(CA\RE TN_THE FEDERAL COURT OF AUSTRALIA ) ) VICTORIA DISTRICT REGISTRY ) V 30 of 1987 ) G DIVISION ) ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: REGINALD EDGAR GREGORY ' Appellant AND: PHILIP MORRIS LIMITED Respondent CORAM: JENKINSON, WILCOX AND RYAN JJ CORRIGENDUM The joint judgment of their Honours Mr. Justice Wilcox and Mr. Justice Ryan dated 14 April 1988 is amended by deleting from line 2 on page 21 thereof the word "with" and subst{tuting cee therefor the word "without". ro NK * FEV. Vaan. OO R.T. TARANTO 19 April 1988 Associate to the Hon. Mr Justice Ryan IC wee NO BB CATCHWORDS INDUSTRIAL LAW (CTH) - Award - Prohibition of harsh, unjust or unreasonable termination of employment - Whether clause void for uncertainty - Conduct amounting to breach - Relief obtainable by employee. Conciliation and Arbitration Act 1904 - s. 119 Metal Industry Award 1984 - cl.6(d)(vi) MASTER AND SERVANT - Effect of industrial award upon contract of service - Implication of term that provisions of award as from time to time in force be incorporated in contract - Provision that termination of employment shall not be harsh, unjust or unreasonable - Remedies for breach - Assessment of damages. V 30 of 1987 REGINALD EDGAR GREGORY v PHILIP MORRIS LIMITED Jenkinson, Wilcox and Ryan JJ a Melbourne pet - 27s oe — Fen, 14 April 1988 \ IN THE FEDERAL COURT OF AUSTRALIA ) ) VICTORIA DISTRICT REGISTRY ) Vv 30 of 1987 ) INDUSTRIAL DIVISION ) ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: REGINALD EDGAR GREGORY Appellant AND: PHILIP MORRIS LIMITED Respondent CORAM: JENKINSON, WILCOX and RYAN JJ PLACE: MELBOURNE DATE: 14 APRIL 1988 MINUTES OF ORDER THE COURT ORDERS THAT: 1. The appeal be allowed. 2. The orders made by Gray J be set aside and in lieu thereof it be ordered that: (?, x ? IN THE FEDERAL COURT OF AUSTRALIA ) VICTORIA DISTRICT REGISTRY ) No. V30 of 1987 INDUSTRIAL DIVISION ) On appeal from a Single Judge of the Federal Court of Australia BETWEEN: REGINALD EDGAR GREGORY Appellant AND: PHILIP MORRIS LIMITED Respondent CORAM : Jenkinson, Wilcox and Ryan JJ. PLACE: Melbourne DATE: 14 April, 1988 REASONS FOR JUDGMENT Jenkinson J. Appeal from judgments of the Court constituted by a single judge. In the proceeding in which the judgments were given several claims upon each of a number of causes of action were made by the appellant against the respondent. The circumstances which gave rise to the claims and descriptions of the claims are rehearsed in the reasons for judgment of Wilcox and Ryan JJ., which I have had the advantage of reading. (a) The respondent pay a penalty under s.119(1) of the Conciliation and Arbitration Act 1904 in the sum of four hundred dollars ($400), such penalty to be paid into the Consolidated Revenue - Pund. (b) Judgment be entered in favour of the appellant against the respondent for damages in the sum of thirty thousand dollars ($30,000). (c) Each of the other claims for relief by the appellant in the proceeding be dismissed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. It is convenient to deal first with the appeal from the dismissal of the appellant's claim, pursuant to 5.119 of the Conciliation and Arbitration Act 1904, for the imposition of a penalty on the respondent for the breach of sub-clause 6(d)(vi) of the Metal Industry Award 1984 - Part I alleged to have been committed by the termination of the appellant's employment by the respondent. In considering whether the termination answered the description provided by one or other of the adjectives "harsh", "unjust" and "unreasonable" in sub-clause 6(d)(vi) it may be relevant to know whether sub-clause 6(a)(ii) of the Metal Trades Agxveement gave expression to a term of the appellant's contract of employment in October 1986. In my opinion it did not. I think that provision to be, like sub-clause 6(a)(i), an agreement between the respondent and the two named Unions regulating the engagement of an employee by the respondent. Sub-clause 6(a)(11) is to be understood, in my opinion, as a promise by the respondent that only a member of "the appropriate Trade Union" would be engaged by the respondent as an employee. It may also be relevant to know whether the words in clause 22 of the Metal Trades Agreement, "The Company agrees that esses. NO @mployee should be unfairly or unreasonable dismissed", gave expression to a term of the appellant's contract of employment in October 1986. Again I think not. Upon a reading of the whole of that Agreement I conclude that clause 22 is not to be understood as a stipulation as to what shall be a term of contracts of employment of members of the two Unions, but only as 3. a stipulation of promises exchanged between the parties to the Agreement. The word "unreasonable" in sub-clause 6(d)(vi) of the Metal Industry Award is in my opinion to be understood in the sense which it has come to bear in many legal contexts when applied in characterisation of human conduct, that 15, failing to conform to a course of conduct which a reasonable person would, in the judgment of the tribunal of fact, have adopted inall the circumstances. I agree in the opinion of Wilcox and Ryan JJ., and for the reasons which their Honours give, that sub-clause 6(d)(vi) is not invalidated for uncertainty of meaning of the word "unreasonable". I am persuaded that it was unreasonable to terminate the appellant's employment without having raised with him the questions whether he might seek promptly to regain membership of the Electrical Trades Union and whether he might be willing to seek the respondent's leave to absent himself from work without pay for a short time while he considered what course he should take. The question whether the termination was unreasonable is, I think, one of fact. This question requires a determination, by reference to moral values and prudential considerations current in the community, of what the tribunal of fact thinks a reasonable employer in the circumstances would have decided to do at the time when the respondent terminated the appellant's employment. The process is similar to that by which the questions whether a 4. personal injury or damage to a chattel has been caused by a person's negligence are resolved : what does the tribunal of fact think that a reasonable person placed in the circumstances in which that person was placed would have done? The tribunal of fact has regard to prevailing moral values, prudential considerations and, sometimes, normal skills, (as of driving a car or operating a crane, for example) in deciding what that reasonable person would have done. If, after so many years' experience of road motor traffic, judicial tribunals of fact, primary and appellate, do not always find themselves unanimous in decision, it will not be surprising if judges do not always agree as to what the reasonable employer would have done in cases arising under sub-clause 6(d)(vi). When there is disagreement between a primary judge and judges exercising the appellate jurisdiction conferred by s.24(1)(a) of the Federal Court of Australia Act 1976 as to what the reasonable employer would have done, the latter judges may in my opinion properly direct themselves, having regard to the provisions of s.27 of that Act, by reference to the following observations, mutatis mutandis, of Gibbs A.C.J., Jacobs and Murphy JJ. in Warren v. Coombes (1979) 142 C.L.R. 531 at 552-553: "The duty of the appellate court is to decide the case ~- the facts as well as the law - for itself. In so doing it must recognize the advantages enjoyed by the judge who conducted the trial. But if the judges of appeal consider in the circumstances the trial judge was in no better position to decide the particular question than they are themselves, or if, after giving full weight to his decision, they consider that it was wrong they must discharge their duty and give effect to their own judgment. Further there is, in our opinion, no reason in logic or policy to regard the question whether the facts found do 5. oer do not give rise to the inference that a party was negligent as one which should be treated as peculiarly within the province of the trial judge. On the contrary we should have thought that the trial judge can enjoy no significant advantage in deciding such a question. The only arguments that can be advanced in favour of the view that an appellate court should defer to the decision of the trial judge on such a question are that opinions on these matters very frequently differ, and that it is in the public interest that there should be finality in litigation. The fact that judges differ often and markedly as to what would in particular circumstances be expected of a reasonable man seems to us in itself to be a reason why no narrow view should be taken of the appellate function. The resolution of these questions by courts of appeal should lead ultimately not to uncertainty but to consistency and predictability, besides being more likely to result in the attainment of justice in individual cases. The interest of the community in the speedy termination of litigation might, no doubt, be an argument in favour of the complete abolition of appeals, although that would be far too high a price to pay merely for finality. However, if the law confers a right of appeal, the appeal should be a reality, not an illusion; if the judges of an appellate court hold the decision of the trial judge to be wrong, they should correct it." Wilcox and Ryan JJ. have set out the circumstances in which the respondent had to decide what to do about the appellant's loss of membership of his Union, and I need not repeat them. I assume, but without expressing a concluded opinion, that the respondent would not have been unreasonable in thinking then that, unless the appellant should be able within a short time to gain re-admittance to his Union, termination of his employment at the end of that time would not contravene sub-clause 6(d)(vi). And I agree with the other members of the Court that it was not unreasonable of the respondent to accept without further enquiry 6. the information it had received that the appellant had been lawfully expelled from his Union. Although the appellant had not before his employment was terminated raised with his employer the possibility that he might take steps to regain membership of his Union, nor raised with his employer the possibility that termination of his employemnt might be deferred for a short time while he considered what course he might take, I think that termination of employment without prior discussion with the appellant of those possibilities was unreasonable, particularly in light of the appellant's age, superannuation prospects, length of service and past involvement in his Union's affairs. I agree in the opinion of Wilcox and Ryan JJ., and for the reasons which their Honours give, that the letter dated 17 October 1986 and marked "without prejudice" was admissible in evidence. As to penalty, I would not impose a penalty greater than $100 in this case. The moral culpability of the respondent in failing to observe the requirements of sub-clause 6(d)(vi) 15, I think, slight. The maximum penalty provided by sub-paragraph 119(1D)(a)(i) of the Conciliation and Arbitration Act 1904 - $1000 - is so small that s.120, by which the Court is empowered to order that the penalty be paid to the appellant, affords the court no opportunity to provide by such an order any but derisive compensation, so that the appellant would gain no significant advantage if the Court were to make such an order and were to increase the penalty by reference to a consideration of the amount of the damage which the breach had caused the appellant. The other causes of action alleged by the appellant are all founded upon the contract of employment of the appellant by the respondent or upon the Act in respect of that contract. I am ef the opinion, for the reasons which Wilcox and Ryan JJ. give, that this Court has jurisdiction to hear and determine in this proceeding the claims founded on those causes of action. In my opinion the contract of employment of the appellant by the respondent did not include an express or an implied term that had the effect of making the provisions contained in sub-clause 6(d)(vi) of the Award terms of that contract. Express agreement of that kind was not suggested, but it was submitted that a term of the contract should be implied that the provisions of the Award applying to the appellant's employment as that Award should from time to time exist would constitute terms of the contract. It could not in my opinion be predicated in respect of the implication proposed that, if the parties had been asked at the time the contract was made whether the provisions of the Award as they should from time to time exist were to be terms of their contract, each would have unhesitatingly responded in the affirmative. The evidence, no less than what one may be permitted judicially to know, is consistent with each party's believing that some of the matters with respect to which the Award made provision, or might in the future make provision, could he regulated by agreement between employer and Union representatives of the employer's workers to the greater advantage of that party than that party might expect to gain from the contractual adoption of whatever provision an Award applying indifferently to many kinds of industrial enterprises might from time to time contain. Since the provisions of the Award as from time to time varied would bind the parties without their agreement, and since the parties would remain free to agree that the appellant should have more than the Award prescribed (Kilminster v. Sun Newspapers Ltd. (1931) 46 C.L.R. 284), why should it be thought likely that the appellant would have responded affirmatively, when he entered into the contract of employment, toa question whether his freedom should be fettered by a term of the kind suggested? Further, it cannot in my opinion be said that the implication suggested was necessary to give business efficacy to the contract of employment. The relationship between appellant and respondent would be regulated by the provisions of the Award without their agreement that it should be so. The conclusion that the provisions contained in sub-clause 6(d)(vi) of the Award did not become terms of the contract of employment by virtue of agreement, express or implied, made at the time when the contract was formed, does not preclude the existence of a right in the appellant to damages for breach of the provision in sub-clause 6(d)(vi) that termination of employment by the respondent should not be harsh, unjust or unreasonable. In Mallingon v. Scottish Australian Investment Co. Lhd. (1920) 28 C.L.R. 66 the High Court was concerned with an obligation imposed by the Commonwealth Conciliation and Arbitration Act 1904-1918 to pay a liquidated sum of money prescribed by an award made under the authority of that Act. But 3. in the reasoning of the Court which established the right of the employee to recover that sum by action in the District Court at Sydney reliance is placed (28 C.L.R. at 71) on reasoning in Groves v. Lord Wimborne C1898] 2 Q.B. 402 at 415-416 concerning breach of a statutorily imposed obligation, commonly called breach of statutory duty, as giving rise to a right of action for unliquidated damages. In Reg. v. Gough: Ex parte Meat and Allied Trades Federation of Australia (1969) 122 C.L.R. 237 the award provision under consideration forbad, inter alia, harsh or unreasonable termination of employment in certain circumstances and harsh or unreasonable refusal:of employment in certain other circumstances. The question was whether a provision of that award empowering the Commonwealth Conciliation and Arbitration Commission to order employment or re-instatement in employment in the event of a dispute concerning that prohibitory award provision was an invalid attempt to confer judicial power on the Commission. Windeyer J. observed (122 C.L.R. at 246): "I wish to make two further observations arising out of the arguments we heard. The first is that the first paragraph of the clause would create new rights as between master and servant superimposed on the common law incidents of their relationship. It seems therefore that an action for wrongful dismissal or for a refusal of employment might be brought at common law by an employee based upon a non-compliance with the clause. Certainly proceedings could be instituted in the Industrial Court, or proceedings for a penalty taken in one of the courts mentioned in 8.119 of the Act. To give to a union the right to initiate proceedings before the Commission for the same complaint as an individual could make to a court seems to enphasize that the proceedings would have a judicial character." 10. The reference to wrongful dismissal, a rubric under contract law, suggests that any right conferred by arbitral award under the Act may be characterised in the terms Dixon J. used in Amalgamated Collieries of W.A. Ltd. v. True (1938) 59 C.L.R. 417 at 431 : "The right to payment of award wages is really a term imported by statute into the contract of employment, and imported independently of the intention of the parties ...... The distinction between express promise and obligation imputed by statute relates only to the juristic source of the obligation". On the other hand, the concept of aterm of the contract of employment imported by statute would not easily be accommodated to an award prescription of wages payable to employees who are neither members of an organization bound by the award nor otherwise parties to the dispute in settlement of which it was made. The award creates no right and correlative duty"as between such an employee and his employer who is bound by the award ! j . 1 te Engineerin Union (1935) 54 C.L.R. 387 at 405, 406; een v. Graziers' Z i Wi yrs' Union (13956) 96 C.L.R. 317 at 323-324, 331. How, then, can the statute be said to import a term into the contract of employment of such an employee? I think that, in respect of the employee who is, as well as of the employee who is not, bound by the award, the concept of an imported term is metaphorical, and that the obligation to pay the award wages, although conditioned upon the existence and, ordinarily, upon the performance of an employment contract, is not itself contractual. An obligation, deriving from the Act and an award made il. under its authority, to pay a liquidated sum of money can be enforced by action at the suit of the employee (being one bound by the award) to whom the money is due. That was established in ttis t vest. Co Ltd., supra, before the first enactment of a provision of the Commonwealth Conciliation and Arbitration Act 1904 expressed to confer on an "employee entitled to the benefit of an award" the right to sue for wages due to him under an award. That enactment was first inserted into the £ Lliation a rhitration Act in 1928 as s.49A. By an amendment made in 1973 the right was extended to comprehend "any payment becoming due to him under the award". Those statutory provisions may in my opinion he regarded as confirming and giving statutory expression to rights which Mallinson's Case had declared to have been given by the common law. Section 49A also imposed, as does its successor, s.123 of the present Act, a period of limitation on curial enforcement of those rights. In those circumstances I do not take s.49A or its successors to indicate a legislative intention that only a breach of an award which is constituted by a failure to make payment of a liquidated sum of money due to an employee should attract a remedy other than those which the Act affords. In Mallingon's Case, supra the provisions of the Act were examined by reference to the principles laid down in Groves vy, Lord Wimborne, supra for determining whether an action for damages will lie for injury caused by breach of a statutory duty imposed for the benefit and protection of a class of persons within which the injured person falls. The High Court rejected a submission that the legislative intention disclosed by the Act to 12. encourage collective action - both in relation to the processes of securing awards and in relation to the enforcement of compliance with award provisions - by organized representative bodies of employers and employees was inconsistent with according curial remedies under the common law to individual employees : 28 C.L.R. at 72-74. And the High Court found in none of the particular provisions of the Act for enforcement of awards (then in s.5 and Part IV, but now in Part VI of the Act) an indication that those remedies should not be available : 28 C.L.R. at 74-75. While all that reasoning was directed to the question whether a remedy of debt upon a statute was available, the sources from which the reasoning was drawn extended to authority upon the recovery of unliquidated damages. In my opinion the reasoning of the Haigh Court in Mallinson's Case supports the conclusion, which I draw, that breach of a provision of an award made under the Act causing damage to a person bound by the award may give rise to a cause of action for damages at the suit of that person. Persons who are parties to employment contracts, whether employer or employee, and who become bound by an award made under the Act, fall within a class on whose members the Act evinces, in my opinion, the intention to confer the protection of legal enforceability of award provisions. A primary mode of such enforcement is the compensatory remedy of damages. As to the assessment of damages, I think that the evidence leads to the conclusion, as a matter of probability, that a substantial number of the respondent's employees who were members of the Electrical Trades Union would have refused to work with the appellant and would by that means have caused economic 13. loss to the respondent whenever the appellant took up the performance of his contract of employmerit, if that employment had not been terminated on 17 October 1986. If that had happened, as I find that it probably would have happened notwithstanding the appellant's restoration to membership of the Union, termination of his employment then by the respondent would not, as I think, have constituted a breach of sub-clause 6(d)(vi). In that sub-clause the words "harsh" and "unjust", like the word "unreasonable", are in my opinion descriptive of the employer's decision to terminate the employment. It is not enough that the termination causes the employee to suffer injustice, or that the termination may be considered harsh in its effects on the employee. If the appellant had returned to work after he had regained membership of the Union and if by refusing to work with him some of the respondent's other employees had thereafter induced the respondent to terminate the appellant's employment, it might - I need not consider for present purposes whether it would - have been possible to conclude that the termination had caused injustice to the appellant because he had suffered the loss of desirable employment without any fault on his part, and to conclude that that injustice had been obvious to the respondent when the employment was terminated. But in my opinion that would not necessarily involve the conclusion that the termination had constituted a breach of sub-clause 6(d)(vi). The contracted, idiomatic expression of the prohibition which the sub-clause contains is perhaps open to several constructions. It is in my opinion not to be supposed that the draftsman of the sub-clause was intending to impose on the employer an obligation to abstain 14. from terminating his employees' employment whenever the termination would operate harshly on the employee, or would subject the employee to injustice, without regard to the identity of the person on whom lay moral responsibility for bringing about that harsh effect or that injustice. It is in my opinion only a termination which it is harsh of the employer to impose, as well as being harsh in its effect on the employee, that contravenes the sub-clause. And it is only a termination which it is unjust of the employer to impose, as well as working injustice to the employee, that effects such a contravention. The construction of sub-clause 6(d)(vi) which I have adopted may be thought mot to be congruous with another sentence which finds its place in the sub-clause. I set out the whole of sub-clause 6(d)(vi): "Unfair dismissals Termination of employment by an employer shall not be harsh, unjust or unreasonable. For the purposes of this clause, termination of employment shall include terminations with or without notice. Without limiting the above, except where a distinction, exclusion or preference is based on the inherent requirements of a particular position, termination on the ground of race, colour, sex, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction and social origin shall constitute a harsh, unjust or unreasonable termination of employment." Whatever the last sentence of the sub-clause means, it may be thought to be directed to the prohibition of certain terminations 15. by reason of the effects they would have rather than by reason of the harshness or injustice or unreasonableness they would demonstrate in the employer. But it would in my opinion be unsafe to allow a sentence of so doubtful meaning an influence on the construction of the first sentence in the sub-clause. If I am right in the construction of that first sentence which I have suggested, and right in the finding I have stated that a number of the respondent's employees would have refused to work with the appellant if he had returned to the performance of his contract of employment, it is as I think probable that the respondent would have terminated that employment without breach of sub-clause 6(d)(vi). The various contingencies make it very difficult to predict what may be regarded as probable. But I think that an employer which is a body corporate carrying on business for profit, as this respondent does, would not contravene the sub-clause if it preferred the economic interests of itself and its shareholders to the economic interests of an employee whom other employees were ostracizing 1n ways which were diminishing profits. If it be assumed that the conduct of those other employees constituted breaches by them of terms of their contracts of employment and breaches of provisions of the awards regulating their employment, yet it ought not to be thought a breach of the sub-clause by the employer that he terminates the employment of one innocent employee, rather than the employment of several culpable employees, if by that course the employer avoids a substantial loss of profits which will be sustained by either terminating the employment of the culpable or abstaining altogether from termination of employment. The Act affords a 16. number of means by which the respondent might seek to bring such ostracism of the appellant to anend, if it had occurred in the circumstances contemplated. Sub-sections 33(2), 119(2) and sections 109 and 122 provide examples. (Cf. Re nger Uranium Mines Pty, Ltd; Ex parte F.M.W.U. (1987) 62 A.L.J.R. 47). And, if the ostracizing conduct were disapproved by the governing agencies of the trade union of which the employees engaging in that conduct were members, the Electrical Trades Union, the respondent might perhaps expect that the conduct would not long continue after the respondent had appealed to those agencies for help. But if those agencies were not minded to restrain the expression of their members' animosity to the appellant, the respondent could not as I think be found to be in breach of sub-clause 6(d)(vi) if it chose to put an end to the economic loss flowing from the ostracizing conduct by terminating the appellant's employment, and not to embark upon proceedings, in the Australian Conciliation and Arbitration Commission or ina court, designed to bring that conduct to an end. At all events it is as I find more probable than not that, if the appellant had remained in his employment, the resumption of his performance of the duties of that employment would have resulted in ostracizing conduct by other employees which would have induced the respondent to terminate that employment, and in circumstances in which that termination would not have constituted a breach of sub-clause 6(d)(vi). The evidence does not, however, justify a conclusion that if the termination effected on 17 October 1986 had not occurred, there was no chance that the appellant would have remained in normal employment by the respondent until the end of 17. his working life or until some earlier time when he found it to his advantage to terminate that employment himself. That chance must be evaluated and the damages must include compensation for the loss of that chance which was caused by the termination effected on 17 October 1986. As a matter of probability the breach of sub-clause 6(d)(vi) accelerated what I would find to be the likely lawful termination of the appellant's employment by a period of about four months. I would allow as damages virtually the whole of the wages which would have been earned during that period (less the wages paid in lieu of notice), although there 1s a chance that the appellant might have taken leave without pay during part of that period. Wilcox and Ryan JJ. have set out what the evidence discloses about the appellant's wages. I would allow in respect of the loss of the chance of retaining his employment by the respondent about $10,000. I would assess the appellant's total damages at $15,000. A number of the appellant's claims for relief were grounded on contentions that the appellant's contract of employment by the respondent had subsisted on and after 17 October 1986 and until the issue of the originating process and was still subsisting. Some of those contentions rested in turn on the submission that it was a term of the contract of employment that termination would not be effected harshly, unjustly or unreasonably. Having concluded that there was no sucha tern, I need not further consider claims founded on the existence of such aterm. An alternative basis of the claim that the contract of 18. employment still subsisted was that an attempt to terminate employment would be ineffectual if the attempt were in contravention of sub-clause 6(d)(v1). I can find no support for that construction of the Award in its provisions. I would allow the appeal, set aside the order of Gray J. made 22 July 1987 in the proceeding numbered V2 of 1987 and make in lieu of that order the following orders: (a) The respondent pay a penalty of $100 into the Consolidated Revenue Fund for breach of sub-clause 6(da)(vi) of the Metal Industry Award 1984 - Part I in terminating the employment of the appellant on 17 October 1986. (b) The appellant recover 615,000 damages against the respondent for the said breach. (c) Each of the other claims by the appellant for relief in the said proceeding be dismissed. I certify that this and the 17 preceding pages are a true copy of the Reasons for Judgment herein of the Honourable Mr. Justice Jenkinson. ¢ Associate Dated: 14 April, 1988 IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY Vv 30 of 1987 eee INDUSTRIAL DIVISION ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: REGINALD EDGAR GREGORY Appellant AND: PHILIP MORRIS LIMITED Respondent CORAM: JENKINSON, WILCOX and RYAN JJ PLACE: MELBOURNE DATE: 14 APRIL 1988 REASONS FOR JUDGMENT WILCOX and RYAN JJ: In 1984 the Australian Conciliation and Arbitration Commission, in the Termination, Change and Redundancy Case, approved in principle the insertion into federal awards of a provision to protect employees against the possibility of harsh, unjust or unreasonable dismissal. The Commission amended the Metal Industry Award 1984, as from 1 February 1985, so as to insert a new sub-cl.(d) to cl.6, dealing with "Contract of Employment". Sub-clause (d), concerning termination of employment, includes para.(vi) as follows: "Unfair dismissals (vi) Termination of employment by an employer shall not be harsh, unjust or unreasonable. For the purposes of this clause, termination of employment shall include terminations with or without notice. Without limiting the above, except where a distinction, exclusion or preference is based on the inherent requirements of a particular position, termination on the ground of race, colour, sex, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction and social origin shall constitute a harsh, unjust or unreasonable termination of employment." This case provides the first occasion upon which this Court has had to consider the application of the principle adopted by the Commission. The case involves the Metal Industry Award itself and it is one which is not covered by the concluding words of para.(vi); so that the Court is required to consider the general import of the words "harsh, unjust or unreasonable". Moreover, once again for the first time, the case raises two important questions in connection with the operation of para.(vi): what relief is obtainable by an employee in the event of a breach by an employer of this paragraph, other than the imposition upon the employer of a penalty pursuant to s.119 of the Conciliation and Arbitration Act 1904; and, if other relief is available, whether it may be granted in proceedings under s.119 pursuant to the accrued jurisdiction of this Court. The facts Reginald Edgar Gregory, the appellant, was employed by Philip Morris Limited, the respondent, from January 1977 until 17 October 1986. He is an electrician by trade and was classified, for the purposes of his employment, as "electrician special class". At the time of his dismissal the appellant was aged 47 years. He is a married man with three dependent children. Mr Gregory was employed by Philip Morris at its cigarette factory at Moorabbin, Victoria. He was a member of the Electrical Trades Union ("the ETU"), one of two unions which between them, cover most of the maintenance employees at the factory; the other major union being the Amalgamated Metal Workers' Union ("the AMWU"). Some years ago an agreement was made between the four unions covering the employees at Moorabbin that they would act together in negotiations with management. For this purpose they formed a committee, known as the "closed shop committee", consisting of representatives of all four unions. In more recent years only the ETU and the AMWU have continued to be represented on the "closed shop committee", the other two unions dealing separately with management. In 1982 the ETU and AMWU entered into an agreement with Philip Morris, which was commonly referred to as "the local agreement". The purposes of the agreement were stated by cl.4 thereof to be: "(a) To promote industrial harmony and co-operation between the Company and its employees. (b) To formalise the parties agreement with respect to:- - Rates of pay and classification - Benefits - Hours of Work - Conditions of employment to be observed by the Company and employees. (ec) To establish working procedures for the settlement of disputes. (d) To create a working relationship that will prevent work stoppages, lockouts or any other action that will disrupt peaceful co-existence between both parties." This agreement dealt with a variety of subjects, of which some, like weekly wage rates, hours of work, meal breaks, sick leave, etc., bore directly upon conditions of employment and some of which did not. Clause 6 of the local agreement, relating to "contract of employment" stated that "membership of the appropriate Trade Union is a condition of employment". The agreement dealt with both disputes and demarcation procedures. Clause 22, dealing with disputes procedures, set out the steps to be taken in the event of a dispute arising; the purpose of those steps being to prevent unnecessary interruptions to the operations of the factory. Clause 22 concluded with the following sentence: "The Company agrees that during the term of this agreement there shall be no lockouts arising from internal factors, and that no employee should be unfairly or unreasonable (sic) dismissed." In September 1982 Mr Gregory was elected as a shop steward by his fellow ETU members. He thereby became a member of the closed shop committee, representing the day shift. Another member of the committee was Mr John Karadeas, who was a member of the AMWU and a shop steward for its members. During 1985 there were negotiations between the members of the closed shop committee and representatives of management for variations of the local agreement. It was agreed that, in about March or April 1987, there would be discussions about "wage parity". As the learned trial judge found, the term "wage parity" was a reference to "an attempt by the closed shop committee to negotiate a uniform rate of pay for all AMWU and ETU tradesmen employed by the respondent. As things stood in 1985, and as they stand at present, an electrician special class earns approximately $30.00 per week more than the lowest grade of electrician and a fitter. An electronics tradesman earns approximately $60.00 per week more than the lowest grade of electrician and a fitter. The purpose of the wage parity claim was to lift all tradesmen to the same rate as the electronics tradesmen". There was some dissension amongst the ETU members at Moorabbin about the desirability of wage parity. Mr Kevin Rust, an electronics tradesman who represented the afternoon shift on the committee, was one person who opposed the notion. Mr Gregory became aware of a move to oust him as shop steward and, at a meeting held on 11 August 1986, he resigned and was replaced by Mr Rust. A day shift employee was elected as deputy shop steward, thus depriving Mr Gregory of his position on the committee. One or two weeks later, at a further meeting of ETU members, it was decided that the union should break away from the closed shop committee and that it should negotiate with management separately from the AMWU. The appellant opposed that change, and when the decision was taken he indicated that he would remain on the closed shop committee, representing himself and three other ETU members -~ Messrs Ivor Wheeler, Kevin Barratt and Les Bogar -- who shared his views. On 25 September 1986 a "show of cards" was called by the new ETU deputy shop steward. A "show of cards" is a procedure whereby a shop steward or a deputy shop steward calls upon relevant employees to show their "OK cards" in order to prove that they are financial members of the union. Mc Gregory refused to show his card, whereupon a stop work meeting of ETU members was held. The meeting resolved to stop work for the remainder of the day and for the whole of the next day. Most of the ETU members then left the factory. The appellant and his three supporters continued to work through the stoppage. As a result, on their return to the job, the other ETU members declined to work with the four men. The respondent resolved the problem temporarily by relocating the four men at its Braeside leaf store but there was not enough work there to keep four electricians employed. Besides, there was continuing antagonism at Moorabbin between the AMWU members, who supported the four men, and the electricians who remained there. In early October Mr Rust purported to lay charges against Mr Gregory, and his three supporters, under the rules of the ETU. By a letter dated 6 October 1986, Mr Gregory was informed by Mr Ron Luckman, the Secretary of the Victorian Branch of the ETU, of the content of those charges and that they would be heard by a special meeting of the State Council to be held on 15 October 1986. The State Council did not proceed with any charges against Mr Bogar, proper notice not having been given to him. Council resolved to deal separately with the charges against the other three men, whereupon they left the meeting and took no further part in it other than to deliver some written submissions. The Council then resolved to expel the appellant, and to suspend Mr Wheeler and Mr Barratt, from membership of the ETU. Mr Gregory was officially informed of the decision to expel him by a telegram which arrived whilst he was at work on 16 October. But he first learned of the position unofficially, when he arrived at work that morning. He was told of the expulsion first by some of his fellow employees and later by the engineering manager of Philip Morris, Mr Hardy Weller, who had received a telex from Mr Luckman. When he first learned of his expulsion Mr Gregory became concerned at the likely effect upon his employment. He discussed the matter with Mr Karadeas who suggested that he should join the AMWU. Accordingly, he filled out an application for membership of that union. However, at the meeting held later that day, Mr Weller indicated that it was not acceptable to management that electricians hold AMWU membership, and in the result Mr Gregory, Mr Wheeler and Mr Barratt were suspended for the day. Mr Karadeas had some further discussions with Mr Weller but he was not able to achieve a resolution of the problem facing Mr Gregory. Mr Gregory attended a funeral on the following morning. After he arrived at work he saw Mr Weller who handed to him two letters. The first letter read: "The Company has been informed, and it has been confirmed, that you are no longer a member of the Electrical Trades Union of Australia and as such you are in breach of a term and condition of your employment. The Company, accordingly, hereby terminates your employment and enclosed herewith is a cheque for S weeks' payment in lieu of notice, in accordance with Clause 6(d) of the Metal Industry Award, together with outstanding entitlements, and a cheque representing your termination benefit from the PM(A)L Superannuation Fund." The second letter, which was headed "WITHOUT PREJUDICE", read as follows: "I refer to the matter of your termination of employment and advise that 'without prejudice' to the Company's legal rights in this matter, the Company is prepared to re-employ you in your former position in the event that you are reinstated as a member of the Electrical Trades Union of Australia on or before 21 November, 1986." Mr Weller also handed Mr Gregory various cheques, representing five weeks' pay in lieu of notice and amounts of money payable to him upon the termination of his employment for a refund of superannuation contributions and for sick pay and long service leave. Mr Gregory consulted solicitors. On 11 November 1986 he obtained a Rule to Show Cause against the members of the State Council of the Victorian Branch of the ETU, seeking orders under s.141 of the Conciliation and Arbitration Act. The orders, if made, would have required the members of the State Council to treat the expulsion decision of 15 October as null and void and to recognize Mr Gregory as a member of the ETU. The State Council obtained legal advice. On 24 November 1986, it met again. As a result of that meeting Mr Luckman wrote to the appellant in these terms: "I wish to advise that the State Council of the Victorian Branch of the Electrical Trades Union of Australia at a Special meeting held 10.00 a.m. today resolved the following. State Council resolves on legal advice:- 10. 1. That the letter from K. Rust to the State Secretary dated 28th September, 1986 was a preliminary step to the charging of R. Gregory, K. Barratt, I. Wheeler and L. Bogar and that no charges were ever laid. 2. That no charges being before the State Council, its resolutions of 15th October, 1986 with respect to R. Gregory, K. Barratt and I. Wheeler were and are void and of no effect. 3. That the Secretary advise R. Gregory, K. Barratt, I. Wheeler and L. Bogar accordingly. Please find enclosed receipt for $11.50 for membership dues received from you on the 30th October, 1986." The appellant's solicitor immediately communicated the contents of this letter to the solicitor for the respondent, intimating that Mr Gregory would attend for work upon the following morning. But that evening he received by courier a letter which included the following: "In our client's letter to you dated 17th October, 1986, you were informed that your employment by our client was terminated. You are not permitted to enter the company's premises at any time until further notice from the company and in particular you will not be permitted to enter the premises if you purport to attend for work on 25th November, 1986, or at any time thereafter unless permitted by the company in writing. If you do enter the premises, you will render yourself liable to be treated as a trespasser." Accordingly, Mr Gregory did not present for work the next day, but the learned trial judge accepted his evidence that he has since cemained ready and willing to resume his employment with the respondent should the opportunity arise. 11. Peripheral matters Before turning to the questions which, in our view, are critical to the resolution of the appeal, it is convenient to dispose of two other matters, each of which was much discussed at the trial. The first matter arises out of the "without prejudice" letter of 17 October 1986. At the trial counsel for the appellant tendered, against objection, evidence of several other "without prejudice" letters which subsequently passed between the parties, or their solicitors. There were also oral communications, during the course of which the solicitor for Philip Morris indicated that the date of 21 November, referred to in the "without prejudice" letter of 17 November, was no longer regarded as critical. Upon the basis of these letters and discussions, counsel for Mr Gregory attempted to persuade the trial judge that, if the employment of Mr Gregory had lawfully been terminated on 17 October, there was a binding contract between the parties for his re-employment which became operative once the union conceded that he had not been lawfully expelled. The trial judge rejected this submission for a number of reasons. Although his Honour's view was challenged in the Notice of Appeal, at the hearing before us counsel for the appellant finally indicated that this challenge was not pressed. 12. Secondly, the submission was put to the learned trial judge that the concluding words of cl.22 of the local agreement, quoted above, constituted a term of the contract of employment between the parties. This submission led to a debate about the application to that agreement of s.47(6) of the Industrial Relations Act 1979 (Vic.). His Honour held that this sub-section did not operate to deprive the agreement of validity, and he upheld the submission that the term was included in the contract of employment. For reasons which will appear, we take the view that the content of cl.6(d)(vi) of the Metal Industry Award was incorporated in the contract of employment between Mr Gregory and Philip Morris. Clause 6(d)(vi) proscribes a termination of employment which is "harsh, unjust or unreasonable". Clause 22 of the local agreement refers to an employee being unfairly or unreasonably dismissed. It is difficult to conceive of circumstances in which the application of one test would yield a result different from that provided by the other. Certainly there is no basis for any such distinction in the present case. It follows, having regard to our view about the incorporation of cl.6(d)(vi) in the contract of employment, that, in a practical sense, it does not matter whether or not the terms of cl.22 of the local agreement were also incorporated. But we indicate our view that they were not. Although the local agreement contains some provisions designed to confer rights upon individual employees, for example regarding wages and the like, cl.22 is directed not to individual rights but to the establishment of procedures 13. relating to the determination of disputes. The clause goes to the relationship between the two unions and the company; the obligation not to dismiss an employee unfairly or unreasonably being an incident of that relationship. The resolution of these two matters adversely to the appellant means that his claim that he remains in the employment of Philip Morris or, alternatively, that he is entitled to damages for breach of his contract of employment must depend upon his primary case: that his dismissal on 17 October 1986 was "harsh, unjust or unreasonable", and therefore in breach of ¢l1.6(d)(vi) of the award. Whether dismissal "harsh, unjust or unreasonable" Evidence was called at the trial upon the question whether, at his pre-employment interview, Mr Gregory was told that it would be a condition of his employment that he remain a member of the ETU. The learned trial judge found that Mr Gregory was not so informed, so that it was not a term of his employment from the outset that he maintain continuous membership of the ETU. However, consistently with his view about cl.22, his Honour held that, upon the date when the local agreement commenced, cl.6 had the effect of varying the contract of employment by adding a condition that Mr Gregory remain a member of the appropriate union, that is, the ETU. 14. There is, with respect, much to be said for the view of the learned trial judge with respect to the operation of cl.6. That clause, in contrast to cl.22, is addressed to the rights and obligations of employees pertaining ta the formation, continuity and termination of their employment. It deals with matters commonly regulated by industrial awards, but so as to supplement rather than to displace the relevant provisions of those awards. However, it is not necessary to reach any firm conclusion about this matter. Whether or not it was a term of the contract of employment that Mr Gregory remain a member of the ETU , the evidence abundantly established the entitlement of Philip Morris to regard that matter as critical to his long term future with the company. For many years, presumably at the insistence of the unions, Philip Morris had followed the policy of employing only persons who were members of the relevant unions. The unions strongly supported this policy. This is demonstrated not only by the incorporation of the policy in the local agreement in 1982 but also by the practice of shop stewards holding "shows of cards" from time to time. The usual practice, according to the evidence, was that an employee who was unable to produce an "OK card", on a "show of cards", was sent home for the day and was not allowed to return to work until the card had been produced. Against the background of this evidence, it may readily be inferred that any decision of Philip Morris to retain in its employment, in the long term, a person who was no longer a member of the ETU would have resulted in a major 15. confrontation with those of its employees who remained within that union; and no less so where that member had recently been expelled from the union by reason of differences between him and the majority of the ETU members in the factory. Under these circumstances, once it became clear that Mr Gregory could not regain his union membership, no other course would reasonably have been open to Philip Morris but to dismiss him. And, whatever might be said about other employees, it is difficult to see that, in taking that course, it would have been acting harshly, unjustly or unreasonably. Mr Gregory had been one of those insisting, over many years, on the maintenance of the policy of employing only unionists. As a shop steward, he had himself called many "shows of cards". As a member of the closed shop committee, he had been involved in negotiations for the variation of the local agreement, without making any suggestion for the deletion of the restriction contained in cl.6. It would be reasonable to suppose that Mr Gregory accepted that there could be no long term future in the company for an employee who remained outside the relevant union. However, cl.6(d)(vi) is not addressed to the question of termination of employment in the abstract. It is intended to deal with actual industrial situations, requiring that a termination of a particular individual shall, not be harsh, unjust or unreasonable. The application of the paragraph requires consideration of the circumstances of each case, as they exist when the decision is taken to terminate the particular employee. 16. In the present case the employer was concerned with an employee of nearly ten years standing who was a family man with dependent children. Even if Mr Gregory were successful in promptly obtaining alternative employment, the consequences to him of dismissal would be severe. He would lose substantial superannuation entitlements. But, for a man aged 47 years with restricted employment mobility, especially one carrying the stigma of dismissal, there could be no assurance that he would quickly gain an alternative position. The consequences of a dismissal might be devastating. Moreover, the question of his dismissal arose in an unusual context. There was no suggestion of any misbehaviour by Mr Gregory, in his capacity as an employee. Neither his competence nor his diligence was in issue. The problem arose because, so it appeared on 17 October, he had been expelled from his union as a result of differences within the union upon a matter of industrial policy. It might fairly be said that Mr Gregory had behaved unwisely, even provocatively, in the course of these differences, but the dispute was essentially within the union itself. It did not affect Mr Gregory's capacity or willingness to serve his employer. Counsel for the appellant submits that the letter from Mc Luckman of 24 November conclusively establishes that the dismissal of his client on 17 October was harsh, unjust and unreasonable. As counsel points out, the reason for the dismissal was that Mr Gregory had been expelled, whereas it was subsequently conceded that the purported expulsion was 17. invalid. It follows, according to counsel, that there was no foundation in fact for the dismissal, with the result that it must be characterized as harsh, unjust and unreasonable. We cannot accept this submission. The question whether a dismissal is harsh, unjust or unreasonable must be determined in the light of the facts as they appear at the velevant time. We accept that, if the relevant facts are not clear, it is the obligation of an employer bound by a provision such as cl.6(d)(vi) to establish those facts before dismissing an employee; cf the observation of Lord Mackay of Clashfern in Smith v City of Glasgow District Council [1987] IRLR 326 at p.329: "As a matter of law a reason could not reasonably be treated as sufficient reason for dismissing Mr Smith when it had not been established as true nor had it been established that there were reasonable grounds upon which the special committee could have concluded that it was true". But, provided that the employer discharges the obligation to investigate the facts, a dismissal does not contravene the provision merely because it later appears that the true facts differed from those which appeared at the date of the decision to dismiss. Clause 6(d)(vi) is intended to operate ina practical way in a commercial and industrial environment. The information before Philip Morris on 17 October 1986 was that Mr Gregory had been expelled from the union. The company had that information from a reliable source, the Victorian Secretary of the union. It was entitled to accept that information at face value and to assume that the expulsion resolution was valid. The officers of the company were in no 18. position to enter on an inquiry into the internal processes of the union so as to determine the matter of validity for themselves. The circumstance that the resolution was subsequently conceded to be invalid does not mean that 1t was harsh, unjust or unreasonable for Philip Morris to act, on 17 October 1986, upon the basis that it was valid. Counsel for the appellant supported his argument by referring to the decision of the United Kingdom Employment Appeal Tribunal in Leyland Vehicles Ltd. v Jones [1981] ICR 428 and, specifically, to a statement at p.433 that a particular legislative provision pointed "to the need for the employer to establish the fact of non-membership of a union, as opposed to a mere belief, albeit a genuine belief, that the employee was not a member". But we do not find this decision helpful in the present case. As the context makes clear, the statement depends entirely upon the form of the relevant United Kingdom legislation. It was not intended as a statement of general principle. However, the rejection of this first submission does not conclude the question of whether Mr Gregory's dismissal was "harsh, unjust or unreasonable". Even if it be accepted that, had Mr Gregory remained outside the union, his prospects of continuing in the long term to remain in the employ of Philip Morris were negligible, it does not follow that it was reasonable to dismiss him on 17 October. The decision of the State Council had been taken only two days earlier. Mr Gregory had learned of the decision only the previous day. He 19. had had no opportunity to take any steps to regain his union membership; nor even to consider what steps might usefully be taken. Philip Morris recognized that it might be possible for Mr Gregory to regain his membership and that it would be reasonable to allow him an opportunity to do so. [In his evidence, Mr Barry Griffin, Industrial Relations Manager of Philip Morris, said that, at the time, the relevant Philip Morris officers thought five weeks to be "a reasonable time in which something could have happened and I guess in a reconciliation form was in our mind". This was the reason for the issue of the "without prejudice" letter of 17 October, which limited a time of five weeks. But, recognizing that possibility, the company took the course of immediately and unequivocally terminating Mr Gregory's employment, leaving open to him only an unenforceable promise of re-employment if he could procure his re-instatement by 21 November. In electing to take that course, in respect of an employee in Mr Gregory's position, the company acted harshly, unjustly and unreasonably. The learned trial judge was sympathetic to the view which we have just expressed but he was persuaded that practical considerations required him to hold that immediate dismissal was not harsh, unjust or unreasonable. As his Honour pointed out, suspension of an employee without pay is a course which, in the absence of a relevant term in the contract of employment or award, is not open to an employer. Ordinarily, an employer is not entitled to stand down an employee without wages: see Re Application by Building 20. Workers' Industrial Union of Australia (1979) 41 FLR 192 at p.194. His Honour noted that for Philip Morris to have suspended Mr Gregory on pay would have been to treat him more favourably than its other employees, in that he would have received remuneration without being required to work; although it should be observed that this is the course which the company took in relation to Mr Barratt and Mr Wheeler, each of whom was subsequently allowed to return to work. The comments which follow are made without disrespect to the trial judge. The options open to Philip Morris may have been canvassed more extensively before us than before his Honour. But it seems to us that, at least, the option of a suspension without pay should not so readily have been rejected. We agree that Philip Morris could not have suspended Mr Gregory without pay unless he first consented to that course. But no attempt was made to procure that consent. The company was faced with a decision about the future of a long standing employee who was faced with dismissal because, contrary to his own wish, he had apparently ceased to be a member of the relevant union. The employee wished to retain his position, and was prepared to take action to remain qualified for continued employment by being a member of a union, as he had demonstrated by applying for AMWU membership. The company rightly rejected that expedient but it did accept that, given time, Mr Gregory might achieve re-instatement within the ETU. It seems to us that, in this situation, reasonableness required that, before taking the ultimate step of dismissal, the company should have explored with Mr Gregory 21. the available alternatives. It was not necessarily bound to offer him suspension with pay, but it should at least have invited him to indicate his attitude to that course. Given his perilous position, Mr Gregory might well have accepted this invitation; so that, in the events which happened, his job would have remained open to him when the union conceded that his expulsion was invalid. We would not wish to propound any universal rule but it seems to us that a provision such as that contained in cl.6(d)(vi) of the Metal Industry Award may often necessitate consultation with the employee before a decision to dismiss. The necessity for consultation has been emphasised in the United Kingdom: see Spencer v Paragon Wallpapers [1976] IRLR 373, Williamson v Alcan (UK) Ltd [1978] ICR 104, W Weddel & Co Ltd v Tepper [1980] ICR 286. Counsel for the respondent submits that the cequirement of consultation places undue responsibility upon his client. He points out, correctly, that Mr Gregory failed to invite the company to suspend him without pay, as an alternative to dismissal. He submits that Philip Morris ought not to be criticized for failing to offer a solution which did not occur to Mr Gregory himself. This submission raises an issue fundamental to the Operation of cl.6(d)(vi): is it enough that the employer not react unreasonably to suggestions made by the employee as to the continuance of his or her employment; or does the 22. paragraph cast upon the employer some responsibility for investigating alternatives to the dismissal of the employee? In principle, as it seems to us, the latter approach is correct. The purpose of the paragraph is to give to employees some assurance as to the continuance of their employment. The paragraph was intended to operate in a variety of situations, some of which have nothing to do with the personal attributes of individual employees; for example, the re-organization of methods of manufacture or the closure of a factory or of a line of production. These are matters about which the employer may fairly be expected to have both information and expertise. They are matters in relation to which most employees could contribute little. Where a decision to dismiss turns on matters of that kind, the paragraph must intend at least that, irrespective of anything which may be put by or on behalf of individual employees, the employer will address itself to all of the facts and will make its decision accordingly. The position is perhaps less clear in cases turning upon the personal characteristics of particular employees. But, even in these cases, there are sound policy reasons for construing the paragraph as casting some burden upon the employer to consider all of the available options, even options not suggested by the employee. Being under threat of dismissal is, for many people, a traumatic experience. Even the imaginative and the articulate may find their powers reduced by such a threat. Rarely indeed would an employee be sufficiently well-informed, imaginative and articulate to 23. identify and to present to the employer all of the available alternatives to dismissal. To apply cl.6(d)(vi) in the restricted manner contended for by the respondent would, in many cases, be to defeat its evident purpose. It is further submitted on behalf of the respondent that, assuming the necessity for the respondent to consult with the appellant before making a decision immediately to terminate his employment, this requirement was satisfied by the discussions which occurred on 16 October. In our opinion this submission cannot be sustained. The discussion on the morning of 16 October, in which Mr Gregory participated, was instigated by the management and related to the telex from Mr Luckman. According to Mr Gregory, the management representatives spoke of termination and he mentioned his application to join the AMWU. The management representatives explained to him that this was unacceptable, and at that stage he was suspended without pay. There was no discussion of alternative approaches to the problem. Similarly, it appears that the only matter discussed between Mr Karadeas and the management representatives, later in the day, was whether it was acceptable to Philip Morris for Mr Gregory to hold AMWU membership. No doubt Mr Karadeas was doing his best for Mr Gregory, whom he apparently regarded as a friend, but his canvassing of that proposal in no way relieved the management personnel from considering, and putting to Mr Gregory, all of the available options. 24. Finally, in connection with this issue, reference should be made to three legal questions: whether cl.6(d)(vi) is void for uncertainty, the admissibility un evidence of the "without prejudice" letter of 17 October 1986 and the proper approach to be taken by this Court to the review of the trial judge's determination that the dismissal was not harsh, unjust or unreasonable. As to the first matter, counsel for Philip Morris submits that a formula using the word "unreasonably" is void for uncertainty. He cites Whitlock v_ Brew (1968) 118 CLR 445 and Lee-Parker v Izzet (No.2) [1972] 1 WLR 775. However those cases raised quite different considerations because in each of them the language used by the parties was so vague that it was impossible to say that they had reached a consensus upon vital provisions of their agreement. That is not the present case. The relevant terms are laid down, independently of consensus, by an industrial tribunal. Delegated legislation is not rendered invalid by uncertainty: see King Gee Clothing Co Pty Limited v Commonwealth (1945) 71 CLR 184 at pp.194-195. The same rule is appropriate to an award of an industrial tribunal. In any event, we do not regard the paragraph as uncertain. It is true that it is not possible to describe in advance all of the circumstances in which a termination of employment will be unreasonable; but the term is one which is capable of application to particular cases. As was pointed out in argument, it has been a standard practice of 25. conveyancers for many years to provide in respect of assignments of leases that "consent of the lessor shall not unreasonably be withheld". We turn to the second matter, the "without prejudice" letter of 17 October. It appears to us that this letter was relevant to the issue of the reasonableness of the respondent's conduct. It contained an implicit admission that immediate unconditional dismissal would be, at least, a harsh step to take. The letter was headed "without prejudice"; but a document is not necessarily rendered inadmissible by that circumstance. As was pointed out in Re Daintrey; ex parte Holt [1893] 2 QB 116 at p.119, "the rule which excludes documents marked 'without prejudice' has no application unless some person is in dispute or negotiation with another, and terms are offered for the settlement of the dispute or negotiation". Nor is it the rule that the insertion in a document of the heading "without prejudice" necessarily deprives that document of legal effect: see Haynes v Hirst (1927) 27 SR (NSW) 480 at p.489, Pitts v Adney [1961] NSWR 535 at p.539. In Cross on Evidence (3rd Australian edition) para.13.69 the learned authors refer to the necessity "to examine the true nature of the communication contained in" the document. In the present case, litigation between Mr Gregory and Philip Morris was, on 17 October, neither pending nor anticipated. Mr Griffin said in evidence that, at that date, "we did not envisage court proceedings or whatever". The 26. letter was not delivered in an attempt to settle an existing dispute but merely to indicate the company's attitude to future ce-employment. It would appear that the letter was marked with the words "without prejudice", not because of a desire to render it inadmissible in evidence, but out of a wish to prevent the offer which it contained giving rise to a binding legal obligation. In other words, the marking was the result of confusion between two distinct legal concepts: admissibility of evidence and intention to create legal relationships. In relation to the approach to be taken to the trial judge's finding on reasonableness, reference should be made to two recent decisions upon similar statutory language. In George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd (1983) 2 AC 803 the House of Lords had to consider whether it would be "fair and reasonable", within the meaning of a statutory provision, to allow the appellant to rely upon a particular clause in its contract with the respondent. Lord Bridge of Harwich, with whom the other members of the House agreed, commented upon the approach which an appellate court should take to the review of a trial judge's assessment of what was, under the circumstances, "fair and reasonable". At pp.815-816 his Lordship said: "It would not be accurate to describe such a decision as an exercise of discretion. But a decision under any of the provisions referred to will have this in common with the exercise of a discretion, that, in having regard to the various matters to which the modified section 55(5) of the Act of 1979, or section 11 of the Act of 1977 direct attention, the court must entertain a whole range of considerations, put them in the scales on one side or the other, 27. and decide at the end of the day on which side the balance comes down. There will sometimes be room for a legitimate difference of judicial opinion as to what the answer should be, where it will be impossible to say that one view is demonstrably wrong and the other demonstrably right. It must follow, in my view, that, when asked to review such a decision on appeal, the appellate court should treat the original decision with the utmost respect and refrain from interference with it unless satisfied that it proceeded upon some erroneous principle or was plainly and obviously wrong." In Antonovic v Volker (1986) 7 NSWLR 151 the New South Wales Court of Appeal referred to Lord Bridge's approach. The New South Wales case arose out of the Contracts Review Act 1980 of that State, which statute permits a court to avoid a contract where it finds that it is "unjust in the circumstances relating to the contract at the time it was made". Counsel for the appellant had conceded that the Court of Appeal should treat the matter as if it involved a review of a discretionary judgment but Samuels JA, with whom Kirby P agreed, thought that this concession was wrong. His Honour referred to what had been said by Lord Bridge and noted the similarity of language used in the United Kingdom and New South Wales legislation. At pp.155-156 his Honour went on: "I have set out that part of the speech of Lord Bridge in George Mitchell in which his Lordship invoked a mode of review ordinarily adopted in cases of discretion because the decision before him was one in which it was impossible to say that one view was demonstrably wrong and the other demonstrably right. Depending upon what one means by the use of the word 'demonstrably' in relation to what are essentially questions of fact, the same assessment may apply to a variety of judicial decision making. But I can see no reason why matters of evaluation should be regarded as especially immune from appellate review. If this approach were rigorously 28. applied, the corollary would be that all determinations of questions of negligence would fall into the same favoured category. The late F C Hutley dealt with this matter in a perceptive article 'Appeals within the Judicial Hierarchy and the Effect of Judicial Doctrine of such Appeals in Australia and England' (1976) 7 Sydney Law Review 317 in the course of which, referring to Lovell v Lovell (1950) 81 CLR 513, a case about the custody of a young female child, he said (at 327): .-..'The court is by statute enjoined to treat the welfare of the child as paramount, and though it involves the weighing of many diverse factors and engages the judge's emotions to an unusual degree ... welfare is an objective fact or is at least as objective a fact as the courts have usually to pronounce on. What is welfare may involve a value judgment of a peculiarly intractable kind, but this is not a reason for leaving the decision to the individual judge, but the opposite.' Later (at 329) he deprecated the regression 'to the isolated doom of the soothsayer', which was not calculated to help the law, and pointed out that 'the question of value needs the levelling effect of more than one mind'. As Lord Denning MR pointed out in Ward v James {1966} 1 QB 273 at 294 certainty or predictability in law requires courts 'to set out the considerations which should guide the judges in the normal exercise of their discretion'. I agree with these opinions. The dispensing power presented by s 7 of the Act is a recent and comparatively novel provision. It has come into force at a time when the conceptual basis of the law of contract is under examination ... and the doctrine of unconscionability as a means of limiting the enforceability of contractual rights is being teviewed ... Because of this climate, and because of the nature of the provision and the length to which it might reach, it is more than usually important that appellate courts should offer guidance about its potential scope and the conditions of its exercise. The problems concerning the circumstances in which such a provision should be applied emphasise the importance of the consequentialist argument about judicial decision making, that 29. a judge's decision is (and ought to be) 'commonly determined by a consideration of the effect which the grounds of his decision may produce as a general law or rule ...': John Austin, Lectures on Jurisprudence, Lecture 37 n In the present case the question for the Court is whether the dismissal of the appellant was "harsh, unjust or unreasonable". These words, as much as those considered in George Mitchell and in Antonovic, require a process of judicial evaluation of proved facts. But, for the reasons stated by Samuels JA, we see no merit in conferring upon that evaluation a special immunity from appellate review. Of course, there will be cases in which the trial judge's assessment of the credit and personality of a party or of a witness has played a major role in his or her ultimate evaluation of reasonableness. Such cases stand apart. As in any other case which depends upon an assessment of a witness, an appellate court will be slow to reverse the conclusion of the trial judge: see Srunskill v Sovereign Marine & General Insurance Co Limited (1985) 59 ALJR 842. But where the final decision depends upon the court's evaluation of uncontroverted facts, there appears to be no reason to decline to apply the general principles discussed in Warren v Coombes (1979) 142 CLR 531. The better view, in our opinion, is that the principles applying to the review of discretionary judgments have no application to this Court's consideration of whether the learned judge at first instance was correct in holding that the dismissal of the appellant was not harsh, unjust or unreasonable. 30. We would add, however, that, in the present case, it would make no difference to the result if the approach outlined by Lord Bridge were applied. That approach concedes the entitlement of an appellate court to set aside the trial judge's evaluation where it appears that the trial judge has proceeded upon an erroneous principle. With respect, this 15 such a case. Here, the trial judge acknowledged that the officers of the respondent should have been aware of the possibility of the re-instatement of Mr Gregory in the ETU, but he placed reliance upon the fact that Mr Gregory did not indicate on 16 October any hope or intention of overturning the decision of the State Council. He commented: "Had he outlined some course of this nature, a question might have arisen whether it was unfair, harsh, unjust or unreasonable on the part of the respondent to dismiss him prior to such course being undertaken." This approach denies the need for adequate consultation and places upon the employee the onus of considering alternatives to dismissal. As we have indicated, such an approach is erroneous in principle. The effect of breach of the award: penalty Our finding that the dismissal of Mr Gregory was harsh, unjust and unreasonable necessarily leads to the conclusion that it constituted a breach of cl.6(d)(vi) of the Metal Industry Award. Section 119 of the Conciliation and Arbitration Act provides for the imposition of a penalty for breach of an award. We think that a penalty ought to be imposed. In assessing the amount of that penalty regard must 31. be had to the circumstance that the maximum penalty that may be imposed by the Court for a breach of an award is only $1,000 -- a figure which has remained unchanged since 1970 and which is so low as to have little deterrent effect. Although we have held that the respondent acted harshly, unjustly and unreasonably, it cannot be said that its action stands high on the scale of possible breaches of an award. The company was confronted with a difficult industrial situation, not of its own making. Moreover, the breach we have found was of a novel award prescription, the application of which had not yet been considered by the courts. The company did seek legal guidance before proceeding to dismiss Mr Gregory. In all the circumstances, and particularly having regard to the maximum penalty provided by s.119(1D) of the Act, it appears to us that it is appropriate to impose a penalty in the sum of $400. The effect of s.119(2) and s.120 of the Conciliation and Arbitration Act, read together, is to give to the Court a discretion as to whether the amount of the penalty shall be paid into the Consolidated Revenue Fund or to the appellant as the applicant in this proceeding. Although we are of the opinion that the appellant did suffer personal damage as a result of the breach, we are also of the view that it is within the power of the Court to award damages -- over and above any penalty -- for that breach. It would be a duplication to order that, in addition to damages, the appellant have the benefit of the penalty. Consequently, the penalty should be paid into Consolidated Revenue. 32. The effect of the breach upon Mr Gregory's employment The contractual consequences of the respondent's breach of cl.6(d)(vi) depend, in the first instance, upon the question whether the requirement of that paragraph constituted a condition of the contract of employment between Mr Gregory and Philip Morris. Obviously, the requirement was not a condition of the contract as at the date of its formation. The contract long antedated the insertion into the award of cl.6(d)(vi). But the appellant argued that the arrangement between the parties was that Mr Gregory's employment should be governed, subject to any inconsistent express provision, by the terms of the relevant award, as those terms might be from time to time. Consequently, upon the insertion into the award of cl.6(d)(vi), the terms of that paragraph were incorporated as part of the contract of employment. There is no evidence in this case of any express agreement between Mr Gregory and Philip Morris for the incorporation into their contract of employment of the terms of the award, as they might be from time to time. But it seems to us that there are two bases upon which it might be said that the contract of employment included the terms of the relevant award, as in force from time to time. It has long been recognized that an employee is entitled to sue at law to recover the moneys payable to him or her under an award, notwithstanding that no independent express agreement has been made about those moneys: see 33. Mallinson v Scottish Australian Investment Company Limited (1920) 28 CLR 66. As we understand it, that is because the award provision imports a term into the contract of employment independently of the intention of the parties; see Amalgamated Collieries of WA Ltd v True (1938) 59 CLR 417 per Dixon J at p.431). Similarly Windeyer J in Regina v Gough; ex parte Meat and Allied Trades Federation of Australia (1969) 122 CLR 237 at p.246 described the award provision as operating to "create new rights as between master and servant superimposed on the common law incidents of their relationship". The second basis for holding that the provisions of the award were part of the contract of employment, in the present case, is that an agreement to that effect ought to be implied. The evidence shows that Mr Gregory was interviewed to ascertain his suitability for the position at Philip Morris, but it is not suggested that, either at this interview or at any other time prior to the commencement of his employment, he had any detailed discussion with officers of Philip Morris as to the terms of his employment. There is certainly no evidence that anything was said about the grounds on which his employment might be terminated or the period of notice of termination to be given on either side. Yet the parties did intend to create a contract of employment under which each would undertake obligations towards the other. At the time there was in existence an industrial award governing the industry in which Mr Gregory was to be employed and which conferred benefits upon persons working in his proposed 34. classification. That award contained a detailed and comprehensive code of rights and obligations including a prescription headed "Contract of Employment" which provided, inter alia, for termination of employment by a week's notice on either side subject only to a right in the employer to dismiss summarily any employee for malingering, inefficiency, neglect of duty or misconduct -- see eg (1977) 191 CAR 598 at p.604. We cannot doubt that, if at the time of the interview which led to his employment, Mr Gregory and the interviewer had been asked whether it was intended that the award would govern the terms of the contract into which he and Philip Morris proposed to enter, subject to any express agreement as to terms more beneficial to Mr Gregory, each would have unhesitatingly answered in the affirmative. Moreover, each would have known that industrial awards are subject to frequent variation. Each would have affirmed an intention that variations of the award should operate automatically to vary the contract of employment accordingly. In BP Refinery (Westernport) Pty Limited v President, Councillors and Ratepayers of Shire of Hastings (1978) 52 ALJUR 20 at p.26 the majority of the Judicial Committee of the Privy Council identified five conditions which must be satisfied before a term may be implied into an agreement: "(1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that 'it goes without saying'; (4) it must be capable of clear expression; (5) it must not contradict any 35. express term of the contract". It seems to us that each of these conditions is met in the present case. There can be no question about conditions (1), (4) and (5). As to condition (2), the position would appear to be that, absent an implied term incorporating into the contract of employment the provisions of the award as they might be from time to time, the contract would lack content on matters as fundamental, and important to both parties, as hours of work and wages and the grounds and notice on which the contract could be terminated. As to condition (3), the company was, in any event, bound by the award. In the absence of any express agreement giving Mr Gregory additional or different rights in connection with matters covered by the award it must go without saying that both parties intended by their silence that their contract should incorporate the provisions of the award as in force from time to time. The consequence of our view that the contract of employment incorporated the terms of the award, as they might be from time to time, is that the respondent's breach of the award, in dismissing the appellant, was also a breach of its contract with him. There is no evidence that this breach was accepted by the appellant. Under these circumstances, counsel for the appellant submits that the contract remains on foot, so that Mr Gregory retains his status as an employee of Philip Morris and is entitled to recover wages for the period which has elapsed since the expiration of the five weeks allowed in the payment of wages in lieu of notice until the present time. However, it seems to us that this is not a correct analysis of 36. the position. Whether or not a contract of employment may be terminated by fundamental breach, without acceptance of the breach -~ as to which see Turner v Australasian Coal and Shale Employees' Federation (1984) 6 FCR 177 at pp.189-191, London Transport Executive v Clarke (1981] ICR 355, Gunton v Richmond-upon-Thames London Borough Council [1981] Ch 448 and Irani v_ Southampton and South-West Hampshire Health Authority [1985] IRLR 203 at pp.206-207 -- it is clear law that the remedy available to a wrongfully dismissed employee is damages, not wages as such: see Automatic Fire Sprinklers Pty Limited v Watson (1946) 72 CLR 435 at p.465, Francis v The Municipal Councillors of Kuala Lumpur [1962] 1 WLR 1411 at p.1417. We shall return to consider the proper measure of damages after dealing with the question whether the Court has power, under its accrued jurisdiction, to grant relief in respect of a breach of the contract of employment; and after considering the submission of the appellant that an order in the nature of specific performance should be made. The accrued jurisdiction of the Court It is now well settled that the conferment upon this Court of jurisdiction to determine a particular matter empowers the Court to consider all claims arising out of that matter. For this purpose the word "matter" has the meaning it bears in ss8.75-78 of the Constitution: a single justiciable controversy. The jurisdiction of the Court is not confined to 37. Claims arising under federal law, but extends to claims under State law. The critical question always 1s whether the claim arises out of the same "matter" as that which attracts the jurisdiction of the Court. Thus, one example of the same matter giving rise to a non-federal claim and a federal claim occurs where both arise out of a common substratum of facts: see Fencott v Muller (1983) 152 CLR 570 at pp.607-609. That is the present case. The complaint made by Mr Gregory is that he was dismissed by Philip Morris in breach of c1.6(d)(vi) of the award. The "matter" between the parties, that is the justiciable controversy, 15 whether this complaint can be made out. If it can, two consequences flow: Philip Morris is exposed to a penalty under s.119 of the Conciliation and Arbitration Act (the federal claim) and Mr Gregory is entitled to contractual relief against Philip Morris (the non-federal claim). [It is true that, in connection with the latter question, some material may be relevant -- as to the extent of damages -- which would not be relevant to the first question. But precise coincidence of the relevant facts is not essential: see Fencott at p.607. The two claims arise out of the same substratum of facts. They constitute a single "mattec" wholly within the jurisdiction of this Court. There is no novelty about the application of the accrued jurisdiction to a proceeding brought under the Conciliation and Arbitration Act. In Kennedy v Australasian Coal and Shale Employees' Federation (1983) 78 PLR 252 Beaumont J was concerned with a claim under s.144 of that Act 38. for a declaration that the applicant was entitled to be enrolled as a member of the first respondent, a trade union. The applicant joined a second respondent, a coal producer, seeking a declaration that, at the relevant date, he was employed by that respondent. This claim did not arise out of federal law but his Honour held that both claims arose out of a single controversy, involving the question whether there existed a contract of employment, in the coal mining industry, between the applicant and the second respondent. We would hold, in the present case, that the Court has power to deal with all aspects of the controversy between the appellant and the respondent, including the claims by the appellant for specific performance and for damages. Specific performance By para.8 of his Application the appellant sought an order "that the Respondent observe and perform the terms of its contract of employment with the Applicant by allowing him to work according to the terms of that contract". The order sought is an order in the nature of specific performance. In Francis v Kuala Lumpur at pp.1417-1418 the Judicial Committee referred to "the general principle of law that the courts will not grant specific performance of contracts of service". This was not put as a rule of law but the Committee observed that special circumstances will be required before a court exercises its discretion to make such 39. an order. Despite recent judicial criticism of the assumptions underlying the general principle referred to in Francis -- see C H Giles Co Ltd v Morris [1972] 1 WLR 307 at pp.318-319 and Turner v Australasian Coal and Shale Employees' Federation at pp.192-193 -- the claim is made in Meagher, Gummow and Lehane "Equity ~ Doctrines and Remedies" (2nd ed) at para.2011 that "one may search in vain for a reported case in which equitable relief would have compelled the maintenance of a personal relationship or the performance of personal services (except where they are of a minor nature and an incidental part of a contract otherwise specifically enforceable ...)". In Ridge v Baldwin [1964] AC 40 at p.65 Lord Reid went so far as to say that "There cannot be specific performance of a contract of service". In Chappell v The Times Newspapers Ltd [1975] 1 WLR 482 at p.50, Lord Denning MR treated the decision in Hill v Cc A Parsons & Co Ltd (1972) Ch 305 as being an exception to the general principle, but the relief granted in Hill was not really of specific performance. The order of the court was merely to restrain the employer from treating as valid a particular notice of dismissal. The invalidation of that particular notice was important to the plaintiff. In any event, the case was unusual because, as Lord Denning pointed out in Chappell "both employers and Mr Hill had complete confidence in one another". The notice of dismissal had been given under pressure from a trade union. Likewise in Irani, another "exception" relied upon by the present appellant, the injunction went to restrain the employer only from 40. implementing a dismissal notice before carrying out the disputes procedure laid down in the plaintiff's conditions of service. The order sought in the present case does not relate to a particular notice of dismissal. It is designed to compel the respondent to restore its previous relationship with the appellant. The order falls into the category which is subject to the general principle referred to in Prancis. We do not regard that principle as immutable. As was suggested in Turner, it may be that, under modern conditions and in connection with large employers, the circumstances which gave rise to the general principle will not apply. We would not wish to give any endorsement to the view that there may never be an order in the nature of specific performance of a contract of employment. But the making of such an order is a matter within the discretion of the Court. Where such an order is sought, careful consideration must always be given to the likely consequences of the order. The evidence in the present case suggests that industrial difficulties would occur if Mr Gregory were now to be re-employed. Each of the traditional reasons for denial of specific performance -- a loss of confidence between the parties and the problem of supervision of the relationship -- applies in this case. In the exercise of the Court's discretion, an order for specific performance ought to be refused. 41. By way of an alternative to specific performance, the appellant seeks a declaration that his employment was not lawfully terminated. There are circumstances in which the making of a declaration upon such a matter may serve a useful purpose; for example, where some ancillary benefit can thereby be obtained. But in this case, if specific performance is refused, the making of a declaration will not achieve any useful purpose. We bear in mind what was said by Barwick CJ and Jacobs J in Neeta (Epping) Pty Limited v Phillips (1974) 131 CLR 286 at p.307: "Unless the parties are agreed on the consequences which flow from a declaration that such a contract has or has not been validly rescinded it is generally undesirable that the court should so declare without any orders for consequential relief." That comment was made about a contract for the sale of land. It seems to us that it applies even more strongly to a case where a contract of employment has been breached in circumstances of industrial tension. Damages It follows from the observations already made that, in our opinion, the only remedy available to the appellant in relatioA to the respondent's breach of contract is an award of damages. The quantification of those damages presents major difficulties. It is a task upon which we would have welcomed the assistance, by way of findings of fact, of the trial judge. But, because of the view he took upon liability, it was unnecessary for his Honour to address this problem. We did canvass with counsel the possibility of sending the 42. matter back to the trial judge for the assessment of damages, if the Court were of the opinion that damages should be awarded. However, neither counsel sought that course, apparently because of the delay and expense which it would entail. The material relevant to damages, such as it was, is before us and we have reached the view that the proper course is for us to make our own assessment of an appropriate figure. In saying that, we frankly concede that the assessment which we must make cannot be justified by reference to any detailed calculation. The only course which we can take is to select a figure which, as an exercise of judgment, appears to us fairly to reflect the matters relevant for consideration. In principle, the assessment of damages involves a comparison of Mc Gregory's position, as it was after his dismissal, with the position in which he would have been placed if he had not been wrongfully dismissed. But there are major uncertainties -- which could not be resolved by further evidence -- in each aspect of this comparison. As to Mr Gregory's existing position, we know that he did not work from the date of his dismissal on 17 October 1986 until the trial in mid-May 1987. After allowing for the five weeks' payment in lieu of notice, this represents a loss of wages for a period of about six months. There are substantial variations in the pay slips in evidence, but the impression we gain from them is that Mr Gregory's earnings, including overtime, were of the order, on average, of about $600 per week or $31,200 per year. These are, of course, gross figures. For the financial year 1986-1987, tax on an income 43. of $31,200, ignoring personal deductions, would have amounted to about $9,530; on $15,600 it would have been about $2,940. Thus the loss of six months wages at $600 per week amounts to a loss of post tax income of $12,660. However, it would not be correct merely to take $12,660 as the amount of wages lost by Mr Gregory. On the one hand, at the time of the trial Mr Gregory had not yet found alternative employment. At the hearing of the appeal Mr Gregory's counsel pressed the claim for specific performance, Mr Gregory apparently being willing to return to Philip Morris. So he may then have still been unemployed, more than twelve months after his dismissal. But, on the other hand, and in the view we take, Mr Gregory is entitled only to damages and this entitlement is subject to a duty to mitigate his damage. Mr Gregory is entitled to recover damages only in respect of such period after his dismissal as was reasonably required for him to find suitable alternative employment. Evidence was called by the respondent from Mr D R Logan, an officer of the Department of Employment and Industrial Relations, to show that, at the date of the trial, there were 130 notified vacancies for A grade electricians throughout the whole of Victoria. In the Melbourne metropolitan area there were about 90-100 vacancies but only seven of these vacancies were within the south and south-eastern suburbs of Melbourne; to which area, in a practical sense, Mr Gregory would probably be confined. Mr Logan agreed that there was sometimes a variance between what the statistics would suggest and a person's actual experience in looking for a job. This could 44, cut either way. He also agreed with the general proposition that older people have more difficulty than younger ones in finding employment; although he thought this to be less true of tradesmen than of unqualified workers. Upon the basis of this evidence, and bearing in mind that Mr Gregory had been dismissed from his previous job under circumstances of dispute with his union, Mr Gregory may have experienced considerable difficulty in finding suitable alternative employment. It seems not unreasonable, therefore, to assume a delay of at least six months. A further aspect of the matter of damages is that Mr Gregory received a wage at Philip Morris which was higher than that usual for electricians in other factories. The evidence is scanty, but it suggests that the difference may be close to $100 per week. If Mr Gregory had continued at Philip Morris until he turned 65 years of age, he would have had the benefit of this differential for about 17 years. And he would have received substantial superannuation payments, the amount of which it is not possible for us, upon the evidence, to quantify. Bearing these matters in mind, if this were a case in which it could be said that, absent the present breach, Mr Gregory would have been likely to retain his position for the remainder of his working life, the appropriate amount of damages might be upwards of $100,000. However, the case cannot be determined upon that basis. Apart from the usual vicissitudes of life and employment, Mr Gregory had special problems. If Philip Morris 45. had not dismissed Mr Gregory on 17 October, it would not necessarily have followed that he would have remained with the company for the rest of his working life, or for any lengthy period. He was in conflict with the majority of the ETU members on the site. If he had not been dismissed, the State Council may not have been prepared to concede the invalidity of its expulsion decision, the validity of which was not investigated at the trial. Alternatively, fresh charges free of any procedural defect may have been laid. Those charges may have resulted in a fresh decision to expel Mr Gregory. If, ultimately, there had been a valid resolution for his expulsion, Philip Morris would have had little alternative but to terminate Mr Gregory's employment. Even if there had been no change in Mr Gregory's position in relation to membership, it does not follow that Mr Gregory would have been able to retain his employment. Considerable ill-feeling remained. It is possible that the majority of the ETU members would have continued to refuse to work with him and that Philip Morris would have been forced to dismiss hin. The unknown factors in this case are significant. All that may be said is that, on 17 October 1986, there remained major obstacles to Mr Gregory's long term employment by Philip Morris. Those obstacles were so significant that the figure of "upwards of $100,000", which we have mentioned, must be heavily discounted. After taking into account all of the matters to which we have referred, we select the figure of 46. $30,000 as being an appropriate sum to award by way of damages. Having in mind the nature of the damage sustained, we do not think that it is appropriate to add any amount for pre-judgment interest. I certify this and the forty-five (45) preceding pages to be a true copy of the Reasons for Judgment of their Honours Justice Wilcox and Justice Ryan. nesociate,/(foonty fobee Date: 14°April 198 Counsel for the Applicant: Mr P Harris Solicitors for the Applicant: Howie & Maher Counsel for the Respondent: Dr C Jessup Solicitors for the Respondent: Mallesons Stephen Jaques Date(s) of hearing: 16, 17 and 18 November