employee "the remuneration lost, or likely to have been lost by the employee because of the [unfair] dismissal" - s 23A(5), as well as having the power to order the employer to pay an amount of compensation for loss or injury caused by [unfair] dismissal under subs 23A(6) which is capped at six months' remuneration by subs 23A(8).
The significance of this distinction, to my mind, is explained by the fact that "any amount to which the claimant is entitled" or payment of "a benefit, not being a benefit under an award or order, to which he is entitled under his contract of employment" (s 29(1)(b)(ii)) are each entitlements which the employee has arising out of his contract of employment with the employer. They are contractual and, therefore, common law claims which exist independently of the provisions of the Act and which could, if necessary, be pursued in any court of appropriate general civil jurisdiction. By contrast, the remedies available for a proved case of harsh, oppressive or unfair dismissal, as set out in s 23A of the Act, include the special statutory remedies which the Act provides for the Commission alone to grant, including orders for re‑instatement, re‑employment in another position or the payment of compensation for loss or injury caused by the dismissal which do not exist under the contract of employment or, otherwise, under the general law.
This unique feature, being the statutory origin of these remedies which the Commission may grant in cases of unfair dismissal, renders it both significant and appropriate that the power to award monetary payment to the employee for loss or injury caused by the [unfair dismissal] is referred to as "compensation" and not as damages or by any other term. This signifies the particular character and unique quality of that component of the remedies and, at the same time, distinguishes that remedy from the species of relief which may be available under the contract of employment.
In this regard it must be noted that under the Act, as since amended, s 23A(5)(b) empowers the Commission to make an order for the employer to pay to the employee the "remuneration lost or likely to have been lost by the employee because of the dismissal". This introduces yet another concept which may be disposed of briefly because the present appeal arises from proceedings brought under the Act which relied on s 23A as it stood before the 2002 amendment. Remuneration lost, as a result of a dismissal, may mean wages that have been earned, in the sense that the labour or service agreed to be undertaken in return for those wages has been performed by the employee, in which case there will be a contractual entitlement for payment for those unpaid wages enforceable as a debt and, therefore, pursuant to the contract - Young v Queensland Trustees Ltd (1956) 99 CLR 560 at 567. Alternatively, "remuneration lost" and without doubt "remuneration likely to have been lost" can mean remuneration which would have been payable under the contract of employment had the agreed work or services been performed but which now cannot be earned because of the employer's termination of the relationship of employer and employee. In these two latter cases that would be unearned wages and these would not be recoverable by the employee under the contract but, instead, the employee may have an action for damages for breach of contract at law in the case of a wrongful dismissal but not otherwise. The reason for this is that an employee is always entitled to recover from his employer, by action, wages which have been earned by the performance of the agreed work and which have therefore accrued up to the date of his dismissal, even if the dismissal is lawful - McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457 and Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 at 461. In circumstances where the employment is for a remuneration which is only payable in the event of completion of a designated project, or after a time which had not arrived at the point of dismissal, the employee may be entitled to sue on a quantum meruit for the value of the work actually performed to the date of a wrongful dismissal - Westralian Farmers Ltd v Commonwealth Agricultural Service Engineers Ltd(In Liq) (1936) 54 CLR 361.
There is nothing in s 23, s 23A or s 29(1)(b) of the Act which diminishes the rights of an employee against his or her employer which arise from the terms of the contract between them relating to the payment of moneys earned for the performance of the work or for other ancillary benefits arising under the contract or from the relationship of employer and employee. The existence of the statutory claim for relief in the case of harsh, oppressive or unfair dismissal conferred by s 23, s 23A and recognised by s 29 of the Act provides additional remedies to an employee beyond those arising from the contract or from the employment relationship at law. The inter‑relationship or overlap of the common law and statutory remedies, which sometimes arises, needs to be taken into account in particular cases to avoid double compensation occurring whether in whole or in part. This is another reason for recognizing that s 23A(4) of the Act as it was (now s 23A(8)) caps the maximum "compensation" payable for the statutory remedy to six months' remuneration but, in doing so, does not entrench upon any greater entitlement which the employee might have under the contract.
However, even in a case where it is appropriate for the Commission to grant relief for harsh, oppressive or unfair dismissal the employee may be entitled to more than the "compensation" which, under its statutory powers, the Commission may award - (s 23A(1)(ba) of the Act as it stood or s 23A(6) of the present Act). For example, the dismissed employee may be entitled to recover unpaid wages for work actually performed during the period before the dismissal, or he may be entitled to accrued holiday or long service pay, to superannuation contributions to be paid to a fund on his behalf or to other emoluments, such as bonuses and the like, which had been earned under the terms of the contract but not paid at the date of dismissal. Accordingly, it is only right that the Commission should have, and in my view does have, the power to enforce the payment of such entitlements in addition to the payment of compensation (if any is due) when dealing with a claim for harsh, oppressive or unfair dismissal. That power was expressly conferred under subs 23A(1)(a) of the Act as it stood at the date material to these proceedings and, as the Act now stands as a result of the combined effects of s 23(1) and s 29(1)(b)(ii). This is, of course, the conclusion reached also by each of Steytler J and Pullin J in their separate reasons.
This present appeal centres upon a claim for wages, or an amount equivalent to wages, in lieu of notice. The Full Bench of the Commission found that the appellant's contract of employment with the respondent was for an indefinite period, terminable by reasonable notice and that, in the particular circumstances of this case, the period of notice which was required to be given was 12 months. The Full Bench also found that there had been summary dismissal which was, in the circumstances, harsh, oppressive or unfair and that relief under s 23A should therefore be granted by awarding monetary compensation under s 23A(1)(ba) as it then stood. The Full Bench calculated the salary which would have been payable to the appellant over the 12 month period, had notice been given and the employment continued during the notice period and, in addition, the value of a car allowance over that period (again on the assumption that the employment would otherwise have continued) to reach an aggregate of $169,840. From this was deducted $10,000, already paid by the respondent to the appellant, leaving a balance of $159,840. However, because in the view of the Full Bench this exceeded the cap of six months remuneration then applying to relief under s 23A, by virtue of the then subs 23A(1)(ba), the compensation was reduced to six months' remuneration being the sum of $79,920.
The Full Bench did not, therefore, turn to the question of what payments, if any, the appellant might be entitled to under the contract of employment, as distinct from the relief which might be granted under s 23A, nor, as a result, did it consider the effect of any difference which might exist between the entitlement to compensation under s 23A and the entitlement which the appellant had under his contract of service whether approached from the viewpoint of s 23(1) in order to give effect to the claim under s 29(1)(b)(ii) or as co‑existing with the claim for compensation under s 23A and within s 23A(1)(a) as the section then stood.
What the Full Bench appears to have done, however, is to treat the prima facie measure of compensation payable in this case under s 23A(1)(ba) as the aggregate of the wages payable during the notice period which it concluded should have been given. In my respectful opinion this approach has the effect of confusing the entitlement to compensation under s 23A with the claim for amounts to which the appellant was entitled, under the contract of employment (s 23A(1)(a) as it then stood and s 29(1)(b)(ii)) as "a benefit ... to which he was entitled under his contract of employment".
It has long been established authoritatively in Australia that there is a difference between the relationship of employer and employee, arising under a contract of employment, and the existence or continuation of the contract of employment itself - Automatic Fire Sprinklers Pty Ltd v Watson (supra) and Byrne & Frew v Australian Airlines Ltd (1995) 185 CLR 410. The relationship of employer and employee may have ceased because of the refusal of the employer to allow the employee to work, and thus earn wages, even though that action by the employee may be unjustified but the contract of employment may not be discharged. For a more detailed exposition of the distinction between the discharge of a contract of employment, and the termination of the employment relationship or status and an explanation of the entitlement of the employee under his contract of employment, whether or not he accepts the employer's wrongful repudiation of that contract, - see Wilcox CJ in Siagian v Sanel Pty Ltd (1994) 122 ALR 333 at 352 ‑ 355 (IRC of A). Unless work is actually performed then the wages and any other remuneration which may have been agreed upon by the parties for the performance of the work in the manner agreed upon will not be payable - Australian National Airlines Commission v Robinson [1977] VR 87 (FC). Similarly, unless there is an express contractual term providing for the payment to an employee of wages or some other agreed sum in lieu of notice, the employee will not be entitled to wages in lieu of notice because his remedy will be damages for breach of the contract, being the failure to give the requisite notice - Spencer v Marchington [1988] IRLR 392 (Ch) at 395.
While the measure of damages for the employer's wrongful dismissal of the employee without notice, or with less than the necessary notice, will usually be the aggregate of the wages which should have been paid during the period of notice, or the remaining period of notice which should have been given, that aggregate sum will always be susceptible to reduction. For example, the employee will be under an obligation to mitigate his damages by seeking alternative employment and, if he does so, any other remuneration earned during the unexpired notice period must be brought to account in reduction of the damages. Similarly, if any eventualities intervene which would otherwise have terminated the employee's entitlement to wages during the notice period such as, for example, the death of the employee, or his disablement to work because of some unrelated cause such as sickness or accident outside the scope of any entitlement to payment (due to absence caused by sickness existing under the contract of employment or otherwise) the claim will be correspondingly reduced. These are all matters which would be susceptible to investigation, if raised by the parties, in a claim for damages for breach of contract by the employee alleging wrongful dismissal, as in the present case, by summary termination without notice.
The present appeal, of course, involves a case where the appellant employee has established both wrongful dismissal at law, being summary dismissal without notice, and, harsh, oppressive or unfair dismissal entitling him to a remedy under s 23A of the Act, but, as I have already indicated, the nature and measure of the relief granted for these two concurrent, but different, entitlements may differ.
This appeal involves the common presentation of a claim for relief by an employee under s 29(1)(b)(ii) of the Act being made in combination with a claim for relief under s 23A for alleged harsh, oppressive or unfair dismissal. No doubt this is the most frequent mode of resort to the power of the Commission under s 29(1)(b)(ii) but that practice should not obscure the fact that an application under the subsection may be made by an employee, otherwise than in conjunction with a claim for relief for alleged unfair dismissal, either during the continuation of the employee/employer relationship or after the termination of that relationship by a dismissal - see s 7(1)(a). Accordingly, it may sometimes be necessary for the Commission to exercise its power under s 23 upon a claim by an employee under s 29(1)(b)(ii) where the employer/employee relationship is continuing, or where that relationship has been terminated by a wrongful dismissal by the employer, but that repudiation has not been accepted by the employee who, for various reasons, may find it advantageous, at least temporarily, to keep the contract of employment in existence. For examples of why this may be advantageous to the employee see Turner v Australasian Coal & Shale Employees' Federation (1984) 6 FCR 177; 55 ALR 635. In those cases there will be no occasion for the Commission to exercise any of its powers under s 23A and, even more to the point, there will be no limitation upon the extent of the monetary relief which may be granted by the Commission arising from s 23A(1)(ab) of the section as it applied at the time of this case (or from s 23A(8) of the Act as it now stands).
The final important issue arising on this appeal is whether, when exercising its powers under s 23(1), to give effect to a claim made by an employee under s 29(1)(b)(ii) or whether when dealing with such a claim coupled with a claim for relief for harsh, oppressive or unfair dismissal under s 23A there is any other restraint upon the remedies which the Commission may grant. This arises in the present case because of the submission that, generally speaking, the Commission is not empowered to entertain a claim for damages for breach of contract on an application under s 29(1)(b)(ii) - see Welsh v Hills (1982) 62 WAIG 2708 and HotCopper Australia Ltd v Saab [2002] WASCA 190; 82 WAIG 2020 per Anderson J at [24].
I agree, with respect, with the conclusions of Steytler J and of Pullin J in this case that in circumstances such as the present the Commission is empowered to make a monetary order, in the nature of damages, to deal with the industrial matter before it, as it is empowered to do under s 23(1), notwithstanding that the relief granted is to award damages for breach of the employment of contract arising from the employer's dismissal without notice or with inadequate notice. However, I do not wish to be understood as suggesting that this is a special exception or qualification upon limits of the Commission, otherwise, to give effect to common law entitlements on an application by an employee under s 29(1)(b)(ii).
As set out earlier in these reasons the position of an employee seeking relief when the employer has summarily purported to dismiss him from his employment will vary depending upon whether or not the dismissal constitutes wrongful dismissal at law, or whether it constitutes harsh, oppressive or unfair dismissal within the meaning of the Act, or whether it constitutes both. In the present case the Commission has granted this appellant the full measure of relief to which he is entitled under s 23A(1)(ab) (now s 23A(6)) of the Act on the facts as found. In my view it was, and still remains, necessary for the Commission to consider whether the appellant employee has any greater entitlement to monetary relief for the vindication of his common law rights and, if so, to recognize that greater entitlement by the appropriate monetary order.
The nature of the common law entitlement which may exist in these, or like, circumstances includes:
•a claim in debt for a liquidated sum for past wages or other entitlements earned by the applicant employee for work or services performed under the contract prior to the dismissal;
•a claim determined on a quantum meruit for the value of work or services actually performed under the contract of employment but not payable at the time of the dismissal;
•a claim for unliquidated damages for breach of the contract of employment determined by taking into account the amount which would have been earned by the employee had he been permitted to continue to perform the services for which he was employed, less any amounts which may be attributable to the effect of, or the need for, mitigation of those damages, or of other intervening effects which might have prevented the applicant from receiving those earnings or which might have diminished those earnings, had the employment relationship continued until it had been lawfully determined.
These various claims in debt, on a quantum meruit, or for damages are all, to my mind, claims by an employee for a benefit, not being a benefit under an award or order, to which he is entitled under his contract of employment within the meaning of s 29(1)(b)(ii) or, for that matter, within the scope of s 23A(1)(a) of the Act as it stood at the time of the events material to this appeal as being "any amount to which the claimant is entitled". I do not see any reason why an employee, engaging the jurisdiction of the Commission under s 23 or s 23A, may not advance and, if proved, have vindicated such claims.
In a case such as the present the employee's claim for damages for breach of the contract of employment by the employer's failure to give 12 months' notice of termination has meant that the appellant has been unable to earn, by employment with the respondent, the salary which he would probably have earned had he been permitted to serve out his period of notice. That may or may not mean that his damages should be assessed at the value of the remuneration which he would have received during that period less any amounts actually paid to him by the respondent. This is because the appellant employee has not in fact earned that remuneration and therefore, it is the effect of the loss of the opportunity to earn that remuneration which must be valued by the assessment of damages. This assessment will take into account any income which the appellant might have earned, or might have been capable of earning, from other employment or remunerative activity during the notice period and less such amounts, if any, which should be brought to account for the possibility of adverse contingencies which have been mentioned. It will be for the Commission to have regard to these factors when considering what, if any, damages should be assessed for this breach of contract.
Having arrived at a figure for any proved damages for breach of contract suffered by the appellant as a result of his wrongful dismissal it may become necessary to compare that figure with any award of "compensation" which the Commission might contemplate awarding under s 23A(1)(ba) (now s 23A(6) of the amended Act). If the award of damages at common law is sufficient itself to redress the claim of the appellant, there would seem to be no occasion to resort to the power to award "compensation". If, however, the entitlement to damages at common law is insufficient, in the opinion of the Commission, as "compensation for loss or injury caused by the dismissal" (s 23A(1)(ba) now s 23A(6)) then the Commission has the power to supplement that relief, by an appropriate award of compensation so long as that "compensation" component of the award does not exceed six months' remuneration of the employee.
Lastly, I should observe that in Garbett v Midland Brick Co Pty Ltd (2003) 83 WAIG 893 at 903 when I wrote of the relief to which an employee may be entitled under s 23A of the Act I did not express or imply that there was any limitation or cap imposed upon the amount which an employee might recover in a claim under s 29(1)(b)(ii) of the Act whether because of what was then s 23A(1)(ba) (now s 23A(8)) or otherwise. The passage in that judgment at [85] set out why, when determining the quantum of any compensation to be awarded for harsh, oppressive or unfair dismissal the Commission should bring to account, and therefore into consideration, the extent of any entitlement which the applicant employee might have against his employer for monetary relief under the contract of employment.
Accordingly, I agree that this appeal should be allowed and that submissions should be heard from counsel upon the terms of an order which would remit this case to the Commission for reconsideration and determination of the relief to which the appellant is entitled under the Act in the light of the concurrent findings of the Full Bench that his summary dismissal by the appellant was in breach of contract and, as well, that it constituted harsh, oppressive or unfair dismissal.
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