IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI 94/2741R B E T W E E N : MICHAEL SLIFKA Applicant AND J. W. SANDERS PTY LIMITED Respondent JUDGE: North J PLACE: Melbourne DATE: 19 December 1995 REASONS FOR JUDGMENT THE PROCEEDINGS On 20 December 1994, the applicant applied under s.170EA of the Industrial Relations Act 1988 ("the Act") for a remedy in respect of the alleged termination of his employment. The proceedings came before me by way of a review, under s.377(1) of the Act, of the decision of the Judicial Registrar. THE BACKGROUND The respondent conducted a business in South Oakleigh as a wholesale supplier to the electrical trade. It was a small but successful company employing between 4 and 8 people. It had been in operation for 32 years. Mr James Sanders was a director and ran the business of the respondent. The applicant commenced employment with the respondent on 20 February 1978. He was employed as a salesman for most of his time with the respondent. On 14 October 1994 he worked for the respondent for the last time. The events which gave rise to him not returning to his job are the concern of this proceeding. THE ISSUES A remedy may only be given under s.170EA(1) in respect of a termination of employment. Section 170EA(1) forms part of Division 3 of Part IVA of the Act. By operation of s.170CB of the Act, the expression "termination of employment" bears the same meaning in s.170EA(1) as in the Termination of Employment Convention. Article 3 of the Termination of Employment Convention provides that the expression means "termination of employment at the initiative of the employer". The parties have conducted the review on the basis that there has been a termination of employment and the primary issue is whether it was at the initiative of the employer. The applicant bears the onus of proof on this issue. Further, the case was conducted on the basis that, if the Court found that the termination was at the initiative of the employer, and that a remedy should be granted, the remedy of compensation rather than reinstatement should be granted. The applicant contended that such compensation should be greater than the amount ordered by the Judicial Registrar. The respondent contended that the amount should be less than the amount ordered by the Judicial Registrar. It was accepted by the parties that, if the termination was at the initiative of the employer, the termination was in contravention of Division 3 within the meaning of s.170EE(2) of the Act. THE COURSE OF EVIDENCE Both the applicant and Mr Sanders gave oral evidence before me. In the course of the evidence in chief of Mr Sanders, evidence was led of a conversation on 4 November 1994 between Mr Sanders and a Mr Sturgess, who was the solicitor for the applicant at the time. The questions sought to elicit an admission that the applicant was confused in the instructions that he gave to his solicitor about the terms of the agreement reached. No such allegations had been put to the applicant in cross-examination. Without objection from the respondent, I permitted the applicant to reopen his case and call Mr Sturgess. As will become apparent, the resolution of this case largely depends on the impression I gained of Mr Sanders in the witness box. The evidence of Mr Sturgess was helpful in confirming the impressions I formed. He did not give evidence before the Judicial Registrar. Often the parties to a review agree to use the evidence before the Judicial Registrar as evidence on the review, and often this is done without further evidence being adduced on the review. In some circumstances such a course is economical and appropriate. Where there is directly conflicting evidence and the demeanour of each of the central witnesses is very important, as in the present review, reliance on the transcript before the Judicial Registrar is inappropriate. I now turn to the main issue. WAS THE TERMINATION OF THE EMPLOYMENT OF THE APPLICANT AT THE INITIATIVE OF THE RESPONDENT? Introduction In most cases the words "at the initiative of the employer" need no elaboration or explanation. They have a readily understandable ordinary meaning. When an employer gives an express notice of termination there is usually no debate. It is clear that the termination was at the initiative of the employer. Where the employee gives an express notice of termination there is similarly usually no debate. The termination was at the initiative of the employee. In the present case neither party gave an express notice. In view of all the actions of Mr Sanders in October and November 1994, the applicant concluded that the respondent would not have him back to work after 28 November 1994. Consequently, he did not return to work. Did he jump or was he pushed? He must establish his case, and he must do so on the balance of probabilities. Mr Sanders says that the applicant jumped because, both before and after 28 November 1994, Mr Sanders gave written assurances to the applicant that he could return to work on 20 February 1995, and Mr Sanders says that his other actions were no more than understandable responses to provocative behaviour by the applicant. These other actions did not evince an intention to terminate the employment. Mr Sanders' responses were directed solely to a dispute over long service leave, and, as such, the applicant could not reasonably take them as terminating the employment. The applicant himself determined not to return to work after 28 November 1994. The fact that his act finally brought an end to the employment does not make the termination of employment at his initiative if his final act was the result of a chain of events and the chain of events was initiated by the respondent. Moore J gave the converse example of a dismissal by an employer which was not at the employer's initiative because it was preceded by misconduct of the employee: see Grout v Gunnedah Shire Council 1 IRCR 143 at 160-161. His Honour determined whether the termination was at the initiative of the employer by asking whether the steps taken by the employer "effectively terminated" the employment. The passage at 160-161 in Grout was adopted recently by the Full Court in Mohebatullah Mohazab v Dick Smith Electronics Pty Ltd (Full Court of the Industrial Relations Court, 28 November 1995, unreported). In Mohazab the Full Court said, at 10‑11: "It accords with the purpose of the Convention to treat the expression 'termination at the initiative of the employer' as a reference to a termination that is brought about by an employer and which is not agreed to by the employee. Consistent with the ordinary meaning of the expression in the Convention, a termination of employment at the initiative of the employer may be treated as a termination in which the action of the employer is the principal contributing factor which leads to the termination of the employment relationship." An alternative test - the law The respondent submitted that the proper approach to determining whether the termination was at the initiative of the employer is to apply the test used to ascertain whether there has been a termination of a contract of employment at common law. In Western Excavating (E.C.C.) Ltd v Sharp [1978] ICR 221 at 226, Lord Denning MR stated the test which he described as the "contract" test as follows: "If the employer is guilty of conduct which is a significant breach going to the root of the contract of employment, or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract, then the employee is entitled to treat himself as discharged from any further performance. If he does so, then he terminates the contract by reason of the employer's conduct. He is constructively dismissed." The Court of Appeal applied the test in the interpretation of the statutory definition of "unfair dismissal" in paragraph 5(2)(c) of Schedule 1 of the Trade Union and Labour Relations Act 1977, which included the circumstance where: "the employee terminates that contract, with or without notice, in circumstances such that he is entitled to terminate it without notice by reason of the employer's conduct." It preferred the "contract" test to the "unreasonableness" test. The latter test required the employer to act reasonably in the treatment of employees. If the treatment was so unreasonable that the employee could not be expected to put up with it any longer, the employee was justified in leaving. The employee could leave without notice and could claim compensation for unfair dismissal. The preference expressed by the Court of Appeal depended primarily on the form of expression used in paragraph 5(2)(c), the context of the provision and its history. The Court of Appeal was also of the view that the "unreasonableness" test had proved to be too indefinite and productive of conflicting decisions and decisions based on whimsical grounds. Given the primary reasons which the Court of Appeal expressed for preferring the "contract" test, the case is not of much assistance in determining the proper approach to the interpretation of the expression "at the initiative of the employer" in s.170EA. The form of expression, the context and the history of s.170EA are quite different from the form of expression, context and history of paragraph 5(2)(c). In particular, s.170EA may well apply where the contract of employment was terminated by the employee as a result of conduct of the employer which fell short of evincing an intention not to be bound by the contract of employment. I shall return to the application of the "contract" test after considering the facts. The long service leave agreement It was long service leave which generated the controversy. The applicant became entitled to 13 weeks long service leave under the Employee Relations Act 1992 (Vic) in February 1993, after 15 years service with the respondent. According to the applicant, his long service leave was first mentioned in the course of renegotiation of his wage package in April 1994. Mr Sanders asked him what he was going to do about his long service leave and the conversation went no further. Mr Sanders said that long service leave had been discussed often in both 1993 and 1994, before September. On this issue I prefer Mr Sanders' evidence to the evidence of the applicant. It is more probable that there had been recurring discussions. It is likely that one of the parties would have raised the issue before April 1994 given that it had become due more than a year earlier. It is common ground that the matter was discussed in mid September. The applicant says he asked Mr Sanders for six weeks leave to commence on 17 October 1994 and Mr Sanders agreed. There was no discussion about the payment and the applicant expected six weeks pay at his ordinary rate. Mr Sanders says that the applicant initially asked for all 13 weeks long service leave. He agreed, and prepared a summary of the applicant's entitlements, including annual leave, which indicated a total break from 17 October 1994 to 20 February 1995 (Exhibit A1). The document had a place for the insertion of the amounts of payment for the various periods of leave but these places were left blank. Mr Sanders gave the document to the applicant, who returned it after a couple of days and did not indicate any disagreement. The applicant accepted that he received the document and accepted that he did not disagree with its contents at the time. His evidence was that he regarded it as merely a proposal. I do not accept this. The document and its return without disagreement is consistent with an arrangement for the applicant to take a break for the full period, and is inconsistent with a mere proposal. However, there was further discussion early in October. It is common ground that by 14 October, which was the last working day before the commencement of the long service leave break, there was an agreement that the applicant could take six weeks long service leave. The applicant's version was that the agreement was unchanged from mid September. I do not accept that. The evidence indicates an initial agreement to take the full period, then the acceptance of the change. Mr Sanders' evidence is that by 14 October 1994 the agreement was that the applicant could take six weeks long service leave if he chose that option, but that Mr Sanders would pay him for the full time even if he only took six weeks. In my judgment, by 14 October 1994, the agreement was that the applicant would take six weeks leave and be paid for six weeks. Here it is necessary to understand Mr Sanders' view of the matter. He had agreed to the applicant taking six weeks only. His agreement had been reluctant. He said that he thought that to take only part of the long service leave was ridiculous. In my view his concerns were for the business. It did not suit him for the applicant to be away for six weeks, then return for three weeks and then go off for Christmas. Business was slack and it suited him for the respondent to be rid of its long service leave obligation in one go. Given the number of occasions on which long service leave had been discussed, I infer that by October 1994 Mr Sanders wanted the obligation discharged. To understand the following events it is also necessary to appreciate something of the characteristics Mr Sanders displayed in the witness box. Through his evidence I formed the view that, in his dealing with the applicant, Mr Sanders was determined to get his own way, was used to getting his own way, and was liable to act adversely and strongly against any challenge to him getting his own way. He demonstrated a limited capacity to accommodate the views of the applicant. The events of 14 October 1994 On 14 October 1994, the applicant received a cheque for his long service leave pay. It was for the full entitlement and not simply for six weeks. It was calculated at the weekly rate of $628 gross and not $750 gross. The applicant approached Mr Sanders twice that afternoon for an explanation. On both occasions Mr Sanders replied "that is the way it has to be done", and he would not talk to the applicant further about it. The applicant then went for a week's holiday to Echuca as he had previously planned. In the circumstances, I infer that Mr Sanders paid the full long service leave entitlement as a means of persuading the applicant to stay on long service leave for the full period. It is probable that he expected the applicant to be tempted to stay on long service leave if full payment had been made. This was one method used by Mr Sanders to get his way. The events of about 26 October 1994 Within a day or two of his return from Echuca, on about 26 October 1994, the applicant went to see Mr Sanders at work for an explanation. He described what occurred on that day as follows: "Did you actually speak to him? --- Yes, I did. About that subject? --- Well I tried. Well you tell his Honour what happened when you raised the subject of the annual leave and the payment you had received? --- He just said that is how wage have to be done and he is too tired and it is all finished, everything is done. He just walked away from me - run away from me." (Transcript 24) In cross-examination Mr Sanders conceded that he did not find out what the applicant was talking about. Mr Sanders refused to engage in any discussion on this occasion. He said he was tired. But the applicant was on long service leave. He had specially come to work to discuss the matter. He was fobbed off. Even if Mr Sanders was so tired that he was not prepared to find out what the problem was, he could have phoned the applicant on the following working day. His refusal to discuss the matter was consistent with his efforts to have the applicant do as Mr Sanders wished. The turning point - Mr Sturgess' letter of 31 October 1994 The applicant was in a dilemma. He had an agreement for six weeks leave and six weeks pay at $750 per week. He had been given a cheque for the full 13 weeks long service leave calculated at $628 per week and had been given firm indications that although he had the option of returning after six weeks, Mr Sanders was not at all in favour of that course. And Mr Sanders would not talk to him about the problem. To break the impasse he went to see a solicitor, Mr Sturgess of MacPherson & Kelly. Mr Sturgess wrote to Mr Sanders on 31 October 1994. The letter said that it had been agreed between the applicant and Mr Sanders that the applicant would take six weeks leave. The letter then advised that it would be unlawful if the applicant returned to work and was in receipt of long service leave pay beyond the period of leave taken. It also asserted that the long service leave paid was wrongly calculated on an ordinary rate of pay of $628 per week instead of $750 per week. The letter informed Mr Sanders that the applicant had been advised to bank the cheque for the full long service leave, retain six weeks pay calculated at the weekly rate of $750 and return the balance. Mr Sanders was invited to discuss these matters by phoning Mr Sturgess if he so desired. The receipt of this letter was a turning point in Mr Sanders' attitude to the applicant. In the following four weeks Mr Sanders exhibited an increasing hostility to the applicant. The phone conversation of 4 November 1994 Mr Sanders took up the invitation in the letter by contacting Mr Sturgess by phone on 4 November 1994. Mr Sturgess gave evidence about this conversation. I found him an impressive witness. He related that, on a number of occasions during the conversation, Mr Sanders affirmed the agreement that the applicant could return to work after six weeks. Mr Sanders expressed concern about Mr Sturgess' advice as to the illegality of paying the applicant beyond six weeks if he did return after six weeks. Mr Sturgess explained to Mr Sanders that there was no legal problem if Mr Sanders simply paid the six weeks pay. This was made very clear to Mr Sanders. Mr Sanders conceded as much in his evidence. Mr Sturgess then confirmed that the applicant would return at the end of six weeks. To that Mr Sanders said that he may choose not to honour the agreement because the applicant had involved lawyers in the matter. There is an important passage in Mr Sturgess' evidence about this conversation, as follows: "The conversation very much took the bent of now that, you know, lawyers are involved, I'm not going to honour the previous agreement and the whole feel of, you know, I don't want [t]his bloke here under those circumstances. If he goes to lawyers, I don't want him as an employee. Very very much the flavour of the discussion I had with Mr Sanders." (Transcript 98) In a letter dated 16 November 1994 to Mr Sanders, Mr Sturgess confirmed the conversation of 4 November 1994 and confirmed that the applicant would return to work on 28 November 1994 after six weeks long service leave. In an effort to settle the controversy over the proper rate of pay for long service leave, Mr Sturgess advised that, "In an effort to preserve his working relationship with you," the applicant would accept the weekly rate of $628 on a without prejudice basis. Mr Sanders was not prepared to concede in his evidence that this letter was conciliatory. Reclaiming the company car and keys For all of the more than 16 years of his employment with the respondent the applicant had been provided with a car for both business and private use. It had never been taken back by the respondent. For instance, he had full use of the car during annual leave. But Mr Sanders concluded from the letter dated 31 October 1994 from Mr Sturgess that the applicant was obviously "intent on trouble". As a result, he determined to demand the return of the company car and the keys to the respondent's business premises. He explained his reason for taking back the car as follows: "Well, because Mr Slifka had taken imprudent steps by seeing a solicitor and making false claims against me." (Transcript 112) The conversation between the applicant and Mr Sanders, in which the return of the keys and car was demanded, was belligerent from Mr Sanders' side. The applicant gave evidence as follows: "Well, he just said he wants the car back and the keys and I said, 'Well, why don't you want to talk to me?'. I said, 'I'll give it back to you if you talk to me about the situation'. And he said, 'No, I can go to the police and get the car'. And I said, 'Well, I'll be back in three weeks time or four weeks time so you can have the car back then'. He said, 'No, I want it now'." (Transcript 26) Correspondence between 17 November 1994 and 24 November 1994 In a letter dated 17 November 1994 Mr Sanders wrote to the applicant, in part as follows: "Your approach to a Solicitor and the resultant information that your return to work would constitute an illegal action by both parties negates my offer of your return, but does not alter the context of your original request for L.S.L. and my agreement to same. Your attendant mischievous claims re pay rises to the order of 17% plus annual bonus of $10,000.00 is as astounding as your misrepresentations of facts to your Solicitor. In closing I express my deep regret that you have chosen this course of action that can only destroy your relations with this Company. Any further discussions will only be entered into on your return in February '95 or if you so desire through your Legal Representative." This letter reiterates the grave antagonism which Mr Sanders felt as a result of the intervention of lawyers for the applicant. He told the Court that he was very annoyed and very upset when he wrote the letter. The letter returned the cheque for the balance of the entitlement to long service leave. In a reply dated 23 November 1994, Mr Sturgess again forwarded the cheque for the balance of the entitlement to long service leave and reiterated that the applicant would return to work on 28 November 1994. In a response dated 24 November 1994, Mr Sanders wrote to the applicant returning the same cheque and saying: "Any tentative agreements re alterations to this schedule due to your subsequent change of requirement have been negated by your solicitors notification that your return to work earlier than originally agreed would be illegal. Your recommencing date in February is clearly defined and will be adhered to." The final push - 28 November 1994 Six weeks long service leave ended on 28 November 1994. The applicant returned to work on that day, as Mr Sturgess had advised Mr Sanders on 4 November 1994, and repeated in his letters dated November 16 and November 23. The first words came from Mr Sanders. He asked the applicant to leave. The applicant said he was entitled to commence work under the agreement. Mr Sanders says that he then said that "Your solicitor has declared your return to work is an illegal act, I cannot be party to it". Mr Sanders said that the applicant was a trespasser and Mr Sanders threatened to call the police. Mr Sanders said in evidence that on this day he was "very angry" with the applicant's actions. The applicant left the premises believing that the events starting in October 1994 and culminating on 28 November 1994 meant the end of his employment. Mr Sanders' purported reasons - illegality In the period between 4 and 28 November 1994, Mr Sanders did say on a number of occasions that he had been highly antagonised by the applicant consulting a solicitor. In my judgment, it was this act which finally determined Mr Sanders not to allow the applicant back to work. The applicant had attempted to challenge Mr Sanders' will, and Mr Sanders would not tolerate such challenge. The applicant had worked with Mr Sanders for over 16 years and knew him well. He assessed that his employment was not open to him after 28 November 1994. He was clearly correct in this assessment. Among other things which justified this assessment was that the two other reasons which Mr Sanders kept giving over the period as the basis for refusing the six week long service leave break were untenable, and must have been known to Mr Sanders to be untenable. He repeatedly gave as one reason that Mr Sturgess had told him that it would be illegal for the applicant to return after six weeks. Mr Sanders expressed this view in his letters dated 17 November 1994 and 24 November 1994, he told the applicant the same on 28 November 1994 and repeated the view many times in the course of his evidence. For instance, he said: "Well, in the letter of October 31, I am informed by McPherson [sic] and Kelly that I would be in breach of an Act by employing Mr Slifka while he was on long service leave. This was an unknown factor to me, and I did not wish to do anything illegal, so I had to retract my offer to Mr Slifka to return to work when he wanted to." (Transcript 89) But Mr Sturgess had told Mr Sanders on 4 November 1994 that it would not be illegal for the applicant to return to work after six weeks if he was paid only for the six weeks. Indeed, Mr Sanders conceded in evidence that Mr Sturgess had so advised him. In my view Mr Sanders latched on to Mr Sturgess' advice as a convenient way to renege on the agreement to give the applicant six weeks long service leave and six weeks pay for it. Mr Sanders purported reasons - misrepresentation of wage rate The other reason given by Mr Sanders for his anger towards the applicant was that the applicant had misrepresented his wage rate to Mr Sturgess. The evidence concerning the applicant's wage rate was limited. The applicant gave evidence that prior to April 1994 he was paid $628 gross per week and an annual bonus at the end of the financial year. He was paid $8,900 at the end of the 1993/94 financial year by way of bonus. He negotiated an increase in salary from $628 gross per week to $750 gross per week in April 1994. In addition, it was agreed that he would receive $10,000 bonus at the end of the financial year if turnover exceeded $1,000,000. Mr Sanders said that the agreement in April 1994 was for a gross wage of $750 per week which would include a weekly pre-payment of a bonus of $10,000, payable if the turnover exceeded $1,000,000. The wages element, he said, was $528 and the bonus $220. He said that the bonus element would be repayable if the turnover target was not met. On the balance of probabilities, I accept the applicant's evidence on this matter. First, the business turnover had been volatile in the past. Bonus payments dependent on turnover targets had been agreed but not paid because the turnover targets had not been met. It is inherently improbable that a bonus would be paid weekly in advance if it was possible that it would have to be repaid. Second, in the previous year the bonus had been paid in a lump sum at the end of the financial year and not by way of weekly prepayment. Third, prior to April 1994, the applicant's salary was $628 gross plus bonus. If it was to be $528 gross plus bonus after April 1994, the applicant would have suffered a reduction in wages. Neither Mr Sanders nor the applicant suggested that a reduction was agreed. Finally, the long service leave cheque paid to the applicant was not calculated on the basis of the $528 gross wage which Mr Sanders contended for. It was calculated on the basis of a gross wage of $628. No explanation was given for this figure. A weekly wages record from 6 July 1994 was kept by Mr Sanders and was tendered in evidence. A column headed "Salary or Hourly Rate" showed the figure $528, the next column headed "Overtime and Allowances" showed a figure of $222, the next column headed "Total Earnings" showed the figure $750 and a column headed "Tax" showed $220. This record does not displace the evidence of the applicant and the considerations referred to in the previous paragraph. It is inconsistent with the actual payments made of $628 per week for the period of long service leave. If the overtime and allowance column figure is meant to reflect a pre-payment of the $10,000 bonus, then it overstates the amount by about $30 per week. Further, the record was not signed by the applicant, even though there was a provision for the signature of the employee on the record. Mr Sanders' purported reasons - conclusions Consequently, in my view, the applicant did not misrepresent the position about his wage rate to Mr Sturgess. Neither would it have been illegal for Mr Sanders to honour the agreement concerning the taking of six weeks long service leave. The assertions of Mr Sanders that the applicant had misrepresented the amount of his wages, and that Mr Sanders could not honour the agreement concerning long service leave because it would be illegal, were responses by Mr Sanders reflecting his grave displeasure at the applicant's resort to a solicitor. Mr Sanders refused to acknowledge any validity in the applicant's action in consulting a solicitor. He closed his mind to the applicant's justification for consulting Mr Sturgess. For instance, he said: "I am quite sure if he had approached me with a complaint, the complaint would have been heard and discussed, but no approach had been made and to go off half cocked by seeking legal advice over nothing was just totally unusual." (Transcript 90) This evidence was given in the face of evidence that the applicant had returned from holidays and on about 26 October 1994 tried to raise the issues with Mr Sanders, who did not even listen to ascertain the problem. Subsequent assurance of employment In a letter dated 9 December 1994, Mr Sanders wrote to the applicant that his employment had not been terminated and that the applicant was still on long service leave. The letter was written after the receipt of a letter from Mr Sturgess dated 6 December 1994 threatening unlawful termination proceedings. It was not a genuine reflection of Mr Sanders' position. It was designed to further an argument that the applicant had jumped rather then been pushed. The tenor of the letter as a whole, including its final sentence "No further correspondence will be entered into", evidences a complete breakdown in the relationship between the respondent and the applicant. An alternative test - the facts Earlier in these reasons I expressed doubt that the "contract" test is the appropriate approach to s.170EA. However, if it be the appropriate test, was it satisfied in this case? Has the applicant established on balance of probabilities that the respondent evinced an intention not to be bound by the contract of employment? Taking all the facts together, in my view, the respondent was not prepared to have the applicant return to work. In other words, the respondent did not intend to be bound by the contract of employment. The respondent argued that the only relevant evidence went to the respondent's intention to reclaim the car and the keys to the business, and to the dispute over long service leave. As to the former, it was argued, the possession of the car and keys was not pursuant to terms of the contract, but mere custody of the tools of trade. As to the latter, it was argued that the long service leave dispute did not go to the root of the contract, but to one aspect of it only. Neither of these arguments, if correct, assist the respondent in light of my finding that the respondent intended that the contract of employment as a whole should come to an end. Even if I am wrong about this, I would hold that the possession of the car was a condition of the contract of employment and that the refusal of the respondent to allow the applicant to retain the car during his long service leave, taken together with the effective refusal to allow the applicant to return to work after six weeks long service leave, amounted to evidence that the respondent no longer intended to be bound by some of the essential terms of the contract of employment. Consequently, if, contrary to the view I have expressed earlier in these reasons, the "contract" test was applicable, then it was satisfied in this case. Conclusion Having concluded that the termination of the employment of the applicant was at the initiative of the respondent, it is now necessary to consider the question of remedy. COMPENSATION Section 170EE(2) The Judicial Registrar found that reinstatement was impracticable. This finding was accepted by the parties before me and I agree with it. I therefore now consider, under s.170EE(2), the amount of compensation which is appropriate. Under s.170EE(3), in working out the amount of compensation for the purposes of s.170EE(2), the Court is to have regard to the sum which the applicant would have received or would have been likely to have received if the respondent had not terminated the employment. The matters relevant to the assessment of compensation in this case are as follows: (a) Loss of wages from the date of termination of employment to the date of hearing There are 48 weeks between the date of termination on 28 November 1994 and the last day of the hearing on 27 October 1995. For the seven weeks between 28 November 1994 and 16 January 1995, the applicant was not employed and did not receive any earnings. For the five weeks between 16 January 1995 and 19 February 1995, he was employed by BDL Electrical Wholesalers at $505 gross per week. He therefore earned $2,525 gross in that period. For the remaining 36 weeks, from 20 February 1995 to 27 October 1995, he was employed by MCI Electrical Wholesalers at $625 gross per week. He therefore earned $22,500 gross in that period. Thus, for the entire period from 28 November 1994 to 27 October 1995, he earned $25,025 gross. Had the applicant remained in employment with the respondent, he would have earned wages amounting to $750 gross per week. That is a total of $36,000 gross for the 48 weeks period. The shortfall in gross wages for the period amounts to $10,975. (b) Shortfall in long service leave payment The payment for 13 weeks long service leave was made to the applicant based on a calculation of wages at the rate of $628 gross per week. The calculation should have been at the rate of $750 gross per week. Consequently, there was a short payment of $122 gross per week, a total of $1,586 for the 13-week period. (c) Loss of bonus payment due on 30 June 1995 On the evidence of the applicant, which I have accepted, he would have been entitled to a lump sum bonus of $10,000 at the end of June 1995 if the turnover of the respondent had reached or exceeded $1,000,000. As there is no evidence whether this level of turnover was attained, no compensation for this element has been established. (d) Loss of wages after 27 October 1995 The renegotiation of the applicant's wage package in April 1994 was based on an expectation by both the applicant and the respondent that the applicant would continue to work for the respondent until he turned 60 in July 1998. Without the applicant's assurance that he would stay with the respondent for the next 3-4 years, the respondent would not have purchased a new car in 1994 for the use of the applicant. I infer that there was a very high probability that the applicant would have remained employed by the respondent until at least July 1998 if he had not ceased employment on 28 November 1994. At the time of the hearing, the difference between the applicant's actual gross weekly wage of $625 and the gross weekly wage of $750 he would have earned from employment with the respondent was $125 gross per week. On the basis that the applicant would probably have worked for the respondent for another 2˝ years after 27 October 1995, the total difference in gross wages amounts to $16,250. (e) Loss of bonuses after 27 October 1995 The somewhat sketchy history of the payment of bonuses by the respondent showed that the necessary turnover target figures were reached in some years but not in others. There was some volatility in the industry. I also take into account that the applicant did not lead evidence as to whether the turnover budget was achieved in the 1994-5 financial year. In assessing compensation, and balancing all these factors, I infer that a bonus probably would have been earned in at least one of the remaining financial years 1996, 1997 or 1998. $10,000 compensation should be allowed for a bonus payment in one of the three years. (f) Loss of company car The applicant gave evidence that he was to keep the company car on his retirement. This benefit was to flow to the applicant because he was a very long serving employee. It is very unlikely that such a benefit will become available to him in respect of his employment over the next four years. However, the evidence was extremely scanty on this aspect. It was not clear whether the retention of the car was to be on conditions or not. The evidence was given in passing and the loss of this benefit was not put forward by the applicant as an item for compensation. In these circumstances, I make no allowance for the possible loss of this benefit. (g) Loss of ongoing long service leave Under s.51 of the Employee Relations Act 1992 (Vic), if the applicant had continued employment with the respondent he would have continued to accrue long service leave after 15 years employment. By the end of a further four years service with the respondent the applicant would have become entitled to nearly five weeks long service leave. In his new employment, the applicant's entitlement to long service leave only commences after 15 years service. Therefore, termination of his employment with the respondent has deprived him of this benefit. Five weeks long service leave at the gross weekly wage rate of $750, which the applicant was receiving at termination, amounts to $3,750. (h) Reduction for contingencies The items considered in paragraphs (a), (b), (d), (e) and (g) as appropriate for compensation fall into two categories. The items referred to in paragraphs (a) and (b) relate to the past and are capable of precise assessment. The items referred to in items (d), (e) and (g) relate to future losses and depend on the uncertainties of the future. In relation to the loss of wages after 27 October 1995 (paragraph (d)), the existing significant differential between the applicant's current actual earnings and the earnings he would have received from continued employment with the respondent may well reduce in the remaining 2˝ years. Although the applicant's wages have not increased in the last 12 months, there is some chance that the longer he remains in employment the more likely an increase in wages becomes, with a consequent reduction in the differential. The applicant was a very experienced employee in the electrical wholesaling trade. This experience should prove valuable to his new employer. Of course, against this must be balanced the chance that he will lose his current job and find it difficult to obtain a new one. In relation to the items referred to in paragraphs (d), (e) and (g), some allowance should be made for the contingency that the applicant may not have served the whole of the remaining 2˝ years as an employee of the respondent, for reasons such as ill health, lawful termination by the respondent, voluntary resignation, or closure of the respondent's business. None of these contingencies should attract a high allowance. Finally, some allowance should be made for the fact that some part of the compensation will be received up to 2˝ years earlier than if the applicant had completed his employment with the respondent. In all the circumstances, it appears to me that an appropriate reduction for contingencies relating to the future is 25%. As the total of the items referred to in paragraphs (d), (e) and (g) is $30,000, a reduction of 25% brings these items to a total of $22,500. (i) The impact of taxation Awards of compensation under s.170EE(2) and awards of damages under s.170EE(5) are eligible termination payments within the definition contained in s.27A(1) of the Income Tax Assessment Act 1936. This is because they are payments made in consequence of the termination of the employment of the taxpayer: Atlas Tiles Ltd v Briers (1978) 144 CLR 202 at 224; Reseck v Federal Commissioner of Taxation (1975) 133 CLR 45. Eligible termination payments may be tax free or may attract tax at special rates up to 30% of the amount of the payment. The factors which govern the applicable rate include the age of the recipient, the source of the payment, and whether the payment exceeds a specified dollar threshold: see especially s.159SA of the Income Tax Assessment Act 1936. In the present case, the evidence on these factors demonstrates that tax will be payable on the award at the rate of 15% of the award. The evidence of the rate at which the respondent deducted PAYE tax also allows me to infer that if the applicant had not been unlawfully terminated and would have earned the amounts of income referred to in paragraph (h), such income would have been subject to income tax at the rate of approximately 28% of the sum received. The question therefore arises whether the incidence of taxation should be taken into account at all in these circumstances and, if so, in what way. The objective of an award of compensation is to compensate the applicant for what he has actually lost. In this case, in respect of the incidence of taxation, the objective is best achieved by a two step process. The first step should be to reduce the gross amount of lost earnings to exclude income tax which will not be paid. The next step should be to increase the net amount so obtained sufficiently to allow for payment of tax on the award. This approach will compensate the applicant for the actual loss he suffered from the unlawful termination. The alternative is to award the gross amount of lost earnings without deduction for the income tax which will not now be payable. Where, as here, the rate of tax on the lost earnings at about 28% would be almost double the rate of tax on the award at 15%, the applicant would be compensated beyond the loss he suffered if the award were calculated on the basis of gross earnings. The income tax which would have been payable by the applicant on the lost earnings of $35,061, the calculation of which is detailed later in these reasons, would have been $9,817. The tax payable on the award calculated on net earnings would be $4,455. If the applicant were compensated on the basis of gross earnings he would receive an allowance of $9,817 for tax while he would have to pay tax of only $4,455. He would be over compensated by $5,362. Again the basis of calculation of these figures is set out later in these reasons. In my view, the authorities support the proposed approach. In British Transport Commission v Gourley [1956] AC 185, the House of Lords determined that an award of damages for loss of earnings in a personal injuries case should be assessed exclusive of income tax. That was a case in which the earnings would have been subject to income tax, and the award would not have been subject to taxation. The principle upon which this decision was based was expressed by Lord Reid at 212 as follows: "A successful plaintiff is entitled to have awarded to him such a sum as will, so far as possible, make good to him the financial loss which he has suffered and will probably suffer as a result of the wrong done to him for which the defendant is responsible." In Atlas the trial judge awarded the plaintiff in a wrongful dismissal case damages for lost earnings based on loss of gross earnings, that is, without any deduction for income tax payable. He regarded Gourley as establishing that the total non-taxability of the award of damages was a precondition for the award being calculated on the basis of net earnings. He then held that Gourley did not apply because 5% of the award was taxable under s.26(a) of the Income Tax Assessment Act 1936. A majority of the High Court held that Gourley should not be applied in Australia. In separate dissenting judgments, Gibbs J (as he then was) and Stephen J held that the Gourley principles should apply to awards of damages for lost earnings in wrongful dismissal cases. They held that the Gourley principles required the plaintiff to receive no more than compensation for the actual loss suffered. Where part of the award was taxable, the principle required modified application. The award should reflect the fact that income tax was not payable on the lost earnings, but tax was payable on part of the award. Gibbs J said at 227: ".... it seems to me that the principle in Gourley's Case should be applied in assessing damages for wrongful dismissal in Australia, notwithstanding that five per cent of the award will be taxable. As I have already said, I consider that, in general, the principle applies only where the damages are not taxable, and this would be so even if the tax payable on the award were considerably less than the notional tax on the lost earnings. But where only a small fixed proportion of the award is subject to tax, it would be manifest that a plaintiff would receive more than was necessary to compensate him for the loss caused by his wrongful dismissal if his damages were assessed on the footing of his gross earnings, when all of those earnings would have been subject to tax. The reasons underlying Gourley's Case in my opinion require that in such a case the court should assess damages on the basis of the net earnings which represented the plaintiff's real loss, but should adjust the result by taking account of the fact that a proportion of the award will bear tax. The proper approach is, I consider, along the lines suggested in Stewart v Glentaggart Ltd (1963 SLT 119), but it is not necessary, as a matter of law, to say more than that in making the assessment the court must take into account both the fact that if the contract had not been broken the respondent would have had to pay tax on his earnings, and that he will now have to pay tax on five per cent only of the damages awarded." and Stephen J said at 235-6: "McInerney J concluded that the operation of s.26(d) upon five per cent of the award of damages was sufficient wholly to exclude the principle of Gourley's Case; he regarded the second alleged condition precedent as not having been satisfied. The respondent, in supporting this view, contended that it is enough that the damages awarded are taxable subject-matter. It does not matter that a great part of them will not, in fact, be included in assessable income. Thus, so long as the damages fall within the purview of the taxing legislation, as it is said that they do by reason of s.26(d), the principle in Gourley's Case is inapplicable. In my view it is not these so-called conditions precedent but, rather, a judicious blend of principle and expediency that must determine when, in the assessment of damages, the incidence of taxation is to be taken into account by the application of the principle in Gourley's Case. In that blend the principle in question is that damages should be no more than compensatory, the expediency is concerned with the degree of added complexity which attainment of that principle may involve. It is easy to imagine a particular taxing provision the effect of which, if not taken into account in the process of assessment, will nevertheless have but little effect upon attainment of the desired goal of just compensation. In such a case the added complexity involved in taking tax into account may outweigh the relatively slight gain in fairness of compensation. Section 26(d), however, is not such a taxing provision; the contrast between tax on earnings and tax upon only five per cent of damages is likely to be marked and should be taken into account in the process of assessment if the compensatory character of damages is to be retained. The so-called conditions precedent with which Gourley's Case has come to be associated find no place in their Lordships' speeches in that case itself, they are no more than working rules judicially deduced from that decision as it operated in the then-existing pattern of United Kingdom revenue laws. They were, no doubt, well suited to that pattern of taxation, at least as it existed before the introduction of ss. 37 and 38 of the Finance Act 1960, but are quite unsuited to the wholly different problem posed by a provision such as s.26(d). To regard them in any different light is to erect into rules of law working guides to the proper application of an important principle in the assessment of damages and to do so in disregard of the very principle itself. In saying this I am, in effect, adopting the reasoning of Lord Hunter in Stewart v Glentaggart (1963 SLT, at 122) with which, with respect, I fully agree. If effect is, then, to be given to the principle in Gourley's Case against the background of s.26(d) and if the aim is to award damages which will as nearly as possible fairly compensate for economic loss measured in net, after tax, terms, the first step will be to estimate in net terms the plaintiff's loss due to his wrongful dismissal, applying the rate of tax appropriate to what would have been his taxable income, including income from other sources, but for his dismissal. This done, the damages to be awarded, after taking into account any adjustment for contingencies or discount for present payment if applicable, will be such a sum as will leave that amount of net loss in the plaintiff's hands after five per cent has borne tax at the rate of tax applicable to the plaintiff, again taking account of income from other sources. Thus the award will seek to represent net loss plus tax on five per cent of that loss." In Cullen v Trappell (1980) 146 CLR 1, the High Court reconsidered its decision in Atlas. Gibbs J adhered to his dissenting opinion and did not elaborate on the aspect presently under consideration. Stephen, Mason and Wilson JJ agreed with the views expressed by Gibbs J in Atlas. Section 26(a) of the Income Tax Assessment Act 1936, which had the effect of rendering 5% of awards of damages for wrongful dismissal subject to income tax, has been repealed. The effect of the replacement provisions contained in Subdivision AA of Part III of the Income Tax Assessment Act 1936 on the issue whether gross or net earnings are the proper basis upon which to award damages for wrongful dismissal was considered by Gray J in Wheeler v Philip Morris Ltd (1989) 97 ALR 282. He accepted that Cullen established that where damages for lost earnings were claimed in a personal injury case, net earnings was the proper basis for the award, if the earnings lost would have been subject to income tax but the award was not subject to income tax. He then held that under Subdivision AA of Part III of the Income Tax Assessment Act 1936, the damages for wrongful dismissal were taxable as an eligible termination payment. Consequently, he said, the reasoning in Cullen was inapplicable and gross earnings were the proper basis upon which to award damages. His Honour did not consider the question which is raised in this case, namely, whether any different approach is warranted where the tax on the award is very much less than the income tax on the lost earnings. This is made clear by his Honour's reference to the dissenting judgment of Gibbs J in Atlas. His Honour said at 312: "In his dissenting judgment in Atlas Tiles Ltd v Briers (CLR at 227), Gibbs J (as he then was) expressed the view that where such a small portion of an award of damages was subject to tax, the award of damages should be treated as non-taxable for the purpose of determining whether it should be assessed according to gross or net earnings." This reference is correct but it stops short of expressing the full conclusion reached by Gibbs J in Atlas. Certainly Gibbs J said that damages should be assessed on the basis of earnings net of income tax, but he added at 227 that the court "should adjust the result by taking account of the fact that a proportion of the award will bear tax." I therefore take Wheeler as deciding that where the lost earnings and the award are both taxable and nothing in the evidence reveals any difference in the rate of tax applicable, the appropriate basis for the award of compensation is gross earnings. It is on this basis that Sheppard and Heerey JJ must be taken to have referred to Wheeler in Bostick Australia Pty Ltd v Gorgevski (No 1) (1992) 36 FCR 20 at 33. Further, the reference was in passing and emphasised that no submission had been put to the trial judge or to the appeal judges that gross earnings were not the proper basis for awarding damages in that case. In Byrne & Anor v Australian Airlines Ltd (1992) 45 IR 178 at 203, Hill J agreed with Gray J in Wheeler as to the basis for taking taxation into account in the assessment of damages for wrongful termination. However, the agreement was obiter because his Honour refused to award damages. In New South Wales Cancer Council v Sarfaty (1992) 28 NSWLR 68 at 79-80, Gleeson CJ and Handley JA applied the separate dissenting judgments of Gibbs and Stephen JJ in Atlas in a claim for damages for wrongful dismissal. Their discussion proceeds on the basis that there was a difference in the amount of tax payable on lost earnings and on the amount of the award. Their Honours refer to the relevant provisions of the Income Tax Assessment Act 1936 as providing for awards to be taxed on a "concessional basis", they quote passages in Atlas which refer to the different tax treatments of lost earnings and of the award of damages, and they refer to Gill v Australian Wheat Board (1980) 2 NSWLR 795, also on the point of the substantial difference in tax rates on the lost profits and the award of damages in that case. Thus, in my view, Wheeler and Sarfaty are not inconsistent. Wheeler deals with the situation where there is no evidence that the award will be taxed at a lesser rate than the lost earnings. Sarfaty deals with the situation where the tax liability on the lost earnings would have been much greater than the tax liability on the award of damages. The objective of compensating an applicant for actual loss is achieved in the former situation by assessing damages by reference to loss of gross earnings, and in the latter by reference to net earnings plus an allowance for tax payable on the award. In Grout v Gunnedah Shire Council (1995) 129 ALR 372, Moore J had to determine whether the compensation payable to the applicant under s.170EE of the Act should be assessed on the basis of the applicant's net income or gross income. The respondent relied on the judgments of Gleeson CJ and Handley J in Sarfaty to submit that the net earnings should be used and then an allowance made for tax payable by the applicant on the award as an eligible termination payment. Moore J stated the respondent's submission and his conclusion at 374: ".... the respondent relied upon the joint judgment of Gleeson CJ and Handley J in Sarfaty, supra. The applicant submitted that judgment concerned not whether the approach in Cullen, supra, of calculating damages by reference to net income should continue to be applied notwithstanding the amendments to the Tax Act made since 1980, but rather whether damages calculated by reference to net income should then be increased to allow for tax payable on the damages. Their Honours decided they should. It is clear, in my opinion, that unlike in Wheeler and Byrne their Honours did not address the antecedent question of whether damages should be calculated by reference to gross or net income because the parties appeared to have assumed that the net income was the relevant amount. The trial and appeal were conducted on that basis." I do not agree that in Sarfaty Gleeson CJ and Handley J did not address the antecedent question of whether damages should be calculated by reference to gross or net income. Their Honours, at 79-80, quoted from the dissenting judgments of Gibbs and Stephen JJ in Atlas. The quotations deal both with the antecedent question and then proceed to discuss the need to gross up the allowance for the reduced tax payable on the award. In my view, Sarfaty dealt with a different situation from the situation with which Gray J dealt in Wheeler. Consequently, it was unnecessary to select one line of authority in preference to the other. Rather, the question is one of identifying whether the case involves a difference in tax rates between lost earnings and the award, or not. If it does, the Atlas approach applies; if it does not, the Wheeler approach applies. Consequently, the calculation of the incidence of taxation in this case is as follows: Loss of wages to date of hearing (paragraph (a)) $10,975 Shortfall in long service leave payment (paragraph (b)) $ 1,586 Items referred to in paragraphs (d), (e) and (g) reduced for contingencies (paragraph (h)) $22,500 $35,061 Less 28% allowance for income tax which would have been payable $ 9,817 $25,244 Plus an allowance for tax at the rate of 15% payable on the award for compensation $ 4,455 $29,699 _______ If I am wrong in concluding that Wheeler and Atlas dealt with different situations, I would apply the Atlas approach because it best achieves the objective of compensating the applicant for the actual loss incurred. (j) The compensation cap under s.170EE(3)(a) Section 170EE(3)(a) provides for the relevant limit on the amount of compensation which may be awarded under s.170EE(2) in this case. Such compensation may not exceed the amount of remuneration that would have been received by the applicant in respect of the period of six months after the date of termination. The applicable rate is the rate of remuneration received immediately before the termination took effect. That rate was $750 gross per week. For the six month period after the termination the applicant would have earned $19,500 gross wages from employment with the respondent at that rate. Remuneration for the purposes of s.170EE(3)(a) would include the amount of any bonus payable to the applicant and at least private use value of the car provided by the respondent: see Christine May v Lilyvale Hotel Pty Limited (Industrial Relations Court of Australia, 1 December 1995, unreported, Wilcox CJ).However, the evidence does not satisfy me that the applicant would have received the bonus in the 1994-95 financial year. The bonus was payable if the turnover of the respondent reached or exceeded $1,000,000. It was open to the applicant to lead evidence before me regarding the turnover of the respondent for the 1994-95 financial year. In the absence of such evidence I am unable to find that a bonus of $10,000 would have formed part of the applicant's remuneration at the relevant time. The evidence in relation to the value of the provision of a car for private use was also deficient. The applicant led no evidence as to the remuneration value of the car. While it is clear that there is a private use value of the car, the Court is unable to guess the amount of such value in the absence of evidence. Consequently, in assessing the compensation cap applicable under s.170EE(3)(a), the evidence permits me to take into account only the remuneration by way of wages amounting to $19,500. Conclusion The economic loss suffered by the applicant as a result of the unlawful termination amounts to $29,699. However, by operation of the compensation cap under s.170EE(3)(a), the award may not exceed $19,500. Consequently, under s.170EE(2), there will be an order that the respondent pay the applicant compensation in the sum of $19,500. Section170EE(5) The applicant should also receive damages under s.170EE(5) based on five weeks' pay in lieu of notice. Again, the award of damages should be calculated by reducing the gross wages by 28% to allow for income tax which will not be paid and then adding an allowance for the 15% tax payable on the award as an eligible termination payment. Consequently, the damages under this head will be $3,176. CONCLUSION The applicant has established an entitlement to compensation under s.170EE(2) in the sum of $19,500 and damages under s.170EE(5) in the sum of $3,176. The total sum is well in excess of the amount ordered by the Judicial Registrar. This flows at least in part from the fact that the hearing before me was a hearing de novo and included evidence not before the Judicial Registrar. The award is also in excess of the amount sought by counsel for the applicant. After referring to a number of the elements which should be taken into account in determining the level of compensation, he submitted that $12,000-$15,000 was the appropriate figure. This estimate was not the subject of any analysis. In this case the items which were appropriate for compensation were capable of fairly precise calculation. More attention should have been given to formulating the appropriate amount of compensation by reference to the evidence because, when this is done, it can be seen that an award of $15,000 would under-compensate the applicant in a significant way. The respondent contended that, if the Court concluded that the termination was at the initiative of the employer, and that compensation should be awarded, the proper approach was to view the contravention in this case as a technical contravention and, consequently, to award compensation at the low end of the scale. It seems to me that such an approach is misconceived. Once an entitlement to compensation is established and the loss is economic and can be broadly calculated by reference to defined categories of loss, the appropriate compensation will be the economic loss suffered by the applicant as a result of the contravention. I agree with Moore J in Harold Malcolm Bean & Anor v Milstern Retirement Services Pty Ltd (Industrial Relations Court of Australia, 2 June 1995, unreported), in which he said: "The provisions of s.170EE which enable compensation to be ordered are not intended to punish an employer for contravening the Act on the basis that a less serious contravention should attract a small amount of compensation while a more flagrant contravention should attract a greater amount of compensation. The purpose of s.170EE(3) is to compensate an employee for the unlawful termination though plainly the subject matter of the statutory provision that is found to have been contravened may be relevant." In any event, the circumstances of the contravention in this case, as I have detailed earlier in these reasons, do not persuade me that the contravention is properly described as technical or that the applicant should receive less than the economic loss that he has suffered as a result of the contravention limited as required by s.170EE(3)(a). I certify that this and the preceding thirty-nine (39) pages are a true copy of the reasons for judgment of his Honour Justice North. Associate: Dated: 19 December 1995 Solicitors for the applicant: MacPherson & Kelly Counsel for the applicant: Mr P. Misso Solicitors for the respondent: Gabriel & Co Counsel for the respondent: Mr B. Shaw Dates of hearing: 23, 24 and 27 October 1995 Date of judgment: 19 December 1995 IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI 94/2741R B E T W E E N : MICHAEL SLIFKA Applicant AND J. W. SANDERS PTY LIMITED Respondent MINUTE OF ORDERS JUDGE: North J PLACE: Melbourne DATE: 19 December 1995 THE COURT: 1. Orders that the orders made by JR Millane on 8 June 1995 be set aside. 2. Declares that the applicant's employment was terminated at the initiative of the respondent on 28 November 1994 in contravention of s.170DE of the Act. 3. Orders that the respondent pay the applicant compensation under s.170EE(2) of the Act in the sum of $19,500. 4. Orders that the respondent pay the applicant compensation under s.170EE(5) of the Act in the sum of $3,176. NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules. C A T C H W O R D S INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - termination at initiative of the employer - CONSTRUCTIVE TERMINATION - contract test for constructive termination - acts constituting termination - COMPENSATION - approach to calculation of compensation - TAXATION - taxation payable on award - principles applicable where tax rate on award is lower than tax on lost earnings Employee Relations Act 1992 (Vic) s.51 Income Tax Assessment Act 1936 ss.27A(1), 159SA Industrial Relations Act 1988 ss. 170CB, 170DE, 170EA, 170EE(2), (3) and (5) Atlas Tiles Ltd v Briers (1978) 144 CLR 202 British Transport Commission v Gourley [1956] AC 185 Christine May v Lilyvale Hotel Pty Limited (Industrial Relations Court of Australia, 1 December 1995, unreported) Cullen v Trappell (1980) 146 CLR 1 Gill v Australian Wheat Board (1980) 2 NSWLR 795 Grout v Gunnedah Shire Council (1994) 1 IRCR 143 Grout v Gunnedah Shire Council (1995) 129 ALR 372 Harold Malcolm Bean & Anor v Milstern Retirement Services Pty Ltd (Industrial Relations Court of Australia, 2 June 1995, unreported) Mohebatullah Mohazab v Dick Smith Electronics Pty Ltd (Full Court of the Industrial Relations Court, 28 November 1995, unreported) New South Wales Cancer Council v Sarfaty (1992) 28 NSWLR 68 Reseck v Federal Commissioner of Taxation (1975) 133 CLR 45 Western Excavating (E.C.C.) Ltd v Sharp [1978] ICR 221 Wheeler v Philip Morris Ltd (1989) 97 ALR 282 MICHAEL SLIFKA -v- J. W. SANDERS PTY LIMITED No. VI 94/2741R Before: North J Place: Melbourne Date: 19 December 1995