The contract of employment [1 ed.] 9780409331233, 0409331236

Citation preview

The Contract of Employment Mark Irving B Juris, LLB (UNSW) Member of the Victorian Bar

LexisNexis Butterworths Australia 2012

For Kate Manton

AUSTRALIA ARGENTINA AUSTRIA BRAZIL CANADA CHILE CHINA CZECH REPUBLIC FRANCE GERMANY HONG KONG HUNGARY INDIA ITALY JAPAN KOREA MALAYSIA NEW ZEALAND POLAND SINGAPORE SOUTH AFRICA SWITZERLAND TAIWAN UNITED KINGDOM

LexisNexis LexisNexis Butterworths 475–495 Victoria Avenue, Chatswood NSW 2067 On the internet at: www.lexisnexis.com.au LexisNexis Argentina, BUENOS AIRES LexisNexis Verlag ARD Orac GmbH & Co KG, VIENNA LexisNexis Latin America, SAO PAULO LexisNexis Canada, Markham, ONTARIO LexisNexis Chile, SANTIAGO LexisNexis China, BEIJING, SHANGHAI Nakladatelství Orac sro, PRAGUE LexisNexis SA, PARIS LexisNexis Germany, FRANKFURT LexisNexis Hong Kong, HONG KONG HVG-Orac, BUDAPEST LexisNexis, NEW DELHI Dott A Giuffrè Editore SpA, MILAN LexisNexis Japan KK, TOKYO LexisNexis, SEOUL LexisNexis Malaysia Sdn Bhd, PETALING JAYA, SELANGOR LexisNexis, WELLINGTON Wydawnictwo Prawnicze LexisNexis, WARSAW LexisNexis, SINGAPORE LexisNexis Butterworths, DURBAN Staempfli Verlag AG, BERNE LexisNexis, TAIWAN LexisNexis UK, LONDON, EDINBURGH

USA LexisNexis Group, New York, NEW YORK LexisNexis, Miamisburg, OHIO National Library of Australia Cataloguing-in-Publication entry Author: Title: Edition: ISBN: Notes: Subjects: Dewey Number:

Irving, Mark. The contract of employment. 1st edition. 9780409331226 (pbk). 9780409331233 (ebook). Includes index. Labor contract — Australia. Labor laws and legislation — Australia. 344.9401

© 2012 Reed International Books Australia Pty Limited trading as LexisNexis. This book is copyright. Except as permitted under the Copyright Act 1968 (Cth), no part of this publication may be reproduced by any process, electronic or otherwise, without the specific written permission of the copyright owner. Neither may information be stored electronically in any form whatsoever without such permission. Inquiries should be addressed to the publishers. Typeset in Futura and Sabon. Printed in China. Visit LexisNexis Butterworths at www.lexisnexis.com.au

Preface The publication in 1976 of Professor Mark Freedland’s concise masterpiece, The Contract of Employment, marked a watershed in employment law scholarship. It showed how general contractual principles are applied to the employment contract. This text is guided by Professor Freedland’s systematic approach and aims to provide a comprehensive description of the common law governing the contract of employment in Australia. The contract of employment remains a significant institution in common law countries, perhaps as legally important as the concepts of agency and limited liability of companies. Many have charted its waning influence as work relationships change, and some have predicted its demise. But for centuries it has proved remarkably adaptive and, on past experience, will continue to evolve to meet society’s demands. The dawn of the twenty-first century is an exciting time in the long history of the law in this field. The common law is in the midst of resolving a series of key issues, including the question of what an employer promises to give an employee in exchange for the work he or she performs. The answer to this fundamental question affects a series of subsidiary issues discussed in detail throughout this text, such as whether an employee is entitled to be provided with work, the availability of coercive relief, and what damages a dismissed employee can recover. Courts are still working out the role of good faith and the operation of the implied term of trust and confidence. Another key issue is the legacy left by the contract’s history. The contract of employment emerged in the nineteenth century from the unification of several distinct legal categories, including menial servants, labourers, apprentices and journeymen, and superior servants. Some of the tensions and more intractable problems that currently exist in this field are the product of that fusion. Over the last few decades the law governing the contract of employment has moved further away from its historical roots and closer to a model that coheres with the general principles of contract law. This shift raises two important questions: to what extent will the law of employment continue to reflect and be shaped by its historical development; and how will

the general principles of contract law be modified to respect the distinctive features of employment? These issues are addressed throughout this text. The people who have helped me write and prepare this book for publication are too numerous to catalogue here. Craig Dowling, Peter Fary, Warren Friend SC, Charles Gunst QC, Melinda Richards, Max Spry and Ted Woodward SC all read draft chapters and made helpful suggestions to attempt to save me from the more egregious errors. I would also like to express my gratitude to Associate Professors Sean Cooney and Dr Matthew Harding for their assistance. I also thank the many others who provided guidance to me over the years, including the former members of Level 8 of Douglas Menzies Chambers and Level 1 of Owen Dixon Chambers West. I have, over the last decade, been greatly assisted by researchers including Martin Bower, Patrick Gordon, Alicia di Pedro, Lucy Tehan and Maria Azzurra Tranfaglia. I particularly want to thank Eleanor DeMarzi for her work on the employer’s duty of care in Chapter 8. I have been the beneficiary of a free public education system at all stages of my life. I thank the men and women who implemented this cornerstone of our liberal democracy and hope that it continues, or is revived, to benefit others. Judicial contributions are rarely acknowledged, but they should be. Australia has been blessed with judges who have performed a great service to the development of the law of employment. I fear that acclaiming Australian judges who still hold office would be obsequious. Of those who have recently retired, the former Justices Michael Moore, Donnell Ryan, David Ashley and David Bleby deserve special mention for managing to leaven their meticulousness and immense learning with empathy and a recognition of the human dimension of employment law. In the United Kingdom the academic and judicial corpus of Sir Patrick Elias stands as a monument to scholarship and perspicacity. There are some intellectual debts I owe to creditors I know only slightly or only through their writing. They include Professors Mark Freedland, Douglas Brodie, Adrian Brooks, Greg McCarry and John Carter, and Justices Paul Finn and Dyson Heydon. There are a series of excellent Australian texts by learned and insightful authors about aspects of employment law and labour law in general. It was easier to survey the landscape by standing on their shoulders. This acknowledgement would be incomplete without confessing my indebtedness to Professor Breen Creighton, Professor Richard Johnstone, Professor

Richard Mitchell, Associate Professor Jill Murray, Richard Naughton, Professor Rosemary Owens, Professor Marilyn Pittard, and the many authors of Macken’s Law of Employment, past and present. Three others deserve special mention. Though he is now the elder statesman of Australian labour law, for decades Professor Ron McCallum has occupied a singular and deserved position at the apex of that field. The humanity of his academic achievements should be saluted. Through her extensive writing over the last decade Professor Joellen Riley has earned the title of visionary. Since this is a text about the law as it now stands, it does not fully acknowledge her contribution in this field. Professor Andrew Stewart knows more about the law governing the contract of employment than any writer in Australia. He has written the best article on many of the topics covered by this book and they stand as an enduring endowment of knowledge bequeathed to those who work in this domain. I thank you all. When referring to authorities I have attempted to isolate the exact paragraph or page that is relied on. It is inevitable that in the course of doing so some errors have crept in. I hope I can rely on the charity of my readers to bring any errors to my attention through . Law books are not novels. Although there are extensive cross references throughout the text, those who intend to read this book from cover to cover should be warned that there is some repetition. I want to thank the staff at LexisNexis Butterworths, particularly Annabel Adair, Geraldine MacLurcan and Philippa Huxley. Susie Reichwald typed some of the corrections to the manuscript — I thank her for her persistence. Members of my family, friends and the esteemed players of the Burnley CYMS CC have listened patiently to my complaints about writing this book and celebrated the minor milestones I have reached along the way. I thank you all for your friendship and support. I have missed too many evenings and weekends with Felix and Isaac, my gorgeous sons, as I laboured over this volume. I promise I will make it up to you. Finally and most importantly, I want to thank my partner, Kate Manton, for her unstinting support. I appreciate that not many other partners would have been so supportive of a husband who decided to take a year off work as he pursued a dream of writing a book. I would never have finished this text

without her encouragement. Words cannot fully express the depth of my gratitude for all you have done.

Table of Cases References are to paragraphs

A A v B (a company) [2003] QB 195 .… 7.132 A v Hayden (No 2) (1984) 156 CLR 532; 56 ALR 82 .… 4.24, 4.26, 7.120, 7.131, 7.133, 7.134, 16.38 A Buckle & Son Pty Ltd v McAllister (1986) 4 NSWLR 426 .… 16.12, 16.30, 16.33, 16.36, 16.39 A Debtor, Re [1927] 2 Ch 367 .… 7.95 A Roberts & Co Ltd v Leicestershire County Council [1961] Ch 555; 2 All ER 545 .… 4.21 A Schroeder Music Publishing Co Ltd v Macaulay [1974] 1 WLR 1308; 3 All ER 616 .… 16.13, 16.28, 16.29 Abalos v Australian Postal Commission (1990) 171 CLR 167; 96 ALR 354 . … 8.66 Abbott v Women’s and Children’s Hospital Inc (2003) 86 SASR 1; [2003] SASC 145 .… 3.4, 3.5, 3.6, 6.21, 6.23, 6.24, 11.19 — v — [2004] SASC 67 .… 3.4, 3.6, 6.21, 6.23, 6.24, 11.19 Abdalla v Viewdaze Pty Ltd (2003) 122 IR 215 .… 2.5, 2.27 Aberdeen City Council v McNeill [2010] IRLR 374 .… 10.104 Abernathy v Mott, Hay and Anderson [1974] ICR 323 .… 5.69 ABK Ltd v Foxwell [2002] EWHC 9 (Ch) .… 7.49, 7.58, 7.67, 7.86 Able Tours Pty Ltd v Mann (2009) 187 IR 1; [2009] WASC 192 .… 7.7, 7.34, 7.123 — v — [2010] WASCA 59 .… 7.7, 7.34, 7.123 Abrahams v Herbert Reiach Ltd [1922] 1 KB 477 .… 14.48

Abrahams v Performing Rights Society Ltd [1995] ICR 1028 .… 11.73, 14.66, 14.98, 14.101, 14.103, 14.131, 14.133 AC Gibbons Pty Ltd v Cooper (1980) 23 SASR 269 .… 7.129, 16.49 Accident Compensation Commission v Odco Pty Ltd (1990) 34 IR 297; 95 ALR 641 .… 2.51, 3.33 Ace Insurance Ltd v Trifunovski [2011] FCA 1204 .… 2.1–2.3, 2.8, 2.10, 2.14–2.16, 2.20, 2.22, 2.23, 2.26, 5.85 Achal v Electrolux Pty Ltd (1993) 50 IR 236 .… 11.12 Acher v Fujitsu Network Communications, 354 F Supp 2d 26 (2005) .… 3.11 ACI Metal Stamping and Spinning Pty Ltd v Boczulik (1964) 110 CLR 372 . … 8.72 ACI Operations Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2000) 173 ALR 109; 96 IR 228; [2000] FCA 393 .… 15.50 Ackroyds (London) v Islington Plastics [1962] RPC 97 .… 7.113 ACT Visiting Medical Officers Association v Australian Industrial Relations Commission (2006) 232 ALR 69; 153 IR 228 .… 2.6, 2.26, 2.27, 2.32 ACTEW Corporation Ltd v Pangallo (2002) 127 FCR 1; [2002] FCAFC 325 . … 5.94 Active Leisure (Sports) Pty Ltd v Sportsman’s Australia Ltd [1991] 1 Qd R 301 .… 15.41 Adamastos Shipping Company v Anglo-Saxon Petroleum Company [1958] 1 All ER 725 .… 5.45 — v — [1959] AC 133 .… 5.45 Adami v Maison de Luxe Ltd (1924) 35 CLR 143 .… 6.10, 7.12, 7.14, 7.17, 7.28, 7.137, 10.21, 10.40, 10.48, 10.51, 10.52, 10.53, 10.54 Adams v British Airways Plc [1995] IRLR 577 .… 5.45 — v — [1996] IRLR 574 .… 5.45, 8.26 — v Charles Zub Associates Ltd [1978] IRLR 551 .… 9.56

— v Lidsell (1818) 1 B & Ald 68 .… 3.24 — v Union Cinemas Ltd [1939] 1 All ER 169; [1939] 3 All ER 136 .… 6.24, 6.38, 11.18, 11.44, 11.52, 11.58, 11.59 Adamson, Ex p (1878) 8 Ch D 807 .… 15.115 Adamson v Kenworthy (1931) 49 RPC 57 .… 6.11, 7.102, 7.103, 7.106, 7.109, 15.137 — v New South Wales Rugby League Ltd (1991) 31 FCR 242; 103 ALR 319 .… 6.45, 16.5, 16.7, 16.9, 16.10, 16.14, 16.15, 16.16, 16.19 Addis v Gramophone Co Ltd [1909] AC 488 .… 6.15, 8.44, 14.69, 14.70, 14.71, 14.75, 14.77, 14.83, 14.87, 14.88, 15.133 Addstead Pty Ltd v Liddan Pty Ltd (1997) 25 ACSR 175 .… 7.92 Adelaide Corporation v Jennings Industries Ltd (1985) 156 CLR 274; 57 ALR 455 .… 5.57 Adin v Sedco Forex International Resources Ltd [1997] IRLR 280 .… 8.29, 11.27 Administrative and Clerical Officers Association v Commonwealth and Minister for Industrial Relations (1979) 26 ALR 497 .… 5.106, 15.29 Adrema Ltd v Jenkinson [1945] KB 446; 2 All ER 29 .… 6.39 Advance Resource Services Pty Ltd v Charlton (2007) 165 IR 275 .… 2.41 Advanced Hair Studio Pty Ltd v TVW Enterprises Ltd (1987) 18 FCR 1; 77 ALR 615 .… 4.36 Advanced Realty Funding Corp v Banninck (1979) 106 DLR (3d) 137 .… 7.96 Advertiser Newspapers Pty Ltd v Industrial Relations Commission (SA) (1999) 74 SASR 240; 90 IR 211; [1999] SASC 300 .… 1.1, 6.6, 6.13, 6.15, 6.37, 6.46, 6.48, 10.2, 10.7, 10.21, 10.96, 10.97 Aequitas Ltd v Sparad No 100 Ltd (2001) 19 ACLC 1006; [2001] NSWSC 14 .… 7.95, 7.96, 7.97 Aerial Taxi Cabs Co-operative Society Ltd v Lee (2000) 102 FCR 125; 178 ALR 73 .… 16.5, 16.7

Afovos Shipping Co SA v Pagnan [1983] 1 WLR 195; 1 All ER 449 .… 10.10, 10.16, 10.32, 10.33, 10.40, 10.43, 10.44, 10.89, 11.17 African Association Limited & Allen, Re [1910] 1 KB 396 .… 11.44, 11.48, 11.50 AG Australia Holdings Ltd v Burton (2002) 58 NSWLR 464; [2002] NSWSC 170 .… 4.24, 4.26, 7.115, 7.120, 7.131, 7.132, 7.133, 7.134, 15.69, 15.134, 15.135, 16.38 AG Securities v Vaughan [1990] 1 AC 417; [1988] 3 All ER 1058 .… 2.22, 2.28, 2.31, 5.23 Agip (Africa) Ltd v Jackson [1990] Ch 265; [1992] 4 All ER 385 .… 7.98, 15.74 — v — [1991] Ch 547; [1992] 4 All ER 451 .… 15.74 AGL Victoria Pty Ltd v Lockwood (2003) 10 VR 596; [2003] VSC 453 .… 13.18 Agricultural & Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570; 251 ALR 322 .… 6.5, 9.46, 10.78, 10.96, 10.101, 11.70, 13.20 Agrokor AG v Tradigrain SA [2000] 1 Lloyd’s Rep 497 .… 10.78 AIM Maintenance Ltd v Brunt (2004) 28 WAR 357; 60 IPR 572; [2004] WASC 49 .… 7.62, 7.120, 16.38 Ainsworth v Criminal Justice Commission (1992) 175 CLR 564; 106 ALR 11 .… 11.34, 15.93, 15.102, 15.106, 15.108 Air Canada v Lee [1978] ICR 1202 .… 6.20, 6.23, 6.48, 10.90, 10.94 Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd (1981) 146 CLR 249 .… 15.118 Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309 .… 3.6, 3.7, 3.44, 3.46, 5.13, 5.14, 5.24, 11.12 Airfix Footwear Ltd v Cope [1978] ICR 1210 .… 8.63 Airlie v City of Edinburgh District Council [1996] IRLR 516 .… 5.41, 5.44, 6.7 Ajax Cooke Pty Ltd v Nugent (1993) 5 VIR 551 .… 3.8, 3.12, 5.99, 5.105,

6.25, 6.26, 6.33, 6.34, 13.8 Ajax Insurance Co Ltd v Smith (1962) 79 WN (NS) 83 .… 3.58, 3.59, 14.132, 14.134, 14.135 Akmeemana v Murray (2009) 190 IR 66; [2009] NSWSC 979 .… 5.11, 5.42, 5.94, 6.8, 10.75, 14.47 Albion Automotive Ltd v Walker [2002] EWCA 946 .… 5.78 Albrighton v Royal Prince Alfred Hospital [1980] 2 NSWLR 542 .… 2.13 Alcan Extrusions v Yates [1996] IRLR 327 .… 6.39 Alcatel Australia Ltd v Scarcella [1998] 44 NSWLR 349 .… 8.28, 8.29, 8.31, 8.33 Alder v Moore [1961] 1 All ER 1 .… 14.134 Aldersea v Public Transport Corporation (2001) 3 VR 499; 183 ALR 545; [2001] VSC 169 .… 5.49, 8.29, 14.34, 14.77, 14.78, 14.79, 14.83, 14.94 Alderson v St Columba-Kingswood College (2004) 135 IR 27 .… 6.37, 6.42 Alexander v Cambridge Credit Corporation Limited (1987) 9 NSWLR 310 . … 14.17, 14.23 — v Rayson [1936] 1 KB 169 .… 4.31 — v Standard Telephones & Cables Plc (No 1) [1990] ICR 291 .… 11.16, 15.10, 15.37, 15.46 — v — (No 2) [1991] IRLR 286 .… 5.36, 5.40, 5.44, 5.45, 5.97 — v Webber [1922] 1 KB 642 .… 7.94, 7.97 ALHMWU v Home Care Transport Pty Ltd (2002) 117 FCR 87; 115 IR 249; [2002] FCA 497 .… 13.18 — v Terranora Country Club Pty Ltd (1996) 19 ACSR 687 .… 13.18 Ali v Christian Salvesen Food Services Ltd [1997] 1 All ER 721; [1997] ICR 25 .… 5.56 — v Southwark London Borough Council [1988] ICR 567 .… 10.93, 11.15, 15.35, 15.39, 15.40 Alidair Ltd v Taylor [1978] ICR 445 .… 10.20

Allen v Allen (1954) 55 SR (NSW) 75 .… 8.35 — v Clarence Senior Citizens Centre (1996) 65 IR 164 .… 2.17, 2.41 — v Flood [1898] AC 1 .… 11.43 — v Gold Reefs of West Africa Ltd [1900] 1 Ch 656 .… 2.38 Allert v Grabowski (1988) 48 SASR 196 .… 13.23 Alliance Paper Group Plc v Prestwich [1996] IRLR 25 .… 16.36 Allied Express Transport Pty Ltd v Anderson (1998) 81 IR 410 .… 7.22 Allied Marine Transport v Vale do Rio Doce Navegacao SA [1985] 1 WLR 925; 2 All ER 796 .… 3.25 Allied Mills Industries Pty Ltd v Trade Practices Commission (1981) 55 FLR 125 .… 7.133 Allison v Clayhills (1907) 97 LT 709 .… 7.69 Allison v Tenix Defence Pty Ltd (2002) 112 IR 171 .… 3.73 Allman v Teletech International Pty Ltd (2008) 178 IR 415; [2008] FCA 1820 .… 13.5, 13.7, 14.127 Allphones Retail Pty Ltd v Hoy Mobile Pty Ltd [2009] FCAFC 85 .… 10.104 Almond Investors Ltd v Kualitree Nursery Pty Ltd [2011] NSWCA 198 .… 10.21, 10.90, 10.104 Alperton Rubber Co v Manning (1917) 86 LJ Ch 377 .… 15.135 Al-Safin v Circuit City Stores Inc (2005) 394 F 3d 1254 .… 5.42 Amalgamated Collieries of WA Ltd v True (1938) 59 CLR 417 .… 5.37, 5.85, 5.94 — v — (1940) 62 CLR 451 .… 5.85, 5.94 Amann Aviation Pty Ltd v Commonwealth (1990) 22 FCR 527; 92 ALR 601 .… 8.32, 10.20, 10.92, 11.16, 11.25 Amber Size and Chemical Co Ltd v Menzel [1913] 2 Ch 239 .… 7.128, 7.129, 16.49 Amcor Ltd v Construction, Forestry, Mining and Energy Union [2003]

FCAFC 57 .… 5.85 — v — (2005) 222 CLR 241; 214 ALR 56; 138 IR 286 .… 3.5, 3.7, 5.11, 13.3, 13.4, 13.6 AMEC Engineering Pty Ltd v Shanks (2001) 128 IR 116; [2001] SASC 257 . … 5.10 American Colortype Co v Continental Colortype Co, 188 US 104 (1913) .… 6.42 American Cyanamid Co v Ethicon Ltd [1975] AC 396; 1 All ER 504 .… 15.41, 15.78, 15.79, 15.82, 15.83 AMEV Finance Limited v Artes Studios Thoroughbreds Pty Limited (1989) 15 NSWLR 564 .… 14.134 AMEV-UDC Finance Limited v Austin (1986) 162 CLR 170; 68 ALR 185 . … 14.131, 14.134, 14.135 Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd (1973) 133 CLR 288; 1 ALR 385 .… 16.2, 16.7, 16.8, 16.9, 16.11, 16.12, 16.13, 16.14, 16.16, 16.18, 16.28 Amos v Commissioner for Main Roads (1983) 6 IR 293 .… 14.132, 14.134 AMP Services Ltd v Manning [2006] FCA 256 .… 7.34, 7.44, 7.81, 7.84, 8.42, 10.104, 11.72, 15.116, 15.130, 16.7 An Indenture, Re; Marshall & Sons Ltd v Brinsmead & Sons Ltd (1912) 106 LT 460 .… 11.19 Andar Transport Pty Ltd v Brambles Ltd (2004) 217 CLR 424; 206 ALR 387 .… 2.34, 8.34, 8.56, 8.61, 8.70 Andersen v Umbakumba Community Council (1994) 126 ALR 121; 56 IR 102 .… 11.38, 13.11 Anderson v Bowles (1951) 84 CLR 310 .… 14.115 — v Director-General of Education [1978] 2 NSWLR 423 .… 11.31 — v Douglas & Lomason Company, 540 NW 2d 277 (1995) .… 3.11, 5.40, 5.42, 11.44 — v Pringle of Scotland Ltd [1998] IRLR 64 .… 5.40, 5.45, 13.8, 11.16,

15.11, 15.17, 15.20, 15.22, 15.37, 15.75 Andonovski v Park-Tec Engineering Pty Ltd (2009) 191 IR 250 .… 2.46, 2.48 Andreevski v Western Institute Student Union Inc (1994) 58 IR 195 .… 3.44 Angel-Honnibal v Idameneo (No 123) Pty Ltd [2003] NSWCA 263 .… 4.11, 14.135, 16.8 Angus & Coote Pty Ltd v Render (1989) 16 IPR 387 .… 7.34, 7.58 ANI Corporation Ltd v Celtite Australia Pty Ltd (1990) 19 IPR 506 .… 7.127 Annetts v McCann (1990) 170 CLR 596; 97 ALR 177 .… 11.34 Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd [1967] VR 37 . … 7.11, 7.48, 7.56, 7.58, 7.83, 7.86, 7.118, 7.122, 7.123, 7.127, 7.128, 7.129, 15.69, 15.120, 15.134, 15.135, 16.44, 16.45, 16.46, 16.48 Ansett Australia Ground Staff Superannuation Plan Pty Ltd v Ansett Australia Ltd (2002) 174 FLR 1; [2002] VSC 576 .… 13.3, 13.21 Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots (1989) 95 ALR 211 .… 7.3, 7.84 — v — [1991] 1 VR 637 .… 5.40, 5.95, 5.101, 7.3, 7.84 — v Commonwealth (1977) 139 CLR 54; 17 ALR 513 .… 3.68, 8.33, 14.37 — v Wardley (1980) 142 CLR 237; 28 ALR 449 .… 11.50 Antocks Lairn Limited v I Bloohn Limited [1972] RPC 219 .… 2.34, 7.110 Antoniak v Commonwealth (1962) 4 FLR 454 .… 8.74 ANZ Executors and Trustees Co Ltd v Qintex Australia Ltd [1991] 2 Qd R 360 .… 3.67 Aparau v Iceland Frozen Foods Plc [1996] IRLR 119 .… 6.19, 6.20 APESMA v Skilled Engineering Pty Ltd (1994) 122 ALR 471; (1994) 54 IR 236 .… 9.58, 10.43, 11.64, 14.38, 15.20 Appellant v Respondent (1999) 89 IR 407 .… 7.138, 7.139, 7.140, 7.141 Appleby v Dods (1807) 8 East 300; 103 ER 356 .… 9.26, 9.31

— v Johnson (1874) LR 9 CP 158 .… 3.20 — v Myers (1867) LR 2 CP 561 .… 9.28, 12.50 Aquaculture Corp v New Zealand Green Mussel Co Ltd (1991) 19 IPR 327 . … 7.126, 7.127 AR Griffiths & Sons Pty Ltd v Richards [2000] 1 Qd R 116 .… 7.27 Archard v Hornor (1828) 3 Car and P 349; 172 ER 451 .… 9.9, 9.18 Arcos Limited v EA Ronaasen and Son [1933] AC 470 .… 9.36 Ardito v City of Providence, 263 F Supp 2d 358 (2003) .… 3.15 Aries Tanker Corporation v Total Transport Ltd [1977] 1 WLR 185; 1 All ER 398 .… 9.50 Arlesheim Ltd v Werner [1958] SASR 136 .… 11.43, 11.45, 14.132, 14.134 Armagas Ltd v Mundogas SA [1986] AC 717; 2 All ER 385 .… 3.78 Armitage v Legal Aid Commission (WA) (1995) 59 IR 150 .… 11.30 Armor Coatings (Marketing) Pty Ltd v General Credits (Finance) Pty Ltd (1978) 17 SASR 259 .… 6.50 Armstrong Whitworth Rolls Limited v Mustard [1971] 1 All ER 598 .… 3.26, 6.12, 6.23 Arthur Murray Dance Studios of Cleveland Inc v Witter, 105 NE (2d) 685 (Ohio CP, 1951) .… 16.34 Arthurson v State of Victoria (2001) 140 IR 188; [2001] VSC 244 .… 5.24, 5.46, 5.55, 5.58, 5.60, 5.94, 6.18, 14.25, 14.47, 14.54, 14.65 Articulate Restorations and Developments Pty Limited v Crawford (1994) 57 IR 371 .… 2.6, 2.9, 2.13–2.16, 2.33 ASIC v Adler (2002) 168 FLR 253; 41 ACSR 72; [2002] NSWSC 171 .… 2.35, 7.25, 7.46 — v — (2003) 46 ACSR 504; [2003] NSWCA 131 .… 2.35 — v Citigroup Global Markets Australia Pty Ltd (No 4) (2007) 160 FCR 35; 241 ALR 705; [2007] FCA 963 .… 7.36, 7.41, 7.42, 7.69, 7.70 — v Healey (2011) 278 ALR 618; [2011] FCA 717 .… 7.25

— v Macdonald (No 11) (2009) 256 ALR 199 .… 2.35 — v — (No 12) (2009) 259 ALR 116; [2009] NSWSC 714 .… 7.74 — v Parkes (2001) 38 ACSR 355; [2001] NSWSC 377 .… 7.35, 7.51 — v Rich (2003) 44 ACSR 341; [2003] NSWSC 85 .… 7.25 — v — (2009) 75 ACSR 1; [2009] NSWSC 1229 .… 7.25 — v Somerville (2009) 77 NSWLR 110; 259 ALR 574; [2009] NSWSC 934 .… 7.115 — v Vizard (2005) 145 FCR 57; 219 ALR 714; [2005] FCA 1037 .… 7.115 Aspden v Webbs Poultry and Meat Group (Holdings) Ltd [1996] IRLR 521 . … 5.55, 8.29, 11.27 Asset Risk Management v Hyndes [1999] NSWCA 201 .… 7.52, 15.133 Associated Dominions Assurance Society Pty Ltd v Andrew (1949) 49 SR (NSW) 351 .… 7.5, 7.22 Associated Dominions Assurance Society Pty Ltd, Re (1962) 109 CLR 516 . … 10.63, 10.83, 13.15, 13.20, 14.35 Associated Newspapers Ltd v Bancks (1951) 83 CLR 322 .… 8.37, 8.40, 8.49, 10.8, 10.9, 10.15, 10.28, 10.29, 10.57, 14.38, 14.39, 15.53 — v Grinston (1949) 66 WN (NSW) 211 .… 13.18 Associated Tyre Specialists (Eastern) Ltd v Waterhouse [1977] ICR 218 .… 8.25 Astley v Austrust Ltd (1999) 197 CLR 1; 161 ALR 155 .… 7.24, 8.57, 14.18 Atco Controls Pty Ltd (in liq) v Newtronics Pty Ltd [2008] VSCA 238 .… 3.40 Atkin v Acton (1830) 4 Car & P 208; 172 ER 673 .… 7.137 Atlantic Maritime Co Inc v Gibbon [1954] 1 QB 88 .… 12.45 Atlas Steels (Australia) Pty Ltd v Atlas Steels Ltd (1948) 49 SR (NSW) 157 . … 15.18, 15.29, 15.30, 15.32, 15.36 Atlas Tiles Ltd v Briers (1978) 144 CLR 202; 21 ALR 129 .… 14.30

Atos Origin IT Services UK Ltd v Haddock [2005] ICR 277 .… 14.121, 14.130 Attorney-General v Blake [1998] Ch 439; 1 All ER 833 .… 7.37, 7.68, 7.91 — v — [2000] 4 All ER 385 .… 15.126 — v — [2001] 1 AC 268 .… 15.126 — v De Keyser’s Royal Hotel Ltd [1920] AC 508 .… 11.30 — v Gilbert [2002] 2 NZLR 342 .… 14.79 — v Goddard (1929) 98 LJKB 743 .… 7.11, 7.54, 7.58, 7.75, 7.83, 7.94, 7.95, 7.97, 7.99 — v Guardian Newspapers (No 2) [1990] 1 All ER 109 .… 7.21 — v Hallett (1847) 16 M & W 569; 153 ER 1316 .… 15.42 — v Magdalen College (1847) 10 Beav 402; 50 ER 637 .… 15.16 — v Observer Ltd [1988] 3 All ER 545 .… 7.130, 15.69, 15.119, 15.123, 15.127 — v — [1990] 1 AC 109 .… 7.130, 15.69, 15.119, 15.123, 15.127 — v Times Newspapers [2001] 1 WLR 885 .… 7.126 — v Wylde (1946) 47 SR (NSW) 99 .… 3.79 Attorney-General for Ceylon v Silva [1953] AC 461 .… 3.78, 5.93 Attorney-General for Hong Kong v Reid [1994] 1 AC 324; 1 All ER 1 .… 7.96, 7.99, 15.136, 15.138 Attorney-General (NSW) v Perpetual Trustee Company (Ltd) (1952) 85 CLR 237 .… 1.30, 2.5, 2.13, 2.35, 2.49, 3.61, 6.45, 7.12, 11.29 — v — (1955) 92 CLR 113 .… 11.29 — v Quin (1990) 170 CLR 1; 93 ALR 1 .… 14.41 Attorney-General of Belize v Belize Telecom Ltd [2009] 2 All ER 1127 .… 5.55, 5.57, 5.60 Attorney-General (United Kingdom) v Heinemann Publishers Australia Pty Ltd (1987) 10 NSWLR 86; 8 NSWLR 341 .… 7.135, 15.127

Attwood v Lamont [1920] 3 KB 571 .… 16.7, 16.10, 16.23, 16.26, 16.31 Austin Friars Steam Shipping Company v Strack [1905] 2 KB 315 .… 7.16, 12.22, 14.80 Austin Health v Health Services Union (Victoria) (2008) 170 IR 269 .… 13.12 Austra Tanks Pty Ltd v Running [1982] 2 NSWLR 840 .… 3.60, 16.22 Austral Pacific Group Ltd (in liq) v Airservices Australia (2000) 203 CLR 136; 173 ALR 619 .… 8.36 Australasian Meat Industry Employees’ Union (AMIEU) v Australian Meat Holdings Pty Ltd (1999) 93 IR 308; [1999] FCA 696 .… 10.19, 10.53 — v Frugalis Pty Ltd [1990] 2 Qd R 201; (1989) 30 IR 149 .… 5.60, 5.61, 5.104, 14.39 — v G & K O’Connor Pty Ltd (2000) 99 FCR 597; [2000] FCA 794 .… 4.8, 13.1 — v — (2000) 100 IR 383; [2000] FCA 627 .… 3.46, 8.14, 10.73, 13.1, 15.11, 15.13, 15.18, 15.26, 15.35, 15.36, 15.38, 15.40, 15.54, 15.75 — v Mudginberri Station Pty Ltd (1986) 161 CLR 98; 66 ALR 577 .… 15.67 — v — (1987) 74 ALR 7 .… 14.108 — v Peerless Holdings Pty Ltd (2000) 103 FCR 577; [2000] FCA 1047 .… 4.5, 4.8 — v R J Gilbertson (Queensland) Pty Ltd (1988) 26 IR 237 .… 3.72 — v Sunland Enterprises Pty Ltd (1988) 81 ALR 213; 24 IR 467 .… 3.32, 14.101, 14.108, 14.114, 14.116, 15.26 Australasian Performing Rights Association Ltd v Miles (1962) 79 WN (NSW) 385 .… 2.16 Australia Meat Holdings Pty Ltd v Kazi [2004] 2 Qd R 458; [2004] QCA 147 .… 4.23, 4.26, 4.28, 7.122 Australian & International Pilots Association v Qantas Airways Limited (2008) 179 IR 200; [2008] FCA 1972 .… 3.48, 3.49, 3.59, 5.63, 5.107 Australian Agricultural Company Ltd v Federated Engine-Drivers and

Firemen’s Association of Australasia (1913) 17 CLR 261 .… 5.106 Australian Air Express Pty Ltd v Langford (2005) 147 IR 240; [2005] NSWCA 96 .… 2.2, 2.5, 2.6, 2.10, 2.17, 2.20, 2.24 Australian and New Zealand Banking Group Ltd v Finance Sector Union of Australia (2001) 111 IR 227; [2001] FCA 1785 .… 5.88, 5.89 — v Frost Holdings Pty Ltd [1989] VR 695 .… 3.52 Australian Bank Employees Union v Australia and New Zealand Banking Group Limited (1990) 94 ALR 667; (1990) 34 IR 1 .… 11.47 — v National Australia Bank (1989) 31 IR 436 .… 9.16, 9.43 Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 .… 3.49 — v Lenah Game Meats Pty Ltd (2001) 208 CLR 199; 185 ALR 1 .… 7.117, 7.130, 15.14, 15.26, 15.41, 15.75, 15.76, 15.79, 15.81 — v O’Neill (2006) 227 CLR 57; 229 ALR 457 .… 15.77, 15.78 Australian Colliery Staff Association v Queensland Mines Rescue Service (1999) 88 IR 75; [1999] FCA 395 .… 5.65, 6.19, 6.20, 10.7 Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd (2007) 232 CLR 1; 237 ALR 512 .… 4.27 — v C G Berbatis Holdings Pty Ltd (No 2) (2000) 96 FCR 491 .… 4.13 — v — (2003) 214 CLR 51; 197 ALR 153 .… 4.10, 4.11, 4.13 — v Samton Holdings Pty Ltd (2002) 117 FCR 301 .… 4.13 — v Zanok Technologies Pty Ltd [2009] FCA 1124 .… 4.12, 4.13, 4.32 Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483 .… 15.67 — v Uren (1967) 117 CLR 22 .… 14.16 Australian Education Union v Lawler (2008) 169 FCR 327; 147 IR 140 .… 11.32 Australian Energy Ltd v Lennard Oil NL [1986] 2 Qd R 216 .… 3.46 Australian Film Commission v Mabey (1985) 6 FCR 107; 59 ALR 25 .… 5.37, 11.30, 15.105

Australian Football League v The Age (2006) 15 VR 419; [2006] VSC 308 . … 7.127, 7.133, 7.134, 7.135 Australian Guarantee Corporation Ltd v Balding (1930) 43 CLR 140 .… 5.19 Australian Hardwoods Pty Ltd v Commissioner for Railways [1961] 1 All ER 737 .… 14.39, 15.6, 15.15, 15.52 Australian Industrial Relations Commission and Arends, Re; Ex p Commonwealth of Australia (2005) 145 FCR 277; 145 IR 418; [2005] FCAFC 204 .… 3.68 Australian Insurance Employees Union v WP Insurance Services Pty Ltd (1982) 42 ALR 598; 1 IR 212 .… 2.46–2.48 Australian Licensed Aircraft Engineers Association v International Aviation Service Assistance Pty Ltd (2011) 193 FCR 526; 205 IR 392; [2011] FCA 333 .… 14.31, 14.34, 14.78 Australian Medic-Care Co Ltd v Hamilton Pharmaceutical Pty Ltd (2009) 261 ALR 501; [2009] FCA 1220 .… 7.117, 7.125 Australian Municipal, Administrative, Clerical and Services Union v Greater Dandenong City Council (2000) 101 IR 143; [2000] FCA 1231 .… 15.26 — v — (2001) 112 FCR 232; 184 ALR 641 .… 15.26 — v Treasurer (Cth) (1998) 82 FCR 175 .… 5.23 Australian Mutual Provident Society v Allen (1978) 18 ALR 385 .… 2.24, 2.43 — v Chaplin (1978) 18 ALR 385 .… 2.3, 2.8, 2.13, 2.17, 2.18, 2.24, 2.26–2.28, 2.32, 2.41, 3.67, 5.23 Australian National Airlines Commission v Robinson [1977] VR 87 .… 9.44, 10.21, 10.25, 10.26, 10.60, 10.63, 11.12, 14.38, 14.39, 15.52, 15.54 Australian National Hotels Pty Ltd v Jager [2000] TASSC 43; (2000) 9 Tas R 153 .… 5.50, 11.39, 11.50 Australian National University v Burns (1982) 43 ALR 25 .… 11.30, 15.105 — v Lewins (1996) 138 ALR 1 .… 15.105 Australian Oil Refining Pty Ltd v Bourne (1980) 28 ALR 529 .… 8.67, 8.71

Australian Paper Ltd v Communications, Electrical, Electronic, Energy & Allied Services Union (1998) 81 IR 15 .… 15.50, 15.66, 15.88 Australian Postal Corporation v Lutak (1991) 21 NSWLR 584 .… 15.120, 15.131 Australian Railways Union v Victorian Railway Commissioners (1930) 44 CLR 319 .… 3.68 Australian Rugby League Ltd v Cross (1997) 39 IPR 111 .… 5.52, 8.38, 8.39, 8.40, 8.41, 8.49, 14.39, 15.53 Australian Salaried Medical Officers’ Federation (New South Wales) v Sydney South West Area Health Service (No 2) (2007) 166 IR 320 .… 3.5, 3.7, 3.26, 3.44 Australian Securities and Investments Commission v Rich (2003) 44 ACSR 341 .… 3.76 — v — (No 2) (2004) 50 ACSR 500; [2004] NSWSC 836 .… 15.102 Australian Services Union v Electrix Pty Ltd (1999) 93 IR 43; [1999] FCA 211 .… 4.5 Australian Soccer Pools Pty Ltd v Gair (1989) 9 MVR 115 .… 8.36 Australian Telecommunications Commission v Hart (1982) 43 ALR 165 .… 5.50, 5.92, 7.13, 7.14 Australian Timber Workers Union v Monaro Sawmills Pty Ltd (1980) 29 ALR 322 .… 2.6, 2.9–2.11, 2.13, 2.16, 2.19, 2.20, 2.31, 5.95 Australian Trading Co Pty Ltd v Jones [1925] VLR 273 .… 11.23 — v — (1926) 37 CLR 592 .… 11.23 Australian Traineeship System v Wafta [2004] NSWCA 230; (2004) 166 IR 243 .… 8.67 Australian Tramway Employees’ Association v Brisbane Tramways Co Ltd (1912) 6 CAR 35 .… 7.12 Australian Transport Officers Federation v Roads and Traffic Authority of NSW (1989) 30 IR 187 .… 3.72 Australian William E Simon Graduate School of Business Administration

Incorporated v Minister Administering the National Parks and Wildlife Act (1974) (NSW) (1994) 51 FCR 243 .… 3.83 Australian Wool Selling Brokers Employers’ Federation v The Federated Storemen and Packers Union of Australia (1976) 176 CAR 884 .… 11.70 Australian Woollen Mills Pty Ltd v Commonwealth (1954) 92 CLR 424 .… 3.8, 3.29, 3.40, 3.46, 5.80 — v — (1955) 93 CLR 546 .… 3.8, 3.29, 3.40, 3.46 Australian Workers’ Union v BHP Iron-Ore Pty Ltd (2000) 106 FCR 482; 102 IR 410; [2001] FCA 3 .… 5.11, 5.39, 5.97 — v Roads and Traffic Authority (NSW) (1989) 29 IR 202 .… 5.71, 6.16, 6.19, 15.100 — v Stegbar Australia Pty Ltd [2001] FCA 367 .… 3.73, 3.74, 3.76, 9.57, 9.58, 11.11 Australis Media Holdings Pty Ltd v Telstra Corporation Ltd (1998) 43 NSWLR 104 .… 9.54 Autoclenz Ltd v Belcher [2010] IRLR 70 .… 2.28, 2.31, 2.32, 3.6 — v — [2011] 4 All ER 745; [2011] UKSC 41 .… 2.5, 2.17, 2.21, 2.22, 2.27, 2.28, 2.29, 2.31, 2.32, 3.6, 4.20 Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 .… 1.1, 4.29, 5.94, 7.2, 8.33, 9.6, 9.9, 9.11, 9.13, 9.18, 9.19, 9.20, 9.24, 9.29, 10.2, 10.9, 10.43, 10.60, 10.63, 10.64, 10.65, 10.66, 10.67, 10.81, 10.83, 11.14, 11.65, 11.67, 11.69, 11.70, 14.35, 14.36, 14.37, 14.38, 14.39, 14.40, 14.43, 14.107 Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union v Mechanical Engineering Services Pty Ltd [2007] FCA 1736 .… 5.40 — v Metro Products & Co Pty Ltd (2001) 110 IR 143 .… 13.12 — v Skilled Engineering Ltd [2003] FCA 260 .… 5.46 Avellino v All Australia Netball Association Ltd (2004) 87 SASR 504; [2004] SASC 56 .… 16.3 Avon County Council v Howlett [1983] 1 WLR 605; 1 All ER 1073 .… 4.15

AWA Ltd v Daniels (1992) 7 ACSR 759 .… 3.76 — v Koval [1992] NSWSC 176 .… 7.11, 7.52 Award Modernisation Decision (2008) 177 IR 8 .… 13.12 — [2009] AIRCFB 345 .… 13.11 Award Simplification Decision (1997) 75 IR 272 .… 11.47 AWB (No 1), Re (2008) 21 VR 252 .… 7.23

B B & S Contracts and Design Ltd v Victor Green Publications Ltd [1984] ICR 419 .… 4.2, 4.4, 4.5, 4.7 Bacchus Marsh Concentrated Milk Co Ltd (in liq) v Joseph Nathan & Co Ltd (1919) 26 CLR 410 .… 16.2 Bacich v Australian Broadcasting Corporation (1992) 29 NSWLR 1 .… 7.133 Bagby v Gustavson International Drilling Co (1980) 24 AR 181 .… 11.48 Bagnall v National Tobacco Corporation of Australia Ltd (1934) 34 SR (NSW) 421 .… 11.75, 14.99, 14.105 Bahr v Nicolay (No 2) (1988) 164 CLR 604; 78 ALR 1 .… 14.39, 15.52 Bailey, Re (1854) 3 E & B 607; 118 ER 1269 .… 3.31, 8.37, 8.38, 8.43 Bailey v NSW Medical Defence Union Ltd (1995) 184 CLR 399; 132 ALR 1 .… 2.36, 2.37, 2.38 — v Thurston & Co Ltd [1903] 1 KB 137 .… 13.27 Baily v British Equitable Assurance Co [1904] 1 Ch 374 .… 2.36 — v — [1906] AC 35 .… 2.36 Bailey v Namol Pty Limited (1994) 53 FCR 102 .… 15.115 — v Victorian Soccer Federation [1976] VR 13 .… 3.69 Bain v Fothergill (1874) LR 7 HL 158 .… 14.7 Bainbridge v Circuit Foil UK Ltd [1997] ICR 541 .… 5.40, 5.42, 6.6, 6.8

— v Smith (1889) 41 Ch D 462 .… 15.2 Baker v City of Salisbury (1982) 2 IR 168 .… 15.11, 15.17, 15.21, 15.50, 15.58, 15.75 — v Commissioner of Australian Federal Police (2000) 104 FCR 359; [2000] FCA 1339 .… 7.23 — v Gibbons [1972] 2 All ER 759 .… 7.84, 16.48, 16.49 — v Gough [1963] NSWR 1345 .… 15.16, 15.18, 15.39, 15.56, 15.96, 15.109, 15.110, 15.111 Baldwin v Brighton & Hove City Council [2007] IRLR 232; [2007] ICR 680 .… 8.20 — v Society for the Diffusion of Useful Knowledge (1838) 9 Sim 393; 59 ER 409 .… 15.2, 15.15 Baldwyn v Smith [1900] 1 Ch 588 .… 3.66 Balfours Bakery v Cooper [2011] FWAFB 8032 .… 12.35 Ball v Coggs (1710) 1 Brown 140; 1 ER 471 .… 11.22 Balmain New Ferry Co Ltd v Robertson (1906) 4 CLR 379 .… 5.30 Balog v Crestani (1975) 132 CLR 289; 6 ALR 29 .… 11.17 Balston Ltd v Headline Filters Ltd (No 1) [1987] FSR 330 .… 7.120, 15.9, 16.38, 16.42, 16.46, 16.47 — v — (No 2) [1990] FSR 385 .… 5.7, 7.20, 7.63, 7.81, 7.88, 7.89, 7.90, 7.93 Baltic Shipping Co v Dillon (1993) 176 CLR 344; 111 ALR 289 .… 9.27, 9.28, 9.41, 14.67, 14.71, 14.77, 14.79, 14.80, 14.81, 14.83, 14.92, 14.93 Banco de Portugal v Waterlow [1932] AC 452 .… 14.108 Bank of Credit and Commerce International SA (in liq) v Ali [1999] 2 All ER 1005 .… 7.18, 7.20, 8.25 — v — [2000] ICR 1410 .… 6.50 — v — [2002] 1 AC 251; [2001] 1 All ER 961 .… 6.50 — v — (No 2) [2000] ICR 1354 .… 14.20, 14.88

— v — [2002] 3 All ER 750 .… 14.20, 14.88 Bank of New South Wales v Commonwealth (1948) 76 CLR 1 .… 4.35 Bank Voor Handel en Scheepvaart NV v Slatford (1953) 1 QB 248 .… 2.11 Bankstown Foundry Pty Ltd v Braistina (1986) 160 CLR 301 .… 8.60, 8.65, 8.67 Barac v Farnell (1994) 125 ALR 241 .… 4.25, 4.26 Barbagallo v J & F Catelan Pty Limited [1986] 1 Qd R 245 .… 15.117 Barber v Manchester Regional Hospital Board [1958] 1 All ER 322 .… 11.66, 14.62, 15.15, 15.96, 15.97, 15.109 Barclay v City of Glasgow District Council [1983] IRLR 313 .… 11.12 Barlow v Neville Jeffress Advertising Pty Ltd (1994) 4 Tas R 391 .… 15.14, 16.15, 16.23 Barnard v National Dock Labour Board [1953] 2 QB 18; 1 All ER 1113 .… 15.93, 15.104, 15.106, 15.110, 15.111 Barnes v Addy (1874) LR 9 Ch App 244 .… 15.71 — v Dawson [1962] NSWR 73 .… 2.3 Barns v Barns (2003) 214 CLR 169; 196 ALR 65 .… 3.41 Barone v Olympic Industries Pty Ltd (1984) 8 IR 439 .… 2.9, 2.15, 2.16, 2.17, 2.19, 2.20 Baroness Wenlock v River Dee Co (1883) 36 Ch D 675n .… 3.67 Barossa Co-operative Winery Ltd v Kolarovich (1977) 16 SASR 392 .… 2.42 Barratt v Howard (2000) 165 ALR 605; 92 IR 350; [1999] FCA 1132 .… 9.61, 11.29, 11.30, 11.32, 11.34 — v — (2000) 96 FCR 428; 170 ALR 529 .… 11.29, 11.30, 11.32, 11.34 Barrick v Qantas Flight Catering Ltd (2007) 163 IR 207; [2007] FCA 835 .… 4.36 Barrier Wharfs Ltd v W Scott Fell & Co Ltd (1908) 5 CLR 647 .… 5.23 Barro Group Pty Ltd v Fraser [1985] VR 577 .… 2.5, 2.8, 2.20, 2.41

Barraclough v Brown [1897] AC 615 .… 15.95 Barros D’Sa v University Hospital Coventry and Warwickshire NHS Trust [2001] IRLR 691 .… 15.23 Bartholomew v London Borough of Hackney [1999] IRLR 246 .… 16.55 Barto v GPR Management Services (1991) 33 FCR 389; 105 ALR 339 .… 4.35 Barton v Armstrong [1976] AC 104; [1973] 2 NSWLR 598 .… 4.5, 4.6 Barwick v Reade (1791) 1 H Bl 627; 126 ER 357 .… 6.43 Bashir v Brillo Manufacturing Co [1979] IRLR 295 .… 6.14, 6.15, 6.46, 10.99 Basnett v J and A Jackson Ltd [1976] ICR 63 .… 14.113 Baster v London and County Printing Works [1899] 1 QB 901 .… 7.28 Bateman’s Bay Local Aboriginal Land Council v Aboriginal Community Benefit Fund Pty Ltd (1998) 194 CLR 247; 155 ALR 684 .… 15.107 Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622 .… 3.53 Bauman v Hulton Press Ltd [1952] 1 All ER 1121 .… 5.52, 8.39, 8.42, 8.43, 8.44, 8.45, 11.19, 14.56 Baxter v Nurse (1844) 6 M & G 935; 134 ER 1171 .… 11.43 Bayley v Osborne (1984) 4 FCR 141 .… 5.50, 5.92, 7.12, 7.13, 7.14 — v Rimmel (1836) 1 M & W 506; 150 ER 534 .… 11.43 Bayly v Scarica [1990] VR 731 .… 2.40 BC Timber Industry Journal v Black [1934] 3 DLR 31 .… 7.52 BCCI, Re [1994] IRLR 282 .… 9.32, 9.34 BDO Group Investments (NSW-VIC) Pty Ltd v Ngo [2010] VSC 206 .… 15.61 Beach v Reed Corrugated Cases Ltd [1956] 2 All ER 652 .… 14.30, 14.46, 14.51, 14.115

Beach Petroleum NL v Abbott Tout Russell Kennedy (1999) 48 NSWLR 1; [1999] NSWCA 408 .… 7.6, 7.36 Beale v Thompson (1804) 4 East 546 .… 12.13, 12.47 Bearingpoint Australia Pty Ltd v Hillard [2008] VSC 115 .… 5.52, 6.16, 8.20, 8.39, 8.44, 8.47, 8.48, 8.55, 9.44, 10.13, 10.31, 10.47, 10.57, 10.104, 11.7, 15.28, 15.31, 15.34, 15.51, 16.29, 16.32 Beaton v McDivitt (1987) 13 NSWLR 162 .… 3.29 Bechara v Gregory Harrison Healey & Co (1996) 65 IR 382; [1996] IRCA 262 .… 14.33, 14.101, 14.109, 14.112, 14.114 Beck v Darling Downs Institute of Advanced Education (1990) 140 IR 364 . … 6.14, 6.15, 8.49, 8.52, 14.46, 14.108, 14.113 Beckett Investment Management Group Ltd v Hall [2007] ICR 1539; [2007] EWCA Civ 613 .… 3.37, 16.20 Beckham v Drake (1849) 2 HLC 579; 9 ER 1213 .… 13.27, 14.2, 14.108 Bednall v Wesley College [2005] WASC 101 .… 8.15, 8.26, 10.76, 11.24 Beecham Group Ltd v Bristol Laboratories Ltd (1968) 118 CLR 618 .… 15.77, 15.78, 15.79, 15.80, 15.84 Beeston v Collyer (1827) 4 Bing 309; 130 ER 786 .… 5.75, 11.42, 11.43, 11.46, 11.60 — v — (1827) 2 Car & P 607; 172 ER 276 .… 11.43, 11.46, 11.60 Belan v Casey (2003) 57 NSWLR 670 .… 8.35 Bell v Amberday Pty Ltd (2001) 39 ACSR 25; [2001] NSWSC 558 .… 13.21 — v Gillen Motors Pty Ltd (1989) 24 FCR 77; 27 IR 324 .… 11.64 — v Lever Bros Ltd [1932] AC 161 .… 4.16, 4.17, 5.60, 7.18, 7.20 Bell Group Ltd v Westpac Banking Corporation (No 9) (2008) ACSR 1 .… 7.88 Beloff v Pressdram Ltd [1973] 1 All ER 241 .… 7.133 Bendigo Central Freezing and Fertiliser Company Limited v Cunningham [1919] VLR 387 .… 7.69, 7.97, 7.98, 7.99

Bennett v Commonwealth of Australia [1980] 1 NSWLR 581 .… 9.11, 9.43, 9.59, 9.61, 15.91, 15.100 — v Human Rights and Equal Opportunity Commission (2003) 134 FCR 334; 204 ALR 119; 131 IR 446 .… 7.30, 7.38, 7.131 — v Minister of Community Welfare (1992) 176 CLR 408; 107 ALR 617 .… 14.17 Benninga Mitcham Ltd v Bijstra [1946] KB 58 .… 8.38 Bents Brewery Co Ltd v Hogan [1945] 2 All ER 570 .… 7.118, 7.122 Berings Inc (Australia) Pty Ltd v Treloar (1999) 95 IR 169 .… 2.20 Berkeley Administration Inc v McClelland [1990] FSR 505 .… 7.127, 16.25 Bertram v Armstrong & De Mamiel Constructions Pty Ltd (1978) 23 ACTR 15 .… 2.9 Bessenden Properties Ltd v Corness [1977] ICR 821 .… 14.99 Beswick v Beswick [1968] AC 58; [1967] 2 All ER 1197 .… 3.62, 5.109, 5.112, 15.44 Bettini v Gye (1876) 1 QBD 183 .… 10.16 Betts v Brisbane Gas Co Ltd [1978] Qd R 429 .… 3.39, 6.26, 6.31, 7.85 — v Gibbins (1834) 2 Ad & El 57; 111 ER 22 .… 8.35 Beverage Packers (Aust) Pty Ltd, Re [1990] VR 446 .… 13.10 BHP Iron Ore Pty Ltd v Australian Workers’ Union (2000) 102 FCR 97; 171 ALR 680; 97 IR 266 .… 5.40, 5.44 Bigg v New South Wales Police Service (1998) 80 IR 434 .… 11.32 Bilbee v Hasse & Co (1889) 5 TLR 677 .… 10.75, 12.49 Bill Williams Pty Ltd v Williams (1972) 126 CLR 146 .… 8.64 Biodiesel Producers Limited v Stewart [2007] FCA 722 .… 14.106, 14.132 — v — [2008] FCAFC 66 .… 14.106, 14.132 Biotechnology Australia Pty Ltd v Pace (1988) 15 NSWLR 130 .… 3.48, 3.49, 3.51, 3.52, 3.56, 3.58, 3.59

Birch v University of Liverpool [1985] ICR 470 .… 3.12, 11.81 Bird v British Celanese Ltd [1945] 1 KB 336 .… 9.59, 9.62 Birmingham and District Land Co v London and North Western Railway Co (1886) 34 Ch D 261 .… 8.34 Birrell v Australian National Airlines Commission (1984) 5 FCR 447; 9 IR 101 .… 3.22, 3.24, 11.3, 11.52, 11.64, 11.68, 11.70, 13.20 Birtchnell v Equity Trustees, Executors and Agency Co Ltd (1929) 42 CLR 384 .… 7.6, 7.37 Bishop v Ropolo Services Pty Ltd (2006) 153 FCR 357; 152 IR 165; [2006] FCA 592 .… 4.5 Black v Brimbank City Council (1998) 152 ALR 491 .… 14.127, 14.128, 14.129 — v Danka Datakey Pty Ltd (1997) 72 IR 423 .… 14.33, 14.101, 14.112 — v Smallwood (1966) 117 CLR 52 .… 3.80, 3.86, 3.87 Black Clawson International Limited v Papierwerke Waldhof-Aschaffenburg AG [1981] 2 Lloyd’s Rep 446 .… 12.47 Black Uhlans Inc v Crime Commission (NSW) [2002] NSWSC 1060 .… 15.60 Blackadder v Ramsey Butchering Services Pty Ltd (2002) 118 FCR 395; 113 IR 461; [2002] FCA 603 .… 7.16, 8.38, 8.40, 8.41 — v — (2005) 221 CLR 539; 215 ALR 87; 139 IR 338 .… 8.38, 8.39, 8.41, 8.44, 8.52, 10.73, 15.11, 15.25 Blackmagic Design Pty Ltd v Overliese (2010) 84 IPR 505; [2010] FCA 13 . … 7.20, 7.46, 7.51, 7.59, 7.69, 7.70, 7.90, 7.115, 7.128, 15.137 — v — (2011) 191 FCR 1; 276 ALR 646 .… 7.20, 7.31, 7.46, 7.51, 7.59, 7.69, 7.70, 7.90, 7.115, 7.128 Blackwell v Pennant (1852) 9 Hare 551 .… 11.43 Blaikie v SA Superannuation Board (1995) 65 SASR 85; 64 IR 145 .… 8.13 Blair v Western Mutual Benefit Association [1972] 4 WWR 284 .… 3.22

Blake v Sitefate Pty Limited (1997) 74 IR 466 .… 2.9, 2.17, 2.25 Blank v Beroya Pty Ltd (1967) 92 WN (NSW) 24 .… 15.95 Blayney Abattoirs Pty Ltd v State of New South Wales (1996) 86 IR 358 .… 3.79 BLB Corporation of Australia v Jacobsen (1974) 48 ALJR 372 .… 7.47, 7.69, 7.70, 7.98 Blenkarn v Hodges’ Distillery Company (1867) 16 LT 608 .… 7.52 Bliss v South East Thames Regional Health Authority [1987] ICR 700 .… 7.16, 8.13, 8.20, 8.25, 8.27, 10.40, 10.51, 10.52, 10.90, 14.77 Blizzard v O’Sullivan [1994] 1 Qd R 112 .… 15.105 Blomley v Ryan (1956) 99 CLR 362 .… 3.37, 3.66, 4.11, 4.12 Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66 .… 7.2, 7.7, 7.30, 7.31, 7.32, 7.44, 7.46, 7.47, 7.48, 7.49, 7.87, 7.89, 7.100, 7.137, 8.14, 8.18, 10.42, 10.53, 10.85 Blythe v Northwood (2005) 63 NSWLR 531; [2005] NSWCA 221 .… 7.37, 7.96, 7.97 BMI Ltd v Federated Clerks Union of Australia (NSW) Branch (1983) 51 ALR 401; (1983) 6 IR 416 .… 15.102 BMK v Logue [1993] ICR 601 .… 10.36 BO Morris Ltd v F Gilman (BST) Ltd (1943) 60 RPC 20 .… 7.127 Boardman v Phipps [1967] 2 AC 46; [1966] 3 All ER 721 .… 7.6, 7.7, 7.35, 7.48, 7.112 Boast v Firth (1868) LR 4 CP 1 .… 12.2, 12.3, 12.13, 12.14 Boddington v British Transport Police [1999] 2 AC 143; [1998] 2 All ER 203 .… 15.112 — v Lawton [1994] ICR 478 .… 16.3 Bold v Brough, Nicholson & Hall Ltd [1963] 3 All ER 849 .… 14.47, 14.51, 14.64, 14.65, 14.106, 14.108 Bolinger v Virgin Islands Telephone Corporation, 293 F Supp 2d 559 (2004)

.… 11.19 Bolkiah (Prince Jefri) v KPMG [1999] 2 AC 222; 1 All ER 517 .… 7.68 Bolton Gems Pty Ltd v Gregoire (SC(NSW), Young J, 10 November 1995, unreported) .… 7.26, 7.27 Bonanza Creek Gold Mining Co Ltd v The King [1916] 1 AC 566 .… 3.68 Bond v Cav Ltd [1983] IRLR 360 .… 5.72, 6.12, 8.42, 8.43, 9.17, 9.43, 9.45, 9.63, 11.52 Bonette v Woolworths Ltd (1937) 37 SR (NSW) 142 .… 3.75, 3.76 Bonsor v Musicians Union [1956] AC 104 .… 15.99 Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd (1982) 149 CLR 600; 43 ALR 68 .… 3.52, 3.60 Boral Resources (Qld) Pty Ltd v Pyke (1989) 93 ALR 89; [1992] 2 Qd R 25 . … 7.27, 10.19, 10.53 Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 36 FCR 20 .… 8.14, 10.29, 10.98, 14.49, 14.60, 14.61, 14.101, 14.112, 14.113, 15.11, 15.17, 15.20, 15.38 Boston Deep Sea Fishing and Ice Co Ltd v Ansell (1888) 39 Ch D 339 .… 7.32, 7.39, 7.52, 7.94, 7.95, 7.96, 7.97, 7.99, 7.100, 7.111, 7.137, 9.25, 9.28, 9.31, 9.34, 9.49, 9.59, 9.62, 10.46, 10.54, 10.58, 10.62, 10.73, 10.74, 10.86, 10.87, 10.89, 10.103 — v Farnham [1957] 1 WLR 1051; 3 All ER 204 .… 3.80 Bosworth v Angus Jowett & Co Ltd [1977] IRLR 374 .… 8.44 Botany Municipal Council v Federal Airports Corp (1992) 175 CLR 453; 109 ALR 321 .… 3.68 Botham v Ministry of Defence .… 14.74 Boucaut Bay Co Ltd (in liq) v Commonwealth (1927) 40 CLR 98 .… 10.76, 14.131, 14.134 Boulting v Association of Cinematograph, Television and Allied Technicians [1963] 2 QB 606; [1963] 1 All ER 716 .… 7.38, 7.47 Boulton v Jones (1857) 2 H & N 564; 157 ER 232 .… 4.18

Bourke v Hassett [1999] 1 VR 189 .… 8.65 — v Victorian Workcover Authority [1999] 1 VR 189 .… 8.72 Bouzourou v Ottoman Bank [1930] AC 271 .… 6.18, 7.16 Bowen v Canadian Tire Corporation (1991) 35 CCEL 113 .… 3.27, 3.52 Bowes v Chaleyer (1923) 32 CLR 159 .… 10.77 Bowker v Prophecy Technologies Pty Ltd (IRC of NSW, Marks J, 26 May 1999, unreported) .… 16.52 Bowling v General Motors Holdens Limited (1980) 33 ALR 297 .… 15.26 Bowman v Durham Holdings Pty Ltd (1973) 131 CLR 8 .… 3.23 Bown v LAS Direct Limited [2001] EWCA Civ 1798 .… 16.56 Boxfoldia v National Graphical Association (1982) (NGA) [1988] ICR 752 . … 3.73, 5.111 Boyce v Paddington Borough Council [1903] 1 Ch 109 .… 15.107 Boyded Industries Pty Ltd v Canuto [2004] NSWCA 256 .… 8.72 Boylan Nominees Pty Ltd v Sweeney (2005) 148 IR 123 .… 2.6, 2.18 Boyle v An Post [1992] 2 Irish Reports 437 .… 15.44, 15.84 Boyo v Lambeth London Borough Council [1994] ICR 727 .… 10.2, 10.76, 10.93, 10.98, 11.15, 14.62, 15.17, 15.54 BP Exploration Co (Libya) Limited v Hunt (No 2) [1979] 1 WLR 783; [1982] 1 All ER 925 .… 12.49 — v — [1983] 2 AC 352; [1982] 1 All ER 925 .… 12.49 BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266; 16 ALR 363 .… 5.24, 5.57, 5.58, 5.71 Brace v Calder [1895] 2 QB 253 .… 12.25, 13.30, 13.31, 13.32, 14.15, 14.110, 14.112 Bracegirdle v Heald (1818) 1 B and Ald 722; 106 ER 266 .… 1.36, 11.18 Brackenridge v Toyota Motor Corporation Australia Ltd (1996) 142 ALR 99; 64 IR 77; 67 IR 162 .… 3.27, 5.60, 5.62, 5.64, 6.6, 6.13, 6.14, 6.15, 6.39,

8.49, 9.58, 10.19, 10.73, 11.51, 14.17, 14.78, 14.79 Bradford Third Equitable Benefit Building Society v Borders [1941] 2 All ER 205 .… 7.18 Bradley Egg Farm Ltd v Clifford [1943] 2 All ER 378 .… 3.69 Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61 .… 3.4, 5.23, 5.46, 5.47, 6.21, 6.24 Brambles Ltd v Wail (2002) 5 VR 169; [2002] VSCA 150 .… 11.19 Brammer v Deery Hotels (1974) 3 ALR 621 .… 14.28 Brandeaux Adviser (UK) Limited v Chadwick [2011] IRLR 224 .… 7.20, 7.131, 9.49, 10.51, 10.62, 10.104, 15.134 Brangier v Rosenthal, 337 F 2d 952 (1964) .… 3.19 Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424; [2001] FCA 1833 .… 3.4, 5.20 Braszell, Re (1984) 26 AILR 222 .… 11.75 Breach (FT) v Epsylon Industries Ltd [1976] ICR 316 .… 5.52, 8.38, 8.39, 8.47 Breen v Williams (1996) 186 CLR 71; 138 ALR 259 .… 5.3, 5.47, 5.48, 5.49, 5.50, 5.51, 5.53, 5.58, 7.20, 7.36, 7.37, 7.40, 7.71, 7.111 Bresatz v Przibilla (1962) 108 CLR 541 .… 14.54 Brett v East India and London Shipping Company Limited (1864) 2 H and M 404; 71 ER 520 .… 15.2, 15.66 Brian Rochford Ltd v Textile Clothing and Footwear Union (NSW) (1998) 47 NSWLR 47; 85 IR 332 .… 13.16, 13.18 Brick and Pipe Industries Ltd v Occidental Life Nominees Pty Ltd [1992] 2 VR 279 .… 3.76 Brickenden v London Loan & Savings Co [1934] 3 DLR 465 .… 7.71 Bridge v Campbell Discount Co Ltd [1962] AC 600; 1 All ER 385 .… 10.76 — v Deacons [1984] AC 705; 2 All ER 19 .… 16.12 Bridges Financial Services Pty Ltd v Chief Commissioner of State Revenue

(2005) 222 ALR 599 .… 2.3, 2.8, 2.14, 2.17 Bridgewater v Leahy (1998) 194 CLR 457; 158 ALR 66 .… 4.10 Brien v Dwyer (1978) 22 ALR 485; (1978) 141 CLR 378 .… 11.12 Briers v Australian Telecommunications Commission (1979) 36 FLR 375; 29 ALR 569 .… 9.19, 9.43, 9.44, 9.59 Briggs v Oates [1991] 1 All ER 407; [1990] ICR 473 .… 6.43, 10.76, 12.25, 13.30, 13.31, 15.52, 16.18 Brightman v Lamson Paragon Ltd (1914) 18 CLR 331 .… 16.7, 16.33 Briginshaw v Briginshaw (1938) 60 CLR 336 .… 10.42 Brimacombe v Entex Chemical (SA) Pty Ltd [1986] AILR 490 .… 3.18 Brinkibon Ltd v Stahag Stahl und Stahlwarenhandels-Gesellschaft mbH [1983] 2 AC 34 .… 3.24 Briscoe v Lubrizol Ltd (No 2) [2002] IRLR 607; EWCA Civ 508 .… 5.55, 8.29, 10.39, 11.27 Bristol and West Building Society v Mothew [1996] 4 All ER 698 .… 7.32, 7.36 — v — [1998] Ch 1 .… 7.32, 7.36 Bristol Garage (Brighton) Ltd v Lowen [1979] IRLR 86 .… 8.24 Bristow v City Petroleum Ltd [1987] 1 WLR 529 .… 9.47, 9.52 Britain v Rossiter (1879) 11 QBD 123 .… 11.18, 11.41 British Aircraft Corporation Ltd v Austin [1978] IRLR 332 .… 8.25 British American Tobacco Australia Ltd v Gordon [2007] NSWSC 230 .… 7.129, 7.131 British and Beningtons Ltd v North Western Cachar Tea Co Ltd [1923] AC 48 .… 10.86 British Bank for Foreign Trade v Novinex Ltd [1949] 1 KB 623; 1 All ER 155 .… 3.49, 10.75 British Broadcasting Corporation, Re; Ex p Lavelle [1983] 1 All ER 241 .… 15.99

British Celanese Limited v Moncrieff [1948] Ch 564 .… 7.108, 7.113 British Franco Electric Pty Ltd v Dowling Plastics Pty Ltd [1981] 1 NSWLR 448 .… 15.90 British Fuels Ltd v Baxendale [1998] 4 All ER 609 .… 10.63 — v — [1999] 2 AC 52 .… 10.63 British Industrial Plastics Ltd v Ferguson [1939] 4 All ER 504 .… 5.49, 7.119 — v — [1940] 1 All ER 479 .… 15.69 British Investments v Development Co Pty Ltd [1979] ACLC 40-522 .… 13.18 British Leyland (UK) Ltd v Ashraf [1978] ICR 979 .… 11.81 — v McMullen [1978] IRLR 245 .… 5.40 British Midlands Tools Ltd v Midland International Tooling Ltd [2003] EWHC 466 .… 7.20, 7.21, 7.84, 7.88 British Reinforced Concrete Engineering Company Limited v Lind (1917) 34 RPC 101 .… 6.11, 7.9, 7.34, 7.102, 7.105, 7.106, 7.109, 15.137 British Syphon Company Limited v Homewood [1956] 2 All ER 897 .… 7.103, 7.106 British Telecommunications Plc v Ticehurst [1992] ICR 383 .… 7.4, 8.33, 9.43, 9.44 British Waggon Company v Lea & Co (1880) 5 QBD 149 .… 6.42, 6.43, 9.53, 9.54 British Westinghouse Co v Underground Railway [1912] AC 673 .… 14.108 Brkovic v Clough (J O) & Son Pty Ltd (1983) 49 ALR 256 .… 8.67 Broadhurst and Company Limited v Robinson (1903) 29 VLR 447 .… 11.19, 11.46 Brodribb Sawmilling Co v Gray [1984] VR 321 .… 2.16 Brogden v Metropolitan Railway Company (1877) 2 AC 666 .… 3.27 Broken Hill Pty Co Ltd v Hapag-Lloyd Aktiengesellschaft [1980] 2 NSWLR 572 .… 15.28

Bromley v Smith [1909] 2 KB 235 .… 3.65 Brompton v AOC International Ltd [1997] IRLR 639 .… 6.47, 8.29, 10.61, 10.83, 10.90, 10.98, 11.27, 15.54 Bronester Limited v Priddle [1961] 1 WLR 1294 .… 7.55 Brook Street Bureau (UK) Ltd v Dacas [2004] IRLR 358 .… 3.33 Brooks v Australian Dried Fruit Sales (1998) 84 IR 33 .… 5.74 — v Burns Philp Trustee Co Ltd (1969) 121 CLR 432 .… 2.1, 4.26 — v Olyslager Oms (UK) Ltd [1998] IRLR 590 .… 7.124, 16.42, 16.46 Brookton Holdings Pty Ltd v Kara Kar Holdings Pty Ltd (1994) 57 IR 288 . … 6.21, 11.52, 11.55, 11.57, 11.61, 11.80, 14.110, 14.115 Broome v Cassell & Co [1972] AC 1027; 1 All ER 801 .… 14.1, 14.16 Brophy v Mapstone (1984) 3 FCR 227; 56 ALR 135 .… 11.23 Brown v KFC National Management Company, 921 P 2ed 146 (1996) .… 3.8 — v Southall & Knight [1980] ICR 617 .… 11.6 — v Symons (1860) 141 ER 1145; (1860) 8 CBNS 208 .… 11.19 Brown Jenkinson & Company Ltd v Percy Dalton (London) Ltd [1957] 2 QB 621 .… 8.35 Browning v Crumlin Valley Collieries [1926] 1 KB 522 .… 3.30, 9.11, 9.63, 12.12, 12.16 Bruce v AWB Ltd (2000) 100 IR 129; [2000] FCA 594 .… 3.18, 5.13, 6.16, 10.15, 10.19, 10.31, 10.41, 10.46 — v Tyler (1916) 21 CLR 277 .… 4.24, 6.42, 6.44, 9.53, 9.54 Buckenara v Hawthorn Football Club Ltd [1988] VR 39 .… 11.18, 15.30, 15.31, 15.34, 15.61, 15.66, 16.29 Buckingham v Surrey & Hants Canal Company (1882) 46 LTR (NS) .… 11.43, 11.46 Buckland v Bournemouth University [2011] QB 323; [2010] 4 All ER 186 . … 1.1, 1.10, 8.20, 8.24, 8.25, 8.27, 10.36, 10.52, 10.67, 10.90, 10.96, 10.98

Buckley v Tutty (1971) 125 CLR 353 .… 16.3, 16.5, 16.7, 16.17, 16.19 Buckman v Barnawartha Abattoirs Pty Ltd (1994) 140 IR 376 .… 6.24 Bugden v State Rail Authority of New South Wales (1991) EOC 92-360 .… 14.33 Bugge v Brown (1919) 26 CLR 110 .… 8.64 Building Workers’ Industrial Union of Australia v Odco Pty Ltd (1991) 29 FCR 104; 99 ALR 735 .… 2.3, 2.9, 2.16, 2.19, 2.20, 2.24, 2.50, 2.51, 3.28, 3.33, 9.53 Building Workers’ Industrial Union of Australia, Application by, Re (1979) 41 FLR 192 .… 9.57, 9.63 Bull v Nottinghamshire and City of Nottingham Fire and Rescue Authority [2007] EWCA Civ 240; [2007] ICR 1631 .… 6.10, 6.16, 7.9, 8.33 — v Pitney-Bowes Ltd [1966] 3 All ER 384; [1967] 1 WLR 273 .… 16.4, 16.20 Bulldogs Rugby League Club Ltd v Williams [2008] NSWSC 822 .… 15.33 Bullock v Federated Furnishing Trades Society of Australia (No 2) (1985) 5 FCR 464; 60 ALR 235 .… 15.81 — v The Wimmera Fellmongery and Woolscouring Company Ltd (1879) 5 VLR 362 .… 11.19, 11.46 Bulut v Koksal [1988] VR 241 .… 14.120 Bunge (Australia) Pty Ltd v Mallard (1982) 41 ALR 223 .… 11.18 Bunning Brothers v Power (1917) 19 WALR 127 .… 11.45, 11.46 Bunter v Cresswell (1850) 19 LJQB 357; 117 ER 317 .… 9.14, 9.60 Burazin v Blacktown City Guardian Pty Ltd (1996) 142 ALR 144 .… 8.13, 8.15, 10.49, 14.34, 14.71, 14.77, 14.78, 14.81, 14.92, 15.46 Burdett-Coutts v Hertfordshire County Council [1984] IRLR 91 .… 6.13, 6.24, 6.48, 11.10 Burger King Corporation v Hungry Jack’s Pty Ltd [2001] NSWCA 187; (2001) 69 NSWLR 558 .… 8.29, 8.31

Burgess v Mount Thorley Operations Pty Ltd (2003) 132 IR 400 .… 5.40, 5.73, 5.74, 5.102 Burke v Reander Pty Ltd (1996) 69 IR 346 .… 2.3, 6.15, 6.17, 14.108, 14.113 — v Royal Liverpool Hospital NHS Trust [1997] ICR 730 .… 3.34, 5.41, 5.108, 6.27, 6.33 Burmeister v Regina Multicultural Council (1985) 8 CCEL 144 .… 8.40 Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520; 120 ALR 42 .… 8.61 Burns v MAN Automatic (Aust) Pty Ltd (1986) 161 CLR 653; 69 ALR 11 . … 14.110 Burroughs Machines Ltd v Timmoney [1977] IRLR 404 .… 5.43 Burrows v Rhodes [1895–97] All ER 117 .… 8.35 — v — [1899] 1 QB 816 .… 8.35 Burton v Litton Business Systems Pty Ltd (1977) 16 SASR 162 .… 8.45, 14.45, 14.47, 14.115, 14.116, 14.125 — v Palmer [1980] 2 NSWLR 878 .… 9.6 — v Pinkerton (1867) LR 2 Ex 340 .… 7.16, 12.22, 14.80 Burton Group Ltd v Smith [1977] IRLR 351 .… 3.73, 5.111, 11.7 Burwood Night Patrol Pty Ltd v Lagarde (1993) 51 IR 118 .… 16.30, 16.31 Bus v Sydney County Council (1989) 167 CLR 78; 85 ALR 577 .… 8.67 Business Seating (Renovations) Ltd v Broad [1989] ICR 729 .… 16.7, 16.23 Businessworld Computers Pty Ltd v Australian Telecommunications Commission (1988) 82 ALR 499 .… 15.80, 15.89 Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; 212 ALR 357 . … 4.37 Butler v Fairclough (1917) 23 CLR 78 .… 8.57, 14.16, 14.83 Butt v Long (1953) 88 CLR 476 .… 16.7, 16.10, 16.35 — v M’Donald (1896) 7 QLJ 68 .… 8.33

Button v Thompson (1869) LR 4 CP 330 .… 9.26, 9.28, 9.49, 10.74 Byrne v Australian Airlines Limited (1995) 185 CLR 410; 131 ALR 422 .… 1.26, 1.30, 1.45, 3.48, 3.59, 4.29, 5.1, 5.3, 5.5, 5.40, 5.47, 5.48, 5.49, 5.50, 5.51, 5.54, 5.55, 5.57, 5.58, 5.60, 5.61, 5.62, 5.63, 5.66, 5.71, 5.73, 5.74, 5.75, 5.84, 5.85, 5.94, 5.95, 5.97, 5.101, 5.102, 8.22, 8.33, 9.9, 9.15, 9.18, 9.19, 9.20, 10.3, 10.60, 10.63, 10.81, 10.88, 11.23, 11.45, 11.48, 11.60, 14.35, 14.107, 15.17, 15.20, 15.43 — v Hoare [1965] Qd R 135 .… 7.54, 7.97 Byrne and Co v Leon Van Tienhoven and Co (1880) 5 CPD 344 .… 3.16 Byrnell v British Telecommunications Plc [2009] EWHC 727 .… 16.52 Byrnes v Treloar (1997) 77 IR 332 .… 7.17, 10.51, 10.54

C C and T Grinter Transport Services Pty Ltd, Re [2004] FCA 1148 .… 2.47 C Czarnikow Limited v Centrala Handlu Zagranicznego Rolimpex [1978] 2 All ER 1043 .… 12.38 — v — [1979] AC 351 .… 12.38 Cachia v State Authorities Superannuation Board (1993) 47 IR 254 .… 12.9, 12.20, 12.35, 12.53 Cactus Imaging Pty Ltd v Peters (2006) 71 NSWLR 9; [2006] NSWSC 717 . … 7.120, 7.124, 16.10, 16.14, 16.24, 16.27, 16.30, 16.31, 16.32, 16.33, 16.36, 16.38, 16.39, 16.40 Cadbury Schweppes Pty Ltd v Australian Liquor, Hospitality and Miscellaneous Workers’ Union (ALHMWU) (2000) 106 FCR 148; 185 ALR 480; [2000] FCA 1793 .… 4.3, 4.5, 4.8 Cadoux v Central Regional Council [1986] IRLR 131 .… 5.42, 6.6 Callo v Brouncker (1831) 4 Car & P 518; 172 ER 807 .… 7.17, 7.137, 10.2, 10.54 Calvin v Carr [1979] 1 NSWLR 1 .… 15.112 — v — [1980] AC 574 .… 15.112

Cam and Sons Pty Ltd v Sargent (1940) 14 ALJR 162 .… 2.21, 2.24, 2.25, 2.26, 2.27, 2.41 Camberwell Motors Pty Ltd (in liq), Re [1926] VLR 539 .… 13.29 Camden Exhibition & Display Ltd v Lynott [1966] 1 QB 555; [1965] 3 All ER 28 .… 5.40, 5.44 Camilla Cotton Oil Co v Granadex SA [1976] 2 Lloyd’s Rep 10 .… 15.103 Campbell v General Dynamics Government Systems Corporation, 407 F 3d 546 (2005) .… 3.8, 3.11 — v Frisbee [2002] EWCA 134 .… 7.111, 7.132, 10.76 — v Jones (1796) 6 TR 570; 101 ER 708 .… 9.13 — v University of Adelaide (2006) 150 IR 225; [2006] SASC 92 .… 3.19, 3.20, 3.24, 6.24 — v University of New South Wales (1992) 44 IR 56 .… 14.65 Campbelltown City Council v Mackay (1989) 15 NSWLR 501 .… 14.78 Canadian Aero Service Ltd v O’Malley (1973) 40 DLR (3d) 371 .… 7.34, 7.35, 7.91, 7.92 Canberra Bushrangers Baseball Team Pty Ltd v Byrne (SC(ACT), Higgins J, BC9405503, 21 December 1994, unreported) .… 16.29 Canberra Residential Developments Pty Ltd v Brendas (2010) 188 FCR 140; 273 ALR 601 .… 7.36, 7.37 Canizales v Microsoft Corporation (2000) 99 IR 426 .… 11.18 Canning v Temby (1905) 3 CLR 419 .… 9.55 Cantor Fitzgerald International v Bird [2002] IRLR 867 .… 8.24, 8.25 — v Callaghan [1999] ICR 639; 2 All ER 411 .… 1.1, 5.7, 6.17, 6.48, 9.56, 10.2 Canturi v Sita Coaches Pty Ltd (2002) 116 FCR 276; [2002] FCA 349 .… 4.4, 4.5 Caparo Industries Plc v Dickman [1990] 2 AC 605; 1 All ER 568 .… 16.54 Capital Aircraft Services Pty Ltd v Brolin (2006) 154 IR 352; [2006] ACTSC

80 .… 3.31, 3.33, 8.39, 8.46, 16.28, 16.29 — v — [2007] ACTCA 8 .… 5.52 Cardiff Savings Bank, Re [1892] 2 Ch 100 .… 7.24 Cardile v LED Builders Pty Ltd (1999) 198 CLR 380; 162 ALR 294 .… 15.5, 15.9, 15.25, 15.28 Carey v Commonwealth (1921) 30 CLR 132 .… 9.11, 9.59, 11.29, 11.30 Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256 .… 3.12, 3.23 Carlton & United Breweries (NSW) Pty Ltd v Bond Brewing New South Wales Ltd (1987) 76 ALR 633 .… 15.85 Carlton Cricket & Football Social Club v Joseph [1970] VR 487 .… 3.69, 6.37 Carmichael v National Power Plc [1999] 1 WLR 2042; 4 All ER 897; [1999] ICR 1226 .… 2.31, 3.32, 3.33, 5.14 Carminco Gold & Resources Ltd v Findlay & Co Stockbrokers (Underwriters) Pty Ltd (2007) 243 ALR 472; [2007] FCAFC 194 .… 3.84 Carpenters & Joiners Award, Re (1971) 17 FLR 330 .… 9.63 Carr v Blade Repairs Australia Pty Ltd (No 2) (2010) 197 IR 307; [2010] FCA 688 .… 11.18, 14.64, 14.65 — v Hadrill (1875) 39 JP 246 .… 12.14, 12.15 — v JA Berriman Pty Ltd (1953) 89 CLR 327 .… 10.51, 10.57, 10.66, 10.97 Carrier Australasia Ltd v Hunt (1939) 61 CLR 534 .… 2.37, 2.38 Carrol v Bird (1800) 3 Esp 201; 170 ER 588 .… 16.52 Carsan v Watts (1784) 3 Dougl 350; 99 ER 691 .… 5.75 Carter v Hyde (1923) 33 CLR 115 .… 3.16, 3.20, 6.42, 11.7, 13.33 — v The Dennis Family Corporation [2010] VSC 406 .… 7.22, 7.28, 10.39, 10.42, 10.48, 10.53, 10.54, 10.92, 11.79, 15.49 Cartin v Botley Garages Limited [1973] ICR 144 .… 3.27 Cartledge v E Jopling & Sons Ltd [1963] AC 758 .… 8.75

Casey v F J Walker Pty Ltd (1988) 27 IR 248 .… 9.16, 14.38, 15.113 — v — (1989) 29 IR 303 .… 9.16, 14.38 Casey’s Patents, Re [1892] 1 Ch 104 .… 3.39 Cassidy v Minister of Health [1951] 1 All ER 574; [1951] 2 KB 343 .… 1.45, 2.15 Castledine v Rothwell Engineering [1973] IRLR 99 .… 16.52 Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148; 67 ALR 553 .… 15.41, 15.78 Castro v Transfield (Qld) Pty Ltd (1983) 155 CLR 687; 47 ALR 715 .… 8.67 Castrol Australia Pty Ltd v EmTech Assocs Pty Ltd (1980) 51 FLR 184 .… 7.132, 7.133 Catamaran Cruisers Ltd v Williams [1994] IRLR 386 .… 2.3 Cathels v Commissioner of Stamp Duties [1962] SR (NSW) 455 .… 3.62 Caulfield v Broken Hill City Council (1995) 60 IR 221 .… 11.21 Cavallari v Premier Refrigeration (1952) 85 CLR 20 .… 3.20 Cavanagh v Ulster Weaving Co Ltd [1960] AC 145 .… 8.56, 8.68 Cavill Power Products Pty Ltd v Royle (1991) 42 IR 229 .… 2.32, 3.62, 5.23 Cayme v Allan, Jones and Co (1919) 35 TLR 453 .… 11.18 Ceccol v Ontario Gymnastic Federation (2001) 204 DLR (4th) 688 .… 11.18 Cedar Hill Flowers and Foliage Pty Ltd v Spierenburg [2003] 1 Qd R 482; [2002] QCA 348 .… 16.15, 16.17 Cell Tech Communication Pty Limited v Nokia Mobile Phones (UK) Limited (1995) 58 FCR 365; 136 ALR 733 .… 14.15, 14.74 Cellulose Acetate Silk Company Limited v Widnes Foundry (1925) Limited [1933] AC 20 .… 14.131, 14.134 Cementaid (NSW) Pty Ltd v Chambers (SC(NSW) Spender AJ, BC9504439, 29 March 1995, unreported) .… 7.49 Central De Kaap Gold Mines, Re (1899) 69 LJ Ch 18 .… 9.34

Centrestage Management Pty Ltd v Riedle (2008) 170 FCR 298; 77 IPR 550 . … 2.24 Century Insurance Co Ltd v Northern Ireland Road Transport Board [1942] AC 509; 1 All ER 491 .… 8.64 CEPU v ACI Operations Pty Ltd (2005) 147 IR 315; [2005] FCA 1662 .… 15.26 — v Corke Instrument Engineering (Australia) Pty Ltd (2005) 223 ALR 480; [2005] FCA 799 .… 5.104 Cerberus Software Ltd v Rowley [2001] ICR 376 .… 11.73, 14.103 CF Capital Plc v Willoughby [2011] EWCA Civ 1115 .… 11.3, 11.12 CFMEU v Henry Walker Eltin Contracting Pty Ltd (2001) 108 IR 409 .… 5.46 — v Nubrick Pty Ltd (2009) 190 IR 175 .… 2.23 CH Giles & Co Ltd v Morris [1972] 1 WLR 307; 1 All ER 960 .… 15.6, 15.17, 15.20, 15.21, 15.57, 15.58, 15.59 Chadburn v Sinclair Canada Oil Co (1966) 57 WWR 477 .… 11.48 Chakki v United Yeast Co Limited [1982] 2 All ER 446 .… 12.19, 12.21, 12.41, 12.44, 12.53 Chambers v James Cook University (1995) 61 IR 121 .… 7.140 Champtaloup v Thomas [1976] 2 NSWLR 264 .… 10.90 Chan v Zacharia (1984) 154 CLR 178; 53 ALR 417 .… 7.33, 7.36, 7.41, 7.46, 7.47, 7.48, 7.50, 7.98, 7.100, 15.120, 15.121, 15.138 Chandler v Grieves (1796) 2 H Bl 606; 126 ER 730 .… 12.13 Chaplin v Brogan (1998) 146 FLR 243; [1998] VSC 28 .… 4.36 — v Dunstan [1938] SASR 245 .… 8.64 — v Hicks [1911] 2 KB 786 .… 14.54 — v Leslie Frewin (Publishers) Ltd [1966] Ch 71; [1965] 3 All ER 764 .… 3.65 — v North-Western Railway Company (1861) 5 LT 601 .… 15.17

Chapman v Commissioner, Australian Federal Police (1983) 50 ACTR 23 .… 3.14, 3.72, 3.82, 5.93 — v Goonvean and Rostowrack China Clay Co Ltd [1973] ICR 310; 2 All ER 1063 .… 6.17 — v Hearse (1961) 106 CLR 112 .… 14.18 — v Michaelson [1909] 1 Ch 238 .… 15.92 — v Taylor [2004] NSWCA 456 .… 12.44 Chappel v Hart (1998) 195 CLR 232; 156 ALR 517 .… 14.15, 14.17 Chappell v Times Newspapers Ltd [1975] 2 All ER 233; [1975] 1 WLR 482; ICR 145 .… 9.24, 10.26, 11.11, 14.39, 15.17, 15.20, 15.22, 15.35, 15.36, 15.40, 15.52, 15.54 Charles Selz Limited’s Application, Re (1953) 71 RPC 158 .… 7.7, 7.102, 7.103, 7.105, 7.106 Chate v Commissioner of Police (1997) 76 IR 70 .… 15.100 Cheall v Association of Professional Executive Clerical and Computer Staff [1983] 2 AC 180 .… 5.48, 8.33, 10.60, 12.36 Chelsea Football and Athletic Co v Heath [1981] ICR 323 .… 6.50 Cheltenham BC v Laird [2009] IRLR 621; [2009] EWHC 1253 .… 7.19 Chenel Pty Ltd v Rayner (1994) 28 IPR 638 .… 7.128 Chesapeake & Ohio Railway Co v Kelly (1916) 241 US 485 .… 14.6 Chesterfield v Hamlet of Walton (1741) Carth 400; 90 ER 832 .… 1.36 Chew v The Queen (1992) 173 CLR 626; 107 ALR 171 .… 7.51 Chief Constable of North Wales Police v Evans [1982] 1 WLR 1155; 3 All ER 141 .… 15.93, 15.98, 15.106, 15.113 Chief Constable of West Yorkshire Police v Khan [2000] ICR 1169 .… 16.52 Chittick v Ackland (1984) 1 FCR 254; 53 ALR 143 .… 6.6, 6.21, 15.105 Chris Poulson Insurance Agencies Pty Ltd v National Mutual Life Association of Australasia Limited [1999] TASSC 40 .… 5.69

Christie v Permewen Wright and Co Ltd (1904) 1 CLR 693 .… 3.72 — v Qantas Airways Ltd (1996) 138 ALR 19 .… 5.60, 5.95, 5.101 — v — (1998) 193 CLR 280; (1998) 152 ALR 365 .… 5.60, 5.95, 5.101 Chugg v Pacific Dunlop Ltd (1990) 170 CLR 249 .… 8.58, 8.68 City and Hackney Health Authority v National Union of Public Employees [1985] IRLR 252 .… 5.44, 15.36 City Bank of Sydney v McLaughlin (1909) 9 CLR 615 .… 3.66 City of London Corporation v Appleyard [1963] 1 WLR 982; 2 All ER 834 . … 7.52, 7.54, 7.97, 15.133 City of Melbourne v Hamas Pty Ltd (1987) 62 LGRA 250 .… 15.41 City of Subiaco v Heytesbury Properties Pty Ltd [2001] WASCA 140 .… 12.47 Civil Service Association of Western Australia Inc v Director-General of Department for Community Development [2002] WASCA 241 .… 7.139, 7.140, 7.141 Clark v BET Plc [1997] IRLR 348 .… 8.29, 14.52 — v Clark Construction Initiatives Ltd [2008] ICR 635 .… 2.15, 2.28, 2.34 — v Local Government Training Authority SA Incorporated [2001] SASC 273 .… 12.27, 13.15 — v Nomura International Plc [2000] IRLR 766 .… 8.29, 8.32, 14.52 — v Vanstone (2004) 211 ALR 412; [2004] FCA 1105 .… 10.19 — v — (2005) 147 FCR 299; 224 ALR 666 .… 10.19 Clarke v Price (1819) 2 Wils Ch 157; 37 ER 270 .… 15.2, 15.15 Clarke and Metropolitan Meat Industry Board, Re [1967] AR (NSW) 16 .… 10.101 Clayton-Green v de Courville (1920) 36 TLR 790 .… 11.60, 14.113 Clayton Newbury Limited v Findlay [1953] 2 All ER 826 .… 7.55 Clifford Davis Ltd v W E A Records (Fleetwood Mac case) [1975] 1 All ER

237 .… 16.29 Clifton v Palumbo [1944] 2 All ER 497 .… 3.10 Climaze Holdings Pty Limited v Dyson (1995) 13 WAR 487; 58 IR 260 .… 2.9, 2.20, 2.41 Clissold v Country Roads Board [1981] VR 259 .… 8.63 Clothing and Allied Trades Union of Australia v Hot Tuna Pty Ltd (1988) 27 IR 226 .… 13.5 Clothing Trades Award 1982, Re (1990) 140 IR 123 .… 13.5 Clough Engineering Ltd v Oil & Natural Gas Corporation Ltd [2007] FCA 881 .… 4.13 Clouston & Co Ltd v Corry [1906] AC 122; [1904–7] All ER Rep 685 .… 7.137, 7.140, 7.141, 10.5 Clune, Re (1988) 14 ACLR 261 .… 8.34 Clunne v Nambucca Shire Council (1995) 63 IR 304 .… 14.58, 14.61, 14.77, 14.78, 14.79 CMS Dolphin Ltd v Simonet [2001] All ER (D) 294 (May); [2001] 2 BCC 600 .… 7.50, 7.59, 7.66, 7.89, 7.91, 7.92, 7.93, 11.3, 15.116, 15.120, 16.44 Coal & Allied Mining Services Pty Ltd v MacPherson (2010) 185 FCR 383; 270 ALR 414; 197 IR 95 .… 9.16, 9.59, 9.63 Coal Cliff Collieries Pty Ltd v Sijehama Pty Ltd (1991) 24 NSWLR 1 .… 3.52 Cobb-Alvarez v Union Pacific Corporation, 962 F Supp 1049 (1997) .… 3.12 Coco v AN Clark (Engineers) Ltd [1968] FSR 415 .… 7.117, 7.125, 7.128 — v — [1969] RPC 41 .… 7.130, 15.90 Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337; 41 ALR 367 .… 4.20, 5.9, 5.10, 5.15, 5.21, 5.24, 5.50, 5.53, 5.54, 5.55, 5.57, 5.58, 5.60, 5.63, 12.3, 12.10, 12.31, 12.33, 12.35 Cohen v Cohen (1929) 42 CLR 91 .… 7.52

— v Nichevic [1976] WAR 183 .… 11.45, 11.47 — v Peko-Wallsend Ltd (1986) 61 ALJR 57 .… 15.79 Cohen & Co v Ockerby & Co Ltd (1917) 28 CLR 288 .… 10.67, 14.40 Cohnstaedt v University of Regina [1995] 3 SCR 451 .… 8.39 Colbeam Palmer v Stock Affiliates Pty Ltd (1968) 122 CLR 25 .… 14.8, 15.122, 15.123, 15.124, 15.127, 15.129, 15.132 Coleman v Mirror Newspapers Ltd (1967) 10 FLR 426 .… 11.19 Colen v Cebrian (UK) Ltd [2004] ICR 568; [2003] EWCA Civ 1676 .… 4.23, 4.31 Coles Supermarkets Australia Pty Ltd v FKP Limited [2008] FCA 1915 .… 7.113 Colgan v Municipal Council of Toowoomba (1872) 3 QSCR 10 .… 11.19 Collie v Watts [1913] 15 WALR 97 .… 14.15 Collier v Sunday Referee Publishing Company Limited [1940] 2 KB 647; [1940] 4 All ER 234 .… 6.16, 8.37, 8.38, 8.40, 8.41, 8.45, 8.47, 11.75, 14.105, 14.110, 14.113, 14.116 Collins v Associated Greyhound Racecourses Ltd [1930] 1 Ch 1 .… 3.85 — v Godefroy (1831) 1 B & Ad 950; 109 ER 1040 .… 6.32 Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Cooperative Assurance Co of Australia Ltd (1931) 46 CLR 41 .… 2.11, 3.70, 3.83, 8.63, 8.64 Colour Control Centre Pty Ltd v Ty (1996) 39 AILR 5-058; [1996] AILR 431 .… 7.7, 7.35, 7.91, 15.120, 15.121, 15.123 Colvig v RKO General Inc, 232 Cal App 2d 56 (1965) .… 6.15 Combulk Pty Ltd v TNT Management Pty Ltd (1993) 113 ALR 214 .… 3.78 Commercial and General Insurance Co Ltd v Government Insurance Office of New South Wales (1973) 129 CLR 374 .… 7.27 Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447; 46 ALR 402 .… 4.10, 4.11, 4.12

Commercial Banking Company of Sydney Limited v RH Brown and Company (1972) 126 CLR 337 .… 7.19 Commercial Finance Co Ltd v Ramsingh-Mahabir [1994] 1 WLR 1297 .… 13.10 Commercial Plastics Ltd v Vincent [1964] 3 All ER 546 .… 16.35 Commission for the New Towns v Cooper (Great Britain) Ltd [1995] Ch 259; [1995] 2 All ER 929 .… 4.21 Commissioner for Corporate Affairs (Vic) v Bracht [1989] VR 821 .… 2.35, 13.26 Commissioner for Government Transport v Kesby (1972) 127 CLR 374 .… 9.32 — v Royall (1966) 116 CLR 314 .… 6.16, 8.48, 9.16 Commissioner for Railways (NSW) v Cavanough (1935) 53 CLR 220 .… 9.14, 9.15 — v O’Donnell (1938) 60 CLR 681 .… 7.141, 9.11, 9.59, 15.113 — v Scott (1959) 102 CLR 392 .… 14.130 Commissioner of Pay-Roll Tax v Mary Kay Cosmetics Pty Ltd [1982] VR 871 .… 2.6, 2.11, 2.18 Commissioner of Police v Ellis (CA(NSW), 2 July 1981, unreported) .… 11.30 — v Gordon [1975] 1 NSWLR 675 .… 9.61, 15.106 Commissioner of Stamp Duties (NSW) v Carlenka Pty Ltd (1995) 41 NSWLR 329 .… 4.20 Commissioner of State Revenue v Viewbank Properties Pty Ltd [2004] VSC 127; (2004) 55 ATR 501 .… 3.79, 3.81, 3.85 Commissioner of State Taxation v Cyril Henschke Pty Ltd (2010) 242 CLR 508; 272 ALR 440 .… 2.41, 13.30 Commissioner of Taxation v Day (2008) 236 CLR 163; 250 ALR 388 .… 7.10 — v De Luxe Red & Yellow Cabs Co-operative (Trading) Society Ltd (1998)

82 FCR 507 .… 2.40 — v Reliance Carpet Co Pty Ltd (2008) 236 CLR 342; 246 ALR 448 .… 10.3 Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64; 104 ALR 1 . … 14.11, 14.21, 14.22, 14.24, 14.48, 14.49, 14.54, 14.58, 14.91 — v Cornwell [2006] ACTCA 7 .… 8.30, 8.57, 8.75 — v Crothall Hospital Services (Aust) Ltd (1981) 54 FLR 439; 36 ALR 567 . … 3.68 — v John Fairfax & Sons Ltd (1980) 147 CLR 39; 32 ALR 485 .… 7.130 — v Lyon (1979) 24 ALR 300 .… 8.63 — v Oliver (1962) 107 CLR 353 .… 8.63 — v Sterling Nicholas Duty Free Pty Ltd (1972) 126 CLR 297 .… 15.102 — v Walsh (1980) 147 CLR 61; 32 ALR 500 .… 7.135 — v Welsh (1947) 74 CLR 245 .… 11.30 Commonwealth Bank of Australia v Finance Sector Union of Australia (2007) 157 FCR 329; 161 IR 262; [2007] FCAFC 18 .… 13.3, 13.4 — v Smith (1991) 102 ALR 453 .… 7.69, 7.71 Commonwealth Steamship Owners’ Association v Federated Seamen’s Union of Australasia (1923) 33 CLR 297 .… 3.72 Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing & Allied Services Union of Australia v ACI Operations Pty Ltd (2006) 150 IR 179; [2006] FCA 122 .… 14.34 — v QR Ltd (2010) 268 ALR 514; 198 IR 382; [2010] FCA 591 .… 13.12 — v — (2010) 204 IR 142; [2010] FCAFC 150 .… 13.12 Community and Public Section Union (CPSU) v Stellar Call Centres Pty Ltd [2000] FCA 1739 .… 15.86 — v Telstra Corp Ltd (2000) 99 IR 238; [2000] FCA 844 .… 15.9 — v — (2000) 108 FCR 52; 102 IR 394; [2000] FCA 1610 .… 4.8 Community and Public Sector Union v Telstra Corp Ltd (2005) 139 IR 141 .

… 5.23 Compton v Council of the County Borough of West Ham [1939] Ch 771 .… 12.15, 15.100 Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594; 92 ALR 193 .… 4.35, 4.36 Concrete Constructions Pty Ltd v Plumbers & Gasfitters Employees’ Union (No 2) (1987) 15 FCR 64; 72 ALR 415 .… 3.73 Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577; 231 ALR 663 .… 5.49, 8.33, 14.37 Concut Pty Ltd v Worrell (2000) 176 ALR 693; 103 IR 160 .… 3.5, 5.11, 5.49, 6.38, 6.39, 7.18, 7.20, 7.31, 7.34, 7.36, 7.37, 7.44, 7.61, 7.69, 7.100, 7.113, 7.114, 7.137, 8.13, 8.14, 8.18, 8.27, 10.3, 10.54, 10.87, 10.92 Condessa v WorkCover [2001] SAWCT 85 .… 3.15, 3.27 Condor v The Barron Knights Limited [1966] 1 WLR 87 .… 12.19, 12.43 Condren v Southport Workers Community Club Inc [2010] QSC 130 .… 10.103 Connelly v Wells (1994) 55 IR 73 .… 1.45, 2.8–2.10, 2.13, 2.15, 2.16, 2.19, 2.20, 2.24, 2.30, 2.31, 2.41, 5.23 Connolly v Sellars Arenascene Ltd [2001] ICR 760 .… 2.15, 2.21, 2.34 Connor v Grundy Television Pty Ltd [2005] VSC 466 .… 7.17, 7.28, 8.21, 10.20, 10.42, 10.48, 10.53, 10.58, 10.59 Consistent Group Ltd v Kalwak [2007] IRLR 560 .… 2.17, 2.21, 2.22, 2.27, 2.28 Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226; 64 ALR 481 .… 5.68, 5.69, 5.70, 5.71, 5.72 Construction, Forestry, Mining and Energy Union, Re; Ex p W J Deane & Son Pty Ltd (1994) 181 CLR 539; 125 ALR 16 .… 3.79, 3.80, 3.82 Construction, Forestry, Mining and Energy Union v Alfred (2011) 203 IR 78; [2011] FCAFC 13 .… 4.8

— v Australian Industrial Relations Commission (2001) 203 CLR 645; 178 ALR 61 .… 5.104 — v Clarke (2007) 164 IR 299; [2007] FCAFC 87 .… 3.73 — v Gordonstone Coal Management Pty Ltd (1997) 78 FCR 437 .… 5.94 — v Newcastle Wallsend Coal Co Ltd (1998) 88 IR 202 .… 11.72, 13.12 — v Pilbara Iron Company (Services) Pty Ltd (2010) 198 IR 173; [2010] FCA 822 .… 3.5, 8.38 — v — [2011] FCAFC 91 .… 3.5 Construction Industry Long Service Leave Board v Irving (1997) 74 FCR 587; 145 ALR 158 .… 13.23 Construction Industry Training Board v Labour Force Ltd [1970] 3 All ER 220 .… 2.24, 2.50, 2.51 Consul Development Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373; 5 ALR 231 .… 7.65, 15.71, 15.72, 15.74, 15.121 Continental C and G Rubber Company Proprietary Limited, The, Re (1919) 27 CLR 195 .… 12.49 Converform (Darwen) Limited v Bell [1981] IRLR 195 .… 12.43 Conway-Cook v Town of Kwinana (2001) 108 IR 421; [2001] WASCA 250 . … 10.60, 10.63, 10.97, 10.98, 14.47, 14.103, 14.107, 15.54 Coogee Esplanade Surf Motel Pty Ltd v Commonwealth (1983) 50 ALR 363 .… 3.68 Cook v CFP Management Pty Ltd (2006) 152 IR 358; [2006] QCA 215 .… 10.35, 10.51 — v Cook (1986) 162 CLR 376; 68 ALR 353 .… 8.67 — v Deeks [1916] 1 AC 554 .… 7.82 Cooke v Oxley (1790) 3 TR 653; (1790) 100 ER 785 .… 3.3 Coomber, Re [1911] 1 Ch 723 .… 7.34, 7.35 Cooper v Darwin Rugby League Inc (1994) 57 IR 238; 1 IRCR 130 .… 11.38, 13.11

— v Hunkin [1942] SASR 162 .… 6.14 — v The Queen (1880) 14 Ch D 311 .… 15.91 — v Wilson [1937] 2 KB 309 .… 7.13, 15.111 Cooper River School District v Traw 9 P 3d 280 (2000) .… 3.11, 3.16 Co-operative Insurance Society Ltd v Argyll Stores [1998] AC 1; [1997] 3 All ER 297 .… 15.12, 15.57, 15.58, 15.59, 15.66 Co-ordinated Industries Pty Ltd v Elliott (1998) 43 NSWLR 282 .… 7.68, 7.92, 7.129, 16.46 Coote v Granada Hospitality Limited [1999] IRLR 452 .… 16.52 Copyright Agency Limited v Victoria University of Technology (1994) 53 FCR 56; 125 ALR 278 .… 15.129 Coral Index Ltd v Regent Index Ltd [1970] FSR 13 .… 16.48 Coral Leisure Group Ltd v Barnett [1981] ICR 503 .… 4.23, 4.25 Corbette v National Commercial Bank of Dominica [2009] UKPC 32 .… 10.20 Corio Guarantee Corp Ltd v McCallum [1956] VLR 755 .… 9.38 Cornwall v Rowan (2004) 90 SASR 269; [2004] SASC 384 .… 3.83, 8.63 Cornwell v Commonwealth of Australia [2005] ACTSC 14 .… 5.5, 5.51, 8.30, 8.57, 8.75 — v — [2006] ACTCA 7 .… 5.5, 5.51 — v — (2007) 229 CLR 519; 234 ALR 148 .… 5.5, 5.51 Corporate Affairs Commission (Vic) v Drysdale (1978) 141 CLR 236; 22 ALR 161 .… 2.34 Corporation of the City of Burnside v Municipal Officers’ Association of Australia (1985) 10 IR 313 .… 3.80 Corporation of the City of Enfield v Development Assessment Commission (2000) 199 CLR 135; 169 ALR 400 .… 11.32 Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) (1987) 14 FCR 434; 74 ALR 428 .… 4.26, 7.124, 7.132, 7.133, 7.134

Costigan v Gray Bovier Engines Ltd (1925) 41 TLR 372 .… 11.19 Cotter v Huddart Parker Ltd (1941) 42 SR (NSW) 33 .… 8.61, 8.69 Couch v Steel (1854) 3 El & Bl 402; 118 ER 1193 .… 1.23, 1.47, 2.1 Coulls v Bagot’s Executor and Trustee Co Ltd (1967) 119 CLR 460 .… 3.35, 3.61, 3.62, 5.105, 5.109, 5.112, 15.42 Coulthard v Disco Mix Club Ltd [1999] 2 All ER 457 .… 15.133 — v State of South Australia (1995) 63 SASR 531 .… 7.58, 7.128, 7.129 Council of the Shire of Sutherland v James [1963] 63 SR (NSW) 273 .… 5.93 Council of the Shire of Wyong v Shirt (1980) 146 CLR 40; 29 ALR 217 .… 8.65, 8.66, 8.67 Countess of Plymouth v Throgmorton (1688) SC 3 Mod 153; 87 ER 99 .… 9.24 Courtaulds Ltd v Sibson [1988] ICR 451 .… 5.24, 5.59, 6.19, 6.20 Courtaulds Northern Textiles Ltd v Andrew [1979] IRLR 84 .… 7.141, 8.25, 8.27, 10.54 Courtney v Australian Postal Commission (1978) LBC Ind Arb Serv Current Review 32 .… 9.44 Coutts v Commonwealth (1985) 157 CLR 91; 59 ALR 699 .… 5.91, 11.4, 11.23, 11.30 Coward v Gunns Veneer Proprietary Ltd [1998] FCA 696 .… 7.22, 7.140 — v Motor Insurers’ Bureau [1962] 1 All ER 531 .… 3.44 Cowasjee Nanabhoy v Lallbhoy Vullubhoy (1876) LR 3 Ind App 200 .… 8.45 Cowey v Liberian Operations Ltd [1966] 2 Lloyd’s LR 45 .… 6.13, 6.23, 6.25, 11.10 Cox v Journeaux (No 2) (1935) 52 CLR 713 .… 13.28 — v Philips Industries Ltd [1976] ICR 138 .… 14.77 — v Sun Alliance Life Limited [2001] IRLR 448; [2001] EWCA Civ 649 .…

16.50, 15.56, 16.58, 16.59 Crabtree-Vickers Pty Ltd v Australian Direct Mail Advertising & Addressing Co Pty Ltd (1975) 133 CLR 72; 7 ALR 527 .… 3.78, 3.87 Craftsmen Restoration & Renovations Pty Ltd v Boland [2011] NSWCA 147 .… 10.104 Cranford-Webster v MacFarlane [1947] SASR 162 .… 9.56 Cranleigh Precision Engineering Ltd v Bryant [1965] 1 WLR 1293; [1964] 3 All ER 289 .… 7.58, 7.59, 7.123, 7.127, 7.128, 7.135, 10.21, 10.28, 10.60, 10.94, 15.69, 15.90, 16.43 Cranston v Canadian Broadcasting Corporation (1994) 2 CCEL (2d) 301 .… 8.40, 11.8, 11.69, 14.91 Cray v Tynan Motors Pty Limited (1992) 41 IR 173 .… 11.57, 11.58, 11.60, 11.61 Creative Brands Pty Ltd v Franklin [2001] VSC 338 .… 16.47 Credit Suisse Management Ltd v Armstrong [1996] ICR 882 .… 16.29, 16.32 Creen v Wright (1876) 1 CPD 591; [1874–80] All ER Rep 747; (1876) 35 LT 339 .… 11.48, 11.59 Crescendo Management Pty Ltd v Westpac Banking Corp (1988) 19 NSWLR 40 .… 4.2–4.6 Cresswell v Board of Inland Revenue [1984] 2 All ER 713 .… 6.9, 9.17, 9.43, 9.44, 9.59 Crew v Municipality of Prospect (1890) 6 WN 168 .… 11.46 Crewdson v NSW Department of Community Services (2005) 145 IR 376; (2005) 152 IR 48 .… 4.10 Cricklewood Property & Investment Trust Limited v Leighton’s Investment Trust Limited [1945] AC 221; [1945] 1 All ER 252 .… 12.9 Criminale v State Superannuation Board (1987) 22 IR 240 .… 11.21 — v — (1988) 26 IR 13 .… 11.21 — v — (1989) 88 ALR 1; 29 IR 111 .… 11.21

Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1; 167 ALR 1 .… 8.56, 8.57, 8.59, 8.61, 8.65, 8.68, 16.54 Crisdee v Bolton (1827) 3 C & P 240 .… 14.132 Crisp v Holden (1910) 54 SJ 784 .… 3.72, 11.16, 15.11, 15.16, 15.22, 15.75 Cromer v Harry Rickards’ Tivoli Theatres Ltd [1921] SASR 325 .… 10.90, 11.48 Cronk v Canadian General Insurance Co (1995) 14 CCEL (2d) 1 .… 11.58 Crossley v Faithful & Gould Holdings Ltd [2004] 4 All ER 447; [2004] ICR 1615 .… 5.50, 5.51, 8.30 Crouch v Martin (1707) 2 Vern 595; 23 ER 987 .… 6.43 Crown Dilmun v Sutton [2004] 1 BCLC 468 .… 7.20 Csomore v Public Service Board of New South Wales (1986) 10 NSWLR 587 .… 8.52, 9.6, 9.16, 9.37, 9.43, 9.44, 9.59 CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345; 146 ALR 402 .… 15.9 Cuckson v Stones (1859) 1 El and El 248; 120 ER 902 .… 10.33, 12.14, 12.15 Culbert v Clyde Engineering Co Ltd (1936) 54 CLR 544 .… 3.43 Cullen v Trappell (1980) 146 CLR 1; 29 ALR 1 .… 14.30 Cultus Petroleum v OMV Australia Pty Ltd (1999) 32 ACSR 1; [1999] NSWSC 422 .… 15.70 Cumbria County Council v Dow (No 2) [2008] IRLR 109 .… 3.5, 6.4, 6.39 Cummaudo v Aerospace Technologies of Australia (1990) EOC 92-316 .… 14.33 Cummings v Lewis (1993) 113 ALR 285 .… 4.40 Cundy v Lindsay (1878) 3 App Cas 459 .… 4.18 Curling v Securior Ltd [1992] IRLR 549 .… 6.18 Currie v Misa (1875) LR 10 Ex 153; (1876) 1 AC 554 .… 3.34, 6.27

Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337 .… 5.52, 8.37, 8.38, 8.39, 8.40, 8.49, 14.39, 15.28, 15.33, 15.34, 15.53, 15.64, 16.9, 16.13, 16.14, 16.19, 16.29 Curtin v University of New South Wales (No 2) [2008] NSWSC 1236 .… 4.13, 4.36 Curtis v Perth and Fremantle Bottle Exchange Co Ltd (1914) 18 CLR 17 .… 2.26 Custodial Ltd v Cardinal Financial Services Ltd [2005] 2 Qd R 115; [2004] QSC 452 .… 11.4 Cutler v Derwent Howard Media Pty Ltd [2011] FCA 939 .… 7.81 Cutter v Powell (1795) 6 TR 320; 101 ER 573 .… 9.22, 9.23, 9.24, 9.26, 9.29, 9.34, 9.41 Cuttler v Commissioner of the Queensland Police Service (2010) 198 Ir 186; [2010] QSC 286 .… 3.72 Czatyrko v Edith Cowan University (2005) 213 ALR 349 .… 8.60, 8.61, 8.67, 8.70, 8.73

D D v M [1996] IRLR 192 .… 16.18 D v National Society for Prevention of Cruelty to Children [1978] AC 171; [1977] 1 All ER 589 .… 7.131 D Galambos & Son Pty Ltd v McIntyre (1974) 5 ACTR 10 .… 9.52 Da Costa v Cockburn Salvage & Trading Pty Ltd (1970) 124 CLR 192 .… 8.56, 8.66, 8.70, 8.71 Dacas v Brook Street Bureau (UK) Ltd [2003] IRLR 190 .… 2.12 Dadey v Edith Cowan University (1996) 70 IR 295 .… 11.38, 13.11 Daemar v Industrial Commission of New South Wales (1988) 24 IR 370 .… 13.28 Dainford Ltd v Smith (1985) 155 CLR 342; 58 ALR 285 .… 10.31 Dairy Crest Ltd v Pigott [1989] ICR 92 .… 15.49, 15.83

Dais Studio Pty Ltd v Bullet Creative Pty Ltd (2007) 165 FCR 92; 74 IPR 512 .… 7.115, 7.125, 7.126, 7.127, 7.128 Dal v Orr [1980] IRLR 413 .… 6.6, 6.7 Dale v William McCulloch and Co (Ltd) (1883) 9 VLR (L) 136 .… 6.39, 11.18 Dalgety v Husband (1878) 4 VLR 432 .… 11.45 Dalgety Australia Ltd v Harris [1977] 1 NSWLR 324 .… 3.21 Dalgety Farmers Ltd v Bruce (1995) 12 NSWCCR 36 .… 2.27, 2.46 Dalgety Wine Estates Pty Ltd v Rizzon (1979) 141 CLR 552; 26 ALR 355 . … 15.28, 15.29 Damevski v Giudice (2003) 133 FCR 438; 202 ALR 494; 129 IR 53 .… 2.8, 2.12, 2.14, 2.24, 2.26, 2.27, 2.31, 2.46, 2.48, 2.50–2.52, 3.4, 3.5, 3.6, 3.40, 3.44, 5.24 Daniels v Anderson (1995) 37 NSWLR 438 .… 7.25 Danowski v Henry Moore Foundation (1996) 140 SJLB 101 .… 5.69, 5.71 Danvers v Commissioner for Railways (NSW) (1969) 122 CLR 529 .… 8.63 Daraydan Holdings Limited v Solland International Limited [2005] Ch 119; 4 All ER 73 .… 7.95, 7.99, 15.136 Darbishire v Warran [1963] 1 WLR 1067; 3 All ER 310 .… 14.98 Darkinjung Pty Ltd v Darkinjung Local Aboriginal Land Council (2006) 203 FLR 394; [2006] NSWSC 1008 .… 3.68 Darlow v Edwards (1862) 1 HC 547; 158 ER 1002 .… 9.10, 10.65, 14.35 Dartmouth Ferry Commission v Marks (1904) 34 SCR 366 .… 12.16, 12.47 Darvall v North Sydney Brick and Tile Co Ltd (1988) 14 ACLR 474 .… 3.68 Dataflow Computer Services Pty Ltd v Goodman (1999) 168 ALR 169; [1999] FCA 1625 .… 4.35–4.37 Daugars v Rivaz (1860) 28 Beav 233; 54 ER 355 .… 15.16 David Jones Ltd v Cukeric (1997) 78 IR 430 .… 4.2

— v Federated Storemen and Packers Union of Australia (NSW) (1985) 14 IR 75 .… 15.50 David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353; 109 ALR 57 .… 16.4 David Syme & Co Ltd v General Motors-Holden’s Ltd [1984] 2 NSWLR 294 .… 7.133 Davidson v Mould (1944) 69 CLR 96 .… 8.63 Davie v New Merton Board Mills Ltd [1959] AC 604 .… 8.73 Davies v Collins [1945] 1 All ER 247 .… 6.41, 6.42, 9.53 — v Davies (1887) 36 Ch D 359 .… 16.22 — v Ebbw Vale Urban District Council (1911) 27 TLR 543 .… 12.14 — v Rhondda District Council (1918) 87 LJKB 166 .… 3.10 — v Smith (1938) 12 ALJR 258 .… 3.20 Davis v Foreman [1894] 3 Ch 654 .… 11.14, 11.22, 15.29 — v Marshall (1861) 4 LR 216 .… 11.43, 11.47 — v Mobil Oil Australia Ltd (1988) 12 NSWLR 10 .… 8.64 Davis Contractors Ltd v Fareham UDC [1956] AC 696; 2 All ER 145 .… 12.3, 12.9, 12.30, 12.40 Davison v Vickery’s Motors Ltd (1925) 37 CLR 1 .… 3.79 Daw v Flinton Pty Ltd (1998) 85 IR 1 .… 8.13 Dawnay Day & Co Ltd v De Braconier D’Alphen [1998] ICR 1068 .… 16.27, 16.37 Dawson (dec’d), Re (1966) 84 WN (Pt 1) (NSW) 399 .… 15.116 Day v Mead [1987] 2 NZLR 443 .… 15.116 De Bussche v Alt (1878) 8 Ch D 286 .… 9.54 De Francesco v Barnum (1890) 45 Ch D 430 .… 3.65, 4.25, 15.2, 15.18, 15.36 De Garis v Neville Jeffress Pidler Pty Ltd (1990) 95 ALR 625 .… 7.110

De Stempel v Dunkels [1938] 1 All ER 238 .… 11.44 Dearden v Tasmanian Timber Corporation (1907) 3 Tas LR 23 .… 11.43, 11.45 Deatons Pty Ltd v Flew (1949) 79 CLR 370 .… 8.63, 8.64 Decor Corporations Pty Ltd v Dart Industries Inc (1991) 33 FCR 297; 104 ALR 621 .… 15.120 — v — (1993) 179 CLR 101; 116 ALR 385 .… 14.8, 14.16, 15.120, 15.122, 15.123, 15.124, 15.128, 15.131 Decro-Wall International SA v Practitioners in Marketing Ltd [1971] 1 WLR 361; 2 All ER 216 .… 9.9, 9.18, 9.19, 10.2, 10.11, 10.31, 10.44, 10.48, 10.64, 10.66, 10.78, 11.10, 11.68, 11.69, 13.20, 14.35, 14.37, 14.38, 15.15 Deeson Heavy Haulage Pty Ltd v Cox (2009) 82 IPR 521; [2009] QSC 277 . … 7.7, 7.35, 7.41, 7.50, 7.67, 7.81, 7.84, 7.89, 7.92, 7.113, 7.115, 7.124, 7.127, 7.128, 7.129, 7.130, 15.60, 15.116 Del Casale v Artedomus (Aust) Pty Ltd (2007) 73 IPR 326; (2007) 165 IR 148; [2007] NSWCA 172 .… 7.2, 7.30, 7.35, 7.56, 7.113, 7.115, 7.116, 7.117, 7.118, 7.120, 7.125, 10.76, 15.115, 16.25, 16.38, 16.39, 16.40, 16.41, 16.43, 16.44, 16.46 Delaney v Staples [1992] 1 AC 687; 1 All ER 944; [1992] ICR 483 .… 9.9, 9.14, 9.18, 9.50, 10.63, 11.72, 11.73, 11.75, 11.78, 14.35, 14.101, 14.102, 14.103, 14.104, 14.125 Dellys v Elderslie Finance Corporation Ltd (2002) 132 IR 385; [2002] WASCA 161 .… 13.8 Delooze v Healey [2007] WASCA 157 .… 7.137, 8.13, 8.14, 8.18, 8.18 Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31; 110 ALR 608 .… 4.37, 5.20 Denham v Midland Employers Mutual Assurance Ltd [1955] 2 QB 437; [1955] 2 All ER 561 .… 2.14, 2.47, 2.49, 6.40 Denham and Co, Re (1883) 25 Ch D 752 .… 7.24 Denmark Productions Limited v Boscobel Productions Limited [1969] 1 QB

699; [1968] 3 All ER 513 .… 9.9, 9.19, 12.37, 15.126 Denny, Mott and Dickson Limited v James B Fraser and Co Limited [1944] AC 265 .… 12.35, 12.47 Department of Justice v Lunn (2006) 158 IR 410 .… 5.18 Deputy Commissioner of Taxation v Austin (1998) 28 ACSR 565 .… 2.34 — v Dick (2007) 242 ALR 152; [2007] NSWCA 190 .… 7.74 — v Robertson (2009) 234 FLR 35; [2009] NSWSC 597 .… 11.6 Derksen v WASA Insurance Co (1994) 4 BCLR (3d) 73 .… 6.26, 6.33, 11.18 Deta Nominees Pty Ltd v Viscount Plastic Products Pty Ltd [1979] VR 167 . … 7.114, 7.125, 16.46 Deutz Australia Pty Ltd v Skilled Engineering Ltd (2001) 162 FLR 173; [2001] VSC 194 .… 2.14, 2.47, 2.49, 6.45 DevefiPty Ltd v Mateffy Pearl Nagy Pty Ltd (1993) 113 ALR 225 .… 5.11, 5.49, 5.50, 6.41, 6.42 Devonald v Rosser & Sons [1906] KB 728 .… 3.31, 5.52, 5.60, 5.70, 8.37, 8.39, 8.42, 8.43, 9.56, 9.63, 11.17, 14.56 Dewes v Fitch [1920] 2 Ch 159 .… 16.39 Dhu v Total Corrosion Control Pty Ltd [2002] WASCA 173 .… 8.73 Diamond Stylus Co Ltd v Bauden Precision Diamonds Ltd [1972] FSR 177 . … 16.25, 16.48 DIB Group Pty Ltd v Cole [2009] NSWCA 210 .… 8.72, 8.73 Dibb v Federal Commissioner of Taxation (2003) 53 ATR 290; [2003] FCA 673 .… 14.29 Dibb v Commissioner of Taxation (2004) 136 FCR 388; 207 ALR 151; [2004] FCAFC 126 .… 13.4, 13.5 Dick v Comvergent Communications (2000) 34 ACSR 86 .… 2.37 Dickson v Pharmaceutical Society of Great Britain [1967] Ch 708; 2 All ER 558 .… 3.67 — v — [1970] AC 403; [1968] 2 All ER 686 .… 3.67

Dietman v Brent London Borough Council [1987] ICR 737 .… 10.93, 10.98, 11.14, 11.15, 14.62, 15.22, 15.54, 15.62 — v — [1988] ICR 852 .… 10.98, 15.54, 15.62 Dietrich v Dare (1980) 30 ALR 407 .… 3.31, 3.41, 3.43 Digital Pulse Pty Limited v Harris (2002) 40 ACSR 487; [2002] NSWSC 33 . … 7.7, 7.46, 7.51, 7.62, 7.82, 7.85, 7.86, 7.94, 7.128, 14.1, 14.16, 15.74, 15.115, 16.25 — v — (2003) 56 NSWLR 298; 197 ALR 626; [2003] NSWCA 10 .… 7.7, 7.46, 7.51, 7.62, 7.82, 7.85, 7.86, 7.94, 7.128, 14.1, 14.16, 15.74, 15.115, 16.25 Dillon v Gange (1941) 64 CLR 253 .… 2.40 Dimos v Hanos [2001] VSC 173 .… 14.1 Dimskal Shipping Co SA v International Transport Workers Federation [1992] 2 AC 152; [1991] 4 All ER 871 .… 4.2, 4.3, 4.5, 4.7 Dingjan, Re; Ex p Wagner (1995) 183 CLR 323; 128 ALR 81 .… 10.73 Dinte v Hales [2009] QSC 63 .… 7.44, 7.81, 7.82, 7.86, 7.96, 14.1 Director-General of Education v Suttling (1987) 162 CLR 427; 69 ALR 193 . … 5.92, 6.14, 11.29, 11.30, 11.35, 14.41 Director-General of the Department of Corrective Services v Mitchelson (1992) 26 NSWLR 648 .… 11.5 Director of Posts and Telegraphs v Abbott (1974) 2 ALR 625; (1974) 22 FLR 157 .… 3.78 Director of Public Prosecutions (Vic) v Le (2007) 232 CLR 562; 240 ALR 204 .… 6.34 Dixon v Commonwealth of Australia (1981) 51 ALR 173 .… 9.61, 11.34 — v South Australian Railways Commissioner (1923) 34 CLR 71 .… 10.20, 11.16 — v Stenor Ltd [1973] ICR 157 .… 11.75 D’Lima v Board of Management, Princess Margaret Hospital of Children (1995) 64 IR 19 .… 5.18, 11.20

DMK Real Estate Limited v Lilliebridge (1992) 108 FLR 64 .… 7.55 Doe d Childe v Willis (1850) 5 Ex 894; 155 ER 391 .… 15.16 Doherty v Allman (1878) 3 App Cas 709 .… 15.28 Dome Resources NL v Silver (2008) 72 NSWLR 693; [2008] NSWCA 322 . … 3.28, 3.39, 3.62, 5.112, 6.26, 6.31, 6.33 Don King Productions Inc v Warren [1998] 2 All ER 608 .… 6.41, 6.42, 6.43 — v — [1999] 2 All ER 218; [1999] 3 WLR 276 .… 6.40, 6.41, 6.42, 6.43, 9.53 — v — [2000] Ch 291 .… 6.40, 6.41, 6.42, 6.43, 9.53 Donelan v Kerrby Constructions Limited [1983] ICR 237 .… 5.78 Dorman Long and Co Ltd v Carroll [1945] 2 All ER 567 .… 6.12 D’Ortenzio v Telstra (No 2) (1998) 82 IR 52 .… 11.38, 13.11 Dougan v Ley (1946) 71 CLR 142 .… 15.41 Douglas v Hello! Ltd (No 2) [2005] 4 All ER 128 .… 7.112 Dover Fisheries Pty Ltd v Bottrill Research Pty Ltd (1994) 63 SASR 557 .… 5.49, 10.92 Dovuro Pty Ltd v Wilkins (2000) 105 FCR 476; 182 ALR 481; [2000] FCA 1902 .… 5.68 Dowden and Pook Ltd v Pook [1904] 1 KB 45 .… 16.35 Dowling v Halifax (City) [1998] 1 SCR 22 .… 11.59 Down v Pinto (1854) 9 Ex 326; 156 ER 139 .… 11.5, 11.46 Downe v Sydney West Area Health Service (No 2) (2008) 71 NSWLR 633; 174 IR 385; [2008] NSWSC 159 .… 5.104, 6.23, 7.43, 8.13, 8.14, 8.16, 8.22, 8.25, 8.29, 8.30, 8.38, 8.41, 8.47, 8.53, 8.55, 11.30, 15.11, 15.35, 15.37, 15.39, 15.40, 15.100 Dowson & Mason Limited v Potter [1986] 2 All ER 418 .… 15.115 Doyle v ASIC (2005) 223 ALR 218 .… 7.51 — v Sydney Steel Co Ltd (1936) 56 CLR 545 .… 3.32

— v White City Stadium Ltd [1935] 1 KB 110 .… 3.65 DPC Estates Pty Ltd v Grey [1974] 1 NSWLR 443 .… 15.74 Dr Martens Australia Pty Ltd v Bata Shoe Company of Australia Pty Ltd (1997) 75 FCR 230; 145 ALR 233 .… 15.114 Drake Personnel Ltd v Beddison [1979] VR 13 .… 7.120, 7.127, 15.88, 16.25, 16.35, 16.38, 16.39, 16.46 Driscoll v Australian Royal Mail Steam Navigation Co (1859) 1 F&F 458 .… 6.16, 6.19, 8.37, 8.47 Driver Recruitment Pty Ltd v Wedeco AVP Pty Ltd [2008] NSWCA 290 .… 7.19, 16.50 Drury v BHP Refractories Pty Ltd (1995) 62 IR 467 .… 7.141, 11.38, 13.11 Dryden v Greater Glasgow Health Board [1992] IRLR 469 .… 6.9 DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423; 19 ALR 223 .… 5.10, 10.15, 10.30, 10.31, 10.104, 14.39 Dudley Buildings Pty Ltd v Rose (1933) 49 CLR 84 .… 3.81 Duke v Reliance Systems Ltd [1982] ICR 449 .… 5.69, 5.78 Duke Group Ltd (in liq) v Pilmer (1999) 31 ACSR 213 .… 7.49 Duncan v Lipscombe Child Care Services Inc (2006) 150 IR 471; [2006] FCA 458 .… 4.10, 4.13, 4.36, 6.21 Dunford & Elliott Ltd v Johnson & Firth Brown Ltd [1978] FSR 143 .… 7.130 Dunham v Randwick Imaging Pty Limited (1994) 122 ALR 323; (1994) 1 IRCR 54 .… 15.62 Dunk v George Waller & Sons Ltd [1970] 2 QB 163; 2 All ER 630 .… 3.43, 8.41 Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Company Ltd [1915] AC 79 .… 14.131, 14.133, 14.134, 14.135 — v Selfridge & Co Ltd [1915] AC 847 .… 3.29, 3.34 Dunn v King [1896] 1 QB 116 .… 3.83

— v MacDonald [1897] 1 QB 401 .… 3.83 — v — [1897] 1 QB 555 .… 3.83 — v Queen [1896] 1 QB 116 .… 11.30 — v Sayles (1844) 5 QB 685; 114 ER 1408 .… 3.31, 8.38, 8.46 — v Sydney College of the Arts (1987) 21 IR 405 .… 15.61 Dunnachie v Kingston-upon-Hull City Council [2005] 1 AC 226; [2004] 3 All ER 1011 .… 14.33, 14.94 Dunstan v National Mutual Life Association of Australasia Ltd (1992) 5 VIR 72 .… 6.6, 11.57, 11.58, 11.59, 14.112, 14.113 Duyvelshaff v Cathcart & Ritchie Ltd (1973) 1 ALR 125; 47 ALJR 410 .… 8.70 Dwyer v Housing Industry Association Ltd [2009] VCAT 411 .… 13.29 Dye v Commonwealth Securities Limited [2010] FCA 720 .… 8.29 Dyer v Mekinda Snyder Partnership Inc (1998) 35 CCEL (2d) 299 .… 11.18 — v Peverill (1979) 2 NTR 1 .… 11.55, 11.57, 11.59, 11.60, 11.62, 14.45 Dyson v Attorney-General [1911] 1 KB 410 .… 15.92, 15.103

E E & L Constructions Pty Ltd, Re (1981) 28 SASR 154 .… 13.23 E Worsley & Co Ltd v Cooper [1939] 1 All ER 290 .… 7.127, 7.128, 7.129, 16.46 Earney v Australian Property Investment Strategic Pty Ltd [2010] VSC 621 . … 6.15, 6.16, 10.2, 14.57, 14.103 Earth Force Personnel Pty Ltd v EA Negri Pty Ltd [2010] VSC 426 .… 16.5 Easling v Mahoney Insurance Brokers (2001) 78 SASR 489; [2001] SASC 22 .… 6.9, 6.14, 6.16, 8.13, 8.20, 8.25, 10.31, 10.36, 10.52, 10.85, 10.99, 10.103 Eastham v Newcastle United Football Club Ltd [1964] Ch 413; [1963] 3 All ER 139 .… 16.5

— v — [1964] Ch 413 .… 16.5 Eastwood v Magnox Electric Plc [2005] 1 AC 503; [2004] 3 All ER 991 .… 8.13, 8.14, 8.15, 8.16, 8.18, 8.27, 8.31, 8.33, 10.8, 10.36, 10.78, 11.24, 14.69, 14.72, 14.73, 14.74, 14.76, 14.94 Eaton v Robert Eaton Ltd [1988] ICR 302 .… 2.34 — v Western (1882) 9 QBD 636 .… 6.20 Ecrosteel Pty Ltd v Perfor Printing Pty Ltd (1996) 37 IPR 22 .… 7.81, 7.90, 7.128 Edelsten v Richmond (1987) 11 NSWLR 51 .… 7.23 Eden v Ridsdales Railway Lamp and Lighting Company Limited (1889) 23 QBD 368 .… 7.96, 15.138 Edisonia Limited v Forse (1908) 25 RPC 546 .… 7.9, 7.102, 7.103, 7.105, 7.106 Edmonds v Donovan (2005) 12 VR 513; [2005] VSCA 27 .… 7.91, 7.92 — v Lawson [2000] QB 501 .… 3.43, 8.41 EdSonic Pty Ltd v Cassidy (2010) 189 FCR 271; 272 ALR 589; [2010] FCA 1008 .… 7.104, 7.106, 7.110 Edward Keller (Australia) Pty Ltd v Hennelly (1990) 35 IR 464 .… 3.11, 11.5, 11.50, 11.61 Edwards v Attorney-General (2004) 60 NSWLR 667; 208 ALR 605; [2004] NSWCA 272 .… 7.74 — v Chesterfield Royal Hospital NHS Foundation Trust [2010] ICR 1181; [2010] EWCA Civ 571 .… 14.61, 14.62, 14.69, 14.73, 14.74, 14.75, 14.76, 14.79, 14.83, 14.88, 14.89, 14.92, 14.93, 14.94, 14.115 — v — [2011] UKSC 58; [2011] QB 339 .… 8.13, 14.61, 14.62, 14.69, 14.73, 14.74, 14.75, 14.76, 14.79, 14.83, 14.88, 14.89, 14.92, 14.93, 14.94, 14.115 — v — [2012] 2 All ER 278 .… 8.13 — v Clinch [1982] AC 845 .… 2.35 — v Commonwealth (1935) 54 CLR 313 .… 11.31

— v Gietzelt (1983) 8 IR 129 .… 8.37, 9.11, 9.59 — v Levy (1860) 2 F & F 94; 175 ER 974 .… 7.17, 7.137, 10.54 — v Newland & Co [1950] 2 KB 534 .… 9.53, 9.54 — v North Goonyella Coal Mines Pty Ltd [2005] QSC 242 .… 5.61, 15.100 — v Skyways Ltd [1964] 1 All ER 494 .… 3.40, 3.45, 3.59, 3.73, 5.111 — v SOGAT [1971] Ch 354 .… 14.108, 14.113 EFG Australia Limited v Kennedy [1999] NSWSC 922 .… 7.94, 7.98, 7.100, 15.120 Egan v Maher (No 2) (1978) 35 FLR 252 .… 3.5, 10.78 Egg Stores (Stamford Hill) Limited, The v Leibovici [1976] IRLR 376 .… 12.19, 12.44, 12.45, 12.47, 12.53 Ehrman v Bartholomew [1898] 1 Ch 671 .… 15.31 Eising v Wright Trading Pty Ltd [2007] QSC 17 .… 14.11 Elcom v Electrical Trades Union of Australia, New South Wales Branch (1983) 5 IR 267 .… 7.28 Elders Trustee & Executor Co Ltd v EG Reeves Pty Ltd (1987) 78 ALR 193 . … 15.72 Elder’s Trustee and Executor Co Ltd v Commonwealth Homes and Investment Co Ltd (1941) 65 CLR 603 .… 10.103 Elderton v Emmens (1848) 6 CB 160 .… 14.108 Eldridge v Kemblawarra Child and Family Centre [1999] NSWCA 395 .… 3.41 Electric Power Transmission Pty Ltd v Cuiuli (1961) 104 CLR 177; 34 ALJR 478 .… 8.68 Electric Transmission Limited v Dannenberg (1948) 65 RPC 439 .… 7.109 — v — (1949) 66 RPC 183 .… 7.109 Electrical Trades Union of Australia v Illawarra County Council (1982) 3 IR 101 .… 9.19

Electrolux Home Products Pty Ltd v Australian Workers’ Union (2004) 221 CLR 309; 209 ALR 116 .… 5.104 Electrolux Limited v Hudson [1977] FSR 312 .… 7.63, 7.85, 7.102, 7.104, 7.105, 16.28 Electronic Industries Ltd v David Jones Ltd (1954) 91 CLR 288 .… 8.33 Elkin and Co Pty Ltd v Specialised Television Installations Pty Ltd [1961] SR (NSW) 165 .… 2.41 Elko v Electrical Trades Union of Australia, New South Wales Branch (1983) 5 IR 267 .… 10.54 Elliott v Kodak Australasia Pty Ltd (2001) 108 IR 23; [2001] FCA 807 .… 11.51 — v — (2001) 129 IR 251; [2001] FCA 1804 .… 11.51 — v Liggens [1902] 2 KB 84 .… 12.14 — v Nanda (2001) 111 FCR 240; [2001] FCA 418 .… 14.34, 14.85 — v Reading [1999] WASCA 11 .… 14.15 Ellis v Minister for Lands (1985) 37 NTR 29; 82 FLR 58 .… 5.43 Ellul v Oakes (1972) 3 SASR 377 .… 5.7 Elsley v JG Collins Insurance Agencies Limited (1978) 83 DLR (3d) 1 .… 14.131 Emery v Commonwealth of Australia [1963] VR 586 .… 11.70 EMI Electronics Group Ltd v Coldicott [1999] STC 803 .… 11.75 Eminence Property Developments Ltd v Heaney [2010] EWCA Civ 1168 .… 10.51 Emmens v Elderton (1853) IV HLC 624; 10 ER 606 .… 1.23, 1.47, 2.1, 3.31, 7.2, 8.37, 8.38, 8.46, 8.53, 8.55, 9.10, 10.2, 10.65, 11.77, 14.35, 14.36, 14.37, 14.38, 14.108 Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 .… 3.25, 3.26, 6.21, 6.24 Employment Advocate v Barclay Mowlem Construction Ltd [2005] FCA 16 .

… 3.54 Employment Termination Payments (12 month rule) Determination 2007 .… 14.29 Employment Termination Payments Redundancy Trusts (12 month rule) Determination 2009 .… 14.29 Encyclopaedia Britannica Australia Ltd v Campbell [2009] NSWCA 286 .… 6.39, 13.4 Energy World Corp Ltd (ACN 009 124 994) v Maurice Hayes and Associates Pty Ltd (2007) 239 ALR 457; [2007] FCAFC 34 .… 4.20 Enever v The King (1906) 3 CLR 969 .… 2.35, 5.93, 11.29 Enfield Technical Services Ltd v Payne [2008] ICR 1423; [2008] EWCA Civ 393 .… 4.24, 4.31 England v British Telecommunications Plc [1993] ICR 644 .… 5.59 English v Wilsons & Clyde Coal Co Ltd [1936] SC 883 .… 8.70 English & Australian Copper Co Ltd v Johnson (1911) 13 CLR 490 .… 10.25 English Joint Stock Bank, Re (Yelland’s case) (1867) LR 4 Eq 350 .… 13.15 Entores Limited v Miles Far East Corporation [1955] 2 QB 327; 2 All ER 493 .… 3.24 Equiticorp Finance Ltd (in liq) v Bank of New Zealand (1993) 32 NSWLR 50 .… 3.75, 3.76, 4.2, 4.5 Equiticorp Financial Services Ltd (NSW) v Equiticorp Financial Services Ltd (NZ) (1992) 29 NSWLR 260 .… 4.5 Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471; 211 ALR 101 .… 2.25, 5.13, 5.17, 5.18, 5.24 Eriksson v Whalley [1971] 1 NSWLR 397 .… 11.17 Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95; 187 ALR 92 .… 3.5, 3.6, 3.40, 3.41, 3.42, 3.44, 3.46, 5.80, 11.12 Esanda Finance Corporation Ltd v Plessnig (1989) 166 CLR 131; 84 ALR 99 .… 14.131, 14.134, 14.135

Esso Petroleum Co Ltd v Harper’s Garage (Stourport) Ltd [1968] AC 269; [1967] 1 All ER 699 .… 16.2, 16.3, 16.8, 16.12, 16.13, 16.16, 16.17, 16.28 Etna v Arif [1999] 2 VR 353 .… 5.20, 8.22 Eugenia, The [1964] 2 QB 226 .… 12.3 European Bank Ltd v Evans (2010) 240 CLR 432; 264 ALR 1 .… 14.7, 14.21 Evans v European Bank Ltd (2004) 61 NSWLR 75; [2004] NSWCA 82 .… 15.74 — v Williams (1910) 11 CLR 550 .… 11.35, 14.41 Evans, Deakin and Co Ltd v Allen [1946] St R Qd 187 .… 5.3, 5.68, 5.69, 5.70, 5.71, 5.72 Evans Marshall & Co Ltd v Bertola SA [1973] 1 All ER 992; [1973] 1 WLR 349 .… 15.41 Evard v Alma Mater Society of the University of British Columbia (1995) 14 CCEL (2d) 124 .… 3.41 Evenco Pty Ltd v Australian Building Construction Employees & Builders Labourers Federation (Qld) Branch [2001] 2 Qd R 118; [2000] QCA 108 .… 3.83 Evening Standard Co Ltd v Henderson [1987] ICR 588 .… 15.30, 15.31, 15.33, 15.48 Everingham v Director-General of Education and Minister of Education (1993) 31 ALD 741 .… 9.61 Exchange Telegraph Co Ltd v Central News Ltd [1897] 2 Ch 48 .… 7.127 — v Gregory & Co [1896] 1 QBD 147 .… 7.127 — v Howard (1906) 22 TLR 375 .… 7.127 Express & Echo Publications Ltd v Tanton [1999] ICR 693 .… 2.17, 2.28 Extraman (NT) Pty Ltd v Blenkinship (2008) 155 NTR 31; [2008] NTSC 31 . … 16.13, 16.22

F

F & G Sykes (Wessex) Ltd v Fine Fare Ltd [1967] 1 Lloyd’s Rep 53 .… 3.49 FA Tamplin Steamship Co Limited v Anglo-Mexican Petroleum Products Company Limited [1916] 2 AC 397 .… 12.3, 12.8 Faccenda Chicken Ltd v Fowler [1985] 1 All ER 724; [1984] ICR 589 .… 16.46 — v — [1987] Ch 117; [1986] 1 All ER 617 .… 7.120, 7.124, 7.128, 16.25, 16.38, 16.42, 16.43, 16.44, 16.46, 16.48 Factory 5 Pty Ltd v State of Victoria (2010) 276 ALR 523; [2010] FCA 1229 .… 11.80 Fair Work Ombudsman v Eastern Colour Pty Ltd [2011] FCA 803 .… 2.52 — v Ramsey Food Processing Pty Ltd [2011] FCA 1176 .… 2.25, 2.46, 2.51 Fairman v Oakford (1860) 5 H & N 635; 157 ER 1334; 29 LJ Ex 459 .… 11.43, 11.60, 11.60 Fairport, The [1966] 2 All ER 1026 .… 10.97 Faithorn v Territory of Papua (1938) 60 CLR 772 .… 6.13, 11.9, 11.15, 11.30, 15.113 Falvey, Re; Ex p Goddard (1946) 46 SR (NSW) 289 .… 3.69 Famatina Development Corporation Ltd, Re [1914] 2 Ch 271 .… 8.34 Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; 236 ALR 209 .… 7.69, 7.70, 7.74, 15.71, 15.72, 15.73, 15.74 Fardell v Coates Hire Operations Ltd (2010) 201 IR 64; [2010] NSWSC 346 . … 5.40, 6.14, 6.26, 6.33, 8.29, 11.7, 11.8, 11.27, 11.68, 14.103 Farley v Lums (1917) 19 WALR 117 .… 7.141 — v Skinner [2002] 2 AC 732; [2001] 4 All ER 801 .… 14.80, 14.81, 14.93 Farquharson v Qantas Airways Ltd (2006) 155 IR 22 .… 7.139, 7.140 Farrell v Matthews & Weir v Hansen [2005] ICR 509 .… 8.24 Farrow v Wilson (1869) LR 4 CP 744 .… 12.3, 12.24, 12.49, 13.33 Farrow Mortgage Services Pty Ltd v Slade (1996) 38 NSWLR 636 .… 6.50

Faulkner v Bluett (1981) 52 FLR 115 .… 13.28 Fawcett v Cash (1834) 5 B & Ad 904; 110 ER 1026 .… 5.75, 11.42, 11.43, 11.60 FC Gardner v Beresford [1978] IRLR 68 .… 8.26, 8.29, 14.52 FC Shepherd & Co Ltd v Jerrom [1987] QB 301; [1986] 3 All ER 589; [1986] IRLR 358 .… 9.24, 12.21, 12.36, 12.37, 12.41, 12.42, 12.43, 12.48 Fechter v Montgomery (1863) 33 Beav 21; 55 ER 274 .… 8.37, 8.39, 8.40, 8.41, 8.49, 14.39, 15.53 Federal Commerce and Navigation Co Ltd v Molena Alpha Inc [1979] AC 757; 1 All ER 307 .… 10.40, 10.44, 10.48 Federal Commissioner of Taxation v Barrett (1973) 129 CLR 395; 2 ALR 65 .… 1.45, 2.1, 2.5, 2.6, 2.9, 2.11, 2.13, 2.15–2.17, 2.19, 2.43 — v J Walter Thompson (Australia) Pty Ltd (1944) 69 CLR 227 .… 1.45, 2.5, 2.12, 2.13, 2.16, 6.1 — v Orica Ltd (1998) 194 CLR 500; 154 ALR 1 .… 6.50, 11.80 — v Sara Lee Household & Body Care (Aust) Pty Ltd (2000) 201 CLR 520; 172 ALR 346 .… 6.38, 8.33 — v United Aircraft Corp (1943) 68 CLR 525 .… 7.112 Federal Supply Co v Angehrn (1910) 103 LT 150 .… 10.101, 10.103 Federated Liquor and Allied Trades Employees Union of Australasia v Ashton (1922) 17 CAR 748 .… 3.69 Federated Mutual Insurance Co of Australia Ltd v Sabine [1920] SALR 284 . … 6.39 Federated Storemen & Packers Union of Australia, Re (1987) 22 IR 198 .… 7.4 Fejo v Northern Territory (1998) 195 CLR 96; 156 ALR 721 .… 15.78 Felthouse v Bindley (1862) 11 CB (NS) 869; 142 ER 1037 .… 6.23 Fennell v East Ham Corporation [1926] Ch 641 .… 15.107, 15.111 Ferguson v Wilson (1866) LR 2 Ch 77 .… 15.117

Fermiscan Pty Ltd v James (2009) 261 ALR 408; [2009] NSWCA 355 .… 14.132 Ferraloro v Preston Timber Pty Ltd (1982) 42 ALR 627 .… 8.60, 8.67, 8.70 Fewings v Tisdal (1847) 1 Ex 295; 154 ER 125 .… 7.2, 9.10, 10.65, 14.35 Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (2001) 37 ACSR 672; [2001] NSWCA 97 .… 7.11, 7.49, 7.65, 7.69, 7.70, 7.71 Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Limited [1943] AC 32 .… 12.51 Field v Battye [1939] SASR 235 .… 6.43 — v Nott (1939) 62 CLR 660 .… 2.35 Fielder v Christofani [1901] 20 NZLR 491 .… 5.72 Fightvision Pty Ltd v Onisforou (1999) 47 NSWLR 473; [1999] NSWCA 323 .… 6.38, 11.7, 14.54 Films Rover International Ltd v Cannon Film Sales Ltd [1986] 3 All ER 772 . … 15.80, 15.89 Finance Sector Union of Australia v Australia & New Zealand Banking Group (2002) 120 FCR 107; 114 IR 352 .… 15.9 — v Commonwealth Bank of Australia (2000) 106 FCR 16; 106 IR 158; [2000] FCA 1468 .… 4.8 — v — (2001) 106 IR 172; [2001] FCA 335 .… 5.42, 5.43 — v — (2001) 111 IR 241; [2001] FCA 1613 .… 2.46, 2.47, 6.40, 6.42 — v — (2002) 125 FCR 9; 190 ALR 497; [2002] FCAFC 193 .… 2.46, 2.47, 6.40, 6.42 — v — [2004] FCA 257 .… 13.3 — v — (2005) 147 FCR 158; 223 ALR 695; 146 IR 37 .… 3.85 Financial Industry Complaints Service Ltd v Deakin Financial Services Pty Ltd (2006) 238 ALR 616 .… 2.37 Financial Integrity Group Pty Ltd v Farmer [2009] ACTSC 143 .… 5.49, 7.119, 15.117, 16.48

Finch v Sayers [1976] 2 NSWLR 539 .… 12.9, 12.10, 12.13, 12.15, 12.16, 12.17, 12.18, 12.20, 12.31, 12.47, 12.54 Fine Industrial Commodities Limited v Powling (1954) 71 RPC 253 .… 7.47, 7.69, 7.104, 7.105, 7.106 Fink v Fink (1946) 74 CLR 127 .… 14.77 Finucane v NSW Egg Corporation (1988) 80 ALR 486 .… 14.33, 14.101 Fire and All Risks Insurance Co Ltd v Powell [1966] VR 513 .… 4.30 Firewatch Australia Pty Ltd v Country Fire Authority (1999) 93 FCR 520; [1999] FCA 761 .… 4.36 Firth v Ridley (1864) 33 Beav 516; 55 ER 468 .… 15.17, 15.55, 15.57, 15.59 Fiscal Technology Co Ltd v Johnson (1991) 23 IPR 555 .… 15.134 Fisher v Edith Cowan University (No 2) (1997) 72 IR 464 .… 5.18 — v Jackson [1891] 2 Ch 84 .… 11.23, 15.110, 15.111 — v Madden (2002) 54 NSWLR 179; 114 IR 119; [2002] NSWCA 28 .… 13.22 Fisk v Pollard [1928] AR (NSW) 39 .… 2.41 Fitzgerald v F J Leonhardt Pty Ltd (1997) 189 CLR 215; 143 ALR 569 .… 4.23, 4.27, 4.28, 4.31, 8.33 — v Master (1956) 95 CLR 420 .… 15.62 — v Penn (1954) 91 CLR 268 .… 14.17 Fitzpatrick v Keelty [2008] FCA 35 .… 13.29 — v Schweppes Ltd [1913] AR 11 .… 11.77, 11.78 Fitzsimmons v The Queen (1997) 23 ACSR 355 .… 7.49, 7.69 FJ Walker Pty Ltd v Casey (1989) 29 IR 303 .… 9.19, 14.38 Flaherty v Girgis (1987) 162 CLR 574; 71 ALR 1; (1985) 63 ALR 466 .… 14.10 Flamingo Park Pty Ltd v Dolly Dolly Creation Pty Ltd (1986) 65 ALR 500 . … 7.127

Fletcher v A H McDonald & Co Pty Ltd (1927) 39 CLR 174 .… 3.43 — v Krell (1872) 42 LJQB 55; 28 LT 105 .… 7.18 — v Nokes [1897] 1 Ch 271 .… 11.17 Flynn v JC Hutton Pty Ltd (1982) 3 IR 413 .… 10.30 Foggo v O’Sullivan Partners (Advisory) Pty Ltd (2011) 206 IR 87; [2011] NSWSC 501 .… 5.35, 6.17, 8.16, 8.29, 8.30, 8.31, 8.32, 9.49, 10.10, 10.64, 14.52 Font v Paspaley Pearls [2002] FMCA 142 .… 14.16 Foong v Norfolk Island Hospital (2002) 170 FLR 354; [2002] NFSC 4 .… 9.58, 9.60, 9.61, 9.62, 15.40, 15.100, 15.110, 15.112 Foran v Wight (1989) 168 CLR 385; 88 ALR 413 .… 10.8, 10.32, 10.40, 10.44, 10.65, 10.104, 14.35 Ford v Lismore City Council (1989) 29 IR 68 .… 9.59 Ford bht Watkinson v Perpetual Trustees Victoria Ltd (2009) 75 NSWLR 42; 257 ALR 658; [2009] NSWCA 186 .… 3.66 Ford Motor Company Limited v Amalgamated Union of Engineering & Foundry Workers [1969] 2 All ER 481; [1969] 2 QB 303 .… 5.108 Ford Motor Company of Australia Ltd v Arrowcrest Group Pty Ltd [2002] FCA 1156 .… 5.27 Forkserve Pty Ltd v Jack (2001) 19 ACLC 299; [2000] NSWSC 1064 .… 7.58, 16.48 — v Pacchiarotta (2000) 50 IPR 74; [2000] NSWSC 979 .… 7.115, 7.129, 16.44, 16.48, 16.49 Forstaff Pty Ltd v Chief Commissioner of State Revenue (2004) 144 IR 1; [2004] NSWSC 573 .… 2.1, 2.14, 2.19, 2.24, 2.49, 2.50, 2.51, 3.33 Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421 .… 15.93 Fortuity Pty Ltd v Barcza (1995) 32 IPR 517 .… 7.58 Foster v Charles (1830) 7 Bing 105; 131 ER 40 .… 7.19 — v Copper Mines of Tasmania Pty Ltd (2004) 125 IR 153 .… 12.18, 12.30

— v Foster [1916] 1 Ch 532 .… 2.37 — v Mountford (1976) 29 FLR 233 .… 15.46, 15.70 — v Secretary to the DEECD [2008] VSC 504 .… 6.15, 11.34, 15.46 Foster Bryant Surveying Ltd v Bryant [2007] IRLR 425; [2007] EWCA Civ 200 .… 7.49, 7.65, 7.67, 7.73, 7.81, 7.88, 7.91, 7.92, 15.116 Foster Clark Ltd’s Indenture Trusts, Re [1966] 1 WLR 125; 1 All ER 43 .… 6.45, 13.17 Foster’s Group Limited v Wing (2005) 148 IR 224; [2005] VSCA 322 .… 13.4 Foufoulas v FG Strang Pty Ltd (1970) 123 CLR 168 .… 8.61, 8.67, 8.68, 8.73 Fowler v Commercial Timber Company Limited [1930] 2 KB 1 .… 13.15 Fowles v Eastern and Australian Steamship Co Ltd [1916] 2 AC 556 .… 2.35, 2.39 Fox v GIO Australia Ltd (2002) 56 NSWLR 512; 120 IR 401 .… 2.37 — v Jolly [1916] 1 AC 1 .… 11.17 — v M’Mahon (1873) 4 AJR 86 .… 11.43, 11.45 Foxall v International Land Credit Company (1867) 16 LT 637 .… 11.60 Fractionated Cane Technology Ltd v Ruiz-Avila [1988] 1 Qd R 51 .… 7.127, 7.128 — v — [1988] 2 Qd R 610 .… 7.127, 7.128 Framlington Group Plc v Anderson [1995] 1 BCLC 475 .… 7.47, 7.67, 7.89, 7.97 Franchi v Franchi [1967] RPC 149 .… 7.126, 7.127 Francis v Canadian Imperial Bank of Commerce (1994) 120 DLR (4th) 393 . … 6.26, 6.29, 6.33 — v Lyon (1907) 4 CLR 1023 .… 10.40 — v Municipal Council of Kuala Lumpur [1962] 1 WLR 1411; [1962] 3 All ER 633 .… 11.34, 15.10, 15.11, 15.15, 15.20, 15.94, 15.96, 15.97, 15.98,

15.99, 15.110, 15.111, 15.113 — v South Sydney District Rugby League Football Club Ltd [2002] FCA 1306 .… 3.14, 3.21, 3.76, 3.78, 3.82, 4.11, 4.13, 6.26, 6.27, 6.28, 7.14, 7.34, 7.43, 8.16, 11.11 Frank R Wolstenholme Pty Ltd v Davis (1995) 12 NSWCCR 1 .… 3.8, 3.18, 3.20, 3.24 Franklin v Giddins [1978] Qd R 72 .… 15.134 Fraser v Evans [1969] 1 QB 349 .… 15.70 — v NRMA (1995) 127 ALR 543 .… 7.70 — v Public Service Staff Relations Board [1985] 2 SCR 455 .… 7.38, 7.131 — v Thames Television Ltd [1984] QB 44 .… 7.128 Fratangelo v Secretary to the Department of Health & Community Services (VSC, Harper J, BC9803039, 3 July 1998, unreported) .… 3.73, 3.78, 5.111, 6.27 Frazer v Hatton (1857) 2 CB (NS) 512 .… 6.31, 6.33 Frederick v State of South Australia (2006) 94 SASR 545; 152 IR 182; [2006] SASC 165 .… 4.2, 4.4, 4.5, 4.10–4.12, 11.4, 11.52, 11.68 Frederick E Rose (London) Ltd v William H Pim Junior & Co Ltd [1953] 2 QB 450 .… 4.20 Freeman v Brown [2001] NSWSC 1028 .… 4.11 — v McManus [1958] VR 15 .… 3.69, 6.37 Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480; 1 All ER 630 .… 3.75, 3.76, 3.77, 3.78, 3.87 French v Barclays Bank Plc [1998] IRLR 646 .… 5.71, 5.77, 8.24 Friend v Brooker (2009) 239 CLR 129; 255 ALR 601 .… 7.20 — v Young [1897] 2 Ch 421 .… 12.25, 13.30 Fruhauf Southwest Garment Co v United States, 111 F Supp 945 (1953) .… 6.25 Fryar v System Services Pty Ltd (1995) 130 ALR 168; 60 IR 68 .… 11.70

— v — (1996) 137 ALR 321 .… 11.79, 13.7, 14.90, 14.127, 15.49 FSS Travel and Leisure Systems Ltd v Johnson [1999] FSR 505 .… 7.124, 16.26, 16.46, 16.47 Fubilan Catering Services Ltd v Compass Group (Aust) Pty Ltd [2007] FCA 1205 .… 4.40 Fuller v New South Wales Department of School Education and Training [2004] NSWCA 242 .… 8.73 Furey v Civil Service Association of WA (Inc) (1999) 91 FCR 407; 93 IR 349; [1999] FCA 1492 .… 3.79, 11.37, 14.129, 14.130 Furs Ltd v Tomkies (1936) 54 CLR 583 .… 7.11, 7.50, 7.69, 7.70, 7.73, 7.97, 7.98, 7.99 Fused Electrics Ltd v Carfrae (1992) 45 IR 388 .… 13.15 Futuretronics.com.au Pty Ltd v Graphix Labels Pty Ltd (2009) 81 IPR 1; [2009] FCAFC 2 .… 7.68, 7.115 Fyfe v Scientific Furnishings Ltd [1989] ICR 648 .… 14.99, 14.108, 14.109, 14.114 Fyffes Group Ltd v Templeman [2000] 2 Lloyd’s Rep 643 .… 7.99, 15.115

G G v Day [1982] 1 NSWLR 24 .… 7.127, 15.70 G Scammell & Nephew Ltd v Ouston [1941] AC 251 .… 3.51 GAB Robins (UK) Ltd v Triggs [2008] ICR 529; [2007] 3 All ER 590 .… 8.15, 14.76, 14.94 Gaca v Pirelli General Plc [2004] 1 WLR 2683; 3 All ER 348; [2004] EWCA Civ 373 .… 14.125, 14.130 Gala v State Bank of NSW Limited (1998) 80 IR 112 .… 14.110 Galaxy Media Pty Ltd, Re (2001) 167 FLR 149; 39 ACSR 483; [2001] NSWSC 917 .… 3.47, 3.49, 3.52, 5.31, 14.52 Galea v Bagtrans Pty Ltd [2010] NSWCA 350 .… 8.61, 8.73

Galipienzo v Solution 6 Holdings Ltd (1998) 28 ACSR 139 .… 7.13, 10.19, 10.48 Gall v Mitchell (1924) 35 CLR 222 .… 15.61 Gallagher v Post Office [1970] 3 All ER 712 .… 5.8 Gallear v Watson [1979] IRLR 306 .… 16.52 Galsworthy v Strutt (1848) 1 Ex 659 .… 14.132 Gamble v Hoffman (1997) 24 ACSR 369 .… 7.35, 7.51 Gambotto v John Fairfax Publications Pty Ltd (2001) 104 IR 303 .… 8.13, 16.52 Gane v Total Freight Agency Pty Ltd (1996) 68 IR 204 .… 11.52 Gapes v Commercial Bank of Australia Ltd (1980) 37 ALR 20; (1979) 41 FLR 27 .… 9.15, 9.16, 9.37, 9.43, 9.45, 9.46 Garbett v Midland Brick Co Pty Ltd (2003) 129 IR 270; [2003] WASCA 36 . … 5.95 Garden Cottage Foods Ltd v Milk Marketing Board [1984] AC 130; [1983] 2 All ER 770 .… 15.76 Gardiner v Goss [2007] FMCA 1966 .… 13.29 Garry Rogers Motors (Aust) Pty Ltd v Subaru (Aust) Pty Ltd [1999] FCA 903 .… 8.28, 8.29, 8.32, 11.26 Gartrell White Limited v Butt [1930] AR (NSW) 174 .… 2.40 Gartside v Outram (1856) 26 LJ Ch 113 .… 7.133 Gascol Conversions Ltd v Mercer [1974] ICR 420 .… 5.4, 5.23, 5.28, 5.36 Gaumont-British Picture Corporation v Alexander [1936] 2 All ER 1686 .… 3.37 GD Searle & Co Ltd v Celltech Ltd [1982] FSR 92 .… 7.84, 7.114, 7.119, 7.127, 16.42, 16.44, 16.46, 16.47 GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd (2003) 128 FCR 1; [2003] FCA 50 .… 5.27 Geddes v McGrath (1933) 50 CLR 520 .… 14.41, 14.62, 14.65

Geia v Palm Island Aboriginal Council [2001] 1 Qd R 245; (1999) 152 FLR 135; [1999] QCA 389 .… 13.29 General Billposting Co Ltd v Atkinson [1909] AC 118 .… 10.73, 10.76, 10.83, 15.52, 16.18 General Cleaning Contractors Ltd v Christmas [1953] AC 180 .… 8.68 General Practitioners Society in Australia v Commonwealth of Australia (1980) 145 CLR 532; 31 ALR 369 .… 6.45, 11.4 General Re-insurance Corporation v Forsakringsaktiebolaget Fennia Patria [1983] QB 856 .… 5.73, 5.102 General Rolling Stock Co, Re (Chapman’s case) (1866) LR 1 Eq 346 .… 13.15 Geodesic Constructions Pty Limited v Gaston (1976) 16 SASR 453 .… 7.109 George v Davies [1911] 2 KB 445 .… 5.68, 11.43 — v Mitchell & King Ltd (1943) 59 TLR 153 .… 9.16 George Edwardes (Daly’s Theatre) Limited v Comber (1926) 42 TLR 247 . … 11.60 George Hudson Holdings Limited v Rudder (1973) 128 CLR 387 .… 3.23 George Trollope & Sons v Martyn Bros [1934] 2 KB 436 .… 14.37 Geraghty v Minter (1979) 142 CLR 177; 26 ALR 141 .… 10.76, 16.9, 16.10, 16.15, 16.16, 16.31 Gerard v Worth of Paris Ltd [1936] 2 All ER 905 .… 13.15 GF Sharp & Co Limited v McMillan [1998] IRLR 632 .… 12.45, 12.47, 12.50 Giancaspro v SHRM (Australia) Pty Ltd (2005) 93 SASR 32; 145 IR 269; [2005] SASC 340 .… 12.9, 12.18, 12.20, 12.35, 12.53 Gibbons v Associated British Ports [1985] IRLR 376 .… 5.37, 5.43 — v Wright (1954) 91 CLR 423 .… 3.66 Gibson Chemicals Ltd v SA Sopura NV [1999] VSC 203 .… 7.84 Gibson Motorsport Merchandise Pty Ltd v Forbes (2006) 149 FCR 569;

[2006] FCAFC 44 .… 7.33, 7.36 Gilbert J McCaul (Aust) Pty Ltd v Pitt Club Ltd (1959) SR (NSW) 122 .… 3.23 Gill v Colonial Mutual Life Assurance Society Ltd [1912] VLR 146 .… 7.18 Giller v Procopets [2009] VSCA 72; (2008) 24 VR 1 .… 14.93, 15.115, 15.117, 15.119 Gillespie v Commonwealth (1993) Aust Torts Reports 81-217 .… 8.67 Gillespie Brothers & Co v Cheney, Eggar & Co [1896] 2 QB 59 .… 5.13 Gillies, Re; Ex p Official Trustee in Bankruptcy v Gillies (1993) 42 FCR 571; 115 ALR 631 .… 13.27 Gillies v Downer EDI Ltd [2011] NSWSC 1055 .… 1.1, 7.12, 7.25, 7.39, 8.13, 8.15, 8.16, 8.29, 10.2, 10.18, 11.7, 11.24, 11.26, 11.65, 14.77 GIO General Ltd v Love [2009] NSWCA 269 .… 5.32 Giraud UK Limited v Smith [2000] IRLR 763 .… 14.132, 14.134 Girlock (Sales) Pty Ltd v Hurrell (1982) 149 CLR 155 .… 10.19 Gismondi v City of Toronto (2003) 226 DLR (4th) 334 .… 11.26 Gittani Stone Pty Ltd v Pavkovic [2007] NSWCA 355 .… 8.74 Giumelli v Giumelli (1999) 196 CLR 101; 161 ALR 473 .… 15.136 GKN (Cwmbran) Ltd v Lloyd [1972] ICR 214 .… 5.70, 6.14 Glacier Metal Co Ltd v Dyer [1974] 3 All ER 21 .… 11.81 Glasbrook Bros Ltd v Glamorgan County Council [1925] AC 270 .… 6.32 Glass v The Pioneer Rubber Works of Aust Ltd [1906] VLR 754 .… 2.37 GlaxoSmithKline Australia Pty Ltd v Ritchie (2008) 77 IPR 306; [2008] VSC 164 .… 6.26, 6.29, 7.87, 7.88, 7.90, 7.93, 7.116, 7.124, 7.128, 7.129, 16.39, 16.41, 16.42, 16.44, 16.46 Gledhill v Bentley Designs (UK) Ltd [2011] 1 Lloyd’s Rep 270 .… 7.141 Gledhow Autoparts v Delaney [1965] 3 All ER 288 .… 16.14, 16.15, 16.35 Glitz v Watford Electric Co Ltd [1979] IRLR 89 .… 6.10, 6.23

Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82; 55 ALR 25 .… 4.37, 4.39 Godecke v Kirwan (1973) 129 CLR 629; 1 ALR 457 .… 3.56, 3.57, 3.60, 5.27 Gogay v Hertfordshire County Council [2000] IRLR 703 .… 8.21, 8.25, 14.76, 14.77, 14.79 Gold v Life Assurance Co of Pennsylvania [1971] 2 Lloyd’s Rep 164 .… 10.75 Gold Peg International Pty Ltd v Kovan Engineering (Aust) Pty Ltd (2005) 225 ALR 57 .… 5.58 Goldburg v Shell Oil Company of Australia (1990) 95 ALR 711 .… 3.48, 5.101, 14.99 Goldcorp Exchange Ltd, Re [1995] 1 AC 74; 2 All ER 806 .… 7.34 Golden Plains Fodder Australia Pty Ltd v Millard (2007) 99 SASR 461; [2007] SASC 391 .… 2.25, 2.31, 2.46, 2.47 Goldman Sachs JB Were Services Pty Ltd v Nikolich [2006] FCA 784 .… 5.40 — v — (2007) 163 FCR 62; [2007] FCAFC 120 .… 3.6, 3.8, 3.9, 3.11, 5.7, 5.28, 5.30, 5.35, 5.40, 5.42, 5.44, 5.45, 5.46, 5.63, 5.64, 8.56, 8.57, 14.17, 14.19, 14.79 Goldsbrough Mort & Co Ltd v Quinn (1910) 10 CLR 674 .… 3.16, 4.15 Gollan v Nugent (1988) 166 CLR 18 .… 15.135 Goodchild Fuel Distributors Pty Ltd v Holman (1992) 53 IR 453 .… 7.47, 7.76 Gooley v Westpac Banking Corporation (1995) 129 ALR 628; 59 IR 262 .… 7.28, 10.49, 10.52, 10.53, 14.60, 14.87 Gordon v Jennings (1892) 9 QBD 45 .… 9.32 — v Macgregor (1909) 8 CLR 316 .… 5.9, 5.13, 5.18 — v Matthew Bender & Co, 562 F Supp 1286 (ND III, 1983) .… 11.22 — v Potter (1859) 1 F & F 644; 175 ER 888 .… 7.137

— v State of Victoria [1981] VR 235 .… 9.11, 9.59, 15.17, 15.20, 15.54 Gordon & Gotch (Australasia) Ltd v Cox (1923) 31 CLR 370 .… 7.18 Goreng Goreng v Jennaway (2007) 164 FCR 567; 245 ALR 602 .… 7.23 Gorgevski v Bostik (Australia) Pty Ltd (1991) 39 IR 229 .… 11.14 Gorse v Durham County Council [1971] 2 All ER 666; [1971] 1 WLR 775 . … 9.58, 9.59, 15.111 Gothard v Davey (2010) 80 ACSR 56; [2010] FCA 1163 .… 2.47, 2.48, 3.5, 3.85, 5.23, 5.27, 6.40, 6.45, 13.22, 13.23 — v Mirror Group Newspapers Ltd [1988] ICR 729 .… 11.74, 11.75, 14.104, 14.105, 14.125 Gould v Stuart [1896] AC 575 .… 11.29, 11.30 — v Webb (1855) 4 El & Bl 933; 119 ER 347 .… 9.28, 9.38 Governor Raffles, The (1815) 165 ER 1400; 2 Dods 14 .… 12.22 GPG (Australia Trading) Pty Ltd v GIO Australia Holdings Ltd (2001) 117 FCR 23; 191 ALR 342; [2001] FCA 1761 .… 4.13 Grady v Commissioner of Railways (New South Wales) (1935) 53 CLR 229 . … 9.11, 9.14, 9.60, 9.62, 15.113 Graham v Baker (1961) 106 CLR 340 .… 9.9, 9.11, 9.18, 12.15, 12.16, 14.35, 14.123 Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540; 194 ALR 337 .… 8.67 Graincorp Operations Ltd v Markham (2002) 120 IR 253 .… 7.140 Granada Tavern v Smith (2008) 173 IR 328; [2008] FCA 646 .… 4.3–4.6 Granosite Pty Ltd v Wieland (1982) 9 IR 218 .… 7.49, 7.69, 7.70, 7.71, 15.120, 16.25 Grant v Downs (1976) 135 CLR 674 .… 7.131 — v John Grant & Sons Pty Ltd (1954) 91 CLR 112 .… 6.50 — v The Gold Exploration and Development Syndicate Limited [1900] 1 QB 233 .… 7.71, 7.99

Gratton v Greater Cessnock City Council [1964–65] NSWR 1319 .… 6.23 Graves v Cohen (1930) 46 TLR 121 .… 12.11, 12.24, 13.33, 12.49, 12.50 Gray v Chart Air Pty Ltd [2011] FMCA 218 .… 3.20, 3.54 — Motor Accident Commission (1998) 196 CLR 1; 158 ALR 485 .… 8.57, 14.16 — v New Augarita Porcupine Mines Pty Ltd [1952] 3 DLR 1 .… 7.70 — v University of Western Australia (2008) 246 ALR 603; [2008] FCA 498 . … 4.39, 4.40 — v — (2009) 179 FCR 346; 259 ALR 224 .… 4.39, 4.40 Greater Glasgow Health Board’s Application [1996] RPC 207 .… 7.103 Green v Giljohann (1995) 17 ACSR 518 .… 13.18 — v Sommerville (1979) 141 CLR 594; 27 ALR 351 .… 10.31, 11.17, 15.52 Green and Clara Pty Ltd v Bestobell Industries Pty Ltd [1982] WAR 1 .… 7.34, 7.35, 7.91, 15.71, 15.120, 15.121, 15.129, 15.136 Greene v Moss (1995) 14 WAR 333 .… 5.72, 5.74 Greenhof v Barnsley Metropolitan Borough Council [2006] IRLR 98 .… 8.24 Greer v Downs Supply Co [1927] 2 KB 28 .… 3.85 Gregory v Ford [1951] 1 All ER 121 .… 7.12, 7.26 — v Philip Morris Ltd (1987) 19 IR 258; (1987) 77 ALR 79 .… 3.12, 5.44, 9.58 — v — (1988) 80 ALR 455; 24 IR 397 .… 5.95, 9.58, 11.14, 14.60, 15.17, 15.20, 15.35, 15.57, 15.98 Grehan v The North Eastern Health Board [1989] Irish Reports 422 .… 11.22, 11.49 Greig v Insole [1978] 3 All ER 449 .… 16.5 Grey’s Case (1666) Kelyng 64 .… 1.42 Griffith v Tower Publishing Co Ltd [1896] 1 Ch 21 .… 6.42, 9.54, 15.38 Griffith University v Ivory [1998] 1 Qd R 62 .… 10.94

— v Tang (2005) 221 CLR 99; 213 ALR 724 .… 15.105 Griffiths v Buckinghamshire County Council [1994] ICR 265 .… 5.44, 11.81 — v Civil Aviation Authority (1966) 137 ALR 521 .… 13.29 — v Kerkemeyer (1977) 139 CLR 161; 15 ALR 387 .… 14.123 — v Rose [2011] FCA 30 .… 7.22 — v Secretary of State for Social Services [1974] QB 468; [1973] 3 All ER 1184 .… 13.17 Griffiths & Beerens Pty Ltd v Duggan (2008) 66 ACSR 472; [2008] VSC 201 .… 7.44, 7.50, 7.51, 7.58, 7.65, 7.81, 7.82, 7.90, 16.25, 16.48 Griggs v Noris Group of Companies (2006) 94 SASR 126; 148 IR 427; [2006] SASC 23 .… 5.62, 5.63, 5.65, 14.66 Grimston v Cuningham [1894] 1 QB 125 .… 8.37, 8.40, 15.31 Groeneveld Australia Pty Ltd v Wouter Nolten (No 3) (2010) 80 ACSR 562; [2010] VSC 533 .… 7.20, 7.47, 7.80 Gromark Packaging v Federated Miscellaneous Workers Union of Australia (1992) 46 IR 98 .… 13.4 Grout v Gunnedah Shire Council (1994) 125 ALR 355; (1994) 57 IR 243 .… 11.52, 11.59, 11.61, 11.64 — v — (No 2) (1995) 58 IR 67 .… 11.39, 11.51, 11.55, 11.58, 11.59, 14.47, 14.78, 14.79 — v — (1995) 62 IR 150 .… 14.79 — v — (No 3) (1995) 129 ALR 372; 59 IR 248 .… 14.30, 14.51 Grundt v Great Boulder Proprietary Gold Mines (1937) 59 CLR 641 .… 5.31 Gryf-Lowczowski v Hinchingbrooke Healthcare NHS Trust [2006] ICR 425 . … 5.41, 12.1, 12.4, 12.33, 12.36, 12.38, 12.46, 15.22, 15.23, 15.24, 15.39, 15.45 GTS Freight Management Pty Ltd v Transport Workers Union of Australia (1990) 33 IR 26 .… 3.74, 3.83, 8.63 Guaranty Trust Co of New York v Hannay & Co [1915] 2 KB 536 .… 15.103

Guardians of the Poor of Salford Union v Dewhurst [1926] AC 619 .… 15.100 Guiliano v Cleo Inc, 995 SW 2d 88 .… 6.15 Guinness Plc v Saunders [1990] 2 AC 663; 1 All ER 652 .… 7.47, 7.69, 7.97, 15.136 Gunnedah Shire Council v Grout (1995) 134 ALR 156; 62 IR 150 .… 10.25, 10.43, 10.95, 11.12, 11.39, 11.65 Gunton v Richmond-upon-Thames London Borough Council [1981] Ch 448; [1980] 3 All ER 577 .… 5.27, 9.9, 9.18, 10.2, 10.9, 10.43, 10.81, 10.93, 10.97, 10.98, 11.15, 11.65, 14.35, 14.38, 14.49, 14.62, 14.107, 15.13, 15.17, 15.54, 15.91 Guthrie v News Ltd (2010) 27 VR 196; [2010] VSC 196 .… 11.19, 11.51, 11.52, 11.57, 11.59, 11.60, 13.7, 14.22, 14.30, 14.54, 14.57, 14.58, 14.59, 14.126, 14.127

H H & H Security Pty Ltd v Toliopoulos (FCA, BC9703889, 18 August 1997, unreported) .… 12.16 — v — [1997] FCA 838 .… 5.58 HA Warner Pty Ltd v Williams (1945) 73 CLR 421 .… 2.42 Haberfield Pty Ltd, Ex p (1907) 5 CLR 33 .… 1.45 Habib Bank Ltd v Habib Bank AG Zurich [1981] 1 WLR 1265; 2 All ER 650 .… 15.62 Hackney v Kefford [1940] AR (NSW) 231 .… 2.9, 2.41 Haden v Cowen [1982] IRLR 314 .… 6.15, 6.16 Hadgkiss v Construction, Forestry, Mining and Energy Union (No 3) (2007) 160 IR 263; [2007] FCA 87 .… 4.34 Hadjiloucas v Crean [1987] 3 All ER 1008; [1988] 1 WLR 1006 .… 2.25, 2.26 Hadley v Baxendale (1854) 156 ER 145 .… 14.21, 14.91, 14.94

Hadmor Productions Ltd v Hamilton [1982] 2 WLR 322; [1982] 1 All ER 1042 .… 5.3 Hagen v ICI Chemicals & Polymers Ltd [2002] IRLR 31 .… 5.78, 7.28, 8.21, 8.30 Haines v Bendall (1991) 172 CLR 60; 99 ALR 385 .… 14.7, 14.31, 14.33, 14.120 Haley v Public Transport Corporation (1998) 119 IR 242; [1998] VSC 132 . … 11.21, 11.55, 11.57, 11.59, 14.120, 14.127, 14.128, 14.129 Hall v A & A Sheiban Pty Ltd (1989) 20 FCR 217 .… 14.16, 14.33, 14.34, 14.85 — v General Motors-Holden’s Ltd (1979) 45 FLR 272 .… 7.3, 7.4 — v Woolston Hall Leisure Ltd [2001] ICR 99; [2000] 4 All ER 787 .… 4.23, 4.31 — v Wright (1858) El Bl & El 765 .… 12.18 Hall (Inspector of Taxes) v Lorimer [1992] 1 WLR 939 .… 2.6 Halliday & Nicholas v Corsiatto (2001) 11 ANZ Ins Cas 61-505 .… 15.71, 15.124, 15.131 Hameed v Central Manchester University Hospitals NHS Foundation Trust [2010] EWHC 2009 .… 14.79 Hamilton v Lethbridge (1912) 14 CLR 236 .… 6.41, 6.43, 14.132, 15.51, 16.15 — v Nuroof (WA) Pty Ltd (1956) 96 CLR 18 .… 8.60, 8.61, 8.62, 8.65, 8.67, 8.71 — v Whitehead (1988) 166 CLR 121; 82 ALR 626 .… 2.34 Hamlin v Great Northern Railway Company (1856) 1 H & N 408; 158 ER 126 .… 14.77 Hamzy v Tricon International Restaurants (2001) 115 FCR 78; 111 IR 198; [2001] FCA 1589 .… 3.32 Hanau v Ehrlich [1912] AC 39 .… 11.18, 11.41 Hancock v BSA Tools Limited [1939] 4 All ER 538 .… 12.16

Handley v Moffatt (1873) Ir R 7 CL 104 .… 16.52 Hands v Simpson Fawcett Ltd (1928) 44 TLR 295 .… 7.18 Hanley v Pease & Partners Ltd [1915] 1 KB 698 .… 9.58, 9.59, 10.2, 14.42, 15.113 Hanna v OAMPS Insurance Brokers Ltd (2010) 202 IR 420; [2010] NSWCA 267 .… 3.51, 16.22, 16.32, 16.33, 16.34 Hanneybel v Uniflex (Australia) Pty Ltd [2002] WASCA 349 .… 7.34, 16.43 Hanover Insurance Brokers Ltd v Schapiro [1994] IRLR 82 .… 16.36 Hansen v Northern Land Council [1999] NTSC 69 .… 14.106, 14.109, 14.114 Hanson v Radcliffe Urban District Council [1922] 2 Ch 490 .… 11.31, 15.93, 15.111 — v Royden (1867) LR 3 CP 47 .… 6.31 Harcourt Brace & Company (Australia) Pty Ltd v Cory (1997) 81 IR 327 .… 14.101 Hardin v First Cash Financial Services Inc, 465 F 3d 470 (2006) .… 3.18 Harding v Harding (1928) 29 SR (NSW) 96 .… 11.52, 14.99, 14.115 Hardy v Polk (Leeds) Ltd [2005] ICR 557 .… 14.96, 14.105, 14.116 Hare v Murphy Brothers Limited [1974] IRLR 342 .… 12.19, 12.21, 12.36, 12.39, 12.41 Harman v Flexible Lamps Limited [1980] IRLR 418 .… 12.53 Harmer v Cornelius (1858) 5 CB (NS) 235; 141 ER 94 .… 7.24, 7.28 Harnett v Yielding (1805) 2 Sch & Lef 549 .… 15.41 Harold Holdsworth & Co (Wakefield) Ltd v Caddies [1955] 1 All ER 725; [1955] 1 WLR 352 .… 6.16, 8.48 Harper v Virgin Net Ltd [2005] ICR 921 .… 14.45 Harrigan v Brown [1967] 1 NSWR 342 .… 15.52, 15.60 Harrington v Kent County Council [1980] IRLR 353 .… 12.21, 12.41, 12.43

— v Victoria Graving Dock Company (1878) 3 QBD 549 .… 3.36, 7.95 Harris v Carter (1854) 3 E & B 559 .… 6.31, 6.33 — v Commercial Minerals Ltd (1996) 186 CLR 1; 135 ALR 358 .… 14.121, 14.124 — v Digital Pulse Pty Ltd (2003) 56 NSWLR 298; 197 ALR 626; [2003] NSWCA 10 .… 14.16, 15.120, 15.122 — v Richard Lawson Autologistics Ltd [2002] ICR 765 .… 3.73, 3.74, 5.111 — v S (1976) 2 ACLR 51 .… 2.34 — v Watson (1791) Peake 102 .… 6.30, 6.49 Harris and Russell Ltd v Slingsby [1973] ICR 454 .… 7.67, 11.3, 11.68 Harris/D-E Pty Ltd v McClelland’s Coffee and Tea Pty Ltd [1999] NSWSC 128 .… 11.76 Harris’ Patent, Re [1985] RPC 19 .… 7.9, 7.102, 7.103, 7.105, 7.106 Harris Scarfe v Logue (1996) 67 IR 37 .… 14.115 Harrison v Dodd (1914) 111 LT 47 .… 6.10, 6.26 — v P & T Tube Mills Pty Ltd (2009) 181 IR 162; [2009] FCA 220 .… 7.14 — v — (2009) 188 IR 270; [2009] FCAFC 102 .… 7.14 — v Project & Design Co (Redcar) Ltd [1978] FSR 81 .… 15.90 Harry M Miller Attractions Pty Ltd v Actors’ and Announcers’ Equity Association [1971] NSWR 614 .… 15.50 Hart v AR Marshall & Sons (Bulwell) Limited [1977] IRLR 53 .… 12.17, 12.19, 12.47 — v MacDonald (1910) 10 CLR 417 .… 5.20, 8.22 — v O’Connor [1985] AC 1000; 2 All ER 880 .… 3.66 Hartley v Cummings (1847) 5 CB 247; 136 ER 871 .… 8.37, 8.38, 8.43 — v Harman (1840) 11 Ad & E 798; 113 ER 617 .… 14.42 — v Ponsonby (1857) 7 E & B 872 .… 6.31, 6.33 Hartog v Colin & Shields [1939] 3 All ER 566 .… 4.18

Harvey v RG O’Dell Ltd [1958] 2 QB 78; 1 All ER 657 .… 7.24, 8.64 Haseldine v Hosken [1933] 1 KB 822 .… 8.35 Haseltime Lake and Co v Dowler [1981] ICR 222 .… 10.28, 10.37, 11.7 Haspell v Rostrom & Johnson Limited [1976] IRLR 50 .… 16.52 Hastings v JH Corporate Security Services Pty Ltd [2000] SASC 216 .… 11.50 Hatt v Magro (2007) 34 WAR 256; [2007] WASCA 124 .… 4.39, 4.40 Hatton v Sutherland [2002] 2 All ER 1 .… 8.66 Hatzimanolis v ANI Corp Ltd (1992) 173 CLR 473 .… 8.63, 8.64 Hawker Pacific Pty Ltd v Helicopter Charter Pty Ltd (1991) 22 NSWLR 298 .… 4.4, 4.6 Hawker Siddeley Power Engineering Ltd v Rump [1979] IRLR 425 .… 3.10, 5.17, 6.18 Hawkins v Clayton (1988) 164 CLR 539; 78 ALR 69 .… 5.3, 5.31, 5.47, 5.57, 5.58, 5.61, 5.63 — v Commonwealth Bank of Australia (1996) 66 IR 322 .… 5.23, 13.3, 13.4 — v — (No 2) (1996) 70 IR 213 .… 13.3, 13.4, 13.5 Hawthorn Football Club Ltd v Harding [1988] VR 49 .… 3.60, 15.28, 15.30, 15.31, 15.34, 15.48, 15.61 Hayes v Resource Control Inc, 170 Conn 102; 365 A 2d 399 (1976) .… 6.15 Hayman v Betta Brushware Pty Limited (1946) 63 WN (NSW) 247 .… 2.9 — v Governors of Rugby School (1874) LR 18 Eq 28 .… 15.16 Hayman Reese v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2001) 108 IR 433; [2001] FCA 1279 .… 15.50 — v — (No 2) (2001) 108 IR 441; [2001] FCA 1328 .… 15.11, 15.18 Haynes v Doman [1899] 2 Ch 13 .… 16.9, 16.14, 16.16 Hayward v Georges Ltd [1966] VR 202 .… 8.64 He v Lewin (2004) 137 FCR 241; 133 IR 217; [2004] FCAFC 161 .… 7.131

Healey v Societe Anonyme Francaise Rubastic [1917] 1 KB 946 .… 7.20, 9.29, 9.34, 9.49, 10.62, 10.89 Healing (Sales) Pty Ltd v Inglis Electrix Pty Ltd (1968) 121 CLR 588 .… 9.50 Health Services for Men Pty Ltd v D’Souza (2000) 48 NSWLR 448; [2000] NSWCA 56 .… 7.124 Health Services Union of Western Australia v Director-General of Health (2008) 175 IR 13 .… 15.113 Healy v The Law Book Company of Australasia Pty Limited (1942) 66 CLR 252 .… 1.26, 11.19, 11.45, 11.46, 11.48 Heath Lambert Australia Pty Ltd v Keenan (2000) 102 IR 306; [2000] VSC 533 .… 15.20, 15.28 Heatons Transport (St Helens) Ltd v Transport & General Workers Union [1972] 2 All ER 1214 .… 3.73, 11.11 — v — [1973] AC 15; [1972] 3 All ER 101 .… 3.73, 11.11 Hebbard v Bell Potter Securities Ltd (2005) 216 ALR 779 .… 4.36 Hebden v Forsey & Son [1973] ICR 607 .… 12.19, 12.47, 12.48 Hedley Byrne & Co Limited v Heller and Partners [1964] AC 465; [1963] 2 All ER 575 .… 16.55, 16.56 Heilbut, Symons & Co v Buckleton [1913] AC 30 .… 5.7 Heine Bros (Aust) Pty Ltd v Forrest [1963] VR 383 .… 7.129, 10.31, 11.12, 15.31, 15.34, 16.28, 16.29 Helmers v Coppins (1961) 106 CLR 156 .… 3.8, 3.24 Helmet Integrated Systems Ltd v Tunnard [2007] FSR 437; IRLR 126 .… 7.30, 7.36, 7.43, 7.49, 7.59, 7.62, 7.67, 7.79, 7.85, 7.88, 7.89, 7.90, 7.105, 8.16, 16.25 Helmore v Smith (1887) 35 Ch D 449 .… 7.32, 7.58, 7.111 Helmos Enterprises Pty Ltd v Jaylor Pty Ltd [2005] NSWCA 235 .… 3.40 Hely-Hutchinson v Brayhead Ltd [1968] 1 QB 549 .… 3.76

Hem v Cant (2007) 159 IR 113; [2007] FCA 81 .… 8.13, 8.25, 8.27, 14.116 Henderson v Commissioner of Railways (WA) (1937) 58 CLR 281 .… 8.63 Henderson, Hallam-Eames & Hughes v Merrett Syndicates Ltd [1995] 2 AC 145; [1994] 3 All ER 506 .… 7.35, 7.36, 7.40, 7.41 Henry v Hammond [1913] 2 KB 515 .… 7.52 — v London General Transport Services [2002] ICR 910 .… 5.68, 6.24, 6.48, 10.99 — v Ryan [1963] Tas SR 90 .… 7.140 Henry Kendall & Sons v William Lillico & Sons Ltd [1969] 2 AC 31; [1968] 2 All ER 444 .… 5.31 Henthorn v Central Electricity Board [1980] IRLR 361 .… 9.19 — v Fraser [1892] 2 Ch 27 .… 3.13, 3.16, 3.24 Heptonstall v Gaskin (2005) 138 IR 103; [2005] NSWSC 30 .… 8.13, 8.18, 8.22 Herbert Clayton and Jack Waller Ltd v Oliver [1930] AC 209 .… 8.37, 8.39, 8.40, 14.91 Herbert Morris Ltd v Saxelby [1916] 1 AC 688 .… 16.7, 16.12, 16.16, 16.34, 16.38, 16.39, 16.42, 16.45 Hewcastle Catering Ltd v Ahmed [1992] ICR 626 .… 4.23, 4.30, 4.31 Hewitt v Bonvin [1940] 1 KB 188 .… 2.51 Heyman v Darwins Ltd [1942] AC 356; 1 All ER 337 .… 10.8, 10.21, 10.73, 10.76 Hick v Raymond & Reid [1893] AC 22 .… 9.55 Higgins v Prospect County Council (1983) 3 IR 471 .… 5.8 High Table Ltd v Horst [1998] ICR 409 .… 6.18 Hile v Corecki Municipal Council (1915) 3 LGR 51 .… 11.45 Hill v CA Parsons & Co Ltd [1972] Ch 305; [1971] 3 All ER 1345 .… 10.66, 10.83, 11.57, 11.58, 11.59, 11.65, 11.69, 14.40, 15.3, 15.11, 15.22, 15.38, 15.50

— v Develcon Electronics Ltd (1991) 37 CCEL 19 .… 3.27 — v General Accident Fire and Life Assurance Corporation Plc [1998] IRLR 641 .… 5.55, 8.29, 11.27 — v Green (1999) 48 NSWLR 161; 96 IR 371; [1999] NSWCA 477 .… 11.34, 15.95, 15.106 — v Rose [1990] VR 129 .… 15.116 Hillas and Co Ltd v Arcos Ltd [1932] All ER Rep 494 .… 3.49 Hills v Brambles Holdings Ltd (1987) 4 ANZ Insurance Cases 60-785 .… 10.19 — v Higgins (1982) 40 ALR 476 .… 9.11, 9.59 Hillsdown Holdings Plc v Pensions Ombudsman [1997] 1 All ER 862 .… 8.23, 8.29 Hilton v Thomas Burton (Rhodes) Ltd [1961] 1 All ER 74 .… 8.64 Hilton Hotels of Australia Limited v Pasovska (2003) 122 IR 428 .… 12.9, 12.11, 12.17, 12.18, 12.20, 12.30, 12.35, 12.53, 12.54 Hinch v Attorney-General (Vic) (1987) 164 CLR 15; 74 ALR 353 .… 15.67 Hippisley v Knee Brothers [1905] 1 KB 1 .… 7.42, 7.69, 7.96, 7.97, 7.98 Hirji Mulji v Cheong Yue Steamship Company Limited [1926] AC 497 .… 12.3, 12.7, 12.9, 12.10, 12.45, 12.47, 12.49 Hirsch v The Zinc Corporation Limited (1917) 24 CLR 34 .… 12.3, 12.49 Hiser v Hardex Co-operative Ltd [1994] NSWSC 3412 .… 4.11 Hitch v Stone (Inspector of Taxes) [2001] EWCA Civ 63; STC 214 .… 2.31, 5.23 Hitchcock v Coker (1837) 6 Ad & El 438 .… 16.11 Hitton v Skinner [2001] IRLR 727 .… 6.10, 6.15, 8.19, 8.24, 8.25 Hivac Ltd v Park Royal Scientific Instruments Ltd [1946] Ch 169; 1 All ER 350 .… 7.6, 7.7, 7.30, 7.32, 7.35, 7.42, 7.48, 7.49, 7.86 Hoad v Swan (1920) 28 CLR 258 .… 10.16, 10.34, 10.79, 10.99

Hobbs v London and South Western Railway Co (1875) LR QB 111 .… 14.80 — v Petersham Transport Co Pty Ltd (1971) 124 CLR 220 .… 2.40 Hochster v De La Tour (1853) 2 El & Bl 678; 118 ER 922 .… 10.10, 10.21, 10.24, 10.34, 10.68 Hodge v Ultra Electric Ltd [1943] KB 742 .… 8.39 Hoenig v Isaacs [1952] 2 All ER 176 .… 3.5, 9.28, 9.29, 9.37, 9.38 Hogan v Tumut Shire Council (1954) 54 SR (NSW) 284 .… 5.65, 8.32, 10.20 Hogg v Dover College [1990] ICR 39 .… 6.14, 6.39 Holdcroft v Market Garden Produce Pty Ltd [2001] 2 Qd R 381; [2000] QCA 396 .… 4.23, 4.24 Hole v Bradbury (1879) 12 Ch D 886 .… 6.42 Holland v London Society of Compositors (1924) 40 TLR 440 .… 5.111 — v Wiltshire (1954) 90 LR 409 .… 10.60, 10.90, 10.99 Hollier v Rambler Motors (AMC) Ltd [1972] 2 QB 71 .… 5.32 Hollingsworth v Commissioner of Police (1999) 47 NSWLR 151 .… 7.18 Hollis v Vabu Pty Ltd (2001) 207 CLR 21; 181 ALR 263; 106 IR 80 .… 2.1, 2.5, 2.6, 2.8–2.13, 2.16, 2.18, 2.24, 2.26, 2.27, 2.31, 8.62 Holloway v Gilport Pty Ltd (1995) 59 IR 305 .… 4.33, 4.37 — v Witham (1990) 21 NSWLR 70 .… 14.34, 14.78 Holly v Director of Public Works (1988) 14 NSWLR 140 .… 2.39, 11.29 Holt v Musketts Timber Sales Pty Ltd (1994) 54 IR 323 .… 11.39, 11.50 Home Counties Dairies Ltd v Skilton [1970] 1 WLR 526; [1970] 1 All ER 1227 .… 16.9, 16.14, 16.31 Hometeam Constructions Pty Ltd v McCauley [2005] NSWCA 303 .… 11.7 Homeward Bound Extended Goldmining Co Ltd, The v Anderson (1884) NZLR 3 SC 266 .… 3.18 Honey Pool of Western Australia (No 2), Re (1988) 14 ACLR 621 .… 3.68

Honeyman v Nhill Hospital [1994] 1 VR 138 .… 5.37, 5.40, 5.43, 5.97, 15.100, 15.110 Hooper v Rogers [1975] Ch 43 .… 15.119 Hopkins v Norcros Plc [1994] ICR 11 .… 14.118, 14.122 Horcal Ltd v Gatland [1984] IRLR 288 .… 7.20, 10.51 Horkulak v Cantor Fitzgerald International [2004] ICR 697 .… 8.14, 8.17, 8.18, 8.20, 8.21, 8.25, 8.29, 8.31, 8.32, 10.31, 10.58, 10.59, 10.85, 14.52, 14.56, 14.57, 14.109 — v — [2005] ICR 402; [2004] EWCA Civ 1287 .… 8.14, 8.17, 8.18, 8.20, 8.21, 8.25, 8.29, 8.31, 8.32, 10.58, 10.59, 10.85, 14.52, 14.56, 14.57, 14.109 Horlock v Beal [1916] AC 486 .… 12.1, 12.4, 12.4, 12.22, 12.23, 12.44, 12.47 Horne v Barber (1920) 27 CLR 494 .… 4.24 — v London and North Western Railway Company (1862) 10 WR 170 .… 15.17 Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216; 18 ALR 639 .… 4.37, 4.38, 14.34 Horwood v Millar’s Timber and Trading Company [1917] 1 KB 305 .… 4.25, 6.43, 11.22, 15.18 Hospital Products Limited v United States Surgical Corporation (1984) 156 CLR 41; 55 ALR 417 .… 5.7, 5.49, 5.57, 5.58, 7.34, 7.35, 7.36, 7.40, 7.46, 7.47, 7.71, 7.90, 15.129, 15.130, 15.138 Hospitality Group Pty Limited v Australian Rugby Union (2001) 110 FCR 157; [2001] FCA 1040 .… 8.57, 14.16, 15.126 Houghton v Arms (2006) 225 CLR 553; 231 ALR 534 .… 14.1 — v Immer (No 155) Pty Ltd (1997) 44 NSWLR 46 .… 14.24 Hounslow London Borough Council v Twickenham Garden Developments Ltd [1971] Ch 233; [1970] 3 All ER 326 .… 11.17 Household Fire Insurance v Grant (1879) LR 4 Ex D 216 .… 3.24

Hovenden & Sons v Millhoff (1900) 83 LR 41 .… 7.95, 7.96, 7.99 Howard v Oakwood Homes Corp, 134 NC App 116 (1999) .… 3.8 — v Pickford Tool Co Ltd [1951] 1 KB 417 .… 10.68, 10.72, 15.102 — v Pilkington (Australia) Ltd [2008] VSC 491 .… 7.13, 7.22, 8.25, 10.31, 10.51, 10.53, 10.103, 14.47, 14.51 Howard F Hudson Pty Ltd v Ronayne (1972) 126 CLR 449 .… 16.2, 16.4, 16.7, 16.17, 16.27 Howard Smith and Co Ltd v Varawa (1907) 5 CLR 68 .… 3.79, 5.23 Howes v Gosford Shire Council [1962] NSWR 58 .… 11.65, 15.15, 15.19, 15.36, 15.50, 15.95, 15.96, 15.97, 15.104, 15.106, 15.107, 15.110, 15.111, 15.112 Howman & Son v Blyth [1983] ICR 416 .… 12.15, 12.16 Howtrac Rentals Pty Ltd v Thiess Contractors (NZ) Limited [2000] VSC 415 .… 5.68, 6.21, 8.33 — v — [2002] VSCA 195 .… 6.21, 8.33 Hoyt’s Pty Ltd v Spencer (1919) 27 CLR 133 .… 5.19 Hudson v Ridge Manufacturing Co Ltd [1957] 2 QB 348 .… 8.74 Hughes v Clewley (No 2) [1996] 1 Lloyd’s Rep 35 .… 4.25 — v London Borough of Southwark [1988] IRLR 56 .… 8.52, 15.46, 15.61, 15.76, 15.85, 15.88 — v NM Superannuation Board Pty Ltd (1993) 29 NSWLR 653; 48 IR 424 . … 3.76, 3.79, 3.80, 5.13, 5.24, 11.7 — v Western Australian Cricket Association (Inc) (1986) 19 FCR 10; 69 ALR 660 .… 16.3, 16.5, 16.8 Hughes Aircraft Systems International v Airservices Australia (1997) 76 FCR 151; 146 ALR 1 .… 7.73, 8.28 Hughes Bros Pty Ltd v Trustees of the Roman Catholic Church (1993) 31 NSWLR 91 .… 8.29 Hulme v Ferranti Limited [1918] 2 KB 426 .… 8.42, 14.37

Humberstone v Northern Timber Mills (1949) 79 CLR 389 .… 2.5, 2.10, 2.13–2.15 Hume Steel Ltd v Attorney-General (Vic) (1927) 39 CLR 455 .… 5.27 Humlock v Blacklow (1670) 1 Mod 64; 86 ER 734 .… 9.14 Humphrey Earl Ltd v Speechley (1951) 84 CLR 126 .… 8.63 Humphries v Proprietors ‘Surfers Palms North’ Group Title Plan 1955 (1994) 179 CLR 597; 121 ALR 1 .… 3.60 Humphris-Clarke v Lazaridis [2010] NSWSC 318 .… 3.20, 3.54 Hungerfords v Walker (1989) 171 CLR 125; 84 ALR 119 .… 14.31 Hunkin v Siebert (1934) 51 CLR 538 .… 5.91, 9.14, 9.60, 11.30 Hunt v Severs [1994] 2 AC 350 .… 14.130 Hunter Area Health Service v Marchlewski (2000) 51 NSWLR 268; [2000] NSWCA 294 .… 14.84 Hunter Kane Ltd v Watkins [2004] EWCA 841 .… 7.93 Hurrell v Ellis (1845) 2 CB 295; 135 ER 958 .… 16.51 Hurst v Bryk [2002] 1 AC 185; [2002] 2 All ER 193 .… 8.36 Husain v Bank of Credit and Commerce International SA [2002] EWCA Civ 82 .… 14.88 Hussain v New Taplow Paper Mills Ltd [1988] AC 514; 1 All ER 541 .… 14.121, 14.123 — v Surrey and Sussex Healthcare NHS Trust [2011] EWHC 1670 (QB) .… 5.44, 5.78, 8.29, 8.32 Hussein v Secretary of the Department of Immigration and Multicultural Affairs (No 2) (2006) 155 FCR 304; 157 IR 405; [2006] FCA 1263 .… 4.31 — v Westpac Banking Corporation (1995) 59 IR 103 .… 7.140, 7.141 Hutchinson v Scott (1905) 3 CLR 359 .… 4.31 Hutchison v Harris (1978) 10 BLR 19 .… 9.50

Huttman v Boulnois the Younger (1826) 2 Car & P 510; 172 ER 231 .… 5.75, 9.25, 9.31, 11.42, 11.43 HWC v The Corporation of the Synod of the Diocese of Brisbane (2008) 220 FLR 92; [2008] QSC 212 .… 16.58 Hyde v Watts (1843) 12 M & W 254; 152 ER 1193 .… 14.27 Hydrocool Pty Ltd v Hepburn (No 4) (2011) 279 ALR 646; [2011] FCA 495 . … 7.38, 7.82, 7.84, 7.115 Hyland v J H Barker (North West) Ltd [1985] ICR 861 .… 4.24, 4.26

I I & L Securities Pty Limited v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109; 192 ALR 1 .… 4.38, 14.34 Ibekwe v London General Transport Services Ltd [2003] EWCA Civ 1075; [2003] IRLR 697 .… 8.30 ICAP Australia Pty Ltd v BGC Partners (Australia) Pty Ltd (2005) 139 IR 293; [2005] FCA 130 .… 7.129, 15.32, 15.79, 15.90 ICI Australian Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248; 110 ALR 47 .… 15.66 ICT Pty Ltd v Sea Containers Ltd (1995) 39 NSWLR 640 .… 16.14 IF Asia Pacific Pty Ltd v Galbally (2003) 59 IPR 43; [2003] VSC 192 .… 16.7, 16.10, 16.23, 16.31, 16.35, 16.39, 16.48, 16.49 Igbo v Johnson, Matthey Chemicals Ltd [1986] ICR 505 .… 11.81 Ikin v Cox Bros (Aust) Ltd (1929) 25 Tas LR 1 .… 3.59 — v The Danish Club (2001) 140 IR 101; [2001] VSCA 123 .… 5.65, 11.18, 11.48, 11.62 Ilkiw v Samuels [1963] 1 WLR 991; [1963] 2 All ER 879 .… 8.64 Illawarra Area Health Service v Dell [2005] NSWCA 381 .… 8.67 Immer (No 145) Pty Ltd v Uniting Church in Australia Property Trust (NSW) (1993) 182 CLR 26; 112 ALR 609 .… 10.78, 10.79, 10.90, 10.94

Imperial Group Pension Trust Ltd v Imperial Tobacco Ltd [1991] 2 All ER 597; 1 WLR 589; [1991] ICR 524 .… 6.8, 8.13, 8.20, 8.23, 8.29 Imperial Loan Co Ltd v Stone [1892] 1 QB 599 .… 3.66 Inco Ships Pty Ltd v Hardman (2007) 167 FCR 294; 242 ALR 350 .… 4.23, 4.28 Independent Education Union of Australia v Canonical Administrators (1998) 87 FCR 49; 157 ALR 531; 84 IR 123 .… 9.16, 9.43 Independent Management Resources Pty Ltd v Brown [1987] VR 605 .… 7.58, 7.90 Independent Schools’ Staff Association (ACT), Re; Ex p Hubert (1986) 65 ALR 673 .… 3.69 Industrial Development Consultants Ltd v Cooley [1972] 1 WLR 443; 2 All ER 162 .… 7.49, 7.58, 7.59, 7.66, 7.68, 7.82, 7.92, 15.136 Industrial Furnaces Ltd v Reaves [1970] RPC 605 .… 15.135 Industrial Relations Bureau v Knox Auto Parts & Accessories Pty Ltd (1982) 1 IR 314 .… 7.28, 10.19 Industrial Rollformers Pty Ltd v Ingersoll-Rand (Aust) Ltd [2001] NSWCA 111 .… 16.24 Industries & General Mortgage Co Limited v Lewis [1941] 1 All ER 573 .… 7.95, 7.96, 7.98, 7.99 Informax International Pty Ltd v Clarius Group Ltd (2011) 192 FCR 210; 277 ALR 495 .… 16.5, 16.27, 16.34 Ingham v Vita Pacific Ltd (1994) 20 MVR 342 .… 8.36 Inglis v John Buttery & Co (1878) 3 App Cas 552 .… 5.9 Inland Revenue Commissioners v Duke of Westminster [1936] AC 1; [1935] All ER 259 .… 3.28, 9.13 Inman v Ackroyd & Best Limited [1901] 1 QB 613 .… 9.28, 9.29, 9.33 Inntrepreneur Pub Co (GL) v East Crown Ltd [2000] All ER (D) 1100; [2000] 2 Lloyd’s Rep 611 .… 5.20 Inspector Cruse v Construction, Forestry, Mining and Energy Union (2008)

175 IR 447; [2008] FCA 1267 .… 4.8 Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110 .… 3.4, 6.21 Intelsec Systems Ltd v Grech-Cini [1999] 4 All ER 11 .… 7.120, 16.38 Interest Research Bureau Pty Ltd v Interest Recount Pty Ltd (1997) 38 IPR 468 .… 15.134 Interfirm Comparison (Aust) Pty Ltd v Law Society of New South Wales [1975] 2 NSWLR 104 .… 7.58, 7.126, 7.129 International Air Transport Association v Ansett Australia Holdings Ltd (2008) 234 CLR 151; 242 ALR 47 .… 3.6, 5.10 International Cable Co, Re (1892) 8 TLR 307 .… 13.21 International Flavours and Fragrances (Australia) Pty Ltd v Hoff [2008] VSC 56 .… 13.5 International Harvester Export Co v International Harvester Australia Ltd [1983] 1 VR 539 .… 13.17, 13.23, 14.127 International Paper Company v Spicer (1906) 4 CLR 739 .… 3.72 International Scientific Communications Inc v Pattison [1979] FSR 429 .… 7.45, 7.69, 7.128, 16.48 Intico (Vic) Pty Ltd v Walmsley [2004] VSCA 90 .… 8.19, 8.23, 8.26, 11.23, 11.24, 11.25, 11.26 Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 .… 5.10, 5.22 Ioannou v Fowell (1982) 43 ALR 415; 63 FLR 170 .… 11.29 — v — (1982) 45 ALR 491; 65 FLR 360 .… 11.29 — v — (1984) 156 CLR 328; 52 ALR 460 .… 11.29 Ipex Software Services Pty Ltd v Hosking [2000] VSCA 239 .… 3.49, 3.51, 3.58, 14.54 IRAF Pty Ltd v Graham [1982] 1 NSWLR 417 .… 16.32 Irani v Southampton and South West Hampshire Area Health Authority

[1985] ICR 590 .… 11.15, 15.11, 15.19, 15.22, 15.24, 15.35, 15.37, 15.38, 15.46, 15.75, 15.87 Ireland v Johnson (2009) 189 IR 135; [2009] WASCA 162 .… 2.1, 3.46, 5.80, 11.29 Irons v Merchant Capital Ltd (1994) 116 FLR 204 .… 3.25, 6.24, 6.25, 6.48, 11.45, 11.55, 11.57, 11.59, 14.47 Irving v Kleinman [2005] NSWCA 116 .… 8.13, 8.19 Island Export Finance Ltd v Umunna [1986] BCLC 460 .… 7.92, 7.93, 16.43, 16.44 Isle of Wight Tourist Board v JJ Coombes [1976] IRLR 413 .… 7.141, 8.25, 10.54 Item Software (UK) Ltd v Fassihi [2004] IRLR 928 .… 9.32, 9.33, 9.34 — v — [2005] ICR 450 .… 7.20 Ivory v Palmer [1975] ICR 340 .… 11.21, 11.22, 14.24, 14.47 Ixora Trading Ltd v Jones [1990] 1 FSR 251 .… 16.47 Izdes v LG Bennett & Co Pty Ltd (1995) 61 IR 439 .… 7.14

J J Evans & Son (Portsmouth) Ltd v Andrea Merzario Ltd [1976] 2 All ER 930 .… 5.13 JA & BM Bowden & Sons Pty Ltd v Chief Commissioner of State Revenue (NSW) (2001) 105 IR 66; [2001] NSWCA 125 .… 2.6, 2.8–2.11, 2.15, 2.18 Jackson v Bridge (1702) 12 Mod 650 .… 12.24, 13.33 — v Hayes Candy and Co Ltd [1928] 4 All ER 587 .… 11.44, 14.108, 14.113 — v Monadelphous Engineering Associates Pty Ltd [1997] IRCA 281 .… 5.85 — v Union Marine Insurance Company Limited (1874) LR 10 CP 125 .… 10.33, 12.2, 12.11, 12.14

Jager v Australian National Hotels Pty Ltd (1998) 7 Tas R 437; [1998] TASSC 54 .… 8.13, 11.55 — v — (2000) 9 Tas R 153 .… 8.13, 11.55 Jaggard v Sawyer [1995] 1 WLR 269; 2 All ER 189 .… 15.118, 15.119 Jakeman v South West Thames Regional Health Authority [1990] IRLR 62 . … 15.50, 15.84, 15.89 Jakobkiewicz v Dickson Catering Pty Ltd [2002] ACTSC 107 .… 3.44 Jamal v Secretary, Department of Health (1986) EOC 92-162 .… 14.33 James v Cowan; Botten, Re (1929) 42 CLR 305 .… 7.131 — v Redcats (Brands) Ltd [2007] IRLR 296 .… 2.17 — v London Borough of Greenwich [2008] IRLR 302 .… 3.32, 3.33 — v Thomas H Kent & Co Ltd [1951] 1 KB 551; [1950] 2 All ER 1099 .… 11.18 James Hardie & Co Pty Ltd v Seltsam Pty Ltd (1998) 196 CLR 53; 159 ALR 268 .… 8.35 James Miller Holdings Ltd v Graham (1978) 3 ACLR 604 .… 6.13, 11.10, 13.17 James Turner Roofing Pty Ltd v Peters (2003) 132 IR 122; [2003] WASCA 28 .… 5.87, 5.88, 5.89 Janata Bank v Ahmed [1981] ICR 791 .… 7.24, 7.26, 14.1 Janciuk v Winerite Ltd [1998] IRLR 63 .… 14.62 Jarrad v Silver Top Taxi Service (1980) 43 FLR 1 .… 7.52, 15.133 Jarrett v Commissioner of Police (NSW) (2005) 224 CLR 44; 221 ALR 95; 145 IR 194 .… 5.50, 5.91, 5.92, 9.20, 9.61, 10.43, 10.49, 10.60, 10.63, 11.29, 11.30, 11.34, 11.35, 11.39, 14.35, 14.38, 14.41, 14.60, 14.62, 14.87, 15.20 Jarvis (dec’d), Re [1958] 1 WLR 815 .… 15.130 JC Williamson Ltd v Lukey (1931) 45 CLR 282 .… 4.26, 15.6, 15.17, 15.28, 15.50, 15.55, 15.57, 15.117

— v Musicians’ Union of Australia (1912) 15 CLR 636 .… 5.104 — v — (1913) 17 CLR 261 .… 5.104 Jeffress Advertising Pty Ltd v Barlow (SC(Tas), Zeeman J, 15 October 1993, unreported) .… 15.53 Jenkin v Pharmaceutical Society of Great Britain [1921] 1 Ch 392 .… 3.67 Jennings Industries Ltd v Negri (1982) 44 ACTR 9 .… 2.17, 2.20, 2.24, 2.41 Jenvey v Australian Broadcasting Corporation [2003] ICR 79 .… 8.29, 11.27 Jesse v Roy (1834) 1 C M & R 316; 149 ER 1101 .… 9.26, 9.31, 13.34 Jewry v Busk (1814) 5 Taunt 302 .… 3.59 Jhagroo v Teaching Service Commission (Trinidad and Tobago) [2002] UKPC 63 .… 15.113 JJ Savage & Sons Pty Ltd v Blakney (1970) 119 CLR 435 .… 5.7 Jobber v Addressograph Multigraph of Canada Ltd (1980) 1 CCEL 87 .… 11.48 John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1; 266 ALR 462 .… 5.49, 7.34, 7.36, 7.40, 7.41, 7.71, 15.136 John Heine & Son Ltd v Pickard (1921) 29 CLR 592 .… 3.43 John Holland Group Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2010) 198 IR 439; [2010] VSC 322 .… 5.106, 12.5, 12.52, 16.21 — v — [2011] VSCA 396 .… 12.5, 12.52, 16.21 John Lysaght (Australia) Ltd v Federated Iron Workers Association [1972] AILR 517 .… 10.58 John McCann & Co v Pow [1974] 1 WLR 1643 .… 9.54 John Michael Design Plc v Cooke [1987] 2 All ER 332 .… 15.88 Johns v Australian Securities Commission (1993) 178 CLR 408; 116 ALR 567 .… 7.126, 7.135, 15.70 Johnson v Agnew [1980] AC 367; [1979] 1 All ER 883 .… 10.73, 10.79, 10.97, 14.25, 15.13, 15.65, 15.118, 15.119

— v Clark [1908] 1 Ch 303 .… 3.65 — v Cross [1977] ICR 872 .… 8.43 — v Kearley [1908] 2 KB 514 .… 8.34 — v Marshall Sons and Co Ltd [1906] AC 409 .… 10.19, 10.48, 10.53 — v Perez (1988) 166 CLR 531; 82 ALR 587 .… 14.25, 15.119 — v Shrewsbury and Birmingham Railway Company (1853) 3 De G M & G 914; 43 ER 358 .… 15.17, 15.55 — v Unisys Ltd [2003] 1 AC 518; [2001] 2 All ER 801; [2001] 2 WLR 1076 .… 1.10, 5.39, 5.40, 5.49, 5.97, 6.8, 8.13, 8.14, 8.15, 8.16, 8.17, 8.22, 8.23, 8.27, 8.29, 8.31, 8.52, 10.49, 11.24, 11.26, 14.62, 14.69, 14.71, 14.72, 14.73, 14.75, 14.76, 14.77, 14.79, 14.81, 14.82, 14.83, 14.87, 14.88, 14.89, 14.92, 14.94, 15.46, 16.54 Johnson & Bloy (Holdings) Ltd v Wolstenholme Rink Plc and Fallon [1989] 1 FSR 135 .… 7.128, 16.45, 16.46, 16.49 Johnson Matthey Ltd v AC Rochester Overseas Corp (1990) 23 NSWLR 190 .… 5.20 Johnstone v Bloomsbury Health Authority [1992] QB 333; [1991] 2 All ER 293; [1991] ICR 269 .… 5.49, 6.8, 8.23 — v Sutton (1786) 1 Term R 510; 99 ER 1225 .… 9.14 Jones v Associated Tunnelling Co Ltd [1981] IRLR 477 .… 5.24, 5.59, 6.19, 6.20, 6.24 — v Bouffier (1911) 12 CLR 579 .… 3.70 — v Department of Energy and Minerals (1995) 60 IR 304 .… 13.4, 13.5 — v Gwent County Council [1992] IRLR 521 .… 11.15, 15.11, 15.22, 15.35, 15.40, 15.75, 15.79 — v Hope (1880) 3 TLR 247 .… 3.79 — v Lee (1980) 78 LGR 213; [1980] ICR 310 .… 3.9, 3.72, 5.30, 11.15, 11.16, 15.11, 15.22, 15.24, 15.35, 15.75 — v London County Council [1936] Ch 50 .… 15.100

— v Lorne Sawmills Pty Ltd [1923] VLR 58 .… 14.28 — v Padavatton [1969] 2 All ER 616 .… 3.41 — v Persal & Company (a firm) [2000] QCA 386 .… 7.24, 8.65 — v Queensland Tertiary Admissions Centre Ltd (2009) 190 IR 218; [2009] FCA 1382 .… 10.49, 14.87 — v — (No 2) (2010) 186 FCR 22; 196 IR 241; [2010] FCA 399 .… 3.76, 6.26 — v TRW Ltd [2007] EWHC 1091 .… 5.105, 6.26, 6.34 — v Wagon Repairs Limited [1968] ITR 361 .… 12.47 — v Williams, 139 Mo 1; 39 SW 486 (1987) .… 6.15 Jonstan Pty Ltd v Nicholson (2003) 58 NSWLR 223 .… 8.35 Jordan v Aerial Taxi Cabs Co-operative Society Ltd (2001) 108 IR 263; [2001] FCA 972 .… 6.24 Joseph Constantine Steamship Line Limited v Imperial Smelting Corporation Limited [1942] AC 154; [1941] 2 All ER 165 .… 12.31, 12.36, 12.39, 12.48, 12.49 Josephson v Walker (1914) 18 CLR 691 .… 5.85, 5.94 — v Young (1900) 21 LR (NSW) 188 .… 2.39 Journalists (Metropolitan Daily Newspapers) Award, Re (1959) 4 FLR 164 . … 4.29 JQAT Pty Ltd v Storm [1987] 2 Qd R 162 .… 16.22 JT Stratford & Son Ltd v Lindley [1964] 2 All ER 209 .… 7.3 — v — [1965] AC 269 .… 11.10 Judge v Crown Leisure Ltd [2005] IRLR 823 .… 3.52 Jumbunna Coal Mine NL v Victorian Coal Miners’ Association (1908) 6 CLR 309 .… 3.67 Jupiter General Insurance v Shroff [1937] 3 All ER 67 .… 7.28, 7.141, 10.46, 10.54

K K v Raschen (1878) 38 LT 38 .… 12.39 Kalamazoo (Aust) Pty Ltd v Compact Business Systems Pty Ltd (1984) 84 FLR 101 .… 15.127 Kalouche v Legion Cabs (Trading) Co-operative Society Ltd (1998) 81 IR 415 .… 7.141 Karabotsos v Plastex Industries Pty Ltd [1981] VR 675 .… 14.114 Karatzidis v Victorian Railways Commissioners [1971] VR 360 .… 8.65, 8.69 Karl Suleman Enterprizes Pty Ltd v Babanour (2004) 49 ACSR 612; [2004] NSWCA 214 .… 15.60 Kashemije Stud Pty Ltd v Hawkes [1978] 1 NSWLR 143 .… 7.24 Katsilis v Broken Hill Proprietary Co Ltd (1977) 18 ALR 181 .… 8.61, 8.62, 8.65 Kaufman v McGillicuddy (1914) 19 CLR 1 .… 10.76, 13.30, 14.39, 15.52, 16.18 Kavanagh v Commonwealth (1960) 103 CLR 547 .… 8.63 Kay v Lambeth London Borough Council [2006] 2 AC 465; 4 All ER 128 .… 15.106 Kaye v Attorney-General (Tas) (1956) 94 CLR 193 .… 11.30 — v Cooke’s (Finsbury) Ltd [1974] ICR 65 .… 3.59, 9.55 Kearney v Crepaldi [2006] NSWSC 23 .… 16.36 Keates v Lewis Merthyr Consolidated Collieries [1911] AC 641 .… 9.51 Keays v J P Morgan Administrative Services Australia Limited [2011] FCA 358 .… 3.8, 3.11, 4.39, 5.13, 6.15, 11.48, 13.8, 14.24 Keech v Sandford (1726) Sel Cas T King 61; 25 ER 223 .… 7.35 Keen v Commerzbank AG [2007] ICR 623; [2006] EWCA Civ 1536 .… 8.29, 8.32, 14.52 Keighley Maxstead & Co v Durant [1901] AC 240 .… 3.79, 3.85

Keith Henry & Co Pty Ltd v Stuart Walker & Co Pty Ltd (1958) 100 CLR 342 .… 7.50, 7.99, 15.136 Kelly v Alford [1988] 1 Qd R 404 .… 7.12, 7.26, 8.35 Kelmar v Adelaide United Friendly Societies’ Dispensary [1913] SALR 121 . … 10.20 Kemble v Kean (1829) 6 Sim 333 .… 15.15, 15.17, 15.57, 15.59 Kemp v Lewis [1914] 3 KB 543 .… 3.44 Kendle v Melsom (1998) 193 CLR 46; 151 ALR 740 .… 13.17 Kennedy v Australasian Coal and Shale Employees Federation (No 2) (1983) 9 IR 355 .… 3.15, 9.55, 15.6 Kibby v Registrar of Titles [1999] 1 VR 861 .… 3.69 Kidd v AXA Equity and Law Life Assurance Society Plc [2000] IRLR 301 . … 16.56 — v Savage River Mines (1984) 6 FCR 398; (1984) 9 IR 362 .… 5.85, 9.52, 9.63 Kilburn v Enzed Precision Products (1988) 5 VIR 31 .… 5.17, 14.30, 14.45, 14.47 Kilminster v Sun Newspapers Ltd (1931) 46 CLR 285 .… 11.51 King v GIO Australia Holdings Ltd (2001) 184 ALR 98; [2001] FCA 308 .… 4.40 — v Ivanhoe Gold Corporation Limited (1908) 7 CLR 617 .… 3.59 — v Michael Faraday and Partners Ltd [1939] 2 KB 753 .… 6.43 — v University Court of the University of St Andrews [2002] IRLR 252 .… 8.15, 8.25, 11.15, 11.24, 14.76 King’s Norton Metal Co Ltd v Edridge Merrett & Co Ltd (1897) 14 TLR 98 . … 4.18 Kingshott v Goodyear Tyre & Rubber Co Australia Ltd (No 2) (1987) 8 NSWLR 707 .… 8.71 Kirchner v Mayne Nickless Ltd (2000) 140 IR 340; [2000] VSC 459 .…

14.128, 14.129, 14.130 Kirchner & Co v Gruban [1909] 1 Ch 413 .… 7.113, 7.118, 14.132, 15.15, 15.29 Kitchen Design Systems Pty Ltd v Moran (2007) 165 IR 127 .… 2.3 Kleinwort Benson Ltd v Lincoln City Council [1999] 2 AC 349; [1998] 4 All ER 513 .… 4.15 Knapton v ECC Card Clothing Ltd [2006] ICR 1084 .… 14.121, 14.122 Knevitt v Commonwealth of Australia [2009] NSWSC 1341 .… 3.75, 5.19 Knight v Bulic (1994) 13 ACSR 553 .… 11.6 Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44; 214 ALR 355; 139 IR 309 .… 8.13, 8.65, 8.66, 8.67 KofiSunkersette Obu v A Strauss and Co Ltd [1951] AC 243 .… 3.56, 3.57 Kondis v State Transport Authority (1984) 154 CLR 672; 55 ALR 225 .… 8.56, 8.60, 8.61, 8.65, 8.69, 8.70, 8.73 Kone Elevators Pty Ltd v McNay (1997) ATPR 41-563 .… 15.32 Konrad v Victoria Police (1999) 91 FCR 95; 165 ALR 23 .… 2.1, 2.5 Konski v Peet [1915] 1 Ch 530 .… 11.78, 16.15, 16.23, 16.31 Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115; 241 ALR 88 .… 10.8, 10.9, 10.14, 10.15, 10.16, 10.17, 10.21, 10.22, 10.25, 10.40, 10.45, 10.48, 10.51, 10.56 Koops Martin Financial Services Pty Ltd v Reeves [2006] NSWSC 449 .… 16.32, 16.34 Kooragang Investments Pty Ltd v Richardson & Wrench Ltd [1982] AC 462 . … 8.64 Kordos v Plumrose (Australia) Ltd (1986) EOC 92-256 .… 14.33 Kores Manufacturing Co Ltd v Kolok Manufacturing Co Ltd [1957] 3 All ER 158 .… 16.5, 16.8 — v — [1958] 2 All ER 65 .… 16.5, 16.8 Kornerup v Raytheon Canada Ltd (2007) 282 DLR (4th) 434 .… 6.26, 6.33

Koufos v C Czarnikow Ltd [1969] 1 AC 350; [1967] 3 All ER 686 .… 14.21, 14.22 Kowalski v Mitsubishi Motors Australia Ltd (AIRC, Watson and Cartwright SDPP, Whelan C, Print PR914818, 1 March 2002) .… 12.30 Krell v Henry [1903] 2 KB 740 .… 12.2, 12.28 Kropfelder v Snap-On Tools Corporation, 859 F Supp 952 (2004) .… 11.19 Kuddus v Chief Constable of Leicestershire Constabulary [2001] 3 All ER 193 .… 14.16 Kulatilake v Nottingham Area Health Authority (Teaching) (UKCA, Cumming-Bruce, Brandon and O’Connor LJJ, 17 October 1980, unreported) .… 15.35 Kulkarni v Milton Keynes Hospital NHS Trust [2010] ICR 101; [2009] EWCA Civ 789 .… 3.7, 3.49, 3.60, 15.22, 15.24, 15.99, 16.20 Kwan v Queensland Corrective Services Commission (1994) 34 IPR 25 .… 7.105 Kwik-Fit (GB) Ltd v Lineham [1992] ICR 183 .… 11.12

L LAC Minerals Ltd v International Corona Resources Ltd (1989) 16 IPR 27 . … 7.58, 7.129, 15.136 Lakshmi v Mid Cheshire Hospitals NHS Trust [2008] IRLR 956 .… 5.40, 8.24, 10.88, 10.93, 11.15, 11.23, 14.62, 15.35, 15.39, 15.40, 15.54 Lakshmijit v Sherani [1974] AC 605 .… 10.94 Lam v Ausintel Investments Australia Pty Ltd (1989) 97 FLR 458 .… 7.18 Lamb v Cotogno (1987) 164 CLR 1; 74 ALR 188 .… 8.57, 14.16, 14.84 — v Evans [1893] 1 Ch 218 .… 7.32, 7.44, 7.111 Lamburn v Cruden (1841) 2 M & G 253; 133 ER 741 .… 9.31 Lamshed v Lamshed (1963) 109 CLR 440 .… 15.62 Lancashire Fires Ltd v SA Lyons & Co Ltd [1996] FSR 629 .… 7.90, 15.62,

15.70, 16.46 Lancaster v Greaves (1829) 9 B & C 627; 109 ER 233 .… 1.27, 1.44 Land Securities Trillium Ltd v Thornley [2005] IRLR 765 .… 6.6 Landmark Underwriting Agency Pty Ltd v Kilborn [2006] NSWSC 1108 .… 16.19 Lane v Arrowcrest Group Pty Ltd (1990) 27 FCR 427; 99 ALR 45 .… 10.88, 11.14, 15.39, 15.62 — v Fasciale (1991) 5 VIR 33 .… 15.17, 15.20, 15.35, 15.38, 15.43, 15.81, 15.85 Langhorne v Bennett (1877) 3 VLR 108 .… 7.100 Langley v Burlo [2007] ICR 390 .… 14.117 Langston v Amalgamated Union of Engineering Workers [1974] 1 WLR 185 .… 8.38, 8.41, 8.52, 8.53, 8.55 — v — (No 2) [1974] ICR 510 .… 8.41, 8.52 Langton v Carleton (1873) LR 9 Exch 57 .… 11.19 Lansing Linde Ltd v Kerr [1991] 1 All ER 418 .… 16.15, 16.35 Larking v Great Western (Nepean) Gravel Ltd (1940) 64 CLR 221 .… 10.71, 10.99, 14.26, 14.27 Latchford Premier Cinema Limited v Ennion [1931] 2 Ch 409 .… 11.6 Latham v Singleton [1981] 2 NSWLR 843; (1981) 1 IR 47 .… 7.3, 9.59 Latimer v AEC Ltd [1953] AC 643 .… 8.67 Lau v Bob Jane T-Marts Pty Ltd [2004] VSC 69 .… 3.48, 3.52, 3.56 Laughton v BAPP Industrial Supplies [1986] ICR 634 .… 7.48, 7.67, 7.81, 7.86, 7.88, 7.89, 7.90, 16.25 Laurence David Ltd v Ashton [1989] ICR 123 .… 15.66 — v — [1991] 1 All ER 385 .… 15.66 Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623; 85 ALR 183 .… 3.5, 10.28, 10.51

Lavarack v Woods of Colchester [1967] 1 QB 278; [1966] 3 All ER 683 .… 14.48, 14.49, 14.51, 14.115, 14.120 Lawrence v Todd (1863) 14 CB (NS) 554; 143 ER 562 .… 1.44 Lawrence David Ltd v Ashton [1989] ICR 123 .… 7.124, 15.49, 15.66, 15.88 — v — [1991] 1 All ER 385 .… 7.124, 15.49, 15.66, 15.88 Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 1 WLR 698; [1959] 2 All ER 285 .… 1.1, 7.14, 7.17, 10.2, 10.18, 10.44, 10.51, 10.52, 10.53 Lawton v BOC Transhield Limited [1987] ICR 7 .… 16.53 Lazarus v Cairn Line of Steamships Ltd (1912) 28 TLR 244 .… 8.45 Le Grand v Commissioner of Taxation (2002) 124 FCR 53; 195 ALR 194; [2002] FCA 1258 .… 14.29 Le Loir v Bristow (1815) 4 Camp 134; 171 ER 143 .… 9.51 Le Mans Grand Prix Circuits Pty Ltd v Iliadis [1998] 4 VR 661 .… 5.28 Leahy v Attorney-General (NSW) (1959) 101 CLR 611 .… 3.69 LED Builders Pty Ltd v Eagle Homes Pty Ltd (No 3) (1996) 70 FCR 436; 36 IPR 293 .… 15.124 — v Masterton Homes (NSW) Pty Ltd (1994) 54 FCR 196 .… 15.127 Lee v GEC Plessey Telecommunications [1993] IRLR 383 .… 3.38, 5.105, 6.7, 6.26, 6.34 — v Lee’s Air Farming Ltd [1961] AC 12; [1960] 3 All ER 420 .… 2.15, 2.34 — v Showman’s Guild of Great Britain [1952] 1 All ER 1175 .… 15.16 Lee, Behrens and Co Ltd, Re [1932] 2 Ch 47 .… 2.34 Lee Ting Sang v Chung Chi-Keung [1990] 2 AC 374 .… 2.5, 2.6, 2.8, 2.11, 2.20 Leech v Preston Borough Council [1985] ICR 192 .… 11.75, 11.76, 14.105 Leeds Industrial Co-operative Society Ltd v Slack [1924] AC 85 .… 15.119

Lees v Arthur Greaves (Lees) Ltd [1974] 2 All ER 393; [1974] ICR 501 .… 11.81 — v Whitcomb (1828) 5 Bing 34; 130 ER 972 .… 3.31, 8.38, 8.46 Leetham & Sons Ltd v Johnstone White [1907] 1 Ch 323 .… 16.7, 16.31 Legal & General Assurance Limited v Kirk [2002] IRLR 124 .… 16.56 Leggo v Brown & Dureau Ltd (1923) 32 CLR 95 .… 3.83 Legh v Lillie (1860) 6 H & N 165; 158 ER 69 .… 9.54 Leibler v Air New Zealand Ltd (No 2) [1999] 1 VR 1 .… 4.21 Leichhardt Municipal Council v Montgomery (2007) 230 CLR 22; 233 ALR 200 .… 8.61 Leisure Entertainment Pty Ltd v Willis (1996) 64 FCR 205 .… 15.41 Leisure Leagues UK Ltd v Maconnachie (2002) Times Law Reports, 3 May 2002 .… 9.32, 9.34 Lennon v State of South Australia [2010] SASC 272 .… 10.36, 14.65, 14.77, 14.87 Leplastrier & Co Ltd v Armstrong-Holland Ltd (1926) SR (NSW) 585 .… 15.129 L’Estrange v F Graucob Ltd [1934] 2 KB 394 .… 5.28 Levy v Electrical Wonder Company (1893) 9 TLR 495 .… 11.52 — v Goldhill [1917] 2 Ch 297 .… 10.75 Lewandowski v Mead Carney-BCA Pty Ltd [1973] 2 NSWLR 640 .… 3.58 Lewis v Avery [1972] 1 QB 198 .… 4.18 — v Great Western Railway Co (1877) 3 QBD 195 .… 10.19, 10.53 — v Motorworld Garages Ltd [1986] ICR 157 .… 8.13, 8.20, 8.21, 8.25, 10.36, 10.51, 10.58, 10.59 — v Peachey (1862) 1 H & C 518 .… 14.26 — v Samuel (1846) 8 QB 685; 115 ER 1031 .… 8.36 Lewis Construction Co Pty Ltd v Martin (1986) 70 ALR 135 .… 15.26

Leyland DAF Ltd, Re [1994] 4 All ER 300 .… 6.24 Liberty Financial Pty Ltd v Scott (No 4) (2005) 11 VR 629 .… 16.47 Libra Collaroy Pty Ltd v Angell (1997) 39 IPR 549 .… 7.81 Liddell v Lembke (1994) 127 ALR 342; 56 IR 447 .… 15.26, 15.91 Liddle v Central Australian Legal Aid Service (1999) 150 FLR 142 .… 15.16, 15.95, 15.98, 15.113 Lido-Savoy Pty Ltd v Paredes [1972] VR 297 .… 16.39 Life Insurance Co of Australia Ltd v Phillips (1925) 36 CLR 60 .… 3.60, 4.15, 16.20 Life Savers (A’asia) Ltd v Frigmobile Pty Ltd [1983] 1 NSWLR 431 .… 3.79 LIFFE Administration & Management v Pinkava [2007] 4 All ER 981; [2007] EWCA Civ 217 .… 6.11, 7.104, 7.106 Liffen v Watson [1940] 1 KB 556 .… 14.123 Liftronic Pty Ltd v Unver (2001) 179 ALR 321 .… 8.65, 8.67 Light v Mouchemore (1915) 20 CLR 647 .… 10.19, 10.53 Lilley v Elwin (1848) 11 QB 742; 116 ER 652 .… 9.24, 9.25, 9.29, 9.31, 9.34, 9.49, 11.43 Limpus v London General Omnibus Co (1862) 1 H & C 526; 158 ER 993 .… 8.64 Lincoln Mills (Aust) Ltd v Gough [1964] VR 193 .… 2.34, 14.106 Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd [1994] 1 AC 85; [1993] 3 All ER 417 .… 6.40, 6.41 Lindner v Murdock’s Garage (1950) 83 CLR 628 .… 16.7, 16.10, 16.14, 16.16, 16.21, 16.30, 16.34, 16.39 Lindsay v Queen’s Hotel Company [1919] 1 KB 212 .… 14.47 Linfield Linen Pty Ltd v Nejain (1951) 51 SR (NSW) 280 .… 15.55 Link Agricultural Pty Ltd v Shanahan [1999] 1 VR 466 .… 2.37 Linklaters v HSBC Plc [2003] 2 Lloyd’s Rep 545 .… 8.36

Linnane v Monash University (IRCA, North J, 2 January 1996, unreported) . … 15.40, 15.44, 15.46, 15.50, 15.75 Lion Laboratories Ltd v Evans [1985] QB 526; [1984] 2 All ER 417 .… 15.76, 15.78 Liquid Veneer Co Ltd v Scott (1912) 29 RPC 639 .… 15.69 Liquor, Hospitality and Miscellaneous Union (LHMU) v Arnotts Biscuits Ltd (2010) 188 FCR 221; 198 IR 143; [2010] FCA 770 .… 4.5, 4.8 Lister v Forth Dry Dock & Engineering Co Ltd [1990] 1 AC 546; [1989] 1 All ER 1134 .… 10.63, 14.35 — v Hesley Hall Ltd [2002] 1 AC 215 .… 8.64 — v Romford Ice and Cold Storage Co Ltd [1957] AC 555; 1 All ER 125 .… 5.50, 7.12, 7.24, 7.26, 7.27, 8.35, 8.57, 14.1 Lister & Co v Stubbs (1890) 45 Ch D 1 .… 7.99 Little v The Commonwealth (1947) 75 CLR 94 .… 2.35 Littlewoods Organisation Limited v Harris [1978] 1 All ER 1026; [1977] 1 WLR 1472 .… 7.124, 16.27, 16.40 Liverpool City Council v Irwin [1976] 2 All ER 39 .… 5.48, 5.50 — v — [1977] AC 239 .… 5.48, 5.50 Liverpool Corporation v Wright (1859) Johns 358; 70 ER 461 .… 6.43 Living Design (Home Improvements) Ltd v Davidson [1994] IRLR 69 .… 16.18 LJP Investments Pty Ltd v Howard Chia Investments Pty Ltd (1990) 24 NSWLR 499 .… 14.24 Llanelly Railway and Dock Co v London and North Western Railway Co (1875) LR 7 HL 550 .… 11.21 Lloyd v Foster (1988) 30 AILR 6 .… 15.54 — v Grace, Smith & Co [1912] AC 716 .… 8.64 — v RJ Gilbertson (Qld) Pty Ltd (1996) 68 IR 277 .… 11.50, 11.55, 11.59 Lloyd’s Ships Holdings Pty Ltd v Davros Pty Ltd (1987) 17 FCR 505; 72

ALR 643 .… 16.22 Loates v Maple (1903) 88 LT 288 .… 12.19, 12.46 Lodge Partners Pty Ltd v Pegum [2009] 255 ALR 516; 2[009] FCA 519 .… 5.21 Locabail International Finance Ltd v Agroexport [1986] 1 WLR 657 .… 15.89 Lock v Westpac Banking Corporation (1991) 25 NSWLR 593 .… 8.16, 8.29 Locke, Re; Ex p Commissioner for Railways [1968] 2 NSWR 197 .… 7.23 Locnere Pty Ltd v Jakk’s Bagel and Bread Co Pty Ltd [2003] NSWSC 1123 . … 3.54 Loftus v Roberts (1902) 18 TLR 532 .… 3.38, 3.56, 3.57 Logan v Customs and Excise Commissioners [2003] EWCA Civ 1068 .… 8.21, 10.58, 10.90 — v Otis Elevator Co Pty Ltd (1999) 94 IR 218; [1999] IRCA 4 .… 5.69, 5.74, 5.89, 11.51, 11.52, 11.58, 11.59, 11.60, 11.61 Logicrose Ltd v Southend United Football Club Ltd [1988] 1 WLR 1256 .… 7.95 Lo-Line Electric Motors Ltd, Re [1988] Ch 477; 2 All ER 692 .… 2.34 London and Scottish Bank, Re; Ex p Logan (1869–70) LR 9 Eq 149 .… 13.15 London Borough of Enfield v Sivanandan [2005] EWCA Civ 10 .… 8.15, 10.103 London Export Corporation Ltd v Jubilee Coffee Roasting Co Ltd [1958] 1 WLR 661; 2 All ER 411 .… 5.71 Long v Delta Catalytic Industrial Services Inc (1998) 35 CCEL (2d) 70 .… 11.48 Long Service Leave (Coal Miners) Award (1962) 4 AILR .… 12.21, 12.47 Long Service Leave (Miners) Award, Re (1962) 17 IIB 1048 .… 12.21 Longdon-Griffiths v Smith [1950] 2 All ER 662 .… 14.19

Longley v National Union of Journalists [1987] IRLR 109 .… 11.15 Lopes v Marino [1939] AR (NSW) 188 .… 2.41 Lopez v Deputy Commissioner of Taxation (2005) 233 ALR 405 .… 2.9 Lorca v Holts’ Corrosion Control Pty Ltd [1981] Qd R 261 .… 14.114 Lord Leconfield v Thornely [1926] AC 10 .… 11.5, 11.21 Loughridge v Lavery [1969] VR 912 .… 10.26, 10.40, 10.44, 10.51 Louis v Smellie [1895] All ER 875 .… 16.49 Louth v Diprose (1992) 175 CLR 621; 110 ALR 1 .… 4.10 Lowndes v Earl of Stamford (1852) 18 QB 425; 118 ER 160 .… 9.33 Lucy v Commonwealth (1923) 33 CLR 229 .… 7.2, 9.9, 9.18, 10.65, 10.98, 11.29, 11.75, 14.35, 14.37, 14.41, 14.60, 14.105, 15.10, 15.15, 15.54, 15.97 Ludlow Corporation v Charlton (1840) 6 M & W 815; 151 ER 642 .… 3.86 Luke v Stoke on Trent City Council [2007] IRLR 305 .… 6.19, 6.20 Lumley v Gye (1853) 2 E & B 216; 118 ER 749 .… 7.84 — v Wagner (1852) 1 De GM & G 604 .… 15.15 Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd (1938) 61 CLR 286 . … 9.36, 10.74, 14.15 Lynch v Buckley Sawmills Pty Ltd (1984) 3 FCR 503 .… 5.88 Lyon v Godley (1990) EOC 92-287 .… 14.85 Lysaght Bros & Co Ltd v Falk (1905) 2 CLR 421 .… 3.78 Lythgoe v Baycorp Advantage Ltd [2004] FCA 1198 .… 6.38, 6.39

M M & M Civil Engineering Pty Ltd v Sunshine Coast Turf Club [1987] 2 Qd R 401 .… 3.69 M & P Steelcraft Ltd v Ellis [2008] ICR 578 .… 3.43, 3.45, 3.46 McAleer v University of Western Australia (2007) 159 IR 96; [2007] FCA 52

.… 8.22, 8.25 — v — (No 3) (2008) 171 FCR 499; 176 IR 404; [2008] FCA 1490 .… 5.20, 5.46, 5.57, 5.94 McAlwane v Boughton Estates Ltd [1973] ICR 470 .… 11.81 McAndrew v Prestwick Circuits Ltd [1988] IRLR 514 .… 14.101, 14.110, 14.113 — v — (1990) St T 654 .… 14.101, 14.110, 14.113 Macari v Celtic Football and Athletic Co Ltd [1999] IRLR 787 .… 8.32, 10.20 Macaulay v Greater Paramount Theatres Ltd (1921) 22 SR (NSW) 66 .… 15.56 Macauslane v Fisher and Paykel Finance Pty Ltd [2003] 1 Qd R 503; [2002] QCA 282 .… 5.94, 11.5, 11.50, 11.57, 11.61, 14.47, 14.51, 14.66 McCabe v Cornwall County Council [2005] 1 AC 503; [2004] 3 All ER 991 . … 14.74 McCamley v Cammell Laird Shipbuilders Ltd [1990] 1 All ER 854 .… 14.123 McCarthy v Windeyer (1925) 26 SR (NSW) 29 .… 6.14, 6.15, 8.48, 8.49, 11.45, 11.50, 11.52 McCasker v Darling Downs Co-operative Bacon Association Ltd (1988) 25 IR 107 .… 7.22, 7.28, 10.58, 10.99, 11.21, 11.55 McClelland v Northern Ireland General Health Services Board [1957] 2 All ER 129 .… 3.12, 11.5, 11.21, 11.22, 11.44, 11.46, 11.49 McClory v Post Office [1993] 1 All ER 457 .… 8.29, 8.31, 8.44, 9.59, 11.23, 11.26, 14.46 McCluskey v Karagiozis (2002) 120 IR 147; [2002] FCA 1137 .… 2.48, 6.37, 6.42 McCormick v Riverwood International (Australia) Pty Ltd (1999) 167 ALR 689; [1999] FCA 1640 .… 4.35, 5.45, 5.58, 5.63 — v — (2000) 177 ALR 193; [2000] FCA 889 .… 4.35, 5.45, 5.58, 5.63

McCreadie v Thomson & MacIntyre (Patternmakers) Ltd [1971] 2 All ER 1135 .… 3.8, 3.12, 3.13, 3.26, 3.27, 5.30, 5.99, 13.8 McCutcheon v David MacBrayne Ltd [1964] 1 WLR 125; 1 All ER 430 .… 5.31 McDermott v Black (1940) 63 CLR 161 .… 6.50 Macdonald v Australian Wool Innovation Ltd [2005] FCA 105 .… 3.49, 3.54, 4.11, 4.32, 4.40, 4.41, 10.10, 14.54, 14.56, 14.58, 14.64 McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457 .… 10.73, 10.74 — v Moller Line (UK) Ltd [1953] 2 Lloyd’s Rep 662 .… 7.16 — v Parnell Laboratories (Aust) Pty Ltd (2007) 168 IR 375; [2007] FCA 1903 .… 5.40, 5.42, 7.17, 7.22, 8.13, 10.19, 10.49, 10.53, 10.54, 14.49, 14.58, 14.59, 14.77, 14.92 — v State of South Australia (2008) 172 IR 256; [2008] SASC 134 .… 8.21, 10.57, 10.59, 14.83, 14.87, 14.112 — v — (2009) 104 SASR 344; 185 IR 45; [2009] SASC 219 .… 5.35, 8.21, 10.57, 10.59, 14.83, 14.87, 14.112 McDougal v Van Allen Company Limited [1909] 19 OTR 351 .… 12.39 McEvoy v Incat Tasmania (2003) 130 FCR 503; 46 ACSR 392; 124 IR 348 . … 13.17, 13.18 MacFarlane v Glasgow CC [2001] IRLR 7 .… 2.17 McFarlane v Daniell (1938) 38 SR (NSW) 337 .… 16.23 McGarry v Boonah Clothing Pty Ltd (1988) 49 IR 66 .… 7.24, 7.28, 10.19, 10.40 McGee, Re (1992) 41 IR 27 .… 3.44 McGrath v Australian Naturalcare Products Pty Ltd (2008) 165 FCR 230; 246 ALR 514 .… 4.40 — v Fairfield Municipal Council (1985) 156 CLR 672; 59 ALR 18 .… 7.24, 7.27 — v Trintech Technologies Ltd [2005] 4 Irish Reports 382 .… 5.55

McGuirk v The University of New South Wales [2009] NSWSC 1424 .… 8.30 McHattan v Australian Specialised Vehicle Systems Pty Ltd (1996) 34 IPR 537 .… 15.41 Machtinger v HOJ Industries Ltd [1992] 1 SCR 986 .… 11.5, 11.50 McIlwain v Ramsey Food Packaging Pty Ltd (2006) 154 IR 111 .… 2.48 — v — (No 4) (2006) 158 IR 181; [2006] FCA 1302 .… 14.34 McIntosh v Australian Postal Corporation (2001) 140 IR 108; [2001] FCA 1012 .… 15.7, 15.38 McIntyre v Tully (1999) 90 IR 9; [1999] QSC 121 .… 14.34, 14.85 Mack Trucks (Britain) Ltd, Re [1967] 1 WLR 780; [1967] 1 All ER 977 .… 6.39, 13.17 McKaskell v Benseman [1989] 3 NZLR 75 .… 15.115 Mackay v Dick (1881) 6 AC 251 .… 8.33 McKay v Abbey Vale Estate Pty Ltd [2003] WASC 2 .… 3.27, 6.24, 6.38, 11.61, 14.115 — v National Australia Bank Ltd (No 2) [1998] 4 VR 677 .… 4.5 McKellar v Container Terminal Management Services Ltd (1999) 165 ALR 409; [1999] FCA 1101 .… 4.33 McKenna v Richey [1950] VR 360 .… 10.97, 15.65 Mackenzie v Coulson (1869) LR 8 Eq 368 .… 4.20 — v The Union and Fire Marine Insurance Company of New Zealand (1880) 1 NSWLR 103 .… 11.19 McKernan v Fraser (1932) 46 CLR 343 .… 3.12 Mackie v Wienholt (1880) 5 QSCR 211 .… 5.72, 6.14, 6.15, 6.16, 8.37 McKinney v Gannett Co 660 F Supp 984 (1981) .… 6.15 Macksville & District Hospital v Mayze (1987) 10 NSWLR 708 .… 10.2, 14.41

McLachlan Consultants Pty Ltd v Boswell (1988) 30 IR 417 .… 15.28 McLaughlin v Darcy (1918) 18 SR (NSW) 585 .… 3.65 — v Governor of the Cayman Islands [2007] 1 WLR 2839 .… 15.112 — v Union-Leader Corp 99 NH 492; 116 A 2d 489 (1955) .… 6.15 McLean v Tedman (1984) 155 CLR 306; 56 ALR 359 .… 8.60, 8.65, 8.67, 8.70, 8.71 McLean’s Roylen Cruises Pty Ltd v McEwan (1984) 155 CLR 694; 54 ALR 3 .… 8.60, 8.67, 8.71 MacLellan v HB Contracting Limited (1990) 32 CCEL 103 .… 12.46 McLennan v Surveillance Australia Pty Ltd (2005) 142 FCR 105; 139 IR 209; [2005] FCAFC 46 .… 4.23, 5.20, 5.81, 5.86 MacLeod v Springvale City Soccer Club (1996) 72 IR 120 .… 14.109 McLory v Post Office [1992] ICR 758 .… 8.23 McLoughlin v The Great Southern Railways Company [1944] Irish Reports 479 .… 11.22 Maclure, Ex p (1870) LR 5 Ch 737 .… 8.45 McMahon v Gould (1982) 7 ACLR 202 .… 7.23 — v Labour Council of NSW (1985) 10 IR 217 .… 15.50 McMahon Services Pty Ltd v Cox (2001) 78 SASR 540 .… 2.2 McManus v Scott-Charlton (1996) 70 FCR 16; 140 ALR 625 .… 7.6, 7.10, 7.12, 7.14, 7.15, 7.138, 7.140, 7.141 McMillan v Guest [1942] 2 AC 561 .… 2.35 McNamara v Flavel (1988) 13 ACLR 619 .… 7.115 McNiece Bros Pty Ltd v National Employers Mutual General Insurance Association Ltd (1985) 3 ANZ Ins Cas 60-631 .… 2.51 McPherson v London Borough of Lambeth [1988] IRLR 470 .… 15.19, 15.54, 15.56 Macquarie Area Health Service v Egan [2002] NSWCA 26 .… 8.74

Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service [2010] NSWCA 268 .… 8.30, 8.31 Macqueen v Frackleton (1909) 8 CLR 673 .… 15.16 McRae v Commonwealth Disposals Commission (1951) 84 CLR 377 .… 4.16, 4.17 — v Coulton (1986) 7 NSWLR 644 .… 3.72 McVicar v Commissioner for Railways (NSW) (1951) 83 CLR 521 .… 5.92, 11.29, 11.30, 11.34, 14.36, 15.112 Madden v Kevereski [1983] 1 NSWLR 305 .… 15.118, 15.119 Magee v Channel Seventynine Ltd (1976) 15 OR (2d) 185 .… 3.54, 8.40 Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181; 185 ALR 152 .… 5.10, 5.11, 7.113, 7.119, 7.127, 7.135, 15.28, 15.33, 16.2, 16.3, 16.40 Magill v Magill (2006) 226 CLR 551; 231 ALR 277 .… 3.4 Magro v Fremantle Football Club Limited (2005) 142 IR 445; [2005] WASC 163 .… 14.63, 14.114 — v — (2007) 34 WAR 256; [2007] WASCA 124 .… 14.63, 14.114 Maguire v Makaronis (1996) 188 CLR 449; 144 ALR 729 .… 7.34, 7.69, 7.70, 7.74, 15.116 — v Simpson (1977) 139 CLR 362; 18 ALR 469 .… 3.68 Maher v Honeysett and Maher Electrical Contractors Pty Ltd [2007] NSWSC 12 .… 4.11 Mahesan v Malaysia Government Officers’ Co-operative Housing Society Limited [1978] 2 All ER 405 .… 7.95, 7.99 — v — [1979] AC 374 .… 7.95, 7.99 Mahony v Industrial Registrar of New South Wales (1986) 8 NSWLR 1; 18 IR 249 .… 2.6 — v J Kruschich (Demolitions) Pty Ltd (1985) 156 CLR 522; 59 ALR 722 . … 14.10, 14.18

Maier v E & B Exploration Ltd [1986] 4 WWR 275 .… 6.26, 6.33 Mainland Holdings Limited v Szady [2002] NSWSC 699 .… 7.94, 7.99, 15.120, 15.136 Mair v Southern Minnesota Broading Company, 226 Minn 137; 32 NW 2d 177 (1948) .… 6.15 Majeau Carrying Co Pty Ltd v Coastal Rutile Ltd (1973) 129 CLR 48; 1 ALR 1 .… 5.68, 5.69 Majik Markets Pty Ltd v S & M Motor Repairs Pty Ltd (No 1) (1987) 10 NSWLR 49 .… 10.95 Malec v JC Hutton Pty Ltd (1990) 169 CLR 638; 92 ALR 545 .… 14.54 Malik v Bank of Credit and Commerce International SA [1998] AC 20; [1997] 3 All ER 1 .… 5.48, 5.49, 7.137, 8.13, 8.14, 8.15, 8.17, 8.18, 8.20, 8.21, 8.22, 8.25, 8.27, 8.33, 10.21, 10.52, 10.60, 10.87, 14.20, 14.21, 14.69, 14.71, 14.72, 14.83, 14.87, 14.88, 14.91 Mallinson v Scottish Australian Investment Co Ltd (1920) 28 CLR 66 .… 5.25, 5.94, 9.15 Malloch v Aberdeen Corporation [1971] 2 All ER 1278 .… 11.23, 11.25, 11.30, 11.34, 15.108, 15.112 — v McCorquodale (1991) SLT (Sh Ct) 39 .… 3.45 Mallone v BPB Industries [2002] EWCA Civ 126 .… 8.29, 8.32, 14.52 Mallyons Limited v South Australian Harbours Board [1933] SASR 166 .… 9.54 Malone v British Airways Plc [2010] IRLR 431 .… 11.15 — v Metropolitan Police Commissioner (No 2) [1979] Ch 344; 2 All ER 620 .… 15.70 Manchester Diocesan Council for Education v Commercial & General Investments Ltd [1970] 1 WLR 241; [1969] 3 All ER 1593 .… 3.19 Manifest Shipping & Co Ltd v Uni-Polaris Insurance Co Ltd [1997] 1 Lloyd’s Rep 360 .… 7.18 Manildra Laboratories Pty Ltd v Campbell [2009] NSWSC 987 .… 7.7, 7.30,

7.35, 7.44, 7.49, 7.62, 7.63, 7.66, 7.83, 7.84, 7.88, 7.90, 7.93, 7.115, 15.72, 15.73 Mann v Capital Territory Health Commission (1981) 54 FLR 23 .… 5.47, 5.52, 5.63, 5.64, 8.39, 8.53, 8.55 — v — (1982) 148 CLR 97; 42 ALR 46 .… 5.52, 5.63, 5.64, 8.39, 8.53, 8.55, 10.71, 14.26, 14.28 Mannai Investments Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749; [1997] 3 All ER 352 .… 11.7 Manners v Denny Bros (1911) 14 WALR 91 .… 11.45 Manser v Spry (1994) 181 CLR 428; 124 ALR 539 .… 14.119, 14.121, 14.124 Manubens v Leon [1918] 1 KB 208 .… 7.42, 7.96, 8.44, 14.46, 14.47 Manuel v Pasminco Cockle Creek Smelter Pty Ltd (1998) 83 IR 135 .… 5.74, 5.103, 11.19 Marbe v George Edwardes (Daly’s Theatre) Ltd [1927] 1 KB 269 .… 8.37, 8.38, 8.39, 8.40, 8.41, 8.48, 8.53, 8.55, 14.91 March v E & MH Stramare Pty Limited (1991) 171 CLR 506; 99 ALR 423 . … 14.17 Marchon Products Ltd v Thornes (1954) 71 RPC 445 .… 16.12 Marco Productions Limited v Pagola [1945] 1 KB 111 .… 15.42 Marcus Clarke (Vic) Ltd v Brown (1928) 40 CLR 540 .… 5.47, 5.58 Marion White Ltd v Francis [1972] 3 All ER 857 .… 15.102, 16.31 Maritime National Fish Limited v Ocean Trawlers Limited [1935] AC 524 . … 12.37 Maritime Union of Australia (MUA) v Burnie Port Corp Pty Ltd (2000) 101 IR 435; [2000] FCA 1189 .… 4.5 — v Geraldton Port Authority (1999) 93 FCR 34; 165 ALR 67; 94 IR 244 .… 4.4–4.6, 4.8 — v Patrick Stevedores Operations No 1 Pty Ltd (1998) 77 FCR 456; 153 ALR 602 .… 15.26, 15.46, 15.54, 15.59, 15.75, 15.86, 15.87

Marks v CCH Australia Ltd [1999] 3 VR 513 .… 3.62, 10.56, 10.92, 15.64 — v Commonwealth (1964) 111 CLR 549 .… 5.91, 11.3, 11.4, 11.21, 11.30 — v GIO Australia Holdings (1998) 196 CLR 494; 158 ALR 333 .… 14.11, 14.32, 14.33, 14.34 Markwell Brothers Pty Limited v CPN Diesels (Qld) Pty Limited [1983] 2 Qd R 508 .… 15.115 Marley v Forward Trust Group Ltd [1986] ICR 891 .… 5.36, 5.97, 11.16 Marrapodi v Smith-Roberts (1970) 44 ALJ 4 .… 7.27 Marriott v Oxford and District Co-operative Society Ltd (No 2) [1970] 1 QB 186 .… 6.15, 6.17, 6.24, 6.38, 6.39, 6.48, 10.29, 10.90 Marrison v Bell [1939] 1 All ER 745 .… 12.15 Marsden v Fairey Stainless Limited [1979] IRLR 103 .… 3.13 Marsh v Macquarie University (2005) 147 IR 401 .… 5.18 — v National Autistic Society [1993] ICR 453 .… 15.43 Marsh & McLennan Pty Ltd v Stanyers Transports Pty Ltd [1994] 2 VR 232 . … 3.84 Marshall v Colonial Bank of Australasia (1904) 1 CLR 633 .… 8.33, 14.37 — v English Electric Co Ltd [1945] 1 All ER 653 .… 5.73, 9.59, 11.43, 11.47, 15.100, 15.102 — v Glanvill [1917] 2 KB 87 .… 10.75, 12.5, 12.21, 12.22, 12.23, 12.50 — v Harland and Wolff Limited [1972] 2 All ER 715; IRLR 90 .… 11.47, 12.17, 12.19, 12.31, 12.34, 12.45, 12.47, 12.48 — v NM Financial Management Ltd [1997] ICR 1065 .… 3.37, 16.20, 16.23 — v Whittaker’s Building Supply Co (1963) 109 CLR 210 .… 2.5, 2.6, 2.10 Martech International Pty Ltd v Energy World Corporation Limited (2007) 248 ALR 353; [2007] FCAFC 35 .… 6.14, 6.15, 8.24, 8.27, 10.37, 10.67, 10.68, 11.80 Martin v Eccles Corporation [1919] 1 Ch 387 .… 15.35, 15.111

— v Stout [1925] AC 359 .… 10.68, 10.73, 10.89, 10.97, 11.69 — v Tasmania Development and Resources (1999) 163 ALR 79; 89 IR 98; [1999] FCA 593 .… 4.35, 11.16, 11.75, 11.77, 11.78, 11.79, 14.30, 14.58, 14.61, 14.64, 15.49 — v — (2000) 97 IR 66; [2000] FCA 414 .… 4.35, 11.16, 11.75, 11.77, 11.78, 11.79, 15.49 — v Yeoman Aggregates Ltd [1983] ICR 314 .… 11.12 Martin Baker Aircraft Co Limited v Canadian Flight Equipment Limited [1955] 2 All ER 722; [1955] 2 QB 556 .… 11.52 Mason v New South Wales (1959) 102 CLR 108 .… 4.4–4.6 — v Provident Clothing and Supply Co Ltd [1913] AC 724 .… 16.10, 16.16, 16.23, 16.33, 16.35, 16.39 Mason & Cox Pty Ltd v McCann (1999) 74 SASR 438; [1999] SASC 544 .… 2.2, 2.49, 2.50, 2.51 Mason Gray Strange NSW Ltd v Eisdell (SC(NSW), Powell J, 22 February 1989, unreported) .… 11.72 Master Education Services Pty Ltd v Ketchell (2008) 236 CLR 101; 249 ALR 44 .… 4.27 Masterman-Lister v Jewell [2003] 3 All ER 162; 1 WLR 1511 .… 3.66 Masters v Cameron (1954) 91 CLR 354 .… 3.53, 3.54 Matar v Neutral Bay Foodhall (1996) 73 IR 112 .… 3.85 Matthews v Coles Myer Limited (1993) 47 IR 229 .… 11.52, 11.57, 11.58, 11.59 — v Cool Or Cosy Pty Ltd (2004) 136 IR 156; [2004] WASCA 114 .… 10.74 — v Kuwait Bechtel Corporation [1959] 2 QB 57 .… 8.57 Matthews Bros Ltd, Re [1962] VR 262 .… 13.15, 13.21 Max Cooper & Sons Pty Ltd v Sydney City Council (1980) 29 ALR 77 .… 5.3, 5.9

Maxwell v Walter Howard Designs Limited [1975] IRLR 77 .… 3.13, 12.46 Maybury v Atlantic Union Oil Co Ltd (1953) 89 CLR 507 .… 5.19 Mayers-Browne v Federated Liquor and Allied Industries Employees Union of Australia (SA Branch) (1989) 27 IR 290 .… 11.19 M’Dowall v Ulster Bank (1899) 33 IR LT Jo 223 .… 7.54 Mears v Safecar Security Ltd [1983] QB 54; [1982] 2 All ER 865 .… 5.24, 5.48, 5.50, 5.59, 12.16 Measures Brothers Ltd v Measures [1910] 2 Ch 248; [1908–1910] All ER 1188 .… 7.122, 10.3, 10.76, 15.52, 15.134, 16.18, 16.48, 16.49 — v — [1910] 1 Ch 336 .… 7.122, 15.134, 16.48, 16.49 Mediana, The [1900] AC 113 .… 14.14, 14.15 Medlin v State Government Insurance Commission (1995) 182 CLR 1; 127 ALR 180 .… 14.17, 14.18 Meehan v Jones (1982) 149 CLR 571; 42 ALR 463 .… 3.51 Meek v Port of London Authority [1918] 2 Ch 96 .… 6.38, 6.39 — v — [1918] 1 Ch 415 .… 5.73, 5.102 Mehmet v Benson (1965) 113 CLR 295 .… 15.52, 15.54 Meikle v Nottinghamshire County Council [2004] EWCA Civ 859; [2004] 4 All ER 97 .… 8.20, 8.21, 8.24 Melbourne University Student Union Inc (in liq) v Sherriff [2004] VSC 266 . … 13.18 Mellor v William Beardmore & Co (1927) 44 RPC 175 .… 7.104, 7.105 Mellowes Archital Ltd v Bell Products Ltd (1997) 58 Construction Law Reports 22 .… 9.50 Mellstrom v Gardner [1970] 2 All ER 9 .… 15.102 Melrose Farm Pty Ltd v Milward (2008) 175 IR 455; [2008] WASCA 175 . … 3.32 Melville v De Wolf (1855) 4 E & B 844 .… 12.5

Menner v Falconer, Commissioner of Police (1997) 74 IR 472 .… 9.60 Mense v Milenkovic [1973] VR 784 .… 7.114, 7.125, 7.126, 7.135 Mergenthaler Linotype Company v Intertype Ltd (1926) 43 RPC 381 .… 15.134 Meriton Apartments Pty Ltd v McLaurin & Tait (Developments) Pty Ltd (1976) 133 CLR 671; 10 ALR 296 .… 12.9 Merrill Lynch International (Australia) Ltd v Commissioner of Taxation (2001) 113 FCR 79 .… 14.66 Merryweather v Moore [1892] 2 Ch 518 .… 7.11, 7.32, 7.44, 7.83, 7.122, 7.123, 16.48, 16.49 Mersey Docks and Harbour Board v Coggins & Griffith (Liverpool) Ltd [1947] AC 1 .… 2.49, 6.42 Mertens v Home Freeholds Co [1921] 2 KB 526 .… 12.37 Messervy v Maldoc Pty Limited (1995) 63 IR 61 .… 14.16 Metal Industries Award, Re (2000) 110 IR 247 .… 11.47 Metcash Ltd v Jardim (2010) 273 ALR 407; [2010] NSWSC 1096 .… 10.83, 16.12, 16.19, 16.29, 16.30, 16.32, 16.33, 16.34, 16.39, 16.40 Methwold v Walbank (1750) 2 Ves Sen 238; 28 ER 153 .… 6.43 Metrans Pty Ltd v Courtney-Smith (1983) 8 IR 379 .… 16.25, 16.44, 16.48, 16.49 Metropolitan Health Service Board v Australian Nursing Federation (2000) 99 FCR 95; 176 ALR 46; 98 IR 390 .… 5.85 Metropolitan Water Board v Dick, Kerr and Company Limited [1918] AC 119 .… 12.31 Metzner v Bolton (1854) 9 Exch 518; 156 ER 222 .… 5.71, 5.75, 11.43 Meymott v Piddington (1876) 1 Knox 306 .… 9.14 Mezey v South West London and St George’s Mental Health NHS Trust [2007] IRLR 244; [2007] EWCA Civ 106 .… 8.41, 9.59, 11.15, 15.24 Micklefield v SAC Technology Ltd [1990] 1 WLR 1002; IRLR 218 .…

10.60, 10.76, 14.47 Midland County District Bank v Attwood [1905] 1 Ch 357 .… 13.15 Mid-Skin Cancer and Laser Centre Pty Ltd v Zahedi-Anarak (2006) 67 NSWLR 569; [2006] NSWSC 844 .… 5.46, 7.45, 7.58, 7.127, 7.129 Miles v Genesys Wealth Advisers Ltd (2009) 201 IR 1; [2009] NSWCA 25 . … 16.12, 16.32, 16.33, 16.34, 16.39, 16.40 — v Wakefield Metropolitan District Council [1985] ICR 363 .… 9.14 — v — [1987] AC 539; [1987] 1 All ER 1089 .… 7.3, 9.11, 9.19, 9.21, 9.28, 9.29, 9.41, 9.43, 9.44, 9.46, 9.50, 9.52, 12.15 Miletic v Capital Territory Health Commission (1995) 130 ALR 591 .… 8.65, 8.67, 8.71 Miliangos v Frank (Textiles) Limited [1975] 3 All ER 801 .… 14.25 — v — [1976] AC 443 .… 14.25 Millar v Bornholt (2009) 177 CLR 67; 257 ALR 263 .… 11.30 Millbrook Furnishing Industries Ltd v McIntosh [1981] IRLR 309 .… 6.20 Miller v BP Kwinana Ltd [2002] WASCA 201 .… 8.72 — v Hamworthy Engineering Ltd [1986] ICR 846 .… 6.6, 6.17 — v Karlinski (1945) 62 TLR 85 .… 4.24, 16.20 — v Miller (2011) 242 CLR 446; 275 ALR 611 .… 4.23 — v University of New South Wales (2001) 110 IR 1 .… 6.16, 10.31 Millican v Sullivan (1888) 4 TLR 203 .… 4.25, 15.2, 15.17, 15.36, 15.55 Mills v Blackall (1847) 11 QBD 359; 116 ER 511 .… 9.28, 9.38 — v Dunham [1891] 1 Ch 576 .… 16.10 — v Mills (1938) 60 CLR 150 .… 7.75 Milne v Municipal Council of Sydney (1912) 14 CLR 54 .… 5.52, 8.39, 8.42 Minato v Palmer Corporation Ltd (1995) 63 IR 357 .… 11.12 Mineral Water Bottle Exchange & Trade Protection Society v Booth (1887) 36 Ch D 465 .… 16.5

Minister for Employment and Workplace Relations v Gribbles Radiology Pty Ltd (2005) 222CLR 194; 214 ALR 24; 138 IR 252 .… 6.45 Minister for Health v Ferry (1996) 65 IR 374 .… 11.19 Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 611; 266 ALR 367 .… 11.32 Minister for Immigration and Ethnic Affairs v Teo (1995) 57 FCR 194 .… 11.32 Minister for Immigration and Multicultural Affairs, Re; Ex p Applicant S20/2002 (2003) 198 ALR 59 .… 11.32 Minister for Immigration, Local Government and Ethnic Affairs v Kurtovic (1990) 92 ALR 93 .… 3.78 Minister for Youth and Community Services v Health and Research Employees’ Association of Australia, NSW Branch (1987) 10 NSWLR 543 .… 2.48, 3.68, 3.70, 3.84 Minister of Agriculture and Fisheries v Matthews [1950] 1 KB 148; [1949] 2 All ER 724 .… 5.93 Ministry of Defence v Fletcher [2010] IRLR 25 .… 14.85 Miriams, Re [1891] 1 QB 594 .… 6.43 Minlabs Pty Ltd v Assaycorp Pty Ltd (2001) 37 ACSR 509 .… 7.51 Mirror Newspaper Co v Crozier (1911) 13 WALR 70 .… 11.45 Missing Link Software v Magee [1989] 1 FSR 361 .… 7.85, 7.110 Moama Bowling Club Limited v Armstrong (1995) 64 IR 238 .… 5.40 Modern Engineering (Bristol) Ltd v Gilbert-Ash (Northern) Ltd [1974] AC 689; [1973] 3 All ER 195 .… 9.50 Moir v J P Porter Co Ltd (1979) 33 NSR (2d) 674 .… 3.45 Mondel v Steel & Co Ltd (1841) 8 M & W 858; 151 ER 1288 .… 9.50 Montemayor v Jacor Communications Inc, 64 P 3d 916 (2003) .… 6.15, 8.51 Mooney v Williams (1905) 3 CLR 1 .… 3.19

Moore v Collins [1937] SASR 195 .… 6.42, 6.44 — v Zurich Insurance Co (1984) 4 CCEL 188 .… 11.52 Moores v Bude-Stratton Town Council [2000] IRLR 676 .… 7.141, 8.25, 10.54 Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) (1984) 156 CLR 414; 56 ALR 193 .… 5.57, 7.57, 7.66, 7.111, 7.112, 7.117 Moors v Burke (1919) 26 CLR 265 .… 2.40 Mordecai v Mordecai (1988) 12 NSWLR 58 .… 7.82, 7.91 Moreton Bay College v Teys [2008] QCA 422 .… 7.5, 7.17, 7.23, 7.87, 7.139, 7.141 Morgan v Fry [1968] 2 QB 710 .… 7.3, 9.59 — v Kittochside (2002) 117 IR 152 .… 2.52 — v Manser [1948] 1 KB 184 .… 12.22, 12.47 — v S & S Constructions Pty Ltd [1967] VR 149 .… 9.45 Morgans v Alpha Plus Security Ltd [2005] 4 All ER 655 .… 14.123 Moriarty v Regent’s Garage and Engineering Limited [1921] 2 KB 766 .… 9.28, 9.31, 9.32, 9.34, 9.49 — v — [1921] 1 KB 423 .… 9.32, 9.34, 9.49 Morley v ASIC (2010) 274 ALR 205 .… 2.35 — v CT Morley Ltd [1985] ICR 499 .… 2.34 — v Heritage Plc [1993] IRLR 400 .… 5.62, 14.66 Morris v CH Bailey Ltd [1969] 2 Lloyd’s Rep 215 .… 5.43, 6.2, 6.21, 6.46, 11.7, 11.8, 11.11, 14.114 — v CW Martin & Sons Ltd [1966] 1 QB 716 .… 8.64 — v Ford Motor Co Ltd [1973] QB 792; 2 All ER 1084 .… 7.27 — v Hanley [2003] NSWSC 42 .… 8.16, 8.30 — v Ogden (1869) LR 4 CP 687 .… 9.14, 9.60 — v Warman International Ltd (1996) 70 IR 329 .… 11.51

— v West Hartlepool Steam Navigation Co Ltd [1956] AC 552 .… 8.68 Morrison v Abernathy School Board (1876) 3 SC 945 .… 11.52 — v Town of Victoria Park [2007] WASCA 164 .… 14.112 Morrow v Safeway Stores Plc [2002] IRLR 9 .… 8.25, 8.27 Mortimer v Beckett [1920] 1 Ch 571 .… 3.31, 3.33 Morton v Transport Appeal Board (2007) 168 IR 403; [2007] NSWSC 1454 . … 8.13, 8.21, 8.25, 8.26, 8.27, 11.24 Morton Sundour Fabrics Limited v Shaw (1967) 2 ITR 84 .… 11.7 Moschi v Lep Air Services Ltd [1973] AC 331; [1972] 2 All ER 393 .… 10.76 Moshirian v University of New South Wales [2002] FCA 179 .… 9.59 Moss v Lowe Hunt and Partners Pty Ltd [2010] FCA 1181 .… 4.32, 4.33, 4.36–4.39, 14.33, 14.34, 14.63, 14.115 Moult v Halliday [1898] 1 QB 125 .… 5.68, 5.70, 5.75, 11.43, 11.60, 16.52 Mount Isa Mines Ltd v Pusey (1970) 125 CLR 383 .… 8.66 Mountford v London County Council [1935] 2 KB 243 .… 6.13, 11.9 Moxham v Henderson [1981] 2 NSWLR 282 .… 5.95 Mulcahy v Hoyne (1925) 36 CLR 41 .… 6.5 — v Hydro-Electric Commission (1998) 85 FCR 170 .… 4.10–4.12, 4.35, 8.30 Multigroup Distribution Services Pty Ltd v TNT Australia Pty Ltd (2001) 109 FCR 528; 191 ALR 402; [2001] FCA 226 .… 14.33 — v — (2001) 114 FCR 108; [2001] FCA 1620 .… 14.33 Multiplex Constructions Pty Limited v Abgarus Pty Limited (1992) 33 NSWLR 504 .… 14.133 Multiplex Constructions (UK) Ltd v Cleveland Bridge UK Ltd (2006) 107 Construction LR 1 .… 9.50 Multivision Films Inc v McConnell Advertising Co (1983) 69 CPR (2d) 1 .…

14.91 Murell v South Eastern Sydney Area Health Service (2006) 153 IR 60; [2006] NSWSC 313 .… 15.20 Murphy v Lush (1986) 65 ALR 651 .… 15.78 — v Overton Investments Pty Ltd (2004) 216 CLR 388; 204 ALR 26 .… 14.24, 14.25, 14.32, 14.114 Murray Irrigation Ltd v Balsdon (2006) 67 NSWLR 73; 159 IR 52; [2006] NSWCA 253 .… 7.22, 7.23, 14.58, 14.60 Musgrave v The Commonwealth (1937) 57 CLR 514 .… 2.35 Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723 .… 6.34, 6.49 MYT Engineering Pty Ltd v Mulcon Pty Ltd (1999) 195 CLR 636; 162 ALR 441 .… 3.86, 3.87

N Nagy v Masters Dairy Ltd (1996) 150 ALR 273; [1996] FCA 1096 .… 4.37 Napier v National Business Agency Ltd [1951] 2 All ER 264 .… 4.24, 16.20 Narich Pty Ltd v Commissioner of Pay-Roll Tax [1983] 2 NSWLR 597 .… 2.1, 2.13–2.16, 2.24, 2.27, 2.28, 2.30, 2.32, 5.23 Narni Pty Ltd v National Australia Bank Ltd [2001] VSCA 31 .… 5.58 Natal Land and Colonisation Co v Pauline Colliery & Development Syndicate [1904] AC 120 .… 3.81 National Australia Bank Ltd v Budget Stationery Supplies Pty Ltd (1997) 217 ALR 365 .… 4.20, 4.21 National Coal Board v Galley [1958] 1 WLR 16; [1958] 1 All ER 91 .… 3.59, 5.36, 6.7, 6.13, 10.71, 11.10, 14.26, 14.27, 14.28 — v National Union of Mineworkers [1986] ICR 736 .… 5.43, 5.44, 5.108 National Education Advancement Programs (NEAP) Pty Ltd v Ashton (1995) 128 FLR 334 .… 15.69 National Gallery of Australia v Douglas [1999] ACTSC 79 .… 5.19, 5.27

National Insurance Co of New Zealand Ltd v Espagne (1961) 105 CLR 569 . … 5.90, 14.119, 14.121, 14.123 National Mutual Property Services (Australia) Pty Ltd v Citibank Savings Ltd [1998] FCA 564 .… 7.69 National Roads and Motorists’ Association Ltd (NRMA) v Geeson (2001) 39 ACSR 401; [2001] NSWSC 832 .… 7.66, 7.130 — v Whitlam (2007) 25 ACLC 688; [2007] NSWCA 81 .… 8.34, 8.35 National Surgical Pty Ltd v McPhee (2010) 87 IPR 602; [2010] FCA 972 .… 15.90 National Tertiary Education Industry Union (NTEIU) v Commonwealth of Australia (2002) 117 FCR 114; 114 IR 20; [2002] FCA 441 .… 4.5, 4.8, 4.13 — v University of Wollongong [2002] FCA 31 .… 4.29 National Workforce Pty Ltd v Australian Manufacturing Workers’ Union [1998] 3 VR 265 .… 15.50 Nationwide News Pty Ltd v Naidu (2007) 71 NSWLR 471; [2007] NSWCA 377 .… 8.57 Natural Extracts Pty Ltd v Stotter (1997) 24 ACSR 110 .… 7.65, 7.91, 7.92, 15.131, 15.136 NC Capital Ltd, Re (1992) 32 ACSR 418; [1999] NSWSC 625 .… 13.16 NE Perry Pty Ltd v Judge (2002) 84 SASR 86; [2002] SASC 312 .… 16.32 Neader v Lake Marimley Pastoral Company (1992) 43 IR 105 .… 2.41 Neale v Atlas Products (Vic) Pty Ltd (1955) 94 CLR 419 .… 2.17, 2.24, 5.31 Neary v Dean of Westminster [1999] IRLR 288 .… 7.20, 7.43, 7.71, 7.94, 7.100, 10.39 Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449 .… 10.42 Neeta (Epping) Pty Ltd v Phillips (1974) 131 CLR 286; 3 ALR 151 .… 9.55, 15.98 Neil v Strathclyde Regional Council [1984] IRLR 14 .… 14.132

Neill v NSW Fresh Food and Ice Pty Ltd (1963) 108 CLR 362; [1963] ALR 258 .… 8.67 Nelson v BBC [1977] ICR 649 .… 5.65 — v BHP Coal Pty Ltd [2000] QCA 505 .… 7.26, 9.38, 9.50 — v Concrete Constructions (NSW) Pty Ltd (1989) 86 ALR 88 .… 4.35 — v Dahl (1879) 12 Ch D 568 .… 5.68, 5.70 — v Nelson (1995) 184 CLR 538; 132 ALR 133 .… 4.22, 4.23, 4.26, 4.28, 4.31 — v Nelson (James) & Sons Ltd [1914] 2 KB 770 .… 2.37, 2.38 — v Rye [1996] 2 All ER 186 .… 15.133 Nema, The [1982] AC 724; [1981] 2 All ER 1030 .… 12.9 Netage Pty Ltd v Cantley (1985) 6 IPR 200 .… 3.75, 3.82 Nethermere (St Neots) Ltd v Taverna and Gardiner [1984] ICR 612 .… 3.33, 5.31, 8.42, 8.43, 8.46 Network Ten Ltd v Fulwood (1995) 62 IR 43 .… 15.62, 15.64, 15.75, 15.85 — v Rowe (2005) 149 IR 262; [2005] NSWSC 1356 .… 5.20, 5.60 — v — (2006) 149 IR 280; [2006] NSWCA 1 .… 5.20, 5.60 Neufeld v Secretary of State for Business, Enterprise & Regulatory Reform [2009] 3 All ER 790 .… 2.15, 2.31, 2.32, 2.34 New British Iron Co, Re; Beckwith, Ex p [1898] 1 Ch 324 .… 2.37 New South Wales v Bardolph (1934) 52 CLR 455 .… 3.68 — v Davies (1998) 43 NSWLR 182 .… 14.121, 14.123 — v Fahy (2007) 232 CLR 486; 236 ALR 406 .… 8.60, 8.65, 8.67 New South Wales Cancer Council v Sarfaty (1992) 28 NSWLR 68 .… 2.37, 5.13, 5.15, 5.24, 11.5, 11.21, 11.22, 11.49, 14.30, 14.47, 14.48, 14.58 New Southern Railway Ltd v Quinn [2006] ICR 761 .… 14.28 New Testament Church of God v Stewart [2008] ICR 282 .… 3.42 New Zealand Netherlands Society Oranje Inc v Kuys [1973] 1 WLR 1126; 2

All ER 1222 .… 7.6, 7.7, 7.35, 7.37, 7.70 New Zealand Shipping Co Limited v AM Satterthwaite and Co Limited [1975] AC 154; [1974] 1 All ER 1015 .… 6.32, 6.35 Newbon v City Mutual Life Assurance Society Ltd (1935) 52 CLR 723 .… 10.70, 10.73, 10.79 Newland v Simons & Willer (Hairdressers) Ltd [1981] ICR 521 .… 4.24, 4.31 Newman v Alarmco Ltd [1976] IRLR 45 .… 7.139, 7.141 — v Gatti (1907) 24 TLR 18 .… 8.40 Newman Ltd, Re; Raphael’s Claim [1916] 2 Ch 309 .… 8.45 News Limited v Australian Rugby Football League Ltd (1996) 64 FCR 410; 139 ALR 193 .… 7.6, 7.36 Newspaper Pty Syndicate Ltd, Re [1900] 2 Ch 349 .… 2.34 Newton v Goodman Fielder Mill Ltd (1997) 81 IR 227 .… 13.7, 14.127 Ngurli Ltd v McCann (1953) 90 CLR 425 .… 7.75 Nguyen v ANT Contract Packers Pty Ltd (2003) 128 IR 241 .… 2.52 Niblett v Midland Railway Company (1907) 96 LT 462 .… 12.15 Nicholson v Heaven & Earth Gallery (1994) 57 IR 50 .… 15.26 Nicol v Allyacht Spars Pty Ltd (1987) 163 CLR 611; 75 ALR 1 .… 8.60, 8.61, 8.70 Nicoll v Cutts [1985] BCLC 322 .… 13.17 — v Graves (1864) 17 CB (NS) 26; 144 ER 11 .… 5.75, 11.43 Nicrotherm Electrical Co Ltd v Percy [1956] RPC 272 .… 7.128 — v — [1957] RPC 207 .… 7.113, 7.128 Nikolich v Goldman Sachs JB Were Services Pty Ltd [2006] FCA 784 .… 6.21, 8.7, 12.17, 14.79, 14.81 — v — (2007) 163 FCR 62; [2007] FCAFC 120 .… 6.21, 8.7, 12.17, 14.79, 14.81

Noahs Ltd v Glover (NSWCA, Mahoney, Clarke and Meagher JJA, No 40590/94, 20 September 1995, unreported) .… 3.27 Noble v Maddison (1912) 12 SR (NSW) 435 .… 4.24 Nogare v Mosaic Flooring Co Ltd [1965] SASR 120 .… 8.63 Nokes v Doncaster Amalgamated Collieries Ltd [1940] 3 All ER 549; [1940] AC 1014 .… 1.37, 6.40, 6.42, 6.45, 9.54, 13.15, 13.30 Nonferral (NSW) Pty Ltd v Taufia (1998) 43 NSWLR 312 .… 4.23, 4.28 Noonan v Victorian Railways Commissioners (1907) 4 CLR 1668 .… 7.24, 9.44, 10.21, 10.26, 10.29, 10.32, 10.33, 10.40 Noranda Australia Ltd v Lachlan Resources NL (1988) 14 NSWLR 1 .… 7.37 Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd [1894] AC 535 .… 16.2, 16.6, 16.8, 16.12, 16.14 Nordman v Rayner (1916) 33 TLR 87 .… 12.21, 12.22, 12.23 Norman v Federal Commissioner of Taxation (1963) 109 CLR 9 .… 6.40, 7.112 Normandy v Ind Coope and Co Ltd [1908] 1 Ch 84 .… 2.34 Norris v Southampton City Council [1982] IRLR 141 .… 12.21, 12.41 North v Television Corporation Ltd (1976) 11 ALR 599 .… 1.1, 10.2, 10.5, 10.18, 10.19, 10.25, 10.39, 10.40, 10.41, 10.42, 10.52, 10.53, 10.85 North East Equity Pty Ltd v Proud Nominees Pty Ltd (2010) 269 ALR 262; [2010] FCAFC 60 .… 4.40 North Ocean Shipping Co Ltd v Hyundai Construction Co Ltd [1978] 3 All ER 1170 .… 4.5, 4.7 North Sydney District Rugby League Football Club, Re (2000) 34 ACSR 630; [2000] NSWSC 634 .… 9.26, 9.32, 13.22 Northern Assurance Co Ltd v Coal Mines Insurance Pty Ltd [1970] 2 NSWR 223 .… 8.35 Northern District Radio Taxicab Co-operative Ltd v Commissioner of Stamp Duties [1975] 1 NSWLR 346 .… 2.40

Northern Land Council v Hansen [2000] NTCA 1 .… 5.21, 5.25, 8.39, 11.5, 14.64, 14.99, 14.106, 14.109, 14.114 Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313; 146 ALR 572 . … 8.61, 8.62 Northern Tablelands Insurance Brokers Pty Ltd v Howell (2009) 184 IR 307; [2009] NSWSC 426 .… 16.22 Northey v Trevillion (1901) 18 TLR 648 .… 8.45 Northside Developments Pty Ltd v Registrar-General (1990) 170 CLR 146; 93 ALR 385 .… 3.64, 3.75, 3.76, 3.77, 3.78, 3.82, 3.86, 3.87 Northumberland Insurance Co Ltd, Re [1975] 1 NSWLR 471 .… 13.23 Norton v Angus (1926) 38 CLR 523 .… 15.64 Norton Australia Pty Ltd v Streets Ice Cream Pty Ltd (1968) 120 CLR 635 . … 14.17 Norton Tool Co Ltd v Tewson [1972] ICR 501 .… 14.117 Norwest Holst Group Administration Ltd v Harrison [1985] ICR 668 .… 10.8, 10.66, 10.71, 10.78, 10.89, 10.94, 11.69, 14.26 Notcutt v Universal Equipment Co (London) Limited [1986] IRLR 219 .… 12.3, 12.18, 12.31, 12.34, 12.44, 12.47, 12.53, 12.54 Nottingham University v Fishel [2000] ICR 1462 .… 7.20, 7.21, 7.34, 7.36, 7.37, 7.43, 7.45, 7.57, 7.79, 7.113, 8.16, 15.123, 15.126, 16.43 Nova Plastics v Froggatt [1982] IRLR 146 .… 7.35, 7.49, 7.86 Nowlam v Ablett (1835) 2 CM & R 53; 150 ER 23 .… 5.75 NP Generations Pty Ltd v Feneley (2001) 80 SASR 151; [2001] SASC 185 . … 7.58, 7.75, 7.127, 7.128, 7.129, 7.130, 16.48 NTEIU v University of Wollongong [2002] FCA 31 .… 5.84 NWL Ltd v Woods [1979] ICR .… 15.88

O O Mustad & Son v S Allcock & Co Ltd [1963] 3 All ER 416 .… 7.112,

7.127, 7.135, 15.64 OAMPS Insurance Brokers Limited v Shackcloth [2008] NTSC 29 .… 7.141 O’Brien v Associated Fire Alarms Ltd [1969] 1 All ER 93 .… 5.46, 5.55, 6.19, 6.20 — v Komesaroff (1982) 150 CLR 310; 41 ALR 255 .… 7.124, 7.126 — v McKean (1968) 118 CLR 540 .… 14.31 Oceanic Crest Shipping Co v Pilbara Harbour Services Pty Ltd (1986) 66 ALR 29; 160 CLR 626 .… 2.35, 2.50 Ockerby & Co Limited v Watson (1918) 25 CLR 431 .… 4.17, 12.6, 12.10, 12.28, 12.31 O’Connell v Harkema Express Lines Limited (1982) 141 DLR (3d) 291 .… 12.27, 12.33 O’Connor v Argus and Australasian Ltd [1957] VR 374 .… 6.14, 6.39 — v Commissioner for Government Transport (1959) 100 CLR 225 .… 8.60, 8.65, 8.71 — v SP Bray Ltd (1936) 36 SR (NSW) 248 .… 10.78 — v — (1936) 56 CLR 464 .… 10.78 Octavius Atkinson & Sons Ltd v Morris [1989] ICR 431 .… 10.95 Ocular Sciences Ltd v Aspect Vision Care Ltd [1997] RPC 289 .… 7.128 O’Dea v Allstates Leasing System (WA) Pty Limited (1983) 152 CLR 359; 45 ALR 632 .… 14.133, 14.134 Office Angels Ltd v Rainer-Thomas [1991] IRLR 214 .… 16.30, 16.35 Office Overload Ltd v Gunn [1977] FSR 39 .… 15.88 Ogden v Fossick (1862) 4 De G F & J 426; 45 ER 1249 .… 15.2, 15.66 Ogle v Comboyuro Investments Pty Ltd (1976) 136 CLR 444; 9 ALR 309 .… 10.66, 10.72, 10.73, 10.97, 11.69 O’Grady v M Saper Limited [1940] 3 All ER 527 .… 12.16 O’Halloran v RT Thomas & Family Pty Ltd (1998) 45 NSWLR 262 .…

15.115, 15.116 — v Wood [2004] FCA 544 .… 11.32 Ohio Oil Co v Sharp, 135 F 2d 303 (1943) .… 15.136 Okuk v Fallscheer [1980] 1 PNGLT 274 .… 15.111 O’Laoire v Jackel International Ltd (No 2) [1991] ICR 718 .… 5.6, 14.45, 14.57, 14.77, 14.87 Olivaylle Pty Ltd v Flottweg AG (No 4) (2009) 255 ALR 632; [2009] FCA 522 .… 3.24 Oliver v Cox Couriers Pty Ltd (1996) 64 IR 468 .… 11.64 Olsson v Dyson (1969) 120 CLR 365 .… 6.38 Omilaju v Waltham Forest London Borough Council (No 2) [2005] 1 All ER 75 .… 8.20, 8.21, 8.27, 10.31, 10.36, 10.58, 10.59, 10.85 On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) (2011) 279 ALR 341; 206 IR 252; [2011] FCA 366 .… 2.1, 2.7–2.9, 2.11, 2.12, 2.14, 2.15, 2.17, 2.19, 2.22, 2.32 On the Street Pty Ltd v Cott (1990) 3 ACSR 54 .… 16.25 O’Neil v Armstrong, Mitchell & Co [1895] 2 QB 70 .… 9.26, 12.38, 14.80 O’Neill v Medical Benefits Fund of Australia (2002) 122 FCR 455; [2002] FCAFC 188 .… 4.32, 4.38, 4.40, 14.24, 14.33, 14.34, 14.54, 14.63 Optical Express Ltd v Williams [2008] ICR 1 .… 6.23 Optus Networks Pty Ltd v Telstra Corporation Ltd (2010) 265 ALR 281; [2010] FCAFC 21 .… 7.113, 7.117 O’Reilly v Commissioners of the State Bank of Victoria (1983) 153 CLR 1; 44 ALR 27 .… 3.72 Orica Investments Pty Ltd v William McCartney [2007] NSWSC 645 .… 3.59 Oriental Bank Corporation, Re (McDowall’s case) (1886) 32 Ch D 366 .… 11.3, 11.19, 11.68, 11.70, 13.15, 13.19 Orion Insurance Co Plc v Sphere Drake Insurance Plc [1992] 1 Lloyd’s Rep

239 .… 3.40 Orman v Saville Sportswear Ltd [1960] 1 WLR 1055 .… 12.15 Ormonoid Roofing and Asphalts Ltd v Bitumenoids Ltd (1930) 31 SR (NSW) 347 .… 7.11, 7.58, 7.83, 7.123, 7.129, 15.69, 15.134, 15.135, 16.45, 16.49 Ormwave Pty Ltd v Smith [2007] NSWCA 210 .… 3.4 O’Rourke v Miller (1985) 156 CLR 342; 58 ALR 269 .… 11.5 Orr v Ford (1989) 167 CLR 316; 84 ALR 146 .… 15.62, 15.63 — v University of Tasmania (1957) 100 CLR 526 .… 7.140, 7.141, 11.21 Orton v Melman [1981] 1 NSWLR 583 .… 16.24 O’Shea v Heinemann Electric Pty Ltd (2008) 172 FCR 475; 178 IR 394; [2008] FCA 1799 .… 5.85, 5.88, 5.89, 9.40 Osmond v Fitzroy (1731) 3 P Wms 129; 24 ER 997 .… 4.14 O’Sullivan v Management Agency & Music Ltd [1985] 3 All ER 351 .… 4.14 Ottoman Bank v Chakarian [1930] AC 277 .… 5.49, 7.16, 9.11, 12.11 Outram v Academy Plastics Ltd [2001] ICR 367 .… 8.30 Oxman v Dustbane Enterprises Ltd (1988) 23 CCEL 157 .… 11.64

P P and V Industries v Porto (2006) 14 VR 1; [2006] VSC 131 .… 7.20, 7.59, 7.61, 7.69 Paal Wilson & Co v Partenreederei [1983] 1 AC 854; [1983] 1 All ER 34 .… 12.36 Pacesetter Homes Pty Ltd v Australian Builders Labourers Federated Union of Workers (WA Branch) (1994) 57 IR 449 .… 3.43 Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd (2006) 149 FCR 395; 230 ALR 56; [2006] FCAFC 40 .… 6.38, 6.41, 6.42, 6.43 Pacific Carriers Limited v BNP Paribas (2004) 218 CLR 451; 208 ALR 213 .

… 3.6, 3.75, 3.77, 3.78, 5.10 Pacific Coal Pty Ltd, Re; Ex p CFMEU (2000) 203 CLR 346; 172 ALR 257; 96 IR 289 .… 5.54, 5.101 Pacific Publications Pty Ltd v Cantlon (1983) 4 IR 415 .… 5.88, 5.89 Packenham Upper Fruit Company Limited v Crosby (1924) 35 CLR 386 .… 15.6 Paff v Speed (1961) 105 CLR 549 .… 12.15, 12.16 Page One Records Ltd v Britton [1968] 1 WLR 157; [1967] 3 All ER 822 .… 15.28, 15.29, 15.34, 15.37, 15.55 Pagnan SpA v Feed Products Ltd [1987] 2 Lloyd’s Rep 601 .… 3.48 — v Tradex Ocean Transportation SA [1987] 3 All ER 565 .… 5.27 Paklan Pty Ltd v Federal Commissioner of Taxation (1983) 67 FLR 328 .… 14.29 Palace Shipping Company Ltd v Caine [1907] AC 386 .… 7.16, 12.22 Palais Parking Station Pty Lt v Shea (1977) 16 SASR 350 .… 2.35, 11.30 Palette Shoes Pty Ltd v Krohn (1937) 58 CLR 1 .… 7.52 Palmanor Ltd v Cedron [1978] ICR 1008 .… 7.96, 8.25 Panchaud Freres SA v Etablissements General Grain Co [1970] 1 Lloyd’s Rep 53 .… 10.88 Pao On v Lau Yiu Long [1980] AC 614; [1979] 3 All ER 65 .… 3.39, 5.24, 6.32 Paoad v Scarborough Guardians [1914] 3 KB 959 .… 10.19 Papadopoulos v MC Labour [2009] VSC 176 .… 14.121 Papas v Bianca Investments Pty Ltd (2002) 82 SASR 581 .… 4.18 Paras v Public Service Body Head of the Department of Infrastructure (2006) 152 IR 75; [2006] FCA 622 .… 10.49, 11.34, 14.87, 15.11, 15.20, 15.22, 15.23, 15.44, 15.45, 15.46, 15.111 Paris v Stepney Borough Council [1951] AC 367 .… 8.56, 8.60, 8.65, 8.67

Parish of Gregory-Stoke v Pitmister (1760) Sess Cas 163; 93 ER 165 .… 1.36 Parish of St Pancras, Middlesex v Parish of Clapham, Surrey (1860) 2 El & El 742; 121 ER 278 .… 3.43, 8.41 Park v Brothers (2005) 222 ALR 421 .… 5.48, 7.2, 8.33, 10.63, 10.65, 14.35, 14.39 Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191; 42 ALR 1 .… 4.37 Parkdale, The [1897] P 53 .… 7.94, 7.96, 7.97 Parke v Daily News Ltd [1962] Ch 927; [1962] 2 All ER 929 .… 3.45, 5.108, 6.26, 6.28, 6.33 Parker v Ibbetson (1858) 4 CB (NS) 345; 140 ER 1118 .… 5.71, 5.75, 11.43 — v McKenna [1874] LR 10 Ch App 96 .… 7.98 Parkinson v Grazcos Co-operative Ltd (1958) 1 FLR 90 .… 7.4 Parks v Atlantic Provinces Special Education Authority Resource Centre for the Visually Impaired (1992) 39 CCEL 155 .… 12.19 Parry v Cleaver [1970] AC 1; [1969] 1 All ER 555 .… 14.7, 14.121 Parsons v Albert J Parsons & Sons Ltd [1979] ICR 271 .… 2.34 — v BNM Laboratories Ltd [1963] 2 All ER 658 .… 14.124 Pastachak v Bienfait (Town) [1996] 6 WWR 616 .… 12.46 Patel v Ali [1984] 1 All ER 978 .… 15.61 Patent Castings Syndicate Ltd v Etherington [1919] 2 Ch 254 .… 15.100 Paterson v McNaghten (1905) 2 CLR 615 .… 11.80 — v Middle Harbour Yacht Club (1996) 64 FCR 405 .… 14.3, 14.30, 14.45, 14.46, 14.47, 14.64 Paton Calvert & Co Ltd v Rosedale Associated Manufacturers Ltd [1966] RPC 6 .… 15.135 Patrick v Steel Mains Pty Ltd (1987) 22 IR 81; 77 ALR 133 .… 4.35, 4.39, 6.20

Patrick Stevedores (No 1) Pty Ltd v Vaughan [2002] NSWCA 275 .… 8.61 Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1; 153 ALR 643; 79 IR 339 (the MUA case) .… 13.16, 15.7, 15.26, 15.57, 15.61, 15.66, 15.67, 15.75, 15.76 — v — (1998) 77 FCR 478; 153 ALR 626; 79 IR 305 .… 15.11, 15.17, 15.26, 15.35, 15.39, 15.47, 15.54, 15.61, 15.76, 15.86, 15.87 Patterson v Newcrest Mining Ltd (1996) 68 IR 419 .… 15.26 Patty v Commonwealth Bank of Australia (2000) 101 FCR 389; 179 ALR 57; 113 IR 1 .… 7.22, 7.23 Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221; 69 ALR 577 .… 9.29 Payzu Ltd v Hannaford [1918] 2 KB 348 .… 11.44, 11.48 — v Saunders [1919] 2 KB 581 .… 14.109, 14.110, 14.111, 14.112 Peace v City of Edinburgh Council [1999] IRLR 417 .… 11.15, 15.11, 15.22, 15.23, 15.24, 15.75 Peacocke Land Co Ltd v Hamilton Milk Producers Co Ltd [1963] NZLR 576 .… 6.41 Pearce v Brooks (1866) LR 1 Ex 213 .… 4.25 — v Foster (No 2) (1886) LR 17 QBD 536 .… 7.47, 7.137, 7.140, 7.141, 8.14, 8.18 Pearne v Lisle (1749) Amb 75; 27 ER 47 .… 15.49 Peckham v Moore [1975] 1 NSWLR 353 .… 3.69, 6.37 Pedersen v Camden London Borough Council [1981] ICR 674 .… 3.12, 6.15, 6.16 Peek v Australian Government Solicitor (No 2) (2005) 226 ALR 268; [2005] FCA 1343 .… 15.105 Pelechowski v NSW Land and Housing Commission [2000] FCA 299 .… 13.29 Pelletier v Caisse populaire Lasalle Sudbury Ltee (1986) 56 OR (2d) 784 .… 11.22

Peninsular & Oriental Steam Navigation Co v Johnson (1938) 60 CLR 189 . … 7.52, 7.69, 9.38, 15.133 Peninsular Real Estate Ltd v Harris [1992] 2 NZLR 216 .… 7.58, 16.48 Pennant Hills Restaurants Pty Ltd v Barrell Insurances Pty Ltd (1981) 145 CLR 625; 34 ALR 162 .… 14.31 Pennsylvania Company v Wilmington Trust Company, 166 A 2d 726 (1960) . … 3.15 Penrith District Rugby League Football Club Limited v Fittler (SC(NSW) Santow J, 8 February 1996, unreported) .… 12.37, 12.45, 12.47 Pepe v Platypus Asset Management Pty Ltd [2010] VSC 603 .… 3.49, 3.52, 5.53 Pepper v Webb [1969] 1 WLR 514; 2 All ER 216 .… 7.141, 10.58 Percy v Board of National Mission of the Church of Scotland [2006] 2 AC 28; 4 All ER 1354 .… 2.39, 3.42 Perfection Dairies Pty Ltd v Finn (2006) 151 IR 197 .… 13.29 Performing Right Society Ltd v Mitchell and Booker (Palais de Danse) Ltd [1924] 1 KB 762 .… 2.5, 2.13 Perkins v Grace Worldwide (Aust) Pty Ltd (1997) 72 IR 186 .… 7.137, 8.13, 15.35, 15.39 Perks v Willert (1974) 22 FLR 274 .… 6.14 Permanent Building Society (in liq) v Wheeler (1994) 14 ACSR 109; (1994) 11 WAR 187 .… 7.25, 7.69, 7.73, 7.75 Permanent Trustee Australia Ltd v FAI General Insurance Co Ltd (1998) 44 NSWLR 186 .… 4.20 — v — (2001) 50 NSWLR 679 .… 4.20 — v — (2003) 214 CLR 514 .… 4.20 Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537; 41 ALR 441 . … 3.15, 10.3 Personnel Contracting Pty Ltd v Construction, Forestry, Mining and Energy Union of Workers (2004) 141 IR 31; [2004] WASCA 312 .… 2.26

Peso Silver Mines v Cropper (1966) 58 DLR (2d) 1 .… 7.69 Peter F Burns Pty Ltd v Commissioner of Stamps [1980] 24 SASR 283 .… 2.9 Peter Jackson Pty Ltd v Consolidated Insurance of Australia Ltd [1975] VR 480 .… 2.40 Peter Pan Manufacturing Corp v Corsets Silhouette Ltd [1963] RPC 45 .… 7.135, 15.120, 15.127, 15.131 Peter Turnbull and Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd (1954) 90 CLR 235 .… 7.2, 10.26, 10.63, 10.65, 10.66, 10.67, 10.71, 10.89, 14.35, 14.39, 14.40 Peters (WA) Ltd v Petersville Ltd (2001) 205 CLR 126; 181 ALR 337 .… 16.2, 16.3, 16.4, 16.28 Peterson v Maloney (1951) 84 CLR 91 .… 3.70, 3.75 Petrie v MacFisheries Limited [1939] 4 All ER 281 .… 12.15, 12.16 Petrofina (Gt Britain) Ltd v Martin [1966] Ch 146; 1 All ER 126 .… 16.3 — v — [1967] 1 All ER 699 .… 16.3 — v — [1968] AC 269 .… 16.3 Pettet v Readiskill [1999] VSC 195 .… 7.17 Peyman v Lanjani [1985] Ch 457; [1984] 3 All ER 703 .… 10.103 Philip M Levy Ltd v Christopoulos [1973] VR 673 .… 16.31, 16.34, 16.35, 16.39 Philips v Bury (1788) 2 Term Rep 346; 100 ER 186 .… 9.60 Phillips v Alhambra Palace Company [1901] 1 QB 59 .… 12.24, 12.25, 13.31, 13.33 — v Ellinson Brothers Pty Ltd (1941) 65 CLR 221 .… 3.39, 6.26, 6.28, 6.33, 9.26, 9.29, 9.31, 9.37 — v Foxall (1872) LR 7 QB 666 .… 10.101, 10.102 — v Stephens (1899) 15 TLR 325 .… 11.22 Photo Production Ltd v Securicor Transport Ltd [1980] AC 827; 1 All ER

556 .… 10.76 Pickering v Bishop of Ely (1843) 2 Y and C Ch 249; 63 ER 109 .… 15.2, 15.17, 15.55 Pierce Bell Sales Pty Ltd v Frazer (1973) 130 CLR 575 .… 4.13 Pigot’s Case (1614) 11 Co Rep 26 .… 6.50 Pigram v Attorney-General for the State of New South Wales (1975) 132 CLR 216; 6 ALR 15 .… 14.132, 14.134 Pilkington v Scott (1846) 15 M & W 657; 153 ER 1014 .… 3.31, 8.37 Pilmer v Duke Group Ltd (in liq) (2001) 207 CLR 165; 180 ALR 249 .… 7.20, 7.34, 7.36, 7.46, 7.47, 7.49, 7.61, 7.96 Pine River State Bank v Mettille, 333 NW 2d 622 (1983) .… 14.62 Pioneer Concrete Services Ltd v Galli [1985] VR 675 .… 7.124, 16.15, 16.40, 16.44, 16.45, 16.46 Piper, Re; Ex p Meloney (1996) 63 IR 473 .… 9.61 Pitcher v Langford (1991) 23 NSWLR 142 .… 2.13, 2.14, 2.28, 2.46, 2.47 Placer Development Ltd v Commonwealth (1969) 121 CLR 353 .… 3.38, 3.56, 3.57 Plaintiff M175/10 v Minister for Immigration and Citizenship (2011) 279 ALR 1 .… 15.77 Platt v Treweneck [1953] AR (NSW) 642 .… 2.40 Playa Larga, The [1983] 2 Lloyd’s Rep 171 .… 12.38 Poland v John Parr & Sons [1927] 1 KB 236 .… 8.64 Poletti v Ecob (No 2) (1989) 31 IR 321 .… 5.88, 5.89 Police Service Board v Morris (1985) 156 CLR 397; 58 ALR 1 .… 7.23 Polkey v AE Dayton Services Ltd [1988] AC 344; [1987] 3 All ER 974 .… 10.88 Polkinghorne v Holland (1934) 51 CLR 143 .… 3.64 Polyco Window v Saskatchewan (1994) 3 CCEL (2d) 10 .… 12.12

Pondcil Pty Ltd v Tropical Reef Shipyard Pty Ltd (1994) ATPR (Digest) 46134 .… 5.30 Ponzia v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543; 162 IR 444 .… 9.40 Poole v Shanks (1992) 39 CCEL 316 .… 12.27 Port Jackson Stevedoring Pty Ltd v Salmond and Spraggon (Aust) Pty Ltd (1978) 139 CLR 231; 18 ALR 333 .… 3.21, 6.32 — v — (1980) 144 CLR 300; 30 ALR 588 .… 3.21, 6.32, 10.76 Porter, Re; Transport Workers Union of Australia (No 2), Re (1989) 34 IR 179 .… 2.5, 2.6, 2.8, 2.10, 2.11, 2.14, 2.18, 2.20, 2.24, 2.26, 2.40, 2.41 Portilla v BHP Billiton Iron Ore Pty Ltd (2005) 147 IR 1 .… 10.58 Portuguese Consolidated Copper Mines Ltd, Re (1890) 45 Ch D 16 .… 3.79 Post Office v Roberts [1980] IRLR 347 .… 8.20, 8.24, 8.25 Potato Producers Co-operative Ltd v Pavone [1962] VR 231 .… 16.9 Potter v North Cumbria Acute Hospitals NHS Trust [2009] IRLR 900 .… 6.9, 6.39 Potters-Ballotini Ltd v Weston Baker [1977] RPC 202 .… 5.49, 7.119, 15.90 Poussard v Spiers (1876) 1 QBD 410 .… 12.11, 12.14, 12.18, 12.46 Powdrill v Watson [1995] 2 AC 394 .… 6.24 Powell v Braun [1954] 1 WLR 401; 1 All ER 484 .… 3.47, 3.52, 3.59, 14.52 — v Brent London Borough Council [1987] ICR 176 .… 8.14, 8.52, 15.20, 15.35, 15.36, 15.37, 15.38, 15.40, 15.46 — v Lee (1908) 99 LT 284 .… 3.14, 3.22 Power Co Limited v Gore District Council [1997] 1 NZLR 537 .… 12.9 Powlett v Watson [1995] 2 AC 394; 2 All ER 65 .… 13.16, 13.17, 13.18 Pratt v Australian Broadcasting Corporation (1985) 26 IR 1 .… 2.18–2.20 Prebble v Reeves [1910] VLR 88 .… 7.58 Prescott v Farmer Tel Cooperative Inc, 335 SC 330 (1999) .… 3.10

Press v Mathers [1927] VLR 326 .… 3.70 Preston v Wolverhampton Healthcare NHS Trust (No 3) [2004] ICR 993 .… 6.39 Prestwick Circuits Ltd v McAndrew (1990) SLT 654 .… 6.20 Price v Grant Industries Pty Ltd (1978) 21 ALR 388 .… 2.5, 2.6, 2.9, 2.16, 2.18, 2.19, 2.20, 2.24 — v Green (1847) 16 M & W 346 .… 14.132 — v Mouat (1862) 11 CB NS 508; 142 ER 895 .… 8.48 — v Representative Body of the Church in Wales [1938] Ch 434 .… 15.100 — v Rhondda Urban District Council [1923] 2 Ch 372 .… 3.12, 3.14, 3.39, 3.82, 6.26, 6.28, 6.33, 11.65 — v Strange [1978] Ch 337; [1977] 3 All ER 371 .… 15.56 — v Sunderland Corporation [1956] 3 All ER 153; [1956] 1 WLR 1253 .… 7.13, 15.111 Principal of Auckland College of Education v Hagg [1997] 2 NZLR 537 .… 5.18 Print Investments Pty Ltd v Art-Vue Printing Ltd (1983) 8 IR 385 .… 7.127, 7.135, 15.64, 16.25, 16.48, 16.49 Printers and Finishers Ltd v Holloway [1964] 1 WLR 1; [1964] 3 All ER 731 .… 7.128, 7.129, 15.70, 16.25, 16.42, 16.45, 16.46, 16.47, 16.48 Printing & Kindred Industries Union, Re; Ex p Nationwide News Pty Ltd (1994) 122 ALR 303 .… 15.81 Printing & Kindred Industries Union v Davies Bros Ltd (1986) 18 IR 444 .… 5.23 — v Federal Capital Press of Australia Pty Ltd (1994) 31 AILR 378 .… 13.12 Printing Industry Employees Union of Australia v Jackson & O’Sullivan Pty Ltd (1957) 1 FLR 175 .… 7.24, 7.28 Prison Service v Johnson [1997] ICR 275 .… 14.85

Pritchard v Dinorwic Slate Quarries Limited (1971) 6 ITR 102 .… 12.5, 12.19, 12.35 Proctor v Bacon (1886) 2 TLR 845 .… 7.137 Proform Sports Management Ltd v Proactive Sports Management Ltd [2007] 1 All ER 542 .… 3.65 Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17; 57 ALR 609 .… 10.92 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; 153 ALR 490 .… 4.27, 4.28, 11.67 Properties Ltd v Dunsford [2001] 1 WLR 1369 .… 2.31, 5.23 Protectacoat Firthglow Ltd v Szilagyi [2009] ICR 835 .… 2.17, 2.21, 2.28 Protective Security Pty Ltd v Bedelph (2004) 13 Tas R 354 .… 2.6, 2.27 Prout v British Gas Plc [1992] FSR 478 .… 7.104, 7.105, 7.112, 7.127 Provident Financial Group v Hayward [1989] 3 All ER 298; [1989] ICR 160 . … 8.41, 11.72, 15.30, 15.33, 15.34, 15.61, 15.64, 16.19, 16.29, 16.32 Prudential Assurance Co Limited v Rodrigues [1982] 2 NZLR 54 .… 7.55 Prus-Grzybowski v Everingham (1976) 87 FLR 182 .… 14.99 PSM International Ltd v Whitehouse [1992] FSR 489; [1992] IRLR 279 .… 15.49, 15.61, 16.46 Public Service Association (SA) v Commissioner for Public Employment (1994) 54 IR 367 .… 5.106 Public Service Employees Credit Union Co-operative Ltd v Campion (1984) 56 ACTR 39 .… 4.5, 4.24 Public Service Employee Relations Act, Re [1987] 1 SCR 313 .… 10.49, 14.92 Pukallus v Cameron (1982) 180 CLR 447; 43 ALR 243 .… 4.20 Pullman v Hill & Co [1891] 1 QB 524 .… 16.52 Purcell v Bacon (1914) 19 CLR 241 .… 3.5, 9.28, 14.15 — v — (1916) 22 CLR 307 .… 9.28

— v Tullett Prebon (Aust) Pty Ltd [2010] NSWCA 150 .… 7.12 Purdue v Brown Hatton Rural Pty Ltd (1995) 60 IR 451 .… 9.55, 9.56 Putsman v Taylor [1927] 1 KB 637 .… 16.14, 16.40 Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328; 45 ALR 609 .… 7.23 Pyx Granite Co Ltd v Ministry of Housing & Local Government [1960] AC 260 .… 15.95

Q QBE Insurance Australia Ltd v Vasic [2010] NSWCA 166 .… 5.10 Qantas v Fetz (1998) 84 IR 52 .… 11.38, 13.11 Qantas Airways Ltd v Christie (1998) 193 CLR 280; 152 ALR 365 .… 5.40, 11.19 — v Gubbins (1992) 28 NSWLR 26 .… 4.2 — v Transport Workers’ Union of Australia (2011) 280 ALR 503; [2011] FCA 470 .… 7.2, 9.39, 9.40, 14.39 Quality Bakers of Australia Ltd v Goulding (1995) 60 IR 327 .… 13.5 Queensland Co-operative Milling Association v Pamag Pty Ltd (1973) 133 CLR 260; 1 ALR 47 .… 16.13, 16.16 Queensland Mines Ltd v Hudson (1978) 18 ALR 1 .… 7.11, 7.41, 7.47, 7.50, 7.69, 7.70, 7.71 Queensland Stations v Federal Commissioner of Taxation (1945) 70 CLR 539 .… 2.5, 2.9, 2.10, 2.13, 2.17, 2.40 Quigley v Commonwealth (1981) 35 ALR 537 .… 8.60, 8.70 Quill v Brunton [1921] AR (NSW) 44 .… 12.15 Quinn v Calder Industrial Materials Ltd [1996] IRLR 126 .… 5.77, 5.78 — v Gray (2009) 184 IR 279; [2009] VSC 136 .… 8.13, 8.26, 11.24, 14.81, 14.82, 14.87, 14.90 — v Jack Chia (Australia) Ltd [1992] 1 VR 567; 43 IR 91 .… 5.6, 6.2, 6.38,

6.39, 11.18, 11.48, 11.55, 11.57, 11.59, 11.60, 11.80, 14.47, 14.51, 14.108, 14.115 — v Overland (2010) 199 IR 40; [2010] FCA 799 .… 1.10, 9.61, 10.49, 15.11, 14.87, 15.20, 15.35, 15.37, 15.39, 15.46, 15.58, 15.111

R R v Alexander; Ex p Campbell (1943) 17 ALJR 28 .… 5.74, 5.77 — v Allan; AMP Society, Ex p (1977) 16 SASR 237 .… 2.22 — v Attorney-General; Ex p ICI [1987] 1 CMLR 72 .… 15.93 — v Australian Char Pty Ltd [1999] 3 VR 834 .… 8.58 — v British Broadcasting Corporation; Ex p Lavelle [1983] 1 WLR 23; [1983] 1 All ER 241; [1983] ICR 99 .… 7.23, 15.16, 15.22, 15.106, 15.111 — v Bunn (1872) 12 Cox CC 316 .… 11.43 — v Byrnes (1995) 183 CLR 501; 130 ALR 529 .… 7.48, 7.49, 7.50, 7.51, 7.65 — v Churchwardens and Overseers of the Poor of Christ’s Parish in York (1824) 3 B and C 459; 107 ER 804 .… 11.43 — v Civil Service Appeal Board; Ex p Bruce [1988] 3 All ER 686 .… 15.109 — v — [1989] 2 All ER 907 .… 15.109 — v Clarke (1927) 40 CLR 227 .… 3.19, 3.21 — v Commonwealth Conciliation & Arbitration Commission; Ex p BHP Co Ltd (1909) 8 CLR 419 .… 7.4 — v Cook, Ex p DPP (Cth) (1996) 20 ACSR 618 .… 7.35, 7.51 — v Costello and Bishop [1910] 1 KB 28 .… 7.19 — v Darling Island Stevedoring and Lighterage Co Ltd; Ex p Halliday & Sullivan (1938) 60 CLR 601 .… 7.5, 7.6, 7.12, 7.14, 7.15, 7.16 — v Deputy Chief Constable of the North Wales Police; Ex p Hughes [1991] 3 All ER 414 .… 9.62

— v Derbyshire County Council; Ex p Noble [1990] ICR 808 .… 15.108 — v Director-General of Social Welfare (Victoria); Ex p Henry (1975) 133 CLR 369; 8 ALR 233 .… 6.45, 11.4 — v Director-General of the National Crime Squad [2003] ICR 599 .… 15.108 — v East Berkshire Health Authority; Ex p Walsh [1985] QB 152; [1984] 3 All ER 425 .… 10.2, 15.19, 15.108, 15.109 — v Federal Court of Australia; Ex p Western Australian National Football League (Inc) & Adamson (1979) 143 CLR 190; 23 ALR 439 .… 16.3 — v Foster; The Commonwealth Life (Amalgamated) Assurances Ltd, Ex p (1952) 85 CLR 138 .… 1.45, 2.1, 2.5, 2.17, 2.27, 2.32, 2.43 — v Glynn (1994) 33 NSWLR 139 .… 7.95 — v Gough; Ex p Meat and Allied Trades Federation of Australia (1969) 122 CLR 237 .… 5.94 — v Haringey London Borough Council [2002] ICR 279 .… 8.25 — v Hertfordshire County Council; Ex p National Union of Public Employees [1985] IRLR 258 .… 15.111 — v Hoseason (1811) 14 East 605; 104 ER 734 .… 1.41 — v Industrial Appeals Court; Ex p Barelli’s Bakeries Pty Ltd [1965] VR 615 .… 14.28 — v Industrial Commission of South Australia; Ex p Adelaide Milk Cooperative Ltd (1977) 16 SASR 6 .… 13.4, 13.6 — v Industrial Disputes Tribunal; Ex p Portland Urban District Council [1955] 1 WLR 949 .… 5.44 — v Inhabitantes de Hales Owen (1718) 1 Str 99; 93 ER 410 .… 1.27, 12.13 — v Inhabitantes de Islip in Com’ Oxon (1721) 93 ER 611; 1 Strange 423 .… 12.13 — v Inhabitants of Atherton (1742) 2 Strange 1182; 93 ER 1114 .… 11.43 — v Inhabitants of Bottesford (1825) 4 B & C 84; 107 ER 990 .… 11.80

— v Inhabitants of Brampton (1777) Cald Mag Cas 11 .… 1.43, 7.137, 7.141 — v Inhabitants of Byker (1823) 2 B & C 114; 107 ER 325 .… 7.15, 9.62 — v Inhabitants of Christchurch (1760) Burr SC 494 .… 12.13 — v Inhabitants of Elslack (1785) 4 Dougl 210; 99 ER 845 .… 11.43 — v Inhabitants of Great Bowden (1827) 7 B & C 249; 108 ER 716 .… 11.43 — v Inhabitants of Hampreston (1793) 5 TR 205; 101 ER 116 .… 11.43 — v Inhabitants of Islip (1721) Fort 305; 92 ER 863 .… 7.14 — v Inhabitants of Kingswinford (1791) 4 TR 219; 118 ER 1299 .… 1.38, 8.38 — v Inhabitants of Long Whatton (1793) 5 TR 447; 101 ER 252 .… 11.19 — v Inhabitants of Lydd (1824) 2 B & C 754; 107 ER 563 .… 1.38 — v Inhabitants of Lyth (1793) 5 TR 327; 101 ER 183 .… 3.27, 11.42, 11.43 — v Inhabitants of Macclesfield (1789) 3 TR 76; 100 ER 463 .… 11.19, 11.42, 11.43 — v Inhabitants of Marlborough (1796) 12 Mod 402; 88 ER 1409 .… 7.137 — v Inhabitants of North Nibley (1792) 5 TR 21; 101 ER 12 .… 1.38, 8.38 — v Inhabitants of Pendleton (1812) 15 East 449; 104 ER 913 .… 11.43 — v Inhabitants of St Paul’s Bedford (1795) 6 TR 452; 101 ER 644 .… 1.27 — v Inhabitants of Sandhurst (1827) 7 B & C 557; 108 ER 831 .… 11.43 — v Inhabitants of Sharrington (1784) 99 ER 742; 4 Dougl 12 .… 12.13 — v Inhabitants of Stoke-Upon-Trent (1843) 5 QB 303 .… 5.75 — v Inhabitants of Sutton (1794) 5 TR 657; 101 ER 366 .… 12.13, 12.19 — v Inhabitants of Thames Ditton (1785) 4 Doug 300; 99 ER 891 .… 1.27, 1.36 — v Inhabitants of Welford (1778) Cal Mag Cas 57 .… 1.43, 7.137, 7.141 — v Inhabitants of Weyhill (1746–1779) 1 Black W 206; 96 ER 113 .… 1.36 — v Inhabitants of Worfield (1794) 5 TR 507; 101 ER 285 .… 11.43

— v Keilor District Board (1870) 1 VR 14 .… 9.14 — v Mayor and Town Council of Wigan (1885) 14 QBD 908 .… 11.70 — v Paulson [1921] 1 AC 271 .… 10.78 — v Ridley (1811) 2 Camp 650; 170 ER 1282 .… 1.34 — v Saint Andrew in Pershore, Worcestershire (1828) 8 B & C 679; 108 ER 1195 .… 11.43 — v Saint John, Devizes (1829) 9 B & C 896; 109 ER 333 .… 1.38 — v Secretary of State for the Home Department; Ex p Benwwell [1985] QB 554; [1984] 3 All ER 854 .… 15.104 — v Stewart [1938] QSR 87 .… 14.132, 14.135 — v Stuart [1894] 1 QB 310 .… 2.35 — v Thackeray (reported in the Manchester Guardian, 7 May 1822) .… 1.42 — v Watling; Ex p Northern Residential Support Group Incorporated (1999) 93 IR 79; [1999] TASSC 99 .… 3.80, 3.81 — v Welch (1853) 2 E & B 357; 118 ER 800 .… 8.37, 8.38, 8.43 R (on the application of Shoesmith) v Ofsted [2011] IRLR 679 .… 15.106, 15.108, 15.113 Rae v Broken Hill Pty Co Ltd (1957) 97 CLR 419 .… 8.67 Raftland Pty Ltd v Commissioner of Taxation (2008) 238 CLR 516; 246 ALR 406 .… 2.25, 2.26, 2.28, 2.31 Raggow v Scougall and Co (1915) 31 TLR 564 .… 6.39 Rahemtulla v Vanfed Credit Union [1984] 3 WWR 296; (1984) 51 BCLR 200 .… 3.9, 6.26, 6.27, 6.29 Rai v Somerfield Stores Ltd [2004] ICR 656 .… 11.8, 11.68 Raiffeisen Zentralbank Osterreich AG v Crosseas Shipping Ltd [2000] 1 WLR 1135 .… 6.50 Railway Commissioners for New South Wales v Hunt [1930] AR (NSW) 534 .… 11.45

Railway Commissioners of New South Wales v Orton (1922) 30 CLR 422 . … 3.82 Raimondo v State of South Australia (1979) 23 ALR 513 .… 8.56, 8.61, 8.67, 8.70, 8.71 Raineri v Miles [1981] AC 1050 .… 9.55 Ramsey Butchering Services Pty Ltd v Blackadder (2003) 127 FCR 381; 196 ALR 660; [2003] FCAFC 20 .… 8.37, 8.44, 8.47 Randall v Aristocrat Leisure Ltd [2004] NSWSC 411 .… 7.14, 7.137, 8.14, 10.2, 10.19, 10.41, 10.44, 10.47, 10.53, 10.54 — v Deputy Commissioner of Taxation (2008) 174 FCR 441; [2008] FCA 1939 .… 13.29 Randi W v Muroc Joint Unified School District, 14 Cal 1066; 929 P 2d 582 (Cal, 1997) .… 16.58 Rankin v Marine Power International Pty Ltd (2001) 107 IR 117; [2001] VSC 150 .… 1.1, 7.14, 7.17, 7.28, 8.29, 8.31, 10.2, 10.8, 10.13, 10.21, 10.41, 10.42, 10.46, 10.48, 10.49, 10.52, 10.54, 10.67, 10.85, 10.99, 10.101, 10.102, 10.103, 11.48, 11.52, 11.53, 11.55, 11.57, 11.58, 11.59, 11.62, 14.19, 14.52, 14.87, 15.46 Raspin v United News Shops Ltd [1999] IRLR 9 .… 14.45 Ratcliffe v Evans [1892] 2 QB 524 .… 14.24 Raward v Vine Nominees Pty Ltd [2001] QSC 494 .… 3.5, 3.46, 3.48, 3.49, 3.58, 5.23 Rawson v Hobbs (1961) 107 CLR 466 .… 10.32, 11.17 Ray v Radano [1967] AR (NSW) 471 .… 5.88 RBG Resources Plc v Rastogi [2002] EWHC 2782 .… 7.21 RDF Media Group Plc v Clements [2008] IRLR 207 .… 8.19, 10.104 Re, an Arbitration between Walkers, Winser & Hamm and Shaw, Son & Co [1904] 2 KB 152 .… 5.69 Read v Astoria Garage (Streatham) Ltd [1952] Ch 637; 2 All ER 292 .… 2.37 Reading v Attorney-General [1951] AC 507; 1 All ER 617 .… 7.11, 7.34,

7.52, 7.53, 7.54, 7.85, 7.94, 7.95, 7.97, 7.99, 15.133 Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497; 1 All ER 433 .… 2.5, 2.8, 2.17 Real Estate Institute of Western Australia Inc v Federated Clerks Union of Australia Industrial Union of Workers, WA Branch (1993) 51 IR 415 .… 6.16 Reardon Smith Line Ltd v Hansen-Tangen [1976] 3 All ER 570; 1 WLR 989 .… 3.7, 5.10, 5.22 Reda v Flag Ltd [2002] All ER (D) 201 (Jul); [2002] IRLR 747; [2002] UKPC 38 .… 5.65, 8.13, 8.15, 8.23, 8.26, 8.29, 8.30, 11.24 Redding v Lee (1983) 151 CLR 117; 47 ALR 241 .… 5.90, 14.119, 14.120, 14.121, 14.123, 14.124, 14.130 Redeemer Baptist School Limited v Glossop [2006] NSWSC 1201 .… 3.7, 3.38, 3.57 Redman v Southern Cross Broadcasting (Australia) Ltd [2001] WASC 9 .… 15.61 — v Verticon Group Ltd (No 2) (2009) 183 IR 274 .… 10.42 Redundancy Case (2004) 129 IR 155 .… 13.3, 13.9 Redundancy Case - Supplementary Decision (2004) 134 IR 57 .… 13.3, 13.9 Redwood Music Ltd v Campbell and Co Ltd [1982] RPC 109 .… 15.134 Reed v Blue Line Cruisers Ltd (1996) 73 IR 420 .… 3.32 Reedman v Hoare (1959) 102 CLR 177 .… 11.30 Reese v Commercial Credit Corporation, 955 F Supp 567 (1997) .… 3.8 Reeves v State of New South Wales [2010] NSWSC 611 .… 16.54 Regal (Hastings) Ltd v Gulliver [1967] 2 AC 134n; [1942] 1 All ER 378 .… 7.11, 7.44, 7.47, 7.49, 7.50, 7.58, 7.65, 7.66, 7.69, 7.73, 7.94, 7.98, 15.120, 15.121 Regional Express Holdings Ltd v Clarke (2007) 165 IR 251; [2007] FCA 957 .… 5.81, 5.84, 5.86

Reichel v Bishop of Oxford (1887) 35 Ch D 82 .… 11.4 Reid, Re (2007) 163 IR 392; [2007] FCA 417 .… 3.5, 10.78 Reid v Australian Institute of Marine and Power Engineers (1990) 33 IR 463 .… 9.62 — v Camphill Engravers [1990] ICR 435 .… 6.48, 14.28 — v Explosives Co Ltd [1886–90] All ER Rep 712 .… 11.70 — v — (1887) 19 QBD 264 .… 11.70, 13.17, 13.19, 14.116 — v Howard (1995) 184 CLR 1; 133 ALR 609 .… 7.23 — v Republic of Nauru (SC(Vic, Nathan J, 4905 of 1990, 21 February 1994, unreported) .… 12.26 — v Rush & Tomkins Group Plc [1990] 1 WLR 212; [1989] 3 All ER 228 . … 5.50, 5.51, 8.30 Reigate v Union Manufacturing Co (Ramsbottom) Ltd [1918] 1 KB 592 .… 5.3, 5.63, 8.44, 8.45, 13.15 Reilly v King [1934] AC 176 .… 11.30, 12.5 — v Praxa Ltd [2004] ACTSC 41 .… 5.38, 5.95, 5.102, 6.9, 6.16, 6.38, 6.39, 11.73, 13.8, 14.46, 14.103, 14.128, 14.129, 14.130 — v State of Victoria (1991) 5 VIR 1 .… 10.98, 11.51, 15.11, 15.22, 15.38, 15.41, 15.46, 15.48, 15.54, 15.75 Rely-a-Bell Burglar and Fire Alarm Co Ltd v Eisler [1926] Ch 609 .… 15.31, 15.34 Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234 .… 8.28, 8.29, 8.31, 8.32, 10.20, 11.25, 11.26 Rentokil Pty Ltd v Lee (1995) 66 SASR 301 .… 16.9, 16.18, 16.23, 16.27, 16.30, 16.31, 16.33, 16.35, 16.39 Republic of Nauru v Reid (VSCA, Ashley, Brooking and Smith JJ, BC9507261, No 4905/90, 23 October 1995, unreported) .… 3.10, 3.59, 3.73, 5.13, 5.17, 5.29, 5.31 Reseck v Federal Commissioner of Taxation (1975) 133 CLR 45; 6 ALR 642 .… 14.29

Residues Treatment and Trading Co Ltd v Southern Resources Ltd (1989) 52 SASR 54 .… 7.51 Retractable Technologies Inc v Occupational & Medical Innovations Ltd (2007) 72 IPR 58; [2007] FCA 545 .… 15.70 Rex Stewart Jeffries Parker Ginsberg Ltd v Parker [1988] IRLR 483 .… 11.73, 14.103, 16.7 Reynolds v Southcorp Wines Pty Ltd (2002) 122 FCR 301; 115 IR 152; [2002] FCA 712 .… 5.31, 5.38, 5.67, 13.7, 14.45, 14.64, 14.65, 14.126, 14.129, 15.102 RH McCulloch Ltd v Moore [1967] 2 All ER 290; [1968] 1 QB 360 .… 6.18 Rhodes v Forwood (1876) 1 AC 256 .… 8.45 Rhyl Urban District Council v Rhyl Amusements Ltd [1959] 1 All ER 257; [1959] 1 WLR 465 .… 5.93 Richards v Faulls Pty Ltd [1971] WAR 129 .… 10.19 — v Hayward (1841) 2 Man & G 574; 133 ER 875 .… 3.15, 3.48 Richardson v Koefod [1969] 3 All ER 1264 .… 1.26, 11.40, 11.42, 11.45, 11.48 — v Queensland Corrective Services Commission (1994) 55 IR 475 .… 5.64, 11.19 Richtsteiger v Century Geophysical Corporation (No 3) (1996) 70 IR 236 .… 2.25 Richwood Creek Pty Ltd v Williams (2010) 85 IPR 378; [2010] FCA 196 .… 7.104 Rickless v United Artists Corporation [1988] QB 40; [1987] 1 All Er 679 .… 5.68 Ridge v Baldwin [1964] AC 40; [1963] 2 All ER 66 .… 2.35, 11.25, 11.30, 11.34, 15.15, 15.22, 15.94, 15.108, 15.112 — v Director-General, Department of Culture and the Arts (2008) 188 IR 237 .… 12.17, 12.18, 12.19, 12.20 Ridgeway International Ltd v McCullum [1998] NSWSC 151 .… 3.27, 5.60,

5.62, 6.38, 16.25 Ridgway v The Hungerford Market Company (1835) 3 Ad & E 171; 111 ER 378 .… 7.137, 9.25, 9.34, 9.49 Rigby v Ferodo Ltd [1988] ICR 29 .… 6.13, 6.17, 6.24, 6.48, 10.8, 10.11, 10.60, 10.62, 10.68, 10.70, 10.72, 10.78, 10.84, 11.7, 11.10 — v Technisearch Ltd (1996) 67 IR 68 .… 11.55 Ringrow Pty Limited v BP Australia Pty Limited (2005) 224 CLR 656; 222 ALR 306 .… 14.131, 14.133, 14.134 Riordan v The War Office [1959] 3 All ER 552 .… 11.3, 11.11, 11.64, 11.68 — v — [1961] 3 All ER 774; [1961] 1 WLR 210 .… 11.3, 11.11, 11.64, 11.68 Ripley v M’Clure (1849) 4 Ex 345; 154 ER 1245 .… 10.26 Rishmont Pty Ltd v Tweed City Medical Centre [2002] 2 Qd R 222; [2001] QSC 372 .… 7.92, 7.123, 16.25, 16.43 Riteway Express Pty Ltd v Clayton (1987) 10 NSWLR 238 .… 16.42 Ritossa v Gray (1992) EOC 92-452 .… 14.33 Riverlate Properties Ltd v Paul [1975] Ch 133 .… 4.21 Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193; [2000] FCA 889 .… 3.56, 5.40, 5.42, 5.44, 5.45, 5.50, 5.63, 6.6, 6.8, 8.29, 8.32, 13.8 Rivett Arboricultural & Waste Equipment Hire Pty Ltd v Evans (2007) 161 IR 383; [2007] SASC 108 .… 14.17 Rivoli Hats Ltd v Gouch [1953] 2 All ER 823 .… 7.55 RNLI v Bushaway [2005] IRLR 674 .… 5.20 Roads and Traffic Authority of NSW v Dederer (2007) 234 CLR 330; 238 ALR 761 .… 8.65, 8.68 Roadshow Entertainment Pty Ltd v ACN 053 006 269 Pty Ltd (rec and mgr appt’d) (1997) 42 NSWLR 462 .… 5.52, 8.39, 8.45, 9.44, 10.104 Robb v Green [1895] 2 QB 315 .… 7.2, 7.30, 7.32, 7.41, 7.58, 7.67, 7.81,

7.90, 7.111, 7.113, 7.118, 7.122, 7.128, 7.129, 15.134, 16.25, 16.48, 16.49 — v Hammersmith and Fulham London Borough Council [1991] ICR 514 . … 15.22, 15.23, 15.24, 15.35, 15.39, 15.45, 15.48 Robert Cort and Son Ltd v Charman [1981] IRLR 437; ICR 816 .… 11.78, 14.45 Roberts v Elwells Engineers [1972] 2 QB 586 .… 10.75 — v Hong Kong Bank of Australia Ltd (1993) 35 AILR 213 .… 5.6 — v Parker (1884) 18 SALR 29 .… 11.46 — v Smith (1859) 4 H & N 315; 157 ER 861 .… 3.57 Robertson v British Gas Corporation [1983] ICR 351 .… 5.4, 5.40, 5.41, 5.43 — v Knott Investments Pty Ltd (No 3) [2010] FCA 1074 .… 4.33, 4.38, 4.40, 4.41 Robins v Power (1858) 4 CB (NS) 778; 140 ER 1297 .… 6.38 — v Sir Charles Gardiner Hospital (1999) 95 IR 27 .… 7.139 Robinson v Becata Pty Ltd [2004] NSWSC 310 .… 11.7 — v Crompton Parkinson Ltd [1978] ICR 401 .… 8.18, 8.25 — v Davison (1871) LR 6 CP 269 .… 12.11, 12.14, 12.18, 12.19, 12.34, 12.49 — v Hindman (1800) 3 Esp 235; 170 ER 599 .… 5.75 Robophone Facilities v Blank [1966] 3 All ER 128; 1 WLR 1428 .… 3.23 Robson v Drummond (1831) 2 B & Ad 303; 109 ER 1156 .… 6.42, 9.53, 9.54, 12.25, 13.31 — v Sykes [1938] 2 All ER 612 .… 7.16, 12.22 Rochfort v Trade Practices Commission (1982) 153 CLR 134; 43 ALR 659 . … 7.131 Rock Refrigeration Ltd v Jones [1997] ICR 938; [1997] 1 All ER 1 .… 10.76, 15.52, 16.18

Rodger v Herbertson [1909] SC 256 .… 6.42, 6.43 Rodwell v Thomas [1944] KB 596 .… 5.108 Roe v RA Naylor Ltd (No 1) [1917] 1 KB 712 .… 3.9, 3.27, 5.28 Rogan-Gardiner v Woolworths Ltd [2010] WASC 290 .… 8.13, 8.15, 8.16, 8.29, 10.84, 11.7, 11.24, 13.5, 14.47, 14.77, 14.79, 14.94 Roger Bullivant Ltd v Ellis [1987] ICR 464 .… 7.128, 15.66, 16.46, 16.48, 16.49 Rogers v Macnamara (1853) 14 CB 27; 139 ER 12 .… 16.51 Romero v Auty (2001) 19 ACLC 206; [2000] VSC 462 .… 2.46–2.48, 6.25, 6.40 Rookes v Barnard [1962] 2 All ER 579 .… 7.3, 14.84 — v — [1963] 1 QB 623 .… 7.3 — v — [1964] AC 1129 .… 14.16, 14.84 Ropner & Co v Stoate Hosegood & Co (1905) 92 LT 328 .… 5.69 Rose v Federal Commissioner of Taxation (1951) 84 CLR 118 .… 12.25 — v Telstra (1998) 45 AILR 3-966 .… 7.137, 7.138, 7.140 Rose & Frank & Co v Crompton & Bros Ltd & Brittains Ltd [1923] 2 KB 261 .… 3.45 Rosenhain v Commonwealth Bank of Australia (1922) 31 CLR 46 .… 5.3, 5.69, 5.71 Rosetex Company Pty Ltd v Licata (1994) 12 ACSR 779 .… 7.49, 7.115 Rosewood Advertising Pty Ltd v Hannah Advertising Pty Ltd [2000] NSWSC 1034 .… 7.127 Ross v IceTV [2010] NSWCA 272 .… 12.10, 16.22, 16.24, 16.31, 16.34 — v Pender (1874) 11 Sc LR 175 .… 14.113 Rosser v Maritime Services Board (No 2) (1998) 14 BCLC 375 .… 15.118 Roussell Uclaf v Pan Laboratories Pty Limited (1994) 51 FCR 316; 29 IPR 556 .… 15.134, 15.135

Routh v Jones [1947] 1 All ER 758 .… 16.16, 16.31 Rowan v Cornwall (No 5) (2002) 82 SASR 152; [2002] SASC 160 .… 16.54 Rowbotham v Arthur Lee & Sons Ltd [1975] ICR 109 .… 6.20 Rowe v Capital Territory Health Commission (1982) 39 ALR 39; 1 IR 133 . … 3.43 — v — (1982) 2 IR 27 .… 2.22, 2.31, 3.43 — v Montgomery Ward & Co, 437 Mich 627 (1991) .… 3.10 Rowell v Alexander Mackie College of Advanced Education (1988) 7 MVR 157; 25 IR 87 .… 2.40, 7.26, 7.27, 8.36 Rowlands v Producers and Citizens Co-operative Assurance Co Ltd (1950) 51 SR (NSW) 164 .… 2.42 Roxborough v Rothmans of Pall Mall Australia Pty Ltd (2001) 208 CLR 516; 185 ALR 335 .… 5.54 Roy Morgan Research Pty Ltd v Commissioner of Taxation (2010) 184 FCR 448; 268 ALR 232 .… 2.3, 2.6, 2.8–2.11, 2.16, 2.18, 2.20, 2.24 Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 240 CLR 45; 186 ALR 289 .… 5.10 Royle v Trafford Borough Council [1984] IRLR 184 .… 9.52 RS Newman Ltd, Re [1916] 2 Ch 309 .… 13.15 Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd [1967] VR 37 .… 15.120 Rubber, Plastic and Cable Making Industry (Consolidated) Award 1983, Re (1989) 31 IR 35 .… 6.18, 6.20 Rubel Bronze and Metal Company Limited and Vos, Re [1918] 1 KB 315 .… 8.37, 8.41, 8.44, 8.49, 10.2, 10.25, 10.44 Ruddock v Vadaris (2001) 110 FCR 491; 183 ALR 1 .… 11.30 Rumboll v Nunnery Colliery Co (1899) 80 LR 42 .… 10.19 Run Corp Ltd v McGrath Ltd [2007] FCA 1669 .… 16.22 Rundell v Bedford (1998) 144 FLR 443; 28 ACSR 66 .… 3.34, 6.33, 13.23

Runnalls v Richards & Osborne Ltd [1973] ICR 225 .… 6.14 Russell v Trustees of the Roman Catholic Church, Archdiocese of Sydney (2007) 69 NSWLR 198; 167 IR 121; [2007] NSWSC 104 .… 1.1, 7.12, 8.13, 8.15, 8.16, 8.18, 8.20, 8.22, 8.27, 8.30, 8.31, 8.33, 11.24, 11.78, 14.77, 14.87, 14.94, 14.115 — v — (2008) 72 NSWLR 559; 176 IR 82; [2008] NSWCA 217 .… 1.1, 7.12, 8.13, 8.15, 8.16, 8.18, 8.20, 8.27, 8.30, 8.31, 8.33, 11.24, 11.55, 11.78, 14.77, 14.87, 14.94, 14.115 Russell & Co v Austin Fryers (1909) 25 TLR 414 .… 6.43 Russian v Woolworths (SA) Pty Ltd (1995) 64 IR 169 .… 8.13 Russian Commercial Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 AC 438 .… 15.93, 15.102 RW Jaksh and Associates v Hawks [2005] VSCA 307 .… 3.5, 10.51, 10.53, 10.87 Ryan v Commonwealth (1936) 57 CLR 136 .… 14.46, 14.47, 14.49, 14.60, 14.125 — v Metropolitan Transit Authority (1988) 30 AILR .… 15.85 — v Mutual Tontine Westminster Chambers Association [1893] 1 Ch 116 .… 15.2, 15.8, 15.17, 15.57, 15.66 — v Textile Clothing and Footwear Union of Australia [1996] 2 VR 235 .… 3.6, 3.34, 3.35, 3.38, 3.44, 3.48, 3.50, 3.51, 3.71, 3.73, 5.38, 5.63, 5.67, 5.69, 5.72, 5.74, 5.95, 5.102, 5.105, 5.106, 5.107, 5.111, 5.112, 13.8, 13.22 Ryde-Eastwood Leagues Club Ltd v Taylor (1994) 56 IR 385 .… 3.32 Ryder v Foley (1906) 4 CLR 422 .… 11.30, 14.36 — v Frohlich [2004] NSWCA 472 .… 10.94, 10.98, 15.54 Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603; [2007] NSWCA 65 .… 2.31, 4.20, 5.20, 5.21

S

Saad v TWT Ltd (NSWSC, Ireland J, 200112/91, 19 May 1995, unreported) . … 4.35 — v — [1998] NSWSC 282 .… 4.35, 11.5, 14.110 — v — [1998] NSWCA 199 .… 5.7, 5.8 Saddington v Building Workers Industrial Union of Australia (1993) 49 IR 323 .… 6.17, 14.110, 14.112, 14.123, 14.125 Sadler v Henlock (1855) 4 E & B 570; 119 ER 209 .… 1.44 — v Imperial Life Assurance Co [1988] IRLR 388 .… 3.37, 16.20 Sagar v Ridehlagh & Son Ltd [1931] 1 Ch 310; [1930] All ER Rep 288 .… 5.69, 5.70, 5.72, 9.50 Said v Butt [1920] 3 KB 497 .… 3.85 St John v TNT Canada Inc (1991) 56 BCLR (2d) 311 .… 12.27, 12.33 Saira v Northern Territory University (1992) 109 FLR 46 .… 15.22, 15.108 Salemi v MacKellar (1977) 137 CLR 396 .… 9.61, 11.34 — v Tullett Prebon (Aust) Pty Ltd [2010] NSWCA 150 .… 7.12 Sallehpour v Frontier Software Pty Ltd (2005) 139 IR 457; [2005] FCA 247 . … 8.7, 12.17 Salomon v Brownfield (1896) 12 TLR 239 .… 10.75 Salt v Power Plant Company Ltd [1936] 3 All ER 322 .… 11.22 Saltman Engineering Co Ltd v Campbell Engineering Co Ltd [1963] 3 All ER 413 .… 7.118, 7.127 Salton v New Beetson Cycle Company [1899] 1 Ch 775 .… 9.27, 9.33 Salvesen v Simons [1994] ICR 539 .… 4.24 Sammartino v Mayne Nickless (2000) 98 IR 168 .… 2.20 San Sebastian Pty Ltd v Minister administering the Environmental Planning and Assessment Act 1979 (1986) 162 CLR 340; 68 ALR 161 .… 4.38, 14.34 Sanders v Ernest A Neale Ltd [1974] ICR 565 .… 10.2

— v Parry [1967] 1 WLR 753; 2 All ER 803 .… 7.39, 7.58, 7.59, 7.66, 7.81, 14.15 — v Snell (1997) 73 FCR 569 .… 14.16 — v — (1998) 196 CLR 329; 157 ALR 491 .… 7.84, 11.72, 11.75, 11.77, 11.78, 14.16, 14.105 — v — [2000] NFSC 5 .… 14.16 Sanderson Computers Pty Ltd v Urica Library Systems BV (1998) 44 NSWLR 73 .… 15.102 Sankey v Whitlam (1978) 142 CLR 1; 21 ALR 505 .… 7.131, 15.91 Sargent v ASL Developments Ltd (1974) 131 CLR 634; 4 ALR 257 .… 3.5, 6.47, 10.73, 10.77, 10.78, 10.79, 10.90, 10.94, 10.103, 11.68 Sarker v South Tees Acute Hospitals NHS Trust [1997] IRLR 328 .… 3.17 Savage v British India Steam Navigation Co Ltd (1930) 46 TLR 294 .… 7.28 — v Lunn (NSWCA, Handley, Sheller JJA and Sheppard AJA, 9 March 1998, unreported) .… 15.62 Scaffidi v Perpetual Trustees Ltd [2011] WASCA 159 .… 6.50 Scally v Southern Health and Social Services Board [1992] 1 AC 294; [1992] 4 All ER 563 .… 5.5, 5.36, 5.48, 5.50, 5.51, 5.61, 8.13, 8.30 Scanlan’s New Neon Pty Ltd v Tooheys Ltd (1943) 67 CLR 169 .… 12.3, 12.9 Scarr v Goodyear & Sons Limited [1975] IRLR 166 .… 12.19, 12.47 Scerri v Cahill (1995) 14 NSWCCR 389 .… 2.20 Schaefer v Schuhmann [1972] AC 572; 1 All ER 621 .… 3.41 Schanka v Employment National (Administration) Pty Ltd (1999) 166 ALR 663; 92 IR 464 .… 4.4–4.6 — v — (2000) 97 FCR 186; 170 ALR 42; 96 IR 449 .… 4.3–4.5 — v — (2001) 112 FCR 101; 105 IR 271; [2001] FCA 579 .… 4.5 Scharmann v APIA Club Ltd (1983) 6 IR 157 .… 9.58, 10.16, 10.31, 10.54, 14.45, 14.47

Schebsman, Re; Ex p The Official Receiver [1943] 2 All ER 387 .… 3.63 Schellenberg v Tunnel Holdings Pty Ltd (2000) 200 CLR 121; 170 ALR 594 .… 8.60, 8.65, 8.67, 8.69, 8.70, 8.71, 8.73 Schering Chemicals Ltd v Falkman Ltd [1982] QB 1 .… 7.57, 7.135 Schilling v Kidd Garrett Ltd [1977] 1 NZLR 243 .… 7.30, 7.66, 7.67 Schindler Lifts Australia Pty Ltd v Debelak (1989) 89 ALR 275 .… 7.49, 7.75, 7.81, 7.84, 7.86, 15.130, 15.136, 16.22, 16.48 Schmohl v Commonwealth (1983) 49 ACTR 24 .… 9.61, 15.112 Scorer v Seymour-Johns [1966] 3 All ER 347 .… 16.34, 16.35 Scott v Commonwealth of Australia (1982) 41 ALR 498 .… 11.72, 14.101, 14.102, 14.108, 14.113, 14.115 — v Davis (2000) 204 CLR 333; 175 ALR 217 .… 1.44, 3.64, 3.70, 3.82, 3.83, 8.63 — v Executors of AE Merchant (1969) 4 ITR 319 .… 6.25 — v Federal Commissioner of Taxation (1966) 40 ALJR 265 .… 2.25 — v Jess (1984) 3 FCR 263 .… 7.75 Scruples Imports Pty Ltd v Crabtree & Evelyn Pty Ltd (1983) 1 IPR 315 .… 7.118, 11.81 Sea Acres Rainforest Centre Pty Ltd v State of New South Wales (2001) 109 IR 56 .… 15.41 Seager v Copydex Ltd [1967] 2 All ER 415 .… 7.129 — v — (No 2) [1969] 1 WLR 809; 2 All ER 718 .… 15.90 Sea-Land Service Inc v Cheong Fook Chee Vincent [1994] 3 SLR 6 .… 6.26, 6.28, 6.33, 6.34 Sealey v Avon Aluminium Co Ltd [1978] IRLR 285 .… 11.8, 11.68 Seaman’s Union v Adelaide Steamship Co Ltd (1976) 46 FLR 444 .… 5.23 Seamen’s Union of Australia v Utah Development Co (1978) 144 CLR 120; 22 ALR 291 .… 6.45, 11.4

Sear v Invocare Australia Pty Ltd [2007] WASC 30 .… 5.65 Secretary of State for Employment v Associated Society of Locomotive Engineers and Firemen (No 2) [1972] 2 QB 455; 2 All ER 949 .… 5.40, 5.44, 7.5, 7.12, 7.13, 7.63, 8.33 Secretary of State for Trade and Industry v Bottrill [2000] 1 All ER 915; [1999] ICR 592 .… 2.21, 2.34 Secretary of State of Employment v Associated Society of Locomotive Engineers and Firemen (No 2) [1972] 2 QB 455; 2 All ER 949 .… 9.24 Secton Pty Ltd v Delawood Pty Ltd (1991) 21 IPR 136 .… 5.49, 7.113, 7.119, 7.125, 7.128, 7.129, 7.135 Secured Income Real Estate (Aust) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596; 26 ALR 567 .… 5.21, 5.22, 5.48, 5.57, 8.33 Securities and Exchange Commission v Chenery Corporation (1943) 318 US 80 .… 7.34 Sellars v Adelaide Petroleum NL (1994) 179 CLR 332; 120 ALR 16 .… 14.53, 14.54, 14.58 Sellers v London County Newspapers [1951] 1 KB 784 .… 10.75 Semtex Ltd v Gladstone [1954] 2 All ER 206 .… 7.26 Serventi v John Holland Group Pty Ltd [2006] FCA 1049 .… 10.46 Service Station Association v Berg Bennett & Associates Pty Ltd (1993) 45 FCR 84; (1993) 117 ALR 393 .… 8.32, 10.20, 11.25 Seven Network (Operations) Ltd v Communications, Electric, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) (2001) 109 FCR 378; 184 ALR 65; 106 IR 404 .… 4.8 — v Warburton (No 2) [2011] NSWSC 386 .… 3.51, 6.16, 8.48, 15.34, 16.7, 16.13, 16.19, 16.22, 16.27, 16.32, 16.33 Seymour v Stawell Timber Industries Pty Ltd (1985) 9 FCR 241; (1985) 70 ALR 391; 13 IR 289 .… 5.36, 5.37, 5.40, 5.41, 13.17, 14.38 SG&R Valuation Services Co v Boudrais [2008] IRLR 770 .… 8.38, 8.41, 8.44, 8.47, 8.53, 8.55

Sgobino v State of South Australia (1987) 46 SASR 292 .… 2.11, 2.15, 2.17, 2.18, 2.19, 3.33 Shahid v Australasian College of Dermatologists (2008) 168 FCR 46; 248 ALR 267 .… 3.40 Shallcross v Oldham (1862) 2 J & H 609; 70 ER 1202 .… 7.52 Shanahan v Australian Industrial Relations Commission (No 2) (2006) 160 IR 386 .… 10.19 Shand v Ball [1936] AR (NSW) 77 .… 2.9, 2.41 Sharjade Pty Limited v Commonwealth [2009] NSWCA 373 .… 10.104 Sharp v Hainsworth (1862) 3 B & S 139; 122 ER 53 .… 9.50 Sharpe, Re; Ex p Donnelly (1998) 80 FCR 536 .… 13.27 Sharrment Pty Ltd v Official Trustee in Bankruptcy (1988) 82 ALR 530; 18 FCR 449 .… 2.25, 2.31, 5.17 Shaw v Bindaree Beef Pty Ltd [2007] NSWCA 125 .… 2.46 — v Greenwich Anesthesiology Associates PC, 137 F Supp 2d 48 (2001) .… 3.18 — v State of New South Wales [2012] NSWCA 102 .… 8.13, 8.14, 14.69, 14.71, 14.75, 14.77, 14.87, 14.88, 14.89 Shearing Contractors Association of Australia v Kirby (1983) 6 IR 283 .… 2.35 Sheet Metal Components Ltd v Plumbridge [1974] ICR 373 .… 6.20, 6.25, 6.48, 10.90 Sheldrick v WT Partnership (Aust) Pty Ltd (1998) 89 IR 206; [1998] FCA 1794 .… 10.47, 10.53, 14.80 — v — (1999) 96 IR 202; [1999] FCA 843 .… 10.47, 10.53, 14.80 Shell UK Ltd v Lostock Garage Ltd [1976] 1 WLR 1187 .… 16.15 Sheller by Sheller v Frank’s Nursery & Crafts, 957 F Supp 150 (1997) .… 3.8 Shenton v Smith [1895] AC 229 .… 11.30 Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359 .… 7.62,

8.18, 8.33, 10.86, 10.87 Shepherd Homes Ltd v Sandham [1971] 1 Ch 340 .… 15.89 Shepherds Investments Ltd v Walters [2007] IRLR 110; [2006] EWHC 836 . … 7.20, 7.34, 7.49, 7.88, 7.89 Sherk v Horwitz [1972] OR 451 .… 16.8 Sherman, Re (1915) 32 TLR 231 .… 13.27 Shevill v Builders Licensing Board (1982) 149 CLR 620; 42 ALR 305 .… 10.15, 10.16, 10.21, 10.57 Shields Furniture Ltd v Goff [1973] ICR 187; 2 All ER 653 .… 6.19, 6.20, 6.23, 6.25, 6.48, 10.90 Shindler v Northern Raincoat Co Ltd [1960] 1 WLR 1038; [1960] 2 All ER 239 .… 2.37, 10.8, 10.66, 10.68, 14.37, 14.101, 14.110, 14.112, 14.113 Shipton v Cardiff Corporation (1918) 67 LJKB 51 .… 3.26, 3.34 Shipton Anderson & Co v Weil Bros & Co [1912] 1 KB 574 .… 9.36 Shipway v Broadwood [1899] 1 QB 369 .… 7.98 Shirlaw v Southern Foundries (1926) Ltd [1939] 2 KB 206; 2 All ER 113 .… 5.46 Shirreff v Elazac Pty Ltd [2010] VSC 381 .… 2.32 Shogun Finance Ltd v Hudson [2004] 1 AC 919; 1 All ER 215 .… 4.18, 5.25 Shop, Distributive & Allied Employees’ Association v Karellas Investments Pty Ltd (2008) 166 FCR 562; 247 ALR 537; 171 IR 439 .… 4.34 — v Woolworths SA Pty Ltd [2011] FCAFC 67 .… 3.7, 5.11 — (NSW) v Norman Ross Homeworks Pty Ltd (1989) 30 IR 302 .… 13.34 Short v FW Hercus Pty Ltd (1993) 46 IR 128 .… 13.6 — v Poole Corporation [1926] Ch 66 .… 15.111 Shorten v Australian Meat Holdings (1996) 70 IR 360 .… 14.16 Shove v Downs Surgical Plc [1984] 1 All ER 7 .… 10.49, 14.47, 14.77, 14.92 Siagian v Sanel Pty Ltd (1994) 122 ALR 333; (1994) 54 IR 185 .… 10.2,

11.65, 11.72, 11.75, 11.76 Sibson v United Kingdom (1994) 17 EHRR 193 .… 6.20 Siddell v Vickers (1892) 9 RPC 152 .… 15.128 Silberschneider v MRSA Earthmoving Pty Ltd (1989) 30 AILR 65 .… 6.20 Silver v Dome Resources NL (2007) 62 ACSR 539; [2007] NSWSC 455 .… 2.37, 6.26, 6.34, 14.66, 15.44 — v — (2008) 72 NSWLR 693; [2008] NSWCA 322 .… 2.37, 6.26, 6.34, 14.66, 15.44 Silverbrook Research Pty Ltd v Lindley [2010] NSWCA 357 .… 3.52, 8.29, 8.32, 14.52, 14.53, 14.57, 14.96, 14.118, 14.119, 14.120, 14.130 Silvey v Pendragon Plc [2001] IRLR 685; [2001] EWCA Civ 784 .… 14.23, 14.46 Sim v Rotherham Metropolitan Borough Council [1987] Ch 216; [1986] 3 All ER 387 .… 5.40, 6.9, 8.33, 9.32, 9.33, 9.37, 9.50, 9.52 Simar Transit Mixers Pty Ltd v Baryczka (1998) 28 ACSR 238 .… 7.35, 7.51 Simmons v Heath Laundry Co [1910] 1 KB 543 .… 1.44 — v Hoover [1977] 1 QB 284 .… 7.3, 9.59 Simmons Limited v Hay (1964) 81 WN (Pt 1) (NSW) 358 .… 12.1, 12.9, 12.11, 12.31, 12.34, 12.49, 12.54 Simonius Vischer & Co v Holt & Thompson [1979] 2 NSWLR 322 .… 5.50, 14.17, 14.115 Sinclair v Anthony Smith & Associates Pty Ltd (IRCA, 1 December 1995, unreported) .… 11.79, 15.49 — v — [1995] IRCA 663 .… 14.90 Sinclair, Scott & Company Ltd v Naughton (1929) 43 CLR 310 .… 3.53 Singh v British Columbia Hydro & Power Authority (2001) 12 CCEL (3d) 214 .… 11.21 — v British Steel Corp [1974] IRLR 131 .… 3.73, 5.111 — v Commonwealth (2004) 222 CLR 322; 209 ALR 355 .… 5.10

Sipad Holding ddpo v Popovic (1995) 19 ACSR 108 .… 13.15, 13.17, 13.18 Sir WC Leng & Co Ltd v Andrews [1909] 1 Ch 763 .… 3.65, 16.8, 16.16, 16.32, 16.33, 16.34, 16.38, 16.39 Sita Qld Pty Ltd v State of Queensland (2000) 102 IR 238; [2000] FCA 1077 .… 3.83 Siu Yin Kwan v Eastern Insurance Co Ltd [1994] 2 AC 199; 1 All ER 213 . … 3.84, 3.85 Skeate v Beale (1841) 11 Ad & E 983; 113 ER 688 .… 4.5 Skelton v Collins (1966) 115 CLR 94 .… 14.7 Slattery v Public Service Board [1983] 3 NSWLR 41; (1983) 6 IR 333 .… 15.95 Slevin v Associated Insurance Brokers of Australia (Qld) Pty Ltd [1996] QCA 18 .… 15.49, 15.75, 16.48 Slifka v JW Sanders Pty Limited (1995) 67 IR 316 .… 14.16, 14.30 Slingsby’s case (1680) 3 Swanst 178; 36 ER 821 .… 5.91, 9.14, 9.60 Slivak v Lurgi (Australia) Pty Ltd (2001) 205 CLR 304; 177 ALR 585 .… 8.68 Sloan v Union Oil Co of Canada (1955) 16 WWR 225 .… 6.26, 6.33 Smartworld Enterprises Pty Ltd v Nyman (2008) 173 IR 93 .… 3.53, 3.54 Smith v Austin Lifts Ltd [1959] 1 All ER 81 .… 8.72 — v Broken Hill Pty Co Ltd (1957) 97 CLR 337 .… 8.65, 8.67, 8.70 — v Brown Bayley Steels Limited (1973) 8 ITR 606 .… 3.13 — v Chevelle Developments Pty Ltd (2005) NSWIRComm 109 .… 13.29 — v Deputy Commissioner of Taxation (1996) 71 FCR 150; 22 ACSR 331 . … 13.16 — v Director-General of School Education (1993) 31 NSWLR 349; 51 IR 204 .… 10.7 — v Federal Commissioner of Taxation (1988) 164 CLR 513; 74 ALR 411 . … 4.40

— v McNally [1912] 1 Ch 816 .… 15.22, 15.111 — v Moore Paragon Australia Ltd (2004) 130 IR 446 .… 12.18, 12.19, 12.30 — v Stages [1989] 2 AC 928 .… 8.64 — v Union of Icelandic Fish Producers Ltd (2004) NSSC 145 .… 3.19 — v William Charlick Ltd (1924) 34 CLR 38 .… 4.5, 4.7 — v Yarnold [1969] 2 NSWR 410 .… 3.69 Smith Kline & French Laboratories (Aust) Ltd v Secretary, Department of Community Services and Health (1990) 22 FCR 73 .… 7.124, 7.129, 7.130, 7.132, 7.133 — v — (1991) 28 FCR 291 .… 7.58, 7.112, 7.124, 7.129, 7.130, 7.132, 7.133 Smoker v London Fire and Civil Defence Authority [1991] ICR 449 .… 14.121 Smorgon v Australia & New Zealand Banking Group Ltd (1976) 134 CLR 475 .… 7.131 Snook v London and West Riding Investments Ltd [1967] 2 QB 786 .… 2.25 Soar v Ashwell [1893] 2 QB 390 .… 7.52, 15.71 Solectron Scotland Ltd v Roper [2004] IRLR 4 .… 5.71, 5.76 Solle v Butcher [1950] 1 KB 671 .… 4.15, 4.16, 4.18, 4.19 Sorrell v Kara Kar Holdings Pty Ltd [2010] NSWSC 1315 .… 14.47 Sothern v Franks Charlesly & Co [1981] IRLR 278 .… 11.12 Sotiros Shipping Inc v Sameiet Solholt (‘The Solhort’) [1981] 2 Lloyd’s Rep 574 .… 14.110 — v — [1983] 1 Lloyd’s Rep 605 .… 14.110 South Australia v Commonwealth (1962) 108 CLR 130 .… 3.44 — v Day (2000) 78 SASR 270; [2000] SASC 451 .… 3.46, 10.73 — v McDonald (2009) 104 SASR 344; 185 IR 45; [2009] SASC 219 .… 5.49, 8.22, 14.79 — v Marcus Clark (1996) 19 ACSR 606 .… 7.47, 7.49

South Maitland Pty Ltd v James (1943) 67 CLR 496 .… 8.64 South Staffordshire Water Company v Sharman [1896] 2 QB 44 .… 7.54 Southern Cross Financial Group (Newcastle) Pty Ltd v Rodrigues (2005) 66 IPR 166; [2005] NSWSC 621 .… 3.53, 3.59, 7.127, 16.49 Southern Cross Healthcare Co Ltd v Perkins [2011] IRLR 247 .… 5.59 Southern Foundries (1926) Ltd v Shirlaw [1940] AC 701; 2 All ER 445 .… 2.34, 2.37, 2.38, 5.1, 5.48, 8.33, 9.53, 14.37, 15.15, 15.18 Southern Real Estate Pty Ltd v Dellow (2003) 87 SASR 1 .… 7.88 Southern Resources Ltd v Residues Treatment and Trading Co Ltd (1990) 56 SASR 455 .… 7.51 Southway Group Ltd v Wolff (1991) 57 BLR 33 .… 2.3, 6.42, 9.53, 9.54 Sovereign House Security Services Ltd v Savage [1989] IRLR 115 .… 11.12 Spain v Arnott (1817) 2 Stark 256; 171 ER 638 .… 1.43, 7.14, 9.25, 9.31, 9.34, 9.49, 10.1 Spark v Generex Pharmaceuticals Inc (1999) 48 CCEL (2d) 272 .… 3.48 Speake v Hughes [1904] 1 KB 138 .… 14.19 Speck v Phillips (1839) 5 M W 279; 151 ER 119 .… 7.137, 11.59 Speed v Thomas Swift & Co Ltd [1943] All ER 539 .… 8.70 Speed Seal Products v Paddington [1986] 1 All ER 91 .… 7.135 Spencer v Dowling [1997] 2 VR 127 .… 10.35, 10.51 — v Marchington [1988] IRLR 392 .… 11.78, 15.53, 16.8, 16.35 Spencer Industries Pty Ltd v Collins (2003) 58 IPR 425; [2003] FCA 542 .… 6.11, 7.7, 7.104, 7.106, 7.107 Sperandio v Lynch (2006) 160 IR 360; [2006] FCA 1648 .… 3.17 — v — (No 2) [2006] FCA 183 .… 14.99 Spiler v Wallis Ltd [1975] IRLR 362 .… 7.139, 7.141 Spincode Pty Ltd v Look Software Pty Ltd (2001) 4 VR 501; [2001] VSCA 248 .… 7.91

Spotless Group Ltd v Blanco Catering Pty Ltd [2011] FCA 979 .… 7.87 Spring v Guardian Assurance Plc [1993] ICR 412; 2 All ER 273 .… 16.52, 16.53 — v — [1994] 3 All ER 129 .… 14.20, 16.50, 16.52, 16.53, 16.54, 16.55, 16.56 — v — [1995] 2 AC 296 .… 5.51, 14.20, 16.50, 16.52, 16.53, 16.54, 16.55, 16.56 — v National Amalgamated Stevedores and Dockers Society [1956] 2 All ER 221 .… 5.63 Squires v Flight Stewards Association of Australia (1982) 2 IR 155 .… 8.39 SST Consulting Services Pty Ltd v Rieson (2006) 225 CLR 516; 228 ALR 417 .… 3.37, 16.20, 16.23 Stacks/Taree Pty Ltd v Marshall (No 2) [2010] NSWSC 77 .… 16.32 Staff Aid Services v Bianchi (2004) 133 IR 29 .… 2.27 Staffordshire County Council v Secretary of State for Employment [1987] ICR 956 .… 11.81 State Government Insurance Office (Qld) v Rees (1979) 144 CLR 549; 26 ALR 341 .… 13.23 State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (SC(NSW), O’Keffe CJ in Eq, 14 September 1994, unreported) .… 7.34 — v Heath Outdoor Pty Ltd 91986) 7 NSWLR 170 .… 5.13 State Superannuation Board v Criminale (1988) 26 IR 13 .… 9.28, 9.29 — v — (1989) 88 ALR 1; 29 IR 111 .… 9.28, 9.29 Stapleton-Bretherton, Re; Weld Blundell v Stapleton-Bretherton [1941] 3 All ER 5 .… 3.62 Stapp v Shaftesburt Society [1982] IRLR 326 .… 14.45 Starr v Douglas (1994) 35 NSWLR 133 .… 3.8, 3.24 State of New South Wales v Austeel Pty Ltd [2003] NSWCA 392 .… 11.17 — v Lepore (2003) 212 CLR 511; 195 ALR 412 .… 8.61, 8.62, 8.63, 8.64

— v Paige (2002) 60 NSWLR 371; 115 IR 283 .… 11.3, 11.4, 11.6, 11.11, 11.12, 11.68, 11.69, 14.41, 14.72, 14.77, 14.79, 14.83, 14.94, 16.54 State of Queensland v Australian Telecommunications Commission (1985) 59 ALR 243 .… 15.89 — v Whiteman [2006] QSC 325 .… 2.52 State of Victoria v Sutton (1998) 198 CLR 291 .… 10.78 State Transport Authority v Apex Quarries Ltd [1988] VR 187 .… 15.41 Stavers v Curling (1836) 3 Bing (NC) 355; 132 ER 447 .… 9.28, 9.38 Steele v SNC Inc (1992) 41 CCEL 257 .… 5.19 — v Tardiani (1945) 72 CLR 386 .… 9.27, 9.28, 9.37, 9.41 Stenhouse Australia Ltd v Phillips [1974] AC 391; [1973] 2 NSWLR 691 .… 16.16, 16.25, 16.33, 16.42, 16.44 — v — .… 16.16, 16.25, 16.33, 16.42, 16.44 Stephens v Avery [1988] Ch 449 .… 7.128 Stephenson v Houlditch (1704) 2 Vern 491; 23 ER 915 .… 1.43 Stephenson Jordan & Harrison Limited v MacDonald & Evans (1951) 64 RPC 10 .… 7.110 Sterling Commerce (Australia) Pty Ltd v Iliff [2008] FCA 702 .… 9.9 Sterling Engineering Co Ltd v Patchett (No 1) [1955] AC 534 .… 5.49, 7.101, 7.102, 7.103, 7.105, 7.108, 7.109, 15.137 Stevens v Benning (1854) 1 K & J 168; 69 ER 415 .… 12.25, 13.31 — v Brodribb Sawmilling Co Proprietary Limited (1986) 160 CLR 16; 63 ALR 513 .… 2.5, 2.6, 2.8–2.11, 2.13–2.17, 2.19, 2.20, 2.24, 2.31, 8.61, 8.65, 8.67, 8.70 Stevenson v United Road Transport Union [1977] 2 All ER 941; [1977] ICR 893 .… 15.11, 15.21, 15.22, 15.39, 15.94, 15.96, 15.97, 15.99, 15.111, 15.112 Stevenson Jordan & Harrison Ltd v Macdonald & Evans [1952] TLR 101 .… 2.1, 2.11

Stewardson Stubbs & Collett Pty Ltd & Bankstown Municipal Council, Re [1965] NSWR 1671 .… 11.17 Stewart v Graig Shipping Limited [1979] ICR 713 .… 5.40 — v Ronalds (2009) 76 NSWLR 99; 259 ALR 86; [2009] NSWCA 277 .… 16.54 Stilk v Myrick (1809) 2 Camp 317; 6 Esp 129; 170 ER 851 .… 3.39, 6.26, 6.28, 6.30, 6.33, 6.34, 6.35, 6.36, 6.49 Stillwell Trucks Pty Ltd v Nectar Brook Investments Pty Ltd (1993) 12 ACSR 334; (1993) 115 ALR 294 .… 3.58 Stimson v Hall (1857) 1 H & N 831; 156 ER 1436 .… 9.51 Stirling v Maitland (1865) 5 B & S 840; 122 ER 1043 .… 14.37 Stocker v Brocklebank (1851) 3 Mac and G 250; 42 ER 257 .… 15.2 — v Wedderburn (1857) 3 K and J 393; 69 ER 1162 .… 15.6, 15.17, 15.55 Stoelwinder v Southern Health Care Network (2000) 177 ALR 501; 97 IR 76 .… 4.35 — v — [2001] FCA 115 .… 3.5, 3.7, 3.19, 7.18, 7.35, 7.38, 14.66 Stoker v Adecco Gemvale Constructions Pty Ltd [2004] NSWCA 449 .… 8.67 Storey v Fulham Steel Works Company (1907) 23 TLR 306 .… 10.33, 12.14, 12.15, 12.18, 12.34 — v — (1907) 24 TLR 89 .… 10.33, 12.11, 12.14, 12.15, 12.18, 12.34 Stork Electrical Pty Ltd v Le Good (1999) 95 IR 1 .… 14.115 Stratton v Illawarra County Council [1979] 2 NSWLR 701 .… 6.6, 6.14 Street v Blay (1831) 2 B & Ad 456; 109 ER 1212 .… 9.50 — v Mountford [1985] AC 809; [1985] 2 All ER 289 .… 2.22, 2.28 Streeter v Telstra Corporation Ltd (2008) 170 IR 1 .… 7.10 Strevens v Lawson Mardon Group Ltd (1997) 29 CCEL (2d) 240 .… 6.42 Strzelecki Holdings Pty Ltd v Cable Sands Pty Ltd [2010] WASCA 222 .…

8.31 Stuart Peters Ltd v Bell [2010] 1 All ER 775; [2009] ICR 1556 .… 14.117 Stubbe v Jensen [1997] 2 VR 439 .… 8.57 Stubbs v Holywell Railway Company (1867) LR 2 Exch 311 .… 12.24, 12.49, 12.50, 13.33, 13.34 — v Lakos (1994) 56 IR 110 .… 2.41 Sturesteps v McGrath (2010) 242 FLR 122; 79 ACSR 253; [2010] NSWSC 896 .… 13.22 Sudbrook Trading Estate Ltd v Eggleton [1983] 1 AC 444; [1982] 3 All ER 1 .… 3.60 Sullivan v Moody (2001) 207 CLR 562; 183 ALR 404 .… 16.54 — v Sanders (2000) 77 SASR 419; [2000] SASC 273 .… 4.26, 7.133, 7.134, 15.134, 15.135 Summers v Commonwealth (1918) 25 CLR 144 .… 5.71, 5.72, 10.31, 11.80 — v — (1919) 26 CLR 180 .… 5.71, 5.72 Sunbird Plaza Pty Ltd v Maloney (1988) 166 CLR 245; 77 ALR 205 .… 10.33, 10.51, 10.67, 10.87, 11.12 Super Servant Two, The [1990] 1 Lloyd’s LR 1 .… 12.1, 12.9, 12.18, 12.36, 12.37 Superlux Ltd v Plaisted [1958] CLY 195 .… 7.26 Surveys & Mining Ltd v Morrison [1969] Qd R 470 .… 7.58, 7.75, 7.83, 7.129, 15.69 Sutcliffe v Hawker Siddley Aviation Ltd [1973] ICR 560 .… 5.71, 6.18 Sutherland Shire Council v Finch (1969) 123 CLR 657 .… 11.32 Suttling v Director-General of Education (1985) 3 NSWLR 427 .… 6.18, 11.29, 11.30, 14.41 Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 .… 10.60 Svanosio v McNamara (1956) 96 CLR 186 .… 4.15–4.17, 4.19

SW Strange Ltd v Mann [1965] 1 WLR 629; 1 All ER 1069 .… 6.14, 6.38, 6.39, 11.52, 11.57 Swain v Waverley Municipal Council (2005) 220 CLR 517; 213 ALR 249 . … 8.67 — v West (Butchers) Limited [1936] 3 All ER 261 .… 3.39, 6.26, 6.27, 6.28, 7.21 Sweeney v Boylan Nominees Pty Ltd (2006) 226 CLR 161; 227 ALR 46 .… 2.3, 2.5, 2.6, 2.9, 2.11, 2.18, 2.19 Sweet & Maxwell Ltd v Universal News Services Ltd [1964] 2 QB 699; 3 All ER 30 .… 3.56, 10.30, 10.31 SWF Joists and Industrial Equipment Pty Ltd v Polli (1996) 67 IR 356 .… 15.134 Swift Placements Pty Ltd v WorkCover Authority (NSW) (2000) 96 IR 69 . … 2.6, 2.50, 2.51, 3.33 Sybron Corporation v Rochem Ltd [1983] ICR 801 .… 7.18, 7.20, 7.21 — v — [1984] Ch 112 .… 7.18, 7.20, 7.21 Sydney Harbour Tunnel Co Ltd v Building & Construction Industry Long Service Payments Corp (1989) 31 IR 193 .… 15.95 Sykes v Dixon (1839) 9 Ad & E 693; 112 ER 1374 .… 3.31, 8.38, 8.46 System Floors (UK) Ltd v Daniel [1982] ICR 54 .… 5.4 Szarfer v Chodos (1986) 27 DLR (4th) 388 .… 15.115

T Tabor v Hoffman (1889) 118 NY 30 .… 7.127 Tadd v Eastwood [1983] IRLR 320 .… 5.44 Talbot v General Television Corp Pty Ltd [1980] VR 224 .… 7.129 — v NRMA Ltd (2000) 50 NSWLR 300 .… 8.34 Takacs v Barclays Services Jersey Ltd [2006] IRLR 877 .… 8.15, 8.29, 11.27 Tallerman & Co Limited v Nathan’s Merchandise (Vic) Pty Ltd (1957) 98

CLR 93 .… 3.22, 6.39 Tame v New South Wales (2002) 211 CLR 317; 191 ALR 449 .… 8.57, 8.66, 14.77 Tanaka v Tokyo Network Computing Pty Ltd [2003] NSWSC 1114 .… 6.17, 10.66 — v — [2004] NSWCA 263 .… 10.66 Tang Man Sit v Capacious Investments Ltd [1996] AC 514; 1 All ER 193 .… 15.114 Tanner v Maynes (1985) 7 FCR 432 .… 7.75 Target Holdings Ltd v Redferns [1996] 1 AC 421; [1995] 3 All ER 785 .… 15.116 Tarjan Construction Co Pty, Re [1964] NSWR 1054 .… 2.34 Tarnesby v Kensington and Chelsea and Westminster Area Health Authority (Teaching) [1981] IRLR 369 .… 12.5, 12.35 Taske v Occupational and Medical Innovations Ltd (2007) 167 IR 298; [2007] QSC 118 .… 11.55 Tasker v Shepherd (1861) 6 H & N 575; 158 ER 237 .… 12.11, 12.25, 13.30 Tasman Capital Pty Ltd v Sinclair (2008) 75 NSWLR 1; [2008] NSWCA 248 .… 14.99, 14.108 Tasmania Development and Resources v Martin (2000) 97 IR 66; [2000] FCA 414 .… 8.29, 11.26, 14.53, 14.58 Tasmanian Steamers Pty Ltd v Lang (1938) 60 CLR 111 .… 9.15 Taudevin v Egis Consulting Australia Pty Ltd (No 1) (2001) 131 IR 124 .… 3.68 Taupo Totara Timber Co Ltd v Rowe [1977] 3 All ER 123 .… 11.4, 14.106 — v — [1978] AC 537 .… 11.4, 14.106 Taylor v Brewer (1813) 1 M & S 290; 105 ER 108 .… 3.57 — v Caldwell (1863) 3 B & S 826; 122 ER 309 .… 12.2, 12.12 — v Davies [1920] AC 636 .… 15.71

— v Garnett (1892) 8 TLR 647 .… 11.43 — v Johnson (1983) 151 CLR 422; 45 ALR 265 .… 4.17–4.19 — v Laird (1856) 1 H & N 266; 156 ER 1203; 25 LJ Ex 329 .… 3.13, 9.28, 9.49, 10.74 — v Metro Velda Pty Ltd (AIRC, Williams SDP, Leary DP and Eames C, Print PR909167, 21 September 2001) .… 12.30 — v National Union of Seamen [1967] 1 WLR 532; 1 All ER 767 .… 15.22, 15.98, 15.99 — v Raglan [1981] 2 NSWLR 117 .… 10.92 — v Rowan (1835) 7 Car & P 70; 173 ER 31 .… 16.51 — v Smith (1926) 38 CLR 48 .… 3.79 Tayside Regional Council v McIntosh [1982] IRLR 272 .… 5.19 TC Whittle Pty Ltd v T & G Mutual Life Society Ltd (1977) 18 ALR 431 .… 5.3 TCN Channel 9 Pty Ltd v Hayden Enterprises Pty Ltd (1989) 16 NSWLR 130 .… 14.49, 14.99, 14.100 TD Preece and Co Pty Ltd v Industrial Court of New South Wales (2008) 177 IR 172; [2008] NSWCA 285 .… 11.78 Teachers’ Quality Education Case (1980) JAS CR B 178 .… 9.19 Teen Ranch Pty Ltd v Brown (1995) 87 IR 308 .… 3.29, 3.41, 3.44 Temple v Prescott (1773) Cal Mag Cas 14 .… 1.43, 7.17, 7.137, 10.54 Termination, Change and Redundancy Case (the TCR case) (1984) 8 IR 34 . … 11.36, 13.3, 13.4, 13.5, 13.9, 13.12 Termination, Change and Redundancy Case - Supplementary Decision (1984) 9 IR 115 .… 11.36, 13.3, 13.4, 13.9, 13.12 Terrapin Limited v Builders’ Supply Company (Hayes) Limited [1960] RPC 128 .… 15.90 — v — [1967] RPC 375 .… 15.90 Terrex Resources NL v Magnet Petroleum Pty Ltd (1988) 98 FLR 328 .…

3.49 Terry v Variety Theatres Controlling Company Limited (1928) 44 TLR 242 . … 12.14 Tesco Stores Ltd v Pook [2004] IRLR 618 .… 7.20, 7.95 Textile Clothing and Footwear Union of Australia v Givoni Pty Ltd (2002) 121 IR 250; [2002] FCA 1406 .… 5.85, 5.88, 5.89, 14.31 Textile Footwear and Clothing Union of Australia v Bellechic Pty Ltd [1998] FCA 1465 .… 2.46, 2.48 TFS Derivatives Limited v Morgan [2005] IRLR 246 .… 8.54, 16.10 Thames Water Facilities v Reynolds [1996] IRLR 186 .… 9.32, 9.34 Thayer v Wadsworth (1837) 19 Pick 349 .… 8.43 Thickbroom v Newcastle Wallsend Coal Company Pty Ltd (1998) 83 IR 193 .… 11.8 Thomas v Farr Plc [2007] ICR 932 .… 7.112 — v John Drake & Co [1971] ITR 146 .… 12.47 — v Lafleche Union Hospital [1991] 5 WWR 209 .… 12.6 — v Thomas (1842) 2 QB 851; 114 ER 330 .… 3.34 — v Westpac Corporation (1995) 62 IR 28 .… 7.141 Thomas & Morgan (United Kingdom) Ltd v Erica Vale Australia Pty Ltd (1995) 31 IPR 335 .… 5.47 Thomas Cowan and Co Ltd v Orme (1960) MLJ 41 .… 16.8 Thomas Marshall (Exports) Ltd v Guinle [1979] Ch 227; [1978] 3 All ER 193 .… 5.49, 7.67, 7.119, 7.124, 7.129, 10.43, 10.60, 16.46 Thompson v ASDA-MFI Group Plc [1988] Ch 241; [1988] 2 All ER 722 .… 5.48, 7.2, 8.33, 10.60, 10.65, 14.35, 14.37 — v Havelock (1808) 1 Camp 527; 170 ER 1045 .… 7.94 — v IGT (Australia) Pty Ltd (2008) 173 IR 395; [2008] FCA 994 .… 7.14, 7.16

— v Park [1944] KB 408 .… 15.76 Thomson v Broadley [2002] QSC 255 .… 7.133, 7.141, 14.88 — v Orica Australia Pt Ltd (2002) 116 IR 186; [2002] FCA 939 .… 5.35, 8.13, 8.24, 8.27 Thorby v Goldberg (1964) 112 CLR 597 .… 3.47, 3.51, 3.52 Thornley v Tilley (1925) 36 CLR 1 .… 5.70 Thorpe v Lochel [2005] WASCA 85 .… 14.80 — v South Australian National Football League (1974) 10 SASR 17 .… 11.45, 11.57, 11.59, 11.60, 14.87, 15.36 Tibaldi Smallgoods v Rinaldi (2008) 172 IR 86; [2008] VSC 112 .… 5.95, 5.102 Timbarra Protection Coalition Inc v Ross Mining NL (1999) 46 NSWLR 55; [1999] NSWCA 8 .… 11.32 Timber Engineering Co Pty Ltd v Anderson [1980] 2 NSWLR 488 .… 7.30, 7.34, 7.44, 7.50, 7.81, 7.82, 15.72, 15.120, 15.130, 15.131, 15.136, 15.137, 15.138, 16.43 Ting v Blanche (1993) 118 ALR 543 .… 4.39, 4.40 Tinn v Hoffmann & Co (1873) 29 LT 271 .… 3.21, 3.23 Titan Group Pty Ltd v Steriline Manufacturing Pty Ltd (1990) 19 IPR 353 .… 15.90 Titmus v Rose [1940] 1 All ER 599 .… 13.30, 13.32 Tito v Waddell (No 2) [1977] Ch 106; 3 All ER 129 .… 3.49, 3.51, 14.54, 15.92 Tiver v Official Trustee in Bankruptcy (2010) 187 FCR 1; 269 ALR 522; [2010] FCA 620 .… 13.27 TNT Australia Pty Ltd v Christie (2003) 65 NSWLR 1 .… 8.73 Tobiassen v Reilly (2009) 178 IR 213; [2009] WASCA 26 .… 2.24, 2.27 Todorovic v Waller (1981) 150 CLR 402; 37 ALR 481 .… 14.65 Tokyo Network Computing Pty Ltd v Tanaka [2004] NSWCA 263 .… 6.17,

10.92 Tolhurst v Associated Portland Cement Manufacturers (1900) Ltd [1902] 2 KB 660 .… 6.40, 6.41, 6.42, 9.53, 9.54 — v — [1903] AC 414 .… 9.53, 9.54 Toll (FGCT) Pty Ltd v Alphapharrm Pty Ltd (2004) 219 CLR 165; 211 ALR 342 .… 3.6, 3.70, 5.28, 5.30 Tom Shaw & Co Ltd v Moss Empires (Limited) (1908) 25 TLR 190 .… 6.43 Tomczynski v JK Millar Ltd [1976] ITR 127 .… 3.13 Tomkins v Martin (1886) 3 TLR 163 .… 11.52 Tomlinson v Dick Evans ‘U’ Drive Ltd [1978] ICR 639 .… 4.24 Tooheys Pty Ltd v Blinkhorn [2008] NSWSC 499 .… 3.12, 3.17, 3.20, 3.22, 3.23, 3.26, 3.51 Toronto-Dominion Bank v Wallace (1983) 41 OR (2d) 161 .… 11.48 Torrenia, The [1983] 2 Lloyd’s Rep 210 .… 12.48 Torrington Manufacturing Co v Smith & Sons (England) Ltd [1966] RPC 285 .… 7.58, 7.129 Tottenham Hotspure Plc, Re [1994] 1 BCLC 655 .… 15.37 Tournier v National Provincial & Union Bank of England [1924] 1 KB 461 . … 7.131 Toussant v Blue Cross & Blue Shield (1980) 408 Mich 579 .… 11.44 Townsend v General Motors-Holden Ltd (1983) 4 IR 358 .… 15.113 Toyota Motor Corporation Australia Ltd v Ken Morgan Motors Pty Ltd [1994] 2 VR 106 .… 3.4, 3.40, 3.49, 3.51 Tradition Australia Pty Ltd v Gunson (2006) 152 IR 395; [2006] NSWSC 298 .… 4.25, 15.18, 15.20, 15.59 Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd (1938) 38 SR (NSW) 632 .… 10.14, 10.16, 10.17 Transco Plc v O’Brien [2002] EWCA Civ 379; [2002] ICR 721 .… 8.15, 8.16, 8.20, 8.26, 8.29

Transfield Construction Pty Ltd v Automotice Food, Metal, Engineering, Printing and Kindred Industries Union [2002] FCA 1413 .… 15.88 Transport Commission v Neale Edwards Pty Ltd (1954) 92 CLR 214 .… 10.53 Transport Workers’ Union v National Dairies Limited (1994) 57 IR 183 .… 11.6 Transport Workers Union of Australia v Glynburn Contractors (Salisbury) Pty Ltd (1990) 34 IR 138 .… 2.8, 2.12, 2.14, 2.15, 2.24, 2.27, 2.49 — v K & S Freighters Pty Ltd [2010] FCA 1225 .… 3.11, 5.30, 5.44, 14.49 Transport Workers’ Union of New South Wales v Post Logistics Australasia Pty Limited (2010) 200 IR 50 .… 13.5 Trawl Industries of Australia Pty Ltd v Effem Foods Pty Ltd (1992) 27 NSWLR 326 .… 3.52 Treacy v Corcoran (1874) IR 8 CL 40 .… 9.33 Trend Management Ltd v Borg (1996) 40 NSWLR 500 .… 8.57, 8.67 Triangle Corp Pty Ltd v Carnsew (1994) 29 IPR 69 .… 7.58, 16.46 Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1987) 8 NSWLR 270 .… 3.79, 3.85 — v — (1988) 165 CLR 107; 80 ALR 574 .… 3.61, 3.62, 3.71, 3.79, 3.85, 5.109, 5.110, 5.112 Trinity v St Peter’s in Dorchester (1763) 1 Black W 443; 96 ER 254 .… 11.42, 11.43 Triplex Safety Glass Company v Scorah [1938] 1 Ch 211; [1937] 4 All ER 693; 55 RPC 21 .… 5.49, 6.11, 7.34, 7.68, 7.101, 7.102, 7.103, 7.106, 7.108, 7.109, 7.119, 15.137, 16.8, 16.38, 16.39 Tristar Steering and Suspension Australia Ltd Certified Agreement 2003, Re (2007) 159 IR 368 .… 4.11 Tropical Traders Ltd v Goonan (1964) 111 CLR 41 .… 3.5, 10.78, 10.90 Trower v Commonwealth (1924) 34 CLR 587 .… 11.30 True v Amalgamated Collieries of WA Ltd (1940) 62 CLR 451 .… 5.37, 5.98

Trustees of the Roman Catholic Church v Ellis (2007) 70 NSWLR 565; [2007] NSWCA 117 .… 3.69 TS & B Retail Systems Pty Ltd v 3Fold Resources Pty Ltd (No 3) (2007) 158 FCR 444; 239 ALR 117; [2007] FCA 151 .… 7.112 Tsakiroglou & Co Limited v Noblee Thorl GmbH [1962] AC 93; [1961] 2 All ER 179 .… 12.9 Tsang v Department of the Chief Minister (1996) 64 IR 321 .… 2.8, 2.9, 2.11, 2.16 TSB Bank Plc v Harris [2000] IRLR 157 .… 8.26, 8.27, 16.52, 16.56 TSC Europe (UK) Ltd v Massey [1999] IRLR 22 .… 16.36 Tuck & Son v Priester (1887) 19 QB 629 .… 7.32 Tucker v Pipeline Authority (1981) 3 IR 120 .… 5.37, 5.97, 5.98, 11.15, 11.22, 11.66, 14.47, 14.62 Tullett Prebon (Australia) Pty Ltd v BGC Brokers LP [2010] EWHC 484 .… 8.14, 8.15, 8.20, 10.104 — v — [2011] IRLR 420 .… 7.88, 10.40, 10.51, 10.104 — v Purcell (2008) 175 IR 414; [2008] NSWSC 852 .… 10.43, 10.66, 15.28, 15.30, 15.31, 15.32, 15.33, 15.34, 15.51, 15.61, 16.12, 16.19, 16.28, 16.36 — v — [2009] NSWSC 1079 .… 3.76, 8.30, 10.28, 10.31, 10.63, 10.66, 14.132 — v — [2010] NSWCA 150 .… 3.76, 8.30 Tunbridge v Linde Material Handling Pty Ltd (1992) 77 IR 115 .… 4.2 Tunnel Holdings v Woolf [1976] ICR 387 .… 11.81 Tunstall v Condon [1980] ICR 786 .… 6.43, 12.25, 13.30 Turner v Australasian Coal and Shale Employee’s Federation (1984) 6 FCR 177; 55 ALR 635; 9 IR 87 .… 3.15, 3.17, 5.72, 5.74, 8.14, 9.55, 10.2, 10.66, 10.83, 11.69, 14.40, 15.17, 15.18, 15.20, 15.38, 15.39, 15.57, 15.58, 15.96, 15.99 — v Bladin (1951) 82 CLR 463 .… 3.49, 15.14

— v Carpet Call (Vic) Pty Ltd (1995) 59 IR 78 .… 7.21 — v Garden (1869) 38 LJ 331 .… 7.69, 7.97, 7.98 — v Goldsmith [1891] 1 QB 544 .… 8.37, 8.44, 8.45, 10.32, 12.12 — v Mason (1845) 14 M W 112; 153 ER 411 .… 1.38, 7.14, 7.16 — v Robinson (1833) 5 B and Ad 789; 110 ER 982 .… 9.25, 9.31, 9.34, 9.49, 11.43 — v Sawdon & Co [1901] 2 KB 653 .… 8.37, 8.38, 8.40, 8.44, 8.53 — v State of South Australia (1982) 42 ALR 669 .… 8.60, 8.65, 8.68, 8.70 Turner’s Case Ray 142 .… 1.42 Turvey v CW Cheyney & Son Ltd [1979] IRLR 105 .… 6.23 TV Shopping Network Ltd v Scutt (1988) 43 IPR 451 .… 3.49, 6.15, 16.20, 16.31 Twinsectra Ltd v Yardley [2002] 2 AC 164; 2 All ER 377 .… 15.72 Tyers v Barmera Packing Company Limited [1930] SASR 123 .… 11.21

U Ubsdell v Paterson [1973] ICR 86 .… 3.27 Udall v Capri Lighting Ltd [1987] 3 All ER 262 .… 15.64 Under Water Welders & Repairers Ltd v Street [1967] FSR 194 .… 3.30, 7.127, 7.128 Unger v Preston Corporation [1942] 1 All ER 200 .… 12.11, 12.21, 12.22, 12.23 Union Carbide Corp v Naturin Ltd [1987] FSR 538 .… 15.70 United Bank Ltd v Akhtar [1989] IRLR 507 .… 6.8, 6.18, 6.20, 8.23, 8.29, 8.33 United Dominions Corp Ltd v Brian Pty Ltd (1985) 60 ALR 741; 157 CLR 1 .… 2.41 United Firefighters’ Union of Australia v Country Fire Authority (2007) 164 IR 169; [2007] FCA 853; [2007] FCAFC 169 .… 4.28, 4.29, 5.84, 11.67

— v Metropolitan Fire and Emergency Services Board (2003) 198 ALR 466; 123 IR 86 .… 3.38, 5.104, 5.106 — v Metropolitan Fire Brigades Board (1998) 86 IR 340 .… 9.6, 9.16, 9.43, 9.44 United Group Rail Services Ltd v Rail Corporation of New South Wales (2009) 74 NSWLR 618; [2009] NSWCA 177 .… 3.52, 8.29 United Indigo Chemical Co Ltd v Robinson (1931) 49 RPC 178 .… 7.129 United Kingdom Atomic Energy Authority v Claydon [1974] ICR 128 .… 6.18 United States Surgical Corporation v Hospital Products International Pty Ltd [1982] 2 NSWLR 766 .… 7.31, 7.37, 7.88, 15.114, 15.124 — v — [1983] 2 NSWLR 157 .… 15.74, 15.90, 15.131 — v — (1984) 156 CLR 41; 55 ALR 417 .… 7.31, 7.37, 15.90 United Sterling Corporation Ltd v Felton [1973] FSR 409 .… 7.31, 7.86, 7.114, 7.127, 16.42, 16.43, 16.45, 16.46 Uniting Church in Australia Property Trust (NSW) v Industrial Relations Commission of New South Wales (2004) 60 NSWLR 602; 139 IR 1 .… 11.32 Universal Cargo Carriers Corporation v Citati [1957] 2 QB 401 .… 10.10, 10.16, 10.26, 10.32, 10.33, 10.34, 10.40, 10.44, 10.51, 10.89 Universe Tankships Inc of Monrovia v International Transport Workers Federation [1983] 1 AC 366; [1982] 2 All ER 67 .… 4.2, 4.3, 4.5–4.7, 5.3 University of Nottingham v Eyett [1999] ICR 721 .… 8.30 University of Regina v Cohnstaedt [1989] 1 SCR 1011 .… 8.39 University of Western Australia v Gray (2009) 179 FCR 346; 259 ALR 224; [2009] FCAFC 116 .… 5.48, 5.50, 7.6, 7.31, 7.102, 7.103, 7.104, 7.105, 7.111, 7.113, 7.114, 7.122 University of Wollongong v National Tertiary Education Industry Union [2002] FCAFC 85 .… 11.15 Unsworth v Tristar Steering & Suspension Australia Ltd (2008) 175 IR 320 .

… 8.38, 8.53, 8.55 Update Constructions Pty Ltd v Rozelle Child Care Centre Ltd (1990) 20 NSWLR 251 .… 9.29 Upper Hunter County District Council v Australian Chilling & Freezing Co Ltd (1968) 118 CLR 429 .… 3.51 Uren v John Fairfax and Sons Pty Ltd (1966) 117 CLR 118 .… 14.16, 14.84 Uszok v Henley Properties (NSW) Pty Ltd [2007] NSWCA 31 .… 5.72

V Vacik Distributors Pty Ltd v Kelly (1995) 12 NSWCCR 30 .… 2.17 Vairy v Wyong Shire Council (2005) 223 CLR 422; 221 ALR 711 .… 8.67 Valley Office Equipment v Douglas (1961) 38 WWR 556 .… 7.55 Van Efferen v CMA Corp Ltd (2009) 183 IR 319; [2009] FCA 597 .… 8.13, 8.29, 14.58, 14.61, 14.64, 14.65 Van Heerden v Total Petroleum, 942 F Supp 468 (1996) .… 3.14 Van Oosterom v Australian Metropolitan Life Assurance Co Ltd [1960] VR 507 .… 8.63 Vaught v Tel Sell Ltd [2005] EWHC 2420 .… 9.34 Vehicle Builders Employees Federation of Australia v British Motor Corporation (Aust) Pty Ltd (1966) 8 FLR 70 .… 15.113 Venables v Hornby [2003] 1 WLR 3022; [2004] 1 All ER 627 .… 2.13, 2.15, 2.21 Vento v Chief Constable of West Yorshire [2003] ICR 318 .… 14.85 Vermeesch v Harvey World Travel Franchises Pty Ltd (1997) 74 IR 364 .… 3.22, 11.51, 11.55, 11.59, 14.47, 14.51 Vernon v Bathell (1762) 2 Eden 110; 28 ER 838 .… 6.25 Vickers v Challenge Australian Dairy Pty Ltd (2011) 190 FCR 569; [2011] FCA 10 .… 13.18 Vickery v Woods (1952) 85 CLR 336 .… 3.80, 3.81

Victoria v Commonwealth (1996) 187 CLR 416; 138 ALR 129 .… 11.19, 12.30 Victoria Laundry (Windsor) Limited v Newman Industries Limited [1949] 2 KB 528 .… 14.22 Victoria University of Technology v Wilson (2004) 60 IPR 392; [2004] VSC 33 .… 6.11, 7.7, 7.9, 7.11, 7.34, 7.70, 7.86, 7.87, 7.101, 7.102, 7.103, 7.104, 7.105, 7.106, 15.71, 15.72, 15.74, 16.29 Victorian Workcover Authority v Game (2007) 16 VR 393 .… 2.3, 2.11, 2.41 Vidyodaya University of Ceylon v Silva [1964] 3 All ER 865 .… 15.109 Villella v MFI Furniture Centres Ltd [1999] IRLR 468 .… 5.55, 8.29, 11.27, 12.33, 12.35, 12.54 Vine v National Dock Labour Board [1956] 1 QB 658; 1 All ER 1 .… 10.2, 10.90, 10.98, 15.46 — v — [1957] AC 488; [1956] 3 All ER 939 .… 10.2, 10.90, 10.98, 11.65, 15.15, 15.46, 15.93, 15.94, 15.97, 15.99, 15.100, 15.108, 15.111, 15.112 Vines v ASIC (2007) 73 NSWLR 451; [2007] NSWCA 75 .… 7.25 VIP Insurances Ltd, Re [1978] 2 NSWLR 297 .… 11.75, 13.23 Virgo Fidelis Senior School v Boyle [2004] ICR 1210 .… 14.85 Visa International Service Association v Paul [2004] IRLR 42 .… 8.26 Visscher v Guidice (2009) 239 CLR 361; 258 ALR 651; 187 IR 96 .… 5.85, 6.5, 6.14, 6.15, 6.24, 8.14, 9.9, 9.13, 9.18, 9.20, 10.8, 10.21, 10.60, 10.63, 10.64, 10.66, 10.78, 10.81, 10.84, 13.20, 14.35, 15.21, 15.38 Vitol SA v Norelf Ltd (The Santa Clara) [1996] AC 800 .… 10.95 VMT v The Corporation of the Synod of the Diocese of Brisbane [2007] QSC 219 .… 16.58 Voigtsberger v Council of the Shire of Pine Rivers (1981) 58 FLR 239 .… 15.26 Vokes Limited v Heather (1945) 62 RPC 135 .… 7.102, 7.113 Voli v Inglewood Shire Council (1963) 110 CLR 74 .… 7.24

Vorvis v Insurance Corporation of British Columbia [1989] 1 SCR 1085 .… 14.84 Vozza v Tooth & Co Ltd (1964) 112 CLR 316 .… 8.67, 8.68, 8.70 Vroon BV v Foster’s Brewing Group Ltd [1994] VR 32 .… 3.4, 3.49, 6.21

W W Devis & Sons Ltd v Atkins [1977] 3 All ER 40; [1977] 3 WLR 214 .… 10.88 WA Dewhurst Pty Ltd v Cawrse [1960] VR 278 .… 3.24 WA Fork Truck Distributors Pty Ltd v Jones [2003] WASC 102 .… 7.20, 7.21, 7.35, 7.84, 7.89 WA Goold (Pearmak) Ltd v McConnell [1995] IRLR 516 .… 8.25, 8.29 Wade v State of Victoria [1999] 1 VR 121 .… 16.54, 16.57, 16.59 Walford v Miles [1992] 2 AC 128; 1 All ER 453 .… 3.52 Walker v Andrew (2002) 116 IR 380; [2002] NSWCA 214 .… 3.47, 3.49, 3.52, 5.31, 13.23, 14.44, 14.45, 14.46, 14.52 — v Citigroup Global Markets Australia Pty Ltd (2005) 226 ALR 114; [2005] FCA 1678 .… 8.13, 8.29, 11.23 — v — (2006) 233 ALR 687; [2006] FCAFC 101 .… 4.32, 4.33, 4.35, 4.37, 4.39, 4.40, 5.27, 8.29, 11.23, 14.50 — v Corboy (1990) 19 NSWLR 382 .… 7.52 — v Salomon Smith Barney Securities Pty Limited (2003) 140 IR 433; [2003] FCA 1099 .… 3.23, 4.32, 4.33, 4.35, 4.37–4.41, 5.23, 5.27 — v Zurich Australia Insurance Ltd (2000) 106 IR 23; [2000] QSC 345 .… 7.13, 7.16, 7.137, 7.139, 7.141, 8.14, 10.93, 11.15 — v — [2001] QCA 296 .… 7.13, 7.16, 7.137, 7.139, 7.141, 8.14, 10.93, 11.15 Wall v Westcott (1982) 1 IR 252 .… 7.141 Wallace v Ross (1915) 17 Gazette LR 518 .… 9.34

— v United Grain Growers Ltd (1993) 49 CCEL 71 .… 11.21 — v — (1995) 14 CCEL (2d) 41 .… 11.21 — v — (1997) 152 DLR (4th) 1 .… 10.49, 11.26, 11.62, 14.92 Wallersteiner v Moir [1974] 1 WLR 991; [1974] 3 All ER 217 .… 15.102 Wallis v Day (1837) 2 M & W 273; 150 ER 759 .… 11.22 Wallsend and Plattsburg Co-operative Society Ltd v Gray [1924] AR (NSW) 41 .… 12.15, 12.17 Wallwork v Fielding [1922] 2 KB 66 .… 9.62 Walsh v Commercial Travellers’ Association of Victoria [1940] VLR 259 .… 5.85 — v Kent (1862) 1 QSCR 44 .… 11.41 — v Police Association (2000) 140 IR 58; [2000] VSC 292 .… 12.47, 15.11, 15.38, 15.41, 15.46, 15.48, 15.49, 15.75, 15.76 — v Walleye (1874) (LR) 9 QB 367 .… 9.49, 10.74 Walton v Wollondilly Abattoirs Co-op Limited (1993) 50 IR 81 .… 11.7, 11.55, 11.59 Walton Stores (Interstate) Limited v Maher (1988) 164 CLR 387; 76 ALR 513 .… 3.23 Wandsworth London Borough Council v D’Silva [1998] IRLR 193 .… 5.42, 5.44, 6.6, 6.8 Wansworth Parish v Putney Parish (1739) 2 SCKB 329; 93 ER 221 .… 11.43 Warburton v Co-operative Wholesale Society Limited [1917] 1 KB 663 .… 12.14, 12.15 — v Heywood (1880) 6 QBD 1 .… 9.28, 9.49, 10.74 — v National Westminster Finance Australia Ltd (1988) 15 NSWLR 238 .… 6.50 Ward v Byham [1956] 2 All ER 318 .… 6.32 — v Director-General of School Education (1998) 80 IR 175 .… 9.60, 11.30

— v Eltherington [1982] Qd R 561 .… 3.69 Ward Evans Financial Services Ltd v Fox [2002] IRLR 120 .… 7.77 Wardley Australia Ltd v Western Australia (1992) 175 CLR 514; 109 ALR 247 .… 4.38, 14.34 Wardroper v Cutfield (1864) 33 LJ Ch 605 .… 9.32 Wark v Melbourne City Toyota (1999) 89 IR 132 .… 15.39 Warman International Ltd v Dwyer (1992) 46 IR 250 .… 7.47, 7.50, 7.65, 7.73, 7.81, 7.82 — v — [1994] QCA 12 .… 7.47, 7.50, 7.65, 7.73, 7.81, 7.82 — v — (1995) 182 CLR 544; 128 ALR 201 .… 7.6, 7.36, 7.47, 7.50, 7.65, 7.73, 7.81, 7.82, 15.71, 15.120, 15.121, 15.124, 15.128, 15.129, 15.130, 15.131 — v Envirotech Australia Pty Ltd (1986) 11 FCR 478; 67 ALR 253 .… 7.127 Warner v Public Service Board of New South Wales (1986) 13 NSWLR 263 .… 9.15, 9.62 Warner Bros Pictures Inc v Ingolia [1965] NSWR 988 .… 15.31 — v Nelson [1936] 3 All ER 160; [1937] 1 KB 209 .… 15.28, 15.30, 15.31, 15.34, 15.48, 15.51, 16.19, 16.28 Warramunda Village Inc v Pryde (2001) 105 FCR 437; [2001] FCA 61 .… 15.91 Warren v Dickson [2011] NSWSC 79 .… 7.137, 8.13, 8.20, 8.22, 10.30 — v Mendy [1989] 3 All ER 103 .… 15.30, 15.34, 15.35, 15.40 — v Whittingham (1902) 18 TLR 508 .… 12.15 Wason v ACT Waterproofing and Maintenance Pty Limited (1991) 40 IR 279 .… 2.19 Waterman v Fryer [1922] 1 KB 499 .… 3.43, 8.41 Waterside Workers Awards, Re (1957) 1 FLR 119 .… 9.28, 9.29 Waterside Workers’ Federation of Australia v Burgess Brothers Ltd (1916) 21 CLR 129 .… 3.72, 3.74, 3.83

— v JW Alexander Limited (1918) 25 CLR 434 .… 15.14 — v Stewart (1919) 27 CLR 119 .… 14.135 Wates v Greater London Council (1983) 25 BLR 1 .… 12.9 Watson v Durham University [2008] EWCA Civ 1266 .… 8.21, 8.23, 8.29, 11.26, 15.46 — v J & AG Johnson Ltd (1936) 55 CLR 63 .… 3.69 — v Prager [1991] 3 All ER 487 .… 16.9, 16.13, 16.17, 16.28, 16.29 — v Ramsay [1960] NSWR 462 .… 14.121 Watts v Rake (1960) 108 CLR 158 .… 14.99 Waugh v Kippen (1986) 160 CLR 156; 64 ALR 195 .… 8.67 Way v Latilla [1937] 3 All ER 759 .… 3.47, 3.53, 3.56, 14.52 WE Cox Toner (International) Ltd v Crook [1981] ICR 829 .… 6.48, 10.90 Webb v England (1860) 29 Beav 44; 54 ER 541 .… 15.2, 15.17 — v Suntown Enterprises WA Pty Ltd (No 2) [2009] FMCA 12 .… 3.39 Welbourn v Australian Postal Commission [1984] VR 257 .… 9.9, 9.18, 9.24, 9.37, 9.43, 9.45, 9.62, 15.113 Weld-Blundell v Stephens [1919] 1 KB 520 .… 4.26, 7.134 Weldon & Co Services Pty Ltd v Harbinson [2000] NSWSC 272 .… 7.7, 7.86, 7.88, 7.93 Wells v Newfoundland [1999] 3 SCR 199 .… 11.30, 12.5, 12.38 Wendt v Bruce (1931) 45 CLR 245 .… 10.70, 10.72, 10.77, 10.78, 10.79, 10.96 Wenham v Ella (1972) 127 CLR 454 .… 14.21, 14.25 Wenjiang (No 2), The [1983] 1 Lloyd’s Rep 400 .… 12.19, 12.47 Wennhak v Morgan (1888) 20 QBD 635 .… 16.51 Wentworth v Woollahra Municipal Council (1982) 149 CLR 672; 43 ALR 69 .… 15.117, 15.119 Wesfarmers Dalgety Ltd v Williams [2005] WASC 287 .… 4.36, 4.38, 7.26

Wesfarmers Federation Insurance Ltd v Wells [2008] NSWCA 186 .… 2.5, 2.7, 2.9, 2.10, 2.17, 2.20 Wesoky v Village Cinemas International Pty Ltd [2001] FCA 32 .… 4.37, 8.38, 8.44, 8.47 Wessex Dairies Ltd v Smith [1935] 2 KB 80 .… 5.49, 6.30, 7.30, 7.32, 7.58, 7.66, 7.67, 7.81, 7.87, 7.90, 7.119, 7.129, 16.25 West v TWG Services Ltd (2009) 189 IR 97; [2009] FCA 1052 .… 4.32, 4.37, 4.38, 4.40, 11.21, 14.34 West Australian Locomotive Engine Drivers’ Firemen’s and Cleaners’ Union of Workers v Hathaway (1995) 63 IR 79 .… 2.14, 2.35 West Midlands Co-op Society Ltd v Tipton [1986] AC 536 .… 10.88 Westen v Union des Assurances de Paris (1996) 88 IR 259 .… 6.14, 6.15, 8.49, 11.51, 14.110, 14.113 Western Excavating (ECC) Ltd v Sharp [1978] ICR 221; [1978] QB 761 .… 8.25, 10.36, 10.99 Western Export Services Inc v Jireh International Pty Ltd [2011] HCA 45 .… 3.7, 5.10 Westfield Holdings v Adams (2001) 114 IR 241 .… 13.7, 14.101, 14.127 Westminster Chemical NZ Ltd v McKinley [1973] 1 NZLR 659 .… 16.48 Weston v Great Boulder Gold Mines Ltd (1964) 112 CLR 30 .… 8.64 Westpac Banking Corp v Cockerill (1998) 152 ALR 267 .… 4.6 — v Dawson (1991) 104 ALR 295; (1990) 19 NSWLR 614 .… 4.18 — v John Fairfax Group Pty Ltd (1991) 19 IPR 513 .… 7.127, 7.135, 15.64 — v Northern Metals Pty Ltd (1989) 14 IPR 499 .… 4.33 Westralian Farmers Ltd v Commonwealth Agricultural Service Engineers Ltd (in liq) (1936) 54 CLR 361 .… 10.74 Westwood v Secretary of State for Employment [1985] ICR 209 .… 14.124 Wethersfield Ltd v Sargent [1999] ICR 425 .… 10.87

Wettern Electric Ltd v Welsh Development Agency [1983] QB 796; 2 All ER 629 .… 3.23 WH Milstead & Sons Ltd v Hamps and Toss & Glendinning Ltd [1927] WN 233 .… 11.22 Wheatley v Bell [1982] 2 NSWLR 544 .… 15.70 Wheeler v Philip Morris (1989) 97 ALR 282 .… 10.98, 14.30, 14.60, 15.13, 15.54 — v Quality Deep Ltd [2005] ICR 265; [2004] EWCA Civ 1085 .… 4.24 Whent v T Cartledge Ltd [1997] IRLR 153 .… 5.43 Whim Well Copper Mines Ltd v Pratt (1910) 12 WALR 166 .… 11.43, 11.45, 12.49 White v Australian & New Zealand Theatres Ltd (1943) 67 CLR 266 .… 5.25, 8.37, 8.40, 8.49 — v Bluett (1853) 23 LJ (NS) Ex 36 .… 3.38 — v Bristol Rugby Ltd [2002] IRLR 204 .… 5.20, 10.60, 10.94, 10.98, 15.54 — v Reflecting Roadstuds Ltd [1991] ICR 733 .… 6.18, 8.23 — v Riley [1921] 1 Ch 1 .… 11.77 White and Carter (Councils) Ltd v McGregor [1962] AC 413; [1961] 3 All ER 1178 .… 10.64 Whitehead v Griffith University [2003] 1 Qd R 220; [2002] QSC 153 .… 15.108 — v Workcover/Employers Mutual Fund Ltd (2007) 168 IR 443 .… 2.8, 2.17, 2.24 Whitehouse v Carlton Hotel Pty Ltd (1987) 162 CLR 285 .… 7.75 Whitlam v Australian Securities and Investments Commission (2003) 57 NSWLR 559; 199 ALR 674; [2003] NSWCA 183 .… 7.51 Whitlock v Brew (1968) 118 CLR 445 .… 3.60, 16.20, 16.23 — v — (No 2) [1967] VR 803 .… 16.20, 16.23 Whitney v Monster Worldwide Limited [2009] EWHC 2993 .… 5.105, 6.26,

6.34 — v — [2010] EWCA Civ 1312 .… 5.105, 6.26, 6.34 Whittaker v Unisys Australia Pty Ltd (2010) 26 VR 668; 192 IR 311; [2010] VSC 9 .… 5.38, 6.6, 6.15, 6.16, 8.29, 10.25, 10.51, 10.66, 10.73, 13.3, 13.4, 13.5, 13.8, 14.98, 14.101, 14.108, 14.109, 14.110, 14.112, 14.113 Whittet v State Bank of New South Wales (1991) 24 NSWLR 146 .… 5.20 Whittingham v Commissioner of Railways (WA) (1931) 46 CLR 22 .… 8.63 Whittle v Frankland (1862) 2 B & S 49; 121 ER 992 .… 8.37 Whitton v ACN 003 266 886 Pty Ltd (1996) 42 NSWLR 123 .… 13.17, 13.18 Whitwood Chemical Company v Hardman [1891] 2 Ch 416 .… 15.28, 15.29, 15.30 Wholesale Distributors Ltd v Gibbons Holdings Ltd [2008] 1 NZLR 277 .… 5.23 Whybrow’s case (1910) 11 CLR 1 .… 3.43 Wickham v Commissioner of Police (1998) 43 AILR 11-094; [1997] SASC 7307 .… 7.22, 7.140, 10.101 Wigan v Edwards (1973) 1 ALR 497 .… 6.26 Wigan Borough Council v Davies [1979] ICR 411 .… 8.25 Wild v Great Matrix Rugby Mining Company Limited (1890) 24 SALR 48 . … 11.45 Wilden Pty Ltd v Green [2009] WASCA 38 .… 7.20 Wilkes v Wood (1763) Lofft 1; 98 ER 489 .… 14.84 Wilkin v Read (1854) 15 CB 192; 139 ER 394 .… 7.19 Willey v Synan (1937) 57 CLR 200 .… 7.54, 7.97 William Hill Organisation Ltd v Tucker [1999] ICR 291 .… 5.52, 8.38, 8.39, 8.41, 8.42, 8.44, 8.47, 8.55, 11.72, 16.29, 16.32 William Porter & Co Ltd, Re [1937] 2 All ER 361 .… 5.105

William Robinson & Co Ltd v Heuer [1898] 2 Ch 451 .… 9.49, 10.74, 15.18, 15.28, 15.31, 15.32, 15.51, 15.66, 16.29 Williams v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2009] FCA 86 .… 4.8 — v Boc Gases Ltd [2000] ICR 1181 .… 14.125 — v Byrne (1837) 7 Ad & E 177; 112 ER 438 .… 11.46 — v Macmahon Mining Services Pty Ltd (2009) 182 IR 104 .… 4.20 — v Nicoski [2003] WASC 131 .… 6.44 — v North’s Navigation Collieries (1889) Limited [1906] AC 136 .… 9.51, 9.52 — v Printers Trade Services (1984) 7 IR 82 .… 7.28, 10.49, 14.87, 15.46 — v Roffey Bros Ltd [1991] 1 QB 1; 1 All ER 512 .… 5.105, 6.34, 6.35, 6.49 — v Watsons Luxury Coaches Limited [1990] IRLR 164 .… 12.1, 12.9, 12.18 — v Williams [1957] 1 WLR 148; 1 All ER 305 .… 6.32 Williamson v Commonwealth (1907) 5 CLR 174 .… 7.2, 9.9, 9.10, 9.19, 10.65, 14.35, 14.41, 14.42, 14.43, 14.60, 14.62, 14.108 — v Hine [1891] 1 Ch 390 .… 7.42, 7.96, 7.97 — v Suncorp Metway Insurance Limited [2008] QSC 244 .… 3.44 — v Taylor (1843) 5 QB 175; 114 ER 1214 .… 3.31, 8.38, 8.46 Willis v Childe (1851) 13 Beav 117; 51 ER 46 .… 15.16 — v Health Communications Network Ltd (2007) 167 IR 425; [2007] NSWCA 313 .… 5.50, 13.8, 14.47, 15.44 Willoughby v CF Capital Plc [2011] ICR 88; [2011] EWCA Civ 1115 .… 11.12 Wilson v Darling Island Stevedoring & Lighterage Co Ltd (1956) 95 CLR 43 .… 3.61, 5.109, 5.110 — v Harper [1908] 2 Ch 370 .… 10.75, 12.50, 13.34

— v IPC Corporation (Australia) Pty Ltd (1995) 67 IR 302 .… 14.16, 14.112 — v National Coal Board [1981] SLT 67 .… 14.127 — v St Helens BC [1996] ICR 711 .… 6.21 — v Tyneside Window Cleaning Co [1958] 2 QB 110 .… 8.69, 8.72 Wilsons & Clyde Coal Co Ltd v English [1938] AC 57 .… 8.56, 8.61, 8.68, 8.69, 8.74 Wilton v Coal & Allied Operations Pty Ltd (2007) 161 FCR 300; 162 IR 264; [2007] FCA 725 .… 3.48, 5.101 — v Commonwealth Trading Bank [1973] 2 NSWLR 644 .… 2.40 Wiltshire County Council v National Association of Teachers in Further and Higher Education [1980] ICR 455 .… 11.19 Wiltshire Police Authority v Wynn [1981] 1 QB 95 .… 3.43 Wiluszynski v Tower Hamlets London Borough Council [1989] ICR 493 .… 9.19 Winchup v Hughes (1871) LR 6 CP 78 .… 12.51 Winstone v Linn (1823) 1 B & C 460; 107 ER 171 .… 1.43, 9.9, 9.13, 9.18, 11.44 Winterton Constructions Pty Ltd v Hambros Australia Ltd (1991) 101 ALR 363 .… 3.61, 3.62, 5.109 Wise v Wilson (1844) 1 Car K 662; 174 ER 981 .… 7.137 Wishart v National Association of Citizen Advice Bureaux Ltd [1990] ICR 794 .… 3.15, 8.29, 15.20, 15.36, 15.40 Witham v Holloway (1995) 183 CLR 525; 131 ALR 401 .… 15.57, 15.67 Withers v General Theatre Corporation Ltd [1933] 2 KB 586 .… 8.37, 8.40, 14.51, 14.91 WJ Tatem Limited v Gamboa [1939] 1 KB 132 .… 12.34 Wolmar v Travelodge Australia Pty Ltd (1975) 8 ACTR 11; 26 FLR 249 .… 8.63 Wood v Corrigan (1928) 28 SR (NSW) 492 .… 15.28

— v Freeloader Ltd [1977] IRLR 455 .… 8.25 — v Little (1921) 29 CLR 564 .… 4.24 Wood Factory Pty Ltd v Kiritos Pty Ltd (1985) 2 NSWLR 105 .… 10.95 Woodhouse AC Israel Cocoa SA v Nigerian Produce Marketing Co Ltd [1972] AC 741; 2 All ER 271 .… 6.21 Woodroffe v Farnham (1693) 2 Vern 291; 23 ER 788 .… 1.43, 5.75 Woods v Multi-Sport Holdings Pty Ltd (2002) 208 CLR 460; 186 ALR 145 . … 8.65 — v WM Car Services (Peterborough) Ltd [1981] ICR 666 .… 8.20, 8.24, 8.27, 10.52 — v — [1982] ICR 693 .… 8.13, 8.18, 8.24, 8.27, 10.25, 10.40 Woodward v Hutchins [1977] 1 WLR 760 .… 7.133 Woolley v Allen Fairhead & Sons Ltd (1946) 62 TLR 294 .… 9.16 Woolworths Ltd v Brown (2005) 145 IR 285 .… 7.10, 7.139 — v Kelly (1991) 22 NSWLR 189 .… 3.29, 3.34, 3.37, 3.39, 6.26, 6.33, 7.47, 7.69, 7.70, 7.71 Woolworths Pty Ltd v Olson (2004) 184 FLR 121; 63 IPR 258; [2004] NSWSC 849 .… 7.8, 7.14, 7.36, 7.37, 7.118, 14.15 — v — [2004] NSWCA 372 .… 7.8, 7.14, 7.36, 7.37, 7.118, 14.15, 16.16, 16.24, 16.27, 16.40 Woolworths (SA) Pty Ltd v Russian (1996) 66 IR 13 .… 6.14, 10.97 WorkCover Authority of New South Wales v Billpat Holdings Pty Ltd (1995) 11 NSWCCR 565 .… 2.47 WorkCover Corporation v Da Ping [1994] SASC 4466 .… 4.23 Wormald Australia Pty Ltd v Harward (1992) 42 IR 166 .… 7.21 Worthington Pumping Engine Company v Moore (1902) 20 RPC 41 .… 7.102, 7.104, 7.109 Wright v Attorney-General for the State of Tasmania (1954) 94 CLR 409 .… 2.5, 2.10, 2.16

— v Gasweld Pty Ltd (1991) 22 NSWLR 317 .… 7.120, 7.125, 7.128, 16.38, 16.39 — v Groves [2011] QSC 66 .… 7.137, 8.13, 8.14, 8.19, 10.98, 10.99, 14.116 — v TNT Management Pty Ltd (1989) 85 ALR 442; 15 NSWLR 679 .… 4.33, 4.35, 4.36, 5.48, 8.57 Wroth v Tyler [1974] Ch 30 .… 15.119 Wrottesley v Regent Street Florida Restaurant Ltd [1951] 2 KB 277; 1 All ER 566 .… 7.96 WT Malouf Pty Limited v Brinds Limited (1980) 52 FLR 442 .… 14.134 WT Partnership (Australia) Pty Ltd v Sheldrick (1998) 89 IR 206; [1998] FCA 1794 .… 4.32, 4.38, 4.39, 14.30 — v — (1999) 96 IR 202; [1999] FCA 843 .… 4.32, 4.39, 11.79, 14.30, 14.53, 14.58, 14.87, 14.90 Wurth, Ex p; Tully, Re (1954) 55 SR (NSW) 47 .… 11.5 Wyatt v Kreglinger and Fernau [1933] 1 KB 793 .… 3.36, 16.4, 16.20 Wylie v ANI Corporation [2002] 1 Qd R 320; (2000) 140 IR 408; [2000] QCA 314 .… 7.24, 7.27, 8.57, 14.17 Wynn v NSW Insurance Ministerial Corporation (1995) 184 CLR 485 .… 14.54

X X v Mid Sussex Citizens Advice Bureau [2010] ICR 423 .… 3.41 — v The Commonwealth (1999) 200 CLR 177; (1999) 167 ALR 529 .… 7.24, 7.30 X (Minors) v Bedfordshire County Council [1995] 2 AC 633; 3 All ER 353 . … 16.54 XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd (1985) 155 CLR 448 .… 14.16

Y

Yango Pastoral Company Pty Ltd v First Chicago Australia Ltd (1978) 138 CLR 411; 21 ALR 585 .… 4.23, 4.27, 4.28 Yaraka Holdings Pty Ltd v Giljevic (2006) 149 IR 339; [2006] ACTCA 6 .… 2.5, 2.8–2.12, 2.15, 2.17, 2.19, 2.41 Yeager v RJ Hastings Agencies Limited [1985] 1 WWR 218 .… 12.14, 12.19, 12.46 Yellow Cabs of Australia Limited v Colgan [1930] AR (NSW) 137 .… 2.40 Yetton v Eastwoods Froy Ltd [1967] 1 WLR 104; [1966] 3 All ER 353 .… 6.45, 14.98, 14.108, 14.112, 14.113, 14.114 Yewens v Noakes (1880–81) LR 6 QBD 530 .… 1.28, 1.44 Yirra Pty Ltd v Summerton (2009) 176 FCR 219; 181 IR 327; [2009] FCAFC 50 .… 13.3 York Air Conditioning and Refrigeration Pty Ltd v Commonwealth (1949) 80 CLR 11 .… 3.49 Yorke v The King [1915] 1 KB 852 .… 15.91 Young v Canadian Northern Railway Company [1931] AC 83 .… 5.38, 5.40, 5.45, 5.67, 5.73, 5.95, 5.102, 13.8 — v Public Service Board (1982) 3 IR 50 .… 15.95 — v Queensland Trustees Ltd (1956) 99 CLR 560 .… 14.66 — v Timmins (1831) Cr & J 331; 148 ER 1446 .… 3.31, 8.38, 8.46 — v Tockassie (1905) 2 CLR 470 .… 5.95, 11.14, 11.29 — v Waller [1898] AC 661 .… 11.30 Yousif v Commonwealth Bank of Australia (2010) 193 IR 212; [2010] FCAFC 8 .… 3.5, 3.6, 3.9, 3.11, 3.45, 5.27, 5.40 Youyang Pty Ltd v Minter Ellison Morris Fletcher (2003) 212 CLR 484; 196 ALR 482 .… 7.36, 7.74

Z Zhang v Royal Australian Chemical Institute Inc (2005) 144 FCR 347;

[2005] FCAFC 99 .… 7.131 Zheng v Cai (2009) 239 CLR 446; 261 ALR 481 .… 5.90, 14.119, 14.123, 14.130 Zhu v Treasurer of New South Wales (2004) 218 CLR 530; 211 ALR 159 .… 5.10 Ziger v Shiffer and Hillman & Co Limited [1933] 2 DLR 69 .… 12.26 Zinc Corporation Ltd v Hirsch [1916] 1 KB 541 .… 9.62 Zoneff v Elcom Credit Union Ltd (1990) 94 ALR 445 .… 14.34 Zuijs v Wirth Brothers Pty Ltd (1955) 93 CLR 561 .… 2.12, 2.15, 2.16 Zurich Australian Insurance Ltd v AMEC Services Pty Ltd [1998] WASCA 68 .… 2.41

Table of Statutes References are to paragraphs Commonwealth Acts Interpretation Act 1901 s 28A .… 11.6 s 29 .… 11.6 Administrative Decisions (Judicial Review) Act 1977 .… 15.104, 15.105 Australian Consumer Law .… 1.16, 4.1, 4.32, 4.33, 4.36, 5.6, 8.30, 14.5, 14.32, 14.33, 14.34, 14.55, 14.68, 14.101 Pt 2–3 .… 4.13 s 4 .… 4.13, 4.39, 4.40 s 4(1) .… 4.40 s 4(2) .… 4.40 s 4(3) .… 4.40 s 13 .… 14.32 s 18 .… 4.33, 4.35, 4.37–4.39, 5.18, 5.20, 5.28, 6.20, 14.63 s 18(1) .… 4.32 s 20 .… 4.13 s 21 .… 4.13 s 22 .… 4.13 s 31 .… 4.33, 4.39, 5.20, 5.28 s 236 .… 4.32, 4.38, 14.32, 14.34, 14.63 Australian Institute of Marine Science Act 1972 s 48 .… 7.102

Bankruptcy Act 1966 .… 13.2, 13.26 Pt VI, Div 4B .… 13.27 Pt IX .… 13.26 Pt X .… 13.26 s 58 .… 13.27 s 60(4) .… 13.28 s 109 .… 13.21 s 109A .… 13.21 s 116 .… 13.27 s 116(2)(c) .… 13.27 s 116(2)(g) .… 13.28 Circuit Layouts Act 1989 s 27(2) .… 15.127 s 27(3) .… 15.127 Commonwealth of Australia Constitution Act 1901 s 51(xxxvii) .… 1.21 s 109 .… 9.34 Competition and Consumer Act 2010 s 84(2) .… 8.62 Sch 2 .… 1.16, 8.30 Sch 2, s 18 .… 4.1 Sch 2, s 31 .… 4.1 Conciliation and Arbitration Act 1904 s 5 .… 14.101 Copyright Act 1968 .… 7.102, 7.110, 15.127 Pt IX .… 7.110

s 35(2) .… 7.110 s 35(4) .… 7.110 s 35(6) .… 7.85, 7.102, 7.110 s 115(2) .… 15.127 s 115(3) .… 15.127 s 176(2) .… 7.102, 7.110 s 177 .… 7.102, 7.110 s 178(4) .… 7.102, 7.110 Corporations Act 2001 .… 1.16, 2.35, 2.36, 2.37, 3.67, 3.87, 13.2 Pt 2D, Div 2 .… 2.37 Pt 5.2 .… 13.2 Pt 5.3A .… 13.2, 13.16, 13.21 Pts 5.4–5.6 .… 13.2 Pt 5.8A .… 13.25 s 9 .… 2.34, 2.35, 13.23 s 79 .… 7.115 s 112(3) .… 3.67 s 112(5) .… 3.67 s 124(1) .… 3.67 s 125 .… 3.67 s 126 .… 3.86 s 126(1) .… 3.87 s 127 .… 3.86, 3.87 s 131 .… 3.81 s 140 .… 2.36 s 180 .… 7.25

s 181 .… 7.88 s 182 .… 7.5, 7.29, 7.40, 7.46, 7.65, 7.95 s 182(1) .… 7.51, 7.94 s 183 .… 7.5, 7.29, 7.40, 7.58, 7.65, 7.115, 7.129 s 185 .… 7.94 s 191 .… 7.69 s 198E .… 3.76 s 199A .… 8.34 s 200E .… 2.37 s 203C .… 2.37 s 206B .… 13.26 s 413 .… 13.13 s 420(2)(o) .… 13.18 s 433(3) .… 13.21 s 437A .… 13.18 s 437B .… 13.18 s 444DA .… 13.21 s 459A .… 13.15 s 477 .… 13.18 ss 513A–513C .… 13.22 s 513A .… 13.15 s 556 .… 13.22 s 556(1)(a) .… 13.21, 13.23 s 556(1)(c) .… 13.21 s 556(1)(e)–(h) .… 13.21, 13.22, 13.25 s 556(1)(e) .… 13.23

s 556(1)(f) .… 13.22, 13.23 s 556(1)(g) .… 13.22, 13.23, 13.24 s 556(1)(h) .… 13.22, 13.23, 13.24 s 556(1A) .… 13.22 s 556(1AB)–(1AF) .… 13.23 s 556(1B) .… 13.22 s 556(1C) .… 13.22 s 556(2) .… 13.21, 13.22, 13.23, 13.24 s 558 .… 13.21, 13.22 s 558(1) .… 13.22 s 558(3) .… 13.21 s 561(b) .… 13.21 s 563(1)(b) .… 13.23 s 563(2) .… 13.23 s 588FDA .… 13.25 s 596AA .… 13.24 s 1317G(1) .… 7.95 s 1317J(1) .… 7.95 s 1318 .… 7.74 Corporations Amendment (Repayment of Directors’ Bonuses) Act 2003 . … 13.25 Corporations Law Amendment (Employee Entitlements) Act 2000 .… 13.25 Crimes Act 1914 Pt VIIC .… 7.18 Defence (Personnel) Regulations 2002 reg 85 .… 11.30

reg 91 .… 11.4 reg 117 .… 11.29 Designs Act 2003 .… 7.110 s 4 .… 7.110 s 7 .… 7.110 s 13 .… 7.102, 7.110 s 13(1) .… 7.102, 7.110 s 73 .… 7.110 s 75 .… 15.127 Fair Work Act 2009 .… 1.2, 1.16, 1.20–1.22, 2.1, 2.2, 2.9, 2.22, 4.9, 4.13, 4.29, 4.33, 5.2, 5.4, 5.6, 5.11, 5.39, 5.81, 5.82, 5.84, 5.86, 5.94, 5.101, 5.102, 5.106, 6.32, 7.4, 8.2, 8.12, 8.42, 9.2, 9.4, 9.5, 9.15, 9.27, 9.42, 9.48, 9.52, 9.60, 11.6, 12.13, 12.15, 12.20, 12.30, 13.1, 13.2, 13.11, 13.12, 13.23, 14.32, 14.34, 14.68, 14.101, 15.18 Ch 3 .… 1.22 Pt 2-2 .… 1.22, 5.101, 8.2 Pt 2-2, Div 7 .… 8.7, 12.17 Pt 2-3 .… 1.22 Pt 2-4 .… 1.22 Pt 2-5 .… 5.81 Pt 2-6 .… 5.81, 8.2 Pt 2-8 .… 13.14 Pt 3-1 .… 1.22, 8.12, 15.5 Pt 3-1, Div 6 .… 2.23 Pt 3-2 .… 1.22, 8.12 Pt 3-3 .… 1.22 Pt 3-3, Div 1 .… 9.39

Pt 3-3, Div 9 .… 9.39 Pt 3-6 .… 13.12 Pt 6-4 .… 13.12 s 9 .… 2.35 s 16 .… 13.10 s 16(1) .… 13.10 s 19 .… 7.4, 9.39 s 20 .… 13.10 s 21 .… 2.9 s 22 .… 11.37 s 22(5) .… 13.6, 13.14 s 26(2)(e) .… 4.13 s 44 .… 5.84, 8.2 s 45 .… 8.2, 5.84, 11.6, 11.39, 14.90 s 47(2) .… 11.38 s 50 .… 5.84, 8.2 s 55(2) .… 4.9 s 62 .… 6.11, 8.4 s 64 .… 5.86 s 65 .… 8.4 s 67 .… 8.5 s 87 .… 8.6 s 87(2) .… 9.27 s 89 .… 8.6 s 90 .… 8.6 s 90(2) .… 9.27, 14.66

s 93 .… 5.86 s 94 .… 5.86 s 96(2) .… 9.27 s 99 .… 9.11 s 103 .… 8.7 ss 104–106 .… 8.7 s 107 .… 8.7 s 108 .… 8.8 s 109 .… 8.8 s 111 .… 8.8 ss 113–113A .… 8.9 ss 114–116 .… 8.10 s 114(4) .… 8.10 s 115 .… 5.86 s 117 .… 8.3, 11.2, 11.36, 11.39, 11.60, 14.90 s 117(1) .… 11.6, 11.39, 14.36 s 117(2) .… 11.36, 11.37, 11.39, 14.103 s 117(2)(b) .… 11.37 s 117(3) .… 11.36, 11.37, 14.90 s 117(3)(b) .… 11.37 s 118 .… 11.38 s 119 .… 4.29, 11.51, 11.60, 11.67, 12.27, 13.3, 13.6, 13.7, 13.10 s 119(1) .… 13.6, 14.66 s 120 .… 13.5, 13.11 s 121(1)(b) .… 13.11 s 122(2) .… 13.6

s 123(1) .… 11.38, 13.11 s 123(1)(b) .… 11.39 s 123(4) .… 13.11 s 124 .… 5.4, 8.11 s 129 .… 5.86 s 139 .… 8.2 s 141 .… 13.11 ss 143–149 .… 8.2 s 144 .… 5.86 s 147 .… 8.4 s 172 .… 5.81, 8.2 s 180 .… 5.99 s 194 .… 8.2 s 202 .… 5.86 s 285 .… 8.2 s 294 .… 8.2 s 311 .… 13.14 s 313 .… 13.14 ss 323–325 .… 9.47, 14.136 s 323 .… 9.3, 9.15, 9.32, 9.34, 9.47, 9.48, 9.50, 9.51, 9.52 s 324 .… 5.86, 9.47, 9.48, 9.50, 9.52 s 324(1) .… 9.48 s 325 .… 9.48 s 326 .… 5.94, 14.131, 14.132, 14.136 s 326(1) .… 14.136 s 329 .… 13.25

s 340 .… 12.26 s 343 .… 4.13 s 343(1)(a) .… 4.3, 4.8 s 344 .… 4.9 s 345 .… 4.34 s 346 .… 12.26 s 348 .… 4.3, 4.8, 4.13 s 349 .… 4.34 s 352 .… 8.7, 12.17, 12.35 s 355 .… 4.3, 4.8, 4.13 s 356 .… 2.46 ss 357–359 .… 2.1, 2.23 s 357 .… 2.23 s 357(2) .… 2.23 s 358 .… 2.23 s 359 .… 2.23 s 361 .… 2.23 s 383 .… 11.5 s 386 .… 8.27, 12.30 s 391 .… 15.11 s 392(4) .… 14.34, 14.94 s 413 .… 6.42 ss 417–422 .… 15.25 ss 418–421 .… 15.18 s 418 .… 10.97 s 421 .… 10.97

ss 470–474 .… 9.42 ss 470–472 .… 9.39 s 470 .… 9.37 s 470(1) .… 9.39 s 470(2)–(5) .… 9.39 s 472 .… 9.39 s 473 .… 9.39 s 474 .… 9.37, 9.40, 9.41 s 474(1)(a) .… 9.40 s 524 .… 9.63, 12.35 s 524(1) .… 9.63 s 524(2) .… 9.63 s 524(3) .… 9.63 ss 529–534 .… 13.12 s 530 .… 13.3, 13.12 s 531 .… 13.12 s 532 .… 13.12 s 534 .… 13.12 s 535 .… 5.4, 8.11 s 539 .… 5.84, 9.52, 11.6, 11.39, 14.16, 14.90 s 544 .… 14.28 s 545 .… 4.34, 5.84, 5.94, 8.2, 11.39, 14.32, 14.90, 15.11, 15.25 s 545(2)(b) .… 14.32 s 570 .… 14.115 ss 784–789 .… 13.12 s 785 .… 13.3, 13.12

s 786 .… 13.12 s 787 .… 13.12 s 789 .… 13.12 s 793 .… 8.62 Fair Work Regulations 2009 reg 1.11 .… 13.10 reg 2.03 .… 5.86 reg 3.01 .… 8.7, 12.17, 12.35 reg 3.21 .… 9.39 regs 3.31–3.44 .… 5.4, 8.11 reg 3.32 .… 2.46 Human Rights and Equal Opportunity Commission Act 1986 s 46PO .… 15.25 Human Rights (Sexual Conduct) Act 1994 .… 7.141 s 4 .… 7.141 Income Tax Assessment Act 1997 Subdiv 82B .… 14.29 Subdiv 83A .… 14.29 Subdiv 83B .… 14.29 Subdiv 83D .… 14.29 s 80–20 .… 14.29 s 82–10 .… 14.29 s 82–120(1) .… 14.29 s 82–120(4) .… 14.29 s 82–120(5) .… 14.29 s 82–150 .… 14.29

s 82–155 .… 14.29 s 82–160 .… 14.29 s 83–175 .… 14.29 s 83–180 .… 14.29 s 83–295 .… 14.29 Income Tax (Transitional Provisions) Act 1997 .… 14.29 Independent Contractors Act 2006 s 4 .… 2.1 s 5 .… 2.1 Insurance Contracts Act 1984 s 6 .… 7.27 s 48 .… 3.62 s 66 .… 7.27 Judiciary Act 1903 s 39B .… 15.106 s 44 .… 15.106 Migration Act 1958 .… 4.23 s 235 .… 4.23 Paid Parental Leave Act 2010 .… 8.5 Patents Act 1990 .… 15.127 s 15(1) .… 7.109 s 122(1) .… 15.127 s 123 .… 15.127 Privacy Act 1988 .… 7.112 Public Service Act 1999 .… 1.20, 11.2, 11.28, 11.32 s 6 .… 7.10

s 13(5) .… 7.13 s 14 .… 2.39 s 22 .… 2.39 s 29 .… 11.31, 11.33 s 29(1) .… 11.6 s 30 .… 11.4 s 65 .… 2.39 Public Service Regulations 1999 Pt 5–3 .… 11.33 reg 3.10 .… 11.33 Safety, Rehabilitation and Compensation Act 1988 s 4(1) .… 8.75 s 5A(2) .… 14.79 s 6 .… 8.63 s 6A .… 8.63 s 14(3) .… 10.50 ss 42–52A .… 8.75 s 66A .… 8.63 Science and Industry Research Act 1949 s 54 .… 7.102 Seat of Government (Administration) Act 1910 s 7 .… 7.95 Secret Commission Act 1905 .… 7.95 s 4 .… 7.95 Sex Discrimination Act 1975 .… 7.141 Social Security (Administration) Act 1999

s 42B .… 4.2 s 42T .… 4.2 Superannuation Guarantee (Administration) Act 1992 .… 5.94 s 32ZA .… 8.30 Superannuation Guarantee Charge Act 1992 .… 14.47 Telecommunications (Interception) Act 1979 .… 7.112 Trade Practices Act 1974 .… 15.50 s 51A .… 4.40 s 52 .… 4.32, 4.35 s 82 .… 4.38, 14.34 Work Health and Safety Act 2011 .… 8.57, 8.58, 8.59 Pt 9 .… 8.56 Pt 10 .… 8.56 Pt 11 .… 8.56 Pt 13 .… 8.56 s 5 .… 8.58 s 7 .… 8.58 s 18 .… 8.68 s 19 .… 8.68, 8.70 s 19(1)–(2) .… 8.61 s 19(3)(a) .… 8.72 s 19(3)(b) .… 8.73 s 19(3)(e) .… 8.72 s 19(3)(f) .… 8.74 s 19(3)(g) .… 8.72 s 19(4) .… 8.72

ss 20–21 .… 8.73 s 28(a) .… 7.25 s 28(b) .… 7.25 s 28(c) .… 7.13 ss 30–34 .… 8.56 s 267 .… 8.59 Workplace Relations Act 1996 .… 1.20, 3.69, 5.81, 8.2, 8.39, 15.39 s 170NC .… 4.8 Australian Capital Territory Apportionment Act 1905 .… 9.32 s 2 .… 9.32 Civil Law (Wrongs) Act 2002 s 21(1) .… 8.36 s 21(2) .… 8.36 ss 101–102 .… 8.57 s 216 .… 7.27, 13.34 Discrimination Act 1991 s 7(1)(o) .… 7.18 s 102 .… 15.25 s 102(2)(b)(iii) .… 14.32 Limitation Act 1985 s 11 .… 8.75 ss 16A–16B .… 8.75 s 36 .… 8.75 Long Service Leave Act 1976 .… 8.9

Partnership Act 1963 s 6 .… 2.41 s 7(3) .… 2.41 s 7(4)(b) .… 2.41 s 38 .… 12.25 Spent Convictions Act 2000 .… 7.18 Work Health and Safety Act 2011 .… 8.57 Workers Compensation Act 1951 Pt 9.3 .… 8.75 s 4 .… 8.63 s 4(2) .… 14.79 s 8 .… 8.63 s 82(3) .… 10.50 New South Wales Anti-Discrimination Act 1977 s 113 .… 15.25 s 113(1)(b)(ii) .… 14.32 Conveyancing Act 1919 ss 142–144 .… 9.32 s 142 .… 9.32 Crimes Act 1900 s 249B .… 7.95 Criminal Records Act 1991 ss 12–15 .… 7.18 Employees Liability Act 1991

ss 3–5 .… 7.27, 13.34 s 3 .… 7.27 ss 5–6 .… 7.27 s 6 .… 7.27 Frustrated Contracts Act 1978 .… 12.52 Government and Related Employees Appeal Tribunal Act 1980 .… 11.33 Industrial Relations Act 1996 .… 5.94 s 106 .… 14.101 ss 117–119 .… 9.47 s 275 .… 4.13 Industrial Relations (Child Employment) Act 2006 .… 3.65 Law Reform (Miscellaneous Provisions) Act 1946 s 5(1)(c) .… 8.36 s 5(2) .… 8.36 Law Reform (Miscellaneous Provisions) Act 1965 ss 8–9 .… 8.57 Limitation Act 1969 s 14 .… 8.75 s 18A .… 8.75 ss 50A–50D .… 8.75 s 50C .… 8.75 Long Service Leave Act 1955 .… 8.9, 12.20 s 4 .… 12.30 Partnership Act 1892 s 1 .… 2.41

s 2(2) .… 2.41 ss 32–35 .… 13.30 s 33 .… 12.25, 13.26 Public Sector Employment and Management Act 2002 Pt 2 .… 2.39 s 17 .… 2.39 s 23 .… 11.5 s 26 .… 11.4 s 42 .… 6.14 ss 44–46 .… 11.33 s 49 .… 11.33 s 58 .… 13.26 Restraint of Trade Act 1976 .… 3.60, 16.20 s 4(1) .… 16.24 s 4(3) .… 16.24 Supreme Court Act 1970 s 68 .… 15.117 Work Health and Safety Act 2011 .… 8.57 Workers’ Compensation Act 1987 s 10 .… 8.63 s 11 .… 8.63 s 11A .… 14.79 s 49 .… 8.63 ss 151–151T .… 8.75 s 151D .… 8.75

s 151D(2) .… 8.75 Northern Territory Anti-Discrimination Act s 16 .… 7.18 s 19 .… 7.18 s 88 .… 15.25 s 88(1)(b) .… 14.32 Criminal Code s 236 .… 7.95 Criminal Records (Spent Convictions) 1992 Pt 2 .… 7.18 Law of Property Act 2000 s 56 .… 3.62, 5.109 ss 211–213 .… 9.32 s 211 .… 9.32 Law Reform (Miscellaneous Provisions) Act 1956 s 12 .… 8.36 s 13 .… 8.36 ss 15–16 .… 8.57 s 22 .… 7.27, 13.34 s 22A .… 7.27, 13.34 s 22A(1) .… 7.27 s 22A(3) .… 7.27 Limitation Act 1981 s 12 .… 8.75

s 44 .… 8.75 Long Service Leave Act 1981 Ch 2 .… 8.9 Partnership Act 1997 s 5 .… 2.41 s 6(1)(b) .… 2.41 Work Health Act 1986 s 4 .… 8.63 Work Health and Safety (National Uniform Legislation) Act 2011 .… 8.57 Workers’ Rehabilitation and Compensation Act 1986 s 3 .… 14.79 Workers’ Rehabilitation and Compensation Act 2008 s 52 .… 8.75 s 53 .… 8.63 s 54 .… 8.75 Queensland Anti-Discrimination Act 1991 s 209 .… 15.25 s 209(1)(b) .… 14.32 Criminal Code s 442B .… 7.95 Criminal Law (Rehabilitation of Offenders) Act 1986 ss 5–9 .… 7.18 Industrial Relations Act 1999

Pt 3 .… 8.9 s 276 .… 4.13 Judicature Act 1876 s 4 .… 15.117 Judicial Review Act 1991 .… 15.104, 15.105 Law Reform Act 1995 s 5 .… 8.57 s 6 .… 8.36 s 7 .… 8.36 s 10 .… 8.57 Limitation of Actions Act 1974 s 11 .… 8.75 s 31 .… 8.75 Pacific Island Labourers Act 1880 .… 5.94 Partnership Act 1891 s 5 .… 2.41 s 6(1)(b) .… 2.41 s 6(3)(b) .… 2.41 s 36 .… 12.25 Property Law Act 1974 s 55 .… 3.62, 5.109 s 227 .… 3.86 ss 231–233 .… 9.32 s 231 .… 9.32 Queensland Institute of Medical Research Act 1945 s 18 .… 7.102

Work Health and Safety Act 2011 .… 8.57 Workers’ Compensation and Rehabilitation Act 2003 Ch 5 .… 8.75 s 32 .… 8.63, 14.79 s 34 .… 8.63 s 35 .… 8.63 s 130 .… 10.50 Workplace Relations Act 1997 s 420 .… 9.47 s 421 .… 9.47 South Australia Civil Liability Act 1936 s 6(5) .… 8.36 s 6(7) .… 8.36 s 22 .… 7.27 s 59 .… 7.27, 13.34 s 59(3) .… 7.27 Equal Opportunity Act 1984 s 96 .… 15.25 s 96(1)(a) .… 14.32 Frustrated Contracts Act 1988 .… 12.52 Industrial and Employee Relations Act 1994 s 68 .… 9.47 Law of Property Act 1936 ss 63–68 .… 9.32

s 63 .… 9.32 Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 s 3 .… 8.57 s 7 .… 8.57 Limitation of Actions Act 1936 s 36 .… 8.75 s 48 .… 8.75 Long Service Leave Act 1987 .… 8.9 Occupational Health Safety and Welfare Act 1986 .… 8.57 Pt 6 .… 8.56 s 6 .… 8.59 s 19 .… 8.61, 8.68, 8.70, 8.72, 8.73, 8.74 s 19(3)(i) .… 8.72 s 23A–24A .… 8.73 ss 58–59 .… 8.56 s 58(7)(c) .… 8.59 Partnership Act 1891 s 1 .… 2.41 s 2(I)(b) .… 2.41 s 2(III)(b) .… 2.41 s 33 .… 12.25 Public Service Act 2009 s 30 .… 2.39 s 48 .… 11.5 s 52 .… 11.4

s 54 .… 11.31 s 55 .… 11.33 s 57 .… 11.33 s 58 .… 11.33 ss 59–63 .… 11.33 Secret Commissions Prohibitions Act 1920 s 4 .… 7.95 Supreme Court Act 1935 s 30 .… 15.117 Workers’ Rehabilitation and Compensation Act 1986 ss 30–31 .… 8.63 s 30 .… 8.63 s 30A .… 14.79 s 54 .… 8.75 Tasmania Anti-Discrimination Act 1998 s 89 .… 15.25 s 89(1)(d) .… 14.32 Apportionment Act 1871 .… 9.32 s 5 .… 9.32 Criminal Code s 266 .… 7.95 Industrial Relations Act 1984 s 47(2) .… 11.39 s 51 .… 9.47

Judicial Review Act 2000 .… 15.104, 15.105 Limitation Act 1974 ss 5–5A .… 8.75 s 5 .… 8.75 s 5(3) .… 8.75 s 5A .… 8.75 s 5A(5) .… 8.75 Long Service Leave Act 1976 .… 8.9 Mercantile Law Act 1935 s 6 .… 11.18 Partnership Act 1891 s 6 .… 2.41 s 7(b) .… 2.41 s 7(c)(ii) .… 2.41 s 38 .… 12.25 Supreme Court Civil Procedure Act 1932 s 11 .… 15.117 Workers’ Rehabilitation and Compensation Act 1988 Pt X .… 8.75 s 25 .… 8.63, 14.79 Workplace Health and Safety Act 1995 .… 8.57 s 9 .… 8.70 Wrongs Act 1954 s 2 .… 8.57 s 3(1)(c) .… 8.36 s 3(2) .… 8.36

s 4 .… 8.57 Victoria Accident Compensation Act 1985 s 82 .… 8.63, 14.79 s 82(4) .… 10.50 s 83(1)(a) .… 8.63 s 83(1)(b) .… 8.63 s 83(1)(c) .… 8.63 ss 134–135B .… 8.75 Administrative Law Act 1978 .… 15.104, 15.105 Crimes Act 1958 s 176 .… 7.95 Equal Opportunity Act 1984 .… 13.29 s 136 .… 15.25 s 136(a)(ii) .… 14.32 Fair Trading Act 1999 .… 12.52 Frustrated Contracts Act 1954 .… 12.52 Instruments Act 1958 s 31A .… 3.86 Limitation of Actions Act 1958 s 5 .… 8.75 s 23A .… 8.75 ss 27D–27F .… 8.75 s 27D .… 8.75 Long Service Leave Act 1958

s 57 .… 12.30 Long Service Leave Act 1992 .… 8.9 Occupational Health and Safety Act 2004 .… 8.57 Pt 9 .… 8.56 Pt 11 .… 8.56 s 19 .… 8.74 s 20 .… 8.68 s 21 .… 8.61, 8.68, 8.70, 8.73 s 21(2)(c) .… 8.72 s 21(2)(d) .… 8.72 s 21(4) .… 8.56 s 22 .… 8.72 ss 26–27 .… 8.73 s 34 .… 8.59 Partnership Act 1958 s 5 .… 2.41 s 6(2) .… 2.41 s 8(3)(b) .… 2.41 s 37 .… 12.25 Public Administration Act 2004 Pt 4, Div 2, Subdiv 5A .… 11.33 s 16 .… 2.39 s 20 .… 2.39, 6.14, 11.4 s 20(2)(g) .… 11.33 s 22 .… 11.33 s 26 .… 6.14

s 33 .… 11.31 s 33(c) .… 11.32 Public Administration Regulations 2005 regs 6–10 .… 11.33 Supreme Court Act 1986 s 38 .… 15.117 ss 53–54 .… 9.32 s 53 .… 9.32 Wrongs Act 1958 s 23B(1) .… 8.36 s 24(2) .… 8.36 ss 25–26 .… 8.57 Western Australia Criminal Code s 529 .… 7.95 Equal Opportunity Act 1984 s 127 .… 15.25 s 127(1)(b)(i) .… 14.32 Industrial Relations Act 1979 s 50 .… 13.9 Law Reform (Contributory Negligence and Tortfeasors’ Contribution) Act 1947 ss 3A–4 .… 8.57 s 7(1)(c) .… 8.36 s 7(2) .… 8.36 Limitation Act 2005

s 14 .… 8.75 s 39 .… 8.75 ss 55–56 .… 8.75 Long Service Leave Act 1958 .… 8.9 Minimum Conditions of Employment Act 1993 Pt 5 .… 13.9 s 5(1) .… 5.94 ss 17B–17D .… 9.47 Occupational Safety and Health Act 1984 .… 8.57 Pt VI .… 8.56 Pt VII .… 8.56 s 3 .… 8.68 s 19 .… 8.61, 8.68, 8.70 s 19(1)(a) .… 8.72, 8.73, 8.74 s 19(1)(d) .… 8.73 s 19A .… 8.56 ss 22–23 .… 8.73 Partnership Act 1895 s 7 .… 2.41 s 8(2) .… 2.41 s 8(3)(b) .… 2.41 s 46 .… 12.25 Property Law Act 1969 s 11 .… 3.62, 5.109 ss 130–134 .… 9.32 s 130 .… 9.32

Public Sector Management Act 1994 .… 2.39 s 64 .… 2.39 Spent Convictions Act 1988 s 18 .… 7.18 Supreme Court Act 1935 s 25 .… 15.117 Workers’ Compensation and Injury Management Act 1981 s 5(4) .… 14.79 s 19(1) .… 8.63 ss 93A–93S .… 8.75 Workers’ Compensation and Rehabilitation Act 1981 s 5 .… 8.63 ss 18–19 .… 8.63 s 19(1) .… 8.63 United Kingdom 3 and 4 W and M, c 11 s 7 .… 1.29 s 8 .… 1.29 s 9 .… 1.29 4 Geo 4, c 29 s 1 .… 1.34 5 Eliz c 4 .… 11.41 9 W and M, c 30 s 4 .… 1.29 13 Geo 2, c 29

s 7 .… 1.34 13 and 14 Car 2, c 12 .… 1.29 20 Geo 2, c 19 s 3 .… 1.34 25 Ed III Stat 1, Cap II .… 11.40 25 Ed III, Stat 1, Cap V .… 11.40 25 Ed III, Stat 1, Cap VII .… 11.40 34 Ed III Cap X 1360 .… 11.40 Apportionment Act 1870 .… 9.32 s 2 .… 9.32, 9.33 s 3 .… 9.33 Apprentices Act 1814 .… 1.46 Chancery Amendment Act 1958 .… 15.114 Contracts of Employment Act 1963 .… 5.76 Copyright Act 1911 s 5(1) .… 7.110 Copyright Act 1956 s 4(4) .… 7.110 Employers and Workmen Act 1875 .… 1.26, 1.28 s 3 .… 9.51 Employment Protection (Consolidation) Act 1978 s 74(4) .… 14.101 Employment Relations Act 1996 s 1 .… 11.5 Employment Rights Act 1996 ss 1–4 .… 5.4

s 95 .… 12.29 s 136 .… 12.29 s 138 .… 6.23 s 139 .… 6.18 Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations .… 11.19 Human Rights Act 1998 .… 7.132 Industrial Relations Act 1971 .… 5.108 Lord Cairns’ Act 1858 .… 14.2, 14.13, 15.65, 15.114, 15.117, 15.118, 15.119, 15.124 Master and Servant Act 1747 .… 1.26, 1.33, 1.37, 1.47, 11.41 Master and Servants Act 1823 .… 9.51, 11.41 Master and Servants Act 1867 .… 9.51, 11.41 Ordinance of Labourers 1349 (23 Ed III, Stat 3) .… 1.26, 11.40 Parish Apprentices Act (56 Geo 3, c 139) s 9 .… 1.43 s 10 .… 1.43 Patents Act 1977 s 39(1)(a) .… 7.102 Redundancy Pay Act 1965 .… 3.12 Servants Characters Act 1792 .… 7.19 Slave Trade Act 1807 .… 1.31 Slavery Abolition Act 1833 .… 1.31 Statute for Settlement and Removal 1662 .… 1.29, 11.41 Statute of Artificers 1562 (5 Eliz, c 4) .… 1.26, 1.31, 11.41, 11.46 s 4 .… 1.33 s 5 .… 1.34

s 6 .… 1.34 s 7 .… 1.33 s 8 .… 1.34 s 9 .… 1.41 s 10 .… 1.34 s 11 .… 1.34 s 24 .… 1.33 ss 25–32 .… 1.27 Statute of Frauds 1677 .… 1.36, 11.41 s 4 .… 11.18 Statute of Labourers 1351 (25 Ed III, Stat 1) .… 1.26, 11.40 Ch I .… 11.40 Statute of Legal Settlement (1 Edw VI, c 3) .… 1.31 Trade Union and Labour Relations Act 1992 s 179 .… 5.108 Trade Union and Labour Relations (Consolidation) Act 1992 s 236 .… 15.19, 15.56 Truck Act 1831 (1 and 2 Will 4, c 37) .… 1.35 Truck Act 1896 .… 9.47, 9.52 Vagabonds Act 1597 (39 Eliz, c 4) .… 1.31 United States of America Norris-LaGuardia Act 1932 .… 12.26 Second Restatement of Agency .… 8.51 International ILO Convention Concerning Termination of Employment at the

Initiative of the Employer 1982 Art 11 .… 11.36 International Covenant on Civil and Political Rights Art 17 .… 7.14

Contents Preface Table of Cases Table of Statutes Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Chapter 10 Chapter 11 Chapter 12 Chapter 13 Chapter 14 Chapter 15 Chapter 16 Index

Introduction and History Who is an Employee? Formation of the Contract Vitiating Factors, Illegality and Misleading Conduct Sources of the Parties’ Rights and Duties Alteration of the Contract The Duties of Employees The Duties of Employers Performance of the Contract Termination for Breach and Repudiation Termination by Notice and Agreement Termination by Frustration Changes in the Employing Enterprise: Redundancy and External Administration Damages for Breach of Contract Equitable Remedies Post-employment Obligations

[page 1]

Chapter 1 Introduction and History Introduction Employment contracts and the law of contract The archetypal and distinguishing features of employment contracts A snapshot of the Australian workforce National system employers and employees and the Fair Work Act The Many Histories of the Contract of Employment The master and servant model Service, freedom and contract: 1750–1850 Misbehaviour and desertion: 1750–1850 The emergence of a contractual model: 1850–1950

INTRODUCTION Employment contracts and the law of contract 1.1 The general principles of contract law apply to employment contracts in particular. To the extent that there was ever a legal dispute about this proposition, the outcome of that battle has been determined: The progression, if it be a progression, of the contract of employment from one primarily concerned with status to one of contract has seen a trend which results in the treatment of a contract of employment in the same way as any other contract. There are, of course, differences. Those differences arise from the nature of contract of employment, its historical development and the incidents that mark it as a contract of a particular type. Nevertheless, to the extent that the particular and peculiar features of a contract of employment do not require differentiation, a contract of

[page 2] employment should be treated no differently from any other contract. Even in those matters that require differentiation to take account of the special nature of the contract of employment, there must be coherence between the principles adopted in relation to a contract of employment and other contracts. Some of the matters of differentiation will be such that the contract of employment will be treated identically with some other special contracts.1

Employment contracts have certain distinctive features, just as there are distinctive features of different types of contracts like insurance contracts, charter parties, and contracts for the sale of goods. When applying general contractual and equitable principles to contracts of those special types courts should, and to a large extent do, have regard to those features: see 1.5–1.20. The historical development of the legal regulation of work has also shaped employment law. Statute has in the past moulded the rules regulating the employment contract and continues to exert a strong influence on the development and application of principles in the field. This text examines how the general rules that are applicable to all contracts are modified or altered in effect when applied to employment contracts and how those rules reflect, and are sculpted by, the historical development of employment law, its statutory framework and the distinctive features of employment.

The focus and scope of this text 1.2 The primary aim of this text is to help practitioners and students better understand the rules of common law and equity applied by superior courts in resolving disputes about rights and duties created by employment contracts. There are over 100 statutes in Australia that govern work, but this text will not attempt to exhaustively describe their operation. There are a number of excellent books about labour law that describe the statutory [page 3] regulation of work in detail.2 As its title indicates, this text has a more limited focus. Throughout the text there is a discussion of the statutory supplementation, modification or exclusion of particular rules applied by the

common law and in equity, particularly for employees engaged under the Fair Work Act 2009 (Cth). The text also examines the relationship between the contract of employment and the rights and obligations created by statutes and collective agreements: see 5.80–5.103. 1.3 This text describes the law as it currently is. It will not declare a utopian vision of how the law should be, or present an overarching thesis about how the law should develop. It adopts the moderate premise that more progress can be made towards understanding and reforming the current rules if they are clearly identified. Occasionally there are critiques about the operation of particular principles. These critiques are identified in the text and are almost always preceded by the introductory words ‘by way of comment’. In areas of great uncertainty and change, such as the law governing good faith obligations, the competing views are set out and a preference is stated. This is not a text about policy. Nor is it a text that examines the dynamics of the relationship of power on which the employment contract is founded. The law of contract has, in practice, a limited role in resolving disputes between parties in an employment relationship. Those disputes are resolved, in the overwhelming majority of circumstances, by reference to a range of non-legal, economic, social and other factors. The rules of law and equity applied by superior courts have legal significance despite the fact that they may have limited social utility in resolving most disputes arising during employment. This is not a text about the law of work. It does not cover the vast amount of unpaid work, principally performed by women, in the home. Nor does it concern itself with the legal arrangements governing independent contractors. It does not analyse how the rules governing employment contracts are shaped by broader social, economic and political forces in the labour market. Nor does it examine the relationship between the employment contract and other fields of regulation such as taxation, training, immigration and social security. Each of these areas is an important field of study that assists in understanding the limits, content and operation of the law of employment contracts. This text is more modest in its ambition as it is only a text about the law of employment contracts. [page 4]

Definitions used in this text 1.4 One of the difficulties in this field is that courts and practitioners often use terms that have no fixed meaning, or are conclusionary, rather than adopting the terms used in other fields of contract law. Terms such as ‘constructive dismissal’ and ‘condonation’ state the consequences of the operation of a more specific, unarticulated legal principle rather than indicating the application of any distinct and independent principle. Such terms are avoided. Throughout this text there are 75 terms that are used consistently. They are listed under the definitions tab in the Index. A distinction is maintained throughout this text between the master and servant relationship and the employment contract. The former refers to the relationship of service that existed prior to the turn of the twentieth century: see 1.26–1.47. Consistent with modern practice, the term ‘Crown servants’ is used to refer to employees of the Crown. The terms ‘inferior’ and ‘superior’ servant are used to refer to the distinction, prevalent before about 1900, between different types of servants: see 1.27 and 1.28. The adoption of these terms is not an endorsement of the assumption implicit in this taxonomy. The fact that the descriptions of some of the more brutal historical practices, such as whipping servants, are not accompanied by a condemnation should not be read as silent support for those practices. The employer is referred to in this text as ‘it’. Gender-neutral language has been used throughout the text with two exceptions. Gendered terms in quotations are retained. When describing the master and servant relationship it is assumed that the master is a man.

The archetypal and distinguishing features of employment contracts 1.5 Courts should, and to a large extent do, have regard to the distinctive features of employment contracts when resolving disputes. The features discussed in 1.6–1.9 are present in almost all employment contracts, but are not exclusive to them. The other features discussed in 1.10–1.16 are present in most employment contracts. It is the combination of these features that makes the employment contract unique. The list of features below is not intended to be exhaustive.

The personal nature of the employment contract 1.6 Employment contracts involve personal relationships and the personal performance of work. An employment contract is the only type of contract that requires at least one of the parties to be a human, [page 5] other than a contract for marriage. Although some cases have suggested that it is theoretically possible for an employee to be a corporation or a partnership, as a matter of practice a contract is far less likely to be one of employment where the worker is a corporation or a partnership, or is able to delegate performance to a third party.3 The personal nature of the contract affects the operation of the contractual and equitable rules governing the inference of an offer and acceptance, the application of the doctrine of undisclosed principals, the effect of death on the contract, the need to imply and the content of the implied term of trust and confidence, whether the contract can be vicariously performed, whether the personal obligations in the contract may be assigned, whether a term in restraint of trade is reasonable, and whether coercive relief should be granted to compel service.4 One aspect of the personal nature of the contract is a legal recognition of what might be called the attributes of humanity of the employee. Humans are emotional and exhibit frailty and this is relevant in a range of contexts, including assessing whether a resignation uttered in a state of distress is effective. The age of the employee and his or her state of health are also relevant in assessing the length of reasonable notice.5

Control and ownership of the work 1.7 Employment contracts involve the control of one person by another where the fruits of the contracted work belong to the employer. The existence of the right to control is one of the defining features of employment.6 There are limits though to the employer’s right to control aspects of the private lives of its employees. Historically, masters had complete dominion over their

inferior servants.7 Employers have a right to alter the method of the performance of work in a manner consistent with the other terms of the contract and may be able to direct an employee to perform work outside of the scope of the employment to deal with emergencies.8 [page 6] The limits to the employer’s right of control are reflected in the concepts governing the scope of the employment, the requirement that directions be reasonable, the circumstances in which conduct will be found to be incompatible with the employment, the circumstances in which an employer can validly direct an employee about behaviour outside of working hours, the limits on the employer’s ownership of inventions of the employee, limits on the employer’s power to change the manner of the performance of the work, limits on the power to change the duties of the employee, and limits on the power to change the location of the work.9 The law recognises the interest of the employer to own the product of the employee’s contracted work and to direct an employee, within the limits of the contract, to perform work. This is reflected in the rules governing the obedience to directions, resignations to secure a maturing business opportunity of the employer, and the implied term concerning the ownership of contracted work.10

Freedom to contract 1.8 Employment contracts are almost always formed voluntarily.11 The right of an employee to choose his or her employer has long been respected by the common law, and for hundreds of years was one of the few established rights of servants.12 This right is recognised in the approach of the law to assignment, vicarious performance of contracts, specific performance, and the enforceability of contracts for permanent employment.13 It is also relevant in the termination of employment and is apparent in the rules governing the right to prepare to leave employment, the circumstances in which the law will prevent an employee competing with the employer after the termination of the employment, the right to give notice and the right to seek other employment.14

[page 7]

The fiduciary relationship of employment 1.9 The relationship of employer and employee is a fiduciary relationship in which employees, in relation to some acts, owe the employer some fiduciary obligations.15

Dignity and self-esteem 1.10 Work often provides employees with a sense of dignity and self-esteem, and an opportunity to further their career. Labour is not a commodity. A person’s employment is usually one of the most important things in his or her life. It not only gives a livelihood but in many cases is also a calling; it is often crucial in defining the identity of an employee. The law recognises this social reality.16 It is reflected in the implied term of trust and confidence: see 8.13. Employees have an interest in pursuing their career and developing their skills. This interest is reflected in the rules governing the right to prepare to leave employment, the right to give notice, the right to seek other employment, the right to terminate where there is a significant change in the agreed duties and the right to be provided with work in some circumstances.17

The duration and evolution of contracts 1.11 Employment contracts tend to be long term and are not static; instead, they are evolving. They are responsive to changes in the way the work is performed. Even in the absence of these changes, some of the rights of the parties also change the longer the contract runs. The law’s willingness to respond to the evolution and duration of the contract is reflected in a number of areas: the consideration of the totality of the relationship and the contract’s performance when characterising its nature; a practical approach to inferring agreement in the absence of an identifiable offer and acceptance;

the enforcement of uncertain and incomplete contracts that the parties have acted on; the inference of consideration to support variations; a recognition that the parties’ practices can change the scope of the employment; [page 8] the consideration of the parties’ previous relocations when determining the employer’s power to determine the location of employment; the recognition that an employee’s duty to invent alters to reflect changes in the employee’s work; a reticence to find that contracts are frustrated when they become unprofitable; the recognition that longer service will mean the contract is less likely to be frustrated; the recognition that a term in restraint of trade that may be reasonable if agreed at the commencement of employment may be unreasonable if agreed in the final weeks of employment, and that a term in restraint of trade that was unreasonable at the commencement of employment may become reasonable owing to changes during the course of employment; the recognition that the scope of the employer’s protectable interests under the restraint of trade doctrine may expand or contract during the employment; and the recognition that the period of reasonable notice grows longer as the service grows longer, so should be assessed at the contract’s termination rather than at its formation.18

Employment relationships tend to be informally regulated 1.12 Employment contracts tend to be informally regulated by express terms. The informality of the contract is relevant when taking into account the

totality of the relationship and not only the written terms when determining if the contract is one of employment, when considering whether the agreed terms indicate an intention to form a contract, when inferring agreement from remunerated service, when determining whether the essential terms are complete and certain, and when deciding the implication of terms implied in fact.19 [page 9]

Economic dependence and power 1.13 Employment relationships tend to involve a disparity of power and economic dependence. Employees are usually economically dependent on the employer, and employees are not in business on their own account. The economic dependence of the employee is one of the defining features of employment.20 Employment usually provides the employee’s sole source of income. Changing an employer often has significant adverse financial and social consequences for the employee. A change often means employees lose the benefits of continuity of employment. These characteristics are relevant to the readiness of courts to infer an affirmation from continued employment following an employer’s repudiation or serious breach, to infer acceptance of a repudiation or serious breach, and the significance accorded to an express term categorising the relationship.21 1.14 Judicial recognition of the disparity of power in employment is one of the foundations for a variety of limitations on an unqualified freedom to contract. It is manifested in the doctrine governing terms in unreasonable restraint of trade and in the interpretation of terms in restraint of trade.22 The disparity of power, when it exists, is also relevant in a variety of other contexts: it forms part of the surrounding circumstances that are taken into account when ascertaining the parties’ intentions; it is relevant to assessing whether the consideration to support a variation is extracted under unfair pressure;

it is considered when determining if illegitimate pressure has been applied under the doctrine of duress; it is relevant in determining if the employee suffers from a disability for the purposes of the equitable doctrine of unconscionability; and it is relevant in determining if a restraint of trade term is reasonable both during and after the termination of the employment.23 The legal recognition of the power disparity and economic dependence has limits. The law does not demand that consideration be adequate to support a contract,24 being an employee is not in itself a special disability [page 10] for the purposes of the equitable doctrine of unconscionability,25 and employment is not a relationship of dominion or ascendency for the purpose of the doctrine of undue influence.26

The individual contract exists in a social context 1.15 Employment contracts are usually performed in a social context in which many employees are performing similar work and many of the principal terms are not negotiated individually. Pay rates for about 43% of Australian employees are established by collective agreements and a further 15% have their pay rates established by awards.27 These industrial instruments cover a range of conditions that are not regulated by express contractual terms. The law takes into account the collective determination of conditions in a number of areas. It is relevant when determining the intention of the parties as it forms part of the surrounding circumstances in which the contract is made, when determining if a document provided by an employer amounts to an offer, and when assessing if an industrial instrument is incorporated by reference into the contract.28 The law also pays some regard to the social context of employment, including by finding a breach of the implied term of mutual trust and confidence when an employer, without reasonable and

proper cause, singles out the employee for less advantageous treatment.29

The contract exists within a statutory context 1.16 Employment contracts are formed, performed and terminated in a statutory context. All employment contracts in Australia are partly regulated by at least a dozen statutes. For the overwhelming majority of Australian employees the Fair Work Act 2009 (Cth), the Corporations Act 2001 (Cth), anti-discrimination Acts, the Australian Consumer Law (Competition and Consumer Act 2010 (Cth) Sch 2) and workers’ compensation laws all provide part of the regulatory context of employment. A non-exhaustive list of the significant fields in which statutes directly regulate or indirectly shape the approach of the common law to employment issues includes: [page 11] who is an employee;30 the treatment of terms characterising the relationship;31 misleading conduct in the offering and termination of employment;32 coercion and unconscionable conduct concerning employment;33 information provided to employees on commencement and through the performance of the contract;34 the duties of employees concerning the use of information;35 the use of the employee’s position and intellectual property rights;36 the duties of employers concerning a range of minimum conditions and occupational health and safety;37 how wages are earned and when they must be paid;38 the effect of industrial action on the contract;39 the suspension of the performance of the contract through the standing

down of employees;40 the rights of unfairly dismissed employees; the right to notice of termination;41 the consequences of frustration;42 the right to redundancy pay and consultation about redundancies;43 and the effect of insolvency on the enterprise.44 Anti-discrimination laws govern all stages of employment including who is offered employment, the terms on which it is offered, adverse action in the performance of the contract, and the termination of the contract. [page 12]

Methods of the common law used to recognise the distinctive features 1.17 The common law uses a variety of methods to afford various levels of recognition to the distinctive features of employment contracts discussed in 1.6–1.16. Not all features are recognised for all employees or in all circumstances. Some features, such as those relating to a disparity of power or informal regulation, will not be present in contracts for more senior employees. Not all features are recognised by the same methods. 1.18 One method used by the law is the implication of terms, such as the implication of a duty to obey certain directions and the duty of fidelity.45 The law also considers the distinctive features of employment contracts when giving content to terms that are inherently imprecise. For example, the fact that work often provides an employee with a sense of dignity is reflected in the content of the implied term of trust and confidence.46 Equity also imposes certain duties, such as the equitable duty of confidence and fiduciary obligations, that reflect the distinctive features of employment.47 The law also infers the consideration provided by the parties. This is a similar method, with slight differences, to the implication of a term implied

by law. Employment contracts do not ordinarily state that they are a bargain where wages are earned by service, but the law infers from the nature of the relationship that the payment of wages is a dependent obligation. Similarly, courts infer from the nature of the relationship between an employee engaged as an entertainer and his or her employer that the employer is obliged to provide work. It is implicit in the cases concerning the employee’s work outside of ordinary hours that an employer, at least for more junior employees, buys the employee’s time, whereas for more senior employees it also often buys a higher degree of loyalty.48 In the absence of express terms governing the matter in these cases the courts ask the question: having regard to the nature of the arrangement, what is the consideration provided by the parties? What has each implicitly agreed to do? Over the last century the answer to these questions has changed. By way of comment it is suggested that as courts increasingly recognise that work often provides employees with a sense of dignity and self-esteem and an opportunity to progress in their career, [page 13] they are slowly moving towards a conclusion that employers implicitly promise employees a good deal more than simply wages.49 1.19 The last method is the narrow interpretation of express terms that seek to modify an ordinary feature of employment. Throughout this text reference is made to the proposition that particular rules can be modified or excluded only by the use of clear words. For example, ordinarily an employee owes a duty of confidence. Courts are loath to interpret express terms in a manner that would narrow or exclude that duty. The same approach is apparent when courts approach express terms that narrow or exclude the duty of fidelity, the mutual duty of trust and confidence, the duty of good faith, the nature of the right to wages as a dependent obligation, the right to earn wages by substantial rather than exact performance of the employee’s obligations, the right to reject part performance, the right of the parties to give notice and the right of the parties to terminate the contract.50 Similarly, courts often interpret express terms governing an obligation as being co-extensive with an implied

term on that subject. This approach is adopted when interpreting express terms governing the protection of confidential information and the grounds of dismissal.51

A snapshot of the Australian workforce 1.20 There are about 9.175 million employees in Australia. Around 5% of the labour force are unemployed.52 Approximately 1.85 million employees are engaged in the public sector and roughly half of these employees are engaged under the Public Service Act 1999 (Cth) or its state equivalents, with most of the others engaged by agents of the Crown, statutory corporations and councils.53 About 70% of employees are engaged full time in their main job. Of the 30% engaged in less than full-time employment, roughly half are casuals and half are part-time employees. These non full-time employees work an average of 16 hours per week and about 6% hold two or more [page 14] jobs. Over 30% of all employees work more than 40 hours per week. Approximately 60% of employees have a spouse or partner and about 30% have dependants. Twenty-seven per cent of employees were born overseas and 16% were born in a country where English is not the main language.54 Many Australian employees now perform work from home or at a location distant from the employer’s premises. About 24% of workers perform work at home in their main or second job, and 41% work at two or more locations in their main job.55 Approximately 4% of employees are engaged on fixed term contracts. Over 6% of these employees have been employed by their employer for more than 10 years and 72% of fixed term employees expect to have their contract renewed. About 23% of all employees have been with their current employer for less than 12 months and 20% have been employed with their current employer for more than 10 years. Ninety per cent of all employees expect to

be employed by their current employer in 12 months’ time.56 Between 1966 and 1975 the average duration of unemployment was between three and 10 weeks. For the last 20 years the average duration has hovered around the 35week mark, but peaked in 1993 at just over 60 weeks. The main difficulty for unemployed workers over 45 is that they are considered too old for jobs.57 There are around 1,100,000 independent contractors58 in Australia, about 75% of whom are males. About half of the independent contractors are engaged in either the construction industry or the professional, scientific and technical services industries. Around 77% of independent contractors are able to work on more than one active contract, 60% [page 15] have authority over their own work and 85% have some say in their start and finish times. Sixty-eight per cent are able to subcontract work to others and 79% have no employees. The proportion of independent contractors increases with age, with just 3% of 15–24 year olds in the labour force working as independent contractors, compared with 20% of those aged 65 years and over.59 In terms of education and study, the highest level of achievement for 50% of Australians aged 15–64 is Year 12 of high school or below. Approximately 23% have achieved a Bachelor’s Degree or above and the highest level of achievement for 17% was a Certificate III or Certificate IV. About 2.8 million members of the labour force are enrolled in a course of study, roughly 20% of the total labour force in Australia. Around 40% of those studying were enrolled in universities, 27% at TAFEs and 21% at secondary schools. There are about 170,000 apprentices in Australia.60 There are approximately 120 modern awards and 25,000 enterprise agreements in Australia. Over 97% of agreements made under the Fair Work Act are single enterprise non-greenfields agreements. They cover around 2.5 million employees — just over 25% of all employees. In roughly 50% of the agreements a union is also covered. About two million employees are covered by agreements in which a union is also covered by the agreement.61 Pay rates for about 43% of Australian employees are established in collective

agreements and a further 15% have their pay rates established by awards.62

National system employers and employees and the Fair Work Act 1.21 Throughout this text reference is made to national system employers and national system employees. The Fair Work Act principally governs national system employees, though some provisions extend further. A national system employee is a person employed by a national system employer. [page 16] The meaning of national system employer reflects the constitutional heads of power that are relied on by the Fair Work Act. That Act principally relies on the power of the Commonwealth to make laws concerning trading and financial corporations. It also relies on the referrals of power made under s 51(xxxvii) of the Constitution by Victoria, New South Wales, Queensland, South Australia and Tasmania, which are each subject to a patchwork of inclusions and exclusions.63 Broadly speaking, a national system employer is a trading or financial corporation, the Commonwealth or a Commonwealth authority, an employer engaging in certain types of trade or commerce beyond the borders of any one state, private sector employers in all jurisdictions other than Western Australia, and public sector employees in the Commonwealth, Victoria and the territories. After the referral of powers by most states the federal system now probably covers about 90% of employees in Australia.64 1.22 A comprehensive examination of the Fair Work Act is beyond the scope of this text. Part 2-2 of that Act contains the National Employment Standards (NES), which are minimum terms and conditions that apply to all national system employees: see 8.2–8.11. Part 2-3 of the Act governs modern awards. Modern awards cover most industries. Part 2-4 concerns enterprise agreements. An enterprise agreement is made at the enterprise level and provides terms and conditions for those national system employees to whom it applies. The relationship between the contract of employment, the NES,

modern awards and enterprise agreements is discussed in 5.80–5.103. Chapter 3 of the Act sets out rights and responsibilities of national system employees and employers. Part 3-1 governs general workplace protections concerning the exercise of workplace rights, freedom of association and involvement in lawful industrial activities, and protection from coercion and discrimination. Part 3-2 deals with the unfair dismissal of national system employees. Part 3-3 deals mainly with industrial action by national system employees. The effect of the provisions governing industrial action on the performance of the contract and the earning of wages is discussed in 9.39. [page 17]

THE MANY HISTORIES OF THE CONTRACT OF EMPLOYMENT65 1.23 The contract of employment emerged in the twentieth century as a conglomeration of a variety of distinct relationships. The binary divide between employees and independent contractors is a quite recent invention, developing in the latter part of the nineteenth century. The major divisions that were used to define a worker’s obligations prior to 1850 rested on whether the worker was a domestic servant, servant in husbandry, labourer, artisan, apprentice, journeyman or superior servant. What is now called the contract of employment was unheard of prior to 1850. The phrases ‘contract of employment’ and ‘employer and employee’ first appear in the law reports in the early 1850s.66 There was no one relationship from which the modern contract of employment evolved. Nor was there one relationship that exhibited all of the features now associated with the contract of employment, such as the employee’s obligations of fidelity and obedience. During the late nineteenth and early twentieth centuries there was a progressive merger of different types of relationships, largely in response to legislative changes. Associated with that merger, some obligations that had been applied to limited categories of worker came to be applied to all types of employees and some obligations applied to many broad categories of worker ceased to be applied to any employee.

1.24 Many of the enduring difficulties of the contract of employment can be traced to a common source: its many histories. For example, trust and confidence were reposed in a superior servant but not a menial servant. This is now reflected in the difficulties in explaining the extent [page 18] of a junior employee’s duty of fidelity: see 7.34. A domestic servant was a member of the household of the master and was obliged to move residence with the master, but a superior servant was not. This is now reflected in the difficulties in identifying the extent of an employee’s obligation to alter the place of work when the employer’s factory moves: see 6.18. A menial servant was subject to the complete dominion of the master, 24 hours a day and seven days a week. This has led to the difficulties in defining the extent of the employee’s obligations for conduct occurring outside of working hours: see 7.137. Charting the evolution of the employment contract over the last 300 years does not reveal a shift from status (master and servant) to contract. During the whole of that period agreements for the performance of work were regulated, to an extent, by the law of contract. However, there is a clear, discernible trend towards applying the full range of the general principles of contract law to employment contracts. Agreements for the performance of work have for over 700 years been heavily regulated by statute. The heyday of freedom of contract, when the parties were free to make their own arrangements unregulated by the state, is a mythical period that never existed in the United Kingdom or Australia. 1.25 The discussion below is a brief history of the evolution of the contract of employment and does not seek to integrate an understanding of labour laws, the regulation of the labour market or collective action. It is necessary in the discussion below to adopt the language of the times and distinguish between servants who were engaged under the master and servant model (inferior servants) and superior servants who were not. No attempt is undertaken to comment on the inhumanity and barbarity of the laws.

The master and servant model 1.26 The year 1349 is traditionally regarded as the start of most short histories of employment law. The Black Death that began to spread through the United Kingdom that year eventually killed 30–50% of Europe’s population. With a shortage of labour came demands for higher wages. In 1351 the United Kingdom Parliament introduced the Statute of Labourers to suppress wages. It required service by the year, or by other usual terms, and not by the day.67 This statutory term, re-enacted and [page 19] extended in the Statute of Artificers 156368 evolved into a presumption of yearly hiring which gradually weakened through the 1800s. It was finally authoritatively rejected in the United Kingdom in 1969 and in Australia in 1996.69 The statute contained a series of provisions to regulate the labour market, including obligations to serve, provisions for punishment and forced labour for those who refused to serve, and certain price controls. It operated alongside custom and regulation of the labour market by towns and guilds and was amended 13 times before 1747. The essential elements of the master and servant model of engagement were established by the Master and Servant Acts enacted in 1747, significantly amended in 1758, 1777, 1823 and 1867 and replaced in the United Kingdom in 1875 by the Employer and Workmen Act. The Master and Servant Acts applied to a significant majority of workers between 1747 and 1875. They were based largely on the scheme established by the Statute of Artificers 1563. The Acts, supported by the Poor Laws, established the statutory framework that governed the relations of masters and inferior servants. In Australia the Master and Servant Acts continued in force until the 1970s in most states and continued to be regularly enforced in the twentieth century.70

The different types of servants: 1750–1850 1.27 The crucial modern distinction in employment law is between the

employed and the self-employed. That binary divide became important from about the late nineteenth century. Prior to that time the rights and obligations of those who performed work depended on the particular types of servant being considered. The common law was formerly more adept at drawing distinctions between different types of agreements for the performance of work. During the period 1750 to 1850 England was primarily a rural and agricultural economy, although it grew increasingly industrialised and urbanised.71 Agricultural work was performed by two main types [page 20] of inferior servant: servants in husbandry and labourers. Servants in husbandry tended to be adolescents transitioning to adulthood when they would establish their own households and, often, become a labourer. The distinction between a servant in husbandry and a labourer was: … a servant was hired by the year, lived with his or her master, and was unmarried; a labourer was hired by the day, week or by the task, had his or her own residence, and was either married or still living with his or her parents.72

Domestic service, after agricultural work, was the second-largest occupation in England between 1750 and 1850. Like servants in husbandry, domestic servants were menial servants. A menial servant was one who was a member of the master’s household. During this period about a third of British households engaged domestic servants. Most engaged fewer than five servants, often to assist their masters in the family business.73 Apprenticeships were principally an urban form of engagement for the young. The distinction between an apprentice and other types of inferior servant was that an apprentice was engaged to be taught a trade and not to serve generally.74 Until widespread reforms in apprenticeship in 1814, masters of apprentices provided board and training for the period of the apprenticeship, usually established by a deed for a term of seven years.75 After completing an apprenticeship workers in many trades could become a journeyman engaged by the master. A journeyman was not a menial servant, and becoming a journeyman was usually the final step before being admitted

to a guild as a master.76 Increasingly over the late eighteenth and nineteenth centuries post-apprenticeship skilled workers were engaged within masters’ firms and factories rather than performing work independently in ‘cottage industries’.77 [page 21] Menial servants (domestic servants and servants in husbandry) and apprentices had a number of common features. As members of their master’s household they were entitled to be maintained by their master, in sickness and in health, throughout the year.78 They were provided board and lodging. Menial servants were ordinarily engaged on a yearly hiring.79 They were obliged to move with the master’s house, but in the absence of an agreement to the contrary were not obliged to move when their service was attached to the land or to move out of the kingdom where they would be beyond the protections of the laws of England.80 Labourers and artisans were servants who were not members of the master’s household.81 Labourers tended to perform work of lower status than skilled artisans,82 and many were industrial workers. They were not subjugated to the control of the master in the same way as menial servants. Some were akin to what would now be described as independent contractors. The master and servant model governed the engagement of labourers and most artisans when they were obliged to exclusively serve the master for the term of the engagement.83 Over the nineteenth century this class of worker was best suited for the emerging capitalist economy and the concept of employee was in part formed by synthesising the labourers and artisans category with that of menial servant.84 1.28 The master and servant model of engagement regulated servants in husbandry, domestic servants, apprentices, journeymen, labourers and most artisans. It did not regulate the engagement of superior servants. These were the professional, managerial and clerical class and included [page 22]

some superior members of a master’s house such as stewards, factors, clerks, coachmen, governesses and lady’s maids. In larger households there was a hierarchy of servants which was divided between upper and lower servants, the superior and the inferior. Superior servants and holders of offices were outside the scope of master and servant laws and remained outside the scope of the Employers and Workmen Act 1875.85 One difference between superior and inferior servants lay in the master’s right to command and the inferior servant’s obligation to obey. As Baron Bramwell observed in Yewens v Noakes, ‘a servant is a person subject to the command of his master as to the manner in which he shall do his work’.86 In that matter the clerk, being a superior servant, was not obliged to obey the master and was therefore not a servant.

The Poor Laws and the master and servant model 1.29 The Poor Laws established a system for the relief of the poor and played a crucial part in the history of the law of employment. The Old Poor Laws were enacted in the early seventeenth century, though earlier analagous forms of regulation stretched back to the late middle ages. The Poor Law system supported paupers who had ‘settled’ in a parish. Paupers were those without certain means of support who were too old, young or ill to work. A settlement was a permanent, indestructible right to take the benefits of the Poor Laws in any given parish.87 That system was altered almost beyond recognition in 1834 and was ultimately replaced by the welfare state in the mid-twentieth century. The Poor Law system was administered by overseers at a parish level supported by local taxes. The approximately 1500 parishes across the United Kingdom engaged in an enormous amount of litigation arising from the Statute for Settlement and Removal 1662, one of the parts of the Poor Laws. A parish was responsible for supporting those who were settled there and paupers who had not gained a settlement could be removed to their parish of settlement. The principal purpose of the litigation was to remove paupers from the parish and thereby limit the tax burden on ratepayers.88 Settlement could be acquired by birth, marriage or parentage. One means of gaining a settlement was for an

[page 23] unmarried pauper to serve under a hiring for a year in the new parish.89 Another was for an apprentice, bound by an indenture, to serve for 40 days in that capacity. The central issues litigated in scores of cases about settlement and removal were whether there was an agreement to be hired for a year and whether the servant served for a year: see 1.38–1.39.

Service, freedom and contract: 1750–1850 1.30 Writing in the 1760s, Sir William Blackstone called the master and servant relationship a ‘contract’, yet analysed it as a relationship of private life akin to husband and wife, parent and child, guardian and ward.90 It is part of the received, though flawed, wisdom in employment law that the evolution in the common law concerning employment is a classic illustration of the shift from status (master and servant) to contract (employment). It is true that the evolution from the relation of villein or serf to employee involves a change from status to contract. But whether the change from servant to employee is one of status to contract depends a great deal on what is meant by status and the notion of freedom.91 Engagement as a superior servant was clearly contractual for many centuries.92 The position of other servants is more complex as a range of statutory and common law regulation limited their freedom: see 1.31–1.35.

Slavery, serfdom and forced labour 1.31 Under the master and servant model, servants were free in at least one sense: they were not slaves. According to the Domesday Book, about 10% of the population of England were slaves in 1086. By the twelfth century slavery was a dying institution, with the status gradually merging with that of other forms of bonded labour where the obligation to perform service for the manorial lord was tied to the serf’s interest in land. The social changes wrought by the Black Death, and the aftermath of the Peasants’ Revolt of 1381, hastened the demise of this form of unfree labour.

[page 24] By the fourteenth century wage labour, rather than service from a serf, was the dominant form of labour. Manorial labour obligations were almost nonexistent by the time the Statute of Artificers was enacted in 1563, establishing an early form of the master and servant model. Slavery was not thereby completely extinguished as a form of labour. Under the Statute of Legal Settlement93 a sturdy beggar could be made ‘a slave’, a measure repealed three years later. For a short period courts recognised that an Englishman could own a heathen Negro. Under the Vagabonds Act of 159794 a sentence of death could be commuted to a life of service overseas in the colonies or to serve in galleys, a status analogous to slavery. By the mid-eighteenth century courts had accepted that slavery in England was contrary to the common law and statutory reforms in the early nineteenth century affirmed this position.95 1.32 In the colonies indentured labour flourished. This was a form of agreement akin to a fixed term contract, backed by the coercive power of the state when a servant sought to leave the service. In the nineteenth century there were often labour shortages in Australia and over 70 Acts were passed based on the master and servant laws. Compared with English laws, colonial laws in Australia ‘were more interventionist, more coercive and more onesided’.96 In Australia there were harsher and more pervasive laws governing absconding servants, and the penalties for absconding, and for harbouring and enticing servants, were more severe. There were also greater limits on worker mobility, harsher penalties for misconduct, and more limited powers of magistrates to discharge servants. Magistrates also had powers to regulate indentured servants who were engaged to serve their master for a period of years after arrival from Europe or the Pacific Islands. There were over 60,000 prosecutions under the Master and Servant Acts in New South Wales in the period 1845 to 1860, about 40% of which related to absconding workers; around 40% of convictions resulted in imprisonment.97 About 60,000 South Sea Islanders were recruited, [page 25]

largely to serve as indentured servants in Queensland in the later part of the nineteenth century. Most were deported in the early twentieth century pursuant to the White Australia policy.98

Forced labour and freedom under the master and servant model 1.33 Under the Master and Servant Acts the master did not own the servant; instead, he owned the right to the servant’s service. A master could bring an action against a third party for assaulting the servant, the damage being the loss of the service of the servant not the damage to the servant per se.99 A master could maintain an action against a third party who hired or retained the servant during the term of the engagement.100 Whether a contract to sell one’s labour for the rest of one’s life is contrary to public policy is discussed in 4.25. In the United Kingdom from 1750 to 1865 the legislative regime of forced or coerced service under the master and servant model limited the freedom of servants. Magistrates could compel most single men or women, and married men under 30, to serve in husbandry or certain other trades. Labourers were similarly compellable. No person was compellable if he or she had a current engagement, or held certain assets, or had an estate of inheritance. A person who refused to serve could be committed to a House of Correction until he or she agreed to serve. The wages and term of engagement of those subject to forced service were set by the magistrates. The overseers of the parish, with the consent of the magistrates, could compel certain children of the poor to enter into an apprenticeship covenant with a master, including in factories, as chimney sweeps (from the age of eight) and into sea service.101 Masters could be compelled to take these parish apprentices. The executed covenant regulated the right of the apprentice to wages, if any. Similar arrangements operated for children in the Foundling Hospital. In short, the able-bodied unemployed, without sufficient property or means (and some of the children of the poor), could be directed to serve a master of [page 26] the magistrates’ choosing. They had a duty to work that was backed by a

punitive regime.102 1.34 There were other limits on the freedom of labour. After the completion of their service former servants could only leave their small region (whether it be a lathe, wapentake or hundred) with a written testimonial. Without it the servant could be treated as a vagabond and was subject to punishment, imprisonment and forced service.103 The right to practise most trades in most places depended on the completion of an apprenticeship and a period as a journeyman. Until the early nineteenth century, under the master and servant model during the term of the engagement a servant had no right to resign and depart the master’s service no matter how harshly treated. Servants had a right to apply to the magistrates to be discharged from service ‘for some reasonable cause’. Apprentices had such a right in the case of want of instruction, want of necessary provision, cruelty or other ill treatment.104 Similarly, a master had no right to dismiss a servant during the term without the permission of the magistrates. A servant or master who wished to discharge the service at the end of the term (which was usually an annual hiring) was obliged to give three months’ notice. In addition to limiting the servant’s freedom, these provisions granted a measure of job security for the servant, a particularly important protection given the operation of the common law entire obligation rule.105 1.35 In the eighteenth century magistrates could set the wages of most servants having regard to the plenty or scarcity of the time. The master was liable to be punished for paying more, and a servant was punishable for receiving more, though a reward could be given to a well-deserving servant but ‘not by way of promise or agreement upon his retainer’.106 [page 27] By the early nineteenth century the powers to fix wages were irregularly exercised.107 The magistrates had the power to order a master to pay wages to a servant. From 1831, the Truck Act108 required the payment of wages in money. Magistrates could also abate, or ‘dock’, the wages of a servant for any misdemeanour, miscarriage or ill behaviour. This was a preferable course

for the master where labour was in short supply.109 In Australia after the 1850s punitive fines could be imposed on servants who breached their obligations and employers could be compelled to pay a compensatory sum, subject to a statutory cap, for the underpayment of wages.110 The operation of the common law entire obligations rule, discussed in 9.29, operated to ensure that servants engaged by the year were required to serve for the full year before becoming entitled to any wages.

The contractual foundation of the master and servant relationship 1.36 Notwithstanding the limitations on the freedom of servants referred to in 1.31–1.35, from the eighteenth century the master and servant model was conceptualised and analysed as a contract.111 To be hired to serve, a servant had to agree to serve a master and a master had to agree to accept the same into his service, except when the service was forced service.112 For apprentices, the master had to agree to instruct the apprentice and the apprentice had to agree to serve, with that consent being given by the apprentice, the apprentice’s father or the magistrate in the case of forced service.113 There had to be what is now called mutuality of obligation, an intention to create legal relations and consideration.114 Both parties had to be capable of entering into the contract, which limited the ability of bankrupts, lunatics, married women and infants [page 28] to do so.115 To be valid the form of the contract was required to comply with the Statute of Frauds 1677.116 The scores of cases governing exceptive hirings under the Poor Laws were all premised on the notion that a servant could agree with a master to alter the ordinary incidents of service, such as by limiting the hours of work, granting holidays or engaging in concurrent employment. A master could be sued for breach of contract for refusing to accept a servant into his service as agreed.117 The commentators and courts at the time spoke of the engagement as a contract.118 The master and servant relationship was, in modern parlance,

formed by a contract. 1.37 The status of master and servant was one adopted by the parties of their own volition, except in cases of forced service.119 The choices for a servant were limited and the penalties for refusing to make a choice were oppressive. However, a servant could choose one master over another. This right to choose one’s own master has long been accepted as a fundamental freedom of an employee: ‘this right of choice constituted the main difference between a servant and a serf’.120 Once the parties had adopted that status, the common law and applicable statutes imposed a range of rights and obligations on the parties. The regime was extensive. Outside of the formation of the relationship, prior to the nineteenth century the contractual practices of the master and servant played little role in determining their rights and obligations.121

Service and dominion 1.38 The concept of being in the service of a master is quite different from the concept of being engaged under a contract of employment.122 To gain the protection of the Poor Laws a person had to serve for a year. Service necessitated complete dominion by the master during the year: ‘it [page 29] was essential in these cases that the servant should be under the power and coercion of the master during the whole time’.123 In the absence of an express agreement to the contrary, the master’s control and dominion over inferior servants was complete. Under the Poor Laws service was considered to be incomplete when the agreement reserved to the servant the right to take any leave during the year, or only to work for a limited number of hours per day, or to hire himself or herself out to others during lean times, or to have any portion of time at the servant’s own command.124 For servants engaged for a year (and almost all menial servants were so engaged), the master’s control and dominion over the servant lasted 24 hours a day, seven days a week for the entire year,

subject to any dispensation by the master or contrary custom (such as days off for feast days). This notion of what it means to serve, and the dominion of the master over the servant, was ill adapted for engagement in factories and gradually evolved into the employee’s obligation to obey directions.125

Service and work 1.39 To gain a settlement by service under the Poor Laws a servant was required to serve for a year. This did not mean the servant had to perform work for the whole of the year. Settlement through service could be acquired through constructive service, which consisted of the servant not being required to attend and perform work, but remaining subject to the dominion of the master. In the parlance of the times, the services were dispensed with, but the service was not dissolved.126 The master was not compelled to provide work. The law left the master to exact or remit the service as suited his convenience or discretion. He could compel his servant to work at all lawful seasons, or could suffer him to [page 30] remain unemployed.127 The origin of the limits of the employee’s right to be provided with work can be traced to this notion.

Misbehaviour and desertion: 1750–1850 1.40 In the twenty-first century when an employee commits a serious breach of the contract, or resigns in breach of contract, an employer’s principal legal right is to terminate the contract. The employer’s right to terminate has evolved considerably over the centuries. In the eighteenth century a master had no right to dismiss a misbehaving servant: ‘neither for rudeness or other misbehaviour of servant can the master discharge him before the end of his term’.128 Nor could a master dismiss a servant who deserted. Magistrates had the power to discharge the servant or permit a servant to be discharged from the master’s service. There were, however, various other legal and practical rights of a master in such cases.

Correction of the servant by the magistrates and the master 1.41 A misbehaving servant or apprentice who left during the term of engagement could be ordered to be corrected.129 Correction in this context involved imprisonment and work in a House of Correction, and was usually accompanied by whipping.130 The source of the master’s power to command an inferior servant was not regarded as contractual, at least in the sense that it is now understood. It lay in the ability to directly correct the servant and indirectly to obtain correction through the magistrates. The principal remedy used by the master when there was disobedience or a breach by the servant was not an action for breach of contract; it was effectively an action to have the servant whipped and imprisoned.131 In the early eighteenth century, committals to the House of Correction for absconding and misbehaving servants tended to be short but severe. Almost three-quarters of committals were for less than two weeks, and about half of those committed were whipped and put to hard labour. The chastened servant or apprentice was then released to his or her master.132 The period between 1790 and 1850 saw a series of shifts in the [page 31] enforcement regime in the United Kingdom. Through the 1700s, 10 Acts specifically provided for imprisonment for leaving work or misbehaviour. They almost all specified that imprisonment was to be with hard labour and a prisoner was to be whipped. Around the turn of the eighteenth century there was a massive increase in the custodial capacity of the state in the United Kingdom both in county prisons and in Houses of Correction. Sentences became longer and were increasingly served in prisons. By 1875 when these measures were largely repealed in the United Kingdom, the law of master and servant was operating to create greater social injustice than it had the century before.133 1.42 From the mid-1700s the master had the right to correct apprentices and servants who were not of age, a limitation that broadly paralleled the parent’s right to correct a minor.134 A misuse of this right by either beating a servant

of full age, or using an improper instrument for correction, could justify the discharge of a servant by the magistrates.135 The master had a defence to an action for assault or murder when he beat his servant with a proper instrument of correction and did not exceed all bounds of moderation. For example, in Grey’s Case the master blacksmith used an iron bar to strike his servant and crushed his skull. He was found guilty of murder (though on the court’s recommendation ‘the King was pleased to grant him his pardon’) because a master, like a father, must only correct his servant or child ‘with such things as are fit for correction, and not with such instruments as may probably kill them’.136 Masters who were moderate or used a proper instrument had a sound defence. For example, one master was held to be not guilty when he killed his servant with a clog. Another was not guilty when he whipped a 13-year-old boy 20 times with a birch-rod so that his flesh was marked with black and red stripes to a width of about four inches.137 When a master found a deserting servant of age he could not beat and detain him; his remedy was to seek relief before the magistrates.138 [page 32]

Discharge by the magistrates and the master 1.43 The master could apply to the magistrates to permit discharge of a misbehaving or absconding servant or apprentice. A master was obliged to furnish reasonable cause for the discharge.139 Refusal to serve by the servant was such a ground, but acts of insolence were insufficient.140 By the latter part of the eighteenth century courts recognised masters had the right to dismiss a servant without the permission of the magistrates when the servant had engaged in scandalous behaviour.141 From the early part of the nineteenth century courts granted masters a right to discharge a misbehaving servant without recourse to the magistrates. Spain v Arnott was a case concerning a servant in husbandry engaged on a 12month entire contract. He was ordered to take the horses a mile before he ate dinner. He refused. The master discharged him without first seeking the

magistrates’ permission. The servant unsuccessfully sued for his wages. The court held the master had the right to dismiss him from his service.142 This was the first occasion on which a court recognised such a right outside of the cases concerning scandalous behaviour. In the case of apprentices, the principal remedy for the master in the case of misconduct was to sue the parent for breach of covenant. The master had no right to terminate the contract for breach, but he could correct a misbehaving apprentice or apply to the magistrates for a discharge.143

The emergence of a contractual model: 1850–1950 The emergence of one contract of employment 1.44 As noted above, in earlier times the common law was more proficient at drawing fine distinctions between different types of servants, whether they be domestic servants, servants in husbandry, labourers, artisans or superior servants. In the early nineteenth century the distinction between [page 33] servants and what are now called independent contractors lay largely in the notion of exclusive service.144 In the mid to late nineteenth century the notion of exclusive service evolved into the concept of control and came to be recognised as the feature that distinguished servants from other categories, such as independent contractors145 and superior servants.146 From the late nineteenth century, parliaments in the United Kingdom and Australia enacted a series of laws granting a range of protections to what are now called employees. The legislatures either directly, or indirectly through arbitral awards, conferred on employees the right to minimum wages, workers’ compensation entitlements, the right to be paid in money and a range of other work-related benefits. In Australia, mainly through the arbitration system, there has also been a history of pursuing economic goals through such legislation, such as the promotion of employment, combating inflation, promoting micro-economic reform and encouraging labour market

participation.147 1.45 The protective laws usually applied to parties to a ‘contract of service’ or to ‘employees’. In the first half of the twentieth century courts in Australia and the United Kingdom wrestled with the problem of developing criteria to determine to whom the Acts applied. The protective purposes of the laws were initially frustrated by resort to the historical distinctions between superior and inferior servant.148 That judicial solution was partly foreclosed by expanded statutory definitions specifically setting aside distinctions between manual and non-manual work, service and apprenticeship, superior and other types of service. Courts also applied the control test and determined that only servants who were subject to the command of the master were covered by these Acts. This excluded many skilled workers, such as lecturers, chemists, nurses and doctors. [page 34] That approach was rejected by the mid-twentieth century in the United Kingdom.149 Thereafter, it was beyond doubt that even the most skilled workers could be engaged under a contract of service. In many ways the argument that professional employees were not in an industrial relationship, and were therefore excluded from federal award coverage in Australia, was analogous to the lingering effect of the superior– inferior servant distinction.150 By the mid-twentieth century the categories of superior and inferior servant had merged into one common law category of employment and the binary divide between the employed and the selfemployed had been established: see Chapter 2. The protective laws tended to impose additional duties on employers but left the structure of the contract largely untouched: they ‘imposed extracontractual obligations enforceable through criminal prosecutions and through actions in tort’.151 A similar approach was taken to the enforcement of collective bargains.152 The common law continued to regulate almost exclusively the formation of the contract, the performance of the contract (other than for reasons relating to stand down and industrial action), the termination of the contract (other than requiring the provision of minimum

notice), remedies for breach and the employee’s post-employment obligations. The employee’s fundamental obligations of obedience and fidelity were left almost completely untouched by statutory regulation. The employer’s managerial prerogative to make changes to what and how work was performed continued to be largely regulated by contract.153

The application of contract law to inferior servants 1.46 Different views have been advanced concerning the extent to which contract governed the master and servant relationship in the nineteenth century. Sir Otto Kahn-Freund considered the relationship to be contractual from the early nineteenth century.154 Others point to developments in the nineteenth century that granted broader freedoms to contract, such as the dismantling of the guild system, the reform in 1814 of the Apprentices Act allowing minors to be engaged more readily in industrial trades in factories, and the abolition of penal provisions [page 35] against deserting servants (which allowed a greater degree of legal equality between the parties).155 Others have contended: … well into the twentieth century, even as late as the Second World War, work relations were not legally expressed in the form of contract at all … the end product of the nineteenth-century development was not the myth of the employment contract but a fundamentally different and specific legal concept of service.156

This may be overstating the position. There was a steady stream of authority through the latter part of the nineteenth century that analysed the master and servant relationship as a contract. The principles applicable to the formation of the relationship were governed by principles of contract: see 1.36. 1.47 From the late eighteenth century the right of an employer to dismiss a servant who had engaged in moral misconduct was recognised. That right was extended to other grounds of misconduct in 1817. From the 1820s courts entertained actions for damages by servants who had been wrongfully dismissed. The action was often initially based on constructive service by the

servant, but after the decision in Emmens v Elderton it was clearly based on the breach of an implied promise by the employer to retain the servant in its service for the agreed period of service. That case concerned a superior servant but was applied thereafter to menial servants.157 All of these notions — promise, contract, breach and damages — reveal the conceptualisation of the relationship as a contract. The rules governing the calculation and mitigation of damages were applied to the assessment of damages for wrongful dismissal. From 1875 in the United Kingdom the principal remedy of the employer was no longer an application to have the servant whipped and imprisoned; instead, it lay in the contractual right to dismiss and to sue for breach of contract. Freed from the spider’s web of regulation under the Master and Servant Acts, from the latter part of the nineteenth century the servant’s freedom to contract was now the subject of ‘the employer’s power to regulate his working life under the guise of contract’.158 Conduct that was previously the subject of punishment and abatement of wages (failure to commence work, absconding from employment, misconduct, damage to property) were able to be prosecuted civilly as a breach of contract.159 _________________________ 1.

Russell v Trustees of the Roman Catholic Church, Archdiocese of Sydney (2008) 72 NSWLR 559; 176 IR 82 at [102]–[104] per Rothman J (aff’d (2007) 69 NSWLR 198; 167 IR 121); Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 2 All ER 285 at 287; North v Television Corporation Ltd, Advertiser Newspapers Pty Ltd v Industrial Relations Commission (SA) (1999) 74 SASR 240; 90 IR 211; [1999] SASC 300 at [32]; Cantor Fitzgerald International v Callaghan [1999] ICR 639 at 648; 2 All ER 411 at 419; Gillies v Downer EDI Ltd [2011] NSWSC 1055 at [156]–[159]; Buckland v Bournemouth University [2011] QB 323; [2010] 4 All ER 186 at [44]; Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 at 463–4 and Rankin v Marine Power International Pty Ltd (2001) 107 IR 117; [2001] VSC 150 at [253]–[254].

2.

B Creighton and A Stewart, Labour Law, 5th ed, The Federation Press, Sydney, 2010; M Pittard and R Naughton, Australian Labour Law, 5th ed, LexisNexis Butterworths, Australia, 2010; R Owens et al, The Law of Work, 2nd ed, Oxford University Press, Melbourne, 2011 and C Sappideen et al, Macken’s Law of Employment, 7th ed, Lawbook Co, Sydney, 2011.

3.

On corporations and partners as employees see 2.3 and 2.41; on delegation see 2.17 and 9.53.

4.

On offer and acceptance see 3.8–3.25; on undisclosed principals 3.84; on death see 3.16, 12.24 and 13.33; on the implied term of trust and confidence see 8.13 and 8.17; on vicarious performance see 9.53; on assignment see 6.40; on unreasonable restraints of trade see 16.7; on injunctions and specific performance to compel service see 15.30.

5.

On resignations and emotional distress see 11.12; on the calculation of reasonable notice see 11.59.

6.

See 2.13.

7.

See 1.38.

8.

See 6.9–6.12.

9.

On the scope of employment see 7.6; on the reasonableness of a direction see 7.14; on conduct incompatible with employment and conduct outside of hours see 7.136; on inventions see 7.103–7.107; on changes to the performance and location of work see 6.9 and 6.18.

10.

On obedience of directions see 7.12; on resignation to acquire opportunities see 7.91; on the ownership of the fruits of labour and inventions see 7.101.

11.

See 6.45.

12.

On the history of the freedom to choose one’s master and its limitations see 1.31–1.34.

13.

See 6.40, 9.53 and 11.22; and on coercive relief, slavery and liberty see 15.18.

14.

See 7.88, 16.42, 11.3, 7.89 and 16.2 respectively.

15.

See 7.29–7.135.

16.

Johnson v Unisys Ltd [2003] 1 AC 518; [2001] 2 All ER 801 at [35]; Buckland v Bournemouth University, note 1 above, at [42]; Quinn v Overland (2010) 199 IR 40; [2010] FCA 799 at [101].

17.

See 7.88, 11.3, 7.89, 6.15–6.16 and 8.37–8.47 respectively.

18.

On characterising the contract, see 2.30–2.31; on inferring agreement see 3.4; on uncertain and incomplete agreements see 3.49; on inferring consideration to support variations see 6.33; on changes in the location of employment see 6.20; on changes in the scope of employment see 7.9; on changes in the duty to invent see 7.105–7.106; on changes in profitability and frustration see 12.8; on the duration of the contract and frustration see 12.19; on changes in the restraint of trade doctrine see 16.12; on changes in the employer’s protectable interests see 16.15; on the length of reasonable notice see 11.56.

19.

On considering the totality of the relationship see 2.31; on intention to contract see 3.44; on inferring agreement see 3.27 and 6.24–6.25; on completeness and certainty see 3.48–3.49; on terms implied in fact see 5.53.

20.

See 2.7–2.12.

21.

See 2.27–2.28.

22.

See 16.2, 16.10–16.13.

23.

On ascertaining the parties’ intentions see 3.6; on consideration to support a variation see 6.34; on duress see 4.5; on unconscionability see 4.10; on power disparities and restraints of trade see 16.10–16.13 and 16.29.

24.

On consideration see 3.36.

25.

See 4.11.

26.

See 4.14.

27.

Australian Bureau of Statistics, Australian Labour Market Statistics, July 2011, Cat no 6105.0.

28.

See 3.6, 3.11 and 5.39 respectively.

29.

See 8.26.

30.

See 2.4 and 2.19.

31.

See 2.22 and 2.28.

32.

See 4.32.

33.

See 4.3, 4.8 and 4.13.

34.

See 5.4.

35.

See 7.58 and 7.115.

36.

See 7.51 and 7.110.

37.

See 8.56–8.58.

38.

See 9.15, 9.32, 9.39 and 9.47.

39.

See 9.39.

40.

See 9.63.

41.

See 11.36.

42.

See 12.52.

43.

See 13.9 and 13.12.

44.

See 13.15–13.27.

45.

See Chapters 7 and 8 generally and 5.48 on terms implied in law.

46.

See 8.25.

47.

See 7.34–7.36 and 7.122.

48.

On the remuneration for service bargain see 9.11; on the obligation to provide work to entertainers see 8.40; on the regulation of work outside of hours see 7.85.

49.

See 1.10.

50.

On the exclusion or modification of the duty of fidelity see 7.41; on the implied term of trust and confidence see 8.22; on the duty of good faith see 8.30; on wages as an independent obligation see 9.13; on exact and substantial performance of obligations see 9.38; on the right to reject part performance see 9.42; on the right to terminate by notice see 11.48.

51.

See 7.119 and 10.19.

52.

Australian Bureau of Statistics, Labour Force, Australia, June 2011, Cat no 6202.0.

53.

J Simon-Davies, How Many Are Employed in the Commonwealth Public Sector?, Department of Parliamentary Services, 2010 and Australian Bureau of Statistics, Employment and Earnings, Public Sector, Australia, 2009–10, Cat no 6248.

54.

Australian Bureau of Statistics, 2011 Labour Statistics in Brief, Australia, June 2011, Cat no 6104.0 and Australian Bureau of Statistics, Australian Social Trends, September 2009, Cat no 4102.0.

55.

Australian Bureau of Statistics, Locations of Work, November 2008, Cat no 6275.0.

56.

Australian Bureau of Statistics, 2011 Labour Statistics in Brief, Australia, June 2011, Cat no 6104.0; M Waite and L Will, Fixed Term Employees in Australia: Incidence and Characteristics, Productivity Commission, Australia, 2002.

57.

Australian Bureau of Statistics, Job Search Experience of Unemployed Persons, July 2010, Cat no 6222.0; see also Human Rights and Equal Opportunity Commission, Age Matters: A Report on Age Discrimination, May 2000, at 19–28 and Ch 3 concerning discrimination against young

people at work. 58.

The ABS data distinguishes between employees, independent contractors and other business operators. Independent contractors operate their own business and contract to perform services for others but not as an employee. Other business operators operate their own business and generate their income from managing staff or selling goods or services to the public, rather than selling their labour directly to a client: Australian Bureau of Statistics, Forms of Employment Survey, Australia, November 2010, Cat no 6359.0.

59.

Australian Bureau of Statistics, Forms of Employment Survey, November 2008, Cat no 6359.0.

60.

Australian Bureau of Statistics, Education and Work, May 2010, Cat no 6227.0.

61.

Department of Education, Employment and Workplace Relations, Trends in Federal Enterprise Bargaining, March Quarter, 2011. These figures merge together enterprise agreements made under the Fair Work Act with collective agreements of various sorts made under the Workplace Relations Act 1996 (Cth).

62.

Australian Bureau of Statistics, Australian Labour Market Statistics, July 2011, Cat no 6105.0.

63.

See A Lynch, ‘The Fair Work Act and the Referrals Power: Keeping the States in the Game’ (2011) 24 AJLL 1.

64.

See generally B Creighton and A Stewart, Labour Law, note 2 above, Ch 5; M Pittard and R Naughton, Australian Labour Law, note 2 above, Chs 8 and 9.

65.

On the historical development of the contract of employment, see generally S Deakin, ‘The Evolution of the Contract of Employment, 1900–50’ in Governance, Industry and Labour Markets in Britain and France, N Whiteside and R Salais (eds), Routledge, London, 1998; D Hay, ‘Master and Servant in England: Using the Law in the Eighteenth and Nineteenth Centuries’ in W Steinmetz (ed), Private Law and Social Inequality in the Industrial Age, Oxford University Press, New York, 2000; W Cornish, The Oxford History of the Laws of England, Vol XIII, Oxford University Press, Oxford, 2010, pp 623–84; J Cairns, ‘Blackstone, Kahn-Freund and the Contract of Employment’ (1989) 105 LQR 300; S Jacoby, ‘The Duration of Indefinite Employment Contracts in the United States and England: An Historical Analysis’ [1982] CLL 85; B Veneziani, ‘The Evolution of the Contract of Employment’, in B Hepple (ed), The Making of Labour Law in Europe, Mansell Publishing, London, 1986, Ch 1; A Merritt, ‘The Historical Role of Law in the Regulation of Employment: Abstentionist or Interventionist?’ (1982) 1 Aust JL & Soc 56; M Quinlan, ‘Pre-Arbitral Labour Legislation in Australia’ in S Macintyre and R Mitchell (eds), Foundations of Arbitration, Oxford University Press, Melbourne, 1989 and J Howe and R Mitchell, ‘The Evolution of the Contract of Employment in Australia: A Discussion’ (1999) 12 AJLL 113.

66.

Emmens v Elderton (1853) IV HLC 624; 10 ER 606 and Couch v Steel (1854) 3 El & Bl 402; 118 ER 1193.

67.

The Statute of Labourers 25 Ed III Stat 1 was preceded by the Ordinance of Labourers of 1349 23 Ed III Stat 3; see also N Cantor, In the Wake of the Plague: The Black Death and the World It Made, The Free Press, London, 2001, Ch 4; Jacoby, note 65 above, pp 86–91; J Browne, The Juridification of the Employment Relationship, Aldershot, Avebury, 1994, pp 19ff; S Churches, ‘The Presumption of a Yearly Term in a General Contract of Employment and the Plight of the Modern Manager, or the Black Death and the Malady Lingers On’ (1979) 10 U Queensland LJ 195 at 198 and A Simpson, A History of the Common Law of Contract, Clarendon Press, Oxford, 1986, pp 47–52.

68.

5 Eliz c 4.

69.

Richardson v Koefod [1969] 3 All ER 1264; Byrne v Australian Airlines Limited (1995) 185 CLR 410; 131 ALR 422. See Healy v The Law Book Company of Australasia Pty Limited (1942) 66 CLR 252 at 255 and 258; S Churches, note 67 above, pp 201–6 and 11.40–11.48.

70.

A Merritt, note 65 above, pp 60–2 and 64–7 and J Howe and R Mitchell, note 65 above, p 118.

71.

J Clark, English Society 1688–1832, Cambridge University Press, Cambridge, 1985 at 65; J Cairns, note 65 above, p 307.

72.

A Kussmaul, Servants in Husbandry in Early Modern England, Cambridge University Press, Cambridge, 1981, p 135 and W Cornish, note 65 above, pp 627–8.

73.

B Hill, Servants: English Domestics in the Eighteenth Century, Oxford University Press, Oxford, Chs 1 and 2 and J Hecht, The Domestic Servant in Eighteenth-Century England, Routledge and Kegan, London, 1956, Ch 2.

74.

J Chitty, The Law Relative to Apprentices, W Clarke and Son, London, 1812, pp 24 and 45–46 and R v Inhabitants of Rainham (1801) 1 East 531; 102 ER 205.

75.

W Blackstone, Commentaries on the Laws of England, 13th ed, A Strahan, 1800, Vol II, p 425; J Chitty, note 74 above, Chs 1 and 2; E Gambier, A Treatise on Parochial Settlements, Butterworth, London, 1828, Ch 3 and B Veneziani, note 65 above, pp 38–40.

76.

Statute of Artificers 1562 (UK) ss 25–32; W Blackstone, note 75 above, pp 427–8; J Heydon, The Restraint of Trade Doctrine, 3rd ed, LexisNexis Butterworths, Australia, 2008, pp 2–15 and J Chitty, note 74 above, Ch 5.

77.

W Cornish, note 65 above, pp 628–9.

78.

W Blackstone, note 75 above, p 425; R Burn, The Justice of the Peace, 21st ed, A Strahan, London, 1810, Vol V, p 208 and R v Inhabitantes de Hales Owen (1795) 1 Str 99; 93 ER 410. The history of the law governing sick employees is discussed in 12.13.

79.

A Kussmaul, note 72 above, pp 3, 83–4 and Ch 5 and B Hill, note 73 above, pp 14–5. The term of engagement is discussed in 11.40.

80.

R v Inhabitants of Thames Ditton (1785) 4 Doug 300; 99 ER 891 (in arguendo); Coventry v Woodhall (1792) Hob 134; 80 ER 284; R v Inhabitants of St Paul’s Bedford (1795) 6 TR 452; 101 ER 644; see 6.18 on the obligations of an employee to change the location of the work.

81.

W Blackstone, note 75 above, pp 426–7.

82.

A Kussmaul, note 72 above, p 80; artisans included occupations such as artificers, coopers, dyers, glaziers, all manner of handicraftsmen, machinists, mechanics, masons, miners, millers, potters, tanners, weavers, woodworkers and wrights.

83.

On exclusive service, see Lancaster v Greaves (1829) 9 B & C 627 at 631–2; 109 ER 233 at 234–5; J Chitty, note 74 above, pp 65–7; S Deakin, ‘Legal Origins of Wage Labour’ in L Clarke et al (eds), The Dynamics of Wage Relations in the New Europe, Kluwer Deventer, Boston, 2000, p 35; B Veneziani, note 65 above, p 60; on the broader scope of the Master and Servant Acts in Australia, see A Merritt, note 65 above, pp 64–7.

84.

A Merritt, note 65 above, pp 59–60.

85.

J Hecht, note 73 above, Chs 1 and 5; W Blackstone, note 75 above, p 427; S Deakin, note 65 above, pp 214–5; S Deakin, note 83 above, p 34.

86.

Yewens v Noakes (1880–81) LR 6 QBD 530 at 532–3.

87.

E Gambier, note 75 above, p 1; see generally R Burn, note 78 above; W Quigley, ‘Five Hundred

Years of English Poor Laws’ (1996) 30 Akron LR 73. 88.

See 3 and 4 W and M c 11 s 7; 8 and 9 W c 30 s 4 and 13 and 14 Car 2 c 12.

89.

See W Holdsworth, History of the English Law, 2nd ed, Sweet & Maxwell Ltd, London, 1937, Vol 6, pp 349–53 and Vol 10, pp 257 ff; S Churches, note 67 above, pp 198–200 and Jacoby, note 65 above, pp 90–9.

90.

W Blackstone, note 75 above, pp 422 and 424; see also Vol II, p 445 (agreement to serve analysed as a contract in the discussion of consideration) and Vol III, p 161 (action on undertaking to pay for work performed).

91.

W Blackstone, note 75 above, pp 422 and 424; O Kahn-Freund, ‘Blackstone’s Neglected Child: The Contract of Employment’ (1977) 93 LQR 508; J Cairns, note 65 above. The High Court has occasionally addressed the issue: see Byrne v Australian Airlines Limited, note 69 above, at 439; Attorney-General (NSW) v The Perpetual Trustee Company (Ltd) (1952) 85 CLR 237 at 245–8 and on appeal at (1955) 85 CLR 122–3.

92.

See A Simpson, note 67 above, pp 148–53 tracing the law from the 1400s.

93.

1 Edw VI c 3.

94.

39 Eliz c 4.

95.

See generally D Pelteret, Slavery in Early Mediaeval England, Boydell and Brewer, Tyne and Wear, UK, 1995; W Blackstone, note 75 above, p 425; O Kahn-Freund, note 91 above, pp 513 and 516–18; A Beier, Masterless Men: The Vagrancy Problem in England, 1560–1640, Methuen, London, 1985, Ch 9; Slave Trade Act 1807 (UK) and the Slavery Abolition Act 1833 (UK); R Steinfeld, The Invention of Free Labor: The Employment Relation in English and American Law and Culture, 1350–1870, UNC Press, Chapel Hill, 2001, pp 22–30; C Davies, ‘Slavery and Protector Somerset: The Vagrancy Act of 1547’ (1966) 19 Econ Hist Rev 533.

96.

M Quinlan, note 65 above, pp 30–4.

97.

A Merritt, note 65 above; M Quinlan, note 65 above, p 35. In that period the population of New South Wales grew from 125,000 to 350,000.

98.

Pacific Island Labourers Act 1901 (Cth); Pacific Island Labourers Acts 1880–1892 (Qld); see generally on indentured servants, A Smith, Colonists in Bondage: White Servitude and Convict Labor in America 1607–1776, Norton & Company, New York, 1971.

99.

W Blackstone, note 75 above, p 429.

100. W Blackstone, note 75 above, p 428. 101. On parish apprentices and sea service, see K Honeyman, Child Workers in England, 1780–1820, Aldershot, Ashgate, 2007; W Robinson, A Compendium of the Laws Relating to the Poor, Charles Fredrick Cock, London, 1827, pp 1–20; J Chitty, note 74 above, pp 20–7. 102. Statute of Artificers 1562 (UK) ss 4, 7 and 24; 13 Geo 2 c 29 s 7 (foundlings); W Blackstone, note 75 above, pp 425–7; see also R Steinfeld, note 95 above, pp 22–37; C Davies, note 95 above, p 548; O Kahn-Freund, note 91 above, pp 516–8; B Veneziani, note 65 above, p 34. 103. Statute of Artificers 1562 (UK) ss 10, 11; A Kussmaul, note 72 above, pp 148–50. 104. 20 Geo 2 c 19 s 3 and 4 Geo 4 c 29 s 1; W Robinson, note 101 above, pp 20–5; J Chitty, note 74 above, p 104; cf the dicta in R v Ridley (1811) 2 Camp 650; 170 ER 1282. 105. Statute of Artificers 1562 (UK) ss 5, 6 and 8; O Kahn-Freund, note 91 above, pp 512–13; on the master’s rights against a misbehaving servant see 1.40–1.43; on the operation of the common law

entire obligation rule see 9.29. 106. W Blackstone, note 75 above, p 428; R Burn, note 78 above, p 211; C Smith, The Law of Master and Servant, H Sweet, London, 1860, pp xlix and 342–51; D Davies, The Case of Labourers in Husbandry, Crutwell & Sons, Bath, 1795, pp 107–11. The Arbitration of Disputes between Workmen and Masters Act 1825 (UK) consolidated and extended these provisions. 107. W Cornish, note 65 above, p 630; O Kahn-Freund, note 91 above, pp 520–1. 108. 1 & 2 Will 4 c 37: see 9.47. 109. S Deakin, note 83 above, p 34. 110. A Merritt, note 65 above, pp 68–71. 111. W Blackstone, note 75 above, pp 422 and 424; E Gambier, note 75 above, p 7; C Smith note 106 above, p xli. 112. Chesterfield v Hamlet of Walton (1741) Carth 400; 90 ER 832; The Parish of Gregory-Stoke against Pitmister (1760) Sess Cas 163; 93 ER 165; R v Inhabitants of Thames Ditton (1785) 4 Doug 300; 99 ER 891 (no hiring of a Negro slave as she did not consent to the hiring); E Bott, Laws Relating to the Poor, 3rd ed, Wheildon and Butterworth, London, 1797, pp 326–35. 113. J Chitty, note 74 above, pp 29–32. 114. The Parish of Gregory-Stoke against Pitmister (1760) Sess Cas 163; 93 ER 165; R v Inhabitants of Weyhill (1746–1779) 1 Black W 206; 96 ER 113; E Gambier, note 75 above, p 7. 115. C Smith, note 106 above, Ch 1; E Gambier, note 75 above, pp 5–6. 116. C Smith, note 106 above, pp 21–28. 117. Bracegirdle v Heald (1818) 1 B and Ald 722; 106 ER 266. 118. W Blackstone, note 75 above, p 445 (agreement to serve analysed as a contract in the discussion of consideration) and Vol III, p 161 (action on undertaking to pay for work performed). 119. O Kahn Freund, ‘A Note on Status and Contract in British Labour Law’ (1967) 30 MLR 635. 120. See the discussion of forced service under the Master and Servant Acts in 1.33; Nokes v Doncaster Amalgamated Collieries Ltd [1940] 3 All ER 549; [1940] AC 1014 at 1024 and 1026, discussed further at 6.44. 121. S Deakin, note 83 above, p 35; J Howe and R Mitchell, note 65 above, p 115. 122. S Deakin, note 65 above, p 213. 123. R v Inhabitants of Kingswinford (1791) 4 TR 219; 118 ER 1299 at 1300 per Lord Kenyon CJ; E Gambier, note 75 above, pp 10–11. 124. E Gambier, note 75 above, pp 10–16; R v Inhabitants of North Nibley (1792) 5 TR 21; 101 ER 12 (service for only 12 hours a day); R v Inhabitants of Kingswinford (1791) 4 TR 219; 118 ER 1299 (service from 6 am to 7 pm for 6 days per week); R v Inhabitants of Lydd (1824) 2 B & C 754; 107 ER 563; R v Saint John, Devizes (1829) 9 B & C 896; 109 ER 333 (applied to service in a factory). Cases concerning hiring with leave of absence and stipulations as to working hours are collected in W Robinson, note 101 above, pp 251–6. 125. S Deakin, ‘The Evolution of the Employment Relationship’ in International Labour Organization, Symposium on the Future of Work, Employment and Social Protection, ILO, Lyons, 2002, pp 192–3; W Cornish, note 65 above, pp 637–38. See also Turner v Mason (1845) 14 M W 112; 153 ER 411.

E Gambier, note 75 above, pp 23–5, 133–5; W Robinson, note 101 above, pp 262–70; S Deakin, 126. ‘The Contract of Employment: A Study in Legal Evolution’, University of Cambridge ESRC Centre for Business Research, Working Paper No 203, 15–17. 127. M Nolan, A Treatise on the Laws for the Relief and Settlement of the Poor, The Law Book Exchange, New York, 2005; W Blackstone, note 75 above, p 425. 128. J Bird, Law of Master and Servant, 1801, 3rd ed, quoted in J MacDonnell, The Law of Master and Servant, Stevens and Sons, London, 1909, p 192. The master was subject to a penalty if he did so: Statute of Artificers 1562 (UK) s 8. 129. Statute of Artificers 1562 (UK) s 9; S Deakin, note 83 above, pp 33–4; J Chitty, note 74 above, pp 100–1. 130. R v Hoseason (1811) 14 East 605; 104 ER 734. 131. S Deakin, note 65 above, p 215; B Veneziani, note 65 above, pp 43–44. 132. D Hay, note 65 above, pp 229, 239–40, 263–4; S Deakin, note 83 above, pp 34–5. 133. D Hay, note 65 above, pp 263–4. 134. W Blackstone, note 75 above, p 428; R Burn, note 78 above, p 216; J Chitty, note 74 above, p 73; R Steinfeld, note 95 above, pp 117–20. In earlier times the right to correct a servant extended to menial servants of age, but not superior servants. 135. W Blackstone, note 75 above, p 428; J Chitty, note 74 above, p 104. 136. Grey’s case (1666) Kelyng 64. 137. Turner’s case Ray 142; R v Thackeray, reported in the Manchester Guardian, 7 May 1822; R Burn, note 78 above, p 216. 138. R Burn, note 78 above, pp 216–7. 139. Statute of Artificers 1562 (UK) ss 5, 8; W Blackstone, note 75 above, p 426; for apprentices the discharge could be for ‘misdemeanour, miscarriage or ill behaviour’: E Bott, note 112 above, pp 20–8. 140. J MacDonnell, note 128 above, pp 192–3; Temple v Prescott (1773) Cal Mag Cas 14. 141. R v Inhabitants of Brampton (1777) Cald Mag Cas 11 (becoming pregnant); R v Inhabitants of Welford (1778) Cal Mag Cas 57 (fathering a bastard); see also Woodroffe v Farnham (1693) 2 Vern 291; 23 ER 788 (custom concerning gambling among apprentices). 142. Spain v Arnott (1817) 2 Stark 256; 171 ER 638. There was no discussion of the reasonableness of the order. As is noted in W Cornish, note 65 above, p 644, how the servant was able to bring a common law action ‘remains a mystery’. 143. J Chitty, note 74 above, pp 64–7, 78; Stephenson v Houlditch (1704) 2 Vern 491; 23 ER 915 (master could not dismiss apprentice who, in breach of his obligations, married without permission); Winstone v Linn (1823) 1 B & C 460; 107 ER 171; for parish apprentices, see Parish Apprentices Act (56 Geo 3 c 139) ss 9, 10. 144. Lancaster v Greaves (1829) 9 B & C 627 at 631–32; 109 ER 233 at 234–5; Lawrence v Todd (1863) 14 CB (NS) 554; 143 ER 562. 145. Sadler v Henlock (1855) 4 E & B 570 at 578; 119 ER 209 at 212; Scott v Davis (2000) 204 CLR 333; 175 ALR 217 at [44]; Simmons v Heath Laundry Co [1910] 1 KB 543 at 552. Whether the worker was carrying on an independent business was also of importance: Halsbury’s Laws of England, 1st ed, Butterworth & Co, London, 1911, Vol 20 at [134] and the cases referred to

therein. 146. Yewens v Noakes (1880–81) LR 6 QBD 530 at 532–3. 147. There is a vast body of literature on this topic; see generally C Arup et al, Labour Law and Labour Market Regulation, Federation Press, Sydney, 2006. 148. S Deakin, note 65 above, pp 215–9; J Howe and R Mitchell, note 65 above, pp 125–7; in Australia, see R v Foster; Ex parte The Commonwealth Life (Amalgamated) Assurances Ltd (1952) 85 CLR 138 at 152–3; Federal Commissioner of Taxation v J Walter Thompson (Australia) Pty Ltd (1944) 69 CLR 227 at 229; Ex parte Haberfield Pty Ltd (1907) 5 CLR 33 at 39; Federal Commissioner of Taxation v Barrett (1973) 129 CLR 395 at 403; 2 ALR 65 at 69 and Connelly v Wells (1994) 55 IR 73 at 84. 149. Cassidy v Minister of Health [1951] 1 All ER 574; O Kahn-Freund, ‘Servants and Independent Contractors’ (1951) 14 Modern Law Review 503: see 2.12. 150. J Howe and R Mitchell, note 65 above, pp 126–8. 151. O Kahn-Freund, note 119 above, p 641; B Veneziani, note 65 above, p 61; an approach continued in Byrne v Australian Airlines Limited, note 69 above. 152. B Veneziani, note 65 above, p 61. 153. R Johnstone and R Mitchell, ‘Regulating Work’, in C Parker et al (eds), Regulating Law, Oxford University Press, Oxford, 2004, pp 102–3; O Kahn-Freund, note 91 above, pp 524–7. 154. O Kahn-Freund, note 91 above. 155. See generally B Veneziani, note 65 above; W Cornish, note 65 above, p 625. As noted above, some of these laws were operative and enforced in Australia well into the mid-twentieth century. 156. S Deakin, note 65 above, p 213; see also A Merritt, note 65 above. 157. Emmens v Elderton, note 66 above and Couch v Steel, note 66 above. 158. B Veneziani, note 65 above, p 54. 159. A Merritt, note 65 above, p 67.

[page 36]

Chapter 2 Who is an Employee? Introduction The Multi-Factor Test No single factor is determinative Is the worker conducting his or her own business? Control of the manner of the performance of work Delegation and service Benefits usually provided to employees Shams and express terms categorising the relationship The totality of the relationship and the parol evidence rule Other Relationships Considered Directors and corporate officers Officers in the public sector Bailment, partnerships, tenancy and agency Tripartite employment arrangements Who are the parties to the contract? Labour hire arrangements

INTRODUCTION 2.1 This chapter examines how to determine whether a contract between the parties is an employment contract. The definitions used in this chapter, and throughout this text, are as

follows. ‘Employee’ is given its common law meaning: an employee is a person, almost always a natural person, who is a party to an employment contract and is engaged to serve an employer. The word ‘employee’ and cognate terms are defined in over 50 Commonwealth statutes. When used in a statute, such as the Fair Work Act 2009 (Cth), ‘employee’ is usually [page 37] accorded its common law meaning as it is a term of art.1 A contract of employment is sometimes described as a contract of service as distinct from a contract for services.2 Prior to the early twentieth century ‘employee’ was usually reserved for superior servants, such as managers, and was not generally used to refer to domestic servants, servants in husbandry, labourers, industrial workers, artisans, apprentices or journeymen: see 1.27. It is not until the early 1850s that the phrases ‘contract of employment’ and ‘employer and employee’ first appear in the law reports.3 Over the last 100 years the contract of employment and the meaning of ‘employee’ have evolved enormously. References to employees in earlier cases should be treated with caution and there are dangers in equating the status of a servant or an employee in earlier times with that of an employee in the twenty-first century. In this text a ‘worker’ is a person engaged under a contract to perform work, whether as an employee or otherwise. An independent contractor is a worker who is not an employee. The term ‘independent contractor’ has no settled meaning under the common law.4 In this text it is used simply as a clearer term than ‘not employee’. The word ‘employer’ is used to mean the party engaging a worker, whether the worker is an employee or an independent contractor. So defined, there is a dichotomy between the relationship of employer– employee and the relationship of employer–independent contractor.5 They are mutually exclusive categories. By adopting this definitional scheme it is easier to state the principles clearly. However, it glosses over the

[page 38] possibility that there may be different types of independent contractors, an issue beyond the scope of this text.6 When determining the status of a worker, the real question to be asked is whether the person is an employee. It would invert the proper order of inquiry to ask whether the worker was not an independent contractor.7 2.2 Determining whether a contract between two parties is an employment contract is important for at least four reasons. First, the common law affixes certain implied contractual, tortious and fiduciary obligations to the parties in an employment relationship: see Chapters 7 and 8. Those obligations do not necessarily arise when the worker is an independent contractor. Second, statutory rights and obligations, including those conferred by the Fair Work Act, often apply to employees but not to independent contractors. Similarly, the tax liabilities of both employers and workers are, to a degree, dependent on whether the worker is an employee. Third, the liability of an employer for the acts of a worker, particularly the employer’s vicarious liability, arises principally when the worker is an employee and not an independent contractor. Historically, this was one of the important reasons for the common law to distinguish between servants and other types of workers.8 Fourth, in some jurisdictions there are statutory limitations on the rights of employees, but not independent contractors, to sue their employers in relation to injuries occurring at work. Increasingly, it is the worker who is claiming that he or she was an independent contractor to avoid those statutory limits.9 There is a vast amount of academic comment and an enormous number of decisions of superior courts and industrial tribunals on the issue of who is an employee. Almost all court and tribunal decisions involve the application of settled principles. There exists considerable variation among first instance decisions on minor matters of principle. Canvassing the alternative views on these issues, often decided per incuriam, is a fruitless exercise. This chapter focuses on the principles established in appellate decisions of superior courts and ultimate courts of appeal, but does not seek to critique those settled principles.

[page 39] 2.3 There is great variety among the nearly 10 million employment contracts in Australia: see 1.20. Almost all are between a natural person and an employer. The notion that an employee might be a corporation ‘may not be impossible, but is certainly unfamiliar’.10 An employee can agree that wages or other benefits will be paid to a third party, such as a trust, corporation or partnership. Such arrangements do not affect the nature of the relationship between the employer and the employee.11 Nor is it possible to say that all employment contracts are between one employer and one employee. Some are between two employers and one employee;12 others are between one employer and two employees; and in others the worker may contemporaneously be an employee and an independent contractor of the same employer.13 About 20% of employees are casuals, a classification that raises special issues: see 3.32. 2.4 There are a great number of statutes in Australia, probably exceeding 100, that provide benefits or impose liabilities depending on whether a person is an employee under the common law. Many statutes extend protection to a broader class of workers by redefining ‘employment’ or deeming certain independent contractors to be employees for the purpose of the statute. Such extended statutory definitions of ‘employee’ appear in laws covering fields as diverse as workers’ compensation, anti-discrimination, occupational health and safety, superannuation contributions, and annual and long service leave, and also govern taxation liabilities such as payroll and fringe benefits tax. An examination of these diverse definitions is beyond the scope of this text.14 [page 40] Although the question of who is an employee arises in many contexts, there is only one common law notion of employment. Courts adopt different interpretative postures towards socially beneficial legislation, such as the Fair Work Act and tax laws. Where the question under any of those laws is whether a person is an employee then, in theory, courts should apply an identical test and reach the same result.

The scope of this chapter is limited to examining whether the contract between the parties is one of employment. Chapter 3 examines whether there is a contract between the parties.

THE MULTI - FACTOR TEST No single factor is determinative 2.5 In determining if an employment relationship exists between two parties to a contract a number of indicia are weighed, but none are determinative by themselves.15 The weight to be given to each of these indicia will vary in the circumstances. There is a long history in employment law of searching for the single criterion, or the pithy statement that can be applied in all situations to determine if the relationship is one of employment.16 At various times courts have stated the issue to be whether the manner of the performance of the contract was subject to the control of the employer,17 whether a contract was to produce a given result as opposed to being for the supply of the worker’s labour,18 whether the worker was part and parcel of the employer’s organisation, or whether the worker is carrying on a [page 41] business on his or her own account. Although all of these matters are relevant indicia, none are dispositive in all cases. The most common recent iteration of the ultimate test is that the distinction between an employee and an independent contractor is: … rooted fundamentally in the difference between a person who serves his employer in his, the employer’s, business, and a person who carries on a trade or business of his own.19

This test certainly has very broad application and can be used in most situations to determine whether a worker is an employee. It is an inappropriate guide in some circumstances, such as when distinguishing between executive directors (who are employees) and non-executive directors

(who are not). In such cases the power of the employer to control the director or officer in the manner of the performance of work will be more significant. 2.6 One of the results of the multi-factor approach is that a trial judge has a considerable amount of discretion as he or she weighs a number of factors.20 Reasonable minds may differ as to the proper conclusion to be drawn in some cases. The resolution of the issue is sometimes a matter of the impression drawn from assessing the whole of the evidence and is not a simple mechanical exercise of listing and slavishly checking off the factors held to be relevant in other cases: The object of the exercise is to paint a picture from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole. It is a matter of evaluation of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details. Not all details are of equal weight or importance

[page 42] in any given situation. The details may also vary in importance from one situation to another.21

The nature of the task — balancing sometimes countervailing considerations — affects the approach of appellate courts in identifying and remedying an error on the part of the trial judge.22 Whether a worker is an employee is a mixed question of fact and law. The terms of the contract, the surrounding circumstances and, where admissible, the conduct of the parties after forming the contract, are questions of fact. Where the terms are all contained in a written document then the interpretation of that document is a question of law. There is some debate about whether a decision that the relationship is one of employment is a conclusion of law or fact.23

Is the worker conducting his or her own business? 2.7 In most circumstances the distinction between an employee and an independent contractor is rooted fundamentally in the difference between a person who serves the employer in the employer’s business and a person who carries on a trade or business of his or her own.24 There are certain characteristics associated with conducting a business that

concern risk and remuneration, the ownership of equipment and capital investment, whether a worker is independent of or represents the employer, and the nature of the work: see 2.8–2.12. The control over the manner of the performance of the work is also a significant factor as is the right of the worker to engage others to perform the work: see 2.13 [page 43] and 2.17. Workers conducting their own business tend to have taken the steps required by law to conduct a business, including obtaining the necessary licences and complying with tax laws.25

Remuneration and risk 2.8 Risk and conducting a business are interwoven. When a worker is conducting a business he or she does so in the hope of making a profit and not merely earning remuneration.26 A worker conducting a business is able to manage the performance of the work in a manner that maximises the potential for profit. This may be achieved by increasing income (such as through the hiring of other workers to perform the contracted work) or reducing the costs of running the business.27 There are often significant expenses in running a business.28 A business tends to set or negotiate the price for the work.29 A business runs the risk of making a loss from the enterprise: the job may be more expensive than the worker’s initial quote if it requires more labour or there are other cost overruns, or the worker may suffer financial consequences for poor performance. Who bears these risks is relevant in determining whether a worker is an employee.30 The value of a business, including its goodwill, can grow or shrink. The goodwill of an independent contractor’s business tends to grow when the contractor performs the work well, whereas the goodwill of an employer’s business tends to grow when an employee performs the [page 44]

work well.31 A business can usually be sold. If a worker cannot sell the business, including any goodwill, then it tends to suggest that he or she is an employee.32 Workers conducting a business are able to build an independent career as a freelancer and generate goodwill for themselves.33 Their clients belong to the worker’s business.34 2.9 The mode of remuneration for the performance of work is also relevant in determining the nature of the contract. Independent contractors tend to be paid for the performance of a task or the production of a particular identifiable result, whereas employees tend to be paid for the hours they work.35 This factor is rarely an important consideration because examples abound of employees paid by results and independent contractors paid by the hour.36 Modern awards and the Fair Work Act permit employees to be pieceworkers.37 A worker may be an employee despite being remunerated by commission,38 or by a share [page 45] of the employer’s profits or income.39 Regular payment of remuneration suggests the relationship is one of employment and irregular payments suggest it is not.40 A business tends to have its own invoicing system, standard terms of trade, a payment and debt collection system, a budgeting or forecasting system and arrangements such as an overdraft with a financial institution.41 When payments to the worker are prompted by the submission of an invoice it tends to suggest that the worker is an independent contractor.42 The superintendence of the worker’s finances by the employer tends to suggest a relationship of employment.43 This matter will usually be of less importance if the submission of the invoice does not itself invoke the payment, or if the method of prompting payment does not reveal an arm’s-length transaction that would be expected in the relationship between two businesses, or where the employer has determined that no payment will be made unless an invoice is submitted.44

Equipment, tools and capital investment 2.10 The ownership or leasing of substantial assets such as buildings, vehicles and other equipment tends to suggest the worker is an independent contractor.45 The need to own a specialised conveyance, such as a logging truck, will be more significant than ownership of a vehicle or equipment that can be used for non-work purposes.46 The amount of capital the worker has to invest to acquire and maintain the equipment is relevant.47 The rationale for attaching significance to the ownership of an expensive [page 46] piece of capital equipment is that such ownership is inconsistent with the right to control the worker.48 The worker’s provision and maintenance of the tools and equipment necessary to perform the work tends to suggest the relationship is not one of employment.49 This factor is less significant when the equipment is part of the tools of the trade.50 The employer’s provision of the tools, equipment and materials to complete the work suggests the relationship is one of employment.51 The reimbursement of expenses incurred in performing the work, which partly immunises the worker from risk, suggests an employment relationship.52

Independence, integration and representation 2.11 A related factor is whether the worker is an integral part of the organisation.53 For a short period in the United Kingdom this consideration was transformed, largely by dicta, into the determinative test (called the organisation test), an approach inconsistent with Australian law.54 The worker’s degree of integration and role within the employer’s business is relevant in determining if the contract is one of employment.55 Workers [page 47]

are more likely to be employees if they are part of the employer’s ‘team’ or are provided with training to enhance their performance.56 The extent to which the worker is economically reliant on the employer is also relevant.57 An independent contractor carries out the work as a principal, not as a representative of the employer. In general, if an employer conducts an enterprise in which workers are identified as representing the employer, it is a significant indicator that the relationship between the parties is one of employment.58 This does not mean that an employment relationship exists whenever the work is done for the benefit of the employer or is done for the employer’s purpose.59 If a worker advertises to others that he or she is carrying on an independent business, it tends to suggest that the worker is an independent contractor.60 On the other hand, if a worker makes it known that he or she is part of the employer’s enterprise, it tends to indicate that the worker is an employee; such representations include wearing the employer’s uniform, and handing out business cards or driving a vehicle marked with the employer’s insignia.61

Nature of the work 2.12 It is intuitively unsound to conclude that workers who are not engaged in a profession or trade — such as unskilled workers — are conducting a business when providing their labour.62 The structure of the industry in which the workers are engaged may shed light on the issue.63 There was once a view that a worker exercising particular skill or professional judgment was less likely to be an employee. This arose from [page 48] the nineteenth century distinction between inferior and superior servants. The latter were not subject to the employer’s control and dominion.64 It is suggested that this factor is irrelevant; it is simply a ‘false criterion’.65 Trapeze artists, actors and doctors can be employees notwithstanding the fact that their employers lack the expertise to direct them in the manner of the performance of work.

Control of the manner of the performance of work 2.13 The control test is met when ‘the employer has the power, not only to direct what work the [worker] is to do, but also to direct the manner in which the work is done’.66 Control in this sense means subject to the direction of the employer.67 Control is not an absolute measure; there are degrees of control. Control is no longer the sole test in determining whether an employment relationship exists.68 It is not necessary that the control test be met,69 and if met, it is not dispositive.70 Control is a criterion that was more significant 100 years ago when the master–servant relationship was very different, and occasional disquiet has been voiced judicially about its continued use.71 However, it is still recognised as a significant factor.72 [page 49]

Source of power 2.14 Under a contract of employment the employer has a right, power or ultimate authority to exercise control in a manner consistent with the express terms of the contract.73 The power may arise from an express or implied term or, perhaps, from some other source.74 The exercise of the power may be inferred from the conduct of the parties where that evidence is admissible. The exercise of control will be less significant if it results from compliance with regulatory requirements.75 As Gray J has stated, there is often a degree of circularity associated with focusing on the legal right to control: A contract of employment existed if there was the right to exercise the requisite control. It was only possible to find an implied term giving that right, or to impute to the parties a common intention that there should be control, if the contract were found to be a contract of employment. Thus, in reality, the search was for other factors which would enable a determination of whether the contract was one of employment. The attempt to interpose in this process a search for the existence of a term, or an imputed intention, as to the right to control only obscured the true nature of the process.76

The power to exercise control may be delegated or devolved from the employer to another entity.77 The employer may, without altering the relationship, direct the employee to do work that will benefit another. Such arrangements commonly arise when a labour hire agency directs an employee

to perform work for the agency’s client: see 2.49.

The power of control and its exercise 2.15 Many workers exercise skills and hold qualifications that their employers do not possess. Their employers do not have the capacity to [page 50] direct them in the performance of their duties. However, to satisfy the control test, ‘what matters is lawful authority to command so far as there is scope for it. And there must always be some room for it, if only in incidental or collateral matters’.78 The employer need not exercise the power of control; possessing the power is sufficient. The exercise of the power may be particularly telling.79 Detailed directions given to the worker are not necessary, especially for professional or skilful workers80 and those paid by results or commission.81 Even for largely unskilled work an employer need not exercise regular control.82 In a one-person company the sole shareholder and director of a company may also be an employee of the company.83 The legal power to exercise control in such cases remains with the company.84 The power of the sole director or shareholder to set the terms of the contract and exercise powers to terminate it are not inconsistent with a finding of employment and will not ordinarily be of any special relevance in determining the nature of the contract.85 The power to discipline, suspend, summarily dismiss or terminate the engagement of the worker on short notice is indicative of an employment relationship. Such powers are part of the means by which control is [page 51] effectively exercised by an employer.86 The right to select the person to

perform the work is indicative of an employment relationship.87

Control: when, where, how and what work is to be performed 2.16 The power to dictate when work is to be performed is indicative of control. The stipulation of starting and finishing times, the right to grant or deny time off for a worker, and the power to require the worker to attend the employer’s premises for rehearsal, training or reporting purposes are all indicative of control.88 This factor will be less relevant for work in which there are flexible working hours.89 It is more difficult to impute the requisite degree of control when the employer has no power to control when the worker performs work.90 Care should be taken in weighing this consideration, as for most casual employees the employer cannot direct the employee to perform work at particular times. The power to dictate where work is to be performed is indicative of control.91 Many Australian employees now perform work from home or at a location distant from the employer’s premises. About 24% of workers perform work at home in their main or second job and 41% work at two or more locations in their main job.92 The fact that the employer is not in a position to directly supervise the employees in such circumstances does not mean that the control test cannot be satisfied.93 Labour hire companies often engage workers to perform work for clients. The worker will attend the premises of the client and will be subject to the direction and control of the client. The lack of control by the labour [page 52] hire company should not be considered of great significance where it has entered into such arrangements: see 2.49. The right to dictate how the work is performed is indicative of control.94 This includes telling the worker how to perform the task, requiring the worker to rectify errors and directing the worker how to conduct himself or herself when dealing with clients.95 An employer has the power to dictate what work is to be done by the

employee, subject to a contractual term to the contrary.96 Employees tend to be obliged to perform the work they are assigned whereas independent contractors tend to be able to accept or reject work without punitive consequences. There needs to be some definition of the work for independent contractors, though for employees there is often a direction about how as well as what work is to be done.97

Delegation and service 2.17 The personal performance of the obligation to serve is one of the hallmarks of an employment contract. If a worker has an unlimited right to delegate the performance of the contract to another, it is a significant, but not conclusive, indicator that the contract is not an employment contract,98 particularly if that right is exercised.99 The power to delegate will be a less significant factor when it is rarely exercised, or only [page 53] exercised pursuant to the permission of the employer, or only exercised in relation to minor and incidental aspects of the employment.100 There is a difference between a right to delegate the performance of the service and a right to obtain the assistance of another to perform the work.101 The right to delegate will not be relevant if it is a sham102 and may be less relevant when it does not reflect the realistic expectations of the parties about the delegation of the work.103 The fact that a person works exclusively for one employer tends to suggest that their relationship is one of employment.104 Prior to the use of the control test the distinction between servant and independent contractor lay in the exclusive service of the servant: see 1.44. In the twentieth century exclusive service evolved into a consideration that tended to prove employment, and its absence tended to prove a different relationship. This factor needs to be weighed with caution given the prevalence of part-time and casual employment.105 Approximately 30% of employees in Australia work part time, and of these employees about two-thirds are casuals. Around 6% of all

employees work more than one job: see 1.20. 2.18 The entitlement of the worker to perform other work also needs to be carefully weighed. It may be impracticable to work for more than one employer or the right to do so may be subject to the granting of the employer’s permission.106 In the absence of an express term regulating the matter, an employee is ordinarily free to perform work in his or her spare time for another employer so long as, having regard to the scope of the employee’s duties, there is no conflict of interest, misuse of position or conflict of duties in doing so: see 7.85. [page 54] The consideration that supports most ongoing employment contracts is the employee’s promise to serve the employer and the employer’s promise to provide remuneration for that service. An ongoing contract is less likely to be one of employment where the worker is not obliged to serve or the employer is not obliged to permit the worker to serve and earn remuneration.107 However, the absence of obligations to offer or accept work is consistent with a finding of casual employment.108

Benefits usually provided to employees 2.19 Whether the worker is provided with benefits commonly provided to employees is relevant in determining if an employment relationship exists. Such conditions include sick leave, annual leave, long service leave and the payment of workers’ compensation premiums and superannuation contributions. The provision of such benefits tends to suggest that the relationship is one of employment and their denial suggests the relationship is not.109 There is a degree of circularity in this indicium and it needs to be carefully weighed.110 The failure to provide many such benefits may be traced to a single common source, such as being paid by results. If so, they should not be valued as if they were separate and unrelated to that single source.111 By providing or refusing to provide benefits the employer may simply be

implementing the advice of an authority or may be responding to real or apprehended industrial pressure.112 Casual employees are ordinarily not entitled to benefits such as sick leave and annual leave. Little weight will [page 55] be granted to this indicium where the worker would not, if he or she were an employee, be entitled to the provision of the benefits.113 Statutes often require employers to provide employment-like benefits to independent contractors deemed to be employees for the purpose of the statute. The provision of the benefits to such workers will not be a significant matter.

Tax 2.20 Whether tax is deducted from the worker’s remuneration, and the type of tax that is deducted, are relevant in determining if an employment relationship exists.114 It has been held that the weight given to this matter, in a range of circumstances, should be slight. These factors will be given little weight if it is customary in the industry not to deduct income tax, if the employer has a history of not deducting tax from the pay of its employees, or if the parties were acting under advice from others when they adopted their position concerning tax.115 These factors will only be relevant if it can be assumed that the parties were familiar with their income tax obligations and ‘that the payer has acted in accordance with the requirements of income tax legislation in choosing one type of deduction rather than another’.116 Courts do not shy away from concluding that the relationship is one of employment, even when this will result in changed tax liabilities for the parties.117 [page 56]

Shams and express terms categorising the relationship

2.21 One of the more difficult issues in this field of law is the weight that should be given to clauses that clearly state that the relationship is not one of employment when those terms are otherwise discordant with the reality of the relationship and the parties’ practice. A conceptually analogous issue concerns the effect of an express term classifying the relationship as a partnership,118 or permitting the employee to delegate the performance of work to another,119 or establishing a contract between a ‘one-person company’ and an employee.120 2.22 Whether a worker is an employee governs the provision of a range of social, economic and industrial benefits. Employers and employees cannot ordinarily contract out of those benefits.121 By way of comment, there are similar public policy considerations that apply when the employer seeks to ‘opt out’ of providing those benefits by simply entering a contract whereby a worker states he or she is not an employee. Appellate courts have occasionally suggested that the significance afforded to express terms should depend in part on whether the issue arises as a matter only of private concern, or also has a public element.122 Whether the worker desires to be an independent contractor and whether that desire is well informed should not be determinative, just as a wellinformed desire to work for less than the wages set in a modern award is not a sufficient reason to avoid the benefits of the Fair Work Act. The weight given to express labelling by the parties is a worldwide problem and, as a general proposition, the arc of authority bends towards [page 57] preferring substance over form.123 If courts take at face value terms that opt out of the employment relationship then they encourage employers to exercise their relative bargaining strength: The concern to which tribunals must be alive is that armies of lawyers will simply place substitution clauses, or clauses denying any obligation to accept or provide work in employment contracts, as a matter of form, even where such terms do not begin to reflect the real relationship.124

2.23 Division 6 of Pt 3–1 of the Fair Work Act, titled ‘Sham Arrangements’,

contains provisions that appear to be aimed at the proper characterisation of the relationship by the employer and, indirectly, the encouragement of employment as a mode of engagement. Section 357 provides that an employer must not represent to an employee that the employee is engaged under a contract for services. This prohibition does not apply if the employer, when it made the representation, did not know, and was not reckless as to whether, the contract was a contract of employment: s 357(2).125 Section 358 prohibits an employer from dismissing or threatening to dismiss an employee in order to engage the individual as an independent contractor to perform the same, or substantially the same, work under a contract for services. Section 359 prohibits an employer from making a statement that the employer knows is false in order to persuade or influence the employee to enter into a contract for services under which the individual will perform, as an independent contractor, the same or substantially the same work for the employer. Sections 357 to 359 are penalty provisions whose contravention attracts a penalty of up to $33,000 for a corporate employer. It is probable that the reverse onus of proof provision in s 361 of the Act applies to ss 358 and 359.126 2.24 Whatever the social, political and economic merits of focusing on substance over form, ultimately a court must determine the legal effect of [page 58] the clause and it must do so in a manner consistent with the law. Vague cajoling to examine the reality of the relationship needs to be placed within a conceptually sound legal framework. This does not mean that reality and substance are irrelevant. However, it is suggested that the circumstances in which an agreed term can be taken at other than its face value should be able to be identified with reasonable precision and articulated in a manner that coheres with other rules of employment contract law. An express term stating that the contract is not an employment contract is not determinative of the issue, and many appellate courts have found a relationship to be one of employment despite the presence of such a term.127 An express term characterising the relationship is to be accorded significance

in determining the nature of the relationship, except when it is a sham.128 It is suggested that there are four situations where a term in an agreement can be taken at other than its face value: (i) where it is a sham (see 2.25); (ii) where it is an inaccurate labelling of the nature of the contract by the parties (see 2.26); (iii) where it does not reflect the reality of the relationship (see 2.27); and (iv) where it does not accurately record the agreement of the parties and requires rectification (see 2.29). These categories overlap, particularly the second and third categories. The effect of an express term categorising the relationship is intertwined with the parol evidence rule and the extent to which the subsequent conduct of the parties is admissible to prove the nature of the relationship between the parties: see 2.30. The views of the parties that their relationship is, or is not, one of employment are ordinarily afforded little weight.129 In ascertaining the [page 59] parties’ intention the court looks to the outward manifestations of the intention, not to the subjective intention of the parties.130 Statements made during the course of the relationship as to the parties’ understanding of their legal status ‘are usually unhelpful and legally irrelevant’.131

Shams 2.25 A sham is a term or agreement that takes the form of a legally effective transaction but which the parties intend should not have its apparent legal consequences.132 A sham has been described as: … a spurious imitation, a counterfeit, a disguise or a false front. It is not genuine or true, but something made in imitation of something else or made to appear to be something which it is not. It is something which is false or deceptive.133

A sham in this sense is difficult to prove. It involves a common intention to mislead: ‘an objective of deliberate deception of third parties’.134 Or, as it was recently explained in the High Court, a term is a sham when it is not intended by the parties ‘to have substantive, as opposed to apparent, legal effect’.135 No regard should be paid to the term if it is a sham.136

Inaccurate labelling of the relationship 2.26 A term in an agreement can be taken at other than its face value when the language of the document indicates that it falls into one legal category whereas when properly analysed in the light of the surrounding [page 60] circumstances it can be seen to fall into another.137 Where the relationship is clearly one of employment, a labelling term cannot alter the truth or substance of the relationship; but an agreed label can resolve an ambiguity: [S]uch a stipulation is not conclusive of the position it postulates; the parties cannot by their agreement change the nature of their relationship. Where, however, the nature of the relationship is otherwise ambiguous such a provision may remove the ambiguity.138

The term does not reflect the reality of the relationship 2.27 Appellate courts in Australia and the United Kingdom have repeatedly stated that in determining if a relationship is one of employment, it is important to consider the practical reality of the relationship.139 This in part reflects the fact that courts can find the terms are a sham, or that the terms inaccurately label the relationship, but such findings are not the only basis on which a court will refrain from giving unqualified effect to a written term.140 Courts often state that they look to the substance and not the form of the relationship.141 The reality of the relationship may contradict an express term characterising the relationship. Where there is a conflict between the agreement as a whole and one particular term of the contract, it is [page 61] permissible to remedy the contradiction by treating the particular term as having failed in its purpose.142

2.28 One purpose of examining the reality of the relationship is to ascertain the true agreement of the parties.143 And to ascertain what was truly agreed, courts in the United Kingdom have looked to the intentions and expectations of the parties as well as the written terms: [I]f the reality of the situation is that no one seriously expects that a worker will seek to provide a substitute, or refuse the work offered, the fact that the contract expressly provides for these unrealistic possibilities will not alter the true nature of the relationship. But if these clauses genuinely reflect what might realistically be expected to occur, the fact that the rights conferred have not in fact been exercised will not render the right meaningless. … Tribunals should take a sensible and robust view of these matters in order to prevent form undermining substance …144

The fact that a right has not been exercised by the parties does not mean that the right does not exist.145 The inquiry to ascertain the true agreement does not merely focus on the written terms at the inception of the contract. It is necessary to consider admissible evidence about the practice of the parties to reveal their intentions and expectations: The court or tribunal must consider whether or not the words of the written contract represent the true intentions or expectations of the parties (and therefore their implied agreement and contractual obligations), not only at the inception of the contract but at any later stage where the evidence shows that the parties have expressly or impliedly varied the agreement between them. … where there is a dispute as to the genuineness of a written term in a contract, the focus of the enquiry must be to discover the actual legal obligations of the parties. To carry out that exercise, the tribunal will have to examine all the relevant evidence. That will, of course, include the written term itself, read in the context of the whole agreement. It will also include evidence of how the parties conducted themselves in practice and what their expectations of each other were. Evidence of how the parties conducted themselves in practice may be

[page 62] so persuasive that the tribunal can draw an inference that that practice reflects the true obligations of the parties.146

This approach appears to be a development of the somewhat uncertain notion that a term in an agreement can be taken at other than its face value when it is a pretence. A pretence appears to be a non-fraudulent ‘less pejorative’ type of sham147 where the term is ‘not a genuine statement of the parties’ intention’.148 A term may be a pretence when it has been inserted for the ulterior purpose of avoiding a benefit granted by a statute.149

Inaccurate recording of the agreement 2.29 Rectification is an equitable remedy that concerns documents. It is a remedy to change the recording of the terms of the contract, not to change the terms of the contract. The remedy is available when the terms of the contract are written down incorrectly. Rectification can also occur to remedy a common mistake where the written agreement does not reflect the parties’ shared understanding as to a particular legal effect that the parties desired.150 These principles are rarely of any relevance in determining if a contract is one of employment as it is usually not the recording of the terms that is at issue but their legal effect.151

The totality of the relationship and the parol evidence rule 2.30 The application of the parol evidence rule in determining the nature of the contract between the parties is somewhat contentious, particularly regarding the role of the parties’ subsequent conduct. According to the traditional formulation in the parol evidence rule, when the written terms are the sole repository of the terms of the contract, then (subject to certain exceptions) evidence cannot be led to add to or contradict the written document.152 Evidence of the parties’ conduct after the contract is made is not admissible to prove the nature of a written contract that [page 63] contains all of the terms of the agreement.153 In practice, the breadth of the exceptions to this rule permits such evidence to be led in many cases to prove the nature of an employment contract. 2.31 The parol evidence rule only applies when the written document is the sole repository of an agreement.154 Evidence of the parties’ later practice may be adduced to resolve an ambiguity where the nature of the relationship cannot be ascertained from the contractual terms.155 Where a written contract does not record all of the terms, then evidence extrinsic to the written

document is admissible to prove those other terms and the relationship between the parties. For example, in Hollis v Vabu the written terms did not address fundamental issues such as the remuneration of the workers: It should be added that the relationship between the parties, for the purposes of this litigation, is to be found not merely from these contractual terms. The system which was operated thereunder and the work practices imposed by Vabu go to establishing ‘the totality of the relationship’ between the parties; it is this which is to be considered.156

It is not clear whether these observations, which direct attention to the totality of the relationship, are meant to suggest that the parol evidence rule has no application to determining if a worker is an employee.157 It is more likely that, in accordance with the parol evidence rule, where a written agreement is not the sole repository of an agreement then a court may have regard to the totality of the relationship, including the conduct of the parties after the making of the agreement.158 Evidence extrinsic to the writing itself is admissible to prove that the written terms are incomplete, that the parties have not reached an agreement, that the contract is partly oral and partly in writing, that it was subject to a condition precedent, or that prior to signing the parties agreed that certain terms would operate in a modified manner or [page 64] would not be enforced.159 The question of whether the parties intended a document to be the exclusive record of the terms of their agreement is a question of fact.160 The parol evidence rule does not limit evidence admitted to prove that the instrument was a sham.161 The subsequent conduct of the parties is relevant to prove the parties’ real intentions.162 Parol evidence is admissible to prove the subjective common intention of the parties.163 The practice of the parties after the inception of the contract may be evidence of what the parties agreed at the inception and can be adduced to prove their intention.164 2.32 To ascertain if the parties intended to form an employment contract the court considers the actions of the parties in the factual matrix in which they

occurred.165 That matrix includes the relative bargaining power of the parties, which must be taken into account in deciding whether the terms of any written agreement in truth represent what was agreed: [T]he circumstances in which contracts relating to work or services are concluded are often very different from those in which commercial contracts between parties of equal bargaining power are agreed. I accept that frequently, organisations which are offering work or requiring services to be provided by individuals are in a position to dictate the written terms which the other party has to accept. In practice, in this area of the law, it may be more common for a court or tribunal to have to investigate allegations that the written contract does not represent the actual terms agreed and the court or tribunal must be realistic and worldly wise when it does so.166

[page 65] Evidence of the parties’ later practice may also be adduced to prove whether the parties varied their agreement.167 This is particularly important in employment where the power to control is usually neither expressly conferred nor denied. When the employer does exercise a power to control an employee it may be pursuant to a variation to the contract between them: For, if in practice the company assumes the detailed direction and control of the agents in the daily performance of their work and the agents tacitly accept a position of subordination to authority and to orders and instructions as to the manner in which they carry out their duties, a clause designed to prevent the relation receiving the legal complexion which it truly wears would be ineffectual.168

2.33 By way of comment, it is suggested that one of the distinctive features of employment contracts is that they tend to be long term and fluid.169 The work performed by the employee may change over time; so may the extent of control by the employer. Sometimes courts approach the change by considering the nature of the relationship when the contract was formed and, if it is not one of employment, then examining whether there was a novation of the contract or a variation that altered its nature. Such an approach fails to pay adequate regard to the fluid nature of the relationship. By properly paying regard to the totality of the relationship (not just the terms) and the practical reality of its performance, courts give effect to one of the essential features of employment.170

OTHER RELATIONSHIPS CONSIDERED

Directors and corporate officers 2.34 A director in ordinary parlance is a member of the governing body of a company (or sometimes the sole governor) appointed or elected in accordance with its constitution.171 Such a director is a de jure director. Section 9 of the Corporations Act 2001 (Cth) extends that definition to [page 66] include any de facto directors and shadow directors of corporations to which that Act applies.172 A director (whether de jure, de facto or shadow) may also be an employee.173 A director who is an employee is commonly called an executive director. The sole governing director of a company can be appointed as an employee of the company and, in his or her capacity as a director, can terminate the employment.174 Usually a statute that grants rights to an employee also grants rights to a person who is an executive director. In some contexts, a statutory or contractual reference to an ‘employee’ might not include a director.175 Whether a director is also an employee is a question of fact. The ordinary tests discussed in 2.5–2.30 are applied, though special attention is often paid to issues of control and whether the contract is a sham, while less weight is given to whether the director is in business on his or her own account.176 Similar considerations arise when determining if a majority shareholder is also an employee of a corporation.177 2.35 Whether a person is an ‘officer’ is relevant in a number of different areas of employment law and the meaning given to that word slightly shifts accordingly.178 ‘Officer’ is defined in s 9 of the Corporations Act to include a director or secretary of the corporation. That statutory definition extends the ordinary definition to a person who makes, or [page 67]

participates in making, decisions that affect the whole, or a substantial part, of the business of the corporation and persons who have the capacity to significantly affect the corporation’s financial standing.179 Outside of the Corporations Act, an officer is usually a person who performs independent functions, ordinarily pursuant to statute, that are not subject to the control of an employer.180 An office usually has a continuing independent existence to which a person may be appointed, and which he or she can vacate and a successor be appointed.181 Officers will also be employees if they are engaged pursuant to an employment contract.182 It is only the officer, and not the employer, who has the authority to perform the functions attached to the office. The officer is not the agent of the employer when performing the officer’s independent functions and the employer is not vicariously liable for the acts of the officer in the performance of those functions.183 An officer might not be an employee if the employer exercises no control at all over him or her. More commonly, an officer will be subject to control by the employer in the performance of some functions and not others. Officers subject to some control will ordinarily have a contract of employment.184 An office holder in a registered organisation may also be an employee of the organisation for some purposes.185 The meaning of ‘officer’ in the public sector statutes is slightly different and is discussed in 2.39. [page 68]

The statutory and ‘special’ contract of directors and officers 2.36 A director or officer who is an employee of a corporation governed by the Corporations Act is party to two contracts. There is a statutory contract, formed by s 140 of the Corporations Act, between the director and the company, under which the director agrees to observe and perform the constitution and any replaceable rules so far as they apply to the director. Executive directors have an employment contract (sometimes called a special contract) independent of the statutory contract.186 An officer under the Corporations Act also has a statutory contract formed by s 140 and the

principles stated below regarding directors apply equally to officers. These principles also broadly apply to many other corporate employers not regulated by the Corporations Act — including incorporated associations and unions registered under the Fair Work Act — where the constitution forms a contract between the officers and the corporation.187 The existence of the statutory contract does not preclude the existence of an employment contract.188 The statutory contract regulates the relations between corporation and director, and the employment contract regulates the relations between corporation and employee: there is one contract qua director and one contract qua employee.189 2.37 Under the Corporations Act the removal of a director as a director may be effected under the constitution of the company or s 203C.190 The removal of a director from office, or the abolition of the office, may result in a breach of the employment contract that may sound in damages.191 Part 2D, Div 2 of the Corporations Act aims to prevent ‘golden handshakes’ to some senior employees by establishing a special scheme to govern termination payments. Broadly speaking, the scheme prohibits companies (or certain related persons) from giving managerial or executive employees a benefit [page 69] in connection with the employee’s retirement from an office or position of employment, unless the approval of members is given under s 200E.192 A director’s employment contract may grant rights that amplify or are inconsistent with the terms of the statutory contract. When a resolution of a board appointing a director as an employee contains no special terms and neither amplifies nor is inconsistent with the provisions of the constitution, then the director’s rights as an employee will be those specified in the constitution. The employee’s tenure as employee in such cases will usually terminate with his or her tenure as director.193 The employee will have a right under an employment contract to the remuneration specified in the contract.194 Where, however, the terms governing the appointment in the employment contract are for a specified period, or the contract grants rights greater than or inconsistent with the constitution, the employment contract

will govern the employee’s rights as an employee.195 A company’s statutory power to alter its articles cannot be restrained by a contract with the director. The relationship between a special contract and the constitution depends on the terms of the contract and the intention of the parties.196 This is ascertained in the ordinary objective manner.197 A company cannot unilaterally vary its employment contracts by altering its constitution unless the employment contract expressly or impliedly grants the employer the right to do so.198 2.38 The employment contract may incorporate the whole or part of the constitution by reference.199 By incorporating the constitution the parties may evince an intention that the terms of the employment contract will alter when the constitution is altered.200 By amending the constitution the company can alter the terms of the employment contract [page 70] without breaching the contract. Alternatively, depending on the terms of the contract and the constitution, the incorporation of the constitution by reference might evince an intention that the terms of the employment contract do not alter if the constitution is altered.201 For example, in Carrier Australasia Ltd v Hunt, the five-year employment contract was stated to be ‘subject to the articles’. The articles contained a power ‘subject to the contract’ to remove the employee as director. The company amended the articles granting an unconditional right to terminate during the five-year term and then exercised that right. The court held that the rights under the contract to serve as an employee for five years were not affected by amendment to the power to remove as director.202 A similar conclusion was reached by the House of Lords in Southern Foundries Ltd v Shirlaw.203 The employment contract of the managing director was for a fixed term of 10 years. Under the constitution, the managing director vacated that office if he or she was removed as director. The powers in the constitution to remove a director were expressly ‘subject to the terms of any subsisting agreement’. After a takeover of the company, the

constitution was altered to grant the company the power to remove a director at any time. The company exercised that power and the office of managing director was thereby vacated. The House of Lords held that the managing director could recover damages for breach of the contract. Although the company had the power to alter its constitution, it breached the employment contract when it exercised that power in a manner inconsistent with the terms of the employment contract.

Officers in the public sector 2.39 Holding an office and being an employee are not mutually exclusive categories.204 Almost all persons described as ‘officers’ in various statutes also have a concurrent contract of employment: [I]n Australia persons described or appointed as officers are, in almost all cases, employees under a contract although they may at times exercise independent functions invested in them in respect of some of their duties.205

[page 71] Some public sector statutes draw a distinction between ‘officers’ and ‘employees’, with the former usually referring to permanent employees and the latter to temporary employees.206 Such definitional devices merely distinguish between different types of employees. Whether a person is an employee does not depend on such devices.207 The difference between an officer and an employee is increasingly irrelevant as modern public sector employment moves further from its historical roots and closer to a contractual model founded on statute. A person may hold an office but not be an employee when he or she performs independent functions and is not the subject of any control by an employer in the performance of his or her work. Officers subject to some control will ordinarily have a concurrent contract of employment.208 The identity of the employer of public sector employees can usually be resolved by an application of the principles of agency. Ministers often retain a power to appoint certain employees on behalf of the Crown, unless the power is superseded or restricted by statute.209 The Crown also authorises a

range of others to appoint employees pursuant to various statutes.210 Any contract formed is not between the employee and the person who exercises the power to appoint: the contract is with the principal. For public servants this will usually be the Crown, not the Minister and not the person who exercises the power of appointment under the statute. Under some public sector statutes the employer is identified as a statutory corporation. In the absence of such identification, as a general rule if the statutory corporation that forms the contract represents the Crown then the Crown is the employer; if the statutory corporation does not represent the Crown, then the employer is usually the corporation itself.211 [page 72]

Bailment, partnerships, tenancy and agency Employment and bailment 2.40 A bailment comes into existence upon a delivery of goods by one person, the bailor, into the possession of another person, the bailee, upon a promise that the goods will be redelivered to the bailor or dealt with in a stipulated way.212 In the course of employment the employer’s goods are often delivered to the employee. An employee who acquires control of the employer’s goods in the course of employment does not, by virtue of that control alone, become a bailee.213 Employees ordinarily have custody of an employer’s goods, not possession of them.214 Custody and possession are different. An employee may become a bailee in unusual circumstances, such as when goods are received from the employer unconnected with employment.215 There is a long line of cases that supports the view that, ordinarily, a taxi driver is not an employee but merely a bailee of the taxi.216

Employment and partnerships 2.41 A partnership exists where there is a contractual relationship between persons carrying on business in common with a view to profit.217 A partnership has no legal personality distinct from that of the individual

partners.218 Issues associated with the characterisation of relations between two parties as a partnership or as employment usually arise in one of two contexts. [page 73] First, if the employer has contracted with a partnership then it is unlikely that an employment relationship is created between the employer and the partnership.219 An employee is almost always a single human, while a partnership consists of two or more persons. There is some authority supporting the view that it is possible for a partnership to be an employee. In some cases, applying the tests in 2.5–2.30, an employer who appears to have contracted with a partnership may be found to have engaged the partnership, or one or each of the partners, as an employee.220 Second, a person cannot be both a partner in, and an employee of, the same enterprise. The court will examine the substance of the relationship rather than its mere form to determine its nature: see 2.21–2.28. A term in a contract that provides that it creates a partnership does not preclude the court from concluding the relationship is in truth one of employment.221 The right to share in the profits of the business is evidence of a partnership, but is not conclusive.222 The remuneration of an employee can be based wholly or partly on the profits of the alleged partnership.223 The various Partnership Acts expressly provide that a contract for the remuneration of an employee engaged in a business by a share of the profits of the business does not of itself make the employee a partner in [page 74] the business.224 Whether the alleged partners agree to share the losses of the venture is also relevant in determining the nature of the relationship.225

Employee and tenant

2.42 An employee can be a tenant of his or her employer.226 The right of an employee to occupy premises provided by an employer may be pursuant to a licence, rather than a tenancy, where the occupation is for the purpose of ensuring a more effective performance of his or her duties as an employee.227 If the premises are occupied as a concession to the employee, as part of the employee’s remuneration, in exchange for rent being paid by the employee to the employer, or pursuant to a written tenancy or leasing agreement, then a tenancy will often be created.228

Employment and agency 2.43 The relationship of agency exists when one person (the agent) is authorised by the other (the principal) to do, on behalf of the principal, acts which affect the principal’s rights and duties with respect to third persons. An employee can be an agent for the employer and persons who are not employees may be agents.229

Tripartite employment arrangements 2.44 There are a number of complexities that are associated with work arrangements involving three parties.230 These arrangements broadly fit one of three models. First, there is the recruitment or placement model. [page 75] A labour hire agency acting as an agent for the client recruits the worker for and on behalf of the client. In such cases the contract to perform work is usually formed between the worker and the client directly. Sometimes, it is formed between the worker and the agency acting on behalf of a disclosed principal being the client.231 The second type of arrangement arises when it is clear that the worker is employed, but it is not clear which of two entities is the employer: see 2.45–2.48. Third, there is the labour hire model discussed in 2.49–2.50. In relation to each model the key questions are the same: (i) does the

worker have a contract with the agency or the client, or both? (ii) is the contract a contract of employment or an independent contract?

Who are the parties to the contract? 2.45 Where it is clear that the worker is employed, but it is not clear which of two entities is the employer, then the nature of the relationship is not in question and the issue is the identity of the parties to the contract. This issue most often arises when the two entities are related companies or where it is alleged that the contract has been transferred or assigned from one employer to another. The law governing the assignment or transfer of employment is discussed in 6.40 and 13.13. 2.46 Ascertaining the identity of the parties commences with a consideration of the terms of the contract: ‘it is necessary to look to the circumstances of the engagement and to ascertain who it was that offered employment, and whether the worker accepted that offer’.232 This requires close consideration of the written or oral terms and who made the offer. Documents identifying who is the employer are very important, but not decisive. The documents may be a sham, or not reflect the reality of the arrangement, or may have been created for the purposes of minimising tax or insurance obligations, or may be inaccurate.233 National system employers have a statutory duty to give a pay slip to employees that records [page 76] the name of the employer.234 The name appearing on these documents is relevant in determining the identity of the contracting party.235 In ascertaining a party’s intention to enter into the contract, the court looks to the outward manifestations of the intention, that is, what the parties said and did.236 The issue is whether a reasonable person in the position of the employee would conclude that the statements and conduct of the employer amounted to an intention to enter into a contract. Evidence from an employer that it did not subjectively intend to enter into a contract does not address this issue.237

2.47 For reasons that are not clear, courts tend to approach the question of whether a contract exists between two parties by applying the principles developed to determine the nature of the legal relationship between the parties.238 The evidence considered in determining these separate issues is broadly similar. Where the terms do not reveal the parties to the contract, then under the parol evidence rule it is permissible to lead extrinsic evidence to prove the parties to the contract. In determining the nature of the relationship courts will take into account the totality of the circumstances surrounding the relationship.239 This includes conduct subsequent to the formation of the relationship. This evidence includes: … conversations and actions at the time of the engagement of the employees, identification of the terms and conditions of the relationship of employment, the identity of the entity that exercised control and the manner of such exercise with respect to the applicants in their capacities as employees, the identity of the entity that provided the materials, equipment and resources to enable the applicants to perform their work, the identity of the entity to which the applicants as employees had obligations of reporting, the understanding and belief of the parties themselves, the methods and means of payment to the applicants and

[page 77] the matters revealed from the various management and administrative documents relating to the company.240

Who exercises control over the manner of the performance of work is relevant.241 Ultimately, it is the legal right to exercise that control that is important rather than the exercise of control in fact. The submission by the employee to the direction of a third party may be consistent with employment pro hac vice.242 Such an arrangement does not affect the assignment of rights to the temporary ‘employer’ and creates no contractual relationship between the employee and the temporary ‘employer’. 2.48 The entity that pays the employee’s remuneration is relevant in determining the identity of the employer. The fact that an employee commences receiving wages from a different entity does not prove the consent of the employee to a change in the identity of the employer. The receipt of wages from an entity is consistent with the vicarious performance of that obligation by a third party to the contract.243 There have been a series of cases in which courts have refused to draw an inference that an employee

has consented to a change in employer on the basis of the pay slips, group certificates and superannuation contributions issued by the putative transferee.244 A miscellany of other matters also carry some weight in determining the issue of who is the employer. It may also be relevant to identify which entity hires the employee, occupies the premises on which work is performed, makes decisions about remuneration and discipline, performs [page 78] the human resources functions and exercises the rights granted by the contract to the employer.245 It is possible that the identified contracting party is acting as an agent for the true employer. The identified party will be the employer unless it clearly appears that he or she is acting as an agent.246 When forming the contract a principal may be disclosed or undisclosed. A principal is undisclosed when the employee does not know of the principal’s existence and is a disclosed principal when the employee knows that the agent is contracting on behalf of another party. It is unlikely that an employment contract can be formed between an employee and an undisclosed principal.247

Labour hire arrangements 2.49 There has been an enormous increase in the past two decades in the number of labour hire arrangements. Typically the arrangements are as follows: the labour hire agency enters into a contract with a worker. Under the contract the worker agrees to perform work for a client of the labour hire agency. The worker will then perform the work at the client’s premises and be subject to the direction and control exercised by the client. The worker will receive remuneration from the agency, but in some cases the remuneration is paid directly by the client. The worker may have little ongoing contact with the agency and may work for the client uninterrupted for years. The agency and the client will be parties to a contract whereby the agency agrees for a fee to supply the services of a worker to the client and the

client will be permitted to direct the worker in the performance of work.248 Ordinarily under such arrangements there is a contract between the agency and the worker. Whether it is a contract of employment depends on the application of the tests discussed in 2.5–2.30, with one gloss. An employer may, without altering the relationship, direct the employee to do work which will benefit another.249 The power to exercise control may be delegated or devolved from the employer to the client and so the control test is often not as significant in resolving the issue.250 [page 79]

A contract between the employee and the client? 2.50 There may be a contract, express or implied, between the worker and the client. Assuming a contract is not formed by a statute,251 to form a contract there must be an agreement between the parties.252 It must be supported by consideration.253 The worker and the client must have intended to enter into legal relations with each other.254 Where there is no contract between the client and the worker then there cannot be a contract of employment.255 It is not uncommon for a worker, after working for a client for a period, to accept an offer of employment from the client. Such arrangements are usually express. When such an agreement exists it is not negated by the fact that there may be some lingering communication with the agency or that the agency may continue to pay the remuneration.256 2.51 In the absence of an express contract one may be implied by the conduct of the parties. Work arrangements for workers engaged to perform a job for long periods for clients often exhibit all of the external trappings of employment, such as regular attendance at the client’s premises and obedience to directions. The fact that the client is the ultimate beneficiary of the performance of the work does not mean a contract is thereby formed.257 Nor is it determinative that the work is performed on the client’s premises or is the subject of the client’s direction and control.258 It is the legal right to control the performance of the work arising from a contract with the worker that

[page 80] is significant, not the de facto practical exercise of control.259 Whether it is the client or the agency that is liable to rectify any underpayment is significant.260 In determining whether there is a contract between the worker and the client the fact that the client may be vicariously liable for the acts of the worker is not determinative. Vicarious liability not only arises from a relationship of employer and employee, it may also arise as a result of the practical control exercised by the client.261 Occasionally it has been suggested that the labour hire agency is acting as an agent on behalf of the client in the formation of a contract between the worker and the client. Although this is possible, it is not a construction that has been accepted in most courts to date when applied to separate and independently functioning businesses.262

Joint employment 2.52 There have been suggestions in recent years that the common law should develop a ‘doctrine’ of joint employment.263 Joint employment in this context means that in a labour hire arrangement described above both the client and the agency would be the employers when both exercise control over the employee. A joint employment contract would be tripartite and not consist of two bipartite contracts. A number of Australian decisions have recognised the possibility of a finding of joint employment, but none have found that such a relationship exists.264 There is no reason why, as a matter of principle, a finding of joint employment could not be made. An express contract can be made [page 81] between an employee and two employers.265 The difficulty in practice is that in a labour hire arrangement there are usually two express contracts: one

between the agency and the employee and the other between the agency and the client. The question is then whether the agency, the client and the employee all jointly intended to enter into a tripartite contract. As a matter of fact it is unlikely that such an intention will exist. _________________________ 1.

Federal Commissioner of Taxation v Barrett (1973) 129 CLR 395 at 403; 2 ALR 65 at 69; Ace Insurance Ltd v Trifunovski [2011] FCA 1204 at [124]; R v Foster; Ex parte The Commonwealth Life (Amalgamated) Assurances Ltd (1952) 85 CLR 138 at 153; cf Ireland v Johnson (2009) 189 IR 135 at [28]–[32] (‘employment’ did not only mean engagement under a contract of employment) and Konrad v Victoria Police (1999) 91 FCR 95; 165 ALR 23 at [14]–[15] and [102]–[104].

2.

Narich Pty Ltd v Commissioner of Pay-Roll Tax [1983] 2 NSWLR 597 at 600; Stevenson Jordan & Harrison Ltd v Macdonald & Evans [1952] 1 TLR 101 at 111; s 5 of the Independent Contractors Act 2006 (Cth) and ss 357–359 of the Fair Work Act still utilise this distinction.

3.

Emmens v Elderton (1853) IV HLC 624; 10 ER 606 and Couch v Steel (1854) 3 El & Bl 402; 118 ER 1193.

4.

The term ‘independent contractor’ is defined in ss 4 and 5 of the Independent Contractors Act. An examination of the legal regulation of independent contractors is beyond the scope of this text: see J Riley, ‘A Fair Deal for the Entrepreneurial Worker? Self-employment and Independent Contracting Post Work Choices’ (2006) 19 AJLL 246.

5.

Hollis v Vabu Pty Ltd (2001) 207 CLR 21; 181 ALR 263; 106 IR 80 at [36], [39]; On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) (2011) 279 ALR 341; 206 IR 252; [2011] FCA 366 at [188]; cf Hollis v Vabu at [72], [93] per McHugh J.

6.

Forstaff Pty Ltd v Chief Commissioner of State Revenue (2004) 144 IR 1; [2004] NSWSC 573 at [75].

7.

Hollis v Vabu, note 5 above, at [36]–[38]; Forstaff Pty Ltd v Chief Commissioner of State Revenue, note 6 above, at [70]–[75] and Brooks v Burns Philp Trustee Co Ltd (1969) 121 CLR 432 at 458.

8.

Ace Insurance Ltd v Trifunovski, note 1 above, at [25]–[28].

9.

See, for example, Australian Air Express Pty Ltd v Langford (2005) 147 IR 240; [2005] NSWCA 96; Mason & Cox Pty Ltd v McCann (1999) 74 SASR 438; [1999] SASC 544 and McMahon Services Pty Ltd v Cox (2001) 78 SASR 540.

10.

Australian Mutual Provident Society v Chaplin (1978) 18 ALR 385 at 392; Bridges Financial Services Pty Ltd v Chief Commissioner of State Revenue (2005) 222 at [204]; Sweeney v Boylan Nominees Pty Ltd (2006) 226 CLR 161; 227 ALR 46 at [31]. On partnerships, see 2.41.

11.

Roy Morgan Research Pty Ltd v Commissioner of Taxation (2010) 184 FCR 448; 268 ALR 232 at [43]; Burke v Reander Pty Ltd (1996) 69 IR 346 at 353; Catamaran Cruisers Ltd v Williams [1994] IRLR 386 at [13]; Building Workers’ Industrial Union of Australia v Odco Pty Ltd (1991) 29 FCR 104 at 118–19; 99 ALR 735 at 747–8; Southway Group Ltd v Wolff (1991) 57 BLR 33 at 53; Kitchen Design Systems Pty Ltd v Moran (2007) 165 IR 127 at [46] and Ace Insurance Ltd v Trifunovski, note 1 above, at [95]. See 9.53.

12.

See 2.45 and 2.52.

13.

Victorian Workcover Authority v Game (2007) 16 VR 393; [2007] VSCA 86 at [27] and Barnes v Dawson [1962] NSWR 73.

14.

See generally A Clayton and R Mitchell, Study on Employment Situations and Worker Protection in Australia: A Report to the International Labour Office, Centre for Employment and Labour Relations Law, University of Melbourne, 1999, pp 29–46; A Clayton et al, ‘The Legal Concept of Work-Related Injury and Disease in Australian OHS and Workers’ Compensation Systems’ (2002) 15 AJLL 105 at 116–22.

15.

Stevens v Brodribb Sawmilling Co Proprietary Limited (1986) 160 CLR 16 at 24, 35 and 49; 63 ALR 513 at 517, 525 and 536; R v Foster; Ex parte The Commonwealth Life (Amalgamated) Assurances Ltd, note 1 above, at 151; Queensland Stations v The Federal Commissioner of Taxation (1945) 70 CLR 539 at 546 and 552 and FCT v Barrett, note 1 above, CLR at 401; ALR at 67.

16.

See the discussion in Re Porter (1989) 34 IR 179 at 182–4 and A Stewart, ‘Redefining Employment? Meeting the Challenge of Contract and Agency Labour’ (2002) 15 AJLL 235 at 272. In the United Kingdom courts tend to use a test originally formulated by MacKenna J in Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497 at 515; 1 All ER 433 at 439–40, most recently endorsed in Autoclenz Ltd v Belcher [2011] 4 All ER 745; [2011] UKSC 41 at [18].

17.

Federal Commissioner of Taxation v J Walter Thompson (Australia) Pty Ltd (1944) 69 CLR 227 at 221; Attorney-General (NSW) v The Perpetual Trustee Company (Ltd) (1952) 85 CLR 237 at 299–300.

18.

Barro Group Pty Ltd v Fraser [1985] VR 577 at 581–2; Humberstone v Northern Timber Mills (1949) 79 CLR 389 at 404; Wright v Attorney-General for the State of Tasmania (1954) 94 CLR 409 at 413, 414 and 418; Price v Grant Industries Pty Ltd (1978) 21 ALR 388 at 393; Performing Right Society Ltd v Mitchell and Booker (Palais de Danse) Ltd [1924] 1 KB 762 at 767–8; Queensland Stations Pty Ltd v The Federal Commissioner of Taxation (1945) 70 CLR 539 at 545 and 548 and Konrad v Victoria Police, note 1 above, at [104].

19.

Marshall v Whittaker’s Building Supply Co (1963) 109 CLR 210 at 217 per Windeyer J, referred to approvingly in Hollis v Vabu, note 5 above, at [39]–[40] and [58]; Sweeney v Boylan Nominees, note 10 above, at [31]–[33]. It is an approach applied in recent appellate decisions in Australian Air Express Pty Ltd v Langford, note 9 above, at [16]; Yaraka Holdings Pty Ltd v Giljevic (2006) 149 IR 339; [2006] ACTCA 6 at [60]; Lee Ting Sang v Chung Chi-Keung [1990] 2 AC 374 at 382; Wesfarmers Federation Insurance Ltd v Wells [2008] NSWCA 186 at [34] and Abdalla v Viewdaze Pty Ltd (2003) 122 IR 215 at [34].

20.

Stevens v Brodribb, note 15 above, CLR at 49; ALR at 536; Articulate Restorations and Development Pty Limited v Crawford (1994) 57 IR 371 at 375 and 381; Commissioner of PayRoll Tax v Mary Kay Cosmetics Pty Ltd [1982] VR 871 at 878; Re Porter, note 16 above, at 184.

21.

Hall (Inspector of Taxes) v Lorimer [1992] 1 WLR 939 at 944; Roy Morgan, note 11 above, at [31]; Boylan Nominees Pty Ltd v Sweeney (2005) 148 IR 123 at [51]–[52] (aff’d Sweeney v Boylan Nominees, note 10 above); Hollis v Vabu, note 5 above, at [48]; FCT v Barrett, note 1 above, CLR at 406–7; ALR at 72–3; Re Porter, note 16 above, at 184 and ACT Visiting Medical Officers Association v Australian Industrial Relations Commission (2006) 232 ALR 69; 153 IR 228 at [28].

22.

Australian Air Express Pty Ltd v Langford, note 9 above, at [15]; ACT Visiting Medical Officers Association v Australian Industrial Relations Commission, note 21 above, at [18] and [28] and JA & BM Bowden & Sons Pty Ltd v Chief Commissioner of State Revenue (NSW) (2001) 105 IR 66;

[2001] NSWCA 125 at [15]–[17]. 23.

Australian Timber Workers Union v Monaro Sawmills Pty Ltd (1980) 29 ALR 322 at 324; ACT Visiting Medical Officers Association v Australian Industrial Relations Commission, note 21 above, at [16]–[18]; Price v Grant Industries Pty Ltd, note 18 above, at 393; Marshall v Whittaker’s Building Supply Co (1963) 109 CLR 210 at 216–17; cf Roy Morgan, note 11 above, at [26]–[34]; Lee Ting Sang v Chung Chi-Keung, note 19 above, at 384–5; Protective Security Pty Ltd v Bedelph (2004) 13 Tas R 354 at [22]–[28], [62]–[67], [69]–[77]; Mahony v Industrial Registrar of New South Wales (1986) 8 NSWLR 1; 18 IR 249 and Swift Placements Pty Ltd v WorkCover Authority (NSW) (2000) 96 IR 69 at [8]–[12].

24.

See the cases at note 19; the most extensive discussion of this principle and a reformulation of it is contained in On Call Interpreters, note 5 above, at [208]–[220].

25.

Wesfarmers Federation Insurance Ltd v Wells, note 19 above, at [34]–[42].

26.

On Call Interpreters, note 5 above, at [212]–[216]; A Stewart, note 16 above, at 261.

27.

Lee Ting Sang v Chung Chi-Keung, note 19 above, at 382 and 383–4.

28.

Australian Mutual Provident Society v Chaplin, note 10 above, at 394 (more than 50% of the commission earned was spent on business expenses); Stevens v Brodribb, note 15 above, CLR at 37; ALR at 526–7 (71% of the income earned was spent on business expenses); Barro Group Pty Ltd v Fraser, note 18 above, at 581 (75% of the income earned was spent on business expenses); Bridges Financial Services Pty Ltd v Chief Commissioner of State Revenue, note 10 above, at [205]; Yaraka Holdings Pty Ltd v Giljevic, note 19 above, at [54].

29.

Hollis v Vabu, note 5 above, at [54] and Whitehead v Workcover/Employers Mutual Fund Ltd (2007) 168 IR 443 at [20].

30.

Roy Morgan, note 11 above, at [47]; Yaraka Holdings Pty Ltd v Giljevic, note 19 above, at [40]– [41] and [49]; Transport Workers Union of Australia v Glynburn Contractors (Salisbury) Pty Ltd (1990) 34 IR 138 at 143–4; Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance, note 16 above, at 446–7; Connelly v Wells (1994) 55 IR 73 at 77, 87 and at 91–2 per Clarke JA (dissenting); Tsang v Department of the Chief Minister (1996) 64 IR 321 at 327 and JA & BM Bowden & Sons Pty Ltd v Chief Commissioner of State Revenue (NSW), note 22 above, at [84]–[86].

31.

Yaraka Holdings Pty Ltd v Giljevic, note 19 above, at [53] and Ace Insurance Ltd v Trifunovski, note 1 above, at [83]–[87].

32.

Bridges Financial Services Pty Ltd v Chief Commissioner of State Revenue, note 10 above, at [203] and [216]; Hollis v Vabu, note 5 above, at [48]; Stevens v Brodribb, note 15 above, CLR at 37; ALR at 526–7; Re Porter, note 16 above, at 186; Roy Morgan, note 11 above, at [46].

33.

Hollis v Vabu, note 5 above, at [48]; Roy Morgan, note 11 above, at [46] and Damevski v Giudice (2003) 133 FCR 438; 202 ALR 494; 129 IR 53 at [54].

34.

Roy Morgan, note 11 above, at [46].

35.

Articulate Restorations and Development Pty Limited v Crawford, note 20 above, at 378–9; Yaraka Holdings Pty Ltd v Giljevic, note 19 above, at [49]; Roy Morgan, note 11 above, at [42] (worker paid a set fee for a task which was calculated by reference to the average time for completing the task); Price v Grant Industries Pty Ltd, note 18 above, at 393 and 398; Queensland Stations Pty Ltd v The Federal Commissioner of Taxation, note 18 above, at 548 and 550–1; JA & BM Bowden & Sons Pty Ltd v Chief Commissioner of State Revenue (NSW), note 22 above, at [94]–[100]; Blake v Sitefate Pty Limited (1997) 74 IR 466 at 469; see also Lopez v Deputy Commissioner of Taxation (2005) 233 ALR 405 at [86]–[87] and On Call Interpreters,

note 5 above, at [277]. 36.

Articulate Restorations and Development Pty Limited v Crawford, note 20 above, at 378–9; Stevens v Brodribb, note 15 above, CLR at 25; ALR at 518; Yaraka Holdings Pty Ltd v Giljevic, note 19 above, at [49]; Hollis v Vabu, note 5 above, at [54]; Roy Morgan, note 11 above, at [42] (worker paid a set fee for a task which was calculated by reference to the average time for completing the task); Price v Grant Industries Pty Ltd, note 18 above, at 393 and 398; Queensland Stations Pty Ltd v The Federal Commissioner of Taxation, note 18 above, at 548 and 550–1; BWIU v Odco, note 11 above, FCR at 126; ALR at 755; Australian Timber Workers Union v Monaro Sawmills Pty Ltd, note 23 above; FCT v Barrett, note 1 above, CLR at 406; ALR at 71–2; Bertram v Armstrong & De Mamiel Constructions Pty Ltd (1978) 23 ACTR 15 at 19 and Barone v Olympic Industries Pty Ltd (1984) 8 IR 439 at 441.

37.

See Fair Work Act s 21.

38.

FCT v Barrett, note 1 above, CLR at 406; ALR at 71–2; Peter F Burns Pty Ltd v Commissioner of Stamps [1980] 24 SASR 283.

39.

Connelly v Wells, note 30 above; Hayman v Betta Brushware Pty Limited (1946) 63 WN (NSW) 247; Shand v Ball [1936] AR (NSW) 77 at 81; Hackney v Kefford [1940] AR (NSW) 231 at 237– 8.

40.

Articulate Restorations and Development Pty Limited v Crawford, note 20 above, at 379.

41.

On Call Interpreters, note 5 above, at [217].

42.

Sweeney v Boylan Nominees, note 10 above, at [31]; Climaze Holdings Pty Limited v Dyson (1995) 13 WAR 487; 58 IR 260 at 267–8; Wesfarmers Federation Insurance Ltd v Wells, note 19 above, at [57] and Tsang v Department of the Chief Minister, note 30 above, at 325.

43.

Hollis v Vabu, note 5 above, at [54].

44.

Connelly v Wells, note 30 above, at 86–7.

45.

Stevens v Brodribb, note 15 above, CLR at 24 and 37 ALR at 517 and 526–7; Connelly v Wells, note 30 above, at 76, 85–86; Humberstone v Northern Timber Mills, note 18 above, at 404.

46.

Roy Morgan, note 11 above, at [41]; Hollis v Vabu, note 5 above, at [56]; Ace Insurance Ltd v Trifunovski, note 1 above, at [88]; cf the specialised vehicles in Humberstone v Northern Timber Mills, note 18 above; Wright v Attorney-General for the State of Tasmania, note 18 above, and Marshall v Whittaker’s Building Supply Co (1963) 109 CLR 210 at 213–14.

47.

Australian Air Express Pty Ltd v Langford, note 9 above, at [18]–[46]; Hollis v Vabu, note 5 above, at [22], [47], [56]; JA & BM Bowden & Sons Pty Ltd v Chief Commissioner of State Revenue (NSW), note 22 above, at [104]; cf Re Porter, note 16 above, at 186.

48.

Australian Air Express Pty Ltd v Langford, note 9 above, at [36]; Humberstone v Northern Timber Mills, note 18 above, at 404–5 and Stevens v Brodribb, note 15 above, CLR at 26; ALR at 518–19.

49.

Queensland Stations Pty Ltd v The Federal Commissioner of Taxation, note 18 above, at 548 and 550 (where the equipment provided by the worker included 30 horses, 8 sets of riding gear, a wagonette and horses, camping and cooking gear, and rations for 5 workers for 14 days) and Australian Timber Workers Union v Monaro Sawmills Pty Ltd, note 23 above, at 328.

50.

Wesfarmers Federation Insurance Ltd v Wells, note 19 above, at [52]; Re Porter, note 16 above.

51.

Yaraka Holdings Pty Ltd v Giljevic, note 19 above, at [40] and Connolly v Wells (1994) 55 IR 73.

52.

Roy Morgan, note 11 above, at [40] and [47] and Yaraka Holdings Pty Ltd v Giljevic, note 19

above, at [40] and [78]. 53.

Australian Timber Workers Union v Monaro Sawmills Pty Ltd, note 23 above, at 329; Sgobino v The State of South Australia (1987) 46 SASR 292 at 305–7 and JA & BM Bowden & Sons Pty Ltd v Chief Commissioner of State Revenue (NSW), note 22 above, at [101]–[102].

54.

Stevenson Jordan and Harrison, Ltd v MacDonald and Evans (1952) 1 TLR 101 at 111; Bank Voor Handel en Scheepvaart NV v Slatford (1953) 1 QB 248 at 295; on the utility of this test see Stevens v Brodribb, note 15 above, CLR at 27; ALR at 519; FCT v Barrett, note 1 above, CLR at 402; ALR at 68; Commissioner of Pay-Roll Tax v Mary Kay Cosmetics Pty Ltd, note 20 above, at 879 and Lee Ting Sang v Chung Chi-Keung, note 19 above, at 382 and 386–8.

55.

Hollis v Vabu, note 5 above, at [57]; Lee Ting Sang v Chung Chi-Keung, note 19 above, at 382 and 386–8; Stevens v Brodribb, note 15 above, CLR at 26–7 and 35–6; ALR at 519 and 525–6 and Tsang v Department of the Chief Minister, note 30 above, at 326–7.

56.

On Call Interpreters, note 5 above at [287]–[289].

57.

Re Porter, note 16 above, at 184–5; Tsang v Department of the Chief Minister, note 30 above, at 327; see the discussion of exclusive service in 2.17.

58.

Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co-operative Assurance Co of Australia Ltd (1931) 46 CLR 41 at 48; Hollis v Vabu, note 5 above, at [50]–[52]; Roy Morgan, note 11 above, at [44]–[46]; Sweeney v Boylan Nominees, note 10 above, at [19]–[33]; Yaraka Holdings Pty Ltd v Giljevic, note 19 above, at [43] and Victorian Workcover Authority v Game, note 13 above, at [42]–[57].

59.

Hollis v Vabu, note 5 above, at [40]–[42]; Sweeney v Boylan Nominees, note 10 above, at [14]– [16], [26]–[29] and Victorian Workcover Authority v Game, note 13 above, at [45]–[56].

60.

Sweeney v Boylan Nominees, note 10 above, at [32]; Yaraka Holdings Pty Ltd v Giljevic, note 19 above, at [35]; Roy Morgan, note 11 above, at [46] and FCT v Barrett, note 1 above, CLR at 406–7; ALR at 71.

61.

Hollis v Vabu, note 5 above, at [39]–[40], [50]–[52]; Yaraka Holdings Pty Ltd v Giljevic, note 19 above, at [43]; On Call Interpreters, note 5 above, at [270]–[274].

62.

Hollis v Vabu, note 5 above, at [48]; Yaraka Holdings Pty Ltd v Giljevic, note 19 above, at [51]; TWU v Glynburn, note 30 above, at 143; Damevski v Giudice, note 33 above, at [56]–[58] and Dacas v Brook Street Bureau (UK) Ltd [2003] IRLR 190.

63.

On Call Interpreters, note 5 above, at [227]–[232].

64.

See O Kahn-Freund, ‘Servants and Independent Contractors’ (1951) 14 MLR 504 at 505–6 and 1.28, 1.38 and 1.44.

65.

Zuijs v Wirth Brothers Pty Ltd (1955) 93 CLR 561 at 570 and Federal Commissioner of Taxation v J Walter Thompson (Australia) Pty Ltd, note 17 above.

66.

Narich Pty Ltd v Commissioner of Pay-Roll Tax, note 2 above, at 601 and 605–6; Federal Commissioner of Taxation v J Walter Thompson (Australia) Pty Ltd, note 17 above, at 231; Attorney-General (NSW) v The Perpetual Trustee Company (Ltd), note 17 above, at 299–300; Humberstone v Northern Timber Mills, note 18 above, at 396–7 and 404 and Performing Right Society, Ltd v Mitchell & Booker (Palais de Danse) Ltd [1924] 1 KB 762 at 767–8.

67.

Narich Pty Ltd v Commissioner of Pay-Roll Tax, note 2 above, at 601.

68.

Stevens v Brodribb, note 15 above, CLR at 24; ALR at 517; Australian Mutual Provident Society v Chaplin, note 10 above, at 387; Albrighton v Royal Prince Alfred Hospital [1980] 2 NSWLR

542 at 557; Venables v Hornby [2003] 1 WLR 3022; [2004] 1 All ER 627 at [23] and FCT v Barrett, note 1 above, CLR at 401; ALR at 68. 69.

See, for example, Albrighton v Royal Prince Alfred Hospital, note 66 above, at 557.

70.

Australian Timber Workers Union v Monaro Sawmills Pty Ltd, note 23 above, at 328 and Queensland Stations Pty Ltd v Federal Commissioner of Taxation, note 15 above, at 549 and 552.

71.

Pitcher v Langford (1991) 23 NSWLR 142 at 150; Connelly v Wells, note 30 above, at 81–4; Hollis v Vabu, note 5 above, at [43]–[45] and Stevens v Brodribb, note 15 above, CLR at 29; ALR at 520–1. On the historical importance of control, see 1.27 and 1.38.

72.

Stevens v Brodribb, note 15 above, CLR at 24 and 36; ALR at 517 and 526–7; Australian Mutual Provident Society v Chaplin, note 10 above, at 387; Articulate Restorations and Development Pty Limited v Crawford, note 20 above, at 379–80 and Narich Pty Ltd v Commissioner of Pay-Roll Tax, note 2 above, at 601.

73.

The terms ‘right’, ‘power’ and ‘ultimate authority’ are treated as synonyms in this field. Articulate Restorations and Development Pty Limited v Crawford, note 20 above, at 379; Humberstone v Northern Timber Mills, note 18 above, at 404 and Stevens v Brodribb, note 15 above, CLR at 24; ALR at 517. On the implied term requiring employees obey some orders, see 7.12.

74.

Narich Pty Ltd v Commissioner of Pay-Roll Tax, note 2 above, at 606; On Call Interpreters, note 5 above, at [261]–[263]; TWU v Glynburn, note 30 above, at 142 (directions in a manual) and West Australian Locomotive Engine Drivers’ Firemen’s and Cleaners’ Union of Workers v Hathaway (1995) 63 IR 79 at 85.

75.

Bridges Financial Services Pty Ltd v Chief Commissioner of State Revenue, note 10 above, at [185]–[189] and Ace Insurance Ltd v Trifunovski, note 1 above, at [78].

76.

Re Porter, note 16 above, at 182; see also Damevski v Giudice, note 33 above, at [70].

77.

TWU v Glynburn, note 30 above, at 142; Forstaff Pty Ltd v Chief Commissioner of State Revenue, note 6 above, at [107]–[114]; Deutz Australia Pty Ltd v Skilled Engineering Ltd (2001) 162 FLR 173; [2001] VSC 194 at [92]–[122]; Denham v Midland Employers Mutual Assurance Ltd [1955] 2 QB 437 at 443 and Pitcher v Langford, note 71 above, at 156.

78.

Zuijs v Wirth Brothers Pty Ltd, note 65 above, at 571; Articulate Restorations and Development Pty Limited v Crawford, note 20 above, at 375–6; Sgobino v The State of South Australia, note 53 above, at 304–5; Stevens v Brodribb, note 15 above, CLR at 24, 29 and 36; ALR at 517, 521 and 526; FCT v Barrett, note 1 above, CLR at 401–2; ALR at 68–9 and Humberstone v Northern Timber Mills, note 18 above, at 404.

79.

Articulate Restorations and Development Pty Limited v Crawford, note 20 above, at 379–80 and Ace Insurance Ltd v Trifunovski, note 1 above, at [65]–[66].

80.

Zuijs v Wirth Brothers, note 65 above, at 571; Articulate Restorations and Development Pty Limited v Crawford, note 20 above, at 379; Sgobino v The State of South Australia, note 53 above, at 305 and FCT v Barrett, note 1 above, CLR at 404 and 405; ALR at 69 and 70.

81.

FCT v Barrett, note 1 above, at 405–6 and Barone v Olympic Industries Pty Ltd, note 36 above, at 441.

82.

Yaraka Holdings Pty Ltd v Giljevic, note 19 above, at [32].

83.

See 2.34.

84.

Neufeld v Secretary of State for Business, Enterprise & Regulatory Reform [2009] 3 All ER 790 at [53]–[54], and [80]–[86]; see further at 2.21.

85.

Lee v Lee’s Air Farming Ltd [1961] AC 12 at 26; [1960] 3 All ER 420 at 426; Neufeld v Secretary of State for Business, & Regulatory Reform, note 84 above, at [33] and [80]–[86]; Clark v Clark Construction Initiatives Ltd [2008] ICR 635 at [98]; see also Venables v Hornby, note 68 above, at [23] and Connolly v Sellars Arenascene Ltd [2001] ICR 760 at [18].

86.

TWU v Glynburn, note 30 above, at 142; Narich Pty Ltd v Commissioner of Pay-Roll Tax, note 2 above, at 606; Zuijs v Wirth Brothers Pty Ltd, note 65 above, at 571; Stevens v Brodribb, note 15 above, CLR at 36; ALR at 526; JA & BM Bowden & Sons Pty Ltd v Chief Commissioner of State Revenue (NSW), note 22 above, at [76]– [81]; Cassidy v Ministry of Health [1951] 2 KB 343 at 360; On Call Interpreters, note 5 above, at [264] and Ace Insurance Ltd v Trifunovski, note 1 above, at [64]–[68].

87.

Zuijs v Wirth Brothers Pty Ltd, note 65 above, at 571: see 2.17.

88.

Hollis v Vabu, note 5 above, at [49]; Price v Grant Industries Pty Ltd, note 18 above, CLR at 401; ALR at 68; Articulate Restorations and Development Pty Limited v Crawford, note 20 above, at 379; FCT v Barrett, note 1 above, at 70–1; Zuijs v Wirth Brothers, note 65 above, at 571 and Federal Commissioner of Taxation v J Walter Thompson (Australia) Pty Ltd, note 17 above.

89.

Articulate Restorations and Development Pty Limited v Crawford, note 20 above, at 380 and Tsang v Department of the Chief Minister, note 30 above, at 326.

90.

BWIU v Odco, note 11 above, FCR at 124–5; ALR at 754 and Australian Timber Workers Union v Monaro Sawmills Pty Ltd, note 23 above.

91.

Stevens v Brodribb, note 15 above, CLR at 36; ALR at 526 and BWIU v Odco, note 11 above, FCR at 124–5; ALR at 754.

92.

Australian Bureau of Statistics, Locations of Work, Series 6275.0, November 2008 at 4.

93.

Australian Timber Workers Union v Monaro Sawmills Pty Ltd, note 23 above, at 328 and Connelly v Wells, note 30 above, at 86.

94.

Articulate Restorations and Development Pty Limited v Crawford, note 20 above, at 379 and Hollis v Vabu, note 5 above, at [49] and [57].

95.

Roy Morgan, note 11 above, at [36]–[37]; Narich Pty Ltd v Commissioner of Pay-Roll Tax, note 20 above, at 605–6; FCT v Barrett, note 1 above, CLR at 407; ALR at 72; Barone v Olympic Industries Pty Ltd, note 36 above, at 443 and Ace Insurance Ltd v Trifunovski, note 1 above, at [69].

96.

Australasian Performing Rights Association Ltd v Miles (1962) 79 WN (NSW) 385 at 387 and Hollis v Vabu, note 5 above, at [49] and [57]. As to the contractual limits on that power, see 6.9 and 6.14.

97.

Wright v Attorney-General for the State of Tasmania (1954) 94 CLR 409 at 417–18 and Brodribb Saw Milling Co v Gray [1984] VR 321 at 343–4.

98.

Australian Air Express Pty Ltd v Langford, note 9 above, at [57]–[64]; Australian Mutual Provident Society v Chaplin, note 10 above, at 391; Bridges Financial Services Pty Ltd v Chief Commissioner of State Revenue, note 10 above, at [192] and [206]; Stevens v Brodribb, note 15 above, at 26 per Mason J (‘an important factor’) and CLR at 38–9; ALR at 519 and 528; Allen v Clarence Senior Citizens Centre (1996) 65 IR 164 at 169–-71; Queensland Stations Pty Ltd v The Federal Commissioner of Taxation, note 18 above, at 548 and 550; R v Foster; Ex parte The

Commonwealth Life (Amalgamated) Assurances Ltd, note 1 above, at 151; Express & Echo Publications Ltd v Tanton [1999] ICR 693 at 697 and 699; Neale v Atlas Products (Vic) Pty Ltd (1955) 94 CLR 419 at 428 and Blake v Sitefate Pty Limited, note 35 above, at 468–9. 99.

Vacik Distributors Pty Ltd v Kelly (1995) 12 NSWCCR 30; Jennings Industries Ltd v Negri (1982) 44 ACTR 9 at 15; Barone v Olympic Industries Pty Ltd, note 36 above, at 442 and MacFarlane v Glasgow CC [2001] IRLR 7.

100. Vacik Distributors Pty Ltd v Kelly, note 99 above; Jennings Industries Ltd v Negri, note 99 above, at 15 (occasional engagement of young son, nephew and others aberrations); Barone v Olympic Industries Pty Ltd, note 36 above, at 442; Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance, note 16 above, at 439–40 and James v Redcats (Brands) Ltd [2007] IRLR 296 at [27]–[28]. 101. Whitehead v Workcover/Employers Mutual Fund Ltd, note 29 above, at [14]–[15]. 102. See 2.25. 103. Autoclenz Ltd v Belcher, note 16 above, at [27]–[35]; Protectacoat Firthglow Ltd v Szilagyi [2009] ICR 835 at [52]–[57] and Consistent Group Ltd v Kalwak [2007] IRLR 560 at [57]–[59]; A Davies, ‘Sensible thinking about sham transactions’ (2009) 38 ILJ 318. See further at 2.21 and 2.27–2.28. 104. Stevens v Brodribb, note 15 above, CLR at 36; ALR at 526 and FCT v Barrett, note 1 above, CLR at 406–7; ALR at 72. 105. Yaraka Holdings Pty Ltd v Giljevic, note 19 above, at [34]; Wesfarmers Federation Insurance Ltd v Wells, note 19 above, at [51]; Sgobino v The State of South Australia, note 53 above, at 308; On Call Interpreters, note 5 above, at [285]–[286]. 106. Re Porter, note 16 above, at 186, 191 and 193; Pratt v Australian Broadcasting Corporation (1985) 26 IR 1 at 6. 107. Australian Mutual Provident Society v Chaplin, note 10 above, at 391; Boylan Nominees Pty Ltd v Sweeney, note 21 above, at [55] (aff’d Sweeney v Boylan Nominees, note 10 above); Price v Grant Industries Pty Ltd, note 18 above, at 405; JA & BM Bowden & Sons Pty Ltd v Chief Commissioner of State Revenue (NSW), note 22 above, at [88]–[93] and Commissioner of PayRoll Tax v Mary Kay Cosmetics Pty Ltd, note 20 above, at 879–81. 108. Re Porter, note 16 above, at 186; Sgobino v The State of South Australia, note 53 above, at 307; see also Roy Morgan, note 11 above, at [48]–[49] and Hollis v Vabu, note 5 above, at [49] (prohibition on refusal of work suggested relationship of employment). 109. Stevens v Brodribb, note 15 above, CLR at 24; ALR at 517; BWIU v Odco, note 11 above, FCR at 126; ALR at 755; Forstaff Pty Ltd v Chief Commissioner of State Revenue, note 6 above, at [118]; Connelly v Wells, note 30 above, at 85 and 87–8; Pratt v Australian Broadcasting Corporation, note 106 above, at 5–6; Price v Grant Industries Pty Ltd, note 18 above, at 405 and Sweeney v Boylan Nominees, note 10 above, at [31]. 110. On Call Interpreters, note 5 above, at [219]. 111. Barone v Olympic Industries Pty Ltd, note 36 above, at 441; FCT v Barrett, note 1 above, CLR at 406–7; ALR at 72; see also Australian Timber Workers Union v Monaro Sawmills Pty Ltd, note 23 above, at 328. 112. Wason v ACT Waterproofing and Maintenance Pty Limited (1991) 40 IR 279. 113. Sgobino v The State of South Australia, note 53 above, at 308 and Yaraka Holdings Pty Ltd v Giljevic, note 19 above, at [50].

114. Barro Group Pty Ltd v Fraser, note 18 above, at 580; Climaze Holdings Pty Limited v Dyson, note 42 above, at 267–8; Jennings Industries Ltd v Negri, note 99 above, at 16–17; Stevens v Brodribb, note 15 above, CLR at 24 and 37; ALR at 517 and 526; BWIU v Odco, note 11 above, FCR at 126; ALR at 755; Price v Grant Industries Pty Ltd, note 18 above, at 401–2 and Pratt v Australian Broadcasting Corporation, note 106 above, at 6. 115. Connelly v Wells, note 30 above, at 86–7; Australian Timber Workers Union v Monaro Sawmills Pty Ltd, note 23 above, at 328–9; Barone v Olympic Industries Pty Ltd, note 36 above, at 441 and Jennings Industries Ltd v Negri, note 99 above, at 16–17. On the effect of the personal services income tax scheme on deductions from the wages of non-employees, see A Stewart, note 16 above, at 260–2. 116. Re Porter, note 16 above, at 185; Bearings Inc (Australia) Pty Ltd v Treloar (1999) 95 IR 169 at [136]; Wesfarmers Federation Insurance Ltd v Wells, note 19 above, at [40] and [45]; Scerri v Cahill (1995) 14 NSWCCR 389 at 404–5; Sammartino v Mayne Nickless (2000) 98 IR 168 at [104]–[105]; cf Australian Air Express Pty Ltd v Langford, note 9 above, at [54] where the appellant was a Commonwealth authority. 117. Roy Morgan, note 11 above, at [52]–[61]; Ace Insurance Ltd v Trifunovski, note 1 above, at [120]; see also Lee Ting Sang v Chung Chi-Keung, note 19 above, at 382. 118. Cam and Sons Pty Ltd v Sargent (1940) 14 ALJ 162 at 163 and Protectacoat Firthglow Ltd v Szilagyi, note 103 above. 119. Autoclenz Ltd v Belcher, note 16 above, and Consistent Group Ltd v Kalwak, note 103 above. 120. Venables v Hornby, note 68 above, at [23]; Secretary of State for Trade and Industry v Bottrill [2000] 1 All ER 915 at 926–7; [1999] ICR 592 and Connolly v Sellars Arenascene Ltd, note 85 above. 121. See 5.85; see also ACE Insurance Ltd v Trifunovski, note 1 above, at [134]–[146] (court rejected the claim that an express term categorising the relationship gave rise to an estoppel). 122. R v Allan; Ex parte AMP Society (1977) 16 SASR 237 at 247, endorsed by a Full Court of the Federal Court in Rowe v Capital Territory Health Commission (1982) 2 IR 27 at 28; see also On Call Interpreters, note 5 above, at [200]; A Stewart, note 16 above, at 268 and compare with Ace Insurance Ltd v Trifunovski, note 1 above, at [25]–[28]. In the context of attempts to avoid the statutory protections in various other settings, see Street v Mountford [1985] AC 809; [1985] 2 All ER 289 at 299; AG Securities v Vaughan [1990] 1 AC 417; [1988] 3 All ER 1058 at 1067–8; S Bright, ‘Beyond Sham and into Pretence’ (1991) 11 OJLS 136 at 140–1; W Gummow, ‘Form or Substance?’ (2008) 30 ABR 229. 123. See International Labour Conference, The Employment Relationship, Report V (1) to the International Labour Conference 95th Session 2006, at [26] and [96]–[102]; A Supiot, Beyond Employment: Changes in Work and the Future of Labour Law in Europe, Oxford University Press, Oxford, 2001, p 219 and On Call Interpreters, note 5 above, at [194]–[197]. 124. Consistent Group Ltd v Kalwak, note 103 above, at [57], referred to approvingly in Autoclenz Ltd v Belcher, note 16 above. 125. What is meant by reckless in a civil law context is unclear; see also CFMEU v Nubrick Pty Ltd (2009) 190 IR 175 at [13]–[21]. 126. See also House of Representatives Standing Committee on Employment, Workplace Relations and Workforce Participation, Making It Work: Inquiry into Independent Contracting and Labour Hire Arrangements, Commonwealth, Canberra, 2005, [5.126]–[5.148] and ACE Insurance Ltd v Trifunovski, note 1 above, at [126]–[131] (court rejected the claim that an express term

categorising the relationship was a representation that was misleading or deceptive). 127. Hollis v Vabu, note 5 above, at [58]; Cam and Sons Pty Ltd v Sargent, note 118 above; BWIU v Odco, note 11 above, FCR at 126–7; ALR at 755–6; Narich Pty Ltd v Commissioner of Pay-Roll Tax, note 2 above; Australian Mutual Provident Society v Allen (1978) 18 ALR 385 at 389–90; TWU v Glynburn, note 30 above, at 143–4; Jennings Industries Ltd v Negri, note 99 above, at 16; Re Porter (1989) 34 IR 179 at 184 where Gray J, after stating that it would not be bound by the label ascribed by the parties to their relationship, said in an oft-quoted passage: ‘the parties cannot create something which has every feature of a rooster, but call it a duck and insist that everybody else recognise it as a duck’. 128. Australian Air Express Pty Ltd v Langford, note 9 above, at [71]; Australian Mutual Provident Society v Chaplin, note 10 above, at 389–90; Construction Industry Training Board v Labour Force Ltd [1970] 3 All ER 220 at 224–5; BWIU v Odco, note 11 above, FCR at 126–7; ALR at 755–6; Neale v Atlas Products (Vic) Pty Ltd, note 98 above, at 428; Tobiassen v Reilly (2009) 178 IR 213; [2009] WASCA 26 at [103]; Forstaff Pty Ltd v Chief Commissioner of State Revenue, note 6 above, at [120]; Stevens v Brodribb, note 15 above, CLR at 37; ALR at 526 and Price v Grant Industries Pty Ltd, note 18 above, at 393. 129. Roy Morgan, note 11 above, at [38]–[39] (non-contractual statement that relationship was not one of employment); see also 16.16 concerning the view of parties as to the reasonableness of a restraint of trade. 130. See 3.5 and, particularly, Damevski v Giudice, note 33 above, at [3], [89]–[100]; Whitehead v Workcover/Employers Mutual Fund Ltd, note 29 above, at [12]. 131. Connelly v Wells, note 30 above, at 74 per Gleeson CJ and Centrestage Management Pty Ltd v Riedle (2008) 170 FCR 298; 77 IPR 550 at [23]–[26]. 132. Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471; 211 ALR 101 at [46] and Golden Plains Fodder Australia Pty Ltd v Millard (2007) 99 SASR 461; [2007] SASC 391 at [24]–[31]. 133. Sharrment Pty Ltd v Official Trustee in Bankruptcy (1988) 82 ALR 530 at 537; 18 FCR 449 at 454 per Lockhart J referred to approvingly in Raftland Pty Ltd v Commissioner of Taxation (2008) 238 CLR 516; 246 ALR 406 at [35] and [112]; see also Scott v Federal Commissioner of Taxation (1966) 40 ALJR 265 at 279. 134. Raftland, note 133 above, at [33], [35], [112] and [148]; Snook v London and West Riding Investments Ltd [1967] 2 QB 786 at 802; Hadjiloucas v Crean [1987] 3 All ER 1008 at 1019; 1 WLR 1006 at 1019; A Davies, note 104 above, at 318; see also Richtsteiger v Century Geophysical Corporation (No 3) (1996) 70 IR 236 at 238–9; Blake v Sitefate Pty Limited, note 35 above, at 469–70 and Fair Work Ombudsman v Ramsey Food Processing Pty Ltd [2011] FCA 1176 at [111]–[116]. 135. Raftland, note 133 above, at [58]. 136. Cam and Sons Pty Ltd v Sargent, note 118 above, and Scott v Federal Commissioner of Taxation, note 133 above, at 279. 137. Hadjiloucas v Crean [1987] 3 All ER 1008 at 1019; [1988] 1 WLR 1006 at 1019; Raftland, note 133 above, at [33]; Hollis v Vabu, note 5 above, at [58]; Damevski v Giudice, note 33 above, at [144]; Re Porter, note 16 above, at 184; Ace Insurance Ltd v Trifunovski, note 1 above, at [114]; see also Curtis v Perth and Fremantle Bottle Exchange Co Ltd (1914) 18 CLR 17 at 25–6 (contract for hire or sale). 138. ACT Visiting Medical Officers Association v Australian Industrial Relations Commission, note

21 above, at [32] per Wilcox, Conti and Stone JJ; Australian Mutual Provident Society v Chaplin, note 10 above, at 389–90; Cam and Sons Pty Ltd v Sargent, note 118 above, and Personnel Contracting Pty Ltd v Construction, Forestry, Mining and Energy Union of Workers (2004) 141 IR 31; [2004] WASCA 312 at [40]. 139. R v Foster; Ex parte The Commonwealth Life (Amalgamated) Assurances Ltd, note 1 above, at 151 and 155; ACT Visiting Medical Officers Association v Australian Industrial Relations Commission (2006) 232 ALR 69; (2006) 153 IR 228 at [25] and [31]; Hollis v Vabu, note 5 above, at [47] and [57]; Dalgety Farmers Ltd v Bruce (1995) 12 NSWCCR 36 at 47. 140. Autoclenz Ltd v Belcher, note 16 above, at [23], [28] and Narich Pty Ltd v Commissioner of PayRoll Tax, note 2 above, at 601 and 606. 141. Cam and Sons Pty Ltd v Sargent, note 118 above, at 163; Damevski v Giudice, note 33 above, at [172]; Consistent Group Ltd v Kalwak, note 103 above, at [57]–[59] per Elias J, approved in Autoclenz Ltd v Belcher, note 16 above, at [25] and [29] and Tobiassen v Reilly, note 128 above, at [100]. 142. Narich Pty Ltd v Commissioner of Pay-Roll Tax, note 2 above, at 606; Australian Mutual Provident Society v Chaplin, note 10 above, at 390; Abdalla v Viewdaze Pty Ltd, note 19 above, at [34] (3); Staff Aid Services v Bianchi (2004) 133 IR 29 at [29]; TWU v Glynburn, note 30 above, at 143–4; see also Protective Security Pty Ltd v Bedelph, note 23 above, at [35] and [38]. 143. Autoclenz Ltd v Belcher, note 16 above, at [29], and [32] and Autoclenz Ltd v Belcher [2010] IRLR 70 at [92]–[94]. 144. Consistent Group Ltd v Kalwak, note 103 above, at [57]–[59] per Elias J, approved in Autoclenz Ltd v Belcher, note 16 above, at [25]–[35] and Protectacoat Firthglow Ltd v Szilagyi, note 103 above, at [52]–[57]; A Davies, note 104 above. 145. Protectacoat Firthglow Ltd v Szilagyi, note 103 above, at [55]; Express & Echo Publications Ltd v Tanton, note 98 above, at 697, both referred to approvingly in Autoclenz Ltd v Belcher, note 16 above, at [19] and [32]. 146. Autoclenz Ltd v Belcher [2010] IRLR 70 at [52]–[54] approved in Autoclenz Ltd v Belcher, note 16 above, at [29]–[31] and Pitcher v Langford, note 69 above, at 155 and 161–2. 147. Raftland, note 133 above, at [36] and [47]; cf Kirby J’s criticism at [138]. See generally S Bright, ‘Beyond Sham and into Pretence’ (1991) 11 OJLS 136 at 140–1; A Davies, note 104 above. 148. Australian Mutual Provident Society v Chaplin, note 10 above, at 390 and Narich Pty Ltd v Commissioner of Pay-Roll Tax (NSW), note 2 above, at 601. 149. Street v Mountford [1985] AC 809; [1985] 2 All ER 289; AG Securities v Vaughan, note 122 above, at 1067–8 and Clark v Clark Construction Initiatives Ltd, note 85 above, at [92]. 150. See 4.20. 151. Autoclenz Ltd v Belcher, note 16 above, at [21]. 152. See 5.9–5.25 where there is an extended discussion of the rule and other aspects of the rule not relevant here. 153. See, for example, Narich Pty Ltd v Commissioner of Pay-Roll Tax, note 2 above, at 601, Connelly v Wells, note 30 above, at 74. 154. See 5.12. 155. Connelly v Wells, note 30 above, at 74–5 and 85.

156. Hollis v Vabu, note 5 above, at [24], quoting Stevens v Brodribb, note 15 above, CLR at 29; ALR at 521 where there was no written contract: see also Neufeld v Secretary of State for Business, Enterprise & Regulatory Reform, note 84 above, at [85]. 157. There is some authority for the view that the totality of the relationship is always relevant: Damevski v Giudice, note 33 above, at [77] and [78]; Rowe v Capital Territory Health Commission, note 122 above, at 28 and Carmichael v National Power Plc [1999] 1 WLR 2042 at 2049; 4 All ER 897 at 903. 158. Australian Timber Workers Union v Monaro Sawmills Pty Ltd, note 23 above, at 326–7; Connelly v Wells, note 30 above, at 74 and 75. 159. See 5.16–5.25. 160. Carmichael v National Power Plc, note 157 above, at 903. 161. Raftland, note 133 above, at [33] and [141]. 162. Raftland, note 133 above, at [147]; Sharrment Pty Ltd v Official Trustee in Bankruptcy, note 133 above; Hitch v Stone [2001] STC 214 at [65]; AG Securities v Vaughan, note 122 above, at 1072 and 1077; Properties Ltd v Dunsford [2001] 1 WLR 1369 at [44] and Neufeld v Secretary of State for Business, Enterprise & Regulatory Reform, note 84 above, at [37] and [81]–[83]. 163. Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603 at [305]–[315]; Golden Plains Fodder Australia Pty Ltd v Millard, note 132 above, at [29]–[31]; see further 5.17. 164. Autoclenz Ltd v Belcher [2010] IRLR 70 at [32], approved in Autoclenz Ltd v Belcher, note 16 above, at [32]. 165. See 3.5–3.7 and 3.46; ACT Visiting Medical Officers Association v Australian Industrial Relations Commission, note 21 above, at [24]–[25]. 166. Autoclenz Ltd v Belcher [2010] IRLR 70 at [92] per Aikens LJ approved in Autoclenz Ltd v Belcher, note 16 above, at [34]–[35]; On Call Interpreters, note 5 above, at [199]; A Davies, note 104 above, at 318. 167. Australian Mutual Provident Society v Chaplin, note 10 above, at 392–3; Narich Pty Ltd v Commissioner of Pay-Roll Tax (NSW), note 2 above, at 601; Cavill Power Products Pty Ltd v Royle (1991) 42 IR 229 at 231 and Neufeld v Secretary of State for Business, Enterprise & Regulatory Reform, note 84 above, at [83]. 168. R v Foster; Ex parte The Commonwealth Life (Amalgamated) Assurances Ltd, note 1 above, at 151; Autoclenz Ltd v Belcher [2010] IRLR 70 at [52] and Shirreff v Elazac Pty Ltd [2010] VSC 381 at [152], [153], [158]–[163]. 169. See 1.11. 170. See the approach in Articulate Restorations and Development Pty Limited v Crawford, note 20 above, at 381–2. 171. Harris v S (1976) 2 ACLR 51 at 54. 172. See generally Corporate Affairs Commission (Vic) v Drysdale (1978) 141 CLR 236; 22 ALR 161 at 164–5, and 169–74; Deputy Commissioner of Taxation v Austin (1998) 28 ACSR 565 at 569– 70. 173. Southern Foundries (1926) Ltd v Shirlaw [1940] AC 701 at 711–12 and 721; 2 All ER 445 at 451; Lincoln Mills (Aust) Ltd v Gough [1964] VR 193 at 198 and Tarjan Construction Co Pty Ltd [1964] NSWR 1054 at 1058.

174. Lee v Lee’s Air Farming Ltd [1961] AC 12 at 25; [1960] 3 All ER 420 at 425–6; Hamilton v Whitehead (1988) 166 CLR 121 at 128; 82 ALR 626 at 630; Andar Transport Pty Ltd v Brambles Ltd (2004) 217 CLR 424; 206 ALR 387 at [45]–[52] and Morley v CT Morley Ltd [1985] ICR 499. 175. Re Lo-Line Electric Motors Ltd [1988] Ch 477; 2 All ER 692 at 699; Re Lee, Behrens and Co Ltd [1932] 2 Ch 47 at 53; Normandy v Ind Coope and Co Ltd [1908] 1 Ch 84 at 104; Antocks Lairn Limited v I Bloohn Limited [1972] RPC 219 at 221–2; Re Newspaper Pty Syndicate Ltd [1900] 2 Ch 349 at 350–1. 176. Neufeld v Secretary of State for Business, Enterprise & Regulatory Reform, note 84 above, at [33], [49]–[51], [80]–[86]; Clark v Clark Construction Initiatives Ltd, note 85 above, at [98]; see also Secretary of State for Trade and Industry v Bottrill, note 120 above; Connolly v Sellars Arenascene Ltd, note 85 above; Parsons v Albert J Parsons & Sons Ltd [1979] ICR 271 and Eaton v Robert Eaton Ltd [1988] ICR 302. 177. Neufeld v Secretary of State for Business, Enterprise & Regulatory Reform, note 84 above, at [49]–[51]. 178. R v Stuart [1894] 1 QB 310; McMillan v Guest [1942] 2 AC 561 (officer under tax laws); Ridge v Baldwin [1964] AC 40 (officers entitled to procedural fairness before dismissal); ‘officer’ is variously defined in s 9 of the Fair Work Act and s 9 of the Corporations Act; see E Campbell, ‘Termination of Appointments to Public Offices’ (1996) 24 F L Rev 1 at 6–8. 179. Commissioner for Corporate Affairs v Bracht [1989] VR 821 at 831; ASIC v Adler (2002) 41 ACSR 72; [2002] NSWSC 171 at [55]–[75] (and on appeal at (2003) 46 ACSR 504; [2003] NSWCA 131 at [25]); ASIC v Macdonald (No 11) (2009) 256 ALR 199 at [386]–[392] and Morley v ASIC (2010) 274 ALR 205 at [885]–[898]. 180. Oceanic Crest Shipping Co v Pilbara Harbour Services Pty Ltd (1986) 66 ALR 29; 160 CLR 626 at 637–9, 662 and 681; Fowles v Eastern and Australian Steamship Co Ltd [1916] 2 AC 556 at 562–3; Little v The Commonwealth (1947) 75 CLR 94 at 114; Field v Nott (1939) 62 CLR 660 at 675 (‘discretion and responsibility which rests upon him in virtue of his office or of some designation under the law’); Musgrave v The Commonwealth (1937) 57 CLR 514 at 548 (the exercise of an ‘independent responsibility cast on him by law’) and Enever v R (1906) 3 CLR 969 at 976–7. 181. McMillan v Guest, note 178 above, at 564; Edwards v Clinch [1982] AC 845 at 861. 182. Oceanic Crest Shipping Co v Pilbara Harbour Services Pty Ltd, note 180 above; Fowles v Eastern and Australian Steamship Co Ltd, note 180 above, at 562 and Palais Parking Station Pty Ltd v Shea (1977) 16 SASR 350 at 359. 183. Oceanic Crest Shipping Co v Pilbara Harbour Services Pty Ltd, note 180 above, at 637–9, 662 and 682–3; Fowles v Eastern and Australian Steamship Co Ltd, note 180 above, at 562–3; Attorney-General (NSW) v Perpetual Trustee Co Ltd (1952) 85 CLR 237 at 248–9 and 283–4. The position may be different if the office is created by contract between the parties, rather than by statute or the common law. 184. G McCarry, Aspects of Public Sector Employment Law, Law Book Company, Sydney, 1998, p 18. 185. West Australian Locomotive Engine Drivers’ Firemen’s and Cleaners’ Union of Workers v Hathaway, note 74 above, at 85; see also Shearing Contractors Association of Australia v Kirby (1983) 6 IR 283. 186. Bailey v NSW Medical Defence Union Ltd (1995) 184 CLR 399; 132 ALR 1 at 29.

187. Bailey, note 186 above, at 28–9. 188. Bailey, note 186 above, at 7 and 29. 189. Bailey, note 186 above, at 7–8, and 27–8; Baily v British Equitable Assurance Co [1904] 1 Ch 374 at 384–5 (rev’d on other grounds [1906] AC 35). 190. Link Agricultural Pty Ltd v Shanahan [1999] 1 VR 466 and Dick v Comvergent Communications (2000) 34 ACSR 86. 191. New South Wales Cancer Council v Sarfaty (1992) 28 NSWLR 68 at 88–9; Southern Foundries (1926) Ltd v Shirlaw, note 173 above; Carrier Australasia Ltd v Hunt (1939) 61 CLR 534; Shindler v Northern Raincoat Co Ltd [1960] 1 WLR 1038 at 1044–6; [1960] 2 All ER 239 at 245–8; see also Glass v The Pioneer Rubber Works of Aust Ltd [1906] VLR 754 at 773. 192. See generally Fox v GIO Australia Ltd (2002) 56 NSWLR 512 at 519; 120 IR 401; Silver v Dome Resources NL (2007) 62 ACSR 539; [2007] NSWSC 455 at [86]–[87] (aff’d (2008) 72 NSWLR 693; [2008] NSWCA 322); G Stapledon, ‘Termination Benefits for Executives of Australian Companies’ (2005) 27 Syd L Rev 683 and C Fenwick and K Sheehan, ‘Share Based Remuneration and Termination Payments to Company Directors: What are the Rules?’ (2008) 26 C & SLJ 71. 193. Read v Astoria Garage (Streatham) Ltd [1952] Ch 637; 2 All ER 292. 194. Re New British Iron Co; Ex parte Beckwith [1898] 1 Ch 324 at 326; Foster v Foster [1916] 1 Ch 532 at 545–6 (employee entitled to no remuneration qua employee and company entitled to vary his remuneration qua director). 195. Nelson v Nelson (James) & Sons Ltd [1914] 2 KB 770. 196. Bailey, note 186 above, at 7; Carrier Australasia Ltd v Hunt, note 101 above. 197. See 3.5–3.7. 198. Bailey, note 186 above, at 7; Financial Industry Complaints Service Ltd v Deakin Financial Services Pty Ltd (2006) 238 ALR 616 at [9]. 199. See 5.34–5.45 on terms incorporated by reference. 200. Bailey, note 186 above, at 7. 201. Bailey, note 186 above, at 7; Allen v Gold Reefs of West Africa Ltd [1900] 1 Ch 656 at 673–4 and 679. 202. Carrier Australasia Ltd v Hunt, note 191 above, at 553; see also per Evatt J at 548–9; Nelson v Nelson (James) & Sons Ltd, note 195 above, at 781. 203. Southern Foundries (1926) Ltd v Shirlaw, note 173 above. 204. Percy v Board of National Mission of the Church of Scotland [2006] 2 AC 28; 4 All ER 1354 at [14]–[22], [87], [148]; Fowles v Eastern and Australian Steamship Co Ltd, note 180 above, at 562. 205. G McCarry, Aspects of Public Sector Employment Law, note 184 above, p 20. 206. Part 2 of the Public Sector Employment and Management Act 2002 (NSW) (PSEM Act) distinguishes between Department Heads, officers, temporary and casual employees; under the Public Sector Management Act 1994 (WA) persons may be appointed as an executive officer, a permanent public service officer, a fixed-term public service officer: s 64. Compare with the classification in the Commonwealth (statutory office holders and Agency Heads under ss 14 and 65 of the Public Service Act 1999 (Cth) (PS Act)) and Victoria (office holders listed in s 16 of

the Public Administration Act 2004 (Vic) (PA Act)). 207. G McCarry, Aspects of Public Sector Employment Law, note 184 above, pp 11–22. 208. See 2.35. 209. Holly v Director of Public Works (1988) 14 NSWLR 140 at 145 and Josephson v Young (1900) 21 LR (NSW) 188. 210. The agency head is responsible under s 22 of the PS Act 1999 (Cth); the department head is responsible under s 17 of the PSEM Act 2002 (NSW); the Public Service body head is responsible under s 20 of the PA Act 2004 (Vic); the chief executive of an administrative unit is responsible under s 30 of the Public Service Act 2009 (SA). 211. Holly v Director of Public Works, note 209 above, at 147–8. 212. Hobbs v Petersham Transport Co Pty Ltd (1971) 124 CLR 220 at 238 per Windeyer J. 213. Moors v Burke (1919) 26 CLR 265 at 268–9; Bayly v Scarica [1990] VR 731 at 736; Peter Jackson Pty Ltd v Consolidated Insurance of Australia Ltd [1975] VR 480 at 484; see also N Palmer, Palmer on Bailment, 3rd ed, Sweet and Maxwell, London, 2009, pp 458–9; Rowell v Alexander Mackie College of Advanced Education (1988) 7 MVR 157; 25 IR 87. 214. Queensland Stations Pty Ltd v The Federal Commissioner of Taxation, note 18 above, at 551–2. 215. N Palmer, Palmer on Bailment, note 213 above, pp 462ff; Wilton v Commonwealth Trading Bank [1973] 2 NSWLR 644 at 651–2. 216. Gartrell White Limited v Butt [1930] AR (NSW) 174 at 178–9 and 181; Yellow Cabs of Australia Limited v Colgan [1930] AR (NSW) 137 at 161–4 and 169–70; Platt v Treweneck [1953] AR (NSW) 642 at 649–50; Dillon v Gange (1941) 64 CLR 253 at 259, 263 and 265; Northern District Radio Taxicab Co-operative Ltd v Commissioner of Stamp Duties [1975] 1 NSWLR 346 at 347–8; Commissioner of Taxation v De Luxe Red & Yellow Cabs Co-operative (Trading) Society Ltd (1998) 82 FCR 507 at 532–3; note, however, Re Porter, note 16 above, at 200–1. 217. Partnership Act 1963 (ACT) s 6; Partnership Act 1892 (NSW) s 1; Partnership Act 1997 (NT) s 5; Partnership Act 1891 (Qld) s 5; Partnership Act 1891 (SA) s 1; Partnership Act 1891 (Tas) s 6; Partnership Act 1958 (Vic) s 5; Partnership Act 1895 (WA) s 7. 218. Commissioner of State Taxation v Cyril Henschke Pty Ltd (2010) 272 ALR 440 at [10]–[12]. 219. Australian Mutual Provident Society v Chaplin, note 10 above, at 391; Allen v Clarence Senior Citizens Centre, note 98 above, at 169–70; Barro Group Pty Ltd v Fraser, note 18 above, at 580– 1; Climaze Holdings Pty Limited v Dyson, note 42 above, at 268 and Advance Resource Services Pty Ltd v Charlton (2007) 165 IR 275 at [61]–[65], [105], [158]. 220. Yaraka Holdings Pty Ltd v Giljevic, note 19 above, at [47] and [59] (engagement initially with partnership that dissolved); Jennings Industries Ltd v Negri, note 99 above, at 17; Zurich Australian Insurance Ltd v AMEC Services Pty Ltd [1998] WASCA 68; Re Porter, note 16 above, at 192–3; see also Victorian Workcover Authority v Game, note 13 above, at [58]–[61]. 221. Cam and Sons Pty Ltd v Sargent, note 118 above, at 163; Hackney v Kefford, note 39 above, at 237–8; Fisk v Pollard [1928] AR (NSW) 39 at 44; Lopes v Marino [1939] AR (NSW) 188 at 190–1 and Stubbs v Lakos (1994) 56 IR 110. 222. United Dominions Corp Ltd v Brian Pty Ltd (1985) 60 ALR 741; 157 CLR 1 at 15–16; Partnership Act 1963 (ACT) s 7(3); Partnership Act 1892 (NSW) s 2(2); Partnership Act 1997 (NT) s 6(1)(b); Partnership Act 1891 (Qld) s 6(1)(b); Partnership Act 1891 (SA) s 2(1)(b); Partnership Act 1891 (Tas) s 7(b); Partnership Act 1958 (Vic) s 6(2); Partnership Act 1895 (WA)

s 8(2). 223. Shand v Ball [1936] AR (NSW) 77 at 81; Hackney v Kefford, note 39 above, at 237–8; Neader v Lake Marimley Pastoral Company (1992) 43 IR 105; Elkin and Co Pty Ltd v Specialised Television Installations Pty Ltd [1961] SR (NSW) 165 at 168–9; Fisk v Pollard [1928] AR (NSW) 39 at 44 and Lopes v Marino, note 221 above, at 190–1. 224. Partnership Act 1963 (ACT) s 7(4)(b); Partnership Act 1891 (Qld) s 6(3)(b); Partnership Act 1891 (SA) s 2(III)(b); Partnership Act 1891 (Tas) s 7(c)(ii); Partnership Act 1958 (Vic) s 8(3)(b) and Partnership Act 1895 (WA) s 8(3)(b). 225. Connelly v Wells, note 30 above, at 76–7. 226. HA Warner Pty Ltd v Williams (1945) 73 CLR 421 at 425, 426–7, 429, 432 and 434. 227. HA Warner Pty Ltd v Williams, note 226 above, at 427 and Rowlands v Producers and Citizens Co-operative Assurance Co Ltd (1950) 51 SR (NSW) 164. 228. HA Warner Pty Ltd v Williams, note 226 above, at 427; as to whether the tenancy is terminable on the termination of the employment contract, at 430; Barossa Co-operative Winery Ltd v Kolarovich (1977) 16 SASR 392 and Rowlands v Producers and Citizens Co-operative Assurance Co Ltd, note 227 above. 229. FCT v Barrett, note 1 above; Australian Mutual Provident Society v Allen, note 127 above; R v Foster; Ex parte The Commonwealth Life (Amalgamated) Assurances Ltd, note 1 above, at 151; on the principles governing agency, see 3.70–3.85. 230. See generally A Stewart, note 16 above, at 252–7; M Crawley, ‘Labour Hire and the Employment Relationship’ (2000) 13 AJLL 291; C Fenwick, ‘Shooting for Trouble? Contract Labour-hire in the Victorian Building Industry’ (1992) 5 AJLL 237 at 248–54. 231. See 3.82. 232. Dalgety Farmers Ltd v Bruce, note 139 above, at 48; Romero v Auty (2001) 19 ACLC 206; [2000] VSC 462 at [9]; Australian Insurance Employees Union v WP Insurance Services Pty Ltd (1982) 42 ALR 598 at 606; 1 IR 212 at 216–1; Textile Footwear and Clothing Union of Australia v Bellechic Pty Ltd [1998] FCA 1465 and Fair Work Ombudsman v Ramsey Food Processing Pty Ltd, note 134 above, at [94]. 233. See 2.21–2.28; Pitcher v Langford, note 69 above, at 149, 154 and 162–3; Dalgety Farmers Ltd v Bruce, note 139 above, at 48; Golden Plains Fodder Australia Pty Ltd v Millard, note 132 above, at [35] and Fair Work Ombudsman v Ramsey Food Processing Pty Ltd, note 134 above, at [78]. 234. Fair Work Act s 356 and Fair Work Regulations 2009 (Cth) reg 3.32. 235. Andonovski v Park-Tec Engineering Pty Ltd (2009) 191 IR 250 at [62]. 236. Shaw v Bindaree Beef Pty Ltd [2007] NSWCA 125 at [61]; Finance Sector Union of Australia v Commonwealth Bank of Australia (2001) 111 IR 241; [2001] FCA 1613 at [63] (rev’d on other grounds (2002) 125 FCR 9; 190 ALR 497). 237. See 3.6–3.7; Andonovski v Park-Tec Engineering Pty Ltd, note 235 above, at [58]; Damevski v Giudice, note 33 above, at [3] and Shaw v Bindaree Beef Pty Ltd, note 236 above, at [62]. 238. Golden Plains Fodder Australia Pty Ltd v Millard, note 132 above, at [32] and [69]; Pitcher v Langford, note 69 above, at 148 and 155 and Finance Sector Union of Australia v Commonwealth Bank of Australia, note 236 above, at [61]. 239. Re C and T Grinter Transport Services Pty Ltd [2004] FCA 1148 at [20]; Romero v Auty, note 232 above, at [10] and [42]; WorkCover Authority of New South Wales v Billpat Holdings Pty Ltd

(1995) 11 NSWCCR 565 and Golden Plains Fodder Australia Pty Ltd v Millard, note 132 above, at [34]. 240. Romero v Auty, note 232 above, at [42] per Warren J and Gothard v Davey (2010) 80 ACSR 56 at [54]–[60]. 241. Pitcher v Langford, note 69 above, at 148; Australian Insurance Employees Union v WP Insurance Services Pty Ltd, note 232 above, at 606; 1 IR 212 at 216–17; Finance Sector Union of Australia v Commonwealth Bank of Australia, note 236 above, at [61] (rev’d on other grounds (2002) 125 FCR 9; 190 ALR 497). 242. Employment pro hac vice (‘for the time being’) is a device to place liability for some purposes on the shoulders of a person who is exercising control over the employee: see Deutz Australia Pty Ltd v Skilled Engineering Ltd, note 77 above, at [92]–[122]; Finance Sector Union of Australia v Commonwealth Bank of Australia, note 236 above (rev’d on other grounds (2002) 125 FCR 9; 190 ALR 497) and Denham v Midland Employers Mutual Assurance Ltd, note 77 above, at 443. 243. See the cases at note 11; Damevski v Giudice, note 33 above, at [51], [172] and Australian Insurance Employees Union v WP Insurance Services Pty Ltd, note 232 above, ALR at 606; IR at 216–17; see 9.53. 244. Romero v Auty (2000) 19 ACLC 206 at [43] and [44]; McIlwain v Ramsey Food Packaging Pty Ltd (2006) 154 IR 111 at 187–8; McCluskey v Karagiozis (2002) 120 IR 147 at 149 and Textile Footwear and Clothing Union of Australia v Bellechic Pty Ltd, note 232 above. 245. Gothard v Davey, note 240 above, at [60]; Andonovski v Park-Tec Engineering Pty Ltd, note 235 above, at [64]. 246. Minister for Youth and Community Services v Health and Research Employees’ Assn of Australia, NSW Branch (1987) 10 NSWLR 543 at 558; see 3.70. 247. See 3.84–3.85. 248. Mason & Cox Pty Ltd v McCann, note 9 above, at [103]–[105]. 249. Attorney-General (NSW) v The Perpetual Trustee Company (Ltd), note 17 above, at 299–300. 250. TWU v Glynburn, note 30 above, at 142; Forstaff Pty Ltd v Chief Commissioner of State Revenue, note 6 above, at [107]–[114]; Deutz Australia Pty Ltd v Skilled Engineering Ltd, note 77 above, at [92]–[122]; Denham v Midland Employers Mutual Assurance Ltd, note 77 above, at 443 and Mersey Docks and Harbour Board v Coggins & Griffith (Liverpool) Ltd [1947] AC 1. 251. A possibility contemplated in the unusual statutory provision discussed in Oceanic Crest Shipping Co v Pilbara Harbour Services Pty Ltd (1985) 160 CLR 626 at 641, 646 and 668; 66 ALR 29. 252. BWIU v Odco, note 11 above, FCR at 114; ALR at 743; see 3.3 and 3.8. 253. BWIU v Odco, note 11 above, FCR at 114; ALR at 743; Forstaff Pty Ltd v Chief Commissioner of State Revenue, note 6 above, at [99]; see 3.28. 254. See 3.40. 255. BWIU v Odco, note 11 above; Construction Industry Training Board v Labour Force Ltd, note 128 above; Mason & Cox Pty Ltd v McCann, note 9 above, at [32] and Swift Placements Pty Ltd v WorkCover Authority (NSW), note 23 above, at [31] and [37]. 256. Damevski v Giudice, note 33 above, at [63]–[64]. 257. Accident Compensation Commission v Odco Pty Ltd (1990) 34 IR 297; 95 ALR 641 at 646;

Mason & Cox Pty Ltd v McCann, note 9 above, at [25]. 258. Mason & Cox Pty Ltd v McCann, note 9 above, at [25]; McNiece Bros Pty Ltd v National Employers Mutual General Insurance Association Ltd (1985) 3 ANZ Ins Cas 60-631; Swift Placements Pty Ltd v WorkCover Authority (NSW), note 23 above, at [31] and Hewitt v Bonvin [1940] 1 KB 188 at 192. 259. Mason & Cox Pty Ltd v McCann, note 9 above, at [29]; cf Damevski v Giudice, note 33 above, at [70]. 260. BWIU v Odco, note 11 above, FCR at 119–20; ALR at 749; Damevski v Giudice, note 33 above, at [64] and Forstaff Pty Ltd v Chief Commissioner of State Revenue, note 6 above, at [99]. 261. Mason & Cox Pty Ltd v McCann, note 9 above, at [30]. 262. BWIU v Odco, note 11 above, FCR at 118–20; ALR at 748–50; Construction Industry Training Board v Labour Force Ltd, note 128 above, at 223; Forstaff Pty Ltd v Chief Commissioner of State Revenue, note 6 above, at [99]; see also Fair Work Ombudsman v Ramsey Food Processing Pty Ltd, note 134 above, at [63] and [67]. To determine if a relationship of agency exists it is necessary to apply the tests discussed in 3.70. 263. See the discussion in R Cullen, ‘A Servant and Two Masters?: The Doctrine of Joint Employment in Australia’ (2003) 16 AJLL 359; G Davidov, ‘Joint Employer Status in Triangular Employment Relationships’ (2004) 42 BJIR 727; A Stewart, note 16 above. 264. Damevski v Giudice, note 33 above, at [76]; Fair Work Ombudsman v Eastern Colour Pty Ltd [2011] FCA 803 at [72]–[78]; Morgan v Kittochside (2002) 117 IR 152 at [72]–[75] and Nguyen v ANT Contract Packers Pty Ltd (2003) 128 IR 241. 265. The State of Queensland v Whiteman [2006] QSC 325.

[page 82]

Chapter 3 Formation of the Contract Introduction Agreement: enforcing contracts where offer and acceptance are opaque Objectivity in contract Offer Offer defined Communication of the offer and authority to make the offer Conditional offers Termination of offers Acceptance Unequivocal assent to the offer Communication and modes of acceptance Acceptance by conduct Consideration The meaning of the need for consideration Consideration in employment contracts and mutuality Detriment and benefits, and consideration moving from the promisee Consideration must be sufficient and lawful, but need not be adequate Uncertain, vague and past consideration The Intention to Create a Contract The need for an intention to contract Ascertaining the parties’ intention

[page 83] Certainty and Completeness Overview Uncertainty Agreements to agree and agreements subject to contract Discretion to perform Cures for uncertainty and incompleteness Privity and Capacity to Contract The doctrine of privity Capacity to contract: minors, the mentally disabled and intoxicated persons Capacity to contract: corporations, the Crown and unincorporated associations Agency and Authority to Contract The relationship of agency The authority of an agent: actual and ostensible Ratification of unauthorised acts and contracts with promoters of companies Acts by agents with and without authority Undisclosed principals The corporate seal rule

INTRODUCTION 3.1 A contract is an agreement which gives rise to obligations that are enforced or recognised by law.1 This chapter considers the conditions that must be met for the formation of an enforceable contract, and the capacity and authority of parties to form a contract. Chapter 2 analyses whether the

contract is one of employment. Chapter 5 deals with the sources of employment obligations, including the relationship between contracts, statutes and collective agreements. Chapter 6 considers variations and other alterations to the contract. 3.2 Principles concerning the formation of employment contracts have generated relatively little litigation in Australia. In most cases the existence and validity of the contract is undisputed. One of the features of employment contracts is that they are often informal. The parties will usually have at least a scant written or oral agreement to perform work and be paid for it. Where they do not, the existence [page 84] of an agreement between them can be readily inferred from the fact that the employee performs work and the employer remunerates the employee. The existence of a valid contract is nevertheless of fundamental importance. The parties cannot contractually enforce an agreement unless it is a valid contract. The existence of a valid contract is a precondition that must be met for an employee to be entitled to a range of statutory benefits: see 2.4. To be enforceable as a contract2 an agreement must meet four requirements. First, there must be an agreement between the parties. This typically consists of an offer and acceptance, though an agreement can be proved by other means: see 3.3–3.4 and 3.8–3.27. Second, each party must provide consideration in return for the obligations undertaken by the other, except where the contract is under seal: see 3.28–3.39. Third, the parties must have intended to create legal relations: see 3.40 and 3.46. Fourth, to be enforced the agreement must be certain and complete: see 3.47–3.60. In 3.5 there is a discussion of the ordinary objective approach in contract, a concept that is referred to throughout this text. It is sometimes difficult to identify exactly when a contract is formed. Evidence of events subsequent to the date of alleged formation may be adduced to prove that the contract has been formed.3 The doctrine of privity, which determines who can enforce the contract, is considered at 3.61–3.64. The capacity of parties to form the contract is discussed in 3.65–3.69. The majority of employment contracts are

formed as the result of an authorised act of an agent. Corporate employees must act by human agents in forming the contract. The principles governing agency are discussed in 3.70–3.85. There are a series of legal and equitable factors that vitiate contracts, such as duress, undue influence, unconscionable conduct, mistake, and misrepresentation. There are also analogous statutory causes of action based on some of these factors. They are considered in 4.2–4.19. Chapter 4 also deals with illegality and its consequences and the statutory causes of action for misleading and deceptive conduct.

Agreement: enforcing contracts where offer and acceptance are opaque 3.3 The notion of offer and acceptance as the foundation of enforceable agreements is relatively modern. Prior to the development of a regular postage system almost all agreements were reached after negotiations [page 85] between parties in each other’s presence (that is, inter praesentes).4 An efficient postage system enabled the parties to easily reach an agreement in the absence of a party (that is, inter absentes) which led to problems that rarely arose when bargains were concluded inter praesentes. What was to occur if an offer was retracted before it was accepted? Or the acceptance was never communicated? Or the offeree intended to accept the offer but had not yet communicated that fact? The resolution of these issues lies near the heart of the rules concerning offer and acceptance.5 The contract model that developed appears to place great store in identifying an offer by one party and an acceptance by the other. It will rarely be necessary to examine issues of offer and acceptance if the parties have executed written terms recording their agreement.6 Often matters are not as simple: employment contracts are often made after job advertisements are published and job interviews are held; negotiations ensue with offers, counter-offers and representations; assumptions and expectations are created;

there may be a congratulatory phone call; a letter of appointment, or the signing of a contract, sometimes follows. The employee then commences work. 3.4 At first glance the rules of contract formation give a misleading impression of being formulaic, transactional and static. There are a range of circumstances in which a contract may be formed notwithstanding the difficulty, or impossibility, of analysing the formation in terms of offer and acceptance.7 Facts should not be sacrificed to phrases, and a practical approach is necessary. These difficulties are more acute in long-term relationships which evolve and in informal arrangements where agreement is commonly inferred from the conduct of the parties. As McHugh J once observed: It is often difficult to fit a commercial arrangement into the common lawyers’ analysis of a contractual arrangement. Commercial discussions are often too unrefined to fit easily into the slots of ‘offer’, ‘acceptance’,

[page 86] ‘consideration’ and ‘intention to create a legal relationship’ which are the benchmarks of the contract of classical theory … . Moreover, in an ongoing relationship, it is not always easy to point to the precise moment when the legal criteria of a contract have been fulfilled. … In a dynamic commercial relationship new terms will be added or will supersede older terms. It is necessary therefore to look at the whole relationship and not only at what was said and done when the relationship was first formed.8

Rather than attempting to analyse the formation in terms of an identifiable offer and acceptance, in such cases the question is whether an agreement is inferred in all the circumstances. Has mutual assent been manifested? Would a reasonable person in the position of the employer and a reasonable person in the position of the employee think there was a concluded bargain?9

Objectivity in contract 3.5 Reference is made throughout this book to the ordinary objective approach in contract.10 Ascertaining the intention of a party is relevant across a range of issues in employment law, including whether the employer intended to make an offer, whether the employee intended to accept an offer,

whether the parties intended to create legal relations, the terms agreed by the parties, whether an obligation is divisible or entire, whether the employer intends to repudiate the contract, whether the employee intended to accept or affirm in the face of a serious breach or repudiation by the employer, whether the parties agreed to terminate the contract by agreement, and whether the parties intend to vary or novate a contract.11 The discussion below focuses on the intention of an [page 87] employer to make an offer to an employee, though the same approach is applicable to each of the issues identified above.12 A similar approach is adopted when interpreting and applying collective agreements, though due regard must be paid to the legislative background against which they are made.13 3.6 In ascertaining an employer’s intention the court looks to the outward manifestations of the intention, not to the employer’s subjective intention.14 What the parties said and did is relevant; what the employer thought it was doing is not, subject to the provisos mentioned below. The issue is whether a reasonable person, in the position of the employee, would conclude that the employer’s statements and conduct amounted to an intention to be contractually bound by the offer.15 Evidence from an employer that it did not subjectively intend to make an offer does not address this issue. The fact that the reasonable person is in the position of the employee is important. The inquiry requires the court to consider the terms of [page 88] relevant statements and documents, the subject matter of the agreement, the status of the parties to it and their relationship to one another, the surrounding circumstances known to parties and the genesis, purpose and object of the transaction.16 A disparity in bargaining power between the parties — when it is established — may be considered.17 The inquiry does not assume that the

reasonable person is some fictional ordinary person standing outside of the relationship. Instead, it places the reasonable person in the particular relational context and imbues the reasonable person with the characteristics of the particular employee known to both parties, whether these include the skills of a CEO or the skills of an illiterate worker. 3.7 The same objective approach is taken to the interpretation of terms, except that the reasonable person is in the position of the parties, not the position of one party18 and evidence of the surrounding circumstances cannot be led to contradict the plain meaning of the terms.19 The intention of the parties is paramount in the construction of both contracts and industrial instruments.20 This objective approach is used throughout contract law when it is necessary to ascertain a party’s intention, or the parties’ intention, with two exceptions.21 The principal exception arises when the employee [page 89] knew22 that the employer did not intend to make an offer. Evidence of the employee’s state of mind is relevant to determine this issue.23 The second exception is where both parties, without artifice, possess a shared intention. In such a case, it is suggested that a court should give effect to that intention. A court should not conclude that the parties intended to make a contract when it is the subjective intention of both parties that no contract be made, even though a reasonable bystander, observing their conduct, would conclude to the contrary.24

OFFER Offer defined 3.8 An offer is the expression by one person to another of a willingness to enter into a binding contract that is to become effective as soon as there is acceptance by the other person.25 The making of an offer to enter into a

contract is usually essential to the formation of an enforceable contract.26 Without an offer there can be no acceptance; without acceptance there is no agreement; and without agreement there is no contract. Some issues associated with offers are examined elsewhere in this text.27 The person making the offer is called the offeror and the person receiving the offer is the offeree. In the discussion below it is assumed that the employer is the offeror. When an employee accepts a job offer it is clear that the employer is the offeror. Where there is bargaining between the parties both parties will assume the role of offeror for some of the time. Identifying the offeror may be relevant in determining the place where the contract is made, which affects the law applied to the [page 90] enforcement of the contract.28 An offer can be made orally, in writing or by conduct. Offers to form or vary a contract can be made by a variety of written means such as a letter or memorandum, employee handbooks, emails, or postings on notice boards or the company intranet.29 3.9 Whether the words or conduct of an employer amount to an offer is ascertained using the ordinary objective approach in contract.30 The issue is whether a reasonable person in the position of the employee would conclude that the words and conduct of the employer were intended to convey an offer capable of acceptance which would, on acceptance, alter the employee’s legal rights.31 There is a considerable overlap between this issue and the issue of whether the parties have a mutual intention to create legal relations.32 In ascertaining the employer’s intention from a document, matters of particular importance include the document’s form and presentation, when the document is provided to the employee, the terms of the document, and the context of the relationship (including the method of communication and the workplace context). As to the form and presentation, a distinction is drawn between documents that are contractual in character (which convey the relevant intention), and those that are not. There is an obvious difference between providing an informational booklet after employment has commenced and giving an employee a document titled ‘Letter of

Appointment’ which contains contractual language.33 [page 91] 3.10 As to the terms, non-committal language tends to indicate the employer does not intend to be bound by an acceptance. A reasonable person in an employee’s position is unlikely to conclude that vague assurances and mere puffery are offers.34 The use of the word ‘offer’ is not determinative.35 The tone and choice of phrase in the document are important. In Republic of Nauru v Reid after many years of employment the employees received a letter offering them continued employment at the rate of remuneration set out in the same letter. Each employee signed the letter as requested. Over the years the employer, whose conduct in preparing and presenting such letters of offer was haphazard, had provided a series of similar letters setting out the remuneration of the employees. The written remuneration rates bore little connection with what the employees were in fact paid. A majority of the Victorian Court of Appeal held that the employees’ actual agreement was governed by an oral term and the written letters ‘were no more than a solemn farce’.36 3.11 An employer may, by various means, explicitly specify that the statements do not give rise to an offer capable of acceptance. Unambiguous disclaimers of contractual intent are sometimes found in documents sought to be incorporated by reference.37 Clear disclaimers or proclamations are significant in ascertaining the intent of the employer. These principles are illustrated in Goldman Sachs JB Were Services Pty Ltd v Nikolich. The employee was given a document titled ‘Working With Us’ at the same time as he was given a letter of offer.38 The document covered a vast array of matters, from a history of the company [page 92] to the firm’s ‘business philosophy’. Some terms were expressed in the language of advice or were descriptive or aspirational. Others were in the

language of contract, detailing matters such as when overtime will be paid and referring to ‘conditions of employment’. The court found a reasonable person in the position of the employee would have concluded that the employer intended to be bound by those provisions containing the contractual language. Black CJ stated: The language and content of the document speaks also of a contractual purpose, as the appellant accepts. As I have noted, some of the language and content is clearly contractual. The circumstance that prospective employees, including the respondent, were required to sign attachments is also suggestive — although by no means conclusive — of a contractual purpose and strengthens the conclusions that may be drawn from some of the language used.39

Ascertaining the intention will also require consideration of the workplace context, such as the manner in which the employer and employee have previously dealt with contractual issues.40 For example, in Acher v Fujitsu Network Communications the court held that an employee did not receive notice of an offer that was posted on the company intranet when that part of the intranet was not accessed by the employee, the employee was not informed that the offer had been posted, and employees had not been informed that they were fixed with knowledge of policies contained on the company’s intranet.41 The workplace context might reveal that the means of communication (such as emails) were regularly used to make offers, or it might show that significant alterations to the relationship are brought to the employees’ attention by a human resources department or in personalised letters.42 [page 93] 3.12 The intention to be bound by a contract on acceptance of the offer is different from an intention to commence negotiations about a matter, promulgate a policy, or communicate an intended approach to an issue.43 An employer does not make an offer to form or terminate a contract by merely inviting an employee to offer to resign or engage in negotiations. For example, in Birch v University of Liverpool the employer announced a scheme under which employees could apply for an early retirement package. The announcement and the scheme were not an offer to terminate the employment on the terms in the scheme. Instead, it was the employee who

offered to terminate the employment on the terms in the package. The employer accepted that offer. It might be said colloquially that Mr Birch accepted an early retirement package, but in law the employer accepted Mr Birch’s offer.44 An offer can only be accepted by an employee to whom it is made. An offer may be made to a class of employees. In McCreadie v Thomson and MacIntyre (Patternmakers) Limited the House of Lords found that for the purposes of the Redundancy Pay Act 1965 (UK) an offer of employment was made to employees by the posting of a sign on a notice board stating: ‘All employees of [the employer] are to report to work at our new premises …’.45 It is possible for a job offer to be made to the world at large, such as through a newspaper or on the internet.46

Communication of the offer and authority to make the offer 3.13 An offer is not made until the employee has received notice of it.47 The offer need not be delivered by the employer itself, but it must come [page 94] to the employee’s attention.48 In Marsden v Fairey Stainless Limited the employee was a shop steward involved in an industrial dispute. His employer sent a letter to all employees dismissing them and offering them new employment. The employer sent Mr Marsden this letter too, but it was misdirected and never arrived. The employee was aware of the fact of the offer and the terms of the offer. He thought that his letter must have been lost in the mail. The United Kingdom Court of Appeal found the offer had been made to Mr Marsden. This judgment is perhaps best understood as endorsing the view that the offer was made to Mr Marsden as he was aware of the fact of the offer, the terms of the offer, and the fact that the offer was made to a class of persons of whom he was a member.49 3.14 An offer communicated to an agent for the employee, or by an agent for

the employer, is capable of being accepted. An offer communicated by a person who is not the employer, or its agent, is not a validly communicated offer and is incapable of being accepted; and an offer communicated to a person who is not the employee or the employee’s agent is not an offer to the employee. For example, in Francis v South Sydney District Rugby League Football Club Ltd the employer, allegedly, told the employee’s sister of an offer to exercise an option. The sister was not the employer’s agent in passing on the offer; nor was she the employee’s agent in receiving the offer. Consequently, no offer was made to the employee.50 Corporate employers always act through agents in making offers. The principles governing agency are discussed in more detail in 3.70–3.87. Where the agent possesses actual or ostensible authority then the employer will be taken to have made the offer. Where the agent lacks even ostensible authority to make the offer, the employer will not be bound by any acceptance unless and until the employer subsequently ratifies the making of the offer.51 Where an agent purports [page 95] to make an offer of employment to a prospective employee on behalf of a prospective employer without authority to do so then the acceptance of the unauthorised offer does not bind the employer and no contract is created between the prospective employer and the prospective employee.52 In such cases the prospective employee may have an action against the agent for breach of warranty of authority.53

Conditional offers 3.15 An offer may be made expressly or impliedly subject to a condition. Although conditions are often classified as conditions subsequent or precedent, it is more useful to understand a condition by reference to the effect of its non-fulfilment. As Mason J explained in Perri v Coolangatta Investments Pty Ltd: [T]here is an obvious difference between the condition which is precedent to the formation or existence of a contract and the condition which is precedent to the obligation of a party to perform

his part of the contract and is subsequent in the sense that it entitles the party to terminate the contract on non-fulfilment. In the first category the transaction creates no rights enforceable by the parties unless and until the condition is fulfilled. In the second category there is a binding contract which creates rights capable of enforcement, though the obligation of a party, or perhaps of both parties, to perform depends on fulfilment of the condition and non-fulfilment entitles him to terminate.54

The formation of the contract may be subject to an express condition, such as the approval of a more senior manager. Until the approval is granted, the contract is not formed as there is no offer from the employer capable of acceptance by the employee.55 Similarly, offers are also sometimes made conditional upon the provision of suitable references, the passing of a medical examination or the acquisition of certain qualifications, and the offer may terminate if the references are unsatisfactory, the examination is not passed or the qualifications are not obtained.56 [page 96] In the absence of clear words, courts are loath to construe terms as conditions precedent to the formation of a contract, as opposed to conditions precedent to the performance of a particular obligation under a contract, particularly when the employee has already commenced work. In Condessa v Workcover the employer insisted that the employee fill out the necessary paperwork, such as an employment declaration, prior to the commencement of work. The employee did not do so. He started work and was then injured. The question arose as to whether a contract of employment existed at the time of the injury. The court held that the failure to fill in the relevant documentation was not a condition precedent to the formation of the contract. The failure to complete the paperwork did not mean the contract was not formed; it merely meant that the employee was not fulfilling his obligations.57

Termination of offers 3.16 An offer of employment may be terminated by the death of one of the parties, revocation of the offer, rejection, or the failure of a condition precedent.58 The termination of the offer by the death of the employee prior

to acceptance is due to the personal nature of employment.59 An offer may be expressly or impliedly revoked before it is accepted.60 Revocation of an offer occurs when an employer takes an action that is inconsistent with an intention to enter into the contract and the revocation is communicated to the employee prior to acceptance.61 The revocation is effective when the employee receives notice of the revocation. The posting of a revocation of an offer in the mail (unlike the posting of an acceptance) does not revoke the offer because it is essential [page 97] that the revocation be received.62 The employer may revoke an offer of employment at any time prior to its acceptance, unless the employer is estopped from doing so or the offer is itself the performance of a promise supported by consideration.63 3.17 An employer cannot revoke an offer after acceptance, even if the purported revocation predates the commencement of work by the employee. In Sarker v South Tees Acute Hospitals NHS Trust the employer wrote to the employee on 14 August offering a job on terms that included a requirement that the employee give two months’ notice of any intention to terminate the contract. On 22 August the employee accepted that offer. It was agreed that the employee would commence work on 1 October. During September the employer asked the employee to agree to give six months’ notice of any intention to terminate the contract. She refused. The employer then wrote to her withdrawing its offer of employment. The court held that the parties had entered into a contract.64 Similarly, in Tooheys Pty Ltd v Blinkhorn the employer made a redundancy offer to employees that was accepted. On discovering a miscalculation in the redundancy payments, the employer purported to withdraw the offer prior to the redundancies being implemented. The employer could not withdraw the offer after acceptance.65 A purported withdrawal of an offer of employment after acceptance will usually be an anticipatory breach, a form of repudiation.66 3.18 An offer is terminated if it is rejected, unless the employer has evinced a willingness to be bound notwithstanding a rejection.67 Similarly, a counter-

offer will ordinarily terminate an offer. For example, in Frank R Wolstenholme Pty Ltd v Davis the employer, based in Queensland, advertised for a station hand. The employee, living in New South Wales, telephoned him and explained he wanted the job but could not come in for a job interview. The employer responded: ‘All right, I’ll give you a two-week trial.’ The twoweek trial had not been mentioned [page 98] in the advertisement. The employer’s utterance was not an acceptance of the employee’s offer. It imposed a new term. It was a counter-offer by the employer which, in turn, the employee accepted. The New South Wales Court of Appeal found that the contract was formed in Queensland, the place the employer received the employee’s acceptance.68 A query about the offer will not be a rejection of the offer.69 Whether the employee is rejecting the offer, putting a counter-offer or merely inquiring about the offer will depend on the objectively ascertained intention of the employee.70 In the course of negotiations about employment the parties may dicker back and forth across a range of subject matters. Whether a counteroffer will supersede all other offers on all of the subject matters canvassed in the negotiations is a question of fact.71

ACCEPTANCE Unequivocal assent to the offer 3.19 An acceptance is an unequivocal assent to the terms of an offer. Acceptance is essential to the formation of a contract because without it there is no agreement, and in the absence of agreement, there is no contract.72 The offer may only be accepted by an employee if the offer is addressed specifically to the employee, or is made to a class into which the employee falls.73 A decision to appoint an employee to a position, without acceptance of that appointment, does not form the contract.74 An offer can be accepted within the time specified in the offer or, if no time is specified, within a

reasonable time.75 [page 99] The acceptance must be unqualified and unequivocal.76 An acceptance of most of the terms of the offer, or all of the principal terms, does not suffice. An acceptance need not be in bald terms. It may be accompanied by requests for further information or for an alteration in the time for performance: ‘[the employee’s] assent being clear and unqualified, the requests, inquiries and mild grumblings which accompanied it did not convert it into a counteroffer’.77 Ultimately the issue is one of intention, namely, whether a reasonable person in the position of the employer would conclude that the employee, by his or her statements and conduct, intended to accept the offer.78 3.20 There must be an almost precise correspondence between the offer and the acceptance. Ordinarily any deviation of significance between the two is fatal, but minor disparities in the language used, such as merely restating the offer in different terms, will not be crucial.79 There is no acceptance when the employee’s response introduces new or different terms.80 Nor can there be acceptance of some terms and a rejection of others: the whole offer is accepted or rejected. Any such deviation from the offer will usually be a counter-offer capable of acceptance. For example, in Campbell v University of Adelaide the employer offered to pay the employee a redundancy package if he retired on a particular date. The employee agreed to accept the package, but did not agree on the date specified by the employer. The court held that there was no agreement between the parties; the date of retirement was a material [page 100] term on which they were not agreed and the employee’s response was a counter-offer capable of acceptance.81

3.21 An offer cannot be accepted unless the employee has knowledge of the offer.82 The acceptance must also be responsive to, and in reliance on, the offer, though the offer need not be the only reason for the conduct constituting the acceptance.83 In Francis v South Sydney District Rugby League Football Club Ltd the injured rugby league player was promised that if he deferred surgery and played for the rest of the season his contract would be renewed. He was also then ordered to resume playing. He decided to defer surgery and play on so as to earn match fees, because he was ordered to do so and because he thought he would not cause himself further injury by doing so. The court held that his conduct was not the acceptance of an offer as it was not responsive to it.84 Ordinarily the intention to accept is inferred when an employee, with knowledge of the offer, performs the required act of acceptance.85

Communication and modes of acceptance 3.22 An acceptance has no effect until it is communicated to the employer.86 Acceptance may occur as the result of a written or oral assent communicated by or on behalf of the employee. Assent to the offer may also arise from the conduct of the employee.87 An uncommunicated decision to accept an offer is insufficient. In Powell v Lee the school master Powell offered his services to a school board who passed a resolution accepting that offer. Powell was told of the resolution by an unauthorised person. The decision to appoint Powell [page 101] was then revoked by the board. Powell claimed there was a contract. The court held that there was no acceptance by the school board as there had been no authorised communication of the acceptance. The decision of the school board to accept the offer did not result in the formation of the contract.88 3.23 Any reasonable mode of acceptance is permissible when the offer does not stipulate the mode of acceptance.89 An offer that unambiguously and exclusively defines the method of acceptance can only be accepted by that

means. A purported acceptance that does not comply with the exclusive mode is ineffective, though it may amount to a counter-offer capable of acceptance.90 In the absence of clear words courts are slow to find that a reasonable person in the position of the employee would conclude that the prescribed method of acceptance is the only valid method: an equally advantageous and prompt means of acceptance will usually suffice.91 The employer can elect not to insist on compliance with the stipulated mode of acceptance.92 An acceptance is effected when it is communicated to an agent of the employer who is authorised to receive it. The employer may waive the requirement to communicate an acceptance. This commonly occurs in unilateral contracts.93 There are difficulties in accepting the view [page 102] that communication of the acceptance may be waived in bilateral contracts.94 3.24 A contract is formed when the acceptance is received, subject to the postal acceptance rule. Where the offer has been accepted by instantaneous means of communication the contract is made at the place where the acceptance is received.95 Acceptances on the phone, in person, by telegrams, facsimiles and emails are only effective if and when they are received.96 The postal acceptance rule is that an offer of employment is accepted when it is posted to the employer, unless the employer has indicated that receipt of the acceptance is necessary.97 The rule has been the subject of a great deal of academic criticism in the common law world.98 It has some surprising consequences. The contract is formed despite the fact that the letter of acceptance is lost or the acceptance is revoked before the mail is received.99 A contract is made at the place where the last act necessary for the formation of the contract was performed. Where the acceptance was pursuant to the postal acceptance rule, the last act necessary was the posting of the acceptance and the contract is made where it was posted. [page 103]

Otherwise, the last act is the receipt of the acceptance, which occurs where it is received.100

Acceptance by conduct 3.25 Evidence of the intention to accept is found in the external manifestations of the employee’s assent. Silence in the face of an offer provides no evidence of assent.101 As acceptance is an unequivocal assent to the offer, silence will rarely be an effective acceptance. Silence is usually just as consistent with the offer having been forgotten; or the employee deliberately ignoring the offer; or the employee being tardy.102 Silence accompanied by conduct indicating assent may be acceptance. Where the employee performs a unilateral contract, without first informing the employer of the acceptance, there may be assent. Assent may also be inferred in some circumstances from past dealings between the parties. The employee may indicate assent by taking the benefit of the offer. In each of these circumstances the employee appears to be silent but his or her conduct viewed in its context evidences assent.103 3.26 An acceptance need not be oral or written: it may be inferred from the conduct of the parties.104 Acceptance by conduct of an offer often occurs when an employee commences work. The circumstances in which assent may be inferred from the conduct of an employee vary with the infinite variety of facts that come before the courts. An agreement between the taciturn is sometimes sealed by a handshake rather than words of concord.105 The employee’s intent is ascertained using the ordinary objective approach in contract: ‘the ultimate issue is whether a reasonable bystander would regard the conduct of the [employee], including his or her silence, as signalling to the [employer] that its offer has been accepted’.106 The issue of acceptance by silence has often arisen when it is alleged that there is a change in the employer, [page 104] such as through a putative assignment from one employer to another: see 2.48

and 6.25. The employer may require that the acceptance be in the form of specific conduct. For example, in late 1914 the Cardiff Corporation passed a resolution promising each of its employees certain moneys if they volunteered to serve Great Britain afloat or ashore during the European Crisis. One of its employees, Mr Shipton, sought permission from his supervisor to volunteer to serve his country. The supervisor refused. Despite this refusal, Mr Shipton volunteered anyway. The court concluded that the act of volunteering was the acceptance of the offer made by the employer, which created a contract. Mr Shipton did not need his supervisor’s permission to perform this act.107 3.27 It is often difficult to determine whether the continued employment of an employee is acceptance of an offer to vary: see 6.25. Commencing work after the receipt of an offer will usually be taken to be an acceptance of the offer, even if the employee has not expressly assented to or dissented from the terms of the employer’s offer.108 It has long been accepted that the existence of a contract, and therefore an agreement, can be inferred from service.109 Where both the offer and the acceptance arise from the conduct of the parties then it is sometimes difficult to ascertain the terms of the contract.110 The inference of acceptance cannot be drawn readily when the employee makes clear his or her opposition to the terms of the offer. Notwithstanding the employee’s service, the lack of agreement between the parties may lead a court to conclude that there is no agreement (and therefore no contract) between the parties. For example, in Hill v Develcon Electronics Ltd the CEO was engaged and commenced work. It was agreed that instead of a salary he would receive a part of [page 105] the profit from the sale of the company, but the details were not finalised. Both he and the company had employment contracts drafted, but there were significant differences between them. The court concluded there was no concluded contract and the commencement of work was not the acceptance

of the employer’s offer in the light of the persistent refusal to agree to the employer’s terms.111

CONSIDERATION The meaning of the need for consideration 3.28 To be enforceable a contract must be supported by consideration or be a contract made under seal.112 The common law will not usually enforce promises that are unsupported by consideration, although it may do so indirectly by using doctrines such as promissory estoppel or by granting restitutionary remedies. The multitudinous rules of the doctrine of consideration are rarely of any importance (or interest) to employment lawyers, except when dealing with the variation of contracts.113 Contracts under seal must be in writing and be signed, sealed and delivered. Deeds are the most common form of contracts under seal. Deeds rarely regulate the formation of employment relationships.114 Formerly deeds were a common method of establishing a contract of apprenticeship. Promises made under seal are enforceable at law despite the absence of consideration, but promises unsupported by consideration are unenforceable by an order for specific performance as equity will not assist a volunteer.115 3.29 A contract not under seal is called a parol or simple contract. Parol contracts may be wholly or partly in writing, oral or inferred from [page 106] the conduct of the parties. The remainder of this section on consideration deals exclusively with parol contracts. Consideration must be provided by each party for a parol contract to be enforceable. Consideration is some act (or forbearance) involving legal detriment to the employee116 (or the promise by the employee of such an act or forbearance) given by the employee as the agreed price of the employer’s promise.117 The reference to consideration as the price of a promise

emphasises its role in the parties’ bargain: [T]he modern theory of consideration has arisen from the notion that a contract is a bargain struck between the parties by an exchange. By that modern theory consideration must be in the form of a price for the promisor’s promise or a quid pro quo.118

Promises that lack the element of reciprocity which is fundamental to the doctrine of consideration, such as a gratuitous promise to consider an employee’s job application, are not enforceable. It is the price that the parties have agreed to that is important. There need not be a correlation between the agreed price and the market price or a fair price.119 Reliance by the employee upon the employer’s promise is not enough to constitute consideration. There must usually be an act or promise impliedly requested by the employer given in return by the employee.

Consideration in employment contracts and mutuality 3.30 It has been suggested that ‘the consideration for work is wages, and the consideration for wages is work’.120 The real position is more complex. As discussed in more detail in 9.11 wages are ordinarily earned by service, not the performance of work. The consideration provided by ongoing and fixed term employees is usually the promise to serve the employer for the duration of the contract in accordance with the obligations imposed by the contract. The consideration provided by an employer to such [page 107] employees usually121 consists of at least two promises: (i) the promise to provide remuneration for that service and (ii) the promise to employ the employee for the duration of the contract. This latter element is sometimes overlooked, but it is of considerable importance in understanding the structure of the employment contract. The obligation to employ for the duration of the contract is the basis of the action for wrongful dismissal.122 3.31 To understand the role of consideration in contracts of casual employees and pieceworkers requires an explanation of mutuality. One of the hallmarks of any bilateral contract is the existence of mutuality of obligation between

the parties. No contract is formed when one of the parties assumes no obligations under the arrangement. In Dietrich v Dare the defendant agreed to pay $2 per hour to Mr Dietrich to paint a house. Mr Dietrich was an alcoholic and he did not know if he could manage the work. His disability might have meant that he could not climb a ladder to start work. They both agreed to give it a trial. Mr Dietrich climbed the ladder and then, almost immediately, fell and injured himself. The High Court held that no contract was created by the arrangement as ‘it lacked the element of mutuality that is essential to the formation of such a [bilateral] contract’.123 Mr Dietrich was under no obligation to do anything. If he had climbed the ladder and immediately backed down without performing work then he would not have been in breach of the contract. In bilateral employment contracts there must be mutuality of obligation. Pieceworkers are paid per item produced. There is usually an implied term in pieceworkers’ contracts that the employer will provide a reasonable amount of work to the employee.124 The employer’s implied promise to provide a reasonable amount of work is good consideration.125 Where there is no obligation on the employer to provide any work then the contract may lack mutuality.126 Similarly, if there is no obligation [page 108] on the employee to perform any work for the employer the contract will fail for want of mutuality. Usually pieceworkers have an ongoing contract with their employer in which the employee agrees to accept and perform the work provided and the employer agrees to provide a reasonable amount of work.

Mutuality and casual employees 3.32 The role of mutuality is less clear for casual employees. There is no common law category of ‘casual employee’ and the phrase has no fixed meaning. Under certain statutory schemes and industrial instruments those described as casual employees are given access to some benefits and denied others. These Acts and industrial instruments commonly define what is meant

by a casual employee for the purpose of those schemes.127 To determine if a person is a casual employee for the purposes of the scheme, courts have focused on whether there is a firm advance commitment as to the duration of the employee’s employment or the days (or hours) the employee will work, the uncertainty or irregularity of the engagement, the right of the employer to refuse to engage the employee and the right of the employee to refuse to accept an engagement.128 Casual employment is a somewhat chameleonic concept, with its characteristics drawing their hue from the different regulatory and contractual settings in which it arises. 3.33 For the purposes of the law concerning consideration, one particular type of casual engagement is of interest — those that lack mutuality of obligation. There must be ‘an irreducible minimum of obligation on each side’ to create a contract of employment.129 If an [page 109] employer has no right under the arrangement to insist that the employee perform work (or the employee has no right to be provided with shifts or work) then, absent some other binding duty owed by parties, it is difficult to conclude that a contract exists between the parties other than on the occasions when the employee is engaged to perform work.130 Such arrangements lack the necessary mutuality of obligation.131 Also, there may be no consideration in such cases as each party has the power to determine whether there will be any performance of the contract at all.132 This presents a conundrum in explaining the structure of a contract with a casual employee. The weight of authority supports the view that casual employees are not engaged on a single continuous contract but instead are engaged under a contract that only arises when the parties agree work will be performed on a particular day.133 An alternative view is that a casual employment contract contains continuing promises that precede and post-date an agreement to work on a particular day. One term might be that, if an offer to work on a particular day is made, then it will be on the terms contained in their agreement. Such a term may come perilously close to being an agreement to agree: see 3.52. Another possible term might be that the

employer promises to consider the employee for engagement and the employee promises to look to the employer for future work. However, this is factually unlikely.134

Detriment and benefits, and consideration moving from the promisee 3.34 Consideration must involve some legal detriment to the employee: the employee must give ‘something of value in the eyes of the law’.135 [page 110] This part of the definition refers to two aspects of consideration discussed further below: an illegal detriment is not good consideration, and consequently a promise to commit a crime or a civil wrong is not good consideration: see 3.36–3.37. Some consideration is not recognised by law for a range of reasons such as that the promise is too vague or uncertain: see 3.38–3.39. Consideration consists of detriment (or a promise to suffer detriment) to the employee and not necessarily a direct or indirect benefit to the employer.136 The detriment includes a forbearance, loss or responsibility, given, suffered or undertaken by the employee.137 Forbearance in this context is usually an undertaking not to exercise a right, such as agreeing not to exercise the right to terminate employment or enforce a debt.138 Usually the detriment to one party is the same as the benefit to the other: that is, the work performed under an employment contract is to the employee’s detriment and the employer’s benefit and the remuneration paid for that work is to the employer’s detriment and the employee’s benefit. It is not essential for the consideration provided to benefit the other party. Consideration can simply be a detriment given, suffered or undertaken. Consideration must move from each party but need not move to the other party.139 The agreed consideration given by the employee need not directly or indirectly benefit the employer.140

In Shipton the employer promised to provide benefits to the employee if he volunteered to serve in World War I. The promise was enforceable even though the consideration provided by the employee (volunteering for service) did not move to the employer and the consideration did not benefit the employer.141 3.35 The principle that the consideration provided by the employee need not benefit the employer is applied in triangular employment arrangements where the employee is engaged by a labour hire company and is directed to perform work for the labour hire company’s client. The consideration given by the employee (the performance of work) [page 111] moves from the employee, but does not move directly to the employer or directly benefit the employer. The rule that consideration must move from each party inhibits the enforcement of collective agreements as contracts. Where it is argued that the collective agreement forms a contract between the employer and the union, then consideration must move from the union. No consideration moves from the union if its members agree to give up a benefit in exchange for the pay rise: in such cases the consideration moves from the employees.142 Alternatively, it is sometimes argued that the collective agreement forms a contract between the employer and the employees. In such cases consideration must move from the employees. A concession by the union to abandon its rights or compromise its claims (such as an agreement not to make an application in Fair Work Australia for an arbitrated pay rise) is not consideration that moves from the employees. Some of these traditional problems with the enforcement of collective agreements may be able to be resolved by recent developments in the law in which courts have accepted that the acquisition by an employer of a practical benefit from a transaction may be sufficient consideration.143

Consideration must be sufficient and lawful, but need

not be adequate 3.36 Consideration must be sufficient, but not necessarily adequate. The consideration provided by both parties must be legal.144 A promise to commit a common law or statutory crime is not good consideration. A promise to commit some non-criminal acts contrary to statute and some tortious acts are not good consideration. A promise that is contrary to public policy is not good consideration. In Wyatt v Kreglinger and Fernau the employee worked for the employer for 47 years. One month before his retirement the employer promised him a pension on the proviso that he did not enter into any other employment or business on his own account in the wool trade. The employee agreed and received a pension for a decade before his employer reneged on the agreement. The court upheld the employer’s defence that the agreement was an unreasonable restraint on the employee. Consequently, the consideration provided by [page 112] the employee was not good consideration as it was a promise to do an illegal act: namely, being unreasonably restrained from competing with the employer.145 The contract will be unenforceable if the illegal promise provides the main consideration.146 Where the illegal consideration only constitutes a severable and subsidiary part of the consideration then it may be possible to sever the offending part and for the remainder of the contract to be enforced.147 3.37 Consideration need not be adequate to be good consideration.148 Adequacy in this sense refers to whether the consideration is an approximation of an objectively determined value of the promise. An employer who agrees to employ a person for $1 per week provides good consideration, despite the existence of a huge discrepancy between the market value of the labour and the consideration provided. A court will not examine whether the contract was disadvantageous to, or even exploitative of, the employee in determining whether it is enforceable under the common law.149 A large discrepancy between the market value of labour and the

wages agreed by the parties may, however, suggest that the parties do not intend their agreement to be binding; or it may provide evidence that the agreement has resulted from the application of duress or unconscionable dealing; or it may affect the availability of some equitable remedies.150

Uncertain, vague and past consideration 3.38 Consideration is illusory when it consists of a promise to perform the contract and reserves the right to the promisor to determine whether or not to perform. Agreements where the employer reserves a discretion to refrain from performing the agreement are not enforceable because [page 113] the employer has not provided any definite consideration — it can choose whether or not to perform the agreement.151 Consideration that is too uncertain is not good consideration.152 The uncertainty may arise because the promise is too laden with subjective meaning, such as a promise to love another. Traditionally, courts have considered that a promise not to complain is unenforceable on this ground.153 However, Lee v GEC illustrates that a promise not to argue may, in some contexts, be good consideration. In that case the employees were in dispute with their employer about redundancy pay. They reached an agreement after negotiations that, in the event of redundancies, the employer would provide certain benefits to the employees. The employees later sought a declaration that they were entitled to those redundancy entitlements and the employer argued that no consideration was provided by the employees for the promise of enhanced redundancy pay. The court accepted that part of the consideration provided by the employees was impliedly ‘abandoning any argument that the increase should have been greater and removing a potential area of dispute between employer and employee’.154 3.39 Past consideration is not good consideration. Consideration is past consideration if it has already moved from the promisee. A gratuitous promise by an employer to give a benefit, such as retirement benefits, to the

employee for his or her past excellent service is unenforceable, unless it is supported by some other new (fresh) consideration.155 [page 114] Where an employer promises a benefit to an employee, but the parties do not agree on the specific terms before the employee performs work in reliance on that promise, the rule governing past consideration has some capacity to cause injustice. Recognising this potential, courts have been prepared to readily circumvent it to serve just ends. They principally do so by adopting one of two approaches. First, by considering the later remuneration to be an admission by the employer of the reasonable remuneration payable for the service provided. Second, by considering the later remuneration to be an agreement fixing the amount of the reasonable remuneration payable for the service provided.156 Both approaches require that there be an implied promise by the employer to pay the employee for the service. In cases where the employer has requested that service such an implication may be readily inferred. The fact that the employer later paid the employee for the service also allows the court to conclude that the parties contemplated that the employee would be remunerated.

THE INTENTION TO CREATE A CONTRACT The need for an intention to contract 3.40 To create a legally enforceable contract the parties must intend for their agreement to be a legally binding contract.157 That intention is ascertained objectively, using the ordinary tests: see 3.5 and 3.44. Given the commercial context in which most employment contracts are made it will be axiomatic that the parties possess the requisite intention. Difficulties in proving that intention usually only arise in rare contexts, such as work arrangements between family members, between a church and its ministers, or with trainees and volunteers. The lack of an intention to form a contract is one of the reasons industrial instruments are often denied a

binding effect: see 5.106. There is a rebuttable presumption that an agreement between employer and employee, supported by consideration, is intended to be legally binding. In such a setting ‘the onus is on the party who asserts that [page 115] no legal effect was intended, and the onus is a heavy one’.158 The High Court has warned against the use of prescriptive rules and presumptions concerning the intention to enter into contractual relations: Because the inquiry about [the intention to enter into contractual relations] … may take account of the subject-matter of the agreement, the status of the parties to it, their relationship to one another, and other surrounding circumstances, not only is there obvious difficulty in formulating rules intended to prescribe the kinds of cases in which an intention to create contractual relations should, or should not, be found to exist, it would be wrong to do so. Because the search for the ‘intention to create contractual relations’ requires an objective assessment of the state of affairs between the parties (as distinct from the identification of any uncommunicated subjective reservation or intention that either may harbour) the circumstances which might properly be taken into account in deciding whether there was the relevant intention are so varied as to preclude the formation of any prescriptive rules.159

The High Court in Ermogenous did not rule out the continued use of the longstanding presumptions and appellate courts have continued to apply the presumption in favour of an intention to create contractual relations in a commercial context.160 3.41 Agreements made in family, social or domestic contexts are rarely intended to give rise to legal obligations. There is (probably) a rebuttable presumption of fact that agreements made in such settings are not intended to be legally binding.161 There is a particular danger in this area that the presumption might ossify into a rule of law.162 There are cases in which promises concerning employment and benefits in such settings have given rise to contractually enforceable obligations, [page 116]

particularly where there has been detrimental reliance on the promise.163 It is suggested that these cases are simply an application of the principles, stated in 3.44, concerning the ascertainment of the parties’ intention. Volunteers who perform unpaid work will usually not be employees, even if the work is done in the hope of later entering into a contract to perform paid work.164 Often such agreements also lack the necessary element of mutuality of obligation that is essential for a binding contract.165 3.42 There is no dichotomy between serving God and being an employee: To say that a minister of religion serves God and those to whom he or she ministers may be right, but that is a description of the minister’s spiritual duties. It leaves open the possibility that the minister has been engaged to do this under a contract of employment.166

As illustrated in Ermogenous, there are great differences among various religious traditions about the appointment and direction of priests and other religious leaders.167 In some communities, it is the church itself that makes the appointment and issues any directions; in others it may be a bishop; in others a property trust or a non-religious community. Whether a minister, howsoever described, is also a party to a contract depends on the intention of the parties, ascertained by applying the approach discussed in 3.44. 3.43 It is sometimes suggested that a stark distinction should be drawn between an agreement to provide training and a contract of employment, and that an agreement may not give rise to a contract of employment if training is the primary purpose and the performance of work is merely secondary. This approach establishes a false dichotomy. A person can be both an employee and serving the employer for the purpose of acquiring training: ‘there is no reason why a binding contract cannot be made [page 117] for the provision of education and training’.168 The classic example of a contract to train is the apprenticeship, which has, at least for the last century, been treated as an employment contract.169 However, different considerations may arise if the mutual purpose is not to perform work, but some purely collateral purpose such as rehabilitation.170

Ascertaining the parties’ intention 3.44 The intention of the parties to enter into a binding contract is ascertained in the ordinary manner in contract law.171 The issue is whether a reasonable person would regard that words and conduct of the parties indicated that they intended to form a binding contract. It is not a search for the uncommunicated subjective motives or intentions of the parties.172 The fact that one of the parties did not anticipate creating contractual relations is not a bar to a court’s concluding that the relevant intention exists.173 Courts take into account a variety of matters in assessing whether the parties possessed the relevant intention, including the subject matter of the agreement, the terms of the agreement, the status of the parties, their relationship, the manner in which the agreement came [page 118] into existence, the degree of formality and certainty in the agreement, and other surrounding circumstances.174 The less formal the agreement, and the more trivial the consideration, the less likely that it was entered into with the intention to create contractual relations. Recording an agreement in a deed is a clear indication the parties intended their agreement to be legally binding.175 Contracts have been found not to exist where the alleged employer agreed to give beer and food to the worker, where the employee is only entitled to an honorarium, where a junior accountant agreed to provide babysitting services to the principals of her employer, where the son would pay the father a wage when there was money at hand to pay, and where a worker named Coward agreed to give his workmate Cole a lift to work and they shared the petrol expenses.176 It is relatively easy to raise a raft of objections to the enforceability of such informal arrangements: what would happen if Cole took a bus to work one day, or Coward was sick, or Cole worked overtime one day but Coward did not? The informality of the arrangements and the uncertainties are not complete bars to the enforceability of the arrangement, but the less certain the agreement the less likely that it was intended to be legally binding.177

3.45 The language used by the parties to describe the arrangement or payments made under it will also be of importance. The most direct way to rebut the presumption is by clear and unambiguous words denying the binding force of their agreement.178 In Moir v JP Porter Co Ltd the employee agreed to resign and the employer agreed to pay him certain retirement benefits. The terms were set out in a document from the employer that stated: I must, however, repeat and emphasize that this whole arrangement is at the pleasure of the Board of Directors of The J.P. Porter Company

[page 119] Limited and subject to its sole discretion. You will, then, understand that although the Company will make every effort to complete its part of this arrangement there is no commitment to do so.

Such clear language showed that the parties did not intend for the arrangement to be binding.179 However, as with the other considerations referred to above, the language used by the parties is not a decisive matter. In Moloch v McCorquodale a community service volunteer who was paid ‘pocket money’ of £25 per week for 24 hours’ work was found to have been employed.180 In Edward v Skyways the court enforced the employer’s promise to make an ‘ex gratia’ payment to the employee.181 The extent to which the employer brings to the employee’s attention a statement denying the ordinary intention to create legal relations may also be relevant.182 3.46 The relationship between the parties may shed light on their intention. A contract must involve a voluntary assumption of responsibility by the parties.183 A person who is compelled by law to work for another, such as some prisoners, usually does not contract with the person for whom work is performed.184 Similarly, it is possible that if an interlocutory order is made ordering an employer to continue to employ a dismissed employee then the foundation of their relationship may not be contractual as it lacks a voluntary assumption of responsibility.185 It is permissible to adduce extrinsic evidence to prove the intention to form a contract.186 This includes evidence of matters that occurred after the contract was formed, such as the subsequent conduct of the parties in relation to the agreement, admissions made by the parties, or

[page 120] whether the agreement has been performed.187 For example, in Raward v Vine Nominees Pty Ltd the employer agreed to implement a rather vague and somewhat incomplete bonus scheme. Applied literally it was quite disadvantageous to the employer. The court was inclined to the view that the parties did not intend to give legal effect to the document. However, the parties’ subsequent conduct in implementing the agreement for four years was accepted as strong evidence of the intention to contract.188

CERTAINTY AND COMPLETENESS Overview189 3.47 An agreement must be complete and certain to be enforced as a contract. An uncertain agreement is one whose terms are so vague that the court is unable to attribute to the parties any particular contractual intention: see 3.51. An incomplete agreement is one that is either lacking an essential term or where the parties have not reached a final agreement about the essential terms: see 3.52–3.55. An agreement is also incomplete if it grants one party an unfettered discretion whether to perform it: see 3.56–3.58. As Menzies J stated: It is a first principle of the law of contracts that there can be no binding and enforceable obligation unless the terms of the bargain, or at least its essential or critical terms, have been agreed upon. So, there is no concluded contract where an essential or critical term is expressly left to be settled by future agreement of the parties. Again, there is no binding contract where the language used is so obscure and incapable of any precise or definite meaning that the court is unable to attribute to the parties any particular contractual intention.190

Courts and parties adopt various methods to resolve problems of incompleteness and uncertainty, including determining meaning or content of the terms by reference to external standards, permitting a third party to determine the meaning or contents, using standards of reasonableness, the implication of terms and severing inessential parts of the agreement: see 3.59–3.60. The agreement is unenforceable as a contract if the incompleteness or uncertainty affects the whole agreement or affects an essential term and is unable to be remedied using these

[page 121] methods. Agreements that lack these essential elements may give rise to restitutionary remedies.191 3.48 Whether a term is essential depends on the intention of the parties. A term will not be essential in the relevant sense if it is mere verbiage or relates to a matter of relatively minor importance.192 In this context synonyms for essential include vital, material and pivotal. Essential does not mean a condition as opposed to an intermediate term or a warranty.193 An essential term is one that the parties regard as essential to a binding agreement, not one that the courts regard as important: If by ‘essential’ one means only a term which the Court regards as important as opposed to a term which the Court regards as less important or a matter of detail, the statement [that the parties must agree on the essential terms] is untrue. It is for the parties to decide whether they wish to be bound and, if so, by what terms, whether important or unimportant. It is the parties who are, in the memorable phrase coined by the Judge, ‘the master of their contractual fate’. Of course the more important the term is the less likely it is that the parties will have left it for future decision.194

A term will be essential to the contract if the parties would not have intended the contract to proceed if the term was ineffective. It is suggested that the only essential terms of an employment contract are probably the terms identifying the parties, an agreement to serve and the basic remuneration of the employee.195 Where the employee’s remuneration [page 122] principally consists of wages, agreement about the wage rate is probably necessary. If the wages are agreed, then incomplete and uncertain terms relating to ancillary remuneration may be severed or may be otherwise unenforceable without rendering the whole contract ineffective.196 Where the employee is principally remunerated by commission or similar modes of remuneration, agreement on those modes will probably be essential. There may be other terms that are crucial, such as when the performance will commence and conclude, but these can usually be easily resolved by reference to implied terms.197

3.49 Where the parties have evinced an intention to be immediately bound, courts strive to give effect to that intention where possible,198 particularly where the parties have acted on the agreement.199 Where there is agreement about essential matters, but no agreement about ancillary matters or machinery matters, courts will readily imply terms to give efficacy to the contract. As Lord Denning MR once stated: [T]he further the parties have gone on with their contract, the more ready are the Courts to imply any reasonable term so as to give effect to their intentions. When much has been done, the Courts will do their best not to destroy the bargain. When nothing has been done, it is easier to say there is no agreement between the parties because the essential terms have not been agreed. But when an agreement has been acted upon and the parties,

[page 123] as here, have been put to great expense in implementing it,200 we ought to imply all reasonable terms so as to avoid any uncertainties.201

The principle applies equally where the contract is said to be uncertain.202 Evidence of conduct after the date of the alleged formation is admissible for the purpose of ascertaining whether the parties have formed a contract — such as evidence that the parties considered and acted as if they had concluded a contract or had continued to negotiate.203 Courts are more circumspect in implying terms to cure uncertainty or incompleteness where there is no agreement on essential matters, or where the uncertainty or incompleteness are irredeemably hopeless.204 The more matters that are left uncertain and incomplete, the slower the courts will be to conclude that the parties intended their agreement to be contractually binding.205 3.50 An interesting corollary of these cases is that the contract need not be complete and certain to be formed, but must be complete and certain to be enforced. A contract that is ‘void’ for uncertainty when formed may morph into a certain, enforceable contract owing to the way in which the parties apply its vague terms. Similarly, an agreement that is incomplete may be enforced because of the manner in which the [page 124]

parties have executed it.206 The principles governing the requirement that the agreement be complete and certain overlap with some of the other principles governing contract formation. A promise that is uncertain or incomplete might not constitute an offer capable of acceptance. A promise that is too vague or illusory might not be good consideration.207 An uncertain promise might indicate that the parties did not intend to be legally bound.208

Uncertainty 3.51 A contract must be certain.209 Courts will try to make sense of ambiguous provisions and give effect to the intention of the parties. Where that intention is too opaque courts will not simply ascribe their own meaning to the terms.210 A contract is not uncertain merely because its terms are amenable to multiple interpretations.211 In Tooheys Pty Ltd v Blinkhorn there was a disconformity between the redundancy calculations offered and the formula on which the calculations were based. The court observed: The fact that different parts of the documents indicate different outcomes so that there is more than one possible meaning does not result in a contract being void for uncertainty.212

Ambiguity, as opposed to vagueness, is insufficient to render a term void for uncertainty. The difference between ambiguity and vagueness is probably one of degree rather than kind.213 A vague term is one that is ‘so obscure and so incapable of any definite or precise meaning that the court is unable to attribute to the parties any particular contractual intention’.214 A complex term with multiple combinations and permutations will not [page 125] be uncertain unless it is so impenetrable as to lack coherent meaning.215 Courts strive to give effect to an intention to be immediately bound by a contract notwithstanding opaque language, especially when the parties have commenced performing the contract.216 However, even in such cases there will be occasions where the provision is hopelessly vague. To enforce such agreements would require the court to dictate the content of the contract. Courts will not do so.217 In addition to uncertainty as to the meaning of a

phrase, the contract may be uncertain because the court is unable to ascertain the scope of its operation.218 The degree of certainty required depends on the remedy sought. A term that is too uncertain to specifically enforce may be sufficiently certain to allow an award of damages.219 Where an essential term of the contract is vague then the agreement is void for uncertainty. Where the vagueness only arises from a non-essential and severable part of the contract, then that part may be severed: see 3.59–3.60.

Agreements to agree and agreements subject to contract 3.52 An agreement to agree in the future on an essential term is incomplete and is not an enforceable agreement. It may also be uncertain and reflect a lack of intention to enter into contractual relations.220 The terms that are essential depend on the intention of the parties.221 Where there is a clear intention to be immediately bound by the agreement, courts are more likely to conclude that the matters left for later agreement are inessential.222 An agreement to negotiate a contract in the future is also not a valid contract. However, an agreement to undertake good [page 126] faith negotiations to resolve disputes arising from the performance of a contract may be enforceable.223 An agreement to agree on wages, or establish a profit-sharing or commission plan in the future is not an agreement to pay wages, or share profits or pay commission that can be enforced as a contract.224 However, there may be a promise to establish such a scheme or plan, and the nonfulfilment of that promise may result in damages. In Silverbrook Research Pty Ltd v Lindley the contract provided for an annual bonus of up to $40,000 per annum. The employer promised to assess the employee’s performance against set objectives, and providing she met the

objectives, pay her the bonus. The contract also stated that ‘the decision as to whether [the employee] should receive the performance bonus is entirely in the discretion of [the employer]’. The employer never set the objectives. The NSW Court of Appeal, by majority, held that the employer breached the promise to provide an opportunity to earn the bonus and the employee could recover damages for loss of that opportunity.225 There may also be a right to a reasonable payment where the parties have agreed to pay a bonus but do not specify the amount.226

Agreements subject to contract 3.53 Traditionally, courts have identified three broad categories of cases that arise when the parties agree about the terms of employment and also agree that the terms shall be later recorded in a written document or more formally set out.227 These agreements are called agreements subject [page 127] to contract. The issue in these cases is whether the parties intended that the agreement would be binding immediately, or if they intended that the agreement would not be binding until a formal agreement was executed between them. In each of these categories it is important to ascertain the intention of the parties. That intention is ascertained in the ordinary objective manner, taking into account all of the surrounding circumstances, including the size, importance and complexity of the transaction.228 It is easier to infer an intention to be immediately bound when the employer is engaging an employee for wages alone than it is when the employer is engaging an employee pursuant to a sizeable and legally or financially complex salary package containing multiple elements.229 3.54 The first of the three categories is when the parties agree on all the essential terms and intend to be immediately bound to perform those terms, but at the same time propose to have the terms restated in a written form which will be fuller or more precise but not different in effect. Agreements falling within this category are immediately binding,230 even if the employment continues without the execution of the formal contract.231 The

second category is when the parties have agreed on all the essential terms of employment, intend no departure from or addition to that agreement, but nevertheless have made performance of one or [page 128] more of the terms conditional upon the execution of a formal document. In such a case there is a binding contract.232 The final category is when the parties agree on all the essential terms and the intention of the parties is not to make a concluded bargain unless and until they execute a formal contract. In such a case there is no binding contract until the execution of the formal contract.233 Agreements in this category are a type of agreement to agree in the future. The parties’ preliminary arrangement will not be binding until the execution of a formal agreement. Any work requested and accepted by the employer pursuant to that preliminary arrangement will not give rise to contractual rights, but may lead to restitutionary liability to prevent the unjust enrichment of the employer at the employee’s expense.234 3.55 When a formal contract is executed it may have a number of possible legal consequences. When the contract falls into the third category of cases then the formal contract will be the contract of the parties as no contract precedes it. In the other two categories, the formal contract may be merely a written note or memorandum of the less formal agreement. Under this approach there is only one contract between the parties. Alternatively, the less formal preliminary contract may be either varied or novated. Whether a contract is varied or novated depends on the intention of the parties ascertained in the ordinary manner.235 Where there is a novation, the informal contract will be terminated, the new formal contract will supersede the previous contract, and the obligations under the informal contract are usually discharged.236 Sometimes the subsequent document will be an integration of the contract: see 5.18.

Discretion to perform

3.56 A contract will not be formed where there has been no agreement on an essential matter. A failure to agree on non-essential matters will not render the contract incomplete.237 If a non-essential term is incomplete [page 129] the parties cannot enforce that term. For example, a party cannot successfully claim a bonus under an inessential bonus scheme that is not finalised, or the benefits of an inessential equity sharing scheme that never existed, or a certain share in the profits when the parties never agreed what the share should be.238 A party cannot be given an unfettered discretion to determine the content of essential terms of a contract or determine whether to perform the parties’ essential obligations.239 Such agreements are unenforceable. Similarly, particular inessential terms that grant the employer such a discretion will be unenforceable. As North J has observed, ‘a purported agreement which leaves the content of the agreement entirely at the discretion of one party is not contractual in nature’.240 There are a series of bases on which courts decline to enforce such contracts. Agreements granting an unfettered discretion to perform are sometimes considered incomplete, sometimes considered uncertain, sometimes considered to provide illusory consideration,241 and sometimes considered as failing to require a mutuality of obligation. It is suggested that the same principle denying enforcement of discretionary promises straddles each of these doctrines, though it is most apt to deal with the unfettered discretion as an issue of incompleteness or uncertainty when the term deals with an inessential matter or the contract is otherwise supported by consideration. 3.57 There are at least three different factual scenarios that fall within this rule. First, there are the cases where the employer reserves to itself the right to determine whether to perform the contract. In Loftus v Roberts,242 for example, the employee was engaged as an actor in a touring company. It was agreed that if the employer wished to perform the play in London then it would engage her on a ‘West End Salary to be mutually arranged between

us’. The court held there was no contract on which the actress could sue: the employer had not promised to perform [page 130] the play and therefore made no promise to employ; further, until there was agreement upon the salary there was no contract. The second scenario is where there is an agreement to perform (or actual performance), but the employer reserves to itself the discretion to determine the whole of the consideration. The right of an employer to pay the employee ‘such sum of money as I deem right’ is an illusory promise.243 In such cases there is often an intention by the parties that some amount be paid but the consideration is unascertainable. The third scenario is where there is an agreement to perform (or actual performance), but the employer reserves to itself the discretion to determine a part of the consideration. One common example is where the employer agrees to pay a salesperson wages, plus a discretionary bonus in the amount it considers fit. The contract is unenforceable if the discretionary provision concerns an essential matter, but is enforceable if it concerns an inessential matter.244 The employer’s promise to exercise a discretion must usually be performed in good faith.245 3.58 A term will not be unenforceable if it specifies a range of possible benefits for the employee but leaves it to the discretion of the employer to determine the exact amount.246 In Lewandowski the employee was offered a position ‘at a salary within a range of $7000 to $9000 per annum’. The court held this clause imposed an obligation on the employer to pay at least the minimum amount within that salary range. The term was sufficiently certain to be enforced: There was a latitude of choice of that salary reposed in one of the parties, but it was not an absolute discretion or latitude which would make the contract illusory.247

Nor will a contract be rendered unenforceable by terms that establish certain terms but contemplate that better conditions may be agreed in

[page 131] the future or permit the employer to be repaid certain benefits on the termination of the contract.248 A similar issue arose in Raward v Vine Nominees Pty Ltd. A profit-sharing scheme established a formula for determining the pool to be distributed and stated it was ‘to be shared between Senior Staff appointed at a later date as an incentive’. The basis on which it was to be shared was unclear. The greater the number of senior staff, the lesser the entitlement of the plaintiff. The parties had acted on the agreement and proceeded to distribute some profits. The court implied a term that the employer could determine the basis and extent of the participation of senior staff in the scheme, subject to its ordinary duties of good faith and perhaps acting reasonably.249

Cures for uncertainty and incompleteness 3.59 Without being exhaustive, there are at least six methods adopted by courts and the parties in attempts to resolve incompleteness and uncertainty in their agreements. First, the performance of the contract may resolve initial uncertainties and ambiguities.250 Second, terms may be implied in law or fact to give efficacy to a contract that is otherwise incomplete or uncertain.251 For example, a term will usually be implied that the performance of the employment will commence within a reasonable time when the contract is silent on the issue;252 and in the absence of a contrary term, a contract is terminable on reasonable notice by virtue of a term implied by law.253 Third, a term may be given content or meaning by reference to an external standard. An agreement to employ by reference to a standard — such as ‘the usual award conditions’254 — is sufficiently certain, so [page 132] long as a clear standard exists. However, problems of incompleteness or uncertainty arise when no such standard exists at all, or there are different

standards that meet the description and it is not possible to discern which is referred to. In Biotechnology Australia Pty Ltd v Pace255 the employee relocated from England to commence employment as a scientist with a biotechnology company on the following terms: a salary package of $36,000, a fully maintained car and ‘the option to participate in the Company’s equity sharing scheme’. No such scheme existed. The employee sought to give content to the term by reference to other schemes operating in biotechnology companies. Kirby P stated: I see no warrant for the Court filling in gaps by reference to an international market in such equity participation schemes for scientists. There are too many features of apparent peculiarity in such schemes, offered by different biotechnology companies, to make it safe to conclude that an objectively ascertainable external standard exists for such ‘equity participation schemes’.256

There are numerous cases in which the parties have adopted a standard that may itself be somewhat uncertain: agreements to pay a reasonable wage or to make a handsome present are examples.257 3.60 Fourth, a contract will not be incomplete where the parties have adopted a mechanism to remedy the apparent incompleteness. In Hawthorn Football Club Ltd v Harding the contract provided that the player was engaged on terms to be agreed, and that in the event of a dispute arising about those terms, the terms will be determined by two arbitrators. Upholding the contract the court held that any apparent lack of completeness of the agreement ‘will be cured if some means or standard, or some machinery or formula, is prescribed by the parties’ [page 133] to enable the agreement to be finalised.258 The machinery may include reference of the dispute to third parties to determine the terms. The formula can be as nebulous as agreeing that the employee will be paid a reasonable wage and courts seek to give effect to this machinery where possible.259 Fifth, an agreement will be upheld as a contract if it is possible to sever the vague or incomplete term. Where the contract is divisible, the void or incomplete term (or part of the term) may be severed and the remainder of the

contract can be enforced. Whether a term is severable depends on the intention of the parties: the issue is whether the parties intended the whole of the contract (or the whole of the term) to fail if the vague or uncertain provision was rendered ineffective.260 Sixth, sometimes a court will imply a standard of reasonableness to cure uncertainty or incompleteness.261

PRIVITY AND CAPACITY TO CONTRACT The doctrine of privity 3.61 The doctrine of privity is that only parties to the contract can enforce the contract.262 A contract does not directly confer contractual rights on persons who are not party to the contract.263 In the discussion below reference will be made to the following example: employer A agrees with employee B that B’s wages will be paid to C, a company controlled by the employee. A then stops making payments to C and the [page 134] issue becomes: what are B and C’s remedies? There are many possible answers to these questions and the analysis below is not exhaustive. As to the remedies of C there are at least four possible approaches. First, in employment contracts a third party may benefit from the performance of the contract.264 This is separate to, though related to, the rule that consideration must move from the employee but need not move from the employer to the employee.265 The rules can be illustrated using the example above. A and B are parties to the contract, but C is not. C provides no consideration. The consideration provided by A (the wages) need not move from the employer to the employee B. The rules governing consideration hold that there is no contract between A and C, as C has provided no consideration. The rules governing privity hold that C cannot enforce the contract between A and B as it is not a party to the contract.266 Hence direct enforcement of the contract by C is not permitted under the orthodox privity rule.

3.62 The second option is to rely on the decision of the High Court in Trident General Insurance Co Ltd v McNiece Bros Pty Ltd. In that case the court considered whether a contract for the benefit of a third party may be enforced by that third party. In the example above, the issue was whether C, who is clearly intended to benefit from the contract, is entitled to enforce it directly. Three members of the court either supported, or provided some support for, the proposition that a third party can enforce a benefit conferred by a contract.267 However, the decision in Trident does not support the establishment of such an exception and previous [page 135] authorities are firmly against it.268 Some statutory reforms permit some third party enforcement of contracts.269 A third possible analysis of the example above is that there is a trust created.270 The trust property consists of the promise to pay C. The employer is the trustee. C is the beneficiary. C can enforce the trust. Whether a particular contract itself creates a trust of the benefit of a promise depends on the intention of the parties as revealed in the terms they used, construed in context.271 A fourth approach is that in some cases it is possible that B and C are both parties to the contract.272 As to the remedies of B, there has clearly been a breach of the contract. On one view the damages of B will be nominal. He or she has not lost the wages as they were not to be paid to B. There may also be difficulties recovering any damages suffered by C as a result of the breach. However, there is some authority to support the view that B could recover substantial damages273 or specific performance of the promise to pay if damages are an inadequate remedy.274 Another construction of the arrangement is that it is a promise to pay the wages as B directs and, on non-performance of that promise, damages will be substantial. On this view the direction to pay C is a revocable mandate that may be unilaterally revoked by B.275 3.63 A final construction is that taken in Re Schebsman, Ex parte The Official Receiver. In that case the employee, on his retirement, agreed

[page 136] with his employer that retirement payments were to be payable to the employee’s wife on his death. The employee became bankrupt, and then died, and the Official Receiver claimed the retirement payments were part of the employee’s estate. It argued that there was an implied term that the employee could redirect the payments away from his wife. The court held that there was no such term. It also held that the contract provided for payment to the wife, the payments never became part of the employee’s property, and the employee had no right to stop payments being made or to redirect them elsewhere.276

Privity, assignment and contracts formed through agents 3.64 Two further points touching on privity should be noted concerning the assignment of non-personal rights and the position of contracts entered into through an agent. Assignment is a transfer of property or some other right from one person (the ‘assignor’) to another (the ‘assignee’), such as the assignment of the right to the service of an employee from one employer to a related company. Personal rights created by employment contracts are not assignable without the consent of all parties. A right is likely to be personal if it is based on confidence reposed in the other party or calls for the exercise of particular skills. Non-personal rights, such as the right to sue for wages, are assignable without the consent of the other party. Rights of any kind are assignable if all parties agree. A valid assignment acts as an exception to the doctrine of privity as it permits a person who is not a party to the contract to enforce the contract.277 When forming employment contracts employers, particularly corporations, act by their agents, such as external recruiters or internal HR managers. The role of the doctrine of privity in a contract entered into through an agent depends on whether the contract is made outside of the authority of the agent, or within that authority, and, if the latter, whether the agent was acting for an undisclosed principal. Agents acting within the scope of their authority act on behalf of the principal. Authorised agents for disclosed and identified principals do not themselves contract with the prospective employee.278 This is not an exception to the doctrine of privity as such an agent is not a

contracting party and the principal is, at all times, a contracting party.279 Where the agent has no actual authority to enter into the contract then no contract [page 137] is formed between the employer and the employee, unless the employer is a disclosed principal and the employer ratifies the contract.280 The exception to the foregoing is when the agent enters into a contract for an undisclosed principal. A principal is undisclosed when the employee does not know of the existence of a principal. An undisclosed principal is ordinarily bound and can sue on the contract entered into on its behalf. However, for the reasons discussed in 3.85, it is unlikely that a contract of employment is formed between an employee and an employer who is an undisclosed principal.

Capacity to contract: minors, the mentally disabled and intoxicated persons 3.65 There is a common law presumption that a person has the capacity to enter into a contract. Issues concerning the capacity to contract rarely arise in employment. When they do they usually concern employees who are minors, or have a mental disability, or are intoxicated or issues about the capacity of corporations, unincorporated associations, or the Crown and its emanations to be employers: see 3.67–3.69. Generally speaking the capacity to contract is acquired at the age of majority, established by statute as 18 across Australia.281 Minors have the capacity to enter into contracts for necessaries. This will include contracts of apprenticeship, for training and to earn a living.282 Contracts merely to trade and contracts that are ancillary to earning a living are not contracts for necessaries.283 To be binding the contract must also be for the benefit of the minor, an issue determined by considering the contract

[page 138] as a whole.284 The presence of one disadvantageous clause, such as a restraint of trade clause, will not be determinative.285 Contracts with minors that are not for necessaries, and not for the benefit of the minor, are voidable but not void, except when the minor is so young as to be incapable of understanding the nature of his or her actions.286 It is only the minor who may terminate the contract on the ground of minority, not the other party. The contract may become binding as the result of being ratified by the minor on reaching his or her majority. 3.66 The capacity required by law to enter a transaction is the capacity to understand the nature of that transaction when it is explained.287 An employment contract made by a person with an incapacitating disability is voidable, not void.288 The same principles govern both employees whose incapacity arises through a mental disability and employees whose incapacity arises through intoxication by alcohol or other drugs. The incapacitated employee may elect to avoid or adopt the contract once the effects of a temporary disability have passed. The contract may also be avoided or adopted through the employee’s authorised representatives.289 To avoid a contract on the ground of incapacity it is necessary for the employee to prove that the employer knew, or ought to have known, of the incapacity at the time the contract was formed.290 In the absence of such knowledge, mere unfairness of the contract will be insufficient to give rise to a right to avoid, but equity may intervene when the employer’s conduct is unconscionable.291 [page 139]

Capacity to contract: corporations, the Crown and unincorporated associations 3.67 A corporation registered under the Corporations Act 2001 (Cth) has the

powers of an individual to enter into contracts.292 A registered corporation may enter into a contract, notwithstanding the fact that its constitution or objects do not grant it the power to do so, or expressly forbid it from doing so.293 The statutory equation of the corporation’s powers with that of an individual does not confer the power to do things that are uniquely human, such as marry or, perhaps, be an employee.294 The common law grants chartered corporations the capacity to enter into contracts.295 3.68 The Crown has the capacity to enter into contracts. There are three sources of that power: the common law, executive power and statute. The Commonwealth’s executive and common law powers are largely coextensive and pursuant to these powers the Crown may enter into contracts without statutory authority and without prior parliamentary authorisation.296 This power extends at least to contracting in the ordinary course of administering a recognised part of the government.297 In the overwhelming majority of cases the Crown exercises powers conferred by statute to appoint employees. Where legislation has been passed that confers a specific statutory power to enter into the contract then the common law and executive powers to contract are modified and [page 140] displaced and the source of the power will be statutory.298 Money cannot be paid out of consolidated revenue without parliamentary authority. The lack of authorisation for the expenditure does not mean that the Crown had no capacity to enter into the contract,299 but may hinder the recovery of money under the contract.300 The principles governing the authority of agents are applicable to contracts made by government officers, subject to an exception concerning the action of breach of warranty of authority.301 The capacity of statutory corporations to enter into contracts is conferred and defined by statute. A statutory corporation has no capacity to enter into a contract that is for a purpose beyond the purposes for which it has been created, unless there is a contrary legislative intention expressed in the statute.302 The doctrine of ultra vires (‘beyond power’) applies to statutory

corporations, though it has been modified in some states in its application to state-owned statutory corporations.303 The doctrine of ultra vires renders void an act beyond the power of the corporation, such as entering into a contract that the corporation is not empowered to make.304 [page 141]

Employment by unincorporated associations 3.69 An unincorporated association is a combination of persons, with a degree of organisation and continuity, acting with some common interest or purpose.305 The association has no legal personality distinct from that of its members and it has no capacity to enter into a contract.306 A contract that purports to be with an unincorporated association is capable of at least three constructions. First, it may be a contract with all of the members of the association, an unlikely construction given the changeability of the membership and the need for a novation each time the membership changes.307 Second, there may be a contract with members of the association when the contract was formed. Third, there may be a contract with the members of its managing committee.308 This is the most likely construction in most cases. The liability of the committee members is personal, rather than as a representative on behalf of all of the members.309 Where the membership of the committee changes, as often occurs in long-term contracts, the parties to the contract may also change.310 An unincorporated association may be deemed an employer for the purposes of certain industrial laws, such as workers’ compensation laws.311 [page 142]

AGENCY AND AUTHORITY TO CONTRACT The relationship of agency

3.70 Issues concerning agency arise in a variety of contexts in employment law, including the making of offers of employment, the acceptance of offers, the obedience of orders, issues touching on privity of contract, negotiations by unions as agents for employees, and the giving and receipt of notice to terminate the contract. These disparate areas are regulated by common principles governing agency. An agent is a person who is able, by virtue of the authority conferred upon him or her, to create or affect the legal rights between a principal and a third party.312 Agency gives effect to the maxim qui facit per alium facit per se — a person who acts though another is deemed to act in person. Central to the concept of agency is the proposition that the agent is representing the principal. The agent acts ‘on behalf of’ or ‘for’ the principal, and not in some independent capacity exercising some other authority.313 When a person enters into a contract then he or she is a contracting party, unless it clearly appears that he or she is acting as an agent.314 Whether a person enters into a contract on behalf of another is a question of fact. If there is an issue about whether a person doing an act is an agent for another then, as Dixon J observed, a useful, practical starting point is to consider ‘for whose benefit or in whose interest it was intended [the act] should be done’.315 A person may be both an agent and an employee.316 Employees regularly act as the employer’s agent. They are often given the authority to affect the legal rights of their employer by entering into contracts with third parties, such as for the purchase or sale of goods. Employers, particularly corporations, act through agents in forming, altering and terminating employment contracts. [page 143]

The formation of a relationship of agency 3.71 The relationship of principal and agent may be constituted by either express or implied agreement. Whether a relationship of agency exists is a separate question to the scope of the agency, which deals with whether there was actual or ostensible authority to do the act on behalf of the principal.317 Agency is express when the principal agrees with the agent that he or she will

act on behalf of the principal. For an express agency to arise both principal and agent must consent to the agency. Whether an implied agency arises depends on if it is reasonable to infer from the words and acts of the parties that they intended to form a relationship of agency. That intention is ascertained using the ordinary objective approach in contract.318 Agency can also be constituted retrospectively by the ratification of an unauthorised act: see 3.79–3.81. Both the principal and the agent must be ascertainable and possess the capacity to form the relationship.319 3.72 When a relationship of principal and agent is formed, the agency created may be in relation to a particular matter or to a class of matters.320 The general rule is that ‘what a person may do by himself he may do by an agent’.321 There are at least four relevant exceptions to this rule. First, the parties cannot appoint an agent to perform personal obligations that cannot be vicariously performed under the contract.322 For example, an employee cannot appoint an agent to attend and perform skilled work under an employment contract. Second, a statute may require personal performance of an act.323 Where the duty, power or authority of the principal is personal in nature then it must be exercised personally. In the absence of an express statutory provision governing the matter, the power to delegate depends on a range of considerations, among them the nature and purpose of the power, the occasions on which the power is to [page 144] be exercised, matters to be taken into account in exercise of the power, and the status of the repository of the power.324 Third, the contract may expressly stipulate that a particular right can only be exercised personally, as where a power to dismiss an employee is invested in a particular person or body.325 Fourth, an agent must be legally capable of performing the act326 and there is no presumption that an agent is authorised to do that which a principal could not lawfully do.327

Unions and delegates as agents

3.73 Issues associated with the role of a union as agent for its members often arise when a union member seeks to enforce an unregistered collective agreement as a contract. A union can enter into such agreements as an agent for its members so long as the principles governing agency are met.328 The need for an ascertainable principal has been said to cause formidable problems in proving that a union acts as agent for its members when entering into such agreements, ‘for usually the intention will be to benefit future as well as present members of the union, and the future members cannot be identified as principals when the collective agreement is made’.329 Further, it may not be clear whether the minority of members who vote against the agreement will authorise the union as agent entering into the agreement.330 The rules of a union, which form a [page 145] contract between the union and the members, may resolve some of these problems.331 Whether a union delegate is an agent for employees or for the union, or both, or neither, in relation to a particular act is a question of fact in each case. The roles played by delegates differ from union to union and workplace to workplace. The much cited observations of Lord Denning that a shop steward is both agent for union members and agent for the union ‘cannot in all respects be applied to this country’.332 In some industries it is said to be notorious that the delegate is an agent for the union in relation to the organisation of industrial action.333 3.74 The role of union delegate has changed considerably since the 1990s. There is now a statutory federal scheme that governs the authorisation of industrial action. This change has been coupled with the demise of centralised wage fixation and the rise of enterprise bargaining, which has made the delegate’s role as representative of employees central in the negotiation of workplace matters. Where it is alleged that the delegate is an agent the ordinary principles should be applied in determining if a relationship of agency exists and ascertaining the scope of any authority by reference to antecedent instructions, the rules of the union, the usual authority

of a delegate and the extent of any ostensible authority.334 When a delegate is an agent the key question is whether the delegate has authority to do the act in issue.335 [page 146]

The authority of an agent: actual and ostensible 3.75 The scope of an agent’s authority is crucial in determining the legal effect of his or her acts. To say that a person is the principal’s agent is at law insufficient to establish contractual liability for the agent’s acts. It is necessary also to show that the agent had authority to do the act.336 Whether any authority has been given, and if so what the scope of the authority is, are questions of fact.337 The authority of an agent may be either actual or ostensible authority.338 Actual authority is a description of the legal relationship between the principal and the agent arising from a consensual relationship to which they alone are parties.339 It is concerned with what is said and done between principal and agent, and not with the representations made to a third party about the scope of the authority.

Actual authority: express and implied 3.76 Actual authority can be express or implied. Express actual authority arises when a principal orally or in writing grants authority to an agent. The scope of such authority is to be ascertained by applying ordinary principles of construction.340 Implied actual authority can arise from a number of sources. First, an agent will have implied actual authority to do whatever is necessary for, or ordinarily incidental to, the effective execution of the agent’s express actual authority.341 Second, an agent authorised to perform particular duties has implied actual authority to do whatever is necessary for the effective performance of those duties.342 This is often referred to as the usual authority of an agent. When a person is appointed as a managing director (or to any

[page 147] other position), implied actual authority is granted to do all the acts a managing director usually performs.343 Third, implied actual authority can arise from a custom in the relevant industry or through a course of conduct.344 Fourth, implied actual authority can arise from acquiescence where there is no express grant of authority, but a person repeatedly presumes to act as an agent and the principal repeatedly adopts the practice of ratifying the unauthorised acts. In such cases the inference may be drawn that the principal is actually authorising the acts of an agent. For example, a person who is not formally appointed as a managing director may have actual authority to do an act as he or she has been acting as the managing director and his or her acts have been treated by the board as authorised acts.345

Ostensible authority 3.77 Ostensible (or apparent) authority is very different from actual authority. It is based on estoppel rather than the express or implied conferral of authority. It is concerned with the appearance of authority created by a representation of the principal to the third party. As Diplock LJ has stated: An ‘apparent’ or ‘ostensible’ authority … is a legal relationship between the principal and the contractor created by a representation, made by the principal to the contractor, intended to be and in fact acted upon by the contractor, that the agent has authority to enter on behalf of the principal into a contract of a kind within the scope of the ‘apparent’ authority, so as to render the principal liable to perform any obligations imposed upon him by such contract. To the relationship so created the

[page 148] agent is a stranger. He need not be (although he generally is) aware of the existence of the representation but he must not purport to make the agreement as principal himself. … The representation, when acted upon by the contractor by entering into a contract with the agent, operates as an estoppel, preventing the principal from asserting that he is not bound by the contract.346

3.78 Three conditions must be met for a principal to be bound by an act by

virtue of the ostensible authority of an agent. First there must be a representation that the agent has authority to do an act of the kind performed. The representation may be express, or implied from a course of conduct, or (as is often the case) it will consist of engaging the agent in a position that usually carries certain authority.347 In Pacific Carriers Ltd v BNP Paribas the High Court stated: In many cases the representational conduct commonly takes the form of the setting up of an organisational structure consistent with the company’s constitution. That structure presents to outsiders a complex of appearances as to authority. The assurance with which outsiders deal with a company is more often than not based, not upon inquiry, or positive statement, but upon an assumption that company officers have the authority that people in their respective positions would ordinarily be expected to have. … A kind of representation that often arises in business dealings is one which flows from equipping an officer of a company with a certain title, status and facilities.348

By appointing a person as managing director, human resources manager or a clerk the employer holds out to third parties that those employees have the usual authority associated with those positions.349 The employer’s failure to establish appropriate internal procedures to prevent the agent’s unauthorised conduct may result in the agent being held out as being authorised.350 Special rules apply to agents of the Crown and statutory [page 149] bodies with defined powers when dealing with ostensible authority and the effect of any ratification of the unauthorised use of power.351 Second, the representation must be made by the principal: ‘it is not enough that the representation should come from the [agent] alone’.352 The representation must be made by a person with actual and not merely ostensible authority.353 In the absence of a representation by the principal, any belief held by the third party about the authority of the agent is immaterial. In Francis v South Sydney District Rugby League Football Club Ltd the player mistakenly thought that the coach had the authority to renew his contract, notwithstanding the fact that neither the coach nor the club had made such a representation and that it was not within the usual authority of the coach to exercise such a power. The court observed:

In the absence of a holding out by Souths of its coach as authorised to engage players, or to commit Souths to engage them, any subjective understanding that [the player] … may have had as to [the coach’s] authority is irrelevant.354

Third, the representation must be relied upon by the third party. A third party who is ignorant of the representation cannot rely on it. Nor is there reliance when the third party does not believe that the agent has authority or has notice that the agent is not authorised to do the act: ‘there can be no estoppel if the person dealing with the agent knows the actual facts, and knows that the agent is acting in his own interests and not in the interests of his employer’.355 The law is less clear outside of the realm of fraudulent collusion between the third party and the agent where the lack of authority is obvious. Professor Reynolds, in [page 150] a passage referred to approvingly by a Full Court of the Federal Court, has stated: Situations of express notice cause no difficulty. The problem is to know what constitutes notice, and when there is a duty to inquire. It is often said that neither constructive nor presumed notice apply in commercial transactions. … But there can be no doubt that in many situations where it is relevant to know whether one person has knowledge of the facts, including those raising the doctrine of apparent authority, the court may infer from the circumstances that the person concerned must have known the facts in question or at least must have been suspicious to the extent that further inquiries would have been appropriate in the context.356

Ratification of unauthorised acts and contracts with promoters of companies 3.79 A disclosed principal may ratify the unauthorised act of an agent who has purported to act for the principal. The ratified act will then be treated as if it were authorised.357 Ratification is the adoption of the relationship of agency assumed by the professing agent in the act, not the adoption of the act itself.358 The agent must have purported to act for the principal. Only that principal, and no other, can ratify the act.359 An act done by a person who acts for himself or herself cannot later be ratified by a principal.

For ratification to be effective the principal must be disclosed at the time the act was performed, either because the principal was specifically named by the agent or because there was a reasonable designation of the person for whom the agent acts.360 An act cannot subsequently be ratified by an undisclosed principal: ‘ratification has no place in the doctrine of the undisclosed principal’.361 Ratification must occur within either the [page 151] time specified in the contract or a reasonable time after the act.362 The ratification must be unequivocal. It may be express or implied from the words or conduct of the principal. For example, an unauthorised dismissal will be ratified by an employer maintaining in proceedings that the employee was dismissed.363 At the time of the ratification the principal must know all the material circumstances of the act sought to be ratified.364 3.80 An unauthorised act can be ratified; indeed, only an unauthorised act requires ratification.365 The ratifying principal must be competent and capable of entering into the contract. The principal must exist at the time of the act and have power to make the contract.366 The effect of ratification is that the agent is treated as if he or she had authority to perform the unauthorised act: ‘the act done is put in the same position as if it had been authorised antecedently’.367 There are some exceptions to the proposition that a principal can ratify unauthorised acts, such as where the unauthorised act would affect vested proprietary rights or where the act must be valid when initially performed.368 For example, in Hughes v NM Superannuation Board Pty Ltd the three employees were members of a superannuation trust fund. On the trust’s termination there were insufficient funds to pay out the [page 152] superannuation benefits of all 26 employees at the enterprise. If the fund was

terminated on 30 June 1989 then the three employees enjoyed a certain priority in payment but they lost that priority if the fund was terminated after 30 June 1989. On 30 June 1989 the chairman, without authority, purported to terminate the trust fund. One year later the board of directors sought to ratify the chairman’s unauthorised act. The NSW Court of Appeal held that the doctrine of ratification did not apply as the ratifying act did not occur within a reasonable time and the rights of the three employees to priority, once they had vested on 30 June 1989, could not be divested by the ratification.369 3.81 Under the common law, no ratification can occur when there is a contract made by an agent (commonly called a promoter) on behalf of a body prior to its incorporation.370 Section 131 of the Corporations Act alters the common law rule by allowing for the ratification of pre-incorporation contracts entered on behalf of, or for the benefit of, a company prior to incorporation. It also provides that the promoter is liable in damages if the body fails to be incorporated or fails to ratify the contract when it is incorporated.371 The principles governing ratification are illustrated by the decision in R v Watling. The employer, an incorporated association, had rules that provided that the president could issue instructions to the employee, but not dismiss him. The president wrote a letter on 21 April 1998 purporting to summarily dismiss the employee, signed ‘on behalf of the Board of Management of the employer’. The board of management met in May 1998 and ratified the act of the president. Evans J stated: The following conditions for an effective ratification were satisfied. At the time of the dismissal, [the president] had disclosed that she was acting for the Board. The letter of dismissal was tabled at the time that the Board ratified her actions … The ratification occurred within a reasonable time of the dismissal. The ratification of [the president’s] action made the dismissal as effective as it would have been had it been done with prior authority. The dismissal was made effective from its occurrence on 21 April 1998.372

[page 153]

Acts by agents with and without authority 3.82 The act of an agent within the scope of his or her actual authority binds a

disclosed principal.373 The authorised act of the agent is performed on behalf of the principal and is the principal’s act. When the agent forms a contract on behalf of the principal then the contract is formed between the principal and the third party, and not between the agent and the third party.374 This does not form an exception to the doctrine of privity, as an authorised agent is not a contracting party and the principal is, at all times, a contracting party.375 An authorised agent is not liable to perform the disclosed principal’s obligations and cannot ordinarily enforce the contract, unless there are contractual stipulations to the contrary.376 The act of an agent outside the scope of his or her actual authority does not bind a disclosed principal unless that act is either ratified by the principal377 or is an act within the ostensible authority of the agent. In Chapman v Commissioner, Australian Federal Police the Commissioner was authorised to appoint police officers by an instrument in writing. That power was delegated to the Assistant Commissioner, but was not delegated to an inspector. Inspector Vincent sent an offer of employment to Chapman, who signed and returned the offer. The court held that no contract was formed.378 3.83 The liability of an agent acting without authority depends on the circumstances. An agent may have contracted in his or her own name and thereby be personally liable. An unauthorised agent may be liable for a breach of warranty of authority when the agent has represented that he or she has authority to contract on behalf of the principal and [page 154] that representation induces the third party to enter into the contract.379 The position of Crown servants is different. In Dunn v MacDonald the defendant Mr MacDonald, the Consul-General for the Oil Rivers Protectorate, on behalf of His Majesty entered into a three-year, fixed term contract with Mr Dunn. After he was wrongfully dismissed, Mr Dunn sued the Crown for wrongful dismissal, but he failed as his employment was terminable at pleasure by the Crown.380 So Mr Dunn then sued Mr MacDonald alleging that MacDonald represented that he had authority to enter into a fixed term contract. Mr Dunn failed once more, this time because an agent of the Crown is not liable for

breach of warranty of authority, unless perhaps there is the clearest evidence of an intention to contract personally.381 The extent of the principal’s liability for wrongful acts of its authorised agents depends on whether the agent is an employee or not. An employer is vicariously liable for the loss caused by the wrongful acts of its employee when acting in the course of the employment.382 A principal is liable for the loss caused by wrongful acts of its agent done within the scope of the agent’s authority,383 but is not generally liable for unauthorised acts done in the course of the agency.384 The scope of the agent’s authority is crucial in determining liability.385 [page 155]

Undisclosed principals 3.84 The law commences with the proposition that if a person enters into a contract then he or she is considered to be a contracting party, unless it is clear that he or she is acting as an agent.386 When forming an employment contract a principal may be disclosed or undisclosed. A principal is undisclosed when the employee does not know of the existence of a principal and is a disclosed principal when the employee knows that the agent is contracting on behalf of an identified or unidentified other party.387 The doctrine of the undisclosed principal deals with a series of issues associated with undisclosed principals. Lord Lloyd has summarised the principles as follows: (1) An undisclosed principal may sue and be sued on a contract made by an agent on his behalf, acting within the scope of his actual authority. (2) In entering into the contract, the agent must intend to act on the principal’s behalf. (3) The agent of an undisclosed principal may also sue and be sued on the contract.388 (4) Any defence which the third party may have against the agent is available against his principal. (5) The terms of the contract may, expressly or by implication, exclude the principal’s right to sue, and his liability to be sued. The contract itself, or the circumstances surrounding the contract, may show that the agent is the true and only principal.389

3.85 As to the first point, an undisclosed principal cannot sue and be sued on a contract made by an unauthorised agent. Nor is it possible for an

undisclosed principal to ratify the acts of an unauthorised agent.390 As to the second point, it must be clear to the third party that the agent is acting on behalf of a principal, and not on the agent’s own behalf, as illustrated by Gothard v Davey. In that case the issue in insolvency proceedings concerned which member of a corporate group was the employer. Corporation A was a subsidiary of Corporation P. It was argued that A entered into the contracts as agent for P and [page 156] therefore P was liable for their breach. The offers of employment were on the letterhead of A, the individually tailored terms (as opposed to the boilerplate provisions) all referred to employment by A, and A paid the wages and provided other benefits to the employees. Some of the contracts stated that ‘you will be employed by Corporation P’. A had no authority to include this statement in the contracts of employment. The court concluded that there was no relationship of agency as no authority had been conferred on A to enter into the contracts as an agent, A was acting on its own behalf, rather than on behalf of P when entering into the contracts, and there was no clear indication that P was the principal in the transaction.391 There appears to be a further fundamental problem in applying the doctrine of undisclosed principals when dealing with the formation of employment contracts. The doctrine does not operate when a contract is made for reasons personal to the agent. An undisclosed principal cannot take the benefit of an employment contract where that benefit is unassignable and a principal cannot perform an obligation under the contract when that obligation cannot be vicariously performed.392 Employment contracts are personal contracts. The employee’s obligation to serve an undisclosed principal is unassignable in the absence of an express term to the contrary.393 The employee’s obligation to serve is also unable to be vicariously performed in the absence of an express term to the contrary.394 For these reasons it is suggested that the doctrine of the undisclosed principal will have little practical application to the formation of employment contracts.

The corporate seal rule 3.86 A corporation must manifest its acts and intentions by the actions and declarations of human beings.395 Its agreement to a contract must [page 157] be manifested by the acts of people. There are certain common law rules that govern the signification of a corporation’s consent, which have been modified by the ss 126 and 127 of the Corporations Act and similar statutes.396 The common law position is that the affixing of the common seal was the only recognised mechanism by which the company’s agreement to a contract could be proved. There is a positive and a negative aspect to this rule: wherever the seal of the corporation is affixed then the corporation had assented to the contract and any unknown irregularity in the affixing of the seal was generally not relevant.397 Further, when the corporate seal was not affixed the corporation could not be proved to have assented to the contract: ‘the seal is the only authentic evidence of what the corporation has done, or agreed to do’.398 There were always recognised exceptions to these rules where the affixing of the seal was not necessary, including small or trifling contracts, urgent contracts or frequently recurring contracts. Another exception was in the engagement of some inferior servants.399 Principles of agency were not relevant when the corporate seal rules were applicable, as an authorised agent could not enter into the contract without the affixing of the seal and the affixing of the seal rendered the existence of authority largely irrelevant.400 3.87 The rules governing the use of the corporate seal have been rendered irrelevant for corporations registered pursuant to s 126(1) of the Corporations Act which provides that a company’s power to make, vary, ratify or discharge a contract may be exercised by an individual acting with the company’s express or implied authority and on behalf of the company. The power may be exercised without using a common seal.401 Pursuant to s 126, contracts can be formed without use of the seal. When the seal is not used, the reference to ‘authorised’ in s 126 requires that the person be an agent with

authority to enter into the contract on the company’s behalf. The existence of such authority is [page 158] determined by the use of the ordinary principles of agency.402 Issues of agency do not arise when the seal is properly used in accordance with the company’s constitution or the Corporations Act. The sealing of a document is similar in effect to the signature by an individual.403 _________________________ 1.

E Peel, Treitel’s Law of Contract, 12th ed, Sweet & Maxwell, London, 2010, p 1.

2.

The rights of employers and employees may be governed by statutory provisions that are enforceable as statutory rights: see 5.80–5.91.

3.

See 3.3–3.4 and 5.23.

4.

As late as 1790 the whole concept of a contract presupposed an agreement reached during one negotiating session: Cooke v Oxley (1790) 3 TR 653; (1790) 100 ER 785 discussed in S Stoljar, ‘Offer, Promise and Agreement’ (1955) 50 NWULR 445 at 454.

5.

S Stoljar, ‘Offer, Promise and Agreement’, note 4 above, at 455; on the link between the development of rules of offer and acceptance and the postal system, see S Gardner, ‘Trashing with Trollope: A Deconstruction of the Postal Rules in Contract’ (1992) 12 OJLS 170.

6.

See 5.18.

7.

Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61 at [71]–[81]; Damevski v Guidice (2003) 133 FCR 438; 202 ALR 494; 129 IR 53 at [78]–[88]; Abbott v Women’s and Children’s Hospital Inc (2003) 86 SASR 1 at 9 (aff’d [2004] SASC 67); Ormwave Pty Ltd v Smith [2007] NSWCA 210 at [68]–[76] and Magill v Magill (2006) 226 CLR 551; 231 ALR 277 at [210].

8.

Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110.

9.

Brambles Holdings Ltd v Bathurst City Council, note 7 above, at [81]; Damevski v Guidice, note 7 above, at [78]–[89]; Vroon BV v Foster’s Brewing Group [1994] VR 32 at 81–3; Toyota Motor Corporation Australia Ltd v Ken Morgan Motors Pty Ltd [1994] 2 VR 106 at 178 and Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424; [2001] FCA 1833 at [369]–[370].

10.

See M Furmston and G Tolhurst, Contract Formation, Oxford University Press, Oxford, 2006, pp 2–6; W Howarth, ‘The Meaning of Objectivity in Contract’ (1984) 100 LQR 265; J P Vorster, ‘A Comment on the Meaning of Objectivity in Contract’ (1987) 103 LQR 274; A de Moor, ‘Intention in the Law of Contract: Elusive or Illusory?’ (1990) 106 LQR 632 and J R Spencer, ‘Signature, Consent, and the Rule in L’Estrange v Graucob’ [1973] Camb LJ 104.

11.

Damevski v Guidice, note 7 above, at [3], [89]–[100] and [172]; Yousif v Commonwealth Bank of Australia (2010) 193 IR 212; [2010] FCAFC 8 at [42]; Gothard v Davey (2010) 80 ACSR 56;

[2010] FCA 1163 at [196]–[200]; Australian Salaried Medical Officers’ Federation (New South Wales) v Sydney South West Area Health Service (No 2) (2007) 166 IR 320 at 342 (contract formation); Abbott v Women’s and Children’s Hospital, note 7 above, at [19] (ascertaining terms of the contract); Stoelwinder v Southern Health [2001] FCA 115 at [30]–[32] (ascertaining meaning of the terms); Hoenig v Isaacs [1952] 2 All ER 176 at 180 and Purcell v Bacon (1914) 19 CLR 241 at 265 (whether an obligation is entire or divisible); Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623 at 658; 85 ALR 183 at 207 and RW Jaksh and Associates v Hawks [2005] VSCA 307 at [60] (whether the employer intends to repudiate the contract); Tropical Traders Ltd v Goonan (1964) 111 CLR 41 at 55; Sargent v ASL Developments Ltd (1974) 131 CLR 634 at 646; 4 ALR 257 at 266; Re Reid (2007) 163 IR 392; [2007] FCA 417 at [19]–[20] and Egan v Maher [No 2] (1978) 35 FLR 252 at 263–4 (intention to affirm or terminate); Raward v Vine Nominees Pty Ltd [2001] QSC 494 at [126] (intention to terminate by agreement); Concut Pty Ltd v Worrell (2000) 176 ALR 693; 103 IR 160 at [19] and [56] and Cumbria County Council v Dow (No 2) [2008] IRLR 109 at [12] and [41] (intention to novate or vary). 12.

Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95; 187 ALR 92 at [25].

13.

Amcor Ltd v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241; 214 ALR 56 at [2], [30] and [50] and Construction, Forestry, Mining and Energy Union v Pilbara Iron Company (Services) Pty Ltd (2010) 198 IR 173; [2010] FCA 822 at [18]–[24] (rev’d on other grounds [2011] FCAFC 91).

14.

Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; 211 ALR 342 at [35]–[41]; Ermogenous v Greek Orthodox Community of SA Inc, note 12 above, at [25]; Abbott v Women’s and Children’s Hospital Inc, note 7 above, at [34] (aff’d [2004] SASC 67 at [10]); Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309 at 335–8; Ryan v Textile Clothing and Footwear Union of Australia [1996] 2 VR 235 at 265; Goldman Sachs JB Were Services Pty Ltd v Nikolich [2007] 163 FCR 62; [2007] FCAFC 120 at [23]; Damevski v Guidice, note 7 above, at [3], [89]–[100] and [140] and Yousif v Commonwealth Bank of Australia, note 11 above, at [42].

15.

Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd, note 14 above, at [40] (‘What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe’) and Yousif v Commonwealth Bank of Australia, note 11 above, at [44].

16.

Ermogenous v Greek Orthodox Community of SA Inc, note 12 above, at [25]; Pacific Carriers Limited v BNP Paribas (2004) 218 CLR 451; 208 ALR 213 at [22]; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd, note 14 above, at [40]; and International Air Transport Association v Ansett Australia Holdings Ltd (2008) 234 CLR 151; 242 ALR 47 at [8], [53] and [127].

17.

Autoclenz Ltd v Belcher [2010] IRLR 70 at [92] approved in Autoclenz Ltd v Belcher [2011] UKSC 41 at [34]–[35].

18.

Reardon Smith Line Ltd v Hansen-Tangen [1976] 3 All ER 570; 1 WLR 989 at 996 per Lord Wilberforce, quoted approvingly in Stoelwinder v Southern Health, note 11 above, at [30] per Finkelstein J; Australian Salaried Medical Officers’ Federation (New South Wales) v Sydney South West Area Health Service (No 2), note 11 above, at 342 and Kulkarni v Milton Keynes Hospital NHS Trust [2010] ICR 101; [2009] EWCA Civ 789 at [58].

19.

Western Export Services Inc v Jireh International Pty Ltd [2011] HCA 45 at [4]–[5]; see further at 5.10.

20.

Amcor Ltd v Construction, Forestry, Mining and Energy Union, note 13 above, at [2], [30] and [96] and Shop Distributive and Allied Employees’ Association v Woolworths SA Pty Ltd [2011]

FCAFC 67 at [14]–[18]. 21.

There is some debate as to whether a second exception exists: namely whether an offer is made when the employee neither believes that the employer is intending to contract nor knows that the employer does not have this intention: see further H Beale (ed), Chitty on Contracts, 28th ed, Sweet & Maxwell, London, 1999, at [2-003].

22.

On one formulation of this exception the employee must believe, rather than know, that the employer was not making an offer: M Furmston and G Tolhurst, Contract Formation, note 10 above, pp 34–5, and the cases cited therein.

23.

M Furmston and G Tolhurst, Contract Formation, note 10 above, pp 3–4 and Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd, note 14 above, at 331.

24.

Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd, note 14 above, at 331 and Redeemer Baptist School Limited v Glossop [2006] NSWSC 1201 at [93]; on the interpretation of the terms to give effect to a shared actual intention, see Stoelwinder v Southern Health, note 11 above, at [31]–[32].

25.

M Furmston and G Tolhurst, Contract Formation, note 10 above, pp 13–4; Australian Woollen Mills Pty Ltd v Commonwealth (1954) 92 CLR 424 at 456–7 (aff’d (1955) 93 CLR 546).

26.

As is discussed in 3.3–3.4, it is possible for agreement to occur without an identifiable offer and acceptance.

27.

See 6.13 on offers to vary, 6.49 on construing a party’s serious breach or repudiation as an offer and 11.19 on inferring the terms of an offer after a fixed term contract has expired and the employee has continued to be employed.

28.

See P Nygh, Conflict of Laws in Australia, 6th ed, LexisNexis Butterworths, Australia, 1995, pp 51–3, 303–4 and 308; Helmers v Coppins (1961) 106 CLR 156; Starr v Douglas (1994) 35 NSWLR 133 and Frank R Wolstenholme Pty Ltd v Davis (1995) 12 NSWCCR 1 (discussed in 3.18).

29.

Goldman Sachs JB Were Services Pty Ltd v Nikolich, note 14 above (employee handbook provided contemporaneously with letter offering employment); Keays v J P Morgan Administrative Services Australia Limited [2011] FCA 358 at [49] (job description provided prior to commencement of employment); Ajax Cooke Pty Ltd v Nugent (1993) 5 VIR 55 and McCreadie v Thomson and MacIntyre (Patternmakers) Limited [1971] 2 All ER 1135 (posting of the offers on a notice board); Sheller by Sheller v Frank’s Nursery & Crafts 957 F Supp 150 (1997) at 154 and Brown v KFC National Management Company, 921 P2d 146 (1996) at 159–60 (applications for employment); Campbell v General Dynamics Government Systems Corporation 407 F3d 546 (2005) at 555–6 (offer sent via email); Howard v Oakwood Homes Corp 134 NC App 116 (1999) at 121 (receipt of offer through the mail, internal memos and at meetings conducted by employer) and Reese v Commercial Credit Corporation 955 F Supp 567 (1997) at 570 (mailed to and received by the employee).

30.

See 3.5.

31.

See 3.5; Yousif v Commonwealth Bank of Australia, note 11 above, at [42]; Jones v Lee [1980] ICR 310 at 315 and 318–9.

32.

See 3.40.

33.

Rahemtulla v Vanfed Credit Union [1984] 3 WWR 296 (employee was given a copy of a largely informational policy manual and was instructed to read it after she commenced employment) and Goldman Sachs JB Were Services Pty Ltd v Nikolich, note 14 above, at [13]–[42]. As to misleading presentation of terms, see M Clarke, ‘Notice of Contractual Terms’ (1976) 35 Camb

LJ 51 at 77–9 and Roe v RA Naylor Ltd [1917] 1 KB 712 at 714–5. 34.

Prescott v Farmers Tel Cooperative Inc 335 SC 330 (1999) (‘as long as you do your job, keep your nose clean, you’d have a job’: held that no offer); Rowe v Montgomery Ward & Co 437 Mich 627 (1991) (‘as long as you sold you would have a job at the store’: held that no offer).

35.

See Clifton v Palumbo [1944] 2 All ER 497 and Davies v Rhonnda District Council (1918) 87 LJKB 166.

36.

Republic of Nauru v Reid (VSCA, Ashley, Brooking and Smith JJ, No 4905/90, 23 October 1995, unreported); see also Hawker Siddley Power Engineering Ltd v Rump [1979] IRLR 425 (employee told to sign a document empowering the employer to transfer the employee, but told he would not be transferred).

37.

See, for example, Yousif v Commonwealth Bank of Australia, note 11 above. On the need for disclaimers be clear and conspicuous, see the cases reviewed in Anderson v Douglas & Lomason Company 540 NW 2d 277 (1995) at 287–8. Terms incorporated by reference are discussed in 5.34–5.44.

38.

As to the timing, see Goldman Sachs JB Were Services Pty Ltd v Nikolich, note 14 above, at [280], [324]–[326].

39.

Goldman Sachs JB Were Services Pty Ltd v Nikolich, note 14 above, at [23] per Black CJ. Jessup J dissented in part on which terms were promissory but approached the matter on the same legal footing as Black CJ: see [293], [300] and [327] (on the importance of the signature) and at [298], [305]–[314] and [329] (on the promissory language). Marshall J determined the document was incorporated by reference, rather than by notice: see [120]–[125]; see also Transport Workers’ Union of Australia v K&S Freighters Pty Ltd [2010] FCA 1225 at [61]–[85].

40.

Cooper River School District v Traw 9 P 3d 280 (2000) at 284; R Lord, Williston on Contracts, 4th ed, Thomson Reuters, New York, 1990, at [4.7] (the relevant circumstances include whether ‘the parties have dealt with one another before … or if the custom in a particular location or trade suggests that an offer is intended’).

41.

Acher v Fujitsu Network Communications 354 F Supp 2d 26 (2004) at 37; see also Keays v J P Morgan Administrative Services Australia Limited, note 29 above, at [64].

42.

Campbell v General Dynamics Government Systems Corporation, note 29 above, at 556 (emails used widely within company, but not for significant alterations in the employment relationship); see also Edward Keller (Australia) Pty Ltd v Hennelly (1990) 35 IR 464 at 467 (employee present when minute passed purporting to alter his rights).

43.

See, for example, Gregory v Philip Morris Ltd (1987) 19 IR 258; (1987) 77 ALR 79 at 89 (a point not disturbed on appeal). Job advertisements are rarely offers, but their terms may still have contractual importance: see, for example, McClelland v Northern Ireland General Health Services Board [1957] 2 All ER 129 at 134 (advertisement of ‘permanent and pensionable’ position) and Pedersen v Camden London Borough Council [1981] ICR 674 at 678–9.

44.

Birch v University of Liverpool [1985] ICR 470; Cobb-Alvarez v Union Pacific Corporation 962 F Supp 1049 (1997) (employee applied for voluntary redundancy scheme); McKernan v Fraser (1932) 46 CLR 343 at 358–9 (selecting seaman for hire was preliminary to the formation of a contract); Price v Rhondda Urban District Council [1923] 2 Ch 372 at 385 (circular to employees promulgating a policy) and Tooheys Pty Ltd v Blinkhorn [2008] NSWSC 499 at [44]ff (contract formed on acceptance of redundancy packaged ‘outlined’ in attachment).

45.

McCreadie v Thomson and MacIntyre (Patternmakers) Limited, note 29 above. See also Ajax Cooke Pty Ltd v Nugent, note 29 above (publication of new policy on notice board was offer of a

unilateral contract to all employees). 46.

Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256.

47.

M Furmston and G Tolhurst, Contract Formation, note 10 above, pp 24–5; as to notice of an oral offer see Tomczynski v JK Millar Ltd [1976] ITR 127 (an offer is not received if an employee, hard of hearing, did not hear the oral offer made to him); Smith v Brown Bayley Steels Limited (1973) 8 ITR 606 and Taylor v Laird (1856) 25 LJ Ex 329 at 332 and P Winfield, ‘Some Aspects of Offer and Acceptance’ (1939) 55 LQR 499 at 503–4.

48.

Maxwell v Walter Howard Designs Limited [1975] IRLR 77 at [15]–[18] and McCreadie v Thomson and MacIntyre (Patternmakers) Limited, note 29 above. As to the effect of posting an offer, see the dicta in Henthorn v Fraser [1892] 2 Ch 27 at 37 (the postal acceptance rule discussed in 3.24 does not apply to offers).

49.

Marsden v Fairey Stainless Limited [1979] IRLR 103 and McCreadie v Thomson and MacIntyre (Patternmakers) Limited, note 29 above.

50.

Francis v South Sydney District Rugby League Football Club Ltd [2002] FCA 1306 at [181] per Lindgren J; see also Powell v Lee (1908) 99 LT 284 (acceptance by employer of employee’s offer of employment was not effective as it was not communicated by the employer or its agent); Van Heerden v Total Petroleum 942 F Supp 468 (1996) at 472 (whether Immigration Service was agent for the employer).

51.

G Dal Pont, Law of Agency, LexisNexis Butterworths, Sydney, 2001, Ch 5.

52.

Unauthorised offers were considered in Price v Rhondda Urban District Council, note 44 above, and Chapman v Commissioner, Australian Federal Police (1983) 50 ACTR 23 at 33.

53.

See 3.83.

54.

Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537 at 551; 41 ALR 441 at 451–2.

55.

M Furmston and G Tolhurst, Contract Formation, note 10 above, pp 17–18; Pennsylvania Company v Wilmington Trust Company 166 A 2d 726 (1960). See also 3.53 on agreements ‘subject to contract’.

56.

See, for example, Wishart v National Association of Citizen Advice Bureaux [1990] ICR 794 and Ardito v City of Providence 263 F Supp 2d 358 (2003).

57.

Condessa v WorkCover [2001] SAWCT 85. See also Kennedy v Australasian Coal and Shale Employee’s Federation (No 2) (1983) 9 IR 355 at 359–60 and on appeal at Turner v Australasian Coal and Shale Employee’s Federation (1984) 6 FCR 177 at 182; 55 ALR 635 at 638; 9 IR 87 at 90 and Richards v Hayward (1841) 2 Man & G 574; 133 ER 875 (employment subject to a condition that there be approval of the servant by a government body).

58.

A series of issues touching on the termination of offers with tangential relevance to employment contracts are discussed in M Furmston and G Tolhurst, Contract Formation, note 10 above, the relationship between the revocation of an offer and option contracts (pp 44–6), firm offers (pp 46–52), estoppel by representation (pp 52–6), the revocation of an offer to form a unilateral contract (pp 59–68), and the termination of the offer by lapse of time (pp 28–31).

59.

Carter v Hyde (1923) 33 CLR 115 at 121, 124; E Kahn, ‘Some Mysteries of Offer and Acceptance’ (1955) 72 SALJ 246. See also 13.33.

60.

M Furmston and G Tolhurst, Contract Formation, note 10 above, pp 38–41.

61.

Cooper River School District v Traw, note 40 above, at 284.

62.

Byrne and Co v Leon Van Tienhoven and Co (1880) 5 CPD 344; Henthorn v Fraser, note 48

above, at 37; S Gardner, ‘Trashing with Trollope: A Deconstruction of the Postal Rules in Contract’, note 5 above, at 175–6. The postal acceptance rule is discussed in 3.24. 63.

Goldsborough Mort & Co Ltd v Quinn (1910) 10 CLR 674 at 678–9 and 691–2.

64.

Sarker v South Tees Acute Hospitals NHS Trust [1997] IRLR 328 and Sperandio v Lynch (2006) 160 IR 360; [2006] FCA 1648 at [59]–[65]. A similar revocation was unsuccessfully attempted in Turner v Australasian Coal and Shale Employee’s Federation, note 57 above.

65.

Tooheys Pty Ltd v Blinkhorn, note 44 above, at [44].

66.

See 10.10.

67.

Shaw v Greenwich Anesthesiology Associates PC, 137 F Supp 2d 48 (2001) at 63 and Hardin v First Cash Financial Services Inc 465 F3d 470 (2006) at 477.

68.

Frank R Wolstenholme Pty Ltd v Davis, note 28 above.

69.

The Homeward Bound Extended Goldmining Co Ltd v Anderson (1884) NZLR 3 SC 266 (acceptance requesting alteration in commencement date was a query, not a counter-offer).

70.

M Furmston and G Tolhurst, Contract Formation, note 10 above, pp 36–7; see 3.5.

71.

Brimcombe v Entex Chemical (SA) Pty Ltd [1986] AILR at [490] and Bruce v AWB Pty Ltd (2000) 100 IR 129; [2000] FCA 594.

72.

R v Clarke (1927) 40 CLR 227 at 233; see 3.3–3.4 concerning agreement in the absence of an identifiable offer or acceptance.

73.

See 3.12.

74.

Stoelwinder v Southern Health, note 11 above, at [12]; cf the prerogative power of the Crown to compel subjects to serve in any offices it thinks fit and refuse to accept resignations discussed in 11.4.

75.

Manchester Diocesan Council for Education v Commercial & General Investments Ltd [1969] 3 All ER 1593 at 1599; [1970] 1 WLR 241 at 247–8. On the time for the commencement of the performance of the contract, see 9.55.

76.

R v Clarke, note 72 above; Mooney v Williams (1905) 3 CLR 1 at 7 and Smith v Union of Icelandic Fish Producers Ltd (2004) NSSC 145 (no acceptance when the employer promised to accept employee’s offer of employment, subject to the approval of the board of directors ‘which will not be a problem’).

77.

Brangier v Rosenthal 337 F 2d 952 (1964) at 954, quoted in D Greig and J Davis, The Law of Contract, Law Book Company, Sydney, 1987, p 277; Campbell v University of Adelaide (2006) 150 IR 225; [2006] SASC 92 at [162] (employee accepted the offer of a redundancy payment, even though he complained that he was entitled to a greater package).

78.

M Furmston and G Tolhurst, Contract Formation, note 10 above, pp 89–96; see 3.5.

79.

Carter v Hyde, note 59 above, at 121–2, 126 and 133 and Cavallari v Premier Refrigeration (1952) 85 CLR 20 at 26–7.

80.

Davies v Smith (1938) 12 ALJ 258; Appleby v Johnson (1874) LR 9 CP 158; Frank R Wolstenholme Pty Ltd v Davis, note 28 above (discussed in 3.18); Humphris-Clark v Lazaridis [2010] NSWSC 318 at [34]–[38] (agreed terms of settlement did not include clause governing confidentiality and including those terms in a proposed deed was a deviation from the agreed terms) and Gray v Chart Air Pty Ltd [2011] FMCA 218 at [25].

81.

Campbell v University of Adelaide, note 77 above, at [153]–[161]. See also Tooheys Pty Ltd v

Blinkhorn, note 44 above, at [77]–[85]. 82.

R v Clarke, note 72 above, at 231–2, 240 and 242 and Tinn v Hoffmann & Co (1873) 29 LT 271 at 278. See also A Hudson, ‘Retraction of Letters of Acceptance’ (1966) 82 LQR 169.

83.

R v Clarke, note 72 above, at 235 and Dalgety Australia Ltd v Harris [1977] 1 NSWLR 324 at 328–9.

84.

Francis v South Sydney District Rugby League Football Club Ltd, note 50 above, at [244]–[249].

85.

R v Clarke, note 72 above, at 232, 242 and 244 and Port Jackson Stevedoring Pty Ltd v Salmond & Spraggon (Australia) Pty Ltd (1978) 139 CLR 231 at 271–2; 18 ALR 333 at 365–6 (a point unaffected by the appeal at (1980) 144 CLR 300).

86.

Tallerman and Co Pty Ltd v Nathan’s Merchandise (Vic) Pty Ltd (1957) 98 CLR 93 at 111. See also Birrell v Australian National Airlines Commission (1984) 5 FCR 447 at 457–8; 9 IR 101 at 113–4; Vermeesch v Harvey World Travel Franchises Pty Ltd (1997) 74 IR 364 at 365 (employee signed offer but did not communicate the acceptance to the employer) and Tooheys Pty Ltd v Blinkhorn, note 44 above, at [77]–[85] (offer withdrawn before employee delivered a signed acceptance).

87.

See 3.25–3.27.

88.

Powell v Lee, note 50 above; see also Blair v Western Mutual Benefit Association [1972] 4 WWR 284 (no offer when the board passed a resolution conferring a retirement benefit and the stenographer later typed up the minutes of the meeting but was otherwise not informed of the offer).

89.

George Hudson Holdings Limited v Rudder (1973) 128 CLR 387 at 395, 398 and 402 and Walker v Salomon Smith Barney Securities Pty Limited (2003) 140 IR 433; [2003] FCA 1099 at [155] and [167].

90.

Wettern Electric Ltd v Welsh Development Agency [1983] QB 796 at 802; 2 All ER 629 at 633 and Gilbert J McCaul (Aust) Pty Ltd v Pitt Club Ltd (1959) SR (NSW) 122 at 124.

91.

Tooheys Pty Ltd v Blinkhorn, note 44 above, at [81] (redundancy offer that called for written acceptance could be accepted orally); George Hudson Holdings Limited v Rudder, note 89 above (offer called for a postal acceptance but the hand delivery of the acceptance was held to be a valid); Tinn v Hoffmann & Co, note 82 above (acceptance delivered quicker than the postal reply called for) and P Winfield, ‘Some Aspects of Offer and Acceptance’, note 47 above, at 516.

92.

Walker v Salomon Smith Barney Securities Pty Limited, note 89 above, at [155]–[169]; Bowman v Durham Holdings Pty Ltd (1973) 131 CLR 8 at 18 and 20 and E Kahn, ‘Some Mysteries of Offer and Acceptance’, note 59 above, at 268–9. The silence of the employer in the face of a purported acceptance, followed by an act to the detriment of the employee, may give rise to a promissory estoppel: see Waltons Stores (Interstate) Limited v Maher (1988) 164 CLR 387; 76 ALR 513.

93.

See E Peel, Treitel’s Law of Contract, note 1 above, pp 35–9 and Carlill v Carbolic Smoke Ball Company, note 46 above, at 262–3 and 280.

94.

Robophone Facilities v Blank [1966] 3 All ER 128; 1 WLR 1428 and C Miller, ‘Felthouse v Bindley Re-Visited’ (1972) 35 Mod LR 489.

95.

Brinkibon Ltd v Stahag Stahl und Stahlwarenhandels-Gesellschaft mbH [1983] 2 AC 34 at 41–2; [1982] 1 All ER 293 at 295–6.

96.

Entores Limited v Miles Far East Corporation [1955] 2 QB 327; 2 All ER 493; WA Dewhurst & Co Pty Ltd v Cawrse [1960] VR 278 and B Coote, ‘The Instantaneous Transmission of

Acceptances’ (1971) 4 NZULR 331. On the position of emails and other forms of electronic communications, see Olivaylle Pty Ltd v Flottweg AG (No 4) (2009) 255 ALR 632; [2009] FCA 522 at [25]; L O’Shea and K Skeahan, ‘Acceptance of Offers by E-Mail: How Far Should the Postal Acceptance Rule Extend?’ (1997) 13 QUTLJ 246, and Electronic Transactions Act 1999 (Cth) s 14 and the almost identical Electronic Transactions Acts in each of the states. 97.

Adams v Lidsell (1818) 1 B & Ald 68. See also Campbell v University of Adelaide, note 77 above, at [153]–[160]. Sometimes a letter is not a valid means of accepting the offer: see Henthorn v Fraser, note 48 above, at 33; Birrell v Australian National Airlines Commission, note 86 above, FCR at 457–8; IR at 113–14 and the cases discussed in L O’Shea and K Skeahan, note 96 above, pp 248–50.

98.

C Pannam, ‘Postal Regulation 289 and Acceptance of an Offer by Post’ (1960) 2 MULR 388; R Samek, ‘A Reassessment of the Present Rule Relating to Postal Acceptance’ (1961) 35 ALJ 38; S Gardner, ‘Trashing with Trollope: A Deconstruction of the Postal Rules in Contract’ note 5 above and A Nussbaum, ‘Comparative Aspects of the Anglo-American Offer and Acceptance Doctrine’ (1936) 36 Col LR 920.

99.

Household Fire Insurance v Grant (1879) LR 4 Ex D 216; A Hudson, ‘Retraction of Letters of Acceptance’, note 82 above; E Kahn, ‘Some Mysteries of Offer and Acceptance’, note 59 above, at 257–61 and E Peel, Treitel’s Law of Contract, note 1 above, pp 31–2.

100. WA Dewhurst & Co Pty Ltd v Cawrse, note 96 above; P Nygh, Conflict of Laws in Australia, note 28 above, pp 372–3; Helmers v Coppins, note 28 above; Starr v Douglas, note 28 above and Frank R Wolstenholme Pty Ltd v Davis, note 28 above (discussed in 3.18). 101. Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 at 534. 102. Allied Marine Transport v Vale do Rio Doce Navegacao SA [1985] 1 WLR 925 at 937; 2 All ER 796 at 805. 103. Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd, note 101 above, at 534–5 and Irons v Merchant Capital Ltd (1994) 116 FLR 204 at 206–7. 104. Armstrong Whitworth Rolls Limited v Mustard [1971] 1 All ER 598. 105. Tooheys Pty Ltd v Blinkhorn, note 44 above, at [69]–[76]. 106. Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd, note 101 above, at 535 per McHugh JA and 528–30 per Kirby P and Australian Salaried Medical Officers’ Federation (New South Wales) v Sydney South West Area Health Service (No 2), note 11 above, at [50]: see 3.5. 107. Shipton v Cardiff Corporation (1918) 67 LJKB 51; see also McCreadie v Thomson & MacIntyre (Patternmakers) Ltd, note 29 above, at 1137. 108. See, for example, McCreadie v Thomson & MacIntyre (Patternmakers) Ltd, note 29 above, at 1137; Roe v Naylor (No 1), note 33 above; Noahs Ltd v Glover (NSWCA, Mahoney, Clarke and Meagher JJA, No 40590/94, 20 September 1995, unreported) and Condessa v WorkCover, note 57 above. This is probably simply an illustration of the general principle that the performance of a contract after the receipt of an offer is a means of accepting the offer by conduct: Brogden v Metropolitan Railway Company (1877) 2 AC 666. 109. R v Inhabitants of Lyth (1793) 5 TR 327; 101 ER 183; more recently see Brackenridge v Toyota Motor Corporation Australia Ltd (1997) 142 ALR 99; 64 IR 77. 110. Ubsdell v Paterson [1973] ICR 86 at 88; Cartin v Botley Garages Limited [1973] ICR 144 and Ridgeway International Ltd v McCullum [1998] NSWSC 151. 111. Hill v Develcon Electronics Ltd (1991) 37 CCEL 19; McKay v Abbey Vale Estate Pty Ltd [2003]

WASC 2 at [10]–[18] and Bowen v Canadian Tire Corporation (1991) 35 CCEL 113. 112. Building Workers’ Industrial Union of Australia v Odco Pty Ltd (1991) 29 FCR 104 at 114; 99 ALR 735 at 743. 113. In the context of variation, see 6.26–6.35. The doctrine of consideration is so neglected in employment law that in 2001 the Journal of Contract Law published an article titled ‘The Doctrine of Consideration: Dead or Alive in English Employment Contracts?’ (2001) 17 JCL 193. 114. See, for example, Inland Revenue Commissioners v Duke of Westminster [1936] AC 1; [1935] All ER 259. 115. On the formalities associated with the execution of deeds, see Justice Needham, ‘Deeds– Formalities’ (1985) 1 ABR 3; on equity’s approach to the enforcement of deeds unsupported by consideration, see I Spry, The Principles of Equitable Remedies, 6th ed, Lawbook Company, Sydney, 2001, pp 56–9 and 15.12 and on an application of those principles in employment law; see Dome Resources NL v Silver (2008) 72 NSWLR 693; [2008] NSWCA 322 at [54]. 116. The employer must also provide consideration. This section focuses on the consideration provided by the employee as it is the subject of most of the cases in this field. 117. Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd [1915] AC 847 at 855. On practical benefits as consideration to support a variation, see 6.34. 118. Beaton v McDivitt (1987) 13 NSWLR 162 at 168 and 180–2; Australian Woollen Mills Pty Ltd v Commonwealth, note 25 above, at 456–7; Woolworths v Kelly (1991) 22 NSWLR 189 at 206–7 and Teen Ranch Pty Ltd v Brown (1995) 87 IR 308 at 311–2 (the food and board provided to a volunteer was not done in consideration of the volunteer’s work). 119. See 3.36–3.37. 120. Browning v Crumlin Valley Collieries [1926] 1 KB 522 at 528 per Greer J; see also the different analysis in B Hough and A Spowart-Taylor, ‘Theories of Termination in Contracts of Employment: The Scylla and Charybdis’ (2003) 19 JCL 134 at 147–9. 121. In some cases the consideration may consist of other benefits, such as the provision of training; see Under Water Welders & Repairers Ltd v Street [1967] FSR 194 at 201–2. On the obligation to provide work see 8.37–8.47. 122. The principle is discussed in 14.35–14.37. 123. Dietrich v Dare (1980) 30 ALR 407 at 411 per Gibbs, Wilson and Mason JJ. See also Mortimer v Beckett [1920] 1 Ch 571. 124. Devonald v Rosser & Sons [1906] KB 728; see 8.43. 125. Pilkington v Scott (1846) 15 M & W 657; 153 ER 1014 and Re Bailey (1854) 3 E & B 607; 118 ER 1269 at 1273–4. 126. Capital Aircraft Services Pty Ltd v Brolin (2006) 154 IR 352; [2006] ACTSC 80 at [27]. This issue arose more often prior to the decision in Emmens v Elderton (1853) IV HLC 624; 10 ER 606 where the meaning of the obligation to serve was clarified: see Lees v Whitcomb (1828) 5 Bing 34; 130 ER 972; Young v Timmins (1831) Cr & J 331; 148 ER 1446; Sykes v Dixon (1839) 9 Ad & E 693; 112 ER 1374; Williamson v Taylor (1843) 5 QB 175; 114 ER 1214 and Dunn v Sayles (1844) 5 QB 685; 114 ER 1408. 127. A O’Donnell, ‘“Non-Standard” Workers in Australia: Counts and Controversies’ (2004) 17 AJLL 89 at 97–105; J Tham, ‘Towards an Understanding of Standard Employment Relationships under

Australian Labour Law’ (2007) 20 AJLL 123. 128. Melrose Farm Pty Ltd v Milward (2008) 175 IR 455; [2008] WASCA 175 at [103]– [107]; Doyle v Sydney Steel Co Ltd (1936) 56 CLR 545 at 551, 555 and 565; Hamzy v Tricon International Restaurants (2001) 115 FCR 78; 111 IR 198; [2001] FCA 1589 at [38]; Australasian Meat Industry Employees Union v Sunland Enterprises Pty Ltd (1988) 24 IR 467 at 473; RydeEastwood Leagues Club Ltd v Taylor (1994) 56 IR 385; Reed v Blue Line Cruisers Ltd (1996) 73 IR 420 at 425. See also James v London Borough of Greenwich [2008] IRLR 302 at [49] and Carmichael v National Power [1999] 4 All ER 897 at 901–2; [1999] ICR 1226 at 1231. 129. Nethermere (St Neots) Ltd v Taverna and Gardiner [1984] ICR 612 at 623 per Stephenson LJ; Carmichael v National Power, note 128 above, All ER at 901–2; ICR at 1231; Brook Street Bureau (UK) Ltd v Dacas [2004] IRLR 358 at [49] and [64]; Forstaff Pty Ltd v Chief Commissioner of State Revenue (2004) 144 IR 1; [2004] NSWSC 573 at [79]–[91] and [104]. 130. Capital Aircraft Services Pty Ltd v Brolin, note 126 above, at [27]; Mortimer v Beckett, note 123 above (boxing manager was under no obligation to do anything for the boxer); Nethermere (St Neots) Ltd v Taverna and Gardiner, note 129 above, at 623–5 and 634–5; see also Building Workers’ Industrial Union of Australia v Odco Pty Ltd, note 112 above, FCR at 115; ALR at 744–5; Sgobino v The State of South Australia (1987) 46 SASR 292 at 303 and Forstaff Pty Ltd v Chief Commissioner of State Revenue, note 129 above, at [90]–[91]. 131. James v London Borough of Greenwich, note 128 above, at [49]. 132. See 3.56–3.58. 133. See the cases at note 129; Accident Compensation Commission v Odco Pty Ltd (1990) 34 IR 297; 95 ALR 641 at 646–7. 134. Some of these alternatives are discussed in M Freedland, The Personal Employment Contract, Oxford University Press, Oxford, 2003, pp 109–11 and 478; A Davies, ‘The Contract for Intermittent Employment’ (2007) 36 ILJ 102 at 106–11; Carmichael v National Power, note 128 above, All ER at 901–2; ICR at 1231; Swift Placements Pty Ltd v WorkCover Authority (NSW) (2000) 96 IR 69 at [53] and Accident Compensation Commission v Odco Pty Ltd, note 133 above, ALR at 646–7. 135. Thomas v Thomas (1842) 2 QB 851 at 859; 114 ER 330 and Ryan v Textile Clothing and Footwear Union of Australia, note 14 above, at 269–70. 136. See the criticisms of this definition of consideration in K Shatwell, ‘The Doctrine of Consideration in the Modern Law’ (1954) 1 Syd LR 289 at 305–6. The role of practical benefits acquired by the employer as consideration is examined in 6.34. 137. Currie v Misa (1875) LR 10 Ex 153 at 162. 138. See, for example, Burke v Royal Liverpool Hospital NHS Trust [1997] ICR 730 at 738; Ryan v Textile Clothing and Footwear Union of Australia, note 14 above, at 270–1; Woolworths v Kelly, note 118 above, at 206 and Rundell v Bedford (1998) 28 ACSR 66 at 74. 139. Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd, note 117 above. 140. See 2.47–2.49 on the movement of consideration in tripartite employment arrangements. 141. Shipton v Cardiff Corporation, note 107 above. 142. Ryan v Textile Clothing and Footwear Union of Australia, note 14 above, at 269–72. If the union, employee and the employer all parties to the contract and the union and employee are joint promisees then consideration need not move from both the union and the employee: Coulls v Bagot’s Executor and Trustee Co Ltd (1967) 119 CLR 460 at 478–9, 486 and 493; see further at

5.105. 143. See 6.34. 144. See 4.22–4.31 on illegality. 145. Wyatt v Kreglinger and Fernau [1933] 1 KB 793; see also Harrington v Victoria Graving Dock Company (1878) 3 QBD 549 at 551 (promise to bribe employee was unenforceable at the suit of employee). 146. SST Consulting Services Pty Ltd v Rieson (2006) 225 CLR 516; 228 ALR 417 at [46]; on severability of illegal consideration, see E Peel, Treitel’s Law of Contract, note 1 above, pp 556– 72 and 16.20. 147. Marshall v NM Financial Management Ltd [1997] ICR 1065 (benefit to employee supported by both legal service and an illegal restraint of trade clause); Sadler v Imperial Life Assurance Co [1988] IRLR 388 and Beckett Investment Management Group Ltd v Hall [2007] ICR 1539 at 1551–2. 148. See Woolworths v Kelly, note 118 above, at 193–4. 149. Gaumont-British Picture Corporation v Alexander [1936] 2 All ER 1686 at 1691. 150. Blomley v Ryan (1956) 99 CLR 362 at 405; see 3.44 and 4.2–4.14. 151. Placer Development Ltd v The Commonwealth (1969) 121 CLR 353 at 356–7 and 359–60; Redeemer Baptist School Limited v Glossop, note 24 above, at [89] and Loftus v Roberts (1902) 18 TLR 532 at 534; see further 3.56–3.58. 152. Ryan v Textile Clothing and Footwear Union of Australia, note 14 above, at 249–50; this issue overlaps with the need for certainty in the contract and is considered further below in 3.51. 153. White v Bluett (1853) 23 LJ (NS) Ex 36. 154. Lee v GEC Plessey Telecommunications [1993] IRLR 383 at 389 per Connell J; see also Ryan v Textile Clothing and Footwear Union of Australia, note 14 above, at 269–71 and United Firefighters’ Union of Australia v Metropolitan Fire and Emergency Services Board (2003) 198 ALR 466; 123 IR 86 at [77]–[80]. 155. This is the rule in Stilk v Myrick (1809) 2 Camp 317; 170 ER 851; Betts v Brisbane Gas Co Ltd [1978] Qd R 429 at 431; Price v Rhondda Urban District Council, note 44 above, at 386; Woolworths v Kelly, note 118 above; Swain v West (Butchers) Limited [1936] 3 All ER 261; Phillips v Ellinson Brothers Pty Ltd (1941) 65 CLR 221 at 234 and 236. See also Dome Resources NL v Silver, note 115 above, at [54]–[68] (fresh consideration provided by a managing director who agreed to continue to serve as a non-executive director in exchange for increased retirement benefits) and Webb v Suntown Enterprises WA Pty Ltd (No 2) [2009] FMCA 12 at [97] (employer’s gift of a horse float to employee ‘in gratitude and as a bonus for services already rendered’). The role of past consideration in variations of the contract is discussed in 6.26–6.34. 156. Re Casey’s Patents [1892] 1 Ch 104 at 115–6; see also Pao On v Lau Yiu Long [1979] 3 All ER 65; [1980] AC 614 at 629 and S Stoljar, ‘The Consideration of Request’ (1966) 5 MULR 314, and J Carter et al, Contract Law in Australia, 5th ed, LexisNexis Butterworths, Sydney, 2007, pp 122–3. 157. Ermogenous v Greek Orthodox Community of SA Inc, note 12 above, at [24]–[25] and Australian Woollen Mills Pty Ltd v Commonwealth, note 25 above, at 457. 158. Edwards v Skyways Ltd [1964] 1 All ER 494 at 500; Orion Insurance Co PLC v Sphere Drake

Insurance PLC [1992] 1 Lloyd’s Rep 239 at 263; Shahid v Australasian College of Dermatologists (2008) 168 FCR 46; 248 ALR 267 at [211] and H Lucke, ‘The Intention to Create Legal Relations’ (1970) 3 Adel LR 419 at 421; see further on the onus, Ermogenous, note 12 above, at [24]–[25] and Toyota Motor Corp Aust Ltd v Ken Morgan Motors Pty Ltd, note 9 above, at 177. 159. Ermogenous, note 12 above, at [24]–[25] per Gaudron, McHugh, Hayne and Callinan JJ (footnotes deleted). 160. Damevski v Guidice, note 7 above, at [92]; Shahid v Australasian College of Dermatologists, note 158 above, at [211]; Helmos Enterprises Pty Ltd v Jaylor Pty Ltd [2005] NSWCA 235 at [48] and Atco Controls Pty Ltd (in liq) v Newtronics Pty Ltd [2008] VSCA 238 at [68]. 161. Jones v Padavatton [1969] 2 All ER 616 at 620–1; see also M Furmston and G Tolhurst, Contract Formation, note 10 above, p 285 and M Keyes and K Burns, ‘Contract and Family: Whither Intention?’ (2002) 26 MULR 577 at 579. 162. Ermogenous, note 12 above, at [25]. 163. For example, Schaefer v Schuhmann [1972] AC 572; 1 All ER 621 (housekeeper agreed to forego wages in exchange for an interest in the employer’s house on his death), overruled on a different point in Barns v Barns (2003) 214 CLR 169; 196 ALR 65. 164. See, for example, X v Mid Sussex Citizens Advice Bureau [2010] ICR 423; Eldridge v Kemblawarra Child and Family Centre [1999] NSWCA 395; Evard v Alma Mater Society of the University of British Columbia (1995) 14 CCEL (2d) 124 and Teen Ranch Pty Ltd v Brown, note 118 above. 165. Dietrich v Dare, note 123 above, and 3.30–3.33. 166. Ermogenous, note 12 above, at [24]–[25]; cf Matthew 6:24. 167. Ermogenous, note 12 above, at [26]; see also Percy v Church of Scotland Board of National Mission [2006] 2 AC 28; 4 All ER 1354 (Minister of the Church of Scotland) and New Testament Church of God v Stewart [2008] ICR 282. 168. Edmonds v Lawson [2000] QB 501 at 514 per Lord Bingham CJ, Pill and Hale LJJ; Rowe v Capital Territory Health Commission (1982) 39 ALR 39 at 51; 1 IR 133 at 140 (aff’d (1982) 2 IR 27 at 28–9); Dietrich v Dare, note 123 above (a person engaged to work for a trial period); Pacesetter Homes Pty Ltd v Australian Builders Labourers Federated Union of Workers (WA Branch) (1994) 57 IR 44 (long-term unemployed worker engaged principally for the purposes of instruction, not the performance of work) and Wiltshire Police Authority v Wynn [1981] 1 QB 95 (junior constables engaged to be trained and to see how the job is done). 169. Dunk v George Waller & Sons Ltd [1970] 2 QB 163; 2 All ER 630; Edmonds v Lawson, note 168 above, at 516–8; Waterman v Fryer [1922] 1 KB 499 at 506; Parish of St Pancras, Middlesex v Parish of Clapham, Surrey (1860) 2 El & El 742; 121 ER 278. For the purposes of applying industrial legislation the High Court has consistently proceeded on the basis that apprentices are employees: Whybrow’s case (1910) 11 CLR 1; John Heine & Son Ltd v Pickard (1921) 29 CLR 592; Fletcher v A H McDonald & Co Pty Ltd (1927) 39 CLR 174 and Culbert v Clyde Engineering Co Ltd (1936) 54 CLR 544. 170. M&P Steelcraft Ltd v Ellis [2008] ICR 578 (rehabilitation of a prisoner); Wiltshire Police Authority v Wynn, note 168 above and Pacesetter Homes Pty Ltd v Australian Builders Labourers Federated Union of Workers (WA Branch), note 168 above. 171. See 3.5.

172. Ermogenous, note 12 above, at [25]; Ryan v Textile Clothing and Footwear Union of Australia, note 14 above, at 265; see also McHugh JA’s exposition of the principles and their development in Air Great Lakes Pty Ltd v KS Easter Pty Ltd, note 14 above, at 335–8. 173. Australian Salaried Medical Officers’ Federation (New South Wales) v Sydney South West Area Health Service (No 2), note 11 above, at 342 and Damevski v Guidice, note 7 above, at [78]–[88]. 174. Ermogenous, note 12 above, at [24]–[25] and South Australia v The Commonwealth (1962) 108 CLR 130 at 154. 175. A Stewart and J Riley, ‘Working around Work Choices: Collective Bargaining and the Common Law’ (2007) 31 MULR 903 at 923. 176. Kemp v Lewis [1914] 3 KB 543 (it is not clear whether the court’s finding was based on a lack of intention to enter into contractual relations or a lack of mutuality, or both); Teen Ranch Pty Ltd v Brown, note 118 above; cf Re McGee (1992) 41 IR 27 at 37–9 (payment in slabs of beer to an employee); Andreevski v Western Institute Student Union Inc (1994) 58 IR 195; Williamson v Suncorp Metway Insurance Limited [2008] QSC 244; Coward v Motor Insurers’ Bureau [1962] 1 All ER 531; [1963] 1 QB 259 and Jakobkiewicz v Dickson Catering Pty Ltd [2002] ACTSC 107 at [21]. 177. Jakobkiewicz v Dickson Catering Pty Ltd, note 176 above, at [21]. On the need for certainty to form a contract, see 3.47. 178. Rose & Frank & Co v Crompton & Bros Ltd & Brittains Ltd [1923] 2 KB 261 at 288. 179. Moir v JP Porter Co Ltd (1979) 33 NSR (2d) 674. See also Yousif v Commonwealth Bank of Australia, note 11 above, at [92]; Parke v Daily News Ltd [1962] Ch 927; [1962] 2 All ER 929 at 938 and M&P Steelcraft Ltd v Ellis, note 170 above. 180. Malloch v McCorquodale (1991) SLT (Sh Ct) 39. 181. Edwards v Skyways Ltd, note 158 above, at 500; see also the cases discussed in W Holmes, ‘Freedom Not to Contract’ (1986) 60 Tul LR 751 at 757–75. 182. M Furmston and G Tolhurst, note 10 above, p 298; see also 3.11. 183. Ermogenous, note 12 above, at [24]–[25] and Australian Woollen Mills Pty Ltd v Commonwealth, note 25 above, at 457. 184. Ireland v Johnson (2009) 189 IR 135; [2009] WASCA 162 at [41]–[47]; M&P Steelcraft Ltd v Ellis, note 170 above and C Fenwick, ‘Regulating Prisoners’ Labour in Australia: A Preliminary View’ (2003) 16 AJLL 284. 185. This issue was referred to in Australasian Meat Industry Employees’ Union v G & K O’Connor Pty Ltd (2000) 100 IR 383; [2000] FCA 627 at [51] and South Australia v Day (2000) 78 SASR 270; [2000] SASC 451 at [27]. 186. Air Great Lakes Pty Ltd v KS Easter Pty Ltd, note 14 above, at 338; see 5.24. 187. Raward v Vine Nominees Pty Ltd, note 11 above, at [76] and Australian Energy Ltd v Lennard Oil NL [1986] 2 Qd R 216. 188. Raward v Vine Nominees Pty Ltd, note 11 above, at [76]. 189. See M Moir, ‘Discretion, Good Faith and Employer Control Over Executive Remuneration’ (2011) 24 AJLL 121 at 123–7. 190. Thorby v Goldberg (1964) 112 CLR 597 at 607. 191. See K Mason et al, Mason & Carter’s Restitution Law in Australia, 2nd ed, LexisNexis

Butterworths, Sydney, 2008, pp 372–81; Way v Latilla [1937] 3 All ER 759; Re Galaxy Media Pty Ltd (2001) 167 FLR 149; 39 ACSR 483; [2001] NSWSC 917 at [63]–[73] (aff’d sub nom Walker v Andrew (2002) 116 IR 380; [2002] NSWCA 214 at [42] and [45]) and Powell v Braun [1954] 1 WLR 401 at 405; 1 All ER 484 at 486. 192. For example, Goldburg v Shell Oil Co of Australia Ltd (1990) 95 ALR 711 at 712 (inessential aspects of remuneration and commencement date were left blank in the written contract) and Richards v Hayward, note 57 above (inessential to agree on whether the employee’s berth on the vessel was to be on the starboard side). 193. Cf 10.14. 194. Pagnan SpA v Feed Products Ltd [1987] 2 Lloyd’s Rep 601 at 619 per Lloyd LJ; Raward v Vine Nominees Pty Ltd, note 11 above, at [90]–[99]; J Carter et al, ‘When Three Just Isn’t Enough: the Fourth Category of the “Subject to Contract” Cases’ (2004) 20 JCL 156 and D McLauchlan, ‘In Defence of the Fourth Category of Preliminary Agreements: Or Are There Only Two?’ (2005) 21 JCL 287 at 288–91. 195. Wilton v Coal & Allied Operations Pty Ltd (2007) 161 FCR 300; 162 IR 264; [2007] FCA 725 at [128] and [184]; Spark v Generex Pharmaceuticals Inc (1999) 48 CCEL (2d) 272; Goldburg v Shell Oil Co of Australia Ltd, note 192 above, at 712 (contract held to be formed though inessential aspects of remuneration and commencement date were not agreed). Where the employment is governed by an Act such as the Fair Work Act that establishes minimum wages for the employee then it may not be necessary to agree on wages; see, though uttered in a different context, Byrne v Australian Airlines Limited (1995) 185 CLR 410 at 441; 131 ALR 422 at 427. 196. For example, Spark v Generex Pharmaceuticals Inc, note 195 above (agreement on all aspects other than entitlement to share options); Biotechnology Australia Pty Ltd v Pace (1988) 15 NSWLR 130 (agreement on salary, but not share equity scheme) and Lau v Bob Jane T-Marts Pty Ltd [2004] VSC 69 at [58]–[62] (agreement on salary, but not the share of profit). 197. Note Australian & International Pilots Association v Qantas Airways Limited (2008) 179 IR 200; [2008] FCA 1972 at [79] and Ryan v Textile Clothing and Footwear Union of Australia, note 14 above, at 249–50 concerning the effect of a failure to agree on the duration of an alleged contract between the union and employer. 198. Toyota Motor Corp v Ken Morgan Motors, note 9 above, at 130; TV Shopping Network Ltd v Scutt (1998) 43 IPR 451 at 456; York Air Conditioning and Refrigeration Pty Ltd v The Commonwealth (1949) 80 CLR 11 at 26; Ipex Software Services Pty Ltd v Hosking [2000] VSCA 239 at [56] and Pepe v Platypus Asset Management Pty Ltd [2010] VSC 603 at [198]–[202]. 199. Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 at 548; Raward v Vine Nominees Pty Ltd, note 11 above, at [96]– [99]; Vroon BV v Foster’s Brewing Group Ltd, note 9 above, at 71; British Bank for Foreign Trade v Novinex Ltd [1949] 1 KB 623 at 629–30; 1 All ER 155 at 158; Tito v Waddell (No 2) [1977] Ch 106 at 314–5; 3 All ER 129 at 301–2 and Macdonald v Australian Wool Innovation Ltd [2005] FCA 105 at [222]–[227]. 200. As a matter of principle, it is doubtful whether this principle only applies where ‘the parties … have been put to great expense in implementing [the contract]’: see British Bank for Foreign Trade v Novinex Ltd, note 199 above, KB at 629–30; All ER at 158 (where the commission was wholly executed and the plaintiff was put to virtually no expense in executing it). 201. F&G Sykes (Wessex) Ltd v Fine Fare Ltd [1967] 1 Lloyd’s Rep 53 at 57; Hillas and Co Ltd v Arcos Ltd [1932] All ER Rep 494; Macdonald v Australian Wool Innovation Ltd, note 199 above, at [213]; see also Australian & International Pilots Association v Qantas Airways

Limited, note 197 above, at [80] (whether it is permissible to imply terms) and G Tolhurst and J Carter, ‘The New Law on Implied Terms’ (1996) 11 JCL 76 at 88. 202. York Air Conditioning and Refrigeration Pty Ltd v The Commonwealth, note 198 above, at 53; Re Galaxy Media Pty Ltd, note 191 above, at [63]–[73] (aff’d sub nom Walker v Andrew (2002) 116 IR 380; [2002] NSWCA 214); Turner v Bladin (1951) 82 CLR 463 at 471 and Raward v Vine Nominees Pty Ltd, note 11 above, at [96]–[99]. 203. Ipex Software Services Pty Ltd v Hosking, note 198 above, at [62]; Terrex Resources NL v Magnet Petroleum Pty Ltd (1988) 98 FLR 328 at 345 and Australian & International Pilots Association v Qantas Airways Limited, note 197 above, at [82]–[92]. 204. Biotechnology Australia Pty Ltd v Pace, note 196 above, at 136 and 138; Pepe v Platypus Asset Management Pty Ltd, note 198 above, at [218] and Kulkarni v Milton Keynes Hospital NHS Trust, note 18 above, at [58]–[60]; B Coote, ‘Contract Formation and the Implication of Terms’ (1993) 6 JCL 51 and M Furmston and G Tolhurst, Contract Formation, note 10 above, pp 313–4. 205. Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd, note 199 above, at 548. 206. See H Lucke, ‘Illusory, Vague and Uncertain Contractual Terms’ (1977) 6 Adel LR 1 at 10–11 and the cases at notes 199 and 202. 207. Ryan v Textile Clothing and Footwear Union of Australia, note 14 above, at 249–50 and 273; see 3.38. 208. See the cases at note 177 and 3.51. 209. Ryan v Textile Clothing and Footwear Union of Australia, note 14 above, at 249–50. 210. Upper Hunter County District Council v Australian Chilling & Freezing Co Ltd (1968) 118 CLR 429 at 437; G Scammell & Nephew Ltd v Ouston [1941] AC 251 at 268 and M Furmston and G Tolhurst, Contract Formation, note 10 above, pp 316–7. 211. Upper Hunter County District Council v Australian Chilling & Freezing Co Ltd, note 210 above, at 437 and Meehan v Jones (1982) 149 CLR 571 at 578; 42 ALR 463 at 466–7. 212. Tooheys Pty Ltd v Blinkhorn, note 44 above. 213. H Lucke, ‘Illusory, Vague and Uncertain Contractual Terms’ (1977) 6 Adel LR 1 at 6. 214. Upper Hunter County District Council v Australian Chilling & Freezing Co Ltd, note 210 above, at 437; Thorby v Goldberg, note 190 above, at 607 and Toyota Motor Corp v Ken Morgan Motors, note 9 above, at 200. 215. Hanna v OAMPS Insurance Brokers Ltd (2010) 202 IR 420; [2010] NSWCA 267 at [13] and Seven Network (Operations) Limited v Warburton (No 2) [2011] NSWSC 386 at [37]. 216. See cases at notes 198, 199 and 202. 217. Biotechnology Australia Pty Ltd v Pace, note 196 above, at 136. 218. See, for example, Ryan v Textile Clothing and Footwear Union of Australia, note 14 above, at 249–50. 219. Ipex Software Services Pty Ltd v Hosking, note 198 above, at [65] and Tito v Waddell (No 2), note 199 above, Ch at 322–3; All ER at 308. 220. Thorby v Goldberg, note 190 above, at 607; Australian and New Zealand Banking Group Ltd v Frost Holdings Pty Ltd [1989] VR 695 at 700 and Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd (1982) 149 CLR 600 at 604; 43 ALR 68 at 70–1; see 3.51.

221. See 3.48. 222. M Furmston and G Tolhurst, Contract Formation, note 10 above, pp 325–31; J Carter et al, note 194 above, and D McLauchlan, note 194 above, pp 288–91. 223. United Group Rail Services Ltd v Rail Corporation of New South Wales (2009) 74 NSWLR 618 at 626–41 and the authorities discussed therein; Coal Cliff Collieries Pty Ltd v Sijehama Pty Ltd (1991) 24 NSWLR 1; Walford v Miles [1992] 2 AC 128; 1 All ER 453 and Trawl Industries of Australia Pty Ltd v Effem Foods Pty Ltd (1992) 27 NSWLR 326. 224. Biotechnology Australia Pty Ltd v Pace, note 196 above (agreement to establish a share equity scheme); Lau v Bob Jane T-Marts Pty Ltd, note 196 above, at [58]–[62] (agreement for an unspecified share of profits); Pepe v Platypus Asset Management Pty Ltd, note 198 above, at [202]–[215] (agreement to offer an equity participation opportunity in the future); Bowen v Canadian Tire Corp, note 111 above (employee’s terms were never recorded in writing or approved by board as contemplated by parties) and Judge v Crown Leisure Ltd [2005] IRLR 823 at [23] (a promise to grant a pay rise ‘eventually’ or ‘in due course’ was too vague to amount to a binding contractual promise). 225. Silverbrook Research Pty Ltd v Lindley [2010] NSWCA 357 at [2]–[4] per Allsop P, Beazley JA agreeing: see 14.57. 226. Way v Latilla, note 191 above; Re Galaxy Media Pty Ltd, note 191 above, at [63]–[73] (aff’d sub nom Walker v Andrew (2002) 116 IR 380; [2002] NSWCA 214 at [42] and [45]) and Powell v Braun, note 191 above, WLR at 405–6; All ER at 486. 227. Masters v Cameron (1954) 91 CLR 354 at 360–2. There is an ongoing debate about whether there is a fourth category or the categories are simply points on a continuum: see B Walker, ‘The Fourth Category of Masters v Cameron’ (2004) 25 JCL 108; J Carter et al, note 194 above and D McLauchlan, note 194 above. Cases on the ‘fourth category’ include Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622 at 628 and Southern Cross Financial Group (Newcastle) Pty Ltd v Rodrigues (2005) 66 IPR 166; [2005] NSWSC 621 at [45]–[46]. 228. Masters v Cameron, note 227 above, at 360–2; Smartworld Enterprises Pty Ltd v Nyman (2008) 173 IR 93 at [30]–[35] and the articles referred to in note 227. See also the objective approach in contract that is discussed in 3.5. 229. Sinclair, Scott & Company Ltd v Naughton (1929) 43 CLR 310 at 317; Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd, note 227 above, at 634–5 and Smartworld Enterprises Pty Ltd v Nyman, note 228 above, at [30]. 230. This is the first category discussed in Masters v Cameron, note 227 above, at 360–2; see Macdonald v Australian Wool Innovation Ltd, note 199 above, at [217] and Magee v Channel Seventynine Ltd (1976) 15 OR (2d) 185 (employment contract held to be binding when the parties negotiated agreement and then agreed to ‘get the whole game down on paper’). 231. In such a case, a proposal to add additional terms in the formal document may be either a repudiation of the contract that is formed, or an offer to vary: see, for example, Humphris-Clark v Lazaridis, note 80 above, at [34]–[38] (agreed terms of settlement did not include clause governing confidentiality) and Gray v Chart Air Pty Ltd, note 80 above, at [25]. 232. This is the second category discussed in Masters v Cameron, note 227 above, at 360–2. 233. This is the third category of arrangements discussed in Masters v Cameron, note 227 above, at 360–2: see, for example, Employment Advocate v Barclay Mowlem Construction Ltd [2005] FCA 16 at [32]–[36]; Smartworld Enterprises Pty Ltd v Nyman, note 228 above, at [30]–[35] and

Locnere Pty Ltd v Jakk’s Bagel and Bread Co Pty Ltd [2003] NSWSC 1123 at [10]. 234. K Mason et al, Mason & Carter’s Restitution Law in Australia, note 191 above, pp 378–93. 235. See 3.5. The distinction between a novation and a variation is discussed in 6.38. 236. See H Lucke, ‘Arrangements Preliminary to Formal Contracts’ (1967) 3 Adel LR 46 at 48–50. 237. See 3.48. 238. Biotechnology Australia Pty Ltd v Pace (1988) 15 NSWLR 130; Lau v Bob Jane T-Marts Pty Ltd, note 196 above, at [58]–[62] and Way v Latilla, note 191 above. 239. Godecke v Kirwan (1973) 129 CLR 629 at 647; 1 ALR 457 at 469–70; see also Sweet & Maxwell Ltd v Universal News Services Ltd [1964] 2 QB 699 at 733; Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193; [2000] FCA 889 at [111] and M Howard, ‘Terms to be Supplied by a Contracting Party’ (1982) 56 ALJ 77. 240. Riverwood International Australia Pty Ltd v McCormick, note 239 above, at [111] and Kofi Sunkersette Obu v A Strauss and Co Ltd [1951] AC 243 at 250. 241. Placer Development Ltd v Commonwealth, note 151 above, at 356–7 and 359–60 and Loftus v Roberts, note 151 above, at 534. 242. Loftus v Roberts, note 151 above. 243. Taylor v Brewer (1813) 1 M & S 290; 105 ER 108; Placer Development Ltd v Commonwealth, note 151 above, at 360; Roberts v Smith (1859) 4 H & N 315; 157 ER 861; Kofi Sunkersette Obu v A Strauss and Co Ltd, note 240 above, at 250 and Redeemer Baptist School Limited v Glossop, note 24 above, at [89]. 244. Godecke v Kirwan, note 239 above, CLR at 642 and 647; ALR at 465–6 and 469–70. 245. See 8.28. 246. Lewandowski v Mead Carney-BCA Pty Ltd [1973] 2 NSWLR 640 at 643; Ipex Software Services Pty Ltd v Hosking, note 198 above, at [69]–[72] and Biotechnology Australia Pty Ltd v Pace, note 196 above, at 136. 247. Lewandowski v Mead Carney-BCA Pty Ltd, note 246 above, at 643. 248. Ajax Insurance Co Ltd v Smith (1962) 79 WN (NSW) 83 (employee engaged ‘at the award wage or better as arranged’); Stillwell Trucks Pty Ltd v Nectar Brook Investments Pty Ltd (1993) 115 ALR 294 (aff’d (1993) 12 ASCR 334) (employee required to transfer shares on termination of employment). 249. Raward v Vine Nominees Pty Ltd, note 11 above, at [96]–[99]; see 8.28 on the duty of good faith. 250. See 3.49. 251. Australian & International Pilots Association v Qantas Airways Limited, note 197 above, at [79]; B Coote, ‘Contract Formation and the Implication of Terms’ (1993) 6 JCL 51. On the implication of terms in law and fact, see 5.48 and 5.53. 252. See Kaye v Cooke’s (Finsbury) Ltd [1974] ICR 65 and 9.55. 253. Byrne v Australian Airlines Limited, note 195 above, CLR at 423 and 452; ALR at 428 and 451 and 11.48. 254. See Ajax Insurance Co Ltd v Smith, note 248 above (employee engaged ‘at the award wage or better as arranged’); Republic of Nauru v Reid, note 36 above, where the Court of Appeal enforced a term that provided for remuneration for pilots at ‘Ansett plus 3%’.

255. Biotechnology Australia Pty Ltd v Pace, note 196 above, at 136. 256. Biotechnology Australia Pty Ltd v Pace, note 196 above, at 137–8 per Kirby P; Orica Investments Pty Ltd v William McCartney [2007] NSWSC 645 at [305]; cf Powell v Braun, note 191 above, WLR at 406 and 407; All ER at 486–7 (an agreement to pay a bonus required employer to pay a reasonable sum). 257. King v Ivanhoe Gold Corporation Limited (1908) 7 CLR 617 (promise of ‘handsome remuneration’); Southern Cross Financial Group (Newcastle) Pty Ltd v Rodrigues, note 227 above, at [45]–[48] (promise to sell goodwill at fair value); National Coal Board v Galley [1958] 1 WLR 16 at 25; 1 All ER 91 at 97 (agreement to work such days as are reasonably required); Jewry v Busk (1814) 5 Taunt 302 (promise to give a handsome present); Edwards v Skyways Ltd, note 158 above, at 501 (agreement to make a redundancy payment ‘approximating to’ a certain sum); Powell v Braun, note 191 above, WLR at 406 and 407; All ER at 486–7 and Ikin v Cox Bros (Aust) Ltd (1929) 25 Tas LR 1. 258. Hawthorn Football Club Ltd v Harding [1988] VR 49 at 55; Godecke v Kirwan, note 239 above, CLR at 645; ALR at 468 and Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd, note 220 above, CLR at 606; ALR at 70–1 (appointment of arbitrator to fix rates). 259. See cases at note 257 and Sudbrook Trading Estate Ltd v Eggleton [1983] 1 AC 444 at 487; [1982] 3 All ER 1 at 12–3; see also 3.49 concerning giving effect to the parties’ intentions. 260. Life Assurance Co of Australia v Phillips (1925) 36 CLR 60 at 72; Whitlock v Brew (1968) 118 CLR 445 at 461; Humphries v Proprietors ‘Surfers Palms North’ Group Title Plan 1955 (1994) 179 CLR 597 at 621–2; 121 ALR 1 at 20. For example, in Kulkarni v Milton Keynes Hospital NHS Trust, note 18 above, at [58]–[60] the disciplinary procedure granted the right to representation, subject to an irredeemably vague qualification. On severance, see 16.20. The Restraint of Trade Act 1976 (NSW) does not affect the invalidity of a restraint of trade by reason of uncertainty: Austra Tanks Pty Ltd v Running [1982] 2 NSWLR 840 at 843. 261. See M Furmston and G Tolhurst, Contract Formation, note 10 above, pp 347–50. 262. Wilson v Darling Island Stevedoring & Lighterage Co Ltd (1956) 95 CLR 43 at 56, 67 and 80 and Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 165 CLR 107 at 114–5 and 143; 80 ALR 574 at 578 and 587–8. 263. Trident, note 262 above, CLR at 143; ALR at 587–8. 264. A common example is when the employer directs the employee to perform work for a related corporation or lends the services of the employee to a client: see Attorney-General (NSW) v Perpetual Trustee Co (Ltd) (1952) 85 CLR 237 at 299–300; see further at 2.47 and 6.45. 265. See 3.34–3.35. The principles of privity and consideration, though related, are conceptually different: Trident, note 262 above, CLR at 115–6, 127, 164; ALR at 579, 587–8 and 615 and Winterton Constructions Pty Ltd v Hambros Australia Ltd (1991) 101 ALR 363 at 367. 266. Coulls v Bagot’s Executor and Trustee Co Ltd, note 142 above, at 494 and 498; Trident, note 262 above, CLR at 115–6 and 164; ALR at 579 and 615. 267. Trident, note 262 above, CLR at 123–4 and 172; ALR at 585 and 621. Insurance Contracts Act 1984 (Cth) s 48 grants the right to certain third parties to enforce the contract of insurance, for example Cavill Power Products Pty Ltd v Royle (1991) 42 IR 229. 268. Coulls v Bagot’s Executor and Trustee Co Ltd, note 142 above; Beswick v Beswick [1968] AC 58; [1967] 2 All ER 1197 and Winterton Constructions Pty Ltd v Hambros Australia Ltd, note 265 above, at 368.

269. See the Law of Property Act 2000 (NT) s 56; Property Law Act 1974 (Qld) s 55 and Property Law Act 1969 (WA) s 11. 270. J Heydon and M Leeming, Jacobs’ Law of Trusts in Australia, 7th ed, LexisNexis Butterworths, Sydney, 2006, pp 22–4 and the cases discussed therein. See also Marks v CCH Australia Ltd [1999] 3 VR 513 at 525–33 (employee unsuccessfully argued that he was the beneficiary of a trust consisting of a promise by a funder to continue to fund his position with the employer). 271. Trident, note 262 above, CLR at 120–1 and 146–9; ALR at 582 and 602–5; see also A Stewart and J Riley, ‘Working around Work Choices: Collective Bargaining and the Common Law’ (2007) 31 MULR 903 at 924–7. 272. See the approaches taken by the dissentients, Barwick CJ and Windeyer J, in Coulls v Bagot’s Executor and Trustee Co Ltd (1967) 119 CLR 460. 273. See Coulls v Bagot’s Executor and Trustee Co Ltd, note 142 above, at 501–2; Trident, note 262 above, CLR at 118–9; ALR at 581. 274. Coulls v Bagot’s Executor and Trustee Co Ltd, note 142 above, at 478 and 503; Trident, note 262 above, CLR at 119–20; ALR at 582; Beswick v Beswick, note 268 above, AC at 90, 91 and 102 and Dome Resources NL v Silver, note 115 above, at [54]. 275. Cathels v Commissioner of Stamp Duties [1962] SR (NSW) 455 and Re Stapleton-Bretherton, Weld Blundell v Stapleton-Bretherton [1941] 3 All ER 5 at 8. 276. Re Schebsman, Ex parte The Official Receiver [1943] 2 All ER 387. 277. See G Tolhurst, The Assignment of Contractual Rights, Hart Publishing, Oxford, 2006, pp 62–3. The assignment of contractual rights is discussed further in 6.40–6.45. 278. Except in the unusual cases where the agency agreement, properly construed, provides otherwise: G Dal Pont, Law of Agency, note 51 above, at [23.10]. 279. Scott v Davis (2000) 204 CLR 333; 175 ALR 217 at [227]–[228]; G Dal Pont, note 51 above, at [19.1]; see further 3.82. 280. Northside Developments Pty Ltd v Registrar-General (1990) 170 CLR 146 at 172; 93 ALR 385 at 401–2 and Polkinghorne v Holland (1934) 51 CLR 143 at 157; see further 3.79–3.81. 281. In NSW, see the Industrial Relations (Child Employment) Act 2006 (NSW) discussed in J Riley, ‘Employing Minors in New South Wales: The Industrial Relations (Child Employment) Act 2006 (NSW)’ (2007) 20 AJLL 295. 282. Proform Sports Management Ltd v Proactive Sports Management Ltd [2007] 1 All ER 542 at 554–6 (concerning Wayne Rooney, ‘a footballing phenomenon who needs no introduction, even to this judge’); Doyle v White City Stadium Ltd [1935] 1 KB 110 (contract with Jack Doyle, The Gorgeous Gael, who was contender for the British Boxing Championship and later a Hollywood actor and accomplished tenor) and Chaplin v Leslie Frewin (Publishers) Ltd [1966] Ch 71; [1965] 3 All ER 764 (contract with the estranged son of Charlie Chaplin). 283. McLaughlin v Darcy (1918) 18 SR (NSW) 585 (a contract for necessaries for a boxer to pay a solicitor to acquire a passport) and Proform Sports Management Ltd v Proactive Sports Management Ltd, note 282 above (not a contract for necessaries for Wayne Rooney to engage a sports agent). 284. Proform Sports Management Ltd v Proactive Sports Management Ltd, note 282 above, at 555. 285. De Francesco v Barnum (1890) 45 Ch D 430 and Bromley v Smith [1909] 2 KB 235; cf Sir WC Leng & Co Ltd v Andrews [1909] 1 Ch 763 at 769–70.

286. Johnson v Clark [1908] 1 Ch 303 at 312. 287. Masterman-Lister v Jewell [2003] 3 All ER 162; 1 WLR 1511 at [57]–[59] and Gibbons v Wright (1954) 91 CLR 423 at 438; on the relationship between a plea of non est factum and incapacity, see Ford bht Watkinson v Perpetual Trustees Victoria Ltd (2009) 75 NSWLR 42; 257 ALR 658; [2009] NSWCA 186. 288. Masterman-Lister v Jewell, note 287 above, at [57]–[58]. 289. Baldwyn v Smith [1900] 1 Ch 588 and City Bank of Sydney v McLaughlin (1909) 9 CLR 615. 290. Imperial Loan Co Ltd v Stone [1892] 1 QB 599 at 602–3 and Gibbons v Wright, note 287 above, at 441. 291. Hart v O’Connor [1985] AC 1000; 2 All ER 880; on unconscionable conduct, see Blomley v Ryan, note 150 above (rescission of a contract by an old, uneducated, man affected by years of abuse of alcohol) and 4.10. 292. Corporations Act 2001 (Cth) s 124(1). For no liability mining companies, see s 112(3) and (5). As to the capacity of registered organisations, see Jumbunna Coal Mine NL v Victorian Coal Miners Association (1908) 6 CLR 309. 293. Corporations Act s 125. As to contracts entered into by the employee with notice of the lack of power, see ANZ Executors and Trustees Co Ltd v Qintex Australia Ltd [1991] 2 Qd R 360. 294. Australian Mutual Provident Society v Chaplin (1978) 18 ALR 385 at 392 and 2.3. 295. Baroness Wenlock v River Dee Co (1883) 36 Ch D 675n at 685n. Where the transaction is beyond the objects of the chartered corporation a member of the corporation can take steps to ensure compliance with the objects but the validity of the transaction is not impugned: Jenkin v Pharmaceutical Society of Great Britain [1921] 1 Ch 392 and Dickson v Pharmaceutical Society of Great Britain [1967] Ch 708; 2 All ER 558 (aff’d [1970] AC 403; [1968] 2 All ER 686). 296. Taudevin v Egis Consulting Australia Pty Ltd (No 1) (2001) 131 IR 124 at 144–5; Ansett Transport Industries (Operations) Pty Ltd v Commonwealth (1977) 139 CLR 54 at 113; 17 ALR 513 at 562–3; G Winterton, Parliament, the Executive and the Governor-General, Melbourne University Press, Australia, 1983, pp 44–7; E Campbell, ‘Commonwealth Contracts’ (1970) 44 ALJ 14; N Seddon, Government Contracts: Federal State and Local, 3rd ed, Federation Press, Sydney, 2004, pp 48–66. 297. New South Wales v Bardolph (1934) 52 CLR 455 at 496, 503, 508 and 518. 298. New South Wales v Bardolph, note 297 above, at 496 and N Seddon, Government Contracts: Federal State and Local, note 296 above, pp 49–50. See also Re Australian Industrial Relations Commission and Arends; Ex parte Commonwealth of Australia (2005) 145 FCR 277; 145 IR 418; [2005] FCAFC 204 at [48]. 299. Australian Railways Union v Victorian Railway Commissioners (1930) 44 CLR 319 at 353 and Commonwealth v Crothall Hospital Services (Aust) Ltd (1981) 54 FLR 439 at 453–4; 36 ALR 567 at 580–1. 300. New South Wales v Bardolph, note 297 above, at 474, 482, 498, 502, 508, 514–6; Commonwealth v Crothall Hospital Services (Aust) Ltd, note 299 above, FLR at 453–4; ALR at 580–1 and Maguire v Simpson (1977) 139 CLR 362 at 388; 18 ALR 469 at 487. 301. Coogee Esplanade Surf Motel Pty Ltd v Commonwealth (1983) 50 ALR 363 at 378–80; Minister for Youth and Community Services v Health and Research Employees’ Association of Australia, NSW Branch (1987) 10 NSWLR 543 at 556–8; New South Wales v Bardolph, note 297 above, at 502 and N Seddon, Government Contracts: Federal State and Local, note 296 above, pp 102–4.

The principles governing agency are discussed in 3.70–3.85. 302. Botany Municipal Council v Federal Airports Corp (1992) 175 CLR 453; 109 ALR 321; Bonanza Creek Gold Mining Co Ltd v R [1916] 1 AC 566; Re Honey Pool of Western Australia (No 2) (1988) 14 ACLR 621 and Darkinjung Pty Ltd v Darkinjung Local Aboriginal Land Council (2006) 203 FLR 394; [2006] NSWSC 1008. 303. See N Seddon, Government Contracts: Federal State and Local, note 296 above, pp 70–1 and A Davies, ‘Ultra Vires Problems in Government Contracts’ (2006) 122 LQR 98 at 100–2. 304. Darvall v North Sydney Brick and Tile Co Ltd (1988) 14 ACLR 474 at 483; N Seddon, Government Contracts: Federal State and Local, note 296 above, pp 70–1 and K Mason et al, Mason and Carter’s Restitution Law in Australia, note 191 above, pp 358–9. 305. Kibby v Registrar of Titles [1999] 1 VR 861 at 870–2; Trustees of the Roman Catholic Church v Ellis (2007) 70 NSWLR 565; [2007] NSWCA 117 at [47] and Watson v J & AG Johnson Ltd (1936) 55 CLR 63 at 67 and 68. 306. Trustees of the Roman Catholic Church v Ellis, note 305 above, at [47]; Re Independent Schools’ Staff Association (ACT); Ex parte Hubert (1986) 65 ALR 673 at 675; Watson v J & AG Johnson Ltd, note 305 above and Leahy v Attorney-General (NSW) (1959) 101 CLR 611 at 619. 307. Carlton Cricket & Football Social Club v Joseph [1970] VR 487 at 497; Freeman v McManus [1958] VR 15 at 21 and Peckham v Moore [1975] 1 NSWLR 353 at 362; see K Fletcher, NonProfit Associations, Law Book Company, Sydney, 1986, pp 107–14. 308. Trustees of the Roman Catholic Church v Ellis, note 305 above, at [49]–[51]; Re Independent Schools’ Staff Association (ACT); Ex parte Hubert, note 306 above, at 675; Bradley Egg Farm Ltd v Clifford [1943] 2 All ER 378 at 381 at 386; M & M Civil Engineering Pty Ltd v Sunshine Coast Turf Club [1987] 2 Qd R 401 at 405–7; Ward v Eltherington [1982] Qd R 561 at 565–6; Peckham v Moore, note 307 above, at 361 and 367, and 369–70 and K Fletcher, Non-Profit Associations, Law Book Company, Sydney, 1986, pp 113–24. 309. Trustees of the Roman Catholic Church v Ellis, note 305 above, at [51]; Re Falvey; Ex parte Goddard (1946) 46 SR (NSW) 289 at 296; Smith v Yarnold [1969] 2 NSWR 410 and Ward v Eltherington, note 308 above, at 565–6. 310. Peckham v Moore, note 307 above, at 361 and 367, and 369–70; note however Carlton Cricket & Football Social Club v Joseph, note 307 above and Freeman v McManus, note 307 above. 311. See Bailey v Victorian Soccer Federation [1976] VR 13; the Workplace Relations Act 1996 (Cth) and its predecessors contained a provision that an unincorporated club was an employer, but those provisions are no longer in force: see Re Independent Schools’ Staff Association (ACT); Ex parte Hubert, note 306 above, at 675 and Federated Liquor and Allied Trades Employees Union of Australasia v Ashton (1922) 17 CAR 748 at 752. 312. Peterson v Maloney (1951) 84 CLR 91 at 94; Scott v Davis, note 279 above, at [227]–[228]; G Dal Pont, Law of Agency, note 51 above, at [1.2]. 313. Jones v Bouffier (1911) 12 CLR 579 at 611 and Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co-op Assurance Co of Australia Ltd (1931) 46 CLR 41 at 50. 314. Minister for Youth and Community Services v Health and Research Employees’ Assn of Australia, NSW Branch, note 301 above, at 558. 315. Press v Mathers [1927] VLR 326 at 332 per Dixon AJ, referred to approvingly in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd, note 14 above, at [70]. 316. See 2.43. Indeed, from the reign of Edward IV the law of agency and the law of master and

servant have been intertwined: A Simpson, A History of the Common Law of Contract: The Rise of the Action of Assumpsit, Clarendon Press, Oxford, 1986, pp 553–7. 317. On actual and ostensible authority, see 3.75–3.78. 318. See 3.5 and F Reynolds, Bowstead and Reynolds on Agency, 18th ed, Sweet & Maxwell, London, 2006, pp 50–4. 319. Trident General Insurance Co Ltd v McNiece Bros Pty Ltd, note 262 above, CLR at 112–3; ALR at 577 and Ryan v Textile Clothing and Footwear Union of Australia, note 14 above, at 238–9. 320. International Paper Company v Spicer (1906) 4 CLR 739 at 745–6. 321. Christie v Permewen Wright and Co Ltd (1904) 1 CLR 693 at 700 per Griffiths CJ. 322. Vicarious performance of obligations is discussed in 9.53. 323. For example, some statutes require that a principal, and not the agent, sign a particular document: see Australasian Meat Industry Employees’ Union v RJ Gilbertson (Queensland) Pty Ltd (1988) 26 IR 237 at 242–5; McRae v Coulton (1986) 7 NSWLR 644 at 663–4; or a particular person perform certain human resource functions: Cuttler v Commissioner of the Queensland Police Service (2010) 198 IR 186; [2010] QSC 286 and Chapman v Commissioner, Australian Federal Police, note 52 above. 324. See E Campbell, ‘Ostensible Authority in Public Law’ (1999) 27 Fed LR 1; M Aronson and B Dyer, Judicial Review of Administrative Action, 2nd ed, LBC Information Services, Australia, 2000, pp 255–65. As to the somewhat difficult distinction between the power to delegate and the power to appoint an agent, see O’Reilly v Commissioners of the State Bank of Victoria (1983) 153 CLR 1; 44 ALR 27; E Campbell, above, pp 3–4; M Dixon, ‘Delegation, Agency and the Alter Ego Rule’ (1987) 11 Syd LR 326 and P Bayne, ‘Delegation, agency and just assisting’ (1988) 62 ALJ 721. 325. See, for example, Jones v Lee, note 31 above, at 316–7 and 318–9 and Crisp v Holden (1910) 54 SJ 784. 326. See, for example, Australian Transport Officers Federation v Roads and Traffic Authority of NSW (1989) 30 IR 187 at 193 (a union that is incapable in law of representing members cannot be an agent for those members). 327. Commonwealth Steamship Owners’ Association v Federated Seamen’s Union of Australasia (1923) 33 CLR 297 at 307 and 312 and Waterside Workers’ Federation of Australia v Burgess Brothers Ltd (1916) 21 CLR 129 at 138. 328. See, for example, Edwards v Skyways Ltd, note 158 above, and Harris v Richard Lawson Autologistics Ltd [2002] ICR 765 at 770–2 (shop steward had apparent or ostensible authority to agree to a variation of the employment contracts of members). 329. Ryan v Textile Clothing and Footwear Union of Australia, note 14 above, at 238–9 per Brooking JA, and at 266–9 per Hayne JA. 330. Ryan v Textile Clothing and Footwear Union of Australia, note 14 above, at 239–43 and 266–9 and Fratangelo v Secretary to the Department of Health & Community Services (VSC, Harper J, decision BC9803039, 3 July 1998, unreported) at 15–6. See Singh v British Steel Corp [1974] IRLR 131 (effect of collective agreement on the employment conditions of non-union members). 331. On this point in the United Kingdom, see Boxfoldia v National Graphical Association [1988] ICR 752 at 757–8; Harris v Richard Lawson Autologistics Ltd, note 328 above, at 769–70 and Burton Group Ltd v Smith [1977] IRLR 351 at 353: see futher at 5.110.

332. Australian Workers’ Union v Stegbar Australia Pty Ltd [2001] FCA 367 at [16] per Finkelstein J referring to the decision of Lord Denning in Heatons Transport (St Helens) Ltd v Transport & General Workers Union [1973] AC 15 at 46–7; [1972] 2 All ER 1214 at 1244 (rev’d on other grounds at [1972] 3 All ER 101); see also F Reynolds, Bowstead and Reynolds on Agency, note 318 above, p 54; note, however, Allison v Tenix Defence Pty Ltd (2002) 112 IR 171 at 181; see also Republic of Nauru v Reid, note 36 above, where the chief pilot had a dual role of agent for the employer in making representations to other pilots and as agent for the pilots in channelling complaints to the employer. 333. Concrete Constructions Pty Ltd v Plumbers & Gasfitters Employees Union (No 2) (1987) 15 FCR 64 at 78; 72 ALR 415 at 431; cf Construction, Forestry, Mining and Energy Union v Clarke (2007) 164 IR 299; [2007] FCAFC 87 at [24]. 334. Waterside Workers’ Federation of Australia v Burgess Brothers Ltd, note 327 above, at 134, 136; GTS Freight Management Pty Ltd v Transport Workers Union of Australia (1990) 33 IR 26 at 34–5 and Harris v Richard Lawson Autologistics Ltd, note 328 above, at 770–2. 335. Australian Workers’ Union v Stegbar Australia Pty Ltd, note 332 above, at [16]–[21]; see 3.75–3.78 and the cases discussing the role of delegates as agents in the receipt and provision of notice discussed in 11.11. 336. Netage Pty Ltd v Cantley (1985) 6 IPR 200 at 213 (‘it is never sufficient as a matter of law to say that X is agent one must look further and say X is agent to do what?’); Petersen v Moloney, note 312 above, at 94–5 and Knevitt v The Commonwealth of Australia [2009] NSWSC 1341 at [43] (HR recruiter had authority to find a suitable candidate, but not bind the employer to terms); see further 11.11. 337. Bonette v Woolworths Ltd (1937) 37 SR (NSW) 142 at 150. 338. Ostensible authority is discussed in 3.77. 339. Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480 at 502; 1 All ER 630 at 643–4; Northside Developments Pty Ltd v Registrar-General, note 280 above, CLR at 159 and 172; ALR at 391–2 and 401–2; Pacific Carriers Ltd v BNP Paribas, note 16 above, at [36] and Equiticorp Finance Ltd v Bank of New Zealand (1993) 32 NSWLR 50 at 132. 340. Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd, note 339 above, QB at 502; All ER at 643–4. 341. F Reynolds, Bowstead and Reynolds on Agency, note 318 above, p 120. 342. F Reynolds, Bowstead and Reynolds on Agency, note 318 above, pp 124–30; Bonette v Woolworths Ltd, note 337 above, at 150. 343. Hely-Hutchinson v Brayhead Ltd [1968] 1 QB 549 at 583; Australian Workers’ Union v Stegbar Australia Pty Ltd, note 332 above, at [20]; Tullett Prebon (Australia) Pty Ltd v Purcell [2009] NSWSC 1079 at [72] (aff’d [2010] NSWCA 150); as to the usual authority of a director, see Northside Developments Pty Ltd v Registrar-General, note 280 above, CLR at 205; ALR at 425; Brick and Pipe Industries Ltd v Occidental Life Nominees Pty Ltd [1992] 2 VR 279 at 303 and on appeal at [1992] 2 VR 279 at 361 and the Corporations Act s 198E; as to the usual authority of a chairperson, see the authorities reviewed in Jones v Queensland Tertiary Admissions Centre Ltd (No 2) (2010) 186 FCR 22; 196 IR 241; [2010] FCA 399 at [137]–[142]; AWA Ltd v Daniels (1992) 7 ACSR 759 at 867; Australian Securities and Investments Commission v Rich (2003) 44 ACSR 341 at [51]–[72]; Hughes v NM Superannuation Board Pty Ltd (1993) 48 IR 424. See also Francis v South Sydney District Rugby League Football Club Ltd, note 50 above, at [99]–[106] (coach had no usual authority to enter into contract with a player).

344. See G Dal Pont, Law of Agency, note 51 above, pp 189–92 and Australian Workers’ Union v Stegbar Australia Pty Ltd, note 332 above, at [20]; see further 5.32 and 5.66. 345. See Hely-Hutchinson v Brayhead Ltd, note 343 above, at 583–4, 587 and 592; Brick and Pipe Industries Ltd v Occidental Life Nominees Pty Ltd, note 343 above and Equiticorp Finance Ltd v Bank of New Zealand, note 339 above, at 133–4. 346. Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd, note 339 above, QB at 503; All ER at 644, adopted by the High Court in Northside Developments Pty Ltd v Registrar-General, note 280 above, CLR at 159 and 172; ALR at 391–2 and 401–2 and Pacific Carriers Ltd v BNP Paribas, note 16 above, at [36]. 347. Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd, note 339 above, QB at 502–3; All ER at 643–4 and Lysaght Bros & Co Ltd v Falk (1905) 2 CLR 421 at 431. 348. Pacific Carriers Ltd v BNP Paribas, note 16 above, at [36] and [38] per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ. 349. See, for example, the authority of the senior HR manager to resolve an industrial dispute in a late night phone call with a union secretary discussed in Fratangelo v Secretary to the Department of Health & Community Services, note 330 above, at 14–5 and Director of Posts and Telegraphs v Abbott (1974) 2 ALR 625; (1974) 22 FLR 157 at 170–1 (authority of clerk to contract with customer). 350. Pacific Carriers Ltd v BNP Paribas, note 16 above, at [36]–[44]. 351. E Campbell, ‘Ostensible Authority in Public Law’ (1999) 27 Fed LR 1; Attorney General for Ceylon v Silva [1953] AC 461 and Minister for Immigration, Local Government and Ethnic Affairs v Kurtovic (1990) 92 ALR 93 at 114–5; N Seddon, Government Contracts: Federal, State and Local, note 296 above, pp 103–4. 352. Pacific Carriers Ltd v BNP Paribas, note 16 above, at [36] per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ and Northside Developments Pty Ltd v Registrar-General, note 280 above, CLR at 159 and 187; ALR at 391–2 and 412. 353. Crabtree-Vickers Pty Ltd v Australian Direct Mail Advertising & Addressing Co Pty Ltd (1975) 133 CLR 72 at 78; 7 ALR 527 at 531–2 (senior employee with ostensible but not actual authority could not by his actions hold out that more junior employee had authority); criticised in F Reynolds, Bowstead and Reynolds on Agency, note 318 above, p 339. 354. Francis v South Sydney District Rugby League Football Club Ltd, note 50 above, at [106] per Lindgren J and Crabtree-Vickers Pty Ltd v Australian Direct Mail Advertising & Addressing Co Pty Ltd, note 353 above, CLR at 78; ALR at 531–2. 355. Lysaght Bros & Co Ltd v Falk, note 347 above, at 431–2 per Griffiths CJ; see also at 436–7 and 439 and Armagas Ltd v Mundogas SA [1986] AC 717 at 777; 2 All ER 385 at 389–90. 356. F Reynolds, Bowstead and Reynolds on Agency, note 318 above, p 362 and Combulk Pty Ltd v TNT Management Pty Ltd (1993) 113 ALR 214 at 222. 357. Re Construction, Forestry, Manufacturing and Engineering Union; Ex parte W J Deane & Son Pty Ltd (1994) 181 CLR 539 at 545; 125 ALR 16 at 20; Attorney-General v Wylde (1946) 47 SR (NSW) 99 at 109 and Blayney Abattoirs Pty Ltd v the State of New South Wales (1996) 86 IR 358 at 365–6 (aff’d (1996) 86 IR 369). 358. Hughes v NM Superannuation Board Pty Ltd, note 343 above, at 432 and Davison v Vickery’s Motors Ltd (1925) 37 CLR 1 at 21. 359. Howard Smith and Co Ltd v Varawa (1907) 5 CLR 68 at 82 and Jones v Hope (1880) 3 TLR 247

at 251. 360. Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1987) 8 NSWLR 270 at 276–7 (aff’d on other grounds (1988) 165 CLR 107; 80 ALR 574). 361. Trident General Insurance Co Ltd v McNiece Bros Pty Ltd, note 360 above, at 276 per McHugh JA (aff’d on other grounds (1988) 165 CLR 107; 80 ALR 574); Keighley Maxsted & Co v Durant [1901] AC 240 at 256 and Commissioner of State Revenue v Viewbank Properties Pty Ltd [2004] VSC 127; (2004) 55 ATR 501 at [50]. 362. Re Portuguese Consolidated Copper Mines Ltd (1890) 45 Ch D 16 at 31 and 34; Life Savers (A’asia) Ltd v Frigmobile Pty Ltd [1983] 1 NSWLR 431 at 438 and Hughes v NM Superannuation Board Pty Ltd, note 343 above, at 433. 363. See G Dal Pont, Law of Agency, note 51 above, pp 124–8; Furey v Civil Service Association of WA (Inc) (1999) 93 IR 349 at 357. 364. Taylor v Smith (1926) 38 CLR 48 at 54, 59, 60 and 62. 365. R v Watling; Ex parte Northern Residential Support Group Incorporated (1999) 93 IR 79; [1999] TASSC 99 at [11] per Evans J (‘A primary aspect of the concept of ratification is the validation of an invalid action. It is only invalid acts which require ratification’). 366. Vickery v Woods (1952) 85 CLR 336 at 343; Black v Smallwood (1966) 117 CLR 52 at 63 and Boston Deep Sea Fishing and Ice Co Ltd v Farnham [1957] 1 WLR 1051; 3 All ER 204 (cannot ratify a contract that would have been illegal if immediately ratified). 367. Re Construction, Forestry, Mining and Energy Union; Ex parte W J Deane & Son Pty Ltd, note 357 above, CLR at 545; ALR at 20 per Mason CJ, Dawson and McHugh JJ and Corporation of the City of Burnside v Municipal Officers’ Association of Australia (1985) 10 IR 313 at 316 (ratification of unauthorised proceedings commenced in a court). 368. Re Construction, Forestry, Mining and Energy Union; Ex parte W J Deane & Son Pty Ltd, note 357 above, CLR at 545–6; ALR at 20–1 and Hughes v NM Superannuation Board Pty Ltd, note 343 above, at 433. 369. Hughes v NM Superannuation Board Pty Ltd, note 343 above, at 433. 370. Dudley Buildings Pty Ltd v Rose (1933) 49 CLR 84 at 94; Natal Land and Colonisation Co v Pauline Colliery & Development Syndicate [1904] AC 120 at 126 and Vickery v Woods, note 366 above, at 344–5 and 348–9; the company can, however, make a new contract incorporating the terms of the old. 371. Commissioner of State Revenue v Viewbank Properties Pty Ltd, note 361 above, at [50]. 372. R v Watling; Ex parte Northern Residential Support Group Incorporated, note 365 above, at [11]–[12]. 373. As to the meaning of disclosed and undisclosed principals, see 3.84–3.85. The remainder of this paragraph only deals with disclosed principals. 374. There are some limited exceptions to this rule applying when the terms of the contract, or the custom of the trade, also make the agent a party: F Reynolds, Bowstead and Reynolds on Agency, note 318 above, pp 333–4. 375. Scott v Davis, note 279 above, at [227]–[228]; see further 3.67–3.69. 376. Railway Commissioners of New South Wales v Orton (1922) 30 CLR 422 at 425–6 (the Railway Commissioners, as agents for the state of NSW, were not liable to pay wages under an award binding on the state) and Netage Pty Ltd v Cantley, note 336 above, at 212–3.

377. Northside Developments Pty Ltd v Registrar-General, note 280 above, CLR at 172; ALR at 401 and Re Construction, Forestry, Mining and Energy Union; Ex parte W J Deane & Son Pty Ltd, note 357 above, CLR at 545; ALR at 20. 378. Chapman v Commissioner, Australian Federal Police, note 52 above, at 33; see also Price v Rhondda Urban District Council, note 44 above, at 376–7 (no authority to offer to vary the contract) and Francis v South Sydney District Rugby League Football Club Ltd, note 50 above, at [99]–[106]. 379. Leggo v Brown & Dureau Ltd (1923) 32 CLR 95 at 106; see generally T Faulkner, ‘Breach of an Agent’s Warranty of Authority: An Altogether Anomalous Cause of Action’ (2000) 74 ALJ 465 and G Dal Pont, Law of Agency, note 51 above, pp 686–95; F Reynolds, Bowstead and Reynolds on Agency, note 318 above, pp 538–53. 380. Dunn v R [1896] 1 QB 116. 381. Dunn v MacDonald [1897] 1 QB 401 at 405–6 (aff’d [1897] 1 QB 555). See also Sita Qld Pty Ltd v State of Queensland (2000) 102 IR 238; [2000] FCA 1077 at [5] and Australian William E Simon Graduate School of Business Administration Incorporated v Minister Administering the National Parks and Wildlife Act (1974) (NSW) (1994) 51 FCR 243. 382. F Reynolds, Bowstead and Reynolds on Agency, note 318 above, pp 457–9. 383. Scott v Davis, note 279 above, at [34]–[35]; Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co-operative Assurance Co of Australia Ltd, note 313 above, at 48; Cornwall v Rowan (2004) 90 SASR 269; [2004] SASC 384 at [477]–[487] and GTS Freight Management Pty Ltd v Transport Workers Union of Australia, note 334 above, at 34–5. 384. On the liability of the principal for the loss or injury caused by the tort of its agent when the wrongful act amounts to a breach by the principal of a non-delegable duty personal to itself, see Scott v Davis, note 279 above, at [33]–[34] and F Reynolds, Bowstead and Reynolds on Agency, note 318 above, p 461. 385. Evenco Pty Ltd v Australian Building Construction Employees & Builders Labourers Federation (Qld Branch) [2001] 2 Qd R 118; [2000] QCA 108 at [6]–[7], [92]–[108] and Waterside Workers’ Federation of Australia v Burgess Brothers Ltd, note 327 above, at 134. 386. Minister for Youth and Community Services v Health and Research Employees’ Assn of Australia, NSW Branch, note 301 above, at 558. 387. Marsh & McLennan Pty Ltd v Stanyers Transport Pty Ltd [1994] 2 VR 232 at 244 and Carminco Gold & Resources Ltd v Findlay & Co Stockbrokers (Underwriters) Pty Ltd (2007) 243 ALR 472; [2007] FCAFC 194 at [1] and [22]–[23]. 388. See Siu Yin Kwan v Eastern Insurance Co Ltd [1994] 2 AC 199 at 207; 1 All ER 213 at 219 and Carminco Gold & Resources Ltd v Findlay & Co Stockbrokers (Underwriters) Pty Ltd, note 387 above, at [1] and [22]–[23]. 389. Siu Yin Kwan v Eastern Insurance Co Ltd, note 388 above, AC at 207; All ER at 219. 390. Trident General Insurance Co Ltd v McNiece Bros Pty Ltd, note 360 above, at 276 per McHugh JA (aff’d on other grounds (1988) 165 CLR 107; 80 ALR 574); Keighley Maxsted & Co v Durant, note 361 above, at 256 and Commissioner of State Revenue v Viewbank Properties Pty Ltd, note 361 above, at [50]. 391. Gothard v Davey, note 11 above, at [232]–[238]. See also Matar v Neutral Bay Foodhall (1996) 73 IR 112 at 116 and Finance Sector Union of Australia v Commonwealth Bank of Australia (2005) 147 FCR 158; 223 ALR 695; 146 IR 37 at [127]–[141] (employees resigned from former

employment and transferred to new, related subsidiary that was not an agent for former employer). 392. Siu Yin Kwan v Eastern Insurance Co Ltd, note 388 above, AC at 210; All ER at 222; Said v Butt [1920] 3 KB 497 at 503; Greer v Downs Supply Co [1927] 2 KB 28 at 36–7; Collins v Associated Greyhound Racecourses Ltd [1930] 1 Ch 1 at 33; AL Goodhart and CJ Hamson ‘Undisclosed Principals in Contract’ [1932] 4 Camb LJ 320 at 340–1 and 356 and G Dal Pont, Law of Agency, note 51 above, pp 508–10. 393. See 6.41. 394. See 9.53. 395. Black v Smallwood, note 366 above, at 61 and MYT Engineering Pty Ltd v Mulcon Pty Ltd (1999) 195 CLR 636; 162 ALR 441 at [20]–[29]. 396. See the Property Law Act 1974 (Qld) s 227 and Instruments Act 1958 (Vic) s 31A. 397. See K Lindgren, ‘The Positive Corporate Seal Rule and Exceptions Thereto and the Rule in Turquand’s case’ (1974) 9 MULR 411. 398. Ludlow Corporation v Charlton (1840) 6 M & W 815; 151 ER 642 and K Lindgren, note 397 above. 399. K Lindgren, note 397 above, pp 416–7 and the cases referred to therein. 400. See Northside Developments Pty Ltd v Registrar-General, note 280 above, CLR at 155–6; ALR at 389, and K Lindgren, note 397 above. 401. The Corporations Act s 127 deals with the use of the company seal. 402. Northside Developments Pty Ltd v Registrar-General, note 280 above, CLR at 155–8; ALR at 390–2; Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd, note 339 above and Crabtree-Vickers Pty Ltd v Australian Direct Mail Advertising & Addressing Co Pty Ltd, note 353 above, CLR at 78; ALR at 531–2. 403. Black v Smallwood, note 366 above, at 60 and 61; MYT Engineering Pty Ltd v Mulcon Pty Ltd, note 395 above, at [20]–[29] and Northside Developments Pty Ltd v Registrar-General, note 280 above, CLR at 156; ALR at 389–90.

[page 159]

Chapter 4 Vitiating Factors, Illegality and Misleading Conduct Introduction Vitiating Factors Duress under the common law and coercion prohibited by statute Unconscionability: The equitable doctrine and statutory remedies Undue influence Mistake Rectification of the written terms Illegality Contracts prohibited by statute and the common law Misleading or Deceptive Conduct in Employment Conduct ‘in trade or commerce’ Misleading and deceptive conduct Representations about future matters

INTRODUCTION 4.1 This chapter deals with three topics: vitiating factors, illegality and misleading conduct. First, there are a series of factors that vitiate employment contracts. Duress, undue influence, unconscionable conduct and mistake all impair a party’s assent to contract formation. They have different consequences. When proved, duress, undue influence, unconscionable conduct and unilateral mistake render the transaction

[page 160] voidable, not void. A party may seek that the court set aside the transaction. Common mistake renders a contract void: see 4.2–4.19. Second, a contract, a term of the contract or the performance of the contract may be illegal owing to the operation of statute or the common law: see 4.22–4.25. The consequences of the illegality are discussed in 4.26–4.31. Third, the chapter discusses the operation of ss 18 and 31 of Sch 2 of the Competition and Consumer Act 2010 (Cth), known as the Australian Consumer Law (ACL). The former section prohibits misleading and deceptive conduct in trade and commerce and the latter prohibits conduct that is liable to mislead about certain matters relating to employment. The ACL creates a statutory cause of action permitting employees to recover loss or damage caused by a contravention of those provisions: see 4.32–4.41.

VITIATING FACTORS Duress under the common law and coercion prohibited by statute 4.2 At a cursory glance the common law doctrine of duress appears to provide a means to rectify the significant power imbalance in some employment relationships. Freedom to contract is a necessary precondition to making an agreement. For many centuries servants who rejected all offers of engagement were punishable in houses of correction and could be compelled to serve a master on the magistrates’ orders: see 1.30–1.39. Currently in Australia unemployed men and women are subject to a penalty if they refuse to attend and perform certain work.1 As a practical matter, economic pressure also limits the choices of employees. However, the legal scope of the doctrine of duress to correct power imbalances is far more limited.2 The common law doctrine of duress is that the law will not give effect to the apparent consent of a victim if it was induced by illegitimate pressure.3 In employment, duress usually arises in one of four contexts:

[page 161] 1. where the formation, variation or exercise of a right4 under a contract was induced by illegitimate pressure by an employer; 2. where an employer has been induced to pay money or provide benefits because of illegitimate pressure imposed by a union as part of industrial action;5 3. where a deed releasing a party from liability was the product of illegitimate pressure;6 and 4. where the conduct of the employer contravenes statutory prohibitions on certain types of coercion. The doctrine applies to pressure applied by an employer or by an employee. For the purpose of the discussion below it is assumed that the pressure is exerted by an employer on an employee.

Elements of duress and statutory coercion 4.3 Two elements must be proved to establish duress under the common law: the pressure must cause the conduct of the employee, and the pressure must be illegitimate.7 There are also statutory prohibitions against certain types of conduct committed with an intention to coerce an employee, like ss 343(1) (a), 348 and 355 of the Fair Work Act 2009 (Cth). These statutory provisions apply when the pressure is illegitimate and mirror the common law to that extent. Under these statutory prohibitions it is unnecessary for the pressure to have caused the conduct of the employee.8

The overborne will theory of duress 4.4 There was once a theory that duress only arose when the will of the victim was overborne or the pressure was such that it negated the victim’s consent. That was a flawed approach and has now been [page 162]

rejected.9 The overborne will theory suggests that on one side there is a complete absence of an intention to make the particular contract — an element that would render the contract void for lack of intention to form a contract rather than voidable for duress.10 The overborne will theory suggests that the illegitimate pressure is the only cause of the decision to act, whereas duress may be proved when the illegitimate pressure is only one of a series of factors.11 Duress may exist despite the victim’s willingness to contract. The question is not whether the victim had a choice; the question is whether the choice was made freely or under illegitimate pressure.12 Victims always have choices — even the employee with a literal gun to his or her head has a choice, albeit a revolting one.13 A threat may be illegitimate pressure if the employee’s choice between the alternatives is not made freely because the consequences to the employee are both serious and immediate.14

Illegitimate and commercial pressure 4.5 Not all pressure applied by an employer will constitute duress, for ‘the pressure must be one of a kind which the law does not regard as legitimate’.15 Courts have acknowledged that there is a real difficulty in defining clearly where the line between legitimate and illegitimate pressure lies.16 In determining if the pressure is illegitimate courts take into account a range of factors. Duress is not to be lightly found.17 [page 163] There is a longstanding principle that common law duress may consist of threatened or actual violence against the employee or a loved one.18 Duress may also consist of the detention of the victim’s goods.19 More commonly in employment, the duress consists of threats of economic harm. Exercising commercial pressure is usually insufficient to constitute duress, and is ordinarily legitimate.20 In some cases, though, commercial pressure, even absent illegality, can amount to duress.21 Pressure will be illegitimate ‘when it consists of unlawful threats or amounts to unconscionable

conduct’.22 Conduct that is unlawful under the common law, such as engaging in strikes, will not amount to duress when it is legitimised by a statute.23 Threats to take unlawful action — such as threats to contravene a statute, commit a tort or breach a contract — usually constitute illegitimate pressure.24 A threat to do a lawful act may constitute duress,25 but lawful action will usually not amount to illegitimate pressure.26 Threatening legal proceedings to elicit an agreement is usually not duress,27 though in some cases, such as blackmail, [page 164] a threat to take a step under the law may be illegitimate pressure.28 Pressure is more likely to be illegitimate when it concerns a threat not to perform a contract or other legal obligation, as opposed to a threat not to enter into a contract in the future. An offer to a potential employee, even if put on a takeit-or-leave-it basis, will not in itself amount to duress as there is a difference ‘between offering a person an incentive to do something, and acting with intent to coerce. An incentive, no matter how powerful, can still, as a matter of practical reality, be refused’.29 Pressure is more likely to be illegitimate if the employer threatens to remove benefits from a current employee unless the employee agrees to vary or terminate the contract.30 In assessing the legitimacy of the conduct, the parties’ relative positions of power are relevant. This takes into account their economic positions as well as other factors relevant to their power.31 The consequences of the threat being carried out will also be relevant in assessing if there is duress. In Universe Tankships the union threatened to prohibit work by its members on a vessel unless contributions were made to the employees’ welfare fund. The union conceded that the payment had been exacted under economic duress. This concession amounted to an acknowledgment ‘that the financial consequences to the shipowners … were so catastrophic as to amount to coercion’.32 [page 165]

Protest, causation and proof 4.6 Whether the employee protests against the employer’s conduct is relevant, but not determinative, in assessing if the conduct amounts to duress.33 Protest by the employee may be relevant in proving that the illegitimate pressure was the cause of the conduct, though ‘the victim’s silence will not assist the bully if the lack of any practicable choice but to submit is proved’.34 A failure to protest after the pressure has ceased may also be relevant in determining if the employee has affirmed the contract. Under the common law, to constitute duress the pressure must be a cause of the employee’s conduct.35 It need not be the sole, principal or operative cause.36 This is consistent with the law governing other aspects of vitiating conduct such as misrepresentation, undue influence, and mistake. Once the employee proves that the illegitimate pressure was exerted, the onus shifts to the employer to prove that the pressure ‘made no contribution to the victim entering into the agreement’.37 Statutes that prohibit an employer from applying duress, or engaging in conduct with the intent to coerce an employee, usually do not require any causative link between the action of the employer and the action of the employee, such as entering into an agreement.38

Remedies for coercion 4.7 The victim has the right to terminate a contract entered into under duress. The contract is voidable, not void, and an election to terminate does not render the contract void ab initio: [T]he consequence [of the duress is] that the consent is treated in law as revocable unless approbated either expressly or by implication after the illegitimate pressure has ceased to operate on his mind.39

[page 166] The right to terminate will be lost if the victim elects to affirm after the illegitimate pressure has been relieved.40 There is no common law right to damages for duress.41 Restitutionary remedies are available after the contract

is terminated.42

Coercion under the Fair Work Act 4.8 Sections 343(1)(a), 348 and 355 of the Fair Work Act provide that a person43 must not take any action against another person with the intent to coerce the other person to do any of the following: exercise, or not exercise, a workplace right (including the right to enter into, or refuse to enter into, a collective agreement); engage in industrial activity; employ, or not employ, a particular person; or allocate, or not allocate, particular duties or responsibilities to a particular employee. Intention to coerce is different from the common law notion of duress. In many respects these provisions reflect s 170NC of the former Workplace Relations Act 1996 (Cth) (WR Act).44 There is some authority to support the view that this statutory concept of coercion is the same as, or very similar to, the common law concept of duress.45 It has been said in a series of cases that coercion involves the negation of choice.46 It is suggested that the idea of negation of choice [page 167] should not be understood as requiring the overbearing of the will of the victim.47 Consistent with the common law authorities on duress it has been held that coercion is different from influence, inducement and procurement.48 Engaging in protected industrial action is not coercive.49 The coercive conduct must be ‘unlawful, illegitimate or unconscionable’, a requirement that largely reflects the common law test.50 4.9 Section 344 of the Fair Work Act prohibits an employer from exerting undue influence or undue pressure on an employee in relation to a decision by the employee to make, or not make, an agreement or arrangement under the National Employment Standards; make, or not make, an agreement or arrangement under a term of a modern award or enterprise agreement permitted to be included in the award or agreement by s 55(2); agree to, or terminate, an individual flexibility arrangement; accept a guarantee of annual earnings; or agree, or not agree, to a deduction from amounts payable to the

employee in relation to the performance of work. Undue influence is an equitable concept known to law and s 344 may be referring to that concept: see 4.14. The Explanatory Memorandum of the Fair Work Act states that influence or pressure is a lower threshold than coercion.51 This lower threshold applies as there ‘should be higher obligations on an employer when they are entering into arrangements with employees that effectively modify or alter their conditions under the safety net’. The Explanatory Memorandum suggests that the provisions are designed to ensure that changes to the safety net are ‘genuinely consensual’, are not the result of compulsion and may be activated when an employee ‘feels obliged to agree’ to an employer’s request.52 [page 168]

Unconscionability: the equitable doctrine and statutory remedies 4.10 The word ‘unconscionability’ can be used in a broad or narrow sense. There are many different situations in which unconscionability is identified as the underlying foundation for equity’s intervention to remedy a transaction, including the doctrines governing undue influence, relief against penalties, mistake and breach of fiduciary duty.53 Unconscionability in this broader sense is not in itself a sufficient basis for equity’s intervention. Each of these doctrines has well-developed and specific principles that must be satisfied before relief is granted. Unconscionability in the narrow sense refers to a specific equitable doctrine. A court may set aside an unconscionable transaction between employer and employee. The power to do so is part of the court’s equitable jurisdiction and is not a general jurisdiction to set aside harsh or unreasonable bargains.54 It is a power rarely exercised in employment law due to the difficulty in satisfying the elements of the doctrine.55 The doctrines of undue influence and unconscionability are related, and often overlap, but are different.56

4.11 For a transaction to be unconscionable the employee must suffer from a special disability in dealing with the employer.57 Being an employee is not a special disability per se, and nor is being in an inferior or weak bargaining position: … not infrequently in employment relationships an employer occupies a stronger position than an individual employee in certain respects. But the mere fact that one party is more powerful than another does not mean

[page 169] that the less powerful party is at a special disadvantage. Something more must be shown.58

The ‘something more’ that must be shown usually involves proving that the employee falls within one of the recognised categories of special disability: ‘poverty or need of any kind, sickness, age, sex, infirmity of body or mind, drunkenness, illiteracy or lack of education, lack of assistance or explanation where assistance or explanation is necessary’.59 The categories are not closed.60 The special disability must be one that ‘seriously affects the ability of the innocent party to make a judgment as to his or her best interests’61 and the inability to judge his or her own best interests is the essence of weakness.62

Taking unconscientious advantage of the special disability 4.12 Equity will not aid an employee with a special disability unless the employer either knows of the special disability or, perhaps, ought to know of the special disability.63 The employer must also take unconscientious advantage of the special disability.64 Unconscionability in this context requires a high degree of moral obloquy. In determining if the employer has taken unconscientious advantage it will be relevant to consider if it has exploited the employee’s disability, the adequacy of the [page 170]

consideration, whether the employee has received independent advice about the transaction and whether the employer was the driving force behind the transaction. In ACCC v Zanok Technologies Pty Ltd the employer promised that, in return for a $4500 fee, the prospective employees would receive training and thereafter be guaranteed employment at about $50,000 per annum. The training was all but valueless and the statement that there was to be guaranteed employment was false. Edmonds J found that: [The employer] knew or ought to have known that many of the [prospective employees] were temporary residents and anxious to find skilled employment to assist with their applications for permanent resident status. This conduct constituted more than simply taking advantage of a superior bargaining position but involved an unconscientious exploitation of another’s inability or diminished ability to conserve his or her own interests. Dangling the ‘employment carrot’ in return for a fee in circumstances in which the applicant faces having to leave Australia, constitutes a high level of moral obloquy especially where the promised employment does not exist.65

Statutory unconscionability 4.13 The notion of unconscionability arises in at least four other relevant statutory contexts. Section 20 of the ACL provides: A corporation must not, in trade or commerce,66 engage in conduct that is unconscionable within the meaning of the unwritten law, from time to time, of the States and Territories.

The meaning of ‘unconscionable’ in s 20 is yet to be clearly defined. It certainly does not apply a colloquial meaning of unfair or reprehensible. It may be a statutory enactment of the equitable doctrine of unconscionability discussed in 4.10–4.12.67 The statutory provision may be broader and cover some of the equitable doctrines based on unconscionability in a broader sense.68 If so, then one of the unexplored issues in the cases is whether an employee can rely on s 20 to challenge [page 171] an arbitrary, capricious or mala fide exercise of an employer’s right to terminate.69

The second statutory context arises in ss 21 and 22 of the ACL. Those sections concern a broader range of unconscionable conduct in the supply and acquisition of services. The definition of ‘service’ in s 4 excludes the performance of work under an employment contract. The same limitation renders the unfair contract provisions in Pt 2-3 of the ACL inapplicable in most employment contexts.70 Third, the notion of unconscionability lies near the heart of s 275 of the Industrial Relations Act 1996 (NSW) and s 276 of the Industrial Relations Act 1999 (Qld). Those provisions permit the review of unfair contracts. They are now almost completely irrelevant for employees owing to the operation of s 26(2)(e) of the Fair Work Act and only have a very limited residual operation.71 The final statutory context arises from ss 343, 348 and 355 of the Fair Work Act, which prohibit certain types of coercion in relation to engagement, allocation of duties, taking of industrial action and exercise of workplace rights. It is doubtful whether the principles concerning unconscionability have any relevance in determining the operation of these provisions in the context of enterprise bargaining under the Act.72

Undue influence 4.14 The doctrine of undue influence applies when one party improperly or unconscientiously uses his or her dominion or psychological ascendancy over the other party.73 In such circumstances the consent of the weaker party to a transaction is vitiated owing to the deprivation of the free use of his or her judgment. Equity will set aside such a transaction and order restitution of property that has passed. In some relationships there is a presumption of undue influence, such as priest and penitent, parent and child, or express trustee and beneficiary. There is no such presumption in employment relationships. Actual undue influence may be proved where there was unconscientious use of the stronger party’s dominion or [page 172] ascendency over the weaker. In proving the ascendency the character, age, intelligence and education of the weaker party will be relevant. There are

very few cases connected with employment concerning undue influence as the requisite degree of ascendancy is rarely able to be demonstrated.74

Mistake 4.15 As issues concerning mistake rarely arise in employment contract law their complex principles will be briefly stated. A distinction is drawn between two different types of mistake and their effects.75 A common mistake occurs when both parties share the same mistake.76 A unilateral mistake occurs when only one of the parties is mistaken. To give rise to contractual or equitable remedies a mistake, common or unilateral, must be about a past or existing fact. It is ordinarily not sufficient for there to be a mistake about the common or statutory law77 or about the meaning of words in a contract.78 The material below examines the effect of a common mistake in contract (see 4.16–4.17), then a unilateral mistake in contract (see 4.18) and then their effect in equity (see 4.19).

Common mistake 4.16 Where there is a common mistake of fact, the mistake is fundamental, and the mistake is not the fault of one party, then the contract is void ab initio and any remedy is usually restitutionary.79 As [page 173] to the fundamental nature of the mistake the test is: ‘Does the state of the new facts destroy the identity of the subject matter as it was in the original state of facts?’80 In Bell v Lever Bros Ltd two board members entered into an agreement whereby they were paid a large amount of termination pay. Their employment contracts could have been summarily terminated on account of their prior misconduct. The mistake alleged was that the parties erroneously assumed that agreements with the directors were only terminable by agreement whereas in fact the contracts were terminable for serious breach.

However, that mistake did not involve the subject matter of the contract, being a release for compensation. Lord Thankerton stated: The phrase ‘underlying assumption by the parties’, as applied to the subject-matter of a contract, may be too widely interpreted so as to include something which one of the parties had not necessarily in his mind at the time of the contract; in my opinion it can only properly relate to something which both must necessarily have accepted in their minds as an essential and integral element of the subject matter.81

4.17 As a consequence of the approach adopted in Bell v Lever Bros Ltd, there will be very few contexts in employment in which a common mistake will arise.82 In employment the parties fundamentally agree to exchange work for wages. It is difficult for a shared mistake to arise about the very subject matter of the contract. Far more regularly, mistakes about facts are determined by the application of one of four other rules or doctrines. First, the employer or the employee warrants that the fact is true, but turns out to be mistaken. In such cases the party who promised that the fact is true is liable in damages for breach of warranty.83 Second, the fact is true when the contract is made but subsequently becomes untrue. The doctrine of mistake has no role to play in such a case as it only concerns mistakes as to facts existing at the time of the contract, whereas the doctrine of frustration deals more directly with post-contract changes in the fundamental assumptions made by the parties.84 Third, the parties have established a condition precedent to the formation of the contract that fails. Both parties may assume, for example, that [page 174] regulatory approval of the employment will be forthcoming and make the formation of the contract subject to the acquisition of that approval, with the consequence that no contract is formed when the approval is not forthcoming.85 Fourth, the parties mistakenly believe that they have reached agreement about a matter, but in fact there was never an accepted offer.

Unilateral mistake 4.18 Generally speaking, a party cannot rely on his or her own unilateral

mistake to say that the contract is void, even if the mistake concerns a fundamental matter.86 Assume an employee accepts a job offer that he or she mistakenly believes is for a job in Sydney, whereas in fact the offer properly construed is for a job in Melbourne. The resulting contract is not void. However, where the employer knows the employee is labouring under the misapprehension that the work will be in Sydney and remains silent, different considerations may arise.87 There is a line of authorities concerning a mistake by one party as to the identity of the other. In employment it will be rare for cases of mistaken identity to arise unless there is also a misrepresentation. A unilateral mistake about the other party’s identity does not necessarily render the contract void.88 A distinction is sometimes drawn between contracts entered into faceto-face (where contracts are more likely to be held to have been formed, but are voidable),89 contracts entered into at a distance (where contracts are more likely to be held to have never been formed, and are void),90 and parol contracts naming a person with whom the employee did not intend to contract.91 [page 175] The cases on point are few in number, difficult to reconcile and almost all feature a rogue.92 Two related issues about the identity of the parties should be clarified. First, an offer cannot be accepted by an employee who is not within the class of offerees. An offer of employment is ordinarily personal and usually cannot be accepted by a person to whom it is not directed.93 Second, no contract is formed between employer and employee when an agent, without authority, purports to contract on behalf of an employer, unless there is subsequent ratification of that act by the employer.94

Equitable relief and mistake 4.19 In the exercise of its equitable jurisdiction a court may set aside contracts on the basis of mistake. This is part of equity’s role to prevent equitable fraud.95 When dealing with a common mistake, to obtain equitable

relief the mistake must be fundamental, the party raising the mistake must not be at fault and there must be an element of unconscionable conduct by the party seeking to rely on the mistake.96 In equity a court may grant three main remedies in relation to a valid contract formed between the parties that is affected by mistake: rectification, a refusal to grant specific performance, and rescission, usually accompanied by restitutionary relief.97

Rectification of the written terms 4.20 Rectification is an equitable remedy that concerns documents. It is a remedy to change the recording of the terms of the contract, not to change the terms of the contract.98 The remedy is available when the terms of the contract are written down incorrectly.99 Rectification can [page 176] also remedy a common mistake where the written agreement does not reflect the parties’ shared understanding as to a particular legal effect that the parties desired.100 It must be clear what the rectified document would say.101 The rectification of the written terms is to make the document accord with the actual subjective intention of the parties. Rectification is not necessary when the issue can be resolved though the interpretation of the document or the implication of a term based on the presumed and objectively ascertained intention of the parties.102 Rectification of a document may be ordered even where the parties have failed to form a contract, so long as there is a continuing common intention to contract.103 The party applying for the rectification must provide convincing proof that the executed contract differed from the common intention of the parties,104 usually by adducing evidence of some outward manifestation of that intention.105 Parol evidence is admissible to prove the subjective common intention of the parties.106 4.21 Unilateral mistake is insufficient in itself to justify an order for rectification of the contract.107 However, if an employee makes an agreement

under a misapprehension that the agreement contains a particular provision, and the employer knows that the employee has this misapprehension, and lets the employee remain under the [page 177] misapprehension and execute the agreement on the mistaken basis, then the employer cannot rely on the execution of the agreement to defeat the employee’s claim for rectification. The remedy can only be granted to rectify a unilateral mistake if there are circumstances where equity would require the employer to take some step to bring the mistake to the employee’s attention.108 For example, if the parties had negotiated on the basis that a restraint of trade clause would operate for 12 months, and the employer in preparing the final draft of the contract for execution amends the period to 24 months and lets the employee sign the contract knowing that the employee mistakenly believes that the contract refers to a 12-month restraint, then (assuming there was some sharp practice or other unconscionable conduct)109 the contract may be rectified.110

ILLEGALITY Contracts prohibited by statute and the common law 4.22 A contract, a term of a contract, or the performance of a term may contravene a statute or be contrary to public policy and thereby illegal. The relationship between contracts, statutory provisions and common law grounds of illegality is complex. There is a range of possible consequences arising from a conclusion that the contract, term or performance is illegal: see 4.26. When assessing illegality and its consequences there are two separate questions to be addressed: is the contract, term or performance prohibited by statute or the common law, and if so, what are the consequences for obtaining the relief that is sought in the matter: [A] court that finds that an agreement is unlawful or has an unlawful purpose has merely set the stage for a further inquiry: are the circumstances surrounding the agreement such that the court should deny a relevant remedy to the party seeking the assistance of the court?111

The four types of illegality 4.23 There are four main ways in which a statutory provision or a common law policy may render a contract, term or performance [page 178] unlawful.112 The consequences of the illegality depend in part on the type of illegality. The onus of proving the illegality is on the party who asserts it.113 First, the contract itself may be one which the statute expressly or impliedly prohibits.114 Second, the contract may be to do something which the statute or common law prohibits, such as a contract to commit a crime.115 Section 235 of the Migration Act 1958 (Cth) for example, makes it an offence for an unlawful non-citizen to perform work. A contract to perform such work will be illegal.116 Third, a contract or term may be illegal because, although it is not prohibited by a statute, it is associated with or made in furtherance of a purpose frustrating a policy of the law or the operation of the statute.117 A contract to provide wages and conditions that are less beneficial to the employee than those established by the National Employment Standards, a modern award or an enterprise agreement is illegal in this sense.118 This category includes contracts which a statute or the common law permits the parties to form and perform subject to conditions that have not been met.119 Other types of contract within this category are contracts whose formation is regulated by a procedure, such as providing that only certain officers are authorised to make an appointment to public sector [page 179] employment.120 In McLennan v Surveillance Australia Pty Ltd the statute prescribed a procedure that had to be followed to vary an Australian Workplace Agreement (AWA). It prohibited variations using other procedures. The court held that the parties could not enforce a variation made

as the result of adopting the proscribed method of variation.121 Fourth, a contract may be lawful according to its own terms but may be performed in a manner which the common law or statute prohibits. The common law does not render all such contracts unenforceable. The consequences of the illegal performance will depend on the factors discussed in 4.26. For example, the term may be unenforceable by a party who knowingly participates in the illegal performance and relies on that performance in the enforcement of the term.122 In Coral Leisure Group Ltd v Barnett the employee was engaged to pander to the wishes of punters at a casino. After he commenced employment he was told to procure prostitutes for the punters. The procurement, assumed to be illegal, was neither the purpose of his engagement nor an express term of the contract. The court concluded: The fact that a party has in the course of performing a contract committed an unlawful or immoral act will not by itself prevent him from further enforcing that contract unless the contract was entered into with the purpose of doing that unlawful or immoral act or the contract itself (as opposed to the mode of his performance) is prohibited by law.123

Tax, sex and servility 4.24 In the context of employment the most significant ground of common law illegality concerns contracts in restraint of trade: see 16.2. Three other grounds that recur in the authorities concern tax, sex and incidents of servility. There are other bases on which contracts are contrary to public policy, but they rarely arise in the context of employment law. They include contracts injurious to the foreign relations of the state,124 contracts that [page 180] tend to pervert or obstruct the course of justice,125 and contracts that promote corruption in public life, such as misuse of a public office for private gain.126 The common law bases for illegality are not closed. A contract or arrangement entered into for the purpose of defrauding the public revenue is contrary to public policy.127 When the parties knowingly

attempt to evade the payment of tax in relation to part of the employee’s remuneration, the illegal object may taint the whole contract and render it unenforceable under the common law.128 In some United Kingdom decisions of more dubious merit, courts have denied employment rights arising from statutory schemes when the parties have attempted to defraud the revenue of the Crown.129 In determining whether public policy requires the court to refuse to enforce a contract to defraud the revenue, the court will take into account factors such as the degree to which each party is involved in the illegality, the expected benefits that are to be acquired by each party, the seriousness of the illegality, the consequences to other citizens or institutions, public morality and whether the court can bring about a just result without undermining respect for the law.130 4.25 Under the common law, sexually immoral contracts are contrary to public policy.131 This issue sometimes arises in the context of whether a [page 181] prostitute is entitled to enforce his or her contract, or obtain the benefits of statutory schemes governing unfair dismissal, award entitlements or workers’ compensation. Under the common law, being a prostitute, a pimp or a ponce is not illegal, but keeping a brothel is illegal. Due to statutory reforms introduced across much of Australia the illegality associated with some aspects of prostitution has been removed. Even where the performance of the contract by the prostitute is illegal, the illegal conduct may not be sufficiently serious to render the contract unenforceable.132 Contracts with servile incidents may be contrary to public policy. There is an implicit policy of the common law that employees should not cede an unreasonable degree of freedom to the employer. This policy is apparent in a series of branches of employment law. A contract for slavery is unenforceable under the common law. A contract for permanent employment in which an employee is prevented from giving notice for the term of his or her life may be contrary to public policy as the contract would be akin to slavery.133 A contract that ‘savours of serfdom’ may be unenforceable.134 The law governing unreasonable restraints of trade is in part concerned with

protecting the employee’s freedom to serve other employers.135 One of the reasons the law looks with disfavour on attempts to compel an employee to serve the employer through orders for specific performance is that such orders may enslave the employee.136

Consequences of illegality 4.26 The law governing the effects of illegality is in a most unsatisfactory state. It is sometimes said the effect of illegality is that the contract is void, illegal, unenforceable, ineffectual or nugatory.137 Whatever the apt adjective, the key question in each case is whether, in light of the illegality, the party is permitted to enforce the right that is the subject of his or her claim and obtain the relief sought.138 The relationship between the contract and minimum conditions set by the National Employment Standards, modern awards and enterprise [page 182] agreements under the Fair Work Act is considered in more detail in 5.83. There are at least six possible consequences of illegality. First, the illegality may render the whole contract void ab initio. It will be unenforceable in contract or equity at the suit of either party. A void contract cannot form the basis of a statutory action that depends on the proof of a valid contract.139 Second, the illegality may only affect a particular term. The illegal term will be unenforceable, but the remainder of the contract may remain enforceable.140 Third, the illegality may affect a term when performed in one manner but not when performed in another. The court may allow the enforcement of the term in a permitted manner but refrain from giving relief when the illegality and the relief are related. Fourth, a statute may provide rights regardless of the illegality.141 Fifth, though the contract or term may be enforceable at law, the iniquity may be relevant in determining whether to exercise a discretion to grant equitable relief.142 Sixth, though the contract or term may be unenforceable at law, it may be possible to enforce the term in equity.143

4.27 The consequences that attach to the different types of illegality depend on a range of factors. When the illegality arises from the operation of a statute then the consequences of the illegality depend on the statutory intention.144 Some contracts prohibited by statute may be enforceable, others will not be. As Gibbs ACJ has stated: It is often said that a contract expressly or impliedly prohibited by statute is void and unenforceable. That statement is true as a general rule, but for complete accuracy it needs qualification, because it is possible for a statute in terms to prohibit a contract and yet to provide, expressly or impliedly,

[page 183] that the contract will be valid and enforceable. However, cases are likely to be rare in which a statute prohibits a contract but nevertheless reveals an intention that it shall be valid and enforceable, and in most cases it is sufficient to say, as has been said in many cases of authority, that the test is whether the contract is prohibited by the statute.145

The effect of a breach of statute 4.28 Sometimes the consequences of the illegal contract or act are governed by express provisions in the legislation.146 Ordinarily the legislative purpose that governs those consequences is ascertained by reference to the language of the statute, its subject matter and objects, and the likely effect on the parties of holding invalid every act done in breach of the provision.147 Various factors are taken into account. Some are determinative in some contexts but not others: ‘There is no decisive rule that can be applied; there is not even a ranking of relevant factors or categories to give guidance on the issue’.148 Courts are more likely to hold that a contract or term is unenforceable when it is expressly or impliedly prohibited by the statute or the contract is to do something which the statute forbids.149 Courts are less likely to reach this conclusion if the contract or term is not prohibited but it is associated with or made in furtherance of a purpose frustrating the operation of the statute.150 It is relevant to consider if the legislature has chosen to make an act done in contravention of a statutory provision punishable by a specified penalty proportionate to the seriousness of the illegality involved. It is consistent with

such a scheme to conclude that Parliament did not intend to impose other unarticulated consequences, such as the invalidity of the act.151 It is unlikely that Parliament would have intended for disastrous financial consequences to flow from an [page 184] otherwise inconsequential breach of a statute. Another factor is whether an object of the prohibition is the protection of the public, as opposed to the protection of the Crown’s revenues.152 This factor weighs in favour of enforceability when the statute rendering the term illegal was enacted for the benefit of a class of which the claimant was a member and with an object of protecting members of that class.153 4.29 Ordinarily, conduct constituting a contravention of the Fair Work Act or an industrial instrument will not be treated as void and wholly ineffective. For example, the s 119 of the Fair Work Act requires employers to give certain notice to employees and imposes a penalty for non-compliance. When an employer fails to comply with these provisions the conduct of the employer may still be effective in terminating the employment relationship.154 Similarly, in NTEIU v University of Wollongong the employer could only appoint an employee as a fixed term employee in certain circumstances specified in an industrial instrument. In contravention of the instrument the employer appointed the employee as a fixed term employee in other circumstances. The court rejected the argument that, as a consequence, the employee was deemed to have been engaged on an ongoing basis.155 4.30 Where the illegality arises because the contract is contrary to public policy, the consequences depend in part on the underlying policy purpose.156 For example, in Hewcastle Catering Ltd v Ahmed the waiter carried out the employer’s scheme to avoid paying the correct tax on the customer’s bills. The waiters were dismissed after they were called by the prosecution to give evidence against the employer in proceedings launched by the tax authority investigation. The employer claimed that the employee’s subsequent unfair dismissal case could not be pursued because the employee had participated in the tax avoidance scheme. The court rejected that submission. The

performance of the employee’s duties [page 185] involved illegal conduct, but it was not the object of the contract, the employee’s conduct was not essential to the illegal scheme, the employee did not financially gain from the conduct and denying the right to pursue unfair dismissal proceedings would encourage employers to dismiss with impunity employees who cooperated with tax authorities.157

Other matters affecting the consequences of the illegality 4.31 The consequences of the illegality depend in part on whether the party seeking to enforce the contract is relying on the illegal term or is seeking to enforce a cause of action independent of the illegal term.158 The illegal term of the contract may be severable from the valid terms leaving the valid terms to be enforced. The principles governing severability are most commonly litigated in employment when a party seeks to sever an unreasonable restraint of trade clause or a clause that is uncertain, and are discussed in 16.20. Courts are less likely to deny relief when the plaintiff did not know of the illegality or was mistaken about it.159 The relevance of the parties’ knowledge or ignorance of the illegality depends on the type of illegality. Ignorance of the illegality is irrelevant (or less relevant) where the contract is illegal on its face and cannot be performed without illegality, or where the illegality arises because the object of the contract is to commit a crime or effect a purpose that is contrary to the common law or statute.160 However, if the contract could be performed legally the contract may be enforceable if the parties had intended to comply with the law.161 In some circumstances the contract may be unenforceable by the employer if only the employer is aware of the illegality.162 There is a difference between an employee who knowingly enters into an arrangement for the purpose of illegally evading tax laws and an employee who becomes aware, during the course of employment, that the employer is evading tax.163 In Enfield Technical Services Ltd v Payne the parties mistakenly

[page 186] believed that they had not entered into a contract of employment. Their mistake was genuine and was not based on any false representations. The parties gained certain tax advantages as a result of their error. The Court of Appeal concluded that the contracts were neither unlawful nor unlawfully performed.164 Courts are less likely to deny relief when the illegal agreement was induced by the defendant’s fraud, oppression or undue influence.165 Courts are also less likely to deny relief when the illegal purpose has not been carried into effect or where a party has repented.166

MISLEADING OR DECEPTIVE CONDUCT IN EMPLOYMENT167 4.32 Subsection 18(1) of the Australian Consumer Law (ACL) states: A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

Subsection 18(1) establishes a norm of conduct, like its identical predecessor, s 52 of the Trade Practices Act 1975 (Cth) (TPA). Loss or damage caused by a contravention of that norm is recoverable under s 236 of the ACL. The provision applies to a broad range of conduct by employers and employees, including representations by employers relating to the security of employment,168 remuneration and the terms of the engagement,169 [page 187] the prospect of future engagement or promotion,170 and the relative success of the employer’s business.171 The statutory cause of action has considerable advantages over a claim for breach of contract. Liability under the ACL can arise when the employer’s representation is not a contractually enforceable promise or is inconsistent

with contractual terms.172 The majority of actions brought by employees based on s 18 are unsuccessful because they are based on reasonably founded but ultimately inaccurate predictions made by the employer at the commencement of the employment: see 4.39. 4.33 Section 31 of the ACL states: A corporation shall not, in relation to employment that is to be, or may be, offered by the corporation or by another person, engage in conduct that is liable to mislead persons seeking the employment as to the availability, nature, terms or conditions of, or any other matter relating to, the employment.

Section 31 is limited to conduct that occurred prior to the commencement of the employment.173 To establish the cause of action an employee must prove that the employer’s conduct was liable to mislead, the employee relied on the misleading conduct and the employee suffered loss or damage because of the misleading conduct.174 The prospective employer’s conduct need not be in trade or commerce. It is unnecessary for the conduct to lead to employment.175 Section 31 refers to conduct that is ‘liable to mislead’. This is a narrower notion than conduct ‘likely to mislead’ referred to in s 18.176 [page 188] The ACL has a similar scope to the Fair Work Act: see 1.21. Broadly speaking it applies to conduct of constitutional corporations, and the Crown in the right of the Commonwealth so far as it carries on a business, and certain Commonwealth authorities. Almost all other employers are covered by mirror provisions in the Fair Trading Acts of the various states, ensuring that ss 18 and 31, and their state counterparts, almost completely cover the field. 4.34 Section 345 of the Fair Work Act provides that a person must not knowingly or recklessly make a false or misleading representation about the workplace rights of another person, or the exercise, or the effect of the exercise of a workplace right by another person.177 This covers misleading statements by an employer to an employee during employment about the rights of an employee under an enterprise agreement or a modern award. Section 345 is a civil penalty provision. Pursuant to s 545 of the Fair Work

Act an employee may recover compensation for proved loss that he or she has suffered because of the contravention.178

Conduct ‘in trade or commerce’ 4.35 Section 18 of the ACL provides that an employer shall not ‘in trade or commerce’ engage in misleading or deceptive conduct. Not all of the parties’ conduct occurring during the course of, or connected to, the employment is in trade or commerce. The High Court in Concrete Constructions v Nelson179 provided some guidance as to the meaning of that phrase. The facts were simple: Mr Nelson was employed by Concrete Constructions on a building site. His duties included moving grates positioned at the entry points to airconditioning shafts. Before carrying out his work he was told by the employer’s general foreman that each of the grates was secured by three bolts on either side. This was not correct. As a result, while he was removing one of the grates it gave way and Mr Nelson fell to the bottom of the airconditioning shaft. He suffered serious injuries.180 The employer’s conduct alleged to be ‘in trade or commerce’ was simply saying the grate was secured. [page 189] The majority held that ‘in trade or commerce’ in the section refers: … only to conduct which is itself an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character. So construed … the words ‘in trade or commerce’ refer to ‘the central conception’ of trade or commerce and not to the ‘immense field of activities’181 in which corporations may engage in the course of, or for the purposes of, carrying on some overall trading or commercial business …. What the section is concerned with is the conduct of a corporation towards persons, be they consumers or not, with whom it (or those whose interests it represents or is seeking to promote) has or may have dealings in the course of those activities or transactions which, of their nature, bear a trading or commercial character … In some areas the dividing line between what is and what is not conduct ‘in trade or commerce’ is less clear and may require the identification of what imports a trading or commercial character to an activity which is not, without more, of that character.182

Subsequent decisions have acknowledged the difficulty in discerning the dividing line.183 As applied to employment, the balance of authority supports

the view that representations are in trade or commerce when they were made in negotiations for the formation,184 variation,185 or termination186 of employment contracts: [I]t seems to me correct to hold that the conduct of a corporation in the course of negotiations for the employment of senior staff187 is conduct

[page 190] potentially falling within s 52. It is true that an employment contract does not directly produce income, but the making of such a contract is part of the total activities in trade or commerce of the corporation. Critically, it is intrinsically commercial conduct. It is directed to the creation of a contractual relationship.188

4.36 It is more doubtful that conduct of the employer in the performance of the contract is in trade or commerce.189 The reason why a statement is made and the purpose it is intended to achieve are relevant in ascertaining its trading or commercial character.190 In relation to termination of employment, it has been held that making allegations of misconduct is not in trade or commerce,191 nor is prosecuting those allegations in civil and criminal forums.192 Since the decision in Concrete Construction the definition of ‘trade and commerce’ in the ACL has been amended to include ‘any business or professional activity’. Such conduct must nevertheless bear a trading or commercial character.193 Certain conduct by employees may be in trade or commerce. Comments made by employees about the conduct of their employer’s business may be a comment on trade or commerce, or in connection with trade or commerce, but not necessarily be in trade or commerce.194 [page 191] Whether the employee is participating in a commercial activity when making the representations will be relevant.195

Misleading and deceptive conduct 4.37 To be misleading or deceptive the conduct must be capable of inducing error. Section 18 of the ACL focuses on the likely consequences of the conduct, not the intention of the employer to mislead or deceive.196 The employee need not prove he or she was misled or deceived: ‘all that must be shown is the existence of a real or not remote chance that might occur, even if the chance does not rise above 50%’.197 Conduct that misleads some employees may not mislead others. Whether conduct, directed at the employee, is misleading or deceptive depends on analysing the conduct of the employer in relation to that employee alone: … it is necessary to consider the character of the particular conduct of the particular [employer] in relation to the particular [employee], bearing in mind what matters of fact each knew about the other as a result of the nature of their dealings and the conversations between them, or which each may be taken to have known.198

The section refers to conduct, not representations. There may be occasions when the silence of the employer, coupled with other conduct, may mislead. The issue is not whether there is at common law or equity a duty to disclose or rectify a misleading impression. As Black CJ has stated: Silence is to be assessed as a circumstance like any other. To say this is certainly not to impose any general duty of disclosure; the question is simply whether, having regard to all the relevant circumstances, there has been conduct that is misleading or deceptive or that is likely to mislead or deceive. To speak of ‘mere silence’ or of a duty of disclosure can

[page 192] divert attention from that primary question. Although ‘mere silence’ is a convenient way of describing some fact situations, there is in truth no such thing as ‘mere silence’ because the significance of silence always falls to be considered in the context in which it occurs. That context may or may not include facts giving rise to a reasonable expectation, in the circumstances of the case, that if particular matters exist they will be disclosed.199

4.38 A representation may be literally true, but nevertheless misleading or deceptive. In Moss v Lowe Hunt and Partners Pty Ltd the employer told the prospective employee that it generated $300 million in billings and had 150 offices around the world. This information, which was accurate, was conveyed as part of a presentation that the employer had a solid financial

base. In fact the business was unsuccessful. The court found that, without qualification, the representation was likely to lead a reasonable person to mistakenly believe that the business was financially successful.200 Loss or damage is the gist of an action under s 18 of the ACL.201 The action will fail unless a person suffers loss or damage ‘because of’ the misleading conduct.202 The misleading conduct need not be the sole or principal cause of the loss or damage: ‘it is sufficient if the conduct is a cause of the alleged loss or made a material contribution to it, no matter that the contribution is a minor one’.203 Reliance by the employee on the representation will prove the necessary causative link where the misleading conduct consists of misrepresentations.204 In [page 193] Wesfarmers Dalgety Ltd v Williams the employee was worried about whether he was covered by professional indemnity insurance. He asked his employer and he was told he was amply covered. His continued employment was reliance for the purpose of an action based on the predecessor of s 18 of the ACL.205 The fact that an employee, promised long-term employment, later signs a contract permitting termination on short notice is relevant to, but not determinative of, reliance on the antecedent representation.206 Loss or damage must be proved by the employee under s 236. The method of calculating damages is discussed in 14.32 and 14.63.

Representations about future matters 4.39 Many actions by employees under s 18 of the ACL fail because the predictions made by the employer at the commencement of the employment, about the benefits the employee would receive, were true when made but turn out to be incorrect. Putting to one side the operation of s 4 of the ACL, when the employee relies on a misrepresentation there must be an implied representation as to a present or past fact that is misleading or deceptive (or under s 31, liable to mislead).207 A representation as to future conduct or a future event will generally imply (and sometimes explicitly state) that when

the representation was made the employer was of a particular state of mind as to the future conduct or event. A representation that employment will be for the long term is both a representation of what may occur in the future, and a representation of present facts, namely that the employer presently believes that the employment will be for the long term and that the employer is capable of engaging the employee in the long term.208 It will be misleading for the employer to make a representation that it knows is untrue, or make a representation with reckless disregard for whether it is true or false. However, the making of a promise that is not performed or a prediction [page 194] that is not fulfilled is not in itself misleading or deceptive conduct.209 For example, in Patrick v Steel Mains Pty Ltd, the employer represented that it would continue to employ the employees at a new plant. The employees relocated to the new plant relying on the representation, but the new plant did not go well. The employer changed its plans and closed the new plant. Though the representation turned out to be false, it was true when made.210 4.40 Section 4 of the ACL facilitates proof in cases involving representations about future matters.211 Subsection 4(1) provides that a representation shall be taken to be misleading where a corporation makes a representation with respect to any future matter and the corporation does not have reasonable grounds for making the representation.212 Subsection 4(2) provides that where an employer is alleged to have made a misrepresentation about a future matter the employer is considered to have not had reasonable grounds for making the representation, unless the employer adduces evidence to the contrary.213 Subsection 4(3) states: (3) To avoid doubt, subsection (2) does not: (a) have the effect that, merely because such evidence to the contrary is adduced, the person who made the representation is taken to have had reasonable grounds for making the representation; or (b) have the effect of placing on any person an onus of proving that the person who made the representation had reasonable grounds for making the representation.

[page 195] Section 4 does not of itself create a cause of action or define a norm of conduct.214 It need not be pleaded, though as a matter of procedural fairness the employer may need to be told that the provision is being relied on.215 It does not reverse the onus of proof. The onus always rests on the employee to prove the representation was misleading.216 What s 4 does in a practical sense is to cast the evidentiary burden of proof on an employer who has made a representation about a future matter to adduce some evidence to show that it had reasonable grounds for making that representation.217 In the absence of any evidence on the matter s 4(2) will be operative.218 Adducing ‘some evidence’ about the reasonableness of the grounds is not a complete defence for the employer.219 Where some evidence of reasonableness is adduced, ultimately the issue is whether the employer had reasonable grounds for making the representation as to future matters, and the legal or persuasive burden on that issue rests with the employee.220 Section 4 now also applies to accessories.221 Where the representation is as to future matters: … the causal connection between the [employer’s] conduct [in a case based on statements of future fact] and the loss or damage claimed is not the breaking of the promise or the failure of the prediction. The causal

[page 196] connection which must be shown to exist is a causal connection between the loss or damage claimed and the making of the promise or prediction without reasonable grounds.222

4.41 These principles are illustrated in Walker v Salomon Smith Barney Securities. Mr Walker was a senior employee with ABN AMRO. In January 1998 a rival, Natwest, made an offer to employ Mr Walker on certain terms commencing March 1998. He accepted that offer. By a sale agreement dated 8 February 1998 another company, Salomon Smith Barney Securities, acquired a controlling interest in Natwest. Mr Walker was told on 13 February by Mr Fulton, on behalf of Natwest, that he would be employed after the sale on the same terms and conditions as had previously been agreed. Mr Walker relied on this representation, resigning from his

employment with ABN AMRO. Natwest later refused to proceed with the engagement. Mr Walker alleged that Natwest made two relevant representations. The first, made in January 1998, was that he could commence employment on certain terms in March 1998. That representation as to a future matter was made on reasonable grounds. When it was made the employer proposed to proceed with the employment and Mr Walker’s claim on that representation failed. The second representation, made on 13 February, was that Mr Walker would be employed after the sale to Salomon Smith Barney Securities on the same terms and conditions as had previously been agreed. Mr Fulton had no reasonable grounds to make that representation. In fact, it became apparent within days that the agreed terms and conditions were completely unacceptable to the new owners. The court concluded that the second representation was misleading and Mr Walker succeeded in his claim.223 ____________________ 1.

Social Security (Administration) Act 1999 (Cth) s 42B and 42T.

2.

See generally J Riley, Employee Protection at Common Law, The Federation Press, Sydney, 2005, pp 144–54; A Stewart, ‘Economic Duress: Legal Regulation of Commercial Pressure’ (1984) 14 MULR 410; R Bigwood, Exploitative Contracts, Oxford University Press, Oxford, 2003, Ch 7; K Mason et al, Mason and Carter’s Restitution Law in Australia, 2nd ed, LexisNexis Butterworths, Sydney, 2008, Ch 5 and P S Atiyah, ‘Economic Duress and the Overborne Will’ (1982) 98 LQR 197.

3.

Crescendo Management Pty Ltd v Westpac Banking Corp (1988) 19 NSWLR 40 at 45; Equiticorp Finance Ltd (in liq) v Bank of New Zealand (1993) 32 NSWLR 50 at 106 and Frederick v South Australia (2006) 94 SASR 545; 152 IR 182; [2006] SASC 165 at [180].

4.

Frederick v South Australia, note 3 above, at [179].

5.

For example, Universe Tankships Inc of Monrovia v International Transport Workers Federation [1983] 1 AC 366; [1982] 2 All ER 67; Dimskal Shipping Co SA v International Transport Workers Federation [1992] 2 AC 152; [1991] 4 All ER 871 and B & S Contracts and Design Ltd v Victor Green Publications Ltd [1984] ICR 419.

6.

Qantas Airways Ltd v Gubbins (1992) 28 NSWLR 26; David Jones Ltd v Cukeric (1997) 78 IR 430; Tunbridge v Linde Material Handling Pty Ltd (1992) 77 IR 115, and J Riley, Employee Protection at Common Law, note 2 above, pp 148–51.

7.

Crescendo Management Pty Ltd v Westpac Banking Corp, note 3 above, at 45; Cadbury Schweppes Pty Ltd v Australian Liquor, Hospitality and Miscellaneous Workers’ Union (ALHMWU) (2000) 106 FCR 148; 185 ALR 480; [2000] FCA 1793 at [19]; Universe Tankships Inc of Monrovia v International Transport Workers Federation, note 5 above, AC at 400; All ER at 88–9 and Dimskal Shipping Co SA v International Transport Workers Federation, note 5 above, AC at 165; All ER at 878.

8.

Schanka v Employment National (Administration) Pty Ltd (2000) 97 FCR 186; 170 ALR 42; 96 IR 449 at [23] and Granada Tavern v Smith (2008) 173 IR 328; [2008] FCA 646 at [82]: see 4.8

and 4.9. 9.

Crescendo Management Pty Ltd v Westpac Banking Corp, note 3 above, at 45–6; Schanka v Employment National (Administration) Pty Ltd, note 8 above, at [10]; Granada Tavern v Smith, note 8 above, at [73]–[75]; Canturi v Sita Coaches Pty Ltd (2002) 116 FCR 276; [2002] FCA 349 at [43] and Frederick v South Australia, note 3 above, at [180].

10.

Crescendo Management Pty Ltd v Westpac Banking Corp, note 3 above, at 45–6.

11.

See 4.6.

12.

Mason v New South Wales (1959) 102 CLR 108 at 133 and 145.

13.

Crescendo Management Pty Ltd v Westpac Banking Corp, note 3 above, at 45–6; Mason v New South Wales, note 12 above, at 128–9.

14.

B & S Contracts and Design Ltd v Victor Green Publications Ltd, note 5 above, at 428; Hawker Pacific Pty Ltd v Helicopter Charter Pty Ltd (1991) 22 NSWLR 298 at 301; Maritime Union of Australia (MUA) v Geraldton Port Authority (1999) 93 FCR 34; 165 ALR 67; 94 IR 244 at [367] and Schanka v Employment National (Administration) Pty Ltd (1999) 166 ALR 663; 92 IR 464 at [43] (aff’d (2000) 97 FCR 186; 170 ALR 42; 96 IR 449 at [23]).

15.

Barton v Armstrong [1976] AC 104 at 121; [1973] 2 NSWLR 598 at 634.

16.

Equiticorp Finance Ltd (in liq) v Bank of New Zealand, note 3 above, at 106–7 and MUA v Geraldton Port Authority, note 14 above, at [391].

17.

Australasian Meat Industry Employees’ Union (AMIEU) v Peerless Holdings Pty Ltd (2000) 103 FCR 577; [2000] FCA 1047 at [54]; Equiticorp Financial Services Ltd (NSW) v Equiticorp Financial Services Ltd (NZ) (1992) 29 NSWLR 260 at 297–8 (aff’d (1993) 32 NSWLR 50 at 106–7) and Canturi v Sita Coaches Pty Ltd, note 9 above (removal of more lucrative and congenial work).

18.

Skeate v Beale (1841) 11 Ad & E 983 at 990; 113 ER 688 at 690 and Barton v Armstrong, note 15 above. As to the position of duress against family members, see the cases referred to in Public Service Employees Credit Union Co-operative Ltd v Campion (1984) 56 ACTR 39 at 46–8.

19.

Mason v New South Wales, note 12 above, at 144 and K Mason et al, Mason and Carter’s Restitution Law in Australia, note 2 above, at [528].

20.

MUA v Geraldton Port Authority, note 14 above, at [391]; Crescendo Management Pty Ltd v Westpac Banking Corp, note 3 above, at 46; Equiticorp Financial Services Ltd (NSW) v Equiticorp Financial Services Ltd (NZ), note 17 above, at 296 (aff’d (1993) 32 NSWLR 50 at 106–7) and Universe Tankships Inc of Monrovia v International Transport Workers Federation, note 5 above, AC at 400–1; All ER at 88–9.

21.

Equiticorp Finance Ltd (in liq) v Bank of New Zealand, note 3 above, at 106 and Universe Tankships Inc of Monrovia v International Transport Workers Federation, note 5 above, AC at 400; All ER at 88.

22.

Crescendo Management Pty Ltd v Westpac Banking Corp, note 3 above, at 46 per McHugh JA.

23.

Dimskal Shipping Co SA v International Transport Workers Federation, note 5 above, AC at 167; All ER at 879–80. See also the cases at note 49 below.

24.

Cadbury Schweppes Pty Ltd v ALHMWU, note 7 above, at [19]; Equiticorp Financial Services Ltd (NSW) v Equiticorp Financial Services Ltd (NZ), note 17 above, at 297 (aff’d (1993) 32 NSWLR 50 at 106–7); B & S Contracts and Design Ltd v Victor Green Publications Ltd, note 5 above, at 423–4 and 425 and North Ocean Shipping Co Ltd v Hyundai Construction Co Ltd

[1978] 3 All ER 1170 at 1182. 25.

Granada Tavern v Smith, note 8 above, at [76] (refusal to assign shifts to a casual employee who had no legal right to be assigned those shifts); MUA v Geraldton Port Authority, note 14 above, at [367] and Frederick v South Australia, note 3 above, at [181].

26.

AMIEU v Peerless Holdings Pty Ltd, note 17 above, at [54].

27.

McKay v National Australia Bank Ltd [No 2] [1998] 4 VR 677 at 686–7.

28.

Public Service Employees Credit Union Co-operative Ltd v Campion, note 18 above, at 46–8.

29.

National Tertiary Education Industry Union (NTEIU) v Commonwealth of Australia (2002) 117 FCR 114; 114 IR 20; [2002] FCA 441 at [115] per Weinberg J (dealing with a statutory provision that relevantly mirrors the law concerning duress); Maritime Union of Australia v Burnie Port Corp Pty Ltd (2000) 101 IR 435; [2000] FCA 1189 at [66] (offer of new employment); Canturi v Sita Coaches Pty Ltd, note 9 above, at [38]; Schanka v Employment National (Administration) Pty Ltd, note 14 above, at [43] (aff’d (2000) 97 FCR 186; 170 ALR 42; 96 IR 449 at [23]); Liquor, Hospitality and Miscellaneous Union (LHMU) v Arnotts Biscuits Ltd (2010) 188 FCR 221; 198 IR 143; [2010] FCA 770 at [67]–[68] and Smith v William Charlick Ltd (1924) 34 CLR 38; cf Australian Services Union v Electrix Pty Ltd (1999) 93 IR 43; [1999] FCA 211, noted in J Tham, ‘ “Take It Or Leave It” AWAs: A Question of Duress?’ (1999) 12 AJLL 142.

30.

Canturi v Sita Coaches Pty Ltd, note 9 above, at [43]; Bishop v Ropolo Services Pty Ltd (2006) 153 FCR 357; 152 IR 165; [2006] FCA 592 at [26] and Schanka v Employment National (Administration) Pty Ltd (2001) 112 FCR 101; 105 IR 271; [2001] FCA 579 at [102].

31.

Granada Tavern v Smith, note 8 above, at [77]–[78]; Canturi v Sita Coaches Pty Ltd, note 9 above, at [88] and Bishop v Ropolo Services Pty Ltd, note 30 above, at [24].

32.

Universe Tankships Inc of Monrovia v International Transport Workers Federation, note 5 above, AC at 383; All ER at 75.

33.

Mason v New South Wales, note 12 above, at 142 and Hawker Pacific Pty Ltd v Helicopter Charter Pty Ltd, note 14 above, at 303–4.

34.

Universe Tankships Inc of Monrovia v International Transport Workers Federation, note 5 above, AC at 400; All ER at 88.

35.

Westpac Banking Corp v Cockerill (1998) 152 ALR 267 at 289 and Crescendo Management Pty Ltd v Westpac Banking Corp, note 3 above, at 45.

36.

Barton v Armstrong, note 15 above, AC at 121; NSWLR at 634 and Crescendo Management Pty Ltd v Westpac Banking Corp, note 3 above, at 45–6.

37.

Crescendo Management Pty Ltd v Westpac Banking Corp, note 3 above, at 46 per McHugh JA and Barton v Armstrong, note 15 above, AC at 120; NSWLR at 634. See the criticisms of this approach discussed in M Sindone, ‘The Doctrine of Economic Duress Part 2’ (1996) 14 ABR 114 at 115–16.

38.

Schanka v Employment National (Administration) Pty Ltd, note 8 above, at [23] and Granada Tavern v Smith, note 8 above, at [82]; cf MUA v Geraldton Port Authority, note 14 above, at [394].

39.

Universe Tankships Inc of Monrovia v International Transport Workers Federation, note 5 above, AC at 383; All ER at 75 and North Ocean Shipping Co Ltd v Hyundai Construction Co Ltd, note 24 above, at 1182.

40.

North Ocean Shipping Co Ltd v Hyundai Construction Co Ltd, note 24 above, at 1182 and B & S

Contracts and Design Ltd v Victor Green Publications Ltd, note 5 above, at 428. 41.

Universe Tankships Inc of Monrovia v International Transport Workers Federation, note 5 above, AC at 385; All ER at 76.

42.

Dimskal Shipping Co SA v International Transport Workers Federation, note 5 above, AC at 165; All ER at 879–80; Universe Tankships Inc of Monrovia v International Transport Workers Federation, note 5 above, AC at 385; All ER at 76–7 and Smith v William Charlick Ltd, note 29 above, at 56.

43.

The person need not be the employer: MUA v Geraldton Port Authority, note 14 above, at [384].

44.

LHMU v Arnotts Biscuits Ltd, note 29 above, at [66]. One relevant difference between the sections is that the former s 170NC of the WR Act referred to taking any industrial action ‘or other action’, a phrase construed in NTEIU v Commonwealth of Australia, note 29 above, at [92]–[96] and Inspector Cruse v Construction, Forestry, Mining and Energy Union (2008) 175 IR 447; [2008] FCA 1267 at [18].

45.

Community and Public Sector Union (CPSU) v Telstra Corp Ltd (2000) 108 FCR 52; 102 IR 394; [2000] FCA 1610 at [24]; Cadbury Schweppes Pty Ltd v ALHMWU, note 7 above, at [19]; Finance Sector Union v Commonwealth Bank of Australia (2000) 106 FCR 16; 106 IR 158; [2000] FCA 1468 at [21] and LHMU v Arnotts Biscuits Ltd, note 29 above, at [64].

46.

NTEIU v Commonwealth of Australia, note 29 above, at [103] and [115]; Seven Network (Operations) Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) (2001) 109 FCR 378; 184 ALR 65; 106 IR 404 at [41]; Inspector Cruse v Construction, Forestry, Mining and Energy Union, note 44 above; Williams v Automotive, Food, Metals, Engineering, Printing Kindred Industries Union [2009] FCA 86 at [36] and Construction, Forestry, Mining and Energy Union v Alfred (2011) 203 IR 78; [2011] FCAFC 13 at [12].

47.

See 4.4; cf the reference to overbearing of the will in CPSU v Telstra Corp Ltd, note 45 above, at [24] and Seven Network (Operations) Ltd v CEPU, note 46 above, at [41].

48.

Finance Sector Union v Commonwealth Bank of Australia, note 45 above, at [20] and [25] and NTEIU v Commonwealth of Australia, note 29 above, at [103].

49.

AMIEU v Peerless Holdings Pty Ltd, note 17 above, at [53]; CPSU v Telstra Corp Ltd, note 45 above, at [26]–[27]; Seven Network (Operations) Ltd v CEPU, note 46 above, at [41]; Australasian Meat Industry Employees’ Union v G & K O’Connor Pty Ltd (2000) 99 FCR 597; [2000] FCA 794 at [10].

50.

Seven Network (Operations) Ltd v CEPU, note 46 above, at [41]; Finance Sector Union v Commonwealth Bank of Australia, note 45 above, at [20] and CPSU v Telstra Corp Ltd, note 45 above, at [24].

51.

Explanatory Memorandum, at [1396].

52.

Explanatory Memorandum, at [254], [874] and [1396] (Illustrative Example 1).

53.

Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (2003) 214 CLR 51; 197 ALR 153 at [42]–[46] and Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 461–2; 46 ALR 402 at 412–13.

54.

Louth v Diprose (1992) 175 CLR 621 at 654; 110 ALR 1 at 26–7.

55.

Frederick v South Australia, note 3 above (concerning the resignation of a magistrate); Crewdson v NSW Department of Community Services (2005) 145 IR 376 (approved (2005) 152 IR 48) (setting aside terms of settlement); Duncan v Lipscombe Child Care Services Inc (2006) 150 IR

471; [2006] FCA 458 (allegations made in a letter of dismissal) and Mulcahy v Hydro-Electric Commission (1998) 85 FCR 170 (change of legislation procured by employer to remove entitlements). See also J Riley, Employee Protection at Common Law, note 2 above, pp 154–63. 56.

Commercial Bank of Australia Ltd v Amadio, note 53 above, CLR at 461–2, 474–5; ALR at 412– 3 and 423; ACCC v C G Berbatis Holdings Pty Ltd, note 53 above, at [46]; Louth v Diprose, note 54 above, CLR at 626–8; ALR at 4–7 and Bridgewater v Leahy (1998) 194 CLR 457; 158 ALR 66 at [72]–[76]. Undue influence is discussed in 4.14.

57.

Frederick v South Australia, note 3 above, at [159]–[165].

58.

Mulcahy v Hydro-Electric Commission, note 55 above, at 243 per Heerey J; Francis v South Sydney District Rugby League Football Club Ltd [2002] FCA 1306 at [296]–[301]; Macdonald v Australian Wool Innovation Ltd [2005] FCA 105 at [277]; Angel-Honnibal v Idameneo (No 123) Pty Ltd [2003] NSWCA 263 at [20]–[22]; Commercial Bank of Australia Ltd v Amadio, note 53 above, CLR at 461; ALR at 412–3; ACCC v C G Berbatis Holdings Pty Ltd, note 53 above, at [11]; Re Tristar Steering and Suspension Australia Ltd Certified Agreement 2003 (2007) 159 IR 368 at [61]–[64] and Hiser v Hardex Co-operative Ltd [1994] NSWSC 3412 (Santow J accepted, in dicta, that a CEO might be under a relevant disability when faced with a choice between resignation and being dismissed).

59.

Blomley v Ryan (1956) 99 CLR 362 at 405 at 415.

60.

Commercial Bank of Australia Ltd v Amadio, note 53 above, CLR at 461–2 and 474–5; ALR at 412–3 and 423; Blomley v Ryan, note 59 above, at 405 and 415; Freeman v Brown [2001] NSWSC 1028 (the disability was significant intellectual impairment, social dysfunction and alcoholism) and Maher v Honeysett and Maher Electrical Contractors Pty Ltd [2007] NSWSC 12 at [146]–[150] (the disability was depression and anxiety).

61.

Commercial Bank of Australia Ltd v Amadio, note 53 above, CLR at 462; ALR at 412.

62.

ACCC v C G Berbatis Holdings Pty Ltd, note 53 above, at [12]; Commercial Bank of Australia Ltd v Amadio, note 53 above, CLR at 476–7; ALR at 424–5 and Blomley v Ryan, note 59 above, at 392 and 415.

63.

Commercial Bank of Australia Ltd v Amadio, note 53 above, CLR at 462 and 467; ALR at 413 and 417.

64.

Commercial Bank of Australia Ltd v Amadio, note 53 above, CLR at 467; ALR at 413; Blomley v Ryan, note 59 above, at 415; Frederick v South Australia, note 3 above, at [166]–[176] and Mulcahy v Hydro-Electric Commission, note 55 above, at 243–4.

65.

Australian Competition and Consumer Commission (ACCC) v Zanok Technologies Pty Ltd [2009] FCA 1124 at [17].

66.

The meaning of conduct ‘in trade or commerce’ is discussed in 4.35.

67.

ACCC v Zanok Technologies Pty Ltd, note 65 above, at [16].

68.

ACCC v C G Berbatis Holdings Pty Ltd, note 53 above, at [6]–[8], [38], [42]–[46]; Duncan v Lipscombe Child Care Services Inc, note 55 above, at [37]. See also ACCC v Samton Holdings Pty Ltd (2002) 117 FCR 301; ACCC v C G Berbatis Holdings [No 2] (2000) 96 FCR 491 at 502; GPG (Australia Trading) Pty Ltd v GIO Australia Holdings Ltd (2001) 117 FCR 23; 191 ALR 342; [2001] FCA 1761 at [124]–[125]; Clough Engineering Ltd v Oil & Natural Gas Corporation Ltd [2007] FCA 881 at [78] and Francis v South Sydney District Rugby League Football Club Ltd, note 58 above, at [300].

69.

See Clough Engineering Ltd v Oil & Natural Gas Corporation Ltd, note 68 above, at [78] and

Pierce Bell Sales Pty Ltd v Frazer (1973) 130 CLR 575 at 587–8 and 590–1. 70.

Curtin v University of New South Wales (No 2) [2008] NSWSC 1236 at [49] and Francis v South Sydney District Rugby League Football Club Ltd, note 58 above, at [294].

71.

See generally J Phillips and M Tooma, Law of Unfair Contracts in NSW, Lawbook Co, Sydney, 2004, Ch 2.

72.

NTEIU v Commonwealth of Australia, note 29 above, at [121].

73.

See generally P Young et al, On Equity, Lawbook Co, Sydney, 2009, pp 311–28; J Carter et al, Contract Law in Australia, 7th ed, LexisNexis Butterworths, Australia, 2007, Ch 23; R Meagher et al, Meagher, Gummow & Lehane’s Equity: Doctrines and Remedies, 4th ed, LexisNexis Butterworths, Sydney, 2002, Ch 15 and P Parkinson (ed), The Principles of Equity, 2nd ed, Lawbook Co, Sydney, 2003, Ch 11.

74.

See O’Sullivan v Management Agency & Music Ltd [1985] 3 All ER 351 that concerned, in part, the service agreement of Gilbert O’Sullivan, balladeer of ‘Alone Again, Naturally’ who whilst a postal clerk entered into a disadvantageous contract with the manager he completely trusted, without independent advice. Another case concerning abuse of trust in the context of service is Osmond v Fitzroy (1731) 3 P Wms 129; 24 ER 997.

75.

There is a third category: a mutual mistake is when both parties are mistaken, but they do not share the same mistake. This is a very narrow category; it is doubtful whether there are many cases which illustrate genuine cases of mutual mistake and it will not be considered further.

76.

Solle v Butcher [1950] 1 KB 671 at 685 (both parties mistakenly believed the property was not subject to rent control laws) and Svanosio v McNamara (1956) 96 CLR 186 at 195–6.

77.

Avon County Council v Howlett [1983] 1 WLR 605 at 619–20; 1 All ER 1073 at 1084–5 and Kleinwort Benson Ltd v Lincoln City Council [1999] 2 AC 349 at 407; [1998] 4 All ER 513 at 560.

78.

Where the dispute is about the meaning of the agreed words, ordinarily the dispute involves, at best, a unilateral mistake: see, for example, Goldsbrough Mort & Co Ltd v Quinn (1910) 10 CLR 674 and Life Insurance Co of Australia Ltd v Phillips (1925) 36 CLR 60 at 80.

79.

McRae v Commonwealth Disposals Commission (1951) 84 CLR 377 at 410 and Solle v Butcher, note 76 above, at 690 and 692. As to restitutionary relief for mistake, see K Mason et al, Mason and Carter’s Restitution Law in Australia, note 2 above, Ch 4.

80.

Bell v Lever Bros Ltd [1932] AC 161 at 227. On a mistake as to a part of the subject matter, see Svanosio v McNamara, note 76 above.

81.

Bell v Lever Bros Ltd, note 80 above, at 235–6.

82.

Taylor v Johnson (1983) 151 CLR 422; 45 ALR 265; McRae v Commonwealth Disposals Commission, note 79 above, at 409 and Svanosio v McNamara, note 76 above, at 197 and 206.

83.

Ockerby & Co Limited v Watson (1918) 25 CLR 43 and McRae v Commonwealth Disposals Commission, note 79 above, at 407.

84.

For example, the parties may erroneously assume that neither will be incarcerated or die during the course of the employment. See 12.10.

85.

See the conditional offer cases discussed in 3.15 and the ‘subject to contract’ cases discussed in 3.52.

86.

Taylor v Johnson, note 82 above, CLR at 429–30; ALR at 269–70 and Solle v Butcher, note 76 above, at 690–1.

87.

Hartog v Colin & Shields [1939] 3 All ER 566.

88.

Lewis v Averay [1972] 1 QB 198 at 207 and Westpac Banking Corp v Dawson (1990) 19 NSWLR 614 at 628–9 (aff’d (1991) 104 ALR 295). It shall be assumed in the discussion below that third parties have not acquired rights on the faith of the contract.

89.

Shogun Finance Ltd v Hudson [2004] 1 AC 919; 1 All ER 215 and King’s Norton Metal Co Ltd v Edridge Merrett & Co Ltd (1897) 14 TLR 98. See also Cundy v Lindsay (1878) 3 App Cas 459.

90.

Lewis v Averay, note 88 above, at 207 and Papas v Bianca Investments Pty Ltd (2002) 82 SASR 581 at 584–5.

91.

Shogun Finance Ltd v Hudson, note 89 above, at [55], [169]–[178] and [187]–[191].

92.

J MacMillan, ‘Rogues, Swindlers and Cheats: The Development of Mistake of Identity in English Contract Law’ [2005] Camb LJ 711 and E Stern, ‘Objectivity, Legal Doctrine and the Law of Mistaken Identity’ (1995) 8 JCL 154.

93.

See 3.13; Boulton v Jones (1857) 2 H & N 564; 157 ER 232 and Cundy v Lindsay, note 89 above.

94.

See 3.79.

95.

Taylor v Johnson, note 82 above, CLR at 431; ALR at 270. See generally P Young et al, On Equity, note 73 above, pp 339–46 and R Meagher et al, Meagher, Gummow & Lehane’s Equity: Doctrines and Remedies, note 73 above, Ch 14.

96.

Solle v Butcher, note 76 above, at 693; Svanosio v McNamara, note 76 above, at 196 and Taylor v Johnson, note 82 above, CLR at 431; ALR at 270.

97.

As to specific performance see Chapter 15; as to rectification see 4.20 and Svanosio v McNamara, note 76 above, at 196.

98.

Mackenzie v Coulson (1869) LR 8 Eq 368 at 375 and Pukallus v Cameron (1982) 180 CLR 447 at 452; 43 ALR 243 at 247.

99.

Frederick E Rose (London) Ltd v William H Pim Junior & Co Ltd (1953) 2 QB 450 at 461 and Autoclenz Ltd v Belcher [2011] 4 All ER 745; [2011] UKSC 41 at [21].

100. Commissioner of Stamp Duties (NSW) v Carlenka Pty Ltd (1995) 41 NSWLR 329 at 332 at 344– 5 and Permanent Trustee Australia Ltd v FAI General Insurance Co Ltd (1998) 44 NSWLR 186 at 231 (the later appeals did not deal with this issue: (2001) 50 NSWLR 679 and (2003) 214 CLR 514); cf Williams v Macmahon Mining Services Pty Ltd (2009) 182 IR 104 at [79]. 101. Pukallus v Cameron, note 98 above, CLR at 452; ALR at 247 and Energy World Corp Ltd (ACN 009 124 994) v Maurice Hayes and Associates Pty Ltd (2007) 239 ALR 457; [2007] FCAFC 34 at [12]–[14]. 102. National Australia Bank Ltd v Budget Stationery Supplies Pty Ltd (1997) 217 ALR 365. See also Energy World Corp Ltd v Maurice Hayes and Associates Pty Ltd (2007) 239 ALR 457; [2007] FCAFC 34 at [12]–[14]. On the distinction between implied terms and rectification, see Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 346; 41 ALR 367 at 370. 103. Pukallus v Cameron, note 98 above, CLR at 452; ALR at 247 and Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603; [2007] NSWCA 65 at [259]. 104. Pukallus v Cameron, note 98 above, CLR at 452; ALR at 247 and National Australia Bank Ltd v Budget Stationery Supplies Pty Ltd, note 102 above, at 382. 105. Pukallus v Cameron, note 98 above, CLR at 452; ALR at 247; Ryledar Pty Ltd v Euphoric Pty

Ltd, note 103 above, at [273]–[315] and M Smith, ‘Rectification of Contracts for Common Mistake, Joscelyne v Nissen, and Subjective States of Mind’ (2007) 123 LQR 116. 106. Ryledar Pty Ltd v Euphoric Pty Ltd, note 103 above, at [269]–[287]; see further 5.9. 107. National Australia Bank Ltd v Budget Stationery Supplies Pty Ltd, note 102 above, at 382 and D McLauchlan, ‘The “Drastic” Remedy of Rectification for Unilateral Mistake’ (2008) 124 LQR 608. 108. Leibler v Air New Zealand Ltd (No 2) [1999] 1 VR 1 at [36]. 109. Riverlate Properties Ltd v Paul [1975] Ch 133 at 140; Commission for the New Towns v Cooper (Great Britain) Ltd [1995] Ch 259 at 292; [1995] 2 All ER 929 at 957 and National Australia Bank Ltd v Budget Stationery Supplies Pty Ltd, note 102 above, at 382. 110. A Roberts & Co Ltd v Leicestershire County Council [1961] Ch 555; 2 All ER 545 and Leibler v Air New Zealand Ltd (No 2), note 108 above, at [36]. 111. Nelson v Nelson (1995) 184 CLR 538 at 604; 132 ALR 133 at 186 per McHugh J. 112. Yango Pastoral Company Pty Ltd v First Chicago Australia Ltd (1978) 138 CLR 411 at 413; 21 ALR 585 at 587–8; Nelson v Nelson, note 111 above, CLR at 551–2 and 611; ALR at 143–4 and 191 and Miller v Miller (2011) 242 CLR 446; 275 ALR 611 at [24]–[26]. 113. Colen v Cebrian (UK) Ltd [2004] ICR 568; [2003] EWCA Civ 1676 at [19]. 114. Australia Meat Holdings Pty Ltd v Kazi [2004] 2 Qd R 458; [2004] QCA 147 at [40]. 115. Yango Pastoral Company Pty Ltd v First Chicago Australia Ltd, note 112 above, CLR at 413; ALR at 587–8 and Nelson v Nelson, note 111 above, CLR at 552; ALR at 143. 116. Australia Meat Holdings Pty Ltd v Kazi, note 114 above, at [14]–[24], [40]; cf WorkCover Corporation v Da Ping [1994] SASC 4466. 117. Yango Pastoral Company Pty Ltd v First Chicago Australia Ltd, note 112 above, CLR at 413, 430, 432; ALR at 588; Nelson v Nelson, note 111 above, CLR at 551–5, 594–5 and 611; ALR at 143–4 and 191; Miller v Miller, note 112 above, at [25]; Fitzgerald v F J Leonhardt Pty Ltd (1997) 189 CLR 215 at 227; 143 ALR 569 at 576–7 and Holdcroft v Market Garden Produce Pty Ltd [2001] 2 Qd R 381; [2000] QCA 396 at [18]–[19] and [26]. 118. See 5.83. 119. Nonferral (NSW) Pty Ltd v Taufia (1998) 43 NSWLR 312 at 315–16 and 320; 153 ALR 439 at 442 and 446–7 where the Migration Act made it an offence to perform work without permission; Inco Ships Pty Ltd v Hardman (2007) 167 FCR 294; 242 ALR 350 at [46]–[49] (contract for a seafarer without a valid medical clearance); Fitzgerald v F J Leonhardt Pty Ltd, note 117 above, CLR at 219 and 227; ALR at 570–1 and 576–7 and Yango Pastoral Company Pty Ltd v First Chicago Australia Ltd, note 112 above, CLR at 415–16; ALR at 590. See 3.65 concerning contracts between a minor and an employer that is not for necessaries. 120. Yango Pastoral Company Pty Ltd v First Chicago Australia Ltd, note 112 above, CLR at 431; ALR at 602. 121. McLennan v Surveillance Australia Pty Ltd (2005) 142 FCR 105; 139 IR 209; [2005] FCAFC 46 at [50]–[55] and Yango Pastoral Company Pty Ltd v First Chicago Australia Ltd, note 112 above, CLR at 431; ALR at 602. 122. Colen v Cebrian (UK) Ltd, note 113 above, at [23]; Fitzgerald v F J Leonhardt Pty Ltd, note 117 above, CLR at 219–20; ALR at 571; Hewcastle Catering Ltd v Ahmed [1992] ICR 626 and Hall v Woolston Hall Leisure Ltd [2000] 4 All ER 787; [2001] ICR 99 at [31].

123. Coral Leisure Group Ltd v Barnett [1981] ICR 503 at 509 per Browne-Wilkinson J. 124. Bruce v Tyley (1916) 21 CLR 277 at 294 (contract restricting the ability of person to serve his or her country). 125. A v Hayden (No 2) (1984) 156 CLR 532 at 543–4 and 553–7; 56 ALR 82 at 87 and 94–8; AG Australia Holdings Ltd v Burton (2002) 58 NSWLR 464; [2002] NSWSC 170 at [194] and Public Service Employees Credit Union Co-operative Ltd v Campion, note 18 above, at 46–8. 126. Noble v Maddison (1912) 12 SR (NSW) 435; Horne v Barber (1920) 27 CLR 494 and Wood v Little (1921) 29 CLR 564 at 569. 127. Miller v Karlinski (1945) 62 TLR 85 at 85–6; Hyland v J H Barker (North West) Ltd [1985] ICR 861 at 864–7; Napier v National Business Agency Ltd [1951] 2 All ER 264 at 266 and Holdcroft v Market Garden Produce Pty Ltd, note 117 above, at [18]–[19] and [26] (sham agreement for the sale of shares disguised as an employment contract); cf Enfield Technical Services Ltd v Payne [2008] ICR 1423; [2008] EWCA Civ 393. 128. Napier v National Business Agency Ltd, note 127 above, at 266 (cannot sever illegal part of consideration); Miller v Karlinski, note 127 above, at 85–6; Salvesen v Simons [1994] ICR 539; Newland v Simons & Willer (Hairdressers) Ltd [1981] ICR 521 at 531 and 533 and Wheeler v Quality Deep Ltd [2005] ICR 265; [2004] EWCA Civ 1085 at [29]. 129. Hyland v J H Barker (North West) Ltd, note 127 above, at 864–7 (unfair dismissal claim disallowed owing to attempt to avoid tax); Tomlinson v Dick Evans ‘U’ Drive Ltd [1978] ICR 639 and Newland v Simons & Willer (Hairdressers) Ltd, note 128 above, at 528. 130. Holdcroft v Market Garden Produce Pty Ltd, note 117 above, at [31] and Wheeler v Quality Deep Ltd, note 128 above, at [29]: see 4.26. 131. Pearce v Brooks (1866) LR 1 Ex 213; Hughes v Clewley (No 2) [1996] 1 Lloyd’s Rep 35 at 62 and Coral Leisure Group Ltd v Barnett, note 123 above. 132. Barac v Farnell (1994) 125 ALR 241 at 259–60 and 262–3 (a madam in a brothel entitled to the benefits of workers’ compensation laws). 133. See 11.22. 134. Horwood v Millar and Timber Trading Company [1917] 1 KB 305; see also Prince Saprai, ‘The Principle Against Self-Enslavement in Contract Law’ (2009) 26 JCL 25. 135. See 16.2. 136. De Francesco v Barnum (1890) 45 Ch D 430 at 438; Millican v Sullivan (1888) 4 TLR 203 at 204 and Tradition Australia Pty Ltd v Gunson (2006) 152 IR 395; [2006] NSWSC 298 at [27]– [30]. See 15.18. 137. Brooks v Burns Philp Trustee Co Ltd (1969) 121 CLR 432 at 458. 138. Nelson v Nelson, note 111 above, CLR at 604; ALR at 186 per McHugh J. 139. See, for example, Australia Meat Holdings Pty Ltd v Kazi, note 114 above, at [24]. 140. See also Hyland v J H Barker (North West) Ltd, note 127 above, at 868 (contract was held to be illegal for the four weeks in which payments were made to avoid tax, but was legal for the other 16 years of the contract). 141. Barac v Farnell, note 132 above, at 255–7 and 261–2. 142. A v Hayden (No 2), note 125 above, CLR at 545; ALR at 88–9; Weld-Blundell v Stephens [1919] 1 KB 520 at 533–4 and 547–8; Corrs Pavey Whiting & Byrne v Collector of Customs (Vic)

(1987) 14 FCR 434 at 455; 74 ALR 428 at 449; AG Australia Holdings Ltd v Burton, note 125 above, at [194] and Sullivan v Sclanders (2000) 77 SASR 419; [2000] SASC 273 at [41]–[46] and [66]–[71]. See also Nelson v Nelson, note 111 above, CLR at 549–51 and 595–6; ALR at 143 and 178–9. 143. J C Williamson Ltd v Lukey (1931) 45 CLR 282 at 292–3 and 297. 144. Master Education Services Pty Ltd v Ketchell (2008) 236 CLR 101; 249 ALR 44 at [11], [16] and [26]; Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd (2007) 232 CLR 1; 237 ALR 512 at [45]–[46]; Fitzgerald v F J Leonhardt Pty Ltd, note 117 above, CLR at 242–3; ALR at 589 and Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; 153 ALR 490 at [91]–[94]. 145. Yango Pastoral Company Pty Ltd v First Chicago Australia Ltd, note 112 above, CLR at 413, 415–16, 423; ALR at 588, 591–2 and 596. 146. See the cases at note 144. 147. Yango Pastoral Company Pty Ltd v First Chicago Australia Ltd, note 112 above, CLR at 413, 423; ALR at 588 and 596. 148. Project Blue Sky Inc v Australian Broadcasting Authority, note 144 above, at [91]–[94]. 149. Yango Pastoral Company Pty Ltd v First Chicago Australia Ltd, note 112 above, CLR at 413, 415–6 and 423; ALR at 588–9, 591–2 and 596 and Australia Meat Holdings Pty Ltd v Kazi, note 114 above, at [24]. 150. Nonferral (NSW) Pty Ltd v Taufia, note 119 above, NSWLR at 315–6 and 320; ALR at 442 and 446–7. 151. Yango Pastoral Company Pty Ltd v First Chicago Australia Ltd, note 112 above, CLR at 426–7; ALR at 588–9; Nelson v Nelson, note 111 above, CLR at 596–7 and 612–3; ALR at 179 and 192–3; Fitzgerald v F J Leonhardt Pty Ltd, note 117 above, CLR at 227, 244 and 247; ALR at 576–7, 590 and 593; Inco Ships Pty Ltd v Hardman, note 119 above, at [46]–[49] and United Firefighters’ Union of Australia v Country Fire Authority (2007) 164 IR 169; [2007] FCA 853 at [32] (aff’d [2007] FCAFC 169). 152. Yango Pastoral Company Pty Ltd v First Chicago Australia Ltd, note 112 above, CLR at 434; ALR at 588–9. 153. Nelson v Nelson, note 111 above, CLR at 604–5; ALR at 186. 154. Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 426–9 and 453–7; 131 ALR 422 at 431–3 and 452–5 and United Firefighters’ Union of Australia v Country Fire Authority, note 151 above, at [32] (aff’d [2007] FCAFC 169). To the extent that Re Journalists (Metropolitan Daily Newspapers) Award (1959) 4 FLR 164 decided to the contrary it should no longer be regarded as good law; cf the statute which rendered the notice invalid in Automatic Fire Sprinklers v Watson (1946) 72 CLR 435 at 459–60, 469–72 and 477–9. 155. NTEIU v University of Wollongong [2002] FCA 31 at [38]–[39]. 156. Fire and All Risks Insurance Co Ltd v Powell [1966] VR 513 at 523. 157. Hewcastle Catering Ltd v Ahmed, note 122 above, at 637–8. 158. See J Carter et al, Contract Law in Australia, note 73 above, pp 610–19; Fitzgerald v F J Leonhardt Pty Ltd, note 117 above, CLR at 220; ALR at 571; Hussein v Secretary of the Dept of Immigration and Multicultural Affairs (No 2) (2006) 155 FCR 304; 157 IR 405; [2006] FCA 1263 at [61]–[68]; Hall v Woolston Hall Leisure Ltd, note 122 above, at [29] and Colen v

Cebrian (UK) Ltd, note 113 above, at [23]. 159. Nelson v Nelson, note 111 above, CLR at 604 and 611–2; ALR at 186 and 191; Fitzgerald v F J Leonhardt Pty Ltd, note 117 above, CLR at 229; ALR at 578 and Enfield Technical Services Ltd v Payne, note 127 above, at [27]–[30] and [37]. 160. Newland v Simons & Willer (Hairdressers) Ltd, note 128 above, at 527. 161. Hutchinson v Scott (1905) 3 CLR 359 at 369. 162. Alexander v Rayson [1936] 1 KB 169. 163. Hewcastle Catering Ltd v Ahmed, note 122 above. See also the cases at note 128. 164. Enfield Technical Services Ltd v Payne, note 127 above, at [27]–[30] and [37]. 165. Nelson v Nelson, note 111 above, CLR at 605; ALR at 186–7 and Fitzgerald v F J Leonhardt Pty Ltd, note 117 above, CLR at 229; ALR at 578. 166. Nelson v Nelson, note 111 above, CLR at 605; ALR at 186–7 and Fitzgerald v F J Leonhardt Pty Ltd, note 117 above, CLR at 229; ALR at 578. 167. See generally J Riley, Employee Protection at Common Law, note 2 above, Ch 7; K Godfrey, ‘The Trade Practices Act Alternative’ (2005) 18 AJLL 136 at 139–44 and D Mertz, ‘ “The Persistent Side-wind”: The Notion of “In Trade or Commerce” under s 52 of the Trade Practices Act 1974’ (2001) 9 CCLJ 128 at 141–2. 168. O’Neill v Medical Benefits Fund of Australia (2002) 122 FCR 455; [2002] FCAFC 188 (representation that the position was for the long haul); WT Partnership (Australia) Pty Ltd v Sheldrick (1998) 89 IR 206 at 236–7; [1998] FCA 1794 (representation that the employer was making a ‘long term commitment’) (aff’d on other grounds at (1999) 96 IR 202; [1999] FCA 843) and West v TWG Services Ltd (2009) 189 IR 97; [2009] FCA 1052 at [34] (the alleged representation was for permanent employment). 169. Australian Competition and Consumer Commission (ACCC) v Zanok Technologies Pty Ltd, note 65 above, at [33] and Walker v Salomon Smith Barney Securities Pty Limited (2003) 140 IR 433; [2003] FCA 1099 at [210] (aff’d (2006) 233 ALR 687; [2006] FCAFC 101) (misleading representation that the employer would employ the prospective employee on certain terms). 170. ACCC v Zanok Technologies Pty Ltd, note 169 above (false guarantee of future employment after training) and Macdonald v Australian Wool Innovation Ltd, note 58 above, at [277] (representation that project would proceed). 171. Moss v Lowe Hunt and Partners Pty Ltd [2010] FCA 1181 at [36]–[64] (misleading representation that the employer was financially successful) and ACCC v Zanok Technologies Pty Ltd, note 169 above (misleading representation that the employer was part of a global company). 172. See, for example, WT Partnership (Australia) Pty Ltd v Sheldrick, note 168 above, and O’Neill v Medical Benefits Fund of Australia, note 168 above. 173. Walker v Salomon Smith Barney Securities Pty Limited, note 169 above, at [187] (aff’d (2006) 233 ALR 687; [2006] FCAFC 101); McKellar v Container Terminal Management Services Ltd (1999) 165 ALR 409; [1999] FCA 1101 at [117]; Wright v TNT Management Pty Ltd (1989) 15 NSWLR 679 at 691–2 and Robertson v Knott Investments Pty Ltd (No 3) [2010] FCA 1074 at [13]. 174. Walker v Salomon Smith Barney Securities Pty Limited, note 169 above, at [187] (aff’d (2006) 233 ALR 687; [2006] FCAFC 101). 175. Holloway v Gilport Pty Ltd (1995) 59 IR 305 at 310–11.

176. Westpac Banking Corporation v Northern Metals Pty Ltd (1989) 14 IPR 499 at 502 and Moss v Lowe Hunt and Partners Pty Ltd, note 171 above, at [44]–[46]. 177. See also Fair Work Act s 349 discussed in Hadgkiss v Construction, Forestry, Mining and Energy Union (No 3) (2007) 160 IR 263; [2007] FCA 87 at [288]. 178. See generally Shop Distributive & Allied Employees’ Association v Karellas Investments Pty Ltd (2008) 166 FCR 562; 247 ALR 537; 171 IR 439. See 14.32 on remedies for the contravention. 179. Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594; 92 ALR 193. 180. See Nelson v Concrete Constructions (NSW) Pty Ltd (1989) 86 ALR 88 at 89. The facts were agreed. The whole matter from inception resembled a moot. If the employee’s argument was accepted it would have opened a new avenue for injured workers to sue their employers and thereby avoid the limitations on that right imposed by state laws. The Solicitors General for NSW and Victoria intervened to support the employer’s argument. See Barto v GPR Management Services (1991) 33 FCR 389 at 393; 105 ALR 339 at 343. 181. Referring here to Bank of NSW v Commonwealth (1948) 76 CLR 1 at 381. 182. Concrete Constructions (NSW) Pty Ltd v Nelson, note 179 above, CLR at 603–4, 613; ALR at 195–6, 205 per Mason CJ, Deane, Dawson and Gaudron JJ. 183. Dataflow Computer Services Pty Ltd v Goodman (1999) 168 ALR 169; [1999] FCA 1625 at [11]–[21]; Barto v GPR Management Services, note 180 above, FCR at 393; ALR at 343 and Stoelwinder v Southern Health Care Network (2000) 177 ALR 501; 97 IR 76. 184. Wright v TNT Management Pty Ltd, note 174 above, at 695; Stoelwinder v Southern Health Care Network, note 183 above, at [6] and Walker v Salomon Smith Barney Securities Pty Limited, note 169 above, at [185] (aff’d (2006) 233 ALR 687; [2006] FCAFC 101). Such conduct would often be covered by s 31 of the ACL referred to in 4.33. 185. Barto v GPR Management Services, note 180 above, FCR at 394–5; ALR at 344–5; Patrick v Steel Mains Pty Ltd (1987) 77 ALR 133 at 136 (negotiations about a transfer of premises) and Stoelwinder v Southern Health Care Network, note 183 above, at [6]. 186. McCormick v Riverwood International (Australia) Pty Ltd (1999) 167 ALR 689; [1999] FCA 1640 at [30] (aff’d on other grounds (2000) 177 ALR 193; [2000] FCA 889). 187. Despite this dicta, the section is not limited in its application to senior staff and has been applied to all manner of employees. See, for example, Patrick v Steel Mains Pty Ltd, note 185 above (maintenance foreman). 188. Barto v GPR Management Services, note 180 above, FCR at 394–5; ALR at 344–5 per Wilcox J; Saad v TWT Ltd (NSWSC, Ireland J, 200112/91, 19 May 1995, unreported, an issue not addressed on appeal [1998] NSWSC 282); cf Martin v Tasmania Development and Resources (1999) 163 ALR 79; 89 IR 98; [1999] FCA 593 at [70]–[81] per Heerey J (aff’d on other grounds (2000) 97 IR 66; [2000] FCA 414) and Mulcahy v Hydro-Electric Commission, note 55 above, at 212–13. Each of these decisions concerned s 52 of the TPA, the predecessor of s 18 of the ACL. 189. Concrete Constructions (NSW) Pty Ltd v Nelson, note 179 above; cf Wright v TNT Management Pty Ltd, note 173 above, at 695; see also Curtin v University of New South Wales (No 2), note 70 above (representation that outsourcing was in the interest of the employer was not in trade or commerce); Chaplin v Brogan (1998) 146 FLR 243; [1998] VSC 28 at [35] (representations about a loan agreement between employer and employee, its repayment and the payment of wages were in trade or commerce); Hebbard v Bell Potter Securities Ltd (2005) 216 ALR 779, at [5] and [32]; Moss v Lowe Hunt and Partners Pty Ltd, note 171 above, at [84] and [101] and Wesfarmers Dalgety Ltd v Williams [2005] WASC 287.

190. Firewatch Australia Pty Ltd v Country Fire Authority (1999) 93 FCR 520; [1999] FCA 761 at [62]–[67]. 191. Barrick v Qantas Flight Catering Ltd (2007) 163 IR 207; [2007] FCA 835 at [80] and [88] and Duncan v Lipscombe Child Care Services Inc, note 55 above, at [30]–[34]. 192. Barrick v Qantas Flight Catering Ltd, note 191 above, at [80] and [88]. 193. Curtin v University of New South Wales (No 2), note 70 above, at [37]–[39]; cf Moss v Lowe Hunt and Partners Pty Ltd, note 171 above, at [84]. 194. Dataflow Computer Services Pty Ltd v Goodman, note 183 above, at [11]–[21] (a misleading circular sent out by an employee to the employer’s customers falsely informing them of the employer’s future plans to undermine the customers’ business) and Advanced Hair Studio Pty Ltd v TVW Enterprises Ltd (1987) 18 FCR 1 at 14; 77 ALR 615 at 627–8. 195. Dataflow Computer Services Pty Ltd v Goodman, note 183 above, at [19]. 196. Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 at 228; 18 ALR 639; Moss v Lowe Hunt and Partners Pty Ltd, note 171 above, at [46]; Walker v Salomon Smith Barney Securities Pty Limited, note 169 above, at [176] (aff’d (2006) 233 ALR 687; [2006] FCAFC 101); Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 197; 42 ALR 1 at 5 and Holloway v Gilport Pty Ltd, note 175 above, at 307–8. 197. Moss v Lowe Hunt and Partners Pty Ltd, note 171 above, at [46]; Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82 at 87; 55 ALR 25 at 30; Dataflow Computer Services Pty Ltd v Goodman, note 183 above, at [10]; Walker v Salomon Smith Barney Securities Pty Limited, note 169 above, at [176] (aff’d sub nom Walker v Citigroup Global Markets Australia Pty Ltd (2006) 233 ALR 687; [2006] FCAFC 101) and Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd, note 197 above, CLR at 197; ALR at 5. 198. Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; 212 ALR 357 at [36]–[39]. See also West v TWG Services Ltd, note 168 above, at [34]. 199. Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 at 40; 110 ALR 608 at 610. See also Moss v Lowe Hunt and Partners Pty Ltd, note 171 above, at [63] and Wesoky v Village Cinemas International Pty Ltd [2001] FCA 32 at [74]–[83] (misleading conduct was informing employee that the written contract conformed with the pre-contractual negotiations); Nagy v Masters Dairy Ltd (1996) 150 ALR 273; [1996] FCA 1096. 200. Moss v Lowe Hunt and Partners Pty Ltd, note 171 above, at [46] and [52]. 201. Moss v Lowe Hunt and Partners Pty Ltd, note 171 above, at [86] and Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd, note 196 above, CLR at 227. 202. ACL s 236, replacing the former statutory test in TPA s 82 that referred to loss and damage ‘caused by’ the contravention: see Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 at 525; 109 ALR 247. 203. Moss v Lowe Hunt and Partners Pty Ltd, note 171 above, at [87] and [98] per Katzmann J; San Sebastian Pty Ltd v Minister administering the Environmental Planning and Assessment Act 1979 (1986) 162 CLR 340 at 366; 68 ALR 161 and I & L Securities Pty Limited v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109; 192 ALR 1 at [25]. 204. Moss v Lowe Hunt and Partners Pty Ltd, note 171 above, at [87]; O’Neill v Medical Benefits Fund of Australia, note 168 above, at [22]–[23] and West v TWG Services Ltd, note 169 above, at

[30]–[34]. 205. Wesfarmers Dalgety Ltd v Williams, note 189 above, at [320]. 206. O’Neill v Medical Benefits Fund of Australia, note 169 above, at [23]; similar facts also arose in WT Partnership (Australia) Pty Ltd v Sheldrick, note 168 above; Walker v Salomon Smith Barney Securities Pty Limited, note 168 above and Robertson v Knott Investments Pty Ltd (No 3), note 173 above. 207. Hatt v Magro (2007) 34 WAR 256; [2007] WASCA 124 at [32]–[35]. 208. Ting v Blanche (1993) 118 ALR 543 at 552–3; Moss v Lowe Hunt and Partners Pty Ltd, note 171 above, at [71] (stating ‘the business is in a great position’ is both a representation relating to the future and also a statement of present opinion) and Gray v University of Western Australia (2008) 246 ALR 603; [2008] FCA 498 at [1581] (aff’d (2009) 179 FCR 346; 259 ALR 224). 209. Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82 at 88; 55 ALR 25 at 31; Walker v Salomon Smith Barney Securities Pty Limited, note 169 above, at [201] (aff’d (2006) 233 ALR 687; [2006] FCAFC 101); Gray v University of Western Australia, note 208 above, at [1589] (aff’d (2009) 179 FCR 346; 259 ALR 224) and Keays v J P Morgan Administrative Services Australia Limited [2011] FCA 358 at [82]–[86]. 210. Patrick v Steel Mains Pty Ltd, note 185 above, at 137–9 (a decision made prior to the enactment of s 51A of the TPA, the predecessor to s 4 of the ACL); Hatt v Magro, note 207 above, at [32]– [35] and WT Partnership (Australia) Pty Ltd v Sheldrick, note 168 above, IR at 236–7 (representation that employment was to be for the long term was not misleading when made). 211. Cummings v Lewis (1993) 113 ALR 285 at 294. These provisions were previously contained in s 51A of the TPA other than subs 4(3) which is new. 212. As to the meaning of ‘with respect to’ and ‘future matters’, see Ting v Blanche, note 208 above, at 552–3 and Smith v Federal Commissioner of Taxation (1988) 164 CLR 513 at 533; 74 ALR 411. 213. Ting v Blanche, note 208 above, at 552–3; Walker v Salomon Smith Barney Securities Pty Limited, note 169 above, at [178]–[179] (aff’d (2006) 233 ALR 687; [2006] FCAFC 101) and Robertson v Knott Investments Pty Ltd (No 3), note 173 above, at [16]. 214. Fubilian Catering Services Ltd v Compass Group (Aust) Pty Ltd [2007] FCA 1205 at [545]; North East Equity Pty Ltd v Proud Nominees Pty Ltd (2010) 269 ALR 262; [2010] FCAFC 60 at [29] and Macdonald v Australian Wool Innovation Ltd, note 58 above, at [267]. 215. O’Neill v Medical Benefits Fund of Australia, note 168 above, at [16]. 216. Paragraph 29 of the Explanatory Memorandum to the Trade Practices Amendment (Australian Consumer Law) Bill (No 2) 2010. This is in accord with the approach taken in McGrath v Australian Naturalcare Products Pty Ltd (2008) 165 FCR 230; 246 ALR 514 at [192] and Robertson v Knott Investments Pty Ltd (No 3), note 173 above, at [16]. 217. Ting v Blanche, note 208 above, at 552–3; Walker v Salomon Smith Barney Securities Pty Limited, note 169 above, at [178]–[179]; Macdonald v Australian Wool Innovation Ltd, note 58 above, at [267] and Gray v University of Western Australia, note 208 above, at [1582] (aff’d (2009) 179 FCR 346; 259 ALR 224) (s 4 ‘requires that a statement about a future matter without reasonable grounds be treated as if it is misleading or deceptive’). 218. O’Neill v Medical Benefits Fund of Australia, note 168 above, at [20]; when the employer denies the representation was made and no evidence is adduced, see Robertson v Knott Investments Pty Ltd (No 3), note 173 above, at [17]; Cummings v Lewis, note 211 above, at 294 and King v GIO

Australia Holdings Ltd (2001) 184 ALR 98; [2001] FCA 308 at [31]; cf West v TWG Services Ltd, note 168 above, at [28]. 219. Paragraph 30 of the Explanatory Memorandum to the Trade Practices Amendment (Australian Consumer Law) Bill (No 2) 2010. 220. North East Equity Pty Ltd v Proud Nominees Pty Ltd, note 214 above, at [29]. 221. Paragraph 31 of the Explanatory Memorandum to the Trade Practices Amendment (Australian Consumer Law) Bill (No 2) 2010; cf the earlier approach under Hatt v Magro, note 207 above, at [43]–[55]. 222. Fubilian Catering Services Ltd v Compass Group (Aust) Pty Ltd, note 214 above, at [548] per French J, referred to approvingly in North East Equity Pty Ltd v Proud Nominees Pty Ltd, note 214 above, at [30]. 223. Walker v Salomon Smith Barney Securities Pty Limited, note 169 above, at [189]–[212] (aff’d (2006) 233 ALR 687; [2006] FCAFC 101). See also Macdonald v Australian Wool Innovation Ltd, note 58 above, at [277] (representation that project would go ahead was true when made, but turned out to be incorrect due to a change in management) and Robertson v Knott Investments Pty Ltd (No 3), note 173 above, at [54]–[61].

[page 197]

Chapter 5 Sources of the Parties’ Rights and Duties Introduction Overview Terms defined and categorised Promissory terms and representations Proof and Construction of the Terms: The Parol Evidence Rule and Its Exceptions Introduction and overview The factual and legal context of the contract Is the document the sole repository of the agreement? Oral representations and later written terms Prior negotiations, declarations of subjective intent and subsequent conduct Proving implied terms, the parties and the subject matter Express Terms Terms incorporated by signature Terms incorporated by notice Terms incorporated by a course of dealing Terms incorporated by reference Does the bridging term give contractual effect to the external source document?

The alteration and termination of the external source document Is the term apt for incorporation? Implied Terms Overview and implicit terms Terms Implied in Law [page 198] Terms Implied in Fact The nature of a term implied in fact Implication of terms in formal and informal contracts Particular aspects of the tests Terms Implied by Custom Implication of a term based on custom: the test Particular aspects of the test The rarity of terms based on custom and ‘crystallised custom’ Past conduct as a source of binding obligations: a comment Statutes, Industrial Instruments and Contract The Fair Work Act, modern awards and enterprise agreements Contracts and conduct in breach of a statute or an industrial instrument Statutes and contract in public sector employment Industrial Instruments as the Source of Contractual Rights Statutory and contractual rights Industrial instruments as express terms in employment contracts Industrial instruments as implied terms in employment contracts Collective agreements as union–employer contracts

INTRODUCTION Overview 5.1 There are four sources of the rights and obligations of the parties to an employment contract: the contract’s express terms; the contract’s implied terms; statutes, including industrial instruments made pursuant to statutes; and the common law. This simple classification belies the extraordinary complexity in identifying all the obligations of the parties. This chapter deals with the first three of the sources. The fourth source is principally discussed in Chapters 7 and 8. All employees have a contract of employment. There are express terms in all employment contracts. In all (or almost all)1 employment contracts there are at least terms implied in law. Terms implied by other means, though [page 199] often alleged, are in practice reasonably rare. The common law imposes a series of duties on the parties, principally through the medium of implied terms but also through the law of tort by causes of action such as negligence and deceit. The common law also imposes a series of equitable duties, principally on employees, such as obligations of confidence and fiduciary obligations: see Chapters 7 and 8. The common law also creates rights and obligations through contractual doctrines (such as frustration), the creation of equitable rights and obligations (such as obligations of confidence and fiduciary obligations) and through causes of action in tort such as negligence and deceit. These series of rules and doctrines are considered throughout the text. The nature of some of these duties is somewhat unclear.2 Express terms may be oral or written. The relationship between oral terms and written agreements is considered in 5.16–5.20. A written term may be given contractual force because it is incorporated into the contract by a party’s signature (see 5.28–5.29), incorporated by notice of the term (see 5.30), incorporated through a course of dealings (see 5.31–5.33) or incorporated by reference: see 5.34–5.45.

5.2 There are four types of implied terms. First, terms implied in law which are implications arising from the nature of the contract itself. They are terms implied in all employment contracts, or all employment contracts of a particular type: see 5.48–5.52. Second, there are terms implied by the custom, which are implications arising from a custom or usage in the industry: see 5.66–5.72. Third, there are terms implied in fact which are implications arising from considerations of business efficacy. These are further divided into terms implied where the contract is largely written and those where the contract is largely unwritten: see 5.53–5.65. Finally, there are implicit terms which arise by inferences (or perhaps implications) from the express terms of the contract: see 5.47. As to statutory sources of obligations, the principal statute governing employment in Australia is the Fair Work Act 2009 (Cth). The relationship between contracts, that Act and industrial instruments (including modern awards and enterprise agreements) is discussed in 5.81–5.82. The principles governing contracting out and satisfaction of statutory entitlements are examined in 5.83–5.90. The special position of public sector employees is referred to in 5.91–5.93. At 5.94–5.113 the particular issues associated with the contractual status and enforceability of collective agreements are examined. [page 200]

Terms defined and categorised 5.3 The word ‘term’ has a variety of meanings. Practitioners often speak of, and do not distinguish between, the ‘terms and conditions of employment’.3 In some contexts it is important to distinguish between different types of terms. Some statements made by the parties will give rise to contractual rights and others will not. Those that give rise to contractual rights are called promissory terms and those that do not are called representations.4 Promissory terms (usually just called terms) can be categorised in a variety of ways. They can be divided into express terms, implied terms and terms

created by a statute. To determine whether the breach of a term gives rise to a right to terminate, the contract it is necessary to distinguish between a condition, a warranty and an intermediate term.5 There is a hierarchy of terms in the contract. At the apex are usually terms imported by statute,6 followed by the express terms, implicit terms, terms implied in law and then (in no particular order) other implied terms based on the presumed intention of the parties. The hierarchical superiority of statutory and express terms of the contract is established by rules that proscribe the implication of a term that is inconsistent with the express terms of the contract or a statute. For example, a term based on a custom will not be implied where the term is inconsistent with the express terms of the contract or a statute. As the implication is based on the presumed intention of the parties, it yields to the express terms that evidence the actual intention of the parties.7 It is necessary to first establish and construe the express terms of the contract (including the identification of any implicit terms)8 before the implication of any terms is considered.9 [page 201]

Informing employees of the terms of employment 5.4 Although the law in Australia and the United Kingdom concerning the creation of express terms is very similar, in practice the way in which express terms of employment contracts are created is quite different. For the last 50 years in the United Kingdom employers have been required by statute to provide employees particulars of the employment. The employer must provide written particulars of the rate of remuneration, the regularity of the payment, the length of notice, the place of work and the title of the position. Where they are agreed, the employer must provide particulars of the hours of work, terms relating to holidays and pension rights and notice of the collective agreements that apply to the employment.10 The written particulars will often be express terms of the contract or strong prima facie evidence of the terms of the contract.11 In Australia there is no similar statutory requirement. Since 2010 s 124 of

the Fair Work Act has required each employer to provide each new national system employee a statement prepared by the Fair Work Ombudsman called the Fair Work Information Statement. This sets out information about the National Employment Standards (NES), modern awards, enterprise agreements and certain other rights. Under most modern awards there is an obligation to ensure national system employees have access to the award, either by posting it in a prominent place or by providing a copy electronically.12 Under s 180 of the Fair Work Act the employer must take reasonable steps to provide employees with a copy of a proposed enterprise agreement prior to voting on it. The provision of these documents in accordance with the employer’s statutory duty does not, in itself, create a contractual right to the benefits referred to in the Fair Work Information Statement, the Fair Work Act, an award or enterprise agreement. A national system employee is entitled to inspect and copy certain records relating to employment, but these do not include the terms of the contract.13 5.5 The existence of an implied obligation to inform the employee of certain terms was considered by the House of Lords in Scally v Southern [page 202] Health and Social Services Board. The terms of the contract had been negotiated between the employer and the employee’s representatives. The employee was unaware of a particular term that granted him a significant benefit. The House of Lords held that where a contract of employment, negotiated between employers and a representative body, contained a particular term conferring upon the employee a valuable right contingent upon his or her acting to obtain the benefit, of which the employee could not be expected to be aware unless the term was brought to the attention of the employee, there was an implied obligation on the employer to take reasonable steps to bring the term to the attention of the employee.14

Promissory terms and representations 5.6 A distinction is drawn between statements that are promissory terms, which are afforded binding contractual force, and statements that are mere

representations, which are not. A promissory term is a contractual statement that amounts to a promise, guarantee or undertaking that the statement is true. There is a world of difference between stating, on the one hand, ‘I shall pay you $800 per week’ or ‘I will employ you for at least three years’ and, on the other hand, stating ‘we are a great employer’ or ‘if you work hard, you will have a great future here’.15 In this text a reference to a term means a reference to a promissory term, not a representation. Terms have binding contractual force and their breach gives rise to an action for breach of contract. A breach of a representation does not give rise to an action for breach of contract. Nor can its breach be enjoined by an injunction or specifically enforced. However, its non-fulfilment may have legal significance. A misleading or deceptive representation may give rise to an action under the Australian Consumer Law 2010 (Cth) or the Fair Work Act. A fraudulent misrepresentation may give rise to the right to rescind the contract. A representation may form the basis of an estoppel, or an action in tort for negligent representation or for deceit.16 [page 203]

Distinguishing terms from representations 5.7 Whether a statement is a promissory term or a representation depends on the intention of the parties.17 The issue is whether a reasonable person in the position of the employee, on receipt of the statement, would conclude that the employer intended to be bound by the statement. That intention is to be ascertained in the ordinary manner in contract by considering the words and actions of the employer and not by seeking to discern the employer’s subjective intention.18 It is not necessary for the employee to prove reliance on the statement or that the employer intended that the statement act as an inducement to contract. However, a statement that is designed to induce, or does in fact induce, the formation of the contract is more likely to be promissory.19 The intention is to be inferred from the totality of the evidence and there is no one fact that is determinative.20 There are a series of considerations courts commonly take into account when determining whether the parties have such

an intention, including the content of the statement. A reasonable person is unlikely to conclude that vague assurances about the future, mere puffery and statements in aspirational language are intended to be legally binding.21 For example, in the Nikolich case the statement that the employer ‘will take every practicable step to provide and maintain a safe and healthy work environment for all people’ was held to be promissory but the statement ‘[the employer’s] culture and family approach means each person is able to work positively and is treated with respect and courtesy’ was a mere representation.22 5.8 Also relevant in determining if a statement is a term or a representation will be the timing of the statement, the context in which the statement was made, the form of the statement and whether the statement was later included in a written record of the terms of the [page 204] contract.23 This approach is illustrated in Saad v TWT Limited.24 Ms Saad had a job interview over the phone in which she was told that a position had become available because an employee, Ms Masters, had resigned. The remuneration and the position were discussed. Ms Saad was told she would take over Ms Masters’ list of clients to earn commission. Ms Saad accepted the offer and asked for written confirmation. The short letter that was provided set out the position, remuneration and start date. It made no specific mention of Ms Saad taking over Ms Masters’ old client list. As Ms Masters withdrew her resignation, the employer decided not to assign Ms Masters’ client list to Ms Saad. The New South Wales Court of Appeal concluded that the statement that Ms Saad would take over Ms Masters’ client list was contractually binding and not a mere representation. The court stated: In determining whether the phone calls also formed part of the contract, the intention of the parties is the critical factor. The fact that parts of the oral discussions were not included in the letter of 29 May 1990 is some evidence that they were not intended to be contractual. However … this is not conclusive. The test [adopted is] that of an intelligent bystander in the situation of the parties.

PROOF AND CONSTRUCTION OF THE TERMS:

THE PAROL EVIDENCE RULE AND ITS EXCEPTIONS Introduction and overview 5.9 This is not a book about the construction of contracts.25 However, a few paragraphs need to be dedicated to some matters of construction, the parol evidence rule, the proof of the terms of the contract and the role of a written document containing contractual terms. The parol evidence rule has two aspects. First, it excludes the use of some extrinsic evidence in determining the meaning of words used in a document containing contractual terms.26 The rule excludes evidence of earlier drafts of the contract, previous correspondence, preliminary agreements, certain evidence of negotiations between the parties and conduct subsequent to the making of the contract. However, the [page 205] rule does not exclude evidence of the factual and legal context of the agreement. Where the terms of the contract are contained in a document, the construction of the terms is usually an issue of law.27 The second aspect of the parol evidence rule is more contentious. According to the traditional formulation (which has been subject to some valid criticism)28 where the parties have reduced the terms of their contract to writing, then (subject to certain exceptions) evidence cannot be adduced to add to, vary or contradict the written document.29

The factual and legal context of the contract 5.10 Evidence of matters extrinsic to the text of the written contract is not admissible to prove the meaning of the terms unless the text is ambiguous or susceptible to more than one meaning.30 Ambiguity in this context has a broad meaning.31 When there is ambiguity the court must take into account

the context in which the contract was made.32 The context in this sense is the same as the background, factual matrix or the [page 206] surrounding circumstances.33 Evidence of the surrounding circumstances cannot be led to contradict the plain meaning of the terms.34 When construing the terms the court must ‘place itself in thought in the same factual matrix as that in which the parties were’.35 This involves placing the hypothetical reasonable person in the position of the parties and attributing to the reasonable person what the parties knew in the context of their mutual dealings.36 A court may receive evidence of the purpose and object of the transaction, including its genesis, background, context and the market (if any) in which the parties were operating.37 However, it must be material that is known38 to both parties: That a fact represents a part of the history as to why one party came to a contract does not make it admissible. The reasonable person who is hypothesised to understand the words of the contract is placed in the position of the contracting parties, or, if relevant, their agents — not one or some only of them. That requires the fundamental element of mutuality of known facts and background. To permit, under the guise of the reasonable person, background facts known only to one person to be attributed to the reasonable person would tend to re-introduce the subjective understanding of one party by permitting or requiring the contract to be interpreted by reference to one party’s knowledge only.39

[page 207] 5.11 The relevant context includes both the factual and legal context.40 Employment in Australia occurs in a legal matrix that usually consists of the contract, applicable industrial instruments and statutes.41 For example, in Amcor Ltd v CFMEU the High Court was interpreting the meaning of the word ‘position’ in a redundancy clause. The court not only considered that word in the context of the specific enterprise agreement and the parties’ dealings, but also in light of the background provided by the historical development of termination, change and redundancy standards in awards, the

provisions of the Act governing termination on the ground of redundancy and the statutory provisions governing the transmission of business from one employer to another.42

Is the document the sole repository of the agreement? 5.12 The parol evidence rule applies to exclude extrinsic evidence when the parties have reduced the terms of their contract to writing. This raises two issues: can extrinsic evidence be led to prove that the written document is not the sole repository of the agreement, such as by proving oral terms; and can extrinsic evidence be led to prove that the written contract is the sole repository of the agreement, such as by proving an agreement that there are no other terms?

Proving the written document is incomplete 5.13 Evidence extrinsic to the writing itself is admissible to prove that the written terms are incomplete or that the parties have not reached an agreement.43 Ashley J has observed: [page 208] Once it has been determined that a written document is the sole repository of an agreement, evidence may not be received which will controvert or qualify some part of the writing. But there is logically an antecedent question — Is the document the sole repository of the agreement?44

When it is alleged that the contract is partly oral and partly in writing, the parol evidence rule does not operate to exclude evidence of the oral terms unless it is first determined that the contract is wholly in writing.45 Merely producing a contractual document that appears to be a complete recording of the terms cannot lead to an exclusion of evidence to prove that it is supplemented by oral terms.46 The issue of whether the parties intended the document to contain all of the terms can be determined by reference to the parties’ express or implied intention.47

5.14 Carmichael v National Power Plc concerned the characterisation of contracts of guides whose job was to take people on tours of power stations. After an interview, the workers received a brief letter offering engagement ‘on a casual as required basis’. One issue in the House of Lords was the extent to which extrinsic evidence could be relied on in determining the character of the relationship. Lord Hoffmann observed that the parol evidence rule, to the extent it operates: … applies in cases in which the parties intend all the terms of their contract (apart from any implied by law) to be contained in a document or documents. On the other hand, it does not apply when the intention of the parties, objectively ascertained, has to be gathered partly from documents but also from oral exchanges and conduct.48 In the latter case, the terms of

[page 209] the contract are a question of fact. And of course the question of whether the parties intended a document or documents to be the exclusive record of the terms of their agreement is also a question of fact.49

A party could also prove through extrinsic evidence that it was orally agreed that the written terms were subject to the approval of another, or that the whole document was executed in jest, or that the contract was a sham, or that prior to signing the parties agreed that it did not constitute a binding contract, or would not commence for a particular period, or certain terms would not be enforced.50

Proving the written document is complete 5.15 Extrinsic evidence may be adduced to show the written contract was a complete statement of the terms, thereby excluding terms that would otherwise be implied. For this purpose evidence can be adduced to prove that the parties have actively considered, and rejected, a term.51 In New South Wales Cancer Council v Sarfaty the employee was informed during the preemployment interview that the position was ‘a tenured one as for a full professor’. Ordinarily a tenured position means that the contract is not terminable by notice.52 The contract specified the circumstances in which termination of employment could occur, such as misbehaviour or incompetence. The employer terminated the employment on the ground of

redundancy — which was not one of the listed grounds — and argued that it could do so due to an implied term permitting termination on reasonable notice. The court concluded evidence could be led to prove the express, actual intention of the parties that the contract was not terminable on notice. It would be an inversion of the purpose of the parol evidence rule to exclude evidence that would show that the written terms were exhaustive.53

Oral representations and later written terms 5.16 It is common for parties to employment contracts to orally agree on some, or all, terms, and subsequently execute a document shortly before or after employment commences. These common facts mask a series of distinct situations. [page 210]

Invalid written agreements and shams 5.17 The written document will not alter the oral agreement unless the written document is a valid contract, unaffected by the ordinary vitiating factors.54 Nor will it alter the oral agreement when the written document is a sham. A sham agreement is one that takes the form of a legally effective transaction but which the parties intend should not have the apparent, or any, legal consequences.55 A sham has been described as: … a spurious imitation, a counterfeit, a disguise or a false front. It is not genuine or true, but something made in imitation of something else or made to appear to be something which it is not. It is something which is false or deceptive.56

The operation of the later written document will depend on the intention of the parties. Notwithstanding an inconsistency between earlier oral and later written terms, it is possible that the parties did not intend the later document to be operative.57

Integration of the contract 5.18 The written document may be executed with the intention of entirely

superseding all prior negotiations and agreements. The written terms are then an integration of the agreement. Such an agreement will usually discharge any prior oral agreement.58 Integration of the contract is often, though not exclusively, achieved through the use of entire agreement clauses, discussed in 5.20. If there has been no integration, the written document, though not exhaustive, may be inconsistent with a prior oral agreement about a particular matter. In such cases the parties are bound by their validly executed written agreement and not by their antecedent oral agreement.59 [page 211] This issue sometimes arises when an employee is engaged on a series of fixed term contracts, given oral assurances of continued employment and then signs a final agreement that states that employment will terminate on a certain date. The employment will usually terminate on that date, unless the written agreement is a sham, is affected by other vitiating factors, or the written agreement has been abandoned or varied.60

Collateral contracts 5.19 The prior oral agreement of the parties may be a collateral contract. Any collateral contract must be consistent with the main contract.61 As the High Court has stated: A collateral agreement made in consideration of a main agreement cannot effectively subsist unless it is consistent with the main agreement … it may be established that an entirely separate [collateral] agreement was made by the parties. One of them may give a collateral promise in consideration of the other entering into the principal agreement. But if such a collateral agreement is to have effect as a contract it must be consistent with the provisions of the main agreement, the making of which by the other party provides the consideration. If the promise sought to modify, control or restrict the principal agreement it would detract from the very consideration which is alleged to support the promise.62

For example, in Knevitt v The Commonwealth of Australia the employee argued that he entered into a collateral contract promising fixed term employment for six months, but on commencement of employment he signed a contract promising five months’ employment. The collateral contract was unenforceable as it was inconsistent with the main agreement.63

Where there is a conflict between an oral term and a later agreed written term then the later term will prevail to the extent of the inconsistency.64 [page 212] However, later written contracts will not always supersede earlier oral agreements. There must be irreconcilable inconsistency in the relevant sense.65

Entire agreement clauses 5.20 Written contracts sometimes contain entire agreement clauses, also called merger or integration clauses.66 An entire agreement clause generally stipulates that the terms contained in the written document are the only terms of the contract. One purpose of such clauses is to defeat an argument that the written terms are qualified or supplemented by other express oral or written terms.67 In this manner the clause operates as an agreement that the parol evidence rule applies to the document.68 There are variants of entire agreement clauses, such as a clause that provides that the written terms are in substitution for all prior agreements or an acknowledgement that the employee has not relied on any prior representations. In White v Bristol Rugby Ltd the employee was paid a sign-on bonus of £15,000 and told that if he wanted to opt out of the contract he could do so at a later stage. He then signed a contract in which he acknowledged that the written terms (that did not mention the oral opt-out agreement) ‘contain the whole agreement between the parties and that they have not relied upon oral or written representations made to them’. The court found that the clause meant that there was no oral term modifying the written agreement.69 Entire agreement clauses are not conclusive; instead, they are always open to the parties to prove that there is some other agreement that modifies the apparently exclusionary operation of the clause.70 Such clauses do not necessarily preclude proof of a vitiating factor such as misrepresentation, a variation to the contract, a representation giving rise to an estoppel, or a cause of action based on a misleading representation under s 18 or s 31

[page 213] of the ACL.71 Entire agreement clauses define the terms of the contract, not what the terms mean. Consequently, the use of extrinsic evidence is still admissible in the ordinary manner for the purpose of discerning the context of the contract.72 An entire agreement clause does not ordinarily prevent the implication of terms, though it may.73

Prior negotiations, declarations of subjective intent and subsequent conduct Prior negotiations 5.21 One of the principal surviving functions of the parol evidence rule is to exclude evidence of the prior negotiations of the parties in the construction of the terms of the contract. As a general rule, the court cannot receive evidence of previous drafts of the contract, nor evidence of what was said or done in negotiations, as an aid to interpretation, subject to the matters mentioned below.74 The rule has been the subject of some criticism.75 Where there is ambiguity and evidence is admissible to prove the surrounding circumstances, then it is permissible to lead evidence of the prior negotiations. This evidence forms part of the objective facts known [page 214] to both parties.76 Evidence of prior negotiations may also be used to prove that both parties understood what a clause meant or were united in rejecting a particular meaning.77 Even in the absence of ambiguity there are some purposes for which evidence of prior negotiations may be led. It is admissible to prove that the written document is not the sole repository of the agreement or that the parties have not reached agreement. 78 Evidence of prior negotiations is

admissible when a party seeks to rectify the contract79 or to prove the subject matter of the contract.80

The parties’ subjective intentions 5.22 In the construction of the terms of the contract a court cannot receive evidence of the subjective intention of the parties.81 As Lord Wilberforce has observed: When one speaks of the intention of the parties to the contract, one is speaking objectively — the parties cannot themselves give direct evidence of what their intention was — and what must be ascertained is what is to be taken as the intention which reasonable people would have had if placed in the situation of the parties. Similarly when one is speaking of aim, or object, or commercial purpose, one is speaking objectively of what reasonable persons would have in mind in the situation of the parties.82

The parties’ subsequent conduct 5.23 As a general proposition, once a contract is formed then evidence of the subsequent conduct of the parties is not admissible to prove the meaning of the agreed terms.83 If such evidence were able to be admitted [page 215] then it might result in the contract having one meaning when it was formed and a different meaning a year later.84 Such extrinsic evidence can be led to prove performance of the contract or its breach.85 There are some exceptions to this general principle. Evidence of post-contractual conduct is admissible on the question of whether a contract is formed86 or varied.87 Evidence may be led to show that the written terms are a sham,88 or to raise an estoppel.89 Where evidence of post-contractual conduct is admitted it may prove admissions made by the parties.90 By way of comment, this is a field in which the principles of law have been established in cases where comprehensive agreements have largely been drafted by lawyers, intended by the parties to apply to a specific transaction and intended to be an exhaustive statement of the parties’ obligations. As

noted in 1.11 and 1.12, the context in which employment contracts are made is significantly different. Many such contracts are informal, rely significantly on the implication of terms, are long term and involve an ongoing and dynamic relationship. There is much to be said for the view that the parol evidence rule should not be applied too strictly, particularly in its exclusion of subsequent conduct of the parties in a long-term, dynamic, informal arrangement. [page 216]

Proving implied terms, the parties and the subject matter 5.24 The parol evidence rule excludes evidence concerning the content of the contract. It does not exclude evidence concerning the validity of the terms of the contract. Extrinsic evidence can be led to prove that the contract has or has not been formed, as well as to prove the presence or absence of consideration, lack of contractual intention, and matters that may vitiate the contract.91 There are a series of exceptions to the parol evidence rule that permit extrinsic evidence to be led to assist in the construction of a written document, notwithstanding the fact that the document integrates the contract. When a term is sought to be implied then evidence of the factual and legal matrix of the contract is admissible. Such evidence is particularly important when terms are sought to be implied in fact.92 Extrinsic evidence is admissible to support or rebut a presumption that a term should be implied in law.93 In Mears v Safecar Security Ltd the express terms of the contract were silent on whether the employee was to receive certain sick pay. The employee alleged there was a term implied in law that he was to be paid for his absence. During his employment he was not paid for his absences. The United Kingdom Court of Appeal took into account this subsequent conduct in determining whether the term should be implied.94 5.25 In some circumstances it is permissible to rely on extrinsic evidence to prove the agreed meaning of ambiguous words used in the contract. In Northern Land Council v Hansen the employee was made an offer of

employment. He was told that the appointment was ‘probationary’. When asked during the job interview what that meant, the employer explained that it had written guidelines governing the assessment of performance [page 217] during a probationary period. The later written contract mentioned the probation period but made no reference to the written guidelines. The Northern Territory Court of Appeal found it was permissible to admit and rely on the guidelines to explain the meaning of ‘probation’ in the contract.95 Extrinsic evidence may also be admitted to prove the subject matter of the agreement. In White v Australian and New Zealand Theatres Ltd the employees were engaged to provide ‘professional services’. The employees said this phrase included services as producers as well as actors, but the employer said it was limited to being actors. The employees performed work as producers as well as actors. The court admitted evidence of the parties’ subsequent conduct to prove the subject matter of their agreement.96 It may be observed in such a context that there is a fine line between being permitted to lead evidence about the subject matter of the contract and not being permitted to lead evidence of subsequent conduct to prove the meaning of the contract’s terms. Extrinsic evidence may be led to prove the identity of the parties and the relationship between them.97

EXPRESS TERMS 5.26 Express terms may be oral or written. As with any term, to be enforceable an oral term must be a promissory term and not a mere representation.98 The relationship between oral terms and subsequently executed written agreements is considered in 5.16. A term in a document only has contractual force if it is incorporated into the contract by the signature of the employee (see 5.28), incorporated by notice of the term (see 5.30), incorporated through a course of dealings (see 5.31) or incorporated by reference: see 5.34–5.44. An internal policy document created by the employer does not, of itself, create or alter the

parties’ contractual obligations, even if it states that it has this effect. [page 218]

Resolving inconsistencies99 5.27 A conflict between express terms can be resolved in a number of ways. An earlier oral or written term is often superseded by a later, inconsistent term.100 The later term may be a variation, or effect a novation, or be a contractually agreed alteration to the contract.101 Inconsistencies can be resolved through the construction of the contract as a whole. There is no inconsistency when one term qualifies or modifies the effect of another: ‘to be inconsistent a term must contradict another term or be in conflict with it, such that effect cannot fairly be given to both clauses’.102 Where there is an inconsistency between terms incorporated by reference and other express terms the proper approach is usually to disregard those incorporated terms that conflict with the expressly agreed terms.103 A zealous application of this principle might be inapt when it is contemplated that changed conditions in an incorporated document, such as an award, will improve over time and outstrip static express terms in the contract.104 Inconsistency between standard form (or boilerplate) clauses, and those specially framed with the individual circumstances in mind, will normally be resolved by giving greater weight to the specially negotiated clauses.105 In Walker v Citigroup the express terms included a promise that the employee would receive the title ‘Director of Research’ after one year and a guaranteed minimum bonus would be paid at the end of the first year of employment in 1998. Those terms contemplated that Walker would remain employed for the whole of the year. There was also a clause permitting termination by the employer on one month’s notice. The Full Court of the Federal Court stated: [page 219] If [the notice provisions] were able to be utilised, the employer would negate the express terms of the offer and deprive the employee of the benefit of the terms that were expressly agreed … It is

necessary to construe the contract as a whole and to construe individual clauses in that context. The objective is to give as much meaning as possible to all parts of the contract in a consistent fashion avoiding repugnancy and absurdity. Where there are clauses of a contract specially framed with the individual circumstances in mind, together with standard form clauses, it will normally be appropriate to give greater weight to the specially negotiated clauses.106… In our opinion, this is such a case. Effect can be given to all parts of the contract and repugnancy avoided here if the standard form provision for termination without cause is read as applicable only after the completion of the 1998 calendar year. The result is that the clause permitting termination without cause by either side on 1 month’s notice would not have been operative so as to permit termination of employment without cause prior to 31 December 1998. Thereafter it would have been available to both parties.107

Terms incorporated by signature 5.28 Parties commonly execute a written document containing some or all of the terms of the contract. It is axiomatic that ‘if a party signs the document he is taken to have assented to the terms contained in it’.108 The fact that an employee is required to sign a document tends to suggest that the document is intended to have contractual force.109 Most written employment contracts are signed by one or both parties. Subject to a limited range of exceptions discussed below, if a party signs a document of a contractual nature then the terms contained in it will be express terms of the contract. A party signing a contract will be bound even if he or she has failed to read the document first.110 This rule has been the subject of some [page 220] criticism. It appears particularly harsh where an employer knows, or reasonably ought to know, that the employee has not read all of the terms of the contract.111 The rule is subject to the ordinary vitiating factors.112 If the document presented to the employee for signature is not one of a contractual nature, or a sham, then it will not form part of the contractual terms between the parties.113 5.29 In some circumstances a document signed by the parties, apparently stating the terms of an agreement, may be contradicted by other express terms. In Republic of Nauru v Reid114 the employees signed documents that

specified their rates of pay. After the commencement of employment the employees were told by the chief pilot that their rates of pay were ‘Ansett plus 3%’, not the amounts specified in the written contracts. The employees were paid in accordance with the oral ‘Ansett plus 3%’ term and their wages increased over the years, though no document ever mentioned the ‘Ansett plus 3%’ term. The practice of the employer in preparing and executing letters of offer was haphazard, and the documents subsequently presented for assent by the pilots regularly did not reflect the agreement between the parties — the rate in the subsequent written and signed documents had no connection with the rates actually being paid. After a decade the employees signed an apparently complete agreement which set out a rate of pay that was less than the ‘Ansett plus 3%’ rate. The majority of the Court of Appeal found that there was a term arising from a course of dealing that notwithstanding a written statement to the contrary, the oral ‘Ansett plus 3%’ term remained as part of the agreement. The written agreement ‘was no more than a solemn farce’.115

Terms incorporated by notice 5.30 Where there is no signed memorandum of the terms of the contract, the most common way in which express terms are created is by one party giving the other reasonable notice of the terms in a document of a [page 221] contractual nature. There is an obvious difference between, on the one hand, giving an employee a document titled ‘Contract’ which contains contractual language and, on the other hand, leaving a pamphlet in the company foyer titled ‘Information’. When a document has been given by one party to another there are two issues that arise. First, whether the document contains terms of a contractual character, and second, whether the acts of one party were sufficient to give reasonable notice of the terms to the other party.116 The resolution of these two interrelated issues depends on all of the circumstances, including the

document’s form and presentation, the terms, and the context of the relationship (including the method of communication and the workplace context).117 In resolving these issues it is not the subjective beliefs or understandings of the parties that matter. In accordance with the ordinary objective approach in contract what matters is ‘what each party by words and conduct would have led a reasonable person in the position of the other party to believe’.118 Some of the terms of a document incorporated by notice may be promissory even if others are mere representations.119 The employee need not have actual knowledge of the terms when reasonable notice has been given. A higher degree of knowledge of the terms is necessary to incorporate unreasonable or unusual terms.120 The publication of terms on a notice board may be sufficient notice.121

Terms incorporated by a course of dealing 5.31 Express terms may be incorporated into the contract as the result of a course of dealing between the parties.122 If the parties have entered [page 222] into a series of contracts on particular agreed terms then it may be reasonable to infer that the parties agree that the same terms will govern future similar contracts.123 Terms implied by a course of dealing will almost never arise in employment contracts, except perhaps for casual and fixed term employees, for the reasons discussed in 5.32. There are some authorities that suggest that a term may be implied by a course of dealing.124 A better view, and that adopted by most commentators, is that such terms are express rather than implied.125 In addition to forming a term of a contract, the course of dealing may be legally significant in other ways. A course of dealings may show that there is a contract between the parties,126 or that an estoppel by convention has arisen,127 or that an uncertain term can be given meaning and operation by the parties’ subsequent

conduct.128 The operation of the principles relating to the incorporation of such terms is best illustrated by the leading case of Henry Kendall & Sons v William Lillico & Sons Ltd.129 A seller sold goods to a buyer about three to four times per month for three years. Each time an order was placed the seller would reach an oral agreement and later send a ‘sold note’, which contained contractual terms, to the buyer. The terms in the sold note were identical on each occasion. The question arose: what were the terms of the contract between the buyer and the seller? The answer given by the House of Lords was that the terms were those contained in the sold note. Because of the past course of dealings the Law Lords held that the buyer was bound by the terms of which it was actually aware, as well as those the buyer ought to have been aware of as the result of past dealings. [page 223]

The course of dealings 5.32 Before a court will conclude that a disputed term is part of a contract of employment on the basis of a course of dealing, there must be a considerable history of contractual dealings on identical terms between the parties. A few similar dealings rarely suffice, except perhaps where one party makes it clear that future contracts will be governed by particular terms.130 In an employment contract of indefinite duration there is rarely a course of contractual dealings between the parties. Instead, there is often one contract which is occasionally varied each time a pay rise or promotion is granted. Even assuming there is a novation each time a promotion occurs the new contract will almost always be different from previous contracts as it will reflect the increase in remuneration and duties connected with the promotion. It is more likely for terms to arise from a course of dealing where an employee is engaged pursuant to a large number of identical fixed term contracts of short duration, or employed as a casual under a succession of identical contracts.

Dealings between the parties to the contract

5.33 The course of dealing must arise between the parties to the contract. An employer who rewards all employees identically for years by providing a particular benefit (such as an annual bonus or paying a redundancy package) does not thereby engage in a course of dealing with each specific employee. Each employment contract is treated, at law, as a distinct contract, unrelated to the collective context in which it arises. As noted in 1.15, one of the distinguishing features of employment contracts is that they commonly arise and are performed in a collective and social context. The provision of identical benefits to all employees in indistinguishable situations gives rise to a reasonable expectation that the employer’s course of conduct will continue to be applied to all employees in the same position. Singling out one employee for less advantageous treatment may be a breach of the implied term of trust and confidence, and subjecting one employee to an arbitrary exercise of a power or discretion may be a breach of the duty of good faith.131

Terms incorporated by reference 5.34 One of the most important (and contentious) sources of contractual obligations are terms incorporated into the contract by [page 224] reference. Issues raised by the law in this field touch on three of the distinguishing features of most employment contracts: their informality, the collective context of the employment, and the existence of control: see 1.7, 1.12 and 1.15. Employment contracts often contain few express terms. For many employees the benefits enjoyed during employment are the product of collective bargaining, not individual bargaining. The law concerning terms incorporated by reference is the principal means by which employees contractually gain the fruits of collectively negotiated conditions. The issue of control arises when the external source document is able to be unilaterally altered by the employer: see 5.41–5.42.

Other mechanisms by which external documents bind the parties 5.35 Terms may be incorporated by reference as the result of express or implied incorporation. This section deals with the former, while the latter is dealt with in 5.97. Even when the document is not incorporated by reference into the contract it may nevertheless be of contractual significance. A policy manual may contain lawful directions to the employee.132 Deviation from the terms of a policy may be a breach of the implied duty of good faith.133 An external source document may also be incorporated by signature or incorporated by notice.134 Documents incorporated by reference sometimes only expressly impose obligations on the employee. When a policy incorporated by reference imposes obligations on an employee then, in order to give business efficacy to the document and where the appropriate tests discussed in 5.53–5.58 are met, a term may be implied in fact that the employer is also obliged to abide by the policy.135 Even when an enterprise agreement is not incorporated by reference, its benefits will be enforceable as statutory rights if it is approved under the Fair Work Act. Occasionally benefits in collective agreements are enforceable as a contract through the various means discussed in 5.94–5.112. Terms incorporated into the contract by reference can be distinguished from terms incorporated by signature, notice or a course of dealing. Terms incorporated by reference are contractually enforceable as the result of [page 225] an agreement to apply the terms of an external source document to the employment. Neither the external source document nor the bridging term needs to be signed by the parties.136 The external source document itself does not need to be provided to the employee or brought to his or her notice if it is incorporated by the signature of the employee.137 For an external source document to be incorporated by reference it is not necessary that there be a considerable history of contractual dealings on identical terms between the parties.138

Bridging terms and external source documents 5.36 The classic example of terms expressly incorporated by reference arose in National Coal Board v Galley. The employee’s contract stated: … my wages shall be regulated by such national agreement and the county wages agreement for the time being in force and that this contract of service shall be subject to those agreements …139

Such terms connecting the contract with another document are called bridging terms. Bridging terms link the contract of employment with a document that is external to, and exists independently of, the contract. External source documents include awards, collective agreements, statutes, policy manuals or work rules. Paying due regard to the nature of the document, the law takes the same approach to the incorporation by reference of policy documents as it does to other types of external source documents and, except where the context otherwise requires, the discussion below does not distinguish between the various types of external source documents. A bridging term may give contractual force to a non-contractual external source document. External source documents are usually not contracts themselves: ‘… the fact that [the external source] document is not itself contractual does not prevent it from being incorporated into the contract’.140 A collective agreement between a union and an employer that is stated to be ‘binding in honour only’ may be contractually enforceable by the employee because of a bridging term.141 Similarly, a [page 226] bridging term may give contractual force to an external source document that would not otherwise apply to the employee. 5.37 In Honeyman v Nhill Hospital a collective agreement was registered under an Act. Registration meant that the agreement applied to employees who were members of unions party to the agreement. The plaintiffs’ union was not a party to the collective agreement, so under the Act the collective agreement did not apply to the plaintiffs. However, the bridging term in their contracts incorporated the collective agreement into their contracts. Ashley J stated that:

… the fact that … [the collective agreement] did not during its lifetime of its own force provide the plaintiffs with its benefits does not mean that some one or more of its provisions could not be made applicable to the plaintiffs by their written contracts.142

Usually a bridging term is contained in the express written terms of the contract. Sometimes the bridging term is oral;143 other times the bridging term arises from a statutorily imposed term.144 Many have argued (with little success) that a bridging term should be implied into some contracts of employment: see 5.100. Whatever its form, a bridging term identifies the external source document and states the effect that the external source shall have on the contract between the parties. Bridging terms raise a number of issues, discussed below. First, does the bridging term give contractual effect to the external source document? See 5.40. Second, what is the effect upon the contract of an amendment or termination of the external source document? This is discussed in 5.41–5.43. Third, are all of the obligations referred to in the external source document incorporated into the contract of employment? See 5.44.

The effect of the employer’s practice 5.38 Contractual force will not be afforded to an external source document merely because the employer has consistently applied the document to the employee or other employees for many years. The Privy Council has advised: [page 227] … the fact that the [employer] applied the agreement to the [employee] is equally consistent with the view that it did so, not because it was bound contractually to apply it to him, but because as a matter of policy it deemed it expedient to do so.145

This is a problem often confronted by employees seeking to rely on redundancy policies or practices of an employer.146 In the absence of an explicit bridging term employees face formidable difficulties in proving that the terms of the external source document were contractually binding upon the employer.147 This issue is discussed further in 5.77.

Bridging terms in Australia and the United Kingdom

5.39 In the United Kingdom employers are obliged by statute to provide a written statement to their employees referring to any collective agreement that ‘directly affect[s] the terms and conditions of the employment’. The exact relationship between the statement of terms and the terms of the contract, and the role of a bridging term linking the collective agreement with the contract, has generated much litigation in the United Kingdom.148 In Australia enterprise agreements are enforceable under the Fair Work Act. As they contain rights enforceable as statutory rights, an operative bridging term linking the contract and the enterprise agreement is less important in ensuring employees gain the benefits of collectively negotiated arrangements. These different industrial landscapes will sometimes lead to different approaches to bridging terms. For example, in AWU v BHPIO the employees argued that the state award was incorporated by reference into their employment contracts. Kenny J observed that: … there is little reason to suppose that the parties intended to convert their statutory rights and obligations into contractual ones since that was not necessary to give the Award operative force.149

Does the bridging term give contractual effect to the external source document? 5.40 Not every reference in a contract to an external source document will incorporate that document into the contract. A contract that merely [page 228] mentions a document without evidencing an intention to incorporate it does not thereby imbue it with contractual force.150 To ascertain whether the contract incorporates the external source document it is necessary to ask: did the parties intend for the terms of the external source to be given contractual effect?151 To answer this question it is necessary to apply the ordinary objective approach.152 A specific term that states the external source document is not incorporated into the contract will usually be a clear manifestation of the parties’ intent.153

In ascertaining the intent of the parties an examination of the words used in the bridging term will often be crucial. This is illustrated by cases in which the external source document has been found to have been incorporated154 and those where it has not.155 It will not, however, be determinative. [page 229] Where the term is ambiguous, the bridging term, like all contractual terms, must be construed in the factual and legal context in which it was made.156 In determining the intent of the parties, courts have had regard to a range of matters, including: whether the bridging term appears in a document that is contractual in nature, such as a letter of appointment or memorandum of terms, rather than an induction guide;157 whether the contract would be incomplete without the incorporation of the external source document;158 whether the external source document was created to give effect to a statutory right of the employee, rather than to create contractual rights;159 whether the external source document contains terms that are apt for incorporation into the contract;160 and [page 230] whether the external source document was intended to convey administrative instructions, rather than create substantive rights.161 The latter two considerations are similar in nature and are discussed in more detail in 5.44.

The alteration and termination of the external source

document 5.41 The alteration and termination of external source documents incorporated into the contract raises a series of issues. An employment contract cannot be varied without the consent of both parties.162 But the content (and the very existence) of an external source document is often out of the control of both parties. For example, in the case of Mr Galley, whose bridging term is set out in 5.31, what are his entitlements if the national agreements are altered to increase or decrease wages? What are his entitlements when the national agreement is terminated? And what are his entitlements if Mr Galley’s employer had played a role in the alteration or termination of the national agreement to the disadvantage of Mr Galley? The answers to these questions will depend on the terms of the contract, particularly the bridging term and the nature of the external source document. Sometimes bridging terms address what will happen in the event of an alteration of the external source document. When the content of the external source document is outside the control of the parties then the express stipulations in the bridging term will govern the matter. For example, an agreement to pay an employee the wages set from time to time in an award will mean that the wages of the employee will increase automatically to mirror those increases in the award. If the bridging term does not expressly address the issue, the usual conclusion is that the contractual entitlements alter with the contents of the external source document.163

Implied limits on powers to alter and terminate 5.42 In other contracts, the content of the external source document is within the control of the employer. In Riverwood International Australia [page 231] v McCormick the external source document was a policy manual. The bridging term bound the employee to abide by the manual ‘currently in place, any alterations made to them, and any new ones introduced’.164 On its face this bridging term granted the power to the employer to unilaterally change

the terms of the manual. It is unusual for a contract to grant one party the power to unilaterally alter the terms of the contract. Courts often refuse to allow employers to exercise such a power to the disadvantage of the employee for various reasons. As a matter of construction, courts are reluctant to conclude that the contract grants the power to the employer to unilaterally alter the contract: ‘clear language is required to reserve to one party an unusual power of this sort’.165 It may be necessary to bring changes to the attention of the employee.166 At other times courts have considered that clauses purportedly granting the power to unilaterally alter a contract are not contractual in nature.167 The power to unilaterally alter the terms is relevant to ascertaining if the parties possessed the required intention to give legal effect to the incorporated document.168 In McCormick Mansfield J considered that: … [the power of the employer] to change its policies … from time to time would be constrained by an implied term that it would act with due regard for the purposes of the contract of employment … so it could not act capriciously, and arguably could not act unfairly towards the [employee]. It might also be a power which, by implication, must be exercised reasonably having regard to the nature of the contract and the entitlements which exist under it.169

The express contractual powers, rights and discretions of an employer must be exercised conformably with the express and implied terms of the contract, which will often include the employer’s implied duties of mutual trust and confidence and good faith.170 [page 232]

Termination of the external source document 5.43 Where the external source document is abolished or terminated then the bridging term usually continues to incorporate its contents as it existed immediately prior to the abolition or termination.171 In Robertson v British Gas Corporation the bridging term stated that the ‘incentive bonus scheme conditions will apply’. The terms of that scheme were contained in a collective agreement between the employer and the union which was later unilaterally terminated by the employer. The Court of Appeal held that the termination of the collective agreement did not mean that the employees were

no longer entitled to the incentive scheme. Instead, the employees were entitled to the conditions established by the collective agreement immediately before its termination.172 In cases such as Gibbons and Robertson the collective agreement was validly terminated in accordance with the terms of that agreement. In other cases the collective agreement is not terminated at all; the employer simply withdraws from involvement in the collective negotiation of the agreement. In such cases the collective agreement may not only continue to be incorporated into the contract, but any subsequent variations may also be incorporated as well.173

Is the term apt for incorporation? 5.44 Even when a bridging term incorporates an external source document into the contract not all of its provisions will necessarily be contractually enforceable. Sometimes external source documents contain provisions that are inappropriate foundations for contractual rights. It is difficult to give contractual force to a clause in a policy manual concerning the need to keep the staff kitchen tidy, but it is easier to give contractual force to a clause that requires the employer to pay annual leave.174 The existence of inappropriate provisions in an external document is one of the considerations that may be relied upon to indicate whether the [page 233] parties intended any of the external source document to be incorporated. However, it is possible for a bridging term to incorporate the whole of the external source document into the contract but for only some of the document’s provisions to have contractual force: Where a document is expressly incorporated by general words it is still necessary to consider in conjunction with the words of incorporation, whether any particular part of that document is apt to be a term of the contract; if it is inapt, the correct construction of the contract may be that it is not a term of the contract.175

In some cases the language of the terms in the external source documents will make clear whether or not the terms are apt or inapt for incorporation —

terms couched in mandatory, clear and certain language are more likely to be apt for incorporation. Sometimes the subject matter of the term may shed light on the issue of whether it is contractually enforceable. Other cases draw a distinction between, on the one hand, substantive provisions and, on the other hand, procedural provisions that concern collective issues, with only the former being contractually enforceable.176 This is not an altogether satisfactory distinction and one that has been difficult to apply consistently in practice.177 5.45 Another unsatisfactory part of this area of law concerns the contractual enforceability of redundancy selection procedures. [page 234] Last on–first off procedures may be of enormous importance for older employees wishing to stave off ‘early retirement’. Some courts appear reluctant to give these important terms contractual force. It is suggested that a term of an external source document may be apt for incorporation despite the fact that it requires the employer to treat one class of employee in a more favourable manner than the employer treats other employees.178 The distinction between terms apt and inapt for incorporation may in truth be a distinction between promissory terms and mere representations.179 The incorporation of external source documents may also lead to problems in the construction of the contract. Sometimes parties unthinkingly incorporate documents that are inappropriate to be applied to the employment relationship. For example, a bridging term in the contract of a cook may incorporate a collective agreement which says that it only applies to academics. In other cases parties incorporate more than one external source document and do not consider what will occur if there is a conflict between them. In such cases it will be rare for the incorporation to be found to be ineffective as courts will try to make sense, if at all possible, of the agreement reached by the parties and to give effect to their presumed intention that the incorporated document govern their relationship.180 [page 235]

IMPLIED TERMS Overview and implicit terms 5.46 There are four types of implied terms.181 First, terms implied in law. These are implications arising from the nature of the contract itself. They are terms implied in all employment contracts, or all employment contracts of a particular type: see 5.48–5.52. Second, terms implied in fact, which are implications based on the presumed or imputed intentions of the parties that are necessary to give efficacy to the contract: see 5.53–5.65. Third, terms implied by custom arising from a custom or usage in the industry: see 5.66–5.74. The notion of crystallised custom is discussed in 5.75. The role of practice (as opposed to terms imposed by custom) as the source of contractual rights is addressed in 5.77–5.79. Whether a term is implied is assessed at the time the contract was formed, or at the time the contract was varied when it is alleged that the term arises as the result of the variation. The implication ‘must be considered as at the time when the contract was made, and not with the benefit of hindsight provided by particular facts which have subsequently become controversial’.182 Whether a term is implied is a question of law.183 There are some doubts about whether the implication of terms in enterprise agreements is governed by the same tests as the implication of terms in contracts.184

Implicit terms 5.47 The fourth type of implied term may be called implicit terms. These arise by implication from the express terms. Although the term is not bluntly and expressly spelled out, it is implicit or connoted by what [page 236] is expressly said.185 Whether such terms are best described as implied, or inferred from the language of the contract, is a matter of debate. Ascertaining implicit terms requires the identification of express terms and then their

construction. Where a term is obvious then it may be inferred as part of the process of construction of the contract.186

TERMS IMPLIED IN LAW 5.48 Terms implied in law are those terms that are implied into all contracts of a particular type.187 They act as standardised terms, are legal incidents of the class of contract to which they relate, and are not based on the actual or presumed intention of the parties.188 The term implied arises from ‘the inherent nature of contract and the relationship thereby established’.189 Consequently, as a general rule the implication will not depend upon proof of facts beyond the mere existence of the contract.190 In contrast, terms implied in fact are unique to the particular contract in question.191 As Gaudron and McHugh JJ have stated: A term implied in fact purports to give effect to the presumed intention of the parties to the contract in respect of a matter that they have not mentioned but on which presumably they would have agreed should be

[page 237] part of the contract. A term implied by law on the other hand arises from the nature, type or class of contract in question.192

There are certain terms implied in law, discussed in Chapters 7 and 8, in employment contracts that are well settled. There are a further series of rules considered throughout the text that are not commonly analysed as terms implied in law, though they meet that description. These include the right to terminate for serious breach of the contract193 and the duty to cooperate.194 Whether they are analysed as implied terms, or as duties created by rules of law, or as duties or rights arising from the construction of the contract will rarely matter. They can be displaced where the parties evince a contrary intention.

The modification and exclusion of terms implied in law 5.49 Terms implied in law operate as default rules that ‘apply in the absence

of an expression of contrary intention by the parties’.195 The parties may expressly exclude or alter terms implied in law.196 Such terms are also excluded when they are implicitly inconsistent with the express terms of the contract.197 If an express term of a contract dealing with a [page 238] matter is void then the ordinary term implied in law may still operate.198 Similarly, the operation of an express term about a matter may exclude or alter what would otherwise be concurrent equitable obligations.199 Ordinarily, an express contractual right to terminate in the event of a breach is construed so as to augment, rather than be in substitution for, a common law right to terminate.200 Courts are understandably reluctant to too readily oust the effects of terms implied in law, based as they are on sound policy, in the absence of a clear expression by the parties of a contrary intention.201 The statutory and regulatory context of the employment may expressly or impliedly exclude the implication of a term.202

When a term implied in law will be implied 5.50 It is difficult to clearly define the circumstances in which a term, not recognised in previous cases, should be implied in law. The implication of the term must be necessary.203 Necessity in this context has a different [page 239] shade of meaning from that which it has in formulations of the business efficacy test.204 As a Full Court of the Federal Court has stated: The sense of ‘necessity’ is conveyed by Holmes’ phrase, ‘The felt necessities of the time’, and indicates something required in accordance with current standards of what ought to be the case, rather than anything more absolute.205

Terms implied in law are imposed on the parties as a matter of policy.206 What is necessary has to be assessed by reference to the policy consequences

of implying (or not implying) the term and the relationship between the term and other duties adopted by the parties and imposed by the common law and statute.207 There may, in some cases, be good reasons for leaving the policy decision to the legislature.208 In Byrne it was argued that it was necessary to imply into the contract of employment a term that, in accordance with cl 11(a) of the governing award, the employee would not be harshly, unjustly or unreasonably dismissed. In assessing the necessity for the implication the court took into account the statutory context. As McHugh and Gummow JJ stated: [page 240] The contract of employment is not, from the viewpoint of the employee, rendered nugatory if the existing provisions thereof remain, as a matter of contract, to operate concurrently with the regime established by the Award and deriving its authority from statute. There is nothing to suggest that the contracts of employment were not workable and effective before the introduction into awards of provisions such as cl 11(a). This is not a case where a provision such as cl 11(a) is necessary lest the contract be deprived of its substance, seriously undermined or drastically devalued in an important respect.209

Terms implied by law into a sub-class of employment contracts 5.51 As noted above, terms implied in law are implied in all contracts of a particular class. The ability to narrowly define the sub-class of employment contracts permits a degree of flexibility in the approach to the implication of terms, though it does tend to blur the distinction between terms implied in fact and terms implied in law.210 By identifying a narrow sub-class, a specific term may be implied notwithstanding the fact that the implication would be inappropriate in all employment contracts. In Scally v Southern Health and Social Services Board211 the standard clauses of the contract had been negotiated between the employer and the employees’ representatives in the years prior to the commencement of employment. One of the clauses related to a superannuation scheme. The scheme had a very beneficial provision that allowed the employees to purchase additional ‘years’ leading to greater financial benefits, so long as the employees acted to purchase those extra years within 12 months of

commencing employment. The employees were unaware of this right to purchase extra years, but had they known of it they would have exercised the right. [page 241] The House of Lords held that, where a contract of employment is negotiated between employers and a representative body and not negotiated individually, and it contained a particular clause conferring upon the employee a valuable right contingent upon his or her acting to obtain the benefit, and the employee could not be reasonably expected to be aware of the clause unless it was brought to the attention of the employee, then there was a term implied in law that the employer must take reasonable steps to bring the clause to the attention of the employee so he or she may enjoy its benefit.212

Blurring the boundary between terms implied in law and fact 5.52 The approach of courts to the employee’s right to perform work illustrates a similar blurring of the distinction between terms implied in fact and terms implied in law. As discussed in 8.37, the general rule is that an employer has no implied obligation to provide work to an employee unless the contract falls within some recognised exceptions such as contracts of public performers and contracts in which the remuneration is wholly or partly based on piece rates or on commission. There is a right to be provided with work in contracts falling within those exceptions. Very little has been said in the authorities about whether for employees falling within these exceptions, the term requiring the employer to provide work is implied in law, implied in fact or is merely a question of construction. There is some authority to support the view that in public performance cases the term is implied in law,213 though in the piece rate and commission cases the approach has generally been to ascertain if the term is implied in fact.214 Where the contract does not fall within any of the relevant classes, the appropriate test is whether the term is implied in fact215 — a test that is very difficult to meet. In other cases the

[page 242] matter is dealt with as one of construction in light of the surrounding circumstances.216 The approach appears to be that if the contract is one which falls within the abovementioned exceptions, then the ‘surrounding circumstances’ suggest that the term should be readily implied.217 It is suggested that the better view is that in certain categories of employment contract (being those falling within the recognised exceptions) the term regulating the provision of work is implied in law.

TERMS IMPLIED IN FACT The nature of a term implied in fact 5.53 Terms implied in fact are unwritten terms based on the presumed or imputed intention of the parties, rather than their actual intention. As Mason J stated in Codelfa: [A term implied in fact is] one which it is presumed that the parties would have agreed upon had they turned their minds to it — it is not a term that they have actually agreed upon. Thus … the deficiency in the expression of the consensual agreement is caused by the failure of the parties to direct their minds to a particular eventuality and to make explicit provision for it.218

Where the parties have entered into a formal contract that appears to exhaustively catalogue their agreement then it is more difficult for a court to conclude that the parties intended their written agreement should be supplemented by a further unwritten term.219 Courts are more likely to imply a term where there is no formal agreement or the written terms are clearly incomplete.220

The ad hoc nature of terms implied in fact 5.54 Terms implied in fact are tailored to the particular circumstances and arrangements of the parties, unlike terms implied in law that are [page 243]

implied into all contracts of a particular class.221 Courts are slow to imply a term in fact.222 It is rare for a term to be implied in fact into a contract of employment and rarer still for the exacting tests governing the implication of such terms to be met. The existence of a term implied in fact is acutely sensitive to the factual and legal matrix in which the parties form and perform the contract. Simply because a court does not imply a term in fact in one employment contract does not mean that the term will not be implied in other employment contracts. For example, in Byrne the High Court decided that a term was not implied in fact into Mr Byrne’s employment contract entitling him to the benefits of a specific provision in an award. However, as McHugh J acknowledged five years later in the Pacific Coal case, the terms of an award may be given contractual effect through a term implied in fact.223 These observations illustrate the ad hoc nature of the implication of terms implied in fact.

The implication process 5.55 When determining whether to imply a term the proper approach is first to ascertain the express terms of the contract, including any implicit terms that may be inferred from the express terms.224 The court then attempts to discern the terms, if any, that are implied in the contract as a matter of presumed or imputed intention of the parties.225 In attempting to ascertain this intention, the court is not limited to examining the express terms but can also examine the nature of the contract and the surrounding circumstances.226 As those circumstances may differ from [page 244] case to case, the same term may not be implied in similar cases.227 Ascertaining the surrounding circumstances is a question of fact for the court, but the determination of whether a term should be implied is a question of law.228 5.56 Ali v Christian Salvesen Food Services Ltd illustrates the importance of the surrounding circumstances in the implication of a term. In that case a

collective agreement was negotiated between two unions and the employer. The collective agreement was then incorporated by reference into the contracts of 150 employees. One of the employees covered by the agreement sought to imply a term. The terms of the agreement gave no indication whether or not the term should be implied. Waite LJ stated: [The intention of the parties is] … collected from the words of the agreement and the surrounding circumstances … . The circumstances which are in my view crucial to the present case are that this was a collective agreement negotiated across a broad front for a substantial labour force. It represented a carefully negotiated compromise between two potentially conflicting objectives … . It is in the nature of such an agreement that it should be concise and clear — so as to be readily understood by all who are concerned to operate it. One would expect the parties to such an agreement to set their face against any attempt to legislate for every possible contingency. Should there be any topic left uncovered by an agreement of that kind, the natural inference, in my judgment, is not that there has been an omission so obvious as to require judicial correction, but rather that the topic was omitted advisedly from the terms of the agreement on the ground that it was seen as too controversial or too complicated to justify any variation of the main terms of the agreement to take account of it.229

Implication of terms in formal and informal contracts 5.57 In the BP Westernport decision the Privy Council set out the test that needs to be met for a term to be implied in fact in formal contracts: [page 245] … for a term to be implied, the following conditions (which may overlap) must be satisfied: (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 express term of the contract.230

This test has been repeatedly applied in the High Court in cases concerning formal written contracts.231 The five conditions must all be met and it is insufficient for the term to be reasonable.232 Consequently, it is extremely rare for a court to conclude that a term should be implied in fact into a formal employment contract: ‘The more detailed and comprehensive the contract the less ground there is for supposing that the parties have failed to address their minds to the question at issue’.233

The implication of terms in informal contracts 5.58 Where there is no formal contract a less rigorous approach to the implication of terms should be taken. In such cases the cumulative, rigid criteria in BP Westernport should not be applied: … in a case where it is apparent that the parties have not attempted to spell out the full terms of their contract, a court should imply a term by reference to the imputed intention of the parties if, but only if, it can be seen that the implication of the particular term is necessary for

[page 246] the reasonable or effective operation of a contract of that nature in the circumstances of the case.234

In informal contracts, the term must be necessary for the reasonable operation of the contract, or necessary for the effective operation of the contract.235 It is probable, but no means clear, that the term must also be obvious.236 An alternative view is that a term that is obvious in an informal contract is inferred from the express terms, so no issue of reasonableness and efficacy arises.237 The term must be consistent with the express terms of the contract.238 What is meant by an informal contract in this context is not clear. It certainly refers to contracts that are patently incomplete on their face; it may also refer to contracts that are oral or partly oral.239 It may also refer to contracts of adhesion — that is, a contract in which the terms are agreed but have not been the subject of negotiation between the parties, except perhaps as to remuneration.240 It is very difficult to satisfy the test for the implication of terms in fact, even in cases where there is an informal contract. There are few employment cases where terms are implied in fact. When terms are implied in employment contracts it is often hard to avoid the conclusion that the court has been moved to [page 247] rectify a patent injustice rather than being satisfied that the elements of the

test are met.241

The approach in the United Kingdom 5.59 In the United Kingdom there has been some fleeting support for a very different approach. As discussed above,242 in the United Kingdom there is a statutory scheme governing the provision of particulars of employment. The approach taken in some cases was, quite bluntly, to ‘invent [terms] … by deciding which term fits in best with all the circumstances of the case’.243 This unorthodox approach was taken as the Parliament had determined that the employer must provide written particulars of certain matters and, if there was no express agreement on the matter and no term could be implied using the ordinary tests, then on one view the court had a statutory duty to invent a term. This approach does not accord with the Australian authorities discussed above, and arises from a statutory context that appeared to compel an improvised solution. It is not a reflection of the common law in either country on the implication of terms in employment contracts.244 More consistent with orthodoxy (though still deviating somewhat from the rules discussed above) is the approach taken to the implication of a necessary term, such as the place of work. Browne-Wilkinson J has stated: … it is essential to imply some term into the contract in order to give the contract business efficacy: there must be some term laying down the place of work. In such a case, it seems to us that there is no alternative but for the tribunal or court to imply a term which the parties, if reasonable, would probably have agreed if they had directed their minds to the problem.245

Particular aspects of the tests The term must be reasonable and equitable 5.60 In a formal contract any term implied in fact must be reasonable and equitable. Courts have repeatedly cautioned that reasonableness is not enough in itself to imply a term in a formal contract.246 If the [page 248]

proposed term is unreasonable or inequitable then it is unlikely that both parties intended the term to form part of the contract. The implied term is less likely to be reasonable if it will operate in a partisan fashion, favouring the interests of one party over the other.247 In Devonald v Rosser & Sons the employee was engaged as a pieceworker. His employer alleged that it was an implied term that it could close its works without notice in the event that they were unable to obtain orders at remunerative prices, thereby depriving the employee of the opportunity to earn income during any period of notice. The Court of Appeal held that such a term was unreasonable.248 In informal contracts, the implication appears to be addressed to a different issue: whether the term is necessary for the reasonable operation of the contract.249

The term must be necessary 5.61 In a formal contract, the term must be necessary to make the contract effective.250 Almost all attempts by employers or employees to imply a term in fact fail because the term is not necessary. The necessity for the term is to be judged by reference to the express terms of the contract,251 statutes and industrial instruments governing the [page 249] relationship252 and perhaps by obligations otherwise imposed by law on the parties.253 In Byrne v Australian Airlines there was a clause in an applicable award that stated ‘the termination of employment by an employer shall not be harsh, unjust or unreasonable’. A breach of that award clause could lead to a penalty of up to $1000 being imposed on the employer, but no damages could be awarded for the award breach. The employees argued that the clause in the award was a term implied in fact in their contracts and they could recover contractual damages for breach. The majority stated: Plainly, the fact that the inclusion of such a term would, if it were breached, support an action for damages by the employee is no ground for saying that the term is necessary for the reasonable or

effective operation of the contract. The contract is capable of operating reasonably and effectively in the absence of such a term and in the presence of an award provision offering limited remedies in the event of breach.254

5.62 Where the common law recognises a power or entitlement under the contract on a particular topic then it is usually unnecessary for a term to be implied in fact on that topic. In Brackenridge v Toyota Motor Corporation Australia Ltd the court found that it was unnecessary to imply a term in fact into the employment contract to permit the employer to demote an employee guilty of misconduct. One of the reasons for this conclusion was that the common law had consistently recognised that contracts of employment are workable without such a power.255 The requirement that the term be necessary will be particularly difficult to satisfy if the employment has continued for a substantial period without a clear need for the term.256 [page 250]

The term must be obvious 5.63 In formal contracts a term will not be implied unless it is obvious.257 This is probably also a requirement when seeking to imply a term in informal contracts.258 The term must be one that the parties would have intended if they had directed their mind to the issue.259 The term pleaded must be the obvious term. It is not sufficient that the term alleged is the most likely of a series of reasonable possible terms.260 In Byrne v Australian Airlines261 the implied term alleged was that the termination of employment by an employer shall not be harsh, unjust or unreasonable. An equally obvious term was that the employer will provide the benefits of the award to the employee, or perhaps even that the parties will comply with the obligations imposed by the award. None of these terms was the one, single obvious term to imply. If the content of the term cannot be identified then the term will not be implied in fact.262

The term must be clear 5.64 The term to be implied must be clear. If it is unclear, then it is unlikely

‘to go without saying’. It may be more difficult to clearly state a term that deals with a complex matter. For example, in Mann v The Capital Territory Health Commission the term alleged was that the Health Commission would ‘furnish the plaintiff with surgical work of a quantity and kind suitable for a senior and experienced general surgeon’. The employer could not simply assign patients to Dr Mann for surgery for a number of reasons: patients might request their own doctor instead [page 251] of Dr Mann; referring doctors might not refer a patient to Dr Mann as they might not think he was a suitable surgeon; and the hospital could not guarantee a steady supply of patients to operate on. As Fox and Kelly JJ stated: … the vicissitudes attending the employment were too many and too varied to allow the term to be implied … When an implied term is relied upon, it should stand out as something that can be formulated with reasonable precision. An uncertainty as to what the terms should be, or the existence of equally plausible alternatives, is fatal. There is a quite delusive simplicity in introducing terms simply because their formulation has an air of reasonableness.263

The term must be consistent with express terms 5.65 A term will not be implied where it is inconsistent with an express term of a contract: ‘… it is a basic principle of contract law that if a contract makes express provision in almost unrestricted language, it is impossible in the same breath to imply into that contract a restriction … ’.264 In Ikin v Danish Club the Victorian Court of Appeal refused to imply a term requiring the giving of reasonable notice when the contract expressly provided for fixed term employment.265 A related problem arose in Griggs v Noris Group of Companies. There the express term of the contract stated that the employee was not entitled to payment for overtime, but could take time off in lieu of overtime. The employee sought the implication of a term that entitled him to payment for any accrued overtime on the termination of his employment. White J decided: The implied term for which the appellant contends appears to contradict an express term of the contract, namely, the term that the appellant would not be entitled to any additional payment in

respect of overtime. Even if not inconsistent, it hardly seems reasonable to impute to the parties an intention that whilst the appellant should have no entitlement to payment

[page 252] for overtime, he should have an entitlement to payment in respect of the time off which was to be the substitute for that entitlement.266

TERMS IMPLIED BY CUSTOM Implication of a term based on custom: the test 5.66 A term may be implied in a contract of employment by reason of a custom in the trade. A custom includes the practice in a particular industry or profession.267 A term will be implied by reason of a custom if, and only if, the following four conditions are met. First, the term sought to be implied must be certain and reasonable. Second, the term sought to be implied must be consistent with the express terms in the contract and statutory provisions. Third, the custom relied on must be so well known and acquiesced in that everyone making an employment contract in the position of the employer and employee would reasonably be presumed to have imported that term into the contract. Fourth, the custom must be binding: see 5.68–5.72. Custom no longer plays a significant role in employment law and never really did in the twentieth century.268 In the last few decades the only two significant industrial law customs (the last on–first off redundancy selection principle and ‘no ticket–no start’) have either fallen into disuse, or have been proscribed by the legislature. For the reasons discussed in 5.74, a term based on a custom in a trade is rarely implied in employment contracts in Australia. The difference between trade customs and the ‘custom and practice’ adopted by the parties as the source of contractual obligations is discussed in 5.77–5.79. 5.67 There is a difference between a term implied by custom and a practice that the employer has consistently adopted. The fact that an employer has consistently applied the terms of a document, such as a redundancy policy, to a class of employee does not mean that all employees are contractually

entitled to its benefits.269 There is a difference between a contractual obligation and a policy considered to be expedient. There are some United Kingdom cases that appear to support a contrary conclusion mentioned at 5.78. [page 253]

Proof of a custom 5.68 A custom must be strictly proved.270 Despite some judicial suggestions to the contrary, this does not mean that the court is to apply some standard of proof other than the balance of probabilities. Rather, it is a reflection of the difficulty of proving the requisite notoriety of the custom: ‘clear evidence of a practice is required to establish something as potentially nebulous as custom and practice’.271 The existence of the custom that will justify the implication of a term is a question of fact.272 The proof of a custom involves the induction of a general proposition from a large body of individual instances: Seeing that custom is only to be inferred from a large number of individual acts, it is evident that the only proof of the existence of a usage must be by the multiplication or aggregation of a great number of particular instances; but these instances must not be miscellaneous in character, but must have a principle of unity running through their variety, and that unity must show a certain course of business and an established understanding respecting it.273

5.69 The custom must be observed by the overwhelming proportion of those in the trade though it need not be universally accepted.274 Before a term is implied there must be an identifiable trade, professional, local or other grouping within which the custom prevails. It is insufficient [page 254] to prove that the particular employer always adopted the custom.275 The trade or profession in which the custom is applied may be defined broadly or narrowly.276 It is probably insufficient to only prove that the custom alleged is reflected in an express term in almost all contracts in the industry.

Evidence of the right in such cases is accounted for by the explicit agreement of the parties and not the operation of an implicit custom.277 Where a word in a contract is governed by a special meaning in the relevant trade, then it is sometimes said that the business usage, or the trade custom and usage, should be used to give meaning to that word.278 This is a rule of construction of the express terms of the contract. The implication of a term based on custom is a different process. The implication of such a term concerns the unwritten and implicit terms of the contract, not the meaning of the express (and usually written) terms.

Particular aspects of the test The custom must be certain and reasonable 5.70 A custom must be certain279 and reasonable280 to be contractually enforceable. In Devonald v Rosser & Sons the employer of piecework [page 255] employees alleged that it was a custom in the tinplate trade that it could close its works without notice to employees in the event that the employer was unable to obtain orders at remunerative prices. It was held that such a term was neither reasonable nor certain as it was left entirely at the discretion of the employer to determine what is remunerative and what is not.281

The custom must be consistent with express terms and applicable statutes 5.71 A term based on a custom will not be implied where the term is inconsistent with an applicable statute282 or inconsistent with the express283 (and perhaps implied)284 terms of the contract. As the implication is based on the presumed intention of the parties, it yields to the express terms that evidence the actual intention of the parties.285 The requirements of certainty, reasonableness and consistency with express

[page 256] terms are probably the same as the requirements in the BP Westernport test for the implication of terms based on fact.286

The custom must be notorious 5.72 The custom must be notorious; that is, it must be ‘so well known and acquiesced in that everyone making a contract in that situation can reasonably be presumed to have imported that term into the contract’.287 The implication of the term is based on the presumed intention of the parties to contract on the basis of the custom, not their actual intention.288 As to the knowledge of the custom: … a person may be bound by a custom notwithstanding the fact that he had no knowledge of it … in modern times nothing turns on the presence or absence of actual knowledge of the custom; that matter will stand or fall with the resolution of the issue of the degree of notoriety which the custom has achieved.289

Courts have often refused to imply a term based on custom into the contract of an employee who is entering the trade for the first time.290 There appears to be a tension between those decisions and the restatement of the law by the High Court quoted above. The resolution of that tension may lie in the proposition that it cannot reasonably be [page 257] presumed that the parties, one of whom is foreign to the trade, enter into a contract on the basis of a custom that is unknown to one of them.291 5.73 To be contractually enforceable the custom itself ‘should be established as … having binding effect’.292 This has two consequences: first, certain, notorious and reasonable practices in a trade (such as closing for a half day on Christmas Eve) will not give rise to rights unless those in the trade adopt the practice because they consider themselves legally bound to do so.293 Second, if the custom is followed because of compliance with an industrial instrument or statute, then it is unlikely to give rise to contractual rights. In

Australia employers customarily provide benefits to their employees because they are obliged to do so by an industrial instrument or statute. Such a practice does not mean that the parties should be presumed to be contracting on the basis of the custom. As the majority stated in Byrne v Australian Airlines, ‘there would be no need for them to do so because the award operates of its own force’.294

The rarity of terms based on custom and ‘crystallised custom’ Why terms based on custom are rare 5.74 Terms based on custom are rarely implied in employment contracts in Australia for the following six reasons.295 First, it is very difficult to [page 258] prove a term based on custom.296 In earlier times, it was easier for a local jury to bring their own knowledge to bear on whether, as a matter of fact, a custom applied in a particular region. Second, in this era of universal education most employment contracts are written. There is less scope for the implication of a term in a contract governed by written terms. Third, many employees commute for hours to attend work over a hundred kilometres from their local communities. With employers drawing their workforces from diverse areas, it is less likely that a local custom will meet the requirement of notoriety.297 Fourth, employees entering an industry are less likely to be bound by a custom and there is greater job and occupational mobility in the twenty-first century than in previous times.298 Fifth, post-Fordist, flexible modes of production mean that practices of employers across a trade are more likely to change regularly, making the establishment of a settled custom arising from those practices more difficult. Finally, in an era of enterprise bargaining and individualisation of

employment conditions, there are now more differences between the employment practices in an industry as the result of the demise of standardised terms of employment established by industry awards. As working conditions vary between employer to employer across an industry, it is less likely that there will be one common custom that is so well known and acquiesced in that everyone making an employment contract in that industry can reasonably be presumed to have imported that term into the contract.

Crystallised custom 5.75 The implication of terms based on custom in the United Kingdom has had a chequered history. There are a smattering of cases prior to the twentieth century in which customs are established in a trade,299 [page 259] particularly cases concerning notice.300 From the mid-twentieth century some academics, though few judges, embraced the opaque contention of Sir Otto Kahn-Freund that collective bargains were implied into contracts of employment by ‘crystallised custom’. The theory was advanced to explain a puzzling phenomenon where in many industries workers were engaged on a contract that expressly said nothing about rates of pay, sick leave, annual leave and the like. In practice, the employer provided the wages and conditions stipulated in a collective bargain. The issue was whether the employee was contractually entitled to the benefits of the collective bargain and, if so, by what means. Sir Otto’s argument was as follows: … in the majority of cases … the parties to a contract of employment do not expressly lay down its terms, and the gap is filled by ‘custom’. Here we can see the legal significance of the collective agreement. We can normally assume that its terms are the ‘customary’ terms and that employer and employees within its scope contract on this basis. It does not … matter whether the worker is a member of a union party to the agreement … What does matter is whether the terms of the agreement are in fact applied in the industry and district. The wage scales and other ‘codes’ it contains can easily become ‘crystallised custom’.301 [emphasis added]

If the assumption emphasised is factually correct, then this is largely a statement of the orthodox view of the operation of the implication of a term

based on custom.302 As McHugh and Gummow JJ have stated, ‘the term “crystallised” adds nothing to the principles which determine when the existence of a custom or usage will justify the implication of a term into a contract’. 5.76 One difficulty with Sir Otto’s argument was that the assumption restated the conclusion; that is, if one assumes the terms of the collective bargain are the customary terms then they are legally enforceable as terms [page 260] implied by custom. Another difficulty was proving that the assumption was correct — a question of fact in each case. No court in the United Kingdom or Australia has held that such a custom has existed in any particular trade.303 The contention of Sir Otto that there was such a custom foundered on the disparity between his conception of the operation of the custom and the legal principles applied in determining whether a custom existed: The theory had the potential to bring about the automatic incorporation of collective bargains. However, it was predicated on a very expansive view of legally relevant custom which brought it firmly into the realms of legal fiction. In consequence the theory was always vulnerable to challenge to the extent it was not soundly grounded in pre-existing legal principle. More particularly, where one sought to incorporate, but could not satisfy the general contractual rules on binding custom, there was always the danger that reliance on crystallised custom would not lead to incorporation.304

In the United Kingdom the existence of such a custom was largely overtaken by legislative developments. Commencing with the Contracts of Employment Act 1963 (UK) employers were required to provide a statement of the terms of employment to employees. In many cases those statements expressly incorporated the terms of the collective agreement into the contract of the employee.305

Past conduct as a source of binding obligations: a comment 5.77 There is an important difference between, on the one hand, a custom in a

trade and, on the other hand, the custom and practice adopted by the parties. The custom and practice of parties refers to the ‘inchoate collection of deliberately unarticulated rules’ which constitutes actual work practice.306 It concerns the conduct of the parties at one particular enterprise, unlike a custom in a trade that deals with an industry wide practice. There are repeated admonitions by courts that the practice of an employer in providing benefits to its employees, or to a particular employee, does not per se convert the practice into a contractually [page 261] enforceable right.307 However, the practice of the parties may be the source of contractual rights in some circumstances. First, the practice of the parties is a relevant factor in determining the scope of the inherent flexibility of the contract.308 The scope of the employment, which helps define many of the employee’s implied duties, also partly reflects the parties’ practice.309 Second, the practice of the parties may be relevant in determining whether a contract has been made, the nature of the contract and the terms of that contract.310 Third, the practice of the parties may have effected a variation of the contract as the result of the acceptance by the employee in the face of a unilaterally imposed change by the employer.311 Fourth, the practice of the parties may give content to the obligation of the implied term of trust and confidence.312 Fifth, the practice of the parties is relevant in determining if a term has been incorporated into the contract by a course of dealing.313 Sixth, the practice of the parties might give rise to an estoppel by conduct.

Custom in the United Kingdom 5.78 In the United Kingdom in recent years there have been claims, whose juridical basis is unclear, that the employee is entitled to the conditions set out in an employee handbook or similar document due to the ‘custom and practice’ at the enterprise.314 These claims appear to be advanced as a type of relational contract variation. They seem to proceed on the basis that a contractually binding obligation is created when the employer adopts a

particular practice (such as making redundancy payments), the employee is provided with notice of the practice, the employee has a reasonable expectation that he or she will benefit from the practice and the employer intends the practice to be binding.315 The reliance on custom and the reasonable expectations in such cases is misconceived. It is suggested that a firmer jurisprudential footing for such claims is to allege there is a variation. The elements of offer by notice to [page 262] the employee and intention to create a contract are clearly established. The elements of acceptance and consideration, often considered to be substantial hurdles in proving a variation, are not as considerable as they once were.316

Custom and the evolving and social nature of employment 5.79 There are aspects of the law governing the implication of terms by custom that reflect the relational nature of the employment contract which is performed in a social and collective context. The implication of terms by custom arises purely from the relationship between the parties and it is not dependent on their express, or even implied, intent.317 The implication of a term based on custom is contextualised by considering relations beyond those of simply the employer and the employee. It looks to the practice of the whole of the relevant trade.318 It does not atomise the relations by only examining the actions of the individual employee and employer. The practice of the employer in its dealing with employees is less relevant than the practice of strangers to the contract,319 even in circumstances in which the parties are ignorant of that practice.320 The implication of terms by custom is further contextualised by making it particularly responsive to the economic and regulatory environment in which the employment is conducted. In Australia the system of statutorily enforceable minimum awards and enterprise agreements precludes the possibility that the benefits in those instruments are implied by custom into the contracts to which the instruments apply.321

STATUTES, INDUSTRIAL INSTRUMENTS AND CONTRACT 5.80 There are at least a dozen statutes regulating part of the employment of all employees in Australia. A review of all of these statutes is beyond the scope of this text. A statute may govern all of the terms of the engagement of an employee. A contract consists of a voluntary assumption of responsibility by the parties.322 Where the statute completely governs the relationship (including whether the employee [page 263] must serve the employer and the terms of the engagement), then it is unlikely for the relationship to be governed by contract.323

The Fair Work Act, modern awards and enterprise agreements 5.81 The principal statute governing Australian employees is the Fair Work Act which applies to all employees of constitutional corporations across Australia. It also applies in the public sector in Victoria, the Australian Capital Territory and the Northern Territory, to the federal public sector and to local government employment in Tasmania. In all states other than Western Australia, the Act applies to all private sector employment. In sum, the Act applies to about 90% of Australian employees. The Fair Work Act establishes 10 National Employment Standards (NES) whose content is discussed in 8.2–8.12. There are also about 120 modern awards made by Fair Work Australia. Modern awards deal with up to 10 matters.324 National Employment Standards and modern awards do not deal comprehensively with conditions of employment. Their terms can be supplemented, and in almost every case are supplemented, by contractual provisions. There are about 25,000 enterprise agreements in Australia covering around

2.5 million employees — about 25% of the Australian workforce. Approximately 2 million employees are covered by agreements in which a union is also covered by the agreement.325 An enterprise agreement regulates the terms and conditions for those national system employees to whom it applies. The agreement may be about matters pertaining to the relationship between the employer and its employees. Enterprise agreements need not exhaustively specify all such matters.326 Although it would be rare in practice, the parties to the enterprise agreement may, if their intention is expressed in clear terms, exhaustively define their obligations to the exclusion of any express or implied contractual terms.327 [page 264] In this text the term industrial instrument refers to a modern award, an enterprise agreement or an analogous instrument such as a workplace determination or Equal Remuneration Order made under Pts 2-5 and 2-6 of the Act. 5.82 In addition to the Fair Work Act, there are at least 25 other federal statutes and between 10 to 25 statutes in each state and territory that grant rights or impose duties in relation to private sector employment. Public sector statutes federally, and in each state and territory, impose a further range of obligations on public sector employees. For almost all employees in Australia the sources of their rights and obligations are an amalgam of the terms of their contracts, the common law, the NES, the applicable modern award, enterprise agreements and the provisions of between 35 to 50 statutes. As a consequence, there is a degree of counterproductive overlapping between these sources.328

Contracts and conduct in breach of a statute or an industrial instrument 5.83 There are four main ways in which a statutory provision may render a term or its performance unlawful. First, the contract itself may be one which the statute expressly or impliedly prohibits. Second, the contract may be to do

something which the statute prohibits, such as a contract to commit a crime. Third, a contract or term may be illegal because, although it is not prohibited by a statute, it is associated with or made in furtherance of a purpose frustrating a policy in, or the operation of, the statute. Fourth, a contract may be lawful according to its own terms but may be performed in a manner which the statute prohibits: see 4.23. 5.84 The Fair Work Act does not concern itself with the first two types of illegality. It does not prohibit parties from entering into a contract to provide wages and conditions that are less than those set out in the NES or an industrial instrument. Sections 44, 45 and 50 provide that an employer is not to contravene the NES, a modern award or an enterprise agreement. Entering into a contract to do so will not, per se, be a contravention of those provisions.329 A contract or term to provide wages and conditions that are less than those set out in the NES or an industrial instrument is illegal because, although it is not prohibited by the Fair Work Act, it is associated [page 265] with or made in furtherance of a purpose frustrating a policy in, or the operation of, the Act. Paying wages and providing conditions that are less than those set out in the NES or an industrial instrument is illegal because the contract is being performed in a manner which the statute prohibits. The consequences of those types of illegality are discussed in 4.28–4.29. Contravention of the NES or an industrial instrument attracts a civil penalty: see s 539. The court may grant a remedy under s 545, including an injunction to ‘remedy the effects of a contravention’. Ordinarily an act constituting the contravention is not void.330 It is conceivable that a particular term of an industrial instrument might reveal an intention that the conduct constituting contravention be rendered void, though the relevant intention may need to be apparent in the Fair Work Act that gives force to the industrial instrument.331

Contracting out of protections and estoppel

5.85 An industrial instrument governs the relation between the parties in regards to all matters with which it deals. The contract of employment cannot derogate from the terms and conditions of an industrial instrument which operates with statutory force.332 The parties cannot contract out of NES entitlements or entitlements in industrial instruments.333 The parties cannot agree that those entitlements will not be paid at all or not be paid in full. The parties can compromise a dispute about the entitlements by an accord and satisfaction.334 [page 266] In the context of the Fair Work Act and its predecessors, courts have consistently held that an estoppel cannot be relied on to defeat a claim by an employee to an entitlement stipulated in an industrial instrument or the Act.335 This is because those rights are conferred to further a public policy and an estoppel cannot arise when it is inconsistent with a statutory purpose.336 5.86 There are various provisions in the Fair Work Act that grant the right to agree to alter some entitlements conferred by the Act and in industrial instruments.337 The parties do not contract out of entitlements by exercising those rights. Other than through the exercise of those rights, when a matter is dealt with in an industrial instrument it will usually be a contravention of the instrument for an employer to deal with that subject matter in a way that is inconsistent with the agreement. In McLennan v Surveillance Australia Pty Ltd the AWA conferred on the employee an unqualified right to terminate on the giving of notice. The WR Act established a procedure for varying the AWA that had to be followed by the parties. The parties entered into a contract in which they agreed the employee would pay an amount to the employer on termination of employment. The majority of the court held that the Act prohibited the alteration of rights and obligations about a matter dealt with by the AWA if it might disadvantage the employee other than by the means established by the Act. The contractual term that qualified an otherwise unqualified right was unenforceable.338

Satisfying obligations under industrial instruments 5.87 The NES and industrial instruments impose obligations to make various types of payments to the employee, such as wages and overtime payments. Issues sometimes arise about the satisfaction of those [page 267] obligations by making a payment for an unrelated purpose. Although the same principles apply whether the amount is owed under an NES, a modern award or an enterprise agreement, for the sake of simplicity it is assumed below the amount is payable under an award. Where the employer owes an amount under an award, pays the amount and does not specify the purpose for which it is paid, then the whole of the amount paid can be credited against the award entitlements for the work whether that entitlement arises as ordinary time, overtime, weekend penalty rates or any other monetary entitlement under the award.339 This is so, whether the payment is made in contemplation of the obligations arising under the award, or without regard for the award. For example, if an employer owes $1000 in wages and $500 in overtime payments, the employer will satisfy both obligations by paying $1500 without specifying the purpose of the payment.

Correlation between the sum paid and the award obligation 5.88 Where a sum of money is paid expressly or impliedly for a specific purpose, over and above, or extraneous to, the requirements of a particular provision in an award, then the payment does not satisfy the particular award entitlement arising outside the agreed purpose.340 In these circumstances the issue is to determine if the payment and the entitlement under the award coincide. For example, if an employer is obliged to pay $1000 a week in wages under an award and pays the employee $1200 a week in wages then there will be a correlation.341 There must be a clear correlation between the two payments. An agreement to pay over award wages for ordinary time does not satisfy an entitlement to

be paid for overtime, to be paid a special allowance, or annual leave loading.342 An overpayment of wages in one pay cycle does not ordinarily operate to satisfy entitlements in the next pay cycle.343 [page 268] For example, if an employer underpays wages by $20 a week for a year, its obligations will not be satisfied by paying a discretionary Christmas bonus of $2000.

Payments made for collateral purposes 5.89 The purpose of the payment is ascertained in the ordinary objective manner in contract.344 The identification of the purpose can be by agreement or by a unilateral act of the employer prior to the payment.345 If the sum is designated by the employer as being for a purpose other than the satisfaction of the entitlements, the employer cannot afterwards claim to have satisfied the entitlements by means of the payment. If the sum is designated by the employer as being for a purpose that includes the satisfaction of the entitlements (such as an all in payment to cover all award entitlements), the payment may satisfy the entitlements covered by its broad designation. If no designation occurs, the employee is free to appropriate the payment for the satisfaction of one of a series of obligations.346 For example, assume an employer owes $1000 in wages, $500 in overtime payments under an award and $2000 in non-award commission payments. If the employer makes a payment of $1000 in wages, then the employer’s obligations relating to the wages under the award will be satisfied. But where the employer doesn’t designate the purpose of the payment, the employee could choose to reduce the obligation to pay commission by $1000 and sue for the whole of the wages. 5.90 By way of comment, it is suggested that the issue analysed in this area is analogous to the question of whether an employee may retain a collateral payment that arises out of, and connected with a breach of, a contract. As a general proposition, where an employee receives a collateral benefit as the

result of the employer’s breach of contract then that benefit goes to reduce that part of a damages award which is of the same character as the collateral benefit. A reduction will not be made when the collateral benefit was conferred on the employee to be enjoyed in addition to any damages recoverable from the employer or the [page 269] collateral benefit is of a different character to the damages award. The resolution of the issue turns on the character and purpose of the particular financial benefit which the employee receives.347 These principles in this parallel field have not been used to inform the principles governing the satisfaction of award entitlements.

Statutes and contract in public sector employment The Crown’s rights under the common law and statute 5.91 Historically under the common law the Crown occupied a privileged position. Citizens could be compelled to serve the Crown.348 Her servants held their positions at the pleasure of the Crown.349 The Crown had a right to suspend its servants from office.350 A statute that constitutes a code governing the employment may exclude the operation of these common law principles. Alternatively, the statute may modify the common law.351 In Australia, various public sector statutes deal with the dismissal or suspension of Crown servants and apply to almost all servants of the Crown. They modify or exclude the common law rule, although some expressly retain the power to dismiss or suspend servants at pleasure.352 There is considerable support for the view that the common law rule permitting dismissal or suspension at pleasure, being an implied term in the contract, may be modified by an express term such as a term establishing a fixed term.353

Contract and statute in public sector employment

5.92 There is a contract of employment between public servants and the Crown.354 Public sector employers may enter into a contract consistent with applicable statutory provisions: [page 270] … the contract must be consistent with any statutory provision which affects the relationship. No agent of the Crown has authority to engage a servant on terms at variance with the statute. To the extent that the statute governs the relationship, it is idle to inquire whether there is a contract which embodies its provisions. The statute itself controls the terms of service.355

Terms may be implied into a contract of a public service employee whose employment is governed by a statute in the ordinary manner, so long as the implied terms and the statute are consistent.356 Inconsistencies between the employment contract and governing statutes arise in a series of contexts. 5.93 First, there may be no power to engage the employee. The capacity of the Crown and corporations that are created by statute to enter into employment contracts is discussed in 3.67. Second, the officer entering into the contract on behalf of the Crown or public sector body may have no authority to do so. The principles governing the authority of such agents are discussed in 3.75–3.78. Third, the statutory procedure for entering into, performing or terminating the contract may not have been followed. Where a statute governs the procedure to be followed then the parties cannot by agreement adopt a different procedure.357 An employee cannot contract out of the benefits of protective statutory provisions that govern the procedures to be followed when disciplining the employee or terminating the employment, unless the statute permits that course. The effect of a wrongful dismissal or removal from office in contravention of statutory procedures is discussed in 11.67 and the remedies available to such employees are discussed in 15.104–15.110. Fourth, there may be an inconsistency between the terms of the contract and a governing statute. The extent to which a statute governs the relationship is a matter of construction of the statute. Governs in this sense means regulates to the exclusion of other modes, usually by

[page 271] establishing a code which prevents alternative regulation by contract. Statutes governing public sector employment often define the grounds on which employment can be terminated and there will be no room for the implication of a power to dismiss for other reasons when the Act exhaustively defines those grounds.358

INDUSTRIAL INSTRUMENTS AS THE SOURCE OF CONTRACTUAL RIGHTS Statutory and contractual rights 5.94 Statutes and industrial instruments create statutory rights not contractual rights, subject to the exceptions discussed below. The Fair Work Act does not directly import the NES or the terms of modern awards and enterprise agreements into employment contracts. A contravention of the NES or those industrial instruments gives rise to a statutory cause of action, not an action for breach of contract. In Byrne v Australian Airlines the High Court decided that the Industrial Relations Act 1996 (Cth), through the award, created a statutory right that could be enforced through statutory means. Neither the Act nor the award created a contractual right.359 Subject to one gloss, the same conclusion will apply to the Fair Work Act, awards and agreements. The remedies provided by the Fair Work Act are the exclusive remedies available to an employee for contravention of the Act.360 This proposition was more significant prior to 2009 when the employee’s remedies for contravention of an industrial instrument were narrower.361 The same reasoning applies to superannuation contributions. In Australia an employer who does not make superannuation contributions in accordance with the Superannuation Guarantee (Administration) Act [page 272]

1992 (Cth) is subject to a surcharge. That Act does not create a contractual right to superannuation contributions enforceable by the employee.362 The gloss mentioned above is that a statute or industrial instrument may expressly, or by necessary intendment, create or alter contractual rights. The Sale of Goods Acts in each state have this effect. Occasionally industrial laws will have such an effect.363 The Fair Work Act does not appear to have this effect, other than perhaps s 326. In Byrne v Australian Airlines Limited the employees also argued that there was an implied term of the contract that, in accordance with a clause in the award, the termination of employment would not be harsh, unjust or unreasonable. The High Court held that such a term was not implied in fact, implied in law or implied by custom.364 Some earlier authorities had suggested that an applicable award is incorporated automatically into the contract of employment.365 The existence of obligations created by statute and in industrial instruments may affect the construction and implication of terms.366 5.95 The terms of an unregistered collective agreement do not become automatically terms of the contracts of employment covered by the agreement.367 The consistent application by an employer of an unregistered collective agreement to the employee (or other employees)368 does not result in the collective agreement gaining contractual force.369 ‘Working under’ a collective agreement does not imbue the collective agreement with contractual force by some process of osmosis. There must be something more — a legally recognised mechanism by which there is some adoption of the industrial instrument into the contract [page 273] by the parties. That mechanism may be the adoption of the industrial instrument as an express term: see 5.97–5.99. Alternatively, there may be an implied term that an employee’s contractual terms of employment are contained in the collective agreement: see 5.100–5.103. In some cases an enterprise agreement may be a contract between the union and the employer: see 5.104–5.111.

As Gray J has observed, ‘one of the difficulties, which the law of contract has always faced, is the relationship between collective industrial agreements and individual contracts of employment’.370 It is suggested that the difficulty partly arises due to the failure of contract law to pay sufficient regard to two of the distinguishing features of employment contracts: that employment usually occurs in a collective setting in which many employees enjoy almost identical benefits and are the subject of almost identical obligations; and the benefits enjoyed by employees are often the result of collective negotiations by unions.

Industrial instruments as express terms in employment contracts 5.96 The provisions in an industrial instrument may be contractually enforceable between the employer and the employee as the result of the operation of an express term of the contract. Such instruments may be incorporated by signature, by a course of dealing, by notice or by reference into a contract.

Industrial instruments incorporated by reference 5.97 The most common means by which industrial instruments or statutes are given contractual force is through incorporation by reference.371 Such instruments may be incorporated by reference notwithstanding the fact that the instrument is not itself enforceable as an award or enterprise agreement by the employee.372 A document that does not otherwise apply to an employee, such as an inapplicable statute, may be incorporated by reference.373 Whether the parties intend for the document to be incorporated by reference depends on the objective intention of the parties, ascertained in the ordinary manner.374 As a [page 274] matter of practice, parties are unlikely to intend to give contractual force to an

industrial instrument that applies to the employment by virtue of the statutory force of the Fair Work Act.375 5.98 When an industrial instrument is expressly incorporated by reference into the contract then the employee may have two concurrent rights: a statutory right that can be enforced by the statutory mechanism and a contractual right that can be enforced using the ordinary remedies for breach of contract. Any statutory procedural limitations that apply to the enforcement of the statutory right will not apply to the enforcement of the contractual right, unless the statute evinces a contrary intention. In True v Amalgamated Collieries of WA Ltd the employee had orally agreed with his employer to work as a miner at tonnage rates set out in the award. The statute under which the award was made required that actions for breach of the award be commenced within 12 months of any underpayment. The employee sued for breach of contract to recover an underpayment after the expiration of 12 months. The Privy Council advised that it was the statutory right to recover under the award that was subject to the time bar, and not the contractual right.376

Industrial instruments incorporated by notice 5.99 Industrial instruments can be incorporated by notice into the contract. For a document to be incorporated by notice, the employee must have received reasonable notice of its terms, and the parties must have intended the document to have contractual force.377 Statutes and industrial instruments have statutory force. Providing a copy of an industrial instrument to an employee will not, in itself, indicate an intention to be contractually bound by it. There are obligations under most modern awards to ensure employees have access to the award, either by posting it in a prominent place or by providing a copy electronically.378 Under s 180 of the Fair Work Act the employer must take reasonable steps to provide employees with a copy of a proposed enterprise agreement prior to voting on it. Providing the award or agreement to the employee in compliance with such obligations [page 275]

is unlikely to indicate that the document is being provided as an offer to form or vary a contract. Where the instrument does not have statutory force, its provision to an employee may take on a different meaning. Posting an unregistered collective agreement on a notice board, for example, may indicate an intention to be bound by its terms and operate to incorporate the terms by notice.379

Industrial instruments as implied terms in employment contracts 5.100 Numerous attempts have been made to establish that there is a term implied in fact, by law, or by custom that an employee is entitled to the benefits of an industrial instrument. Although conceptually possible, almost all of these attempts have failed. There is, as noted above, no term implied in law that an employee is contractually entitled to the benefits of an industrial instrument.380

Industrial instruments as terms implied in fact 5.101 It is conceivable, though unlikely, that a term may be implied in fact to the effect that the statutory benefits granted by the Fair Work Act or an industrial instrument will be contractually enforceable. Whether a term is implied in fact is a question of fact in each case. The exacting tests governing the implication of such terms impose formidable hurdles that will rarely be overcome.381 The problems with the implication in fact of such a term are manifold. First, the term must be reasonable and is less likely to be found to be reasonable if it only grants rights to one party over another.382 Awards and collective agreements usually only grant rights to employees and not to employers. Second, the term must be necessary. Contracts of employment can and do operate effectively without the implication of the term importing conditions from an award or collective agreement. There are very few terms that need to be agreed between the parties before an employment contract is formed. The only necessary terms are terms identifying the contracting parties, an agreement to serve

[page 276] and an agreement about remuneration,383 though even in the absence of agreement on wages there is a statutory framework that sets a wage for most employees in Australia. The NES, though bare minima, govern conditions relating to weekly hours, parental leave, annual leave, personal leave and carer’s leave, community service leave, long service leave, public holidays, notice and redundancy pay.384 It is difficult to see how it can be said that when a contract is silent on such issues it is necessary to imply terms into an employment contract for an employee entitled to the benefits of these terms.385

Industrial instruments as terms implied by custom 5.102 It is possible to prove a term is implied by custom to the effect that an employee’s contractual terms of employment are those contained in an industrial instrument. There are, however, considerable difficulties in proving such a custom. First, the employee must prove that the overwhelming majority of those in the relevant trade or industry apply the custom and it is insufficient to prove that the particular employer always adopted the custom: see 5.69. Second, the custom must have a binding effect. The regular application of the terms of a collective agreement to employees as the result of moral persuasion, or in the pursuit of an expedient policy, does not mean that the employees are contractually bound to the benefits of the collective agreement.386 If the employer is compelled by statute to provide the benefits of a collective agreement (as it is in the case of awards and enterprise agreements approved under the Fair Work Act), then there is no need to contract on the basis of the custom because the instrument will operate of its own force.387 [page 277] 5.103 It is suggested that this is an important difference between the United Kingdom and Australia. In both countries collectively negotiated conditions

played a powerful role in establishing the de facto terms of employment. However, in the United Kingdom collective agreements have historically been contractually unenforceable in their own right or enforceable pursuant to the terms of a statute. In contrast, in Australia awards and collective agreements have historically been enforceable pursuant to various industrial statutes. There are 25,000 enterprise agreements in Australia covering around 2.5 million employees, just over 25% of all employees. About 2 million employees are covered by agreements in which a union is also covered by the agreement and the pay rates for about 43% of Australian employees are established in collective agreements.388 In the United Kingdom, there was an attractive argument that the de facto terms set in unenforceable collective agreements should be given de jure force. The notion of a crystallised custom, though flawed, arose to address this issue: see 5.75. In Australia the argument was never as attractive, as the de facto terms in collective agreements and awards were largely able to be enjoyed by employees through a statutory mechanism of enforcement. Notwithstanding the considerable difficulties identified above, it is possible that in some contracts there is a term implied by custom that the employee’s contractual terms of employment are contained in a collective agreement. For many years in the County of Yancowinna the collective agreement reached between the employers and the Barrier Industrial Council became a term implied by custom into the contracts of many employees in Broken Hill.389

Collective agreements as union–employer contracts 5.104 This section deals with two questions: when is a collective agreement enforceable as a contract between the employer and the union, and how can an employee enjoy the benefits of such a contract? Whether a collective agreement is enforceable as a contract depends on the ordinary principles of contract law.390 It has sometimes been [page 278]

suggested that collective agreements are usually not contracts between the union and the employer.391 However, this is more of an observation on the difficulties of meeting the tests for establishing that a contract has been formed, rather than a presumption to be adopted about the enforceability of such agreements. The collective agreement will be enforceable as a contract so long as the requirements for the formation of a contract discussed in Chapter 3 are met.392 There are three doctrines that are of particular significance in this context: whether the agreement is supported by consideration (see 5.105), whether the parties intend their agreement to create legal relations (see 5.106), and the operation of the doctrine of privity (see 5.109). If the collective agreement is a union–employer contract, then a further issue arises concerning the remedies available to the union (or possibly employees covered by the agreement) for breach of the agreement: see 5.112.

Consideration to support the collective agreement 5.105 To be enforceable as a contract the collective agreement must be supported by consideration or be a contract made under seal, such as a deed.393 Increasingly, unions and employers are recording their collective agreements in a deed which avoids this problem, although there are consequential problems created when enforcing a deed as discussed in 5.113. Where the agreement is not made in a deed, then consideration must move from the union and the consideration must be certain and lawful. Many issues concerning consideration and collective agreements were discussed in Ryan v Textile Clothing and Footwear Union of Australia. In that case the employer and the union reached an agreement for increased redundancy payments. As an offset, the employees agreed to allow the introduction of electronic funds transfers and a new process for the selection of redundant employees. There was no [page 279] consideration moving from the union about either of these matters; it was the

employees who were providing the consideration by agreeing to be paid by EFT instead of cash and abandoning the old procedure governing redundancies.394 It was also argued that the union provided consideration by forbearing from prosecuting its claim for improved benefits in an Industrial Commission, or implicitly promised not to engage in industrial action. The Victorian Court of Appeal rejected these arguments, partly because the consideration said to have been provided was never sought by the employer, and there was no agreement to forbear from the actions taken. It is suggested that the approach taken in Ryan is too narrow. As cases like Lee v GEC illustrate, the abandonment of an argument for greater redundancy payments may be sufficient consideration.395 There is a line of recent authorities, not referred to in Ryan, where courts have taken a more liberal approach to inferring consideration in long-term contractual relationships where the employer has gained a practical benefit as the result of an agreement.396 Reaching a collective agreement delivers a range of practical benefits to the employer, such as a more stable and contented workforce not riven by industrial strife. The employer thereby avoids costs associated with engaging new employees or costs inevitably arising from industrial action.397 Industrial peace also allows the employer to plan more securely for the future.398

Intention to create a contract 5.106 To be enforceable as a contract the parties must have intended that the collective agreement be legally binding.399 Recording the agreement as a deed is a clear indication of the intention of the parties [page 280] that the agreement be legally binding.400 There is authority to support the view that there is a difference between intending the agreement to create a contract and intending to have a legal effect under the Fair Work Act.401 If the parties plan to seek approval of their collective agreement under the Fair Work Act, and do not intend for it to have any other effect outside of that

Act, then it tends to suggest that they did not intend their agreement to create a contract between them.402 The failure to seek approval of the agreement under the Fair Work Act may be evidence that the parties did not intend the agreement to be legally binding.403 5.107 The difficulties in proving that the parties to a collective agreement evince an intention to contract are illustrated in Ryan v Textile Clothing and Footwear Union of Australia. In that matter the employer made eight employees redundant. There were meetings of the consultative committee. The unions demanded a redundancy agreement to deal with future redundancies. The company demanded offsets. The company made two offers of increased redundancy entitlements. Each was rejected by a mass meeting of employees. The company made a further offer, subject to certain offsets. It was put to a stop work meeting, and the employees agreed. Representatives of the company and each of the four unions then signed the agreements. The Victorian Court of Appeal determined that the unions and the employer did not intend for their unregistered agreement be legally binding. There was no consideration provided by the union: Because the union gave no consideration for the promise of the employer, the parties did not make a bargain of the kind that could be enforced in a court and in my view their conduct is to be taken as demonstrating that they did not intend to do so.404

By way of comment, it is suggested that the lack of consideration must have been a weighty factor in this case because the court’s conclusion would otherwise be, with respect, somewhat perverse. A multi-million dollar agreement about a matter crucial to the financial security of hundreds of employees would ordinarily be enforceable and would [page 281] usually attract the presumption of enforceability of agreements made in the context of business dealings.405 One might ask: what is the business of unions if collective agreements are not part of it? The conclusion that the agreement was an ‘unsolicited act of generosity’406 seems to fly in the face of industrial reality and belies its formation. One might ask: was the process of offer,

counter-offer, acceptance, mass meetings to support or reject and informing the employer that proposals were unacceptable an elaborate charade? Ultimately, so far as it concerns the intention to contract, the decision in Ryan v Textile Clothing and Footwear Union of Australia turns on its own facts, as all decisions about intention to contract, drawing on the circumstances surrounding the particular agreement, are fact specific.407

Intention to contract in the United Kingdom 5.108 Authorities on this issue in the United Kingdom need to be considered with some caution. In the United Kingdom the position until 1971 was that courts presumed that collective agreements were not intended to be legally binding. That position was reversed by legislative change in 1971 which created a presumption that, unless the agreement stated to the contrary, the agreement was intended to be legally enforceable. During the early 1970s it was common to include what were called TINALEA clauses in collective agreements, an acronym that means ‘this is not a legally enforceable agreement’. This was done to avoid the operation of the Industrial Relations Act 1971 (UK). In 1974 that presumption was once more reversed. The current position, contained in s 179 of the Trade Union and Labour Relations Act 1992 (UK), is that a collective agreement is not legally enforceable unless it states that the parties intend it to be enforceable.408 [page 282]

Contract for the benefit of a third party 5.109 If the collective agreement between the union and the employer is a contract, then the next issue is whether the employee can enforce that contract. Ordinarily the doctrine of privity (that contracts are only contractually enforceable by the parties to the contract)409 will preclude direct enforcement of the union–employer contract by the employee as a nonparty. Although there is support in some of the judgements in the High Court decision in Trident General Insurance Co Ltd v McNiece Bros Pty Ltd for the proposition that a contract for the benefit of a third party may be enforced by that third party,410 the balance of authority weighs against such an

approach.411

Unions as agents negotiating collective agreements 5.110 If the collective agreement is a contract, then it is either a contract between the employer and the union, or a contract between the employer and employees. A union which has negotiated a contract may have done so as an agent for its members rather than as a party principal to the agreement. The rationale and mechanics of such an agency arrangement are as follows. The doctrine of privity provides that contracts are only contractually enforceable by the parties to the contract and a contract does not directly confer contractual rights on persons who are not party to the contract.412 Collective agreements are usually made between the employer and the union. Whether the employee is a party to the agreement depends on the terms of the agreement. If the employee is not specifically named as a party in the agreement, then the employee cannot enforce the agreement as a contract. An agent may enter into a contract on behalf of a principal. The agreement made by an authorised agent binds a principal. If the union is acting as an agent for the employee in [page 283] the negotiation, then the employee is a party to the agreement and the problems associated with a lack of privity are avoided. 5.111 Whether a union enters into a contract as agent for its members is a question of fact.413 There is some authority to support the view that ordinarily a union is not an agent for its members in the negotiation of terms of employment,414 although there is no impediment to such an agency being created.415 There are a series of conceptual problems with the notion that a union ordinarily acts as agent for its members in negotiating an agreement. First, in any principal–agent relationship there must be an identifiable principal. A union cannot act as agent for future, unidentified members. Collective agreements usually evince an intention ‘to benefit future as well as present members of the union, and the future members cannot be identified as

principals when the collective agreement is made’.416 Second, most collective agreements are passed by a majority vote of members who attend on the day of voting, rather than a unanimous vote of all members. It has been suggested that the minority of members who vote against the agreement, or are absent or abstain, may not be authorising the actions of the union.417 There is an alternative view on this issue. Union membership is not compulsory. Members appreciate that by joining a union they will be bound by the actions of authorised officers and the decisions of the majority of voters, just as citizens of the state are bound by the constitutionally valid actions of officers of state and the decision of voters in elections.418 [page 284]

Remedies for breaches of collective agreements 5.112 If the collective agreement between the union and the employer is a contract, then what are the remedies available for its breach? Some clauses of collective agreements will confer benefits meant to be enjoyed by the union, such as a clause permitting payroll deductions and the right to run trade union training courses. A breach of such clauses will sound in substantial (as opposed to nominal) damages recoverable by the union. Many terms in collective agreements, such as the enhanced redundancy entitlements in Ryan v TCFUA, confer benefits on employees who are not party to the contract. There appears to be no loss to the union when the employer does not pay the enhanced entitlements. There is some authority to support the view that the union may be able to recover substantial damages if there is a failure to provide to the employees the benefits specified in the agreement.419 An alternative course is for the union to seek an order for specific performance of the promise to provide such benefits. Damages would clearly be an inadequate remedy for the union.420 However, to obtain such equitable relief the union would need to show that it provided consideration to the employer. Equity will not assist a volunteer and so specific performance will not be ordered of a deed that is not supported by consideration.421

Some possible solutions 5.113 Whether a collective agreement is a contract depends on the ordinary principles of contract law.422 However, the application of the principles governing consideration, privity, the intention to create legal relations and remedies will usually render unregistered collective agreements unenforceable as contracts. Other than the obvious solution of obtaining approval of the agreement under the Fair Work Act, there [page 285] are at least two viable options available for parties who desire to have a collective agreement that creates enforceable benefits that are enjoyed by employees. First, the parties can record their agreement in a deed, which will largely avoid the problems associated with consideration and the intention to create legal relations. In terms of remedies, the parties can expressly specify that the parties intend that the breach of particular clauses (such as the non-payment of a redundancy payment to employees) should be enforced by an order for specific performance. The remedial choice or preference made by the parties does not bind the court, but it will be a discretionary consideration weighing in favour of equitable relief.423 To avoid other problems associated with equitable relief, the parties may identify in the deed the substantial consideration provided by the union, perhaps by reference to the practical benefits acquired by the employer through the agreement.424 An alternative to this approach is to agree with the employer that all new employees will be employed on conditions determined by the deed, with the provisions concerning enforcement discussed above. Second, the union and employer can agree that the employer will establish a trust. The trust property consists of the promise to provide the employees certain benefits. The employer is the trustee, or the union and employer may both be trustees. The employees are the beneficiaries. The employees as beneficiaries can enforce the trust.425 There will be fewer hurdles to obtaining equitable relief as the enforcement of the trust will arise in the exclusive and not the auxiliary jurisdiction of equity.

_________________________ 1.

It is conceivable, but very unlikely, that an entire agreement clause could exclude even terms implied in law: see 5.20.

2.

For example, it is unclear whether the duty to cooperate arises from a term implied in law, or a rule of construction, or a rule of law: Byrne v Australian Airlines Limited (1995) 185 CLR 410 at 449–50; 131 ALR 422 at 449–50; Southern Foundries (1926) Ltd v Shirlaw [1940] AC 701 at 717; 2 All ER 445 at 454–5.

3.

As to the meaning of ‘terms and conditions’, see Universe Tankships Inc of Monrovia v International Transport Workers Federation [1983] 1 AC 366 at 386; [1982] 2 All ER 67 at 76 and Hadmor Productions Ltd v Hamilton [1982] 2 WLR 322 at 331; [1982] 1 All ER 1042. As to ‘conditions of employment’ see Max Cooper & Sons Pty Ltd v Sydney City Council (1980) 29 ALR 77 and T C Whittle Pty Ltd v T & G Mutual Life Society Ltd (1977) 18 ALR 431.

4.

See 5.6.

5.

See 10.14.

6.

Whether a term created by statute will prevail over, or is able to be excluded by, express terms will depend on the terms of the statute; see 5.83.

7.

See 5.71; Evans, Deakin and Co Ltd v Allen [1946] St R Qd 187 at 201 and Rosenhain v Commonwealth Bank of Australia (1922) 31 CLR 46 at 53.

8.

Breen v Williams (1986) 186 CLR 71 at 90–1; 138 ALR 259 at 271–2; Hawkins v Clayton (1988) 164 CLR 539 at 570; 78 ALR 69 at 90–1 and Byrne v Australian Airlines Limited, note 2 above, CLR at 422; ALR at 427–8.

9.

Reigate v Union Manufacturing Co (Ramsbottom) Ltd [1918] 1 KB 592 at 605 and G Tolhurst, ‘Contractual Confusion and Industrial Illusion’ (1992) 66 ALJ 705 at 711.

10.

Employment Rights Act 1996 (UK) ss 1–4.

11.

Gascol Conversions Ltd v Mercer [1974] ICR 420; System Floors (UK) Ltd v Daniel [1982] ICR 54 at 58 and Roberston v British Gas Corporation [1983] ICR 351 at 355. See I Smith and A Baker, Smith and Wood’s Employment Law, 10th ed, Oxford University Press, Oxford, 2010, pp 78–87.

12.

For example, cl 5 of the Building and Construction General On-site Award 2010 states: ‘The employer must ensure that copies of this award and the NES are available to all employees to whom they apply either on a noticeboard which is conveniently located at or near the workplace or through electronic means …’.

13.

Fair Work Act s 535 and the Fair Work Regulations 2009 (Cth) regs 3.31–3.44.

14.

Scally v Southern Health and Social Services Board [1992] 1 AC 294 at 307; [1992] 4 All ER 563 at 571–2, referred to approvingly in Byrne v Australian Airlines Limited, note 2 above, CLR at 451–2; ALR at 451–2. See also Cornwell v the Commonwealth of Australia [2005] ACTSC 14 (aff’d on other grounds [2006] ACTCA 7 and (2007) 229 CLR 519; 234 ALR 148).

15.

See, for example, O’Laoire v Jackel International Ltd (No 2) [1991] ICR 718 at 729; Roberts v Hong Kong Bank of Australia Ltd (1993) 35 AILR 213 and Quinn v Jack Chia (Australia) Ltd [1992] 1 VR 567 at 574.

16.

On misleading and deceptive conduct see 4.32–4.41. On deceit see 7.19.

17.

Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 61; 55 ALR

417 at 427; Saad v TWT Limited [1998] NSWCA 199 at 8–9; Goldman Sachs JB Were Services Pty Ltd v Nikolich (2007) 163 FCR 62; [2007] FCAFC 120 at [21]–[23]. 18.

See 3.5.

19.

JJ Savage & Sons Pty Ltd v Blakney (1970) 119 CLR 435 at 441 and Ellul v Oakes (1972) 3 SASR 377 at 382.

20.

Heilbut, Symons & Co v Buckleton [1913] AC 30 at 50–1.

21.

For example, Balston Ltd v Headline Filters Ltd (No 2) [1990] FSR 385 at 396 (telling a friendly curious employer about future plans); Cantor Fitzgerald International v Callaghan [1999] ICR 639 at 646–7 (assuring employees they were not liable for certain tax on a loan from the employer was a binding term).

22.

Goldman Sachs JB Were Services Pty Ltd v Nikolich, note 17 above, at [21]–[42], [298], [305]– [314] and [329].

23.

See 3.9–3.11.

24.

Saad v TWT Limited, note 17 above. See also Higgins v Prospect County Council (1983) 3 IR 471 and Gallagher v Post Office [1970] 3 All ER 712 at 718–9.

25.

See K Lewison and D Hughes, The Interpretation of Contracts in Australia, Lawbook Co, Sydney, 2012.

26.

Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 347–8; 41 ALR 367 at 371.

27.

Max Cooper & Sons Pty Ltd v Sydney City Council, note 3 above, at 85 (construction of a technical expression — ‘pay loadings’ is a question of fact susceptible of proof through expert evidence).

28.

J Carter et al, Contract Law in Australia, 5th ed, LexisNexis Butterworths, Australia, 2007, p 92 and E Peden and J Carter, ‘Entire Agreement — and Similar — Clauses’ (2006) 22 JCL 1 at 2.

29.

Inglis v John Buttery & Co (1878) 3 App Cas 552 and Gordon v Macgregor (1909) 8 CLR 316 at 323.

30.

Western Export Services Inc v Jireh International Pty Ltd [2011] HCA 45 at [4]–[5] and Codelfa Construction Pty Ltd v State Rail Authority (NSW), note 26 above, CLR at 352; ALR at 374–5.

31.

See K Lewison and D Hughes, The Interpretation of Contracts in Australia, note 25 above, pp 70–1 and 81.

32.

Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451; 208 ALR 213 at [22]; Zhu v Treasurer of New South Wales (2004) 218 CLR 530; 211 ALR 159 at [82]; International Air Transport Association v Ansett Australian Holdings Ltd (2008) 234 CLR 151; 242 ALR 47 at [8]; Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 240 CLR 45; 186 ALR 289 at [39], based in turn on Codelfa Construction Pty Ltd v State Rail Authority (NSW), note 26 above, CLR at 350 and 352; ALR at 373–5 and Reardon Smith Line v Hansen-Tangen [1976] 3 All ER 570; [1976] 1 WLR 989 at 996–7. In the United Kingdom there has been a marked shift in recent years towards a contextualist, as opposed to a literalist, construction of contracts: Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 at 912–3; 1 All ER 98 at 114–5.

33.

J Carter et al, Contract Law in Australia, note 28 above, p 92; Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181; 185 ALR 152 at [11] referring to Lord Hoffman’s speech in Investors Compensation Scheme Ltd v West Bromwich Building Society, note 32 above, WLR

at 912; All ER at 114 (the interpretation involves ‘the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract’). 34.

See the cases at note 32 and Western Export Services Inc v Jireh International Pty Ltd, note 30 above, at [4]–[5].

35.

Reardon Smith Line v Hansen-Tangen, note 32 above, WLR at 997 per Lord Wilberforce.

36.

QBE Insurance Australia Ltd v Vasic [2010] NSWCA 166 at [22] and AMEC Engineering Pty Ltd v Shanks (2001) 128 IR 116; [2001] SASC 257 at [31]–[35].

37.

Reardon Smith Line v Hansen-Tangen, note 32 above, WLR at 996; Codelfa Construction Pty Ltd v State Rail Authority (NSW), note 26 above, CLR at 350; ALR at 373–4; Pacific Carriers Ltd v BNP Paribas, note 32 above, at [22]. As to the document’s genesis, if the contract has a particular history then that history is relevant: International Air Transport Association v Ansett Australian Holdings Ltd, note 32 above, at [8] and Singh v Commonwealth (2004) 222 CLR 322; 209 ALR 355 at [8]–[23].

38.

The knowledge may be constructive, as where a notorious custom operates in the industry: Codelfa Construction Pty Ltd v State Rail Authority (NSW), note 26 above, CLR at 352; ALR at 374–5 and Reardon Smith Line v Hansen-Tangen, note 32 above, WLR at 996.

39.

QBE Insurance Australia Ltd v Vasic, note 36 above, at [22] per Allsop P, Giles and Macfarlan JJA agreeing; Codelfa Construction Pty Ltd v State Rail Authority (NSW), note 26 above, CLR at 352; ALR at 374–5; DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 at 429 and Reardon Smith Line v Hansen-Tangen, note 32 above, WLR at 996–7.

40.

Maggbury Pty Ltd v Hafele Australia Pty Ltd, note 33 above, at [11]. See J Carter, ‘Commercial Construction and Contract Doctrine’ (2009) 25 JCL 83 at 85–6.

41.

Concut Pty Ltd v Worrell (2000) 176 ALR 693; 103 IR 160 at [17]; query whether it includes the prevailing understanding of the common law, Devefi Pty Ltd v Mateffy Pearl Nagy Pty Ltd (1993) 113 ALR 225 at 241.

42.

Amcor Ltd v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241; 214 ALR 56; 138 IR 286 at [41]–[57] per Gummow, Hayne and Heydon JJ; see also [2], [13], [30], [64]– [66] and [96]; Australian Workers’ Union v BHP Iron-Ore Pty Ltd (2000) 106 FCR 482; 102 IR 410; [2001] FCA 3 at [252]; Shop Distributive and Allied Employees’ Association v Woolworths SA Pty Ltd [2011] FCAFC 67 at [14]–[18] and Akmeemana v Murray (2009) 190 IR 66; [2009] NSWSC 979 at [35]–[41].

43.

New South Wales Cancer Council v Sarfaty (1992) 28 NSWLR 68 at 76–7 per Gleeson CJ and Handley JA; Gordon v Macgregor, note 29 above, at 323; Hughes v NM Superannuation Pty Ltd (1993) 29 NSWLR 653 at 660 and Air Great Lakes Pty Ltd v K S Easter Pty Ltd (1985) 2 NSWLR 309 at 338.

44.

Republic of Nauru v Reid (VSCA, Brooking, Smith and Ashley JJ, BC9507261, 23 October 1995, unreported) at 26, per Ashley J, Smith J agreeing; New South Wales Cancer Council v Sarfaty, note 43 above, at 76–7 and Bruce v AWB Pty Ltd (2000) 100 IR 129; [2000] FCA 594 at [8]–[9].

45.

State Rail Authority of New South Wales v Heath Outdoor Pty Ltd (1986) 7 NSWLR 170 at 191– 2; Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd [1985] 2 NSWLR 309 at 337; New South Wales Cancer Council v Sarfaty, note 43 above, at 76–7, an approach consistent with Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471; 211 ALR 101 at [36].

See also Keays v J P Morgan Administrative Services Australia Limited [2011] FCA 358 at [49] (job description formed an express term that supplemented the written terms) and Bruce v AWB Pty Ltd, note 44 above, at [8]–[9]. 46.

Republic of Nauru v Reid, note 44 above, at 27; Gillespie Brothers & Co v Cheney, Eggar & Co [1896] 2 QB 59 at 62; J Evans & Son (Portsmouth) Ltd v Andrea Merzario Ltd [1976] 2 All ER 930 at 935 and E Peden and J Carter, note 28 above, at 3–4.

47.

As to the express intention, see the discussion of entire agreement clauses in 5.20.

48.

It appears that the conduct referred to was conduct after the formation of the contract: see 5.23.

49.

Carmichael v National Power Plc [1999] 1 WLR 2042 at 2049; 4 All ER 897 at 903 per Lord Hoffmann, Lords Goff and Jauncey agreeing.

50.

Air Great Lakes Pty Ltd v K S Easter Pty Ltd, note 43 above, at 336–7.

51.

Codelfa Construction Pty Ltd v State Rail Authority of New South Wales, note 26 above, CLR at 352–3; ALR at 375.

52.

New South Wales Cancer Council v Sarfaty, note 43 above, at 75 referring to G Smith, Public Employment Law, Butterworths, Sydney, 1987, p 147.

53.

New South Wales Cancer Council v Sarfaty, note 43 above, at 76 and 77 per Gleeson CJ and Handley JA.

54.

Equuscorp Pty Ltd v Glengallan Investments Pty Ltd, note 45 above, at [33]. The vitiating factors are discussed in 4.2–4.19.

55.

Equuscorp Pty Ltd v Glengallan Investments Pty Ltd, note 45 above, at [46].

56.

Sharrment Pty Ltd v Official Trustee in Bankruptcy (1988) 18 FCR 449 at 454; 82 ALR 530 at 537 per Lockhart J. Shams are discussed in 2.25.

57.

See Republic of Nauru v Reid, note 44 above discussed in 5.29; Hawker Siddeley Power Engineering Ltd v Rump [1979] IRLR 425 (employee told to sign a document empowering the employer to transfer the employee, but told he would not be transferred) and Kilburn v Enzed Precision Products (Aust) Pty Ltd (1988) 4 VIR 31 at 33 (parties signed and backdated new terms to minimise tax and were not intending to vary their agreement).

58.

Equuscorp Pty Ltd v Glengallan Investments Pty Ltd, note 45 above, at [36]; Gordon v Macgregor, note 29 above, at 319–20 and 322–3 and E Peden and J Carter, note 28 above, at 4– 5.

59.

Equuscorp Pty Ltd v Glengallan Investments Pty Ltd, note 45 above, at [36] per Gleeson CJ, McHugh, Kirby, Hayne and Callinan JJ.

60.

Fisher v Edith Cowan University (No 2) (1997) 72 IR 464 at 471–2; Department of Justice v Lunn (2006) 158 IR 410 at [23]–[43] and Marsh v Macquarie University (2005) 147 IR 401. See also D’Lima v Princess Margaret Hospital (1995) 64 IR 19 (employee signed 13 successive contracts for a fixed term of about one month, each contract stating that her services will be terminated at the conclusion of the contract) and Principal of Auckland College of Education v Hagg [1997] 2 NZLR 537 at 556. Representations by the employer may also give rise to an estoppel or a cause of action under ACL s 18; see 4.32.

61.

Hoyt’s Pty Ltd v Spencer (1919) 27 CLR 133 at 146 and Steele v SNC Inc (1992) 41 CCEL 257 (alleged promise of five-year fixed term engagement was inconsistent with main contract that provided for a fixed term of two years).

62.

Maybury v Atlantic Union Oil Co Ltd (1953) 89 CLR 507 at 517 per Dixon CJ, Fullagar and

Taylor JJ. 63.

Knevitt v The Commonwealth of Australia [2009] NSWSC 1341 at [36]–[40].

64.

Australian Guarantee Corporation Ltd v Balding (1930) 43 CLR 140 at 151.

65.

See, for example, Tayside Regional Council v McIntosh [1982] IRLR 272 (the oral term that a driver’s licence was essential was not superseded by later written terms) and National Gallery of Australia v Douglas [1999] ACTSC 79.

66.

See generally E Peden and J Carter, note 28 above and C Mitchell, ‘Entire Agreement Clauses: Contracting out of Contextualism’ (2006) 22 JCL 222 at 225–6.

67.

White v Bristol Rugby Ltd [2002] IRLR 204 at [24]; Inntrepreneur Pub Co (GL) v East Crown Ltd [2000] All ER (D) 1100; [2000] 2 Lloyd’s Rep 611 at 614 and Network Ten Pty Ltd v Rowe (2005) 149 IR 262; [2005] NSWSC 1356 at [35]–[45] (aff’d (2006) 149 IR 280; [2006] NSWCA 1).

68.

E Peden and J Carter, note 28 above, at 3.

69.

White v Bristol Rugby Ltd, note 67 above, at [29]; see also RNLI v Bushaway [2005] IRLR 674.

70.

E Peden and J Carter, note 28 above, at 10.

71.

See the cases referred to in C Mitchell, ‘Entire Agreement Clauses: Contracting out of Contextualism’, note 66 above, at 234–5, E Peden and J Carter, note 28 above, at 10. As to estoppel, see the different approaches in Johnson Matthey Ltd v A C Rochester Overseas Corp (1990) 23 NSWLR 190; Whittet v State Bank of New South Wales (1991) 24 NSWLR 146 at 151–5; Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424; [2001] FCA 1833 at [444]–[446] and Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603 at [204]– [214]. As to actions under s 18 of the ACL, see Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 at 38; 110 ALR 608 at 609.

72.

C Mitchell, ‘Entire Agreement Clauses: Contracting out of Contextualism’, note 66 above, at 233–7. See 5.10 for the contextual approach.

73.

Hart v MacDonald (1910) 10 CLR 417 at 427 and 430; Etna v Arif [1999] 2 VR 353 and McAleer v University of Western Australia (No 3) (2008) 171 FCR 499; 176 IR 404; [2008] FCA 1490 at [108]–[114] (terms implied in fact excluded by a code governing dismissal) and McLennan v Surveillance Australia Pty Ltd (2005) 142 FCR 105; 139 IR 209; [2005] FCAFC 46 at [43].

74.

Secured Income Real Estate (Aust) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596 at 606; 26 ALR 567 at 576; Codelfa Construction Pty Ltd v State Rail Authority of New South Wales, note 26 above, CLR at 348–50 and 352–3; ALR at 372–4 and 375–6 and K Lewison and D Hughes, The Interpretation of Contracts in Australia, note 25 above, pp 70–1 and 81.

75.

C Mitchell, ‘Entire Agreement Clauses: Contracting out of Contextualism’, note 66 above, at 232–3; G McMeel, ‘Prior Negotiations and Subsequent Conduct — The Next Step Forward for Contractual Interpretation’ (2003) 119 LQR 272 at 298; D Nicholls, ‘My Kingdom for a Horse: The Meaning of Words’ (2005) 121 LQR 577 and A Kramer, ‘Common Sense Principles of Contract Interpretation (and How We’ve Been Using Them All Along)’ (2003) 23 OJLS 173 at 180.

76.

Codelfa Construction Pty Ltd v State Rail Authority of New South Wales, note 26 above, CLR at 352–4; ALR at 374–6.

77.

Codelfa Construction Pty Ltd v State Rail Authority of New South Wales, note 26 above, CLR at 352–3; ALR at 374–6; Lodge Partners Pty Ltd v Pegum (2009) 255 ALR 516; [2009] FCA 519

at [31]–[32] and Northern Land Council v Hansen [2000] NTCA 1 at [21]. 78.

See 5.13 and 5.24.

79.

See 4.20.

80.

See 5.25.

81.

Secured Income Real Estate (Aust) Ltd v St Martins Investments Pty Ltd, note 74 above, CLR at 606; ALR at 576 and Investors Compensation Scheme Ltd v West Bromwich Building Society, note 32 above, WLR at 912–3; All ER at 114–15.

82.

Reardon Smith Line v Hansen-Tangen, note 32 above, WLR at 996–7.

83.

Narich Pty Ltd v Commissioner of Pay-roll Tax (NSW) [1983] 2 NSWLR 597 at 601 and Gascol Conversions Ltd v Mercer [1974] ICR 420 at 426–7. The same approach is adopted to conduct of the parties subsequent to the making of an industrial instrument: Australian Municipal, Administrative, Clerical and Services Union v Treasurer (Cth) (1998) 82 FCR 175 at 178; Seaman’s Union v Adelaide Steamship Co Ltd (1976) 46 FLR 444; Printing & Kindred Industries Union v Davies Bros Ltd (1986) 18 IR 444 and Hawkins v Commonwealth Bank (1996) 66 IR 322; cf the position in New Zealand, Wholesale Distributors Ltd v Gibbons Holdings Ltd [2008] 1 NZLR 277, noted in A Berg, ‘Richard III in New Zealand’ (2008) 124 LQR 6.

84.

Community and Public Sector Union v Telstra Corp Ltd (2005) 139 IR 141 at 153 and Connelly v Wells (1994) 55 IR 73 at 74.

85.

Raward v Vine Nominees Pty Ltd [2001] QSC 494 at [76].

86.

Walker v Salomon Smith Barney Securities Pty Limited (2003) 140 IR 433; [2003] FCA 1099 at [158]; Gothard v Davey (2010) 80 ACSR 56; [2010] FCA 1163 at [192]; Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61 at [26]–[28]; Howard Smith & Co Ltd v Varawa (1907) 5 CLR 68 at 77 and Barrier Wharfs Ltd v W Scott Fell & Co Ltd (1908) 5 CLR 647 at 668, 669, and 672.

87.

Australian Mutual Provident Society v Chaplin (1978) 18 ALR 385 at 392–3; Narich Pty Ltd v Commissioner of Pay-roll Tax (NSW), note 83 above, at 601 and Cavill Power Products Pty Ltd v Royle (1991) 42 IR 229 at 231.

88.

AG Securities v Vaughan [1990] 1 AC 417 at 469; [1988] 3 All ER 1058 at 1072 per Lord Oliver (‘though subsequent conduct is irrelevant as an aid to construction, it is certainly admissible as evidence on the question of whether the documents were or were not genuine documents giving effect to the parties’ true intentions’) and at 1077; Properties Ltd v Dunsford [2001] 1 WLR 1369 at [44] and Hitch v Stone (Inspector of Taxes) [2001] EWCA Civ 63 at [65].

89.

Such evidence does not go to the meaning of the terms of the contract: see R Derham, ‘Estoppel by Convention — Part 1’ (1997) 71 ALJ 860 at 867–70.

90.

See, for example, Raward v Vine Nominees Pty Ltd, note 85 above, at [76].

91.

As to extrinsic evidence concerning the formation of the contract, see New South Wales Cancer Council v Sarfaty, note 43 above, at 76–7; Damevski v Guidice (2003) 133 FCR 438; 202 ALR 494; 129 IR 53 at [82]–[88] and Hughes v NM Superannuation Pty Ltd, note 43 above, at 660. As to extrinsic evidence concerning the intention to create legal relations, see Air Great Lakes Pty Ltd v K S Easter Pty Ltd, note 43 above, at 338. As to extrinsic evidence concerning consideration, there is also an exception of the parol evidence rule. See Pao On v Lau Yiu Long [1980] AC 614 at 631; [1979] All ER 65 at 75. As to extrinsic evidence concerning vitiating factors, see Equuscorp Pty Ltd v Glengallan Investments Pty Ltd, note 45 above, at [33].

92.

See 5.53 and BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 284; 16 ALR 363 at 377; Codelfa Construction Pty Ltd v State Rail Authority of New South Wales, note 26 above, CLR at 351–4; ALR at 374–6.

93.

See Arthurson v State of Victoria (2001) 140 IR 188; [2001] VSC 244 at [284]–[296]; Jones v Associated Tunneling Co Ltd [1981] IRLR 477 at 481 and Courtaulds Ltd v Sibson [1988] ICR 451 at 460.

94.

Mears v Safecar Security Ltd [1983] QB 54 at 77; [1982] 2 All ER 865 at 877.

95.

Northern Land Council v Hansen, note 77 above, at [21].

96.

White v Australian and New Zealand Theatres Ltd (1943) 67 CLR 267 at 270–1, 275, 280–1.

97.

Mallinson v Scottish Australian Investment Co Ltd (1920) 28 CLR 66 at 75 and Shogun Finance Ltd v Hudson [2004] 1 AC 919; 1 All ER 215 at [49] (evidence can be led to prove the party was acting as an agent for another).

98.

See 5.6.

99.

See generally K Lewison and D Hughes, The Interpretation of Contracts in Australia, note 25 above, Ch 9.

100. See 5.16. 101. On novation see 6.40; on variation see 6.21; on contractually agreed alterations see 6.6. 102. Pagnan SpA v Tradax Ocean Transportation SA [1987] 3 All ER 565 at 575 and 578. See also Gunton v Richmond-upon-Thames London Borough Council [1981] 1 Ch 448 at 461–2; [1980] 3 All ER 577 at 584 and National Gallery of Australia v Douglas, note 65 above. 103. See Ford Motor Company of Australia Ltd v Arrowcrest Group Pty Ltd [2002] FCA 1156 at [8] and the cases referred to therein and National Gallery Of Australia v Douglas, note 65 above (express clause for 18 months fixed term employment and incorporated term permitting immediate termination). See also Yousif v Commonwealth Bank of Australia (2010) 193 IR 212; [2010] FCAFC 8 at [93]–[100] (construing an ambiguous bridging term and a pellucid term in the incorporated document). 104. See the discussion in G Tolhurst, note 9 above, at 712. 105. Walker v Salomon Smith Barney Securities Pty Limited, note 86 above, at [155]–[169]. 106. Referring here to Hume Steel Ltd v Attorney General (Vic) (1927) 39 CLR 455 at 462–3 and 465; Godecke v Kirwan (1973) 129 CLR 629 at 637; 1 ALR 457 at 462 and GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd (2003) 128 FCR 1; [2003] FCA 50 at [306]. 107. Walker v Citigroup Global Markets Australia Pty Ltd (2006) 233 ALR 687 at [75]–[77] and Gothard v Davey, note 86 above, at [188]. 108. Roe v Naylor (No 1) [1917] 1 KB 712 at 716 per Atkin J; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; 211 ALR 342 at [35]–[53] and Gascol Conversions Limited v Mercer, note 11 above, at 425. 109. See, for example, Goldman Sachs JB Were Services Pty Ltd v Nikolich, note 17 above, at [21], [293] and [300]. 110. Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd, note 108 above, at [35]–[53]; L’Estrange v F Graucob Ltd [1934] 2 KB 394 at 403 per Scrutton LJ (‘when a document containing contractual terms is signed then … the party signing it is bound, and it is wholly immaterial whether he has read the document or not’) and E Peden and J Carter, ‘Incorporation of Terms by Signature:

L’Estrange Rules!’ (2005) 21 JCL 96 at 101–3. 111. See J Spencer, ‘Signature, Consent, and the Rule in L’Estrange v Graucob’ [1973] Camb LJ 104; S Clarke and B Kapnoullas, ‘When is a Signed Document Contractual? Taking the “Fun” out of the “Funfair”’ [2001] QUTLJ 4 and A Mason and S Gageler, ‘The Contract’ in P D Finn (ed), Essays in Contract, Law Book Company, Sydney, 1987, pp 11–2. 112. See 4.2–4.9. 113. As to the contractual nature of the document, see 3.9–3.11, 5.7 and Le Mans Grand Prix Circuits Pty Ltd v Iliadis [1998] 4 VR 661 at 666–8. As to shams, see 2.25 and 5.17. A misleading or deceptive representation, inconsistent with a subsequently executed contract, may give rise to an action under s 18 or s 31 of the ACL: see 4.32. 114. Republic of Nauru v Reid, note 44 above. 115. See 5.16 concerning the relationship between express and oral terms. 116. The Balmain New Ferry Co Ltd v Robertson (1906) 4 CLR 379 at 390 and Goldman Sachs JB Were Services Pty Ltd v Nikolich, note 17 above. 117. The relevant authorities are discussed in 3.9–3.11. 118. Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd, note 108 above, at [40]; Goldman Sachs JB Were Services Pty Ltd v Nikolich, note 17 above, at [23] and Jones v Lee [1980] ICR 310 at 315–6, 318–9 and 321. See 3.5. 119. Goldman Sachs JB Were Services Pty Ltd v Nikolich, note 17 above, at [13]–[42], [292] and Transport Workers’ Union of Australia v K&S Freighters Pty Ltd [2010] FCA 1225 at [60]–[67]. On the distinction between promissory terms and representations, see 5.6. 120. M Clarke, ‘Notice of Contractual Terms’ (1976) 35 Camb LJ 51 at 68–71; J Swanton, ‘Incorporation of Contractual Terms by a Course of Dealing’ (1988) 1 JCL 223 at 240–1. 121. McCreadie v Thomson & McIntyre (Pattern Makers) Ltd [1971] 2 All ER 1135 at 1137; cf Pondcil Pty Ltd v Tropical Reef Shipyard Pty Ltd (1994) ATPR (Digest) 46–134 discussed in S Kapnoullas, ‘Prior Dealings and the ‘Reasonable Objective Expectation’ of Contracting Parties’ (1996) 10 JCL 173 at 175–6. 122. See generally J Swanton, ‘Incorporation of Contractual terms by a Course of Dealing’ (1988) 1 JCL 223 and J Clarke, ‘Incorporating Terms into a Contract by a Course of Dealing’ [1979] JBL 23. See Republic of Nauru v Reid, note 44 above; Reynolds v Southcorp Wines Pty Ltd (2002) 122 FCR 301; (2002) 115 IR 152; [2002] FCA 712 at [56]–[62] and Neale v Atlas Products (Vic) Pty Ltd (1955) 94 CLR 419 at 427–8. 123. J Swanton, note 122 above, at 225. 124. McCutcheon v David MacBrayne Ltd [1964] 1 WLR 125 at 134; 1 All ER 430 at 437 and the cases discussed in J Swanton, note 122 above, at 241 to which may be added Hawkins v Clayton, note 8 above, CLR at 573; ALR at 93 and Re Galaxy Media Pty Ltd (2001) 167 FLR 149; 39 ACSR 483; [2001] NSWSC 917 at [59] (aff’d sub nom Walker v Andrew (2002) 116 IR 380; [2002] NSWCA 214). 125. J Swanton, note 122 above, at 241–2 and J Carter et al, Contract Law in Australia, note 28 above, pp 218–19. 126. Nethermere (St Neots) Ltd v Taverna and Gardiner [1984] ICR 612 at 630 and 634–5. 127. Grundt v Great Boulder Proprietary Gold Mines (1937) 59 CLR 641.

128. Re Galaxy Media Pty Ltd, note 124 above, at [60] (aff’d sub nom Walker v Andrew (2002) 116 IR 380; [2002] NSWCA 214). See also 3.49–3.50. 129. Henry Kendall & Sons v William Lillico & Sons Ltd [1969] 2 AC 31; [1968] 2 All ER 444. 130. Hollier v Rambler Motors (AMC) Ltd [1972] 2 QB 71 at 76; 1 All ER 399 at 402 where there were only three or four dealings; cf GIO General Ltd v Love [2009] NSWCA 269 at [42]; M Clarke, ‘Notice of Contractual Terms’ (1976) 35 Camb LJ 51 at 60 and J Carter et al, Contract Law in Australia, note 28 above, pp 218–19. 131. See 8.26 and 8.31. 132. See C Cameron, ‘Policies That Don’t Bind: The Decision in Akmeemana v Murray’ (2010) 23 AJLL 137 at 140. 133. Thomson v Orica Australia Pty Ltd (2002) 116 IR 186; [2002] FCA 939 at [146]; McDonald v South Australia (2008) 172 IR 256; [2008] SASC 134 at [347] (a point not addressed on appeal (2009) 104 SASR 344; 185 IR 45; [2009] SASC 219). 134. See, for example, Goldman Sachs JB Were Services Pty Ltd v Nikolich, note 17 above, at [23] and [283]. The meaning of ‘external source document’ is discussed in 5.36. 135. Foggo v O’Sullivan Partners (Advisory) Pty Ltd (2011) 206 IR 87; [2011] NSWSC 501 at [119]. 136. Compare with terms incorporated by signature: see 5.28. 137. Compare with terms incorporated by notice: see 5.30. 138. Compare with terms incorporated by a course of dealing: see 5.31. 139. National Coal Board v Galley [1958] 1 All ER 91. 140. Alexander v Standard Telephones & Cables Ltd (No 2) [1991] IRLR 286 at 293. See also Seymour v Stawell Timber Industries Pty Ltd (1985) 9 FCR 24; 70 ALR 391 (document incorporated into the federal award was regulations made by a state government body) and Scally v Southern Health and Social Services Board, note 14 above, where it appears that the documents incorporated were regulations. 141. Marley v Forward Trust Limited [1986] ICR 891; cf Gascol Conversions Ltd v Mercer, note 11 above, at 425. See also W Wedderburn, ‘The Legal Status of Plant Bargains’ (1969) 32 MLR 99. 142. Honeyman v Nhill Hospital [1994] 1 VR 138 at 147 per Ashley J. See also Tucker v Pipeline Authority (1981) 3 IR 120 at 122; Australian Film Commission v Mabey (1985) 6 FCR 107; 59 ALR 25 (incorporation by reference of statutes that did not apply to employment) and Jones v Lee, note 118 above (external source document required that prior to a dismissal by the private sector employer the consent of public sector education authority be obtained). 143. See, for example, Amalgamated Collieries of WA Ltd v True (1938) 59 CLR 417 and True v Amalgamated Collieries of WA Ltd (1940) 62 CLR 451 at 455–6. 144. For example, Gibbons v Associated British Ports [1985] IRLR 376 and Seymour v Stawell Timber Industries Pty Ltd, note 140 above. 145. Young v Canadian Northern Railway Company [1931] AC 83 at 88–9 and Ryan v Textile Clothing and Footwear Union of Australia [1996] 2 VR 235 at 260. 146. See, for example, Reilly v Praxa Ltd [2004] ACTSC 41 at [28]; Reynolds v Southcorp Wines Pty Ltd, note 122 above, at [56] and Whittaker v Unisys Australia Pty Ltd (2010) 26 VR 668; 192 IR 311; [2010] VSC 9 at [133]–[157]. 147. See also terms implied by trade custom and usage at 5.66 and terms incorporated by a course of

conduct in 5.31. 148. See the cases and studies referred to in S Deakin and G Morris, Labour Law, 5th ed, Hart Publishing, London, 2009, pp 235–6. 149. Australian Workers’ Union v BHP Iron-Ore Pty Ltd, note 42 above, at [252]. See also Johnson v Unisys Ltd [2003] 1 AC 518; [2001] 2 All ER 801 at [62]–[67]. 150. See, for example, BHP Iron Ore Pty Ltd v Australian Workers’ Union (2000) 102 FCR 97; 171 ALR 680; 97 IR 266 and Alexander v Standard Telephones & Cables Ltd (No 2), note 140 above, at 292. 151. Alexander v Standard Telephones & Cables Ltd (No 2), note 140 above, at 292, endorsed by the majority of the High Court in Byrne v Australian Airlines Limited, note 2 above, CLR at 431; ALR at 435 and Yousif v Commonwealth Bank of Australia, note 103 above, at [93]. 152. See 3.5. 153. Yousif v Commonwealth Bank of Australia, note 103 above, at [95]–[98]. The common law of some US states require that such disclaimers be clear and conspicuous to be effective: see the cases reviewed in Anderson v Douglas & Lomason Company 540 NW 2d 277 (1995) at 287–8. There has been little consideration in Australia of whether such clauses might qualify as exclusion clauses and thereby attract the special common law principles applicable to such clauses. See J Carter et al, Contract Law in Australia, note 28 above, pp 272–90. 154. Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193; [2000] FCA 889 (term stated ‘you agree to abide by all Company Policies and Practices currently in place’); Robertson v British Gas Corporation, note 11 above (term stated ‘incentive bonus scheme conditions will apply’); Qantas Airways Ltd v Christie (1998) 193 CLR 280; 152 ALR 365 at [23], [65] and [156] (term stated that the employment conditions were ‘to be read in conjunction with and supplementary to the terms of any enactment industrial instrument or award covering [Mr Christie’s] employment’); Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots [1991] 1 VR 637 at 678 (term stated ‘Employment will be in the terms and under the conditions of the airlines Pilot Agreement 1963’); Seymour v Stawell Timber Industries Pty Ltd, note 140 above (the incorporated document ‘shall apply‘ to the employees); Moama Bowling Club Limited v Armstrong (1995) 64 IR 238 (term stated ‘this agreement shall be deemed to incorporate the whole of the provisions of the award’); Anderson v Pringle of Scotland Ltd [1998] IRLR 64 (the terms were ‘in accordance with and subject to’ the provisions of the collective agreement); Camden Exhibition & Display Ltd v Lynott [1966] 1 QB 555; [1965] 3 All ER 28 (terms were ‘in accordance with’) and Bainbridge v Circuit Foil (UK) Ltd [1997] ICR 541 (term stated ‘you are covered by company’s sick pay scheme’). 155. BHP Iron Ore Pty Ltd v Australian Workers’ Union, note 42 above (term stated ‘in general, the terms and conditions of employment are as prescribed’ in the award and the enterprise bargain); Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Mechanical Engineering Services Pty Ltd [2007] FCA 1736 at [15] (the award will govern your employment); Yousif v Commonwealth Bank of Australia, note 103 above, at [93] (term stated ‘you are required to comply with all Bank policies and procedures’ and the policies stated ‘this manual … does not form any part of the employee’s contract of employment’); Goldman Sachs JB Were Services Pty Ltd v Nikolich, note 17 above, at [120]–[127] per Marshall J, and at first instance [2006] FCA 784 at [213]–[249] (‘from time to time the Company has issued and will in the future issue office memoranda and instruments with which it will expect you to comply’). Jessup J reached the opposite conclusion and found (as did Black CJ) that parts of the external source document were incorporated by notice: see [281]–[288]), Burgess v Mount Thorley Operations Pty Ltd (2003) 132 IR 400 at 426–7 (term stated the classification of employment

was ‘in accordance with the award’); McDonald v Parnell Laboratories Ltd (2007) 168 IR 375; [2007] FCA 1903 at [64]–[73] (term stated the staff guidelines ‘govern’ the terms of the contract); Fardell v Coates Hire Operations Ltd (2010) 201 IR 64; [2010] NSWSC 346 at [104]; Stewart v Graig Shipping Limited [1979] ICR 713 (term stated the ‘terms and conditions set out in the national maritime agreements have been taken into account’); and Alexander v Standard Telephones & Cables Ltd (No 2), note 140 above (term stated the terms were ‘in accordance with and subject to’ the provisions of the collective agreement). 156. See 5.10; Yousif v Commonwealth Bank of Australia, note 103 above, at [93]; Goldman Sachs JB Were Services Pty Ltd v Nikolich, note 17 above, at [176] and [281]–[288]. 157. BHP Iron Ore Pty Ltd v Australian Workers’ Union, note 150 above. 158. Honeyman v Nhill Hospital, note 142 above. 159. See the dicta of Lord Hoffmann in Johnson v Unisys Limited [2003] 1 AC 518; [2001] 2 All ER 801; 2 WLR 1076 at [60]–[66] and BHP Iron Ore Pty Ltd v Australian Workers’ Union, note 150 above, at [252]. 160. Young v Canadian Northern Railway Company, note 145 above, at 89; Alexander v Standard Telephones & Cables Ltd (No 2), note 140 above, at 291–2; Lakshmi v Mid Cheshire Hospitals NHS Trust [2008] IRLR 956 at [26] and McDonald v Parnell Laboratories Ltd, note 155 above, at [70]–[72]. 161. Sim v Rotherham Metropolitan Borough Council [1987] Ch 216 at 250–1; [1986] 3 All ER 387 at 406–7. See also British Leyland UK Ltd v McMullen [1978] IRLR 245; Secretary of State for Employment v Associated Society of Locomotive Engineers and Firemen (No 2) [1972] 2 QB 455 at 489–90; [1972] 2 All ER 949 at 965 and McDonald v Parnell Laboratories Ltd, note 155 above, at [68]–[69]. 162. See 6.21. 163. See, for example, Robertson v British Gas Corporation, note 11 above, at 356; Airlie v City of Edinburgh District Council [1996] IRLR 516 at [14]; Seymour v Stawell Timber Industries Pty Ltd, note 140 above and Gryf-Lowczowski v Hinchingbrooke Healthcare NHS Trust [2006] ICR 425. In Burke v Royal Liverpool Hospital NHS Trust [1997] ICR 730 the contractual entitlements of an employee decreased when the union and employer varied the collective agreement. 164. Riverwood International Australia Pty Ltd v McCormick, note 154 above. 165. Wandsworth London Borough Council v D’Silva [1998] IRLR 193; Cadoux v Central Regional Council [1986] IRLR 131 and the note on that case of B Napier, ‘Incorporation of Collective Agreements’ (1986) 15 ILJ 52 at 53–4. 166. Bainbridge v Circuit Foil UK Ltd, note 154 above, at 546 and 548; Wandsworth London Borough Council v D’Silva, note 165 above and Al-Safin v Circuit City Stores Inc (2005) 394 F 3d 1254. 167. See also Riverwood International Australia Pty Ltd v McCormick, note 154 above, at [111] and Finance Sector Union of Australia v Commonwealth Bank of Australia (2001) 106 IR 172; [2001] FCA 335 at [18]. 168. Anderson v Douglas & Lomason Company, note 153 above, at 286–7 and McDonald v Parnell Laboratories Ltd, note 155 above, at [66]. 169. Riverwood International Australia Pty Ltd v McCormick, note 154 above, at [152] per Mansfield J. See also Akmeemana v Murray, note 42 above, at [54] and Goldman Sachs JB Were Services Pty Ltd v Nikolich, note 17 above, at [122]–[125]. 170. See 8.23 and 8.28.

171. Robertson v British Gas Corporation, note 11 above; National Coal Board v National Union of Mineworkers [1986] ICR 736 at 772; Gibbons v Associated British Ports, note 144 above; Honeyman v Nhill Hospital, note 142 above and Morris v CH Bailey Ltd [1969] 2 Lloyd’s LR 215. See also Ellis v Minister for Lands (1985) 37 NTR 29; 82 FLR 58 and Finance Sector Union v Commonwealth Bank of Australia [2001] FCA 355 at [18]. 172. Robertson v British Gas Corporation, note 11 above, noted in P Leighton, ‘Employment contract documents and collective agreements’ (1983) 12 ILJ 115. 173. See Whent v T Cartledge Ltd [1997] IRLR 153 and Burroughs Machines Ltd v Timmoney [1977] IRLR 404. 174. See, for example, the various classes of terms discussed by North J in Riverwood International Australia Pty Ltd v McCormick, note 154 above, at [90]–[96] and Transport Workers’ Union of Australia v K&S Freighters Pty Ltd, note 119 above, at [68]–[85]. 175. Alexander v Standard Telephones and Cables Limited (No 2), note 140 above, at 292–3; Wandsworth London Borough Council v D’Silva, note 165 above; Griffiths v Buckinghamshire County Council [1994] ICR 265 at 275–6; Secretary of State for Employment v Associated Society of Locomotive Engineers and Firemen (No 2), note 161 above, QB at 506–7; All ER at 978–9; Airlie v City of Edinburgh District Council, note 163 above, at [15] and Hussain v Surrey and Sussex Healthcare NHS Trust [2011] EWHC 1670 (QB) at [159]–[159]. Note Gregory v Philip Morris Ltd (1987) 19 IR 258 at 273; G Tolhurst, note 9 above, at 712 and Goldman Sachs JB Were Services Pty Ltd v Nikolich, note 17 above, at [13]–[42], [292] and [324] (which concerned terms incorporated by notice). 176. R v Industrial Disputes Tribunal; ex parte Portland Urban District Council [1955] 1 WLR 949 at 956–7; Alexander v Standard Telephones & Cables Ltd (No 2), note 140 above (concerning redundancy selection procedures); National Coal Board v National Union of Mineworkers, note 171 above, at 773 (concerning a union–employer dispute settling procedure); Tadd v Eastwood [1983] IRLR 320; Griffiths v Buckinghamshire County Council, note 175 above, at 275–6 (the practice to be followed in redundancy matters) and J McMullen (ed), Redundancy: The Law and Practice, 2nd ed, Sweet and Maxwell, London, 2001, pp 286–90. Note also the dicta of Kenny J in BHP Iron Ore Pty Ltd v Australian Workers’ Union, note 42 above, at [255]. 177. See, for example, Camden Exhibition & Display Ltd v Lynott, note 154 above; City and Hackney Health Authority v National Union of Public Employees [1985] IRLR 252 at 255 and the discussion by W Wedderburn, The Worker and the Law, 3rd ed, Penguin Books, London, 1986, pp 338–43 and R Rideout, Rideout’s Principles of Labour Law, 5th ed, Sweet and Maxwell, London, 1989, pp 38–43. 178. Anderson v Pringle of Scotland Ltd [1998] IRLR 64; Adams v British Airways plc [1995] IRLR 577 and on appeal at [1996] IRLR 574 concerning the seniority rights of pilots. Contrast with Young v Canadian Northern Railway Company, note 145 above; Alexander v Standard Telephones & Cables Ltd (No 2), note 140 above, and note also the dissenting judgment of Lindgren J in Riverwood International Australia Pty Ltd v McCormick, note 154 above. 179. Goldman Sachs JB Were Services Pty Ltd v Nikolich, note 17 above, at [13]–[42]. For the distinction between promissory terms and representations, see 5.6. 180. See, for example, Adamastos Shipping Company v Anglo–Saxon Petroleum Company [1959] AC 133; [1958] 1 All ER 725; McCormick v Riverwood International Australia Pty Ltd (1999) 167 ALR 689; [1999] FCA 1640 at [86]–[93] (aff’d (2000) 177 ALR 193; [2000] FCA 889); E Peel, Treitel’s Law of Contract, 12th ed, Sweet and Maxwell, London, 2007, p 209; S Deakin and G Morris, Labour Law, note 148 above, pp 243–44; W Wedderburn, The Worker and the Law, note

177 above, pp 334–5 and K Lewison and D Hughes, The Interpretation of Contracts in Australia, note 25 above, p 441 for a more detailed examination of the resolution of conflicts between contracts and incorporated documents. 181. Brambles Holdings Ltd v Bathurst City Council, note 86 above, at [28]; Mid-Skin Cancer and Laser Centre Pty Ltd v Zahedi-Anarak (2006) 67 NSWLR 569; [2006] NSWSC 844 at [133]. There are some authorities that suggest that a term may be implied by a course of dealing, but it is suggested that the better view is that such terms are express rather than implied: see 5.31. 182. Goldman Sachs JB Were Services Pty Ltd v Nikolich, note 17 above, at [317] per Jessup J; Arthurson v State of Victoria, note 93 above, at [160] and [241] and Shirlaw v Southern Foundries (1926) Ltd [1939] 2 KB 206 at 227–8; 2 All ER 113 at 124–5. 183. Arthurson v State of Victoria, note 93 above, at [285], [299] and O’Brien v Associated Fire Alarms Ltd [1969] 1 All ER 93 at 96 and 98. 184. McAleer v University of Western Australia (No 3), note 73 above, at [102]–[106]; Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Skilled Engineering Ltd [2003] FCA 260 at [25] and CFMEU v Henry Walker Eltin Contracting Pty Ltd (2001) 108 IR 409 at [46]. 185. See, for example, Mann v Capital Territory Health Commission (1981) 54 FLR 23 at 28; Brambles Holdings Ltd v Bathurst City Council, note 86 above, at [28]; and Thomas & Morgan (United Kingdom) Ltd v Erica Vale Australia Pty Ltd (1995) 31 IPR 335 at 343–5 noted in M Branson, ‘Doctrine of Implied Terms’ (1996) 10 JCL 94. 186. Breen v Williams, note 8 above, CLR at 90–1; ALR at 271–2; Hawkins v Clayton, note 8 above, CLR at 570; ALR at 90–1; Marcus Clarke (Vic) Ltd v Brown (1928) 40 CLR 540 at 553; Byrne v Australian Airlines Limited, note 2 above, CLR at 422; ALR at 427–8. Note, however, J Carter and G Tolhurst, ‘Implied terms: Refining the New Law’ (1997) 12 JCL 152 at 158–9. 187. E Peden, ‘Policy Concerns Behind Implication of Terms in Law’ (2001) 117 LQR 459. 188. Byrne v Australian Airlines Limited, note 2 above, CLR at 420 and 447; ALR at 426 and 447; University of Western Australia v Gray (2009) 179 FCR 346; 259 ALR 224 at [136]; Wright v TNT Management Pty Ltd (1989) 15 NSWLR 679 at 698; Malik v Bank of Credit and Commerce International SA [1998] AC 20 at 45; [1997] 3 All ER 1 at 15 and Mears v Safecar Security Ltd, note 94 above, QB at 78–9; All ER at 878. 189. Liverpool City Council v Irwin [1977] AC 239 at 255; [1976] 2 All ER 39 at 44; Scally v Southern Health and Social Services Board, note 14 above, AC at 307; All ER at 571–2 and University of Western Australia v Gray, note 188 above, at [142]. 190. Wright v TNT Management Pty Ltd, note 188 above, at 697–8. 191. Byrne v Australian Airlines Limited, note 2 above, CLR at 448; ALR at 448; Malik v Bank of Credit and Commerce International SA, note 188 above, AC at 45; All ER at 15 and Wright v TNT Management Pty Ltd, note 188 above, at 697–8. 192. Breen v Williams, note 8 above, CLR at 103; ALR at 281. 193. Byrne v Australian Airlines Limited, note 2 above, CLR at 422; ALR at 427–8. 194. Byrne v Australian Airlines Limited, note 2 above, CLR at 449–50; ALR at 449–50; Thompson v ASDA-MFI Group Plc [1988] 2 All ER 722; [1988] Ch 241 at 266 and Cheall v Association of Professional Executive Clerical and Computer Staff [1983] 2 AC 180 at 188–9; see 8.33. There is authority for the view that such an obligation arises from the construction of the contract rather than an implied term: Secured Income Real Estate (Aust) Ltd v St Martins Investments Pty Ltd,

note 74 above, CLR at 607–8; ALR at 576; Park v Brothers (2005) 222 ALR 421 at [38]; Southern Foundries (1926) Ltd v Shirlaw, note 2 above, AC at 717; All ER at 454–5 per Lord Atkin (‘I should not so much base the law on an implied term, as on a positive rule of the law of contract that conduct of either promisor or promisee which can be said to amount to himself “of his own motion” bringing about the impossibility of performance is in itself a breach’) and at 723 (2 All ER 458–9) per Lord Wright. Professor Peden convincingly argues that this principle is based, or at least should be based, on construction of the contract rather than an implied term (E Peden, ‘“Cooperation” in English Contract Law — to Construe or Imply?’ (2000) 16 JCL 56. 195. Concut Pty Ltd v Worrell, note 41 above, at [23] and [25] per Gleeson CJ, Gaudron and Gummow JJ and Malik v Bank of Credit and Commerce International SA, note 188 above, AC at 45; All ER at 15 per Lord Steyn. On the relationship between express terms and the implied term of trust and confidence, see Aldersea v Public Transport Commission (2001) 3 VR 499; 183 ALR 545; [2001] VSC 169 at [69] and Johnson v Unisys Ltd, note 149 above, at [37] and [42]; see 8.22. 196. Byrne v Australian Airlines Limited, note 2 above, CLR at 448; ALR at 448; Sterling Engineering Co v Patchett (No1) [1955] AC 534 at 543–4 and 547 and Concrete Pty Limited v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577; 231 ALR 663 at [59]. 197. Devefi Pty Ltd v Mateffy Pearl Nagy Pty Ltd, note 41 above, at 240–1 per Northrop, Gummow and Hill JJ referred to approvingly in Concrete Pty Limited v Parramatta Design & Developments Pty Ltd, note 196 above, at [59]; Byrne v Australian Airlines Limited, note 2 above, CLR at 448–9; ALR at 448–9 and Johnson v Unisys Ltd, note 149 above, at [37]. 198. See, for example, Wessex Dairies Ltd v Smith [1935] 2 KB 80 at 88 (term implied by law when express term void in restraint of trade); Triplex Safety Glass Co Ltd v Scorah [1938] Ch 211 at 216; [1937] 4 All ER 693 at 698; 55 RPC 21 at 28; Financial Integrity Group Pty Ltd v Farmer [2009] ACTSC 143 (term implied by law when the express term was contrary to statute) and Secton Pty Ltd v Delawood Pty Ltd (1991) 21 IPR 136 at 152. 199. John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1; 266 ALR 462 at 34; Hospital Products Ltd v United States Surgical Corp, note 17 above, CLR at 97; ALR at 454; Breen v Williams, note 8 above, CLR at 132–3; ALR at 304; Potters-Ballotini v WestonBaker [1977] RPC 202 at 205 and 211. See also Thomas Marshall (Exports) Ltd v Guinle [1979] Ch 227; [1978] 3 All ER 193 (equitable obligation prohibited use of confidential information when express term only prohibited disclosure of confidential information); cf British Industrial Plastics v Ferguson [1939] 4 All ER 504 at 508. See 7.119. 200. Concut Pty Ltd v Worrell, note 41 above, at [23]; Dover Fisheries Pty Ltd v Bottrill Research Pty Ltd (1994) 63 SASR 557 at 573–4; see further 10.19. 201. Johnstone v Bloomsbury Health Authority [1992] QB 333 at 351–2; [1991] 2 All ER 293 at 305– 6 (express term permitting work of up to an average of 88 hours per week subject to implied term not to require the employee to work so much that was reasonably foreseeable it would damage his health); Ottoman Bank v Chakarian [1930] AC 277 (express term requiring employee to relocate did not permit sending him to a branch at which his life would be in danger). 202. South Australia v McDonald (2009) 104 SASR 344; 185 IR 45; [2009] SASC 219 at [237]– [243], and [270]. 203. Byrne v Australian Airlines Limited, note 2 above, CLR at 451; ALR at 450–1; Breen v Williams, note 8 above, CLR at 103; ALR at 281; Liverpool City Council v Irwin, note 189 above, AC at 254; All ER at 44; Scally v Southern Health and Social Services Board, note 14 above, AC at 304; All ER at 569; Mears v Safecar Security Ltd, note 94 above, QB at 78–9; All ER at 878 and

Australian National Hotels Pty Ltd v Jager [2000] TASSC 43; (2000) 9 Tas R 153 at [16]. 204. University of Western Australia v Gray, note 188 above, at [142]; Crossley v Faithful & Gould Holdings Ltd [2004] 4 All ER 447; [2004] ICR 1615 at [33] per Dyson LJ (‘the word ‘necessary’ is somewhat protean’) and E Peden, ‘Policy Concerns Behind Implication of Terms in Law’ (2001) 117 LQR 459 at 466–8. 205. Devefi Pty Ltd v Mateffy Pearl Nagy Pty Ltd, note 41 above, at 240–1 and Jarrett v Commissioner of Police (NSW) (2005) 224 CLR 44; 221 ALR 95; 145 IR 194 at [78]. 206. Byrne v Australian Airlines Limited, note 2 above, CLR at 451; ALR at 450–1; Codelfa Construction Pty Ltd v State Rail Authority of New South Wales, note 26 above, CLR at 345; ALR at 370; Liverpool City Council v Irwin, note 189 above, AC at 254; All ER at 44; Lister v Romford Ice and Cold Storage Co Ltd [1957] AC 555 at 576; 1 All ER 125 at 132–3; Crossley v Faithful & Gould Holdings Ltd, note 204 above, at [34]–[46]; Simonius Vischer & Co v Holt [1979] 2 NSWLR 322 at 348 and Breen v Williams, note 8 above, CLR at 103; ALR at 281. 207. University of Western Australia v Gray, note 188 above, at [142]–[146] and the cases discussed therein; Crossley v Faithful & Gould Holdings Ltd, note 204 above, at [34]–[38]; Jarrett v Commissioner of Police (NSW), note 205 above, at [78] and E Peden, ‘Policy Concerns Behind Implication of Terms in Law’ (2001) 117 LQR 459 at 467–75. On the implication of terms into the contract of a public service employee whose employment is governed by a statute, see Australian Telecommunications Commission v Hart (1982) 43 ALR 165 at 170 and 172 and Bayley v Osborne (1984) 4 FCR 141 at 145. 208. See, for example, Reid v Rush & Tompkins Group Plc [1990] 1 WLR 212 at 220; [1989] 3 All ER 228 at 233–4 (UK Court of Appeal declined to imply a term obliging an employer to insure employees working overseas in countries without compulsory third party vehicle insurance as the embodiment of such a policy was best left to the legislature). 209. Byrne v Australian Airlines Limited, note 2 above, CLR at 452–3; ALR at 451–2. On failed attempts to imply a term in law to the effect that an employee is entitled to the benefits of a policy of the employer, see Riverwood International Australia Pty Ltd v McCormick, note 154 above, at [72] per Lindgren J in dissent and Willis v Health Communications Network Ltd (2007) 167 IR 425; [2007] NSWCA 313 at [33] and [55]. 210. E Peden, ‘Policy Concerns Behind Implication of Terms in Law’ (2001) 117 LQR 459 at 460–2; cf A Phang, ‘Implied Terms in English Law-Some Recent Developments’ [1993] JBL 242 at 247–8; Crossley v Faithful & Gould Holdings Ltd, note 204 above, at [41] and Reid v Rush & Tompkins Group Plc, note 208 above. See also G Williams, ‘Language and the Law — IV’ (1945) 61 LQR 384 at 401 and Breen v Williams, note 8 above, CLR at 103; ALR at 281. 211. Scally v Southern Health and Social Services Board, note 14 above. See also Crossley v Faithful & Gould Holdings Ltd, note 204 above, at [34]–[46] and Spring v Guardian Assurance plc [1995] 2 AC 296 at 353–4 discussed in 16.53. 212. Scally v Southern Health and Social Services Board, note 14 above, AC at 307; All ER 563 at 571–2, referred to approvingly in Byrne v Australian Airlines Limited, note 2 above, CLR at 451; ALR at 451; noted in P Brereton, ‘Employers’ Duties in Contract and Tort’ (1992) 5 JCL 264. See also Cornwell v the Commonwealth of Australia, note 14 above (implied term that the employer was obliged to inform the employee of his right to apply under an Act for membership of a particular superannuation fund) (aff’d on other grounds [2006] ACTCA 7 and (2007) 229 CLR 519; 234 ALR 148). 213. Australian Rugby League Ltd v Cross (1997) 39 IPR 111 at 118 and 121.

Devonald v Rosser & Sons [1906] KB 728 at 739 and 742; Bauman v Hulton Press Ltd [1952] 1 214. All ER 1124 and Roadshow Entertainment Pty Ltd v ACN 053 006 269 Pty Limited Receiver & Manager Appointed (1997) 42 NSWLR 462 at 474. See also Milne v Municipal Council of Sydney (1912) 14 CLR 54 at 63, 66 and 67. 215. Mann v Capital Territory Health Commission, note 185 above, at 32 (leave to appeal refused (1982) 148 CLR 97; 42 ALR 46) and Capital Aircraft Services Pty Ltd v Brolin [2007] ACTCA 8 at [27]. 216. William Hill Organisation Ltd v Tucker [1999] ICR 291 at 297; Bearingpoint Australia Pty Ltd v Hillard [2008] VSC 115 at [86] and Breach (FT) v Epsylon Industries Ltd [1976] ICR 316 at 320. 217. Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337 at 343 (in the context of a public performance contract, ‘if the contract is silent [the court] will readily imply such a term to give effect to the presumed intentions of the parties’). 218. Codelfa Construction Pty Ltd v State Rail Authority of New South Wales, note 26 above, CLR at 346; ALR at 370 per Mason J, Stephen and Wilson JJ agreeing and Breen v Williams, note 8 above, CLR at 102; ALR at 281. As to the meaning of the ‘presumed’ or ‘imputed’ intention of the parties, see J Paterson, ‘Terms Implied in Fact: the Basis for Implication’ (1998) 13 JCL 103; cf when the parties have directed their minds to an event occuring but have been unable to agree about it: Pepe v Platypus Asset Management Pty Ltd [2011] VSC 603 at [223]. 219. See 5.57. 220. See 5.58. 221. Byrne v Australian Airlines Limited, note 2 above, CLR at 448; ALR at 448 and A Stewart, ‘Oral Promises, Ad Hoc Implication and the Sanctity of Written Agreements’ (1987) ALJ 119 at 130. 222. Codelfa Construction Pty Ltd v State Rail Authority of New South Wales, note 26 above, CLR at 356; ALR at 378 and Roxborough v Rothmans of Pall Mall Australia Pty Ltd (2001) 208 CLR 516; 185 ALR 335 at [159]. 223. Byrne v Australian Airlines Limited, note 2 above and Re Pacific Coal Pty Ltd; Ex parte CFMEU (2000) 203 CLR 346; 172 ALR 257; 96 IR 289 at [120]. 224. Byrne v Australian Airlines Limited, note 2 above, CLR at 422 and 442; ALR at 427–8, and 443– 4. As to implicit terms, see 5.47. A different approach appears to be followed in the United Kingdom where the implication of terms is considered to be a process of construction of the agreement: see Attorney General of Belize v Belize Telecom Ltd [2009] 2 All ER 1127 at [16]– [27] noted in E Macdonald, ‘Casting Aside “Officious Bystanders” and “Business Efficacy”?’ (2009) 26 JCL 97. 225. Byrne v Australian Airlines Limited, note 2 above, CLR at 422 and 442; ALR at 427–8 and 443– 4. 226. Codelfa Construction Pty Ltd v State Rail Authority of New South Wales, note 26 above, CLR at 354; ALR at 376–7 and J Paterson, ‘Terms Implied in Fact: the Basis for Implication’ (1998) 13 JCL 103. There is some authority to support the view that the court can take into account the practice of the parties: see O’Brien v Associated Fire Alarms Ltd, note 183 above, at 98. 227. For example, there are various decisions implying (or refusing to imply) slightly different terms concerning the power of an employer to dismiss an employee on extended sick leave: see Aspden v Webbs Poultry and Meat Group (Holdings) Limited [1996] IRLR 521; Hill v General Accident Fire & Life Assurance Corporation [1998] IRLR 641; Villella v MFI Furniture Centres Limited [1999] IRLR 468; Briscoe v Lubrizol Limited [2002] IRLR 607 and McGrath v Trintech

Technologies Ltd [2005] 4 Irish Reports 382. 228. O’Brien v Associated Fire Alarms Ltd, note 183 above, at 96 and 98 and Arthurson v State of Victoria, note 93 above, at [285] and [299]. 229. Ali v Christian Salvesen Food Services Ltd [1997] 1 All ER 721 at 726; [1997] ICR 25 at 31. 230. BP Refinery (Westernport) Pty Ltd v Hastings Shire Council, note 92 above, CLR at 283; ALR at 376. 231. Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd, note 74 above, CLR at 605–6; ALR at 575; Codelfa Construction Pty Ltd v State Rail Authority of New South Wales, note 26 above, CLR at 351–2 and 404; ALR at 374 and 418; Hospital Products Ltd v United States Surgical Corporation, note 17 above, CLR at 65–6, 95, 117–8 and 121; ALR at 430, 453, 469–70 and 472; Moorgate Tobacco Co Ltd v Philip Morris Ltd [No 2] (1984) 156 CLR 414 at 435; 56 ALR 193 at 206; Adelaide Corporation v Jennings Industries Ltd (1985) 156 CLR 274 at 281–2; 57 ALR 455 at 460; Hawkins v Clayton, note 8 above, CLR at 571–3; ALR at 91–3 and Byrne v Australian Airlines Limited, note 2 above, CLR at 422 and 441; ALR at 427–8 and 443. 232. Byrne v Australian Airlines Limited, note 2 above, CLR at 422; ALR at 427–8 and Hospital Products Ltd v United States Surgical Corporation, note 17 above, CLR at 121; ALR at 472; cf Attorney General of Belize v Belize Telecom Ltd, note 224 above, at [16]–[27]. 233. Codelfa Construction Pty Ltd v State Rail Authority of New South Wales, note 26 above, CLR at 354; ALR at 370 per Mason J. Where the parties have agreed to a code governing a matter then there can be no implication of a term implied in fact: see McAleer v University of Western Australia (No 3), note 73 above, at [108]–[114]. 234. Hawkins v Clayton, note 8 above, CLR at 573; ALR at 93 per Deane J, approved by both the majority and the minority in Byrne v Australian Airlines Limited, note 2 above, CLR at 422 and 442; ALR at 427–8 and 443–4; Breen v Williams, note 8 above, CLR at 80 and 124 (but note 102–3); ALR at 263 and 297–8 (but note 281–2); Gold Peg International Pty Ltd v Kovan Engineering (Aust) Pty Ltd (2005) 225 ALR 57 at [78] and G Tolhurst and J Carter, ‘The New Law on Implied Terms’ (1996) 11 JCL 76 at 80. 235. It is possible that Deane J’s statement should read ‘is necessary for the reasonable and effective operation of the contract’: G Tolhurst and J Carter, note 234 above, at 85–6. 236. Hospital Products Ltd v United States Surgical Corporation, note 17 above, CLR at 121; ALR at 472 and Byrne v Australian Airlines Limited, note 2 above, CLR at 442; ALR at 443–4. 237. Breen v Williams, note 8 above, CLR at 90–1; ALR at 271–2; Byrne v Australian Airlines Limited, note 2 above, CLR at 422; ALR at 427–8; Hawkins v Clayton, note 8 above, CLR at 570; ALR at 90–1; Marcus Clarke (Vic) Ltd v Brown, note 186 above, at 553; note, however, J Carter and G Tolhurst, ‘Implied Terms: Refining the New Law’ (1997) 12 JCL 152 at 158–9. 238. Byrne v Australian Airlines Limited, note 2 above, CLR at 422; ALR at 427–8 and Arthurson v State of Victoria, note 93 above, at [267]. 239. Byrne v Australian Airlines Limited, note 2 above, CLR at 422; ALR at 427–8. McHugh and Gummow JJ at 442 (ALR 443–4) considered that the alternative approach should be applied where ‘the contract is not in writing and is oral or partly oral or it appears that the parties themselves did not reduce their agreement to a complete written form’. 240. Codelfa Construction Pty Ltd v State Rail Authority of New South Wales, note 26 above, CLR at 356 and 374; ALR at 378 and 393 and Narni Pty Ltd v National Australia Bank Ltd [2001] VSCA 31 at [16].

241. See, with respect, McCormick v Riverwood International Australia Pty Ltd, note 180 above, at [94]–[98] and H and H Security Pty Ltd v Toliopoulos [1997] FCA 838. 242. See 5.4. 243. Mears v Safecar Security Ltd, note 94 above, QB at 80–1; All ER at 879–80 per Stephenson LJ. 244. Eagland v British Telecommunications Plc [1993] ICR 644 at 652–3 and Southern Cross Healthcare Co Ltd v Perkins [2011] IRLR 247 at [26]–[30]. 245. Jones v Associated Tunneling Co Ltd, note 93 above, at 481 and Courtaulds Ltd v Sibson, note 93 above, at 460. 246. Brackenridge v Toyota Motor Corporation Australia Ltd (1996) 142 ALR 99 at 105–6; Codelfa Construction Pty Ltd v State Rail Authority of New South Wales, note 26 above, CLR at 346; ALR at 370; Australian Meat Industry Employees’ Union v Frugalis Pty Ltd [1990] 2 Qd R 201 at 206–7; (1989) 30 IR 149 at 153–4; Bell v Lever Bros [1932] AC 161 at 226 and Attorney General of Belize v Belize Telecom Ltd, note 224 above, at [16]. 247. Byrne v Australian Airlines Limited, note 2 above, CLR at 442; ALR at 443; see also Christie v Qantas Airways Ltd (1996) 138 ALR 19 at 43–4; 68 IR 248 at 273 (rev’d on other grounds (1998) 193 CLR 280; (1998) 152 ALR 365); Arthurson v State of Victoria, note 93 above, at [263] and Ridgeway International Ltd v McCullum [1998] NSWSC 151 (no implication of a postemployment restraint of trade clause that would only benefit the employer). 248. Devonald v Rosser & Sons [1906] 2 KB 728 at 741 per Lord Alverston CJ and 743 per Farwell LJ. Each member of the court was prepared to find that there was an implied obligation on the employer to provide work during the employment, though Farwell LJ went too far when he said that the court is to raise ‘such a reasonable contract as would be entered into by two business men’. See also Network Ten v Rowe, note 67 above, in which the court, in dicta, was also prepared to imply a term in an employment contract to ensure that the employee was not required to work without remuneration (aff’d on other grounds in (2006) 149 IR 280; [2006] NSWCA 1). 249. See 5.58. 250. Australian Meat Industry Employees’ Union v Frugalis Pty Ltd, note 246 above, Qd R at 206–7; IR at 153–4. There is a difference between this notion of necessity and the notion of necessity utilised when implying terms in law. See 5.50. 251. If the term sought to be implied is contrary to an express term then no implication will be made; see 5.65. 252. Edwards v North Goonyella Coal Mines Pty Ltd [2005] QSC 242 at [37]. 253. In Hawkins v Clayton, note 8 above, CLR at 573; ALR at 93, Deane J determined that it was unnecessary to imply a term in fact in a contract to impose a contractual duty that would be concurrent and co-extensive with a tortious duty of care. See J Swanton, ‘Implied Contractual Terms: Further Implications of Hawkins v Clayton’ (1992) 5 JCL 127 at 128–9; Scally v Southern Health & Social Services Board, note 14 above, AC at 307; All ER at 571–2 and P Brereton, ‘Employers’ Duties in Contract and Tort’ (1992) 5 JCL 264. 254. Byrne v Australian Airlines Limited, note 2 above, CLR at 423; ALR at 428 per Brennan CJ, Dawson and Toohey JJ; see also at 452–3 (ALR 451–2) per McHugh and Gummow JJ (the term was not necessary to be implied in law as the contract was not nugatory, unworkable or ineffective without it). 255. Brackenridge v Toyota Motor Corporation Australia Ltd, note 246 above, at 105 per Wilcox J; see also Byrne v Australian Airlines Limited, note 2 above, CLR at 443; ALR at 444–5 and

Ridgeway International Ltd v McCullum, note 247 above. 256. Griggs v Noris Group of Companies (2006) 94 SASR 126; 148 IR 427; [2006] SASC 23 at [25] and Morley v Heritage plc [1993] IRLR 400 at 402. 257. Codelfa Construction Pty Ltd v State Rail Authority of New South Wales, note 26 above, CLR at 355 and 374; ALR at 377 and 393 and A Stewart, note 221 above, at 131. At times courts have suggested that a term that is obvious may simply be inferred; see Hawkins v Clayton, note 8 above, CLR at 570; ALR at 90–1 and Griggs v Noris Group of Companies, note 256 above, at [24]. 258. See 5.58. 259. Reigate v Union Manufacturing Co (Ramsbottom) Ltd, note 9 above, at 605 and Spring v National Amalgamated Stevedores and Dockers Society [1956] 2 All ER 221 at 231. There is an alternative view that the requirement for ‘obviousness relates to the need to imply some term, not the particular term sought to be implied’: G Tolhurst and J Carter, note 234 above, p 86. 260. Mann v The Capital Territory Health Commission, note 185 above, at 32 (leave to appeal refused (1982) 42 ALR 46; (1982) 148 CLR 97); Australian & International Pilots Association v Qantas Airways Limited (2008) 179 IR 200; [2008] FCA 1972 at [85] and Goldman Sachs JB Were Services Pty Ltd v Nikolich, note 17 above, at [317]. 261. Byrne v Australian Airlines Limited, note 2 above. See also Riverwood International Australia Pty Ltd v McCormick, note 154 above, at [68]–[69] per Lindgren J in dissent; cf the first instance decision in McCormick v Riverwood International Australia Pty Ltd, note 180 above, at [93]– [98]. 262. Ryan v Textile Clothing and Footwear Union of Australia, note 145 above, at 270. 263. Mann v The Capital Territory Health Commission, note 185 above (leave to appeal refused (1982) 42 ALR 46; (1982) 148 CLR 97). See also Brackenridge v Toyota Motor Corporation Australia Ltd, note 246 above, at 106 (term concerning disciplinary demotions) and Lake v Essex County Council [1979] ICR 577 (term concerning work outside of teaching hours). On the use of uncertain language in the implied term, see Richardson v Queensland Corrective Services Commission (1994) 55 IR 475 at 479 and Goldman Sachs JB Were Services Pty Ltd v Nikolich, note 17 above, at [318]. 264. Nelson v BBC [1977] ICR 649 at 656 per Roskill LJ (express term permitted transfer and the implication sought was that no transfer could occur). 265. Ikin v Danish Club (2001) 140 IR 101; [2001] VSCA 123 at [17]; Reda v Flag Ltd (Bermuda) [2002] IRLR 747 at [45]; Australian Colliery Staff Association v Queensland Mines Rescue Service (1999) 88 IR 78; [1999] FCA 395 at [54] (term concerning mobility); Sear v Invocare Australia Pty Ltd [2007] WASC 30 at [107] and Hogan v Tumut Shire Council (1954) 54 SR (NSW) 284 at 290. 266. Griggs v Noris Group of Companies, note 256 above, at [27] per White J. 267. Byrne v Australian Airlines Limited, note 2 above, CLR at 423; ALR at 428. 268. See 5.73. 269. Young v Canadian Northern Railway Company, note 145 above, at 88–9; Ryan v Textile Clothing and Footwear Union of Australia, note 145 above, at 260; Reilly v Praxa Ltd, note 146 above, at [28] and Reynolds v Southcorp Wines Pty Ltd, note 122 above, at [56]. 270. Majeau Carrying Co Pty Ltd v Coastal Rutile Ltd (1973) 129 CLR 48 at 52 and 60–1; 1 ALR 1 at 3 and 10; Nelson v Dahl (1879) 12 Ch D 568 at 575 and Rickless v United Artists Corporation

[1988] QB 40; [1987] 1 All ER 679. There is a credible theory that a custom may become so well known that it does not require proof through evidence; rather the courts will take judicial notice of it: Moult v Halliday [1897] 1 QB 125 at 130 and George v Davies [1911] 2 KB 445. When a custom reaches such a level of general acceptance and recognition it is probably best described as a term implied by law. 271. Henry v London General Transport Services [2002] ICR 910 at 916 per Pill LJ. 272. Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226 at 236; 64 ALR 481 at 485–6 and Evans, Deakin and Co Ltd v Allen, note 7 above, at 202. 273. Majeau Carrying Co Pty Ltd v Coastal Rutile Ltd, note 270 above, CLR at 61; ALR at 10 per Stephen J; Dovuro Pty Ltd v Wilkins (2000) 105 FCR 476; 182 ALR 481; [2000] FCA 1902 at [149] and Howtrac Rentals Pty Ltd v Thiess Contractors (NZ) Limited [2000] VSC 415 at [407]. 274. Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd, note 272 above, CLR at 236; ALR at 485–6; Sagar & Ridehlagh & Son Ltd [1930] All ER Rep 288; [1931] 1 Ch 310 at 339 and Ropner & Co v Stoate Hosegood & Co (1905) 92 LT 328 at 332 deal with the effect of employers in the trade ‘contracting out’ of the custom. See also Duke v Reliance Systems Ltd [1982] ICR 449 at 452 and Ryan v Textile Clothing and Footwear Union, note 145 above, at 260. 275. Chris Poulson Insurance Agencies Pty Ltd v National Mutual Life Association of Australasia Limited [1999] TASSC 40 at [57]; contra the majority in Sagar and Ridehlagh & Son Ltd [1931] 1 Ch 310 at 330 and 342. 276. For example, warehousemen in Majeau Carrying Co Pty Ltd v Coastal Rutile Ltd, note 270 above; civil engineers in Abernathy v Mott, Hay and Anderson [1974] ICR 323; apprentices in the metal industry in Evans Deakin v Allen, note 7 above or weavers in Lancashire in Sagar v Ridehlagh & Son Ltd [1931] 1 Ch 310. See also Danowski v Henry Moore Foundation (1996) 140 SJLB 101 (proof that the custom applies in one part of the trade will not support the inference that the custom applies to all employees across the whole trade). 277. Majeau Carrying Co Pty Ltd v Coastal Rutile Ltd, note 270 above, CLR at 52; ALR at 3 and Re An Arbitration between Walkers, Winser & Hamm and Shaw, Son & Co [1904] 2 KB 152 at 160. 278. For example, Rosenhain v Commonwealth Bank of Australia, note 7 above, at 53. As to the approach when determining the meaning of ‘custom’ in an award see Logan v Otis Elevator Co Pty Ltd (1999) 94 IR 218 at [17]–[20]. 279. Devonald v Rosser & Sons, note 248 above, at 741; Thornley v Tilley (1925) 36 CLR 1 at 8 and Nelson v Dahl, note 270 above, at 575, referred to approvingly by the High Court in Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd, note 272 above, CLR at 236; ALR at 485–6. 280. Thornley v Tilley, note 279 above, at 8 and 18–19; Nelson v Dahl, note 270 above, at 575; ConStan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd, note 272 above, CLR at 236; ALR at 485–6; Evans, Deakin and Co Ltd v Allen, note 7 above, at 19; Moult v Halliday, note 270 above, at 128 and 130 and GKN (Cwmbran) Ltd v Lloyd [1972] ICR 214 at 219–20 (alleged custom permitting the employer to unilaterally alter the employee’s duties and remuneration was not reasonable). 281. Devonald v Rosser & Sons, note 248 above, at 741 and 743; cf Sagar v Ridehlagh & Son Ltd, note 275 above, at 339. In Evans, Deakin and Co Ltd v Allen, note 7 above, the alleged term was that the employer could suspend the employee for a ‘reasonable time’ in the event of misconduct.

Philp J observed that such a term would not be certain. 282. Evans, Deakin and Co Ltd v Allen, note 7 above, at 201 and Rosenhain v Commonwealth Bank of Australia, note 7 above, at 53. 283. Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd, note 272 above, CLR at 236–7; ALR at 486; Summers v The Commonwealth (1918) 25 CLR 144 at 148 (aff’d (1919) 26 CLR 180); Sutcliffe v Hawker Siddley Aviation Ltd [1973] ICR 560 at 567 (express power to transfer worker was inconsistent with alleged custom that transferred employee was made redundant); Solectron Scotland Ltd v Roper [2004] IRLR 4 (irregular practice of employer in renegotiating redundancy agreements did not establish a custom that the expressly agreed redundancy agreement was not enforceable); French v Barclays Bank PLC [1998] IRLR 646 (an express term reserving to the employer a discretion as to whether a benefit was to be conferred excluded an alleged custom about the terms on which the benefit was to be conferred) and Australian Workers Union v Roads and Traffic Authority (NSW) (1989) 29 IR 202 at 212–4. Note also Metzner v Bolton (1854) 9 Exch 518; 156 ER 222 (custom applied to modify an express parol term where the custom would not have modified an express written term: a result that is unlikely to be replicated in the twenty-first century). There is a line of authority, including Parker v Ibbetson (1858) 4 CB (NS) 345; 140 ER 1118, suggesting that a proved custom is a term of the contract unless it is necessarily excluded by the term of the agreement, though it is suggested that this appears to be putting the matter too highly. 284. Danowski v Henry Moore Foundation, note 276 above and London Export Corporation Ltd v Jubilee Coffee Roasting Co Ltd [1958] 1 WLR 661 at 675; 2 All ER 411 at 420–1. 285. Byrne v Australian Airlines Limited, note 2 above, CLR at 440; ALR at 442 and Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd, note 272 above, CLR at 237; ALR at 486. 286. BP Refinery (Westernport) Pty Ltd v Hastings Shire Council, note 92 above. See 5.60, 5.61 and 5.65. 287. Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd, note 272 above, CLR at 236; ALR at 485–6; Summers v The Commonwealth, note 283 above, at 148 (aff’d (1919) 26 CLR 180); Ryan v Textile Clothing and Footwear Union, note 145 above, at 260 and Bond v Cav Ltd [1983] IRLR 360. It is doubtful whether the custom in Sagar v Ridehlagh & Son Ltd, note 275 above, which employees and unions in the industry had objected to for decades (at 339), could be a custom that was ‘acquiesced in’ by the employees. 288. Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd, note 272 above, CLR at 237; ALR at 486. 289. Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd, note 272 above, CLR at 237–8; ALR 4 at 86 and Greene v Moss (1995) 14 WAR 333 (custom bound employee although he was partly ignorant of it). 290. See, for example, Turner v Australasian Coal and Shale Employee’s Federation (1984) 6 FCR 177 at 182–3; 55 ALR 635 at 639; 9 IR 87 at 91 (custom did not bind a trainee entering the industry); Evans, Deakin and Co Ltd v Allen, note 7 above, at 199 (custom did not bind an apprentice entering the industry); Mackie v Wienholt (1880) 5 QSCR 211 at 212–3 (custom did not bind a cook engaged in London to perform work in Goomburra, Queensland); Greene v Moss, note 289 above (custom bound employee who had been working for a few months in the industry); Fielder v Christofani [1901] 20 NZLR 491 (an Australian custom did not bind a New Zealand employer who engaged an Australian worker to travel from Australia to perform work in New Zealand) and Ryan v Textile Clothing and Footwear Union, note 145 above, at 260.

291. See the approach taken in Uszok v Henley Properties (NSW) Pty Ltd [2007] NSWCA 31 at [23]. 292. General Re-insurance Corporation v Forsakringsaktiebolaget Fennia Patria [1983] QB 856 at 874. 293. See the dissent of Du Parcq LJ in Marshall v English Electric Co Ltd [1945] 1 All ER 653. The less convincing majority (Lord Goddard and MacKinnon LJ) adopt an approach to the enforceability of a practice that is inconsistent with the current law. 294. Byrne v Australian Airlines Limited, note 2 above, CLR at 423–4; ALR at 428–9 per Brennan CJ, Dawson and Toohey JJ and at 440 per McHugh and Gummow JJ and Burgess v Mount Thorley Operations Pty Ltd, note 155 above, at 428–9 (past compliance award obligations does not provide a basis for the conclusion that there was a custom to the same effect). In an analogous context, see Young v Canadian Northern Railway, note 145 above and Meek v Port of London Authority [1918] 1 Ch 415 at 421. 295. In the last 100 years, there appears to be two reported cases in which a term based on a trade custom was implied into an employment contract by an Australian superior court: Greene v Moss, note 289 above (custom that employee was to receive a share of the fishing catch) and Manuel v Pasminco Cockle Creek Smelter Pty Ltd (1998) 83 IR 135 at 137–8 and 156 (concerning the peculiar industrial arrangements in Broken Hill). Failed recent attempts to imply such terms include Turner v Australasian Coal and Shale Employee’s Federation, note 290 above; Byrne v Australian Airlines Limited, note 2 above and Ryan v Textile Clothing and Footwear Union, note 145 above: see also G Tolhurst and J Carter, note 234 above, p 84. Inferior court or Industrial Commission decisions on customs include Burgess v Mount Thorley Operations Pty Ltd, note 155 above and Brooks v Australian Dried Fruit Sales (1998) 84 IR 33; R v Alexander; Ex parte Campbell (1943) 17 ALJ 28 and Logan v Otis Elevator Co Pty Ltd (1999) 94 IR 218; [1999] IRCA 4 at [17]–[20] concerned customs in employment, but they concerned the meaning of that word in a statute or award. 296. See Professor Bernstein’s influential empirical studies of the existence of customs in L Bernstein, ‘Opting out of the Legal System: Extralegal Contractual Relations in the Diamond Industry’ (1992) 21 J Legal Stud 115 and L Bernstein, ‘The Questionable Empirical Basis of Article 2’s Incorporation Strategy: A Preliminary Study’ (1999) 66 U Chi L Rev 710. 297. It is no coincidence that the only reported decisions of an Australian superior court in the last 50 years enforcing a custom in an employment contract arose from the practice in remote communities dominated by one industry: Greene v Moss, note 289 above and Manuel v Pasminco Cockle Creek Smelter Pty Ltd, note 295 above. 298. See 5.72. 299. Woodroffe v Farnham (1693) 2 Vern 291; 23 ER 788 (master may dismiss servant who frequently gambles); Moult v Halliday, note 270 above, at 128 (domestic servants who leave employment are entitled to have their character reference handed to their new employer); R v Inhabitants of Stoke-Upon-Trent (1843) 5 QB 303 (entitlement to take holidays) and Carsan v Watts (1784) 3 Dougl 350; 99 ER 691 (right of apprentice to retain earnings from prize). 300. For example, Robinson v Hindman (1800) 3 Esp 235; 170 ER 599; Metzner v Bolton, note 283 above; Parker v Ibbetson, note 283 above and Huttman v Boulnois the Younger (1826) 2 Car & P 510; 172 ER 231 and the cases discussed by M Freedland, The Contract of Employment, Clarendon Press, Oxford, 1976, pp 149–50. As to the custom concerning domestic and menial servants, see George v Davies [1911] 2 KB 445; Moult v Halliday, note 270 above, at 130; Nowlam v Ablett (1835) 2 CM & R 53; 150 ER 23; Fawcett v Cash (1834) 5 B & Ad 904; 110 ER 1026; Beeston v Collyer (1827) 4 Bing 309; 130 ER 786; Metzner v Bolton, note 283 above;

Parker v Ibbetson, note 283 above and Nicoll v Graves (1864) 17 CB (NS) 26; 144 ER 11. 301. O Kahn-Freund, ‘Legal Framework’ in A Flanders and H Clegg (eds), The System of Industrial Relations in Great Britain, Blackwell, Oxford, 1954, pp 58–9. 302. Byrne v Australian Airlines Limited, note 2 above, CLR at 440; ALR at 442. 303. Perhaps the closest a court came to accepting was the decision of Elias J in Solectron Scotland Ltd v Roper, note 283 above. 304. D Brodie, ‘Legal Coherence and the Employment Revolution’ (2001) 117 LQR 604 and D Brodie, ‘Kahn-Freund and the Content of Employment Contracts’ [1994] J Rev 292. 305. See 5.4. 306. M Freedland, The Contract of Employment, note 300 above, p 15. See also R v Alexander; Ex parte Campbell, note 295 above; W Brown, ‘A Consideration of Custom and Practice’ (1972) 10 BJIR 42 and M Terry, ‘The Inevitable Growth of Informality’ (1977) 15 BJIR 76. 307. See 5.67. 308. See 6.10. 309. See 7.9 and 7.10. 310. See 3.25, 5.23 and 5.24. 311. See 6.24 and Quinn v Calder Industrial Materials Ltd [1996] IRLR 126 at 128. 312. See 8.24 and French v Barclays Bank, note 283 above. 313. See 5.31. 314. Hagen v ICI Chemicals and Polymers Ltd [2002] IRLR 31; Duke v Reliance Systems Ltd, note 274 above, at 452–3; Quinn v Calder Industrial Materials Ltd, note 311 above, at 128; Albion Automotive Ltd v Walker [2002] EWCA 946 at [10]–[18]; Donelan v Kerrby Constructions Limited [1983] ICR 237 at 240 and Hussain v Surrey and Sussex Healthcare NHS Trust, note 175 above, at [148]–[153]. 315. D Brodie, ‘Reflecting the Dynamics of Employment Relations: Terms Implied from Custom or Practice and the Albion Case’ (2004) 33 ILJ 159 at 160–3. 316. See 6.26–6.36. 317. See 5.77. 318. See 5.69. 319. See 5.69. 320. See 5.72. 321. See 5.70 and 5.73. 322. Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95; (2002) 187 ALR 92 at [24] and Australian Woollen Mills Pty Ltd v Commonwealth (1954) 92 CLR 424 at 457. 323. Ireland v Johnson (2009) 189 IR 135; [2009] WASCA 162 at [41]–[47]. 324. Section 136 of the Fair Work Act sets out the matters that can be included in modern awards. 325. Department of Education, Employment and Workplace Relations, Trends in Federal Enterprise Bargaining, March Quarter 2011. These figures merge together enterprise agreements made under the Fair Work Act with collective agreements of various sorts made under the WR Act.

326. See s 172 of the Act and McLennan v Surveillance Australia Pty Ltd, note 73 above, at [42] analysing the analogous position of AWAs under the WR Act; Regional Express Holdings Ltd v Clarke (2007) 165 IR 251; [2007] FCA 957 at [44]–[56]. 327. McLennan v Surveillance Australia Pty Ltd, note 73 above, at [43] and [54]. 328. See J Fetter and R Mitchell, ‘The Legal Complexity of Workplace Regulation and Its Impact upon Functional Flexibility in Australian Workplaces’ (2004) 17 AJLL 276. 329. Regional Express Holdings Ltd v Clarke, note 326 above, at [41]. 330. Byrne v Australian Airlines Ltd, note 2 above, CLR at 426–9 and 453–7; ALR at 431–3 and 452– 5; NTEIU v University of Wollongong [2002] FCA 31 at [38]–[39] and United Firefighters’ Union of Australia v Country Fire Authority (2007) 164 IR 169; [2007] FCA 853 at [32] (aff’d [2007] FCAFC 169). 331. Byrne v Australian Airlines Ltd, note 2 above, CLR at 455; ALR at 454. 332. Amalgamated Collieries of WA Ltd v True, note 143 above (rev’d on other grounds (1940) 62 CLR 451); Byrne v Australian Airlines Limited, note 2 above, CLR at 421; ALR at 427 and Visscher v Guidice (2009) 239 CLR 361; 258 ALR 651 at [71]. 333. Josephson v Walker (1914) 18 CLR 691 at 700–1; Byrne v Australian Airlines Ltd, note 2 above, CLR at 421; ALR at 427; Textile, Clothing and Footwear Union of Australia v Givoni Pty Ltd (2002) 121 IR 250; [2002] FCA 1406 at [23]–[33]; O’Shea v Heinemann Electric Pty Ltd (2008) 172 FCR 475; (2008) 178 IR 394 at [42]; Kidd v Savage River Mines (1984) 6 FCR 398 at 409– 410; 9 IR 362 at 370–2; Walsh v Commercial Travellers’ Association of Victoria [1940] VLR 259 at 262–3 and 268–9 and Amcor Ltd v Construction, Forestry, Mining and Energy Union [2003] FCAFC 57 at [34] and on appeal in (2005) 222 CLR 241; 214 ALR 56; 138 IR 286 at [144]. 334. O’Shea v Heinemann Electric Pty Ltd, note 333 above, at [42] and Metropolitan Health Service Board v Australian Nursing Federation (2000) 99 FCR 95; 176 ALR 46; 98 IR 390 at [25]. On accord and satisfaction, see 6.50. 335. Metropolitan Health Service Board v Australian Nursing Federation, note 334 above, at [20]– [21]; Kidd v Savage River Mines, note 333 above, FCR at 409; IR at 370–1; Jackson v Monadelphous Engineering Associates Pty Ltd [1997] IRCA 281; Ace Insurance Ltd v Trifunovski [2011] FCA 1204 at [135]–[143]; Walsh v Commercial Travellers Association of Victoria, note 333 above, at 263 and Textile, Clothing and Footwear Union of Australia v Givoni Pty Ltd, note 333 above, at [26]–[32]. See also Fair Work Act Pt 2-1. 336. Metropolitan Health Service Board v Australian Nursing Federation, note 334 above, at [21] and Ace Insurance Ltd v Trifunovski, note 335 above, at [135]–[143]. 337. See Fair Work Act ss 64, 93, 94, 115, 129 (and Fair Work Regulations 2009 (Cth) reg 2.03), 144, 202 and 203 and 324. 338. McLennan v Surveillance Australia Pty Ltd, note 73 above, at [49], [55]–[56] and Regional Express Holdings Ltd v Clarke, note 326 above, at [56]. These cases were decided about an AWA under the WR Act but are equally applicable to enterprise agreements under the current Act. 339. James Turner Roofing Pty Ltd v Peters, note 339 above, at [21] (1) and [45]. 340. Australian & New Zealand Banking Group Ltd v Finance Sector Union of Australia (2001) 111 IR 227; [2001] FCA 1785 at [48]; Poletti v Ecob (No 2) (1989) 31 IR 321 at 332–3; O’Shea v Heinemann Electric Pty Ltd, note 333 above, at [45]–[48] and James Turner Roofing Pty Ltd v

Peters, note 339 above, at [21] (2). 341. Australian & New Zealand Banking Group Ltd v Finance Sector Union of Australia, note 340 above, at [48] and [51]. 342. Australian & New Zealand Banking Group Ltd v Finance Sector Union of Australia, note 340 above, at [49]; Ray v Radano [1967] AR (NSW) 471 at 478–9 and James Turner Roofing Pty Ltd v Peters, note 339 above, at [21](2). See also Pacific Publications Pty Ltd v Cantlon (1983) 4 IR 415 at 421 (payment of bonus on termination was not a payment of notice). 343. Lynch v Buckley Sawmills Pty Ltd (1984) 3 FCR 503 at 509; 9 IR 469 at 265 and Textile, Clothing and Footwear Union of Australia v Givoni Pty Ltd, note 333 above, at [60]–[65]. 344. O’Shea v Heinemann Electric Pty Ltd, note 333 above, at [49] and [56]; see 3.5. 345. James Turner Roofing Pty Ltd v Peters, note 339 above, at [21] (3). 346. Poletti v Ecob (No 2), note 340 above, at 332–3; Australian & New Zealand Banking Group Ltd v Finance Sector Union of Australia, note 340 above, at [48]–[49]; O’Shea v Heinemann Electric Pty Ltd, note 333 above, at [42]; Pacific Publications Pty Ltd v Cantlon, note 342 above, at 421; Logan v Otis Elevator Co Pty Ltd, note 295 above, at [30]; James Turner Roofing Pty Ltd v Peters, note 339 above, at [23]–[29]; Textile, Clothing and Footwear Union of Australia v Givoni Pty Ltd, note 333 above, at [60]–[65]. On accord and satisfaction, see 6.50. 347. National Insurance Co of New Zealand Ltd v Espagne (1961) 105 CLR 569 at 573 and 599; Redding v Lee (1983) 151 CLR 117 at 125, 135–8, 145–6 and 151–2; Zheng v Cai (2009) 239 CLR 446; 261 ALR 481 at [29]: see 14.119–14.120. 348. Marks v The Commonwealth (1964) 111 CLR 549 at 573–4. It is doubtful whether such a common law power continues to exist. 349. Marks v The Commonwealth, note 348 above, at 586; Coutts v Commonwealth (1985) 157 CLR 91 at 101–3, 119–20; 59 ALR 699 at 706–7 and 719–20 and Jarrett v Commissioner of Police (NSW), note 205 above, at [58] at [6]. 350. Hunkin v Siebert (1934) 51 CLR 538 at 541 and Slingsby’s case (1680) 3 Swanst 178; 36 ER 821. 351. Jarrett v Commissioner of Police (NSW), note 205 above, at [10]. 352. On the Crown’s power to dismiss see 11.30; on the Crown’s power to suspend see 9.60. 353. See 11.29–11.30. 354. Jarrett v Commissioner of Police (NSW), note 205 above, at [58]. This proposition and its exceptions are discussed in 11.29. 355. Director-General of Education v Suttling (1987) 162 CLR 427 at 437–8; 69 ALR 193 at 200 and McVicar v Commissioner for Railways (NSW) (1951) 83 CLR 521 at 527. 356. Australian Telecommunications Commission v Hart, note 207 above, at 170 and 172; Bayley v Osborne, note 207 above, at 145 (implied term to obey lawful and reasonable orders implied into contract of employee despite extensive regulation of employment relationship in the Act). 357. Chapman v Commissioner, Australian Federal Police (1983) 50 ACTR 23 at 33; Enever v R (1906) 3 CLR 969 at 975; Minister of Agriculture and Fisheries v Matthews [1950] 1 KB 148; [1949] 2 All ER 724; Rhyl Urban District Council v Rhyl Amusements Ltd [1959] 1 All ER 257; [1959] 1 WLR 465; Council of Shire of Sutherland v James [1963] 63 SR (NSW) 273 and Attorney-General for Ceylon v Silva [1953] AC 461.

358. See 11.31. 359. Byrne v Australian Airlines Limited, note 2 above, CLR at 419–21; ALR at 425–7. See also Josephson v Walker, note 333 above, at 700; Arthurson v State of Victoria, note 93 above, at [217] and G Tolhurst and J Carter, note 234 above, at 76–7. The court in Byrne dealt with earlier authority that occasionally suggested that awards might be imported by statute; see, for example, Amalgamated Collieries of WA Ltd v True, note 143 above, at 431; Mallinson v Scottish Australian Investment Co Ltd, note 97 above and R v Gough; Ex parte Meat and Allied Trades Federation of Australia (1969) 122 CLR 237 at 246. 360. Josephson v Walker, note 333 above, at 701; Construction, Forestry, Mining and Energy Union v Gordonstone Coal Management Pty Ltd (1997) 78 FCR 437 at 441; ACTEW Corporation Ltd v Pangallo (2002) 127 FCR 1; [2002] FCAFC 325 at [34]–[35] and McAleer v University of Western Australia (No 3), note 73 above, at [74]. 361. See Fair Work Act s 545. 362. Akmeemana v Murray, note 42 above, at [35]; cf Macauslane v Fisher and Paykel Finance Pty Ltd [2003] 1 Qd R 503; [2002] QCA 282 at [29]–[30]. 363. See, for example, Automatic Fire Sprinklers v Watson (1946) 72 CLR 435; Minimum Conditions of Employment Act 1993 (WA) s 5(1) considered in Garbett v Midland Brick Co Pty Ltd (2003) 129 IR 270; [2003] WASCA 36 at [91]–[94] and the Pacific Island Labourers Act 1880 (Qld) considered in Young v Tockassie (1905) 2 CLR 470. 364. See 5.50, 5.54 and 5.61. 365. Australian Timber Workers Union v Monaro Sawmills Pty Ltd (1980) 29 ALR 322 at 326–7; Gregory v Philip Morris Ltd (1988) 80 ALR 455 at 480 and Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots, note 154 above, at 678. See also Moxham v Henderson [1981] 2 NSWLR 282 at 285. 366. See 5.11, 5.49, 5.50, 5.61 and 5.71. 367. Young v Canadian Northern Railway Company, note 145 above, at 89 and Christie v Qantas Airways Ltd, note 247 above, ALR at 30; IR at 258 (rev’d (1998) 193 CLR 280; 152 ALR 365). 368. Tibaldi Smallgoods v Rinaldi (2008) 172 IR 86; [2008] VSC 112 at [46]–[52]. 369. Young v Canadian Northern Railway Company, note 145 above, at 88–9; Ryan v Textile Clothing and Footwear Union of Australia, note 145 above, at 260; Reilly v Praxa Ltd, note 146 above, at [28] and G Tolhurst, note 9 above, at 711. 370. Christie v Qantas Airways Ltd, note 247 above, ALR at 30; IR at 258 (footnotes omitted) (rev’d (1998) 193 CLR 280; 152 ALR 365). 371. See 5.34–5.44. 372. Alexander v Standard Telephones & Cables Ltd (No 2), note 140 above, at 293 and Marley v Forward Trust Limited, note 141 above. 373. Honeyman v Nhill Hospital, note 142 above, at 147 and Tucker v Pipeline Authority, note 142 above, at 122. 374. Alexander v Standard Telephones & Cables Ltd (No 2), note 140 above, at 292 and Byrne v Australian Airlines Limited, note 2 above, CLR at 438–9; ALR at 440–1: see 3.5. 375. Australian Workers’ Union v BHP Iron-Ore Pty Ltd, note 42 above, at [252] and Johnson v Unisys Limited, note 159 above, at [60]–[66].

376. True v Amalgamated Collieries of WA Ltd, note 143 above, at 455–6; see also Tucker v Pipeline Authority, note 142 above, at 122 (incorporation of statute by reference). 377. These issues are discussed in more detail in 5.30. 378. See, for example, cl 5 of the Building and Construction General On-site Award 2010, which states: ‘The employer must ensure that copies of this award and the NES are available to all employees to whom they apply either on a noticeboard which is conveniently located at or near the workplace or through electronic means …’. 379. McCreadie v Thomson & MacIntyre (Patternmakers) Ltd, note 121 above, at 1137; see also Ajax Cooke Pty Ltd v Nugent (1993) 5 VIR 551 at 557–8. 380. See 5.94 and 5.95. 381. Byrne v Australian Airlines Limited, note 2 above; cf Re Pacific Coal Pty Ltd; Ex parte CFMEU, note 223 above, at [120] and Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots, note 154 above, at 678. On terms implied in fact, see 5.53–5.65. 382. Byrne v Australian Airlines Limited, note 2 above, CLR at 442; ALR at 443–4. See also Christie v Qantas Airways Ltd, note 247 above, ALR at 43–4; IR at 273 (rev’d (1998) 193 CLR 280; 152 ALR 365). 383. See 3.47. Wilton v Coal & Allied Operations Pty Ltd (2007) 161 FCR 300; 162 IR 264; [2007] FCA 725 at [128] and [184] and Goldburg v Shell Oil Co of Australia Ltd (1990) 95 ALR 711 at 712. 384. See Fair Work Act 2009 (Cth) Pt 2-2 and 8.2–8.12. 385. Byrne v Australian Airlines Limited, note 2 above, CLR at 442; ALR at 442 and 443–4. 386. Young v Canadian Northern Railway Company, note 145 above, at 88–89; Ryan v Textile Clothing and Footwear Union of Australia, note 145 above, at 260; Reilly v Praxa Ltd, note 146 above, at [28]; General Re-insurance Corporation v Forsakringsaktiebolaget Fennia Patria, note 292 above, at 874; Burgess v Mount Thorley Operations Pty Ltd, note 155 above, at 428–9 (past compliance with award obligations does not provide a basis for the conclusion that there was a custom to the same effect); Tibaldi Smallgoods v Rinaldi, note 368 above, at [46]–[52] (application of redundancy agreement to other employees did not give rise to a custom) and Meek v Port of London Authority, note 294 above, at 421. 387. Byrne v Australian Airlines Limited, note 2 above, CLR at 423–4; ALR at 428–9 and 440. 388. Australian Bureau of Statistics, Australian Labour Market Statistics, July 2011, Cat no 6105.0 and Department of Education, Employment and Workplace Relations, Trends in Federal Enterprise Bargaining, March Quarter 2011. 389. See, for example, Manuel v Pasminco Cockle Creek Smelter Pty Ltd, note 295 above, at 137–8 and 156. Industrial regulation in the County of Yancowinna has always been sui generis. 390. Electrolux Home Products Pty Ltd v Australian Workers’ Union (2004) 221 CLR 309; 209 ALR 116 at [103] and [154]; Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission (2001) 203 CLR 645; 178 ALR 61 at [31]; United Firefighters’ Union of Australia v Metropolitan Fire and Emergency Services Board (2003) 198 ALR 466; 123 IR 86 at [54]–[63] and J C Williamson Ltd v The Musicians Union of Australia (1912) 15 CLR 636 at 644 and 648–9 (overruled on a different point in (1913) 17 CLR 261). 391. See, for example, CEPU v Corke Instrument Engineering (Australia) Pty Ltd (2005) 223 ALR 480; [2005] FCA 799 at [9] and Downe v Sydney West Area Health Service (No 2) (2008) 71 NSWLR 633; 174 IR 385 at [255]–[258].

392. In Australian Meat Industry Employees’ Union v Frugalis Pty Ltd, note 246 above the Full Court of the Supreme Court of Queensland decided, with little analysis, that a union-employer unregistered agreement was enforceable as a contract by the employer. 393. See 3.28. 394. Ryan v Textile Clothing and Footwear Union of Australia, note 145 above, at 269–72. If the union, employee and the employer are all parties to the contract and the union and employee are joint promisees, then consideration need not move from both the union and the employee: Coulls v Bagot’s Executor and Trustee Co Ltd (1967) 119 CLR 460 at 478–9, 486 and 493. 395. Lee v GEC Plessey Telecommunications [1993] IRLR 383 at 389 and Ajax Cooke Pty Ltd v Nugent, note 379 above, at 557–8. 396. See 6.34. 397. Lee v GEC Plessey Telecommunications, note 395 above, at 389; Williams v Roffey Bros Ltd [1991] 1 QB 1 at 16; 1 All ER 512 at 522; Whitney v Monster Worldwide Limited [2009] EWHC 2993 at [150]–[153] (aff’d [2010] EWCA Civ 1312) and Jones v TRW Ltd [2007] EWHC 1091 at [68]–[70]. 398. Re William Porter & Co Ltd [1937] 2 All ER 361 (although this decision may have been based on an estoppel). 399. See 3.40 and Administrative & Clerical Officers’ Association v Commonwealth and Minister for Industrial Relations (1979) 26 ALR 497; Public Service Association (SA) v Commissioner for Public Employment (1994) 54 IR 367 and G Tolhurst, note 9 above, at 725–6. 400. See A Stewart and J Riley, ‘Working around Work Choices: Collective Bargaining and the Common Law’ (2007) 31 MULR 903 at 923. 401. United Firefighters’ Union of Australia v Metropolitan Fire and Emergency Services Board, note 390 above, at [75]; see also John Holland Group Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2010) 198 IR 439; [2010] VSC 322 at [14], [15]. 402. Australian Agricultural Company Ltd v Federated Engine-Drivers and Firemen’s Association of Australasia (1913) 17 CLR 261 at 273 and 289. 403. Ryan v Textile Clothing and Footwear Union of Australia, note 145 above, at 272. 404. Ryan v Textile Clothing and Footwear Union of Australia, note 145 above, at 273 per Hayne JA. 405. See 3.40. 406. Ryan v Textile Clothing and Footwear Union of Australia, note 145 above, at 271 per Hayne JA. 407. See, for example, Ryan v Textile Clothing and Footwear Union of Australia, note 145 above, at 271 per Hayne JA and Australian & International Pilots Association v Qantas Airways Limited, note 260 above, at [82]–[94] (agreement between union and employer about ‘non-pertaining provisions’ was intended to be legally binding). 408. See National Coal Board v National Union of Mineworkers, note 171 above, at 757–60; Ford Motor Co Ltd v Amalgamated Union of Engineering & Foundry Workers [1969] 2 All ER 481; [1969] 2 QB 303; Rodwell v Thomas [1944] KB 596 at 601; Burke v Royal Liverpool Hospital NHS Trust, note 163 above, at 738; Parke v Daily News Ltd [1962] 2 All ER 929 at 938 and R Lewis, ‘Collective Agreements: The Kahn-Freund Legacy’ (1979) 42 MLR 613. 409. Wilson v Darling Island Stevedoring & Lighterage Co Ltd (1956) 95 CLR 43 at 56, 67 and 80 and Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 165 CLR 107 at 114–15

and 143; 80 ALR 574 at 578 and 587–8; see 3.62. 410. Trident General Insurance Co Ltd v McNiece Bros Pty Ltd, note 409 above, CLR at 123–4 and 172; ALR at 585 and 621. In some jurisdictions there have been statutory reforms permitting third party enforcement of certain contracts. See Law of Property Act 2000 (NT) s 56; Property Law Act 1974 (Qld) s 55; Property Law Act 1969 (WA) s 11. See also A Stewart and J Riley, ‘Working around Work Choices: Collective Bargaining and the Common Law’ (2007) 31 MULR 903 at 923. 411. Coulls v Bagot’s Executor and Trustee Co Ltd, note 394 above; Beswick v Beswick [1968] AC 58; [1967] 2 All ER 1197 and Winterton Constructions Pty Ltd v Hambros Australia Ltd (1991) 101 ALR 363 at 368. 412. Wilson v Darling Island Stevedoring & Lighterage Co Ltd, note 409 above, at 56, 67 and 80, and Trident General Insurance Co Ltd v McNiece Bros Pty Ltd, note 409 above, CLR at 114–15 and 143; ALR at 578 and 587–8; see 3.61. 413. The principles governing agency are discussed in 3.70–3.85. 414. See Boxfoldia v National Graphical Association (1982) (NGA) [1988] ICR 752 at 757–8 and G Tolhurst, note 9 above, at 730. 415. See, for example, Edwards v Skyways Ltd [1964] 1 All ER 494; Harris v Richard Lawson Autologistics Ltd [2002] ICR 765 at 769–72 (shop steward had apparent or ostensible authority to agree to a variation of the employment contracts of members); Holland v London Society of Compositors (1924) 40 TLR 440 and Burton Group Ltd v Smith [1977] IRLR 351 at 353. 416. Ryan v Textile Clothing and Footwear Union of Australia, note 145 above, at 238–9 per Brooking JA and 266–9 per Hayne JA. 417. Ryan v Textile Clothing and Footwear Union of Australia, note 145 above, at 239–43 and 266–9; Fratangelo v Secretary to the Department of Health & Community Services (VSC, BC9803039, Harper J, 3 July 1998, unreported) at 15–16. See Singh v British Steel Corp [1974] IRLR 131 (effect of collective agreement on the employment conditions of non-union members). 418. Some federal unions deal with the matter specifically in their rules (which form a contract with the member). For example, the Health Services Union’s rules state: ‘by becoming and/or remaining a member of the union each member agrees that he/she appoints the Union as his/her agent for the purpose of negotiating and agreeing his/ her terms and conditions of employment’. 419. See Coulls v Bagot’s Executor and Trustee Co Ltd, note 394 above, at 501–2 and Trident General Insurance Co Ltd v McNiece Bros Pty Ltd, note 409 above, CLR at 118–9; ALR at 581. 420. Coulls v Bagot’s Executor and Trustee Co Ltd, note 394 above, at 478 and 503; Trident General Insurance Co Ltd v McNiece Bros Pty Ltd, note 409 above, CLR at 119–20; ALR at 582; Beswick v Beswick, note 411 above, AC at 90, 91 and 102; Dome Resources NL v Silver (2008) 72 NSWLR 693; [2008] NSWCA 322 at [54]; R Meagher et al, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies, 5th ed, LexisNexis Butterworths, Australia, 2007, pp 661–2. 421. For a further discussion of this rule, see I Spry, The Principles of Equitable Remedies, 6th ed, Lawbook Company, Sydney, 2001, pp 56–9; S Hepburn, ‘Specific Performance’ in P Parkinson (ed), The Principles of Equity, 2nd ed, Lawbook Company, Sydney, 2003, pp 591–2 and G Jones and W Goodhart, Specific Performance, 2nd ed, Butterworths, London, 1996, pp 15–8. 422. See 5.104. 423. See 15.12.

424. See 5.105. 425. This concept is discussed in greater detail in A Stewart and J Riley, ‘Working Around Work Choices: Collective Bargaining and the Common Law’ (2007) 31 MULR 903 at 924–7.

[page 286]

Chapter 6 Alteration of the Contract Introduction and Overview Alterations in Accordance with the Contract Express powers to unilaterally alter the parties’ obligations Managerial prerogative and the alteration of the manner of the performance of work Exercise of a right to terminate and notices to vary Demotion and changes to remuneration, status and duties Changing the location of the employment Variation of the Contract Elements of a variation Acceptance Consideration: the orthodox approach The rule in Stilk v Myrick Existing and additional duties Continued employment, forbearance and practical benefits Variation Distinguished from other Alterations Novation Assignment of rights and obligations Election Comment on unilaterally imposed changes Release, accord and satisfaction, and cancellation

[page 287]

INTRODUCTION AND OVERVIEW 6.1 This chapter deals with alterations in the terms and manner of the performance of the contract. Two of the distinguishing features of employment contracts are particularly important in this field. First, the employer has the right to control the employee, being ‘the power, not only to direct what work the [employee] is to do, but also to direct the manner in which the work is done’.1 An employee is obliged to obey lawful and reasonable orders.2 The lawfulness of the order depends, in part, on the job the employee has been engaged to perform. The right to control only exists in relation to the performance of duties that are within the scope of the contract: see 7.6–7.11. The second distinguishing feature is that employment contracts tend to be long-term contracts. Although on formation of the contract the terms appear static, the parties usually contemplate that over the course of the relationship the wages and perhaps other employment conditions will improve, even in the absence of promotions. Changes often occur in other working arrangements, whether it be the duties of the employee or the methods by which work is performed: see 1.11. In approaching issues concerning the alteration of the terms of the contract and the manner of its performance, the law does, to an extent, give effect to its dynamic nature. For example, the law permits the employer considerable flexibility in altering the methods of the performance of work,3 and although the law insists that the parties meet each of the elements before giving contractual force to a variation, it has developed techniques to readily infer that they are satisfied when dealing with beneficial improvements in working conditions.4

The various doctrines governing the legal regulation of change 6.2 There are a series of mechanisms by which the law gives effect to alterations to the obligations created by the contract and its methods of performance. Many of the cases in this field concern unilateral changes

imposed by the employer on the employee. Such changes may bear many different legal complexions which have different legal consequences.5 As detailed in this chapter, the legal consequences of a unilateral change imposed by an employer depend on whether it is the exercise of a [page 288] power granted by the contract to amend the contract, the exercise of the employer’s managerial prerogative granted by the contract, an offer to vary, the exercise of a right to terminate and offer to re-employ on amended terms, an offer to novate, a repudiation or a serious breach. An alteration in the obligations under the contract or the performance of those obligations without a change in the terms of the contract can occur by one of at least three means. First, a contract may grant an express power to one party to alter the obligations under the contract. This most often arises when the employer alters a document incorporated by reference into the contract, such as a policy manual. There are limits on the exercise of such powers: see 6.6–6.8. Second, the employer has an implied power to alter some of the employee’s obligations, particularly concerning the method of the performance of work and when dealing with emergencies: see 6.9–6.12. This power might be described as the power of control or the managerial prerogative. The scope of the power is limited by the terms of the contract. The existence and limits of this power concerning changes to the employee’s status, duties, remuneration and location of employment are discussed below at 6.14–6.20. Third, a party may exercise a right to terminate the contract and re-contract on amended terms. This right can be exercised by the giving of notice to terminate, or the exercise of a right to terminate as a consequence of the other party’s repudiation or serious breach. In the absence of such steps (or an express power to do so), one party cannot validly unilaterally alter the obligations by giving notice to the other of an intention to vary the contract: see 6.13. A party will usually commit a serious breach of the contract, or repudiate its obligations, when it implements a non-consensual alteration without an express or implied power or right to do so.6 6.3 There are a series of other mechanisms by which the parties can unilaterally or bilaterally alter their obligations by agreeing to change the

terms of the contract or by terminating it. First, the obligations of the parties may change as the result of a variation of the terms of the contract. A variation requires an agreement between the parties that usually arises as the result of the acceptance of an offer: see 6.21–6.22. The acceptance can be inferred from the conduct of the employee, a factual issue that is sometimes difficult to resolve where acceptance is said to be inferred from the continued employment: see 6.23–6.25. The variation must be [page 289] supported by consideration. There have recently been significant changes to the law concerning the consideration required to support variations. The changes have resolved some of the problems that have arisen from a strict application of general contractual principles to longer term, dynamic contracts like employment contracts: see 6.26–6.36. Second, the parties may novate the contract by consensually terminating it and replacing it with another. This is the most common mechanism used to effect a change when an employee is promoted: see 6.37–6.39. Third, obligations and rights may also be altered by an assignment. There are limits on the assignability of personal rights and obligations in an employment contract: see 6.40–6.45. Finally, there are other mechanisms by which the rights of the parties can be altered, including estoppel, an election between inconsistent rights, release, accord and satisfaction, and the cancellation of the contract: see 6.46–6.50.

Differences between the various doctrines governing the legal regulation of change 6.4 Distinctions need to be drawn between these various mechanisms. A variation is a change in the terms of the employment contract. There must be agreement to vary those terms. When the contract is varied the terms of the contract remain the same, other than those that are varied, and the parties remain the same. The variation must be supported by consideration. In contrast, an alteration in accordance with the contract does not require agreement or consideration. It involves the exercise of a power granted by an existing term rather than a change in the terms themselves: ‘if an alteration is

imposed which falls within the four corners of the contract then there is not even a contractual variation, merely the exercise of a power conferred under the contract’.7 A novation necessarily involves a termination of the contract, not just a change in the contract’s terms. It requires agreement between the parties.8 An assignment alters the parties entitled to the benefit of the contract, but otherwise leaves the terms of the contract unaltered: see 6.40. Neither an estoppel nor election change the terms of the contract or the parties to it. Both limit the range of options of a party. They do not require offer, acceptance or consideration. 6.5 There are two terms that have been avoided in this text: ‘waiver’ and ‘acquiescence’. It has sometimes been suggested that a party can waive a right by unilaterally determining that it will not seek to enforce, [page 290] or rely on the right, in the future.9 Waiver, in the sense of abandonment or renunciation of a right or a contract, does not operate independently of the processes of election, variation and estoppel: Propositions expressed in terms of abandonment or renunciation of a right, like the proposition that a contractual condition inserted in a contract for the benefit of one party has been waived by that party, are statements of conclusion. They are not statements that reveal the process of reasoning which leads to the assignment of the chosen description.10

The use of the term ‘acquiescence’ in this field has similar problems. One meaning of acquiescence is as an element of the equitable defence of laches. That defence may apply when an equitable, but not a legal, right is being enforced. That defence has no relevance in the context of alterations of contractual rights.11 A second meaning of acquiescence refers to a party standing by when his or her rights are being violated. This conduct may give rise to a form of estoppel.12 Such conduct, coupled with continued performance of the contract, may in some contexts amount to an acceptance of an offer to vary, or an affirmation of the contract. The use of the word acquiescence, as with the term waiver, only serves to disguise the real issue of whether there has been a variation, an election to affirm or an estoppel.

ALTERATIONS IN ACCORDANCE WITH THE CONTRACT Express powers to unilaterally alter the parties’ obligations 6.6 Not all alterations to the manner in which an employment contract is performed, or to the benefits granted and detriments imposed by the contract, are variations of the contract. Some contracts expressly provide that the obligations created by some terms may be altered unilaterally by one party. As Reynolds JA has stated: It is well settled that it is not open to either party to a contract of service to change its terms by unilateral act. Nevertheless, the contract itself may

[page 291] provide by its terms whether express or implied, including those deriving from any applicable award, that an employee may be reclassified by the employer even if that involves a decrease in remuneration and a change of duties. Thus it is fundamental to determine what are the relevant terms of the contract.13

Courts are reluctant to construe a term to such an effect in the absence of clear and unequivocal language.14 Occasionally such a power has been held to be granted by the contract.15 In the absence of an express term it is always open for an employer to try to prove that a term should be implied granting the power to change terms by a unilateral act. However, it will be rare for such implied terms to meet the stringent tests applicable to terms implied in fact which demand, among other things, that the term be both reasonable and necessary.16

Alteration of documents incorporated by reference 6.7 Terms of the contract may be created through the incorporation of documents by reference, such as an agreement to be bound by the employer’s redundancy policy.17 The content of the incorporated document may be

controlled by one party, or both, or in some cases neither party. The effect of an alteration to the content of the incorporated document (or termination of the incorporated document) depends on the terms of the contract, particularly the bridging term that gives contractual force to the incorporated document.18 Where the parties have agreed that the obligations created by the contract will change to reflect the contents of the incorporated document, [page 292] as amended from time to time, then each change to that content is not a variation. Consequently fresh consideration is not necessary to support each new benefit created or detriment imposed.19 There is no need for the parties to reach a new agreement to vary each time there is an alteration in the incorporated document. Instead the bridging term will automatically give effect to the changes.20 For example, in National Coal Board v Galley the parties agreed that the employee’s roster would be governed by the collective agreement ‘for time being in force’. When the collective agreement changed, so did Mr Galley’s roster arrangements, despite the fact that he voted against the change.21

Implied limits on express powers to alter obligations 6.8 There are usually implied limits on an employer’s express power to unilaterally alter the benefits granted and detriments imposed by the contract. A power must be exercised conformably with the employer’s implied duty of mutual trust and confidence and the duty of good faith discussed in 8.13 and 8.28.22 Mansfield J has observed that the power of the employer: … to change its policies … from time to time would be constrained by an implied term that it would act with due regard for the purposes of the contract of employment … so it could not act capriciously, and arguably could not act unfairly towards the [employee]. It might also be a power which, by implication, must be exercised reasonably having regard to the nature of the contract and the entitlements which exist under it.23

It may be necessary to bring any changes to the attention of the employee.24 Any term that grants the employer power to unilaterally alter the terms of the contract must also not be too uncertain. In McCormick the

contract incorporated, by reference, the terms of the policy manual that was maintained by the employer. North J observed that ‘a purported [page 293] agreement which leaves the content of the agreement entirely at the discretion of one party is not contractual in nature’.25

Managerial prerogative and the alteration of the manner of the performance of work 6.9 There is an inherent flexibility within the contract of employment which allows the employer to alter, in a manner consistent with the other terms, the method of the performance of work, the type of work performed and, in some cases, the conditions under which work is performed. Within this area of inherent flexibility employers can implement non-consensual, unilateral changes. The scope of this area is difficult to define precisely. It will vary according to the terms of the contract and the nature of the employment. Ultimately the question is whether the particular contract gives the employer the right to make the particular changes that have been made.26 Courts ordinarily grant the employer considerable latitude when dealing with the manner in which work is performed. In Cresswell v Board of Inland Revenue the change was the computerisation of the work. The court noted that an employee is expected to adapt himself or herself to new methods and techniques introduced in the course of the employment. Walton J suggested that the question was whether the job ‘had suffered a sea change into something rich and strange’ or ‘whether it was the same job done in a different way’. The former would require the employee’s consent, while the latter would not.27

Obeying directions and the scope of the employment 6.10 Employees have an obligation to obey directions concerning the performance of the contracted work that are lawful, reasonable, consistent

with the terms of the contract and within the scope of the employment: see 7.12. A refusal to comply with such a direction may be a repudiation or serious breach by the employee.28 It is sometimes [page 294] suggested that the employee’s obligation to obey lawful and reasonable orders empowers the employer to require an employee to perform work outside the scope of the contract. This argument assumes the matter sought to be proved: [The employer’s counsel] … stressed not only that the various agreements required the firefighters to obey the lawful instructions of the employers, but that generally there was an obligation on an employee to obey his employer’s instructions and to co-operate in the work that the employer wished him to do. That of course is all uncontroversial, but the employer can only give instructions to his employee to do that which the contract requires the employee to do. Otherwise, it is not a question of the instruction being lawful or unlawful, but rather that the tasks are not open to the employer to require of his employee.29

The limits of the employer’s power to give directions that must be obeyed and thereby alter the work performed are defined in part by the scope of the employment. The scope of the employment depends on the nature of the employment, the express terms and the course of dealing between the parties: see 7.6–7.10. The express terms may confer the right to direct an employee to perform duties that the employee does not customarily perform.30 Informal practices may also develop among employees about the performance of work, such as lines of demarcation between various types of work or more substantive matters such as the equitable sharing of overtime. It is not clear whether such practices, knowingly endorsed or silently submitted to by the employer, can narrow the scope of the managerial prerogative.31 The withdrawal of benefits by an employer that are not conferred by the contract does not require the consent of the employee.32 6.11 Issues associated with the employer’s power to direct an employee and the scope of the employment sometimes arise in the context of an employee’s duty to invent.33 Not all employees have such a duty. The duty may arise from the terms of the engagement, the nature of the

[page 295] employee’s position or the work performed by the employee. The law recognises that the employer is entitled to the benefit of an invention when it sets the employee the task of solving a problem, and the employee solves the problem by making the invention.34 What is not clear is whether the duty to invent arises when the employee undertakes a task beyond the employee’s functions as defined in the contract but pursuant to an employer’s request. One approach to resolving this uncertainty is to acknowledge that functions may evolve over the course of employment thereby broadening the duty to invent.35 Another approach was suggested in Spencer Industries Pty Ltd v Collins. In that case the employee had a duty to sell products, not to invent them. However, the court found that there was ‘a residual area’ in which it was open to the employer ‘to direct him, whether expressly or implicitly, to use his technical skills to undertake additional duties’.36 The scope, and even the existence, of this residual area is not clear.

Dealing with exigencies 6.12 An employee may be required to perform work outside the scope of the contract to deal with exigencies. The conceptual foundation and boundaries of this part of the managerial prerogative are unclear. The existence of this area is supported by cases deciding that an employee could be required to obey a direction to perform work outside his or her contracted hours to deal with emergencies,37 that an agreed arrangement to work longer than the hours stipulated in the contract does not necessarily vary the contract and such an arrangement is terminable on reasonable notice by the employee,38 and that an employee can be [page 296] directed to change the location of the employment on a temporary basis to meet emergencies.39

Exercise of a right to terminate and notices to vary 6.13 The parties may alter the terms of a contract as the result of a valid termination of the former contract and the formation of a new contract. There are at least three mechanisms by which such a termination can be effected: 1. termination by agreement through a novation; 2. the exercise of a right to terminate in response to the serious breach or repudiation of the other party; and 3. termination by the exercise of a right to give notice. The first class is discussed in detail at 6.37. The second class is illustrated by Brackenridge v Toyota Motor Corporation Australia Ltd.40 The employee committed a serious breach justifying the termination of her contract. The employer terminated her contract and she was offered employment at a lower grade. The change in her duties was thereby effected by the exercise of rights by the employer, coupled with her consent to re-employment. The third class is where the employer gives valid notice of the intention to terminate the contract and offers to re-engage the employee on a new contract on altered conditions.41 This involves the termination of one contract and the formation of another. The giving of notice is ordinarily a right. Its exercise must be in clear and unambiguous terms.42 There is a significant difference between the giving of notice to terminate the contract and the giving of notice to alter its terms. There is no valid alteration when an employer merely gives notice to the employee of an intention to alter the terms of the contract. Any such notice to ‘vary’, [page 297] whether reasonable or not, does not change the terms of the contract in the absence of the employee’s agreement.43 An employer does not usually unambiguously exercise the right to give notice to terminate when it informs the employee that after a certain period the wages will be reduced, or that employment will only thereafter be offered

on the basis of changed conditions.44 For example, in Burdett-Coutts v Hertfordshire County Council the employees were sent a letter giving 12 weeks’ ‘formal’ notice of variations of their contracts. The variations were a reduction in pay. The letter said that ‘we hope you will continue in our service’. The court held that the letters were not a notice of termination of the contract coupled with an offer of re-employment; they were notices of unilateral variations, and were ineffective as the employees did not consent to the changes.45

Demotion and changes to remuneration, status and duties Express and implied rights to demote 6.14 A demotion of an employee is a reduction in the ‘rank’ or grade of the employee, usually coupled with a reduction in the employee’s responsibilities and remuneration. A demotion can have many different legal consequences. It may be the valid exercise of a power granted by an express term of the contract;46 it may be an election to accept a serious breach or repudiation thereby terminating the former contract and offering to enter into a new contract at a reduced rank;47 it may be a breach by an employer of the employee’s right to occupy a certain position under the contract and perform duties associated with that position;48 or it may be an alteration of the duties of the employee contemplated by the [page 298] contract and thereby within the scope of the managerial prerogative of the employer.49 Some contracts contain express terms permitting the employer to demote the employee.50 Statutes governing public sector employment also sometimes grant such express powers.51 The Crown’s common law right to dismiss an employee does not carry with it a power to demote.52 In the absence of an

express power to demote, a term will not usually be implied: Contracts of employment, generally speaking, are not rendered unworkable by the absence of a term which permits demotion or the exercise of some similar sanction as a disciplinary power by the employer. On the contrary, the common law has recognised that contracts of employment are workable without such a power.53

This is true even in cases where the employer does not reduce the remuneration of the demoted employee and only reduces the agreed ‘rank’ or grade of the employee.54 When confronted by a serious breach or repudiation an employer is in an all-or-nothing situation as it must either dismiss the employee or retain the employee without loss of contractual [page 299] rights.55 An employer can give a warning to an employee. As a matter of practice a warning does make the employment less secure as it increases the chance an employer will exercise a contractual right to give notice or terminate the contract in the future. The proof of prior justified warnings will be relevant in assessing whether an employee’s final breach amounts to a repudiation or serious breach: see 10.55–10.59. There is no clear demarcation between a demotion, which is impermissible without express power, and an alteration of the method of the performance of work, which is permissible without express power. As Doyle CJ has noted: [It] … will often be difficult to tell whether a change in what I will call the working arrangements has given rise to a new contract, to a variation of an existing contract, or merely represents a change to working arrangements which the employer is entitled to require under the terms of the original contract of employment. Obviously enough, the nature of the change in duties will be a relevant matter, and the more significant or substantial the change, the more likely a court is to conclude that there has been a variation of the contract and, ultimately, a new contract.56

Demotion as a breach of contract 6.15 In the United States it is a settled proposition that when an employee is engaged to fill a particular position any unjustified reduction of rank or material change in the agreed duties of the employee is a breach of the contract.57 If one appoints a person as a managing director, then it will be a breach to require the employee to perform the duties of a clerk. Corbin

expresses the proposition as follows: [An] … employee may have been promised a place of dignity and privilege, so that it is a breach of contract, and an essential one, to reduce him to an inferior status. One who has been hired to be superintendent or general sales manager would generally be justified in quitting if he is

[page 300] ordered to act as floorwalker or sales clerk, even though his salary is not reduced. Such an order would also be held to be a wrongful discharge by the employer.58

Similarly, Anglo-Australian cases support the view that serious, nonconsensual intrusions on and diminution of the employee’s responsibilities or status may be a serious breach or repudiation of the contract.59 Status in this sense refers to the relative standing of the employee, not necessarily a position of high dignity and privilege.60 This principle is illustrated in Westen v Union des Assurances de Paris. The employee was a claims manager for the New South Wales branch of the employer, with a personal secretary and a small staff who reported to him. He reported to the New South Wales manager, but had important powers to make the final decision over certain claims and an advisory role relating to some national claims. The employer reorganised the work and appointed the employee to a position with the same title and the same remuneration package. However, he was not the manager of all claims in New South Wales, he did not report directly to the branch manager, he did not have a personal secretary, or a team who reported to him, and his final decisionmaking powers and advisory role were taken from him. Madgwick J stated that, subject to one gloss, he agreed ‘that in the absence of a contract allowing it, the employer cannot force changes [of job or regrading] on an employee. An attempt to do so will involve [page 301] the employer in breach of contract if the [employee] presses her or his requirements’. His Honour further stated: The gloss is that this must not be taken to propound undesirable inflexibility: there must be some

reasonable give and take. In a rapidly changing world, it would be uncommon for the parties to a contract of employment to envisage no change in aspects of the job. But employers’ perceptions as to what are the important aspects of jobs they have promised employees and later wish to change may not coincide with the perceptions of the employees, nor of independent observers, such as courts to which the employees might, in due course repair. Serious, non-consensual intrusions upon the status or responsibilities, as well as upon the remuneration, attaching to a job may well be held to amount to a repudiation of the contract of employment, and their actuality will not be denied merely by the retention of the job’s title.61

Demotions and the managerial prerogative 6.16 It is suggested that in the case above Madgwick J was referring to an area of flexibility—the power to alter duties—which is a subset of the area of managerial prerogative discussed in 6.9–6.12. The scope of this area is uncertain. This aspect of the managerial prerogative may be broader towards the end of the employment, such as when trying to find an acceptable position for an employee whose position is redundant.62 In the absence of an express term, the right of an employer to unilaterally alter the duties of an employee depends to a significant extent on the definition of the position and duties in the contract. The ambit of the duties so defined may be broader than the duties the employee customarily performs.63 It is a breach to assign alternative, inconsistent duties to an employee appointed to fill a particular position, even in cases where there is no diminution in the grade or status of the employee.64 As Kitto J has stated: [page 302] The general rule is that a contract by which a person is employed in a specific character is to be construed as obliging him to render, not indeed all service that may be thought reasonable, but such service only as properly appertains to that character.65

There is a distinction, though perhaps a fine one, between a change in the method of performing the work and a change in the work itself.66 Where the duties are clearly defined in the contract then a relatively minor change in the scope and content of those duties may be a breach.67 An express term may permit the employer to significantly alter the duties of the employee.68 An employee who is directed to perform alternative duties and is uncertain

about his or her obligation to do so is in an invidious position. A refusal may be a serious breach, yet an agreement to perform alternative duties may result in the employer later alleging that the contract has been varied or relying on the alteration to allege that there was considerable flexibility within the contract to reassign duties. Where there is a dispute about the scope of the employee’s duties as defined in the terms of the contract then courts hesitate to find that the employee’s bona fide but erroneous construction evinced an intention to repudiate the contract.69 [page 303]

Changing remuneration as a breach of contract 6.17 There is no, or virtually no, area of managerial prerogative when dealing with reductions in the employee’s remuneration. Remuneration plays a central role in employment contracts: ‘[in] reality it is difficult to exaggerate the crucial importance of pay in any contract of employment’.70 A unilateral reduction in the employee’s remuneration is almost always a serious breach and a threat to do so in the future is almost always a repudiation.71

Changing the location of the employment 6.18 There are three closely associated issues that arise when considering an alteration to the place of employment.72 First, whether the employee’s obligation to obey orders extends to obeying a direction to change the place of employment. Second, whether there is an implied term of the contract that permits the employer to change the place of employment; and third, whether a direction to an employee to relocate, unauthorised by an express or implied term, will be a repudiation or a serious breach. An employer has no power to alter the location at which work is performed unless that power is granted by an express or implied term of the contract. A consideration of the express terms and the nature of the employment may support an implicit term permitting relocation.73 Where the power does exist, an exercise of the power is not a variation

[page 304] of a contract requiring the employee’s consent.74 Nor will an exercise of the power be a repudiation or breach by the employer,75 subject to compliance with any implied limitations requiring the employer to exercise the power in good faith and in a manner consistent with the implied term of trust and confidence.76 6.19 There is no term implied by law into all employment contracts permitting the employer to change the location of the employment: ‘[it] is impossible to conceive of any fixed rule which will be equally appropriate to the case of, say, an employee of a touring repertory theatre and the librarian of the British Museum’.77 In the absence of an express term, if the evidence supports it, then a term may be implied in fact in accordance with the ordinary test,78 subject perhaps to two glosses mentioned below. There are often insurmountable problems in meeting that test. Rarely will such a term be necessary to give business efficacy to the contract, particularly if the contract has operated for an extended period without the need for such a term.79 A term will not be implied when it is inconsistent with an express term that explicitly or implicitly determines the location of employment: We cannot conceive that—in the absence of any express mobility clause — an education authority would have the right to direct a teacher who had been expressly engaged to work at school A to move on a permanent basis to school B, even if the work that he or she would be required to

[page 305] do at school B would be broadly similar and even if it were within easy travelling distance: however ‘suitable’ the transfer, it would simply not be within the terms of the agreement.80

An implied term permitting a transfer to a distant location is also unlikely to meet the requirement that the term be reasonable.81 6.20 Two glosses to the foregoing should be noted. First, notwithstanding the problems in meeting the ordinary test for the implication of terms, there must be some term governing the location of the employment.82 This has led to suggestions that a modification to the ordinary tests for the implication of

contractual terms should be adopted.83 Where mobility of employment is necessary most commonly courts imply a term that the employer may transfer the employee to ‘any place within reasonable reach of the employee’s home’.84 Where such a term is implied it will ordinarily not permit an employer to relocate the employee without reasonable notice of the change, the period of notice being related to the distance and the inconvenience of the move.85 All of the surrounding circumstances are taken into account in determining whether a term, and what term, should be implied, including the nature of the employment, the effect on the employee of the exercise of a power to transfer, the [page 306] parties’ previous peregrinations and, perhaps, evidence of pre-contractual negotiations.86 The second gloss is that there is support for the proposition that, in some rare cases, a term will be implied that permits an employer to transfer an employee to another location to meet business exigencies if three conditions are met: ‘namely that the work is suitable, that the employee suffers no detriment in terms of contractual benefits or status and that the change in duties is on a temporary basis’.87 A direction to an employee to change the place at which work is performed, unauthorised by an express or implied term, may be a repudiation, or a serious breach.88 The effect on the employee will be relevant in determining whether the breach or repudiation is sufficiently serious to justify the termination. A direction to move to the factory next door may not be sufficiently serious to justify termination, but a direction to move to the factory in the next suburb, or region, may justify an employee electing to terminate.89 An employee has a reasonable period to elect whether to affirm or terminate when there is a right to terminate. Courts are slow to infer an unequivocal election to affirm when an employee agrees reluctantly, or on a trial basis, to transfer the place of employment rather than be given notice or dismissed.90

[page 307]

VARIATION OF THE CONTRACT Elements of a variation 6.21 A variation is a change in the terms of a subsisting contract. The requirements for a variation are, subject to what is said below, the same as the requirements for the formation of the contract. There must be agreement (usually consisting of an offer and acceptance) and consideration, the terms of the variation must be certain and complete, and there must be intention to vary the contract.91 A party cannot unilaterally vary the terms of a contract.92 An employee is not obliged to agree to a variation proposed by the employer. The duty of cooperation, the duty of fidelity and the duty of good faith do not oblige the employee to agree to vary.93 Employment contracts tend to be dynamic. New terms supersede old. There may be identifiable moments when the obligations or the performance changes. However, duties are sometimes gradually changed over time and, in reality, the work being performed will evolve, like most relationships. Courts recognise that it is often difficult to fit the parties’ actions and discussions easily into the slots of ‘offer’, ‘acceptance’, ‘consideration’ and ‘intention to create a legal relationship’ which are the hallmarks of classical contract theory. Where the variation is said to be inferred from the conduct of the parties, the question is whether that conduct, viewed in the light of the surrounding circumstances, evidences a tacit agreement. The conduct of the parties, however, must be capable of proving all the essential elements of a variation.94 [page 308] 6.22 There are three issues concerning the variation of employment contracts that generate much litigation and conceptual confusion: 1. whether the employee has agreed to accept an offer to vary, and

particularly the effect of continued performance by the employee after an offer is received: see 6.23–6.25; 2. the relationship between variations and an election to affirm the contract in the face of a repudiation or serious breach: see 6.46–6.49; and 3. the role of consideration in the variation of employment contracts: see 6.30–6.36.

Acceptance 6.23 An acceptance is an unqualified and unequivocal assent to an offer.95 An employee may expressly accept an offer to vary. Acceptance may alternatively be inferred from the conduct of the employee.96 The mere silence of an employee will not constitute an acceptance. Silence is equivocal, being consistent with both acceptance and rejection of the offer.97 As Rothman J has observed: The employee does not consent to a variation of a contract (leaving aside issues of consideration and whether consideration other than the continuation of work is necessary) simply by not objecting to a document promulgated by an employer. The employee must either take some positive step or decline to take an objection in circumstances where objection would be necessary or at least expected. In other words, the employee must indicate acceptance of the document as a variation to her or his contract of employment. Receipt of a document, and non-objection thereto, of itself, does not amount to consent to the variation of a contract.98

There is no unqualified acceptance of the offer if the employee only consents to accept an offer for a trial period.99 However, an employee is [page 309] bound by an acceptance that is later regretted, unless one of the ordinary vitiating factors, such as fraud, negates the agreement.100

Inferring acceptance from continued employment 6.24 The conduct most commonly relied on to infer tacit acceptance is the continued employment of the employee without demur after receiving an offer from the employer. Whether that inference is available depends on the

terms and context of the offer, the conduct of the employee and all of the surrounding circumstances.101 Whether there has been an acceptance is a question of fact in each case.102 An offer will not be accepted when the employee unequivocally rejects the proposal and continues in employment. In Rigby v Ferodo Ltd the employer unilaterally reduced the employee’s wages by 5%. Mr Rigby protested and refused to consent to the change. Notwithstanding his position, his employer paid him the reduced wages and Mr Rigby continued to be employed. Eighteen months later Mr Rigby commenced proceedings to recover the unpaid 5% of his wages. The employer argued that the contract had been varied, or had been repudiated by the employer and the repudiation was accepted by Mr Rigby. The House of Lords decided: It has been submitted that there was some sort of implied acceptance on the part of Mr. Rigby of the appellant’s repudiation by working on. At the trial this was put on the basis of estoppel, waiver and acquiescence. All three were rejected by the trial judge and, in my judgment, he was, on the facts which he found, quite plainly right to reject them. I can, for my part, see no other basis upon which it can be argued that the continued working by Mr. Rigby and his acceptance for the time being and under protest of the wage that the appellant, with full knowledge of his lack of agreement, chose to pay him is to be construed as an acceptance by him either of the

[page 310] repudiation by the appellant of the original continuing contract or of the new terms which the appellant was seeking to impose.103

An acceptance need not be in bald terms.104 In Campbell v University of Adelaide the court found that the employee accepted the offer of a redundancy payment, even though he complained that he was entitled to a greater package.105 Whether there is an acceptance is a question of fact and, in this area, the determinations rely heavily on the context of the conduct. For example, in Irons v Merchant Capital Ltd the court held that the employee had accepted the offer of a pay rise, notwithstanding his protests about its size, when he had received and retained the benefit of the pay rise.106 In Henry v London General Transport Services the court held that the employee had accepted the offer as he had, despite some initial equivocation, worked for years under a

new arrangement without taking steps to enforce his rights.107 Acceptance is more likely to be inferred when the unilateral change concerns an entitlement which regularly affects the performance of the contract or the benefits enjoyed by the employee, such as reduced wages or changed hours of work. Conversely, continued employment is less persuasive evidence of acceptance when the unilateral change concerns an entitlement (such as redundancy payments, notice provisions or restraint of trade clauses) which does not regularly affect performance of the contract or the exercise of rights.108

Continued employment as an acceptance of a pay rise or pay cut 6.25 There is an apparent inconsistency between decisions that the employee’s continued employment is an unequivocal acceptance when the employer is offering an improvement in conditions, but not where the employer is offering a reduction in conditions.109 One possible [page 311] explanation is that there may be different tests for inferring acceptance. There is some ancient authority, supported by modern dicta, that an acceptance by an employee under financial pressure with no other practical option may not be a true acceptance: ‘necessitous men are not truly speaking free men’.110 It is suggested that there is a conceptually sounder explanation that rests in the objective approach to determining consent. As discussed in 3.5 and 3.19, in ascertaining whether an employee accepts an offer the court looks to the employee’s outward manifestations of the intention, not to his or her subjective intentions. In doing so, the court considers whether a reasonable person would conclude that the statements and conduct of the employee evinced an intention to accept the offer. The inquiry takes into account the subject matter of the agreement, the status of the parties to it, their relationship to one another, and other surrounding circumstances. When a pay rise has been offered, there are obvious reasons why a reasonable person would readily conclude that continued employment by an employee was an acceptance of the offer. Acceptance can be more easily inferred from the continued performance because no reasonable person would reject a pay rise

when he or she is giving up virtually nothing in exchange. In contrast, it is more difficult for a reasonable person to infer acceptance of a pay cut merely from continued employment as no reasonable person would give up something for nothing. Consistent with this approach, ‘the courts have rightly been slow to find that there has been a consensual variation where an employee has been faced with the alternative of dismissal and where the variation has been adverse to his interests’.111

Consideration: the orthodox approach 6.26 The law concerning the role of consideration in the variation of contracts is in a state of flux, particularly for long-term contracts such [page 312] as employment contracts.112 Courts have recently fashioned numerous ways of avoiding the injustice that can arise when strictly applying the orthodox principles to employment contracts. The orthodox approach is that sufficient consideration must move from each contracting party to support a valid variation of a contract, except when the variation is effected by a contract under seal.113 The consideration must satisfy the requirements discussed in 3.28–3.39: it must be lawful and certain, it need not be adequate and it must not be illusory. When the consideration provided by an employee is a promise to perform an existing duty the consideration is illusory as it is not ‘fresh’: The general rule is that a promise [by an employee] to perform an existing duty is no consideration, at least when the promise is made by a party to a pre-existing contract, when it is made to the [employer] under that contract, and it is to do no more than the [employee] is bound to do under that contract. The rule expresses the concept that the new promise, indistinguishable from the old, is an illusory consideration.114

This rule, often referred to as the rule in Stilk v Myrick,115 applies to employment contracts. Professors Hough and Spowart-Taylor have argued that the rule has fallen into desuetude in employment cases concerning the conferral of a benefit on an employee.116 With respect, this argument is not correct, as illustrated by the many Commonwealth cases that have examined

whether consideration was provided by an employee for the conferral of a benefit.117 [page 313] 6.27 According to the orthodox approach the fresh consideration must consist of ‘some act conferring a benefit on the employer or forbearance involving legal detriment118 to the employee, or the promise of such an act or forbearance’.119 The detriment may be a forbearance, loss or responsibility, given, suffered, or undertaken by the employee.120 Consideration may involve detriment (or a promise to suffer detriment) to the employee and does not require a direct or indirect benefit to the employer. For the consideration to be fresh it must not simply involve the promise to perform an existing duty. Swain v West (Butchers) Limited illustrates the operation of the rule concerning the need for fresh consideration. Mr Swain unwisely carried out the fraudulent commands of his supervisor. He owed a contractual duty to inform his employer of his supervisor’s wrongdoings when asked to do so. The chairman of the board promised Mr Swain that he would not be dismissed if he gave the board conclusive proof of the wrongdoings of his supervisor. Mr Swain then gave that proof. Mr Swain was rewarded with summary dismissal in breach of the chairman’s promise. The Court of Appeal held that the chairman’s promise was unenforceable. Mr Swain had not given fresh consideration for that promise; he had only agreed to carry out his existing contractual duty to provide requested information about the wrongdoings of other employees.121 [page 314]

Difficulties created by the rule in Stilk v Myrick 6.28 There are problems created by the rule in Stilk v Myrick, as is clear from the decision in Swain v West (Butchers) Limited. It has been said that ‘consideration is a trap for the unwary [and] is easily avoided by those who

understand how the law works’.122 The rule prevents parties achieving their mutual goals. It will sometimes result in courts refusing to enforce clear agreements without, in the absence of coercion of the employer, a compelling policy reason.123 Further, the rule appears to hinder a simple contractual explanation of a common phenomenon that occurs in almost all long-term employment relationships—the pay rise.124 According to the orthodox approach a promise by an employer to increase the pay (or otherwise improve the benefits) of an employee will not vary the contractual rights and obligations of the parties unless the employee provides fresh consideration for the additional pay by agreeing to suffer some detriment in the sense discussed in 6.27, such as performing an additional obligation, or refraining from exercising a right.125 There are various ways of characterising the fresh consideration provided by an employee who is the beneficiary of an employer’s promise to improve wages and conditions. The fresh consideration may consist of agreeing to perform additional duties, as often occurs when an employee is promoted: see 6.31. In other cases it may be continuing in employment and refraining from exercising a contractual right to terminate the contract by giving notice: see 6.33. The fresh consideration may consist of the conferral of a practical benefit on the employer, such as the benefit of continued service by a known employee and the avoidance of the detriment of having to obtain the services of a new employee; or it may be the abandonment, at least temporarily, by the employee of the argument that the pay rise should be greater than that granted: see 6.34. In some cases the alteration in obligations will be a novation or give rise to a promissory estoppel.126 [page 315] 6.29 The rule also creates a hindrance to explaining another phenomenon, as illustrated in Francis v Canadian Imperial Bank of Commerce. In that case the employee accepted a bare offer to commence employment at a certain rate and in a certain position. On the day he commenced he signed a document titled ‘Employment Contract’ which imposed a range of additional obligations on him. The Ontario Court of Appeal held that the changes the employer sought to effect by the written contract were not supported by fresh

consideration from the employer and consequently there was no valid variation of the contract.127

The rule in Stilk v Myrick 6.30 The existing rule discussed in 6.26 (namely that a promise to perform an existing duty is no consideration) has its genesis in Stilk v Myrick. Mr Stilk was a sailor. He entered into a contract whereby he agreed to journey from London to Kronstadt and return. He was paid £5 per month. He promised to do all he could in the case of emergencies arising during the voyage. At Kronstadt two of the ten hands deserted. The court held that this was an emergency contemplated by the contract. The captain could not find replacements. He promised Mr Stilk and the other sailors that if they remained with the ship and carried out their duties then they would share the wages of the two deserters on their return to England. Mr Stilk agreed. On his return, the captain reneged on the promise. The captain claimed, and the court agreed, that Mr Stilk had provided no additional consideration to support the promise for additional pay. All Mr Stilk had agreed to do was to carry out his duties under the contract. The rule in Stilk v Myrick is that a promise by an employee to perform his or her existing contractual duties is not good consideration to support additional promises made by the employer.128 The rule in Stilk v Myrick has a great capacity to wreak injustice in employment law. As noted in 6.28, it does appear to create a hindrance to explaining in contractual terms a pay rise that is not accompanied by a promotion, a common phenomenon that occurs in almost all long-term employment relationships. However, the rule does have one redeeming feature as it discourages extortion. Mr Stilk’s captain was faced with an emergency when some of the crew deserted. He might have agreed to almost anything to retain the continued support of his remaining crew. The high seas provided great opportunities for extortionate ‘renegotiation’ of contracts. Espinasse’s report of the decision in [page 316] Stilk v Myrick indicates that the decision of the court was based upon the

public policy ground of discouraging extortion, and not upon any lack of consideration.129 Whatever the true basis for the decision, the rule has, at least until recently, formed one of the cornerstones of the law of consideration.

Existing and additional duties 6.31 The general rule is that a promise by an employee to perform an existing duty is not fresh consideration. The rule does not apply where the consideration provided by the employee consists of a promise to perform duties in addition to those imposed by the existing contract. Agreeing to perform new duties or taking on additional obligations associated with a promotion will be fresh consideration.130 An employee who suffers a detriment in exchange for the promise provides good consideration. The detriment need not be substantial or in any way proportionate to the benefit acquired by the employee. In Betts v Brisbane Gas Co Ltd the employee worked for 14 years without a written contract. The parties then executed a written contract in which the employer promised additional benefits. The employer later alleged that Mr Betts provided no fresh consideration in exchange for those additional benefits. The court found that most of the obligations the written contract imposed on Mr Betts were indistinguishable from the obligations already imposed on him under his unwritten contract by terms implied by law. However, the court found that some of the obligations under the written contract were more onerous on Mr Betts and other terms imposed detriments on him (being an agreement not to compete with the employer during employment and additional grounds to summarily dismiss the employee). These additional obligations and [page 317] detriments were the consideration moving from the employee to support the promise made by the employer.131 There are some other qualifications to the existing duty rule. A promise to perform a contractual duty owed to a third person may be good

consideration.132 A bona fide compromise of a disputed claim may be good consideration.

Promises to perform an existing public duty 6.32 As a general proposition, a promise to perform an existing public duty is not fresh consideration, so a promise to obey a subpoena, or a parent’s promise to maintain a child, will not be good consideration.133 By analogy, it is arguable (subject to the validity of criticisms mentioned below) that an employer’s promise to provide benefits in accordance with an applicable industrial instrument will not be fresh consideration as the Fair Work Act 2009 (Cth) already imposes that obligation. Fresh consideration is provided where a party promises to exceed its public duty. For example, in Glasbrook Bros Ltd v Glamorgan County Council an employer sought the assistance of police to protect strike breakers. The police considered that the assistance sought was unnecessary. The employer agreed to pay the council for the services of the police and later sought to renege on the agreement by arguing that the council was under a public duty to provide the police for the protection of the strike breakers. The House of Lords held that the employer’s promise was enforceable because the council had promised to do more than what was required by its public duty, by providing the services of police in circumstances where it was unnecessary to do so.134 There has been some academic and judicial criticism of the rule that a promise to perform a public duty is not fresh consideration. Lord Denning thought that such promises should be enforceable in contract so long as they were not contrary to public policy.135 [page 318]

Continued employment, forbearance and practical benefits Refraining from giving notice as consideration

6.33 Fresh consideration can consist of forbearance by an employee. The employee provides consideration when he or she agrees to refrain from exercising a right against the employer. There is authority to support the proposition that employees whose contracts are terminable by notice and who continue in employment after agreeing to vary the terms are not merely performing an existing duty. Such employees may at any time exercise the right to give notice and terminate the contract. They are under no existing duty to refrain from doing so. Refraining from giving notice may be an act of forbearance and thereby be fresh consideration given by the employee. This issue arose in Ajax Cooke Pty Ltd v Nugent where the employer offered to make a redundancy payment in the event of a redundancy and the employee accepted that offer and continued in employment. Phillips J stated: The [employer] responded that, by continuing in employment, the [employee] was doing no more than he was already bound to do by his contract of employment, in the absence of any notice from him to terminate that employment. It was said that the [employee] was bound to continue working unless and until he gave notice to quit and that therefore his mere continuing in employment could not constitute consideration for the employer’s offer of the redundancy package. But I think this should be rejected. The [employee] was not bound to continue in his employment: even if the employee was bound by his existing contract not to quit his employment without giving due notice, he was not bound to continue in employment until retrenchment. By doing so in the belief that the package applied to him, he both accepted the offer made of further benefits upon retrenchment, and he gave consideration at the same time … in continuing in employment after the posting of the notice the [employee] was not doing only that which he was already bound by contract to do, and that therefore the [employee] is not defeated by the rule in Stilk v Myrick, even if strictly applied.136

[page 319] Such an approach in effect infers consideration from continued employment. That approach may be unavailable for employees engaged under fixed term contracts as they are under an existing duty to refrain from terminating the contract for the duration of the fixed term.137 In unilateral contracts the performance by the employee may be the consideration provided. In Derksen v WASA Insurance Co the employee was promised a bonus if she stayed in employment for four years. Performing the contract for four years was the consideration, the acceptance of the offer and the fulfilment of the condition precedent to the employer’s obligation to make

the payment. She did not need to rely on an act of forbearance as the consideration.138

Practical benefits and Williams v Roffey 6.34 In recent years courts have developed an exception to ameliorate the harsh effects of the rule in Stilk v Myrick. The decision in Williams v Roffey Bros Ltd concerned a building contract. There were difficulties with obtaining full performance of the contract and the builder was keen to ensure the contractor kept to the agreed construction schedule. The builder promised extra payments as an incentive. The contractor agreed to perform its obligations on time. The Court of Appeal upheld the contractor’s claim to recover the additional payments. The builder gained a practical benefit or advantage by means of the new arrangement. In the circumstances, this was sufficient consideration.139 Glidewell LJ stated that he considered this was a refinement and limitation on the rule in Stilk v Myrick. Others have argued that it is irreconcilable with [page 320] Stilk v Myrick which has now ‘for all practical purposes been rendered moribund’.140 Courts increasingly are accepting the proposition that fresh consideration may consist of some form of practical benefit acquired by the employer.141 The exact scope of this somewhat complex exception is not yet clear and it is in the process of being refined by the courts. One reformulation, adapted to apply to a pay rise, is as follows: Where, during the course of an employment contract, the employee’s performance having become doubtful, the employer promises the employee a pay rise to secure the employee’s performance, a practical benefit to the employer (or a detriment to the employee) is capable of being consideration for the employer’s promise, so long as a benefit to the employer as a result of the employee’s performance is worth more to the employer than any likely remedy against the employee, taking into account the cost to the employer of the payment. The employer’s promise of the pay rise will then be legally binding, provided that it was not made as a result of economic duress, fraud, undue influence or unconscionable conduct on the part of the employee nor induced as a result of unfair pressure on the part of the employee.142

An employer who grants a pay rise acquires a range of practical benefits as the consequence of the employee’s continued service. An employee who is known to the employer is more valuable than a stranger. Continued employment means that the employer will avoid the detriment of having to go to the trouble and expense of obtaining the services of a new employee.143 Where the employer has provided a pay rise in response to an individual or collective demand by or on behalf of an employee for improved conditions, the pay rise may ‘buy’ the employer some peace. The benefits gained by the employer may include abandonment, at least temporarily, by the employee of the argument that the pay rise should be [page 321] greater than that granted and the avoidance of possible disputation.144 The pay rise may also allow the employer to plan for the future, more secure in the knowledge that its inducement will minimise the turnover of its workforce.

Comment on evading the rule in Stilk v Myrick 6.35 As noted in 6.26–6.29, a strict application of the rule in Stilk v Myrick does appear to create a hindrance to explaining a pay rise unaccompanied by a promotion in contractual terms. There are two possible solutions to the problem discussed in 6.33–6.34: treating continued employment and refraining from giving notice as fresh consideration and treating a practical benefit to the employer as fresh consideration. It is suggested that both approaches have much to recommend them as contractual explanations of a pay rise. However, both solutions also have problems. The notion that an employee, on receipt of a pay rise, agrees to refrain from exercising a right to give notice for an indefinite period is usually a fiction—a helpful and perhaps necessary fiction, but a fiction nevertheless.145 It is difficult to identify precisely what the employee is agreeing to do in exchange for the pay rise. Must the employee refrain from exercising the right to give notice for a day? Or a month? Or a reasonable period? If the latter, is it seriously suggested that an employee who accepts a pay rise will

be bound not to give notice for a reasonable period? If there is no certain promise by the employee identifying the period then it may be that the consideration moving from the employee is too uncertain to be enforced.146 The Williams v Roffey principle also shows promise in its early days of development. It remains imperfect. It introduces the conceptually foreign notion of ‘unfair pressure’, as distinct from the familiar notions of duress, fraud, undue influence and unconscionable conduct. In its current formulation it only applies when the employee’s performance ‘becomes doubtful’, a condition that will often not be fulfilled. It is more likely that [page 322] the pay rise is granted so as either to induce the employee to remain or to attempt to ensure that the employee’s continued employment does not become doubtful. 6.36 As noted in 1.11, one of the features of an employment contract is that it tends to be a long-term contract. Though the terms appear static, the parties contemplate that over the course of the relationship the wages and perhaps other employment conditions will improve. In such a dynamic contract courts should be willing to readily infer consideration to support unilateral improvements in wages and conditions. The two possible solutions to the problems created by a strict application of the rule in Stilk v Myrick are imperfect, but they can both be seen as an attempt to give life to the nonstatic, dynamic nature of employment contracts.

VARIATION DISTINGUISHED FROM OTHER ALTERATIONS Novation 6.37 Novation is the process by which a contract is terminated by the consent of the parties and replaced by another contract between the same parties, or, in some cases, different parties.147 It consists of two acts of legal

significance: the termination of the original contract and the formation of a new contract. Whether a novation operates to release the parties from accrued obligations depends on the parties’ intention.148 6.38 It has occasionally been erroneously suggested that there is no real distinction between a novation and a variation.149 Novation and variation are different processes. Sometimes it is necessary to distinguish [page 323] between the two processes as something may turn on the place, time of formation, form or terms of the contract.150 Where there is a novation the original contract is terminated and a new contract is formed, but where there is a variation the original contract is not terminated and a new contract is not formed. A varied contract will retain all of the former terms other than those inconsistent with the variation. Where there is a novation the new contract will only contain those terms agreed upon by the parties when the new contract was formed. When there is a novation there is no presumption that the parties intend that the terms of the superseded contract be inserted into the new contract.151 A novation is also distinguishable from an assignment.152 When a right is validly assigned, the contract continues to exist (in contrast, when a contract is novated the former contract is terminated); the assignor remains a party to the contract (in a novation the original parties may change); the assignment, when permitted by the contract, does not require the consent of all parties (a novation requires the consent of all parties); and the assignment creates no new rights between the original parties (in a novation an entirely new contract is created between the parties). 6.39 Whether the parties novated or varied the contract will depend on their intention, ascertained in the ordinary manner.153 It is a question of [page 324]

fact in each case.154 Occasionally parties reveal their intention by using terms such as variation, novation, rescission, abrogation, abandon or discharge to describe the effect of the change. In such cases the language used will be an indication of the parties’ intention.155 Courts also consider other evidence of the parties’ intention, such as the difference in the terms between the former contract and the current contract. Where the alterations are ‘profound’ or ‘exceptional, far reaching and not within the original contemplation of the parties’ then courts are inclined to determine that the alteration is a novation rather than a variation.156 Continuing in employment does not support an inference that the change amounted to a novation, rather than a variation, as agreement is required in both.157 It is often difficult to determine whether a promotion of an employee is a variation or a novation. Each case will turn on its own unique facts but as a very broad guide an alteration is more likely to be a variation when it is merely a pay rise or the automatic promotion gained through years of service, and is more likely to be a novation when it is the result [page 325] of a non-automatic promotion.158 It is suggested that the adoption of a contract by a liquidator or receiver will usually be a novation.159

Assignment of rights and obligations 6.40 It is often erroneously said that rights under an employment contract cannot be assigned. It is more accurate to say that obligations and personal rights created by employment contracts cannot be assigned without the consent of both parties: see 6.41. The consent must be ‘the real consent of the employee and not a constructive consent raised by operation of law’.160 Nonpersonal rights can usually be assigned without the other party’s consent: see 6.43. Rights (personal or otherwise) and obligations can be assigned or transferred by force of statute.

An assignment is a transfer of property or some other right from one person (the ‘assignor’) to another (the ‘assignee’).161 An assignment can arise from an agreement between the assignor and the assignee, or may be made pursuant to a statute. A valid assignment acts as an exception to the doctrine of privity as it permits a person who is not a party to the contract to sue on the contract. It is common to speak of the assignment of a contract, though when the assignment arises from an agreement it is usually the rights under a contract that are assigned and not the [page 326] contract itself.162 An assignment is distinguishable from a novation.163 It is also distinguishable from a secondment, an arrangement whereby the employee serves a different employer for a period and then reverts to service for the original employer.164

Assignment of obligations and personal rights 6.41 Obligations imposed by an employment contract cannot be assigned to a third party in the absence of consent to the assignment from the other party.165 Without the employee’s consent, an employer cannot assign to a related corporation the obligation to pay the employee’s wages. Nor can an employee assign to any other person the obligation to perform work for the employer. The same considerations prevent the application of the doctrine of the undisclosed principal to employment contracts.166 Each contract of employment will create many rights. Some are assignable and others are not. It is incorrect to assume that all rights arising out of an employment contract are personal and are therefore unassignable.167 Where the parties expressly agree that personal rights are assignable then the agreement will govern the matter.168 [page 327]

6.42 Whether a right is a personal right, and therefore unassignable without consent, depends on the intention of the parties as evidenced by the terms of the contract, its subject matter and the surrounding circumstances.169 The key question is whether it can make no difference to the party to whom the obligation is owed which of two persons is to discharge it.170 A right is likely to be a personal right if it is based on confidence reposed in the other party or calls for the exercise of particular skills.171 The most common right that employers seek to assign is the right to the service of the employee. Such a right is personal and is not assignable without the employee’s consent.172 One rationale for the rule against the assignability of the right to the employee’s service is that ‘a free citizen, in the exercise of his freedom, is entitled to choose the employer whom he promises to serve’.173 A duty to serve owed by [page 328] an employee to a corporation, rather than a natural person, is still a personal duty.174 A statute may operate to assign some or all of the rights and obligations of a party to an employment contract to another person. Whether a statute has this effect depends on its terms. In Nokes, the House of Lords determined that clear words are required before a court will conclude that a statute has such an effect.175 That case concerned the powers of a court to make orders transferring the property of a corporation as part of a scheme of reconstruction or amalgamation of two or more corporations. In Australia that power is granted by s 413 of the Corporations Act 2001 (Cth) in terms that clearly state that the property includes ‘rights and powers that are of a personal character and are incapable under the general law of being assigned or performed vicariously’.

Assignment of non-personal rights 6.43 Non-personal rights arising from employment may be assignable. The ‘fruits of performance’ may be assigned even in cases in which the

performance itself is unassignable.176 Where wages have been earned by an employee then the relationship between the employee and employer is that of creditor and debtor in relation to the unpaid wages. It rarely makes any difference to the employer whether the debt is paid to the employee, or to the employee’s bank or some other assignee of the employee. The employee’s right to the wages, being a chose in action, may be assigned if it makes no difference to whom the wages are paid.177 There is at least one, possibly two, limitations on such a right. An assignment of wages may be contrary to public policy and thereby unenforceable if it deprives the employee of his or her sole means of support.178 There is also some [page 329] authority for the proposition that if the assignment relates to the salary or emoluments of certain public officers then it is contrary to public policy as the full salary of those officers is needed to keep the officer in the dignity of the office and to ward off the temptation of corruption.179 There is authority to support the proposition that a valid restraint of trade covenant may be assigned and is not a personal right.180 On this approach, the purpose of the covenant is to protect the business of the employer and, to the extent that business is assigned to a third party, so may be the restraint of trade covenant.181

Vicarious performance of obligations and freedom to choose an employer 6.44 The issue of whether a right is too personal to be assigned without consent is related to the issue of whether one party can have a third party vicariously perform the contract.182 Vicarious (or delegated) performance of an obligation is performance by a person who is not a party to the contract, such as where an employee arranges for his or her friend to perform work when the employee is ill. The tests applied in determining if a right can be assigned, and whether an obligation can be vicariously performed, are very similar.183 Where vicarious performance of an obligation is permitted by a

contract then the contracting party still remains liable for the way in which the contract is performed and the other party has no contractual rights against the third party performing the obligation. In contrast, where assignment of a right is permitted by a contract then the assignee acquires contractual rights and is entitled to enforce the right contractually. If one party can delegate the performance of a particular obligation to a third party under the contract, then it [page 330] tends to suggest that the corresponding right created by the obligation is assignable.184 6.45 As noted above, the rationale for the rule against the assignability of the obligation to serve relies on notions of freedom, the right to choose one’s employer and ‘that this right of choice constituted the main difference between a servant and a serf’.185 As melodramatic as this sounds, it has a sound historical foundation: see 1.30–1.34 and 1.37. Employees are not property, able to be bought and sold, and the common law (and perhaps even the Australian Constitution)186 respects this freedom.187 There is, as Professor Freedland has observed, a hint of the quixotic about such declarations. The common law adopts the position that the employee’s promise to serve is personal and so is unassignable from one entity to another. On this view it is not permissible for an employer to assign the right to an employee’s service to a wholly owned and financially more secure related corporation owned by the same shareholders, governed by the same directors and conducted by the same managers. Yet the law does not consider that the personal relationship between a corporate employer and employee would be affected by a hostile takeover of the employer involving the purchase of all the shares in the employer, the replacement of all its directors and the removal of all its managers.188 Further, the law permits employment pro hac vice under which the employer lends the employee to a temporary employer thereby [page 331]

exposing the employee to the direction of an employer whom he or she never agreed to serve.189

Election 6.46 Employers sometimes seek to unilaterally impose a ‘variation’ by reducing the remuneration of an employee, demoting the employee, or making a direction that it is not empowered by the contract to make, such as to perform work at a new location or to perform extra-contractual duties. Such conduct by an employer may give rise to a right to terminate.190 The usual tests are applied to determine if the unilateral change or direction is sufficiently serious to amount to a serious breach or repudiation.191 When an employer commits a serious breach or repudiates then the employee may elect to affirm or terminate the contract. When an employer has unilaterally imposed a change then determining if the employee has subsequently accepted an offer to vary, or affirmed the contract, raises similar issues.192 However, there are important differences between the two notions which are sometimes lost in the authorities, particularly when dealing with the effect of continued employment.193 6.47 The first difference concerns the effect of the employee’s delay on the termination of the right to accept an offer to vary and the effect of the employee’s delay on the termination of the right to affirm. An offer to vary remains open until it is accepted, or is rejected, or lapses owing to a failure of a condition or by the passage of a reasonable time: see 3.16. An unreasonable delay by the employee will result in the offer lapsing. In contrast, when an employer repudiates or commits a serious breach then the employee must elect to affirm or terminate the contract. The employee has a choice between these two inconsistent courses. An [page 332] election to affirm or terminate does not need to be made immediately.194 The employee may keep the election open while weighing his or her options. There are three events that terminate the right to elect between affirmation

and termination: electing to terminate, electing to affirm and estoppel. Delay in making the election will rarely, in itself, lead to the termination of the right to elect. If the delay is coupled with detriment to the employer then it is more likely to result in an estoppel. If the delay is coupled with continued performance of the contract, then it is more likely to be an affirmation. However, the election may remain open for years in the absence of continued performance or detrimental delay.195 6.48 The next difference concerns the effect of continued employment. As to acceptance, if there is an unequivocal rejection of an offer then, ordinarily, continued employment will not be construed as acceptance,196 though there are exceptions where the later conduct of the employee is inconsistent with the express rejection of the offer.197 In contrast, an affirmation will have occurred when the employee either expressly affirms, or does an act that is inconsistent with the continued existence of an election to terminate. As Browne-Wilkinson J has explained: [If] the [employee] calls on the [employer] for further performance of the contract, he will normally be taken to have affirmed the contract since his conduct is only consistent with the continued existence of contractual obligation. Moreover, if the [employee] himself does acts which are only consistent with the continued existence of the contract, such acts will normally show affirmation of the contract. However, if the [employee] further performs the contract to a limited extent but at the same time makes it clear that he is reserving his right to accept the repudiation … such further performance does not prejudice his rights subsequently to accept the repudiation.198

[page 333] When an employer unilaterally imposes changes in conditions, the continued performance of the contract may be consistent only with an affirmation of the contract. For example, if the employer repudiates the contract by directing the employee to perform work at a remote location and the employee complies for a year, then it is likely that the employee’s conduct is not consistent with the retention of a right to terminate in response to the repudiation. The conclusion might be different if the employee agreed to move to the new location as a trial or works at the new location for a limited period while searching for another job. For example, in Shields Furniture Ltd v Goff the employer repudiated the contract when it directed

the employee to commence work at a new location. He commenced work for three weeks, and then took a further two weeks’ annual leave. The employee did not affirm by doing so. He was permitted a period to make up his mind about whether to terminate.199 A further difference is that a variation alters the terms of the contract whereas an affirmation does not. A consequence of an election to affirm is that the employee cannot rely on that specific breach or repudiatory act to terminate the contract, unless it is a continuing breach. The employee can still sue for damages arising from the breach or seek specific performance of the contract. The effect of an affirmation depends on distinguishing between once and for all breaches and continuing breaches.200

Comment on unilaterally imposed changes 6.49 The final point arises by way of comment about unilateral changes imposed by the employer. This section deals with the effect of an unauthorised (in the sense that it is not the valid exercise of a power granted by the contract) change implemented by one party. It is suggested that the law has a policy against allowing one party to impose unauthorised unilateral changes on the other, particularly where the change is effected through the use of the economic superiority of one party over the other. This is reflected in the requirement for consideration to support a variation. The rule in Stilk v Myrik may be understood, in significant part, as a rule against the extortionate ‘renegotiation’ of contracts, even when that [page 334] exploitation falls short of economic duress, fraud, undue influence or unconscionable conduct.201 Even the exception to that rule recognised in Williams v Roffey is based, in part, on the avoidance of unfair pressure through the exploitation of a position of economic superiority.202 Courts should carefully scrutinise whether unilateral changes imposed by the employer, and reluctantly accepted by an employee, meet the requirement that the variation is supported by consideration.

Another means by which the law should discourage exploitative unilaterally imposed changes is by the proper characterisation of the conduct. There is a difference, rarely recognised in the cases, between an offer by the employer to vary the contract, and a serious breach or repudiation. An offer to vary is an act that is consistent with the contract, while a serious breach or repudiation is an act inconsistent with the contract. An acceptance of an offer varies the contract, and results in the employer’s unilaterally imposed change being effectively sanctioned. An affirmation following a serious breach or repudiation permits the employee to sue for damages, or seek specific performance or an injunction. It is suggested that courts should be slow to characterise a unilaterally enforced detrimental change in conditions as an offer to vary. Similarly, courts should be slow to characterise the exercise of a contractual right to affirm as an acceptance of a detrimental variation: see 6.48.

Release, accord and satisfaction, and cancellation 6.50 Rights of action created by an employment contract can be discharged or extinguished by a release. The release can be contained in a deed of release, or must otherwise be supported by consideration.203 Where the right being released is created by a deed, the release should be executed by a deed. Where the right arises by other means, a release can be obtained either by a deed of release or by accord and satisfaction.204 Accord and satisfaction is the purchase of a release from an obligation. The accord is the agreement to discharge; the satisfaction is the consideration that makes the agreement operative. Whether a release, [page 335] or accord and satisfaction, has the effect of releasing a party from its obligations is a question of construction.205 Literally ripping up a contract does have legal consequences. An unauthorised, intentional material physical alteration by a party to a written contract discharges the other party. The rule governing the cancellation of contracts applies whether or not the contract is by deed, and whether or not

the original words can still be read on the contract. The rule only applies when the alteration makes material changes, and when the alterations are intentional, not accidental.206 The physical loss or accidental destruction of the written contract does not discharge the parties as the written contract can be proved orally. _________________________ 1.

Federal Commissioner of Taxation v J Walter Thompson (Australia) Pty Ltd (1944) 69 CLR 227 at 231 per Latham CJ. See 1.7 and 2.13.

2.

See 7.12.

3.

See 6.9–6.12.

4.

See 6.25, 6.31–6.36 and M Freedland, The Personal Employment Contract, Oxford University Press, Oxford, 2003, pp 235–40.

5.

Quinn v Jack Chia (Australia) Ltd [1992] 1 VR 567 at 575.

6.

Cases in which a court has found a repudiation or a serious breach justifying termination include the cases at note 59 (changes to duties or demotion), note 71 (changes to remuneration) and note 88 (changes to location of employment). See also Morris v CH Bailey Ltd [1969] 2 Lloyd’s LR 215 at 219–20.

7.

Cumbria County Council v Dow (No 2) [2008] IRLR 109 at [19] per Elias P.

8.

See 6.38.

9.

Mulcahy v Hoyne (1925) 36 CLR 41 at 53.

10.

Agricultural & Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570; 251 ALR 322 at [90] per Gummow, Hayne and Keifel JJ. See C Bevan, ‘Waiver of Contractual Rights: A Non Sequitur’ (2009) 83 ALJ 817 and P Liondas, ‘ “Waiver” in the High Court: Agricultural & Rural Finance Pty Ltd v Gardiner’ (2009) 37 ABLR 132.

11.

R Meagher et al, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies, 4th ed, LexisNexis Butterworths, Sydney, 2002, Ch 36. See 15.62.

12.

Visscher v Guidice (2009) 239 CLR 361; 258 ALR 651; 187 IR 96 at [62]; R Meagher et al, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies, note 11 above, pp 1043–4 and S Wilken, The Law of Waiver, Variation and Estoppel, 2nd ed, Oxford University Press, Oxford, 2002, pp 91–2.

13.

Stratton v Illawarra County Council [1979] 2 NSWLR 701 at 705 per Reynolds JA. See also Advertiser Newspapers Pty Ltd v Industrial Relations Commission (SA) (1999) 74 SASR 240; 90 IR 211; [1999] SASC 300 at [48]; Dal v Orr [1980] IRLR 413 at [19] and Chittick v Ackland (1984) 1 FCR 254 at 264–5; 53 ALR 143 at 154 where the power to alter conditions was granted by a statute.

14.

See, for example, Wandsworth London Borough Council v D’Silva [1998] IRLR 193; Bainbridge v Circuit Foil UK Ltd [1997] ICR 541 at 546 and 548. See also the approach in Miller v Hamworthy Engineering Ltd [1986] ICR 846 at 854; Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193; [2000] FCA 889 at [110]–[112]; Land Securities Trillium Ltd v Thornley [2005] IRLR 765 and Whittaker v Unisys Australia Pty Ltd (2010) 26 VR 668; 192 IR 311; [2010] VSC 9 at [70]–[75].

15.

See, for example, Stratton v Illawarra County Council, note 13 above, at 705; Cadoux v Central Regional Council [1986] IRLR 131 and the note on that case of B Napier, ‘Incorporation of Collective Agreements’ (1986) 15 ILJ 52 at 53–4.

16.

Brackenridge v Toyota Motor Corporation Australia Ltd (1996) 142 ALR 99 at 105–6 and Dunstan v National Mutual Life Association of Australasia Ltd (1992) 5 VIR 72 at 78–82: see 5.53, 5.60 and 5.61.

17.

On terms incorporated by reference, see 5.34–5.45.

18.

See 5.41.

19.

Lee v GEC Plessey Telecommunications [1993] IRLR 383. Where there is no such agreement, the elements of a valid variation discussed in 6.21 must be satisfied.

20.

National Coal Board v Galley [1958] 1 WLR 16; [1958] 1 All ER 91; Dal v Orr, note 13 above and Airlie v City of Edinburgh District Council [1996] IRLR 516 at [14].

21.

National Coal Board v Galley, note 20 above.

22.

Wandsworth London Borough Council v D’Silva, note 14 above; Imperial Group Pension Trust Ltd v Imperial Tobacco Ltd [1991] 2 All ER 597; [1991] ICR 524; Johnstone v Bloomsbury Health Authority [1991] 2 All ER 293; [1991] ICR 269 at 276–7 and 283–4; United Bank v Akhtar [1989] IRLR 507 and Johnson v Unisys Limited [2003] 1 AC 518; [2001] 2 All ER 801 at [24]. The relationship between express terms and the duty of trust and confidence is discussed in 8.22.

23.

Riverwood International Australia Pty Ltd v McCormick, note 14 above, at [152].

24.

See Bainbridge v Circuit Foil UK Ltd, note 14 above, at 546 and 548 and Akmeemana v Murray (2009) 190 IR 66 at [54].

25.

Riverwood International Australia Pty Ltd v McCormick, note 14 above, at [111]; see 3.56.

26.

See, for example, Reilly v Praxa Ltd [2004] ACTSC 41 at [15] and Easling v Mahoney Insurance Brokers (2001) 78 SASR 489; [2001] SASC 22 at [3]–[10].

27.

Cresswell v Board of Inland Revenue [1984] 2 All ER 713 at 720–2; see also Easling v Mahoney Insurance Brokers, note 26 above, at [3]–[10], [144]–[145]; Potter v North Cumbria Acute Hospitals NHS Trust [2009] IRLR 900 at [93] (changes in the criteria for pay progression was not a fundamental change); Dryden v Greater Glasgow Health Board [1992] IRLR 469 (introduction of a no smoking policy) and Sim v Rotherham Metropolitan Borough Council [1987] Ch 216; [1986] 3 All ER 387.

28.

Adami v Maison de Luxe Ltd (1924) 35 CLR 143 (refusal to obey an order, admitted to be lawful, concerning the hours of work); see 7.17.

29.

Bull v Nottinghamshire and City of Nottingham Fire and Rescue Authority [2007] ICR 1631 at 1641 per Buxton LJ.

30.

See, for example, Glitz v Watford Electric Co Ltd [1979] IRLR 89 (terms permitted redeployment to perform duties not usually performed) and Harrison v Dodd (1914) 111 LT 47 at 49 (terms permitted change in shift patterns). See also Hitton v Skinner [2001] IRLR 727. The scope of the managerial prerogative to amend the duties of employees is discussed below at 6.14–6.16.

31.

C Arup, ‘Altering the Terms of Employment and Some Recent Developments in Contract of Employment Law’ (1979) 6 Mon LR 23 at 34–5 and W Brown, ‘A Consideration of Custom and Practice’ (1972) 10 BJIR 42.

32.

See J Gaymer, The Employment Relationship, Sweet & Maxwell, London, 2001, pp 198–9.

33.

See 7.103–7.107.

34.

See, for example, Adamson v Kenworthy (1931) 49 RPC 57 at 69; Triplex Safety Glass Company v Scorah [1938] 1 Ch 211; British Reinforced Concrete Engineering Company Limited v Lind (1917) 34 RPC 101 at 108–9 and LIFFE Administration & Management v Pinkava [2007] 4 All ER 981; [2007] EWCA Civ 217 at [97]: see 7.106.

35.

Victoria University of Technology v Wilson (2004) 60 IPR 392; [2004] VSC 33 at [120]–[121].

36.

Spencer Industries Pty Ltd v Collins (2003) 58 IPR 425; [2003] FCA 542 at [81]–[83] per Branson J.

37.

Armstrong Whitworth Rolls Limited v Mustard [1971] 1 All ER 598 (though the court unsurprisingly rejected the contention that there was an emergency requiring additional hours of work every day for seven years). See also Fair Work Act 2009 (Cth) s 62 that governs requests to work an unreasonable amount of overtime.

38.

Dorman Long and Co Ltd v Carroll [1945] 2 All ER 567, a poor decision that is best justified on the basis that the employee’s representation was an equitable forbearance that was revocable on reasonable notice. See S Wilken, The Law of Waiver, Variation and Estoppel, note 12 above, p 143 and Bond v Cav Ltd [1983] IRLR 360 (temporary arrangement for a pieceworker to operate an inefficient machine was terminable by the employee on reasonable notice).

39.

See the cases at note 87 below.

40.

Brackenridge v Toyota Motor Corporation Australia Ltd, note 16 above, at 109 and Advertiser Newspapers Pty Ltd v Industrial Relations Commission (SA), note 13 above, at [39].

41.

Mountford v London County Council [1935] 2 KB 243 (the employee was given the proper notice under the contract, but told that if he accepted a 25% pay cut the notice would be withdrawn) and Faithorn v Territory of Papua (1938) 60 CLR 772 (Crown exercised its right to dismiss at pleasure and reappointed employee at a lower rank and pay). See also Advertiser Newspapers Pty Ltd v Industrial Relations Commission (SA), note 13 above, at [43].

42.

See 11.3 and 11.7.

43.

See, for example, Cowey v Liberian Operations Ltd [1966] 2 Lloyd’s LR 45 at 50 (employer’s ineffective notification of change in termination provision) and National Coal Board v Galley, note 20 above (employee’s ineffective notification of change of working hours).

44.

Rigby v Ferodo Ltd [1988] ICR 29 at 33 (employees given 12 weeks’ notice of the intention to reduce pay, and not notice to terminate contract) and James Miller Holdings Ltd v Graham (1978) 3 ACLR 604 at 612–3 (no new contract when the receiver, mistakenly, told employees that the effect of his appointment was that their contracts were terminated but that he was reengaging them on identical terms).

45.

Burdett-Coutts v Hertfordshire County Council [1984] IRLR 91.

46.

See the cases referred to in note 68 below.

47.

See O’Connor v The Argus and Australasian Ltd [1957] VR 374; Brackenridge v Toyota Motor Corporation Australia Ltd, note 16 above, at 105–6 and SW Strange Ltd v Mann [1965] 1 WLR 629 at 636–7; 1 All ER 1069 at 1075 discussed at 6.39.

48.

Westen v Union des Assurances de Paris (1996) 88 IR 259 at 261; Beck v Darling Downs Institute of Advanced Education (1990) 140 IR 364 at 368–70; McCarthy v Windeyer (1925) 26 SR (NSW) 29; Mackie v Wienholt (1880) 5 QSCR 211 at 212; Visscher v Guidice, note 12 above,

at [69]; Woolworths (SA) Pty Ltd v Russian (1996) 66 IR 13; Bashir v Brillo Manufacturing Co [1979] IRLR 295 and Hogg v Dover College [1990] ICR 39 at 42. 49.

Easling v Mahoney Insurance Brokers, note 26 above, at [3]–[10] and Runnalls v Richards & Osborne Ltd [1973] ICR 225 (employee engaged as truck driver could be directed to drive on public roads or private roads); see 6.9–6.12.

50.

Stratton v Illawarra County Council, note 13 above, at 705; Fardell v Coates Hire Operations Ltd (2010) 201 IR 64; [2010] NSWSC 346 at [67]–[78] involved an express term that permitted the employee to terminate the contract in the event of a material diminution in his responsibilities.

51.

See Public Sector Employment and Management Act 2002 (NSW) s 42; Public Administration Act 2004 (Vic) ss 20 and 26.

52.

Cooper v Hunkin [1942] SASR 162; Director-General of Education v Suttling (1987) 162 CLR 427 at 440; 69 ALR 193 at 202 (a power to terminate the employment at will does not import a power to reduce the position and salary of the employee); Faithorn v Territory of Papua, note 41 above, and G McCarry, Aspects of Public Sector Employment Law, Law Book Company, Sydney, 1988, pp 51–2.

53.

Brackenridge v Toyota Motor Corporation Australia Ltd, note 16 above, at 105–6 per Wilcox CJ, von Doussa and Marshall JJ; Perks v Willert (1974) 22 FLR 274; Stratton v Illawarra County Council, note 13 above, at 707 and GKN (Cwmbran) Ltd v Lloyd [1972] ICR 214 at 219.

54.

Brackenridge v Toyota Motor Corporation Australia Ltd, note 16 above (reduction in grade and ‘red circling’ of wages); Westen v Union des Assurances de Paris, note 48 above, at 261 (reduction in rank but not salary); Beck v Darling Downs Institute of Advanced Education, note 48 above, at 368–70 (reduction in rank but not salary); O’Connor v The Argus and Australasian Ltd, note 47 above (reduction in rank but not pay was a termination of the former contract and an offer of employment on new terms) and Martech International Pty Ltd v Energy World Corporation Limited (2007) 248 ALR 353; [2007] FCAFC 35 at [19] (reduction in rank but not remuneration).

55.

A Stewart, ‘Discipline at the Workplace’ (1992) 5 CBLJ 257.

56.

Easling v Mahoney Insurance Brokers, note 26 above, at [7].

57.

See D Olivieri, ‘Reduction in Rank or Authority or Change of Duties as Breach of Employment Contract’, 63 ALR 3d 539 (1975); Montemayor v Jacor Communications Inc 64 P3d 916 (2003) at 920 (a demotion and major reduction in the scope of the senior executive officer’s duties was a breach); Guiliano v Cleo Inc 995 SW2d 88 (1999) at 91–3 (breach of contract for the employer to place the employee on garden leave and thereby diminish his responsibilities as director of marketing); McKinney v Gannett Co 660 F Supp 984 (1981) (breach to prevent an editor controlling editorial policy); Jones v Williams 139 Mo 1; 39 SW 486 (1897); Colvig v RKO General, Inc, 232 Cal App 2d 56 (1965) (breach to prevent a station announcer carrying out his duties); Hayes v Resource Control Inc 170 Conn 102, 365 A 2d 399 (1976) (breach to demote managing vice president to salesman on commission) and Mair v Southern Minnesota Broading Company 226 Minn 137; 32 NW 2d 177 (1948).

58.

Quoted in McLaughlin v Union-Leader Corp 99 NH 492, 116 A2d 489 (1955).

59.

Westen v Union des Assurances de Paris, note 48 above, at 261; Beck v Darling Downs Institute of Advanced Education, note 48 above, at 368–70; Brackenridge v Toyota Motor Corporation Australia Ltd, note 16 above, at 106; Whittaker v Unisys Australia Pty Ltd, note 14 above, at [41]–[46] and [85]; Earney v Australian Property Investment Strategic Pty Ltd [2010] VSC 621

at [65], [77] and [84]–[88]; Marriott v Oxford and District Co-Operative Society Ltd [1970] 1 QB 186 at 190–1; TV Shopping Network Ltd v Scutt (1988) 43 IPR 451 at 458 (‘a self-respecting executive might even be expected to resign rather than take a lower position’); Bashir v Brillo Manufacturing Co, note 48 above and the cases at notes 60 and 64. See also Haden v Cowen [1982] IRLR 314 at [21]; Burke v Reander Pty Ltd (1996) 69 IR 346 at 355–6 and 360; Addis v Gramophone Co Ltd [1909] AC 488; Advertiser Newspapers Pty Ltd v Industrial Relations Commission (SA), note 13 above, at [50]; Martech International Pty Ltd v Energy World Corporation Limited, note 54 above, at [19] and Foster v Secretary to the DEECD [2008] VSC 504 at [46]; cf Keays v J P Morgan Administrative Services Australia Limited [2011] FCA 358 at [43]–[44]. 60.

McCarthy v Windeyer, note 48 above (subeditor not required to perform the subordinate work of a reporter); Mackie v Wienholt, note 48 above, at 212 (cook not required to perform work in the dairy); Pedersen v Camden LBC [1981] ICR 674 (status of a barman was accepted as being better than that of a catering assistant); Visscher v Guidice, note 12 above, at [69] (chief officer not required to perform the work of a second mate); Hitton v Skinner, note 30 above (moving a salesperson to a clerical role) and Marriott v Oxford and District Co-Operative Society Ltd, note 59 above, at 190–1 (change from being a foreman to a supervisor).

61.

Westen v Union des Assurances de Paris, note 48 above, at 261; Whittaker v Unisys Australia Pty Ltd, note 14 above, at [41]–[46].

62.

Earney v Australian Property Investment Strategic Pty Ltd, note 59 above, at [65], [77] and [80]– [88] and Whittaker v Unisys Australia Pty Ltd, note 14 above, at [45].

63.

See the cases at note 30.

64.

See Driscoll v Australian Royal Mail Steam Navigation Co (1859) 1 F&F 458 (fireman on The Australian could not be transferred to perform work as a fireman on another of the company’s ships); Collier v Sunday Referee [1940] 2 KB 647; [1940] 4 All ER 234 (chief subeditor of a Sunday newspaper could not be re-assigned the duties of a chief subeditor of a Saturday newspaper); Real Estate Institute of Western Australia Inc v Federated Clerks Union of Australia Industrial Union of Workers, WA Branch (1993) 51 IR 415 at 422–3; Haden v Cowen, note 59 above, at [21] and Earney v Australian Property Investment Strategic Pty Ltd, note 59 above, at [65], [77] and [84]–[88].

65.

Commissioner for Government Transport v Royall (1966) 116 CLR 314 at 318, 322 and 324.

66.

Bull v Nottinghamshire and City of Nottingham Fire and Rescue Authority, note 29 above, at 1642.

67.

See, for example, Mackie v Wienholt, note 48 above, at 212–3 (breach by employer in requiring cook to perform work in the dairy until the employer found a replacement dairy worker); Driscoll v Australian Royal Mail Steam Navigation Co, note 64 above and Pedersen v Camden LBC, note 60 above (breach to require a ‘barman/catering assistant’ to spend almost all of his time performing the work of a catering assistant, rather than the more responsible duties of a barman). See also Australian Workers Union v Roads and Traffic Authority (NSW) (1989) 29 IR 202 at 215.

68.

See, for example, Reilly v Praxa Ltd, note 26 above, at [15]; Easling v Mahoney Insurance Brokers, note 26 above, at [135]; Miller v University of New South Wales (2001) 110 IR 1 at [35]–[49] (contract required employee to ‘undertake such duties consistent with his/her position’); Bearingpoint Australia Pty Ltd v Hillard [2008] VSC 115 at [100], [103] and [106]; Seven Network (Operations) Limited v Warburton (No 2) [2011] NSWSC 386 at [13]; Harold Holdsworth & Co (Wakefield) Ltd v Caddies [1955] 1 All ER 725; [1955] 1 WLR 352 and

Haden v Cowen, note 59 above (required to perform duties reasonably within the scope of his capabilities). See also Bruce v AWB Ltd (2000) 100 IR 129 at [11]–[17] and Real Estate Institute of Western Australia Inc v Federated Clerks Union of Australia Industrial Union of Workers, WA Branch, note 64 above, at 422–3 which concerned contracts specifying the duties of the employee and granting a limited right to alter those duties. The latter case also illustrates the difficulties in implying a term to alter duties. 69.

See 10.30.

70.

Cantor Fitzgerald International v Callaghan [1999] ICR 639 at 648; 2 All ER 411 at 419 per Judge LJ.

71.

Rigby v Ferodo Ltd, note 44 above, at 33; Cantor Fitzgerald International v Callaghan, note 70 above, ICR at 649–50; All ER at 420–1; Miller v Hamworthy Engineering Ltd, note 14 above, at 854; Saddington v Building Workers Industrial Union of Australia (1993) 49 IR 323 at 342; Tanaka v Tokyo Network Computing Pty Ltd [2003] NSWSC 1114 at [25] (aff’d on this point in Tokyo Network Computing Pty Ltd v Tanaka [2004] NSWCA 263 at [6]); Marriott v Oxford and District Co-Operative Society Ltd (No 2), note 59 above, at 191; Chapman v Goonvean and Rostowrack China Clay Co Ltd [1973] ICR 310 at 313; 2 All ER 1063 at 1065 (removing a contractually agreed benefit of free transport to and from work); Burke v Reander Pty Ltd, note 59 above, at 355–6 (demotion and move from waged to commission based pay) and Foggo v O’Sullivan Partners (Advisory) Pty Ltd (2011) 206 IR 87; [2011] NSWSC 501 at [112].

72.

In the United Kingdom the redundancy pay scheme in s 139 of the Employment Rights Act 1996 (UK) makes the place of employment important in determining a series of distinct issues: see High Table Ltd v Horst [1998] ICR 409 and S Anderman, ‘The Interpretation of Protective Employment Statutes and Contracts of Employment’ (2000) 29 ILJ 223 at 229–33.

73.

See Bouzourou v Ottoman Bank [1930] AC 271, a somewhat unsatisfactory decision as discussed in Suttling v Director-General of Education (1985) 3 NSWLR 427 at 448.

74.

See, for example, Arthurson v State of Victoria (2001) 140 IR 188; [2001] VSC 244 at [248]– [250].

75.

See, for example, Re Rubber, Plastic and Cable Making Industry (Consolidated) Award 1983 (1989) 31 IR 35 at 49; RH McCulloch Ltd v Moore [1967] 2 All ER 290; [1968] 1 QB 360 and Curling v Securior Ltd [1992] IRLR 549 (dismissals arising from the employer’s failure to exercise its power to transfer); Hawker Siddley Power Engineering Ltd v Rump [1979] IRLR 425 (employee told to sign a document empowering the employer to transfer the employee, but told he would not be transferred); Sutcliffe v Hawker Siddley Aviation Ltd [1973] ICR 560 at 566 and United Kingdom Atomic Energy Authority v Claydon [1974] ICR 128. The latter two cases concerned unsuccessful claims for redundancy pay by employees engaged under contracts that expressly permitted the employer to transfer the employees anywhere in the United Kingdom.

76.

White v Reflecting Roadstuds Ltd [1991] ICR 733 at 742 and United Bank Ltd v Akhtar, note 22 above; see 8.13 and 8.33.

77.

Jones v Associated Tunnelling Co Ltd [1981] IRLR 477 at 480 per Browne-Wilkinson J.

78.

O’Brien v Associated Fire Alarms Ltd [1969] 1 All ER 93; Australian Colliery Staff Association v Queensland Mines Rescue Service (1999) 88 IR 75 at 92; [1999] FCA 395; Jones v Associated Tunnelling Co Ltd, note 77 above, at 480 and Aparau v Iceland Frozen Foods plc [1996] IRLR 119; see 5.33.

79.

See, for example, Australian Colliery Staff Association v Queensland Mines Rescue Service, note 78 above, at 92 and Aparau v Iceland Frozen Foods plc, note 78 above.

80.

Luke v Stoke on Trent City Council [2007] IRLR 305 at [6] per Underhill J (aff’d on other grounds [2007] ICR 1678); Australian Colliery Staff Association v Queensland Mines Rescue Service, note 78 above, at 92; Shields Furniture Ltd v Goff [1973] ICR 187; 2 All ER 653; Australian Workers Union v Roads and Traffic Authority (NSW), note 67 above, at 211 and Driscoll v Australian Royal Mail Steam Navigation Co, note 64 above.

81.

On the role of reasonableness in implying terms in fact, see 5.60; cf Courtaulds Ltd v Sibson [1988] ICR 451 at 462–3.

82.

Jones v Associated Tunnelling Co Ltd, note 77 above, at 480 and Courtaulds Ltd v Sibson, note 81 above. Put another way, it is essential that the employment be located somewhere but it is not essential for the employer to be empowered to change that location. See further Luke v Stoke on Trent City Council, note 80 above, at [6]; Aparau v Iceland Frozen Foods plc, note 78 above (not affected by the later decision at [2000] 1 All ER 228; [2000] ICR 341).

83.

Jones v Associated Tunnelling Co Ltd, note 77 above, at 481 and Courtaulds Ltd v Sibson, note 81 above, at 460.

84.

Jones v Associated Tunnelling Co Ltd, note 77 above, at 480; Courtaulds Ltd v Sibson, note 81 above, at 462 (not affected by the appeal in Sibson v United Kingdom (1994) 17 EHRR 193) and O’Brien v Associated Fire Alarms Ltd [1969] 1 All ER 93 at 96. On the weight should be given to the fact that an employee may have family responsibilities that make commuting inconvenient, note Re Rubber, Plastic and Cable Making Industry (Consolidated) Award 1983, note 75 above, at 50. See also Eaton v Western (1882) 9 QBD 636 at 641.

85.

See Prestwick Circuits Ltd v McAndrew (1990) SLT 654 at 657–8 and United Bank v Akhtar, note 22 above, at 511–2.

86.

Australian Colliery Staff Association v Queensland Mines Rescue Service, note 78 above, at 92; O’Brien v Associated Fire Alarms Ltd, note 84 above and Re Rubber, Plastic and Cable Making Industry (Consolidated) Award 1983, note 75 above, at 49–50. See also M Freedland, The Contract of Employment, Clarendon Press, Oxford, 1976, p 45. On the admissibility of evidence about negotiations see 5.20.

87.

Luke v Stoke on Trent City Council, note 80 above, at [8] (aff’d on other grounds by the Court of Appeal in [2007] ICR 1678) and Millbrook Furnishing Industries Ltd v McIntosh [1981] IRLR 309 at 311.

88.

Rowbotham v Arthur Lee & Sons Ltd [1975] ICR 109 at 115 (transfer of five miles justified termination by the employee); Shields Furniture Ltd v Goff, note 80 above (transfer of two-anda-half miles justified termination); Silberschneider v MRSA Earthmoving Pty Ltd (1989) 30 AILR 65; O’Brien v Associated Fire Alarms Ltd, note 84 above, at 96; Australian Colliery Staff Association v Queensland Mines Rescue Service, note 78 above, at 93; and Re Rubber, Plastic and Cable Making Industry (Consolidated) Award 1983, note 75 above, at 49–50.

89.

Re Rubber, Plastic and Cable Making Industry (Consolidated) Award 1983, note 75 above, at 50.

90.

Shields Furniture Ltd v Goff, note 80 above, ICR at 190; All ER at 655–6 (no acceptance during three weeks work followed by two weeks holiday); Air Canada v Lee [1978] ICR 1202 (no acceptance during trial of four weeks); Sheet Metal Components Ltd v Plumridge [1974] ICR 373 at 376. See also Patrick v Steel Mains Pty Ltd (1987) 22 IR 81; 77 ALR 133 (alleged misleading and deceptive conduct in breach of the predecessor of the Australian Consumer Law 2010 (Cth) s 18 concerning a transfer of employment).

91.

As to agreement, see 6.23–6.25, to consideration, see 6.26–6.36. As to certainty, see Woodhouse AC Israel Cocoa SA v Nigerian Produce Marketing Co Ltd [1972] AC 741 at 757; 2 All ER 271

at 280–1 and the discussion of the principles in 3.47–3.60; as to intention to vary, see 3.40–3.46. Nikolich v Goldman Sachs JB Were Services Pty Ltd [2006] FCA 784 at [209] (aff’d (2007) 163 FCR 62; [2007] FCAFC 120 where the employee, in the performance of his duties, sent the employer a business plan—held that no variation as no intention to vary). 92.

Abbott v Women’s and Children’s Hospital Inc (2003) 86 SASR 1; [2003] SASC 145 at [34] (aff’d [2004] SASC 67); Chittick v Ackland, note 13 above, FCR at 264–5; ALR at 154 and Morris v CH Bailey Ltd, note 6 above, at 219. See also Wilson v St Helens BC [1996] ICR 711 (variation contrary to statute).

93.

Howtrac Rentals Pty Ltd v Thiess Contractors (NZ) Limited [2000] VSC 415 at [417]–[424] (aff’d [2002] VSCA 195). See also Brookton Holdings Pty Ltd v Kara Kar Holdings Pty Ltd (1994) 57 IR 288 at 289–90.

94.

Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11 at 110; Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 at 535; Duncan v Lipscombe Child Care Services Inc (2006) 150 IR 471; [2006] FCA 458 at [26]; Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61 at [74]–[81]; Vrooon BV v Foster’s Brewing Group [1994] VR 32 at 83; Abbott v Women’s and Children’s Hospital Inc, note 92 above, at [34] (aff’d [2004] SASC 67). See 3.3 and 3.25.

95.

See 3.19.

96.

Armstrong Whitworth Rolls Limited v Mustard, note 37 above, at 602; Abbott v Women’s and Children’s Hospital Inc, note 92 above, at [34] (aff’d [2004] SASC 67).

97.

Felthouse v Bindley (1862) 11 CB (NS) 869; 142 ER 1037 and Cowey v Liberian Operations Ltd, note 43 above, at 50. Note also the cases discussed in M Powell ‘Acceptance by Silence in the Law of Contract’ (1977) ABLR 260 at 261–4 and C Miller, ‘Felthouse v Bindley Re-Visited’ (1972) 35 MLR 489: see 3.25, 3.26 and note also 4.37.

98.

Downe v Sydney West Area Health Service (No 2) (2008) 71 NSWLR 633; 174 IR 385; [2008] NSWSC 159 at [341].

99.

Shields Furniture Ltd v Goff, note 80 above, ICR at 190; All ER at 655–6 (no acceptance during three weeks’ work followed by two weeks’ holiday); Gratton v Greater Cessnock City Council [1964–5] NSWR 1319 (working in demoted position for one day was not an acceptance); Air Canada v Lee, note 90 above (no acceptance during trial of four weeks) and Turvey v CW Cheyney & Son Ltd [1979] IRLR 105. The position in the United Kingdom is now clouded somewhat by statutory regulation of this trial period for some purposes. See the Employment Rights Act 1996 (UK) s 138 and Optical Express Ltd v Williams [2008] ICR 1.

100. Glitz v Watford Electric Co Ltd, note 30 above. The various vitiating factors are discussed in 4.2–4.19. 101. Abbott v Women’s and Children’s Hospital Inc [2004] SASC 67 at [23] and [44]; Adams Union Cinemas Ltd [1939] 1 All ER 169 at 172 and on appeal at [1939] 3 All ER 136 (commencing new job as acceptance of the offer of a promotion); Jordan v Aerial Taxi Cabs Co-operative Society Ltd (2001) 108 IR 263; [2001] FCA 972 at [36] and Buckman v Barnawartha Abattoirs Pty Ltd (1994) 140 IR 376 at 379. 102. Abbott v Women’s and Children’s Hospital Inc, note 92 above, at [34] (aff’d [2004] SASC 67) and Irons v Merchant Capital Ltd (1994) 116 FLR 204 at 206. 103. Rigby v Ferodo Ltd, note 44 above, at 35 per Lord Oliver. See also Marriott v Oxford and District Co-Operative Society Ltd (No 2), note 59 above, at 191 and Burdett-Coutts v Hertfordshire County Council, note 45 above.

104. See 3.25–3.27. 105. Campbell v University of Adelaide (2006) 150 IR 225; [2006] SASC 92 at [162]. 106. Irons v Merchant Capital Ltd, note 102 above, at 206–7. See also Brambles Holdings Ltd v Bathurst City Council, note 94 above, at [173] and Empirnall Holdings Pty Ltd v Mahon Paull Partners Pty Ltd, note 94 above, at 535. 107. Henry v London General Transport Services [2002] ICR 910 at 915–6. 108. Jones v Associated Tunnelling Co Ltd, note 77 above, at 481; McKay v Abbey Vale Estate Pty Ltd [2003] WASC 2 at [10]–[18]; Visscher v Guidice, note 12 above (although the issue there was affirmation of the contract rather than acceptance of a unilateral variation) and Re Leyland DAF Ltd [1994] 4 All ER 300 at 315 (varied on other grounds sub nom Powdrill v Watson [1995] 2 AC 394). 109. Contrast, for example, Cowey v Liberian Operations Ltd, note 43 above with Ajax Cooke Pty Ltd v Nugent (1993) 5 VIR 551, both involving unilateral changes to benefits on termination allegedly accepted only by continued employment. 110. Vernon v Bethell (1762) 2 Eden 110 at 113; 28 ER 838 at 839, referred to approvingly in Irons v Merchant Capital Ltd, note 102 above at 206. See also Fruhauf Southwest Garment Co v United States 111 F Supp 945 (1953) at 951 and Scott v Executors of AE Merchant (1969) 4 ITR 319 at 324 (‘voluntary acceptance of new terms must be distinguished from taking Hobson’s choice’). A similar approach is taken when gauging the consent of an employee to an assignment by the employer to a new employer: the law requires ‘the real consent of the employee and not a constructive consent raised by operation of law’: Romero v Auty (2000) 19 ACLC 206; [2000] VSC 462 at [43] per Warren J: see 6.40. 111. Sheet Metal Components Ltd v Plumridge, note 90 above, at 376 per Sir John Donaldson and Shields Furniture Ltd v Goff, note 80 above, ICR at 190; All ER at 655–6. 112. See M Freedland, The Contract of Employment, note 86 above, pp 56–8; S Stoljar, ‘The Modification of Contracts’ (1957) 35 Can B Rev 485 at 510–2; J Carter et al, ‘Reactions to Williams v Roffey’ (1995) 8 JCL 248 and B Hough and A Spowart-Taylor, ‘The Doctrine of Consideration: Dead or Alive in English Employment Contracts?’ (2001) 17 JCL 193. 113. Equitable relief is less likely to be ordered to give effect to a variation made under seal that is unsupported by fresh consideration as equity will not aid a volunteer. See, for example, Dome Resources NL v Silver (2008) 72 NSWLR 693; [2008] NSWCA 322 at [54] and I Spry, The Principles of Equitable Remedies, 6th ed, LawBook Company, Sydney, 2001, pp 56–9. 114. Wigan v Edwards (1973) 1 ALR 497 at 512 per Mason J. This quote has been modified by adding the terms employer and employee. 115. Stilk v Myrick (1809) 2 Camp 317; 170 ER 851. 116. B Hough and A Spowart-Taylor, note 112 above. 117. Ajax Cooke Pty Ltd v Nugent, note 109 above, at 556–8; Betts v Brisbane Gas Co Ltd [1978] Qd R 429 at 431; Price v Rhondda Urban District Council [1923] 2 Ch 372 at 386; Parke v Daily News Ltd [1962] 2 All ER 929 at 938; Harrison v Dodd, note 30 above, at 49; Francis v Canadian Imperial Bank of Commerce (1994) 120 DLR (4th) 393; Swain v West (Butchers) Limited [1936] 3 All ER 261; Rahemtulla v Vanfed Credit Union (1984) 51 BCLR 200; Woolworths v Kelly (1991) 22 NSWLR 189 at 192; Lee v GEC Plessey Telecommunications, note 19 above, at 389; Sea-Land Service Inc v Cheong Fook Chee Vincent [1994] 3 SLR 6; Derksen v WASA Insurance Co (1994) 4 BCLR (3d) 73; Sloan v Union Oil Co of Canada (1955) 16 WWR 225 at 229–33; Maier v E & B Exploration Ltd [1986] 4 WWR 275 and Phillips v

Ellinson Brothers Pty Ltd (1941) 65 CLR 221 at 234 and 236. More recently the issue was considered in Francis v South Sydney District Rugby League Football Club Ltd [2002] FCA 1306 at [241]; Silver v Dome Resources NL (2007) 62 ACSR 539; [2007] NSWSC 455 at [127]– [138] and on appeal at Dome Resources NL v Silver, note 113 above, at [54]–[68]; Jones v TRW Ltd [2007] EWHC 1091 at [68]–[70]; Kornerup v Raytheon Canada Ltd (2007) 282 DLR (4th) 434 at [16]–[32]; GlaxoSmithKline Australia Pty Ltd v Ritchie (2008) 77 IPR 306; [2008] VSC 164 at [116]; Whitney v Monster Worldwide Limited [2009] EWHC 2993 at [150]–[153] (aff’d [2010] EWCA Civ 1312); Jones v Queensland Tertiary Admissions Centre Ltd (No 2) (2010) 186 FCR 22; 196 IR 241; [2010] FCA 399 at [212]; and Fardell v Coates Hire Operations Ltd, note 50 above, at [63]–[66]. 118. There is increasing support for the view that the consideration can consist of a ‘practical benefit’ to the employer, as discussed in 6.33–6.34. 119. J Carter et al, Contract Law in Australia, 5th ed, LexisNexis Butterworths, Australia, 2007, p 108. The employer must also provide consideration to support the promises made by the employee, such as an employee’s promise to accept more disadvantageous conditions; see Rahemtulla v Vanfed Credit Union (1984) 51 BCLR 200 and Burke v Royal Liverpool Hospital NHS Trust [1997] ICR 730 at 738. The focus in this section will be on the consideration provided by the employee where most of the problems with consideration in an employment context arise. 120. Currie v Misa (1875) LR 10 Ex 153 at 162; (1876) 1 AC 554: see 3.29. 121. Swain v West (Butchers) Limited, note 117 above. See also Francis v South Sydney District Rugby League Football Club Ltd, note 117 above, at [241] and Fratangelo v Secretary to the Department of Health & Community Services (VSC, Harper J, BC9803039, 3 July 1998, unreported) at 18–20. On the obligation to report and answer questions about the misdeeds of coworkers, see 7.21–7.22. 122. J Carter, ‘The Renegotiation of Contracts’ (1998) 13 JCL 185. 123. C Arup, ‘Altering the Terms of Employment and some recent developments in Contract of Employment Law’ (1979) 6 Mon LR 23 at 38–9. 124. See generally B Hough and A Spowart-Taylor, note 112 above. 125. See, for example, Price v Rhondda Urban District Council, note 117 above, at 386; Swain v West (Butchers) Limited, note 117 above; Parke v Daily News Ltd, note 117 above, at 938; Sea-Land Service Inc v Cheong Fook Chee Vincent, note 117 above; Phillips v Ellinson Brothers Pty Ltd, note 117 above, at 234 and 236 and Francis v South Sydney District Rugby League Football Club Ltd, note 117 above, at [241]. 126. See 6.37–6.39. 127. Francis v Canadian Imperial Bank of Commerce, note 117 above, at [26]. See also Rahemtulla v Vanfed Credit Union, note 119 above and GlaxoSmithKline Australia Pty Ltd v Ritchie, note 117 above, at [116]. 128. Stilk v Myrick, note 115 above. 129. Stilk v Myrick (1809) 6 Esp 129; see also Harris v Watson (1791) Peake 102. Espinasse appeared as junior counsel for Mr Stilk, though his skills as a reporter are not highly regarded; see Wessex Dairies Ltd v Smith [1935] 2 KB 80 at 84 and 87 (‘that collection of imperfect and misleading reports bearing the name of Espinasse’). 130. Hartley v Ponsonby (1857) 7 E & B 872 (pay rise enforceable by an employee who agreed to serve in perilous conditions, an obligation that he did not otherwise owe); Harris v Carter (1854) 3 E & B 559 at 561 (dicta that an agreement to serve on a voyage different and more dangerous

to that initially proposed might provide fresh consideration); Frazer v Hatton (1857) 2 CB (NS) 512; Hanson v Royden (1867) LR 3 CP 47 (agreement to perform the duties of a second mate rather than an able seaman was fresh consideration); Betts v Brisbane Gas Co Ltd [1978] Qd R 429 at 430 (agreeing to a no compete clause was an additional obligation) and Dome Resources NL v Silver, note 113 above, at [54]–[68] (fresh consideration provided by a managing director who agreed to continue to serve as a non-executive director). 131. Betts v Brisbane Gas Co Ltd, note 130 above, at 431–4. 132. New Zealand Shipping Co Limited v AM Satterthwaite and Co Limited [1975] AC 154 at 168; [1974] 1 All ER 1015 at 1021; Port Jackson Stevedoring Pty Ltd v Salmond and Spraggon (Aust) Pty Ltd (1978) 139 CLR 231 at 243–4; 18 ALR 333 at 243–4 (rev’d (1980) 144 CLR 300; 30 ALR 588) and Pao On v Lau Yiu Long [1980] AC 614 at 632; [1979] 3 All ER 65 at 76. 133. Collins v Godefroy (1831) 1 B & Ad 950; 109 ER 1040 and Ward v Byham [1956] 2 All ER 318. 134. Glasbrook Bros Ltd v Glamorgan County Council [1925] AC 270. 135. Ward v Byham [1956] 2 All ER 318 at 319 and Williams v Williams [1957] 1 WLR 148 at 151; 1 All ER 305 at 307. See also the series of cases discussed in D Greig and J Davis, The Law of Contract, Law Book Company, Sydney, 1987, pp 101–2 concerning the promises by holders of public offices to perform public duties in exchange for payments; B Coote, ‘Common Forms, Consideration and Contract Doctrine’ (1999) 14 JCL 116 and New Zealand Shipping Co Limited v AM Satterthwaite and Co Limited, note 132 above, AC at 168; All ER at 1021. 136. Ajax Cooke Pty Ltd v Nugent, note 109 above, at 556–8; Dome Resources NL v Silver, note 113 above, at [54]–[68]; Kornerup v Raytheon Canada Ltd, note 117 above, at [16]–[32]; Sloan v Union Oil Co of Canada, note 117 above, at 229–33; Francis v Canadian Imperial Bank of Commerce, note 117 above; Maier v E & B Exploration Ltd, note 117 above (employer introduced share plan to induce employees to remain in employment and the employee provided fresh consideration by continuing in employment); Burke v Royal Liverpool Hospital NHS Trust, note 119 above, at 738 (fresh consideration moving from the employer when the employee agreed to accept a pay cut to avoid the prospect that her employment would be terminated); Rundell v Bedford (1998) 28 ACSR 66 at 74–5 and the decision of the Singapore Court of Appeal in Sea-Land Service Inc v Cheong Fook Chee Vincent, note 117 above, discussed in J Carter et al, ‘Reactions to Williams v Roffey’ (1995) 8 JCL 248 at 262–4; cf Price v Rhondda Urban District Council, note 117 above, at 386 (dicta that the continuation in employment of an employee in exchange for a right to improved job security is not consideration for the concession); the dicta in Parke v Daily News Ltd, note 117 above, at 938; the treatment of the 1975 grant of rights to a pension in Woolworths v Kelly, note 117 above, at 194–5 and Fardell v Coates Hire Operations Ltd, note 50 above, at [63]–[66]. 137. Phillips v Ellinson Brothers Pty Ltd, note 117 above, at 234 and 236; Stilk v Myrick, note 115 above; and Frazer v Hatton, note 130 above. Contrast with Harris v Carter, note 130 above, at 561 in which it was suggested that an agreement to serve on a voyage different to that initially proposed might provide the consideration to support a variation and Hartley v Ponsonby, note 130 above, in which the agreement to serve on a return voyage which was more dangerous to that initially proposed provided the consideration to support a variation. 138. Derksen v WASA Insurance Co, note 117 above; see also Maier v E & B Exploration Ltd, note 117 above, at 281–2. 139. Williams v Roffey Bros Ltd [1991] 1 QB 1 at 11, 15–16, 19, 20–21; [1990] 1 All ER 512 at 518, 522, 524–7. 140. Williams v Roffey Bros Ltd, note 139 above, QB at 15–16; All ER at 522; J Carter et al,

‘Reactions to Williams v Roffey’ (1995) 8 JCL 248 at 253; M Chin-Wishert, ‘Consideration: Practical Benefit and the Emperor’s New Clothes’ in J Beatson and D Friedmann (eds), Good Faith and Fault in Contract Law, Clarendon Press, Oxford, 1995, pp 123 and 125–6. 141. See Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723 at 746–7, referred to approvingly in Director of Public Prosecutions (Vic) v Le (2007) 232 CLR 562; 240 ALR 204 at [43]; Ajax Cooke Pty Ltd v Nugent, note 109 above, at 557–8 and Lee v GEC Plessey Telecommunications, note 19 above, at 389. See also Sea-Land Service Inc v Cheong Fook Chee Vincent, note 117 above and Silver v Dome Resources NL, note 117 above, at [127]–[138] (aff’d (2008) 72 NSWLR 693; [2008] NSWCA 322). 142. Based on Musumeci v Winadell Pty Ltd, note 141 above, at 746–7. 143. Lee v GEC Plessey Telecommunications, note 19 above, at 389; Williams v Roffey Bros Ltd, note 139 above, QB at 16; All ER at 522; Whitney v Monster Worldwide Limited, note 117 above, at [150]–[153] (aff’d [2010] EWCA Civ 1312) and Jones v TRW Ltd, note 117 above, at [68]–[70]. 144. Lee v GEC Plessey Telecommunications, note 19 above, at 389 and Ajax Cooke Pty Ltd v Nugent, note 109 above, at 557–8. 145. Though it is a fiction it may be said to accord with the dicta of Lord Wilberforce that the ‘English law, having committed itself to a rather technical and schematic doctrine of contract, in application takes a practical approach, often forcing the facts to fit uneasily into the marked slots of offer, acceptance and consideration’: New Zealand Shipping Co Limited v AM Satterthwaite and Co Limited, note 132 above, AC at 167; All ER at 1021. Sir Guenter Treitel also refers to the need for ‘invented consideration’ where demanded by expediency in E Peel, The Law of Contract, 12th ed, Sweet and Maxwell, London, 2007, p 78. 146. On the need for promises to be certain, see 3.51. 147. In other fields of contract the novation more commonly involves the substitution of one party for another, though the issue can arise in an employment context. See, for example, Alderson v St Columba-Kingswood College (2004) 135 IR 27 at 38–9; in the context of a change in the members of a partnership see 13.30–13.31; in the context of a change in the membership of an unincorporated ‘employer’, Carlton Cricket & Football Social Club v Joseph [1970] VR 487 at 497; Freeman v McManus [1958] VR 15 at 21 and Peckham v Moore [1975] 1 NSWLR 353 at 362. To alter the parties to the contract the consent of both parties will be required, whether this arises as the result of an attempted assignment of the contract or a novation. See 6.40–6.42 and McCluskey v Karagiozis (2002) 120 IR 147; [2002] FCA 1137 at [11]–[13]. 148. See J Bailey, ‘Novation’ (1999) 14 JCL 189 at 194–5 and Advertiser Newspapers Pty Ltd v Industrial Relations Commission (SA), note 13 above, at [38]–[39]. 149. See the dicta of Lord Denning MR in Marriott v Oxford and District Co-Operative Society Ltd (No 2), note 59 above, at 191–2 and Adams Union Cinemas Ltd, note 101 above, at 171. 150. Concut Pty Ltd v Worrell (2000) 176 ALR 693; 103 IR 160 at [19]; FCT v Sara Lee Household & Body Care (Aust) Pty Ltd (2000) 201 CLR 520; 172 ALR 346 at [22]–[24]. 151. SW Strange Ltd v Mann, note 47 above, WLR at 636–7; All ER at 1075 (the novation meant that the restraint of trade clause in the original contract did not form part of new contract); Quinn v Jack Chia (Australia) Ltd [1992] 1 VR 567 at 579; Reilly v Praxa Ltd, note 26 above (the novation meant that the notice clause in the original contract did not form part of new contract); Robins v Power (1858) 4 CB (NS) 778; 140 ER 1297 and McKay v Abbey Vale Estate Pty Ltd, note 108 above, at [28]; cf Meek v Port of London Authority [1918] 2 Ch 96 at 100. See also Ridgeway International Ltd v McCullum [1998] NSWSC 151 and Lythgoe v Baycorp Advantage

Ltd [2004] FCA 1198 at [142]–[147]. 152. Olsson v Dyson (1969) 120 CLR 365 at 388–9; Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd (2006) 149 FCR 395; 230 ALR 56; [2006] FCAFC 40 at [57]–[67] and Fightvision Pty Ltd v Onisforou (1999) 47 NSWLR 473; [1999] NSWCA 323 at [78]. On assignments see 6.40–6.45. 153. Concut Pty Ltd v Worrell, note 150 above, at [19] and [56]–[58]; Tallerman & Co Limited v Nathan’s Merchandise (Vic) Limited (1957) 98 CLR 93 at 122–5, 135 and 144; Encyclopaedia Britannica Australia Ltd v Campbell [2009] NSWCA 286 at [50]–[57]; Cumbria County Council v Dow (No 2), note 7 above, at [12] and [41]; SW Strange Ltd v Mann, note 47 above, WLR at 637; All ER at 1075 and Potter v North Cumbria Acute Hospitals NHS Trust, note 27 above, at [65] and [95]; see 3.5–3.7. 154. Quinn v Jack Chia (Australia) Ltd, note 151 above, at 575–6 and Federated Mutual Insurance Co. of Australia Ltd v Sabine [1920] SALR 284 at 292. It is possible, though rare, for the parties to terminate one contract and replace it with another on identical terms. See Re Mack Trucks (Britain) Ltd [1967] 1 WLR 780; [1967] 1 All ER 977. 155. Quinn v Jack Chia (Australia) Ltd, note 151 above, at 575. Employers and employees are unlikely to appreciate the significance of the difference between a variation and a novation or use such unambiguous language. See J Carter, ‘The Renegotiation of Contracts’ (1998) 13 JCL 185 and J Hunter, ‘Commentary on “The Renegotiation of Contracts” ’ (1998) 13 JCL 205. 156. Quinn v Jack Chia (Australia) Ltd, note 151 above, at 575–8; Reilly v Praxa Ltd, note 26 above, at [15]–[16]; Potter v North Cumbria Acute Hospitals NHS Trust, note 27 above, at [72]; Cumbria County Council v Dow (No 2), note 7 above, at [12]; Marriott v Oxford and District CoOperative Society Ltd (No 2), note 59 above, at 191 (the change must be ‘so fundamental that nobody could claim that the original contract was still in being’); Hogg v Dover College, note 48 above, at 42 (hours and salary significantly reduced); Alcan Extrusions v Yates [1996] IRLR 327 (a radically different shift system) and Preston v Wolverhampton Healthcare NHS Trust (No 3) [2004] ICR 993 at 1037–8 (move from part-time, hourly employment to full-time, pensionable employment on an annual salary). See also Brackenridge v Toyota Motor Corporation Australia Ltd, note 16 above, at 105–6. 157. Cumbria County Council v Dow (No 2), note 7 above, at [40]. 158. Quinn v Jack Chia (Australia) Ltd, note 151 above, at 575 (non-automatic promotion and pay rise was novation); O’Connor v The Argus and Australasian Ltd, note 47 above (non-automatic demotion was a termination of the contract and an offer of new employment); Meek v Port of London Authority, note 151 above, at 100 (non-automatic promotion and pay rise was novation); Adrema Ltd v Jenkinson [1945] KB 446; 2 All ER 29 (non-automatic promotion did not terminate the contract: a wartime case arising from a criminal prosecution); Dale v William McCulloch and Co (Ltd) (1883) 9 VLR (L) 136 (agreed demotion created a new contract); Federated Mutual Insurance Co of Australia Ltd v Sabine [1920] SALR 284 at 292 (nonautomatic promotion created a new contract); Brackenridge v Toyota Motor Corporation Australia Ltd, note 16 above, at 105–6 (disciplinary demotion was a novation); SW Strange Ltd v Mann, note 47 above, WLR at 636–7; All ER at 1075 (demotion and pay cut was a novation); Raggow v Scougall and Co (1915) 31 TLR 564 (pay cut was novation); cf Lythgoe v Baycorp Advantage Ltd, note 151 above, at [141]–[147]. For the reasons expressed in Concut Pty Ltd v Worrell, note 150 above, courts are usually slow to conclude that an employment contract has been novated. There is a third possibility, namely, that the contract permits the employer to unilaterally alter the wages or responsibilities of the employee: see 6.6 and 6.14. 159. See further at 13.18 and 13.20.

160. Romero v Auty, note 110 above, at [43] per Warren J; Denham v Midland Employers Mutual Assurance Ltd [1955] 2 QB 437 at 443; [1955] 2 All ER 561 at 564. 161. Norman v Federal Commissioner of Taxation (1963) 109 CLR 9 at 26. See also G Tolhurst, The Assignment of Contractual Rights, Hart Publishing, Oxford, 2006, pp 32–3. The contract of assignment may still be enforceable as between assignee and assignor (or may otherwise affect the rights of assignee and assignor) even if some of the property that is the subject of the assignment contract is not assignable. See Don King Productions Inc v Warren [2000] Ch 291; [1999] 2 All ER 218. 162. Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd [1994] 1 AC 85 at 103; [1993] 3 All ER 417 at 427 and Tolhurst v Associated Portland Cement Manufacturers (1900) Ltd [1902] 2 KB 660 at 668–9. See also Nokes v Doncaster Amalgamated Collieries Ltd [1940] AC 1014 at 1018; 3 All ER 549 at 551. On express agreements to assign the contract, see the cases at note 168. 163. See 6.38. 164. Finance Sector Union of Australia v Commonwealth Bank of Australia (2001) 111 IR 241; [2001] FCA 1613 at [60]–[64] (rev’d on other grounds (2002) 125 FCR 9; 190 ALR 497; [2002] FCAFC 193); Gothard v Davey (2010) 80 ACSR 56; [2010] FCA 1163 at [206]–[210] and G Rossiter, ‘The Seconded or Transferred Employee’ [2007] NZLJ 265. 165. Tolhurst v Associated Portland Cement Manufacturers (1900) Ltd, note 162 above, at 668; Davies v Collins [1945] 1 All ER 247 at 249; Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd, note 162 above, AC at 103; All ER at 427 and M Furmston, ‘The Assignment of Contractual Burdens’ (1998) 13 JCL 42. This rule is subject to the proposition that a statute may assign the burden of a contract. 166. See A Goodhart and C Hamson, ‘Undisclosed Principals in Contract’ [1932] 4 Cam LJ 320 at 340–1 and 356 and 3.84. 167. M Smith, The Law of Assignment, Oxford University Press, Oxford, 2007, p 338; Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd, note 152 above, at [32] and Don King Productions Inc v Warren [1998] 2 All ER 608 at 632 (‘assignability is not a question of all obligations arising under the contract or none at all’) (aff’d [2000] Ch 291; [1999] 2 All ER 218). Examples of the assignment of contractual rights in an employment context include the cases referred to in note 183 and Hamilton v Lethbridge (1912) 14 CLR 236 at 268–70 (assignment by the employer of the right to the benefit of a restraint of trade covenant). 168. Peacocke Land Co Ltd v Hamilton Milk Producers Co Ltd [1963] NZLR 576 at 582–3; DevefiPty Ltd v Mateffy Pearl Nagy Pty Ltd (1993) 113 ALR 225 at 235 and Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd, note 152 above, at [61]. On the operation of a clause prohibiting assignment of a particular right, see G Tolhurst, ‘The Efficacy of Contractual Provisions Prohibiting Assignment’ (2004) 26 Syd LR 161. 169. Tolhurst v Associated Portland Cement Manufacturers (1900) Ltd, note 162 above, at 668 and on appeal at [1903] AC 414 at 417; Rodger v Herbertson [1909] SC 256 at 260 and 265–6; Davies v Collins, note 165 above, at 250; DevefiPty Ltd v Mateffy Pearl Nagy Pty Ltd, note 168 above, at 235; Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd, note 152 above, at [57]–[62]; Southway Group Ltd v Wolff (1991) 57 BLR 33 at 52 and 53 and Carter v Hyde (1923) 33 CLR 115 at 120–1. See also Finance Sector Union of Australia v Commonwealth Bank of Australia, note 164 above, at [64] (employee rejected an offer of employment by the alleged assignee) (rev’d on other grounds (2002) 125 FCR 9; 190 ALR 497; [2002] FCAFC 193). 170. Tolhurst v Associated Portland Cement Manufacturers (1900) Ltd, note 162 above, at 668 per

Collins MR; Moore v Collins [1937] SASR 195 at 201–4 and G Tolhurst, The Assignment of Contractual Rights, Hart Publishing, Oxford, 2006, p 214. 171. Bruce v Tyley (1916) 21 CLR 277 at 284–5 and 289; Carter v Hyde, note 169 above, at 121; Robson v Drummond (1831) 2 B & Ad 303; 109 ER 1156 at 1158–9; Rodger v Herbertson, note 169 above, at 260–1 and British Waggon Company v Lea & Co (1880) 5 QBD 149 at 153–4. See also Hole v Bradbury (1879) 12 Ch D 886 at 896–7 and Griffith v Tower Publishing Co Ltd [1896] 1 Ch 21 at 24. 172. Nokes v Doncaster Amalgamated Collieries Ltd, note 162 above; McCluskey v Karagiozis, note 147 above, at [11]–[13]; Don King Productions Inc v Warren, note 167 above, at 632–3 (aff’d [2000] Ch 291; [1999] 2 All ER 218); Strevens v Lawson Mardon Group Ltd (1997) 29 CCEL (2d) 240 and Mersey Docks and Harbour Board v Coggins and Griffith (Liverpool) Ld [1947] AC 1 at 14 and 15. In Nokes the rule led to the anomalous result that for the final six months of Nokes’ employment he was not employed by the entity that paid his wages. Nor could he have been employed in that period by his former employer as it had ceased to exist by order of the Chancery Division of the High Court of Justice. 173. Nokes v Doncaster Amalgamated Collieries Ltd, note 162 above, AC at 1020; All ER at 552 per Viscount Simon. See also Lord Atkin at 1026 (at 556 of All ER) and Holmes J in American Colortype Co v Continental Colortype Co 188 US 104 (1913) at 107: ‘Service is like marriage … [it] may be repeated, but substitution is unknown’. Another basis for the rule is advanced in Tolhurst v Associated Portland Cement Manufacturers (1900) Ltd, note 162 above, at 669 and reformulated in Don King Productions Inc v Warren, note 167 above, at 632–3 (aff’d [2000] Ch 291; [1999] 2 All ER 218), namely that the effect of an assignment of the obligation to serve from the employer to a third party affects the substance of the obligation to serve. 174. Griffith v Tower Publishing Co Ltd, note 171 above, at 24–5; Nokes v Doncaster Amalgamated Collieries Ltd, note 162 above, AC at 1030–1; All ER at 559–60 and Southway Group Ltd v Wolff, note 169 above, at 50 and 55. 175. Nokes v Doncaster Amalgamated Collieries Ltd, note 162 above, AC at 1022–4 1033, 1035; All ER at 554–6, 561–3. See also Alderson v St Columba-Kingswood College, note 147 above, at 38. 176. Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd, note 152 above, at [32]. 177. Russell & Co v Austin Fryers (1909) 25 TLR 414; Tom Shaw and Co Ltd v Moss Empires (Limited) (1908) 25 TLR 190 at 191; British Waggon Company v Lea & Co, note 171 above, at 153–4; Crouch v Martin (1707) 2 Vern 595; 23 ER 987 (valid assignment of seaman’s wages) and Don King Productions Inc v Warren, note 167 above, at 632–3 (aff’d [2000] Ch 291; [1999] 2 All ER 218). 178. King v Michael Faraday and Partners Ltd [1939] 2 KB 753 at 763–4 and Horwood v Millar’s Timber and Trading Co Ltd [1917] 1 KB 305 at 311. 179. Methwold v Walbank (1750) 2 Ves Sen 238; 28 ER 153; Barwick v Reade (1791) 1 H Bl 267; 126 ER 358; Re Miriams [1891] 1 QB 594 at 595–6 and Liverpool Corporation v Wright (1859) Johns 358; 70 ER 461 at 369. See also M Smith, The Law of Assignment, Oxford University Press, Oxford, 2007, pp 314–6. The authorities are reviewed and critiqued in D Logan, ‘A Civil Servant and His Pay’ (1945) 61 LQR 240. As to the partial assignment of salaries of public officers, see Field v Battye [1939] SASR 235 at 243–4 and 248–9. 180. Hamilton v Lethbridge, note 167 above, at 268–70. See, however, Rodger v Herbertson, note 169 above, at 260 and 265–6 and A Schneid, ‘Assignability of Covenants Not to Compete: When Can a Successor Firm Enforce a Noncompete Agreement?’ (2006) 27 Cardozo LR 1485.

See the discussion in Briggs v Oates [1991] 1 All ER 407 at 412 and 416; [1990] ICR 473 at 479 181. and 482–3 and Tunstall v Condon [1980] ICR 786 at 791. 182. Vicarious performance is discussed in 9.53–9.54. 183. See, for example, Bruce v Tyley, note 171 above, at 284. 184. Moore v Collins, note 170 above, at 205 and Williams v Nicoski [2003] WASC 131 at [53]. 185. Nokes v Doncaster Amalgamated Collieries Ltd, note 162 above, AC at 1026; All ER at 556 per Lord Atkin. 186. See the judgments of Murphy J on the constitutional freedom from slavery: R v Director General of Social Welfare (Victoria); Ex parte Henry (1975) 133 CLR 369 at 388; 8 ALR 233 at 248; Seamen’s Union of Australia v Utah Development Co (1978) 144 CLR 120 at 158; 22 ALR 291 at 319; General Practitioners Society in Australia v Commonwealth of Australia (1980) 145 CLR 532 at 565; 31 ALR 369 at 394–5. 187. Nokes v Doncaster Amalgamated Collieries Ltd, note 162 above, AC at 1024 and 1026; All ER at 554 and 556; Minister for Employment and Workplace Relations v Gribbles Radiology Pty Ltd (2005) 222 CLR 194; 214 ALR 24; 138 IR 252 at [48]; Adamson v New South Wales Rugby League Ltd (1991) 31 FCR 242 at 267–8; 103 ALR 319 at 342–3. 188. M Freedland, The Personal Employment Contract, note 4 above, pp 491ff. The facts of Yetton v Eastwoods Froy Ltd [1967] 1 WLR 104; [1966] 3 All ER 353 and Re Foster Clark Ltd’s Indenture Trusts [1966] 1 WLR 125 are illustrative of a similar situations. See also L DiMatteo, ‘Depersonalization of Personal Services Contracts: The Search for a Modern Approach to Assignability’ (1993) 27 Akron LR 407. 189. See Deutz Australia Pty Ltd v Skilled Engineering Ltd (2001) 162 FLR 173; [2001] VSC 194 at [103]–[116]. See also Attorney-General (NSW) v Perpetual Trustee Co (Ltd) (1952) 85 CLR 237 at 299–300 per Kitto J (‘the statement that the doing of the work must be for the benefit of the master does not mean, of course, that the direct benefit from the work itself must necessarily accrue to the master; he may, without altering the relationship, direct his servant to do work which will benefit another’) and Gothard v Davey, note 164 above, at [227]. Such an arrangement does not affect the assignment of rights to the temporary employer and there is no contractual relationship between the employee and the temporary employer. 190. Cases in which a court has found a repudiation or a serious breach justifying termination include the cases at note 59 (changes to duties or demotion); note 71 (changes to remuneration) and note 88 (changes to location of employment). 191. See 10.38–10.49. 192. See 10.99. 193. See Advertiser Newspapers Pty Ltd v Industrial Relations Commission (SA), note 13 above, at [38]–[39]; cf Bashir v Brillo Manufacturing Co, note 48 above, at [14]. 194. Sargent v ASL Developments Ltd (1974) 131 CLR 634 at 656; 4 ALR 257 at 274: see 10.89. 195. Brompton v AOC International Ltd [1997] IRLR 639 (the employee did not make an election for six years between the date of the wrongful dismissal and the employee’s death); Sargent v ASL Developments Ltd, note 194 above. 196. Rigby v Ferodo Ltd, note 44 above, at 35 (no acceptance inferred from continued employment for years at a reduced rate of pay after the rejection of an offer) and Burdett-Coutts v Hertfordshire County Council, note 45 above (no acceptance inferred from continued employment for 18 months at a reduced rate of pay after the rejection of an offer).

197. See, for example, Irons v Merchant Capital Ltd, note 102 above, at 206–7 and Henry v London General Transport Services, note 107 above, at 915–6: see 6.24. 198. WE Cox Toner International Ltd v Crook [1981] ICR 829; Cantor Fitzgerald International v Callaghan [1999] ICR 639 at 652–3 and Advertiser Newspapers Pty Ltd v Industrial Relations Commission (SA), note 13 above, at [43]–[47]: see 10.96–10.99. 199. Shields Furniture Ltd v Goff, note 80 above, ICR at 190; All ER at 655–6; Air Canada v Lee, note 90 above (no acceptance during trial of four weeks); Sheet Metal Components Ltd v Plumridge, note 90 above, at 376; Marriott v Oxford and District Co-Operative Society Ltd (No 2), note 59 above (no acceptance in the four weeks following unilateral reduction in pay as employee searched for a new job) and Reid v Camphill Engravers [1990] ICR 435 at 439–40 (yearly complaints of underpayment of wages did not affirm in the context of a continuing breach). 200. See 10.69–10.71. 201. See the reporting of Stilk v Myrick (1809) 6 Esp 129 by Espinasse and Harris v Watson (1791) Peake 102 where Lord Kenyon linked the rule to the avoidance of extravagant demands in times of danger. 202. Musumeci v Winadell Pty Ltd, note 141 above, at 746–7 discussed in 6.34 and 6.35. 203. See Bank of Credit and Commerce International SA (in liq) v Ali [2000] ICR 1410 at 1415 (aff’d on other grounds [2002] 1 AC 251; [2001] 1 All ER 961). See generally Scaffidi v Perpetual Trustees Ltd [2011] WASCA 159 at [14]–[33]. 204. McDermott v Black (1940) 63 CLR 161 at 187 and Federal Commissioner of Taxation v Orica Ltd (1998) 194 CLR 500; 154 ALR 1 at [114]–[116]. 205. Chelsea Football and Athletic Co v Heath [1981] ICR 323 at 327 (discussion of issues concerning release from contractual claims compared with a statutory claim for unfair dismissal) and Bank of Credit and Commerce International SA v Ali, note 203 above (release construed so as not to cover claims arising from the employer’s fraud that the employee was unaware of at the time of execution). See also Grant v John Grant & Sons Pty Ltd (1954) 91 CLR 112 and McDermott v Black, note 204 above, at 176–7 and 183–8. 206. This is the rule in Pigot’s Case (1614) 11 Co Rep 26b. See generally Raiffeisen Zentralbank Osterreich AG v Crosseas Shipping Ltd [2000] 1 WLR 1135 at 1142—9; Farrow Mortgage Services Pty Ltd v Slade (1996) 38 NSWLR 636 at 639—40; Armor Coatings (Marketing) Pty Ltd v General Credits (Finance) Pty Ltd (1978) 17 SASR 259 at 281—2 and Warburton v National Westminster Finance Australia Ltd (1988) 15 NSWLR 238 at 243—5.

[page 336]

Chapter 7 The Duties of Employees Overview The Duty to Serve and Industrial Action The duty to serve and cooperate Industrial action and the employment contract Scope of the Employment Duties defined by scope of the employment and related concepts The scope defines the limits of some duties The nature of the engagement and the scope of the employment Express terms and consent The course of dealings and obedience to orders The scope of employment and acts done outside of work The course of the employment Duty to Obey Directions, Answer Questions and Disclose Misconduct The duty to obey directions Unreasonable directions Directions and safety Consequences of a breach: the right to terminate Disclosing misdeeds: prospective employees and employers Deceit Reporting one’s own misdeeds Reporting the misdeeds of others

Answering questions honestly Duty to Use Care and Skill Statement of the duty Statutory modifications of the duty [page 337] Consequence of a breach of the duty: damages Consequences of a breach: the right to terminate The Duty of Fidelity Overview of the contractual, statutory and fiduciary duties of fidelity The five rules of fidelity and their qualifications The centrality of loyalty The various and divided loyalties of employees Contractual consequences of a breach Employees as fiduciaries and the role of contract Differences between the contractual and fiduciary duties The conflict of duty and interest rule Conflict of duty and duty: employment by more than one employer Misuse of the employee’s position (the no profit rule) Duty to account for property Misuse of information Is there a positive duty to advance the employer’s business? Common Issues Applicable to all of the Duties of Fidelity Advantaging the employee, or another, or causing detriment to the employer

Duration of the contractual and fiduciary obligation Disclosure and informed consent Honesty, good faith and collateral purposes Aspects of the Duty Relating to Competition Competing with employer The scope of the obligations Competition during employment Competing for employees and suppliers Work within and outside of ordinary hours Preparing for post-employment competition Resigning to secure a maturing business opportunity Secret Benefits and Accounting for the Employer’s Property Obtaining the advantage of secret benefits Types of secret benefits and the connection with employment Secrecy, informed consent and the consequences of receiving a secret benefit Consequences of breach: the right to terminate [page 338] Ownership of the Work, Inventions and Intellectual Property Ownership of the product of work The connection between the invention and the employment Accounting to the employer for inventions Ownership of copyright and designs The Contractual, Equitable and Statutory Duties of Confidence

The unhappy mixture Definitions and the principles briefly stated The equitable duty of confidence Implied and express contractual duties of confidence Elements of the Action of Breach of Confidence and Defences Imparted in circumstances importing an obligation Identifying the specific information What is confidential information? Misuse of the information Detriment Defences and limits to liability Acts Incompatible with the Employment and the Mutual Duty of Trust and Confidence The historical development of the duty Acts inconsistent with employment and the scope Sex, drugs, crime and abuse

OVERVIEW 7.1 This chapter examines the duties of employees. Employees must serve in accordance with the contract, comply with the contract’s express obligations and the duty to cooperate: see 7.2. Employees also have four implied contractual duties: the duty to obey directions (see 7.12–7.23), the duty to use care and skill (see 7.24–7.28), the duty of fidelity (see 7.29–7.140) and the duty not to commit acts inconsistent with the employment, which is the employee’s duty under the implied term of mutual trust and confidence: see 7.136–7.141. The duty to obey orders and the duty of fidelity are defined in part by the common concept of the scope of the employment: see 7.5–7.11. The first three of the implied duties identified above arise from intermediate terms implied in law. A non-serious breach of any of them does

not give rise to a right to terminate: see 7.17, 7.28 and 7.39. Whether the breach gives rise to a right to terminate depends on the application of [page 339] the tests discussed in 10.3 and 10.38. The implied term of mutual trust and confidence is probably a condition and any breach of the term will give rise to a right to terminate: see 7.136 and 8.27. The duty of fidelity is also a fiduciary duty, subject to one gloss mentioned below. The contractual and fiduciary duties of fidelity are, with some minor exceptions, co-extensive and concurrent. There are five overarching rules that govern the duty of fidelity: an employee must not perform an act involving a conflict of duty to the employer and self-interest (the conflict of interest rule): see 7.46; an employee must not engage in an inconsistent engagement with a third party (the conflict of duties rule): see 7.48–7.49; an employee must not misuse his or her position (the no profit rule): see 7.50–7.51; an employee must not misappropriate the company’s property: see 7.52–7.55; and an employee must not misuse information: see 7.56–7.59. These overarching rules apply in a variety of settings covering competition with the employer (see 7.76–7.93), the receipt of secret profits and bribes (see 7.94–7.100), the ownership of work, inventions and intellectual property (see 7.101–7.110) and the use of the employer’s information: see 7.56–7.59 and 7.111–7.135. The employee’s post-employment obligations concerning the use of information are discussed in 16.41–16.49. The contractual and fiduciary duty of fidelity does not impose an obligation on the employee unless, in relation to the particular act in question, the employer is entitled to the undivided loyalty of the employee: see 7.34–7.38. Nor does the contractual and fiduciary duty of fidelity impose

obligations on the employee in relation to acts outside of the scope of the employment, although this proposition requires a slight modification when applied to the no profit rule and the rule governing the misuse of confidential information: see 7.5–7.11. The duty of fidelity does not apply when the employer has given informed consent to the act: see 7.69–7.71. The gloss on the foregoing is that the obligation not to misuse confidential information is an equitable, and not a fiduciary, duty: see 7.57.

THE DUTY TO SERVE AND INDUSTRIAL ACTION The duty to serve and cooperate 7.2 The essence of the employee’s obligation under a contract of employment is to serve in accordance with the contract. The absence of a promise to serve by an employee will mean that the contract will often [page 340] fail for want of mutuality, unless supported by some other consideration: see 3.32. Service is the usual condition to earning wages: see 9.9. The duty to serve is often inaccurately described as a duty to ‘faithfully serve’.1 Faithful service means service in accordance with the duty of fidelity, which is discussed in 7.29–7.135. Merging the duty to serve with the contractual and fiduciary duty of fidelity results in unnecessary complexity. The duty to serve is only contractual. The duty to attend and perform work is not a fiduciary obligation. Nor is engaging in unlawful industrial action a breach of a fiduciary duty. The employee has a duty, created by a term implied in law, to cooperate in the doing of acts necessary for the performance of the fundamental obligations under the contract: see 8.33. The failure to perform service in accordance with the contract will be a breach by the employee in the absence of a legally acceptable excuse for non-

performance. Acceptable excuses vary according to the terms of the contract and any statutory rights, such as the right to annual leave or sick leave or to take protected industrial action. A serious breach or repudiation by the employer may have the effect of absolving the employee from the obligation to serve. For example, if an employer has indicated that it will not pay an employee for future work then the employee is not obliged to perform that work, even when the employee has not elected to terminate. This rule applies to service during the employment relationship and after the termination of that relationship. It is not necessary for a dismissed employee to attend the premises and do a nugatory act.2 Dispensation with the requirement to serve (or the prevention of performance) is not the same as service as it will not earn wages.3 A wrongfully dismissed employee who seeks to affirm the contract must be ready, willing and able to serve, and will have elected to terminate by taking a step that makes it impossible for him or her to serve, such as by taking up inconsistent employment.4 [page 341]

Industrial action and the employment contract 7.3 Industrial action takes many forms, and in virtually every one it involves a breach of the obligation to serve.5 There are various definitions of industrial action, but in essence they all involve an employee performing work in a manner different to that required by the contract. A work to rule that appears to involve a strict and literal compliance with the terms of the contract may be a breach of the duty of cooperation.6 There may be exceptions to the proposition that industrial action will be a breach of contract, but they are rare and narrow. Lord Denning once held a view, which has not been adopted by the common law, that during a strike the employment contract was suspended.7 The obligation to serve may be altered when the employer has repudiated the contract, is unable to pay wages for the service, is not providing a safe workplace or has agreed to dispense with the service.8 Giving notice of the intention to terminate is the exercise of a right under the contract, not a breach of it.9

7.4 Whether industrial action is a repudiation is a different matter. A repudiation based on a refusal to perform involves an intention to no longer be bound by the contract: see 10.22. Although it depends on the type of action engaged in, taking industrial action will often exhibit an intention to continue with the employment rather than terminate it.10 Whatever the intention about continuing to perform the contract, industrial action will usually be a breach of the obligation to serve which, if sufficiently serious, will justify the termination of the contract. [page 342] The seriousness of the breach depends on the factors and matters discussed in 10.38. Industrial action causing little damage or disruption to an employer may not be sufficiently serious to justify termination. There is authority to support the view that in the United Kingdom, in some circumstances, engaging in industrial action will not be a breach of the implied term of trust and confidence. Both parties know at the commencement of the relationship that, from time to time, employees may engage in industrial action in an attempt to improve their respective rights. Engaging in the contemplated conduct, it has been decided, is not likely to seriously damage or destroy the relationship.11 Industrial action is defined broadly in s 19 of the Fair Work Act 2009 (Cth). National system employees and employers have the right to engage in protected industrial action. When the industrial action is unprotected, Fair Work Australia (FWA) may order the employee to cease engaging in the action and the Federal Court can issue an injunction. The practical effect of these orders is to compel the performance of the contract by the employee. There are limitations on payments to employees who engage in industrial action. A detailed examination of the scheme governing industrial action under the Fair Work Act is beyond the scope of this text.12

SCOPE OF THE EMPLOYMENT Duties defined by scope of the employment and related

concepts 7.5 There are a series of duties of employees that are defined by reference to the concept of the scope of employment. The employee’s obligation to obey orders and to answer questions from their employer only applies to matters within the scope of the employment.13 The conflict of duty and interest rule, discussed in 7.46–7.47, is limited by the duty of the employee, a concept defined by the scope of the employment. The conflict of duties rule discussed in 7.48–7.49 has a similar ambit. As a consequence an employee is free to pursue business opportunities and engage in other employment outside of the scope of employment.14 [page 343] Not all of the employee’s obligations are defined by the scope of the employment. The misuse of the position rule, the misuse of the confidential information rule and the duty to account applies to acts done and advantages acquired in the course of, or by reason of, the course of employment: see 7.50–7.55 and 7.122–7.123. The notion of the course of employment in this context is discussed further in 7.11. An employee’s duty not to commit an act inconsistent with the employment is probably not circumscribed by the scope of employment: see 7.140. The statutory duty imposed by s 182 of the Corporations Act 2001 (Cth) applies when an employee misuses his or her position and s 183 applies when an employee ‘obtains information because they are’ an employee.

The scope defines the limits of some duties 7.6 Historically, inferior servants were subject to the complete dominion of the master for every hour of the day: see 1.26. It was a model of engagement ill-suited to developing clear distinctions between the acts the servant was obliged to perform, and those he or she could refuse to perform without fear of being sent for correction by the magistrates. Currently, the parties themselves determine the scope of their commitments through the medium of contract.15 The discarded master and servant model, premised on dominion

over the servant, is not the starting point of any consideration of the scope of the employment. The scope of the employment depends on three matters: the nature of engagement, the express terms of the contract and the course of dealing between the parties: see 7.7–7.9. The scope of the employment, the subject matter of the employment and the ambit of the employment are synonymous notions.16 The subject matter over which the employee’s fiduciary obligations extend is similarly determined by the nature of the employment, the terms of the agreement and the course of dealing between the parties.17 The nature of the engagement, whether as a manual employee or a CEO, will [page 344] be relevant in determining if and what fiduciary duties are owed.18 The fact that an employment relationship, one of the recognised categories of fiduciary relationship, exists does not determine whether a fiduciary duty is owed in relation to a particular act: ‘the existence of a fiduciary relationship does not determine the content of the duties owed by one fiduciary to another’.19 The content of the duty is derived from and circumscribed by what the employee undertakes to do on behalf of the employer.20 The same approach to defining the scope of the duty is taken to determine the scope of the contractual duty of fidelity.21 For example, determining the scope of the implied contractual obligations governing the ownership of inventions differs little, if at all, from the parallel problem in fiduciary law of defining the subject matter over which the employee’s fiduciary obligations governing the ownership of inventions extend.22

The nature of the engagement and the scope of the employment 7.7 The nature of the employee’s engagement partly defines the scope of the employment. The nature of the engagement is partly defined by reference to

the type of work performed by the employee, which in turn affects what fiduciary duties are owed.23 The scope of the employment of an unskilled worker will be far narrower than that of a managing director. The relevance of the nature of the employment is illustrated by the cases dealing with the obligation to hold inventions on trust for the employer. The scope of the employment defines the boundaries of the obligation to hold inventions on trust. Those employees engaged to invent (such as designers) are more likely to have such an obligation compared with those engaged outside of that stream (such as salespeople).24 Employees engaged to invent some products, or manage some part of the business, may not have a fiduciary duty to invent other types of products or manage other parts of the business.25 [page 345] There are twin fallacies in this field that subordinate employees do not owe fiduciary duties and ‘top management’ owe fiduciary duties in relation to all they do. Both propositions are incorrect. All employees owe some fiduciary duties: see 7.34–7.36. The duties of even the most senior employees will define the scope of the employment and demark the boundaries of their fiduciary duties. For example, in Manildra Laboratories Pty Ltd v Campbell the managing director of a mill had a duty to manage the current undertaking of the employer. His job did not involve acquiring new business for the employer. He made an approach to a rival of the employer and offered to purchase the rival’s mill. He did not disclose the existence of this opportunity to the employer but instead purchased the mill himself. The court held that he owed no duty, in contract or as a fiduciary, to report the existence of this business opportunity to his employer or to hold the acquired business on trust for the employer because the acts within the scope of his employment were to manage existing businesses, not acquire new businesses.26 Similarly, in a range of cases the obligations of an employee to hold an invention on trust for his or her employer have been circumscribed by the fact that the employee’s duties did not require the employee to make inventions; or, if there was some duty to invent, then the employee was not obliged to make the type of invention in issue.27

However, the seniority of the employee and the nature of the employment are relevant in determining the duties owed. Employers rely heavily on loyal advice from senior managers, particularly concerning business opportunities. They are vulnerable to disloyal and self-serving employees who have possession of confidential information that can be used to undermine the business or aid the employer’s rivals. The loyalty owed by an employee, which finds its legal expression in the duty of fidelity, is in part a function of the vulnerability which derives from the position occupied by the employee in the particular business.28 The scope of the employment is also partly defined by the sphere of the employer’s business operations. The conflict of interest rule imposes limits on an employee engaging in competitive activity in the same [page 346] trade as the employer.29 There is no conflict about matters in which the employer has no business concern.

Express terms and consent 7.8 Express terms can expand or narrow the scope of the employment and the employee’s fiduciary duties, such as an express term requiring an employee to declare a conflict of interest.30 The relationship between the express terms of the contract and the fiduciary duties of the employee is discussed in 7.41. No breach of a fiduciary duty will arise when an employee acts with the informed consent of the employer. The effect of the consent may be to make the subject matter of the disclosure (such as conducting a competing business) outside the scope of the obligations: see 7.71.

The course of dealings and obedience to orders 7.9 The scope of the employment is in part defined by the course of dealing between the parties.31 The duty of fidelity is derived in part from what the employee has undertaken to do for the employer: see 7.34–7.36. The scope of

the employment may evolve over time and may be enlarged beyond the employee’s usual or contracted duties when he or she undertakes to perform a new or different task. For example, a particular employee may not ordinarily have a duty to invent, but if he or she agrees to a request to work on a project to invent a solution to a problem then any invention made by the employee arising from the project may be held on trust for the employer.32 [page 347] The employee’s obligation to obey orders is limited by the scope of the employment. It is sometimes suggested that the employee’s obligation to obey orders empowers the employer to require an employee to perform work, change the location of the work or accept a re-grading outside the scope of the contract. This argument assumes the matter sought to be proved: [The employer’s counsel] stressed not only that the various agreements required the firefighters to obey the lawful instructions of the employers, but that generally there was an obligation on an employee to obey his employer’s instructions and to co-operate in the work that the employer wished him to do. That of course is all uncontroversial, but the employer can only give instructions to his employee to do that which the contract requires the employee to do. Otherwise, it is not a question of the instruction being lawful or unlawful, but rather that the tasks are not open to the employer to require of his employee.33

The scope of employment and acts done outside of work 7.10 One difficult area of the law is the extent to which an employer can regulate the actions of an employee outside of work. The operation of the duty of fidelity on the use of the employee’s spare time to conduct a rival business is discussed in 7.85–7.87. Even in the absence of a lawful direction an employee’s conduct out of hours may be inconsistent with the employment. The uncertain reach of this obligation is discussed in 7.140. It is suggested that this uncertainty has its roots in the merger in the late nineteenth century of the categories of inferior servant over whom the master exercised complete dominion, and superior servants over whom the employer only exercised influence in a manner consistent with the contract: see 1.20 and 1.26. As discussed in 7.140, the limit of the employer’s power to make

directions about conduct outside of employment is better understood as being defined by the mutual duty of trust and confidence. There is some authority to support the view that it is possible for an employer to make an order governing some activities beyond working hours. In McManus v Scott-Charlton the employee, a public servant, persistently harassed a co-worker both inside and outside of hours for over three years. He was directed to refrain from contacting her other than in the performance of his duties. The employee then called his co-worker at her home and left a message explaining that he fancied her and that if she was ever free he would not mind marrying her. The court [page 348] upheld the lawfulness of the direction in the particular statutory context in which it was given: … it is lawful for an employer to give an employee a direction to prevent the repetition of privately engaged-in sexual harassment of a co-employee where: (i)

that harassment can reasonably be said to be a consequence of the relationship of the parties as co-employees (ie it is employment related); and

(ii) the harassment has had and continues to have substantial and adverse effects on workplace relations, workplace performance and/or the ‘efficient equitable and proper conduct’ (cf Public Service Act s 6) of the employer’s business because of the proximity of the harasser and the harassed person in the workplace.34

Recent decisions of Full Benches of Fair Work Australia and its predecessors dealing with unfair dismissal cases have sought to significantly extend the employee’s obligations to answer questions and obey orders beyond the scope of employment.35 These decisions should be treated with great caution.

The course of the employment 7.11 The misuse of position rule and the duty not to misuse confidential information apply to acts done in the course of, or by reason of, the employment.36 The concept of the course of the employment is slightly broader than the scope of employment. An employee who gains an advantage

because he or she holds a particular position may be obliged to account for it even if the advantage is not gained in performing an act within the scope of the employment. In Reading v Attorney General the sergeant, dressed in his uniform, received a payment for escorting trucks laden with alcohol through the streets of Cairo. Though he did not receive the payments while performing his duties, he breached his duty by taking advantage of the position which his employment gave [page 349] him.37 Similarly, the police officer who receives kickbacks, and the thief who steals his or her employer’s property, is accountable for the gains notwithstanding the fact that they are not acquired while the employee is carrying out his or her duties.38 Similar issues arise when dealing with the misuse of information. An employee who takes steps to acquire confidential information from the employer other than through the performance of the employee’s duties is bound to respect the confidentiality of the information. In Ormonoid Roofing and Asphalts Ltd v Bitumenoids Ltd the employee worked on a damp course machine. He acquired knowledge of its operations while performing duties within the scope of his employment. He was able to use this knowledge after his employment ended, as it formed part of his know-how. During his employment he did not work on the roofing machine. He had spent a great deal of time making careful measurements of the roofing machine which were quite unnecessary for his employment. This knowledge was deliberately acquired outside of the scope of his employment for a purpose collateral to his engagement so could not be used after the termination.39

DUTY TO OBEY DIRECTIONS, ANSWER QUESTIONS AND DISCLOSE MISCONDUCT The duty to obey directions 7.12 There is an implied term of the contract that an employee has an

obligation to obey directions about the performance of the contracted work that are lawful, reasonable, consistent with the contract and within the scope of the employment.40 The obligation will be breached when the employee wilfully disobeys such a direction.41 [page 350] The obligation of an employee to obey the orders of an employer is one of the identifying features of employment.42 Entering into an employment contract is an act of submission to the will of another,43 but only about matters within the scope of the employment. By entering into an employment contract an employee does not submit to the employer’s control about matters not affecting the work.44 The employee does not sell his or her liberty. If it were otherwise, the contract may have servile incidents and be unenforceable to that extent.45 The employer’s right to control largely concerns what, where, how and when work is to be performed:46 … on entering a contract of employment, there is submission by the employee to the employer within the terms of that contract, and in performing work under the contract of employment there is subordination to the will of the employer to the extent of the terms of that contract. That is the essence of and the effect of the right of control.47

The obligation of the employee to obey orders is coterminous with the contract and not with the employment relationship. An employee who repudiates the contract, and thereby severs the employment relationship, may still be obliged to obey the directions of an employer who elects to affirm the contract.48 An employee is not obliged to obey an order to commit a crime or a tort,49 and an employee who obeys such an order does not necessarily [page 351] breach the contract.50 The employer’s obligation to indemnify the employee is modified when an employee knowingly commits such a tortious or criminal act: see 8.34.

7.13 Statutes and industrial instruments may expand or limit the employee’s obligation to obey directions.51 An obligation to obey an order may be implied into a contract of a public service employee whose employment is governed by a statute in the ordinary manner, so long as the implied terms and the statute are consistent.52 Section 28(c) of the Work Health and Safety Act 2011 (Cth), and counterpart Acts in each jurisdiction, impose an obligation on employees to comply, so far as the employee is reasonably able, with any reasonable instruction that is given by the employer to allow the employer to comply with the Act. In unusual circumstances, the employee’s obedience of a reasonable direction may be a breach of the contract. In the ASLEF case the employees were given hundreds of directions in an extensive rule book. In concert they instituted a work to rule by complying strictly with each direction. As a consequence work ground to a crawl as planned. The Court of Appeal concluded the employees were in breach of their implied duty to cooperate.53 An employee does not breach the contract if he or she is not given a valid direction. An employee is not obliged to obey a direction given without authority54 or that is ultra vires.55 There is a difference between giving a direction and counselling an employee to take a step or opening up negotiations about a matter.56 Many directions are contained in policies promulgated by employers. In some cases the obligation to obey the policies arises from an express term incorporating the policies by reference into the contract: see 5.34. An express term may incorporate [page 352] policies that are unreasonable or about matters that would otherwise be beyond the scope of the employment. In the absence of an express term giving contractual force to the contents of a policy manual, any direction in a manual must meet the tests of being a direction that is about the performance of the contracted work that is lawful, reasonable, consistent with the contract and within the scope of the employment.

Unreasonable directions

7.14 An employee is not obliged to obey an unreasonable direction unless the employee has expressly agreed to do so.57 Making such a direction may also be a breach of the contract by an employer.58 Professor McCarry has argued that an employee is required to comply with unreasonable directions.59 His argument relies on Adami v Maison de Luxe Ltd, Spain v Arnott 60 and Turner v Mason.61 The latter two cases have not been applied on this point in over 100 years.62 The former case, Adami, did not directly concern whether the employee owed an obligation to obey orders. Mr Adami was a manager of a hall. The employer directed him to work on Saturday afternoons, but he refused. The employer pleaded the direction was ‘lawful and reasonable’. On the facts proved and admitted, the Full Court of the Supreme Court of [page 353] Victoria found the direction was ‘lawful and reasonable’. In the High Court, his counsel Owen Dixon KC, did not suggest the employee did not owe an obligation to obey the order. The only issue was the consequences of the breach.63 The court understandably did not focus on the reasonableness of the order. Whether a breach of the obligation to obey orders gives rise to a right to terminate the contract depends on the tests discussed in 7.17. 7.15 The other two cases relied on by Professor McCarry were decided prior to 1850 when inferior servants were subject to the complete dominion of their employer: see 1.26. Servants were engaged under a form of consensual servitude, though sometimes it was not consensual. The notion of the scope of employment had little or no application to them. Reasonableness was rarely used as a yardstick by which the master’s right to control the servant was measured.64 Whatever the position was in the nineteenth century, the tide of authority has turned. Starting with dicta of Dixon J in 1938, over the last 50 years courts have repeatedly held that an employee is only obliged to obey reasonable directions of the employer.65 All of the leading textbooks on employment law adopt the ‘lawful and reasonable’ formula.66 It is suggested that this approach is justifiable. The term concerning the obedience of orders is now conceptualised as one implied in law. As such, it must be reasonable

and necessary: see 5.50. It is difficult to see how a term requiring obedience to unreasonable orders would meet that test. What is reasonable cannot be determined in a vacuum. The nature of the employment, the established and common practices of the parties, and the provisions of statutes and industrial instruments governing the [page 354] relationship are all relevant.67 There is some support for the view that when the direction relates to conduct outside of the performance of work then it is appropriate to use the concept of proportionality to test the reasonableness of a direction.68

Directions and safety 7.16 An employee is not obliged to obey a direction that may expose him or her to an appreciable risk of substantial danger, unless the nature of the work under the contract contemplates the employee undertaking such a risk.69 It will often be a breach of the contract to direct an employee into a war zone, or to aid a belligerent, when the contract contemplates peaceful employment.70 In Ottoman Bank v Chakharian the employee was, while working for his employer, imprisoned by the Caliphate forces and sentenced to death during the course of the Turkish War of Independence. The arrival of the Greek forces in Aydin saved him. His employer, knowing of the unexecuted judgment against him, then sent him to Constantinople, the capital of Caliphate power. He obeyed, but pleaded each day to be transferred elsewhere to avoid his execution. The chef du personnel ‘laughed at him’. The employee then bumped into the chief of police from Aydin who questioned him at length. Fearing for his life, he fled Constantinople thereby disobeying the direction of his employer. He was dismissed for disobedience and sued for wrongful dismissal. The Privy Council advised that the employee was not obliged to obey the direction.71 An employer has an obligation to provide a safe place of work: see 8.56. In performing that obligation an employer may need to determine whether an

employee suffers from an injury that might affect his or her work. For this purpose, in some circumstances an employer may require the employee to obtain medical information to permit the employer to perform its contractual and statutory obligations. The [page 355] obligation to provide such information would only arise when the information sought is relevantly connected with the work, necessary for the performance of the employer’s obligations and there are appropriate safeguards of the employee’s privacy.72 Insisting that the employee attend such an examination, without proper justification, may be a breach of the implied term of trust and confidence.73

Consequences of a breach: the right to terminate 7.17 It is sometimes suggested that the term requiring obedience to orders is a condition,74 but it is not. The term imposing the obligation to obey orders is an intermediate term. A non-serious breach of the term does not give rise to a right to terminate.75 Whether the breach is sufficiently serious to give rise to a right to terminate depends on the tests discussed in 10.38–10.49. The breach must be wilful: see 10.52–10.53. The refusal to obey an order may also be evidence of an attitude of insubordination which, if sufficiently serious, may be inconsistent with continued employment. A single act of insubordination will rarely justify such a conclusion.76 Dishonesty may justify the termination. It depends very much on what the dishonesty relates to and the duties of the employee.

Disclosing misdeeds: prospective employees and employers 7.18 Prospective employees are under no implied duty to disclose, unasked, past misdeeds to prospective employers, even where the

[page 356] misdeeds include fraud.77 Where there is no existing relationship between the parties, there is no obligation to volunteer information that would harm one’s own negotiating position: there is ‘no reason why adversaries should be under a duty to provide ammunition to one another’.78 Silence in such a case will not provide the foundation for an action for deceit or give to the other party a right to avoid the contract.79 In contracts uberrimae fidei (of the utmost good faith), such an obligation may arise, but employment contracts are not contracts uberrimae fidei.80 The failure of an employee to raise past misdeeds is not a representation that the employee has never committed such acts. An employee does not impliedly promise that he or she has lived a life beyond reproach,81 and consequently the subsequent discovery that the employee committed misdeeds prior to the employment will not be a breach of such a warranty. Misdeeds occurring prior to the employment may be relevant in determining if the employee has committed an act incompatible with continued employment. Previous misdeeds, like other acts beyond the scope of employment, may demonstrate that the employee is presently unfit to discharge the duties of their current employment.82 There are [page 357] limits to this notion. Redemption is possible. An employee who has committed a fraud, no matter how serious, cannot be debarred from all future employment in positions of trust.83 An employer cannot take into account (or in some jurisdictions inquire about) spent convictions of an employee, except in certain cases concerning work with children.84

Deceit 7.19 Where the employee provides false information to obtain a job then the employer may have an action for deceit against the employee. Deceit is a tort.

It can apply when an employee wilfully lies to obtain a job by, for example, concocting a false reference or inventing part of a curriculum vitae and the prospective employer relies on the lie when offering employment.85 An action for deceit may also arise where a former employer (or person purporting to be a former employer)86 provides a false reference to a prospective employer, although such actions are now rare.87 In employment law the action of deceit is seldom used, largely because other remedies are more effective. Where an employee has obtained a position through the concoction of a false curriculum vitae an employer will usually be able to terminate the contract. Damages for the deceit are often difficult to prove. An action for deceit has five elements.88 First, there must be a representation of fact. The representation may be oral or written or a [page 358] representation by conduct. Second, the representation must be wilfully false. The maker of the statement must know that the statement is false, and mere carelessness is insufficient. There is a difference between a wilfully false statement and the self-promotional hyperbole often engaged in by employers and employees at job interviews. Third, the maker of the representation must make it with the intention that a prospective employer will rely on it in the manner that resulted in damage. The maker of the representation need not have the particular prospective employer in mind.89 Fourth, there must be reliance on the representation. Finally, there must be damage suffered as the result of the reliance on the false representation.

Reporting one’s own misdeeds 7.20 There is generally no implied duty that a party report his or her own misconduct to the other party: ‘neither the employer nor the employee, once in contractual relations, are under a duty as such to disclose to each other their own breaches of contract’.90 The imposition of such a duty is not supported by the duty of fidelity.91 If there is no duty to disclose the misconduct, then the silence of the employee does not induce, fraudulently or

otherwise, the employer to adopt a particular course.92 An obligation to disclose misdeeds may be created by the express terms of the contract. The silence of the employee may be misleading for the purposes of the Australian Consumer Law: see 4.37. Even where there is a duty to disclose misconduct, it will only usually extend to disclosure of the wrongful acts of the employee and not the [page 359] intention to commit wrongful acts. In Horcal Ltd v Gatland the director entered into an agreement to resign and to be given a golden handshake. He had at the time the intention of accepting a secret commission from a client, but he did not receive any payment until after the agreement was formed. The United Kingdom Court of Appeal held that the mere intention to breach a duty did not amount to a breach by the employee and any duty to disclose misconduct did not extend to disclosing such a mere intention.93 The obligation of employees as fiduciaries to disclose misdeeds is more complex. In the United Kingdom there is some authority to support the view that a fiduciary owes a duty to disclose misconduct to the employer, a proposition that is said to arise from a fiduciary duty to act in the best interests of the employer.94 In contrast, in Australia fiduciary duties do not impose positive obligations on fiduciaries. Fiduciary duties are proscriptive, not prescriptive.95 Employees as fiduciaries do not owe a duty to disclose misconduct.96 Sometimes fiduciaries are said, inaccurately, to have a duty to disclose a breach of a fiduciary obligation. It is more accurate to say that there is no breach of a fiduciary duty if the employer consents to the action of the employee after full disclosure: see 7.69–7.71. [page 360]

Reporting the misdeeds of others 7.21 There is no general duty imposed on all employees to report the

misconduct of their fellow employees.97 Whether an employee is so obliged will depend upon the circumstances of each case, including the seniority and duties of the employee, the obligations imposed by the particular contract, and the extent and gravity of the misconduct.98 There are obvious and sound reasons why each employee should not be bound to disclose to his or her employer any information that he or she has about possible breaches of duty by fellow employees.99 An employee who knows or suspects wrongdoing by fellow employees will not ordinarily breach the employee’s obligation of confidence by disclosing the wrongdoing.100 In the United Kingdom it has often been said that senior managers must report the misconduct of other managers and those lower in the hierarchical chain of command:101 ‘a person in a managerial position cannot possibly stand by and allow fellow servants to pilfer the company’s assets and do nothing about it’.102 However, more junior employees, particularly those without managerial responsibilities, may not have such a duty.103 In Sybron, the employee was the European manager of [page 361] a multinational corporation and entered into a conspiracy with his co-workers to engage in a large scale commercial fraud ‘designed to maraud the assets of the company’. He was under an obligation to disclose their wrongdoing given the seniority of his managerial position and his power to fire the employees. The fact that such a disclosure might have also revealed his own part in the fraud did not absolve him of his duty.104

Answering questions honestly 7.22 Generally speaking employees are obliged to answer questions from their employer about matters within the scope of their employment.105 As Herron J said in Associated Dominion Assurance Society Pty Ltd v Andrew: … a duty lies upon an employee in general terms to give information to his employer such as is within the scope of his employment and which relates to the mutual interest of employer and employee. If an employee is requested at a proper time and in a reasonable manner to state to his employer facts concerning the employee’s own actions performed as an employee, provided that

these relate to the master’s business, the employee is bound, generally speaking, to make such disclosure. … Questions asked relating to the employee’s activities could be so reasonable and fair that to refuse the information may well be disobedience justifying dismissal. Such conduct may be inconsistent with duty and may impede the employer’s legitimate business associations. It certainly could destroy all confidence between master and servant which is an essential feature of such contracts.106

An employee does not breach the duty by refusing to answer questions about matters outside the scope of the employment: see 7.5–7.11. In most jurisdictions there is no duty to honestly answer questions about spent convictions.107 Employees are sometimes accused of committing a minor breach of the contract and then, after an investigation, subsequently accused of answering questions dishonestly about the misconduct. [page 362] Even when the initial breach may not justify the termination, lying about the matter may, in some circumstances, justify the termination of employment.108 The means of questioning is relevant: ‘the duty on the employee [to answer] is conditioned by a corresponding obligation on the employer to seek the information by questions that are fair and reasonable’.109 This consideration is particularly important in cases in which an employee is refraining from answering questions from an employer in an effort to exercise his or her privilege against self-incrimination in pending criminal proceedings or has engaged in conduct that is akin to whistle blowing.110 Even in the absence of pending criminal proceedings, an employee will not seriously breach his or her contract by failing to answer questions promptly, completely and honestly when the questioning is not a genuine search for information to ascertain the true character or extent of the employee’s conduct but a charade designed to justify an allegation that the employee is failing to cooperate.111 7.23 In public sector employment, and in cases in which the procedural fairness of the dismissal is an issue, the privilege against self-incrimination may also be important.112 The privilege against self-incrimination is a common law right.113 It may be modified or abrogated

[page 363] by statute.114 The privilege relates to criminal proceedings and statutory disciplinary proceedings carrying a sanction. It protects an employee against punishment for a refusal to answer questions that may tend to incriminate the employee. Whether the employer is permitted to pursue statutory disciplinary proceedings or dismiss an employee while there are outstanding criminal matters will depend on a range of factors including the terms of the relevant statute.115 There are some rather harsh judicial statements about the importance of honesty in employment. In Moreton Bay College v Teys, the school principal was asked whether a third party had any involvement in the breakdown of his marriage. He was, in fact, in a sexual relationship with the mother of a student. He misled the employer and aggravated the offence by maintaining his obfuscation for many months. In dicta it was suggested that the employee’s acts would have been serious misconduct if they were within the scope of the contract.116 By way of comment, as a matter of human experience it is only the most levelheaded of employees who, when confronted with questioning about extraneous, private matters beyond the scope of employment, will not attempt to mislead. Employees questioned about matters beyond the employment (Have you ever snorted cocaine? Have you had sex with a married person? Have you downloaded porn at home?) tend to mislead. It is harsh to conclude that a false answer is a serious breach of the contract when a refusal to answer would not be.

DUTY TO USE CARE AND SKILL Statement of the duty 7.24 Each employee has a contractual duty, created by a term implied in law,117 to exercise reasonable care in the performance of the skills the [page 364]

employee professes to possess.118 Historically this was a duty of superior servants or those skilled in an art (such as a journeyman or artisan) but not menial servants engaged under a general hiring.119 When an employee professes to possess the skills necessary to perform a job there is an implied promise that he or she is reasonably competent to perform the task undertaken. As Willes J observed: Thus if an apothecary, a watchmaker or an attorney be employed for reward they each impliedly undertake to possess and exercise reasonable skill in their several arts. The public profession of an art is a representation and undertaking to all the world that the professor possesses the requisite ability and skill. An express promise or express representation in the particular case is not necessary.120

The public profession of the skill does not require any formality. If an employee applies for any skilled job then ordinarily the employee is representing that he or she has the skills to do that job.121 However, such a representation cannot be inferred when the employer is told (or knows) that the employee does not possess the particular skill122 and the implied promise of competence does not extend to the performance of work not covered by the profession of skill.123 The duty may be modified or excluded by express terms.124 The more lenient historical approach of the common law to the implied duties owed by directors is [page 365] anomalous. The cases in which indolent directors were absolved from responsibility by their supine indifference to their duties were never applied to employees.125 Where the employee is awarded the job on the basis of falsely representing that he or she has particular skills or qualifications which he or she does not possess, the employer may bring an action for deceit.126

Statutory modifications of the duty 7.25 The employee’s duty of care may be modified by the express terms of the contract or statute. Section 28(a) and (b) of the Work Health and Safety Act 2011 (Cth), and the counterpart Acts in most jurisdictions, impose obligations on employees to take reasonable care for his or her own health

and safety and to take reasonable care that his or her acts or omissions do not adversely affect the health and safety of other persons. In addition, officers and directors have a concurrent statutory duty of care imposed by s 180 of the Corporations Act. It is a duty ‘to exercise their powers and discharge their duties with the degree of care and diligence that a reasonable person would exercise …’. The statutory duty largely replicates the duty imposed by the common law.127 There is some uncertainty about whether a director’s duty of care is only a common law and statutory duty or is also an equitable duty; and, if it is equitable, whether the duty is also a fiduciary duty.128 The standard of care under the statutory duty is objective and earlier cases based on a subjective standard should be treated with caution.129 The degree of negligence [page 366] required to establish a contravention of s 180 is essentially the same as that existing under the common law for negligence.130 Conduct that contravenes the duty in s 180 may not be sufficiently serious to justify the termination of employment.131

Consequence of a breach of the duty: damages 7.26 The employee’s performance of the contractual duty of care is not a condition precedent to the earning of wages.132 When an employee breaches the duty to take reasonable care the employer may recover damage caused by the breach.133 The facts in the leading case in this field, Lister v Romford Ice, were unusual. The Listers, father and son, worked together for Romford Ice. The son was a truck driver and in backing up the truck negligently injured his father. Mr Lister Snr successfully sued the company who was vicariously liable for the son’s negligence and recovered £1600 in damages and £200 for costs. The employer then sued the son for negligence, its damages being the £1800 the employer had to pay in damages and costs to the father, plus the costs the employer had to spend defending the action brought by the father.

The son had breached his duty to exercise his skills as a truck driver with reasonable care and the employer had suffered loss as a result of the breach. As the employer was insured, all of the loss suffered by the employer was in fact suffered by the insurer and it was the insurer who sued the son in the name of the employer pursuant to its rights of subrogation. The House of Lords rejected the son’s arguments that there were terms implied in law in the employment contract that the employer would indemnify the employee against loss caused in the course of employment; that the employee would have the benefit of any contract of insurance effected by the employer in respect of such action; or that the employee would be indemnified by the employer against any liability for which the employer was in fact insured or was required by law or ought in the exercise of reasonable care to have been insured.134 [page 367] By way of comment, this approach has the capacity to be unjust. A negligent employee may be liable for losses caused to the employer and third parties, even when the employee’s lack of care is momentary and inadvertent. Momentary lack of care is common; it is an ordinary incident of most work. All employees have exhibited a lack of care to the appropriate standard at some point in their careers. If loss is suffered as a result, an employee is liable. Employers are ordinarily insured against losses caused by their employees’ negligence. Employees in Australia are rarely insured against such losses, except for some professionals and drivers. A function of a just law is to provide for the proper and just apportionment of loss between a wrongdoer and a person to whom he or she has caused the loss. The law is unjust by imposing potentially crippling losses on employees for mere momentary inattention.135 7.27 The approach of the law in Australia to these possible injustices is manifold.136 First, there is some authority to support the view that the employer has a duty to maintain in force an insurance policy in standard form covering both the employer’s and the employee’s liability for any loss of, or damage to property caused by the negligent driving of a motor vehicle by the employee in the course of his or her employment and any damage so

occasioned to the employer’s own property, and to the further effect that the employer would exhaust its rights under the policy before seeking any recovery from the employee.137 Subject to any statutory considerations, it is difficult to see why such a duty would not also apply to insurance policies to cover industrial accidents. This is a different [page 368] approach to that taken by the House of Lords in Lister discussed in 7.26.138 If the term suggested were implied, then the employer must turn first to the insurer to seek to recover the loss. Second, s 6 of the Insurance Contracts Act 1984 (Cth)139 limits the insurer’s right of recovery against an employee, except where the loss arises out of the serious or wilful misconduct of the employee. In practical terms s 66 operates as a defence in an action like that in Lister v Romford Ice by the insurer against an employee whose acts (not being serious or wilful misconduct) cause loss to his or her employer.140 Third, the right of an employer to obtain an indemnity or contribution from an employee for a tort committed by the employee in the course of his or her employment has been altered in legislation in New South Wales, the Northern Territory and South Australia.141 Those Acts do not prevent an employer obtaining an indemnity or contribution where the conduct committing the tort constitutes serious and wilful misconduct.142 Further, the right of an employer to seek to recover damages where the employee’s breach of duty resulted in personal injury or death is limited in some jurisdictions.143

Consequences of a breach: the right to terminate 7.28 The employee has an implied duty to exercise reasonable care in the performance of the skills he or she professes to possess.144 Phrases used in express terms and decisions about wrongful dismissals such as negligence, neglect of duty, inefficiency and incompetence refer to essentially the same concept — that the employee has breached his or

[page 369] her duty to perform with reasonable care.145 An employer does not have a right to terminate for every failure of an employee to comply with the duty.146 The breach must be sufficiently serious. The degree of seriousness has been variously expressed as requiring ‘utter incompetence’, ‘gross negligence’ or ‘a very grave case’.147 Ultimately, the test of seriousness of the breach discussed in 10.38–10.48 should be applied.148 In determining the seriousness of the conduct the relevant considerations include the nature of the act and its consequences. Inefficiency which would be required to justify instant dismissal is more than ‘the failure to achieve the level of efficiency which the employer might desire’.149 An employee who commits serious mistakes, even those causing considerable damage, may not meet that standard of seriousness.150 The damage that may be caused by the breach will be relevant in assessing its seriousness.151 It is only ‘in exceptional circumstances that an employer is acting properly in summarily dismissing an employee on his committing a single act of negligence’.152 As a general rule, habitual and serious neglect is necessary.153 [page 370]

THE DUTY OF FIDELITY Overview of the contractual, statutory and fiduciary duties of fidelity 7.29 The law relating to the duty of fidelity is a muddled mélange of contract, equity and statute. All employees owe a contractual duty of fidelity. All employees also owe fiduciary duties. All employees also owe an equitable duty of confidence. And employees of corporations, who make up some 85% of Australian private sector employees, owe statutory duties under ss 182 and 183 of the Corporations Act that largely replicate most of the contractual and

fiduciary duties.

The vagueness of the duty of fidelity 7.30 There are innumerable phrases used to describe the contractual duty of fidelity. It is sometimes described as a duty to ‘honestly and faithfully serve his master’,154 a duty of ‘good faith and fidelity’,155 a duty of ‘good faith’156 or simply a duty of fidelity.157 These are all expressions of the same notion. The obligation to serve, which is not a fiduciary or statutory duty, is discussed in 7.2. Courts have repeatedly bemoaned the fact that the duty of fidelity is a rather vague duty.158 It is suggested that the vagueness is in part due to the fact that the duty has for 70 years floated free of its conceptual mooring. Clarifying this vagueness is not assisted by the diffuse manner in which some courts and texts have approached the cases. There is a tendency to analyse the law by reference to certain fields of application of the duty, such as the solicitation of customers, payment of bribes, accounting for property, the use of the employee’s spare time, diverting business opportunities and the like. What is sometimes glossed over, or lost, in this approach is the common ground covered by these disparate fields. This common ground includes the role of informed consent, honesty [page 371] and good faith, detriment to the employer, the proscriptive nature of the obligations, the function of the concept of loyalty and, in many cases, the scope of the employment.159 It is suggested that the identification of unifying principles is a better way to analyse the law; that is, to explain the principles rather than catalogue their application. These principles can then be applied in the various fields discussed above. Those unifying principles are set out in the five rules of fidelity identified in 7.33. Those rules capture the areas of common ground.

The largely co-extensive contractual and fiduciary duties of fidelity

7.31 There are two sound reasons for concluding that the contractual and fiduciary duties of fidelity identified in 7.33 are largely co-extensive: precedent and history. The implied contractual duty of fidelity is best understood as a re-expression of the employee’s duties as a fiduciary and the equitable duty of confidence.160 A majority in the High Court has stated in the context of discussing the duty of fidelity: The issues which must be determined are to be understood in the context of the law respecting employment relationships. It would be unusual for this to be purely contractual. Statute may impose obligations … [Further], the relationship between employee and employer is one of the accepted fiduciary relationships; their critical feature is that the fiduciary undertakes or agrees to act for or on behalf of, or in the interests of, another person in the exercise of a power or discretion that will affect the interests of that other person in a legal or practical sense …. Contractual obligations and fiduciary duties have different conceptual origins, ‘the former’, in the words of McLelland J, ‘representing express or implied common intentions manifested by the mutual assents of contracting parties, and the latter being descriptive of circumstances in which equity will regard conduct of a particular kind as unconscionable and consequently attracting equitable remedies’.161 Formulations of the obligations of an employee in terms such as those in Pearce and Blyth Chemicals may be understood, Professor Finn has pointed out, as the

[page 372] re-expression of equitable obligations in terms of implied contracts.162 If so, the importation is well established and beneficial …163

7.32 The historical foundation of employees’ duties reflects this notion. Superior servants by the late nineteenth century owed equitable duties of confidence and good faith (a nineteenth century synonym for fiduciary duty). Those duties were re-expressed, particularly from the 1880s, as implied contractual terms.164 Courts accepted that the duties in contract and equity were concurrent and, to a large extent, co-extensive.165 The phrase ‘duty of fidelity’ was first used in Robb v Green in 1895 and was clearly being used as a synonym for the employee’s equitable and contractual duty.166 It was not intended at the time to broaden employees’ obligations. The implied term was not considered again in the United Kingdom until just after World War II when it was sought to be applied to skilled manual workers.167 By that time the categories of superior servant, labourers and menial servants had merged into one common law category of employment.168 After gaining an independent though derivative existence from its equitable foundation, by the

mid-twentieth century courts in the United Kingdom started to puzzle about the scope of the contractual duty of fidelity: ‘the practical difficulty in any given case is to find exactly how far that rather vague duty of fidelity extends’.169 In Australia, in Blyth Chemicals Ltd v Bushnell, the High Court had expressed the employee’s [page 373] duties in terms that, in part, reflected their connection with fiduciary duties.170 The content of the contractual duty can be more accurately identified once it is appreciated that the contractual duty of fidelity is largely the re-expression of the employee’s fiduciary duties. This is not to say that all employees owe contractual and fiduciary duties of fidelity in relation to all of their acts. An employee does not owe a duty of fidelity in relation to acts outside of the scope of the employment or sufficiently connected with it: see 7.5–7.11. A duty of fidelity only applies to acts of the employee when the employer is entitled to the single-minded loyalty of its employee: see 7.34–7.36. Not all acts of employees within the scope of their employment demand the loyalty of an employee, even the most senior employees: see 7.37–7.39. In this context loyalty means a singleminded, self-abnegating submission of one’s interests to that of the employer. Loyalty in this sense is irrelevant to the performance of most acts of employees, from clocking on in the morning to compliance with directions as to the performance of work: ‘a servant who loyally does his incompetent best for his master is not unfaithful and is not guilty of a breach of fiduciary duty’.171 Further, in a range of acts employees and their employers have different, and in some cases competing, interests: see 7.37–7.39.

The five rules of fidelity and their qualifications 7.33 The contractual and fiduciary duties of fidelity can be distilled to five rules:172 An employee will breach the contractual and fiduciary duties of fidelity if he or she:

1. performs an act involving a conflict of duty to the employer and selfinterest (the conflict of interest rule): see 7.46–7.47; 2. engages in an inconsistent engagement with a third party (the conflict of duties rule): see 7.48–7.49; 3. misuses his or her position (the no profit rule): see 7.50–7.51; 4. misappropriates the company’s property: see 7.52–7.55; or 5. misuses information: see 7.56–7.59, [page 374] where the act advantages the employee or a third party, or causes detriment to the employer (see 7.65–7.66)173 unless: the employer is not entitled to the undivided loyalty of the employee in relation to the performance of the act: see 7.34–7.36;174 the act is outside of the scope of the employment or not sufficiently connected with the employment: see 7.5–7.11; the employer gives informed consent to the act: see 7.69–7.71; the act is otherwise authorised by law. The rules stated above are subject to the following exceptions or glosses. First, the rules proscribe action by an employee and do not impose a positive duty on an employee to act in the employer’s interest: see 7.60–7.63. Second, there is an obligation not to perform an act incompatible with the employment. This is a contractual and probably not a fiduciary duty and is best viewed as the employee’s obligation under the implied term of mutual trust and confidence: see 7.136. In any one case an employee may be in breach of more than one of these rules. For example, a breach of each rule will occur when an employee, while performing his or her work, discovers confidential information that reveals a potential business opportunity for the employer and becomes director of a company formed to exploit that opportunity.

The first three rules are often compendiously referred to as the twin themes of precluding undisclosed conflict of duty and interest (or of duty and duty), and of prohibiting misuse of the employee’s position.175 The fourth duty concerning the misappropriation of property is probably both a contractual and a fiduciary duty, though the matter is not beyond doubt: see 7.52–7.55. As to the fifth duty, the employee’s obligation not to misuse confidential information is a contractual and equitable obligation but not a fiduciary obligation: see 7.57 and 7.111. Its existence does not depend on an entitlement of the employer to loyalty concerning the use of the information. The employee’s obligation not to misuse non-confidential information is largely an application of the conflict of interest rule, the conflict of duties rule and the no profit rule. It is not an equitable obligation: see 7.57. [page 375]

The centrality of loyalty All employees owe fiduciary duties, not just senior employees 7.34 The relationship between employee and employer is a fiduciary relationship.176 All employees, no matter how junior, are in a fiduciary relationship. But that observation is only the beginning of the analysis of the content of the duties of an employee, not its conclusion.177 There is a view that only directors and ‘top management’178 owe fiduciary duties: ‘some employees, particularly senior employees, do owe fiduciary duties to their employers. But others do not’.179 It is suggested that this view is inconsistent with authority. The High Court has repeatedly emphasised that the fiduciary relationship of an employee arises from the status of employment.180 There are a vast number of cases in which non-managerial employees have been held to owe fiduciary duties.181 It is also unsound to allow a junior employee to retain the [page 376]

benefits of the profits accrued from stolen information, bribes or the diversion of the employer’s business. If the employer’s remedies in such cases were limited to remedies for breach of contract, the employee could profit from the wrong and exploit the employer’s trust.

The relevance of seniority and the nature of the employment 7.35 Different types of job impose different demands. For more senior employees there are many situations in which undivided loyalty is an important part of the work. For an executive director, undivided loyalty to the company is the sine qua non of effective work, but for an employee engaged to put caps on bottles, undivided loyalty is largely irrelevant. It is incorrect to say this means only senior employees owe fiduciary duties, or that they owe ‘higher’ duties of fidelity than other employees. All owe the same duties. The circumstances in which loyalty is required of an employee, and the opportunities for breach, are more prevalent for senior employees. As Lord Greene has stated: I can very well understand that the obligation of fidelity, which is an implied term of the contract, may extend very much further in the case of one class of employee than it does in others. For instance, when you are dealing, as we are dealing here, with mere manual workers whose job is to work five and a half days for their employer at a specific type of work and stop their work when the hour strikes, the obligation of fidelity may be one the operation of which will have a comparatively limited scope.182

This does not mean that ‘mere manual workers’ owe no contractual or fiduciary duty of fidelity. This is illustrated by the no profit rule. There are a large number of cases concerning senior employees, such as directors and company secretaries, who use their position to essentially write their own cheques on the company account.183 More junior employees have less ready access to the company’s funds, but when they do steal from the employer the duty of fidelity applies to them with equal force as it does to their hierarchical superiors. The fiduciary duty to account for bribes and the equitable duty not to misuse confidential information apply to all employees regardless of rank. By the nature of their work, senior employees are more likely to come into regular contact with confidential [page 377]

information and so the content, but not the existence, of the obligation will be greater.184 When considering other fiduciary duties, such as the conflict of interest rule and the conflict of duties rule, the nature of the employment will be particularly relevant. When a fiduciary obligation arises in relation to an activity, the demands of the obligation (viz the content of the duty) are very sensitive to the facts of a particular case.185 Equity will not impose obligations that are unjust. It will look at the realities of the situation before imposing obligations.186 Nor will equity expect all employees to meet the same exacting standards as it imposes on trustees: … the scope of the fiduciary duty must be moulded according to the nature of the relationship and the facts of the case.187 The often-repeated statement that the rule in Keech v Sandford (1726) Sel Cas T King 61; 25 ER 223, applies to fiduciaries generally tends to obscure the variable nature of the duties which they owe. The rigorous standards appropriate to a trustee will not apply to a fiduciary who is permitted by contract to pursue his own interests in some respects.188

The critical feature: acting for or on behalf of the employer 7.36 As noted above, the fact that all employees are in a fiduciary relationship is only the beginning of the analysis of the content of the duties of an employee, not its conclusion.189 Professor Finn has observed: It is meaningless to talk of fiduciary relationships as such … it is pointless to describe a person — or for that matter a power — as being fiduciary unless at the same time it is said for the purposes of which particular rules

[page 378] and principles that description is being used. The rules are everything. The description ‘fiduciary’, nothing …. It is not because a person is a fiduciary that a particular rule applies to him. It is because a particular rule applies to him that he is a fiduciary for its purposes.190

The existence of an employment relationship does not mean that in relation to a particular act the employee owes a fiduciary duty: ‘simply labeling the relationship as fiduciary tells us nothing about which particular fiduciary duties will arise’.191 The conduct that is the subject of fiduciary obligations differs between different employees and is dependent on the facts of the

particular case.192 The fiduciary obligations also differ according to the conduct the employee is engaging in: … the critical feature of fiduciary relationships is that the fiduciary undertakes or agrees to act for or on behalf of or in the interests of another person in the exercise of a power or discretion which will affect in a legal or practical sense the interests of that other person. From this power or discretion comes the duty to exercise it in the interests of the person to whom it is owed.193

The particular fiduciary duty of the employee is not derived merely from the employee’s status as an employee. The duty is derived from what the employee has undertaken to do in the particular circumstances.194 An employee will owe a fiduciary duty when, in relation to a particular act, the employee owes an obligation to act exclusively in the employer’s interest and not in his or her own interest: An employee owes an obligation of loyalty to his employer but he will not necessarily owe that exclusive obligation of loyalty, to act in his employer’s interest and not in his own, which is the hallmark of any fiduciary duty owed by an employee to his employer. The distinguishing mark of the obligation of a fiduciary, in the context of employment, is not

[page 379] merely that the employee owes a duty of loyalty but of single-minded or exclusive loyalty.195

This obligation has been said to arise when the employer has a legitimate expectation that the employee will act solely in the interests of the employer.196 Loyalty has a precise meaning: ‘namely the duty to act in the interests of another. This is the fundamental feature which, in this category of relationship at least, marks out the relationship as a fiduciary one’.197 The obligation of loyalty is the distinguishing core obligation of an employee acting for, on behalf of, or in the interests of the employer.198 The purpose of the imposition of fiduciary duties is to ensure that when an employee has an exclusive obligation of loyalty he or she is motivated only by a duty of loyalty which is not compromised by the possibility of gaining a personal advantage.199

The various and divided loyalties of employees

Not every aspect of an employee’s work is fiduciary 7.37 An employee may owe fiduciary duties in relation to part of his or her activities, but not in others.200 There will be no obligation of single-minded, self-abnegating loyalty in relation to a range of the activities of an employee in the performance of his or her duties. Acting for the employer’s benefit, as the employee does in performing work, is different to acting in the employer’s interest.201 The rules identified in 7.33 only apply where the employee must be loyal in relation to the particular activity: [page 380] … it is necessary to identify ‘the subject matter over which the fiduciary obligations extend’. It is erroneous to regard the duty owed by an [employee] to his [employer] as attaching to every aspect of the [employee’s] conduct, however irrelevant that conduct may be to the … relationship that is the source of fiduciary duty.202

Simply because an employee is in a fiduciary relationship and has an implied contractual duty arising from that relationship does not make each implied contractual duty a fiduciary duty. For example, the duty to obey orders is an implied contractual duty arising from the relationship, but it is not a fiduciary duty.203 An employee only acts as a fiduciary in the exercise of a power or discretion which will affect the interests of the employer in a legal or practical sense.204 To define the area of operation of the duty of fidelity it is necessary to identify precisely the activity agreed to be undertaken by a particular employee and to ask if the employee has agreed to perform that activity solely in the interests of the employer to the exclusion of his or her own interests.205 An employee is not accountable for profits derived outside the scope of the relationship or required, outside that scope, to prefer the employer’s interests over his or her own.206

The duty when employees have divided loyalties 7.38 Employees and their employers have different, and in some cases competing, interests. When negotiating the terms of a contract an employee

will have an interest in maximising the remuneration at the expense of the employer and be under no duty to act for, or in the interests of, the employer.207 Employees who are not engaged to invent [page 381] may take the benefit of valuable inventions discovered during their work, and such employees have no duty to act for, or in the interests of, the employer: see 7.103–7.107. Employees may hold two jobs, so long as the first employment is consistent with the second: see 7.85–7.87. As Professor Stewart has observed: … the unitary approach which the common law takes to employment relations, demanding that the worker identify with and respect the employer’s commercial objectives as a matter of individual obligation, sits ill with the collective reality of industrial pluralism — the recognition that management and labour have aims and objectives which, while they may on a given matter coincide, may also sharply diverge.208

The statutory context of the employment may exclude or modify the duties of fidelity. There is an unresolved issue in Australian law of the extent to which the duties of fidelity of public servants are modified by the duties those servants owe to the public.209 Union representatives also have statutory rights that may modify the duty. Union representatives may not breach the duty if they obfuscate or mislead when engaging in industrial activities (such as negotiating for an enterprise bargaining) or keep their members’ secrets confidential.210

Contractual consequences of a breach 7.39 There are suggestions in some authorities that a breach of the duty of fidelity will always justify the termination of the employment.211 This approach is incorrect. The contractual duty of fidelity is an intermediate term, not a condition. Whether a breach is sufficiently serious so as to justify the termination of the contract depends on the satisfaction of the tests discussed in 10.38–10.49. Some breaches of the contractual duty of fidelity will meet those tests, but others will not. For example, in Sanders v Parry 212 the employee breached his duty of fidelity by failing to tell his employer that

there was a dissatisfied secretary in the office. As a consequence, the employer recovered nominal damages. Such a breach would not justify the termination of employment. Similarly, whether an [page 382] act that breaches a statutory duty imposed by the Corporations Act is sufficiently serious to justify the termination of employment depends on the ordinary tests.213

Employees as fiduciaries and the role of contract Co-existence of the fiduciary and contractual duties 7.40 Contractual and fiduciary relationships may co-exist. The fiduciary obligations that arise in employment are determined by reference to the underlying contract: In these situations it is the contractual foundation which is all important because it is the contract that regulates the basic rights and liabilities of the parties. The fiduciary relationship, if it is to exist at all, must accommodate itself to the terms of the contract so that it is consistent with, and conforms to, them. The fiduciary relationship cannot be superimposed upon the contract in such a way as to alter the operation which the contract was intended to have according to its true construction.214

As the fiduciary duty conforms to the express and implied terms of the contract, it is suggested that the fiduciary duty of fidelity will never be broader than the contractual duty of fidelity. The statutory duties of fidelity in ss 182 and 183 of the Corporations Act cannot be excluded by agreement between the parties. However, their content can be substantially modified by the employer consenting to the employee’s conduct. An employee will not ‘improperly use information’ in breach of s 183, or improperly use his or her position in breach of s 182, if the employer consents to the use of the information by the employee or the receipt of a payment from a client.

Express modification of the duties by contract

7.41 The contractual duty of fidelity and fiduciary duties may be excluded by an express term.215 It is permissible, and more common, for express terms to modify the contractual duties of fidelity.216 The parties may agree that the employee can engage in conduct that would otherwise [page 383] be a breach of the duty of fidelity, such as competing with the employer or taking up a business opportunity.217 The express and implied terms may be so exhaustive and precise that there is no room for the imposition of fiduciary duties.218 If the parties have excluded or modified an aspect of the contractual duty of fidelity it will be very difficult to superimpose an unqualified fiduciary obligation.219

Nature of employment and the scope 7.42 The fiduciary obligations that apply to an employee are determined by construing the contract as a whole in light of the surrounding circumstances known to the parties and the purpose and object of the transaction.220 One of the surrounding circumstances is the nature of the employment. This shapes the scope of the duties in the manner described in 7.7. It can also shape the content of the duties such as by determining whether an employee can engage in alternative employment or retain the benefit of a secret payment such as a tip or gratuity.221

The implied term of trust and confidence and fiduciary duties 7.43 The implied term of trust and confidence creates a mutual duty that the parties shall not, without reasonable and proper cause, conduct themselves in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between them.222 It does not create a fiduciary duty. After tracing the origin of the term, Elias J has stated: This is consistent with the recognition that the duty is one where each party must have regard to the interests of the other, but not that either must subjugate his interests to those of the other. The duty of trust and confidence limits the employer’s powers, but it does not require him to act as a fiduciary. It is a contractual but not a fiduciary obligation. Accordingly, in analysing the

employment cases in this field, care must be

[page 384] taken not automatically to equate the duties of good faith and loyalty, or trust and confidence, with fiduciary obligations.223

Differences between the contractual and fiduciary duties 7.44 In determining if a breach has occurred it is rarely necessary to distinguish between contractual and fiduciary duties. For over 100 years courts have proceeded on the basis that the content of both these duties are identical.224 There is authority to support the view that the duties governing the misuse of confidential information,225 establishing the no profit rule,226 and establishing the conflict of interest rule are co-extensive.227 There are a range of differences between the fiduciary and contractual duties of fidelity. There is a discussion in 7.67 and 7.68 of the duration of the respective duties and a discussion in 7.71 of the differences concerning the role of informed consent. The contractual duty is an implied term in the contract and is ordinarily only owed to the employer.228 Similarly, the statutory duties governing the use of information and use of position are owed to the employer and not related companies.229 In contrast, the fiduciary duty of fidelity arises from the relationship between the parties and it is possible for the employee to owe a fiduciary duty to a non-employer, such as when the employee is engaged by company X to perform work for company Y.230 [page 385]

Differences in remedies 7.45 There are significant differences in the remedies available for a breach

of the contractual, fiduciary and statutory duties of fidelity. The monetary remedy for breach of the contractual duty is damages. Only nominal damages can be recovered if the employer cannot prove any loss caused by the breach: see 14.15. The monetary remedy for breach of the fiduciary duty of fidelity is either an account of the profits derived by the employee from the breach or equitable compensation. An account of profits does not depend on the employer proving any loss.231 The calculation of equitable compensation for breach of the fiduciary duty is different to damages for breach of contract.232 An injunction to restrain a breach of the fiduciary duty is sought in the original jurisdiction of equity whereas an injunction to restrain a breach of the contractual duty is sought in equity’s auxiliary jurisdiction. This can result in courts adopting different approaches depending on the nature of the right being enforced.233 There may be arbitration clauses that govern one action but not the other. The power to enjoin third parties will be different depending on whether the cause of action arises from equity or contract.234 There may be a defence in law that does not arise in an action for breach of an equitable obligation (such as reliance on a statute of limitations) or there may be a defence in equity that does not exist under the common law (such as laches). This latter difference was illustrated in International Scientific Communications Inc v Pattison. The employer knew in March 1978 that the employee was publishing a magazine, was fully aware in July 1978 that the employee’s magazine was in competition with the employer’s magazine and gave notice to the employee in October. The employer did not consent to the employee’s conduct during that time. The employee breached his contractual and equitable duties not to compete with the employer by publishing the rival magazine between March–October 1978. The employer was entitled to damages arising from the breach of the contractual term, but its delay in acting on the employee’s misconduct gave rise to an equitable defence and the court declined to grant the remedy of an account of profits for breach of the fiduciary duty.235 [page 386]

The conflict of duty and interest rule 7.46 An employee has a duty not to promote his or her personal interests by making or pursuing a gain in circumstances in which there is a real conflict between his or her personal interests and the interests of the employer.236 The duty only applies when the employer is entitled to the undivided loyalty of the employee in relation to the conduct: see 7.34–7.36. The duty only applies to matters within the scope of the employment. This requires consideration of the breadth of the employee’s obligations and the business of the employer: see 7.5–7.11 and 7.77–7.79. The duty is both a fiduciary duty and part of the employee’s contractual duty of fidelity.237 Section 182 of the Corporations Act replicates this duty for employees of most corporations.238 The conflict of interest rule applies to a range of conduct by employees including competing with the employer by soliciting clients or diverting business (see 7.80–7.83), resigning to acquire a business opportunity (see 7.91–7.93), the receipt of secret payments (see 7.94–7.95) and the use of inventions: see 7.101–7.102. The duty is not to avoid positions of conflict of interest.239 Many employees are inevitably in a position of conflict, such as those who have an opportunity to divert their employer’s business, appropriate their employer’s funds or use confidential information. The duty requires the employee in these positions to serve the interests of the employer over his or her own interest.

Real, actual, theoretical and significant possibilities of conflict 7.47 For a conflict of duty and interest to arise there must be a real conflict. The test to determine if there is a real conflict has been articulated in various terms. The contrast is drawn in the cases between, on the one hand, situations in which there is a ‘real and sensible possibility’ of conflict or an actual repugnance between duty and interest and, on the other hand, situations where the conflict is theoretical, too remote or too feeble an inducement to be a determining motive.240 In this text the [page 387]

requisite degree of conflict is called a real conflict. The test is the same when determining if there is a conflict of duties: see 7.48–7.49. These principles are illustrated in Blyth Chemicals Ltd v Bushnell where the employee was the managing director of a company that produced and sold arsenate of lead. He was also the chairman of the board of a company ELP Pty Ltd that produced white lead, a different trade but one using machines and know-how that could be easily turned to making arsenate of lead. The employer was ‘not unreasonably apprehensive’ that ELP Pty Ltd might commence manufacturing arsenate of lead and dismissed the employee for, inter alia, being in a position of a potential conflict of interest. Dixon and McTiernan JJ stated: Conduct which … involves an opposition or conflict between his interest and his duty to his employer … is a ground of dismissal. But the conduct of the employee must itself involve the conflict … . An actual repugnance between his acts and his relationship must be found. It is not enough that ground for uneasiness as to its future conduct arises.241

Merely being in a position of potential conflict was insufficient to be a breach of the duty. However, where there is a potential conflict, coupled with a plan to breach the duty, then the plan can be stopped prior to fruition. There would have been a breach of duty if the employee’s conduct was actuated by a design to divert the employer’s business to a rival. The evidence supported the inference of such a design but was also capable of an innocent construction: … the motives and intentions of the [employee] become all-important; for the significance and sufficiency as a justification of the other items of misconduct relied upon appear to us to depend upon the truth of his explanation or the bona fides of his acts. Further, the effect to be given to all the acts combined, which have been established against the [employee], must in the end be governed by an estimate of his honesty and motives.242

The need for a real conflict is relevant in a range of fields in which the conflict of interest rule is applied as part of the duty of fidelity. A breach of the duty of fidelity arises when an employee resigns to acquire a ripe, mature business opportunity of the employer, but not when the employer has little or no prospect of obtaining that business opportunity. [page 388]

The conflict of interest is real in the first scenario and merely theoretical in the second: see 7.91–7.93. Similarly, a conflict of interest arises when an employee receives a secret benefit from the employer’s client in the course of negotiating a deal. However, if the employee has completed the performance of any obligations involving the client (and the employee is unlikely to be engaged in future matters with the client), then a payment may not breach the duty of the employee.243 A conflict may arise when the employee (or interests associated with the employee) has a financial stake in the outcome of the employer’s transactions.244 Some employees cannot compete with their employer during the course of their employment. When determining whether a conflict is real for such employees account needs to be taken of the legitimate interest of employees in pursuing a post-employment career: see 7.88–7.90.

Conflict of duty and duty: employment by more than one employer 7.48 An employee cannot engage in other inconsistent employment that creates a real conflict between the duties owed to the employer and the duties owed to a third party: ‘[an] employee whilst in his employment … must not work for another employer if the other employment would be inconsistent with his first employment’.245 This is a restatement of the conflict of duties rule that applies to fiduciaries.246 As with the conflict of interest rule, the duty only applies when the employer is entitled to the undivided loyalty of the employee in relation to the conduct: see 7.34–7.36. The duty only applies to matters within the scope of the [page 389] employment and is limited by the breadth of the employee’s obligations and the business of the employer: see 7.5–7.11 and 7.77–7.79. The duty is both a fiduciary duty and part of the employee’s contractual duty of fidelity.247 Section 182 of the Corporations Act replicates this duty for employees of most corporations.248

7.49 The duty of fidelity does not require the employee to serve the employer, and no other, for the duration of the contract.249 Concurrent employment, even if engaged in secretly, is not in itself a breach of the duty.250 There are few employment cases dealing with the conflict of duties rule, though the issue does arise for those holding directorships in companies dealing with each other.251 To breach the obligation there must be inconsistent employment creating a real conflict of duties.252 Consequently, there is no breach where the second job is with an employer who does not compete with the primary employer in the same field, even if there is a potential to compete with the primary employer. Where the competitive activity of the employee is in a different trade there is, in truth, no competition between employer and employee and thereby no conflict.253 When the employee is conducting a business after hours, the requisite conflict may arise when the employee’s business is a real competitive threat to the employer even though the employee’s business is not yet trading.254 An employee is unlikely to breach the obligation when he or she is employed in one capacity for the primary employer (such as a lecturer) and another capacity for a competitor (such as a researcher). There needs to be some connection between the duties performed for [page 390] one employer and the duties performed for the other that renders the performance of the two employments incompatible.255 It is possible that an employee may be in breach of the duty of fidelity even where the employer was unwilling, unlikely or unable to engage in the competitive activity being pursued by the employee.256 This is a somewhat harsh and counter-intuitive proposition. It allows commercial opportunities to go to waste. The proposition is more persuasive when applied to senior executives whose decisions can influence the interest and capacity of the employer to pursue commercial opportunities, but makes less sense when applied to less senior employees. An alternative, more satisfactory, solution is to say that where an employer has no interest in pursuing or no capacity to pursue an activity then engaging in that activity falls outside the scope of the

duty of fidelity.257 There is some authority to support the view that without harm to the employer the second job is not inconsistent with the first.258

Misuse of the employee’s position (the no profit rule) 7.50 The no profit rule is that an employee must not misuse his or her position to advantage the employee or a third party or cause detriment to the employer.259 The rationale of the no profit rule is to prevent the [page 391] employee misusing his or her position for personal gain.260 Where there is a breach of the fiduciary obligation the employee must account for the benefits received in breach of the duty261 and the employee may hold the benefit on trust for the employer.262 The duty only applies when the employer is entitled to the undivided loyalty of the employee in relation to the conduct: see 7.34–7.36. The duty applies to conduct sufficiently connected with the employment, a test that is slightly broader than the scope of the employment test: see 7.5–7.11 and 7.77–7.79. The duty is both a fiduciary duty and part of the employee’s contractual duty of fidelity. Section 182 of the Corporations Act replicates this duty for employees of corporations. The no profit rule applies to a broad range of conduct in employment law. The most obvious is when an employee acquires a secret benefit, such as a bribe, during the course of employment: see 7.94–7.95. It also arises when an employee misuses information acquired in the course of employment,263 misuses his or her position by diverting business opportunities from the employer or solicits customers for a future business: see 7.80–7.83. The no profit rule also applies to the use of the employer’s property that is in the possession or control of the employee: see 7.52–7.55.

The statutory no profit rule 7.51 Employees employed by most corporations have a statutory duty not to ‘improperly use his or her position to gain an advantage for himself, herself

or someone else’ or ‘to cause detriment to the [page 392] employer’.264 Although this duty is largely a statutory rendering of the concurrent contractual duty of fidelity,265 there are some points that should be noted. In the phrase ‘improperly use his or her position to gain an advantage’ the preposition ‘to’ means ‘in order to’, rather than ‘and thereby’. It is not necessary to prove that an advantage or profit has in fact been gained. It is sufficient if there is improper use of the position in order to gain the advantage, or cause the detriment.266 Section 182(1) of the Corporations Act sets up two separate duties. The first is that the employee must not improperly use his or her position ‘to gain an advantage for himself, herself or someone else’ and the second is that the employee must not improperly use his or her position ‘to cause detriment to the employer’. It is not necessary to prove both gain to the employee and detriment to the employer; either will suffice.267 Where the misused position is that of director, officer or employee, the employer must prove that contravening acts were acts done by the person in that capacity rather than in some other capacity.268 ‘Improper use’ in s 182 is an objective standard of impropriety. It is not necessary to prove that the employee was acting dishonestly or with conscious impropriety. In R v Byrnes the majority of the High Court stated: Impropriety consists in a breach of the standards of conduct that would be expected of a person in the position of the [employee] by reasonable persons with knowledge of the duties, powers and authority of the position and the circumstances of the case.269

The statutory no profit rule in s 182(1) has been applied to a broad range of conduct that is also covered by the contractual duty, including the diversion of business opportunities, misuse of information and soliciting customers. It has also been held to apply in some cases to which the contractual duty may not apply, such as entering into contracts without authority, abuse of power, engaging in insider trading or misuse

[page 393] of position by trading while insolvent.270 The rule has been applied to a range of behaviour by senior employees, such as directors and company secretaries who use their position to transfer money to assist in meeting personal debts,271 transfer money to a third party in which the employee has an interest,272 or establish a rival business.273 Similarly, using the employer’s property to advantage a third party, such as a trade rival, may be a breach of the duty.274

Duty to account for property 7.52 An employee has a duty to account for property or money received by the employee by reason of his or her employment.275 This duty applies whether the property is received as the result of the employee’s dishonesty, as in the case of a bribe or secret commission, or as the result of the employee’s honesty, as in the case of an employee finding a valuable item during the course of employment.276 The duty of the employee arises at the time at which the employment is made, and not at the time at which the property or money is received.277 The duty is probably both a contractual and fiduciary duty.278 It is enforceable in part by the remedy of account.279 [page 394] An employee who receives property from the employer must restore that property when requested to do so. Where the property is not restored, an account may be ordered. For example, if on an employee’s first day of employment $46 million is transferred from the employer into the employee’s bank account, and then the funds ‘go astray’, an account may be ordered to ascertain where the money has gone.280 An employee who receives money payable to the employer may hold that money in trust or may merely be a debtor. The correct characterisation depends on the express terms governing the arrangement and the intentions of

the parties inferred from the surrounding circumstances. Usually an employee who receives money as part of one transaction will hold the funds on trust and the employee must keep the employer’s funds separate (rather than mingle them with the employee’s funds).281 An employee obliged to keep separate funds will be in breach of his duty when he sells his employer’s wines to a brothel and then immediately spends part of the proceeds.282 However, in some cases the employee will simply owe the employer a sum as a debt. For example, an employee may be on the road for weeks at a time, collecting the employer’s moneys and mingling them with his or her own, and only be required to account for funds received at the end of a trip. An employee owes a duty to the employer concerning the use of the employer’s property that is in the possession or control of the employee. If an employee uses the employer’s property to make a profit, without the employer’s consent, then the employee is accountable for the profit to the employer.283 The employer in AWA v Koval was able to recover the profits from an employee who breached his fiduciary duty by using a line of credit available to the employer to earn $2 million in a short time by speculating on the market.284 [page 395]

Recovering money 7.53 An employee who has acquired property during the course of his or her employment cannot refuse to restore the property to the employer on the ground that the employer is not the true owner.285 An employer can recover property or money from the employee that has been received by the employee as part of a criminal scheme sufficiently connected with the employment, as illustrated by Reading v Attorney General. Mr Reading served His Majesty in Egypt during World War II as a sergeant. He acquired a small fortune by agreeing to accompany truckloads of spirits through the streets of Cairo while in uniform. When he was finally apprehended he had several thousand pounds in his possession. He was charged and sentenced to two years’ imprisonment. On his release the enterprising Mr Reading sought to recover the several thousand pounds from the Crown. He argued that the

law does not give the employer the right to the proceeds of crime. The House of Lords rejected Mr Reading’s arguments. The employee was not permitted to rely upon his own wrong to defeat the employer’s claim. He had an obligation, either legal or equitable or both, to account to his employer for the money received during the course of his employment.286

Connection between property received and the employment 7.54 The duty is only breached when there is a relevant connection between the receipt of the property or money and the employment of the employee. The question in each case is whether the property or money has been received by the employee ‘in the course of his master’s business, or by the use of his master’s property, or by the use of his position as his master’s servant’.287 Another way of putting the matter is to ask whether the position occupied and duties performed by the employee were merely incidental to the receipt of the property or money.288 Two cases concerning the finding of property by employees illustrate the distinction. In Byrne v Hoare the plaintiff was a police officer who was on duty at a drive-in cinema. After the film finished he walked towards an intersection to direct traffic. He saw a gold ingot sitting by the side of [page 396] the road and picked it up. The true owner of the gold could not be found and the plaintiff claimed the ingot as his own. His employer argued that the ingot was property that came into the employee’s possession by virtue of his employment. The court held in favour of the employee, deciding that Byrne did not find the ingot by reason of his office as policeman: ‘the fact that he was on duty when he happened to see the gold was merely coincidental’.289 In contrast, in M’Dowall v Ulster Bank the employee was a porter who found a roll of banknotes under a table while performing his usual job cleaning up after the bank had shut for the day. Again the true owner of the money could not be found and the bank and the porter argued over who had the better claim to the money. The court held that the employee did not gain possession of the roll of banknotes because the money only came into the employee’s

possession by reason of the performance of the employee’s duties.290

Commission advances 7.55 Employees paid on commission often receive advances on their anticipated earnings. Whether the employee is obliged to account for such advance payments on termination of the employment depends on the terms of the contract. An express term stating that the employee is to return (or retain) the advance payments will govern the issue.291 There are diverse authorities on the proper approach to be followed in the absence of an express term. Some support the view that the employee must repay any commission that has not been earned.292 This can be explained in several ways, including by way of an implied term to that effect, by way of an application of the principle that the employee must account for unearned money received from the employer, or that the advance is viewed as a loan. The other approach is that, in the absence of a term to the contrary, the employer has no right to recover the advances from the employee.293 [page 397]

Misuse of information 7.56 An employee has a duty not to misuse information acquired during employment. This broad duty masks a number of complexities. Most cases concern the misuse of confidential information; this topic is considered in detail in 7.111–7.135. Employees have a contractual and statutory duty not to misuse information; this applies to both confidential information and nonconfidential information. The contractual duty applies during but not after employment: see 16.43. The contractual duty is an aspect of the broader contractual duty of fidelity.294

Equitable and fiduciary duties concerning the misuse of information

7.57 Employees have an equitable duty not to misuse confidential information. The duty applies during and after employment, though it has a more limited application after the employment has terminated: see 16.42–16.49. There is no independent equitable or fiduciary duty not to misuse non-confidential information.295 However, many of the employee’s fiduciary duties apply to the misuse of non-confidential information. For example, an employee breaches the fiduciary duty of fidelity by using nonconfidential information to establish a rival business or acquire a secret profit. To ascertain whether the employee breaches the fiduciary duty in such cases the question is not — did the employee misuse non-confidential information? The questions are — did the employee breach the conflict of interest rule or the no profit rule? The equitable duty of confidence, when owed by a fiduciary, is sometimes said to be a fiduciary duty.296 This characterisation adds little to an understanding of the content of the duty of confidence and tends to obscure its purpose.297 The duty of confidence is concerned with keeping confidences and acts on the conscience of the employee,298 while fiduciary duties are concerned with the loyalty of an employee. The equitable duty of confidence often arises in the course of a fiduciary relationship but [page 398] it is not derived from it.299 It is suggested that the employee’s duty of confidence is an equitable but not a fiduciary duty.

Misuse of non-confidential information and use for collateral purposes 7.58 Section 183 of the Corporations Act 2001 creates a statutory duty concerning the improper use of information. It probably covers the use of non-confidential information. An employee improperly uses information when he or she uses it in a manner inconsistent with the conflict of interest, conflict of duties or misuse of position rules: see 7.46–7.51. The statutory duty is discussed further in 7.111–7.115.

The employee may only use information for the purpose for which it is given, such as the performance of his or her work.300 An employee given a customer list, for example, can use it for the purpose of servicing customers for the employer, but not for the purpose of soliciting the customers to join a rival or copying the list for use after the end of the employment.301 Deliberately memorising the list for a collateral purpose will also breach the obligation.302 The employee can use for his or her own purposes a range of information acquired during employment. The employee can build up skills, experience and general knowledge about the work and use that know-how both during and after the employment, so long as any use of non-confidential information is consistent with the express terms [page 399] of the contract and the conflict of interest, conflict of duties and no profit rules.303 In some situations an employee may resign to pursue opportunities to compete with the employer after becoming aware of the opportunities during employment. There is a difference between, on the one hand, resigning to pursue a business opportunity after becoming aware during the employment of the chance to tender for work and, on the other hand, resigning to pursue such an opportunity after working on the tender on behalf of the employer.304 A conflict of duty and interest will arise when an employee engaged to acquire information for the employer uses it to further his or her own interests.305 An employee cannot use information acquired during employment to make a profit in breach of the no profit rule.306 In Regal (Hastings) Ltd v Gulliver the directors found out about a business opportunity during the course of their duties. The opportunity was unavailable to the employer. Without obtaining informed consent, the directors pursued the opportunity and tripled their investment in three weeks. They thereby breached their fiduciary duty not to profit from the information acquired during the performance of their duties and were held to account.307 An employee can probably use non-confidential information as he or she

sees fit if the use does not breach one of the other rules of the duty of fidelity. For example, in ABK Ltd v Foxwell a senior employee, ‘an enthusiast for educational development’, alerted his employer’s rival to a new funding scheme concerning the use of computers that had been promulgated by the Department of Education. This was non-confidential information that was in the public domain. By doing so the employee was not in breach of his duty of fidelity, notwithstanding the fact that the information was of interest to the rival.308 [page 400]

A positive obligation to disclose information 7.59 The existence of a positive obligation on an employee to disclose certain information to the employer usually arises in three broad contexts. First, it will sometimes be part of the employee’s job to acquire information about matters within the scope of the employment. Increasingly, employees are bound by express terms that require the employee to report their own competitive activity, or the activity of others, or pass on information that may be of assistance to the employer. The failure to disclose information to the employer may be in breach of these express terms.309 Second, an employee is obliged to answer questions from the employer about matters within the scope of the employment. An employee does not have an implied duty to inform the employer of his or her own misconduct but may, in some cases, have an obligation to inform the employer about the misconduct of other employees.310 Third, it is sometimes said that an employee has a fiduciary duty to disclose ideas or business opportunities to his or her employer.311 Breaches of duty of fidelity have been found when the employee has failed to pass on information ranging from the valuable (such as an opportunity to buy a patent cheaply)312 to the mundane (the fact that a secretary was dissatisfied and was considering resigning).313 However, each of those cases contains a further element that the employee’s omission was done to harm the employer’s business, further the employee’s interests, or to aid the interests of a rival. The breaches of fiduciary duties in those cases are best understood as

breaches of proscriptive obligations rather than as a failure by an employee to take a positive step to disclose information. There is no fiduciary obligation to disclose to the employer valuable commercial information acquired in the course of employment.314 Rather, there is a duty not to use such information to acquire an advantage for the employee, or a third party, or impose a detriment on the employer. [page 401]

Is there a positive duty to advance the employer’s business? 7.60 The statutory and fiduciary duties of fidelity do not impose positive duties on employees. Those duties do not compel an employee to carry out their duties, or use information, to further the interests of the employer: see 7.61. The statutory and fiduciary duties are each expressed in terms of negative stipulations. The contractual duty of fidelity, coupled with the duty of cooperation, may impose positive obligations: see 7.62.

The fiduciary and statutory duties are proscriptive, not prescriptive 7.61 The statutory duties of fidelity are expressed as proscriptions. In Australia fiduciary duties do not impose positive obligations on fiduciaries — they are proscriptive, not prescriptive.315 There is no positive fiduciary obligation to act in the best interests of the employer.316 This does not mean that an employee may not owe positive contractual duties of fidelity, but that such a duty is not owed as a fiduciary. In the United Kingdom a different approach has been taken.317 The prescriptive–proscriptive distinction applies in a range of contexts. For example, as fiduciary duties are not prescriptive, fiduciaries do not owe a duty to disclose their own misconduct.318 Prospective employees are under no duty to disclose, unasked, past misdeeds to prospective employers, even where the misdeeds include fraud.319 Sometimes fiduciaries are said, inaccurately, to have a duty to disclose a breach of a fiduciary obligation. A

breach of a fiduciary obligation can be avoided by making full disclosure and obtaining informed consent. An employee owing fiduciary obligations can, for example, act in conflict with his or her employer’s interests if the employee has made full and frank disclosure of all material facts to the employer and obtained informed consent to the course of action. A failure to disclose material facts is not a breach of obligation. Disclosure of the breach is a necessary step in negating what would otherwise have been a breach of the fiduciary obligation.320 [page 402]

A contractual obligation to further the employer’s interests? 7.62 Ascertaining if there is a contractual obligation to take positive steps to advance the employer’s interests raises more complex issues. There may be express contractual terms requiring the employee to take positive steps, such as informing the employer of relevant information or to exercise his or her best endeavours on behalf of the employer.321 As to the implied term, there is an argument, first advanced by Professor Finn, that there is an aspect of the duty of fidelity, known to both contract and equity, that: … a person employed in another’s business must not, by any act incompatible with his employment, inflict harm on that business in the furtherance of his own interests, or the interests of a competitor [actual or potential].322

In a similar vein there is dicta that suggests that there is a positive duty of fidelity to act in the best interests of the employer.323 It is suggested that there is no general obligation not to harm, or a positive obligation to further, the interests of the employer. The duty not to harm, as expressed above, would subsume all of the other aspects of the duty of fidelity that involved harm to the employer. If there were a duty not to harm the employer then it would cover any harmful act of an employee that involves a breach of the conflict of interest rule or no profit rule or the conflict of duties rule. Given the scope of the current rules, a general duty not to harm the employer is unnecessary. 7.63 An employee has three duties that already perform much of the work of a separate positive obligation: the duty to cooperate, the duty to obey orders and the duty not to conduct himself or herself in a manner calculated or likely

to destroy or seriously damage the relationship of confidence and trust between employer and employee: see 7.12–7.13, 7.136 and 8.33. In formulating the duty not to harm the employer, Professor Finn appeared to have in mind a term that applied when the employee covertly undermines or sabotages the employer’s business.324 [page 403] Such conduct would be contrary to the implied mutual duty of trust and confidence: see 7.136 and 8.13. A separate positive duty to advance the employer’s interests would be unworkable. Under a positive duty an employee would be required to make a judgment about what was in the employer’s interests and act on that judgment. The employee would conceivably breach the duty by performing work the employee considered unnecessary, by failing to recommend changes to the manner in which their co-workers performed their tasks, or failing to suggest changes to production methods. It would contractually oblige an employee to be a busybody. There would a tension, to say the least, between such a positive duty (or a duty not to harm the employer’s business) and some other aspects of the duty of fidelity. A positive duty would compel an employee to inform the employer of any activity that threatens the employer’s interests, yet under the current duty of fidelity the employee need not tell the employer that he or she plans to set up in competition with the employer.325 A positive duty would compel an employee to report on the activities of other employees which may harm the business (such as their plans to establish a rival company), but under the current duty of fidelity, the law will not prevent employees resigning en masse to set up a rival business: see 7.89. The law currently clearly distinguishes between those who are obliged to hold inventions on trust for the employer and employees who can exploit their own inventions. A positive duty to promote the employer’s interests might require employees in the latter class to disgorge their own valuable ideas: see 7.103. There are a series of cases in which courts have refused to imply a term imposing on the employee an obligation not to harm the employer or to

perform the contract with goodwill to maximise the benefit for the employer. For example, in Electrolux Limited v Hudson the court rejected an argument that the employee, a storekeeper, had an implied obligation to not take part in activities harmful to the employer, in particular by acquiring a patent over a product that diminished the employer’s profits.326 [page 404]

COMMON ISSUES APPLICABLE TO ALL OF THE DUTIES OF FIDELITY 7.64 There are a series of issues that arise when considering the statutory, contractual and equitable duties of fidelity. They crop up in a vast array of contexts, from whether the receipt of a bribe is a breach of the statutory duty to whether an invention is the subject of a constructive trust. Those common issues concern the role of detriment (7.65–7.66), the duration of the obligation (7.67–7.68), the role of informed consent (7.69–7.71) and the role of honesty, good faith and acting for collateral purposes (7.72–7.75).

Advantaging the employee, or another, or causing detriment to the employer 7.65 Detriment to the employer, or gaining an advantage for the employee or a third party, is ordinarily a necessary element in proving a breach of the statutory or fiduciary duty of fidelity.327 As to the statutory duty, a breach of the Corporations Act s 182 or s 183 may occur when the employee misuses his or her position, or information, to ‘gain an advantage for himself, herself or someone else’ or ‘to cause detriment to the employer’. It is not necessary to prove both gain to the employee and detriment to the employer as either will suffice.328 Similarly, to establish a breach of the fiduciary duty of fidelity it is not necessary to prove that there has been detriment to the employer: ‘it is no defence that the [employer] was unwilling, unlikely or unable to make the profits’.329 This proposition applies across a range of the possible breaches of

fiduciary duty such as where there has been a breach of the no profit rule330 or the diversion of a business opportunity from the employer.331 There are obvious justifications for this approach when dealing with secret payments, such as a bribe, where the employer can recover the employee’s gain without proving its own loss.332 Although there is some [page 405] authority to support the view that detriment to the employer is an element of the action for breach of confidence, the better view is that, in an employment context, such detriment is unnecessary.333 There may be a breach of the duty of fidelity where the employer is unable to prove that the employee has acquired a benefit from the breach.334 7.66 The proposition that a breach of the statutory and fiduciary duties of fidelity occurs when the employer suffers no harm has some surprising consequences. A breach may occur when it is impossible for the employer to acquire the benefit and there is no loss to the company arising from the impugned act.335 In Industrial Development Consultants Ltd v Cooley the managing director, Cooley, unsuccessfully sought, on behalf of the employer, to acquire a contract to perform work for the West Midlands Gas Board. The Gas Board then approached Cooley and offered him the work personally. Cooley did not tell his employer of the offer but instead resigned, relying on a false reason based on his health. After his resignation Cooley accepted the offer from the Gas Board. Cooley was in breach of his duty as he had failed to disclose the valuable information that came to him336 and misused his position while he was managing director to acquire a personal benefit. Cooley was liable to account to the employer for the benefit he had received under the contract with the Gas Board notwithstanding the fact that the employer had suffered no loss.337 The necessary detriment or advantage when considering the contractual duty of fidelity is less clear. Though there is little direct authority on the issue, it is suggested that there will be a breach of the contractual duty of fidelity even when the employer cannot prove any loss.338 In such cases the breach of the contractual duty gives rise to three remedies: damages, the

‘self-help remedy’ of termination for breach, and an injunction. Damages are not the gist of the action for breach of contract. If there has been a nondetrimental breach then the damages will be nominal.339 The [page 406] fact that the employer has suffered no loss is also relevant in determining if there has been a breach justifying termination of the contract. Such a breach is less likely to be a serious breach of an intermediate term justifying termination: see 10.48. As to injunctions, proof of detriment is intertwined with the discretionary nature of injunctive relief. It is less likely that an injunction will be issued to restrain the employee’s conduct if there is no detriment or threatened detriment to the employer arising from the conduct.340 There is one exception to the abovementioned principles. It concerns the conflict of duties rule which, in an employment context, largely deals with the holding of an inconsistent second job by the employee. It is suggested that there is no breach of the rule unless there is harm to the employer arising from the performance of the second job, even if the second job advantages the employee.341

Duration of the contractual and fiduciary obligation 7.67 The contractual and equitable duties of fidelity are largely co-extensive with service under the contract. The duties continue to apply after the termination of the employment and before the termination of the contract, such as when the employee has committed a serious breach or repudiated the contract and the employer has not elected to terminate.342 The duties apply while the employee is serving out a notice period. It has been said that an employee’s obligation: … lasts until the last hour of his service. The dividing line between owing his master a duty and owing him none is that imperceptible period of time between the termination of his service and the moment he acquires freedom of action after his service has terminated.343

This can have harsh consequences. The milkman in the Wessex Dairies

case served faithfully for 12 years, but breached the implied duty of fidelity by soliciting potential customers on his last afternoon. If he had waited for a few more hours there would have been no breach. Equitable remedies may be fashioned to ensure that the law does not operate too [page 407] oppressively.344 When an employee commences employment with a rival during the notice period then the breach will not sound in damages if the employer cannot prove any loss.345 Placing an employee on garden leave may modify the fiduciary duties of the employee.346 By way of comment, this is one of the areas in which the rigid principles applied during the period of employment should be applied more flexibly when the employee is seeking to advance his or her career in other employment. The law encourages competition between the employer and the ex-employee after the employment is over,347 but condemns such competition during the employment. The employee’s freedom to compete after employment carries with it a freedom to plan and prepare for future competition,348 which includes a freedom to inquire about and apply for other jobs with the employer’s competitor.349 Employees are permitted to engage in a broad range of activities preparatory to competition. While serving out their notice, particularly if on garden leave, these activities are likely to intensify. It is unrealistic for the law to demand that employees give the employer undivided loyalty during this period.

Duration of the equitable obligation 7.68 The fiduciary obligations of employees ordinarily commence when the contract commences and terminate when the contract terminates.350 The employee’s obligations concerning the use of confidential information are equitable, but not fiduciary: see 7.57. Those equitable obligations survive the termination of the contract in a modified form: see 16.42. The exact bounds of any post-termination fiduciary obligations are not clear. The termination of the contract does not put an end to the

[page 408] employee’s fiduciary obligations concerning the use of trust property that is the subject of a constructive trust created during the employment. An employee, engaged to invent, who makes an invention during the employment will hold the invention on trust for the employer and the termination of the contract does not release the employee from his or her duty not to exploit the invention.351 Similar considerations arise when the employee’s breach of fiduciary duty straddles the termination of the contract. An employee who photocopies the employer’s client list and then uses the list after the termination of employment will breach the duty of fidelity.352 When an employee resigns to take up a maturing business opportunity then, on one view, the employee’s fiduciary obligations continue after the termination of the contract.353

Disclosure and informed consent 7.69 Sometimes fiduciaries are said, inaccurately, to have a duty to disclose a breach of a fiduciary obligation.354 There is no breach of a fiduciary duty if the employer consents to the action of the employee after full disclosure. Disclosure of the breach is a necessary step in negating what would otherwise have been a breach of the fiduciary obligation.355 When an employee commits an act which would be a breach of a duty of fidelity it is necessary for the employee to obtain the employer’s informed consent to avoid a breach.356 The need for informed consent arises in a range of contexts including where the employee receives a commission from a third party which might otherwise be a secret [page 409] payment;357 where the employee competes with the employer;358 where the opportunity arises to divert a business opportunity;359 or where the employee is involved in a business that has dealings with the employer.360 For example,

in Queensland Mines Ltd v Hudson certain mineral exploration licences were issued in the employee’s name. They had been acquired on behalf of the employer. Due to a funding crisis, the employer then could not proceed to exploit the licences. The employer agreed that the employee could do whatever he wished with the licences. The employee resigned his employment, exploited the licences and made a fortune. Notwithstanding the fact that the opportunities came to the employee in the course of employment, the employer failed in its attempt to have the employee account for the profits as it had given its informed consent for him to do so.361 There is no need for full disclosure (or any disclosure) to be made about matters falling outside the scope of the employment.362 The necessity for disclosure, its scope and content, can all be regulated by express terms of the contract. The scope of the consent is a question of fact and consent to some conduct that would be in breach of duty will not necessarily act as consent to all such conduct.363 [page 410] 7.70 To obtain the employer’s informed consent the employee must make a full and frank disclosure of all material facts to the employer.364 What constitutes full disclosure is a question of fact and varies from case to case.365 The amount of detail depends in part on the nature of the contract and the context in which it arises,366 but it will at least extend to disclosing the fact of the interest and the nature of that interest. The employee must disclose: … all material information of which he or she is aware or which he or she has deliberately refrained from acquiring. It does not extend to other facts of which he or she is unaware notwithstanding that prudent inquiry would reveal their existence.367

There need not be any special formality associated with the disclosure. Equity does not require ‘a ritual of formalities in which the fiduciary must ceremonially confess his sin in order to be able to receive absolution’.368 The principles are illustrated in BLB Corporation of Australia v Jacobsen. The employee, with the full knowledge of the employer, was the guiding spirit and had control of the operations of a company (Bel-Knit) that bought and distributed the employer’s goods. There was an obvious conflict between

the employee’s interests and duty. Bel-Knit became heavily indebted to the employer. On terminating the employment the employer alleged that the employee had failed to make full disclosure of the extent of the conflict because he had failed to tell it of the facts that he was a director of and owned over 90% of the issued share capital in Bel-Knit. The High Court held there was sufficient disclosure by the employee. Although the employee had not told the employer of the specifics alleged, the employer was given information [page 411] to enable the employer to reach those conclusions. To suggest that there was a breach of the duty of fidelity: … solely because specific mention was not made of the [employee] being a director and of the precise percentage of his interest in the share capital is in our opinion to forsake the substance of his interest in Bel-Knit for mere detail. Once the [employee] disclosed the nature and extent of his interest in Bel-Knit, as in our view he did, it was for the [employer], if it considered the precise details to be relevant, to ask for them.369

7.71 Consent can be inferred. The inference can be readily drawn when the disclosure relates to a transaction between employer and employee.370 Once consent is obtained it can act prospectively in two ways to the same absolving end: it may be that the subject matter of the disclosure (such as conducting a competing business) is now outside of the scope of the obligations,371 or it may be the consent is for the employee to pursue the matter in the manner he or she thinks fit.372 The onus is on the employee to prove that the employer had full knowledge.373 It is not sufficient for the employee to prove that the employer had all of the facts in its possession to enable it to discover the subject of the disclosure.374 Informed consent may still need to be obtained despite the fact that the employer would not, or could not, have availed itself of the opportunity or benefit.375 The principles set out above relate to the consent necessary to avoid a breach of a fiduciary duty. There is little discussion in the authorities of the relationship between those principles and a variation of the contract. For the reasons set out below, it is suggested that a variation to the contractual duty of fidelity will alter the scope of both the contractual and fiduciary duties of

fidelity, even if that variation occurs without full and frank disclosure. A variation will occur where the employer and employee reach agreement to alter the terms of the contract. Agreement may be express, or be implied from the conduct of either party. It is [page 412] not necessary for either party to make a full and frank disclosure of all material facts before obtaining such agreement.376 It appears to follow that the contractual duty of fidelity could be narrowed through a variation without full and frank disclosure. The fiduciary relationship ‘must accommodate itself to the terms of the contract so that it is consistent with, and conforms to, them’.377 Those fiduciary duties are not broader than the contractual duty. By narrowing the scope of the contractual duty of fidelity through a variation the parties will usually thereby narrow the fiduciary duty of fidelity.

Honesty, good faith and collateral purposes 7.72 Generally speaking employees are obliged to honestly answer questions fairly asked by their employer about matters within the scope of their employment.378 Their obligation to report their own misdeeds to the employer, or to report on the misdeeds of others, depends on the particular circumstances.379 When dishonest answers are given, the motive for and the wilfulness of the breach may be relevant in assessing whether the breach justifies a termination of the contract.380

Honesty and good faith as a defence 7.73 Dishonesty or bad faith is not an element in an action for breach of the duties of fidelity. Nor is honesty or good faith a defence to such actions, subject to s 1318 of the Corporations Act.381 The standards imposed on a fiduciary embody the ‘morality of aspiration’ and fiduciaries must generally conduct themselves ‘at a level higher than that trodden by the crowd’.382 In Regal (Hastings) Ltd v Gulliver a business opportunity arose for the

employer. It could only take advantage of the opportunity if certain [page 413] shares were acquired in a subsidiary company. The employer could not itself acquire those shares, but was desirous of the shares being acquired so that it could take advantage of the business opportunity. The directors themselves voted to personally acquire the shares and tripled their investment in three weeks. In doing so they were acting honestly and in the best interests of the company. Lord Russell stated: The rule of equity which insists on those, who by use of a fiduciary position make a profit, being liable to account for that profit, in no way depends on fraud, or absence of bona fides; or upon such questions or considerations as whether the profit would or should otherwise have gone to the [employer], or whether the profiteer was under a duty to obtain the source of the profit for the [employer], or whether he took a risk or acted as he did for the benefit of the [employer], or whether the [employer] has in fact been damaged or benefited by his action. The liability arises from the mere fact of a profit having, in the stated circumstances, been made. The profiteer, however honest and well-intentioned, cannot escape the risk of being called upon to account.383

7.74 Breaches of trust and fiduciary duty vary greatly in their seriousness. Some breaches are honest and some are trivial. To hold employees fully liable for each breach can work injustice.384 Section 1318 of the Corporations Act provides a defence for employees who have honestly engaged in a breach of the duty of fidelity. The section relevantly provides: If, in any civil proceedings against [an employee] for negligence, default, breach of trust or breach of duty in a capacity as [an employee], it appears to the court before which the proceedings are taken that the [employee] is or may be liable in respect of the negligence, default or breach but that the [employee] has acted honestly and that, having regard to all the circumstances of the case, including those connected with the [employee’s] appointment, the [employee] ought fairly to be excused for the negligence, default or breach, the court may relieve the [employee] either wholly or partly from liability on such terms as the court thinks fit.

The section operates to protect employees for claims under the general law as well as for breaches of the Corporations Law, but not for breaches of other statutes.385 An order under s 1318 only deals with past breaches [page 414]

and not prospective breaches.386 It protects against claims made against the employee by the company.387 It only protects employees who have acted honestly.388

Acting for collateral purposes 7.75 Employees who are exercising powers or performing duties as fiduciaries, or as directors or officers under the Corporations Act, must not exercise those powers or discharge those duties for an improper purpose.389 Those directors, officers and employees may exercise their powers and duties only for the purposes for which they were conferred and not for any collateral purposes.390 To breach this duty the substantial purpose must be collateral.391 The issue is not whether a decision was good or bad.392 The court must determine whether, but for the improper or collateral purpose, the director or employee would have performed the act impugned.393 The clearest cases deal with situations in which the employee exercises a power that only benefits the employee at the employer’s expense. For example, an employee engaged to acquire information cannot use it to further his or her own interests,394 and an employee entrusted with confidential information cannot use it during employment for the improper purpose of establishing a competing business395 or use the information after employment for such a purpose.396 The position is less clear when an employee has a duty to perform and a vested interest in a [page 415] particular outcome, such as where a director acquires a personal benefit (for example, the issuing of shares, the payment of a bonus) as the result of a business decision.397

ASPECTS OF THE DUTY RELATING TO COMPETITION

Competing with employer 7.76 The five rules of fidelity discussed in 7.33 are applied in this section to competition between the employee and the employer. There is no rigid rule that an employee must not compete with his or her employer. Competition will sometimes breach one or more of the rules identified in 7.33. The most common breaches involve active competition with the employer during employment, such as engaging in trading or tendering for work, soliciting customers, the diversion of business and competing with the company for employees by procuring their resignations: see 7.80–7.91. A breach may occur when a third party, such as the employer’s rival, is the beneficiary of the breach.398 The varieties of breach are only limited by the ingenuity of the fraudulent and there will be cases that do not fall within the common categories of miscreance. In such cases the rules in 7.33 can be applied to discern if a breach has occurred.399

The scope of the obligations 7.77 Express terms of the contract may modify the employee’s obligations concerning competitive activity.400 Express terms limiting the freedom of an employee to engage in competition are terms in restraint of trade. Terms, such as an exclusive service clause, must be reasonable to be enforceable: see 16.2 and 16.29. The reluctance of courts to compel an employee to perform an exclusive service clause and similar terms is discussed in 15.27.

The employment and the competitive conduct of the employee 7.78 A breach of the duty of fidelity will only occur when there is a relevant connection between the employment, the competitive conduct of the employee and the business of the employer. The employer’s business [page 416] includes both its current and planned business activities. The required connection between the employment, the conduct and the employer’s

business depends on the particular aspect of the duty of fidelity being considered. The connection between the employment, the conduct and the employer’s business when applying the conflict of interest rule and conflict of duties rule requires that there be a real or sensible possibility of a conflict: see 7.47. The obligations imposed by these rules are limited by the duty of the employee, a concept defined by the scope of the employment: see 7.5–7.10. An employee will not breach these rules when pursuing business opportunities, or engaging in other employment, outside the scope of employment.401 Where the conduct of the employee occurs in a different trade to that of the employer there is no competition between employer and employee and thereby no conflict: see 7.49. More difficult questions arise when the employee knows that the employer plans to trade in a field in which it does not currently engage. A breach may occur when an employer is actively pursuing a maturing business opportunity and the employee resigns to pursue that opportunity: see 7.91–7.93. 7.79 As discussed in 7.50, the no profit rule prevents an employee misusing his or her position to gain an advantage. It is the use of the employee’s position in the course of employment that provides the necessary connection: see 7.11. The rule may apply when the employer was unwilling, unlikely or unable to engage in the competitive activity being pursued by the employee: see 7.50, 7.51 and 7.65. The employee’s duty to account to the employer for property received requires there be a connection between the employment and the circumstances in which the property was received: see 7.54. The misuse of information may apply when an employee uses information, confidential or not, for a purpose other than that for which it was given: see 7.58. The notions of the scope of the employment, the course of the employment and by reason of the employment are discussed in 7.5–7.11. Whether any of the duties of fidelity oblige an employee to refrain from a competitive activity depends upon the particular conduct being considered and ‘whether in all the circumstances he has placed himself in a position where he must act solely in the interest of his employer’.402 Employees do not owe fiduciary duties in relation to every aspect of their [page 417]

work. The duty of fidelity is only owed in relation to acts in which there is a single-minded loyalty owed to the employer. The vast majority of cases in this field concern senior managers and directors. Senior employees have more opportunities to engage in competitive activity. Junior employees have limited chances to misuse their positions for gain and less access to confidential information. A junior employee with a narrow range of unskilled duties is less likely to engage in inconsistent employment. However, the same principles are applied regardless of the seniority of the employee: see 7.34.

Competition during employment 7.80 It will be a breach of the conflict of duty and interest rule for an employee to gain the benefit of a contract with the employer without the employer’s informed consent.403 Directors have additional duties when dealing with the company.404

Soliciting clients 7.81 During the period of the employment an employee cannot solicit clients to conduct a rival concurrent business competing with the employer405 or solicit clients to prepare to conduct such a business in the future.406 Clients in this context include those who supply products and services to the employer as well as persons to whom the employer supplies products and services.407 Soliciting includes engaging in competitive tendering to obtain the business of the customer.408 The cases draw a distinction between, on the one hand, an employee who canvasses or seeks the business of the clients of the employer409 and, on the other [page 418] hand, employees who merely tell those customers of the employee’s future plans.410 The duty continues until the contract is terminated: see 7.67–7.68. There is some authority to support the view that an accepted offer of

employment from a client may, in some cases, be treated as if it were soliciting by the employee. In Sanders v Parry, in many ways an unsatisfactory decision, the employee received an offer from the employer’s major client. The client agreed to engage Parry to perform directly for the client the same work he had previously been performing for the employer. The offer, though unsolicited, placed the employee in a position where his interests and his duty to the employer conflicted. He was obliged to act in his employer’s interests. By accepting the offer he did not do so and was thereby in breach of his contract.411 There is a tension between the approach in Sanders v Parry and the vigilance of the common law to protect the freedom of the employee to leave the employment and exercise his or her labour, skill and talent after the employment terminates.412 It is doubtful that an employee owes a single, undivided loyalty to the employer when considering a job offer to progress his or her career.413

Diverting the employer’s business 7.82 It is a breach of the duty of fidelity for an employee to divert business from the employer to the employee, or interests associated with the employee or to the employer’s rival.414 The most common variety of this breach is for a senior employee, beyond the oversight of a supervisor, to arrange for business to be referred to a rival with which the employee is associated. The new business flourishes while the employer’s declines. The employee, either on discovery or on a pre-ordained date, then leaves the sinking ship and sails off with the purloined business. The breach ordinarily involves a contravention of the no profit rule as well as the [page 419] conflict of duty and interest rule. For example, in Warman International Ltd v Dwyer the senior manager breached the duty of fidelity by convincing a major customer of the employer to terminate an agency agreement and to enter into an agency agreement with the employee.415

Using information to aid a rival or establish a business

7.83 The extent to which the employee may use information acquired during the employment to engage in competitive conduct depends on the type of information, how it was acquired and when it is used. There are limits that apply after employment to the use that can be made of confidential information acquired from the employer. In the course of employment an employee will acquire knowledge arising from the performance of the employee’s work which will become part of the employee’s know-how and that can be freely used after the employment has terminated in the absence of a reasonable express restraint.416 The acquisition or use of such knowledge is not a breach.417 Employees are often given information by the employer which is not part of the employee’s know-how. Information acquired during the course of employment is imparted for a particular purpose and cannot be utilised for a collateral purpose, such as using it during employment for the purpose of establishing a competing business or aiding a rival.418 An employee engaged to acquire information from third parties cannot use it to further his or her own interests.419 An employee who during the course of employment compiles, copies or memorises confidential information in a customer list for later use by the employee or a competitor will breach the duty of fidelity and the employee may be restrained from profiting from that breach.420 An employee will breach the duty of fidelity by misusing his or her position when he or she surreptitiously gains information unrelated to his or her work.421 [page 420]

Competing for employees and suppliers 7.84 Lord Justice Cummins-Bruce once stated: The law has always looked with favour upon the efforts of employees to advance themselves … In the absence of restrictive covenants, there is nothing in the general law to prevent a number of employees in concert deciding to leave their employer and set themselves up in competition with him. And there is now no rule of law or equity which restrains a competitor from seeking out the servants of another and offering him employment provided that he does not thereby procure a breach of the servant’s contract of service.422

There will be some circumstances where the recruitment of fellow employees to leave the employer will be a breach of the duty of fidelity. Whether there has been a breach is dependent on the timing and manner of the approach. There is also a distinction drawn between giving advice to fellow employees to give notice in accordance with the contract and procuring the breach of their contracts. It is usually a breach of the duty of fidelity for a currently engaged employee to advise co-workers to resign their employment in breach of their contracts so as to aid the employer’s rival or to further the interests of the employee. The position is less clear when one employee advises or persuades another to give lawful notice so that they can join the employer’s rival or form a rival firm. Whether there is a breach in such cases will depend in part on the manner in which the employees are approached and surrounding facts. For example, there may not be a breach where one employee who is planning on resigning is besieged by disgruntled employees keen to join him or her and an informal arrangement coalesces to form a competitor.423 There is more likely to be a breach when there is a well formulated strategy under which a leader convinces subordinates to all resign en masse and create a competitor.424 Often an employee will leave employment, join a competitor and then seek to recruit former colleagues. A restrictive covenant can protect an employer against such recruitment.425 In the absence of a valid restrictive covenant there is no impediment to an ex-employee suggesting that his [page 421] or her former colleagues give notice in accordance with their contracts to join a rival.426 The names, addresses, aptitudes, character or particular fields or specialties of work of former colleagues are not ordinarily a trade secret.427 The inducement of employees to leave employment may, in some cases, constitute the commission of the tort of intentionally procuring a breach of contract. The tort is committed when the defendant persuades a current employee to breach his or her contract.428 The breach procured is usually a breach of an exclusive service clause, or a restraint of trade clause, or a term

requiring notice be given by the employee.429 The tort is not made out when the defendant persuades an employee to terminate the contract in accordance with its terms, such as by giving notice. The persuasion can consist of some pressure or procurement. Mere advice is not enough, though the line between advice and persuasion is a fine one.430 Nor is it sufficient for the defendant to harbour an uncommunicated desire that the contract be breached.431 The fact that the employee is quite willing to breach his or her contract is not a defence.432 Only proved loss will result in an award of damages.433

Work within and outside of ordinary hours 7.85 An employee can generally use his or her spare time as he or she sees fit, subject to certain limited exceptions. In the absence of an express exclusive service clause, a term will not be implied by law that the employee must exclusively serve the employer.434 About 33% of Australian employees are engaged in part-time employment and about 6% hold two or more jobs.435 [page 422] An employee may breach the duty of fidelity as the result of engaging in certain conduct outside of the employee’s working hours. A misuse of position to gain a secret profit can occur even if the misuse occurs outside of working hours.436 Curious employees, not engaged to invent, who make a discovery outside of hours may retain the benefit of the invention.437 An employee engaged to solve a problem or create an invention may be in a different position. Legend has it that King Hiero II of Syracuse asked Archimedes to figure out how to assess the purity of a golden crown. Archimedes realised the solution when he stepped into a bath.438 The fact that a solution was discovered after hours will be a relevant, but not determinative, consideration in addressing who owns it. In some cases the copyright in works written out of hours by an employee engaged to write such material may be created in the course of employment and thereby be owned by the employer.439 The diversion of the employer’s business in breach of duty may occur due to conduct outside of the ordinary hours of the

employee.440 7.86 Work performed outside of the primary employment of the employee may be in breach of the conflict of duties rule: see 7.48–7.49. In Hivac Ltd v Park Royal Scientific Instruments Ltd two very senior production managers, engaged by a monopoly, had access to highly confidential information. They were working secretively for a rival of the employer and, it appears, passed on confidential information allowing the rival to start production. Their activities were uncovered and they were dismissed. The court’s decision concerned five different employees of the monopoly, recruited by the production managers to the service of the rival, who were engaged in ‘manual labour of a very skilled kind’. These five employees had used their spare time to secretly assist the rival to develop its business from its early stages to that of a competitor. It was ‘almost inevitable’ that confidential information would be passed to the rival. The five employees could not be dismissed due to the wartime Essential Work Order. The employer sued the rival for the tort of inducing a breach of the contracts of the five employees. The court held that each employee was in breach of his contractual duty of fidelity by ‘knowingly, deliberately and secretly [setting] himself to do in his [page 423] spare time something which would inflict great harm on his employer’s business’.441 Lord Greene noted that: The law would, I think, be jealous of attempting to impose on a manual worker restrictions, the real effect of which would be to prevent him utilizing his spare time. He is paid for five and a half days in the week. The rest of the week is his own, and to impose upon a man, in relation to the rest of the week, some kind of obligation which really would unreasonably tie his hands and prevent him adding to his weekly money during that time would, I think, be very undesirable.442

Hivac is an application of the conflict of duties rule that prohibits an employee holding an inconsistent engagement with a third party: see 7.48–7.49. As Peter Gibson J has put it: An employee whilst in his employment must not compete with his employer and must not work for another employer if the other employment would be inconsistent with his first employment. But in his spare time when he is not obliged to work for his employer he is normally entitled to do what he likes, including work for another employer, provided it does not inflict great harm on his first employer’s business.443

It appears that harm is a necessary element in proving such a breach. The harm to the employer can consist, as it did in Hivac, of creating a viable rival to a monopolist.444 In ABK Ltd v Foxwell the employee used his annual leave to write a training course, that he thought was of little interest to his employer, which he intended to use in future employment with the employer’s rival. There was no breach of the duty of fidelity in the absence of any harm caused by his actions to the employer.445 In Nova Plastics v Froggatt there was no breach by the ‘odd jobs man’ who worked for a rival in his spare time as his work did not contribute seriously to competition between the firms and it did no harm to his primary employer.446 A breach may occur in the absence of the employee [page 424] passing on confidential information to the rival.447 Whether the second employment is inconsistent in the relevant sense with the primary employment depends in part on the scope of the employment.448 7.87 While at work the employee is paid to serve the employer.449 The employer is not entitled to the benefit of the fruits of all the employee does during the time spent at work.450 Occasionally the cases focus attention on the effect of an employee spending working time developing and running a private, non-competing business. It is the nature of the employee’s act, rather than the amount of time spent performing it, which will be the key consideration in determining if there is a breach of the duty of fidelity. It may be a misuse of time in contravention of an implicit order to serve the employer and thereby a breach of the contract to spend excessive amounts of time doing any act other than work while paid to perform work. Misusing time by running a non-competing business and disobeying a direction is not in itself a breach of the duty of fidelity. Whether the misuse or disobedience will justify termination is judged according to the usual tests: see 10.38–10.48. For example, in Blyth Chemicals Ltd v Bushnell the employee used some of the employer’s time, and their property, to conduct his own business that was not in competition with that of the employer, but that use did not justify termination as it was not substantial.451

Preparing for post-employment competition 7.88 A former employee is free to conduct or participate in a business in competition with his or her former employer, subject to any valid restraint of trade clause or misuse of confidential information. Former employees can establish a rival business, make full use of their acquired know-how, recruit the employer’s clients, engage the suppliers of the employer and convince former co-employees to exercise their rights to resign. If an employer wishes to prevent such conduct then it should seek [page 425] a reasonable restraint of trade clause.452 The freedom to compete after employment ‘carries with it a freedom to prepare for future activities, which the employee plans to undertake, once he has left’.453 By way of comment, it is suggested that there is a tension in the common law between the duty of fidelity owed during employment, with which competition with the employer is usually incompatible, and the freedom to prepare for competition after employment. When dealing with preparations to leave employment it is unrealistic to demand that employees exhibit that exclusive obligation of loyalty — to act in the employer’s interest and not in their own — which is the hallmark of any fiduciary duty.454 There are two features of employment, discussed in 1.7 and 1.9, that are relevant in this context: the freedom to choose one’s employer and the career enhancement interest. Employees should be free to leave their job and pursue their dreams. The law should be slow to impose obligations of single-minded or exclusive loyalty on an employee that will retard those interests. It is difficult to draw a clear line between permissible preparatory activities and those that breach an employee’s obligations.455 Close attention needs to be paid to the nature of the employee’s obligations and the specific preparatory steps taken.456 The contractual and fiduciary obligations of directors and officers is clouded by the fact that directors and officers owe a statutory duty to act in the best interests of the company that may, in some cases, oblige directors and officers to reveal their plans to compete to their

employer.457 Further, some recent cases in the United Kingdom have determined that senior employees have fiduciary obligations to act in the best interests of the employer [page 426] and inform the employer of an irrevocable intention to compete.458 These cases appear to be inconsistent with the Australian approach that fiduciary duties do not impose positive duties that compel an employee who is not a director or officer to act in the best interests of the employer.459

Intention to compete and resignations 7.89 It is not a breach of the duty of fidelity for an employee to form an intention to compete with the employer after the termination of the contract.460 Nor, ordinarily, is the employee obliged to inform the employer of that intention.461 It is sometimes suggested that employees must not secretly make arrangements to compete after employment with their employer.462 This is putting the obligation too broadly. An employee who terminates the contract or gives notice in accordance with the contract does not breach the duty of fidelity: ‘a director is entitled to resign even if his resignation might have a disastrous effect on the business or reputation of the company’.463 Resignations en masse in conjunction with other employees are not necessarily a breach, though inducing other employees to leave may be a breach.464 A resignation to take advantage of a maturing business opportunity may be a breach: see 7.91–7.93. An employee does not breach the duty of fidelity by being in a position to enter into competition in the future. There needs to be a real conflict between the employee’s acts and his or her duties, and an apprehension about a possible future breach is not enough.465 [page 427]

Readiness and planning 7.90 Merely planning to leave to work for a competitor or to set up in competition is not per se a breach of the employee’s duty.466 Nor is creating a business plan, even if the employee draws on his or her know-how to do so.467 Nor is making inquiries about the cost of supplies.468 During employment the employee ‘may legitimately canvass, issue his circulars, have his place of business in readiness, hire his servants, etc’.469 The employee can prepare for competition by being agreeable and attentive to the employer’s clients with a view to later obtaining the benefit of the clients’ friendly feelings.470 It is a different matter, however, to actively compete, solicit customers or divert business while the employment subsists.471 The line will be crossed when an employee goes beyond preparation and commences engaging in competitive tendering or actual trading against the employer or secretes away the employer’s valuable information for future use.472 For example, breaches have been established when a senior employee obtained funding to establish a rival business, not from a bank but from a customer to whom he was introduced in the course of employment while pursuing a business opportunity for an employer. He acquired equipment, rented premises and started developing rival product using trade secrets.473 Similarly, there was a breach when an employee established a private email account that he started to use to conduct some business and sent the employer’s valuable designs to a potential supplier.474 [page 428]

Resigning to secure a maturing business opportunity 7.91 Once the employment has terminated the contractual duty of fidelity ceases and the employee may compete with the employer. The employee may resign for that purpose.475 An employee will breach his or her duty of fidelity when he or she resigns to take advantage of a maturing business opportunity that is being actively pursued by the employer and the employee acquires the advantage himself or herself.

The conceptual foundation of this post-employment fiduciary obligation is somewhat unclear. On one view an employee’s fiduciary obligations may survive the termination of the relationship that called those duties into existence, just as the equitable duty of confidence may survive after the termination of the contract.476 Alternatively, as the opportunity belongs to the employer, it is a breach of fiduciary duty for the employee to take steps to acquire that property, even when those steps (such as resigning) would be otherwise lawful. On this view the breach occurs during employment, but the benefit the employee acquires comes to fruition after the termination.477

The principles in Canadian Aero Service Ltd v O’Malley 7.92 The much cited decision in the Supreme Court of Canada in Canadian Aero Service Ltd v O’Malley478 sets out the relevant principles. That matter concerned directors who were negotiating about a particular project on behalf of the company. They resigned to pursue the opportunity themselves and thereby breached their fiduciary duties. The directors, the court held, were precluded from obtaining for themselves any property or business advantage either belonging to the company or for which it had been negotiating, especially as they had been participants in the negotiations on behalf of the company: [page 429] In my opinion, [the strict ethic in this area of the law] disqualifies a director or senior officer from usurping for himself or diverting to another person or company with whom or with which he is associated a maturing business opportunity which his company is actively pursuing; he is also precluded from so acting even after his resignation where the resignation may fairly be said to have been prompted or influenced by a wish to acquire for himself the opportunity sought by the company, or479 where it was his position with the company rather than a fresh initiative that led him to the opportunity which he later acquired. … The general standards of loyalty, good faith and avoidance of a conflict of duty and self-interest to which the conduct of a director or senior officer must conform, must be tested in each case by many factors which it would be reckless to attempt to enumerate exhaustively. Among them are the factor of position or office held, the nature of the corporate opportunity, its ripeness, its specificness and the director’s or managerial officer’s relation to it, the amount of knowledge possessed, the circumstances in which it was obtained and whether it was special or, indeed, even private, the factor of time in the continuation of fiduciary duty where the alleged breach occurs after termination of the relationship with the company, and the circumstances under which the relationship was terminated, that is whether by

retirement or resignation or discharge.480

A breach will occur when an employer is actively pursuing a maturing business opportunity and the employee resigns to pursue that opportunity for himself or herself (or to acquire it for a third party).481 This is an application of the conflict of interest rule. Further, the breach may arise from the no profit rule where an employee resigns to acquire a business opportunity that comes to the employee by reason of the employee’s position rather than as the result of a fresh initiative of the employee. For example, in Deeson the employee, when managing director, contracted on behalf of the employer to perform specific work. The employee resigned and then contracted to personally perform that work. As a result of his former position he knew of the job, its details, its price, when and where it was to be performed, who were the subcontractors engaged and at [page 430] what rate. The employee’s position gave him ‘inside running’ to seize the opportunity.482 7.93 As to the ‘ripeness’ of the maturing business opportunity, it is not necessary that the employer have concluded a contract with the client. It is sufficient if the employer had a protocol or formal arrangement under which the company had a reasonable expectation of doing business.483 However, the employer must have more than a mere hope of acquiring the opportunity and must be actively pursuing it.484 There will be no breach by an employee who resigns to pursue an opportunity that the employer had no prospect of acquiring.485 There must be a relevant connection between the resignation and the obtaining of the business. A resignation unconnected with the maturing business opportunity will not suffice, even if it is to establish a rival business.486 All employees are entitled to use the know-how acquired during the course of employment, unless restrained by a valid express term.487 A resignation to set up in competition and use that know-how is not per se a breach.488

SECRET BENEFITS AND ACCOUNTING FOR THE EMPLOYER’S PROPERTY Obtaining the advantage of secret benefits 7.94 An employee must not, without the employer’s consent, obtain the advantage of a secret benefit made in the course of or by reason of the [page 431] employment.489 This obligation is part of the contractual duty of fidelity.490 In addition, under the Corporations Act employees of corporations ‘must not improperly use their position to gain an advantage for themselves’.491 The duty is also a fiduciary obligation that is imposed on all employees, from managing directors to their chauffeurs.492 The scope and content of the contractual, fiduciary and statutory duties are very similar, if not coextensive.493 The duty is an application of the no profit rule, and may also involve an application of the conflict of interest rule and in some cases will be an application of the rule prohibiting the misappropriation of the employer’s property.494 7.95 It is a common law misdemeanour for a person holding a public office to receive a bribe.495 In each state and territory it is a crime for an employee to corruptly solicit or receive a secret payment.496 A person [page 432] who makes a secret payment to the employee (‘the donor’) will usually be committing the tort of inducing breach of contract. The employee and the donor may also be jointly committing the tort of fraud against the employer; the consideration for the agreement to bribe will usually be illegal and the bribe will, once paid, be extremely difficult for the donor to recover.497

The duty is imposed so that the employee, being in a position of trust and confidence and undertaking to act for the benefit of his or her employer, is not tempted to place interest ahead of duty and use his or her position to make a personal gain.498 The duty not to take secret payments applies whether or not those payments are made for a corrupt purpose: ‘proof of corruptness or corrupt motive is unnecessary…’.499 It is not essential to prove that the employee was influenced or corrupted by the secret benefit as there is an irrebuttable presumption that the employee has acted corruptly once it is proved that the secret benefit has been provided.500 The duty may be breached even where the payment does not cause damage to the employer.501

Types of secret benefits and the connection with employment 7.96 Secret benefits come in many forms. It may be a payment in cash, or be another type of benefit, such as shares, a discount, a commission, a [page 433] rebate or a fee.502 A bribe is a type of secret benefit. It is a payment made to (or other benefit provided to) an employee, and kept secret from the employer, in circumstances in which the payment or benefit could induce the employee to show favour towards, or exert influence on behalf of, the donor.503 It is sometimes difficult to distinguish between bribes and tips or gratuities. A tip in the tip-jar, called the tronc, may not be the property of the employer whereas a tip on the bill may be. If the payment is part of the agreed remuneration of the employee then it will not be the subject of the duty, even if it is paid by a third party.504 A payment is less likely to be a secret benefit if it is small and is promised or given when its receipt could not influence the employee in the performance of his or her obligations.505 7.97 The secret benefit must have a relevant connection with the employment. The duty is breached when the secret benefit is made to the employee in the course of the performance of the obligations under his or her contract.506 An employee whose duties include negotiating with a client must

not receive a secret benefit for engaging in the negotiations or for the successful completion of the negotiations.507 The prohibition [page 434] applies when the secret benefit has no actual effect upon the mind or actions of the employee.508 However, if the employee has completed the performance of any obligations involving the donor (and the employee is unlikely to be engaged in future dealings with the donor), then a token of appreciation gifted to the employee would not breach the duty.509 The need for a relevant connection between the payment and the employment is illustrated by the similar cases of Furs Ltd v Tomkies and Framlington Group plc v Anderson.510 Both cases shared the following substratum of facts: the defendants were senior employees, part of the business of the employer was being sold to a third party, and the purchaser, unbeknownst to the employer, entered a contract with the employee to make a substantial payment to the employee on the transfer of the business. In Furs, the employee was himself responsible for negotiating the sale of the business to the purchaser. He made a secret profit arising from the performance of that duty. In Framlington, the employee was specifically instructed not to be involved with the negotiation of the sale of the business. He played no role in the sale. He did not breach his duty as he did not misuse his position. The duty may also be breached when the secret payment is made by reason of the fact that the employee filled a particular position with the employer and misused that position, even if the payment was not directly connected with the performance of the employee’s duties.511 The employment must be the effective cause of the acquisition of the benefit. It is insufficient that the benefit would not have been acquired but for the employment. For example, a benefit is acquired by a police officer in the course of employment when he or she finds a valuable item while conducting a search, but not when the police officer happens to fortuitously find a valuable item while simply walking along a road.512

[page 435]

Secrecy, informed consent and the consequences of receiving a secret benefit 7.98 A secret payment must be secret from the employer: ‘the real evil is not the payment of money, but the secrecy attending it’.513 A payment is not secret if it is made with the knowledge and assent of the employer.514 Nor is it secret if it is part of the agreed remuneration of the employee, even if the remuneration is partly provided by a third party.515 There is no breach if the employee receives an unsolicited payment and accounts for it to the employer.516 There is no breach of an employee’s fiduciary duty when he or she makes full disclosure about the payment to the employer and obtains the employer’s informed consent.517 As discussed in more detail in 7.69–7.71, what constitutes full disclosure by an employee varies from case to case. It will certainly require that the employee reveal the fact of a payment. Where the payment is of a significant sum, full disclosure may require that the employee reveal that the payment is for a substantial amount, although it is the substance of the matter and not the mere detail that are important.518 When an employee alleges the employer gave its informed consent to the payment, the onus is on the employee to prove that the employer had knowledge of the payment. It is not sufficient for the employee to prove that the employer had all of the facts in its possession to enable it to discover the secret commission. 7.99 In addition to any rights to terminate discussed in 7.100, the law grants a range of remedies to recover the benefit the employee derived from the secret payment. Those remedies vary according to whether the duty being enforced is based in contract, statute or arises from the [page 436] employee’s fiduciary obligations. The employer will also have remedies against the donor of the secret commission.519

An employer can recover the secret benefit paid by the donor to the employee in an action for money had and received.520 Alternatively, the employer can seek damages for fraud and the damages recoverable will be at least the value of the secret benefit.521 In neither of these actions is it necessary for the employer to prove actual loss or damage as the result of the transaction. In Attorney-General v Goddard the employer was able to recover bribes paid to the employee — a police officer — despite the fact that the employer was not able to prove that it suffered any pecuniary loss arising from the payments.522 The employer can recover actual damage over and above the value of the secret payment if it can prove them.523 Where there is a breach of the employee’s fiduciary obligation, the amount is recoverable as an equitable debt. The employee is also liable to account for the secret benefit.524 Under the common law, though not in equity, the secret benefit is the property of the employee.525 That property is held in a constructive trust for the benefit of the employer.526 This is [page 437] an application of the general rule that any property acquired, or profit made, by an employee in breach of fiduciary duty is held by him or her in trust for the employer.527

Consequences of breach: the right to terminate 7.100 A breach of the employee’s duty not to obtain the advantage of a secret benefit is usually an act justifying the termination of the contract.528 This proposition is simply an application of the general rule discussed in 10.38–10.48 that an employer may summarily dismiss an employee who commits a sufficiently serious breach of the duty of fidelity.529 The unsuccessful solicitation of a secret benefit may be a repudiation.530 The duty is not breached by the mere receipt of an unsolicited payment.531 In such cases the employee is liable to account to the employer for the payment. A failure of the employee to do so will either be a breach of the duty to account for the employer’s property or a breach of the duty not to take secret benefits

or both.

OWNERSHIP OF THE WORK, INVENTIONS AND INTELLECTUAL PROPERTY Ownership of the product of work 7.101 Ascertaining the owner of property created by the employee during the period of the employment depends on when, where and how the property was created, the nature of the property created, the express and implied terms of the contract, the equitable obligations of the employee and, in some areas, statutory regulation. As befits a capitalist economy, the employer owns the work the employee is paid to produce: [It] … is an implied term, though not written at large, in the contract of service of any workman that what he produces by the strength of his arm

[page 438] or the skill of his hand or the exercise of his inventive faculty shall become the product of his employer.532

Specifically in relation to inventions, there is a term implied in each employment contract that any invention or discovery made in the course of employment and with the requisite connection to the employment is the property of the employer and not of the employee.533 This is described below as the employee’s duty concerning inventions. The difficulty arises in determining the requisite connection, a matter considered in more detail in 7.103–7.107. 7.102 The duty concerning inventions is a term implied in law and can be excluded or modified by the express or implied agreement of the parties or by statute.534 An express term governing the matter may be unreasonable restraint of trade.535 When the express restraint is unreasonable the employer may rely on the implied term.536 There are some slight statutory modifications to the implied term. First, for

some public sector employees the test is whether the inventions or discoveries were made ‘during the course of employment’.537 Second, the issue under the Copyright Act 1968 (Cth) is whether the work is ‘made by the author in pursuance of the terms of his or her employment’.538 There are also special statutory provisions concerning the ownership of the copyright in works made by or under the direction or control of the Commonwealth or state.539 Third, the employer may be a registered owner of a design under s 13 of the Design Act (2003) (Cth) if the employee made the design ‘in the course of his employment’.540 Finally, [page 439] in the United Kingdom there is now a statutory test used to determine whether an invention belongs to an employer.541 The employee’s duty concerning inventions is part of and co-extensive with the overarching contractual duty of fidelity.542 In particular, for an employee to acquire or retain property that is the product of the employee’s contracted work often involves a contravention of the conflict of interest rule, the no profit rule and the rule prohibiting the misappropriation of the employer’s property: see 7.46, 7.48 and 7.50. Whether employees also have a concurrent and co-extensive equitable duty to hold inventions in trust for an employer is unclear.543 In Victoria University of Technology v Wilson the court held there was no contractual duty to hold a particular invention in trust for the employer as the invention was outside the scope of the employment. Yet the court also held that the employee was bound to account for the benefit as it was acquired in breach of the employee’s fiduciary duty. The scope of the fiduciary duty must be consistent with the contractual duty: see 7.40–7.41. By way of comment, it is suggested that fiduciary duties of employees should not be applied to permit employers to obtain rights for more than they have contracted for. It is difficult to see how a fiduciary’s obligation to account for an invention could be imposed where contract imposes no contractual duty to account for the invention.544

The connection between the invention and the

employment545 7.103 There have been various formulations of the common law test describing the requisite connection between the employment and the invention. One test is that the invention belongs to the employer if the invention is the ‘product of the work which the servant is paid to do’.546 [page 440] One rather circular test used in some cases is that the duty of fidelity will require the employee to give the benefit of the invention to the employer if it is consistent with the relationship of good faith to do so.547 Another formulation is that the invention must be ‘made in the course of employment’.548 Another is that the invention must arise from the performance of the employee’s duties.549 Each formulation seeks to express essentially the same notion. Ultimately the court has to determine whether the employee had a duty to invent the invention in issue.550 If, and only if, there is a duty to make the invention, then the employee has a series of subsidiary duties, such as a duty to assign his or her interest in the invention at the employer’s request,551 and a duty not to retain the personal benefit of holding the invention.552 Each of these subsidiary duties are corollaries of the principal duty of the employee to invent and to act as a trustee of the invention. 7.104 The existence of the employer and employee relationship alone does not give the employer ownership of inventions made by the employee during the period of employment: The mere existence of a contract of service does not in itself disqualify the officer or employee from taking out a patent for an invention made by him during his term of service, even though the invention may relate to subject matter germane to, and useful for, his employers in their business, and even though the employee may have made use of his employers’ time and servants and materials in bringing his invention to completion, and may have allowed his employers to use the invention while he was in their employment.553

[page 441]

Where an employee has a duty to invent, and the employee’s invention is a product of what he or she was employed to do, it will belong to the employer unless otherwise agreed.554 The rights of the employer to patent the invention arise by operation of the contract and any equitable obligations and are recognised, but not created by, the Patents Act 1990 (Cth).555 Where there is no duty to invent, or the invention lacks the requisite connection with the employment, the employee may exploit the invention and obtain a patent.556 In such cases when the employer uses the employee’s patented invention without permission, the employee may be entitled to compensation arising from that unauthorised use.557 Whether the employee has a duty to invent is a question of fact. As the Full Court stated in University of Western Australia v Gray: Unsurprisingly, express contractual stipulation apart, with the employer’s entitlement turning on that which it was the employee’s ‘duty’ to do — and for which the employee was paid — the recurrent preoccupation in the case law has been in each instance with the actual subject matter and purpose of the employee’s engagement itself and with the question: ‘[w]hat is it that he is employed to do?’ The end of this inquiry is to ascertain whether, if at all, it was part of an employee’s engagement with his or her employer to utilize his or her ‘inventive faculty’ in an agreed way or for an agreed purpose for the benefit of, or to further the purposes of, the employer. To use the shorthand of Electrolux Ltd v Hudson [1977] FSR 312 at 326, was the employee ‘employed to make or discover inventions at all?’, or, as French J put it, did the employee have ‘a duty to invent?’558

7.105 Courts principally consider two broad matters when ascertaining if the employee had a duty to invent the particular invention. First, the duties performed by the employee. An employer is entitled to the benefit of the ‘product of the duties which the employee is paid to perform’.559 The duties — what the employee is paid to do — may be defined by express terms. When they are not, they may be inferred from the nature of the employee’s position. Those engaged within the inventive stream of an enterprise (such as designers, engineers, chemists developing new [page 442] compounds) are more likely to have a duty to invent560 compared with those engaged outside of that stream (such as cleaners, salespeople, supervisors).561 The position of very senior managers in a close and confidential relationship

with the employer is more difficult to classify. The duty to invent may arise when: The employee’s managerial and inventive responsibilities combined are such that he or she, as a fiduciary, is obliged to give the employer the benefit of any invention developed in the course of his or her employment that is germane to the employer’s business.562

If inventing is outside of the scope of the employee’s duties then the employee is entitled to the benefit of an invention even if it relates to the business of the employer and was made during work hours using materials owned by the employer.563 For example, in Electrolux Limited v Hudson the employee was a storekeeper for a vacuum cleaner manufacturer. He and his wife invented an improved adaptor for a vacuum cleaner. The court held that the employer did not own the invention even though the invention was clearly related to its business. The invention was not sufficiently connected with the duties of Mr Hudson as a storekeeper.564 7.106 Second, courts consider the circumstances attending the making of the invention, including whether the invention was made as the result of a specific request by the employer.565 An invention need not be made in response to a specific request by the employer to solve a problem.566 When an employer sets the employee the task of solving a problem, and the employee solves the problem by making an invention, the employer [page 443] is entitled to the benefit of that invention.567 An employee who is set the task has an obligation to use the best of his or her abilities to invent a solution, though this positive obligation may arise implicitly from the obligations to obey orders and cooperate rather than being part of the duty of fidelity.568 A specific request by the employer to solve a problem may enlarge the employee’s ordinary duties.569 The employee’s duties may evolve over the period of employment.570 An employee may be involved in a continuous improvement process that obliges the employee to disgorge inventive ideas as opposed to merely reporting problems.571 The employee may have a duty to invent as to one part of the employer’s business, but not in others.572 The use of the employer’s time and resources to create the invention is not

determinative.573 7.107 The approach taken by the courts to inventions is illustrated by Spencer Industries Pty Ltd v Collins. In that case the employee was a sales manager who invented a new product. The employer was a small company. The employee needed technical knowledge to sell the products. His ordinary duties were the sale of products, not their invention, but it was within the scope of his duties to make suggestions to expand the product range. The court found that: … [there was] a residual area in which it was open to Spencer Industries to direct him, whether expressly or implicitly, to use his technical skills to undertake additional duties … It was no part of Mr Collins’ ongoing duties to invent products for Spencer Industries … Nor was the invention the outcome of a direction given to Mr Collins within what I have described as the residual area in which he could be directed to perform tasks other than sales tasks. Mr Collins was not directed by [the general manager], or anyone, to invent a new rasp blade or to undertake any inventive activities which resulted in the invention. Mr Collins advised

[page 444] [the general manager] of the invention, which he had conceived and developed in his own time, only when the inventive steps concerning it had been completed. The invention was not, in my view, the product of the work which Mr Collins was paid to do.574

Accounting to the employer for inventions 7.108 When an employee has a duty to invent, and creates an invention to which that duty applies, the employee must account to the employer for property created. The employee’s interest in the invention and any resulting patent is held on trust for the benefit of the employer. The trust is created as soon as the employee makes the invention. The employee is the trustee, the employer is the beneficiary and the invention or discovery is the trust property. As trustee the employee is obliged to give to the employer the benefit of the trust property.575 This obligation is created by the trust. Its existence does not depend on the existence of a patent for the invention. 7.109 A patent is a form of intellectual property granted for inventions. The grant of a patent permits the patentee to exclusively exploit the invention for a limited period of time. A patent may be granted to the inventor, who is

often the employee. Alternatively, the patent may be granted to a person who is entitled to have the patent assigned to him or her. Where the invention is made under a duty to invent the employer meets this description.576 It is a matter for the employer to determine whether such an invention is to be patented. An employer can require the employee to do whatever is necessary to ensure that such an invention is patented.577 If the invention is patented in the name of the employee, his or her interest in the patent is held as trustee for the employer.578 The employee is obliged to assign that interest to the employer at the request of the employer and may be ordered to do so if he or she fails to comply with such a request.579 [page 445] The termination of the employment does not release the employee from his or her duty not to exploit inventions which are covered by the duty to invent. Even after the employment has terminated the former employee remains obliged to assign any interest in a patent to the former employer at the request of the former employer. In Triplex Safety Glass Company v Scorah the employee made a discovery which arose from the performance of his duties. His employer refrained from seeking to patent the discovery. Two years later the employee ceased employment and after a further year he sought a patent for his discovery. Farwell J determined that the discovery was held on trust for the employer. Neither the termination of the employment, nor the passage of time between the discovery and the patent application, had released the employee from his obligations to his former employer.580 If the invention is made after the termination of the employment then the employer does not own the invention, even if the employee became aware of the problem, and the employer’s desire to solve it, during the course of the employment.581 An employee is accountable to the employer for the profits made from an invention the subject of the duty to invent that has been patented and exploited by the employee for his or her personal gain.582 As a trustee the employee is entitled to be indemnified for any expenses properly incurred in relation to the trust property, such as costs associated with the assignment of the patent to the employer.583

Ownership of copyright and designs 7.110 The Copyright Act grants the right to prevent the unauthorised reproduction of copyrighted work.584 Works that can be the subject of copyright include literary works (such as books and essays), and dramatic and artistic works. Under that Act an employee who is the author of a work is the owner of the copyright subject to four relevant exceptions.585 First, an employee does not own the copyright of works ‘made by the author in pursuance of the terms of his or her employment’.586 This [page 446] raises a similar issue to that discussed in 7.103–7.107.587 Second, s 35(4) establishes a special rule for journalists.588 The third exception relates to some commissioned photographs, painted or drawn portraits and engravings. A person commissioning a work owns the copyright, but the author of the work retains some limited rights to restrain misuse of the copyright.589 Finally, the Commonwealth (or a state) are the owners of the copyright of a work made by or under its direction or control.590 The Designs Act 2003 (Cth) grants the right to an owner of a design to prevent the unauthorised application of the design.591 ‘Design’ means the ‘overall appearance of the product resulting from one or more visual features’.592 Section 13(1) provides that the registered owner of a design includes the creator of the design and the employer of the creator where the design is created in ‘the course of his employment’.593 This raises a similar issue to that discussed in 7.103–7.107.

THE CONTRACTUAL, EQUITABLE AND STATUTORY DUTIES OF CONFIDENCE The unhappy mixture 7.111 The law governing the obligations of employees relating to the use of

confidential information is ‘an unhappy mixture’594 of equity, [page 447] contract and statute. The obligations governing the misuse of nonconfidential information are discussed in 7.56–7.58. All employees owe an equitable obligation governing the use and disclosure of confidential information: see 7.117. A breach of that obligation gives rise to an equitable action for breach of confidence which is enforceable in the original jurisdiction of a court of equity.595 In the late 1880s the Court of Appeal in the United Kingdom commenced declaring that fiduciary duties (including the equitable duty of confidence owed by fiduciaries) were mirrored in the contracts of superior servants through the medium of implied terms.596 There is a term, implied in law in all employment contracts, governing the use and disclosure by employees of confidential information: see 7.118. Section 183 of the Corporations Act 2001 creates a statutory duty of confidence which is largely co-extensive and concurrent with employees’ contractual and equitable duties: see 7.115. The text in 7.116–7.135 only deals with commercial secrets in an employment context and does not cover personal secrets of an employer.597 Nor does it deal with governmental secrets. Care should be taken in applying cases involving personal and governmental secrets to employment relationships as the elements of the action for breach of confidence differ marginally in those fields and the interests protected are slightly different.598 7.112 It is usually the employer, or the assignees of the employer, who takes action to enforce the duties of confidence. The principles governing the assignment of rights under employment contracts are discussed in 6.40. Some rights in property are capable of being assigned.599 Confidential information is not property.600 However, confidential [page 448]

information can be passed from one person to another and action can be taken against the person to whom it has been imparted to protect the information.601 The discussion in 7.116–7.135 concerns the duties owed by an employee to an employer about the use of confidential information. The employer may also owe duties of confidentiality to the employee. An employee may supply confidential information in support of an application for employment.602 During employment there may be further personal information, such as information about the employee’s health, that may be confidential and protected by duties of confidence. Other information may be protected by the Privacy Act 1998 (Cth) and a range of legislation regulating the employer’s collection and use of information about employees.603 An equitable duty of confidence may be owed to an employee. For example, in Prout v British Gas Plc the employer breached its obligations of confidence by using an invention that had been patented by the employee during the employment.604

The relationship between the contractual and equitable duties 7.113 The equitable and implied contractual duties concerning the use of confidential information are co-existent and co-extensive, though some dispute lingers about these propositions. [page 449] The weight of authority is in favour of the co-existence of the duties605 though the matter is not entirely beyond doubt.606 The co-existence of equitable and contractual duties grants the employer access to a broader range of remedies: see 7.45. Many cases refer to both equitable and implied contractual duties owed by the employee.607 Other cases award remedies for breaches of both the contractual and equitable duties, a course that would be impermissible if there were not co-existent obligations.608 As the duties are co-existent, it has not been necessary in many cases for judges to clearly state that their decisions are based on one duty or the other, and oftentimes it is difficult to ascertain whether the contractual or equitable obligation is being considered. The employer can rely on the equitable duty

in place of, or in addition to, the contractual duty. No election need be made between causes of action as they are not inconsistent, although it may be necessary to make an election concerning the remedies sought.609 7.114 It is suggested that the implied contractual and equitable obligations of confidence are co-extensive. Their scope and content are identical as the contractual obligation is merely a re-expression of equitable obligations as an implied term.610 Despite some legitimate criticisms of this approach, it is conceptually sound in the context of [page 450] employment relationships. The elements of both the implied contractual and equitable duties are the same. First, there must be parties in a confidential relationship and, second, confidential information must be communicated. The combination of the first and second elements creates the duty of confidentiality in both equity and contract. That duty is breached in either case by the unauthorised use or disclosure of the confidential information. As Professor Finn has stated: … [an] imposed equitable duty of confidence would never differ in extent from an implied contractual duty arising out of the same circumstances; the duty of confidence and the confidential information protected would be same whichever jurisdiction was resorted to.611

There are three glosses to the foregoing. First, a contractual action may not be available to the employer as it is inconsistent with the express terms of the contract. The presence of express terms narrowing or excluding the contractual duty would usually also have a similar effect on the equitable duty: see 7.41. Second, after the termination of employment there is probably no implied contractual duty of confidence: see 16.43. Third, it is sometimes said that courts tend to dispose of matters by reference to the contractual action when both contractual and equitable causes of action are relied on.612 This may be because equity will only, or at least prefers to only, grant a remedy when it is satisfied that there are no adequate common law remedies available.613

The statutory duty of confidence

7.115 There is a statutory duty of confidence established by s 183 of the Corporations Act614 which states: (1) A person who obtains information because they are, or have been, a director or other officer or employee of a corporation must not improperly use the information to: (a) gain an advantage for themselves or someone else; or (b) cause detriment to the corporation.615

[page 451] There are competing views on whether the ‘information’ referred to in s 183 is limited to that protected by the equitable obligation616 or is not so limited.617 There has been ‘improper’ use of that information when it is misused in the sense described in 7.129.618 The advantage gained, or the detriment suffered, appears to largely reflect the matters discussed in 7.130. The information must be obtained by the employee as an employee. An employee who receives confidential information from a third party (such as a fellow employee) in a different capacity may escape liability under s 183, though the ancillary liability provisions of s 79 of the Corporations Act may apply. For example, in Blackmagic Design Pty Ltd v Overliese employee O took the confidential information and gave it to employee Y as part of a plan to set up a rival business. Employee Y did not contravene s 183 as he did not obtain the information because he was an employee.619

Definitions and the principles briefly stated 7.116 In this text confidential information means information that attracts an equitable obligation of confidence: see 7.125–7.128. Know-how consists of the skill, experience and knowledge acquired during the course of employment: see 16.44. Trade secrets means confidential information that is not part of the employee’s know-how.620 Trade secrets and know-how are mutually exclusive categories. Once these definitions are adopted, it is possible (with some simplification) to clearly state the obligations of an employee concerning the use of confidential information. During the course of employment an employee has equitable, implied

contractual and statutory duties of confidence not to misuse confidential [page 452] information. During the employment the employee also has a contractual duty not to misuse non-confidential information. The duty concerning nonconfidential information is not an equitable or fiduciary duty, but it is probably also a statutory duty: see 7.57 and 7.58. An express term of the contract may prohibit the misuse of information (confidential or nonconfidential) during the course of or after the termination of employment, subject to the laws governing unreasonable restraints of trade discussed in 16.29 and 16.38. After the termination of employment a former employee has an equitable duty (but probably not an implied contractual or statutory duty) not to misuse trade secrets, being confidential information obtained in the course of employment that is not part of the employee’s know-how: see 16.42. After the termination of employment an employee has an equitable duty (and possibly also a contractual and statutory duty) not to use confidential information acquired or retained in breach of duty: see 16.42 and 16.48. Confidential information can be in any form. It may be communicated to the employee verbally or in writing. It can be gained by the employee watching how a machine or process works. The information can be embodied in a tangible item.621 As a matter of proof, though not as a matter of law, it will be more difficult for an employer to prove that intangible confidential information is not part of the employee’s know-how.622

The equitable duty of confidence 7.117 There is an equitable duty of confidence owed by employees concerning the use and disclosure of confidential information. The obligation arises from the circumstances in which the information was communicated or obtained and is an obligation of conscience as opposed to one formed by an agreement between the parties.623 The equitable obligation of confidence is breached when four elements are satisfied: 624

1.

The information must have been imparted in circumstances importing an obligation of confidence: see 7.122–7.123. [page 453]

2.

The information must be specific: see 7.124.

3.

The information must be confidential information: see 7.125–7.128.

4.

There must be an unauthorised use of that information: see 7.129.

Whether it is necessary to prove that the unauthorised use caused detriment to the employer is discussed in 7.130.

Implied and express contractual duties of confidence 7.118 During employment employees owe an implied contractual duty of confidence not to misuse confidential information. It is a duty of every employee, not just senior managers: see 7.122–7.123. During the course of employment the implied contractual duty of confidence concerning confidential information is co-existent and co-extensive with the equitable duty: see 7.111–7.115. After the termination of employment the implied contractual duty, if it persists at all, narrows: see 16.43. Employees may also have obligations concerning the use of non-confidential information: see 7.56–7.59. There have been various formulations of the implied term over the last 100 years. Some authorities speak of the employee’s duty to treat confidential information in a confidential manner, not abuse confidential information, not disclose confidential information, or not to use confidential information to the detriment of his or her employer.625 Each different formulation is an attempt to restate the equitable duty that has the elements identified in 7.117. The implied contractual duty of confidence is an aspect of the broader implied contractual duty of fidelity.626

Express terms governing confidentiality

7.119 Express contractual terms may also deal with the obligations of confidentiality of the parties. Courts are usually loath to conclude that the presence of an express term dealing with obligations of confidence excludes the implication of a contractual duty of confidence or the [page 454] existence of an equitable duty of confidence.627 However, if the parties have agreed that the post-employment duty of confidence will extend for a particular period it is difficult to justify the implication of a contractual term, or the continuation of an equitable obligation, to retain a confidence for a longer period.628 Bland terms requiring the employee to respect ‘confidential information’ are usually construed so as to be co-extensive with the implied term and equitable obligation.629 Often express terms concerning confidential information are construed so that they do not protect the disclosure of information that is no longer secret.630 When an express term creates the obligation of confidentiality then certain of the defences referred to in 7.131–7.135 will not apply. 7.120 The parties may expressly broaden the scope of the contractual obligation of confidence by agreeing that certain information, not otherwise covered by the duty of confidence, will be treated as confidential. This raises three issues. First, the parties may identify what information is confidential. This course is sensible given the need for specificity discussed in 7.124. However, such express declarations are not determinative; the mere agreement that information is confidential does not extend the implied contractual and equitable obligations to protect information that would not otherwise be confidential.631 Second, express contractual terms will usually be an unreasonable restraint of trade if they apply after the termination of employment and go well beyond the protection afforded by the equitable duty of confidence.632 The employer must prove that such terms are a reasonable

[page 455] restraint. Terms that seek to protect information obtained through employment, whether confidential information or not, will often be unreasonable.633 Third, there has been some debate, now resolved, about whether an express term can operate after the termination of employment to validly impose contractual obligations of confidentiality on information that is not a trade secret. The view expressed in Faccenda Chicken v Fowler634 that express terms could not add to the employee’s post-employment equitable obligations is no longer applied.635 For example, in Wright v Gasweld during employment the employee learned the identities of the only four reliable suppliers in China of particular tools. His contract stated that the information was confidential. The clause was a reasonable restraint.636 There was no implied contractual or equitable duty of confidentiality arising after the termination of employment concerning the use of the information because, though confidential, it was not a trade secret. Despite the fact the information was not protected by the equitable duty of confidence, the employer obtained an injunction to protect the confidential information by relying on the express contractual provision.637 The result may have been different if the employer was seeking to restrain the disclosure of information that was common knowledge. It is doubtful whether equity will aid an employer to achieve such a useless goal.638 [page 456]

ELEMENTS OF THE ACTION OF BREACH OF CONFIDENCE AND DEFENCES 7.121 As noted in 7.117, there are four elements that must be proved to establish the equitable cause of action of breach of confidence. The same issues arise when considering the scope, content and breach of the implied

contractual duty.

Imparted in circumstances importing an obligation 7.122 The first element in an action for breach of confidence is that the information was imparted when the parties are in a relationship of confidence.639 It is the relationship that is the source of the equitable obligation, not the contract, and so the equitable obligation may arise even when the contract is invalid.640 Parties in an employment relationship are, by the very nature of their position, in a relationship of confidence that meets that requirement.641 This does not mean that all information communicated to an employee is protected by the obligation; the information must also be confidential information: see 7.125–7.128. 7.123 It is sometimes suggested that there are degrees of confidence with senior employees owing a more demanding or ‘higher’ duty of confidence than other employees. This approach is incorrect. All employees owe the same duty of confidence: see 7.34–7.36. By the nature of their duties senior employees are more likely to come into regular contact with confidential information and so the content, but not the scope, of their obligation will be greater.642 The seniority of the employee and their role will also affect whether information they acquire is confidential. The more senior the position, and the greater the responsibility, the increased likelihood that an employee would recognise that the information was valuable and intended to be kept confidential: see 7.125. [page 457] The information must be communicated to, or acquired by, the employee in the course of or by reason of his or her employment.643 Information may be protected when it is acquired by the employee from third parties while performing his or her role.644 Information may also be the subject of the duty when the employee takes steps to acquire confidential information from the employer other than through the performance of the employee’s duties.645 In contrast, information acquired from a third party outside of the employment

relationship may not be protected, even if it is valuable to the employer.646

Identifying the specific information 7.124 The second element in an action for breach of confidence is that the confidential information must be specific: see 7.117. It must be possible to distinguish the information alleged to be confidential from other nonprotected information with specificity and not merely in global terms.647 When determining the employee’s post-termination obligations it will be relevant to ascertain if the allegedly confidential information can be distinguished from the employee’s know-how which the employee is free to use or disclose.648 Express terms that apply to ‘confidential information’ suffer from this problem of lack of specificity.649 The failure [page 458] to be able to identify specific confidential information may also prevent an injunction issuing: [It] is a cardinal rule that any injunction must be capable of being framed with sufficient precision so as to enable a person injuncted to know what it is he is to be prevented from doing.650

What is confidential information? 7.125 The third element in the action for breach of confidence is that the information must be confidential: see 7.117. Express terms of the contract may broaden the scope of the type of information that is to be treated as confidential, subject to the provisos mentioned in 7.119–7.120. In the absence of such an express term, the test for determining whether the information is protected by the implied contractual and equitable duties of confidence are set out below. Many cases contain lists of indicia that are considered in determining if the information is confidential.651 None of the lists are exhaustive. None of the indicia are determinative. The correct approach does not require a court to ‘slavishly check off the factors against the information, as if one were

counting spots on some strange creature to see if it was indeed the species of leopard illustrated in the picture book’.652 The ultimate question to be asked is: Would a person of ordinary intelligence, in all the circumstances of the case, including, inter alia, the relationship of the parties and the nature of the information and the circumstances of its communication, recognise this information to be the property of the other person and not his own to do as he likes with?653

[page 459]

Confidential information and secrecy 7.126 Many of the indicia relate to the extent to which the information is secret, is kept secret and is known to be secret. There is a point at which information is so broadly published that the confidential nature of the information is destroyed. At that point information is said to have entered the public domain. This affects two questions: whether information in the public domain is confidential and whether confidential information is unable to be protected after it enters the public domain: … if the information … is a matter of public knowledge … then it would seem clear that no amount of ‘swearing to secrecy’ can impose an obligation of confidence, or if it does, that an injunction will not go to restrain a breach of that obligation.654

Whether information has entered the public domain depends on the type of information, the domain in which it is published, the degree of publication in that domain, the form the information is published in and the attempts made to keep the information secret. The adjectives ‘secret’ and ‘public’ give the misleading impression that the information can only meet one of those descriptions. Secrecy is a relative measure, not an absolute measure. It is a question of degree.655 As Prichard J has observed: The question is whether such an element of secrecy remains that, except by improper means, a member of the public would have difficulty in acquiring the information. Thus it is a question of public accessibility, a question of degree — for the extent of the publicity and the difficulty of acquisition are both matters of degree. If, for example, the information can be obtained by a member of the public by a process of reverse engineering or analysis of the plaintiff’s product this does not mean that the information is readily available to the public. The fact that there has been publication in an evanescent form on a limited scale or in a remote or restricted area is not, in itself, sufficient to destroy the quality of confidentiality.656

[page 460] 7.127 Information may retain its confidentiality despite the fact that it can be publicly accessed through the use of time, labour and effort. It may be possible to reverse engineer or analyse a product to discover the confidential information, such as how an item is produced or how its constituent parts interact, or the chemicals contained in it. But the fact that it requires time and effort to unlock the secret enables the information to retain its confidential character: ‘what makes it confidential is the fact that the maker of the document has used his brain and thus produced a result which can only be produced by somebody who goes through the same process’.657 The publication of some of the information does not thereby remove the confidence covering other undisclosed confidential information. Measures taken to guard the secrecy of the information will also be relevant in determining whether it is confidential information.658 This includes matters such as whether the information is talked about openly; whether it was available for inspection by others; whether the employee was told the information was confidential; whether it was treated as confidential by the parties; whether the employee was asked to sign a restraint covering the use or disclosure of the information; and whether the employer is itself obliged to keep the information confidential.659 The extent and circumstances of the publication are also relevant in determining if the information has entered the public domain. Publication [page 461] of the confidential information may be so widespread that there is no confidentiality left to protect: ‘the secret, as a secret, [has] ceased to exist’.660 Publication by the employer in trade journals, the financial press, the internet and in patent applications may destroy the confidentiality of the information.661 The information does not enter the public domain only because the employer has published the information in confidence to other employees or others.662 So long as the recipients of the information are bound

by obligations of confidentiality it cannot be said that information is in the public domain. Accidental publication of the information, often referred to as adventitious publication, may see the information enter the public domain.663 There are some cases in which the courts have determined that information may remain confidential despite publication in one location or in an evanescent medium.664 This approach may need to be revisited given current instantaneous worldwide modes of communication. [page 462]

The nature of the information 7.128 Some of the indicia used to determine if information is confidential relate to the nature of the information. It is not necessary that the information be complex or novel. The parts that make up the whole may be commonplace, but the confidentiality may lie in the way simple things are combined.665 For example, each of the names on a customer list may be discovered by scouring the phone book, but the integrated list remains the product of labour that would take time and effort to reproduce.666 The fact that a reasonably accurate guess can be made about certain information (such as profit margins, product prices and supply costs) does not mean the specific information is not confidential.667 The ease or difficulty with which the information could be properly acquired or duplicated by others is relevant in determining its confidentiality. There is a difference between a product created with considerable skill taking many weeks of work and a product that is easily created with little skill.668 Information that is trivial or nonsense is not confidential. An injunction will not be issued to prevent the non-disclosure of mere trivia.669 Subject to an express term to the contrary, an employee is at liberty to communicate this class of information ‘during his or her service or afterwards to anyone he or she pleases’.670 The commercial value of the information is relevant in determining whether it is confidential information.671 Proving [page 463]

that the information is valuable is not a precondition to establishing the confidential nature of the information.672 Ideas can be confidential information.673 However, an ultimate goal or purpose, or a vague mental conception is not. An idea is more likely to be confidential information if it is novel and valuable.674 Confidential information need not be in a tangible form. Observing, memorising and then disclosing a secret process may be a breach of confidence.675 Difficulties may arise in formulating an injunction to restrain the misuse of such information.676 The extent to which there can be confidentiality in an iniquity is discussed in 7.132–7.134.

Misuse of the information 7.129 The fourth element in an action for breach of confidence is that the employee must misuse the confidential information: see 7.117. Misuse includes use for the employee’s own purposes as well as disclosure to another.677 There is some support for the view that the equitable obligation may extend to regulating the use of confidential information even when an express term only regulates the disclosure of that information.678 Misuse may be unintentional.679 After the termination of employment, drawing on the employee’s know-how is not misuse.680 There is a distinction between the employee’s use and misuse of information. Employees are given a wide variety of confidential [page 464] information by their employers that they are entitled to use. The employee may use confidential information for the purpose for which it is given, such as the performance of his or her work.681 An employee given a customer list, for example, can use it for the purpose of servicing customers for the employer, but not for the purpose of soliciting the customers to join a rival or copying the list for use after the end of the employment.682 Deliberately memorising the list for an improper purpose will also breach the

obligation.683 An injunction will not be issued unless there is some evidence of actual or threatened misuse of the information. It is insufficient merely to raise a suspicion of misuse or for the employee to be in a position where he or she is tempted to misuse the information.684 Misuse can be inferred. In Surveys & Mining Ltd v Morrison the court inferred such unauthorised use when the employee, a geologist, was told confidential geological information in midMarch and by late March he and his associates had hastily applied for a lease in the area.685 The misuse may relate to the whole or a material part of the confidential information.686 Sometimes employees possessing confidential information leave employment and promptly set up a successful competitor to the employer. Courts should be cautious in inferring a breach in such cases when it is not clear what the breach was.687 [page 465] There may be a difference between the contractual, equitable and statutory standards applicable to the misuse of information. Section 183 proscribes improper use of information. It imposes an objective standard. It is not necessary to prove that the employee acted dishonestly or with conscious impropriety in using the information.688 In equity a breach of the duty of confidence requires that ‘the confidence reposed has been abused, that unconscientious use has been made of the information’.689 It is not clear if the implied contractual duty imposes the same standard.

Detriment 7.130 It is not clear whether the need to prove detriment to the employer is an element in an action for breach of confidence. The formula of Megarry J in Coco v AN Clark (Engineers) Ltd that sets out the elements of the action states that detriment is an essential element, though the later parts of his judgment on that point were not as emphatic.690 Megarry J’s classic formula has been adopted in innumerable cases and many have proceeded on the footing that the proof of detriment is an element in the action.691

Some doubt has been cast on that approach.692 There are good reasons to distinguish the cases involving the publication of government secrets and the protection of other confidences. In the former case, the interest protected is the public interest and would only be established when it is shown that there is some harm caused by the disclosure.693 When protecting confidential information imparted during the employment, the basis of the equitable jurisdiction lies in an obligation of conscience. [page 466] The obligation is to respect the confidence, not merely to refrain from causing detriment to the employer. It is analogous to a fiduciary’s obligations that do not merely protect against detriment caused to the beneficiary.694 The significance of proving the employee’s misuse was detrimental to the employer differs according to the context in which it arises. Information is less likely to be confidential if there is no detriment or threatened detriment to the employer arising from its misuse. Commercially valueless information is less likely to be protected by an injunction.695 Detriment is irrelevant to whether there has been a breach when an express term is considered. Damages are not the gist of the action for breach of contract. If there has been a non-detrimental breach then the damages will be nominal. A nondetrimental breach may also be relevant in determining if there has been a breach justifying termination of the contract. A breach causing no detriment to the employer will be less likely to be a breach justifying termination: see 10.48.

Defences and limits to liability Disclosure permitted by law 7.131 There is no breach of a duty of confidence when the employee discloses confidential information pursuant to a requirement imposed by law. This includes giving information in accordance with a statutory obligation,696 providing information pursuant to an order for discovery, answering

interrogatories, or answering questions in court.697 In the absence of such a requirement, there is no general right of an employee to disclose confidential information to another for use in a court proceeding.698 An express contractual term may be unenforceable and [page 467] contrary to public policy if it imposes obligations of confidentiality that would obstruct the administration of justice.699 There are some statutory protections for whistleblowers who disclose confidences, but the schemes tend to be complex and provide little effective protection.700 Section 340 of the Fair Work Act also provides some protections for employees who suffer adverse action for taking certain steps that might, in some cases, include a breach of confidence.701 The operation of the ordinary principles requires some modification when dealing with public servants who, in addition to the obligations owed to the employer, have overarching obligations to the public.702

Disclosure in the public interest 7.132 Information about certain iniquitous behaviour is not confidential and is not protected by the duty of confidence. The existence and scope of this exclusion from liability or defence is uncertain in Australia.703 Further, in some circumstances the employee may disclose confidential information to third parties when it is in the public interest to do so. The extent to which any public interest exclusion or defence applies to actions concerning commercially confidential information, as opposed to the revelation of government secrets, is also uncertain. The matter is further complicated for employees who owe co-extensive contractual and equitable duties of confidence as some defences, such as that of unclean hands, are available in equity but may not be available in defence of the claim in contract which do not rely on equity’s auxiliary jurisdiction. Also, the law of the United Kingdom, that started diverging

[page 468] from Australian law on this topic in the 1970s,704 has been given some statutory impetus by the Human Rights Act 1998 (UK) that requires the public interest to be considered in matters concerning freedom of expression and the right to privacy.705 7.133 Iniquity is relevant to the protection of information in at least three ways. First, in determining whether the information is confidential; second, in determining if the term prohibiting the disclosure of the information is contrary to public policy and thereby unenforceable; and third, in determining whether equity will lend its aid in enforcing an obligation of confidence. As to the first matter, the information covered by the implied term and the equitable duty of confidence must have the necessary quality of confidentiality. Not all information meets that description. Gummow J has stated: … information will lack the necessary attribute of confidence if the subject-matter is the existence or real likelihood of the existence of an iniquity in the sense of a crime, civil wrong or serious misdeed of public importance, and the confidence is relied upon to prevent disclosure to a third party with a real and direct interest in redressing such crime, wrong or misdeed.706

The much discussed aphorism that ‘there is no confidence as to the disclosure of iniquity’707 means that no implied contractual or equitable duty of confidence arises in relation to information about iniquitous conduct.708 In Australia there is considerable authority for the view that the defence of public interest disclosure only applies to actual or [page 469] threatened breaches of the law, threats to public safety or misdeeds of a similar gravity.709 There is no recognised public interest defence in the absence of iniquity in this sense in cases concerning commercial secrets,710 despite some UK and Australian cases supporting a broader notion of iniquity or a wider operation of a public interest defence.711 7.134 The fact that the information is about iniquitous conduct does not

absolve the employee of all obligations of confidentiality concerning the information. There may be no restraint on disclosing the iniquity itself, but there may remain restraints on disclosing other information ‘which was relevant to an allegation of iniquity, though not itself disclosing that iniquity’.712 There may also be restrictions on the person to whom the information may be disclosed. There is a difference between disclosing confidential information about a crime to the media and disclosing it to the police.713 The second basis on which iniquity is relevant concerns express terms in contracts that specifically state that certain iniquitous conduct, such as the commission of fraud or crimes, shall be kept confidential by the [page 470] employee. Such express terms are unenforceable if they are contrary to public policy.714 Finally, iniquity may also be relevant in determining whether to grant an injunction. Equity may refuse to grant relief to an employer due to the equitable defence of unclean hands.715

Loss of secrecy 7.135 When information has entered the public domain, other than as the result of the employee’s wrong, the employee (or former employee) is released from his or her duty and has the same rights as any other member of the public to use the formerly confidential information. An employee who has not improperly used confidential information is not debarred from making use of that knowledge when it is no longer secret.716 Hence in O Mustad & Son v S Allcock & Co Ltd the employee disclosed confidential information acquired during his former employment to his new employer. The former employer commenced proceedings and then successfully applied for a patent, thereby publicising the information to the world. From the time the former employer applied for a patent their entitlement to an injunction to protect their confidential information ceased.717 Where the employee publishes the information in breach of his or her

obligations then there are limits on the extent to which the employee can claim the information has entered the public domain.718 An employee should not be able to profit from his or her wrong. The employee is certainly in no better position than if the publication had been by a [page 471] third party.719 Whether an injunction will issue against the employee depends in part on the extent and circumstances of the publication. On the one hand, an injunction to protect the secrecy of information in the public domain is an exercise in futility; on the other, there may still be some benefit in ensuring that the obligations of conscience that bind the employee are respected.720 Even after publication of confidential information the employee may have gained a head start on others which must be accounted for in determining when the employee may commence exploiting the trade secret.721

ACTS INCOMPATIBLE WITH THE EMPLOYMENT AND THE MUTUAL DUTY OF TRUST AND CONFIDENCE 7.136 Employees have an implied contractual duty of uncertain scope that is often said to apply to conduct that is incompatible with the employment. It has been applied to conduct as disparate as drunkenness, fighting, using obscene language and engaging in criminal activities. It is not part of the employee’s duty of fidelity. It is not equitable. It does not arise from the fiduciary relationship between employer and employee. For the reasons discussed below, it is best understood as the employee’s obligation under the implied term of mutual trust and confidence.

The historical development of the duty 7.137 The historical development of this duty can be traced to two separate streams. The first emerged in the latter part of the eighteenth century and concerned inferior servants. Menial servants were members of the master’s

house. They were engaged 24 hours a day, seven days a week.722 There was no notion of menial servants being off duty. As members of the master’s house their behaviour at any time reflected on the master, as the behaviour of a child reflects on a parent. The right of a master to dismiss a misbehaving servant for immoral conduct without the permission of the magistrates was first recognised in a 1777 case [page 472] where the maid servant was with child. The master had daughters. He discharged her and the court upheld his right to do so. It was said that to be bound to keep her would be scandalous and dangerous.723 From 1831 the common law recognised that ‘moral misconduct’ was a ground for dismissing an inferior servant.724 This covered conduct such as drunkenness and sexual misconduct, but not mere insolence.725 The second stream concerned superior servants. A master had a right to dismiss superior servants who committed an act inconsistent with the service or incompatible with the relationship.726 This duty found its expression in a case before the High Court concerning a managing director, Blyth Chemicals Ltd v Bushnell, in the following terms: Conduct which in respect of important matters is incompatible with the fulfilment of an employee’s duty, or involves an opposition, or conflict between his interest and his duty to his employer,727 or impedes the faithful performance of his obligations, or is destructive of the necessary confidence between employer and employee, is a ground of dismissal. But the conduct of the employee must itself involve the incompatibility, conflict, or impediment, or be destructive of confidence. An actual repugnance between his acts and his relationship must be found.728

[page 473] In the latter part of the twentieth century this duty was reformulated in terms that have been applied to all types of employees. The implied term of trust and confidence creates a mutual duty that the employee shall not, without reasonable and proper cause, conduct himself or herself in a manner calculated or likely to destroy or seriously damage the relationship of

confidence and trust between employer and employee.729 The duty of trust and confidence is a mutual duty.730 The employee’s duty not to conduct himself or herself in a manner calculated and likely to destroy or seriously damage the relationship is a modern re-expression of the obligation referred to in Blyth Chemicals not to perform acts incompatible with the fulfilment of an employee’s duty or that impede the faithful performance of the obligations, or is destructive of the necessary confidence between employer and employee.731

Comment on the tensions in the field 7.138 The conduct that is the subject of the duty in some cases includes the employee’s conduct outside of hours. There is a significant tension between the rights and duties of employees in this field.732 Ordinarily when an employee ceases to perform work for the day most of the employee’s obligations cease.733 Notwithstanding the employee’s apparent freedom to act as he or she pleases after hours, there can be some after-hours conduct that is so incompatible with and repugnant to the employment that it will constitute a breach of the contract. It is not that this conduct [page 474] is repugnant per se, but there is a repugnance and incompatibility with the particular employment. There are great difficulties in formulating the legal rules demarking the boundaries of the employee’s duty. Part of the difficulty arises from the historical basis of the duty because, as originally conceived, the duty applied to inferior servants who had no right to a private life. It is suggested that courts should be cautious when determining if an employer has a right to exercise any control over the private activities of an employee. Such regulation or control needs to be ‘carefully contained and fully justified’.734 7.139 The modern cases concerning out of hours conduct in this field are often inconsistent735 and reflect rapidly changing mores. Even over the last 30 years the treatment of the adulterous activities of married employees has

evolved enormously.736 There is also, it is suggested, a significant tension between the practices of employees and the professed morality of those who sit in judgment on them. About one-third of adult Australians access porn.737 Cannabis has been tried by over 35% of adults and between 7–10% of adults have used ecstasy, hallucinogens, cocaine or meth-amphetamines. There are about 2 million Australians who have used cannabis in the last 12 months, of whom 33% use it daily or at least once a week.738 About 50% of Australians use Facebook, a significant number of whom, perhaps around half according to some reports, use obscenities on their home pages. Consumption of pornography and illicit drugs and the use of profane language is a part of the life of a sizeable portion of the Australian workforce. These facts should be relevant when assessing what conduct is incompatible with employment and the assessment of the seriousness of that conduct. The consideration ordinarily provided by an employee does not include a promise to submit to the moral diktats of the employer. Fair Work Australia, and its predecessors, developed an approach towards out of [page 475] hours conduct that differs significantly from that applied by the common law. Some decisions of that tribunal suggest that employees are obliged to obey policies ‘rationally related to the business of the employer’.739 This states the rule too broadly. Employees are no longer subject to the master’s moral direction about how they conduct their private lives. A direction not to engage in sexual relations with co-workers on weekends, not to drink drive, or to behave outside of hours as upstanding citizens might all be ‘rationally related to the business of the employer’. Many cases arise out of the relationship between co-workers out of hours. When co-workers socialise together they are exposed to the full range of the behaviour that reflects humanity, both the moral and the immoral. Coworkers or the employer may find a range of the employee’s conduct to be repugnant, whether it be the employee’s religious or political beliefs, drug consumption, sexual preference, licentiousness or gambling. An employer’s or fellow employee’s repulsion towards the out of hours activities of a co-

worker is not a valid touchstone for assessing a breach, even if it affects the co-workers’ ability to work cooperatively together.

Acts inconsistent with employment and the scope 7.140 For an act to be incompatible with the employment there must be a relevant connection between the act and the employment. The issue is not simply whether the act is within the scope of the employment: see 7.5–7.11. It is tentatively suggested that for conduct to be inconsistent with the employment then two factors must be considered. The first is the nature and extent of the connection between the employment and the conduct. The second is the adverse effect on the performance of work or the business of the employer.740 Although it is a generalisation, the closer the connection between the conduct and the employment, the less significant the proved adverse effect needs to be, and vice versa.741 The connection between the employment and the conduct may be temporal as conduct that occurs during working hours is more likely to have the requisite connection. The connection may be geographical; for [page 476] example, assaulting a co-worker on the way out of the factory gate has a closer connection to the employment than assaulting the co-worker at football training after work.742 The connection is not satisfied by simply asking — but for the employment would the conduct have occurred? In some cases the relevant connection may arise when the employee is working away from home.743 In some cases the connection arises because of the link between the conduct and the nature of the employment. For example, breaches may be committed by a bank officer required to handle money who commits credit card fraud; a truck driver who is convicted of drink driving; a police officer who is found lurking in his underwear near a girls’ school; or a professor who seduces a student.744 There is some authority for the view that there are some acts that are so immoral that they might constitute a breach, even in the absence of a connection with the employment.745 It is suggested that the

better view is that a grossly immoral act will make it easier to draw the connection to harm to the employer’s business.746 As discussed in more detail in 8.19–8.21, there is no breach of the implied term of trust and confidence by the employee unless the employee’s conduct is ‘without reasonable and proper cause’. The conduct must be calculated or likely to destroy or seriously damage the relationship. The employee does not need to have intended to breach the term or to harm the employer. Whether the conduct is likely to have that effect is assessed objectively looking at the conduct as a whole. There will be no breach when the employer genuinely, but mistakenly, misinterprets the employee’s act as destructive of trust and confidence. Proof of a subjective loss of confidence in the employee is not an element of the breach. To breach the term the employee’s conduct must be so serious as to destroy or seriously damage the relationship. The bar is high. The [page 477] conduct must be so serious that it justifies the employer immediately terminating without notice.747

Sex, drugs, crime and abuse 7.141 Adultery, whether clandestine or open, is not unlawful and it is not per se misconduct, let alone serious misconduct.748 Sexually unacceptable behaviour with a person who is not a client or a co-worker will probably lack the necessary connection with the employment. However, that connection may exist when a professor has sex with a student, or the employee has sex with the employer’s wife, or the employee has engaged in sexual harassment of a co-worker.749 Whether sex with co-workers after hours has the necessary connection with employment has been the subject of a series of conflicting decisions.750 The Sex Discrimination Act 1975 (Cth) prohibits sexual harassment by co-workers ‘in connection with the employment’ and that Act alone has been held not to justify a direction to an employee not to contact a co-worker outside of working hours.751 As to the adverse effect of sexual

behaviour, care should be taken in applying earlier cases that drew tenuous connections between the adulterous activities of employees, particularly those who were married, and the efficient functioning of the business.752 Statutes that seek to regulate the sexual conduct of public sector employees must comply with the Human Rights (Sexual Conduct) Act 1994 (Cth). Section 4 of that Act provides that sexual conduct involving only consenting adults acting in private is not to be subject, by or under any law of the Commonwealth, a state or a territory, to any arbitrary interference with privacy within the meaning of Art 17 of the International [page 478] Covenant on Civil and Political Rights. That article states that: ‘No one shall be subjected to arbitrary or unlawful interference with his privacy, family, home or correspondence, nor to unlawful attacks on his honour and reputation’. Habitual and gross intoxication or drug use that directly interferes with the business of the employer, or with the ability of the employee to render due service, may be a breach of the contract.753 An employee may breach the duty when he or she commits a crime outside of the scope of the employment so as to render it unsafe for the employer to continue with the employment.754 Being arrested and charged with a crime is not misconduct whereas being convicted of the crime may carry other consequences.755 There are older cases that suggest that the use of vulgar language may be a breach but it is doubtful whether vulgar language in itself would now ever be a sufficiently serious breach to justify termination.756 The case traditionally discussed in this context is Pepper v Webb where the head gardener,757 Pepper, told Major Webb’s wife: ‘I couldn’t care less about your bloody greenhouse or your sodding garden’. The judgments of the Court of Appeal do not address whether the language used, as opposed to the sentiment they conveyed, was a breach.758 The notion that Pepper’s language was considered obscene in 1969 is quaint. The law demands ‘the standards of men and not those of angels, and remember that men are apt to show temper when reprimanded’.759 Language considered by many to be vulgar is now

commonplace. It is suggested that the better view is that whether abusive language amounts to a serious breach or repudiation depends on the ordinary [page 479] tests discussed in 7.38–7.48. Language that is sufficiently abusive, used by either party, may seriously damage or destroy the relationship of trust and confidence between the parties, may exhibit a refusal to perform the contract in the future and may be incompatible with the future performance of the contract. The terms and context of the language will be crucial. As with any repudiation, it may be retracted before being accepted and words spoken in the heat of the moment may be salved by an apology.760 _________________________ 1.

Robb v Green [1895] 2 QB 1 at 10–11; Del Casale v Artedomus (Aust) Pty Ltd (2007) 73 IPR 326; 165 IR 148; [2007] NSWCA 172 at [76] and Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66 at 81.

2.

Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 at 476; Peter Turnbull and Co Pty Ltd v Mundus Trading Co (A’asia) Pty Ltd (1954) 90 CLR 235 at 247 and 250–1 and Park v Brothers (2005) 222 ALR 421 at [42]–[43]. Qantas Airways Ltd v Transport Workers’ Union of Australia (2011) 280 ALR 503; [2011] FCA 470 at [338]–[349] adopts the same approach in a statutory context. See further at 10.63.

3.

Fewings v Tisdal (1847) 1 Ex 295; 154 ER 125; Emmens v Elderton (1853) IV HLC 624; 10 ER 606 at 613–4 per Crompton J, 617–8 per Wightman J, 618 per Erle J; Williamson v The Commonwealth (1907) 5 CLR 174 at 185; Automatic Fire Sprinklers Pty Ltd v Watson, note 2 above, at 451–3, 463–4 and 476; Lucy v The Commonwealth (1923) 33 CLR 229 at 248 and 253; Thompson v ASDA-MFI Group Plc [1988] Ch 241 at 266; [1988] 2 All ER 722 at 741. See 10.65 and 14.35.

4.

See 10.98.

5.

Rookes v Barnard [1963] 1 QB 623 at 682–3; [1962] 2 All ER 579 at 600; Latham v Singleton [1981] 2 NSWLR 843 at 861–3; (1981) 1 IR 47 at 57–8; Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots [1991] 1 VR 637 at 652–3; (1989) 95 ALR 211 at 230–1; Miles v Wakefield Metropolitan District Council [1987] AC 539 at 559; [1987] 1 All ER 1089 at 1097; K Ewing ‘The Right to Strike in Australia’ (1989) 2 AJLL 18 at 18–9; Hall v General Motors-Holden’s Ltd (1979) 45 FLR 272 at 278–9.

6.

See 8.33.

7.

Morgan v Fry [1968] 2 QB 710 at 728. See also K Foster, ‘Strikes and Employment Contracts’ (1971) 34 MLR 275; Simmons v Hoover [1977] 1 QB 284 at 293–9; R C McCallum, ‘Exploring the Common Law: Lay-Off, Suspension and the Contract of Employment’ (1989) 2 AJLL 211 at

223–5. See 9.56–9.58. 8.

See B Creighton and A Stewart, Labour Law, 5th ed, Federation Press, Sydney, 2010, pp 784–5. On service when the employer has repudiated the contract, see 10.63; on an unsafe workplace, see Hall v General Motors-Holden’s Ltd, note 5 above, at 278–9 and the definition of industrial action in the Fair Work Act 2009 (Cth) s 19.

9.

See 11.31 and J T Stratford & Son Ltd v Lindley [1964] 2 All ER 209 at 216–7.

10.

Hall v General Motors-Holden’s Ltd, note 5 above, at 278–9; R v Commonwealth Conciliation & Arbitration Commission; Ex parte BHP Co Ltd (1909) 8 CLR 419 at 438. See also Re Federated Storemen & Packers Union of Australia (1987) 22 IR 198 at 199–200; Parkinson v Grazcos Cooperative Ltd (1958) 1 FLR 90 at 96.

11.

British Telecommunications Plc v Ticehurst [1992] ICR 383 at 403.

12.

See generally S McCrystal, The Right to Strike in Australia, Federation Press, Sydney, 2010; R Owens et al, The Law of Work, 2nd ed, Oxford University Press, Melbourne, 2011, Ch 11; B Creighton and A Stewart, Labour Law, note 8 above, Chs 20–24; M Pittard and R Naughton, Australian Labour Law, 5th ed, LexisNexis Butterworths, Australia, 2010, Chs 16–17.

13.

R v Darling Island Stevedoring and Lighterage Co Ltd; Ex parte Halliday & Sullivan (1938) 60 CLR 601 at 621–2; Secretary of State for Employment v Associated Society of Locomotive Engineers and Firemen (No 2) [1972] 2 QB 455 at 507; 2 All ER 949 at 980; Associated Dominion Assurance Society Pty Ltd v Andrew (1949) 49 SR (NSW) 351 at 357; Moreton Bay College v Teys [2008] QCA 422 at [48]–[53] and 7.12–7.23.

14.

See 7.77–7.79 and 7.85–7.87.

15.

J Riley, ‘Who Owns Human Capital? A Critical Appraisal of Legal Techniques for Capturing the Value of Work’ (2005) 18 AJLL 1 at 5.

16.

R v Darling Island Stevedoring and Lighterage Co Ltd; Ex parte Halliday & Sullivan, note 13 above, at 621–2; McManus v Scott-Charlton (1996) 70 FCR 16 at 21; 140 ALR 625 at 628–9; Boardman v Phipps [1967] 2 AC 46 at 127; 3 All ER 721 at 758; Warman International Ltd v Dwyer (1995) 182 CLR 544 at 557–8; 128 ALR 201 at 209. See generally M Leeming, ‘The Scope of Fiduciary Obligations: How Contract Informs, But Does Not Determine, the Scope of Fiduciary Obligations’ (2009) 3 J Eq 181.

17.

Birtchnell v Equity Trustees, Executors and Agency Co Ltd (1929) 42 CLR 384 at 408; New Zealand Netherlands Society Oranje Inc v Kuys [1973] 1 WLR 1126 at 1130; 2 All ER 1222 at 1225–6; Beach Petroleum NL v Kennedy (1999) 48 NSWLR 1; [1999] NSWCA 408 at [188] and [194].

18.

Hivac Ltd v Park Royal Scientific Instruments Ltd [1946] Ch 169 at 174; 1 All ER 350 at 353–4.

19.

News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410 at 539; 139 ALR 193 at 312 per Lockhart, von Doussa and Sackville JJ.

20.

Beach Petroleum NL v Kennedy, note 17 above, at [188] and [194]; News Ltd v Australian Rugby Football League Ltd, note 19 above, FCR at 539; ALR at 312.

21.

Hivac Ltd v Park Royal Scientific Instruments Ltd, note 18 above, Ch at 174; All ER at 353–4.

22.

University of Western Australia v Gray (2009) 179 FCR 346; 259 ALR 224; [2009] FCAFC 116 at [157].

23.

Hivac Ltd v Park Royal Scientific Instruments Ltd, note 18 above, Ch at 174; All ER at 353–4; Victoria University of Technology v Wilson (2004) 60 IPR 392; [2004] VSC 33 at [107] and

[144]. 24.

See 7.103–7.107.

25.

Victoria University of Technology v Wilson, note 23 above, at [107]; Re Charles Selz Limited’s Application (1953) 71 RPC 158 at 165–6; Manildra Laboratories Pty Ltd v Campbell [2009] NSWSC 987 at [94]–[100] and Spencer Industries Pty Ltd v Collins (2003) 58 IPR 425; [2003] FCA 542 at [81]–[83].

26.

Manildra Laboratories Pty Ltd v Campbell, note 25 above, at [94]–[100]. See also Blyth Chemicals Ltd v Bushnell, note 1 above, at 74 and 81–2; Weldon & Co Services Pty Ltd v Harbinson [2000] NSWSC 272 at [26]–[36] (limited obligations of an accountant to promote the employer).

27.

See 7.105–7.106.

28.

Able Tours Pty Ltd v Mann (2009) 187 IR 1; [2009] WASC 192 at [103] (aff’d [2010] WASCA 59); Colour Control Centre Pty Ltd v Ty (1996) 39 AILR 5-058 and Deeson Heavy Haulage Pty Ltd v Cox (2009) 82 IPR 521; [2009] QSC 277 at [67]–[71].

29.

Blyth Chemicals Ltd v Bushnell, note 1 above, at 73–4 and 82; P Finn, Fiduciary Obligations, The Law Book Company, Sydney, 1977, p 253; A Brooks, ‘The Limits of Competition: Restraint of Trade in the Context of Employment Contracts’ (2001) 24 UNSWLJ 346 at 364–5; Digital Pulse Pty Limited v Harris (2002) 40 ACSR 487; [2002] NSWSC 33 at [21] (varied in part on appeal at (2003) 56 NSWLR 298; 197 ALR 626; [2003] NSWCA 10); Colour Control Centre Pty Ltd v Ty, note 28 above; Deeson Heavy Haulage Pty Ltd v Cox, note 28 above, at [67]–[71]. See also Boardman v Phipps, note 16 above, AC at 130; All ER at 763; New Zealand Netherlands Society Oranje Inc v Kuys, note 17 above, WLR at 1130; All ER at 1225–6 and R P Austin, ‘Fiduciary Accountability for Business Opportunities’ in P D Finn (ed), Equity and Commercial Relationships, Law Book Company, Sydney, 1987, p 147.

30.

See, for example, Woolworths Pty Ltd v Olson (2004) 184 FLR 121; 63 IPR 258; [2004] NSWSC 849 at [221] (aff’d [2004] NSWCA 372).

31.

See 7.6.

32.

See British Reinforced Concrete Engineering Company Limited v Lind (1917) 34 RPC 101 at 108–9; Victoria University of Technology v Wilson, note 23 above, at [120]–[121]; Edisonia Limited v Forse (1908) 25 RPC 546 at 551–2 and Re Harris’ Patent [1985] RPC 19 and 7.106.

33.

Bull v Nottinghamshire and City of Nottingham Fire and Rescue Authority [2007] EWCA Civ 240; [2007] ICR 1631 at 1641 per Buxton LJ. See further at 6.10.

34.

McManus v Scott-Charlton, note 16 above, FCR at 29; ALR at 637: a direction not to approach former co-workers lacked the relevant proximity to the work. There are special considerations relevant to control of the private activities of public servants. See Commissioner of Taxation v Day (2008) 236 CLR 163; 250 ALR 388 at [34].

35.

Streeter v Telstra Corporation Ltd (2008) 170 IR 1 at [15]; Woolworths Ltd v Brown (2005) 145 IR 285 at [27] (power to direct employees about matters ‘rationally related to the business of the employer’). See 7.139.

36.

Regal (Hastings) Ltd v Gulliver [1967] 2 AC 134n at 147 and 153; [1942] 1 All ER 378 at 387 and 391–2; Furs Ltd v Tomkies (1936) 54 CLR 583 at 598; Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (2001) 37 ACSR 672; [2001] NSWCA 97 at [118]; Queensland Mines Ltd v Hudson (1978) 18 ALR 1 at 4 and Victoria University of Technology v Wilson, note 23 above, at [142]. See 7.50–7.55 and 7.122–7.123.

37.

Reading v Attorney General [1951] AC 507 at 514 and 515–6; 1 All ER 617 at 619–20.

38.

Attorney-General v Goddard (1929) 98 LJKB 743 (bribe for police officer) and AWA Ltd v Koval [1992] NSWSC 176 (theft of moneys).

39.

Ormonoid Roofing and Asphalts Ltd v Bitumenoids Ltd (1930) 31 SR (NSW) 347 at 359; Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd [1967] VR 37 at 42–3 and Merryweather v Moore [1892] 2 Ch 518 at 524.

40.

Bayley v Osborne (1984) 4 FCR 141 at 145; Adami v Maison de Luxe Ltd (1924) 35 CLR 143 at 151; R v Darling Island Stevedoring and Lighterage Co Ltd; Ex parte Halliday & Sullivan, note 13 above, at 621–2; McManus v Scott-Charlton, note 16 above, FCR at 21; ALR at 628–9; Secretary of State for Employment v Associated Society of Locomotive Engineers and Firemen (No 2), note 13 above, QB at 507; All ER at 980.

41.

The role of wilfulness in the breach of the term is discussed in 10.52.

42.

Attorney-General (NSW) v The Perpetual Trustee Company (Ltd) (1952) 85 CLR 237 at 299– 300.

43.

Russell v Trustees of the Roman Catholic Church, Archdiocese of Sydney (2007) 69 NSWLR 198; 167 IR 121; [2007] NSWSC 104 at [91]–[92] (aff’d (2008) 72 NSWLR 559; 176 IR 82; [2008] NSWCA 217) and O Kahn-Freund, ‘Blackstone’s Neglected Child: the Contract of Employment’ (1977) 93 LQR 503.

44.

Australian Tramway Employees’ Association v Brisbane Tramways Co Ltd (1912) 6 CAR 35 at 42, referred to approvingly in McManus v Scott-Charlton, note 16 above, FCR at 21; ALR at 629.

45.

On the history of servile incidents see 1.23–1.24; on the unenforceability of servile incidents see 4.25; on slavery and employment contracts see 6.45.

46.

See 2.9–2.12.

47.

Russell v Trustees of the Roman Catholic Church, Archdiocese of Sydney, note 43 above, at [92] per Rothman J (aff’d (2008) 72 NSWLR 559; 176 IR 82; [2008] NSWCA 217).

48.

Purcell v Tullett Prebon (Aust) Pty Ltd [2010] NSWCA 150 at [12]–[27] and M Moir, ‘Recovery of Damages for Wrongful Repudiation’ (2011) 24 AJLL 173 at 177–9. The dicta of Kitto J to the contrary in Attorney-General (NSW) v The Perpetual Trustee Company (Ltd), note 42 above, at 299–300 should not be applied.

49.

Kelly v Alford [1988] 1 Qd R 404 at 410–1; Lister v Romford Ice and Cold Storage Co Ltd [1957] AC 555 at 570, 582, 588; 1 All ER 125 at 128–9, 136 and 140; Gregory v Ford [1951] 1 All ER 121 at 123: a rule of great antiquity that can be traced back as far as W Blackstone, Commentaries on the Laws of England, 13th ed, A Strahan, 1800, p 429.

50.

Gillies v Downer EDI Ltd [2011] NSWSC 1055 at [101].

51.

See, for example, Public Service Act 1999 (Cth) s 13(5) that requires that a public servant ‘must comply with any lawful and reasonable direction given by someone in the employee’s Agency who has authority to give the direction’.

52.

Australian Telecommunications Commission v Hart (1982) 43 ALR 165 at 170 and 172; Bayley v Osborne, note 40 above, at 145.

53.

Secretary of State for Employment v Associated Society of Locomotive Engineers and Firemen (No 2), note 13 above, QB at 491, 498 and 508; All ER at 966–7, 972, 980–1. See 8.33 on the parties’ duty of cooperation.

54.

Galipienzo v Solution 6 Holdings Ltd (1998) 28 ACSR 139 at 148–9 (direction given by president at a board meeting without dissent was not lawful as it was given without authority of the board or the managing director).

55.

Price v Sunderland Corporation [1956] 3 All ER 153 at 162–4 and Cooper v Wilson [1937] 2 KB 309 at 324.

56.

Walker v Zurich Australia Insurance Ltd (2000) 106 IR 23; [2000] QSC 345 at [47] (aff’d on other grounds [2001] QCA 296); Howard v Pilkington (Australia) Ltd [2008] VSC 491 at [89]– [91].

57.

R v Darling Island Stevedoring and Lighterage Co Ltd; Ex parte Halliday & Sullivan, note 13 above, at 621–2; Australian Telecommunications Commission v Hart, note 52 above, at 170; Thompson v IGT (Australia) Pty Ltd (2008) 173 IR 395; [2008] FCA 994 at [48]; Harrison v P & T Tube Mills Pty Ltd (2009) 181 IR 162 at [280]; [2009] FCA 220 (aff’d (2009) 188 IR 270; [2009] FCAFC 102); McManus v Scott-Charlton, note 16 above, FCR at 21; ALR at 628; Bayley v Osborne, note 40 above, at 145 and Izdes v LG Bennett & Co Pty Ltd (1995) 61 IR 439 at 449. In the United Kingdom the ‘lawful and reasonable’ formulation appears to have been applied since at least the decision of the Court of Appeal in Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 1 WLR 698 at 700; 2 All ER 285 at 286–7 where Turner v Mason (1845) 14 M & W 112; 153 ER 411 was discussed.

58.

Francis v South Sydney District Rugby League Football Club Ltd [2002] FCA 1306 at [210].

59.

G McCarry, ‘The Employee’s Duty to Obey Unreasonable Orders’ (1984) 58 ALJ 327.

60.

Spain v Arnott (1817) 2 Stark 256; 171 ER 638 (discussed in 1.30). There was no examination of the reasonableness of the order.

61.

Turner v Mason, note 57 above (menial servant sought, and was refused, leave to attend the bed of her dying mother. The servant was dismissed and was unsuccessful in her wrongful dismissal suit as she had disobeyed an order); cf R v Inhabitants of Islip (1721) Fort 305; 92 ER 863.

62.

In Rankin v Marine Power International Pty Ltd (2001) 107 IR 117; [2001] VSC 150 at [213]; Randall v Aristocrat Leisure Limited [2004] NSWSC 411 at [448] and Woolworths Pty Ltd v Olson, note 30 above, at [202] (aff’d [2004] NSWCA 372) both Turner v Mason, note 57 above and Adami v Maison de Luxe Ltd, note 40 above, are cited as authority for the proposition that directions must be ‘lawful and reasonable’.

63.

See Adami v Maison de Luxe Ltd, note 40 above.

64.

R v Inhabitants of Byker (1823) 2 B & C 114; 107 ER 325 is a rare exception (the obligation to pay overtime after 14 hours’ work in one day ‘did not impose a limit on what might reasonably be required by the master’). A master could not use immoderate force in whipping or beating a young servant: see 1.29.

65.

See 7.14.

66.

R Owens et al, The Law of Work, note 12 above, pp 257–60; C Sappideen et al, Macken’s Law of Employment, 7th ed, Lawbook Co, Sydney, 2011, p 209; B Creighton and A Stewart, Labour Law, note 8 above, p 406; A Stewart, Stewart’s Guide to Employment Law, 2nd ed, Federation Press, Sydney, 2009, pp 214–5 and W B Creighton et al, Labour Law: Text and Materials, 2nd ed, Law Book Company, Sydney, 1993 who respond to McCarry’s article at 181–5. The same approach is adopted in the UK: S Deakin and G Morris, Labour Law, 3rd ed, Butterworths, London, 2001, p 326; G Pitt, Employment Law, 5th ed, Sweet & Maxwell, London, 2004, p 107, and in Canada, I Christie et al, Employment Law in Canada, 2nd ed, Butterworths, Toronto, 2003, pp 459 and 463–4.

67.

R v Darling Island Stevedoring and Lighterage Co Ltd; Ex parte Halliday & Sullivan, note 13 above, at 621–2.

68.

McManus v Scott-Charlton, note 16 above, FCR at 30; ALR at 637.

69.

R v Darling Island Stevedoring and Lighterage Co Ltd; Ex parte Halliday & Sullivan, note 13 above, at 621–2; Turner v Mason, note 57 above and Bouzourou v Ottoman Bank [1930] AC 271 at 276.

70.

Robson v Sykes [1938] 2 All ER 612 at 614–6; Burton v Pinkerton (1867) LR 2 Ex 340; Austin Friars Steam Shipping Company v Strack [1905] 2 KB 315 and Palace Shipping Company Ltd v Caine [1907] AC 386 at 391, 393 and 396. See also McDonald v Moller Line (UK) Ltd [1953] 2 Lloyd’s Rep 662.

71.

Ottoman Bank v Chakharian [1930] AC 277 at 282–3. See also Walker v Zurich Australia Insurance Ltd, note 56 above, at [50] (aff’d on other grounds [2001] QCA 296) (employee not responsible when the family of his partner threatened to kill him unless he fled PNG and he did not breach the contract by doing so).

72.

Thompson v IGT (Australia) Pty Ltd, note 57 above, at [48]–[54]; Blackadder v Ramsay Butchering Services Proprietary Limited (2002) 118 FCR 395; 113 IR 461; [2002] FCA 603 at [67]–[69].

73.

Bliss v South East Thames Regional Health Authority [1987] ICR 700 at 714–6.

74.

See, for example, Rankin v Marine Power International Pty Ltd, note 62 above, at [244], but note at [259]–[261]. On the distinction between intermediate terms and conditions, see 10.14–10.16.

75.

Adami v Maison de Luxe Ltd, note 40 above, at 148, 151 and 156; Connor v Grundy Television Pty Ltd [2005] VSC 466 at [53]; Laws v London Chronicle (Indicator Newspapers) Ltd, note 57 above, at 286–8; Pettet v Readiskill [1999] VSC 195 at [17]; Moreton Bay College v Teys, note 13 above, at [65] (term requiring the devotion of all of the employee’s time, attention and skill to the work) and Byrnes v Treloar (1997) 77 IR 332 at 335–6.

76.

See, for example, McDonald v Parnell Laboratories Ltd (2007) 168 IR 375; [2007] FCA 1903 at [61]; Byrnes v Treloar, note 75 above, at 335–6; Rankin v Marine Power International Pty Ltd, note 62 above, at [263]. Even over 150 years ago insolence was not in itself sufficient to justify termination: Temple v Prescott (1773) Cal Mag Cas 14; Callo v Brouncker (1831) 4 Car P 518; 172 ER 807 and Edwards v Levy (1860) 2 F & F 94; 175 ER 974 (superior servant); J MacDonnell, The Law of Master and Servants, Stevens and Sons, London, 1909, p 192.

77.

Sybron Corporation v Rochem Ltd [1984] Ch 112 at 122; [1983] 2 All ER 707 at 714; [1983] ICR 801 at 811; Bank of Credit and Commerce International SA v Ali [1999] 2 All ER 1005 at [13] (concerning duty of the employer to disclose corrupt conduct); Hollingsworth v Commissioner of Police (1999) 47 NSWLR 151 at 185 and 192–3; Gill v Colonial Mutual Life Assurance Society Ltd [1912] VLR 146 at 148. See also Hands v Simpson Fawcett Ltd (1928) 44 TLR 295 (drink driving conviction and loss of licence of a commercial traveller) and Fletcher v Krell (1872) 42 LJQB 55; 28 LT 105 (governess not obliged to disclose that she was a divorcee).

78.

Manifest Shipping & Co Ltd v Uni-Polaris Insurance Co Ltd [1997] 1 Lloyd’s Rep 360 at 372 quoted in Bank of Credit and Commerce International SA v Ali, note 77 above, at [15]–[16] and Lam v Ausintel Investments Australia Pty Ltd (1989) 97 FLR 458 at 474–6. See also Stoelwinder v Southern Health [2001] FCA 115 concerning an alleged obligation to disclose to a prospective employer that particular clauses of the contract conferred valuable benefits on the employee.

79.

Bradford Third Equitable Benefit Building Society v Borders [1941] 2 All ER 205 at 211 per Viscount Maugham (‘mere silence, however morally wrong, will not support an action of

deceit’); Bell v Lever Bros Ltd [1932] AC 161 (employer unsuccessfully sought to rescind ab initio the contract for failure to disclose material facts) and Concut Pty Ltd v Worrell (2000) 176 ALR 693; 103 IR 160 at [31]–[33]. As to the application of the rules governing unilateral mistake at common law and equity where there is no duty to disclose the fact the subject of the alleged mistake, see Bank of Credit and Commerce International SA v Ali, note 77 above, at [25]. 80.

Bell v Lever Bros Ltd, note 79 above, at 227; Sybron Corporation v Rochem Ltd, note 77 above, Ch at 122; All ER at 714; ICR at 811; Bank of Credit and Commerce International SA v Ali, note 77 above, at [13] applied in Concut Pty Ltd v Worrell, note 79 above, at [36].

81.

Gill v Colonial Mutual Life Assurance Society Ltd, note 77 above, at 148.

82.

Concut Pty Ltd v Worrell, note 79 above, at [16], referring to the extract from the judgment of the Full Court of the Supreme Court of Victoria in the report of Gordon & Gotch (Australasia) Ltd v Cox (1923) 31 CLR 370 at 377 and the observations by Isaacs J at 380–1. On acts beyond the scope of employment, see 7.5–7.11.

83.

See, for example, Gill v Colonial Mutual Life Assurance Society Ltd, note 77 above (dismissal of an assistant secretary of an insurance company could not be justified by the fact that the employee, 15 years earlier, had misappropriated funds of a former employer).

84.

See Crimes Act 1914 (Cth) Pt VIIC; Discrimination Act 1991 (ACT) s 7(1)(o) and the Spent Convictions Act 2000 (ACT); Criminal Records Act 1991 (NSW) ss 12–5; Criminal Records (Spent Convictions) 1992 (NT) Pt 2 and the Anti-Discrimination Act (NT) ss 16 and 19; Criminal Law (Rehabilitation of Offenders) Act (Qld) 1986 ss 5–9; Spent Convictions Act 1988 (WA) s 18.

85.

See generally Cheltenham BC v Laird [2009] IRLR 621; [2009] EWHC 1253.

86.

In the United Kingdom the Servants Characters Act 1792 (UK) continues in force and proscribes the impersonation of a master or mistress in the giving of false, forged or counterfeited character references. See R v Costello and Bishop [1910] 1 KB 28.

87.

Foster v Charles (1830) 7 Bing 105 at 106–9; 131 ER 40. See also Wilkin v Reed (1854) 15 CB 192; 139 ER 394; W Blackstone, Commentaries on the Laws of England, note 49 above, p 432 and Driver Recruitment Pty Ltd v Wedeco AVP Pty Ltd [2008] NSWCA 290 (action for breach of contract against a recruitment agency who failed to obtain proper references for a fraudulent manager engaged by the employer).

88.

See W Rogers, Winfield and Jolowicz on Tort, 16th ed, Sweet & Maxwell, London, 2002, pp 369–81 and J Fleming, The Law of Torts, 9th ed, Law Book Company, Sydney, 1998, pp 694– 704.

89.

Commercial Banking Company of Sydney Limited v RH Brown and Company (1972) 126 CLR 337 at 343.

90.

Bank of Credit and Commerce International SA v Ali, note 77 above, at [13] per Lightman J, referred to approvingly, with one gloss, in Concut Pty Ltd v Worrell, note 79 above, at [37]; Bell v Lever Bros Ltd [1932] AC 161 at 227–8 (dicta of Lord Atkin); Healey v Societe Anonyme Francaise Rubastic [1917] 1 KB 946 at 947 (‘I cannot accept the view that the omission to confess or disclose his own misdoing was in itself a breach of the contract on the part of the plaintiff’); Sybron Corporation v Rochem Ltd, note 77 above, Ch at 122–3; All ER at 714; ICR at 811–2; Balston Ltd v Headline Filters Ltd (No 2) [1990] FSR 385 at 408; Nottingham University v Fishel [2000] ICR 1462 at 1485–6; cf the ‘duty of openness’ that arose from the unusual facts in Neary v Dean of Westminster [1999] IRLR 290 and WA Fork Truck Distributors Pty Ltd v Jones [2003] WASC 102 at [66].

91.

Bank of Credit and Commerce International SA v Ali, note 77 above, at [17]–[20] and Nottingham University v Fishel, note 90 above, at 1485–6.

92.

Bank of Credit and Commerce International SA v Ali, note 77 above, at [16] per Lightman J (‘I cannot see how questions of fraudulent concealment can arise unless the bank is held to have been under a duty to disclose. If there was a duty of disclosure, the employees’ right to relief exists irrespective of whether it was fraudulent or not. The allegation of fraud adds nothing’).

93.

Horcal Ltd v Gatland [1984] IRLR 288. See also Balston Ltd v Headline Filters Ltd (No 2), note 90 above (director did not breach fiduciary duty by not disclosing his intention to resign and establish a rival business).

94.

Item Software (UK) Ltd v Fassihi [2005] ICR 450 at 459–67; Tesco Stores Ltd v Pook [2004] IRLR 618 at [53]–[66]; Crown Dilmun v Sutton [2004] 1 BCLC 468 at [181]; British Midlands Tools Ltd v Midland International Tooling Ltd [2003] EWHC 466 at [81]–[90]; Shepherds Investments Ltd v Walters [2007] IRLR 110 at [105]–[107]; Brandeaux Advisers (UK) Limited v Chadwick [2011] IRLR 224 at [47]; contra Balston Ltd v Headline Filters Ltd (No 2), note 90 above, at 408. See C Wynn-Evans, ‘Self incrimination in English Employment Law’ 34 ILJ 178; P Watts, ‘The transition from director to competitor’ (2007) 123 LQR 21.

95.

Breen v Williams (1996) 186 CLR 71 at 83, 95, 113 and 137; 138 ALR 259 at 266, 275, 289 and 308; Friend v Brooker (2009) 239 CLR 129; 255 ALR 601 at [84]; Pilmer v Duke Group Ltd (2001) 207 CLR 165; 180 ALR 249 at [74] and [127] and 7.61.

96.

P and V Industries v Porto (2006) 14 VR 1; [2006] VSC 131 at [12]–[25] and [42]–[46]; Groeneveld Australia Pty Ltd v Wouter Nolten (No 3) (2010) 80 ACSR 562; [2010] VSC 533 at [52]; Blackmagic Design Pty Ltd v Overliese (2010) 84 IPR 505; [2010] FCA 13 at [96] and on appeal at (2011) 191 FCR 1; 276 ALR 646 at [105]–[108]; Wilden Pty Ltd v Green [2009] WASCA 38 at [106] and [212] and R Nolan, ‘A Fiduciary Duty to Disclose’ (1997) 113 LQR 220 at 224.

97.

Sybron Corporation v Rochem Ltd, note 77 above, Ch at 126–7; All ER at 717; ICR at 815; Swain v West (Butchers) Ltd [1936] 3 All ER 261 at 264; Wormald Australia Pty Ltd v Harward (1992) 42 IR 166 at 172 and 174; Turner v Carpet Call (Vic) Pty Ltd (1995) 59 IR 78 at 82–3 and Nottingham University v Fishel, note 90 above, at 1486 (doubts whether obligation exists where employee did not believe others to be in breach). See generally D Lewis, ‘Combating corruption through employment law and whistleblower protection’ (2010) 39 ILJ 52 at 68–72.

98.

See the cases in note 97 above and RBG Resources Plc v Rastogi [2002] EWHC 2782 at [40] where the misconduct, involving about $400 million, ‘went to the very survival of the company’.

99.

Sybron Corporation v Rochem Ltd, note 77 above, Ch at 126–7 and 129; All ER at 717 and 719; ICR at 815 and 818; cf the somewhat unreal approach of Laddie J in RBG Resources Plc v Rastogi, note 98 above, at [43]–[46].

100. Attorney General v Guardian Newspapers (No 2) [1990] 1 All ER 109 at 268 and RBG Resources Plc v Rastogi, note 98 above, at [36]. 101. Swain v West (Butchers) Ltd, note 97 above (general manager obliged to report to the board); Sybron Corporation v Rochem Ltd, note 77 above, Ch at 126–7 and 129; All ER at 717 and 719; ICR at 815 and 818 (European manager obliged to report about conduct of other senior managers); British Midlands Tools Ltd v Midland International Tooling Ltd, note 94 above, at [89]–[90] (executive directors obliged to report on misconduct of other executive directors) and RBG Resources Plc v Rastogi, note 98 above (‘very senior executive’). Note the different approach taken by the law governing fiduciaries in Australia referred to in 7.60–7.63.

102. Sybron Corporation v Rochem Ltd, note 77 above, Ch at 127; All ER at 718; ICR at 816. 103. See, for example, WA Fork Truck Distributors Pty Ltd v Jones, note 90 above, at [62] and [64] where the general manager, using his employer’s time to establish a competing business, had an obligation to report the wrongdoing, whereas the more junior sales staff he took with him did not. 104. Sybron Corporation v Rochem Ltd, note 77 above, Ch at 126–7 and 130; All ER at 717 and 720; ICR at 815 and 819. 105. Murray Irrigation Ltd v Balsdon (2006) 67 NSWLR 73; 159 IR 52; [2006] NSWCA 253 at [19]– [20]. See also McCasker v Darling Downs Co-operative Bacon Association Ltd (1988) 25 IR 107 at 113–14. 106. Associated Dominion Assurance Society Pty Ltd v Andrew, note 13 above, at 357; Patty v Commonwealth Bank of Australia (2000) 101 FCR 389; 179 ALR 57; 113 IR 1 at [94]–[97] and Murray Irrigation Ltd v Balsdon, note 105 above, at [19]–[20]; cf the position where employees have a constitutionally protected right to silence: B Harrison, ‘The Shadow of the Right to Silence in the Workplace’ (2002) 15 AJLL 257. 107. See the Acts at note 84. 108. See, for example, Griffiths v Rose [2011] FCA 30 at [49]–[52]; McDonald v Parnell Laboratories Ltd, note 76 above, at [57]–[63] (the lying was wilful but not serious misconduct); Coward v Gunns Veneer Proprietary Ltd [1998] FCA 696; cf Wickham v Commissioner of Police (1998) 43 AILR 11-094 (lying by a police officer about her age in a sporting contest did not justify termination) and Carter v The Dennis Family Corporation [2010] VSC 406 at [517]– [518]. 109. Patty v Commonwealth Bank of Australia, note 106 above, at [95] per Ryan J (although this arose in an unfair dismissal proceeding, the observations are applicable to a breach of contract case); Allied Express Transport Pty Ltd v Anderson (1998) 81 IR 410 at 413; Associated Dominion Assurance Society Pty Ltd v Andrew, note 13 above, at 357 (‘at a proper time and in a reasonable manner’) and Murray Irrigation Ltd v Balsdon, note 105 above, at [20]. 110. Murray Irrigation Ltd v Balsdon, note 105 above; Patty v Commonwealth Bank of Australia, note 106 above, at [94]–[98] and Associated Dominion Assurance Society Pty Ltd v Andrew, note 13 above. 111. Carter v The Dennis Family Corporation, note 108 above, at [484]–[486] and Howard v Pilkington (Australia) Ltd, note 56 above, at [139]. 112. See Murray Irrigation Ltd v Balsdon, note 105 above, at [37]–[41] and Patty v Commonwealth Bank of Australia, note 106 above; cf G McCarry, ‘The Employee’s Right to Silence’ (1983) 57 ALJ 607 at 608–9 which suggests that an employee has a right to refuse to answer any inculpatory questions. 113. Reid v Howard (1995) 184 CLR 1 at 11–2; 133 ALR 609 at 615–6 and Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328 at 340; 45 ALR 609 at 616. 114. Police Service Board v Morris (1985) 156 CLR 397 at 402–3, 408 and 411; 58 ALR 1 at 3–4, 8, 10 and Reid v Howard, note 113 above, CLR at 5 and 14; ALR at 610 and 618. 115. See generally McMahon v Gould (1982) 7 ACLR 202; Re AWB (No 1) (2008) 21 VR 252 at [30]–[32] and [47]–[58]; Edelsten v Richmond (1987) 11 NSWLR 51 at 63–4; Goreng Goreng v Jennaway (2007) 164 FCR 567; 245 ALR 602 at [19]–[27]; Baker v Commissioner of Australian Federal Police (2000) 104 FCR 359; [2000] FCA 1339 at [28]–[34]; Re Locke; Ex parte Commissioner for Railways [1968] 2 NSWR 197 and R v British Broadcasting Commission; Ex parte Lavelle [1983] 1 WLR 23; 1 All ER 241.

116. Moreton Bay College v Teys, note 13 above, at [47]. 117. Astley v Austrust Ltd (1999) 197 CLR 1; 161 ALR 155 at [47]; Lister v Romford Ice and Cold Storage Co Ltd, note 49 above, AC at 572–3, 580, 586, 594 and 598; All ER at 130, 135, 139, 143–4 and 146; Janata Bank v Ahmed [1981] ICR 791; Voli v Inglewood Shire Council (1963) 110 CLR 74 at 100 and Wylie v ANI Corporation [2002] 1 Qd R 320; 140 IR 408; [2000] QCA 314 at [11]. 118. Astley v Austrust Ltd, note 117 above, at [47]; Lister v Romford Ice and Cold Storage Co Ltd, note 49 above, AC at 572–3, 580, 586, 594 and 598; All ER at 130, 135, 139, 143–4 and 146; McGrath v Fairfield Municipal Council (1985) 156 CLR 672 at 675; 59 ALR 18 at 19; Jones v Persal & Company (a firm) [2000] QCA 386 at [57]–[61]; Kashemije Stud Pty Ltd v Hawkes [1978] 1 NSWLR 143 at 145–6 and X v The Commonwealth (1999) 200 CLR 177; (1999) 167 ALR 529 at [31]. 119. W Blackstone, Commentaries on the Laws of England, note 49 above, pp 164–5. See 1.20 for a description of the various types of servants. 120. Harmer v Cornelius (1858) 5 CB (NS) 235; 141 ER 94; Noonan v Victorian Railways Commissioners (1907) 4 CLR 1668 at 1682; Printing Industry Employees Union of Australia v Jackson & O’Sullivan Pty Ltd (1957) 1 FLR 175 at 177; Lister v Romford Ice and Cold Storage Co Ltd, note 49 above, AC at 572–3; All ER at 130 and McGarry v Boonah Clothing Pty Ltd (1988) 49 IR 66 at 73. In South Australia, see also the Civil Liability Act 1936 (SA) s 40. 121. Printing Industry Employees Union of Australia v Jackson & O’Sullivan Pty Ltd, note 120 above, at 177 and 181. 122. Harmer v Cornelius, note 120 above (‘If a gentleman … should employ a man who is known to have never done anything but sweep a crossing, to clean or mend his watch, the employer probably would be held to have incurred all risks himself’) and Printing Industry Employees Union of Australia v Jackson & O’Sullivan Pty Ltd, note 120 above, at 177–8. 123. Harvey v RG O’Dell Ltd [1958] 2 QB 78 at 105–6; 1 All ER 657 at 667 (storekeeper acting as a driver). 124. Astley v Austrust Ltd, note 117 above, at [47]–[48]. 125. For example, no negligence by the director who was a ‘country gentleman’ who could not understand the company’s accounts: In Re Denham and Co (1883) 25 Ch D 752; no negligence by the Marquis of Bute who only attended one board meeting in 40 years: In Re Cardiff Savings Bank [1892] 2 Ch 100 at 109–10. 126. See J Carter et al, Contract Law in Australia, 5th ed, LexisNexis Butterworths, Australia, 2007, pp 369–82; Geros v Mitcham Automatics Pty Ltd (1995) 64 IR 206 at 209–10 and 7.19. 127. ASIC v Adler (2002) 168 FLR 253; 41 ACSR 72; [2002] NSWSC 171 at [372]; Vines v ASIC (2007) 73 NSWLR 451; [2007] NSWCA 75 at [68]; ASIC v Rich (2009) 75 ACSR 1; [2009] NSWSC 1229 at [7185]–[7208]. See also ASIC v Healey (2011) 278 ALR 618; [2011] FCA 717 at [13]–[23] and [115]–[124] and Gillies v Downer EDI Ltd, note 50 above, at [103]–[104]. 128. Daniels v Anderson (1995) 37 NSWLR 438 at 505 (common law duty of care); Permanent Building Society v Wheeler (1994) 11 WAR 187 (both equitable and common law duty); J Heydon, ‘Are the Duties of Company Directors to Exercise Care and Skill Fiduciary?’ in S Degeling and J Edelman (eds), Equity in Commercial Law, Lawbook Co, Sydney, 2005, pp 185– 237; W Heath, ‘The Director’s ‘Fiduciary’ Duty of Care and Skill: a Misnomer’ (2007) 25 C & S LJ 370 at 370–1. 129. ASIC v Rich (2003) 44 ACSR 341; [2003] NSWSC 85 at [44]–[48]; ASIC v Rich, note 127

above, at [7185]–[7208]; Daniels v Anderson, note 128 above, at 493–504 and ASIC v Healey, note 127 above, at [115]–[124]. 130. Vines v ASIC, note 127 above, at [63], [142]–[152]. 131. Gillies v Downer EDI Ltd, note 50 above, at [98]–[102]. 132. Nelson v BHP Coal Pty Ltd [2000] QCA 505 at [9]–[10]. 133. Janata Bank v Ahmed, note 117 above, at 795–7, 803 and 809; Lister v Romford Ice and Cold Storage Co Ltd, note 49 above, AC at 573; All ER at 131. 134. Lister v Romford Ice and Cold Storage Co Ltd, note 49 above; Semtex Ltd v Gladstone [1954] 2 All ER 206 and Wesfarmers Dalgety Ltd v Williams [2005] WASC 287 at [317]. In Kelly v Alford, note 49 above, the employee was indemnified against loss arising from an unlawful act as the employer was in breach of its implied duty not to direct the employee to perform an unlawful act. See also Gregory v Ford, note 49 above. 135. See Rowell v Alexander Mackie College of Advanced Education (1988) 25 IR 87 at 98–9. For example, in Bolton Gems Pty Ltd v Gregoire (SC(NSW), Young J, 10 November 1995, unreported) the employee left an uninsured bag unattended for 10 minutes in a locked car and was ordered to pay $425,000 for its loss and in Superlux Ltd v Plaisted [1958] CLY 195 the employee was liable for the loss of 14 vacuum cleaners he left overnight in his van, secured by three locks, when he returned from work at 11:45 pm. 136. In the United Kingdom an arrangement has been reached between employers’ liability insurers that they would not pursue claims in an employer’s name against a negligent employee to recoup money paid out to indemnify the employer against a third party claim. See Morris v Ford Motor Co Ltd [1973] QB 792 at 799; 2 All ER 1084 and R Lewis, ‘Insurers’ Agreements Not to Enforce Strict Legal Rights: Bargaining with Government and in the Shadow of the Law’ (1985) 48 MLR 275. 137. Rowell v Alexander Mackie College of Advanced Education, note 135 above, at 90 per Samuels JA. See also Wylie v ANI Corporation, note 117 above, at [14]–[19]; AR Griffiths & Sons Pty Ltd v Richards [2000] 1 Qd R 116 at 123; Marrapodi v Smith-Roberts (1970) 44 ALJ 4; Commercial and General Insurance Co Ltd v Government Insurance Office of New South Wales (1973) 129 CLR 374 at 380. In McGrath v Fairfield Municipal Council, note 118 above, CLR at 675; ALR at 19 the parties agreed that Lister was authority for a contrary proposition and so the issue was not examined; cf Bolton Gems Pty Ltd v Gregoire, note 135 above. 138. Lister v Romford Ice and Cold Storage Co Ltd, note 49 above. 139. Section 66 of that Act states: ‘Where — (a) the rights of an insured under a contract of general insurance in respect of a loss are exercisable against a person who is his employee; and (b) the conduct of the employee that gave rise to the loss occurred in the course of or arose out of the employment and was not serious or willful misconduct, the insurer does not have the right to be subrogated to the rights of the insured against the employee’. 140. On the meaning of ‘serious or wilful misconduct’, see Boral Resources (Qld) Pty Ltd v Pyke [1992] 2 Qd R 25 at 31; (1989) 93 ALR 89 at 94–5. 141. Employees Liability Act 1991 (NSW) ss 3, 5–6; Law Reform (Miscellaneous Provisions) Act 1956 (NT) s 22A(1); Civil Liability Act 1936 (SA) ss 22 and 59. See McGrath v Fairfield Municipal Council, note 118 above. 142. Employees Liability Act 1991 (NSW) s 6; Law Reform (Miscellaneous Provisions) Act 1956 (NT) s 22A(3) (‘serious and wilful, or gross, misconduct’) and the Civil Liability Act 1936 (SA) s 59(3).

143. See the Civil Law (Wrongs) Act 2002 (ACT) s 216; Law Reform (Miscellaneous Provisions) Act 1956 (NT) ss 22, 22A; Civil Liability Act 1936 (SA) s 59; Employees Liability Act 1991 (NSW) ss 3–5. 144. See 7.24. 145. Printing Industry Employees Union of Australia v Jackson & O’Sullivan Pty Ltd, note 120 above, at 177 and McGarry v Boonah Clothing Pty Ltd, note 120 above, at 73. 146. Industrial Relations Bureau v Knox Auto Parts & Accessories Pty Ltd (1982) 1 IR 314 at 316; Gooley v Westpac Banking Corporation (1995) 129 ALR 628 at 645; 59 IR 262 at 278 and McCasker v Darling Downs Co-operative Bacon Association Ltd, note 105 above, at 121–3 (employee was unsatisfactory, discontented, made an undue number of personal calls, and was disinterested in the work but was not habitually neglectful to the requisite degree). 147. Harmer v Cornelius, note 120 above (similar phrases used in that case were ‘utterly unskillful and incompetent’, ‘ignorant’, ‘burthensome and useless’); Savage v British India Steam Navigation Co Ltd (1930) 46 TLR 294 at 295; Rankin v Marine Power International Pty Ltd, note 62 above, at [267] (‘it would indeed be a very grave case of negligence, causing substantial damage, to justify dismissal for a single act of negligence’); Gooley v Westpac Banking Corporation, note 146 above, ALR at 645; IR at 278; Hagen v ICI Chemicals & Polymers Ltd [2002] IRLR 31 at 39 and Carter v The Dennis Family Corporation, note 108 above, at [35]. 148. Connor v Grundy Television Pty Ltd, note 75 above, at [48]. 149. McGarry v Boonah Clothing Pty Ltd, note 120 above, at 73 per Gray J. 150. Williams v Printers Trade Services (1984) 7 IR 82 at 84–5. 151. Baster v London and County Printing Works [1899] 1 QB 901 at 903; Rankin v Marine Power International Pty Ltd, note 62 above, at [263]–[269] and [329]–[348] (‘the effect of the negligent act cannot be overlooked in determining the gravity of the negligent act’); Connor v Grundy Television Pty Ltd, note 75 above, at [43]–[50]. 152. Jupiter General Insurance v Shroff [1937] 3 All ER 67 at 73–4; Elcom v Electrical Trades Union of Australia, New South Wales Branch (1983) 5 IR 267 at 270 and Rankin v Marine Power International Pty Ltd, note 62 above, at [331]. 153. Rankin v Marine Power International Pty Ltd, note 62 above, at [267] and [329]–[340] and Adami v Maison de Luxe Ltd, note 40 above, at 153. 154. Robb v Green, note 1 above, at 10–11 and on appeal at [1895] 2 QB 315 at 318–9; Schilling v Kidd Garrett Ltd [1977] 1 NZLR 243 at 248 and 265; Del Casale v Artedomus (Aust) Pty Ltd, note 1 above, at [77] and Blyth Chemicals Ltd v Bushnell, note 1 above, at 81. 155. Wessex Dairies Ltd v Smith [1935] 2 KB 80 and 88; Hivac Ltd v Park Royal Scientific Instruments Ltd, note 18 above, Ch at 174 at 180; All ER at 357 and X v The Commonwealth, note 118 above, at [31]. 156. Helmet Integrated Systems Ltd v Tunnard [2007] FSR 437; IRLR 126 at [26] and Timber Engineering Co Pty Ltd v Anderson [1980] 2 NSWLR 488 at 493. 157. Hivac Ltd v Park Royal Scientific Instruments Ltd, note 18 above, Ch at 174; All ER at 353–4 and Manildra Laboratories Pty Ltd v Campbell, note 25 above, at [63]. 158. Hivac Ltd v Park Royal Scientific Instruments Ltd, note 18 above, Ch at 174; All ER at 353–4 and Bennett v Human Rights and Equal Opportunity Commission (2003) 134 FCR 334; 204 ALR 119; 131 IR 446 at [121]–[127].

159. See 7.5–7.11, 7.34–7.38, 7.61, 7.65, 7.69 and 7.72–7.75. 160. The contractual and equitable duty of confidence are co-extensive. University of Western Australia v Gray, note 22 above, at [161] per Lindgren, Finn and Bennett JJ (‘an employee’s duty of confidence to his or her employer can arise by way of implied contract or as a matter of equitable obligation. The scope of the duty will be the same in both cases despite their different conceptual origins’); United Sterling Corporation Ltd v Felton [1973] FSR 409 at 414–5 and P Finn, Fiduciary Obligations, note 29 above, pp 132–4. 161. United States Surgical Corp v Hospital Products International Pty Ltd [1982] 2 NSWLR 766 at 799 (aff’d (1984) 156 CLR 41). 162. Referring here to P Finn, Fiduciary Obligations, note 29 above, p 267; F Gurry, Breach of Confidence, Clarendon Press, Oxford, 1984, pp 177–9 and R Dean, The Law of Trade Secrets, Lawbook Co, Sydney, 1990, pp 181–3. 163. Concut Pty Ltd v Worrell, note 79 above, at [17] and [26] per Gleeson CJ, Gaudron and Gummow JJ. See also Blackmagic Design Pty Ltd v Overliese (2011) 191 FCR 1; 276 ALR 646 at [117]–[118]. 164. Boston Deep Sea Fishing and Ice Company v Ansell (1888) 39 Ch D 339 (managing director); Helmore v Smith (1887) 35 Ch D 449 at 451, 454 and 456 (clerk); Lamb v Evans [1893] 1 Ch 218 at 229 (canvassers engaged to solicit clients on the continent); Robb v Green [1895] 2 QB 315 at 318–9 and 320 (manager); Merryweather v Moore, note 39 above, at 522 (clerk) and Tuck & Son v Priester (1887) 19 QB 629 at 639. As Professor Finn notes, many are judgments of Lord Justice Bowen: P Finn, Fiduciary Obligations, note 29 above, pp 132–3, 267. A more detailed history is charted in R Flannigan, ‘The (fiduciary) duty of fidelity’ (2008) 124 LQR 274 at 275– 81. 165. Merryweather v Moore, note 39 above, at 522; Lamb v Evans, note 164 above, at 229; Robb v Green, note 164 above, at 318–9 and Boston Deep Sea Fishing and Ice Company v Ansell, note 164 above, at 367–8. 166. Robb v Green, note 164 above, at 320. 167. Hivac Ltd v Park Royal Scientific Instruments Ltd, note 18 above, Ch at 174; All ER at 353–4. The phrase was used in Wessex Dairies Ltd v Smith, note 155 above, in the context of an express term to ‘well and faithfully serve’. 168. See 1.44–1.46. 169. Hivac Ltd v Park Royal Scientific Instruments Ltd, note 18 above, Ch at 174; All ER at 353–4 per Lord Greene MR. See R Flannigan, ‘The (fiduciary) duty of fidelity’ (2008) 124 LQR 274 at 285. 170. Blyth Chemicals Ltd v Bushnell, note 1 above, at 81 (‘conduct which [involves] … conflict between his interest and his duty to his employer … is a ground of dismissal’) per Dixon and McTiernan JJ. 171. Bristol and West Building Society v Mothew [1998] Ch 1 at 18; [1996] 4 All ER 698 at 712–3 per Millett LJ. 172. See P Finn, ‘Contract and the Fiduciary Principle’ (1989) 12 UNSWLJ 76 at 84; R Austin et al, Company Directors: Principles of Law and Corporate Governance, LexisNexis Butterworths, Sydney, 2005, p 313. 173. P Finn, Fiduciary Obligations, note 29 above, p 266. 174. This proviso does not apply to the misuse of confidential information.

175. Chan v Zacharia (1984) 154 CLR 178 at 198–9; 53 ALR 417 at 433; Gibson Motorsport Merchandise Pty Ltd v Forbes (2006) 149 FCR 569; [2006] FCAFC 44 at [11]–[12]. 176. Concut Pty Ltd v Worrell, note 79 above, at [18]; John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1; 266 ALR 462 at [87]; Hospital Products Limited v United States Surgical Corporation (1984) 156 CLR 41 at 96–7; 55 ALR 417 at 454–5 and Pilmer v Duke Group Ltd, note 95 above, at [70]. 177. Pilmer v Duke Group Ltd, note 95 above, at [77], quoting Frankfurter J in Securities and Exchange Commission v Chenery Corporation (1943) 318 US 80 at 85–6; Re Goldcorp Exchange Ltd [1995] 1 AC 74 at 98; 2 All ER 806 at 821–2; Maguire v Makaronis (1997) 188 CLR 449 at 464; 144 ALR 729 at 737 and M Leeming, note 16 above, pp 186–8. 178. A phrase that appears to have originated in Canadian Aero Service Ltd v O’Malley (1973) 40 DLR (3d) 371 at 381–2 per Laskin J, a decision that, contrary to Australian authority, rejected the proposition that employees were status fiduciaries. See also Able Tours Pty Ltd v Mann, note 28 above, at [99]–[105] (aff’d [2010] WASCA 59); Hanneybel v Uniflex (Australia) Pty Ltd [2002] WASCA 349 at [69]; Green & Clara Pty Ltd v Bestobell Industries Pty Ltd [1982] WAR 1; Shepherds Investments Ltd v Walters [2007] IRLR 110; [2006] EWHC 836 at [73]–[81] and AMP Services Ltd v Manning [2006] FCA 256 at [59]. 179. Victoria University of Technology v Wilson, note 23 above, at [145]. 180. See the cases at note 176. 181. To support the proposition that not all employees owe fiduciary duties the court in Victoria University of Technology v Wilson, note 23 above, at [145] referred to seven Anglo-Australian cases in which fiduciary duties were held to have been owed by employees. Five of the cases did not involve ‘senior employees’: Reading v Attorney General, note 37 above (army sergeant); Timber Engineering Co Pty Ltd v Anderson, note 156 above (sales representative); Angus & Coote Pty Ltd v Render (1989) 16 IPR 387 (purchasing clerk); State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (SC(NSW) O’Keffe CJ in Eq, 14 September 1994, unreported) (site foreman for the SRA) and Francis v South Sydney District Rugby League Football Club Ltd, note 58 above (where the issue was whether the employer owed a rugby league player fiduciary duties). Dozens of cases could be added to the list of non-senior employees who have been found to owe fiduciary duties: British Reinforced Concrete Engineering Company Limited v Lind, note 32 above (a draughtsman); Triplex Safety Glass Company v Scorah [1938] 1 Ch 211 (a chemist); Re Coomber [1911] 1 Ch 723 at 728 (dicta referring to the fiduciary duties of an ‘errand boy’); discussed in Nottingham University v Fishel, note 90 above, at 1491. 182. Hivac Ltd v Park Royal Scientific Instruments Ltd, note 18 above, Ch at 174; All ER at 353–4 per Lord Greene MR. 183. Gamble v Hoffman (1997) 24 ACSR 369; Simar Transit Mixers Pty Ltd v Baryczka (1998) 28 ACSR 238; ASIC v Parkes (2001) 38 ACSR 355; [2001] NSWSC 377 at [167]–[178] and R v Cook; Ex parte DPP (Cth) (1996) 20 ACSR 618 (director transferred money to the joint account he held with his wife). 184. P Finn, Fiduciary Obligations, note 29 above, p 140; Del Casale v Artedomus (Aust) Pty Ltd, note 1 above, at [32] and [48]. 185. Hospital Products Ltd v United States Surgical Corp, note 176 above, CLR at 69 and 102; ALR at 432–3, 458; Henderson, Hallam-Eames & Hughes v Merrett Syndicates Ltd [1995] 2 AC 145 at 206; [1994] 3 All ER 506 at 542–3; Manildra Laboratories Pty Ltd v Campbell, note 25 above, at [94]–[100]; Re Coomber, note 181 above, at 728–9 and Hivac Ltd v Park Royal Scientific

Instruments Ltd, note 18 above, Ch at 174; All ER at 353–4. 186. Stoelwinder v Southern Health, note 78 above, at [41]–[47]. 187. Referring to Boardman v Phipps, note 16 above, AC at 123–5; All ER at 756–7; New Zealand Netherlands Society Oranje Inc v Kuys, note 17 above, WLR at 1130; All ER at 1225–6 and Canadian Aero Service Ltd v O’Malley, note 178 above, at 383 and 390. 188. Hospital Products Ltd v United States Surgical Corp, note 176 above, CLR at 102; ALR at 458 per Mason J. See also Green & Clara Pty Ltd v Bestobell Industries Pty Ltd, note 178 above, at 16; Deeson Heavy Haulage Pty Ltd v Cox, note 28 above, at [72]; Colour Control Centre Pty Ltd v Ty, note 28 above; WA Fork Truck Distributors Pty Ltd v Jones, note 90 above, at [56] and Nova Plastics v Froggatt [1982] IRLR 146. 189. See the cases at note 177 above. 190. P Finn, Fiduciary Obligations, note 29 above, pp 1–2, emphasis in the original. 191. Nottingham University v Fishel, note 90 above, at 1491. 192. Henderson v Merrett Syndicates Ltd, note 185 above, AC at 206; 3 All ER at 542–3; Nottingham University v Fishel, note 90 above, at 1491; Canberra Residential Developments Pty Ltd v Brendas (2010) 188 FCR 140; 273 ALR 601 at [36]. 193. John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd, note 176 above, at [87] per curium; Concut Pty Ltd v Worrell, note 79 above, at [17]; Pilmer v Duke Group Ltd (in liq), note 95 above, at [70]; Hospital Products Limited v United States Surgical Corporation, note 176 above, CLR at 96–7; Woolworths Pty Ltd v Olson, note 30 above, at [212]–[213] (aff’d [2004] NSWCA 372) and J Edelman, ‘When Do Fiduciary Duties Arise?’ (2010) 126 LQR 302. 194. Beach Petroleum NL v Abbott Tout Russell Kennedy, note 17 above, at [185]; John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd, note 176 above, at [87]; Bristol and West Building Society v Mothew, note 171 above, Ch at 18; 4 All ER at 712 and ASIC v Citigroup Global Markets Australia Pty Ltd (No 4) (2007) 160 FCR 35; 241 ALR 705; [2007] FCA 963 at [292]. 195. Helmet Integrated Systems Ltd v Tunnard, note 156 above, at [36] per Moses LJ and John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd, note 176 above, at [89]. 196. Pilmer v Duke Group Ltd, note 95 above, at [136]; News Ltd v Australian Rugby Football League Ltd, note 19 above, FCR at 541; ALR at 314; J Edelman, ‘When Do Fiduciary Duties Arise?’ (2010) 126 LQR 302 at 316. 197. Nottingham University v Fishel, note 90 above, at 1490 per Elias J. 198. Bristol and West Building Society v Mothew, note 171 above, Ch at 18; All ER at 712–3; Youyang Pty Ltd v Minter Ellison Morris Fletcher (2003) 212 CLR 484; 196 ALR 482 at [40]; Pilmer v Duke Group Ltd, note 95 above, at [71]; Lord Millett, ‘Equity’s Place in the Law of Commerce’ (1998) 114 LQR 214 at 217; Nottingham University v Fishel, note 90 above, at 1490; Gibson Motorsport Merchandise Pty Ltd v Forbes, note 175 above, at [11]–[12] and Beach Petroleum NL v Abbott Tout Russell Kennedy, note 17 above, at [201]. 199. Chan v Zacharia, note 175 above, CLR at 198–9; ALR at 433; Warman International Ltd v Dwyer, note 16 above, CLR at 557–8; ALR at 209 and Breen v Williams, note 95 above, CLR at 108; ALR at 285. 200. Nottingham University v Fishel, note 90 above, at 1490; New Zealand Netherlands Society Oranje Inc v Kuys, note 17 above, WLR at 1130; All ER at 1225–6; Noranda Australia Ltd v Lachlan Resources NL (1988) 14 NSWLR 1 at 15 and Canberra Residential Developments Pty Ltd v Brendas, note 192 above, at [36].

201. P Finn, ‘Contract and the Fiduciary Principle’ (1989) 12 UNSWLJ 76 at 83. 202. Breen v Williams, note 95 above, CLR at 108; ALR at 285 per Gaudron and McHugh JJ quoting Birtchnell v Equity Trustees, Executors and Agency Co Ltd, note 17 above, at 408 per Dixon J; the terms ‘employer’ and ‘employee’ are inserted in lieu of the terms ‘fiduciary’ and ‘beneficiary’ in the above quote. See also New Zealand Netherlands Society Oranje Inc v Kuys, note 17 above, WLR at 1130; All ER at 1225–6. 203. United States Surgical Corp v Hospital Products International Pty Ltd, note 161 above, at 799 (aff’d (1984) 156 CLR 41); Concut Pty Ltd v Worrell, note 79 above, at [26]; Attorney General v Blake [1998] Ch 439 at 455; 1 All ER 833 at 843. 204. See the cases at note 193 above. 205. Nottingham University v Fishel, note 90 above, at 1491; Woolworths Pty Ltd v Olson, note 30 above, at [212] (aff’d [2004] NSWCA 372) and Blythe v Northwood (2005) 63 NSWLR 531; [2005] NSWCA 221 at [194]. 206. New Zealand Netherlands Society Oranje Inc v Kuys, note 17 above, WLR at 1130; All ER at 1225–6; Blythe v Northwood, note 205 above, at [194]. 207. Stoelwinder v Southern Health, note 78 above, at [40] and Boulting v Association of Cinematograph, Television and Allied Technicians [1963] 2 QB 606 at 637; [1963] 1 All ER 716 at 730 (director can be union member); cf Hydrocool Pty Ltd v Hepburn (No 4) (2011) 279 ALR 646; [2011] FCA 495 at [366]–[393]. 208. A Stewart, ’Confidentiality and the Employment Relationship’ (1988) 1 AJLL 1 at 19. 209. See P Finn, Official Information, Integrity in Government Project: Interim Report 1, AGPS, 1991, at 204–6; Bennett v Human Rights and Equal Opportunity Commission, note 158 above, at [125] and Fraser v Public Service Staff Relations Board [1985] 2 SCR 455. 210. Bennett v Human Rights and Equal Opportunity Commission, note 158 above, at [130]–[154]. 211. Boston Deep Sea Fishing and Ice Company v Ansell, note 164 above, at 363 and 365. 212. Sanders v Parry [1967] 1 WLR 753 at 764; 2 All ER 803 at 806–7. 213. Gillies v Downer EDI Ltd, note 50 above, at [98]–[102]. 214. Hospital Products Ltd v United States Surgical Corp, note 176 above, CLR at 97 per Mason J; John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd, note 176 above, at [91]; Breen v Williams, note 95 above, CLR at 132–3; ALR at 304; Henderson v Merrett Syndicates Ltd, note 185 above, AC at 206; 3 All ER at 542–3 and M Leeming, note 16 above. 215. Robb v Green, note 1 above, at 10–11; on the exclusion of terms implied in law, see 5.49. 216. ASIC v Citigroup Global Markets Australia Pty Ltd (No 4), note 194 above, at [276]–[281]; Chan v Zacharia, note 175 above, CLR at 196; ALR at 431. 217. For example, Deeson Heavy Haulage Pty Ltd v Cox, note 28 above, at [87]–[88]; Henderson v Merrett Syndicates Ltd, note 185 above, AC at 206; All ER at 542–3 and Queensland Mines Ltd v Hudson, note 36 above, at 10. 218. John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd, note 176 above, at [91]–[92]. 219. John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd, note 176 above, at [91]–[92]. 220. ASIC v Citigroup Global Markets Australia Pty Ltd (No 4), note 194 above, at [281] and M Leeming, note 16 above, p 192. 221. Hivac Ltd v Park Royal Scientific Instruments Ltd, note 18 above, Ch at 174; All ER at 353–4;

Hippisley v Knee Brothers [1905] 1 KB 1 at 7 and Williamson v Hine [1891] 1 Ch 390 at 393. See also Manubens v Leon [1918] 1 KB 208 (implied term that employee entitled to retain tips). 222. See 8.13. 223. Nottingham University v Fishel, note 90 above, at 1493; Helmet Integrated Systems Ltd v Tunnard, note 156 above, at [33]; Francis v South Sydney District Rugby League Football Club Ltd, note 58 above, at [267]; Downe v Sydney West Area Health Service (No 2) (2008) 71 NSWLR 633; (2008) 174 IR 385 at [412] and Lord Millett, ‘Equity’s Place in the Law of Commerce’ (1998) 114 LQR 214 at 217; cf Neary v Dean of Westminster [1999] IRLR 288 at 290. 224. See, for example, Merryweather v Moore, note 39 above, at 522; Lamb v Evans, note 164 above, at 229; Timber Engineering Co Pty Ltd v Anderson, note 156 above, at 493 and Manildra Laboratories Pty Ltd v Campbell, note 25 above, at [63]. See also Griffiths & Beerens Pty Ltd v Duggan (2008) 66 ACSR 472; [2008] VSC 201 at [53]. 225. See 7.31. 226. Regal (Hastings) Ltd v Gulliver, note 36 above, AC at 154; All ER at 392. 227. Concut Pty Ltd v Worrell, note 79 above, at [26] referring to the classification in Blyth Chemicals Ltd v Bushnell, note 1 above, at 81. 228. In unusual cases the employment contract will be one for the benefit of a third party and the duty of fidelity may be enforceable by that party: see, for example, Dinte v Hales [2009] QSC 63 at [19]. 229. AMP Services Ltd v Manning, note 178 above, at [54]. 230. See Manildra Laboratories Pty Ltd v Campbell, note 25 above, at [69] and AMP Services Ltd v Manning, note 178 above, at [55]. 231. See 15.123. 232. See 15.115. 233. See 15.9 and Mid-Skin Cancer and Laser Centre Pty Ltd v Zahedi-Anarak (2006) 67 NSWLR 569; [2006] NSWSC 844 at [132]. 234. See R Dean, The Law of Trade Secrets and Personal Secrets, 2nd ed, Lawbook Co, Sydney, 2002, p 39 and 15.69–15.71. 235. International Scientific Communications Inc v Pattison [1979] FSR 429 at 439. See also Nottingham University v Fishel, note 90 above, at 1485. 236. Pilmer v Duke Group Ltd, note 95 above, at [78]; Hospital Products Ltd v United States Surgical Corp, note 176 above, CLR at 103; ALR at 459; Digital Pulse Pty Limited v Harris (2002) 40 ASCR 487; [2002] NSWSC 33 at [22] (appeal at (2003) 56 NSWLR 298; 197 ALR 626; [2003] NSWCA 10) and Chan v Zacharia, note 175 above, CLR at 198–9; ALR at 433. 237. See, for example, Blyth Chemicals Ltd v Bushnell, note 1 above, at 81–2. 238. ASIC v Adler (2002) 41 ACSR 72; [2002] NSWSC 171 at [735]. 239. Chan v Zacharia, note 175 above, CLR at 198; ALR at 433; cf the approach in Blackmagic Design Pty Ltd v Overliese, note 163 above, at [108]. 240. Blyth Chemicals Ltd v Bushnell, note 1 above, at 82; Boulting v Association of Cinematograph, Television and Allied Technicians, note 207 above, QB at 637–8; All ER at 730; Regal (Hastings) Ltd v Gulliver, note 36 above, AC at 135 and 154; All ER at 380 and 392 (other

members of the House of Lords dealt with the case as a breach of the no profit rule); Framlington Group plc v Anderson [1995] 1 BCLC 475 at 494–5; Pilmer v Duke Group Ltd, note 95 above, at [79] and [82]; Hospital Products Ltd v United States Surgical Corp, note 176 above, CLR at 103; ALR at 459; Chan v Zacharia, note 175 above, CLR at 199; ALR at 433 and Queensland Mines Ltd v Hudson, note 36 above, at 3–4. 241. Blyth Chemicals Ltd v Bushnell, note 1 above, at 81–2 per Dixon and McTiernan JJ; see also at 74 per Starke and Evatt JJ. 242. Blyth Chemicals Ltd v Bushnell, note 1 above, at 82 per Dixon and McTiernan JJ. 243. See 7.94 and 7.96. 244. Pearce v Foster (No 2) (1886) LR 17 QBD 536 at 541 and 542; South Australia v Marcus Clark (1996) 19 ACSR 606; Warman International Ltd v Dwyer (1992) 46 IR 250 at 259 (not affected by the appeals at [1994] QCA 12 and (1995) 182 CLR 544); Goodchild Fuel Distributors Pty Ltd v Holman (1992) 53 IR 453; BLB Corporation of Australia v Jacobsen (1974) 48 ALJR 372 at 376–7; Groeneveld Australia Pty Ltd v Wouter Nolten (No 3), note 96 above, at [17]; Woolworths Ltd v Kelly (1991) 22 NSWLR 189; Guinness plc v Saunders [1990] 2 AC 663; 1 All ER 652 and Fine Industrial Commodities Limited v Powling (1954) 71 RPC 253 at 261–2. 245. Laughton v BAPP Industrial Supplies [1986] ICR 634 at 637; Hivac Ltd v Park Royal Scientific Instruments Ltd, note 18 above, Ch at 178; All ER at 356 per Lord Greene MR. See also Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd, note 39 above, at 42 (employee using confidential information to aid a rival build a business in his spare time) and Dinte v Hales, note 228 above (employee using spare time to conduct a rival business). 246. Boardman v Phipps, note 16 above, AC at 123–4; All ER at 756–7; Chan v Zacharia, note 175 above, CLR at 198–9; and R Austin et al, Company Directors: Principles of Law and Corporate Governance, note 172 above, pp 313 and 335–6. 247. See, for example, Blyth Chemicals Ltd v Bushnell, note 1 above, at 81–2. 248. R v Byrnes (1995) 183 CLR 501 at 516; 130 ALR 529 at 540. 249. An exclusive service clause may have this effect. See 7.85–7.87 and 16.29. 250. Cementaid (NSW) Pty Ltd v Chambers (SC(NSW) Spender AJ, BC9504439, 29 March 1995, unreported) (secret employment with two employers in different fields). 251. See, for example, R v Byrnes, note 248 above, CLR at 516; ALR at 540; South Australia v Marcus Clark, note 244 above, at 630–2; Fitzsimmons v R (1997) 23 ACSR 355 at 363–4 and Duke Group Ltd (in liq) v Pilmer (1999) 31 ACSR 213 at 341–2 (the appeal to the High Court at (2001) 207 CLR 165; 180 ALR 249 did not deal with this issue). See further R Austin et al, Company Directors: Principles of Law and Corporate Governance, note 172 above, pp 335–40; P Finn, Fiduciary Obligations, note 29 above, pp 253ff. 252. P Finn, Fiduciary Obligations, note 29 above, p 253. See 7.47. 253. Blyth Chemicals Ltd v Bushnell, note 1 above, at 73–4 and 82; P Finn, Fiduciary Obligations, note 29 above, p 253 and A Brooks, ‘The Limits of Competition: Restraint of Trade in the Context of Employment Contracts’ (2001) 24 UNSWLJ 346 at 364–5. 254. See 7.76 and Shepherds Investments Ltd v Walters, note 94 above, at [118]. 255. Helmet Integrated Systems Ltd v Tunnard, note 156 above, at [45]–[47] and A Brooks, note 253 above, pp 364–5. 256. See, for example, Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd, note 36 above, at [120]; Industrial

Development Consultants Ltd v Cooley [1972] 1 WLR 443; [1972] 2 All ER 162; Regal (Hastings) Ltd v Gulliver, note 36 above, AC at 144–5, 153–154, 159; All ER at 386, 391–2 and 396, and the comments on that case in Foster Bryant Surveying Ltd v Bryant [2007] IRLR 425; [2007] EWCACiv 200 at [49]–[51]. 257. Though not expressed in these terms, this approach is consistent with that taken in Manildra Laboratories Pty Ltd v Campbell, note 25 above, at [97]–[100] (no breach when employer unable and unwilling to purchase mill bought by employee); Granosite Pty Ltd v Wieland (1982) 9 IR 218 at 248–9 (no breach when employees tendered for a job for which the employer did not wish to tender) and Rosetex Company Pty Ltd v Licata (1994) 12 ACSR 779 at 782–3 (no competition with a company that has ceased trading). 258. Hivac Ltd v Park Royal Scientific Instruments Ltd, note 18 above, Ch at 178 and 181; All ER at 356 and 357; ABK Ltd v Foxwell [2002] EWHC 9 (Ch); Nova Plastics v Froggatt, note 188 above; Schindler Lifts Australia Pty Ltd v Debelak (1989) 89 ALR 275 at 303 and 7.86. 259. P Finn, ‘The Fiduciary Principle’, in T Youdan (ed), Equity, Fiduciaries and Trusts, Carswell, Toronto, 1989 at 27; R Austin et al, Company Directors: Principles of Law and Corporate Governance, note 172 above, p 313; Warman International Ltd v Dwyer, note 16 above, CLR at 557; ALR at 208–9; R v Byrnes, note 248 above, CLR at 517; ALR at 540; Regal (Hastings) Ltd v Gulliver, note 36 above, AC at 143–5, 153–154, 158; All ER at 385–386, 391–2 and 395 (directors acquiring business opportunities from their positions); Furs Ltd v Tomkies, note 36 above, at 592 (managing director negotiating a profitable deal for his own future employment with customer); Deeson Heavy Haulage Pty Ltd v Cox, note 28 above, at [148]–[155]; Queensland Mines Ltd v Hudson, note 36 above, at 4 (director taking advantage of a licence acquired during performance of his duties); Timber Engineering Co Pty Ltd v Anderson, note 156 above, at 494 (manager and sales representative diverted the employer’s business to their own company) and CMS Dolphin Ltd v Simonet [2001] All ER (D) 294 (May); [2001] 2 BCC 600 at [84]. 260. Chan v Zacharia, note 175 above, CLR at 198–9; ALR at 433. 261. Warman International Ltd v Dwyer, note 16 above, CLR at 557; ALR at 208–9; Deeson Heavy Haulage Pty Ltd v Cox, note 28 above, at [148]–[155]; Furs Ltd v Tomkies, note 36 above, at 592–3; Chan v Zacharia, note 175 above, CLR at 199; ALR at 434 and Regal (Hastings) Ltd v Gulliver, note 36 above, where the directors acquired shares for £2500 and sold them three weeks later. They were obliged to account for the profits arising from the transaction. 262. Keith Henry & Co Pty Ltd v Stuart Walker & Co Pty Ltd (1958) 100 CLR 342 at 350 and Timber Engineering Co Pty Ltd v Anderson, note 156 above. The remedies of account of profits and constructive trusts are discussed in 15.120 and 15.136. 263. Griffiths & Beerens Pty Ltd v Duggan, note 224 above, at [53]–[54] (breach of statutory duty too) and Regal (Hastings) Ltd v Gulliver, note 36 above, AC at 139, 153–4; All ER at 382 and 391–2. 264. Corporations Act s 182(1). 265. Digital Pulse Pty Limited v Harris, note 236 above, at [30] (appeal at (2003) 56 NSWLR 298; 197 ALR 626; [2003] NSWCA 10). 266. R v Byrnes, note 248 above, CLR at 514–5; ALR at 538; Blackmagic Design Pty Ltd v Overliese, note 96 above, at [85]–[87] (considering similar terms in s 183) (aff’d (2011) 191 FCR 1; 276 ALR 646) and Chew v R (1992) 173 CLR 626 at 633; 107 ALR 171 at 174. 267. R v Byrnes, note 248 above, CLR at 514–5; ALR at 538. 268. Whitlam v Australian Securities and Investment Commission (2003) 57 NSWLR 559; 199 ALR

674; [2003] NSWCA 183 at [148]–[150] (director does not breach section when he is acting in his capacity as a proxy holder, not qua director). 269. R v Byrnes, note 248 above, CLR at 515; ALR at 538 per Brennan, Deane, Toohey and Gaudron JJ; Chew v R, note 266 above, CLR at 640 and 647; ALR at 179–80 and 185; Doyle v ASIC (2005) 223 ALR 218 at [35]. 270. R v Byrnes, note 248 above, CLR at 514–5; ALR at 538; Residues Treatment and Trading Co Ltd v Southern Resources Ltd (1989) 52 SASR 54; Southern Resources Ltd v Residues Treatment and Trading Co Ltd (1990) 56 SASR 455 and Simar Transit Mixers Pty Ltd v Baryczka, note 183 above. 271. Gamble v Hoffman, note 183 above (reducing the liability under a guarantee); Simar Transit Mixers Pty Ltd v Baryczka, note 183 above (payment to reduce mortgage); ASIC v Parkes, note 183 above, at [167]–[178] (payment of maintenance to estranged partner by a chief executive) and R v Cook; Ex parte DPP (Cth), note 183 above (director transferred money to the joint account he held with his wife). 272. Minilabs Pty Ltd v Assaycorp Pty Ltd (2001) 37 ACSR 509 and ASIC v Parkes, note 183 above, at [112]–[135]. 273. Griffiths & Beerens Pty Ltd v Duggan, note 224 above, at [54]. 274. Griffiths & Beerens Pty Ltd v Duggan, note 224 above, at [34]–[37] and [54] (sending valuable designs of the employer’s products to a supplier that were later used to make products for a rival). 275. Jarrad v Silver Top Taxi Service (1980) 43 FLR 1 at 6; Reading v Attorney General, note 37 above, AC at 515; All ER at 619–20 and City of London Corporation v Appleyard [1963] 1 WLR 982 at 988; 2 All ER 834 at 839. 276. Asset Risk Management v Hyndes [1999] NSWCA 201 and the cases referred to at 7.54. 277. Reading v Attorney General, note 37 above, AC at 516–517. 278. Boston Deep Sea Fishing and Ice Co v Ansell, note 164 above, at 367–8; Jarrad v Silver Top Taxi Service, note 275 above, at 6 (contractual); Reading v Attorney General, note 37 above, AC at 515 (contractual and fiduciary) and 517 (fiduciary), and 518 (contract) and City of London Corporation v Appleyard, note 275 above, WLR at 988; All ER at 839 (contractual). 279. See 15.133. 280. These were the facts in Asset Risk Management Ltd v Hyndes, note 276 above discussed further in 15.133. See also Peninsular and Oriental Steam Navigation Co v Johnson (1938) 60 CLR 189 at 218. 281. See Cohen v Cohen (1929) 42 CLR 91 at 101; Henry v Hammond [1913] 2 KB 515 at 521; P Finn, Fiduciary Obligations, note 29 above, pp 103–5; Palette Shoes Pty Ltd v Krohn (1937) 58 CLR 1 at 30 and Walker v Corboy (1990) 19 NSWLR 382 at 388–90 and 396–7. 282. Blenkarn v Hodges’ Distillery Company (1867) 16 LT 608. 283. Reading v Attorney General, note 37 above, AC at 514–5, 517–8; All ER at 619 and 621; Shallcross v Oldham (1862) 2 J & H 609; 70 ER 1202; BC Timber Industry Journal v Black [1934] 3 DLR 31; Soar v Ashwell [1893] QB 390 at 397 and AWA Ltd v Koval, note 38 above, at 23. On the remedy of account of profits see 15.120 and on the remedy of account see 15.133. 284. AWA Ltd v Koval, note 38 above. 285. As to the obligations of an employee to respect the rights of the employer to the property and not

contest the title of the employer to that property, see G Dal Pont, Law of Agency, LexisNexis Butterworths, Sydney, 2001, at [13.28]–[13.30]. 286. Reading v Attorney General, note 37 above, AC at 514–5, 517–518; All ER at 619 and 621. 287. Reading v Attorney General, note 37 above, AC at 517 per Lord Oaksey; see also at 515–6 per Lord Porter and 516 per Lord Normand; All ER at 620–1; Byrne v Hoare [1965] Qd R 135 at 141–2 and 148–9 and Attorney-General v Goddard, note 38 above, at 746. 288. Byrne v Hoare, note 287 above, at 142 and 148–9. 289. Byrne v Hoare, note 287 above, at 149; see also at 142 per Stable J. 290. M’Dowall v Ulster Bank (1899) 33 Ir LT Jo 223; South Staffordshire Water Company v Sharman [1896] 2 QB 44; Willey v Synan (1937) 57 CLR 200 at 217–20 and London Corporation v Appleyard, note 275 above, WLR at 988–9; All ER at 839. 291. Prudential Assurance Co Limited v Rodrigues [1982] 2 NZLR 54. 292. Bronester Limited v Priddle [1961] 1 WLR 1294 at 1300 and 1304 and Rivoli Hats Ltd v Gouch [1953] 2 All ER 823 at 825. See also DMK Real Estate Limited v Lillebridge (1992) 108 FLR 64 at 67 and 85 and G Dal Pont, Law of Agency, note 285 above, at [15.89]–[15.92]. 293. Clayton Newbury Limited v Findlay [1953] 2 All ER 826 and Valley Office Equipment v Douglas (1961) 38 WWR 556. 294. Del Casale v Artedomus (Aust) Pty Ltd, note 1 above, at [32] and [76]–[77] and Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd, note 39 above, at 40. See also 7.56–7.59. 295. See 7.117 and 7.125–7.128. 296. See P Finn, Fiduciary Obligations, note 29 above, Ch 19 and Schering Chemicals Ltd v Falkman Ltd [1982] QB 1. 297. See F Gurry, Breach of Confidence, note 162 above, p 159 and S Worthington, ‘Fiduciary Obligations: When is Self-Denial Obligatory?’ (1999) LQR 500 at 502. 298. Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) (1984) 156 CLR 414 at 438; 56 ALR 193 at 208. 299. Nottingham University v Fishel, note 90 above, at 1489. 300. NP Generations Pty Ltd v Feneley (2001) 80 SASR 151; [2001] SASC 185 at [18]–[20]; Angus & Coote Pty Ltd v Render, note 181 above, at 396; Torrington Manufacturing Co v Smith & Sons (England) Ltd [1966] RPC 285 at 301; Interfirm Comparison (Aust) Pty Ltd v Law Society of New South Wales [1975] 2 NSWLR 104 at 117; Fortuity Pty Ltd v Barcza (1995) 32 IPR 517 at 528–9; Coulthard v State of South Australia (1995) 63 SASR 531 at 548–50; F Gurry, Breach of Confidence, note 162 above, pp 113–5; Ormonoid Roofing and Asphalts Ltd v Bitumenoids Ltd, note 39 above, at 359–60; Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd, note 39 above, at 43; Prebble v Reeves [1910] VLR 88 at 108–9; Lac Minerals Ltd v International Corona Resources Ltd (1989) 16 IPR 27 at 36–7. Note the reservations on the use of this test stated in Smith Kline & French Laboratories (Aust) Ltd v Secretary, Department of Community Services (1990) 28 FCR 291 at 302–4; 99 ALR 679 at 690–2. 301. NP Generations Pty Ltd v Feneley, note 300 above, at [18]–[25]; Robb v Green, note 164 above; Wessex Dairies Ltd v Smith, note 155 above; Mid-Skin Cancer and Laser Centre Pty Ltd v Zahedi-Anarak, note 233 above, at [148]–[154]; Griffiths & Beerens Pty Ltd v Duggan, note 224 above, at [164]; Peninsular Real Estate Ltd v Harris [1992] 2 NZLR 216 at 220; Forkserve Pty Ltd v Jack (2001) 19 ACLC 299; [2000] NSWSC 1064 at [78] and Helmore v Smith, note 164

above, at 451, 454 and 456. 302. See 16.48. 303. On the meaning of know-how, see 16.44–16.47. 304. See 7.91–7.93; Independent Management Resources Pty Ltd v Brown [1987] VR 605 at 613; Cranleigh Precision Engineering Ltd v Bryant [1965] 1 WLR 1293 at 1319–20; [1964] 3 All ER 289 at 302; Industrial Development Consultants Ltd v Cooley, note 256 above, and Sanders v Parry, note 212 above, WLR at 764; All ER at 807. 305. Attorney-General v Goddard, note 38 above, at 745 and Surveys & Mining Ltd v Morrison [1969] Qd R 470. 306. Griffiths & Beerens Pty Ltd v Duggan, note 224 above, at [54]; Regal (Hastings) Ltd v Gulliver, note 36 above, AC at 139, 153–4; All ER at 382 and 391–2 and P Finn, Fiduciary Obligations, note 29 above, p 246. 307. Regal (Hastings) Ltd v Gulliver, note 36 above, AC at 139, 153 and 154; All ER at 382 and 391– 2. 308. ABK Ltd v Foxwell, note 258 above. See also Triangle Corp Pty Ltd v Carnsew (1994) 29 IPR 69 at 70. 309. See, for example, Helmet Integrated Systems Ltd v Tunnard, note 156 above, at [44]–[45]. 310. See 7.20–7.23. 311. See Cranleigh Precision Engineering Ltd v Bryant, note 304 above, WLR at 1319–20; All ER at 302; Industrial Development Consultants Ltd v Cooley, note 256 above; Sanders v Parry, note 212 above, WLR at 764; All ER at 807; Helmet Integrated Systems Ltd v Tunnard, note 156 above, at [44]–[48] and CMS Dolphin Ltd v Simonet, note 259 above, at [90]. 312. Cranleigh Precision Engineering Ltd v Bryant, note 304 above, WLR at 1319–20; All ER at 302. 313. Sanders v Parry, note 212 above. 314. P and V Industries v Porto, note 96 above, at [12]–[25], [42]–[46] and Blackmagic Design Pty Ltd v Overliese, note 96 above, at [97] and on appeal at (2011) 191 FCR 1; 276 ALR 646 at [105]–[108]. 315. See the cases at note 95 above. 316. Pilmer v Duke Group Ltd, note 95 above, at [74]. Contrast the approach in the United Kingdom in the cases referred to in note 94 above. 317. See 7.20. 318. P and V Industries v Porto, note 96 above, at [12]–[25] and [42]–[46]. 319. See 7.18. 320. See the discussion of informed consent in 7.69–7.71 and Concut Pty Ltd v Worrell, note 79 above, at [37]. 321. Helmet Integrated Systems Ltd v Tunnard, note 156 above, at [39]. See also Manildra Laboratories Pty Ltd v Campbell, note 25 above, at [94]–[100] and Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359 at 378. 322. P Finn, Fiduciary Obligations, note 29 above, p 266. Compare with J Lehane, ‘Delegation of Trustees Powers and Current Developments in Investment Funds Management’ (1995) 7 Bond LR 36 at 37 and G Thomas, ‘The duty of trustees to act in the “best interests” of their

beneficiaries’ (2008) 2 J Eq 177. 323. Digital Pulse Pty Limited v Harris, note 236 above, at [20] and AIM Maintenance Ltd v Brunt (2004) 28 WAR 357; 60 IPR 572; [2004] WASC 49 at [63]. 324. P Finn, Fiduciary Obligations, note 29 above, p 266. 325. Balston Ltd v Headline Filters Ltd (No 2), note 90 above, at 408 and 7.89. 326. Electrolux Limited v Hudson [1977] FSR 312 at 326–31. See also Secretary of State for Employment v Associated Society of Locomotive Engineers and Firemen (No 2), note 13 above, QB at 491–2 and 507; All ER at 966–7 and 980; R Flannigan, ‘The (fiduciary) duty of fidelity’ (2008) 124 LQR 274 at 293–4 and Manildra Laboratories Pty Ltd v Campbell, note 25 above, at [94]–[100]. 327. P Finn, Fiduciary Obligations, note 29 above, p 266. 328. R v Byrnes, note 248 above, CLR at 514–5; ALR at 538 and Griffiths & Beerens Pty Ltd v Duggan, note 224 above, at [54]. 329. Warman International Ltd v Dwyer, note 16 above, CLR at 558; ALR at 209 and Consul Development Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373 at 394; 5 ALR 231 at 249. 330. See the cases at 7.99 concerning secret payments. Regal (Hastings) Ltd v Gulliver, note 36 above, AC at 144–5, 153, 154, 159; All ER at 386, 391–2 and 396 and Griffiths & Beerens Pty Ltd v Duggan, note 224 above, at [54]. 331. Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd, note 36 above, at [120]; Regal (Hastings) Ltd v Gulliver, note 36 above, AC at 139, 153–4; All ER at 382 and 391–2 and Foster Bryant Surveying Ltd v Bryant, note 256 above, at [88]. 332. See 7.99. 333. See 7.130. 334. See, for example, Natural Extracts Pty Ltd v Stotter (1997) 24 ACSR 110 at 141–2. 335. Regal (Hastings) Ltd v Gulliver, note 36 above, AC at 144–5, 153–4, 159; All ER at 386, 391–2 and 396. 336. To the extent that the decision in Industrial Development Consultants Ltd v Cooley, note 256 above suggests that the employee had a fiduciary duty to inform the employer of the information, it is contrary to the cases discussed at 7.61–7.63. See also CMS Dolphin Ltd v Simonet, note 259 above, at [90]. 337. Industrial Development Consultants Ltd v Cooley, note 256 above. 338. For example, Wessex Dairies Ltd v Smith, note 155 above, at 84 per Greer LJ. 339. Manildra Laboratories Pty Ltd v Campbell, note 25 above, at [129]; Sanders v Parry, note 212 above, WLR at 764; All ER at 807 and Schilling v Kidd Garrett Ltd, note 154 above, at 248–51, 267–9: see 14.15. 340. On injunctions to restrain the use of non-confidential information, see Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2), note 298 above, CLR at 438; ALR at 208 and National Roads and Motorists’ Association Ltd (NRMA) v Geeson (2001) 39 ACSR 401; [2001] NSWSC 832 at [29]– [34]. 341. See 7.86. 342. Thomas Marshall (Exports) Ltd v Guinle [1979] Ch 227 at 243; [1978] 3 All ER 193 at 205.

Robb v Green, note 1 above, at 14 and Schilling v Kidd Garrett Ltd, note 154 above, at 248 and 343. 265. 344. Wessex Dairies Ltd v Smith, note 155 above, at 84. See also Deeson Heavy Haulage Pty Ltd v Cox, note 28 above, at [106]–[127]. 345. ABK Ltd v Foxwell, note 258 above. 346. Foster Bryant Surveying Ltd v Bryant, note 256 above (no breach of fiduciary duty where director, who had been excluded from any role in company after his resignation, set up his own company during the notice period). 347. See 16.42. 348. Helmet Integrated Systems Ltd v Tunnard, note 156 above, at [27] and [48]–[49] and Framlington Group plc v Anderson, note 240 above, at 497–8: see 7.88. 349. In the context of determining unfair dismissal applications, see Harris and Russell Ltd v Slingsby [1973] ICR 454 at 457 and Laughton v BAPP Industrial Supplies, note 245 above, at 637. See also Framlington Group plc v Anderson, note 240 above, at 497–8 and 7.90. 350. Attorney General v Blake, note 203 above, Ch at 453–5; All ER at 841–3; Futuretronics.com.au Pty Ltd v Graphix La-Bels Pty Ltd (2009) 81 IPR 1; [2009] FCAFC 2 at [46] and Bolkia (Prince Jefri) v KPMG [1999] 2 AC 222 at 235; 1 All ER 517 at 527. There are some exceptions to this proposition: see M Leeming, note 16 above, pp 189–91. 351. Triplex Safety Glass Company v Scorah, note 181 above, at 218. See 7.108–7.109. 352. Coordinated Industries Pty Ltd v Elliott (1998) 43 NSWLR 282 at 288–9. 353. See 7.91–7.93 and Industrial Development Consultants Ltd v Cooley, note 256 above. 354. Note that s 191 of the Corporations Act imposes obligations on a director concerning the notification to other directors of some certain material personal interests. See Fitzsimmons v R, note 251 above, at 358 and Permanent Building Society (in liq) v Wheeler (1994) 14 ASCR 109 at 160; (1994) 11 WAR 187 at 241. 355. P and V Industries v Porto, note 96 above, at [24]; National Mutual Property Services (Australia) Pty Ltd v Citibank Savings Ltd [1998] FCA 564 at 23; ASIC v Citigroup Global Markets Australia Pty Ltd (No 4), note 194 above, at [293]–[296]; Maguire v Makaronis, note 177 above, CLR at 466–7; ALR at 739–40; Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; 236 ALR 209 at [106]–[109]; Commonwealth Bank of Australia v Smith (1991) 102 ALR 453 at 477–8; Blackmagic Design Pty Ltd v Overliese (2011), note 163 above, at [105]–[108] and M Harding, ‘Two Fiduciary Fallacies’ (2007) 2 J Eq 1 at 7. See also Concut Pty Ltd v Worrell, note 79 above, at [37]. 356. Queensland Mines Ltd v Hudson, note 36 above, at 10 and Regal (Hastings) Ltd v Gulliver, note 36 above, AC at 150, 153, 157; All ER at 389, 391–2 and 394. 357. Bendigo Central Freezing and Fertiliser Company Limited v Cunningham [1919] VLR 387 at 397–8; Turner v Garden (1869) 38 LJ 331; Hippisley v Knee Brothers, note 221 above, at 7 and Furs Ltd v Tomkies, note 36 above, at 590 and 592. See also Peninsular and Oriental Steam Navigation Co v Johnson, note 280 above, at 215. 358. Granosite Pty Ltd v Wieland, note 257 above, at 247–9; International Scientific Communications Inc v Pattison, note 235 above, at 439–40 (employer consented to competition during notice period) and Blackmagic Design Pty Ltd v Overliese, note 163 above, at [110]. 359. Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd, note 36 above, at [122]–[136] and Regal (Hastings)

Ltd v Gulliver, note 36 above, AC at 150, 153, 157; All ER at 389, 391–2 and 394. 360. BLB Corporation of Australia v Jacobsen, note 244 above; Woolworths Ltd v Kelly, note 244 above; Guinness plc v Saunders, note 244 above and Fine Industrial Commodities Limited v Powling, note 244 above, at 261–2. 361. Queensland Mines Ltd v Hudson, note 36 above, at 10. See also Peso Silver Mines v Cropper (1966) 58 DLR (2d) 1. 362. See 7.5–7.11; P Finn, Fiduciary Obligations, note 29 above, pp 236–8. A gardener with a keen eye for art can negotiate to purchase a neglected Rembrandt hanging in the master’s house without revealing the painter’s identity whereas the master’s curator would need informed consent: Alsion v Clayhills (1907) 97 LT 709 at 712. 363. International Scientific Communications Inc v Pattison, note 235 above, at 434 (implied term prevented competition with the employer although consent was granted for other employment). 364. ASIC v Citigroup Global Markets Australia Pty Ltd (No 4), note 194 above, at [293]–[296]; BLB Corporation of Australia v Jacobsen, note 244 above, at 376–7; Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd, note 36 above, at [124] (whether all relevant facts are disclosed is assessed against an objective standard); Queensland Mines Ltd v Hudson, note 36 above, at 4; Victoria University of Technology v Wilson, note 23 above, at [143] and New Zealand Netherlands Society Oranje Inc v Kuys, note 17 above, WLR at 1131–2; All ER at 1227. 365. Maguire v Makaronis, note 177 above, CLR at 466–7; ALR at 739–40; Farah Constructions Pty Ltd v Say-Dee Pty Ltd, note 355 above, at [107] and Blackmagic Design Pty Ltd v Overliese, note 163 above, at [110]. Note Granosite Pty Ltd v Wieland, note 257 above, at 248–9 where fact of non-disclosure of previous breach was held not to invalidate the later consent to compete with the employer. 366. Gray v New Augarita Porcupine Mines Pty Ltd [1952] 3 DLR 1 at 14 per Lord Radcliffe and P Finn, Fiduciary Obligations, note 29 above, p 227. 367. BLB Corporation of Australia v Jacobsen, note 244 above, at 378 per McTiernan, Mason and Jacobs JJ. See also Fraser v NRMA (1995) 127 ALR 543 at 554 and Furs Ltd v Tomkies, note 36 above. 368. Woolworths Ltd v Kelly, note 244 above, at 212 per Samuels JA. 369. BLB Corporation of Australia v Jacobsen, note 244 above, at 376–7 per McTiernan, Mason and Jacobs JJ. See also Woolworths Ltd v Kelly, note 244 above, at 212–3. 370. Woolworths Ltd v Kelly, note 244 above, at 212 and 234. 371. See, for example, Granosite Pty Ltd v Wieland, note 257 above, at 248–9. 372. Queensland Mines Ltd v Hudson, note 36 above, at 10. 373. Grant v The Gold Exploration and Development Syndicate Limited [1900] 1 QB 233. 374. Neary v Dean of Westminster, note 223 above, at [73] and P Finn, Fiduciary Obligations, note 29 above, pp 219–20. 375. Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd, note 36 above, at [120]–[136]; Commonwealth Bank of Australia v Smith, note 355 above, at 478–9 and Brickenden v London Loan & Savings Co [1934] 3 DLR 465 at 469 per Lord Thankerton (‘[when] a party, holding a fiduciary relationship, commits a breach of his duty by non-disclosure of material facts … he cannot be heard to maintain that disclosure would not have altered the decision to proceed with the transaction’); see 7.65–7.66.

376. See 6.21 and 6.24. 377. John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd, note 176 above, at [91]; Hospital Products Ltd v United States Surgical Corp, note 176 above, CLR at 97; ALR at 454 and Breen v Williams, note 95 above, CLR at 132–3; ALR at 304. See 7.40–7.41. 378. See 7.22. 379. See 7.20–7.21. 380. See 10.52. 381. Warman International Ltd v Dwyer, note 16 above, CLR at 557; ALR at 208–9; Permanent Building Society (in liq) v Wheeler, note 354 above, at 137; Furs Ltd v Tomkies, note 36 above, at 592 and Regal (Hastings) Ltd v Gulliver, note 36 above. Note that these cases all concern a breach of the fiduciary duty and not the contractual duty of fidelity. 382. Warman International Ltd v Dwyer, note 16 above, CLR at 557; ALR at 208–9 and Hughes Aircraft Systems International v Airservices Australia (1997) 76 FCR 151 at 237; 146 ALR 1 at 81. 383. Regal (Hastings) Ltd v Gulliver, note 36 above, AC at 144–5, see also at 137, 143, 153 and 158; All ER at 386, see also at 381, 385, 391–2 and 394–5. Note Foster Bryant Surveying Ltd v Bryant, note 256 above, at [49]–[51]. 384. Farah Constructions Pty Ltd v Say-Dee Pty Ltd, note 355 above, at [184]; Youyang Pty Ltd v Minter Ellison Morris Fletcher, note 198 above, at [33] and Maguire v Makaronis, note 177 above, CLR at 466; ALR at 739–40. 385. Deputy Commissioner of Taxation v Dick (2007) 242 ALR 152; [2007] NSWCA 190 at [15]– [18]. 386. Edwards v Attorney General (2004) 60 NSWLR 667; 208 ALR 605; [2004] NSWCA 272 at [113]–[136]. 387. Edwards v Attorney General, note 386 above, at [137]–[141]. 388. ASIC v Macdonald (No 12) (2009) 259 ALR 116; [2009] NSWSC 714 at [22]. 389. Corporations Act s 181. The issue is most commonly agitated in the context of share issues and takeover defences (see R Austin et al, Company Directors: Principles of Law and Corporate Governance, note 172 above, Ch 7. As to the obligations of officers of organisations registered under the Fair Work Act to not exercise their powers for an improper purpose, see Scott v Jess (1984) 3 FCR 263 at 272 and 286–9 and Tanner v Maynes (1985) 7 FCR 432 at 440–1. 390. Ngurli Ltd v McCann (1953) 90 CLR 425 at 438–40; Permanent Building Society (in liq) v Wheeler, note 354 above, at 137 and Mills v Mills (1938) 60 CLR 150 at 163 and 185. 391. Whitehouse v Carlton Hotel Pty Ltd (1987) 162 CLR 285 at 293–4; Ngurli Ltd v McCann, note 390 above, at 445 and Mills v Mills, note 390 above, at 165. 392. Permanent Building Society (in liq) v Wheeler, note 354 above, at 137. 393. Mills v Mills, note 390 above, at 186 and Permanent Building Society (in liq) v Wheeler, note 354 above, at 137. 394. Attorney-General v Goddard, note 38 above, at 745 and Surveys & Mining Ltd v Morrison, note 305 above. 395. See 7.129. 396. NP Generations Pty Ltd v Feneley, note 300 above, at [18]–[25] and Schindler Lifts Australia Pty

Ltd v Debelak, note 258 above, at 317. 397. See Mills v Mills, note 390 above, at 163. 398. See 7.65. 399. See, for example, Goodchild Fuel Distributors Pty Ltd v Holman, note 244 above (breach of the conflict of interest rule by employees who extend credit to members of their family). 400. For example, Ward Evans Financial Services Ltd v Fox [2002] IRLR 120 (term requiring employee not to have a material interest in a company competing with the employer). 401. See 7.86. 402. Nottingham University v Fishel, note 90 above, at 1494 and Helmet Integrated Systems Ltd v Tunnard, note 156 above, at [33]–[37]. See 7.36–7.39. 403. See 7.69 and Groeneveld Australia Pty Ltd v Wouter Nolten (No 3), note 96 above, at [17]. 404. R Austin et al, Company Directors: Principles of Law and Corporate Governance, note 172 above, pp 332–5. 405. For example, Dinte v Hales, note 228 above, at [24]; Timber Engineering Co Pty Ltd v Anderson, note 156 above; Ecrosteel Pty Ltd v Perfor Printing Pty Ltd (1996) 37 IPR 22 at 38 and Cutler v Derwent Howard Media Pty Ltd [2011] FCA 939 at [107]. 406. Robb v Green, note 164 above; Wessex Dairies Ltd v Smith, note 155 above, at 84; Deeson Heavy Haulage Pty Ltd v Cox, note 28 above, at [101]–[104]; Schindler Lifts Australia Pty Ltd v Debelak, note 258 above, at 300–2 and Warman International Ltd v Dwyer (1992) 46 IR 250 at 259 (not affected by the appeals at [1994] QCA 12 and (1995) 182 CLR 544). 407. See, for example, Griffiths & Beerens Pty Ltd v Duggan, note 224 above and Warman International Ltd v Dwyer, note 406 above. 408. Balston Ltd v Headline Filters Ltd (No 2), note 90 above, at 412. 409. See, for example, Warman International Ltd v Dwyer, note 406 above, at 259 (not affected by the appeals at [1994] QCA 12 and (1995) 182 CLR 544) and Griffiths & Beerens Pty Ltd v Duggan, note 224 above, at [152]–[156]. 410. Laughton v BAPP Industrial Supplies, note 245 above; Libra Collaroy Pty Ltd v Angell (1997) 39 IPR 549 at 562–3 and AMP Services Ltd v Manning, note 178 above, at [56]. 411. Sanders v Parry, note 212 above, WLR at 755–6; 2 All ER 803 at 807–8. See also Warman International Ltd v Dwyer, note 406 above, at 259 (not affected by the appeals at [1994] QCA 12 and (1995) 182 CLR 544) and Foster Bryant Surveying Ltd v Bryant, note 256 above. 412. See 16.2. 413. See 7.38. 414. Cook v Deeks [1916] 1 AC 554 at 563; Timber Engineering Co Pty Ltd v Anderson, note 156 above; Dinte v Hales, note 228 above; Digital Pulse Pty Limited v Harris, note 236 above, at [22]; Griffiths & Beerens Pty Ltd v Duggan, note 224 above; Industrial Development Consultants Ltd v Cooley, note 256 above and Hydrocool Pty Ltd v Hepburn (No 4), note 207 above, at [342]–[347]. 415. Warman International Ltd v Dwyer, note 406 above, at 259 (not affected by the appeals at [1994] QCA 12 and (1995) 182 CLR 544); Mordecai v Mordecai (1988) 12 NSWLR 58; Griffiths & Beerens Pty Ltd v Duggan, note 224 above, at [54] and [151] and Digital Pulse Pty Limited v Harris, note 236 above.

416. See 16.44. 417. Manildra Laboratories Pty Ltd v Campbell, note 25 above, at [116]–[121]. 418. See 7.58 and 7.129. 419. Attorney-General v Goddard, note 38 above, at 745 and Surveys & Mining Ltd v Morrison, note 305 above. 420. See 16.48. 421. Ormonoid Roofing and Asphalts Ltd v Bitumenoids Ltd, note 39 above, at 359 (discussed in more detail at 7.11); Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd, note 39 above, at 42–3 and Merryweather v Moore, note 39 above, at 524. 422. GD Searle & Co Ltd v Celltech Ltd [1982] FSR 92 at 101–2 and Deeson Heavy Haulage Pty Ltd v Cox, note 28 above, at [82]–[86]. See 16.42. 423. Deeson Heavy Haulage Pty Ltd v Cox, note 28 above, at [90]–[95]; WA Fork Truck Distributors Pty Ltd v Jones, note 90 above, at [61] and AMP Services Ltd v Manning, note 178 above, at [58]. 424. Hydrocool Pty Ltd v Hepburn (No 4), note 207 above, at [366]–[393] (director organised the employees to threaten to resign en masse unless the director’s self-serving demands were met) and Manildra Laboratories Pty Ltd v Campbell, note 25 above, at [123]–[129]. 425. See 16.36. 426. Schindler Lifts Australia Pty Ltd v Debelak, note 258 above, at 303–4 and British Midlands Tools Ltd v Midland International Tooling Ltd, note 94 above, at [67]–[72] and [80]. 427. Baker v Gibbons [1972] 2 All ER 759 at 765 and GD Searle & Co Ltd v Celltech Ltd, note 422 above, at 101–2. 428. R P Balkin and J L R Davis, Law of Torts, 3rd ed, LexisNexis Butterworths, Sydney, 2004, pp 636–61; F Trindade et al, The Law of Torts in Australia, 4th ed, Oxford University Press, Melbourne, 2007, pp 304–11 and B Creighton and A Stewart, Labour Law, note 8 above, pp 797–8. 429. For example, Lumley v Gye (1853) 2 E & B 216; 118 ER 749. 430. Gibson Chemicals Ltd v SA Sopura NV [1999] VSC 203. 431. Sanders v Snell (1998) 196 CLR 329; 157 ALR 491 at [22]. 432. Ansett Transport Industries (Operation) Pty Ltd v Australian Federation of Air Pilots, note 5 above, at 659. 433. Schindler Lifts Australia Pty Ltd v Debelak, note 258 above, at 303–4. 434. Betts v Brisbane Gas Co Ltd [1978] Qd R 429 at 432. As discussed in 1.26, historically menial servants exclusively served their masters. 435. See Australian Bureau of Statistics, Australian Social Trends, September 2009 and 1.16. 436. Reading v Attorney General, note 37 above (discussed in 7.11). 437. Helmet Integrated Systems Ltd v Tunnard, note 156 above, at [48] and Electrolux Ltd v Hudson, note 326 above; see 7.105 and 7.106. 438. The story was initially told 200 years after the event by Vitruvius, De architectura, Book IX.9; C Rorres, ‘The First Eureka Moment’ (2004) 305 Science 1219. See also Missing Link Software v Magee [1989] 1 FSR 361 at 365.

See 7.110; Missing Link Software v Magee, note 438 above and Copyright Act 1968 (Cth) s 439. 35(6). 440. Digital Pulse Pty Limited v Harris, note 236 above, at [21]. 441. Hivac Ltd v Park Royal Scientific Instruments Ltd, note 18 above, Ch at 178; All ER at 356 per Lord Greene MR. See also Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd, note 39 above, at 42 (employee using confidential information to aid a rival build a business in his spare time); Dinte v Hales, note 228 above (employee using spare time to conduct a rival business). 442. Hivac Ltd v Park Royal Scientific Instruments Ltd, note 18 above, Ch at 174; All ER at 354. 443. Laughton v BAPP Industrial Supplies, note 245 above, at 637. 444. Hivac Ltd v Park Royal Scientific Instruments Ltd, note 18 above, Ch at 178 and 181; All ER at 356 and 357 and Digital Pulse Pty Limited v Harris, note 236 above, at [21]. 445. ABK Ltd v Foxwell, note 258 above (‘the question is whether this constituted conduct which could cause serious harm to ABK’). 446. Nova Plastics v Froggatt, note 188 above and Schindler Lifts Australia Pty Ltd v Debelak, note 258 above, at 303. 447. United Sterling Corporation Ltd v Felton, note 160 above, at 414 and Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd, note 39 above, at 42. 448. Victoria University of Technology v Wilson, note 23 above, at [144]; Hivac Ltd v Park Royal Scientific Instruments Ltd, note 18 above, Ch at 174; All ER at 354 and Weldon & Co Services Pty Ltd v Harbinson, note 26 above, at [26]; see 7.5–7.11. 449. Wessex Dairies Ltd v Smith, note 155 above, at 84. 450. Victoria University of Technology v Wilson, note 23 above, at [104]. 451. Blyth Chemicals Ltd v Bushnell, note 1 above, at 69 and 75. See also on this issue, Weldon & Co Services Pty Ltd v Harbinson, note 26 above, at [32]; Moreton Bay College v Teys, note 13 above, at [63]–[65]; Spotless Group Ltd v Blanco Catering Pty Ltd [2011] FCA 979 at [22] and [26] and GlaxoSmithKline Australia Pty Ltd v Ritchie (2008) 77 IPR 306; [2008] VSC 164 at [116]–[125]. 452. See 16.42. 453. Helmet Integrated Systems Ltd v Tunnard, note 156 above, at [27] and [48]–[49] and Laughton v BAPP Industrial Supplies, note 245 above, at 638–9. 454. See Foster Bryant Surveying Ltd v Bryant, note 256 above, at [48]; Balston Ltd v Headline Filters Ltd (No 2), note 90 above, at 412; Tullett Prebon Plc v BGC Brokers [2011] IRLR 420; [2011] EWCA Civ 131 at [41]–[42] and Weldon & Co Services Pty Ltd v Harbinson, note 26 above, at [11]. On the centrality of loyalty in this field, see 7.34–7.39. 455. Helmet Integrated Systems Ltd v Tunnard, note 156 above, at [28]–[32] and Manildra Laboratories Pty Ltd v Campbell, note 25 above, at [79]–[83]. 456. Helmet Integrated Systems Ltd v Tunnard, note 156 above, at [32]; Manildra Laboratories Pty Ltd v Campbell, note 25 above, at [81]; United States Surgical Corporation v Hospital Products International Pty Ltd (1982) 2 NSWLR 766 at 807 and GlaxoSmithKline Australia Pty Ltd v Ritchie, note 451 above, at [74]–[77]. 457. Corporations Act s 181; Southern Real Estate Pty Ltd v Dellow (2003) 87 SASR 1 at 7 and 10. As to whether this duty is fiduciary, see the discussion in Bell Group Ltd v Westpac Banking

Corporation (No 9) (2008) ACSR 1 at 265–77. 458. See British Midlands Tools Ltd v Midland International Tooling Ltd, note 94 above, at [89]–[90]; Shepherds Investments Ltd v Walters, note 178 above and P Watts, ‘The transition from director to competitor’ (2007) 123 LQR 21. 459. See 7.61 and 7.62. 460. Balston Ltd v Headline Filters Ltd (No 2), note 90 above, at 408 and 412; Laughton v BAPP Industrial Supplies, note 245 above, at 638; Shepherds Investments Ltd v Walters, note 178 above, at [105]–[107] and Helmet Integrated Systems Ltd v Tunnard, note 156 above, at [28]– [32]. 461. Balston Ltd v Headline Filters Ltd (No 2), note 90 above, at 408 and 412; Deeson Heavy Haulage Pty Ltd v Cox, note 28 above, at [80]–[82] and Framlington Group plc v Anderson, note 240 above, at 497–8. See 7.20 concerning the obligations to inform an employer of misdeeds of the employee and others. 462. For example, WA Fork Truck Distributors Pty Ltd v Jones, note 90 above, at [59]. 463. CMS Dolphin Ltd v Simonet, note 259 above, at [87] and [95] per Lawrence Collins J and Deeson Heavy Haulage Pty Ltd v Cox, note 28 above, at [80]–[82]. 464. Deeson Heavy Haulage Pty Ltd v Cox, note 28 above, at [83]–[95]. See 7.84. 465. Blyth Chemicals Ltd v Bushnell, note 1 above, at 74, 81–2 and 7.47. 466. Manildra Laboratories Pty Ltd v Campbell, note 25 above, at [82]–[83]; Helmet Integrated Systems Ltd v Tunnard, note 156 above, at [30] and Independent Management Resources Pty Ltd v Brown, note 304 above, at 613; cf the dicta in Hospital Products Ltd v United States Surgical Corp, note 176 above, CLR at 105; ALR at 460. 467. Manildra Laboratories Pty Ltd v Campbell, note 25 above, at [113]–[122] and GlaxoSmithKline Australia Pty Ltd v Ritchie, note 451 above, at [74]–[77]. On the distinction between confidential information, trade secrets and know-how, see 16.44. 468. Laughton v BAPP Industrial Supplies, note 245 above, at 637. 469. Robb v Green, note 164 above. Legitimate canvassing in this context does not mean canvassing or soliciting the employer’s clients. See Wessex Dairies Ltd v Smith, note 155 above, at 88. 470. Wessex Dairies Ltd v Smith, note 155 above, at 88. 471. See 7.81–7.83. 472. Balston Ltd v Headline Filters Ltd (No 2), note 90 above, at 412; Ecrosteel Pty Ltd v Perfor Printing Pty Ltd, note 405 above, at 36–8 and Hospital Products Ltd v United States Surgical Corp, note 176 above, CLR at 105; ALR at 460 and the cases discussed in 7.80–7.83. 473. Lancashire Fires Ltd v SA Lyons & Co Ltd [1996] FSR 629 at 678–9. 474. Griffiths & Beerens Pty Ltd v Duggan, note 224 above, at [31]–[37] and [54] and Blackmagic Design Pty Ltd v Overliese, note 163 above, at [100]–[103]; cf GlaxoSmithKline Australia Pty Ltd v Ritchie, note 451 above, at [74]–[77]. 475. See 7.89. 476. Edmonds v Donovan (2005) 12 VR 513; [2005] VSCA 27 at [56]; Natural Extracts Pty Ltd v Stotter, note 334 above, at 141 and Spincode Pty Ltd v Look Software Pty Ltd (2001) 4 VR 501; [2001] VSCA 248 at [55]–[56], although note Attorney-General v Blake, note 203 above, Ch at 453–4; All ER at 841. On the post-termination contractual and equitable duties of confidence see

16.42. 477. CMS Dolphin Ltd v Simonet, note 259 above, at [96] and Foster Bryant Surveying Ltd v Bryant, note 256 above, at [69]. 478. Canadian Aero Service Ltd v O’Malley, note 178 above, applied or referred to approvingly in Green & Clara Pty Ltd v Bestobell Industries Pty Ltd, note 178 above, at 19; Mordecai v Mordecai, note 415 above, at 65; Edmonds v Donovan, note 476 above, at [56] and Colour Control Centre Pty Ltd v Ty, note 28 above. See also R P Austin, ‘Fiduciary Accountability for Business Opportunities’ in P D Finn (ed), Equity and Commercial Relationships, Law Book Company, Sydney, 1987; cf the approach in Co-ordinated Industries Pty Ltd v Elliott, note 352 above, at 287–9. 479. In this passage ‘or’ should read ‘and’; Foster Bryant Surveying Ltd v Bryant, note 256 above, at [59]; Island Export Finance Ltd v Umunna [1986] BCLC 460 at 482; CMS Dolphin Ltd v Simonet, note 259 above, at [91] and Rishmont Pty Ltd v Tweed City Medical Centre [2002] 2 Qd R 222; [2001] QSC 372 at [10]–[17]. 480. Canadian Aero Service Ltd v O’Malley, note 178 above, at 382. 481. See, for example, Industrial Development Consultants Ltd v Cooley, note 256 above; Natural Extracts Pty Ltd v Stotter, note 334 above, at 141; Edmonds v Donovan, note 476 above, at [56]– [59] and Addstead Pty Ltd v Liddan Pty Ltd (1997) 25 ACSR 175 at 195. 482. Deeson Heavy Haulage Pty Ltd v Cox, note 28 above, at [147]–[155]; Industrial Development Consultants Ltd v Cooley, note 256 above and Addstead Pty Ltd v Liddan Pty Ltd, note 481 above, at 195. 483. Hunter Kane Ltd v Watkins [2004] EWCA 841. 484. Island Expert Finance Limited v Umunna, note 479 above, at 472; Manildra Laboratories Pty Ltd v Campbell, note 25 above, at [97]–[100] and Hunter Kane Ltd v Watkins, note 483 above. 485. Balston Ltd v Headline Filters Ltd (No 2), note 90 above, at 412. See also Weldon & Co Services Pty Ltd v Harbinson, note 26 above, at [27]–[36] and GlaxoSmithKline Australia Pty Ltd v Ritchie, note 451 above, at [74]–[77] where there was no interest in acquiring the opportunity. 486. Island Export Finance Ltd v Umunna, note 479 above, at 482. 487. See 16.44. 488. CMS Dolphin Ltd v Simonet, note 259 above, at [91] and [95] and Island Export Finance Ltd v Umunna, note 479 above, at 482. 489. Reading v Attorney General, note 37 above, AC at 514–7; All ER at 619–21; Boston Deep Sea Fishing and Ice Company v Ansell, note 164 above, at 357 and 363 and The Parkdale [1897] P 53 at 58. Unless otherwise indicated, the term secret benefit is used below to describe a bribe, a secret commission or a secret profit. 490. Boston Deep Sea Fishing and Ice Company v Ansell, note 164 above, at 357 and 362; Reading v Attorney General, note 37 above, AC at 514–7; All ER at 619–21 and Mainland Holdings Limited v Szady [2002] NSWSC 699 at [63]–[64]. See also Regal (Hastings) Ltd v Gulliver, note 36 above, AC at 154; All ER at 392. 491. Corporations Act s 182(1). The statutory duty is parallel with and does not subsume the contractual and fiduciary duties: s 185; and Digital Pulse Pty Limited v Harris, note 236 above, at [30] (appeal at (2003) 56 NSWLR 298). 492. Attorney-General v Goddard, note 38 above, at 745; EFG Australia Limited v Kennedy [1999]

NSWSC 922 at [31] and [46]; Neary v Dean of Westminster, note 90 above, at [18]–[19]; Boston Deep Sea Fishing and Ice Company v Ansell, note 164 above; Alexander v Webber [1922] 1 KB 642 (chauffer) and Reading v Attorney General, note 37 above, AC at 516; All ER at 620–1 and [1949] 2 KB 232 at 236 in the Court of Appeal. 493. Mainland Holdings Limited v Szady, note 490 above, at [66]; Digital Pulse Pty Limited v Harris, note 236 above, at [20]–[30] (appeal at (2003) 56 NSWLR 298) and Neary v Dean of Westminster, note 90 above, at [18]–[19] where Lord Jauncey treats the contractual and fiduciary duties as co-extensive. 494. See, for example, Regal (Hastings) Ltd v Gulliver, note 36 above, AC at 135 and 154; All ER at 380 and 392 and Thompson v Havelock (1808) 1 Camp 527; 170 ER 1045. 495. R v Glynn (1994) 33 NSWLR 139 at 143–4. 496. See the Secret Commission Act 1905 (Cth) s 4; Crimes Act 1900 (NSW) s 249B; Criminal Code (Qld) s 442B; Secret Commissions Prohibitions Act 1920 (SA) s 4; Criminal Code (Tas) s 266; Crimes Act 1958 (Vic) s 176 and Criminal Code (WA) s 529. The Secret Commission Act 1905 (Cth) applies in the ACT by virtue of the Seat of Government (Administration) Act 1910 (Cth) s 7. The legislation in the Northern Territory contains a slightly different offence (Criminal Code (NT) s 236). The scheme established by the Corporations Act allows for the court, on the application of ASIC, to seek the imposition of a pecuniary penalty of up to $200,000 upon the employee for breach of the statutory duty not to take secret payments (ss 182, 1317 G(1) and 1317J(1)). See further G Dal Pont, Law of Agency, note 285 above, Ch 14. 497. See Mahesan v Malaysia Government Officers’ Co-operative Housing Society Limited [1979] AC 374 at 383; [1978] 2 All ER 405 at 411; Harrington v Victoria Graving Dock Company (1878) 3 QBD 549 at 551–2 (consideration illegal) and Logicrose Ltd v Southend United Football Club Ltd [1988] 1 WLR 1256 (no recovery of bribe under failed bribery agreement despite failure of consideration). 498. Boston Deep Sea Fishing and Ice Company v Ansell, note 164 above, at 357 and P Finn, Fiduciary Obligations, note 29 above, p 214. 499. Hovenden & Sons v Millhoff (1900) 83 LT 41 at 43; Aequitas Ltd v Sparad No 100 Ltd (2001) 19 ACLC 1006; [2001] NSWSC 14 at [369]; Tesco Stores Ltd v Pook, note 94 above, at [18]; Daraydan Holdings Limited v Solland International Limited [2005] Ch 119; 4 All ER 73 at [52]; Industries & General Mortgage Co Limited v Lewis [1941] 1 All ER 573 at 575; Mahesan v Malaysia Government Officers’ Co-operative Housing Society Limited, note 497 above, AC at 383; All ER at 411 and P Finn, Fiduciary Obligations, note 29 above, p 218. 500. Industries & General Mortgage Co Limited v Lewis, note 499 above, at 575; Aequitas Ltd v Sparad No 100 Ltd, note 499 above, at [369] and Hovenden & Sons v Millhoff, note 499 above and Re A Debtor [1927] 2 Ch 367 at 376. See also P Millett, ‘Bribes and Secret Commissions’ [1993] RLR 7 at 13 and F Reynolds, Bowstead and Reynolds on Agency, 18th ed, Sweet & Maxwell, London, 2006, p 211. 501. Reading v Attorney General, note 37 above, AC at 514–5 and 518; All ER at 619 and 621; Attorney-General v Goddard, note 38 above, at 745–6 (bribe to police officer) and Mahesan v Malaysia Government Officers’ Co-operative Housing Society Limited, note 497 above, AC at 383; All ER at 411. 502. Hippisley v Knee Bros, note 221 above and Dinte v Hales, note 228 above (trade discount); Boston Deep Sea Fishing and Ice Company v Ansell, note 164 above (bonus and commission); Eden v Ridsdales Railway Lamp and Lighting Company Limited (1889) 23 QBD 368 (shares); Advanced Realty Funding Corp v Bannick (1979) 106 DLR (3d) 137 at 142 (finder’s fee) and the

cases referred to in P Finn, Fiduciary Obligations, note 29 above, pp 211 and 217. As to networking and secret benefits, see L Johns and M Bagaric, ‘Bribery and Networking: Is there a difference?’ [2002] Deakin LR 7. 503. See P Finn, Fiduciary Obligations, note 29 above, p 214; Attorney-General for Hong Kong v Reid [1994] 1 AC 324 at 330–1; 1 All ER 1 at 4; Industries & General Mortgage Co Limited v Lewis, note 499 above, at 575; Hovenden & Sons v Millhoff, note 499 above, at 43 and Aequitas Ltd v Sparad No 100 Ltd, note 499 above, at [370]. 504. Hippisley v Knee Brothers, note 221 above, at 7; Williamson v Hine, note 221 above, at 393; Manubens v Leon, note 221 above (implied term that employee entitled to retain tips); Palmanor Ltd v Cedron [1978] ICR 1008 at 1013–4 and Wrottesley v Regent Street Florida Restaurant Ltd [1951] 2 KB 277; 1 All ER 566 (tips in the tronc are not part of the employer’s property). 505. The Parkdale, note 489 above, at 58–9; Eden v Ridsdales Railway Lamp and Lighting Company Limited, note 502 above, at 372; Blythe v Northwood, note 205 above, at [199]–[206]; Aequitas Ltd v Sparad No 100 Ltd, note 499 above, at [370]–[375]; Pilmer v Duke Group Ltd, note 95 above, at [83] and P Finn, Fiduciary Obligations, note 29 above, p 221. 506. Attorney-General v Goddard, note 38 above, at 746; Boston Deep Sea Fishing and Ice Company v Ansell, note 164 above, at 355 and 364 and Williamson v Hine, note 221 above, at 393 and Bendigo Central Freezing and Fertiliser Company Limited v Cunningham, note 357 above, at 397. 507. Hippisley v Knee Bros, note 221 above, at 7; Turner v Garden, note 357 above; Bendigo Central Freezing and Fertiliser Company Limited v Cunningham [1919] VLR 387; Alexander v Webber, note 492 above and Furs Ltd v Tomkies, note 36 above. See P Finn, Fiduciary Obligations, note 29 above, p 219. 508. See the cases at 7.95. 509. The Parkdale, note 489 above, at 58. See also Aequitas Ltd v Sparad No 100 Ltd, note 499 above, at [370]–[375] and Blythe v Northwood, note 205 above, at [199]–[206]. 510. Furs Ltd v Tomkies, note 36 above and Framlington Group plc v Anderson, note 240 above. See also Guinness plc v Saunders, note 244 above. 511. Reading v Attorney General, note 37 above, AC at 516; All ER at 620–1. See further 7.11. 512. Byrne v Hoare, note 287 above, at 141–2 and 146–9; see also Willey v Synan, note 290 above, at 217–20 and London Corporation v Appleyard, note 275 above, WLR at 988–9; All ER 834 at and 7.54. 513. Industries & General Mortgage Co Limited v Lewis, note 499 above, at 575; Shipway v Broadwood [1899] 1 QB 369 at 373 and Agip (Africa) Limited v Jackson [1990] Ch 265 at 294; [1992] 4 All ER 385 in which Millett J pithily observed: ‘Secrecy is the badge of fraud’. 514. Parker v McKenna [1874] LR 10 Ch App 96 at 124 and Regal (Hastings) Ltd v Gulliver, note 36 above, AC at 154; All ER at 392. 515. See the cases at 7.96. 516. See Chan v Zacharia, note 175 above, CLR at 199; ALR at 434. The employee’s duty to account is discussed in 7.52–7.55. 517. Bendigo Central Freezing and Fertiliser Company Limited v Cunningham, note 357 above, at 397–8; Turner v Garden, note 357 above and Hippisley v Knee Brothers, note 221 above, at 7. 518. BLB Corporation of Australia v Jacobsen, note 244 above, at 376–7; EFG Australia Limited v

Kennedy, note 492 above, at [46] and Furs Ltd v Tomkies, note 36 above, at 599–600 (employer knew the employee was negotiating with a purchaser of the business to both sell the business and obtain future employment for himself, but was unaware that the employee had negotiated a fiveyear sign-on bonus). 519. Fyffes Group Ltd v Templeman [2000] 2 Lloyd’s Rep 643 at 668–70 and Mahesan v Malaysia Government Officers’ Co-operative Housing Society Limited, note 497 above, AC at 383; All ER at 411. If the secret payment was made in relation to a contract between the employer and the payer, then the employer may be entitled to terminate that contract: Bendigo Central Freezing and Fertiliser Company Limited v Cunningham, note 357 above, at 398. See further M Berg, ‘Bribery — Transaction Validity and Other Civil Law Implications’ [2001] LMCLQ 27 at 34–5. 520. Boston Deep Sea Fishing and Ice Company v Ansell, note 164 above, at 367; Mahesan v Malaysia Government Officers’ Co-operative Housing Society Limited, note 497 above, AC at 380–3; All ER at 408–11 and Grant v The Gold Exploration and Development Syndicate Limited, note 373 above. 521. Industries & General Mortgage Co Limited v Lewis, note 499 above, at 578 and Hovenden & Sons v Millhoff, note 499 above, at 43. 522. Attorney-General v Goddard, note 38 above, at 745–6. See also Reading v Attorney General, note 37 above, AC at 515 and 516; All ER at 619–21; Boston Deep Sea Fishing and Ice Company v Ansell, note 164 above, at 355 and 367–8; Mainland Holdings Limited v Szady, note 490 above, at [67] and Furs Ltd v Tomkies, note 36 above, at 592. 523. Mahesan Thambia v Malaysia Government Officers’ Co-operative Housing Society Limited, note 497 above, AC at 383; All ER at 411 and Hovenden & Sons v Millhoff, note 499 above, at 43. 524. See 15.133. 525. Attorney-General for Hong Kong v Reid, note 503 above, AC at 331; All ER at 4–5, except where the fiduciary pays himself or herself the bribe directly from the funds being transferred from the employer to the donor: see P Finn, Fiduciary Obligations, note 29 above, p 221. 526. Attorney-General for Hong Kong v Reid, note 503 above, AC at 331–2; All ER at 5 and Mainland Holdings Limited v Szady, note 490 above, at [69]–[70]. The Court of Appeal decision in Lister & Co v Stubbs (1890) 45 Ch D 1 is no longer followed on this point. See Daraydan Holdings Limited v Solland International Limited, note 499 above, at [75]–[88] and J Heydon and M Leeming, Jacobs’ Law of Trusts in Australia, 7th ed, LexisNexis Butterworths, Sydney, 2006, pp 271–5. On constructive trusts, see 15.136. 527. Keith Henry & Co Pty Ltd v Stuart Walker & Co Pty Ltd, note 262 above, at 350. 528. Boston Deep Sea Fishing and Ice Company v Ansell, note 164 above, at 357 and 363–4 and EFG Australia Limited v Kennedy, note 492 above, at [56]. 529. Blyth Chemicals Ltd v Bushnell, note 1 above, at 72–3 and 81; Concut Pty Ltd v Worrell, note 79 above, at [25]; Boston Deep Sea Fishing and Ice Company v Ansell, note 164 above at 357 and Neary v Dean of Westminster, note 90 above, at [20]–[23] and [73]. 530. Langhorne v Bennett (1877) 3 VLR 108 at 109–10. 531. See the dicta of Deane J in Chan v Zacharia, note 175 above, CLR at 199; ALR at 434. 532. Sterling Engineering Company Limited v Patchett [1955] AC 534 at 544 per Viscount Simonds and at 547 per Lord Reid. 533. Victoria University of Technology v Wilson, note 23 above, at [104]; Triplex Safety Glass Co v Scorah (1937) 55 RPC 21 at 28 and Sterling Engineering Company Limited v Patchett, note 532

above, at 543. 534. University of Western Australia v Gray, note 22 above, at [150]–[152]; Sterling Engineering Company Limited v Patchett, note 532 above, at 543–4, 547–8 and 549; Worthington Pumping Engine Company v Moore (1902) 20 RPC 41 at 48–9; Triplex Safety Glass Company v Scorah, note 181 above, at 217 and Vokes Limited v Heather (1945) 62 RPC 135 at 143–4. See 5.49. 535. Triplex Safety Glass Company v Scorah, note 181 above, and Electrolux Limited v Hudson, note 326 above, at 323–4; on unreasonable restraints of trade, see 16.28. 536. Electrolux Limited v Hudson, note 326 above, at 325 and Triplex Safety Glass Company v Scorah, note 181 above, at 216–7. 537. See, for example, Australian Institute of Marine Science Act 1972 (Cth) s 48; Science and Industry Research Act 1949 (Cth) s 54 and Queensland Institute of Medical Research Act 1945 (Qld) s 18. 538. Copyright Act s 35 (6). 539. Copyright Act ss 176 (2), 177 and 178(4). 540. Design Act s 13(1). 541. Patents Act 1977 (UK) s 39(1)(a). 542. Adamson v Kenworthy (1931) 49 RPC 57 at 68–9; British Reinforced Concrete Engineering Company Limited v Lind, note 32 above, at 109; Re Charles Selz Limited’s Application, note 25 above, at 165; Worthington Pumping Engine Company v Moore, note 534 above, at 48–9; Edisonia Limited v Forse, note 32 above, at 551; Re Harris’ Patent, note 32 above, at 29–30 and Electrolux Limited v Hudson, note 326 above, at 326–31. See also University of Western Australia v Gray, note 22 above, at [149] and [157]. 543. University of Western Australia v Gray, note 22 above, at [149]. 544. Victoria University of Technology v Wilson, note 23 above, at [144]–[149]. See the critique of J Riley, ‘Who Owns Human Capital? A Critical Appraisal of Legal Techniques for Capturing the Value of Work’ (2005) 18 AJLL 1 at 8–10. 545. See generally A Stewart, ‘Ownership of Property in the Context of Employment’ (1992) 5 AJLL 1; J McKeough et al, Intellectual Property in Australia, 4th ed, LexisNexis Butterworths, Australia, 2010, Ch 13. 546. Sterling Engineering Company Limited v Patchett, note 532 above, at 547 per Lord Reid and Victoria University of Technology v Wilson, note 23 above, at [104]. 547. Edisonia Limited v Forse, note 32 above, at 549; Re Charles Selz Limited’s Application, note 25 above, at 164 and British Syphon Company Limited v Homewood [1956] 2 All ER 897 at 898. 548. Sterling Engineering Company Limited v Patchett, note 532 above, at 543 (‘in the course of his employment [that is, in his employer’s time and with his materials] makes an invention which it falls within his duty to make’). See the Patents Act 1977 (UK) s 39(1) which refers to inventions ‘made in the course of the normal duties of the employee’. See Re Harris’ Patent, note 32 above, at 28 and Greater Glasgow Health Board’s Application [1996] RPC 207 at 210. 549. Triplex Safety Glass Company v Scorah, note 181 above, at 217. 550. University of Western Australia v Gray, note 22 above, at [152]. 551. Triplex Safety Glass Company v Scorah, note 181 above, at 218 and Adamson v Kenworthy, note 542 above, at 68.

552. Sterling Engineering Company Limited v Patchett, note 532 above, at 543. 553. Fine Industrial Commodities Limited v Powling, note 244 above, at 257; Worthington Pumping Engine Company v Moore, note 534 above, at 46; Spencer Industries Pty Ltd v Collins, note 25 above, at [67]; EdSonic Pty Ltd v Cassidy (2010) 189 FCR 271; 272 ALR 589; [2010] FCA 1008 at [34] and Victoria University of Technology v Wilson, note 23 above, at [104]. 554. University of Western Australia v Gray, note 22 above, at [153]. 555. Richwood Creek Pty Ltd v Williams (2010) 85 IPR 378; [2010] FCA 196 at [10] and Spencer Industries Pty Ltd v Collins, note 25 above, at [67]. 556. Electrolux Limited v Hudson, note 326 above. 557. See, for example, Mellor v William Beardmore & Co (1927) 44 RPC 175 at 187 and Prout v British Gas Plc [1992] FSR 478 at 481–2. 558. University of Western Australia v Gray, note 22 above, at [152] per Lindgren, Finn and Bennett JJ (footnotes omitted) and LIFFE Administration & Management v Pinkava [2007] 4 All ER 981 at [97]. 559. Sterling Engineering Company Limited v Patchett, note 532 above, at 547 per Lord Reid. 560. British Reinforced Concrete Engineering Company Limited v Lind, note 32 above, at 109 (engineer). 561. Helmet Integrated Systems Ltd v Tunnard, note 156 above, at [48]; Prout v British Gas Plc, note 557 above, at 481–2 and Mellor v William Beardmore & Co Ltd, note 557 above. 562. University of Western Australia v Gray, note 22 above, at [155] per Lindgren, Finn and Bennett JJ. Cases concerning managers’ duties include Edisonia Limited v Forse, note 32 above, at 550– 2; Fine Industrial Commodities Limited v Powling, note 244 above, at 257; Re Harris’ Patent, note 32 above and Re Charles Selz Limited’s Application, note 25 above, at 165–6. 563. Re Charles Selz Limited’s Application, note 25 above, at 164–6; Re Harris’ Patent, note 32 above; Victoria University of Technology v Wilson, note 23 above, at [104]–[108] and Kwan v Queensland Corrective Services Commission (1994) 34 IPR 25 at 33. 564. Electrolux Limited v Hudson, note 326 above. 565. Adamson v Kenworthy, note 542 above, at 68; Spencer Industries Pty Ltd v Collins, note 25 above, at [78]; British Reinforced Concrete Engineering Company Limited v Lind, note 32 above, at 109; Edisonia Limited v Forse, note 32 above, at 549; Re Charles Selz Limited’s Application, note 25 above, at 165 and Fine Industrial Commodities Limited v Powling, note 244 above, at 257. 566. British Syphon Company Limited v Homewood, note 547 above, at 898. 567. See, for example, Adamson v Kenworthy, note 542 above, at 69; Triplex Safety Glass Company v Scorah, note 181 above; British Reinforced Concrete Engineering Company Limited v Lind, note 32 above, at 108–9 and LIFFE Administration & Management v Pinkava, note 558 above, at [97]. 568. Adamson v Kenworthy, note 542 above, at 68–9 and British Reinforced Concrete Engineering Company Limited v Lind, note 32 above, at 109; see also Edisonia Limited v Forse, note 32 above, at 551. 569. British Reinforced Concrete Engineering Company Limited v Lind, note 32 above, at 108–9. 570. Victoria University of Technology v Wilson, note 23 above, at [120]–[121].

571. Edisonia Limited v Forse, note 32 above, at 551–2 and Re Harris’ Patent, note 32 above. 572. Victoria University of Technology v Wilson, note 23 above, at [108], [112], and [115] and Re Charles Selz Limited’s Application, note 25 above. A related issue arose in EdSonic Pty Ltd v Cassidy, note 553 above. 573. Victoria University of Technology v Wilson, note 23 above, at [104]. 574. Spencer Industries Pty Ltd v Collins, note 25 above, at [81]–[83] per Branson J, noted in E Raper, ‘Employee Ownership of Inventions — A Re-examination’ (2004) 17 AJLL 81. 575. Triplex Safety Glass Company v Scorah, note 181 above, at 217; Sterling Engineering Company Limited v Patchett, note 532 above, at 543 and British Celanese Limited v Moncrieff [1948] Ch 564 at 581. 576. Patents Act s 15(1). See A Stewart, ‘Ownership of Property in the Context of Employment’ (1992) 5 AJLL 1 at 10. 577. Sterling Engineering Company Limited v Patchett, note 532 above, at 544. 578. Sterling Engineering Company Limited v Patchett, note 532 above, at 544 and Worthington Pumping Engine Company v Moore, note 534 above, at 49. 579. Triplex Safety Glass Company v Scorah, note 181 above, at 218 and Adamson v Kenworthy, note 542 above, at 68. 580. Triplex Safety Glass Company v Scorah, note 181 above, at 218. 581. Geodesic Constructions Pty Limited v Gaston (1976) 16 SASR 453. See also Electric Transmission Limited v Dannenberg (1948) 65 RPC 439 (aff’d (1949) 66 RPC 183). 582. British Reinforced Concrete Engineering Company Limited v Lind, note 32 above, at 110. 583. See 15.136. 584. S Ricketson, The Law of Intellectual Property, Law Book Company, Sydney, 1984, p 49 and J McKeough et al, Intellectual Property in Australia, note 545 above, Ch 5. 585. Copyright Act s 35(2). The employee may retain some moral rights in relation to the work under Pt IX of that Act. 586. Copyright Act s 35(6). The leading cases in this field concern applications of the Copyright Act 1911 (UK) s 5(1) and the Copyright Act 1956 (UK) s 4(4) which raised the question of whether a work was ‘made in the course of the employment’, a slightly different test: Stephenson Jordan & Harrison Limited v MacDonald & Evans (1951) 64 RPC 10 and Antocks Lairn Limited v I Bloohn Limited [1972] RPC 219 and Missing Link Software v Magee, note 438 above. 587. EdSonic Pty Ltd v Cassidy, note 553 above, at [41]. 588. See De Garis v Neville Jeffress Pidler Pty Ltd (1990) 95 ALR 625 at 638–9. The operation of that rule is discussed in more detail in the specialist texts in this field: see J McKeough et al, Intellectual Property in Australia, note 545 above, pp 172–4 and S Walker, Media Law: Commentary and Materials, LBC Information Services, Sydney, 2000, pp 921–2. 589. Copyright Act s 35(4). See further S Walker, Media Law: Commentary and Materials, note 588 above, p 924. 590. Copyright Act ss 176(2) and 178(4). The same rights also attach to a work first published in Australia by or under the direction or control of the Commonwealth or a state: see s 177. See A Stewart, ‘Ownership of Property in the Context of Employment’ (1992) 5 AJLL 1 at 13. 591. Designs Act 2003 (Cth) s 73; S Ricketson, The Law of Intellectual Property, note 584 above, Ch

20 and J McKeough et al, Intellectual Property in Australia, note 545 above, pp 261–4. 592. Designs Act ss 4 and 7. 593. Designs Act s 13. See also Stephenson Jordan & Harrison Limited v MacDonald & Evans, note 586 above and Antocks Lairn Limited v I Bloohn Limited, note 586 above. 594. University of Western Australia v Gray, note 22 above, at [159]. 595. Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2), note 298 above, CLR at 437–8; ALR at 208–9 and Breen v Williams, note 95 above, CLR at 128–9; ALR at 301. 596. Lamb v Evans, note 164 above, at 229; Robb v Green, note 164 above, at 318–20; Boston Deep Sea Fishing and Ice Company v Ansell, note 164 above and Helmore v Smith, note 164 above, at 456. 597. As to personal secrets of an employer, see, for example, Campbell v Frisbee [2002] EWCA 134 (Naomi Campbell’s personal assistant who had disclosed her employer’s drug use to the News of the World), discussed in L Clarke, ‘Repudiation of Contract and Breach of Confidence: General Billposting v Atkinson Revisited’ (2003) 32 ILJ 43. 598. See G S Clarke, ‘Confidential Information and Trade Secrets: When is a Trade Secret in the Public Domain?’ (2009) 83 ALJ 242 at 245–7. See also 7.130. 599. Norman v Federal Commissioner of Taxation (1963) 109 CLR 9 at 16 and 26. 600. Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2), note 298 above, CLR at 438; ALR at 208; Thomas v Farr Plc [2007] ICR 932 at 939–40; Boardman v Phipps, note 16 above, AC at 107 and 127–8; All ER at 745–6 and 759; Federal Commissioner of Taxation v United Aircraft Corp (1943) 68 CLR 525 at 534–5 and R Dean, The Law of Trade Secrets and Personal Secrets, note 234 above, pp 4–6. 601. O Mustad & Son v S Allcock & Co Ltd [1963] 3 All ER 416 (decided in 1928); Douglas v Hello! Ltd (No 2) [2005] 4 All ER 128 at [129]-[134] and TS & B Retail Systems Pty Ltd v 3Fold Resources Pty Ltd (No 3) (2007) 158 FCR 444; 239 ALR 117; [2007] FCA 151 at [74]-[75]. See 15.69. 602. Smith Kline & French Laboratories (Australia) Ltd v Secretary to the Department of Community Services and Health (1991) 28 FCR 291 at 303; 99 ALR 679 at 690-1. 603. There are various Acts governing the use of listening devices: Telecommunications (Interception Act) 1979 (Cth) and Listening Devices Acts in New South Wales, Victoria, Queensland and South Australia. There are Acts governing the collection of secret information from employees such as the Workplace Video Surveillance Act 1998 (NSW) and the Surveillance Devices Acts of Victoria and WA, and Acts that protect the privacy of some information provided to some employers such as the Privacy Act 1988 (Cth). See generally R Dean, The Law of Trade Secrets and Personal Secrets, note 234 above, Ch 14. 604. Prout v British Gas Plc, note 557 above, at 481-2. 605. University of Western Australia v Gray, note 22 above, at [161]-[162]; Optus Networks Pty Ltd v Telstra Corporation Ltd (2010) 265 ALR 281; [2010] FCAFC 21 at [38]; Robb v Green, note 164 above, at 317-8 and 320; Nicrotherm Electrical Co Ltd v Percy [1957] RPC 207 at 213-4; Ackroyds (London) v Islington Plastics [1962] RPC 97 at 101 and 104; F Gurry, Breach of Confidence, note 162 above, pp 39-43 and Concut Pty Ltd v Worrell, note 79 above, at [25]-[26] implicitly suggests that the duties are co-existent. Such an interpretation is consistent with the later reference to that passage by the High Court in Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181; 185 ALR 152 at [47].

606. Del Casale v Artedomus (Aust) Pty Ltd, note 1 above, at [118]; Coles Supermarkets Australia Pty Ltd v FKP Limited [2008] FCA 1915 at [63]; Kirchner v Gruban [1909] 1 Ch 413 at 422; British Celanese Ltd v Moncreiff, note 575 above, at 578 and Vokes Ltd v Heather, note 534 above, at 141-2. 607. Robb v Green, note 164 above and Secton Pty Ltd v Delawood Pty Ltd (1991) 21 IPR 136 at 14950. 608. For example, Nottingham University v Fishel, note 90 above; Deeson Heavy Haulage Pty Ltd v Cox, note 28 above, and Robb v Green, note 164 above (damages and delivery up of documents). 609. See 15.124. 610. University of Western Australia v Gray, note 22 above, at [161] (‘an employee’s duty of confidence to his or her employer can arise by way of implied contract or as a matter of equitable obligation. The scope of the duty will be the same in both cases despite their different conceptual origins’: per Lindgren, Finn and Bennett JJ); Concut Pty Ltd v Worrell, note 79 above, at [26]; United Sterling Corporation Ltd v Felton, note 160 above, at 414-15 and P Finn, Fiduciary Obligations, note 29 above, pp 132-4. 611. P Finn, Fiduciary Obligations, note 29 above, p 134 and GD Searle & Co Ltd v Celltech Ltd, note 422 above, at 105. 612. University of Western Australia v Gray, note 22 above, at [161]–[162] and Mense v Milenkovic [1973] VR 784 at 789. 613. Deta Nominees Pty Ltd v Viscount Plastic Products Pty Ltd [1979] VR 167 at 191. See 15.41. 614. The purpose of the provisions are discussed in ASIC v Vizard (2005) 145 FCR 57; 219 ALR 714; [2005] FCA 1037 at [27]–[29]. Their legislative history is charted in J Kirby, ‘The History and Development of the Conflict and Profit rules in Corporate Law — A Review’ (2004) 22 C & S LJ 259 at 264–9. 615. The meaning of the terms ‘improper’ and ‘to’ is discussed in 7.51. 616. Rosetex Company Pty Ltd v Licata, note 257 above, at 784; Futuretronics.com.au Pty Ltd v Graphix La-Bels Pty Ltd (2009) 81 IPR 1 at [44]–[46]; AG Australia Holdings Ltd v Burton (2002) 58 NSWLR 464; [2002] NSWSC 170 at [123]; Rosetex Company Pty Ltd v Licata, note 257 above, at 784; Dais Studio Pty Ltd v Bullet Creative Pty Ltd (2007) 165 FCR 92; 74 IPR 512 at [101]–[108]; Forkserve Pty Ltd v Pacchiarotta (2000) 50 IPR 74; [2000] NSWSC 979 at [28]– [29] and Deeson Heavy Haulage Pty Ltd v Cox, note 28 above, at [134]–[136]. 617. Hydrocool Pty Ltd v Hepburn (No 4), note 207 above, at [355]; McNamara v Flavel (1988) 13 ACLR 619 at 625 and ASIC v Somerville (2009) 77 NSWLR 110; 259 ALR 574; [2009] NSWSC 934 at [39]. 618. Rosetex Company Pty Ltd v Licata, note 257 above, at 784; Manildra Laboratories Pty Ltd v Campbell, note 25 above, at [131]; Del Casale v Artedomus (Aust) Pty Ltd, note 1 above, at [60] and Dais Studio Pty Ltd v Bullet Creative Pty Ltd, note 616 above, at [101]–[108]. 619. Blackmagic Design Pty Ltd v Overliese, note 96 above, at [90] (aff’d (2011) 191 FCR 1; 276 ALR 646). 620. Some of the many meanings of the term ‘trade secret’ are discussed in Del Casale v Artedomus (Aust) Pty Ltd, note 1 above, at [108]–[137]. See also GlaxoSmithKline Australia Pty Ltd v Ritchie, note 451 above, at [50]. 621. See generally F Gurry, Breach of Confidence, note 162 above, pp 66–7.

622. See 16.44. 623. Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2), note 298 above, CLR at 438; ALR at 208. 624. Australian Broadcasting Corp v Lenah Game Meats Pty Ltd (2001) 208 CLR 199; 185 ALR 1 at [30]; Coco v A N Clark (Engineers) Ltd [1968] FSR 415 at 419; Del Casale v Artedomus (Aust) Pty Ltd, note 1 above, at [36] and [102]; Optus Networks Pty Ltd v Telstra Corporation Ltd, note 605 above, at [38] and Australian Medic-Care Co Ltd v Hamilton Pharmaceutical Pty Ltd (2009) 261 ALR 501; [2009] FCA 1220 at [629]–[638]. 625. Saltman Engineering Co Ltd v Campbell Engineering Co Ltd [1963] 3 All ER 413 at 414; Robb v Green, note 1 above, at 10–1; Del Casale v Artedomus (Aust) Pty Ltd, note 1 above, at [76]; Bents Brewery Co Ltd v Hogan [1945] 2 All ER 570 at 576; Woolworths Ltd v Olson, note 30 above, at [218] (aff’d [2004] NSWCA 372); Kirchner v Gruban, note 606 above, at 422; Scruples Imports Pty Ltd v Crabtree & Evelyn Pty Ltd (1983) 1 IPR 315 at 328 and Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd, note 39 above, at 40. 626. Del Casale v Artedomus (Aust) Pty Ltd, note 1 above, at [32] and [76]–[77] and Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd, note 39 above, at 40. See also 7.56. 627. Wessex Dairies Ltd v Smith, note 155 above, at 88 (term implied when express term void in restraint of trade); Triplex Safety Glass Co Ltd v Scorah (1938) 55 RPC 21 at 28 (term when express term void in restraint of trade); Financial Integrity Group Pty Ltd v Farmer [2009] ACTSC 143 (terms implied when express terms contrary to statute); Thomas Marshall (Exports) Ltd v Guinle, note 342 above, Ch at 245–6; All ER at 207–8 (equitable obligation prohibited use of confidential information when express term only prohibited disclosure of confidential information) and Secton Pty Ltd v Delawood Pty Ltd, note 607 above, at 152. 628. Potters-Ballotini v Weston-Baker [1977] RPC 202 at 205 and 211; cf British Industrial Plastics v Ferguson [1939] 4 All ER 504 at 508 (contract protected confidential information until March, but was a breach of the equitable duty of confidence to reveal the information in June). 629. For example, GD Searle & Co Ltd v Celltech Ltd, note 422 above, at 105. See 7.124. 630. Maggbury Pty Ltd v Hafele Australia Pty Ltd, note 605 above, at [45]. 631. Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317 at 333 (confidential information) and Drake Personnel Ltd v Beddison [1979] VR 13 at 20 (trade secret). 632. See further at 16.38–16.40; Intelsec Systems Ltd v Grech-Cini [1999] 4 All ER 11 at 25–6 and Drake Personnel Ltd v Beddison, note 631 above, at 19–20. Such terms may also be unenforceable for other reasons, such as being contrary to public policy: A v Hayden (No 2) (1984) 156 CLR 532 at 543–4 and 553–7; 56 ALR 82 at 87 and 94–8 and AG Australia Holdings Ltd v Burton, note 616 above, at [194]. 633. See, for example, Intelsec Systems Ltd v Grech-Cini, note 632 above, at 25–6. 634. Faccenda Chicken Ltd v Fowler [1987] Ch 117 at 137; [1986] 1 All ER 617 at 626. If the express term only applied to trade secrets then it would be redundant as the implied contractual and equitable obligations already protect the employer from the use or disclosure of such information: Balston Ltd v Headline Filters Ltd (No 1) [1987] FSR 330 at 348. 635. Wright v Gasweld Pty Ltd, note 631 above, at 335 and 339–41; Cactus Imaging Pty Ltd v Peters (2006) 71 NSWLR 9; [2006] NSWSC 717 at [12]; AIM Maintenance Ltd v Brunt (2004) 28 WAR 357; 60 IPR 572; [2004] WASC 49 at [73]; Balston Ltd v Headline Filters Ltd (No 1), note 634 above, at 347; Del Casale v Artedomus (Aust) Pty Ltd, note 1 above, at [139]–[141] and J Heydon, The Restraint of Trade Doctrine, 3rd ed, LexisNexis Butterworths, Australia, 2008, p 77.

636. The clause was invalid under the common law but, as modified by the Restraints of Trade Act 1976 (NSW), it was valid. 637. Wright v Gasweld Pty Ltd, note 631 above, at 333. 638. See F Gurry, Breach of Confidence, note 162 above, pp 65–6. 639. A duty may also arise by reason of the subject matter of the communication and the circumstances in which it is communicated. This alternative ground is not considered further. See P Finn, Fiduciary Obligations, note 29 above, pp 143–5. 640. See the dicta in Australia Meat Holdings Pty Ltd v Kazi [2004] 2 Qd R 458; [2004] QCA 147 at [38]. 641. University of Western Australia v Gray, note 22 above, at [162]; Merryweather v Moore, note 39 above, at 524; Robb v Green, note 1 above, at 10–11 and on appeal at [1895] 2 QB 315; Measures Bros Ltd v Measures [1910] 1 Ch 336 at 343 (aff’d [1910] 2 Ch 248); Bents Brewery Co Ltd v Hogan, note 625 above, at 576 and Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd, note 39 above, at 40. 642. P Finn, Fiduciary Obligations, note 29 above, p 140; Del Casale v Artedomus (Aust) Pty Ltd, note 1 above, at [32] and [48], and 7.34–7.36. 643. See further at 7.5–7.11; Ormonoid Roofing and Asphalts Ltd v Bitumenoids Ltd, note 39 above, at 359; Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd, note 39 above, at 42–3; Merryweather v Moore, note 39 above, at 524 and Able Tours Pty Ltd v Mann, note 28 above, at [54] (aff’d [2010] WASCA 59). Section 183 of the Corporations Act imposes the obligation when an employee ‘obtains information because they are’ an employee. 644. Cranleigh Precision Engineering Ltd v Bryant, note 304 above, WLR at 1319; All ER at 302 and Able Tours Pty Ltd v Mann, note 28 above, at [54] (aff’d [2010] WASCA 59). 645. Ormonoid Roofing and Asphalts Ltd v Bitumenoids Ltd, note 39 above, at 359 (discussed in more detail at 7.11); Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd, note 39 above, at 42–3 and Merryweather v Moore, note 39 above, at 524. 646. Rishmont Pty Ltd v Tweed City Medical Centre, note 479 above, at [10]–[17]. 647. Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) (1987) 14 FCR 434 at 443; 74 ALR 428 at 437–8; Smith Kline & French Laboratories (Aust) Ltd v Department of Community Services and Health (1990) 22 FCR 73 at 86–7 (aff’d (1991) 28 FCR 291; 99 ALR 679); FSS Travel and Leisure Systems Ltd v Johnson [1999] FSR 505 at 512–6; O’Brien v Komesaroff (1982) 150 CLR 310 at 326–7; 41 ALR 255 at 263; Deeson Heavy Haulage Pty Ltd v Cox, note 28 above, at [230]–[232] and Cactus Imaging Pty Ltd v Peters, note 635 above, at [14] (arising from express term). 648. Faccenda Chicken Ltd v Fowler, note 634 above, Ch at 136–8; All ER at 625–7; Brooks v Olyslager Oms (UK) Ltd [1998] IRLR 590 and GlaxoSmithKline Australia Pty Ltd v Ritchie, note 451 above, at [38]. 649. Pioneer Concrete Services Ltd v Galli [1985] VR 675 at 710–1; Littlewoods Organization Limited v Harris [1977] 1 WLR 1472 at 1479 and Cactus Imaging Pty Ltd v Peters, note 635 above, at [14]. 650. Lawrence David Ltd v Ashton [1991] 1 All ER 385 at 393; [1989] ICR 123 at 132 per Balcombe LJ; O’Brien v Komesaroff, note 647 above, CLR at 326–7; ALR at 263; Health Services for Men Pty Ltd v D’Souza (2000) 48 NSWLR 448; [2000] NSWCA 56 at [51]–[52]; Pioneer Concrete Services Ltd v Galli, note 649 above, at 710–1; Thomas Marshall (Exports) Ltd v Guinle, note

342 above, Ch at 248; All ER at 209–10 and Cactus Imaging Pty Ltd v Peters, note 635 above, at [14]. See also 15.66. 651. Mense v Milenkovic, note 612 above, at 796–8; Australian Medic-Care Co Ltd v Hamilton Pharmaceutical Pty Ltd, note 624 above, at [633]–[638]; Dais Studio Pty Ltd v Bullet Creative Pty Ltd, note 616 above, at [65]; Wright v Gasweld Pty Ltd, note 631 above, at 333–4; Del Casale v Artedomus (Aust) Pty Ltd, note 1 above, at [40] and [138]; R Dean, The Law of Trade Secrets and Personal Secrets, note 234 above, p 190; P Finn, Fiduciary Obligations, note 29 above, pp 148–9. 652. Deta Nominees Pty Ltd v Viscount Plastic Products Pty Ltd, note 613 above, at 193 per Fullagar J. 653. Deta Nominees Pty Ltd v Viscount Plastic Products Pty Ltd, note 613 above, at 191; Secton Pty Ltd v Delawood Pty Ltd, note 607 above, at 151 and Coco v A N Clark (Engineers) Ltd, note 624 above, at 420–1. 654. Mense v Milenkovic, note 612 above, at 801 per McInerney J; Johns v Australian Securities Commission (1993) 178 CLR 408 at 433, 438, 460–1; 116 ALR 567 at 581–2, 585, 603–4; Attorney-General v Times Newspapers [2001] 1 WLR 885 and O’Brien v Komesaroff, note 647 above, CLR at 326–7; ALR at 263. Various expressions have been used to describe information in the public domain, including public knowledge, common knowledge and publicly known: R Dean, The Law of Trade Secrets and Personal Secrets, note 234 above, p 80. 655. Interfirm Comparison (Aust) Pty Ltd v Law Society of New South Wales, note 300 above, at 117– 20 and Franchi v Franchi [1967] RPC 149 at 153. 656. Aquaculture Corp v New Zealand Green Mussel Co Ltd (1991) 19 IPR 327 at 378–9. See also Dais Studio Pty Ltd v Bullet Creative Pty Ltd, note 616 above, at [81]–[88]. 657. Saltman Engineering Co Ltd v Campbell Engineering Co Ltd, note 625 above, at 415 per Lord Greene MR; Cranleigh Precision Engineering Ltd v Bryant, note 304 above, WLR at 1310; All ER at 295; Fractionated Cane Technology Ltd v RuizAvila [1988] 1 Qd R 51 at 63 (aff’d [1988] 2 Qd R 610 at 617–8); Under Water Welders & Repairers Ltd v Street [1967] FSR 194 at 201–2; Deeson Heavy Haulage Pty Ltd v Cox, note 28 above, at [213]–[216]; Tabor v Hoffman (1889) 118 NY 30 discussed in Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd, note 39 above, at 43 and G S Clarke, ‘Confidential Information and Trade Secrets: When is a Trade Secret in the Public Domain?’ (2009) 83 ALJ 242 at 250–1. 658. Warman International Ltd v Envirotech Australia Pty Ltd (1986) 11 FCR 478; 67 ALR 253; Under Water Welders & Repairers Ltd v Street, note 657 above, at 201 and 204; Print Investments Pty Ltd v Art-Vue Printing Ltd (1983) 8 IR 385 at 388; NP Generations Pty Ltd v Feneley, note 300 above, at [11]; Southern Cross Financial Group (Newcastle) Pty Ltd v Rodrigues (2005) 66 IPR 166; [2005] NSWSC 621 at [61]–[63]; Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd, note 39 above, at 46 and Dais Studio Pty Ltd v Bullet Creative Pty Ltd, note 616 above, at [72]–[75]. 659. Print Investments Pty Ltd v Art-Vue Printing Ltd, note 658 above, at 388; United Sterling Corporation Ltd v Felton, note 160 above, at 415 and 422–3; E Worsley & Co Ltd v Cooper [1939] 1 All ER 290 at 307; GD Searle & Co Ltd v Celltech Ltd, note 422 above, at 102; Dais Studio Pty Ltd v Bullet Creative Pty Ltd, note 616 above, at [88]–[91]; NP Generations Pty Ltd v Feneley, note 300 above, at [11] and Mid-Skin Cancer and Laser Centre Pty Ltd v ZahediAnarak, note 233 above, at [138]–[142]. 660. O Mustad & Son v S Allcock & Co Ltd, note 601 above, at 418; Westpac Banking Corporation v John Fairfax Group Pty Ltd (1991) 19 IPR 513 at 524–5 and Print Investments Pty Ltd v Art-Vue

Printing Ltd, note 658 above, at 389. 661. Berkeley Administration Inc v McClelland [1990] FSR 505 at 527 (publication in the financial press); Flamingo Park Pty Ltd v Dolly Dolly Creation Pty Ltd (1986) 65 ALR 500 at 518 (author of design published the information herself); O Mustad & Son v S Allcock & Co Ltd, note 601 above, at 418; Fractionated Cane Technology Ltd v RuizAvila, note 657 above, at 68 (aff’d [1988] 2 Qd R 610); Franchi v Franchi, note 655 above, at 152; ANI Corporation Ltd v Celtite Australia Pty Ltd (1990) 19 IPR 506 at 510–1; Prout v British Gas Plc, note 557 above, at 482 (loss of confidentiality after publication in patent application); Deeson Heavy Haulage Pty Ltd v Cox, note 28 above, at [237] (offering the computer program for sale) and Rosewood Advertising Pty Ltd v Hannah Advertising Pty Ltd [2000] NSWSC 1034 at [11] (publication of customer lists on the internet); cf Maggbury Pty Ltd v Hafele Australia Pty Ltd, note 605 above, at [49]–[50] which concerned the effect of publication of a patent on an express contractual right to confidentiality. 662. Warman International Ltd v Envirotech Australia Pty Ltd, note 658 above, at 496–7; Aquaculture Corp v New Zealand Green Mussel Co Ltd, note 656 above, at 378–9 and B O Morris Ltd v F Gilman (BST) Ltd (1943) 60 RPC 20 at 25. See also Drake Personnel Ltd v Beddison, note 631 above, at 21 (whether duty of confidence owed to clients rendered the information a trade secret). 663. Aquaculture Corp v New Zealand Green Mussel Co Ltd, note 656 above, at 379–81. 664. Exchange Telegraph Co Ltd v Central News Ltd [1897] 2 Ch 48; Exchange Telegraph Co Ltd v Gregory & Co [1896] 1 QBD 147; Exchange Telegraph Co Ltd v Howard (1906) 22 TLR 375; G v Day [1982] 1 NSWLR 24 at 40–1 (publication by television stations did not result in the loss of confidentiality: a case decided before the advent of YouTube); Australian Football League v The Age (2006) 15 VR 419; [2006] VSC 308 at [52]–[56] (a personal secrets case concerning speculative gossip, innuendo and assertion by unknown persons on the websites) and Aquaculture Corp v New Zealand Green Mussel Co Ltd, note 656 above, at 378–9. 665. See, for example, Cranleigh Precision Engineering Ltd v Bryant, note 304 above, WLR at 1310– 1; All ER at 295–6; Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd, note 39 above, at 43–5; Under Water Welders & Repairers Ltd v Street, note 657 above, at 202–3; Coco v A N Clark (Engineers) Ltd, note 624 above, at 420; Chenel Pty Ltd v Rayner (1994) 28 IPR 638 (unusual combination of ingredients to create salads) and Johnson & Bloy (Holdings) Ltd v Wolstenholme Rink plc and Fallon [1989] 1 FSR 135 at 140. 666. Robb v Green, note 1 above, at 18–19 and International Scientific Communications Inc v Pattison, note 235 above, at 434. 667. See, for example, Blackmagic Design Pty Ltd v Overliese, note 96 above, at [76] (aff’d (2011) 191 FCR 1; 276 ALR 646). 668. Deeson Heavy Haulage Pty Ltd v Cox, note 28 above, at [233]–[244]; Ocular Sciences Ltd v Aspect Vision Care Ltd [1997] RPC 289 at 375 and E Worsley & Co Ltd v Cooper, note 659 above, at 307. 669. Wright v Gasweld Pty Ltd, note 631 above, at 333 and 339; Stephens v Avery [1988] Ch 449 at 454; Coco v A N Clark (Engineers) Ltd, note 624 above, at 421; Coulthard v State of South Australia, note 300 above, at 547 and Dais Studio Pty Ltd v Bullet Creative Pty Ltd, note 616 above, at [66]–[71]. 670. Faccenda Chicken Ltd v Fowler, note 634 above, Ch at 133; All ER at 623. 671. NP Generations Pty Ltd v Feneley, note 300 above, at [11]; Ecrosteel Pty Ltd v Perfor Printing Pty Ltd, note 405 above, at 33 and GlaxoSmithKline Australia Pty Ltd v Ritchie, note 451 above,

at [199]. 672. Nicrotherm Electrical Co Ltd v Percy [1956] RPC 272 at 273 (aff’d [1957] RPC 207). 673. Fractionated Cane Technology Ltd v RuizAvila, note 657 above, at 63 (aff’d [1988] 2 Qd R 610 at 617–8) and Digital Pulse Pty Limited v Harris, note 236 above, at [92] (business plan) (appeal at (2003) 56 NSWLR 298). 674. Secton Pty Ltd v Delawood Pty Ltd, note 607 above, at 156; Fraser v Thames Television Ltd [1984] QB 44 at 64–6 and Fractionated Cane Technology Ltd v RuizAvila, note 657 above, at 63. 675. Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd, note 39 above, at 41; Printers and Finishers Ltd v Holloway [1964] 1 WLR 1 at 6; [1964] 3 All ER 731 at 736. 676. Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd, note 39 above, at 41; Amber Size and Chemical Co Ltd v Menzel [1913] 2 Ch 239 at 246; cf the approach taken in Johnson & Bloy (Holdings) Ltd v Wolstenholme Rink plc and Fallon, note 665 above, at 141–2 and Roger Bullivant Ltd v Ellis [1987] ICR 464. 677. British American Tobacco Australia Ltd v Gordon [2007] NSWSC 230 at [18]–[30]. 678. Thomas Marshall (Exports) Ltd v Guinle, note 342 above, Ch at 246–8; All ER at 207–9 and Secton Pty Ltd v Delawood Pty Ltd, note 607 above, at 152. 679. Talbot v General Television Corp Pty Ltd [1980] VR 224 at 233–4 and 238–9 and Seager v Copydex Ltd [1967] 2 All ER 415 at 417. 680. Printers and Finishers Ltd v Holloway, note 675 above, WLR at 5–6; All ER at 735–6; United Indigo Chemical Co Ltd v Robinson (1931) 49 RPC 178 at 187 and E Worsley & Co Ltd v Cooper, note 659 above, at 309. See further 16.44. 681. NP Generations Pty Ltd v Feneley, note 300 above, at [18]–[20]; Torrington Manufacturing Co v Smith & Sons (England) Ltd, note 300 above, at 301; Interfirm Comparison (Aust) Pty Ltd v Law Society of New South Wales, note 300 above, at 117; Coulthard v State of South Australia, note 300 above, at 548–50, F Gurry, Breach of Confidence, note 162 above, pp 113–5, Ormonoid Roofing and Asphalts Ltd v Bitumenoids Ltd, note 39 above, at 359–60; Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd, note 39 above, at 43 and Lac Minerals Ltd v International Corona Resources Ltd, note 300 above, at 36–7. Note the reservations on the use of this test stated in Smith Kline & French Laboratories (Aust) Ltd v Secretary, Department of Community Services, note 300 above, FCR at 302–4; ALR at 690–2. 682. NP Generations Pty Ltd v Feneley, note 300 above, at [18]–[25]; Robb v Green, note 164 above; Wessex Dairies Ltd v Smith, note 155 above and Mid-Skin Cancer and Laser Centre Pty Ltd v Zahedi-Anarak, note 233 above, at [148]–[154]. See 7.58. 683. See 16.48. 684. Heine Bros (Australia) Pty Ltd v Forrest [1963] VR 383 at 388; ICAP Australia Pty Ltd v BGC Partners (Australia) Pty Ltd (2005) 139 IR 293; [2005] FCA 130 at [67]; Interfirm Comparison (Aust) Pty Ltd v Law Society of New South Wales, note 300 above, at 121; Forkserve Pty Ltd v Pacchiarotta, note 616 above, at [9]–[10] and Deeson Heavy Haulage Pty Ltd v Cox, note 28 above, at [217]–[224] (confidential data was transferred by the employee to the new business but was not used as it was corrupted during the transfer). 685. Surveys & Mining Ltd v Morrison, note 305 above, at 474–6. 686. Amber Size and Chemical Co Ltd v Menzel, note 676 above, at 246 and 248. 687. Co-ordinated Industries Pty Ltd v Elliott, note 352 above, at 288; D Hodgson, ‘The Scales of

Justice: Probability and Proof in Legal Fact-finding’ (1995) 69 ALJ 731 at 750; GlaxoSmithKline Australia Pty Ltd v Ritchie, note 451 above, at [130] and [169] and AC Gibbons Pty Ltd v Cooper (1980) 23 SASR 269. 688. See 7.51. 689. Smith Kline & French Laboratories (Aust) Ltd v Secretary, Department of Community Services, note 300 above, FCR at 304; 99 ALR at 692. 690. Coco v A N Clark (Engineers) Ltd [1969] RPC 41 at 47. 691. Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd, note 624 above, ALR at [30] and Deeson Heavy Haulage Pty Ltd v Cox, note 28 above, at [251]. The statutory duty of confidence established by s 183 of the Corporations Act requires that the information be improperly used to either gain an advantage for the employee, or another or cause detriment to the employer. 692. Smith Kline & French Laboratories (Aust) Ltd v Department of Community Services and Health, note 647 above, at 111–2 (aff’d (1991) 28 FCR 291; 99 ALR 679). See also NP Generations Pty Ltd v Feneley, note 300 above, at [18]–[25]; Dunford & Elliott Ltd v Johnson & Firth Brown Ltd [1978] FSR 143; National Roads and Motorists’ Association Ltd (NRMA) v Geeson, note 340 above, at [26]–[34]. 693. Attorney-General v Observer Ltd [1990] 1 AC 109 at 255–6 and 281–2; [1988] 3 All ER 545 at 638–9 and 658; Commonwealth v John Fairfax & Sons Ltd (1980) 147 CLR 39 at 51–2; 32 ALR 485 at 492–3 and R Toulson and C Phipps, Confidentiality, Sweet & Maxwell, London, 1996, p 73. 694. See cases at note 692 above. 695. See 7.125–7.128. 696. Tournier v National Provincial & Union Bank of England [1924] 1 KB 461 at 473; Smorgon v Australia & New Zealand Banking Group Ltd (1976) 134 CLR 475 at 486–9. 697. D v National Society for Prevention of Cruelty to Children [1978] AC 171 at 218, 230 and 241; [1977] 1 All ER 589 at 594–5, 604–5 and 614–5. On the obligation of employees to answer subpoenas for the production of documents, see James v Cowan; Re Botten (1929) 42 CLR 305 and Rochfort v Trade Practices Commission (1982) 153 CLR 134; 43 ALR 659; on the public interest privilege, see Grant v Downs (1976) 135 CLR 674 and Sankey v Whitlam (1978) 142 CLR 1 at 38–46, 56–66 and 95–9; 21 ALR 505 at 525–32, 540–8 and 570–4. 698. British American Tobacco Australia Ltd v Gordon, note 677 above, at [18]–[30]; AG Australia Holdings Ltd v Burton, note 616 above and Brandeaux Advisers (UK) Limited v Chadwick, note 94 above, at [17]–[23]. 699. A v Hayden (No 2), note 632 above, CLR at 571–2; ALR at 109–10. 700. Report of the Inquiry into Whistleblowing Protection, House of Representatives Standing Committee on Legal and Constitutional Affairs, AGPS, 2009, Ch 1. See, for example, Corporations Act 2001 (Cth) Pt 9; Public Interest Disclosure Act 1994 (ACT); Protected Disclosures Act 1994 (NSW); Public Interest Disclosure Act 2008 (NT); Whistleblowers Protection Act 1994 (Qld); Whistleblowers Protection Act 1993 (SA); Public Interest Disclosures Act 2002 (Tas); Whistleblowers Protection Act 2001 (Vic); Public Interest Disclosure Act 2003 (WA). See also D Lewis, ‘Employment Protection for Whistleblowers: on What Principles Should Australian Legislation be Based?’ (1996) 9 AJLL 135. 701. See He v Lewin (2004) 137 FCR 241; 133 IR 217; [2004] FCAFC 161 and Zhang v Royal

Australian Chemical Institute Inc (2005) 144 FCR 347; [2005] FCAFC 99. 702. See P Finn, Official Information, Integrity in Government Project: Interim Report 1, AGPS, 1991, at 204; Bennett v Human Rights and Equal Opportunity Commission, note 158 above, at [125] and Fraser v Public Service Staff Relations Board, note 209 above. 703. See Corrs Pavey Whiting & Byrne v Collector of Customs (Vic), note 647 above, FCR at 454–6; ALR at 449–50 and AG Australia Holdings Ltd v Burton, note 616 above, at [177]–[191]. 704. See Smith Kline & French Laboratories (Aust) Ltd v Secretary, Department of Community Services (1989) 22 FCR 73 at 110–11 (aff’d (1991) 28 FCR 291; 99 ALR 679); Castrol Australia Pty Ltd v EmTech Assocs Pty Ltd (1980) 51 FLR 184 at 211–16 and R Meagher et al, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies, 4th ed, LexisNexis Butterworths, Australia, 2002, pp 1133–4. 705. See, for example, A v B (a company) [2003] QB 195; Campbell v Frisbee [2002] EWCA 134; L Vickers, Freedom of Speech and Employment, Oxford University Press, Oxford, 2001, Ch 5 and R Allen and R Crasnow, Employment Law and Human Rights, Oxford University Press, Oxford, 2002, Ch 10. 706. Corrs Pavey Whiting & Byrne v Collector of Customs (Vic), note 647 above, FCR at 456; ALR at 450 applied in AG Australia Holdings Ltd v Burton, note 616 above, at [175]–[176]. 707. Gartside v Outram (1856) 26 LJ Ch 113 at 114 per Wood VC (‘You cannot make me the confidant of a crime or fraud, and be entitled to close up my lips upon any secret which you have the audacity to disclose to me relating to any fraudulent intention on your part: such a confidence cannot exist’). The other reports of the decision do not include this phrase: see Corrs Pavey Whiting & Byrne v Collector of Customs (Vic), note 647 above, FCR at 452–4; ALR at 446–7 and A v Hayden (No 2), note 632 above, CLR at 544–5; ALR at 88. 708. Iniquity as a defining factor in determining the scope of the duty of confidence will not be relevant where the scope is defined in an express term of the contract: Corrs Pavey Whiting & Byrne v Collector of Customs (Vic), note 647 above, FCR at 456; ALR at 450 and AG Australia Holdings Ltd v Burton, note 616 above, at [175]–[176]. 709. Corrs Pavey Whiting & Byrne v Collector of Customs (Vic), note 647 above, FCR at 456; ALR at 450; Australian Football League v The Age, note 664 above, at [67]–[71]; A v Hayden (No 2), note 632 above, CLR at 545; ALR at 88 (‘serious crimes’); Beloff v Pressdram Ltd [1973] 1 All ER 241 at 260 (‘in breach of the country’s security, or in breach of law, including statutory duty, fraud, or otherwise destructive of the country or its people, including matters medically dangerous to the public; and doubtless other misdeeds of similar gravity’), approved in Castrol Australia Pty Ltd v EmTech Assocs Pty Ltd, note 704 above, at 213–14 and Thomson v Broadley [2002] QSC 255 at [27]. On whether misleading and deceptive conduct is iniquity in this sense, see Allied Mills Industries Pty Ltd v Trade Practices Commission (1981) 55 FLR 125 at 143 and 166 and AG Australia Holdings Ltd v Burton, note 616 above, at [192]–[194]. 710. David Syme & Co Ltd v General Motors-Holden’s Ltd [1984] 2 NSWLR 294 at 305–6; Castrol Australia Pty Ltd v EmTech Assocs Pty Ltd, note 704 above, at 213–5; Smith Kline & French Laboratories (Aust) Ltd v Secretary, Department of Community Services, note 704 above, at 110– 11 (aff’d (1991) 28 FCR 291; 99 ALR 679); Bacich v Australian Broadcasting Corporation (1992) 29 NSWLR 1 at 16; A v Hayden (No 2), note 632 above, CLR at 545 and 560; ALR at 88 and 99; Australian Football League v The Age, note 664 above, at [67]–[71] and [80]–[83] and Sullivan v Sclanders (2000) 77 SASR 419; [2000] SASC 273 at [41]–[46] and [66]–[71]. 711. See Woodward v Hutchins [1977] 1 WLR 760 at 764 and Allied Mills Industries Pty Ltd v Trade Practices Commission, note 709 above. See generally L Vickers, Freedom of Speech and

Employment, Oxford University Press, Oxford, 2001, Ch 4. 712. AG Australia Holdings Ltd v Burton, note 616 above, at [203]. 713. Corrs Pavey Whiting & Byrne v Collector of Customs (Vic), note 647 above, FCR at 456; ALR at 450 and Australian Football League v The Age, note 664 above, at [67] endorsing the view of F Gurry, Breach of Confidence, note 162 above, p 345. 714. A v Hayden (No 2), note 632 above and AG Australia Holdings Ltd v Burton, note 616 above, at [194]. 715. A v Hayden (No 2), note 632 above, CLR at 545 per Gibbs CJ and at 560 per Mason J; ALR at 88 and 99; Weld-Blundell v Stephens [1919] 1 KB 520 at 533–4 and 547–8; Corrs Pavey Whiting & Byrne v Collector of Customs (Vic), note 647 above, FCR at 455; ALR at 449; AG Australia Holdings Ltd v Burton, note 616 above, at [194] and Sullivan v Sclanders, note 710 above, at [41]–[46] and [66]–[71]. 716. Johns v Australian Securities Commission, note 654 above, CLR at 461; ALR at 603; Speed Seal Products v Paddington [1986] 1 All ER 91 at 94; Peter Pan Manufacturing Corp v Corsets Silhouette Ltd [1963] RPC 45 at 45 and Secton Pty Ltd v Delawood Pty Ltd, note 607 above, at 167. 717. O Mustad & Son v S Allcock & Co Ltd, note 601 above, at 418. See also Westpac Banking Corporation v John Fairfax Group Pty Ltd, note 660 above, at 524–5; Print Investments Pty Ltd v Art-Vue Printing Ltd, note 658 above, at 389; Maggbury Pty Ltd v Hafele Australia Pty Ltd, note 605 above, at [45]–[48] and Mense v Milenkovic, note 612 above, at 801. 718. G S Clarke, ‘Confidential Information and trade secrets: When is a trade secret in the public domain?’ (2009) 83 ALJ 242 at 248 and Cranleigh Precision Engineering Ltd v Bryant, note 304 above, WLR at 1310–1; All ER at 295–6. 719. Speed Seal Products Ltd v Paddington [1986] 1 All ER 91 at 95. See also Schering Chemicals Ltd v Falkman Ltd, note 296 above. 720. Commonwealth v Walsh (1980) 147 CLR 61; 32 ALR 500 (the confidential information had already been published by Noam Chomsky); Attorney General (UK) v Heinemann Publishers Australia Pty Ltd (1987) 8 NSWLR 341; Speed Seal Products Ltd v Paddington [1986] 1 All ER 91 at 95; compare Westpac Banking Corporation v John Fairfax Group Pty Ltd, note 660 above and Australian Football League v The Age, note 664 above. 721. See R Dean, The Law of Trade Secrets and Personal Secrets, note 234 above, pp 154–6, on the headstart doctrine, see 15.90. 722. See 1.26. 723. R v Inhabitants of Brampton (1777) Cald Mag Cas 11; cf the approach to the powers of magistrates in R v The Inhabitants of Marlborough (1796) 12 Mod 402; 88 ER 1409. 724. Callo v Brouncker, note 76 above, restated the principle and was commonly referred to throughout the nineteenth century. See also C Smith, The Law of Master and Servant, H Sweet, London, 1860, pp 78–9 and R Burn, The Justice of the Peace, 21st ed, A Strahan, London, 1810, Vol V, pp 259–60 which discusses earlier formulations of the notion. 725. On habitual drunkenness see Gordon v Potter (1859) 1 F & F 644; 175 ER 888; Speck v Phillips (1839) 5 M W 279; 151 ER 119; Wise v Wilson (1844) 1 Car K 662; 174 ER 981; on sexual misconduct, see R v Inhabitants of Welford (1778) Cal Mag Cas 57 (fathering a bastard) and Atkin v Acton (1830) 4 Car P 208; 172 ER 673 (dismissal of a salesman who assaulted his employer’s maid servant with ‘an intent to ravish her’); on insolence, Temple v Prescott, note 76

above and Callo v Brouncker, note 76 above. 726. Edwards v Levy (1860) 2 F F 94; 175 ER 974 (music critic); Ridgway v The Hungerford Market Company (1835) 3 A & D 171 (clerk); Proctor v Bacon (1886) 2 TLR 845 (governess); Pearce v Foster (No 2), note 244 above, at 539 (clerk) and Boston Deep Sea Fishing and Ice Company v Ansell, note 164 above, at 363 (managing director). 727. The reference to a ‘conflict between his interest and his duty to his employer’ is a reference to the conflict of duty and interest rule discussed in 7.46–7.47 and the reference to impeding the faithful performance of the obligations may be a reference to the conflict of duties rule discussed in 7.48–7.49. 728. Blyth Chemicals Ltd v Bushnell, note 1 above, at 81–2 per Dixon and McTiernan JJ, and at 72–3 per Starke and Evatt JJ (‘acted in a manner incompatible with the due and faithful performance of his duty, or inconsistent with the confidential relation between himself and the appellant’); Adami v Maison de Luxe Ltd, note 40 above, at 153; Concut Pty Ltd v Worrell, note 79 above, at [25]; Clouston & Co Ltd v Corry [1906] AC 122 at 129; P Finn, Fiduciary Obligations, note 29 above, p 266 and M Freedland, The Contract of Employment, Clarendon Press, Oxford, 1976, pp 214–5. 729. See 8.13. 730. Wright v Groves [2011] QSC 66 at [55]; Perkins v Grace Worldwide (Aust) Pty Ltd (1997) 72 IR 186 at 191; Malik v Bank of Credit and Commerce International SA [1998] AC 20 at at 35 and 45; [1997] 3 All ER 1 at 6 and 15 and Concut Pty Ltd v Worrell, note 79 above, at [51]. There remain some doubts about whether the duty is mutual: Warren v Dickson [2011] NSWSC 79 at [41] and Walker v Zurich Australia Insurance Ltd, note 56 above, at [53] (aff’d on other grounds [2001] QCA 296). 731. See Concut Pty Ltd v Worrell, note 79 above, at [25] and fn 20 to that judgment; Rose v Telstra (1998) 45 AILR 3-966 at [20]; Randall v Aristocrat Leisure Limited, note 62 above, at [448] and Wright v Groves, note 730 above, at [55]. See also Delooze v Healey [2007] WASCA 157 at [32]. 732. See R McCallum, Employer Controls over Private Life, UNSW Press, Sydney, 2000 and McManus v Scott-Charlton, note 16 above, FCR at 29; ALR at 636. 733. Appellant v Respondent (1999) 89 IR 407 at 413 and 416. Some of the obligations imposed by the duty of fidelity may persist, for example, an employee will breach the contract by accepting a bribe outside of hours or misusing confidential information on the weekend. 734. McManus v Scott-Charlton, note 16 above, FCR at 29; ALR at 636 and Rose v Telstra, note 731 above, at [20]. 735. Contrast Civil Service Association of Western Australia Inc v Director General of Department for Community Development [2002] WASCA 241 with Appellant v Respondent, note 733 above. 736. Compare Newman v Alarmco Ltd [1976] IRLR 45; Spiler v Wallis Ltd [1975] IRLR 362 with Moreton Bay College v Teys, note 13 above, at [58] and Walker v Zurich Australia Insurance Ltd, note 56 above, at [46] (aff’d on other grounds [2001] QCA 296). 737. A McKee et al, The Porn Report, Melbourne University Press, Melbourne, 2008, p 25. 738. Australian Institute of Health and Welfare, 2010 National Drug Strategy Household Survey Report, Canberra, 2011. 739. Woolworths Ltd v Brown, note 35 above, at [27] and Farquharson v Qantas Airways Ltd (2006) 155 IR 22. See also Robins v Sir Charles Gairdner Hospital (1999) 95 IR 27 where the employee was found to be in wilful breach of his contract when he intended to, but did not, smoke

marijuana at work. 740. Clouston & Co Ltd v Corry, note 728 above, at 129 and Rose v Telstra, note 731 above. 741. See generally McManus v Scott-Charlton, note 16 above, FCR at 29; ALR at 637; Clouston & Co Ltd v Corry, note 728 above, at 129 and Civil Service Association of Western Australia Inc v Director General of Department for Community Development, note 735 above, at [19]. 742. Coward v Gunns Veneer Proprietary Ltd, note 108 above. 743. See Civil Service Association of Western Australia Inc v Director General of Department for Community Development, note 735 above, at [19]; Appellant v Respondent, note 733 above, at 413–4; Farquharson v Qantas Airways Ltd, note 739 above and Graincorp Operations Ltd v Markham (2002) 120 IR 253. 744. Hussein v Westpac Banking Corporation (1995) 59 IR 103; Henry v Ryan [1963] Tas SR 90 at 91 and Appellant v Respondent, note 733 above, at 414 and 416. Compare Orr v University of Tasmania (1957) 100 CLR 526 at 530 with Chambers v James Cook University (1995) 61 IR 121 at 143. 745. Appellant v Respondent, note 733 above, at 413 (drug dealing, pedophilia and public exposure were given as examples). See also Pearce v Foster (No 2), note 244 above, at 539 where the court spoke of an act ‘so grossly immoral that all reasonable men would say that he cannot be trusted’. 746. See Wickham v Commissioner of Police, note 108 above (if the private conduct of an employee is alleged to be a breach then ‘it must be of such a heinous type as, manifestly, to render it untenable that the perpetrator of it be retained’). 747. See 8.21. 748. Moreton Bay College v Teys, note 13 above, at [58] and Walker v Zurich Australia Insurance Ltd, note 56 above, at [46] (aff’d on other grounds [2001] QCA 296). 749. See Wall v Westcott (1982) 1 IR 252 at 254–6 (employee believed the employer had sex with the employee’s wife, and to ‘get even’ he had sex with the employer’s wife); Orr v University of Tasmania, note 744 above, at 530; Thomas v Westpac Banking Corporation (1995) 62 IR 28 and Kalouche v Legion Cabs (Trading) Co-operative Society Ltd (1998) 81 IR 415 (manager sexually harassed a job applicant after hours). 750. Civil Service Association of Western Australia Inc v Director General of Department for Community Development, note 735 above, at [19] and Appellant v Respondent, note 733 above, at 413–4. 751. McManus v Scott-Charlton, note 16 above, FCR at 27; ALR at 634–5. 752. See, for example, Newman v Alarmco Ltd, note 736 above and Spiler v Wallis Ltd, note 736 above. Even greater caution should be exercised before applying cases where the findings of misconduct reflect discarded mores: R v Inhabitants of Brampton, note 723 above (becoming pregnant) and R v Inhabitants of Welford, note 725 above (fathering a bastard). 753. Clouston & Co Ltd v Corry, note 728 above, at 129. 754. Pearce v Foster (No 2), note 244 above, at 539 and Hussein v Westpac Banking Corporation, note 744 above, at 105–7. 755. Commissioner of Railways (NSW) v O’Donnell (1938) 60 CLR 681 at 689, 691 and 698. 756. Jupiter General Insurance v Shroff, note 152 above, at 73–4 per Lord Maugham. As to abuse by employers, see Isle of Wight Tourist Board v JJ Coombes [1976] IRLR 413 (‘she is an intolerable

bitch on a Monday morning’); Courtaulds Northern Textiles Ltd v Andrews [1979] IRLR 84 (‘You can’t do the bloody job anyway’) and Moores v Bude-Stratton Town Council [2000] IRLR 676 (‘a lying toe-rag’). 757. Traditionally a head gardener held an elevated office in the household of a master because he or she was obliged to guide visiting dignitaries about the grounds. His or her virtues included great courtesy. See B Hill, Servants: English Domestics in the Eighteenth Century, Oxford University Press, Oxford, 1996, p 49. 758. Pepper v Webb [1969] 1 WLR 514; 2 All ER 216. See A Brooks, ‘Myth and Muddle — An Examination of Contracts for the Performance of Work’ (1988) 11 UNSWLJ 48 at 75. 759. Jupiter General Insurance v Shroff, note 152 above, at 74. See also Drury v BHP Refractories Pty Ltd (1995) 62 IR 467 at 473. 760. See generally Drury v BHP Refractories Pty Ltd, note 759 above, at 473; Pepper v Webb, note 758 above; Thomson v Broadley [2002] QSC 255 at [23]; Farley v Lums (1917) 19 WALR 117; OAMPS Insurance Brokers Limited v Shackcloth [2008] NTSC 29 at [67] and Gledhill v Bentley Designs (UK) Ltd [2011] 1 Lloyd’s Rep 270 at [7]–[10]. On the retraction of a repudiation, see 10.66. On the significance of words uttered in the heat of the moment, see 11.12.

[page 480]

Chapter 8 The Duties of Employers Overview Minimum Conditions of Employment under the Fair Work Act National Employment Standards, modern awards and enterprise agreements National Employment Standards The Implied Term of Mutual Trust and Confidence The existence and overview of the implied term The rationale and origin of the term The elements of a breach The implied term, express terms and other instruments Application of the Term and Consequences of a Breach Failures to respect the employee’s rights Humiliation, abuse, and inquiries into allegations Procedural fairness and equal treatment Consequences of a breach of the term Good Faith and Cooperation in Employment Contracts Duty of good faith The parties’ duty to cooperate The Employer’s Duty to Indemnify the Employee The Duty to Provide Work The traditional approach: overview and history

Public performers Contracts for skilled employees Remuneration based on the performance of work Appointments to perform specific duties Effect of a breach of the duty [page 481] A comment on the general rule The Employer’s Duty of Care Introduction Sources of the duty The nature of the duty Standard of care Aspects of the duty Limits on recovery

OVERVIEW 8.1 This chapter examines the duties of employers. Employers must comply with the contract’s express obligations. The Fair Work Act 2009 (Cth) establishes a series of minimum conditions that must be provided by employers to national system employees: see 8.2–8.12. Modern awards and enterprise agreements also set minimum conditions of most employees in Australia about many of the key conditions of employment: see 8.2. There is a term implied in law in employment contracts that the parties shall not, without reasonable and proper cause, conduct themselves in a manner calculated or likely to destroy or seriously damage the relationship of trust and confidence between them. This is known as the implied term of trust and confidence: see 8.13–8.27. The extent of the employer’s obligation to

perform its obligations and exercise its powers and discretions in good faith is explored in 8.28–8.32. The implied contractual duty of cooperation is examined in 8.33. The employer’s implied duty to indemnify its employees for liabilities and expenses incurred in the performance of the employee’s duties is discussed in 8.34–8.36. In the circumstances canvassed in 8.37–8.55 an employer will have a duty to provide work to an employee. Employers have a duty to take reasonable care for the safety of their employees in the workplace which is examined in 8.56–8.74.

MINIMUM CONDITIONS OF EMPLOYMENT UNDER THE FAIR WORK ACT National Employment Standards, modern awards and enterprise agreements 8.2 Currently there are three principal sources of rights under the Fair Work Act for national system employees: National Employment Standards (NES), modern awards and enterprise agreements. About 85% [page 482] of Australian employees are national system employees: see 1.21. There is an examination of the relationship between the rights created by those instruments and contract in 5.81–5.103. The relationship between those instruments and other Commonwealth and state laws is beyond the scope of this text. There are many other types of statutes and instruments governing employment that have effect according to the terms of the statutes that create them.1 Part 2-2 of the Fair Work Act sets out the NES. It contains minimum conditions covering maximum weekly hours, flexible working arrangements, parental leave, annual leave, personal/carer’s leave and compassionate leave, community service leave, long service leave, public holidays, notice of

termination and redundancy pay. Some of these conditions are discussed in more detail in other chapters of this text.2 Oddly the right to a minimum rate of pay is not one of the 10 NES. As discussed below, minimum wages may be set by a modern award or an enterprise agreement. Under Part 2-6 of the Act the Minimum Wage Panel of Fair Work Australia (FWA) may set the minimum wage for national system employees to whom neither a modern award nor an enterprise agreement applies: s 294. Each year FWA reviews the national minimum wage order: ss 285 and 294. Modern awards are made by FWA. Section 139 of the Act sets out the matters that may be regulated by modern awards including minimum wages, classification and career structure, incentive based and piecework payments, regulation of the mode of employment (full time, part time, fixed term or casual), allowances, hours of work and related matters, overtime, penalty rates, leave and public holidays, superannuation and consultative and dispute settling procedures. The terms that must be included in modern awards include terms defining the coverage of the award, and terms regulating individual flexibility arrangements, dispute settling procedures, the ordinary hours of work, and certain rates of pay for pieceworkers: see ss 143–149. An enterprise agreement is made at the enterprise level and regulates the terms and conditions for those national system employees to whom it applies. Broadly speaking, under s 172 the agreement may be about [page 483] matters pertaining to the relationship between the employer and its employees and matters pertaining to the relationship between the employer and the union. The agreement cannot contain an unlawful term, a nation defined in s 194. An enterprise agreement may set conditions that supplement those contained in the NES and modern awards. The agreement is made between the employer and the employees, who will be covered by the agreement. There are about 25,000 enterprise agreements in Australia with over 97% being in the private sector. Over 97% of agreements made under the Act are single enterprise non-greenfields agreements. Enterprise agreements cover

around 2.5 million employees, which is about 25% of the Australian workforce. In about 50% of the agreements a union is also covered.3 An employer must not contravene a provision in the NES, a modern award or an enterprise agreement: see ss 44, 45 and 50. A contravention gives rise to a claim for civil remedies. The Federal Court and the Federal Magistrates Court may grant injunctive relief to prevent or stop a contravention and may order compensation for loss suffered because of a contravention: s 545. A penalty may also be imposed for a contravention. The calculation of compensation under the Act is discussed in 14.32–14.34 and the award of injunctive relief is noted in 15.25.

National Employment Standards 8.3 Section 117 establishes a right to notice of termination or pay in lieu, and is discussed in 11.36. Sections 119–123 establish a right to redundancy pay which is discussed in 13.9.

Hours of work4 8.4 An employer must not request or require a full-time national system employee to work more than 38 hours in a week unless the additional hours are reasonable having regard to a range of factors including the risks to the employee’s health and safety from working the additional hours, the employee’s personal circumstances, the needs of the workplace, the additional payments for the work, and the notice given to the employee: s 62. Employees who are not full-timers cannot be requested or required to work more than their ordinary hours unless the additional hours are reasonable. By agreement the hours of award-free employees can [page 484] be averaged over a period that is longer than a week. Modern awards and enterprise agreements can also include provisions for averaging, such as agreements to work longer than 38 hours for three weeks each month and to take a rostered day off in the fourth week: ss 63 and 64. Modern awards must

establish the ordinary hours for the different types of employment they regulate: s 147. Most modern awards and enterprise agreements, but not the NES, contain provisions requiring the payment of overtime for work in excess of the employee’s ordinary weekly hours. They commonly also include special rates for working unsociable hours. Section 65 grants national system employees who are responsible for the care of a minor or child with a disability the right to request a change in working arrangements to assist the employee to care for the child. The employer must give a written response to the written request and provide reasons if the request is refused. The request may be refused only on reasonable business grounds. A request can be made by any continuous employee with more than 12 months’ service or certain long-term casual employees.5

Parental leave 8.5 Section 70 of the Act grants national system employees who are the parents of, and responsible for the care of, a child the right to take up to 12 months’ unpaid parental leave associated with the birth of the child or the placement of the child aged less than 16 with the employee for adoption. The right to parental leave is only granted to employees with more than 12 months’ continuous service and certain long-term casuals: s 67. Under the Paid Parental Leave Act 2010 (Cth) some employees are entitled to a payment, fixed by reference to the federal minimum wage, for up to 18 weeks. The payment is administered by the employer or is paid by the Family Assistance Office.6

Annual leave 8.6 National system employees, other than casual employees, are entitled to take and be paid for four weeks annual leave per annum, though some shift workers are entitled to more: ss 86–87. The leave accrues on a pro rata basis, accumulates from year to year and on termination any accrued untaken leave must be paid out to the employee: ss 87 and 90. The leave is taken at an agreed time and the employer must not unreasonably refuse an employee’s request for annual leave: s 89.

[page 485]

Personal and carer’s leave and compassionate leave 8.7 National system employees, other than casuals, are entitled to 10 days paid personal/carer’s leave per annum under Pt 2 Div 7 of the Act.7 The entitlement accrues each year, and in some circumstances it can be cashed out. The leave can be used during an employee’s personal illness or to provide care or support for a family member. An employee, including a casual, may take up to two days unpaid carer’s leave if the paid leave is exhausted: s 103. An employee, including a casual, may take up to two days compassionate leave to spend time with a member of the employee’s immediate family who has sustained a life-threatening injury or has developed a life-threatening illness. Compassionate leave is also available after the death of an immediate family member. Compassionate leave is paid leave, except for casuals: ss 104–106. Notice of the personal, carer’s or compassionate leave must be given by the employee and evidence of the purpose of the leave must be provided on request: s 107. A national system employer is prohibited by s 352 of the Act from dismissing an employee because the employee is temporarily absent from work because of illness or injury, a notion defined in reg 3.01 of the Fair Work Regulations 2009 (Cth).8

Community service leave 8.8 National system employees are entitled to be absent from work if they are engaging in a community service activity. The activity can include jury service or a voluntary community service activity, such as fulfilling a role in a fire-fighting, civil defence, rescue body or a body with a role under an emergency management or disaster management plan: ss 108 and 109. Employees, other than casuals, who engage in jury service are entitled to up to 10 days’ pay: s 111.

Long service leave9 8.9 Employees who were covered by certain awards or agreements governing

long service leave prior to 2010 continue to be entitled to the benefits of those entitlements. Otherwise, the employee will be entitled to the benefits of the laws governing long service leave in each of the states and territories: ss 113–113A. Modern awards do not govern long service leave but enterprise agreements may do so. In each state and territory [page 486] there are statutory long service leave entitlements that usually grant an employee two months’ long service leave after 10 years’ service.10 Employees are entitled to a pro rata payment on termination after seven years’ service, or five years in New South Wales or the Australian Capital Territory.11

Public holidays 8.10 National system employees are entitled to a paid day off work on each public holiday. There are eight public holidays: New Year’s Day, Australia Day, Good Friday, Easter Monday, Anzac Day, Queen’s Birthday holiday, Christmas Day and Boxing Day. Additional or substituted public holidays can be declared in a state, territory or region. An employee must not refuse a reasonable request to work on a public holiday: ss 114–116. Section 114(4) lists a series of non-exhaustive factors taken into account when assessing the reasonableness of the request including the nature of the work and the workplace, the employee’s personal circumstances, the additional payments for the work and the notice given to the employee.12

Fair Work Information Statement 8.11 Under s 124 each employer must provide, to each new national system employee, a statement prepared by the Fair Work Ombudsman called the Fair Work Information Statement. It sets out information about the NES, modern awards, enterprise agreements and certain other rights. Under most modern awards there is an obligation to ensure national system employees have access to the award, either by posting it in a prominent place or by providing

a copy electronically.13 A national system employee is entitled to inspect and copy certain records relating to employment, but these do not include the terms of the contract.14 [page 487]

Other individual rights established by the Fair Work Act 8.12 The Act establishes a broad range of collective rights to bargain for better employment conditions that are beyond the scope of this text. It also includes rights to employees concerning the payment of wages (see 9.47), rights arising from the transfer of the employer’s business (see 13.13), protections against unfair and discriminatory dismissals (see Parts 3-1 and 32 of the Act), rights governing consultation about redundancies (see 13.12) and rights to employers concerning the standing down of employees (see 9.63).

THE IMPLIED TERM OF MUTUAL TRUST AND CONFIDENCE The existence and overview of the implied term 8.13 There is a term implied in law in employment contracts that the parties shall not, without reasonable and proper cause, conduct themselves in a manner calculated or likely to destroy or seriously damage the relationship of trust and confidence between them. This is known as the implied term of trust and confidence and was established in the United Kingdom in Malik v Bank of Credit and Commerce International SA (Malik).15 The principles governing the recovery of damages for breach of this term are discussed in 14.67–14.95. In Australia the implied term of trust and confidence has been applied in a range of decisions. In some a breach of the term has been found.16 In others it has been endorsed in dicta, or adopted when there was found to be no breach.17 It has been endorsed in some appellate courts,18 and it

[page 488] has been applied for many years in Australian industrial tribunals.19 In the United Kingdom it has been applied for over 25 years by appellate courts.20 The implication of the term has widespread academic support,21 but some doubts about the implication of the term persist in Australia.22 The term does apply to the exercise of an employer’s power to terminate the contract, but a breach of the term gives rise to a right to terminate: see 8.15 and 8.27. The term is different from the duty of good faith: see 8.28–8.32. It is not a fiduciary duty: see 8.16. It imposes a mutual duty, being applicable to both employees and employers: see 8.14. As with any term implied in law, the implication will not be made when the term is inconsistent with the express terms of the contract or the statutory and regulatory context of the employment: see 8.22–8.23. [page 489] There are three main ways of analysing the implied term:23 First, by treating the statement of the term in Malik as a precise formulation consisting of specific elements and then dissecting and expounding on those elements. Second, by treating the Malik enunciation as the parent of a family of more specific terms that are implied to deal with particular fact scenarios.24 Third, by treating the term as part of a broader set of behavioural standards incorporating notions of fair dealing and good faith.25 The first approach is taken in most decisions, both in Australia and the United Kingdom, and consequently structures the discussion below.

Different relationships and the scope of the term 8.14 The duty of trust and confidence is a mutual duty,26 though there have

been doubts expressed about this proposition.27 It is suggested that so far as the implied term imposes obligations on employees it is a modern restatement of the employee’s obligation not to do an act incompatible with, or destructive of the necessary confidence in, the employment.28 The term is implied in law.29 It is implied in all employment contracts, from the most senior to the most junior employees. By paying a substantial salary an employer does not acquire a right to treat employees [page 490] according to a lesser standard.30 The fact that the duty is owed by or to a corporation, rather than a natural person, does not mean that the duty does not arise.31 The term applies to conduct that is likely to destroy or seriously damage the particular relationship of confidence and trust. As discussed in 15.35, the absence of trust and confidence is a reason traditionally relied on to refuse to grant specific performance of employment contracts. Trust and confidence is not an absolute measure. It can be measured in degrees. It can be slightly damaged, seriously damaged or destroyed. Different parties have distinctive relationships of trust and confidence. The nature of the employment and the work performed shapes the relationship. The greater the level of trust required the easier it is to destroy or seriously damage. Some parties conduct a robust relationship characterised by mutual abuse. Some parties loathe each other and are harnessed together by divergent motives. Conduct that is likely to destroy or seriously damage the particular relationship varies according to these factors.32 The issue of whether there has been a breach of the term is a highly context-specific factual issue.33 Where the employer is a large enterprise and the employee performs work where trust and loyalty are relatively insignificant, the personal relationship of trust and confidence may be less important from the employer’s perspective.34

The application of the term to dismissals 8.15 The purpose of the term is to facilitate the proper functioning of the

contract, preserve the relationship and protect the employee from oppression, harassment and loss of job satisfaction.35 Accordingly, the implied term does not apply to the termination of the contract; that is, [page 491] the duty not to damage or destroy the relationship does not apply to the exercise of a power to terminate the relationship.36 A breach of the implied term does not sound in damages when the conduct complained of is the termination of the contract.37 However, damages are recoverable where the breach occurs before the termination, such as during a disciplinary process.38 The implied term does apply to the termination of the contract in one sense: a breach of the term gives rise to a right to terminate: see 8.27. The implied term does not impose obligations that operate after the termination of the contract.39 It may apply, perhaps in an attenuated manner, to conduct prior to the commencement of work under the contract.40 It may regulate the employer’s conduct in determining the terms of a variation offered to an employee.41

The implied term and analogous duties 8.16 The implied term creates a contractual duty and not a fiduciary duty.42 The implied term of mutual trust and confidence is different from the employee’s duty of fidelity discussed in 7.29. The implied term is directed towards the maintenance of the relationship. It is a contractual duty not to engage in conduct that would destroy or seriously damage the relationship. The term largely regulates the conduct of employer and employee towards each other. It does not require one party to subordinate the party’s own interests in favour of the other.43 In contrast, the duty [page 492] of fidelity is directed at ensuring the employee is loyal in circumstances

where loyalty is required. It largely regulates the conduct of the employee when dealing with third parties. When the duty of fidelity imposes obligations it requires that the employee subordinate his or her own interests in favour of the employer’s interests.44 The authorities are divided on whether the implied term of trust and confidence and a duty of good faith are part of one overarching obligation or two separate obligations. Some cases expressly support the view that there is a single obligation capturing both duties or implicitly support this view by equating the implied term with an obligation to deal fairly or in good faith with the other party.45 It is suggested that the better view is that the implied term is different from the duty of good faith. The implied term does not apply to the exercise of a power to terminate the contract, whereas the duty of good faith may.46 A breach of the implied term will always give rise to a right to terminate, whereas a breach of the duty of good faith will only do so if the breach is sufficiently serious. The implied term is aimed at maintaining the relationship whereas the duty of good faith is aimed at ensuring that discretions and powers are exercised in accordance with the parties’ intentions.47 There is, however, clearly considerable overlap between the duties, just as there is considerable overlap between the various aspects of the duty of fidelity: see 7.32. Capricious conduct by the employer in determining the amount of remuneration paid to the employee will often be a breach of the duty of good faith but also may be a breach of the implied term of trust and confidence.48

The rationale and origin of the term 8.17 The purpose of the term is to ensure the proper functioning of the employment contract, protect the relationship and the employee [page 493] from oppression, harassment and loss of job satisfaction.49 The term as formulated:

… is apt to cover the great diversity of situations in which a balance has to be struck between an employer’s interest in managing his business as he sees fit and the employee’s interest in not being unfairly and improperly exploited.50

It is suggested that the term is necessary. Without it, employees who are lied to, humiliated or oppressed would have no remedy in contract or any right to terminate the contract. They would be required to continue to serve a dishonest, corrupt, morally repugnant or untrustworthy employer for the term of their contracts. The right of employees in this position to leave immediately must arise from the breach by the employer of an implied term.51 By way of comment, the term is also a recognition that the employment relationship has personal and social dimensions and is about more than a wages for work exchange. The employee is a person. As such, he or she should be treated with respect and dignity. The employment relationship is different to the dominion exercised over a servant by a master.52 8.18 There are numerous views about the origin of the implied term. It is sometimes said to have developed from the general obligation of cooperation between the parties.53 Another view is that it developed in response to changes in the unfair dismissal laws in the United Kingdom.54 There is some support for the view that the mutual duty is a re-expression of the employee’s duty of fidelity.55 The trust and confidence reposed by the parties in each other may be a concomitant of the right to control.56 It is suggested that there is another strand to the history of the term’s development. From the late nineteenth century employees had a duty not [page 494] to do an act incompatible with the employment.57 In an oft-cited passage, Dixon and McTiernan JJ have stated that ‘conduct which in respect of important matters is … destructive of the necessary confidence between employer and employee, is a ground of dismissal’.58 The implied term of trust and confidence appears to be a modern re-expression of this principle applied to both parties rather than only the employee.59

The elements of a breach ‘Without reasonable and proper cause’ 8.19 The implied term will not be breached by the employer unless the employer’s conduct is ‘without reasonable and proper cause’.60 An employer has good reason to lose trust in an employee who has committed a serious breach of the contract.61 An employee forced to take a substantial pay cut may have reasonable and proper cause for criticising an employer.62 In exercising their rights the parties are entitled to have regard to their own interests and it is not unreasonable or improper to do so.63

‘In a manner calculated or likely’ 8.20 There is some uncertainty about the proper formulation of the implied term. Lord Steyn’s formulation of the term in Malik, which is most commonly quoted in the authorities, refers to the contravening conduct as being ‘calculated and likely’ to destroy or seriously damage the relationship.64 Lord Nicholls only refers to conduct likely to destroy or seriously damage the relationship.65 It is suggested that the correct [page 495] formulation is that the conduct must be ‘calculated or likely’ to destroy or seriously damage the relationship. Lord Steyn himself refers to and quotes three cases that all use the phrase ‘calculated or likely’ and later in the decision makes it clear that he means ‘calculated or likely’.66 Lord Steyn’s formulation is often quoted without reference to the discrepancy (even Homer nods). Those who have been alert to the issue have decided that the disjunctive formulation is accurate.67 An employer does not need to have intended to breach the term.68 The employee need not be the target of the employer’s conduct.69 The employer’s motive is not determinative when assessing the likely effect of its conduct. Rather, that assessment is a matter of objectively looking at the conduct as a

whole and determining whether its effect, judged reasonably and sensibly, is such that the employee cannot be expected to put up with it.70 There will be no breach when the employee genuinely, but mistakenly, misinterprets the employer’s conduct as destructive of trust and confidence.71 Proof of a subjective loss of confidence in the employer is not an element of the breach.72 There will be no breach where the conduct, judged objectively, reveals an intention to maintain rather than destroy the relationship. In Warren v Dickson the employee insisted on the performance of the contract in language that was inappropriate, disrespectful, aggressive and accusatory, [page 496] but it was done to assert his rights conferred by the contract and not to destroy it.73

The required seriousness of the conduct 8.21 To breach the term the employer’s conduct must be so serious that it destroys or seriously damages the relationship. The bar is high and imperfect performance is unlikely to meet the required standard.74 The conduct must be so serious that it justifies the employee immediately terminating without notice.75 To make a serious allegation against an employee, without reasonable and proper cause, will often be a breach. In Gogay v Hertfordshire County Council the employee was accused of sexual abuse of a young person in the employer’s care and was suspended: Sexual abuse is a very serious matter, doing untold damage to those who suffer it. To be accused of it is also a serious matter. To be told by one’s employer that one has been so accused is clearly calculated seriously to damage the relationship between employer and employee. The question is therefore whether there was ‘reasonable and proper cause’ to do this.76

Ordinary individual acts of negligence do not undermine the relationship. Gross negligence by the employer may be a breach of the implied term, but it would need to be a ‘real and unacceptable disregard for the interests of the employee’.77 There is a difference between running a corrupt business and

running an incompetent one.78 The breach of the term need not consist of a single act. It can consist of a series of acts none of which in themselves is sufficient to justify termination.79 The final act must not be utterly trivial and must contribute, however slightly, to the breach of the implied term.80 [page 497]

The implied term, express terms and other instruments Implication must be consistent with other instruments 8.22 As a term implied in law, the term of trust and confidence can be excluded by an express term or by virtue of being inconsistent with other express terms,81 such as an express term of good faith or (possibly) an entire contract term.82 The implication of the term, like the implication of any term implied in law, only occurs when it is necessary. The statutory and regulatory context of the employment will be important in determining whether the term is to be implied and its effect once so implied. The term will be less likely to be implied where the employee has a range of statutory or contractual rights to prevent and remedy abuses by and grievances with the employer.83

Implied term as a qualification on express rights and powers 8.23 The implied term must be read consistently with the express terms of the contract. There are two broad approaches to this issue. First, there may be a breach of the implied term when the employer exercises an expressly conferred power or discretion in a manner calculated or likely to destroy or seriously damage the relationship of trust and confidence between the parties. Such a limitation on the exercise of expressly conferred powers and discretions has arisen in a range of contexts, including the exercise of a power to relocate the employee, exercising a power to alter employment conditions and exercising a power to suspend the employee.84 The second and alternative approach is that the implied

[page 498] term of trust and confidence cannot qualify an unqualified power and does not impose on the employer an obligation to exercise an unqualified power or discretion reasonably or for good cause.85 The proper approach to take will in part depend on the particular power or discretion being exercised. As discussed in 8.30–8.32, on one view the duty of good faith (rather than the implied term) governs the exercise of express powers and discretions.86

APPLICATION OF THE TERM AND CONSEQUENCES OF A BREACH Failures to respect the employee’s rights 8.24 A failure or refusal by an employer to respect the employee’s rights and comply with the employer’s obligations may be a breach of the implied term. An employer may destroy or seriously damage the relationship by an unjustified refusal to pay the agreed wages,87 by attaching unreasonable conditions to the payment of remuneration,88 or by persistently attempting to alter conditions of employment.89 A contravention of a statutory right or a right conferred by an industrial instrument may be a breach of the term. For example, an employer may seriously damage the relationship by sexually harassing the employee or not paying award wages. Ultimately the issue under the contract is whether the employer’s conduct breaches the term, not whether there is a contravention of the statute or instrument. A failure to make a reasonable adjustment for a disabled employee may be a breach.90 The removal of a valuable benefit provided to employees as a matter of policy for many years may be a breach of the term.91 A serious breach [page 499]

of the employer’s policies, including those that are not contractually binding, is relevant in determining if the employer had acted in breach of the term.92 The demotion of an employee may be a breach of the implied term.93 A demotion, as discussed in 6.14, may involve a change in status or responsibilities, even if there is no alteration in remuneration. In Hitton v Skinner the employee was accused of dishonesty and was moved from a sales job to one in which he was not permitted to handle cash. This change in responsibilities demonstrated the employer’s lack of confidence and trust in him.94 Requiring an employee to relinquish an agreed position may be a breach. This includes placing the employee in a position where he or she had no practical alternative but to accept the change. Accepting the demotion rather than resigning does not alter the fact that a breach has occurred.95

Humiliation, abuse, and inquiries into allegations 8.25 Employers who harass, undermine or humiliate employees have been found to have breached the implied term.96 A failure to protect an employee from harassment by the employer or other employees or the use of intolerable and abusive language may also be a breach.97 The employer may breach the term by making unreasonable attacks on the employee’s integrity or capacity.98 The term does not impose a positive obligation on either party to disclose to the other, unasked, any misconduct.99 The [page 500] conduct of a dishonest or corrupt business by the employer may be a breach.100 To inquire into an act of misconduct will not, per se, be a breach of the term. It may be a breach to accuse an employee of serious misconduct, such as theft or gross incompetence, if the employer does not have reasonable and proper grounds for making the accusation.101 The accusation need not be express; it could be implied from conduct such as taking steps which make it plain that the employer believes the employee has committed the

misconduct.102 Similarly, sending a senior employee to undergo a psychiatric examination without justification may be a breach.103 If the employer is unsure whether there are sufficient grounds to make an allegation of misconduct it should consider other options such as having the employee take leave or perform work in another area while the matter is clarified, or sending the employee on garden leave until the employer has reasonable and proper cause to make a serious allegation.104 An employee is entitled to have his or her complaints about significant matters treated seriously and dealt with promptly and sensibly. A breach may occur when an employer fails to do so, such as by ignoring the employee’s complaints about safety.105 An employee who has done something wrong and is required to mend his or her ways is entitled to some support or guidance in doing so. An employer who fails to provide any support may be in breach of the term.106 There is some authority to support the view that an employer may not be able to engage in a form of entrapment by permitting an employee to continue to engage in conduct in breach of the contract when the employer knows, but the employee doesn’t know, that the employee’s conduct is a breach.107 [page 501] The implied term applies to the conduct of disciplinary investigations carried out by an employer.108 In Morton v Transport Appeal Board, a ferry operator was involved in a physical altercation with a fellow employee. He claimed the employer breached the duty by failing to record his representations, drawing adverse inferences from his exercise of his right to silence and failing to take exculpatory material into account. The court concluded there was no breach by the employer. The duty did not impose an obligation to perform a perfect investigation.109

Procedural fairness and equal treatment 8.26 A term is not usually implied in law or fact obliging the employer to provide procedural fairness prior to giving notice or exercising a right to

terminate.110 Some cases suggest that the implied term of trust and confidence cannot confer an entitlement to procedural fairness as to do so would undermine the ‘right’ of the employer to dismiss for any reason or for none.111 However, there is some support for the view that the employer may breach the implied term of trust and confidence by failing to provide procedural fairness while carrying out investigative or disciplinary procedures which might not necessarily culminate in a dismissal. An employer who makes a serious and false accusation after conducting an inadequate and unfair investigation may breach the implied term. An employee may also breach the implied term by acting to the employee’s detriment on complaints that are kept secret from the employee.112 In Quinn v Gray the contract provided that the employer could give six months’ written notice. The employer conducted an investigation into allegations of misconduct made against the employee. A committee of inquiry was established which held hearings and delivered a report that recommended dismissal. The employee was not advised of the outcome of the inquiry or given an opportunity to respond to all of the material received by the committee. These failures to afford procedural fairness were a breach of the implied term of trust and confidence notwithstanding [page 502] the absence of a separate implied term creating an obligation to provide procedural fairness.113 A breach may occur when the employer, without reasonable and proper cause, singles out the employee for less advantageous treatment.114 Extending a benefit to all employees but one will breach the term unless the apparently arbitrary treatment has a sound justification.115 A breach may occur when the employer fails to notify an employee on maternity leave of a vacancy as it would have if she were attending work.116 When determining the benefits conferred on one class of employees the employer may be obliged to act fairly and reasonably towards employees in a different class.117

Consequences of a breach of the term 8.27 There are two consequences of a breach of the term. First, a breach may give rise to a right to damages, although there are significant limitations on this right which are discussed in 14.67–14.95. Second, a breach may give rise to the right to terminate.118 A breach of the term has been said to be a form of ‘constructive dismissal’.119 It is not clear if the term is a condition or an intermediate term. If the term is a condition then, in accordance with the ordinary tests discussed in 10.16, a breach will give rise to a right to terminate the contract by the innocent party. If the term is an intermediate term, a right to terminate will only arise if there is a sufficiently serious breach. It is suggested that the term is a condition. It is, after all, only breached where the likely effect of the conduct is to destroy or seriously damage the relationship. This high standard must be met before any breach of the term occurs. The authorities that have considered the issue in detail generally support the [page 503] view that any breach will justify a termination by the innocent party,120 though the issue is not yet settled.121 Once a breach has occurred the employee has the right to elect to terminate or affirm the contract. The employer cannot ‘withdraw’ or cure the breach.122 Conduct that constitutes a breach of the term will also often, but not always, be a repudiation of the employer’s future obligations.123 An employee who elects to terminate after a breach of the implied term will often be ‘dismissed’ for the purpose of various statutory unfair and discriminatory dismissal schemes, although the issue will turn on the exact terms of the statute in question.124

GOOD FAITH AND COOPERATION IN EMPLOYMENT CONTRACTS

Duty of good faith 8.28 The law concerning the duty of good faith, if any, in employment contracts is currently in a state of flux, just as it is in the law of contracts generally. Reasonable minds differ on some of the issues discussed below. The following description of the law will be completely outdated once the High Court has resolved these issues. The phrase ‘good faith’ is relatively new to employment law but the concepts that underpin it are not. The phrase does not appear in many of the employment law cases referred to in 8.28–8.32. However, it is suggested that the concept of good faith, as defined below, acts as a rationalising and unifying notion for what are in many respects disparate applications of an overarching principle. [page 504] It is suggested that there is a duty of good faith owed by both parties to the contract in the performance of obligations and the exercise of powers and discretions that would affect the enjoyment by the other party of the essential benefits of the contract. The duty does not arise when it is inconsistent with express terms of the contract, or is excluded or modified by necessary implication. The duty applies to both the performance of the contract and its termination. It is different from the implied term of trust and confidence. The requirements of the duty will depend on the terms of the contract, the context of the employment and the particular obligation, power or discretion in issue: see 8.29–8.32. Good faith will usually require that the parties not act perversely or capriciously, not act for an improper purpose, and that they cooperate. It may extend further to prohibit unreasonable conduct. It does not require the parties to act in the interests of the other party, but it may sometimes require the parties to have regard to the interests of the other party. It is a contractual and not a fiduciary duty. Damages for breach of the duty connected with the termination of the employment are subject to the same limitations that govern damages for the breach of the implied term of trust and confidence: see 14.67–14.95. There is a significant debate about whether the duty arises from a term implied in law125 or is a consequence of the construction of the

contract.126 This issue is currently unresolved and the neutral description of a duty of good faith is adopted below.

General obligations of good faith 8.29 Some courts have accepted there is a duty of good faith in the performance of employment contracts127 reflecting the obligation found in commercial contracts,128 while other courts have held no such duty is [page 505] implied.129 One possible synthesis of these views is to consider whether the duty applies to the particular power, discretion or obligation. Even if there is not a duty applying to all acts of the employer under the contract, the duty may apply when the exercise of the discretion or power would affect the enjoyment by the employee of the essential benefits of the contract.130 The parties will ordinarily intend that powers and discretions will be exercised in good faith.131 For example, the duty may apply to an unqualified discretion to grant a bonus or related benefits and may be breached when the discretion is exercised arbitrarily, capriciously, unreasonably, dishonestly or for a collateral purpose.132 The obligation of good faith has been applied to the power to suspend indefinitely;133 the exercise of powers under superannuation and pension schemes;134 transferring the location of the work;135 applying the terms of a grievance procedure;136 exercising a power to unilaterally amend contractually [page 506] binding policies;137 and singling out an employee for less beneficial treatment.138 The duty of good faith can apply to the exercise of a power to terminate in both commercial139 and employment contracts,140 although there remain

some doubts about the matter.141 The duty might not apply when the employer is given an express power to terminate the contract ‘without cause’.142 There are a series of cases involving long-term sickness schemes in which the employer’s general right to terminate on notice has been held to be limited by the right of the employee to enjoy the benefits of a clause granting sickness payments. It would defeat the purpose of a scheme providing protection for long-term sickness if the employer could exercise its general power to terminate on notice while the scheme was in force and thereby deprive the employee of its benefits.143

The nature of the duty and relationship with other terms 8.30 The duty of good faith is often considered to be a term implied in law.144 If so, it will not be implied when it is inconsistent with express terms of the contract or is excluded or modified by necessary implication.145 It is a contractual duty, not a fiduciary duty or a duty of utmost good faith.146 There is some support for the view that the duty of good faith and the [page 507] implied term of trust and confidence are part of a single obligation to act fairly, responsibly and in good faith.147 The duty does not require a party to act in the interests of the other party: Compliance with the implied terms does not require an employer to act contrary to its own interests. Rather, what is required is an approach which has regard to matters such as the honest and reasonable exercise of the employer’s rights; with prudence, caution and diligence, and with care taken to avoid or minimize adverse consequences to the employee, that are inconsistent with the agreed common purpose and expectations of the parties to the contract. Essentially, employers must treat employees fairly in the conduct of their business, and must act responsibly and in good faith in the treatment of their employees.148

Employers do not have a contractual or tortious duty to take reasonable care for the employee’s economic wellbeing.149 An employer is not contractually obliged to advise an employee of the most beneficial economic options, warn against less beneficial options or make the employee aware of all of his or her rights.150 However, if the employee could not have known of the options unless the employer brought the matter to the employee’s

attention then there may be an implied contractual term obliging the employer to take reasonable steps to advise the employee of the existence of the option.151 An employee given incorrect information by the employer may have an action for [page 508] negligent misstatement or for misleading and deceptive conduct under the Australian Consumer Law.152

The content of the duty 8.31 There is considerable divergence in the authorities concerning the content of the duty.153 The content will depend on the terms, the context and the particular obligation, discretion or power in issue. Some of the authorities describe the duty as imposing a positive obligation to act reasonably or fairly, or not unreasonably or unfairly.154 Some refer to an obligation to act with prudence, caution or diligence.155 8.32 There is sound authority to support the view that an employer cannot exercise a power or discretion capriciously or arbitrarily.156 In Silverbrook Research Pty Ltd v Lindley the court considered a power to pay a discretionary bonus. The majority stated: What, however, would not be permitted is an unreasoned, unreasonable, arbitrary refusal to pay anything, come what may. This would be a denial of the very clause that had been agreed. If these parties wished to make payment under the clause entirely gratuitous and voluntary such that payment could be withheld capriciously, notwithstanding the compliance with solemnly set objectives they needed to say so clearly.157

[page 509] It will be a breach of the duty to exercise a discretion or power irrationally. This does not require an employer to act reasonably. However, an employer will breach the term when it acts so unreasonably that no reasonable employer would have so acted. Borrowing from administrative law, this is a

concept analogous to Wednesbury unreasonableness and imposes a heavy burden on the employee alleging a breach.158 There is some authority for the view that, depending on the power or discretion being exercised, the employer may be obliged to give reasons for its decision.159 A power or discretion must be exercised having regard to its nature and the purpose of the term and, in accordance with the duty of cooperation, each party must do all such things as are necessary on his or her part to enable the other party to have the benefit of the contract.160 There is some authority to support the view that an employer cannot exercise a power or discretion for an improper purpose. If a contractual power or discretion is given for a particular purpose then in some circumstances it cannot be exercised to avoid conferring the benefits granted by other terms of the contract. This is sometimes referred to as the anti-avoidance obligation, although it may simply be an application of the duty of cooperation referred to in 8.33. For example, assume a contract grants benefits to an employee subject to the occurrence of a contingency or the satisfaction of a condition (such as being made redundant or being disabled while in employment). A general power or discretion to dismiss on notice may not be able to be exercised for the purpose of avoiding the conferral of those benefits.161 Some powers and discretions depend on the opinion or satisfaction of the employer, such as a power to dismiss an employee if the board of directors is satisfied the employee has committed an act of misconduct.162 [page 510] The duty of good faith may oblige the employer to only exercise the right if it has ‘a reasonable as well as honest state of satisfaction’.163

The parties’ duty to cooperate 8.33 There is an implied contractual duty of cooperation owed by both parties based on the principle in Mackay v Dick: Where in a written contract it appears that both parties have agreed that something shall be done, which cannot effectually be done unless both concur in doing it, the construction of the contract is

that each agrees to do all that is necessary to be done on his part for the carrying out of that thing, though there may be no express words to that effect.164

It is suggested that this is a term implied in law.165 There are various ways in which this positive duty to cooperate has been expressed. The parties are sometimes said to have a duty to cooperate in the doing of acts necessary for the performance of their fundamental obligations under the contract.166 Sometimes it is said that it is a general rule applicable to every contract that each party agrees, by implication, ‘to do all such things as are necessary on his part to enable the other party to have the [page 511] benefit of the contract’.167 Another approach is to view the obligation as a negative stipulation, rather than a positive obligation to cooperate actively. Considered from this perspective, there is an obligation not to prevent the further performance of the contract.168 This obligation may be merely an aspect of a broader duty of good faith.169 Given the spectrum of juristic bases on which the duty of cooperation may rest, it is unsurprising that there are a series of different approaches to whether the obligation, however expressed, arises as a matter of construction of the contract170 or the implication of a term in fact or in law.171 Whether the duty is a matter of construction or an implied term, it will not arise if it is inconsistent with an express term in the contract.172 The duty applies to the performance of current obligations and does not require a party to agree to a variation of the contract.173 The duty to cooperate does not require an employee to perform acts that he or she has not agreed to perform under the contract.174 An employee may be in breach of the term if he or she, while complying with the letter of the contract, does so in such a way as to deliberately obstruct the smooth operation of the employer’s business.175 It has been said that the implied [page 512]

term of mutual trust and confidence evolved from the mutual duty of cooperation.176

THE EMPLOYER’S DUTY TO INDEMNIFY THE EMPLOYEE177 8.34 An employer has an implied duty to indemnify an employee for all liabilities and expenses incurred that arise from the performance of the employee’s duties.178 The employer’s indemnity can be limited or expanded by express terms of the contract or, where the terms are sufficiently clear, excluded.179 Under s 199A of the Corporations Act 2001 (Cth), a term of a contract is not permitted to indemnify an officer against certain liability incurred as an officer, including an indemnification against liability to a third party arising out of the officer’s conduct that is not in good faith.180 The employer’s duty to indemnify applies to liabilities and expenses incurred as a consequence of the employee obeying directions of the employer, incurred by the employee in the execution of the employee’s authority, or otherwise incurred in the reasonable performance of the employee’s duties.181 The duty does not apply to acts that were beyond the scope of the employee’s authority that have not been ratified by the employer.182 8.35 The employee’s right to an indemnity arising from the commission of a criminal act depends on the nature of the act and the knowledge of the employee. There is a term implied in law that the employer will [page 513] not require the employee to do an unlawful act, such as driving an unregistered vehicle that the law requires the employer to register.183 When the employee knows the act is illegal then he or she cannot claim an indemnity for liability arising from the commission of the act.184 Even in the absence of actual knowledge, no indemnity can arise when the act is manifestly unlawful.185 However, if the act is not clearly and manifestly

unlawful (such as driving a vehicle) and the employee is ignorant of the illegality of the act, then the right to an indemnity can be relied on.186 The employee’s right to an indemnity is lost in a range of situations associated with the employee’s wrongdoing. The employee’s right to an indemnity does not apply when the employee’s conduct is manifestly tortious or the employee knows the conduct is tortious, such as an agreement to indemnify the employee from the civil consequences of a fraud.187 8.36 An employee has an implied contractual duty to exercise reasonable care in the performance of the skills he or she professes to possess: see 7.24. The employee has no right to an indemnity from the employer where the expenses or losses are solely attributable to the employee’s breach of duty.188 When an employee in the course of employment injures a third party due to the employee’s negligence, the third party can sue the employer (who is vicariously liable for the employee’s acts), or the employee or both. If the injured person sues the employee and recovers damages, the employee may be entitled to an indemnity under the implied term of the contract or such statutory contribution from the employer as the court considers to be just and equitable having regard to the extent [page 514] of their respective responsibility for the damage.189 If the third party sues the employer, the respective rights of the employer and employee depend on the right of the employer to recover damages from the employee for breach of the employee’s duty to exercise care,190 the right of the employee to be indemnified for losses arising from the performance of the employee’s duties and the rights of the parties to obtain contribution from the other under statute. There is some support for the view that there is a term implied in law into employment contracts that the employer will maintain in force an insurance policy in a standard form covering both the employer’s and the employee’s liability for damages for loss or damage to property caused by the negligent driving of an insured motor vehicle in the course of his or her employment by the employee, and any damage so occasioned to the employer’s own

property; and to the further effect that the employer would exhaust its rights under the policy before seeking any recovery from the employee.191

THE DUTY TO PROVIDE WORK The traditional approach: overview and history 8.37 The duty to provide work arises in an array of contexts in employment law. They include: whether a refusal to provide work is a breach giving rise to a right to terminate by the employee; whether an employee can be placed on garden leave; whether an employer can suspend an employee for disciplinary reasons; whether an exclusive service term is an unreasonable restraint of trade for an employee who is not being provided with work; whether the contract lacks mutuality; [page 515] whether damages are an adequate alternative remedy for an employee seeking specific performance of the contract; and whether a breach of the term can give rise to substantial damages. The law relating to the implied obligations of an employer to provide work is currently in a state of flux. The traditional view since 1846192 is that, in the absence of an express or statutory obligation to the contrary, as a general rule an employer has no implied obligation to provide work to an employee unless the contract falls into one of four recognised exceptions, namely, where publicity is part of the consideration provided by the employer;193 the contract is to provide training or other experience to the employee;194 the remuneration of the employee is wholly or partly based on piece rates or on commission;195 or the contract concerns a ‘specific office’.196 For employees

not falling within these categories — being most waged employees — there is no right to be provided with work.197 In the oft cited anachronistic dicta of Asquith J: ‘Provided I pay my cook her wages regularly she cannot complain if I choose to take any or all of my meals out’.198 [page 516]

The historical foundation of the general rule 8.38 As with much of employment law, the role and limits of the employer’s duty to provide work were shaped by statute and reflected the economic necessities of the time. Under the Poor Laws, which are described in more detail in 1.29, 1.38 and 1.39, settlement in a parish could be gained by an inferior servant by service with a master for a year. This required complete dominion of the master during the year: ‘it was essential in these cases that the servant should be under the power and coercion of the master during the whole time’.199 If the contract reserved the right to the servant to take any leave or to only work for a limited number of hours per day, then the dominion of the master was incomplete.200 The service could be constructive service which consisted of the servant not being required to attend work, but remaining in the service of the master. In the terms used in the early nineteenth century, the service was dispensed with, but not dissolved.201 The law left the master ‘to exact or remit the service as suits his convenience or discretion. He may compel his servant to work at all lawful seasons, or may suffer him to remain unemployed’.202 A general hiring of an inferior servant did not compel the master to provide work. The foundation of the general rule in the approach taken to the rights of inferior servants resonated through the twentieth century in the examples used by judges in dicta.203 In the 20 years after the repeal of the Poor Laws until the mid-1840s courts adopted an untenable approach to the law on this topic by dissociating the servant’s agreement to serve from the master’s obligation to retain the servant in his service. Servants were bound to serve but

[page 517] the master was not obliged to permit the servants to serve.204 After the Barons in the Exchequer Chamber were seized of the issue in Pilkington v Scott in 1846, courts accepted that an agreement to serve implied an obligation on the employer to employ for the duration of the service.205 There are two meanings of the word ‘employ’ in this context that need to be distinguished.206 An obligation to ‘employ’ can mean the master must retain the servant in service — that is, keep the servant in the employment — or it can mean to give actual work to the servant to perform. The position of non-piecework employees was addressed in the seminal decision in Emmens v Elderton that held that an agreement to employ obliges the employer to retain the employee in its service for the duration of the contract. This did not oblige the employer to provide actual work; it simply meant that the relationship of employment must continue to exist for the duration of the contract.207 A breach of the implied term is a wrongful dismissal. In piecework contracts, the obligation to employ meant that the employer was obliged to find reasonable work for the employee to perform.208 The world has moved on since 1846: ‘as social conditions have changed the courts have increasingly recognised the importance to the employee of the work, not just the pay’.209 The nature of work has in many cases changed. The general rule has come under attack in recent years, both [page 518] academically and judicially.210 Some proposals to reformulate the general rule are discussed in 8.50–8.55. In 8.40–8.48 there is an examination of the exceptions to the general rule. Due to changes in the nature of work and the basis of remuneration, it is suggested that those exceptions now cover a significant proportion of the skilled workforce. The effect of a breach of the duty is noted at 8.49.

Express terms, implicit terms and terms implied in law and fact

8.39 Employment contracts may expressly, or implicitly, grant to the employee the right to be provided with work. Where the contract falls into a class where courts recognise that the consideration provided by an employer is more than simply wages, courts tend to construe ambiguous provisions in the contract as imposing an obligation on the employer to provide a reasonable opportunity to work.211 Arguments, cases and commentary in this field have focused, many times unnecessarily, on whether there is an implied term in the contract requiring the provision of work. Where an employee is appointed to perform specific duties, whether as a public performer or filling an office or otherwise, it will not be necessary to imply a term. The express, or at least the implicit, terms of the contract grant the right. As Bankes LJ has stated: But there is another class of contracts which is quite different and in which it is not necessary to introduce any implied term; these are contracts of employment to do a particular specified thing. For example, a man may be engaged to come and clean windows on a certain day. If when he comes he is told he is not to do the work, there is a breach of contract. The engagement of an actress to play a particular part is an instance of this latter class. In my view no question of implied obligation arises here; the obligation is

[page 519] express. The manager who engages an actress to play a particular part and then refuses to allow her to play it commits a breach of contract.212

An example of an express term to provide work arose in an unusual context in University of Regina v Cohnstaedt. The employee was a tenured professor and, as part of a disciplinary process, it was agreed that his performance would be evaluated. The Supreme Court of Canada found that ‘implicit in the agreement between the parties was a term that the appellant would be assessed on the usual factors for evaluating the work of a full time professor’. The employer breached that agreement when the employee was not assigned work in two of the usual areas of work of a professor.213 Statutes or industrial instruments may also create the right to be provided with work.214 In the absence of an express term, it is necessary to determine whether a term is implied.215 There are different approaches that have been taken to determine whether the term is one implied in law,216 fact,217 or is simply a

matter of construction.218 [page 520]

Public performers 8.40 Public performers are an exception to the general rule that the employer has no obligation to provide work to its employees.219 It is often said the exception applies to ‘actors and others in a similar position’,220 but it probably extends further. Courts recognise that in such contracts the consideration provided by an employer is more than simply wages, though the terms of some public performance contracts may preclude that conclusion.221 The obligation to provide work to a public performer (whether pursuant to an express or implied term) requires the employer to give the employee a reasonable opportunity to perform the services.222 This is often not an unqualified right.223 The rationale for the term in some contracts is that both parties contemplate that the employee not only wants the agreed remuneration ‘but also the opportunity to keep her name and talents before the viewing public’.224 It is not the performance of the work that is crucial, but the exposure to the consequential publicity associated with that performance. Where the employer breaches the term imposing the obligation, the [page 521] employee can recover damages for the denial of an opportunity to retain or enhance his or her reputation.225 It would accord with this rationale to imply the term in contracts where it is within the reasonable contemplation of the parties that the public would view the performance of the work (or its product), and that the reputation of the employee could be retained or enhanced by that performance.226 As to the product of the work, the High

Court has twice recognised that the obligation to provide work may arise for public performers whose work, but not the performance of the work, is viewed by the public.227

Contracts for skilled employees 8.41 If a purpose of the contract is to provide training or experience to an employee, or to enable the employee to gain, retain or improve his or her skills, then a term may be implied requiring the employer to provide a reasonable amount of work to the employee.228 This obligation is more readily inferred or implied when the employee is an apprentice, a trainee or has accepted employment to gain experience in the hope of building a career.229 However, it may also apply to skilled employees well advanced [page 522] in their career,230 particularly if the employee needs practice to retain his or her skills in a changing field.231 As Sir John Donaldson stated: In a contract for the employment of one who needs practice to maintain or develop his skills, the consideration will include an obligation to pay the salary or wage, but it may also extend to an obligation to provide a reasonable amount of work.232

By way of comment, there is a reasonable argument that an increasing number of skilled employees will fall into this category due to changes in the nature of work in the last few decades. Employees are now less likely to remain in employment with one employer for decades. As Professor Riley has argued: Employees are now bargaining for employability — the prospect of gaining valuable skills, experience and contacts that will ensure continuation of a career (or perhaps even development of new careers) despite increasingly frequent changes of job. Perusal of the employment classifieds confirms that employers are looking for people with talent, skills and knowledge developed in earlier engagements, and they are offering the promise of valuable training and career-enhancing experience as part of the inducement to attract qualified staff.233

If this is correct, then it is certainly arguable that the consideration provided by employers is the opportunity for ‘valuable training and careerenhancing experience’. Different considerations may arise for unskilled

workers.234 The implication of an obligation to provide work to employees would aid in the fulfilment of Australia’s international obligations. Australia is a signatory to the Constitution of the International Labour Organisation (ILO). The founding principle of the ILO is that ‘Labour is not a commodity’. The obligation to provide work, rather than merely [page 523] wages, in exchange for service aids in providing to employees the dignity and self-respect that accompanies work.235

Remuneration based on the performance of work 8.42 A significant number of Australian employees are engaged under contracts providing some type of performance-based pay.236 Where the amount of remuneration of an employee is based on the work performed by the employee, there is often a term implied that the employer must provide a reasonable amount of work to the employee.237 In addition to applying to pieceworkers, the term is often implied where the employee earns all of his or her remuneration through commission, or partly by commission and partly by wages.238 The term is implied in fact.239 As such, it is not implied where it would be contrary to express terms of the contract. The term will only be implied to give business efficacy to the contract.240 The fact that the employee is obliged to serve the employer is also important. The term will usually not be implied where the employee has the right to terminate the contract on no notice.241 There is a reasonable argument that the term should be implied in law into the contracts of employees who earn all or a significant part of their remuneration by commission or through performance based pay.

The obligation to provide a reasonable amount of work 8.43 The locus classicus of pieceworker cases is Devonald v Rosser & Sons. That case concerned a tinplate worker who was paid per box

[page 524] produced. He was entitled to and required to give one month’s notice. The employer closed the factory for two weeks and then gave one month’s notice. Devonald sued for damages for breach of an implied obligation to provide a reasonable amount of work during the six-week period during which he was precluded from producing tinplate. Sir Gorrell Barnes stated: The contract is one in which the workman is obliged to remain at work until the expiration of a notice such as that contemplated by the contract. Neither he nor his employer can put an end to the contract except in accordance with the terms provided as to notice … So that there is a binding obligation to work, and it seems to me that there must be a necessary implication — an implication arrived at by applying the principles which Bowen L.J. laid down in The Moorcock — that, unless restricted by something else, an employer ought to find work to enable the workman to perform his part of the bargain, namely, to do his work.242

Courts have used various phrases to express the amount of work that must be provided to an employee.243 Perhaps the most felicitous expression is that of Lord Alverstone CJ in Devonald v Rosser: ‘the necessary implication to be drawn from this contract is at least that the master will find a reasonable amount of work up to the expiration of a notice given in accordance with the contract’.244 8.44 When an employee earns all of his or her remuneration through commission,245 or partly by commission and partly by wages, then a term [page 525] is usually implied that the employee is to be provided with a reasonable amount of work to enable the employee to earn commission.246 It is probably correct to say that the majority of middle to upper management employees are now partly remunerated by commissions or bonuses or through profit share schemes. For such employees, if they are not permitted by their employers to perform work then they lose an opportunity to earn remuneration. An employee should be permitted ‘to earn the best commission he can make’247 and preventing the employee earning his or her commission is a breach of the contract.248 This is probably an application of the principle that it is a breach of the contract for an employer to prevent an employee

fulfilling a promissory condition precedent to the earning of remuneration.249 For example, in Rubel Bronze the employee, a general manager, was employed on a fixed term contract on salary and a portion of the net profits of the business. The employer purported to suspend the plaintiff from the exercise of his duties pending an investigation as to his efficiency. The employer continued to pay his salary, but appointed a replacement, required that the employee deliver up cash and his keys, and informed him that he must not return to the premises. These acts were a repudiation of his contract. McArdle J stated: Here the plaintiff might become entitled to a large commission on the net profits [if made] of the company. He had therefore the right to ask that he should have a full opportunity of earning such commission. The defendants wholly deprived him of such opportunity.250

[page 526] The principle does not only apply to managerial staff;251 it also applies to hairdresser’s assistants, photographers and boners in an abattoir.252 It is unclear whether the term will be implied when there is an indirect connection between the remuneration and the work performed by the employee. The conceit of profit sharing schemes, for example, is that the work of each employee adds to the profitability of the ‘joint venture’. There may be a distinction between remuneration earned as the result of labours of the employee (where the term would be more likely to be implied) and remuneration earned as the result of successes for which the employee was not responsible,253 but recent authority suggests otherwise. In the Blackadder litigation the employee’s remuneration was based on the tally of the team. He could, indirectly, increase his remuneration by additional exertion. In the Full Court of the Federal Court, Tamberlin and Goldberg JJ suggested that the obligation to provide work did not arise as the additional remuneration of the employee ‘does not depend upon Mr Blackadder’s individual work or productivity but rather on the output and productivity of the group of employees as a whole’. On appeal Callinan and Heydon JJ stated ‘the appellant’s remuneration here could be affected by the actual work that he did, a matter which might of itself at common law justify

an order that he be provided with actual work to do’.254

Promises to continue to conduct the business 8.45 There are numerous cases concerning whether an employee can recover damages when the employer ceases to conduct a business and thereby prevents the employee from earning remuneration, such as a commission or piece rates.255 It is probably impossible to present a [page 527] coherent synthesis of all of those cases as, frankly, some are inconsistent. The best approach, as always, is to first examine the terms of the contract to ascertain if there is an express or implicit promise to continue the business during the course of the employment or grant the employee a continuing benefit. If there is no such promise, the next step is to ascertain whether a term can be implied in fact by applying the ordinary test: see 5.53. Care needs to be taken in comparing cases concerning the implication of a term to provide work in an agency contract with cases concerning such an implication in employment contracts. There is a distinction between the two — employees usually exclusively serve the employer (whereas agents often may perform other work) and it is more reasonable to infer an obligation to provide remunerative work to an employee who is financially completely dependent on the employer.256

Discretion to provide work and want of mutuality 8.46 In some contracts the employer does not promise to provide work, retains an unlimited discretion as to whether work will be assigned and will only pay for work that is assigned to the employee. If such a contract binds the employee to perform work, but imposes no obligation on the employer to provide work, it may fail for want of mutuality.257 Similarly, a term requiring exclusive service by an employee, without an express or implied obligation to provide work or remuneration to the employee, may be an unreasonable restraint of trade as it might condemn the employee to unemployment for the

course of the contract. For example, in Capital Aircraft Services Pty Ltd v Brolin the worker was engaged on a casual basis under a two-year contract. He was obliged to exclusively serve the employer, but there was no obligation to provide work to the worker. The absence of any express or implied duty to provide work [page 528] resulted in the exclusive service term being an unreasonable restraint of trade.258

Appointments to perform specific duties 8.47 There is a somewhat ill-defined exception to the general rule based on what was said by Asquith J in Collier v Sunday Referee (Collier’s case).259 That case concerned the chief sub-editor of a Sunday newspaper, who had been appointed for a two-year term. After eight months the newspaper was sold and the purchasers ceased publication of the newspaper. The sub-editor claimed the employer’s action was a breach of his contract. Asquith J outlined the general rule and its exceptions and stated: It is true that a contract of employment does not necessarily, or perhaps normally oblige the master to provide the servant with work. The plaintiff was not employed to perform certain functions at large. He was not engaged to do the kind of work commonly done by any chief subeditor, but was employed to be the chief sub-editor of a specific Sunday newspaper, and the defendants made it impossible for him to remain so by discontinuing publication of that newspaper. By so doing they destroyed the office to which they appointed him.260

The decision in Collier’s case is somewhat odd. There is nothing stated in the facts that suggests that the duties of a chief sub-editor of a Sunday newspaper are not ‘the kind of work commonly done by any chief subeditor’, such as the chief sub-editor of a Saturday newspaper. Perhaps all that was meant was that Collier was the chief sub-editor at this particular newspaper, filling a specific job with defined duties. It is important to note that Asquith J does not refer to a ‘specific and unique’ office; he does not use the word ‘unique’ at all. The gloss ‘unique’ has been added repeatedly in later cases261 and most cases that have applied this aspect of the decision in

Collier’s case have concerned specialised positions occupied by only one employee in the organisation.262 Another [page 529] unusual aspect of the decision is that it is not clear what is meant by the reference to the ‘office’ held by the employee. Being the sub-editor is not an office in any ordinary sense. Asquith J said the case resembled Driscoll v Australian Royal Mail Steam Navigation Co.263 That case concerned the fireman aboard The Australian which was sailing for India. A fireman is not an office in the ordinary sense of the word. 8.48 By way of comment it is suggested that there is a better explanation of Collier’s case. The law recognises that an employer breaches a contract when it fails to permit an employee to perform all of the duties associated with a promised position: The general rule is that a contract by which a person is employed in a specific character is to be construed as obliging him to render, not indeed all service that may be thought reasonable, but such service only as properly appertains to that character.264

Directing an employee appointed as the managing director to perform the duties of a cleaner is a breach of the contract. Serious, non-consensual diminutions of the employee’s status or responsibilities may amount to a serious breach or repudiation of the contract.265 Status in this sense refers to the relative standing of the employee, not necessarily a position of high dignity and privilege.266 The position will be different if the contract permits the demotion or alteration of duties (or does not expressly or implicitly specify the duties of the employee).267 The law recognises that denying an employee the work associated with a promised position is a breach, notwithstanding the retention of remuneration and even the title associated with that position. If it is a breach for an employer to seriously reduce the promised responsibilities of an employee, then it is suggested that it will almost always be a breach for the employer to completely abolish the responsibilities of the employee attached to that position by not providing work. On this view, the employer breaches the contract when an employee is promised a particular position and the

employer does not provide the employee with [page 530] available work to enable the employee to perform the duties associated with that position. If this analysis is correct, the right to be provided with work is implicit in the appointment and does not need to be justified by reference to an implied term. Engaging a managing director to play the part of managing director is analogous to engaging an actress to play a particular part — the appointment is express (or at least implicit) and no implied term is necessary.268

Effect of a breach of the duty 8.49 Where there is an obligation to provide work it is usually either a condition or an intermediate term. A refusal to provide work in accordance with the contract will often amount to a repudiation or a serious breach justifying termination.269 A breach of the term entitles the employee to recover damages that are assessed according to the principles discussed in 14.91. When an employer has breached the obligation to provide work then a restraint of trade clause will ordinarily not be enforced against an employee.270

A comment on the general rule 8.50 The general rule has come under attack in recent years, both academically and judicially, as noted above.271 There have been numerous suggested reformulations of the general rule, often tentatively advanced in dicta. There are three broad approaches to possible reform, though they overlap. The first is to restate the rule as a positive right to work; the second is to more clearly define when an employer may refuse to provide work; and the third is to expand the exceptions to the general rule. It is suggested that those exceptions now cover a significant proportion of the skilled workforce: see 8.40–8.48.

[page 531]

Does the performance of work benefit both parties? 8.51 The general rule, and its exceptions, appear to be manifestations of a broader legal principle, namely that the employer is obliged to provide work when that performance benefits the employee as well as the employer. In the United States, courts approach issues concerning the right to work with this principle in mind.272 If the performance of work is only for the benefit of the employer, then the employer can decline to accept that benefit by refusing to provide work. The common law currently recognises some benefits received by employees, but not others. The common law recognises remuneration as a benefit;273 for public performers it recognises the benefits of the publicity associated with the employment;274 for some employees it recognises the benefits of skill acquisition and retention;275 and it sometimes recognises the benefits of an employee acquiring or retaining a particular status through employment.276

Job satisfaction and self-worth 8.52 One largely unresolved issue is whether the law should recognise other benefits, such as job satisfaction. There is certainly some judicial support for the notion that job satisfaction, and related concepts, are a benefit of employment.277 However, it is suggested that there remain significant problems in recognising job satisfaction as a contractual benefit. For example, how is the court to measure the loss or denial of satisfaction? Is there always a breach when the employee is denied an [page 532] opportunity to work, or does the existence of the breach depend on the state of mind of the employee? Are damages to be awarded for a breach and, if so, is the award of damages precluded on public policy grounds?278 Does the state of the employee’s satisfaction with the work prior to the denial of work alter the conclusion that a breach has occurred? That is, would the obligation

be breached when an unskilled, alienated and dissatisfied worker is paid and allowed to go surfing?279

No right to deny an employee appropriate, available work? 8.53 It is suggested that a more persuasive approach is to re-characterise the issue in terms of a negative stipulation rather than a positive right to work; namely, that an employee cannot be denied work when work of an appropriate kind is available.280 As Rothman J has observed: [There] is a significant and crucial distinction between a duty to provide work and a direction not to perform work that is otherwise available. The employment of a cook would not prevent the employer from dining out. When the employer dines out (or indeed chooses to cook himself or herself) there is, in fact, no work for the cook to perform. … The issue of whether, in the circumstances of an employment situation, an employer is entitled to direct an employee not to perform work will always depend upon the circumstances of the direction, the work that is not to be performed and the terms of the contract of employment. Where one is dealing with a position that is both senior and highly skilled, it is less likely that the terms of the contract of employment import a term that the employer can, indefinitely, require the employee not to perform work.281

This approach resolves the oft raised and valid objection to the implication of a positive right to work for waged employees that there [page 533] may simply be insufficient available work to be performed.282 However, the approach taken by Rothman J might be criticised as concealing a judicial sleight of hand. His Honour appears to commence with the proposition that a contract does not permit the employer to require the employee not to perform work. He then finds that the implication of a term permitting an employer to direct the employee not to perform work for an indefinite period would be unjustified when such work is available. However, the correct commencement point may be to accept that ordinarily the contract does not require the employer to provide work except in certain defined cases, and then ascertain whether there should be an implied term requiring the provision of work.283

Providing available work and garden leave

8.54 One of the problems with the general rule (which would be cured by adopting the approach Rothman J takes) concerns the operation of the law governing terms in restraint of trade. Currently the general rule permits an employer to place an employee on garden leave indefinitely. Most employees are bound to exclusively serve the employer. Exclusive service clauses are in restraint of trade, but are almost always reasonable restraints: see 16.28. The reasonableness of the restraint is not only gauged by assessing the interests of the employer and the employee, but also by the public interest in allowing the employee to be restrained from exercising his or her skills. If an employee is engaged under a contract that spans years, and the employer had the right to deny work for the whole period, it is unlikely to be in the public interest. The issue has arisen and was commented on in dicta in TFS Derivatives Limited v Morgan where Cox J stated, in relation to a clause permitting six months’ garden leave: The effect of it would be to keep this defendant out of the employment completely and unable, therefore, to exercise his skills as a broker in any capacity. A broker’s skills in the market place would tend, it seems to me,

[page 534] to atrophy at least to some extent during six months enforced leave. That would be neither reasonable inter partes or in the public interest.284

Conclusion 8.55 In whatever form the right to be provided with work, or the limitation on the power to direct an employee not to perform available work, is expressed, a nuanced approach is necessary. Stating the entitlement to be provided with work as an unqualified proposition would be unreasonable. The most obvious qualification is that no work needs to be provided if there is no work, or perhaps no profitable work, to be performed.285 The existence and scope of any other qualifications depends on the circumstances, but some may be as follows. The duty of mutual trust and confidence usually requires that serious allegations should be properly dealt with, and so there may need to be a qualification on any right to perform work so as to prevent an employee attending work for a reasonable period while serious allegations are

investigated. There should perhaps be a right to alter the duties of an employee, particularly during a notice period, so the employee can hand over his or her work to a successor. During the notice period it might be reasonable to prevent an employee, soon to commence with a competitor, from engaging in certain activities such as future planning or to limit the work provided to an employee who has breached the contract.286 The only Australian appellate authority that might be thought to limit the reformulation of the duty suggested in 8.53 is Mann v The Capital Territory Health Commission.287 Dr Mann, a surgeon, alleged that there was a term implied in fact that the employer would ‘furnish [him] with surgical work of a quantity and kind suitable for a senior and experienced general surgeon’. The majority (Fox and Kelly JJ) were at pains to point out that the term alleged imposed an absolute duty and that the employee did not press the implication of alternative terms he [page 535] initially pleaded.288 The term alleged in Mann did not take into account the prospect that work might not be available through no fault of the employer — that is, the term alleged was that work would be provided whether it was available or not. The employer could not furnish patients to Dr Mann for surgery for a number of reasons; for example, patients might request their own doctor instead of Dr Mann; referring doctors might not refer a patient to Dr Mann as they might not think he was a suitable surgeon; or the employer could not guarantee a steady supply of patients to operate on. As the majority stated: ‘the vicissitudes attending the employment were too many and too varied to allow the term to be implied’.289 Due to the way the matter was pleaded and decided, the ratio in Mann is quite confined.

THE EMPLOYER’S DUTY OF CARE Introduction 8.56 Employers have a duty to take reasonable care for the safety of their

employees.290 A negligent employer who breaches the duty is liable for damages for breach of contract or for negligence. Proceedings can also be commenced under occupational health and safety legislation to enforce that legislation and prosecute the employer for any contraventions.291 The [page 536] contractual, tortious and statutory foundations of this duty are discussed in 8.57–8.59. The nature of the duty and the standard of care required are analysed in 8.60 and 8.65 respectively. The four most common areas in which the duty arises are discussed in 8.69–8.74. In 8.75 there is a discussion of the limits on recovery of damages for breach of the duty. The liability of an employer for an injury to an employee occurring in the course of employment can arise in at least four different ways. First, an employer whose negligence causes the injury may have a direct liability because it has failed to comply with its contractual or tortious duty of care: see 8.57. Second, where the employer delegates the performance of the duty to another, the employer is still directly liable for any contravention of the duty as it is not delegable: see 8.61. Third, the employer is vicariously liable for the tortious conduct of its employees committed in the course of employment: see 8.62. It is not the negligence of the employer that attracts vicarious liability; it is the negligence of the employee for whom the employer is vicariously liable. Fourth, the employer can be liable for penalties under the occupational health and safety laws operating in each jurisdiction: see 8.58.

Sources of the duty The concurrent and largely co-extensive duties in tort and contract 8.57 The duty of care imposed on employers arises in both contract and tort. Contracts of employment contain a term implied in law that the employer will take reasonable care for the safety of its employees.292 Employers also owe an obligation in tort to take reasonable care for the safety of its employees.293

The Commonwealth, and most states and territories, have enacted identical laws governing work health and safety that imposes concurrent and largely co-extensive statutory duties. 294 [page 537] The duty of care owed in tort corresponds with, and is concurrent with, the duty of care created by the implied term of the contract.295 An employee need not elect between pursuing an action in contract or in tort.296 An employee may commence proceedings claiming alternative remedies for breach of contract or negligence and seek the most favourable judgment that may flow from either cause of action.297 There are some differences between the causes of action in tort and contract. For example, different limitation periods may apply; the causes of action may accrue on different dates; there may be different entitlements to an award of interest; and there may be differences in assessing the remoteness of the damage caused.298 In Australia, it has been the practice for employees to sue their employers for breach of the duty of care in tort.299 Prior to 2002 an employee would benefit from suing in contract as their contributory negligence would not reduce an award of damages.300 This advantage has now been removed by statutes in each jurisdiction which provide that damages awards in both tort and contract can be reduced to account for the employee’s contributory negligence.301 Exemplary damages may be awarded in tort to punish, deter and condemn the employer if the employer’s breach of duty was committed [page 538] with contumelious disregard for the safety or rights of the employee.302 There may be such contumeliousness where an employer consciously disregards the employee’s health and chooses to spend its money on increasing profits rather than on implementing known safeguards.303 Exemplary damages are

not recoverable in an action for breach of contract.304

The primary duty under the WHS Acts 8.58 Most jurisdictions in Australia have enacted a common WHS Act.305 The model WHS Act was drafted with the aim of harmonising occupational health and safety legislation throughout Australia. The primary duty imposed by s 19 of the WHS Act, adapted to apply to employment, relevantly states: (1) [An employer] must ensure, so far as is reasonably practicable, the health and safety of: (a) [employees] engaged, or caused to be engaged by the [employer]; and (b) [employees] whose activities in carrying out work are influenced or directed by the [employer]; while the [employees] are at work in the business or undertaking. … (3) Without limiting subsections (1) and (2), [an employer] must ensure, so far as is reasonably practicable: (a) the provision and maintenance of a work environment without risks to health and safety; and (b) the provision and maintenance of safe plant and structures; and (c) the provision and maintenance of safe systems of work; and (d) the safe use, handling and storage of plant, structures and substances; and (e) the provision of adequate facilities for the welfare at work of [employees] in carrying out work for the business or undertaking, including ensuring access to those facilities; and (f)

the provision of any information, training, instruction or supervision that is necessary to protect all persons from risks to

[page 539] their health and safety arising from work carried out as part of the conduct of the business or undertaking; and (g) that the health of [employees] and the conditions at the workplace are monitored for the purpose of preventing illness or injury of [employees] arising from the conduct of the business or undertaking.

The primary duty established under the WHS Act, like the general duties imposed by many of its predecessor provisions, generally imports concepts that are applicable from the law of negligence.306 There are some differences. The primary duty of care is imposed on a ‘person conducting a business or

undertaking’. The duty is owed to ‘workers’. These terms are defined in ss 5 and 7 of the WHS Act respectively. They are broader than the categories of ‘employer’ and ‘employee’.307 Another difference is that there can be a breach of the primary duty under the WHS Act even though the breach does not cause damage to the employee. In contrast, for a cause of action in negligence to arise there must be damage to the employee. As a consequence, establishing a breach of the WHS Act does not require that an injury be suffered by an employee or that the injury be foreseeable.308

The relationship between statute and the common law 8.59 The WHS Act largely replicates the common law duty owed to employees, though as mentioned in 8.58 in some areas it extends that duty. A breach of a statutory obligation may provide the foundation for a cause of action in tort when the purpose of the statutory obligation is to protect the employee’s interests by way of such an action.309 The WHS Acts explicitly state that they do not confer a civil right of action in relation to a contravention of the statutory duties created by the Act.310 In many areas the statute and common law coincide in the obligations they impose on employers and the precautions they require an employer to take for the protection of the safety of employees. The failure to comply with the statutory requirements operates as evidence of negligence. Simply because an employer’s act does not contravene the [page 540] statute does not mean the act might not be a breach of the contractual or tortious duty of care.311

The nature of the duty 8.60 Employers have a duty to take reasonable care for the safety of their employees.312 It is an ongoing, continuing duty to maintain safety,313 owed to employees as individuals.314 The duty is to ensure that reasonable care is

taken to avoid exposing employees to unnecessary risks of injury,315 to prevent accidents316 and to: … take reasonable care for the safety of the employee by providing proper and adequate means of carrying out his work without unnecessary risk, by warning the employee of unusual or unexpected risks, and by instructing the employee in the performance of his work where instructions might reasonably be thought to be required to secure the employee from danger of injury.317

A personal and non-delegable duty 8.61 The duty of care, and each aspect of the duty,318 is personal to the employer and non-delegable.319 The employer cannot avoid liability by delegating the performance of the duty to another.320 An employer who [page 541] does delegate the performance of the duty remains liable if the delegate fails to perform, or inadequately performs, the duty.321 Similarly, the WHS Act requires the employer, so far as is reasonably practicable, to ensure the health and safety of workers and to ensure that health and safety is not put at risk from work carried out as part of the employer’s business.322 An employee who is injured as a result of the negligence of the employer’s delegate (such as an independent contractor or a fellow employee) may recover damages from the employer for a breach of the duty, unless the injury was caused by the delegate’s intentional default.323 The employer will be directly liable for the negligence of the delegate, notwithstanding that the employer exercised reasonable care and skill in the selection of a competent delegate.324 The duty of care requires the employer to both take reasonable care and ensure that reasonable care is taken when the performance of the duty is delegated.325 The employer’s duty to take reasonable care for its employees, like a school’s duty to its students, is higher than an ordinary duty of care and for this reason is non-delegable.326 Even if an employee is also a director and in control of the company which employs him or her, the company is a

separate legal entity and personally owes the duty of care of an employer to its employee.327 In the employment relationship the employer has the exclusive responsibility for the safety of the equipment, the safety of the premises [page 542] and the safety of the system of work to which it subjects its employees. Employees have no choice but to accept and rely on the employer’s provision and judgment in relation to these matters. The consequence is that in these respects the employee’s safety is in the hands of the employer. The employee can reasonably expect therefore that reasonable care and skill will be taken.328 The non-delegable duty of care is imposed by reason of these features of the employment relationship.329 One of the reasons the nondelegable duty is imposed is because the employer can direct its employees to go into harm’s way and can control the conditions and system of work.330

The vicarious liability of employers 8.62 An employer is vicariously liable for the tortious conduct of its employees committed in the course of employment.331 If an employee is injured due to the negligence of a fellow worker, and the fellow worker’s act was performed in the course of employment, then the employer is liable in tort for the damage caused by that act. It is not the negligence of the employer that attracts vicarious liability; it is the negligence of the fellow employee for whom the employer is vicariously liable. As to the meaning of the course of employment, see 8.63. The rationale for vicarious liability is rooted in policy, but its analytical basis remains obscure.332 Vicarious liability does not apply to non-tortious conduct. An employer is not vicariously liable for a breach of a statute by its employees. Many statutes creating obligations in the context of employment, such as the Fair Work Act, impose obligations on the employer directly. There is no need to resort to the principle of vicarious liability in such cases as the failure of the employer to provide the benefits stipulated in the statute will result in direct liability.

Further, many statutes creating obligations in the context of employment effect a form of statutory vicarious liability [page 543] by attributing the conduct of an employee in the scope of his or her employment to an employer.333 Employers are not vicariously liable for the conduct of independent contractors.334 Employers are liable for the failure of the employer’s delegate to perform, or adequately perform, the non-delegable duty of care.335 Thus, if an unsafe method of work caused an employee’s injury, it is irrelevant whether the employer ordered the unsafe method, or failed to order a safe method, or whether fellow employees adopted the unsafe method against the employer’s instructions: in either case, the employer will be liable.336 Where a negligent act is performed by an independent contractor, the employer may be directly liable for the breach of a non-delegable duty of care, but not vicariously liable: see 8.60.

The course of employment 8.63 An employer is only vicariously liable for the conduct of its employees in the course of their employment.337 Many workers’ compensation statutes limit the scope of their protection to injuries arising out of or in the course of employment.338 An employer is vicariously liable for authorised wrongful acts of the employee performed in the course of the employment. This is an application of the rule that principals are liable for the wrongful conduct of an agent within the scope of the agent’s authority.339 Authorised acts done in the course of employment include acts of an employee performing [page 544]

work the employee is engaged to perform, and incidental activities such as those the employer reasonably requires or expects the employee perform to carry out his or her duties.340 These incidental activities include meal and other necessary breaks on or off the employer’s premises,341 travelling between locations at which work is performed,342 attending social, sporting and educational functions at which the employee is required (or perhaps encouraged) to attend343 and temporarily residing away from home to perform work.344 The difficulty in this field lies in distinguishing between the unauthorised acts which are within and those that are outside of the course of the employment. The fact that the employee’s act was committed while at work and during ordinary working hours will not always be sufficient to establish the act was done in the course of employment.345 In dealing with vicarious liability for unauthorised acts, the starting point is the proposition that acts are within the course of employment if they are a wrongful and unauthorised mode of doing the work the employee [page 545] is employed to do.346 Acts that are unlawful may be in the course of employment.347 8.64 A wrongful unauthorised act will be in the course of employment when it was performed in the intended pursuit of the employer’s interests or the intended performance of the contract.348 For example, the negligent performance of a task usually simply involves the careless performance of an allotted task and is clearly within the course of employment.349 The motive of the employee may be relevant. If the employee’s conduct is actuated by spite or a desire for revenge it is less likely to be performed in the intended pursuit of the employer’s interests.350 An employee’s wrongful acts will be in the course of employment ‘when they are acts to which the ostensible performance of his master’s work gives occasion or which are committed under cover of the authority the servant is held out as possessing or of the position in which he is placed as a

representative of his master’.351 If an employer has authorised the employee to perform a class of acts then acts within that class, even if performed wrongfully, will be in the course of employment.352 For example, in Lloyd v Grace, Smith & Co the employee was engaged to deal with certain title deeds received from the employer’s client. He did so in a fraudulent manner for his own benefit. The employer was vicariously liable for the fraud because, even though it did not authorise the particular act of the employee, it had authorised him to do acts within that class.353 In determining whether a wrongful act is performed in the intended or ostensible pursuit of the employer’s interests, it is crucial to identify ‘what the employee is actually employed to do or is held out by the [page 546] employer as being employed to do’.354 For example, in Deatons Pty Ltd v Flew the barmaid threw a glass filled with beer at an unruly customer. She was engaged to serve beer. Throwing a glass of beer at the customer was not part of or incidental to her duties. The conclusion would have been different if she was instinctively defending herself against an assault or was engaged to maintain order in the bar.355 The antithesis of conduct in the course of employment is that the employee was ‘on a frolic of his own’.356 Acts are outside the course of the employment when they are independent of the employment, ‘of which no more could be said than that the employment created the opportunity for the wrongdoing’.357 Wrongful acts of this nature do not involve the employee either intending to pursue the employer’s interests, intending to perform the employee’s duties or ostensibly performing the employer’s work. Where the acts of the employee include physical violence, the nature and seriousness of the act may be relevant in determining if it is an independent act or one within the course of employment.358 There are a range of cases dealing with whether an employee is acting in the course of employment when he or she takes a detour on the way home, or during work hours.359 An act may be within the class of acts which the employee is engaged to

perform notwithstanding the fact that it is contrary to the direction of the employer.360 The crucial question is what was the employee engaged to do. The disobedience of a direction about how to perform a task will not mean the forbidden performance is outside of the course of [page 547] the employment. The disobedience of a direction about what tasks to perform may mean the performance of the forbidden task is outside of the course of the employment.361

Standard of care 8.65 The employer’s duty of care is breached when the employer does not meet the required standard of reasonable care. To establish that there has been a breach of the employer’s duty of care, the employee must prove that: (i) the risk of injury to the employee was reasonably foreseeable; (ii) the employer failed to take the precautions which a reasonable employer in the circumstances would have taken to reduce the risk;362 (iii) the employer’s failure caused the employee’s injury; and (iv) the employee’s injury is not too remote.363 The standard of care imposed on the employer consists of the precautions which a reasonable and prudent employer would have taken to avoid reasonably foreseeable risks of injury.364 The standard is that of a reasonably prudent employer,365 which varies with the circumstances and the risk involved.366 The standard of reasonable care for an employee’s safety is not a low one and in recent decades has become more [page 548] demanding.367 The employer’s duty to its employees has been described as a heavy one whose scope has expanded to reflect the law’s unwillingness to unreasonably burden injured employees whilst enabling their employers to

profit.368

Reasonably foreseeable risk 8.66 In determining if there has been a breach of the duty of care, the first issue is whether a reasonable employer would have foreseen a risk of injury to the employee.369 A risk of injury which is real, and not far-fetched or fanciful, is reasonably foreseeable.370 It is the risk of injury arising from the employer’s operations, rather than the risk of injury arising from the failure to adopt a particular alternative that must be foreseeable.371 In determining the foreseeability of the risk of injury regard must be had to the work being done by the employee and indications from the employee or others warning the employer about the problems that are arising.372 For example, it may be that an employer ought not reasonably to have foreseen a risk of injury if the employee had agreed to perform the duties which caused his or her injury, and the employer had no reason to suspect that the employee was at risk of injury because of any known vulnerability or complaints about the work.373

Precautions taken by a reasonably prudent employer 8.67 After determining that the risk of injury was reasonably foreseeable, the next issue to be addressed is whether the employer failed to take the precautions which a reasonable, prudent employer would have taken [page 549] in the circumstances to reduce the risk.374 Determining the precautions necessary to avoid the risk involves balancing several factors, including: 1. the probability of the injury occurring; 2. the severity of the injury likely to result; 3. the expense, difficulty, inconvenience, inefficiency or impracticality of taking precautions to obviate the risk; and 4. any conflicting responsibilities which the employer may have.375

This approach to determining whether the duty of care has been breached requires a judgment about reasonableness and is sometimes referred to as a ‘calculus’.376 The general standard of reasonable care is objective. However, the content of the standard depends on the particular relationship which gives rise to the duty.377 Thus, the standard of care required is that expected of the reasonable employer in the particular circumstances, rather than merely what is generally expected of a reasonable person.378 The reasonableness of the response must be determined by considering the risk of injury at the time the injury occurred, not by looking back at what has happened.379 The issue is not to be decided by letting hindsight take the place of foresight.380 The onus is on the employee to prove that the employer failed to take reasonable care to minimise the risk of injury.381 The employee may establish the breach by proving that the employer unreasonably failed [page 550] to take protective precautions which a reasonable employer would have taken and which would have eliminated or significantly reduced the danger.382 The employee must show that the reasonable precautions would probably have averted the risk of harm.383 It will be a matter of judgment whether the employer has exercised reasonable care. For example, there may be no breach of the duty where, although the risk of injury is foreseeable, it may nevertheless be slight, the employee experienced, the tasks simple and assistance in the job available.384 To establish a breach the employee must prove there was a real risk of injury and that precautions to obviate the risk were practicable and reasonable.385 In determining what precautions are reasonable, a risk that injury may occur due to the employee’s thoughtlessness, misjudgment, inadvertence, inattention or carelessness must be taken into account, particularly where the work is repetitive or constantly exposes the employee to risk unless there is unremitting care.386 These factors will be less relevant where the injury arises from a simple, isolated task which does not involve risk if ordinary care is used.387

The standard of reasonable care is influenced by changing ideas of justice, current community expectations of a reasonably prudent employer and community concerns for safety.388 As new technology becomes available to prevent injuries, the required standard of care rises.389 If the employer knows of a vulnerability of the employee which will increase the likelihood of the risk of injury or the severity of the injury, that fact must be taken into account in determining the care [page 551] required.390 In ascertaining whether an employer has fulfilled its duty, the court will also take into account the employer’s power to prescribe, warn, command and enforce obedience to its orders.391

Not an absolute duty 8.68 The employer’s duty of care is not an absolute duty: the employer does not warrant the adequacy of equipment, the competence of fellow employees, or the propriety of the system of work.392 The employer is not an insurer of its employees against danger.393 The duty requires only that the employer take reasonable care for their safety, not that it must safeguard them completely from all perils.394 The employer’s duty does not extend to guarding against every conceivable risk, however remote or fanciful.395 An employer will not necessarily exercise reasonable care by applying the custom or practice of the industry. However, the employee bears the onus of proving that an established practice is unsafe.396 Long-established practice may provide evidence of what is reasonably required of the employer.397 The statutory standard established by the WHS Acts require an employer to ensure the health and safety of its employees ‘so far as is reasonably [page 552]

practicable’.398 Relevant factors in determining what is reasonably practicable include:399 1. the likelihood of the hazard or risk eventuating; 2. the degree of harm that would result if the hazard or risk eventuated; 3. what the employer knows, or ought reasonably to know, about the hazard or risk and any ways of eliminating or reducing the hazard or risk; 4. the availability and suitability of ways to eliminate or reduce the hazard or risk; 5. the cost of eliminating or reducing the hazard or risk, including whether the cost is grossly disproportionate to the risk. The employee bears the onus of proving that safety measures were reasonably practicable.400

Aspects of the duty 8.69 The employer’s duty of care can be conveniently analysed under four heads or discrete parts of the duty. An employer must ensure that reasonable care is taken to provide: (i) a safe workplace; (ii) safe equipment; (iii) safe systems of work; and (iv) competent fellow employees.401 These aspects are manifestations of the broader duty of care.402

A safe system of work 8.70 The first aspect of the employer’s duty of care is to ensure that reasonable care is taken to establish, maintain and enforce a safe system of work.403 This aspect of the duty requires the establishment of safe [page 553] work practices and proper supervision to avoid risks of injury.404 If there is a real, foreseeable risk of injury to an employee in the performance of a task, a

prudent employer will ordinarily take reasonable care to devise, and instruct its employees to follow, a method of work or implement adequate safeguards which avoid the risk.405 The WHS Acts require employers to ensure, so far as is reasonably practicable, the provision and maintenance of safe systems of work.406 A ‘safe system of work’ refers to the sequence of tasks to be performed; the lay-out of the job; the conditions in which the work is performed; a uniform, permanent practice, method or system which is adopted.407 However, it does not include isolated, casual acts of an employee of which the employer is not presumed to know and cannot guard against.408 Where an employer fails to provide a safe system of work, to prove a breach of duty the employee must show that available measures would have been effective in preventing the accident, or rendered it unlikely, and that the employee would have used them had they been available.409 A system of work is not proved to be unsafe merely because an employee has suffered a workplace accident which could have been avoided. It must be shown that the risk of injury was reasonably foreseeable and that a reasonable employer would have taken precautions against it.410 Similarly, merely because a system of work has been used safely for a long time does not mean that the employer’s duty is met.411 An employer may be liable for breach of the duty despite the fact that the unsafe [page 554] system of work was devised and acquiesced in by the employee who was injured.412 8.71 If a safer alternative method of work is not available, the risk of injury may be considered an unavoidable incident of the work to be done.413 However, once the employee identifies a safe and practicable alternative system of work, which would have obviated the risk of injury, the onus is on the employer to establish that it would not be enforceable or practicable.414 The duty of care may require an employer to give clear, reasonable instructions, directions or warnings to its employees as to the manner of

performing the work in order to protect the employees from injury.415 Warnings and instructions may be necessary even if the risk is not unusual or unexpected, such as where it is the common, unsafe practice of employees to ignore obvious dangers.416 The ultimate test is whether, in the circumstances, reasonable care required the employer give a warning. Where the employee is experienced in the work, the employer has provided adequate equipment, the task is simple, and the risk of injury is obvious, the employer may reasonably be able to leave decisions to the employee about how to do the work safely, without providing instructions or warnings, particularly where the employee would not have taken greater care had he or she been warned or instructed by the employer.417

A safe workplace 8.72 The employer’s duty of care includes the duty to take reasonable care to provide and maintain a safe place of work.418 This aspect of the [page 555] duty requires the employer to take reasonable care to ensure that the means of access to and egress from the place of work are safe.419 The workplace includes premises occupied by the employer or a third party in which the employee is working.420 The employer will not be absolved of its duty of care if the employee is required to perform work on the premises of another.421 However, the standard of care required of an employer will differ according to whether the employer has partial, complete or no effective control over the place of work, such as where the employer sends its employee to perform work at premises controlled by a customer. The standard of care in such cases will depend on a range of factors including whether the employer could gain access to the premises to conduct an inspection; whether making inquiries of its employees and the occupier as to the conditions of the premises is sufficient; the employer’s awareness of any danger; the employer’s ability to protect its employees from the danger; and the length of time the employees are required to work on the premises.422

The WHS Acts require employers to ensure, so far as is reasonably practicable, the provision and maintenance of a work environment that is without risks to health and safety; the provision of, and access to, adequate facilities for the welfare at work of employees; and the monitoring of the health of employees and the conditions at the workplace to prevent illness or injury arising from the conduct of the employer’s business or undertaking.423 Accommodation, eating or recreational facilities under the employer’s control or management, which are provided for the employees, must also be maintained in a safe condition.424

Safe equipment 8.73 A further aspect of the employer’s duty of care is to take reasonable steps to provide and maintain safe plant and equipment to [page 556] enable employees to carry out their work safely.425 An employer does not guarantee the absolute safety of the equipment and does not warrant that it will never fail.426 However, since the duty requires continuous vigilance, a reasonably prudent employer will often ensure that the equipment is inspected from time to time to detect risks of possible failure or deterioration.427 Supplying defective equipment to unskilled employees, without having a system to check that the equipment was in proper condition, may be a breach of duty.428 Some defects are inherent in the equipment and are not readily ascertainable. An employer will not be liable if a manufacturer of equipment used by the employee has been negligent, so long as the employer dealt with a reputable vendor, made inspections which a reasonable employer would have made, and had no reasonable means of discovering the defect of the equipment.429 Even if the employer is not obliged to supply equipment, it may be necessary to take reasonable steps to avoid injury if it becomes aware that its employees are using unsafe equipment that exposes the employees to a reasonably foreseeable risk of injury. If an employee chooses to use an unusual or peculiar tool for a job, a prudent employer may be expected to

investigate its suitability.430 The WHS Acts require employers to ensure, so far as is reasonably practicable, the provision and maintenance of safe plant and structures and the safe use, handling and storage of plant, structures and substances.431 The Western Australian legislation also obliges employers to provide protective clothing and equipment to protect employees against risks at the workplace.432 The WHS Acts impose further health and safety [page 557] obligations on employers who have the management or control of a workplace, or fixtures, fittings or plant at a workplace.433

Employing competent fellow workers 8.74 The employer’s duty of care encompasses a duty to take reasonable care to employ competent fellow employees.434 An employee who engages in repeated incompetence, misconduct or violence may constitute a reasonably foreseeable risk of injury to other employees. The employer is obliged to remove that danger in accordance with what a reasonable prudent employer would do, by investigating, reprimanding or dismissing the employee, depending on the nature and frequency of the employee’s conduct.435 Horseplay, rough physical activity and pranks between employees may carry a risk of injury which the employer is required to guard against by counselling or instruction.436 The WHS Acts require employers to ensure, so far as is reasonably practicable, the provision of information, training, instruction or supervision to employees to protect them from workplace risks and enable them to perform their work safely.437

Limits on recovery 8.75 There are statutes operating in each jurisdiction that limit the period during which an employee can commence an action for damages.438 The

limitation periods which apply to the different causes of action vary. The limitation period runs from the date on which the cause of action accrued to the employee. A cause of action in breach of contract accrues when the breach is committed.439 A cause of action in negligence will [page 558] accrue when damage, beyond what could be regarded as negligible, caused by the breach of duty is sustained by the employee, even if the damage is unknown to, and undiscoverable by, the employee.440 In respect of personal injury claims, legislation in most jurisdictions provides for a limitation period of either three years beginning on the date on which the cause of action is discoverable by the plaintiff, or 12 years beginning on the date of the act or omission which caused the damage (whichever expires first).441 The statutes of limitation also allow a court to extend the period within which the action for damages for personal injury may be brought, if it considers that it is just and reasonable to do so.442 Workers’ compensation legislation in each jurisdiction may also affect limitation periods and the rights of employees to bring actions against their employers for damages for breach of the duty of care.443 In some jurisdictions an employee cannot bring an action for damages against his or her employer in respect of personal injury.444 _________________________ 1.

From 2005 to 2010 there were over 10 different types of instruments that had effect under the Workplace Relations Act 1996 (Cth) and their relationship with each other, and with the contract of employment, became the source of unnecessary complexity and confusion. See J Fetter and R Mitchell, ‘The Legal Complexity of Workplace Regulation and Its Impact upon Functional Flexibility in Australian Workplaces’ (2004) 17 AJLL 276.

2.

On notice of termination see 11.36; on personal/carer’s leave see 12.13; on redundancy pay see 13.9.

3.

Department of Education, Employment and Workplace Relations, Trends in Federal Enterprise Bargaining, March Quarter 2011. These figures merge together enterprise agreements made under the Fair Work Act with various kinds of collective agreements made under the Workplace Relations Act 1996 (Cth).

4.

B Creighton and A Stewart, Labour Law, 5th ed, Federation Press, Sydney, 2010, pp 377–84.

5.

B Creighton and A Stewart, Labour Law, note 4 above, pp 384–8.

6.

B Creighton and A Stewart, Labour Law, note 4 above, pp 388–93.

7.

B Creighton and A Stewart, Labour Law, note 4 above, pp 393–6.

8.

See Sallehpour v Frontier Software Pty Ltd (2005) 139 IR 457; [2005] FCA 247 at [45] and Nikolich v Goldman Sachs J B Were Services Pty Ltd [2006] FCA 784 at [166]–[177] (varied (2007) 163 FCR 62; [2007] FCAFC 120).

9.

B Creighton and A Stewart, Labour Law, note 4 above, pp 401–3.

10.

In South Australia and the Northern Territory, it is three months’ leave after 10 years’ service; in Tasmania it is three months’ leave after 15 years’ service; in the Australian Capital Territory it is 1.4 months’ leave after seven years’ service.

11.

Long Service Leave Act 1976 (ACT); Long Service Leave Act 1955 (NSW); Long Service Leave Act 1981 (NT) Ch 2; Industrial Relations Act 1999 (Qld) Pt 3; Long Service Leave Act 1987 (SA); Long Service Leave Act 1976 (Tas); Long Service Leave Act 1992 (Vic); and Long Service Leave Act 1958 (WA).

12.

B Creighton and A Stewart, Labour Law, note 4 above, pp 400–1.

13.

For example, cl 5 of the Building and Construction General On-site Award 2010 states: ‘The employer must ensure that copies of this award and the NES are available to all employees to whom they apply either on a notice board which is conveniently located at or near the workplace or through electronic means …’.

14.

Fair Work Act s 535 and Fair Work Regulations 2009 (Cth) regs 3.31–3.44. See 5.4.

15.

Malik v Bank of Credit and Commerce International SA [1998] AC 20 at 34–5, 45–6; [1997] 3 All ER 1.

16.

Quinn v Gray (2009) 184 IR 279; [2009] VSC 136 at [13]–[14]; Thomson v Orica Australia Pty Ltd (2002) 116 IR 186; [2002] FCA 939 at [141] and Hem v Cant (2007) 159 IR 113; [2007] FCA 81 at [20]–[23].

17.

Gillies v Downer EDI Ltd [2011] NSWSC 1055 at [200]; Wright v Groves [2011] QSC 66 at [54]–[58]; Downe v Sydney West Area Health Service (No 2) (2008) 71 NSWLR 633; 174 IR 385 at [320]–[328]; Rogan-Gardiner v Woolworths Ltd [2010] WASC 290 at [125]; Russell v Trustees of the Roman Catholic Church (2007) 69 NSWLR 198; 167 IR 121; [2007] NSWSC 104 at [120]–[135] (aff’d (2008) 72 NSWLR 559; 176 IR 82; [2008] NSWCA 217); Morton v Transport Appeal Board (2007) 168 IR 403; [2007] NSWSC 1454 at [155]; Daw v Flinton Pty Ltd (1998) 85 IR 1 at 3–4; Jager v Australian National Hotels Pty Ltd (1998) 7 Tas R 437 at 457 (rev’d on other grounds at (2000) 9 TasR 153); Blaikie v SA Superannuation Board (1995) 65 SASR 85 at 106; 64 IR 145 at 165.

18.

Perkins v Grace Worldwide (Aust) Pty Ltd (1997) 72 IR 186 at 191; Burazin v Blacktown City Guardian Pty Ltd (1996) 142 ALR 144 at 151 (but note at 154); Delooze v Healey [2007] WASCA 157 at [32] and Easling v Mahoney Insurance Brokers (2001) 78 SASR 489; [2001] SASC 22 at [99]. See also Shaw v State of New South Wales [2012] NSWCA 102 at [35]–[44] and Irving v Kleinman [2005] NSWCA 116 at [27]. The term was alluded to briefly by the High Court in Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44; 214 ALR 355; 139 IR 309 at [24] and the obligation of mutual trust was alluded to obliquely in Concut Pty Ltd v Worrell (2000) 176 ALR 693; 103 IR 160 at [25] and [51](3).

19.

Russian v Woolworths (SA) Pty Ltd (1995) 64 IR 169 at 174 and Gambotto v John Fairfax Publications Pty Ltd (2001) 104 IR 303 at 309–11.

20.

Malik v Bank of Credit and Commerce International SA, note 15 above, AC at 34–5, 45–6;

Johnson v Unisys Ltd [2003] 1 AC 518; [2001] 2 All ER 801 at [2], [32], [78]; Eastwood v Magnox Electric plc [2005] 1 AC 503; [2004] 3 All ER 991 at [5]; Reda v Flag Ltd [2002] IRLR 747; [2002] UKPC 38 at [45]; Edwards v Chesterfield Royal Hospital NHS Foundation Trust [2012] 2 All ER 278; [2011] UKSC 58 at [1]. Prior to Malik the appellate authorities included Lewis v Motorworld Garages Ltd [1986] ICR 157 at 163, 167 and 169; Bliss v South East Thames Regional Health Authority [1987] ICR 700 at 713–6 and Imperial Group Pension Trust v Imperial Tobacco Ltd [1991] 2 All ER 597 at 605–6; [1991] ICR 524 at 533. 21.

D Brodie, ‘The Heart of the Matter: Trust and Confidence’ (1996) 25 ILJ 121; D Brodie, ‘Mutual Trust and the Values of the Employment Contract’ (2001) 30 ILJ 84; A Brooks, ‘The Good and Considerate Employer: Developments in the Implied Duty of Mutual Trust and Confidence’ (2001) U Tas LR 29; J Riley, ‘Mutual Trust and Confidence: Can Private Contract Law Guarantee Fair Workplace Dealing?’ (2003) 16 AJLL 28; M Freedland, The Personal Employment Contract, Oxford University Press, Oxford, 2003, pp 154–68 and J Riley, Employee Protection at Common Law, Federation Press, Sydney, 2005, Ch 3.

22.

See the dicta in Warren v Dickson [2011] NSWSC 79 at [41]; McDonald v Parnell Laboratories Ltd (2007) 168 IR 375; [2007] FCA 1903 at [83]–[93]; Van Efferen v CMA Corp Ltd (2009) 183 IR 319; [2009] FCA 597 at [80]–[85] and Heptonstall v Gaskin (2005) 138 IR 103; [2005] NSWSC 30 at [19]–[23]. See also Walker v Citigroup Global Markets Pty Ltd (2005) 226 ALR 114; [2005] FCA 1678 at [203]–[204] which concerned the duty of good faith discussed in 8.28–8.32 and not the implied term of trust and confidence.

23.

M Freedland, The Personal Employment Contract, note 21 above, pp 158–61.

24.

See, for example, the specific terms implied in Scally v Southern Health and Social Services Board [1992] 1 AC 294; [1992] 4 All ER 563; Imperial Group Pension Trust v Imperial Tobacco Ltd, note 20 above, and in Malik, note 15 above, at 34–5.

25.

Imperial Group Pension Trust v Imperial Tobacco Ltd, note 20 above, All ER at 605–6; ICR at 533; Woods v WM Car Services Ltd [1982] ICR 693 at 698; Johnson v Unisys Ltd, note 20 above, at [24]; Eastwood v Magnox Electric plc, note 20 above, at [11] and Morton v Transport Appeal Board, note 17 above, at [203].

26.

Wright v Groves, note 17 above, at [55]; Perkins v Grace Worldwide (Aust) Pty Ltd, note 18 above, at 191 and Malik, note 15 above, at 35, 45. See also Concut Pty Ltd v Worrell, note 18 above, at [51].

27.

See the dicta in Warren v Dickson, note 22 above, at [41] and Walker v Zurich Australia Insurance Ltd (2000) 106 IR 23; [2000] QSC 345 at [53] (aff’d on other grounds [2001] QCA 296).

28.

Pearce v Foster (No 2) (1886) LR 17 QBD 536 at 539; Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66 at 72–3 and 81–2 and Concut Pty Ltd v Worrell, note 18 above, at [25]; Wright v Groves, note 17 above, at [55]. See also Delooze v Healey, note 18 above, at [32] and 7.136.

29.

Eastwood v Magnox Electric plc, note 20 above, at [6]; Downe v Sydney West Area Health Service (No 2), note 17 above, at [411]; Shaw v State of New South Wales, note 18 above, at [36]–[37] and [45]–[61]; Malik, note 15 above, at 45 and Johnson v Unisys Ltd, note 20 above, at [18] and [78].

30.

Horkulak v Cantor Fitzgerald International, note 30 above, at 709 (varied [2005] ICR 402) and Malik, note 15 above, at 34.

31.

On trust and corporations, see further at 6.42 and 15.38.

32.

See further at 15.35–15.39; D Brodie, 1996, note 21 above, at 130 and Randall v Aristocrat

Leisure Limited [2004] NSWSC 411 at [448]. 33.

Tullett Prebon Plc v BGC Brokers [2011] IRLR 420; [2011] EWCA Civ 131 at [20].

34.

Turner v Australasian Coal and Shale Employee’s Federation (1984) 6 FCR 177 at 192; 55 ALR 635 at 648; Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 36 FCR 20 at 38; Australasian Meat Industry Employees’ Union v G & K O’Connor Pty Ltd (2000) 100 IR 383; [2000] FCA 627 at [43]; Powell v Brent London Borough Council [1987] ICR 176 at 194; D Brodie, 1996, note 21 above, at 130; D Brodie, ‘Specific Performance and Employment Contracts’ (1998) 27 ILJ 37 at 47; J McMullen, ‘A Synthesis of the Mode of Termination of Contracts of Employment’ (1982) 41 CLJ 110 at 127 referred to in Visscher v Guidice (2009) 239 CLR 361; 258 ALR 651; 187 IR 96 at [54].

35.

Malik, note 15 above, at 36–8 and Burazin v Blacktown City Guardian Pty Ltd, note 18 above, at 152 and 154.

36.

Gillies v Downer EDI Ltd, note 17 above, at [201]; Russell v Trustees of the Roman Catholic Church, note 17 above, at [135]–[141] (aff’d (2007) 69 NSWLR 198; 167 IR 121); RoganGardiner v Woolworths Ltd, note 17 above, at [116]–[125]; Johnson v Unisys Ltd, note 20 above, at [78]; Eastwood v Magnox Electric plc, note 20 above, at [10], [28] and Reda v Flag Ltd, note 20 above, at [45] and [52].

37.

See 14.73, 14.75 and 14.77.

38.

Eastwood v Magnox Electric plc, note 20 above, at [31], [39]; Takacs v Barclays Services Jersey Ltd [2006] IRLR 877 at [56]–[58]; GAB Robins (UK) Ltd v Triggs [2007] 3 All ER 590; [2008] ICR 529 at [32]–[39] and King v University Court of the University of St Andrews [2002] IRLR 252 at [21]–[22] noted in D Brodie, ‘Fair Dealing and the Disciplinary Process’ (2002) 31 ILJ 294.

39.

Bednall v Wesley College [2005] WASC 101 at [72] and London Borough of Enfield v Sivanandan [2005] EWCA Civ 10 at [70]–[78].

40.

Tullett Prebon Plc v BGC Brokers, note 33 above, at [39]–[47].

41.

Transco plc v O’Brien [2002] EWCA Civ 379; [2002] ICR 721 at [16]–[18].

42.

Downe v Sydney West Area Health Service (No 2), note 17 above, at [412]; Nottingham University v Fishel [2000] ICR 1462 at 1493; Helmet Integrated Systems Ltd v Tunnard [2007] FSR 437; IRLR 126 at [33]; Francis v South Sydney District Rugby League Football Club Ltd [2002] FCA 1306 at [267] and Morris v Hanley [2003] NSWSC 42 at [48]. See also Lock v Westpac Banking Corporation (1991) 25 NSWLR 593 at 607–8.

43.

Foggo v O’Sullivan Partners (Advisory) Pty Ltd [2011] NSWSC 501 at [99] per Schmidt J. See Downe v Sydney West Area Health Service (No 2), note 17 above, at [412]; Morris v Hanley, note 42 above, at [48] and Russell v Trustees of the Roman Catholic Church, note 17 above, at [33] (aff’d (2008) 72 NSWLR 559; 176 IR 82; [2008] NSWCA 217).

44.

See 7.34–7.37.

45.

Johnson v Unisys Ltd, note 20 above, at [24]; Eastwood v Magnox Electric plc, note 20 above, at [11]. See also Russell v Trustees of the Roman Catholic Church, note 17 above, at [32]; RoganGardiner v Woolworths Ltd, note 17 above, at [125]– [126] and D Cabrelli, ‘Discretion, Power and the Rationalisation of Implied Terms’ (2007) 36 ILJ 194 at 201–2.

46.

See, for example, the anti-avoidance obligation discussed in 8.32.

47.

Gillies v Downer EDI Ltd, note 17 above, at [204]–[205]; Russell v Trustees of the Roman Catholic Church, note 17 above, at [95]–[119] and [135].

48.

For example, Transco plc v O’Brien, note 41 above, at [20]–[22].

49.

See 8.15.

50.

Malik, note 15 above, per Lord Steyn.

51.

Malik, note 15 above, at 34–5.

52.

Malik, note 15 above, at 45–6; Horkulak v Cantor Fitzgerald International, note 30 above, at [17] (varied [2005] ICR 402); Johnson v Unisys Ltd, note 20 above, at [37]; Wilson v Racher [1974] ICR 428 at 430; D Brodie, 1996, note 21 above, at 124, D Brodie, 2001, note 21 above, at 88–9; H Collins, Justice in Dismissal, Clarendon Press, Oxford, 1992, Ch 1. See further at 1.30.

53.

Malik, note 15 above, at 45; Horkulak v Cantor Fitzgerald International, note 30 above, at 708 (varied [2005] ICR 402); M Freedland, The Personal Employment Contract, note 21 above, pp 154–7.

54.

See, for example, Heptonstall v Gaskin, note 22 above, at [19]–[23].

55.

Eastwood v Magnox Electric plc, note 20 above, at [5]; Malik, note 15 above, at 46; Robinson v Crompton Parkinson Ltd [1978] ICR 401 at 403.

56.

Russell v Trustees of the Roman Catholic Church, note 17 above, at [125]–[127] (aff’d (2007) 69 NSWLR 198; 167 IR 121).

57.

Pearce v Foster (No 2), note 28 above, at 539; the history of this obligation is traced in 7.137.

58.

Blyth Chemicals Ltd v Bushnell, note 28 above, at 81–2. See also Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359 at 378 per Dixon J (‘the contract involved some degree of mutual confidence and required a continual co-operation’); see 7.137 and 7.138.

59.

Concut Pty Ltd v Worrell, note 18 above, at [25] and footnote 20 to that judgment; Russell v Trustees of the Roman Catholic Church, note 17 above, at [129]–[131] (aff’d (2007) 69 NSWLR 198; 167 IR 121); Delooze v Healey, note 18 above, at [32]; Robinson v Crompton Parkinson Ltd, note 55 above, at 403; Woods v WM Car Services (Peterborough) Ltd, note 25 above, at 698.

60.

Irving v Kleinman, note 18 above, at [27]; Wright v Groves, note 17 above, at [54]–[58].

61.

Hitton v Skinner [2001] IRLR 727; Intico (Vic) Pty Ltd v Walmsley [2004] VSCA 90 at [23], [28]–[29].

62.

Wright v Groves, note 17 above, at [61]; cf RDF Media Group Plc v Clements [2008] IRLR 207 at [134].

63.

See 8.16.

64.

Malik, note 15 above, at 45 (emphasis added).

65.

Malik, note 15 above, at 35.

66.

Woods v WM Car Services (Peterborough) Ltd [1981] ICR 666 at 670–1; Lewis v Motorworld Garages Ltd, note 20 above, at 167 and 169 and Imperial Group Pension Trust Ltd v Imperial Tobacco Ltd, note 20 above, All ER at 605–6; ICR at 533. See also Malik, note 15 above, at 47.

67.

Russell v Trustees of the Roman Catholic Church, note 17 above, at [122], [128], [135] (aff’d (2007) 69 NSWLR 198; 167 IR 121); Baldwin v Brighton & Hove City Council [2007] IRLR 232; [2007] ICR 680 at [18]–[40].

68.

Easling v Mahoney Insurance Brokers, note 18 above, at [99]; Woods v WM Car Services (Peterborough) Ltd, note 66 above, at 670–1; Bliss v South East Thames Regional Health Authority, note 20 above, at 714–5; Malik, note 15 above, at 35 and 47; Buckland v Bournemouth University [2011] QB 323; [2010] 4 All ER 186 at [25].

69.

Malik, note 15 above, at 35 and 47; Post Office v Roberts [1980] IRLR 347; see also Transco plc v O’Brien, note 41 above, at [21]–[22].

70.

Easling v Mahoney Insurance Brokers, note 18 above, at [99] per Olsson J; Woods v WM Car Services (Peterborough) Ltd, note 66 above, at 670–1; Malik, note 15 above, at 35 and 47; Horkulak v Cantor Fitzgerald International, note 30 above, at 708 (varied [2005] ICR 402).

71.

Omilaju v Waltham Forest London Borough Council (No 2) [2005] 1 All ER 75 at [14] and [22]; Horkulak v Cantor Fitzgerald International, note 30 above, at [34] (varied [2005] ICR 402).

72.

Malik, note 15 above, at 35; Meikle v Nottinghamshire County Council [2004] EWCA Civ 859; [2004] 4 All ER 97 at [36]–[37].

73.

Warren v Dickson, note 22 above, at [33]–[35]. See also Tullett Prebon Plc v BGC Brokers, note 33 above, at [21] and BearingPoint Australia Pty Ltd v Hillard [2008] VSC 115 at [127].

74.

Gogay v Hertfordshire County Council [2000] IRLR 703; Morton v Transport Appeal Board, note 17 above, at [162].

75.

See 8.20.

76.

Gogay v Hertfordshire County Council, note 74 above; Watson v Durham University [2008] EWCA Civ 1266 at [22].

77.

Hagen v ICI Chemicals & Polymers Ltd [2002] IRLR 31 at 39.

78.

Malik, note 15 above, at 42.

79.

Lewis v Motorworld, note 20 above, at 167 and 169; Connor v Grundy Television Pty Ltd [2005] VSC 466 at [54]; Omilaju v Waltham Forest London Borough Council (No 2), note 71 above, at [14]; Meikle v Nottinghamshire County Council, note 72 above, at [36]–[37]; Horkulak v Cantor Fitzgerald International, note 30 above, at 707 (varied [2005] ICR 402); D Brodie, 1996, note 21 above, at 122–3.

80.

Omilaju v Waltham Forest London Borough Council (No 2), note 71 above, at [16] and [20]; Lewis v Motorworld, note 20 above, at 165, 167 and 169; Horkulak v Cantor Fitzgerald International, note 30 above, at 708 (varied [2005] ICR 402); McDonald v South Australia (2008) 172 IR 256; [2008] SASC 134 at [424]–[439] (rev’d on other grounds (2009) 104 SASR 344; 185 IR 45; [2009] SASC 219). See also Logan v Customs and Excise Commissioners [2003] EWCA Civ 1068. On the effect of cumulative breaches and the last straw principle, see 10.54.

81.

Malik, note 15 above; Johnson v Unisys Ltd, note 20 above, at [18], [24], [37]; Downe v Sydney West Area Health Service (No 2), note 17 above, at [411]; Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 449–50; 131 ALR 422 at 449–50; contra Russell v Trustees of the Roman Catholic Church, note 17 above, at [135]–[141] (aff’d (2007) 69 NSWLR 198; 167 IR 121).

82.

Warren v Dickson, note 22 above, at [38]; note, however, Hart v MacDonald (1910) 10 CLR 417 at 427 and 430; Etna v Arif [1999] 2 VR 353; E Peden and J Carter, ‘Entire Agreement—and Similar—Clauses’ (2006) 22 JCL 1 at 9–10 and C Mitchell, ‘Entire Agreement Clauses: Contracting out of Contextualism’ (2006) 22 JCL 222 at 230. See 5.20 on the exclusion of terms implied in law by entire contract clauses.

83.

South Australia v McDonald (2009) 104 SASR 344; 185 IR 45; [2009] SASC 219 at [237]– [243], [270]; McAleer v University of Western Australia (2007) 159 IR 96; [2007] FCA 52 at [63]; Heptonstall v Gaskin, note 22 above, at [29]; Shaw v State of New South Wales, note 18 above. See 5.49.

84.

United Bank Ltd v Akhtar [1989] IRLR 507 at 512; McLory v Post Office [1992] ICR 758;

Watson v Durham University, note 76 above, at [22]; Imperial Group Pension Trust Ltd v Imperial Tobacco Ltd, note 20 above, 1 WLR 589 at 596–9; Hillsdown Holdings plc v Pensions Ombudsman [1997] 1 All ER 862 at 889–90; Johnson v Unisys Ltd, note 20 above, at [24]. See also Johnstone v Bloomsbury Health Authority [1992] QB 333 at 344 and 349–51; [1991] 2 All ER 293 at 299 and 303–5. 85.

Johnson v Unisys Ltd, note 20 above, at [42]–[46]; Reda v Flag Ltd, note 20 above, at [45]; White v Reflecting Roadstuds Ltd [1991] ICR 733 at 742–3.

86.

Johnson v Unisys Ltd, note 20 above, at [43] and [46]; Intico (Vic) Pty Ltd v Walmsley, note 61 above, at [23].

87.

Bristol Garage (Brighton) Ltd v Lowen [1979] IRLR 86; Buckland v Bournemouth University, note 68 above, at [28]; Woods v WM Car Services (Peterborough) Ltd, note 66 above (aff’d [1982] ICR 693).

88.

Farrell Matthews & Weir v Hansen [2005] ICR 509; Cantor Fitzgerald International v Bird [2002] IRLR 867.

89.

Woods v WM Car Services (Peterborough) Ltd, note 66 above (aff’d [1982] ICR 693).

90.

Greenhof v Barnsley Metropolitan Borough Council [2006] IRLR 98. See also Meikle v Nottinghamshire County Council, note 72 above.

91.

French v Barclays Bank plc [1998] IRLR 646.

92.

Thomson v Orica Australia Pty Ltd, note 16 above, at [146]; French v Barclays Bank plc, note 91 above; Post Office v Roberts, note 69 above. See also Lakshmi v Mid Cheshire Hospitals NHS Trust [2008] IRLR 956 at [29].

93.

Thomson v Orica Australia Pty Ltd, note 16 above, at [147]; Greenhof v Barnsley Metropolitan Borough Council, note 90 above.

94.

Hitton v Skinner, note 61 above.

95.

Martech International Pty Ltd v Energy World Corporation Limited (2007) 248 ALR 353; [2007] FCAFC 35 at [19].

96.

Western Excavating (ECC) Ltd v Sharp [1978] QB 761 at 772; Lewis v Motorworld Garages Ltd, note 20 above; Morrow v Safeway Stores plc [2002] IRLR 9; Horkulak v Cantor Fitzgerald International, note 30 above, at 709–10 (varied [2005] ICR 402); Wood v Freeloader Ltd [1977] IRLR 455; Associated Tyre Specialists (Eastern) Ltd v Waterhouse [1977] ICR 218 at 223.

97.

Wigan Borough Council v Davies [1979] ICR 411; Palmanor Ltd v Cedron [1978] ICR 1008 at 1012; Cantor Fitzgerald International v Bird, note 88 above; Isle of Wight Tourist Board v JJ Coombes [1976] IRLR 413; Horkulak v Cantor Fitzgerald International, note 30 above, at 703 (varied [2005] ICR 402) (frequent use of abusive language, including by the employee, did not sanitise its effect).

98.

Moores v Bude-Stratton Town Council [2000] IRLR 676; Courtaulds Northern Textiles v Andrew [1979] IRLR 84; Hem v Cant, note 16 above, at [23].

99.

Bank of Credit and Commerce International SA v Ali [1999] 2 All ER 1005 at [19]–[20]. See 7.20.

100. Malik, note 15 above. 101. Robinson v Crompton Parkinson Ltd, note 55 above, at 404; Buckland v Bournemouth University, note 68 above, at [12]; Hem v Cant, note 16 above, at [20]–[23]; Gogay v Hertfordshire County Council, note 74 above; Post Office v Roberts, note 69 above; cf Hitton v

Skinner, note 61 above, and Easling v Mahoney Insurance Brokers, note 18 above, at [104]– [107]. 102. Robinson v Crompton Parkinson Ltd, note 55 above, at 404. 103. Bliss v South East Thames Regional Health Authority, note 20 above, at 714–6, on the right of an employer to direct an employee to undergo medical checks, see 7.16. 104. Gogay v Hertfordshire County Council, note 74 above. Garden leave is discussed in 11.72. 105. British Aircraft Corporation Ltd v Austin [1978] IRLR 332; Downe v Sydney West Area Health Service (No 2), note 17 above, at [413]–[414]; W A Goold (Pearmak) Ltd v McConnell [1995] IRLR 516 at 517. 106. Associated Tyre Specialists (Eastern) Ltd v Waterhouse, note 96 above, at 223; Wigan Borough Council v Davies, note 97 above. 107. Howard v Pilkington (Australia) Ltd [2008] VSC 491 at [50] and [138]. 108. Morton v Transport Appeal Board, note 17 above, at [161]; King v University of St Andrews, note 38 above; R v Haringey London Borough Council [2002] ICR 279 at [54]–[61] (breach of the term to proceed with disciplinary proceedings given the state of the employee’s health). The term may not be implied when it is inconsistent with other terms and the regulatory scheme governing the disciplinary hearing; see 8.22–8.23 and McAleer v University of Western Australia, note 83 above, at [63]. 109. Morton v Transport Appeal Board, note 17 above, at [162]. 110. See 11.23. 111. Morton v Transport Appeal Board, note 17 above, at [164]; Bednall v Wesley College, note 39 above; Intico (Vic) Pty Ltd v Walmsley, note 61 above, at [23]. 112. D Brodie, note 21 above, at 126–7; TSB Bank plc v Harris [2000] IRLR 157. 113. Quinn v Gray, note 16 above, at [20]–[21]. 114. Transco plc v O’Brien, note 41 above, at [16]–[18]. 115. Transco plc v O’Brien, note 41 above, at [16]–[20]; FC Gardner v Beresford [1978] IRLR 63. 116. Visa International Service Association v Paul [2004] IRLR 42. 117. Adams v British Airways plc [1996] IRLR 574. See also Reda v Flag Ltd, note 20 above, at [64]– [68]. 118. Johnson v Unisys Ltd, note 20 above, at [21]. 119. Malik, note 15 above, at 38; Eastwood v Magnox Electric plc, note 20 above, at [7]. On the meaning of that term, see 10.35. 120. Eastwood v Magnox Electric plc, note 20 above, at [6]; Thomson v Orica Australia Pty Ltd, note 16 above, at [141], [143]; Morrow v Safeway Stores plc, note 96 above, at [25]; TSB Bank plc v Harris, note 112 above, at [75]–[76]; Hem v Cant, note 16 above, at [22]; Omilaju v Waltham Forest London Borough Council (No 2), note 71 above, at [14]; Woods v WM Car Services Ltd, note 66 above, at 672; Courtaulds Northern Textiles v Andrew, note 98 above, at 86. See also Concut Pty Ltd v Worrell, note 18 above, at [51](4). 121. Malik, note 15 above, at 35–6, 38 and 48; Bliss v South East Thames Regional Health Authority, note 20 above, at 715. 122. Buckland v Bournemouth University, note 68 above, at [32]–[44], [52]–[53]. See also Martech

International Pty Ltd v Energy World Corporation Limited, note 95 above, at [19] and 10.66. 123. Russell v Trustees of the Roman Catholic Church, note 17 above, at [33] (aff’d 72 NSWLR 559; 176 IR 82; [2008] NSWCA 217); Thomson v Orica Australia Pty Ltd, note 16 above, at [141], [143]; Morton v Transport Appeal Board (No 1), note 17 above, at [206]–[213]. On repudiation, see 10.21. 124. See, for example, the Fair Work Act s 386 which governs unfair dismissals. 125. Renard Constructions (ME) Pty Ltd v Minister for Public Works [1992] 26 NSWLR 234; Hughes Aircraft Systems International v Airservices Australia (1997) 76 FCR 151 at 191–3; 146 ALR 1 at 37–8; Alcatel Australia Ltd v Scarcella [1998] 44 NSWLR 349 at 368–9; Garry Rogers Motors (Aust) Pty Ltd v Subaru (Aust) Pty Ltd [1999] FCA 903 at [34]–[37]. 126. See J Riley, Employee Protection at Common Law, Federation Press, Sydney, 2005, Ch 3; E Peden, Good Faith in the Performance of Contracts, LexisNexis Butterworths, Sydney, 2003; J Carter et al, Contract Law in Australia, 5th ed, LexisNexis Butterworths, Sydney, 2007, Ch 2 and in the context of employee remuneration, M Moir, ‘Discretion, Good Faith and Employer Control Over Executive Remuneration’ (2011) 24 AJLL 121 at 132–6. 127. Downe v Sydney West Area Health Service (No 2), note 17 above, at [320]–[328]; RoganGardiner v Woolworths Ltd, note 17 above, at [125]–[126]; Foggo v O’Sullivan Partners (Advisory) Pty Ltd, note 43 above, at [89] and [98]. See also Dye v Commonwealth Securities Limited [2010] FCA 720 at [47]–[50]. 128. Renard Constructions (ME) Pty Ltd v Minister for Public Works, note 125 above, at 263–70; Hughes Bros Pty Ltd v Trustees of the Roman Catholic Church (1993) 31 NSWLR 91; Burger King Corporation v Hungry Jack’s Pty Ltd [2001] NSWCA 187; (2001) 69 NSWLR 558 at [141]–[187]; Alcatel Australia Ltd v Scarcella, note 125 above, at 363–9; United Group Rail Services Ltd v Rail Corporation of New South Wales (2009) 74 NSWLR 618; [2009] NSWCA 177 at [58]. 129. Walker v Citigroup Global Markets Pty Ltd, note 22 above, at [203]–[204] (aff’d on other grounds (2006) 233 ALR 687). See also Aldersea v Public Transport Corporation (2001) 3 VR 499; 183 ALR 545; [2001] VSC 169 at [73]–[81] concerning an analogous term sought to be implied in fact. 130. Horkulak v Cantor Fitzgerald International [2005] ICR 402; [2004] EWCA Civ 1287 at [46]– [49]. See generally D Cabrelli, note 45 above. 131. Horkulak v Cantor Fitzgerald International, note 130 above, at [46]–[49]; Whittaker v Unisys Australia Pty Ltd (2010) 26 VR 668; 192 IR 311; [2010] VSC 9 at [114]; Hussain v Surrey and Sussex Healthcare NHS Trust [2011] EWHC 1670 (QB) at [111]–[112]. 132. Silverbrook Research Pty Ltd v Lindley [2010] NSWCA 357 at [5]–[9]; Rankin v Marine Power International Pty Ltd (2001) 107 IR 117; [2001] VSC 150 at [411]; Mallone v BPB Industries [2002] EWCA Civ 126 at [36]–[39]; Foggo v O’Sullivan Partners (Advisory) Pty Ltd, note 43 above, at [62]; Clark v Nomura International Plc [2000] IRLR 766 at 774; FC Gardner v Beresford, note 115 above; Horkulak v Cantor Fitzgerald International, note 130 above, at [46]– [72]; Clark v BET plc [1997] IRLR 348; Keen v Commerzbank AG [2007] ICR 623; [2006] EWCA Civ 1536 at [47]–[60]; D Cabrelli, note 45, at 195. See further at 14.56. 133. McClory v Post Office [1993] 1 All ER 457 at 464–5. See also Downe v Sydney West Area Health Service (No 2), note 17 above, and Watson v Durham University, note 76 above, at [22]. 134. Imperial Group Pension Trust Ltd v Imperial Tobacco Ltd, note 20 above, ICR at 533; All ER at 605–6; Lock v Westpac Banking Corporation, note 42 above, NSWLR at 607–8; Hillsdown

Holdings plc v Pensions Ombudsman, note 84 above, at 889–90. 135. United Bank Ltd v Akhtar, note 84 above, at [44]–[46]. 136. Van Efferen v CMA Corp Ltd, note 22 above, at [86]; Johnson v Unisys Ltd, note 20 above, at [36]; W A Goold (Pearmak) Ltd v McConnell, note 105 above. 137. Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193; [2000] FCA 889 at [152]. 138. FC Gardner v Beresford, note 115 above. See also Wishart v National Association of Citizen Advice Bureaux [1990] ICR 794 at 805–6 and Transco plc v O’Brien, note 41 above, at [20]– [22]. 139. Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234 at 263; Garry Rogers Motors (Aust) Pty Ltd v Subaru (Aust) Pty Ltd, note 125 above, at [35]. 140. Gillies v Downer EDI Ltd, note 17 above, at [204]–[205]; Tasmania Development and Resources v Martin (2000) 97 IR 66; [2000] FCA 414 at [27] and [30]. 141. Johnson v Unisys Ltd, note 20 above, at [47]. 142. Reda v Flag Ltd, note 20 above, at [45]. 143. Adin v Sedco Forex International Resources Ltd [1997] IRLR 280; Aspden v Webbs Poultry and Meat Group (Holdings) Ltd [1996] IRLR 521; Hill v General Accident Fire and Life Assurance Corporation plc [1998] IRLR 641; Villella v MFI Furniture Centres Ltd [1999] IRLR 468; Brompton v AOC International Ltd [1997] IRLR 639 at 643; Briscoe v Lubrizol Ltd (No 2) [2002] IRLR 607 at [21], [64] and [109]; Takacs v Barclays Services Jersey Ltd, note 38 above, at [78] and D Cabrelli, note 45 above, at 198–200. See also Jenvey v Australian Broadcasting Corporation [2003] ICR 79 at [26]; Fardell v Coates Hire Operations Ltd (2010) 201 IR 64; [2010] NSWSC 346 at [100] on use of notice clauses to avoid redundancy entitlements. 144. See the cases at note 125. 145. Downe v Sydney West Area Health Service (No 2), note 17 above, at [411]; Reda v Flag Ltd, note 20 above, at [45]. See 8.22–8.23. 146. Russell v Trustees of the Roman Catholic Church, note 17 above, at [112] (aff’d (2007) 69 NSWLR 198; 167 IR 121). 147. See 8.16. 148. Foggo v O’Sullivan Partners (Advisory) Pty Ltd, note 43 above, at [99] and [136] per Schmidt J. See Downe v Sydney West Area Health Service (No 2), note 17 above, at [412]; Morris v Hanley, note 42 above, at [48]; Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service [2010] NSWCA 268 at [13] and [147]; Tullett Prebon (Australia) Pty Limited v Purcell [2009] NSWSC 1079 at [77] (aff’d [2010] NSWCA 150); E Peden, ‘The meaning of contractual “good faith”’ (2002) 22 ABR 235 at 236–7. 149. Crossley v Faithful & Gould Holdings Ltd [2004] 4 All ER 447; [2004] ICR 1615 at [33]–[46]; Reid v Rush & Tomkins Plc [1989] 3 All ER 228 at 239–40; McGuirk v The University of New South Wales [2009] NSWSC 1424 at [196]; Outram v Academy Plastics Ltd [2001] ICR 367 at 373 and 375. See R Balkin and J Davis, Law of Torts, 3rd ed, LexisNexis Butterworths, Sydney, 2004, Ch 13. 150. University of Nottingham v Eyett [1999] ICR 721 at 727–8; Outram v Academy Plastics Ltd, note 149 above, at 373 and 375 (in tort); Hagen v ICI Chemicals & Polymers Ltd, note 77 above, at 41; Mulcahy v Hydro-Electric Commission (1998) 85 FCR 170 at 210. See also s 32ZA of the

Superannuation Guarantee (Administration) Act 1992 (Cth) that grants employers protection from liability for certain conduct arising from the employee’s choice of superannuation fund. 151. Scally v Southern Health and Social Services Board, note 24 above, AC at 307; All ER at 571–2 (discussed further at 5.5); Cornwell v The Commonwealth of Australia [2005] ACTSC 14 at [76] and [80] (aff’d on other grounds [2006] ACTCA 7 and (2007) 229 CLR 519; 234 ALR 148); Crossley v Faithful & Gould Holdings Ltd, note 149 above, at [50]–[53]; Ibekwe v London General Transport Services Ltd [2003] EWCA Civ 1075; [2003] IRLR 697. 152. Australian Consumer Law, Sch 2 of the Competition and Consumer Act 2010 (Cth). Cornwell v The Commonwealth of Australia, note 151 above, at [76] and [80] (aff’d on other grounds [2006] ACTCA 7 and (2007) 229 CLR 519; 234 ALR 148); R Balkin and J Davis, Law of Torts, note 149 above, pp 439–48. 153. Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service, note 148 above, at [12], [146]; Alcatel Australia Ltd v Scarcella (1998) 44 NSWLR 349 at 369; Burger King Corporation v Hungry Jack’s Pty Ltd, note 128 above, at [171]; A Mason, ‘Contract, Good Faith and Equitable Standards in Fair Dealing’ (2000) 116 LQR 66 at 69; Strzelecki Holdings Pty Ltd v Cable Sands Pty Ltd [2010] WASCA 222 at [48]–[57]; J Carter et al, Contract Law in Australia, note 126 above, pp 26–8. 154. Rankin v Marine Power International Pty Ltd, note 132 above, at 160–1; Renard Constructions (ME) Pty Ltd v Minister for Public Works, note 139 above, at 263; Eastwood v Magnox Electric plc, note 20 above, at [11]; McClory v Post Office, note 133 above, at 467–8; Johnson v Unisys Ltd, note 20 above, at [43] and [47]; Foggo v O’Sullivan Partners (Advisory) Pty Ltd, note 43 above, at [99]; Horkulak v Cantor Fitzgerald International, note 130 above, at [46]–[49]. 155. Russell v Trustees of the Roman Catholic Church, note 17 above, at [117] (aff’d (2007) 69 NSWLR 198; 167 IR 121); Foggo v O’Sullivan Partners (Advisory) Pty Ltd, note 43 above, at [99] and [136]. 156. Silverbrook Research Pty Ltd v Lindley, note 132 above, at [5]–[6]; Garry Rogers Motors (Aust) Pty Ltd v Subaru (Aust) Pty Ltd, note 125 above, at [35]; Clark v Nomura International Plc, note 132 above; Keen v Commerzbank AG, note 132 above, at [47]–[60]. 157. Silverbrook Research Pty Ltd v Lindley, note 132 above, at [5]–[6] per Allsop P, Beazley JA agreeing; Foggo v O’Sullivan Partners (Advisory) Pty Ltd, note 43 above, at [62] and [136]. 158. Clark v Nomura International plc, note 132 above (irrational or perverse decision to not pay a discretionary bonus to an employee with an excellent, glowing appraisal); Mallone v BPB Industries, note 132 above, at [36]–[39]; Keen v Commerzbank AG, note 132 above, at [47]–[60]; Horkulak v Cantor Fitzgerald International, note 130 above, at [46]–[49]; Hussain v Surrey and Sussex Healthcare NHS Trust, note 131 above, at [111]–[112]. See D Cabrelli, note 45 above, at 195–7. 159. Keen v Commerzbank AG, note 132 above, at [43]–[53], [110]. See C Wynn-Evans, ‘Discretionary Bonus Awards, UCTA and the Duty to Give Reasons’ (2007) 36 ILJ 207. 160. See 8.33 and Riverwood International Australia Pty Ltd v McCormick, note 137 above, at [152]. 161. See the cases referred to in note 143. 162. Macari v Celtic Football and Athletic Co Ltd [1999] IRLR 787 at [66]. 163. Service Station Association v Berg Bennett & Associates Pty Ltd (1993) 45 FCR 84 at 94; 117 ALR 393 at 403–4 per Gummow J; Renard Constructions (ME) Pty Ltd v Minister for Public Works, note 139 above, at 268 and 279–80; Amann Aviation Pty Ltd v Commonwealth (1990) 22 FCR 527 at 532 and 542–4; 92 ALR 601 at 607 and 616–8; cf Hogan v Tumut Shire Council

(1954) 54 SR (NSW) 284 at 290. 164. Mackay v Dick (1881) 6 AC 251 at 263 per Lord Blackburn; Secured Income Real Estate (Aust) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596 at 611; Park v Brothers (2005) 222 ALR 421 at 432; Ansett Transport Industries (Operations) Pty Ltd v Commonwealth (1977) 139 CLR 54 at 102; 17 ALR 513 at 553; Federal Commissioner of Taxation v Sara Lee Household & Body Care (Aust) Pty Ltd (2000) 201 CLR 520 at 547; Electronic Industries Ltd v David Jones Ltd (1954) 91 CLR 288 at 297 (where ‘the obligations [of the parties] requires co-operative acts, [the parties have a] duty of complying with the reasonable requests for performance made by the other’); Shepherd v Felt & Textiles of Australia Ltd, note 58 above, at 378 (‘the contract … required a continual co-operation’). 165. Thompson v ASDA-MFI Group Plc [1988] Ch 241 at 252–4; [1988] 2 All ER 722 at 730–1 considered this to be an implied term, a view endorsed in Byrne v Australian Airlines Limited, note 81 above, CLR at 449–50; ALR at 449–50; Secretary of State for Employment v Associated Society of Locomotive Engineers and Firemen (No 2) [1972] 2 QB 455 at 491–2, 498, 509–10; [1972] 2 All ER 949 at 966–7, 972, 980–3. There is a view that this is an obligation that arises due to the construction of the terms; see the texts of J Riley, Employee Protection at Common Law; E Peden, Good Faith in the Performance of Contracts, and J Carter et al, Contract Law in Australia, referred to at note 126. 166. Butt v M’Donald (1896) 7 QLJ 68 at 70–1; Secured Income Real Estate (Aust) Ltd v St Martins Investments Pty Ltd, note 164 above, at 607–8; Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577 at [14] and [156]; United Bank Ltd v Akhtar, note 84 above, at [44]–[46]; Russell v Trustees of the Roman Catholic Church, note 17 above, at [112]. 167. Butt v M’Donald, note 166 above, at 70–1 per Griffiths CJ; Secured Income Real Estate (Aust) Ltd v St Martins Investments Pty Ltd, note 164 above, at 611; Fitzgerald v F J Leonhardt Pty Ltd (1997) 189 CLR 215 at 219 and 226. 168. Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 at 450, 466; Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd, note 166 above, at [156]; Marshall v Colonial Bank of Australasia (1904) 1 CLR 633 at 647; J Burrows, ‘Contractual Co-operation and the Implied Term’ (1968) 31 MLR 390. 169. Alcatel Australia Ltd v Scarcella, note 153 above, at 368; A Mason, ‘Contract and its Relationship with Equitable Standards and the Doctrine of Good Faith’ (2000) 116 LQR 66. 170. Secured Income Real Estate (Aust) Ltd v St Martins Investments Pty Ltd, note 164 above, at 607– 8; Park v Brothers, note 164 above, at 432; Fitzgerald v F J Leonhardt Pty Ltd, note 167 above; Southern Foundries (1926) Ltd v Shirlaw [1940] AC 701 at 717 and 723; [1940] 2 All ER 445 at 454–5 and 458–9. Professor Peden convincingly argues that this principle is based, or at least should be based, on construction of the contract rather than an implied term: E Peden, ‘“Cooperation” in English Contract Law—To Construe or Imply?’ (2000) 16 JCL 56. 171. Byrne v Australian Airlines Limited, note 81 above, CLR at 449–50; ALR at 449–50; Thompson v ASDA-MFI Group Plc, note 165 above, Ch at 266; All ER at 741 and Cheall v Association of Professional Executive Clerical and Computer Staff [1983] 2 AC 180 at 188–9. 172. See the discussion in Thompson v ASDA-MFI Group Plc, note 165 above, Ch at 266; All ER at 741. 173. Howtrac Rentals Pty Ltd v Thiess Contractors (NZ) Limited [2000] VSC 415 at [416]–[426] (aff’d [2002] VSCA 195). 174. Bull v Nottinghamshire and City of Nottinghamshire Fire and Rescue Authority [2007] ICR 1631

at 1641–3. 175. Secretary of State for Employment v Associated Society of Locomotive Engineers and Firemen (No 2), note 165 above, at 491–2, 498, 507–10; [1972] 2 All ER 949 at 966–7, 972, 980–3; Sim v Rotherham Metropolitan Borough Council [1987] Ch 216 at 249; [1986] ICR 897; British Telecommunications Plc v Ticehurst [1992] ICR 383 at 397–8. 176. Eastwood v Magnox Electric plc, note 20 above; Malik, note 15 above, at 45. 177. See generally F Reynolds, Bowstead and Reynolds on Agency, 18th ed, Sweet and Maxwell, London, 2006, pp 327–36; G Dal Pont, Law of Agency, LexisNexis Butterworths, Sydney, 2001, pp 455–61; J Gleeson and N Owens, ‘Dissolving Fictions: What to Do with the Implied Indemnity?’ (2009) 25 JCL 135. 178. Re Famatina Development Corporation Ltd [1914] 2 Ch 271 at 282; Re Clune (1988) 14 ACLR 261 at 266; National Roads and Motorists’ Association v Whitlam (2007) 25 ACLC 688; [2007] NSWCA 81 at [85]–[92]. 179. Re Clune, note 178 above. On the interpretation of indemnity clauses, see Andar Transport Pty Ltd v Brambles Ltd (2004) 217 CLR 424; (2004) 206 ALR 387 at [17]–[23]. 180. Talbot v NRMA Ltd (2000) 50 NSWLR 300 at [35]–[47]. 181. National Roads and Motorists’ Association v Whitlam, note 178 above, at [85]; Birmingham and District Land Co v London and North Western Railway Co (1886) 34 Ch D 261 at 272 and 274; Re Famatina Development Corporation Ltd, note 178 above, at 282; Re Clune, note 178 above, at 266. 182. Johnson v Kearley [1908] 2 KB 514 at 520. 183. Kelly v Alford [1988] 1 Qd R 404 at 410–1; Lister v Romford Ice and Cold Storage Co Ltd [1957] AC 555 at 570, 582, 588; [1957] 1 All ER 125; Northern Assurance Co Ltd v Coal Mines Insurance Pty Ltd [1970] 2 NSWR 223 at 226. 184. National Roads and Motorists’ Association v Whitlam, note 178 above, at [85]–[92]; Burrows v Rhodes [1899] 1 QB 816 at 828–9; [1895-97] All ER Rep 117; Haseldine v Hosken [1933] 1 KB 822 at 834–5. 185. Burrows v Rhodes, note 184 above, at 828; Haseldine v Hosken, note 184 above, at 833. 186. Burrows v Rhodes, note 184 above, at 828–30; Allen v Allen (1954) 55 SR (NSW) 75 at 78; Northern Assurance Co Ltd v Coal Mines Insurance Pty Ltd, note 183 above, at 226; Lister v Romford Ice and Cold Storage Co Ltd, note 183 above, at 595; Kelly v Alford, note 183 above, at 411–2. 187. Burrows v Rhodes, note 184 above, at 828–9; Brown Jenkinson & Company Ltd v Percy Dalton (London) Ltd [1957] 2 QB 621 at 637, 639–40; Betts v Gibbins (1834) 2 Ad & El 57 at 74; 111 ER 22 at 29; Jonstan Pty Ltd v Nicholson (2003) 58 NSWLR 223 at [64]. See generally Belan v Casey (2003) 57 NSWLR 670 at [88]–[107]. 188. Hurst v Bryk [2002] 1 AC 185 at 199; [2000] 2 All ER 193 at 205; Lewis v Samuel (1846) 8 QB 685; 115 ER 1031; Linklaters v HSBC plc [2003] 2 Lloyd’s Rep 545 at [36]. 189. See Civil Law (Wrongs) Act 2002 (ACT) s 21(1), 21(2); Law Reform (Miscellaneous Provisions) Act 1956 (NT) ss 12, 13; Law Reform (Miscellaneous Provisions) Act 1946 (NSW) s 5(1)(c), 5(2); Law Reform Act 1995 (Qld) ss 6, 7; Civil Liability Act 1936 (SA) s 6(5), 6(7); Wrongs Act 1954 (Tas) s 3(1)(c), 3(2); Wrongs Act 1958 (Vic) ss 23B(1), 24(2); Law Reform (Contributory Negligence and Tortfeasors’ Contribution) Act 1947 (WA) s 7(1)(c), 7(2). The nature of the right is statutory as there is no common law right to contribution: James Hardie &

Co Pty Ltd v Seltsam Pty Ltd (1998) 196 CLR 53; 159 ALR 268 at [24], [60], and [116]; Austral Pacific Group Ltd v Airservices Australia (2000) 203 CLR 136; 173 ALR 619 at [11]. 190. These rights have been modified by statute in some cases: see 7.27. 191. Rowell v Alexander Mackie College of Advanced Education (1988) 25 IR 87. See also Ingham v Vita Pacific Ltd (1994) 20 MVR 342 at 344; Australian Soccer Pools Pty Ltd v Gair (1989) 9 MVR 115. 192. The general rule can be traced through Pilkington v Scott (1846) 15 M & W 657 and Emmens v Elderton (1853) IV HLC 624; 10 ER 606 at 613, 616, 618, 622–3; Whittle v Frankland (1862) 2 B & S 49; 121 ER 992 and Turner v Sawdon & Co [1901] 2 KB 653. 193. The principle can be traced through Fechter v Montgomery (1863) 33 Beav 21; 55 ER 274 at 276; Grimston v Cuningham [1894] 1 QB 125; Turner v Sawdon & Co, note 192 above; Marbe v George Edwardes (Daly’s Theatre) Ltd [1927] 1 KB 269; Herbert Clayton and Jack Waller Ltd v Oliver [1930] AC 209 and Withers v General Theatre Corporation Ltd [1933] 2 KB 536 and thence to the High Court in White v Australian & New Zealand Theatres Ltd (1943) 67 CLR 266 and Associated Newspapers v Bancks (1951) 83 CLR 322: see 8.40. 194. See 8.41. 195. The principle can be traced through Hartley v Cummings (1847) 5 CB 247; 136 ER 871; R v Welch (1853) 2 E & B 357 at 362 and 363; Re Bailey (1854) 3 E & B 607; 118 ER 1269 at 1274; Turner v Goldsmith [1891] 1 QB 544; Devonald v Rosser & Sons [1906] KB 728 and Re Rubel Bronze and Metal Company Limited and Vos [1918] 1 KB 315. There are also a series of cases, many concerning agents, about the effect of the employer ceasing to conduct the business on which the employee or agent relies for commission based remuneration. See 8.45. 196. Collier v Sunday Referee [1940] 2 KB 647 at 650; [1940] 4 All ER 234 at 236 and perhaps Driscoll v Australian Royal Mail Steam Navigation Co (1859) 1 F&F 458. See 8.47. 197. Turner v Sawdon & Co, note 192 above; Collier v Sunday Referee, note 196 above, KB at 650; All ER at 236; Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337 at 342; Ramsey Butchering Services Pty Ltd v Blackadder (2003) 127 FCR 381; 196 ALR 660; [2003] FCAFC 20 at [70]; Edwards v Gietzelt (1983) 8 IR 129 at 131. 198. Collier v Sunday Referee, note 196 above, KB at 649; All ER at 236. See J Riley, ‘Pensioning off Lord Asquith’s Cook’ (2005) 18 AJLL 178. For an actual case involving a cook who was not provided work in the kitchen, see Mackie v Wienholt (1880) 5 QSCR 211. 199. R v Inhabitants of Kingswinford (1791) 4 TR 219; 118 ER 1299, per Lord Kenyon CJ at 1300. 200. R v Inhabitants of North Nibley (1792) 5 TR 21; 101 ER 12 (service for 12 hours a day); R v Inhabitants of Kingswinford, note 199 above (service from 6 am to 7 pm for six days per week). Cases concerning hiring with leave of absence and stipulations as to working hours are collected in W Robinson, A Compendium of the Laws Relating to the Poor, 1827, Charles Fredrick Cock, London, pp 251–6. 201. Constructive service is discussed in 9.10. 202. M Nolan, A Treatise on the Laws for the Relief and Settlement of the Poor, 1805 (reprinted 2005, The Law Book Exchange, New York); W Blackstone, Commentaries on the Laws of England, 13th ed, A Strahan, 1800, Vol II, p 425. A menial servant was engaged ‘throughout all the revolutions of the seasons, as well when there is work to be done as when there is not’: R Burn, The Justice of the Peace, 21st ed, A Strahan, London, 1810, Vol V, p 208. 203. Marbe v George Edwardes (Daly’s Theatre) Ltd, note 193 above, at 282 (‘His position [was]

analogous to that of domestic servants’); Collier v Sunday Referee, note 196 above, KB at 650; All ER at 236 (‘Provided I pay my cook her wages’); references were made to the position of domestic and household servants in Emmens v Elderton, note 192 above. 204. As a consequence, some contracts, in a reasonably standard form, were held to be unenforceable as they lacked mutuality, or were an unreasonable restraint of trade: see Lees v Whitcomb (1828) 5 Bing 34; 130 ER 972 (agreement to enter into the service of employer for two years to learn a trade but there was no express or implied obligation to teach); Sykes v Dixon (1839) 9 Ad & E 693; 112 ER 1374 (obligation to serve but no express or implied obligation to pay wages); Williamson v Taylor (1843) 5 QB 175; 114 ER 1214 (piecework contract with no express or implied term requiring that work be provided); Dunn v Sayles (1844) 5 QB 685; 114 ER 1408 (promise of apprentice to serve, but no express or implied promise by the master to let the apprentice serve). Young v Timmins (1831) Cr & J 331; 148 ER 1446 belongs to the same family, but continues to be relied on for other reasons: Curro v Beyond Productions Pty Ltd, note 197 above. See also W Cornish, The Oxford History of the Laws of England, Vol XIII, Oxford University Press, Oxford, 2010, pp 638–43. 205. Pilkington v Scott, note 192 above. 206. See generally Turner v Sawdon & Co, note 192 above. For the meaning of the word ‘engaged’ see Benninga Mitcham Ltd v Bijstra [1946] KB 58 at 62 and Construction, Forestry, Mining and Energy Union v Pilbara Iron Company (Services) Pty Ltd (2010) 198 IR 173 at 179. 207. Emmens v Elderton, note 192 above, at 613 per Crompton J, at 616 per Martin B, at 618 per Wightman J, at 621–2 per Coleridge J and at 623 per Baron Parke. 208. R v Welch, note 195 above, at 362 and 363; Hartley v Cummings, note 195 above; Re Bailey, note 195 above, ER at 1274. 209. William Hill Organisation Ltd v Tucker [1999] ICR 291 at 299. See also Blackadder v Ramsey Butchering Services Pty Ltd (2005) 221 CLR 539; 215 ALR 87; 139 IR 338 at [80] (‘in modern times’); Blackadder v Ramsey Butchering Services Pty Ltd (2002) 113 IR 461 at [61] (‘in modern Australia’); Breach (FT) v Epsylon Industries Ltd [1976] ICR 316 at 321 (‘old fashioned now’). 210. Langston v Amalgamated Union of Engineering Workers [1974] 1 WLR 185 at 192, 194 and 195; Breach (FT) v Epsylon Industries Ltd, note 209 above, at 320–2; Australian Rugby League Ltd v Cross (1997) 39 IPR 111 at 120; William Hill Organisation Ltd v Tucker, note 209 above; Wesoky v Village Cinemas International Pty Ltd [2001] FCA 32 at [26]–[28]; Blackadder v Ramsey Butchering Services Pty Ltd (2002) 113 IR 461 at [61]; Blackadder v Ramsey Butchering Services Pty Ltd (2005) 221 CLR 539; 215 ALR 87; 139 IR 338 at [32] and [80]; Unsworth v Tristar Steering & Suspension Australia Ltd (2008) 175 IR 320 at [29]; Downe v Sydney West Area Health Service (No 2), note 17 above at [685]; SG&R Valuation Services Co v Boudrais [2008] IRLR 770 at [20]; J Riley, note 198 above; S McCrystal, ‘Unfair Dismissal, Reinstatement and Garden Leave: Blackadder v Ramsey Butchering Services Pty Ltd’ (2005) 33 FL Rev 555; R Owens et al, The Law of Work, 2nd ed, Oxford University Press, Australia, 2011, pp 285–6. 211. Curro v Beyond Productions Pty Ltd, note 197 above, at 343; Fechter v Montgomery, note 193 above, ER at 276; Herbert Clayton and Jack Waller Ltd v Oliver, note 193 above, at 215 and 217. 212. Marbe v George Edwardes (Daly’s Theatre) Ltd, note 193 above, at 278–9. 213. University of Regina v Cohnstaedt [1989] 1 SCR 1011 at 1020. As an addendum to that extraordinary litigation, after his dismissal in 1978 the employee recovered damages, after another Supreme Court appeal, in 1994: Cohnstaedt v University of Regina [1995] 3 SCR 451.

See also Northern Land Council v Hansen [2000] NTCA 1 at [27] (probation clause gave the employee the right to have performance objectively assessed). 214. Blackadder v Ramsey Butchering Services Pty Ltd (2005) 221 CLR 539; 215 ALR 87; 139 IR 338 (effect of reinstatement under the Workplace Relations Act) discussed in J Riley, note 198 above and S McCrystal, note 210 above. See also Hodge v Ultra Electric Ltd [1943] KB 742 (reinstatement meant being provided with work when it was available) and Squires v Flight Stewards Association of Australia (1982) 2 IR 155 at 164 (failure to provide work to an employee injured in his employment). 215. See 5.46 and 5.53. 216. Australian Rugby League Ltd v Cross, note 210 above, at 118 and 121. 217. Devonald v Rosser & Sons, note 195 above, at 739 and 742; Bauman v Hulton Press Ltd [1952] 1 All ER 1124; Roadshow Entertainment Pty Ltd v ACN 053 006 269 Pty Limited Receiver & Manager Appointed (1997) 42 NSWLR 462 at 474; Mann v Capital Territory Health Commission (1981) 54 FLR 23 at 32 (leave refused (1982) 148 CLR 97; 42 ALR 46); Capital Aircraft Services Pty Ltd v Brolin (2006) 154 IR 352; [2006] ACTSC 80 at [27]; Curro v Beyond Productions Pty Ltd, note 197 above, at 343. See also Milne v Municipal Council of Sydney (1912) 14 CLR 54 where Griffiths CJ at 63, 66 and 67 articulates different bases for the rule. 218. William Hill Organisation Ltd v Tucker, note 209 above, at 297; BearingPoint Australia Pty Ltd v Hillard, note 73 above, at [86]; Breach (FT) v Epsylon Industries Ltd, note 209 above, at 320. 219. Curro v Beyond Productions Pty Ltd, note 197 above, at 342; Collier v Sunday Referee, note 196 above, at KB 650; All ER 236; Withers v General Theatre Corporation Ltd, note 193 above, at 554. 220. Curro v Beyond Productions Pty Ltd, note 197 above, at 342 (television presenter); Herbert Clayton and Jack Waller Ltd v Oliver, note 193 above (actor); Associated Newspapers v Bancks, note 193 above (comic artiste); White v Australian & New Zealand Theatres Ltd, note 193 above (producer); Australian Rugby League Ltd v Cross, note 210 above (rugby league player); Fechter v Montgomery, note 193 above, ER at 276 (actor). In Canada, see Magee v Channel Seventynine Ltd (1976) 15 OR (2d) 185 at 196–7 (television presenter); Cranston v Canadian Broadcasting Corporation (1994) 2 CCEL (2d) 301 (television presenter); Burmeister v Regina Multicultural Council (1985) 8 CCEL 144 at 155. 221. For example, Newman v Gatti (1907) 24 TLR 18 (no promise to provide an opportunity for performance of an understudy). 222. White v Australian & New Zealand Theatres Ltd, note 193 above, at 271, 273–4 and 281; Curro v Beyond Productions Pty Ltd, note 197 above, at 343–4; Grimston v Cuningham, note 193 above, at 131; Turner v Sawdon & Co, note 192 above, at 659; Herbert Clayton and Jack Waller Ltd v Oliver, note 193 above, at 215–16 and 218; Withers v General Theatre Corporation Ltd, note 193 above, at 554. 223. Curro v Beyond Productions Pty Ltd, note 197 above, at 343–4. See also White v Australian & New Zealand Theatres Ltd, note 193 above, at 274–5; Grimston v Cuningham, note 193 above, at 13; Herbert Clayton and Jack Waller Ltd v Oliver, note 193 above. 224. Curro v Beyond Productions Pty Ltd, note 197 above, at 343; Fechter v Montgomery, note 193 above, ER at 276 (‘entirely depends on pleasing the public and upon being constantly before the public’) approved in Herbert Clayton and Jack Waller Ltd v Oliver, note 193 above, at 215–16; Marbe v George Edwardes (Daly’s Theatre) Ltd, note 193 above, at 281. 225. See 14.91.

226. Some have suggested an even broader expansion of the category: Blackadder v Ramsey Butchering Services Pty Ltd (2002) 113 IR 461 at [61]; Australian Rugby League Ltd v Cross, note 210 above, at 120 per Hodgson J. 227. Associated Newspapers v Bancks, note 193 above; it was not Bancks, the artist of Ginger Meggs who was in the public eye, but the comic strip that was the product of his work; and in White v Australian & New Zealand Theatres Ltd, note 193 above, the employee was both an actor and producer. The breach of the employer was denying him the opportunity of continuing to perform the duties of a producer, whilst at the same time permitting him to continue to perform as an actor and pay him the same salary as he previously received. 228. Re Rubel Bronze and Metal Company Limited and Vos, note 195 above, at 324; Langston v Amalgamated Union of Engineering Workers (No 2) [1974] ICR 510 at 521–2; Mezey v South West London and St George’s Mental Health NHS Trust [2007] IRLR 244; [2007] EWCA Civ 106 at [12]; Downe v Sydney West Area Health Service (No 2), note 17 above, at [685] (though the findings at [25] suggest that this may have been an express term). See also Blackadder v Ramsey Butchering Services Pty Ltd, note 214 above, at [32] and [80] and Australian Rugby League Ltd v Cross, note 210 above; cf the dicta in Collier v Sunday Referee, note 196 above, KB at 650–1; All ER at 236. 229. Dunk v George Waller & Sons Ltd [1970] 2 QB 163; Re Rubel Bronze and Metal Company Limited and Vos, note 195 above, at 324; Edmonds v Lawson [2000] 1 QB 501 at 516–8; Waterman v Fryer [1922] 1 KB 499 at 506; Parish of St Pancras, Middlesex v Parish of Clapham, Surrey (1860) 2 El & El 742; 121 ER 278. Many of these cases involved an agreement to work for low wages to gain the necessary experience. Public performance cases such as Marbe v George Edwardes (Daly’s Theatre) Ltd, note 193 above, and Fechter v Montgomery, note 193 above, involved employees accepting work at a lower rate of pay. 230. In Langston v Amalgamated Union of Engineering Workers, note 210 above, the car welder was 60; in Downe v Sydney West Area Health Service (No 2), note 17 above, the contract concerned a neonatologist; Provident Financial Group v Hayward [1989] 3 All ER 298 at 304; [1989] ICR 160 at 168. 231. William Hill Organisation Ltd v Tucker, note 209 above, at 300; Langston v Amalgamated Union of Engineering Workers (No 2), note 228 above, at 521–2; Provident Financial Group v Hayward, note 230 above, All ER at 304 and 305; ICR at 168 and 170; SG&R Valuation Services Co v Boudrais, note 210 above, at [21]. 232. Langston v Amalgamated Union of Engineering Workers (No 2), note 228 above, at 521–2, referred to approvingly by the United Kingdom Court of Appeal in William Hill Organisation Ltd v Tucker, note 209 above, at 298. 233. J Riley, ‘Who Owns Human Capital? A Critical Appraisal of Legal Techniques for Capturing the Value of Work’ (2005) 18 AJLL 1 at 2; K Stone, ‘The New Psychological Contract: Implications of the Changing Workplace for Labor and Employment Law’ (2001) 48 UCLA LR 519. 234. Contrast the views on this point in Australian Rugby League Ltd v Cross, note 210 above, at 120 with J Riley, note 198 above, at 181 and Blackadder v Ramsey Butchering Services Pty Ltd, note 226 above, at [61]. 235. See P O’Higgins, ‘“Labour is Not a Commodity”—an Irish Contribution to International Labour Law’ (1997) 26 ILJ 525; G Bamber and B Russell, ‘Work with Dignity’ in M Bromberg and M Irving (eds), Australian Charter of Employment Rights, Hardie Grant Books, Melbourne, 2007, pp 20–1 and 24–6 and cl 2 of the Australian Charter of Employment Rights. 236. Under about 30% of enterprise agreements under the Fair Work Act, part or the whole of the

wage increases are dependent upon individual or company performance, or are only awarded if certain productivity improvements are made: Department of Education, Employment and Workplace Relations, Trends in Federal Enterprise Bargaining, note 3 above. 237. Devonald v Rosser & Sons, note 195 above; Bond v Cav Ltd [1983] IRLR 360; Bauman v Hulton Press Ltd [1952] 1 All ER 1121; William Hill Organisation Ltd v Tucker, note 209 above, at 298–9; Nethermere (St Neots) Ltd v Taverna and Gardiner [1984] ICR 612 at 626 and 635; AMP Services Ltd v Manning [2006] FCA 256 at [43]. See also Milne v Municipal Council of Sydney, note 217 above, at 63 and 65–6. 238. See 8.44. 239. Devonald v Rosser & Sons, note 195 above, at 739 and 742; Bauman v Hulton Press Ltd, note 217 above. 240. See 5.61. 241. Hulme v Ferranti Limited [1918] 2 KB 426. 242. Devonald v Rosser & Sons, note 195 above, at 742. That decision was one of a line of cases about the right of pieceworkers to remuneration that can be traced through Hartley v Cummings, note 195 above; R v Welch (1853) 2 El & Bl 357; 118 ER 800; Re Bailey, note 195 above. 243. Bond v Cav Ltd, note 237 above, and Johnson v Cross [1977] ICR 872 at 875 (‘reasonable work so that he could earn a reasonable wage’); R v Welch, note 242 above, ER at 362 (‘employer to find reasonable work’ and ‘to find reasonable employment according to the state of the trade’ per Lord Campbell LJ); Re Bailey, note 195 above, ER at 1274 (there was an obligation to employ the men: ‘not, I think, necessarily to find them work day by day; but an obligation to continue the relation of master and servant; so that, if the master causelessly refused to give the servant work, whilst the colliery was open, he would have broken his contract’ per Lord Campbell CJ); Bauman v Hulton Press Ltd, note 237 above, at 1124 (the employer must, throughout the duration of the contract, provide to the employee ‘a reasonable amount of work to enable him to earn that which the parties must be taken to have contemplated’ per Justice Streatfield); Nethermere (St Neots) Ltd v Taverna and Gardiner, note 237 above, at 626 and 635 (‘a reasonable amount of work’). 244. Devonald v Rosser & Sons, note 195 above, at 740. 245. Turner v Goldsmith, note 195 above, at 550; Turner v Sawdon & Co, note 192 above, at 659; Reigate v Union Manufacturing Company (Ramsbottom) Ltd [1918] 1 KB 592. If the commission scheme is purely discretionary then the implied right to work to earn the remuneration may not arise: BearingPoint Australia Pty Ltd v Hillard, note 73 above, at [105]; McClory v Post Office, note 133 above, at 467–9 (obligation to work overtime but no obligation to be provided with the opportunity to work overtime) but note SG&R Valuation Services Co v Boudrais, note 210 above, at [21] and Bosworth v Angus Jowett & Co Ltd [1977] IRLR 374 at 382–3. 246. Bauman v Hulton Press Ltd, note 237 above; Re Rubel Bronze and Metal Company Limited and Vos, note 195 above; Addis v Gramophone Co Limited [1909] AC 488 at 489–90; Wesoky v Village Cinemas International Pty Ltd, note 210 above, at [26]–[28]; Bosworth v Angus Jowett & Co Ltd, note 245 above, at 382–3; William Hill Organisation Ltd v Tucker, note 209 above; Blackadder v Ramsey Butchering Services Pty Ltd, note 214 above, at [32] and [80]. 247. Addis v Gramophone Co Limited, note 246 above, at 489–90; Bosworth v Angus Jowett & Co Ltd, note 245 above, at 382–3 (being sent on garden leave but provided with a share of the net profits prevented the employee from contributing to the increase in profits). 248. Bauman v Hulton Press Ltd, note 237 above; Re Rubel Bronze and Metal Company Limited and

Vos, note 195 above; Manubens v Leon [1919] 1 KB 208; Wesoky v Village Cinemas International Pty Ltd, note 210 above; Reigate v Union Manufacturing Company (Ramsbottom) Ltd, note 245 above. 249. See 14.37. 250. Re Rubel Bronze and Metal Company Limited and Vos, note 195 above, at 324. See also Bosworth v Angus Jowett & Co Ltd, note 245 above, at 382–3. 251. Addis v Gramophone Co Limited, note 246 above (bank manager); Re Rubel Bronze and Metal Company Limited and Vos, note 195 above (general manager); Wesoky v Village Cinemas International Pty Ltd, note 210 above; Reigate v Union Manufacturing Company (Ramsbottom) Ltd, note 245 above (agent); Bosworth v Angus Jowett & Co Ltd, note 245 above (sales manager). 252. Manubens v Leon, note 248 above; Bauman v Hulton Press Ltd, note 237 above and Blackadder v Ramsey Butchering Services Pty Ltd, note 214 above, at [32] and [80]. 253. See Reigate v Union Manufacturing Company (Ramsbottom) Ltd, note 245 above, at 608. Drawing such a distinction may implicitly exalt the importance of the efforts of chief executive officers over the efforts of ordinary workers. See G Haigh, Bad Company: The Strange Cult of the CEO, Black Inc, Melbourne, 2003. 254. Ramsey Butchering Services Pty Ltd v Blackadder, note 197 above, at [72] and Blackadder v Ramsey Butchering Services Pty Ltd, note 214 above, at [52] and [80], see also at [32] per Kirby J; Re Rubel Bronze and Metal Company Limited and Vos, note 195 above, at 323 and Bosworth v Angus Jowett & Co Ltd, note 245 above, at 382–3. 255. Ex parte Maclure (1870) LR 5 Ch 737; Rhodes v Forwood (1876) 1 AC 256; Cowasjee Nanabhoy v Lallbhoy Vullubhoy (1876) LR 3 Ind App 200; Turner v Goldsmith, note 195 above, at 550; Northey v Trevillion (1901) 18 TLR 648; Lazarus v Cairn Line of Steamships Ltd (1912) 28 TLR 244 at 245; Re Newman Ltd, Raphael’s Claim [1916] 2 Ch 309; Reigate v Union Manufacturing Company (Ramsbottom) Ltd, note 245 above; Roadshow Entertainment Pty Ltd v ACN 053 006 269 Pty Limited Receiver & Manager Appointed, note 217 above. See also Burton v Litton Business Systems Pty Ltd (1977) 16 SASR 162 at 165–6 and 168 and Collier v Sunday Referee, note 196 above, KB at 651; All ER at 236 where ceasing business prevented the employee from fulfilling his duties and earning wages. 256. Bauman v Hulton Press Ltd, note 237 above, at 1123–4. Agency cases are discussed in G Dal Pont, Law of Agency, note 177 above, at [25.10]–[25.13]; J Burrows, ‘Contractual Co-operation and the Implied Term’ (1968) 31 MLR 390 at 398–400; M Freedland, The Contract of Employment, Clarendon Press, Oxford, 1976, pp 31–2. 257. Capital Aircraft Services Pty Ltd v Brolin, note 217 above, at [27]. This issue arose more often prior to the decision in Emmens v Elderton, note 192 above, where the meaning of the obligation to serve was clarified. See the cases at note 204 and Nethermere (St Neots) Ltd v Taverna and Gardiner, note 237 above, at 623–5 and 634–5. 258. Capital Aircraft Services Pty Ltd v Brolin, note 217 above, at [27]. 259. Collier v Sunday Referee, note 196 above. 260. Collier v Sunday Referee, note 196 above, KB at 651; All ER at 236. 261. Ramsey Butchering Services Pty Ltd v Blackadder, note 197 above, at [70] per Tamberlin and Goldberg JJ; William Hill Organisation Ltd v Tucker, note 209 above, at 298–9 per Morritt LJ; Wesoky v Village Cinemas International Pty Ltd, note 210 above, at [26]–[28]; BearingPoint Australia Pty Ltd v Hillard, note 73 above, at [105]; Downe v Sydney West Area Health Service

(No 2), note 17 above, at [685]. 262. Downe v Sydney West Area Health Service (No 2), note 17 above, at [685] (applied to the sole neonatologist at the hospital); William Hill Organisation Ltd v Tucker, note 209 above, at 300 (applied to the sole senior dealer at a spread betting business); Wesoky v Village Cinemas International Pty Ltd, note 210 above, at [26]–[28]; cf SG&R Valuation Services Co v Boudrais, note 210 above, which concerned two of five directors. In Breach (FT) v Epsylon Industries Ltd, note 209 above, at 321–2 Phillips J considered it arguable that a chief engineer may be a specific office. 263. Driscoll v Australian Royal Mail Steam Navigation Co, note 196 above. 264. Commissioner for Government Transport v Royall (1966) 116 CLR 314 at 322–3 per Kitto J; McCarthy v Windeyer (1925) 26 SR (NSW) 29; Price v Mouat (1862) 11 CB NS 508; 142 ER 895. 265. See 6.15. 266. See 6.14. 267. BearingPoint Australia Pty Ltd v Hillard, note 73 above, at [100], [103] and [106]; Seven Network (Operations) Limited v Warburton (No 2) [2011] NSWSC 386 at [13]; Harold Holdsworth & Co (Wakefield) Ltd v Caddies [1955] 1 WLR 352 where the contract permitted the employer to vary the duties. 268. Marbe v George Edwardes (Daly’s Theatre) Ltd, note 193 above, at 278–9. 269. Curro v Beyond Productions Pty Ltd, note 197 above, at 344; Associated Newspapers v Bancks, note 193 above, at 338; White v Australian & New Zealand Theatres Ltd, note 193 above, at 275; Westen v Union des Assurances de Paris (1996) 88 IR 259 at 261; Beck v Darling Downs Institute of Advanced Education (1990) 140 IR 364 at 369–70; Brackenridge v Toyota Motor Corporation Australia Ltd (1997) 142 ALR 99 at 106; McCarthy v Windeyer, note 264 above; Re Rubel Bronze and Metal Company Limited and Vos, note 195 above, at 324. See generally 10.38–10.49. 270. Associated Newspapers v Bancks, note 193 above, at 338; Fechter v Montgomery, note 193 above, ER at 276. It is implicit in cases such as Australian Rugby League Ltd v Cross, note 210 above, and Curro v Beyond Productions Pty Ltd, note 197 above, at 342 that the absence of an express or implied right to work would render an exclusive service provision an unreasonable restraint of trade. 271. See the cases and articles referred to in note 210. 272. As it is stated in the Second Restatement of Agency, [433], note c: ‘a promise by a principal to furnish an agent with work may be inferred from a promise to employ, only if it is found that the anticipated benefit to the agent from doing the work is a material part of the advantage to be received by the agent from employment. An anticipated benefit, within the meaning of this rule, may be the employee’s acquisition of a skill, reputation, or some subsidiary pecuniary advantage’. See also Montemayor v Jacor Communications Inc 64 P.3d 916 (2003) at 920. 273. See 8.42–8.46. 274. See 8.40. 275. See 8.41. 276. See 8.47–8.48. 277. Langston v Amalgamated Union of Engineering Workers, note 210 above, at 192, but see

Langston v Amalgamated Union of Engineering Workers (No 2), note 228 above; Hughes v London Borough of Southwark [1988] IRLR 56 at [12]; Powell v Brent London Borough Council [1988] ICR 176 at 196 and 199; Johnson v Unisys Ltd, note 20 above, at [35]. In Blackadder v Ramsey Butchering Services Pty Ltd, note 214 above, at [80] Callinan and Heydon JJ stated: ‘It may be that in modern times a desire for what has been called “job satisfaction”… [has] a role to play in determining whether work in fact should be provided’. At [32], Kirby J observed that the failure to provide the employee work ‘denies him the satisfaction of employment, the feeling of self-worth that it can generate’. 278. See 14.77, 14.81 and 14.83. 279. As Dowsett J observed in Beck v Darling Downs Institute of Advanced Education, note 269 above: ‘In many jobs, the important benefit for the employee is the pay, and what he does during working hours is irrelevant. In some cases it may be that employees are happy to do as little as possible for their wages …’. In Csomore v Public Service Board of New South Wales (1986) 10 NSWLR 587 at 598 Rogers J said: ‘the common sense of the law rebels against’ the conclusion that an employee should be paid for going to the beach. Perhaps the common law also rebels against the conclusion that the employer breaches the contract when the employee is paid for going to the beach. 280. Langston v Amalgamated Union of Engineering Workers, note 210 above, at 192 per Lord Denning MR (a right ‘to have an opportunity of doing his work when it is there to be done’), see also, at 194 per Cairns LJ, and at 195 per Stephenson LJ; Unsworth v Tristar Steering & Suspension Australia Ltd, note 210 above, at [29]; SG&R Valuation Services Co v Boudrais, note 210 above, at [22]. See also Emmens v Elderton, note 192 above, at 621–2. 281. Downe v Sydney West Area Health Service (No 2), note 17 above, at [684]. 282. As Bankes LJ says in Marbe v George Edwardes (Daly’s Theatre) Ltd, note 193 above, at 278, ‘Similarly a doctor or a solicitor may be employed or engaged for a year, but the person who employs is not bound to be ill or to become involved in litigation in order that the other party may have something to do’: see also Turner v Sawdon & Co, note 192 above, at 659. Similar issues arose in Mann v Capital Territory Health Commission, note 217 above (leave refused (1982) 148 CLR 97; 42 ALR 46) which did involve a doctor and Emmens v Elderton, note 192 above, that did involve a solicitor. 283. The general rule is established, in dicta, in Emmens v Elderton, note 192 above, at 613–5 and formed the ratio of Turner v Sawdon & Co, note 192 above. In almost every subsequent case it was assumed that unless the employee fell within one of the specified exceptions there was no obligation to provide work. 284. TFS Derivatives Limited v Morgan [2005] IRLR 246 at [80]. 285. SG&R Valuation Services Co v Boudrais, note 210 above, at [22]–[24]; William Hill Organisation Ltd v Tucker, note 209 above, at 300; Langston v Amalgamated Union of Engineering Workers, note 210 above, at 192; Mann v Capital Territory Health Commission, note 217 above, at 32 (leave refused (1982) 148 CLR 97; 42 ALR 46); Unsworth v Tristar Steering & Suspension Australia Ltd, note 210 above, at [29]. 286. SG&R Valuation Services Co v Boudrais, note 210 above, at [22]–[24]; Downe v Sydney West Area Health Service (No 2), note 17 above, at [685]; BearingPoint Australia Pty Ltd v Hillard, note 73 above, at [103]. 287. Mann v Capital Territory Health Commission, note 217 above, at 32 (leave refused (1982) 148 CLR 97; 42 ALR 46), critically noted by the editor in ‘The Mann Case’ (1982) 56 ALJ 328 and S McCrystal, note 210 above, at 560.

288. Mann v Capital Territory Health Commission, note 217 above, at 24 and 32. Though it was not mentioned by the court, there were at least three appellate decisions that had referred to the problems in implying such a term in the engagement of doctors, being Marbe v George Edwardes (Daly’s Theatre) Ltd, note 193 above, at 278; Turner v Sawdon & Co, note 192 above, at 659 and Emmens v Elderton, note 192 above, at 668. 289. Mann v The Capital Territory Health Commission, note 217 above, at 32. 290. Da Costa v Cockburn Salvage & Trading Pty Ltd (1970) 124 CLR 192 at 197, 203–5 and 218; Kondis v State Transport Authority (1984) 154 CLR 672 at 689; 55 ALR 225 at 236–7 (Kondis); Raimondo v State of South Australia (1979) 23 ALR 513 at 517; Andar Transport Pty Ltd v Brambles Ltd (2004) 217 CLR 424; 206 ALR 387 at [34] (Andar); Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1; 167 ALR 1 at [61] and [226] (Crimmins); Goldman Sachs JB Were Services Pty Ltd v Nikolich (2007) 163 FCR 62; [2007] FCAFC 120 at [324]; Paris v Stepney Borough Council [1951] AC 367 at 384 and 388; Wilsons & Clyde Coal Co Ltd v English [1938] AC 57 at 84; Cavanagh v Ulster Weaving Co Ltd [1960] AC 145 at 165; see generally R Johnstone et al, Work Health and Safety Law and Policy, 3rd ed, Lawbook Co, Sydney, 2012. I would like to acknowledge the extensive assistance of Eleanor DeMarzi in the research of 8.56–8.75. 291. Work Health and Safety Act 2011 (Cth) Pts 9, 10, 11 and 13 and ss 30–34; Occupational Health, Safety and Welfare Act 1986 (SA) Pt 6 and ss 58–59; Occupational Health and Safety Act 2004 (Vic) Pts 9 and 11 and s 21(4); and Occupational Safety and Health Act 1984 (WA) s 19A and Pts VI and VII. There are a broad range of steps that can be taken to enforce the employer’s duty, prevent its breach and punish its contravention discussed in more detail in B Creighton and A Stewart, Labour Law, note 4 above, pp 463–73; R Johnstone et al, Work Health and Safety Law and Policy, note 290 above, Ch 8. 292. Tame v New South Wales (2002) 211 CLR 317; 191 ALR 449 at [140]; Goldman Sachs JB Were Services Pty Ltd v Nikolich, note 290 above, at [31] and [324]; Matthews v Kuwait Bechtel Corporation [1959] 2 QB 57 at 67; Stubbe v Jensen [1997] 2 VR 439 at 443–4 and Wright v TNT Management Pty Ltd (1989) 85 ALR 442 at 449–50 and 459; 15 NSWLR 679 at 687–8 and 698– 9. 293. Crimmins, note 290 above, at [61] and [226]; Goldman Sachs JB Were Services Pty Ltd v Nikolich, note 290 above, at [324]; Matthews v Kuwait Bechtel Corporation, note 292 above, at 67; Wright v TNT Management Pty Ltd, note 292 above, ALR at 449; NSWLR at 687–8 and Nationwide News Pty Ltd v Naidu (2007) 71 NSWLR 471; [2007] NSWCA 377 at [4] and [33]. 294. Work Health and Safety Act 2011 (Cth); Work Health and Safety Act 2011 (ACT); Work Health and Safety Act 2011 (NSW); Work Health and Safety (National Uniform Legislation) Act 2011 (NT); Work Health and Safety Act 2011 (Qld); Workplace Health and Safety Act 1995 (Tas). These Acts are referred to below as the WHS Acts. At the time of writing the state laws operating in the remaining jurisdictions are Occupational Health and Safety Act 2004 (Vic); Occupational Health, Safety and Welfare Act 1986 (SA); and Occupational Safety and Health Act 1984 (WA). See 8.58. 295. Lister v Romford Ice and Cold Storage Co Limited, note 183 above, at 587; Goldman Sachs JB Were Services Pty Ltd v Nikolich, note 290 above, at [326] and Nationwide News Pty Ltd v Naidu, note 293 above, at [332]. On the concurrent duties, see Astley v Austrust Ltd (1999) 197 CLR 1; 161 ALR 155 at [44]–[48]. 296. Matthews v Kuwait Bechtel Corporation, note 292 above, at 67 and Wylie v ANI Corp Ltd [2002] 1 Qd R 320 at [39]–[42].

297. Wylie v ANI Corp Ltd, note 296 above, at [42]. 298. Cornwell v Commonwealth of Australia, note 151 above, at [88]–[96]; Commonwealth of Australia v Cornwell (2007) 229 CLR 519; 234 ALR 148 at [4]–[5]; Wylie v ANI Corp Ltd, note 296 above, at [39] and the cases referred to therein. On limitation periods, see 8.75. 299. Wright v TNT Management, note 292 above, ALR at 450; NSWLR at 688. 300. Astley v Austrust Ltd, note 295 above, at [68]–[89]. 301. Civil Law (Wrongs) Act 2002 (ACT) ss 101–2; Law Reform (Miscellaneous Provisions) Act 1965 (NSW) ss 8–9; Law Reform (Miscellaneous Provisions) Act 1956 (NT) ss 15–16; Law Reform Act 1995 (Qld) ss 5 and 10; Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 (SA) ss 7 and 3; Wrongs Act 1954 (Tas) ss 2 and 4; Wrongs Act 1958 (Vic) ss 25–6; and Law Reform (Contributory Negligence and Tortfeasors’ Contribution) Act 1947 (WA) ss 3A–4. 302. Trend Management Ltd v Borg (1996) 40 NSWLR 500 at 503–5; 72 IR 16 at 19; Lamb v Cotogno (1987) 164 CLR 1 at 8–10; 74 ALR 188 at 192–3 and Gray v Motor Accident Commission (1998) 196 CLR 1; 158 ALR 485 at [13] and [19]–[20]. 303. Trend Management Ltd v Borg, note 302 above, NSWLR at 505–7; IR at 21. 304. Butler v Fairclough (1917) 23 CLR 78 at 89; Hospitality Group Pty Ltd v Australian Rugby Union Ltd (2001) 110 FCR 157; [2001] FCA 1040 at [142]–[143] and Gray v Motor Accident Commission, note 302 above, at [13]. See 14.16. 305. See note 294. 306. Chugg v Pacific Dunlop Ltd (1990) 170 CLR 249 at 265. 307. National Review into Model Occupational Health and Safety Law, First Report, Commonwealth of Australia, Canberra, 2008, Ch 6. 308. R v Australian Char Pty Ltd [1999] 3 VR 834 at 848–9. 309. See generally R Balkin and J Davis, Law of Torts, note 149 above, Ch 16. 310. Work Health and Safety Act 2011 (Cth) s 267; see also Occupational Health and Safety Act 2004 (Vic) s 34 and Occupational Health, Safety and Welfare Act 1986 (SA) s 6 and see also s 58(7) (c). On the enforcement of the WHS Acts, see R Johnstone et al, Work Health and Safety Law and Policy, 3rd ed, Lawbook Co, Sydney, 2012, Ch 8. 311. Crimmins, note 290 above, at [164]; see also at [5]. 312. See the cases at note 290 above. 313. McLean v Tedman (1984) 155 CLR 306 at 313; 56 ALR 359 at 364 and Quigley v Commonwealth (1981) 35 ALR 537 at 539. 314. Paris v Stepney Borough Council, note 290 above, at 380. 315. Hamilton v Nuroof (WA) Pty Ltd (1956) 96 CLR 18 at 25; Czatyrko v Edith Cowan University (2005) 214 ALR 349 (Czatyrko) at [12]–[16]; Turner v South Australia (1982) 42 ALR 669 at 670 and 674; Ferraloro v Preston Timber Pty Ltd (1982) 42 ALR 627 at 629; Bankstown Foundry Pty Ltd v Braistina (1986) 160 CLR 301 at 307–8; ALR at 6; Kondis, note 290 above, CLR at 693; ALR at 239–40; Schellenberg v Tunnel Holdings Pty Ltd (2000) 200 CLR 121; 170 ALR 594 at [101]–[102] (Schellenberg) and McLean’s Roylen Cruises Pty Ltd v McEwan (1984) 155 CLR 694; 54 ALR 3 at 6–7. 316. McLean v Tedman, note 313 above, CLR at 313; ALR at 364; New South Wales v Fahy (2007)

232 CLR 486; 236 ALR 406 at [131]; Bankstown Foundry Pty Ltd v Braistina, note 315 above, CLR at 309; ALR at 7. 317. O’Connor v Commissioner for Government Transport (1959) 100 CLR 225 at 229 and Nicol v Allyacht Spars Pty Ltd (1987) 163 CLR 611 at 617; 75 ALR 1 at 5. 318. The four main aspects of the duty are discussed below in 8.70–8.74. 319. Czatyrko, note 315 above, at [12]; Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at 44; 63 ALR 513 at 531–2; Wilsons and Clyde Coal Co Ltd v English, note 290 above, at 78 and 83–4; Cotter v Huddart Parker Ltd (1941) 42 SR (NSW) 33 at 37; Kondis, note 290 above, CLR at 688 and 689; ALR at 235 and 237 and Raimondo v South Australia, note 290 above, at 519; Galea v Bagtrans Pty Ltd [2010] NSWCA 350 at [5] and [66]. 320. Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313 at 331; 146 ALR 572 at 580. 321. Northern Sandblasting Pty Ltd v Harris, note 320 above, CLR at 331; ALR at 580; Hamilton v Nuroof (WA) Pty Ltd, note 315 above, at 25; Kondis, note 290 above, CLR at 691–2; ALR at 238 and Katsilis v Broken Hill Proprietary Co Ltd (1977) 18 ALR 181 at 206–8. 322. Subsections 19(1)–(2) of the Work Health and Safety Act 2011 (Cth); see also Occupational Health, Safety and Welfare Act 1986 (SA) s 19; Occupational Health and Safety Act 2004 (Vic) s 21; and Occupational Safety and Health Act 1984 (WA) s 19. 323. State of New South Wales v Lepore (2003) 212 CLR 511; 195 ALR 412 at [265] and [34] (NSW v Lepore). 324. Wilsons and Clyde Coal Co Ltd v English, note 290 above, at 78; Stevens v Brodribb Sawmilling Co Pty Ltd, note 319 above, CLR at 32 and 44; ALR at 523 and 532; Kondis, note 290 above, CLR at 680 and 682–3; ALR at 230 and 232 and NSW v Lepore, note 323 above, at [20]. 325. Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520 at 550–1; 120 ALR 42 at 62; Kondis, note 290 above, CLR at 681–2 and 686; ALR at 231–2 and 234–5 and Stevens v Brodribb Sawmilling Co Pty Ltd, note 319 above, CLR at 44; ALR at 532. 326. Stevens v Brodribb Sawmilling Co Pty Ltd, note 319 above, CLR at 32; ALR at 523 and Kondis, note 290 above, CLR at 688; ALR at 235. 327. Andar, note 290 above, at [44]–[51] and [75] and Nicol v Allyacht Spars Pty Ltd, note 317 above, CLR at 617; ALR at 5. 328. Kondis, note 290 above, CLR at 687–8 and 694; ALR 225 at 235 and 240; Leichhardt Municipal Council v Montgomery (2007) 230 CLR 22; 233 ALR 200 at [123] and Patrick Stevedores (No 1) Pty Ltd v Vaughan [2002] NSWCA 275 at [16]. 329. Crimmins, note 290 above, at [164]; Foufoulas v F G Strang Pty Ltd (1970) 123 CLR 168 at 173; Kondis, note 290 above, CLR at 687–8; ALR 225 at 235. 330. Crimmins, note 290 above, at [276] and [305]. 331. Hollis v Vabu Pty Ltd (2001) 207 CLR 21; 181 ALR 63 at [32] and [61] and NSW v Lepore, note 323 above, at [40]; on the anomalous position of Crown employees, see P Hogg and P Monahan, Liability of the Crown, 3rd ed, Carswell, Ontario, 2000, at [6.7] and R Balkin and J Davis, Law of Torts, note 149 above, pp 815–8. 332. Hollis v Vabu Pty Ltd, note 331 above, at [33]–[37], [86]–[93]; NSW v Lepore, note 323 above, at [106], [196]–[202], [298]–[306]. 333. Competition and Consumer Act 2011 (Cth) ss 84 (2) and Fair Work Act s 793.

334. Hollis v Vabu Pty Ltd, note 331 above, at [32]; Northern Sandblasting Pty Ltd v Harris, note 320 above, CLR at 330 and 366; ALR at 579 and 608. 335. See cases at note 321. 336. Katsilis v Broken Hill Proprietary Co Ltd, note 321 above, at 206–9; Hamilton v Nuroof (WA) Pty Ltd, note 315 above, at 25 and 33. 337. NSW v Lepore, note 323 above, at [40], [220]. 338. Safety Rehabilitation and Compensation Act 1988 (Cth) s 66A; Workers’ Compensation Act 1951 (ACT) s 4; Workers’ Compensation Act 1987 (NSW) s 49; Workers’ Rehabilitation and Compensation Act 2008 (NT) s 53; Workers’ Compensation and Rehabilitation Act 2003 (Qld) s 32; Workers’ Rehabilitation and Compensation Act 1986 (SA) ss 30–31; Workers’ Rehabilitation and Compensation Act 1988 (Tas) s 25; Accident Compensation Act 1985 (Vic) s 82; and Workers’ Compensation and Rehabilitation Act 1981 (WA) ss 5, 18–19. The differences between the phrases ‘arising out of’ and ‘in the course’ are discussed in Kavanagh v Commonwealth (1960) 103 CLR 547 at 556–7, 558–9, 575–6 and see generally Hatzimanolis v ANI Corp Ltd (1992) 173 CLR 473 at 478–84; ALR at 613–8 (Hatzimanolis). 339. NSW v Lepore, note 323 above, at [308]; Scott v Davis (2000) 204 CLR 333; 175 ALR 217 at [34]–[35]; Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co-operative Assurance Co of Australia Ltd (1931) 46 CLR 41 at 48; Cornwall v Rowan (2004) 90 SASR 269; [2004] SASC 384 at [477]–[487] and GTS Freight Management Pty Ltd v Transport Workers Union of Australia (1990) 33 IR 26 at 34–5. 340. Humphrey Earl Ltd v Speechley (1951) 84 CLR 126 at 133; Henderson v Commissioner of Railways (WA) (1937) 58 CLR 281 at 294; Hatzimanolis, note 338 above, CLR at 478–9; ALR at 613–4; Whittingham v Commissioner of Railways (WA) (1931) 46 CLR 22 at 29; for employees engaged to work from home see Van Oosterom v Australian Metropolitan Life Assurance Co Ltd [1960] VR 507 at 512–3 and Airfix Footwear Ltd v Cope [1978] ICR 1210. 341. Davidson v Mould (1944) 69 CLR 96; Commonwealth v Oliver (1962) 107 CLR 353; Humphrey Earl Ltd v Speechley, note 340 above. See the statutory extension to this concept for the purposes of workers’ compensation laws in Work Health Act 1986 s 4 (NT); Workers’ Compensation Act 1987 (NSW) s 11; Workers’ Compensation and Rehabilitation Act 2003 (Qld) s 34; Workers’ Rehabilitation and Compensation Act 1986 (SA) s 30; Workers’ Rehabilitation and Compensation Act 1988 (Tas) s 25; Accident Compensation Act 1985 (Vic) s 83(1)(a); and Workers’ Compensation and Injury Management Act 1981 (WA) s 19(1). 342. Hatzimanolis, note 338 above; Nogare v Mosaic Flooring Co Ltd [1965] SASR 120; as to travel from home to work and return, see Safety, Rehabilitation and Compensation Act 1988 (Cth) ss 6, 6A; Workers’ Compensation Act 1951 (ACT) s 8; Work Health Act 1986 (NT) s 4; Workers’ Compensation Act 1987 (NSW) s 10; Workers’ Compensation and Rehabilitation Act 2003 (Qld) s 35; Workers’ Rehabilitation and Compensation Act 1986 (SA) s 30; Workers’ Rehabilitation and Compensation Act 1988 (Tas) s 25; Accident Compensation Act (Vic) 1985 s 83(1)(b), 83(1) (c); and Workers’ Compensation and Injury Management Act 1981 (WA) s 19(1). 343. Wolmar v Travelodge Australia Pty Ltd (1975) 8 ACTR 11; 26 FLR 249; Clissold v Country Roads Board [1981] VR 259; Hatzimanolis, note 338 above; Commonwealth v Lyon (1979) 24 ALR 300. 344. Danvers v Commissioner for Railways (NSW) (1969) 122 CLR 529. 345. NSW v Lepore, note 323 above, at [40] and [228]; and Deatons Pty Ltd v Flew (1949) 79 CLR 370.

346. See NSW v Lepore, note 323 above, at [42], [107] and [307]; though this test has limitations: see at [51] and [226]. 347. NSW v Lepore, note 323 above, at [228], [310]–[313]; Bugge v Brown (1919) 26 CLR 110 at 117. 348. NSW v Lepore, note 323 above, at [231], [239]; Deatons Pty Ltd v Flew, note 345 above, at 381 and Poland v John Parr & Sons [1927] 1 KB 236 at 240 and 245. 349. NSW v Lepore, note 323 above, at [43], [231] and [239]; Kooragang Investments Pty Ltd v Richardson & Wrench Ltd [1982] AC 462 at 472; Deatons Pty Ltd v Flew, note 345 above, at 381; Century Insurance Co Ltd v Northern Ireland Road Transport Board [1942] AC 509; 1 All ER 491. 350. Hayward v Georges Ltd [1966] VR 202 at 211–2. 351. Deatons Pty Ltd v Flew, note 345 above, at 381 per Dixon J; NSW v Lepore, note 323 above, at [231], [239]; Lloyd v Grace, Smith & Co [1912] AC 716 at 733; Morris v C W Martin & Sons Ltd [1966] 1 QB 716 at 741. 352. NSW v Lepore, note 323 above, at [46], [52], [113], [228]–[230] and [312]. 353. Lloyd v Grace, Smith & Co, note 351 above, at 733; NSW v Lepore, note 323 above, at [44]–[45], [235]. 354. NSW v Lepore, note 323 above, at [232] per Gummow and Hayne JJ; see also at [46]–[52], [74], [229] and [233]; see also the approach of Kirby J in NSW v Lepore at [315]–[320]; Lister v Hesley Hall Ltd [2002] 1 AC 215 at [28], [49] and [59]. 355. Deatons Pty Ltd v Flew, note 345 above, at 379, 381 and 386; NSW v Lepore, note 323 above, at [48]–[51]. 356. NSW v Lepore, note 323 above, at [41]; Morris v C W Martin & Sons Ltd, note 351 above, at 733–4. 357. NSW v Lepore, note 323 above, at [46] per Gleeson CJ. 358. NSW v Lepore, note 323 above, at [54]; cases on the course of employment and assault include Deatons Pty Ltd v Flew, note 345 above; Weston v Great Boulder Gold Mines Ltd (1964) 112 CLR 30; South Maitland Railways Pty Ltd v James (1943) 67 CLR 496; Davis v Mobil Oil Australia Ltd (1988) 12 NSWLR 10; Bill Williams Pty Ltd v Williams (1972) 126 CLR 146. 359. Hilton v Thomas Burton (Rhodes) Ltd [1961] 1 All ER 74; Harvey v RG O’Dell Pty Ltd [1958] 2 QB 78; Chaplin v Dunstan [1938] SASR 245; Smith v Stages [1989] 2 AC 928; see also Hatzimanolis, note 338 above, and the cases at notes 342 and 343. 360. Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Co-operative Assurance Co of Australia Ltd, note 339 above, at 47; Limpus v London General Omnibus Co (1862) 1 H & C 526; 158 ER 993; NSW v Lepore, note 323 above, at [311]. 361. Ilkiw v Samuels [1963] 1 WLR 991 at 1004; [1963] 2 All ER 879 at 889; Bugge v Brown, note 347 above, at 121–2. 362. This approach to determining foreseeability of the risk before considering the response to the risk was set out in Council of the Shire of Wyong v Shirt (1980) 146 CLR 40 at 47; 29 ALR 217 at 221 and has been followed by the High Court of Australia in New South Wales v Fahy, note 316 above, at [6], [56]–[58], [78]–[79] and [129]–[133]; Roads and Traffic Authority of NSW v Dederer (2007) 234 CLR 330; 238 ALR 761 at [134]–[136]; Koehler v Cerebos (Australia) Ltd, note 18 above, at [19]–[24] and [54]–[55] (Koehler); Miletic v Capital Territory Health

Commission (1995) 130 ALR 591 at 594 and Liftronic Pty Ltd v Unver (2001) 179 ALR 321 at [25] and [36]. 363. Katsilis v Broken Hill Proprietary Co Ltd, note 321 above, at 209. 364. Paris v Stepney Borough Council, note 290 above, at 380 and 384; Hamilton v Nuroof (WA) Pty Ltd, note 315 above, at 25; Smith v Broken Hill Pty Co Ltd (1957) 97 CLR 337 at 342–3; McLean v Tedman, note 313 above, CLR at 311–2; ALR at 363; Bankstown Foundry Pty Ltd v Braistina, note 315 above, CLR at 307–8; ALR at 6; Stevens v Brodribb Sawmilling Co Pty Ltd, note 319 above, CLR at 50; ALR at 536 and Jones v Persal & Co [2000] QCA 386 at [8]. 365. Turner v State of South Australia, note 315 above, at 675; Crimmins, note 290 above, at [276]; Bourke v Hassett [1999] 1 VR 189 at [41]–[42]; New South Wales v Fahy, note 316 above, at [5] and Karatzidis v Victorian Railways Commissioners [1971] VR 360 at 364. 366. Hamilton v Nuroof (WA) Pty Ltd, note 315 above, at 25; Kondis, note 290 above, CLR at 680 and 693–4; ALR 225 at 230 and 240 and Turner v State of South Australia, note 315 above, at 675. 367. O’Connor v Commissioner for Government Transport, note 317 above, at 230; Bankstown Foundry Pty Ltd v Braistina, note 315 above, CLR at 314; ALR at 10 and Woods v Multi-Sport Holdings Pty Ltd (2002) 208 CLR 460; 186 ALR 145 at [71] and [108]. 368. Schellenberg, note 315 above, at [152] and [101] and Liftronic Pty Ltd v Unver, note 362 above, at [85]. 369. Council of the Shire of Wyong v Shirt, note 362 above, CLR at 47; ALR at 221; Da Costa v Cockburn Salvage & Trading Pty Ltd, note 290 above, at 198; Koehler, note 362 above, at [19], [26] and [35] and Mount Isa Mines Ltd v Pusey (1970) 125 CLR 383 at 392. 370. Council of the Shire of Wyong v Shirt, note 362 above, CLR at 48; ALR at 221; Koehler, note 362 above, at [33]; Tame v New South Wales, note 292 above, at [16], [61]–[62] and [201]. 371. Abalos v Australian Postal Commission (1990) 171 CLR 167 at 179–80; 96 ALR 354 at 363–4. 372. Koehler, note 362 above, at [35] and Hatton v Sutherland [2002] 2 All ER 1 at 14–16. 373. Koehler, note 362 above, at [28] and [40]–[41]. 374. Council of the Shire of Wyong v Shirt, note 362 above, CLR at 47; ALR at 221; Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540; 194 ALR 337 at [192]; Miletic v Capital Territory Health Commission, note 362 above, at 594; Australian Traineeship System v Wafta [2004] NSWCA 230; (2004) 166 IR 243 at [8]; Rae v Broken Hill Pty Co Ltd (1957) 97 CLR 419 at 425 and 427; and Foufoulas v F G Strang Pty Ltd, note 329 above, at 183. 375. Hamilton v Nuroof (WA) Pty Ltd, note 315 above, at 24, 26 and 33; Council of the Shire of Wyong v Shirt, note 362 above, CLR at 47–8; ALR at 220–1; McLean v Tedman, note 313 above, CLR at 311–3; ALR at 362–3; Stevens v Brodribb Sawmilling Co Pty Ltd, note 319 above, CLR at 42–3; ALR at 531; Raimondo v South Australia, note 290 above, at 518; Miletic v Capital Territory Health Commission, note 362 above, at 594; Latimer v AEC Ltd [1953] AC 643 at 659; McLean’s Roylen Cruises Pty Ltd v McEwan, note 315 above, ALR at 7. 376. New South Wales v Fahy, note 316 above, at [6]–[7], [56]–[58] and [101]–[133] and Vairy v Wyong Shire Council (2005) 223 CLR 422; 221 ALR 711 at [72], [105] and [120]. 377. Cook v Cook (1986) 162 CLR 376 at 382; 68 ALR 353 at 357. 378. Liftronic Pty Ltd v Unver, note 362 above, at [85] and Smith v Broken Hill Pty Co Ltd, note 364 above, at 339. 379. Vairy v Wyong Shire Council, note 376 above, at [49], [105], [126] and [128].

380. Rae v Broken Hill Pty Co Ltd, note 374 above, at 430. 381. Vozza v Tooth & Co Ltd (1964) 112 CLR 316 at 319; Neill v NSW Fresh Food and Ice Pty Ltd (1963) 108 CLR 362 at 364; [1963] ALR 258 and Schellenberg, note 315 above, at [104]. 382. Vozza v Tooth & Co Ltd, note 381 above, at 319; Bankstown Foundry Pty Ltd v Braistina, note 315 above, CLR at 308–310; ALR at 6–7; Raimondo v South Australia, note 290 above, at 518 and Castro v Transfield (Qld) Pty Ltd (1983) 155 CLR 687; 47 ALR 715 at 717. 383. Gillespie v Commonwealth (1993) Aust Torts Reports 81–217. 384. Waugh v Kippen (1986) 160 CLR 156 at 161–2; 64 ALR 195 at 198–199. 385. Swain v Waverley Municipal Council (2005) 220 CLR 517; 213 ALR 249 at [41]; Neill v NSW Fresh Food and Ice Pty Ltd, note 281 above, CLR at 368–70; Australian Oil Refining Pty Ltd v Bourne (1980) 28 ALR 529 at 532 and Vozza v Tooth & Co Ltd, note 281 above, at 319 and 321. 386. Czatyrko, note 315 above, at [12]; Smith v Broken Hill Pty Co Ltd, note 364 above, at 342–3; McLean v Tedman, note 313 above, CLR at 311–2; ALR at 363; Ferraloro v Preston Timber Pty Ltd, note 315 above, at 629; Bus v Sydney County Council (1989) 167 CLR 78 at 90; 85 ALR 577 at 585; Bankstown Foundry Pty Ltd v Braistina, note 315 above, CLR at 309; ALR at 7 and Liftronic Pty Ltd v Unver, note 362 above, at [87]. 387. Smith v Broken Hill Pty Co Ltd, note 364 above, at 342. 388. Bankstown Foundry Pty Ltd v Braistina, note 315 above, CLR at 307–8 and 309; ALR at 6–7 and Liftronic Pty Ltd v Unver, note 362 above, at [60]. 389. Trend Management Ltd v Borg, note 302 above, NSWLR at 508–9; IR at 24. 390. Paris v Stepney Borough Council, note 290 above, at 384; Koehler, note 362 above, at [35] and [41]; Stoker v Adecco Gemvale Constructions Pty Ltd [2004] NSWCA 449 at [77]–[78]; Brkovic v Clough (J O) & Son Pty Ltd (1983) 49 ALR 256 at 257 and Illawarra Area Health Service v Dell [2005] NSWCA 381. 391. McLean v Tedman, note 313 above, CLR at 313; ALR at 364. 392. Wilsons and Clyde Coal Co Ltd v English, note 290 above, at 78; Crimmins, note 290 above, at [276] and Chugg v Pacific Dunlop Ltd, note 306 above, CLR at 251; ALR at 482. 393. Turner v State of South Australia, note 315 above, at 670 and Roads and Traffic Authority of NSW v Dederer, note 362 above, at [278]. 394. Vozza v Tooth & Co Ltd, note 381 above, at 318; Roads and Traffic Authority of NSW v Dederer, note 362 above, at [278] and NSW v Lepore, note 323 above, at [22]. 395. Electric Power Transmission Pty Ltd v Cuiuli (1961) 104 CLR 177 at 183; 34 ALJR 478. 396. Morris v West Hartlepool Steam Navigation Co Ltd [1956] AC 552 at 576 and 579; Cavanagh v Ulster Weaving Co Ltd, note 290 above, at 158 and 161; General Cleaning Contractors Ltd v Christmas [1953] AC 180 at 192; Foufoulas v F G Strang Pty Ltd, note 329 above, at 181. 397. General Cleaning Contractors Ltd v Christmas, note 396 above, at 195. 398. Occupational Health, Safety and Welfare Act 1986 (SA) s 19; Occupational Health and Safety Act 2004 (Vic) s 21; Work Health and Safety Acts 2011 s 19; Occupational Safety and Health Act 1984 (WA) s 19. 399. Occupational Health and Safety Act 2004 (Vic) s 20; Work Health and Safety Acts 2011 s 18 and Occupational Safety and Health Act 1984 (WA) s 3. 400. Slivak v Lurgi (Australia) Pty Ltd (2001) 205 CLR 304; 177 ALR 585 at [58], [92]–[98] and [39]

and Chugg v Pacific Dunlop Ltd, note 306 above, CLR at 257–63; ALR at 486–91. 401. Cotter v Huddart Parker Ltd, note 319 above, at 37–8; Wilsons and Clyde Coal Ltd v English, note 290 above, at 78; Kondis, note 290 above, CLR at 680 and 687; ALR 225 at 230 and 235 and Schellenberg, note 315 above, at [101]. 402. Wilson v Tyneside Window Cleaning Co [1958] 2 QB 110 at 121 and Karatzidis v Victorian Railways Commissioners, note 365 above, at 365. 403. Vozza v Tooth & Co Ltd, note 381 above, at 318; McLean v Tedman, note 313 above, CLR at 313; ALR at 364; Stevens v Brodribb Sawmilling Co Pty Ltd, note 319 above, CLR at 31 and 49; ALR at 522 and 535; Kondis, note 290 above, CLR at 688–9, 691 and 694–5; ALR 225 at 235–7, 238 and 240–1; Raimondo v South Australia, note 290 above, at 517 and 519; Nicol v Allyacht Spars Proprietary Ltd, note 317 above, CLR at 616, 619 and 624; ALR at 5, 7 and 11; Schellenberg, note 315 above, at [149]; Czatyrko, note 315 above, at [12]–[16] and Andar, note 290 above, at [54]–[55]. 404. Raimondo v South Australia, note 290 above, at 519. 405. Czatyrko, note 315 above, at [12]–[16] and Smith v Broken Hill Pty Co Ltd, note 364 above, at 342. 406. Work Health and Safety Acts 2011 s 19; Occupational Health, Safety and Welfare Act 1986 (SA) s 19; Workplace Health and Safety Act 1995 (Tas) s 9; Occupational Health and Safety Act 2004 (Vic) s 21; and Occupational Safety and Health Act 1984 (WA) s 19. 407. Speed v Thomas Swift & Co Ltd [1943] All ER 539 at 563–64. 408. English v Wilsons & Clyde Coal Co Ltd [1936] SC 883 at 904, quoted in Andar, note 290 above, at [54]. 409. Quigley v Commonwealth, note 313 above, at 542–3 and 546; Duyvelshaff v Cathcart & Ritchie Ltd (1973) 1 ALR 125 at 142–3; 47 ALJR 410 at 415, 417 and 419 and Turner v State of South Australia, note 315 above, at 670. 410. Vozza v Tooth & Co Ltd, note 381 above, at 318 and Da Costa v Cockburn Salvage & Trading Pty Ltd, note 290 above, at 205. 411. Andar, note 290 above, at [57] and Ferraloro v Preston Timber Pty Ltd, note 315 above, at 629. 412. Nicol v Allyacht Spars Pty Ltd, note 317 above, CLR at 618 and 626; ALR at 6 and 11–12 and Andar, note 290 above, at [54]. 413. Hamilton v Nuroof (WA) Pty Ltd, note 315 above, at 24–5. 414. McLean v Tedman, note 313 above, CLR at 314; ALR at 365 and Kingshott v Goodyear Tyre & Rubber Co Australia Ltd (No 2) (1987) 8 NSWLR 707 at 720 and 726–7. 415. Da Costa v Cockburn Salvage & Trading Pty Ltd, note 290 above, at 198, 215–6 and 218; Kondis, note 290 above, CLR at 688–9 and 694–5; ALR 225 at 236–7 and 240–1 and O’Connor v Commissioner for Government Transport, note 317 above, at 229. 416. McLean’s Roylen Cruises Pty Ltd v McEwan, note 315 above, ALR at 7 and Raimondo v South Australia, note 290 above, at 517. 417. O’Connor v Commissioner for Government Transport, note 317 above, at 229–30; Raimondo v South Australia, note 290 above, at 518 and McLean’s Roylen Cruises Pty Ltd v McEwan, note 315 above, ALR at 8. 418. Schellenberg, note 315 above, at [101] and [149]; Miletic v Capital Territory Health

Commission, note 362 above, at 594; Australian Oil Refining Pty Ltd v Bourne, note 385 above, at 531–2 and Boyded Industries Pty Ltd v Canuto [2004] NSWCA 256 at [25]. 419. ACI Metal Stamping and Spinning Pty Ltd v Boczulik (1964) 110 CLR 372 at 375 and 378–9 and 380–1 and Miller v BP Kwinana Ltd [2002] WASCA 201 at [49]–[53]. 420. Wilson v Tyneside Window Cleaning, note 402 above, at 121 and 124. 421. Bourke v Victorian Workcover Authority [1999] 1 VR 189 at 200 and Smith v Austin Lifts Ltd [1959] 1 All ER 81 at 94. 422. DIB Group Pty Ltd v Cole [2009] NSWCA 210 at [54] and Bourke v Victorian Workcover Authority, note 421 above, at 200–1. 423. Work Health and Safety Acts 2011 ss 19(3)(a), (e) and (g); see also Occupational Health, Safety and Welfare Act 1986 (SA) s 19; Occupational Health and Safety Act 2004 (Vic) ss 21(2)(c), (d) and 22; and Occupational Safety and Health Act 1984 (WA) s 19(1)(a). 424. Work Health and Safety Acts 2011 s 19(4): see also Occupational Health, Safety and Welfare Act 1986 (SA) s 19(3)(i). 425. Czatyrko, note 315 above, at [16]; Schellenberg, note 315 above, at [114]–[115] and [152]; TNT Australia Pty Ltd v Christie (2003) 65 NSWLR 1 at [61] and [153]; Foufoulas v F G Strang Pty Ltd, note 329 above, at 183; Galea v Bagtrans Pty Ltd, note 319 above, at [5] and [65] and Fuller v New South Wales Department of School Education and Training [2004] NSWCA 242 at [4] and [34]. 426. Schellenberg, note 315 above, at [101]–[102] and [127]. 427. Schellenberg, note 315 above, at [102]–[103] and Dhu v Total Corrosion Control Pty Ltd [2002] WASCA 173 at [31] and [38]. 428. Fuller v New South Wales Department of School Education and Training, note 425 above, at [24] and [29]–[31]. 429. Davie v New Merton Board Mills Ltd [1959] AC 604 at 645–46, referred to in DIB Group Pty Ltd v Cole, note 422 above, at [32]; TNT Australia Pty Ltd v Christie, note 425 above, at [55] and Kondis, note 290 above, CLR at 683; ALR at 232. 430. Foufoulas v F G Strang Pty Ltd, note 329 above, at 172 and 183. 431. Work Health and Safety Acts 2011 s 19(3)(b); Occupational Health, Safety and Welfare Act 1986 (SA) s 19; Occupational Health and Safety Act 2004 (Vic) s 21; Occupational Safety and Health Act 1984 (WA) s 19(1)(a). 432. Occupational Safety and Health Act 1984 (WA) s 19(1)(d). 433. Work Health and Safety Acts 2011 ss 20–21; see also Occupational Health, Safety and Welfare Act 1986 (SA) ss 23A–24A; Occupational Health and Safety Act 2004 (Vic) ss 26–27; and Occupational Safety and Health Act 1984 (WA) ss 22–23. 434. Antoniak v The Commonwealth (1962) 4 FLR 454 at 458; Wilsons & Clyde Coal Co Ltd v English, note 290 above, at 73 and 84. 435. Hudson v Ridge Manufacturing Co Ltd [1957] 2 QB 348 at 250; Antoniak v The Commonwealth, note 434 above, at 459 and Gittani Stone Pty Ltd v Packovic [2007] NSWCA 355 at [33], [101] and [147]. 436. Macquarie Area Health Service v Egan [2002] NSWCA 26 at [2] and [36]–[52]. 437. See WHS Acts s 19(3)(f); Occupational Health, Safety and Welfare Act 1986 (SA) s 19;

Occupational Health and Safety Act 2004 (Vic) s 19; Occupational Safety and Health Act 1984 (WA) s 19(1)(a). 438. Limitation Act 1985 (ACT) ss 11 and 16A–B; Limitation Act 1969 (NSW) ss 50C, 18A and 14; Workers’ Compensation Act 1987 (NSW) s 151D; Limitation Act 1981 (NT) s 12; Limitation of Actions Act 1974 (Qld) s 11; Limitation of Actions Act 1936 (SA) s 36; Limitation Act 1974 (Tas) ss 5 and 5A; Limitation of Actions Act 1958 (Vic) ss 5 and 27D; Limitation Act 2005 (WA) ss 14 and 55–56. 439. Cornwell v Commonwealth of Australia, note 151 above, at [85]. 440. Commonwealth of Australia v Cornwell, note 298 above, at [5] and [53] and Cartledge v E Jopling & Sons Ltd [1963] AC 758 at 771–2, 774 and 776. 441. Limitation Act 1969 (NSW) ss 50A–50D; Limitation Act 1974 (Tas) ss 5–5A; and Limitation of Actions Act 1958 (Vic) ss 27D–27F. 442. Limitation Act 1985 (ACT) s 36; Limitation Act 1981 (NT) s 44; Workers’ Compensation Act 1987 (NSW) s 151D(2); Limitation of Actions Act 1974 (Qld) s 31; Limitation of Actions Act 1936 (SA) s 48; Limitation Act 1974 (Tas) ss 5(3) and 5A(5); Limitation of Actions Act 1958 (Vic) s 23A; and Limitation Act 2005 (WA) s 39. 443. Safety, Rehabilitation and Compensation Act 1988 (Cth) ss 4(1) and 42–52A; Workers’ Compensation Act 1951 (ACT) Pt 9.3; Workers’ Compensation Act 1987 (NSW) ss 151–151T; Workers’ Rehabilitation and Compensation Act 1986 (NT) ss 52 and 54; Workers’ Compensation and Rehabilitation Act 2003 (Qld) Ch 5; Accident Compensation Act 1985 (Vic) ss 134–135B; Workers’ Rehabilitation and Compensation Act 1986 (SA) s 54; Workers’ Rehabilitation and Compensation Act 1988 (Tas) Pt X and Workers’ Compensation and Injury Management Act 1981 (WA) ss 93A–93S. 444. Workers’ Rehabilitation and Compensation Act 1986 (NT) ss 52 and 54 and Workers’ Rehabilitation and Compensation Act 1986 (SA) s 54.

[page 559]

Chapter 9 Performance of the Contract Overview and Definitions Order of Performance The obligation to pay wages is usually a dependent obligation The wages for service bargain and the obligation to serve Independent obligations to pay remuneration Readiness and willingness to serve: orthodoxy and heterodoxy Duration of Performance: Entire and Divisible Contracts and Obligations The great case of Cutter v Powell and the fall of entire employment contracts Entire and divisible contracts and obligations The common law entire obligation rule The Apportionment Acts and entire obligations Exact, Substantial, Partial and Defective Performance Exact performance and the doctrine of substantial performance Remuneration and industrial action under the Fair Work Act The rejection and acceptance of part performance: ‘no work-no pay’ Deductions, Truck Act provisions, forfeiture, abatement and set-off Who Must Perform and Time for Performance Personal performance of the contract The time for performance Suspension of Performance and Standing Down Employees

Suspension: the general principle [page 560] The Crown’s right to suspend and statutory powers of suspension Effect of valid and invalid suspensions The power to stand down employees

OVERVIEW AND DEFINITIONS 9.1 Few questions are of so much practical importance, and at the same time so difficult to solve, as those in which the dispute is whether an action for wages can be brought by an employee who has not exactly performed the contract. Simply put: what does an employee have to do to earn wages?

How most national system employees earn wages 9.2 The position of most national system employees engaged under a modern award can be summarised as follows. The employee earns wages by substantially performing his or her obligations. He or she earns an hour’s wages at the completion of each hour’s service, but earns no wages for completing work for less than an hour. The employee earns no wages after being dismissed. No wages are payable while engaged in industrial action and, broadly speaking, the employee must not be paid for four hours for unprotected industrial action. He or she can be sued for damages for defective performance. An employer can reject an offer of part performance of the contract and can also, possibly, apply an equitable set-off to reduce the wages or abate the wages to take into account certain types of defective performance. The employee must personally perform the contract, cannot be suspended by the employer and can in some circumstances be stood down under the Fair Work Act.

Overview of the issues

9.3 The simplicity of this summary masks a series of complexities considered in this chapter. To ascertain what the employee must do to earn wages it is necessary to first determine whether the employee’s right to wages depends on the performance of service. Ordinarily, the employee must perform service to earn wages: the payment of the wages is the reward provided for performance: see 9.9. Service in this sense does not mean performing work; it means performing the obligations imposed by the terms, which, in some cases, involves not performing work: see 9.11–9.12. In unusual cases the contract, a statute or an industrial instrument requires the employer to pay wages or provide other remuneration notwithstanding the failure of the employee to serve: see 9.13–9.16. [page 561] Where the right to wages depends on the performance of service, it is necessary to consider a series of subsidiary issues which determine the period the employee must serve to earn wages. This period depends on whether the contract is entire or divisible, terms that are defined below. If the contract is divisible, the next issue is whether the obligation to serve is an entire or divisible obligation: see 9.26–9.28. Most contracts of employment are divisible and most obligations to serve are entire obligations to which the common law entire obligation rule applies. That rule provides that, subject to certain exceptions, when a contract contains an entire obligation to serve for a specified period (such as a week or a month) as a condition precedent to the earning of wages, then an employee does not earn wages if he or she fails to serve for the complete specified period: see 9.29–9.31. The next issue is the effect of statute on that common law rule; in particular, whether the wages are apportionable under the Apportionment Act or s 323 of the Fair Work Act: see 9.32–9.34. 9.4 If the employee has served for the required period to earn the wages, the next set of issues is whether the employee has performed his or her obligations to the required standard. Exact performance of all of the employee’s obligations is not necessary to earn wages, unless a contract or statute expressly makes it so; substantial performance is sufficient: see 9.36–9.38. When an employee has offered to partly perform the contract

(such as when the employee agrees to do some of the contractually agreed tasks but not others), the employer has a right to accept or reject the part performance. Wages dependent on the performance of service are not earned following a rejection of part performance. Substantial poerformance after the acceptance of part performance does earn wages: see 9.42–9.46. The Fair Work Act significantly changes these rules concerning part performance where a national system employee’s failure to perform has arisen from industrial action: see 9.39–9.41. If wages have been earned, the Fair Work Act requires the employer to pay the full amount. Certain deductions are permitted. These are discussed in 9.47–9.52 alongside the notion of forfeiture, the defence of abatement, and statutory and equitable setoff. 9.5 The obligations imposed by an employment contract must be personally performed unless there is a right to render vicarious performance or to assign the obligation. Whether vicarious performance of an obligation is permitted depends on whether the identity of the person who performs the obligation is a matter of indifference to the contracting party for whose benefit the obligation is imposed. The employee’s obligation to serve cannot ordinarily be performed by [page 562] another. Other obligations, such as the obligation to pay wages, are often able to be performed by a third party: see 9.53–9.54. The time for the performance of obligations under the contract is discussed in 9.55–9.56. The assignment of rights and obligations is considered in 6.40. A party has no right to suspend the performance of contractual obligations in the absence of an express contractual or statutory right to do so: see 9.57–9.59. The position of Crown employees and certain officers is different and some statutes governing public sector employment permit suspensions when disciplinary charges are pending: see 9.60–9.61. The effect of a suspension that complies with or contravenes the contract or statute is considered in 9.62. Under the Fair Work Act there is a right to stand down employees who cannot be usefully employed in certain circumstances: see

9.63.

Definitions in this chapter 9.6 Many of the issues dealt with in this chapter involve concepts that are rarely examined in detail in employment law. In this area it is important that terms be used consistently and are clearly defined. Obligations under employment contracts may be dependent or independent.1 A dependent obligation means an obligation that need not be performed until the other party has performed its obligation. The requirement to perform the dependent obligation only arises when the condition precedent to its performance is satisfied. An independent obligation is an obligation that does not depend on the performance of the contract by the other party: see 9.9 and 9.13. Whether an obligation is dependent or independent is ascertained from the terms of the contract and the surrounding circumstances.2 It would be very unusual for a court to conclude that the right to wages under a contract, statute or industrial instrument was an obligation that was independent of the obligation to serve.3 Not all of the employer’s obligations under the contract will be dependent on the employee’s prior service: see 9.13–9.16. [page 563] 9.7 An entire contract is a contract in which the consideration provided to the employee is entire, indivisible, not severable and is not apportioned against part of the performance by the employee. For example, a contract to paint a wall for $500 is an entire contract. Painting half of the wall does not earn half of the wage. A divisible (or severable) contract is one in which different parts of the consideration may be assigned to different parts of the performance. For example, a contract to paint a wall for eight hours per day, paying $10 per hour, is a divisible contract as part of the consideration ($10) can be assigned to part of the performance (one hour): see 9.26–9.28. An entire obligation is an obligation the complete performance of which is a condition precedent to the payment of wages. For example, an ongoing

contract to paint walls for $500 per week payable each Friday is an entire obligation where the contract does not specify what part of the $500 is referable to particular days or hours of work. Painting the wall for half a week does not earn half the wages. A divisible (or severable) obligation is an obligation that can be divided into discreet portions or which is infinitely divisible. An ongoing contract of indefinite duration to paint walls for $10 an hour, payable each Friday, is divisible into discreet hourly portions: see 9.26–9.28. A divisible contract can contain a series of entire obligations. Exact performance of an obligation or contract is the full and complete performance of the obligation in accordance with the standard of duty applicable to the obligation. Substantial performance is performance that is less than full and complete, but in which the party performs the substance of the essential obligations. Defective performance means performance that is not exact performance. It includes performance that is so defective that it does not amount to substantial performance. An employee engaged to work 40 hours a week, but who only works for 38 hours, will have rendered substantial performance, but not exact performance; whereas if the employee only works for 20 hours, the performance will be defective and not substantial: see 9.36–9.38 and 9.47–9.52. 9.8 Care must be taken in the use of the phrase ‘condition precedent’ in this area. The word ‘condition’ is used in a number of different senses in contract law. Condition is not used in this chapter to mean a term any breach of which will justify the termination of the contract.4 Ordinarily the performance of service is a condition precedent to the obligation to [page 564] pay wages: see 9.9. But it is a different thing to say that the employee ‘never become[s] entitled to any payment unless he completes every tittle of his promise’.5 The condition is satisfied by substantial performance of the employee’s obligations: see 9.36–9.38. If it were otherwise, and exact performance was required before an entitlement to wages arose, almost every minor breach by the employee would disentitle him or her to wages. As Professor Stoljar states, to so construe an employment contract transforms it ‘into a gamble: win, if complete performance; lose, if anything less than full

completion’.6

ORDER OF PERFORMANCE The obligation to pay wages is usually a dependent obligation 9.9 In almost all employment contracts the employer’s obligation to pay wages is a dependent obligation. The employee must perform the service before the wages are payable. The performance of the service is a condition precedent to the obligation to pay the wages.7 These propositions do not apply in the unusual cases where a contract, statute or industrial instrument imposes an obligation to pay wages, or other forms of remuneration, independent of the performance of service: see 9.13–9.16. What is meant by service is discussed in 9.11–9.12. The readiness and willingness of the employee to perform the service is not sufficient to earn wages.8 There must be actual service to earn wages. For this reason, an employee does not earn wages when an employer [page 565] wrongfully prevents the employee performing the service.9 As Dixon J has stated: The common understanding of a contract of employment at wages or salary periodically payable is that it is the service that earns the remuneration and even a wrongful discharge from the service means that wages or salary cannot be earned however ready and willing the employee may be to serve and however much he stand by his contract and decline to treat it as discharged by breach.10

Rather, a wrongfully dismissed employee can recover damages caused by the breach of the obligation to retain the employee for the duration of the contract. And where an employee is not so retained the mere readiness and willingness of the employee will be insufficient to earn the wages.11

Constructive service 9.10 There was once a notion of constructive service in the law of master and servant that permitted a servant to earn wages when ready, willing and able to do so, but prevented from doing so by a wrongful dismissal. This notion originated from the operation of the Poor Laws, which are discussed in more detail in 1.29 and 1.39. It arose in the following manner: to gain a settlement in a parish a servant was required to serve for a year. During that year the master had to possess complete dominion over the servant. The service could be actual service in the sense discussed in 9.9 or constructive service which consisted of the servant not being required to attend for work but remaining in the service of the master. In the terms used in the early nineteenth century, the services were dispensed with, but the service was not dissolved. [page 566] There were dozens of cases dealing with various aspects of dispensation.12 It was assumed that a wrongfully dismissed servant remained in the service of the master even after dismissal unless discharged by the master. The dismissed servant could wait until the expiration of the term of engagement and sue for wages on the basis of constructive service. This notion of constructive service barely survived the repeal of the Poor Laws in 1827. The 1840 edition of Smith’s Leading Cases conceded that ‘perhaps’ suing for wages after a dismissal was an option for an employee, and was said to be a peculiarity of the law arising from the law of servants.13 By the mid-1850s that approach had been rejected14 and by 1907 Higgins J observed that the notion that a wrongfully dismissed employee could earn wages by being ready, willing and able to perform the contract ‘has long since been exploded’.15

The wages for service bargain and the obligation to serve 9.11 Employment is often pithily described as a wages for work bargain.16 This is at best a partially correct aphorism. It will not be correct when the

obligation to pay wages is an independent obligation or where it is a dependent obligation that is not fulfilled by the performance of work: see 9.13–9.16. The description ‘wages for work’ is only partially correct because wages are earned by service, not by the performance of work. The concepts are different. There are many situations in which an employee is excused from performance of work but is still entitled to wages. Paid sick leave is an example. Under most contracts and s 99 of the Fair Work Act an employee is granted the right to be absent from work for a limited period while sick and the right to be paid for such a period. The payment to the employee in such a case is ‘wages in every sense of the word’.17 Other periods of authorised leave will usually be service for the purpose [page 567] of earning wages: ‘they also serve who only stand and wait’.18 Where an employee is excused from performing work he or she can earn wages: ‘not because he has been temporarily out of the service, but because under the conditions of his service he has been dispensed from carrying his duties out’.19 9.12 The essence of the employee’s obligation is a promise to serve in accordance with the contract. The absence of a promise to serve by an employee will mean that the contract will often fail for want of mutuality, unless supported by some other consideration: see 3.30. Service is the usual condition to earning wages: see 9.9. It is a promissory condition. The failure to serve in accordance with the contract will be a breach by the employee, subject to certain provisos discussed in 7.2.

Independent obligations to pay remuneration 9.13 In unusual cases a contract may require the employer to pay wages independently of the performance of service by the employee. In such cases the employee can recover wages (not simply damages) notwithstanding the failure to serve.20 Whether the employer’s obligation to pay wages is

dependent on or independent of the employee’s obligation to serve depends on the terms of the contract and the surrounding circumstances.21 The terms would need to be clear before a court concluded that there was an independent obligation to pay wages. One of the few examples of such an obligation is provided in the bizarre case of Inland Revenue Commissioners v Duke of Westminster.22 [page 568] The Duke, who was reputed to be one of the five richest men in England at the time, entered into a deed with his gardener, and many of his other servants, for the purpose of avoiding tax. The gardener, Mr Frank Allman, had been engaged for many years on a wage of 38 shillings per week. Under the deed Mr Allman was to be paid 38 shillings per week for seven years, whether Mr Allman performed work for the Duke or not. Under a separate contract, Mr Allman agreed to continue to serve the Duke and be paid nothing (his wage under the contract was equal to the difference between the former wage of 38 shillings and the weekly amount under the deed of 38 shillings). Under this extraordinary arrangement, Mr Allman received a payment of 38 shillings under the deed and received nothing under his contract of service. As Dixon J observed of this case: It is, of course, possible for the parties to make a contract for the payment of periodical sums by the master to the servant independently of his service. Indeed that is, in effect, what the Duke of Westminster persuaded the majority of the House of Lords he had done in Inland Revenue Commissioners v Duke of Westminster. But, to say the least, it is not usual.23

Common independent obligations to pay remuneration 9.14 The principal utility of the distinction between dependent, independent and concurrent obligations lies in determining which party must perform his, her or its obligations first. The discussion of the principles in this chapter focuses on the common scenario of an employee paid wages in arrears. Not all wages are paid in arrears, and not all remuneration is in the form of wages. The employer is required to perform some obligations before the employee performs service and may be obliged to provide some types of remuneration

even when the employee has failed to serve. A sign-on fee paid to an employee will not be dependent on past service and is usually payable on the signing of the contract, even if the employee does not later perform service under the contract. It is difficult to see how the right to be paid wages can be said to be a dependent obligation where the employee is paid wholly in advance.24 In such a case it is possible that the obligation to serve is dependent on the employer performing an antecedent obligation to pay wages. [page 569] Some employment obligations will be incapable of being dependent.25 The obligation to make payments in relation to notice after the termination of the employment relationship is not dependent on service.26 Other obligations to make payments may only arise after the termination of the employment and the opportunity to provide service has ceased, such as where the employee is paid commission for work done during the employment that only becomes payable after the termination of the relationship. For some pieceworkers who are entitled to be provided with work, the employee’s obligation to serve (or at least perform work) may be dependent on the performance of an employer’s obligation to provide work. Some office holders are entitled to be paid an honorarium, fees or a salary by virtue of holding the office rather than performing service or carrying out the functions of that office. The right to payment of an officer and the conditions which must be met before payment is made will depend on the terms of the instrument creating and governing the office and the terms of the appointment to that office.27 Officers invalidly dismissed or suspended from their office may be entitled to continue to receive their salary and emoluments.28

Statutory modification of the obligation to pay wages 9.15 The right to payment under a statute or industrial instrument is a right that is statutory in nature; it is not a contractual right.29 Where the statute or industrial instrument merely stipulates the amount of the wages and does not

govern the circumstances in which wages are paid, [page 570] the right to wages will depend on whether the employee has earned the wages under the contract: ‘all that the Act has done is substitute another method of determining the amount of the remuneration’.30 The defences that can be raised by an employer under the common law and equity to resist a claim for wages will usually be available to resist a similar claim under the statute or industrial instrument. Some statutes and industrial instruments not only set the quantum of the wages but also exhaustively deal with the circumstances in which wages are payable. The statute or industrial instrument will then govern that matter to the exclusion of inconsistent common law and equitable defences.31 Apportionment Acts in each state and territory and s 323 of the Fair Work Act may grant a right to recover wages in circumstances where the employer could otherwise have pleaded the failure of a condition precedent.32 Statutes might grant the right of an employee to salary in circumstances where the common law would have required the employee to sue for damages.33 Truck Act provisions in the Fair Work Act and in some states prevent an employer applying the principle of abatement or perhaps equitable set-off to deduct amounts from wages for defective work: see 9.47–9.52. Depending on their terms, industrial instruments may modify any of the principles discussed in this chapter, including the principles concerning dependency of obligation, entirety of obligations and what constitutes sufficient performance of obligations.

Independent obligations under statutes and industrial instruments 9.16 Statutes and industrial instruments sometimes create an obligation to pay remuneration independent of the employee’s obligation to serve. The obligation to pay wages may be conditional on the occurrence of another event, such as being ready, willing and able to perform work,34 or

[page 571] merely being in the employ of the employer.35 An independent obligation to pay wages is rare and courts appear understandably reluctant to conclude that an employee should be paid in circumstances where the employee might refuse to perform work.36 As Ryan J has observed: … a statute or award is not to be construed as taking away the employer’s right acknowledged by the common law to withhold payment of wages for periods of non-performance of duty unless the language of the award or other statutory instrument intractably compels such a construction.37

Whether the employee is entitled to be paid under the statute or industrial instrument depends on its terms. Smithers and Evatt JJ stated in Gapes v Commercial Bank of Australia Ltd: The obligation under the award to pay a salary depends upon its terms express or implied. If the terms of the award provide unconditionally for the payment of a yearly salary in stated proportions at stated times during the continuance of the relevant relationship of employer and employee, it is not to the point that at common law obligations to pay salary under a similar class of contract to which no award was relevant might have been regarded by the law as conditional on a particular degree of work performance. Where there is an award applicable to a contract of employment it is necessary to ascertain that the award does provide expressly or impliedly about payment of remuneration.38

The award obligation in Gapes was to pay a salary to each officer calculated by reference to the officer’s years of service. A deduction could [page 572] be made from that salary for each hour that the officer absented himself or herself from duty without the consent of the employer. The court held that the payment of the salary was not conditional on the performance of work. This did not mean that the failure of the employee to perform all of his or her duties had no consequence: see 9.39–9.41.

Readiness and willingness to serve: orthodoxy and heterodoxy 9.17 There is some confusion in the authorities and great debate among the

commentators39 about some fundamental questions concerning the performance of contracts of employment. One of those issues is whether service, and only service, earns wages or whether readiness and willingness by an employee to perform the contract of employment is also sufficient to earn wages. The resolution of that issue affects a series of subsidiary issues, such as whether a wrongfully dismissed or suspended employee can recover wages after the dismissal or suspension if he or she is ready, willing and able to perform the contract. Part of the difficulty arises from the failure in some cases to clearly distinguish between an action to recover wages — a claim for a liquidated sum — and an action for damages for the prevention of performance of service — a claim for an unliquidated amount. The aphorism ‘no work-no pay’ bandied about in this field is ambiguous and the matter is not assisted by parties who seek declarations about the entitlement to ‘pay’ and courts who refer to employees earning ‘pay’.40 The issues discussed below relate to contracts in which the obligation to pay wages is a dependent obligation, not an independent obligation.41

The orthodox view 9.18 The orthodox view, supported in Australia by clear authority, is set out in 9.9–9.10. It is that performance of the service is a condition precedent to the obligation to pay wages.42 Readiness and willingness to [page 573] perform the service is insufficient to earn wages.43 A wrongfully dismissed employee can recover damages caused by the breach of the employer’s obligation to retain the employee for the duration of the contract and cannot recover wages relating to the period after the dismissal.44 Similarly, a wrongfully suspended employee does not earn wages, but may recover damages for the loss of remuneration caused by the employer’s wrongful prevention of the performance of the contract: see 9.62. That loss will usually equal the loss of wages for the period of wrongful suspension, but may be more or less than those wages. On the orthodox view an employee need not

perform work to be entitled to wages; it is sufficient that the employee serve the employer. Service involves either performance of work in accordance with the contract or absence from work in accordance with the contract: see 9.11–9.12. Performance of service in this context does not require exact performance; substantial performance of the contract is sufficient: see 9.36–9.38.

The heterodox view 9.19 The heterodox view45 is that an employee earns wages either by performing service, as described above, or by being ready, willing and able to perform the contract. The much criticised46 decision in Miles v Wakefield Metropolitan District Council is the leading authority for this view, though in the 1980s a series of New South Wales decisions supported this approach.47 It would follow from this view that a [page 574] wrongfully dismissed employee who was ready, willing and able to perform the contract, but prevented by the employer from doing so, can continue to earn wages after the dismissal under the contract. This approach is akin to the notion of constructive service that was applied in some settlement cases prior to 1850.48 9.20 The differences between the two views are illustrated by examining how they would apply to the contract claim in Automatic Fire Sprinklers Pty Ltd v Watson.49 Mr Watson was wrongfully dismissed in September 1944. The dismissal was a serious breach and a repudiation of his contract that was not accepted by the employee. The relationship of employment was terminated by the dismissal, but the contract of employment remained on foot. Mr Watson continued to be ready, willing and able to perform the contract. He continued attending for work for the next 12 months. On the orthodox view, he was not entitled to salary after September 1944 because he did not serve the employer. His readiness, willingness and ability alone were insufficient to earn salary. On the heterodox view, it appears Mr

Watson would continue to earn salary so long as he attended for work and was ready, willing and able to perform the contract. The heterodox view is only tenable if the law adopted the principle that a wrongful dismissal terminates the employment contract as well as the employment relationship. If that were the law, then on the heterodox view an employee would not earn wages after the termination of employment as the contract would be terminated. However, the High Court has repeatedly held that a wrongful dismissal does not in itself terminate the employment contract.50 It is suggested that the heterodox view is untenable as a matter of principle and authority in Australia.

The importance of being ready, willing and able to perform 9.21 The central difference between the orthodox and heterodox views discussed in 9.18–9.20 lies in the significance accorded to the fact that the employee is ready, willing and able to perform the contract. There are proper roles for the notion of readiness, willingness and ability in employment law, but not the role suggested by Miles v Wakefield Metropolitan District Council. First, an employee can sue for damages [page 575] where an employer wrongfully prevents the employee performing the contract and earning wages. The employee must be ready, willing and able to perform the contract to recover such damages. Consequently, when an employer rejects part performance of the contract the employee cannot recover wages as a debt (as the service is not performed) or recover damages for the prevention of performance, as the employee was not ready, willing and able to perform the essential conditions of the contract.51 Second, if a party seeks to enforce the contract by an order for specific performance or an injunction, the party seeking the relief must be ready, willing and able to perform its part of the contract.52 Third, a repudiation of a contract occurs when one party clearly indicates an absence of readiness or willingness to perform his or her contractual obligations.53 Fourth, when the employer repudiates the contract the employee will be taken to have elected

to terminate the contract when he or she is no longer ready, willing and able to perform the contract.54 Fifth, in a more mundane sense an employee who is paid to stand by in case of emergency may earn wages for being ready and willing to perform his or her duties. It is suggested in such cases the employee earns wages because standing by is the service demanded by the employer, and does not earn wages due merely to a readiness and willingness to perform service.55

DURATION OF PERFORMANCE: ENTIRE AND DIVISIBLE CONTRACTS AND OBLIGATIONS 9.22 Where the right to wages is a dependent obligation (as it usually is), then it is necessary to determine the period the employee must serve to earn wages. This period is crucial because of the rule in Cutter v Powell, a case Professor Stoljar aptly describes as a ‘microcosm of all the fundamental difficulties in this contractual area’.56 Cutter v Powell established the common law entire obligation rule: namely, where an employee has agreed to serve for a particular period before becoming entitled to wages (such as a week or a month), he or she must serve for that whole period before an entitlement to wages arises, and there is [page 576] no contractual right to payment if the employee serves for less than the stipulated period: see 9.29–9.31. Cutter v Powell concerned an entire contract. For many centuries contracts of service were usually entire contracts, but from the mid-nineteenth century the dominance of entire contracts in this field has diminished markedly: see 9.23–9.26. Today the overwhelming majority of contracts of employment are divisible. However, the common law entire obligation rule also applies to entire obligation. Most employment contracts are divisible contracts made up of an agglomeration of entire obligations to serve: see 9.28. The harshness of the common law entire obligation rule has been modified by the Apportionment Acts and s 323 of the Fair Work Act considered in 9.32–9.34.

The great case of Cutter v Powell and the fall of entire employment contracts 9.23 Cutter was a mariner engaged in sailing vessels plying the slave trade from England, to Africa and thence to the West Indies, and returning to England. As well as being an experienced mariner, Cutter was also a shipwright, a skill particularly valued in the slave trade to maintain the secure storage areas for the slaves. He was engaged on a small brig called the Prince of Orange that delivered its cargo of 99 slaves to Jamaica in June 1793. The brig was then sold and Cutter was discharged in Jamaica. The defendant, Powell, was the captain of a vessel the Governor Parry, owned by two of the leading English slave traders, John Backhouse and William Rutson.57 The ship departed from Liverpool with 25 hands, collected its cargo in Africa and sailed for Jamaica. In June 1793 an advertisement appeared in the Royal Gazette in Kingston Jamaica that stated ‘For Sale — 229 Choice Young — Eboe Negroes — Imported in the ship Governor Parry’. The slaves had been stored in a space less than 4 foot high for about 40–80 days during which time no adult would have been able to stand. How many men, women and children died on the voyage is unknown. On the journey to Jamaica one of the Governor Parry’s crew was killed by slaves, two were drowned, one was transferred into another slaver, six were impressed into the King’s service (France having declared war on Great Britain in February 1793), seven other men were simply recorded as having died and three were discharged in Jamaica. By July 1793 Cutter was an experienced mariner with valuable skills in search of a vessel and Powell [page 577] was the captain of a ship that had lost 20 of her 25 crew and needed men like Cutter. None of these facts were apparent from the judgment and it appears none of them were led in evidence.58 Instead, what was proved was that there was a promissory note in which Powell promised ‘to pay Mr. T. Cutter the sum of

30 guineas,59 provided he proceeds, continues and does his duty as second mate in [the Governor Parry] from [Kingston, Jamaica] to the port of Liverpool’. Cutter died en route after seven weeks at sea. The usual length of the voyage from Jamaica to Liverpool was eight weeks and the usual wages of a second mate on a voyage from Liverpool to Jamaica and return was £4 per month. It was apparent to the court that Cutter was promised four times the usual rate, though without knowledge of the background facts there was no explanation of why Cutter was able to extract such a rate.60 His widow claimed the sum of 30 guineas.61 The court held that on the terms of the contract the captain’s obligation to pay only arose if Cutter served for the entire voyage. As he did not, he was entitled to nothing under the contract. Two of the four judges referred to the unusually large amount payable in the event of the completion of the voyage. Cutter had contracted, they said, to be paid four times the usual rate if the whole duty was performed, and none if the whole duty was not performed: ‘it was a kind of insurance’.62 9.24 Cutter v Powell involved the application of established principles to specific facts.63 It was not cited much over the 45 years following the decision.64 However, it gained prominence from 1840 through its inclusion in the inaugural publication of Smith’s Leading Cases.65 Over the next 13 editions of that influential work the notes to Cutter v Powell [page 578] covered issues as diverse as conditions precedent, debt, frustration, entire and divisible contracts and anticipatory breach. Those notes were cited in many of the leading employment law cases over the next 150 years.66

The fall of entire employment contracts 9.25 As a broad proposition it is correct to say that prior to the midnineteenth century most engagements for the performance of work by superior and inferior servants were entire. It is also correct to say that in the early twenty-first century virtually no employment contracts are entire. This shift from entire to divisible contracts mirrors the change of employment

contracts from being engagements that, in the absence of contrary evidence, were for fixed terms to contracts that, in the absence of contrary evidence, are indefinite. From the fourteenth to the mid-nineteenth centuries, engagements for a general hiring (that is, without a temporal limitation) were presumed to be of one year’s duration, a presumption that originally had statutory force through the Master and Servant Acts and their predecessors.67 Contracts for general hiring were entire contracts. From the mid-nineteenth century courts were increasingly prepared to rely upon facts to displace the presumption of yearly hiring and by the early to mid-twentieth century the presumption of yearly hiring had been all but formally abandoned. Prior to the mid-nineteenth century most engagements for the performance of work were, in modern parlance, presumed to be fixed term contracts for a period of one year. They were entire contracts and, unless the servant served for the full year, the servant could not recover wages for the incomplete service, except where the master was at fault in terminating the service.68 In the twenty-first century, contracts are [page 579] presumed to be of an indefinite duration. Such contracts are divisible contracts as a contract for an indefinite duration cannot be an entire contract.

Entire and divisible contracts and obligations 9.26 The phrase ‘entire contracts’ is somewhat misleading as it focuses attention on a largely irrelevant issue. The issue of significance in employment law is whether an obligation (particularly an obligation to serve) is an entire obligation or a divisible obligation.69 Modern employment contracts are not entire contracts, except perhaps for a small minority of specified term or specified task contracts. This is because most employment contracts are of indefinite duration and therefore can never be completely performed before the termination of the contract. Some specified term or specified task contracts are entire contracts when the right to payment (usually as a lump sum) only arises at the completion of the whole of the specified term or task.70 Whether a contract is entire or divisible depends on

the intention of the parties, ascertainable in the ordinary manner.71 Courts are reluctant to conclude that long-term employment contracts are entire contracts because of the obvious injustice that can result from such a construction.72 The service the employee must perform to earn wages depends on whether the obligation to serve is an entire or divisible obligation under the contract. When the obligation to serve is an entire obligation, the employee must serve for the period specified in the contract to earn wages. When the obligation is a divisible obligation, the employee earns wages on either a pro rata basis or when a divisible portion of the wages accrues: see 9.27. [page 580]

Entire and divisible obligations 9.27 An entire obligation to serve is one in which the consideration (usually wages) payable to the employee is indivisible, not severable and is not apportioned against a part of the performance by the employee of the service.73 Where a contract makes provision for the payment on the completion of a distinct part of the service then the obligation to pay wages is an entire obligation. Under the common law entire obligation rule, service by the employee for the entire specified period is a condition precedent to the obligation of the employer to pay the wages relating to that period: see 9.29. Hence, where the employee is paid a week’s wages on the completion of a week’s service then service for the entire week is necessary to earn wages, and service for three days will not earn three days’ wages. In contrast, a divisible (or severable) obligation is one in which different parts of the consideration may be apportioned to different parts of the performance. Divisible obligations can either be divisible into discrete portions or infinitely divisible. Most obligations to pay wages under modern awards are divisible into discrete portions of an hour. An example of an infinitely divisible obligation is the obligation under the Fair Work Act to pay accrued annual leave on termination that ‘accrues progressively during a year of service’.74 For each day the employee serves, the amount of the pro rata benefit increases.

9.28 Whether an obligation is entire or divisible depends on the intention of the parties, ascertainable in the ordinary manner.75 Contracts may be entire as to one aspect and divisible as to another, and employment contracts often contain a combination of entire and divisible obligations.76 In ascertaining the parties’ intention regard may be had to the subject matter and purpose of the contract and the surrounding circumstances.77 Where there is an obligation to pay a certain amount per hour, day, week [page 581] or month then the wages will be earned by the employee serving for that specified period.78 In the absence of such a division in the contract, it is suggested that the appropriate approach is that the contract will usually be divisible to reflect the employee’s payment period. As modern awards ordinarily specify an hourly rate for employees, wages will be earned wages for each full hour that is worked, subject to a provision to the contrary.79 Employment contracts of indefinite duration are divisible contracts, usually made up of an agglomeration of entire obligations. As Glanville Williams has explained: [Divisible] contracts made up of an agglomeration of entire parts are those in which separate considerations are specified by the contract, each being appropriated to different portions of the performance, and there being no agreement that complete performance shall be a condition precedent to any recovery on the contract. Here the contract is divisible into several parts, but each part is entire in itself and not capable of further subdivision; thus the rules as to entire contracts do not apply to the contract as a whole but do apply to each part. Common examples of this type of contract, so far as the common law goes, are periodic tenancies and periodic hirings.80

An entire obligation is usually defined by reference to the quantity (or length) of the performance required. The entire obligation in some employment contracts is defined by reference to the quality of the performance; for example, as in Steele v Tardiarni where the pieceworkers were engaged to cut wood to a length of six feet and a diameter of six inches.81 Each piece cut to these measurements earned wages; each piece that did not meet the specifications did not. It is conceivable that in a nonpiecework contract the parties might agree that any payment to the employee is conditional on the performance of work to an exacting specification.

Courts have a strong tendency to interpret performance [page 582] obligations to avoid the conclusion that an employee will earn no wages if he or she performs slightly defective work.82

The common law entire obligation rule 9.29 The common law entire obligation rule83 is that when a contract contains an entire obligation to serve for a specified period (such as a week or a month) as a condition precedent to the earning of wages, then an employee does not earn wages if he or she fails to serve for the specified period, subject to some exceptions discussed below.84 The common law rule is ‘all or nothing’.85 The rule has the obvious capacity to visit injustice on employees. For example, in Lilley v Elwin the servant was engaged under a contract that required that he serve for 12 months before he was entitled to wages. He served for the first 10 months and then was justifiably dismissed for refusing to work until he was given full strength beer. He was not entitled to any wages for the 10 months that he served the employer.86 The rule applies to entire contracts as well as entire obligations. Another way of expressing the rule is that there is a total failure of consideration when an employee partly fails to perform an entire obligation. Consideration in this context means the performance of the promise rather than the promise itself.87 No action can be brought in restitution where an existing effective contract governs the relations between the parties about the matter that is the subject of the claim. An ineffective contract includes one [page 583] that is inherently ineffective (such as a contract void for uncertainty, or unenforceable at common law or by statute) or an initially effective contract that becomes ineffective due to subsequent events (such as a contract

terminated for breach, terminated by operation of law or rescinded due to the presence of a vitiating factor such as fraud or mistake). An employee who continues to serve the employer under an effective contract, but who has not served the entire period and earned wages, cannot make a restitutionary claim for reasonable remuneration.88 Once remuneration is earned, the subsequent termination will not affect the right of the employee to recover the earned wages.89

Qualifications to the common law entire obligation rule 9.30 The common law entire obligations rule is subject to at least two statutory qualifications (discussed in 9.32–9.34) and three common law qualifications. The first common law qualification is that where the failure to fully perform relates to the quantity or duration of the employee’s performance then an employee is entitled to be paid the wage if he or she has substantially performed the obligation, even though he or she fails to exactly perform the obligation: see 9.36–9.38. Second, where the failure to fully perform relates to the quality or mode of the employee’s performance then an employee’s entitlement to be paid the wage depends on whether the term governing the quality and mode of performance was a warranty, a condition or an intermediate term.90 The employee is entitled to be paid the wage if the term is a warranty or an intermediate term. The employee is not entitled to be paid the wage if the term is a condition unless the employer has accepted the substantial benefit of the employee’s partial performance. Third, in either of the above cases, the employee is entitled to be paid the wage if the employer has accepted part performance of the contract: see 9.42–9.46. [page 584] 9.31 It was once thought that the common law entire obligation rule was limited in employment law to cases in which the employee was justifiably dismissed from the service of the employer, or was merely an application of a now abandoned view of the rule concerning forfeiture of wages.91 However, the rule is not only applied in those situations. The common law entire

obligation rule has also been applied when the employment ended due to the death of the employee; where the employer’s property was destroyed, making complete performance impossible; where a director ceased to hold that position due to the sale of debentures; where the employee ceased working full time after serving for 16 months of a two-year contract without receiving any remuneration; and where the employee resigns for personal reasons.92 The common law entire obligation rule is applied in a modified manner when the employee is wrongfully dismissed.93 Once the right to a payment under a divisible contract has accrued it is enforceable as a debt and that right cannot be lost as the result of later events.94

The Apportionment Acts and entire obligations 9.32 To ameliorate the injustice of the common law entire obligation rule the parliaments in each state and territory in Australia have enacted almost identical provisions based on the Apportionment Act 1870 (UK).95 The principal effect of these provisions is to ensure that the salary (and possibly the wages) of employees engaged under divisible contracts accrues each day, notwithstanding any contractual provisions that state [page 585] that the salary accrues weekly, monthly or over a longer period.96 That is, the common law entire obligation rule has been largely reversed in Australia for most employees. This simple statement glosses over a number of difficult issues, which are discussed below. Section 323 of the Fair Work Act also imposes obligations to pay at least monthly ‘amounts payable’ to national system employees. This provision governs the frequency of payment. It does not appear to alter the creation of the right to payment. It is not clear how s 323 is intended to operate with the Apportionment Acts. It is for good reason that the Apportionment Acts were once described as ‘one of the worst drawn, if not perhaps the worst drawn, in the statute book’.97 Although the Acts clearly apply to ‘annuities’, ‘salary’ and ‘other periodic payments in the nature of income’,98 it is not clear if they apply to

employees who are paid wages as opposed to a salary. Given the remedial purpose of the Acts, the fact that salary is a word ‘susceptible of very wide meaning’ and that wages would appear to be a ‘periodic payment in the nature of income’, it is suggested that the Acts apply to employees paid wages, despite some dicta to the contrary.99 Section 2 of the Apportionment Act (UK) (and similar provisions in Australian jurisdictions) provides that salaries ‘shall be considered as’ accruing from day to day and shall be apportionable in respect of time accordingly.100 That is, salary accrues on a daily basis. [page 586]

Operation of section 3 of the Apportionment Act 9.33 Section 3 of the Apportionment Act (UK) (and similar provisions in Australian jurisdictions) further provides that the apportioned part of any such remuneration shall be payable: (a) in the case of a continuing [salary], when the entire portion of which the apportioned part forms part becomes due and payable and not before [‘the first limb’], and (b) in the case of salary or such other payment being determined by death or otherwise, when the next entire portion of salary would have been payable if the salary had not been so determined, and not before [‘the second limb’].

These are indubitably difficult provisions. Section 2 deals with the accrual of the salary and s 3 sets out the circumstances in which the accrued salary is payable. The provisions are best illustrated by examining two examples. Under the common law entire obligation rule discussed in 9.29, both employees in the examples below would fail to recover any salary: Example 1: An employee is engaged to perform an entire obligation of one month’s service before being entitled to salary, but dies after three weeks’ service. The issue is whether the employee is entitled to recover three weeks’ salary. Example 2: An employee is engaged to perform an entire obligation of one month’s service before being entitled to salary, but refuses to perform work for the whole of the first three weeks. The issue is whether under s 3 of the Apportionment Act the employee is entitled to recover one month’s salary, one week’s salary or nothing.

In example 1 there is no doubt that under s 2 the employee has accrued three weeks’ salary, as salary is accrued from day to day. As to whether the

employee is entitled to be paid that accrued sum, it is uncertain whether the employee will succeed if he or she relies only on the first limb of s 3. That limb grants the right to recover ‘when the entire portion of which the apportioned part forms part becomes due and payable’. There is some authority, albeit somewhat weak, that the three weeks’ salary is not payable because the one month’s salary is never due and payable.101 The argument runs: the ‘entire portion’ is one month; [page 587] the employee never serves the whole month; the entire portion therefore never ‘becomes due and payable’. Consequently, there is never any salary earned to apportion. For the same reasons, it is uncertain whether the employee in example 2 will recover any portion of the salary if he or she relies only on the first limb of s 3. Under the second limb of s 3 the employee in example 1 will recover payment for three weeks’ salary. The salary of the employee has been ‘determined by death or otherwise’. The employee is entitled to proportionate payment, notwithstanding that the employee did not perform the entire obligation by serving for a month.102 The Apportionment Act thereby operates to reverse the common law rule so far as that rule applies to an entire obligation in a divisible contract.103 This approach has considerable academic support.104 In example 2, there is more doubt about the operation of the second limb. It is arguable that the employee’s salary was not ‘determined’. There is no authority directly on point.105 9.34 There are five other points to note about the operation of the Apportionment Acts. First, those Acts only apply to salaries and ‘periodical payments’. There are no periodical payments under an entire employment contract, such as the contract in Cutter v Powell.106 There is simply one lump sum payment at the conclusion of the contract. On a related point, there is considered dicta to support the view that ‘the essence of a periodical payment … is that the amount of it does not vary and it is payable at regular intervals’.107 Where the quantum of remuneration (such as a bonus) is variable, then it would not be apportionable under the Acts. The Acts have

been applied to the apportionment of annual leave entitlements.108 [page 588] Second, there is some doubt about whether a validly dismissed employee can rely on the Apportionment Acts. Lush and McCardie JJ were divided on the issue in Moriarty v Regent’s Garage and Engineering Limited.109 Their observations were dicta. The leading commentators, and some carefully considered dicta, support the view that the Apportionment Acts can form the basis of recovery by a validly dismissed employee.110 The cases that appear to support the contrary view were all private sector cases decided prior to the Apportionment Acts being amended to apply to private sector employment, or cases in which the issue of the application of the Apportionment Acts did not arise.111 Third, the parties can agree that apportionment will not take place. Fourth, the action by the employee cannot be commenced until after the expiration of the entire portion of the contract.112 Fifth, one issue not resolved in the authorities is the relationship between the Apportionment Acts enacted by the states and territories, s 323 of the Fair Work Act and federal industrial instruments. Depending on the terms of the industrial instruments governing the payment of wages, it may be that they are inconsistent with and, by the operation of s 109 of the Constitution, preclude a claim by an employee based on an Apportionment Act provision.

EXACT, SUBSTANTIAL, PARTIAL AND DEFECTIVE PERFORMANCE 9.35 Broadly speaking, the issue of who must perform their obligations first was discussed in 9.9–9.21. How long the employee must serve to earn wages was covered in 9.22–9.34. The next set of issues, considered in 9.36–9.52, deals with whether the employee has performed his or her obligations to the required standard and the effect of failing to render exact performance of those obligations. [page 589]

Exact performance and the doctrine of substantial performance Exact performance 9.36 Employers and employees must exactly perform their obligations under the contract in accordance with the standard of duty applicable to the obligations. The failure to exactly perform any of the terms of the contract is a breach, even where it is only a breach of a warranty.113 The plaintiff can only recover nominal damages where the breach does not cause damage.114 The requirement of exact performance is subject to the maxim de minimis non curat lex: the law does not concern itself with trifles. An obligation will be exactly performed even when one of the parties departs in a minute or insignificant manner from the terms of the contract, as where an employee who is required to serve between 9 am and 5 pm commences work at 9.01 am.115 Some obligations do not call for precise performance. In Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd the obligation on the advertiser to display advertisements for ‘eight hours per day’ would have been satisfied if the advertisements were displayed for ‘substantially eight hours’.116 In employment, it is rare for the parties to exactly perform all of their obligations. Some of the obligations of both parties are, by their nature, difficult to exactly perform, such as the duty of care.

Substantial performance of entire obligations 9.37 When the obligation to serve is an entire obligation (as it often is), the employee must substantially perform the obligation to be entitled to wages.117 Exact performance is not necessary. Substantial performance is not the same as exact performance. Whether an employee has substantially performed an obligation is a question of fact. The employee’s right to wages for rendering substantial performance is subject to at least four qualifications.

[page 590] First, if the failure to perform of a national system employee has arisen from industrial action then ss 470–474 of the Fair Work Act modify the right to be paid wages: see 9.39–9.41. Second, wages are not earned if the employee has offered part performance of the contract and the employer rejects that part performance: see 9.42–9.46. Third, an equitable set-off may reduce the wages payable to the employee: see 9.51–9.52. Fourth, a failure to render exact performance is a breach for which the employee is liable in damages, even though the service may earn the wages.118 9.38 It is possible for a contract to contain an express term that will deny the right to any wages if certain obligations are not exactly performed. The courts lean against a construction of the contract which would deprive the employee of any payment simply because there are some defects or omissions. This tendency is particularly evident in dealing with continuous obligations unrelated to the duration of the service.119 For example, in Stavers v Curling the captain agreed that he would obey instructions and be frugal with provisions. The ship-owners alleged that he failed in part of those duties (it was said he was disobedient and not frugal) and argued the condition precedent to the payment of the remuneration was not fulfilled. The court observed that if this were true then any minor non-performance would prevent recovery on the contract: The parties to such a contract, may undoubtedly, if they think proper, agree that the captain’s right to recover any remuneration for his services shall be conditional only, and shall depend on his strict performance of the covenants he enters into; and if words are used in the contract so precise, express, and strong, that such intention, and such intention only, is compatible with the terms employed, however inconsistent it may be with general principles of reasoning, a court can only give effect to such declared intention of the parties.120

[page 591]

Remuneration and industrial action under the Fair Work Act 9.39 Division 9 of Pt 3-3 of the Fair Work Act establishes a scheme governing payments to national system employees who engage in industrial action. The scheme deals separately with payments during protected and unprotected industrial action. Industrial action is defined in s 19. Action that is authorised or agreed to by the employer is not industrial action.121 Industrial action is protected if it is authorised, organised and conducted in accordance with the scheme in Div 1 of Pt 3-3. Unions and employees often take such action when seeking an enterprise agreement. Section 470(1) provides that if an employee has engaged in protected industrial action on a day, the employer shall not make a payment to an employee ‘in relation to the total duration of the industrial action on that day’. A union or an employee must not ask the employer to make such a payment and the employee must not receive such a payment: s 473. There are specific provisions dealing with partial work bans and ascertaining the duration of the industrial action when an overtime ban is imposed: s 470(2)–(5). When an employee engages in a partial work ban that is protected industrial action, the employer may send the employee a notice stating that the wage of the employee under the industrial instrument or contract will be reduced by a certain amount. The amount of the reduction is an estimation of the proportion of time the employee would usually spend performing the banned work: Fair Work Regulations 2009 (Cth) reg 3.21. Fair Work Australia (FWA) may adjust this estimation, taking into account the reasonableness of the proportion stated and fairness between the parties: s 472. The scheme established by ss 470–472 is somewhat akin to an equitable set-off: see 9.52. 9.40 Section 474 applies if the industrial action is unprotected. It prohibits certain payments to employees who engage in such action. If the total duration of the industrial action on a day is at least 4 hours, then the prohibition extends to making a payment ‘in relation to the total duration of the industrial action on that day’. If the duration of the industrial action on a day is less than 4 hours, then the prohibition extends to making a payment for

‘4 hours of that day’. The effect of the provisions on an employee employed for 8 hours is that if the employee takes industrial action for an hour and works the remaining 7 hours, [page 592] no payment is made for 4 hours of the day; but if the employee takes industrial action for 5 hours no payment is made for those 5 hours.122 It has been said that the provisions are not punitive and their purpose is to ensure the employee bears the economic loss for the action.123 By way of comment, this characterisation is questionable. There is no direct connection between the wages ‘docked’, the economic effect of the industrial action and the loss of the employer and it is suggested that if there was a term in a contract to the same effect as s 474(1)(a) it would probably be unenforceable as a penalty provision. 9.41 Under many modern awards the rate of pay creates an entire obligation that is satisfied with each hour of employment. Though it does not appear to have been considered in the authorities, it is difficult to see how s 474 would apply effectively for employees who earn wages by performing an entire obligation of a weekly, monthly or annual duration. Using Cutter v Powell discussed in 9.23 as an example, Mr Cutter earned his whole wages by serving for the entire journey of 8 weeks. The wages were indivisible into portions of a certain amount per week or hour. If on one day he engaged in 4 hours of industrial action over the course of his employment then under s 474 he must not receive ‘payment in relation to … 4 hours on that day’. Mr Cutter, on one view, did not get any payment in relation to 4 hours. It would be incorrect to proceed on the basis that 4 hours’ work is merely a proportion of the 8 weeks’ entire service: the very nature of an entire obligation is that the consideration payable to the employee is indivisible, not severable, and is not apportioned against a part of the performance by the employee. Even if it were able to be apportioned, it is not clear what divisor should be used, given the fact that an employee often has obligations of fidelity that apply 24 hours a day, 365 days a year and do not only apply while the employee is on the employer’s premises.124

[page 593]

The rejection and acceptance of part performance: ‘no work-no pay’ 9.42 Much of the heated debate about the operation of the ‘no work-no pay principle’ has been superseded in Australia by ss 470–474 of the Fair Work Act discussed in 9.39–9.41. The common law principles discussed in 9.43–9.46 will still be relevant in cases where the part performance does not arise from industrial action or the employment is not covered by the Fair Work Act.

Exercising the right to reject part performance 9.43 An employer is entitled to decline the services of an employee who refuses to perform the essential terms of the contract for so long as that refusal persists.125 A contract, statute or industrial instrument may abolish, or modify, the ordinary contractual right of an employer to reject partial performance if the language of the contract, statute or industrial instrument clearly compels such a conclusion.126 Where the right to wages is an independent obligation then, by definition, the earning of wages does not depend on the performance of the service: see 9.13–9.16. In such cases part performance does not affect the employee’s right to wages.127 Whether there has been a rejection or an acceptance of the offered part performance is a question of fact. The resolution of this factual issue is sometimes muddied by the contrived circumstances that form the setting of most cases in this field. Where an employer seeks to reject part performance it is important for it to clearly indicate that the further performance of any work will not be accepted. Such an indication is not easily drawn from ambiguous language, prevaricating conduct or circumstances in which the employer is knowingly receiving and [page 594]

accepting the benefit of part performance by the employee.128 One means of clearly indicating that the offer of part performance is rejected is to direct the employee not to attend the premises or perform any work unless the employee will undertake all of the required duties. Rejection of part performance has been inferred in some cases where an unambiguous direction is disobeyed and the employee remains on site.129

Consequences of the rejection of part performance 9.44 A rejection of part performance has two effects. First, the employee does not earn wages arising from the rejected part of the performance. In such a case there is no withholding of wages or deductions from pay. Nor is the rejection the exercise of any right to set-off, or a counterclaim, or the suspension of a contract. The position is simply that the employee has not earned the wages: The right of the employer is not a right to deduct or a right of set-off. It is the right to deny payment on non-fulfillment by the other party of the obligation which makes the weekly or fortnightly salary payable.130

Second, there is the question of damages. An employee whose part performance has been validly rejected often seeks damages for the wrongful prevention of the performance by the employee. The argument of the employee is that he or she would have earned wages if the service had not been rejected. The flaw in this argument is that to recover damages for breach the employee must be ready, willing and able to perform the contract, unless there has been a dispensation from the performance of [page 595] those terms. An employee who refuses to perform an essential term of the contract manifests an absence of readiness, willingness and ability in the relevant sense.131

Consequences of the acceptance of part performance 9.45 An employer who accepts part performance may, notwithstanding that

acceptance, sue for damages caused by any breach of the contract by the employee.132 The measure of the damages is the sum that will put the employer in the same position as it would have been in if the contract had been fully performed and is not measured by reference to the gains made by the employee: see 14.7 and 14.13. The employer’s loss will rarely be equal to the wages paid to the employee for the period of defective performance where the employee has performed most of his or her duties.133 The orthodox view is that an employee earns wages when an employer accepts part performance of the contract and the employee substantially performs the contract. In Welbourn v Australian Postal Commission the employees imposed a ban on the performance of some work. The employer directed the employees to perform the work and when the employees failed to do so, the employer told the employees that they were to receive no pay until they performed the work as directed. The employees were not suspended; they were told that they were not stood down and could not go home. The employer and employee expected that the employees would perform all of the non-banned duties. The employer received the benefit of the work on the non-banned duties. The employees sued for their wages. Fullagar J stated: I consider that no wages can be withheld if, in the pay period concerned, the employee has performed most of his duties in the knowledge that

[page 596] he would not be stopped from performing them and in the knowledge also that the employer intended to take the benefit of the work to be actually done, and if the employer has in fact taken the benefit of the work actually done. In those circumstances, subject to any possible right to damages, the employer is in my opinion bound to pay the whole of the wages provided for under the contract.134

9.46 The unorthodox view on this issue, advanced by two Law Lords in dicta in Miles v Wakefield, is that the employee who performs less than the full range of his or her duties is not entitled to wages, even if the employer has accepted part performance of the contract. Such an employee, it was said, can recover on a quantum meruit. This approach is contrary to principle and would, in practice, lead to extraordinary results.135 Take, for example, a weekly employee who arrives for work 30 minutes late one morning. There has been part performance of her obligation. The employer decides to allow

the employee to work that day and the employee makes up the time by working late. The employer has accepted part performance. At the end of the week, according to Lords Brightman and Templeman, the employee earns no wages at all for any part of the week, but may sue the employer for so much remuneration as represents the value of the work done. It is sometimes said that an employer who accepts part performance has waived a right.136 The High Court has indicated that waiver does not operate as an independent doctrine in this manner.137 It may be more apposite to speak of the employer’s election to reject part performance. Alternatively, the right to wages arising from accepted part performance may rest on an estoppel arising from the conduct of the employer. These issues await further exploration in the cases.

Deductions, Truck Act provisions, forfeiture, abatement and set-off Deduction and Truck Act provisions 9.47 Under s 323 of the Fair Work Act a national system employer must pay ‘amounts payable to the employee in relation to the performance of [page 597] work in full (except as provided by section 324)’. Section 324 permits a very limited range of deductions to be made. In addition to regulating the payment of wages, ss 323–325 of the Fair Work Act regulate the approximately 12% of Australian workers, and about 33% of managerial employees, who receive non-cash benefits as part of their remuneration. There are also provisions in some states, derived from the Truck Act, that provide that certain wages must be paid in money without unauthorised deductions.138 Their history can be charted from 1465.139 9.48 Historically, the Truck Act dealt with three evils. First, the compulsion to accept payment in goods rather than the coin of the realm. The requirement

in s 323 to pay the employee in full ‘in money’ addresses that concern. Second, the requirement that the employee spend part of the wage on the company’s over-valued products. Section 325 provides that an employer may not directly or indirectly require an employee to spend any part of the amount payable in a particular way if the requirement is unreasonable in the circumstances. Third, Truck Act provisions commonly limited the deductions that could be made from the employee’s wages. Section 324 permits deductions to be made from amounts payable to an employee in a limited range of circumstances. A deduction may be authorised in writing by the employee where the deduction is principally for the employee’s benefit. The authorisation must specify the amount of the deduction and it may be withdrawn at any time by the employee: s 324(1). Deductions are also permitted if authorised by the employee in accordance with an enterprise agreement; or are authorised by or under a modern award, an order of FWA, a law of the Commonwealth, a state or a territory, or an order of a court.

Forfeiture 9.49 Remuneration that has accrued and is payable to the employee remains payable notwithstanding the termination of the contract, unless that remuneration is forfeited under a statutory scheme or pursuant [page 598] to express contractual right.140 There are a series of cases from the nineteenth century in which employees dismissed for misconduct were held not to be entitled to wages in relation to the period served prior to the dismissal.141 Those cases are best understood as applications of the entire contract rule discussed in 9.29 and not as establishing a principle that employees who commit an act of serious misconduct forfeit accrued entitlements.142

Abatement 9.50 Abatement is a common law defence. It arises where there is some

breach by the contract performer. Although the contract is substantially performed, due to negligence or some other breach the work performed is of poor quality, inadequate or otherwise defective. The defence of abatement permits a reduction in amounts payable. It is not a set-off. There is no counterclaim; it is simply a right to reduce the contract price to take account of the breaches.143 There are four points to note about the application of the defence in employment law. First, it is doubtful whether the defence applies in employment. There does not appear to have been a reported case in which the wages of an employee have been abated due to defective performance. There is some dicta to suggest that the defence of abatement does apply in employment;144 however, there are cases that strongly suggest that it [page 599] does not.145 Second, if the defence does apply to employment contracts, it may not be applicable where the employee provides a service rather than produces a corporeal result: ‘abatement is not available as a defence to a claim for payment in respect of professional services’.146 Third, the defence does not apply where the defective performance of work consists of tardy performance.147 Nor will it apply where there is no damage arising from the breach. Fourth, it is suggested that the obligation imposed by s 323 of the Fair Work Act to pay for work ‘in full’, and the limited range of deductions permitted by s 324, are inconsistent with a right to abate for defective performance.

Statutory and equitable set-offs 9.51 There are two types of set-off: statutory and equitable. Statutory (or legal) set-off is irrelevant in determining if wages are owed to an employee. It is a statutory form of action, a subspecies of counterclaim. It is limited to the situation where the employer and employee both owe liquidated debts. An employer cannot reduce the wages of an employee by relying on a legal setoff. When an employee has rendered defective performance of a contract, he or she will not owe the employer a liquidated debt; the defective performance

will give rise to a claim for unliquidated damages.148 Some of the older employment law cases refer to a set-off against wages arising from the employee’s breach. This notion of set-off arose from a specific — now repealed — statutory power to set-off that applied [page 600] in cases concerning masters and servants.149 Truck Act provisions, like s 323 of the Fair Work Act, that require the full amount be paid are inconsistent with a legal set-off that reduces the wages to account for defective performance.150 9.52 Equitable set-off is not so limited.151 Equitable set-off does not have a statutory foundation. It may apply when the employer’s claim is for unliquidated damages for defective performance. Claims by the employee for wages and claims by the employer for damages ‘may be set-off against each other where the equity of the case requires that it should be so’.152 For an equitable set-off to arise there needs to be a close connection between the cross-claims of the parties. This requirement will usually be satisfied when the dispute is about whether the defective performance has altered the entitlement of the employee to wages. The conduct of the respective parties will be relevant to the granting of such equitable relief.153 One relevant consideration will be the extent to which the employer gained benefit from the performance. There is some authority to support the view that the amount of the reduction must relate to the loss of the employer. As a consequence the deduction made on account of an equitable set-off is not proportionate to the amount of time the employee did not perform work.154 In the mid-1980s a series of decisions in the United Kingdom raised the prospect that an equitable set-off could be utilised by an employer to reduce the wages payable to employees engaged in industrial action. The employees concerned were not entitled to the benefits of the Truck Act 1896 (UK).155 In Australia, national system employees are entitled [page 601]

to the benefit of ss 323 and 324 of the Fair Work Act discussed in 9.47–9.48. That scheme may be inconsistent with an employer raising an equitable setoff as it requires the employer to pay amounts payable ‘in full’ and limits the circumstances in which a deduction may be made. It would be appear incongruous if the employer were permitted to make a deduction from the wages on a different ground. Permitting an equitable set-off would allow the employer to determine what it saw fit as the appropriate amount of deduction — an approach that undermines the foundation of the statutory minimum wage systems and opens the door to abuse. United Kingdom authorities on the operation of similar Truck Act provisions also tend to support the view that it is not permissible for an employer to reduce the wages on account of defective performance relying on an equitable set-off.156 There is another problem with the application of equitable set-off to wages payable pursuant to the Fair Work Act. Section 539 confers on unions and inspectors the right to seek pecuniary penalties and an order that the employer compensate the employee for the loss suffered because of noncompliance with certain industrial instruments regulating wages. The conduct of the employee that might form the basis of an equitable set-off may not prevent unions and inspectors recovering the wages.157

WHO MUST PERFORM AND TIME FOR PERFORMANCE Personal performance of the contract 9.53 The obligations imposed by an employment contract must be personally performed unless there is a right to render vicarious performance or to assign the obligations. Vicarious performance (sometimes called delegated performance or subcontracting) is the performance by a third party of an obligation under the contract, as where an employer’s obligation to pay wages is performed by a related corporation. Satisfactory performance of the obligation by a subcontractor will be sufficient when a contract permits vicarious performance.158 Resolving the question of whether an obligation may be vicariously performed raises very similar issues to those raised in determining if a right or obligation may be assigned.159

[page 602] Whether vicarious performance of an obligation is permitted by the contract is a question of construction in each case.160 Sometimes construing the contract is characterised as a search to ascertain if the ‘nature’ or ‘essence’ of the contract requires personal performance.161 There may be some obligations that can be vicariously performed even if others cannot.162 It is not a matter of all obligations being delegable or none at all. Ultimately, the question is ‘whether the obligation is such that the identity of the person who performs it is a matter of indifference to the contracting party for whose benefit the obligation is imposed’.163 An employee is likely to be indifferent who pays his or her wages, so long as they are paid, and consequently employers are usually able to delegate the performance of that obligation to a third party.164 The employer cannot assign the liability to pay wages to a third party without the employee’s consent. The payment of wages by a third party does not relieve the employer of the liability to pay the wages; it is simply a method by which that liability is satisfied.165 An employer is unlikely to be indifferent to whether the employee personally attends for work, and consequently employees are almost never able to delegate the performance of that obligation to a third party. 9.54 Where the contractual obligation requires the exercise of personal skill or the holding of a particular qualification then it will be a personal obligation that cannot be performed vicariously.166 The issue is not [page 603] whether the subcontractor could render equal or better performance.167 Almost all employment contracts require the exercise of some personal skill by the employee and the employee’s obligation to serve is usually not delegable for that reason. For example, a skilled machinist would breach the contract if she arranged, without the employer’s consent, for her sister to operate the machine while the employee was absent. Where the performance of the obligation requires that one party has confidence in the other then the obligation cannot be performed vicariously.168 Most employment contracts

are based on mutual confidence between employer and employee and the performance of the employee’s service is usually not delegable for that reason. The employee’s confidence in the employer is also essential in the performance of a range of the employer’s obligations. An employee reposes confidence in a corporate employer, even one without substantial assets or reputation.169 A party can elect not to insist on the personal performance of an obligation. Hence, an employer may consent to a person other than the employee performing all or part of the service. Even if consent is not obtained before the performance, the employer may ratify the performance by a third party.170 In some cases an express contractual term may permit such vicarious performance. A court would ordinarily be loath to interpret an ambiguous term to have such an effect, and it is almost inconceivable for such a term to be implied in fact in an employment contract. [page 604]

The time for performance 9.55 The parties must perform their obligations at the time stipulated in the contract and a failure to perform at that time is a breach of the contract, even if time is not of the essence in the performance of that obligation.171 There will often be a commencement time for the work expressly agreed by the parties. It will also usually be clear when the employer has to pay the remuneration. Wages and other remuneration payable to national system employees in relation to the performance of work must be paid at least monthly: Fair Work Act s 323. A party must perform an obligation within a reasonable time where the contract does not expressly state the time for the performance.172 What is a reasonable time for the performance of the obligation is a question of fact and will depend on the terms of the contract and the surrounding circumstances.173 It is usually not reasonable for an employer suffering cash flow problems to defer payment of wages until the funds are more readily available, as circumstances within the control of the performing party are

usually not relevant in determining what period of time is reasonable.174

Consequences of the late payment of wages 9.56 The time for the payment of wages is usually stipulated in industrial instruments. Often employers are required to pay penalty or overtime rates to employees who are not paid on time and a failure to pay amounts payable at least monthly exposes the employer to a pecuniary penalty.175 The position in contract is less clear. The failure to pay on time will be a breach of the contract entitling the employee to recover the wages owed as a debt as well as any additional provable damage suffered as the result of the late payment. When time is of the essence in the contract the employee may terminate for late payment. Whether time is of the essence will depend on any express terms dealing with the [page 605] matter, the nature of the obligation and the surrounding circumstances. Where the employee is poorly paid the late payment could be devastating for the employee and his or her family: ‘the master’s profits are ascertained as an ordinary rule de anno in annum but the workman has to live de die in diem’.176 Time is less likely to be of the essence when there is a late payment of an annual bonus to a highly paid employee. Where time is not of the essence, a failure to pay may be evidence of a repudiation of an employer’s obligations giving rise to a right of the employee to terminate. The ordinary tests referred to in 10.38 are applied to determine if the delay amounts to a repudiation. A unilateral reduction in entitlements, coupled with a deliberate refusal to pay, will almost always be a repudiation or serious breach: see 6.17 and 10.48. However, a conclusion that the employer has repudiated the contract is less likely to be drawn when the failure to pay is due to some temporary fault in the employer’s machinery, or mistake, or illness or the like.177

SUSPENSION OF PERFORMANCE AND

STANDING DOWN EMPLOYEES Suspension: the general principle 9.57 A suspension is that state of affairs which exists while there is a contract in force between the parties but the parties are relieved from performing at least their principal obligations. When the contract is suspended, ordinarily an employee is not obliged to serve and an employer is not obliged to pay wages or provide the opportunity to earn wages.178 Attempts to suspend the performance of obligations arise in a series of different contexts in employment law including the suspension of an employee pending an investigation into allegations of misconduct; suspension as a form of penalty for misconduct; suspension during a lockout of employees; and suspension as a result of a downturn in production.179 The right to suspend payments during a period of illness is considered in 12.16. [page 606] 9.58 A party has no right to suspend performance of contractual obligations in the absence of an express contractual or statutory right to do so.180 Where the employee has committed a serious breach or repudiated the contract the employer has no right to suspend an employee. The employer may instead sue for damages, and may also elect between terminating or affirming the contract. If the employer elects to affirm, it must permit the employee to provide service in accordance with the contract. There is no ‘halfway house’ of punishment between termination and affirmation, other than suing the employee for breach.181 This principle is illustrated by Hanley v Pease & Partners Ltd. In that case the employee overslept and failed to attend for work on a Sunday. On Monday he arrived for work and was told that he was suspended for one day. He claimed his suspension was not valid and sued for damages for an amount equal to the wages he would have earned on the Monday. Lush J stated: Assuming that there has been a breach on the part of the servant entitling the master to dismiss him, he may if he pleases terminate the contract, but he is not bound to do it, and if he chooses

not to exercise that right but to treat the contract as a continuing contract notwithstanding the misconduct or breach of duty of the servant, then the contract is for all purposes a continuing contract subject to the master’s right in that case to claim damages against the servant for his breach of contract. But in the present case after declining to dismiss the workman — after electing to treat the contract as a continuing one — the employers took upon themselves to suspend him for one day; in other words to deprive the workman of his wages for one day, thereby assessing their own damages for the servant’s misconduct at the sum which would be represented by one day’s wages. They have no possible right to do that. Having elected to treat the contract as continuing it was continuing. They might have had a right to claim damages against the servant, but they could not justify their act in suspending the workman for the one day and refusing to let him work and earn wages.182

[page 607] 9.59 A contract may include an express term permitting suspension of the contract. Such clauses tend to be interpreted strictly and may be subject to an implied limitation that the discretionary power to suspend will be exercised reasonably.183 It is conceivable, but very unlikely, that a term granting a right to suspend may be implied in fact in a contract.184 In the late 1960s Lord Denning flirted briefly with the notion that during a strike the employment contract was suspended. The difficulties with this view are too numerous to catalogue here, though eight of the unanswered questions are collected in para 943 of the Donovan Commission Report.185 Suspension can be distinguished from three other similar situations. First, a suspension is different from a direction that the employee not perform his or her ordinary work, such as when an employee is put on garden leave. Obeying a direction to remain away from work is the performance of the contract as the employee is ‘carrying out the duties of his office, his fundamental duty being to obey the [employer’s] instructions’.186 An employee obeying such an instruction will earn wages. Where an employee has the right to perform work then such a direction will be a breach of contract that can sound in damages and, in appropriate cases, be restrained by an injunction.187 Second, a suspension [page 608]

is different to the termination of the contract. During a suspension the contract remains extant.188 Third, a suspension can be distinguished from the consequences of the employer’s rejection of part performance by the employee. The principle in Hanley v Pease applies to past imperfect performance of the contract; it deals with what the employer can do when the employee has committed a breach of contract. The principle says nothing of what an employer can do when an employee is committing a continuing breach. An employer has a right to reject an offer of non-performance or partial performance of a continuing obligation: see 9.42–9.43. When that right to reject is exercised the employee does not serve the employer and without service the employee does not ordinarily earn wages. Consequently, when the employer rejects an offer of part performance of service then it is not suspending the wages as no wages are earned.189 A code governing suspension from employment may, depending on its terms, preclude an employer rejecting part performance.190

The Crown’s right to suspend and statutory powers of suspension 9.60 Suspension in the public service and from offices held under the Crown raises a series of issues: the existence of the Crown’s right to suspend; the modification of that right by statute or contract; the existence of statutory powers to suspend; the right to procedural fairness before suspension; and the right to remuneration while suspended. The right to stand down employees under the Fair Work Act is considered in 9.63. The Crown has a right to suspend its servants from office.191 The office is not vacated when an employee or officer is suspended pursuant [page 609] to an exercise of this right.192 Suspension does not necessarily deprive the suspended officer of the right to salary.193 Like the Crown’s right to dismiss an employee at pleasure, the right of the Crown to suspend an employee or

officer may be surrendered by agreement or abrogated by statute.194 The existence of a statutory scheme dealing with suspension is often construed as ‘restricting the common law right of the Crown to exercise a similar power by other means and in other circumstances’.195 If it were otherwise the statutory protections afforded to the employee would be ‘rendered superfluous, useless and delusive’.196 The reservation of a prerogative power to dismiss does not carry with it the reservation of the prerogative power to suspend.197 9.61 Public sector statutes often give the employer the right to suspend an employee from office.198 There is some controversy about the scope of a power to suspend conferred by the Acts Interpretation Act in each jurisdiction.199 Whether an employee is entitled to be afforded procedural fairness before being suspended depends on the terms of the Act. Under some statutes the obligation is express. The implication of a right to procedural fairness prior to suspension raises similar issues to the implication of such a right prior to dismissal and the test discussed in 11.34 is applied. The potential deleterious effect on the rights, interests or legitimate expectations that may be caused by an unfair suspension with or without pay ordinarily supports the conclusion that an employee is entitled to procedural fairness before suspension from duty.200 The content of the [page 610] obligation to provide procedural fairness will vary from case to case according to the demands of the statute and the circumstances in which procedural fairness must be provided.201 An invalid suspension may be cured by a court granting relief such as an injunction, a declaration or the prerogative writs of certiorari and prohibition.202

Effect of valid and invalid suspensions 9.62 The effect of a valid suspension on the rights and obligations of the parties depends on the terms of the contract or statute. Ordinarily, an unqualified contractual or statutory power to suspend has the effect of

suspending at least the employee’s obligation to perform work and the employer’s obligation to permit the performance of service and pay remuneration.203 A valid suspension will usually temporarily bar an employee exercising a right to perform duties.204 As Lord Justice Cotton, in a commonly cited passage, has stated: … when a man is suspended from the office he holds it is merely a direction, that so long as he holds the office and until he is legally dismissed he must not do anything in the discharge of the duties of the office.205

The suspension does not terminate the contract.206 In some cases a suspension may merely relieve the obligations on the employee to perform work but require the employer to continue to pay the employee. This sometimes occurs when the employee is suspended on pay pending an investigation into alleged misconduct.207 There is support for the view [page 611] that ordinarily the relationship of employer and employee ‘ceases to exist effectively for the period of the suspension but is capable of coming back into effective existence when and if the suspension is ended’.208 Much will depend on the terms of the power to suspend the employee and any defined attendant consequences, but it is suggested that there are probably duties owed by both parties that would continue to subsist during a valid suspension under the implied term of mutual trust and confidence, duties of good faith and certain aspects of the duty of fidelity such as the duties concerning the use of confidential information.209

The power to stand down employees 9.63 Under the common law an employer has no power to suspend the performance of its obligations on the ground an employee cannot usefully perform work, or for any other ground, except when that right is granted by an express term of the contract.210 That position is modified by s 524 of the Fair Work Act which grants a statutory right to national system employers to stand down an employee who cannot be usefully employed211 because of

industrial action (other than industrial action organised or engaged in by the employer), a breakdown of machinery or equipment (if the employer cannot reasonably be held responsible for the breakdown) or a stoppage of work for any cause for which the employer cannot reasonably be held responsible. An employee stood down under s 524 is not entitled to pay for that period: s 524(3). The statutory scheme formed by s 524 is not intended to be a code. Subsection 524(2) contemplates that enterprise agreements and contracts [page 612] may govern the employer’s powers to stand down employees who cannot be usefully employed. When they do so, the enterprise agreement or contract governs the matter and there will be no power under s 524(1) to stand down the employee. Section 524 does not displace other rights of an employer to refuse to pay national system employees. An employer who has the right to reject the part performance of the contract by the employee does not contravene s 524 by exercising that right.212 _________________________ 1.

Obligations may also be concurrent. Concurrent obligations must be performed at the same time, such as a term requiring the exchange of signed copies of the contract at a particular time. These terms are rare in employment law and are not considered in this text.

2.

Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 at 452 and 461 and Burton v Palmer [1980] 2 NSWLR 878 at 895.

3.

Automatic Fire Sprinklers Pty Ltd v Watson, note 2 above, at 452, 463–4; Csomore v Public Service Board of New South Wales (1986) 10 NSWLR 587 at 598; United Firefighters’ Union of Australia v Metropolitan Fire Brigades Board (1998) 86 IR 340 at 355; see further 9.13–9.16.

4.

As to the difference between a condition precedent to the formation of a contract and a condition precedent to the performance of an obligation, see 3.15; as to the distinction between a condition and other terms in the contract, see 10.14–10.17.

5.

S Stoljar, ‘The Great Case of Cutter v Powell’ (1956) 34 Can Bar Rev 288 at 296–7.

6.

S Stoljar, ‘The Great Case of Cutter v Powell’, note 5 above, at 297.

7.

Byrne v Australian Airlines Limited (1995) 185 CLR 410 at 428; 131 ALR 422 at 432–3; Automatic Fire Sprinklers Pty Ltd v Watson, note 2 above, at 449, 452, 461, 463 and 476; Graham v Baker (1961) 106 CLR 340 at 345; Decro-Wall International SA v Practitioners in Marketing Ltd [1971] 1 WLR 361 at 369–70; 2 All ER 216 at 223; Gunton v Richmond-uponThames London Borough Council [1981] Ch 448 at 468; [1980] 3 All ER 577 at 588–9; Visscher

v Guidice (2009) 239 CLR 361; 258 ALR 651; 187 IR 96 at [54]; Lucy v The Commonwealth (1923) 33 CLR 229 at 248; Delaney v Staples [1992] 1 AC 687 at 692; 1 All ER 944 at 947; [1992] ICR 483 at 488 and Welbourn v Australian Postal Commission [1984] VR 257 at 267. Judicial recognition of the wages for service bargain in a master and servant relationship dates back at least as far as Winstone v Linn (1823) 1 B & C 460; 107 ER 171 and Archard v Hornor (1828) 3 Car and P 352; 172 ER 452. 8.

Automatic Fire Sprinklers Pty Ltd v Watson, note 2 above, at 451–2, 461, 463–4; Welbourn v Australian Postal Commission, note 7 above, at 267 and G McGarry, ‘No Work, No Pay’ (1983) 57 ALJ 378 at 381–2. The heterodox view that readiness and willingness to perform can earn wages is discussed in 9.17–9.20.

9.

Automatic Fire Sprinklers Pty Ltd v Watson, note 2 above, at 452 and 465; Byrne v Australian Airlines Limited, note 7 above, CLR at 427–8; ALR at 432; Visscher v Guidice, note 7 above, at [54]; Decro-Wall International SA v Practitioners in Marketing Ltd, note 7 above, WLR at 369– 70; All ER at 223; Denmark Productions Limited v Boscobel Productions Limited [1969] 1 QB 699 at 726 and 737; [1968] 3 All ER 513 at 524 and 533; Gunton v Richmond-upon-Thames London Borough Council [1980] 3 All ER 577; [1981] 1 Ch 448 at 468 and 473; [1980] 3 All ER 577 at 588–9 and 592 and Sterling Commerce (Australia) Pty Ltd v Iliff [2008] FCA 702 at [54]– [56].

10.

Automatic Fire Sprinklers Pty Ltd v Watson, note 2 above, at 465 and Delaney v Staples, note 7 above, AC at 692; All ER at 947.

11.

Automatic Fire Sprinklers Pty Ltd v Watson, note 2 above, at 451–3, 463–4 and 476; Williamson v The Commonwealth (1907) 5 CLR 174 at 185; Byrne v Australian Airlines Limited, note 7 above, CLR at 427–8; ALR at 432; Decro-Wall International SA v Practitioners in Marketing Ltd, note 7 above, WLR at 369–70; All ER at 223 and Denmark Productions Limited v Boscobel Productions Limited, note 9 above, QB at 726; All ER at 524; see 14.38–14.39.

12.

See the cases discussed in W Robinson, Lex Parochielis, or A Compendium of the Laws Relating to the Poor, Charles Fredrick Cock, London, 1827, pp 262–70.

13.

J W Smith, Selection of Leading Cases on Various Branches of the Law, John Little Publishers, New York, 1839, Vol 2, p 20 and the approach supported by some of the minority in Emmens v Elderton (1853) IV HLC 624; 10 ER 606 at 616 per Baron Martin and at 617 per Talfourd J.

14.

Fewings v Tisdal (1847) 1 Ex 295; 154 ER 125; Emmens v Elderton, note 13 above, ER at 613– 4, 617–8, 618; Darlow v Edwards (1862) 1 H C 547; 158 ER 1002 and C Smith, The Law of Master and Servant, Sweet, London, 1852, p 90.

15.

Williamson v The Commonwealth, note 11 above, at 185.

16.

Browning v Crumlin Valley Collieries [1926] 1 KB 522 at 528, endorsed as a general rule by Latham CJ in Automatic Fire Sprinklers Pty Ltd v Watson, note 2 above, at 452 and Miles v Wakefield Metropolitan District Council [1987] AC 539 at 561.

17.

Graham v Baker, note 7 above, at 345–6.

18.

Automatic Fire Sprinklers Pty Ltd v Watson, note 2 above, at 465 per Dixon J, from John Milton ‘On Blindness’; see also Ottoman Bank v Chakharian [1930] AC 277 at 282–3.

19.

Grady v The Commissioner of Railways (New South Wales) (1935) 53 CLR 229 at 233; Carey v Commonwealth (1921) 30 CLR 132 at 136; Commissioner for Railways (NSW) v O’Donnell (1938) 60 CLR 681 at 688 and 690; Bennett v Commonwealth of Australia [1980] 1 NSWLR 581 at 585–7 and Gordon v Victoria [1981] VR 235 at 238: see also Hills v Higgins (1982) 40 ALR 476 at 491–2; Edwards v Gietzlet (1983) 8 IR 129 at 130–1 and G McCarry, ‘No Work, No Pay’

(1983) 57 ALJ 378 at 387. The position of validly and invalidly suspended employees is discussed in 9.62. 20.

Automatic Fire Sprinklers Pty Ltd v Watson, note 2 above, at 452 and 463–4. Employment contracts may create other independent obligations, such as the master’s independent obligation to instruct the apprentice in Winstone v Linn, note 7 above, ER at 174. Compare with the unqualified statement of the majority in Visscher v Guidice, note 7 above, at [54] that a dismissed employee ‘cannot receive remuneration after the dismissal because the right to receive it is dependent upon services having been performed’ per Heydon, Crennan, Kiefel and Bell JJ.

21.

See cases at note 2.

22.

Inland Revenue Commissioners v Duke of Westminster [1936] AC 1. Another example is Campbell v Jones (1796) 6 TR 570; 101 ER 708.

23.

Automatic Fire Sprinklers Pty Ltd v Watson, note 2 above, at 463.

24.

Delaney v Staples, note 7 above, AC at 692; All ER at 947; ICR at 488 (‘the essential characteristic of wages is that they are consideration for work done or to be done’ — emphasis added).

25.

For example, a negative covenant not to compete with the master’s business for the life of the former servant in exchange for a quarterly payment: Humlock v Blacklow (1670) 1 Mod 64; 86 ER 734.

26.

Delaney v Staples, note 7 above, AC at 692; All ER at 947; ICR at 488.

27.

See G McCarry, Aspects of Public Sector Employment Law, Law Book Company, Sydney, 1988, pp 182–4 and 186; Miles v Wakefield Metropolitan District Council [1985] ICR 363 at 372, 373– 4 and 376 and on appeal in Miles v Wakefield Metropolitan District Council, note 16 above, at 556 and 567.

28.

Commissioner for Railways (NSW) v Cavanough (1935) 53 CLR 220 at 226–7; Grady v The Commissioner of Railways (New South Wales), note 19 above, at 232–3; Hunkin v Siebert (1934) 51 CLR 538 at 541; Meymott v Piddington (1876) 1 Knox 306 at 315 (it is not a defence to a claim for salary by a district court judge that the judge was not ready and willing to render services or did not render those services); R v Keilor District Board (1870) 1 VR 14 (officer invalidly dismissed was entitled to salary); Slingsby’s case (1680) 3 Swanst 178; 36 ER 821 and Johnstone v Sutton (1786) 1 Term R 510; 99 ER 1225 at 1233. In some ecclesiastical cases, suspension was from all fruits of the office including salary: Bunter v Cresswell (1850) 19 LJQB 357 at 362; 117 ER 317 at 319 and Morris v Ogden (1869) LR 4 CP 687 at 703.

29.

See 5.94.

30.

Mallinson v Scottish Australian Investment Co Ltd (1920) 28 CLR 66 at 73; Tasmanian Steamers Pty Ltd v Lang (1938) 60 CLR 111 at 124; Gapes v Commercial Bank of Australia Ltd (1979) 41 FLR 27 at 30–1; (1980) 37 ALR 20 at 23; G McCarry, ‘No Work, No Pay’, note 19 above, at 380 and G McCarry, ‘No Work, No Pay: A Replication to Shaw QC and McClelland’ (1987) 3 ABR 174 at 178–9.

31.

Gapes v Commercial Bank of Australia Ltd, note 30 above, FLR at 30 and 34; ALR at 23 and 26; Byrne v Australian Airlines Limited, note 7 above, CLR at 420; ALR at 426 and The Commissioner of Railways (New South Wales) v Cavanough, note 28 above, at 224–5.

32.

See 9.32–9.34.

33.

Warner v Public Service Board of New South Wales (1986) 13 NSWLR 263 at 271 and 279–80; see 9.14.

34.

Casey v FJ Walker Pty Ltd (1988) 27 IR 248 at 260–1 (and on appeal at (1989) 29 IR 303 at 316–7); see also George v Mitchell & King Ltd (1943) 59 TLR 153 (though the amount payable to the employee under that statute was not wages as such but ‘a sum not less than normal wages’) and Woolley v Allen Fairhead & Sons Ltd (1946) 62 TLR 294. These cases arose under special wartime legislation and concerned a statutory right to wages. They are anomalous, establish no generally applicable principle and should be confined to their facts; see B Napier, ‘Aspects of the Wage-Work Bargain’ [1984] CLJ 337 at 338. They are further examples of the care that must to be taken when relying on employment law decisions made in the UK during World War II.

35.

Gapes v Commercial Bank of Australia Ltd, note 30 above, FLR at 28–9; ALR at 22; Commissioner for Government Transport v Royall (1966) 116 CLR 314 at 317–8 and 327 (an amount, described in statute as ‘salary’, paid to injured worker even though the worker was refusing to perform tasks that he was fit to perform) and Australian Bank Employees Union v National Australia Bank (1989) 31 IR 436.

36.

United Firefighters’ Union of Australia v Metropolitan Fire Brigades Board, note 3 above, at 355; Independent Education Union of Australia v Canonical Administrators (1998) 87 FCR 49 at 68–9; 157 ALR 531 at 549; 84 IR 123 at 141–2; Csomore v Public Service Board of New South Wales, note 3 above, at 598 and Coal & Allied Mining Services Pty Ltd v MacPherson (2010) 185 FCR 383; 270 ALR 414; 197 IR 95 at [53]–[54]; cf Commissioner for Government Transport v Royall, note 35 above.

37.

United Firefighters’ Union of Australia v Metropolitan Fire Brigades Board, note 3 above, at 355.

38.

Gapes v Commercial Bank of Australia Ltd, note 30 above, FLR at 28; ALR at 22; see also Deane J at 34 (ALR at 26); United Firefighters’ Union of Australia v Metropolitan Fire Brigades Board, note 3 above, at 352; Coal & Allied Mining Services Pty Ltd v MacPherson, note 36 above, at [53]–[54].

39.

G McCarry, Aspects of Public Sector Employment Law, note 27 above, pp 188–95, G McCarry, ‘No Work, No Pay’, note 19 above; J Shaw and R McClelland, ‘Selective Work Bans: No Work, No Pay Revisited’ (1986) 2 ABR 250; G McCarry, ‘No Work, No Pay: A Replication to Shaw QC and McClelland’, note 30 above, at 178–9; B Napier, ‘Aspects of the Wage-Work Bargain’, note 34 above, at 338–42 and G Smith, ‘Part Work No Pay? The Obligation to Pay Wages for Part Performance of Contracts of Employment’ (1989) 2 AJLL 91.

40.

See, for example, Cresswell v Board of Inland Revenue [1984] 2 All ER 713 at 723–4; Bond v Cav Ltd [1983] IRLR 360 and B Napier, ‘Aspects of the Wage-Work Bargain’, note 34 above, at 340–1.

41.

As to independent obligations, see 9.13–9.16.

42.

See the cases at note 7 above.

43.

See the cases at note 8 above.

44.

See the cases at note 10 above.

45.

There are variations of this view: see, for example, the somewhat patronising judgment of Lawton LJ in Henthorn v Central Electricity Board [1980] IRLR 361 at 362 and 365 which appears to support the view that the employee must prove readiness and willingness, even when making a claim for wages earned through service, criticised by B Napier, ‘Aspects of the WageWork Bargain’, note 34 above, at 340–1.

46.

J Carter et al, Contract Law in Australia, 7th ed, LexisNexis Butterworths, Australia, 2007, pp 652–3 (‘as a matter of contract doctine the reasoning leaves a lot to be explained’); G McCarry,

Aspects of Public Sector Employment Law, note 27 above, pp 192–4 and FJ Walker Pty Ltd v Casey (1989) 29 IR 303 at 313 per Pincus J (‘a rather surprising approach reminiscent of the old tendency to treat contracts of employment as entire’); other aspects of the decision have also been adversely commented upon: K Mason et al, Mason and Carter’s Restitution Law in Australia, 2nd ed, LexisNexis Butterworths, Australia, 2008, p 319. 47.

Miles v Wakefield Metropolitan District Council, note 16 above, at 552–3, 561, 568 and 574 and Wiluszynski v Tower Hamlets London Borough Council [1989] ICR 493 at 498. See also Teachers’ Quality Education Case (1980) IAS Current Review [B178] at 767; Electrical Trades Union of Australia v Illawarra County Council (1982) 3 IR 101 at 103–4 and Briers v Australia Telecommunications Commission (1979) 36 FLR 375 at 380–2; 29 ALR 569 at 573–4 (the point was conceded); many of these cases are discussed by G McCarry, ‘No Work, No Pay’, note 19 above, at 379–84.

48.

See 9.10.

49.

Automatic Fire Sprinklers Pty Ltd v Watson, note 2 above.

50.

Visscher v Guidice, note 7 above, at [53]; Automatic Fire Sprinklers Pty Ltd v Watson, note 2 above, at 451, 466, 469, 473; Byrne v Australian Airlines Ltd, note 7 above, CLR at 427–8; ALR at 432; Jarrett v Commissioner of Police (NSW) (2005) 224 CLR 44; 221 ALR 95; 145 IR 194 at [7] and [30]. See 10.60–10.62.

51.

See 14.38 and 9.44.

52.

See 15.52.

53.

See 10.26.

54.

See 10.96.

55.

G McCarry, Aspects of Public Sector Employment Law, note 27 above, p 188, and B Napier, ‘Aspects of the Wage-Work Bargain’, note 34 above, at 338–42.

56.

Cutter v Powell (1795) 6 TR 320; 101 ER 573 and S Stoljar, ‘The Great Case of Cutter v Powell’, note 5 above, at 288.

57.

The family motto of William Rutson was spectemur agendo — ‘Judge us by our actions’: B Burke, Genealogical and Heraldic Dictionary of the Landed Gentry of Great Britain, 4th ed, Harrison, London, 1863, p 1311.

58.

All of the facts in this paragraph are drawn from M Dockray, ‘Cutter v Powell: A trip outside the text’ (2001) 117 LQR 664.

59.

A guinea being £1 1 shilling. There were 20 shillings in a pound.

60.

Two years later Parliament declared void any contract entered into in the West Indies for more than double the wages paid to seamen in Great Britain: An Act for Preventing the Desertion of Seamen from British Merchant Ships trading to His Majesty’s Colonies and Plantations in the West Indies (1797) 37 Geo 3, c 73.

61.

There was also an unsuccessful claim on a quantum meruit for reasonable remuneration.

62.

Cutter v Powell, note 56 above, ER at 576 per Lord Kenyon CJ and 576–7 per Grose J.

63.

See, for example, Countess of Plymouth v Throgmorton (1688) SC 3 Mod 153; 87 ER 99. Williams and Stoljar debate some of the earlier authorities in G Williams, ‘Partial Performance of Entire Contracts’ (1941) 57 LQR 373 at 375–6 and S Stoljar, ‘The Great Case of Cutter v Powell’, note 5 above, at 290.

64.

Lilley v Elwin (1848) 11 QB 742; 116 ER 652 appears to be the first case to mention Cutter v Powell.

65.

J Smith, A Selection of Leading Cases, A Maxwell, London, 1840.

66.

For example, Automatic Fire Sprinklers Pty Ltd v Watson, note 2 above, at 450; Welbourn v Australian Postal Commission, note 7 above, at 274; Secretary of State of Employment v Associated Society of Locomotive Engineers and Firemen (No 2) [1972] 2 QB 455; 2 All ER 949; FC Shepherd & Co Ltd v Jerrom [1987] 1 QB 301; [1986] 3 All ER 589 and Chappell v Times Newspapers Ltd [1975] 2 All ER 233; [1975] 1 WLR 482. Lord Denning, then still at the bar, redrafted the notes to Cutter v Powell in the final edition of Smith’s Leading Cases and the number of times he cited those notes as authority for various propositions are too numerous to list: J Smith, Leading Cases, 13th ed, Sweet & Maxwell, London, 1929.

67.

The history of the statutory foundation of the presumption of yearly hiring and its decline are charted in 11.40–11.47.

68.

Huttman v Boulnois (1827) 2 Car & P 510; 172 ER 231 (clerk, a superior servant, engaged under a yearly hiring who resigned mid-year not entitled to a pro rata payment); Spain v Arnott (1817) 2 Stark 257; 171 ER 638 (labourer engaged on a general hiring was not entitled to wages for 10 months he served prior to being justifiably dismissed for refusing to take horses a mile before he ate dinner); Lilley v Elwin, note 64 above, ER at 755 (labourer engaged on a general hiring was not entitled to wages for the period he served after he was dismissed); Turner v Robinson (1833) 5 B and Ad 789; Boston Deep Sea Fishing and Ice Company v Ansell (1888) 39 Ch D 339 at 360 and 364 and Ridgway v The Hungerford Market Company (1835) 3 Ad & E 171; 111 ER 378 at 380.

69.

E Peel, Treitel’s Law of Contract, 12th ed, Sweet & Maxwell, London, 2007, p 825.

70.

See, for example, Phillips v Ellinson Brothers Pty Ltd (1941) 65 CLR 221 at 233–4 (managing director only entitled to be paid portion of net profits after completion of the relevant service). Examples in employment have most commonly arisen where a seafarer is engaged for the whole of a voyage, as in Cutter v Powell, note 56 above; Jesse v Roy (1834) 1 C M & R 316 at 340–1; 149 ER 1101 at 1110–1; Appleby v Dods (1807) 8 East 300; 103 ER 356 and O’Neil v Armstrong, Mitchell & Co [1895] 2 QB 70.

71.

See 9.28; see also Re North Sydney District Rugby League Football Club (2000) 34 ACSR 630; [2000] NSWSC 634 at [50]. The ordinary objective approach to ascertaining the parties’ intention is discussed in 3.5.

72.

Button v Thompson (1869) LR 4 CP 330 and E Peel, Treitel’s Law of Contract, note 69 above, p 826.

73.

Steele v Tardiani (1945) 72 CLR 386 at 401 and Baltic Shipping Co v Dillon (1993) 176 CLR 344 at 350; 111 ALR 289 at 292–3.

74.

See ss 90(2) and 87(2) of the Fair Work Act: see also s 96(2) concerning personal/ carer’s leave. The phrase ‘at the rate of’ and ‘pro rata’ allow for infinite divisibility; see, for example, Salton v New Beetson Cycle Company [1899] 1 Ch 775. See further G Williams, ‘Partial Performance of Entire Contracts’, note 63 above, at 374.

75.

Hoenig v Isaacs [1952] 2 All ER 176 at 180; Purcell v Bacon (1914) 19 CLR 241 at 265 (rev’d on other grounds (1916) 22 CLR 307); Appleby v Myers (1867) LR 2 CP 561; Moriarty v Regent’s Garage and Engineering Limited [1921] 2 KB 766; see 3.3.

76.

Baltic Shipping Co v Dillon, note 73 above, CLR at 384; ALR at 319–20.

77.

Purcell v Bacon, note 75 above, at 249 and 265. The view of Griffiths CJ at 249 that ‘general rule

[that] all agreements must be considered as entire’ is no longer correct. 78.

State Superannuation Board v Criminale (1988) 26 IR 13 at 18; (1989) 88 ALR 1 at 4; 29 IR 111 at 113; Taylor v Laird (1856) 1 H & N 266; 156 ER 1203 (salary for a voyage payable at a certain rate ‘per month’ was not an entire obligation for the whole voyage); Inman v Ackroyd & Best Limited [1901] 1 QB 613 (director paid certain amount ‘per annum’); Button v Thompson, note 72 above and Boston Deep Sea Fishing and Ice Company v Ansell, note 68 above, at 360, 364–6 and 369–70 (‘at the rate of’). The obligation may be divisible into hourly portions, even though the payments are made weekly: see Warburton v Heywood (1880) 6 QBD 1 and Re Waterside Workers Awards (1957) 1 FLR 119. In the case of obligations to pay pieceworkers, see Steele v Tardiani, note 73 above, at 401.

79.

Re Waterside Workers Awards, note 78 above, at 123–4 and 127–9 (employees engaged by the hour earned one hour’s wages for 90 minutes’ service).

80.

G Williams, ‘Partial Performance of Entire Contracts’, note 63 above, at 374.

81.

Steele v Tardiani, note 73 above, at 401.

82.

Stavers v Curling (1836) 3 Bing (NC) 355; 132 ER 447 at 370–1; Mills v Blackall (1847) 11 QBD 359; 116 ER 511 at 513–4; Gould v Webb (1855) 4 El & Bl 933; 119 ER 347 and G Williams, ‘Partial Performance of Entire Contracts’, note 63 above, at 381; on defective work, see also the dicta in Miles v Wakefield Metropolitan District Council, note 16 above, at 553 and 561.

83.

For the reasons discussed in 9.32–9.34 the harsh effects of the common law entire obligations rule is largely ameliorated by the Apportionment Acts in each state and territory.

84.

Phillips v Ellinson Brothers Pty Ltd, note 70 above, at 233–6; State Superannuation Board v Criminale, note 78 above, (1988) 26 IR at 18; (1989) ALR at 5; (1989) 29 IR at 113; Hoenig v Isaacs, note 75 above, at 180; Re Waterside Workers Awards, note 78 above, at 123–4 and 127– 9; Cutter v Powell, note 56 above; Inman v Ackroyd & Best Limited, note 78 above and Healey v Societe Anonyme Francaise Rubastic [1917] 1 KB 946 at 947–8 and the cases referred to in note 64; see the critique of the rule in S Stoljar, ‘The Great Case of Cutter v Powell’, note 5 above, at 300–2.

85.

G Williams, ‘Partial Performance of Entire Contracts’, note 63 above, at 375.

86.

Lilley v Elwin, note 64 above (‘If the plaintiff [has] been guilty of [an act] so as to justify that discharge then, no wages being due, the plaintiff was entitled to nothing, and the indebitatus count cannot be sustained’).

87.

See G Williams, ‘Partial Performance of Entire Contracts Part II’ (1941) 57 LQR 490 at 491 and B Napier, ‘Aspects of the Wage-Work Bargain’, note 34 above, at 338; cf the meaning of consideration discussed in 3.28.

88.

See K Mason et al, Mason and Carter’s Restitution Law in Australia, note 46 above, pp 312–3 and 318–9 and the cases discussed therein; Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 at 256; 69 ALR 577 at 604; Cutter v Powell, note 56 above, ER at 576; cf the dicta to the contrary effect in Miles v Wakefield Metropolitan District Council, note 16 above, at 561 where Lord Templeman expressed a provisional view, supported by Lord Brightman at 553; Lords Brandon, Bridge and Oakley all reserved their opinion on that matter at 552 and 576. See also the note of Priestley JA in Update Constructions Pty Ltd v Rozelle Child Care Centre Ltd (1990) 20 NSWLR 251 at 275. On the operation of the rule where there has been a wrongful dismissal, see Automatic Fire Sprinklers Pty Ltd v Watson, note 2 above, at 450, 451 and 462 and 14.43.

89.

See 9.49.

90.

The classification of terms is discussed in 10.14.

91.

See, for example, cases such as Spain v Arnott, note 68 above; Lilley v Elwin, note 64 above, ER at 755; Turner v Robinson, note 68 above; Boston Deep Sea Fishing and Ice Company v Ansell, note 68 above, at 360, 365 and 369–70 and M Freedland, The Contract of Employment, Clarendon Press, Oxford, 1976, p 129. As to forfeiture, see 9.49.

92.

Jesse v Roy, note 70 above, C M & R at 340–1; ER at 1110–1 (seaman engaged ‘until the arrival of the said ship at London’ was not entitled to wages when ship condemned en route to London and then he died en route); Appleby v Dods, note 70 above (ship lost); Moriarty v Regent’s Garage and Engineering Limited, note 75 above, at 780 and 783; Phillips v Ellinson Brothers Pty Ltd, note 70 above; Huttman v Boulnois, note 68 above; Lamburn v Cruden (1841) 2 M & G 253; 133 ER 741 and G Williams, ‘Partial Performance of Entire Contracts’, note 63 above, at 375–7 and the cases discussed therein.

93.

See 14.43.

94.

See 9.49.

95.

Apportionment Act 1905 (ACT); Conveyancing Act (NSW) ss 142–144; Law of Property Act (NT) ss 211–213; Property Law Act 1974 (Qld) ss 231–233; Law of Property Act 1936 (SA) ss 63–68; Apportionment Act 1871 (Tas); Supreme Court Act 1986 (Vic) ss 53–54; Property Law Act 1969 (WA) ss 130–134. These Acts are referred to below as ‘the Apportionment Acts’; see also Re North Sydney District Rugby League Football Club, note 71 above, at [50].

96.

As to entire contracts, see the text below accompanying notes 104–106. As to the meaning of a divisible and an entire contract, see 9.26–9.28.

97.

Wardroper v Cutfield (1864) 33 LJ Ch 605 at 607 per Kindersley VC.

98.

See the definitions in Apportionment Act 1905 (ACT) s 2; Conveyancing Act (NSW) s 142; Law of Property Act (NT) s 211; Property Law Act 1974 (Qld) s 231; Law of Property Act 1936 (SA) s 63; Apportionment Act 1871 (Tas) s 5; Supreme Court Act 1986 (Vic) s 53; Property Law Act 1969 (WA) s 130.

99.

See Moriarty v Regent’s Garage and Engineering Limited [1921] 1 KB 423 (rev’d on other grounds [1921] 2 KB 766) and M Freedland, The Personal Employment Contract, Oxford University Press, Oxford, 2003, pp 203–4; on the meaning of ‘salary’, see Moriarty at 428–33 and 443–6 and in a different statutory context Commissioner for Government Transport v Kesby (1972) 127 CLR 374 at 377–8 and 388 and Gordon v Jennings (1892) 9 QBD 45.

100. The phrase ‘shall be treated as’ and ‘shall be considered as’ are used in some of the Apportionment Acts. They operate as a deeming provision: Item Software (UK) Ltd v Fassihi [2004] IRLR 928 at [91] and Sim v Rotherham Council [1987] Ch 216 at 255; [1986] 3 All ER 387 at 410 (under the Act salaries are ‘deemed’ to accrue day by day). ‘Day by day’ means calendar days, not working days: Re BCCI [1994] IRLR 282 (the appeal from that decision in Malik did not concern this point); Thames Water Facilities v Reynolds [1996] IRLR 186; Leisure Leagues UK Ltd v Maconnachie (2002) Times Law Reports, 3 May 2002. 101. This argument appears to have found favour in Salton v New Beetson Cycle Company, note 74 above and Inman v Ackroyd & Best Limited, note 78 above, although in both cases the judgments addressed the issue so briefly it is difficult to discern the basis of the reasoning. It also finds some support in the dicta in Lowndes v Earl of Stamford (1852) 18 QB 425; 118 ER 160. An alternative restrictive interpretation of the Act articulated by Professor Matthews in P Matthews, ‘“Salaries” in the Apportionment Act 1870’ (1981) 2 LS 302, a much cited article, was rejected in Item Software (UK) Ltd v Fassihi, note 100 above, at [80] and [115].

102. Item Software (UK) Ltd v Fassihi, note 100 above, at [71]–[82] and [112]–[115] and [122]; Treacy v Corcoran (1874) IR 8 CL 40 and Sim v Rotherham Council, note 100 above, Ch at 255; All ER at 410. 103. Item Software (UK) Ltd v Fassihi, note 100 above, at [91]. 104. G Williams, ‘Partial Performance of Entire Contracts’, note 63 above, at 382; M Freedland, The Personal Employment Contract, note 99 above, pp 203–4 and appears to also be accepted by J Carter et al, Contract Law in Australia, note 46 above, pp 648–9 and E Peel, Treitel’s Law of Contract, note 69 above, pp 830–1. 105. The issue was not directly addressed in Sim v Rotherham Council, note 100 above Ch at 255; All ER at 410, but Scott J appeared to proceed on the assumption that the employee in example 2 would be entitled to a payment of wages, subject to any equitable set-off. 106. Cutter v Powell, note 56 above. As to the meaning of an entire contract, see 9.26. 107. Vaught v Tel Sell Ltd [2005] EWHC 2420 at [152] and Wallace v Ross (1915) 17 Gazette LR 518 at 522–3. 108. Re BCCI, note 100 above; Thames Water Facilities v Reynolds, note 100 above and Leisure Leagues UK Ltd v Maconnachie, note 100 above. 109. Moriarty v Regent’s Garage and Engineering Limited, note 99 above, at 434–5 and 449. 110. Item Software (UK) Ltd v Fassihi, note 100 above, at [71]–[82] and [112]–[115] and [122]; G Williams, ‘Partial Performance of Entire Contracts’, note 63 above, at 382–3; M Freedland, The Personal Employment Contract, note 99 above, pp 203–4 and E Peel, Treitel’s Law of Contract, note 69 above, p 831. 111. Turner v Robinson, note 68 above; Ridgway v The Hungerford Market Company, note 68 above, ER at 380; Spain v Arnott, note 68 above; Lilley v Elwin, note 64 above, ER at 755; Boston Deep Sea Fishing and Ice Company v Ansell, note 68 above; Healey v Societe Anonyme Francaise Rubastic, note 84 above and Re Central De Kaap Gold Mines (1899) 69 LJ Ch 18. 112. Moriarty v Regent’s Garage and Engineering Limited, note 99 above, at 449. 113. Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd (1938) 61 CLR 286 at 301–2. 114. See 14.9. 115. Shipton Anderson & Co v Weil Bros & Co [1912] 1 KB 574 at 578–9; Arcos Limited v EA Ronaasen and Son [1933] AC 470 at 479–80; J Carter, Breach of Contract, 3rd ed, LexisNexis Butterworths, Sydney, 2011, pp 27–8 and 47–64. 116. Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd, note 113 above, at 304. 117. Phillips v Ellinson Brothers Pty Ltd, note 70 above, at 246–7; Hoenig v Isaacs, note 75 above, at 181; Steele v Tardiani, note 73 above, at 401; Gapes v Commercial Bank of Australia Ltd, note 30 above, FLR at 32 and 33; ALR at 25–6; Csomore v Public Service Board of New South Wales, note 3 above, at 595–7 and Welbourn v Australian Postal Commission, note 7 above, at 267; cf the approach in Sim v Rotherham Council, note 100 above, Ch at 252–5; All ER at 408–10. 118. See 9.45. 119. Stavers v Curling, note 82 above, ER at 370–1; Mills v Blackall, note 82 above, ER at 513–4; Gould v Webb, note 82 above; Nelson v BHP Coal Pty Ltd [2000] QCA 505 at [9]–[10]; Peninsular & Oriental Steam Navigation Co v Johnson (1938) 60 CLR 189 at 253–4 and G Williams, ‘Partial Performance of Entire Contracts’, note 63 above, at 381; cf Corio Guarantee Corp Ltd v McCallum [1956] VLR 755 at 760.

120. Stavers v Curling, note 82 above, ER at 370–1 per Tindal CJ and Hoenig v Isaacs, note 75 above, at 181. 121. Section 19; Qantas Airways Ltd v Transport Workers’ Union of Australia (2011) 280 ALR 503; [2011] FCA 470 at [328]–[332]. 122. O’Shea v Heinemann Electric Pty Ltd (2008) 172 FCR 475; 178 IR 394; [2008] FCA 1799 at [27]. 123. Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543; 162 IR 444 at [83]–[84]; O’Shea v Heinemann Electric Pty Ltd, note 122 above, at [28] and [32]; see also Qantas Airways Ltd v Transport Workers’ Union of Australia, note 121 above, at [348] which also discusses the obligation of the employee to serve during the period. On penalty provisions, see 14.131. 124. Steele v Tardiani, note 73 above, at 401; Baltic Shipping Co v Dillon, note 73 above, CLR at 350; ALR at 292–3; see also Miles v Wakefield Metropolitan District Council, note 16 above, at 556 where Lord Templeman opined that the divisor might be 365 days for a judge who ‘might devote his Christmas holidays to the elucidation of legal problems arising from industrial action’. 125. Gapes v Commercial Bank of Australia Ltd, note 30 above, FLR at 33–4; ALR at 26; British Telecommunications Plc v Ticehurst [1992] ICR 383 at 397–403; Csomore v Public Service Board of New South Wales, note 3 above, at 595–7 and Miles v Wakefield Metropolitan District Council, note 16 above, at 551–2. 126. United Firefighters’ Union of Australia v Metropolitan Fire Brigades Board, note 3 above, at 355. This was the conclusion reached in Bennett v Commonwealth of Australia, note 19 above and Welbourn v Australian Postal Commission, note 7 above, at 273–5; a different conclusion was reached when dealing with the powers to suspend in Cresswell v Board of Inland Revenue, note 40 above, at 723–4; Briers v Australia Telecommunications Commission, note 47 above, FLR at 380–2; ALR at 573–4 and Csomore v Public Service Board of New South Wales, note 3 above at 594–7. 127. This is supported by dicta in Australian Bank Employees Union v National Australia Bank Ltd, note 35 above and Gapes v Commercial Bank of Australia Ltd, note 30 above, FLR at 29; ALR at 22, though both involved the acceptance of part performance of an independent obligation. 128. Australian Bank Employees Union v National Australia Bank Ltd, note 35 above (direction ambiguous and employer took the benefit of the continued work); Gapes v Commercial Bank of Australia Ltd, note 30 above, FLR at 29, 33–4; ALR at 22 and 26 (employee refused to leave premises when requested, was told he could resume his duties and ‘worked with the knowledge and consent of the bank’); United Firefighters’ Union of Australia v Metropolitan Fire Brigades Board, note 3 above, at 357 (Firefighter Maxwell refused to leave premises and resumed duties on further direction, including the banned work); Bond v Cav Ltd, note 40 above (employees continued to work and were provided with power oil and raw materials to operate their machines) and Welbourn v Australian Postal Commission, note 7 above, at 267. 129. Independent Education Union of Australia v Canonical Administrators, note 36 above, FCR at 70–2; ALR at 551–2; IR at 144–5; see also United Firefighters’ Union of Australia v Metropolitan Fire Brigades Board, note 3 above, at 356–7. 130. Csomore v Public Service Board of New South Wales, note 3 above, at 598; Briers v Australia Telecommunications Commission, note 47 above, FLR at 380–2; ALR at 573–4; Miles v Wakefield Metropolitan District Council, note 16 above, at 551–2 and Courtney v Australian Postal Commission (1978) LBC Ind Arb Serv Current Review 32 at 35. Where an employee has engaged in industrial action courts have assumed that the employee is entitled to payment for work performed prior to the action commencing: United Firefighters’ Union of Australia v

Metropolitan Fire Brigades Board, note 3 above, at 355. 131. Australian National Airlines Commission v Robinson [1977] VR 87 at 91–2; British Telecommunications Plc v Ticehurst, note 125 above; Cresswell v Board of Inland Revenue, note 40 above, at 723–4 and Noonan v Victorian Railways Commissioners (1907) 4 CLR 1668 at 1680, 1682 and 1685; see also Bearingpoint Australia Pty Ltd v Hillard [2008] VSC 115 at [134]; B Napier, ‘Aspects of the Wage-Work Bargain’, note 34 above, at 339–42; G McCarry, Aspects of Public Sector Employment Law, note 27 above, pp 189–90 and G McCarry, ‘No Work, No Pay’, note 19 above, at 382. A party in breach of a warranty, or who is not ready and able to perform a warranty, is able to sue for damages: Roadshow Entertainment Pty Ltd v ACN 053 006 269 Pty Ltd Receiver & Manager Appointed (1997) 42 NSWLR 462 at 480–1. 132. Bond v Cav Ltd, note 40 above; Welbourn v Australian Postal Commission, note 7 above, at 267 and Gapes v Commercial Bank of Australia Ltd, note 30 above, FLR at 29; ALR at 22; see also Morgan v S & S Constructions Pty Ltd [1967] VR 149 at 156. 133. Gapes v Commercial Bank of Australia Ltd, note 30 above, FLR at 29; ALR at 22; on the assessment of the amount of any equitable set-off, see 9.52. 134. Welbourn v Australian Postal Commission, note 7 above, at 267. 135. Miles v Wakefield Metropolitan District Council, note 16 above, at 553. In Australia an employee with an effective contract could not sue on a quantum meruit in such cicumstances: see 9.29. 136. Gapes v Commercial Bank of Australia Ltd, note 30 above, FLR at 33–4; ALR at 26; see also Miles v Wakefield Metropolitan District Council, note 16 above, at 553. 137. Agricultural & Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570; 251 ALR 322 at [90]. See C Bevan, ‘Waiver of contractual rights: A non sequitur’ (2009) 83 ALJ 817 and P Liondas, ‘ “Waiver” in the High Court: Agricultural & Rural Finance Pty Ltd v Gardiner’ (2009) 37 ABLR 132. 138. Industrial Relations Act 1996 (NSW) ss 117–119; Workplace Relations Act 1997 (Qld) ss 420, 421; Industrial and Employee Relations Act 1994 (SA) s 68; Industrial Relations Act 1984 (Tas) s 51; and Minimum Conditions of Employment Act 1993 (WA) ss 17B–17D. A history of the Truck Act 1896 (UK) and its predecessors is set out in Bristow v City Petroleum Ltd [1987] 1 WLR 529 at 532–5. 139. See Bristow v City Petroleum Ltd, note 138 above, WLR at 532–5; All ER at 47–50 and S Deakin, ‘Logical Deductions? Wage Protection Before and After Delaney v Staples’ (1992) 55 MLR 848. 140. Taylor v Laird, note 78 above, ER at 1206 per Pollock CB (the contract providing for a monthly salary ‘gives a cause of action as each month accrues, which, once vested, is not subsequently lost or divested by the plaintiff’s desertion or abandonment of his contract’); Button v Thompson, note 72 above; Warburton v Heywood, note 78 above; Boston Deep Sea Fishing and Ice Company v Ansell, note 68 above, at 360–1 and 366–7; Healey v Societe Anonyme Francaise Rubastic, note 84 above, at 947 and Brandeaux Advisers (UK) Limited v Chadwick [2011] IRLR 224 at [51]–[56]; cases including such express terms include Walsh v Walleye (1874) (LR) 9 QB 367 and William Robinson & Co Ltd v Heuer [1898] 2 Ch 451 at 458. 141. Turner v Robinson, note 68 above; Ridgway v The Hungerford Market Company, note 68 above, ER at 380; Spain v Arnott, note 68 above; Lilley v Elwin, note 64 above, ER at 755 and Boston Deep Sea Fishing and Ice Company v Ansell, note 68 above, at 360 and 365. 142. Moriarty v Regent’s Garage and Engineering Limited, note 99 above, at 449: on the effect of a serious breach or repudiation on the earning of accrued entitlements, see 10.74 and Foggo v

O’Sullivan Partners (Advisory) Pty Ltd (2011) 206 IR 87; [2011] NSWSC 501 at [105]–[111]. 143. Mondel v Steel & Co Ltd (1841) 8 M & W 858; 151 ER 1288. Abatement avoids the need for the innocent party to commence an action to recover the damages flowing from the breach: Street v Blay (1831) 2 B & Ad 456; 109 ER 1212 at 1214 and Healing (Sales) Pty Ltd v Inglis Electrix Pty Ltd (1968) 121 CLR 588 at 613–5. 144. Sharp v Hainsworth (1862) 3 B & S 139; 122 ER 53 (in which the issue was whether magistrates could take into account an abatement for the purpose the amount of wages that were ‘just and reasonable’); Sagar v Ridehlagh & Son Ltd [1931] 1 Ch 310 at 323–6 whose comments were rightly described as dicta in Sim v Rotherham Council, note 100 above, Ch at 257; All ER at 412 and Miles v Wakefield Metropolitan District Council, note 16 above, at 562–3 per Lord Templeman (the only Law Lord to address the issue, which is not surprising given the fact that the employer in that case expressly disclaimed any reliance on abatement). 145. Modern Engineering (Bristol) Ltd v Gilbert-Ash (Northern) Ltd [1974] AC 689 at 717; [1973] 3 All ER 195 at 215 and Aries Tanker Corporation v Total Transport Ltd [1977] 1 WLR 185 at 190; 1 All ER 398 at 404. See also Mellowes Archital Ltd v Bell Products Ltd (1997) 58 Construction Law Reports 22 at 27–8; Nelson v BHP Coal Pty Ltd, note 119 above, at [9]–[10]; Sim v Rotherham Council, note 100 above, Ch at 255–9; All ER at 410–3; S Deakin, ‘Logical Deductions? Wage Protection Before and After Delaney v Staples’, note 139 above, at 850 and R P Meagher et al, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies, 4th ed, LexisNexis Butterworths, Sydney, 2002, p 1048. 146. Multiplex Constructions (UK) Ltd v Cleveland Bridge UK Ltd (2006) 107 Construction LR 1 at [647] to [652] and Hutchison v Harris (1978) 10 BLR 19. See also M Freedland, The Contract of Employment, note 91 above, p 136. 147. Mellowes Archital Ltd v Bell Products Ltd, note 145 above, at 27–8. 148. See S Derham, ‘Equitable Set Off’ (2006) 122 LQR 469 at 469–71; R P Meagher et al, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies, note 145 above, pp 1049–50. 149. See Keates v Lewis Merthyr Consolidated Collieries [1911] AC 641; Le Loir v Bristow (1815) 4 Camp 134; 171 ER 143; Stimson v Hall (1857) 1 H & N 831; 156 ER 1436 and S Deakin, ‘Logical Deductions? Wage Protection Before and After Delaney v Staples’, note 139 above; the Acts included the Master and Servants Act 1823 (UK); Master and Servants Act 1867 (UK); Employers and Workmen Act 1875 (UK) s 3. 150. Williams v North’s Navigation Collieries (1889) Limited [1906] AC 136. 151. See generally S Derham, ‘Equitable Set Off’, note 148 above; P Young et al, On Equity, Lawbook Co, Sydney, 2009, pp 989–1001; R P Meagher et al, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies, note 145 above, Ch 37. 152. See generally D Galambos & Son Pty Ltd v McIntyre (1974) 5 ACTR 10 at 25–6. 153. D Galambos & Son Pty Ltd v McIntyre, note 152 above, at 25–6; see 15.60. 154. Sim v Rotherham Council, note 100 above, Ch at 262; All ER at 415; G Morris, ‘Deductions from Pay for Industrial Action’ (1987) 16 ILJ 185 at 188 and B Napier, ‘Aspects of the WageWork Bargain’, note 34 above, at 347. 155. Sim v Rotherham Council, note 100 above, Ch at 259–62; All ER at 412–5; Royle v Trafford Borough Council [1984] IRLR 184 (though it is not clear whether equitable set-off was relied on for the reduction in wages) and Miles v Wakefield Metropolitan District Council, note 16 above. 156. Williams v North’s Navigation Collieries (1889) Limited, note 150 above, referred to approvingly

in Bristow v City Petroleum Ltd, note 138 above, WLR at 532; see also Sim v Rotherham Council, note 100 above, Ch at 259–60; All ER at 413. 157. On a related point, see Kidd v Savage River Mines (1984) 6 FCR 398 at 410; (1984) 9 IR 362 at 371–2. 158. British Waggon Company v Lea & Co (1880) 5 QBD 149 at 154. 159. See 6.40–6.45. 160. Southway Group Ltd v Wolff (1991) 57 BLR 33 at 48, 53; Davies v Collins [1945] 1 All ER 247 at 250. 161. Edwards v Newland & Co [1950] 2 KB 534 at 538–9, 540 and 542; Tolhurst v Associated Portland Cement Manufacturers (1900) Ltd [1903] AC 414 at 416. Note, however, the different results in Robson v Drummond (1831) 2 B & Ad 303; 109 ER 1156 and British Waggon Company v Lea & Co, note 158 above, both of which concerned contracts that were, in ‘essence’, indistinguishable. See also G Tolhurst, The Assignment of Contractual Rights, Hart Publishing, Oxford, 2006, pp 237–8. 162. Southway Group Ltd v Wolff, note 160 above, at 48 and Davies v Collins, note 160 above, at 250. 163. Don King Productions Inc v Warren [2000] Ch 291; [1999] 2 All ER 218; [1999] 3 WLR 276 at 301 per Lightman J (aff’d [1999] 3 WLR 307); British Waggon Company v Lea & Co, note 158 above, at 153–4 and Bruce v Tyler (1916) 21 CLR 277 at 288–9; see also Tolhurst v Associated Portland Cement Manufacturers (1900) Ltd [1902] 2 KB 660 at 668 and 6.42. 164. See, for example, Building Workers’ Industrial Union of Australia v Odco Pty Ltd (1991) 29 FCR 104 at 118–9; (1991) 99 ALR 735 at 747–8. 165. Southway Group Ltd v Wolff, note 160 above, at 53. Note also Southern Foundries (1926) Ltd v Shirlaw [1940] AC 701 at 718–9; 2 All ER 445 at 456 (delegation of the right to terminate not challenged) and the cases concerning employment pro hac vice discussed in 6.45. 166. Robson v Drummond, note 161 above, ER at 1157–8 (repairing and painting a wagon); Southway Group Ltd v Wolff, note 160 above, at 44–51 (architectural work); Tolhurst v Associated Portland Cement Manufacturers (1900) Ltd, note 161 above, at 417; Edwards v Newland & Co, note 161 above, at 539 and 542; British Waggon Company v Lea & Co, note 158 above, at 153; Mallyons Limited v The South Australian Harbours Board [1933] SASR 166 at 176 (shunting trucks). See also the cases referred to in G Tolhurst, The Assignment of Contractual Rights, note 161 above, pp 239–40. 167. British Waggon Company v Lea & Co, note 158 above, at 153 and Legh v Lillie (1860) 6 H & N 165; 158 ER 69 at 70. 168. Southway Group Ltd v Wolff, note 160 above, at 44–51 and 54–5; Tolhurst v Associated Portland Cement Manufacturers (1900) Ltd, note 161 above, at 417; Bruce v Tyler, note 163 above, at 284–5, 289; British Waggon Co v Lea, note 158 above, at 153 and Robson v Drummond, note 161 above, ER at 1157–8. The same principle applies to agents where confidence is essential: De Bussche v Alt (1878) 8 Ch D 286 at 310 and John McCann & Co v Pow [1974] 1 WLR 1643 at 1647. 169. Southway Group Ltd v Wolff, note 160 above, at 50 and 55. See also Griffith v Tower Publishing Co Ltd [1896] 1 Ch 21 at 24–5, referred to approvingly in Nokes v Doncaster Amalgamated Collieries Ltd [1940] AC 1014 at 1030–1; 3 All ER 549 at 559–60 and Australis Media Holdings Pty Ltd v Telstra Corporation Ltd (1998) 43 NSWLR 104 at 118–20. 170. De Bussche v Alt, note 168 above, at 310–1; see G Dal Pont, Law of Agency, Butterworths,

Sydney, 2001, Ch 5. 171. Neeta (Epping) Pty Ltd v Phillips (1974) 131 CLR 286 at 298–9; 3 ALR 151 at 161 and Raineri v Miles [1981] AC 1050 at 1081 and 1090. 172. Canning v Temby (1905) 3 CLR 419 at 424; Purdue v Brown Hatton Rural Pty Ltd (1995) 60 IR 451 at 453; Kaye v Cooke’s (Finsbury) Ltd [1974] ICR 65 (agreement to employ but no commencement date is agreed); Kennedy v Australasian Coal and Shale Employee’s Federation (No 2) (1983) 9 IR 355 at 360 and on appeal at Turner v Australasian Coal and Shale Employee’s Federation (1984) 6 FCR 177 at 182. 173. See J Stannard, Delay in the Performance of Contractual Obligations, Oxford University Press, Oxford, 2007, pp 10–23. 174. Hick v Raymond & Reid [1893] AC 22 at 29 (the strike that prevented the prompt unloading of goods was not caused by or contributed to by consignee). 175. See Cranford–Webster v MacFarlane [1947] SASR 162 at 170 as to the meaning of ‘waiting time’. 176. Devonald v Rosser & Sons [1906] KB 728 at 743 per Farwell LJ — ‘de anno in annum’ means from year to year and ‘de die in diem’ means from day to day; see Purdue v Brown Hatton Rural Pty Ltd (1995) 60 IR 451 at 453–4 (payment of settlement sum in unfair dismissal case delayed until after Christmas for unemployed dismissed workers). 177. See Cantor Fitzgerald International v Callaghan [1999] 2 All ER 411 at 420; [1999] ICR 639 at 649 and Adams v Charles Zub Associates Ltd [1978] IRLR 551. 178. M Freedland, The Contract of Employment, note 91 above, p 77. 179. See 9.58 concerning suspension for misconduct; Australian Workers Union v Stegbar Australia Pty Ltd [2001] FCA 367 at [24] (suspension during lockout) and Re Application by Building Workers’ Industrial Union of Australia (1979) 41 FLR 192 at 194 (suspension during downturn). The right to stand down employees under the Fair Work Act is considered in 9.63. 180. Hanley v Pease & Partners Ltd [1915] 1 KB 698 at 705; Foong v Norfolk Island Hospital (2002) 170 FLR 354; [2002] NFSC 4 at [48] and APESMA v Skilled Engineering Pty Ltd (1994) 122 ALR 471 at 480. 181. Hanley v Pease & Partners Ltd, note 180 above, at 705; Foong v Norfolk Island Hospital, note 180 above, at [45]–[48]; Scharmann v APIA Club Ltd (1983) 6 IR 157 at 165; Australian Workers Union v Stegbar Australia Pty Ltd, note 179 above, at [24]; Gorse v Durham County Council [1971] 2 All ER 666 at 674–5; Gregory v Philip Morris Ltd (1987) 77 ALR 79 at 100 and Gregory v Philip Morris Ltd (1988) 80 ALR 455 at 472–3. 182. Hanley v Pease & Partners Ltd, note 180 above, at 705 per Lush J, Rowlatt and Atkin JJ substantially agreeing at 706 and Brackenridge v Toyota Motor Corporation Australia Ltd (1997) 142 ALR 99 at 105–6; cf the right to an equitable set-off discussed in 9.52. 183. McClory v Post Office [1993] 1 All ER 457 at 467–8 and R C McCallum, ‘Exploring the Common Law: Lay-Off, Suspension and the Contract of Employment’ (1989) 2 AJLL 211 at 228. 184. Such implications occurred in Bird v British Celanese Ltd [1945] 1 KB 336 and Marshall v English Electric Co Ltd [1945] 1 All ER 653 at 654–5; see also MacKinnon LJ at 655–6. The dissent of Du Parcq LJ is more convincing. These decisions are good examples of the care that needs to be taken when relying on employment law decisions made in the United Kingdom during World War II. The approaches taken to the implication of the term in those cases are inconsistent with the test now applied in Australia: see 5.73. See also R C McCallum, note 181

above, at 228. 185. Morgan v Fry [1968] 2 QB 710 at 728; Royal Commission on Trade Unions and Employers’ Associations, 1965–1968, Cmnd 3623. See also K Foster, ‘Strikes and Employment Contracts’ (1971) 34 MLR 275 and R C McCallum, note 204 above, at 223–5. Lord Denning’s view has not found favour in Australia or the United Kingdom: Simmons v Hoover [1977] 1 QB 284 at 293–9 and Latham v Singleton [1981] 2 NSWLR 843 at 861–5 where the court was prepared to assume the correctness of the proposition, or a variant of it. 186. Carey v Commonwealth, note 19 above, at 136 per Higgins J; Commissioner for Railways (NSW) v O’Donnell, note 19 above, at 688 and 690; Bennett v Commonwealth of Australia, note 19 above, at 585–7 and Gordon v Victoria, note 19 above, at 238; see also Hills v Higgins, note 19 above, at 491–2 and Edwards v Gietzlet, note 19 above, at 130–1. 187. Mezey and South West London and St George’s Mental Health NHS Trust [2007] IRLR 244. 188. Ford v Lismore City Council (1989) 29 IR 68 at 77; Boston Deep Sea Fishing and Ice Company v Ansell, note 68 above, at 352 and Gorse v Durham County Council, note 181 above, at 674–5; cf Marshall v English Electric Co Ltd, note 184 above, at 655. As to cases concerning the suspension for the whole of an unexpired fixed term, see Hills v Higgins, note 19 above, at 491–2 and Moshirian v University of New South Wales [2002] FCA 179 at [56]–[69]. 189. Coal & Allied Mining Services Pty Ltd v MacPherson, note 36 above, at [34]–[43]; Briers v Australia Telecommunications Commission, note 47 above, FLR at 380–2; ALR at 573–4; Csomore v Public Service Board of New South Wales, note 3 above, at 594–7; Cresswell v Board of Inland Revenue, note 40 above, at 723–4; G McCarry, Aspects of Public Sector Employment Law, note 27 above, pp 136–8 and R C McCallum, note 172 at 225–7. The meaning of a continuing obligation is discussed in 14.26. 190. See 9.43. 191. Hunkin v Siebert, note 28 above, at 541 and Slingsby’s case (1680) 3 Swanst 178; 36 ER 821. 192. Hunkin v Siebert, note 28 above, at 541 and Philips v Bury (1788) 2 Term Rep 346 at 351; 100 ER 186 at 189. 193. Hunkin v Siebert, note 28 above, at 541 and Slingsby’s case, note 191 above. See also the analogous position of the provisionally dismissed employee in Grady v The Commissioner of Railways (New South Wales), note 19 above, at 232–3. In some ecclesiastical cases, suspension was from all fruits of the office including salary: Bunter v Cresswell, note 28 above, LJQB at 362; ER at 319 and Morris v Ogden, note 28 above, at 703. 194. See 11.7; Foong v Norfolk Island Hospital, note 180 above, at [46]. 195. Hunkin v Siebert, note 28 above, at 542 per Rich, Starke and Dixon JJ; cf Menner v Falconer, Commissioner of Police (1997) 74 IR 472. 196. Ward v Director-General of School Education (1998) 80 IR 175 at 179–80. 197. Hunkin v Siebert, note 28 above, at 541. 198. PS Regulations 1999 (Cth) reg 3.10; PSEM Act 2002 (NSW) s 49; PA Act 2004 (Vic) s 20(2)(g); PS Act 2009 (SA) s 57. 199. See the statutes and cases referred to in 11.30. 200. Quinn v Overland (2010) 199 IR 40; [2010] FCA 799 at [52]–[64] (suspension under the PA Act 2004 (Vic)); Barratt v Howard (2000) 170 ALR 529; 92 IR 350; [1999] FCA 1132 at [49]; Dixon v Commonwealth of Australia (1981) 51 ALR 173 at 178–82; Everingham v Director-General of

Education and Minister of Education (1993) 31 ALD 741; Re Piper; Ex parte Meloney (1996) 63 IR 473 at 477 and Schmohl v Commonwealth (1983) 49 ACTR 24 at 31; cf Commissioner of Police v Gordon [1975] 1 NSWLR 675 at 687. 201. Jarrett v Commissioner of Police (NSW), note 50 above, at [51]; Salemi v MacKellar (1977) 137 CLR 396 at 401, 419 and 460; Barratt v Howard, note 200 above, at [48]. 202. Foong v Norfolk Island Hospital, note 180 above, at [60]–[63]; Schmohl v Commonwealth, note 200 above, at 31 and Bennett v Commonwealth of Australia, note 19 above, at 588. 203. Reid v Australian Institute of Marine and Power Engineers (1990) 33 IR 463 at 464–5 (union secretary suspended under rules of union was not entitled to salary during period of suspension); Wallwork v Fielding [1922] 2 KB 66 at 71–2 and 74–5; Bird v British Celanese Ltd, note 184 above, at 341 and 342; R v Inhabitants of Byker (1823) 2 B & C 114; 107 ER 325 (right to suspend contract for a week at Christmas to maintain machinery); Welbourn v Australian Postal Commission, note 7 above, at 267 and Bird v British Celanese Ltd, note 184 above, at 341 and 342. 204. R v Deputy Chief Constable of the North Wales Police; Ex parte Hughes [1991] 3 All ER 414 at 432. 205. Boston Deep Sea Fishing and Ice Company v Ansell, note 68 above, at 352, referred to approvingly in Welbourn v Australian Postal Commission, note 7 above, at 267 and Foong v Norfolk Island Hospital, note 180 above, at [32]. 206. See 9.59. 207. Warner v Public Service Board of New South Wales, note 33 above (salary of officer was ‘withheld’ during period of suspension, but was entitled to be paid salary after charges were dismissed). See also the analogous position of the provisionally dismissed employee in Grady v The Commissioner of Railways (New South Wales), note 19 above, at 232–3. As to the right to remuneration while suspended pursuant to the Crown’s power to suspend, see 9.60. 208. R v Deputy Chief Constable of the North Wales Police; Ex parte Hughes, note 204 above, at 422 per Ralph Gibson LJ; Wallwork v Fielding, note 203 above, at 71–2 per Lord Sterndale MR (‘the whole contract is suspended’) and 74–5 per Warrington LJ (the effect of a suspension is ‘to suspended the relation of employer and employed for the time being’) and Bird v British Celanese Ltd, note 184 above, at 341. 209. See G McCarry, Aspects of Public Sector Employment Law, note 27 above, pp 139–40; R v Deputy Chief Constable of the North Wales Police; Ex parte Hughes, note 204 above, at 426–30 and 432 and Zinc Corporation Ltd v Hirsch [1916] 1 KB 541 at 554–7. On the operation of the implied term of trust and confidence during disciplinary proceedings, see 8.23. 210. See 9.57–9.59 and Re Application by Building Workers’ Industrial Union of Australia, note 179 above, at 194; Bond v Cav Ltd, note 40 above, at 366 and Devonald v Rosser [1906] 2 KB 728; cf Browning v Crumlin Valley Collieries, note 16 above, at 528, a decision that is irretrievably bad and should be confined to its facts; M Freedland, The Contract of Employment, note 91 above, pp 89–90. 211. On the meaning of ‘usefully employed’, see Re Carpenters & Joiners Award (1971) 17 FLR 330 and Kidd v Savage River Mines, note 157 above. 212. Coal & Allied Mining Services Pty Ltd v MacPherson, note 36 above, at [16]-[42].

[page 614]

Chapter 10 Termination for Breach and Repudiation The Right to Terminate Introduction and historical background Definitions and key concepts The relationship between repudiation, serious breach and anticipatory breach Termination for Serious Breach Proving the term and the breach The tripartite classification of terms Express contractual and statutory rights to terminate The right to terminate and the opinion of the employer Termination for Repudiation Introduction Readiness and willingness Repudiation based on words or conduct Repudiation based on an erroneous construction of a contract Repudiation based on inability Constructive dismissal and forced resignations Assessing the Seriousness of the Breach or Repudiation The seriousness of the breach or repudiation

Factors relevant in assessing the seriousness Wilful breaches and the intention to repudiate Single breaches, cumulative breaches and the ‘last straw principle’ Consequences of a Serious Breach, Repudiation and an Election No automatic termination of the contract The effect of a serious breach or repudiation on wages The locus poenitentiae and the opportunity to repent The effect on damages and equitable relief Consequences of an affirmation Consequences of a termination of the contract The Election to Terminate or Affirm General principles governing elections The futility and limited utility of electing to affirm The grounds for termination and after-acquired information Time of the election and the effect of delay Exercising express rights to terminate Clarity and communication of the election Inference of an election from conduct Loss of the right to terminate: ‘condonation’ and ‘waiver’ Breach or repudiation by the terminating party

THE RIGHT TO TERMINATE Introduction and historical background 10.1 Historically, the right to terminate an employment contract for breach or repudiation was late to develop and was shaped by the unique statutory

framework that governed the master and servant relationship. Prior to about 1850 the termination of an inferior servant’s service tended to be conceptualised as the discharge from the master’s service rather than as the exercise of a contractual right. The master required the permission of the magistrates to discharge a servant covered by the Master and Servant Acts. It was not until 1817 that it was recognised that a master had a right to discharge a misbehaving servant without that permission.1 Well into the nineteenth century the principal remedies of a master against a misbehaving inferior servant were correcting (whipping or beating) the servant and applying to the magistrates for either an [page 615] order to discharge the servant or that the servant to be sent to the house of correction. The supervisory jurisdiction of the magistrates over the termination of agreements for the performance of work was exercised up until the late nineteenth century in the United Kingdom and well into the twentieth century in Australia: see 1.40–1.43. 10.2 The approach of the general law of contract to breach (which required the identification of a term, a breach of that term and an election to terminate or affirm) that developed through the nineteenth century was largely absent when assessing the right to terminate the service of an inferior servant.2 In the case of inferior servants, from the 1830s the right of a master to end the service arose when the servant engaged in moral misconduct (such as drunkenness or sexual misconduct), was habitually neglectful or was wilfully disobedient.3 For superior servants, the grounds for termination more closely resembled the notion of serious breach and repudiation and, from the mid-nineteenth century, the law governing termination started utilising general contractual notions.4 Until the late twentieth century in the United Kingdom the prevailing theory was that the employment contract could be unilaterally terminated by an employer, a notion that further warped the application of orthodox principles to employment contracts.5

[page 616] Courts have slowly reached the conclusion that the law governing the termination of employment contracts is but an example of the law governing the termination of contracts in general.6 Issues governing the termination of employment contracts for breach and repudiation should be analysed in a manner consonant with those general principles. The application of those principles should have regard to the nature of the contract and the features that distinguish employment contracts from other types of contracts: see 1.5–1.16. Using the key terms defined in 10.7, the principles can be summarised as follows.

The right to terminate for breach or repudiation 10.3 There are two principal sources of a party’s right to terminate the contract. First, termination by the exercise of an express right granted by the contract or a statute. Second, termination by the exercise of an implied right conferred by the common law to terminate for serious breach or repudiation.7 The existence and exercise of other rights to terminate are beyond the scope of this chapter.8 10.4 An employer9 has a common law right to terminate for breach in two circumstances. First, if the employee commits a breach of a condition: [page 617] see 10.16. Second, if the employee commits a sufficiently serious breach of an intermediate term. The seriousness of the breach of the intermediate term is assessed by reference to the nature of the term breached, the actual and likely consequences of the breach and, perhaps, the wilfulness of the breach: see 10.45–10.48. A contractual or statutory right to terminate, if any, may be exercised whenever the preconditions for the exercise of the right are satisfied: see 10.19. An employer has a right to terminate for repudiation in two circumstances. First, if the employee is unable to perform; and second, if the employee is

unwilling to perform, which is another way of saying the employee is refusing to perform: see 10.26. The employee’s refusal (or inability) must be sufficiently serious. It will meet that requirement when the employee is wholly and finally disabled from performing his or her future obligations; or there is a complete or partial refusal to perform a term that, if breached, would give rise to a common law right to terminate: see 10.21–10.32. When an employee commits a serious breach or repudiates the contract then the employer has a right to elect to terminate the contract or affirm it. A termination of the contract occurs when the employer exercises a right to terminate either pursuant to an express contractual or statutory power or by electing to terminate when the employee has committed a serious breach or a repudiation, subject to some minor exceptions: see 10.73.

Avoiding the employment law muddle 10.5 The brief exposition in 10.4 deliberately avoids many of the terms familiar to employment lawyers. There has been an unfortunate pattern in employment cases of using unique concepts when attempting to apply orthodox contractual principles. This practice in part reflects the anomalous historical roots of the law governing the termination of employment contracts. Employment lawyers have developed their own confusing and ambiguous terms, such as ‘serious and wilful misconduct’, ‘summary dismissal’, ‘constructive dismissal’ and ‘condonation’. It is often said that an employer has a right to terminate if the employee engages in serious and wilful misconduct. This test is somewhat misleading. It is not clear if the test applies only to a serious breach, or a repudiation, or both. Wilfulness and intention play different roles according to whether the conduct is a refusal to perform, a repudiation due to inability, a breach of an intermediate term or a breach of a condition: see 10.50–10.52. To apply one test to each of these circumstances ignores the differences between them. [page 618] Summary dismissal is a phrase that is used to refer to both the exercise of a right (terminating with justification) and a breach of the contract (terminating

without justification). The terms constructive dismissal and condonation are unhelpful and vague for the reasons discussed in 10.35 and 10.101. One of the leading employment law cases uses ‘standards of fairness and justice’ to assess the seriousness of the misconduct.10 Cases have repeatedly endorsed the view that there is no fixed rule of law defining the degree of misconduct that will justify a termination.11 Some cases determine whether misconduct has justified the termination without ever identifying the particular term breached or the particular obligation repudiated. In short, in many employment cases the common law principles governing termination of contracts have been applied in a conceptually jumbled manner using inexact terminology, with the result that it is unclear what conduct will justify a termination. 10.6 The common law has developed a precise terminology and classification dealing with all aspects of termination. It is unnecessary and unhelpful to resort to vague terms. Nor is it appropriate to adopt tests and standards that are not consistent with the law of contract or the decisions of the High Court discussed in this chapter. The degree of misconduct justifying termination is fixed by the common law and is ascertainable using the ordinary tests discussed in 10.19, 10.21 and 10.38–10.58. The approach taken in this chapter is to state the law governing the termination of employment contracts using the law governing the termination of contracts in general. However, it must be recognised that the application of those principles should (and in most cases does) have regard to the unique nature of an employment contract and its distinguishing features that are identified in 1.5–1.16.

Definitions and key concepts 10.7 Throughout this text the following terms associated with breach and termination of contract are used. A condition (or essential term) is a term whose breach entitles the employer to terminate. A warranty is a term whose breach does not entitle the employer to terminate. An intermediate term is a term whose breach [page 619]

entitles the employer to terminate only if the breach is sufficiently serious: see 10.14. Warranties and intermediate terms are non-essential terms. A serious breach means a breach of a condition or a sufficiently serious breach of an intermediate term. It has the same meaning as, but is preferable to, the phrase repudiatory breach: see 10.8. A repudiation means conduct that clearly evinces an unwillingness or an inability to perform the party’s contractual obligations where the unwillingness or the inability is sufficiently serious: see 10.21. A renunciation is a type of repudiation arising from an unwillingness to perform. Anticipatory breach is a species of repudiation. It arises when one party repudiates its obligations prior to the performance of any of its obligations and the other party elects to terminate: see 10.10. A justified termination occurs when a party elects to terminate and the other party has committed a serious breach or repudiation. This is often referred to as termination for cause. Unjustified termination and termination without cause have a cognate meaning. Termination of the contract occurs when the employer exercises a right to terminate either pursuant to an express contractual or statutory power or by electing to terminate when the employee has committed a serious breach or a repudiation. There is a distinction between a termination of all obligations under the contract and a termination of the contract in the sense discussed in this chapter. A justified termination may release the parties from their principal obligations, such as the employee’s obligation to serve and the employer’s obligation to pay wages. However, some terms that are intended to operate after those obligations cease to be performed may continue to create enforceable rights and obligations. These terms include restraint of trade clauses, obligations to retain confidences and some obligations to pay remuneration: see 10.76. With these provisos in mind, for ease of reference the phrase ‘termination of the contract’ is used in this text to mean the termination of the principal obligations under the contract. Wrongful dismissal means conduct by the employer that severs the relationship of employment by preventing the employee from continuing to serve the employer. It is a serious breach and a repudiation. A wrongfully

dismissed employee may elect to terminate the contract. Wrongful resignation has a cognate meaning.12 Outside of the phrase ‘wrongful dismissal’, the word dismissal has no common law meaning. The word is often used in statutes to refer to [page 620] termination of the service of the employee without his or her consent, regardless of whether the employee has elected to terminate the contract.13 It usually includes both justified and unjustified terminations, but does not usually include termination by agreement, termination by operation of law or frustration, or termination through the effluxion of time.14 It also will usually cover what is called a constructive dismissal.15 Whether a demotion of an employee is a dismissal depends, in part, on the terms of the statute concerned.

The relationship between repudiation, serious breach and anticipatory breach Repudiation and serious breach 10.8 There are a series of differences between a serious breach of the contract and a repudiation. A breach occurs when an employee has failed to comply with, or is failing to comply with, his or her obligations. The doctrine of repudiation concerns whether an employee will comply with his or her obligations in the future.16 It is a repudiation by the employer to announce that from next fortnight the wages of an employee will be cut, but it is not a breach of the term governing wages until the pay cut takes effect.17 The common law right to terminate for repudiation supplements, and does not displace, any common law or contractual rights to terminate for breach. An employer who seeks to justify the termination of the contract may prove either that the employee was in serious breach or that the employee repudiated; it is not necessary to prove both.18 A repudiation occurring prior

to when the obligation must be performed is not in itself a breach of the contract. Proof of repudiation does not require proof of an actual breach.19 An unaccepted repudiation does not give [page 621] rise to a right to damages whereas an unaccepted serious breach does: see 10.68. Given these differences between a repudiation and a breach, it is suggested that the phrase ‘repudiatory breach’ is confusing and should be avoided.20 10.9 A refusal to perform the contract will often be both a repudiation and a serious breach. A wrongful dismissal is, for example, both a repudiation and a breach of the employer’s obligation to retain the employee in employment for the term of the contract.21 A breach consisting of a past failure to perform is often compelling evidence of a refusal to perform in the future. In Bancks22 the employer repeatedly failed to publish the work of a comic artist as agreed, despite persistent requests by the employee. This was both a breach of the agreement to so publish, and also a repudiation as it evidenced an unwillingness by the employer to perform the contract in the future: [U]nwillingness or inability to perform a contract often is manifested most clearly by the conduct of a party when the time for performance arrives. In contractual renunciation, actions may speak louder than words.23

Anticipatory breach 10.10 Anticipatory breach is a species of repudiation.24 An anticipatory breach occurs when one party repudiates its obligations prior to when its obligations were due to be performed and the other party elects to terminate.25 Anticipatory breaches of employment contracts are rare except in cases, such as Hochster v De La Tour, where a party refuses to permit the employee to commence performing work, or changes its mind after an offer of employment has been accepted.26 The employee can then anticipate the inevitable breach and terminate without waiting

[page 622] for the date that the employer’s performance falls due.27 The anticipatory breach may arise from a refusal to perform or an inability to perform: see 10.27–10.34. The requirement of seriousness must be satisfied: see 10.38–10.49.

Repudiation and notice 10.11 There is a distinction between giving notice and repudiating a contract. The giving of notice is the exercise of a contractual right; the repudiation of a contract is a manifestation of unwillingness to perform the contract. A repudiation is, as Buckley LJ once observed, ‘dehors’ the agreement, not an exercise of a right under it.28 A repudiation of the agreement does not act as the exercise of the right to give notice.29

TERMINATION FOR SERIOUS BREACH Proving the term and the breach 10.12 Every failure by a party to perform an obligation created by a term to the required standard is a breach of contract, subject to the de minimis rule. Minute and entirely inconsequential departures from the contractual requirements are not a breach.30 The employer is entitled to recover damages for any breach.31 The only breaches that can justify a termination of the contract are breaches of conditions and sufficiently serious breaches of an intermediate term. These are called serious breaches. To prove a serious breach of the contract it is necessary to prove three matters: first, to prove the term; second, to prove a failure to perform the obligation created by the term to the requisite standard; third, to prove the required seriousness of the breach. 10.13 As to the first element, it is necessary to identify and prove the term. The term may be express or implied. It must be a promissory term and not a mere representation: see 5.6. If the term breached is said to be an express

term, it must be incorporated by the parties’ signatures, incorporated by notice, incorporated by reference, or incorporated by a [page 623] course of dealing.32 If the term breached is said to be an implied term, it must be implied by law, implied in fact, implied by custom, or an implicit term.33 The terms commonly implied in law that impose obligations on employers and employees are considered in Chapters 7 and 8. As to the second element, a breach occurs when a party has failed to perform an obligation created by a term to the requisite standard or there has been an anticipatory breach of a term.34 The standard of duty varies according to the obligation. Some obligations must be strictly performed; others only require an employee to exercise reasonable care, skill or diligence: see 9.36. It is the employer and the employee who must personally perform the obligations in the contract, subject to the permissible vicarious performance and assignment of obligations: see 6.40 and 9.53. Similarly, it is the employer and employee, or their authorised agents, who must engage in the conduct said to breach or repudiate the contract.35 As to the third element, the required seriousness of the breach depends on whether the term is a condition, an intermediate term or a warranty: see 10.14–10.17. Breaches of different types of terms have different consequences.

The tripartite classification of terms Three different types of terms 10.14 The law relating to the classification of contractual terms has recently changed considerably. For much of the twentieth century there was a bipartite division between conditions and warranties; a breach of the former might give rise to a right to terminate but a breach of the latter would not. In the last decade the High Court has recognised a third type of term called an innominate or intermediate term.36

Whether a breach of a term gives rise to a right to terminate depends in part on whether the term is a condition, an intermediate term or a warranty. Any breach of a condition (or essential term) entitles the employer to terminate.37 A breach of an intermediate term entitles the [page 624] employer to terminate only if the breach is sufficiently serious.38 A breach of a warranty does not entitle the employer to terminate.39 10.15 The characterisation of a term as a condition, intermediate term or warranty is a matter of construction.40 The object is to ascertain the intention of the parties using the ordinary objective approach in contract.41 To ascertain if a term is a condition it is necessary to ask whether the parties intended that every breach of the term, irrespective of its consequences, would entitle the employer to terminate. A condition is a term: … of such importance to the [employer] that [it] would not have entered into the contract unless [it] had been assured of a strict or a substantial performance of the promise, as the case may be, and that this ought to have been apparent to the [employee].42

Consequences of a breach 10.16 A breach of a condition, ‘even if the failure is a trivial one’, gives rise to a right to terminate.43 The parties can agree that a particular term is a condition, even if it is a matter of apparently very little importance.44 However, the less significant a term is in the scheme of the employment, the less likely it will be that it is a condition; and the fact that a breach may result in no damage or no significant damage tends to suggest the term is not a condition.45 The parties may agree that a particular term, which might otherwise be classified as a non-essential term, is a condition whose breach will always give rise to a contractual right to terminate. A breach of such a term does not give rise to a common law right to terminate. A repudiation will not occur when the threatened breach would only give rise to a contractual

[page 625] right of termination and not a common law right to terminate.46 For example, the parties may agree that the late payment of wages by even a minute will give rise to a contractual right to terminate. However, this does not mean that an employer who declares it will pay wages late by a minute is repudiating the contract. 10.17 A breach of an intermediate term will only give rise to a common law or contractual right to terminate if the breach is sufficiently serious. Assessing the seriousness of the breach depends on the matters discussed in 10.38–10.49. Similarly, a repudiation of an obligation created by an intermediate term will give rise to a right to terminate only if it is sufficiently serious according to the same tests. A breach of a warranty, no matter how serious, does not give rise to a right to terminate.47 Nor does a repudiation of an obligation created by a warranty give rise to a right to terminate. The consequences of a breach and repudiation are discussed further at 10.60–10.76.

A characterisation of the implied terms of employment contracts 10.18 There has been relatively little discussion in the authorities about whether terms implied in law in employment contracts should be characterised as conditions or as intermediate terms. What discussion exists is confused by the fact that the law of contract governing termination has evolved over the last 25 years and over time courts have gradually redefined key terms and concepts. Many of the older authorities use an approach that is contrary to the modern approach to the termination of contracts.48 It is suggested that all of the terms implied in law discussed in Chapters 7 and 8 are intermediate terms, other than the implied term of trust and confidence, which is a condition. This issue, and these terms, are discussed at: obedience to orders: see 7.17; duty to use care and skill: see 7.28;

breach of the duty of fidelity: see 7.39; receipt of secret benefits: see 7.100; [page 626] acts incompatible with employment: see 7.137; breach of the implied term of trust and confidence: see 8.21; duty of indemnity: see 8.34; duty to provide work: see 8.49; and duty to take care: see 8.56.

Express contractual and statutory rights to terminate 10.19 Contracts, industrial instruments and statutes sometimes expressly grant a right to the employer to terminate when an employee has engaged in certain defined conduct. Whether a right to terminate arises under the instrument depends on the terms of the instrument. Many use phrases to define the contractual right that are similar to the common law right to terminate for serious breach and the meaning of those phrases is informed by the common law notion.49 Industrial instruments often state that the employer has a right to terminate for ‘misconduct’, ‘inefficiency’, ‘neglect of duty’ or the ‘fault’ of the employee.50 Courts generally interpret such clauses as replicating the common law test rather than granting a right to terminate for a non-serious breach.51 Under the Fair Work Act one issue in unfair dismissal proceedings [page 627] is whether there is a valid reason for the termination. Whether there is a serious breach of the contract, or a repudiation, does not determine if there is a valid reason, though a finding that the conduct would justify summary

termination often goes a long way to resolving that issue.52

The right to terminate and the opinion of the employer 10.20 Whether a breach of the contract has occurred depends on the facts proved. An employee does not breach the contract merely because, in the reasonable opinion of the employer, there has been a breach.53 Some express contractual terms make the opinion or satisfaction of the employer relevant or determinative in assessing if a breach has occurred.54 The duty of good faith may oblige the employer only to exercise the right if it has ‘a reasonable as well as honest state of satisfaction’.55 Sometimes it is a third party who must be satisfied about the matter. In such cases the third party must not act capriciously, arbitrarily or in bad faith.56

TERMINATION FOR REPUDIATION Introduction 10.21 The doctrine of repudiation applies to employment contracts.57 A repudiation occurs when an employee engages in conduct that clearly [page 628] evinces an absence of readiness or willingness, or an inability to perform his or her contractual obligations and the unwillingness or inability is sufficiently serious.58 A repudiation is not the only ground arising from the employee’s or employer’s conduct on which a contract can be terminated.59

The types of repudiation and their consequences 10.22 There are two forms of repudiation. The first is repudiation based on a refusal to perform. A refusal to perform can arise from the words or conduct of the party or can arise from an erroneous construction of the contract. The test applied to determine if there has been a repudiation by a refusal to

perform is whether the conduct of the employee is such as to convey to a reasonable person, in the employer’s position, a renunciation either of the contract as a whole or of a fundamental obligation under it.60 This is sometimes described as conduct that evinces an intention no longer to be bound by the contract or to fulfil it only in a manner substantially inconsistent with the employee’s obligations: see 10.28 and 10.30. Second, repudiation based on inability arises when the employee is wholly and finally disabled from performing his or her essential obligations: see 10.32–10.34. The required intention to repudiate varies according to the type of repudiation: see 10.51. Issues associated with a repudiation uttered in a state of emotional distress are discussed in 11.12. 10.23 A repudiation does not automatically terminate the contract: see 10.60. It gives rise to a right in the innocent party to elect to terminate the contract — called an acceptance of the repudiation; or to reject the repudiation and to continue to perform — called electing to affirm. The principles that apply to the election to terminate after a serious breach apply equally to the acceptance of a repudiation: see 10.77. A repudiation does not give rise to a right of action for damages but it will affect the right of a repudiating party to obtain equitable relief: see 10.68. A repudiation continues to operate until it is accepted, rejected [page 629] or retracted. The consequences of a repudiation and its acceptance or rejection are discussed in 10.69–10.76.

Hochster v De La Tour and dependent obligations 10.24 One of the purposes of the doctrine of repudiation is to permit a party to terminate when faced with a clear refusal to perform and sue for damages without first having to perform the contract or wait until the other party breaches the contract. Repudiation plays a particularly important role in contracts where, as is usually the case in employment contracts, the obligation to pay remuneration is a dependent obligation.61

In Hochster v De La Tour the employer agreed in April 1852 to employ Mr Hochster as a courier, commencing in June 1852. In May 1852 the employer told Mr Hochster that he had changed his mind and would not employ him. Service is ordinarily a condition precedent to the earning of wages and so Mr Hochster could not recover his wages as he never served. Nor was there an actual breach of the contract by the employer until June 1852. The court held that the employer’s action was a repudiation of its obligations and Mr Hochster could terminate the contract in May 1852 and sue for damages.62

Onus, proof and inference 10.25 The onus is on the party asserting a right to terminate for repudiation to prove both the repudiation and the election to terminate. The focus of the evidence in the case of a refusal to perform a condition is naturally on the words or conduct of the party said to be repudiating the contract. This is because it is not necessary to prove that there will be any loss or damage arising from a repudiation of a condition. Where there is an alleged repudiation of an intermediate term, the evidence will also be directed to the likely impact of the expected breach.63 A repudiation of a contract is a serious matter not to be lightly found or inferred.64 Whether an employee has repudiated the contract is a [page 630] question of fact, unless the evidence of repudiation is written, since the interpretation of documents is a question of law.65

Readiness and willingness 10.26 The concept of readiness and willingness is central to the operation of the doctrine of repudiation. Readiness and willingness to perform includes an ability to perform. Willingness means an intent to perform, not a desire to perform or an intent to perform cheerfully; and an inability to perform means the party is unready and unwilling to do so.66 The concepts of unwillingness

and inability to perform are often difficult to disentangle, but it is rarely necessary to make the attempt.67 The absence of readiness and willingness to perform by the employee is central in proving a repudiation has occurred. Proof of the absence of readiness and willingness to perform is a necessary, but not sufficient, element of proving a repudiation.68 Whether a party is ready and willing to perform is a question of fact.69 Generally a party need not be ready and willing to perform until performance is due — an employer need not have the money in the bank ready to pay the next week’s wages in advance of being called upon to pay the wages. Nor is it necessarily a repudiation for an employee to refuse to provide an assurance that he or she will be ready and willing to perform.70 10.27 The absence of readiness and willingness to perform has a series of other effects on the rights of the parties. A party cannot obtain equitable relief to enforce a contract if it is not ready and willing to perform the essential terms of the contract, unless there has been a dispensation from the performance of those terms: see 15.52. In some cases, if an innocent party is not ready and willing to perform the contract, it will be barred from exercising a right to terminate for breach or repudiation: [page 631] see 10.104. After an employer’s repudiation, the employee’s absence of readiness and willingness to perform may amount to an election to terminate: see 10.96–10.99. Once the contract is terminated the parties are discharged from their obligations to remain ready and willing to perform the contract: see 10.73.

Repudiation based on words or conduct Express or implied refusals to perform 10.28 A repudiation based on the words or conduct of a party can either be

express or implied. In employment law the most common express refusal to perform is a wrongful dismissal. An implied refusal is a clear intimation through the party’s words or conduct that it will not perform the contract, or will only perform it in a manner substantially inconsistent with its obligations.71 The words or conduct must be unambiguous; it is not a repudiation to tell an employee that in the future his or her employment might be terminated or to convene a meeting to consider whether to terminate.72 Past breaches of the contract may support the inference that the party will not perform the contract in the future.73

Complete and partial refusals 10.29 The repudiation can consist of a complete refusal to perform all of the party’s obligations under the contract or a partial refusal. A complete refusal will arise when an employee is wrongfully dismissed or wrongfully resigns, or when one party purports to terminate the contract in another manner that the contract does not permit.74 Where there is a partial refusal to perform it is necessary that the requirement of seriousness be satisfied: see 10.38. A partial refusal to perform will be a repudiation if either the party refuses to perform a condition or the party refuses to perform an intermediate term and the refusal is sufficiently serious.75 In Marriott v Oxford and District Co-Operative Society Ltd the employee was a supervisor. His employer [page 632] demoted him to foreman and reduced his pay by £1 per week. His employment conditions otherwise remained unchanged. The employer’s partial refusal to perform the contract was a repudiation.76

Repudiation based on an erroneous construction of a contract 10.30 When a party genuinely and reasonably (but erroneously) believes that

the contract imposes certain obligations, and seeks to implement that belief in the performance of the contract, then the party’s acts may reveal an intention to perform the contract and not repudiate it. Merely holding an erroneous view is not in itself a repudiation. Nor will insistence on the correct performance of the contract be a repudiation of it.77 In Flynn v J C Hutton Pty Ltd the employees were entitled to be provided with clean hats but for many years had worn their own. They did not breach or repudiate the contract when they took off their own hats and insisted on being provided with clean hats.78 10.31 The conclusion that a party has repudiated its obligations should not be lightly inferred.79 People make mistakes; a repudiation can be retracted. For these reasons, where a party genuinely but erroneously adopts and proposes to act on a particular interpretation of an unclear provision, courts are often reluctant to infer that the party is manifesting an intention not to perform the contract.80 The genuineness and reasonableness of the belief are relevant in assessing this intention. An inference of repudiation will be more readily drawn when a party adopts an untenable interpretation81 or persists in an erroneous approach after the error of its ways has been raised by the innocent party.82 [page 633] The genuineness and reasonableness of an employer’s belief is not relevant when its conduct is a serious breach of the contract or is inconsistent with the continuation of the contract. Sometimes an employer believes the employee has repudiated the contract and acts on that belief by purporting to terminate the contract. If the employer is mistaken and the employee had not repudiated, then the employer’s purported acceptance will often be a repudiation.83 Similarly, an employee will wrongfully resign when he or she genuinely, but mistakenly, misinterprets the employer’s act as a breach of the implied term of trust and confidence.84 However, a mistake that is contract affirming, rather than contract denying, may not exhibit the relevant intention. In BearingPoint the employer mistakenly believed that the employee had given notice of his intention to

resign. The employer wanted the employee to remain in employment and sought an opportunity to convince him to change his mind. Informing the employee that it thought he had resigned was not a repudiation.85

Repudiation based on inability 10.32 A party repudiates the contract when he or she is unable to perform its essential obligations.86 Repudiation based on inability occurs either when a party declares an inability to perform the essential obligations (declared inability), or when, by virtue of the party’s position, the party will be unable to perform the essential obligations (actual inability). The declared or actual inability must concern the performance of an obligation that, if not performed, would give rise to a right to terminate at common law for breach.87 Inability to perform a warranty is not a repudiation. The inability must meet the requirement of seriousness: see 10.38–10.49. The inability need not arise out of a deliberate, blameworthy or intentional act of the party: ‘If a man says “I cannot perform” he renounces his contract by that statement, and the cause of the inability is immaterial’.88 [page 634]

Actual inability 10.33 In the case of actual inability it must be shown that the party was wholly and finally disabled from performing the contract at the time when performance was to fall due.89 Actual inability is notoriously difficult to prove. The threatened non-performance must have the effect, if carried out, of depriving the one party of substantially the whole benefit of the other party’s unperformed obligations.90 This requirement may be met in the clearest of cases, such as where an employer disables itself from personally performing the contract by dissolving a partnership.91 But absent an unambiguous disability, it is rare to find such a repudiation based on actual inability in ongoing contracts such as contracts of employment. This is partly because a temporary inability to perform one obligation (such as the obligation to serve or pay wages on time) will not deprive the innocent party of the benefits of

the contract over the remaining term of the indefinite contract.92 It is also in part because the effect of a permanent physical disability is more likely nowadays to be dealt with as a frustration of the contract rather than a repudiation of it.93

Declaration of inability 10.34 An express declaration of inability can arise from a party’s words or conduct. When a party states that it will be unable to perform the contract then the other party can proceed on the basis that the declaration is true and the first party cannot prove that its declaration of inability was untrue.94 In Hochster v De La Tour, the facts of which are discussed earlier in 10.24, the employer told Hochster in May 1852 that he could not commence employment in June 1852 and Mr Hochster immediately elected to terminate. The employer was not permitted to raise as a defence that prior to June it might have changed its mind. The decision established that a renunciation, when acted upon, became final: ‘if a man proclaimed by words or conduct an inability to perform, the [page 635] other party could safely act upon it without having to prove that when the time for performance came the inability was still effective’.95

Constructive dismissal and forced resignations 10.35 ‘Constructive dismissal’ is an unfortunate phrase and is best avoided. It is confusing and unhelpful. The phrase was developed in the United Kingdom in the 1970s to deal with a particular statutory problem concerning the meaning of the word ‘dismissal’. That problem arose in part from the reluctance of English courts to embrace the bilateral termination theory that has been a feature of Australian law since at least 1945. In Australia: … [the] expression is not recognised by the common law, and there are no applicable statutes here extending the definition of dismissal. In most Australian cases where there has been limited reference to ‘constructive dismissal’, the reference has essentially been to conduct on the part of

the employer which would constitute repudiation of the contract.96

10.36 The concept of constructive dismissal might be harmless enough if it were only used as a colloquial synonym for repudiation, as it is in most situations.97 However, other cases use it to refer to conduct of an employer that justifies a termination of the contract for a breach of a condition or a sufficiently serious breach of an intermediate term;98 or it is used as a breachrepudiation hybrid that appears to merge the elements of various concepts.99 It might be thought, then, that constructive dismissal is a useful term for any conduct of an employer that justifies termination by the employee.100 The problem with such an approach is that repudiation and serious breach are different: the role of intention is different; the ability [page 636] to cure the effects of the conduct is different; and the effects of past and cumulative breaches are different.101 10.37 There is a difference between threatening to dismiss an employee in breach of contract and threatening to terminate the contract in accordance with its terms. The former is a repudiation of the contract; the latter is the exercise of a right under the agreement.102 Requiring an employee to relinquish an agreed position will be a breach of the contract: see 6.15. This includes placing the employee in a position where he or she had no practical alternative but to accept the change.103 Accepting the demotion rather than resigning does not alter the fact that a breach has occurred.104

ASSESSING THE SERIOUSNESS OF THE BREACH OR REPUDIATION The seriousness of the breach or repudiation 10.38 The right to terminate a contract arises when there has been either a breach of a condition, a sufficiently serious breach of an intermediate term, or

a repudiation. A breach of a condition need not be serious to give rise to a right to terminate. Any breach of a condition, subject to the de minimis rule, will give rise to a right to terminate: see 10.16. The common terms implied in law in employment contracts are intermediate terms, except for the implied term of trust and confidence which is a condition: see 10.18. The overwhelming majority of employment law cases concerning the justification of a termination for breach concern a breach of an intermediate term rather than a breach of a condition. 10.39 The right to terminate for repudiation and the right to terminate for a sufficiently serious breach of an intermediate term both require that the misconduct be serious. Conduct that satisfies this requirement is called serious misconduct. In assessing if the misconduct is sufficiently serious, few cases distinguish between termination for repudiation and termination for breach of an intermediate term and on one view there is [page 637] no difference.105 In the discussion below, no distinction is drawn between these rights. However, there do appear to be some differences and they are noted in 10.44.

The various tests stating the required degree of seriousness 10.40 There are various tests that have been applied to determine whether the act of the employee is sufficiently serious to justify a termination for a repudiation or a breach of an intermediate term. It has been said that the serious breach or repudiation must go to the root of the contract;106 or be an anticipated fundamental breach of an essential term depriving the other party of substantially the whole benefit of the contract;107 or that the absence of readiness or willingness must have a fundamental effect on the fair carrying out of the bargain as a whole.108 Each iteration deals with a slightly different situation. There is probably no one test and each case is highly fact specific.109

One approach that has garnered considerable support in employment cases is that to justify a termination the conduct must be ‘so seriously in breach of the contract that by standards of fairness and justice the employer should not be bound to continue the employment’.110 The notion that the seriousness of the breach should be measured against ‘standards of fairness and justice’ does not sit easily with the law of contract.

There must be an identified term breached or repudiated 10.41 ‘Serious misconduct’ covers a multitude of sins. However, ‘it is necessary to identify the “sin” which the employer complained of’111 and [page 638] that wrong must relate to the contract. There can be no serious breach or repudiation unless it is clear that there has been or will be a breach of a particular, identified and proven term.112 Most conduct that will be a serious breach of an intermediate term will also be a repudiation, but it is possible that a serious breach will not be a repudiation. An employer need not prove the conduct was both a serious breach and a repudiation.113

The onus of proof 10.42 The party alleging that it has the right to terminate bears the onus of proving the serious breach or repudiation.114 Whether the misconduct is sufficiently serious to justify termination is a question of fact.115 An employer seeking to prove that misconduct meets this high standard carries a heavy burden.116 The misconduct must be proved on the balance of probabilities. Often the seriousness of the allegations made against the employee will justify the conclusion that the weight of the evidence required to satisfy the court must rely on more than inexact proofs, indefinite testimony, or indirect inferences.117 The gravity of the consequences flowing from a finding of misconduct dictates that findings of serious breach or repudiation should not be made lightly.118

The seriousness of the repudiation 10.43 A repudiation can consist of an absence of readiness or willingness to perform all of the employee’s obligations. Declared or actual inability must concern the performance of an obligation which, if not performed, would give rise to a right to terminate at common law for breach.119 [page 639] A repudiation can also consist of either a complete or a partial refusal to perform the contract. A complete refusal to perform is known as a wrongful dismissal or a wrongful resignation. When an employee is wrongfully dismissed the requirement of seriousness is satisfied as it is a clear indication that the employer shall not perform any of its future obligations.120 Similarly, a resignation other than in accordance with the terms of the contract is ordinarily a repudiation.121 10.44 Whether a partial refusal to perform the contract amounts to a repudiation is assessed by reference to the type of obligation that the employee refuses to perform. The nature of the prospective breach must be such that, if it were an actual breach, the employer would be entitled to terminate under the common law. A repudiation will not occur when the threatened breach would only give rise to a contractual right to terminate in circumstances in which there would be no common law right to terminate.122 The right to terminate for a repudiation will therefore only arise when a party has repudiated a term that is at common law a condition123 or an intermediate term that, if it were breached, would be sufficiently serious to justify a termination.124 A prospective breach of a term classified as a warranty (a non-essential term) cannot give rise to a right to terminate: the repudiation must be of the whole contract or one of its essential terms.125 A refusal to perform [page 640]

a warranty may be relevant as evidence of a broader unwillingness or inability to perform the contract as a whole or a part thereof. In such a case it is the broader unwillingness or inability, rather than the refusal to perform the warranty, that is determinative: see 10.55.

Factors relevant in assessing the seriousness 10.45 In accordance with the general law of contract, in assessing whether the conduct is sufficiently serious to justify a termination courts take into account the nature of the contract and the relationship between the parties, the nature of the term, the kind and degree of the breach, and the consequences of the breach for the other party.126 The relevance of the wilfulness of the conduct is discussed in 10.50–10.52.

The nature of the breach 10.46 Mere misconduct is not sufficiently serious to justify a termination.127 The conduct must be beyond all dispute a violation of, repugnant to and incompatible with the contract,128 and make the continuation of the performance of the contract impractical.129 The seniority and duties of the employee are relevant factors in assessing the seriousness of the breach. Conduct by a managing director that is repugnant to and incompatible with the duties of that position may not be as serious if committed by a junior employee with more limited responsibilities.130 Although the test applied remains constant in each case, the application of the test to similar conduct may yield different conclusions according to these factors. Care should, therefore, be exercised in the application of cases in this field. 10.47 When assessing the seriousness of the conduct it is important to place it in the context of the contract and the relationship between the parties. Conduct that may be serious enough to justify the dismissal of a new employee without a demonstrated history of fidelity and achievement may not justify the termination of a longstanding, loyal employee who [page 641]

has exhibited high standards of performance.131 A breach that is transient in effect may not be sufficiently serious to justify a termination.132

Seriousness and the consequences of the breach or repudiation 10.48 The actual and foreseeable financial consequences of a breach of an intermediate term and the subsequent termination are relevant to assessing its seriousness.133 A breach without any proved loss is less likely to be serious.134 The consequences of the breach are not determinative in assessing the seriousness of the conduct. To be serious misconduct the conduct itself must be serious and not only the conduct’s consequences.135 Remuneration plays a central role in employment contracts; a reduction in the employee’s remuneration is almost always a sufficiently serious breach and a threat to reduce remuneration in the future is almost always a repudiation.136 When a party has breached the contract the other party has three possible rights: a right to terminate if the conduct is sufficiently serious, a right to damages, or a right to an order for equitable relief. The fact that the innocent party is confined to the remedies of damages and equitable relief may be a material factor in deciding the seriousness of the breach, particularly if damages will not be an adequate remedy.137 These principles are illustrated in employment law by the ease with which courts reach the conclusion that a breach is sufficiently serious when the damages are not recoverable or are unquantifiable, such as when the employee is demoted without a pay cut, or there has been a change in the location of the employment, or the employer has refused to provide the agreed work without reducing the employee’s pay.138 [page 642] 10.49 A breach may have serious consequences for both the employer and the employee. The financial consequences of a termination for the employee may be relevant in assessing whether the employer’s conduct is serious enough to justify termination by the employee.139 It is widely recognised that there is an element of distress in every termination and that the dignity and self-worth of

an employee are partly derived from employment.140 The stigma associated with a summary dismissal often has a detrimental effect on the employee’s reputation and career prospects.141 Damages are not ordinarily recoverable for these non-financial losses.142 There is some support for the view that these non-financial consequences of a termination for the employee are relevant in assessing whether the employer’s conduct is serious enough to justify termination by the employee.143

Wilful breaches and the intention to repudiate 10.50 The role of wilfulness and the requisite intention is complex in employment law. It differs according to whether a serious breach or a repudiation is alleged, the type of repudiation alleged and the obligation alleged to have been breached or repudiated. Conceptually each of these matters is quite distinct, but many employment law cases fail to properly distinguish between them. The relevance of the state of emotional distress of the parties and the wilfulness and intention is considered in 11.12. Pursuant to a range of statutes, an employee who engages in conduct that is both serious and wilful is excluded from the benefits of certain statutory benefits, such as workers’ compensation benefits, notice and long service leave payments.144 [page 643]

Intention and repudiation 10.51 In the case of repudiation by a refusal to perform or declared inability, the test is whether the conduct of the employee is such as to convey to a reasonable person, in the position of the employer, renunciation either of the contract as a whole or of a fundamental obligation under it.145 The test is objective.146 It is not necessary that the employer prove that the employee held a subjective intention to repudiate: ‘the issue of repudiation turns upon objective acts and omissions and not on uncommunicated intention’.147 In other words, to prove a repudiation it is not necessary for the employee’s conduct to be wilful.148 An employee’s subjective intention to continue in

employment cannot prevent the conclusion that the employee’s acts, objectively considered, evince an intention to repudiate.149 In the case of repudiation by actual inability to perform, the intention to repudiate is not relevant. However, the motive or subjective intention of the employee is not completely irrelevant. All of the circumstances are taken into account in determining if there is a refusal to perform: … this means that motive, while irrelevant if relied upon solely to show the subjective intention of the [employee], may be relevant if it reflects something of which the [employer] was, or a reasonable person in his

[page 644] or her position would have been, aware and throws light on the way the alleged repudiatory act would be viewed as such by a reasonable person.150

Wilfulness, intention and breach 10.52 It is not necessary to prove that an employee intended to commit a serious breach of a term, unless the particular term (such as one prohibiting fraud) requires that intention to breach be proved. A breach of the implied term concerning the obedience to directions only occurs when the employee wilfully disobeys a direction.151 There are authorities that state that to justify any termination for breach the employee’s conduct must be serious and wilful.152 It is suggested, however, that this proposition is not correct. An employee may accidentally and unintentionally commit a breach of the implied duty to perform his or her duties with reasonable care: see 7.25 and 7.26. Similarly, honesty or good faith is not a defence in an action against the employee for breach of the duty of fidelity.153 Nor is it necessary to prove an intention to breach the implied term of trust and confidence.154 As an unintentional breach of these terms can occur, a serious breach causing untold damage can occur without an intention to breach. If the captain of the Exxon Valdez negligently but unintentionally ran the tanker aground causing losses to his employer in the order of $3 billion then surely his employer would have grounds to summarily dismiss

him.155 10.53 There are at least three sound bases for taking the wilfulness of the conduct into account. First, a wilful, deliberate flouting of an intermediate term may evidence a refusal to perform a fundamental [page 645] term in the future.156 Second, some express terms of conduct permit termination for wilful misconduct.157 Third, the wilfulness of the conduct may be relevant in assessing the seriousness of a breach of an intermediate term.158 If the employee’s conduct is wilful then it is more likely to be sufficiently serious to justify a termination. The obverse also holds true. Wilfulness in this sense does not connote conduct that is criminal or immoral.159 Wilful misconduct occurs when the employee knows that the conduct is wrong yet intentionally performs the act regardless of, or with reckless indifference to, the consequences.160 It includes a ‘deliberate flouting’ of the terms and conduct pursuant to a deliberate design.161 It does not include thoughtless, inattentive conduct and mere unsound judgment.162 An employee who honestly contests the lawfulness of a direction may not be wilfully disobeying it;163 nor will an employee who believes that he or she is complying with the contract or exercising a right under it.164 It has been said that an employee may not wilfully breach a term by exercising unsound judgment in a conscientious and honest manner.165 It is the employee’s misconduct that must be wilful, not [page 646] the employee’s conduct.166 Wilful misconduct focuses on the subjective intent of the employee.167

Single breaches, cumulative breaches and the ‘last

straw principle’ Single breaches 10.54 It is sometimes said that it is only in exceptional circumstances that a single, isolated breach of an employment contract will justify termination.168 It is suggested that whether such an act justifies a termination depends on the term breached and the nature of the breach applying the ordinary tests.169 First, a single breach of a condition will justify the termination. This will include a single breach of the implied term of trust and confidence: see 7.137 and 8.21. Second, a single breach may evidence a refusal to perform the contract in the future and constitute a repudiation.170 A wrongful dismissal is such a single breach. Outside of these two areas, courts have repeatedly emphasised that isolated conduct will rarely be sufficiently serious to justify a termination.171 Employees are human; they err. This approach has been applied across a range of breaches by employees, including acts of negligence,172 ill temper or obscene language,173 disobedience or insubordination.174 Even [page 647] some vdishonest breaches may not justify a termination.175 Single acts that justify termination are usually acts the character of which ‘is beyond all dispute a violation of the confidential relation and a breach of good faith towards the master’.176 They include acts such as fraud or taking a bribe.177

Cumulative breaches and the right to terminate for breach 10.55 There is a principle — in employment law sometimes called ‘the last straw principle’ — that addresses the somewhat complex relationship between a right to terminate, repeated breaches of the contract and affirmation following a serious breach or repudiation. The effect of repeated breaches depends, in part, on whether the right to terminate arises from the breach or from a repudiation.

A right to terminate for breach does not arise from a breach of a warranty: see 10.16. An employer cannot justify a termination for breach (as opposed to termination for repudiation) by proving repeated and persistent breaches of warranties. When the employee has committed a serious breach and the employer has elected to affirm, an employer cannot justify a later termination by relying only on the earlier breach. This principle, sometimes called condonation, is discussed in more detail in 10.100–10.103. This principle is subject to at least two provisos. First, if the employee is committing a continuing breach then the affirmation does not extinguish the right to terminate: see 10.71. Second, a further serious breach creates a new right to terminate, even if it is of the same nature as the breach that was the subject of the affirmation: see 10.71.

Cumulative breaches and the right to terminate for repudiation 10.56 Persistent, repeated non-serious breaches may be relevant to a right to terminate for repudiation. A refusal or failure to perform, even if not a breach of a condition or an intermediate term, may manifest an unwillingness to perform in such circumstances that the employer is entitled to conclude that the contract will not be performed substantially according to its requirements.178 This issue arises in a series of contexts. The right to terminate for a repudiation is lost when one party repudiates the contract and the other party elects to affirm. The right to [page 648] terminate revives when there is a continuing repudiation or subsequent repudiation.179 10.57 A party may engage in a course of conduct that evidences a refusal to perform the contract by adopting an implacable position in relation to a nonessential term. In Associated Newspapers v Bancks the newspaper contracted with Bancks to produce a Ginger Meggs cartoon weekly. The employer promised to publish the cartoon on the front page of its comic section. When the cartoon was published inside the comic section, Bancks protested, yet the employer failed three times to correctly publish the cartoon. Even if the

employer’s promise was not a condition, the court held Bancks was entitled to terminate the contract because of the repeated failures to perform the contract: The [employer] made the original change without consulting the [employee]. It maintained that it was entitled to do so despite his protests. On 26th February there had been three publications in breach of the contract and several more were intended. [The employer’s] promise to see what he could do was vague, and it was accompanied by an intimation that if anything was done it would be done as a matter of grace and not of right. This evidence all points and points only to a refusal by the [employer] to perform [the contract].180

In short, past breaches might evidence an intention not to perform in the future. Such a conclusion is a question of fact in each case.181 Notwithstanding the past breaches, there may be other evidence that needs to be weighed in determining the intention of the alleged repudiator. In BearingPoint Australia Pty Ltd v Hillard the employee was entitled to six months’ notice. He resigned. His employer wrote to him saying that it wanted him to change his mind, expressing a desire to have positive discussions with him to convince him to stay but removing him from active work. After a few days on garden leave the employer sought to meet with him and he refused. The employee alleged that sending him on garden leave was a serious breach or a repudiation and purported to terminate the contract. The court held that even if sending him on garden leave was a breach, it was not a repudiation. The employer was clearly evincing an intention that the employment continue and was treating the contract as remaining on foot.182 [page 649]

The last straw 10.58 Discontinuous, irregular breaches by the employee will give rise to a right to terminate for repudiation if the past and present conduct judged cumulatively evinces an intention to no longer be bound by the contract.183 The employer may rely on past serious breaches that it has ‘waived’ by electing to affirm which, taken together with the final act, evince the relevant intention. The effect of the affirmation is to extinguish the immediate right to terminate in reliance on the breach; it does not render the breach a nullity. Even after an affirmation:

… the act of misconduct, however, does not then disappear and become irrelevant when further misconduct occurs. It remains and makes up the continuing history and record of a man’s service. That record may always be referred to for the purpose for which the company now points to it and the presence of incidents such as I have described will always be a relevant factor to be weighed in the balance by an employer when he comes to consider whether or not a further breach or other act or misconduct should not bring about a dismissal.184

The earlier acts relied on need not be of the same nature as the last straw. It will, however, be easier to conclude that the employee is evincing an intention to no longer be bound by the contract when the earlier acts and the final act are of the same character.185 10.59 The final act — or last straw — relied on must be a breach, subject to one exception mentioned below. It need not be a breach that, considered separately, would justify termination.186 The final act must not be utterly trivial.187 There is some support for the view that when the cumulative acts are said to be a breach of the implied term of trust and [page 650] confidence then the last straw need not be a breach, or unreasonable or blameworthy conduct: The only question is whether the final straw is the last in a series of acts or incidents which cumulatively amount to a repudiation of the contract by the employer. The last straw must contribute, however slightly, to the breach of the implied term of trust and confidence.188

CONSEQUENCES OF A SERIOUS BREACH, REPUDIATION AND AN ELECTION No automatic termination of the contract 10.60 As a general rule a serious breach or repudiation does not automatically terminate an employment contract.189 An election to terminate by the innocent party is almost always necessary. The rule applies to both a serious breach190 and a repudiation.191 The rule against automatic termination governs employment contracts, despite some suggestions to the contrary.192

The rule applies to the conduct of both employers and employees.193 There are at least four circumstances in which an election to terminate is not necessary. First, some contracts automatically terminate on the occurrence of an event within one party’s control. Such terms are rare [page 651] and are narrowly construed.194 Second, an election will not be necessary if the contract is terminated by the operation of a force majeure or similar clause. These clauses, uncommon in employment contracts, usually provide that if a specified event beyond the control of the parties occurs (such as a debilitating illness) then the contract automatically terminates.195 Third, in specified term and specified task contracts the contract will automatically terminate by the effluxion of time or on the occurrence of a particular event. When the time elapses, or the event occurs, it is not necessary for one party to elect to terminate.196 Fourth, most contracts give the parties a right to terminate by giving notice. The exercise of such a right does not depend on the existence of a right to terminate for serious breach or repudiation, unless the contract expressly specifies otherwise.

The effect of a serious breach or repudiation on wages 10.61 When an employee commits a serious breach or repudiation the employer may elect to terminate or affirm the contract. The consequences of an affirmation are discussed in 10.69–10.72 and the consequences of a termination are examined in 10.73–10.76. Some of the parties’ obligations under the contract are altered during the period between the serious breach or repudiation and the employer’s election. This period may only be momentary if the employer immediately terminates the contract on discovery of the employee’s breach or repudiation; in some cases it may last for years.197 The employee’s entitlement to wages largely depends on whether the employee continues to serve the employer after the serious breach or repudiation.

Earning wages where the service continues

10.62 An employee who commits a serious breach or repudiation and continues to serve the employer will continue to earn wages. In Boston Deep Sea Fishing and Ice Co v Ansell, unbeknownst to the employer, Mr Ansell committed a serious breach of the contract. He continued to earn wages for a further nine months up until the time the employer discovered [page 652] the wrongdoing and elected to terminate the contract.198 Similarly, in Rigby v Ferodo Ltd the employer committed a serious breach by unilaterally reducing the remuneration of the employees. The employees continued in the employer’s service and were entitled to earn wages.199

Earning wages where the service is terminated 10.63 Although an unaccepted repudiation or serious breach does not ordinarily release the parties from their performance obligations,200 a serious breach or repudiation is not completely without legal effect prior to an election to affirm or terminate. A serious breach or repudiation by an employer will usually also be accompanied by a refusal by the employer to permit the employee to continue to serve (a wrongful dismissal). A wrongful dismissal terminates the employment relationship.201 A wrongfully dismissed employee is relieved of the obligation to serve when his or her employer expressly or impliedly intimates that further service is dispensed with, unnecessary or no longer requested. Telling an employee that he or she is dismissed will be such an intimation. It is not necessary for a wrongfully dismissed employee to attend the premises and attempt to perform a nugatory act, such as trying to work.202 10.64 Ordinarily, it is the service of the employee that earns wages under a contract of employment. A wrongful dismissal prevents that service from being rendered and consequently prevents the employee from earning wages.203 This is an application of the ordinary contractual principle that a party cannot earn the contract price when cooperation by

[page 653] both parties is required to allow the innocent party to earn the contract price.204 As well as being a repudiation, a wrongful dismissal is also a breach of the obligation of the employer to retain the employee in its service for the term of the engagement.205 In rare cases an employee does not earn wages or remuneration as the result of serving the employer. Wages may continue to be payable after a wrongful dismissal when the employer’s obligation to pay is independent of the performance of service under the contract.206 Similarly, the right of an officer to be paid the emoluments of office may arise by virtue of holding the office, rather than performing service or carrying out the functions of that office. The officer’s right to continuing payment may survive his or her wrongful removal from the office.207 Subject to an express provision to the contrary, if an employee has a right to be paid accrued and payable entitlements, that right is not lost when the employee commits a serious breach or repudiation that has not been accepted by the employer.208 Even though actual service is not required, to preclude the inference that the employee is electing to terminate the employee must remain willing and able to serve the employer. An inability may be evidenced by accepting incompatible employment or suing for damages for wrongful dismissal rather than seeking specific performance: see 10.96–10.99.

Constructive service 10.65 There was once a view that when an employee was wrongfully dismissed the dispensation with the requirement to serve (or the prevention of performance) was deemed to be the same as service and the employee would continue to earn wages.209 This approach is incorrect. The law does not deem the employee’s post-dismissal willingness and ability to perform the contract to be the same as service for the employer.210 This comports with the general principle that where there is a dispensation [page 654]

with or prevention of performance of a condition precedent to the earning of the contract price then the contract is not enforced on the basis that the condition has been actually fulfilled.211

The locus poenitentiae and the opportunity to repent 10.66 A repudiation continues until the innocent party elects to affirm or terminate, or the repudiation is retracted, or the repudiation becomes an actual breach as the time for performance has arrived. Assuming the time of performance of the repudiated obligation has not arrived, the employee may retract a repudiation at any time prior to the exercise by the employer of the right to terminate the contract.212 Between the repudiation and the time of any acceptance there is a period of repentance (locus poenitentiae) during which the repudiating employee may change his or her position. Acceptance of the repudiation by the employer will prevent a later retraction.213 In Norwest, where the employee was the innocent party, the employer repudiated the contract by giving one month’s notice instead of 12 months’ notice, and then a week later changed its mind before the employee elected to terminate. Cumming-Bruce LJ observed that the employer’s repudiation gave the employee a right to terminate the contract and then stated: But if [the employee] did not communicate his acceptance, then the contract continued to run and during the continued currency of the contract it was open to the company, in the absence of communicated acceptance, to change their stance and to withdraw the threat of breach and to communicate to the employee their intention to comply with the terms of the contract.214

[page 655] The principles governing the retraction of repudiations also apply when it is the employee who has repudiated. In Tullett Prebon (Australia) Pty Ltd v Purcell the employee repudiated by giving short notice. The employer did not accept the repudiation. Even though the employee’s repudiation terminated the employment relationship, the contract remained on foot. The employee continued to be obliged to serve and the employer was obliged to be willing and able to perform its obligations. If the employee had retracted the

repudiation the employer would have been required to accept him back in its service.215 10.67 When an employer repudiates the contract by dismissing the employee and then retracts the repudiation, both employer and employee are obliged to continue performance of the contract and the employee’s service will continue unbroken by the dismissal and retraction.216 The employee must be given reasonable notice of the employer’s retraction so as to enable him or her to recommence performance.217 In contrast, a serious breach cannot be retracted or cured, even by later remorse or performance of the promise that remedies the harm.218 For example, if an employee has a contractual right to terminate for late payment of wages, the fact that the wages are subsequently paid does not mean that the employee thereby loses the right to terminate. In some cases an implied obligation of good faith, or principles governing unconscionability, may prevent a party taking advantage of the situation.219

The effect on damages and equitable relief 10.68 A repudiation is not a breach of contract until it is accepted by the innocent party. Where the contract is repudiated the innocent party has no cause of action for damages arising from that repudiation unless there is an election to terminate.220 A serious breach of the contract sounds in [page 656] damages, whether the innocent party terminates or not. Usually those damages will be small or nominal when the employee elects to affirm and continues to serve the employer, but they need not be.221 A party cannot obtain equitable relief to compel performance of the contract unless it has performed its essential contractual obligations in the past and is ready and willing to perform those essential obligations in the future. A party who has committed a serious breach or a repudiation of an essential obligation cannot obtain an order for specific performance of the

contract. For example, a restraint of trade clause will not be enforced against an employee who has been wrongfully dismissed.222

Consequences of an affirmation 10.69 An affirmation will have the same consequences on the performance obligations of the parties whether it follows a serious breach or a repudiation.

The loss of the right to terminate and once and for all breaches 10.70 The effect of an affirmation depends on distinguishing between, on the one hand, a once and for all breach and, on the other hand, a continuing breach.223 Where an employer has promised to do a specific act at a specific time (such as pay wages one particular Friday) its failure to do so results in one breach. The continued failure to perform the act is no more than a failure to rectify a past breach. In such a case, where the employee affirms the contract after the breach has occurred there cannot be later reliance on that once and for all breach to justify a termination.224 The election to affirm is final. It is a permanent restriction on the right to terminate in sole reliance on the past serious breach of which the employee has the requisite degree of knowledge. If the innocent party does not know of the past breach an affirmation will not affect the party’s right to terminate arising from that unknown serious breach.225 The right to terminate may be revived after an affirmation where there is a further serious breach or repudiation justifying termination. Further, a right to terminate for serious breach of an obligation may arise notwithstanding an employee’s affirmation following repudiation of that obligation. For example, a right to terminate for repudiation will arise [page 657] when the employer proposes not to pay a bonus payable on a particular date. If the employee elects to affirm, once the date has passed and the employer has not paid the bonus the contract will have been breached and the employee will be entitled to sue for damages or, if it is a serious breach, terminate for

breach, notwithstanding the earlier affirmation.226

The loss of the right to terminate and continuing breaches 10.71 A continuing breach arises when a party promises to maintain a state of affairs and fails to fulfil the promise. The failure of an employer to provide a promised car to the employee is such a continuing breach. In such cases there is a further breach at each moment that the party fails to comply with the contract. An affirmation will only relate to the breaches that occur prior to the election and will not extinguish the right to terminate that subsequently arises after the election while the continuing breach persists.227 Consequently, if an employee is wrongfully dismissed and elects to affirm, but the employer continues to reject the offered service of the employee after the affirmation, the employee has a continuing right to affirm or terminate in response to the continuing breach.

Damages, service and wages after an affirmation 10.72 A party may recover damages arising out of the breach even if it elects to affirm.228 In contrast, a party cannot recover damages arising out of a repudiation if it elects to affirm. In this respect an unaccepted repudiation is ‘a thing writ in water and of no value to anybody: it confers no legal rights of any sort or kind’.229 Both parties are obliged to continue to perform the contract when the innocent party elects to affirm. However, for the reasons discussed in 10.63, after an affirmation the employee will not ordinarily earn wages if the employment relationship has been terminated. [page 658]

Consequences of a termination of the contract Effect on contractual obligations

10.73 The principal effect of a termination of the contract is that, subject to terms that may survive the termination, the parties are discharged from their obligations to perform their contractual duties and any obligation to be ready, willing and able to perform those duties.230 After termination the employee need not serve and the employer need no longer pay wages. The termination will take effect from the time of the election to terminate, not the time of the repudiation or breach: [The] wrongful repudiation of the contract by one party, being accepted by the other, and operating as a determination of the contract from that time, that is, from the time the party who is sinned against elects to treat the wrongful act of the other as a breach of the contract, which election on his part emancipates the injured party from continuing it further.231

The contract is not rescinded ab initio (from the beginning) where the termination has arisen from a repudiation or a breach.232 The parties are absolved from further performance of duties under it.233 Claims for damages can still be made under the contract after termination, though specific enforcement and injunctive relief is unavailable after termination.234 A valid exercise of a right to terminate is final: a party cannot, without the consent of the other party, withdraw the exercise of that right.235 Where there is a consensual withdrawal of the election after the termination then the former contract is abandoned and a new contract [page 659] is formed.236 Some statutory schemes alter this contractual approach by providing for reinstatement or re-employment to occur after the termination of the contract.237

Effect on accrued rights 10.74 The rights the parties have acquired under the contract are not divested or discharged by the termination, subject to a term of the contract or agreement to the contrary.238 As Dixon J explained: When a party to a simple contract, upon breach by the other contracting party of a condition of the contract, elects to treat the contract as no longer binding upon him, the contract is not [terminated] as from the beginning. Both parties are discharged from the further performance of

the contract, but rights are not divested or discharged which have already been unconditionally acquired. Rights and obligations which arise from the partial execution of the contract and causes of action which have accrued from its breach alike continue unaffected.239

Wages and other remuneration that have accrued to the employee remain payable notwithstanding the termination,240 unless that remuneration is forfeited under a statutory or express contractual provision.241 An accrued right to damages will similarly survive the termination of the contract.242 [page 660] 10.75 Employees remunerated by trailing commissions may, depending on the terms of the contract, be entitled to continue to accrue rights and receive payments after the termination of the contract for work performed prior to the termination. The cases in this field largely turn on whether the employee has met the stipulated conditions for the earning of remuneration. On the one hand are the cases concerning contracts that remunerate the employee for performing certain work (such as introducing new customers) and provide that remuneration will be paid on the occurrence of an event that may not occur until after the termination of the contract (such as the payment by the customers). When the employee has performed the condition precedent to the payment of remuneration he or she has a right to continue to recover the payment notwithstanding the termination of the contract.243 On the other hand are the cases where the terms of the contract make it clear that the right to any remuneration will terminate with the employment, or that the conditions necessary to earning the remuneration (such as servicing customers) cannot be met once the employment has terminated.244

Terms operating after termination 10.76 Certain terms of the employment contract continue to operate after the termination of the contract. Whether a term has such an operation depends on the intention of the parties. Procedural terms that do not create primary duties are often intended to operate after the termination of the contract.245 Liquidated damages clauses, arbitration clauses, choice of forum clauses and exclusion clauses commonly survive termination.246 A term granting a right

to challenge a termination under a [page 661] disciplinary procedure may also survive termination in some cases.247 It is doubtful whether the implied contractual duty concerning confidentiality (as opposed to the equitable duty of confidence) survives the termination of the contract.248 In employment law the terms operating after the termination that generate the most litigation are terms in restraint of trade.249 It is common for contracts of employment to contain clauses that restrain an employee from disclosing confidential information or competing with the employer after the termination of employment. Such clauses are clearly intended to survive the termination. However, where the termination is the result of a serious breach or repudiation by the employer, restraint of trade clauses are rarely enforceable by the employer,250 even when the contract clearly states that the term is intended to apply notwithstanding the reason for the termination.251 When an employer seeks an injunction to enforce a post-employment restraint that applies to a wrongfully dismissed employee then the employer faces an additional hurdle: parties who seek equitable relief ‘cannot obtain such relief unless they allege and prove that they have performed their part of the bargain hitherto’.252 [page 662]

THE ELECTION TO TERMINATE OR AFFIRM General principles governing elections 10.77 Where an employer commits a serious breach or repudiation, the employee has the right to choose (elect) to either terminate the contract or to continue the performance of the contract (to affirm).253 An election to

terminate is usually called an ‘acceptance’ of the breach or repudiation.254 Electing to affirm a contract in response to a wrongful dismissal or wrongful resignation is often futile, or of limited utility, in employment: see 10.80–10.84.

The right to elect and the nature of an election 10.78 The employee (the innocent party in this example) cannot be forced to elect to terminate, notwithstanding the futility, or limited utility, in the exercise of any election. The fact that the contract is not able to be specifically enforced does not mean that the employee must elect to terminate.255 Nor does it mean that there is no right to elect.256 An election is an intentional act, done with knowledge, whereby an employee abandons a right by acting in a manner inconsistent with that right. It is a choice between two inconsistent alternatives.257 Choosing to affirm is inconsistent with the later exercise of the right to terminate relying on the same breach or repudiation.258 An employee cannot choose to terminate part of the contract and affirm other parts.259 Whether the words or conduct of the employee amount to an election to affirm or terminate is a question of fact. Where the only evidence of the election is documentary, then the interpretation of those documents is a [page 663] question of law.260 The ordinary objective approach is used to ascertain the intention of the employee; that is, whether the words and acts of the employee, viewed objectively, evince the requisite intention, rather than the subjective intention, of the employee.261 The onus of proving that there has been an affirmation lies on the party in breach, not the party making the alleged affirmation.

Effect of an election 10.79 An election to affirm or terminate is final and binding on both parties.262 Where the employee elects to terminate the contract then he or she

cannot later seek specific performance of the contract because, as Lord Wilberforce once stated, ‘the contract has gone — what is dead is dead’.263 An employee cannot, except perhaps with the consent of the employer, retract an election to affirm or terminate.264 When an employee affirms a contract he or she thereby abandons the right to terminate. A court will more readily infer such abandonment when the choice arises from a once and for all breach, rather than a continuing breach of the contract. For example, a failure to pay a Christmas bonus is a once and for all breach and an inference that an employee has affirmed the contract can be readily drawn when he or she raises no complaint and remains in employment in June. However, a failure to provide a vehicle in accordance with the contract is a continuing breach and courts are more reluctant to conclude that continued employment forever waives the right to terminate as a result of that continuing wrong.265

The futility and limited utility of electing to affirm 10.80 In non-employment contracts the principal advantage gained by an innocent party who elects to affirm is that the party gains the benefits of the performance of the agreement. As the contract remains on foot, both [page 664] parties are required to continue to perform their obligations and, if the other party persists in the refusal to perform, the innocent party can seek equitable relief to enforce the contract. If the contract is terminated, a party cannot obtain an order for specific performance or an injunction to enjoin a breach.266 For the reasons discussed below, in employment contracts there is usually no advantage gained by an innocent party who elects to affirm.

The futility of affirming when there is a wrongful dismissal 10.81 It is usually futile for a wrongfully dismissed employee to elect to affirm a contract as he or she ordinarily gains no advantage from doing so. An employer who wrongfully dismisses an employee is still obliged to

comply with its duty to continue the employment for the duration of the contract and its failure to do so is a breach.267 A wrongful dismissal terminates the employment relationship, even when the employee elects to affirm.268 Even if the contract is not terminated, an employee cannot ordinarily earn wages after the employment relationship ends.269 Hence, so far as earning wages is concerned, a wrongfully dismissed employee who elects to affirm will be in no better position than an employee who elects to terminate. Further, when an employee has been wrongfully dismissed courts will rarely order the specific performance of the contract.270 The principal advantage associated with affirmation is thereby denied to most wrongfully dismissed employees and ‘the continuation of the contract of employment after a wrongful dismissal will, therefore, ordinarily be of no real significance as it will for all practical purposes be at an end’.271 In principle, however, an unaccepted breach or repudiation does not terminate a contract and in some cases there will be some utility in not electing to terminate the contract: see 10.83.

The futility of affirming when there is a wrongful resignation 10.82 Similar issues arise when an employer is confronted with a repudiation or serious breach by an employee who wrongfully resigns. An employee who wrongfully resigns is still obliged to comply with his or her duty to serve the employer for the duration of the contract and his or her failure to do so is a breach. A wrongful resignation will terminate [page 665] the employment relationship.272 Whether the employer terminates or affirms, the employee does not earn wages. As the employee does not continue to serve the employer, no obligation to pay wages arises.273 When an employee wrongfully resigns, courts will rarely order the specific performance of the contract.

The limited utility of affirming

10.83 In some circumstances there is some utility in an employee or employer electing to affirm. First, the employee or employer may seek to convince a court to make an order for specific performance: see 15.15. Second, there may be benefits that continue to accrue while the contract of employment remains extant. Although the obligation to pay wages is usually dependent on the performance of service, in some cases the payment of wages is an independent obligation, or is an obligation dependent on the continuation of the employment contract and not the employee’s service. Employees under such contracts who elect to affirm may continue to accrue wages. Under some contracts, benefits, such as a contractual right to illness benefits while in employment, may continue to accrue while the contract remains on foot.274 Similarly, some statutory benefits arise from the existence of a contract of employment.275 Third, the employer may be persuaded to take back the employee, in which case the period of employment will be unbroken.276 It is arguable that the making of a compulsory winding up order is a repudiation of the contract and a liquidator may retract the repudiation prior to the acceptance of the repudiation.277 Fourth, an employee may elect to terminate the contract to free himself or herself from restraints on accepting other employment that continue to bind while the contract remains on foot.278 From the employer’s point of view, there may be a desire to restrain the employee from accepting employment that would be in breach of an exclusive service or restraint [page 666] of trade clause, or from acting contrary to a term of the contract concerning confidentiality or intellectual property that only operates while the contract is on foot.

The utility of affirming when the service continues 10.84 A further situation in which an election to affirm is not futile arises when the employer purports to reduce the rank or remuneration of an

employee but there is no wrongful dismissal. In such a case, the employee who affirms the contract will continue to be entitled to the agreed rank and remuneration. In Visscher v Guidice the employee was promoted in 2001 from the position of third mate to the position of chief officer; a fortnight later, after an industrial dispute with the union, the employer informed him that his promotion was ‘unfortunately rescinded’. The employee, Mr Visscher, told the employer that he did not accept that the promotion had been rescinded. He acted in the position of chief officer for the next three years (he was filling a vacancy) and was paid the salary of a chief officer, being recorded in his pay slips as the salary of a third mate plus a higher duties allowance. In 2002 he refused an offer of a promotion to be second mate on the ground that he was already a chief officer. In 2004 he was informed that he would thereafter be engaged and paid as a second mate. The court found that the employer breached the contract in 2001 when it purported to rescind Mr Visscher’s appointment. The employee elected to affirm the contract in 2001. The contract on foot in 2004 therefore required the employer to engage Mr Visscher as a chief officer. The employer repudiated the contract in 2004 when it told him that it would not perform its obligation to pay him as chief officer. Mr Visscher was entitled to accept that further repudiation.279 The simplest method of affirming the contract is to state unequivocally that the contract is affirmed and that the contract is not being terminated. Mr Visscher adopted such a course, as did the employees in Rigby v Ferodo.280 Their statements could not have been plainer. By way of comment, it appears that some employers refuse to acknowledge the right of employees to insist on their contractual entitlements. The implicit premise of the employers’ argument in Visscher v Guidice and Rigby v Ferodo was that the employer’s right of control extended to a [page 667] right to dictate the terms of the contract, notwithstanding any objection from the employee.

The grounds for termination and after-acquired information 10.85 For an employer to validly elect to terminate the contract the employee must have committed a serious breach or a repudiation. The employer has the onus of proving that the employee committed such an act and that it was a serious breach or a repudiation.281 If the employer is unable to prove either matter, by purporting to elect to terminate the employer will almost always have committed a repudiation and a serious breach.282

Exercising a right to terminate for an invalid reason 10.86 The employer is not obliged to provide reasons for the termination at the time of the election unless an express term or a statute requires reasons be given. If it gives no reason, the employer can at trial justify the termination by reference to any valid justification existing at the time of the termination.283 Where the employer does provide a particular justification when terminating the contract, it may at trial justify the termination by relying on a different valid reason: ‘the question is whether the [employer] was entitled to do what it did, not whether the reason why it exercised the rights it in fact had was a good or bad one’.284 Where the employer gives multiple justifications it is sufficient if only one justification — that is, one serious breach or one repudiation — is proved.

Knowledge of the breach or repudiation acquired after the termination 10.87 The termination can be justified by reference to any facts or on any ground existing at the time of the termination, even if the employer was unaware of those facts or that ground at that time: ‘the dismissal of [page 668] an employee may be justified upon grounds on which the employer did not act and of which the employer was unaware when the employee was

discharged’.285 This proposition applies whether the source of the right to terminate is based on the contract, based on the common law right to terminate or arises from a repudiation.286 The proposition is subject to the limitations discussed in 10.88. Most of the cases are concerned with the employer’s justifications for the termination, though the same principle applies to an employee’s justification.287 In Wethersfield Ltd v Sargent the employee started work on a Thursday and was instructed not to hire vehicles to ‘coloureds and Asians’. She resigned the next Monday, but did not inform her employer of her reason for doing so until the following Thursday. The employer had, by its conduct, repudiated the contract and the issue was whether Ms Sargent had elected to terminate. Pill LJ stated: I reject as a proposition of law the notion that there can be no acceptance of a repudiation … unless the employee tells the employer, at the time, that he is leaving because of the employer’s repudiatory conduct …288

Limitations on the use of after-acquired information 10.88 There are some limitations on the right to justify a termination by reference to a ground not relied on at the time of the termination. If the employer has elected not to terminate (often called a waiver or condonation), or there is an estoppel, then the employer may not be able to rely on the alternative reason.289 Some statutory schemes prevent reliance by the employer on grounds of dismissal that were not acted on at the time of the termination or of which the employer was unaware.290 Where the employer relies on a contractual right to terminate which is governed [page 669] by an agreed disciplinary procedure, the employer may be unable to later rely on a ground that was not properly dealt with under that procedure.291

Time of the election and the effect of delay

10.89 A serious breach or repudiation gives rise to a right to terminate that can be exercised immediately. It is not necessary for the employer to warn the employee before exercising the right, or give the employee an opportunity to explain his or her misconduct, or give the employee time to rectify the breach or retract the repudiation, subject to any contrary provision in the contract or statutory limitation.292 There is no need to wait for the inevitable breach in the case of a repudiation.293 Once the right to terminate is exercised it validly terminates the contract from the date of the exercise and not from the date of the breach or the repudiation.294 10.90 A party faced with an election between the exercise of alternative and inconsistent rights is not bound to elect immediately.295 When an employer commits a serious breach or repudiates the contract, the employee may refrain from exercising a right to terminate so long as he or she does not affirm and so long as the delay does not cause prejudice to the employer.296 In Shields Furniture Ltd v Goff the employer repudiated the contract when it directed the employee to commence work at a new location. The employee worked at the new location for three weeks, and then took a further two weeks’ annual leave. He did not affirm by doing [page 670] so; he was permitted a period to make up his mind about whether to terminate.297 The parties may expressly or implicitly agree to extend the period during which the employee may make the election.298 Giving a party in breach a chance to mend its ways and recommence performing the contract will often not be interpreted as an affirmation.299 An assertion by an employee that he or she is continuing to perform the contract without prejudice to his or her right to terminate is relevant to, but not determinative of, the issue of whether the employee has elected to affirm.300

Exercising express rights to terminate 10.91 There are three possible sources of a party’s right to terminate the

contract: first, express terms in the contract; second, a right to terminate conferred by a statute or industrial instrument; and, third, a common law right to terminate for serious breach or repudiation. Parties also usually have a right to terminate the contract on notice: see 11.3. Express terms of the contract and statutes may specify what breaches justify the termination, how the right to terminate shall be exercised, and the effect of the exercise of that right. Where the employer relies on an express contractual or statutory right to terminate it must comply with any procedure governing the termination contained in those instruments. If the contract or statute is silent on the termination process, the common law requirements must be met. These requirements are discussed in more detail in 11.3–11.11.

Contractual rights usually augment common law rights to terminate 10.92 An express contractual right to terminate is usually construed so as to augment, rather than substitute for, a common law right, unless the [page 671] contract evinces a different intention.301 The employer can terminate the contract by relying on the contractual right or the common law right, or both. An employer does not need to elect between contractual and common law rights to terminate as they are not inconsistent rights.302 Even if it relies on a specific contractual right, the employer may nevertheless usually later justify the termination by reference to any other contractual or common law right to terminate.303

Job security clauses 10.93 Terms governing the procedure that must be followed in the giving of notice or the exercise of a right to terminate take a variety of forms. Some terms limit the grounds on which an employer can terminate or give notice. Others grant an employee a measure of job security against arbitrary

termination by establishing a procedure requiring an investigation to be conducted or a hearing held prior to a dismissal. Ordinarily, where a disciplinary procedure governing termination on a specific ground (such as misconduct) forms part of the contract, the employer cannot proceed to terminate the contract relying on that ground (or perhaps otherwise give notice under the contract) until the agreed contractual procedure has been completed.304 The exercise of express rights to terminate may be subject to implied limitations. The employer has a duty of good faith that, in some cases, may apply to the exercise of a power to terminate: see 8.28 and 11.25. The exercise by the employer of an express power to terminate may be limited by the employee’s right to enjoy the benefits of other clauses in the contract: see 11.27. [page 672]

Clarity and communication of the election Clear terms 10.94 The election to terminate for serious breach or repudiation must be unequivocal. To constitute a valid election to terminate the words or conduct of the party must be consistent only with a termination and not with an affirmation.305 A party who receives in silence the communication of a repudiation or serious breach does not thereby make an election.306 An election to terminate requires no particular form of words; the innocent party does not have to ‘recite a mantra’.307 Words such as ‘sack’, ‘get out’, ‘I quit’ are all redolent of an election to terminate. Care must be taken when interpreting words such as ‘resign’ and ‘dismiss’ as they may indicate that the party intends to give notice in accordance with the contract rather than elect to immediately terminate the contract.

Communication of election

10.95 Where a party elects to terminate it is usually clear from the party’s unequivocal words that the contract is being terminated. Though the matter is not beyond doubt, it is probable that it is not always necessary to communicate the election to the other party for it to be effective.308 If a wrongfully dismissed employee elects to terminate by taking up inconsistent employment then the election will be effective, even if the employer is not notified of the election.309 However, in the absence of such unequivocal conduct, an uncommunicated decision to terminate will not be an election.310 In Grout v Gunnedah Shire Council the employee repudiated the contract by giving short notice to the employer. The employer decided to terminate the contract, passed a resolution to that effect and then [page 673] showed the employee a draft press release communicating that decision. The election was made effective when Mr Grout was shown the draft press release, not at the time the employer passed the resolution.311

Inference of an election from conduct 10.96 An election to affirm or terminate can be express or implied from the employee’s words and conduct.312 In the absence of unequivocal words, the election may be inferred from the unequivocal conduct of the innocent party manifesting an election to terminate or affirm.313 The conduct must be clear and an affirmation or termination will not be lightly inferred.314 The issue is whether the employee has, despite the requisite knowledge of the employer’s serious breach or repudiation, affirmed the contract by exercising a right that is only available if the contract subsists; or, in the case of a termination, has exercised a right that is only available if the contract is terminated.315

Election through commencing proceedings 10.97 A party elects to terminate by commencing proceedings that are inconsistent with the continuation of the contract. An employee who sues for

damages for wrongful dismissal is electing to terminate.316 An election to terminate is not made by commencing proceedings in an action consistent with the contract’s continuation, such as seeking common law damages in the alternative to specific performance, or suing for wages or for a debt payable on the termination of the relationship (as opposed to amounts payable on the termination of the contract).317 Obtaining an order for specific performance, or an injunction to restrain a breach, is an affirmation. Seeking such an order, without seeking alternative relief, may also be an affirmation.318 It is probable that obtaining an order under [page 674] ss 418 and 421 of the Fair Work Act that an employee cease industrial action and perform the contract is also an affirmation.

Election by accepting inconsistent employment 10.98 An employee who seeks to affirm must be ready, willing and able to perform. An employee elects to terminate by engaging in conduct that precludes the performance of his or her obligations under the contract. A wrongfully dismissed employee who takes up inconsistent employment with another employer will be held to have elected to terminate with the first employer because engaging in inconsistent employment with the new employer makes it impossible for the employee to perform work for the first employer.319 For example, assume an employee is wrongfully dismissed from her full-time job in Melbourne and later agrees to be employed as a full-time employee in the United States for a fixed term of 12 months. Commencing the employment in the United States for 12 months would ordinarily be inconsistent with being ready, willing and able to continue to perform the former job in Melbourne. This principle needs to be applied with an eye on reality. The necessity to earn money in order to live will ordinarily dictate that a wrongfully dismissed employee will seek and obtain a job elsewhere. The employee does not elect to terminate by merely accepting alternative employment; it must be alternative employment that is inconsistent with the continued performance

of the contract. Courts are slow to conclude that obtaining work out of necessity, or accepting casual work or employment terminable on short notice, is inconsistent with an affirmation of the contract.320 [page 675]

Election by continued performance 10.99 The insistence by the innocent party on continued performance by the party in breach may be an election to affirm.321 The voluntary acceptance by the innocent party of the other party’s performance is also capable of being an affirmation.322 Though the principle appears reasonably clear, its application has proved difficult partly because in employment contracts (as opposed to many commercial contracts) there are obligations that are performed each day. Lord Denning has said that when an employer commits a serious breach or repudiates the contract, the employee: … must make up his mind soon after the conduct of which he complains: for, if he continues for any length of time without leaving, he will lose his right to treat himself as discharged. He will be regarded as having elected to affirm the contract.323

This dicta sets the bar too high. The consequences of delay by the employee in making the election are discussed in 10.89. Various cases have held that the employee has not affirmed when he or she has for weeks, or months, continued to accept wages while on sick leave or on a paid holiday, or while searching for another job, or when trialling a compromise arrangement.324 However, continuing to work for many months without protest about the employer’s conduct, and with no attempt to reserve one’s rights, will often be an affirmation.325 Similarly, when an employee commits a serious breach or repudiation the employer will have affirmed by continuing to accept the performance of the employee and not exercising the right to terminate. Again, this has proved difficult to apply.326

Loss of the right to terminate: ‘condonation’ and ‘waiver’

10.100 A party loses the right to terminate in a range of situations. The most obvious is when the party elects to affirm: see 10.69. The right may be lost owing to a delay in its exercise that causes prejudice to the other party: see 10.90. An innocent party may lose the right to terminate [page 676] by itself committing a serious breach of the contract: see 10.104. The innocent party may be estopped from terminating the contract or prevented from doing so owing to unconscionable or unfair conduct on its part.327 As discussed below, an employer with sufficient knowledge of the employee’s breach may lose the right to terminate in reliance on that breach when it chooses not to terminate the employment.

Waiver, condonation and election 10.101 Many employment law cases speak of waiver as if it is an independent principle rather than a conclusionary word stating the consequences of the operation of a more specific principle, such as election or estoppel. The term ‘waiver’ should be avoided when determining if a right to elect to terminate has been lost. The same can be said of the word ‘condonation’, though that term also appears to have gained a special meaning as part of industrial lore.328 It is suggested that condonation and waiver of an employee’s misconduct should be analysed as part of the law governing election. As a majority of the High Court has stated: In this court an intentional act, done with knowledge, whereby a person abandons a right by acting in a manner inconsistent with that right has been described as the ‘waiver’ of that right. But as later demonstrated, many such cases are applications of the doctrine of election between inconsistent rights … the exercise, despite knowledge of a breach entitling one party to be discharged from its future performance, of rights available only if the contract subsists, will constitute an election to maintain the contract on foot.329

10.102 The principle most commonly arises when an employee has committed a serious breach and the employer becomes aware of the breach and continues to accept the employee in its service with or without taking disciplinary action. The employer later seeks to rely on the breach to justify the termination of the contract. The issue is then: did the employer elect to

affirm the contract? The rule is that an employer with sufficient knowledge of the breach who elects to affirm cannot at a later date justify the termination on the basis of the employee’s known past breach.330 [page 677] This raises at least three issues. What is sufficient knowledge? What conduct constitutes an election to affirm (or not to terminate)?331 What are the consequences of an election to affirm on later reliance on the act of misconduct to justify the termination?332

Sufficient knowledge of the breach to affirm 10.103 The employer must have sufficient knowledge, at the time of the election, of the facts that give rise to the election. An employer who is ignorant of the breach, or its underlying facts, cannot be taken to have affirmed the contract.333 However, the employer need not be making a deliberate choice between one of two legal rights: … election as between inconsistent contractual rights does not call for any conscious choice as between two sets of rights, it being enough that there should be intentional and unequivocal conduct together with knowledge of the facts giving rise to the legal rights.334

The employer must at least know the facts that give rise to the right to elect.335 Some cases suggest that the employer must have ‘full knowledge’ of the facts before it is required to elect.336 This sets the bar too high. It is sufficient if the employer has the information from which the decisive facts giving rise to the right to elect to terminate are a clear if not a necessary inference.337 An employer that is in possession of most of the important facts, or has chosen not to investigate, or to investigate lethargically, facts revealing the misconduct may be held to have elected not to terminate.338 [page 678] Whether the employer must also know that it has a legal right to terminate

raises more difficult issues.339 The onus of proving the election rests on the party that alleges the election has been made.340 An innocent party may be bound by an election to terminate even if he or she is ignorant of the right to affirm.341

Breach or repudiation by the terminating party 10.104 The right of an employer to terminate for the employee’s breach or repudiation may, in some cases, be affected by the employer’s extant breach or repudiation. An employer may exercise a right to terminate the contract notwithstanding the fact that it has breached a warranty or has committed an insufficiently serious breach of a non-essential term. The employer’s unwillingness to perform an inessential term does not alter the right to terminate.342 An employer can exercise an expressly conferred contractual right to terminate notwithstanding the employer’s breach or repudiation.343 The law is less certain when the employer has committed a serious breach or has repudiated the contract and then seeks to exercise a common law right to terminate. Some cases support the view that the employer cannot exercise a right to terminate until it has placed itself in the position of being ready, willing and able to perform; it is not an innocent party unless it willing to perform its own obligations.344 [page 679] Other cases support the view that generally an employer can exercise a right to terminate regardless of its own breach or repudiation.345 In Brandeaux Advisers (UK) Limited v Chadwick the employer was alleged to have committed a series of serious breaches from February to June. The employer terminated the contract when the employee committed a serious breach in June. The court found that the employer was not disentitled to exercise a right to terminate by virtue of its own breaches.346 However, even on this view an employer cannot rely on the employee’s breach if that breach was causally connected to the employer’s breach.347 For example, if an employer states it will not pay an employee for the next week’s work (a

repudiation) and the employee as a consequence does not perform work in accordance with the contract, then the employer cannot rely on the employee’s non-performance to justify a termination. ____________________ 1.

Spain v Arnott (1817) 2 Stark 256; 171 ER 638 discussed in 1.43.

2.

M Freedland, The Contract of Employment, Clarendon Press, Oxford, 1976, pp 212–4; see the uncertainties noted in Re Rubel Bronze and Metal Company Limited and Vos [1918] 1 KB 315 at 321 and Hanley v Pease & Partners Ltd [1915] 1 KB 698 at 705. On the development of the general law of contract relating to termination, see S Stoljar, ‘Dependent and Independent Obligations: A Study in the History of Contract’ (1957) 2 SLR 217.

3.

Callo v Brouncker (1831) 4 Car P 518; 172 ER 807 restated the principle and was commonly referred to through the nineteenth century; see also C Smith, The Law of Master and Servant, H Sweet, London, 1860, pp 78–9 and R Burn, The Justice of the Peace, 21st ed, A Strahan, London, 1810, Vol V, pp 259–60. The history of those grounds is discussed further in 7.137.

4.

Emmens v Elderton (1853) IV HLC 624; 10 ER 606: see also 1.45–1.46.

5.

Decro-Wall International SA v Practitioners in Marketing Ltd [1971] 1 WLR 361 at 381 (cf 369– 70 and 376); 2 All ER 216 at 233–4 (cf 223 and 229); Gunton v Richmond-upon-Thames London Borough Council [1981] Ch 448 at 459–60; [1980] 3 All ER 577 at 582–3; Boyo v Lambeth London Borough Council [1994] ICR 727 at 747 and 749–50; Vine v National Dock Labour Board [1956] 1 QB 658 at 674 and on appeal at [1957] AC 488 at 500; [1956] 3 All ER 939 at 944; Sanders v Ernest A Neale Ltd [1974] ICR 565; Macksville & District Hospital v Mayze (1987) 10 NSWLR 708 at 730 and R v East Berkshire Health Authority; Ex parte Walsh [1984] 3 All ER 425 at 434.

6.

Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 at 463–4; Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 2 All ER 285 at 287; North v Television Corporation Ltd (1976) 11 ALR 599 at 609; Advertiser Newspapers Pty Ltd v Industrial Relations Commission (SA) (1999) 74 SASR 240; 90 IR 211; [1999] SASC 300 at [32]; Turner v Australasian Coal and Shale Employee’s Federation (1984) 6 FCR 177 at 191–2; 55 ALR 635 at 647–8; Siagian v Sanel Pty Ltd (1994) 122 ALR 333 at 342; 54 IR 185 at 192; Cantor Fitzgerald International v Callaghan [1999] ICR 639 at 648; 2 All ER 411 at 419; Gillies v Downer EDI Ltd [2011] NSWSC 1055 at [156]; Randall v Aristocrat Leisure Ltd [2004] NSWSC 411 at [448]; Earney v Australian Property Investment Strategic Pty Ltd [2010] VSC 621 at [76] and Rankin v Marine Power International Pty Ltd (2001) 107 IR 117; [2001] VSC 150 at [253]– [254].

7.

Byrne v Australian Airlines Limited (1995) 185 CLR 410 at 423; 131 ALR 422 at 428; Concut Pty Ltd v Worrell (2000) 176 ALR 693; 103 IR 160 at [16] and Measures Brothers Ltd v Measures [1910] 2 Ch 248 at 255.

8.

See Chapter 11 concerning the right to terminate by giving notice which can be exercised regardless of the existence of a breach or repudiation; Chapter 12 discusses termination by frustration. A statute or industrial instrument may also grant a right to terminate, though rarely does. Parties may also have rights to rescind the contract ab initio when it is vitiated by the factors discussed in 4.2–4.19; see Commissioner of Taxation v Reliance Carpet Co Pty Ltd (2008) 236 CLR 342; 246 ALR 448 at [2]. There may also be termination due to the failure of a condition subsequent: Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537 at 551; 41 ALR 441 at 451–2.

9.

For ease of reference, it is usually assumed in this chapter that the party repudiating or breaching the contract is the employee and the innocent party electing to affirm or terminate is the employer. Except to the extent referred to below, the principles apply in the same manner when it is the employer who repudiates or breaches the contract.

10.

North v Television Corporation Ltd (1976) 11 ALR 599 at 609 per Smithers and Evatt JJ, a proposition adopted in over 20 Australian superior court decisions about employment contracts but not adopted in any decision about a non-employment contract.

11.

Clouston & Co Ltd v Corry [1906] AC 122 at 129; [1904–7] All ER Rep 685 at 687, a lament echoed in over a dozen Australian superior court decisions.

12.

The concept of a wrongful dismissal is discussed in more detail in 14.35–14.38.

13.

Advertiser Newspapers Pty Ltd v Industrial Relations Commission (SA), note 6 above, at [26]– [27]; Smith v Director-General of School Education (1993) 31 NSWLR 349 at 365; 51 IR 204 at 219 and Australian Colliery Staff Association v Queensland Mines Rescue Service (1999) 88 IR 75 at 92–4; [1999] FCA 395.

14.

On termination by operation of law and frustration see 12.49; on termination by agreement and by effluxion of time see 11.19 and 11.80.

15.

See 10.35.

16.

Heyman v Darwins Ltd [1942] AC 356 at 397; 1 All ER 337 at 359–60.

17.

Norwest Holst Group Administration Ltd v Harrison [1985] ICR 668 and Shindler v Northern Raincoat Co Ltd [1960] 1 WLR 1038 at 1048; 2 All ER 239 at 249. Such an announcement may be an immediate breach of the implied term of trust and confidence: see 8.24.

18.

Associated Newspapers Ltd v Bancks (1951) 83 CLR 322 at 339–40 and Rankin v Marine Power International Pty Ltd, note 6 above, at [252]–[254].

19.

Visscher v Guidice (2009) 239 CLR 361; 258 ALR 651; 187 IR 96 at [69] and Foran v Wight (1989) 168 CLR 385 at 423–4; 88 ALR 413 at 439.

20.

It appears when the phrase is used it means conduct that justifies the termination of the contract, being conduct that is either a serious breach or a repudiation: Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115; 241 ALR 88 at [44]; Eastwood v Magnox Electric plc [2005] 1 AC 503; [2004] 3 All ER 991 at [40] and Rigby v Ferodo Ltd [1988] ICR 29 at 33.

21.

Automatic Fire Sprinklers Pty Ltd v Watson, note 6 above, at 450 and 466 and Gunton v Richmond-upon-Thames London Borough Council, note 5 above, Ch at 468; All ER at 588–9; see 14.35–14.36.

22.

Associated Newspapers Ltd v Bancks, note 18 above.

23.

Koompahtoo, note 20 above, at [44] per Glesson CJ, Gummow, Heydon and Crennan JJ.

24.

Afovos Shipping Co SA v Pagnan [1983] 1 WLR 195 at 203; 1 All ER 449 at 455.

25.

J Carter, Carter’s Breach of Contract, 2nd ed, LexisNexis Butterworths, Australia, 2011, p 300.

26.

Hochster v De La Tour (1853) 2 El & Bl 678; 118 ER 922; Macdonald v Australian Wool Innovation Ltd [2005] FCA 105 at [232]–[235] concerned similar facts.

27.

Universal Cargo Carriers Corporation v Citati [1957] 2 QB 401 at 438; see also Foggo v O’Sullivan Partners (Advisory) Pty Ltd (2011) 206 IR 87; [2011] NSWSC 501 at [111]. On the time for the performance of obligations see 9.55.

28.

Decro-Wall International SA v Practitioners in Marketing Ltd, note 5 above, WLR at 382; All ER at 235.

29.

Rigby v Ferodo Ltd, note 20 above, at 33; see 11.10.

30.

J Carter, note 25 above, p 27; see the discussion of the maxim de minimis non curat lex (the law does not concern itself with trifles) in 9.36.

31.

There are some terms whose breach does not lead to an award of damages owing to public policy reasons: see 14.67.

32.

See 5.28–5.44.

33.

See 5.48–5.74.

34.

Anticipatory breach is discussed in 10.10.

35.

See, for example, BearingPoint Australia Pty Ltd v Hillard [2008] VSC 115 at [117] and Rankin v Marine Power International Pty Ltd, note 6 above, at [400].

36.

Koompahtoo, note 20 above.

37.

Koompahtoo, note 20 above, at [47]; Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd (1938) 38 SR (NSW) 632 at 641–2 and J Carter, note 25 above, p 120. Other meanings of condition are discussed in 9.8 and J Carter, note 25 above, pp 121–2.

38.

J Carter, note 25 above, p 128.

39.

J Carter, note 25 above, p 123.

40.

Koompahtoo, note 20 above, at [47] and [54]–[55].

41.

Koompahtoo, note 20 above, at [47] and [48]; see 3.5 on the objective approach in contract.

42.

Associated Newspapers v Bancks, note 18 above, at 338; Koompahtoo, note 20 above, at [47]; Bruce v AWB Ltd (2000) 100 IR 129; [2000] FCA 594 at [10]; Shevill v Builders Licensing Board (1982) 149 CLR 620 at 627; 42 ALR 305 at 309 and DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 at 431; 19 ALR 223 at 229–30; see also J Carter, note 25 above, pp 166–86.

43.

Hoad v Swan (1920) 28 CLR 258 at 263; Shevill v Builders Licensing Board, note 42 above, CLR at 627; ALR at 309 per Gibbs CJ (‘however trifling’); Koompahtoo, note 20 above, at [47] and Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd, note 37 above, at 641–2. This proposition is subject to the de minimis rule discussed in 10.12.

44.

Bettini v Gye (1876) 1 QBD 183 at 188; Hoad v Swan, note 43 above, at 263; Shevill v Builders Licensing Board, note 42 above, CLR at 627; ALR at 309 and J Carter, note 25 above, pp 158– 61.

45.

See, for example, Scharmann v Apia Club Ltd (1983) 6 IR 157 at 164–5.

46.

Afovos Shipping Co SA v Pagnan, note 24 above, WLR at 202–3; All ER at 455 and Universal Cargo Carriers Corp v Citati, note 27 above, at 438.

47.

Koompahtoo, note 20 above, at [47] and Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd, note 37 above, at 641–2.

48.

Laws v London Chronicle (Indicator Newspapers) Ltd, note 6 above, at 287 and North v Television Corporation Ltd, note 10 above, discussed in Gillies v Downer EDI Ltd, note 6 above, at [156]–[163].

49.

Cases on ‘grave misconduct’: Galipienzo v Solution 6 Holdings Ltd (1998) 28 ACSR 139 at 142–

3 and Paoad v Scarborough Guardians [1914] 3 KB 959; cases on ‘serious or wilful misconduct’: Boral Resources (Qld) Pty Ltd v Pyke (1989) 93 ALR 89; McDonald v Parnell Laboratories (Aust) Pty Ltd (2007) 168 IR 375; [2007] FCA 1903 at [48]–[53] and Australasian Meat Industry Employees Union v Australian Meat Holdings Pty Ltd (1999) 93 IR 308; [1999] FCA 696 at [80]–[95]; cases on ‘serious and wilful misconduct’: Johnson v Marshall Sons and Co Ltd [1906] AC 409; Light v Mouchemore (1915) 20 CLR 647; Richards v Faulls Pty Ltd [1971] WAR 129; Hills v Brambles Holdings Ltd (1987) 4 ANZ Insurance Cases 60-785 and Rumboll v Nunnery Colliery Co (1899) 80 LT 42; cases on ‘substantial default or wilful act’: Girlock (Sales) Pty Ltd v Hurrell (1982) 149 CLR 155; cases on ‘wilful misconduct’: Lewis v Great Western Railway Co (1877) 3 QBD 195 at 213 and see also Shanahan v Australian Industrial Relations Commission (No 2) (2006) 160 IR 386 at [77]; cases on ‘misbehaviour’: Clark v Vanstone (2004) 211 ALR 412; [2004] FCA 1105 at [73]–[85] and on appeal at (2005) 147 FCR 299; 224 ALR 666 at [14]–[18] and [216]–[244]; cases on ‘misconduct’: Randall v Aristocrat Leisure Ltd, note 6 above, at [447] and [470]–[471] and North v Television Corporation Ltd, note 10 above, at 608–9. 50.

McGarry v Boonah Clothing Pty Ltd (1988) 49 IR 66 at 73 and Industrial Relations Bureau v Knox Auto Parts & Accessories Pty Ltd (1982) 1 IR 314 at 316.

51.

See, for example, North v Television Corporation Ltd, note 10 above, at 608–9 interpreting the phrase ‘refusal of duty, wilful and serious neglect of duty, disobedience of instructions or orders or misconduct’; Industrial Relations Bureau v Knox Auto Parts & Accessories Pty Ltd, note 50 above, at 316; Bruce v AWB Pty Ltd, note 42 above, at [13]–[15] and Brackenridge v Toyota Motor Corporation Australia Ltd (1997) 142 ALR 99 at 107.

52.

Shanahan v Australian Industrial Relations Commission (No 2), note 49 above, at [76].

53.

Corbette v National Commercial Bank of Dominica [2009] UKPC 32 and Connor v Grundy Television Pty Ltd [2005] VSC 466 at [60]; cf the approach in the United Kingdom under unfair dismissal laws: Alidair Ltd v Taylor [1978] ICR 445 at 451.

54.

Macari v Celtic Football and Athletic Co Ltd [1999] IRLR 787 at [66]; Kelmar v Adelaide United Friendly Societies’ Dispensary [1913] SALR 121 and Hogan v Tumut Shire Council (1954) 54 SR (NSW) 284.

55.

Service Station Association v Berg Bennett & Associates Pty Ltd (1993) 45 FCR 84 at 94; (1993) 117 ALR 393 at 403–4; Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234 at 268 and 279–80 and Amann Aviation Pty Ltd v Commonwealth (1990) 22 FCR 527 at 532 and 542–4; 92 ALR 601 at 607 and 616; cf Hogan v Tumut Shire Council, note 54 above, at 290. The duty of good faith is discussed in 8.28.

56.

Dixon v South Australian Railways Commissioner (1923) 34 CLR 71 at 112 and Amann Aviation Pty Ltd v Commonwealth, note 55 above, FCR at 532 and 542–4; ALR at 607 and 616–18.

57.

Visscher v Guidice, note 19 above, at [53]–[55]; Advertiser Newspapers Pty Ltd v Industrial Relations Commission (SA), note 6 above, at [32]; Hochster v De La Tour, note 26 above (repudiation by employer); Adami v Maison de Luxe Ltd (1924) 35 CLR 143 (repudiation by refusal to perform by employee); Noonan v Victorian Railways Commissioners (1907) 4 CLR 1668 at 1680 and 1682 (repudiation due to inability to perform by employee); Cranleigh Precision Engineering Ltd v Bryant [1965] 1 WLR 1293 at 1302–3 (repudiation by giving short notice by employee); Malik v Bank of Credit and Commerce International SA [1998] AC 20 at 35–6; [1997] 3 All ER 1 at 6 and Rankin v Marine Power International Pty Ltd, note 6 above, at 142–3.

58.

Koompahtoo, note 20 above, at [44]; Shevill v Builders Licensing Board, note 42 above, CLR at

625–6; ALR at 308–9; Almond Investors Ltd v Kualitree Nursery Pty Ltd [2011] NSWCA 198 at [62] and J Carter, note 25 above, p 298. The term repudiation is used in many different senses and is regularly used without precise definition: Heyman v Darwins Ltd, note 16 above, AC at 378; All ER at 350 and Australian National Airlines Commission v Robinson [1977] VR 87 at 90. 59.

Rankin v Marine Power International Pty Ltd, note 6 above, at [254].

60.

Koompahtoo, note 20 above, at [44].

61.

See 9.9 on the dependent obligation to pay wages.

62.

Hochster v De La Tour, note 26 above.

63.

Koompahtoo, note 20 above, at [54]–[55]. Earlier authorities such as North v Television Corporation Ltd, note 10 above, at 611 that suggested otherwise need to be treated with some caution.

64.

Australian National Airlines Commission v Robinson, note 58 above, at 91; Gunnedah Shire Council v Grout (1995) 134 ALR 156 at 165; 62 IR 150 at 159 and Whittaker v Unisys Australia Pty Ltd (2010) 26 VR 668; 192 IR 311; [2010] VSC 9 at [35].

65.

English & Australian Copper Co Ltd v Johnson (1911) 13 CLR 490 at 497; Woods v W M Car Services (Peterborough) Ltd [1982] ICR 693 at 698 and 699–700 and 701–2 and Re Rubel Bronze and Metal Co Ltd, note 2 above, at 322–3.

66.

Noonan v Victorian Railways Commissioners, note 57 above, at 1680 and 1685–6; Peter Turnbull and Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd (1954) 90 CLR 235 at 253 and Universal Cargo Carriers Corp v Citati, note 27 above, at 437.

67.

Loughridge v Lavery [1969] VR 912 at 923–4 and Universal Cargo Carriers Corp v Citati, note 27 above, at 437.

68.

It must also be shown that the absence of readiness and willingness was sufficiently serious: see 10.38–10.49.

69.

Australian National Airlines Commission v Robinson, note 58 above, at 91–2.

70.

The principle is longstanding, dating from at least Ripley v M’Clure (1849) 4 Ex 345; 154 ER 1245; cf the dicta of Lord Denning MR in Chappell v Times Newspapers Ltd [1975] 1 WLR 482 at 499–500 and the note of R C Simpson, ‘The Impact on Industrial Law of Chappell v Times Newspapers Ltd’ (1975) 49 ALJ 581 at 582–3.

71.

Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623 at 647–8; 85 ALR 183 at 199–200 and Tullett Prebon (Australia) Pty Ltd v Purcell [2009] NSWSC 1079 at [68].

72.

Cranleigh Precision Engineering Ltd v Bryant, note 57 above, at 1304 and Haseltime Lake and Co v Dowler [1981] ICR 222 at 225; on the need for an unambiguous intimation, see the cases at note 65.

73.

See Associated Newspapers v Bancks, note 18 above, at 339–40 and 10.9.

74.

Bostik (Australia) Pty Ltd v Gorgevski (1992) 36 FCR 20 at 37.

75.

Noonan v Victorian Railways Commissioners, note 57 above, at 1680, 1682 and 1686; Associated Newspapers Ltd v Bancks, note 18 above and J Carter, note 25 above, pp 315–6.

76.

Marriott v Oxford and District Co-Operative Society Ltd [1970] 1 QB 186 at 190–1.

77.

DTR Nominees Pty Ltd v Mona Homes Pty Ltd, note 42 above, CLR at 432–3; ALR at 231 and Sweet & Maxwell Ltd v Universal Services Ltd [1964] 2 QB 699 at 734; 3 All ER 30 at 42–3.

78.

Flynn v J C Hutton Pty Ltd (1982) 3 IR 413; see also Warren v Dickson [2011] NSWSC 79 at [25].

79.

See 10.25.

80.

Bruce v AWB Pty Ltd, note 42 above, at [16]; Green v Sommerville (1979) 141 CLR 594 at 600–1 and 611; 27 ALR 351 at 357 and 364 and Dainford Ltd v Smith (1985) 155 CLR 342 at 365–6; 58 ALR 285 at 302–3.

81.

Tullett Prebon (Australia) Pty Ltd v Purcell, note 71 above, at [68] and Summers v Commonwealth (1918) 25 CLR 144 at 152; see also Miller v University of New South Wales (2001) 110 IR 1 at [35]–[73].

82.

DTR Nominees Pty Ltd v Mona Homes Pty Ltd, note 42 above, CLR at 431–3; ALR at 231–2; Sweet & Maxwell Ltd v Universal Services Ltd, note 77 above, QB at 734; All ER at 42–3; Howard v Pilkington (Australia) Ltd [2008] VSC 491 at [141] and Green v Sommerville, note 80 above, CLR at 611; ALR at 364; see also Heine Bros (Australia) Pty Ltd v Forrest [1963] VR 383 at 384 and Scharmann v Apia Club Ltd, note 45 above, at 164–5.

83.

Decro-Wall International SA v Practitioners in Marketing Ltd, note 5 above, WLR at 382; All ER at 235.

84.

Omilaju v Waltham Forest London Borough Council (No 2) [2005] 1 All ER 75 at [14] and [22]; Horkulak v Cantor Fitzgerald International [2004] ICR 697 at [34] (varied [2005] ICR 402) and Easling v Mahoney Insurance Brokers (2001) 78 SASR 489; [2001] SASC 22 at [2], [9] and [128].

85.

BearingPoint Australia Pty Ltd v Hillard, note 35 above, at [124]–[125].

86.

Foran v Wight, note 19 above, CLR at 406 and 423; ALR at 427 and 439; Universal Cargo Carriers Corp v Citati, note 27 above, at 437–8 and Rawson v Hobbs (1961) 107 CLR 466 at 481.

87.

Afovos Shipping Co SA v Pagnan, note 24 above, WLR at 203; All ER at 455.

88.

Universal Cargo Carriers Corp v Citati, note 27 above, at 438; Turner v Goldsmith [1891] 1 QB 544 (fire destroying premises of employer) and Noonan v Victorian Railways Commissioners, note 57 above, at 1680, 1682 and 1685 (employee permanently disabled from performing his duties).

89.

Sunbird Plaza Pty Ltd v Maloney (1988) 166 CLR 245 at 264; 77 ALR 205 at 214 and Universal Cargo Carriers Corp v Citati, note 27 above, at 437.

90.

Afovos Shipping Co SA v Pagnan, note 24 above, WLR at 203; All ER at 455.

91.

On the effect of the dissolution of a partnership see 13.30; and on the effect of the appointment of a liquidator and winding up a company see 13.15.

92.

Afovos Shipping Co SA v Pagnan, note 24 above, WLR at 202; All ER at 455.

93.

See the older cases such as Cuckson v Stones (1859) 1 El and El 248; 120 ER 902 at 906; Storey v Fulham Steel Works Company (1907) 23 TLR 306 at 307 (aff’d (1907) 24 TLR 89); Jackson v Union Marine Insurance Company Limited (1874) LR 10 CP 125 at 145 and Noonan v Victorian Railways Commissioners, note 57 above, at 1678, 1682 and 1685. Frustration on account of illness is considered in 12.18.

94.

Universal Cargo Carriers Corporation v Citati, note 27 above, at 436–7 and Hoad v Swan, note 43 above, at 264.

95.

Universal Cargo Carriers Corporation v Citati, note 27 above, at 437 per Devlin J and Hochster

v De La Tour, note 26 above. 96.

Cook v CFP Management Pty Ltd (2006) 152 IR 358; [2006] QCA 215 at [17] per Williams JA, de Jersey CJ and Helman J agreeing; Spencer v Dowling [1997] 2 VR 127 at 160 and G McCarry, ‘Constructive Dismissal of Employees in Australia’ (1994) 68 ALJ 494.

97.

Lennon v State of South Australia [2010] SASC 272 at [360]–[366].

98.

Buckland v Bournemouth University [2011] QB 323; [2010] 4 All ER 186 at [20]; Omilaju v Waltham Forest London Borough Council (No 2), note 84 above, at [14] and Lewis v Motorworld Garages Ltd [1986] ICR 157 at 165–6 and 169.

99.

Easling v Mahoney Insurance Brokers, note 84 above, at [99] and Eastwood v Magnox Electric plc, note 20 above, at [6]; see also BMK v Logue [1993] ICR 601 (contract of employment is terminated when a constructive dismissal takes effect).

100. This appears to have been its original sense: Western Excavating (ECC) Ltd v Sharp [1978] ICR 221 at 226; [1978] QB 761 at 769. 101. See 10.51, 10.66, 10.70 and 10.71. 102. Haseltime Lake and Co v Dowler, note 72 above, at 225. 103. Martech International Pty Ltd v Energy World Corporation Limited (2007) 248 ALR 353; [2007] FCAFC 35 at [19]. 104. Martech International Pty Ltd v Energy World Corporation Limited, note 103 above, at [19]. 105. Briscoe v Lubrizol Ltd (No 2) [2002] IRLR 607; EWCA Civ 508 at [108]; Neary v Dean of Westminster [1999] IRLR 288 at [20]; North v Television Corporation Ltd, note 10 above, at 609 and Carter v The Dennis Family Corporation [2010] VSC 406 at [43]. 106. Koompahtoo, note 20 above, at [54]; Noonan v Victorian Railways Commissioners, note 57 above, at 1682; Francis v Lyon (1907) 4 CLR 1023 at 1035, 1040, 1044; Adami v Maison de Luxe Ltd, note 57 above, at 155–6; Bliss v South East Thames Regional Health Authority [1987] ICR 700 at 714–5 and Federal Commerce and Navigation Co Ltd v Molena Alpha Inc [1979] AC 757 at 778–9, 782–3, 785; 1 All ER 307 at 313–4, 317 and 319. 107. Afovos Shipping Co SA v Pagnan, note 24 above, WLR at 203; All ER at 455; Universal Cargo Carriers Corp v Citati, note 27 above, at 429–31; Foran v Wight, note 19 above, CLR at 416; ALR at 434 and Loughridge v Lavery, note 67 above, at 924. 108. McGarry v Boonah Clothing Pty Ltd, note 50 above, at 73. 109. Tullett Prebon Plc v BGC Brokers [2011] IRLR 420 at [19] and Woods v W M Car Services (Peterborough) Ltd, note 65 above, at 698. 110. North v Television Corporation Ltd, note 10 above, at 609 per Smithers and Evatt JJ, a proposition adopted in over 20 Australian superior court decisions. 111. Rankin v Marine Power International Pty Ltd, note 6 above, at [271] and [277]. 112. North v Television Corporation Ltd, note 10 above, at 609 per Smithers and Evatt JJ (‘Until the terms of the contract are known and identified it is impossible to say whether or not any particular conduct is … a breach of such gravity or importance as to indicate a rejection or repudiation of the contract’); Bruce v AWB Pty Ltd, note 42 above, at [15]; Randall v Aristocrat Leisure Ltd, note 6 above, at [448]. 113. See Rankin v Marine Power International Pty Ltd, note 6 above, at [254]–[257]. 114. North v Television Corporation Ltd, note 10 above, at 603; Blyth Chemicals Ltd v Bushnell

(1933) 49 CLR 66 at 83; Rankin v Marine Power International Pty Ltd, note 6 above, at [243] and Connor v Grundy Television Pty Ltd, note 53 above, at [63]. 115. Blyth Chemicals Ltd v Bushnell, note 114 above, at 73. 116. Carter v The Dennis Family Corporation, note 105 above, at [42]; Connor v Grundy Television Pty Ltd, note 53 above, at [63] and Redman v Verticon Group Ltd (No 2) (2009) 183 IR 274 at [16]. 117. Briginshaw v Briginshaw (1938) 60 CLR 336 at 361–2 and Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449 at 449–50. 118. Carter v The Dennis Family Corporation, note 105 above, at [46]. 119. Afovos Shipping Co SA v Pagnan, note 24 above, WLR at 203; All ER at 455. 120. See, for example, Gunton v Richmond-upon-Thames London Borough Council, note 5 above, Ch at 468; All ER at 589 per Buckley LJ (‘almost invariably repudiatory in character’); Jarrett v Commissioner of Police (NSW) (2005) 224 CLR 44; 221 ALR 95; 145 IR 194 at [57]; APESMA v Skilled Engineering Pty Ltd (1994) 122 ALR 471 at 479 and Automatic Fire Sprinklers Pty Ltd v Watson, note 6 above. 121. Tullett Prebon (Aust) Pty Ltd v Simon Purcell (2008) 175 IR 414; [2008] NSWSC 852 at [24]; Thomas Marshall (Exports) Ltd v Guinle [1979] Ch 227; [1978] 3 All ER 193 and Gunnedah Shire Council v Grout, note 64 above, ALR at 165–6; IR at 159. 122. Laws v London Chronicle (Indicator Newspapers) Ltd, note 6 above, at 287; Randall v Aristocrat Leisure Ltd, note 6 above, at [448]; Afovos Shipping Co SA v Pagnan, note 24 above, WLR at 202–3; All ER at 455 and Universal Cargo Carriers Corp v Citati, note 27 above, at 438. 123. Universal Cargo Carriers Corp v Citati, note 27 above, at 429–30 and Federal Commerce and Navigation Co Ltd v Molena Alpha Inc, note 106 above, AC at 778 and 782–3; All ER at 313–4 and 317; on the differences between contractual and common law rights to terminate, see 10.19. 124. Federal Commerce and Navigation Co Ltd v Molena Alpha Inc, note 106 above, AC at 779, 782– 3, 785; All ER at 313–4, 317 and 319. 125. Re Rubel Bronze and Metal Co Ltd, note 2 above, at 322–3 (‘The refusal must of course be substantial in the sense that it is not a mere repudiation of some minor rights of the servant or of non-vital provisions of the contract of employment’); Afovos Shipping Co SA v Pagnan, note 24 above, WLR at 202–3; All ER at 454–5; Loughridge v Lavery, note 67 above, at 924 and DecroWall International SA v Practitioners in Marketing Ltd, note 5 above, WLR at 380–1; All ER at 233. 126. Koompahtoo, note 20 above, at [54]; J Carter, note 25 above, p 233. 127. Rankin v Marine Power International Pty Ltd, note 6 above, at [264] and Bruce v AWB Pty Ltd, note 42 above, at [15]. 128. Boston Deep Sea Fishing and Ice Co v Ansell (1888) 39 Ch D 339 at 363. 129. Serventi v John Holland Group Pty Ltd [2006] FCA 1049 at [6]. 130. Jupiter General Insurance v Shroff [1937] 3 All ER 67 at 73–4. 131. Randall v Aristocrat Leisure Ltd, note 6 above, at [449] and [470] and Sheldrick v WT Partnership (Aust) Pty Ltd (1998) 89 IR 206 at 235; [1998] FCA 1794 (aff’d (1999) 96 IR 202; [1999] FCA 843). 132. BearingPoint Australia Pty Ltd v Hillard, note 35 above, at [56] and [84]–[111] discussed in

10.57. 133. Adami v Maison de Luxe Ltd, note 57 above, at 154; Connor v Grundy Television Pty Ltd, note 53 above, at [47]–[48]; Koompahtoo, note 20 above, at [54]–[55] and Johnson v Marshall Sons and Co Ltd, note 49 above, at 416–17. 134. See, for example, Carter v The Dennis Family Corporation, note 105 above, at [165] and Rankin v Marine Power International Pty Ltd, note 6 above, at [267] and [346]. 135. Galipienzo v Solution 6 Holdings Ltd, note 49 above, at 144 and Johnson v Marshall Sons and Co Ltd, note 49 above, at 413 (considering the phrase ‘serious misconduct’). 136. See 6.17. 137. Koompahtoo, note 20 above, at [54]–[55]; Federal Commerce and Navigation Co Ltd v Molena Alpha Inc, note 106 above, AC at 783; All ER at 317–8 and Decro-Wall International SA v Practitioners in Marketing Ltd, note 5 above, WLR at 380; All ER at 232. 138. See 6.15, 6.20 and 8.49. 139. Rankin v Marine Power International Pty Ltd, note 6 above, at [247]–[250]. 140. Burazin v Blacktown City Guardian Pty Ltd (1996) 142 ALR 144 at 148–9 and 154; Johnson v Unisys Ltd [2003] 1 AC 518; [2001] 2 All ER 801 at [37], [70] and [77]; Shove v Downs Surgical plc [1984] 1 All ER 7 at 8 and 10; McDonald v Parnell Laboratories Ltd, note 49 above, at [92]; Re Public Service Employee Relations Act [1987] 1 SCR 313 at 368 and Wallace v United Grain Growers Ltd [1997] 152 DLR (4th) 1 at 32–3. 141. Rankin v Marine Power International Pty Ltd, note 6 above, at [247]–[250]; Williams v Printers Trade Services (1984) 7 IR 82 at 85; Johnson v Unisys Ltd, note 140 above, at [77]; Paras v Public Service Body Head of Department of Infrastructure (2006) 152 IR 75; [2006] FCA 622 at [29]; Quinn v Overland (2010) 199 IR 40; [2010] FCA 799 at [108]; Jones v Queensland Tertiary Admissions Centre Ltd [2009] FCA 1382 at [49]; Jarrett v Commissioner of Police (NSW), note 120 above, at [8] and Gooley v Westpac Banking Corporation (1995) 129 ALR 628 at 645. 142. See 14.67, 14.77–14.86. 143. Rankin v Marine Power International Pty Ltd, note 6 above, at [247]–[250]. 144. See, for example, Safety, Rehabilitation and Compensation Act 1988 (Cth) s 14(3); Workers Compensation Act 1951 (ACT) s 82(3); Workers’ Compensation and Rehabilitation Act 2003 (Qld) s 130; Accident Compensation Act 1985 (Vic) s 82(4). 145. Koompahtoo, note 20 above, at [44]; Whittaker v Unisys Australia Pty Ltd, note 64 above, at [32]; Spencer v Dowling, note 96 above, at 160; Cook v CFP Management Pty Ltd, note 96 above, at [17]–[19]; Byrnes v Treloar (1997) 77 IR 332 at 335; Loughridge v Lavery, note 67 above, at 923; Brandeaux Advisers (UK) Limited v Chadwick [2011] IRLR 224 at [44]; Tullett Prebon Plc v BGC Brokers, note 109 above, at [18]–[21]; Bliss v South East Thames Regional Health Authority, note 106 above, at 715 and Laws v London Chronicle (Indicator Newspapers) Ltd, note 6 above, at 287–8. On the effect of an uncommunicated intention to breach an obligation, see Horcal Ltd v Gatland [1984] IRLR 288 (no breach by a director who intended to accept a secret commission from a client; a breach only occurred when he acted on the intention and accepted the payment). As to inability, see Sunbird Plaza Pty Ltd v Maloney, note 89 above, CLR at 264; ALR at 214. 146. Carr v JA Berriman Pty Ltd (1953) 89 CLR 327 at 351 and Lewis v Motorworld Garages Ltd, note 98 above, at 165–6 and 169.

147. Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd, note 71 above, CLR at 658; ALR at 207 per Deane and Dawson JJ; Bliss v South East Thames Regional Health Authority, note 106 above, at 714–15; Lewis v Motorworld Garages Ltd, note 98 above, at 165–6 and 169; RW Jaksh and Associates v Hawks [2005] VSCA 307 at [60] and Universal Cargo Carriers Corp v Citati, note 27 above, at 436. 148. Adami v Maison de Luxe Ltd, note 57 above, at 153–4 and Howard v Pilkington (Australia) Ltd, note 82 above, at [44]. 149. Bliss v South East Thames Regional Health Authority, note 106 above, at 714–15 and Lewis v Motorworld Garages Ltd, note 98 above, at 165–6 and 169. 150. Tullett Prebon Plc v BGC Brokers, note 109 above, at [24] and Eminence Property Developments Ltd v Heaney [2010] EWCA Civ 1168 at [64]. 151. Laws v London Chronicle (Indicator Newspapers) Ltd, note 6 above, at 287 and North v Television Corporation Ltd, note 10 above, at 609. 152. For example Gooley v Westpac Banking Corporation, note 141 above, at 636 and 644–5 (breach of duty to keep information confidential). 153. See 7.73. 154. Easling v Mahoney Insurance Brokers, note 84 above, at [99]; Woods v WM Car Services (Peterborough) Ltd [1981] ICR 666 at 670–1; Bliss v South East Thames Regional Health Authority, note 106 above, at 714–15; Malik v Bank of Credit and Commerce International SA, note 57 above, AC at 35 and 47; All ER at 6 and 16–17; Buckland v Bournemouth University, note 98 above, at [25] and Adami v Maison de Luxe Ltd, note 57 above, at 153–4; see 8.20. It may be necessary when it is alleged the employer’s conduct was ‘calculated’ (rather than likely) to destroy or seriously damage the relationship. 155. Rankin v Marine Power International Pty Ltd, note 6 above, at [267]. 156. Laws v London Chronicle (Indicator Newspapers) Ltd, note 6 above, at 287–8 and RW Jaksh and Associates v Hawks, note 147 above, at [63]–[71]. 157. See Boral Resources (Qld) Pty Ltd v Pyke (1989) 2 Qd R 25 at 33, 41–3 and 51; 93 ALR 89 at 97–8, 105–7 and 115; McDonald v Parnell Laboratories (Aust) Pty Ltd, note 49 above, at [44]– [63] and Australasian Meat Industry Employees Union v Australian Meat Holdings Pty Ltd, note 49 above, at [80]–[95]. 158. Blyth Chemicals Ltd v Bushnell, note 114 above, at 81–3 and Randall v Aristocrat Leisure Ltd, note 6 above, at [449]. 159. Adami v Maison de Luxe Ltd, note 57 above, at 151–2. 160. Transport Commission v Neale Edwards Pty Ltd (1954) 92 CLR 214 at 223 and 228; Boral Resources (Qld) Pty Ltd v Pyke, note 157 above, Qd R at 41–3 and 51; ALR at 105–7 and 115; McDonald v Parnell Laboratories (Aust) Pty Ltd, note 49 above, at [55]–[57] and Lewis v The Great Western Railway Company, note 49 above, at 210–1 and 213. 161. Laws v London Chronicle (Indicator Newspapers) Ltd, note 6 above, at 288 per Lord Evershed MR; Gooley v Westpac Banking Corporation, note 141 above, at 636 and 645–6; Light v Mouchmore, note 49 above, at 651–2; Adami v Maison de Luxe Ltd, note 57 above, at 151–2 and Randall v Aristocrat Leisure Ltd, note 6 above, at [444]. 162. Johnson v Marshall, Sons & Co Ltd, note 49 above, at 411, 412 and Gooley v Westpac Banking Corporation, note 141 above, at 636 and 645–6; see also Carter v The Dennis Family Corporation, note 105 above, at [167] and Sheldrick v WT Partnership (Aust) Pty Ltd, note 131

above, IR at 235 (aff’d (1999) 96 IR 202; [1999] FCA 843). 163. Adami v Maison de Luxe Ltd, note 57 above, at 152–3. 164. Howard v Pilkington (Australia) Ltd, note 82 above, at [141]. 165. North v Television Corporation Ltd, note 10 above, at 610; Connor v Grundy Television Pty Ltd, note 53 above, at [65] and Sheldrick v WT Partnership (Aust) Pty Ltd, note 131 above, IR at 235; (aff’d (1999) 96 IR 202; [1999] FCA 843). 166. Transport Commission v Neale Edwards Pty Ltd, note 160 above, at 223 and 228. 167. Boral Resources (Qld) Pty Ltd v Pyke, note 157 above, Qd R at 41; ALR at 105. 168. Concut Pty Ltd v Worrell, note 7 above, at [51]; see also Elko v Electrical Trades Union of Australia, New South Wales Branch (1983) 5 IR 267 at 270 (‘misconduct is of such aggravated character’). 169. Rankin v Marine Power International Pty Ltd, note 6 above, at [245]–[246] and Randall v Aristocrat Leisure Ltd, note 6 above, at [449]. 170. See 10.9 and the cases at note 156. 171. Carter v The Dennis Family Corporation, note 105 above, at [41]. 172. Rankin v Marine Power International Pty Ltd, note 6 above, at [267]; Jupiter General Insurance v Shroff, note 130 above, at 73–4 and Elcom v Electrical Trades Union of Australia, New South Wales Branch, note 168 above, at 270. 173. Jupiter General Insurance v Shroff, note 130 above, at 73–4 per Lord Maugham. As to abuse by employers, see Isle of Wight Tourist Board v JJ Coombes [1976] IRLR 413 (‘She is an intolerable bitch on a Monday morning’); Courtaulds Northern Textiles Ltd v Andrews [1979] IRLR 84 (‘You can’t do the bloody job anyway’); Moores v Bude-Stratton Town Council [2000] IRLR 676 (‘a lying toe-rag’). 174. See, for example, McDonald v Parnell Laboratories Ltd, note 49 above, at [61]; Byrnes v Treloar, note 145 above, at 335–6; Rankin v Marine Power International Pty Ltd, note 6 above, at [263]; Scharmann v Apia Club Ltd, note 45 above, at 164–5; Adami v Maison de Luxe Ltd, note 57 above, at 148–9, an approach mirrored in older cases like Temple v Prescott (1773) Cal Mag Cas 14; Callo v Brouncker (1831) 4 Car P 518; 172 ER 807 and Edwards v Levy (1860) 2 F & F 94; 175 ER 974. 175. McDonald v Parnell Laboratories (Aust) Pty Ltd, note 49 above, at [61] (dishonest breach). 176. Boston Deep Sea Fishing and Ice Company v Ansell, note 128 above, at 363 per Bowen LJ. 177. Boston Deep Sea Fishing and Ice Company v Ansell, note 128 above, at 357–8, 364 and 370–1: see 7.100. 178. Koompahtoo, note 20 above, at [44]. 179. See 10.70 and 10.71; J Carter, note 25 above, pp 577–8 and Marks v CCH Australia Ltd [1999] 3 VR 513 at [55]. 180. Associated Newspapers v Bancks, note 18 above, at 339–40; Carr v JA Berriman Pty Ltd, note 146 above, at 350–2; McDonald v South Australia (2008) 172 IR 256; [2008] SASC 134 at [424]–[439] (rev’d on other grounds (2009) 104 SASR 344; 185 IR 45; [2009] SASC 219) (failure to treat grievance seriously and other breaches). 181. Shevill v Builders Licensing Board, note 42 above, CLR at 630; ALR at 311. 182. BearingPoint Australia Pty Ltd v Hillard, note 35 above, at [56] and [84]–[111].

183. Omilaju v Waltham Forest London Borough Council (No 2), note 84 above, at [19]; Pepper v Webb [1969] 1 WLR 514 at 517; 2 All ER 216 at 218; Lewis v Motorworld Garages Ltd, note 98 above, at 165 and 169; Horkulak v Cantor Fitzgerald International, note 84 above, at 708–9 (varied on other grounds [2005] ICR 402); Boston Deep Sea Fishing and Ice Company v Ansell, note 128 above, at 363 and Logan v Customs and Excise Commissioners [2003] EWCA Civ 1068. 184. John Lysaght (Australia) Ltd v Federated Iron Workers Association [1972] AILR 517; Lewis v Motorworld Garages Ltd, note 98 above, at 165 and 169–70; McCasker v Darling Downs Cooperative Bacon Association Ltd (1988) 25 IR 107 at 114; Connor v Grundy Television Pty Ltd, note 53 above, at [49]–[50]; Portilla v BHP Billiton Iron Ore Pty Ltd (2005) 147 IR 1 at [133] and Omilaju v Waltham Forest London Borough Council (No 2), note 84 above, at [21]. 185. Omilaju v Waltham Forest London Borough Council (No 2), note 84 above, at [19]–[22]. 186. Connor v Grundy Television Pty Ltd, note 53 above, at [54]; Omilaju v Waltham Forest London Borough Council (No 2), note 84 above, at [14] and Lewis v Motorworld Garages Ltd, note 98 above, at 169. 187. Omilaju v Waltham Forest London Borough Council (No 2), note 84 above, at [16]. 188. Omilaju v Waltham Forest London Borough Council (No 2), note 84 above, at [20] per Glidewell LJ; Lewis v Motorworld Garages Ltd, note 98 above, at 165 and 169; Horkulak v Cantor Fitzgerald International, note 84 above, at 708 (varied on other grounds [2005] ICR 402) and McDonald v South Australia, note 180 above, at [424]–[439] (rev’d on other grounds (2009) 104 SASR 344; 185 IR 45; [2009] SASC 219). 189. Visscher v Guidice, note 19 above, at [53]; Automatic Fire Sprinklers Pty Ltd v Watson, note 6 above, at 451, 466, 469 and 473; Byrne v Australian Airlines Ltd, note 7 above, CLR at 427–8; ALR at 432; Jarrett v Commissioner of Police (NSW), note 120 above, at [7] and [30]; Malik v Bank of Credit and Commerce International SA, note 57 above, AC at 35–6; All ER at 6 and Rigby v Ferodo Ltd, note 20 above, at 34–5. 190. See, for example, Holland v Wiltshire (1954) 90 CLR 409 at 419 and 422 and Rigby v Ferodo Ltd, note 20 above, at 34–5 (the breach was a unilateral reduction in wages). 191. See, for example, Visscher v Guidice, note 19 above, at [53]; Automatic Fire Sprinklers Pty Ltd v Watson, note 6 above; Malik v Bank of Credit and Commerce International SA, note 57 above, AC at 35–6; All ER at 6; Australian National Airlines Commission v Robinson, note 58 above, at 91; Cranleigh Precision Engineering Ltd v Bryant, note 57 above, at 1304–5 and Conway-Cook v Town of Kwinana (2001) 108 IR 421; [2001] WASCA 250 at [29]–[37]. 192. See the cases at note 189. 193. White v Bristol Rugby Ltd [2002] IRLR 204 at [58]; Thomas Marshall (Exports) Ltd v Guinle, note 121 above, Ch at 243; All ER at 205 and Cranleigh Precision Engineering Ltd v Bryant, note 57 above, at 1303–5 are examples of wrongful resignations in which the employer elected not to terminate the contract. 194. Cheall v Association of Professional Executive Clerical and Computer Staff [1983] 2 AC 180 at 189–90; Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at 440–2; Thompson v ASDA-MFI Group Plc [1988] Ch 241 at 266; [1988] 2 All ER 722 at 741 and Micklefield v SAC Technology Ltd [1990] 1 WLR 1002 at 1006–8. 195. See 12.32. 196. See 11.19.

197. In Brompton v AOC International Ltd [1997] IRLR 639 the period was over six years: see further at 10.89. 198. Boston Deep Sea Fishing and Ice Co v Ansell, note 128 above, at 352; Healey v Societe Anonyme Francaise Rubastic [1917] 1 KB 946 at 947 and Brandeaux Advisers (UK) Limited v Chadwick, note 145 above, at [51]–[56]. 199. Rigby v Ferodo Ltd, note 20 above, at 34–5. The effect of the employer’s unilateral reduction of the wages is discussed in 6.17. 200. Australian National Airlines Commission v Robinson, note 58 above, at 91. 201. Byrne v Australian Airlines Limited, note 7 above, CLR at 427–8; ALR at 432; Automatic Fire Sprinklers Pty Ltd v Watson, note 6 above, at 454, 461, 469; Visscher v Guidice, note 19 above, at [53]–[55]; Jarrett v Commissioner of Police (NSW), note 120 above, at [7] and [30]; Re Associated Dominions Assurance Society Pty Ltd (1962) 109 CLR 516 at 518; Lister v Forth Dry Dock & Engineering Co Ltd [1990] 1 AC 546 at 568; [1989] 1 All ER 1134 at 1146; Delaney v Staples [1992] 1 AC 687 at 693; 1 All ER 944 at 948; British Fuels Ltd v Baxendale [1999] 2 AC 52 at 76; [1998] 4 All ER 609 at 620–1 and Conway-Cook v Town of Kwinana, note 191 above, at [29]. 202. Tullett Prebon (Australia) Pty Ltd v Purcell, note 71 above, at [41]–[43]; Visscher v Guidice, note 19 above, at [54]–[59]; Automatic Fire Sprinklers Pty Ltd v Watson, note 6 above, at 469; Peter Turnbull and Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd, note 66 above, at 247 and 250–1 and Park v Brothers (2005) 222 ALR 421 at [41]–[43]. 203. Visscher v Guidice, note 19 above, at [54]; see 9.9 and 14.39. 204. J Carter, note 25 above, pp 561–7; White and Carter (Councils) Ltd v McGregor [1962] AC 413 at 428–9; [1961] 3 All ER 1178 at 1181 and Decro-Wall International SA v Practitioners in Marketing Ltd, note 5 above, WLR at 370; All ER at 223. 205. See 14.36–14.38. 206. Automatic Fire Sprinklers Pty Ltd v Watson, note 6 above, at 452, 463–4; see 9.13–9.16. 207. See 9.13–9.14. 208. Foggo v O’Sullivan Partners (Advisory) Pty Ltd, note 27 above, at [105]–[111] and 9.49. 209. See 9.10. 210. Williamson v The Commonwealth (1907) 5 CLR 174 at 185; Automatic Fire Sprinklers Pty Ltd v Watson, note 6 above, at 451–3, 463–4 and 476; Lucy v The Commonwealth (1923) 33 CLR 229 at 248, 253; Fewings v Tisdal (1847) 1 Ex 295; 154 ER 125; Darlow v Edwards (1862) 1 H C 547; 158 ER 1002; Emmens v Elderton, note 4 above, ER at 613–14, 617–18 and 618 and Thompson v ASDA-MFI Group Plc, note 194 above, Ch at 266; All ER at 741. 211. See Foran v Wight, note 19 above, CLR at 395–7; ALR at 420–2; Peter Turnbull and Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd, note 66 above, at 252–3 and Park v Brothers, note 202 above, at [41]–[43]. 212. Visscher v Guidice, note 19 above, at [59]; Tullett Prebon (Aust) Pty Ltd v Purcell, note 121 above, at [26]; Whittaker v Unisys Australia Pty Ltd, note 64 above, at [39]; Peter Turnbull & Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd, note 66 above; Carr v JA Berriman Pty Ltd, note 146 above, at 349; Decro-Wall International SA v Practitioners in Marketing Ltd, note 5 above, WLR at 375–6 and 382; All ER at 228–9 and 234–5 and Shindler v Northern Raincoat Co Ltd, note 17 above, WLR at 1048; All ER at 249.

213. Tanaka v Tokyo Network Computing Pty Ltd [2003] NSWSC 1114 at [89] (aff’d [2004] NSWCA 263) and Ogle v Comboyuro Investments Pty Ltd (1976) 136 CLR 444 at 451; 9 ALR 309 at 313. 214. Norwest Holst Group Administration Ltd v Harrison, note 17 above, at 678, see also at 681; Automatic Fire Sprinklers Pty Ltd v Watson, note 6 above, at 465–6; Turner v Australasian Coal and Shale Employee’s Federation, note 6 above, FCR at 192; ALR at 648 and Hill v CA Parsons & Co Ltd [1972] Ch 305 at 313–4. There may be limitations on that right to retract where an estoppel arises or, perhaps, there is some other detriment limiting the right to retract. 215. Tullett Prebon (Australia) Pty Ltd v Purcell, note 71 above, at [41]–[49]. 216. Automatic Fire Sprinklers Pty Ltd v Watson, note 6 above, at 465–6. 217. Peter Turnbull and Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd, note 66 above, at 250 and Cohen & Co v Ockerby & Co Ltd (1917) 28 CLR 288 at 298. 218. Sunbird Plaza Pty Ltd v Maloney, note 89 above, CLR at 264; ALR at 214; Buckland v Bournemouth University, note 98 above, at [32]–[44], [52]–[53]; see also Martech International Pty Ltd v Energy World Corporation Limited, note 103 above, at [19] and Rankin v Marine Power International Pty Ltd, note 6 above, at [254]. 219. Sunbird Plaza Pty Ltd v Maloney, note 89 above, CLR at 264; ALR at 214; J Carter, note 25 above, pp 492–9 and 8.28. 220. Howard v Pickford Tool Co Ltd [1951] 1 KB 417 at 421 and 422; Hochster v De La Tour, note 26 above, ER at 928 and Shindler v Northern Raincoat Co Ltd, note 17 above, WLR at 1048; All ER at 249; cf Martin v Stout [1925] AC 359 at 368 (concerning where the breach occurred). 221. See, for example, Martech International Pty Ltd v Energy World Corporation Limited, note 103 above, at [19] and Rigby v Ferodo Ltd, note 20 above. 222. See 15.52. 223. This distinction is discussed in more detail at 10.25–10.27. 224. Newbon v City Mutual Life Assurance Society Ltd (1935) 52 CLR 723 at 733. 225. Wendt v Bruce (1931) 45 CLR 245 at 253; on the requisite degree of knowledge see 10.103. 226. Rigby v Ferodo Ltd, note 20 above, at 35. 227. Larking v Great Western (Nepean) Gravel Ltd (1940) 64 CLR 221 at 229, 230 and 236–8 (promise to build a fence was a once and for all breach whereas the promise to maintain it would have been a continuing breach); Peter Turnbull & Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd, note 66 above; National Coal Board v Galley [1958] 1 All ER 91 at 101–2; Mann v Capital Territory Health Commission (1982) 148 CLR 97 at 101; 42 ALR 46 at 48 and Norwest Holst Group Administration Ltd v Harrison, note 17 above, at 681. 228. Wendt v Bruce, note 225 above, at 253 and Ogle v Comboyuro Investments Pty Ltd, note 213 above, CLR at 450; ALR at 312–13. 229. Howard v Pickford Tool Co Ltd, note 220 above, at 421 per Asquith LJ and Rigby v Ferodo Ltd, note 20 above, at 35. 230. McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457 at 469–70 and 476–7; Johnson v Agnew [1980] AC 367 at 392–3; [1979] 1 All ER 883 at 889; Heyman v Darwins Ltd, note 16 above, AC at 367–8, 379 and 399; All ER at 344, 350 and 361; Re Dingjan; Ex parte Wagner (1995) 183 CLR 323 at 341; 128 ALR 81 at 92; General Billposting Co Ltd v Atkinson [1909] AC 118 at 121–2; Whittaker v Unisys Australia Pty Ltd, note 64 above, at [40] and Martin v Stout, note 220 above, at 364.

231. Boston Deep Sea Fishing and Ice Co v Ansell, note 128 above, at 365 per Bowen LJ. 232. McDonald v Dennys Lascelles Ltd, note 230 above, at 469–70 and 476–7; Johnson v Agnew, note 230 above, AC at 392–3; All ER at 889 and Heyman v Darwins Ltd, note 16 above, AC at 399– 400; All ER at 361. 233. Heyman v Darwins Ltd, note 16 above, AC at 399; All ER at 360–1 and Boston Deep Sea Fishing and Ice Co v Ansell, note 128 above, at 365. 234. Heyman v Darwins Ltd, note 16 above, AC at 379; All ER at 350 per Lord Wright (‘It remains alive for the awarding of damages’); on specific performance see Johnson v Agnew, note 230 above, AC at 392–3; All ER at 889 and 15.13. This is subject to some exceptions such as when relief against forfeiture is sought. 235. Sargent v ASL Developments Ltd (1974) 131 CLR 634 at 655; 4 ALR 257 at 273–4 and Ogle v Comboyuro Investments Pty Ltd, note 213 above, CLR at 451; ALR at 313. On the withdrawal of notice see 11.68; on the retraction of a repudiation see 10.66. 236. Newbon v City Mutual Life Assurance Society Ltd, note 224 above, at 733. On one view there was an unusual application of this principle in Brackenridge v Toyota Motor Corporation Australia Ltd, note 51 above, where the employee committed a substantial breach and the employer accepted it by offering a new contract to the employee in a demoted position. 237. See, for example, Blackadder v Ramsey Butchering Services Pty Ltd (2005) 221 CLR 539; 215 ALR 87; 139 IR 338; Australasian Meat Industry Employees’ Union v G & K O’Connor Pty Ltd (2000) 100 IR 383; [2000] FCA 627 at [51]–[58] and South Australia v Day (2000) 78 SASR 270; [2000] SASC 451 at [27]. 238. McDonald v Dennys Lascelles Ltd, note 230 above, at 469–70 and 476–7; Westralian Farmers Ltd v Commonwealth Agricultural Service Engineers Ltd (in liq) (1936) 54 CLR 361 at 379 and Matthews v Cool Or Cosy Pty Ltd (2004) 136 IR 156; [2004] WASCA 114 at [62]. 239. McDonald v Dennys Lascelles Ltd, note 230 above, at 476–7. 240. Taylor v Laird (1856) 1 H & N 266; 156 ER 1203 at 1206 per Pollock CB (the contract providing for a monthly salary ‘gives a cause of action as each month accrues, which, once vested, is not subsequently lost or divested by the plaintiff’s desertion or abandonment of his contract’); Button v Thompson (1869) LR 4 CP 330; Warburton v Heywood (1880) 6 QBD 1 and Boston Deep Sea Fishing and Ice Company v Ansell, note 128 above, at 360–1 and 366–7 (accrued but unpaid commission was recoverable by employee despite justifiable termination for misconduct). 241. See Walsh v Walleye (1874) [LR] 9 QB 367 and William Robinson & Co Ltd v Heuer [1898] 2 Ch 451 at 458. 242. Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd (1938) 61 CLR 286 at 300. 243. See, for example, Salomon v Brownfield (1896) 12 TLR 239; Bilbee v Hasse & Co (1889) 5 TLR 677 at 678; Levy v Goldhill [1917] 2 Ch 297; British Bank for Foreign Trade Ltd v Novinex Ltd [1949] 1 KB 623; Sellers v London County Newspapers [1951] 1 KB 784 (employee paid commission on orders for advertisements acquired during employment that were published after employment terminated); Gold v Life Assurance Co of Pennsylvania [1971] 2 Lloyd’s Rep 164; Wilson v Harper [1908] 2 Ch 370 at 373 and Akmeemana v Murray (2009) 190 IR 66; [2009] NSWSC 979 at [54]–[62]. 244. See, for example, Roberts v Elwells Engineers [1972] 2 QB 586 (remuneration for both introducing and servicing customers) and Marshall v Glanvill [1917] 2 KB 87. 245. See the distinction drawn between primary rights and secondary rights in Moschi v Lep Air

Services Ltd [1973] AC 331 at 347–50; [1972] 2 All ER 393 at 400–3, discussed in S Honeyball and D Pearce, ‘Contract, Employment and the Contract of Employment’ (2006) 35 ILJ 30 at 39– 43. 246. For liquidated damages clauses, see Boucaut Bay Co Ltd v Commonwealth (1927) 40 CLR 98 and Bridge v Campbell Discount Co Ltd [1962] AC 600; 1 All ER 385; for arbitration clauses, see Heyman v Darwins Ltd, note 16 above; for choice of forum clauses, see Port Jackson Stevedoring Pty Ltd v Salmond & Spraggon (Australia) Pty Ltd (1980) 144 CLR 300 at 306–7; 30 ALR 588 at 595; for exclusion clauses, see Photo Production Ltd v Securicor Transport Ltd [1980] AC 827; 1 All ER 556 and Micklefield v SAC Technology Ltd, note 194 above, at 1006–8. 247. See the dicta in Boyo v Lambeth London Borough Council, note 5 above, at 743. 248. Del Casale v Artedomus (Aust) Pty Ltd (2007) 73 IPR 326; (2007) 165 IR 148 at [32]–[35] and [76]–[100]; see further at 16.43. 249. Terms requiring the provision of a reference are, of their nature, likely to survive termination of the contract. Such express terms are rare, and implied terms rarer still: see 16.52. The implied duty of mutual trust and confidence probably does not survive the termination of the contract: Bednall v Wesley College [2005] WASC 101 at [72]. 250. General Billposting Co Ltd v Atkinson, note 230 above, at 121–2 and Kaufman v McGillicuddy (1914) 19 CLR 1 at 10 and 14. 251. Briggs v Oates [1990] ICR 473; [1991] 1 All ER 407; Rock Refrigeration Ltd v Jones [1997] ICR 938; [1997] 1 All ER 1 and J Heydon, The Restraint of Trade Doctrine, 3rd ed, LexisNexis Butterworths, Australia, 2008, pp 313–14. Doubt has been expressed by S Honeyball and D Pearce, ‘Contract, Employment and the Contract of Employment’ (2006) 35 ILJ 30 at 39 about the appropriateness of this line of authority; see also Campbell v Frisbee [2002] EWCA 134 noted by M Freedland, ‘Note on Repudiation of Contract and Breach of Confidence: General Billposting v Atkinson Revisited’ (2003) 32 ILJ 48 at 49–52. 252. Measures Bros Ltd v Measures, note 7 above, at 256 and Geraghty v Minter (1979) 142 CLR 177 at 187; 26 ALR 141 at 150; see further at 15.52. 253. Wendt v Bruce, note 225 above, at 253 and 257 and Sargent v ASL Developments Ltd, note 235 above, CLR at 655; ALR at 274. 254. Bowes v Chaleyer (1923) 32 CLR 159 at 169. 255. Rigby v Ferodo Ltd, note 20 above, at 35. On specific performance of contracts, see 15.15. 256. Decro-Wall International SA v Practitioners in Marketing Ltd, note 5 above, WLR at 375–6; All ER at 228–9; see also Visscher v Guidice, note 19 above, at [55] and Eastwood v Magnox Electric plc, note 20 above, at [40]. 257. State of Victoria v Sutton (1998) 198 CLR 291 at [40]; Immer (No 145) Pty Ltd v Uniting Church in Australia Property Trust (NSW) (1993) 182 CLR 26 at 41–2; 112 ALR 609 at 619–20; Agricultural & Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570; 251 ALR 322 at [56] and [58]. 258. Sargent v ASL Developments Ltd, note 235 above, CLR at 641; ALR at 262. On the effect of an election on subsequent breaches and continuing breaches see 10.69–10.72; on undiscovered breaches and cumulative breaches, see 10.54–10.58 and 10.100–10.103. 259. Wendt v Bruce, note 225 above, at 253 and R v Paulson [1921] 1 AC 271 at 284; or as Jordan CJ prosaically put it: ‘you cannot have the egg and the halfpenny too’: O’Connor v SP Bray Ltd (1936) 36 SR (NSW) 248 at 257 (rev’d (1936) 56 CLR 464).

260. Norwest Holst Group Administration Ltd v Harrison, note 17 above, at 679 and Agrokor AG v Tradigrain SA [2000] 1 Lloyd’s Rep 497 at 501. 261. Tropical Traders Ltd v Goonan (1964) 111 CLR 41 at 55; Sargent v ASL Developments Ltd, note 235 above, CLR at 646; ALR at 266; Re Reid (2007) 163 IR 392; [2007] FCA 417 at [19]–[20] and Egan v Maher [No 2] (1978) 35 FLR 252 at 263–4; see 3.5. 262. Wendt v Bruce, note 225 above, at 253; Newbon v City Mutual Life Assurance Society Ltd, note 224 above, at 733; Sargent v ASL Developments Ltd, note 235 above, CLR at 655–6; ALR at 273–4 and Hoad v Swan, note 43 above, at 263. 263. Johnson v Agnew, note 230 above, AC at 398; All ER at 894. 264. See the cases at note 235. 265. Immer (No 145) Pty Ltd v Uniting Church in Australia Property Trust (NSW), note 257 above, CLR at 42; ALR 609 at 620. See 14.25–14.27 and 10.70–10.71 on the distinction between a once and for all breach and a continuing breach. 266. See 15.13. 267. Automatic Fire Sprinklers Pty Ltd v Watson, note 6 above, at 450 and 466 and Gunton v Richmond-upon-Thames London Borough Council, note 5 above, Ch at 468; All ER at 588–9. 268. See 10.61. 269. See 10.63. 270. See 15.20. 271. Byrne v Australian Airlines Limited, note 7 above, CLR at 427–8; ALR at 432 and Visscher v Guidice, note 19 above, at [53]–[55]. 272. See the cases at note 193. 273. See 14.38–14.39. 274. See, for example, Brompton v AOC International Ltd, note 197 above and Hill v C A Parsons & Co Ltd, note 214 above, Ch at 313–4; All ER at 1349. On dependent and independent obligations to pay wages, see 9.9 and 9.13. 275. Hill v CA Parsons & Co Ltd [1972] Ch 305; [1971] 3 All ER 1345 and Turner v Australasian Coal and Shale Employee’s Federation, note 6 above, FCR at 191–2; ALR at 647–8. 276. Automatic Fire Sprinklers Pty Ltd v Watson, note 6 above, at 465–6. See also Re Associated Dominion Assurance Society Pty Ltd, note 201 above, at 518–19. 277. See 13.20. 278. Automatic Fire Sprinklers Pty Ltd v Watson, note 6 above, at 465–6; General Billposting Co Ltd v Atkinson, note 230 above, at 121–2 and Metcash Ltd v Jardim (2010) 273 ALR 407; [2010] NSWSC 1096 at [43]. 279. Visscher v Guidice, note 19 above, at [69]; see also Rigby v Ferodo Ltd, note 20 above, and Rogan-Gardiner v Woolworths Ltd [2010] WASC 290 at [148]–[152]. 280. Rigby v Ferodo Ltd, note 20 above, discussed further in 6.24. 281. North v Television Corporation Ltd, note 10 above, at 603; Blyth Chemicals Ltd v Bushnell, note 114 above, at 83 and Rankin v Marine Power International Pty Ltd, note 6 above, at [243]. 282. Omilaju v Waltham Forest London Borough Council (No 2), note 84 above, at [14] and [22]; Horkulak v Cantor Fitzgerald International, note 84 above, at [34] (varied [2005] ICR 402) and

Easling v Mahoney Insurance Brokers, note 84 above, at [2], [9] and [128]; see also 10.30. 283. British and Beningtons Ltd v North Western Cachar Tea Co Ltd [1923] AC 48 at 71–2 and Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359 at 377–8. 284. Shepherd v Felt and Textiles of Australia Ltd, note 283 above, at 371 per Rich J, see also at 373 and 377 and Boston Deep Sea Fishing and Ice Co v Ansell, note 128 above, at 352 and 364. 285. Concut Pty Ltd v Worrell, note 7 above, at [29] per Gleeson CJ, Gaudron and Gummow JJ, see also at [42] and [51](5); Shepherd v Felt and Textiles of Australia Ltd, note 283 above, at 370–1, 373 and 377 and Boston Deep Sea Fishing and Ice Co v Ansell, note 128 above, at 352 and 364. 286. Concut Pty Ltd v Worrell, note 7 above, at [29], [42] and [51]; Shepherd v Felt and Textiles of Australia Ltd, note 283 above, at 370–1, 373 and 377; Sunbird Plaza Pty Ltd v Maloney, note 89 above, CLR at 264; ALR at 214 (repudiation) and RW Jaksh and Associates v Hawks, note 147 above, at [61] (repudiation by employee). 287. See, for example, Malik v Bank of Credit and Commerce International SA, note 57 above, AC at 35–6 and 48–9; All ER at 6 and 18. 288. Weathersfield Ltd v Sargent [1999] ICR 425 at 432–3. 289. See 10.100–10.102 and Panchaud Frères SA v Etablissements General Grain Co [1970] 1 Lloyd’s Rep 53 discussed in J Carter, note 25 above, pp 494–8. 290. See the decisions in the House of Lords in W Devis & Sons Ltd v Atkins [1977] 3 All ER 40; [1977] 3 WLR 214; West Midlands Co-op Society Ltd v Tipton [1986] AC 536 and Polkey v AE Dayton Services Ltd [1988] AC 344; [1987] 3 All ER 974; cf Byrne v Australian Airlines Ltd, note 7 above, CLR at 430; ALR at 434 and Lane v Arrowcrest Group Pty Ltd (1990) 27 FCR 427 at 456; 99 ALR 45 at 74–5. 291. Lakshmi v Mid Cheshire Hospitals NHS Trust [2008] IRLR 956 at [32]. 292. On contractual and statutory limits on the right to terminate and give notice, see 11.13–11.27 and 11.31–11.36. 293. Universal Cargo Carriers Corp v Citati, note 27 above, at 438; Norwest Holst Group Administration Ltd v Harrison, note 17 above, at 679 and 683; Martin v Stout, note 220 above, at 364; Afovos Shipping Co SA v Pagnan, note 24 above, WLR at 203; All ER at 455 and Peter Turnbull & Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd, note 66 above, at 250. 294. Boston Deep Sea Fishing and Ice Co v Ansell, note 128 above, at 352 and Healey v Societe Anonyme Francaise Rubastic, note 198 above, at 947. 295. Sargent v ASL Developments Ltd, note 235 above, CLR at 656; ALR at 274; WE Cox Toner (International) Ltd v Crook [1981] ICR 823 at 828 and Tropical Traders Ltd v Goonan, note 261 above, at 55. 296. Sargent v ASL Developments Ltd, note 235 above, CLR at 641 and 656; ALR at 262 and 274; Immer (No 145) Pty Ltd v Uniting Church in Australia Property Trust (NSW), note 257 above, CLR at 30 and 41; ALR at 610–11 and 619–20 and Almond Investors Limited v Kualitree Nursery Pty Limited, note 58 above, at [82]. In Brompton v AOC International Ltd, note 197 above, the employee did not make an election for six years between the date of the wrongful dismissal and the employee’s death and in Vine v National Dock Labour Board, note 5 above, at 677; 1 All ER 1 at 10 and on appeal at [1957] AC 488 at 503 and 507; [1956] 3 All ER 939 at 946 and 948 there was a gap of 14 months between the wrongful dismissal and seeking a declaration. 297. Shields Furniture Ltd v Goff [1973] ICR 187 at 190; 2 All ER 653 at 655–6.

298. Bliss v South East Thames Regional Health Authority, note 106 above, at 715–6; Buckland v Bournemouth University, note 98 above, at [54]–[56] (no affirmation during disciplinary inquiry and later stayed until the employee’s students had finished their exams) and Air Canada v Lee [1978] ICR 1202 (no acceptance during trial of four weeks); see also Sheet Metal Components Ltd v Plumridge [1974] ICR 373 at 376; Almond Investors Limited v Kualitree Nursery Pty Limited, note 58 above, at [69]–[73] (trying to reach a negotiated settlement was not an election); Marriott v Oxford and District Co-operative Society Ltd (No 2), note 76 above (looking for other work for a month) and Logan v Customs and Excise Commissioners, note 183 above. 299. Holland v Wiltshire, note 190 above, at 415 per Dixon CJ (cf Kitto J at 420) and Cromer v Harry Rickards’ Tivoli Theatres Ltd [1921] SASR 325. 300. Champtaloup v Thomas [1976] 2 NSWLR 264 at 269 and WE Cox Toner (International) Ltd v Crook, note 295 above, at 828–9. 301. Concut Pty Ltd v Worrell, note 7 above, at [23]; Dover Fisheries Pty Ltd v Bottrill Research Pty Ltd (1994) 63 SASR 557 at 573–4; Marks v CCH Australia Ltd, note 179 above, at [53] and Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 at 30; 57 ALR 609 at 618. See also Tokyo Network Computing Pty Ltd v Tanaka [2004] NSWCA 263 at [7]. Amann Aviation Pty Ltd v Commonwealth, note 55 above, FCR at 544 and 554 and Carter v The Dennis Family Corporation, note 105 above, at [13] and [23] are examples of contracts in which the termination provisions evinced a different intent. 302. Taylor v Raglan [1981] 2 NSWLR 117 at 135–7. 303. See 10.86. 304. Ali v Southwark London Borough Council [1988] ICR 567 at 577–8 per Millett J; Lakshmi v Mid Cheshire Hospitals NHS Trust, note 291 above, at [32]; Gunton v Richmond-upon-Thames London Borough Council, note 5 above and Dietman v Brent London Borough Council [1987] ICR 737 at 752; cf dicta of Ralph Gibson LJ in Boyo v Lambeth London Borough Council, note 5 above, at 745 and Walker v Zurich Australia Insurance Ltd (2000) 106 IR 23 at [61]–[62] and on appeal at [2001] QCA 296 at [7]–[18]; see further at 11.15. 305. Sargent v ASL Developments Ltd, note 235 above, CLR at 646; ALR at 266; Griffith University v Ivory [1998] 1 Qd R 62 at 66; Air Canada v Lee, note 298 above (agreeing to a trial of an alternative arrangement for four weeks); White v Bristol Rugby Ltd, note 193 above, at [60]; Immer (No 145) Pty Ltd v Uniting Church in Australia Property Trust (NSW), note 257 above, CLR at 38–9 and 41–2; ALR at 617 and 619–20 and Norwest Holst Group Administration Ltd v Harrison, note 17 above, at 679–80 and 682. 306. Cranleigh Precision Engineering Ltd v Bryant, note 57 above, at 1302–3. 307. Ryder v Frohlich [2004] NSWCA 472 at [117] per McColl JA and Lakshmijit v Sherani [1974] AC 605 at 616. 308. Vitol SA v Norelf Ltd (The Santa Clara) [1996] AC 800 at 811; as to communication by agents and indirectly, see Wood Factory Pty Ltd v Kiritos Pty Ltd (1985) 2 NSWLR 105 at 146 and Majik Markets Pty Ltd v S & M Motor Repairs Pty Ltd (No 1) (1987) 10 NSWLR 49 at 54. 309. See 10.98. 310. Sargent v ASL Developments Ltd, note 235 above, CLR at 655–6; ALR at 274 and Octavius Atkinson & Sons Ltd v Morris [1989] ICR 431 at 436. 311. Gunnedah Shire Council v Grout, note 64 above, ALR at 165. 312. Advertiser Newspapers Pty Ltd v Industrial Relations Commission (SA), note 6 above, at [36].

313. Wendt v Bruce (1931) 45 CLR 245. 314. Buckland v Bournemouth University, note 98 above, at [54]–[56]. 315. Agricultural & Rural Finance Pty Ltd v Gardiner, note 257 above, at [56] and [58]. 316. Gunton v Richmond-upon-Thames London Borough Council, note 5 above, Ch at 467; All ER at 588; Martin v Stout, note 220 above, at 362–3; Woolworths (SA) Pty Ltd v Russian (1996) 66 IR 13 and Advertiser Newspapers Pty Ltd v Industrial Relations Commission (SA), note 6 above, at [36]; see Carr v JA Berriman Pty Ltd, note 146 above, at 348. 317. McKenna v Richey [1950] VR 360 at 372 and Conway-Cook v Town of Kwinana, note 191 above, at [29]–[33]; see also the review of authorities concerning the recovery of seamen’s wages in The Fairport [1966] 2 All ER 1026. 318. Johnson v Agnew, note 230 above, AC at 392; All ER at 889 and Ogle v Comboyuro Investments Pty Ltd, note 213 above, CLR at 459–60; ALR at 320–1. 319. Lucy v The Commonwealth, note 210 above, at 238 and 245 (engaging in alternative employment that was forbidden while the contract was on foot); Dietman v Brent London Borough Council, note 304 above, at 755 (aff’d [1988] ICR 852); Gunton v Richmond-upon-Thames London Borough Council, note 5 above, Ch at 468; All ER at 588–9 and Boyo v Lambeth London Borough Council, note 5 above, at 743 and 747; see also White v Bristol Rugby Ltd, note 193 above, at [60]. 320. Brompton v AOC International Ltd, note 197 above (engaging in alternative work out of necessity was not acceptance of repudiation); Conway-Cook v Town of Kwinana, note 191 above, at [33] (accepting casual employment did not disable the employee from accepting other employment); Ryder v Frohlich, note 307 above, at [115]–[125]; Reilly v State of Victoria (1991) 5 VIR 1 at 12; Wright v Groves [2011] QSC 66 at [74]–[75] and Vine v National Dock Labour Board, note 5 above, QB at 677; All ER at 10 and on appeal at [1957] AC 488 at 503 and 507; [1956] 3 All ER 939 at 946 and 948. See also Wheeler v Philip Morris (1989) 97 ALR 282 at 310–11; Bostik (Australia) Pty Ltd v Gorgevski, note 74 above, at 37 and Buckland v Bournemouth University, note 98 above, at [54]. 321. Hoad v Swan, note 43 above, at 264 and Holland v Wiltshire, note 190 above, at 419. 322. Larking v Great Western (Nepean) Gravel Ltd, note 227 above, at 229 at 231, a point mentioned but not decided in Wright v Groves, note 320 above, at [72]–[73]. 323. Western Excavating (ECC) Ltd v Sharp, note 100 above, ICR at 226; QB at 769. 324. See the cases at note 304 and Bashir v Brillo Manufacturing Co [1979] IRLR 295 at [6] (sick leave for 10 weeks). 325. McCasker v Darling Downs Co-operative Bacon Association Ltd, note 184 above, at 114; Easling v Mahoney Insurance Brokers, note 84 above, at [94] and [126] and Henry v London General Transport Services [2002] ICR 910 at 915–16. 326. Rankin v Marine Power International Pty Ltd, note 6 above, at [359]–[362] (continued employment for three months after breach was discovered). 327. See J Carter, note 25 above, pp 485–500. 328. See, for example, Wickham v Commissioner of Police [1997] SASC 7307 and In Re Clarke and Metropolitan Meat Industry Board [1967] AR 16. 329. Agricultural & Rural Finance Pty Ltd v Gardiner, note 257 above, at [56] and [58] per Gummow, Hayne and Kiefel JJ; see also Rankin v Marine Power International Pty Ltd, note 6

above, at [352]–[357]; Phillips v Foxall (1872) LR 7 QB 666 at 680 and Federal Supply Co v Angehrn (1910) 103 LT 150 at 152. 330. Rankin v Marine Power International Pty Ltd, note 6 above, at [352] and Phillips v Foxall, note 329 above, at 680. 331. See 10.94–10.99. 332. See 10.56. 333. Boston Deep Sea Fishing and Ice Co v Ansell, note 128 above, at 358 and 364; Elder’s Trustee and Executor Co Ltd v Commonwealth Homes and Investment Co Ltd (1941) 65 CLR 603 at 616–7 and Condren v Southport Workers Community Club Inc [2010] QSC 130 at [40]. 334. Sargent v ASL Developments Ltd, note 235 above, CLR at 648–9; ALR at 268 per Stephen J. 335. Sargent v ASL Developments Ltd, note 235 above, CLR at 642–3; ALR at 263 and Elder’s Trustee and Executor Co Ltd v Commonwealth Homes and Investment Co Ltd, note 333 above, at 617–8. 336. Rankin v Marine Power International Pty Ltd, note 6 above, at [357] and Federal Supply Co v Angehrn, note 329 above, at 152. 337. Elder’s Trustee and Executor Co Ltd v Commonwealth Homes and Investment Co Ltd, note 333 above, at 617; Sargent v ASL Developments Ltd, note 235 above, CLR at 642; ALR at 263 and Carter v The Dennis Family Corporation, note 105 above, at [124]. 338. Howard v Pilkington (Australia) Ltd, note 82 above, at [139]–[140] (employer elected to do nothing as part of a strategy that was said to have been part of the investigation); Carter v The Dennis Family Corporation, note 105 above, at [121]–[124] and Easling v Mahoney Insurance Brokers, note 84 above, at [95] and [129]. 339. See Sargent v ASL Developments Ltd, note 235 above, CLR at 644–5; ALR at 263; Elder’s Trustee and Executor Co Ltd v Commonwealth Homes and Investment Co Ltd, note 333 above, at 618; Peyman v Lanjani [1985] Ch 457 at 494; [1984] 3 All ER 703 at 729–30 and London Borough of Enfield v Sivanandan [2005] EWCA Civ 10 at [81]–[84]. 340. Rankin v Marine Power International Pty Ltd, note 6 above, at [357]; Federal Supply Co v Angehrn, note 329 above, at 152 and Carter v The Dennis Family Corporation, note 105 above, at [124]. 341. London Borough of Enfield v Sivanandan, note 339 above, at [83]. 342. Almond Investors Limited v Kualitree Nursery Pty Limited, note 58 above, at [69]–[73] and Roadshow Entertainment Pty Limited v ACN 053006269 Pty Limited (1997) 42 NSWLR 462 at 479–81. 343. Allphones Retail Pty Ltd v Hoy Mobile Pty Ltd [2009] FCAFC 85 at [55]–[76]. 344. DTR Nominees Pty Ltd v Mona Homes Pty Ltd, note 42 above, CLR at 433; ALR at 232; Foran v Wight, note 19 above, CLR at 407 (see also at 456); ALR at 427 and 463–4; AMP Services Ltd v Manning [2006] FCA 256 at [45] and Aberdeen City Council v McNeill [2010] IRLR 374 at [83]–[99] and [109]. 345. Foran v Wight, note 19 above, CLR at 437; ALR at 450; Almond Investors Limited v Kualitree Nursery Pty Limited, note 58 above, at [78]; J Carter, note 25 above, p 473; Roadshow Entertainment Pty Limited v ACN 053006269 Pty Limited, note 342 above, at 479–80 and BearingPoint Australia Pty Ltd v Hillard, note 35 above, at [134]; see also Sharjade Pty Limited v The Commonwealth [2009] NSWCA 373 at [51]–[69].

346. Brandeaux Advisers (UK) Limited v Chadwick, note 145 above, at [31]–[32] and Tullett Prebon plc v BGC Brokers LP [2010] EWHC 484 at [81]–[84] (aff’d on other grounds [2011] IRLR 420); cf RDF Media Group Plc v Clements [2008] IRLR 207 at [140]. 347. Roadshow Entertainment Pty Limited v ACN 053006269 Pty Limited, note 342 above, at 481 and Craftsmen Restoration & Renovations Pty Limited v Boland [2011] NSWCA 147 at [51].

[page 680]

Chapter 11 Termination by Notice and Agreement Introduction The Right to Terminate by Giving Notice and its Exercise The right to terminate by notice Exercise of the right to terminate by notice The exercise of the right in a state of emotional distress Contractual Limits on The Right to Terminate Express contractual limits on the right to terminate by notice Fixed term contracts and permanent employment Possible implied contractual limits on the right to give notice Statutory and Public Sector Job Security Provisions Public sector employment generally Limitations on the exercise of powers of dismissal The statutory right to notice Implication of a Term to Provide Reasonable Notice The presumption of yearly hiring: an historical note The term implied and its relationship with other terms and instruments The length of reasonable notice: purpose and general approach Factors in determining the length of reasonable notice [page 681]

Other Matters Relating to Notice Effect of complying and non-complying notice Withdrawal of notice Payment in lieu of notice Termination by agreement

INTRODUCTION 11.1 The law relating to notice can be broadly summarised as follows: subject to any express terms or statutory restrictions to the contrary, each party has the right to give the other party notice of the intention to terminate the contract. The giving of notice is a unilateral right; it does not depend on the acceptance of the notice by the other party: see 11.3. There are few formalities associated with notice. The notice should be clear and it must be received either by the employee or an agent authorised by the employee to receive it. National system employers must give the notice in writing. Notice can be conditional: see 11.8. Notice given by a party in a state of emotional distress may in some circumstances be ineffective: see 11.12. Express terms can limit the right to terminate or give notice. They most often do so by limiting the grounds on which an employer1 can terminate or give notice, or regulating the procedure that must be followed in giving notice. Employees entitled to the benefit of such terms must be given notice for a reason, or in a manner, consistent with the terms: see 11.13–11.16. Notice cannot ordinarily be given to terminate fixed term contracts or contracts for permanent employment: see 11.19–11.22. In some cases there may be implied limitations on the rights to terminate and give notice arising, for example, from the implied terms of trust and confidence or the duty of good faith: see 11.23–11.27. Damages for the breach of express terms limiting the right to terminate and for the breach of fixed term contracts are discussed in 14.64 and 14.60. 11.2 Approximately 20% of Australian employees are engaged in the public sector and roughly half of these employees are engaged under the Public Service Act 1999 (Cth) or its state equivalents.2 Historically, Crown employees and officers (both civil and military) have been the subject of a

series of special powers and implied terms. These have largely [page 682] been replaced by statutory regulation governing their tenure which is considered in 11.28–11.35. Section 117 of the Fair Work Act establishes a minimum period of notice, or payment in lieu of notice, that must be provided to most national system employees: see 11.36. The relationship between that right and express and implied terms governing notice is considered in 11.51. In the absence of express terms regulating the length of the notice to be given the common law will imply a term that the contract is terminable on the provision of reasonable notice. The historical development of the term is traced in 11.40–11.47. The relationship between the implied term and other terms of the contract, industrial instruments and statutes is examined in 11.48–11.51. The purpose of reasonable notice and the general approach to its assessment is set out in 11.52–11.55. In 11.56–11.62 there is a consideration of the factors courts consider relevant, and irrelevant, in the assessment of the length of reasonable notice. A breach of a term governing notice will often be a serious breach or a repudiation of the contract giving rise to a right to terminate. A wrongful dismissal will terminate the employment relationship, but not the employment contract. Breaches of statutes governing job security may have a different effect. These matters are considered in 11.63–11.67. Ordinarily a party cannot withdraw notice that has been validly given without the consent of the party receiving the notice: see 11.68–11.70. There is a difference between the provision of notice and making a payment in lieu of notice. The effect of a payment in lieu of notice depends on what is meant by that ambiguous phrase. The four different types of payments in lieu of notice and their effect are discussed at 11.71–11.79 where there is also an examination of the sources of any right of the employer to make a payment in lieu of notice. There is a discussion in 14.101 of the relationship between the various types of payment in lieu and the duty to mitigate. Finally, in 11.80 there is a discussion of the termination of the

contract by agreement.

THE RIGHT TO TERMINATE BY GIVING NOTICE AND ITS EXERCISE The right to terminate by notice 11.3 The right to give notice in accordance with the contract’s terms is a right which may be exercised unilaterally at any time by either party, subject to any express or implied limits on the exercise of that right: see 11.13–11.16 and 11.23–11.27. As Gray J has stated: [page 683] The giving of notice of termination of a contract, in accordance with the terms of that contract, is a unilateral right. Its exercise does not depend in any way on the acceptance or rejection of the notice by the other party to the contract. The giving of such a notice operates to determine the contract by effluxion of the period of notice …3

The exercise of a right to resign is not in itself a breach of the employee’s duty of fidelity or the exercise of a fiduciary power.4 However, there may be a breach of the contractual and fiduciary duties of fidelity when the employee resigns to pursue a maturing business opportunity that belongs to the employer.5

Tendering a resignation 11.4 The right to give notice is one of the features that distinguish employment from slavery. An employee engaged on a contract of indefinite duration without a right to resign ‘would be enslaved, with hope only in either death or manumission’.6 Sometimes the giving of notice by an employee is colloquially referred to as ‘tendering’ a resignation that the employer may choose to ‘accept’. This usage harks back to the original meaning of ‘resignation’ in law which related to the surrender of offices held under the Crown, in bishoprics and in some corporations. Such a surrender usually required the assent of the Crown, the bishop or the corporation.

Nowadays, ‘expressions such as the tendering and acceptance of a resignation, although commonly used, are merely linguistic courtesies’.7 However, some statutes governing public sector employment (and conceivably some contracts) require that the employer accept the resignation for the notice to be effective.8 The traditional position is [page 684] that, unless altered by statute, the right of Crown servants to unilaterally resign is quite limited, a position that has been altered by most public sector statutes and, perhaps, by an implied constitutional prohibition on slavery.9

Express terms governing notice and probation periods 11.5 Contracts of employment often contain express terms empowering one or both parties to terminate the contract on giving the specified notice. In the United Kingdom such a course is all but statutorily mandated.10 When a statute renders inoperative an express term of the contract governing notice, it may be possible (depending upon the terms of the statute) to imply a term that the contract is terminable on the provision of reasonable notice.11 It is not uncommon, and perfectly acceptable, for contracts to establish different notice periods required of the employer and the employee.12 Contracts may also expressly establish the notice period to be provided by the employer but be silent about the notice period to be provided by the employee. In such cases courts imply a term that the employee is obliged to give reasonable notice and that period may differ from the notice that the contract expressly requires to be provided by the employer.13 [page 685] Probation periods are a common form of notice provision. During this period the parties are usually able to terminate the contract without notice. Statutory protections governing job security are often not extended to

employees during a probation period.14 Some provisions governing probationary periods grant the employee some rights to job security.15

Exercise of the right to terminate by notice Formalities 11.6 The formalities associated with the exercise of a right to give notice are those stipulated in the express terms and any governing statute. Notice is not operative until it is received by the recipient.16 At common law there is no need for any notice to be written, unless there is an express term to the contrary.17 Where an express term stipulates written notice is required then oral notice accepted by the other party is ordinarily sufficient.18 As discussed in 11.36, s 117(1) of the Fair Work Act requires national system employers to give ‘written notice of the day of the termination’ to the employee prior to the termination. A penalty may be imposed for a contravention of that subsection: ss 45 and 539. The meaning of ‘to give’ is, unless the contrary intention appears in the Fair Work Act, governed by ss 28A and 29 of the Acts Interpretation Act 1901 (Cth). Those sections provide that a document is given to the employee by delivering [page 686] it personally, leaving it at the employee’s last known address or sending it by pre-paid post to the employee’s last known address.

Clarity of notice 11.7 Making due allowance for contextual differences, notices to terminate an employment contract belong to the general class of unilateral notices served pursuant to other contractual rights, whether they be notices to quit, notices to determine licences, notices to complete and the like.19 In each case: … an effective notice is one which conveys its message (whatever that message might be) clearly and distinctly to a reasonable reader in the position of the recipient of the notice. Being ‘in the

position of the recipient’ involves, in particular, having the knowledge of the circumstances surrounding the transaction in which the notice is given which the recipient has or ought to have.20

The reasonable recipient must be ‘left in no doubt that the right … is being exercised’.21 The notice must specify when the contract is to terminate or at least contain facts from which that date is ascertainable.22 A statement that ‘the employment will terminate at some date prior to Christmas’ or ‘I intend to give you notice in the next few months’ is not sufficient.23 A mere exhortation to improve performance, even if coupled with a threat to dismiss in the event of a failure to improve, is not the [page 687] giving of notice. In Walton v Wollondilly Abattoirs the court concluded that notice of termination was not given where the employee was ‘put on notice and informed to shape up within three months or hand in his notice of termination of employment’.24 Ordinarily, there is no difference between resigning, tendering a resignation and giving notice of the intention to resign on a specific date.25

Conditional notice 11.8 Notice can be given subject to a condition. Conditional notice raises a series of issues. First, the notice must be certain. In Thickbroom v Newcastle Wallsend Coal Company Pty Ltd the employee in June 1998 was given notice of termination said to ‘have effect’ from 3 August 1998. He was informed the notice would be withdrawn if the employee (or perhaps if a majority of the employees) voted on 13 July in favour of an enterprise bargain proposed by the employer. On 8 July the employer cancelled the vote on the enterprise bargain. The issue was whether valid notice was given in June 1998. The court held the notice was not certain; it was not clear if the notice was to commence immediately or on 3 August. It was also invalid as it was subject to an unfulfilled condition subsequent.26 Second, prior to the fulfilment of the condition there is no valid notice and the notice can be withdrawn.27 Third, once the condition is fulfilled the notice

is valid. In Fardell v Coates Hire Operations Ltd the employee gave the employer notice that would operate unless he was selected for a particular senior position. The employer selected another employee for the position. The court held that once the selection was made the condition was fulfilled and the notice was effective.28 [page 688]

Notice to terminate and notice to vary 11.9 A conditional notice may be valid even if associated with an offer of continued employment, such as when an employee is given valid notice but informed that the notice shall not be effective if the employee accepts a pay cut.29 There is a significant difference between the giving of notice to terminate the contract and the giving of notice to alter its terms. In a number of cases employers have argued that by giving an employee notice of a proposed unilateral variation to the contract the employer was in effect giving the employee notice of termination and making an offer to re-employ on the varied terms after the expiration of the notice. Whether the employer is giving notice of intention to terminate will depend upon the intention of the employer using the ordinary objective approach discussed in 3.5. In making this assessment, much will depend upon the terms of the notice given by the employer and the surrounding context. Quite sensibly, courts are reluctant to conclude that an employer offering continuing employment on different terms is providing notice of termination: see 6.13. 11.10 In Rigby v Ferodo Ltd the employee was engaged under a contract terminable on 12 weeks’ notice. Facing a crisis, the employer unsuccessfully sought the agreement of the employee and his union to a reduction in pay rates. The employer did not wish to terminate the employment of Mr Rigby or the other employees as it wanted to avoid making redundancy payments. Absent the agreement of the employees, the employer nevertheless proceeded to reduce Mr Rigby’s rate of pay and when he sought to recover the underpayment the employer claimed that the reduction constituted the giving of notice under the contract. The House of Lords rejected this contention as the employer’s actions in choosing to retain Mr Rigby (albeit on different

terms) did not evince an intention of terminating his contract.30 [page 689] There is also a distinction between giving notice and repudiating a contract. The giving of notice is the exercise of a contractual right; the repudiation of a contract is a manifestation of the absence of willingness to perform the contract. A repudiation is, as Sachs LJ once observed, ‘dehors’ the agreement, not an exercise of a right under it.31

Authority to give and receive notice 11.11 To be effective the notice must be given by one party (or to an agent acting on behalf of the party) and must be received by the other party (or by an agent acting on behalf of that party). The principles governing agency are discussed in detail in 3.70–3.85. If an employee gives notice to an agent acting on behalf of the employer who has the authority to receive that notice, then notice is given when the agent receives the notice. In Riordan v The War Office the employee, Mr Riordan, wrote a letter one Friday afternoon giving notice. The letter was addressed to his commanding officer, Major Turton. Mr Riordan delivered the letter to his supervisor, Mr Ball, who in turn delivered it to Major Turton’s secretary. Later that Friday afternoon Mr Riordan spoke to Mr Ball and told him that he wished to withdraw the notice. Major Turton did not read the resignation letter until the following Monday morning. As discussed in 11.68, once notice has been received by the employer it cannot be withdrawn without the recipient’s consent. The court held that Mr Riordan’s attempted withdrawal was too late as by Friday the notice had been received by an agent for the employer (either Mr Ball or Major Turton’s secretary) prior to the withdrawal.32 The same principles apply to notice given or received by the employee’s authorised agent, such as a family member or a union.33 [page 690]

The exercise of the right in a state of emotional distress 11.12 It is suggested that there are at least four conceptually sound methods of synthesising the disparate authorities concerning the status of notice given by a party in a state of emotional distress. Some of the cases do not analyse the contractual issues by reference to the categories discussed below. The same principles will apply whether the employee or the employer is distressed.34 First, the effect of words uttered in the heat of the moment in an emotional state needs to be understood in the context of the whole of the conversation or course of conversations in which the words occur. It would be wrong to discretely analyse a particular sentence which was inconsistent with the import of a longer exchange.35 The use of clear, unambiguous language stating an intention to resign is ordinarily required.36 Second, the giving of short notice is usually a repudiation. A repudiation is not to be lightly inferred and can be withdrawn prior to its acceptance.37 Third, the employee may be so distressed that the act was not, in truth, a manifestation of the personal autonomy of the individual.38 In some cases the implied obligation of good faith, or principles governing unconscionability, may prevent the other party taking advantage of the situation.39 Fourth, an employee does not give notice unless he or she intends to give notice, with intention being ascertained in the ordinary objective manner in contract. The subjective intent of the employee in uttering the words, and the subjective understanding of the employer hearing the words, is not relevant. The legal efficacy of the act is judged by considering the outward manifestations of the employee’s intention. The issue is whether a reasonable person in the position of the employer would conclude that the statements and conduct of the employee evinced [page 691] an intention to give notice.40 The context in which the words are spoken is significant. A reasonable person in the position of an employer would not precipitously conclude an employee intends to resign when he or she has

uttered words expressed in temper or under great pressure either from the employer or other circumstances.41 A sounder basis for inferring an intention to resign might arise if the employee does not retract his or her intemperate words once the pressure is relieved or within a reasonable period of their utterance: In ordinary human experience we generally take people to mean what they say; but we often make allowances for words spoken in anger, recognising that they may soon be retracted and may reflect no more than a momentary, flawed intention on the part of the speaker. The law caters for this eventuality; but the law will not serve the wider interests of justice unless employers and employees are usually taken to mean what they say.42

On a related point, an employee does not give notice if the employer believed (or perhaps knew) that the employee did not intend to give notice.43

CONTRACTUAL LIMITS ON THE RIGHT TO TERMINATE Express contractual limits on the right to terminate by notice 11.13 A right to give notice or terminate for breach must be exercised in accordance with express terms of the contract. An express contractual right to terminate is usually construed so as to augment, rather than be in substitution for, a common law right to terminate for serious breach or repudiation unless the contract evinces a different intention.44 This [page 692] part of the chapter discusses express contractual limits on the right to terminate. Chapter 10 deals with the common law right to terminate for breach or repudiation. Express terms limiting the contractual rights to terminate or give notice can be conveniently grouped into two broad categories: terms limiting the grounds on which an employer can terminate or give notice; and terms

governing the procedure that must be followed in the giving of notice. Employees entitled to the benefit of such terms cannot be given notice for a reason, or in a manner, inconsistent with the terms. Consequently, for such employees the general proposition that an employee can be given notice at any time or for any reason is qualified. In some cases there may be implied limitations on the rights to terminate or give notice arising, for example, from the implied term of trust and confidence or the duty of good faith: see 11.23–11.27.

Express terms limiting the grounds for termination 11.14 Terms limiting the grounds on which an employer can terminate or give notice take a variety of forms. Contracts for permanent or fixed term employment expressly, or implicitly, preclude termination for any reason other than serious breach or repudiation.45 Another type of term, considered in Gorgevski v Bostik (Australia) Pty Ltd, was to the effect that the employer could not harshly, unjustly or unreasonably terminate the contract.46 Other contracts require that the employer only be permitted to provide notice if certain events have occurred, such as a downturn in the business.47 In each case the approach is the same: does the employer have the right to give notice, or to terminate for, the ground relied on. If not, then a purported exercise of that right will be a breach. Some public sector statutes exhaustively define the circumstances in which a right to terminate will arise.48 The most common form of express terms limiting the right to terminate are terms that state that certain misconduct will give rise to a right to summarily dismiss. In such contracts, an employer does not have a contractual right to terminate [page 693] the contract unless the employee has committed an act falling within the defined categories of misconduct.49

Express terms governing the procedure for notice and termination

11.15 Terms governing the procedure that must be followed in the giving of notice or the exercise of a right to terminate also take a variety of forms. Some terms grant a right to be heard before dismissal or empower a disciplinary body to hear and determine allegations of misconduct. The failure to follow an agreed procedure will be a breach.50 Courts are generally reluctant to permit employers to circumvent expressly conferred contractual or statutory protections by permitting the employer to terminate the contract relying on a common law right to terminate (or perhaps otherwise give notice under the contract) until the agreed procedure has been followed.51 It is a matter of construction in each case to determine if the parties intended such a result. When a contract establishes a disciplinary procedure under which a tribunal is considering allegations of misconduct, a court is generally loath to interfere prior to the tribunal hearing and determining the matter for itself, unless the tribunal has acted improperly or it is inevitable that it will do so.52 However, where a tribunal can only investigate certain matters (such as allegations of serious misconduct), and the allegations [page 694] made against the employee do not relate to the specified matters, a court can restrain the investigation of other matters.53 11.16 Some public sector statutes also grant similar protections to employees.54 In some contracts express terms require that employers apply certain procedures in selecting which employees should be made redundant.55 Some require that employers only provide notice to an employee after obtaining the approval of a third party; that is, the rights are contingent and the fulfilment of the contingency is not within the power of either party. In Jones v Lee the contract provided that the approval of a local education authority had to be obtained prior to any dismissal of the headmaster. The provision did not make the education authority the employer or a party to the contract. It simply limited the circumstances in which the headmaster’s contract could be terminated by the employer. In the absence of that approval, the Court of Appeal granted an injunction restraining the employer from

acting on the purported dismissal.56 The special considerations associated with damages and equitable relief for a breach of a contractual procedural fairness clause are discussed in 14.60–14.62 and 15.22.

Rectification of the breach 11.17 A term may provide that, in the event of a breach by the employee, the employer cannot proceed to terminate or give notice unless the employee is first given an opportunity to rectify the breach. In such cases the notice to rectify should be clear. It need not be drawn with the particularity of a pleading, but it must convey with reasonable certainty the nature of the breach and that the contract will be terminated in the event of a failure to rectify the breach.57 The party in breach must be [page 695] given a period to rectify the breach (either the period specified in the contract or, if no period is specified, a reasonable period).58 Courts tend to strictly construe terms governing the procedure to be followed when exercising a right to terminate or give notice. A contractual right to terminate or give notice cannot be exercised in advance of the time specified in the contract.59 In Afovos Shipping Co SA v Pagnan the right to terminate arose if payment had not been received by 14 June, and the court held that a notice to terminate was premature when it was issued at 4.40 pm on 14 June as the payment might have been received at any time up to midnight.60

Fixed term contracts and permanent employment 11.18 The most common form of contracts not terminable by notice are fixed term contracts. These are contracts that state, usually explicitly, that the contract will run for a specified period or until the completion of a specified task.61 Courts will not imply a term in such contracts permitting the parties to terminate on reasonable notice as the contract expressly specifies its

duration.62 A mere expectation or hope that the employment will be for a specified period will not make the contract a fixed term contract.63 Occasionally, fixed term contracts contain clauses granting one or both parties the option to extend the duration of the [page 696] contract for a further period.64 Section 4 of the Statute of Frauds 1677 (UK) rendered unenforceable any fixed term agreement that could not be performed within the space of one year (such as a contract of employment extending for two years) unless the contract was appropriately evidenced in writing.65 That provision no longer operates in Australia, other than in Tasmania.66

Termination of fixed term contracts 11.19 Fixed term contracts terminate automatically at the expiration of the specified term; the termination is not at the initiative of either the employer or the employee.67 Some contracts terminate automatically on the occurrence of a specified event, such as the employee reaching retirement age.68 If the employer terminates the employment without justification prior to the expiration of the fixed term then the employee is prima facie entitled to the remuneration he or she would have received during the remainder of the fixed term, subject to the rules governing mitigation.69 The employee is entitled to no special notice of the looming termination date or, in the absence of an express term to the contrary, compensation when the fixed term expires.70 In some cases a wrongfully [page 697] dismissed fixed term employee may recover damages for loss of a chance to renew the contract.71 The employment may continue after the expiration of the fixed term. The

terms of the engagement after the expiration are, in each case, a question of fact.72 There is some authority to support the view that if employment continues after the expiration then, absent any contrary express term, it is presumed that it does so on the same terms — including the same term as to duration — as the previous employment. On this view, when the parties continue their engagement after the expiration of a 12-month contract then it is presumed that the parties have entered into a new contract for a further 12 months.73 The alternative approach is that the fixed term contract terminates on the expiration of the term and a new contract of indefinite duration commences which is terminable on reasonable notice.74 The correct approach depends upon the intention of the parties to the contract.75 11.20 By way of comment, the role of fixed term employment has changed in recent decades. Traditionally, fixed term employment was associated with greater job security: ‘[during] the term of their contract workers who are engaged under a contract for a specified period are generally in a better position as regards job security than those under [page 698] a contract of indeterminate duration …’.76 However, nowadays fixed term employment is increasingly associated with insecurity rather than security. It is not hard to find examples of employees who signed successive contracts for a fixed term each and every month for over a year, each contract stating that the employment will be terminated at the conclusion of the contract.77 Over 6% of fixed term contract employees have been employed by their employer for more than 10 years and 72% of fixed term employees expect to have their contract renewed. Fixed term employees appear to earn the same or less than ongoing employees.78

Permanent employment 11.21 In contrast with their approach to employment contracts, during the latter part of the nineteenth century courts were inclined to presume that nonemployment contracts were permanent; that is, in the absence of indications

to the contrary, they were of perpetual duration.79 This presumption was never applied to employment contracts: see 11.40–11.44. Contracts for permanent employment are rare. Sometimes the employer will agree to give the employee ‘ongoing employment’ or a ‘permanent job’. Without more, these phrases do not grant the right to remain in employment until death or the age of retirement: ‘in the absence of the clearest intention elsewhere in the agreement between the parties permanency does not imply a job for life’.80 [page 699] This approach is consistent with a large number of cases in which courts have declined to conclude that the employment was permanent despite some indications that the parties contemplated the employment continuing for the life, or the working life, of the employee.81 The task of ascertaining whether a contract is one for permanent employment is ultimately one of construction of the particular contract.82 An office, like an estate, can be granted for the life of the officer, or for a shorter period or subject to conditions. Whether an office holder is entitled to hold office for life will depend upon the terms of the instrument or statute establishing the office.83 11.22 There have been a small number of cases, of which McClelland84 is one, in which the parties were held to have agreed to a job for life. In that case the employee applied for a job advertised as ‘permanent and pensionable’. An express term allowed for the employee to terminate on one month’s notice. The express terms provided that in the case of gross misconduct by the employee the contract was terminable summarily and in the case of inefficiency and unfitness for continued service the contract was terminable by the employer on one month’s notice. The employer purported to terminate the contract due to redundancy on six months’ notice. The majority of the Law Lords held that the employer did not have the right to terminate the contract for a reason other than those stated above, whether on notice or not.85 [page 700]

A contract for permanent employment in which an employee is prevented from giving notice may be contrary to public policy as the contract would be akin to slavery. Prior to 1900 courts were prepared to enforce such contracts.86 In one twentieth century case that considered the issue the court distinguished earlier authority and determined that the contract it was considering was contrary to public policy and therefore void.87

Possible implied contractual limits on the right to give notice Procedural fairness and the implied term of trust and confidence 11.23 A term is not usually implied requiring the employer to provide the employee with procedural fairness prior to giving notice or exercising a right to terminate. Nor is an employee usually entitled to be provided with reasons for the termination.88 As Ormiston J has observed: Affording an opportunity to be heard may well be a courtesy extended to employees in certain circumstances, but, in the absence of some specific stipulation requiring it, such a term is not ordinarily to be implied.89

When the parties have agreed that a third party will exercise a quasijudicial function, and the employee may be adversely affected by the [page 701] exercise of that function, then the employee is often entitled to procedural fairness.90 11.24 The law governing the relationship between the need to provide procedural fairness and the implied term of trust and confidence is in a state of flux. The implied term does not apply to the termination of the contract: see 8.15. It is a duty not to seriously damage or destroy the relationship. Its purpose is to facilitate the proper functioning of the contract and to protect the relationship. It has no application to the exercise of a power to terminate the relationship.91 There are cases that suggest that the implied term of trust

and confidence cannot confer an entitlement to procedural fairness as to do so would undermine the ‘right’ of the employer to dismiss for any reason or for none.92 However, there is also some support for the view that the employer may breach the implied term of trust and confidence by failing to provide procedural fairness while carrying out investigative or disciplinary procedures which might not necessarily culminate in dismissal.93

The duty of good faith and notice 11.25 For many years the common law concerning the right of an employer to terminate the contract was clear: ‘the master can terminate the contract with his servant at any time and for any reason or for none’.94 The employer was permitted ‘to act unreasonably or capriciously if he [page 702] so chooses’.95 However, in recent years the right of an employer, or any party to a contract, to act irrationally, capriciously or not in good faith has been reexamined: see 8.28. There is considerable uncertainty about the current state of the law and its future direction. Where a right to give notice or a contractual right to terminate is conditioned on the employer being satisfied that a particular state of affairs exists, then the right cannot be exercised unless the employer has ‘a reasonable as well as honest state of satisfaction’.96 11.26 The duty of good faith can apply to the exercise of a power to terminate in both commercial97 and employment contracts,98 although there remain some doubts about the matter.99 It also applies to the exercise of a contractual power to suspend an employee.100 In Tasmania Development and Resources v Martin the employee was engaged under a fixed term contract, but was entitled to be dismissed on one month’s notice for a valid reason based on the employer’s operational requirements. The employer terminated on one month’s notice. The court found that the employer was ‘under an obligation to act in good faith both in determining its operational requirements and in terminating the employment on that ground’.101

The most significant unresolved issue is whether there is an obligation to exercise a bare power to give notice in good faith: that is, is it still true to say that an employer can give notice for a capricious reason?102 On the current state of authorities the answer is probably yes, but given the arc of the common law it appears unlikely that the answer will remain [page 703] the same in the decades to come. An approach that has found favour in Canada is that an employer must not act in bad faith in the exercise of such a power: Employers ought to be candid, reasonable, honest and forthright with their employees and should refrain from engaging in conduct that is unfair or is in bad faith by being, for example, untruthful, misleading or unduly insensitive.103

11.27 An obligation to act in good faith has been implied in a series of cases involving long-term sickness schemes in which the employer’s right to terminate on notice has been held to be limited by the right of the employee to enjoy the benefits of a clause granting sickness payments. It would defeat the purpose of providing protection for long-term sickness if the employer could exercise its general power to terminate on notice while the sickness scheme was in force and thereby deprive the employee of its benefits.104 Some of these cases have implied a term in fact to deal with the problem; others have considered the employer’s breach to be the exercise of a power to terminate for an improper purpose. On either view they apply the principle that each party agrees, by implication, to do all such things as are necessary on his or her part to enable the other party to have the benefit of the contract: see 8.33. An example of the former approach is the decision in Jenvey v Australian Broadcasting Corporation. The employee was entitled to a redundancy payment if his position was redundant. The employer determined that the employee’s position was redundant, and then dismissed the employee without good cause. The court held that there was a term implied in fact in the contract that: … once an employer has determined that an employee will be dismissed by reason of redundancy, such that his dismissal for any other reason will defeat the employee’s right to

contractual benefits which accrue when the dismissal is by reason of redundancy, the employer may not lawfully

[page 704] dismiss the employee for any reason other than redundancy, unless the dismissal is for good cause.105

STATUTORY AND PUBLIC SECTOR JOB SECURITY PROVISIONS Public sector employment generally 11.28 There are about 1,850,000 public sector employees in Australia. About half of these employees are engaged under the Public Service Act 1999 (Cth), or its state equivalents, with most of the others engaged by agents of the Crown, statutory corporations and councils.106

The contract of Crown employees 11.29 There is a contract of employment between public servants and the Crown: … the relation between the Crown and its officers is contractual in its nature. Service under the Crown involves, in the case of civil officers, a contract of service — peculiar in its conditions, no doubt, and in many cases subject to statutory provisions and qualifications — but still a contract.107

There are at least three exceptions to this rule. First, when a statute expressly states that there is no contract.108 Second, when a person holds an office and only performs independent functions that are not the subject of control by an employer, then they are not employees.109 The traditional view was that members of the military, members of the security service and police officers fell into this category. It is suggested that this common law rule has probably been displaced or modified

[page 705] by the extensive statutory regulation in these fields.110 Third, a statute may so exhaustively govern the terms of the engagement, including the obligation to serve, that there will be no voluntary assumption of responsibility by the parties or contract between them.111 Public sector employers may enter into a contract with employees consistent with any statutory provision which affects the relationship: ‘to the extent that the statute governs the relationship, it is idle to inquire whether there is a contract which embodies its provisions. The statute itself controls the terms of service’.112 A contract cannot remove a statutory right to dismiss on a particular ground, at a particular time or following a particular procedure. The emerging view is that the Crown’s common law rights to dismiss its servants at pleasure or suspend them are able to be modified by contract.113 There is also support for the view that even if a contract cannot modify that right to dismiss, damages may nevertheless be recoverable if an employee is dismissed during a fixed term.114

The source of the Crown’s power to dismiss employees 11.30 Under the common law, Crown servants hold their positions at the pleasure of the Crown.115 This rule may be modified by statute or contract. Statutes that deal with the dismissal of Crown servants will almost always modify or exclude the common law rule.116 Such statutes apply to almost all servants of the Crown. Some statutes expressly retain [page 706] the power to dismiss employees or officers at pleasure, but they are increasingly rare.117 When an employee holds an appointment at the pleasure of the Crown the weight of authority supports the view that his or her employment may be terminated without notice and without a reason.118 Statute has now modified

the common law position that members of the Defence Force hold their appointment at pleasure.119 There is considerable support for the view that the common law rule permitting dismissal at pleasure, being an implied term in the contract,120 may be modified by an express term such as a term establishing fixed term employment.121 There is a distinction between the termination of employment and the abolition of an office occupied by an officer. An office held by an employee may be abolished by statute. When it is, the abolition does not necessarily terminate the employment and the holder of the abolished office may be entitled to damages for breach of contract arising from the prevention of the performance of the contract.122 [page 707] The right of Crown employees to seek judicial review of decisions relating to their employment depends in part on whether the decision is the exercise of a contractual or statutory power.123 A decision to dismiss under the contract does not give a right to seek judicial review. Public sector statutes usually grant an express power to engage and dismiss employees. A power to dismiss may be inferred from a general power to manage an enterprise in the absence of an express power.124 There is some controversy about the scope of a power to remove or suspend from an office conferred by the Acts Interpretation Act in each jurisdiction.125

Limitations on the exercise of powers of dismissal Limited grounds for dismissal 11.31 Statutes governing public sector employment often define the grounds on which employment can be terminated.126 There will be no room for the implication of a power to dismiss for other reasons when an Act exhaustively defines the grounds.127 An employee will have been dismissed in breach of such a statute if he or she is dismissed on another ground.128 For example, in Hanson v Radcliffe Urban District Council the employer could dismiss the

employees ‘on educational grounds’. The employee refused to accept a reduction in pay and was given notice. The court held that the ground for the dismissal was a desire to economise, and not an educational ground, and made a declaration accordingly.129 11.32 The grounds of dismissal specified in public sector statutes usually include misconduct, unsatisfactory performance, being excess to requirements, being incapacitated or not possessing a necessary qualification. For the purposes of seeking judicial review it is often [page 708] important to determine if these grounds constitute jurisdictional facts. The character of the grounds depends on the terms of the Act granting the power to dismiss: The authorities suggest that an important, and usually determinative, indication of parliamentary intention, is whether the relevant factual reference occurs in the statutory formulation of a power to be exercised by the primary decision-maker or, in some other way, necessarily arises in the course of the consideration by that decision-maker of the exercise of such a power. Such a factual reference is unlikely to be a jurisdictional fact. The conclusion is likely to be different if the factual reference is preliminary or ancillary to the exercise of a statutory power.130

On the one hand are statutory provisions that grant a power to dismiss if the ground for dismissal exists as an objective fact. In such cases, judicial review of the decision to dismiss can ordinarily be sought on the basis that a necessary precondition to the exercise of the power has not been established and a superior court may determine whether the fact exists. For example, if the ground for dismissal under s 33(c) of the PA Act 2004 (Vic) was that the employee had been found guilty of a criminal offence, then a superior court may quash a decision of an employer if the employer wrongly determined that the employee was found guilty of such an offence.131 On the other hand are provisions that grant a power to dismiss if the employer is satisfied that, or is of the opinion that, or believes that a ground for dismissal exists.132 In such cases the employer’s decision is not able to be judicially challenged solely on the basis that the ground of dismissal did not exist. However, review may be obtained if the decision was illogical, irrational, or unreasonable.133

[page 709]

The usual public service disciplinary procedure 11.33 The disciplinary procedures applicable to public service employees have changed significantly over the last decade, particularly by reducing protections against arbitrary dismissal. Although there are significant differences between the states, typically the procedures governing alleged misconduct are now as follows. The employer may usually suspend the employee while investigating the allegations of misconduct.134 The employer may take disciplinary action against an employee on the grounds of misconduct.135 The employee will often have the right to appeal to a disciplinary appeal committee.136 The above procedures often will not apply to dismissals which are often only the subject of review in an unfair dismissal action.137

Entitlement to procedural fairness 11.34 Whether an employee is entitled to be afforded procedural fairness before disciplinary action is taken under a statute depends on the terms of the Act. Under some statutes the obligation to afford procedural fairness is express. As to an implied right to procedural fairness: It can now be taken as settled that, when a statute confers power upon a public official to destroy, defeat or prejudice a person’s rights, interests or legitimate expectations, the rules of natural justice regulate the exercise of that power unless they are excluded by plain words of necessary intendment.138

[page 710] As a general proposition it is not lightly to be supposed, absent express provision, that legislators have conferred a power affecting rights, privileges

or liabilities, which is able to be exercised in a way that is not procedurally fair. The obligation to afford procedural fairness depends on the attributes of the power concerned including its width, purpose, subject matter and the consequences of its exercise.139 Applying these tests courts usually conclude that public service employees are entitled to procedural fairness before the employer exercises a statutory power to terminate their employment140 or suspend them from duty.141 There is some older authority to support the view that employees who hold their position at the pleasure of the Crown are not entitled to a hearing before dismissal, but this view has been soundly criticised.142 The content of the obligation to provide procedural fairness will vary from case to case according to the demands of the statute and the circumstances in which procedural fairness must be provided.143 A statutory procedure may also stipulate that the disciplinary action can only be taken by a particular person or body. In Francis v Municipal Council of Kuala Lumpur the employee was engaged by a council. By virtue of an ordinance he was able to be dismissed by the president of the council. A committee of the council met and determined to dismiss the employee. The president was present during that committee meeting and supported it, but he did not make the decision. The dismissal was therefore wrongful and beyond the power of the committee.144

Preventing an employee performing the contract 11.35 A public sector employee is entitled to damages for wrongful dismissal when he or she is prevented by the employer from performing the duties which he or she was appointed to perform and thereby earning [page 711] the salary specified in the governing contract or statute.145 Where the wrongful dismissal involves a breach of procedural fairness, the employee can recover damages for wrongful dismissal but not for the breach of the obligation to afford procedural fairness.146

The statutory right to notice 11.36 Section 117 of the Fair Work Act grants some national system employees the right to written notice and a minimum period of notice or payment in lieu thereof. The entitlements to a minimum period of notice largely reflect those established in 1983 by the former Australian Conciliation and Arbitration Commission in the Termination, Change and Redundancy Case.147 The provisions partially reflect the obligations accepted by Australia under the Termination of Employment Convention.148 The provision that is now s 117(2) and (3) of the Fair Work Act was originally inserted, in a substantially similar form, as part of the raft of amendments enacted by the Industrial Relations Reform Act 1993 (Cth). 11.37 A national system employer must not terminate an employee’s employment unless the employee has been given the minimum period of notice. That notice can consist of notice worked by the employee, or pay in lieu, or a combination of the two methods: s 117(2). Under s 117(2) and (3) that period is calculated as follows: Employee’s period of continuous service Not more than 1 year More than 1 year but not more than 3 years More than 3 years but not more than 5 years More than 5 years

Period 1 week 2 weeks 3 weeks 4 weeks

This period of notice is increased by 1 week for employees who have completed at least 2 years of continuous service and are over 45 years old when the notice is given: s 117(3)(b). When pay in lieu is provided under s 117(2)(b) the payment must be at least the amount the employer [page 712] would have been liable to pay to the employee (or to another person on the employee’s behalf) at the full rate of pay for the hours the employee would have worked had the employment continued until the end of the minimum period of notice. This includes superannuation payments payable to a

superannuation fund on the employee’s behalf.149 It also includes payments such as overtime and shift penalties that the employee would have earned if the notice period had been worked out. The term ‘continuous service’ is defined by s 22 of the Act. 11.38 There are a range of employees who are excluded from the benefits of the notice pay scheme. These include non-national system employees; employees employed for a specified period of time or for a specified task150 or for the duration of a specified season; an employee whose employment is terminated because of serious misconduct;151 casual employees; and employees to whom a training agreement applies: s 123(1). Modern awards and enterprise agreements may include terms specifying the period of notice of employees: s 118. Modern awards do not apply to high income employees: s 47(2). There are thousands of slightly different provisions regulating notice in the 120 modern awards, over 25,000 enterprise agreements and some state laws across Australia. 11.39 Section 117 grants rights to employees and not to employers. It does not confer a right to the employer to terminate the employment by the giving of the notice specified.152 Section 117 is not a code relating to the provision of notice by employers. Subsection 117(2) states that the notice provided shall be ‘at least’ the periods specified. It does not place a legislative ceiling on the permissible notice that must be provided; it sets a legislative floor of rights. Contracts often expressly provide for periods of notice in excess of those specified in s 117. In such cases the employee may sue for [page 713] breach of the contract provision.153 If a contract stipulates that the employee shall receive a lesser period of notice compared to the entitlements set out in s 117 (or no notice at all), then the employee can pursue their rights under s 117 and be awarded the greater of the two entitlements. It is suggested that notice that contravenes s 117 will terminate the employment relationship, even if it does not terminate the contract.154 It would appear that s 117(2) will be contravened when an employer wrongfully dismisses an employee by failing to provide any notice or payment in lieu,

assuming that the termination was not because of serious misconduct: s 123(1)(b). A breach of s 117(2) gives rise to a possible civil penalty and a statutory action for compensation: Fair Work Act ss 45, 539 and 545. Subsection 117(1) establishes a separate obligation on employers. It states: An employer must not terminate an employee’s employment unless the employer has given the employee written notice of the day of the termination (which cannot be before the day the notice is given).

This provision did not appear in the predecessors to s 117. Under the common law the notice need not be written: see 11.6.

IMPLICATION OF A TERM TO PROVIDE REASONABLE NOTICE The presumption of yearly hiring: an historical note 11.40 The common law will imply a term that the employer must give to the employee reasonable notice of its intention to terminate the contract in the absence of a contrary express term or statutory provision: see 11.45. This was not always the case. Until 1969 there was a presumption of yearly hiring that was slowly whittled away.155 The presumption of yearly hiring first arose in the wake of the Black Death. The pestilence killed between 30 to 50% of Europe’s population and with a shortage of labour came demands for higher wages. In 1351 Parliament introduced the Statute of Labourers to repress wages.156 [page 714] Chapter I of that statute provided that servants and certain labourers shall be ‘allowed to serve by a whole year, or by other usual terms, and not by the day’. The proviso ‘or by other usual terms’ appears to have been largely ignored and glossators simply declared that servants and labourers were engaged by the year.157 The requirement of yearly service was enforced by a number of means.

Servants and labourers were required to swear twice a year that they would serve by the year. Those who refused to take this oath were placed into the stocks, or incarcerated; those who left the service before the expiration of the term were liable to be imprisoned, as were those who fled from one county to another. In 1360, 34 Ed III Cap X varied these measures by providing that a servant fleeing from one county to the next was liable to the following punishment: ‘he shall be burnt in the forehead with an iron made and formed to this letter F in token of falsity’.158 11.41 Prior to 1562 the rule concerning yearly hiring applied to menial servants, some labourers, artificers and apprentices.159 The Statute of Artificers of 1563160 repealed the Statute of Labourers and provided that no person hired in any of the 31 named occupations listed in s III shall be retained or hired ‘to work for any less time or term than for one whole year’. Servants were required to give ‘one quarter’s warning before the end of his said term’. All other persons between the age of 12 and 50 (except for certain named exceptions) were by 29 September (Michealmas) of 1562 ‘compelled to be retained in husbandry by the year’: s VII. A servant who left service prior to the expiration of the term of engagement was liable to be imprisoned and returned to the master: [page 715] s IX. The scheme established by the Statute of Artificers was substantially reenacted in the Master and Servant Acts which were repealed in 1875.161 The presumption of yearly hiring was also reinforced by the multitude of cases litigated, largely between parishes, arising from the amendments in the 1690s to the Statute for Settlement and Removal 1662, a key part of the Poor Laws. That statute concerned the support of paupers by the parish of their settlement. The pauper was settled in the parish in which the pauper was born. One means of gaining a settlement in a new parish was for an unmarried pauper to be hired and serve for a year in the new parish.162 The presumption of yearly hiring also meant the Statute of Frauds 1677, which required contracts that were not able to be performed within a year to be in writing, did not apply to most contracts of service. An engagement from

Michealmas to Michealmas was for one day less than one year, as the first day of the engagement did not count as part of the service.163 11.42 For at least the 200 years prior to the 1969 decision in Richardson v Koeford the guiding rule in English and Australian courts was that ‘hiring in general and indefinitely gives a presumption of a hiring for a year where the nature of the service and subsequent facts concur to render it probable that it was so meant’.164 Attempting to catalogue the innumerable exceptions to that rule is a fruitless exercise, partly because courts were regularly inconsistent in their approach to the presumption and the circumstances in which it was rebutted. However, it is useful to record that during that period from about 1770 to 1970 there were three discernible trends in the courts’ approach to the presumption. 11.43 The first trend was that over time courts were increasingly prepared to find facts that displaced the presumption. Although the presumption was sometimes not rebutted,165 courts often found that [page 716] it was displaced when the servant was a pieceworker, or was paid by the week, or was under no obligation to remain in the engagement, or was engaged in an industry in which it was customary to give shorter notice.166 The second trend was that the presumption was increasingly applied to service outside the 31 named occupations listed in the Statute of Labourers such as superior servants.167 From the 1830s courts ceased applying the presumption to domestic servants.168 [page 717] The third trend concerned the job security of manual and industrial (but not domestic) workers. From the mid-nineteenth century these workers commenced being engaged on contracts by the week, or in some cases by the hour or by the minute.169 Fledgling unions worked hard to achieve these terms for good reason. Employees who could terminate their contract on

short notice could engage in industrial action without running foul of some of the criminal prohibitions in the Master and Servant Acts, and the liability of the workers, and their unions, in tort was limited.170 The fact that such workers were usually paid by the week supported the displacement of the presumption of yearly hiring with a finding that they were engaged by the week (or day or hour as the case may be). To the extent that courts required the provision of notice to such employees, they considered that the period of notice was co-extensive with the period of the payment under the contract; hence, roughly speaking, employees paid weekly were entitled to a week’s notice and employees paid by the hour were able to be terminated on one hour’s notice.171 11.44 Well before 1969 the English courts started to express their displeasure about the presumption of yearly hiring. Increasingly in the later part of the nineteenth century the presumption was displaced on the flimsiest of grounds. Commentators frankly acknowledged that ‘in practice the presumption is of little use’ and du Parcq LJ stated that reasons for rebutting the presumption were ‘sometimes rather eagerly [page 718] sought and found’.172 Although courts continued to note the existence of the presumption, they increasingly found that contracts were terminable on reasonable notice.173 Interestingly, as the English courts were starting to criticise the presumption of yearly hiring in the mid-nineteenth century, the courts in the United States commenced rejecting it and replacing it with the presumption that employment contracts are terminable on no notice (except if the parties agreed to the contrary). In the history of the law of employment it appears to be from this point that American and other common law jurisdictions part company.174 American termination of employment law is founded on the fundamental proposition that employment is presumed to be terminable at will; the strange and wondrous causes of action that have been devised by US plaintiff lawyers have largely been to circumvent this proposition.175

The presumption of reasonable notice 11.45 In 1969, Lord Denning entered the fray. In Richardson v Koefod it was conceded by counsel for the employee that any presumption of yearly hiring was inconsistent with the express term in the contract governing notice. Nevertheless, the Master of the Rolls determined: … the time has now come to state explicitly that there is no presumption of a yearly hiring. In the absence of an express stipulation, the rule is that

[page 719] every contract of service is determinable on reasonable notice. The length of the notice depends upon the case.176

In Australia the presumption of yearly hiring was occasionally applied prior to 1969,177 but it was usually displaced.178 Courts also regularly found that if the hiring was not a yearly hiring then the employee was entitled to reasonable notice or was hired by the week.179 In 1974 the South Australian Supreme Court accepted that it should follow Richardson v Koeford and no Australian court has applied a presumption of yearly hiring since.180 In 1995, without mentioning the waning presumption of yearly hiring, the High Court found that it was a term implied in law that an employment contract was terminable on reasonable notice and the presumption forged in the shadow of the Black Death was interred without ceremony.181

The term of employment and notice 11.46 There was formerly an important distinction drawn between the term (or duration or period) of the employment and the notice required to terminate that employment. The term of a contract was the [page 720] period for which the employment would continue unless terminated earlier for cause.182 The contract terminated at the end of the term of the

engagement. For employees engaged under a yearly hiring, the employment was to last for one year. At the conclusion of the year the contract terminated automatically. If the employee continued in employment after the expiration of the year then the law presumed that the subsequent employment was for a whole year.183 Daily, weekly and monthly hirings operated in a similar manner: the hiring terminated at the conclusion of each day, week or month and any notice that the contract was not to be renewed (or was to be terminated) had to coincide with the day of the week or month that the employment commenced.184 Whether a contract was for a specific period depended to a significant extent on whether the employee was paid weekly, monthly or yearly (or remuneration was calculated by reference to a weekly etc service).185 An employee under a weekly hiring who worked for six months was engaged under 26 identical separate contracts. Notice had little role to play in such periodic hirings. Most employment law textbooks prior to 1920 concentrated upon the term of the employment — for once a contract was determined to be a contract for a particular period then it was easy to ascertain when it terminated. The issue of notice did occasionally arise where the contract allowed for the termination of the hiring on the provision of specified notice.186 At times the law adopted the rule, now abandoned, that for a yearly hiring [page 721] a master was required to give reasonable notice of the decision whether or not to elect to extend the employment for a year.187 11.47 There is little role for the notion of the term of contracts now that the presumption of weekly or yearly hiring has been abandoned and the presumption of indefinite hiring terminable on reasonable notice has been adopted. The term of the engagement only remains contractually relevant for fixed term contracts which retain their original character as contracts that terminate automatically at the end of the term without the requirement of notice of termination: see 11.19. Other contracts are now of indefinite duration. They do not expire at the end of each pay period and are usually

terminated by the provision of notice in accordance with the express or implied terms of the contract. Occasionally, faint ghosts of the former approach to the duration of contracts can be detected in employment law.188 Industrial instruments sometimes referred to employees as being weekly employees, yet would usually require employers to provide more than one week’s notice — a notion foreign to weekly hiring.189 Another faint reminder of the old approach is the suggestion in some cases that the period of reasonable notice was co-extensive with the period of the payment of the contract.190

The term implied and its relationship with other terms and instruments 11.48 In the seminal decision of Richardson v Koefod Lord Denning stated: [page 722] In the absence of an express stipulation, the rule is that every contract of service is determinable on reasonable notice.191

The term relating to reasonable notice is one implied by law into all employment contracts that do not contain express contrary terms.192 As the term is implied by law, it is unnecessary for the employee to meet the tests for the implication of a term implied in fact.193 There have been sporadic attempts by employers to establish the proposition that, prima facie, the employment contract is terminable at will. This is the position in the United States of America but it is not, and never has been, the position in Australia or the United Kingdom.194 The term is only implied when it is consistent with the other terms of the contract and applicable statutes. An employee is not entitled to reasonable notice where there is an express term permitting the termination of the contract on a specified period of notice.195 As Carnegie has noted: ‘So strong, indeed, is the presumption that a contract of service is terminable on notice, that some judges seem to find difficulty in construing apparently

unambiguous language as excluding this right of termination’.196 Courts are loath to conclude that employees are entitled to permanent employment: see 11.21. [page 723] 11.49 The relationship between the implied term of reasonable notice and express or implicit promises of permanent employment was discussed in New South Wales Cancer Council v Sarfaty. The contract specified the circumstances in which termination of employment could occur, such as misbehaviour or incompetence. The employer terminated the employment on the ground of redundancy — not one of the listed grounds — and argued that it could do so due to an implied term permitting termination on reasonable notice. The majority determined: Where … the parties have expressed detailed provisions as to the right of either party to terminate, it is ultimately a question of construction as to whether they intended those provisions to be comprehensive. If they did, that intention will prevail and there will be no implication of a right to terminate on reasonable notice.197

11.50 Some contracts expressly refer to the notice to be provided by the employee and are silent about the notice to be provided by the employer. In such cases the court will ordinarily imply a term permitting termination on reasonable notice by the employer. The length of that reasonable notice may differ from the notice that the contract expressly provides will be given by the employee.198 Similarly, some contracts provide that the contract may be terminated on a certain amount of notice in the case of misconduct or redundancy. Where there has been no misconduct or redundancy, then the employee will be entitled to reasonable notice.199 There is some support for the view that the term requiring reasonable notice will not be implied when a term implied by custom is proved.200 The term relating to reasonable notice is a term implied in law. Courts will not imply the term where there is a statutory provision or award granting an employer the right to terminate the employment on the provision of a specified period of notice.201 The term may be implied

[page 724] where a statute renders void an express term of the contract relating to notice.202 11.51 Awards and statutes usually do not grant to the employer a right to terminate on specified notice. Instead, they grant to an employee a right to a minimum period of notice or, in the words of s 119 of the Fair Work Act, ‘at least’ a certain amount of notice. Such statutory and award provisions do not preclude the implication of a term requiring reasonable notice.203 In Kilminster v Sun Newspapers Ltd, the award provided that the employment shall not be terminated unless two months’ notice was provided by the employer. The High Court held the award provisions merely meant that ‘the employment should not be put an end to unless notice as therein prescribed shall be given, and they do not interfere with the rights of the parties with respect to longer notice by contract or otherwise’.204 The employee recovered reasonable notice under his contract. There are two cases in which superior courts, in dicta, indicated that award clauses that grant to an employee a right to a minimum period of notice preclude the possibility of implying a term relating to reasonable notice.205

The length of reasonable notice: purpose and general approach 11.52 The principal purpose of the requirement that the period of notice be reasonable is to enable the recipient of the notice sufficient [page 725] time to either seek other employment or employ another employee.206 The length of notice that is reasonable is a question of fact.207 The length is to be judged at the time the notice is given, not at the time the contract is formed.208

There is no principle of reciprocity requiring that reasonable notice be equal to the expressly agreed notice to be given by the other party.209 The period of reasonable notice may differ according to whether the employee is giving or receiving the notice.210 This approach advances the principal purpose of notice. In a period of high unemployment an employee may need a long period of notice to obtain other employment whereas an employer may only need a short time to employ a replacement. Courts take into account the supply of, and demand for, labour in the relevant labour market when assessing the period of reasonable notice.211 The age of the employee, the benefits forgone in accepting employment and the state of health of the employee are all considered when making the assessment: see 11.59. None of these factors are relevant when determining the length of the notice the employee should give. 11.53 The cases on the length of reasonable notice are legion. Courts take into account a variety of considerations: see 11.56–11.59. Previous decisions on what is reasonable at best furnish a guide: ‘the tribunal of fact must be cautious of applying decisions which were made in [page 726] different times, when attitudes to industrial relations were different’.212 Cases decided before the 1970s provide little assistance. Many such cases placed considerable emphasis on custom — an approach that is now largely abandoned.213 Prior to the 1970s courts sometimes adopted the view that the period of reasonable notice was co-extensive with the period of the payment of the contract: broadly speaking, employees paid weekly were entitled to a week’s notice.214 This approach was partly linked to the notion of the duration of the contract. There is no longer a close correlation between the regularity of payment and the period of notice required. 11.54 Further, changed economic circumstances make it difficult to usefully compare reasonable notice cases at different times of the economic cycle and at different stages of a nation’s economic development. In 1966 the Australian Bureau of Statistics commenced collecting data to ascertain the

average duration of unemployment. Between 1966 and 1975 the average duration of unemployment was between 3–10 weeks. Between 1990–2012 the average duration has hovered over the 35-week mark, peaking in 1993 at just over 60 weeks. The main difficulty for employees over 45 obtaining new employment is that they are considered too old for the job.215 The principal purpose of notice is to enable the employee sufficient time to obtain other employment and for the employer to replace the departing employee. In the halcyon days of near full employment in Australia the period required for employees to find substitute employment was short. As the above statistics show, nowadays employees (particularly older Australians) may require a longer period to obtain similar employment. 11.55 In recent years courts have increased the length of reasonable notice awarded. The same trend is recognisable in Canadian court decisions where judges consider the same factors (but for one matter) as are considered in Australia yet regularly award 18 months or more reasonable notice to employees.216 The non-exhaustive list below refers [page 727] to the reported decisions on reasonable notice by superior courts in the last approximately 30 years. The figures set out the position held by the employee; the annual salary (no attempt has been made to value other benefits provided to the employee); the years of service; and the notice awarded. To allow rough comparisons to be drawn, the salary has been converted to represent the purchasing power of the salary in 2010 dollars. Brookton Holdings: senior clerk; $48,000; 14 years; 3 months Dyer: medical technologist; $80,000; 0.5 years; 6 months Grout: abattoir manager; $108,000; 7 years; 9 months Haley: electrical fitter; $43,000; 18 years; 6 months Irons: corporate adviser; $66,000; 1.5 years; 6 months Jager: manager; $120,000; 27 years; 24 months Lloyd: kill supervisor; $76,000; 21 years; 4 months

McCasker: meat trader; $35,000; 24 years; 6 months Quinn: construction manager; $160,000; 2 years; 12 months Rankin: director; $260,000; 19 years; 12 months Rigby: middle manager; $85,000; 2 years; 4 months Russell: choir director; $25,000; 27 years; 12 months Taske: joint CEO; $220,000; 1 year; 9 months Vermeesch: personal assistant; $52,000; 7 years; 3 months Walton: manager of abattoir; $108,000; 24 years; 9 months.217 [page 728]

Factors in determining the length of reasonable notice 11.56 The length of the notice is to be judged at the time when the notice is given and the principal purpose of the notice is to enable the recipient sufficient time to either to seek other employment or employ another employee.218 When assessing the length of reasonable notice courts principally consider: the seniority and importance of the position; the length of service of the employee; the age of the employee; the opportunities to obtain suitable alternative employment; the benefits forgone in accepting the employment; the likelihood of continuing employment. Matters courts tend to give little or no weight to include: the regularity of payment; award and statutory notice provisions;

non-binding practices and customs; the opinions of the parties concerning what is reasonable notice; whether there was a defensible reason for the termination; the actions of the parties after the receipt of notice; the personal relationship between the parties; the impecuniosity of the employer.

The seniority and importance of the position 11.57 The seniority and importance of the position is often a matter of considerable significance in determining the period of reasonable notice.219 It is the substance of the role performed rather than any grandiloquent title of the position that is important.220 The level of remuneration of [page 729] the employee is also considered, as are the qualifications and experience of the employee and the technical skills required to perform the job.221 There is a weak but perceptible correlation between the length of the notice required and the employee’s position on the socioeconomic scale.222 Given the purpose of notice, to the extent that the law equates the seniority and importance of the position with a requirement for a longer period of notice it assumes that junior and unskilled employees are more likely to obtain other employment in a shorter period than more senior employees. This factual assumption may not be correct in an era of long-term unemployment among unskilled youth.

Length of the service 11.58 The employee’s length of service is often a matter of considerable importance in determining the period of reasonable notice.223 Courts tend to equate longer service with long periods of notice. Two related points should be noted. First, in Logan’s case the employee had worked for the employer

for 10 years, during which time he had two short breaks in his employment to assist his father. Although not addressing the issue at any length, the court appeared to consider that the whole of the period of the service of the employee — and not only the most recent period of service — is relevant in determining the length of the notice.224 Second, given the purpose of notice it is suggested that service with related entities should be considered as service with the employer for the purpose of calculating the period of reasonable notice.225 [page 730]

Other relevant factors 11.59 The employee’s age is a relevant factor in determining the length of the notice — a recognition that older employees will often have more difficulty finding employment than younger employees.226 The opportunity to obtain suitable alternative employment is a relevant factor.227 A longer period of notice may be appropriate for employees engaged in an industry or region in which there is high unemployment, or perhaps for employees who suffer from imperfect health.228 Similarly, an employee with specialised skills will be entitled to a longer period of notice than an employee with general skills that are readily marketable.229 The nature of the employment will also be relevant: longer notice is appropriate where the employer would suffer damage if the employee gave a short period of notice.230 Benefits forgone in accepting the employment are relevant. If an employee has given up a secure job (or has forgone other income, pension or superannuation rights) to take up employment with the employer then a longer period of notice may be justified.231 The length of time that the employee would have been likely to remain in employment is relevant. A longer period of notice may be justified where the parties envisaged that the employment be for a long term, even in the absence of an enforceable promise to that effect.232 It is suggested that any failings of [page 731]

the employee, short of serious misconduct, are not relevant in awarding a shorter period of notice. The Supreme Court of Canada has rejected this notion of ‘near cause’ as being relevant in the determination of notice.233

Other factors usually accorded little or no weight 11.60 In assessing reasonable notice courts tend to give little or no weight to the payment period of the employee. The regularity of the payment is still commonly listed as a relevant factor in many decisions, although in cases decided in the last 30 years it rarely appears to have been a significant factor in the calculation of reasonable notice.234 There was once a view that the period of reasonable notice was co-extensive with the regularity of the payment of the employee but this mechanistic method of calculating reasonable notice is no longer applied by the courts.235 Courts attribute little significance to award and statutory provisions when calculating reasonable notice because, as Wilcox J has observed in relation to the predecessor of s 119 of the Fair Work Act: … the statutory formula takes no account of the circumstances of individual employees, other than the duration of the employment and that the employee is over the age of 45 years. It does not differentiate between a person working in a highly specialised and responsible position, to which that person may have moved at considerable expense and inconvenience to himself or herself and family members, and a person who is in a position where it is relatively easy to obtain alternative employment.236

The notice that had previously been given by the employee in former positions, and the notice given by the employer to other employees in similar or more senior positions, will have little or no bearing upon the [page 732] length of the notice.237 There was once a practice of placing considerable emphasis upon the custom in an industry when determining the length of the term of a contract or reasonable notice.238 It is now more difficult to prove such a custom due to changes in the tests applied by courts, broader changes in society and changes in the manner in which employees are engaged.239 A custom will be relevant if proved.

11.61 The opinions of the parties concerning what is reasonable notice will probably not be relevant in determining the length of reasonable notice. In Logan v Otis Elevators the employee conceded that a month’s notice was appropriate. The Full Court held that ‘it is for the Court to determine what length of notice would be reasonable under the circumstances; even a direct concession by an applicant would not determine that issue’.240 The failure of the employee to complain immediately about the length of the notice provided should not be used as a guide in determining whether the notice given was in fact of a reasonable length.241 The actions of the party receiving the notice after the notice was given are not relevant in determining whether the notice was reasonable when given. The court cannot assess what is reasonable by judging how long it in fact takes for the employer to find a replacement employee or how long it takes an employee to find other suitable employment.242 The [page 733] fact that the parties to the employment relationship once had a close personal relationship does not justify a longer period of notice.243 There is no Australian authority to support the proposition that the employer’s financial circumstances ought to be taken into account in determining the length of the notice. It would appear to be contrary to the purpose of notice to do so.244 11.62 One significant largely unresolved issue is the role, if any, played by the circumstances of the dismissal in assessing the length of reasonable notice. It is clear that in a wrongful dismissal action a separate head of damages may not be awarded to an employee to compensate for the fact that the dismissal (or the manner of the dismissal) makes it more difficult to obtain future employment.245 In Canada the approach is that in assessing the period of reasonable notice it is relevant to consider whether the employer acted in bad faith, or handled the termination in a callous or unprofessional manner, or in such a way as to make it more difficult for the employee to obtain future employment.246 There is some limited authority (based on an uncertain foundation) to support this approach in Australia, particularly when the employer’s post-termination conduct makes it more difficult for the

employee to gain other employment.247

OTHER MATTERS RELATING TO NOTICE Effect of complying and non-complying notice 11.63 Complying notice is notice that has been given in accordance with the terms of the contract and any applicable statute or industrial instrument. Its effect is considered in 11.64. The effect of non-complying notice depends on whether is notice does not comply with the terms of the contract or a statute: see 11.65–11.67. [page 734]

Complying notice 11.64 Notice that has been given in accordance with the terms of the contract and any applicable statute or industrial instrument terminates the employment relationship and the contract at the expiration of that notice.248 Where an employee receives such notice from his or her employer it is not necessary to accept (or refuse to accept) the notice: the notice will have effect despite any protestations from the employee.249 Once notice has been given by the employee or the employer, the recipient of the notice does not have the right to immediately terminate the contract. An employer who terminates the employment of an employee summarily during a notice period initiated by the employee will, in the absence of a serious breach or repudiation by the employee, be in breach of the contract and the summary dismissal will be wrongful.250 The fact that one party has given notice does not alter the other party’s obligations concerning notice. In Bell v Gillen Motors Pty Ltd the employee and employer were obliged to give three weeks’ notice. The employee gave four weeks’ notice to the employer. After a week had elapsed, the employer determined to terminate the employment by giving two weeks’ notice, figuring that one of the required three weeks had elapsed. The court

concluded that the employer could not set off the elapsed period served pursuant to the employee’s notice against the notice the employer was obliged to provide.251

Non-complying notice in breach of contract 11.65 Notice that is given in breach of the contract does not operate to terminate the contract at the expiration of the notice.252 An express or implied term requiring notice for a specified period does not commence until it is given in accordance with the terms of the contract. For example, [page 735] an employee entitled to three months’ notice who is only provided with one month’s notice is entitled to a full three months’ notice after either the date of the wrongful dismissal (when the purported notice expires) or from the date of the acceptance of the repudiation constituted by the serving of short notice, whichever is the sooner.253 Despite the fact that the contract is not terminated by the giving of non-complying notice, the employment relationship will terminate on the expiration of that notice.254 The invalid notice is not a nullity.255 The termination of the employment relationship prevents the employee from earning wages after the dismissal, notwithstanding the continued existence of the contract.256 When an employer pays to the employee an amount in lieu of notice then the payment will usually be on account of the employee’s claim for breach of contract and is set off against the damages suffered by the employee.257 The giving of short notice by an employer will usually be a repudiation which the employee may elect to accept.258 If that election is made, then the contract of employment will terminate at the time of the election (or at some other time in accordance with the terms of the election). 11.66 The failure to follow a contractually agreed mandatory procedure prior to the giving of notice has a similar effect. Compliance with a mandatory procedure will usually be a condition precedent to the existence of a right to terminate under the contract. There will be no contractual right to terminate

when that condition precedent has not been fulfilled. The failure to follow the termination procedure does not render the dismissal invalid or void.259 A dismissal in breach of the [page 736] termination procedure will terminate the employment relationship, but not the employment contract; that is, it will be a wrongful dismissal.260 Damages for breach of a notice clause and equitable relief are discussed in more detail in Chapters 14 and 15 respectively. Two points should be mentioned here. First, damages granted to employees arising from a breach of express terms limiting the right to terminate will sometimes be far greater than the damages awarded to employees for breach of a notice clause for the reasons discussed in 14.60. Second, equitable relief is more readily granted to enforce an express term to restrain an employer from implementing an incorrect procedure.261

Non-complying notice in breach of statute 11.67 The effect of giving notice or terminating the contract in breach of a statute or industrial instrument raises different considerations. Conduct that contravenes a statute or industrial instrument is not necessarily invalid and of no effect. Its effect depends upon whether there can be discerned a legislative purpose to invalidate any act that fails to comply with the statutory protections. The purpose is ascertained by reference to the language of the statute, its subject matter and objects, and the consequences for the parties of holding void every act done in breach of the condition. Various factors are taken into account. Some are decisive in some contexts but not others. ‘There is no decisive rule that can be applied; there is not even a ranking of relevant factors or categories to give guidance on the issue.’262 These factors are discussed in more detail in 4.28–4.31. So far as the provision of notice is concerned, the Fair Work Act imposes a penalty for non-compliance with s 119 (and for non-compliance with notice provisions in industrial instruments). Such breaches do not render notices given in breach

of the Act or instruments void.263 [page 737]

Withdrawal of notice 11.68 Once a valid notice has been given it cannot be withdrawn except by mutual consent or pursuant to a statutory right to withdraw.264 This rule only applies when the notice is given to the other party; the notice is complete; and the notice is valid (that is, of the requisite length and in the requisite form). Where the notice has not been received by the employer (or its agent) then the notice may be withdrawn at any time prior to its receipt.265 In rare cases contracts provide that an act of a third party or the recipient of the notice is necessary to give effect to the notice, such as a contract (or statute) that requires the employee’s resignation be accepted prior to it taking effect.266 In such cases the withdrawal of the notice prior to that acceptance or endorsement will validly withdraw the notice. Conditional notice may be withdrawn prior to the fulfilment of the condition.267 The cases concerning the withdrawal of notice given in a state of emotional distress are discussed in 11.12. 11.69 Where the notice is invalid because it is not of the requisite length or in the requisite form then it is usually a repudiation of the contract by the giver of the notice. Invalid notice is a clear indication that the giver of the notice does not intend to continue to perform the contract after the expiration of the notice: see 10.28. Acceptance of the repudiation by the other party terminates the contract. An invalid notice, being a repudiation, may be withdrawn at any time up until its acceptance.268 [page 738] In Norwest the employer repudiated the contract by giving one month’s notice instead of 12 months, and then a week later changed its mind before the employee elected to terminate. The Court of Appeal concluded that the

notice was a repudiation; the employee had the right to accept it and terminate the contract; he had not accepted it before it was retracted; and after the retraction the employee could not rely on the repudiation to justify the termination.269 11.70 In some rare cases governed by statute an employee who holds an office may not be able to withdraw a resignation, even with the consent of the employer.270 When notice is consensually withdrawn it is probable that the existing contract of employment will continue and a new contract of employment will not be formed.271 A compulsory winding up order, and some other events relating to insolvency, act as the giving of notice. It has been said that the notice may be waived by a liquidator who seeks to retain the services of an employee, though given the modern understanding of waiver these cases are perhaps best understood as dealing with a consensual withdrawal of the notice.272 In such cases there is authority for the view that the agreement to not rely on the notice must be unequivocal and will not be inferred from continued employment.273

Payment in lieu of notice 11.71 The provision of notice and payment in lieu of notice are not the same thing. When an employer gives notice the employee remains in the service of the employer during the period of that notice and earns wages during the notice period. The effect of an employer giving a ‘payment in lieu of notice’ depends on what is meant by that ambiguous phrase. This section discusses the various meanings of that phrase and the effects of the various types of payment (11.72–11.76); it then examines the right of the employer to make a payment in lieu of notice (11.77) and notes the availability of damages in an action against an employer for making such a payment rather than giving notice (11.78–11.79). There is a discussion in 14.101 of the relationship between the various types of payment in lieu and the duty to mitigate. [page 739]

The four types of payments in lieu of notice 11.72 In Delaney v Staples Lord Browne-Wilkinson, with whom the other Law Lords agreed, identified four different types of payment in lieu of notice.274 First, there is ‘garden leave’ where the employee is given notice of the dismissal, informed that it is unnecessary (or even prohibited) for the employee to attend for work during the notice period and is paid a sum representing remuneration which the employee would have been entitled to receive if the employee had performed work during the notice period. The employer ordinarily does not breach the contract by sending the employee on garden leave unless the employee has a right to be provided with work.275 The lump sum payment is an advance payment of wages, not a payment on account of a claim for damages.276 Providing garden leave does not immediately terminate the contract; instead, the employment relationship and contract continue to exist until the expiration of the period to which the payment relates and the employee is usually under continuing obligations to perform work for [page 740] the employer if requested to do so during the garden leave.277 It will usually be a breach of contract for the employee to commence work for a rival of the former employer during the period of garden leave. An injunction may be obtained to restrain such a breach, though courts have rightly exhibited some reluctance to issue injunctions where no damage is likely to be suffered by the employer.278 11.73 The second type of payment in lieu of notice arises where there is a contractual term, express or implied, requiring or permitting the employer to make such a payment. If the employer makes the payment then the employment is terminated (usually immediately) and the payment of the sum is not a breach by the employer. If the employer fails to make the payment then two situations need to be distinguished. On the one hand, if the term provides that the employer must make the payment then the sum may be recovered as a liquidated debt — not as damages for breach of contract.279 On the other hand, if the term provides that the employer may (but not must)

make the payment then the employee must rely on his or her action for wrongful dismissal and recover unliquidated damages.280 11.74 Third, the parties may agree that the employer will make a payment on termination, such as an agreed redundancy or termination payment. If the employer makes the payment then the employment is terminated in accordance with the agreement and the payment of the sum is not a breach by the employer. The failure to make the payment results in a claim for a liquidated debt by the employee — not damages for breach of contract.281 11.75 The fourth and final category is the most common type of payment in lieu of notice. It reflects the strictly accurate meaning of the phrase. It arises when an employee is entitled to receive notice of the termination and the employer, instead of giving that notice, dismisses [page 741] the employee and makes a payment of a sum equal to (or less than) the remuneration that the employee would have received during the agreed notice period. The effect of the dismissal is to terminate the employment at the commencement of the period to which the payment relates.282 The wrongful dismissal is a breach of the contract. The sum paid is not wages as it is not earned by service. The sum is a payment by the employer on account of the employee’s claim for damages for breach of contract.283 11.76 When an employer provides a ‘payment in lieu of notice’ to an employee it is often not clear what type of payment is being referred to. Resolving this issue is a question of fact in each case, sometimes depending upon subtle nuances of wording.284 In Australia, Wilcox CJ has observed that, in the absence of evidence to the contrary, it should usually be inferred that the provision of ‘payment in lieu of notice’ to an employee is intended to terminate the employment relationship at the commencement of the period to which the payment relates; that is, there is a presumption that the phrase is used in the fourth sense discussed above.285

The right to make a payment in lieu of notice

11.77 The next issue is whether the employer has an express or implied right to make a payment in lieu of notice. If such a right exists, the payment in lieu may be in the second category discussed in 11.73; if no right exists the payment in lieu will fall within the fourth category discussed in 11.75. An express term may deal with this issue. If it does not, then whether a term permitting payment in lieu of notice should be implied falls to be determined by reference to the ordinary tests. [page 742] Prior to about 1920 there were various customs granting employers the right to terminate contracts by making a payment in lieu of notice.286 In recent years those customs have fallen into disuse. There is no term implied in law granting a right to make a payment in lieu of notice and the implication of such a term in fact faces considerable difficulties.287 This reluctance of courts to imply such a term is consistent with the proposition that an employer is obliged to retain the employee in its service for the duration of the contract, including any period of notice.288 Payment in lieu of the statutory obligation to give notice in s 119 of the Fair Work Act may be provided: see 11.37.

Consequences of a payment in lieu in breach of contract 11.78 Where there is no contractual right to make payment in lieu of notice a dismissal coupled with a payment in lieu of notice will be a breach of the contract.289 In some cases it may not be a serious breach justifying termination.290 If the breach is serious, then the date of the termination of the contract (as opposed to the date of the termination of the employment) will be the date upon which the employee elects to accept that breach as terminating the contract — a concept not without practical difficulties.291 Ordinarily, the damages arising from the breach will be the amount that the employee would have been entitled to receive in remuneration during the period of the notice and, as noted above, the payment in lieu

[page 743] of notice is treated by the law as payment by the employer to partially or completely extinguish the damages recoverable by the employee.292 However, the damages recovered by the employee for the breach may be substantial. 11.79 In WT Partnership (Aust) Pty Ltd v Sheldrick the employee was based in Malaysia and was entitled to be given three months’ notice of termination. When he was wrongfully dismissed his work permit was affected and, as required by Malaysian laws, he left the country within a few days. He had wished to remain in Malaysia and seek alternative employment and would have been better placed to do so if he had remained there. He successfully argued that if he had been given three months’ notice then he would have been able to remain in Malaysia and pursue the chance of obtaining alternative employment. He lost this valuable opportunity and the payment in lieu of notice did not compensate for this lost opportunity. He recovered $30,000 for the breach.293 Although the case concerned unusual facts, it has the potential for broader application. It is sometimes said that an employee’s prospects of obtaining other employment may be better if the search is undertaken while the employee remains in employment.294 If that proposition is correct, then giving a payment in lieu of notice rather than providing notice may sound in damages equal to the value of the lost opportunity.

Termination by agreement 11.80 Contracts of employment may be terminated by agreement.295 This mode of termination has been variously described as a rescission of the contract, or an abandonment, cancellation, discharge or extinguishment of the obligations, though some of those legal concepts have different [page 744]

effects.296 A termination by agreement does not terminate the contract ab initio (from the beginning). It most commonly extinguishes all executory obligations of the parties, releasing the parties from future performance. Termination by agreement may be the trigger for the accrual of particular rights, such as the payment of termination payments.297 Whether the agreement operates to release the parties from accrued obligations depends on the parties’ intention.298 11.81 An agreement to terminate a contract by consent is itself a contract.299 It gives rise to the same issues that are considered in Chapter 3 concerning the formation of a contract as well as the matters that may vitiate the contract, such as duress and misrepresentation.300 The parties may agree that the contract terminate immediately or at a particular time or on the occurrence of a particular event.301 An election to terminate following a repudiation or serious breach does not terminate the contract by agreement. Issues concerning the termination of employment contracts by agreement usually arise in one of three contexts. First, a common means by which employment contracts are terminated by agreement arises from the employee’s acceptance of a voluntary redundancy offer. The terms of such offers vary. They often involve an agreement between parties that the employment will terminate on a given date and that the employer will pay a specified amount of redundancy pay and other entitlements. In the absence of vitiating factors, an acceptance of such an offer will result in the termination of the contract and the employment by agreement.302 [page 745] Second, issues associated with a termination by agreement arise where one of the parties has given notice to the other party and an agreement is reached to alter that notice. There is a distinction between an agreement to terminate a contract and an agreement to vary the notice served by one party on the other. Once a decision has been made to terminate the contract and this is communicated through the service of notice, the parties often perceive an advantage in ceasing work as soon as possible. To this end employers

sometimes send their employees on ‘garden leave’ for the period of the notice — a dispensation from the obligation to serve for the notice period: see 11.72. At other times, agreements are reached to shorten the notice period. The effect of both an agreement to terminate a contract and an agreement to vary the notice period is the same: the contract and the employment will terminate at the expiration of the notice or at the time the agreement takes effect. However, courts are loath to conclude that an agreement reached about the length of the notice period during the notice period itself gives rise to a consensual termination of the contract and the employment, especially where reaching such an agreement will result in the employee not being permitted to pursue actions for unfair or wrongful dismissal or will negate significant contractual benefits otherwise payable to the employee. The United Kingdom Court of Appeal has endorsed the view that: [It] would be a very rare case, indeed, in which it could properly be found that the employer and the employee had got together and, notwithstanding that there was a current notice of termination of the employment, agreed mutually to terminate the contract, particularly when one realises the financial consequences to the employee involved in such an agreement.303

Third, the parties may agree to change their contractual obligations, usually by either a variation or the consensual termination of the contract and its replacement with a new contract. The latter mechanism is a novation; it is discussed in 6.37. _________________________ 1.

In this chapter reference is regularly made to the giving of notice by an employer. Except where otherwise indicated, the law stated below applies equally to the giving of notice by an employee.

2.

See 1.20.

3.

Birrell v Australian National Airlines Commission (1984) 5 FCR 447 at 457; New South Wales v Paige (2002) 60 NSWLR 371; 115 IR 283 at [277]; Riordan v The War Office [1959] 3 All ER 552 at 557–8 (aff’d [1961] 3 All ER 774; [1961] 1 WLR 210); Harris and Russell Ltd v Slingsby [1973] ICR 454 at 455–6; Re Oriental Bank Corporation (MacDowall’s case) (1886) 32 Ch D 366 at 370–1; Marks v The Commonwealth (1964) 111 CLR 549 at 570–1 and CF Capital Plc v Willoughby [2011] EWCA Civ 1115 at [25].

4.

CMS Dolphin Ltd v Simonet [2001] 2 BCC 600 at [87] and [95].

5.

See 7.91.

6.

New South Wales v Paige, note 3 above, at [378] per Giles JA.

7.

Marks v The Commonwealth, note 3 above, at 567–8 and 571; Custodial Ltd v Cardinal Financial Services Ltd [2005] 2 Qd R 115; [2004] QSC 452 at [52] (a distinction between a notice of intention to resign and a notice of resignation was a distinction without a difference)

and Frederick v State of South Australia (2006) 94 SASR 545; (2006) 152 IR 182 at [63]; see also Taupo Totara Timber Co Ltd v Rowe [1977] 3 All ER 123; [1978] AC 537 at 544. 8.

For military officers, see Marks v The Commonwealth, note 3 above, at 557, 558, 560–1 and 566–85; Coutts v Commonwealth (1985) 157 CLR 91 at 121–2; 59 ALR 699 at 708 and the Defence (Personnel) Regulations 2002 (Cth) reg 91; for certain ecclesiastics see Reichel v Bishop of Oxford (1887) 35 Ch D 82; for teachers in New South Wales, see New South Wales v Paige, note 3 above, at [344]–[354] per Mason P; cf Giles JA at [374]–[387].

9.

Marks v The Commonwealth, note 3 above, at 589–90. Current public sector statutes include PS Act 1999 (Cth) s 30 and PA Act 2004 (Vic) s 20 (permitting retirement at the age of 55, but are otherwise silent about resignation), PSEM Act 2002 (NSW) s 26 (acceptance needed) and PS Act 2009 (SA) s 52 (resignation permitted on notice); see also G McCarry, ‘Termination of Employment Contracts by Notice’ (1986) 60 ALJ 78 at 80. On Murphy J’s view on the constitutional protection, see R v Director General of Social Welfare (Victoria); Ex parte Henry (1975) 133 CLR 369 at 388; 8 ALR 233 at 248; Seamen’s Union of Australia v Utah Development Co (1978) 144 CLR 120 at 158; 22 ALR 291 at 319; General Practitioners Society in Australia v Commonwealth of Australia (1980) 145 CLR 532 at 565; 31 ALR 369 at 394–5.

10.

Section 1 of the Employment Relations Act 1996 (UK) requires (and that Act’s predecessors required) employers provide to their employees a written statement including details of the length of the notice period required under the contract.

11.

Lord Leconfield v Thornely [1926] AC 17 and Machtinger v HOJ Industries Ltd [1992] 1 SCR 986. The effect of the principal Australian statutes on inconsistent express notice provisions is discussed at 11.48.

12.

See, for example, the contracts in Down v Pinto (1854) 9 Ex 326; 156 ER 139; New South Wales Cancer Council v Sarfaty (1992) 28 NSWLR 68 and McClelland v Northern Ireland General Health Services Board [1957] 2 All ER 129.

13.

Edward Keller (Australia) Pty Ltd v Hennelly (1990) 35 IR 464 and Macauslane v Fisher and Paykel Finance Pty Ltd [2003] 1 Qd R 503; [2002] QCA 282 at [18]–[21].

14.

Director General of the Department of Corrective Services v Mitchelson (1992) 26 NSWLR 648; Ex parte Wurth; Re Tully (1954) 55 SR (NSW) 47; see PSEM Act 2002 (NSW) s 23; PS Act 2009 (SA) s 48; Fair Work Act s 383 (excluding employees serving a qualifying period from protections against unfair dismissal).

15.

Northern Land Council v Hansen [2000] NTCA 1 at [27] (probation clause gave the employee the right to have performance objectively assessed) and Saad v TWT Limited [1998] NSWSC 282 (New South Wales Court of Appeal took the view that the employee was entitled to remain in employment until the conclusion of the probation period); O’Rourke v Miller (1985) 156 CLR 342 at 350–4; 58 ALR 269 at 274–7 (employee entitled to procedural fairness at the conclusion of a fixed period of probation).

16.

Transport Workers’ Union v National Dairies Limited (1994) 57 IR 183 at 184–5; New South Wales v Paige, note 3 above, at [292]–[302], [340]–[341] and [386]– [388]; Brown v Southall & Knight [1980] ICR 617 at 628. See 11.11 where the giving and receipt of notice by agents is discussed.

17.

See also s 29 (1) of the PS Act 1999 (Cth) that requires a notice of termination of employment to be in writing and to specify the grounds that are relied on for the termination.

18.

Latchford Premier Cinema Limited v Ennion [1931] 2 Ch 409 at 410; Knight v Bulic (1994) 13 ACSR 553 at 561; Deputy Commissioner of Taxation v Robertson (2009) 234 FLR 35; [2009]

NSWSC 597 at [110]: each of these cases concerned directors who were required by the constitution of the company to resign in writing. 19.

Mannai Investments Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749 at 768; [1997] 3 All ER 352 at 369–70, referred to approvingly in Hometeam Constructions Pty Ltd v McCauley [2005] NSWCA 303 at [148].

20.

Robinson v Becata Pty Ltd [2004] NSWSC 310 at [50]–[53]; Fardell v Coates Hire Operations Ltd (2010) 201 IR 64; [2010] NSWSC 346 at [82] and [92]; Carter v Hyde (1923) 33 CLR 115 at 126 and Fightvision Pty Ltd v Onisforou (1999) 47 NSWLR 473; [1999] NSWCA 323 at [99].

21.

Mannai Investments Co Ltd v Eagle Star Life Assurance Co Ltd, note 19 above, AC at 768; All ER at 369–70 per Lord Steyn; Fardell v Coates Hire Operations Ltd, note 20 above, at [82] and Rigby v Ferodo Ltd [1988] ICR 29 at 34 (informing employees that their wages were to be unilaterally reduced was not the exercise of such a right); Morris v CH Bailey Ltd [1969] 2 Lloyd’s LR 215 at 219–20 (notice was not provided when the employees were informed that if they did not agree to changed conditions the employment would be terminated) and Gillies v Downer EDI Ltd [2011] NSWSC 1055 at [150] (asserting that employment was terminated and giving a payment in lieu was notice).

22.

Fardell v Coates Hire Operations Ltd, note 20 above, at [82] and Burton Group v Smith [1977] IRLR 350 at 354. As to the meaning of the phrase, termination ‘effective’ or ‘with effect from’ a particular date, see the review of authorities in Hughes v NM Superannuation Pty Ltd (1993) 29 NSWLR 653; 48 IR 424 at 434–5.

23.

Morton Sundour Fabrics Limited v Shaw (1967) 2 ITR 84 at 86; Burton Group Limited v Smith [1977] IRLR 351 at 354; Haseltime Lake and Co v Dowler [1981] ICR 222 at 225 and Bearingpoint Australia Pty Ltd v Hillard [2008] VSC 115 at [123].

24.

Walton v Wollondilly Abattoirs Co-op Limited (1993) 50 IR 81 at 84 and Rogan-Gardiner v Woolworths Ltd [2010] WASC 290 at [148]–[152] (no valid notice given when the employee informed in April that her position was going to be abolished).

25.

See the cases at note 7.

26.

Thickbroom v Newcastle Wallsend Coal Company Pty Ltd (1998) 83 IR 193 at 197–8; see also Morris v CH Bailey Ltd, note 21 above, at 219–20.

27.

Rai v Somerfield Stores Ltd [2004] ICR 656 at [30]–[31]; Sealey v Avon Aluminium Co Ltd [1978] IRLR 285 at [23] and Fardell v Coates Hire Operations Ltd, note 20 above, at [82]–[94]. As to the withdrawal of notice generally, see 11.68–11.70.

28.

Fardell v Coates Hire Operations Ltd, note 20 above, at [82]–[94]; see also Cranston v Canadian Broadcasting Corporation (1994) 2 CCEL (2d) 301 (conditional offer to resign lapsed when condition was not satisfied).

29.

Mountford v London County Council [1935] 2 KB 243 (the employee was given the proper notice under the contract, but told that if he accepted a 25% pay cut the notice would be withdrawn) and Faithorn v Territory of Papua (1938) 60 CLR 772 (Crown dismissed the employee on no notice pursuant to a statutory power and reappointed him at a lower rate of pay); see 6.13.

30.

Rigby v Ferodo Ltd, note 21 above, at 33; Burdett-Coutts v Hertfordshire County Council [1984] IRLR 91; James Miller Holdings Ltd v Graham (1978) 3 ACLR 604 at 612–3 (no new contract when the receiver, mistakenly, told employees that the effect of his appointment was that their contracts were terminated but that he was re-engaging them on identical terms); Cowey v Liberian Operations Ltd [1966] 2 Lloyd’s LR 45 at 50 (change in termination rights); National

Coal Board v Galley [1958] 1 All ER 91 (change in working hours) and J T Stratford & Son Ltd v Lindley [1965] AC 269 at 285 (notice of a strike in the future unless demands were complied with was not a notice of intention to terminate). 31.

Decro-Wall International SA v Practitioners in Marketing Ltd [1971] 1 WLR 361 at 382; 2 All ER 216 at 235.

32.

Riordan v The War Office, note 3 above (aff’d [1961] 3 All ER 774; [1961] 1 WLR 210); see also New South Wales v Paige, note 3 above, at [294]–[303] and [386]–[387].

33.

See, for example, Francis v South Sydney District Rugby League Football Club Ltd [2002] FCA 1306 at [106] and [181] (authority of the sister of an employee to receive offer to vary the contract and authority of a coach to make such offers). Whether a union was acting as agent for its members was considered in Australian Workers Union v Stegbar Australia Pty Ltd [2001] FCA 367 at [16]–[21]; Morris v CH Bailey Pty Ltd [1969] 2 Lloyd’s LR 216 at 220 and Heatons Transport (St Helens) Ltd v Transport and General Workers Union [1973] AC 15 at 46–7; [1972] 2 All ER 1214 at 1244 (rev’d on other grounds [1972] 3 All ER 101) and Chappell v Times Newspapers Ltd [1975] ICR 145 at 172–3. The principles governing agency and the role of union delegates are further discussed in 3.73.

34.

Willoughby v CF Capital plc [2011] ICR 88 at [30] (aff’d [2011] EWCA Civ 1115).

35.

Sovereign House Security Services Ltd v Savage [1989] IRLR 115 at 116 and Martin v Yeoman Aggregates Ltd [1983] ICR 314 at [14]–[15].

36.

See the cases cited at note 20 and Kwik-Fit (GB) Ltd v Lineham [1992] ICR 183 at 189.

37.

Australian National Airlines Commission v Robinson [1977] VR 87 at 91; Gunnedah Shire Council v Grout (1995) 134 ALR 156 at 165; 62 IR 150 at 159 and Heine Bros (Australia) Pty Ltd v Forrest [1963] VR 383 at 384; see 10.25 and 10.66.

38.

New South Wales v Paige, note 3 above, at [283]–[286] and [368]–[372] and Achal v Electrolux Pty Ltd (1993) 50 IR 236 at 238–9.

39.

As to unconscionability, see the discussion of duress, undue influence and unconscionable conduct in 4.2–4.14 and, in a different context, Sunbird Plaza Pty Ltd v Maloney (1988) 77 ALR 205; (1988) 166 CLR 245 at 263 and Brien v Dwyer (1978) 22 ALR 485; 141 CLR 378 at 403. As to good faith, see 8.28.

40.

Cf Capital Plc v Willoughby, note 3 above, at [26] and Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95; 187 ALR 92 at [24]–[25]; see 3.5.

41.

Gunnedah Shire Council v Grout, note 37 above, ALR at 166–7; IR at 160–1; Kwik-Fit (GB) Ltd v Lineham, note 36 above, at 188; Sothern v Franks Charlesly & Co [1981] IRLR 278 at [21]; Barclay v City of Glasgow District Council [1983] IRLR 313 at [11]–[12] and Minato v Palmer Corporation Ltd (1995) 63 IR 357 at 361–3; see also Willoughby v CF Capital plc, note 34 above, at [33]–[38].

42.

Willoughby v CF Capital plc, note 34 above, at [38] and on appeal at [2011] EWCA Civ 1115 at [37]–[38]; Kwik-Fit (GB) Ltd v Lineham, note 36 above, at 191–2; Martin v Yeoman Aggregates Limited, note 35 above, at [14]–[15] and Barclay v City of Glasgow District Council, note 41 above, at 315 (retraction over the weekend).

43.

Evidence of the employer’s state of mind is relevant to determine this issue: see M Furmston and G Tolhurst, Contract Formation, Oxford University Press, Oxford, 2010, pp 3–4 and 34–5 and Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309 at 331.

44.

See 10.92.

45.

See 11.19–11.22.

46.

Gorgevski v Bostik (Australia) Pty Ltd (1991) 39 IR 229; Lane v Arrowcrest Group Pty Ltd (1990) 27 FCR 427; 99 ALR 45 and Gregory v Philip Morris Ltd (1988) 80 ALR 455; 24 IR 397.

47.

Davis v Foreman [1894] 3 Ch 654.

48.

See 11.31–11.32. Statutes may also limit the grounds or the circumstances in which a private sector employer can terminate the contract or give notice: see, for example, Automatic Fire Sprinklers v Watson (1946) 72 CLR 435 and Young v Tockassie (1905) 2 CLR 470. Antidiscrimination schemes in Australia also regulate the grounds on which notice can be given.

49.

Dietman v Brent London Borough Council [1987] ICR 737 at 752. Common law rights to terminate may augment the contractual right: see 10.92.

50.

Jones v Gwent County Council [1992] IRLR 521; Irani v Southampton and South West Hampshire Health Authority [1985] ICR 590; Boyo v Lambeth London Borough Council [1994] ICR 727; Gunton v Richmond-upon-Thames London Borough Council [1981] 1 Ch 448; [1980] 3 All ER 577; Dietman v Brent London Borough Council, note 49 above; Peace v Edinburgh City Council [1999] IRLR 417; Jones v Lee (1980) 78 LGR 213; [1980] ICR 310; Ali v Southwark London Borough Council [1988] ICR 567 (hearing before dismissal not provided); Tucker v Pipeline Authority (1981) 3 IR 120; Lakshmi v Mid Cheshire Hospitals NHS Trust [2008] IRLR 956 (implied term that the employer would comply with disciplinary policy); Malone v British Airways Plc [2010] IRLR 431; King v University Court of the University of St Andrews [2002] IRLR 252 at [21]–[22]; University of Wollongong v National Tertiary Education Industry Union [2002] FCAFC 85 (industrial instrument imposed disciplinary procedure to be followed).

51.

Ali v Southwark London Borough Council, note 50 above, at 577–8; Lakshmi v Mid Cheshire Hospitals NHS Trust, note 50 above, at [32]; Gunton v Richmond-upon-Thames London Borough Council, note 50 above and Faithorn v Territory of Papua, note 29 above, at 786; cf the dicta of Ralph Gibson LJ in Boyo v Lambeth London Borough Council, note 50 above, at 745 and Walker v Zurich Australia Insurance Ltd (2000) 106 IR 23; [2000] QSC 345 at [61]–[62] and on appeal at [2001] QCA 296 at [7]–[18].

52.

Ali v Southwark London Borough Council, note 50 above, at 578–80 and Longley v National Union of Journalists [1987] IRLR 109.

53.

See, for example, Mezey v South West London and St George’s Mental Health NHS Trust [2007] IRLR 244.

54.

See 11.31–11.35.

55.

Anderson v Pringle of Scotland Ltd [1998] IRLR 64; Marley v Forward Trust Group Ltd [1986] ICR 891; Alexander v Standard Telephones and Cables Ltd (No 1) [1990] ICR 291 (last on–first off principle) and Martin v Tasmania Development and Resources (1999) 163 ALR 79; 89 IR 98; [1999] FCA 593 at [68]–[69] (aff’d on other grounds (2000) 97 IR 66; [2000] FCA 414).

56.

Jones v Lee [1980] ICR 310 at 316–7 and 318–9; see also Crisp v Holden (1910) 54 SJ 784. As to the standard of conduct required of a third party in such matters, see Dixon v South Australian Railways Commissioner (1923) 34 CLR 71; Amann Aviation Pty Ltd v Commonwealth (1990) 22 FCR 527 at 532 and 542–4; 92 ALR 601 at 607 and 616–8.

57.

Balog v Crestani (1975) 132 CLR 289 at 299–300; 6 ALR 29 at 37–8; Fletcher v Nokes [1897] 1 Ch 271 at 274; State of New South Wales v Austeel Pty Ltd [2003] NSWCA 392; Fox v Jolly [1916] 1 AC 1 at 15 and Hounslow London Borough Council v Twickenham Garden Developments Ltd [1970] 3 All ER 326; [1971] Ch 233.

58.

See Eriksson v Whalley [1971] 1 NSWLR 397 and Re Stewardson Stubbs & Collett Pty Ltd &

Bankstown Municipal Council [1965] NSWR 1671. 59.

See Rawson v Hobbs (1961) 107 CLR 466; Green v Sommerville (1979) 141 CLR 594; 27 ALR 351 and Afovos Shipping Co SA v Pagnan [1983] 1 All ER 449.

60.

Afovos Shipping Co SA v Pagnan, note 59 above; in Devonald v Rosser & Sons [1906] 2 KB 728 the notice had to be given ‘first Monday of any calendar month before 12 noon’.

61.

See Bunge (Australia) Pty Ltd v Mallard (1982) 41 ALR 223 (promise of fixed term employment partly inferred from promise of additional payment on the completion of the project); Dyer v Mekinda Snyder Partnership Inc (1998) 35 CCEL (2d) 299 (employed as a project manager for the life of a project, despite the absence of an explicit term to that effect) and Carr v Blade Repairs Australia Pty Ltd (No 2) (2010) 197 IR 307; [2010] FCA 688 at [58].

62.

Bunge (Australia) Pty Ltd v Mallard, note 61 above and Ikin v The Danish Club (2001) 140 IR 101; [2001] VSCA 123 at [17].

63.

Quinn v Jack Chia (Australia) Ltd [1992] 1 VR 567 at 574; 43 IR 91 and Adams v Union Cinemas Ltd [1939] 1 All ER 169 (aff’d [1939] 3 All ER 136). See also Canizales v Microsoft Corporation (2000) 99 IR 426; Ceccol v Ontario Gymnastic Federation (2001) 204 DLR (4th) 688 at [28] and [29]; Derksen v WASA Insurance Co (1994) 4 BCLR (3d) 73; on the distinction between promissory terms and representations, see 5.6.

64.

Buckenara v Hawthorn Football Club Ltd [1988] VR 39 at 46.

65.

Bracegirdle v Heald (1818) 1 B & A 722; 106 ER 266; Britain v Rossiter (1879) 11 QBD 123 at 124–5; Hanau v Ehrlich [1912] AC 39; Cayme v Allan, Jones and Co (1919) 35 TLR 453; Dale v William M’Culloch & Co (Limited) (1883) 9 VLR 136 and James v Thomas H Kent & Co Ltd [1951] 1 KB 551; [1950] 2 All ER 1099 (fixed term contract for three years unenforceable).

66.

See Mercantile Law Act 1935 (Tas) s 6.

67.

Victoria v Commonwealth (1996) 187 CLR 416 at 520; 138 ALR 129 at 173; Coleman v Mirror Newspapers Ltd (1967) 10 FLR 426; Abbott v Women’s and Children’s Hospital Inc (2003) 86 SASR 1 at [32] (aff’d [2004] SASC 67) and Mayers-Browne v Federated Liquor and Allied Industries Employees Union of Australia (SA Branch) (1989) 27 IR 290 at 293. Compare with contracts that contain provisions that the contract is for a specified term and will continue until certain notice is provided: Brown v Symons (1860) 141 ER 1145; (1860) 8 CBNS 208; Langton v Carleton (1873) LR 9 Exch 57; Re An Indenture, Marshall & Sons Ltd v Brinsmead & Sons Ltd (1912) 106 LT 460 and Costigan v Gray Bovier Engines Ltd (1925) 41 TLR 372.

68.

Qantas Airways Ltd v Christie (1998) 193 CLR 280; 152 ALR 365 at [62]–[67] and Wiltshire County Council v National Association of Teachers in Further and Higher Education [1980] ICR 455 at 460.

69.

See 14.64.

70.

Some contracts do provide for additional compensation where there is no renewal of the contract or where the non-renewal is for reasons of redundancy: see, for example, the position of Mr Borlace in Manuel v Pasminco Cockle Creek Smelter Pty Ltd (1998) 83 IR 135; see also Richardson v Queensland Corrective Services Commission (1994) 55 IR 475 and Guthrie v News Ltd (2010) 27 VR 196; [2010] VSC 196 at [181]–[195]. In the United Kingdom the Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations make less favourable treatment of fixed term employees unlawful and restrict the successive use of fixed term contracts unless justified on objective grounds.

71.

See 14.58.

72.

See generally Brambles Ltd v Wail (2002) 5 VR 169; [2002] VSCA 150.

73.

Bullock v The Wimmera Fellmongery and Woolscouring Company Ltd (1879) 5 VLR 362 at 365; Broadhurst and Company Limited v Robinson (1903) 29 VLR 447 at 450; Healy v The Law Book Company of Australasia Pty Limited (1942) 66 CLR 252 at 255; Colgan v Municipal Council of Toowomba (1872) 3 QSCR 10 and MacKenzie v The Union and Fire Marine Insurance Company of New Zealand (1880) 1 NSWLR 103. As noted in 11.46, there was formerly a presumption of yearly hiring and where the servant continued service after the expiration of the year the parties were held to have agreed to a further hiring for a year: R v Inhabitants of Macclesfield (1789) 3 TR 76; 100 ER 463 and R v Inhabitants of Long Whatton (1793) 5 TR 447; 101 ER 252.

74.

Minister for Health v Ferry (1996) 65 IR 374; Bauman v Hulton Press Ltd [1952] 1 All ER 1121 at 1125.

75.

See Brambles Ltd v Wail, note 72 above, at [57]–[62]; Bolinger v Virgin Islands Telephone Corporation 293 F Supp 2d 559 (2004) at 564 and Kropfelder v Snap-On Tools Corporation 859 F Supp 952 (2004) at 954–5 (both of which held that employment continued on the same terms after the expiration of fixed term contracts); Re Oriental Bank Corporation (MacDowall’s case), note 3 above, at 371–2 (employment continued for two weeks after the end of the notice); Richardson v Queensland Corrective Services Commission, note 70 above and Abbott v Women’s and Children’s Hospital [2004] SASC 67.

76.

ILO Committee of Experts, Protection Against Unjustified Dismissal, ILO, Geneva, 1995, p 14.

77.

For example, D’Lima v Board of Management, Princess Margaret Hospital of Children (1995) 64 IR 19 (employee signed 18 successive fixed term contracts).

78.

M Waite, The estimations of earnings models for fixed-term employees using AWIRS data, Productivity Commission, Canberra, 2002 and M Wooden and B Bora, ‘Workplace characteristics and their effects on wages: Australian evidence’ (1999) 38 Australian Economic Papers 276.

79.

See Llanelly Railway and Dock Co v London and North Western Railway Co (1875) LR 7 HL 550. A Carnegie, ‘Terminability of contracts of unspecified duration’ (1969) 85 LQR 392 at 397 traces the presumption and its many exceptions.

80.

Haley v Public Transport Corporation (1998) 119 IR 242; [1998] VSC 132 at [83] referring to McClelland v Northern Ireland General Health Services Board, note 12 above. A similarly stringent test has been adopted in Canada: Singh v British Columbia Hydro & Power Authority (2001) 12 CCEL (3d) 214; Wallace v United Grain Growers Ltd (1993) 49 CCEL 71 and Wallace v United Grain Growers Ltd (1995) 14 CCEL (2d) 41 at [67] (the issue was not addressed in the subsequent appeal in the Supreme Court of Canada). See also Ivory v Palmer [1975] ICR 340 at 344; West v TWG Services Ltd (2009) 189 IR 97; [2009] FCA 1052 at [34] per Gray J (‘permanent employment is not to be understood as permanent literally’) and Criminale v State Superannuation Board (1987) 22 IR 240; (1988) 26 IR 13 and (1989) 88 ALR 1; 29 IR 111 (discussion of the distinction between ‘permanent’ and ‘temporary’ employment).

81.

McCasker v Darling Downs Co-operative Bacon Association Ltd (1988) 25 IR 107 at 111; Caulfield v Broken Hill City Council (1995) 60 IR 221 at 230; Orr v University of Tasmania (1957) 100 CLR 526 at 530–1; Tyers v Barmera Packing Company Limited [1930] SASR 123 and West v TWG Services Ltd, note 80 above, at [34].

82.

New South Wales Cancer Council v Sarfaty, note 12 above, at 74 and Ivory v Palmer, note 80 above, at 345 and 353–4; cf the approach in the United States discussed in M Rothstein and L Liebman, Employment Law, 4th ed, Foundation Press, New York, 1998, pp 932–8 and G Pitt, ‘Dismissal at common law: the relevance in Britain of American developments’ (1989) 52 MLR

22 at 27. 83.

See, for example, Lord Leconfield v Thornely [1926] AC 10 and Marks v The Commonwealth, note 3 above, at 567.

84.

McClelland v Northern Ireland General Health Services Board, note 12 above.

85.

McClelland v Northern Ireland General Health Services Board, note 12 above, at 132, 132–4 and 140–3; see also Salt v Power Plant Company Ltd [1936] 3 All ER 322; Davis v Foreman, note 47 above; Wallis v Day (1837) 2 M & W 273; 150 ER 759; Tucker v Pipeline Authority, note 50 above; New South Wales Cancer Council v Sarfaty, note 12 above; McLoughlin v The Great Southern Railways Company [1944] Irish Reports 479; Grehan v The North Eastern Health Board [1989] Irish Reports 422; Ivory v Palmer, note 80 above and Pelletier v Caisse populaire Lasalle Sudbury Ltée (1986) 56 OR (2d) 784. In the United States see the cases reviewed in Gordon v Matthew Bender & Co 562 F Supp 1286 (ND Ill 1983).

86.

Wallis v Day, note 85 above; Phillips v Stevens (1899) 15 TLR 325; Ball v Coggs (1710) 1 Brown 140; 1 ER 471.

87.

WH Milstead & Son Ltd v Hamp and Toss & Glendinning Ltd [1927] WN 233. In later cases where permanent employment was upheld the employee could either give notice (and thereby avoid the rationale for declaring the contract void) or the issue was simply not raised; see also Pelletier v Caisse populaire Lasalle Sudbury Ltée, note 85 above (30-year fixed term contract); Horwood v Millar and Timber Trading Company [1917] 1 KB 305 and Prince Saprai, ‘The Principle Against Self-enslavement in Contract Law’ (2009) 26 JCL 25.

88.

McClory v Post Office [1993] 1 All ER 457 at 462–3 and Intico (Vic) Pty Ltd v Walmsley [2004] VSCA 90 at [17].

89.

Intico (Vic) Pty Ltd v Walmsley, note 88 above, at [3], [17] and [25]; Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 443; 131 ALR 422 at 444; Walker v Citigroup Global Markets Pty Ltd (2005) 226 ALR 114; [2005] FCA 1678 at [203] (aff’d on other grounds (2006) 233 ALR 687; [2006] FCAFC 101); Brophy v Mapstone (1984) 3 FCR 227; 56 ALR 135 at 143; Coutts v Commonwealth, note 8 above, CLR at 121; ALR at 707; Malloch v Aberdeen Corporation [1971] 2 All ER 1278 at 1282, 1286, 1292, 1294 and 1297; McClory v Post Office, note 88 above, at 462–3 (no obligation to provide procedural fairness before a suspension). In some contracts there will be a term implied in fact that the employee is entitled to procedural fairness: see, for example, Lakshmi v Mid Cheshire Hospitals NHS Trust, note 50 above.

90.

Australian Trading Co Pty Ltd v Jones [1925] VLR 273 at 281–3 (not affected by the appeal at (1926) 37 CLR 592). This decision is in part based on Fisher v Jackson [1891] 2 Ch 84 which, in light of unique arrangements governing private school teaching in the nineteenth century, may be a weak foundation: see the cases noted in 15.16.

91.

Gillies v Downer EDI Ltd, note 21 above, at [201]; Russell v Trustees of the Roman Catholic Church, Archdiocese of Sydney (2007) 69 NSWLR 198; 167 IR 121; [2007] NSWSC 104 at [135]–[141] (aff’d (2008) 72 NSWLR 559; 167 IR 121); Rogan-Gardiner v Woolworths Ltd, note 24 above, at [116] and [125]; Johnson v Unisys Ltd [2003] 1 AC 518; [2001] 2 All ER 801 at [78]; Eastwood v Magnox Electric plc [2005] 1 AC 503; [2004] 3 All ER 991 at [10], [28]; Reda v Flag Ltd [2002] IRLR 747; [2002] UKPC 38 at [45] and [52].

92.

Morton v Transport Appeal Board (2007) 168 IR 403; [2007] NSWSC 1454 at [164]; Bednall v Wesley College [2005] WASC 101; Intico (Vic) Pty Ltd v Walmsley, note 88 above, at [23].

93.

Quinn v Gray (2009) 184 IR 279; [2009] VSC 136 at [20]; King v University Court of the University of St Andrews, note 50 above, at [21]–[22]; see D Brodie, ‘Fair dealing and the

disciplinary process’ (2002) 31 ILJ 294. As to the limitations on recovering damages for breach of the term, see 14.75–14.77 and 14.86–14.88. 94.

Ridge v Baldwin [1964] AC 40 at 65; [1963] 2 All ER 66 at 71 per Lord Reid and Malloch v Aberdeen Corporation, note 89 above, at 1282, 1286, 1292 and 1294.

95.

Malloch v Aberdeen Corporation, note 89 above, at 1282 per Lord Reid; Intico (Vic) Pty Ltd v Walmsley, note 88 above, at [17].

96.

Service Station Association v Berg Bennett & Associates Pty Ltd (1993) 45 FCR 84 at 94; 117 ALR 393 at 403–4 per Gummow J; Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234 at 268 and 279–80; see also Amann Aviation Pty Ltd v Commonwealth, note 56 above, FCR at 532 and 542–4; ALR at 607 and 616–18.

97.

Renard Constructions (ME) Pty Ltd v Minister for Public Works, note 96 above, at 263 and Garry Rogers Motors (Aust) Pty Ltd v Subaru (Aust) Pty Ltd [1999] FCA 903 at [35].

98.

Gillies v Downer EDI Ltd, note 21 above, at [204]–[205] and Tasmania Development and Resources v Martin (2000) 97 IR 66; [2000] FCA 414 at [27] and [30].

99.

Johnson v Unisys Ltd, note 91 above, at [47] and Intico (Vic) Pty Ltd v Walmsley, note 88 above, at [23].

100. McClory v Post Office, note 88 above, at 467–8 and Watson v Durham University [2008] EWCA Civ 1266 at [22]. 101. Tasmania Development and Resources v Martin, note 98 above, at [27] and [30]. 102. On the distinction between a power to terminate by giving notice and a right to terminate on the occurrence of the breach, see J Carter and E Peden, ‘Good Faith in Australian Contract Law’ (2003) 19 JCL 155 at 169. 103. Wallace v United Grain Growers Ltd (1997) 152 DLR (4th) 1 at 44–8 per McLachlin J (cf Iacobucci J at 28); see also Johnson v Unisys Ltd [2001] 2 All ER 801; [2001] 2 WLR 1076; [2003] 1 AC 518 at [43] and Gismondi v City of Toronto (2003) 226 DLR (4th) 334 (Court of Appeal for Ontario (‘something akin to intent, malice, or blatant disregard for the employee’). 104. Adin v Sedco Forex International Resources Ltd [1997] IRLR 280; Aspden v Webbs Poultry and Meat Group (Holdings) Ltd [1996] IRLR 521; Hill v General Accident Fire and Life Assurance Corporation plc [1998] IRLR 641; Villella v MFI Furniture Centres Ltd [1999] IRLR 468; Brompton v AOC International Ltd [1997] IRLR 639 at 643; Briscoe v Lubrizol Ltd (No 2) [2002] IRLR 607; EWCA Civ 508 at [21], [64] and [109]; Takacs v Barclays Services Jersey Ltd [2006] IRLR 877 at [78] and D Cabrelli, ‘Discretion, power and the rationalisation of implied terms’ (2007) 36 ILJ 194 at 198–200; cf the approach in Reda v Flag Ltd, note 91 above. 105. Jenvey v Australian Broadcasting Corporation [2003] ICR 79 at [26] and Fardell v Coates Hire Operations Ltd, note 20 above, at [100]. 106. See 1.20. 107. Lucy v The Commonwealth (1923) 33 CLR 229 at 253 per Starke J, referred to approvingly in Jarrett v Commissioner of Police (NSW) (2005) 224 CLR 44; 221 ALR 95; 145 IR 194 at [58]; Carey v Commonwealth (1921) 30 CLR 132 at 137; Gould v Stuart [1896] AC 575 at 586; Ioannou v Fowell (1982) 43 ALR 415; 63 FLR 170 at 188–9 and on appeal (1982) 45 ALR 491; 65 FLR 360 at 369 and 379–80 (aff’d (1984) 156 CLR 328; 52 ALR 460); note also DirectorGeneral of Education v Suttling (1987) 162 CLR 427 at 437; 69 ALR 193 at 200 and Barratt v Howard (2000) 165 ALR 605; 92 IR 350 at [7] (aff’d (2000) 96 FCR 428; 170 ALR 529). 108. Defence (Personnel) Regulations 2002 (Cth) reg 117; Attorney-General (NSW) v Perpetual

Trustee Co Ltd (1955) 92 CLR 113 at 118–21 and Attorney-General (NSW) v Perpetual Trustee Co Ltd (1952) 85 CLR 237 at 301–2. 109. Attorney-General (NSW) v Perpetual Trustee Co Ltd, note 108 above, at 118–21; Enever v R (1906) 3 CLR 969 at 975–6 and Holly v Director of Public Works (1988) 14 NSWLR 140 at 147; the various meanings of officer are discussed in 2.39. 110. For members of the military, see note 108 above; for members of the police force, see Jarrett, note 107 above. 111. Ireland v Johnson (2009) 189 IR 135; [2009] WASCA 162 at [41]–[47] (prisoner not engaged pursuant to a contract); see also Young v Tockassie, note 48 above. 112. Director-General of Education v Suttling, note 107 above, CLR at 437–8; ALR at 200 and McVicar v Commissioner for Railways (NSW) (1951) 83 CLR 521 at 527. 113. See the cases at notes 120–121. 114. Suttling v Director-General of Education (1985) 3 NSWLR 427 at 446 and E Campbell, ‘Termination of appointments to public offices’ (1996) 24 FL Rev 1 at 12–13. 115. Marks v The Commonwealth, note 3 above, at 586; Coutts v Commonwealth, note 8 above, at 101–3 and 119–20; 59 ALR 699 at 706–7 and 719–20 and Jarrett, note 107 above, at [6]. 116. Jarrett, note 107 above, at [7], [77]–[78], [157]; Hunkin v Siebert (1934) 51 CLR 538 at 542 and 544; Barratt v Howard (2000) 96 FCR 428; 170 ALR 529 at [10]; Ward v Director-General of School Education (1998) 80 IR 175 at 179–80; Ruddock v Vadaris (2001) 110 FCR 491; 183 ALR 1 at [33]–[40]; Attorney-General v De Keyser’s Royal Hotel Ltd [1920] AC 508 at 526, 554, 561, 576 and Gould v Stuart, note 107 above, at 578. 117. Coutts v Commonwealth, note 8 above; McVicar v Commissioner for Railways (NSW), note 112 above; Faithorn v Territory of Papua, note 29 above and Trower v Commonwealth (1924) 34 CLR 587 concerned such statutes. It is suggested that many of the older decisions concerning the modification by statute of the common law rule need to be reconsidered in light of the High Court’s approach in Jarrett: Kaye v Attorney-General (Tas) (1956) 94 CLR 193 at 198–200 and Ryder v Foley (1906) 4 CLR 422 at 434, 440 and 441. 118. Ridge v Baldwin, note 94 above, AC at 65–6; All ER at 71–2; Coutts v Commonwealth, note 8 above, at 101–2, 120–1; 59 ALR 699 at 706–7 and 720; Malloch v Aberdeen Corporation, note 89 above, at 1282, 1288, 1293, 1295; Reedman v Hoare (1959) 102 CLR 177 at 181; Ryder v Foley, note 117 above, at 436 and Faithorn v Territory of Papua, note 29 above, at 776–7. 119. Millar v Bornholt (2009) 177 FCR 67; 257 ALR 263 at [72] and Defence (Personnel) Regulations 2002 (Cth) reg 85. As to the common law position see Commonwealth v Welsh (1947) 74 CLR 245 at 257–8, 262 and 274 and Coutts v Commonwealth, note 8 above, CLR at 98–101, 105 and 120–1; ALR at 703–7, 708–9 and 720. 120. Barratt v Howard, note 116 above, at [7]; Jarrett, note 107 above, at [77] and [78]; Shenton v Smith [1895] AC 229 at 234–5 and Gould v Stuart, note 107 above, at 577. 121. Suttling v Director-General of Education, note 114 above, at 443–7, referred to approvingly in Jarrett, note 107 above, at [71]; Shenton v Smith, note 120 above, at 234–5; Gould v Stuart, note 107 above, at 577 and G McCarry, Aspects of Public Sector Employment Law, Law Book Company, Sydney, 1998, p 26; cf Carey v Commonwealth, note 107 above, at 137 and Dunn v The Queen (1896) 1 QB 116. 122. Young v Waller [1898] AC 661 at 664–5; Director-General of Education v Suttling, note 107 above, CLR at 442; ALR at 203–4 and Armitage v Legal Aid Commission (WA) (1995) 59 IR

150; compare Reilly v R [1934] AC 176 at 180 with Wells v Newfoundland [1999] 3 SCR 199 at [49]–[54], referred to approvingly in Jarrett, note 107 above, at [7] and [71]; M Spry, ‘Employment contracts and the abolition of public sector offices’ (1999) 12 AJLL 221 and G McCarry, Aspects of Public Sector Employment Law, note 121 above, p 25. 123. See 15.105–15.109. 124. Australian National University v Burns (1982) 43 ALR 25 at 32 and Palais Parking Station Pty Ltd v Shea (1977) 16 SASR 350 at 359 at 367–8. 125. Acts Interpretation Act 1901 (Cth) s 33(4); Interpretation Act 1987 (NSW) s 47; Acts Interpretation Act 1954 (Qld) s 24; Acts Interpretation Act 1915 (SA) s 36; Interpretation of Legislation Act 1984 (Vic) s 41; see Director-General of Education v Suttling, note 107 above, CLR at 443–5; ALR at 204–5; E Campbell, note 114 above, at 7–8; Jarrett, note 107 above, at [74] and [85]; Commissioner of Police v Ellis (CA(NSW), 2 July 1981, unreported) referred to in Downe v Sydney West Area Health Service (No 2) (2008) 71 NSWLR 633; 174 IR 385 at [303]– [319]; Australian National University v Burns, note 124 above, at 39–40 and Australian Film Commission v Mabey (1985) 59 ALR 25 at 30–1. 126. PS Act 1999 (Cth) s 29; PS Act 2009 (SA) s 54; PA Act 2004 (Vic) s 33. 127. Anderson v Director-General of Education [1978] 2 NSWLR 423 at 429 and E Campbell, note 114 above, at 4–5. 128. Edwards v The Commonwealth (1935) 54 CLR 313 at 321–2. 129. Hanson v Radcliffe Urban District Council [1922] 2 Ch 490 at 505–6 and 508. 130. Timbarra Protection Coalition Inc v Ross Mining NL (1999) 46 NSWLR 55; [1999] NSWCA 8 at [44] per Spigelman CJ. See Barratt v Howard, note 116 above, at [76] and [82]–[83]; O’Halloran v Wood [2004] FCA 544 at [24]–[25] (arguable that the employee’s dismissal as he was ‘excess to requirements’ under the PS Act 1999 (Cth) involved a jurisdictional fact) and Sutherland Shire Council v Finch (1969) 123 CLR 657 at 663 and 666. 131. Corporation of the City of Enfield v Development Assessment Commission (2000) 199 CLR 135; 169 ALR 400 at [28]–[38]. 132. Minister for Immigration and Ethnic Affairs v Teo (1995) 57 FCR 194 at 198; Timbarra Protection Coalition Inc v Ross Mining NL, note 130 above, at [44]; Australian Education Union v Lawler (2008) 169 FCR 327; 147 IR 140 at [210] and [211]; Uniting Church in Australia Property Trust (NSW) v Industrial Relations Commission of New South Wales (2004) 60 NSWLR 602; 139 IR 1 at [45]–[63] and Bigg v New South Wales Police Service (1998) 80 IR 434 at 457. 133. Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 611; 266 ALR 367 at [40]– [42] and [121]–[131] and Re Minister for Immigration and Multicultural Affairs; Ex Parte Applicant S20/2002 (2003) 198 ALR 59 at [37], [52] and [173]. 134. PS Regulations 1999 (Cth) reg 3.10; PSEM Act 2002 (NSW) s 49; PA Act 2004 (Vic) s 20(2)(g) and PS Act 2009 (SA) s 57 (suspension without pay only permitted when charged with a criminal offence or provided particulars of the charge). 135. PS Act 2009 (SA) s 55 (reprimand, transfer, suspension or demotion); cf PSEM Act 2002 (NSW) ss 44–46 and see also PA Act 2004 (Vic) s 22 (though the regulations necessary to make this scheme fully functional are yet to be promulgated). 136. PS Regulations 1999 (Cth) Pt 5-3; Government and Related Employees Appeal Tribunal Act 1980 (NSW); PS Act 2009 (SA) ss 59–63 and PA Regulations 2005 (Vic) regs 6–10.

137. PS Act 1999 (Cth) s 29 and PS Act 2009 (SA) s 58; cf in Victoria where an appeal lies to Public Sector Standards Commissioner under PA Act 2004 (Vic) Pt 4, Div 2, Subdiv 5A. 138. Annetts v McCann (1990) 170 CLR 596 at 598; 97 ALR 177 at 178 per Mason CJ, Deane and McHugh JJ; Jarrett, note 107 above, at [24]–[26], [51] and [138]; Hill v Green (1999) 48 NSWLR 161; (1999) 96 IR 371 at [2]–[4] and [142]–[143] and Barratt v Howard, note 116 above, at [49]; see also Dixon v Commonwealth of Australia (1981) 61 ALR 173 at 178–82 (procedural fairness before suspension). 139. Barratt v Howard, note 116 above, at [49]. 140. Paras v Public Service Body Head of the Department of Infrastructure (2006) 152 IR 75; [2006] FCA 622 at [25] (termination under the PA Act 2004 (Vic)) and Barratt v Howard, note 116 above, at [49]–[54] (termination under the PS Act 1999 (Cth)). 141. Foster v Secretary to the DEECD [2008] VSC 504 at [46]–[54] (demotion to menial position on the same pay gave rise to a right to procedural fairness); see also Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 578, 585 and 592; 106 ALR 11 at 19, 24 and 30. 142. Ridge v Baldwin, note 94 above, AC at 65–6; All ER at 71–2; Jarrett, note 107 above, at [7]–[9] and Malloch v Aberdeen Corporation, note 89 above, at 1295–6. As to ultra vires decisions to dismiss employees who hold their position at pleasure, see McVicar v Commissioner for Railways (NSW), note 112 above, at 530 and 537–8. 143. Jarrett, note 107 above, at [51]; Salemi v MacKellar (1977) 137 CLR 396 at 401 and 419; 14 ALR 1 at 4–5 and 19 and Barratt v Howard, note 116 above, at [48]. 144. Francis v Municipal Council of Kuala Lumpur [1962] 3 All ER 633. 145. Director-General of Education v Suttling, note 107 above, CLR at 440; ALR at 202 and Evans v Williams (1910) 11 CLR 550 at 565. 146. Jarrett, note 107 above, at [57]–[59]. 147. Termination, Change and Redundancy Case (1984) 8 IR 34 and the Termination, Change and Redundancy Case — Supplementary Decision (1984) 9 IR 115. 148. ILO Convention Concerning Termination of Employment at the Initiative of the Employer, 1982 Art 11 states: ‘A worker whose employment is to be terminated shall be entitled to a reasonable period of notice or compensation in lieu thereof, unless he is guilty of serious misconduct …’. 149. See Furey v Civil Service Association of WA (Inc) (1999) 91 FCR 407; 93 IR 349; [1999] FCA 1492 at [45] decided under the former Act. 150. As to the meaning of specified term and specified task contracts, see Andersen v Umbakumba Community Council (1994) 126 ALR 121; 56 IR 102; Drury v BHP Refractories Pty Ltd (1995) 62 IR 467; Cooper v Darwin Rugby League Inc (1994) 57 IR 238; Dadey v Edith Cowan University (1996) 70 IR 295; Qantas v Fetz (1998) 84 IR 52 and D’Ortenzio v Telstra (No 2) (1998) 82 IR 52. 151. The common law test of misconduct is applied in such circumstances: see 10.19. 152. Grout v Gunnedah Shire Council (No 2) (1995) 58 IR 67 at 80 (not affected by the appeal at (1995) 134 ALR 156; 62 IR 150); contrast with the former s 47(2) of the Industrial Relations Act 1979 (Tas) considered in Australian National Hotels Pty Ltd v Jager (2000) 9 Tas R 153 and Holt v Musketts Timber Sales Pty Ltd (1994) 54 IR 323. See 11.48–11.51 on the relationship between s 117 and the implied term concerning reasonable notice. 153. Grout v Gunnedah Shire Council (No 2), note 152 above, at 80 (not affected by appeal at (1995)

134 ALR 156; 62 IR 150); see also E Niven, ‘Industrial Awards and Common Law Recovery of Wages’ (1939) 13 ALJ 8. 154. See 11.67 and Jarrett, note 107 above. 155. Richardson v Koefod [1969] 3 All ER 1264. 156. The Statute of Labourers 25 Ed III Stat 1 was preceded by the Ordinance of Labourers of 1349 23 Ed III Stat 3. That Ordinance was made by the King in the absence of Parliament that was dispersed by the Black Plague. The Preamble to the Statute of Labourers makes it clear that the Ordinance was not being obeyed; see also N Cantor, In the Wake of the Plague: The Black Death and the World it Made, The Free Press, New York, 2001, Ch 4. 157. See S Churches, ‘The Presumption of a Yearly Term in a General Contract of Employment and the Plight of the Modern Manager, or the Black Death and the Malady Lingers On’ (1979) 10 UQLJ 195 at 198. Simpson notes that 47 Edw III M. f 27, pl 53 provides some authority for the proposition that a minimum of six months counted as a ‘usual term’: A Simpson, A History of the Common Law of Contract, Clarendon Press, Oxford, 1986, p 50. More generally on the operation of the statute and its role in the development of employment law, see Simpson, pp 47–52; S Jacoby, ‘The Duration of Indefinite Employment Contracts in the United States and England: An Historical Analysis’ (1982) Int J Comp LLIR 85 at 86–91 and J Browne, The Juridification of the Employment Relationship, Aldershot, Avebury, 1994, pp 19ff. 158. See 25 Ed III Stat 1, Caps II, V and VII and 34 Ed III Cap X reprinted in D Pickering (ed), Statutes at Large, Vol 2, Cambridge, 1762. 159. A Simpson, A History of the Common Law of Contract, note 157 above, p 49: these categories of worker are discussed in 1.27. 160. 5 Eliz c.4. 161. See 1.26–1.29. In 1862 the Queensland Supreme Court held that the Statute of Artificers 1562 applied in Australia: Walsh v Kent (1862) 1 QSCR 44. 162. See W Holdsworth, History of the English Law, 2nd ed, Sweet and Maxwell, London, 1937 Vol 6, pp 349–53 and Vol 10, pp 257ff; S Churches, note 158 above, pp 198–200 and S Jacoby, note 158 above, pp 90–9: see 1.29. 163. See Britain v Rossiter, note 65 above, at 124–5, an issue that also arose in Hanau v Ehrlich, note 65 above. 164. Trinity v St Peter’s in Dorchester (1763) 1 Black W 443; 96 ER 254 per Lord Mansfield; R v Inhabitants of Macclesfield, note 73 above; R v Inhabitants of Lyth (1793) 5 TR 327; 101 ER 183; Huttman v Boulnois (1827) 2 Car & P 510; 172 ER 231 at 232; Beetson v Collyer (1827) 4 Bing 309; 130 ER 786 and Fawcett v Cash (1834) 5 B & Ad 904; 110 ER 1026. 165. Wansworth Parish v Putney Parish (1739) 2 SCKB 329; 93 ER 221; R v Inhabitants of Atherton (1742) 2 Strange 1182; 93 ER 1114 (service terminable on a month’s notice); R v Inhabitants of Macclesfield, note 73 above (payments made to menial servant irregularly); R v Inhabitants of Hampreston (1793) 5 TR 205; 101 ER 116; R v Inhabitants of Lyth, note 164 above, ER at 184; R v Inhabitants of Worfield (1794) 5 TR 507; 101 ER 285; R v Inhabitants of Pendleton (1812) 15 East 449; 104 ER 913; Beetson v Collyer (1827) 2 Car & P 697; 172 ER 276 and (1827) 4 Bing 309; 130 ER 786; R v Inhabitants of Sandhurst (1827) 7 B & C 557; 108 ER 831 (wages calculated weekly and paid quarterly but presumption was not rebutted); R v St Andrew in Pershore, Worcestershire (1828) 8 B & C 679; 108 ER 1195; Turner v Robinson (1833) 5 B & Ad 789; 110 ER 982 (foreman); Fawcett v Cash, note 164 above (although payments were more regular to the servant, a warehouseman) and Lilley v Elwin (1848) 11 QB 742; 116 ER 652

(servant in husbandry). 166. Trinity v St Peter’s in Dorchester, note 164 above (pieceworker); R v Inhabitants of Elslack (1785) 4 Dougl 210; 99 ER 845 (menial servant paid by the week); Bayley v Rimmel (1836) 1 M & W 506; 150 ER 534 (assistant surgeon paid irregularly); Blackwell v Pennant (1852) 9 Hare 551 (servant paid weekly); R v The Churchwardens and Overseers of the Poor of Christ’s Parish in York (1824) 3 B and C 459; 107 ER 804 (a case which apparently concerned a 10-year-old pauper and his wife and child engaged for board and meat); R v Inhabitants of Great Bowden (1827) 7 B & C 249; 108 ER 716 (where master of the servant (an ostler) was able to terminate the contract at will); Baxter v Nurse (1844) 6 M & G 935; 134 ER 1171 (editor paid weekly wages); Parker v Ibbetson (1858) 4 CB (NS) 345; 140 ER 1118 (clerk’s engagement terminable on one month’s notice despite yearly salary); Fairman v Oakford (1860) 5 H & N 635; 157 ER 1334; 29 LJ Ex 459 (clerk’s engagement terminable on one month’s notice); Metzner v Bolton (1854) 9 Exch 518; 156 ER 222 (custom of three months’ notice was applied to modify an express parol term of yearly hiring); Fox v M’Mahon (1873) 4 AJR 86; Whim Well Copper Mines Ltd v Pratt (1910) 12 WALR 166 at 168 and Dearden v Tasmanian Timber Corporation (1907) 3 Tas LR 23. See also the cases discussed in the Appendix to Ch X of E Mitchell Innes, The Law of Master and Servant, Stevens and Sons, London, 1908. 167. Huttman v Boulnois, note 164 above, ER at 232 per Abbott CJ (‘the doctrine that a general hiring is a hiring by the year is not confined to servants in husbandry but extends also to domestic and other servants’); Beetson v Collyer (1827) 2 Car & P 697; 172 ER 276 and (1827) 4 Bing 309; 130 ER 786 (clerk); Turner v Robinson, note 165 above (foreman); Fawcett v Cash, note 164 above (warehouseman); Buckingham v Surrey & Hants Canal Company (1882) 46 LTR (NS) 885 (engineer) and Taylor v Garnett (1892) 8 TLR 647 (traveller); see also S Churches, note 158 above, pp 198–200. Superior servants are discussed in 1.28. 168. See George v Davies [1911] 2 KB 445; Moult v Halliday [1898] 1 QB 125 at 130; Fawcett v Cash, note 164 above (obiter); Beetson v Collyer, note 164 above (obiter); Metzner v Bolton, note 166 above (obiter); Parker v Ibbetson, note 166 above (obiter) and Nicoll v Graves (1864) 17 CB (NS) 26; 144 ER 11 (‘the law is now firmly established that the hiring for a year of a person in that class (referring to menial and domestic servants) is subject to the condition that either party may put an end to the relation at any time upon giving the other a month’s notice or a month’s wages’ per Erle CJ); A Diamond, The Law of Master and Servant, 2nd ed, Stevens & Sons, London, 1946, p 182 and the cases cited therein. 169. See S Jacoby, note 158 above, and the evidence before the Select Committee on Master and Servant, 1866, referred to in E Mitchell Innes, The Law of Master and Servant, note 166 above, p 136 and M Freedland, The Contract of Employment, Clarendon Press, Oxford, 1976, p 144. In Marshall v English Electric Co Ltd [1945] 1 All ER 653, Du Parcq LJ mentions that prior to 1939 the employee’s contract was terminable on one minute’s notice. 170. For example, the unfortunate servants in R v Bunn (1872) 12 Cox CC 316 who went on strike without giving the proper notice were sentenced to 12 months’ hard labour under the Master and Servant Acts; one of the reasons the union official escaped liability in Allen v Flood [1898] AC 1 was that the employees were engaged by the day; see also S and B Webb, Industrial Democracy, Longmans Green, London, 1920, pp 431–5. 171. Davis v Marshall (1861) 4 LT 216 at 217 per Pollock CB (‘the general rule is that notice need not be more extensive than the period of payment’) and Marshall v English Electric Co Ltd, note 169 above, at 655. In Australia Napier CJ in dicta opined that the presumption of yearly hiring had been replaced by a presumption of weekly hiring for employees whose employment was governed by awards: Arlesheim Ltd v Werner [1958] SASR 136 at 140.

Jackson v Hayes Candy and Co Ltd [1938] 4 All ER 587 at 589; E Mitchell Innes, The Law of 172. Master and Servant, note 166 above, p 136; by 1946 Diamond stated that the presumption of yearly hiring has ‘become an anachronism, a presumption rarely applicable and easily rebutted’: A Diamond, The Law of Master and Servant, note 168 above, p 175. 173. The dicta of Bayley J in Winstone v Linn (1823) 1 B & C 460; 107 ER 171 at 174 was perhaps the first example (indenture of apprentice on a covenant, as opposed to a term implied in law). At the appellate level see Re African Association Limited & Allen [1910] 1 KB 396; Payzu Ltd v Hannaford [1918] 2 KB 348; De Stempel v Dunkels [1938] 1 All ER 238 and Adams v Union Cinemas Ltd [1939] 3 All ER 136 and the dicta of the House of Lords in McClelland v Northern Ireland General Health Services Board, note 12 above, at 132, 135–6 and 140. 174. The origins of the employment at will rule are traced in S Jacoby, note 158 above, pp 102ff; J Feinmann, ‘The Development of the Employment at Will Rule’ (1976) 20 Am J Legal Hist 118; Anderson v Douglas & Lomason Company 540 NW 2d 277 at 281–3 (1995) and Toussant v Blue Cross & Blue Shield (1980) 408 Mich 579 at 601–3. 175. The American rule is a presumption and can be rebutted. The principal means by which the presumption is rebutted and other mechanisms by which employees gain a greater degree of job security in the United States is discussed in M Rothstein and L Liebman, Employment Law, note 82 above, pp 523–55. 176. Richardson v Koefod, note 155 above, at 1266 per Denning MR, at 1267 per Fenton Atkinson LJ. Edmund Davies LJ noted at 1267 that he did not have to decide the point in the light of the concession by counsel. 177. Manners v Denny Bros (1911) 14 WALR 91 at 93, 95–6 and 98; Wild v Great Matrix Ruby Mining Company Limited (1890) 24 SALR 48 at 49–50 and Railway Commissioners for New South Wales v Hunt [1930] AR (NSW) 534 at 539–54. 178. Fox v M’Mahon, note 166 above; Dearden v Tasmanian Timber Corporation, note 166 above; Whim Well Copper Mines Ltd v Pratt, note 166 above, at 168; Mirror Newspaper Co v Crozier (1911) 13 WALR 70 at 71–72; Hile v Corecki Municipal Council (1915) 3 LGR 51; Bunning Brothers v Power (1917) 19 WALR 127 and Arlesheim Ltd v Werner, note 171 above, at 140. As late as 1942 members of the High Court were prepared, at least in dicta, to consider that the presumption may still form the prima facie position in Australia: Healy v The Law Book Company of Australasia Pty Limited, note 73 above, at 255 and 258. A more thorough review of the presumption in Australia is undertaken in S Churches, note 158 above, pp 201–6. 179. Dalgety v Husband (1878) 4 VLR 432; McCarthy v Windeyer (1925) 26 SR (NSW) 29 at 35; Dearden v Tasmanian Timber Corporation, note 166 above; Whim Well Copper Mines Ltd v Pratt, note 166 above, at 168; Mirror Newspaper Co v Crozier, note 178 above; Bunning Brothers v Power, note 178 above and Arlesheim Ltd v Werner, note 171 above. 180. Thorpe v South Australian National Football League (1974) 10 SASR 17 at 29. In Cohen v Nichevic [1976] WAR 183 at 184 and 187, the Western Australian Supreme Court held that the decisions of that court in Mirror Newspaper Co v Crozier, note 178 above and Bunning Brothers v Power, note 178 above (which applied a presumption of weekly hiring for certain classes of employees) should no longer be regarded as correct; see also Irons v Merchant Capital Ltd (1994) 116 FLR 204 at 208. 181. Byrne v Australian Airlines Limited, note 89 above, CLR at 423, 429 and 446; ALR at 428, 433 and 447. 182. A Diamond, The Law of Master and Servant, note 168 above, p 173.

Beetson v Collyer, note 164 above, ER at 787; Bullock v The Wimmera Fellmongery and 183. Woolscouring Company Ltd, note 73 above, at 365 per Stawell CJ and 365 per Barry J; Broadhurst and Company Limited v Robinson, note 73 above, at 450 and McClelland v Northern Ireland General Health Services Board, note 12 above, at 137. 184. Roberts v Parker (1884) 18 SALR 29 at 31; Bunning Brothers v Power, note 178 above and the cases referred to in C Knowles, Smith’s Law of Master and Servant, 8th ed, Sweet & Maxwell, London, 1931, p 38. Where the employment was terminated prior to the expiration of the week, month or year, then the employee was prima facie entitled to damages equal to the remuneration the employee would have received during the remainder of the week, month or year: Down v Pinto, note 12 above. 185. E Mitchell Innes, The Law of Master and Servant, note 166 above, pp 134ff and the cases discussed in Appendix 1 of that text; C Knowles, Smith’s Law of Master and Servant, note 184 above, p 38, and S Jacoby, note 158 above. 186. Buckingham v Surrey & Hants Canal Company, note 167 above and Beetson v Collyer, note 164 above, ER at 787 per Best CJ; see also M R Freedland, The Contract of Employment, note 169 above, pp 144–7. 187. Williams v Byrne (1837) 7 Ad & E 177; 112 ER 438 at 440 per Littledale J and at 440 per Williams J; Crew v Municipality of Prospect (1890) 6 WN 168 at 169; Healy v The Law Book Company of Australasia Pty Limited, note 73 above, at 255 and McClelland v Northern Ireland General Health Services Board, note 12 above, at 137. Although the cases do not articulate the foundation for such an approach, it may have been derived from a section of the Statute of Artificers 1562 that provided that servants who were engaged yearly were entitled to ‘one quarter’s warning given before the end of his said term’: 5 Eliz Cap IV s VI. 188. See, for example, Marshall v Harland and Wolff Limited [1972] 2 All ER 715. 189. See Australian Bank Employees Union v Australia and New Zealand Banking Group Limited (1990) 94 ALR 667; (1990) 34 IR 1 at 10 and C Mills, Industrial Laws: New South Wales, 3rd ed, Butterworths, Sydney, 1969, p 238. Modern awards provide for full-time, part-time or casual employees and no longer refer to weekly employment, an approach adopted in the Award Simplification Decision (1997) 75 IR 272 at 283 and Re Metal Industries Award (2000) 110 IR 247 at 268–9. 190. Davis v Marshall, note 171 above, at 217 and Marshall v English Electric Co Ltd, note 169 above, at 655. By 1946 commentators were referring to this approach as ‘a misconception’: A Diamond, The Law of Master and Servant, note 168 above, p 180 and Cohen v Nichevic, note 180 above; see further at 11.60. 191. Richardson v Koefod, note 155 above, at 1266 per Denning MR and Byrne v Australian Airlines Limited, note 89 above, CLR at 423, 429 and 446; ALR at 428, 433 and 447. 192. Byrne v Australian Airlines Limited, note 89 above, CLR at 423 and 446; ALR at 428 and 447 and Rankin v Marine Power International Pty Ltd (2001) 107 IR 117; [2001] VSC 150 at [206]. 193. See 5.48 and 5.53. 194. Quinn v Jack Chia (Australia) Ltd, note 63 above, VR at 579; Payzu Ltd v Hannaford, note 173 above; Creen v Wright (1876) 1 CPD 591 and A Carnegie, ‘Terminability of Contracts of Unspecified Duration’, note 79 above. The position in the United States is discussed in 11.44. 195. Healy v The Law Book Company of Australasia Pty Limited, note 73 above; Keays v J P Morgan Administrative Services Australia Limited [2011] FCA 358 at [57]; Quinn v Jack Chia (Australia) Ltd, note 63 above, VR at 574 and Ikin v Danish Club, note 62 above, at [17] in

which the Court of Appeal refused to imply the term in a fixed term contract. In Canada the approach is that there is an implied term in every contract of employment that an employer will provide reasonable notice of termination. The implied term can be negatived by a specific agreement, but clear and express language must be used by the parties: Long v Delta Catalytic Industrial Services Inc (1998) 35 CCEL (2d) 70 at [12]; Chadburn v Sinclair Canada Oil Co (1966) 57 WWR 477 at 483; Bagby v Gustavson International Drilling Co (1980) 24 AR 181 at 191. Courts will enforce an express term which defines the length of notice, provided it is expressed in clear and unambiguous language: Jobber v Addressograph Multigraph of Canada Ltd (1980) 1 CCEL 87 at 91; Toronto-Dominion Bank v Wallace (1983) 41 OR (2d) 161 at 181. 196. A Carnegie, ‘Terminability of Contracts of Unspecified Duration’, note 79 above; see Re African Association Limited & Allen, note 173 above and Cromer v Harry Rickards’ Tivoli Theatres Ltd [1921] SASR 325 at 333. 197. New South Wales Cancer Council v Sarfaty, note 12 above, at 74 per Gleeson CJ and Handley JA; see also Grehan v The North Eastern Health Board, note 85 above and McClelland v Northern Ireland General Health Services Board, note 12 above, at 132 and 142. 198. Macauslane v Fisher and Paykel Finance Pty Ltd, note 13 above, at [18]–[21] and Edward Keller (Australia) Pty Ltd v Hennelly, note 13 above. 199. Re African Association Limited & Allen, note 173 above and Lloyd v RJ Gilbertson (Qld) Pty Ltd (1996) 68 IR 277 at 280. 200. McCarthy v Windeyer, note 179 above, at 35. 201. Australian National Hotels Pty Ltd v Jager (2000) 9 TasR 153 at [26]–[32]; Holt v Musketts Timber Sales Pty Ltd, note 152 above; Ansett Transport Industries (Operations) Pty Ltd v Wardley (1980) 142 CLR 237 at 254–5; 28 ALR 449 at 459–60 and Hastings v JH Corporate Security Services Pty Ltd [2000] SASC 216 (a positive right granted by the AWA to an employer to terminate on the provision of specified notice). 202. Machtinger v HOJ Industries Ltd, note 11 above. 203. Grout v Gunnedah Shire Council (No 2), note 152 above, at 80; Morris v Warman International Ltd (1996) 70 IR 329 and Logan v Otis Elevator Co Pty Ltd (1999) 94 IR 218; see also Guthrie v News Ltd, note 70 above, at [197]; Vermeesch v Harvey World Travel Franchises Pty Ltd (1997) 74 IR 364 at 365; Westen v Union des Assurances de Paris (1996) 88 IR 259 at 263 and Reilly v State of Victoria (1991) 5 VIR 1 at 10. 204. Kilminster v Sun Newspapers Ltd (1931) 46 CLR 285 at 289. 205. Brackenridge v Toyota Motor Corporation Australia Ltd (1996) 67 IR 162; on appeal from her Honour’s judgment the court did not need to decide this point: (1996) 142 ALR 99 at 105–7. In Brackenridge the employee had committed an act of misconduct so it was not necessary to decide if the employee was entitled to reasonable notice absent such misconduct. Further, the award clause appeared to grant a right to the employer to terminate on one week’s notice. The second decision was Elliott v Kodak Australasia Pty Ltd (2001) 108 IR 23; [2001] FCA 807; on appeal from his Honour’s judgment the court did not need to decide this point: (2001) 129 IR 251; [2001] FCA 1804. In Elliott the court held that even if the employee was entitled to reasonable notice then he had been provided with an amount in excess of reasonable notice. The attention of the courts in Brackenridge and Elliott was not drawn to the High Court decision in Kilminster v Sun Newspapers Ltd, note 204 above or the earlier decision in Grout v Gunnedah Shire Council (No 2), note 152 above. 206. Birrell v Australian National Airlines Commission, note 3 above, at 458; Frederick v State of

South Australia, note 7 above, at [54]; Grout v Gunnedah Shire Council (1994) 57 IR 243 at 250; Logan v Otis Elevator Co Pty Ltd, note 203 above; Guthrie v News Ltd, note 70 above, at [196]; Rankin v Marine Power International Pty Ltd, note 192 above, at [220]; Matthews v Coles Myer Limited (1993) 47 IR 229; Harding v Harding (1928) 29 SR (NSW) 96 at 103; Adams v Union Cinemas Ltd, note 173 above; SW Strange Ltd v Mann [1965] 1 All ER 1069 and Morrison v Abernathy School Board (1876) 3 SC 945 at 950. See also Bond v Cav Ltd [1983] IRLR 360 which deals with reasonable notice to terminate a collective agreement that was incorporated into a contract of employment. 207. McCarthy v Windeyer, note 179 above, at 35 and Tomkins v Martin (1886) 3 TLR 163; Levy v Electrical Wonder Company (1893) 9 TLR 495. 208. Logan v Otis Elevator Co Pty Ltd, note 203 above, at 229; Guthrie v News Ltd, note 70 above, at [196]; Martin Baker Aircraft Co Limited v Canadian Flight Equipment Limited [1955] 2 All ER 722; [1955] 2 QB 556 at 581 and Rankin v Marine Power International Pty Ltd, note 192 above, at [219] and [225]; on the role of length of service in determining reasonable notice, see 11.58. 209. See the cases referred to at note 198. 210. Brookton Holdings Pty Ltd v Kara Kar Holdings Pty Ltd (1994) 57 IR 288 at 290–1 and Gane v Total Freight Agency Pty Ltd (1996) 68 IR 204. This is also the approach adopted in Canada: Moore v Zurich Insurance Co (1984) 4 CCEL 188. 211. See the cases referred to at notes 228 and 229. 212. Rankin v Marine Power International Pty Ltd, note 192 above, at [219] per Gillard J. 213. See the text accompanying notes 238 and 239. 214. See 11.46. 215. Australian Bureau of Statistics, Job Search Experience of Unemployed Persons, catalogue number 6222.0, July 2010; see also HREOC, Age Matters: A Report on Age Discrimination, May 2000, pp 19–28 and Ch 3 concerning discrimination against young people at work. 216. See B Etherington, ‘Supreme Court of Canada Decisions and the Common Law of Employment in the 1990’s: Shifting the Balance Between Rights and Efficiency Concerns?’ [1999] Can Bar Rev 200. Between 1975–2000 there were over 120 reported Canadian decisions awarding 12 months’ notice or more: see H Levitt, The Law of Dismissal in Canada, Canada Law Book Inc, Ontario, 1985, pp 171ff; J Sproat, Wrongful Dismissal Handbook, 2nd ed, Carswell, Toronto, 2002, pp 6–35. The significant difference between Australian and Canadian cases is the factor discussed in 11.62 which is present in about 10% of reported Canadian cases. 217. Brookton Holdings Pty Ltd v Kara Kar Holdings Pty Ltd, note 210 above; Dyer v Peverill (1979) 2 NTR 1; Grout v Gunnedah Shire Council (No 2), note 152 above; Haley v Public Transport Corporation, note 80 above; Irons v Merchant Capital Ltd, note 180 above; Jager v Australian National Hotels Pty Ltd [1998] Tas SC 54, overturned on other grounds at (2000) 9 TasR 153; Lloyd v RJ Gilbertson (Qld) Pty Ltd, note 199 above; McCasker v Darling Downs Co-operative Bacon Association Ltd, note 81 above; Quinn v Jack Chia (Australia) Ltd, note 63 above; Rankin v Marine Power International Pty Ltd, note 192 above; Rigby v Technisearch Ltd (1996) 67 IR 68; Russell v Trustees of the Roman Catholic Church, Archdiocese of Sydney (2008) 72 NSWLR 559; 176 IR 82; [2008] NSWCA 217; Taske v Occupational and Medical Innovations Ltd (2007) 167 IR 298; [2007] QSC 118; Vermeesch v Harvey World Travel Franchises Pty Ltd, note 203 above and Walton v Wollondilly Abattoirs Co-op Limited, note 24 above. 218. See 11.52. 219. Thorpe v South Australian National Football League, note 180 above, at 36–7; Quinn v Jack

Chia (Australia) Ltd, note 63 above, VR at 580–1; Dyer v Peverill, note 217 above, at 5–6; Irons v Merchant Capital Ltd, note 180 above, at 208–9; Hill v C A Parsons & Co Ltd [1972] Ch 305 at 313–4 and 316–7; [1971] 3 All ER 1345 at 1349 and 1352; Dunstan v National Mutual Life Association of Australasia Ltd (1992) 5 VIR 72 at 84; SW Strange Ltd v Mann, note 206 above; Cray v Tynan Motors Pty Limited (1992) 41 IR 173; Haley v Public Transport Corporation, note 80 above, at [19]–[23]; Rankin v Marine Power International Pty Ltd, note 192 above, at [232] and Guthrie v News Ltd, note 70 above, at [198]. 220. Thorpe v South Australian National Football League, note 180 above, at 36–7; Brookton Holdings Pty Ltd v Kara Kar Holdings Pty Ltd, note 210 above, at 290–1 and Irons v Merchant Capital Ltd, note 180 above, at 208–9. 221. Dyer v Peverill, note 217 above and Matthews v Coles Myer Limited, note 206 above. 222. C Sappideen et al, The Law of Employment, 7th ed, Law Book Company, Sydney, 2011, p 173; Rankin v Marine Power International Pty Ltd, note 192 above, at [220] and Macauslane v Fisher and Paykel Finance Pty Ltd, note 13 above, at [28] per Holmes J (‘The authorities referred to by the respondent seem to support a range for reasonable notice, in the case of a senior executive with a large corporation in anticipated long term employment, of between six and 12 months’). Possible reasons for the link between the status of an employee and the length of reasonable notice are discussed in S Jacoby, note 158 above, p 101. 223. Rankin v Marine Power International Pty Ltd, note 192 above, at [232]; Grout v Gunnedah Shire Council (No 2), note 152 above, at 79; Matthews v Coles Myer Limited, note 206 above; Logan v Otis Elevator Co Pty Ltd, note 203 above; Hill v C A Parsons & Co Ltd, note 219 above, Ch at 313–14 and 316–17; All ER at 1349 and 1352; Dunstan v National Mutual Life Association of Australasia Ltd, note 219 above, at 84; Cray v Tynan Motors Pty Limited, note 219 above; Guthrie v News Ltd, note 70 above, at [198] and Cronk v Canadian General Insurance Co (1995) 14 CCEL (2d) 1 at 28. 224. Logan v Otis Elevator Co Pty Ltd, note 203 above, at 229. 225. Adams v Union Cinemas Ltd, note 63 above (aff’d [1939] 3 All ER 136) concerned service with related entities. 226. Thorpe v South Australian National Football League, note 180 above, at 36–7; Quinn v Jack Chia (Australia) Ltd, note 63 above; Hill v C A Parsons & Co Ltd, note 219 above, Ch at 316–7; All ER at 1352; Dunstan v National Mutual Life Association of Australasia Ltd, note 219 above, at 84 and Grout v Gunnedah Shire Council (No 2), note 152 above, at 78; see note 216. 227. Dyer v Peverill, note 217 above, at 5–6; Walton v Wollondilly Abattoirs Co-op Limited, note 24 above, at 84; Lloyd v RJ Gilbertson (Qld) Pty Ltd, note 199 above, at 280; Vermeesch v Harvey World Travel Franchises Pty Ltd, note 203 above, at 365–6; Hill v C A Parsons & Co Ltd, note 219 above, Ch at 316–17; All ER at 1352; Rankin v Marine Power International Pty Ltd, note 192 above, at [232]. 228. Dyer v Peverill, note 217 above, at 5–6; Walton v Wollondilly Abattoirs Co-op Limited, note 24 above, at 84 and Logan v Otis Elevator Co Pty Ltd, note 203 above; on ill health see Lloyd v RJ Gilbertson (Qld) Pty Ltd, note 199 above, at 280 and compare with Grout v Gunnedah Shire Council, note 206 above, at 250–1. 229. Vermeesch v Harvey World Travel Franchises Pty Ltd, note 203 above, at 365–6; Rankin v Marine Power International Pty Ltd, note 192 above, at [22]. 230. Creen v Wright (1876) 1 CPD 591; [1874–80] All ER Rep 747; (1876) 35 LT 339 (captain of a ship could not give no notice due to the invidious position it would have left his employer mid-

voyage); Adams v Union Cinemas Ltd, note 63 above (aff’d [1939] 3 All ER 136). 231. Thorpe v South Australian National Football League, note 180 above, at 36–7; Quinn v Jack Chia (Australia) Ltd, note 63 above, VR at 580–1 and Matthews v Coles Myer Limited, note 206 above. 232. Quinn v Jack Chia (Australia) Ltd, note 63 above, VR at 580–1; Grout v Gunnedah Shire Council (No 2), note 152 above, at 79; Haley v Public Transport Corporation, note 80 above, at 245–6; Rankin v Marine Power International Pty Ltd, note 192 above, at [232]; Irons v Merchant Capital Ltd, note 180 above, at 208 and Guthrie v News Ltd, note 70 above, at [199]. 233. Dowling v Halifax (City) [1998] 1 SCR 22 and B Etherington, ‘Supreme Court of Canada Decisions and the Common Law of Employment in the 1990’s: Shifting the balance between rights and efficiency concerns?’ [1999] Can Bar Rev 200 at 216–17. Justification of a dismissal provides a complete defence and cannot be used to reduce damages: Speck v Phillips (1839) 5 M & W 279; 151 ER 119. 234. Cray v Tynan Motors Pty Limited, note 219 above, at 175. 235. See 11.47. 236. Logan v Otis Elevator Co Pty Ltd, note 203 above (employee entitled to one week’s notice under the award was entitled to three months’ reasonable notice); Byrne v Australian Airlines Limited, note 89 above, CLR at 429; ALR at 433. See also Guthrie v News Ltd, note 70 above, at [197] where the notice provision set out in s 117 of the Fair Work Act was for five weeks and the court considered 12 months to be reasonable notice. 237. Thorpe v South Australian National Football League, note 180 above, at 36–7; Dyer v Peverill, note 217 above, at 5–6 and Quinn v Jack Chia (Australia) Ltd, note 63 above, VR at 580–1. 238. For example, it was recognised as a custom that the employment of domestic servants was able to be terminated at any time by one month’s notice or payment in lieu, except in the first month when it is terminable by at least a fortnight’s notice to terminate at the conclusion of the first month of employment: see Fawcett v Cash, note 164 above; Beetson v Collyer, note 164 above; Moult v Halliday, note 168 above, at 130; the custom became so well known that judges took eventually judicial notice of it and did not require that it be proved in each case: George v Davies, note 168 above; A Diamond, The Law of Master and Servant, note 168 above, p 182; M R Freedland, The Contract of Employment, note 169 above, pp 149–50 and C Knowles, Smith’s Law of Master and Servant, note 184 above, pp 41–3 refer to series of customs. For theatrical workers the custom was that the employees were engaged for the season of the performance piece: see Clayton-Greene v de Courville (1920) 36 TLR 790 and George Edwardes (Daly’s Theatre) Limited v Comber (1926) 42 TLR 247; for clerks in London the custom was one month’s notice: Fairman v Oakford, note 166 above and Foxall v International Land Credit Company (1867) 16 LT 637. 239. See 5.74. 240. Logan v Otis Elevator Co Pty Ltd, note 203 above, at 229 per Wilcox CJ, Marshall and Madgwick JJ; cf Edward Keller (Australia) Pty Ltd v Hennelly, note 13 above. 241. Grout v Gunnedah Shire Council, note 206 above, at 251. 242. McKay v Abbey Vale Estate Pty Ltd [2003] WASC 2 at [33] is an example and Macauslane v Fisher and Paykel Finance Pty Ltd, note 13 above, at [27]. 243. Cray v Tynan Motors Pty Limited, note 219 above. 244. Macauslane v Fisher and Paykel Finance Pty Ltd, note 13 above, at [22]–[25] and Brookton

Holdings Pty Ltd v Kara Kar Holdings Pty Ltd, note 210 above, at 290–1. 245. See 14.86. 246. Wallace v United Grain Growers Ltd [1997] 152 DLR (4th) 1 at 33–8 and 40–44; see J Sproat, Wrongful Dismissal Handbook, 2nd ed, Carswell, Toronto, 2002 at 6-4.6–6-4.43. 247. Rankin v Marine Power International Pty Ltd, note 192 above, at [232]–[233] and Ikin v Danish Club, note 62 above, at [26]; cf Dyer v Peverill, note 217 above, at 6–7. 248. Birrell v Australian National Airlines Commission, note 3 above, at 457; APESMA v Skilled Engineering Pty Ltd (1994) 122 ALR 471 at 484; (1994) 54 IR 236 at 246; Grout v Gunnedah Shire Council (1994) 125 ALR 355 at 363–5; Riordan v The War Office, note 3 above (aff’d [1961] 3 All ER 774; 1 WLR 210). The giving of notice by an employee does not terminate the employment immediately: Oxman v Dustbane Enterprises Ltd (1988) 23 CCEl 157 (employee resigned giving six months’ notice and the employer responded by immediately terminating the employment: the Ontario Court of Appeal held the short notice by the employer was a wrongful dismissal). 249. See 11.4. 250. Oliver v Cox Couriers Pty Ltd (1996) 64 IR 468. 251. Bell v Gillen Motors Pty Ltd (1989) 24 FCR 77 at 87–8; 27 IR 324 at 333–4. 252. Automatic Fire Sprinklers v Watson, note 48 above, at 467; Hill v C A Parsons & Co Ltd, note 219 above, Ch at 313–4; All ER at 1349 and Gunton v Richmond-upon-Thames London Borough Council, note 50 above, Ch at 469–70 and 473–4; All ER at 590 and 593; see also Gillies v Downer EDI Ltd, note 21 above, at [151]–[153]. 253. Automatic Fire Sprinklers v Watson, note 48 above, at 467 and 469 where Dixon J described notice short by one day as ‘abortive’ and considered that the remedy of Mr Watson was for unliquidated damages commencing on the date of the wrongful dismissal; to a similar effect see Gunton v Richmond-upon-Thames London Borough Council, note 50 above, Ch at 469–70; All ER at 590 and Price v Rhondda Urban District Council [1923] 2 Ch 372 at 392. 254. Siagian v Sanel Pty Ltd (1994) 122 ALR 333 at 348–53; (1994) 54 IR 185 at 197–203 and Hill v C A Parsons & Co Ltd, note 219 above, Ch at 313–4; All ER at 1349. 255. Vine v National Dock Labour Board [1957] AC 488 at 503; [1956] 3 All ER 939 at 948 and Howes v Gosford Shire Council [1962] NSWR 58 at 63. 256. See 10.62 and 14.39. 257. See 11.75. 258. Gunnedah Shire Council v Grout, note 37 above, ALR at 166; IR at 159–60; Hill v C A Parsons & Co Ltd, note 219 above, Ch at 313–4; All ER at 1349 and Gunton v Richmond-upon-Thames London Borough Council, note 50 above, Ch at 468; All ER at 588–9. 259. Tucker v Pipeline Authority, note 50 above, at 125 and Barber v Manchester Regional Hospital Board [1958] 1 All ER 322 at 330–1. 260. See 14.38. 261. See 15.23 and 15.24. 262. Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; 153 ALR 490 at [91]–[94]; see further at 4.28. 263. United Firefighters Union of Australia v Country Fire Authority (2007) 164 IR 169; [2007] FCA

853 at [32] (aff’d [2007] FCAFC 169); cf the statute which rendered the notice invalid in Automatic Fire Sprinklers v Watson, note 48 above, at 459–60, 469–72 and 477–9. 264. Birrell v Australian National Airlines Commission, note 3 above, at 457; New South Wales v Paige, note 3 above, at [277]; Riordan v The War Office, note 3 above, at 557–8 per Diplock J (aff’d [1961] 3 All ER 774; 1 WLR 210); Frederick v State of South Australia, note 7 above, at [74]–[76]; Harris and Russell Ltd v Slingsby [1973] ICR 454, 455–6 and Decro-Wall International SA v Practitioners in Marketing Ltd, note 31 above, WLR at 369–70 and 382; All ER at 223 and 235. See also the dicta of Chitty J in Re Oriental Bank Corporation (MacDowall’s case), note 3 above, at 370–1. Notice is akin to an election to terminate the contract which, once made, cannot be withdrawn without the consent of the other party, even where there has been no reliance on the election or detriment arising from the withdrawal of the election: see Sargent v ASL Developments Ltd (1974) 131 CLR 634 at 647; 4 ALR 257 at 267 per Stephen J (‘Estoppel depends upon what a party causes his adversary to do. Waiver by election depends upon what the party himself intends to do, and has done’). 265. Notice is usually not operative until it is received by the recipient: see 11.6. 266. See 11.4. 267. Rai v Somerfield Stores Ltd, note 27 above, at [30]–[31]; Sealey v Avon Aluminium Co Ltd, note 27 above, at [23] and Fardell v Coates Hire Operations Ltd, note 20 above, at [94]. 268. Martin v Stout [1925] AC 359 at 364; Ogle v Comboyuro Investments Pty Ltd (1976) 136 CLR 444 at 451; 9 ALR 309 at 313; Decro-Wall International SA v Practitioners in Marketing Ltd, note 31 above; J McMullen, ‘A Synthesis of the Mode of Termination of Contracts of Employment’ (1982) 41 CLJ 110 at 123–4; Cranston v Canadian Broadcasting Corporation, note 28 above (employee offered to resign, and then his agent withdrew the offer before it was accepted) and New South Wales v Paige, note 3 above, at [354]. 269. Norwest Holst Group Administration Ltd v Harrison [1985] ICR 668 at 678; Automatic Fire Sprinklers Pty Ltd v Watson, note 48 above, at 465–6; Turner v Australasian Coal and Shale Employee’s Federation (1984) 6 FCR 177 at 192; 55 ALR 635 at 648 and Hill v CA Parsons & Co Ltd, note 219 above, Ch at 313–4; All ER at 1349; see 10.66 on the retraction of repudiations. 270. For example, see R v Mayor and Town Council of Wigan (1885) 14 QBD 908 at 910. 271. Automatic Fire Sprinklers v Watson, note 48 above, at 465–6; see also Emery v Commonwealth of Australia [1963] VR 586 at 592; Birrell v Australian National Airlines Commission, note 3 above, at 457; Fryar v Systems Services Pty Ltd (1995) 130 ALR 168 at 186–7; 60 IR 68 at 88 and The Australian Wool Selling Brokers Employers’ Federation v The Federated Storemen and Packers Union of Australia (1976) 176 CAR 884 at 885. 272. Re Oriental Bank Corp (McDowall’s case), note 3 above, at 369; Agricultural & Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570; 251 ALR 322 at [90] and C Bevan, ‘Waiver of Contractual Rights: A Non Sequitur’ (2009) 83 ALJ 817. 273. Re Oriental Bank Corp (McDowall’s case), note 3 above, at 368 and Reid v Explosives Co Ltd [1886–90] All ER Rep 712; (1887) 19 QBD 264: see 13.20. 274. Delaney v Staples [1992] 1 AC 687 at 692–3; 1 All ER 944 at 947–8; [1992] ICR 483 at 488–9 and Sanders v Snell (1998) 196 CLR 329; 157 ALR 491 at [19]. The discussion set out below focuses upon a payment in lieu of notice by an employer. Where such a payment is made by an employee a range of other issues may arise: see M Freedland, The Contract of Employment, note 169 above, p 185. 275. William Hill Organisation Ltd v Tucker [1999] ICR 291; AMP Services Ltd v Manning [2006]

FCA 256 at [43]–[44] and M Schindler, ‘Garden Leave Pruned’ (1998) 142 SJ 736. On the right to be provided with work see 8.37–8.47. 276. Delaney v Staples, note 274 above, AC at 692; All ER at 947; ICR at 488; similarly, an employee who is told that the employer will terminate the contract at some specified or unspecified time in the future will continue to earn wages until the termination: Scott v Commonwealth of Australia (1982) 41 ALR 498 at 505. 277. Siagian v Sanel Pty Ltd, note 254 above, ALR at 353; IR at 203 and Mason Gray Strange NSW v Eisdell (SC(NSW) Powell J, 22 February 1989, unreported); see also Construction, Forestry, Mining & Energy Union v Newcastle Wallsend Coal Co Ltd (1998) 88 IR 202 at 207–15. 278. Provident Financial Group v Hayward [1989] 3 All ER 298 at 302–5; [1989] ICR 160 at 165–9. 279. Delaney v Staples, note 274 above, AC at 692–3; All ER at 947–8; ICR at 488–9; Abrahams v Performing Right Society Ltd [1995] ICR 1028 at 1038–41; Rex Stewart Jeffries Parker Ginsburg Ltd v Parker [1988] IRLR 483 at 485 and Reilly v Praxa Ltd [2004] ACTSC 41 at [32]. 280. Cerberus Software Ltd v Rowley [2001] ICR 376 at 382 and 389–90: see further at 14.66. 281. Gothard v Mirror Group Newspapers Ltd [1988] ICR 729 at 734. 282. Siagian v Sanel Pty Ltd, note 254 above, ALR at 353; IR at 203; Delaney v Staples, note 274 above, AC at 692–3; All ER at 947–8; ICR at 488–9; Dixon v Stenor Ltd [1973] ICR 157 at 158 and Re Braszell (1984) 26 AILR 222. 283. Delaney v Staples, note 274 above, AC at 692–3; All ER at 947–8; ICR at 488–9; Bagnall v National Tobacco Corporation of Australia Ltd (1934) 34 SR (NSW) 421 at 425; Sanders v Snell, note 274 above, at [19]; Lucy v The Commonwealth, note 107 above, at 239 at 250 and 255; Collier v Sunday Referee Publishing Company Limited [1940] 2 KB 647 at 652; 4 All ER 234 at 237; Gothard v Mirror Group Newspapers Ltd, note 281 above, at 733; Leech v Preston Borough Council [1985] ICR 192 at 196; Martin v Tasmania Development and Resources, note 55 above, at [54] (aff’d on different grounds in (2000) 97 IR 66; [2000] FCA 414). See also EMI Electronics Group Ltd v Coldicott [1999] STC 803; Re VIP Insurances Ltd [1978] 2 NSWLR 297 at 298–9 and R Dineley, ‘Pay in Lieu of Notice — A Trap for the Unwary’ (1999) 143 SJ 900. 284. Siagian v Sanel Pty Ltd, note 254 above, ALR at 353; IR at 203; Harris/D-E Pty Ltd v McClellands Coffee and Tea Pty Ltd [1999] NSWSC 128 at [88] and Leech v Preston Borough Council, note 283 above, at 196–7. 285. Siagian v Sanel Pty Ltd, note 254 above, ALR at 353; IR at 203. 286. See, for example, the cases discussed by M Freedland, The Contract of Employment, note 169 above, pp 181–2 and, in Australia, the custom referred to by Heydon J in Fitzpatrick v Schweppes Ltd [1913] AR 11 at 13. 287. Sanders v Snell, note 274 above, at [19]; Martin v Tasmania Development and Resources, note 55 above, at [54] (aff’d on different grounds in (2000) 97 IR 66; [2000] FCA 414); White v Riley [1921] 1 Ch 1 at 6; M Freedland, The Contract of Employment, note 169 above, pp 181ff and G McCarry, ‘Termination of Employment, Payment in Lieu of Notice, Garden Leave and the Right to Work’ (1999) 12 AJLL 56. 288. See Emmens v Elderton (1853) IV HLC 624; 10 ER 606 and 14.36. 289. Sanders v Snell, note 274 above, at [16]–[19]; Delaney v Staples, note 274 above, AC at 692–3; All ER at 948; ICR at 489; Martin v Tasmania Development and Resources, note 55 above, at [54] (aff’d on other grounds (2000) 97 IR 66; [2000] FCA 414); Russell v Trustees of the Roman

Catholic Church, Archdiocese of Sydney, note 91 above, at [150] (aff’d (2008) 72 NSWLR 559; 176 IR 82; [2008] NSWCA 217) and T D Preece and Co Pty Ltd v Industrial Court of New South Wales (2008) 177 IR 172; [2008] NSWCA 285 at [79]. A different view was taken in some earlier decisions such as Konski v Peet [1915] 1 Ch 530 at 538 and Fitzpatrick v Schweppes Ltd, note 286 above, at 13. 290. Spencer v Marchington [1988] IRLR 392 at 395. 291. See J McMullen, ‘Wrongful Dismissal and the Effective Date of Termination’ (1982) 11 ILJ 120, a case note discussing Robert Cort and Son Ltd v Charman [1981] IRLR 437. 292. See 11.75. 293. WT Partnership (Aust) Pty Ltd v Sheldrick (1999) 96 IR 202; [1999] FCA 843 at [38]. 294. Fryar v System Services Pty Ltd (1996) 137 ALR 321 at 331; Sinclair v Anthony Smith & Associates Pty Ltd (IRCA, 1 December 1995, unreported) per von Doussa J (‘it is generally recognised that if an employee is in work and is given time off to go and look for other work, the prospects of finding new employment are somewhat better than if the person concerned is required to seek work as an unemployed person on social security’); see also Martin v Tasmania Development and Resources, note 55 above, at [54] and [92] (aff’d on other grounds (2000) 97 IR 66; [2000] FCA 414) and Carter v The Dennis Family Corporation [2010] VSC 406 at [54]. 295. Paterson v McNaghten (1905) 2 CLR 615 at 629; Summers v Commonwealth (1918) 25 CLR 144 at 151–2; FCT v Orica Ltd (1998) 194 CLR 500; 154 ALR 1 at [114]–[116] and R v Inhabitants of Bottesford (1825) 4 B & C 84; 107 ER 990. 296. See J Bailey, ‘Novation’ (1999) 14 JCL 189 at 191 and Quinn v Jack Chia (Australia) Ltd, note 63 above, VR at 575; see Factory 5 Pty Ltd v State of Victoria (2010) 276 ALR 523; [2010] FCA 1229 at [217]. 297. Martech International Pty Ltd v Energy World Corporation Limited (2007) 248 ALR 353; [2007] FCAFC 35 at [22]–[23] (contract provided for 20 months’ termination payment unless it was terminated for one of five specified reasons; the consensual termination was not one of the specified reasons and so the termination payment was owed). 298. See J Bailey, ‘Novation’, note 296 above, at 194–5 and Brookton Holdings Pty Ltd v Kara Kar Holdings Pty Ltd, note 210 above, at 289. 299. See J Bailey, ‘Novation’, note 296 above, at 191 and the cases cited therein. 300. See Chapters 3 and 4 and Scruples Imports Pty Ltd v Crabtree & Evelyn Pty Ltd (1983) 1 IPR 315 at 320. 301. In British Leyland (UK) Ltd v Ashraf [1978] ICR 979 the parties agreed that the contract would terminate on a particular date unless by that date Mr Ashraf had returned from visiting his seriously ill mother. Mr Ashraf fell ill himself overseas and his return was delayed. As a consequence, the court held that the contract terminated by consent in accordance with their agreement: overruled on different grounds in Igbo v Johnson, Mathey Chemical Ltd [1986] ICR 505. 302. Birch v University of Liverpool [1985] ICR 470 and Griffiths v Buckinghamshire County Council [1994] ICR 265 at 276. 303. Lees v Arthur Greaves (Lees) Ltd [1974] 2 All ER 393; [1974] ICR 501 and McAlwane v Boughton Estates Ltd [1973] ICR 470 at 473; see also Glacier Metal Co Ltd v Dyer [1974] 3 All ER 21; Staffordshire County Council v Secretary of State for Employment [1987] ICR 956 and Tunnel Holdings v Woolf [1976] ICR 387.

[page 746]

Chapter 12 Termination by Frustration Introduction Overview History and foundation of the doctrine The Scope of the Doctrine: General Concepts Impossibility and intervening illegality Events that create radically different circumstances Destruction of parties’ common purpose, shared assumption or the subject matter The Scope of the Doctrine in Employment Law The Fair Work Act, the common law and ill employees Illness and frustration Incarceration and war Death and other potentially frustrating events Frustration and statutory schemes Limits of the Doctrine: Foreseeable Events Express terms governing supervening events Foreseen and foreseeable events Foresight and evidence beyond the contract Limits of the Doctrine: Self-induced Frustration The rule against self-induced frustration

Fault and illness Fault and imprisonment Application of the Doctrine Identification of the frustrating event Dramatic and creeping frustrating events Automatic Operation and Acts of the Parties [page 747] Frustration automatically terminates the contract Onus of proof Consequences of Frustration Effect on future obligations and accrued rights Critique

INTRODUCTION Overview 12.1 The doctrine of frustration governs the legal effect of unforeseen and unforeseeable events that make the performance of contracts either impossible or radically different from what the parties had initially contemplated. The doctrine applies to employment contracts.1 With some simplification, the law relating to the frustration of employment contracts can be summarised in six propositions. 1. The contract of employment is frustrated when a supervening event occurs that either renders further performance of the contract impossible, renders further performance of the contract a radically different thing from what was initially undertaken by the parties or makes the

achievement of the parties’ common object impossible: see 12.4–12.12. 2. The contract of employment is most commonly frustrated by the death of a party, permanent and incapacitating illness, incarceration, events connected with war, or a change in the law making the further performance of the contract illegal. Sometimes the employment contract is frustrated by a prolonged, temporary illness of the employee: see 12.18–12.28. The frustration of an employment contract is a rare event: ‘the doctrine is not to be lightly invoked, must be kept within very narrow limits and ought not be extended’.2 3. A contract is not frustrated by an event foreseen by the parties or foreseeable by them: see 12.31–12.35. 4. A contract is not frustrated by an event whose occurrence was the fault of the party alleging that the contract is frustrated: see 12.36–12.42. [page 748] 5. If a contract is frustrated it terminates automatically and immediately: see 12.47. 6. If a contract is frustrated the parties are released from performing all future obligations under the contract, but the frustration does not extinguish the accrued rights of the parties: see 12.49–12.52. This chapter uses the phrase ‘frustration of the contract’ which reflects the common terminology. Strictly speaking it is the purpose of the contract, not the contract itself, that is frustrated. In this chapter the phrase ‘supervening event’ is used to describe an event occurring after the formation of the contract that affects the performance of the contract, whether or not that event frustrates the contract. A ‘frustrating event’ is a supervening event that frustrates the contract. This chapter also uses the phrase ‘self-induced frustration’. That phrase has a settled meaning and is widely used even though the phrase is contradictory: a supervening event that one of the parties brings about (that is, it is self-induced) does not frustrate the contract.3

History and foundation of the doctrine 12.2 Parties must perform their contractual promises. Parties need not perform promises that are subject to an express condition precedent that has failed. In 1863 in Taylor v Caldwell,4 a number of strands of the common law were drawn together to formulate a further general exception to the obligation to perform promises: a party need not perform promises subject to an implied condition precedent that has failed. This proposition is the foundation of the modern law of frustration. Over the next 40 years the courts extended the doctrine of frustration to two other situations. First, parties need not perform a promise when a supervening event frustrates the commercial object of a contract, even if the subject matter of the contract is not destroyed.5 Second, in Krell v Henry,6 the doctrine was extended to apply to a supervening event that had the effect of destroying the parties’ shared assumption on which they had contracted. These principles have been applied in an employment context since Boast v Firth.7 12.3 Over time, different opinions have been advanced as the basis for the doctrine of frustration. From the 1860s until about the mid-twentieth [page 749] century, most judges adopted the view that an implied term, arising from the imputed intention of the parties, explained the discharge of the contract in the event of frustration.8 That approach is unsustainable and has now been rejected. A number of other bases have been suggested for the operation of the doctrine — for example, a recognition of the need to do justice between the parties in the face of a major change in circumstances, or a rectification of the parties’ interests to reflect a failure of consideration, or the related concept of common mistake.9 The most widely accepted view is that the doctrine is based on a construction of the contract. The doctrine recognises the injustice of insisting on strict compliance with the parties’ obligations when an unforeseen event has made the performance of the obligations radically different from that originally agreed.10 Although the alleviation of injustice is the underlying purpose of the doctrine of frustration, it is not

necessary that the party relying on the doctrine prove that strict compliance with its terms would be unjust.11

THE SCOPE OF THE DOCTRINE: GENERAL CONCEPTS Impossibility and intervening illegality 12.4 Impossibility is not a necessary element in proving the contract is frustrated; however, if a party proves that a supervening event does render the contract impossible to perform then prima facie the contract will be frustrated.12 Impossibility in this sense is not to be given its literal meaning. Courts have sometimes equated impossibility with impracticability.13 [page 750] However, the balance of authority favours a more stringent approach: namely, frustration results from a supervening event that renders the performance of the obligations radically and fundamentally different, but not when the supervening event renders the performance of those obligations merely impracticable.14 12.5 A contract may be frustrated because of supervening illegality. This occurs when the contract itself or its further performance is rendered illegal at some time after the contract is formed.15 During times of war, employment contracts are commonly frustrated by Acts proscribing the continued private sector employment of enlisted or conscripted employees.16 Sometimes a statutory change will make the continued performance of the contract impossible (as opposed to illegal).17 Compliance with the law by one of the parties can also make the performance of the contract impossible. In Melville v De Wolf a seaman was engaged for three years to serve on a ship. After a few months he was directed by a court to leave the ship and return to England to appear as a witness in the murder trial of his captain. He obeyed the order. By the

conclusion of the trial his ship was in the Pacific and he could not rejoin her. Although the contract between the seaman and the ship-owner was not illegal, the contract was held to have been ‘dissolved by the supreme authority of the State’.18 12.6 Employees and employers are often required to possess various licences and governmental authorities to carry out the contract. The failure to possess these licences or authorities can give rise to special problems.19 Whether such a failure frustrates the contract depends on the reason for the failure and the terms of the contract concerning the effect of such a failure. The contract will not be frustrated when a party fails [page 751] to hold a licence that he or she has promised to hold under the contract, such as a driver’s licence. The failure to possess a licence in such a case will usually be a breach.20 In other cases the failure to obtain the licence may result in a failure of a condition precedent to the formation of the contract. The contract is not thereby frustrated; it fails because of the non-fulfilment of that condition.

Events that create radically different circumstances 12.7 The doctrine of frustration does not only apply where the supervening event makes the performance of the contract impossible: [Frustration] occurs whenever the law recognizes that without default of either party a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the contract. Non haec in foedera veni. It was not this that I promised to do.21

The performance of the contract need not have become impossible; rather, the changed circumstances make the performance of the obligation a radically different thing from what was initially contemplated by the parties. 12.8 The law recognises that in the course of a contract there will be some change in the performance of obligations. In some jobs employees will gain experience over time and perform their work more quickly; in physically

demanding work the performance of work may slow with the passage of time. At various times of the economic cycle the contract of employment may be profitable for the employer; at other times it may result in losses. Such changes are natural and the law assumes that they have been contemplated by the parties when entering into a long-term contract. Although these changes may alter the performance of the contract or its profitability, they do not frustrate the contract. As Earl Loreburn has stated, ‘Some delay or some change is very common in all human affairs, and it cannot be supposed that any bargain has been made on the tacit condition that such a thing will not happen again in any degree.’22 [page 752] 12.9 A change ushered in by a supervening event will only frustrate the contract when it renders the performance a radically different thing from what was originally contemplated. The test has been stated in various terms: the event must create a fundamentally different situation;23 the supervening event must be ‘inconsistent with the further prosecution of the adventure’24 and ‘entirely beyond what was contemplated by the parties when they entered into the agreement’.25 The frustration of a contract is a rare event and the doctrine is not to be ‘lightly invoked to relieve contracting parties of the normal consequences of imprudent commercial bargains’.26 It is not enough for the supervening event to have changed (or even substantially diminished) the advantage that the employer or employee receives from the contract.27 Significant changes in the market price of the employer’s product or in the inflation rate are unlikely to result in a radically or fundamentally different situation. The changes might frustrate the contract if inflation proceeded ‘not at a trot or a canter, but at a gallop’ or the increases in costs were ‘astronomical’.28 Courts should be particularly reluctant to conclude that an employment contract has been frustrated if by doing so an employee would lose the benefit of accrued statutory or contractual rights.29

Destruction of parties’ common purpose, shared

assumption or the subject matter 12.10 A contract may also be frustrated if the common object or purpose of the employment cannot be achieved because of a supervening event. It is insufficient for only one party to be denied an anticipated [page 753] advantage or for the expectations of only one party to be thwarted.30 There may well be no common object of the employment. The employer may have an object of getting certain work performed; the employee may have an object of being paid — whether or not that requires the performance of work. For an employee ‘an important object of an employment may be to provide security for an employee in just such eventualities as prolonged illness’.31 A contract is frustrated by a supervening event that destroys an assumption shared by both parties that a particular event will occur or that a particular state of affairs will continue to exist. The assumption need not be stated in the contract.32 The supervening event will not frustrate the contract when one of the parties has promised that the particular event will occur. For example, in Ockerby & Co Limited v Watson33 the employer warranted that it was an agent of the government to sell wheat and contracted to appoint the employee as its sub-agent. The government then refused to appoint the employer as its agent. Although the contract was founded on the common assumption that the employer would be appointed agent, the contract was not frustrated, as the employer had given the warranty mentioned above. 12.11 One rather obvious, but rarely articulated, assumption underlying the contract of employment is that the employee will be free to perform the contract.34 Sometimes a supervening act, such as the incarceration of the employee, destroys this assumption: see 12.40–12.42. Another common assumption is that the parties will be alive at the time they are called on to perform their obligations.35 A further assumption is that the parties will be in sufficient health to perform their obligations.36 An unforeseen permanent disability of the employee will usually destroy this assumption and frustrate the contract.37 When the disability is unforeseen and temporary, then whether

it frustrates the contract depends on [page 754] whether the illness ‘would put an end, in a business sense, to their business engagement, and would frustrate the object of that engagement’.38 These issues are considered further below in 12.18–12.21. 12.12 The destruction of the subject matter of a contract may frustrate the contract. Whether the destruction of the employer’s premises will frustrate the contract raises an interesting question. There is little direct AngloAustralian authority on this topic.39 Sometimes the continued existence of particular premises will be crucial to the performance of the contract; for example, where ushers are engaged at the Sydney Opera House.40 In Turner v Goldsmith the employee was engaged to sell shirts manufactured or sold by the employer. The employer’s factory burnt down. The continued existence of the factory was necessary for the continued manufacture of the shirts. However, the court held that the contract was not frustrated because the contract could be performed by the employee selling shirts sold by, but not manufactured by, the employer. It is suggested that the presence of a power, express or implied, permitting the employer to change the location of the employment is inconsistent with the notion that the destruction of one workplace would render the performance of work at another workplace either impossible or radically different.41

THE SCOPE OF THE DOCTRINE IN EMPLOYMENT LAW The Fair Work Act, the common law and ill employees 12.13 The law concerning the application of the doctrine of frustration to ill employees does not operate in a legal vacuum. It functions alongside two related concepts: the entitlement of an employee to be paid during a period of sickness and the entitlement to terminate a contract on the grounds of illness. The law concerning these two issues has changed considerably since the

development of the doctrine of frustration in the 1860s. [page 755] Prior to the mid-nineteenth century a master took a servant ‘for better and worse, and is to provide for him in sickness and in health’.42 Masters would not be discharged from their obligations to pay wages and retain the servant on account of the employee’s illness, even incurable illness.43 In modern parlance, the contract was not frustrated by illness. A master could not obtain an order discharging the engagement on account of the illness.44 The master could not successfully sue an apprentice who failed to attend for work on account of illness45 and the law imposed obligations on the master to care for an ill servant.46 12.14 With the dismantling of the Poor Laws and the gradual reconceptualisation of service as a contract from the mid-nineteenth century courts started to accept that the permanent illness of a servant was a sufficient ground for a summary dismissal.47 Similarly, where the employment was governed by a fixed term contract and an illness extended for the whole of the fixed term, the employer could refuse to perform its obligations.48 However, absence due to a temporary illness was a valid excuse for nonperformance of the servant’s duties and, consequently, was not a sufficient ground to sue a servant for failing to attend work or to terminate the service.49 A temporary illness did not automatically [page 756] terminate the contract, even where the servant was in receipt of workers’ compensation during the period of the absence.50 A servant in receipt of workers’ compensation payments was not, ordinarily, entitled to recover wages.51 12.15 The modern position of an ill employee raises three issues: 1. What are the rights under the express terms of the contract?

2. In the absence of express terms, what are the rights under any implied terms? 3. What are the rights of an ill employee under statutory schemes such as the Fair Work Act 2009 (Cth)? In regard to the first question, in many contracts there is an express term governing sick leave and pay. Terms commonly replicate statutory protections, by granting the employee a right to payment when ill, and a right not to attend work when ill. Sometimes a custom will govern the matter, although for the reasons discussed in 5.74 a term implied by custom will be exceedingly rare given the breadth of application of the statutory sick pay scheme.52 In the days when sick clubs and friendly societies provided support to ill workers, it was common for contracts to suspend the right of employees to wages during a period of illness.53 In the absence of an express term, there may be an implied term governing the right of an employee to receive wages during a period of illness. After reviewing the authorities, Pilcher J expressed the position as follows: Where the written terms of the contract of service are silent as to what is to happen in regard to the employee’s rights to be paid whilst he is absent from work due to sickness, the employer remains liable to continue paying so long as the contract is not determined by proper notice, except where a condition to the contrary can properly be inferred from all the facts and the evidence in the case. If the employer — and, of course, it will always be the employer — seeks to establish an implied condition that no wages are payable, it is for him to make it out …54

[page 757] According to this approach, absence due to illness will sometimes be service and earn wages. 12.16 In almost all employment contracts the employer’s obligation to pay wages is a dependent obligation. The employee must serve before the wages are payable.55 The employee need not actually perform work. Obeying a direction to stay home is service, as is being on annual leave; being on sick leave may also be service. Payments to a sick employee are ‘wages in every sense of the word’.56 There will be circumstances in which an employer will satisfy the court that the particular employment justifies the implication of a

term that the employee is only entitled to wages for the performance of work.57 In such cases no right to wages will arise. Justice Pilcher’s statement of principle has been referred to approvingly twice by the High Court;58 however, doubts linger as to its correctness. Prior to the 1970s, when there was no unfair dismissal system, the employment of many employees on extended sick leave could be terminated on a week’s or a month’s notice. Imposing obligations on the employer to pay for what amounts to unlimited sick pay until the termination of employment was not oppressive as the employer could at any time give a short period of notice. Nowadays, most employees are protected from unfair dismissal and most have a statutory right to a limited amount of sick pay. Other statutory provisions protect employees from dismissal while accessing rights to sick pay, and grant the employee rights to a limited part of his or her wages when absent because of a work-related injury. A common law right to unlimited sick pay sits uneasily with such an industrial relations system.59 [page 758] 12.17 For many employees the right to sick leave arises from an industrial instrument. The entitlement to wages under that instrument will depend on its terms. Under some instruments wages are payable (and other entitlements accrue) during the employment relationship, regardless of the lack of actual service by the employee.60 National system employees, other than casuals, are entitled to 10 days’ paid personal/carer’s leave per annum under Div 7 of Pt 2 of the Fair Work Act 2009 (Cth).61 A national system employer is prohibited by s 352 of the Act from dismissing an employee because the employee is temporarily absent from work due to illness or injury, a notion defined in reg 3.01 of the Fair Work Regulations 2009 (Cth).62 It is unlikely that the contract will be frustrated on the grounds of illness during a period in which the employee is entitled under the contract, industrial instrument or the Act to paid sick leave.63 Assuming there is no entitlement to continued payment of wages,64 employees who are not entitled to workers’ compensation slip into ‘a sort of limbo’65 on the expiration of their contractual or statutory entitlement to paid leave. It is suggested that a

more accurate description is that ordinarily the employee will not be obliged to perform his or her obligations when ill and the employer will not ordinarily be required to pay the employee after the expiration of any contractual or statutory right to payment. The employment contract will continue to exist unless it is terminated by one of the parties or is frustrated.66

Illness and frustration 12.18 Although illness is probably the most common event to frustrate an employment contract, for the following four reasons it is rare for ill employees to have their contracts frustrated and it is exceedingly rare for temporarily ill employees to have their contracts frustrated. [page 759] 1. In many cases illness (even a permanently incapacitating illness) will not frustrate an employment contract because the terms of the contract make provision for the effect of the illness on the contract.67 Further, the operation of the doctrine of frustration must be consistent with the statutory responsibilities of employers to retain in employment, and offer alternative employment to, employees receiving certain workers’ compensation benefits.68 2. An illness will not frustrate a contract if it is foreseeable by the parties. It is suggested that almost all temporary illnesses are foreseeable in the relevant sense: see 12.33 and 12.34. 3. There is a persuasive argument that the doctrine of frustration should not be applied to ill employees engaged under contracts of indefinite duration terminable on a short period of notice because such contracts already contain risk-allocation clauses in the form of notice clauses: see 12.31. Although courts in the United Kingdom have determined that contracts of employment of indefinite duration can be frustrated by illness,69 some recent Australian examinations of the issue are more circumspect.70 4. The frustration of any contract is a rare event.71

Where the contract is for a significant fixed term, a temporary illness is very unlikely to frustrate the contract, even if the illness is for an extended period.72 In judging whether the illness has a frustrating effect on such contracts, the court will contrast the likely length of absence from work with the unexpired period of the fixed term remaining on the contract. If the contract is for a short, specific term (as in employment to play piano on a particular night), a temporary illness may more easily frustrate the contract.73 12.19 It is, however, possible for an employment contract to be frustrated by illness. In this context a mental illness is no more or less [page 760] likely to lead to a frustration of the employment contract than a physical illness.74 From the 1970s there was a spate of English decisions dealing with the issue of frustration of contracts on account of illness, largely in response to attempts by employers to avoid unfair dismissal proceedings or the payment of redundancy pay. In dealing with these cases the courts developed a list of considerations that should be taken into account when determining whether a contract was frustrated on account of illness.75 The considerations set out below are based on that list. They are not intended to replace the principles discussed in 12.4–12.12; they simply provide a more structured means of addressing the issues raised in those paragraphs. The considerations usually taken into account are: 1. The nature of the illness and the likely length of absence from work.76 2. The nature of the position;77 in particular, whether the employer needs to appoint a permanent replacement for the employee.78 3. The term of the engagement79 and the likely future period of the [page 761] employment.80 Where the employee is engaged under a fixed term

contract, the focus is on the likely length of the absence compared with the period of the fixed term that is still to run on the contract.81 4. The length of service of the employee.82 The basis for this consideration is that ‘over a long period [of] service the parties must be assumed to have contemplated a longer period or periods of sickness than over a shorter period’.83 In some cases courts have suggested that the failure of an employer to take steps to terminate the employment indicates that the employment contract has not been frustrated.84 It is suggested that taking this matter into account not only rewards employers who dismiss employees precipitously, it also ignores the reality that the issue of frustration usually only arises in practice after an employer has taken steps to terminate the contract. As discussed in 12.47, the acts and beliefs of the parties are not wholly irrelevant. 12.20 There is some doubt about whether the approach outlined in 12.19 applies in Australia to employees whose employment is regulated by industrial instruments or the Fair Work Act. In the Hilton Hotels case85 the employee was engaged under a comprehensive award that included provisions for sick pay and accident leave. She was permanently incapacitated in 1993 and did not work again. During the next six years her employer took no steps to terminate her employment. In 1999 the employee sought long service leave under the Long Service Leave Act 1955 (NSW) and annual leave that she had accrued during the period between 1993 and 1999. The Full Bench of the New South Wales Industrial Relations Commission held that the employment was not frustrated. The Commission specifically endorsed the approach taken by Wooten J in Finch v Sayers.86 The judgment in Hilton Hotels tends to support the conclusion that the doctrine of frustration should not [page 762] operate to terminate the employment of temporarily or permanently ill employees whose employment is regulated by comprehensive awards that contain sick leave provisions.87

Incarceration and war 12.21 The incarceration of a party may frustrate an employment contract.88 Incarceration in this context covers a range of limitations on the liberty of employees, including imprisonment pursuant to a custodial sentence, the remanding of a charged employee into custody pending trial and the internment of aliens and prisoners of war. The frustrating event is likely to be the incarceration of the employee, not the fact that the employee has committed a crime or been found guilty of a crime.89 Not all incarcerations will frustrate an employment contract. Some will be of short duration, thus enabling the parties to fulfil the substantial purpose of the engagement despite the temporary interruption.90 A contract of employment is not automatically frustrated by the imposition of a long sentence.91 To ascertain the moment when the contract is frustrated it is necessary to know the likely length of the incarceration and the likelihood that the employee will gain early release from the incarceration, and to consider the effect on the business of the employee’s absence. For example, in Chakki the court declined to conclude that the contract was frustrated by the conviction and sentencing of an employee who was sentenced to nine months’ jail but was released the next day pending an appeal.92 [page 763] 12.22 Acts associated with wars and their conduct may frustrate employment contracts. The declaration of war itself may have the effect of frustrating some contracts.93 However, more often it is the acts associated with the prosecution of a war that result in contracts being frustrated, such as conscription of employees, internment of parties to the contract, capture of employees, or legislation declaring certain types of employment to be illegal.94 It will often be a breach of the contract to direct an employee into a war zone, or to aid a belligerent, when the contract contemplates peaceful employment.95 Though rarely relevant today, there are a legion of entertaining ancient authorities on all manner of troubles at sea, ranging from the effect on employment contracts of recapturing ships from thieving pirates

to a judgment on the effect of being overpowered by mutineers.96 Laws calling the employee into military service may frustrate the employment contract. Ordinarily, the parties assume that it will be lawful for the employee to continue to serve the employer. The contract is frustrated if the continued service becomes illegal because the employee is conscripted.97 Calling the employee into military service may destroy the very object of the employment contract even if the continued performance of the contract is not illegal.98 12.23 Wars are of indeterminate and greatly variable duration. At the commencement of hostilities the belligerents do not know if their war will be recorded in history as the Six-Day War or the Thirty Years’ War. The law does not require that parties wait until the war has run its course before judging whether it was of sufficient length to justify a conclusion that the war frustrated the contract. Instead, the law assumes that a state of war will be ‘of such prolonged duration as prima facie to put an end to contracts which are conditional on the continuance of a particular state of things which is only consistent with peace’.99 This prima facie [page 764] assumption may be displaced by special facts. For example, in Nordman v Rayner the internment of the plaintiff as an enemy alien was from its very commencement likely to be for only a short period. Consequently, the onemonth internment did not frustrate a contract that was of 12 months’ duration.100

Death and other potentially frustrating events 12.24 The death of an employee will frustrate an employment contract as further performance will be impossible.101 The death of a natural employer will frustrate the contract when the contract is either of a personal nature or the personal role played by the natural employer is significant in the formation of the contract or its performance.102 A contract with a single natural employer will almost always meet these criteria; a contract with co-

employers might not. Where that personal role of the employer is insignificant, the contract may survive the death of the employer and bind the employer’s executor or continue to bind the surviving co-employers. An express term that obliges the employee’s executor to continue to serve after the employee’s death is unenforceable.103 12.25 The death of a member of a partnership raises particular problems.104 It will sometimes frustrate the contracts of employees engaged by the partnership. A partnership, unlike a corporation, has no legal personality separate to its members.105 The death of a partner ordinarily dissolves a partnership.106 Although there is some uncertainty about the law in this area, it appears that two related matters determine whether or not the death of a partner frustrates the employment of the partnership’s employees:107 [page 765] first, the terms and nature of the contract between the partners and the employee; and second, the deceased partner’s personal role in the formation and performance of the contract. As to the first matter, the death of a partner will frustrate the contract if the employment contract between the parties is founded on the assumption that there will be no change in membership of the partnership.108 This is not an uncommon assumption underpinning employment by partnerships because on the death of a partner the partnership will usually dissolve and there is no assurance that the surviving partners will be interested in carrying on the trade without the deceased partner. Indeed, there is authority to support the proposition that unless the terms of the contract, express or implied, otherwise provide, a contract of employment by two or more partners is brought to an end by the retirement of one or more of the partners from the partnership.109 As to the second matter, the death of the partner will frustrate the contract when the personal role of the deceased partner in the formation or performance of the contract is significant.110 This rule will apply, for

example, in cases where the employee has entered into a contract because of his or her personal confidence in the deceased partner.111 Conversely, the death of a partner who plays an insignificant role in the creation and performance of the contract is less likely to frustrate the contract. In Phillips v Alhambra Palace Company the artists contracted with three partners who operated a music hall, although they only dealt with and knew of one partner. One of the other non-active or ‘sleeping’ partners died. The court concluded that the contract was not frustrated by the death of the sleeping partner because he played no role in the formation of the contract.112 12.26 Sometimes contracts are frustrated by unusual events, a proposition well illustrated by the Canadian case of Ziger v Shiffer and Hillman & Co. The employees entered into a yellow-dog agreement: they agreed to resign from their union if the employer guaranteed them [page 766] employment for one year.113 The aim of both parties was to conduct what was called an ‘independent shop’, free of union members. The workplace was then ‘besieged by members of the union, the workmen were intimidated and the police failed to give adequate protection’. After 10 weeks the employer settled its dispute with the union by agreeing to re-unionise the workplace and dismiss the plaintiff employees. The Ontario Court of Appeal dismissed the employees’ action for wrongful dismissal because their employment contracts had been frustrated. The basis for this conclusion was that the parties shared an assumption that the police would be able to maintain order in the community and be able to protect the plaintiffs from the ‘mob violence’.114

Frustration due to economic reasons 12.27 There is a dearth of authority on the possibly frustrating effect of a termination of employment that occurs due to economic factors.115 For the following reasons it is suggested that contracts of employment are not usually frustrated when the termination arises from a change in economic circumstances.

First, as discussed in 12.33, a contract is not frustrated by events that are foreseen or foreseeable by the parties. The parties will almost always foresee the possibility that the employee will be made redundant at some time, an event often expressly foreseen by contract, s 119 of the Fair Work Act and terms in enterprise agreements providing for redundancy pay. Even when a redundancy is not expressly foreseen in the contract, it is almost inconceivable for a court in the twenty-first century to conclude that redundancies were unforeseeable. Also, the parties will almost always foresee the possibility that a natural employer will, at some time, decide to retire from the industry and close the business.116 Second, it is suggested that employment contracts are not usually frustrated by industrial action. Protected industrial action, including [page 767] many strikes, is legal under legislative regimes applying in most industries in Australia. Stand-down provisions in s 524 of the Fair Work Act allow employers to suspend their obligations to pay employees during the course of industrial action affecting the employer’s business. Industrial action is usually foreseen or foreseeable in Australia.117 Further, the cause and consequences of industrial action by employees may be within the employer’s control. Palmer has noted that ‘domestic industrial action will rarely, if ever, release a contractor from his obligations in the absence of some specific exculpatory term’.118 Third, it is possible that the redundancy has arisen because of the destruction of a necessary subject matter of the employment, such as the place of employment. For the reasons discussed in 12.12, it will be rare for the employee’s contract to be dependent on the continued existence of particular premises. Fourth, a contract is unlikely to be frustrated if the redundancy arises from a change in market conditions rendering the performance of the contract unprofitable for the employer.119 Finally, the financial ‘death’ of an employer — such as by winding up — does not frustrate the contract. It would be incongruous for the diminution or cessation of trade to have the more radical effect of terminating the contract.120

12.28 As Professor Freedland has observed, the most likely scenario in which an employment contract might be frustrated for economic reasons arises in circumstances analogous to the series of coronation cases such as Krell v Henry:121 that is, when a supervening event destroys a common assumption that a particular event will occur or that a particular state of affairs will continue to exist.122 In situations where the employment is for a specific task or term, the continued existence of funding for a position may be such an assumption and the revocation (or non-renewal) of that funding might possibly frustrate the contract. However, even in such a case the first and third matters mentioned above would suggest that the contract is not frustrated. Further, there will be no frustration of the [page 768] contract when the employer has expressly or impliedly undertaken to organise the necessary funding for the position.123

Frustration and statutory schemes 12.29 The application of the doctrine of frustration to employees seeking relief under statutory schemes has given rise to much debate. For example, can an employee whose contract has been frustrated pursue an unfair dismissal case or recover leave that accrued during a prolonged illness? The answer depends on the terms of the statutory scheme. In the United Kingdom an employee can only pursue an unfair dismissal claim if he or she has been ‘dismissed’. Section 95 of the Employment Rights Act 1996 (UK) states that ‘an employee is dismissed by his employer if … the contract under which he is employed is terminated by the employer …’.124 The approach taken under that Act is that an employer does not ‘dismiss’ an employee whose contract is frustrated and such an employee cannot successfully pursue an unfair dismissal claim. 12.30 Whether the same approach should be applied in Australia depends on the precise terms of the statutory scheme under consideration. Under some Acts the employee will be entitled to certain benefits whether or not the

termination is due to frustration. For example, under s 57 of the Long Service Leave Act 1958 (Vic) an employee is entitled to be paid his or her accrued long service leave if the ‘employee stops working for an employer’. Under that Act an employee would be entitled to such a payment if the employment ended because of the frustration of the contract.125 However, it is probable that an employee whose employment is terminated by the frustration of a contract cannot successfully pursue an unfair dismissal application under the Fair Work Act because his or her employment is not ‘terminated on the employer’s initiative’ under s 386. There are three reasons supporting this conclusion. First, when a contract is frustrated it is terminated automatically, not as the result of an act of the employer.126 Second, a contract that is frustrated terminates by operation of law.127 A majority of the High Court in the Industrial Relations Act case suggested, albeit in dicta, that an employer does not [page 769] terminate the employment if the employment is terminated by operation of law.128 Finally, a number of decisions by the predecessor of Fair Work Australia are consistent with the view that a frustrated contract is not terminated at the initiative of the employer.129

LIMITS OF THE DOCTRINE: FORESEEABLE EVENTS Express terms governing supervening events 12.31 The purpose of the doctrine of frustration is to allocate unforeseen risk between the parties for supervening events.130 The doctrine does not operate where the parties have agreed to allocate that risk between them. Where a contract expressly makes provision for the contractual effect of an event then the occurrence of the event does not frustrate the contract.131 For example, a contract providing that an employee is entitled to up to three months’ sick

pay is not terminated by a temporary illness that incapacitates the employee for less than three months.132 The same rule applies when an implied term allocates risk between the parties.133 Whether the contract makes provision for the event relied on will depend on a construction of the terms of the contract. A contract may identify the contractual effects of a broad class of events but not provide for the effect of the specific supervening event that occurred.134 In an employment context this question most often arises when considering the effect of sick leave clauses. Some courts have adopted the approach that, in the absence of wording to the contrary, a sick leave clause granting the right to paid or unpaid leave in the case of injury or illness does not deal with the event of an employee’s permanent incapacity. Consequently, the [page 770] contract of an employee entitled to sick leave may be frustrated if the employee is permanently incapacitated.135 When a party makes an absolute promise to perform the contract a supervening event that renders the performance of the promise impossible will not absolve the party from performance. It is a question of interpretation in each case whether the contract imposes such an absolute obligation. However, in the absence of clear words to the contrary, it is unlikely that a court will conclude that an employee has undertaken an absolute responsibility to perform work.136 12.32 Force majeure clauses are express terms that state that if a specified event beyond the control of the parties occurs then a specified consequence will follow. For example, a clause might state that in the event of a long-term illness of the employee then the further performance of the contract is suspended or the contract will automatically terminate. Such a clause will preclude the operation of the doctrine of frustration if the event occurs.137 It is a question of construction in each case whether the event falls within the description in the contract.138

Foreseen and foreseeable events 12.33 A contract will not be frustrated by an event that was either actually foreseen by the parties or that could reasonably have been foreseen by the parties.139 Where the risk of an event occurring is foreseeable it is assumed that the parties have entered into the contract with that risk in mind. To the extent that the contract does not expressly allocate that risk to one party or the other, the natural inference is that the parties implicitly agreed to allow the risk to be borne by the party on whom it falls. However, where the risk is unforeseeable, it is unjust to allow the risk to be borne by the party on whom it falls; instead, the doctrine of frustration will provide a fairer risk-allocation mechanism. [page 771] Not every event contemplated by the parties will be foreseen or foreseeable in the relevant sense. An extremely unlikely event will not be considered to be foreseen just because one or more of the parties contemplated its occurrence prior to making the contract. The chance that the event will occur must be a serious possibility before it is foreseeable in the relevant sense.140 Foresight of the cause of the supervening event, but not the event itself, may not be sufficient. The parties may foresee the possibility of a strike, but not foresee the possibility that the employer’s business will be permanently closed because of the severity of the strike.141 12.34 In employment litigation the issue of foresight is usually connected with long-term illnesses. Parties to nearly all employment contracts foresee the possibility that the employee will fall ill at some time during the course of the employment. The parties usually expressly address this possibility by stating that an employee is entitled to certain sick leave. Contracts with such clauses may still be frustrated as the result of the permanent or long-term incapacity of the employee. For example, in Simmons Limited v Hay the contract contained a clause granting the employee the right to payment if he was absent from work because of illness. The employee was permanently incapacitated and unable

to work for the remainder of the fixed term of the contract. Although the parties had foreseen the possibility of the employee being absent owing to illness, they had not foreseen the prospect of permanent incapacity.142 Two particular issues arise concerning the frustration of fixed term employment contracts. First, a very short, temporary illness may frustrate the contract of employees engaged for short periods. In Robinson v Davison143 the pianist was engaged to perform work on one particular night. As she was ill on that night the contract was frustrated. Second, where the fixed term contract is for an extended period, a prolonged temporary illness may not frustrate the contract; however, a permanently incapacitating illness is likely to do so: see 12.18.144 [page 772]

Foresight and evidence beyond the contract 12.35 The evidence of what was foreseen by the parties is not limited to what is recorded in the terms of the contract. The court may look to the surrounding circumstances, including the statutory and regulatory context in which the contract is made and the terms of applicable industrial instruments.145 For example, in Tarnesby an Act governing the employment required the employee, a psychiatrist, to be ‘fully registered’ to hold an appointment (and therefore be employed) in a hospital. When the doctor was suspended for professional misconduct, he ceased to be fully registered and his employment was terminated by operation of the statute. His contract was not frustrated because the suspension ‘was not an unforeseen or unprovided for event brought about by legislation or otherwise but … was a contemplated misfortune the effect of which was clearly preordained’.146 Similarly, provisions commonly found in superannuation trust deeds and income protection schemes concerning disabilities may indicate that such events are foreseen.147 Stand-down provisions in s 524 of the Fair Work Act grant the employer rights to effectively suspend the performance of part of the contract where an event beyond the employer’s control has occurred that has halted production. It is arguable that the events specified in the Act do not

frustrate the contracts of national system employees because the parties, constructively cognisant of their rights under the Act, will foresee the occurrence of those events.

LIMITS OF THE DOCTRINE: SELF-INDUCED FRUSTRATION The rule against self-induced frustration 12.36 In proving a breach of contract, or in a defence to a claim for breach, a party cannot rely on self-induced frustration. A party cannot [page 773] raise the doctrine of frustration to excuse further performance of the contract if it brought about the supervening event through its own fault or default.148 This rule is a specific application of the general principle that a party cannot take advantage of his or her own wrong.149 Fault in this context includes acts in breach of contract. It also has a broader meaning, although the exact boundaries are imprecise.150 Some courts have expressed the rule by referring to the requirement that the supervening event not be due to the party’s act, election or choice and that the party not be responsible for or have brought about the supervening event.151 Inadvertent negligence may amount to fault in the relevant sense.152 12.37 The real question at the heart of this issue does not, however, focus on whether the conduct was negligent or not: the question is whether the supervening event is one ‘which the party seeking to rely on it had the means and opportunity to prevent but nevertheless caused and permitted to come about’.153 The supervening act may be the fault of a party who makes a choice that renders the contract impossible to perform.154 The orthodox approach is that frustration will only occur where neither party is at fault for the supervening event. There is an alternative view which has been growing in influence in recent years: only the party who alleges that

the contract is frustrated must be faultless.155 Under this [page 774] approach, an employer that deliberately burns down its factory cannot claim that its own arson has frustrated the contracts of the factory workers but those workers can nevertheless claim that their contracts have been frustrated by the fire. This alternative approach does not sit well with the apparent purpose of the rule against self-frustration or the proposition that contracts frustrated by supervening events terminate automatically, not at the election of a party.156 12.38 In employment law the issue of fault usually arises when considering illnesses acquired negligently by employees, or frustrations occurring because of the incarceration of the employee for crimes. These are discussed in 12.39 and 12.40. Fault can also arise in other contexts. In Gryf-Lowczowski v Hinchingbrooke Healthcare NHS Trust the employee, a doctor, was suspended during an investigation into his misconduct. The investigation found that certain improper conduct had occurred and directed that the employee be retrained. The employee found one of the employer’s facilities prepared to provide the retraining but, after the employer made a series of unbalanced criticisms of the employee, the facility refused to proceed with retraining. The employer alleged the contract was frustrated as there was no other facility able to retrain the employee. The court found that the contract was not frustrated because the employer was to blame for the loss of the opportunity to retrain and was at fault.157 In Wells v Newfoundland the employee was a senior civil servant appointed by the Crown to fill an office under an Act. His office was abolished because of a legislative change. The Crown claimed that the contract was frustrated because of that change and that the doctrine of the separation of executive and legislative powers meant that the frustration was not self-induced. The Supreme Court of Canada disagreed, holding that: … the government cannot … rely on this formal separation to avoid the consequences of its own actions. While the legislature retains the power to expressly terminate a contract without compensation, it is disingenuous for the executive to assert that the legislative enactment of its own agenda constitutes a frustrating act beyond its control.158

[page 775]

Fault and illness 12.39 An employee who deliberately contracts an illness and thereby renders further performance of the contract impossible is at fault for the purposes of the rule against self-induced frustration. Negligently incurred illnesses are more difficult to classify. Some judges have stated in dicta that a prima donna who loses her voice after neglecting to change rain-soaked clothes or sitting in a draught is not at fault.159 In the unfortunate case of Mr K____, the superior servant contracted a venereal disease some time in the summer of 1877. He admitted that the disease ‘was originally caused by my own imprudence’. When he commenced his service he was not aware that he had the disease, but shortly thereafter he followed his doctor’s advice to take some considerable time off to go to the seaside. The employer argued that Mr K____’s imprudent actions amounted to misconduct, but it did not raise the issue in the context of frustration. Instead, the employer argued that the servant had committed an act of misconduct by absenting himself from service on account of an illness contracted through his own fault. The court held for the servant. Baron Cleasby stated that ‘prima facie illness is to be attributed to an act of God’ and declined to investigate the cause of that illness.160 Justice Hawkins agreed. Both judges noted that the illness arose from conduct prior to the employment and that the servant was ignorant of the illness at the start of his service.

Fault and imprisonment 12.40 Cases concerning the imprisonment of employees often raise complex questions about fault and frustration. Courts have experienced some difficulty when addressing this issue partly because of the unusual way in which the question of fault arises in some statutory contexts. Ordinarily, a plea of frustration is raised by a party to excuse the non-performance of the contract by that party: frustration is usually a shield rather than a sword.161 If the plea fails, then the non-performing party

[page 776] will, almost inevitably, have been in breach for failing to perform the contract. To raise the plea successfully, the party must also deny that the frustration was self-induced. Hence, in most breach of contract matters a party who relies on the doctrine of frustration also denies being at fault. 12.41 In contrast to this ordinary approach, a series of decisions in the United Kingdom during the 1970s and 1980s162 concerned the application of the doctrine of frustration to employees who willingly admitted that they were at fault and in breach of their contracts. These employees were only entitled to pursue unfair dismissal applications if they had been ‘dismissed’ by their employer. If their contracts had been frustrated then they had not been dismissed by the employer; instead, their termination would have been effected by operation of law. The employees had committed a variety of crimes and had been sentenced to jail for extended periods. The employment then terminated and the employees alleged that there had been a dismissal by the employer and that the dismissal was unfair. In each case the employer denied that it had dismissed the employee and alleged that the contract was frustrated. The employee responded by stating that the supervening act (be it the crime or the imprisonment) was the fault of the employee. Consequently, so each employee argued, as frustration only operates where neither party is at fault, there must have been a dismissal, it was not a termination arising from a frustration and the employee was entitled to pursue an unfair dismissal claim. That is, the party seeking to avoid a finding that the contract was frustrated was relying on its own breach. 12.42 The Court of Appeal of England and Wales considered these issues in FC Sheperd & Co Ltd v Jerrom.163 In that case the employee was imprisoned after a conviction for assault and affray arising from a fight between rival motorcycle gangs. Mr Jerrom admitted that his acts were a repudiation of his contract and argued that because they were his fault there could be no frustration of his contract. The Court of Appeal disagreed, although for varying reasons. Lord Justice Lawton based his decision on the proposition that a party cannot raise his or her own wrong to defeat an allegation that the contract was frustrated.164 Lord Justice Mustill held that the supervening

event discharged the employer [page 777] from further performance of the contract, but not the employee.165 Lord Justice Balcombe reached the conclusion that the supervening event — the imprisonment of the employee — was not the fault of the employee.166

APPLICATION OF THE DOCTRINE Identification of the frustrating event 12.43 To ascertain whether a contract is frustrated it is important to carefully identify the event that is said to frustrate the employment. In the case of war, for example, although it may be the declaration of the war that frustrates the contract (as in the case of a contract between enemies), it is more likely that it will be an event related to the war (such as the internment or conscription of the employee) that will be the frustrating event. The fact that the declaration of war makes the latter events likely will not frustrate the contract, as ‘frustration is produced by events happening, not by the risk of such events’.167 In a similar vein, it is usually not the commission of a crime that frustrates an employment contract; it is more likely to be the imposition of a prison sentence or the incarceration of the employee for the commission of the crime.168 In assessing when a contract is frustrated courts should examine the facts known at the time of the supervening event.169

Dramatic and creeping frustrating events 12.44 The time at which the contract is frustrated is a question of fact in each case.170 In terms of timing there are, broadly speaking, three types of cases in which frustrations occur. First, there are dramatic frustrations, in which the supervening event is ‘so dramatic and shattering that everyone concerned will realise immediately that to all intents and purposes the

[page 778] contract must be regarded as at an end’.171 Such dramatic events include the death of a party, an injury that immediately renders the employee permanently disabled, or a change in the law indefinitely proscribing the further performance of the contract. Where there has been a dramatic frustration, the contract will usually be frustrated immediately on the occurrence of the event.172 Second, there are creeping frustrations, in which the supervening event does not have an immediately obvious frustrating effect. A prolonged but temporary illness is an example of such a frustration. The course and outcome of such illnesses may be uncertain and it may be unclear for a considerable period whether the contract is or will become frustrated.173 The third type of case involves an amalgam of creeping and dramatic frustrations. Notcutt v Universal Equipment Co is a good illustration of the type of case covered by the third category. In Notcutt the employee was off work for nine months after suffering from a coronary. At that time the parties were unsure about the long-term prognosis of the illness. The parties then received a report from Mr Notcutt’s doctor making it clear that he was never going to work again. The receipt of the report frustrated the contract. In such cases the contract is usually frustrated on the date of the dramatic development and not from the date of the initial illness.174 12.45 Creeping frustrations occur as the result of a supervening event that does not have an immediately obvious frustrating effect. It is not necessary for the court to identify the precise moment of the frustration and it may not be possible to do so.175 In an employment context, creeping frustrations usually arise as the result of prolonged illnesses. Courts have emphasised the importance of the parties not acting precipitously in concluding that a contract has been frustrated; they should wait until the gravity of the illness becomes known.176 Lord Evershed stated the test in the following terms: [page 779]

Would a reasonable man in the position of the party alleging frustration, after taking all reasonable steps to ascertain the facts then available, and without snapping at the opportunity of extricating himself from the contract, come to the conclusion that the [supervening event] was of such a character and was likely to last so long that the subsequent performance or further performance of the contract would really amount to the performance of a new contract.177

12.46 This much of the law is clear, but hereinafter the principles become imprecise. Even 100 years ago no lesser authority than Justice Wright bemoaned the fact that ‘the cases are not at all easy to reconcile on this vexed and very ancient question of how far and what kind of supervening impracticability destroys a contract’.178 A century later it is doubtful whether the principles of law survive close analysis. This is not just a problem when dealing with employment law cases. Similar problems arise in cases concerning charter parties and delays in the performance of other commercial contracts.179 The multitudinous cases on this topic are little more than applications of general principles discussed in 12.4–12.12 to particular facts. In some cases a contract has been frustrated by merely one day of illness;180 in other cases, absences for more than a year have been held not to frustrate employment contracts.181 In determining whether the point has been reached when the contract has been frustrated by a prolonged illness, courts have taken into account the matters discussed in 12.18–12.20 relating to the employment (its terms, nature and context), the absence necessitated by the supervening event and the actions of the parties. Finally, the Canadian decision in Pastachak v Bienfait should be noted. In that case the employee injured his shoulder and shortly after was made redundant. It later transpired that the injury was far more serious than was originally thought by the parties. The employee brought an action for wrongful dismissal and one of the employer’s defences was that the contract would have been frustrated if it had not been wrongfully terminated. The court disregarded this matter in the assessment of damages. It determined that the employer could not rely [page 780] on the ‘subsequent crystallisation’ of the frustrating event to avoid the

consequences that naturally flowed from the decision to dismiss the employee in breach of the contract.182

AUTOMATIC OPERATION AND ACTS OF THE PARTIES Frustration automatically terminates the contract 12.47 When a contract is frustrated it terminates automatically. As Lord Wright stated: [Where] there is a frustration, a dissolution of the contract occurs automatically. It does not depend, as does rescission of a contract on the ground of repudiation or breach, on the choice or election of either party.183

Often one party will allege that the contract has been frustrated by the supervening event and that he or she is, therefore, excused from further performance. Adopting such a position is not necessary to invoke the doctrine of frustration.184 Indeed, ‘the whole point of frustration is that it operates automatically’185 and not at the election of a party. It has been noted that ‘what parties say and do is only evidence, and not necessarily weighty evidence, of the view to be taken of the event by informed and experienced minds’.186 It is the court’s view of the events, and not the parties’, which is crucial in this respect. The parties’ beliefs are not determinative, but nor are they irrelevant.187 If the parties continue with their relationship (or provide notice of the intention to terminate the contract) as if the supervening event had not terminated the contract, then this may provide evidence that the event was not a fundamental and [page 781] radical change frustrating the employment contract.188 When both parties treat the relationship as uninterrupted by the supervening event, there is good reason for courts to be guided by a healthy serving of common sense.189 In some employment cases great emphasis has been placed on the reactions of

the employer to the supervening event, although this appears contrary to principle.190 Given that the views of the parties are not decisive on the matter, it is possible that the contract will be frustrated by an event but the parties continue to proceed on the false assumption that the contract is extant.191 There is some rather old authority that if the contract is dissolved by an event and the parties afterwards recommence performing duties under the contract then the contract is considered to have continued during the whole of the period. For example, if a sailor is captured at sea, then the contract of employment is frustrated; but if the ship is recovered and continues with the voyage, then the contract resumes.192 In a similar vein, a new contract may arise after the frustration of the original contract or, subject to certain considerations of public policy, one of the parties may be estopped from relying on the doctrine of frustration.193

Onus of proof 12.48 The onus of proving that a contract has been frustrated rests on the party who makes the allegation.194 The question of who bears the [page 782] onus of proof when issues of fault arise is less straightforward. Assume an employee alleges that the contract was breached and the employer’s defence is that the contract was frustrated by a supervening event. Assume further that the employee responds that the supervening event was caused by and was the fault of the employer. In such a case the orthodox legal approach is that the employer, being the party relying on the alleged frustration, must prove that the event occurred; and the employee, being the party relying on the allegation of self-induced frustration, must prove that the supervening event was caused by and was the fault of the employer.195 This approach is not universally applied in contract law: for example, a bailee alleging that a contract of bailment has been frustrated owing to the destruction of the bailed goods must prove that the destruction was not

because of any breach of duty by the bailee.196 There has been a suggestion, made without reference to the authorities on the point, that employment cases also form another exception to the orthodox rule stated above.197

CONSEQUENCES OF FRUSTRATION Effect on future obligations and accrued rights 12.49 A frustrated contract of employment terminates automatically. The contract is not avoided ab initio;198 it is terminated from the date of the frustrating event. As a general rule, when a contract is frustrated then the whole of the contract is terminated.199 This rule is displaced by a clear contractual indication that a particular clause will survive the frustration of the contract.200 The frustration of the contract discharges the parties from performing future obligations under the contract: ‘The ordinary rule [is that] where the further performance of a contract has become impossible, then, in the absence of special provisions in the contract, both parties are excused [page 783] from further performance of the contract’.201 Hence, when a natural employer dies the employee need not continue to serve the administrator of the employer’s estate.202 An employee remains entitled to wages (or other entitlements) accrued prior to the frustration of the contract.203 The contract remains in existence for the purpose of giving effect to those rights.204 For example, in Stubbs v Holywell205 the employee was engaged for 15 months for a total of £500 payable in five equal payments each quarter. When he died shortly after nine months’ service, his employer had already paid for one-quarter. As Stubbs had served for the whole of the second and third quarters he was entitled to be paid wages for those quarters and his executors were entitled to recover the moneys from the employer.

12.50 Ordinarily, the employee is not entitled to payment where the right has not accrued as at the date of the frustration, subject to express terms to the contrary.206 For example, in Marshall v Glanvill the employee was engaged under a contract that provided for commission on all trade done by the employer in certain regions during the time he was retained by the employer. His contract was frustrated by his enlistment during the Great War. He claimed commission for trade done by the employer after his enlistment. McCardie J has stated the rule in the following terms: Prima facie the liability to pay commission in cases of this kind ceases as to future trade with the cessation of the employment in the absence of reasonably clear intention to the contrary.207

Most contracts contain express or implied terms requiring an employer to provide the employee with notice of the intention to terminate the contract, or a payment in lieu of that notice. Ordinarily, when a contract is frustrated the employer is not required to make such a payment: ‘Payments in lieu of notice are the price the employer has to pay for terminating the contract. When a contract is terminated by operation [page 784] of law under the doctrine of frustration, the relevant provisions do not apply’.208 12.51 Where an employer has paid money to an employee under a contract prior to the frustration of the contract, then the employer is entitled to be repaid the money only if there has been a total failure by the employee to perform the contract. This principle was applied in Winchup v Hughes. In that case Mr Winchup Senior paid Mr Hughes £25 to take and instruct Winchup Senior’s son for six years as an apprentice watchmaker. Hughes died after 12 months of instructing the apprentice and Winchup Senior sought the return of the £25. As the contract had been partly performed, the executors of the estate of Hughes were not obliged to return any part of the money.209 The position would have been different if Hughes’s death had occurred after the payment but before the commencement of the instruction.210 12.52 Whether an entitlement to wages has arisen depends on the terms of the contract. Almost all employment contracts impliedly provide that the

employee must serve for a specified period (such as a week or a month) as a condition precedent to the earning of wages.211 The common law entire obligation rule, discussed in 9.29, is that an employee does not earn wages if he or she fails to serve for the specified period, unless the employee’s failure to serve is owing to a breach by the employer. For example, under the common law an employee who is engaged on a weekly wage, but who dies after four days’ work, is entitled to no wages. There are four measures that ameliorate the harsh effects of the doctrine of frustration in such cases. First, the Apportionment Acts, discussed in more detail in 9.32, reverse most of the harsh effects of the entire obligation rule. Second, the law of restitution, through the principle of unjust enrichment, may provide some relief for employees.212 Third, in New South Wales, Victoria and South Australia there is legislation altering some of the common law rules stated above.213 Fourth, the [page 785] Fair Work Act modifies the entire obligation rule for national system employees.214

CRITIQUE 12.53 The doctrine of frustration clearly has a role to play in employment law to allocate the risk of catastrophic events. It remains the most effective mechanism to deal with events such as death, permanent disability and supervening illegality. Outside this rather narrow range of extreme supervening events, there is controversy surrounding the appropriateness of the application of the doctrine of frustration in employment law. One aspect of that debate concerns how the doctrine of frustration should apply to contracts terminable on short notice.215 The doctrine clearly must continue to apply to such contracts to deal with the possibility that one of the parties dies or the further performance of the contract becomes illegal. The heart of the debate appears to concern two other matters: whether an employee should be prevented from pursuing a statutory right on account of

supervening illness or imprisonment; and whether illness (temporary or permanent) is a foreseeable event. 12.54 On the first point it is suggested that the doctrine of frustration should not be used to prevent employees pursuing unfair dismissal claims. One of the principal purposes of the unfair dismissal schemes is to ensure that employees do not have their employment terminated unfairly. The notion that the law, and not the employer, terminates the employment of an employee whose contract is frustrated does not reflect [page 786] reality. In practice it is almost always the employer who alleges that the contract is frustrated, so as to prevent the employee from accessing the beneficial effects of the unfair dismissal scheme. On the question of foresight, the guiding principle is that a contract will not be frustrated by an event that the parties actually foresaw or that the parties could reasonably have foreseen.216 Courts conclude, as a matter of course, that the death of a party frustrates employment contracts. To do so a court must be satisfied that the parties could not reasonably have foreseen the death of a mortal. It is suggested that not only is death foreseeable, but many believe it to be somewhat inevitable. The late Professor Julius Stone illustrated how ‘foreseeability’ is a category of indeterminate reference: it appears to direct the court to a single correct result, but in reality grants a leeway of choice.217 The way in which judges use this leeway when dealing with illness has an air of unreality about it. For example, two appellate decisions have effectively concluded that a contract may be frustrated by permanent illness if the contract states the consequences of the employee falling ill, but not the consequences of the employee falling very ill.218 The courts have reached this conclusion by interpreting the reference to illness in the contracts to exclude permanent illness, and then concluding that the parties could not reasonably have foreseen permanent illness, even though they actually did foresee temporary illness. The narrow, niggardly approach to the question of foreseeability of illness should be replaced by the more realistic proposition that in contemporary society long-term illnesses and

permanent incapacity of employees are events foreseen by the parties and do not frustrate the contract of employment.219 _________________________ 1.

Simmons Limited v Hay (1964) 81 WN (Pt 1) (NSW) 358 at 360 and Horlock v Beal [1916] AC 486 at 496.

2.

The Super Servant Two [1990] 1 Lloyd’s LR 1 at 8 per Bingham LJ. Similar cautions have been uttered in the context of employment: see Williams v Watsons Luxury Coaches Limited [1990] IRLR 164 at [18] and Gryf-Lowczowski v Hinchingbrooke Healthcare NHS Trust [2006] ICR 425 at 442.

3.

See 12.36–12.38.

4.

Taylor v Caldwell (1863) 3 B & S 826; 122 ER 309.

5.

Jackson v Union Marine Insurance Company Limited (1874) LR 10 CP 125.

6.

Krell v Henry [1903] 2 KB 740.

7.

Boast v Firth (1868) LR 4 CP 1.

8.

Hirsch v The Zinc Corporation Limited (1917) 24 CLR 34 at 62–3; FA Tamplin Steamship Co Limited v Anglo-Mexican Petroleum Products Company Limited [1916] 2 AC 397 at 403–4. In an employment context, see Boast v Firth, note 7 above, at 8 and 9 and Farrow v Wilson (1869) LR 4 CP 744 at 746. See also the discussion in Scanlan’s New Neon Pty Ltd v Tooheys Ltd (1943) 67 CLR 169 at 194ff and L Trakman, ‘Frustrated Contracts and Legal Fictions’ (1983) 46 MLR 39.

9.

See generally the discussion in J Carter et al, Contract Law in Australia, 5th ed, LexisNexis Butterworths, Australia, 2007, at [33.49]–[33.56] and E Peel, Treitel’s Law of Contract, 12th ed, Sweet & Maxwell, London, 2007, pp 984–90.

10.

Hirji Mulji v Cheong Yue Steamship Company Limited [1926] AC 497 at 510; Davis Contractors Ltd v Fareham UDC [1956] AC 696 at 729; 2 All ER 145 at 160–1 and Codelfa Constructions Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 357, 376, 380 and 409; 41 ALR 367 at 379, 393, 398 at 422–3.

11.

Notcutt v Universal Equipment Co (London) Limited [1986] IRLR 219 at [17]–[19]; cf The Eugenia [1964] 2 QB 226 at 239.

12.

A supervening event rendering further performance of the contract impossible will not frustrate the contract if the event was foreseen in the relevant sense by the parties (see 12.31–12.35) or was the fault of the party seeking to rely on the frustration: see 12.36–12.38.

13.

See, for example, Horlock v Beal, note 1 above, at 499.

14.

See Gryf-Lowczowski v Hinchingbrooke Healthcare NHS Trust, note 2 above, at 442–3; see also A Phang, ‘Frustration in English Law — A Reappraisal’ (1992) 21 Anglo-Am LR 278 at 281 and 286–9.

15.

For example, in Pritchard v Dinorwic Slate Quarries Limited (1971) 6 ITR 102 the contract was frustrated by the Pneumoconiosis Medical Board exercising a statutory authority to indefinitely prohibit further employment by an employee suffering from pneumoconiosis; see also Tarnesby v Kensington and Chelsea and Westminster Area Health Authority (Teaching) [1981] IRLR 369.

16.

See, for example, Marshall v Glanvill [1917] 2 KB 87.

17.

Reilly v R [1934] AC 176 at 180; cf Wells v Newfoundland [1999] 3 SCR 199 at [49]–[54]. See also John Holland Group Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2010) 198 IR 439; [2010] VSC 322 at [62]–[86] (aff’d [2011] VSCA 396).

18.

Melville v De Wolf (1855) 4 E & B 844 at 849.

19.

See further E Peel, Treitel’s Law of Contract, note 9 above, pp 949–50.

20.

See, for example, Ockerby & Co Limited v Watson (1918) 25 CLR 431 at 433–4 and Thomas v Lafleche Union Hospital [1991] 5 WWR 209 at 214 (concerning the loss of registration of a registered nurse owing to misconduct).

21.

Hirji Mulji v Cheong Yue Steamship Company Limited, note 10 above, at 510 per Lord Radcliffe.

22.

FA Tamplin Steamship Co Limited v Anglo-Mexican Petroleum Products Company Limited, note 8 above, at 403.

23.

Davis Contractors Ltd v Fareham UDC, note 10 above, AC at 723; All ER at 155 and Simmons Limited v Hay, note 1 above, at 360–1.

24.

Hirji Mulji v Cheong Yue Steamship Company Limited, note 10 above, at 509.

25.

Cricklewood Property & Investment Trust Limited v Leighton’s Investment Trust Limited [1945] AC 221 at 228; [1945] 1 All ER 252 at 255.

26.

The Nema [1982] AC 724 at 752; [1981] 2 All ER 1030 at 1046; The Super Servant Two, note 2 above, at 8 and Williams v Watsons Luxury Coaches Limited, note 2 above, at [18].

27.

Scanlan’s New Neon Pty Ltd v Tooheys Ltd, note 8 above, at 223 and Meriton Apartments Pty Ltd v McLaurin & Tait (Developments) Pty Ltd (1976) 133 CLR 671 at 678; 10 ALR 296 at 301– 2.

28.

Wates v Greater London Council (1983) 25 BLR 1 at 35; Tsakiroglou & Co Limited v Noblee Thorl GmbH [1962] AC 93 at 118 and 128–9; [1961] 2 All ER 179 at 186 and 192–3; see also Power Co Limited v Gore District Council [1997] 1 NZLR 537 (changes in the value of money over 70 years did not frustrate the contract).

29.

Finch v Sayers [1976] 2 NSWLR 539 at 547; see also Giancaspro v SHRM (Australia) Pty Ltd (2005) 93 SASR 32; 145 IR 269; [2005] SASC 340 at [37]–[46]; Cachia v State Authorities Superannuation Board (1993) 47 IR 254 at 274; Hilton Hotels of Australia Limited v Pasovska (2003) 122 IR 428 at [45].

30.

Hirji Mulji v Cheong Yue Steamship Company Limited, note 10 above, at 507; Ross v IceTV [2010] NSWCA 272 at [76]–[78].

31.

Finch v Sayers, note 29 above, at 549.

32.

Codelfa Constructions Pty Ltd v State Rail Authority of New South Wales, note 10 above, CLR at 357–9; ALR at 379–81.

33.

Ockerby & Co Limited v Watson, note 20 above.

34.

Unger v Preston Corporation [1942] 1 All ER 200 at 204.

35.

Graves v Cohen (1930) 46 TLR 121 at 124 and Tasker v Shepherd (1861) 6 H & N 575; 158 ER 237: see 12.24.

36.

Robinson v Davison (1871) LR 6 CP 269 at 274–5 and at 278: see 12.18.

37.

Simmons Ltd v Hay, note 1 above, at 361–2; note, however, Hilton Hotels of Australia Limited v Pasovska, note 29 above. See also Ottoman Bank v Chakharian [1930] AC 277 at 283 (employee

temporarily unable to perform contract as he fled from a death sentence imposed during the Turkish War of Independence). 38.

Jackson v Union Marine Insurance Company Limited, note 5 above, at 145 per Bramwell B; Poussard v Spiers (1876) 1 QBD 410 at 414 (although there is some doubt about whether this is truly a case concerning frustration); Storey v Fulham Steel Works Company (1907) 24 TLR 89 at 90.

39.

In Canada see Polyco Window v Saskatchewan (1994) 3 CCEL (2d) 10.

40.

Taylor v Caldwell, note 4 above. See also Browning v Crumlin Valley Collieries Limited [1926] 1 KB 522.

41.

Turner v Goldsmith [1891] 1 QB 544 at 550 and 6.18.

42.

R v Inhabitantes de Hales Owen (1718) 1 Strange 99; 93 ER 410; R v Inhabitants of Sutton (1794) 5 TR 657; 101 ER 366 at 368 and R v Inhabitants of Christchurch (1760) Burr SC 494 at 497. See also Finch v Sayers [1976] 2 NSWLR 540 at 556; W Blackstone, Commentaries on the Laws of England, 13th ed, Vol II, A Strahan, 1800, p 425; R Burn, The Justice of the Peace, 21st ed, Vol V, A Strahan, London, 1810, p 208.

43.

R v Inhabitantes de Hales Owen, note 42 above; R v Inhabitantes de Islip in Com’ Oxon (1721) 93 ER 611; 1 Strange 423; R v The Inhabitants of Sharrington (1784) 99 ER 742; 4 Dougl 12 and R v Inhabitants of Sutton, note 42 above. The law marine extended similar rights to seamen engaged under entire contracts: see Chandler v Grieves (1796) 2 H Bl 606; 126 ER 730 and Beale v Thompson (1804) 4 East 546.

44.

See the dicta of Kenyon CJ in R v Inhabitants of Sutton, note 42 above, at 367.

45.

Boast v Firth, note 7 above, at 8 and 9.

46.

R v Inhabitantes de Hales Owen, note 42 above; R v Inhabitants of Sutton, note 42 above, at 368 and R v Inhabitants of Christchurch, note 42 above.

47.

Cuckson v Stones (1859) 1 El and El 248; 120 ER 902 at 906; Storey v Fulham Steel Works Company (1907) 23 TLR 306 at 307 (aff’d on appeal (1907) 24 TLR 89). See also the dicta of Baron Bramwell in Jackson v Union Marine Insurance Company Limited, note 5 above, at 145.

48.

Terry v Variety Theatres Controlling Company Limited (1928) 44 TLR 242.

49.

Boast v Firth, note 7 above; Jackson v Union Marine Insurance Company Limited, note 5 above, at 145; Robinson v Davison, note 36 above, at 274–5; Poussard v Spiers, note 38 above, at 414; Cuckson v Stones, note 47 above, at 906; Storey v Fulham Steel Works Company, note 47 above, at 307 (an approach endorsed on appeal in (1907) 24 TLR 89 at 91) and Davies v Ebbw Vale Urban District Council (1911) 27 TLR 543 at 544. See also Yeager v RJ Hastings Agencies Limited [1985] 1 WWR 218 at 236–8 on the effects of mental illness on performance obligations.

50.

Warburton v Co-operative Wholesale Society Limited [1917] 1 KB 663 at 665, 667 and 668 and Carr v Hadrill (1875) 39 JP 246 at 247.

51.

Elliott v Liggens [1902] 2 KB 84.

52.

See the dicta in Petrie v MacFisheries Limited [1939] 4 All ER 281 at 288 and 290 and Niblett v Midland Railway Company (1907) 96 LT 462 at 464; Howman & Son v Blyth [1983] ICR 416 at 419–21.

53.

See Niblett v Midland Railway Company, note 52 above; Carr v Hadrill, note 50 above, and A Denning, ‘Wages during sickness’ (1939) 55 LQR 353 at 356.

54.

Orman v Saville Sportswear Ltd [1960] 1 WLR 1055 at 1064–5; Miles v Wakefield Metropolitan

District Council [1987] AC 539 at 569–70; Paff v Speed (1961) 105 CLR 549 at 566; Graham v Baker (1961) 106 CLR 340 at 345; Petrie v MacFisheries Limited, note 52 above, at 282; Cuckson v Stones, note 47 above; Warren v Whittingham (1902) 18 TLR 508; Warburton v Cooperative Wholesale Society Limited, note 50 above, at 665; Storey v Fulham Steel Works Company, note 47 above (aff’d (1907) 24 TLR 89); Marrison v Bell [1939] 1 All ER 745; Finch v Sayers, note 42 above, at 550; Quill v Brunton [1921] AR (NSW) 44 at 45; Wallsend and Plattsburg Co-operative Society Ltd v Gray [1924] AR (NSW) 41 at 43ff; Compton v Council of the County Borough of West Ham [1939] Ch 771 at 776; see also A Denning, ‘Wages During sickness’, note 53 above. 55.

See 9.9 and the exceptions to that rule discussed in 9.13–9.16.

56.

Graham v Baker, note 54 above, at 345 per Dixon CJ, Kitto and Taylor JJ.

57.

Petrie v MacFisheries Limited, note 52 above, at 291; Hancock v BSA Tools Limited [1939] 4 All ER 538; O’Grady v M Saper Limited [1940] 3 All ER 527 at 529 and Finch v Sayers, note 42 above, at 550. See also the decision of the Supreme Court of Canada in Dartmouth Ferry Commission v Marks (1904) 34 SCR 366 at 374–5 and Browning v Crumlin Valley Collieries Limited, note 40 above, at 529.

58.

Paff v Speed, note 54 above, at 566; Graham v Baker, note 54 above, at 345.

59.

Mears v Safecar Security Ltd [1983] QB 54; [1982] 2 All ER 865; Howman & Son v Blyth, note 52 above, at 419–21; the issue was referred to somewhat inconclusively in H & H Security Pty Ltd v Toliopoulos (FCA, BC9703889, 18 August 1997, unreported).

60.

Wallsend and Plattsburg Co-operative Society Ltd v Gray, note 54 above, at 47–8 and Hilton Hotels of Australia Limited v Pasovska, note 29 above.

61.

See 8.7.

62.

See Sallehpour v Frontier Software Pty Ltd (2005) 139 IR 457; [2005] FCA 247 at [45]; Nikolich v Goldman Sachs J B Were Services Pty Ltd [2006] FCA 784 at [166] to [177] (varied (2007) 163 FCR 62; [2007] FCAFC 120).

63.

Marshall v Harland and Wolff Limited [1972] IRLR 90 at [8]; Ridge v Director General, Department of Culture and the Arts (2008) 188 IR 237 at 262–3. Query whether a sudden permanently incapacitating accident might frustrate the contract during a period of paid sick leave: see 12.44–12.46.

64.

See 12.15 and 12.16.

65.

Hart v AR Marshall & Sons (Bulwell) Limited [1977] IRLR 53 at [7] per Phillips J.

66.

Hart v AR Marshall & Sons (Bulwell) Limited, note 65 above, at [7]; Finch v Sayers, note 42 above, at 547.

67.

See Hilton Hotels of Australia Limited v Pasovska, note 29 above, at [38]; Smith v Moore Paragon Australia Ltd (2004) 130 IR 446 at 465. See also 12.31.

68.

See Foster v Copper Mines of Tasmania Pty Ltd (2004) 125 IR 153 at 157–8; Giancaspro v SHRM (Australia) Pty Ltd, note 29 above, at [37]–[46]; Ridge v Director General, Department of Culture and the Arts, note 63 above.

69.

Notcutt v Universal Equipment Co (London) Limited, note 11 above, at [12]–[14].

70.

Hilton Hotels of Australia Limited v Pasovska, note 29 above, at [38] and Finch v Sayers, note 42 above, at 558.

71.

The Super Servant Two, note 2 above, at 8 and Williams v Watsons Luxury Coaches Limited, note

2 above, at [18]. 72.

See, for example, Storey v Fulham Steel Works Company, note 47 above.

73.

See Robinson v Davison, note 36 above; Poussard v Spiers, note 38 above, and Hall v Wright (1858) El Bl & El 765 at 794.

74.

See, for example, Condor v The Barron Knights Limited [1966] 1 WLR 87; R v Inhabitants of Sutton, note 42 above, TR at 659; Robinson v Davison, note 36 above, at 277 and Yeager v RJ Hastings Agencies Limited, note 49 above, at 236–8.

75.

The list was first formulated in Marshall v Harland and Wolff Limited, note 63 above, at [8] and was later slightly varied in The Egg Stores (Stamford Hill) Limited v Leibovici [1976] IRLR 376 at [9]. It has been widely applied in the United Kingdom and adopted by the AIRC: Smith v Moore Paragon Australia Ltd, note 67 above, at 464–5; Ridge v Director General, Department of Culture and the Arts, note 63 above, at 262. A similar approach is applied in Canada: see Yeager v RJ Hastings Agencies Limited, note 49 above, at 239–43 and Parks v Atlantic Provinces Special Education Authority Resource Centre for the Visually Impaired (1992) 39 CCEL 155 at 177–8.

76.

Hare v Murphy Brothers Limited [1974] IRLR 342 at 343; Scarr v Goodyear & Sons Limited [1975] IRLR 166 at [14]; Pritchard v Dinorwic Slate Quarries Limited, note 15 above, at 104; Hebden v Forsey & Son [1973] ICR 607 at 609 (where it was alleged that the contract was frustrated while the employee was awaiting an operation); Marshall v Harland and Wolff Limited, note 63 above, at [8].

77.

Loates v Maple (1903) 88 LT 288 at 291; Hare v Murphy Brothers Limited, note 76 above, at 343; Pritchard v Dinorwic Slate Quarries Limited, note 15 above, at 104; Marshall v Harland and Wolff Limited, note 63 above, at [8].

78.

The Egg Stores (Stamford Hill) Limited v Leibovici, note 75 above, at [9]; Chakki v United Yeast Co Limited [1982] 2 All ER 446 at 450; Hare v Murphy Brothers Limited, note 76 above, at 343; Pritchard v Dinorwic Slate Quarries Limited, note 15 above, at 104–5; Hart v AR Marshall & Sons (Bulwell) Limited, note 65 above, at [9]–[11]; Hebden v Forsey & Son, note 76 above, at 610; Marshall v Harland and Wolff Limited, note 63 above, at [8].

79.

Marshall v Harland and Wolff Limited, note 63 above, at [8]. The duration of the term of employment is discussed in 11.46.

80.

Loates v Maple, note 77 above, at 291 and Marshall v Harland and Wolff Limited, note 63 above, at [8].

81.

The Wenjiang (No 2) [1983] 1 Lloyd’s LR 400 at 408.

82.

Hare v Murphy Brothers Limited, note 76 above, at 343; Pritchard v Dinorwic Slate Quarries Limited, note 15 above, at 104 and Marshall v Harland and Wolff Limited, note 63 above, at [8].

83.

Marshall v Harland and Wolff Limited, note 63 above, at [8]; Scarr v Goodyear & Sons Limited, note 76 above, at [14].

84.

Hart v AR Marshall & Sons (Bulwell) Limited, note 65 above, at [5]–[9] and the case note of H Collins, ‘Frustration of the Contract of Employment’ (1977) 16 ILJ 185 at 186–7 and Hebden v Forsey & Son, note 76 above, at 609–10.

85.

Hilton Hotels of Australia Limited v Pasovska, note 29 above.

86.

Finch v Sayers, note 42 above. See also Giancaspro v SHRM (Australia) Pty Ltd, note 29 above, at [37]–[46]; Cachia v State Authorities Superannuation Board, note 29 above, at 274; Ridge v Director General, Department of Culture and the Arts, note 63 above, at 262–3.

87.

Hilton Hotels of Australia Limited v Pasovska, note 29 above, at [40], [48] and [53]. See, however, the dicta in various Full Bench decisions of the AIRC to a contrary effect referred to in note 129 below.

88.

FC Sheperd & Co Ltd v Jerrom [1986] 3 All ER 589 at 597 and 606; [1986] IRLR 358 at [26] and [71]; Chakki v United Yeast Co Limited, note 78 above, at 448–9; cf Norris v Southampton City Council [1982] IRLR 141 at [4].

89.

Hare v Murphy Brothers Limited, note 76 above, at 343; FC Sheperd & Co Ltd v Jerrom, note 88 above, All ER at 597, 604 and 606; IRLR at [22], [60] and [71] and Harrington v Kent County Council [1980] IRLR 353 at [17].

90.

Nordman v Rayner (1916) 33 TLR 87; cf Unger v Preston Corporation, note 34 above (contract frustrated by nine-month incarceration); Harrington v Kent County Council, note 89 above (contract frustrated by 12-month incarceration); FC Sheperd & Co Ltd v Jerrom, note 88 above (contract frustrated by 6–24 month incarceration).

91.

Chakki v United Yeast Co Limited, note 78 above, at 449.

92.

Chakki v United Yeast Co Limited, note 78 above, noted in J McMullen, ‘Frustration of the contract of employment’ (1983) 12 ILJ 46. See also Re Long Service Leave (Coal Miners) Award (1962) 4 AILR at 74; Re Long Service Leave (Miners) Award (1962) 17 IIB 1048; Nordman v Rayner, note 90 above, at 88 as further explained in Marshall v Glanvill, note 16 above, at 91; cf Harrington v Kent County Council, note 89 above, at [17].

93.

See the cases discussed in A McNair, ‘The Frustration of Contracts by War’ (1940) 56 LQR 173 at 186–8. See also Schostall v Johnson (1919) 36 TLR 75 at 76 and The Chrysalis [1983] 1 Lloyd’s LR 503 at 508–12.

94.

Unger v Preston Corporation, note 34 above; Horlock v Beal, note 1 above; Morgan v Manser [1948] 1 KB 184 at 186 and Nordman v Rayner, note 90 above, at 88.

95.

Burton v Pinkerton (1867) LR 2 Ex 340; Austin Friars Steam Shipping Company v Strack [1905] 2 KB 315 and Palace Shipping Company Ltd v Caine [1907] AC 386 at 391, 393 and 396; Robson v Sykes [1938] 2 All ER 612 at 614–6.

96.

See, for example, The Governor Raffles (1815) 165 ER 1400; 2 Dods 14.

97.

Marshall v Glanvill, note 16 above, at 91.

98.

See, for example, Morgan v Manser, note 94 above.

99.

Marshall v Glanvill, note 16 above, at 91 and Horlock v Beal, note 1 above, at 502.

100. Nordman v Rayner, note 90 above, at 88 and Marshall v Glanvill, note 16 above, at 92; cf the internment in Unger v Preston Corporation, note 34 above. 101. Farrow v Wilson, note 8 above, at 746 and Stubbs v The Holywell Railway Company (1867) LR 2 Exch 311 at 313, 314 and 315. 102. Farrow v Wilson, note 8 above, at 746; Phillips v Alhambra Palace Company [1901] 1 QB 59 at 63–4 and Graves v Cohen, note 35 above, at 123–4. 103. On servile incidents and personal service, see 6.44 and 9.53–9.54. 104. On the dissolution of a partnership other than by death, see 13.30. 105. Rose v Federal Commissioner of Taxation (1951) 84 CLR 118 at 124. 106. See Partnership Act 1963 (ACT) s 38; Partnership Act 1892 (NSW) s 33; Partnership Act 1891 (Qld) s 36; Partnership Act (SA) s 33; Partnership Act 1891 (Tas) s 38; Partnership Act 1957

(Vic) s 37 and Partnership Act 1895 (WA) s 46; see 13.30–13.32. 107. These two matters may be two aspects of the one problem: see generally R Banks, Lindley and Banks on Partnership, 18th ed, Sweet & Maxwell, London, 2002, pp 48–9. 108. Tasker v Shepherd (1861) 6 H & N 575; 158 ER 237 and Friend v Young [1897] 2 Ch 421 at 429–30. 109. Briggs v Oates [1991] 1 All ER 407 at 412 and 416; [1990] ICR 473 at 479 and 482; Brace v Calder [1895] 2 QB 253 at 261 and 263; Tunstall v Condon [1980] ICR 786 at 791. The same approach would apply on the death of one of the partners. The former two cases also both discuss the possible implication of a relevant term. 110. Stevens v Benning (1854) 1 K & J 168 at 174–5; 69 ER 415. 111. Robson v Drummond (1831) 2 B & Ad 303 at 307 and 308. 112. Phillips v Alhambra Palace Company, note 102 above, at 63–4. 113. A yellow-dog contract is an employment contract that contains the following provisions: ‘first, a representation by the employee that he is not a member of a labour union; second, a promise by the employee not to join a labour union; third, a promise by the employee that, on joining a labour union, he will quit his employment’: Corpus Juris Secundum, Vol 51, at [217] and the cases cited therein. Yellow-dog contracts were declared illegal in the United States by the NorrisLaGuardia Act of 1932. They are probably contrary to ss 340 and 346 of the Fair Work Act 2009 (Cth) and are often unreasonable restraints of trade: Reid v Republic of Nauru ((SC)Vic, Nathan J, 4905 of 1990, 21 February 1994, unreported) at 102. 114. Ziger v Shiffer and Hillman & Co Limited [1933] 2 DLR 69. 115. One of the few cases on this point is Clark v Local Government Training Authority SA Incorporated [2001] SASC 273. 116. See, for example, Poole v Shanks (1992) 39 CCEL 316. 117. See the approach in Canada discussed in St John v TNT Canada Inc (1991) 56 BCLR (2d) 311 and O’Connell v Harkema Express Lines Limited (1982) 141 DLR (3d) 291 at 304. 118. N Palmer, ‘The Private Law Effects of Industrial Action’ in E McKendrick (ed), Force Majeure and Frustration of Contract, 2nd ed, Lloyd’s of London Press, London, 1995, p 188. 119. See 12.8–12.9. 120. Clark v Local Government Training Authority SA Incorporated, note 115 above, at [113]–[118]. See 13.15 on the effect of a winding up order. 121. Krell v Henry, note 6 above. 122. See M Freedland, The Contract of Employment, Clarendon Press, Oxford, 1976, p 316 and see 12.10–12.12. 123. On a similar basis, see Ockerby & Co Limited v Watson, note 20 above. 124. A similar definition applies in the case of redundancies under s 136 of the Employment Rights Act 1996 (UK). 125. Contrast with s 4 of the Long Service Leave Act 1955 (NSW) considered in Hilton Hotels of Australia Limited v Pasovska, note 29 above, at [45]. 126. See 12.47. 127. Davis Contractors Ltd v Fareham UDC, note 10 above, AC at 723; All ER at 155.

128. Victoria v The Commonwealth (1996) 187 CLR 416 at 520; 138 ALR 129 at 173. 129. See, for example, Smith v Moore Paragon Australia Ltd, note 67 above, at 463–5; Taylor v Metro Velda Pty Ltd (AIRC, Williams SDP, Leary DP and Eames C, Print PR909167, 21 September 2001) at [13]; Kowalski v Mitsubishi Motors Australia Ltd (AIRC, Watson and Cartwright SDPP, Whelan C, Print PR914818, 1 March 2002) at [18]; Foster v Copper Mines of Tasmania Pty Ltd, note 68 above, at 157–8. 130. E Peel, Treitel’s Law of Contract, note 9 above, p 960. 131. Joseph Constantine Steamship Line Limited v Imperial Smelting Corporation Limited [1942] AC 154 at 163; [1941] 2 All ER 165 at 170–1; see also Ockerby & Co Limited v Watson, note 20 above, at 433–4. 132. Marshall v Harland and Wolff Limited, note 63 above, at [8]. 133. G Treitel, Frustration and Force Majeure, Sweet & Maxwell, London, 1994, pp 416–7. 134. See, for example, Metropolitan Water Board v Dick, Kerr and Company Limited [1918] AC 119 where temporary interruption of the work was contemplated by the contract, but an indefinite interruption was not, and Codelfa Constructions Pty Ltd v State Rail Authority of New South Wales, note 10 above, where the possibility of a limitation to the hours of work was contemplated, but an injunction preventing work on one shift per day was not. 135. See, for example, Simmons Ltd v Hay, note 1 above, at 362 and Notcutt v Universal Equipment Co (London) Limited, note 11 above, at [20]. 136. See Finch v Sayers, note 42 above, at 549. 137. D Yates, ‘Drafting Force Majeure and Related Clauses’ (1991) 3 JCL 186 at 189–95 and E McKendrick, ‘Force Majeure and Frustration — Their Relationship and a Comparative Assessment’ in E McKendrick (ed), Force Majeure and Frustration of Contract, note 118 above, p 34. 138. Such clauses are strictly construed contra proferentem: see D Yates, ‘Drafting Force Majeure and Related Clauses’, note 137 above. 139. Villella v MFI Furniture Centres Limited [1999] IRLR 468 at [48]; Codelfa Constructions Pty Ltd v State Rail Authority of New South Wales, note 10 above, CLR at 359; ALR at 381; GryfLowczowski v Hinchingbrooke Healthcare NHS Trust, note 2 above, at 443–4; Ross v IceTV, note 30 above, at [76]–[78]. 140. See J Carter et al, Contract Law in Australia, note 9 above, at [33.40]. 141. O’Connell v Harkema Express Lines Limited, note 117 above, at 304; cf St John v TNT Canada Inc, note 117 above. 142. Simmons Ltd v Hay, note 1 above, at 362–3 and Notcutt v Universal Equipment Co (London) Limited, note 11 above, at [20]; see also WJ Tatem Limited v Gamboa [1939] 1 KB 132 and Marshall v Harland and Wolff Limited, note 63 above, at [15] where the clause foresaw the possibility of unpaid sick leave. 143. Robinson v Davison, note 36 above, at 274–5 and at 277 and 278. 144. Storey v Fulham Steel Works Company, note 47 above, at 307 (aff’d 24 TLR 89). 145. Codelfa Constructions Pty Ltd v State Rail Authority of New South Wales, note 10 above, CLR at 359; ALR at 381; Denny, Mott and Dickson Limited v James B Fraser and Co Limited [1944] AC 265 at 274–5; Hilton Hotels of Australia Limited v Pasovska, note 29 above, at [38].

146. Tarnesby v Kensington and Chelsea and Westminster Area Health Authority (Teaching) [1981] IRLR 369 at [16] per Lord Lowry; cf Pritchard v Dinorwic Slate Quarries Limited, note 15 above. 147. Villella v MFI Furniture Centres Limited, note 139 above, at [48]; Cachia v State Authorities Superannuation Board, note 29 above, at 274 and G McCarry, ‘Recent Cases — Notcutt v Universal Equipment Co (London) Ltd’ (1987) 61 ALJ 35 at 35–6; see also Balfours Bakery v Cooper [2011] FWAFB 803 at [11]. Section 352 of the Fair Work Act prohibits an employer dismissing an employee because the employee is temporarily absent from work because of illness or injury, as defined in reg 3.01 of the Fair Work Regulations 2009 (Cth). Note also Giancaspro v SHRM (Australia) Pty Ltd, note 29 above, at [37]–[46]. 148. FC Sheperd & Co Ltd v Jerrom, note 88 above, All ER at 595–6 and 601–2; IRLR at [20]–[24], [52]–[57]; The Super Servant Two, note 2 above, at 8; Gryf-Lowczowski v Hinchingbrooke Healthcare NHS Trust, note 2 above, at 444–5; J Swanton, ‘The Concept of Self-Induced Frustration’ (1990) 2 JCL 206 and G Treitel, Frustration and Force Majeure, note 133 above, Ch 14. 149. Cheall v Association of Professional Executive Clerical and Computer Staff [1983] 2 AC 180 at 188–9. 150. The Super Servant Two, note 2 above, at 10; Paal Wilson & Co v Partenreederei [1983] 1 AC 854 at 909–10; [1983] 1 All ER 34 at 44 and Joseph Constantine Steamship Line Limited v Imperial Smelting Corporation Limited [1942] AC 154 at 166. 151. See the various formulations discussed in J Swanton, note 148 above, pp 206–7. 152. See The Super Servant Two, note 2 above, at 10 and the diverse obiter dicta on the topic in Joseph Constantine Steamship Line Limited v Imperial Smelting Corporation Limited, note 150 above, at 166–7, 179, 195–6, 202 and 205–6 and Hare v Murphy Brothers Limited, note 76 above, at 343. 153. The Super Servant Two, note 2 above, at 10 per Bingham LJ. See also Denmark Productions Limited v Boscobel Productions Limited [1969] 1 QB 699 at 724–5 and 736–7; [1968] 3 All ER 513 at 523 and 533 (soured personal relationship between various managers and members of The Kinks). 154. Mertens v Home Freeholds Co [1921] 2 KB 526 and Maritime National Fish Limited v Ocean Trawlers Limited [1935] AC 524. 155. See FC Sheperd & Co Ltd v Jerrom, note 88 above, All ER at 596–7 and 601–2; IRLR at [24]– [25] and [52]–[54]; Penrith District Rugby League Football Club Limited v Fittler (SC(NSW), Santow J, 8 February 1996, unreported) at [165]–[170]. 156. See the detailed discussion of these issues in J Swanton, note 148, pp 220–4; cf Penrith District Rugby League Football Club Limited v Fittler, note 155 above, at [165]ff. 157. Gryf-Lowczowski v Hinchingbrooke Healthcare NHS Trust, note 2 above, at 445. 158. Wells v Newfoundland, note 17 above, at [52]; see also M Spry, ‘Employment Contracts and the Abolition of Public Sector Offices’ (1999) 12 AJLL 22. The extent to which a party is responsible for the acts of a government was also discussed in an employment context in O’Neil v Armstrong, Mitchell & Co [1895] 2 QB 418. See also C Czarnickow Limited v Centrala Handlu Zagranicznego Rolimpex [1979] AC 351 at 370; [1978] 2 All ER 1043 at 1052 and The Playa Larga [1983] 2 Lloyd’s LR 171 at 192. 159. Joseph Constantine Steamship Line Limited v Imperial Smelting Corporation Limited, note 150 above, at 166–7 and Hare v Murphy Brothers Limited, note 76 above, at 343.

160. K_____ v Raschen (1878) 38 LT 38 at 40. See also McDougal v Van Allen Company Limited [1909] 19 OTR 351 at 357–8 in which Riddell J of the High Court of Justice of Ontario concluded that the sickness caused by an addiction to cocaine (‘a seductive drug which sapped his powers of self-control’) was an act of God, even if brought about by the ‘folly’ of the employee. 161. There are some exceptions such as Davis Contractors Ltd v Fareham UDC, note 10 above; see also J Stannard, ‘Frustrating Delay’ (1983) 46 MLR 738 at 743–4. 162. See Hare v Murphy Brothers Limited, note 76 above; Harrington v Kent County Council, note 89 above; Chakki v United Yeast Co Limited, note 78 above; Norris v Southampton City Council, note 88 above, noted in R Gillis, ‘Dismissal and the Doctrine of Frustration’ (1982) 11 ILJ 127; FC Sheperd & Co Ltd v Jerrom, note 88 above. 163. FC Sheperd & Co Ltd v Jerrom, note 88 above. 164. FC Sheperd & Co Ltd v Jerrom, note 88 above, All ER at 596–7; IRLR at [24]–[25]. 165. FC Sheperd & Co Ltd v Jerrom, note 88 above, All ER at 601–2; IRLR at [52]–[57]. See also the analysis of this judgment and its implications in J Swanton, note 148 above, pp 222–4. 166. FC Sheperd & Co Ltd v Jerrom, note 88 above, All ER at 606–8; IRLR at [71]–[80]. 167. Converform (Darwen) Limited v Bell [1981] IRLR 195 at [8] per Browne-Wilkinson J in which the contract was not frustrated by the likelihood that the employee would suffer a second heart attack; cf Condor v The Barron Knights Limited, note 74 above, at 91 where a mental breakdown requiring hospitalisation of the employee was ‘a virtual certainty’. 168. FC Sheperd & Co Ltd v Jerrom, note 88 above, All ER at 597, 604 and 606; IRLR at [22], [60] and [71] and Harrington v Kent County Council, note 89 above, at [17]. 169. Harrington v Kent County Council, note 89 above, at [17]. 170. Horlock v Beal, note 1 above, at 492. 171. The Egg Stores (Stamford Hill) Limited v Leibovici, note 75 above, at [10]. 172. Chakki v United Yeast Co Limited, note 78 above, at 449. 173. The Egg Stores (Stamford Hill) Limited v Leibovici, note 75 above, at [10]. 174. Notcutt v Universal Equipment Co (London) Limited, note 11 above, at [21] and [24]. See also Chapman v Taylor [2004] NSWCA 456 concerning a builder who suffered an injury that caused him to be in a coma for five weeks and unable to undertake work for five months. 175. Marshall v Harland and Wolff Limited, note 63 above, at [14] and GF Sharp & Co Limited v McMillan [1998] IRLR 632 at [16]. 176. The Egg Stores (Stamford Hill) Limited v Leibovici, note 75 above, at [10]; J Swanton, ‘Discharge of Contracts by Frustration: Codelfa Construction Pty Ltd v State Rail Authority of New South Wales’ (1983) 57 ALJ 201 at 202–3 and Hirji Mulji v Cheong Yue Steamship Company Limited, note 10 above, at 509. 177. Atlantic Maritime Co Inc v Gibbon [1954] 1 QB 88 at 113; Penrith District Rugby League Football Club Limited v Fittler, note 155 above, at [173]. 178. Loates v Maple, note 77 above, at 29. 179. See J Stannard, ‘Frustrating Delay’, note 161 above, at 744–6. 180. See, for example, Poussard v Spiers, note 38 above, and the discussion of the issue by Wright J in dicta in Loates v Maple, note 77 above, at 29.

181. See, for example, Maxwell v Walter Howard Designs Limited [1975] IRLR 77 and Yeager v RJ Hastings Agencies Limited, note 49 above (incapacitating mental illness of two years did not frustrate the employment) and Gryf-Lowczowski v Hinchingbrooke Healthcare NHS Trust, note 2 above, at 441–2. 182. Pastachak v Bienfait (Town) [1996] 6 WWR 616 at [62]–[66]. See also MacLellan v HB Contracting Limited (1990) 32 CCEL 103; Yeager v RJ Hastings Agencies Limited, note 49 above, at 243–4 and Dartmouth Ferry Commission v Marks, note 57 above, at 375. 183. Denny, Mott and Dickson Limited v James B Fraser and Co Limited, note 145 above, at 274; Hirji Mulji v Cheong Yue Steamship Company Limited, note 10 above, at 505–9 and The Egg Stores (Stamford Hill) Limited v Leibovici, note 75 above, at [5]–[7]; cf Penrith District Rugby League Football Club Limited v Fittler (SC(NSW), Santow J, 8 February 1996, unreported) at [165]ff. 184. Marshall v Harland and Wolff Limited, note 63 above, at [14], disapproving Thomas v John Drake & Co [1971] ITR 146. 185. The Egg Stores (Stamford Hill) Limited v Leibovici, note 75 above, at [5] per Phillips J. 186. Hirji Mulji v Cheong Yue Steamship Company Limited, note 10 above, at 509 per Lord Sumner. See also Morgan v Manser, note 94 above, at 191–2. 187. The Wenjiang (No 2), note 81 above, at 408 per Bingham J. 188. Finch v Sayers, note 42 above, at 558; Walsh v The Police Association (2000) 140 IR 58; [2000] VSC 292; Jones v Wagon Repairs Limited [1968] ITR 361; The Egg Stores (Stamford Hill) Limited v Leibovici, note 75 above, at [9] and Marshall v Harland and Wolff Limited, note 63 above, at [13]. 189. Re Long Service Leave (Coal Miners) Award, note 92 above, at 74. Compare also the apparent conflict between the strict approach taken in GF Sharp & Co Limited v McMillan, note 175 above, at [20] with the commonsense approach taken in City of Subiaco v Heytesbury Properties Pty Ltd [2001] WACSA 140 at [75]–[77] and Black Clawson International Limited v Papierwerke Waldhof-Aschaffenburg AG [1981] 2 Lloyd’s Rep 446 at 457. 190. See, for example, Hart v AR Marshall & Sons (Bulwell) Limited, note 65 above, at [5]–[9] and [12]–[13]; H Collins, ‘Frustration of the Contract of Employment’, note 84 above, at 186–7; Hebden v Forsey & Son, note 76 above, at 609–10. 191. See, for example, Notcutt v Universal Equipment Co (London) Limited, note 11 above, at [24] and Scarr v Goodyear & Sons Limited, note 76 above; see also Morgan v Manser, note 94 above. 192. See Beale v Thompson, note 43 above, at 560 and at 565–6 concerning the application of this principle to servants and Horlock v Beal, note 1 above, at 498–500. 193. See J Carter et al, Contract Law in Australia, note 9 above, at [34.03]; GF Sharp & Co Limited v McMillan, note 175 above, at [20] and Scarr v Goodyear & Sons Limited, note 76 above, at [15]. 194. Marshall v Harland and Wolff Limited, note 63 above, at [16] and Hebden v Forsey & Son, note 76 above, at 609. 195. Joseph Constantine Steamship Line Limited v Imperial Smelting Corporation Limited, note 150 above, at 172–3, 177, 192–3 and 204; J Swanton, note 148 above, pp 224–6. 196. The Torrenia [1983] 2 Lloyd’s Rep 210 at 216–7; Joseph Constantine Steamship Line Limited v Imperial Smelting Corporation Limited, note 150 above, at 192. 197. FC Sheperd & Co Ltd v Jerrom, note 88 above, All ER at 597; IRLR at [25].

198. Graves v Cohen, note 35 above, at 124. 199. BP Exploration Co (Libya) Limited v Hunt (No 2) [1979] 1 WLR 783 at 829; [1982] 1 All ER 925 (aff’d [1983] 2 AC 352; [1982] 1 All ER 925 at 961) and Bilbee v Husse and Co (1889) 5 TLR 677. 200. On terms that survive the termination of the contract, see 10.76. 201. Re The Continental C and G Rubber Company Proprietary Limited (1919) 27 CLR 195 at 201 per Knox CJ and Barton J; Robinson v Davison, note 36 above, at 274 and Simmons Limited v Hay, note 1 above, at 363. 202. Farrow v Wilson, note 8 above, at 746. 203. Hirsch v The Zinc Corporation Limited, note 8 above, at 45 and Whim Well Copper Mines Limited v Pratt (1910) 12 WAR 166. 204. Hirji Mulji v Cheong Yue Steamship Company Limited, note 10 above, at 510 and Joseph Constantine Steamship Line Limited v Imperial Smelting Corporation Limited, note 150 above, at 187. 205. Stubbs v The Holywell Railway Company, note 101 above. 206. Graves v Cohen, note 35 above, at 124; Stubbs v The Holywell Railway Company, note 101 above, at 314; Appleby v Myers (1867) LR 2 CP 561; Wilson v Harper [1908] 2 Ch 370 at 371–2. 207. Marshall v Glanvill, note 16 above, at 92. 208. GF Sharp & Co Limited v McMillan, note 175 above, at [17] per Lord Johnston. 209. Winchup v Hughes (1871) LR 6 CP 78 at 81 and 85–6. 210. Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Limited [1943] AC 32 at 48 and 72. See also the discussion in P Heffey et al, Principles of Contract Law, Law Book Company, Sydney, 2002, pp 284–5. 211. There is a more extensive examination of this issue in 9.9 and 9.29. 212. See J Carter et al, Contract Law in Australia, note 9 above, at [34.10] and K Mason et al, Mason and Carter’s Restitution Law in Australia, 2nd ed, LexisNexis Butterworths, Australia, 2008 at [1236]–[1268]. 213. Frustrated Contracts Act 1978 (NSW); Frustrated Contracts Act 1954 (Vic); Frustrated Contracts Act 1988 (SA); Fair Trading Act 1999 (Vic) discussed further in J Carter et al, Contract Law in Australia, note 9 above, at [34.12]–[34.42]; A Stewart and J Carter, ‘Frustrated Contracts and Statutory Adjustment’ [1992] CLJ 66 and A Stewart, ‘The South Australian Frustrated Contracts Act’ (1992) 5 JCL 220; note also John Holland Group Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, note 17 above, at [27]–[32] (aff’d [2011] VSCA 396 at [25]). 214. See 9.30. 215. M Freedland, The Contract of Employment, note 122 above, p 307; G McCarry, ‘Recent Cases — Notcutt v Universal Equipment Co (London) Ltd’, note 147 above; R Gillis, ‘Dismissal and the Doctrine of Frustration’, note 162 above; J McMullen, ‘Frustration of the Contract of Employment and Statutory Labour Law’ (1986) 49 MLR 785 at 786–8; S Deakin and G Morris, Labour Law, 5th ed, Hart Publishing, Oxford, 2009, pp 418–9; Hilton Hotels of Australia Limited v Pasovska, note 29 above, at [38]–[45]; Chakki v United Yeast Co Limited, note 78 above, at 448; Harman v Flexible Lamps Limited [1980] IRLR 418 at [7]; The Egg Stores (Stamford Hill) Limited v Leibovici, note 75 above, at [9]; Finch v Sayers, note 42 above, at 547 and 558; Notcutt

v Universal Equipment Co (London) Limited, note 11 above, at [12]–[14]; Giancaspro v SHRM (Australia) Pty Ltd, note 29 above, at [37]–[46]; Cachia v State Authorities Superannuation Board, note 29 above, at 274. 216. Villella v MFI Furniture Centres Limited, note 139 above, at [48]. See also 12.31–12.35. 217. J Stone, Precedent and Law: Dynamics of Common Law Growth, Butterworths, Sydney, 1985, pp 67–8 and 144–5. 218. See Simmons Ltd v Hay, note 1 above, at 362 and Notcutt v Universal Equipment Co (London) Limited, note 11 above, at [20]. 219. Finch v Sayers, note 42 above, at 558 and Hilton Hotels of Australia Limited v Pasovska, note 29 above.

[page 787]

Chapter 13 Changes in the Employing Enterprise: Redundancy and External Administration Introduction Redundancy The concept of redundancy The contractual right to redundancy pay The statutory right to redundancy pay The right to consultation Insolvency and Changes in the Employer’s Identity Transfer of employment: the common law and statute Corporate insolvency and external administration Liability of liquidators, administrators and receivers Priority in insolvency and GEERS Personal insolvency, including bankruptcy Changes in the constitution of unincorporated employers and partnerships Death of a party

INTRODUCTION 13.1 This chapter considers the effect of various changes in the employing

enterprise. The first is redundancy, a somewhat elusive concept that ordinarily refers to a circumstance in which the job of the employee is no longer to be performed by any employee: see 13.3–13.7. Employers often [page 788] have redundancy policies under which employees are consulted about changes in the enterprise and granted redundancy pay. There is a common misconception that an employer’s practice of applying a redundancy policy generates a contractual right to its benefits. Whether the policy gives rise to enforceable contractual rights depends on whether there is an express or implied enforceable promise by the employer to grant those benefits: see 13.8. Under the Fair Work Act 2009 (Cth) employees are granted the right to redundancy pay: see 13.9. Employees and their unions are entitled to be consulted about certain changes in the enterprise: see 13.12. As discussed in 1.6, one of the distinguishing features of employment contracts is that they are personal. As a consequence, the identity of the parties to an employment contract is important. By way of comment it can be said that in many respects the common law focuses more on form than substance when considering issues associated with the change of the employer’s identity and has a rather narrow conception of what constitutes the identity of the employer. Under the common law an employer may not, without the employee’s consent, assign the obligation to serve from one entity to a related corporation, notwithstanding the fact that the shareholders, directors and managers may remain the same. In contrast, ordinarily, no breach occurs when all of the shares in the employer are sold, or all of the directors and managers replaced.1 The law seeks to uphold the personal nature of the contract by focusing on the stability of the legal identity of the parties. However, the law concerning the importance of a personal relationship between employer and employee, and the concomitant need for trust and confidence, was developed at a time when the relationship between master and servant almost invariably involved a close personal relationship. The advent of corporate employers has diminished the importance of this element of the employment relationship.2 The personal relationship that now exists is, in the overwhelming majority of

cases, the relationship between the employee and the human agents through which a corporation must perform its obligations. Under the common law these agents, but not the legal entity party to the contract, are able to be changed at the employer’s will without impinging on the personal nature of the contract. For corporations, the cloak of personality hides the mutability of its agents.3 13.2 In 13.13–13.14 there is a brief overview of the transfer of employment provisions applicable mainly to enterprise agreements under [page 789] the Fair Work Act. There is a more detailed discussion in 6.40–6.47 of the common law governing the transfer of assignment of the contract to a third party. Various forms of external administration of corporations that are usually associated with the company’s insolvency are addressed in 13.15–13.20. A company is insolvent when it cannot pay its debts as and when they fall due. A company that is insolvent may go into liquidation and be wound up. Liquidation is a statutory process governed by Pts 5.4–5.6 of the Corporations Act 2001 (Cth). Liquidation may be voluntary or pursuant to a court order. The purpose of a liquidation is to collect and realise the assets of a corporation, discharge its debts and liabilities and distribute the balance. There are two other types of external administration whose effect on employment contracts is examined below at 13.16–13.17. The appointment of receivers and managers is governed by Pt 5.2 of the Corporations Act. Voluntary administration and deeds of arrangement are statutory forms of administration governed by Pt 5.3A of the Corporations Act. A voluntary administration is usually initiated by the corporation. It places the control of the company in the hands of an administrator and provides a mechanism to reach an arrangement with its creditors. The effect on the employment contract of the appointment of an external administrator is considered in 13.15–13.17. The liability of external administrators to employees is examined in 13.18. When a company is wound up the assets of the company are realised and distributed in

accordance with certain priorities established by the Corporations Act. The priority given to amounts due or payable to employees is discussed in 13.21–13.25, which also examines the Commonwealth Government General Employee Entitlements and Redundancy Scheme (GEERS). A natural person who is insolvent may go into bankruptcy. Personal insolvency is governed by the Bankruptcy Act 1966 (Cth). Its effect on the employment contract is discussed in 13.26. The next type of restructuring considered are changes in the constitution of partnerships and unincorporated employers: see 13.30–13.32. Finally, the effect of the death of a party is noted in 13.33.

REDUNDANCY The concept of redundancy 13.3 Redundancy is not a term of art with a clearly defined and fixed meaning.4 Whether a position is redundant is of no significance under the [page 790] common law. The concept of redundancy is commonly used in contracts, statutes and industrial instruments to define a set of circumstances in which an employee is entitled to certain benefits, such as redundancy pay, the right to redeployment into a different position and consultation. Retrenchment usually describes the termination of the employment due to redundancy.5 The meaning of redundancy differs according to the terms used to define it in various contexts, the purpose of the term and the context in which it appears.6 Under s 119 of the Fair Work Act redundancy pay is payable when ‘the employee’s employment is terminated … because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour’. This definition is based on the meaning of redundancy in the Termination, Change and Redundancy Case (the TCR Case).7 There are some differences between redundancy so defined and the concept of redundancy commonly used in other contractual and statutory contexts.8 Given the broad array of definitions

of redundancy under contracts and statutes it is not possible to state a definition that will apply in all contexts. Subject to the proviso that the meaning of redundancy is always subject to the terms used to define it, the following points can be drawn from the authorities. [page 791] 13.4 A redundancy occurs when the job of the employee is no longer to be performed by any employee.9 It is the job that is redundant, not the employee. The job is the collection of functions, duties and responsibilities that the employee is entrusted to perform.10 To ascertain if the job is no longer to be performed by any employee it is necessary to compare the work being performed before and after the alleged redundancy.11 A redundancy does not simply mean a reorganisation in work that leads to a termination.12 The focus is on the change to the job, not the identity of the employer or the employee.13 The job referred to may be the job with the employer, or it may be a job in a particular business. If the latter, then a redundancy may not arise when there is merely a change in the identity of the employer conducting the business.14 In some contexts a change in the remuneration that attaches to the job may be relevant in determining if the job is redundant.15 The abolition of the employee’s job will be a redundancy;16 this is ordinarily a sufficient but not a necessary condition that must be met in determining if a job is redundant. Some redundancy clauses make the abolition of the job a necessary condition by defining redundancy exclusively by reference to whether the job or role has ceased to exist. In Fosters Group Limited v Wing the employee was the general [page 792] manager in Shanghai. He was entitled to redundancy pay if his role no longer existed. He had committed some acts of misconduct and the employer had lost trust in him. To assuage his feelings the employer told the employee the decision to terminate was a cost cutting measure. The employee claimed his

job was made redundant. After the termination the employer appointed an acting general manager in Shanghai, the essential parts of the employee’s work were performed by another and the employer searched for a replacement to fill the role of general manager in Shanghai. The court concluded that the role did not cease to exist.17 13.5 A redundancy may occur when the functions, duties and responsibilities of the employee are redistributed among other employees.18 To determine if such a redundancy has occurred requires a comparison of the work and the place in the enterprise of the dismissed employee with the work and status of the employees who now perform the work.19 When a job is redundant in this sense then the employee, after the redistribution, has no duties left to discharge and the employee is surplus to the requirements of the business.20 Under some redundancy schemes an entitlement to redundancy pay does not arise when an employee can be redeployed to a suitable position or acquires, through the employer’s efforts, suitable employment elsewhere. Under s 120 of the Fair Work Act an employer can apply to FWA to reduce the amount of redundancy pay where the employer obtains ‘other acceptable employment’ for the employee.21 In the absence of such an express clause in a contract or statute, an employee’s job may [page 793] be redundant even when he or she can be redeployed or has found work elsewhere.22 13.6 Section 119(1) of the Fair Work Act states that redundancy pay is payable when the employer ‘no longer requires’ the job to be performed by anyone. Other definitions of redundancy refer to the ‘desire’ or ‘wish’ of the employer to no longer have the job performed by anyone.23 The reference to the requirement, desire or wish is not a reference to the subjective intention of the employer.24 In Short v FW Hercus the Federal Court considered the standard TCR clause that referred to a decision that the employer ‘no longer wishes’ the job the employee has been doing to be done by anyone. Burchett J stated:

[The] clause is not made conditional upon the employer wishing to retrench an employee. The clause simply postulates the cessation of the employer’s wish to have the particular job done by anyone. That may be because some delightful alternative has enticed the employer; because the job has just come to an end; because of the employer’s insolvency; or for any one of a number of other reasons. The clause does not say that the employer must be happy about his decision; only that he must have made it.25

The scheme of the Fair Work Act governing the transfer of employment is discussed in 13.13–13.14. Section 122(2) provides that an employee is not entitled to redundancy pay under s 119 from the first employer if there is a transfer of employment and, by virtue of s 22(5), the service of the employee with the first employer counts as service with the second employer. Whether an entitlement to redundancy pay arises under an industrial instrument or contract in similar circumstances will depend on the terms of the agreement. In Amcor Ltd v CFMEU the certified agreement provided that an entitlement to redundancy pay arose if ‘a position (became) redundant and an employee subsequently (was) retrenched’. The employees were employed by Amcor, a company that wholly owned Paper Australia. The employees performed work for Paper Australia who had agreed with Amcor to meet Amcor’s obligations as employer. As a result of a demerger, Amcor [page 794] terminated the employment of the employees who all agreed to commence work for Paper Australia on identical conditions, performing identical work and with full continuity of employment. The High Court held that the position of the employees did not become redundant within the meaning of the agreement, notwithstanding the change in identity of the employer.26 In reaching this conclusion the court relied on the scheme of the Act that required the transfer of the first employer’s obligations to its successor. 13.7 The dominant purpose of redundancy pay is ordinarily to provide a payment as compensation for the loss of non-transferable credits and entitlements that have been built up through length of service, such as sick leave and long service leave, and for the inconvenience and hardship imposed by the termination of employment through no fault of the employee.27 In 14.128 there is a discussion of the extent to which redundancy pay provided

pursuant to an entitlement, or on an ex gratia basis, goes to reduce a wrongful dismissal damages award. A requirement to make a redundancy payment is ordinarily separate from and additional to a requirement to provide notice to the employee. The redundancy payments in s 119 of the Fair Work Act are a minima; the parties can agree on additional payments.28

The contractual right to redundancy pay 13.8 A contractual right to redundancy pay can arise from an express or implied term. It is often mistakenly thought that a right to redundancy pay will arise because the employer has adopted a practice of applying a written or unwritten redundancy policy to many of its employees. The practice of the employer, in itself, will not give rise to a right to redundancy entitlements. As the Privy Council has advised: … the fact that the [employer] applied the agreement to the [employee] is equally consistent with the view that it did so, not because it was bound contractually to apply it to him, but because as a matter of policy it deemed it expedient to do so.29

[page 795] When it is alleged that an express term creates the right to redundancy pay the employee must prove that the term was incorporated by signature, by notice,30 by reference31 or by a course of dealing.32 If the term is said to be implied, the appropriate tests must be met. There is no term implied in law creating the right to redundancy pay.33 The tests applied for the implication of a term in fact often prove insurmountable when applied to an entitlement to redundancy pay.34 It is almost inconceivable to conjure a fact scenario in which a term governing redundancy pay will meet the tests for the implication of term by custom: see 5.66.

The statutory right to redundancy pay 13.9 Sections 119 to 122 of the Fair Work Act grant some national system employees the right to a minimum amount of redundancy pay. The entitlements in those provisions largely reflect those established in 1983 by

the former Australian Conciliation and Arbitration Commission in the Termination, Change and Redundancy Case, as varied by the 2004 Redundancy Case.35 The amount of redundancy pay to which national system employees are entitled is set out in the following scale: Employee’s period of continuous service At least 1 year but less than 2 years At least 2 years but less than 3 years At least 3 years but less than 4 years At least 4 years but less than 5 years At least 5 years but less than 6 years

Redundancy pay period 4 weeks 6 weeks 7 weeks 8 weeks 10 weeks [page 796]

At least 6 years but less than 7 years At least 7 years but less than 8 years At least 8 years but less than 9 years At least 9 years but less than 10 years At least 10 years

11 weeks 13 weeks 14 weeks 16 weeks 12 weeks

13.10 The entitlement to redundancy pay arises when one of two conditions are met. First, the employee’s employment is terminated at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour.36 Second, the entitlement arises when the employee’s employment is terminated because of the insolvency or bankruptcy of the employer.37 The calculation of redundancy pay under s 119 is by reference to the employee’s base rate of pay, a concept that is defined in s 16 of the Fair Work Act. In short, it is the rate of pay payable for the ordinary hours of work but does not include incentive-based payments and bonuses, loading, monetary allowances, overtime or penalty rates or other separately

identifiable allowances.38 There is a separate formula for the calculation of the base rate of pay of pieceworkers.39 The ordinary hours of work of an employee are those stipulated in a modern award or enterprise agreement. For employees not covered by an award or enterprise agreement the hours are those agreed or, in the absence of agreement, 38 hours for a full-time employee or the usual weekly hours for a part-time employee.40 13.11 There are a range of employees who are excluded from the benefits of the statutory redundancy pay scheme. These include non-national system employees; employees employed for a specified period of time, for a specified task, or for a specified season; employees whose employment is terminated because of serious misconduct; casual employees; employees to whom a training agreement applies; apprentices; employees covered by an industry-specific redundancy scheme in a modern award; some employees covered by a redundancy scheme in an enterprise agreement; and employees [page 797] of small business employers.41 FWA may decide to reduce the amount of redundancy pay where the employer obtains other acceptable employment for the employee or cannot pay the amount of redundancy pay.42 Ordinarily, modern awards do not regulate redundancy pay. Under s 141 of the Fair Work Act a modern award may provide for an industry-specific redundancy scheme that was included as part of the award modernisation process. There were a few such schemes in existence in industries with atypical working arrangements.43 Enterprise agreements commonly include redundancy pay entitlements exceeding those in the Fair Work Act.

The right to consultation 13.12 A right of an employee to be consulted about a prospective redundancy may be found in one of three possible sources: statute, industrial instruments and, in rare cases, contract. The Fair Work Act imposes obligations on all national system employers to take steps to minimise the harmful effects of mass redundancies.44 These obligations arise when an employer has decided

to dismiss 15 or more employees for reasons of an economic, technological, structural or similar nature. The employer must notify the CEO of Centrelink of the decision: ss 530 and 785. The employer must also notify relevant unions, provide certain information about the proposed terminations and consult with them about measures to avert or minimise the proposed dismissals or their adverse effect: ss 531 and 786.45 FWA may make orders remedying the failure to notify or consult, but not an order reinstating dismissed employees, an [page 798] order for additional termination pay, an order requiring the withdrawal of notice, or an order requiring the disclosure of certain personal or confidential information: ss 532 and 787. A range of employees are excluded from the benefits of these provisions: ss 534 and 789. Industrial instruments, including most modern awards, usually contain consultation provisions about prospective redundancies in terms that reflect the standards set in the Termination, Change and Redundancy Cases.46 The obligations arise when an employer has made a definite decision to introduce major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees.47 The employer is obliged to notify the employees who may be affected by the proposed changes and their union. The employer must discuss with the employees affected and their representatives the introduction of the proposed changes, the effects the changes are likely to have on employees and measures to avert or mitigate the adverse effects of such changes on employees. The employer must give prompt consideration to matters raised. The discussions must commence as early as practicable after a definite decision has been made by the employer to make the proposed changes. The employer must provide in writing all relevant information about the changes, including the nature of the changes proposed, the expected effects of the changes on employees and any other matters likely to affect the employees concerned.

INSOLVENCY AND CHANGES IN THE EMPLOYER’S IDENTITY Transfer of employment: the common law and statute 13.13 The common law governing the transfer of employment is principally analysed by reference to the right to assign the obligation [page 799] to serve. Personal obligations under an employment contract cannot be assigned by an employer to a third party in the absence of consent to the assignment from the employee. Nor can an employee assign the obligation to perform work to another person in the absence of the employer’s consent. Rights created by employment contracts, other than personal rights, are assignable without the consent of the other party. Whether an obligation or a right is personal, and unassignable without consent, depends on the intention of the parties ascertained in the ordinary manner in contract. An obligation or right is likely to be personal if it is based on confidence reposed in the other party or calls for the exercise of particular skills. Other obligations and rights arising from employment may be assignable, such as the identity of the person to whom wages are paid and the identity of the person who pays the wages. The law governing assignment is examined in more detail in 6.40. A statute may assign some or all of the rights and obligations of a party to an employment contract to another person. This issue often arises when the business of public sector employers is privatised.48 There is a discussion of the approaches taken when resolving which member of a corporate group is the employer in 2.45. In 9.53 there is an examination of the law governing vicarious and personal performance of obligations under the contract. 13.14 Part 2-8 of the Fair Work Act deals with the transfer of employment from one national system employer to another national system employer. One of the purposes of this Part is to protect the entitlements of employees when

there is a transfer. The provisions apply when an employee ceases employment with the former employer and, within three months, commences employment with the new employer, performing the same or substantially the same work. There must also be a connection between the new and the old employer. That connection can consist of the outsourcing or insourcing of the work; it can also consist of the ownership or use by the new employer of assets previously related to or connected with the transferred work.49 Where there is a transfer, enterprise agreements (and some other industrial instruments) covering the transferring employee at the time of the transfer will cover the employee in the new engagement: s 313. As a broad generalisation, under the scheme in the former WR Act governing transmission of business the industrial instruments tended to follow the [page 800] work whereas under the new scheme the enterprise agreements tend to follow the worker. Under s 22(5) of the Fair Work Act if there is a transfer of employment then service with the first national system employer counts as service with the second national system employer in some circumstances.

Corporate insolvency and external administration Liquidation or winding up 13.15 The court may order that an insolvent company be wound up under s 459A of the Corporations Act 2001 (Cth) (referred to as ‘the Act’ in this section). A winding up order operates as notice to employees.50 It applies to all employees.51 The notice, which runs from the date of publication of the order,52 applies to employees engaged on indefinite term contracts as well as fixed term contracts.53 The employee may agree to continue in the service of the employer and the liquidator may wish for the employee to remain. In such cases it is sometimes said that the notice is waived, a concept discussed in more detail at 13.19.54 A resolution of a company to be voluntarily wound up does not always

have the effect of terminating the employment or the contract. Its effect depends on the surrounding circumstances.55 A voluntary winding up is [page 801] more likely to be a repudiation of the contract if the company is wound up because it is insolvent.56

Voluntary administration 13.16 Voluntary administration is a statutory form of administration that is governed by Pt 5.3A of the Act. A voluntary administration is usually initiated by the corporation. It places the control of the company in the hands of an administrator and provides a mechanism to reach an arrangement with the creditors. Its purpose is to maximise the chance that the company will continue in existence.57 The appointment of a voluntary administrator does not alter the identity of the employer. Nor does the appointment act as the giving of notice or a repudiation of contracts of employment, except to the extent that express terms of the employment contract govern the effect of such an appointment.58 During the administration the administrator may carry on the business.59 This includes performing and terminating employment contracts in a manner consistent with industrial instruments and other legislative provisions.60

Appointment of a receiver 13.17 A receiver may be appointed by the court or privately appointed. The generally accepted view is that the appointment of a receiver by the court terminates the employment contract.61 The receiver does not act as the agent for the employer.62 The alternative view is that whether the contract is terminated by the appointment depends on all of the [page 802]

circumstances.63 On this view the appointment will be less likely to terminate the contract when the appointment is to carry on the business and where it is contemplated that the receiver would ultimately be withdrawn, as where a receiver and manager is appointed to resolve a deadlock between directors.64 The appointment of a privately appointed receiver does not terminate the contract, though there are exceptions.65 A privately appointed receiver is the company’s agent.66 As such, employment continues with the employer after the appointment. The exceptions to the rule include where the appointment of the privately appointed receiver is accompanied by the sale of the company’s business, where the receiver enters into a new employment contract which is inconsistent with the employee’s former contract and where the continuation of the employment contract is inconsistent with the role of the receiver.67

Liability of liquidators, administrators and receivers 13.18 The employment may continue after appointment of an administrator, receiver or liquidator; however, they are not obliged to continue to employ the employees and are empowered to terminate their employment on behalf of the company.68 A dismissed employee of a company in voluntary administration or liquidation requires leave of the court to pursue an application for wrongful or unfair dismissal.69 [page 803] The priority of employee entitlements that accrue after the appointment is discussed in 13.21. An administrator or receiver70 is not personally liable for wages or other benefits payable to employees during the period of administration unless the administrator or receiver has adopted the contract.71 Nor, in the absence of an adoption, is an administrator or receiver liable for payments for leave or retrenchment benefits that accrue before, but become payable after, that appointment.72 When performing an extant contract the administrator does so as an agent for the employer, not as principal, and does not thereby acquire any personal liability: s 437B of the Act. Simply allowing the employee to

continue in employment after the appointment is not the adoption of the contract: … where a question arises in relation to a contract which had been entered into prior to the receiver going into possession, then the receiver is entitled to carry out such existing contracts and under those circumstances does not become personally liable on such contracts … Of course, the receiver can always undertake a personal liability, if the evidence establishes that he so intended … a personal liability would rest upon their receivers, if there was a novation … by merely carrying out the contract he does not accept personal liability.73

[page 804]

Continued employment after a winding up order 13.19 It is commonly said that a winding up order operates as ‘notice’ to employees and the liquidator may ‘waive’ the notice.74 A determination by the liquidator that an employee will continue in employment must be unequivocal and will not be lightly inferred from continued employment.75 For the reasons discussed below, it is probably inaccurate to describe a winding up order as notice or to describe the liquidator’s right to insist on continued performance of the contract as waiver. For employees engaged under contracts terminable by notice there will rarely be a practical difference between the characterisation of the winding up order as notice or as a repudiation. In either case the order will terminate the employment relationship, though not the employment contract, and the right of an employee to earn wages pursuant to the extant contract will cease with the order.76 Conceptually there is a difference between the two processes: the giving of notice is the exercise of a right under the contract; a repudiation is an act dehors the contract: see 10.11. 13.20 Courts and commentators have also said that when a liquidator unambiguously evinces an intention to continue the employment he or she ‘waives’ the notice, though recent authority suggests that the term is inapt.77 If the effect of a winding up order is the giving of notice, then it can only be withdrawn by the liquidator with the consent of the employee — a bilateral act.78 It is tentatively suggested that the better view is that the winding up order

is a repudiation.79 It operates in the same manner whether the contract is terminable by notice or is a fixed term contract. This is consistent with the authorities that a winding up order will terminate the employment even though the contract is not terminable by notice.80 The repudiation may be accepted by the employee (and will thereby terminate the contract) or the repudiation may be retracted unilaterally prior to [page 805] acceptance.81 What is usually termed the waiver of notice by a liquidator following a winding up order may be better understood as the retraction of a repudiation prior to acceptance. Alternatively, the original contract may be terminated and a new contract formed between the employee and the liquidator. Adoption is a bilateral process that will involve the termination of the contract with the employer and the formation of a new contract for which the liquidator is personally liable.

Priority in insolvency and GEERS 13.21 There are various statutory schemes governing different types of insolvency arrangements which ensure employees owed certain debts receive a higher priority in the payment of debts than other unsecured creditors.82 The discussion below focuses on the priorities applying in the winding up of a company. A principal function of a liquidator of an insolvent company is to collect and realise the assets of the company and distribute them in accordance with the priority of the payment of the company’s debts established by s 556 of the Act. Some debts owed to employees are ranked higher in order of priority of payment than other debts owed by the company. The available assets are distributed equally to all creditors of the same rank: if there are only sufficient funds to pay half of the redundancy entitlements of all employees, then each employee will receive half of the entitlement due. Ranking highest in the order of priority are expenses properly incurred by the relevant authority in the winding up: s 556(1)(a).83 This includes the

wages and salaries of employees that become payable by the company, or by the relevant authority personally, during the course of the administration or liquidation.84 Where the authority continues the [page 806] employment of the employee and after the relevant date an amount in respect of leave or a retrenchment amount becomes payable, the amount is a cost in the winding up.85 Priority is also given in ss 556(1)(e)–(h) to certain wages and superannuation contributions, amounts due in respect of injury compensation, amounts due by virtue of an industrial instrument in respect of leave entitlements and retrenchment payments. Some general points need to be mentioned about those provisions before considering specific issues relating to those priorities. 13.22 First, only employees of the company being wound up are entitled to obtain the benefits of the priorities established by s 556(1)(e)–(h).86 ‘Excluded employees’ are granted a limited priority. An excluded employee, defined in s 556(2), includes an employee who was a director, a director’s spouse, or a director’s relative at any time during the period of 12 months prior to the relevant date.87 Second, under s 556(1)(f) and (g) the amounts must be due on or before the relevant date. The notion of an amount due (or ‘payable’ in the case of s 556(1)(h)) requires that there be a legal liability to make the payment.88 The liability must exist at the relevant date, subject to the terms of s 558.89 The ‘relevant date’ may be many months before the employee ceases work.90 Section 558 operates to crystallise the entitlements on the relevant date and, to the extent that work continues thereafter for the liquidator, to apportion the entitlements between the costs of the winding up and other costs.91 In some cases the priority only applies to payments due or payable directly to the employee; in other cases the protection is broader.92 [page 807]

Priority for wages, injury compensation, leave and retrenchment payments 13.23 Subsection 556(1)(e) governs the priority with respect to wages, superannuation contributions and the superannuation guarantee charge. Wages is defined by s 9 of the Act.93 The priority in ss 556(1)(e) only applies in relation to payments for services rendered by the employee before the relevant date. Redundancy payments and payments in lieu of notice are usually not payments for ‘services rendered’ and are not wages for the purpose of the subsection.94 The services need not be rendered to the company being wound up.95 There is a specific scheme governing superannuation shortfalls by the employer.96 Subsection 556(1)(f) governs the priority regarding amounts due in respect of ‘injury compensation’, a term defined in s 9 to mean ‘any compensation payable under any law relating to workers’ compensation’. The liability for the compensation must arise before the relevant date, though the compensation may relate to future loss. Under s 563(2) there is a mechanism for determining the value of redeemable periodic payments. The priority will not apply where the liability to pay for compensation rests with an insurer.97 Subsection 556(1)(g) governs the priority regarding amounts due in respect of ‘leave of absence’.98 The amounts must be due because of an industrial instrument, a term defined in s 556(2) to mean ‘a contract of employment or a law, award, determination or agreement relating to terms or conditions of employment’. An arrangement that is not enforceable as a contract or pursuant to statute is not an industrial instrument.99 The amounts due must also be due ‘to, or in respect of, employees’. It has [page 808] been held that an obligation to pay a levy into an industry long service leave fund will often not be a payment in respect of long service leave and is not afforded priority.100 The priority under s 556(1)(g) applies to leave entitlements that crystallise at the relevant date. The entitlements that accrue after that date are afforded priority under s 556(1)(a).

Subsection 556(1)(h) governs the priority with respect to ‘retrenchment payments’, a term defined by s 556(2) to mean ‘an amount payable by the company to the employee by virtue of an industrial instrument, in respect of the termination of the employee’s employment by the company, whether the amount becomes payable before, on or after the relevant date’. Redundancy payments under an industrial instrument clearly meet this description; as do payments pursuant to express terms that require the employer to make a payment in lieu of notice or express terms requiring that the employee be engaged for a fixed term.101 13.24 The priority afforded by s 556(1)(h), if any, to wrongfully dismissed employees who are not entitled to a payment in lieu of notice is not clear. Ordinarily there is no implied right to make a payment in lieu of notice.102 In the absence of a right to payment in lieu a wrongfully dismissed employee is entitled to sue for damages for breach.103 A payment made by the employer on termination concerning notice is a payment on account of the employee’s claim for damages for breach of contract.104 The issue raised by s 556(1)(h) for such employees is whether damages for termination without notice are ‘an amount payable by the company to the employee by virtue of [a contract of employment] in respect of the termination’. It might be said that when an employee is entitled to damages the payment is made by virtue of a court order rather than by virtue of the contract and would not be entitled to the priority under s 556(1)(h). On the other hand, such an approach may be an unnecessarily narrow reading of the phrase ‘by virtue of’.105 [page 809]

The General Employee Entitlements and Redundancy Scheme 13.25 In 2001 the Commonwealth Government established the General Employee Entitlements and Redundancy Scheme (GEERS)106 along with a range of other legislative amendments dealing with companies who became insolvent and were unable to meet outstanding obligations to pay wages, leave and other entitlements.107 The GEERS provides for payments to be made to employees by the Commonwealth when a liquidator is appointed or the employer is subject to bankruptcy: GEERS OA cl 6. Claims can be made

under the scheme when there are insufficient funds or assets available to the employer to pay the employee’s entitlements and there is no other source of funds to make the payments. Employees (other than excluded employees) are eligible to make claims.108 The employment must have been terminated in the six months prior to the appointment of the insolvency practitioner, being a liquidator, administrator, trustee in bankruptcy, receiver or certain other practitioners: GEERS OA cl 7. An employee whose claim has been rejected can seek a review of the decision or appeal the decision to a departmental officer. Broadly speaking, the entitlements the employee can claim under the GEERS are those defined in s 556(1)(e)–(h) of the Act discussed in 13.22– 13.24, being unpaid wages, annual and long service leave, pay in lieu of notice and redundancy pay. There is a cap and some other limits on those amounts imposed by cl 8 of the GEER OA. Unpaid wages are only recoverable for the period commencing three months prior to the appointment of the insolvency practitioner. The amount of redundancy pay recoverable is capped at four weeks pay per year of service. Pay in lieu of notice is capped at five weeks. The entitlement cannot arise from an implied term to make a payment in lieu of notice. Entitlements do not include payments for reimbursements, bonuses or irregular commissions. The maximum annual wage at which the entitlements are calculated is [page 810] linked to the definition of high income employee in s 329 of the Fair Work Act which as at 1 May 2012 was $118,100.

Personal insolvency, including bankruptcy 13.26 A natural person who is insolvent may become a bankrupt either voluntarily by the presentation of his or her own debtor’s petition or involuntarily by order of the court (known as a sequestration order). The Bankruptcy Act 1966 (Cth) also makes provision for a debtor to enter into an agreement with all of his or her creditors so as to avoid bankruptcy by a Personal Insolvency Agreement under Pt X of the Bankruptcy Act 1966 (Cth)

or a Debt Agreement under Pt IX of the Bankruptcy Act 1966 (Cth). The bankruptcy of the employee does not terminate the contract, subject to any express terms of a contract or industrial instrument to the contrary. Contracts for senior employees often grant the employer a right to terminate the contract if the employee becomes bankrupt. These terms have effect in accordance with their tenor. It was formerly common for public sector statutes to require insolvent employees to notify the employer of the event or sometimes to cease holding office. Although some provisions of this nature survive, they are usually restricted to officers.109 By operation of s 206B of the Corporations Act an undischarged bankrupt is disqualified from managing a corporation.110 The bankruptcy of the employer does not per se terminate the employment of the bankrupt’s employees.111 However, a bankruptcy often presages a failure to pay wages when they fall due and may be a repudiation. 13.27 The next set of issues concerns the role and rights of a trustee in bankruptcy associated with the employment contract when an employee becomes bankrupt. The trustee cannot enter into a contract for the future performance of work by the bankrupt. Nor can the trustee hire out the employee or adopt an unexecuted or partially executed employment contract between the bankrupt and the employer.112 The general rule is that when an employee becomes a bankrupt the employee’s property immediately vests in the trustee in bankruptcy and is divisible among the employee’s creditors: Bankruptcy Act 1966 (Cth) [page 811] ss 58, 116. Further, property that is acquired by a bankrupt during his or her bankruptcy also vests in the trustee. Division 4B of Pt VI of the Act makes provision for a bankrupt to pay contributions to his or her trustee in respect of income derived during a contribution assessment period. While after-acquired property is defined widely enough to encompass income, it has been held that the comprehensive scheme embodied in Div 4B of Pt VI approaches a code for dealing with after-acquired income of the bankrupt so as to exclude the operation of the vesting provisions.113 The property that is divisible among

the creditors of the bankrupt does not include property, up to a value of about $3500, that is for the bankrupt employee’s use in earning income by personal exertion.114 13.28 Notwithstanding the general provisions vesting the bankrupt’s property in the trustee discussed in 13.27, bankrupt employees have the right to recover and retain damages or compensation for personal injury or personal wrong: Bankruptcy Act ss 60(4) and 116(2)(g). This exception applies where ‘the damages or part of them are to be estimated by immediate reference to pain felt by the bankrupt in respect of his mind, body or character and without reference to his rights of property’.115 This includes damages to the employee’s reputation and personal injury, but not damages which are calculated ‘by immediate reference to her rights of property and not the pain felt by her in respect of her body mind or character’.116 Most claims associated with the breach of an employment contract seek pecuniary damages that are not associated with personal injuries and personal wrongs. There are limitations, discussed in 14.77 and 14.86, to the recovery of damages for mental distress and loss of reputation that further limit the relevance of this exception to employees. 13.29 The standing of a bankrupt employee to sue for damages for wrongful dismissal or a breach of an employment contract turns on whether the right to sue is a chose in action that vests in the trustee or is exempt from those provisions because it is a claim in respect of income. In Geia v Palm Island Aboriginal Council the bankrupt brought proceedings for wrongful termination of his employment contract. The court held that an ‘action claiming damages or other sums on the basis [page 812] of wrongful dismissal, under a contract for personal service, the action not including any sum due before termination’ could not be brought by a bankrupt, but instead was a chose in action that vested in his trustee.117 This accords with the orthodox notion that damages for wrongful dismissal are a claim for loss after the termination of the employment: see 14.36–14.38. A bankrupt has standing to sue for damages in respect of personal services

that have been performed.118 Claims may be brought by a bankrupt for a personal wrong despite his or her bankruptcy, such as applications for reinstatement, or the retention of a licence to perform work, or injunctive relief to remedy a dismissal in breach of statute.119 Some statutory claims associated with the employment will be for a personal injury or wrong in the relevant sense, but not where the relief sought is effectively to recover damages for pecuniary loss.120

Changes in the constitution of unincorporated employers and partnerships 13.30 A partnership has no legal personality distinct from that of the individual partners. A change in the membership of a partnership is a change in the identity of the employer. The retirement of a partner, or the admission of a new partner, constitutes the dissolution of the old partnership and the formation of a new one, even when there is no general dissolution and winding up of the partnership.121 Employment with unincorporated associations raises similar, though more intractable, issues: see 3.69. When a partnership is dissolved the dissolution will be a repudiation of the contract by the employer, subject to two exceptions.122 The first [page 813] exception is that a dissolution arising from the death of a partner may in some cases be a frustration of the contract and not a repudiation.123 The second exception is that terms of the contract, express or implied, may provide that a contract of employment is not brought to an end by the dissolution of the partnership. Contracts with partnerships, particularly partnerships with only a few members, are often founded upon the assumption that there will be no change in membership of the partnership and clear express words are needed to displace that assumption.124 13.31 As to implied terms governing the effect of a change in the membership of a partnership, in Brace v Calder125 the court refused to imply

a term into an employment contract between an employee and four partners to the effect that the surviving partners would have the option of continuing the employment of the employee after the dissolution of the partnership. A court may be more prepared to imply such a term when there are many members of the partnership.126 It is important to consider the context in which the employment occurs in interpreting the express terms of the contract and determining whether a term should be implied. Where a particular partner performs a significant role in the creation and performance of the contract then it is more likely that the dissolution of the partnership arising from the retirement or death of that partner will be a repudiation. A different result may ensue when a ‘sleeping’ partner leaves a partnership.127

Repudiations caused by the dissolution of the partnership 13.32 Where there has been a repudiation arising from a dissolution of the partnership, then one of three scenarios commonly arise: first, the surviving partners (if any) may not offer continuing employment to the employee; second, the surviving partners may offer continuing employment to the employee and that offer is accepted; third, the [page 814] surviving partners may offer continuing employment to the employee and that offer is rejected. The first type of case is straightforward: it gives rise to a claim for damages for wrongful dismissal. The second type of case is usually a novation. The employment with the surviving partners is a new contract and not the continuation of the former contract. Whether the former contract is discharged by accord and satisfaction, and thereby operates as a release of the obligations arising under it, depends upon the terms of the agreement. It is a question of fact in each case whether the employee has accepted the offer of employment from the surviving partners. Where the acceptance is sought to be inferred from continued service of the employee it should not be drawn precipitously or on the basis of insubstantial evidence.128

The third type of case arose in Brace v Calder.129 A majority of the United Kingdom Court of Appeal held in that case that the dissolution of the contract arising from the retirement of two partners was a ‘technical breach’ of the contract and the employee was wrongfully dismissed by the original partners. However, the employee failed to mitigate his damages by refusing to accept an offer of future employment from the surviving partners. Whether the employee has acted reasonably in refusing to accept an offer from the surviving partners depends in part upon the terms of the new offer of employment and the circumstances surrounding the termination of the former employment.130

Death of a party 13.33 Death will terminate an unaccepted offer of employment.131 The death of an employee will frustrate an employment contract.132 The death of a natural employer will frustrate a contract when it is either of a personal nature or the personal role played by the natural employer is significant in the formation or performance of the contract.133 Employment contracts usually fit this description. There is some old authority to support the view that an express term may provide that the performance obligations may devolve to the personal representatives of the deceased employer.134 The death of a member of a partnership [page 815] will sometimes frustrate the contracts of employees engaged by the partnership, depending on the terms and nature of the contract between the partners and the employee, and the deceased partner’s personal role in the creation and performance of the contract.135 13.34 A personal representative may sue for and recover remuneration earned during the life of the deceased.136 An employee who has only performed part of an entire obligation at the time of his or her death cannot recover remuneration earned by that partial performance due to the application of the common law entire obligation rule,137 unless the employee falls within one of

the statutory exceptions to that rule.138 The right of an employer to seek to recover damages where the employee’s breach of duty resulted in personal injury or death is limited in some jurisdictions.139 Despite the termination of the contract the employee may, in some cases, continue to be entitled to receive remuneration earned during the employment but payable after the employee’s death. In Wilson v Harper the employee was entitled to 5% of the income earned by the employer as the result of business introduced by the employee. The employee died, but his personal representatives could still recover the 5% commission each year on business he had introduced.140 The effect on the accrued statutory rights of the employer and employee are governed by the terms of the statute.141 __________________ 1.

See 6.44.

2.

Australasian Meat Industry Employees’ Union v G & K O’Connor Pty Ltd (2000) 100 IR 383; [2000] FCA 627 at [42].

3.

See M Freedland, The Personal Employment Contract, Oxford University Press, Oxford, 2005, pp 492–6.

4.

Amcor Ltd v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241; 214 ALR 56; 138 IR 286 at [12] and [14]; Hawkins v Commonwealth Bank of Australia (1996) 66 IR 322 at 333 (rev’d on other grounds (1996) 70 IR 213).

5.

Hawkins v Commonwealth Bank of Australia, note 4 above and the cases referred to therein, and on appeal at (1996) 70 IR 213 at 222; Finance Sector Union of Australia v Commonwealth Bank of Australia [2004] FCA 257 at [9]–[15]; Ansett Australia Ground Staff Superannuation Plan Pty Ltd v Ansett Australia Ltd (2002) 174 FLR 1; [2002] VSC 576 at [234]; cf the definition of retrenchment payment in s 556 (2) of the Corporations Act discussed below in 13.23.

6.

Amcor Ltd v CFMEU, note 4 above, at [2], [53]–[55]; Commonwealth Bank of Australia v Finance Sector Union of Australia (2007) 157 FCR 329; 161 IR 262; [2007] FCAFC 18 at [159]–[160]. See, for example, the unusual definition of redundancy as any termination other than for misconduct in Yirra Pty Ltd v Summerton (2009) 176 FCR 219; 181 IR 327; [2009] FCAFC 50 at [109].

7.

TCR Case (1984) 8 IR 34 and the TCR Case — Supplementary Decision (1984) 9 IR 115; Redundancy Case (2004) 129 IR 155 and Redundancy Case — Supplementary Decision (2004) 134 IR 57.

8.

See Whittaker v Unisys Australia Pty Ltd (2010) 26 VR 668; 192 IR 311; [2010] VSC 9 at [91]– [99] where Ross J distinguished between ‘the concept of redundancy at common law’ and the meaning of that concept under Termination, Change and Redundancy clauses and similar provisions. Contrast, for example, the different approaches utilised in s 119 of the Fair Work Act (the right to redundancy pay), with ss 530 and 785 of the Fair Work Act (the right to be consulted about mass terminations for reasons of an economic nature), and the standard modern award term requiring consultation about major changes discussed in 13.12.

9.

TCR Case, see note 7 above, at 56; R v The Industrial Commission of South Australia; Ex parte Adelaide Milk Co-operative Ltd (1977) 16 SASR 6 at 8, 26–27; Hawkins v Commonwealth Bank of Australia, see note 4 above, at 333 (rev’d on other grounds (1996) 70 IR 213); cf Dibbs v Commissioner of Taxation (2004) 136 FCR 388; 207 ALR 151; [2004] FCAFC 126 which considered the former s 27F of the Income Taxation Assessment Act 1936 (Cth) that referred to ‘the bona fide redundancy of the taxpayer’, an approach different to the current definition of a genuine redundancy payment in s 82-180 of the Income Tax Assessment Act 1997 (Cth).

10.

Whittaker v Unisys Australia Pty Ltd, note 8 above, at [159]; Dibbs v Commissioner of Taxation, note 9 above, at [40]–[44]; Jones v Department of Energy and Minerals (1995) 60 IR 304 at 308.

11.

Hawkins v Commonwealth Bank of Australia, note 4 above, at 333–4 (rev’d on other grounds (1996) 70 IR 213); Dibbs v Commissioner of Taxation, note 9 above, at [40]–[44]; Jones v Department of Energy and Minerals, note 10 above, at 308.

12.

Fosters Group Limited v Wing (2005) 148 IR 224; [2005] VSCA 322 at [49]; see also Encyclopaedia Britannica Australia Ltd v Campbell [2009] NSWCA 286 [72]–[74] (reorganisation of responsibilities after termination for misconduct did not mean the reason for the termination was a redundancy).

13.

TCR Case — Supplementary Decision, note 7 above, at 128; Amcor Ltd v CFMEU, note 4 above, at [44].

14.

Amcor Ltd v CFMEU, note 4 above, at [52].

15.

Amcor Ltd v CFMEU, note 4 above, at [52]; Commonwealth Bank of Australia v Finance Sector Union of Australia, note 6 above, at [161]–[162].

16.

R v The Industrial Commission of South Australia; Ex parte Adelaide Milk Co-operative Ltd, note 9 above, at 8, 26–7; Jones v Department of Energy and Minerals, note 10 above, at 308; Gromark Packaging v Federated Miscellaneous Workers Union of Australia (1992) 46 IR 98 at 107.

17.

Fosters Group Limited v Wing, note 12 above, at [6], [36] and [62]–[68].

18.

Whittaker v Unisys Australia Pty Ltd, note 8 above, at [96]–[99]; Dibbs v Commissioner of Taxation, note 9 above, at [40]–[44]; Quality Bakers of Australia Ltd v Goulding (1995) 60 IR 327 at 332–3.

19.

Dibbs v Commissioner of Taxation, note 9 above, at [40]–[42]; Jones v Department of Energy and Minerals, note 10 above, at 308; International Flavours and Fragrances (Australia) Pty Ltd v Hoff [2008] VSC 56 at [29].

20.

Whittaker v Unisys Australia Pty Ltd, note 8 above, at [95]–[99]; Jones v Department of Energy and Minerals, note 10 above, at 308–9.

21.

Section 120 of the Fair Work Act reflects the original prescription in the TCR decisions. The meaning of ‘acceptable alternative employment’ and similar phrases has been considered extensively in the authorities: TCR Case — Supplementary Decision, note 7 above, at 134–5; Clothing Trades Award 1982 (1990) 140 IR 123 at 127; Clothing and Allied Trades Union of Australia v Hot Tuna Pty Ltd (1988) 27 IR 226; Allman v Teletech International Pty Ltd (2008) 178 IR 415; [2008] FCA 1820 at [11]–[25]; Rogan-Gardiner v Woolworths Ltd [2010] WASC 290 at [144]; Transport Workers’ Union of New South Wales v Post Logistics Australasia Pty Limited (2010) 200 IR 50; B Creighton, ‘Transmission of All or Part of a Business: A Neglected Issue in Australian Industrial and Employment Law’ (1998) 26 ABLR 162 at 168–70.

22.

See, for example, Hawkins v Commonwealth Bank of Australia (No 2), note 4 above. See also Dibbs v Commissioner of Taxation, note 9 above, at [43]–[44] which considered whether the

employee was redundant (as opposed to the employee’s job being redundant) in such circumstances. 23.

R v The Industrial Commission of South Australia; Ex parte Adelaide Milk Co-operative Ltd, note 9 above, at 8 per Bray CJ (‘a job becomes redundant when an employer no longer desires to have it performed by anyone’).

24.

Whittaker v Unisys Australia Pty Ltd, note 8 above, at [110]–[115]; Short v FW Hercus Pty Ltd (1993) 46 IR 128 at 133.

25.

Short v FW Hercus Pty Ltd, note 24 above, at 133; see also at 131 and 137–8.

26.

Amcor Ltd v CFMEU, note 4 above.

27.

Fryar v System Services Pty Ltd (1996) 137 ALR 321 at 331; Guthrie v News Ltd (2010) 27 VR 196; [2010] VSC 196 at [200]–[203]; Westfield Holdings v Adams (2001) 114 IR 241 at [138]– [144] (the dominant function of ‘a redundancy or severance payment is to compensate an employee for the loss of non-transferable benefits and for the inconvenience and hardship imposed by the termination’); Newton v Goodman Fielder Mill Ltd (1997) 81 IR 227 at 238; Allman v Teletech International Pty Ltd, note 21 above, at [25].

28.

Guthrie v News Ltd, note 27 above, at [201], [205]–[206]; Reynolds v Southcorp Wines Pty Ltd (2002) 122 FCR 301; 115 IR 152; [2002] FCA 712 at [44].

29.

Young v Canadian Northern Railway Company [1931] AC 83 at 88–9; Ryan v Textile Clothing and Footwear Union of Australia [1996] 2 VR 235 at 260; Reilly v Praxa Ltd [2004] ACTSC 41 at [28]; Reynolds v Southcorp Wines Pty Ltd, note 28 above, at [56]; Whittaker v Unisys Australia Pty Ltd, note 8 above, at [128].

30.

See, for example, Ajax Cooke Pty Ltd v Nugent (1993) 5 VIR 551; McCreadie v Thomson & MacIntyre (Patternmakers) Ltd [1971] 2 All ER 1135 at 1137: see 5.30.

31.

Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193; [2000] FCA 889; Anderson v Pringle of Scotland Ltd [1998] IRLR 64: see 5.34.

32.

Reynolds v Southcorp Wines Pty Ltd, note 28 above, at [56]; see 5.31.

33.

Willis v Health Communications Network Ltd (2007) 167 IR 425; [2007] NSWCA 313 at [33] and [56].

34.

Dellys v Elderslie Finance Corporation Ltd (2002) 132 IR 385; [2002] WASCA 161 at [15]– [21]; Riverwood International Australia Pty Ltd v McCormick, note 31 above, at [63]; Keays v J P Morgan Administrative Services Australia Limited [2011] FCA 358 at [61]: see 5.53.

35.

TCR Case (1984), note 7 above and TCR Case — Supplementary Decision, note 7 above; Redundancy Case, note 7 above and Redundancy Case — Supplementary Decision, note 7 above. There has also been a history of state regulation in this field which is, except in Western Australia, now largely irrelevant: see Minimum Conditions of Employment Act 1993 (WA) Pt 5 and Industrial Relations Act 1979 (WA) s 50.

36.

The meaning of redundancy is discussed in 13.3–13.7.

37.

As to the effect of certain types of insolvency on the contract of employment, see 13.15–13.20. As to whether a termination due to the insolvency is at the initiative of the employer, compare Re Beverage Packers (Aust) Pty Ltd [1990] VR 446 at 448 with Commercial Finance Co Ltd v Ramsingh-Mahabir [1994] 1 WLR 1297.

38.

Fair Work Act s 16(1).

39.

Fair Work Act s 16(1).

40.

Fair Work Act s 20 and Fair Work Regulations 2009 (Cth) reg 1.11.

41.

See ss 123(1) and (4), and s 121(1)(b). As to the meaning of specified term and specified task contracts, see Andersen v Umbakumba Community Council (1994) 56 IR 102; Drury v BHP Refractories Pty Ltd (1995) 62 IR 467; Cooper v Darwin Rugby League Inc (1994) 57 IR 238; 1 IRCR 130; Dadey v Edith Cowan University (1996) 70 IR 295; Qantas v Fetz (1998) 84 IR 52; D’Ortenzio v Telstra (No 2) (1998) 82 IR 52. ‘Small business employer’ is defined in s 23 to mean a national system employer that employs fewer than 15 employees at the time of the termination. The common law test of misconduct is applied: see 10.19.

42.

See Fair Work Act s 120; see the cases at note 21 above.

43.

See Building and Construction General On-Site Award 2010 cl 17; Award Modernisation Decision [2009] AIRCFB 345 at [77]–[83].

44.

Part 3-6 (ss 529–534) of the Fair Work Act imposes the obligations on national system employers and Div 3 of Pt 6-4 (ss 784–789) impose almost identical obligations on non-national system employers, relying on the external affairs power. See generally A Forsyth, ‘Giving Teeth to the Statutory Obligation to Consult over Redundancies’ (2002) 15 AJLL 177; Construction, Forestry, Mining & Energy Union v Newcastle Wallsend Coal Co Ltd (1998) 88 IR 202 at 207–8 and 216–9; Printing & Kindred Industries Union v Federal Capital Press of Australia Pty Ltd (1994) 31 AILR 378.

45.

Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union v Metro Products & Co Pty Ltd (2001) 110 IR 143.

46.

See the cases referred to in note 7 above. The terms discussed in this section are based on cl 9 of the Manufacturing and Associated Industries and Occupations Award 2010, but identical (or almost identical) terms appear as a standard term in most modern awards: Award Modernisation Case (2008) 177 IR 8 at [18]. See generally Austin Health v Health Services Union (Victoria) (2008) 170 IR 269 at [15]–[42]; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing & Allied Services Union of Australia v QR Ltd (2010) 268 ALR 514; 198 IR 382; [2010] FCA 591 at [44]–[80] and on appeal at (2010) 204 IR 142; [2010] FCAFC 150.

47.

‘Significant effects’ is defined to include termination of employment; major changes in the composition, operation or size of the employer’s workforce or in the skills required; the elimination or diminution of job opportunities, promotion opportunities or job tenure; the alteration of hours of work; the need for retraining or transfer of employees to other work or locations; and the restructuring of jobs.

48.

See Corporations Act 2001 (Cth) s 413.

49.

See Fair Work Act s 311 and B Creighton and E Shi, ‘The Transfer of Business Provisions of the Fair Work Act in National and International Context’ (2009) 23 AJLL 39.

50.

Re Oriental Bank Corp (McDowall’s case) (1886) 32 Ch D 366 at 368; Re General Rolling Stock Co (Chapman’s case) (1866) LR 1 Eq 346; Nokes v Doncaster Amalgamated Collieries Ltd [1940] AC 1014 at 1018–9; 3 All ER 549 at 551; Fused Electrics Ltd v Carfrae (1992) 45 IR 388 at 390–1; Re Beverage Packers (Aust) Pty Ltd, note 37 above, at 448.

51.

Re Associated Dominions Assurance Society Pty Ltd (1962) 109 CLR 516 at 518; Sipad Holding ddpo v Popovic (1995) 19 ACSR 108; Re RS Newman Ltd [1916] 2 Ch 309; Re Oriental Bank Corp (McDowall’s case), note 50 above, at 368.

52.

Re Associated Dominions Assurance Society Pty Ltd, note 51 above, at 518; Fused Electrics Ltd v Carfrae, note 50 above, at 390; Re General Rolling Stock Co (Chapman’s case), note 50 above; the order does not operate as notice from the commencement of the winding up as determined

under s 513A. 53.

Re RS Newman Ltd, note 51 above; Re English Joint Stock Bank (Yelland’s case) (1867) LR 4 Eq 350; Re London and Scottish Bank; Ex parte Logan (1869–70) LR 9 Eq 149 (employee entitled to be paid three years’ salary on termination for any cause other than misconduct was held to be entitled to recover remuneration, with no reduction for mitigation).

54.

Re Oriental Bank Corp (McDowall’s case), note 50 above, at 369; Re English Joint Stock Bank; Ex parte Harding (1867) LR 3 Eq 341.

55.

Reigate v Union Manufacturing Co (Ramsbottom) Ltd [1918] 1 KB 592 at 601 and 605; Midland County District Bank v Attwood [1905] 1 Ch 357 at 362–3; Re Matthews Bros Ltd [1962] VR 262 at 263–4; Clark v Local Government Training Authority SA Incorporated [2001] SASC 273 at [114] and [115]; Fowler v Commercial Timber Company Limited [1930] 2 KB 1 at 5–6.

56.

Reigate v Union Manufacturing Co (Ramsbottom) Ltd, note 55 above, at 601 and 605; Midland County District Bank v Attwood, note 55 above, at 362–3; Re Matthews Bros Ltd, note 55 above, at 264; Gerard v Worth of Paris Ltd [1936] 2 All ER 905.

57.

Section 435A; see generally Brian Rochford Ltd v Textile Clothing and Footwear Union (NSW) (1998) 47 NSWLR 47 at 53–5; 85 IR 332 at 336–8.

58.

Smith v Deputy Commissioner of Taxation (1996) 71 FCR 150 at 154–5; 22 ACSR 331 at 335; Powlett v Watson [1995] 2 AC 394 at 440–1 and 448; 2 All ER 65 at 75 and 82–3.

59.

Section 437A.

60.

Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1; 153 ALR 643; 79 IR 339 at [52]–[59] and at [135]–[138] per Gaudron J (‘Section 437A does not authorise an administrator to dismiss employees contrary to an award or legislative provisions’); Re NC Capital Ltd (1992) 32 ACSR 418; [1999] NSWSC 625; see D Walter, ‘Know your liabilities: Administrators’ personal liability for employee wages and entitlements’ (2009) 17 Insolv LJ 175 at 176–7.

61.

McEvoy v Incat Tasmania (2003) 130 FCR 503; 46 ACSR 392; 124 IR 348 at [6]–[7] and the cases discussed therein; Reid v Explosives Co Ltd (1887) 19 QBD 264 at 267–8.

62.

Powlett v Watson, note 58 above, AC at 440; All ER at 75; Kendle v Melsom (1998) 193 CLR 46; 151 ALR 740 at [43]–[44].

63.

Sipad Holding ddpo v Popovic, note 51 above, at 110–1; International Harvester Export Co v International Harvester Australia Ltd [1983] 1 VR 539 at 544; Seymour v Stawell Timber Industries Pty Ltd (1985) 9 FCR 241 at 266; (1985) 70 ALR 391 at 416.

64.

Sipad Holding ddpo v Popovic, note 51 above, at 110–1.

65.

Powlett v Watson [1995] 2 AC 394 at 440–1 and 448; 2 All ER 65 at 75 and 82–3; McEvoy v Incat Tasmania, note 61 above, at [6]–[7]; Nicoll v Cutts [1985] BCLC 322; Seymour v Stawell Timber Industries Pty Ltd, note 63 above, FCR at 247 and 266; ALR at 397 and 416; Griffiths v Secretary of State for Social Services [1974] QB 468 at 485–6; [1973] 3 All ER 1184 at 1198–9; James Miller Holdings Ltd v Graham (1978) 3 ACLR 604 at 612; Re Mack Trucks (Britain) Ltd, note 65 above, at 786.

66.

Whitton v ACN 003 266 886 Pty Ltd (1996) 42 NSWLR 123 at 149–50; Powlett v Watson, note 58 above, AC at 440; All ER at 75; Re Mack Trucks (Britain) Ltd [1967] 1 WLR 780 at 786; 1 All ER 977 at 982.

67.

Griffiths v Secretary of State for Social Services, note 65 above, QB at 486–7; All ER at 1198–9; Re Foster Clark Ltd’s Indenture Trusts [1966] 1 WLR 125; 1 All ER 43; Re Mack Trucks

(Britain) Ltd, note 65 above. 68.

Sections 420(2)(o), 437A and 477 of the Act; ALHMWU v Terranora Country Club Pty Ltd (1996) 19 ACSR 687 at 688.

69.

Brian Rochford Ltd v Textile Clothing and Footwear Union (NSW), note 57 above, NSWLR at 55–6; IR at 337–8; ALHMWU v Home Care Transport Pty Ltd (2002) 117 FCR 87; 115 IR 249; [2002] FCA 497 at [24]–[26]; Melbourne University Student Union Inc (in liq) v Sherriff [2004] VSC 266.

70.

The personal liability of an administrator and receiver is almost indistinguishable and the cases draw no relevant distinction between the two in this respect: see C Hammond, ‘The Relationship of Administrators to Company Employees: Issues Arising under Part 5.3A of the Corporations Law’ (1999) 7 Insolv LJ 74 at 76; C Hammond, ‘Are Receivers and Administrators Liable for Wages of Company Employees Retained after their Appointment?’ (1997) 5 Insolv LJ 136 at 137.

71.

Associated Newspapers Ltd v Grinston (1949) 66 WN (NSW) 211 at 212–3; Green v Giljohann (1995) 17 ACSR 518; British Investments v Development Co Pty Ltd [1979] ACLC 40-522; cf Powlett v Watson, note 58 above, AC at 448–52; All ER at 82–6 (decided under a very different legislative scheme); D Walter, ‘Know Your Liabilities: Administrators’ Personal Liability for Employee Wages and Entitlements’ (2009) 17 Insolv LJ 175 at 180–1; C Hammond, ‘Are Receivers and Administrators Liable for Wages of Company Employees Retained after their Appointment?’ (1997) 5 Insolv LJ 136; C Hammond, ‘The Relationship of Administrators to Company Employees: Issues Arising under Part 5.3A of the Corporations Law’ (1999) 7 Insolv LJ 74; P Darvas, ‘From the Outside Looking In: Employees and Voluntary Administration’ (2001) 29 ABLR 409.

72.

Sipad Holding ddpo v Popovic, note 51 above, at 111; Whitton v ACN 003 266 886 Pty Ltd, note 66 above, at 155; McEvoy v Incat Tasmania, note 61 above, at [28]–[29]; Vickers v Challenge Australian Dairy Pty Ltd (2011) 190 FCR 569; [2011] FCA 10 at [45]–[46]; International Harvester Export Co v International Harvester Australia Ltd, note 63 above, at 546–7; cf the approach in AGL Victoria Pty Ltd v Lockwood (2003) 10 VR 596; [2003] VSC 453 discussed in D Walter, ‘Know Your Liabilities: Administrators’ Personal Liability for Employee Wages and Entitlements’ (2009) 17 Insolv LJ 175 at 180–2.

73.

Associated Newspapers Ltd v Grinston, note 71 above, at 212–3 per Street CJ.

74.

See the cases referred to in notes 50–54 above.

75.

Re Oriental Bank Corp (McDowall’s case), note 50 above, at 368; Reid v Explosives Co Ltd, note 61 above, at 267–8.

76.

See 14.39.

77.

Agricultural & Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570; 251 ALR 322 at [90]. See C Bevan, ‘Waiver of Contractual Rights: A Non Sequitur’ (2009) 83 ALJ 817 and P Liondas, ‘“Waiver” in the High Court: Agricultural & Rural Finance Pty Ltd v Gardiner’ (2009) 37 ABLR 132.

78.

Birrell v Australian National Airlines Commission (1984) 5 FCR 447 at 457 and the authorities in 11.68.

79.

Re Associated Dominions Assurance Society Pty Ltd, note 51 above, at 518–9.

80.

See cases at note 53 above.

81.

Visscher v Guidice (2009) 239 CLR 361; 258 ALR 651; 187 IR 96 at [59]; Decro-Wall

International SA v Practitioners in Marketing Ltd [1971] 1 WLR 361 at 375–6 and 382: see 10.66. 82.

See s 444DA concerning priority to eligible employee creditors under deeds of arrangement; s 433 (3) concerning payments by receivers; ss 109 and 109A of the Bankruptcy Act 1966 (Cth) for bankrupts.

83.

On the meaning of ‘expenses’ and ‘properly incurred’, see the authorities discussed in Ansett Australia Ground Staff Superannuation Plan Pty Ltd v Ansett Australia Ltd, note 5 above, at [281]–[291]. ‘Relevant authority’ is defined in s 556(2) and includes a liquidator, provisional liquidator, and administrator under Pt 5.3A. See also s 556(1)(c) concerning certain debts incurred by an administrator that may include some entitlements of employees.

84.

Re International Cable Co (1892) 8 TLR 307; Re Matthew Bros Ltd, note 55 above; Bell v Amberday Pty Ltd (2001) 39 ACSR 25; [2001] NSWSC 558 at [49]. See also s 558 concerning the leave and redundancy entitlements of employees of the company who continue in employment after the relevant date.

85.

See ss 558(3) and 561(b); Ansett Australia Ground Staff Superannuation Plan Pty Ltd v Ansett Australia Ltd, note 5 above, at [277].

86.

Gothard v Davey (2010) 80 ACSR 56; [2010] FCA 1163 at [216]–[222]. See also Re North Sydney District Rugby League Football Club (2000) 34 ACSR 630; [2000] NSWSC 634 at [52].

87.

See ss 556(1A), (1B) and (1C) which govern the limited priority and Sturesteps v McGrath (2010) 242 FLR 122; 79 ACSR 253; [2010] NSWSC 896 at [8]–[41].

88.

Ryan v Textile Clothing & Footwear Union Australia, note 29 above.

89.

Fisher v Madden (2002) 54 NSWLR 179; 114 IR 119; [2002] NSWCA 28.

90.

‘The relevant date’ is the date of the commencement of the winding up and is determined in accordance with ss 513A–513C.

91.

Subsection 558(1) relevantly states: ‘Where a contract of employment with a company being wound up subsisted immediately before the relevant date, the employee under the contract is … entitled to payment under s 556 as if his or her services with the company had been terminated by the company on the relevant date.’

92.

The priority applies to retrenchment payments payable ‘to the employee’; and leave payments due ‘to, or in respect of, employees’ or wages, superannuation contributions and the superannuation guarantee charge ‘payable by the company in respect of services’, which would include payments to a superannuation fund or an assignee of the employee.

93.

Wages means ‘any amounts that are payable to or in respect of an employee … (whether the employee is remunerated by salary, wages, commission or otherwise) under an industrial instrument, including amounts payable by way of allowance or reimbursement but excluding amounts payable in respect of leave of absence’: see Walker v Andrew (2002) 116 IR 380; [2002] NSWCA 214 at [48] (bonus payments as wages); Allert v Grabowski (1988) 48 SASR 196 (compensation associated with reinstatement order held to be wages); Rundell v Bedford (1998) 144 FLR 443; 28 ACSR 66 (payment to employee for goodwill arising from sale of the business was wages).

94.

Re VIP Insurances Ltd [1978] 2 NSWLR 297 at 298–9; International Harvester Export Co v International Harvester Australia Ltd, note 63 above.

95.

Gothard v Davey, note 86 above, at [226]–[227].

96.

See ss 556(1AB)–(1AF).

97.

See s 563(1)(b); State Government Insurance Office (Qld) v Rees (1979) 144 CLR 549; 26 ALR 341; Re Northumberland Insurance Co Ltd [1975] 1 NSWLR 471.

98.

Section 9 defines leave of absence as ‘long service leave, extended leave, recreation leave, annual leave, sick leave or any other form of leave of absence from employment’.

99.

Ryan v Textile Clothing & Footwear Union Australia, note 29 above. See 5.94–5.105 concerning whether enterprise agreements not approved under the Fair Work Act are enforceable as contracts.

100. Re E & L Constructions Pty Ltd (1981) 28 SASR 154 at 157 and 160; Construction Industry Long Service Leave Board v Irving (1997) 74 FCR 587 at 595–7; 145 ALR 158 at 165–7. 101. L Duthie, ‘The Priority of Retrenchment Payments in a Liquidation or Receivership’ (1992) 20 ABLR 378 at 382. 102. See 11.77. 103. See 14.35. 104. See further at 11.75 and 14.38. 105. See L Duthie, ‘The Priority of Retrenchment Payments in a Liquidation or Receivership’ (1992) 20 ABLR 378 at 390; cf B McPherson, McPherson’s Law of Company Liquidation, Law Book Company, Sydney, 2011, at [13.1220]. Compare the use of the phrase ‘by virtue of an industrial instrument’ in the definition of retrenchment payments in s 556(2) with ‘because of an industrial instrument’ in s 556(1)(g) and ‘under an industrial instrument’ in s 596AA. 106. GEERS is governed by the GEERS Operational Arrangements published by the Department of Education, Employment and Workplace Relations (the GEERS OA). It has no statutory foundation. 107. See B Creighton and A Stewart, Labour Law, 5th ed, Federation Press, Sydney, 2010, pp 524–6. The history of GEERS is traced in S O’Neill, ‘Meeting employee entitlements in the event of employer insolvency’, Department of Parliamentary Services, 2011. Related measures include those contained in the Corporations Law Amendment (Employee Entitlements) Act 2000 (Cth) (inserting Pt 5.8A of the Act the object of which is to protect the entitlements of a company’s employees from agreements and transactions that are entered into with the intention of defeating the recovery of those entitlements) and the Corporations Amendment (Repayment of Directors’ Bonuses) Act 2003 (Cth) (inserting s 588FDA of the Act obliging directors and their associates to repay certain unreasonable benefits). 108. Excluded employees include those discussed above in the text accompanying note 85 above. 109. See Public Sector Employment Management Act 2002 (NSW) s 58. 110. As to what is meant by management in this context, see Commissioner for Corporate Affairs (Vic) v Bracht [1989] VR 821 at 830–1. 111. The bankruptcy of a partner will dissolve the partnership: see s 33 of the Partnership Act 1892 (NSW) and its counterparts in other jurisdictions. 112. Bailey v Thurston & Co Ltd [1903] 1 KB 137 at 145; Beckham v Drake (1849) 2 HLC 579 at 615, 625. 113. Re Gillies; Ex parte Official Trustee in Bankruptcy v Gillies (1993) 42 FCR 571; 115 ALR 631; Re Sharpe; Ex parte Donnelly (1998) 80 FCR 536. 114. Subsection 116(2)(c); Tiver v Official Trustee in Bankruptcy (2010) 187 FCR 1; 269 ALR 522; [2010] FCA 620 at [45]–[53] and the cases discussed therein; Re Sherman (1915) 32 TLR 231.

115. Cox v Journeaux (No 2) (1935) 52 CLR 713 at 721 per Dixon J; Daemar v Industrial Commission of New South Wales (1988) 24 IR 370. 116. Faulkner v Bluett (1981) 52 FLR 115 at 121–2. 117. Geia v Palm Island Aboriginal Council [2001] 1 Qd R 245; (1999) 152 FLR 135; [1999] QCA 389 at [17]; Re Camberwell Motors Pty Ltd (in liq) [1926] VLR 539. 118. Gardiner v Goss [2007] FMCA 1966. 119. Griffiths v Civil Aviation Authority (1996) 137 ALR 521 at 536 and 540–2; Perfection Dairies Pty Ltd v Finn (2006) 151 IR 197 at [38]–[48]; Randall v Deputy Commissioner of Taxation (2008) 174 FCR 441; [2008] FCA 1939 at [76]. 120. See Dwyer v Housing Industry Association Ltd [2009] VCAT 411 at [77]–[83] (alleged breach of the Equal Opportunity Act 1984 (Vic)); Smith v Chevelle Developments Pty Ltd (2005) NSWIRComm 109 (claim alleging that contract was unfair); Pelechowski v NSW Land and Housing Commission [2000] FCA 299 (unfair dismissal claim); Fitzpatrick v Keelty [2008] FCA 35 at [39]–[58]. 121. Commissioner of State Taxation v Cyril Henschke Pty Ltd (2010) 242 CLR 508; 272 ALR 440 at [10]–[12]. As to other events that dissolve a partnership, see ss 32–35 of the Partnership Act 1892 (NSW) and the equivalent sections in each of the Partnership Acts of the various states and territories. 122. Brace v Calder [1895] 2 QB 253 at 261 and 263 (referred to approvingly in the dicta in Nokes v Doncaster Amalgamated Collieries Ltd, note 50 above, AC at 1018; All ER at 551), and Briggs v Oates [1991] 1 All ER 407 at 412 and 416; [1990] ICR 473 at 479 and 482–3; Titmus v Rose [1940] 1 All ER 599 at 602–3; Kaufman v McGillicuddy (1914) 19 CLR 1 at 11 and 14; Tunstall v Condon [1980] ICR 786 at 791. 123. See 13.33 and 12.24. 124. Briggs v Oates, note 122 above, All ER at 416; ICR at 482; Brace v Calder, note 122 above, at 263; Tasker v Shepherd (1861) 6 H & N 575; 158 ER 237; Friend v Young [1897] 2 Ch 421 at 429–30. 125. Brace v Calder, note 122 above, at 263. 126. See the dicta of Scott J in Briggs v Oates, note 122 above, at 416; [1990] ICR 473 at 482. 127. Phillips v Alhambra Palace Company [1901] 1 QB 59 at 63–4; Stevens v Benning (1854) 1 K & J 168 at 174–5; 69 ER 415; Robson v Drummond (1831) 2 B & Ad 303 at 307 and 308. 128. See 6.24, 6.49 and Titmus v Rose, note 122 above, at 601–2. 129. Brace v Calder, note 122 above. 130. See 14.110. 131. Carter v Hyde (1923) 33 CLR 115 at 121 and 124. 132. Farrow v Wilson (1869) LR 4 CP 744 at 746; Stubbs v The Holywell Railway Company (1867) LR 2 Exch 311 at 313, 314 and 315. 133. Farrow v Wilson, note 132 above, at 746; Phillips v Alhambra Palace Company, note 127 above, at 63–4 and Graves v Cohen (1930) 46 TLR 121 at 123–4; see further 12.24. 134. See, for example, Jackson v Bridge (1702) 12 Mod 650. 135. See 13.31.

136. Stubbs v Holywell Rly Co, note 132 above; Wilson v Harper [1908] 2 Ch 370. 137. Jesse v Roy (1834) 1 C M & R 316 at 340–1; 149 ER 1101 at 1110–1 (seaman engaged ‘until the arrival of the said ship at London’ was not entitled to wages when ship condemned en route to London and then he died en route). 138. See 9.30–9.34. 139. See Civil Law (Wrongs) Act 2002 (ACT) s 216; Employees Liability Act 1991 (NSW) ss 3–5; Law Reform (Miscellaneous Provisions) Act 1956 (NT) ss 22, 22A; Civil Liability Act 1936 (SA) s 59. 140. Wilson v Harper, note 136 above. 141. See, for example, Shop, Distributive and Allied Employees’ Association (NSW) v Norman Ross Homeworks Pty Ltd (1989) 30 IR 302 where the Industrial Commission of NSW found it had power to, and exercised the power to, reinstate a dead employee.

[page 816]

Chapter 14 Damages for Breach of Contract Overview Damages for wrongful dismissal: an overview General Principles The compensatory purpose of damages The various types of damages defined Causation Remoteness: the rule in Hadley v Baxendale Proof of damages and the onus of proof Time for assessment, continuing breaches and the once and for all rule Taxation Interest and inflation Compensation under statutory schemes Damages in an Employment Context The action for wrongful dismissal Loss of remuneration caused by the breach The least burdensome performance rule Loss of chance: general principles Loss of chance: commissions, renewal of contracts, job security provisions and the ACL Fixed term contracts Debt and payments due on termination of employment

Damages for Mental Distress, Loss of Reputation and the Manner of Dismissal Overview and summary The troublesome quintet: Addis, Malik, Johnson, Eastwood and Edwards Damages for mental distress: the general rule and its exceptions [page 817] Aggravated damages and the manner of and motive for the breach Damages for loss of reputation and diminished future employment prospects Damages arising when the employee is denied the right to perform work Critique of the general rule against recovery Mitigation of Loss Overview When a duty to mitigate arises and payments in lieu The duty to mitigate avoidable loss Mitigation and new offers of employment No recovery for avoided loss The deductibility of other benefits The deductibility of payments in lieu of notice, redundancy payments and ex gratia payments Agreed Damages Clauses Liquidated damages and penal clauses The rule against penalties and its statutory modification

OVERVIEW 14.1 As Professors Carter and Peden have observed: The assessment of damages is not an exact science. It is a pursuit of fairness rather than accuracy. Apart from the rules on remoteness and causation, most of the damages ‘rules’ are little more than guidelines designed to promote fairness and certainty. They are not immutable.1

Damages are the sum of money awarded by a court to compensate a successful plaintiff in an action for breach of contract.2 The fundamental [page 818] purpose of an award of damages is compensatory: an employee3 should receive compensation in a sum which, so far as money can do, will put the employee in the same position he or she would have been in if the contract had been performed: see 14.7. To be recoverable the employee’s loss must be caused by the breach: see 14.17–14.20. The loss must not be too remote: see 14.21–14.23. The employee must prove the loss: see 14.24. Damages are normally assessed at the date of the breach of contract by reference to the circumstances at that date and are recovered once and for all in a single action, except where the breach gives rise to a continuing cause of action: see 14.25–14.28. There is a discussion of the taxation of an award of damages in 14.29–14.30. Interest as damages (or loss of the use of money) and interest on damages are examined in 14.31. The different approaches to assessing compensation under various statutory schemes are considered in 14.32–14.34. These general principles are applied to any breach by the parties. Damages arising from a wrongful dismissal are subject to specific analysis in 14.35–14.47. 14.2 Damages are awarded to compensate for a breach of the contract: no right to damages arises in the absence of a breach.4 An employee who has proved that the employer has breached a contract is entitled to an award of damages as a matter of right. Damages are not a discretionary remedy, unlike an award of damages in equity.5 An employee who proves a breach of the contract, but does not prove that he or she has suffered

[page 819] substantial loss arising from the breach, is entitled to judgment in his or her favour and an award of nominal damages.6 The principles discussed in this chapter do not examine in detail actions for money payable under the terms of a contract which the employer has agreed to pay, such as redundancy payments or payments in lieu of notice. These are actions for debt, not damages, and are discussed briefly in 14.66. The equitable monetary awards of equitable compensation, account of profits and damages under Lord Cairns’ Act are considered in 15.114–15.132. Actions claiming money for restitution are beyond the scope of this text.7

Damages for wrongful dismissal: an overview 14.3 The glib proposition that a wrongfully dismissed employee is entitled, and only entitled, to recover damages for the loss of wages payable during a notice period, fails to take into account the many qualifications and exceptions to that inexact rule of thumb.8 The orthodox and unrefined approach to damages for wrongful dismissal for employees whose contracts are terminable by notice can be simply stated. No question of damages arises when the employee is given notice in accordance with the contract as there is no breach: see 14.102. In the assessment of damages for wrongful dismissal, courts apply the least burdensome performance rule: namely, the law commences with the assumption that where the employer has several ways in which the contract [page 820] might be lawfully performed, the employer would have performed the contract in a way most beneficial to itself: see 14.48–14.49. Applied to a wrongful dismissal, the law ordinarily assumes that the employer would have terminated the contract at the earliest time permitted by law. In a contract terminable by notice, it is ordinarily assumed that a wrongfully dismissed

employee would have been given the required notice at the time of the dismissal. Damages for wrongful dismissal for such employees will ordinarily consist of the benefits the employee would have received during that notice period.9 The approach of courts applying the least burdensome performance rule to wrongfully dismissed employees has been summed up by Professor Brooks as follows: (i)

there are two methods of proper performance of an employment contract terminable by notice: (a) immediate giving of proper notice [or] (b) continuation of the employment indefinitely;

(ii) the wrongful dismissal indicates the employer wishes to be rid of the employee; (iii) therefore the method of proper performance which the employer would have chosen, had the employer chosen proper rather than wrongful performance, would have been the immediate giving of a proper period of notice; (iv) therefore damages will be wages for the notice period.10

14.4 For employees engaged under fixed term contracts, the contract will terminate at the expiration of the fixed term and, when it does, there is no breach by the employer and the question of damages does not arise. When the employer wrongfully terminates a fixed term contract prior to the expiration of the term, the earliest date on which the contract could have been terminated lawfully by the employer is the expiration of the fixed term. Damages for wrongful dismissal for such employees will ordinarily consist of the benefits the employee would have received for the unexpired period of the fixed term: see 14.64–14.65. Some contracts contain a job security term that imposes a precondition to the termination (such as a term requiring the dismissal be fair or that there be no dismissal without first providing procedural fairness). The earliest date on which such contracts could have been terminated lawfully is the date the precondition is satisfied: see 14.61–14.62. [page 821] An employer impliedly agrees that it will retain the employee in service for the duration of the contract: see 14.35–14.37. A wrongful dismissal is a breach of that obligation. A wrongfully dismissed employee does not recover

wages payable during that period. Instead the employee recovers his or her loss. This will often include an amount equal to the wages that would have been payable. It may also include some non-wage benefits. Damages cannot be recovered for amounts the employer has not agreed to provide and so are only recoverable for contractually agreed non-wage benefits. If they are not too remote, an employee may also recover damages from the employer for benefits foregone which would have been paid by third parties to the employee: see 14.44–14.47. 14.5 There are at least 19 qualifications and exceptions to the orthodox and crude approach stated in 14.3 and 14.4.11 The assumption that the employer would have chosen to give notice on the earliest date on which the contract could have been terminated lawfully is a factual assumption. That assumption will not be made when it is contradicted by evidence: see 14.48–14.52. There is a growing body of law that recognises that an employee may be entitled to damages for loss of a not negligible chance that, but for the wrongful dismissal, an employer would have chosen not to terminate the contract: see 14.49–14.50 and 14.58. The general principles governing the recovery of damages for loss of a chance are discussed in 14.53–14.54. They are applied in 14.55–14.63 to the loss of a chance to earn bonuses or commissions, the loss of a chance to have a fixed term contract renewed, the role of loss of a chance where the contract contains job security provisions and the loss of a chance in calculating damages under the Australian Consumer Law (ACL). The limitations on an employer’s choice or discretion about how to perform the contract (such as whether to grant a bonus or the quantum of a bonus) are also discussed at 8.28 and 14.57. There is a discussion of some special issues that largely only arise when assessing damages for fixed term contracts in 14.64–14.65, particularly the adjustment of damages for vicissitudes and to take into account the benefits of receiving a lump sum for future loss before the amount would have been payable under a contract. The distinction between actions for debt and damages is explained in 14.66. 14.6 The controversial field covering the recovery of damages by employees for mental distress, loss of reputation and damages arising from the manner of the breaches of the contract are considered in 14.67–14.91. Damages are subject to an adjustment on account of

[page 822] mitigation. This will include reducing damages for loss that has been avoided or is avoidable, as well as increasing the amount for reasonable expenditure of an employee seeking to mitigate his or her loss: see 14.96–14.117. The employee may receive a range of benefits from the employer and others as a result of a breach, such as a payment in lieu of notice or unemployment payments. In 14.118–14.130 there is an examination of the extent to which these benefits directly or indirectly connected with the breach should be taken into account in assessing the damages recoverable from the employer. Finally, 14.131–14.136 deal with agreed damages clauses and the extent to which they may be enforced.

GENERAL PRINCIPLES The compensatory purpose of damages 14.7 The fundamental purpose of damages for breach of contract is to provide a monetary sum to the employee to put the employee in the position he or she would have been in if the employer had performed the contract. As a majority of the High Court stated in Haines v Bendall: The settled principle governing the assessment of compensatory damages, whether in actions of tort or contract, is that the injured party should receive compensation in a sum which, so far as money can do, will put that party in the same position as he or she would have been in if the contract had been performed or the tort had not been committed. Compensation is the cardinal concept. It is the ‘one principle that is absolutely firm, and which must control all else’.12 Cognate with this concept is the rule, described by Lord Reid in Parry v Cleaver [1970] AC 1 at 13 as universal, that a plaintiff cannot recover more than he or she has lost.13

There are at least two relevant exceptions to the compensatory principle.14 First, as a matter of public policy the law does not permit some losses caused by the breach to be recovered, such as certain damages for mental distress arising from a wrongful dismissal.15 Second, the parties may agree that, in the event of a breach, an agreed non-compensatory [page 823]

sum will be paid. The law will enforce that agreement so long as the agreed damages are not penal in nature.16 14.8 Employees often have concurrent contractual and equitable obligations. Compensatory damages may be awarded for the breach of contract. Equitable remedies, such as an account of profits, may be awarded for the breach of the employee’s equitable obligations. The purpose of an account of profits is to require the wrongdoer to account for the benefits acquired as the result of a breach of equitable and analogous obligations.17 Damages focuses on the loss of the employer; an account of profits focuses on the gain of the employee. It has been suggested in some cases that damages for breach of contract can be awarded requiring an employee to account for and disgorge the employee’s gains from a breach of contract. This approach is contrary to the compensatory principle and is currently not the law in Australia.18

The various types of damages defined 14.9 The phrase ‘damages for breach of contract’ covers numerous distinct types of damages. There are expectation, reliance and restitution damages; nominal and substantial damages; punitive, exemplary and aggravated damages. Damages in equity and equitable compensation are different concepts altogether. These terms are defined below.

Loss and damage 14.10 Though a distinction between loss and damage is relevant for some purposes, the terms are used interchangeably in this chapter.19 Damage or loss is what the employee suffers as the result of a breach; damages are the term for the monetary award made by the court to compensate for that loss or damage.20

Expectation, loss of bargain and reliance damages 14.11 The ordinary measure of damages compensates for the benefits the employee expects to receive if the contract were performed. The damages are not payable simply for thwarted expectations; ‘rather,

[page 824] damages are payable for the loss involved in non-performance of the contract. Even if a contract is not susceptible of specific performance, the other party is legally entitled to expect its performance’.21 The employee recovers the loss that he or she bargained for, whether it be wages or commission or some other benefit. In contrast, reliance damages are awarded to compensate a person who, in anticipation of performance of a contract, has spent money that is wasted as the result of the breach of the contract. Reliance damages rarely arise in employment law.22

Restitution damages and damages in restitution 14.12 The employee may recover restitution damages when he or she has conferred a benefit on an employer but is unable to recover the contract price as the employer has, in breach of the contract, prevented full performance of the contract. This type of damage is common in wrongful dismissal actions.23 Restitution damages are a different concept to damages in restitution. The purpose of damages in restitution is to place the defendant in the position it would have been in if the contract had been performed. Damages in restitution focuses on the benefit received by the employer; damages for breach of contract including restitution damages, focuses on the loss suffered by the employee.24

Equitable damages, equitable compensation and an account of profits 14.13 There are various bases under which monetary remedies are granted in equity, including an award of equitable compensation and an account of profits. These remedies are granted for breach of equitable obligations, not contractual obligations. Equitable compensation, as well as damages under Lord Cairns’ Act, has a compensatory purpose.25 [page 825]

Pecuniary and non-pecuniary loss 14.14 Loss may be either pecuniary or non-pecuniary. Pecuniary loss is measurable in money and is able to be calculated with a considerable degree of precision arithmetically. It includes sums such as loss of profits and damages for loss of remuneration during a notice period. Non-pecuniary loss is, of its nature, unable to be so measured in money. It includes damages for physical and mental pain and suffering. Although courts may award damages for non-pecuniary loss, the estimation of this loss is not an exact process.26

Nominal and substantial damages 14.15 Nominal damages are awarded when the contract has been breached but no loss has been proved.27 Where quantifiable loss is proved the damages are called substantial. The proof of loss or damage is not an essential element in an action for breach of contract.28 A party who proves a breach but no actual loss is entitled to judgment in his or her favour and an award of nominal damages.29 Nominal damages are by their nature minuscule.30

Aggravated and punitive damages 14.16 Aggravated damages are awarded to compensate a victim of a wrong when the harm done by a wrongful act was aggravated by the manner in which the act was done.31 Aggravated damages compensate for harm to the victim’s hurt feelings or dignity. They are compensatory in nature. Aggravated damages are not awarded for breach of contract, [page 826] but may be available for contravention of certain statutory protections: see 14.83–14.85. Punitive damages (also known as exemplary or vindictive damages) are awarded to express the disapproval of the court for particularly egregious acts of the wrongdoer.32 The purpose of punitive damages is to punish and deter.33 An award of punitive damages should only be made where the

conduct of the guilty party is outrageous and shocking.34 The actions that may justify an award of punitive damages include fraud, cruelty and malice. Similarly, such damages may be awarded if the wrongdoer contemptuously, wantonly or recklessly disregards the rights of the innocent party. Punitive damages have been awarded for various torts committed in the course of employment,35 including defamation, deceit, negligence and misfeasance in public office.36 In contrast with the penal nature of punitive damages, the purpose of damages for breach of contract is to compensate the innocent party. Accordingly, punitive damages are not awarded for breach of contract.37 Nor are they able to be awarded for a breach of a fiduciary duty by an employee or an employer.38 [page 827] Various statutes govern discriminatory dismissals in Australia. Their remedial provisions are principally compensatory.39 They generally do not permit the awarding of punitive damages. This conclusion accords with most of the sparse authority on point.40 Similarly, punitive damages are not awarded for the commission of the statutory wrong of unfair dismissal under the Fair Work Act. The principal purpose of an award of compensation for an unfair dismissal is compensatory, not punitive and the Fair Work Act and its predecessors have disavowed the notion that high awards of compensation should be made to penalise employers for particularly opprobrious dismissals.41 Under s 539 of the Fair Work Act a pecuniary penalty may be imposed upon an employer to penalise certain types of discriminatory dismissals.

Causation 14.17 Damages are only awarded for loss that is caused by the breach of the contract.42 The employee bears the onus of proving on the balance of probabilities that the breach caused the loss. Courts have generally avoided stipulating overly technical rules in determining whether the breach caused the loss.43 Causation is a question of fact and, as appellate courts have

stressed, is a matter of common sense.44 Liability for damages [page 828] may arise when there are multiple, concurrent causes of the loss, so long as the breach causally contributed to the loss.45 Some commentators approach causation by first applying the ‘but for’ test.46 Usually the satisfaction of the ‘but for’ test will establish causation; however, that test does not establish a comprehensive and exclusive criterion.47 At best it encapsulates a necessary but not sufficient condition that must be satisfied in proving causation, acting as a ‘threshold which [employees] must cross if their claim for damages is going to get anywhere’.48 Though this may be correct it distracts from the simpler and better approach that causation ‘is all ultimately a matter of common sense’.49 14.18 An intervening act of a third party connected to the loss may break the chain of causation between the breach and the loss. The intervening act must be of sufficient significance to lead a court to conclude that, as a matter of common sense, the loss was caused by the intervention of a third party, rather than the breach. Whether it does so depends upon the circumstances. The effect of the intervening act is a question of fact.50 At common law the contributory negligence of the employee does not provide a defence to an employer in an action for breach of contract.51 That position is modified by statute in most [page 829] jurisdictions when the damage arises from a breach of a concurrent duty in tort and contract.52

Causation in employment law 14.19 Issues of causation rarely arise in employment cases dealing with

termination of employment. It is axiomatic that a wrongful dismissal causes the employee to lose income that the employee would have received if the contract had been properly performed. Causation most commonly becomes a contested issue in four types of employment cases: 1. actions in which the employer’s breach has injured the employee’s future employment prospects; 2. cases concerning damages for physical or psychiatric injury;53 3. cases concerning the loss of a chance;54 and 4. cases in which the act of a third party may break the chain of causation.55 14.20 As to damages for an injury to future employment prospects, issues of causation have been important in the resolution of claims for stigma damages and in similar contexts.56 Stigma damages, discussed below in 14.86–14.90, are a type of damages for loss of reputation. They are awarded if an employer has committed a breach that handicaps or stigmatises an employee in the labour market and has caused harm to the employee’s employment opportunities. It is often difficult for the employee to prove that the breach has caused the subsequent difficulties in obtaining other employment. In Malik57 the employer conducted a dishonest and corrupt business in breach of contract. About 300 employees claimed that the employer’s [page 830] corruption handicapped their ability to obtain suitable alternative employment. One of the plaintiffs, Mr Husain, made 472 job applications in the seven years after the corruption was exposed and was only called for an interview on seven occasions. However, the employees were unable to prove that the former employer’s corruption in fact handicapped their attempts to obtain other employment. Prospective employers had declined the opportunity to employ Mr Husain for other reasons. Consequently, the claim for damages was rejected as the breach of the contract did not cause the loss alleged.58

Remoteness: the rule in Hadley v Baxendale 14.21 Loss caused by, but too remote from, the breach is not recoverable.59 The rule in Hadley v Baxendale marks out the limits of the kind of loss for which the employee is entitled to receive compensation. The rule is a limit on, rather than a ground of, liability. It establishes a boundary of the liability for loss caused by a breach.60 The rule is as follows: The [employee is only entitled] to recover such damages as arise naturally, that is, according to the usual course of things, from the breach of contract, or such damages as may reasonably be supposed to have been in the contemplation of both parties concerned at the time they made the contract as the probable result of the breach.61

The rule consists of a single principle with two limbs.62 The first limb in Hadley v Baxendale concerns damages that arise naturally from the breach. According to various formulations, these are damages recoverable if they are not unlikely, are on the cards, liable to result from the breach, or a serious possibility; but it is not necessary to show that the loss was a near certainty or an odds on probability.63 The test used in tort — that the damages are reasonably foreseeable — is not used in [page 831] contract. The second limb in Hadley v Baxendale concerns damages that may reasonably be in the contemplation of both parties.

Losses contemplated by the parties 14.22 The limbs are applied by reference to the knowledge of the parties, or at least the party in breach, at the time the contract was made.64 Every reasonable employer will know the loss that is likely to arise naturally from the breach and so that knowledge is imputed to the employer for the purposes of the first limb. The second limb will be satisfied if the employer knows that there are special circumstances under which the breach will cause unusual damage to the employee outside of the usual course of things. The test is objective and does not depend on proof of what was within the subjective contemplation of the employer.65

For example, in Guthrie, the employee was engaged on a three-year fixed term contract. He claimed that as a result of his wrongful dismissal he lost a valuable opportunity to renew his contract at the end of the fixed term. In addressing the issue of remoteness of that loss, Kaye J asked whether at the time at which the parties entered into the contract it may be reasonably supposed to have been in their contemplation that, as the probable result of a wrongful dismissal during the three-year term, the employee might suffer a loss of a valuable opportunity to renew or extend his contract with the employer. The answer was yes; such a loss was within the reasonable contemplation of the parties because of the senior, long-term and secure nature of the position, the fact that the contract contemplated it would be renegotiated towards the end of its fixed term and the fact that there were provisions dealing with possible redeployment at the end of the fixed term.66 14.23 To fall under the second limb the parties must contemplate the kind of loss, not necessarily the degree or extent of the loss or the precise circumstances that give rise to the loss.67 In Silvey v Pendragon Plc the employee was entitled to a pension payment from a trust fund if he had remained in employment until the age of 55. A fortnight before his 55th birthday his employer gave him 12 weeks’ pay in lieu of notice and told him that his employment was immediately terminated. The [page 832] liability to make the pension payments would have fallen on the trust if the employment contract had been performed. The United Kingdom Court of Appeal held that Mr Silvey was entitled to the pension payment as damages from his employer. It was well known that pension payments usually became payable when an employee turned 55. The kind of loss, being the loss of pension payments, was within the reasonable contemplation of the parties. A reasonable person in the position of the employer would have realised that a loss of pension rights was sufficiently likely to result from a breach of the contract.68

Proof of damages and the onus of proof

14.24 Damages are not the gist of an action for breach of contract. However, when an employee has suffered no compensable loss arising from the breach, or has not been able to satisfactorily prove the amount of the compensable loss, then only nominal damages will be awarded.69 Substantial damages are only recoverable if they are proved. It is the loss of the employee, not the gain to the employer, that is recovered.70 While the amount of damage must be proved with certainty, this only means that the amount must be proved with as much certainty as is reasonable in the circumstances.71 Inferences can be drawn against the party ‘whose actions have made an accurate determination … problematic’.72 The party alleging the breach bears the onus of proof in a claim for breach for contract. To recover damages an employee must prove that the employer has breached the contract; the loss has been caused by the breach; the amount of the loss caused by the breach; and the loss is not too remote to recover.73 In Ivory v Palmer the employee was wrongfully dismissed in breach of a contractual term that he would have a job for [page 833] life, a house to reside in and a home for his widow. The employee’s claim to recover damages for loss of the use of the home failed as he made no attempt to prove the value of the benefit.74 When an employee seeks to recover damages, the onus is on the employer to prove that the employee has failed to mitigate or has mitigated his or her damages.75

Time for assessment, continuing breaches and the once and for all rule 14.25 Damages are normally assessed at the date of the breach of the contract by reference to the circumstances at that date.76 There are two exceptions to this rule. First, there is an exception concerning some well-known categories of cases rarely relevant in actions for breaches of employment contracts.77 The second exception is that damages may be assessed at the date of judgment, or some other date, where required by fairness and justice or to

give effect to the compensatory purpose of damages.78 The general rule is that where there is a single cause of action arising from a once and for all breach then damages must be recovered once and for all in a single action. The damages recovered will be the past damages accruing before the commencement of the action and damages to take into account any prospective loss. Evidence can be led of events occurring after the breach affecting the calculation of damages.79 Considering post-breach events is particularly important where the assessment takes into account factual assumptions, predictions and estimations that, at the date of trial, are able to be proved or disproved.80 [page 834]

Continuing breaches 14.26 When assessing damages, and for various other purposes,81 it is important to distinguish between continuing breach of the contract and a ‘once and for all’ breach. A continuing breach arises when a party promises to maintain a state of affairs and fails to fulfil the promise.82 The continuing breach is ‘not constituted by repeated breaches of recurring obligations nor by intermittent breaches of a continuing obligation. There must be a quality of continuance both in the breach and in the obligation’.83 In such a case there is a breach at each moment that the party fails to fulfil the promise and a fresh cause of action arises every day.84 For example, if an employee has promised not to compete with her employer and breaches that promise, there is a continuing breach for as long as the competing business is carried on.85 Similarly, if an employer promises to provide work to the employee and fails to do so, there is a continuing breach for as long as the refusal persists.86 Though there is little authority on the issue, it is suggested that, prior to any election to terminate the contract, a wrongful dismissal is a continuing breach.

Once and for all breaches

14.27 In contrast, a ‘once and for all’ breach arises when a party does not fulfil a promise to do a specific act at a specific time. In such a case: … he has broken his covenant finally and his continued failure to do the act is nothing but a failure to remedy his past breach and not the commission of any further breach of his covenant. His duty is not considered as persisting and, so to speak, being forever renewed until he actually does that which he promised.87

For example, in NCB v Galley the employees promised to work each Saturday. Their failure to attend for work was a breach on the first [page 835] Saturday, and the second Saturday, and for each Saturday they refused to attend: but the breaches were separate and not one continuing breach.88 An employer’s failure to perform a promise to obtain a life insurance policy for an employee would be a once and for all breach whereas an employer’s failure to perform a promise to keep the life of the employee insured during the course of the employment is a continuing breach.89 Whether a breach is a once and for all breach or a continuing breach is a matter of construction.90 14.28 Whether the failure to pay wages amounts to a continuing breach or a ‘once and for all breach’ merits special mention. Applying the tests above, it appears that a regular failure to pay the agreed weekly wages at the end of each week would be a repeated breach of a recurring obligation and would be a once and for all breach for each week when there was an underpayment. There is some authority to the contrary, but it should be treated with some caution as some judgments appear to use the term ‘continuing breach’ somewhat loosely.91 There is also some authority to support the view that the non-payment of monetary amounts under an award is a continuing breach.92 Where there is a continuing breach the employee will have suffered some loss in the past. This can be recovered. If the breach persists then the employee may suffer loss in the future. This cannot be recovered in an action for damages: What cannot be recovered is compensation for injury not yet suffered but only apprehended. This is because such damage is not the product of any present or past breach of contract; if it be incurred in the future it will be the product of future breaches, should they occur, and not of what has been experienced to date.93

[page 836] There are at least two solutions to this bar on the recovery of prospective damages arising from a continuing breach. First, if the breach is sufficiently serious or a repudiation, the innocent party may elect to terminate and recover damages. Second, the innocent party may seek specific performance of the obligation, or damages under Lord Cairns’ Act in lieu of an order for specific performance. There is some authority to support the view that under Lord Cairns’ Act the innocent party may recover prospective damages arising from a continuing breach, notwithstanding the fact that the damage has not yet been suffered.94

Taxation 14.29 There are two issues concerning taxation which are discussed below: how are termination payments taxed and how should damages be adjusted to have regard to the taxation of such benefits. Putting to one side transitional arrangements,95 broadly speaking there is a concessional tax rate for eligible termination payments (ETPs)96 paid to97 living domestic employees98 on termination of employment. An ETP is a payment received by the employee ‘in consequence of’99 the termination within 12 months100 of the termination. ETPs include payments that follow as an effect or result from the termination for unused rostered days off or sick leave, payments in lieu of notice, a gratuity or ‘golden handshake’, compensation for loss of job and compensation for wrongful dismissal. An ETP does not include the payments referred to in s 82-135 that include superannuation benefits, annuities, unused annual or long service leave payments,101 the tax free part of a genuine [page 837] redundancy payment or early retirement scheme payment and reasonable payments for or in respect of a personal injury that affect the ability of the employee to derive income from personal exertion. An ETP is taxed at the

rate of 16.5% for employees over 55 and 31.5% for employees under that age.102 For payments above the ETP Cap amount103 the top marginal tax rate applies. A genuine redundancy payment is made when the employee is dismissed because the employee’s position is genuinely redundant. It consists only of the part of the termination payment that exceeds the amount that could reasonably be expected to be received by the employee as a result of a voluntary termination.104 A part of a genuine redundancy payment (and an early retirement payment) is tax free. The tax free part is equal to: base amount + (service amount × years of service). The base amount and the service amount are indexable annually. For an employee with 10 years’ service who is genuinely made redundant on 1 January 2011, the tax free portion is $48,766.105 Any redundancy payment in excess of that amount is taxed as an ETP, up to the ETP Cap amount. 14.30 The adjustment that needs to be made to an award of damages to reflect taxation is a somewhat vexed topic. High Court cases decided prior to the establishment of the ETP taxation scheme in 1983 have generally been distinguished by courts.106 Instead, two approaches have emerged.107 On one approach if the award of damages will be taxed in the employee’s hands the assessment of damages is made on the basis of the gross income of the employee. Adopting this approach, because ETPs and genuine redundancy payments are taxed in the hands of employees [page 838] they should be awarded as a gross amount.108 Most cases adopt this approach, but this largely appears to be because the parties by agreement proceed on the basis that gross figures should be used. On the other approach the amount of damages is awarded on a net basis and then grossed up to take into account the tax payable by the employee.109 The two approaches are illustrated by the following simple example. Assume a 50 year old is paid $150,000 per annum, is wrongfully dismissed after 20 years’ service and is entitled to 12 months’ notice. On current tax rates, if the employer had performed the contract and had paid wages to the

employee for 12 months the employee would have received $104,240 net of taxes. On the first approach to taxation discussed above the whole $150,000 is awarded as damages and, after deduction for taxation as an ETP, the employee receives the benefit of $102,750. On the second approach the net income of $104,240 is grossed up to $152,175 (being the net income divided by 0.685 to take account of the ETP tax rate).110 The employer is obliged to pay $152,175 as damages and, after deduction for taxation as an ETP, the employee receives the benefit of $104,240. Under this latter approach the calculations become much more complex when part of the damages are taxed as a genuine redundancy payment, part as an ETP and part at the top marginal tax rate.111

Interest and inflation 14.31 The assessment of damages does not directly take into account the prospect that inflation will depreciate the value of the award.112 [page 839] There are two aspects of compensation for interest. First, a damages award can be made for the loss of the use of money that was payable under the contract, whether by way of damages or a debt.113 For example, an employee who can prove that a redundancy payment would have been used to discharge a debt on which 15% interest was charged is able to recover damages for the interest paid on that debt between the accrual of the cause of action and judgment, so long such damages are not too remote.114 The function of such an award of interest is compensatory.115 Second, legislation in almost all jurisdictions grants a discretionary power to award interest on an award of damages to compensate the employee for being kept out of damages between the accrual of the cause of action and judgment.116 Depending on the statutory scheme that contains the source of the right, interest is usually awarded for both pecuniary and non-pecuniary losses and is not awarded for damages for loss in the future. The power to award compensation that includes a component for interest as damages is

independent from and is not limited by a statutory power to award interest.117

Compensation under statutory schemes 14.32 Compensation under statutory schemes is governed by the terms of the schemes. Analogies with the law governing damages for breach of contract may be helpful, but the primary task is always to determine what compensation is recoverable under the scheme.118 Three schemes are considered briefly here: compensation under the ACL; compensation for a contravention of the Fair Work Act; and compensation for discriminatory dismissals. Under s 236 of the ACL an employee who ‘suffers loss or damage because of the conduct’ of an employer in contravention of the various provisions of the ACL ‘may recover the amount of loss or damage’. Loss or damage includes injury.119 Under s 545 of the Fair Work Act the Federal [page 840] Court or the Federal Magistrates Court may make any order the court considers appropriate if the court is satisfied that a person has contravened, or proposes to contravene, a civil remedy provision. Those orders include, under ss 545(2)(b) ‘an order awarding compensation for loss that a person has suffered because of the contravention’.120 Various anti-discrimination laws allow for a monetary amount to be paid to compensate the employee for the financial loss he or she has suffered as the result of the discriminatory acts. The terms of each statute vary, but almost all grant the power to order ‘compensation’, ‘damages by way of compensation’ or an order to ‘compensate the complainant for the loss, damage or injury suffered’.121 14.33 Under each of these schemes the sole or principal purpose of an award is compensatory. As noted in 14.7, the settled principle governing the assessment of compensatory damages is that the wronged employee should receive compensation in the sum which, so far as money can do, will put the employee in the same position as he or she would have been in if the contract had been performed or the statutory wrong had not been committed.122 This

requires an assessment of the benefits the employee would have received if the wrongful act had not occurred.123 For example, for an employee dismissed in breach of anti-discrimination laws, the first step is to estimate the period of employment that the employee would have been likely to remain in employment if the discriminatory dismissal had not occurred and then calculate the remuneration (including non-wage benefits)124 the employee would have [page 841] received during this anticipated period of employment: that is, an amount to put the employee in the same financial position he or she would have been in but for the discriminatory dismissal. From this amount there is deducted remuneration the employee has earned (or is likely to earn) until the end of the anticipated period of employment in mitigation of the loss and the remuneration the employee would have earned if he or she had taken reasonable steps to mitigate his or her loss during the anticipated period of employment.125 14.34 Depending on the terms used in the legislation, the common law rules limiting damages for mental distress, damages to reputation, aggravated damages126 and punitive damages127 may or may not apply. Damages for mental distress may be awarded to compensate an employee for loss arising from a breach of the general protections provisions under the Fair Work Act128 and the ACL.129 Section 392(4) of the Fair Work Act expressly provides that compensation for unfair dismissal should not include compensation for shock, distress or humiliation. Punitive damages may not be recovered in actions under the ACL or (it appears) actions under the Fair Work Act and anti-discrimination laws.130 Aggravated damages may be recovered in actions under some discrimination statutes.131 In the context of actions under the ACL, it is necessary to prove that the employee suffered or will suffer loss or damage ‘because of’ [page 842]

the misleading conduct.132 The approach to causation under the ACL largely mirrors that adopted in breach of contract actions: the misleading conduct need not be the sole or principal cause of the loss or damage but must make at least a material contribution to it.133 Reliance by the employee on a misleading representation will prove causation.134 Principles governing loss of a chance under the ACL where a prospective employer has made a misleading representation about the security of employment and, in reliance on that representation, the employee leaves his or her current secure employment are discussed in 14.63.

DAMAGES IN AN EMPLOYMENT CONTEXT The action for wrongful dismissal 14.35 It is indubitably correct that the damages awarded to a wrongfully dismissed employee whose employment is terminable by notice is prima facie equal to the wages and other remuneration he or she would have earned during the notice period. To understand why this is so requires a brief examination of the structure of employment contracts. A wrongful dismissal is not merely a repudiation of future obligations; it is the breach of a term.135 It might be thought that an express or implied [page 843] term to provide an employee notice of termination carries with it the obligation to pay wages for the period of the notice. However, notice is not the same as service. A wrongful dismissal terminates the employment relationship, even if it does not terminate the contract.136 A wrongfully dismissed employee does not earn wages after the dismissal as service is a condition precedent to the earning of wages.137 A wrongfully dismissed employee is not deemed to have served the employer and earned wages after the dismissal during the period of notice, even if ready, willing and able to perform the contract.138 Where a party to any contract prevents the performance of a condition precedent the contract is not enforced as if the

condition has been actually fulfilled.139 Hence, the obligation to give notice is not the same as the obligation to pay wages during the period of notice; and no obligation to pay wages during the notice period arises because the condition precedent to the earning of wages is unfulfilled. [page 844]

The obligation to retain an employee in service 14.36 Since 1853 it has been accepted that an employer has an obligation to retain the employee in its service for the duration of the contract, subject to the exercise of any rights to terminate the contract.140 Professor Freedland in his seminal work The Contract of Employment after discussing Emmens v Elderton, stated: A majority of [the House of Lords] recognized that the ordinary contract of employment involved a duty upon the employer to maintain the employment relationship, and that this duty was the basis of a right of action in damages for wrongful dismissal … [a wrongful dismissal] gives rise to an action for breach of an implied undertaking by the employer to maintain the employment relationship.141

For contracts terminable by notice that obligation requires the employer to continue the employment until the contract is validly terminated at the expiration of the notice properly given. For fixed term employment the obligation requires the employer to continue the employment until the expiration of the fixed term, or until the contract is otherwise validly terminated.

The juristic basis of the obligation 14.37 Though the obligation to retain in employment is clear, its juristic basis is uncertain. The obligation is inferred from the nature of the parties’ performance obligations, in particular the fact that, in almost all employment contracts, the employer’s obligation to pay wages is a dependent obligation.142 It is probably a manifestation of [page 845]

the duty of cooperation discussed in 8.33. One formulation of that duty is that the employer must not do anything of its own motion to put an end to the state of circumstances which enables the employee to perform the contract.143 The duty may be expressed as a negative stipulation, rather than a positive obligation to cooperate actively, by describing it as an obligation not to prevent the further performance of the contract by the employee.144 On this approach a wrongful dismissal is wrongful because it prevents further performance of the contract by the employee: The contract is … to pay wages for service; and the breach of contract consists in not allowing the employee to continue in the service so as to get the wages.145

Given the range of juristic bases on which the obligation to retain in employment might rest, it is unsurprising that there are a series of different approaches to whether the obligation, however expressed, arises as a matter of construction of the contract or the implication of a term in fact or in law.146 Whether the obligation to retain in employment is a matter of construction or an implied term, it will not arise if it is inconsistent with an express term in the contract.147 In some rare cases the terms of engagement will not support the inference or implication that there is an obligation to retain for the contract’s duration. Where the contract is terminable by no notice there is no such obligation.148 In some commission-only contracts the employer may cease conducting an undertaking that is the subject of the contract and thereby prevent the employee earning any remuneration, but this line of authority can perhaps be rationalised on the basis that the employer or principal did not expressly or implicitly promise to [page 846] continue the business during the course of the employment or to grant the employee a continuing benefit.149

Breach of the obligation — a wrongful dismissal 14.38 A breach of the obligation to retain in employment for the duration of

the contract has a number of consequences. The breach will almost always be a serious breach and entitle the employee to terminate the contract.150 The wrongful dismissal will also almost always be a repudiation.151 In some employment contracts there is an obligation to provide work to the employee. The failure or refusal to provide work in accordance with the contract will ordinarily be a serious breach or a repudiation and will entitle the employee to terminate the contract.152 A wrongful dismissal puts an end to the relationship of employer and employee, even if the employee elects to affirm rather than terminate the contract.153 A wrongful dismissal prevents the employee serving the employer. As the wages of the employee are ordinarily earned through service, a wrongful dismissal prevents the employee earning remuneration after the dismissal:154 … the only result [of a wrongful dismissal] is that the servant, albeit he has been prevented from rendering services by the master’s breach, cannot recover remuneration under the contract because he has not earned it. He has not rendered the services for which remuneration is payable. His only money claim is for damages for being wrongfully prevented from earning his remuneration.155

[page 847] The employee is entitled to sue for damages as soon as he or she is wrongfully dismissed. The cause of action arises when the prevention of performance occurs and so it is not necessary for the employee to wait until the expiration of any notice.156 Suing for damages for a wrongful dismissal is usually an election to terminate. To recover damages the employee must be ready and willing to perform at the time of the election to terminate.157

Effect of a wrongful dismissal on the parties’ obligations 14.39 Where an employee is dismissed he or she is no longer required to serve the employer.158 This is clearly the case where a wrongfully dismissed employee elects to terminate the contract. It is also the case where such an employee elects to affirm the contract. Where an employer expressly or impliedly intimates that further performance of the employee’s obligation to serve is dispensed with, unnecessary or is no longer requested, the employee is relieved of that obligation. It is not necessary for the employee to attend the

premises and do a nugatory act.159 If the employer prevents the employee performing work by wrongfully dismissing the employee, then the employer cannot rely on the employee’s failure to serve to justify a termination of the contract.160 Dispensation with the requirement to serve (or the prevention of performance) is not the same as service as it will not earn wages.161 [page 848] An employer cannot compel the employee to perform the contract unless it has performed his or her essential contractual obligations in the past and is willing and able to perform those essential obligations in the future. Consequently, a restraint of trade clause will not be enforced against an employee who has been wrongfully dismissed or where the employer has seriously breached the contract by failing to comply with an obligation to provide work.162

Retraction of a wrongful dismissal 14.40 A party who repudiates the contract may retract that repudiation at any time prior to the exercise by the innocent party of the right to terminate. A wrongful dismissal (unlike a valid notice to terminate) can be retracted, at least to the extent that it only consists of a repudiation and not a serious breach.163 Such retractions are rare, but when they occur the contract will continue unbroken by the dismissal and retraction.164 The employee’s dispensation from performance of service after the wrongful dismissal does not apply when the employer has validly retracted the repudiation.165 Similarly, if the wrongfully dismissed employee elects to affirm, the employer can call on the employee to perform the obligation to serve, subject to the employer giving the employee reasonable notice of its changed position.166 14.41 There are five further points that should be noted about a wrongful dismissal action. First, in unusual cases a contract or statute may require the employer to pay wages independently of the performance of the contract by the employee. In such cases the wrongfully dismissed

[page 849] employee can recover the wages (not simply damages) when the employee has not performed service in accordance with the contract.167 Second, some officers are entitled to be paid the emoluments of office by virtue of holding the office, rather than performing service or carrying out the functions of that office. The right to payment of an officer and the conditions which must be met before payment is made will depend on the terms of the statute or instrument governing the office and the terms of the appointment to that office.168 When a public sector employee or officer is prevented by the employer from earning salary, he or she is entitled to damages for wrongful dismissal.169 A public sector employee or officer appointed for a fixed term is entitled to recover as damages the emoluments that would have accrued during that fixed term, subject to relevant deductions for mitigation and the ordinary adjustments made to damages awarded for breach.170 Where an officer’s appointment was for an indefinite duration there is some authority to support the view that compensation is assessed for the period during which there was a just expectation that the officer would continue to hold the office.171 These damages, in some cases, may not be the subject of a deduction to take into account the possibility that the officer may have been lawfully removed from office.172 When an officer is wrongfully removed from office an action for damages cannot be brought for breach of procedural fairness in the exercise of a statutory or prerogative power: the action must rest on a breach of the contract.173 [page 850] 14.42 Third, terms governing notice, whether express or implied, determine the period for which the employer must retain the employee in its service. There is a difference between notice and payment in lieu of notice which is explored in more detail at 14.101–14.107. Fourth, the remuneration the wrongfully dismissed employee would have earned during a notice period is not owed as debt, as illustrated by Hartley v Harman.174 In that case the

employee served for 18 months and earned salary. However, he was not paid that salary and was then wrongfully dismissed. He was entitled to one month’s notice. Hartley sued for the whole 19 months as damages. It was held that he was entitled to one month as damages, but the 18 months’ salary were recoverable as a debt, not damages. Whether an employee is entitled to certain payments, such as accrued leave, payable as a liquidated debt on termination depends on the terms of the contract and relevant statutes: see 14.66. 14.43 Finally, there is one quirk in a wrongful dismissal action that provides a gloss to this fourth point. In an action for wrongful dismissal the employee can recover an amount for unearned wages referable to an uncompleted entire obligation to serve.175 The issue arises in this way: assume an employee is employed under a contract under which he or she earns and is paid one month’s wages for one month’s service and is wrongfully dismissed after a week’s service. The employee has not earned wages for the week as he or she has not performed the entire obligation of one month’s service. The law provides two solutions to the problem: first, the employee can elect to terminate the contract and seek restitutionary relief relating to the week’s wages.176 Second, and more relevantly here, when the employee ‘sues for wrongful dismissal an allowance may be included in the damages awarded which might, if the servant had so elected, have been recovered upon a quantum merit upon an indebitatus count’.177 [page 851] That is, a wrongful dismissal damages award may include an amount to take into account the wages attributable to the period of actual service from the time of the last pay to the time of the dismissal.

Loss of remuneration caused by the breach 14.44 A wrongfully dismissed employee can recover damages for the loss of remuneration to which he or she would have been entitled if the contract had been lawfully performed: see 14.7. A wrongful dismissal is a breach of the

employer’s obligation to retain the employee in service for the duration of the contract: see 14.35–14.36. When an employee cannot fulfil a condition precedent to the earning of remuneration due to the wrongful termination of the service, the employer cannot rely on its own wrongful act to resist a claim for damages on the basis of the non-fulfilment. In Walker v Andrew the employee was entitled to a bonus if he served until the end of the financial year, but was dismissed due to the insolvency of the employer Galaxy before the financial year concluded. As the New South Wales Court of Appeal stated: The employment of [the employee] only terminated before the end of the financial year because of Galaxy’s insolvency, and Galaxy cannot be heard to rely on its own breach of contract, vis-avis [the employee], to constitute a non-fulfillment by him of a condition precedent to his otherwise qualifying for payment of his bonus.178

Amounts that would have accrued during the notice period 14.45 In an action for wrongful dismissal the employee can recover damages for the loss of benefits that had not vested or become payable on termination but which would have vested or become payable if the contract had been performed for the agreed term. This will include benefits such as an entitlement to annual and long service leave that would have arisen but for the dismissal,179 entitlements to leave that would have accrued during the period of notice,180 commissions and bonuses that would have become payable during the period of notice181 and service increments,182 [page 852] though probably not statutory rights to protection from unfair dismissal that would have arisen if the contract were performed.183 The amount the employee would have earned if the contract had been performed includes any increase in remuneration the employee was contractually entitled to receive during that period. In O’Laoire v Jackel International Ltd the employee, a deputy managing director, was entitled to six months’ notice and was wrongfully dismissed in October 1986. If he had remained employed in November 1986 he was

contractually entitled to be appointed as managing director and would have received a substantial increase in remuneration. The Court of Appeal held that, in light of this contractual right, he was entitled to have his damages assessed on the basis that he would have received the increase in remuneration.184

Entitlements during the notice period 14.46 To recover damage for loss of a benefit the employee must show that he or she would have been contractually entitled to the benefit if the contract had been performed: the employer is not liable for failing to do that which it has not agreed to do.185 It is insufficient for the employee to have an expectation, no matter how well founded, that an ex gratia benefit will be provided.186 There is some authority to support the view that an employee is entitled to recover overtime payments that would probably have been made if the employment had continued.187 The employee is entitled to recover damages for the loss of non-discretionary incentive payments that would have been payable during the notice period, whether described as bonuses or otherwise.188 The employee can recover from the employer the loss of benefits the employee would, but [page 853] for the employer’s breach, have received from third parties if that loss is not too remote.189

Non-wage benefits recoverable 14.47 The types of contractually conferred benefits for which damages can be recovered are only bounded by the ingenuity of the parties, the rules governing illegality and public policy in the case of some non-pecuniary benefits: see 14.77 and 14.92. Employees in wrongful dismissal actions have recovered damages for the loss of the use of a car,190 loss of free meals and the payment of a home phone account,191 tips,192 accommodation,193 medical and life insurance,194 cheaper travel fares,195 rights under share option

schemes196 and relocation expenses.197 Sometimes valuable benefits are provided to permit the employee to perform the contract, such as the use of a car or mobile phone. Where the employer is not contractually required to provide the benefit then no question of damage for loss of the benefit arises. Where the benefit is provided solely to permit the employee to perform the job (such as a car to only travel to and from jobs) then the employee suffers no [page 854] compensable loss from its denial.198 However, if the employee gains some value from a contractually agreed benefit then damages should compensate the employee for the full value of the loss. In Conway-Cook the employee was entitled to be provided with a fully maintained vehicle. The employee could use the vehicle for private purposes, but 50% of the $14,000 per annum cost of the vehicle was associated with business usage. The court awarded the full value of the loss to the employee, not just 50% of that value.199 A wrongfully dismissed employee can recover damages for the loss of superannuation contributions the employer is contractually obliged to make.200 Where the contract requires the superannuation contribution be paid to a fund for the benefit of the employee, the proper order is for the employer to pay the amount to that fund rather than to the employee.201 Pursuant to the Superannuation Guarantee Charge Act 1992 (Cth) an employer who fails to make superannuation contributions in relation to an employee is obliged to pay to the Commonwealth a surcharge. There is some support for the view that an employee can recover as damages for breach of a contract the superannuation contributions that the employer is obliged to make, but fails to make pursuant to that Act.202

The least burdensome performance rule 14.48 The least burdensome performance rule is that in the assessment of damages it is assumed that where the employer has several ways in which the contract might be lawfully performed the employer would adopt the mode

which is the least burdensome: ‘in an action for breach of contract a defendant is not liable in damages for not doing that which he or she has not promised to do’.203 The least burdensome performance rule only applies when the employer has a choice that is permitted by the [page 855] contract. An employer cannot avoid paying damages by asserting that the least burdensome option was to refuse to perform the contract.

The least burdensome performance rule and wrongful dismissals 14.49 The application of the least burdensome performance rule places a significant limitation on the damages recoverable by many wrongfully dismissed employees. For employees summarily but wrongfully dismissed for alleged misconduct, the law commences with the assumption that the employer would have exercised a right to terminate the contract by the giving of notice at the earliest date at which it could lawfully do so.204 That assumption is usually sound in cases of alleged misconduct because, as Russell LJ has observed, ‘an employer whose attitude to the employee has reached the stage that he is prepared to sack him out of hand is, to say the least, an unlikely source of future generosity’.205 The assumption has a weaker factual foundation in cases of constructive dismissal in which the employer may wish to retain the services of a valued employee in the long term.206 Courts will not assume that an employer will act irrationally or in a manner that reduces profits: ‘one must not assume that [the employer] will cut off his nose to spite his face and so control these events as to reduce his legal obligations to the [employee] by incurring greater loss in other respects’.207 Nor will the assumption be made when it is contrary to the evidence. As Mason CJ and Dawson J stated in Amann: Where compensation is sought in respect of the deprivation of a possible benefit which is dependent upon the unrestricted volition of another it may be impossible to say that any assessable loss results from the breach. However, this statement must be understood in the light of the principle that the mere existence of a contractual right in a party to terminate does

[page 856] not operate automatically to restrict the damages that can be awarded. The Court does not reach a conclusion by reference to an improbable factual hypothesis. The Court must have regard to the facts and evaluate the possible exercise of the right in all the relevant circumstances of the case.208

14.50 When dealing with the possibility that an employer may exercise a right to terminate the contract it is suggested that the appropriate course is to treat the decision to terminate as a hypothetical future event and award damages on the basis of a loss of chance. Walker v Citigroup is an illustration of these principles. The employee was headhunted and accepted an offer of employment. The contract provided for termination on one month’s notice that was not exercisable before the end of that calendar year. The employer purported to withdraw the offer before employment commenced. The employer argued that under the least burdensome performance rule it should be assumed that it would exercise the right to give notice as soon as possible, though there was no direct evidence that the employer would have done so. If the employer had performed the contract then Mr Walker would have commenced work and performed his duties for the better part of a year before any right to give one month’s notice had arisen. The Full Court stated: There is no satisfactory basis for concluding that had Walker been allowed to commence his duties and embark upon deploying his technical and academic skills and expertise on behalf of [the employer] that [the employer] would have exercised a right to bring the contract to an end on 1 month’s notice without cause exercised either immediately after the start of the contract or at all. That [the employer] would have sacked a skilled and competent employee holding a high profile position within the company without cause is not a natural inference to be drawn without direct evidence. To act in that fashion would deprive it of the services of a valuable employee and risk damage to its reputation in the financial community.209

There was a chance that the employer would not have immediately exercised its right to give notice. The damages awarded to Mr Walker were assessed by reference to that chance. [page 857]

The least burdensome performance rule, bonuses and discretions

14.51 The least burdensome performance rule applies when the employer has a choice about the ways in which it can perform the contract. In Lavarack the employer could choose whether or not to grant a pay rise to the employee. It had not agreed to do so and so no damages were recoverable for the loss of the pay rise: The law is concerned with legal obligations only and the law of contract only with legal obligations created by mutual agreement between contractors — not with the expectations, however reasonable, of one contractor that the other will do something that he has assumed no legal obligation to do. And so if the contract is broken or wrongly repudiated, the first task of the assessor of damages is to estimate as best he can what the plaintiff would have gained in money or money’s worth if the defendant had fulfilled his legal obligations and had done no more … the assumption to be made is that the [employer] has performed or will perform his legal obligations under his contract with the plaintiff and nothing more.210

Courts will ordinarily start with the assumption that an employer would not grant additional benefits to a dismissed employee that the employer was not obliged to confer.211 Nor will it usually be assumed that the employer would exercise an unfettered discretion in favour of a dismissed employee.212 This approach holds true even when the employee has a reasonable expectation, short of an enforceable promise, that such discretions will be exercised in his or her favour.213 Sometimes an assumption is made that the employer would, if it had the right to do so, have directed an employee to exhaust available sources of paid leave during the notice period to reduce the entitlements on termination.214 However, courts scrutinise the factual foundation of the assumption that the employer would act to deny the employee a discretionary benefit. Where pay rises and bonuses are, as a matter of fact, likely to be paid to [page 858] the employee then courts usually include them in damages awards.215 In Bold v Brough, Nicholson & Hall Ltd the employer was obliged to make contributions to a pension scheme. It was a substantial employer with subsidiaries and many employees. The scheme was able to be discontinued by the employer. Mr Bold was wrongfully dismissed two years into a 10-year fixed term contract. He sought the benefits he would have acquired under the scheme over the remaining eight years. The employer relied on the least

burdensome performance rule and argued Mr Bold was not entitled to damages relating to the pension contributions as it could have discontinued the scheme. The court disagreed: in assessing damages the court had to bear in mind all the probabilities and that it was unlikely the employer would have engaged in an act so disastrous for its relations with other employees merely to defeat a claim by Mr Bold.216 14.52 These cases need to be distinguished from two situations that often arise in the context of the awarding of bonuses. First, where an employer has reached an agreement to pay a bonus as a matter of right but has not specified the sum to be paid, then there is often an implied agreement that the employer shall pay a reasonable sum.217 Second, employment contracts often grant the employer express powers or discretions, unqualified in terms, to grant bonuses and related benefits to an employee. Powers and discretions are conferred for a purpose by the contract. The parties ordinarily contemplate that they will be exercised in a particular manner. It will often be a breach of the contract to exercise a discretion or power to deny a bonus, or withhold a benefit, arbitrarily, capriciously, unreasonably, dishonestly or for a collateral purpose.218 The [page 859] parties can, if they wish, agree that the employer’s discretion may be exercised capriciously, unreasonably or dishonestly; however, if that is their agreement ‘they need to say so clearly’.219 The content of this duty of good faith is discussed further at 8.31. The least burdensome performance rule is not excluded where the duty of good faith applies to the exercise of a discretion; instead, the least burdensome performance rule applies so that the employer is not required to pay in damages more than the employer, exercising the discretion in good faith, would have granted to the employee.

Loss of chance: general principles 14.53 An employee can recover damages where the breach by the employer

has resulted in the employee losing a chance to obtain a benefit. Damages for loss of a chance arise in two broad types of cases: Damages for loss of a commercial chance or opportunity will be recoverable in contract when the contract as a whole or a particular provision of a contract is such as to promise an opportunity or chance to obtain a benefit and, in other cases, where the loss of a business or commercial opportunity is the consequence of a breach of contract and the loss of the opportunity or chance falls within the rules of remoteness in contract. The task is to identify and characterize what, in substance, was promised and what has been lost or denied by the breach of contract.220

Under the first category the contract, or a term of it, promises an opportunity or chance to obtain a benefit. In the context of employment such promises are often found in terms giving the opportunity to earn a commission or bonus or for a pieceworker to earn remuneration. Issues of remoteness of the damage are not likely to be a problem in this category because the promise was to provide the chance itself. In the second category are cases in which the employee, as the consequence of a breach, loses an opportunity which would have accrued by reason of the performance of the contract.221 The opportunity need not be explicitly promised, but the damages will not be recoverable if they are too remote: see 14.22. For example, in WT Partnership (Aust) Pty Ltd v Sheldrick the employee was engaged in Malaysia under a contract that required his employer to provide him with three months’ notice. The employer wrongfully summarily terminated the employment. Mr Sheldrick had [page 860] to immediately leave Malaysia as a consequence of the breach. He was thereby denied the opportunity to remain in Malaysia during the three months’ notice and seek lucrative alternative employment. A Full Court of the Federal Court awarded Mr Sheldrick damages of $30,000 for the loss of chance to obtain lucrative employment that he may have obtained if the contract had not been breached.222 14.54 To recover substantial damages the employee must prove the amount of the compensable loss: see 14.24. Some types of loss are inherently difficult to prove. The existence of such difficulties does not prevent the recovery of that loss: ‘[the] fact that damages cannot be assessed with certainty does not

relieve the wrongdoer of the necessity of paying damages’.223 In cases concerning loss of a chance, the breach by the employer (such as a wrongful dismissal) has rendered it impossible to prove what would have occurred if the contract had not been breached. Damages may be assessed by reference to the probabilities or possibilities of what would have happened.224 The question then becomes: what is the possibility or probability that the employee would have succeed in, for example, earning the commission, or having the fixed term contract renewed? It is not necessary that the employee prove that he or she would have certainly succeeded, or even that the employee was likely to succeed.225 Damages can be assessed so long as the chance of success is more than speculative.226 The court [page 861] assesses the degree of probability that an event would have or might occur and adjusts its award to reflect that degree of probability.227 When assessing the possibility of a future event occurring the court will take into account contingencies and vicissitudes which may impact on the event occurring and make appropriate adjustments.228 The greater the number of contingencies, the lower the value of the chance. The higher the likelihood of the contingencies resolving in the employee’s favour, the higher the value of the chance. Courts often express the percentage of possibility or probability in calculating the amount of an award. They are entitled to take a global approach and award a lump sum.229

Loss of chance: commissions, renewal of contracts, job security provisions and the ACL 14.55 The general principles stated in 14.53–14.54 apply where a breach causes the employee to lose a chance to acquire a benefit. In employment law issues about loss of a chance are most commonly raised in three contexts, which are considered below: 1. the loss of a chance to acquire a commission, bonus or similar payment:

see 14.56; 2. the loss of a chance to have a fixed term contract renewed: see 14.58; and 3. the loss of a chance to remain in employment after the application of a contractually agreed job security clause: see 14.60. Similar issues also often arise in assessing loss in actions under the ACL: see 14.63.

Commissions, bonuses and the role of an employer’s discretion 14.56 The general principles concerning loss of a chance outlined in 14.53–14.54 are applied when, because of a breach by the employer, an employee is denied a promised opportunity to earn a bonus, commission or other payment. The task of the court in such cases is to assess what [page 862] position the employee would have been in had the employer performed its obligation. That will involve the court assessing the prospect of the employee being granted the payment and the quantum of the payment: ‘if the company’s obligation was to make a fair and rational assessment, the court’s task is to decide how in practice it would have fulfilled that obligation’.230 In Macdonald v Australian Wool Innovation Ltd the employee was entitled to a share in the profits of a project that the employer, in breach of the contract, decided not to proceed with. The project was high risk and may never have generated profits. Although the evidence of the value of the lost opportunity was tenuous, the court concluded that there was some prospect of a profit and awarded $50,000 in damages.231 A subset of such cases concerns employees, such as pieceworkers and employees who earn remuneration through commission, whose contracts contain an express or implied term that they will be provided with a reasonable amount of work to earn remuneration.232 An employer who wrongfully dismisses such an employee denies him or her the opportunity to earn remuneration. Damages can be awarded for the remuneration the

employee would have earned if the work had been provided.233 The same approach applies when the employer in breach of contract ceases to conduct a relevant business and thereby prevents the employee earning commission or piece rates.234 14.57 The possession of a discretion to award, or deny, a benefit makes matters more complex. Many such discretions are subject to the duty of good faith discussed in 8.28. They are not to be exercised arbitrarily, capriciously or unreasonably and must be exercised honestly and conformably with such obligations. In Silverbrook the contract provided that the employer would assess the employee’s performance against set objectives. It was required to pay a bonus if her performance satisfied the set objectives, subject to a clause that provided that the decision as to whether the employee should receive the bonus ‘was entirely within the discretion’ of the employer. The employer never set the objectives and never paid a bonus. The trial judge, whose decision was affirmed by the majority in the New South Wales Court of Appeal, found that if the objectives had [page 863] been set the employee would have met them and there was in the first year of employment a 75% chance the employer would have exercised its discretion to grant the bonus. In light of the employer’s obligations concerning the exercise of the discretion, Allsop P stated: Here, properly construed, the opportunity or chance was not so dependent upon the [employer’s] unrestrained discretion as to be impossible to say that the opportunity had a value. The opportunity or chance is to be measured by the probabilities and possibilities. Those possibilities and probabilities include how the [employer] would or might act. That, however, is an assessment of how the [employer] would or might act conformably with its contractual obligations in the manner I have discussed.235

If a court is satisfied that there is no chance that a discretion will be exercised in the employee’s favour then the chance of success is assessed as 0% and no damages are awarded. In O’Laoire v Jackel International Ltd (No 2) the employee was entitled to stock options under a scheme which were only exercisable with the consent of the board. Because of his wrongful dismissal he lost the chance of exercising the options. The board was so

antagonistic towards him that the court concluded there was no chance the board would have granted its consent and therefore the value of the lost chance was $0.236

Loss of an opportunity to renew or continue in employment 14.58 There is a sharp division of appellate authority in Australia concerning whether a wrongfully dismissed employee may recover damages for loss of an opportunity to renew a fixed term contract. On the one hand are cases denying such claims for a variety of reasons, often on the ground that the decision in Commonwealth v Amann Aviation is distinguishable from ordinary wrongful dismissal cases because it arose from a claim for reliance loss, rather than a claim for loss of expected benefits.237 However, after Commonwealth v Amann Aviation the High Court has subsequently stated that the principles governing [page 864] the assessment of damages for loss of a chance stated in Amann are applicable where there is a loss of a valuable opportunity.238 On the other hand are cases granting such claims for damages for loss of an opportunity to renew a fixed term contract and applying the principles set out in 14.53–14.54. In Martin v Tasmania Development and Resources the employee was engaged on a three-year fixed term contract that, after consulting with the employee, could be terminated on one month’s notice in the event of operational reasons. The employer did not consult with the employee, gave payment in lieu of notice instead of notice and, it was held on appeal, there were no operational reasons justifying the termination. At first instance and on appeal it was held that Mr Martin lost a valuable opportunity to have his fixed term contract renewed at the expiration of its term. Kiefel J stated that the least burdensome performance rule: … is itself subject to the rule in Hadley v Baxendale239 that a plaintiff is entitled to such damages as arise naturally from the breach or as may be supposed to have been in the contemplation of the parties, at the time they made their contract, as the probable result of the breach. If it was shown to have been in their contemplation, the plaintiff would be entitled to compensation. In [Commonwealth v Amann Aviation], the prospect of renewal would arise by Amann’s

performance of the contract. It was a distinct benefit which accrued by reason of its performance. The corollary was that the parties must necessarily have contemplated the loss of that prospect as the probable result of a repudiation or fundamental breach on the part of the Commonwealth. The question is then one of fact, applied to principle. His Honour found that if Mr Martin had performed the contract until the end of the three year term there would have been a real prospect of a renewed contract being offered, having regard to his skills. It is no answer to that finding, as TDR submitted, that it could be discerned from the events in question that TDR intended not to offer a further contract. The position with respect to the losses contemplated as flowing from TDR’s repudiation are to be assessed by reference to what the parties must have had in mind when they entered the contract.240

[page 865] 14.59 Assuming damages are recoverable for a failure to renew a fixed term contract, there are factors that usually considerably limit the damages. In cases of alleged misconduct the least burdensome performance rule often operates to support the conclusion that a wrongfully dismissed employee would have ceased employment at the expiration of the fixed term.241 Even absent proof of misconduct an employer may also satisfy the court that it would have declined the opportunity to renew the contract. For example, in Guthrie the employer was determined to terminate the employment, for good reasons or bad, and the court concluded in such circumstances there was no chance of a renewal.242

Damages for breaches of terms limiting the right to terminate 14.60 Contracts may include a wide variety of express terms limiting the right to terminate. The terms establish preconditions that must be met before notice can be given by, for example, requiring that the termination not be unfair, or that it not be on the ground of redundancy, or that procedural fairness be afforded before the termination occurs. When an employer wrongfully dismisses the employee without the precondition being met the employer’s liability for damages will prima facie be equal to the amount of remuneration which the employee would have earned between the date of the wrongful dismissal and the date that employer would have been able to terminate the contract lawfully. These principles are illustrated in Bostik. The employee was contractually

entitled not to be harshly, unjustly or unreasonably dismissed. The employer wrongfully dismissed the employee. Damages were assessed on the basis that the employee would have continued in employment until his employment was lawfully terminated: being the earliest date the employer was able to fairly, justly and reasonably terminate the employment. In calculating the damages the court took into account the ordinary contingencies, such as the prospect of redundancy at some time in the future.243 The effect of such a job security provision [page 866] is ‘not to exclude the least burdensome performance rule but to alter its operation in a way that [reduces] its utility to the employer’.244 This approach is consistent with the High Court decisions in Lucy v The Commonwealth245 and Ryan v The Commonwealth. The latter case concerned two employees who were employed under contracts that provided that they could be dismissed on the ground of incapacity or misconduct, but not otherwise. They were wrongfully dismissed when they reached the age of 65. The court concluded that one employee would have been fit to perform his duties until the age of 79; the other until the age of 81. Damages were assessed on the basis that they were entitled to their emoluments until those ages, subject to amounts likely to be earned in mitigation.246

Contracts promising procedural fairness 14.61 Some employment contracts contain an express promise that the employer will provide procedural fairness prior to a dismissal or consult with the employee. This is a promise to provide an opportunity or chance to obtain a benefit.247 Depending on the procedural requirements imposed, this opportunity may be valuable for employees who have not committed any alleged misconduct; however, for ‘guilty’ employees the procedure may only delay an inevitable dismissal. It should not be assumed that obligations of consultation or procedural fairness are worthless or only serve to defer the inevitable.

In Martin v Tasmania Development and Resources the employee was entitled to serve out his notice and be consulted about his possible redundancy before the employer dismissed him. Heerey J stated: … if [the employer] had complied with the contract and given a month’s notice and/or given Mr Martin an opportunity to be consulted … it would by no means necessarily follow that the result would be the same. On the evidence before me, Mr Martin had a powerful argument that even with the altered emphasis in the employer’s operations there was ample scope for his talents, skills and enthusiasm. It is not to be assumed that [the employee’s manager], a man with a background in scholarship as well

[page 867] as business administration, would shut his mind to new information and argument.248

14.62 It is suggested that damages for a breach of the promise to afford procedural fairness and analogous obligations should be assessed by determining the chance the employee would have remained in employment in the long term if procedural fairness had been provided.249 However, in the United Kingdom the Court of Appeal has adopted a quite different approach. In Gunton v Richmond-upon-Thames London Borough Council the employee was engaged under a contract that, in the case of allegations of misconduct, provided for a disciplinary procedure which would include a hearing and possible appeal. The employment was otherwise terminable on one month’s notice. The employer dismissed the employee for alleged misconduct without following the required procedure. The Court of Appeal held that damages for that breach were equal to the wages the employee would have received while the disciplinary procedure was being completed — what has been termed ‘the Gunton extension period’.250 No assessment was made of the chance of ‘acquittal’ of the employee. It has been suggested that this is a most unsatisfactory approach to determining damages.251 It proceeds on the assumption that the [page 868] employer would always have terminated the employment immediately after

the disciplinary process and completely discounts the chance that a fair hearing might result in the employer deciding not to terminate the employment. In the United Kingdom contractually agreed disciplinary procedures have a special role under the scheme governing unfair dismissals.252 As a consequence of that role, the Supreme Court has held that express terms governing the disciplinary procedure to be followed by the employers are not ordinary contractual terms and that the parties do not intend that a failure to comply with binding procedures will give rise to a contractual claim for damages.253 In Australia there is no similar statutory scheme requiring employment contracts to contain disciplinary procedures, or requiring those procedures to be incorporated into contracts or granting those procedures a special status in unfair dismissal proceedings. Due to these distinctions, among others, the approach taken by the Supreme Court to damages arising from a breach of express terms governing disciplinary procedures is unlikely to be followed in Australia.

Loss of chance under the ACL 14.63 In proceedings for damages under s 236 of the Australian Consumer Law the issue concerning loss of chance is slightly different. In an employment context the most common scenario in an action for contravention of s 18 of the ACL is that the prospective employer has made a misleading representation about the security of employment and, in reliance on that representation, the employee leaves his or her current secure employment. In O’Neill the Full Court stated: The misleading and deceptive conduct led Mr O’Neill to leave his secure employment and take other employment with MBF. He therefore left a job at a particular level of remuneration and took up other employment which came to an end a little over two years later. He was then employed in occasional temporary employment and then in more permanent employment. Any loss he suffered was the loss flowing from him relying on the misleading and deceptive conduct. One way that loss could be quantified would be to ascertain the difference (if any) between the

[page 869] salary he would have been earning in employment with National Mutual and the income he then received in the position with MBF and in the employment he entered or might enter after being

made redundant by MBF. The damages would be the difference over the period it was likely Mr O’Neill would have stayed in employment with National Mutual.254

Damages are not assessed on the basis that the employer is obliged to make good the misleading representation; rather, the loss of the employee requires an assessment of the benefits the employee would have received if the wrongful act had not occurred. In such cases the uncertain event is what would have happened if the employee had not left the previous secure employment and damages are assessed largely by reference to the chances of the employee continuing to enjoy the benefits of the former position.255

Fixed term contracts 14.64 The most common form of fixed term contract provides that during its term the employment cannot be terminated by the employer, except for serious breach. In such a case a wrongfully dismissed employee is prima facie entitled to recover the amount that he or she would have earned had the employment continued for the duration of the contract; that is, the remuneration until the expiration of the fixed term.256 The employee is also entitled to the non-wage benefits for that period.257 The ordinary principles of mitigation apply to fixed term contracts,258 except where the contract provides that on termination the employee is entitled to be paid a sum for the balance of the term as a debt. If the contract provides that it may be terminated by notice during the fixed term then, in accordance with the least burdensome performance rule, ordinarily the employee is limited to recovering the amount he or she would have [page 870] earned during the notice period. The principles governing damages for the non-renewal of a fixed term contract are discussed in 14.58–14.59. 14.65 There are two other matters of special importance in assessing damages for wrongfully dismissed fixed term employees. First, when assessing damages for the failure to permit an employee to serve for the whole of a fixed term the court is determining the chance that a future event might or

might not occur. Damages will be discounted to take into account contingencies and vicissitudes which may have resulted in the contract terminating before the expiration of the fixed term. This will commonly include adjustments for the prospect that the employee might have resigned, or died, or the employment being terminated by the employer for a lawful reason.259 Second, when an employee receives damages for future loss he or she receives the benefit of receiving a lump sum in advance of the time he or she would have received the payment if the contract had been performed. As ‘a given sum of money in hand is worth more than the like sum of money payable in the future’, if the award is not discounted the employee may be overcompensated.260 There is some authority to support the view that an award for future loss should be discounted by 3%.261

Debt and payments due on termination of employment 14.66 A debt is a liquidated, fixed sum of money owed. Failure to pay a contract debt is not a mere breach of contract; it is the detention of a sum of money.262 When an action is brought to recover the debt the employee is not required to prove that a breach has caused loss or damage and the employee is not required to mitigate a debt.263 Where the contract requires the payment be made to a third party, an order for specific [page 871] performance may be made.264 Wages earned are a debt, as are other types of remuneration in the form of a liquidated sum such as a commission or bonus earned.265 The amounts payable on termination depend on the terms of the contract. An express term requiring the employer to make a payment in lieu of notice or redundancy pay will create a debt rather than an obligation to pay damages.266 There is a distinction between the accrual of a right to take leave (such as sick, annual or long service leave) and the right to be paid an amount equal to the value of the leave on termination. Some contracts create an express

obligation to pay an amount equal to the value of the accrued leave on termination. In the absence of an express term it may be difficult to imply a contractual obligation to pay out the accrued benefits.267 The Fair Work Act, industrial instruments and other statutes create some obligations to pay out accrued annual and long service leave to employees on termination.268

DAMAGES FOR MENTAL DISTRESS, LOSS OF REPUTATION AND THE MANNER OF DISMISSAL Overview and summary 14.67 Most wrongfully dismissed employees will be disappointed, annoyed or vexed that the contract was not performed. Some may be humiliated or distressed by the fact of the dismissal. The law accepts that feelings of hurt and mental anxiety are damage.269 Most of these reactions arise naturally from the breach of the contract.270 Occasionally a dismissal will cause a psychiatric illness. In some cases these reactions [page 872] will be caused by the manner of the dismissal, rather than the fact of the dismissal. The harm suffered by the employee may be aggravated by contemptuous or deliberately humiliating treatment. A wrongful dismissal also carries with it a certain obloquy. It will sometimes have a detrimental effect on the employee’s reputation and adversely affect the employee’s future career prospects. 14.68 One of the more controversial fields in employment law concerns the recovery of damages by employees for mental distress, loss of reputation and damages arising from the manner of a wrongful dismissal and other breaches of the contract. Broadly speaking, the law can be summarised in the following propositions. First, damages may not be awarded to an employee to compensate for the

mental distress or psychiatric injury caused by a wrongful dismissal, or (probably) for mental distress or psychiatric injury arising from a dismissal caused by a breach of the implied term of trust and confidence: see 14.77–14.79. However, when the breach does not arise from the dismissal damages for psychiatric injury can be recovered. Damages may be recovered for mental distress arising from a physical inconvenience suffered by an employee caused by a breach. Also, such damages are recoverable for breach of an express or implied term whose principal object is to provide freedom from distress: see 14.80–14.81. Second, damages may not be awarded in contract for loss caused by the manner of the breach of the contract. Put another way, aggravated damages are unavailable for any breach of an express or implied term of an employment contract: see 14.83–14.85. Third, damages for wrongful dismissal may not be awarded to an employee to compensate for the fact that a wrongful dismissal makes it more difficult to obtain future employment or causes damage to the employee’s reputation. However, damages may be awarded to compensate for such loss for breach of the implied term of trust and confidence or for breach of an express term, subject to certain qualifications mentioned below: see 14.86–14.90. Damages for injury to the employee’s reputation are recoverable when the employee has a right to be provided with work to retain or enhance the employee’s reputation: see 14.91. Before considering each of these points, there is a discussion of the five cases that currently largely govern in this field of employment law: see 14.69–14.76. In 14.32–14.34 there is a discussion of the extent to which damages for mental distress, damages to reputation, aggravated damages and punitive damages are recoverable under the ACL, the Fair Work Act and various anti-discrimination laws. [page 873]

The troublesome quintet: Addis, Malik, Johnson, Eastwood and Edwards

14.69 Five decisions of the House of Lords dominate this field of employment law like no others: Addis v Gramophone Co Ltd (Addis), Malik v Bank of Credit and Commerce International SA (Malik), Johnson v Unisys Ltd (Johnson), Eastwood v Magnox Electric plc (Eastwood) and Edwards v Chesterfield Royal Hospital NHS Foundation Trust (Edwards).271 The extent to which the principles established by these cases have been adopted in Australia, and modified by exceptions, is discussed in 14.77–14.92.

Addis v Gramophone Co Ltd 14.70 The traditional starting point in examining this area is the decision in 1909 in Addis.272 Mr Addis was the Calcutta manager of the employer. His contract was terminable on six months’ notice. His remuneration consisted of salary and commission. In October 1905 he was given six months’ notice, but was immediately replaced as manager and prevented from earning future commission. The replacement of Mr Addis with another was a breach of his contract. The dismissal was carried out in a manner that ‘could not but import obloquy among the commercial community of India’.273 Mr Addis sued for damages. A jury awarded Mr Addis £600 for wrongful dismissal (about nine months’ salary) and £340 for loss of commission. The award for loss of commission was endorsed by the Law Lords. A majority of the House of Lords set aside the jury award of £600 for wrongful dismissal and instead decided that Mr Addis was only entitled to six months’ salary, thereby reducing the damages by £200. It was not clear if the £200 had been awarded as aggravated damages, to compensate for the mental stress of the dismissal, or to compensate for the fact that the obloquy associated with breach had made the acquisition of future employment more difficult. [page 874] 14.71 The Law Lords decided, first, that aggravated damages are not awarded for breach of contract274 and therefore damages may not be awarded in an action for wrongful dismissal for loss caused by the manner of the breach of the contract.275 Second, damages may not be awarded to an employee to

compensate for the mental distress caused by a wrongful dismissal.276 Third, damages for wrongful dismissal may not be awarded to an employee to compensate for the fact that the dismissal makes it more difficult to obtain future employment.277 Each of the Lords (other than the dissenter Lord Collins) agreed upon the first point. It is not clear whether a majority of the House of Lords adopted the second and third points. Although only Lord Loreburn specifically addressed the final two points,278 Lords James, Atkinson, Gorell and Shaw endorsed, in varying degrees, the judgment of Lord Loreburn on the final two points.279 The exact ratio of Addis has remained so opaque280 that at times Addis has acted as a kind of judicial Rorschach test. One unfortunate consequence of this uncertainty is that it is difficult to ascertain what is meant by courts and commentators when they refer to the rule in Addis. Most courts have accepted that Addis is authority for the proposition that in an action for wrongful dismissal an employee cannot recover damages [page 875] for loss caused by the manner of the dismissal, damages for mental distress and damages for loss of reputation caused by the dismissal.281

Malik v Bank of Credit and Commerce International SA 14.72 The next leading case, Malik,282 concerned an employer who conducted a dishonest and corrupt business. That conduct breached the implied term of trust and confidence. Mr Malik was not aware of the corruption. After his employment was terminated the corruption and dishonesty of his employer became widely known and Mr Malik claimed that as a consequence he was handicapped in the labour market. The House of Lords decided that Mr Malik could recover what it termed stigma damages283 caused by the breach of the implied term. Stigma damages are pecuniary damages to compensate for harm done to the employee’s future employment prospects. The majority held that damages for breaches of the implied term of trust and confidence should be assessed in accordance with ordinary

contractual principles.284 Stigma damages could be recovered for damage to the employee’s future employment prospects and, it suggested in dicta, damages for harm to the employee’s reputation could also be recovered: … provided that a relevant breach of contract can be established, and the requirements of causation, remoteness and mitigation can be satisfied, there is no good reason why in the field of employment law recovery of financial loss in respect of damage to reputation caused by breach of contract is necessarily excluded.285

Malik was not a case in which the damage was associated with the employee’s dismissal. The decision only establishes that damages arising from a breach of the implied term occurring during the course of employment are recoverable to compensate for harm done to the employee’s future employment prospects. Whether such damages are [page 876] also recoverable when they arise from the termination of the employment was considered in Johnson.

Johnson v Unisys Ltd, Eastwood v Magnox Electric plc and Edwards 14.73 In Johnson286 the employee was given notice in accordance with his contract. As a consequence of the manner and the fact of his dismissal Mr Johnson became depressed, suicidal and was admitted as a patient of a psychiatric hospital for the five months following his dismissal. In later years he was readmitted to the psychiatric hospital twice, underwent intensive psychotherapy and received a course of antidepressant drugs for depression, mood swings and alcohol dependence. The employee sought damages for breach of the implied term of trust and confidence and in tort for psychiatric injury arising from his dismissal.287 The principal reason the claim failed was that there was an unfair dismissal system operating in the United Kingdom that granted Mr Johnson the right to recover compensation for distress and psychiatric damage arising from an unfair dismissal.288 The majority held that damages for distress were irrecoverable if they flowed directly from the dismissal or ‘in the course of

the dismissal process’.289 These are damages within what is now termed ‘the Johnson exclusion area’. Outside of that area are losses that arise from a cause of action that exists independently of the dismissal.290 14.74 The decision in Eastwood relevantly dealt with two cases.291 In Eastwood the employee had a disagreement with his supervisor. The supervisor counselled fellow employees to make false statements against Eastwood, sought information that could be used to ‘destroy’ the employee, and conducted a campaign over four months to demoralise and undermine him. The employee was dismissed and suffered from a depressive illness. In McCabe allegations were made against the employee. The employee was dismissed and suffered from a depressive [page 877] illness. It was alleged the employer breached the contract by failing to investigate the allegations and conduct disciplinary hearings properly. In both cases the employees resolved their unfair dismissal claims and pursued actions seeking to recover damages for the psychiatric injury suffered as a result of the breach of the implied term of trust and confidence and in tort. The majority held that the employees could recover loss under a cause of action acquired292 prior to the dismissals, but could not recover loss that arose by reason of the dismissal.293 Usually there is no loss associated with actions prior to the dismissal (unless the employee is suspended without pay or the psychiatric injury occurs prior to the dismissal).294 The decision in Edwards dealt with two cases.295 In both the breach alleged was a failure to comply with an express term that required the employer to follow certain disciplinary procedures before dismissing the employee. The damage claimed consisted of the loss of future earnings and damage to the employees’ reputations that arose as a consequence of the employer’s failure to follow the correct procedure. The Supreme Court held by a majority that express terms governing the disciplinary procedure were not ordinary contractual terms.296 Given the unfair dismissal system operating in the United Kingdom and the special role that disciplinary procedures play under governing statutes,297 the parties to an employment

contract did not intend that a failure to comply with contractually binding disciplinary procedures would give rise to a common law claim for damages, unless they otherwise expressly agreed.298 Further, the court held that the Johnson exclusion area referred to in 14.73 applied to breaches of express terms. The damages sought by the employees in Edwards were not recoverable as they flowed from the [page 878] fact or manner of the dismissals or from the steps leading to and part of the same process as the dismissals and were thereby within the Johnson exclusion area.299

A summary of Addis, Malik, Johnson, Eastwood and Edwards 14.75 The five cases can be summarised as follows: Damages may not be awarded in contract for loss caused by the manner of the breach of the contract.300 This proposition is true even when the breach occurs during the course of the employment or the damages arise from a breach of the implied term of trust and confidence301 or an express term.302 Damages may not be awarded to an employee to compensate for the mental distress caused by a wrongful dismissal,303 or perhaps even for the breach of an express term.304 Nor may damages be awarded in tort or contract for psychiatric injury arising by reason of a dismissal as such damage is within the Johnson exclusion area.305 However, damages for psychiatric injury can be recovered if the cause of action was acquired prior to the dismissal for loss that does not arise by reason of the dismissal.306 Damages for wrongful dismissal may not be awarded to an employee to compensate for the fact that the dismissal makes it more difficult to obtain future employment or causes damage to the employee’s reputation.307 Such damage is not recoverable if it falls within the Johnson exclusion area. However, damages may be awarded to

[page 879] compensate for such loss for breach of the implied term of trust and confidence or an express term that falls outside of that area.308 14.76 The creation of the Johnson exclusion area has, quite rightly, been subject to considerable criticism, even among the Law Lords who created it.309 One difficulty is distinguishing between losses that flow from the dismissal as opposed to the events prior to the dismissal in circumstances in which the disciplinary process and the dismissal are often part of the one process.310 Another difficulty is the fact that ‘an employer may be better off dismissing an employee rather than suspending him’,311 especially if the employee is particularly vulnerable and susceptible to psychiatric damage. Another is the fact that unfair dismissal systems, like other labour law rights, are commonly thought of as a floor of rights, rather than a ceiling preventing the growth of the common law.312 Another is that the creation of the Johnson exclusion area encourages a multiplicity of actions: one action for unfair dismissal to recover for psychiatric injury arising from the dismissal and a second action at common law to recover for psychiatric injury arising from events prior to the dismissal.313 These criticisms are discussed in 14.92–14.95 below.

Damages for mental distress: the general rule and its exceptions 14.77 The general rule is that damages for mental distress are not recoverable in actions for breach of contract, unless the damages fall [page 880] within one of the limited exceptions discussed below.314 The rule prevents the recovery of damages for mental distress caused by the manner of the dismissal and the fact of the dismissal.315 It also prevents the recovery of damages for mental distress caused by breaches of contract occurring during

the course of employment that are unrelated to the dismissal, such as a breach of the implied term of trust and confidence.316 The term ‘mental distress’ refers to a transient state of anxiety, stress, mental suffering and the state of being upset or frustrated.317 The concepts of mental distress and psychiatric injury are closely related. It has been said that the common law draws fine, though somewhat artificial, distinctions between them.318 Mental distress is not an injury in itself as that term is used in contract and tort law.319 Damages can be recovered [page 881] for a breach causing an injury: see 14.79. There is also some overlap between the concept of mental distress and damage to the employee’s reputation. A wrongful dismissal might result in the diminution of the employee’s reputation which becomes in itself a source of distress.320 14.78 There are three significant exceptions to the general rule that damages for mental distress are not recoverable in actions for breach of employment contracts. First, where the breach causes a physical or psychiatric injury: see 14.79. Second, where the breach causes physical inconvenience: see 14.80. Third, where an object of the term breached is to provide freedom from distress: see 14.81. Where damages are awardable for distress they tend to be modest because they are compensating for a transient state and not a permanent injury.321 As distress is not an injury and refers to the transient subjective state of being upset, it is doubtful that it can be the subject of expert evidence.322

Physical and psychiatric injury 14.79 An employee may recover damages for pain and suffering where the employer’s breach of contract causes injury to the employee.323 Damages are also recoverable when the breach exacerbates an injury.324 It is common for such damages to be awarded for physical harm caused by the breach of the duty of care.325 There is a difference between mere mental distress and a psychiatric injury.326

[page 882] In the mid-1990s these principles were applied in some cases to grant damages to employees who suffered from psychiatric injuries caused by their wrongful dismissal.327 However, on the current state of the authorities it must now be seriously doubted whether such damages are recoverable when they arise from the fact or manner of the employee’s dismissal.328 Damages may be recoverable for psychiatric injury which arises from a breach of other terms of the contract (including a breach of the implied term of trust and confidence) during the course of employment329 or perhaps as the result of a breach of an express term.330 In most jurisdictions there is a statutory limitation on the recovery of such damages when they arise from reasonable actions of the employer.331 In Attorney-General v Gilbert the employer owed a contractual duty to Mr Gilbert to maintain a safe workplace. In breach of that duty the employer imposed an excessive workload on Mr Gilbert, failed to manage the office properly and did not provide sufficient resources for the performance of the work. These breaches caused Mr Gilbert to suffer stress and exhaustion which in turn was a major factor in the development of heart disease. Mr Gilbert recovered damages for the physical injuries (the heart disease) caused by the psychological state (stress), despite the fact that the heart disease was not directly caused by [page 883] the breach.332 Where the employee is awarded damages to compensate for the pain and suffering caused by an injury, the court may also award damages for mental distress associated with the physical or psychiatric injury to the employee.333

Breaches causing physical inconvenience 14.80 Damages are recoverable for physical inconvenience to the employee caused by the breach of contract.334 Damages may be awarded for mental

distress directly related to such inconvenience.335 In Burton v Pinkerton the employee, a crew member on a ship, lawfully refused to continue to serve after he became aware that the ship was carrying ammunition to Peru which had entered hostilities with Spain. He left the ship in Rio de Janeiro due to the employer’s breach of the contract. He recovered damages for ‘the inconveniences and annoyances’ he suffered as a result.336 More recently in Sheldrick v WT Partnership (Aust) Pty Ltd the Federal Court awarded an employee damages for ‘the vexation, stress and disappointment of being summarily dismissed and having to relocate back to Australia’.337 Mr Sheldrick, who was based in Malaysia, was wrongfully dismissed. As a consequence he and his family had to promptly leave Malaysia. If he had not been wrongfully dismissed then he would have probably remained in Malaysia, thereby obviating the need to relocate. It appears (though it is not certain) that the court awarded $10,000 in damages because of the physical [page 884] inconvenience to the employee and the mental distress associated with the relocation.

Terms for enjoyment and freedom from anxiety 14.81 One exception to the general rule stated in 14.77 is that damages for mental distress are recoverable where a major or important object of the term breached is to provide pleasure, relaxation or freedom from distress:338 … if a contract contains a promise, express or implied, that the [employer] will not cause the [employee], or will protect the [employee] from, disappointment of mind, it cannot be said that disappointment of mind resulting from breach of the promise is too remote.339

This exception is outside of the rationale of the general rule: ‘such injury is not only within the contemplation of the parties but is the direct result of the breach itself and not the manner of the breach’.340 In some cases an object of the whole contract is to provide such happiness, such as a contract with a travel agent to arrange a holiday. An employment

contract is not such a contract.341 However, to fall within this exception an object of the whole contract need not be freedom from distress; it is sufficient if an object of the term breached is to provide that freedom.342 Whether a term meets that description may be objectively inferred from the nature of the term, or it may be the subject of an express or implicit intimation from the employee that a particular matter is of importance to him or her.343 In a wrongful dismissal action the term breached is the implied promise to retain an employee for the duration of the agreed period of employment: see 14.36. It is not an object of that term to provide freedom from distress.344 However, a term that the [page 885] employee will be treated fairly might have freedom from distress as an object.345 14.82 There is some authority to support the view that an employee can recover damages for distress for breach of the implied term of trust and confidence. In Quinn v Gray the contract provided that the employer could give six months’ written notice. It conducted an investigation into allegations of misconduct. A committee of inquiry was established which held hearings and delivered a report that recommended dismissal. The employee was then dismissed. The employee was not advised of the outcome of the inquiry or given an opportunity to respond to all of the material received by the committee. These failures constituted a breach of the term of trust and confidence. The employee sought damages for distress and disappointment arising from this breach. The court held that the object of the mutual trust and confidence term was the prevention of distress. The employee recovered $35,000. There was no discussion of whether the damages were within the Johnson exclusion area.346

Aggravated damages and the manner of and motive for the breach 14.83 Damages are not recoverable for the manner of the breach of the

contract.347 An employer who wrongfully dismisses an employee in a harsh, pitiless or contemptuous manner is not required to pay more damages than an employer who wrongfully dismisses an employee with grace, empathy and consideration: damages ‘cannot include compensation for the employee’s injured feelings because he has been dismissed in an offensive and humiliating manner’.348 Where the manner of the dismissal leads to distress, the difficulties in recovering damages discussed in 14.77–14.78 are relevant. Where the manner of the dismissal leads to damage to the employee’s reputation or diminished [page 886] employment prospects, the difficulties in recovering damages discussed in 14.86–14.90 are relevant. For the best part of a decade there was considerable debate about whether damages were recoverable for the manner of the breach of the implied term of trust and confidence. That debate appears to have now been settled or is at least close to interment: damages for the manner of the breach of the implied term are not recoverable,349 but damages for a diminution in employment prospects arising from the breach may be recoverable: see 14.88.

Aggravated damages in contract and for breach of statute 14.84 The proposition that damages are not recoverable for the manner of the breach of the contract is another way of saying that aggravated damages are not recoverable for such a breach. Aggravated damages are awarded to compensate a victim of a wrong when the harm that was done by a wrongful act ‘was aggravated by the manner in which the act was done’.350 Aggravated damages compensate for harm to the victim’s hurt feelings or dignity. They are commonly awarded when the aggravation arises from the manner in which a wrong is done, or from the motives for doing the wrong or the conduct subsequent to the doing of the wrong. Aggravated damages are compensatory in nature, although they also sometimes serve ‘punitive and deterrent functions at the same time’.351

Consequently, it is sometimes difficult to draw a clear distinction between aggravated damages that compensate, punish and deter and exemplary damages that only punish and deter but do not compensate. For many years prior to the decision in Rookes v Barnard courts drew little distinction between the two types of damages.352 However, the High Court has affirmed the distinction in the following terms: Aggravated damages, in contrast to exemplary damages, are compensatory in nature, being awarded for injury to the plaintiff’s feelings caused by insult, humiliation and the like. Exemplary damages, on the other hand, go beyond compensation and are awarded ‘as a punishment to the guilty,

[page 887] to deter from any such proceedings for the future, and as proof of the detestation of the jury to the action itself’.353

14.85 Aggravated damages are not recoverable for breaches of contracts.354 They are recoverable for a range of torts.355 In an employment context aggravated damages are most commonly awarded in discrimination claims based on a statutory cause of action.356 For example, in Prison Service v Johnson the employee complained of racial discrimination to his employer. The residential governor of the prison was appointed to investigate the complaint. The industrial tribunal found that the governor’s investigation was ‘a travesty’; he had failed to properly investigate the complaint and had concluded that the employee ‘was obsessed with his colour and that all of the troubles were in his own mind’.357 The inappropriate investigation had added to the injury of the employee. Aggravated damages were awarded because the ‘employer’s actions rubbed salt in the applicant’s wounds’.358

Damages for loss of reputation and diminished future employment prospects 14.86 There are at least four issues that arise when considering whether damages are recoverable to compensate for a breach that makes it more difficult to obtain future employment or causes damage to the employee’s reputation: first, whether such damages are recoverable in an action for

wrongful dismissal: see 14.87. Second, whether such damages are recoverable for a breach of the implied term of trust and confidence: see 14.88. Third, whether such damages are recoverable for a breach of an express term or another term of the contract: see 14.89. Fourth, whether damages are recoverable for breach of a term that an employer provide work to the employee to permit the enhancement of the employee’s reputation: see 14.91. [page 888] 14.87 Damages for wrongful dismissal may not be awarded to an employee to compensate for the fact that the dismissal (or the manner of the dismissal) makes it more difficult to obtain future employment or causes damage to the employee’s reputation.359 Though it is supported by a wealth of authority, it is suggested by way of comment that this approach has little to recommend it as a matter of principle. It is broadly accepted that a dismissal of an employee, without proper justification, has a detrimental effect on the employee’s reputation.360 This is especially so when the dismissal is based on an allegation of serious misconduct that proves to be incorrect. The damage to the employee — the stigma associated with the dismissal — may make it more difficult to acquire future employment.361 Such damage may be caused by a wrongful dismissal and meet the ordinary principles of remoteness. There is also a distinction, rarely made explicit in the cases, between the two types of damage under consideration. Compensation awarded for the difficulty in obtaining future employment is for pecuniary loss: it is for a financial, material and calculable amount (though rough calculations for loss of a chance may be necessary). Damage to the employee’s reputation is for a non-pecuniary sum: it is unable to be calculated and, like damages for pain, it does not compensate for a financial loss.362 The [page 889] decision in Addis appeared to be directed at the latter type of damages.363

There have been cases arising from the dismissal of an employee that have recently granted damages for the former.364 14.88 An employee may recover loss caused by a breach of the implied term of trust and confidence that makes it more difficult for the employee to obtain future employment or causes damage to the employee’s reputation.365 In the United Kingdom, where the Johnson exclusion area applies, damages may not be awarded for breach of that term that arises from a dismissal.366 The difficulties in proving such stigma damages are often formidable. The stigmatised employee must prove that the breach of the contract caused the employee loss and was not too remote.367 The New South Wales Court of Appeal in Shaw368 recently considered this issue in the context of an appeal from an application to strike out a pleading. The employees alleged that there was an implied term of trust and confidence and the employer had breached the term prior to the termination and by annulling the employees’ appointments as probationary teachers. The employees alleged that the breach caused a loss of future earnings and a loss of earning capacity for the three years following the annulment. The employees’ claim was not for distress, injured feelings or damage to reputation as such. The court refused to strike out the claim. After reviewing the authorities in Australia and overseas, Barrett JA concluded: Assuming that the former employee can deal satisfactorily with matters of causation, remoteness and mitigation, the only obstacle to his or her

[page 890] success can be Lord Loreburn’s statement that denies the recoverability of loss that may be sustained because the fact of dismissal makes the obtaining of new employment more difficult. The former employee’s chances of achieving such recovery are, however, enhanced by three factors: first, the fact that neither the High Court nor any intermediate appellate court in Australia has been called upon to give effect to the particular part of the Addis formulation dealing with difficulty of obtaining fresh employment; second, the substantial undermining of Addis by subsequent decisions of the House of Lords itself; and, third, the fact that Addis has been distinguished, expressly disapproved or simply cast off by appellate courts in other parts of the common law world. … In summary, there is no authority of the High Court or an intermediate appeal court in Australia that will unquestionably compel dismissal of the claim for damages for breach of contract [for loss of future earnings and a loss of earning capacity arising from a breach of the implied term of trust and confidence] and, even if the trial judge felt some obligation not to depart from decisions of the House of Lords … the significant qualifications upon Addis created

by Malik and Johnson will leave room for the appellants’ claim to be addressed.369

Express terms and damage to reputation and employment prospects 14.89 The United Kingdom Supreme Court in Edwards decided that damages within the Johnson exclusion area are not recoverable to compensate for a breach of an express term establishing a disciplinary procedure that makes it more difficult to obtain future employment or causes damage to the employee’s reputation.370 This decision turned on the special role afforded to contractually agreed disciplinary procedures under the statutory scheme governing unfair dismissals.371 In Australia there is no similar statutory scheme: see 14.62. Given the approach in Shaw v New South Wales to the breach of the implied term of trust and confidence,372 it is suggested that there is no reason why a breach of an express term that caused damage to the employee’s reputation or employment prospects would not sound in damages, providing the loss was caused by the breach and the ordinary test of remoteness was satisfied.373 [page 891] 14.90 One interesting issue is whether such damages to compensate for a breach that makes it more difficult to obtain future employment are recoverable when the breach consists of making a payment in lieu of notice rather than allowing the employee to remain in service until the expiration of a notice period. It is settled law that, in the absence of a term permitting immediate termination with a payment in lieu of notice, a wrongful dismissal coupled with a payment in lieu of notice will be a breach of the contract.374 Ordinarily the damages arising from the breach will be the amount that the employee would have been entitled to receive in remuneration during the period of the notice and the payment in lieu of notice is treated by the law as payment by the employer to partially or completely extinguish the damages recoverable by the employee.375 However, an employee’s prospects of obtaining new employment may be better if the job search is undertaken

while the employee remains in employment376 and there may be recoverable loss arising from the termination of the service. For example, in Quinn v Gray the school principal was summarily dismissed without justification. She was entitled to serve her six months’ notice. If she had remained in employment during the notice period she would have been better placed to find alternative employment. She recovered damages for that loss.377

Damages arising when the employee is denied the right to perform work 14.91 In some employment contracts relating to public performance there is a express or implied promise by the employer to provide work: see 8.40. Courts recognise in such contracts that the consideration provided by an employer is more than simply wages. A breach of the term entitles the employee to recover damages and the principle stated in the first limb of Hadley v Baxendale is applicable: the employee can recover damages ‘that may reasonably be supposed to have been in the [page 892] contemplation of the parties … as the probable result of its breach’.378 By breaching the term the employer has denied the employee the promised right to perform. Damages recoverable may be substantial and may be considerably more than the employee would have earned in salary during the engagement.379 There is conflicting authority concerning the types of damages recoverable for such a breach. On the one hand, the UK Court of Appeal in Withers held that an employee does not recover damages for loss of publicity or fame; nor are the damages for the loss of reputation. Rather, the damages are for the denial of an opportunity to enhance the employee’s reputation.380 On the other hand, in an earlier decision in Marbe381 the UK Court of Appeal awarded damages for the loss of the existing reputation of the employee as well as loss of the opportunity to enhance that reputation. Faced with this conflict, Lord Nichols in Malik decided:

I prefer the views expressed in Marbe. They accord better with principle. Loss of promised publicity might cause an actor financial loss, for two reasons: first, through loss of opportunity to enhance his professional reputation and, secondly, his absence from the theatre scene might actually damage his existing professional reputation. If as a matter of fact an actor does suffer financial loss under both heads, and that is a question of evidence, I can see no reason why the law should deny recovery of damages in respect of the second head of loss.382

Critique of the general rule against recovery 14.92 Although the general rule against recovery for mental distress is firmly entrenched as part of the common law its conceptual and policy [page 893] foundations are weak. One possible rationale for the general rule is that damages for mental distress are too remote.383 It is suggested that this may be true in commercial contracts, but this is an unconvincing explanation in an employment context where there is a personal relationship between the parties. It is widely recognised that ‘there is an element of distress in every termination’ and that the dignity and self-worth of an employee are partly derived from employment.384 Well nigh inevitable damages clearly arise naturally from a wrongful dismissal or would be within the reasonable contemplation of the parties for the purposes of the rule in Hadley v Baxendale.385 If there is a judicially imposed assumption that damages for mental distress are not within the contemplation of the parties,386 then it is not a factually sound assumption. 14.93 Another view is that anxiety arising from breaches of contract is so common that the parties must have been regarded to have taken the risk of such anxiety occurring: the opposite of the proposition that the damages are too remote. Mason CJ has delivered the following criticisms of this approach: But one might ask why the injured party should be deemed to take the risk of damage of a particular kind when the fundamental principle on which damages are awarded at common law is that the injured party is to be restored to the position (not merely the financial position) in which the party would have been had the actionable wrong not taken place. Add to that the fact that anxiety and injured feelings are recognized as heads of compensable damage, at least outside the realm of the law of contract. Add as well the circumstance that the general rule has been

undermined by the exceptions which have been engrafted upon it. We are then left with a rule which rests on flimsy policy foundations and conceptually is at odds with the fundamental principle governing the recovery of damages …387

[page 894] A franker, if less conceptually satisfying, explanation is that the general rule is based on policy considerations.388 One policy consideration is that ordinarily any disappointment or distress caused by the breach will be too mild to attract an award of damages.389 Distress that is too mild may justify the refusal to award damages in a particular case, but not a denial of such damages when the distress is real and proved. Another policy consideration is that permitting the recovery of damages for mental distress would expose an employer to unlimited liability based upon the subjective reaction of an employee to the breach.390 If the damages recovered are for distress, rather than psychiatric injury, then they are likely to be modest.391 14.94 In the context of termination of employment the principal justification for the establishment of the Johnson exclusion area was that there existed an unfair dismissal system in the United Kingdom that granted Mr Johnson the right to recover compensation for distress and psychiatric damage arising from unfair dismissal.392 That justification has been embraced on somewhat unsatisfactory grounds in Australia. There are at least three relevant distinctions between the unfair dismissal system in the United Kingdom and that in Australia. First, the UK system creates a right to a basic award for unfair dismissal of approximately $15,000 and a compensatory award of up to a further $100,000. In Australia the maximum award is six months’ remuneration, an amount of around $35,000 for the average wage earner. Second, in Australia the unfair dismissal scheme only applies to employees earning less than about $115,000 per annum. Approximately 20–25% of Australian employees earn more than $115,000 per annum. The average total earnings for full-time employees is over $80,000. In contrast, the United Kingdom system provides compensation for all employees, no matter how senior.

[page 895] Third, one of the reasons for the creation of the Johnson exclusion area was that damages for mental distress and psychiatric injury could be recovered in an unfair dismissal claim.393 In Australia, s 392(4) of the Fair Work Act precludes an award in unfair dismissal proceedings of compensation for ‘shock, distress or humiliation, or other analogous hurt’. Courts in Australia, usually in dicta, have tended to endorse the approach taken in Johnson and Eastwood notwithstanding the distinctions referred to above.394 One unresolved issue which merits particular consideration in Australia is what exactly is within the Johnson exclusion area? Given the breadth of the United Kingdom unfair dismissal scheme, on one view the Johnson exclusion area covers all employees and prevents the recovery of compensation for distress and psychiatric damage arising from a dismissal. On a narrower view more recently adopted by the United Kingdom Court of Appeal, the Johnson exclusion area covers ‘claims that lie exclusively before an employment tribunal for compensation for unfair dismissal’.395 Applying this latter formulation in Australia, it is arguable that the claims of high income employees (those earning more than about $115,000) are not within the Johnson exclusion area because they cannot bring claims under the Fair Work Act. It is also arguable that in Australia claims for mental distress and psychiatric damage caused by a dismissal are not within the Johnson exclusion area because s 392(4) of the Fair Work Act precludes such an award. Basten J in the New South Wales Court of Appeal has stated that ‘the current justification for the principle [that damages for mental distress are not recoverable] is to be found in its own long-established existence. Such a justification may seem circular, but is nevertheless available because parties are assumed to contract on the basis of established legal principles’.396 It is, with respect, a fiction to suggest in employment that [page 896]

parties contract on the basis suggested: supermarket shelf stackers are insufficiently versed in the exceptions to the rule in Hadley v Baxendale to do so. 14.95 The general rule against recovering damages for mental distress is conceptually discordant with the compensatory purpose of damages, built on a gimcrack policy foundation and supporting a factually incorrect assumption. It gives insufficient weight to the nature of employment, based as it is on a personal relationship of trust. A betrayal of that trust by the employee is viewed so seriously in the eyes of the law that it often acts as an insurmountable hurdle to coercive relief to enforce the contract.397 Yet the law unrealistically assumes that the parties would not contemplate that a betrayal of that trust by an employer might cause compensable distress. Further, the general rule barring damages for mental distress, coupled with the rule against recovering damages for loss of reputation and diminished future employment prospects, proceeds on a too narrow conception of the purpose of employment. These rules are more defensible if employment is narrowly conceptualised as a wages for work bargain in which the employee only acquires remuneration. However, the law of employment recognises that employees have other interests: see 1.5 and 1.9.

MITIGATION OF LOSS Overview 14.96 The fundamental purpose of damages for breach of contract is to provide a monetary sum to the employee to put the employee in the position he or she would have been in if the employer had performed the contract: see 14.7. The principles relating to mitigation, and the deductibility of collateral benefits acquired as the result of the employer’s breach, aim to ensure that an award of damages does not grant an employee a financial benefit that would not have been acquired if the employer had performed the contract. The principles seek to prevent double recovery (or double compensation) for the same wrong.398 A duty to mitigate only arises when the employer has breached the contract. It does not arise when the employer owes a debt to the employee

instead of an obligation to pay damages: see 14.101 and [page 897] 14.103. When the duty to mitigate arises it is governed by two main principles. First, an employee must take reasonable steps to limit the amount of any loss arising from the breach. If the employee does not take such steps (for example by refusing to apply for appropriate jobs), the award of damages to the employee will be reduced to reflect that failure of the employee. In short, damages are not awarded to compensate for avoidable loss: see 14.108–14.109. Whether it is reasonable to refuse to accept an offer of employment at a lower rate of pay or rank is discussed in 14.110–14.114. Second, any award of damages will be reduced to reflect successful attempts by the employee to mitigate his or her loss, for example by obtaining alternative employment: see 14.116–14.117. In short, damages are not awarded to compensate for avoided loss. 14.97 A wrongfully dismissed employee may receive a range of benefits from the employer and others as a result of the dismissal, such as a termination package, unemployment benefits, a payment under a superannuation scheme or from an insurer under an income protection policy. The general principles applicable to the deductibility of such benefits from an award of damages are discussed in 14.118–14.124 and the specific problems of the deductibility of payments in lieu of notice, ex gratia payments made by employers and the deductibility of redundancy payments from damages for wrongful dismissal are dealt with in 14.125–14.130.

The ‘duty’ to mitigate 14.98 In ordinary legal parlance the existence of a duty presupposes a correlative right of another party to enforce the duty. It is often said that a dismissed employee has a ‘duty’ to mitigate his or her loss. This is misleading. There is no corresponding right of the employer to enforce any such duty. An employee who fails to mitigate the loss arising from the termination commits no actionable wrong. Rather, the employee runs the risk of having the damages award decreased: the employee ‘is fully entitled to be

as extravagant as he pleases but not at the expense of the defendant’.399 It is more accurate to speak of the employee being ‘under [a] disability in relation to avoidable loss and the [employer having] a corresponding immunity’.400 The expression ‘duty to mitigate’ is used [page 898] below because it is widely employed, is understood by practitioners and is a convenient phrase to refer to the disability of the employee in the sense referred to above.

Onus of proof 14.99 The employer bears the onus of proving that the employee has failed to mitigate his or her loss.401 Though the onus is on the employee to prove the damage suffered as the result of the breach, the employee is not obliged to call evidence that he or she has taken the appropriate steps to mitigate the loss. As the onus is on the employer to prove a failure to mitigate, if it does not call evidence no deduction from the sum of damages should be made.402 As a matter of practice, this will usually require that the employer lead evidence to prove that there was a course of action available to the employee that was not taken (for example, applying for work); that it was unreasonable in all of the circumstances for the employee not to take that course; and if the employee had taken the course the employee would probably have mitigated his or her loss.403 This final point is important. It is often overlooked when assessing damages for breach of a contract to sell goods because there will almost always be a market available for the goods, although it may not be at the original contract price. Where an employee has not taken reasonable steps to obtain other employment an inference may be available in some cases that, if those steps had been taken, suitable alternative employment would have been obtained.404 However, in the world of employment it cannot be naturally assumed that there is an available ‘buyer’ for the services offered in the market. If the employer pleads that the employee has failed to mitigate his or her loss, then it is proper and reasonable ‘to

[page 899] provide particulars by way of specifying the steps which [the employer] contends the [employee] could have taken but did not take’.405 14.100 By the time of the trial a wrongfully dismissed employee is usually only seeking to recover past loss and the extent to which the loss has been mitigated is clear. In relation to future loss (being the loss arising after trial), to discharge the onus the employer must show that the employee will probably mitigate the loss and no reduction in damages should be made to take into account the mere possibility that future loss might be mitigated. For example, assume an employee on a three-year fixed term contract is wrongfully dismissed after one year of service and, at the time of trial six months later, has been unsuccessful in obtaining alternative employment despite reasonable efforts to do so. The court should award six months’ damages for past loss and 18 months for future loss unless it is satisfied that the employee will probably obtain remunerative employment: … the defaulting party must show that on the probabilities the innocent party … will mitigate his losses. To establish a mere possibility is not to establish a probability. By establishing a possibility the defaulting party does not establish that the innocent party … will mitigate his losses.406

When a duty to mitigate arises and payments in lieu 14.101 A duty to mitigate only arises when the employer has breached the contract.407 A repudiation of the contract does not give rise to a duty to mitigate as it is not in itself a breach.408 The duty to mitigate does not oblige an employee to elect to accept a repudiation. Nor does a duty to mitigate arise when the employer owes a debt to the employee instead of an obligation to pay damages.409 The rule imposing a duty on an innocent party to mitigate his or her loss is part of the compensatory foundation of the law of damages. It is usually applied by courts and tribunals in assessing ‘compensation’ or ‘loss and damage’ that should be awarded under a variety of statutory

[page 900] schemes, such as damages for an unfair dismissal410 or breach of the general protection provisions under the Fair Work Act and the recovery of damage under the ACL.411 When an employee is seeking reinstatement under a statutory scheme it may be reasonable to refuse to accept other permanent employment in case the claim for reinstatement is prejudiced.412 The relationship between the principles governing mitigation and payments in lieu of notice (and similar payments) is complicated by the variety of types of payment denoted by the phrase ‘payment in lieu of notice’. In Delaney v Staples Lord Browne-Wilkinson, with whom the other Law Lords agreed, identified four different types of payments in lieu of notice.413 There is no obligation to mitigate in the first three types of payment, but there is such a duty in the fourth.

Garden leave and the duty to mitigate 14.102 ‘Garden leave’ is the first type of payment in lieu of notice. Garden leave arises when the employer gives notice of the termination in accordance with the contract, tells the employee that he or she need not work until the termination date and pays the wages attributable to the notice period usually in a lump sum. The employer does not breach the contract by sending the employee on garden leave, unless the employee has a right to be provided with work. Any lump sum payment is an advance payment of wages. It is not a payment on account of a claim for damages as there is no breach by the employer. There is no duty to mitigate the loss as there is no breach.414 Similarly, an employee who is told that the employment will terminate at some specified or unspecified time in the future will continue to earn wages until the termination. In such cases no duty to mitigate arises prior to the termination. [page 901] In Scott v Commonwealth of Australia the employee was informed in

February 1977 that his job would be made redundant during the course of the year. He was given formal notice of termination in August and his employment terminated in September 1977. Even if the employer was repudiating the contract in February 1977, Mr Scott was not obliged to mitigate his loss by seeking other jobs between that date and the breach of the contract in September 1977.415

Owing a termination payment as a debt and the duty to mitigate 14.103 The second type of payment in lieu arises where there is an express contractual term requiring the employer to make a specified payment in lieu of notice. Such terms often arise when a contract provides that, except in the case of serious breach, the employer must provide a certain amount of notice or payment in lieu. An unjustified summary dismissal, being inconsistent with the giving of notice, may act as an election to provide the specified payment. If the employer makes the specified payment then there is no loss to mitigate and there is no breach of the contract; if the employer fails to make the specified payment, then the employee may recover the sum as a liquidated debt — not damages for breach of contract.416 In such a case the contractual provision specifying the payment to be made in lieu of notice acts as a liquidated damages clause. The concept of a duty to mitigate is entirely foreign to claims for liquidated damages.417 For example, in Reilly v Praxa Ltd the employer had a contractual right to make a payment in lieu of notice. It exercised that right. The employee was entitled to six months’ notice. The employer only paid one month’s notice. Gray J held that the employee had no obligation to mitigate his loss during the six months’ notice as the amount was owed as a debt.418 The type of payment considered here is distinguishable from contracts containing a term that provides that an employer may (not must) provide a payment in lieu. Under such clauses an employer who wrongfully dismisses an employee is not required to make a payment in lieu of notice but is permitted to do so, and a failure to make a payment [page 902]

in lieu gives rise to a right to damages for wrongful dismissal and not a debt.419 14.104 The third type of payment in lieu of notice identified in Delaney v Staples is a variation on the second. It arises where the parties agree to terminate the contract on the payment of a sum of money, such as by providing an agreed redundancy payment. If the employer pays the sum then there is no loss to mitigate as there is no breach of the contract; if the employer does not pay the agreed sum then it is recoverable as a liquidated debt by the employee — not damages for breach of contract.420

Payment on account of damages and the duty to mitigate 14.105 Fourth, and most commonly, there are cases in which an employee is entitled to receive notice of the termination and the employer, instead of giving notice, dismisses the employee and makes a payment of a sum equal to (or less than) the remuneration that the employee would have received during the agreed notice period. As Lord Browne-Wilkinson states: Without the agreement of the employee, the employer summarily dismisses the employee and tenders a payment in lieu of proper notice. This is by far the most common type of payment in lieu … The employer is in breach of contract by dismissing the employee without proper notice. [The] payment in lieu is not a payment of wages in the ordinary sense since it is not a payment for work done under the contract of employment. The nature of a payment in lieu falling within the fourth category has been analysed as a payment by the employer on account of the employee’s claim for damages for breach of contract. In Gothard v Mirror Group Newspapers Ltd Lord Donaldson of Lymington MR stated the position to be as follows: If a man is dismissed without notice, but with money in lieu, what he receives is, as a matter of law, payment which falls to be set against, and will usually be designed by the employer to extinguish, any claim for damages for breach of contract, i.e. wrongful dismissal.421

[page 903] The second category of payment in lieu discussed above is distinguishable from the fourth category. Under the former there is a contractual term requiring the employer to make a specified payment in lieu of notice and the amount is payable to the employee as a liquidated debt. Under the latter there is no obligation to make a payment in lieu — the wrongful dismissal of the employee is the breach, not the failure to make the payment in lieu of notice;

and the breach gives rise to unliquidated damages. As was stated in Hardy v Polk (Leeds) Ltd, where ‘there is no right to receive a payment in lieu of notice … and the right period of notice is not given, then there is a claim for damages for breach of contract, in relation to which the duty to mitigate arises’.422 14.106 The same distinction is applied to amounts payable under fixed term contracts. On the one hand are cases in which the contract requires the employer to pay the employee an amount for the unexpired portion of the fixed term. Such an amount is a liquidated debt and is not subject to any obligation to mitigate.423 On the other hand are contracts which only stipulate the fixed term and impose no obligation to pay an employee in the event of an early termination of the contract. In such cases a wrongful dismissal will give rise to an action for unliquidated damages and the employee is obliged to take steps to mitigate his or her loss.424

The duty to mitigate when the employee elects to affirm 14.107 The cases are clear that a duty to mitigate arises when an employee is wrongfully dismissed, even if the employee elects to affirm the contract.425 This proposition may appear dissonant: it might be argued that when the employee elects to affirm there is no breach and therefore the duty to mitigate does not arise. However, the authorities referred to are conceptually sound and shed some light on a structural quirk in employment contracts. [page 904] A wrongful dismissal is a breach of the implied obligation of the employer to retain the employee in its service for the duration of the contract: see 14.36. An employee who is wrongfully dismissed may elect to affirm or terminate the contract.426 The effect of an affirmation is not to extinguish the breach; rather, an affirmation is a binding choice not to terminate in reliance on that breach.427 Nor is the effect of an affirmation that the employee remains in the service of the employer and earns wages as a debt, because the employee cannot earn wages after a wrongful dismissal: service is a precondition to earning wages and a dismissal prevents the employee

rendering service: see 14.38–14.39. The employee has a duty to mitigate as there is a breach by the employer (namely the breach of the obligation to retain the employee in its service) causing damage (constituted by the wages that are not able to be earned). Hence, a wrongfully dismissed employee is obliged, even if he or she affirms, to mitigate the loss arising from this unextinguished breach. If it were otherwise a wrongfully dismissed employee could circumvent the duty to mitigate by affirming the contract.

The duty to mitigate avoidable loss 14.108 An employee must take reasonable steps to mitigate the damage caused by the breach and cannot recover any part of the damage which is due to his or her neglect to take such steps.428 In employment law where a duty to mitigate arises it ordinarily requires a dismissed employee ‘to use diligence to find other employment’.429 The rule encourages commerce. It demands that dismissed employees seek to re-enter the labour market as soon as possible rather than remaining unemployed. In the early nineteenth century there was a view that a wrongfully dismissed employee could earn wages when ready, willing and able to do so and so could continue to earn wages after his or her dismissal.430 It appears on this view that the wrongfully dismissed employee was not obliged [page 905] to mitigate his or her damages. However, this approach has not been applied in Australia for over a century.431 The obligation of the employee is to take the steps that a reasonable person in the position of the dismissed employee would take. As Lord Macmillan has stated: [The measures the employee adopts] ought not be weighed in the nice scales at the instance of the [employer] whose breach of contract has occasioned the difficulty. It is often easy after an emergency has passed to criticise the steps which have been taken to meet it, but such criticism does not come well from those who have themselves created the emergency.432

Whether the steps taken were reasonable is to be assessed at the time the steps were taken and are not to be judged with the benefit of hindsight.433 When seeking new employment, it is reasonable for dismissed employees, at least initially, to seek positions comparable to the former employment and refuse to accept positions whose status or pay are too low.434 However, if unsuccessful in finding such employment it may be unreasonable to continue to seek such comparable positions and be more reasonable to aim one’s sights lower. In Yetton, the employee earned £10,000 per annum when he was dismissed. For the next six months he sought jobs remunerating between about £8,000–10,000 per annum. Then he lowered his aim to £4000– 5000 per annum. After seven months of unemployment he refused a job offer of £2500 per annum. Rejecting the complaints of the employer, the court considered each of these actions reasonable.435 [page 906] 14.109 It is always a question of fact whether the employee has taken reasonable steps to mitigate his or her loss.436 The range of reactions of dismissed employees seems almost infinite and decisions in this field often turn upon their own facts. In statistical terms, there are outliers. For example, although as a general rule an employee should seek to mitigate his or her loss by seeking paid employment or other remunerative work, a dismissed employee in one case chose to work as a volunteer and was found to have taken reasonable steps to mitigate his loss.437 As a general rule if the dismissal involves the destruction of the relationship of trust between the parties then it is reasonable for an employee to refuse to accept a job offer from the contract breaking employer. However, in one case an employee who was sacked without valid reason by an apparently abusive employer was judged to have acted unreasonably by refusing a job offer from this employer two days after the dismissal.438 Usually it would be unreasonable for a dismissed employee to seek alternative employment at double his or her rate of pay, but it is not always the case. In Northern Land Council v Hansen the employee worked as an

executive for a senator earning $110,000 pa before he took five years off to work as a vigneron. He returned to work earning just $46,000 pa with the Northern Land Council because it was ‘so fundamentally worthwhile’. After the council dismissed him, he did not act unreasonably by seeking alternative employment around the $100,000 pa range from those on the Labor side of politics.439

Mitigation and new offers of employment 14.110 A wrongdoer may provide the innocent party with an opportunity to mitigate his or her damages and, depending on a range of factors discussed below, it may be reasonable for the innocent party to reject such an opportunity.440 One of the difficult issues in this area [page 907] of law is the extent to which an employee is obliged by the duty to mitigate to accept a new offer of employment on different terms from an employer who has breached the contract. This is another manifestation of a recurring problem in employment law, namely the obligations of the parties when an employer seeks to unilaterally impose a change in the employment conditions. In such a situation employers sometimes argue that they have an implied right granted by the contract to redeploy the employee in the manner sought; sometimes employers argue that the refusal to accept the change is in effect a resignation by the employee and not an acceptance of a repudiation or serious breach; and sometimes employers argue that an employee who refuses to accept the change has failed to mitigate his or her damages.441 In non-personal contracts, the general rule is that it is unreasonable for an innocent party to refuse to accept a new offer from the contract breaker, assuming that appropriate terms are offered.442 In employment law this rule is complicated by the fact that employment contracts contain a personal element. Employees are not required to take unreasonable steps or to do things that present a serious risk to their interests.443 14.111 Whether the employee is acting reasonably in refusing a job offer

from an employer who has just dismissed the employee must be judged in light of any egregious conduct by the employer harming that personal relationship. The requirement that an employee must take reasonable steps to mitigate his or her loss does not require the employee to enter into a contract with an employer with whom personal relations will be severely strained: [If an employee] is accused in the presence of others of being a thief, and if after that his employer had offered to take him back into his service, most persons would think that he was justified in refusing the offer, and that it

[page 908] would be unreasonable to ask him in this way to mitigate the damages in an action of wrongful dismissal.444

In assessing the reasonableness of the refusal to accept the new job offer, the cases pay particular attention to three issues: the circumstances of the previous dismissal; any diminution in the remuneration and status of the employee; and the personal circumstances of the employee: see 14.112–14.114.

The circumstances of the dismissal 14.112 If the circumstances of the dismissal, and the genuineness and circumstances of the new offer of employment, make the establishment of a relationship based upon trust and confidence too difficult, then it will be reasonable for the employee to refuse to accept an offer of re-employment.445 It may be unreasonable to refuse a genuine offer from an employer who has done nothing to abuse the employee’s trust and with whom a relationship based upon trust and confidence could be continued.446 There is some authority to support the view that it is reasonable for the employee to act on a mistaken but honestly held belief that the offer of new employment or reinstatement was not genuine.447 [page 909]

New offers for employment with a reduced status or less remuneration 14.113 It will usually be reasonable for the employee to refuse to accept the new job if the new job offer is at a reduced rate of pay.448 Where there has been no change in remuneration, but there has been a change in the status of the employee, more difficult issues arise. In such a case the employee has three choices. The first choice is to agree to the proposed change, thereby varying the contract and, usually, agreeing not to seek damages for the breach.449 The second, is to agree to accept the new position under protest and to sue the employer for breach of the former contract. There are problems with this course: it may be difficult to recover damages as the employee has lost no remuneration as the result of the change; courts are unlikely to specifically enforce a term requiring that a person fill a particular position;450 and employers often only make an offer of continued employment on the basis that the rights of the employee to sue for breach of the former contract be waived.451 Under these first two options an employee who accepts the demotion, under protest or not, will be worse off. The third option is for the employee to elect to terminate the employment contract. In such a case, it is sometimes argued, the employee is not entitled to recover damages because he or she has failed to mitigate the damage by accepting the demotion. There are responses to this argument. First, as a duty to mitigate only arises when the employer has breached the contract, a rejected offer of a demotion that predates the breach will not be relevant.452 Second, it is suggested that the best response is for courts to be slow to conclude that refusing the demotion was an unreasonable act by the employee. At times courts in the United Kingdom have adopted this course, laying great store in protecting employees from descent into ‘humbler’ positions, [page 910] ‘debased [in] public esteem and status’.453 In Australia courts have taken a similar approach: a serious, non-consensual intrusion upon the status or

responsibilities may amount to a serious breach or repudiation of the contract454 and a refusal to agree to a lesser role may be reasonable.455 The status interest recognised in these cases is not limited to positions of high dignity and privilege.456

The relevance of the personal circumstances of the employee 14.114 All of the surrounding circumstances will be relevant in assessing the reasonableness of the employee’s actions. This may include a consideration of the personal circumstances in which the employee finds himself or herself and the personal attributes of the parties.457 In Morris v CH Bailey Ltd the contract was terminated and the employee was offered a new contract on improved terms and conditions. If he had accepted the offer then he may been expelled from his union. The court observed, in dicta, that it was reasonable to refuse the offer in such circumstances. To reach this conclusion it was necessary to look beyond the terms of the [page 911] offer made by the employer and to consider the personal consequences for the employee of the proposed mitigating step.458 In assessing the reasonableness of the employee’s conduct it must be borne in mind that the employment contract is a personal one. A dismissed employee may suffer from shock, depression or a low sense of self-esteem after a dismissal.459 It may be unreasonable to expect that a dismissed employee will immediately ‘bounce back’ and start looking for alternative work shortly after the employer’s breach.

Not seeking other employment as a reasonable step 14.115 Employees are usually required to mitigate their losses by diligently seeking other employment. This is not the only reasonable course open: some employees attempt to mitigate losses arising from a dismissal by establishing a business. Increasingly, courts have found that such a choice is reasonable, even though it involves embarking on an uncertain course.460 Another aspect

of this problem is attempting to assess the loss of the employee. When new businesses are established they often run at a loss, or a small profit, for the first few years and, if successful, have growing profits thereafter. In appropriate cases damages should be adjusted to reflect the fact that the former employee is likely to have some deferred income as the result of establishing a business venture.461 The employee can recover losses reasonably arising from steps taken to mitigate his or her loss even though the costs incurred may add to, or [page 912] exceed, the loss suffered.462 This may include, for a wrongfully dismissed employee, expenses reasonably incurred in attempting to find new employment. In Brookton Holdings Pty Ltd v Kara Kar Holdings Pty Ltd the dismissed employee recovered amounts spent on phone calls and faxes in attempting unsuccessfully to find new employment.463 Such costs may also include fees paid to employment agencies to try to find other work. However, the employee cannot recover as damages an amount that a statute requires the employee bear personally.464

No recovery for avoided loss 14.116 An employee cannot recover damages for amounts he or she has earned in successfully mitigating the loss arising from the termination. Hence, if a wrongfully dismissed employee is entitled to six months’ notice and obtains more remunerative employment the day after the dismissal, he or she will have suffered no loss and can recover no damages.465 It is only income that is received that must be taken into account, not moneys that were earned but the employee was unable to collect.466 It is suggested that there is a problem with this approach, rarely considered in the authorities. It arises when the employee earns more remuneration after the dismissal than was received before the dismissal. The orthodox view — that no loss is recoverable — assumes the work of the employee before and after the breach is comparable. However, the additional remuneration may

arise because the new work is more demanding, or involve greater risks to the employee’s safety, or involve longer or unsociable hours. There should, it is suggested, be some consideration of these more burdensome hardships in calculating the employee’s pecuniary loss.467 [page 913] Collier’s case illustrates the operation of the orthodox rules.468 The employee was employed in September 1938 under a contract that guaranteed employment for two years at the rate of 17 guineas a week. In June 1939 he was wrongfully dismissed. The employer paid the employee the appropriate rate of pay until November 1939. From November 1939 until May 1940 he was unemployed despite his diligent efforts to find other employment. He was entitled to damages of 17 guineas per week for this period. From May 1939 until August 1940 he was employed at the rate of 7 guineas per week. He was entitled to damages of 10 guineas per week for this period. 14.117 There is a line of authority in the United Kingdom that amounts earned in mitigation of loss following a wrongful dismissal should not be taken into account in compensating the employee. To do otherwise, it is said, is not good industrial relations practice as it encourages employers to refuse to give the full payment in lieu of notice on termination and instead to withhold payment in the hope the employee successfully mitigates his or her loss. It is suggested that this line of authority is based on the peculiarities of the United Kingdom statutory scheme governing the grant of compensation, is inconsistent with the compensatory principle discussed in 14.7 and is not a reflection of the common law.469

The deductibility of other benefits470 14.118 The employee may receive a range of benefits from the employer and others as a result of a breach of the contract. A wrongful dismissal, for example, might result in the employer providing a payment in lieu of notice, or the employee may receive unemployment payments, an early retirement payment under a superannuation scheme, or an ex gratia payment from the

employer. The issue discussed below is the extent to which these benefits, directly or indirectly connected with the breach, should be taken into account in assessing the damages recoverable from the employer. The general principles in this field have largely been worked out in the law concerning personal injury but apply equally to claims for [page 914] breach of employment contracts.471 The general principles applicable to the deductibility of benefits are considered in 14.119–14.120. The application of those principles in wrongful dismissal actions to payments under insurance policies, superannuation and pension payments, benefits provided by benefactors and charities, wages and sick pay, workers’ compensation payments and unemployment benefits are considered in 14.121–14.124. The specific problems of the deductibility of payments in lieu of notice, ex gratia payments made by employers and the deductibility of redundancy payments from damages for wrongful dismissal is discussed in 14.125–14.130. There is a discussion in 5.87–5.89 of the satisfaction of entitlements under industrial instruments by the making of payments for other purposes.

The general rule and characterising the payments 14.119 The overriding principle of damages is that an employee will be compensated for the loss caused by the breach: see 14.7. When an employee receives a benefit (‘the collateral benefit’) arising out of and connected with the breach, and also seeks compensation for the breach, there is a real prospect that the employee might obtain double compensation for the same wrong, a result that contravenes the overriding principle.472 The rules governing the deductibility of collateral benefits aim to prevent double compensation. As a general proposition,473 where an employee receives a collateral benefit as the result of the employer’s breach then that benefit goes to reduce that part of a damages award which is of the same character as the collateral benefit.474 A reduction will not be made when the collateral benefit was

purchased before the breach for the purpose of being enjoyed in the event of the breach, or conferred on the employee to be enjoyed in addition to any damages recoverable from the employer, or the collateral benefit is of a different character to the damages award.475 As Mason and Dawson JJ have stated, the resolution of the issue: [page 915] … turns on the character and purpose of the particular financial benefit which the [employee] receives: Was the benefit conferred on [the employee] independently of any right of redress against others and so that [the employee] might enjoy the benefit even if he enforced the right [against the employer]?476

14.120 This requires a comparison between the character of the collateral benefit received and the basis on which damages are awarded.477 In making that comparison and characterising the payments, the court considers a range of factors including the legal and factual connection between the collateral payment and the loss, the temporal and purposive connection and the presence or absence of any contractual or social reason for the payment.478 For example, when an employee sues for wrongful dismissal the damages recoverable are in the nature of lost wages and the purpose is to compensate the employee during the time between the dismissal and other employment.479 Unemployment benefits have the character of a partial substitute for wages.480 Given the similarity between the character and purpose of lost wages and a substitute for wages, unemployment benefits received by a wrongfully dismissed employee are deducted from an award of damages for wrongful dismissal. However, where a public performer sues for loss of an opportunity to perform work, damages are awarded for the loss of an opportunity to retain and enhance his or her professional reputation and damage his or her existing professional reputation.481 Unemployment benefits are not a payment related to the protection or enhancement of reputation of the employee. They will therefore be disregarded in the calculation of such damages. The discussion below just deals with the archetypal wrongful dismissal case in which the employee is seeking to recover only loss of wages. Where damages of a different nature are sought, attention needs to be paid to the nature of the

damages sought and the character of the collateral benefit. [page 916] Merely proving a connection between the collateral benefit and the breach is in itself insufficient to justify the deduction of the collateral benefit from the damages award. In Lavarack v Woods of Colchester after his dismissal the employee invested a large sum in his former employer’s competitor and reaped significant returns on the investment. But for the wrongful dismissal Mr Lavarack would not have been able to make such an investment. However, he did not have to bring the returns on the investment into account when calculating the damages arising from the dismissal.482

Insurance, superannuation and pension schemes 14.121 Where the employee has taken out insurance against a loss then moneys paid out (or payable) on that policy are not taken into account when assessing the damages payable to the employee. The rationale for this rule is that the employee has paid the insurance out of his or her own funds and the fruits of this thrift and foresight should not enure to the benefit of the employer, even if it results in the employee receiving two payments to cover the same loss.483 A contrary result may apply when it is the employer who has purchased the insurance for its own benefit and the employee has no contractual right to the benefit of the scheme.484 Superannuation and pension payments are treated as analogous to insurance acquired by the employee and do not reduce the damages payable arising from the breach. Elias J has stated the principles as follows: (a) pension moneys received by [an employee], should not be deducted from their compensation, whether the claim is made either in contract or in tort; (b) the principle is applicable whether the relevant pension scheme is contributory or non-contributory; (c) the principle is applicable whether the scheme is occupational or private.485

[page 917]

It makes no difference that the superannuation is arranged through the employer rather than an independent insurance company. Nor in Australia does it matter that the employer has been the sole contributor to the scheme: ‘no distinction should be drawn between pension and superannuation benefits to which the plaintiff has contributed and those to which he has made no contribution’.486 14.122 The principles do not only apply to assessing damages for personal injury. In Hopkins v Norcros plc the employee was engaged under a contract that guaranteed him employment until the age of 60. He was dismissed at the age of 57 and sought to recover damages for the loss of wages for three years. His employer had established a pension scheme, to which the employee belonged, which provided that he would be paid a pension equal to his full wages until the age of 60 if he was dismissed before that age. Applying the principles established in the personal injury cases relating to insurance acquired by an employee, the court held that no deduction should be made.487

Charitable payments, sick pay and payments under statutory schemes 14.123 Dismissed employees may receive a range of financial and other valuable support from family members, their unions, charitable organisations and others to assist in diminishing the harsh effects of a breach of contract. Courts do not construct a profit and loss account weighing the compassion, kindness, sympathy and financial assistance of supporters against damage caused by the employer and deducting the balance to assess the damages.488 Such assistance is only taken into account in assessing damages payable by the employer when the donor intends for the employer to be the beneficiary. Hence in Liffen v Watson the employee, who received board and lodging from the employer, was unable to continue working due to an injury. Her father put her up for [page 918] free. She was, however, still able to recover damages from the employer for loss of the benefit of her board and lodging.489

Wages paid after the breach are taken into account when assessing damages for loss of earnings caused by the breach.490 Similarly, sick pay provided to an employee following an injury is relevant when assessing the damages awarded for any loss of earnings compensated by the sick pay.491 Where the wages or sick pay are paid in such circumstances they are not subtracted from the damages awarded; rather, there is simply no loss sustained.492 These cases turn on the character of the payment and not on fact that it is the employer who is making the payment.493 14.124 Whether compensation payable under statutory schemes should be deducted from an award of damages falls to be determined by reference to the nature of the payments made and the intention of the legislature.494 Workers’ compensation schemes around Australia provide for compensation for loss of wages and some other heads of damage. They usually provide that if an employee recovers damages for loss of wages from the employer then the employee must repay the workers’ compensation payments that have been made. Unemployment benefits received by the employee should be deducted from an award of damages for lost wages arising from the breach.495 This is because unemployment benefits are a partial substitute for wages.496 Other social security payments, such as the family tax benefit and child care benefits, that are not in the nature of a substitution for wages are not deducted. [page 919]

The deductibility of payments in lieu of notice, redundancy payments and ex gratia payments 14.125 The general principles discussed in 14.118–14.120 apply, with some modification, to the more difficult issues that arise when an employer breaches the contract and then makes a payment to an employee that is of a similar character to the damages that are payable as a consequence of the breach. The issue most commonly arises when the employer wrongfully dismisses the employee and becomes liable to pay damages, usually equal to the remuneration recoverable during the notice period expressly or impliedly

stipulated in the contract. When the employer makes a payment that is said to be in lieu of notice then it is clear that the payment partially or completely extinguishes the damages recoverable by the employee.497 The same approach is adopted when the employer makes a payment to an employee and explains that the payment is an advance against future damages that may be recovered, or is an ex gratia payment relating to notice.498 14.126 One issue that has generated some litigation is the relationship between damages for breach of a notice provision and the payment of redundancy pay. Applying the general principles identified in 14.118–14.120, the issue can be restated: where an employee receives redundancy pay as the result of the employer’s wrongful dismissal then the redundancy pay goes to reduce that part of a wrongful dismissal damages award which is of the same character as the redundancy pay, except where the redundancy pay was intended to be enjoyed by the employee in addition to any damages recoverable for wrongful dismissal.499 As the proviso makes clear, if the parties intend to grant the employee both notice pay and redundancy pay then the payment by the employer of one entitlement is not to be used in the reduction of the other.500 In many cases the rights to notice and redundancy pay are separate and are intended to be cumulative. The right to redundancy pay under the Fair [page 920] Work Act is intended to be separate from and in addition to the right to notice pay under both the Fair Work Act and rights to notice pay under a contract.501 However, the intention of the parties to the contract may not be clear. In such cases the character and purpose of the payments is relevant. 14.127 The character and purpose of damages for wrongful dismissal when an employee is entitled to reasonable notice is clear: the payment is in the nature of wages and is intended to compensate the employee during the time between the dismissal and other employment.502 In fixed term contracts, however, the damages for dismissal are intended to compensate the employee during the time between the dismissal and the end of the contract.503 On one view redundancy pay compensates for otherwise incalculable benefits lost

whereas damages for wrongful dismissal compensates for quantifiable benefits the employee would have gained. The difficulty in so characterising redundancy pay is that not all redundancy payments are the same. The usual characterisation of redundancy pay is best expressed by von Doussa J: A severance payment, however, is intended to provide a payment as compensation for the loss of non-transferable credits and entitlements that have been built up through length of service such as sick leave and long service leave, and for inconvenience and hardship imposed by the termination of employment through no fault of the employee … The inconvenience and hardship includes the disruption to an employee’s routine and social contacts and the competitive disability to long term employees arising from opportunities foregone in the continuous service of the employer. …504

This characterisation has supported the conclusion that redundancy payments should not be offset against damages awarded for reasonable notice as the payments are of a different character.505 However, the [page 921] character of a redundancy payment may also include an element for quantifiable benefits the employee would have gained from future employment and, if so, it may be more difficult to discern a difference in character between damages for reasonable notice and redundancy pay.

Black v Brimbank City Council 14.128 The unusual decision of Black v Brimbank City Council merits special discussion as it appears to have unfortunately spawned a misunderstanding in this area of law. Mr Black was engaged under a fixed term contract for five years which was due to expire on 1 August 1996. In breach of his contract his employment was terminated on 1 April 1995 on the ground of redundancy. He was paid about $174,000 in redundancy pay pursuant to an enterprise agreement. Around 60% of this was made up of severance pay and the remainder was made up of a payment for unused sick leave, notice pay and loss of use of a vehicle for the remainder of the fixed term. If Mr Black had continued in employment until the expiration of his fixed term then he would have been paid $170,000 and would have received no redundancy pay. That is, the parties intended that if the contract was not breached by the employer then the employee would have earned wages for a

further 16 months but would not have then been paid redundancy pay. This was not a case where it was intended that the employee should get both notice and redundancy pay. The issue for determination was whether the $170,000 in damages arising from the breach should be reduced to take account of the $174,000 in redundancy pay received. In a much cited passage506 Moore J observed that the entitlement to the damages for breach and the redundancy pay had their genesis in the same event, being the dismissal in April 1995. However, his Honour then proceeded to compare the character of the particular redundancy payment by analysing each of its elements and the character of damages for breach of a fixed term contract. Moore J then stated: It may be accepted that payments equivalent to reasonable notice have been treated as being of a different character to redundancy payments. However … damages representing the forgone benefits under a fixed term contract are not.507

[page 922] Having concluded that the redundancy pay in this case was of a substantially similar character to damages for breach of a fixed term contract, Moore J held that the redundancy payments could be taken into account in assessing damages for the breach. Considered in this way, the very different approaches of Moore J in Black v Brimbank City Council and Ashley J in Haley v Public Transport Corporation of Victoria508 are not inconsistent. Both decisions apply the general principles discussed in 14.118–14.120. 14.129 There is an alternative, though it is suggested incorrect, interpretation of the decision in Black v Brimbank City Council, namely that the decision supports the broader proposition that collateral benefits should reduce damages awarded for a breach when they arise directly from the act constituting the breach.509 On this view Black v Brimbank City Council and Haley v Public Transport Corporation of Victoria are inconsistent.510 Such an approach does not appear to accord with the principles discussed in 14.118–14.120 that call for the characterisation of the collateral payment and an identification of its purpose, and not merely a coincidence of the cause of the payments.511 If Moore J intended to endorse this broader proposition then

his decision does not appear to be consistent with the approach of the law to other collateral benefits that arise directly from the breach, such as the rights of an employee to insurance payments, superannuation payments from a trust or pension payments from the employer.512 14.130 Employers often make ex gratia payments to employees at the time of, or shortly following, a wrongful dismissal. For the reasons discussed in 14.118–14.120, it is relevant to ask whether the employer intended the employee to enjoy the benefit of an ex gratia payment even if [page 923] the employee enforced a right for damages against the employer.513 Usually an ex gratia payment is made in circumstances in which it is temporally connected with the breach and the employer has no contractual or social reason to make the payment other than to assuage the loss suffered by the employee.514 In such circumstances it is unsurprising the courts tend to conclude that ex gratia payments made at the time of (or near the time of) the breach should reduce damages awarded for the breach.515 There is a clear social advantage in encouraging such ex gratia payments.516 Courts have usually reached the same result when the employer makes a redundancy payment to which the employee is not contractually entitled.517

AGREED DAMAGES CLAUSES Liquidated damages and penal clauses 14.131 An agreed damages clause is an express term of a contract that stipulates the amount of damages, or other benefits, payable or transferable by the offending party to the innocent party in the event of a breach.518 Agreed damages clauses are enforceable unless they are penal in nature under the common law or contrary to s 326 of the Fair Work Act. Under the common law agreed damages clauses that are enforceable are called liquidated damages clauses and those that are unenforceable are called penalty clauses: ‘[the] essence of a penalty is a payment of money stipulated

as in terrorem of the offending party; the essence of [page 924] liquidated damages is a genuine covenanted pre-estimate of damage’.519 The modern rule against penalties is founded upon the policy of the law to relieve parties from unconscionable and oppressive bargains.520 It is an exception to the general contractual rule that the parties are free to agree upon the terms governing their relationship.521 The purpose of an agreed damages clause is to avoid the difficulty and expense of proving the actual loss suffered as the result of a breach. The sum stipulated in the contract acts as an agreed assessment of the damages arising from the breach.522 The damages award is not to be enlarged by proof of actual loss in excess of the stipulated amount or reduced to reflect mitigation of that loss.523 The parties bound by a liquidated damages clause do not have the right to elect between the agreed damages specified in the contract and unliquidated damages. 14.132 The principles governing agreed damages clauses apply to contracts of employment.524 Agreed damages clauses are now reasonably rare in employment contracts.525 Litigation most commonly arises in two related types of cases.526 First, where an employee is required to give a specified period of notice and, if the notice is not provided and served, the [page 925] employee is to pay a sum to the employer.527 Second, where an employee is required to pay a specified sum to an employer if he or she breaches the contract by terminating the employment before the expiration of a fixed term. Often this second type of agreement is connected with an agreement that the employee will serve the employer for a fixed period of time after receiving training (or other career enhancing benefits) facilitated by the employer.528 Section 326 of the Fair Work Act substantially modifies the

common law in these types of cases: see 14.136.

The rule against penalties and its statutory modification 14.133 The rule against penalties is that damages are not recoverable under an agreed damages clause that is penal in nature. Whether an agreed damages clause matches that description is a question of construction to be decided upon the terms and circumstances of each particular contract, judged as at the time of the making of the contract, not as at the time of the breach.529 The onus of proving that the clause is a penalty clause rests with the party who impugns the enforceability of the clause.530 The rule against penalties only applies where there has been a breach of the contract by one of the parties. Where a contract requires that a payment be made on the occurrence of a particular event that is not a breach, the question of whether the payment is a penalty does not arise.531 Consequently, where a contract requires an employer to provide six months’ pay in lieu of notice to an employee, the question of whether that payment is a penalty does not arise because the election to terminate [page 926] the contract by the payment in lieu of notice is not a breach of the contract.532 14.134 Whether an agreed damages clause is penal depends upon a number of factors — first and foremost, ‘the degree of disproportion between the stipulated sum and the loss likely to be suffered by the plaintiff’.533 This is a critical issue. A clause will be penal if the stipulated sum is ‘extravagant, exorbitant or unconscionable’ when compared with the damages likely to be suffered by the employer: ‘[it] is not enough that it should be lacking in proportion. It must be “out of all proportion” ’.534 Second, the terms used by the parties to describe the sum will be relevant, though not determinative.535 The true characterisation is a matter for the court, not the parties.536 Given the basis of the jurisdiction to set aside penalty clauses is relief from oppression, it is suggested that little heed should be paid to the parties’ characterisation of an oppressive agreed damages clause.537

Third, there is a presumption that an agreed damages clause is penal if ‘a single sum is payable … on the occurrence of one or more of several events, some of which may occasion serious and others trifling damage’.538 Even if the sum is payable on the occurrence of only one [page 927] specified obligation it may still be a penalty clause, especially if the sum to be paid is not proportionate to the unfulfilled part of the obligation. In Arlesheim Limited v Werner the employee was required to provide six months’ notice to her employer. The agreed damages clause stated that she was liable to pay the employer four months’ wages if she did not provide and serve that notice. The stipulated sum was payable whether the employee had provided and served one week’s notice, or five months’ notice. The court held that the clause was a penalty provision, in part because the stipulated sum was not referable to the extent to which the obligation to serve six months’ notice remained unfulfilled.539 14.135 Fourth, the ease or difficulty in assessing damages will be relevant in determining if the clause is penal in nature. An agreed damages clause is more likely to be penal if the damages arising from a breach are readily calculable and the clause stipulates a sum well in excess of those damages. Conversely, where the damages arising from the breach are difficult to calculate, imprecise and uncertain then courts will allow the parties greater leeway before determining that a clause is penal.540 Finally, the nature of the relationship between the parties is relevant.541 Damages cannot be recovered under a penal clause, even if the actual damage exceeds the agreed damage.542 An employer may recover unliquidated damages for a breach governed by a penal clause.543 A claim for damages will fail if the clause is unenforceable and the employer fails to prove any actual loss arising from the breach of the contract.544

Section 326 of the Fair Work Act 14.136 Section 326 of the Fair Work Act modifies the law relating to

penalties and liquidated damages so far as it concerns terms requiring, or having the effect of requiring, payments by employees to employers or [page 928] a party related to the employer.545 The provisions clearly modify the law relating to payments made by an employee to the employer during the course of employment, though in practice such provisions are rare. There may be some doubt about whether s 326 will apply where a contract requires the payment by the employee on termination of the contract. As noted above, agreed damages provisions most commonly apply in such circumstances.546 Neither the Explanatory Memorandum nor the Regulations resolve that doubt. It is highly probable that s 326 will apply in such a case. The evident purpose of ss 323–325 would be compromised if they only applied during the course of the employment and did not concern obligations that crystallised on the termination of employment. Similarly, the reference to ‘an employee’ in s 326 should be interpreted to apply to a liability of an employee that crystallises on the breach by the employee, even if that breach coincides with the termination of the contract. In contrast with the common law test, s 326(1) renders unenforceable a term requiring a payment that is ‘unreasonable in all the circumstances’ even if the payment does not meet the more onerous common law test that penalty clauses be ‘extravagant, exorbitant or unconscionable’ when compared with the damages likely to be suffered by the employer.547 It is suggested that a payment may be unreasonable due to either its quantity or the circumstances in which the amounts become payable. A term of a contract that does not comply with s 326 ‘has no effect to the extent that the term … requires an employee to make a payment to the employer’. The section does not render the term void. In contrast with the common law position that invalidates any recovery based on a penalty clause, it appears that under s 326 liquidated damages may be recovered when the term requires a payment that is reasonable, but not when the payment is unreasonable. In the latter case, the employer could recover proved damages. ____________________

1.

J Carter and E Peden, ‘Damages Following Termination for Repudiation: Taking Account of Later Events’ (2008) 24 JCL 145 at 170.

2.

M Tilbury, Civil Remedies, Vol 1, Butterworths, Sydney, 1990, p 40; H McGregor, McGregor on Damages, 17th ed, Sweet & Maxwell, London, 2003, p 3 and Broome v Cassell & Co [1972] AC 1027 at 1070; 1 All ER 801 at 823. The function of damages in other contexts, such as for the commission of a tort, is beyond the scope of this text.

3.

In this chapter it is assumed that it is the employee who is seeking to recover the damages. An employee is liable in damages for breach of a term of the contract, such as the duty to exercise proper care: Janata Bank v Ahmed [1981] ICR 791 at 795–7, 803, 809; Dimos v Hanos [2001] VSC 173 at [120]–[123] and Lister v Romford Ice and Cold Storage Co Ltd [1957] AC 555; [1957] 1 All ER 125. The ordinary contractual principles governing the recovery of damages will apply when an employer seeks damages from an employee, subject to any statutory provision modifying those principles. Employers rarely sue employees to recover damages. From a practical point of view, an employer is more likely to terminate the contract for breach rather than sue for damages which it may never recover. Employees may also be liable under various statutes such as the Australian Consumer Law (ACL): see Houghton v Arms (2006) 225 CLR 553; 231 ALR 534 discussed in J Fetter, ‘Houghton v Arms: Employees Strictly Liable for Mistakes at Work’ (2007) 20 AJLL 303. Many actions for money by employers against employees are based on a breach of fiduciary obligations or the equitable duty of confidence and seek to recover equitable compensation or an account of profits rather than damages. Those equitable remedies are discussed in 15.115 and 15.120. There are numerous cases in which the employer seeks to recover damages for breach of the contractual duties of confidence or fidelity: Dinte v Hales [2009] QSC 63 and Digital Pulse Pty Limited v Harris (2002) 40 ACSR 487; [2002] NSWSC 33 at [96] varied in part on appeal at (2003) 56 NSWLR 298; 197 ALR 626; [2003] NSWCA 10.

4.

H McGregor, note 2 above, pp 111–2.

5.

The discretionary nature of damages in equity is discussed in 15.116 and 15.121.

6.

Nominal damages are discussed in 14.15.

7.

K Mason et al, Mason and Carter’s Restitution Law in Australia, 2nd ed, LexisNexis Butterworths, Australia, 2008.

8.

There are at least 19 qualifications and exceptions to that proposition: see 14.43 (damages for wages not earned), 14.45 (non-wage benefits accruing during notice period), 14.46 (non-wage benefits that would have been payable by third parties), 14.47 (other damages for non-wage benefits), 14.49 (modifications to the application of the least burdensome performance rule), 14.53 (damages for loss of a chance to obtain a benefit that arises due to service during the notice period), 14.56–14.62 (damages for the loss of a chance to acquire a commission, have a fixed term contract renewed or to remain in employment after the application of a job security clause), 14.56 (damages for employees entitled to be provided with a reasonable amount of work), 14.65 (adjustment of damages to take into account vicissitudes), 14.65 (adjustment of lump sum damages for future loss), 14.79 (damages for physical and psychiatric injury), 14.80 (damages for physical inconvenience), 14.81–14.82 (damages for breach of a term for freedom from distress), 14.88–14.89 (damages for breaches that make it more difficult to obtain future employment), 14.86–14.91 (damage to reputation), 14.108–14.115 (reduction in damages for avoidable loss), 14.115 (increase in damages for amounts spent seeking to mitigate loss), 14.116–14.117 (reduction in damages for avoided loss), 14.118–14.130 (deduction for collateral benefits arising out of and connected with the breach) and 14.131–14.135 (liquidated damages).

9.

Beckham v Drake (1849) II HLC 579; 9 ER 1213, H McGregor, note 2 above, p 937 and Patterson v Middle Harbour Yacht Club (1996) 64 FCR 405 at 406.

10.

A Brooks, ‘Damages for Harsh, Unjust or Unreasonable Dismissal: The Implications of Gorgevski v Bostik (Australia) Pty Ltd’ (1995) 8 AJLL 41 at 55.

11.

The qualifications and exceptions are listed in note 8 above.

12.

Referring to Skelton v Collins (1966) 115 CLR 94 at 128 per Windeyer J.

13.

Haines v Bendall (1991) 172 CLR 60 at 63; 99 ALR 385 at 386 per Mason CJ, Dawson, Toohey and Gaudron JJ; European Bank Ltd v Evans (2010) 240 CLR 432; 264 ALR 1 at [11]. See 14.32–14.34 concerning the application of the compensatory principle in making monetary awards under various statutory schemes.

14.

Other exceptions, such as the rule in Bain v Fothergill (1874) LR 7 HL 158, can be safely ignored in an employment context. There are other factors that limit the damages recoverable by employees. The damage must be caused by the breach: see 14.17–14.20. The damages must not be too remote: see 14.21–14.23. The employee must prove the damages lost: see 14.24. These limitations are not exceptions to the compensatory principle.

15.

See 14.67, 14.77, 14.83, 14.86 and 14.92.

16.

See 14.131.

17.

Décor Corporations Pty Ltd v Dart Industries Inc (1993) 179 CLR 101 at 111; 116 ALR 385 at 387; Colbeam Palmer v Stock Affiliates Pty Ltd (1968) 122 CLR 25 at 32 and 34; see 15.120.

18.

See 15.126.

19.

Flaherty v Girgis (1985) 63 ALR 466 at 482–3 (aff’d (1987) 162 CLR 574; 71 ALR 1).

20.

Mahony v J Kruschich (Demolitions) Pty Ltd (1985) 156 CLR 522 at 527; 59 ALR 722 at 724–5.

21.

Marks v GIO Australia Holdings Limited (1998) 196 CLR 494; 158 ALR 333 at [12] per Gaudron J; Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 80; 104 ALR 1 at 9– 10. (‘The award of damages for breach of contract protects a plaintiff’s expectation of receiving the defendant’s performance. That expectation arises out of or is created by the contract. Hence, damages for breach of contract are often described as “expectation damages”.’)

22.

A rare example of reliance damages awarded in an employment case is Eisling v Wright Trading Pty Ltd [2007] QSC 17 at [39] (employee’s money spent on a planned holiday was wasted when the employer, in breach of contract, cancelled the employee’s leave).

23.

See 14.43.

24.

K Mason et al, note 7 above, pp 712–7.

25.

See 15.115, 15.117 and 15.120.

26.

H McGregor, note 2 above, pp 12–3; The Mediana [1900] AC 113 at 116.

27.

H McGregor, note 2 above, Ch 10. Nominal damages have been awarded for a range of breaches of employment contracts: see, for example, Brace v Calder [1895] 2 QB 253 at 262 and 264 (wrongfully dismissed employee failed to mitigate his loss); Woolworths Ltd v Olson (2004) 184 FLR 121; 63 IPR 258; [2004] NSWSC 849 at [272]–[274] (aff’d [2004] NSWCA 372) (employee emailed confidential material to his wife in breach of the contract); Collie v Watts [1913] 15 WALR 97 (delay in the performance of work by only a few minutes) and Sanders v Parry [1967] 1 WLR 753 at 764; 2 All ER 803 at 806–7 (breach of duty of faithful service by not informing employer that a secretary was dissatisfied in her work).

28.

Cell Tech Communication Pty Limited v Nokia Mobile Phones (UK) Limited (1995) 58 FCR 365 at 375; 136 ALR 733 at 750 and the cases cited therein.

29.

See The Mediana, note 26 above, at 116 and Chappel v Hart (1998) 195 CLR 232; 156 ALR 517 at [58], [93] and [149].

30.

For example, a shilling was the nominal damages awarded in Purcell v Bacon (1914) 19 CLR 241 and Luna Park (NSW) Limited v Tramways Advertising Pty Limited (1938) 61 CLR 286 and five dollars was awarded in Elliott v Reading [1999] WASCA 11.

31.

Uren v John Fairfax and Sons Pty Ltd (1966) 117 CLR 118 at 149.

32.

Lamb v Cotogno (1987) 164 CLR 1 at 8; Gray v Motor Accident Commission (1998) 196 CLR 1 at 5.

33.

XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd (1985) 155 CLR 448 at 471 and Lamb v Cotogno, note 32 above, at 9–10.

34.

Hospitality Group Pty Limited v Australian Rugby Union (2001) 110 FCR 157 at 190–1 and the authorities discussed therein.

35.

The restrictive approach taken by the House of Lords in Rookes v Barnard [1964] AC 1129 (as significantly revised in Broome v Cassell, note 2 above and Kuddus v Chief Constable of Leicestershire Constabulary [2001] 3 All ER 193) has not been followed in Australia: Uren v John Fairfax and Sons Pty Ltd, note 31 above and Australian Consolidated Press Pty Ltd v Uren (1967) 117 CLR 22.

36.

For example, punitive damages were awarded against the defendant who procured the dismissal of the employee by the Norfolk Island Supreme Court in Sanders v Snell [2000] NFSC 5; see also the earlier proceedings in that matter in the Full Court of the Federal Court at (1997) 73 FCR 569 and in the High Court at (1998) 196 CLR 329). See also Kuddus v Chief Constable of Leicestershire Constabulary, note 35 above.

37.

Hospitality Group Pty Limited v Australian Rugby Union, note 34 above, at 190–4; Butler v Fairclough (1917) 23 CLR 78 at 89; Gray v Motor Accident Commission, note 32 above, at 6–7. As to the position in equity, see R Meagher et al, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies, 4th ed, LexisNexis Butterworths, Sydney, 2002 p 839; L Aitken, ‘Developments in Equitable Compensation: Opportunity or Danger?’ (1993) 67 ALJ 596 at 599– 600; Décor Corporations Pty Ltd v Dart Industries Inc, note 17 above, at 111 and most extensively in Harris v Digital Pulse Pty Ltd (2003) 56 NSWLR 298 at [5]–[61] and [470] (and at [291]–[299] on the position in contract) overturning Digital Pulse Pty Limited v Harris, note 3 above, at 508–15.

38.

Harris v Digital Pulse Pty Ltd (2003) 56 NSWLR 298 at [5]–[61].

39.

See 14.33.

40.

See the tentative views expressed by Lockhart J in Hall v A & A Sheiban Pty Ltd (1989) 20 FCR 217 at 241 and the dicta of French J at 282. C Parker, ‘Public rights in private government: corporate compliance with sexual harassment legislation’ (1998) 5 AJHR 159 suggests that punitive damages should be awardable for breaches of some anti-discrimination laws. Punitive damages were awarded in Font v Paspaley Pearls [2002] FMCA 142 at [158]–[167], although the damages in that case are probably more accurately defined as aggravated damages.

41.

Wilson v IPC Corporation (Australia) Pty Ltd (1995) 67 IR 302 at 313; Shorten v Australian Meat Holdings (1996) 70 IR 360 at 379–80; Messervy v Maldoc Pty Limited (1995) 63 IR 61 at 67; Slifka v JW Sanders Pty Limited (1995) 67 IR 316 at 335.

42.

Chappell v Hart, note 29 above, at [23] and Brackenridge v Toyota Motor Corporation Australia Ltd (1997) 142 ALR 99 at 110.

43.

Bennett v Minister of Community Welfare (1992) 176 CLR 408 at 428; 107 ALR 617 at 631 per McHugh J (‘The existence of the causal connexion is to be determined in accordance with common sense notions of causation and not in accordance with any philosophical or scientific theory of causation or any modification or adaptation of such a theory for legal purposes’); March v E & MH Stramare Pty Limited (1991) 171 CLR 506 at 515; 99 ALR 423 at 430 and Chappell v Hart, note 29 above, at [23], [62] and [93].

44.

Fitzgerald v Penn (1954) 91 CLR 268 at 277; Rivett Arboricultural & Waste Equipment Hire Pty Ltd v Evans (2007) 161 IR 383; [2007] SASC 108 at [115]–[127]; Goldman Sachs JB Were Services Pty Ltd v Nikolich (2007) 163 FCR 62; [2007] FCAFC 120 at [52]; March v E & MH Stramare Pty Limited, note 43 above, CLR at 515–7 and 522–4; ALR at 430–1 and 434–6; Medlin v State Government Insurance Commission (1995) 182 CLR 1 at 6; 127 ALR 180 at 183; Bennett v Minister of Community Welfare, note 43 above, CLR at 413; ALR at 619; Alexander v Cambridge Credit Corporation Limited (1987) 9 NSWLR 310 at 335–6 and 350; Wylie v ANI Corp Ltd [2002] 1 Qd R 320; 140 IR 408; [2000] QCA 314 at [43].

45.

Norton Australia Pty Ltd v Streets Ice Cream Pty Ltd (1968) 120 CLR 635 at 643; Alexander v Cambridge Credit Corporation Limited, note 44 above, at 350–1; though the contribution cannot be de minimis (at 253); Wylie v ANI Corp Ltd, note 44 above, at [27] and [43]–[45]; Simonius Vischer & Co v Holt & Thompson [1979] 2 NSWLR 322 at 346; Goldman Sachs JB Were Services Pty Ltd v Nikolich, note 44 above, at [68].

46.

Namely, loss is not recoverable unless the employee can prove that the loss would not have occurred but for the breach of the contract.

47.

March v E & MH Stramare Pty Limited, note 43 above, CLR at 514–6; ALR at 428–30; Chappell v Hart, note 29 above, at [24]–[26], [62], [93] and [116]–[117]; Bennett v Minister of Community Welfare, note 43 above, CLR at 413; ALR at 631.

48.

H McGregor, note 2 above, p 100.

49.

Fitzgerald v Penn, note 44 above, at 277 per Dixon CJ, Fullagar and Kitto JJ and March v E & MH Stramare Pty Ltd, note 43 above, CLR at 515, 520–2 and 534; ALR at 429–30, 433–4 and 443–4; see also Alexander v Cambridge Credit Corporation Limited, note 44 above, at 335–6 and 349–52.

50.

Medlin v State Government Insurance Commission, note 44 above, CLR at 6; ALR at 183; Chapman v Hearse (1961) 106 CLR 112 at 122; Mahony v J Kruschich (Demolitions) Pty Ltd, note 20 above, CLR at 528; ALR at 726.

51.

Astley v Austrust Limited (1999) 197 CLR 1; 161 ALR 155.

52.

See J Carter et al, Contract Law in Australia, 7th ed, LexisNexis Butterworths, Australia, 2007, pp 826–30.

53.

See the discussion in Goldman Sachs JB Were Services Pty Ltd v Nikolich, note 44 above, at [52]–[68] and 14.79.

54.

Rankin v Marine Power International Pty Ltd (2001) 107 IR 117; [2001] VSC 150 at [401]– [412] and 14.53–14.59.

55.

Longdon-Griffiths v Smith [1950] 2 All ER 662 and Speake v Hughes [1904] 1 KB 138 (dealing with the causative link between defamation and the employer’s decision to terminate the employer).

56.

See also Spring v Guardian Assurance plc [1995] 2 AC 296 at 327 and 328; [1994] 3 All ER 129 at 152–3 and 154–5 (causative link between the employer’s reference and the failure to obtain subsequent employment).

57.

The various stages of this litigation are reported in Malik v Bank of Credit and Commerce International SA [1998] AC 20; [1997] 3 All ER 1 (where it was found that the duty was owed); Bank of Credit and Commerce International SA v Ali (No 2) [2000] ICR 1354 (the trial where it was found the duty was breached, but damages were not proven) and Bank of Credit and Commerce International SA v Ali (No 2) [2002] 3 All ER 750 (the appeal on the issue of damages).

58.

Bank of Credit and Commerce International SA v Ali (No 2), note 57 above, at [42].

59.

Malik v Bank of Credit and Commerce International SA, note 57 above, AC at 49–50; All ER at 19.

60.

European Bank Ltd v Evans, note 13 above, at [12].

61.

European Bank Ltd v Evans, note 13 above, at [13].

62.

European Bank Ltd v Evans, note 13 above, at [13] and Commonwealth v Amann Aviation Pty Ltd, note 21 above, CLR at 92; ALR at 18. There is what might be called a third limb in Hadley v Baxendale, namely that the damages sought are consistent with public policy: see H McGregor, note 2 above, pp 210–2 and the discussion in 14.93 concerning the principles of remoteness in the recovery of damages for mental distress.

63.

Koufos v C Czarnikow Ltd [1969] 1 AC 350 at 388, 415, 425; [1967] 3 All ER 686 at 693, 711 and 718 and Wenham v Ella (1972) 127 CLR 454 at 471–2.

64.

Koufos v C Czarnikow Ltd, note 63 above, AC at 385; All ER at 691; Commonwealth v Amann Aviation Pty Ltd, note 21 above, CLR at 91–2; ALR at 17–18 and Guthrie v News Ltd [2010] VSC 196 at [59].

65.

Koufos v C Czarnikow Ltd, note 63 above, AC at 421; All ER at 715; Victoria Laundry (Windsor) Limited v Newman Industries Limited [1949] 2 KB 528 at 539–40, H McGregor, note 2 above, pp 201–10 and Guthrie v News Ltd, note 64 above, at [52].

66.

Guthrie v News Ltd, note 64 above, at [58]–[65].

67.

Alexander v Cambridge Credit Corporation Ltd, note 44 above, at 365 per McHugh JA.

68.

Silvey v Pendragon Plc [2001] IRLR 685; [2001] EWCA Civ 784 at [29]–[33].

69.

See 14.15.

70.

See 14.7–14.8.

71.

O’Neill v Medical Benefits Fund of Australia (2002) 122 FCR 455; [2002] FCAFC 188 at [33] and Ratcliffe v Evans [1892] 2 QB 524 at 532–3; see also 14.53–14.54 concerning proof in loss of chance cases.

72.

LJP Investments Pty Ltd v Howard Chia Investments Pty Ltd (1990) 24 NSWLR 499 at 508; Houghton v Immer (No 155) Pty Ltd (1997) 44 NSWLR 46 at 59; Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388; 204 ALR 26 at [74] and S M Waddams, ‘Damages: Assessment of Uncertainties’ (1998) 13 JCL 55 at 55–9.

73.

Keays v J P Morgan Administrative Services Australia Limited [2011] FCA 358 at [74] (onus on employee to prove that certain benefits had vested on termination): as to causation, see 14.17–14.20; as to remoteness of damages, see 14.21–14.23. When reliance damages are sought to be recovered by an employee (a rarity in employment law) the employer bears the onus of proving that the employee should not recover reasonably incurred wasted expenditure: see Commonwealth v Amann Aviation Pty Ltd, note 21 above, CLR at 86–90; ALR at 14–6.

74.

Ivory v Palmer [1975] ICR 340 at 347–8 and 352.

75.

See 14.99.

76.

Wenham v Ella, note 63 above, at 473; Johnson v Perez (1988) 166 CLR 351 at 355–6, 371 and 386–7; 82 ALR 587 at 589–90, 600 and 612. The position under the ACL is different due to s 238: see Murphy v Overton Investments Pty Ltd, note 72 above, at [52] and [55].

77.

For example, the assessment of damages in personal injury cases: Johnson v Perez, note 76 above, CLR at 386–7; ALR at 612; or where money is payable in a foreign currency: Miliangos v Frank (Textiles) Limited [1976] AC 443; [1975] 3 All ER 801; or where the damages are payable under Lord Cairns’ Act in lieu of an order for specific performance or an injunction: see 15.119.

78.

Johnson v Perez, note 76 above, CLR at 355–6, 371 and 386–7; ALR at 589–90, 600 and 612; Johnson v Agnew [1980] AC 367 at 400–1; [1979] 1 All ER 883 at 895–6.

79.

Wenham v Ella, note 63 above, at 473–4 and Arthurson v State of Victoria (2001) 140 IR 188; [2001] VSC 244 at [407].

80.

J Carter and E Peden, ‘Damages Following Termination for Repudiation: Taking Account of Later Events’ (2008) 24 JCL 145 at 153–5 and 161–70.

81.

The issue also arises when considering the inference of an election to affirm: see 6.46 and 10.99.

82.

Larking v Great Western (Nepean) Gravel Ltd (1940) 64 CLR 221 at 229, 230 and 236 (promise to build a fence was a once and for all breach whereas the promise to maintain it would have been a continuing breach).

83.

National Coal Board v Galley [1958] 1 All ER 91 at 102.

84.

H McGregor, note 2 above, p 340.

85.

National Coal Board v Galley, note 83 above, at 101.

86.

Mann v Capital Territory Health Commission (1982) 148 CLR 97 at 101; 42 ALR 46 at 48; see also Lewis v Peachey (1862) 1 H & C 518 at 520 (continuing breach committed by an apprentice who absented himself from service where the apprenticeship was under deed); Norwest Holst Group Administration Ltd v Harrison [1985] ICR 668 at 681 (obligation of employer to employ in the agreed position was a continuing obligation).

87.

Larking v Great Western (Nepean) Gravel Ltd, note 82 above, at 236 per Dixon J.

88.

National Coal Board v Galley, note 83 above, at 101–4.

89.

Hyde v Watts (1843) 12 M & W 254; 152 ER 1193 at 1200, referred to approvingly in Larking v Great Western (Nepean) Gravel Ltd, note 82 above, at 237.

90.

Larking v Great Western (Nepean) Gravel Ltd, note 82 above, at 229 and 236.

91.

See, for example, Reid v Camphill Engravers [1990] ICR 435 at 439–40 (no affirmation where underpayment persisted for three years as each week in which there was an underpayment there was a breach, described as ‘a continuing breach’) and New Southern Railway Ltd v Quinn [2006] ICR 761 at 783–4 (no affirmation when there was a demotion and reduction in pay for six months, described as a ‘a continuing breach’); cf National Coal Board v Galley, note 83 above, at 101 where such a breach was considered to be a once and for all breach.

92.

Brammer v Deery Hotels (1974) 3 ALR 621 at 624; Jones v Lorne Sawmills Pty Ltd [1923] VLR 58 and R v Industrial Appeals Court; Ex parte Barelli’s Bakeries Pty Ltd [1965] VR 615; see now s 544 of the Fair Work Act.

93.

Mann v Capital Territory Health Commission, note 86 above, CLR at 101; ALR at 48 per Stephen, Wilson and Brennan JJ.

94.

See 15.119.

95.

See the Income Tax (Transitional Provisions) Act 1997 (Cth).

96.

There is also a tax free component for certain payments relating to pre-1983 employment (see s 82-155) or permanent invalidity (see s 82-150). In this paragraph all references to sections are to the Income Tax Assessment Act 1997 (Cth).

97.

Payments made for the employee’s benefit or at the employee’s direction or request are similarly taxable: s 80-20.

98.

Subdivision 82B applies to death benefits. Subdivision 83D applies to foreign employment.

99.

As to the meaning of ‘in consequence of’, see Reseck v Federal Commissioner of Taxation (1975) 133 CLR 45; 6 ALR 642; Le Grand v Commissioner of Taxation (2002) 124 FCR 53; 195 ALR 194; [2002] FCA 1258; Paklan Pty Ltd v Federal Commissioner of Taxation (1983) 67 FLR 328 and Dibb v Federal Commissioner of Taxation (2003) 53 ATR 290; [2003] FCA 673.

100. Section 82-120(1). In relation to payments received after the 12-month period, see s 83-295, s 82120(4), the Employment Termination Payments (12 month rule) Determination 2007 and the Employment Termination Payments Redundancy Trusts (12 month rule) Determination 2009. The Commissioner may also make a determination relating to the 12-month rule under s 82120(5). 101. Subdivisions 83A and 83B deal with unused annual or long service leave payments. 102. Section 82-10. The age at which the more beneficial rate is available is called the preservation age and will gradually increase to 60 by 2025. 103. An amount indexed under s 82-160 that in 2010–11 stood at $160,000. 104. See s 83-175 that also specifies certain other conditions that must be satisfied to meet the definition of a genuine redundancy payment. See also s 83-180 that defines early retirement payment. 105. For the 2010–11 income year, the base amount is $8126 and the service amount is $4064. 106. Cullen v Trappell (1980) 146 CLR 1; 29 ALR 1 overturning Atlas Tiles Ltd v Briers (1978) 144 CLR 202; 21 ALR 129; see generally R Mitchell and J Telfer, ‘The Taxation Implications of Statutory Unlawful Terminations of Employment’ (1994) 7 AJLL 227. 107. See also WT Partnership (Aust) Pty Ltd v Sheldrick (1998) 89 IR 206 at 239; [1998] FCA 1794 (aff’d on other grounds (1999) 96 IR 202; [1999] FCA 843) (damages grossed up to account for the fact that termination payment taxed as an ETP in Australia, but if it had been paid in accordance with the contract it would have been taxed at the 15% rate applicable in Malaysia). 108. Wheeler v Philip Morris Ltd (1989) 97 ALR 282 at 312–3; 32 IR 323 at 352–3; Kilburn v Enzed Precision Products (Aust) Pty Ltd (1988) 4 VIR 31 at 34; Guthrie v News Ltd, note 64 above, at [196] and Grout v Gunnedah Shire Council (No 3) (1995) 129 ALR 372 at 373–4; 59 IR 248 at 248–50 (rev’d on other grounds in (1995) 134 ALR 156). 109. Patterson v Middle Harbour Yacht Club, note 9 above, at 408–9; Slifka v JW Sanders Pty Ltd, note 41 above; Martin v Tasmania Development and Resources (1999) 163 ALR 79; 89 IR 98; [1999] FCA 593 at [96] and NSW Cancer Council v Sarfaty (1992) 28 NSWLR 68 at 80. 110. The formula is GU = U/ (1-TP/100) where GU = grossed up figure, U = ungrossed amount and TP = tax percentage: Martin v Tasmania Development and Resources, note 109 above, at [96]. 111. On the virtue of avoiding unnecessary complexities inherent in such a calculation, see Grout v Gunnedah Shire Council (No 3), note 108 above, ALR at 374; IR at 250. Note also Beach v Reed

Corrugated Cases Ltd [1956] 2 All ER 652 at 658–9 which discusses the issue in the context of an employee who, lawfully, had substantially reduced his income tax liability. 112. O’Brien v McKean (1968) 118 CLR 540 and Pennant Hills Restaurants Pty Ltd v Barrell Insurances Pty Ltd (1981) 145 CLR 625; 34 ALR 162. 113. Hungerfords v Walker (1989) 171 CLR 125 at 140–6, 149–50 and 152; 84 ALR 119 at 126–30, 133 and 135. 114. Hungerfords v Walker, note 113 above, CLR at 140–6; ALR at 126–30. 115. Haines v Bendall, note 13 above, CLR 60 at 66; ALR at 388. 116. For amounts the employer was required to pay under the Fair Work Act, see s 547; Textile, Clothing and Footwear Union of Australia v Givoni Pty Ltd (2002) 121 IR 250; [2002] FCA 1406 at [90]; Australian Licensed Aircraft Engineers Association v International Aviations Service Assistance Pty Ltd (2011) 193 FCR 526; 205 IR 392; [2011] FCA 333 at [542]–[457]. 117. Hungerfords v Walker, note 113 above, CLR at 147–8; ALR at 131–2. 118. Murphy v Overton Investments Pty Ltd, note 72 above, at [44] and Marks v GIO Australia Holdings Limited, note 21 above, at [12]–[16], [38], [100], [108], [152]. 119. ACL s 13; Marks v GIO Australia Holdings Limited, note 21 above, at [34], [46] and [93]. 120. State and territory courts cannot order compensation for the breach of a civil penalty provision: they may only order an employer to ‘pay an amount to, or on behalf of, an employee of the employer if the court is satisfied that the employer was required to pay the amount’. 121. Discrimination Act 1991 (ACT) s 102(2)(b)(iii); Anti-Discrimination Act 1977 (NSW) s 113(1) (b)(ii); Anti-Discrimination Act (NT) s 88(1)(b); Anti-Discrimination Act 1991 (Qld) s 209(1) (b); Equal Opportunity Act 1984 (SA) s 96(1)(a); Anti-Discrimination Act 1998 (Tas) s 89(1)(d); Equal Opportunity Act 2000 (Vic) s 136(a)(ii); Equal Opportunity Act 1984 (WA) s 127(1)(b)(i). 122. Haines v Bendall, note 13 above, CLR at 63; ALR at 386. 123. Under the ACL, see Marks v GIO Australia Holdings Limited, note 21 above, at [42]; O’Neill v Medical Benefits Fund of Australia, note 71 above, at [29]; Moss v Lowe Hunt and Partners Pty Ltd [2010] FCA 1181 at [111] and [128]; Multigroup Distribution Services Pty Ltd v TNT Australia Pty Ltd (2001) 109 FCR 528; 191 ALR 402; [2001] FCA 226 at [29] (aff’d (2001) 114 FCR 108; [2001] FCA 1620) (no award for account of profits under the ACL); in discrimination claims, see Hall v A & A Sheiban Pty Ltd, note 40 above, FCR at 239 and 281; ALR at 522 and 569–70; cf Dunnachie v Kingston-upon-Hull City Council [2005] 1 AC 226; [2004] 3 All ER 1011. 124. As to non-wage benefits in discrimination claims, see Jamal v Secretary Department of Health (1986) EOC 92–162; Kordos v Plumrose (Australia) Ltd (1986) EOC 92–256 and B Gaze, ‘Racial Discrimination in Employment’ (1989) 2 AJLL 282. 125. As to the obligation to mitigate loss arising from discrimination claims, see Ritossa v Gray (1992) EOC 92–452; Bugden v State Rail Authority of New South Wales (1991) EOC 92–360 and Cummaudo v Aerospace Technologies of Australia (1990) EOC 92–316; in unfair dismissal claims see Bechara v Gregory Harrison Healey & Co (1996) 65 IR 382 at 389 and 390 (aff’d [1996] IRCA 262) and Black v Danka Datakey Pty Ltd (1997) 72 IR 423 at 430–1; under the ACL see Finucane v NSW Egg Corporation (1988) 80 ALR 486 at 519; see 14.101. 126. See 14.85. 127. See 14.16.

128. Australian Licensed Aircraft Engineers Association v International Aviations Service Assistance Pty Ltd, note 116 above, at [438]–[450]; the same conclusion was reached under some of the predecessor Acts: Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v ACI Operations Pty Ltd (2006) 150 IR 179; [2006] FCA 122; McIlwain v Ramsey Food Packaging Pty Ltd (No 4) (2006) 158 IR 181; [2006] FCA 1302 at [87] and Burazin v Blacktown City Guardian Pty Ltd (1996) 142 ALR 144 at 154–6 (dealing with unfair dismissals). 129. Holloway v Witham (1990) 21 NSWLR 70 at 86–7; Zoneff v Elcom Credit Union Ltd (1990) 94 ALR 445 at 468–9; Aldersea v Public Transport Corporation (2001) 3 VR 499; 183 ALR 545; [2001] VSC 169 at [39]–[41]; see also Marks v GIO Australia Holdings Ltd, note 21 above, at [46] and [93]–[96]. 130. See 14.16. 131. McIntyre v Tully (1999) 90 IR 9; [1999] QSC 121 at [25]–[27]; Elliott v Nanda (2001) 111 FCR 240; [2001] FCA 418 at [179]–[185] and Hall v A & A Sheiban Pty Ltd, note 40 above, FCR at 239 and 282; ALR at 522–3 and 570; see 14.85. 132. Moss v Lowe Hunt and Partners Pty Ltd, note 123 above, at [86]; Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 at 525; 109 ALR 247 at 253; Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 at 227; 18 ALR 639 at 646; Marks v GIO Australia Holdings Limited, note 21 above, at [9] and [46]. Section 236 of the ACL, replacing the former statutory test in s 82 of the Trade Practices Act that referred to loss and damage ‘caused by’ the contravention: Wardley Australia Ltd v Western Australia, note 132 above, CLR at 525; ALR at 253. 133. Moss v Lowe Hunt and Partners Pty Ltd, note 123 above, at [86], [87] and [98] per Katzmann J; Marks v GIO Australia Holdings Limited, note 21 above, at [42]; Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd, note 132 above, CLR at 227; ALR at 646; San Sebastian Pty Ltd v Minister administering the Environmental Planning and Assessment Act 1979 (1986) 162 CLR 340 at 366; 68 ALR 161 at 177–8 per Brennan J (‘The representation must be a real inducement or one of the real inducements to engage in the conduct which occasions the loss’) and I & L Securities Pty Limited v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109; 192 ALR 1 at [25]. As to the role of reliance, see 4.38. 134. Moss v Lowe Hunt and Partners Pty Ltd, note 123 above, at [87]; O’Neill v Medical Benefits Fund of Australia, note 71 above, at [22]–[23] and West v TWG Services Ltd (2009) 189 IR 97; [2009] FCA 1052 at [30]–[34] (no reliance by employee). 135. Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 at 450 per Latham CJ (‘[Where] a servant is wrongfully prevented by his employer from performing the work which he was employed to do, there is, in my opinion, an actual breach of the contract, and not merely a [repudiation] …’); see also at 466 per Dixon J; Gunton v Richmond-upon-Thames London Borough Council [1981] 1 Ch 448 at 468; [1980] 3 All ER 577 at 588–9. 136. Byrne v Australian Airlines Limited (1995) 185 CLR 410 at 427–8; 131 ALR 422 at 422; Automatic Fire Sprinklers Pty Ltd v Watson, note 135 above, at 454, 461, 469; Visscher v Guidice (2009) 239 CLR 361; 258 ALR 651; (2009) 187 IR 96 at [53]–[55]; Jarrett v Commissioner of Police (NSW) (2005) 224 CLR 44; 221 ALR 95; 145 IR 194 at [7] and [30]; Re Associated Dominions Assurance Society Pty Ltd (1962) 109 CLR 516 at 518; Lister v Forth Dry Dock & Engineering Co Ltd [1990] 1 AC 546 at 568; [1989] 1 All ER 1134 at 1146; Delaney v Staples [1992] 1 AC 687 at 692; 1 All ER 944 at 947. It is suggested that this is no more than another way of saying that the employer’s breach of the obligation to retain the employee in its service prevents the performance of a condition precedent to the earning of wages, just as a

buyer’s refusal to accept delivery of goods prevents the performance of a condition precedent to the earning of the price. There appears to be no other juristic function of the notion of an employment relationship. 137. Byrne v Australian Airlines Limited, note 136 above, CLR at 428; ALR at 432–3; Automatic Fire Sprinklers Pty Ltd v Watson, note 135 above, at 449, 452, 461, 463 and 476; Graham v Baker (1961) 106 CLR 340 at 345; Re Associated Dominions Assurance Society Pty Ltd, note 136 above, at 518; Decro-Wall International SA v Practitioners in Marketing Ltd [1971] 1 WLR 361 at 369–70; 2 All ER 216 at 223; Gunton v Richmond-upon-Thames London Borough Council, note 135 above, Ch at 468; All ER at 588–9; Visscher v Guidice, note 136 above, at [54]; Lucy v The Commonwealth (1923) 33 CLR 229 at 248. There are some exceptions to this proposition discussed in 9.13–9.16. 138. Fewings v Tisdal (1847) 1 Ex 295; 154 ER 125; Darlow v Edwards (1862) 1 H C 547; 158 ER 1002; Emmens v Elderton (1853) IV HLC 624; 10 ER 606 at 613–4, 617–8 and 618; Williamson v The Commonwealth (1907) 5 CLR 174 at 185; Automatic Fire Sprinklers Pty Ltd v Watson, note 135 above, at 451–3, 463–4 and 476; Lucy v The Commonwealth, note 137 above, at 248 and 253; Thompson v ASDA-MFI Group Plc [1988] Ch 241 at 266; [1988] 2 All ER 722 at 729 per Scott LJ (‘The fictional fulfillment of conditions precedent … are not principles of English law’). 139. Foran v Wight (1989) 168 CLR 385 at 395–7; 88 ALR 413 at 420–2; Peter Turnbull and Co Pty Ltd v Mundus Trading Co (A’asia) Pty Ltd (1954) 90 CLR 235 at 252–3 and Park v Brothers (2005) 222 ALR 421 at [41]–[43]. 140. Emmens v Elderton, note 138 above, ER at 613 per Crompton J (‘wherever there is a contract for hiring or employment on the one part, and service for wages or salary on the other … there is an engagement on the part of the employer to keep the employed in the relation in question during that time’), at 617–8 per Wightman J, at 618 per Erle J, at 619 per Baron Platt, at 621–2 per Coleridge J, at 623 per Baron Parke (‘I think that there is clearly implied on the part of the person who contracts to pay a salary for services for a term, a contract to permit those services to be performed, in order that the stipulated reward may be earned, besides an agreement to pay the salary at the end of the term’). This accords with the approach taken in Automatic Fire Sprinklers Pty Ltd v Watson, note 135 above, at 450–2, 461–2, 463 and 476. See also s 117(1) of the Fair Work Act. 141. M Freedland, The Contract of Employment, 1976, Clarendon Press, Oxford, pp 22 and 23; see also G McCarry, Aspects of Public Sector Employment Law, Law Book Company, Sydney, 1988, pp 188–90. In McVicar v Commissioner for Railways (NSW) (1951) 83 CLR 521 at 528, Dixon, Williams, Fullagar and Kitto JJ described an action for wrongful dismissal as ‘an action to enforce, by the recovery of damages, a right to the continuance of the employment’. See also Ryder v Foley (1906) 4 CLR 422 at 436. 142. Emmens v Elderton, note 138 above, ER at 613, 614, 619 and 623; there are some contracts in which the obligation to pay wages is not dependent on the performance of service: see 9.13–9.16. 143. Shindler v Northern Raincoat Co Ltd [1960] 1 WLR 1038 at 1043; [1960] 2 All ER 239 at 244 and Southern Foundries (1926) Ltd v Shirlaw [1940] AC 701 at 717; 2 All ER 445 at 454–5. This approach is based on Cockburn CJ’s judgment in Stirling v Maitland (1865) 5 B & S 840; 122 ER 1043; see also Ansett Transport Industries (Operations) Pty Ltd v Commonwealth (1977) 139 CLR 54 at 102; 17 ALR 513 at 553. 144. Automatic Fire Sprinklers Pty Ltd v Watson, note 135 above, at 450; see also at 466 per Dixon J; Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577; 231 ALR 663 at [156]; Marshall v Colonial Bank of Australasia (1904) 1 CLR 633 at 647 and J Burrows,

‘Contractual Co-operation and the Implied Term’ (1968) 31 MLR 390. 145. Lucy v The Commonwealth, note 137 above, at 248; Decro-Wall International SA v Practitioners in Marketing Ltd, note 137 above, WLR at 369–70; All ER at 223; George Trollope & Sons v Martyn Bros [1934] KB 436 at 456. 146. See 8.33. 147. See the discussion in Thompson v ASDA-MFI Group Plc, note 138 above, Ch at 266; All ER at 741. 148. See, for example, Hulme v Ferranti Limited [1918] 2 KB 426. 149. See 8.45; M Freedland, The Contract of Employment, note 141 above, pp 31–2 and J Burrows, ‘Contractual Co-operation and the Implied Term’ (1968) 31 MLR 390 at 398–400. 150. Automatic Fire Sprinklers Pty Ltd v Watson, note 135 above, at 450 and Associated Newspapers v Bancks (1951) 83 CLR 322 at 338. 151. APESMA v Skilled Engineering Pty Ltd (1994) 122 ALR 471 at 479; Gunton v Richmond-uponThames London Borough Council, note 135 above, Ch at 468; All ER at 589 per Buckley LJ (‘almost invariably repudiatory in character’) and Jarrett v Commissioner of Police (NSW), note 136 above, at [57] and [59]. 152. See 8.49. 153. See 14.35. 154. See 14.35. In some contracts and under some industrial instruments the right to earn wages is not earned through service and in such cases the wrongful dismissal may not terminate the right to wages: see, for example, Seymour v Stawell Timber Industries Pty Ltd (1985) 9 FCR 241; 70 ALR 391; 13 IR 289 (employees earned wages under the industrial instrument after the wrongful dismissal by the employer); Casey v FJ Walker Pty Ltd (1988) 27 IR 248 at 260–1 and on appeal at (1989) 29 IR 303 at 316–7. 155. Decro-Wall International SA v Practitioners in Marketing Ltd, note 137 above, WLR at 369–70; All ER at 223 per Salmon LJ; Automatic Fire Sprinklers Pty Ltd v Watson, note 135 above, at 461, 465 and 476; Gunton v Richmond-upon-Thames London Borough Council, note 135 above, Ch at 474–5; All ER at 593–4 and FJ Walker Pty Ltd v Casey (1989) 29 IR 303 at 315–6. 156. Emmens v Elderton, note 138 above, ER at 615 and 618 and Gunton v Richmond-upon-Thames London Borough Council, note 135 above, Ch at 469–70; All ER at 590. 157. Australian National Airlines Commission v Robinson [1977] VR 87 at 93; G McCarry, Aspects of Public Sector Employment Law, note 141 above, pp 189–90 and G McCarry, ‘No Work, No Pay’ (1983) 57 ALJ 378 at 382; see 9.21 and 10.104. 158. Automatic Fire Sprinklers Pty Ltd v Watson, note 135 above, at 476; see 10.73. 159. Peter Turnbull and Co Pty Ltd v Mundus Trading Co (A’asia) Pty Ltd, note 139 above, at 247 at 250–1; Park v Brothers, note 139 above, at [41]–[43] and Automatic Fire Sprinklers Pty Ltd v Watson, note 135 above, at 476; see also Qantas Airways Ltd v Transport Workers’ Union of Australia [2011] FCA 470 at [335]–[338]. 160. DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 at 433; 19 ALR 223 at 231 and Australian Meat Industry Employees’ Union v Frugalis Pty Ltd [1990] 2 Qd R 201 at 207; (1989) 30 IR 149 at 154. 161. See the cases at notes 137–139.

162. Bahr v Nicolay (No 2) (1988) 164 CLR 604 at 619; 78 ALR 1 at 9–10; Australian National Airlines Commission v Robinson, note 157 above, at 91–6; Australian Hardwoods Pty Ltd v Commissioner for Railways [1961] 1 All ER 737 at 742; Kaufman v McGillicuddy (1914) 19 CLR 1 at 11–12 and 14; Measures Brothers Limited v Measures [1908–1910] All ER 1188 at 1195 and Chappell v Times Newspapers Ltd [1975] ICR 145 at 174 and 177; Fechter v Montgomery (1863) 33 Beav 21; 55 ER 274 and Associated Newspapers v Bancks, note 150 above, at 338. It is implicit in cases such as Australian Rugby League Ltd v Cross (1997) 39 IPR 111 and Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337 at 342 that the absence of an express or implied right to work would render an exclusive service provision an unreasonable restraint of trade. 163. Automatic Fire Sprinklers Pty Ltd v Watson, note 135 above, at 465–6; Turner v Australasian Coal and Shale Employee’s Federation (1984) 6 FCR 177 at 192; 55 ALR 635 at 648 and Hill v CA Parsons & Co Ltd [1972] Ch 305 at 313–4. See 10.66 and 10.67. 164. Automatic Fire Sprinklers Pty Ltd v Watson, note 135 above, at 465–6. 165. See 10.66. 166. Peter Turnbull and Co Pty Ltd v Mundus Trading Co (A’asia) Pty Ltd, note 139 above, at 250 and Cohen & Co v Ockerby & Co Ltd (1917) 28 CLR 288 at 298. 167. See 9.13. 168. See 9.14. 169. Jarrett v Commissioner of Police (NSW), note 136 above, at [57]–[60]; Evans v Williams (1910) 11 CLR 550 at 565; Director-General of Education v Suttling (1987) 162 CLR 427 at 440; Williamson v The Commonwealth, note 138 above, at 185–6 and Lucy v The Commonwealth, note 137 above, at 238 per Knox CJ; see also at 238–9, 248, 253. 170. Geddes v McGrath (1933) 50 CLR 520 at 530–1, 533–4; Jarrett v Commissioner of Police (NSW), note 136 above, at [57]–[60], [146] and Suttling v Director-General of Education (1985) 3 NSWLR 427 at 443–8. 171. Geddes v McGrath, note 170 above, at 535. 172. Geddes v McGrath, note 170 above, at 530–1 and 533–4 and Jarrett v Commissioner of Police (NSW), note 136 above, at [60] and [146]. Although McHugh, Gummow and Hayne JJ in dicta in Jarrett supported this view, it is somewhat difficult to justify in a case, such as Williamson v The Commonwealth, note 138 above, where a permanent employee was wrongful removed due to the incorrect procedure being followed in relation to an allegation of misconduct. Higgins J at 186 in assessing damages took into account ‘the probability — the extreme probability — of the plaintiff speedily losing his office by legal means’. 173. Jarrett v Commissioner of Police (NSW), note 136 above, at [59]; Attorney-General (NSW) v Quin (1990) 170 CLR 1 at 45; 93 ALR 1 at 32; New South Wales v Paige (2002) 60 NSWLR 371; 115 IR 283 at [156]–[177]; E Campbell, ‘Liability to Compensate for Denial of a Right to a Fair Hearing’ (1989) 15 Mon ULR 383 at 422–5; E Campbell, ‘Termination of Appointments to Public Offices’ (1996) 24 Fed LR 1 at 37–9 and Macksville & District Hospital v Mayze (1987) 10 NSWLR 708 at 723–5 and 730–2. 174. Hartley v Harman (1840) 11 Ad & E 798; 113 ER 617; see also Williamson v The Commonwealth, note 138 above, at 185–7. Similarly, the proper action for an invalidly suspended employee is not an action for the wages as the employee usually does not serve for the period of the suspension, but for damages for breach of the term requiring the employer to permit the employee to earn wages: Hanley v Pease & Partners Ltd [1915] 1 KB 698 at 706.

175. Entire obligations are discussed in 9.29–9.31. 176. Automatic Fire Sprinklers Pty Ltd v Watson, note 135 above, at 450 and 461. See also G McGarry, ‘No Work, No Pay’ (1983) 57 ALJ 378 at 379. 177. Automatic Fire Sprinklers Pty Ltd v Watson, note 135 above, at 451 and 462 and Williamson v The Commonwealth, note 138 above, at 185–6. 178. Walker v Andrew (2002) 116 IR 380; [2002] NSWCA 214 at [47] per Brownie AJA, Spigelman CJ and Handley JA agreeing. 179. Patterson v Middle Harbour Yacht Club, note 9 above, at 409 (when employee was dismissed he was not entitled to the leave, but if the contract had been performed for the full agreed term he would have become entitled to the leave). 180. Reynolds v Southcorp Wines Pty Ltd (2002) 122 FCR 301; 155 IR 152; [2002] FCA 712. 181. Burton v Litton Business Systems Pty Ltd (1977) 16 SASR 162 at 168; Kilburn v Enzed Precision Products (Aust) Pty Ltd, note 108 above, at 34–5; Walker v Andrew, note 178 above, at [47]; Dyer v Peverill (1979) 2 NTR 1 at 6. 182. Scharmann v APIA Club Ltd (1983) 6 IR 157 at 166. 183. See Harper v Virgin Net Ltd [2005] ICR 921; cf Raspin v United News Shops Ltd [1999] IRLR 9; Robert Cort & Son v Charman [1981] ICR 816; Stapp v Shaftesburt Society [1982] IRLR 326: 184. O’Laoire v Jackel International Ltd (No 2) [1991] ICR 718 at 729. 185. See the discussion of the least burdensome performance rule in 14.48–14.52. 186. Beck v Darling Downs Institute of Advanced Education (1990) 140 IR 364 at 373 (no damages for loss of use of a car the employer had volunteered to provide during employment); Beach v Reed Corrugated Cases Ltd, note 111 above, at 656 (employee did not recover for loss of director’s fees that were likely to be paid). 187. Ryan v The Commonwealth (1936) 57 CLR 136 at 144–5; cf McClory v Post Office [1993] 1 All ER 457 at 469. 188. Reilly v Praxa Ltd [2004] ACTSC 41 at [21] referring to Walker v Andrew, note 178 above, and Patterson v Middle Harbour Yacht Club, note 9 above, at 406 (‘a fixed annual bonus’). On bonuses and the employer’s discretionary powers, see 14.51 and 14.56 189. Silvey v Pendragon Plc, note 68 above, at [11]–[15] (discussed in 14.23) and Manubens v Leon [1919] 1 KB 208 (loss of opportunity of a hairdresser’s assistant to earn tips from customers). 190. Kilburn v Enzed Precision Products (Aust) Pty Ltd, note 108 above, at 33; Tucker v Pipeline Authority (1981) 3 IR 120 at 126; Shove v Downs Surgical plc [1984] 1 All ER 7 at 11 and Howard v Pilkington (Australia) Ltd [2008] VSC 491 at [148]. 191. Patterson v Middle Harbour Yacht Club, note 9 above, at 406; Howard v Pilkington (Australia) Ltd, note 190 above, at [147] and Grout v Gunnedah Shire Council (No 2) (1995) 58 IR 67 at 82. 192. Manubens v Leon, note 189 above (loss of opportunity of a hairdresser’s assistant to earn tips; employer admitted loss of commission recoverable and it was presumably inferred that right to perform work, and so court said loss arising from wrongful dismissal was ‘measured by the damages flowing from the breach within the contemplation of the parties to the contract’. Contemplated that employee would receive tips). 193. Arthurson v State of Victoria, note 79 above, at [397]–[431]; Lindsay v Queen’s Hotel Company [1919] 1 KB 212 (loss of board and lodging) and Ivory v Palmer, note 74 above (value of loss of

accommodation not proved). 194. Shove v Downs Surgical plc, note 190 above, at 11 and Howard v Pilkington (Australia) Ltd, note 190 above, at [147]. 195. Scharmann v APIA Club Ltd, note 182 above, at 166 and Vermeesch v Harvey World Travel Franchises Pty Ltd (1997) 74 IR 364 at 366. 196. Micklefield v SAC Technology [1990] IRLR 218; Vermeesch v Harvey World Travel Franchises Pty Ltd, note 195 above, at 365–6 and Rogan-Gardiner v Woolworths Ltd [2010] WASC 290 at [188]–[189] (where the options would not have vested prior to the expiration of the notice). 197. Irons v Merchant Capital Ltd (1994) 116 FLR 204 at 207; where the expense was not agreed and is otherwise too remote it will not be recoverable: Sorrell v Kara Kar Holdings Pty Ltd [2010] NSWSC 1315 at [74]–[77] and [94]. 198. New South Wales Cancer Council v Sarfaty, note 109 above, at 78–9 and 96–7. 199. Conway-Cook v Town of Kwinana (2001) 108 IR 421; [2001] WASCA 250 at [52]; see also Burton v Litton Business Systems Pty Ltd, note 181 above and Kilburn v Enzed Precision Products (Aust) Pty Ltd, note 108 above, at 34. 200. Willis v Health Communications Network Ltd (2007) 167 IR 425; [2007] NSWCA 313 at [68]– [80]; Bold v Brough, Nicholson & Hall Ltd [1963] 3 All ER 849 at 857–8; Macauslane v Fisher and Paykel Finance Pty Ltd [2003] 1 Qd R 503; [2002] QCA 282 at [29]–[30] and Ryan v The Commonwealth, note 187 above; cf Quinn v Jack Chia (Australia) Ltd [1992] 1 VR 567 at 581. 201. Willis v Health Communications Network Ltd, note 200 above, at [79]–[80]; specific performance of the obligation to pay can be obtained for this purpose: see 15.44. 202. Macauslane v Fisher and Paykel Finance Pty Ltd, note 200 above, at [29]–[30]; cf Akmeemana v Murray (2009) 190 IR 66; [2009] NSWSC 979 at [35]. 203. Commonwealth v Amann Aviation Pty Ltd, note 21 above, CLR at 91 per Mason CJ and Dawson J, 102, 152; ALR at 17, 26 and 63; Lavarack v Woods of Colchester [1967] 1 QB 278 at 293–4; [1966] 3 All ER 683 at 690; New South Wales Cancer Council v Sarfaty, note 109 above, at 78–9 and 96–7 and Abrahams v Herbert Reiach Ltd [1922] 1 KB 477 at 482. 204. Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 36 FCR 20 at 32–3; Gunton v RichmondUpon-Thames London Borough Council [1981] 1 Ch 448 at 469; [1980] 3 All ER 577 at 589 and Transport Workers’ Union of Australia v K&S Freighters Pty Ltd [2010] FCA 1225 at [188]– [191]. 205. Lavarack v Woods of Colchester, note 203 above, QB at 298; All ER at 683; see also McDonald v Parnell Laboratories Ltd (2007) 168 IR 375; [2007] FCA 1903 at [79]–[82] and Transport Workers’ Union of Australia v K&S Freighters Pty Ltd, note 204 above, at [188]–[191]. 206. A Stewart, ‘Damages for Wrongful Dismissal and the Problem of Contingencies’ (1993) 6 AJLL 50 at 56; see also the discussion of the renewal of fixed term contracts in 14.58. 207. Lavarack v Woods of Colchester, note 203 above, QB at 295; All ER at 691 per Diplock LJ and TCN Channel 9 Pty Ltd v Hayden Enterprises Pty Ltd (1989) 16 NSWLR 130 at 154–6. 208. Commonwealth v Amann Aviation Pty Ltd, note 21 above, CLR at 93; see also at 114 per Brennan J, at 132–3 per Deane J, at 146 per Toohey J and at 150 per Gaudron J (‘as a matter of common sense, in no case is an assumption to be made or maintained in the face of evidence pointing to the contrary’); 104 ALR 1 at 19, 35, 48–9, 58–9 and 61 and Ryan v The Commonwealth, note 187 above, at 146 (court rejected the assumption that the employment would be terminated when the employee became incapable of performing the work at the age of

70 because the employer’s policy was to redeploy incapacitated employees to less strenuous employment). 209. Walker v Citigroup Global Markets Australia Pty Ltd (2006) 233 ALR 687; [2006] FCAFC 101 at [83]. 210. Lavarack v Woods of Colchester, note 203 above, QB at 294; All ER at 690 per Diplock LJ; see also Withers v General Theatre Corporation Ltd [1933] 2 KB 536 at 548–9. 211. Lavarack v Woods of Colchester, note 203 above, QB at 294 and 298; All ER at 690 and 693 (no assumption that the employer would voluntarily undertake to grant pay rise, even though such increases were negotiated with other employees). 212. Beach v Reed Corrugated Cases Ltd, note 111 above, at 659–60 (discretion to discontinue employee’s participation in a pension scheme). 213. Lavarack v Woods of Colchester, note 203 above, QB at 294 and 298; All ER at 690 and 693. 214. Grout v Gunnedah Shire Council (No 3), note 108 above, ALR at 375–6; IR at 250 (sick leave) and Macauslane v Fisher and Paykel Finance Pty Ltd, note 200 above, at [31]–[32] (annual leave). 215. Howard v Pilkington (Australia) Ltd, note 190 above, at [146] and 149]–[150] where the employee ‘would almost certainly have received an increase in salary’ and bonus; Vermeesch v Harvey World Travel Franchises Pty Ltd, note 195 above, at 365–6 and Quinn v Jack Chia (Australia) Ltd, note 200 above, at 581–2. 216. Bold v Brough, Nicholson & Hall Ltd, note 200 above, at 856–7. 217. Way v Latilla [1937] 3 All ER 759; Re Galaxy Media Pty Ltd (2001) 167 FLR 149; 39 ACSR 483; [2001] NSWSC 917 at [62]–[66] (aff’d sub nom Walker v Andrew, note 178 above, at [42] and [45]); Powell v Braun [1954] 1 All ER 484 at 486. 218. Silverbrook Research Pty Ltd v Lindley [2010] NSWCA 357 at [5]–[9]; Rankin v Marine Power International Pty Ltd, note 54 above, at [411]; Mallone v BPB Industries [2002] EWCA Civ 126 at [36]–[39]; Foggo v O’Sullivan Partners (Advisory) Pty Ltd [2011] NSWSC 501 at [62]; Clark v Nomura International Plc [2000] IRLR 766 at 774; FC Gardner v Beresford [1978] IRLR 63; Horkulak v Cantor Fitzgerald International [2005] ICR 402; [2004] EWCA Civ 1287 at [46]– [72] (implied term that there would be a genuine and rational exercise of the discretion); Clark v BET plc [1997] IRLR 348; Keen v Commerzbank AG [2007] ICR 623; [2006] EWCA Civ 1536 at [47]–[60] and D Cabrelli, ‘Discretion, Power and the Rationalisation of Implied Terms’ (2007) 36 ILJ 194 at 195; see further at 8.28–8.31. 219. Silverbrook Research Pty Ltd v Lindley, note 218 above, at [6]. 220. Silverbrook Research Pty Ltd v Lindley, note 218 above, at [2] per Allsop P and Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 at 349; 120 ALR 16 at 25–6. 221. Tasmania Development and Resources v Martin (2000) 97 IR 66; [2000] FCA 414 at [37]–[38]. 222. WT Partnership (Aust) Pty Ltd v Sheldrick (1999) 96 IR 202; [1999] FCA 843 at [36]–[39]. See also 14.90. 223. Chaplin v Hicks [1911] 2 KB 786 at 792 per Williams LJ; O’Neill v Medical Benefits Fund of Australia, note 71 above, at [33] (the requirement that the amount of damage be proved with certainty ‘only means as much certainty as is reasonable in the circumstances’); Sellars v Adelaide Petroleum NL, note 220 above, CLR at 349; ALR at 25–6; see also Ipex Software Services Pty Ltd v Hosking [2000] VSCA 239 at [65]; Tito v Waddell (No 2) [1977] Ch D 106 at 322–3; 3 All ER 129 at 308 (uncertainties in the language used, which may have made the court

hesitant about ordering specific performance, ‘may well be no bar to an award of damages, especially as damages may be awarded on the footing of resolving uncertainties in favour of the innocent party and against the wrongdoer’). 224. Sellars v Adelaide Petroleum NL, note 220 above, CLR at 349; ALR at 25–6 and Malec v J C Hutton Pty Ltd (1990) 169 CLR 638 at 643; 92 ALR 545 at 548–9; see S M Waddams, ‘Damages: Assessment of Uncertainties’ (1998) 13 JCL 55 at 55–9. 225. Malec v J C Hutton Pty Ltd, note 224 above, CLR at 643; ALR at 549. 226. Malec v J C Hutton Pty Ltd, note 224 above, CLR at 643; ALR at 549 where it was said that a chance of more than 1% was not speculative; Sellars v Adelaide Petroleum NL, note 220 above, CLR at 350; ALR at 26 and Guthrie v News Ltd, note 64 above, at [168]. In Macdonald v Australian Wool Innovation Ltd [2005] FCA 105 at [250] the employee was awarded damages for the loss of a chance, assessed as 10%, that the fixed term contract would be renewed. 227. Malec v J C Hutton Pty Ltd, note 224 above, CLR at 643; ALR at 549; Commonwealth v Amann Aviation Pty Ltd, note 21 above, CLR at 114, 131, 146–7, 176–7; ALR at 35, 47–8, 58–9 and 81 and Sellars v Adelaide Petroleum NL, note 220 above, CLR at 350 and 368; ALR at 25–6 and 40. As to the inferences that may be drawn against the wrongdoer in such cases, see the cases at 14.24. 228. Wynn v NSW Insurance Ministerial Corporation (1995) 184 CLR 485 at 497; Bresatz v Przibilla (1962) 108 CLR 541 at 544 (‘all contingencies are not adverse: all vicissitudes are not harmful’) and Arthurson v State of Victoria, note 79 above, at [416]–[431]. 229. Fightvision Pty Ltd v Onisforou (1999) 47 NSWLR 473 at [147]. 230. Horkulak v Cantor Fitzgerald International, note 218 above, at [56]. 231. Macdonald v Australian Wool Innovation Ltd, note 226 above, at [251]–[255]. 232. See 8.42. 233. Devonald v Rosser & Sons [1906] KB 728 at 742 and Bauman v Hulton Press Ltd [1952] 1 All ER 1121 at 1125. 234. See 8.45. 235. Silverbrook Research Pty Ltd v Lindley, note 218 above, at [8]–[9]; Horkulak v Cantor Fitzgerald International, note 218 above, at [51]–[72] and Earney v Australian Property Investment Strategic Pty Ltd [2010] VSC 621 at [109]–[110]. 236. O’Laoire v Jackel International Ltd (No 2), note 184 above, at 730; see also Guthrie v News Ltd, note 64 above, at [169]–[170]. 237. New South Wales Cancer Council v Sarfaty, note 109 above, at 80–1 (concerning a contract that expressly stated that the employee had no right to any further appointment: held that the least burdensome performance rule excluded the claim); Murray Irrigation Ltd v Balsdon (2006) 67 NSWLR 73; 159 IR 52; [2006] NSWCA 253 at [41]–[49]; Clunne v Nambucca Shire Council (1995) 63 IR 304 at 315 and McDonald v Parnell Laboratories Ltd, note 205 above, at [76]–[82]. 238. Sellars v Adelaide Petroleum NL, note 220 above, CLR at 349; ALR at 25–6 where the majority held that the principles were applicable for breach of contracts that provide a commercial opportunity or advantage; see also WT Partnership (Aust) Pty Ltd v Sheldrick, note 222 above, at [36]–[39] where a Full Court of the Federal Court applied Sellars in the manner discussed in 14.53 and Guthrie v News Ltd, note 64 above, at [53]–[56]. 239. See 14.21.

240. Tasmania Development and Resources v Martin, note 221 above, at [37]–[38] per Kiefel J, Lee and Cooper JJ agreeing; Macdonald v Australian Wool Innovation Ltd, note 226 above, at [250] (damages for non-renewal of a fixed term contract were awarded); Guthrie v News Ltd, note 64 above, at [48]–[66] and [169]–[179] (damages awardable but not proved) and Van Efferen v CMA Corp Ltd (2009) 183 IR 319; [2009] FCA 59 at [73]–[78] (such damages discussed, but not claimed). 241. McDonald v Parnell Laboratories Ltd, note 205 above, at [79]–[82]: see 14.49. 242. Guthrie v News Ltd, note 64 above, at [169]–[170]. 243. Bostik (Australia) Pty Ltd v Gorgevski (No 1), note 204 above, at 32–3; Murray Irrigation Ltd v Balsdon, note 237 above, at [41]–[49]; Gregory v Philip Morris Ltd (1989) 80 ALR 455 at 483– 4; Wheeler v Philip Morris Ltd, note 108 above, at 311–13 and Gooley v Westpac Banking Corporation (1995) 129 ALR 628 at 658; see A Brooks, ‘Damages for Harsh, Unjust or Unreasonable Dismissal: The Implications of Gorgevski v Bostik (Australia) Pty Ltd’ (1995) 8 AJLL 41 at 47–9. 244. A Stewart, ‘Damages for Wrongful Dismissal and the Problem of Contingencies’ (1993) 6 AJLL 50 at 53. 245. Lucy v The Commonwealth, note 137 above, at 238, 239 and 250; see also Jarrett v Commissioner of Police (NSW), note 136 above, at [57]–[60] and Williamson v The Commonwealth, note 138 above, at 186. 246. Ryan v The Commonwealth, note 187 above. 247. See 14.53; a breach of a term requiring that procedural fairness be provided often gives rise to a cause of action separate from a wrongful dismissal claim: Edwards v Chesterfield Royal Hospital NHS Foundation Trust [2011] QB 339; [2010] ICR 1181; [2010] EWCA Civ 571 at [37], [38], [42] and [50]. 248. Martin v Tasmania Development and Resources, note 109 above, at [92] (aff’d on other grounds (2000) 97 IR 66; [2000] FCA 414); see also Van Efferen v CMA Corp Ltd, note 240 above, at [63]–[72]; Clunne v Nambucca Shire Council, note 237 above, at 311–3 and Bostik (Australia) Pty Ltd v Gorgevski (No 1), note 204 above, at 35. 249. See 14.53–14.54. Williamson v The Commonwealth, note 138 above, at 186 and Barber v Manchester Regional Hospital Board [1958] 1 All ER 322 at 331–2. 250. Gunton v Richmond-upon-Thames London Borough Council, note 135 above, Ch at 469–70 and 474; All ER at 490 and 493–4; see also Boyo v Lambeth London Borough Council [1994] ICR 727 at 745, 748 and 749 (where there was some reluctance to limit damages to the Gunton extension period); Dietman v Brent London Borough Council [1987] ICR 737 at 756 (where the approach to damages based on Gunton was agreed); Janciuk v Winerite Ltd [1998] IRLR 63 at [8] (where the Employment Appeal Tribunal rejected the proposition that damages should be assessed on the loss of a chance) and Lakshmi v Mid Cheshire Hospitals NHS Trust [2008] IRLR 956 (employer breached term by failing to adjourn disciplinary hearing for four weeks was required to pay four weeks’ remuneration in damages); cf Barber v Manchester Regional Hospital Board, note 249 above (court awarded five years’ remuneration to an employee who lost his valuable chance to challenge his dismissal in a disciplinary hearing) and, possibly, Tucker v Pipeline Authority, note 190 above, at 125–6. 251. S Deakin and G Morris, Labour Law, 5th ed, Hart Publishing, London, 2009, pp 382–3; M Ford, ‘Rethinking the Notice Rule’ (1998) 27 ILJ 220; J McMullen, ‘Summary Dismissal — Legality and Remedies’ (1988) 17 ILJ 182 at 186–7 and A Stewart, ‘New Directions in the Law of

Employment Termination’ (1989) 1 Bond LR 233 at 251–2; see also the approach in Pine River State Bank v Mettille 333 NW2d 622 (1983) at 632. Query whether, in the case of a wrongful removal from a public sector position, this approach is consistent with Australian authorities: Geddes v McGrath, note 170 above, at 530–1 and 533–4 and Jarrett v Commissioner of Police (NSW), note 136 above, at [60]. 252. The relevant statutory framework is discussed in Edwards v Chesterfield Royal Hospital NHS Foundation Trust, note 247 above, at [19]–[23] and [27]–[37] and Johnson v Unisys Ltd [2003] 1 AC 518; [2001] 2 All ER 801 at [60]–[65] (Johnson). 253. Edwards v Chesterfield Royal Hospital NHS Foundation Trust, note 247 above, at [38]–[40], [90]; Johnson, note 252 above, at [66]. 254. O’Neill v Medical Benefits Fund of Australia, note 71 above, at [29] per Carr, Moore and Marshall JJ, an approach consistent with that discussed at 14.32–14.34. 255. Magro v Fremantle Football Club Limited (2005) 142 IR 445; [2005] WASC 163 (rev’d on other grounds (2007) 34 WAR 256; [2007] WASCA 124); Moss v Lowe Hunt and Partners Pty Ltd, note 123 above, at [111] and [123]–[125]. 256. Patterson v Middle Harbour Yacht Club, note 9 above, at 406; Van Efferen v CMA Corp Ltd, note 240 above, at [64]; Martin v Tasmania Development and Resources, note 109 above, at [91]; Northern Land Council v Hansen [2000] NTCA 1 at [57]–[59]; Macdonald v Australian Wool Innovation Ltd, note 226 above, at [214]–[243]; Reynolds v Southcorp Wines Pty Ltd, note 180 above, at [37]–[39] and Carr v Blade Repairs Australia Pty Ltd (No 2) (2010) 197 IR 307; [2010] FCA 688 at [64]–[68]. 257. Patterson v Middle Harbour Yacht Club, note 9 above, at 406; see 14.44–14.47. 258. Patterson v Middle Harbour Yacht Club, note 9 above, at 407–8 and Bold v Brough, Nicholson and Hall Ltd [1963] 3 All ER 852–3. 259. Van Efferen v CMA Corp Ltd, note 240 above, at [63]–[72]; Carr v Blade Repairs Australia Pty Ltd (No 2), note 256 above, at [65]; Reynolds v Southcorp Wines Pty Ltd, note 180 above, at [37]–[38]; Lennon v State of South Australia [2010] SASC 272 at [696]–[700] and Bold v Brough, Nicholson and Hall Ltd, note 200 above, at 852. This is an issue that also arises when courts are assessing the likely duration of a contract that has been terminated in breach of a job security protection; see the cases referred to in 14.61–14.62. 260. Chesapeake & Ohio Railway Co v Kelly (1916) 241 US 485 at 489, referred to in Todorovic v Waller (1981) 150 CLR 402 at 413–4; 37 ALR 481 at 487. 261. Todorovic v Waller, note 260 above, CLR at 424; ALR at 495–6; Arthurson v State of Victoria, note 79 above, at [413]; Campbell v University of New South Wales (1992) 44 IR 56 and Geddes v McGrath, note 170 above, at 529, 531 and 533–4. 262. Young v Queensland Trustees Ltd (1956) 99 CLR 560 at 567 and 569–70. 263. Abrahams v Performing Right Society Ltd [1995] ICR 1028 at 1039–41; see 14.103. 264. Silver v Dome Resources NL (2007) 62 ACSR 539; [2007] NSWSC 455 at [117]–[120] (aff’d (2008) 72 NSWLR 693; [2008] NSWCA 322 at [54]); see 15.44. 265. Cf a breach of the right to earn a bonus or have a discretion to determine the quantum of a bonus exercised reasonably: Merrill Lynch International (Australia) Ltd v Commissioner of Taxation (2001) 113 FCR 79 at [95]–[97]. 266. See 14.103 and s 119(1) of the Fair Work Act concerning redundancy pay.

267. Stoelwinder v Southern Health [2001] FCA 115 at [34] (express term that entitled to be paid accrued sick leave amounting to $567,642); Macauslane v Fisher and Paykel Finance Pty Ltd, note 200 above, at [31]–[32] (no implied term that annual leave loading would be provided); Morley v Heritage Plc [1993] IRLR 400 (no implied term concerning accrued annual leave) and Griggs v Noris Group of Companies (2006) 94 SASR 126; 148 IR 427; [2006] SASC 23 at [20]– [22] (no inferred or implied right to be paid out accrued RDOs on termination). 268. See, for example, Fair Work Act s 90(2). 269. Baltic Shipping Company v Dillon (1993) 176 CLR 344 at 360; 111 ALR 289 at 300 (‘the feeling of anxiety is damage’). 270. Baltic Shipping Company v Dillon, note 269 above, CLR at 364; ALR at 303–4. 271. Addis v Gramophone Co Ltd [1909] AC 488 (Addis); Malik v Bank of Credit and Commerce International SA, note 57 above; Johnson, note 252 above; Eastwood v Magnox Electric plc [2005] 1 AC 503; [2004] 3 All ER 991 (Eastwood) and Edwards v Chesterfield Royal Hospital NHS Foundation Trust, note 247 above. The decision in Shaw v State of New South Wales [2012] NSWCA 102 (Shaw) was handed down just prior to the publication of this text and is briefly noted below. 272. Addis, note 271 above. 273. Addis, note 271 above, at 504. 274. Addis, note 271 above, at 492 per Lord James and at 496 per Lord Atkinson; see further at 14.83–14.85. It is suggested that the use of the terms ‘exemplary’ and ‘vindictive’ damages by Lord Atkinson at 493, 494 and 496 reflects the then common practice of not distinguishing between aggravated and exemplary damages: see the Report of the Law Commission for England and Wales, Aggravated, Exemplary and Restitutionary Damages, Report No 247, 1997, at [2.2]. 275. Addis, note 271 above, at 491 per Lord Loreburn LC, at 492 per Lord James, at 496 per Lord Atkinson, at 501 per Lord Gorell and at 503–04 per Lord Shaw; see further at 14.86–14.90. 276. Addis, note 271 above, at 491 per Lord Loreburn LC. See also at 493 per Lord Atkinson and at 501–02 per Lord Gorell; see further at 14.77–14.82. 277. Addis, note 271 above, at 491 per Lord Loreburn LC; see further at 14.86–14.90. 278. The acceptance of the second point is implicit in the judgment of Lord Atkinson who in Addis, note 271 above, at 493 observed that the damages awarded by the jury were granted for ‘the harsh and humiliating way in which [Mr Addis] was dismissed, including, presumably, the pain he experienced by reason, it is alleged, of the imputation upon him conveyed by the manner of his dismissal’. He would not have permitted such damages. Lord Gorell at 501–02 noted that damages were not recoverable for any injury to the character of Mr Addis arising from the manner of the dismissal. 279. See Johnson, note 252 above, at [15]–[17] on the extent of the concurrence of those Lords with the judgment of Lord Loreburn. 280. Johnson, note 252 above, at [15]–[17] per Lord Steyn, at [44] per Lord Hoffmann and at [69] per Lord Millett; Burazin v Blacktown City Guardian Pty Ltd, note 128 above, at 148; Malik, note 282 above, at 50–1; [1997] 3 All ER 1 at 19–20; Shaw v State of New South Wales, note 271 above, at [63], and P Gray, ‘Damages for Wrongful Dismissal’ in R McCallum et al (eds), Employment Security, Federation Press, Sydney, 1994, pp 41–5. 281. Johnson, note 252 above, at [69] and Baltic Shipping Company v Dillon, note 269 above, CLR at 361 and 380; ALR at 302 and 316–7: see, however, Shaw v State of New South Wales, note 271

above, at [67]–[107]. 282. Malik v Bank of Credit and Commerce International SA [1998] AC 20; [1997] 3 All ER 1 (Malik). 283. Stigma damages are awarded if an employer has committed a breach of the contract that handicaps or stigmatises an employee in the labour market and that handicap or stigmatism has caused the employee to lose employment opportunities. Stigma damages were awarded at first instance in Paige but were not the subject of the appeal: State of New South Wales v Paige, note 173 above, at [327] and [333]. Lord Steyn draws a distinction between stigma damages and damages to reputation: see 14.87 below. 284. Malik, note 282 above, at 52 per Lord Steyn, with whom Lords Goff, Mackay and Mustill agreed and Eastwood, note 271 above, at [7]. 285. Malik, note 282 above, at 51 and 52. 286. Johnson, note 252 above. 287. Mr Johnson also sought damages for his diminished opportunities for future employment arising from the breach, though this aspect of the claim was not the subject of detailed consideration and appears to be ancillary to the claim for psychiatric injury: Johnson, note 252 above, at [32]–[33]. 288. Johnson, note 252 above, at [2], [47]–[57] and [72]–[80]. See also Edwards v Chesterfield Royal Hospital NHS Foundation Trust, note 247 above, at [19]–[23]. 289. Edwards v Chesterfield Royal Hospital NHS Foundation Trust, note 247 above, at [51] and [60] per Lord Dyson, and at [94] and [99]; Johnson, note 252 above, at [2], [45], [58] and [77]–[80]. 290. Eastwood, note 271 above, at [27]–[33] and Edwards v Chesterfield Royal Hospital NHS Foundation Trust, note 247 above, at [50]–[51] and [55]–[59], [94]. 291. Eastwood, note 271 above, concerned Mr Eastwood and a fellow employee Mr Williams. McCabe v Cornwall County Council dealt with Mr McCabe. 292. It appears that the majority in Eastwood proceed on the incorrect assumption that a right of action for breach of the implied term of trust and confidence is ‘acquired’ when loss is suffered by the employee. The action is perfected when the employer breaches the contract. Damages are not the gist of an action for breach of contract: Cell Tech Communication Pty Limited v Nokia Mobile Phones (UK) Limited, note 28 above, FCR at 375; 136 ALR at 750; and 14.15. In contrast, damages are necessary for a cause of action for negligence to be perfected. 293. Eastwood, note 271 above, at [27] and [28]. 294. Eastwood, note 271 above, at [28]–[29]. 295. Edwards v Chesterfield Royal Hospital NHS Foundation Trust, note 247 above, concerned Mr Edwards and Botham v Minstry of Defence dealt with Mr Botham. 296. Edwards v Chesterfield Royal Hospital NHS Foundation Trust, note 247 above, at [38], [90], [93]–[94]. 297. The relevant statutory framework is discussed in Edwards v Chesterfield Royal Hospital NHS Foundation Trust, note 247 above, at [19]–[23] and [27]–[37] and Johnson, note 252 above, at [60]–[65]. 298. Edwards v Chesterfield Royal Hospital NHS Foundation Trust, note 247 above, at [38]–[39], [90], [93]–[94]; Johnson, note 252 above, at [66]. 299. Edwards v Chesterfield Royal Hospital NHS Foundation Trust, note 247 above, at [50]–[60],

[94] and [99]. 300. Addis, note 271 above, at 491, 492, 496, 501 and 503–04; Johnson, note 252 above, at [44] and [69]; Edwards v Chesterfield Royal Hospital NHS Foundation Trust, note 247 above, at [1]. See 14.83–14.84. 301. Johnson, note 252 above, at [2], [45]–[58] and [77]–[80]; Edwards v Chesterfield Royal Hospital NHS Foundation Trust, note 247 above, at [1]. 302. Edwards v Chesterfield Royal Hospital NHS Foundation Trust, note 247 at [38]–[40], [55]–[58], [94] and [99]. 303. Addis, note 271 above, at 491; see also at 493 and 501–02; Johnson, note 252 above, at [44] and [69]: see 14.77. 304. This would appear to follow from the role afforded to damage arising from the breach of an express term falling within the Johnson exclusion area as discussed in Edwards v Chesterfield Royal Hospital NHS Foundation Trust, note 247 above. 305. Johnson, note 252 above, at [2], [45]–[58] and [77]–[80]. 306. Eastwood, note 271 above, at [27]–[29]. 307. Addis, note 271 above, at 491 per Lord Loreburn LC; see also Johnson, note 252 above, at [44], [69]–[70]. 308. Shaw v State of New South Wales, note 271 above, at [113]–[114], Johnson, note 252 above, at [44], [70] and [77]–[80]: see 14.86–14.90. 309. Eastwood, note 271 above, at [30]–[33]; see also Lord Steyn in Eastwood, note 271 above, at [38]–[43]. 310. Eastwood, note 271 above, at [31] and [39], Edwards v Chesterfield Royal Hospital NHS Foundation Trust, note 247 above, at [50]–[58] and King v University Court of the University of St Andrews [2002] IRLR 252 at [21]–[22] noted in D Brodie, ‘Fair Dealing and the Disciplinary Process’ (2002) 31 ILJ 294. 311. Eastwood, note 271 above, at [32], [40]; Edwards v Chesterfield Royal Hospital NHS Foundation Trust, note 247 above, at [52] and [60] and Gogay v Hertfordshire County Council [2000] IRLR 703 at [69]. 312. S Deakin and G Morris, Labour Law, note 251 above, pp 386–8; M Freedland, The Personal Employment Contract, Oxford University Press, Oxford, 2003, pp 162–7, 303–5, 342–5, 362–4; R Hepple and G Morris, ‘The Employment Act 2002 and the Crisis of Individual Employment Rights’ (2002) 31 ILJ 245 at 253; D Brodie, ‘Legal Coherence and the Employment Revolution’ (2001) 117 LQR 604 at 624–5; D Brodie, ‘Fair Dealing and the Disciplinary Process’ (2002) 31 ILJ 294 and M Irving, ‘Damages Arising from the Manner of an Employee’s Dismissal’ (2003) 16 AJLL 99. 313. Eastwood, note 271 above, at [30] and GAB Robins (UK) Ltd v Triggs [2008] ICR 529 at [32]– [37]. 314. Baltic Shipping Company v Dillon, note 269 above, CLR at 361 and 380; ALR at 302 and 316–7; Addis, note 271 above, at 491; see also at 493, 501–02, 504; Johnson, note 252 above, at [44] and [69]; Burazin v Blacktown City Guardian Pty Ltd, note 128 above, at 151; Aldersea v Public Transport Corporation, note 129 above, at [61]–[66]; Lennon v State of South Australia, note 259 above, at [676]–[688]; Shaw v State of New South Wales, note 271 above, at [95]–[97]; Shove v Downs Surgical plc, note 190 above, at 10 (principle applied to damages caused by an accepted repudiation); Bliss v South East Thames Regional Health Authority [1987] ICR 700 at

717–8; Russell v Trustees of the Roman Catholic Church, Archdiocese of Sydney (2008) 72 NSWLR 559; 176 IR 82; [2008] NSWCA 217 at [54], [58]–[66] and Gogay v Hertfordshire County Council, note 311 above, at [60]. 315. Burazin v Blacktown City Guardian Pty Ltd, note 128 above, at 148–51; O’Laoire v Jackel International Ltd (No 2), note 184 above, at 731; McDonald v Parnell Laboratories Ltd, note 205 above, at [92]; Addis, note 271 above, at 491; see also at 493, 501–02, 504 and Johnson, note 252 above, at [44] and [69]. 316. Burazin v Blacktown City Guardian Pty Ltd, note 128 above, at 152–4; McDonald v Parnell Laboratories Ltd, note 205 above, at [92]; Gillies v Downer EDI Ltd [2011] NSWSC 1055 at [201]; Russell v Trustees of the Roman Catholic Church, Archdiocese of Sydney (2007) 69 NSWLR 198; 167 IR 121; [2007] NSWSC 104 at [120]–[135] and [135]–[141] and on appeal at (2008) 72 NSWLR 559; 176 IR 82; [2008] NSWCA 217 at [58]–[66]; Rogan-Gardiner v Woolworths Ltd, note 196 above, at [116] and [125] and Bliss v South East Thames Regional Health Authority, note 314 above, at 718 (it appears the damages claimed arose from the wrongful suspension of an employee); the decision in Cox v Philips Industries Ltd [1976] ICR 138 at 146 that damages for mental distress are recoverable for a wrongful demotion is inconsistent with and expressly disapproved by Bliss. 317. Baltic Shipping Company v Dillon, note 269 above, CLR at 359–60, 362, 380–1 and 405; ALR at 300–1, 302, 317–18 and 336–7. It is also referred to as disappointment of mind in Hamlin v Great Northern Railway Company (1856) 1 H&N 408; 158 ER 126 at 1262; Aldersea v Public Transport Corporation, note 129 above, at [14]–[16], [41], [57]–[58] and Gogay v Hertfordshire County Council, note 311 above, at [62]–[64]. 318. Clunne v Nambucca Shire Council, note 237 above, at 316 and Tame v New South Wales (2002) 211 CLR 317; 191 ALR 449 at [7], [192]–[194], [285]–[296]. 319. Aldersea v Public Transport Corporation, note 129 above, at [14]–[16], [41] and Tame v New South Wales, note 318 above, at [7], [192]–[194], [285]–[296]; although it may be compensable in some torts not presently relevant; note, however, State of New South Wales v Paige, note 173 above, at [133]. 320. Russell v Trustees of the Roman Catholic Church, Archdiocese of Sydney, note 314 above, at [54] and Fink v Fink (1946) 74 CLR 127 at 144. 321. Holloway v Witham, note 129 above, at 86–7; Burazin v Blacktown City Guardian Pty Ltd, note 128 above, at 156 (the court, calling for restraint in the award of damages for mental distress, awarded $5000); Clunne v Nambucca Shire Council, note 237 above, at 316 ($6500 for psychiatric injury); Grout v Gunnedah Shire Council (No 2), note 191 above ($15,000); Brackenridge v Toyota Motor Corporation Australia Limited (1996) 67 IR 162 at 196 (the court would have awarded $25,000); Australian Licensed Aircraft Engineers Association v International Aviations Service Assistance Pty Ltd, note 116 above, at [450] ($7500); cf Campbelltown City Council v Mackay (1989) 15 NSWLR 501 at 505. 322. Aldersea v Public Transport Corporation, note 129 above, at [17]. 323. Baltic Shipping Company v Dillon, note 269 above, CLR at 362, 381 and 405; ALR at 302, 317– 8 and 336–7; Goldman Sachs JB Were Services Pty Ltd v Nikolich, note 44 above, at [72] and Rogan-Gardiner v Woolworths Ltd [No 2], note 196 above, at [192]. 324. Baltic Shipping Company v Dillon, note 269 above, CLR at 362 and 405; ALR at 300–1, 302 and 336–7 and Grout v Gunnedah Shire Council (No 2), note 191 above, at 76 (rev’d on other grounds at (1995) 62 IR 150).

325. See 8.56. 326. See 14.77. 327. Clunne v Nambucca Shire Council, note 237 above, and Grout v Gunnedah Shire Council (No 2), note 191 above (rev’d on other grounds at (1995) 62 IR 150). See also Brackenridge v Toyota Motor Corporation Australia Limited, note 321 above, at 196 and Attorney-General v Gilbert [2002] 2 NZLR 342 at 358–61. 328. Aldersea v Public Transport Corporation, note 129 above, at [95]–[117] and State of New South Wales v Paige, note 173 above, at [132]–[139] and [155]; such damage would, under the law in the United Kingdom, fall within the Johnson exclusion area discussed above in 14.73–14.75. 329. Gogay v Hertfordshire County Council, note 311 above, at [60]–[69]. 330. Nikolich v Goldman Sachs J B Were Services Pty Ltd [2006] FCA 784 at [317] (aff’d (2007) 163 FCR 62; [2007] FCAFC 120 at [72]–[75]); Hameed v Central Manchester University Hospitals NHS Foundation Trust [2010] EWHC 2009 at [77]–[80]; in the United Kingdom the loss must be outside of the Johnson exclusion area for breaches of an express disciplinary procedure: see Johnson, note 252 above, at [70], Edwards v Chesterfield Royal Hospital NHS Foundation Trust, note 247 above, at [51]–[60], [94] and [99]. 331. See Safety, Rehabilitation and Compensation Act 1988 (Cth) s 5A(2); Workers Compensation Act 1951 (ACT) s 4(2); Workers Compensation Act 1987 (NSW) s 11A; Workers Rehabilitation and Compensation Act 1986 (NT) s 3; Workers’ Compensation and Rehabilitation Act 2003 (Qld) s 32; Workers Rehabilitation and Compensation Act 1986 (SA) s 30A; Workers Rehabilitation and Compensation Act 1988 (Tas) s 25; Accident Compensation Act 1985 (Vic) s 82; Workers’ Compensation and Injury Management Act 1981 (WA) s 5(4); note, however, South Australia v McDonald (2009) 104 SASR 344; 185 IR 45; [2009] SASC 219 at [180]– [204]. 332. Attorney-General v Gilbert, note 327 above, at 362. 333. Baltic Shipping Company v Dillon, note 269 above, CLR at 362 and 405; ALR at 302 and 336–7; Clunne v Nambucca Shire Council, note 237 above, at 315 and Grout v Gunnedah Shire Council (No 2), note 191 above, at 77 (rev’d on other grounds at (1995) 62 IR 150). 334. Baltic Shipping Company v Dillon, note 269 above, CLR at 362–3, 381, 397–8 and 405; ALR at 302–3, 317, 330–1 and 336–7; Hobbs v London and South Western Railway Co (1875) LR 10 QB 111 and Farley v Skinner [2002] 2 AC 732; [2001] 4 All ER 801 at [34]–[38], [57]–[61], [81]–[91]; see also Thorpe v Lochel [2005] WASCA 85 at [153] on the meaning of physical inconvenience in this sense. 335. Baltic Shipping Company v Dillon, note 269 above, CLR at 363; ALR at 303 and Burton v Pinkerton (1867) LR 2 Ex 340. 336. Burton v Pinkerton, note 335 above, at 349 per Baron Bramwell (the employee did not recover damages for his imprisonment in Rio as an alleged deserter as this was too remote); Austin Friars Steam Shipping Company v Strack [1905] 2 KB 315 at 317 and 322 (damages awarded to compensate for the bad food and accommodation available to the employee on the TransSiberian Railway) and O’Neil v Armstrong, Mitchell & Co [1895] 2 QB 70. 337. Sheldrick v WT Partnership (Aust) Pty Ltd (1998) 89 IR 202 at 240; [1998] FCA 1794 (aff’d on other grounds (1999) 96 IR 202; [1999] FCA 843). 338. Baltic Shipping Company v Dillon, note 269 above, CLR at 363, 365, 370–1, 381–2 and 405; ALR at 303, 305, 309 and 336–7; Quinn v Gray (2009) 184 IR 279; [2009] VSC 136 at [26] and Farley v Skinner, note 334 above, at [24].

339. Baltic Shipping Company v Dillon, note 269 above, CLR at 370; ALR at 308 per Brennan J. The words promisor and promisee have been replaced by the words employer and employee in this quote. 340. Johnson, note 252 above, at [70] per Lord Millett. 341. Burazin v Blacktown City Guardian Pty Ltd, note 128 above, at 149–51. 342. Quinn v Gray, note 338 above, at [26]; Farley v Skinner, note 334 above, at [24]; see also Baltic Shipping Company v Dillon, note 269 above, CLR at 371; ALR at 309 where Brennan J refers to ‘an object of a contract’ (emphasis in original) and at 405 (ALR at 327) per McHugh J where reference is made to an ‘express or implied term’ for freedom from distress. 343. Farley v Skinner, note 334 above, at [54] and J Hartshorne, ‘Damages for Contractual Mental Distress after Farley v Skinner’ (2006) 22 JCL 118 at 124–6. 344. Burazin v Blacktown City Guardian Pty Ltd, note 128 above, at 149–51. 345. See the dicta of Wilcox J in Nikolich v Goldman Sachs J B Were Services Pty Ltd, note 330 above, at [317] (aff’d on other grounds (2007) 163 FCR 62; [2007] FCAFC 120 at [72]). 346. Quinn v Gray, note 338 above, at [26]–[30]. 347. Addis, note 271 above, at 491, 492, 495–6, 501 and 503–04; Johnson, note 252 above, at [69]; Edwards v Chesterfield Royal Hospital NHS Foundation Trust, note 247 above, at [1], [24]; Baltic Shipping Company v Dillon, note 269 above, CLR at 361 and 395; ALR at 302 and 328–9; Malik, note 282 above, at 51; Aldersea v Public Transport Corporation, note 129 above, at [61]– [66], [95]; Butler v Fairclough, note 37 above, at 89 (damages are not affected by an intentional or malicious breach, as opposed to innocent breach) and McDonald v State of South Australia (2008) 172 IR 256; [2008] SASC 134 at [480] (rev’d on other grounds (2009) 104 SASR 344; 185 IR 45; [2009] SASC 219). 348. Johnson, note 252 above, at [69] per Lord Millett. 349. Aldersea v Public Transport Corporation, note 129 above, at [68]–[70], [94] and State of New South Wales v Paige, note 173 above, at [132]–[139] and [155] (damages arising from the manner of dismissal are not recoverable in tort or contract). 350. Uren v John Fairfax and Sons Pty Ltd, note 31 above, at 149. 351. Hunter Area Health Service v Marchlewski (2000) 51 NSWLR 268; [2000] NSWCA 294 at [96] per Mason P; Lamb v Cotogno, note 32 above, CLR at 8; ALR at 191–2 and Uren v John Fairfax and Sons Pty Ltd, note 31 above, at 149. 352. Rookes v Barnard, note 35 above, AC at 1226–30; All ER at 410–2. 353. Lamb v Cotogno, note 32 above, CLR at 8; ALR at 191–2, quoting Wilkes v Wood (1763) Lofft 1 at p 19; 98 ER 489 at 498–9 per Pratt LCJ; see also Vorvis v Insurance Corporation of British Columbia [1989] 1 SCR 1085. 354. See 14.83. 355. See the Report of the Law Commission for England and Wales, Aggravated, Exemplary and Restitutionary Damages, Report No 247, 1997, at [2.10]. 356. McIntyre v Tully, note 131 above, at [25]–[27]; Elliott v Nanda, note 131 above, at [179]–[185]; Hall v A & A Sheiban Pty Ltd, note 40 above, FCR at 239 and 282; ALR at 522–3 and 570 and Lyon v Godley (1990) EOC 92-287. In the United Kingdom, see Prison Service v Johnson [1997] ICR 275 at 287; Vento v Chief Constable of West Yorkshire [2003] ICR 318; Virgo Fidelis Senior School v Boyle [2004] ICR 1210 and Ministry of Defence v Fletcher [2010] IRLR 25.

357. Prison Service v Johnson, note 356 above, at 278. 358. Prison Service v Johnson, note 356 above, at 287. 359. Addis, note 271 above, at 491; O’Laoire v Jackel International Ltd (No 2), note 184 above, at 731; Russell v Trustees of the Roman Catholic Church, Archdiocese of Sydney, note 314 above, at [55]; Thorpe v South Australian National Football League (1974) 10 SASR 17 at 38; McDonald v State of South Australia, note 347 above, at [541] (rev’d on other grounds (2009) 104 SASR 344; 185 IR 45; [2009] SASC 219); see also Johnson, note 252 above, at [44] and [69]–[70] and Lennon v State of South Australia, note 259 above, at [676]–[688]. See 11.62 concerning the role of these matters in the assessment of reasonable notice. 360. Rankin v Marine Power International Pty Ltd, note 54 above, at [247]–[250]; Williams v Printers Trade Services (1984) 7 IR 82 at 85 per Toohey J (summary dismissal ‘carries with it a certain obloquy’); Johnson, note 252 above, at [77] and Paras v Public Service Body Head of Department of Infrastructure (2006) 152 IR 75; [2006] FCA 622 at [29] per Young J (‘The summary dismissal without notice of an employee solicitor is a very grave matter. Necessarily, it will have a detrimental effect on her reputation, and may impose a stigma that adversely affects her future career prospects’); Quinn v Overland (2010) 199 IR 40; [2010] FCA 799 at [108]; Jones v Queensland Tertiary Admissions Centre Ltd (2009) 190 IR 218; [2009] FCA 1382 at [49]; Jarrett v Commissioner of Police (NSW), note 136 above, at [8] and Gooley v Westpac Banking Corporation, note 243 above, at 645. 361. Rankin v Marine Power International Pty Ltd, note 54 above, at [247]; Johnson, note 252 above, at [77]; Paras v Public Service Body Head of Department of Infrastructure, note 360 above, at [29]; Quinn v Overland, note 360 above, at [108] and Jones v Queensland Tertiary Admissions Centre Ltd, note 360 above, at [49]. 362. H McGregor, note 2 above, pp 12–13; see also Lord Steyn in Malik, note 282 above, at 50–3. 363. The Lords used various phrases consistent with this approach in characterising the claim in Addis, note 271 above: see at 490 and 491 per Lord Loreburn (‘the loss he sustained from the discredit thus thrown upon him’; the rejected analogy with the loss recoverable for damage to reputation arising from the refusal of a banker to honour cheques), at 493 per Lord Atkinson (‘in effect damages for defamation’), and at 501 per Lord Gorrell (‘endeavored to claim damages for defamation’); see also Lord Shaw at 503. 364. See WT Partnership (Aust) Pty Ltd v Sheldrick, note 222 above, at [38] and Quinn v Gray, note 338 above, at [11]. See also Shaw v State of New South Wales, note 271 above, at [113]–[114]. 365. Malik, note 282 above, was such a case: see 14.72; Johnson, note 252 above, at [44], [70], [77]– [80]. 366. Johnson, note 252 above, at [44], [70], [77]–[80] and Edwards v Chesterfield Royal Hospital NHS Foundation Trust, note 247 above, at [37], [38], [42] and [50]. 367. See Malik, note 282 above, at 49–50; Bank of Credit and Commerce International SA v Ali (No 2), note 57 above, at [270], affirmed on appeal in Husain v Bank of Credit and Commerce International SA [2002] EWCA Civ 82 and Thomson v Broadley [2002] QSC 255 at [38]; Shaw v State of New South Wales, note 271 above, at [118], see further 14.17–14.22. 368. Shaw v State of New South Wales, note 271 above. 369. Shaw v State of New South Wales, note 271 above, at [118]–[119], per Barrett JA, Beazley, McColl, Macfarlan JJA and McClellan CJ in CL agreeing. 370. Edwards v Chesterfield Royal Hospital NHS Foundation Trust, note 247 above, at [38]–[40], [75]–[78] and [86]–[87], [90]; Johnson, note 252 above, at [66].

371. The relevant statutory framework is discussed in Edwards v Chesterfield Royal Hospital NHS Foundation Trust, note 247 above, at [19]–[23] and [27]–[37] and Johnson, note 252 above, at [60]–[65]. 372. Shaw v State of New South Wales, note 271 above, discussed in 14.88. 373. On causation, see 14.17 and on remoteness see 14.21; see also F Reynolds, ‘Non-compliance with a Prescribed Disciplinary Procedure: Do Ordinary Contractual Principles Apply?’ (2010) 39 ILJ 420. 374. See 11.78. 375. See the fourth category of payment in lieu discussed in 14.105. 376. Fryar v System Services Pty Ltd (1996) 137 ALR 321 at 331 and Sinclair v Anthony Smith & Associates Pty Ltd [1995] IRCA 663. 377. Quinn v Gray, note 338 above, at [11]. See also WT Partnership (Aust) Pty Ltd v Sheldrick, note 222 above, at [38]. See also s 117 of the Fair Work Act which, coupled with ss 45, 539 and 545, provide that an employee may seek to recover compensation for loss that a person has suffered because of a contravention of the employer’s obligation to give at least the minimum notice specified in s 117(3). That may include losses of the nature awarded in Quinn v Gray and Sheldrick. 378. Herbert Clayton and Jack Waller Ltd v Oliver [1930] AC 209 at 220; see also Viscount Dunedin at 221. 379. See, for example, Herbert Clayton and Jack Waller Ltd v Oliver, note 378 above, where the employer breached a promise to provide a leading role to an actor who was engaged for six weeks at £55 per week — the employee recovered £1000 for breach of the term and in Marbe v George Edwardes (Daly’s Theatre) Ltd [1927] 1 KB 269 the employer breached a promise to provide a certain role to an actress who was engaged for £100 per week — the employee recovered £3000 pounds for breach of the term, plus the salary payable during the run of the play. 380. Herbert Clayton and Jack Waller Ltd v Oliver, note 378 above, at 220 and 221; Withers v General Theatre Corporation Ltd, note 210 above, at 545, 547 and 556 and Commonwealth v Amann Aviation Pty Ltd, note 21 above, CLR at 102 and 170–1; ALR at 25–6 and 77. 381. Marbe v George Edwardes (Daly’s Theatre) Ltd, note 379 above, at 281 and 288. 382. Malik, note 282 above, at 30–1 per Lord Nichols and 58–9 per Lord Steyn. See also Cranston v Canadian Broadcasting Corporation (1994) 2 CCEL (2d) 301 where the employee recovered damages for the ‘essential value of publicity for its own sake’ and Multivision Films Inc v McConnell Advertising Co (1983) 69 CPR (2d) 1 at 43–4. 383. Baltic Shipping Company v Dillon, note 269 above, CLR at 362 and 380–1; ALR at 302 and 316–7; see Johnson, note 252 above, at [77] and Edwards v Chesterfield Royal Hospital NHS Foundation Trust, note 247 above, at [80]. 384. Burazin v Blacktown City Guardian Pty Ltd, note 128 above, at 148–9 and 154 per Wilcox CJ, von Doussa and Marshall JJ; Johnson, note 252 above, at [37], [70] and [77]; Shove v Downs Surgical plc, note 190 above, at 8 and 10; McDonald v Parnell Laboratories Ltd, note 205 above, at [92]; Re Public Service Employee Relations Act [1987] 1 SCR 313 at 368 and Wallace v United Grain Growers Ltd [1997] 152 DLR (4th) 1 at 32–3. 385. Burazin v Blacktown City Guardian Pty Ltd, note 128 above, at 148–9 and 154. 386. Baltic Shipping Company v Dillon, note 269 above, CLR at 380–1; ALR at 316–7 and Johnson,

note 252 above, at [70]. 387. Baltic Shipping Company v Dillon, note 269 above, CLR at 362; ALR at 302 per Mason CJ; ‘the rule is based upon pragmatism rather than logic’ per Deane and Dawson JJ at 391 (CLR); 317 (ALR). 388. Baltic Shipping Company v Dillon, note 269 above, CLR at 361–2 and 380–1; ALR at 302 and 316–7; Edwards v Chesterfield Royal Hospital NHS Foundation Trust, note 247 above, at [86]– [87] and J Hartshorne, ‘Damages for Contractual Mental Distress after Farley v Skinner’ (2006) 22 JCL 118 at 119–21 and 123. 389. Baltic Shipping Company v Dillon, note 269 above, CLR at 365; ALR at 305. Compare with the approach to breaches of equitable obligations that do give rise to damages for mental distress; Giller v Procopets (2008) 24 VR 1; [2009] VSCA 72 at [408]–[431]. 390. Baltic Shipping Company v Dillon, note 269 above, CLR at 369; ALR at 307–8. 391. See cases at 14.78 and Farley v Skinner, note 334 above. 392. Johnson, note 252 above, at [2], [47]–[57] and [72]–[80]; see also Edwards v Chesterfield Royal Hospital NHS Foundation Trust, note 247 above, at [19]–[23]. 393. Johnson, note 252 above, at [2] and [55] and Eastwood, note 271 above, at [38] and [41]–[42]. Notwithstanding this justification the House of Lords after Johnson in a somewhat cruel twist determined that such damages were not recoverable in an unfair dismissal action: Dunnachie v Kingston-upon-Hull City Council, note 123 above. 394. Russell v Trustees of the Roman Catholic Church, Archdiocese of Sydney, note 314 above, at [58]–[65] and State of New South Wales v Paige, note 173 above, at [133]; note also RoganGardiner v Woolworths Ltd [No 2], note 196 above, at [121]–[125]; Aldersea v Public Transport Corporation, note 129 above, at [81]–[91] and M Irving, ‘Damages Arising from the Manner of an Employee’s Dismissal’ (2003) 16 AJLL 99. 395. GAB Robins (UK) Ltd v Triggs, note 313 above, at [32]. 396. Russell v Trustees of the Roman Catholic Church, Archdiocese of Sydney, note 314 above, at [61]. 397. See 15.35. 398. Silverbrook Research Pty Ltd v Lindley, note 218 above, at [12]–[15] and Hardy v Polk (Leeds) Ltd [2005] ICR 557 at 564. 399. Darbishire v Warran [1963] 1 WLR 1067 at 1075; 3 All ER 310 at 315 per Pearson LJ; Abrahams v Performing Right Society Ltd, note 263 above, at 1034 and Yetton v Eastwoods Froy Ltd [1967] 1 WLR 104 at 114; [1966] 3 All ER 353 at 361–2. 400. See K Handley, ‘Reduction of Damages Awards’ in P Finn (ed), Essays on Damages, Law Book Company, Sydney, 1992, pp 116–7; Whittaker v Unisys Australia Pty Ltd (2010) 26 VR 668; 192 IR 311; [2010] VSC 9 at [171]. 401. Tasman Capital Pty Ltd v Sinclair (2008) 75 NSWLR 1; [2008] NSWCA 248 at [55]–[72]; Bagnall v National Tobacco Corporation of Australia Ltd (1934) 34 SR (NSW) 421 at 430; Harding v Harding (1928) 29 SR (NSW) 96 at 106; Northern Land Council v Hansen, note 256 above, at [52]; Fyfe v Scientific Furnishings Ltd [1989] ICR 648 at 650–1; Bessenden Properties Ltd v Corness [1977] ICR 821 at 823; TCN Channel 9 Pty Ltd v Hayden Enterprises Pty Ltd, note 207 above, at 158 and Watts v Rake (1960) 108 CLR 158 at 159. There is an alternative view expressed in Goldburg v Shell Oil Company of Australia (1990) 95 ALR 711 at 714–8 which was doubted in Tasman Capital Pty Ltd v Sinclair.

402. Bagnall v National Tobacco Corporation of Australia Ltd, note 401 above, at 430 and Tasman Capital Pty Ltd v Sinclair, note 401 above, at [55]–[72]. 403. Northern Land Council v Hansen, note 256 above, at [52]–[56] and Sperandio v Lynch (No 2) [2006] FCA 183 at [2]–[7]. 404. See, for example, Harding v Harding, note 401 above, at 106 and Tasman Capital Pty Ltd v Sinclair, note 401 above, at [70]. 405. Prus-Grzybowski v Everingham (1976) 87 FLR 182 at 185 per Kearney J. 406. TCN Channel 9 Pty Ltd v Hayden Enterprises Pty Ltd, note 207 above, at 159 per Hope JA, Meagher JA concurring. 407. Shindler v Northern Raincoat Co Ltd, note 143 above, WLR at 1048; All ER at 249; Scott v Commonwealth of Australia (1982) 41 ALR 498 at 505; Whittaker v Unisys Australia Pty Ltd, note 400 above, at [166] and McAndrew v Prestwick Circuits Ltd [1988] IRLR 514 at [20] (aff’d (1990) SLT 654 at 658). 408. H McGregor, note 2 above, pp 224–6; Shindler v Northern Raincoat Co Ltd, note 143 above, WLR at 1048; All ER at 249; Whittaker v Unisys Australia Pty Ltd, note 400 above, at [166]; see 10.8. 409. Abrahams v Performing Right Society Ltd, note 263 above, at 1039–41. 410. Bechara v Gregory Harrison Healey & Co, note 125 above, at 389 and 390 (aff’d [1996] IRCA 262) and Black v Danka Datakey Pty Ltd, note 125 above, at 430–1. 411. Finucane v NSW Egg Corporation, note 125 above, at 519. In the United Kingdom, s 74(4) of the former Employment Protection (Consolidation) Act 1978 required the common law rules of mitigation to be applied in unfair dismissal proceedings; cf Australasian Meat Industry Employees’ Union v Sunland Enterprises Pty Ltd (1988) 81 ALR 213 at 222 decided under s 5 of the former Conciliation & Arbitration Act 1904 (Cth) and a series of cases decided under s 106 of the Industrial Relations Act 1996 (NSW) and its predecessors such as Harcourt Brace & Company (Australia) Pty Ltd v Cory (1997) 81 IR 327 at 337–8 and Westfield Holdings v Adams (2001) 114 IR 241 at [131]–[148]. 412. Black v Danka Datakey Pty Ltd, note 125 above, at 430–1 and Bostik (Australia) Pty Ltd v Gorgevski (No 1), note 204 above, at 38–9. 413. Delaney v Staples, note 136 above, AC at 692–3; All ER at 947–8; ICR at 488–9. 414. Delaney v Staples, note 136 above, AC at 692; All ER at 947; ICR at 488. 415. Scott v Commonwealth of Australia, note 407 above, at 505. 416. Delaney v Staples, note 136 above, AC at 692–3; All ER at 947–8; ICR at 488–9; Abrahams v Performing Right Society Ltd, note 263 above, at 1038–41 and Rex Stewart Jeffries Parker Ginsburg Ltd v Parker [1988] IRLR 483; cf Fardell v Coates Hire Operations Ltd (2010) 201 IR 64; [2010] NSWSC 346 at [95], [99], [100] and [108]. It appears that the payment in lieu of notice in s 117(2) of the Fair Work Act is of this nature. 417. Abrahams v Performing Right Society Ltd, note 263 above, at 1039–41. 418. Reilly v Praxa Ltd, note 188 above, at [32] and Earney v Australian Property Investment Strategic Pty Ltd, note 235 above, at [102]. 419. Cerberus Software Ltd v Rowley [2001] ICR 376 at 382 and 389–90 (the clause provided the employer with the option of making a payment in lieu of notice, but did not require the making of such a payment); Conway-Cook v Town of Kwinana, note 199 above, at [29]–[37] and Rex

Stewart Jeffries Parker Ginsburg Ltd v Parker, note 416 above, at 484–5. 420. See, for example, Gothard v Mirror Group Newspapers Ltd [1988] ICR 729 at 734. 421. Bagnall v National Tobacco Corporation of Australia Ltd, note 401 above, at 425; Sanders v Snell (1998) 196 CLR 329; 157 ALR 491 at [19]; Lucy v The Commonwealth, note 137 above, at 239, 250 and 255; Collier v Sunday Referee Publishing Company Limited [1940] 2 KB 647 at 652; 4 All ER 234 at 237; Gothard v Mirror Group Newspapers Ltd, note 420 above, at 733 and Leech v Preston Borough Council [1985] ICR 192 at 196. 422. Hardy v Polk (Leeds) Ltd, note 398 above, at 566. 423. See, for example, Taupo Totara Timber Co v Rowe [1978] AC 537; [1977] 3 All ER 123 and Lincoln Mills (Aust) Ltd v Gough [1964] VR 193. Such clauses may be penal: see Biodiesel Producers Limited v Stewart [2007] FCA 722 at [438]–[451] (aff’d [2008] FCAFC 66) and see 14.131–14.136. 424. Hansen v Northern Land Council [1999] NTSC 69 at [32]ff and Northern Land Council v Hansen, note 256 above, at [51]–[59] and Bold v Brough, Nicholson and Hall Ltd, note 200 above, at 852–3. 425. Automatic Fire Sprinklers Pty Ltd v Watson, note 135 above, at 452; Byrne v Australian Airlines Limited, note 136 above, CLR at 428; ALR at 432–3; Gunton v Richmond-upon-Thames London Borough Council, note 135 above, Ch at 468; All ER at 588–9 and Conway-Cook v Town of Kwinana, note 199 above, at [29]–[37]. 426. See 10.77. 427. A wrongful dismissal will often be a continuing breach in which case an election to affirm will not extinguish the right to terminate: see 14.26 and 10.71. 428. British Westinghouse Co v Underground Railway [1912] AC 673 at 689 and Tasman Capital Pty Ltd v Sinclair, note 401 above, at [55]. 429. This formulation was first used over 150 years ago in Beckham v Drake, note 9 above, per Erle J; Baron Parke uses a similar formulation in the earlier decision in Elderton v Emmens (1848) 6 CB 160 at 178 when that matter was before the Exchequer Chamber, endorsed on appeal in Emmens v Elderton, note 138 above, ER at 614. The same requirement continues to be applied today. 430. J W Smith, Selection of Leading Cases on Various Branches of the Law, Vol 2, John Little Publishers, New York, 1839, p 20, an approach supported by some in Emmens v Elderton, note 138 above, ER at 616 per Baron Martin and at 617 per Talfourd J. 431. Williamson v The Commonwealth, note 138 above, at 185 where Higgins J said the earlier approach ‘has long since been exploded’: see 14.35. 432. Banco de Portugal v Waterlow [1932] AC 452 at 506; Scott v Commonwealth of Australia, note 407 above, at 504 per Kennedy J (‘the standard of reasonableness is not high in view of the fact the defendant is an admitted wrongdoer’); Fyfe v Scientific Furnishings Ltd, note 401 above, at 650 and Australasian Meat Industry Employees’ Union v Sunland Enterprises Pty Ltd, note 411 above, at 223. 433. Australasian Meat Industry Employees’ Union v Mudginberri Station Pty Ltd (1987) 74 ALR 7 at 37 and Quinn v Jack Chia (Australia) Ltd, note 200 above, at 582. 434. Scott v Commonwealth of Australia, note 407 above, at 504–5; Yetton v Eastwoods Froy Ltd, note 399 above, WLR at 119–20; All ER at 365–6; Whittaker v Unisys Australia Pty Ltd, note 400 above, at [174]; Beck v Darling Downs Institute of Advanced Education, note 186 above, at 372–3; Burke v Reander Pty Ltd (1996) 69 IR 346 at 360 and Jackson v Hayes Candy & Co Ltd

[1928] 4 All ER 587 at 588 (reasonable to refuse offer of demotion and reduced rate of pay). See also Edwards v SOGAT [1971] Ch 354 at 380. 435. Yetton v Eastwoods Froy Ltd, note 399 above, WLR at 119–20; All ER at 365–6. See also Bold v Brough, Nicholson and Hall Ltd [1964] 1 WLR 201 where the court considered it reasonable for the employee, after four months of unemployment, to accept a very low paying position in a new company in the expectation that he would prosper if the company prospered. 436. Whittaker v Unisys Australia Pty Ltd, note 400 above, at [169]; Bechara v Gregory Harrison Healey & Co [1996] IRCA 262 (von Doussa, Marshall and North JJ, unreported); Payzu Limited v Saunders [1919] 2 KB 581, at 588; Fyfe v Scientific Furnishings Ltd, note 401 above, at 650 and Horkulak v Cantor Fitzgerald International, note 218 above, at [95]–[101] (engaging in a ‘self indulgent’ binge of drinking and cocaine use was not a reasonable attempt to mitigate loss). 437. MacLeod v Springvale City Soccer Club (1996) 72 IR 120 at 132. 438. Bechara v Gregory Harrison Healey & Co, note 125 above, at 389 and 390 (aff’d [1996] IRCA 262). 439. Hansen v Northern Land Council, note 424 above, at [33] and on appeal at Northern Land Council v Hansen, note 256 above, at [51]–[56]. 440. Saad v TWT Limited [1998] NSWCA 282; Saddington v Building Workers Industrial Union of Australia (1993) 49 IR 323 at 342–3; Payzu Limited v Saunders, note 436 above, at 588–9; Bruce v Calder, note 27 above, at 261 and 263 and Collier v Sunday Referee Publishing Company Limited, note 421 above, KB at 651–3; All ER at 236–7. 441. See, for example, Westen v Union des Assurances de Paris (1996) 88 IR 259 at 266; McAndrew v Prestwick Circuits Ltd, note 407 above, at [20] (aff’d (1990) SLT 654 at 658); Gala v State Bank of NSW Limited (1998) 80 IR 112; Saad v TWT Limited, note 440 above; Brookton Holdings Pty Ltd v Kara Kar Holdings Pty Ltd (1994) 57 IR 288 at 289–90 and Shindler v Northern Raincoat Co Ltd, note 143 above, WLR at 1048–9; All ER at 249; see 6.25. 442. Payzu Limited v Saunders, note 440 above; cf the approach of the Court of Appeal and Staughton J at first instance in Sotiros Shipping Inc v Sameiet Solholt (‘The Solhort’) [1981] 2 Lloyd’s Rep 574 and [1983] 1 Lloyd’s Rep 605. See K Handley, ‘Reduction of Damages Awards’ in P Finn (ed), Essays on Damages, Law Book Company, Sydney, 1992, pp 120–3. 443. Whittaker v Unisys Australia Pty Ltd, note 400 above, at [172]; Burns v MAN Automotive (Aust) Pty Ltd (1986) 161 CLR 653 at 659 and 677; 69 ALR 11 at 14–15 and 28. 444. Payzu Limited v Saunders, note 440 above, at 588–9 per Bankes LJ. 445. Payzu Limited v Saunders, note 440 above, at 588–9 per Bankes LJ. In that case Scrutton LJ said at 589 that it would be unreasonable to expect an employee to consider an offer of reemployment from an employer who has ‘grossly harmed him’. See also Whittaker v Unisys Australia Pty Ltd, note 400 above, at [174]; Black v Danka Datakey Pty Ltd, note 125 above, at 430–1 (offer coupled with an unretracted false allegation of poor performance); Wilson v IPC Corporation (Australia) Pty Ltd, note 41 above, at 308–9 (reasonable to reject a genuine offer of reinstatement the day after dismissal); Morrison v Town of Victoria Park [2007] WASCA 164; McDonald v State of South Australia, note 347 above, at [489] (rev’d on other grounds (2009) 104 SASR 344; 185 IR 45; [2009] SASC 219); Shindler v Northern Raincoat Co Ltd, note 143 above, WLR at 1049; All ER at 249–50; Yetton v Eastwoods Froy Ltd, note 399 above, WLR at 118–19; All ER at 361 (where the arbitrary treatment of the employee was a factor in the conclusion) and Bostik (Australia) Pty Ltd v Gorgevski (No 1), note 204 above, at 32 (the lack of trust between the employer and employee was crucial).

446. Bruce v Calder, note 27 above, at 261 and at 263. See also Saddington v Building Workers Industrial Union of Australia, note 440 above, at 342–3 and Bechara v Gregory Harrison Healey & Co, note 125 above, at 389 and 390 (aff’d [1996] IRCA 262). 447. Dunstan v National Mutual Life Association of Australasia Ltd (1992) 5 VIR 72 at 83; contrast with Shindler v Northern Raincoat Co Ltd, note 143 above, WLR at 1049; All ER at 249. 448. For example, in Basnett v J and A Jackson Ltd [1976] ICR 63 at 67 (a case that also concerned employment at a lower grade — the reduction in pay was over 25%) and Burke v Reander Pty Ltd, note 434 above, at 360 (proposed demotion and move from salary to commission only payments). 449. Beck v Darling Downs Institute of Advanced Education, note 186 above, at 372–3. 450. The exercise of the right of an employee to seek damages, rather than specific performance, of an employment contract will usually not be a failure to mitigate loss: see the dicta of Gray J in Bostik (Australia) Pty Ltd v Gorgevski (No 1), note 204 above, at 38–9. 451. This is a problem alluded to in Westen v Union des Assurances de Paris, note 441 above, at 266; see also Shindler v Northern Raincoat Co Ltd, note 143 above, WLR at 1048–9; All ER at 249. 452. See the cases at 14.101 and 14.102 and McAndrew v Prestwick Circuits Ltd, note 407 above, at [20] (aff’d (1990) SLT 654 at 658) (employee refused to transfer to new site and was dismissed; no issue of mitigation arose as the rejected offer preceded the breach). 453. Basnett v J and A Jackson Ltd, note 448 above (reduction in wages and status); Jackson v Hayes Candy & Co Ltd, note 434 above, at 588 (reasonable to refuse offer of demotion and reduced rate of pay); Yetton v Eastwoods Froy Ltd, note 399 above, WLR at 115; All ER at 362 (reduction in status from managing director to assistant managing director); Ross v Pender (1874) 11 Sc LR 175 (reduction in status from head gamekeeper to a subordinate position) and Clayton-Greene v de Courville (1920) 36 TLR 790 at 791 (less significant role in a play). See also Edwards v SOGAT, note 434 above, at 374–5 and 380 (reduction from a Grade I job to an entry level position) and Collier v Sunday Referee Publishing Company Limited, note 421 above. 454. See 6.15 and 8.48. 455. Westen v Union des Assurances de Paris, note 441 above, at 266; Scott v Commonwealth of Australia, note 407 above, at 504–5; Whittaker v Unisys Australia Pty Ltd, note 400 above, at [174]; Beck v Darling Downs Institute of Advanced Education, note 186 above, at 372–3; Burke v Reander Pty Ltd, note 434 above, at 360 and Dunstan v National Mutual Life Association of Australasia Ltd, note 447 above, at 83. 456. See 8.44. 457. Fyfe v Scientific Furnishings Ltd, note 401 above, at 652–6; Bechara v Gregory Harrison Healey & Co, note 125 above, at 391–2 (aff’d [1996] IRCA 262); Yetton v Eastwoods Froy Ltd, note 399 above, WLR at 118; All ER at 365; Magro v Fremantle Football Club Limited, note 255 above, at [172] (rev’d on other grounds (2007) 34 WAR 256; [2007] WASCA 124) (in context of action under the ACL, reasonable not to have moved to Melbourne ‘given the disruptions to his family caused by his previous move to Fremantle’) and Australasian Meat Industry Employees’ Union v Sunland Enterprises Pty Ltd, note 411 above, at 223 (court rejected the suggestion that the employee should remove his four children from their school and move with his wife to another region); see also Karabotsos v Plastex Industries Pty Ltd [1981] VR 675 at 677–8 and Murphy v Overton Investments Pty Ltd, note 72 above, at [70]. 458. Morris v CH Bailey Ltd [1969] 2 Lloyd’s LR 215; see also Hansen v Northern Land Council, note 424 above, at [33] (aff’d Northern Land Council v Hansen [2000] NTCA 1); Lorca v Holts’

Corrosion Control Pty Ltd [1981] Qd R 261 at 270 and Karabotsos v Plastex Industries Pty Ltd, note 457 above, at 677–8. 459. See 14.92 and Magro v Fremantle Football Club Limited, note 255 above, at [170] (rev’d on other grounds (2007) 34 WAR 256; [2007] WASCA 124). 460. Quinn v Jack Chia (Australia) Ltd, note 200 above, at 582 and Beach v Reed Corrugated Cases Ltd, note 111 above, at 658; McKay v Abbey Vale Estate Pty Ltd [2003] WASC 2 at [36]; Harris Scarfe v Logue (1996) 67 IR 373 at 378–9 and Stork Electrical Pty Ltd v Le Good (1999) 95 IR 1 at [40]–[42]. These two latter decisions arose out of unfair dismissal systems but are consistent with the common law. In Burton v Litton Business Systems Pty Ltd, note 181 above, at 169 there was no suggestion that the 59-year-old dismissed employee was acting unreasonably in establishing a business after a month or so of unsuccessful job hunting; cf the dicta of Campbell J in Harding v Harding, note 401 above, at 106–7. In Moss v Lowe Hunt and Partners Pty Ltd, note 123 above, at [168] the court considered it reasonable for the dismissed employee to undertake further studies to enhance his future career prospects. 461. Lavarack v Woods of Colchester, note 203 above, QB at 290–1 and 300; All ER at 688 and 694; Harris Scarfe v Logue, note 460 above, at 378–9 and Stork Electrical Pty Ltd v Le Good, note 460 above, at [40]–[42]. 462. Simonius Vischer & Co v Holt & Thompson, note 45 above, at 356; note, however, Russell v Trustees of the Roman Catholic Church, Archdiocese of Sydney, note 314 above, at [45]. 463. Brookton Holdings Pty Ltd v Kara Kar Holdings Pty Ltd, note 441 above, at 291; see also Scott v Commonwealth of Australia, note 407 above, at 506 (reduction in damages to take into account net and not the gross proceeds from a business established by the former employee). 464. Russell v Trustees of the Roman Catholic Church, Archdiocese of Sydney, note 314 above, at [45]–[49]; Edwards v Chesterfield Royal Hospital NHS Foundation Trust, note 247 above, at [62]–[68] and Anderson v Bowles (1951) 84 CLR 310 at 323. Section 570 of the Fair Work Act may evince such a legislative intention. 465. See Reid v The Explosives Company Limited (1887) 19 QBD 264; Hardy v Polk (Leeds) Ltd, note 398 above, and Burton v Litton Business Systems Pty Ltd, note 181 above, at 168–9; see also Wright v Groves [2011] QSC 66 at [92]–[96]. 466. Hem v Cant (2007) 159 IR 113; [2007] FCA 81 at [30] and Wright v Groves, note 465 above, at [90]. 467. The matter was referred to by Gray J in the context of a statutory scheme in Australasian Meat Industry Employees’ Union v Sunland Enterprises Pty Ltd, note 411 above, at 222. 468. Collier v Sunday Referee Publishing Company Limited, note 421 above, KB at 652–3; All ER at 237. The sums payable have been slightly altered to eliminate facts that unnecessarily complicate this example. 469. The line of authorities commences with Norton Tool Co Ltd v Tewson [1972] ICR 501 at 505–6, was affirmed by the Court of Appeal in Langley v Burlo [2007] ICR 390 and was modified in its application to ‘constructive dismissals’ in Stuart Peters Ltd v Bell [2010] 1 All ER 775; [2009] ICR 1556 at [10]–[17]. 470. See R Upex, The Law of Termination of Employment, 6th ed, Jordans, London, 2001, pp 395– 400 and M Tilbury, Civil Remedies, note 2 above, pp 145–9. 471. Hopkins v Norcros plc [1994] ICR 11 at 17 and Silverbrook Research Pty Ltd v Lindley, note 218 above, at [13].

472. Silverbrook Research Pty Ltd v Lindley, note 218 above, at [12]–[15]. 473. There are many occasions where appellate courts acknowledge that in this field it is not possible to enunciate exhaustive rules. Each case depends on the terms of the particular contract, scheme or statute being considered: Manser v Spry (1994) 181 CLR 428 at 436; 124 ALR 539 at 544 and National Insurance Co of New Zealand Ltd v Espagne (1961) 105 CLR 569 at 600. 474. Redding v Lee (1983) 151 CLR 117 at 145–6; 47 ALR 241 at 261–2. 475. National Insurance Co of New Zealand Ltd v Espagne, note 473 above, at 573 and 599 and Redding v Lee, note 474 above, CLR at 125, 135–8 and 151–2; ALR at 245, 261–2 and 266–7. 476. Redding v Lee, note 474 above, CLR at 137; ALR at 255, referred to approvingly in Zheng v Cai (2009) 239 CLR 446; 261 ALR 481 at [29]. 477. Bulut v Koksal [1988] VR 241 at 246–8 (damages for pain and suffering not reduced by compensation received for loss of earning); Haines v Bendall, note 13 above, CLR at 67–8; ALR at 387; Redding v Lee, note 474 above, CLR at 145–6; ALR at 261–2 and Silverbrook Research Pty Ltd v Lindley, note 218 above, at [12]. 478. Silverbrook Research Pty Ltd v Lindley, note 218 above, at [12] and Haley v Public Transport Corporation of Victoria (1998) 119 IR 242; [1998] VSC 132 at [43]–[59]. 479. As to the purpose of notice, see 11.52. 480. Redding v Lee, note 474 above, CLR at 144–6; ALR at 261–2. 481. See 14.91. 482. Lavarack v Woods of Colchester, note 203 above, QB at 290–1 and 300; All ER at 688 and 694. 483. Parry v Cleaver [1970] AC 1 at 13, 31, 38 and 49; [1969] 1 All ER 555 at 556, 572–3, 578 and 587–8; National Insurance Co of New Zealand Ltd v Espagne, note 473 above, at 573 and 599– 600; Redding v Lee, note 474 above, CLR at 136–8; ALR at 254–5 and Smoker v London Fire and Civil Defence Authority [1991] ICR 449 at 458–9. 484. Hussain v New Taplow Paper Mills Ltd [1988] AC 514 at 530 and 532; 1 All ER 541 at 546–7 and 548 and Atos Origin IT Services UK Ltd v Haddock [2005] ICR 277 at [26]–[28]. 485. Knapton v ECC Card Clothing Ltd [2006] ICR 1084 at [26]; New South Wales v Davies (1998) 43 NSWLR 182 at 191; Harris v Commercial Minerals Ltd (1996) 186 CLR 1 at 17; 135 ALR 353 at 365 and Manser v Spry, note 473 above, CLR at 436; ALR at 544–5. 486. Redding v Lee, note 474 above, CLR at 136; ALR at 255 per Mason and Dawson JJ; National Insurance Co of New Zealand Ltd v Espagne, note 473 above, at 598–9; Watson v Ramsay [1960] NSWR 462 at 463; Papadopoulos v MC Labour [2009] VSC 176 and Parry v Cleaver, note 483 above, AC at 14; All ER at 558. 487. Hopkins v Norcros plc, note 471 above, at 15 and Knapton v ECC Card Clothing Ltd, note 485 above, at [26]. 488. Zheng v Cai, note 476 above, at [19] and National Insurance Co of New Zealand Ltd v Espagne, note 473 above, at 598. See also McCamley v Cammell Laird Shipbuilders Ltd [1990] 1 All ER 854 (employer’s holding company benevolently made payment to ill employee) and the cases discussed in 14.130 concerning ex gratia payments made by the employer. 489. Liffen v Watson [1940] 1 KB 556 at 558. See also Griffiths v Kerkemeyer (1977) 139 CLR 161; 15 ALR 387 (family member provided gratuitous assistance). 490. See, for example, Saddington v Building Workers Industrial Union of Australia, note 440 above,

at 342–3. 491. Hussain v New Taplow Paper Mills Ltd, note 484 above, AC at 530 and 532; All ER at 546–7 and 548 (employer had insured against the liability to make the payments); Graham v Baker, note 137 above, at 345–56 and Redding v Lee, note 474 above, CLR at 139; ALR at 256. 492. Redding v Lee, note 474 above, CLR at 136; ALR at 254; Graham v Baker, note 137 above, at 351; see also Hussain v New Taplow Paper Mills Ltd, note 484 above, AC at 530; All ER at 546– 7 and Morgans v Alpha Plus Security Ltd [2005] 4 All ER 655 concerning state disability benefits reducing the ‘loss’ of an employee under a statutory unfair dismissal scheme. 493. New South Wales v Davies, note 485 above, at 192–3. 494. See, for example, Harris v Commercial Minerals Ltd, note 485 above, CLR at 17; ALR at 365; Manser v Spry, note 473 above, CLR at 436; ALR at 544. 495. Redding v Lee, note 474 above, CLR at 144–6; ALR at 261–2; Parsons v B N M Laboratories Ltd [1963] 2 All ER 658 at 669–70 and 675–6 and Westwood v Secretary of State for Employment [1985] ICR 209 at 220. 496. Redding v Lee, note 474 above, CLR at 144–6; ALR at 261–2. 497. Delaney v Staples, note 136 above, AC at 692–3; All ER at 947–8; ICR at 489; Gothard v Mirror Group Newspapers Ltd, note 420 above, at 733 and Ryan v The Commonwealth, note 187 above, at 144–5; see 14.105. See also Burton v Litton Business Systems Pty Ltd, note 181 above, at 170. 498. Williams v Boc Gases Ltd [2000] ICR 1181 at 1190 and Gaca v Pirelli General Plc [2004] 1 WLR 2683; 3 All ER 348; [2004] EWCA Civ 373 at [29]–[31]; see also Saddington v Building Workers Industrial Union of Australia, note 440 above, at 342–3. 499. See 14.119. 500. Guthrie v News Ltd, note 64 above, at [201] and Reynolds v Southcorp Wines Pty Ltd, note 180 above, at [44]. 501. A matter alluded to in Guthrie v News Ltd, note 64 above, at [201]–[206]. 502. See 11.52. 503. Black v Brimbank City Council (1998) 152 ALR 491 at 506–7; see 14.64. 504. Fryar v System Services Pty Ltd, note 376 above, at 331; Guthrie v News Ltd, note 64 above, at [200]–[203]; Westfield Holdings v Adams, note 411 above, at [138]–[144]; Newton v Goodman Fielder Mill Ltd (1997) 81 IR 227 at 238; Allman v Teletech International Pty Ltd (2008) 178 IR 415; [2008] FCA 1820 at [25]; see also the distinction drawn between notice and severance payments in Articles 11 and 12 of ILO Convention 158 Termination of Employment at the Initiative of the Employer to which Australia is a signatory and, in a different context, International Harvester Export Co v International Harvester Australia Ltd [1983] VR 539 at 546–7. 505. Guthrie v News Ltd, note 64 above, at [203]; Haley v Public Transport Corporation of Victoria, note 478 above, at [43]–[59]; Wilson v National Coal Board [1981] SLT 67 (House of Lords) and Westfield Holdings v Adams, note 411 above, at [147] and [201] (decided under a statutory scheme that differed slightly from the common law on this point). 506. Black v Brimbank City Council, note 503 above, at 505–6 per Moore J, followed in Reilly v Praxa Ltd, note 188 above, at [33]–[36] and Kirchner v Mayne Nickless Ltd (2000) 140 IR 340; [2000] VSC 459 at [95]–[98]. 507. Black v Brimbank City Council, note 503 above, at 507.

508. Haley v Public Transport Corporation of Victoria, note 478 above; see, however, the discussion below and the other cases referred to at 14.129. 509. Black v Brimbank City Council, note 503 above, at 506 per Moore J; this passage (without referring to the later reasoning of Moore J at 507) has been referred to approvingly in Reilly v Praxa Ltd, note 188 above, at [35]; Furey v Civil Service Association of WA (Inc) (1999) 93 IR 349 at 359 and Kirchner v Mayne Nickless Ltd, note 506 above, at [96]. See also the extended discussion in Reynolds v Southcorp Wines Pty Ltd, note 180 above, at [48]–[54]. 510. This was the view taken in Haley v Public Transport Corporation of Victoria, note 478 above, at [50]; Reynolds v Southcorp Wines Pty Ltd, note 180 above, at [54] and Kirchner v Mayne Nickless Ltd, note 506 above, at [96]. 511. Haley v Public Transport Corporation of Victoria, note 478 above, at [50]; see 14.119–14.120. 512. See 14.121–14.122. 513. Redding v Lee, note 474 above, CLR at 137; ALR at 255, referred to approvingly in Zheng v Cai, note 476 above, at [29]. 514. Silverbrook Research Pty Ltd v Lindley, note 218 above, at [12]–[15]. 515. Silverbrook Research Pty Ltd v Lindley, note 218 above, at [13] and at [66]–[74] and Furey v Civil Service Association of WA (Inc), note 509 above, at 359. There are UK cases on point that take a slightly different approach to the issue: Gaca v Pirelli General Plc, note 498 above, at [29]–[31]; Hunt v Severs [1994] 2 AC 350 and Atos Origin IT Services UK Ltd v Haddock, note 484 above, at [28]. 516. See the UK cases discussed in the preceding footnote and Commissioner for Railways (NSW) v Scott (1959) 102 CLR 392 at 440. 517. See Reilly v Praxa Ltd, note 188 above, at [35] and Kirchner v Mayne Nickless Ltd, note 506 above, at [95]–[99]; these cases appear to reach that result by applying the broader proposition discussed in 14.129. 518. The same principles apply to benefits other than money transferable by the party in breach: Ringrow Pty Limited v BP Australia Pty Limited (2005) 224 CLR 656; 222 ALR 306 at [21]. In an employment context most agreed damages clauses are inserted in contracts to obviate the need for employers to prove damage in the event of a breach of the contract by an employee. For ease of reference, and to reflect this practice, in this section I only refer to agreed damages clauses that set the amount of damages payable by an employee to an employer. 519. Dunlop Pneumatic Tyre Company Ltd v New Garage and Motor Company Ltd [1915] AC 79 at 87 per Lord Dunedin, quoted approvingly in Ringrow Pty Limited v BP Australia Pty Limited, note 518 above, at [11]. 520. Ringrow Pty Limited v BP Australia Pty Limited, note 518 above, at [28]–[29] and AMEV-UDC Finance Limited v Austin (1986) 162 CLR 170 at 193; 68 ALR 185 at 201. 521. Ringrow Pty Limited v BP Australia Pty Limited, note 518 above, at [32]–[33] and Elsley v JG Collins Insurance Agencies Limited (1978) 83 DLR (3d) 1 at 15, quoted approvingly in Esanda Finance Corporation Ltd v Plessnig (1989) 166 CLR 131 at 140; 84 ALR 99 at 103–4. 522. Boucat Bay Company Limited (in liq) v The Commonwealth (1927) 40 CLR 98 at 106–7. 523. Cellulose Acetate Silk Company Limited v Widnes Foundry (1925) Limited [1933] AC 20 and Abrahams v Performing Right Society Ltd, note 263 above, at 1040–1. 524. Giraud UK Limited v Smith [2000] IRLR 763 at [7].

525. Such clauses were more common in the eighteenth and nineteenth century prior to the development of modern rules governing penal clauses, particularly clauses that required payments by employees who breached restraint of trade clauses: see, for example, Crisdee v Bolton (1827) 3 C & P 240; Price v Green (1847) 16 M & W 346 and Galsworthy v Strutt (1848) 1 Ex 659. The history of the law governing agreed damages clauses is traced in H McGregor, note 2 above, pp 418–22. 526. There is a third type of case which has spawned little litigation in employment law. Terms of settlement commonly contain confidentiality and non-disparagement clauses which, if breached, require the repayment of the settlement sum. It appears that such clauses may be penal: see, for example, Fermiscan Pty Ltd v James (2009) 261 ALR 408; [2009] NSWCA 355 at [134]–[153]. 527. Arlesheim Limited v Werner [1958] SASR 136 at 140–1; Giraud UK Limited v Smith, note 524 above (employer was permitted to withhold certain payments from the employee, as opposed to requiring the employee to pay a sum, in the event of the employee not serving out his notice). 528. For example, Pigram v Attorney-General for the State of New South Wales (1975) 132 CLR 216; 6 ALR 15; Hamilton v Lethbridge (1912) 14 CLR 236; R v Stewart [1938] QSR 87; Ajax Insurance Company Limited v Smith (1962) 79 WN (NSW) 83; Kirchner v Gruban [1909] 1 Ch 413; Amos v Commissioner for Main Roads (1983) 6 IR 293; Neil v Strathclyde Regional Council [1984] IRLR 14 and Tullett Prebon (Australia) Pty Ltd v Purcell [2009] NSWSC 1079; see also Biodiesel Producers Limited v Stewart, note 423 above, at [438]–[451] (aff’d [2008] FCAFC 66). 529. Dunlop Pneumatic Tyre Company Ltd v New Garage and Motor Company Ltd, note 519 above, at 86–7; Ringrow Pty Limited v BP Australia Pty Limited, note 518 above, at [11] and O’Dea v Allstates Leasing System (WA) Pty Limited (1983) 152 CLR 359 at 368; 45 ALR 632 at 636–7. 530. Multiplex Constructions Pty Limited v Abgarus Pty Limited (1992) 33 NSWLR 504 at 527. 531. O’Dea v Allstates Leasing System (WA) Pty Limited, note 529 above, CLR at 367–8; ALR at 636 and Alder v Moore [1961] 2 QB 57 at 66 (injured footballer agreed to pay £500 to insurer if he ever played again). 532. See the second category of payments in lieu discussed in 14.103; Abrahams v Performing Right Society Ltd, note 263 above, at 1040–1. 533. AMEV-UDC Finance Limited v Austin, note 520 above, CLR at 193; ALR at 202–3 per Mason and Wilson JJ. 534. Ringrow Pty Limited v BP Australia Pty Limited, note 518 above, at [32]; AMEV-UDC Finance Limited v Austin, note 520 above, CLR at 190; ALR at 199; Esanda Finance Corporation Ltd v Plessnig, note 521 above, CLR at 139; ALR at 103; Amos v Commissioner for Main Roads, note 528 above, at 297 and 300. If the stipulated sum is significantly less than the damages likely to be suffered by the employer, then the clause is enforceable as it is not penal: see, for example, Cellulose Acetate Silk Company Limited v Widnes Foundry (1925) Limited, note 523 above. 535. Boucat Bay Company Limited (in liq) v The Commonwealth, note 522 above, at 107 and Alder v Moore [1961] 1 All ER 1 at 5. 536. AMEV Finance Limited v Artes Studios Thoroughbreds Pty Limited (1989) 15 NSWLR 564 at 572–3 and O’Dea v Allstates Leasing System (WA) Pty Limited, note 529 above, CLR at 368; ALR at 636–7. 537. R Meagher et al, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies, note 37 above, p 592; WT Malouf Pty Limited v Brinds Limited (1980) 52 FLR 442 at 462 and O’Dea v Allstates Leasing System (WA) Pty Limited, note 529 above, CLR at 400; ALR at 662. As

McGregor states, ‘the wording used by the parties is of marginal importance’: H McGregor, note 2 above, p 431. 538. O’Dea v Allstates Leasing System (WA) Pty Limited, note 529 above, CLR at 399; ALR at 661–2 and Dunlop Pneumatic Tyre Company Ltd v New Garage and Motor Company Ltd, note 519 above, at 86–7 (‘the strength of the chain must be taken at its weakest link’); in an employment context see Giraud UK Limited v Smith, note 524 above; Pigram v Attorney-General for the State of New South Wales, note 528 above, CLR at 225; ALR at 24; Amos v Commissioner for Main Roads, note 528 above, at 295 and 297. 539. Arlesheim Limited v Werner, note 527 above, at 141. See also Ajax Insurance Company Limited v Smith, note 528 above, and Tullett Prebon (Australia) Pty Ltd v Purcell, note 528 above, at [118]–[129] where the damages payable by the employee were proportionate to the unexpired period of the notice. 540. Waterside Workers’ Federation of Australia v Stewart (1919) 27 CLR 119 at 128 and 133 and Dunlop Pneumatic Tyre Company Ltd v New Garage and Motor Company Ltd, note 519 above, at 86–7. 541. AMEV-UDC Finance Limited v Austin, note 520 above, CLR at 193; ALR at 201–2 and Esanda Finance Corporation Ltd v Plessnig, note 521 above, CLR at 139 and 141–2; ALR at 103 and 104; see, however, the discussion in E Lanyon, ‘Equity and the Doctrine of Penalties’ (1996) 9 JCL 234 at 247–50. 542. H McGregor, note 2 above, pp 429–30. 543. R v Stewart, note 528 above; see also Angel-Honnibal v Idameneo (NO 123) Pty Ltd [2003] NSWCA 263 at [33]. 544. For example, see Ajax Insurance Company Limited v Smith, note 528 above, at 89–90. 545. Section 326 relevantly states: ‘(1) A term of a modern award, an enterprise agreement or a contract of employment has no effect to the extent that the term: … (b) requires, or has the effect of requiring, an employee to make a payment to an employer or another person; if either of the following apply: (c) the … payment is: (i)

directly or indirectly for the benefit of the employer, or a party related to the employer; and

(ii) unreasonable in the circumstances; (d) if the employee is under 18 — the deduction or payment is not agreed to in writing by a parent or guardian of the employee.’ 546. See 14.132. 547. See 14.134.

[page 929]

Chapter 15 Equitable Remedies Introduction History and overview Definitions and types of coercive relief The form of coercive relief for dismissed employees Prerequisites for the Grant of Coercive Relief There must be an enforceable and subsisting contract There must be an actual or threatened breach of a right Specific Performance of Employment Contracts The traditional rule against specific performance and its demise A modern statement of the rule Enforcement of contractually agreed termination procedures Injunctions to enforce statutory rights Negative stipulations and reasonable restraints of trade Trust and Confidence The importance of trust and confidence The meaning of trust and confidence Proof of loss of trust and confidence Inadequacy of Other Remedies at Law Damages usually adequate when the contract is terminable by notice Common irrecoverable damages in employment cases Adequacy of remedies other than damages

Express terms governing remedies Equitable Defences and Other Discretionary Considerations Readiness and willingness to perform Mutuality Constant supervision and uncertainty Unclean hands, hardship and the effect on third parties [page 930] Delay, laches and abandonment of rights Impossibility, illegality and futility Coercive Relief: Other Matters Election between specific performance and damages Pellucid terms of the relief Enforcement Equitable Remedies Against Third Parties Breach of confidence Liability of third parties arising from breach of the equitable duty of fidelity Interlocutory Injunctions The test Balance of convenience considerations Undertakings, final and interlocutory relief Springboard or headstart doctrine Declarations Introduction and general considerations

Declarations concerning dismissals in private sector employment The futility and utility of declarations Other discretionary considerations Equitable and Prerogative Relief and Public Sector Employment Statutory, prerogative and equitable relief in public sector employment Grounds of review Effect of a wrongful removal or suspension Monetary and Other Remedies in Equity Introduction and overview Equitable compensation Damages under Lord Cairns’ Act Account of profits Account and other remedies Account to enforce contractual rights and intellectual property rights The assessment of the profit Account Delivery up and destruction Constructive trusts

[page 931]

INTRODUCTION History and overview 15.1 There are three equitable remedies that may be available when an employee is wrongfully dismissed or threatened with a wrongful dismissal:

orders for specific performance, injunctions and declarations. For approximately 100 years until 1972 courts refused to grant the coercive remedies1 of specific performance and injunctions to compel compliance with and restrain the breach of employment contracts where the employee had been dismissed or was threatened with dismissal. Declarations about the lawfulness of the dismissal would rarely be made. An award of damages was the only remedy available to almost all wrongfully dismissed employees.

Historical background 15.2 Coercion, in the sense of compelling conduct through a legal process, played a crucial role in the web of laws governing inferior servants. From 1349 to 1875 in the United Kingdom the law relied heavily on coercive measures to force inferior servants to serve masters and to compel masters to continue to engage servants. It was not until the early nineteenth century that masters were recognised as having a power to dismiss inferior servants without the permission of the magistrates. For the duration of the service, which was ordinarily yearly, neither master nor servant could terminate the service. When an inferior servant misbehaved or absconded the ordinary remedy was to correct the servant and then for the magistrates to return the servant to serve with the master for the duration of the engagement. The magistrates could compel a master to continue to engage the servant for the duration of the engagement when a master purported to discharge the servant. In Australia the Master and Servant Acts continued well into the twentieth century: see 1.30–1.34 and 1.41–1.43. The position was different for superior servants. They were beyond the scope of the coercive regime in the Master and Servant Acts. Through the nineteenth century courts refused to grant coercive relief to enforce [page 932] contracts of superior servants2 and analogous contracts for personal service.3 During the merger of the law governing superior and inferior servants in the latter part of the nineteenth century, the law adopted the position that specific performance of employment contracts was not permissible.

Overview of the principles governing coercive relief 15.3 Much has changed in the last 40 years in employment law. Commencing with the decision in Hill v Parsons,4 English and Australian courts have accepted that orders for specific performance, injunctions restraining the breach of employment contracts and declarations can, and sometimes should, be granted. Legal and social changes have gradually weakened the persuasiveness of the traditional reasons supporting the rule against coercive enforcement of employment contracts. In Australia unfair dismissal and antidiscrimination laws have meant reinstatement has become part of the furniture of the industrial relations system. Three primary considerations remain persuasive against the coercive enforcement of most employment contracts and the making of declarations arising from a dismissal: a lack of sufficient confidence in the dismissed employee; the adequacy of damages as a remedy for the dismissed employee; and the futility of making a declaration. 15.4 The first part of this chapter examines the law relating to specific performance and injunctions restraining the breach of employment contracts. There are three prerequisites for this relief: the contract must be an enforceable contract; the contract must exist at the time the order is made; and there must be an actual or threatened breach of some right of the employee: see 15.12–15.14. Courts no longer inflexibly apply the traditional rule that specific performance of employment contracts [page 933] will not be ordered: see 15.15–15.21. The granting of coercive relief is a matter of discretion. In exercising that discretion, two considerations often tellingly weigh against the granting of the relief. First, whether the parties retain sufficient trust and confidence in each other: see 15.35–15.40. Second, whether damages or some other remedy at law provides an adequate remedy for the wronged party: see 15.41–15.45. Other considerations relevant to the exercise of the discretion include whether the employee has performed his or her contractual obligations in the past and is ready and willing to perform those obligations in the future;

whether there is a lack of mutuality; whether the order would need to be constantly supervised by the court; whether the order would give rise to hardship for the employer or would be otherwise unfair; whether the employee has been guilty of delay causing prejudice to the employer or has abandoned his or her rights; and whether the performance of the contract would be futile, illegal or impossible: see 15.52–15.64. 15.5 Injunctions and orders for specific performance are discretionary remedies.5 They are not issued by a court as a matter of right, unlike an order for damages for breach of contract. The discretion to grant or refuse coercive relief is not exercised capriciously but in accordance with well established principles. The approach of the court to awarding coercive relief is to consider whether the prerequisites for relief are satisfied and then to weigh all the discretionary considerations discussed in 15.35–15.64 and ultimately ask — is it just in all of the circumstances to grant the relief sought. It is incorrect to say, for example, that specific performance will be refused if to grant it would give rise to a hardship to the employer. It is more correct to say that specific performance may be refused by reference to the hardship caused to the employer where that hardship was so great that, taking into account all other relevant considerations, the grant of the relief would be unjust.6 The courts’ approach to coercive relief described above is modified in several contexts. First, when the contract grants job security protections to employees: see 15.22. Second, when the injunction is sought to restrain a breach of statutory rights, such as a contravention of the general protection provisions in Pt 3-1 of the Fair Work Act: see 15.25. Third, when an employer seeks to restrain the breach of a negative covenant in an employment contract or to enforce an equitable right: see 15.27–15.34. Fourth, when a public sector employer contravenes a statute that grants rights to the employee: see 15.104–15.113. [page 934]

Definitions and types of coercive relief Types of specific performance

15.6 Specific performance is an order of a court directing a party to perform his or her obligations under a contract in accordance with the terms of the contract.7 The term specific performance may be used in a narrow and a broad sense. The narrow sense is strictly more accurate but less common. It refers to an order ‘to compel the execution in specie of a contract which requires some definite thing to be done before the transaction is complete and the parties’ rights are settled and defined in the manner intended’.8 Such an order requires the party to take the step that is specified in the contract and not take an equivalent or similar step. One example in an employment context of this type of specific performance arose in CH Giles & Co Ltd v Morris. Mr Giles entered into a contract with a corporation named Invincible stating ‘Mr Giles shall enter into a Service Agreement with [Invincible] in the form of the draft annexed hereto’. The service agreement was a contract of employment appointing Mr Giles as managing director of Invincible for a term of five years. The court ordered specific performance of that part of the contract that obliged the execution of the service agreement, even though the court would not have ordered the parties to specifically perform the service agreement itself.9 In a broader sense specific performance means an order requiring the parties to perform an act equivalent to the obligation specified in the contract.10 Strictly speaking such an order may be referred to as an order for ‘equitable relief approximate to specific performance’.11 In employment law, and in this chapter, such an order is simply referred to as specific performance. The same, or at least very similar, principles [page 935] apply to applications for specific performance in either the narrow or the broad sense.12

Final, interim and interlocutory injunctions 15.7 There are many different ways to classify injunctions. Injunctions may be final, interlocutory or interim. An interim injunction is one that lasts for a

specified period of time or until further order of the court. It is sometimes made ex parte and is intended to last for a short period. An interlocutory injunction usually lasts until the final determination of the proceeding or until further order of the court. It is a type of interim injunction.13A final or perpetual injunction is one granted at the determination of the proceeding and endures forever, unless it is stated to expire at a specified time or is otherwise dissolved by the court.

Prohibitory and mandatory injunctions 15.8 Injunctions may be prohibitory or mandatory. A prohibitory injunction is an order that restrains a party doing a particular thing, such as breaching a contract. A mandatory injunction is an order that compels a party to perform a particular act.14 The principles applying to the grant of mandatory injunctions differ slightly from those applicable to the grant of prohibitory injunctions.15 There are great similarities between an order for specific performance and a mandatory injunction. Both orders require that the defendant take positive steps to perform the contract. The former tends to be confined to orders that the defendant perform specific contractual obligations, whereas orders for specific performance tend to require that the defendant perform the whole of the contract.16

Injunctions to enforce equitable and legal rights 15.9 A further way of classifying injunctions is by reference to the source of the jurisdiction to grant the injunction. Specific performance [page 936] and injunctions are equitable remedies. Both were granted by Court of Chancery and are now granted by courts exercising an equitable jurisdiction. The power to grant some types of injunctions may also derive from the inherent jurisdiction of the court.17 Various Acts grant the power to courts to make statutory injunctions.18 A court exercising an equitable jurisdiction can issue an injunction in

either its exclusive or auxiliary jurisdiction.19 Injunctions in the exclusive jurisdiction of equity are issued to enforce equitable rights, such as an injunction to restrain a breach of confidence. Injunctions in the auxiliary jurisdiction are issued to enforce legal rights, such as to restrain a breach of contract or to enforce a statutory right. The duty of fidelity owed by an employee is usually both a contractual and equitable duty: see 7.40. Its breach will therefore give rise to both contractual and equitable remedies, which might include an injunction issued in either the auxiliary jurisdiction in relation to the contractual breaches or injunctions in the exclusive jurisdiction in relation to the equitable breaches. Different considerations may arise depending on the jurisdiction exercised. For example, equitable remedies may prevent the employee enjoying the fruits of a breach of the equitable duty of fidelity whereas the breach of the contractual duty of fidelity will only sound in compensatory damages and an injunction in the auxiliary jurisdiction to prevent future breaches.20 There are a variety of other types of injunctions that rarely arise in employment law, such as anti-suit injunctions, Anton Piller orders, Mareva orders, asset preservation orders and quia timet injunctions to restrain the threatened breach of a right when a breach has yet to occur.21 [page 937]

The form of coercive relief for dismissed employees 15.10 The terms and type of coercive relief that may be granted to an employee who has been wrongfully dismissed, or is threatened with wrongful dismissal, depend on a number of matters. One form of remedy is an order for specific performance. Another is a declaration that the contract has not been validly terminated. Another is to obtain an injunction prohibiting the employer giving effect to or acting on the wrongful dismissal. Each remedy aims to give effect to essentially the same purpose: to require the employment to continue in accordance with the terms of the contract. Because courts look to the substance of the relief claimed and not merely the form, if a court is not disposed to grant specific performance of a contract then it will not (or will rarely) grant an injunction or a declaration which has the effect of indirectly

ordering specific performance of the contract.22 15.11 When an employer proposes to commit a breach of the contract but has not yet proceeded to dismiss the employee, a prohibitory injunction restraining a breach of the contract is the common form of relief.23 When an employer has taken the next step and has wrongfully dismissed the employee, and the employee has not elected to terminate the contract, the usual injunction granted is one prohibiting the employer giving effect to or acting on the wrongful dismissal.24 An order of the latter type restores the employment relationship that was severed by the dismissal. It has been said that where the employee elects ‘to keep the contract alive, courts will, in appropriate cases, grant such remedies as are necessary to keep the rights of that party alive’.25 The effect of the injunction is that the parties remain regulated by their extant contract: ‘the relationship remains a consensual one, the only compulsion being against viewing [page 938] it as having been terminated by a particular past act’.26 The order does not compel the employer to continue to employ the employee; it simply stops the employer giving effect to the past invalid decision to terminate. Courts are more willing to grant an injunction restraining the employer giving effect to a termination than they are to make an order compelling specific performance.27 The statutory remedy of reinstatement is analogous to an order for specific performance. Both remedies have the effect of returning the employee to the same position that the employee enjoyed before the wrongful action of the employer, although when reinstatement is ordered a tribunal may sometimes modify the order to return the employee to a different position.28 Under s 545 of the Fair Work Act an interlocutory injunction may be granted which has the effect of reinstating the employee to employment even when the employee has been validly dismissed in accordance with the contract. In such cases, it may be the injunction, not the terminated contract, that governs the continuance of the relationship between the parties.29

PREREQUISITES FOR THE GRANT OF COERCIVE RELIEF There must be an enforceable and subsisting contract 15.12 Courts will not order specific performance of, or restrain a breach of, an unenforceable contract. The conditions that must be met for the formation of an enforceable contract are discussed in Chapter 3. On a number of issues concerning the enforceability of contracts, the approach of equity differs slightly to that of the common law. To be enforceable under the common law a contract must be supported by consideration or be a contract made under seal.30 Coercive relief will not be ordered of a [page 939] contract made under seal that is not supported by consideration.31 This is an application of the maxim that equity will not assist a volunteer. To be enforceable under the common law a contract must be certain.32 Equity will not order specific performance of a contract that is so uncertain that it fails the common law test of certainty. Further, as a matter of discretion, an order for specific performance may be refused when an obligation imposed by a contract is too uncertain to permit the order to be precisely formulated. Equity demands a higher degree of precision than the common law.33 To be enforceable under the common law the consideration provided by both parties must be legal and the performance of the contract must be legal.34 A contract cannot be enforced by coercive relief if either the consideration or the performance of the contract is illegal. However, in some circumstances coercive relief may be ordered if the plaintiff has partly performed a contract that is illegal due to the failure to comply with statutory formalities.35 15.13 Specific performance cannot be ordered of a contract that has been terminated.36 Where an employer has committed a repudiation or a serious breach, the employee must make an election between either affirming the

contract and continuing to perform it or alternatively terminating the contract. Where the employee elects to terminate the contract, he or she may not also seek specific performance. An injunction cannot be obtained to restrain the breach of a validly terminated contract.37 As Shaw LJ once stated, ‘[the] preservation of the contractual relationship is necessarily co-terminous with the ability of the law to compel performance’.38 [page 940]

There must be an actual or threatened breach of a right 15.14 An injunction will only issue if there has been an actual or threatened breach of some right of the plaintiff. As Gaudron J has observed, because an injunction is a remedy ‘it is axiomatic that it can only issue to protect an equitable or legal right or, which is often the same thing, to prevent an equitable or legal wrong’.39 It is insufficient for the plaintiff to show that the defendant has breached some moral obligation or has acted unfairly.40 Coercive relief can be ordered when there is a threat that a party’s obligations will not be performed, even if the time for the performance of the obligations has not passed. As the High Court stated in Turner v Bladin: [Proceedings] for the specific performance of a contract which is of such a kind that it can be specifically enforced can be commenced as soon as one party threatens to refuse to perform the contract or any part thereof or actually refuses to perform any promise for which the time of performance has arrived.41

An injunction, including a quia timet injunction, may issue prior to the breach when it is clearly established that the defendant proposes to breach the obligation and the plaintiff would suffer immediate and substantial damage if the breach occurred.42

SPECIFIC PERFORMANCE OF EMPLOYMENT CONTRACTS The traditional rule against specific performance and

its demise 15.15 For most of the twentieth century courts refused to grant coercive relief to enforce the employee’s obligation to serve and the employer’s obligation to retain the employee in its service.43 This is the traditional rule against specific performance of employment contracts. [page 941] The Court of Chancery occasionally refused to order specific performance of employment contracts on the ground that it lacked ‘jurisdiction’ to do so.44 The word ‘jurisdiction’ in this sense does not refer to the power of the court to grant specific performance. It refers to the practice of not ordering specific performance unless the circumstances justifying the making of the order have been established.45 There were and continue to be some exceptions to the traditional rule. Prerogative relief, including injunctions and declarations, is able to be granted to restrain certain breaches of statutes, and by mandamus compel performance of statutory duties, when the employer is a public sector employer who is exercising a statutory power: see 15.104–15.109. Prior to 1852 courts would not grant an injunction to enforce an express negative stipulation concerning service by the employee, such as a promise not to serve other employers.46 That position was changed by the decision in Lumley v Wagner47 and courts will now enforce some negative stipulations concerning service: see 15.27–15.34. 15.16 The traditional reticence of courts to grant equitable relief concerning merely contractual rights gives way to different considerations when an employer is exercising powers in the performance of a trust, such as by the trustees of a school.48 Courts also grant equitable relief to restrain breaches of the rules of associations that affect pecuniary or proprietary entitlements of employees who are members of the association.49 Prerogative writs do not run to restrain the excesses of employers acting through domestic tribunals of associations or as

[page 942] trustees.50 However, courts approach the grant of equitable relief in such cases in a similar manner to the exercise of their jurisdiction over statutory employers.51 Courts will also more readily grant equitable relief when the contract provides a measure of job security: see 15.23.

Reasons to support the traditional rule reconsidered 15.17 Many of the reasons advanced to support the traditional rule against specific performance are no longer persuasive due to social and broader legal changes. Those changes heralded a new attitude to specific performance as gradually courts accepted that the traditional rule did brook of some exceptions. Through the later half of the twentieth century courts regularly recognised expressly and impliedly that, at least in some circumstances, an obligation to retain the employee in the employer’s service could be specifically enforced.52 By the beginning of the twenty-first century the traditional rule against specific performance had been discarded and replaced with a modern rule discussed in 15.20. The reasons traditionally advanced to support the rule against specific performance were as follows. First, specific performance would be refused where the employer lacked trust in an employee in whom it was necessary to retain trust.53 This reason remains both persuasive and influential. It is examined in more detail in 15.35–15.40. Second, specific [page 943] performance was refused when damages were an adequate remedy.54 This reason also remains persuasive and influential. It is examined in more detail in 15.41–15.51. Third, specific performance was refused when the order would impose uncertain and vague obligations on the employer or would require constant supervision by the court.55 These considerations remain relevant in the exercise of the discretion to award coercive relief but have lost much of their force, except for employment under long-term, fixed term

contracts: see 15.57–15.60. Fourth, courts tended not to order specific performance due to an absence of mutuality.56 Courts would not compel an employer to continue to employ an employee in circumstances in which it would not compel an employee to serve the employer: see 15.55.

Slavery and liberty 15.18 The fifth reason occasionally advanced in support of the traditional rule is that employment contracts should not be turned into contracts of slavery by compelling an employee to serve an employer indefinitely.57 Sometimes this was expressed as a policy against compelling an employee to serve an employer against his or her will.58 The need to avoid slavery may be a relevant consideration when the employee has entered into a contract to serve the employer for life or for a very long term. Such a term may be one that ‘savours of serfdom’ and thereby be unenforceable as contrary to public policy.59 Most employment contracts are terminable on the giving of short notice. The spectre of slavery is not a real threat under such contracts: ‘to say that specific performance of [page 944] a contract of employment is to be granted is not to say that a court will decree that an employee can never leave the employment, or be dismissed by the employer’.60 A related reason sometimes advanced is that the liberty of an employee to choose his or her own employer is at stake if he or she can be compelled to perform the contract.61 By way of comment it is suggested that such arguments gloss over the series of legal, economic and social considerations that place pressures on an employee to continue to perform work for a particular employer.62 Some of the legal and economic considerations are as follows: choosing to become unemployed will often mean that the employee is denied access to benefits under social security law; choosing not to agree to transfer employment to a new employer will often mean that the employee is denied access to redundancy payments; an employer can sometimes obtain an injunction enforcing a negative covenant to prevent an employee working for

a rival; an employee who refuses to perform his or her contract may be sued for damages by the employer; and if the refusal is due to the employee’s industrial action, an order in the nature of specific performance is issued almost as a matter of course within 48 hours of the action commencing under the Fair Work Act.63 An employee who chooses unemployment must also bear a certain social obloquy in some circles.

Specific performance in the United Kingdom 15.19 According to the unilateral termination theory of employment contracts, which was the dominant theory in the United Kingdom in the twentieth century, a wrongful dismissal of an employee automatically terminated the contract. A court cannot order specific performance of a terminated contract.64 Hence, under the unilateral termination theory the court could not order specific performance of a wrongful dismissed employee. The High Court of Australia has unambiguously rejected the unilateral termination theory.65 In the United Kingdom, however, until at [page 945] least the late twentieth century it was still arguably correct. The demise of the traditional rule against specific performance mirrors the gradual rejection of unilateral termination theory.66 As it became apparent in the latter part of the twentieth century that specific performance was sometimes available to remedy a wrongful dismissal, the conceptual foundations of unilateral termination theory started to erode. Now that the unilateral termination theory has been decisively rejected, there is no warrant for refusing to award specific performance for this reason. When considering decisions about specific performance from the United Kingdom it should be noted that legislation there dictates that a court cannot compel an employee to do any work by way of an order for specific performance.67

A modern statement of the rule 15.20 It is clear that the traditional rule no longer applies. As the Full Court

of the Federal Court stated in Turner v ACSEF: [Courts] will no longer set their faces against granting the remedies of declaration and injunction with respect to contracts of employment.68

There remains doubt about the rule that has replaced the traditional rule. One approach is that there still exists a bias against the granting of specific performance of employment contracts, but such an order can be made in abnormal or rare cases. For example, in dicta the majority of the High Court in Byrne v Australian Airlines stated that ‘a court will not, save in exceptional circumstances, order specific performance of a contract of personal service’.69 This may be called the exceptional circumstances approach. [page 946] The other approach (that may be called the principled approach) is that, paying due regard to the special features of employment contracts, orders for specific performance are governed by the same principles that govern the awarding of specific performance of other contracts.70 On this approach an order for specific performance should be made if the prerequisites for the relief are made out and the justice and equity of the case support the making of the order. This approach recognises that due to special features of the employment contract (in particular the personal nature of the contract) it will be rare for specific performance to be ordered. However, there is no presumption or natural disinclination against granting an order for specific performance: … the considerations which motivate courts of equity not to enforce specifically contracts of employment are matters of discretion, and there is no hard and fast rule that a contract for the performance of personal services will not be specifically enforced. … The courts do not now adopt as a starting point any strict rule about what remedies are available in respect of breaches of such contracts. By their nature, such contracts have features which will often give rise to the exercise of a discretion against specific enforcement, but this is not to say that there are special rules applicable. Each case must be judged on its own circumstances.71

15.21 It is not clear which of these two approaches is correct. The most recent High Court dicta on the issue may lend oblique support to the principled approach.72 Although the preponderance of authority favours the exceptional circumstances approach, the principled approach is probably

correct for the following reasons. First, many of the judgments that appear to support the exceptional circumstances approach are equally consistent with the recognition that, due to the unusual nature of the employment contract, it will be rare for specific performance to be ordered. Second, if the exceptional circumstances approach is correct, [page 947] it should be possible to clearly identify those exceptional circumstances in which specific performance will be granted. However, there is some doubt about the existence, and scope, of these exceptions. Third, the principled approach is more consistent with the technique of equity which entails weighing of discretionary considerations one against another. As Megarry J has observed: As is often the case in equity, the matter is one of balance of advantage and disadvantage in relation to the particular obligations in question; and the fact that the balance will usually lie on one side does not turn this probability into a rule.73

It is suggested that specific performance of an employment contract will be ordered by the court where the prerequisites for relief discussed in 15.12–15.14 are established and, after weighing the relevant discretionary considerations, it is just in all of the circumstances to make the order. Two discretionary considerations are particularly important: the retention of sufficient trust and confidence between the parties74 and whether damages and other statutory remedies are an adequate remedy.75 In addition, there are a range of other discretionary considerations that the court will weigh in determining whether it is just in all of the circumstances to make the order: see 15.52–15.64. There is a difference between an order for specific performance and an order to restrain the breach of a contract. The former compels performance of a broken contract; the later prevents the breach of it and orders a party not to breach it. As noted in 15.11, courts are more willing to restrain a breach by the employer giving effect to a termination than they are to make an order for specific performance compelling performance after a dismissal.76

Enforcement of contractually agreed termination procedures 15.22 The employer’s right to terminate an employment contract on notice is, subject to few exceptions, able to be exercised at any time and for any reason.77 Some express terms or industrial instruments regulate the right of the employer to terminate or give notice by limiting the grounds or governing the procedure that must be followed in the giving [page 948] of notice or the exercise of a right to terminate. These terms place the employee in a position that is distinguishable from the ordinary position of employer and employee. Equitable relief is more readily granted to restrain the breach of such terms governing job security.78 As Young J has stated: These cases79 recognise that an interim injunction can be granted to restrain an employer treating a dismissal as valid or effective in circumstances where fair processes or natural justice have not been afforded to the employee in accordance with the contract of employment.80

The cases falling within this class form something of a portmanteau category. This class is analogous to, but distinguishable from, the cases in which the job security protection is granted to a public sector employee by a statute. The grounds on which equity enforces such protections are distinguishable from the grounds for enforcement of private sector contracts: see 15.110. Lord Reid classified cases in this category as involving ‘dismissal from an office where there must be something against a man to warrant his dismissal’.81 However, the class extends further than office holders. It extends whenever a public or private sector contract (or perhaps an industrial instrument)82 limits the grounds for dismissal or governs the procedure that must be followed in the exercise of a right to dismiss: … a useful test can be formulated in this way. Where one party has a discretionary power to terminate the tenure or enjoyment by another of an employment or an office or a post or a privilege, is that power

[page 949]

conditional upon the party invested with the power being first satisfied upon a particular point which involves investigating some matter upon which the other party ought in fairness to be heard or to be allowed to give his explanation or put his case? If the answer to the question is ‘Yes,’ then unless, before the power purports to have been exercised, the condition has been satisfied after the other party has been given a fair opportunity of being heard or of giving his explanation or putting his case, the power will not have been well exercised.83

Coercive relief and agreed disciplinary procedures 15.23 Compared to employees whose contract is terminable on notice, damages are unlikely to be an adequate remedy for employees entitled to an agreed job security provision: see 15.43–15.47. An injunction to restrain an employer adopting a disciplinary process contrary to that agreed in the contract can be ordered despite the loss of trust and confidence in the employee’s ability to perform his or her duties.84 There needs to be little trust and confidence between the parties for the employer to implement a contractually agreed procedure to investigate allegations of misconduct and determine if the misconduct warrants termination.85 The order will enable the employee to gain the benefits of the contractually agreed procedure.86 For example, in Peace v Edinburgh City Council the contract provided that allegations of misconduct were to be dealt with by a particular procedure. The employer proposed to adopt a different procedure. The employment relationship was extant, though the employee had been suspended from the performance of work. Lord Penrose stated: Where the parties are in agreement that the contract of employment subsists and should subsist, albeit in qualified form, there is in my opinion no reason in principle or in common sense for declining to enforce provisions which can be put into effect without requiring any greater degree of contact and mutual cooperation in the carrying out of

[page 950] obligations derived from the employment than the parties themselves are prepared to accept.87

15.24 Coercive relief will not be ordered when the employment contract is terminated: see 15.13. It is less likely to be ordered where the employment relationship has been terminated. But the termination of the relationship, such as by a wrongful dismissal, does not mean that an injunction cannot be made

restraining the employer acting on the dismissal or treating the dismissal as valid.88 Where the employment relationship is ongoing, then a court can (and in many cases will) restrain an employer who is implementing the incorrect procedure, or make an appropriate declaration.89 Although there is little discussion of the notion in the authorities, it appears that job security clauses are a type of negative stipulation relating to service: see 15.27–15.30.

Injunctions to enforce statutory rights 15.25 Injunctions and orders in the nature of specific performance (such as reinstatement) may be made under various statutes governing employment law.90 Most statutes governing discrimination permit a court or tribunal to reinstate an employee who has been dismissed in contravention of the Act and to order the employer to perform any reasonable act to redress any loss or damage suffered by the employee.91 Terms such as reinstatement and injunction take their meaning and content from the context in which they appear.92 The existence of a statutory remedy for the wrong is relevant to the grant of coercive relief: see 15.50. [page 951] 15.26 In the exercise of powers to grant those statutory remedies courts consider the same or similar discretionary considerations to those discussed in 15.35–15.64 with at least two important differences. First, when granting injunctive relief to remedy statutory wrongs it is necessary for courts to reflect the statutory context in which such powers are exercised.93 Depending on that context factors ordinarily considered in equity may be afforded more, less, or no weight, or additional factors may be considered.94 Second, under many statutory schemes the remedy of reinstatement is expressly or implicitly made the primary remedy for employees whose dismissal is unfair or discriminatory.95 Reinstatement is usually the first remedy that must be considered and is ordinarily the remedy awarded unless it is inappropriate, impracticable or otherwise unjust to do so.96 Interlocutory

injunctive relief restraining the dismissal may be more readily granted if the statute contemplates reinstatement as final relief.97 Interlocutory injunctions are often granted requiring an employer to refrain from dismissing an employee in breach of anti-discrimination provisions.

Negative stipulations and reasonable restraints of trade 15.27 Compelling the performance of a positive obligation — such as an agreement to serve — is different from restraining the breach of a negative [page 952] obligation — such as an agreement not to serve the employer’s rival. In contrast with their approach to specific performance of the obligation to serve, courts adopt a different approach in determining whether to grant an injunction to restrain a breach of a negative stipulation in a contract. In the context of employment the most common negative stipulations are a promise by an employee not to work for another employer during the course of employment; not to work in a particular trade or for particular employers after the termination of the employment; and not to disclose confidential information. These types of clauses are restraints of trade and, when unreasonable, will not be enforced: see 16.2.

Negative and positive stipulations 15.28 A negative stipulation is a term containing a promise not to do a particular act. There was once a view that courts would always grant an injunction to enforce negative stipulations and did not need to weigh up the ordinary discretionary considerations that apply in the granting of injunctions.98 That approach has now been rejected.99 An injunction is always a discretionary remedy and courts retain a discretion to refuse relief.100 The exercise of the discretion to refuse to grant an injunction is different from the power to sever terms that are unreasonable restraints of trade.101 Ordinarily an injunction will issue to restrain a breach of an enforceable negative stipulation concerning post-termination conduct by the

employee, such as breaches of post-employment restraint of trade and confidential information clauses and infringements of intellectual property rights.102 [page 953] 15.29 As discussed in 15.20, courts will ordinarily not grant coercive relief to enforce a positive stipulation that requires the employee to serve the employer.103 To do so would indirectly grant specific performance of the contract.104 The proper characterisation of a term relating to the employee’s service as imposing a positive or negative obligation is of considerable importance. In a trite sense every positive obligation can be restated as, and be said to imply, a negative obligation: an employee’s positive obligation to exclusively serve the employer can be restated as a negative obligation not to serve any other employer. In characterising the term the form is not crucial. What is important is whether the obligation is in substance an agreement to perform or not perform a particular act.105 A court will not ordinarily imply a negative obligation into an express positive obligation: an agreement to exclusively serve the employer will not be treated as a negative stipulation that the employee will not serve other employers.106 An agreement not to give notice until a particular date is in substance a positive obligation to serve.107

Negative stipulations relating to service 15.30 A court will not enforce a negative stipulation where the effect of the order is to compel the employee to either serve the employer, or to starve and remain idle.108 There are two reasons for this approach. First, such an order is in effect an order for specific performance: [A court will not restrain the breach of a negative stipulation] where to grant such relief would have the effect, directly or indirectly, of enforcing

[page 954]

a contractual obligation to perform personal services. A court of equity will not permit an injunction to be used as an instrument of achieving indirectly what it would not enforce directly by a decree of specific performance.109

This consideration is less compelling in circumstances in which specific performance of the contract might be ordered. Absent such circumstances, an injunction may tempt but not compel the employee to serve.110 As to the meaning of compulsion: … the court ought not to enforce the performance of the negative obligations if their enforcement will effectively compel the servant to perform his positive obligations under the contract. Compulsion is a question to be decided on the facts of each case, with a realistic regard for the probable reaction of an injunction on the psychological and material, and sometimes the physical, need of the servant to maintain the skill or talent. The longer the term for which an injunction is sought, the more readily will compulsion be inferred. … An injunction will less readily be granted where there are obligations of mutual trust and confidence, more especially where the servant’s trust in the master may have been betrayed or his confidence in him has genuinely gone.111

15.31 There is a difference between broad stipulations that prevent the employee working for any other employer and narrower stipulations that prevent the employee from working for a limited range of employers. The court will not ordinarily grant an injunction to enforce an obligation to only work for the employer, or an obligation not to serve any other employer, as this would compel the employee to serve the employer.112 However, an injunction will more readily be issued to restrain a breach of a negative stipulation that is limited so as to only prevent the employee working as an employee113 in a specific area, trade or occupation.114 Such [page 955] a limited term leaves the employer free to earn a living working in a different region or occupation, a notion discussed below: see 15.33.

‘Special services’ 15.32 Many of the cases where an injunction has been granted enforcing negative stipulations restraining employment with a rival have concerned employees providing ‘special services’ such as those in the entertainment industry. It has often been said that it is only in this area that an injunction

can be granted.115 The better view is that all that is meant by the concept of ‘special services’ is that the restraint prevents service in a specified area, trade or occupation: Rather, the concept of ‘special services’ is concerned with the scope of the services, as distinct from any particular type of service in which publicity is important. Consistent with what Sugerman J said in Atlas Steels, all that is meant by the concept of ‘special services’ is that the prohibition relates to a specific line of work or employment, and does not preclude employment generally, in other fields. Equity enforces (to the extent that they are valid) prohibitions on specific — ‘special’ — lines or fields of employment, since to do so leaves open to the employee other fields of endeavour, from which he or she may derive a living, and does not indirectly compel the employee to render the contracted services by having idleness as the only alternative.116

Starvation, idleness and economic reality 15.33 The second reason courts do not enforce some negative stipulations rests on the twin common law policies against what might be called sloth and against the economic inefficiency associated with skilled employees not exercising their skills.117 A court will not enforce [page 956] a negative stipulation if its effect is to force the employee to choose between, on the one hand, serving the employer and, on the other hand, ‘starvation and idleness’.118 Two steps are often taken by employers seeking to obtain an injunction to avoid the consideration based on starvation and idleness being decisive. First, the employer can agree to pay the employee whether or not he or she performs work under the contract. Such a commitment will ensure the employee will not ‘starve’.119 Second, the employer can offer to continue to permit the employee to perform work if he or she wishes, thereby avoiding the harm suffered by the employee as the result of the atrophying of the employee’s skills and permitting the employee to gain the benefits associated with performing work.120 15.34 The scope and duration of any injunction need not be co-extensive and conterminous with the terms of the restraint. There are different views on

whether a broad negative stipulation may be able to be cured by limiting the injunction to prevent the employee working for a particular competitor.121 The court may, in its discretion, refuse to grant an injunction preventing the employee working for a new employer who is not the employer’s rival.122 An injunction may also be refused, or the duration of an injunction curtailed, where an employee has a significant period to serve before the contract is terminated.123 [page 957] Where an injunction is granted the court is in effect concluding that the employee is able to obtain remunerative work consistent with the restraint with a person other than the employer. By way of comment, it is suggested that some of the earlier cases reach somewhat unreal conclusions about the capacity of employees to maintain a living outside of their profession. It has been said that an opera singer has no cause of complaint if she is compelled to abstain from opera singing; and that if Bette Davis is compelled to abstain from film acting then she could ‘employ herself both usefully and remuneratively in other spheres of activity’.124 As Professor Brooks has argued: … reality is different from theory. If all a person’s training and experience is in relation to one type of occupation, it is in reality quite untrue to say the person could easily go and earn remuneration in some other occupation.125

A more satisfactory approach is for the courts to consider the reality of the position and the hardship that the employee would suffer if the restraint were enforced to its full extent. In Buckenara v Hawthorn Football Club Ltd the employee, a footballer, had only a few years to earn the most he could at the top of his profession. He had an otherwise unstable work history. The court held that a restraint that prevented him playing football, but left him free to work in other fields, would force him to serve the employer due to the considerable financial hardship that would result. These matters were relevant in shaping the extent of the relief the court granted.126

TRUST AND CONFIDENCE

The importance of trust and confidence 15.35 Trust and confidence is a necessary ingredient in any employment relationship.127 The loss of sufficient trust and confidence in an employee is often the most persuasive reason applications by dismissed employees for coercive relief are denied. Similarly, courts are reluctant to require employees to serve an employer where the employee has lost trust and confidence in the employer.128 The loss of trust and confidence is a [page 958] discretionary consideration weighed when determining whether to grant coercive relief. The loss is not a complete bar to relief. Courts have ordered specific performance, or restrained an employer giving effect to a dismissal, even when an employer has lost trust and confidence in the employee.129 However, when that trust and confidence is lost it is often a weighty consideration and coercive relief is usually denied.130 The proper approach has been summed up as follows: [The] court will not by injunction require an employer to let a servant continue in his employment when the employer has sought to terminate that employment and to prevent the servant carrying out his work under the contract, unless it is clear on the evidence … that there exists sufficient confidence on the part of the employer in the servant’s ability and other necessary attributes for it to be reasonable to make the order. Sufficiency of confidence must be judged by reference to the circumstances of the case, including the nature of the work, the people with whom the work must be done and the likely effect upon the employer and the employer’s operations if the employer is required by injunction to suffer the plaintiff to continue in the work.131

15.36 There are two related policies underlying this approach. First, where the retention of trust and confidence is necessary for a viable employment relationship, then ‘if one party has no faith in the honesty or integrity or the loyalty of the other, to force him to serve or to employ that other is a plain recipe for disaster’.132 Second, where it is necessary for the employer and employee to maintain a personal relationship to [page 959]

make the employment relationship viable, the law will not compel one party to maintain that personal relationship with the other.133 By way of comment, there remains an unresolved tension between these propositions and the recognition of the implied term of trust and confidence: see 8.13. Employers have an obligation to not engage in conduct that will damage the relationship of trust and confidence with the employee. Once this obligation is recognised, it is difficult to see why an employer’s complaint about a lack of trust and confidence brought about by the employer’s own wrongful act should be afforded significant weight.134

The meaning of trust and confidence 15.37 Trust and confidence is not an absolute measure; it can be measured in degrees. Courts do not require that there be complete confidence in an employee before ordering coercive relief. Sufficient confidence is enough. Since at least the early 1990s there has been an unfair dismissal regime in Australia that makes reinstatement the primary, or a principal, remedy: see 15.26. Bromberg J has observed: Dismissed employees are regularly reinstated into their former employments without apparent consequent difficulties. The long-standing nature of this remedy, and its acceptance as part of the industrial furniture, is a testament to the fact that as a matter of practice, a breakdown in confidence is not necessarily irreconcilable. What needs to be achieved by a reconciliation is a sufficient level of cooperation for a proper working relationship to resume; mutual affection and friendship are not essential.135

Whether sufficient trust and confidence exists between the parties depends on a number of factors. The nature of the employment and the work performed is important.136 The greater the level of trust required by the contract, the less desirable it is for the parties to be harnessed [page 960] together.137 A lower degree of trust is required of a casual employee engaged by McDonald’s to produce hamburgers compared with a funds manager who regularly exercises fiduciary duties. As to confidence in the employee’s abilities, courts are reluctant to issue coercive orders lumbering employers

with incompetent employees. A court is more likely to make an order for specific performance where the employer is not critical of an employee’s performance or does not have a rational foundation for its criticism.138 15.38 The personal relationship between the employer and the employee will be significant. A court is less likely to order specific performance when a crucial personal relationship between the employee and the employer who work closely together has broken down.139 Where the employer is a large enterprise, or a corporation, the importance of the personal relationship between the employer and the employee may be of less consequence.140 Gray J has observed that: The law relating to the need for trust and confidence in an employment relationship was developed at a time when employment invariably involved a close personal relationship between employer and employee. The advent of corporate employers has diminished the importance of this element of the employment relationship. A corporation has no sensitivity. The crucial question must be what effect, if any, loss of trust by a manager in an employee is likely to have on the operation of the workplace concerned.141

[page 961] The loss of trust and confidence by an employer will often coincide with a dismissal or threatened dismissal of an employee. An employer will rarely retain complete trust and confidence in an employee who it has dismissed for misconduct, whether wrongfully or otherwise. Where the dismissal is for other reasons, trust and confidence may be retained and coercive relief more readily ordered.142 15.39 The importance of the retention of trust and confidence will vary according to the relief sought and the term of the contract being enforced. Where the employee seeks specific performance of a long, fixed term contract, the retention of trust and confidence is indubitably important as the order will require the parties to continue in an employment relationship for an extended period. The retention of trust and confidence may be less significant where an injunction is sought to restrain the employer acting in a manner that breaches a term in the contract governing the dismissal process. In such cases an injunction usually does not forbid the termination of the contract. It simply requires that the employer not act on an invalid notice and compels the

employer to follow the agreed procedures before effecting any dismissal.143 Where the employee is seeking to gain the benefit of an agreed disciplinary procedure, coercive relief can be ordered despite the loss of trust and confidence in the employee’s ability to perform the work as such trust and confidence is often unnecessary to give effect to a disciplinary procedure.144 Trust and confidence will have even less relevance where the injunction restrains a breach unrelated to the continuation of service, such as an injunction preventing the employer giving an unlawful order.145 Trust and confidence in an employee can be lost and then restored. Courts do not assume that once lost, trust and confidence is irrevocably [page 962] lost or that once a personal relationship is harmed it cannot be repaired.146 The making of a serious allegation of misconduct supported by some evidence may result in the employer reasonably losing a degree of trust and confidence in the employee. A full investigation of the allegations may result in that trust and confidence being restored. It is appropriate for courts to proceed on the basis that the confidence of an employer in an employee will be restored by a finding that allegations of misconduct were ill-founded.147 The trust and confidence must exist at the time the court determines the application for injunctive relief, rather than at the time of the breach of contract.148 Trust and confidence can be lost as the result of actions occurring after the termination of the employment or during the course of a trial.149

Proof of loss of trust and confidence 15.40 The assertion by an employer that it has lost trust and confidence in the employee no longer acts as a ‘magic formula’150 to resist an order for specific performance or an injunction. Proving the loss of trust and confidence requires evidence. The evidence can be tested: ‘courts will certainly scrutinise the submission on work relationships most carefully, even skeptically’.151 The court will reject that evidence where

[page 963] the assertion of the loss of trust and confidence is found to be irrational or unpersuasive. Courts have found that the necessary degree of trust and confidence has subsisted despite the protestations of an employer.152 Millett J expressed the approach in the following terms: The court will only intervene by way of injunction in an employment case to restrain dismissal where it is satisfied that the employer retains confidence and trust in the employee or, if he claims to have lost such trust and confidence, does so on some irrational ground.153

Courts are less likely to order coercive relief when the loss of trust and confidence is based on rational grounds, such as when the employee is reasonably suspected of committing crimes.154 The court’s insistence on the employer proving a reasonable and rational basis for the alleged loss of trust and confidence is important. If it were otherwise, employers could successfully oppose applications for coercive relief by irrationally and unreasonably asserting that they had lost confidence in an employee. The employee’s right to a remedy should not depend on whether an employer adopts an irrational and unreasonable position.155

INADEQUACY OF OTHER REMEDIES AT LAW 15.41 The adequacy of damages156 is one of the most significant discretionary considerations taken into account when determining whether coercive relief will be granted, particularly for wrongfully dismissed employees. Formerly courts exercising an equitable jurisdiction required the plaintiff prove that damages were an inadequate remedy before making an order for coercive relief.157 In recent years the practice [page 964] of courts towards the grant of coercive relief has changed.158 Nowadays the proper test requires that the adequacy of damages should be dealt with as a discretionary consideration and not assessed as a threshold matter. In particular, the question to be asked is whether ‘it is just, in all of the

circumstances, that a plaintiff should be confined to his remedy in damages’.159 When an employer has breached an obligation to provide notice or make a payment in lieu of notice, damages will often be an adequate remedy for the employee: see 15.43–15.44. In determining whether damages are an adequate remedy a court will consider a range of matters including whether damages are recoverable for the loss suffered as the result of the breach and any difficulties in proving and quantifying the loss: see 15.48–15.49. The adequacy of remedies other than damages, including statutory remedies, is relevant in determining whether to grant a coercive remedy: see 15.50. Whether coercive relief will be granted will partly depend on any clause in the contract specifying that breaches only sound in damages or are enforceable by coercive remedies: see 15.51. 15.42 Courts often refer to the need to prove ‘irremediable’ or ‘irreparable’ harm or injury instead of the adequacy of damages. Meagher, Heydon and Leeming have observed that: It should be noted that the requirement that ‘irremediable damage’ or ‘irreparable injury’ would result if an injunction were not granted is no more than another way of saying that damages must be shown to be

[page 965] inadequate as a remedy; all damage is in equity considered irremediable if not adequately compensable in damages.160

Parties have a legal right to the performance of their contract.161 It is an interest that demands some respect. Coercive remedies may protect this interest, even in circumstances where the innocent party does not suffer any provable losses arising from the breach. Although the absence of provable loss may weigh against the granting of coercive relief, the existence of such loss is not a precondition to the making of an order for a coercive remedy.162

Damages usually adequate when the contract is terminable by notice

15.43 Damages will usually be an adequate remedy for wrongfully dismissed employees engaged under contracts terminable by notice and employees engaged under fixed term contracts. The overwhelming majority of Australian employees fall into these categories. Their only contractual protection from dismissal consists of a notice clause (requiring the employer to give a certain amount of notice of the intention to terminate the contract, or payment in lieu of that notice) or, in the case of fixed term employees, a clause requiring the employer to continue the engagement for a specified period. For such employees a wrongful dismissal will terminate the employment relationship, although it will not terminate the employment contract. The wrongful dismissal gives the employee an election: to either accept the serious breach or repudiation and thereby terminate the contract or, alternatively, to affirm the contract and keep it on foot. If the employee elects to accept and thereby terminate the contract then the employee is usually entitled only to damages equal to the amount that the employee would have earned during the notice period or until the expiration of the fixed term. Damages are usually an adequate remedy for such an employee. Also, coercive relief will not be granted to enforce a contract (or restrain its termination) where the employee has elected to terminate the contract: see 15.13. If, on the other hand, the wrongfully dismissed employee elects to affirm and keep the contract on foot, the employee cannot claim wages for any period after the wrongful dismissal because the right to receive remuneration for services is ordinarily dependent on the services having been rendered. Consequently, a wrongfully dismissed employee who [page 966] elects to affirm the contract is usually entitled only to damages equal to the amount that the employee would have earned during the notice period from the date of the wrongful dismissal or until the expiration of the fixed term. As a majority of the High Court has observed, ‘the possible continuation of the contract of employment after a wrongful dismissal will, therefore, ordinarily be of no real significance’.163 These issues are illustrated in the case of Marsh v National Autistic

Society. Mr Marsh was entitled to three months’ notice under his contract. He was wrongfully and summarily dismissed. Mr Marsh did not accept the repudiation. He sought injunctions restraining his purported dismissal and requiring his employer to pay him remuneration until the employment was validly terminated. Rejecting his application, the court held damages consisting of three months’ remuneration were an adequate remedy for Mr Marsh.164 15.44 Damages may not always be an adequate remedy for employees engaged under contracts terminable by notice and fixed term contracts. If damages are inadequate, coercive relief is more likely to be granted. In Linnane v Monash University the employment of a university professor was governed by a fixed term contract. The employment was terminated due to an act of alleged misconduct with 12 months of the contract still to run. The termination was a breach and the employee sought an interlocutory injunction restraining the employer acting on the alleged termination. The professor held a number of international positions, was engaged in ongoing research projects and regularly addressed international conferences. The court was satisfied that the refusal of the injunction would cause irreparable damage to his reputation. An injunction was made, as compensation for the remainder of the fixed term would not have been an adequate remedy.165 Damages are almost always an adequate remedy where the obligation being enforced is one to pay money to the employee.166 Coercive relief cannot be granted to require the employer to pay a debt to an employee. However, specific performance of an obligation of the employer to pay money to a third party may be granted, such as an obligation to [page 967] make superannuation contributions to a trust or the obligation to make payments to a company controlled by the employee.167

Common irrecoverable damages in employment cases 15.45 Many Australian employees are contractually entitled to the benefits of

job security clauses more generous than the benefits granted by a simple notice clause or a fixed term contract. For example, some employees are engaged under contracts that prevent their unfair dismissal or require their employer to follow disciplinary procedures before a dismissal is effected.168 Other clauses prevent employers giving notice to an employee without first obtaining the approval of a third party or to apply certain procedures in selecting which employees should be made redundant. Some public sector statutes also grant similar protections to employees. For employees entitled to a range of such enhanced job security protections, damages are often not an adequate remedy. Most of the successful applications made by employees for the restraint of wrongful dismissals concern employees entitled to the benefits of such clauses: see 15.22.

Non-monetary benefits of employment 15.46 Damages may not be able to be recovered under the common law for some losses suffered by a dismissed employee. The common law remedy of damages tends to value the economic element of employment and devalue the social and personal benefits of employment.169 Equity recognises that the losses of dismissed employees extend beyond the economic. An employee may suffer distress as the result of a wrongful dismissal, but such damages are not recoverable in an action for wrongful dismissal.170 This is not because there is no damage suffered by the [page 968] employee: it is judicially acknowledged that such suffering is a common consequence of a dismissal.171 Rather, damages are not awarded due to policy considerations.172 Equity recognises that damages may be an inadequate remedy for some wrongfully dismissed employees for this reason.173 Damages for the stigma attached to a summary dismissal cannot be recovered under the common law.174 The same consideration applies to employees whose reputations are damaged by a wrongful dismissal because, except in unusual cases, damages

are not recoverable for such losses.175 An employee whose dismissal is not restrained by an interlocutory injunction may also lose the satisfaction gained from performing the employment and his or her skills may atrophy.176 Damages may not assuage this loss: … the appropriateness of specific performance as a remedy is strengthened by a growing acceptance at common law of the right of an employee to perform work. That recognition has arisen out of changed social attitudes. There is now a greater recognition than ever that employment is important to an employee not simply because it provides economic sustenance. Workplaces are a hub of important human exchanges which are vital to the wellbeing of individual workers. Work provides employees with purpose, dignity, pride, enjoyment, social acceptance and many social connections. As well, the performance of work allows for skill enhancement and advances career opportunities. These non-pecuniary

[page 969] attributes of work are important and their denial can be devastating to the legitimate interests of any worker, either skilled or unskilled.177 15.47 Where the coercive relief is sought under a statutory antidiscrimination system, the interests protected by that system will be relevant. As North J stated in the MUA litigation: The Court should take into account as favoring the grant of interim relief that the context of the claims is not a commercial dispute about money but an attempt to vindicate the rights of the employees to earn a living free of victimisation. … this case concerns employees whose interest is primarily a personal interest in retaining employment free from discriminatory conduct. In a case seeking to vindicate such personal rights, a court should be more ready to make orders than it would be in a case involving purely financial interests.178

Difficulties in quantification 15.48 The second reason that damages may be inadequate is that they may be difficult to quantify and prove. This is a factor that sometimes arises when employers seek to enforce exclusive service clauses in contracts.179 In such cases it is very difficult to assess what loss will be suffered by the employer as the result of an employee working for a rival. In a similar vein, damages will be difficult to assess for an employee wrongfully denied the benefit of a job security clause. In Reilly v State of Victoria the employee was engaged on a series of

temporary contracts in the public service. Her employer, treating her as a temporary employee, gave her notice and dismissed her. The court found that there was a serious question to be tried about whether she was entitled to the protection of certain contractual and statutory job security provisions. The court granted an interlocutory injunction restraining the employer treating the termination notice as valid. In reaching the conclusion that damages would be an inadequate remedy for Ms Reilly the court noted that if the injunction was not granted then Ms Reilly could not recover damages for the lost opportunity to obtain permanent employment and, even if such damages were available, [page 970] they would be difficult to assess and would be unlikely to provide a satisfactory substitute for the performance of the contract.180

Other reasons damages may be inadequate 15.49 The third reason that damages may be inadequate is that damages may not be able to be recovered by the plaintiff because a third party has suffered the loss.181 There are a range of other reasons why damages may be an inadequate remedy. For example, damages are an unwieldy and unsatisfactory solution when there are multiple and continuing breaches of an employment contract because damages can only be awarded to compensate for the losses arising from past breaches of a contract and cannot compensate the wronged party for future breaches: see 14.25–14.28. To prevent an employer continuing to breach an employment contract and to avoid multiple actions for damages to recover the loss suffered arising from each successive breach it is necessary to obtain equitable relief in the form of an injunction, specific performance or a declaration. If the employer or employee is impecunious or verging on insolvency then damages are unlikely to be an adequate remedy.182 Damages may not be an adequate remedy for employees who are denied the opportunity to serve out a notice period. It is generally recognised that it is more beneficial for most employees to seek alternative employment when

he or she retains employment.183 It is difficult to quantify and value this benefit. Damages are sometimes an inadequate remedy to rectify the deprivation of this benefit caused by a wrongful dismissal.184 If a party can purchase a substitute for the other party’s performance then damages will be an adequate remedy.185 For example, if the employer has agreed to buy an employee a new Ford Falcon and refuses to do so, damages [page 971] will be an adequate remedy for the employee as there is a ready market in which a substitute for the employer’s performance can be obtained.

Adequacy of remedies other than damages 15.50 The inadequacy of remedies other than damages is also relevant to the grant of an order for specific performance or an injunction. If a party may seek and obtain another adequate remedy under the common law or statute, or in an alternative tribunal, it may be inappropriate to grant coercive relief.186 For example, if an employer seeks an injunction preventing an employee breaching a contract by engaging in industrial action, the failure of the employer to seek to resolve the dispute before an appropriate industrial tribunal may make the granting of the injunction inappropriate.187 Courts have regard to the existence of alternative final statutory relief as a consideration when determining interlocutory non-statutory relief.188

Express terms governing remedies 15.51 Contracts sometimes stipulate the consequences of a breach by one of the parties. In some cases the contract will specify that certain breaches only sound in damages. Specific performance of such a contract will often not be ordered as there damages will be adequate and in some cases there is no absolute obligation to perform the contract. More difficult questions arise when an agreed damages clause of the contract

[page 972] provides that, in the event of a breach, one party shall pay the other an agreed sum of money.189 In Hamilton v Lethbridge the employee agreed not to establish a rival business for a reasonable period after the employment terminated and to pay £2000 as damages if he breached the prohibition. There are two approaches to such a clause. On one view the contract is providing a choice to the employee to either perform the contract (by not establishing the rival business) or pay the agreed sum. If that is the correct construction of the agreement, then on the payment of the agreed sum an injunction will not be issued to restrain a breach of the contract because there is no absolute obligation to perform. The other approach to such a clause is that the contract does not provide a choice to the employee and the presence of the agreed damages clause does not necessarily mean that injunctive relief or specific performance is impermissible.190 The correct approach will be a question of construction in each case. A liquidated damages clause which provides a genuine agreed pre-estimate of the damages arising from the breach will be relevant when assessing the adequacy of damages.191 In some rare cases employment contracts indicate that they can be enforced by injunctive relief. In such cases the remedial choice made by the parties does not bind the court, but it will be a discretionary consideration weighing in favour of coercive relief.192

EQUITABLE DEFENCES AND OTHER DISCRETIONARY CONSIDERATIONS Readiness and willingness to perform 15.52 A plaintiff who seeks specific performance or an injunction must show that he or she has performed his or her essential contractual obligations in the past and is ready and willing to perform those essential obligations in the future.193 This proposition illustrates two maxims of

[page 973] equity: those who come to equity must come with clean hands and those who seek equity must do equity. A plaintiff need not be ready and willing to comply strictly with all of the future obligations under the contract. Readiness and willingness to comply with the substantial and essential obligations, and not the trivial and non-essential, will suffice.194 There are usually three contexts in which issues concerning the readiness and willingness of the plaintiff to perform the employment contract, and the past breaches of the contract, will arise. First, a former employer is less likely to obtain an injunction to enforce a restraint of trade covenant if it has breached an essential term of the employment contract or has repudiated the contract, as where the employer has wrongfully dismissed the former employee. In Measures Brothers Limited v Measures the employee was engaged under a fixed term contract that contained a restraint of trade clause preventing the employee competing with the employer after the termination. The employee was wrongfully dismissed before the expiration of the fixed term and commenced operating a rival business. The employer sought an injunction to enforce the restraint. The application failed because an employer seeking equitable relief by way of injunction ‘cannot obtain such relief unless they allege and prove that they have performed their part of the bargain hitherto’.195 By wrongfully dismissing the employee, the employer had breached the contract and disentitled itself to an injunction. 15.53 The same principles apply where the employer has committed a serious breach of the contract or repudiated the contract by failing to comply with an obligation to provide work.196 A wrongful dismissal [page 974] consisting of the giving of short or otherwise invalid notice by an employer will usually be a breach of an essential term of the contract.197 Sometimes the wrongfulness of the dismissal will arise from a trivial or non-serious breach.

One such example is the payment of wages in lieu of notice where such payments are not permitted by the contract. Such a payment will be a breach of the contract, but it may not be a serious breach. An employer who has wrongfully dismissed an employee in such a manner may be able to obtain an injunction preventing the employee breaching covenants in restraint of trade.198

Industrial action and inconsistent employment 15.54 The second context in which issues concerning readiness and willingness arise in employment is when an employee proposes to engage in industrial action and thereby refuse to perform all of the essential terms of the contract. The employee’s lack of readiness and willingness to perform weighs heavily against the grant of coercive relief against the employer.199 An injunction can be granted on terms and subject to conditions where there is doubt about the readiness and willingness of an employee to perform the contract.200 Such a course sometimes arises when appropriate undertakings are given as part of the price of obtaining an interlocutory injunction.201 Third, a wrongfully dismissed employee is no longer ready and willing to perform the contract if he or she takes up inconsistent employment. By obtaining alternative employment an employee may make it impossible to perform his or her contract. The weight of authority supports the view that the alternative employment must be inconsistent with the continued performance of the contract.202 The appointment by the employer of [page 975] a person to the employee’s position may similarly evidence a lack of readiness and willingness by the employer to perform the contract.203

Mutuality 15.55 The doctrine of mutuality provides a discretionary defence in an action for specific performance. Dr Spry defines its scope as follows:

The defence of lack of mutuality arises in proceedings for specific performance where, if the defendant were ordered to perform specifically his contractual obligations, he would not be himself sufficiently protected in view of such unperformed obligations of the plaintiff as might not be susceptible of subsequent specific enforcement and an order of specific performance would be unjust in all the circumstances.204

Pickering v Bishop of Ely provides an illustration of this doctrine in an employment context. Pickering was appointed to the office of receiver by the Bishop of Ely and his successors. The appointment was for the term of Pickering’s life. He collected certain rents and fees for the bishop and negotiated the renewal of certain leases. The employment progressed smoothly over 35 years and a number of bishops. In 1836 a new bishop was appointed. He wanted to replace Pickering with another receiver. Pickering sought specific performance of the contract.205 There was little doubt that an order for specific performance could not be obtained at the behest of the bishop to require Pickering to perform his duties. The doctrine of mutuality precluded Pickering obtaining a similar order against the bishop. As the Vice Chancellor stated: [If] the bishop could not, as plaintiff, compel Mr Pickering to perform specifically those duties and services which he is seeking to compel the bishop to permit him specifically to perform, the Court ought not, I apprehend, to

[page 976] aid Mr Pickering for such a purpose. … Thinking that the bishop suing Mr Pickering in this Court, for the purpose of compelling him to perform those duties and services, would be refused relief, I am [upon this ground of the opinion that this court can] do nothing for the Plaintiff.206

15.56 There are five points to be noted about the doctrine of mutuality and its application in employment law. First, the defence is based on considerations of hardship and injustice to the employer; in particular, that it would be unjust to require an employer to specifically perform the contract when the employee cannot be compelled to specifically perform his or her unperformed obligations. Second, considerations of mutuality will be particularly compelling when specific performance of a contract is sought, but tend to be less compelling when injunctions restraining the breach of a contract are sought.207 Third, the defence only arises when the employer could not secure specific performance of the employee’s obligations. The defence will fail if

the reason that the employer cannot secure an order for specific performance is due to laches, unfairness, hardship or lack of clean hands.208 It would be unconscionable to permit an employer to rely on its own iniquity or dilatoriness to deny the employee an effective remedy. Fourth, the relevant time for assessing whether the contract is mutually enforceable is the time at which the order for specific performance is made, not the time at which the contract is entered into.209 Fifth, in the United Kingdom statute dictates that a court cannot compel an employee to do any work by way of an order for specific performance.210 Coupled with the doctrine of mutuality, this legislative provision would appear to greatly restrict the scope for the power of the court to grant specific performance of employment contracts. There is no similar legislative provision in Australia.211 [page 977]

Constant supervision and uncertainty 15.57 The need for constant supervision of the order is a discretionary consideration that weighs against the making of a coercive order, particularly when the relief ordered is unclear, the contract enforced is complex or the order is likely to produce multiple applications to the court. This consideration is more telling when the plaintiff is seeking an order for specific performance or a mandatory injunction and tends to be less relevant when the plaintiff is seeking a prohibitory injunction.212 Until recently, equity adopted the principle that it would not ‘as a rule enforce contracts of personal service or any other contract the execution whereof would require continued superintendence by the court’.213 In recent years courts have retreated somewhat from strict adherence to this principle: ‘questions of degree rather than absolute restrictions on the scope of curial relief are involved’.214 Instead, the focus has shifted more directly to the series of considerations that courts have in mind when they speak of the problems associated with constant supervision. After reviewing the landmark judgment of the House of Lords in Argyll Stores,215 a majority of the High

Court in the MUA case stated: What is significant is the acceptance by the House of Lords that the concept of ‘constant supervision by the court’ by itself is no longer an effective or useful criterion for refusing a decree of specific performance. Rather, Lord Hoffmann placed stress on other propositions. First, a person who is subject to a mandatory order attended by contempt sanction (which ‘must realistically be seen as criminal in nature’) ought to know with precision what is required; and, second, the possibility of ‘repeated applications for rulings on compliance’ with orders requiring a party ‘to carry on an activity, such as running a business over a more or less extended period of time’ should be discouraged. …216

[page 978] 15.58 The prospect of repeated breaches of an order for specific performance of an employment contract ‘although an important consideration, ought not be allowed to negative a right’.217 Significant problems associated with constant supervision are more likely to arise where the court has ordered performance of long-term contracts. There are two features of most employment contracts that render these problems less acute. First, most employment contracts are terminable on notice. In such cases an order that the employer specifically perform the contract does not hinder the employer terminating the contract by giving such notice. Difficulties in supervising employment contracts terminable on notice are not the equivalent of the difficulties of supervising contracts that run for many decades.218 Second, the right of most employers to direct the employee to refrain from performing work and not attend the workplace allows an employer to avoid the possibility of further breaching an uncertain contract until further direction is provided by the court. There are, however, some employment contracts (such as long-term, fixed term contracts) in which problems associated with constant supervision may be more pressing. 15.59 There are three other points to note about the need for constant supervision of orders. First, ‘constant supervision’ does not refer to the need for the court to send its officers to supervise the performance of the contract. It refers to the need of the court to deal with applications alleging that the order has been breached.219 Second, where a statute manifests a policy that the contract be performed in specie, then less weight will be accorded to this factor.220 Third, the need to avoid constant supervision of the order will be

less significant when the coercive order is interlocutory and not final relief.221 The need for a clear and certain order is associated with the concept of constant supervision by the court. An order for specific performance may be inappropriate when the contract being enforced is too complex [page 979] and the obligations being enforced are too uncertain.222 Such complexity and uncertainty may lead to an unending series of applications to the court. Nowadays courts are used to dealing with multiple interlocutory applications in the course of a proceeding.223 In each case it is a question of degree, ‘although the former unwillingness of courts to order specific performance of complex obligations has much diminished’.224 Courts are reluctant to make uncertain coercive orders whose breach is punishable in contempt proceedings.225

Unclean hands, hardship and the effect on third parties Unclean hands226 15.60 The equitable defence of unclean hands is designed to prevent those who have behaved iniquitously from obtaining a discretionary remedy. It applies to an equitable claim, such as an application for an injunction or specific performance, and is not a defence to a claim for damages. When established the court may, in its discretion, refuse to grant the remedy. The defence focuses on the past conduct of the plaintiff and does not require a comparison of that conduct with the conduct of the defendant. The conduct of the plaintiff must exhibit depravity in a legal as well as in a moral sense. It may arise when the party misleads the court or lies to the defendant or the public. The conduct need not be fraudulent at law; it may arise when there is fraud in the equitable sense. It is not a public interest defence; the conduct must be directed at or done to the defendant. It need not

amount to conduct that is illegal, or in breach of contract or conduct that would establish a vitiating factor such as unconscionable dealing. There must be an immediate and direct relation between the conduct and the subject of the suit. [page 980]

Hardship227 15.61 Equitable relief may be refused due to the hardship caused by the order. When considering whether to grant an employer’s application for relief the court will consider the hardship as a consequence of making the order (to both the employee and any other relevant third parties) and weigh it against any hardship that the employer and others may suffer if the order is not granted. For example, in injunctions concerning restraining the breach of exclusive service and restraint of trade clauses the hardship suffered by the employee may include the atrophying of skills and the inability to earn a satisfactory income. The hardship suffered by the employer might include the loss of the services of a valued employee and the prospect that a rival will gain those services and thereby obtain an advantage.228 When determining whether or not to grant coercive relief the court will consider the effect of the order on third parties, including other employees, and the public generally.229 Any hardship suffered by the immediate family of an employee who is seeking an injunction is probably relevant.230 If the third parties are aligned to a party’s interests or are complicit in or had notice of the wrongdoing, a court is likely to have less regard for their rights than might otherwise be the case.231 Courts are reluctant to grant equitable relief if it interferes with contractual rights of innocent third parties, but will do so if appropriate.232 The liability of third parties complicit in the breach is discussed in 15.68–15.74. [page 981]

Delay, laches and abandonment of rights 15.62 Delay by the plaintiff in prosecuting its rights is an insufficient reason in itself to refuse to grant a permanent233 coercive order: ‘the bare fact of delay is not enough’.234 The delay will be relevant where it has caused prejudice to the defendant or third parties (‘laches’) or the delay is an abandonment of the rights of the plaintiff (‘acquiescence’).235 Delay may also be relevant in proving an estoppel.236 Laches is an equitable defence. It consists of delay coupled with prejudice to the defendant or third parties.237 It arises when the plaintiff has delayed the commencement or prosecution238 of a claim for specific performance or an injunction. The consequences of the prejudicial delay depend on a range of factors including the nature of the claim for relief, the length of the delay, whether the delay has affected the ability of the defendant to defend the claim and the acts of the parties during the period of the delay. The defence is more likely to succeed where the passage of time has made it more difficult for the defendant to present an effective defence. The length of the delay is measured from the time that the plaintiff knew of the facts that gave rise to the claim for relief.239 Equivocation by the plaintiff and failing to promptly pursue its rights weighs against the granting of relief, particularly when the defendant has changed its position to its prejudice during the period of delay.240 There is some uncertainty about the extent to which the defence of laches applies when the plaintiff seeks an injunction in aid of a statutory right.241 [page 982] 15.63 Delay by the plaintiff in prosecuting its rights may be relevant to the granting of relief where the delay is an abandonment of the rights of the plaintiff. The notion of abandonment of the rights of the plaintiff refers to a number of distinct legal doctrines. First, the delay may be evidence that the plaintiff has released a right of action against the defendant. Coercive relief cannot be awarded if the defendant proves that there has been such a release.242 Second, there may be an abandonment as the result of

acquiescence by the plaintiff. Acquiescence may occur when the plaintiff has represented to the defendant that it would not seek specific relief against the defendant.243 Where such a representation has been made, specific relief may as a matter of discretion be refused where it is unjust in all of the circumstances to allow the plaintiff to deviate from it. Third, the plaintiff’s delay is a non-determinative indication that tends to support the conclusion that it has elected to terminate, rather than affirm the contract, as is thereby precluded from pursuing coercive relief.244

Impossibility, illegality and futility 15.64 Specific performance will not be ordered if performance of the contract is impossible. Nor will an injunction be granted if compliance with the injunction is not possible. A court will not put a defendant at risk of imprisonment for contempt for failing to do the impossible.245 Where the ability of the defendant to comply with the order is uncertain, the degree of uncertainty is a relevant consideration going to the court’s discretion: see 15.59. Sometimes the performance of the contract will only be possible if a particular event occurs. In such cases the granting of the relief may be conditional on the occurrence of the event. A court will not order a defendant to perform a contractual obligation that is contrary to law.246 An order for specific performance will usually not be made if the order would be futile.247 This consideration focuses attention on the benefit that will be obtained by the plaintiff by the granting of the order. If the benefit is insubstantial or inconsequential, specific performance is less likely to be ordered. An injunction to prevent the disclosure of confidential [page 983] information that has entered the public domain is an exercise in futility.248 Courts are less inclined to grant an interlocutory injunction to restrain an employee using confidential information or competing with the employer for a very short time.249

COERCIVE RELIEF: OTHER MATTERS Election between specific performance and damages 15.65 A party cannot pursue inconsistent remedies. Specific performance and damages arising from the termination of a contract are inconsistent remedies. When an employee is wrongfully dismissed he or she must make an election between two inconsistent choices: either to affirm the contract and keep it on foot or to alternatively terminate the contract and seek damages arising from the termination. Where the employee elects to terminate and seek damages then the employee cannot later seek specific performance of the contract because, as Lord Wilberforce once stated, ‘the contract has gone — what is dead is dead’.250 Electing to pursue damages arising from the termination is an irrevocable election.251 The employee does not elect between the remedies by seeking damages in the alternative to specific performance. The effect of such a claim is that the employee is seeking to affirm the contract but, in the event that specific performance is not awarded, the employee elects to terminate the contract and recover damages.252 An employee who seeks an order for specific performance may be awarded damages in addition to, or in substitution for, that order under Lord Cairns’ Act.253

Pellucid terms of the relief 15.66 The terms of an injunction or order for specific performance must be clear and certain: ‘[It] is a cardinal rule that any injunction must be capable of being framed with sufficient precision so as to enable a person [page 984] injuncted to know what it is he is to be prevented from doing’.254 This consideration often arises in cases concerning the misuse of confidential information where the inability of an employer to be able to clearly define the information that is said to be confidential may result in the refusal of an

injunction.255 The breadth of the terms of an interlocutory injunction should be no more than is necessary to protect the interests of the plaintiff.256 An order for specific performance will, in most cases, require the performance of all of the defendant’s extant obligations in the contract. Such an order cannot be limited to only those obligations which are amenable to specific performance.257

Enforcement 15.67 It is a civil contempt to breach an injunction, an order for specific performance or an undertaking given to the court.258 Disobeying such an order or undertaking is not a criminal offence, though contempt proceedings ‘must realistically be seen as criminal in nature’ and the contempt must be proved beyond reasonable doubt.259 The jurisdiction exercised by courts over persons in contempt is both punitive and remedial. [page 985] As coercive remedies attract such heavy-handed means of enforcement, courts have been particularly vigilant to ensure that orders for specific performance and the terms of injunctions are clear and specific.260 It has sometimes been suggested that courts should be reluctant to order specific performance of employment contracts so as to avoid, as Professor Brodie puts it, ‘the distasteful scenario of an employee being imprisoned for refusing to work’.261 However, this has not prevented courts regularly issuing injunctions restraining industrial action by compelling employees to perform work.

EQUITABLE REMEDIES AGAINST THIRD PARTIES 15.68 Employees usually owe two equitable duties: a duty of confidence that applies to the use of confidential information during and after employment, and a fiduciary duty of fidelity that imposes an array of equitable obligations

discussed in 7.33. The issue of the availability of remedies against a third party often arises when an employee breaches an equitable obligation and thereby benefits a third party, such as a rival of the employer or the employee’s own family or company. The liability of the third party to account for the benefit received depends on whether the employee has breached the equitable duty of confidence or the equitable duty of fidelity.

Breach of confidence262 15.69 The liability of a third party to account for a benefit arising from a breach of confidence depends, in part, on the knowledge of the third party. When the third party knows that confidential information is conveyed by the employee in breach of duty then the obligation of confidence devolves to the third party.263 The knowledge of the third party can be actual or constructive. A former employer can restrain a new employer making use of the confidential information conveyed in breach of confidence by a former employee;264 or restrain a new company founded or promoted by [page 986] the employee that makes use of confidential information known to the employee;265 or restrain a new employer, knowing the employee is in the position to possess confidential information, who wilfully abstains from inquiring about the confidentiality of the information.266 15.70 There are many cases where a third party, such as a new employer, acquires confidential information without knowing that the information has been conveyed in breach of confidence. A third party may be restrained from making use of such confidential information after learning that the information was communicated in breach of confidence: even if a recipient of information ‘comes by it innocently, nevertheless once he gets to know that it was originally given in confidence, he can be restrained from breaking that confidence’.267 For example, a third party rival to the employer may innocently receive confidential information not knowing it is confidential. The rival is free to

make use of that information. But if the third party rival later becomes aware of the confidentiality of the information, continued use of the confidential information may be restrained.268 As Megarry J has stated: If an employer makes a confidential communication to an employee, then the employer may not only restrain the employee from divulging or using the confidence, but also may restrain a third party from divulging or using it if the third party has acquired it from the employee, even if [the third party] acquired it without notice of any impropriety.269

[page 987] It is not clear if the third party can resist an injunction when it has acquired the information bona fide (and thereby without notice) for value.270 In addition to any injunctive relief, a third party may also be ordered to deliver up and destroy property that it has acquired in breach of the duty of confidentiality and account for profits earned: see 15.134 and 15.120. No injunction will issue to prevent the third party gaining the benefit of the employee’s know how after the termination of employment, unless use of that know how is specifically restrained by a valid restraint of trade clause.271

Liability of third parties arising from breach of the equitable duty of fidelity 272 15.71 As discussed in more detail in 15.136–15.138, the employee will hold certain property on trust for the benefit of his or her employer as the result of an imposition of a constructive trust. This most commonly arises where an employee acquires a benefit in breach of the equitable duty of fidelity, such as through the diversion of the employer’s business, benefits acquired through the misuse of the employee’s position, the acquisition of a bribe or secret benefit, or as the result of an invention. When a constructive trust is raised the employee is the trustee; the employer is the beneficiary; and the benefit is the trust property. A stranger to the trust, such as the employer’s rival or the employee’s own company, does not become a constructive trustee merely because it is involved in the breach of trust.273 There are at least three relevant bases274 on

which the third party is liable to account to the employer as a result of the third party’s involvement in a breach of a fiduciary duty by an employee: knowingly assisting in the employee’s dishonest and fraudulent design; knowingly inducing or procuring a breach; [page 988] or knowingly receiving trust property: see 15.72–15.74. There is no overarching principle of accessorial liability that unites the three bases.275 Remedies available against a liable third party include injunctions, equitable compensation and an account of profits.276

Knowing assistance in a dishonest and fraudulent design 15.72 A third party is liable if it assists an employee with knowledge of the dishonest and fraudulent design on the part of the employee.277 For example, in Green v Bestobell Industries Pty Ltd the employee in breach of his fiduciary duty acquired a shelf company and used it to submit a successful tender in competition with his employer’s unsuccessful tender. The shelf company was liable to account for the profits acquired from the contract as it had knowingly assisted in the employee’s breach.278 The dishonest and fraudulent design includes a breach of trust or fiduciary duty. The breach must be both dishonest and fraudulent.279 Not every breach of a duty of fidelity will be in the execution of a dishonest and fraudulent design.280 There must be a dishonest state of mind. It is not enough to show that the third party’s state of mind was wrong, or misguided: ‘he or she must be shown to have been conscious that what was done transgressed ordinary standards of honest behaviour’.281 An allegation that a third party has assisted in such a fraud is a serious one and needs to be pleaded, proved and particularised to the requisite standard.282 The requisite knowledge of the design includes actual knowledge; wilful shutting of one’s eyes to the obvious; wilfully and recklessly failing to make such inquiries as an honest and reasonable person would make; and knowledge of circumstances which would indicate the facts

to an honest and reasonable person, even if the moral [page 989] obtuseness of a defendant prevented it from recognising the impropriety involved.283 For example, in Timber Engineering Co Pty Ltd v Anderson two employees, Anderson and Toy, used their time at work to divert their employer’s business to a company named TECO they had set up to compete with the employer. TECO was run by the employees and their respective wives. After six months of this deceit, the employees resigned their employment and started full time with TECO, which was by that time a flourishing business. The court held that the business of TECO was created in breach of fiduciary duties of the employees, that the business was held on a constructive trust for the benefit of the employer and that TECO, and the employees’ wives, had acquired benefits as part of a fraudulent and dishonest design in breach of the fiduciary duties.284

Knowingly inducing or procuring the breach 15.73 A third party is liable if it ‘knowingly induced or immediately procured breaches of duty by a trustee where the trustee has acted for no improper purpose’.285 There can be no knowing inducement if the third party does not know of the breach.286

Knowing receipt 15.74 A third party is liable as constructive trustee when trust property has been received by the third party with knowledge that such property was acquired by the employee in breach of a fiduciary duty.287 The requisite degree of knowledge is the same as that applied in the knowing assistance cases.288 The transfer of the property must be in breach of a [page 990]

fiduciary duty.289 Information is not trust property.290 Nor is property acquired by a third party using that information.291 Mere receipt of the trust property without the requisite knowledge of the breach is insufficient.292

INTERLOCUTORY INJUNCTIONS 15.75 An interlocutory injunction is an injunction that lasts until the final determination of the proceeding or until further order of the court. In an employment context interlocutory injunctions are usually sought in one of four contexts. First, where the employer has breached the contract by wrongfully dismissing an employee.293 Issues concerning the retention of trust and confidence in the employee and the adequacy of damages as a remedy often loom large in such interlocutory applications: see 15.35 and 15.83. Second, where the employer has breached the contract by unilaterally altering the employment benefits of the employee.294 Third, where the employee or former employee has breached, or is threatening to breach, the obligations of confidence or has breached a negative stipulation such as a restraint of trade clause.295 Fourth, where the employer has breached an antidiscrimination law.296 The purpose of an interlocutory injunction is to maintain the status quo between the parties until the trial of the action. It restrains wrongs and protects the processes of the court to ensure the effective exercise [page 991] of the jurisdiction invoked.297 An interlocutory injunction will not be granted where there is no underlying cause of action.298 Interlocutory injunctions are usually prohibitory, restraining the defendant from doing a particular thing until trial, but in rare circumstances may be mandatory: see 15.89. Interlocutory orders can be granted for specific performance.299 An interlocutory injunction may be obtained inter partes (on notice to the defendant) or ex parte.300

Maintaining the status quo 15.76 The purpose of an interlocutory injunction is to maintain the status quo between the parties until the trial of the action.301 It enables the court to do justice at the trial. The status quo preserved is the existing state of affairs. It is usually preserved by restoring the parties to their relative positions that existed at the time that the application for interlocutory relief was made.302 When it is just to do so a court will order that the status quo be preserved by restoring the state of affairs that existed at some other time, such as when the alleged wrong occurred.303 For example, in Walsh v Police Association the executive of the association passed a resolution removing the employee from his position on a ground that was not permitted by the contract. Mr Walsh sought an interlocutory injunction restraining the executive from calling a meeting of members to ratify its decision. The court rejected the argument that the status quo to be preserved was that existing at the time the application for interlocutory relief was made, being that state of affairs existing after the resolution was passed by the executive. Gillard J decided it would be [page 992] unjust for the employee if the employer could, by an unlawful act, obtain an advantage which could not be reversed because it was the state of the affairs existing when the proceeding commenced. As the issue was the lawfulness of the resolution to remove Mr Walsh, the relevant status quo preserved was the relationship between the parties prior to the passing of the impugned resolution.304

The test 15.77 To determine if an interlocutory injunction should be granted the court asks two questions. First, has the plaintiff made out a prima facie case. Second, does the balance of convenience favour the granting of the injunction.305

The prima facie case limb of the test 15.78 In American Cyanamid v Ethicon Ltd Lord Diplock suggested that the first limb of the test required the plaintiff to establish that there is a serious question to be tried.306 There is little difference between the ‘serious question to be tried’ test and the ‘prima facie case’ test, but to the extent they differ the latter is to be preferred.307 The first limb of the test is whether: … the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief.308

To establish a prima facie case the plaintiff need not prove that it will have greater than a 50% chance of success at trial. It is sufficient that the [page 993] plaintiff show a sufficient likelihood of success to justify the preservation of the status quo pending the trial. How strong the likelihood needs to be depends on ‘the nature of the rights [the plaintiff] asserts and the practical consequences likely to flow from the order he seeks’.309 The nature of the rights sought to be enforced is important. Where the employer is seeking to enforce an equitable obligation then damages at law, being unavailable, will be an inadequate remedy.310 The practical consequences likely to flow from an order (or the refusal to make an order) are particularly relevant in cases where the injunction is sought to maintain the confidentiality of information. There are often compelling reasons in favour of the granting of an interlocutory injunction in such cases due to the impossibility of remedying the breach.311 Where the public interest may be adversely affected by the grant of an injunction a higher probability of success may need to be shown.312 Courts also take a different approach when the practical effect of the interlocutory injunction would amount to final relief in favour of or against the plaintiff: see 15.87. It was once thought that a different test should be applied when an employer is seeking to enforce negative stipulations in a contract, such as covenants in restraint of trade. It is now settled that in such cases the ordinary principles are to be applied.313

15.79 To determine if the plaintiff has made out a prima facie case the court must make a preliminary assessment of the relative strengths of the parties’ cases. This does not mean that the court conducts a preliminary trial or makes a forecast of the ultimate result of the proceeding.314 Instead, the court examines the material presented in support and opposition to the application. To establish if there is a sufficient likelihood of success it is not necessary for the court to try to resolve conflicts of evidence315 or disputed questions of law.316 Nor is it usually appropriate to do so [page 994] at an interlocutory stage. For an interlocutory injunction to issue it is necessary for the plaintiff to show that there is a sufficient likelihood of success concerning the existence of the right and its contravention. No interlocutory injunction can issue if there is insufficient likelihood of success at trial.317 A prima facie case is not made out when a party is only able to show that it will probably be successful in obtaining damages at trial but not a final injunction.318

The balance of convenience limb of the test 15.80 An interlocutory injunction will only be granted if the balance of convenience favours the granting of an injunction: see 15.82. The court must determine whether granting or refusing the injunction poses the greatest risk of injustice: The principal dilemma about the grant of interlocutory injunctions, whether prohibitory or mandatory, is that there is by definition a risk that the court may make the ‘wrong’ decision, in the sense of granting an injunction to a party who fails to establish his right at the trial (or would fail if there was a trial) or alternatively, in failing to grant an injunction to a party who succeeds (or would succeed) at trial. A fundamental principle is therefore that the court should take whichever course appears to carry the lower risk of injustice if it should turn out to have been ‘wrong’ in the sense I have described.319

The relationship between the two limbs 15.81 An exact measurement of the required strength of the plaintiff’s prima

facie case is not necessary due to the manner in which the two limbs interact. How strong the likelihood of success at trial needs to be depends in part on where the balance of convenience lays. In Bullock v Federated Furnishing Trades Society of Australasia (No 2) Woodward J made the following observations about the relationship between the serious issue to be tried limb and the balance of convenience limb: … the two legs of the test need not be considered in isolation from each other. Thus an apparently strong claim may lead a court more readily to grant an injunction when the balance of convenience is fairly even.

[page 995] A more doubtful claim (which nevertheless raises ‘a serious question to be tried’) may still attract interlocutory relief if there is a marked balance of convenience in favour of it.320

The relative strengths of the parties’ cases will be relevant where the plaintiff seeks an interlocutory mandatory injunction and where the granting or refusal of the application for interlocutory relief will have the practical effect of ending a cause of action: see 15.87–15.89.

Balance of convenience considerations 15.82 An interlocutory injunction will not be granted unless the balance of convenience favours the granting of an injunction. The court must weigh the inconvenience of granting the injunction against the inconvenience that would occur if the injunction was not granted. It is not possible to enumerate all of the considerations taken into account when assessing the balance of convenience.321 In addition to the matters discussed below, considerations commonly weighed in the balance include the matters addressed in 15.35–15.64: the retention of sufficient trust and confidence in the employee; the readiness and willingness of the plaintiff to perform the contract; the need for constant supervision of the order; whether it would be impossible, illegal or futile to comply with the interlocutory injunction; whether there would be a lack of mutuality; and whether the order would give rise to hardship to the defendant.

Whether damages are an adequate remedy 15.83 When assessing where the balance of convenience lies the court will determine whether an award of damages is an adequate remedy for the plaintiff.322 This consideration is also relevant when assessing whether an undertaking as to damages from the plaintiff is likely to be an adequate remedy for a successful defendant.323 Damages will often be an adequate remedy for employees engaged under contracts terminable on notice or fixed term contracts. Interlocutory injunctions are rarely granted to restrain an employer wrongfully dismissing employees engaged under such contracts, unless the wrongful [page 996] dismissal might cause some other irremediable damage: see 15.45–15.47. When an employee is entitled to the protection of contractual job security provisions, damages will often be an inadequate remedy and this factor has been influential in decisions of courts to grant interlocutory relief restraining the breach of such provisions: see 15.22. 15.84 It will be rare for a court to grant an interlocutory injunction requiring the defendant to comply with the contract by paying a sum of money, such as wages, to the plaintiff. Damages will be often be an adequate remedy in such cases, but may not be adequate where employees and their families suffer financial hardship, embarrassment, distress or anxiety as the result of the nonpayment of wages.324 The disinclination of courts to award mandatory interlocutory injunctions militates against such injunctions. The adequacy of remedies other than damages may also be relevant in the granting of interlocutory relief, as it is in the granting of final relief.325

Other considerations 15.85 The effect on third parties of the granting (or refusal to grant) the interlocutory injunction is another relevant factor weighed in the balance of convenience.326 Such a consideration may weigh in favour of, or against, an interlocutory injunction restraining a breach of the contract by an employer.

The potential disruption to students in their VCE year was one of the reasons the court refused the interlocutory relief sought by a principal in one case whereas in another the potential disruption to patients if the employees were transferred was a reason in favour of the interlocutory injunction restraining the transfer.327 Bare delay, without prejudice to the defendant or third parties, is an insufficient reason to justify the refusal of final relief.328 However, bare delay in itself may be a reason to refuse to grant the relief when an interlocutory injunction is sought. An interlocutory injunction may be refused due to the failure of a plaintiff to seek the relief ‘with exemplary [page 997] promptitude’.329 There need be no proved hardship to the defendant arising from the delay. In Network Ten Ltd v Fulwood the employer discovered that the employee was intending to commence work for a rival employer in breach of her contract. The employer waited for about six weeks before applying for an interlocutory injunction. The defendant was unable to prove that she suffered any hardship arising from the delay. However, the delay was one of the reasons Young J refused to grant the relief: As an equitable defence, delay plus hardship equals laches. However, there is a separate principle that on an interlocutory injunction the Court in its discretion will refuse the injunction if there has been delay which is not adequately explained.330

Undertakings, final and interlocutory relief Undertakings 15.86 A plaintiff seeking an interlocutory injunction will ordinarily be required to give an undertaking as to damages. This is the usual price of an interlocutory injunction. A failure to proffer the undertaking will usually result in a refusal to grant the interlocutory injunction. The form of the undertaking varies from court to court. Most require that the plaintiff must undertake to submit to any order the court considers just for the payment of

compensation to any person adversely affected by the operation of the interlocutory order and to pay such compensation to the person referred to. If the plaintiff fails in its application for final injunctive relief, the undertaking itself is the source of the defendant’s or other person’s rights to recover damages suffered as the result of the grant of the interlocutory injunction.331 Undertakings are sometimes given to overcome specific problems that might otherwise lead to a refusal of an application for an interlocutory injunction, such as the undertaking by the MUA in the Patricks litigation not to engage in industrial action.332 When an employer seeks an interlocutory injunction to enforce a negative covenant it is not [page 998] uncommon to give undertakings to pay the employee, or provide work, to ensure the employee does not ‘starve’ or is not idle.333

Interlocutory relief that determines the dispute 15.87 A court will more readily grant an interlocutory injunction if the failure to grant the injunction would deny the plaintiff the opportunity of obtaining final relief. For example, if the interlocutory injunction was not granted in the Patricks litigation the employer proposed to proceed to dismiss the employees, divest itself of assets and have the relevant work performed by others. If the employer took these steps it would have been far more difficult for the court to have granted the final relief sought by the employees — reinstatement. As North J stated: If orders are not made now, it will be practically impossible for the Court to make such orders later because there will be so many irreversible changes flowing from the employees’ absence from the workplace. In a practical sense, the failure to grant orders now will deny the employees the possibility of the remedy which they seek and as to which they have raised a serious question to be tried. The passage of time and events would defeat this remedy.334

This can be a telling consideration when employees seek to enforce job security provisions in their contracts. In Irani v Southampton and South West Hampshire Area Health Authority the employee was contractually entitled to the benefits of a disciplinary procedure before being dismissed. The employer

gave him notice without following that procedure. Dr Irani sought an injunction restraining his employer from relying on that notice. If the interlocutory injunction was not granted, it appears that the notice would have had the effect of terminating the contract, making it far more difficult, if not impossible, for Dr Irani to obtain an order requiring his employer to comply with the contract.335 15.88 It is commonly the fate of many applications for injunctions that they never get past the interlocutory stage. The respective strengths of the parties’ cases will be an important consideration if the granting or refusal of the application for interlocutory relief will have the practical effect of [page 999] ending a cause of action.336 Applications are often made by employers for interlocutory injunctions to enforce restraint of trade clauses until trial by which time the period of restraint has expired. In such cases the interlocutory relief effectively grants final relief.337 This issue also arises in cases concerning industrial action by unions. The grant of an interlocutory injunction to restrain such action often has the practical effect of finalising the action in favour of the employer and delivering a telling alteration to the respective bargaining positions of the parties.338 This is a matter which is weighed when assessing where the balance of convenience lies.339

Interlocutory mandatory injunctions 15.89 Courts are more reluctant to grant interlocutory mandatory injunctions than they are to grant interlocutory prohibitory injunctions. Interlocutory mandatory injunctions usually require the defendant to do more than merely preserve the status quo. They require the defendant to take a positive step or to undo what he or she has done in the past. If the plaintiff is not successful at trial, the taking of the positive step in compliance with an interlocutory mandatory injunction is often a waste of time and money for the defendant. For this reason:

… it has long been the case that interlocutory mandatory injunctions would be more likely to issue where the defendant was compelled, not to embark upon a fresh course of conduct, but … to revert to a course of conduct pursued before the occurrence of the acts or omissions that provoked the litigation.340

The guiding principle in determining if an interlocutory injunction should be granted, whether it be a prohibitory or mandatory injunction, is that the court should take whichever course carries the lower risk of [page 1000] injustice in the event that the party who claims the injunction fails to establish his or her right at trial.341

Springboard or headstart doctrine 15.90 The springboard or headstart doctrine is a modification of the ordinary principles applicable to the granting of interim injunctions concerning the use of confidential information. Ordinarily an injunction will not issue to restrain the use by a former employee of confidential information that has lost its confidentiality. This rule is modified when a former employee, subject to an obligation of confidence, gains a headstart on other competitors by virtue of receiving the information in a relationship of confidence: … the essence of this branch of the law … is that [an employee] who has obtained information in confidence is not allowed to use it as a spring-board for activities detrimental to [the employer] who made the confidential communication, and spring-board it remains even when all the features have been published or can be ascertained by actual inspection by any member of the public. … [The employee] still has a long start over any member of the public … [The employee] must be placed under a special disability in the field of competition in order to ensure that he does not get an unfair start …342

A springboard injunction prevents the employee gaining an unfair headstart by restraining the employee’s use of the formerly secret information. The advantage the former employee enjoys dissipates over time; the springboard does not last forever. An injunction to prevent an employee’s headstart needs to be moulded to remove the gain acquired by the misuse of the confidential information.343

[page 1001] Determining the appropriate length of an injunction depends on a range of factors, including the extent the information is easily accessible to the public, the use that was made of the confidential information, and the length of time it would take a committed competitor to develop a marketable product from the publicly available information.344 It is doubtful whether the headstart doctrine applies beyond the field of confidential information, such as an injunction to restrain an employee gaining a headstart by competing with the employer in breach of a restraint of trade clause.345 There have also been doubts about whether the headstart doctrine would permit an injunction to restrain an employee working for a rival of the employer.346 By way of comment, the springboard principle may in some cases seriously diminish the value of the employee’s know-how and personal skills. The law recognises the right of an employee to make full use of his or her knowledge, skill and experience, but not confidential information. The headstart gained by the employee is often little more than using that permissible range of skills and applying it to information that is no longer confidential.347

DECLARATIONS Introduction and general considerations 15.91 A declaratory judgment is an order of a court pronouncing upon the existence or non-existence of a legal state of affairs. It resolves an existing controversy between the parties involving their legal rights by making a binding order that states with precision the respective legal positions of the parties.348 A right in this sense includes equitable, legal and statutory rights, immunities, powers and privileges, but does not include an entitlement to a purely discretionary benefit.349 [page 1002]

Declaratory relief is a discretionary remedy. When dealing with private sector employment, courts have been reluctant to exercise this discretion to grant declarations concerning the validity of dismissals for reasons that mirror the reluctance to grant specific performance of employment contracts. Over the last few decades this traditional reluctance has waned: see 15.96. However, a declaration that a purported dismissal is invalid is usually refused as a matter of discretion as it will not serve a useful purpose: see 15.98. Declarations will serve a useful purpose for dismissed employees where it will assist the employee to acquire a collateral benefit, such as retaining union membership, obtaining work in an industry or where the employee is entitled to the benefit of a contractual job security clause. Declarations of the contractual rights of the parties other than those rights connected with a dismissal will also often be useful and are commonly made: see 15.99 and 15.100. The approach of the law to declarations concerning public sector employment is different: see 15.104–15.113. Declarations may be available where other equitable relief is refused. They may be granted where the plaintiff has suffered a wrong but there is no other equitable or legal remedy available to the plaintiff. They provide a degree of vindication.350 Declarations also permit the parties to discover the true legal position between them and adjust their position accordingly.351

History and jurisdictional basis 15.92 Historically, there has been a difference between the jurisdiction of courts to issue declarations between private subjects (‘private law declarations’) and their jurisdiction to issue declarations in proceedings to which the Crown or its emanations is a party (‘public law declarations’).352 In the former case, a declaration is a discretionary, statutory remedy whereas public law declarations are an equitable remedy. In both cases, when exercising their discretion courts take into account the same or similar discretionary considerations and defences as are taken into account when determining whether to grant equitable remedies.353 [page 1003]

Discretionary nature of the remedy 15.93 As a discretionary remedy declaratory judgments do not issue as of right, unlike an award of damages. Provided that a court has jurisdiction to hear the claim for relief, there is no limit on the power of the court to grant a declaration, except such limits as the court may in its discretion impose, and any statutory impediments.354 For many years courts would only sparingly exercise their discretion in favour of granting a declaration.355 The modern approach is more generous to plaintiffs.356 The grant or denial of the relief is made by the court after taking into account a range of discretionary considerations. Some of these considerations are discussed below in 15.98–15.103. The weight given to different considerations will vary from case to case.

Declarations and other remedies 15.94 A declaration may be granted as the sole relief in an action. The court will usually not refuse to grant a declaration on the ground that the plaintiff should have sought an injunction, an order for specific performance or prerogative relief: ‘it is normally not for the court, and certainly not for the defendant, to insist that the plaintiff claim a remedy more potent and drastic than the one with which he is content’.357 Other remedies may be granted in addition to a declaration. It is common for a court to declare the rights of an employee and to grant coercive relief to give effect to those rights. Where a plaintiff is entitled to a declaration that a purported dismissal was a nullity and the contract of employment continues to subsist, damages may be awarded up until the time of the declaration. For example, in Vine v National Dock Labour Board, in November 1952 the employee was dismissed in breach of the relevant statutory provisions. In 1955 the dismissal was declared to be a nullity. The employee was entitled to damages between 1952 and 1955.358 [page 1004] Courts are careful, however, to avoid granting declarations that would

amount to specific performance or would give the plaintiff an entitlement to damages (or even wages) to which he or she is not entitled. There is a difference between a declaration that a purported termination was a nullity and a declaration that the employment of the employee continues to subsist. The former type of declaration sets at nought the attempt to terminate the employment. The latter type of declaration is akin to specific performance. The courts are more reluctant to grant such a declaration, even in public sector employment cases.359

Statutory remedies and declarations 15.95 The existence of a statutory remedy may have a number of effects on the power or the exercise of the discretion to grant a declaration. A statute may create a particular statutory remedy in relation to the wrong and thereby evince an intention of excluding the jurisdiction of the court to grant declarations about that matter. A declaration may not be made when parliament has by plain words enacted that the statutory remedy shall be the sole remedy available.360 The existence of an alternative statutory remedy is a discretionary consideration weighing against the granting of a declaration. This consideration is particularly relevant when parliament has established a specialist tribunal to fully investigate and determine the matters in dispute and has indicated that the tribunal is the preferable means of determining such matters.361 This consideration has been significant in a number of cases where the parties, or their representative unions, have conducted concurrent proceedings in industrial commissions and courts about the same subject matter.362 [page 1005] When a court is exercising its supervisory jurisdiction over inferior tribunals, declaratory relief may be refused to an employee who has not exhausted the available statutory appeals procedures.363 This is a discretionary consideration and may be less relevant when, for example, the appeal procedure is too burdensome or inconvenient for the employee, or

would only provide inadequate relief.364

Declarations concerning dismissals in private sector employment 15.96 Until the late twentieth century courts adopted the view that they would not grant a declaration that a wrongful dismissal of a private sector employee was invalid or that a contract continued to subsist after a wrongful dismissal.365 This accorded with the normal rule that the only remedy available for a wrongfully dismissed employee was damages, not a declaration or specific performance or an injunction.366 In the latter half of the twentieth century courts began to acknowledge that, in some circumstances, a private law declaration could be made.367 Courts will no longer set their faces against granting a declaration concerning a contract of employment.368 15.97 The reasons usually advanced to support the traditional rule against declarations are largely the same as those that supported the traditional rule against specific performance: see 15.15–15.18. The principal reason is a reluctance to compel service by the parties. A court will generally not grant a declaration that has the effect of specifically enforcing a contract unless the circumstances exist that justify making an order for specific performance.369 Specific performance, otherwise unobtainable, should not be able to be obtained indirectly through the [page 1006] making of a declaration. A declaration that a contract continues to subsist has the effect of specifically enforcing a contract, whereas a declaration that a purported dismissal was void may not.370 As discussed in 15.100, these objections to the making of a declaration are inapplicable when the declaration concerns matters other than the service of the employee. One of the reasons given to support the traditional rule against declarations was that a wrongful dismissal did have some effect in law and so a

declaration that a wrongful dismissal was a nullity would not be made. Under the discarded unilateral termination theory a wrongful dismissal did terminate the employment contract and consequently a court would not make a declaration that a wrongful dismissal was a nullity.371 The unilateral termination theory has been rejected in Australia and, as a consequence, a declaration may be made that the employment contract continues to subsist despite the wrongful dismissal by the employer and despite the termination of the employment relationship.

The futility and utility of declarations 15.98 A declaration will not be made by a court unless it has some practical utility.372 There is considerable overlap between the need for the declaration to serve a practical purpose and the requirement that it not concern theoretical or hypothetical issues: see 15.102. In many cases in which there has been a wrongful dismissal, a declaration that the dismissal was wrongful will usually have no utility and will not be made. The lack of utility arises for two reasons. First, if the court orders specific performance or an injunction then a declaration supplementing those more direct remedies will be unnecessary. Second, if the court is not prepared to order specific performance or an injunction then a declaration that the dismissal is unlawful usually serves no useful purpose. A wrongful dismissal terminates the employment relationship, though not the employment contract. An employee does not earn wages after the wrongful dismissal. A declaration that the wrongful dismissal was in breach of contract or was otherwise unlawful will not in itself result in the employee earning wages.373 Such a declaration will often serve no useful [page 1007] purpose to remedy past wrongs. Although it has sometimes been granted, it is somewhat unreal to declare a wrongful dismissal a nullity when the employee has for many years ceased to perform work for the employer.374 A declaration will not serve a useful purpose when the parties are unable to

agree upon the consequences of the declaration and the court is unable, or unwilling, to grant consequential relief.375 For example, in Gregory v Philip Morris the employer wrongful dismissed the employee. The employee did not elect to terminate and so the contract remained on foot. The court was not prepared to order specific performance of the contract. The dismissal had occurred in the context of considerable industrial tensions between the employee, his co-workers, various union officers and the employer. The court was not prepared to make a declaration concerning the validity of the dismissal that would serve no useful purpose and the effect of which would be uncertain.376

Utility of declarations concerning dismissals 15.99 In at least three types of cases involving a dismissal a declaration will be useful. First, a wrongful dismissal may not only have the effect of terminating the employment, but it may partially or legally affect the right or ability of the employee to obtain employment in the future. A court is more likely to make a declaration of invalidity when a dismissal disables the employee from future performance or hinders his or her future career prospects.377 Second, the employee may be entitled to the benefit of a contractual job security clause, such as a guarantee of permanent employment or a clause requiring the employer to follow certain procedures before terminating the employment. In such cases courts are more likely to grant a declaration that a wrongful dismissal is invalid and, in appropriate cases, make ancillary coercive orders.378 Third, equity takes a different [page 1008] approach when dealing with the validity of the dismissal of employees and office holders engaged under trusts and by associations.379

Declarations concerning employment benefits 15.100 The traditional disinclination of courts to grant declaratory relief

concerning the dismissal or continued service of an employee does not apply when a declaration is sought concerning other employment benefits of an employee. Considerations of trust and confidence and the personal nature of the employment are usually not relevant, or less relevant, when granting such declarations. Courts have granted declarations about a broad range of employment benefits, including entitlements to leave,380 entitlements to remuneration,381 entitlements to superannuation382 and rights under statutes regulating employment.383 An invalid suspension will often be cured by a court granting equitable relief, either in the form of an injunction or a declaration.384

Other discretionary considerations 15.101 There is a very broad range of relevant discretionary considerations that may be taken into account to grant or refuse a declaration. Relevant matters can extend from the legal to the ethical.385

Theoretical and hypothetical issues 15.102 Courts usually decline to make a declaration concerning hypothetical or theoretical issues.386 This is a discretionary consideration, [page 1009] not a jurisdictional bar to relief. The matter arises in a number of contexts in employment law. There must be a dispute between the parties. In Mellstrom v Gardner the court refused to grant a declaration sought by an employee that a covenant restraining him from canvassing customers was invalid. The employee had made no attempt to canvass customers and had no intention of doing so in the future.387 The dispute need not be about financially significant matters. In Marshall v English Electric Co Ltd the employee was suspended from work and sought damages of £2 12s and a declaration concerning the invalidity of the suspension. Despite the ‘trifling’ sums involved, the court made the declarations as it was a matter of ‘immense importance’ to the employer.388

A court will not grant a declaration about a matter that has ceased to be of practical significance. In Howard v Pickford Tool Co Ltd the employer was alleged to have repudiated the contract. The employee elected to affirm but sought a declaration that the employer’s conduct amounted to a repudiation. Given the affirmation, a declaration would confer no right on the employee to terminate. Nor would it confer a right to damages. The application was refused because whether the employer’s conduct amounted to a repudiation was entirely academic.389 Declarations may be made about the legality of the proposed conduct of a party.390 When a party is entitled to damages then the appropriate sum should be awarded; there is no utility in granting a declaration that an employee is entitled to damages.391 The court is not bound to make a declaration in the terms sought by one or both of the parties. A declaration resolves a controversy; it is not made simply because one party has chosen to admit a matter. The court may refuse to make a declaration because the dispute between the parties is unconnected to any facts. Courts often refuse to make a declaration on the basis of admissions from the defendant, in default of a defence or in the absence of a contest about the issue the subject of the declaration.392 [page 1010]

Negative declarations 15.103 A declaration may be made in a positive or negative form. A negative declaration seeks to establish that the defendant has no right or power to take a certain step or that the plaintiff has no obligation in relation to a particular matter. Employees sometimes seek negative declarations when the employers have threatened to exercise a right or power to terminate a contract but have not yet done so. In the absence of the exercise of the right or power it is sometimes difficult for the employee to obtain injunctive relief, although a quia timet injunction may be obtained if it is sufficiently clear that the breach of the contract is imminent.393 Courts will be very careful to scrutinise claims for a negative declaration for a number of reasons.394 First, it is common for such claims to be refused because the issue raised is theoretical. Legal proceedings may not be

necessary until the right or power is exercised by the defendant. To seek clarification of the legality of the threatened exercise of those rights and powers may be a waste of time and money. Second, by seeking a negative declaration that the defendant has no right or power to take a threatened action the plaintiff forces the hand of a defendant. The plaintiff thereby offends against the principle that ordinarily a person who wishes to take legal proceedings may choose the time at which to commence the proceedings.395 This is a discretionary consideration that weighs against the granting of negative declarations. Other considerations may act as a sufficient counterweight, such as the need for the legal position between the parties to be clarified.396

EQUITABLE AND PREROGATIVE RELIEF AND PUBLIC SECTOR EMPLOYMENT 15.104 The traditional reticence of courts to grant equitable relief concerning merely contractual employment rights gives way to different considerations when a court is judicially reviewing decisions of public sector employers. The power of courts to judicially review decisions has two sources: judicial review under statutory schemes such as the [page 1011] Administrative Decisions (Judicial Review) Act 1977 (Cth) (the ADJR Act)397 and judicial review under the common law. When the Crown398 or a statutory body takes action under a statute it must be done in accordance with the statute. An employee affected by the decision may seek a declaration, and other relief, concerning the legality of the step taken.399 To be the subject of judicial review the action must have a sufficient connection with the statute; it cannot merely be the exercise by a public sector employer of a contractual right. What constitutes a sufficient connection with the statute depends on whether judicial review is sought under the ADJR Act or the common law: see 15.105 and 15.106. The decisions that are able to be reviewed, the grounds of review and the

remedies that may be granted differ according to whether judicial review is sought under the common law or under statute. As a general proposition, where the Crown or a statutory body has contravened a right granted to the employee by a statute then the employee may obtain a declaration that the act is invalid. Where necessary, an injunction may also be granted to restrain the body acting acting in an invalid manner.

Statutory, prerogative and equitable relief in public sector employment Relief under the ADJR Act: a decision under an enactment 15.105 The ADJR Act introduces a simplified procedure for obtaining judicial review and alters the common law grounds of review.400 Judicial review of under the ADJR Act is only available of decisions made by certain Commonwealth bodies ‘under an enactment’. Public sector employers operate in the milieu of the general law. A statute may grant the power to do an act, such as dismiss an employee, but it does not necessarily mean an employer’s decision to dismiss was made under the enactment. A grant of authority to do that which under the general law [page 1012] the employer has authority to do is not sufficient. To determine if the decision is made under an enactment the questions that must be asked are: … does the decision in question derive from the enactment the capacity to affect legal rights and obligations? Are legal rights and obligations affected not under the general law but by virtue of the statute? If the decision derives its capacity to bind from contract or some other private law source, then the decision is not ‘made under’ the enactment in question … a statutory grant of a bare capacity to contract does not suffice to endow subsequent contracts with the character of having been made under that enactment … The power to affect the other party’s rights and obligations will be derived not from the enactment but from such agreement as has been made between the parties. A decision to enter into a contract would have no legal effect without the consent of the other party; the agreement between the parties is the origin of the rights and liabilities as between the parties.401

A decision made by a public sector body to exercise a power granted by a

contract or arising under the general law to terminate a contract or give notice will not be made under an enactment.402

Relief under the common law 15.106 Under the common law superior courts have an inherent supervisory jurisdiction to issue prerogative remedies against inferior courts, tribunals and other administrators of the law.403 This jurisdiction applies to reviewing decisions of public sector employers in their exercise of governmental power. The remedies include the prerogative writs of certiorari, prohibition, mandamus and the remedies of injunction and declaration. Certiorari quashes an unlawful decision that affects the employee. Prohibition stops the unlawfulness affecting the employee. Mandamus compels the performance of a lawful duty.404 The availability of prerogative relief is subject to a series of technical requirements.405 [page 1013] There is a complex interaction between the prerogative writs, injunctions and declarations.406 In some cases in the United Kingdom it has been held that it is necessary to seek prerogative relief rather than an injunction and declaration. An injunction may be granted or a declaration made when prerogative relief is unavailable.407 The statutory rights of employees to appeal or review decisions affecting their employment should generally be exhausted before seeking prerogative or equitable relief: ‘the principle that if other means of address are conveniently and effectively available to a party they ought ordinarily to be used before resort to judicial review’.408 A court may exercise a discretion to refrain from granting the relief if these other rights are not exhausted.409 15.107 Whether an employee is able to seek an injunction or declaration concerning the lawfulness of the employer’s action depends, first, on whether the decision is justiciable — that is, able to reviewed — by a court. The justiciability of a decision depends on whether the judicial review is sought under the general law or statute. The issue rarely arises in the context of

employment cases as in almost all cases the decision will meet this requirement.410 Second, the employee must have standing to seek the relief. The test for standing differs according to the relief sought. To seek a declaration an employee must have a real interest in the dispute. One means of establishing this interest is to show that some private right of the employee has been interfered with.411 Another means of establishing this interest is to show that the action of the statutory body caused special damage peculiar to the employee or the employee has a special interest in the action.412 This requirement will almost always [page 1014] be met when the employee suffers some detriment due to the action of the employer.413

Connection between the statute and the breach 15.108 Third, the employer’s action the subject of the application for an injunction or declaration must have a sufficient connection with the statute: there must be a public law element to the action. The cases draw a distinction between the enforcement of a mere contractual right and a right granted by statute. A mere contractual right is granted by the contract between the parties and is subject to the ordinary principles governing the grant of equitable relief discussed in 15.35–15.64. In contrast, a statutory right is granted by a statute and draws its force from the will of parliament. It is difficult to define precisely what is required to establish the public law element.414 The matter raises questions similar to whether the decision of the employer is made ‘under an enactment’ for the purposes of the ADJR Act.415 Different tests have been used to define the necessary public law element under the common law. It is clear that there will be a sufficient public law element when there is a wrongful removal from a public office.416 In the case of non-office holders, it has been said the public law element is established when the employee’s right the subject of the application is ‘fortified by statute’.417 Other formulations include that a public law element exists when

the source of the employer’s power to do the act is found in statute and not in the contract.418 [page 1015] In Malloch v Aberdeen Corporation, a case concerning a teacher, Lord Wilberforce stated that in cases in which there is merely a contractual right in issue: … there is no element of public employment or service, no support by statute, nothing in the nature of an office or a status which is capable of protection. If any of these elements exist, then, in my opinion, whatever the terminology used, and even though in some inter partes aspects the relationship may be called that of master and servant, there may be essential procedural requirements to be observed, and failure to observe them may result in a dismissal being declared to be void.419

15.109 The necessary public law element is not established only by the fact that the powers of the statutory body concerned or were connected with employment.420 Neither the seniority of the employment nor the interest of the public in the performance of the employment is a crucial factor.421 The incorporation of a statutory instrument into a contract of employment does not mean the rights created have the necessary public law element.422 Granting the employer the statutory power to enter into a contract does not mean the resulting contract grants a statutory right, as opposed to a merely contractual right.423 A limitation imposed by statute on the terms that can be agreed between employer and employee does not mean that an action to enforce a contract complying with the statutory limitation has the necessary public law element.424 It is suggested that the focus should remain on the right the employee is enforcing. Some rights of public servants will be created by statute and seeking a remedy arising from the contravention may have a public law element even when other rights of the employee, created by contract, lack that element. Care must be taken in applying decisions from the United Kingdom on this point. Crown servants in Australia are employees; Crown servants in the United Kingdom are not. In the absence of a contract of employment

[page 1016] it is easier to establish a public law element in the United Kingdom as there is no contractual foundation to the relationship.425

Grounds of review 15.110 All statutory powers have limits. Employers exercising statutory powers must do so in accordance with the limits imposed by the statute. An injunction or declaration may be granted against an employer who transgresses those limits. In such cases a declaration remains a discretionary remedy and may be refused if there exist sufficiently compelling reasons not to grant it.426 An injunction may issue to prevent an employer dismissing or suspending an employee in contravention of a statute.427 A declaration is the ordinary form of relief against the Crown, rather than an injunction. It is not necessary for the Crown to be compelled by injunction to implement the decision of the court.428 15.111 There are a wide variety of contraventions of statutes that may be the subject of injunctive and declaratory relief.429 Statutes sometimes exhaustively define the grounds on which employment can be terminated. An injunction can issue to restrain an employer dismissing an employee on other grounds.430 If the employer is given the power to dismiss an employee after providing procedural fairness, then an injunction or declaration may be granted when the employee is not provided procedural fairness.431 When a statute establishes a procedure to be followed before an act is done, then the failure to follow the procedure can be the subject [page 1017] of a declaration of invalidity and, where appropriate, the subject of an injunction.432 A decision may be ultra vires because it does not lie within the powers of the statutory body. For example, in Price v Sunderland Corporation the

employer gave notice to the employees because they refused to obey an order that they collect milk money from children. The employer was not empowered to make that order. The court made a declaration that the order made by the employer was ultra vires.433 A declaration may be granted when the wrong person or body purports to exercise a power to the detriment of the employee. In Vine v National Dock Labour Board the statute entrusted disciplinary functions to a board which then invalidly delegated that function to a committee. The exercise of the power to dismiss by the committee was a breach of the statute and therefore invalid.434 When an employer is exercising a statutory power to the detriment of the employee it can only properly do so for the purpose for which the power was created. A decision to dismiss that has been exercised in bad faith or from corrupt motives is inoperative. When such an improper motive is proved then a declaration concerning the invalidity of the act may issue.435

Effect of a wrongful removal or suspension 15.112 When a statutory body acts invalidly in purporting to dismiss or suspend an employee, its act can have a number of effects. It is sometimes said, or declared, that a wrongful removal or suspension in breach of a statute is void, invalid or of no effect.436 The invalid act is [page 1018] not the act of the statutory body and, as such, cannot determine the relationship between the body and the employee.437 The Privy Council has recently advised: It is a settled principle of law that if a public authority purports to dismiss the holder of a public office in excess of its powers, or in breach of natural justice, or unlawfully (categories which overlap), the dismissal is, as between the public authority and the office-holder, null, void and without legal effect, at any rate once a court of competent jurisdiction so declares or orders. Thus the office-holder remains in office, entitled to the remuneration attaching to such office, so long as he remains ready, willing and able to render the service required of him, until his tenure of office is lawfully brought to an end by resignation or lawful dismissal.438

15.113 There are difficulties in the application of these principles when there

is a long period between the date of a purported dismissal and the date the court declares the dismissal ‘void’. To account for these difficulties a court may, in the exercise of its discretion, make some adjustment to the rights of the parties. For example, it may make a declaration that the employer’s action was illegal, but specify that the employee should not receive the whole of the remuneration between the illegal dismissal and the date of the declaration or injunction.439 Further, an act that is void may nevertheless have some effect on the parties and their legal rights. As opposed to some office holders, employees in the public sector ordinarily earn wages by performing service: see 9.9 and 9.13–9.16. A wrongful removal or suspension prevents the employee providing service as it often terminates the relationship of employment even if it does not terminate the contract.440 Consequently, even when the dismissal or suspension is void a wrongfully removed or suspended employee might not earn wages during the period of the [page 1019] removal or suspension. The wrongful removal or suspension will usually be a breach of the contract; the employee will be entitled to damages for that breach; and the damages will ordinarily be equal to the remuneration that would have been earned if the service had been performed, subject to any deductions for mitigated loss.441 Sometimes the contract, or a statute or industrial instrument, provides a right to be paid remuneration during the period of a wrongful removal or suspension. In such cases the employee will earn remuneration and will not simply acquire the right to damages.442

MONETARY AND OTHER REMEDIES IN EQUITY443 Introduction and overview

15.114 The principles governing an award of damages for breach of contract under the common law are discussed in Chapter 14. In this section three monetary awards in equity are discussed: equitable compensation, damages under Lord Cairns’ Act444 and an account of profits. The former two heads are called damages in equity. Broadly speaking, equitable compensation may be awarded when current or former employees have breached fiduciary obligations or are in breach of a duty of confidence: see 15.115. Damages under Lord Cairns’ Act usually arise when an employer unsuccessfully seeks specific relief to enforce an employment contract: see 15.117–15.119. [page 1020] Damages in equity are compensatory, unlike an account of profit. The purpose of equitable compensation is to restore to the employer the money of which it has been deprived as the result of the breach. Damages under Lord Cairns’ Act are awarded in substitution for, or in addition to, an order for specific performance or an injunction. Such damages are compensatory in nature and, with some exceptions, are assessed in a similar way to common law damages: see 15.118. Damages in equity and an account of profits are alternative remedies.445 Generally an election between an account of profits and alternative remedies need not be made before entering judgment, although occasionally the court will insist on an earlier election by an employer.446

Equitable compensation 15.115 Damages at law are not awarded as a remedy for breaches of fiduciary obligations. Instead, courts order that fiduciaries restore ‘the actual money or thing, or value of the thing, of which the cheated party had been cheated’.447 Such an order is called equitable compensation. Equitable compensation may be awarded against employees who, for example, have misused confidential information, diverted business from their employer or received secret commissions.448 The power to award equitable compensation derives from the inherent power of the court exercising equitable jurisdiction over fiduciaries.449 That power does not depend on the existence of a breach of the

contract, although in most cases employees who breach fiduciary duties will also be in breach of their co-existent and largely co-extensive contractual and equitable [page 1021] duties of fidelity. Equitable compensation can also be awarded in an action for breach of confidence.450 The object of an order for equitable compensation is ‘to restore persons who have suffered loss to the position in which they would have been if there had been no breach of the equitable obligation’.451 This measure of compensation is relatively easy to apply when the breach of the fiduciary duty consists of the taking of a sum of money or a specific asset. It is considerably more difficult to apply when the employee has misused confidential information, diverted a business opportunity or committed a breach of the array of other aspects of the duty of fidelity.452 Equitable compensation may be awarded for non-economic loss, loss of a chance and for mental distress.453 15.116 There must be a causal connection between the compensation ordered and the loss suffered: the question is whether the loss was caused by reason of the breach.454 For example, in Deeson Heavy Haulage Pty Ltd v Cox three days before the end of his service Mr Cox, in breach of his fiduciary duty, solicited the custom of one of the employer’s customers. As a result the customer engaged him the day after his termination for one day’s work and he earned $120. Mr Cox then submitted bids for subsequent jobs, the customer became a regular and he earned $600,000 from the customer over the following years — amounts that the employer argued it would have earned but for the breach. The court concluded that there was an insufficient causal link between the employee’s initial breach and the employer’s continuing loss and awarded compensation of $120.455 [page 1022]

Principles that apply to limit damages at common law (such as remoteness and mitigation) do not have direct application to the award of equitable compensation.456 However, similar considerations are relevant in two ways. First, as equitable compensation is a discretionary remedy the ordinary considerations of clean hands, fairness and oppression are relevant in determining if an award of equitable compensation will be granted at all: see 15.55–15.64. Second, in the exercise of its discretion a court may limit the quantum of the award and fashion the remedy to reflect the fairness and justice of the case.457 In making such a discretionary judgment the court may consider matters similar to issues of remoteness of damage and the steps taken to mitigate the damage.

Damages under Lord Cairns’ Act 15.117 Until the passing of Lord Cairns’ Act in 1858 there was a significant impediment to the granting of damages in an equity suit. With some minor exceptions,458 the Court of Chancery could not, or would not as a matter of discretion,459 grant damages in addition to or in lieu of an order for specific performance or an injunction to enforce legal rights. The main object of Lord Cairns’ Act is ‘to enable the Court of Chancery to do “complete justice” between parties by awarding damages in those cases in which it had formerly refused equitable relief in respect of a legal right’.460 The principal effect of the Act is that where the court has the jurisdiction to grant an injunction restraining a breach of a contract (or order the specific performance of a contract) it may award damages to the party injured either in addition to or in substitution for the injunction or specific performance. Lord Cairns’ Act has been enacted in various forms in each state and territory.461 The employer need not seek [page 1023] an injunction to recover damages under Lord Cairns’ Act.462 Damages are unavailable if the relief sought by the employer (being specific performance or an injunction) is refused due to jurisdictional rather than discretionary

considerations.463

Comparison with damages at common law 15.118 There are great similarities and some differences between damages awarded under Lord Cairns’ Act and common law damages. Lord Wilberforce has observed that there is in Lord Cairns’ Act ‘no warrant for the court awarding damages differently from common law damages’.464 This position is not universally adopted.465 Damages under Lord Cairns’ Act have a compensatory purpose, like damages at common law.466 Further, equity follows the law in the heads of damages it will award and those it will refuse to award. There are some circumstances in which damages are awardable under Lord Cairns’ Act but are not able to be awarded under the common law. 15.119 First, damages cannot be awarded at common law for a threatened breach of contract. A quia timet injunction can restrain threatened breaches. Under Lord Cairns’ Act damages can be awarded for damage not yet suffered in lieu of a quia timet injunction.467 Second, damages under Lord Cairns’ Act can probably be awarded for breach of equitable rights whereas common law damages are only awardable for breaches of legal rights.468 Third, damages under Lord Cairns’ Act can be awarded for continuing wrongs at least up to the date of assessment (and perhaps for prospective [page 1024] loss), whereas damages for breach of contract for continuing wrongs are usually only awarded for loss to the date of issuing the proceeding.469 It is possible that this difference may be more apparent than real because courts will accede to the demands of fairness and justice in determining whether damages will be assessed at the date of the breach or judgment or some other date.470 Fourth, aggravated damages and damages for mental distress may be recoverable under Lord Cairns’ Act.471

Account of profits472

15.120 An order for an account of profits is the principal equitable monetary remedy in employment law. It compels an investigation into the net profits made by an employee attributable to the breach of an equitable duty and requires the employee disgorge those profits. The purpose of an account of profits is to ‘preclude the [employee] from being swayed by considerations of personal interest and from accordingly misusing the fiduciary position for personal advantage’.473 In employment law it is most commonly granted to remedy breaches of fiduciary duties of employees, such as the diversion of business from the employer, the [page 1025] misuse of position, the misuse of confidential information or the receipt of secret commissions or stolen property.474 The relationship between an account and other remedies is discussed in 15.122–15.124. The availability of an account of profits to enforce equitable, contractual and statutory remedies is examined in15.125–15.127. When an account of profits is ordered, the employee must account to the employer for the profits made arising from the breach of the duty, minus any sums for allowances and apportionment granted by the court: see 15.128–15.132. An ordinary account may be ordered requiring the employee to uncover what has happened to the property or money of the employer that was received by or entrusted to the employee: see 15.133. 15.121 An account of profits is a discretionary remedy. The discretion is exercised in accordance with the settled principles of equity, may be refused if it is inequitable to do so and is subject to the ordinary equitable defences such as acquiescence and laches.475 An employer who proves a breach of an equitable right is prima facie entitled to elect to have an account of profits.476 It is not necessary to prove that the employee’s actions were tainted by dishonesty or lack of bona fides.477 Nor is it necessary for the employer to prove that it has suffered a loss as a result of the breach: … it is no defence that the [employer] was unwilling, unlikely or unable to make the profits for which an account is taken or that the [employee] acted honestly and reasonably.478

[page 1026] Employees can be held to account for profits that the employer is unlikely to have obtained, or even profits that it was impossible for the employer to obtain.479 An account of profits can be awarded against third parties who have participated in the contravention in accordance with the ordinary tests: see 15.71.

Account and other remedies 15.122 An account of profits requires the employee to account for, and then be stripped of, profits made by the infringement of the right: The rules relating to an account of profits are not restitutionary in the sense that they do not rest on giving back something which the [employer] once had, or restoring the [employer] to a state of affairs which the [employer] once occupied but has lost because of the [employee’s] behaviour, or requiring some damage to the pre-existing position of the [employer], or compensating the [employer] for some loss suffered. They strip the [employee] of gains whether or not the [employer] could ever had made the gains in question.480

Comparison with damages at common law 15.123 The fundamental difference between an order for an account of profits and an award of damages is that the former requires the employee to give up his or her ill-gotten gains to the employer, whereas the latter only requires the employee to compensate the employer for the loss the employer has suffered.481 Damages focuses on the loss of the employer; an account of profits focuses on the gain of the employee. This distinction can be crucial in assessing the amount that an employer can recover. For example, in Colour Control Centre v Ty482 the employees diverted business opportunities from their employer to their own company in breach of fiduciary and contractual obligations. The employers only had a slim chance of retaining the diverted work and the court determined the employer was entitled to recover $22,200 in damages for breach of contract for loss of the chance of retaining that business. However, the court ordered that the employees account for the profits made as the result of the breaches of the fiduciary obligations. The net profit the employees earned from the diverted business was $51,275.

[page 1027] There are at least two other distinctions between damages and an account of profits: an account of profits is discretionary whereas damages are awarded as a matter of right;483 and in an action for damages for the infringement of some intellectual property rights an employer may be able to recover punitive damages, whereas such awards are not part of an account of profits.484 An account of profits may be ordered when an injunction is not made to prevent future breaches of the employer’s rights.485

Election between inconsistent remedies 15.124 The employer must elect between an account of profits and alternative inconsistent remedies. Where the employer is enforcing co-extensive legal and equitable rights then it must elect between an account of profits and damages.486 It cannot recover both. When the employer is relying on the exclusive jurisdiction of equity to enforce an equitable right it must elect between an account of profits and equitable compensation.487 An election need not be made at the commencement of proceedings. The rationale is that an employer is sometimes ignorant at the commencement of proceedings of the extent to which the employee has profited from the breach. To require the employer to elect to take damages over profits (or vice versa) while remaining ignorant of the employee’s gain would turn the election into a gamble. The employer can usually make the election at any time prior to judgment being entered, although occasionally the court will insist on an earlier election.488 The employer is entitled to be [page 1028] adequately informed of the profits made by the employee before making an election.489

Account to enforce contractual rights and intellectual

property rights490 15.125 An order to account is an equitable remedy. It is principally ordered to enforce equitable rights and may only be ordered to enforce legal or statutory rights in two clearly defined circumstances relevant in employment law. The first exception, discussed in 15.127, is that an account of profits is available to remedy breaches of an employer’s intellectual property rights. The second exception is that an ordinary account (but not an account of profits) is able to be ordered: see 15.133.

An account of profits for breach of contract? Attorney-General v Blake 15.126 An employee who provides short notice to his or her employer to take up more lucrative employment, and thereby breaches his or her contract, is not required to account to his or her former employer for the gain made as a consequence of the breach of contract; and a wrongfully dismissed employee, entitled to a share of the profits of the employer, can recover damages for the dismissal but not an account of the profits arising from the dismissal.491 Though there have been some criticisms of this approach, it has recently been confirmed by a Full Court of the Federal Court492 and was a firmly entrenched feature of the law, at least until the decision in Attorney-General v Blake.493 In that case the House of Lords granted an account of profits to remedy the breach of a contract of an employee who was a notorious, self-confessed spy. The United Kingdom Secret Intelligence Service commenced employing Blake in the 1940s. He traitorously acted as a double agent for the Soviet Union during the Cold War; he was uncovered, charged, convicted and imprisoned in the United Kingdom. He escaped from prison in the 1960s and fled to the Soviet Union. In breach of his contractual obligations Mr Blake then wrote a book based on the [page 1029] information he received as an officer of the SIS. His former employer had

suffered no quantifiable loss arising from the breach. A publishing house bought the rights to the book. At issue was whether Blake was required to account to his former employer for the gain he had made from selling those publishing rights. A majority of the House of Lords accepted that in exceptional cases an account of profits should be able to be awarded for breach of contract where it is the most appropriate remedy.494 The decision is in direct conflict with Australian authorities and may be largely confined to its own facts.495

An account of profits and statutory intellectual property schemes 15.127 An order for an account of profits may be made under some statutes governing the field of intellectual property law, including the Patents Act and the Copyright Act. These Acts grant the court the power to award an injunction and, at the option of the employer, either damages or an account of profits against an employee who has infringed the statutory rights of an employer.496 An account of profits ordered under these schemes is the same remedy as that awarded in equity for account of profits.497 The remedy is discretionary and is subject to the ordinary equitable defences and considerations. An account of profits is usually only ordered if the employee has knowingly infringed the intellectual property rights of the employer and may be refused if, broadly speaking, the employee was actually and constructively ignorant of the rights of the employer being infringed.498 [page 1030] An account of profits can also be ordered in an action for breach of confidence to protect the intellectual property of the employer.499

The assessment of the profit 15.128 The difficulties in assessing the amount of profits are legion and notorious.500 It is often impossible to be precise when calculating the profits,

but these difficulties do not absolve the court from the responsibility of undertaking the task. The simplest measure of profits is gross receipts minus costs of production, but the assessment is rarely this simple.

Measuring the profit obtained by the breach 15.129 Not all income earned by the employee after the occurrence of the breach is relevant when calculating the profits. Before a receipt is relevant there must be a causal connection between the duty owed by the employee, its breach and the receipt.501 The assessment of profits varies according to the nature of the duty that has been breached: the assessment of an account of profits arising from a breach of intellectual property rights differs from the calculation of profits arising from a breach of fiduciary duty. No single measure of profits fits all of the cases.502 Where the account is sought to remedy the infringement of an intellectual property right the guiding principle is that the employee is only required to account for the profits attributable to the wrong committed.503 In such cases the profit is calculated by reference to each breach of the intellectual property right: ‘[It] is not the profit of the [page 1031] business which is being claimed, so if some articles are sold at a profit and some at a loss, the latter cannot be deducted from the former’.504

Measuring the profit arising from a breach of fiduciary duty 15.130 When the breach is of a fiduciary duty, there are two possible approaches: One approach, more favourable to the fiduciary, is that he should be held liable to account as constructive trustee not of the entire business but of the particular benefits which flowed to him in breach of his duty. Another approach, less favourable to the fiduciary, is that he should be held accountable for the entire business and its profits, due allowance being made for the time, energy, skill and financial contribution that he has expended or made. … In each case the form of inquiry to be directed is that which will reflect as accurately as possible the true measure of the profit or benefit obtained by the fiduciary in breach of his duty.505

Whether the first or the second approach is taken in any particular case depends on a number of factors including the nature of the property, the relevant powers and obligations of the fiduciary and the relationship between the profit made and the powers and obligations of the fiduciary.506 The calculation of profit will differ if the employee has improperly acquired a business in breach of his or her fiduciary duties rather than a specific asset.507 When an employee has acquired a business it may be inappropriate and inequitable to compel the employee to account for the whole of the profit of his or her conduct of the business or his or her exploitation of the employer’s goodwill over an indefinite period of time. It may be appropriate to allow the employee a proportion of the profits, depending upon the particular circumstances.508 For example, in Schindler Lifts Australia Pty Ltd v Debelak the employees successfully solicited the employer’s customers for a month before they resigned from employment. If they had not breached their fiduciary duties they would have gained the customers’ business a month later when the former employees commenced their own business. The [page 1032] court held that the benefits flowing from the breach amounted to $1000, not the many years of profit that the employer said it was entitled to.509

Deduction of allowances 15.131 When assessing the quantum of profits the court may deduct allowances from the gross receipts. Whether any deductions are made, and the amount of those deductions, is a matter of discretion for the court. An allowance is a part of the gross receipt that the court permits the employee to retain, whether to reflect the costs incurred in the creation of the profit or to reflect the skill and industry of the employee in earning the profit. An allowance can cover a range of costs incurred by the employee, including direct costs (such as the wages and costs of materials) and indirect costs (such as some overhead costs and rent).510 The onus is on the employee to prove

that an allowance should be granted and the amount of the allowance to be granted.511 A just allowance will generally be made for the skill, expertise and industry of the employee, except where fraud or other misconduct of the employee justifies the denial of the allowance.512 The nature of the duty that has been breached by the employee and the circumstances of that breach are important in this assessment. Where the source of the profit is misappropriated capital then the court is generally less likely to award just allowances for any investment or other profit-earning decisions of the employee. For example, in Australian Postal Corporation v Lutak the employee stole $20,000 from his employer that he used to buy an interest in a house. After the discovery of the fraud, and the conviction and incarceration of the employee, the house was sold at a profit. Given the circumstances of the breach of the fiduciary duty, the court was not of the view that a just allowance should be made.513 [page 1033]

Breach of intellectual property rights 15.132 The guiding principle in the assessment of an account of profits arising from the breach of intellectual property rights is that the employee is only required to account for the profits attributable to the wrong committed.514 When the employee could not make a profit without the breach of the duty, the whole of the profit made by the employee must be accounted for.515 The measure of the profit in such a case is simply calculated by asking: how much has it cost to manufacture the article? What was the price received on the sale of the article? The difference is the profit to be disgorged.516 In many cases the profit earned by an employee in breach of the duty will usually only be partly attributable to the breach. In such cases the court must apportion the profit: that part of the profit attributable to the wrong is paid to the employer and the employee retains the remainder. Ascertaining the part attributable to the infringement is often a difficult, if not impossible, task.

Account 15.133 An employee has a duty to account for property or money received by the employee by reason of his or her employment.517 There is some dispute about whether the duty to account is a common law right, able to be enforced by the equitable remedy of account, or an equitable duty arising from the fiduciary obligations of an employee when dealing with the employer’s property or money, or both.518 The duty applies whether the property is received as the result of the employee’s dishonesty, as in the case of a bribe, or as the result of the employee’s honesty, as in the case of a shop assistant receiving cash for the sale of an item. An account may be ordered in the absence of an employee’s wrongdoing (or even allegations of wrongdoing) to give effect to the employee’s duty. An account may be decreed simply to enable the employer to uncover what has happened to its property or money. [page 1034] These principles are illustrated in the extraordinary case of Asset Risk Management v Hyndes. According to the decision of the New South Wales Court of Appeal, the employee was a senior executive. Shortly after he commenced employment his supervisor, a Mr Gatland, had $46,000,000 of the employer’s money transferred into the employee’s account. The employee, his fiancée or persons unknown then transferred the money to other accounts and Mr Gatland went missing, presumed murdered. The employer wanted to know where its $46,000,000 had gone and sought an account. It did not allege that the employee was in breach of any contractual or equitable obligation. The court required the employee to provide an account of all money received and disbursed. The court adopted the following principle from Snell’s Principles of Equity: A principal [can] maintain a suit in equity for an account against his agent on the ground of the confidence reposed by the principal in the agent and the impossibility of discovering, except by the oath of the agent, how he had acted in the execution of his agency …519

Occasionally an account will be sought by an employee to discover relevant information from the employer. For example, an employee who is paid by commission may seek an account to uncover sales information to

enable the claim for loss of commission to be calculated.520

Delivery up and destruction 15.134 Courts exercising an equitable jurisdiction possess an inherent power to make an order for delivery up and destruction of documents or goods. In an employment context such an order is most often made against former employees to deliver up documents containing the employer’s confidential information or to destroy goods made using that information. For example, in Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd521 the former employees created a machine using confidential information they obtained from their previous employment. The court made an order that the machine be dismantled, the parts delivered to the employer and that the employer destroy those parts.522 [page 1035] The court may also require the delivery up of documents containing confidential information given by employees to rivals of the employer.523 The purpose of the remedy is to protect the rights of the employer, not to punish the employee. It removes the temptation that an employee may otherwise have to misuse confidential information.524 An order for delivery up and destruction is usually granted to aid injunctions issued to restrain the abuse of confidential information. As an equitable remedy, it is subject to the ordinary equitable defences and discretionary considerations. 15.135 Where the property belongs to the employer then the court may make an order for the specific restitution of the property.525 Where the property belongs to the employee or a third party, the order usually requires the destruction of the item as well as its delivery: an order transferring the property to the employer is not made as the property being destroyed is owned by another.526 In such cases the employee is often given the election of giving an undertaking on oath to destroy the property or deliver it to the employer for destruction.527 In Alperton Rubber Co v Manning when the employee left employment he improperly retained a book belonging to his

employer containing secret formulae. He was ordered to deliver the original of the book to the employer and deliver up or destroy all of the copies of the book which he had made.528 [page 1036]

Constructive trusts 15.136 A constructive trust is a trust raised by operation of law, rather than as the result of the intentions of the parties. It is constructive in the sense that the law construes the circumstances and attaches particular legal consequences to them.529 Constructive trusts have been imposed in a range of situations in employment where there has been a breach of the equitable duty of fidelity, including the diversion of the employer’s business to the employee, benefits acquired through the misuse of the employee’s position, and the acquisition of a bribe or secret benefit.530 Like other trusts, there must be a trustee, a beneficiary, trust property and obligations attaching to the trust property, in particular the obligation to account to the beneficiary.531 It is an equitable remedy, though the trust arises once the relevant circumstances exist and operates prior to an order of the court.532 A constructive trust is a rather blunt weapon, somewhat ameliorated by the power of the court to make a just allowance for the contributions of the fiduciary in improving the value of the trust property.533 It ought not be imposed when there are other orders capable of doing full justice, such as an order for equitable compensation or an account of profits.534 [page 1037]

Constructive trusts and inventions 15.137 A constructive trust may also arise from a discovery or invention made by an employee in the performance of the employee’s duties.535 Under the constructive trust the employee is the trustee; the employer is the

beneficiary; and the invention or discovery is the trust property. As a trustee, the employee is obliged to give to the employer the benefit of the trust property.536 This includes assigning the trust property to the employer upon request.537 The obligations of the employee as trustee continue until the beneficiary expressly or impliedly releases the employee as trustee from those obligations. In the absence of such a release, the employee’s obligation to ensure that the employer enjoys the benefit of the invention will endure indefinitely. In Triplex Safety Glass Company v Scorah the employee made a discovery during his employment and ceased employment two years later. After a further year he sought a patent for his discovery. The court determined that the discovery was held on trust for the employer. Neither the termination of the employment, nor the passage of time between the discovery and the patent application had released the employee from his obligations to his former employer.538

Constructive trusts, honesty and changes in the value of the property 15.138 A constructive trust may also arise when an employee performs a legal act, as the result of which he or she acquires a beneficial interest in property, but it would be unconscionable to permit the employee to deny the employer the benefit of that property. Whether a constructive trust arises does not depend on the proof of dishonesty or lack of good faith on the part of the employee.539 Nor is it necessary to prove that the employer has suffered a loss as the result of the employee’s breach of fiduciary duty.540 A constructive trust can arise in situations in which the employee was under no obligation to obtain the profit for the employer, [page 1038] as where a bribe is paid.541 The value of the trust property may increase or decrease. As was explained in Attorney-General for Hong Kong v Reid: If the property representing the bribe decreases in value the [employee] must pay the difference between that value and the initial amount of the bribe because he should not have accepted the

bribe or incurred the risk of loss. If the property increases in value, the [employee] is not entitled to any surplus in excess of the initial value of the bribe.542

This analysis applies whether the trust property (such as a bribe) was a cash payment or the provision of some other type of property. Where the trust property is not money (for example, when the donor gives shares to the employee) then the employer may elect to receive what was given to the employee (such as the shares) or the highest value that the property possessed while it was in the hands of the employee.543 A stranger to the employee’s breach of fiduciary duty may be a constructive trustee if it participates in certain ways in the breach: see 15.71–15.74. ____________________ 1.

Orders for specific performance and injunctions are referred to in this chapter as coercive remedies. They are coercive in the sense that they compel the defendant to perform an act or refrain from performing an act, in contrast to remedies such as damages that substitute the performance of one act (the payment of money) for another (the performance of the contract). There are other coercive remedies known to the law, such as an order for specific recovery of assets and land. Few of them are relevant in employment law.

2.

Pickering v Bishop of Ely (1843) 2 Y and CC 249 at 267; 63 ER 109 at 117 (receiver to the see); Stocker v Brocklebank (1851) 3 Mac and G 250 at 266 and 267; 42 ER 257 at 262 and 263 (manager); Brett v The East India and London Shipping Company Limited (1864) 2 H and M 404 at 411; 71 ER 520 at 523 (broker); Millican v Sullivan (1888) 4 TLR 203 at 204 (contract to act as a surgeon at a hospital); Bainbridge v Smith (1889) 41 Ch D 462 at 474 (a managing director) and Ogden v Fossick (1862) 4 De G F & J 426; 45 ER 1249. See also on apprentices, Webb v England (1860) 29 Beav 44 at 54; 54 ER 541 at 545–6 and De Francesco v Barnum (1890) 45 Ch D 430 at 437–8.

3.

Clarke v Price (1819) 2 Wils Ch 157 at 164; 37 ER 270 at 273 (a non-employment contract to write notes of cases heard in the Court of the Exchequer); Baldwin v The Society for the Diffusion of Useful Knowledge (1838) 9 Sim 393 at 395; 59 ER 409 at 410 (a non-employment contract to prepare maps for publication) and Ryan v Mutual Tontine Westminster Chambers Association [1893] 1 Ch 116 (lease requiring lessor to appoint a porter to perform certain duties).

4.

Hill v CA Parsons & Co Ltd [1972] Ch 305; [1971] 3 All ER 1345.

5.

Cardile v LED Builders Pty Ltd (1999) 198 CLR 380; 162 ALR 294 at [32].

6.

I Spry, The Principles of Equitable Remedies, 6th ed, Lawbook Company, Sydney, 2001, pp 4–5.

7.

M Tilbury, Civil Remedies, Butterworths, Sydney, 1993, p 273 and G Jones and W Goodhart, Specific Performance, 2nd ed, Butterworths, London, 1996, p 1.

8.

JC Williamson Ltd v Lukey (1931) 45 CLR 282 at 297 per Dixon J and Packenham Upper Fruit Company Limited v Crosby (1924) 35 CLR 386 at 394. ‘In specie’ means specifically and without any kind of substitution. The enforcement in specie of a contract means that the exact thing that the contract requires to be done is ordered to be done.

9.

CH Giles & Co Ltd v Morris [1972] 1 WLR 307 at 316; 1 All ER 960 at 968. See also Stocker v Wedderburn (1857) 3 K and J 393; 69 ER 1162 (contract required promoters to form a company

and employ the plaintiff) and Kennedy v Australasian Coal and Shale Employee’s Federation (No 2) (1983) 9 IR 355 at 360. 10.

I Spry, note 6 above, pp 51–2.

11.

Packenham Upper Fruit Company Limited v Crosby, note 8 above, at 394 per Isaacs and Rich JJ.

12.

Australian Hardwoods Pty Ltd v Commissioner for Railways [1961] 1 All ER 737 at 743; JC Williamson Ltd v Lukey, note 8 above, at 297–8; Packenham Upper Fruit Company Limited v Crosby note 8 above at 394; I Spry, note 6 above, p 52; M Tilbury, note 7 above, p 273 and R Meagher et al, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies, 4th ed, LexisNexis Butterworths, Australia, 2002, pp 652–3.

13.

Patrick Stevedores v The Maritime Union of Australia (1998) 195 CLR 1; 153 ALR 643; 79 IR 339 at [110] and McIntosh v Australian Postal Corporation (2001) 140 IR 108; [2001] FCA 1012 at [7].

14.

M Tilbury, note 7 above, p 272 and I Spry, note 6 above, p 322.

15.

See 15.89.

16.

R Meagher et al, note 12 above, pp 807–8. See also Ryan v Mutual Tontine Westminster Chambers Association, note 3 above, at 123 and 125 and 15.89.

17.

CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345 at 391–2; 146 ALR 402 at 391–2 (anti-suit injunctions) and Cardile v LED Builders Pty Ltd note 5 above (Mareva orders); see also 15.106 on injunctions issued in the supervisory jurisdiction of superior courts.

18.

See 15.25.

19.

The distinction between the equitable and auxiliary jurisdictions in equity is discussed in R Meagher et al, note 12 above, pp 101 and 704–14.

20.

See, for example, Balston Ltd v Headline Filters Ltd (No 1) [1987] FSR 330 at 340–1 and 7.45.

21.

On Anton Piller orders and Mareva orders see J Wright, ‘Anton Piller Orders’ and K Francois and S Hepburn, ‘Mareva Orders’ in P Parkinson (ed), The Principles of Equity, 2nd ed, Lawbook Co, Sydney, 2003; I Spry, note 6 above, pp 514–34 and 560–7; M Tilbury, note 7 above, pp 327– 48 and R Meagher et al, note 12 above, pp 795–806 and 810–2. As to quia timet injunctions to restrain threatened breaches of the general protection provisions in the Fair Work Act and its predecessors, see Community and Public Sector Union (CPSU) v Telstra Corp Ltd (2000) 99 IR 238; [2000] FCA 844 at [23] and Finance Sector Union of Australia v Australia & New Zealand Banking Group (2002) 120 FCR 107; 114 IR 352 at [193].

22.

See, for example, Francis v Municipal Council of Kuala Lumpur [1962] 3 All ER 633 at 637 and 638; Lucy v The Commonwealth (1923) 33 CLR 229 at 237 and Alexander v Standard Telephones & Cables Plc [1990] ICR 291 at 308.

23.

For example, Anderson v Pringle of Scotland Ltd [1988] IRLR 64; Crisp v Holden (1910) 54 Solicitor’s Journal 784; Irani v Southampton and South West Hampshire Area Health Authority [1985] ICR 590; Jones v Gwent County Council [1992] IRLR 521; Peace v City of Edinburgh [1999] IRLR 417 and Walsh v Police Association (2000) 140 IR 58; [2000] VSC 292 at [73].

24.

For example, Jones v Lee [1980] ICR 310; Hill v CA Parsons & Co Ltd, note 4 above; Reilly v State of Victoria (1991) 5 VIR 1; Baker v City of Salisbury (1982) 2 IR 168 and Paras v Public Service Body Head of the Department of Infrastructure (2006) 152 IR 75; [2006] FCA 622 at [47].

25.

Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 36 FCR 20 at 37 per Gray J; cf Francis v

Municipal Council of Kuala Lumpur, note 22 above, at 637–8. 26.

Australasian Meat Industry Employees’ Union v G & K O’Connor Pty Ltd (2000) 100 IR 383; [2000] FCA 627 at [47]; Hayman Reese v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (No 2) (2001) 108 IR 441; [2001] FCA 1328 at [20]–[21] and Stevenson v United Road Transport Union [1977] 2 All ER 941 at 952; [1977] ICR 893 at 906–7.

27.

Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 77 FCR 478 at 489; 153 ALR 626 at 636–7; 79 IR 305 at 315; Quinn v Overland (2010) 199 IR 40; [2010] FCA 799 at [95] and Downe v Sydney West Area Health Service (No 2) (2008) 71 NSWLR 633; 174 IR 385 at [454]–[455].

28.

The power to reinstate unfairly dismissed employees is granted by s 391 of the Fair Work Act 2009 (Cth); see also Blackadder v Ramsey Butchering Services Pty Ltd (2005) 221 CLR 539; 215 ALR 87; 139 IR 338 at [14], [33] and [75]–[76].

29.

Australasian Meat Industry Employees’ Union v G & K O’Connor Pty Ltd, note 26 above, at [47]–[55].

30.

See 3.28.

31.

For a further discussion of this rule, see I Spry, note 6 above, pp 56–9; S Hepburn, ‘Specific Performance’ in P Parkinson, note 21 above, pp 591–2 and G Jones and W Goodhart, note 7 above, pp 15–8.

32.

See 3.47.

33.

Co-operative Insurance Society Ltd v Argyll Stores [1998] AC 1 at 14; [1997] 3 All ER 297 at 303–4 (Argyll Stores); see 15.58.

34.

See 4.22–4.25.

35.

See I Spry, note 6 above, pp 254–88.

36.

G Jones and W Goodhart, note 7 above, pp 10–13; Johnson v Agnew [1980] AC 367 at 392–3; [1979] 1 All ER 883 at 889 and Wheeler v Philip Morris (1989) 97 ALR 282 at 310.

37.

Where a court is exercising a statutory jurisdiction it may make an injunction reinstating the employee whose employment has been validly terminated: see Australasian Meat Industry Employees’ Union v G & K O’Connor Pty Ltd, note 26 above, at [47]–[55].

38.

Gunton v Richmond-upon-Thames London Borough Council [1981] 1 Ch 448 at 460; [1980] 3 All ER 577 at 583 per Shaw LJ.

39.

Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199; 185 ALR 1 at [60]; see also at [11]–[17] and [91].

40.

Waterside Workers’ Federation of Australia v JW Alexander Limited (1918) 25 CLR 434 at 464.

41.

Turner v Bladin (1951) 82 CLR 463 at 472 per Williams, Fullagar and Kitto JJ.

42.

I Spry, note 6 above, pp 78 and 378–9 and Barlow v Neville Jeffress Advertising Pty Ltd (1994) 4 Tas R 391 at 400–2.

43.

Lucy v The Commonwealth, note 22 above, at 237; Southern Foundries (1926) Ltd v Shirlaw [1940] AC 701 at 723; 2 All ER 445 at 458–9; Vine v National Dock Labour Board [1957] AC 488 at 500 and 507; [1956] 3 All ER 939 at 944 and 948; Howes v Gosford Shire Council [1962] NSWR 58 at 63; Francis v Municipal Council of Kuala Lumpur, note 22 above, at 637; Australian Hardwoods Pty Ltd v Commissioner for Railways, note 12 above, at 743; Ridge v Baldwin [1964] AC 40 at 65; [1963] 2 All ER 66 at 71; Barber v Manchester Regional Hospital

Board [1958] 1 All ER 322 at 331; Decro-Wall International SA v Practitioners in Marketing Ltd [1971] 1 WLR 361 at 369–70 and Kirchner & Co v Gruban [1909] 1 Ch 413 at 420–1. 44.

See, for example, Clarke v Price, note 3 above, at 164; 37 ER 270 at 273.

45.

I Spry, note 6 above, pp 89–90.

46.

Clarke v Price, note 3 above, Wils Ch at 164; ER at 273; Kemble v Kean (1829) 6 Sim 333 at 337–8 and Baldwin v The Society for the Diffusion of Useful Knowledge, note 3 above, Sim at 395; ER at 410.

47.

Lumley v Wagner (1852) 1 De GM & G 604.

48.

See C Smith, A Treatise on the Law of Master and Servant, 2nd ed, H Sweet, London, 1860, p 106; Willis v Childe (1851) 13 Beav 117; 51 ER 46; Doe d Childe v Willis (1850) 5 Ex 894; 155 ER 391; Daugars v Rivaz (1860) 28 Beav 233; 54 ER 355; Hayman v Governors of Rugby School (1874) LR 18 Eq 28; Attorney-General v Magdalen College (1847) 10 Beav 402; 50 ER 637 at 639–40; Baker v Gough [1963] NSWR 1345 and Crisp v Holden, note 23 above.

49.

Baker v Gough, note 48 above, at 1363–4; Macqueen v Frackleton (1909) 8 CLR 673; P Young et al, On Equity, Lawbook Co, Sydney, 2009, pp 234–7 and Liddle v Central Australian Legal Aid Service (1999) 150 FLR 142 at 145–53.

50.

R v British Broadcasting Corporation; Ex parte Lavelle [1983] 1 All ER 241 at 248 and Lee v Showmen’s Guild of Great Britain [1952] 1 All ER 1175 at 1183; see 15.104.

51.

Baker v Gough, note 48 above, at 1363; see 15.104.

52.

Bostik (Australia) Pty Ltd v Gorgevski (No 1), note 25 above, at 32 and 38; Byrne v Australian Airlines Limited (1995) 185 CLR 410 at 428; 131 ALR 422 at 432–3; Gregory v Philip Morris Ltd (1988) 80 ALR 455 at 481–2; Turner v Australasian Coal and Shale Employee’s Federation (1984) 6 FCR 177 at 192–3; 55 ALR 635 at 648–9; Gordon v State of Victoria [1981] VR 235 at 239; Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 77 FCR 478 at 489; 153 ALR 626 at 636–7; 79 IR 305 at 315; Lane v Fasciale (1991) 5 VIR 33 at 37 and Baker v City of Salisbury, note 24 above, at 171. In the United Kingdom see Chappell v Times Newspapers Ltd [1975] ICR 145 at 173, 176 and 178; Anderson v Pringle of Scotland Ltd, note 23 above, at 66 and CH Giles & Co Ltd v Morris, note 9 above, WLR at 318–9; All ER at 969– 70. Occasionally during this period there were restatements of the traditional rule, often in passing and usually as dicta: see Gunton v Richmond-upon-Thames London Borough Council, note 38 above, Ch at 459 and 473; All ER at 582 and 592 and Boyo v Lambeth London Borough Council [1994] ICR 727 at 749.

53.

Pickering v Bishop of Ely, note 2 above, Y and CC at 267; ER at 117; Johnson v The Shrewsbury and Birmingham Railway Company (1853) 3 De GM & G 914 at 926; 43 ER 358 at 363 and Horne v The London and North Western Railway Company (1862) 10 WR 170 at 171 (sub nom Chaplin v North-Western Railway Company (1861) 5 LT 601).

54.

Webb v England, note 2 above, Beav at 54; ER at 545; Johnson v The Shrewsbury and Birmingham Railway Company, note 53 above, De GM & G at 930; ER at 364; Millican v Sullivan, note 2 above, at 204 and Ryan v Mutual Tontine Westminster Chambers Association, note 3 above, at 125 and 128.

55.

JC Williamson Ltd v Lukey, note 8 above, at 292–3, 293–4 and 297–8; Ryan v Mutual Tontine Westminster Chambers Association, note 3 above, at 123, 125 and 128; Gregory v Philip Morris Ltd, note 52 above, at 482; Kemble v Kean, note 46 above, at 337–8 and Firth v Ridley (1864) 33 Beav 516 at 520; 55 ER 468 at 470.

56.

Pickering v Bishop of Ely, note 2 above, Y and CC at 267–8; ER at 117–18; Stocker v

Wedderburn, note 9 above, K and J at 404; ER at 1167; Firth v Ridley, note 55 above, Beav at 520; ER at 470 and Millican v Sullivan, note 2 above, at 204. 57.

De Francesco v Barnum, note 2 above, at 438; William Robinson and Co Ltd v Heuer [1898] 2 Ch 451 at 456; Millican v Sullivan, note 2 above, at 204 and Tradition Australia Pty Ltd v Gunson (2006) 152 IR 395; [2006] NSWSC 298 at [27]–[30]. A variation on this argument is that the law should not compel the continuation of a personal relationship against the will of both parties. This matter is considered in 15.35. See also G Jones and W Goodhart, note 7 above, pp 34–5.

58.

Atlas Steels (Australia) Pty Ltd v Atlas Steels Ltd (1948) 49 SR (NSW) 157 at 161; De Francesco v Barnum, note 2 above, at 438 and Southern Foundries (1926) Ltd v Shirlaw, note 43 above, AC at 723; All ER at 458–9.

59.

Horwood v Millar and Timber Trading Company [1917] 1 KB 305; see 4.25.

60.

Turner v Australasian Coal and Shale Employee’s Federation, note 52 above, FCR at 193; ALR at 649 and Baker v Gough, note 48 above, at 1365.

61.

The notion of compulsion is more thoroughly examined in the cases concerning the enforcement of negative stipulations: see 15.33.

62.

D Brodie, ‘Specific Performance and Employment Contracts’ (1998) 27 ILJ 37 at 41–2.

63.

See Fair Work Act ss 418–421; Australasian Meat Industry Employees’ Union v G & K O’Connor Pty Ltd, note 26 above, at [46] and the order in Hayman Reese v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (No 2), note 26 above.

64.

See 15.13.

65.

See 10.60.

66.

Links between the traditional rule against specific performance and the unilateral termination theory are discussed in K Ewing, ‘Remedies for Breach of the Contract of Employment’ [1993] Camb LJ 405 at 410–1; G Furness, ‘Injunctions and the Contract of Employment’ (1989) 2 AJLL 234; D Brodie, note 62 above, at 47; R v East Berkshire Health Authority; Ex parte Walsh [1985] QB 152 at 170; [1984] 3 All ER 425 at 434 and Irani v Southampton and South West Hampshire Area Health Authority, note 23 above, at 598–9; see also Howes v Gosford Shire Council, note 43 above, at 63–4.

67.

Trade Union and Labour Relations (Consolidation) Act 1992 (UK) s 236. See also D Brodie, note 62 above, at 45–6 and McPherson v London Borough of Lambeth [1988] IRLR 470 at 475.

68.

Turner v Australasian Coal and Shale Employee’s Federation, note 52 above, FCR at 193; ALR at 649 per Northrop, Keely and Gray JJ; see also APESMA v Skilled Engineering Pty Ltd (1994) 122 ALR 471 at 479.

69.

Byrne v Australian Airlines Limited, note 52 above, CLR at 428; ALR at 432 per Brennan CJ, Dawson and Toohey JJ; Jarrett v Commissioner of Police (NSW) (2005) 224 CLR 44; 221 ALR 95; 145 IR 194 at [7] and [30]; Lane v Fasciale, note 52 above, at 37; Paras v Public Service Body Head of the Department of Infrastructure, note 24 above, at [40]; Powell v Brent London Borough Council [1987] ICR 176 at 194; Heath Lambert Australia Pty Ltd v Keenan (2000) 102 IR 306; [2000] VSC 533 at [7]–[8]; Gordon v State of Victoria, note 52 above, at 239; Gregory v Philip Morris Ltd, note 52 above, at 481–2; Francis v Municipal Council of Kuala Lumpur, note 22 above, at 637; Wishart v National Association of Citizens Advice Bureaux Ltd [1990] ICR 794 at 806 and Chappell v Times Newspapers Ltd, note 52 above, at 158. See also Tradition Australia Pty Ltd v Gunson, note 57 above, at [13]–[26] and Quinn v Overland, note 27 above, at [104].

70.

Bostik (Australia) Pty Ltd v Gorgevski (No 1), note 25 above, at 38; CH Giles & Co Ltd v Morris, note 9 above, WLR at 318–9; All ER at 969–70; APESMA v Skilled Engineering Pty Ltd, note 68 above, at 479; Chappell v Times Newspapers Ltd, note 52 above, at 176; Anderson v Pringle of Scotland Ltd, note 23 above, at 67; Downe v Sydney West Area Health Service (No 2), note 27 above, at [448]–[449]; Murell v South Eastern Sydney Area Health Service (2006) 153 IR 60; [2006] NSWSC 313 at [41]–[42] and Quinn v Overland, note 27 above, at [101].

71.

Bostik (Australia) Pty Ltd v Gorgevski (No 1), note 25 above, at 38 per Gray J.

72.

Visscher v Guidice (2009) 239 CLR 361; 258 ALR 651; 187 IR 96 at [54].

73.

CH Giles & Co Ltd v Morris, note 9 above, WLR at 318–9; All ER at 969–70, adopted in Baker v City of Salisbury, note 24 above, at 171. See the modern approach to the analogous issue of whether injunctions must issue to restrain breaches of negative stipulations: see 15.27–15.34.

74.

See 15.35–15.40.

75.

See 15.41–15.49.

76.

See Stevenson v United Road Transport Union, note 26 above, All ER at 952; ICR at 906–7 and 15.11.

77.

See 11.3 and 11.23–11.27.

78.

Peace v Edinburgh City Council, note 23 above; Kulkarni v Milton Keynes Hospital NHS Trust [2010] ICR 101; [2009] EWCA Civ 789; Jones v Lee, note 24 above; Taylor v National Union of Seamen [1967] 1 WLR 532 at 551; 1 All ER 767 at 777; Crisp v Holden, note 23 above; Jones v Gwent County Council, note 23 above, at [41]–[46]; Robb v Hammersmith and Fulham London Borough Council [1991] ICR 514 at 552; Gryf-Lowczowski v Hinchingbrooke Healthcare NHS Trust [2006] ICR 425 at 447–8; Anderson v Pringle of Scotland Ltd, note 23 above; Irani v Southampton and South West Hampshire Health Authority, note 23 above (though there is some suggestion that this was a statutory right that was enforced) and Ridge v Baldwin, note 43 above, AC at 65–7; All ER at 71–3. Cases concerning statutory rights are discussed in 15.104–15.113.

79.

Referring to Hill v CA Parsons Ltd, note 4 above, Ch at 314 and 320; All ER at 1350 and 1354– 5; Reilly v State of Victoria, note 24 above, at 11–12; Irani v Southampton & South West Hampshire Health Authority, note 23 above; Dietman v Brent London Borough Council [1987] ICR 737 at 754; Crisp v Holden, note 23 above; Smith v McNally [1912] 1 Ch 816; Chappell v Times Newspapers Ltd, note 52 above; Jones v Lee, note 24 above, and R v British Broadcasting Corporation; Ex parte Lavelle, note 50 above, ICR at 113.

80.

Paras v Public Service Body Head of the Department of Infrastructure, note 24 above, at [39].

81.

Ridge v Baldwin, note 43 above, AC at 65; All ER at 71.

82.

Saira v Northern Territory University (1992) 109 FLR 46 at 51–2.

83.

Stevenson v United Road Transport Union, note 26 above, All ER at 948–9; ICR at 902 and R v British Broadcasting Corporation; Ex parte Lavelle, note 50 above, at 253; see also Taylor v National Union of Seamen, note 78 above, WLR at 551; All ER at 777.

84.

Gryf-Lowczowski v Hinchingbrooke Healthcare NHS Trust, note 78 above, at 447–8; Paras v Public Service Body Head of the Department of Infrastructure, note 24 above, at [41]–[47]; Robb v Hammersmith and Fulham London Borough Council, note 78 above, at 552 and Barros D’Sa v University Hospital Coventry and Warwickshire NHS Trust [2001] IRLR 691.

85.

Robb v Hammersmith and Fulham London Borough Council, note 78 above, at 522 and GryfLowczowski v Hinchingbrooke Healthcare NHS Trust, note 78 above, at 447–8.

86.

Gryf-Lowczowski v Hinchingbrooke Healthcare NHS Trust, note 78 above, at 447–8.

87.

Peace v Edinburgh City Council, note 23 above, at [12].

88.

Jones v Lee, note 24 above; Robb v Hammersmith and Fulham London Borough Council, note 78 above, at 552 and Paras v Public Service Body Head of the Department of Infrastructure, note 24 above.

89.

Peace v Edinburgh City Council, note 23 above; Gryf-Lowczowski v Hinchingbrooke Healthcare NHS Trust, note 78 above, at 447–8; Irani v Southampton and South West Hampshire Health Authority, note 23 above; Mezey v South West London and St George’s Mental Health NHS Trust [2007] IRLR 244 (restraint of suspension) and Kulkarni v Milton Keynes Hospital NHS Trust, note 78 above (declaration concerning correct disciplinary procedure).

90.

See, for example, Fair Work Act ss 417–422 and 545.

91.

See Fair Work Act s 545; Human Rights and Equal Opportunity Commission Act 1986 (Cth) s 46PO; Discrimination Act (ACT) ss 102; Anti-Discrimination Act (NSW) s 113; AntiDiscrimination Act (NT) s 88; Anti-Discrimination Act (Qld) s 209; Equal Opportunity Act (SA) s 96; Anti-Discrimination Act (Tas) s 89; Equal Opportunity Act (Vic) s 136; Equal Opportunity Act (WA) s 127.

92.

Cardile v LED Builders Pty Ltd, note 5 above, at [29]. On the meaning of reinstatement, see Blackadder v Ramsey Butchering Services Pty Ltd, note 28 above, at [14], [33] and [75]–[76].

93.

Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd, note 39 above, at [89] and Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1; 153 ALR 643; 79 IR 339 at [35].

94.

See the authorities discussed in J Dietrich and T Middleton, ‘Statutory Remedies and Equitable Remedies’ (2006) 28 ABR 136 at 145–8; Maritime Union of Australia v Patrick Stevedores Operations No 1 Pty Ltd (1998) 77 FCR 456 at 464–5; 153 ALR 602 at 603 and on appeal at Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 77 FCR 478 at 489; 153 ALR 626 at 636–7; 79 IR 305 at 315.

95.

Liddell v Lembke (1994) 127 ALR 342 at 360 and 367; 56 IR 447 at 466 and 473; Nicholson v Heaven & Earth Gallery (1994) 57 IR 50 and Patterson v Newcrest Mining Ltd (1996) 68 IR 419.

96.

Bowling v General Motors Holden Limited (1980) 33 ALR 297 at 304–5; Australian Municipal, Administrative, Clerical and Services Union v Greater Dandenong City Council (2000) 101 IR 143; [2000] FCA 1231 at [127] (aff’d (2001) 112 FCR 232; 184 ALR 641 at [111]); CEPU v ACI Operations Pty Ltd (2005) 147 IR 315; [2005] FCA 1662 at [70]–[75]; Lewis Construction Co Pty Ltd v Martin (1986) 70 ALR 135 at 142; Voigtsberger v The Council of the Shire of Pine Rivers (1981) 58 FLR 239 and Australasian Meat Industry Employees’ Union v Sunland Enterprises Pty Ltd (1988) 24 IR 467.

97.

Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 77 FCR 478 at 489; 153 ALR 626 at 636–7; 79 IR 305 at 315; see also Australasian Meat Industry Employees’ Union v G & K O’Connor Pty Ltd, note 26 above.

98.

Doherty v Allman (1878) 3 App Cas 709 at 719–20 and the cases discussed in McLachlan Consultants Pty Ltd v Boswell (1988) 30 IR 417 at 422.

99.

Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337 at 346; Dalgety Wine Estates Pty Ltd v Rizzon (1979) 141 CLR 552 at 573–4; 26 ALR 355 at 370–1; McLachlan Consultants Pty Ltd v Boswell, note 98 above, at 420–3; Hawthorn Football Club v Harding [1988] VR 49 at 60 and Wood v Corrigan (1928) 28 SR (NSW) 492 at 500.

100. Cardile v LED Builders Pty Ltd, note 5 above, at [31]; Dalgety Wine Estates Pty Ltd v Rizzon, note 99 above, CLR at 560 and 573–4; ALR at 361 and 370–1 and Warner Bros Pictures Inc v Nelson [1937] 1 KB 209 at 217; [1936] 3 All ER 160. 101. Warner Bros Pictures Inc v Nelson, note 100 above, KB at 219; All ER at 166; on severance, see 16.20. 102. Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181; 185 ALR 152 at [102]–[104]; Broken Hill Pty Co Ltd v Hapag-Lloyd Aktiengesellschaft [1980] 2 NSWLR 572 at 581–2; J C Williamson Ltd v Lukey, note 8 above, at 299; Dalgety Wine Estates Pty Ltd v Rizzon, note 99 above, CLR at 576; ALR at 372 and Tullett Prebon (Australia) Pty Ltd v Purcell (2008) 175 IR 414; [2008] NSWSC 852 at [88]. 103. Whitwood Chemical Company v Hardman [1891] 2 Ch 416 at 426–7; William Robinson and Co Ltd v Heuer, note 57 above, at 456; Warner Bros Pictures Inc v Nelson, note 100 above, KB at 217; All ER at 165; Page One Records Ltd v Britton [1968] 1 WLR 157 at 166; [1967] 3 All ER 822 at 827; BearingPoint Australia Pty Ltd v Hillard [2008] VSC 115 at [149] and Heath Lambert Australia Pty Ltd v Keenan, note 69 above, at [7]. 104. Tullett Prebon (Australia) Pty Ltd v Purcell, note 102 above, at [74]. 105. Administrative and Clerical Officers Association v Commonwealth (1979) 26 ALR 497 at 502; Whitwood Chemical Company v Hardman, note 103 above, at 426–7; J C Williamson Ltd v Lukey, note 8 above, at 299; Page One Records Ltd v Britton, note 103 above, WLR at 166; All ER at 827; Dalgety Wine Estates Pty Ltd v Rizzon, note 99 above, CLR at 573; ALR at 370 and Atlas Steels (Australia) Pty Ltd v Atlas Steels Ltd, note 58 above, at 162–3. 106. Whitwood Chemical Company v Hardman, note 103 above, at 427. 107. Davis v Foreman [1894] 3 Ch 654 and Kirchner & Co v Gruban, note 43 above, at 420–1. 108. Whitwood Chemical Company v Hardman, note 103 above, at 427; Warner Bros Pictures Inc v Nelson, note 100 above, KB at 217; All ER at 165; Evening Standard Co Ltd v Henderson [1987] ICR 588 at 592; Provident Financial Group v Hayward [1989] 3 All ER 298 at 302 and 305; [1989] ICR 160 at 165–6 and 170; Buckenara v Hawthorn Football Club Ltd [1988] VR 39 at 46 and Hawthorn Football Club Ltd v Harding, note 99 above, at 58. 109. Tullett Prebon (Australia) Pty Ltd v Purcell, note 102 above, at [74] and Atlas Steels (Australia) Pty Ltd v Atlas Steels Ltd, note 58 above, at 163–4. 110. Hawthorn Football Club Ltd v Harding, note 99 above, at 61–2 and Warner Bros Pictures Inc v Nelson, note 100 above, KB at 219–20; All ER at 167. 111. Warren v Mendy [1989] 3 All ER 103 at 114; as to the proof of loss of trust, see 15.40. 112. Heine Bros (Aust) Pty Ltd v Forrest [1963] VR 383 at 385–7; Ehrman v Bartholomew [1898] 1 Ch 671 at 673–4 and Rely-a-Bell Burglar and Fire Alarm Co Ltd v Eisler [1926] Ch 609 at 613– 8; cf Evening Standard Co Ltd v Henderson, note 108 above and BearingPoint Australia Pty Ltd v Hillard, note 103 above, at [149]. 113. See Rely-a-Bell Burglar and Fire Alarm Co Ltd v Eisler, note 112 above, at 615–6 concerning a restriction that only related to working as an employee and did not prevent the forming of a business. 114. William Robinson and Co Ltd v Heuer, note 57 above, at 456–7 (not to work for a rival business); Grimston v Cuningham [1894] 1 QB 125 at 130 (actor not to work in another theatre); Warner Bros Pictures Inc v Nelson, note 100 above (screen actor not to work for other film companies); Buckenara v Hawthorn Football Club Ltd, note 108 above, at 46–7 and Hawthorn Football Club

Ltd v Harding, note 99 above, at 58–61 (footballer not to play football for other teams) and Tullett Prebon (Australia) Pty Ltd v Purcell, note 102 above, at [81]–[83]; cf Rely-a-Bell Burglar and Fire Alarm Co Ltd v Eisler, note 112 above (not to work for another business dealing with alarms) and Warner Bros Pictures Inc v Ingolia [1965] NSWR 988 (not to work in the field of entertainment). 115. ICAP Australia Pty Ltd v BGC Partners (Australia) Pty Ltd (2005) 139 IR 293; [2005] FCA 130 at [73]–[76]; Curro v Beyond Productions Pty Ltd, note 99 above, at 346–7 and Kone Elevators Pty Ltd v McNay (1997) ATPR ¶41-563 at 43,821–2 (rev’d on other grounds (1997) ATPR 41564). 116. Tullett Prebon (Australia) Pty Ltd v Purcell, note 102 above, at [81]; Atlas Steels (Australia) Pty Ltd v Atlas Steels Ltd, note 58 above, at 166; William Robinson and Co Ltd v Heuer, note 57 above, at 456–7 and A Brooks, ‘The Limits of Competition: Restraint of Trade in the Context of Employment Contracts’ (2001) 24 UNSWLJ 346 at 367–71. 117. Maggbury Pty Ltd v Hafele Australia Pty Ltd, note 102 above, at [69]. On the application of that policy in restraint of trade cases see 16.7. On its application in mitigation cases see 14.108. 118. See the cases at note 108. The law uses the terms starvation and idleness metaphorically and not literally. 119. Provident Financial Group v Hayward, note 108 above, All ER at 302 and 305; ICR at 165–6 and 170; Bulldogs Rugby League Club Ltd v Williams [2008] NSWSC 822 at [54] and Evening Standard Co Ltd v Henderson, note 108 above, at 592–3; note, however, Tullett Prebon (Australia) Pty Ltd v Purcell, note 102 above, at [85]–[87] and Curro v Beyond Productions Pty Ltd, note 99 above, at 347–8. 120. Evening Standard Co Ltd v Henderson, note 108 above, at 593 and Provident Financial Group v Hayward, note 108 above, All ER at 302 and 303–4 and 305; ICR at 167–8 and 170; see 8.37–8.47 concerning the right of the employee to be provided with work. 121. Heine Bros (Aust) Pty Ltd v Forrest, note 112 above, at 387–8; the opposite approach was taken in Buckenara v Hawthorn Football Club Ltd, note 108 above, at 47–8 and Provident Financial Group v Hayward, note 108 above, All ER at 303; ICR at 167. As to injunctions against the new employer, see Rely-a-Bell Burglar and Fire Alarm Co Ltd v Eisler, note 112 above, at 608 and Warren v Mendy, note 111 above. 122. Provident Financial Group v Hayward, note 108 above, All ER at 303; ICR at 167; Hawthorn Football Club Ltd v Harding, note 99 above, at 61–2 and Buckenara v Hawthorn Football Club Ltd, note 108 above, at 47–8; see also BearingPoint Australia Pty Ltd v Hillard, note 103 above, at [150]. 123. Curro v Beyond Productions Pty Ltd, note 99 above, at 347–8; Seven Network (Operations) Limited v Warburton (No 2) [2011] NSWSC 386 at [90]; Tullett Prebon (Australia) Pty Ltd v Purcell, note 102 above, at [88]–[96]; Provident Financial Group v Hayward, note 108 above, All ER at 302–4; ICR at 164–8 and Page One Records Ltd v Britton, note 103 above, WLR at 166; All ER at 827. 124. Lumley v Wagner, note 47 above, at 619 and Warner Bros Pictures Inc v Nelson, note 100 above, KB at 219; All ER at 166. 125. A Brooks, ‘The Limits of Competition: Restraint of Trade in the Context of Employment Contracts’ (2001) 24 UNSWLJ 346 at 369. 126. Buckenara v Hawthorn Football Club Ltd, note 108 above, at 47. 127. Perkins v Grace Worldwide (1997) 72 IR 186 at 191.

128. Tradition Australia Pty Ltd v Gunson, note 57 above, at [27] and Warren v Mendy, note 111 above, at 114. 129. Jones v Gwent County Council, note 23 above; Jones v Lee, note 24 above; Robb v Hammersmith and Fulham London Borough Council, note 78 above, at 519–20 and 522 (where the loss of trust was both genuine and based on cogent evidence); Australasian Meat Industry Employees’ Union v G & K O’Connor Pty Ltd, note 26 above, at [43]; Martin v Eccles Corporation [1919] 1 Ch 387 and Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 77 FCR 478 at 490; 153 ALR 626 at 638; 79 IR 305 at 316. 130. See Lane v Fasciale, note 52 above, at 42; Ali v Southwark London Borough Council [1988] ICR 567; Chappell v Times Newspapers Ltd, note 52 above, at 158; Lakshmi v Mid Cheshire Hospitals NHS Trust [2008] IRLR 956 at [49]–[51]; Gregory v Philip Morris Ltd, note 52 above, at 481–2 and Kulatilake v Nottingham Area Health Authority (Teaching) (UKCA, CummingBruce, Brandon and O’Connor LJJ, 17 October 1980, unreported) referred to in Irani v Southampton and South West Hampshire Health Authority, note 23 above, at 600. 131. Powell v Brent London Borough Council, note 69 above, at 194 per Ralph Gibson LJ; Ali v Southwark London Borough Council, note 130 above, at 582; Quinn v Overland, note 27 above, at [95] and Downe v Sydney West Area Health Service (No 2), note 27 above, at [462]. 132. Chappell v Times Newspapers Ltd, note 52 above, at 178 per Geoffrey Lane LJ and Powell v Brent London Borough Council, note 69 above, at 200. 133. Atlas Steels (Australia) Pty Ltd v Atlas Steels Ltd, note 58 above, at 161; Howes v Gosford Shire Council, note 43 above, at 63; De Francesco v Barnum, note 2 above, at 438; Millican v Sullivan, note 2 above, at 204; Thorpe v South Australian National Football League (1974) 10 SASR 17 at 38; City and Hackney Health Authority v National Union of Public Employees [1985] IRLR 252 at 256 and Wishart v National Association of Citizens Advice Bureaux Ltd, note 69 above, at 804. See also Australasian Meat Industry Employees’ Union v G & K O’Connor Pty Ltd, note 26 above, at [42] concerning the diminished importance of the personal element in employment in modern times. 134. D Brodie, ‘The Heart of the Matter: Trust and Confidence’ (1996) 25 ILJ 121 at 132. 135. Quinn v Overland, note 27 above, at [98]; Powell v Brent London Borough Council, note 69 above, at 194 and Downe v Sydney West Area Health Service (No 2), note 27 above, at [462]. 136. Powell v Brent London Borough Council, note 69 above, at 194. 137. Re Tottenham Hotspur plc [1994] 1 BCLC 655 and Page One Records Ltd v Britton, note 103 above, WLR at 163–5; All ER at 825–6 and I Spry, note 6 above, p 123. 138. Powell v Brent London Borough Council, note 69 above, at 195 and Irani v Southampton and South West Hampshire Area Health Authority, note 23 above, at 598, 603 and 604; contrast Alexander v Standard Telephones & Cables Plc, note 22 above, at 304 with Anderson v Pringle of Scotland Ltd, note 23 above, at [67]. 139. For example, the degree of propinquity between the parish priest (who was the employer) and the headmaster in Lane v Fasciale, note 52 above, meant that the demise of the personal relationship made an order for specific performance inappropriate: at 37–8 and 41–2; see also McIntosh v Australian Postal Corporation, note 13 above, at [9] (breakdown of critical personal relationships between the employee and others). 140. Turner v Australasian Coal and Shale Employee’s Federation, note 52 above, FCR at 192; ALR at 648; Bostik (Australia) Pty Ltd v Gorgevski (No 1), note 25 above, at 38; Australasian Meat Industry Employees’ Union v G & K O’Connor Pty Ltd, note 26 above, at [43]; Powell v Brent

London Borough Council, note 69 above, at 194; D Brodie, note 62 above, at 47 and J McMullen, ‘A Synthesis of the Mode of Termination of Contracts of Employment’ (1982) 41 Camb LJ 110 at 127, referred to in Visscher v Guidice, note 72 above, at [54]; cf Griffith v Tower Publishing Co Ltd [1896] 1 Ch 21 at 24–5. 141. Australasian Meat Industry Employees’ Union v G & K O’Connor Pty Ltd, note 26 above, at [43]; see also Powell v Brent London Borough Council, note 69 above, at 194 and 195–6 and D Brodie, ‘The Heart of the Matter: Trust and Confidence’, note 134 above, at 130. 142. Hill v CA Parsons & Co Ltd, note 4 above (the reason for the dismissal was pressure placed upon the employer by a union); Irani v Southampton and South West Hampshire Area Health Authority, note 23 above, at 598, 603 and 604 (the reason for the dismissal was a breakdown in the relationship between two employees); Reilly v State of Victoria, note 24 above, at 11 (the reason for the dismissal was redundancy) and Walsh v Police Association, note 23 above, at [66] (the reason for the dismissal was the illness of the employee). 143. Baker v Gough, note 48 above, at 1365 and Turner v Australasian Coal and Shale Employee’s Federation, note 52 above, at 193. 144. See 15.22–15.24; Gryf-Lowczowski v Hinchingbrooke Healthcare NHS Trust, note 78 above, at 447–8 and Robb v Hammersmith and Fulham London Borough Council, note 78 above, at 522. 145. See Downe v Sydney West Area Health Service (No 2), note 27 above, at [455]–[459]. 146. For example, the Full Court in Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1988) 77 FCR 478 at 490; 153 ALR 626 at 638; 79 IR 305 at 316 were prepared to effectively order specific performance of the employment contracts despite incidents on both sides of the dispute that had ‘engendered hostility and, in some cases, justifiable fear’; see also Quinn v Overland, note 27 above, at [98]. 147. See the discussion in Perkins v Grace Worldwide, note 127 above, at 191 and Ali v Southwark London Borough Council, note 130 above, at 582–3 per Millett J (confidence was lost in the nursing employees due to allegations of abuse and cruelty to clients, but the employer’s ‘loss of confidence is not irrevocable, and their confidence could be restored’). 148. Lakshmi v Mid Cheshire Hospitals NHS Trust, note 130 above, at [51]. 149. Lane v Arrowcrest Group Pty Ltd (1990) 27 FCR 427 at 458; 99 ALR 45 at 75–6. Note, however, the approach of the Full Bench of the AIRC to a similar issue arising under the Workplace Relations Act 1996 (Cth) in Wark v Melbourne City Toyota (1999) 89 IR 132 at 137. In Stevenson v United Road Transport Union, note 26 above, All ER at 951–2; ICR at 906, the United Kingdom Court of Appeal made a declaration that the decision dismissing the employee was null and void due to a failure to afford procedural fairness despite the fact that the employee had been convicted of two offences concerning the employer’s property after the dismissal. 150. Australasian Meat Industry Employees’ Union v G & K O’Connor Pty Ltd, note 26 above, at [43] per Gray J. See also Foong v Norfolk Island Hospital (2002) 170 FLR 354; [2002] NFSC 4 at [62]–[63] and Linnane v Monash University (IRCA, North J, 2 January 1996, unreported). 151. Downe v Sydney West Area Health Service (No 2), note 27 above, at [463] per Rothman J and Warren v Mendy, note 111 above, at 114. 152. For example, see Powell v Brent London Borough Council, note 69 above, at 193; Australasian Meat Industry Employees’ Union v G & K O’Connor Pty Ltd, note 26 above and Jones v Gwent County Council, note 23 above. 153. Ali v Southwark London Borough Council, note 130 above, at 582. See also Australasian Meat Industry Employees’ Union v G & K O’Connor Pty Ltd, note 26 above, at [43].

154. Wishart v National Association of Citizens Advice Bureaux Ltd, note 69 above; Lakshmi v Mid Cheshire Hospitals NHS Trust, note 130 above, at [49]–[51] and Chappell v Times Newspapers Ltd, note 52 above, at 179 (a case of an employee’s allegedly ‘divided’ loyalties between his employer and his union). 155. Foong v Norfolk Island Hospital, note 150 above, at [62]–[63] and K Ewing and A Grubb, ‘The Emergence of a New Labour Injunction?’ (1987) 16 ILJ 145 at 160. 156. Most of the discussion in this area of law focuses upon the adequacy of damages as an alternative to specific performance or an injunction. Other alternative remedies at law or under statute are rarely considered as they are so rarely relevant: see 15.50. For ease of reference in the discussion below, the phrase adequacy of damages is used to refer to both the adequacy of damages and the adequacy of other remedies at law and under statute. 157. Dougan v Ley (1946) 71 CLR 142 at 150; Harnett v Yielding (1805) 2 Sch & Lef 549 at 553; Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 at 153; 67 ALR 553 at 557 and Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd, note 39 above, at [13]. Although the judgment of Lord Diplock in American Cyanamid Co v Ethicon Ltd [1975] AC 396 at 406–8; 1 All ER 504 at 509–11 is not completely clear on this point, it seems that his Lordship also considered the issue of adequacy of damages as a threshold and not merely a discretionary issue. 158. See the cases discussed in M Tilbury, note 7 above, pp 274–5, 284–7 and 314–5, to which may now be added Active Leisure (Sports) Pty Ltd v Sportman’s Australia Ltd [1991] 1 Qd R 301 at 311; McHattan v Australian Specialised Vehicle Systems Pty Ltd (1996) 34 IPR 537 and Leisure & Entertainment Pty Ltd v Willis (1996) 64 FCR 205; and G Jones and W Goodhart, note 7 above, pp 3–7 and 18–9 and I Spry, note 6 above, pp 59–60, 383 and 475–6. The proposition that the inadequacy of other remedies should be dealt with as a discretionary consideration, and not a threshold matter, is not beyond dispute: see R Meagher et al, note 12 above, p 656. 159. Evans Marshall & Co Ltd v Bertola SA [1973] 1 All ER 992 at 1005; [1973] 1 WLR 349 at 379 per Sachs LJ. This approach has been endorsed in Australia in City of Melbourne v Hamas Pty Ltd (1987) 62 LGRA 250; State Transport Authority v Apex Quarries Ltd [1988] VR 187 at 193; Reilly v State of Victoria, note 24 above, at 11; Walsh v Police Association, note 23 above, at [62] and Sea Acres Rainforest Centre Pty Ltd v State of New South Wales (2001) 109 IR 56 at 69. See also M Tilbury, note 7 above, pp 281–7 and 315–6. 160. R Meagher et al, note 12 above, p 712. See also Attorney-General v Hallett (1847) 16 M & W 569 at 581; 153 ER 1316 at 132. 161. Coulls v Bagot’s Executor and Trustee Co Ltd (1967) 119 CLR 460 at 504. 162. Marco Productions Limited v Pagola [1945] 1 KB 111 at 114 and I Spry, note 6 above, pp 584– 5. 163. Byrne v Australian Airlines Limited, note 52 above, CLR at 428; ALR at 432 per Brennan CJ, Dawson and Toohey JJ; see 10.80–10.84 and 14.35–14.39. 164. Marsh v National Autistic Society [1993] ICR 453 at 459; Lane v Fasciale, note 52 above, at 42– 3 illustrates the same approach to an employee engaged for a fixed term. 165. Linnane v Monash University, note 150 above and Paras v Public Service Body Head of the Department of Infrastructure, note 24 above, at [47]. 166. Note Boyle v An Post [1992] 2 Irish Reports 437 (damages inadequate to compensate for the financial hardship and distress caused by late payment of wages). 167. Silver v Dome Resources NL (2007) 62 ACSR 539; [2007] NSWSC 455 at [117]–[120] (aff’d

(2008) 72 NSWLR 693; [2008] NSWCA 322 at [54]); R Meagher et al, note 12 above, p 661; Beswick v Beswick [1968] AC 58; [1967] 2 All ER 1197 (specific performance of obligation to pay an annuity) and Willis v Health Communications Network Ltd (2007) 167 IR 425; [2007] NSWCA 313 at [79]–[80]. 168. See Gryf-Lowczowski v Hinchingbrooke Healthcare NHS Trust, note 78 above, at 449; Robb v Hammersmith and Fulham London Borough Council, note 78 above, at 523 and Paras v Public Service Body Head of the Department of Infrastructure, note 24 above. 169. See D Brodie, note 62 above, at 43 and K Ewing, note 66 above, at 432; see also Foster v Mountford (1976) 29 FLR 233 (damages inadequate to alleviate the social wrongs that would be caused by the breach of confidence) and Quinn v Overland, note 27 above, at [101]. 170. See 14.77. 171. Burazin v Blacktown City Guardian Pty Ltd (1996) 142 ALR 144 at 156. 172. See 14.92–14.94. 173. Reilly v State of Victoria, note 24 above, at 11; Hughes v London Borough of Southwark [1988] IRLR 56 at [12] and Alexander v Standard Telephones & Cables Plc, note 22 above, at 308. 174. Paras v Public Service Body Head of the Department of Infrastructure, note 24 above, at [29]; there has been judicial recognition of the stigma in cases such as Rankin v Marine Power International Pty Ltd (2001) 107 IR 117; [2001] VSC 150 at [247]; Williams v Printers Trade Services (1984) 7 IR 82 at 85 per Toohey J (summary dismissal ‘carries with it a certain obloquy’) and Johnson v Unisys Ltd [2003] 1 AC 518; [2001] 2 All ER 801 at [77]. 175. See 14.86; Linnane v Monash University, note 150 above; Walsh v Police Association, note 23 above, at [63]; Quinn v Overland, note 27 above, at [107]–[108]; Foster v Secretary to the DEECD [2008] VSC 504 at [47] and Irani v Southampton and South West Hampshire Area Health Authority, note 23 above, at 596 and 605. See also Watson v Durham University [2008] EWCA Civ 1266 at [24]. 176. Hughes v London Borough of Southwark, note 173 above, at [12]; Powell v Brent London Borough Council, note 69 above, at 196 and 199; Quinn v Overland, note 27 above, at [109]– [111]; Vine v National Dock Labour Board, note 43 above, QB at 676; All ER at 10 and on appeal at [1957] AC 488 at 500, 504 and 507; [1956] 3 All ER 939 at 944, 946 and 948 and Foster v Secretary to the DEECD, note 175 above, at [46]. 177. Quinn v Overland, note 27 above, at [101] per Bromberg J. On the recognition by law of other non-pecuniary benefits see 8.37–8.47. 178. Maritime Union of Australia v Patrick Stevedores Operations No 1 Pty Ltd (1998) 77 FCR 456 at 464–5 and 472; 153 ALR 602 at 603 and 620, and on appeal at Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 77 FCR 478 at 489; 153 ALR 626 at 637–8; 79 IR 305 at 315. 179. See, for example, Hawthorn Football Club v Harding, note 99 above, at 60 and, on a related point, Warner Bros Pictures Inc v Nelson, note 100 above, KB at 220–1; All ER at 167 and Evening Standard Co Ltd v Henderson, note 108 above, at 594. 180. Reilly v State of Victoria, note 24 above, at 11–12. See also Robb v Hammersmith and Fulham London Borough Council, note 78 above, at 522 and Walsh v Police Association, note 23 above, at [63]. 181. See 3.62 and 5.112. 182. Dairy Crest Ltd v Pigott [1989] ICR 92 at 96; Lawrence David Ltd v Ashton [1991] 1 All ER 385

at 393; [1989] ICR 123 at 132; PSM International Ltd v Whitehouse [1992] FSR 489 at 499; Slevin v Associated Insurance Brokers of Australia (Qld) Pty Ltd [1996] QCA 18 and I Spry, note 6 above, pp 68–9. 183. Fryar v System Services Pty Ltd (1996) 137 ALR 321 at 331; Sinclair v Anthony Smith & Associates Pty Ltd (IRCA, 1 December 1995, unreported); Martin v Tasmania Development and Resources (1999) 163 ALR 79; 89 IR 98; [1999] FCA 593 at [54] and [92] (aff’d on other grounds (2000) 97 IR 66; [2000] FCA 414) and Carter v The Dennis Family Corporation [2010] VSC 406 at [54]. 184. See, for example, Walsh v Police Association, note 23 above, at [66] and 14.90. 185. I Spry, note 6 above, pp 63–7. Hence in Pearne v Lisle (1749) Amb 75; 27 ER 47 specific performance was refused in relation to delivery of slaves because other slaves were available for purchase in the market that were just as good. 186. JC Williamson Ltd v Lukey, note 8 above, at 297; M Tilbury, note 7 above, p 297. The existence of a concurrent remedy does not deprive the court exercising equitable jurisdiction of the power to award coercive relief: Howes v Gosford Shire Council, note 43 above, at 63. 187. David Jones Ltd v Federated Storemen and Packers Union of Australia (NSW) (1985) 14 IR 75 at 81–2; McMahon v Labour Council of NSW (1985) 10 IR 217 at 220 and Harry M Miller Attractions Pty Ltd v Actors’ and Announcers’ Equity Association [1971] NSWR 614. Contrast with National Workforce Pty Ltd v Australian Manufacturing Workers’ Union [1998] 3 VR 265 and the cases arising under the Trade Practices Act 1974 (Cth) discussed therein. As to the occasional reluctance of courts to interfere with the delicate mechanisms of industrial disputes and negotiations by way of mandatory injunctions see Jakeman v South West Thames Regional Health Authority [1990] IRLR 62 at [39]; Australian Paper Ltd v Communications, Electrical, Electronic, Energy & Allied Services Union (1998) 81 IR 15 at 24–5; Hayman Reese v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2001) 108 IR 433; [2001] FCA 1279 at [37] and ACI Operations Pty Ltd v Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union (2000) 173 ALR 109; 96 IR 228; [2000] FCA 393. 188. Baker v City of Salisbury, note 24 above, at 171 and Hill v CA Parsons & Co Ltd, note 4 above, Ch at 321; All ER at 1355; see also Linnane v Monash University, note 150 above and 15.94 and 15.95. 189. See the discussion of agreed damages clauses in 14.131. 190. Hamilton v Lethbridge (1912) 14 CLR 236 at 246, 259 and 276. 191. BearingPoint Australia Pty Ltd v Hillard, note 103 above, at [151]; see, however, Tullett Prebon (Australia) Pty Ltd v Purcell, note 102 above, at [98]–[103] and William Robinson & Co Ltd v Heuer, note 57 above, at 458. 192. Warner Brothers Pictures Incorporated v Nelson, note 100 above, KB at 220–1; All ER at 167. 193. Bahr v Nicolay (No 2) (1988) 164 CLR 604 at 619; 78 ALR 1 at 9–10; Australian National Airlines Commission v Robinson [1977] VR 87 at 91–6; Australian Hardwoods Pty Ltd v Commissioner for Railways, note 12 above, at 742; Kaufman v McGillicuddy (1914) 19 CLR 1 at 11–12 and 14; Measures Brothers Limited v Measures [1910] 2 Ch 248 at 254; Chappell v Times Newspapers Ltd, note 52 above, at 174 and 177 and Green v Sommerville (1979) 141 CLR 594 at 611; 27 ALR 351 at 364. 194. Mehmet v Benson (1965) 113 CLR 295 at 307 and 314; see Harrigan v Brown [1967] 1 NSWR 342 at 347–8 (injunction refused due to failure of employer to comply with what would now be

called an intermediate term). The lack of readiness or willingness to comply with non-essential terms may, however, be relevant in considering whether any particular hardship or unfairness might arise from the specific performance of the contract: I Spry, note 6 above, p 218 and G Jones and W Goodhart, note 7 above, p 12. 195. Measures Brothers Limited v Measures, note 193 above, at 254 per Cozens-Hardy MR. See also General Bill Posting Co Ltd v Atkinson [1909] AC 118; Kaufman v McGillicuddy, note 193 above, at 11–12 and 14; Briggs v Oates [1991] 1 All ER 407 at 412–14; [1990] ICR 473 at 479– 80 and Rock Refrigeration Ltd v Jones [1997] 1 All ER 1; [1997] ICR 938. 196. Associated Newspapers v Bancks (1951) 83 CLR 322 at 338 and Fechter v Montgomery (1863) 33 Beav 21; 55 ER 274 at 276. It is implicit in cases such as Australian Rugby League Ltd v Cross (1997) 39 IPR 111 and Curro v Beyond Productions Pty Ltd, note 99 above, at 342 that the absence of an express or implied right to work would render an exclusive service provision an unreasonable restraint of trade. 197. See 11.65. 198. Spencer v Marchington [1988] IRLR 392 at 395 and Jeffress Advertising Pty Ltd v Barlow (SC(Tas), Zeeman J, 15 October 1993, unreported), a point not considered on appeal in Barlow v Neville Jeffress Advertising Pty Ltd, note 42 above. 199. Gordon v State of Victoria, note 52 above, at 239–40; Lloyd v Foster (1988) 30 AILR at 6; Australian National Airlines Commission v Robinson, note 193 above, at 91–6; Chappell v Times Newspapers Ltd, note 52 above, at 174, 177 and 179 and McPherson v London Borough of Lambeth, note 67 above, at 476. See also Lakshmi v Mid Cheshire Hospitals NHS Trust, note 130 above, at [54] where relief was refused because the employee was in breach of contract by authorising the cremation of 46 bodies without inspecting them. 200. A course taken in Mehmet v Benson, note 194 above, at 315 and Australasian Meat Industry Employees’ Union v G & K O’Connor Pty Ltd, note 26 above, at [56]–[58] 201. Maritime Union of Australia v Patrick Stevedores Operations No 1 Pty Ltd (1998) 153 ALR 602; (1998) 77 FCR 456 at 465–6; 153 ALR 602 at 614 and Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 77 FCR 478 at 486–7; 153 ALR 626 at 635; 79 IR 305 at 312–13. 202. Reilly v State of Victoria, note 24 above, at 12; Lucy v The Commonwealth, note 22 above, at 238 and 245 (engaging in alternative employment that was forbidden while the contract was on foot); Dietman v Brent London Borough Council, note 79 above, at 755 (aff’d [1988] ICR 852); Boyo v Lambeth London Borough Council, note 52 above, at 743 and 747; Brompton v AOC International Ltd [1997] IRLR 639 (engaging in alternative work out of necessity was not acceptance of repudiation); Conway-Cook v Town of Kwinana (2001) 108 IR 421; [2001] WASCA 250 at [33] (accepting casual employment did not disable the employee from accepting other employment); Ryder v Frohlich [2004] NSWCA 472 at [115]–[125] and Wheeler v Philip Morris, note 36 above, at 310–11; see also 10.98. Cf Gunton v Richmond upon-Thames London Borough Council, note 38 above. 203. White v Bristol Rugby Ltd [2002] IRLR 204 at [60]. 204. I Spry, note 6 above, p 91; JC Williamson Ltd v Lukey, note 8 above, at 298; Page One Records Ltd v Britton, note 103 above, WLR at 165; All ER at 826–7 and Linfield Linen Pty Ltd v Nejain (1951) 51 SR (NSW) 280 at 281. 205. The remedy actually sought was an injunction and a declaration. The injunction was sought to prevent the defendant obstructing the plaintiff in the exercise of the rights of the plaintiff in his

office. Knight Bruce VC acknowledged that the relief sought by the plaintiff was analogous to specific performance: Pickering v Bishop of Ely, note 2 above, Y and CC at 267; ER at 117. 206. Pickering v Bishop of Ely, note 2 above, Y and CC at 267; ER at 117–8 per Knight Bruce VC. See also Stocker v Wedderburn, note 9 above, K and J at 404; ER at 1167; Johnson v The Shrewsbury and Birmingham Railway Company, note 53 above, De GM & G at 927; ER at 363; Firth v Ridley, note 55 above, and Millican v Sullivan, note 2 above, at 204. 207. See, for example, Baker v Gough, note 48 above, at 1365. 208. I Spry, note 6 above, pp 92–4 and R Meagher et al, note 12 above, p 679. 209. Price v Strange [1978] Ch 337 at 352–3, 356–7 and 367–8; [1977] 3 All ER 371 at 379–80, 383 and 392 and Macaulay v Greater Paramount Theatres Ltd (1921) 22 SR (NSW) 66 at 74. 210. Trade Union and Labour Relations (Consolidation) Act 1992 (UK) s 236. See also D Brodie, note 62 above, at 45–6 and McPherson v London Borough of Lambeth, note 67 above, at 475. 211. See, for example, Baker v Gough, note 48 above, at 1365. 212. See I Spry, note 6 above, pp 543–5. 213. JC Williamson Ltd v Lukey, note 8 above, at 292–3, 293–4 and 297–8; Ryan v Mutual Tontine Westminster Chambers Association, note 3 above, at 123, 125 and 128; Gregory v Philip Morris Ltd, note 52 above, at 482; G Furness, note 66 above, at 248–9 and D Brodie, note 62 above, at 40. A related problem arises when the obligation imposed by the contract is uncertain: Kemble v Kean, note 46 above, Sim at 337–8 and Firth v Ridley, note 55 above, Beav at 520; ER at 470. The link between the need for certainty and the concept of constant supervision by the court was discussed in Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1; 153 ALR 643; 79 IR 339 at [78]–[80] (the MUA case). 214. The MUA case, note 213 above, at [78]; Turner v Australasian Coal and Shale Employee’s Federation, note 52 above, FCR at 192–3; ALR at 648–9 and CH Giles & Co Ltd v Morris, note 9 above WLR at 318–19; All ER at 969. 215. Argyll Stores, note 33 above. 216. The MUA case, note 213 above, at [79] per Brennan CJ, McHugh, Gummow, Kirby and Hayne JJ, referring to Argyll Stores, note 33 above, AC at 13–14; All ER at 303 and Witham v Holloway (1995) 183 CLR 525 at 534; 131 ALR 401 at 408. 217. CH Giles & Co Ltd v Morris, note 9 above, WLR at 318–9; All ER at 969–70; Baker v City of Salisbury, note 24 above, at 171; Quinn v Overland, note 27 above, at [99] and Turner v Australasian Coal and Shale Employee’s Federation, note 52 above, FCR at 192–3; ALR at 648– 9. 218. Cf Argyll Stores, note 33 above. 219. Argyll Stores, note 33 above and CH Giles & Co Ltd v Morris, note 9 above, WLR at 318–9; All ER at 969–70. 220. I Spry, note 6 above, p 107. See also Maritime Union of Australia v Patrick Stevedores Operations No 1 Pty Ltd (1998) 77 FCR 456 at 472; 153 ALR 602 at 619–20. 221. Maritime Union of Australia v Patrick Stevedores Operations No 1 Pty Ltd (1998) 153 ALR 602; (1998) 77 FCR 456 at 472; 153 ALR 602 at 619–20. 222. For example, see Tradition Australia Pty Ltd v Gunson, note 57 above, at [34]–[36]; Kemble v Kean, note 46 above, Sim at 337–8 and Firth v Ridley, note 55 above, Beav at 520; ER at 470.

223. Maritime Union of Australia v Patrick Stevedores Operations No 1 Pty Ltd (1998) 77 FCR 456 at 472–3; 153 ALR 602 at 620 and the MUA case, note 213 above, at [80]. 224. I Spry, note 6 above, p 106. 225. See 15.67. 226. See generally R Meagher et al, note 12 above, pp 98–102; P Young et al, note 49 above, pp 180– 4; M Spence, ‘Equitable Defences’ in P Parkinson (ed), The Principles of Equity, 2nd ed, Lawbook Co, Sydney, 2003, pp 1021–5; Black Uhlans Inc v Crime Commission (NSW) [2002] NSWSC 1060 at [161]–[183]; Deeson Heavy Haulage Pty Ltd v Cox (2009) 82 IPR 521; [2009] QSC 277 at [273]; Karl Suleman Enterprizes Pty Ltd v Babanour (2004) 49 ACSR 612; [2004] NSWCA 214 at [54] and Harrigan v Brown, note 194 above. 227. See generally R Meagher et al, note 12 above, pp 670–4; P Young et al, note 49 above, pp 1190– 4 and I Spry, note 6 above, pp 196–203. 228. Provident Financial Group v Hayward, note 108 above, All ER at 305; ICR at 168–9; Buckenara v Hawthorn Football Club Ltd, note 108 above, at 47; BDO Group Investments (NSW-VIC) Pty Ltd v Ngo [2010] VSC 206 at [62]–[65] and Tullett Prebon (Australia) Pty Ltd v Purcell, note 102 above, at [104]–[107]. 229. Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1; 153 ALR 643; 79 IR 339 at [65]; Redman v Southern Cross Broadcasting (Australia) Ltd [2001] WASC 9 at [26] and Hughes v London Borough of Southwark, note 173 above, at [14]. See also Dunn v Sydney College of the Arts (1987) 21 IR 405 at 407. 230. Gall v Mitchell (1924) 35 CLR 222 at 230; Hawthorn Football Club v Harding, note 99 above, at 60 and I Spry, note 6 above, pp 201–2. Note the different view on this point advanced in R Meagher et al, note 12 above, pp 673–4 and Patel v Ali [1984] 1 All ER 978 at 982. 231. See Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1; 153 ALR 643; 79 IR 339 at [65] and Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 77 FCR 478 at 488; 153 ALR 626 at 636–7; 79 IR 305 at 314. 232. See, for example, PSM International Ltd v Whitehouse, note 182 above, at 498. 233. Where the plaintiff seeks interlocutory relief then bare delay is relevant: see 15.85. 234. Lamshed v Lamshed (1963) 109 CLR 440 at 453; Fitzgerald v Masters (1956) 95 CLR 420 at 433 (note, however, the dicta at 440–1) and R Meagher et al, note 12 above, pp 1040–3. 235. Fitzgerald v Masters, note 234 above, at 433. 236. On the differences between laches, acquiescence and estoppel, see M Spence, ‘Equitable Defences’ in P Parkinson, note 226 above, p 1013. 237. Lamshed v Lamshed, note 234 above, at 453 and 455 and R Meagher et al, note 12 above, pp 1039–40. Or as Young J pithily put it in Network Ten Ltd v Fulwood (1995) 62 IR 43 at 47: ‘As an equitable defence, delay plus hardship equals laches’. 238. Lamshed v Lamshed, note 234 above, at 455–6. 239. R Meagher et al, note 12 above, p 1043, approved in Savage v Lunn (NSWCA, Handley, Sheller JJA and Sheppard AJA, 9 March 1998, unreported) and Lancashire Fires Ltd v SA Lyons & Co Ltd [1996] FSR 629 at 674–5 (employee intentionally kept the breach of confidence a secret from former employer causing the delay). 240. Dietman v Brent London Borough Council, note 79 above, at 756 (aff’d [1988] ICR 852); Lane v Arrowcrest Group Pty Ltd, note 149 above, FCR at 458; ALR at 75–6 and Dunham v Randwick

Imaging Pty Limited (1994) 122 ALR 323 at 332; (1994) 1 IRCR 54 at 64. 241. On the one hand, see Orr v Ford (1989) 167 CLR 316 at 340; 84 ALR 146 at 159–60 and R Meagher et al, note 12 above, pp 1036–7. On the other, see M Tilbury, note 7 above, p 292 and cases such as Habib Bank Ltd v Habib Bank AG Zurich [1981] 1 WLR 1265 at 1285 and 1287; 2 All ER 650 at 666 and 667. 242. On releases of equitable and legal rights, see R Meagher et al, note 12 above, Ch 35. 243. Orr v Ford, note 241 above, CLR at 338; ALR at 158. 244. See 10.89. 245. Udall v Capri Lighting Ltd [1987] 3 All ER 262 at 267. 246. Norton v Angus (1926) 38 CLR 523 at 534. 247. Marks v CCH Australia [1999] 3 VR 513 at 535. 248. O Mustad & Son v S Allcock & Co Ltd [1963] 3 All ER 416 at 418 (decided in 1928); see also Westpac Banking Corporation v John Fairfax Group Pty Ltd (1991) 19 IPR 513 at 524–5 and Print Investments Pty Ltd v Art-Vue Printing Ltd (1983) 8 IR 385 at 389. 249. Network Ten Ltd v Fulwood, note 237 above, at 45–6; Curro v Beyond Productions Pty Ltd, note 99 above, at 347–8 and Provident Financial Group v Hayward, note 108 above, All ER at 302–4; ICR at 164–8. See also I Spry, note 6 above, pp 135–6. 250. Johnson v Agnew, note 36 above, AC at 398; All ER at 894; see 15.13. 251. See 10.97. 252. McKenna v Richey [1950] VR 360 at 372. 253. See 15.117. 254. Laurence David Ltd v Ashton, note 182 above, All ER at 393; ICR at 132 per Fox and Balcombe LJJ; Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1; 153 ALR 643; 79 IR 339 at [78]–[80]; Australian Paper Ltd v Communications, Electrical, Electronic, Energy & Allied Services Union, note 187 above, at 22–3; Argyll Stores, note 33 above, AC at 13–14; All ER at 303 and ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248 at 259–60; 110 ALR 47 at 59–61. 255. See 7.124. 256. Buckenara v Hawthorn Football Club Ltd, note 108 above, at 46–7 and William Robinson & Co Ltd v Heuer, note 57 above, at 459. In certain circumstances, it may be appropriate to grant an interlocutory injunction in terms broader than the protection afforded by a contract: see, for example, Roger Bullivant Ltd v Ellis [1987] ICR 464 at 474–5. 257. Ryan v Mutual Tontine Westminster Chambers Association, note 3 above, at 123 and 125; Ogden v Fossick, note 2 above and Brett v The East India and London Shipping Company Limited, note 2 above, at 410–11 and 522–3. 258. Within the rather unsatisfactory distinction drawn been civil and criminal contempts, breaches of orders for specific performance and undertakings are civil contempts, except for those breaches of undertakings that involve deliberate defiance which are classified as criminal contempts: Witham v Holloway, note 216 above, CLR at 534; ALR at 408. On the breach of undertakings see Australasian Meat Industry Employees Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98; 66 ALR 577. 259. Hinch v Attorney-General (Vic) (1987) 164 CLR 15 at 49; 74 ALR 353 at 379 per Deane J and

Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483 at 497–8. 260. Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1; 153 ALR 643; 79 IR 339 at [78]–[80]; see 15.66. 261. D Brodie, note 62 above, at 42. 262. See 7.111; see generally R Dean, The Law of Trade Secrets and Personal Secrets, 2nd ed, Lawbook Co, Sydney, 2002, Ch 6. 263. Attorney General v Observer Ltd [1990] 1 AC 109 at 261 and 281; [1988] 3 All ER 545 at 643 and 657–8; AG Australia Holdings Ltd v Burton (2002) 58 NSWLR 464; [2002] NSWSC 170 at [224]–[230] and P Finn, Fiduciary Obligations, Law Book Company, Sydney, 1977, p 161. 264. Cranleigh Precision Engineering Ltd v Bryant [1965] 1 WLR 1293 at 1311; [1964] 3 All ER 289 at 296 and Liquid Veneer Co Ltd v Scott (1912) 29 RPC 639 at 644. 265. Surveys & Mining Ltd v Morrison [1969] Qd R 470 at 477–8. 266. Attorney General v Observer Ltd, note 263 above, AC at 281; All ER at 657 per Lord Goff (‘knowledge [includes] circumstances where the confidant has deliberately closed his eyes to the obvious’); National Education Advancement Programs (NEAP) Pty Ltd v Ashton (1995) 128 FLR 334 at 344–5; Ormonoid Roofing and Asphalts Ltd v Bitumenoids Ltd (1930) 31 SR (NSW) 347; Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd [1967] VR 37 at 45; British Industrial Plastics Ltd v Ferguson [1940] 1 All ER 479 at 481–2 (an unusual case, perhaps concerning a conspiracy to which different rules will apply, about whether an employer has constructive knowledge of a fact it only suspects to be true) and F Gurry, Breach of Confidence, Clarendon Press, Oxford, 1984, pp 472–3. 267. Fraser v Evans [1969] 1 QB 349 at 361 per Lord Denning MR; Johns v Australian Securities Commission (1993) 178 CLR 408 at 460; 116 ALR 567 at 602; Printers and Finishers Ltd v Holloway [1964] 1 WLR 1 at 6–7; Foster v Mountford, note 169 above, at 237–8; G v Day [1982] 1 NSWLR 24 at 35; Wheatley v Bell [1982] 2 NSWLR 544 at 549–50 and Retractable Technologies Inc v Occupational & Medical Innovations Ltd (2007) 72 IPR 58; [2007] FCA 545 at [67]–[77]; note, however, Union Carbide Corp v Naturin Ltd [1987] FSR 538 at 549. 268. Printers and Finishers Ltd v Holloway, note 267 above, at 6–7. 269. Malone v Metropolitan Police Commissioner (No 2) [1979] Ch 344 at 361; 2 All ER 620 at 634; Cultus Petroleum v OMV Australia Pty Ltd (1999) 32 ACSR 1; [1999] NSWSC 422 at [64]–[65] and Lancashire Fires Ltd v SA Lyons & Co Ltd, note 239 above, at 676–8. 270. See generally Johns v Australian Securities Commission, note 267 above, CLR at 460; Retractable Technologies Inc v Occupational & Medical Innovations Ltd, note 267 above, at [67]–[86]; R Toulson and C Phipps, Confidentiality, Sweet & Maxwell, London, 1996, pp 73 and 94–7 and P D Finn, Fiduciary Obligations, note 263 above, pp 162–3. 271. Printers and Finishers Ltd v Holloway, note 267 above at 6; see 16.42–16.47. 272. See generally J Heydon and M Leeming, Jacobs’ Law of Trusts in Australia, 7th ed, LexisNexis Butterworths, Sydney, 2006, pp 282–91. 273. Victoria University of Technology v Wilson (2004) 60 IPR 392; [2004] VSC 33 at [181]. 274. These three bases are discussed in 15.72–15.74. There are other bases that are not relevant here, such as the liability for intermeddling in the affairs of a trust so as to qualify as a trustee de son tort: see Taylor v Davies [1920] AC 636 and Soar v Ashwell [1893] 2 QB 390. 275. Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; 236 ALR 209 (Farah

Constructions) at [160]–[163]; this is liability under the second limb in Barnes v Addy (1874) LR 9 Ch App 244 at 251–2. 276. Consul Development Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373 at 397; 5 ALR 231 at 251 (Consul Development); Warman International Ltd v Dwyer (1995) 182 CLR 544 at 564–5; 128 ALR 201 at 213–14 (Warman). See also Halliday & Nicholas v Corsiatto [2001] 11 ANZ Ins Cas 61–505 and Green and Clara Pty Ltd v Bestobell Industries Pty Ltd [1982] WAR 1 at 11–12. 277. Farah Constructions, note 275 above, at [160]. 278. Green v Bestobell Industries Pty Ltd, note 276 above, at 11–12 and Timber Engineering Co Pty Ltd v Anderson [1980] 2 NSWLR 488 at 495. 279. Farah Constructions, note 275 above, at [179]; Consul Development, note 276 above, CLR at 398; ALR at 252 and J Heydon and M Leeming, note 272 above, p 291. 280. Manildra Laboratories Pty Ltd v Campbell [2009] NSWSC 987 at [187]. 281. Victoria University of Technology v Wilson, note 273 above, at [188] and Twinsectra Ltd v Yardley [2002] 2 AC 164; 2 All ER 377 at [20]. 282. Farah Constructions, note 275 above, at [170]. 283. Farah Constructions, note 275 above, at [174]–[178]; Consul Development, note 276 above, CLR at 398 and 412; ALR at 252 and 264 and Elders Trustee & Executor Co Ltd v EG Reeves Pty Ltd (1987) 78 ALR 193 at 239. 284. Timber Engineering Co Pty Ltd v Anderson, note 278 above, at 495ff. 285. Farah Constructions, note 275 above, at [161] and Manildra Laboratories Pty Ltd v Campbell, note 280 above, at [170]–[172]. 286. Manildra Laboratories Pty Ltd v Campbell, note 280 above, at [174]. 287. P Young et al, note 49 above, pp 456–7; Agip (Africa) Ltd v Jackson [1990] Ch 265 at 291–2; [1992] 4 All ER 385 at 403–4 (aff’d [1991] Ch 547; [1992] 4 All ER 451); Victoria University of Technology v Wilson, note 273 above, at [192] and Digital Pulse Pty Limited v Harris (2002) 40 ASCR 487; [2002] NSWSC 33 at [25] (not affected by the partly successful appeal at (2003) 56 NSWLR 298; 197 ALR 626; [2003] NSWCA 10). 288. P Young et al, note 49 above, p 458; Consul Development, note 276 above, CLR at 398 and 412; ALR at 252 and 264; United States Surgical Corp v Hospital Products International Pty Ltd [1983] 2 NSWLR 157 at 252–6 and DPC Estates Pty Ltd v Grey [1974] 1 NSWLR 443 at 459. 289. Evans v European Bank Ltd (2004) 61 NSWLR 75; [2004] NSWCA 82 at [160]. 290. Farah Constructions, note 275 above, at [118]. 291. Farah Constructions, note 275 above, at [118]–[120]. 292. Agip (Africa) Ltd v Jackson, note 287 above, Ch at 291–2; All ER at 403–4 (receipt by bank of employee’s stolen funds) and Victoria University of Technology v Wilson, note 273 above, at [192] (receipt by third party who did not know there was a breach). 293. Such interlocutory injunctions have been granted in Jones v Lee, note 24 above; Reilly v State of Victoria, note 24 above; Baker v City of Salisbury, note 24 above; Irani v Southampton and South West Hampshire Health Authority, note 23 above; Jones v Gwent County Council, note 23 above; Linnane v Monash University, note 150 above; Anderson v Pringle of Scotland Ltd, note 23 above; Walsh v Police Association, note 23 above and Crisp v Holden, note 23 above.

294. For example, Peace v City of Edinburgh, note 23 above. 295. See 15.27; Lawrence David Ltd v Ashton, note 182 above; Slevin v Associated Insurance Brokers of Australia (Qld) Pty Ltd, note 182 above and Network Ten Ltd v Fulwood, note 237 above. 296. Maritime Union of Australia v Patrick Stevedores Operations No 1 Pty Ltd (1998) 77 FCR 456 (aff’d (1998) 77 FCR 478 and (1998) 195 CLR 1) and Australasian Meat Industry Employees’ Union v G & K O’Connor Pty Ltd, note 26 above. 297. Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd, note 39 above at [11]–[17], [60] and [91]. 298. Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd, note 39 above at [11]–[17] and Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1; 153 ALR 643; 79 IR 339 at [35]. 299. See I Spry, note 6 above, pp 571–2. 300. On the obtaining of ex parte injunctions, see R Meagher et al, note 12 above, pp 794–5 and I Spry, note 6 above, pp 511–14. 301. Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd, note 39 above, at [9] and Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 77 FCR 478 at 490; 153 ALR 626 at 638; 79 IR 305 at 316. 302. Garden Cottage Foods Ltd v Milk Marketing Board [1984] AC 130 at 140; [1983] 2 All ER 770 at 774–5 and Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1; 153 ALR 643; 79 IR 339 at [119]. 303. Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 77 FCR 478 at 490; 153 ALR 626 at 638; 79 IR 305 at 316; Thompson v Park [1944] KB 408 at 409–10 and Hughes v London Borough of Southwark, note 173 above, at 58. As to the status quo in actions concerning confidentiality, see R Dean, note 262 above, pp 302–3 and Lion Laboratories Ltd v Evans [1985] QB 526 at 551; [1984] 2 All ER 417 at 442. 304. Walsh v Police Association, note 23 above, at [58]–[60] and Garden Cottage Foods Ltd v Milk Marketing Board, note 302 above, AC at 140; All ER at 774–5. 305. Australian Broadcasting Corp v O’Neill (2006) 227 CLR 57; 229 ALR 457 at [65]–[72] and [19]; Beecham Group Ltd v Bristol Laboratories Ltd (1968) 118 CLR 618 at 622–3 and Plaintiff M175/10 v Minister for Immigration and Citizenship (2011) 279 ALR 1 at [15]–[16]. 306. American Cyanamid v Ethicon Ltd, note 157 above, AC at 407; All ER at 509–10. This approach was applied in the High Court in Castlemaine Tooheys Ltd v South Australia, note 157 above, CLR at 153; ALR at 557; Fejo v Northern Territory (1998) 195 CLR 96; 156 ALR 721 at [26] and Murphy v Lush (1986) 65 ALR 651 at 653. 307. Australian Broadcasting Corp v O’Neill, note 305 above, at [65]–[72] and [19]; Beecham Group Ltd v Bristol Laboratories Ltd, note 305 above, at 622–3 and A Mason, ‘Declarations, Injunctions and Constructive Trusts: Divergent Developments in England and Australia’ (1980) 11 U Qld LJ 121 at 127–8. The difference between the two tests may be more apparent than real: see R Meagher et al, note 12 above, pp 781–2. 308. Beecham Group Ltd v Bristol Laboratories Ltd, note 305 above, at 622–3 and Australian Broadcasting Corp v O’Neill, note 305 above, at [19] and [65]. 309. Beecham Group Ltd v Bristol Laboratories Ltd, note 305 above, at 622; Australian Broadcasting Corp v O’Neill, note 305 above, at [65] and American Cyanamid v Ethicon Ltd, note 157 above, AC at 407; All ER at 509–10.

310. I Spry, note 6 above, p 459. As to the relevance of the availability of damages in equity, see 15.50. 311. Lion Laboratories Ltd v Evans, note 303 above, QB at 551; All ER at 442. 312. Castlemaine Tooheys Ltd v South Australia, note 157 above, CLR at 153–4; ALR at 557. 313. See 15.28. 314. Beecham Group Ltd v Bristol Laboratories Ltd, note 305 above, at 622. 315. American Cyanamid v Ethicon Ltd, note 157 above, AC at 407; All ER at 510 and Beecham Group Ltd v Bristol Laboratories Pty Ltd, note 305 above, at 622. 316. American Cyanamid v Ethicon Ltd, note 157 above, AC at 407; All ER at 510; Beecham Group Ltd v Bristol Laboratories Pty Ltd, note 305 above, at 622 and Cohen v Peko-Wallsend Ltd (1986) 61 ALJR 57 at 59. If the answers to disputed questions of law or fact are clear, the court may, if it sees fit, proceed to resolve those questions: see, for example, the approach of Chadwick J in Jones v Gwent County Council, note 23 above, at 524 and 526. 317. Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd, note 39 above. 318. ICAP Australia Pty Ltd v BGC Partners (Australia) Pty Ltd, note 115 above, at [51]–[61]. 319. Films Rover International Ltd v Cannon Film Sales Ltd [1986] 3 All ER 772 at 780–1 per Hoffman J, approved by Gummow J in Businessworld Computers Pty Ltd v Australian Telecommunications Commission (1988) 82 ALR 499 at 501–3. See also Beecham Group Ltd v Bristol Laboratories Ltd, note 305 above, at 623. 320. Bullock v Federated Furnishing Trades Society of Australia (1985) 5 FCR 464 at 472; 60 ALR 235 at 241 per Woodward J; Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd, note 39 above, at [18]; Lane v Fasciale, note 52 above, at 43 and Re Printing & Kindred Industries Union; Ex parte Nationwide News Pty Ltd (1994) 122 ALR 303 at 316 and the cases cited therein. 321. American Cyanamid Co v Ethicon Ltd, note 157 above, AC at 408; All ER at 510. 322. See 15.43–15.51. 323. American Cyanamid Co v Ethicon Ltd, note 157 above, AC at 408; All ER at 510 and Dairy Crest Ltd v Pigott, note 182 above, at 97. 324. Jakeman v South West Thames Regional Health Authority, note 187 above, at 66 and Boyle v An Post, note 166 above (mandatory interlocutory injunction awarded requiring the payment of wages). 325. See 15.50. An undertaking by the defendant to keep an account may be one alternative to granting an interlocutory injunction: see Beecham Group Ltd v Bristol Laboratories Ltd, note 305 above, at 625 and I Spry, note 6 above, pp 476–8. 326. See 15.60. 327. Lane v Fasciale, note 52 above and Hughes v London Borough of Southwark, note 173 above. See also Ryan v Metropolitan Transit Authority (1988) 30 AILR at 7 where the public interest weighed against reinstating a demoted railway employee accused of deserting his duties to attend a hotel. 328. See the discussion of the defence of laches in 15.62–15.63. 329. R Meagher et al, note 12 above, pp 1036 and 784. Contrast with the approach in I Spry, note 6 above, pp 488–93.

330. Network Ten Ltd v Fulwood, note 237 above, at 46–7. See also Carlton & United Breweries (NSW) Pty Ltd v Bond Brewing New South Wales Ltd (1987) 76 ALR 633 at 638–9. 331. The principles applicable to the enforcement of undertakings as to damages are discussed in Appendix A of I Spry, note 6 above, pp 654 ff. 332. Maritime Union of Australia v Patrick Stevedores Operations No 1 Pty Ltd (1998) 77 FCR 456 at 465–6; 153 ALR 602 at 614 and Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 77 FCR 478 at 486–8; 153 ALR 626 at 635–6; 79 IR 305 at 312–14. 333. See 15.33; see also Community & Public Sector Union v Stellar Call Centres Pty Ltd [2000] FCA 1739. 334. Maritime Union of Australia v Patrick Stevedores Operations No 1 Pty Ltd (1998) 77 FCR 456 at 465; 153 ALR 602 at 614; see also Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 77 FCR 478 at 486; 153 ALR 626 at 635; 79 IR 305 at 312. 335. Irani v Southampton and South West Hampshire Area Health Authority, note 23 above at 596 and 605. See also K Ewing, note 66 above, at 433. 336. NWL Ltd v Woods [1979] ICR at 867 at 880 and W Sofronoff, ‘Interlocutory Injunctions Having Final Effect’ (1987) 61 ALJ 341 at 343–5. 337. Drake Personnel Ltd v Beddison [1979] VR 13 at 24; Lawrence David Ltd v Ashton, note 182 above, ER at 395–6; ICR at 135; Office Overload Ltd v Gunn [1977] FSR 39 at 44 and John Michael Design plc v Cooke [1987] 2 All ER 332 at 335; see also R Dean, note 262 above, pp 299–30. 338. NWL Ltd v Woods, note 336 above, at 867 at 880–1; Australian Paper Ltd v Communications, Electrical, Electronic, Energy & Allied Services Union, note 187 above, at 25–6; Transfield Construction Pty Ltd v Automotive Food, Metal, Engineering, Printing and Kindred Industries Union [2002] FCA 1413 at [29]–[35] and Hughes v London Borough of Southwark, note 173 above, at 57–8. 339. NWL Ltd v Woods, note 336 above, at 867 at 881 and 884 and Lawrence David Ltd v Ashton, note 182 above, All ER at 395–6; ICR at 135. 340. Businessworld Computers Pty Ltd v Australian Telecommunications Commission, note 319 above, at 503. 341. Businessworld Computers Pty Ltd v Australian Telecommunications Commission, note 319 above, at 501–3 and Films Rover International Ltd v Cannon Film Sales Ltd, note 319 above, at 780. See also M Tilbury, note 7 above, at 320. Compare with the slightly different approach in State of Queensland v Australian Telecommunications Commission (1985) 59 ALR 243 at 245; Shepherd Homes Ltd v Sandham [1971] 1 Ch 340 at 351; Locabail International Finance Ltd v Agroexport [1986] 1 WLR 657 at 663 and, in an employment context, Jakeman v South West Thames Regional Health Authority, note 187 above, at 63. 342. Terrapin Limited v Builders’ Supply Company (Hayes) Limited [1967] RPC 375 at 391–2 (aff’d [1960] RPC 128); Cranleigh Precision Engineering Ltd v Bryant, note 264 above, WLR at 1317– 18; All ER at 301 and United States Surgical Corp v Hospital Products International Pty Ltd, note 288 above, at 228–33 (rev’d on other grounds (1984) 156 CLR 41; 55 ALR 417). 343. United States Surgical Corp v Hospital Products International Pty Ltd, note 288 above, at 233 (rev’d on other grounds (1984) 156 CLR 41; 55 ALR 417); British Franco Electric Pty Ltd v Dowling Plastics Pty Ltd [1981] 1 NSWLR 448 at 451; Potters Ballotini Ltd v Weston Baker [1977] RPC 202 at 206–7 and Harrison v Project & Design Co (Redcar) Ltd [1978] FSR 81 at 87; on compensation for such a headstart, see Seager v Copydex Ltd (No 2) [1969] 1 WLR 809 at

813; 2 All ER 718 at 719–20 and Coco v A N Clark (Engineers) Ltd [1969] RPC 41 at 50. 344. Titan Group Pty Ltd v Steriline Manufacturing Pty Ltd (1990) 19 IPR 353 at 382–5; F Gurry, Breach of Confidence, note 266 above, pp 245–51 and R Dean, note 262 above, pp 140–3 and 148–9. 345. ICAP Australia Pty Ltd v BGC Partners (Australia) Pty Ltd, note 115 above, at [65]. 346. National Surgical Pty Ltd v McPhee (2010) 87 IPR 602; [2010] FCA 972 at [55]. 347. On know-how, see 16.42–16.47. See also R Dean, note 262 above, p 149. 348. H Woolf and J Woolf, The Declaratory Judgement, 2nd ed, Sweet & Maxwell, London, 1993, p 1; P Young, Declaratory Orders, 2nd ed, Butterworths, Sydney, 1984, Chs 1 and 2 and Warramunda Village Inc v Pryde (2001) 105 FCR 437; [2001] FCA 61 at [8]. 349. Sankey v Whitlam (1978) 142 CLR 1 at 23; 21 ALR 505 at 523; on discretionary benefits, see Yorke v The King [1915] 1 KB 852 at 855–6 and Cooper v The Queen (1880) 14 Ch D 311 at 313 where the former employees had no right to superannuation payments under an Act as those payments were entirely dependent on the bounty of the Treasury. 350. Liddell v Lembke, note 95 above, at 357; cf Gunton v Richmond-upon-Thames London Borough Council, note 38 above, Ch at 460; All ER at 583. 351. See, for example, Bennett v Commonwealth [1980] 1 NSWLR 581 at 588. 352. See H Woolf and J Woolf, note 348 above, pp 113–7 and M Aronson and M Dyer, Judicial Review of Administrative Action, 2nd ed, LBC Information Services, Sydney, 2000, pp 643–9. 353. H Woolf and J Woolf, note 348 above, Ch 1 and p 109; Chapman v Michaelson [1909] 1 Ch 238 at 242 and 243; Tito v Waddell (No 2) [1977] Ch 106 at 259; 3 All ER 129 at 256; Dyson v Attorney-General [1911] 1 KB 410 and R Meagher et al, note 12 above, pp 611–7. 354. Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421 at 435 and 438; Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 581–2; 106 ALR 11 at 21; Hanson v Radcliffe Urban District Council [1922] 2 Ch 490 at 507 and Barnard v National Dock Labour Board [1953] 2 QB 18 at 41; 1 All ER 1113 at 1119. See generally H Woolf and J Woolf, note 348 above, Ch 4. 355. Russian Commercial Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 AC 438 at 445; cf Vine v National Dock Labour Board, note 43 above, AC at 500; All ER at 944. 356. Chief Constable of North Wales Police v Evans [1982] 1 WLR 1155 at 1172; 3 All ER 141 at 153 and R v Attorney-General; Ex parte ICI [1987] 1 CMLR 72 at 109. 357. H Woolf and J Woolf, note 348 above, p 194. On the relationship between declaratory and prerogative relief, see 5.106. 358. Vine v National Dock Labour Board, note 43 above, AC at 504; All ER at 946. 359. Stevenson v United Road Transport Union, note 26 above, All ER at 951–2; ICR at 906–7; Francis v Municipal Council of Kuala Lumpur, note 22 above, at 637 and Ridge v Baldwin, note 43 above, AC at 81; All ER at 81–2; see 15.112. 360. Barroclough v Brown [1897] AC 615 at 622. The right of a person to seek a declaration can only be excluded by clear legislative language: Pyx Granite Co Ltd v Ministry of Housing & Local Government [1960] AC 260 at 286 and Hill v Green (1999) 48 NSWLR 161; 96 IR 371; [1999] NSWCA 477 at [155]–[164]. 361. Slattery v Public Service Board [1983] 3 NSWLR 41 at 46; (1983) 6 IR 333 at 337–8; Young v Public Service Board (1982) 3 IR 50 at 56–7 and Liddle v Central Australian Legal Aid Service,

note 49 above, at 155–6. Partial jurisdiction over the matter will ordinarily not suffice: Blank v Beroya Pty Ltd (1967) 92 WN (NSW) 24 at 26 and Sydney Harbour Tunnel Co Ltd v Building & Construction Industry Long Service Payments Corp (1989) 31 IR 193 at 206; see also Howes v Gosford Shire Council, note 43 above, at 63. 362. For example, Slattery v Public Service Board, note 361 above, NSWLR at 46; IR at 336–7 (declaration sought concerning the hours to be worked by the employee when an industrial tribunal was considering an application to fix those hours at the same or a different level) and Liddle v Central Australian Legal Aid Service, note 49 above, at 155–6. 363. Hill v Green, note 360 above, at [162] and the cases referred to therein. 364. See H Woolf and J Woolf, note 348 above, p 193. 365. Howes v Gosford Shire Council, note 43 above, at 63; Baker v Gough, note 48 above, at 1361; Stevenson v United Road Transport Union, note 26 above, All ER at 951–2; ICR at 906–7 and Francis v Municipal Council of Kuala Lumpur, note 22 above, at 637. 366. See 15.15 and Barber v Manchester Regional Hospital Board, note 43 above, at 331. 367. Stevenson v United Road Transport Union, note 26 above, All ER at 951–2; ICR at 906; Turner v Australasian Coal and Shale Employee’s Federation, note 52 above, FCR at 193; ALR at 649 and Francis v Municipal Council of Kuala Lumpur, note 22 above, at 637. 368. Turner v Australasian Coal and Shale Employee’s Federation, note 52 above, FCR at 193; ALR at 649. 369. See the observations on these two remedies in Lucy v The Commonwealth, note 22 above, at 237 and Francis v Municipal Council of Kuala Lumpur, note 22 above, at 638. 370. Stevenson v United Road Transport Union, note 26 above, All ER at 951–2; ICR at 906–7 and Francis v Municipal Council of Kuala Lumpur, note 22 above, at 637. 371. Barber v Manchester Regional Hospital Board, note 43 above, at 330; Vine v National Dock Labour Board, note 43 above, AC at 500 and 507; All ER at 944 and 948; Howes v Gosford Shire Council, note 43 above, at 63 and Francis v Municipal Council of Kuala Lumpur, note 22 above, at 637–8: see 15.19. 372. H Woolf and J Woolf, note 348 above, pp 141–57 and Gregory v Philip Morris Ltd, note 52 above, at 482. 373. The effects of a wrongful dismissal on the contract and the employment relationship and its consequential effect on earning wages, are considered in more detail in 14.38–14.39. 374. Taylor v National Union of Seamen, note 78 above, WLR at 553; All ER at 778; Francis v Municipal Council of Kuala Lumpur, note 22 above, at 637 and Chief Constable of North Wales Police v Evans, note 356 above, WLR at 1172; All ER at 153. 375. Neeta (Epping) Pty Ltd v Phillips (1974) 131 CLR 286 at 307; 3 ALR 151 at 168. 376. Gregory v Philip Morris Ltd, note 52 above, at 482. See also Liddle v Central Australian Legal Aid Service, note 49 above, at 155. 377. Francis v Municipal Council of Kuala Lumpur, note 22 above, at 637; Taylor v National Union of Seamen, note 78 above, WLR at 552–3; All ER at 778; Turner v Australasian Coal and Shale Employee’s Federation, note 52 above, FCR at 193; ALR at 649 and Bonsor v Musicians Union [1956] AC 104; [1955] 3 All ER 518. This was also the effect of the invalid dismissal in Vine v National Dock Labour Board, note 43 above. 378. Kulkarni v Milton Keynes Hospital NHS Trust, note 78 above; British Broadcasting Corporation;

Ex parte Lavelle, note 50 above and Stevenson v United Road Transport Union, note 26 above, All ER at 951–2; ICR at 906. 379. See 15.16. 380. Compton v Council of the County Borough of West Ham [1939] Ch 771 at 777 (sick pay entitlement); Chate v Commissioner of Police (1997) 76 IR 70 at 77 (annual leave entitlement) and Honeyman v Nhill Hospital [1994] 1 VR 138 at 161 (RDO entitlement and terms of employment). 381. Price v Representative Body of the Church in Wales [1938] Ch 434 (calculation of wage) and Patent Castings Syndicate Ltd v Etherington [1919] 2 Ch 254 (meaning of net profits). 382. Guardians of the Poor of Salford Union v Dewhurst [1926] AC 619; Australian Workers Union v Roads and Traffic Authority (NSW) (1989) 29 IR 202 and Jones v London County Council [1936] Ch 50. 383. Vine v National Dock Labour Board, note 43 above, AC at 500; All ER at 944 and Edwards v North Goonyella Coal Mines Pty Ltd [2005] QSC 242 (right to require employee to undergo medical test). 384. Foong v Norfolk Island Hospital, note 150 above, at [66] (declaration that suspension was null and void); Bennett v Commonwealth of Australia, note 351 above, at 588; Marshall v English Electric Co Ltd [1945] 1 All ER 653 at 655 and Downe v Sydney West Area Health Service (No 2), note 27 above, at [465]. 385. See H Woolf and J Woolf, note 348 above, pp 108, 147–50, 156–7 and Ch 4. 386. Ainsworth v Criminal Justice Commission, note 354 above, CLR at 581–2; ALR at 21 and Russian Commercial Industrial Bank v British Bank for Foreign Trade Ltd, note 355 above, at 448. 387. Mellstrom v Gardner [1970] 2 All ER 9. 388. Marshall v English Electric Co Ltd, note 384 above, at 655. 389. Howard v Pickford Tool Co Ltd [1951] 1 KB 417 at 421–2; Sanderson Computers Pty Ltd v Urica Library Systems BV (1998) 44 NSWLR 73 at 79–80; cf Marion White Ltd v Francis [1972] 3 All ER 857 at 863–4 where the court declared a restraint of trade term valid after it had expired. 390. Commonwealth v Sterling Nicholas Duty Free Pty Ltd (1972) 126 CLR 297 at 305. 391. Reynolds v Southcorp Wines Pty Ltd (2002) 122 FCR 301; 115 IR 152; [2002] FCA 712 at [30]. 392. B M I Ltd v Federated Clerks Union of Australia (NSW) Branch (1983) 51 ALR 401 at 413–15; 6 IR 416 at 424–5; Wallersteiner v Moir [1974] 1 WLR 991 at 1029 and 1030; [1974] 3 All ER 217 at 251 and 252 and ASIC v Rich (No 2) (2004) 50 ACSR 500; [2004] NSWSC 836 at [10]. 393. I Spry, note 6 above, pp 78 and 378–9. 394. Camilla Cotton Oil Co v Granadex SA [1976] 2 Lloyd’s Rep 10 at 14 and Guaranty Trust Co of New York v Hannay & Co [1915] 2 KB 536 at 564–5. 395. Dyson v Attorney-General, note 353 above, at 417. 396. H Woolf and J Woolf, note 348 above, pp 169–74. 397. In some states there are broadly similar statutes: Judicial Review Act 1991 (Qld); Judicial Review Act 2000 (Tas) and Administrative Law Act 1978 (Vic). 398. Judicial review of decisions made in the exercise of the Royal Prerogative are beyond the scope of this book: see G Smith, Public Employment Law, Butterworths, Sydney, 1987, pp 168–9 and R

v Secretary of State for the Home Department; Ex parte Benwell [1985] QB 554; [1984] 3 All ER 854. 399. Barnard v National Dock Labour Board, note 354 above, QB at 41; All ER at 1119 and Howes v Gosford Shire Council, note 43 above, at 64. 400. In some states there are broadly similar statutes: Judicial Review Act 1991 (Qld); Judicial Review Act 2000 (Tas) and Administrative Law Act 1978 (Vic). 401. Griffith University v Tang (2005) 221 CLR 99; 213 ALR 724 at [80]–[82] per Gummow, Callinan and Heydon JJ, see also at [18] per Gleeson CJ. 402. Australian Film Commission v Mabey (1985) 59 ALR 25 at 33–4 (dismissal); Australian National University v Burns (1982) 43 ALR 25 at 31–2 (dismissal); Chittick v Ackland (1984) 53 ALR 143 at 153–4 (dismissal); Australian National University v Lewins (1996) 138 ALR 1 at 16 (decision not to promote an employee); Peek v Australian Government Solicitor (No 2) (2005) 226 ALR 268; [2005] FCA 1343 (refusal to submit to a psychiatric assessment before reengagement) and Blizzard v O’Sullivan [1994] 1 Qd R 112 at 118–9. 403. The Federal Court’s power is granted by ss 39B and 44 of the Judiciary Act 1903 (Cth). 404. H Wade, ‘Procedure and Prerogative in Public Law’ (1985) 101 LQR 180 at 182; for a further discussion of these remedies in the context of employment, see E Campbell, ‘Termination of Appointments to Public Offices’ (1996) 24 FLR 1 at 33–5. 405. M Aronson and M Dyer, Judicial Review of Administrative Action, note 352 above, Chs 13 and 14. 406. See E Campbell, ‘Judicial Review and Appeals as Alternative Remedies’ (1982) 9 Mon LR 14; G Smith, Public Employment Law, note 398 above, Ch 5; generally M Aronson and M Dyer, note 352 above, pp 643–9. In an employment context, see Barnard v National Dock Labour Board, note 354 above, QB at 35–8 and 41; All ER at 1116–18 and 1119 and R v British Broadcasting Corporation; Ex parte Lavelle, note 50 above (the proper approach is to seek an injunction rather than judicial review). 407. Ainsworth v Criminal Justice Commission, note 354 above, CLR at 581–2; ALR at 21–2; Barnard v National Dock Labour Board, note 354 above, QB at 41; All ER at 1119; Chief Constable of North Wales Police v Evans, note 356 above, WLR at 1172; All ER at 153 and Howes v Gosford Shire Council, note 43 above, at 65–6. 408. Kay v Lambeth London Borough Council [2006] 2 AC 465; 4 All ER 128 at [30] and R (on the application of Shoesmith) v Ofsted [2011] IRLR 679 at [92]. 409. See G Smith, Public Employment Law, note 398 above, pp 169–74; Hill v Green, note 360 above, at [163]–[164] and Commissioner of Police v Gordon [1981] 1 NSWLR 675. 410. See generally M Aronson and M Dyer, note 352 above, Ch 2. 411. Boyce v Paddington Borough Council [1903] 1 Ch 109 at 114. 412. Boyce v Paddington Borough Council, note 411 above, at 114 and Bateman’s Bay Local Aboriginal Land Council v Aboriginal Community Benefit Fund Pty Ltd (1998) 194 CLR 247; 155 ALR 684 at [33]–[52]. 413. See, for example, Howes v Gosford Shire Council, note 43 above, at 66–7 and Fennell v East Ham Corporation [1926] Ch 641 at 652. 414. See S Deakin and G Morris, Labour Law, 5th ed, Hart Publishing, Oxford, 2009, pp 389–94; R v Derbyshire County Council; Ex parte Noble [1990] ICR 808 at 814 and R v Director General of

the National Crime Squad [2003] ICR 599 at [13] (‘whether a decision has a sufficient public law element … is often as much a matter of feel as deciding whether any particular criteria are met’). 415. See 15.105. 416. Ridge v Baldwin, note 43 above and R (on the application of Shoesmith) v Ofsted, note 408 above, at [91]. 417. Malloch v Aberdeen Corp [1971] 2 All ER 1278 at 1293; R v East Berkshire Health Authority; Ex parte Walsh, note 66 above, QB at 173; All ER at 436 and Saira v Northern Territory University, note 82 above, at 51–2; see also Vine v National Dock Labour Board, note 43 above (dock workers engaged under a statutory scheme). 418. Ainsworth v Criminal Justice Commission, note 354 above, CLR at 584–5; ALR at 24 and R v East Berkshire Health Authority; Ex parte Walsh, note 66 above, QB at 181; All ER at 442; see also Whitehead v Griffith University [2003] 1 Qd R 220; [2002] QSC 153 at [15]. 419. Malloch v Aberdeen Corporation, note 417 above, All ER at 1297 and R (on the application of Shoesmith) v Ofsted, note 408 above, at [91] (position was ‘created, required and defined by and under statute’). 420. Baker v Gough, note 48 above, at 1361–2 and R v East Berkshire Health Authority; Ex parte Walsh, note 66 above, QB at 163–4; All ER at 430. 421. R v East Berkshire Health Authority; Ex parte Walsh, note 66 above, QB at 163–4; All ER at 430 and 435. 422. Barber v Manchester Regional Hospital Board, note 43 above. 423. R v East Berkshire Health Authority; Ex parte Walsh, note 66 above, All ER at 431 at 165 and Vidyodaya University of Ceylon v Silva [1964] 3 All ER 865 at 874–5. 424. R v East Berkshire Health Authority; Ex parte Walsh, note 66 above, QB at 181; All ER at 442. 425. See 11.29 on the status of Crown servants in Australia; R v Civil Service Appeal Board; Ex parte Bruce [1988] 3 All ER 686 (aff’d [1989] 2 All ER 907) (public law element established because Crown servants had no employment contract). 426. Francis v Municipal Council of Kuala Lumpur, note 22 above; cf Barnard v National Dock Labour Board, note 354 above, where a declaration that the suspension of the employees was a nullity was granted despite nearly three years elapsing. 427. Fisher v Jackson [1891] 2 Ch 84 at 99–100; Baker v Gough, note 48 above, at 1356; Howes v Gosford Shire Council, note 43 above, at 67 and P Young, Declaratory Orders, 2nd ed, Butterworths, Sydney, 1984, pp 93–4. 428. Foong v Norfolk Island Hospital, note 150 above, at [60]. See also Honeyman v Nhill Hospital, note 380 above, at 161. 429. M Aronson and M Dyer, note 352 above, Chs 4–8. 430. Hanson v Radcliffe Urban District Council, note 354 above, at 505–6, 508; Smith v McNally, note 79 above, and Martin v Eccles Corporation, note 129 above. Concerning the validity of dismissals for failing to comply with an unlawful instruction see Gorse v Durham County Council [1971] 2 All ER 666; [1971] 1 WLR 775 and Price v Sunderland Corporation [1956] 3 All ER 153; [1956] 1 WLR 1253. 431. Baker v Gough, note 48 above, at 1356; Fisher v Jackson, note 427 above, at 99–100; Okuk v Fallscheer [1980] 1 PNGLR 274; R v British Broadcasting Corporation; Ex parte Lavelle, note 50 above and Stevenson v United Road Transport Union, note 26 above, All ER at 949; ICR at

903. 432. Howes v Gosford Shire Council, note 43 above, at 65 (body exercising power was inquorate); Paras v Public Service Body Head of the Department of Infrastructure, note 24 above, at [33]– [34] and Quinn v Overland, note 27 above. 433. Price v Sunderland Corporation, note 430 above, at 162–4 and Cooper v Wilson [1937] 2 KB 309 at 324. 434. Vine v National Dock Labour Board, note 43 above, AC at 499, 502–3, 506 and 509; All ER at 943, 945, 947 and 949; Francis v Municipal Council of Kuala Lumpur, note 22 above, at 636–7; Barnard v National Dock Labour Board, note 354 above, QB at 34–8 and 42–3; All ER at 1116– 18 and 1119–20; Cooper v Wilson, note 433 above, at 317–21; Fisher v Jackson, note 427 above, at 99–100 and Stevenson v United Road Transport Union, note 26 above, All ER at 949; ICR at 903. 435. Short v Poole Corporation [1926] Ch 66 at 90; Price v Sunderland Corporation, note 430 above, at 162 and Fennell v East Ham Corporation, note 413 above, at 651–2; see also R v Hertfordshire County Council; Ex parte National Union of Public Employees [1985] IRLR 258. 436. Baker v Gough, note 48 above, at 1356; Barnard v National Dock Labour Board, note 354 above, QB at 38 and 42–3; All ER at 1116– 18 and 1119–20; Foong v Norfolk Island Hospital, note 150 above, at [1] and [64]; Howes v Gosford Shire Council, note 43 above, at 66; Schmohl v Commonwealth (1983) 49 ACTR 24 at 31 and Malloch v Aberdeen Corporation, note 417 above, at 1284, 1294 and 1296. 437. McVicar v Commonwealth of Railways (NSW) (1951) 83 CLR 521 at 531; Howes v Gosford Shire Council, note 43 above, at 64–5 and 67; Vine v National Dock Labour Board, note 43 above, AC at 500; All ER at 944 and Stevenson v United Road Transport Union, note 26 above, All ER at 951–2; ICR at 906–7. 438. McLaughlin v Governor of the Cayman Islands [2007] 1 WLR 2839 at [14] per Lord Bingham; Vine v National Dock Labour Board, note 43 above, QB at 675–6; AC at 500, 503–4, 506–7; All ER at 944, 946 and 947–8; Ridge v Baldwin, note 43 above, AC at 80–1 and 139–40; All ER at 81–2 and 119; Calvin v Carr [1980] AC 574 at 589–90; [1979] 1 NSWLR 1 at 8 and Boddington v British Transport Police [1999] 2 AC 143 at 154–6; [1998] 2 All ER 203 at 209–11. 439. Chief Constable of North Wales Police v Evans, note 356 above; Jhagroo v Teaching Service Commission (Trinidad and Tobago) [2002] UKPC 63 at [39]–[42] and R (on the application of Shoesmith) v Ofsted, note 408 above, at [128]–[132]. 440. Liddle v Central Australian Legal Aid Service, note 49 above, at 155; Health Services Union of West Australia v Director General of Health (2008) 175 IR 13 at 62–8 and Francis v Municipal Council of Kuala Lumpur, note 22 above, at 637. 441. Hanley v Pease & Partners Ltd [1915] 1 KB 698 at 706. The fact that damages and not wages are recoverable is often overlooked: Commissioner for Railways (NSW) v O’Donnell (1938) 60 CLR 681 at 691. On the role of service in earning wages, see 9.9. 442. Faithorn v Territory of Papua (1938) 60 CLR 772; Welbourn v Australian Postal Commission [1984] VR 257 at 274; Grady v The Commissioner of Railways (New South Wales) (1935) 53 CLR 229 at 233; Townsend v General Motors-Holden Ltd (1983) 4 IR 358 at 365 and Vehicle Builders Employees Federation of Australia v British Motor Corporation (Aust) Pty Ltd (1966) 8 FLR 70 at 74; however, the award may not give a right to payment when invalidly prevented from performing work in accordance with the contract: see Casey v FJ Walker Pty Ltd (1988) 27 IR 248 at 260–1 (but see on appeal at (1989) 29 IR 303 at 316–7).

443. I Spry, note 6 above, Ch 7; R Meagher et al, note 12 above, Ch 23; I Davison, ‘The Equitable Remedy of Compensation’ (1982) 13 MULR 349; P McDermott, ‘Jurisdiction of the Court of Chancery to Award Damages’ (1992) 108 LQR 652; L Aitken, ‘Developments in Equitable Compensation: Opportunity or Danger?’ (1993) 67 ALJ 596; J Stuckey-Clarke, ‘ “Damages” for Breaches of Purely Equitable Rights: The Breach of Confidence Example’ in P Finn (ed), Essays on Damages, Law Book Company, Sydney, 1992 and J Heydon, ‘Equitable Compensation for Undue Influence’ (1997) 113 LQR 8. 444. The correct title is The Chancery Amendment Act 1858 (UK). It has been known as Lord Cairns’ Act for over a century. Provisions based in the Act operate in each state and territory: see note 461 below. 445. United States Surgical Corporation v Hospital Products International Pty Ltd, note 288 above, at 816 and 819–20. Account of profits is discussed in 5.120–5.132. 446. Tang Man Sit v Capacious Investments Ltd [1996] AC 514 at 521–2; 1 All ER 193 at 198; Dr Martens Australia Pty Ltd v Bata Shoe Company of Australia Pty Ltd (1997) 75 FCR 230 at 231– 7; 145 ALR 233 at 234–9 and M Leeming, ‘When Should a Plaintiff take an Account of Profits?’ (1996) 7 AIPJ 127 at 128. 447. Ex parte Adamson (1878) 8 Ch D 807 at 819 per James and Bagallay JJ. The same approach applies to fiduciaries and not simply trustees: see J Heydon, ‘Equitable Compensation for Undue Influence’, note 443 above, at 9. 448. For misuse of confidential information see Markwell Brothers Pty Limited v CPN Diesels (Qld) Pty Limited [1983] 2 Qd R 508; Dowson & Mason Limited v Potter [1986] 2 All ER 418 and the cases discussed in I Davison, ‘The Equitable Remedy of Compensation’ (1982) 13 MULR 349 at 392–6; for diversion of business opportunities see Bailey v Namol Pty Limited (1994) 53 FCR 102 and Digital Pulse Pty Limited v Harris, note 287 above, at [21] (varied in part on appeal at (2003) 56 NSWLR 298; 197 ALR 626; [2003] NSWCA 10); for secret commissions, see Fyffes Group Ltd v Templeman [2000] 2 Lloyd’s Rep 643. 449. Markwell Brothers Pty Limited v CPN Diesels (Qld) Pty Limited, note 448 above at 523 and L Aitken, ‘Developments in Equitable Compensation: Opportunity or Danger?’ (1993) 67 ALJ 596. 450. Del Casale v Artedomus (Aust) Pty Ltd (2007) 73 IPR 326; 165 IR 148; [2007] NSWCA 172 at [35]. 451. O’Halloran v RT Thomas & Family Pty Ltd (1998) 45 NSWLR 262 at 272 per Spigelman CJ; cf the purpose of damages discussed in 14.7. 452. See P Finn, Fiduciary Obligations, note 263 above, pp 167–8 and J Stuckey-Clarke, note 443 above. 453. Markwell Brothers Pty Limited v CPN Diesels (Qld) Pty Limited, note 448 above, at 523–4; McKaskell v Benseman [1989] 3 NZLR 75 at 90–1; Szarfer v Chodos (1986) 27 DLR (4th) 388 at 405 and Giller v Procopets (2008) 24 VR 1; [2009] VSCA 72 at [422]–[431]. 454. Maguire v Makaronis (1996) 188 CLR 449 at 468; 144 ALR 729 at 741–2; O’Halloran v RT Thomas & Family Pty Ltd, note 451 above, at 272–6; Target Holdings Ltd v Redferns [1996] 1 AC 421 at 432–4; [1995] 3 All ER 785 at 792–4 and Re Dawson (dec’d) (1966) 84 WN (Pt 1) (NSW) 399 at 404–6. 455. Deeson Heavy Haulage Pty Ltd v Cox, note 226 above, at [114]–[123] and [136]; see also Foster Bryant Surveying Ltd v Bryant [2007] IRLR 425 at [88]; CMS Dolphin Ltd v Simonet [2001] 2 BCC 600 at [97] and AMP Services Ltd v Manning [2006] FCA 256 at [66]–[72]. 456. Hill v Rose [1990] VR 129 at 144; see 14.21 on remoteness of damage and 14.96–14.130 on

mitigation. 457. Day v Mead [1987] 2 NZLR 443 at 462 and Deeson Heavy Haulage Pty Ltd v Cox, note 226 above, at [117]. 458. The exceptions are that the court had the power to order equitable compensation (though not common law damages) in its exclusive jurisdiction to enforce equitable rights; and the court had the power to award damages in addition to, but probably not in lieu of, an order for specific performance: see R Meagher et al, note 12 above, p 844. 459. I Spry, note 6 above, p 623. 460. Wentworth v Woollahra Municipal Council (1982) 149 CLR 672 at 676–7; 43 ALR 69 at 72 and Ferguson v Wilson (1866) LR 2 Ch 77 at 88. 461. Supreme Court Act 1970 (NSW) s 68; Supreme Court Act 1986 (Vic) s 38; Supreme Court Act 1935 (SA) s 30; Supreme Court Act 1935 (WA) s 25; Supreme Court Civil Procedure Act 1932 (Tas) s 11; Judicature Act 1876 (Qld) s 4, as to which see Barbagallo v J & F Catelan Pty Limited [1986] 1 Qd R 245. As to the minor differences in the wording of each of these statutes, see JC Williamson Ltd v Lukey, note 8 above, at 295; Financial Integrity Group Pty Ltd v Farmer [2009] ACTSC 143 at [98]–[109] and Giller v Procopets, note 453 above, at [399]. 462. Giller v Procopets, note 453 above, at [404]–[407] and Barbagallo v J & F Catelan Pty Limited, note 461 above, at 251. 463. Wentworth v Woollahra Municipal Council, note 460 above, CLR at 677–9; ALR at 72–4; JC Williamson Ltd v Lukey, note 8 above, at 295; I Spry, note 6 above, pp 626–7 and R Meagher et al, note 12 above, pp 844–5. 464. Johnson v Agnew, note 36 above, AC at 400; All ER at 895, referred to approvingly in Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd (1981) 146 CLR 249 at 267–8. 465. See the review of authorities in Rosser v Maritime Services Board (No 2) (1998) 14 BCLC 375; Madden v Kevereski [1983] 1 NSWLR 305 at 306–7 and I Spry, note 6 above, pp 646–8. 466. Jaggard v Sawyer [1995] 1 WLR 269 at 281–2 and 291–2; 2 All ER 189 at 203–4 and 211–2. 467. Leeds Industrial Co-operative Society Ltd v Slack [1924] AC 85. 468. See Wentworth v Woollahra Municipal Council, note 460 above, CLR at 676–7; ALR at 72; Attorney-General v Observer Ltd, note 263 above, AC at 286; All ER at 661 and Giller v Procopets, note 453 above, at [397]–[403]; cf R Meagher et al, note 12 above, pp 853–5. 469. Hooper v Rogers [1975] Ch 43; Jaggard v Sawyer, note 466 above, WLR at 291–2; All ER at 203–4 and 211 per Millett LJ (‘The court can in my judgment properly award damages “once and for all” in respect of future wrongs because it awards them in substitution for an injunction and to compensate for those future wrongs which an injunction would have prevented’); Leeds Industrial Co-operative Society Ltd v Slack, note 467 above, at 856; D Pearce, ‘Remedies for Breach of a Keep-Open Covenant’ (2008) 24 JCL 199 at 217–8 and Wroth v Tyler [1974] Ch 30. 470. See Johnson v Perez (1988) 166 CLR 351 at 355–6, 371 and 386–7; 82 ALR 587 at 589–90, 600 and 612; Johnson v Agnew, note 36 above, AC at 400–1; All ER at 895–6 and Madden v Kevereski, note 465 above, at 306–7; as to the date of assessment of damages at common law, see 14.25. 471. Giller v Procopets, note 453 above, at [408]–[431]; cf the position at common law discussed in 14.16 and 14.83. 472. R Meagher et al, note 12 above, Ch 25; I Davison and M Cleary, ‘Taking Accounts’ in P

Parkinson, note 21 above; M Leeming, note 446 above; F Patfield, ‘The Modern Remedy of Account’ (1987) 11 Adel LR 1 and T Wells, ‘Monetary Remedies for Infringement of Copyright’ (1989) 12 Adel LR 165. Account was originally a common law remedy, but was transformed into an equitable remedy in the mid-eighteenth century: S Stoljar, ‘The Transformations of Account’ (1964) 80 LQR 208. 473. Warman, note 276 above, CLR at 557; ALR at 208–9 and Chan v Zacharia (1984) 154 CLR 178 at 198–9; 53 ALR 417 at 433. The purpose of the remedy in cases concerning the infringement of intellectual property rights is slightly different: Décor Corporations Pty Ltd v Dart Industries Inc (1993) 179 CLR 101 at 111; 116 ALR 385 at 387; Harris v Digital Pulse Pty Ltd (2003) 56 NSWLR 298; 197 ALR 626; [2003] NSWCA 10 at [301]–[310] and Décor Corporations Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 405–6; 104 ALR 621 at 629. 474. Cases concerning the diversion of business include: Warman, note 276 above; Timber Engineering Co Pty Ltd v Anderson, note 278 above; Granosite Pty Ltd v Wieland (1982) 9 IR 218; Colour Control Centre v Ty [1996] AILR 431; Green and Clara Pty Ltd v Bestobell Industries Pty Ltd, note 276 above and CMS Dolphin Ltd v Simonet, note 255 above, at [97]; cases concerning the misuse of position include Regal (Hastings) Ltd v Gulliver [1967] 2 AC 134n; [1942] 1 All ER 378; cases concerning the misuse of confidential information include Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd, note 266 above, at 52 and Peter Pan Manufacturing Corp v Corsets Silhouette Ltd [1963] RPC 45 at 59–60; cases concerning the receipt of secret commissions include Australian Postal Corporation v Lutak (1991) 21 NSWLR 584; EFG Australia Limited v Kennedy [1999] NSWSC 922 and Mainland Holdings Limited v Szady [2002] NSWSC 699. 475. Warman, note 276 above, CLR at 559; ALR at 210; Chan v Zacharia, note 473 above CLR at 204–5; ALR at 437–8; T Wells, note 472 above, at 174–5 and I Davison and M Cleary, note 472 above, pp 953–9. 476. Warman, note 276 above, CLR at 559–60. 477. Green and Clara Pty Ltd v Bestobell Industries Pty Ltd, note 276 above, at 9–11; Warman, note 276 above, CLR at 558; ALR at 209 and Regal (Hastings) Ltd v Gulliver, note 474 above. 478. Warman, note 276 above, CLR at 558; ALR at 209; Consul Development, note 276 above, CLR at 395; ALR at 249 and Regal (Hastings) Ltd v Gulliver, note 474 above, at 144–5, 153, 154 and 159. 479. Warman, note 276 above; Colour Control Centre v Ty, note 474 above and Regal (Hastings) Ltd v Gulliver, note 474 above, at 144–5, 153, 154 and 159. 480. Harris v Digital Pulse Pty Ltd, note 473 above, at [414]; see also Décor Corporations Pty Ltd v Dart Industries Inc, note 473 above, CLR at 111; ALR at 387 and Colbeam Palmer v Stock Affiliates Pty Ltd (1968) 122 CLR 25 at 34. 481. Colbeam Palmer v Stock Affiliates Pty Ltd, note 480 above, at 32. 482. Colour Control Centre v Ty, note 474 above; see also Nottingham University v Fishel [2000] ICR 1462 at 1485. 483. On the right to damages, see 14.2. 484. See M Leeming, note 446 above, at 130; Décor Corporations Pty Ltd v Dart Industries Inc, note 473 above, CLR at 111; ALR at 387. On punitive damages in contract see 14.16. 485. See Colbeam Palmer v Stock Affiliates Pty Ltd, note 480 above, at 32. An account of profits was ordered in the Spycatcher litigation even though an injunction was refused: Attorney–General v Observer Ltd, note 263 above.

486. Décor Corporations Pty Ltd v Dart Industries Inc, note 473 above, at 110–11; 116 ALR 385 at 386–7 and Colbeam Palmer v Stock Affiliates Pty Ltd, note 480 above, at 32. The reasons for requiring the election are discussed in F Patfield, note 472 above, at 5 and M Leeming, note 446 above. The same requirement for an election applies when the employer is seeking an account of profits or damages under Lord Cairns’ Act. Damages under Lord Cairns’ Act are discussed in 15.117–15.119. 487. United States Surgical Corporation v Hospital Products International Pty Ltd, note 288 above, at 816 and 819–20. The election once made is binding: Warman, note 276 above, CLR at 559; ALR at 210 and Halliday & Nicholas v Corsiatto, note 276 above. Equitable compensation is discussed in 15.115. 488. See the cases at note 446. 489. LED Builders Pty Ltd v Eagle Homes Pty Ltd (No 3) (1996) 70 FCR 436 at 450–1; 36 IPR 293 at 307. 490. F Patfield, note 472 above, at 12–16; T Wells, note 472 above, and M Leeming, note 446 above. 491. Denmark Productions Limited v Boscobel Productions Limited [1969] 1 QB 699 at 737; [1968] 3 All ER 513 at 533. 492. Hospitality Group Pty Limited v Australian Rugby Union (2001) 110 FCR 157; [2001] FCA 1040 at [159] and I Jackman, The Varieties of Restitution, Federation Press, Sydney, 1998, pp 127–32. 493. Attorney-General v Blake [2001] 1 AC 268; [2000] 4 All ER 385. 494. Attorney-General v Blake, note 493 above, AC at 284–5; All ER at 397; see also Nottingham University v Fishel, note 482 above, at 1488–9. 495. Hospitality Group Pty Limited v Australian Rugby Union, note 492 above, at [159]. 496. Patents Act 1990 (Cth) s 122 (1); Copyright Act 1968 (Cth) s 115 (2); Design Act 2003 (Cth) s 75; Circuit Layouts Act 1989 (Cth) s 27 (2). The Copyright Act and the Circuit Layouts Act do not expressly state that an employer may elect between the two remedies. However, the requirement of the employer to make such an election is implied. The duties of employees concerning copyright, patents and designs are discussed in 7.101–7.110. The remedy of account of profits now granted by those statutes reflects the practice of the Court of Chancery: see P Hastie, ‘Restitution and Remedy in Intellectual Property Law’ (1996) 14 ABR 6 at 9–12. 497. Colbeam Palmer v Stock Affiliates Pty Ltd, note 480 above, at 32 and LED Builders Pty Ltd v Masterton Homes (NSW) Pty Ltd (1994) 54 FCR 196 at 197. 498. Colbeam Palmer v Stock Affiliates Pty Ltd, note 480 above, at 34; Patents Act 1990 (Cth) s 123; Design Act 2003 (Cth) s 75; Circuit Layouts Act 1989 (Cth) s 27 (3). Note the different terms of the Copyright Act 1968 (Cth) s 115 (3) discussed in Kalamazoo (Aust) Pty Ltd v Compact Business Systems Pty Ltd (1984) 84 FLR 101 at 130–1; T Wells, note 472 above, at 176 and F Patfield, note 472 above, at 8–12. 499. Peter Pan Manufacturing Corp v Corsets Silhouette Ltd, note 474 above, at 59–60; AttorneyGeneral v Observer Ltd, note 263 above, AC at 161, 223, 262 and 286; All ER at 584, 630, 643 and 661; Attorney-General (United Kingdom) v Heinemann Publishers Australia Pty Ltd (1987) 10 NSWLR 86 at 100 and G Jones, ‘Restitution of Benefits Obtained in Breach of Another’s Confidence’ (1970) 86 LQR 463 at 486–8. 500. Décor Corporations Pty Ltd v Dart Industries Inc, note 473 above, CLR at 111; ALR at 387; Warman, note 276 above, CLR at 558; ALR at 211 and Siddell v Vickers (1892) 9 RPC 152 at 162–3.

501. See the cases at notes 454 and 455; Hospital Products Limited v United States Surgical Corporation (1984) 156 CLR 41 at 113; 55 ALR 417 at 466 and Green and Clara Pty Ltd v Bestobell Industries Pty Ltd, note 474 above (employer may be entitled to the profits in breach of fiduciary duties outside of the area of the responsibility of the employee). 502. Warman, note 276 above, CLR at 557; ALR at 210 and Colbeam Palmer v Stock Affiliates Pty Ltd, note 480 above, at 42–4. 503. Colbeam Palmer v Stock Affiliates Pty Ltd, note 480 above, at 42–3. 504. Leplastrier & Co Ltd v Armstrong-Holland Ltd (1926) SR (NSW) 585 and Copyright Agency Limited v Victoria University of Technology (1994) 53 FCR 56 at 67; 125 ALR 278 at 289–90. 505. Hospital Products Limited v United States Surgical Corporation, note 501 above, CLR at 110; ALR at 464; In re Jarvis (dec’d) [1958] 1 WLR 815 at 820 and Warman, note 276 above, CLR at 558; ALR at 210. 506. Warman, note 276 above, CLR at 560; ALR at 211–12. 507. Warman, note 276 above, CLR at 561–2; ALR at 212 and Timber Engineering Co Pty Ltd v Anderson, note 278 above. 508. Warman, note 276 above, CLR at 562; ALR at 212. 509. Schindler Lifts Australia Pty Ltd v Debelak (1989) 89 ALR 275 at 300–2; see also AMP Services Ltd v Manning, note 455 above, at [66]–[72]. 510. Décor Corporations Pty Ltd v Dart Industries Inc, note 473 above, CLR at 111–20; ALR at 387– 95; see also Timber Engineering Co Pty Ltd v Anderson, note 278 above, at 495ff; Natural Extracts Pty Ltd v Stotter (1997) 24 ACSR 110 at 142 and I Davison and M Cleary, note 472 above, at 964–6. 511. Warman, note 276 above, CLR at 561; ALR at 211 and Halliday & Nicholas v Corsiatto, note 276 above. 512. Warman, note 276 above, CLR at 562; ALR at 212 and United States Surgical Corporation v Hospital Products International Pty Ltd, note 288 above, at 241–3 (a fiduciary who has made an honest mistake may be more generously treated than a fraudster). 513. Australian Postal Corporation v Lutak, note 474 above, at 596–7; see also Timber Engineering Co Pty Ltd v Anderson, note 278 above, at 495–8. 514. Colbeam Palmer v Stock Affiliates Pty Ltd, note 480 above, at 42–3. 515. Colbeam Palmer v Stock Affiliates Pty Ltd, note 480 above, at 37. 516. Peter Pan Manufacturing Corp v Corsets Silhouette Ltd, note 499 above, at 59–60. 517. See 7.52–7.55. 518. See Nelson v Rye [1996] 2 All ER 186; Coulthard v Disco Mix Club Ltd [1999] 2 All ER 457; R Meagher et al, note 12 above, pp 870–1; Jarrad v Silver Top Taxi Service (1980) 43 FLR 1 at 6; Reading v Attorney General [1951] AC 507 at 515 (contractual and fiduciary) and 517 (fiduciary), and 518 (contract); (1 All ER 617 at 619–20 and 621) and City of London Corporation v Appleyard [1963] 1 WLR 982 at 988; 2 All ER 834 at 839 (contractual). 519. Asset Risk Management v Hyndes [1999] NSWCA 201 at [8] per Meagher JA; see also Peninsular and Oriental Steam Navigation Company v Johnson (1938) 60 CLR 189 at 218. 520. A remedy sought in Addis v Gramophone Co Limited [1909] AC 488. 521. For example, Robb v Green [1895] 2 QB 315; Measures Bros Ltd v Measures, note 193 above, at

343 (aff’d [1910] 2 Ch 248); SWF Hoists and Industrial Equipment Pty Ltd v Polli (1996) 67 IR 356 at 359 and Webb v England, note 54 above (delivery up and cancellation of articles of apprenticeship refused). 522. Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd, note 266 above, at 52. See also Ormonoid Roofing and Asphalts Ltd v Bitumenoids Ltd, note 266 above, at 362; Brandeaux Advisers (UK) Limited v Chadwick [2011] IRLR 224 at [14]–[24] and Franklin v Giddins [1978] Qd R 72 which involved the delivery up and destruction of an orchard. 523. Sullivan v Sanders (2000) 77 SASR 419; [2000] SASC 273 (court ordered that the documents faxed by the employee to a rival of the employer be delivered up to the court) and AG Australia Holdings Limited v Burton, note 263 above (court ordered the solicitors for one party in a proceeding to deliver up a witness statement they had obtained from a former employee of the other party in the proceeding that revealed confidential information). See also Fiscal Technology Co Ltd v Johnson (1991) 23 IPR 555 at 562–3 and Redwood Music Ltd v Campbell and Co Ltd [1982] RPC 109 concerning the delivery up of works adapted by the employee in breach of copyright. 524. Roussel Uclaf v Pan Laboratories Pty Limited (1994) 51 FCR 316 at 319; 29 IPR 556 at 559–60; Mergenthaler Linotype Company v Intertype Ltd (1926) 43 RPC 381 at 382–3 and Interest Research Bureau Pty Ltd v Interest Recount Pty Ltd (1997) 38 IPR 468 at 475–6. 525. See M Tilbury, note 7 above, pp 235–7 and Gollan v Nugent (1988) 166 CLR 18 at 25–6. 526. Roussel Uclaf v Pan Laboratories Pty Limited, note 524 above, FCR at 319; IPR at 559–60; Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd, note 266 above, at 52 and Ormonoid Roofing and Asphalts Ltd v Bitumenoids Ltd, note 266 above, at 362; cf Industrial Furnaces Ltd v Reaves [1970] RPC 605 at 626–7. In Sullivan v Sanders, note 523 above, and AG Australia Holdings Limited v Burton, note 263 above, the courts ordered that the documents be brought into court, sealed and preserved. 527. Paton Calvert & Co Ltd v Rosedale Associated Manufacturers Ltd [1966] RPC 6. 528. Alperton Rubber Co v Manning (1917) 86 LJ Ch 377. 529. Giumelli v Giumelli (1999) 196 CLR 101; 161 ALR 473 at [2]–[4]. 530. Diversion of business cases include Natural Extracts Pty Ltd v Stotter, note 510 above, at 141; Timber Engineering Co Pty Ltd v Anderson, note 278 above, at 495 ff and Green & Clara Pty Ltd v Bestobell Industries Pty Ltd, note 474 above; misuse of position cases include Industrial Development Consultants Ltd v Cooley [1972] 1 WLR 443; 2 All ER 162 and Guinness plc v Saunders [1990] 2 AC 663; cases concerning bribes include Attorney-General for Hong Kong v Reid [1994] 1 AC 324 at 331–2; 1 All ER 1 at 5 and Mainland Holdings Limited v Szady, note 474 above, at [69]–[70]; see generally Keith Henry & Co Pty Ltd v Stuart Walker & Co Pty Ltd (1958) 100 CLR 342 at 350; Daraydan Holdings Limited v Solland International Limited [2005] Ch 119; 4 All ER 73 at [75]–[88] and J Heydon and M Leeming, note 272 above, pp 256–62 and 271–5. As to whether the remedy is available for a breach of the equitable duty of confidence see Ohio Oil Co v Sharp 135 F 2d 303 (1943) (constructive trust imposed over oil leases acquired as result of a misuse of confidential information) and LAC Minerals Ltd v International Corona Resources Ltd (1989) 16 IPR 27. 531. Giumelli v Giumelli, note 529 above, at [2]–[4]. 532. Attorney-General for Hong Kong v Reid, note 530 above, AC at 331; All ER at 5; see also J Heydon and M Leeming, note 272 above, pp 263–4. 533. See Natural Extracts Pty Ltd v Stotter, note 510 above, at 141. On just allowances, see 15.131.

534. John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1; 266 ALR 462 at [125]–[130]; see also Schindler Lifts Australia Pty Ltd v Debelak, note 509 above, at 300–2. 535. Timber Engineering Co Pty Ltd v Anderson, note 278 above, at 505–6; Sterling Engineering Co Ltd v Patchett [1955] AC 534 at 543; Triplex Safety Glass Company v Scorah [1938] 1 Ch 211 at 217 and British Reinforced Concrete Engineering Company Limited v Lind (1917) 34 RPC 101 at 109. 536. Triplex Safety Glass Company v Scorah, note 535 above, at 217; as to the obligation to take a positive step to inform the employer of the invention, see Blackmagic Design Pty Ltd v Overliese (2010) 84 IPR 505 at 537. 537. Adamson v Kenworthy (1931) 49 RPC 57 at 68 and Triplex Safety Glass Company v Scorah, note 535 above, at 218. 538. Triplex Safety Glass Company v Scorah, note 535 above, at 218. 539. Timber Engineering Co Pty Ltd v Anderson, note 278 above, at 505–6. 540. Chan v Zacharia, note 473 above, CLR at 199; ALR at 433. 541. Hospital Products Limited v United States Surgical Corporation, note 501 above, CLR at 107; ALR at 462. 542. Attorney-General for Hong Kong v Reid, note 530 above, AC at 331–2; All ER at 5; Eden v Ridsdales Railway Lamp and Lighting Company Limited (1889) 23 QBD 368 at 372; Timber Engineering Co Pty Ltd v Anderson, note 278 above and P Finn, Fiduciary Obligations, note 263 above, p 221. 543. Attorney-General for Hong Kong v Reid, note 530 above, AC at 331–2; All ER at 5.

[page 1039]

Chapter 16 Post-employment Obligations Introduction Terms in Restraint of Trade The meaning of ‘restraint’ and ‘of trade’ The test Interpretation of restraint of trade terms Assessing reasonableness: adequacy of consideration and inequality of power Assessing reasonableness: onus and timing Consequences of invalidity Injunctions to restrain breaches of valid restraints Severance of unreasonable restraints The Restraints of Trade Act (NSW) The Protectable Interests and Assessing the Restraint’s Reasonableness Protectable interests and protection from competition per se Restraints during employment Customer connection: scope and duration of the restraint The interest in maintaining a stable workforce Restraints to protect trade secrets Use of Information after Employment in the Absence of an Express Term Duties of confidence after the termination of employment Distinguishing know-how from trade secrets

Use of lists of customers and similar information after termination [page 1040] References The importance of references The obligation to provide a reference The negligent provision of a reference: Spring v Guardian Assurance plc The duty owed to the employee References for employees who commit misconduct

INTRODUCTION 16.1 The principal source of post-employment obligations of the parties are those contained in restraint of trade clauses that often limit the right of employees to compete with their former employer and use trade secrets acquired during the course of employment. The principles governing such clauses are discussed in 16.2–16.40. In the absence of a restraint of trade clause, former employees have an obligation not to use or disclose trade secrets acquired during the course of the employment: see 16.41–16.49. Some other express contractual terms continue to have effect after the termination of the contract, such as arbitration clauses and terms granting trailing commissions: see 10.76. The obligations of employers concerning the provision of references are discussed in 16.50–16.58.

TERMS IN RESTRAINT OF TRADE1 16.2 Employees have an interest in plying their trade. Employers have an interest in protecting their business. The public have an interest in ensuring that employees are able to perform work and there is efficient use of all economic resources. The common law doctrine of restraint of trade is an attempt to balance the competing interests of employees, employers and the

public interest. It renders unenforceable any restraints imposed on employees that unreasonably fetter the freedom of an employee to be gainfully employed and carry on their trade.2 The doctrine was summed up in a much cited judgment of Lord MacNaghten: [page 1041] The public have an interest in every person carrying on his trade freely; so has the individual. All interference with individual liberty of action in trading, and all restraints of trade of themselves, if there is nothing more, are contrary to public policy, and therefore void. That is the general rule. But there are exceptions: restraints of trade and interference with individual liberty of action may be justified by the special circumstances of a particular case. It is a sufficient justification, and indeed it is the only justification, if the restriction is reasonable — reasonable, that is, in reference to the interests of the parties concerned and reasonable in reference to the interests of the public, so framed and so guarded as to afford adequate protection to the party in whose favour it is imposed, while at the same time it is in no way injurious to the public.3

The common law is vigilant against contractual terms that hamper freedom of labour, skill or talent contrary to the interests of the community.4 The doctrine of restraint of trade inhibits the parties’ freedom to contract.5 Certain interests of an employer, called its protectable interests, are able to be shielded from harm by a reasonable restraint. To be reasonable the restraint must be no more than that which is required in the judgment of the court to protect the interests of the employer.6 Almost all of the cases in this field of law concern post-employment restraints on employees which prevent them using confidential information, soliciting customers or competing with the employer. The restraint of trade doctrine also applies to restraints during the course of employment: see 16.29.

The meaning of ‘restraint’ and ‘of trade’ What is a restraint 16.3 It is important to separate two issues: first, whether a term in restraint of trade exists and, second, whether the restraint is reasonable.7 A term in restraint of trade is one which fetters the freedom of an

[page 1042] employee to carry on trade with other persons not parties to the contract in such manner as he or she chooses: ‘its effect is to bind or coerce (for example by financial or other sanctions) a worker not to work when otherwise that worker may wish to do so’.8 The restraint is almost always an express term of the contract of employment. In the context of employment, restraint of trade clauses typically apply after the termination of employment to restrict the right of an employee to compete with the employer or use confidential information.9 The fact an employee has freely agreed to the restraint ‘provides no sufficient reason for concluding that the doctrine should not apply. All contractual restraints can be said to be of that character’.10 In determining whether the restraint is upon or in respect of ‘trade’, the notion of trade is broad and applies to employment generally.11 It includes activities in which the employee is only engaged part time and from which he or she may only derive a small amount of income.12 16.4 Whether the term is a restraint is determined by reference to the operation of the clause rather than its form.13 The restraint need not consist of a prohibition on the employee engaging in certain conduct. The provision of a benefit, such as the payment of a pension, is sometimes made conditional on the performance of a term in restraint of trade, such as not competing after employment with the employer. The condition may be void in restraint of trade even in the absence of a prohibition on engaging in the activities.14 Whether the employee will be entitled to the benefit may turn on whether the promise to provide the benefit [page 1043] is subject to the fulfilment of the invalid condition.15 The employee will not be entitled to the benefit when the invalid restraint is the main consideration provided by the employee. Where the illegal consideration only constitutes a severable and subsidiary part of the consideration then it may be possible to sever the offending part and for the remainder of the contract to be

enforced.16 In this field of law it is common to speak of ‘covenants’ in restraint of trade, rather than terms. This is apt to confuse and the word ‘term’ is used below. Historically, many of the cases about unreasonable restraints of trade concerned covenants in deeds. Although the word covenant is sometimes used in general parlance to mean a term, the word’s strict meaning is limited to a promise under seal.17

Atypical employment restraints 16.5 The focus in this chapter is on restraints imposed on employees by an employment contract. There are a range of other contexts in which issues associated with the restraint of trade doctrine occasionally arise in the context of employment that should be briefly noted. First, the restraint on the employee need not be contained in the contract of employment. It can be contained in voluntary arrangements between employers or bodies governing an occupation, an issue that often arises in the context of the regulation of professional sport.18 In such cases the contractual language used in the authorities can be applied mutatis mutandis (with necessary modifications) to the non-contractual restraints.19 Second, an agreement between employers in a trade not to employ the former employees of their rivals may be in restraint of trade.20 Third, agreements between labour hire companies and employers often provide that the employer is prohibited from directly engaging [page 1044] the employee, or must pay a recruitment fee, if the employee is directly engaged within a stipulated period of the hiring. These agreements may be unreasonable restraints of trade.21 Fourth, there were a slew of older cases concerning whether the rules of unions (which form a contract between the members) may be an unreasonable restraint of trade.22 Finally, there are restraints that operate to compel the employee to serve the assignee or successor of the employer on pain of not working in the field for a stipulated

period. It has been said that an employer would need to advance ‘extraordinarily compelling’ reasons to justify such a restraint.23

The test 16.6 A restraint of trade will be valid if it is reasonable by reference to the interests of the parties concerned and is reasonable in the public interest.24 The restraint must be justified under both limbs of the test.

Reasonable by reference to the interests of the parties 16.7 To be valid a restraint must be no more than is necessary to protect the interests of the employer.25 Some interests of the employer are protectable; others, such as protection from competition per se, are not.26 Assessing the reasonableness of the restraint involves, on one view, a ‘balancing’ of the interests of the employer and the employee: … although the primary question will always be the extent of the [employer’s] need for protection, it is impossible to leave out of account the effect of the restraint upon the [employee] … The very notion of reasonableness involves a balancing of competing considerations. The more onerous the restraint, the more difficult it is for the person seeking to enforce the restraint to satisfy a court that it was, in all of the circumstances, no more than was reasonably necessary for the protection of his or her interests.27

[page 1045] The adequacy of the consideration provided by the employer and any inequality of bargaining power will be relevant in the assessment: see 16.11–16.13. It is not clear whether non-economic effects of the restraint on the employee and his or her family will also be relevant.28 It is the interests of the parties to the contract that are relevant, not the interests of companies related to the employer. An employment contract between employer and employee that prevents the employee soliciting clients from related companies, or competing with those companies, may be unreasonably broad.29 If the related companies have a protectable interest then they may enter into a contract or deed to protect that interest.30

Reasonable in the public interest 16.8 The restraint must be reasonable as between the parties and also reasonable in the public interest. This raises two separate issues of reasonableness.31 There is a considerable degree of overlap between the two. Issues associated with the reasonableness of the restraint on one ground are relevant in determining if the restraint is reasonable on the other.32 In the context of restraints operating on employees, once it is determined that the restraint is reasonable as between the parties it is rare for courts to hold that the restraint is not reasonable in the public interest. An otherwise reasonable restraint may be void because it would be contrary to the public interest to establish a monopoly, or would prevent the supply of labour in a market that is in need of it, or [page 1046] would not permit an employee to use the skills he or she has acquired during employment.33

Interpretation of restraint of trade terms34 16.9 The reasonableness of the restraint is to be judged by reference to what the contract entitles or requires the parties to do, not by reference to what the parties have done or what the parties intend to do.35 The issue is not whether the employee’s conduct after the termination of employment could have been the subject of a valid restraint. When assessing what the term entitles or requires the parties to do it is not necessary for the court to consider improbable or extravagant contingencies.36

Restraints on employees are more carefully scrutinised 16.10 Terms in restraint of trade are interpreted like any other terms of a contract, subject to a few exceptions mentioned below. Restraint of trade terms in employment contracts are more carefully scrutinised by courts than similar terms in other contexts, such as restraints arising from the sale of a

business.37 Courts take a stricter and less favourable view of terms governing employees in restraint of trade.38 Employment provides a greater danger for abuse of a superior bargaining position than other [page 1047] contexts: ‘The practice of putting into these agreements anything that is favorable to the employer is one which the Courts have to check’.39 This danger is heightened when the restraint does not arise from an agreement negotiated by the employee.40 The restraint of trade term should be construed in its context and with its object in mind. An unambiguous term should not be read down or construed narrowly so as to ensure that it is a reasonable restraint.41 Where the terms are ambiguous on their face then the court should adopt an interpretation that will make the clause valid rather than invalid.42 As Dodds-Streeton J has stated: Where a restraint clause is, according to its literal terms, wider than is needed to protect the legitimate interests of the employer, a construction of the clause ‘in context’ might narrow its meaning and save it from invalidity. It is not, however, permissible to approach the matter by first determining what degree of restriction would be justified, and reading down an unduly wide clause in order to preserve its validity.43

Assessing reasonableness: adequacy of consideration and inequality of power 16.11 The amount of the consideration given in exchange for the restraint is relevant in assessing the restraint’s reasonableness. A restraint is more likely to be reasonable if the employee has received an adequate sum in exchange. The fact that some consideration is provided will be irrelevant in assessing the reasonableness. After all, in every case where an injunction is sought some consideration must be provided. A restraint in a simple contract unsupported by consideration is not enforceable at law and a restraint in a deed unsupported by consideration is not enforceable by an injunction as equity will not assist a volunteer.44 For a restraint to be reasonable it is not

necessary that the consideration be adequate. The failure to provide an objectively (or even subjectively) [page 1048] reasonable quantum of remuneration in exchange for the restraint is not a complete bar to relief.45 16.12 In assessing reasonableness regard is paid to the quantum of the consideration and other benefits received by the employee in exchange for the restraint. As Walsh J has stated: … a restraint will not be enforceable, unless it affords no more than adequate protection to the interests of the [employer] in respect of which he is entitled to be protected. If the Court is not satisfied on that question it is immaterial, in my opinion, whether the [employee] has received much or little by way of benefits from entering into the transaction. But, although it was held from early times that the Court would not inquire into the adequacy of the consideration for a restraint, nevertheless, I am of opinion that the quantum of the benefit which the [employee] receives may be taken into account in determining whether the restraint does or does not go beyond adequate protection for the interests of the [employer]. For example, if a large sum is advanced a longer period of restraint may be held to be required to give adequate protection to the [employer] than that which would be appropriate in the case of a small advance.46

If the restraint grants more than adequate protection to the employer then the quantum of the consideration provided is irrelevant: compensation for a restraint, no matter how generous, does not create a protectable interest where none otherwise exists.47 When assessing reasonableness the advantages other than remuneration to an employee may be relevant. It may be advantageous, for example, to obtain training from a competent employer.48 The timing of the payment of the consideration may also be relevant. A broader restraint may be justified if [page 1049] entered into at the commencement of employment even though the same restraint would not be justified if it is imposed for the first time towards the end of employment.49 A restraint is more likely to be reasonable if the employee receives payments during the period of restraint.50

The harshness of the bargain and inequality of bargaining power 16.13 In assessing the reasonableness of the restraint the court may take into account the harshness of the agreement and any inequality of bargaining power between employer and employee. These matters are often reflected in the adequacy of the consideration. They are also addressed when considering if there are factors that vitiate the contract: see 4.2–4.19. The inequality of bargaining power is relevant even when it does not amount to a special disability for the purposes of relief from unconscionable bargains.51 In A Schroeder Music Publishing Co Ltd v Macaulay the employee agreed that the employer could exclusively exploit his talents for a decade. The unfairness of the agreement, reflecting the disproportionate bargaining power of the parties, was relevant in determining the restraint was unreasonable.52 The absence of harshness, oppressiveness, unequal bargaining power and the adequacy of consideration are non-determinative factors tending to support the conclusion that the restraint is reasonable.53 Although the presence of such factors can be significant in assessing reasonableness, their absence tends to be more telling.54 A restraint is more likely to be reasonable where the employee has received legal advice about the clause, has negotiated about it, has had the clause explained to him or her before agreeing to it and understands its importance.55 [page 1050]

Assessing reasonableness: onus and timing Judged at the time the restraint was made 16.14 The reasonableness of the restraint is to be determined by reference to the circumstances that exist at the time the contract was formed.56 Facts that occurred after that date may shed light on the circumstances existing at the time of formation.57 The court can take into account events that were contemplated by the parties at the time of formation.58 Many employment contracts are terminable on the provision of a short period of notice. Such

clauses are less relevant if the parties contemplated ongoing, long-term employment. Conversely, if the parties contemplated a short engagement then a wide restraint will not be justifiable by reference to the fact that the engagement ended up being for a long period.59

Changes after formation 16.15 Changes in conditions after the formation of the contract may be relevant in a series of contexts. First, a term that was invalid when the contract was formed cannot become valid due to changed conditions.60 Acts of misconduct by the employee, disreputable behaviour or the conduct of an illegal business after the termination of employment, will not prevent the application of the restraint of trade doctrine.61 Second, a term whose value has shrunk considerably due to changed economic conditions can still be enforced if it was reasonable when [page 1051] made.62 However, equity is unlikely to assist an employer who ceases to operate the business the subject of the protection or who suffers no loss as the result of a breach. An employer may assign the rights granted by a restraint of trade clause.63 Third, the scope of the employer’s protectable interests may expand or contract over the course of the employment, reflecting the scope of the employer’s business operations. A restraint that prevents soliciting customers with whom the employee deals during employment will expand as the duration of the employment becomes longer and the number of customers increases.64

Presumption of invalidity and onus 16.16 Any term in restraint of trade is presumed to be invalid.65 The presumption is rebuttable by proof that the restraint is reasonable. The onus of proving that the restraint is reasonable in the interests of the parties is on the party relying on the restraint, almost always the employer.66 Where the employee seeks to recover the remuneration promised in exchange for

agreeing to the restraint then, to prove the lawfulness of the consideration, the employee must prove the restraint is reasonable.67 The onus of proving that the restraint is injurious to the public lies with the party relying on that matter, almost always the employee.68 The question of reasonableness is a question of law not of fact.69 The evidence of witnesses, even experts, of the reasonableness of [page 1052] the restraint is not admissible.70 Contracts sometimes contain statements that the parties acknowledge the restraints are reasonable. As Justice Heydon, writing extra-curially, has said: It is difficult to see any point in terms of this kind: the matter is a matter of law for the decision of the court, not a subject for admission.71

Consequences of invalidity 16.17 A term that is an unreasonable restraint of trade is often described as void, illegal or unenforceable. The descriptions used are not always uniform and precise.72 A term in restraint of trade that is unreasonable is not illegal in the sense that it is a crime or an actionable wrong. The parties are free to choose to abide by the term.73 However, an unreasonable restraint has no contractual effect.74 It cannot be enforced by either party. An injunction cannot be obtained for its contravention. Damages cannot be recovered for its breach. Compliance with the term does not form part of the consideration provided by the employee.75 The consequences of invalidity are limited only to the invalid clause except in two situations. First, there may be other clauses so interconnected and dependent on the invalid clause that they are rendered unenforceable.76 Second, a whole simple contract will be unenforceable when the consideration provided by the invalid restraint is the main consideration provided by the employee and cannot be severed: see 16.23.

Injunctions to restrain breaches of valid restraints 16.18 When an employee breaches a valid restraint of trade term the ordinary remedy is an injunction. The scope of the injunction need not be as wide as the restraint. The reasonableness of the restraint and the enforcement of the restraint are separate questions. Courts have rejected the argument that, despite the wide terms of the restraint in question, it [page 1053] should not be considered unreasonable because it was unlikely that the restraint would be enforced by an injunction.77 To obtain an injunction the plaintiff must be ready and willing to perform the essential terms of the contract. A party cannot both repudiate the contract and seek equity’s assistance to enforce the contract. A former employer is considerably less likely to obtain an injunction to enforce a term in restraint of trade if it has wrongfully dismissed the former employee.78 There is some slender support for the proposition that a restraint is unreasonable if it applies when the employee is wrongfully dismissed.79 16.19 The duration and scope of the injunction need not be co-extensive with the period and scope of the restraint. Injunctions are discretionary relief. Courts often refrain from granting an injunction when there is only a short time before the restraint expires. The employer’s legitimate protectable interest might not justify the granting of an injunction for the full period or full breadth of the restraint.80 An injunction restraining a breach for a shortened period may also be justified when an employee has already served a period on garden leave during the employment prior to the commencement of the post-employment restraint.81 Where an employee has breached the contract and obtained a headstart as the result of the breach, an injunction may be for a period longer than the restraint so as to remedy the effects of the breach.82 [page 1054]

Declarations are sometimes sought by an employee concerning the validity of the restraint. Such relief may be available if he or she has the requisite interest in the matter, even when the employee is not a party to the contract imposing the restraint.83 There are special difficulties, discussed in 15.27–15.34, in obtaining an injunction to restrain an employee breaching an exclusive service term operating while the contract is on foot.

Severance of unreasonable restraints 16.20 This section deals with the common law principles governing the severance of unreasonable terms in restraint of trade. These principles are also applicable when determining if an uncertain term of a contract is able to be severed, though there tends to be a greater focus on the intention of the parties when dealing with severance of uncertain provisions.84 Four other points should be mentioned before examining the principles governing severance. First, the severance of illegal terms other than terms in restraint of trade, such as uncertain terms, is the subject of slightly different tests.85 Second, where the main consideration provided by one party is illegal then the contract will be invalid.86 Where the illegal consideration only constitutes a severable and subsidiary part of the consideration then it may be possible to sever the offending part and for the remainder of the contract to be enforced.87 Third, courts are reluctant to sever the illegal parts of an agreement from certain contracts in breach of public policy, such as those with the object of defrauding the revenue by evading tax laws.88 Fourth, the severance of unreasonable restraints of trade is affected by the Restraints of Trade Act 1976 (NSW) in that state: see 16.24. [page 1055] When dealing with the severance of unreasonable restraints, the central question is whether the court can excise the unreasonable part of the restraint leaving the employer free to seek to enforce the reasonable part of the restraint. The employer can enforce the reasonable part if the unreasonable parts of the term can be removed without altering the nature of the contract and without having to add to, or modify, the wording in any way other than

by excision.89 If the words cannot be severed then a restraint of trade term expressed too broadly will be unenforceable.90 Two conditions discussed in 16.21 and 16.23, must be satisfied before a court will sever an illegal term.91

The blue pencil test 16.21 The first condition is that a term or part thereof can only be severed where the only changes that are made are by running a blue pencil through the offending parts. It is not permissible to amend or add words to the contract. For example, an unreasonable restraint that prevents an employee setting up a rival business ‘within 50 kilometres of the employer’s premises’ cannot be amended to read ‘within 10 kilometres’ of those premises. But an unreasonable restraint that prevents an employee setting up a rival business ‘in the Sydney CBD or within 50 kilometres of the employer’s premises’ can be severed by deleting the words ‘or within 50 kilometres of the employer’s premises’.92 An express clause of the contract may indicate an intention that an invalid part of the contract may be severed. For example, in John Holland Group Pty Ltd v AFMEU the employer entered into a deed with the unions providing that the employees would be governed by certain conditions for three years in exchange, in part, for industrial peace. The deed also granted a right to the employer to elect to extend the expiry date of the agreement and expressly provided that each unlawful clause of the deed was severable. After a change in government and the governing legislation, the right to elect to extend the expiry date became invalid and the court severed that provision from the deed.93 [page 1056]

Cascading protections 16.22 The parties cannot require the court to define the scope of the restraint. A term cannot restrain the employee ‘so far as the law allows’.94 In response to the blue pencil test employers often draft clauses that deal with cascading possibilities. For example, a clause might restrain an employee from

establishing a business competing with the employer ‘within Australia, or Victoria, or Melbourne, or the Melbourne CBD for a period of 2 years, or 1 year, or 6 months, or 3 months or 1 month after the termination of employment’. The employer’s aim is for the blue pencil rule to be applied to strike out the invalid portions and leave a valid clause of the widest possible reach. Cascading clauses of this nature may be too uncertain to be enforced when they are intended to contain a single promise the valid scope of which will be defined by the court.95 A contrary conclusion might be reached where the restraints are alternatives.96 A complex term with multiple combinations and permutations will not be uncertain unless it is so impenetrable as to lack coherent meaning.97

Severance of independent promises 16.23 The second condition that must be met to sever an unlawful term is stated in the rule that ‘if the elimination of the invalid promises changes the extent only but not the kind of the contract, the valid promises are severable’.98 The rule applies equally to the severance of unreasonable restraints and uncertain terms. In the context of the severance of a term too uncertain to be enforced, the test has been stated as follows: [page 1057] … the intention of the parties as to whether the operation of the contract apart from the impugned part was to be conditional on the efficacy of that part, or whether it was to take effect notwithstanding the failure of that part. That intention is to be ascertained from the construction of the contract as a whole. The process of construction will have regard to such considerations as the independence in form of the impugned part, any interdependence of that part in form or operation with the rest, the effect that severance would have on the operation or meaning of what is left, the nature of the subject-matter dealt with in the part and its relative importance in the setting of the whole bargain, whether the impugned part is one of several promises supported by different considerations or by a common consideration, or whether it is part of a single consideration supporting a promise or promises or whether it is one of several considerations, and, if so, whether it is a material or important part of the total consideration or merely subordinate.99

Where two parts of the restraint of trade term are expressed as alternatives

and act as independent promises rather than one single promise, then the invalid part of the term is severable.100 Where the parties intended that the operation of the contract was to be conditional on the legality of the impugned part then severance is not possible.101 The intention of the parties is to be ascertained in the ordinary manner in contract.102

The Restraints of Trade Act (NSW)103 16.24 A reasonable restraint of trade clause can be enforced in New South Wales. Certain unreasonable clauses may be able to be enforced by virtue of s 4(1) of the Restraints of Trade Act 1976 (NSW). That section provides that ‘a restraint of trade is valid to the extent to which it is not against public policy, whether it is in severable terms or not’. The defect in the common law addressed by the Act is that in determining the validity of a restraint under the common law courts are bound to consider all possible breaches within its terms (after any permissible severance) and determine whether public policy was infringed by the restraint of all such breaches, rather than by the actual or threatened breaches proved in the particular case. The effect of the Act is to require [page 1058] that attention be focused on the actual or apprehended breach, rather than on imaginary or potential breaches:104 [Section 4(1)] does not permit the Court to remake the contract or a covenant in it, and although sometimes it is said that it allows the covenant to be read down or redrafted that is really an inaccurate description. The provision looks to the postulated breach, and permits the Court to enforce a covenant otherwise invalid as against public policy if the restraint in the covenant so far as it applies to the postulated breach is not contrary to public policy. The Court is given the capacity to enforce a reasonable restraint of trade falling within the expressed restraint although the expressed restraint is too widely stated.105

In New South Wales courts approach restraint of trade cases by first determining whether the alleged breach does or will infringe the terms of the restraint in the contract properly construed. Whether the clause is an unreasonable restraint is irrelevant to this inquiry. Second, the court

determines whether the restraint in its application to that breach is against public policy. Third, if it is not, then in its application to the alleged infringing conduct, the restraint is valid unless the court makes an order under s 4(3) of the Act.106 The section allows the court to ignore the fact that the restraint goes beyond what is reasonable, provided the restraint can be enforced to an extent that is reasonable. The subsection permits the court to enforce an unreasonable term whose scope extends too far as regards area, time or extent.107

THE PROTECTABLE INTERESTS AND ASSESSING THE RESTRAINT’S REASONABLENESS Protectable interests and protection from competition per se 16.25 In the absence of a valid term in restraint of trade, after the termination of employment an ex-employee may conduct a business in competition with his or her former employer.108 Subject to the limitations [page 1059] mentioned below, an ex-employee is free to set up or participate in a rival business in the same locale, solicit former clients, convince former coemployees to exercise their rights to leave the employer, use the suppliers of the ex-employer and otherwise directly or indirectly conduct a business in competition with the former employer.109 Courts have repeatedly counselled that if the employer wishes to prevent the employee from performing such acts it should seek an express, reasonable restraint of trade clause.110 The desire to stifle competition may also be relevant in the exercise of the court’s discretion to grant an injunction for breach of confidence. The court will not lend its aid to an employer who is motivated ‘to strangle [an] infant

competitor at or shortly after birth’.111 The freedom to compete after employment ‘carries with it a freedom to prepare for future activities, which the employee plans to undertake, once he has left’.112 16.26 There are three limitations on the post-employment freedom to compete. First, after termination the employee will continue to owe a duty of confidence to the employer and must not use or disclose trade secrets obtained during the course of employment. The scope and content of that duty is discussed in 16.41–16.49. Second, the ex-employee may continue to owe fiduciary duties as the termination of employment may not terminate the fiduciary relationship. In some circumstances the conduct of a business in competition with the employer will be a breach of those fiduciary obligations: see 7.76. Third, a reasonable restraint of trade term may restrict the activities of the exemployee. A term in restraint of trade cannot protect an employer against competition per se. To be reasonable a restraint must [page 1060] protect a legitimate interest of the employer that merits protection.113 There are three central protectable interests of an employer: the interest of the employer in protecting the trade connections it has with existing customers;114 the interest in protecting connections with existing staff;115 and the interest in protecting trade secrets.116 16.27 The various protectable interests may justify a range of restraints. The interest in protecting trade secrets, for example, might justify a restraint on the use of confidential information, or a restraint on the employee soliciting customers or a restraint on the employee working for a rival: It is well established by the cases that an employer who has a protectable interest is not limited to a restraint which prevents the specific conduct which would infringe that protectable interest. In other words, the employer is not restricted to a restraint which prohibits solicitation of former customers or making use of confidential information. It is well established that an employer may restrain a former employee from engaging in a business when to do so is likely to present an opportunity to behave in a manner which would infringe upon or damage the employer’s protectable interest.117

The categories of protectable interest are not closed, as illustrated by the

recent recognition of the interest in protecting connections with existing staff.118 In Seven Network (Operations) Limited v Warburton the employee had entered into a deed with the corporation controlling his employer and some investors in which he agreed not to work for a competitor after the employment terminated. The fact that a series of senior employees had entered into the deed was a significant factor in the investor’s decision to make an investment of about $690 million. Although the restraints were not part of the employment contract, they protected a legitimate interest of investors relating to the employment.119 A reasonable restraint of trade term cannot go beyond what is reasonable for the protection of the employer.120 A term that prevents [page 1061] activities which would have no effect on the business of the employer is unreasonable.121 A restraint will not be valid if the employer has no protectable interest, no matter how benign its effect.

Restraints during employment 16.28 The doctrine of restraint of trade applies to restrictions imposed on trade by an employee during the course of an employment contract.122 Unreasonable terms may include restraints on the employee acquiring a beneficial interest in inventions created by the employee during the period of employment.123 An exclusive service term obliges the employee to exclusively serve the employer and no other during the course of employment. It prevents ‘moonlighting’. It is a term in restraint of trade. Even in the absence of an express exclusive service term there may be limits, arising from the employee’s duty of fidelity, not to moonlight.124 The protectable interests of the employer will be broader during the period of employment.125 As Lord Reid has stated: Any contract by which a person engages to give his exclusive services to another for a period necessarily involves extensive restriction during that period of the common law right to exercise

any lawful activity he chooses in such manner as he thinks best. Normally the doctrine of restraint of trade has no application to such restrictions: they require no justification. But if contractual restrictions appear to be unnecessary or to be reasonably capable of enforcement in an oppressive manner, then they must be justified before they can be enforced.126

16.29 Ordinarily, a restraint imposed on a full-time employee by an exclusive service clause will be reasonable.127 An employee can free [page 1062] himself or herself from the restraint by terminating the contract.128 Unreasonableness of a restraint operating during employment may arise from a variety of considerations including whether the contract potentially operates in an oppressive manner, is unfair for the employee, or does not oblige the employer to give a reasonable opportunity to earn remuneration.129 A range of cases have considered the reasonableness of an exclusive service restraint obliging a disempowered but talented young artist to serve a manager for an extended period on onerous terms.130 An exclusive service term is more likely to be reasonable for a full-time or senior employee as opposed to a casual or junior employee moonlighting to earn extra income.131 The difficulties in obtaining an injunction to restrain a breach of an exclusive service term are discussed in 15.27–15.34.

Customer connection: scope and duration of the restraint 16.30 An employer’s customer connection is an interest which can support a reasonable term in restraint of trade.132 The restraints that may be supported by the interest are not limited to preventing the solicitation of customers. An employer may reasonably restrain a former employee from establishing or engaging in a rival business when to do so is likely to present an opportunity for the employee to behave in a manner which would infringe upon or damage the employer’s protectable interest.133 Customers in this context include people who acquire goods or services from the employer or who supply them.134 Brereton J has stated:

[page 1063] While the employer is not entitled to be protected against mere competition by a former employee, the employer is entitled to be protected against unfair competition based on the use by the employee after termination of employment of the customer connection which the employee has built up during the employment — which, because the employee has in effect represented the employer from the customer’s perspective during the employment, might at least temporarily appear attached to the employee, but in truth belongs to the employer.135

As Professor Riley has argued, the scope of a reasonable restraint must be conditioned by the proper scope of the protectable interest. Employers do not own their customers, just as they do not own their employees. A client cannot be stolen except in a metaphorical sense. Reasonable restraint of trade clauses based on the customer connection are not properly concerned with the protection of the employer’s property as the clients are not the employer’s property. A former employee who induces a client to exercise a right to transfer its custom to a rival business commits no tort. Nor does the employee commit a breach of any implied contractual or equitable duty. Restraint of trade clauses based on the employer’s customer connection seek to limit the use by an employee of his or her abilities to engender the trust of customers. It is the abuse of the relationship of trust that the employee has formed that is the proper basis of a restraint, not the use of the employee’s abilities to engender trust.136

The acts the employee is restrained from performing 16.31 In determining the reasonableness of a restraint it is important to ascertain precisely what acts the employee is restrained from doing. A reasonable restraint can go no further than what is necessary to protect the employer’s legitimate interests. A restraint that prevents an employee being engaged ‘in any capacity’ for a competitor may be unreasonable. Doyle CJ has stated the rule as follows: In my opinion the principle underlying the cases is that an employer with a relevant protectable interest can restrain an employee from accepting a position the nature of which is such that the employee would be likely to utilise confidential information or trade connections which have been acquired in the course of the employment. A restraint against accepting such a position will be read in a sensible fashion and, ordinarily, as not intended to apply to such a position in name but in which there is no risk of anything happening against which the employer could reasonably require protection. But if the employer identifies positions

[page 1064] as subject to the restraint, being positions which do not give rise to the relevant risk, then it seems to me that on its face the restraint has gone too far.137

In some cases a restraint preventing the solicitation of the particular customers the employee had dealt with may be reasonable, but a restraint on the solicitation of any customers of the employer may not, particularly if the restraint covers customers the employee had no dealings with or who became customers after the termination of employment.138 Similarly, a restraint prohibiting the employee establishing a competing business is less likely to be reasonable if it prohibits the employee engaging in a trade or concern that he or she was not involved with when working for the employer.139 There is no legitimate interest of the employer to protect when it does not engage in the trade specified in the restraint, even if it intends to commence trading in that area in the future.140 However, where the employer has devoted considerable resources towards building a relationship to secure a deal with a potential customer then a restraint covering non-solicitation of those potential customers may be justified.141

Duration of the restraint 16.32 The longer the duration of the restraint the less likely it is that it will be reasonable.142 The length of the restraint is related to the interest being protected. A valuable trade secret, known by few, might be subject to a far longer restraint than protection against the employee using his or her former relationships with customers. The difficulty in gauging what is a reasonable duration has led, in some cases, to greater reliance on the parties’ estimate in the contract.143 In assessing [page 1065] the reasonableness of the duration of the restraint, courts increasingly have regard to a period the employee is on garden leave.144 Some cases support the view that the duration of the restraint should be long

enough to sever the connection between the customers and the former employee.145 Other cases focus on a reasonable time to introduce the former employee’s replacement and to rebuild a connection with the customers.146 The New South Wales Court of Appeal has recently stated: There is no legally required test in these circumstances. The use of one test or another depends on the facts and the evaluation of the approach that is reasonable. The judge is required to evaluate the evidence about connection and adopt an appropriate approach to assessing what is required to protect reasonably the connection of the former employer.147

16.33 In the context of non-solicitation restraints it has been said that the issue is what is a reasonable time during which the employer is entitled to protection against solicitation of clients with whom the employee had contact and influence during employment and who were not bound to the employer by contract or by stability of association.148 The reasonableness of the restraint is judged in part by reference to the nature of the market in which the employer conducts its business and how it conducts its relations with customers. A longer restraint prohibiting customer solicitation may be justified when there are few customers in the market and the employer enjoys a considerable stability of association with them;149 where the industry is highly price sensitive and custom relies heavily on relationships;150 where the customer only [page 1066] engages one business from which it acquires products;151 or where there is infrequent contact between the employer and its customers.152 Where an employee has been engaged in regular contract negotiation with customers it may be reasonable to ensure that a restraint provides a sufficient period to allow the employer to re-negotiate another round of contracts in a business cycle.153 The duration of restraints imposed on other employees in similar positions may be relevant.154 The duration of a restraint to protect confidential information is related to how long the information is likely to remain current and commercially valuable.155

The connection between the employee and the customer

16.34 In determining the reasonableness of a restraint it will be relevant to assess the degree and type of connection between the customer and the employee, the frequency of the contact between the employee and the customer, the location at which the services are provided by the employee and the nature of those services. The extent of the protection depends on the employee’s ‘personal knowledge of, and influence over, the customers which the [employees] might acquire in their employment’.156 A longer restraint prohibiting customer solicitation may be justified where the employee holds a senior and thereby influential position,157 where the business involves recurring customers,158 and where the employee is frequently in contact with customers.159 The personal relationship between the employee and customers is crucial: ‘the important thing is that the personal relation between the employee and the customer be such as to enable the employee to control the customer’s [page 1067] business as a personal asset’.160 Another way of putting it is to ask if the employee has become the ‘human face’ of the employer to the customer.161 A longer restraint may be justified when the employee is highly competent and has formed deep connections with customers.162

Geographical restraints 16.35 In determining the reasonableness of a restraint the geographical area to which the restraint applies will be relevant. The more limited the geographic area, the longer the period which will be justifiable, and vice versa.163 The geographical area must be justifiable by reference to the employer’s protectable interests. The employer will have no legitimate interest in preventing an employee competing or soliciting customers in an area in which the employer does not carry on its business.164 In Butt v Long the restraint prevented Butt engaging in work as a transshipping agent. The employer had been engaged as a transshipping agent in Wallangarra on the New South Wales–Queensland border, but it had no

interest in the transshipping business conducted in Albury and Port Pirie. The work of a transshipping agent is localised to the points on the borders of states where there is a change in the railway gauge. The court held that the restraint could not be read as only referring to transshipping work in Wallangarra and, unrestricted by reference to locality, the restraint was too broad to be reasonable.165 In contracts concerning the sale of a business it is common for a court to uphold considerably wider geographical restraints. The public has an interest in ensuring there is competition between employers.166 The reasonableness of a restraint defined by reference to a geographical area will, in part, be assessed by reference to the nature of the business, the number of possible customers within the region, and the activities of [page 1068] the employee that are restrained. A prohibition on competing in a large region may be unreasonable where a prohibition on soliciting customers with whom the employee has dealt might be reasonable. Geographical restraints are more likely to be upheld when they are limited by reference to an area where the employee performed work for the employer.167 Area restraints are less likely to be reasonable when they govern businesses that are largely conducted on the phone or on the internet.168

The interest in maintaining a stable workforce 16.36 In recent years it has been held that an employer has a protectable interest in maintaining a stable workforce and reasonable restraints can be imposed on former employees seeking to recruit former co-workers.169 As Brereton J has stated: [Staff] connection constitutes part of the intangible benefits, which may give a business value over and above the value of the assets employed in it, and thus comprises part of its goodwill. It is amenable to protection by a covenant in a manner similar to customer connection, even in the absence of protectable confidences. In the absence of confidential information, similar considerations inform the reasonableness of such a covenant in respect of its duration as are relevant to the reasonableness of a covenant protecting customer connection: essentially, how

long might the hold of the former employee over the other employees be expected to last before weakening.170

In assessing the reasonableness of the restraint courts consider a range of factors, including the seniority of the employee and the relationship and extent of the contact between the employee and former colleagues.171 As to the scope of the restraint, the interest protected may be limited to maintaining key personnel rather than all employees.172 A restraint on [page 1069] the solicitation of former colleagues may also be supported in some cases by the protectable interest in trade secrets.173 16.37 By way of comment the recognition of the employer’s interest in a stable workforce may be at the expense of a broader public interest in ensuring that the former colleagues are apprised of opportunities for career advancement, skills development and a more rewarding future. It is in the employer’s hands to ensure a stable workforce by offering long-term contracts or reaching agreements with its key personnel to abide by reasonable restraint of trade clauses.174

Restraints to protect trade secrets Protecting trade secrets as the basis of a restraint 16.38 Employers have a protectable interest in the protection of their trade secrets.175 The information the employer has an interest in protecting must at least be confidential in the sense discussed in 7.125–7.128. The employer has no legitimate interest in restraining the employee from using information that is not confidential. Express contractual terms will often be an unreasonable restraint of trade if they afford protection beyond that granted by the equitable duty of confidence.176 The protectable interest may cover information that is part of the employee’s know-how in the sense discussed in 16.44–16.47.177

[page 1070] 16.39 To ask ‘what is a trade secret’ when assessing the reasonableness of a restraint is to ask the wrong question. As Campbell J has stated: … when considering the reasonableness of the restraint at common law, [the question] is whether the particular restriction that the parties have agreed, imposed upon that particular employee, to protect that particular ‘trade secret’ falls within the range of reasonableness. … Because of this focus on the particular restriction, the particular parties, and the particular trade secret that is sought to be protected, it does not matter that ‘trade secret’ is a fairly imprecise term, when it is used in this way.178 [emphasis in original]

The greater the harm to the employer caused by the disclosure of the secret, the broader the justifiable restraint. Secrets that might justify protection include secrets about customers and suppliers,179 strategic plans for the future of the business180 or knowledge of costs parameters and pricing.181 Some confidential information is so detailed and minute that it is unable to be remembered by the employee. Revealing such secrets to employees poses no danger to the employer.182 General information about how the business operates and information that is not kept secret is not ordinarily sufficiently confidential to justify a restraint.183 The interest of the employer is to protect its business. There is no legitimate interest in only preventing the exercise of the skills of the employee: Trade secrets, the names of customers, all such things which in sound philosophical language are denominated objective knowledge — these may not be given away by a servant; they are his master’s property, and there is no rule of public interest which prevents a transfer of them against the master’s will being restrained. On the other hand, a man’s aptitudes, his skill, his dexterity, his manual or mental ability — all those things which in sound philosophical language are not objective, but subjective — they may and they ought not to be relinquished by a servant; they are not his master’s property; they are his own property; they are himself. There is no public interest which compels the rendering of those things dormant or sterile or unavailing; on the contrary, the right to use and to expand his powers is advantageous to every citizen, and may be highly so

[page 1071] for the country at large. This distinction, which was also questioned in argument, is just as plain as the other.184

Nor has the employer an interest in the employee’s reputation, even when it has been acquired during the course of employment or enhanced by the

training or publicity provided by the employer.185

The acts the employee is restrained from performing 16.40 The protectable interest in trade secrets will support a reasonable term preventing use of that information.186 To restrain the use of a trade secret by an injunction the employer must specifically identify the secret sought to be protected and be able to distinguish it from other information which the employee is free to use or disclose.187 However, that level of precision is not necessary where the confidential information is the basis of a restraint on the employee performing work for a rival.188 The employer’s interest in protecting trade secrets can support a reasonable restraint preventing the employee working for a competitor or operating a competing business for a period.189 Experience has shown that it is unsatisfactory simply to have a term prohibiting the disclosure of confidential information because it is difficult to draw the line between information which is confidential and information which is not and very difficult to prove a breach when the information is of such a character that an employee can carry it away in his or her head. The only practicable solution in such situations is for the parties to use a restraint of trade clause so that the employee does not work for a trade rival.190 Ordinarily, obligations restraining the use of confidential information are construed [page 1072] as relating to limited information that remained confidential at the time of the alleged breach or threatened breach of those obligations.191

USE OF INFORMATION AFTER EMPLOYMENT IN THE ABSENCE OF AN EXPRESS TERM 16.41 During the course of employment employees have concurrent and largely co-extensive statutory, implied contractual and equitable duties of confidence restricting the use of confidential information: see 7.115–7.118.

After the termination the employee continues to owe an obligation of confidence that imposes some restraints on the use of some types of confidential information, even in the absence of an express term in restraint of trade. The law relating to the use of information by former employees after employment requires a distinction be drawn between three concepts: confidential information, trade secrets and know-how. In the absence of a restraint of trade term an employee cannot use or disclose trade secrets, but he or she can use or disclose information that is part of his or her know-how: see 16.42. The definitions adopted in Chapter 7 were as follows: confidential information means information that attracts an equitable obligation of confidence: see 7.125–7.128. Know-how consists of the skill, experience and knowledge acquired during the course of employment: see 16.44. Trade secrets, in the context of the post-employment equitable obligation of confidence, means confidential information that is not part of the employee’s know-how.192 Trade secrets and know-how were thereby defined to cover mutually exclusive categories: the former attracted the protection of equity but the latter did not. Those definitions are used in this chapter subject to one gloss. There is a different meaning assigned to those terms in the context of restraint of trade. One of the protectable interests of the employer is to have its trade secrets protected. The balance of authority and commentators support the view that in the law governing the restraint of trade a trade secret means information that is able to be protected, whether it be know-how or otherwise. That is, when dealing with express terms in restraint of trade the restraint can, if reasonable, prevent the use of the employee’s know-how even though the equitable duty of confidence would not prevent that use by the former employee.193 [page 1073]

Duties of confidence after the termination of employment

16.42 After the termination of employment the duty of confidence is narrower in scope compared with the duty that applies during employment.194 This reflects the reconciliation of two competing interests that are considered after termination: the interest of ex-employers in keeping their secrets confidential; and the competing interest of ex-employees in using and exploiting all the skill, experience and knowledge which they have at their disposal, including that acquired in the course of employment.195 During employment those interests interlock; after employment they diverge.196 The reconciliation between these competing interests requires that a line of demarcation be drawn between, on the one hand, the employee’s know-how and, on the other hand, trade secrets. In a much cited passage, Cross J explained the distinction as follows: The mere fact that the confidential information is not embodied in a document but is carried away by the employee in his head is not, of course, of itself a reason against the granting of an injunction to prevent its use or disclosure by him. If the information in question can fairly be regarded as a separate part of the employee’s stock of knowledge which a man of ordinary honesty and intelligence would recognise to be the property of his old employer and not his own to do as he likes with, then the court, if it thinks that there is a danger of the information being used or disclosed by the ex-employee to the detriment of the old employer, will do what it can to prevent that result by granting an injunction. Thus an ex-employee will be restrained from using or disclosing a chemical formula or a list of customers which he has committed to memory.197

An ex-employee will breach his or her post-employment duty of confidence if he or she uses or discloses the employer’s trade secrets. An employee is free to use and disclose his or her know-how after the termination of employment, unless there is an express valid restraint of trade clause prohibiting the use or disclosure of that information. [page 1074] Whether such a restraint of trade term governing the use of the employee’s know-how is enforceable depends on the ordinary tests.198 16.43 There are three possible sources of the duty or duties of confidence that apply after the termination of employment: statutory, contractual and equitable. The statutory duty is contained in s 183 of the Corporations Act 2001 (Cth) and is considered in 7.115. During the course of employment the implied contractual and equitable duties of confidence are largely co-

extensive and concurrent: see 7.117–7.118. It has often been held that the implied contractual term operates after the termination of employment to impose a contractual duty of confidence199 and the post-employment contractual and equitable duties are co-extensive.200 However, as was discussed in Del Casale v Artedomus (Aust) Pty Ltd, there are some conceptual difficulties with the notion that an implied term will operate after the contract is terminated.201 Ordinarily, the termination of a contract will terminate all of the primary obligations of both parties, leaving extant only those secondary or ancillary obligations or expressly created rights that are clearly intended to operate after the termination.202 The equitable duty of confidence does not terminate with the employment contract. After employment ends the equitable duty narrows in scope, but the duty is not extinguished. The obligation of confidence often arises in the course of the employment relationship but it is not derived from it. It is for this reason that ‘the obligation of confidence can continue to subsist even when the employment relationship, and any fiduciary duties arising out of it, has terminated’.203 The equitable duty of confidence will usually subsist until one of two events occurs: first, the employer may consent to the trade secret being used or disclosed; second, the information may lose its secrecy.204 [page 1075]

Distinguishing know-how from trade secrets 16.44 In the absence of a reasonable restraint of trade clause, after the termination of employment an ex-employee is free to use the skill, experience, know-how and general knowledge (collectively ‘the employee’s know-how’) that he or she has acquired during the course of employment. As Professor Finn has stated: … the ex-employee is entitled to make full use of the knowledge, skill and experience which, as a result of his previous employment, have become his own. But what he cannot do — and will be restrained from doing — is to use personally or put at the disposal of his new employer secrets confided to him by his former employer. Such secrets are protected by the duty of confidence — a continuing duty — which an ex-employee owes to his former employer.205

There is no clear, bright line between information consisting of trade secrets

acquired during employment, whose post-employment use is not permitted, and the know-how of an employee, whose post-employment use is permitted. Customer lists have raised particular problems and are considered separately in 16.48–16.49. 16.45 Know-how consists of the general information acquired by an employee in the ordinary course of his or her employment. That accumulated knowledge will grow with longer service and broader experience.206 It is part of the total of his or her experience with that employer, not distinguished by any particular badge of confidence, which the employee will inevitably carry away in his or her head.207 However, the distinction between trade secrets and know-how does not lie solely in the distinction between things remembered and things tangible. A secret formula can be remembered, even if carried away in the head [page 1076] of an employee.208 As a matter of practice it will be more difficult for an employer to prove that intangible confidential information is not part of the employee’s know-how.209 Where an employee does not acquire the confidential information in the course of employment, but instead goes out of his or her way to learn the secret, then it will not be part of the employee’s know-how. For example, in Ormonoid Roofing and Asphalts Ltd v Bitumenoids Ltd the employee worked on two machines, a damp course machine and a roofing machine. He subsequently left the employment and formed a company to make these machines. He recollected information about the damp course machine and was permitted to rely on that know-how. With respect to the roofing machine, during his employment the employee had made measurements of the machine which were quite unnecessary for the purpose of his employment and had expended a great deal of care and time in the acquisition of details which were used to build the machine. Those acts were in breach of the employee’s duties and he was not permitted to later use the confidential information thereby acquired.210 16.46 Trade secrets are a narrower class of information than merely

confidential information. A trade secret must at least be confidential information: satisfying the criteria discussed in 7.125–7.128 is a necessary, but not sufficient, condition of being a trade secret. It has been said that whether information is a trade secret is a question of degree211 and, only marginally more helpfully, that trade secrets consist of that confidential information which a person of ordinary honesty and intelligence would recognise to be the property of the employer and not of the employee to deal with as he or she likes.212 Trade secrets have been described as ‘secrets so confidential that, even though they may necessarily have been [page 1077] learned by heart and even though the servant may have left the service, they cannot lawfully be used for anyone’s benefit but the master’s’.213 In Faccenda Chicken v Fowler the Court of Appeal determined that to ascertain whether information is a trade secret it was necessary to pay regard to a range of factors. These included, first, the nature of the employment. Employment in a capacity where such secret information is habitually handled may impose a high obligation of confidentiality because the employee can be expected to have a greater understanding of its sensitive nature than if he or she were employed in a capacity where such material reaches him or her only occasionally or incidentally.214 Second, the nature of the information itself is relevant. The information must be confidential and satisfy the criteria of confidentiality discussed in 7.125–7.128. It must be secret and not in the public domain.215 The information that forms part of the know-how of an employee is not a trade secret.216 To be classified as a trade secret the information would need to be so secret as to justify an obligation of confidentiality that will be unlimited in duration.217 Third, whether the employer impressed on the employee the confidentiality of the information and the steps taken to ensure its secrecy.218 Fourth, whether the relevant information can be easily isolated from other information which the employee is free to use or disclose.219

[page 1078] 16.47 The ease or difficulty with which the information is able to be specifically identified raises many of the same matters as those addressed in 7.125, as well as whether the know-how can be distinguished from the trade secrets.220 These difficulties are illustrated amply by GD Searle & Co Ltd v Celltech Ltd where the scientists, all ‘honourable men’, were being asked to distinguish between their substantial accumulated know-how and their recollection of the trade secrets recorded in 600 pages of notebooks, computer programs and unpublished patent applications. Lord Justice Cumming-Bruce refused to grant an injunction, stating: It is said that if the scientists have the advantage of working with a sword of Damocles suspended over their necks they will be more scrupulous to make sure that they are respecting the plaintiff’s confidences. I can find no support in the case law for any such exercise of the court’s exercise of its interlocutory power, and in principle I would regard it as oppressive.221

Toulson and Phipps have suggested an alternative distinction. They argue that a guide to whether the post-termination implied duty of confidentiality extends to a particular item is whether an express covenant to the same effect would be upheld. If the answer is doubtful, the issue should be resolved in favour of the employee.222 This is because, as recognised in restraint of trade cases, it is in the public interest that the employee be able to exercise his or her know-how after the employment has ceased:223 [The] use of confidential information restrictions in order to fetter the ability of these employees to use their skills and experience after determination of their employment to compete with their ex-employer is, in my view, potentially harmful. It would be capable of imposing a new form of servitude or serfdom, to use Cumming-Bruce LJ’s words,224 on technologically qualified employees. It would render them unable in practice to leave their employment for want of an ability to use their skills and experience after leaving. Employers who want to impose fetters of this sort on their employees ought in my view to be expected to do so by express covenant. The reasonableness of the covenant can then be subjected to the rigorous attention to which all employee covenants in restraint of trade are subject. In the absence of an express covenant, the ability of an ex-employee to compete can be restricted by means of an

[page 1079] implied term against use or disclosure of trade secrets. But the case must, in my view, be a clear one. An employee does not have the chance to reject an initial entry into employment. To fetter

his freedom to compete by means of an implied term can only be justified, in my view, by a very clear case.225

This distinction necessitates examination of all the evidence relating to the nature of the employment, the character of the information, the express restrictions imposed on its dissemination, the extent of use in the public domain and the damage likely to be caused by its use and disclosure in competition to the employer.226

Use of lists of customers and similar information after termination 16.48 There are a great many cases about the use by ex-employees of lists of customers. Injunctions are commonly sought to restrain ex-employees using the information to solicit clients. If there is a valid restraint of trade clause it may be enforced to prevent such solicitation: see 16.33. In the absence of such a clause, the correct approach to resolving these issues is as follows. First, ascertain whether information that the ex-employee seeks to use is confidential information. This depends on an application of the tests set out in 7.125–7.128. If it is not confidential information, then the employee will not be restrained from using the information.227 Often, employers’ customer lists are confidential information and, consequently, during the course of their employment employees are obliged not to use or disclose that information to others, or to use it for an improper purpose: see 7.58. Second, an employee who during the course of employment compiles, copies or memorises228 confidential information in a customer list for [page 1080] later use by the employee or a competitor will breach the duty of fidelity and the employee may be restrained from profiting from that breach.229 An injunction may issue after the employment has terminated to prevent the employee profiting from a breach that occurred during the employment. The compilation or copying of a customer list during employment will not be a

breach where the performance of those tasks is part of the job, such as salespeople who enter the names of clients in a diary for use on the road. However, where confidential information is entrusted to an employee for the limited purpose associated with the employer’s business, it can be used for that purpose and no other. After the termination of employment, as the list can no longer be used for that purpose the employee cannot use it for his or her own purposes.230 Third, an employer can restrain an ex-employee making use of a trade secret which is not part of the employee’s know-how after the termination of employment: see 16.44. The names of customers will usually be part of the know-how of an employee who deals with customers. Where a list of customers has been deliberately memorised then the information is less likely to be a part of the employee’s know-how; where the employee merely remembers who the customers were then information is part of the employee’s know-how and is not protected.231 As Tipping J has stated: The difficulty really stems from how the ex-employee retains or is able to call up his knowledge of the former employer’s customers. Genuine unaided memory is one thing; copying either on paper or in the mind lists or other customer data is quite another.232

[page 1081] 16.49 In the absence of a reasonable term in restraint of trade an ex-employee can draw upon his or her know-how of the names, addresses, contact details, needs and requirements of customers for the purpose of competing with the employer.233 The same approach is taken whether the information used, or memorised, concerns customer lists,234 suppliers or the names and contact details of former colleagues,235 or the information is contained in some other written material.236 For example, assume an employer has 10 clients. An employee who copies a list of the clients for use in later solicitation breaches the duty of fidelity and can be restrained by injunction from making use of the list.237 However, if the employee has not copied the list, he or she is entitled to solicit the customers whose names he or she can remember.238 When an injunction is issued to restrain an ex-employee making use of a list

in breach of duty it should not extend further than is necessary to prevent the wrong occurring. As Lindley LJ stated in Louis v Smellie in a matter concerning a copied list of agents: What I think the [employer] is entitled to is an injunction to restrain the [ex-employee], his servants and agents, from making use of any copies or extracts from the [employer’s] register of agents, or index, or any memorandum made or obtained by the [ex-employee] when in the [employer’s] employ relating to any person named in those books or either of them. That, I think, is as far as we can go. If the [ex-employee] happens to remember that there is an agent whose address he can find out from the ordinary directories, he is at liberty to do it.239

[page 1082]

REFERENCES The importance of references 16.50 References are important for employees. In assessing the importance of carefully given references, Lord Lowry observed: On the one hand looms the probability, often amounting to a certainty, of damage to the individual, which in some cases will be serious and may indeed be irreparable. The entire future prosperity and happiness of someone who is the subject of a damaging reference which is given carelessly but in perfectly good faith may be irretrievably blighted.240

References are also important for the economy as they assist employers in selecting employees.241 The selection on the basis of an inaccurate reference may result in increased training costs for the employer; costs associated with terminating the employment of an unsuitable employee and recruiting a more appropriate employee; and sometimes costs associated with the fraud of an employee arising from an inaccurate reference.242 A reference that represses unpalatable truths may also cause problems. 16.51 There are two broad types of references. A general reference is usually provided to the employee in a form similar to a statement of service. It is often addressed ‘To whom it may concern’. The employee has the opportunity to read a general reference and decide whether or not to rely on it when applying for future employment. Such references are the property of the employee to whom they are given. An employee’s reference was valuable

property in the days before photocopiers and computer printers. He or she could recover damages if a current or prospective employer defaced or destroyed the original of such a reference.243 The second type of reference is the specific reference that a former employer communicates to a prospective employer in response to a request by either the employee or the prospective employer. Specific references are often wholly or partly oral. The employee usually does not know the contents of the specific reference until after it has been [page 1083] given. Where a former employer writes a specific reference and sends it directly to the prospective employer, the reference is not the property of the employee and no action will lie if the prospective employer destroys the reference.244 In the discussion below a distinction can also be drawn between falsely negative references and falsely positive references. A falsely negative reference is false because it contains untrue statements critical of an employee, such as ‘Joe is dishonest’ when in fact Joe is honest. A falsely positive reference is false because it contains untrue statements praising an employee, such as ‘Joe is honest’, when in fact the employer knows that Joe is dishonest.

The obligation to provide a reference 16.52 An employer is under no obligation to provide a reference, unless such an obligation is created by an express or implied term of the contract or by a statute.245 Usually a term requiring the giving of a reference is not implied into contracts of employment. In Spring v Guardian Assurance plc (Spring) Lord Woolf in dicta suggested that a term relating to references may be implied in law in some classes of employment contract.246 The term, when implied, would require the employer to provide a reference to prospective employers and to exercise care in its compilation. Lord Woolf contemplated that such a term would be

implied as a necessary incident of a definable category of contractual relationship if three facts existed.247 First, there is an employment contract between the parties. Second, the employment occurs in an industry in which it is normal practice for a prospective employer to require a reference from a previous employer before offering employment.248 Third, an employee in the industry could not be expected to enter a new job unless his or her former employer provides the prospective employer with a full and frank reference. The other two members of the House of Lords who touched on this issue took a different approach. Lord Slynn observed in dicta that even [page 1084] if there is no universal duty to provide a reference, there would be some contracts in which such a duty would be implied.249 Lord Keith agreed with the Court of Appeal that such a term was not a necessary incident of Mr Spring’s employment contract.250 There is some Australian support in industrial tribunals for a wider recognition of an implied term similar to that referred to by Lord Woolf.251 Whether such a term is implied will ultimately be determined by whether the term is a necessary incident of the employment relationship being considered.252 Where the employment is conducted in an atypical regulatory and industrial context, as in Spring, then such terms may be necessary. However, although the provision of careful references may be economically and socially desirable, it is not a necessary incident of most employment contracts. An employer whose refusal to provide a reference is based on discriminatory reasons or is an act of victimisation may be in breach of anti-discrimination legislation.253 The provision of a falsely negative reference may be a breach of the implied term of trust and confidence justifying an employee’s election to resign.254

The negligent provision of a reference: Spring v Guardian Assurance plc

16.53 The law relating to the negligent provision of a reference was significantly altered in the United Kingdom by the 1994 House of Lords decision in Spring v Guardian Assurance plc.255 Mr Spring was dismissed [page 1085] without notice shortly after the sale of his employer and a change in senior management. Although Mr Spring was probably not an employee of the respondent, this was not important in the outcome of the case or the reasoning of the members of the House of Lords.256 He tried to obtain other employment in the industry. Under the rules of the regulatory body governing employment in the finance industry where he worked the new employer was required to obtain a reference from the former employer. The reference provided was described by the trial judge as ‘the kiss of death’: it included the phrase ‘he is a man of little or no integrity and could not be regarded as honest’. Not surprisingly, Mr Spring had great difficulties finding other employment in the finance industry. Mr Spring commenced an action against his former employer. He relied on three causes of action: breach of contract, injurious falsehood and negligence. At trial and in the Court of Appeal, Mr Spring failed on the first ground because the courts were not satisfied that a term was implied into his contract as he alleged.257 He failed on the second ground because he was unable to prove that the respondents had acted with malice in the preparation of the reference. He succeeded on the third ground. The principal question addressed by the House of Lords was whether the employer owed a duty of care to Mr Spring in the giving of the reference. If such a duty was owed, and there was a breach of that duty that caused damage, then Mr Spring could successfully sue his employer in negligence. The action would fail if there was no duty. The success of any action in negligence did not depend on the proof of malice (or even intent to damage Mr Spring). A majority of the House of Lords concluded that the employer owed a duty to Mr Spring to exercise reasonable care in the giving of the reference.258 16.54 There is some doubt about whether the decision in Spring is applicable in Australia. In an employment context it has been applied in some superior

court decisions but not followed or applied in others.259 The doubt about its application principally arises from the need for [page 1086] coherence between the law of negligence and the law of defamation. To succeed in an action for defamation an employee who has received a falsely negative reference must prove malice. In deciding whether to impose a duty of care in a new set of circumstances, such as the duty imposed in Spring, the court must consider the consistency and compatibility of the novel duty of care with existing common law causes of action and defences. It must confront the question of whether, as a matter of policy, it is appropriate for the common law, through the medium of the law of negligence, to impose a novel duty on an employer to be careful in the provision of references in circumstances in which the common law, through the medium of the law of defamation, currently imposes no such duty.260 The members of the House of Lords in Spring confronted these issues directly and resolved the policy question in favour of the imposition of a duty of care.261 However, since that decision the House of Lords and the High Court of Australia have emphasised the need for coherence between new developments in the law of torts and other areas of the common law and the statute law.262 In addition to the concerns about coherence of the law, the test used by the House of Lords in Spring gives rise to another related, but less clearly pressing, doubt about the application of that decision in Australia. In determining if a duty of care existed the House of Lords partly based its decision on the three-stage test in Caparo Industries Plc v Dickman.263 That three-stage test is not the law in Australia.264 The different tests used to determine if a duty of care arises may result in Australian courts concluding that employers do not owe employees a duty to exercise reasonable care in the giving of references. 16.55 A new employer may also maintain an action in negligence against an employee’s former employer for a negligently made, falsely positive reference. As Lord Slynn stated in Spring:

[page 1087] There is … no doubt that liability may arise for economic loss arising from a negligently made misstatement where the statement is given to someone who relies on it and suffers loss, though this will usually arise where the giver of the statement knows that the person to whom it is given or some other person will rely on it for a specific purpose.265

It is clear that on the basis of these principles the former employer owes a duty to the prospective employer to take reasonable care in the preparation and provision of the reference.266 A former employer who falsely and negligently states that an employee has skills that the employee does not possess may be liable for damages caused by such a misstatement.

The duty owed to the employee 16.56 Despite the reservations mentioned in 16.54, it is possible that in some cases the employer will owe the employee a duty to exercise reasonable care in the giving of the reference. It is unlikely that a similar duty would attach to the provision of a reference by a friend or social acquaintance of the employee.267 Mummery LJ has observed: The essential point about a reference is that it will normally satisfy the requirements of a duty to take reasonable care if it is accurate and fair. Although it must not contain misleading information or create a misleading impression, a reference does not, as a general rule, have to provide a full and comprehensive report on all the material facts concerning the subject.268

An employer need not provide a full and comprehensive reference in every case or refer to all material facts.269 When determining the accuracy of a reference it is inappropriate to parse each sentence. The reference must be considered as a whole. A breach may arise when the reference only tells half the truth.270 The duty is more than merely to be honest in the reference; it is also to provide the reference carefully. A careless but honestly made reference may be in breach of the duty. Where the duty [page 1088] does arise it is necessary for the employee to prove loss as a result of the

breach, such as the loss of a chance to obtain future employment.271 The duty cannot be breached if the reference has not been given. In Legal & General Assurance Limited v Kirk the employee refrained from applying for alternative employment because he apprehended that his former employer would make negligent misstatements in a reference that was essential for his future employment. The Court of Appeal held that the principles enunciated by the House of Lords in Hedley Byrne v Heller and Spring272 did not apply when the employer had not made a negligent misstatement.273 16.57 It appears that the duty may arise when the former employer provides information to third parties who are not prospective employers, but who are in a position to affect the future employment prospects of the employee. The circumstances in which such a duty will arise are yet to be exactly determined. In Wade v State of Victoria the plaintiff was a former member of the Victoria Police. His employer had made applications to supply gaming machines in Queensland. As part of the vetting process of that application the Queensland Criminal Justice Commission sought information from the Victoria Police. The plaintiff alleged that the information supplied was misleading and caused him, after the publication of a damning Criminal Justice Commission report, to lose his job. The court held that the Victoria Police were under a duty to be careful in the provision of that information.274

References for employees who commit misconduct 16.58 Where an employee has committed acts of misconduct (or the employer suspects such acts), the employer who is asked to provide a reference is in an invidious position. Competing legal and moral obligations may weigh heavily on the employer in such cases. On the one hand, the employer may be generous to the employee by providing a reference unadulterated by allusions to the acts of (or accusations of) misconduct. By doing so an employer may be in breach of duties owed to prospective employers.275 On the other hand, the employer may be [page 1089]

in breach of duties owed to the employee if the reference inaccurately, unfairly or carelessly misstates the acts or accusations of misconduct. As Lord Justice Rix has observed, ‘in such a position it is necessary above all to try to be objective’.276 16.59 Employers must be careful when providing references about employees who leave employment following unresolved accusations of misconduct. Where an employee has resigned after an accusation of misconduct has been made, it may be negligent for the employer to state that the employee did in fact commit the act of misconduct when the allegation was unproven or not investigated. It is reasonably common for employees accused of misconduct to agree to resign, with or without a termination package. When providing a reference about such an employee an employer should not assume (or precipitously conclude) that an employee who agrees to resign his or her employment is guilty of the misconduct alleged. If an employer genuinely believes that the employee is guilty of the misconduct, and has reasonable grounds for that belief, and has carried out a reasonable investigation into the allegations of misconduct, then a reference indicating that the employee has committed that act of misconduct is unlikely to be negligent.277 However, an employer who fails to investigate allegations of misconduct properly, and repeats unfounded and untrue allegations, may be negligent and liable for damages. In many cases the employee’s resignation will prevent (or render unnecessary) a full investigation of outstanding allegations of misconduct; in such cases the employer must take ‘reasonable care to confine unfavourable written and oral comments to those matters which have been investigated before [the resignation] and which provide reasonable grounds for statements about [the employee]’.278 ____________________ 1.

J Heydon, The Restraint of Trade Doctrine, 3rd ed, LexisNexis Butterworths, Australia, 2008 (J Heydon); A Stewart, ‘Drafting and Enforcing Post-Employment Restraints’ (1997) 10 AJLL 181; A Brooks, ‘The Limits of Competition: Restraint of Trade in the Context of Employment Contracts’ (2001) 24 UNSWLJ 346; J Riley, ‘Who Owns Human Capital? A Critical Appraisal of Legal Techniques for Capturing the Value of Work’ (2005) 18 AJLL 1.

2.

Howard F Hudson Pty Ltd v Ronayne (1972) 126 CLR 449 at 452–3.

3.

Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd [1894] AC 535 at 565.

4.

Esso Petroleum Co Ltd v Harper’s Garage (Stourport) Ltd [1968] AC 269 at 324; [1967] 1 All ER 699 at 724–5; Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181; 185 ALR 152 at [69].

5.

Bacchus Marsh Concentrated Milk Co Ltd (in liq) v Joseph Nathan & Co Ltd (1919) 26 CLR 410 at 440; Peters (WA) Ltd v Petersville Ltd (2001) 205 CLR 126; 181 ALR 337 at [37].

6.

Maggbury Pty Ltd v Hafele Australia Pty Ltd, note 4 above, at [69]; Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd (1973) 133 CLR 288 at 307; 1 ALR 385 at 400.

7.

Esso Petroleum Co Ltd v Harper’s Garage (Stourport) Ltd, note 4 above, AC at 331; All ER at 729–30; Peters (WA) Ltd v Petersville Ltd, note 5 above, at [14].

8.

J Heydon, note 1 above, p 52; Petrofina (Gt Britain) Ltd v Martin [1966] Ch 146 at 180; 1 All ER 126 at 138 and on appeal at [1968] AC 269 at 317; [1967] 1 All ER 699 at 719–20; Boddington v Lawton [1994] ICR 478 at 485; Maggbury Pty Ltd v Hafele Australia Pty Ltd, note 4 above, at [55].

9.

Outside of employment, restraint of trade clauses also cover a range of issues not considered in this book, including exclusive supply contracts, covenants on the sale of a business and cartels between the buyers or sellers of labour.

10.

Maggbury Pty Ltd v Hafele Australia Pty Ltd, note 4 above, at [56]; Peters (WA) Ltd v Petersville Ltd, note 5 above, at [37].

11.

Maggbury Pty Ltd v Hafele Australia Pty Ltd, note 4 above, at [56]; see the various cases concerning sportspeople such as Buckley v Tutty (1971) 125 CLR 353 at 371–2; R v Federal Court of Australia; Ex parte Western Australian National Football League (Inc) & Adamson (1979) 143 CLR 190; 23 ALR 439 and Hughes v Western Australian Cricket Association (Inc) (1986) 19 FCR 10; 69 ALR 660.

12.

Hughes v Western Australian Cricket Association (Inc), note 11 above, FCR at 49–50; ALR at 700; Buckley v Tutty, note 11 above, at 371–2; Avellino v All Australia Netball Association Ltd (2004) 87 SASR 504; [2004] SASC 56 at [91]–[97].

13.

Peters (WA) Ltd v Petersville Ltd, note 5 above, at [14].

14.

Howard F Hudson Pty Ltd v Ronayne, note 2 above, at 457, 459, 462, 467–9; Wyatt v Kreglinger and Fernau [1933] 1 KB 793; Bull v Pitney-Bowes Ltd [1966] 3 All ER 384 at 389–90; [1967] 1 WLR 273 at 282.

15.

Howard F Hudson Pty Ltd v Ronayne, note 2 above, at 458–9, 465–6; Wyatt v Kreglinger and Fernau, note 14 above, at 807.

16.

On severance, see 16.20.

17.

David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 at 365; 109 ALR 57 at 64–5.

18.

Buckley v Tutty, note 11 above, at 381; Hughes v Western Australian Cricket Association (Inc), note 11 above, FCR at 50; ALR at 700; Eastham v Newcastle United Football Club Ltd [1964] Ch 413 at 441–2; [1963] 3 All ER 139 at 148–9; Greig v Insole [1978] 3 All ER 449; Adamson v New South Wales Rugby League Ltd (1991) 31 FCR 242 at 247, 265 and 289; 103 ALR 319 at 323, 340 and 364; Aerial Taxi Cabs Co-operative Society Ltd v Lee (2000) 102 FCR 125; 178 ALR 73 at [9].

19.

Buckley v Tutty, note 11 above, at 376; Aerial Taxi Cabs Co-operative Society Ltd v Lee, note 18 above, at [12].

20.

Mineral Water Bottle Exchange & Trade Protection Society v Booth (1887) 36 Ch D 465 at 471; Kores Manufacturing Co Ltd v Kolok Manufacturing Co Ltd [1957] 3 All ER 158 at 162–3 (aff’d [1958] 2 All ER 65 at 75).

21.

See Earth Force Personnel Pty Ltd v EA Negri Pty Ltd [2010] VSC 426 at [22]–[38]; Informax International Pty Ltd v Clarius Group Ltd (2011) 192 FCR 210; 277 ALR 495 at [45]–[57].

22.

See A Stewart, note 1 above, at 182–3.

23.

Adamson v New South Wales Rugby League Ltd, note 18 above, FCR at 267–8; ALR at 341–2 per Wilcox J.

24.

Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd, note 3 above, at 565.

25.

Buckley v Tutty, note 11 above, at 376; Herbert Morris Ltd v Saxelby [1916] 1 AC 688 at 707; Lindner v Murdock’s Garage (1950) 83 CLR 628 at 645 and 654; Butt v Long (1953) 88 CLR 476 at 486; Howard F Hudson Pty Ltd v Ronayne, note 2 above, at 456; Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd, note 6 above, CLR at 306; ALR at 399.

26.

See 16.25.

27.

Adamson v New South Wales Rugby League Ltd, note 18 above, FCR at 266–8; ALR at 341–3 per Wilcox J; see also at 247; ALR at 323. At 290; ALR at 365–6 Gummow J adopts a different approach. See also Aerial Taxi Cabs Co-operative Society Ltd v Lee, note 18 above, at [14]; Brightman v Lamson Paragon Ltd (1914) 18 CLR 331 at 337–8; Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd, note 6 above, CLR at 316; ALR at 407–8; Attwood v Lamont [1920] 3 KB 571 at 587.

28.

Adamson v New South Wales Rugby League Ltd, note 18 above, FCR at 248, 266–7 and 290–1; ALR at 323, 341–2 and 365–6.

29.

Leetham & Sons Ltd v Johnstone White [1907] 1 Ch 323 at 327; Business Seating (Renovations) Ltd v Broad [1989] ICR 729 at 734–5; IF Asia Pacific Pty Ltd v Galbally (2003) 59 IPR 43; [2003] VSC 192 at [171]–[172]; Rex Stewart Jeffries Parker Ginsberg Ltd v Parker [1988] IRLR 483 at 484–5; see also AMP Services Ltd v Manning [2006] FCA 256 at [52].

30.

See Seven Network (Operations) Limited v Warburton (No 2) [2011] NSWSC 386 at [66]–[69].

31.

Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd, note 3 above, at 565 and 574; Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd, note 6 above, CLR at 306–7; ALR at 399–400; Esso Petroleum Co Ltd v Harper’s Garage (Stourport) Ltd, note 4 above, AC at 299, 307 and 318–19; All ER at 709, 713 and 720.

32.

Esso Petroleum Co Ltd v Harper’s Garage (Stourport) Ltd, note 4 above, AC at 301, 321; All ER at 709, 722; Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd, note 6 above, CLR at 307–8; ALR at 400–1.

33.

See Sherk v Horwitz [1972] OR 451 and Thomas Cowan and Co Ltd v Orme (1960) MLJ 41 discussed in J Heydon, note 1 above, pp 143–4; Kores Manufacturing Co Ltd v Kolok Manufacturing Co Ltd, note 20 above, at 162–3 (aff’d [1958] 2 All ER 65 at 75); Spencer v Marchington [1998] IRLR 392 at 396; Angel-Honnibal v Idameneo (No 123) Pty Ltd [2003] NSWCA 263 at [27]; Sir WC Leng & Co Ltd v Andrews [1909] 1 Ch 763 at 774; Triplex Safety Glass Ltd v Scorah [1938] Ch 211 at 215; A Brooks, note 1 above, at 349; see also Hughes v Western Australian Cricket Association (Inc), note 11 above, FCR at 52; ALR at 703 where Toohey J observed that there was a public interest in ‘having every opportunity to see first class cricketers in action’.

34.

See J Heydon, note 1 above, Ch 6.

35.

Potato Producers Co-operative Ltd v Pavone [1962] VR 231 at 237; Watson v Prager [1991] 3 All ER 487 at 507–8; Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd, note 6 above, CLR at 301; ALR at 395; Adamson v New South Wales Rugby League Ltd, note 18

above, FCR at 285; ALR at 360; Curro v Beyond Productions Pty Ltd (1993) 30 NSWLR 337 at 342 and 344. 36.

Haynes v Doman [1899] 2 Ch 13 at 26; Home Counties Dairies Ltd v Skilton [1970] 1 WLR 526 at 533–7; [1970] 1 All ER 1227 at 1231–5; Adamson v New South Wales Rugby League Ltd, note 18 above, FCR at 286; ALR at 361; Geraghty v Minter (1979) 142 CLR 177 at 180; 26 ALR 141 at 144; cf Rentokil Pty Ltd v Lee (1995) 66 SASR 301 at 304.

37.

Geraghty v Minter, note 36 above, CLR at 185; ALR at 144; Lindner v Murdock’s Garage, note 25 above, at 641.

38.

Geraghty v Minter, note 36 above, CLR at 185; ALR at 148; Cactus Imaging Pty Ltd v Peters (2006) 71 NSWLR 9 at [11].

39.

Attwood v Lamont, note 27 above, at 588; Mason v Provident Clothing and Supply Co Ltd [1913] AC 724 at 738, 739, 746.

40.

Adamson v New South Wales Rugby League Ltd, note 18 above, FCR at 246–7, 266–8, 289–90; ALR at 322, 341–3 and 364–5.

41.

Butt v Long, note 25 above, at 485–9, 490–1; IF Asia Pacific Pty Ltd v Galbally, note 29 above, at [105]–[126].

42.

Mills v Dunham [1891] 1 Ch 576 at 589–90; TFS Derivatives Limited v Morgan [2005] IRLR 246 at [80].

43.

IF Asia Pacific Pty Ltd v Galbally, note 29 above, at [105].

44.

See J Heydon, note 1 above, pp 174–6. On consideration in the formation of the contract, see 3.28; on consideration to support the variation of the contract, see 6.31–6.34; on the role of consideration when granting an injunction, see 15.12.

45.

Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd, note 6 above, CLR at 316; ALR at 407–8. J Heydon, note 1 above, pp 175–6 discusses the historical development of this principle prior to Hitchcock v Coker (1837) 6 Ad & El 438. See 3.37 on the approach of courts to assessing the adequacy of consideration generally.

46.

Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd, note 6 above, CLR at 305–6 and 316; ALR at 399 and 407–8; Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd, note 3 above, at 565; Esso Petroleum Co Ltd v Harper’s Garage (Stourport) Ltd, note 4 above, AC at 300 and 323; All ER at 708 and 724; Miles v Genesys Wealth Advisers Ltd (2009) 201 IR 1; [2009] NSWCA 25 at [66].

47.

Tullett Prebon (Australia) Pty Ltd v Purcell (2008) 175 IR 414; [2008] NSWSC 852 at [87]; Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd, note 6 above, CLR at 306; ALR at 399.

48.

Herbert Morris Ltd v Saxelby, note 25 above, at 707; Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd, note 6 above, CLR at 305–6; ALR at 399.

49.

A Buckle & Son Pty Ltd v McAllister (1986) 4 NSWLR 426 at 432. See also Bridge v Deacons [1984] AC 705 at 718–9; 2 All ER 19 at 25.

50.

Marchon Products Ltd v Thornes (1954) 71 RPC 445; Metcash Ltd v Jardim (2010) 273 ALR 407; [2010] NSWSC 1096 at [48].

51.

See 4.10–4.12; Esso Petroleum Co Ltd v Harper’s Garage (Stourport) Ltd, note 4 above, AC at 300; All ER at 708.

52.

A Schroeder Music Publishing Co Ltd v Macaulay [1974] 1 WLR 1308 at 1315; 3 All ER 616 at

623; Watson v Prager, note 35 above, at 507–9; cf Curro v Beyond Productions Pty Ltd, note 35 above, at 345. 53.

Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd, note 6 above, CLR at 306–7 and 316–17; ALR at 399–400 and 407–8; Queensland Co-operative Milling Association v Pamag Pty Ltd (1973) 133 CLR 260 at 268; 1 ALR 47 at 53; Extraman (NT) Pty Ltd v Blenkinship (2008) 155 NTR 31; [2008] NTSC 31 at [79].

54.

A Stewart, note 1 above, at 185–6.

55.

Seven Network (Operations) Limited v Warburton (No 2), note 30 above, at [72].

56.

Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd, note 3 above, at 573–4; Lindner v Murdock’s Garage, note 25 above, at 638, 647 and 653; Adamson v New South Wales Rugby League Ltd, note 18 above, FCR at 285; ALR at 360; Curro v Beyond Productions Pty Ltd, note 35 above, at 344; ICT Pty Ltd v Sea Containers Ltd (1995) 39 NSWLR 640 at 670–1.

57.

Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd, note 6 above, CLR at 318; ALR at 409–10; Adamson v New South Wales Rugby League Ltd, note 18 above, FCR at 285; ALR at 360.

58.

Lindner v Murdock’s Garage, note 25 above, at 659; Putsman v Taylor [1927] 1 KB 637 at 642– 3; Adamson v NSW Rugby League Ltd, note 18 above, FCR at 285; ALR at 360; ICT Pty Ltd v Sea Containers Ltd, note 56 above, at 670–1.

59.

Putsman v Taylor, note 58 above, at 643; Haynes v Doman, note 36 above, at 26; Home Counties Dairies Ltd v Skilton, note 36 above, WLR at 537; Gledhow Autoparts v Delaney [1965] 3 All ER 288 at 295; Cactus Imaging Pty Ltd v Peters, note 38 above, at [37]; see also the discussion of J Heydon, note 1 above, pp 177–9.

60.

Gledhow Autoparts v Delaney, note 59 above, at 295. As to whether a reasonable restraint can be transformed into an unreasonable one due to changed conditions, see Shell UK Ltd v Lostock Garage Ltd [1976] 1 WLR 1187 at 1197–8; Geraghty v Minter, note 36 above, CLR at 188, 199– 200; ALR at 150 and 159–60 and Adamson v New South Wales Rugby League Ltd, note 18 above, FCR at 285; ALR at 360.

61.

Cedar Hill Flowers and Foliage Pty Ltd v Spierenburg [2003] 1 Qd R 482; [2002] QCA 348 at [21]–[25]; Lansing Linde Ltd v Kerr [1991] 1 All ER 418 at 427.

62.

Barlow v Neville Jeffress Advertising Pty Ltd (1994) 4 Tas R 391 at 398.

63.

Hamilton v Lethbridge (1912) 14 CLR 236 at 268–70; see further 6.43.

64.

Pioneer Concrete Services Ltd v Galli [1985] VR 675 at 694–5; Konski v Peet [1915] 1 Ch 530 at 538–9.

65.

Lindner v Murdock’s Garage, note 25 above, at 633, 640 and 653; Herbert Morris Ltd v Saxelby, note 25 above, at 707; Geraghty v Minter, note 36 above, CLR at 188; ALR at 150.

66.

Herbert Morris Ltd v Saxelby, note 25 above, at 700 and 707; Lindner v Murdock’s Garage, note 25 above, at 640 and 653; Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd, note 6 above, CLR at 317; ALR at 408–9; Routh v Jones [1947] 1 All ER 758 at 763 and 764.

67.

J Heydon, note 1 above, p 34.

68.

Herbert Morris Ltd v Saxelby, note 25 above, at 700 and 707; Esso Petroleum Co Ltd v Harper’s Garage (Stourport) Ltd, note 4 above, AC at 319 and 323; All ER at 721 and 724; Lindner v Murdock’s Garage, note 25 above, at 633; Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd, note 6 above, CLR at 317; ALR at 408–9.

69.

Mason v Provident Clothing and Supply Co Ltd, note 39 above, at 732; Herbert Morris Ltd v Saxelby, note 25 above, at 700 and 707; Lindner v Murdock’s Garage, note 25 above, at 653; Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd, note 6 above, CLR at 305–6 and 317–18; ALR at 399 and 409; Sir WC Leng & Co Ltd v Andrews [1909] 1 Ch 763 at 770.

70.

Haynes v Doman, note 36 above, at 24; Adamson v New South Wales Rugby League Ltd, note 18 above, FCR at 286; ALR at 361; Stenhouse Australia Ltd v Phillips [1974] AC 391 at 402; [1973] 2 NSWLR 691 at 699.

71.

J Heydon, note 1 above, pp 43–4; see also Woolworths Limited v Olson [2004] NSWCA 372 at [38]; Queensland Co-operative Milling Association v Pamag Pty Ltd, note 53 above, CLR at 268; ALR at 53.

72.

Buckley v Tutty, note 11 above, at 379–80.

73.

Watson v Prager, note 35 above, at 509; Esso Petroleum Co Ltd v Harper’s Garage (Stourport) Ltd, note 4 above, AC at 297; All ER at 707; Buckley v Tutty, note 11 above, at 379–80.

74.

Cedar Hill Flowers and Foliage Pty Ltd v Spierenburg, note 61 above, at [35]; Buckley v Tutty, note 11 above, at 379–80.

75.

Cedar Hill Flowers and Foliage Pty Ltd v Spierenburg, note 61 above, at [36]–[42].

76.

Howard F Hudson Pty Ltd v Ronayne, note 2 above.

77.

Rentokil Pty Ltd v Lee, note 36 above, at 304; Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd, note 6 above, CLR at 316; ALR at 407–8.

78.

Measures Brothers Limited v Measures [1910] 2 Ch 248 at 254; [1908–1910] All ER 1188 at 1195; General Bill Posting Co Ltd v Atkinson [1909] AC 118; Kaufman v McGillicuddy (1914) 19 CLR 1 at 11–12 and 14; Briggs v Oates [1991] 1 All ER 407 at 412–4; [1990] ICR 473 at 479–80 and Rock Refrigeration Ltd v Jones [1997] 1 All ER 1 at 6.

79.

Briggs v Oates, note 78 above, All ER at 412–4; ICR at 479–80; D v M [1996] IRLR 192 at 198; Living Design (Home Improvements) Ltd v Davidson [1994] IRLR 69 at 71. The Court of Appeal decision in Rock Refrigeration Ltd v Jones, note 78 above, at 6–9 and 13–14 precludes such an argument in most cases; see also A Brooks, note 1 above, at 352–4.

80.

Curro v Beyond Productions Pty Ltd, note 35 above, at 347–8; Seven Network (Operations) Limited v Warburton (No 2), note 30 above, at [90]; Tullett Prebon (Australia) Pty Ltd v Purcell, note 47 above, at [88]–[96] and Provident Financial Group v Hayward [1989] 3 All ER 298 at 302–5; [1989] ICR 160 at 165–8; on a related point, see Warner Bros Pictures Inc v Nelson [1937] 1 KB 209 at 221–2; [1936] 3 All ER 160 at 168.

81.

Seven Network (Operations) Limited v Warburton (No 2), note 30 above, at [18]–[25] and [94].

82.

Metcash Ltd v Jardim, note 50 above, at [59]; see also Landmark Underwriting Agency Pty Ltd v Kilborn [2006] NSWSC 1108 at [82]–[94]. On springboard injunctions see 15.90.

83.

Adamson v New South Wales Rugby League Ltd, note 18 above, FCR at 287–8; ALR at 362–3; Buckley v Tutty, note 11 above, at 381. On declarations see 15.91–15.103.

84.

See 3.60; Life Assurance Co of Australia v Phillips (1925) 36 CLR 60 at 72; Whitlock v Brew (No 2) [1967] VR 803 at 812–3 and Whitlock v Brew (1968) 118 CLR 445 at 461; Kulkarni v Milton Keynes Hospital NHS Trust [2010] ICR 101; [2009] EWCA Civ 789 at [58].

85.

SST Consulting Services Pty Ltd v Rieson (2006) 225 CLR 516; 228 ALR 417 at [42]–[49].

86.

See 3.37; SST Consulting Services Pty Ltd v Rieson, note 85 above, at [46]; Marshall v NM

Financial Management Ltd [1997] ICR 1065 at 1069–71; Wyatt v Kreglinger and Fernau, note 14 above. 87.

Marshall v NM Financial Management Ltd, note 86 above, at 1069–70 (benefit to employee supported by both lawful service and an illegal restraint of trade clause); Bull v Pitney-Bowes Ltd, note 14 above, All ER at 389–90; WLR 273 at 282; Sadler v Imperial Life Assurance Co [1988] IRLR 388; Beckett Investment Management Group Ltd v Hall [2007] ICR 1539; [2007] EWCA Civ 613 at [40]–[44].

88.

Miller v Karlinski (1945) 62 TLR 85 at 85–6; Napier v National Business Agency Ltd [1951] 2 All ER 264 at 266.

89.

SST Consulting Services Pty Ltd v Rieson, note 85 above, at [46]; J Heydon, note 1 above, p 233.

90.

TV Shopping Network Ltd v Scutt (1988) 43 IPR 451 at 457.

91.

See also J Heydon, note 1 above, pp 226–8 discussing a possible third condition.

92.

Lindner v Murdock’s Garage, note 25 above, at 659; J Heydon, note 1 above, p 224.

93.

John Holland Group Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2010) 198 IR 439; [2010] VSC 322 at [14]–[15] (aff’d [2011] VSCA 396).

94.

Davies v Davies (1887) 36 Ch D 359 at 388; Ross v IceTV [2010] NSWCA 272 at [80]–[81]; Austra Tanks Pty Ltd v Running [1982] 2 NSWLR 840 at 845; Northern Tablelands Insurance Brokers Pty Ltd v Howell (2009) 184 1R 307; [2009] NSWSC 426 at [54]; Run Corp Ltd v McGrath Ltd [2007] FCA 1669 at [27]–[29].

95.

Schindler Lifts Australia Pty Ltd v Debelak (1989) 89 ALR 275 at 305; Austra Tanks Pty Ltd v Running, note 94 above, at 846–8; cf Lloyds Ships Holdings Pty Ltd v Davros Pty Ltd (1987) 17 FCR 505 at 520–3; 72 ALR 643 at 658–61 and Northern Tablelands Insurance Brokers Pty Ltd v Howell, note 94 above, at [48]–[56].

96.

Extraman (NT) Pty Ltd v Blenkinship, note 53 above, at [44]–[55]; JQAT Pty Ltd v Storm [1987] 2 Qd R 162 at 164 and 166–7; Hanna v OAMPS Insurance Brokers Ltd (2010) 202 IR 420; [2010] NSWCA 267 at [7]–[17].

97.

Hanna v OAMPS Insurance Brokers Ltd, note 96 above, at [13]; Seven Network (Operations) Limited v Warburton (No 2), note 30 above, at [37].

98.

McFarlane v Daniell (1938) 38 SR (NSW) 337 at 348 referred to approvingly in SST Consulting Services Pty Ltd v Rieson, note 85 above, at [48]; Marshall v NM Financial Management Ltd, note 86 above; Mason v Provident Clothing and Supply Co Ltd, note 39 above, at 742 and 745; Business Seating (Renovations) Ltd v Broad, note 29 above, at 734–5.

99.

Whitlock v Brew (No 2), note 84 above, at 807–8 (aff’d Whitlock v Brew, note 84 above); Rentokil Pty Ltd v Lee, note 36 above, at 306–7.

100. Attwood v Lamont, note 27 above, at 578 and 593; Barlow v Neville Jeffress Advertising Pty Ltd, note 62 above, at 399–400; Konski v Peet, note 64 above, at 539; IF Asia Pacific Pty Ltd v Galbally, note 29 above, at [171]–[201]. 101. Whitlock v Brew (No 2), note 84 above, at 807–8 (aff’d (1968) 118 CLR 445). 102. See 3.5. 103. J Heydon, note 1 above, pp 296–301. 104. Orton v Melman [1981] 1 NSWLR 583 at 587; Cactus Imaging Pty Ltd v Peters, note 38 above, at [10].

105.

Industrial Rollformers Pty Ltd v Ingersoll-Rand (Aust) Ltd [2001] NSWCA 111 at [165] per Giles JA; Ross v IceTV [2010] NSWCA 272 at [89]–[91].

106. Orton v Melman, note 104 above, at 587; Cactus Imaging Pty Ltd v Peters, note 38 above, at [10]. 107. Woolworths Ltd v Olson, note 71 above, at [42]. 108. Stenhouse Australia Ltd v Phillips, note 70 above, AC at 400; NSWLR at 697; Faccenda Chicken Ltd v Fowler [1987] Ch 117 at 136; [1986] 1 All ER 617 at 625–6; Granosite Pty Ltd v Wieland (1982) 9 IR 218 at 238–9; Drake Personnel Ltd v Beddison [1979] VR 13 at 24; Helmet Integrated Systems Ltd v Tunnard [2007] FSR 437 at 445; Digital Pulse Pty Limited v Harris (2002) 40 ACSR 487; [2002] NSWSC 33 at [19]–[26] (varied in part on appeal at (2003) 56 NSWLR 298; 197 ALR 626; [2003] NSWCA 10); On the Street Pty Ltd v Cott (1990) 3 ACSR 54 at 61. The same freedom applies to directors and other fiduciaries: Rishmont Pty Ltd v Tweed City Medical Centre [2002] 2 Qd R 222; [2001] QSC 372 at [17]. 109. Wessex Dairies Ltd v Smith [1935] 2 KB 80 at 88; Ridgeway International Ltd v McCullum [1998] NSWSC 151; Metrans Pty Ltd v Courtney-Smith (1983) 8 IR 379; Print Investments Pty Ltd v Art-Vue Printing Ltd (1983) 8 IR 385; Griffiths & Beerens Pty Ltd v Duggan (2008) 68 ASCR 471; [2008] VSC 201 at [145]; Robb v Green [1895] 2 QB 1 at 13; Del Casale v Artedomus (Aust) Pty Ltd (2007) 73 IPR 326; 165 IR 148 at [77]; Diamond Stylus Co Ltd v Bauden Precision Diamonds Ltd [1972] FSR 177 at 180–1; Digital Pulse Pty Limited v Harris, note 108 above, at [19]–[26]. 110. Metrans Pty Ltd v Courtney-Smith, note 109 above, at 384; Printers and Finishers Ltd v Holloway [1965] 1 WLR 1 at 7; [1964] 3 All ER 731 at 736–7; Rishmont Pty Ltd v Tweed City Medical Centre, note 108 above, at [17]. 111. Berkeley Administration Inc v McClelland [1990] FSR 505 at 528 per Wright J. 112. Helmet Integrated Systems Ltd v Tunnard, note 108 above, at 445 per Moses LJ; Laughton v BAPP Industrial Supplies [1986] ICR 634 at 638–9. See 7.88–7.93. 113. FSS Travel and Leisure Systems Ltd v Johnson [1999] FSR 505 at 512; Attwood v Lamont, note 27 above, at 589–90. 114. See 16.30–16.35. 115. See 16.36. 116. See 16.38. 117. Rentokil Pty Ltd v Lee, note 36 above, at 304; Littlewoods Organisation Ltd v Harris [1977] 1 WLR 1472 at 1479; [1978] 1 All ER 1026 at 1033; Cactus Imaging Pty Ltd v Peters, note 38 above, at [13] and [34]; Woolworths Limited v Olson, note 71 above, at [38] and [67]. 118. See 16.36. 119. Seven Network (Operations) Limited v Warburton (No 2), note 30 above, at [66]–[69]; Dawnay Day & Co Ltd v D’Alphen [1998] ICR 1068; see also the ‘opportunistic disintermediation’ interest discussed in Informax International Pty Ltd v Clarius Group Ltd, note 21 above, at [45]– [57]. 120. See 16.7. 121. Howard F Hudson Pty Ltd v Ronayne, note 2 above, at 456. 122. Tullett Prebon (Australia) Pty Ltd v Purcell, note 47 above, at [37]–[45]; Peters (WA) Ltd v Petersville Ltd, note 5 above, at [34]–[39]; Capital Aircraft Services Pty Ltd v Brolin (2006) 154

IR 352; [2006] ACTSC 80 at [12]; A Schroeder Music Publishing Co Ltd v Macaulay, note 52 above, WLR at 1314; All ER at 622; Watson v Prager, note 35 above, at 507–9; J Heydon, note 1 above, pp 68–76; cf Esso Petroleum Co Ltd v Harper’s Garage (Stourport) Ltd, note 4 above, AC at 294 and 307; All ER at 705 and 713; Warner Bros Pictures Inc v Nelson, note 80 above, KB at 214; All ER at 163. 123. See Electrolux Limited v Hudson [1977] FSR 312 at 323–4. 124. See 7.85–7.86. 125. Heine Bros (Aust) Pty Ltd v Forrest [1963] VR 383 at 384–5; Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd, note 6 above, CLR at 328; ALR at 417–8. 126. A Schroeder Music Publishing Co Ltd v Macaulay, note 52 above, WLR at 1314; All ER at 622. 127. See, for example, Buckenara v Hawthorn Football Club Ltd [1988] VR 39 at 44–5; Heine Bros (Australia) Pty Ltd v Forrest, note 125 above, at 385–6; Curro v Beyond Productions Pty Ltd, note 35 above, at 344–6; William Robinson and Co Ltd v Heuer [1898] 2 Ch 451 at 455. On the relationship between garden leave clauses and terms in restraint of trade, see William Hill Organisation Ltd v Tucker [1999] ICR 291 at 301; Credit Suisse Management Ltd v Armstrong [1996] ICR 882 at 892; Provident Financial Group v Hayward, note 80 above, All ER at 303; ICR at 167; Metcash Ltd v Jardim, note 50 above, at [43]; BearingPoint Australia Pty Ltd v Hillard [2008] VSC 115 at [156]–[157]; A Brooks, note 1 above, at 373–8. 128. Metcash Ltd v Jardim, note 50 above, at [44] and [47]. 129. See generally Watson v Prager, note 35 above, at 507–9; Capital Aircraft Services Pty Ltd v Brolin, note 122 above, at [27]; Canberra Bushrangers Baseball Team Pty Ltd v Byrne (SC(ACT), Higgins J, BC9405503, 21 December 1994, unreported). 130. For example, Clifford Davis Ltd v W E A Records (Fleetwood Mac case) [1975] 1 All ER 237 at 240; A Schroeder Music Publishing Co Ltd v Macaulay, note 52 above, WLR at 1314; All ER at 622. 131. Victoria University of Technology v Wilson (2004) 60 IPR 392; [2004] VSC 33 at [144]–[145]; see also Heine Bros (Aust) Pty Ltd v Forrest, note 125 above, at 384–5. 132. Lindner v Murdock’s Garage, note 25 above, at 633, 650, 653–4; Cactus Imaging Pty Ltd v Peters, note 38 above, at [25]; Metcash Ltd v Jardim, note 50 above, at [50]. 133. Rentokil Pty Ltd v Lee, note 36 above, at 304; Metcash Ltd v Jardim, note 50 above, at [54] (restraint on the investment by the employee in competitors). 134. A Buckle & Son Pty Ltd v McAllister, note 49 above, at 433; see also Office Angels Ltd v RainerThomas [1991] IRLR 214 at 218–9 and A Brooks, note 1 above, at 355–6. 135. Cactus Imaging Pty Ltd v Peters, note 38 above, at [25]; Burwood Night Patrol Pty Ltd v Lagarde (1993) 51 IR 118 at 120. 136. J Riley, note 1 above, at 13–18. See also C Dent et al, ‘Legal Incentives to Promote Innovation at Work: A Critical Analysis’ (2010) 21 ELRR 27. 137. Rentokil Pty Ltd v Lee, note 36 above, at 305, see also at 318–26; TV Shopping Network Ltd v Scutt, note 90 above, at 457; Marion White Ltd v Frances [1972] 3 All ER 857 at 863–4; Attwood v Lamont, note 27 above. 138. Cactus Imaging Pty Ltd v Peters, note 38 above, at [32]–[33]; Konski v Peet, note 64 above, at 538–9; Home Counties Dairies Ltd v Skilton, note 36 above; IF Asia Pacific Pty Ltd v Galbally, note 29 above, at [97]; Burwood Night Patrol Pty Ltd v Lagarde, note 135 above, at 120.

139. Geraghty v Minter, note 36 above; Leetham & Sons Ltd v Johnstone White, note 29 above, at 327; Philip M Levy Ltd v Christopoulos [1973] VR 673 at 678–80; J Heydon, note 1 above, pp 147–52. 140. Routh v Jones, note 66 above, at 761. 141. Ross v IceTV, note 94 above, at [119]–[121]. 142. Seven Network (Operations) Limited v Warburton (No 2), note 30 above, at [18]–[25] and [94]; Sir WC Leng & Co Ltd v Andrews, note 69 above, at 771. 143. Cactus Imaging Pty Ltd v Peters, note 38 above, at [41]; Metcash Ltd v Jardim, note 50 above, at [55]; Miles v Genesys Wealth Advisers Ltd, note 46 above, at [42]. 144. BearingPoint Australia Pty Ltd v Hillard, note 127 above, at [156]–[157]; William Hill Organisation Ltd v Tucker, note 127 above, at 301; Credit Suisse Management Ltd v Armstrong, note 127 above, at 892; Provident Financial Group v Hayward, note 80 above, All ER at 302; ICR at 166; Metcash Ltd v Jardim, note 50 above, at [43]. 145. NE Perry Pty Ltd v Judge (2002) 84 SASR 86; [2002] SASC 312 at [28]–[32], [63] and [100]– [104]; Stacks/Taree Pty Ltd v Marshall (No 2) [2010] NSWSC 77 at [66]–[72]; IRAF Pty Ltd v Graham [1982] 1 NSWLR 417 at 429. 146. Cactus Imaging Pty Ltd v Peters, note 38 above, at [36] and [38]; Metcash Ltd v Jardim, note 50 above, at [55]; Koops Martin Financial Services Pty Ltd v Reeves [2006] NSWSC 449 at [88]; BearingPoint Australia Pty Ltd v Hillard, note 127 above, at [156]–[157]. 147. Hanna v OAMPS Insurance Brokers Ltd, note 96 above, at [43] per Mason P, Hodgson and Handley JJA agreeing; Miles v Genesys Wealth Advisers Ltd, note 46 above, at [36]–[38]. 148. Stenhouse Australia Ltd v Phillips, note 70 above, NSWLR at 699; AC at 402; Hanna v OAMPS Insurance Brokers Ltd, note 96 above, at [43]; Rentokil Pty Ltd v Lee, note 36 above, at 328–9 (applied to a restraint against competition). 149. A Buckle & Son Pty Ltd v McAllister, note 49 above, at 433; Stenhouse Australia Ltd v Phillips, note 70 above, NSWLR at 699; AC at 402. 150. Cactus Imaging Pty Ltd v Peters, note 38 above, at [26]–[30]. 151. A Buckle & Son Pty Ltd v McAllister, note 49 above, at 433. 152. Cactus Imaging Pty Ltd v Peters, note 38 above, at [39]. 153. Hanna v OAMPS Insurance Brokers Ltd, note 96 above, at [46]–[49]; Seven Network (Operations) Limited v Warburton (No 2), note 30 above, at [79] (restraint reasonable when it was for the period of the business cycle); Cactus Imaging Pty Ltd v Peters, note 38 above, at [40]; Brightman v Lamson Paragon Ltd, note 27 above, at 336–7. 154. Miles v Genesys Wealth Advisers Ltd, note 46 above, at [40]; Sir WC Leng & Co Ltd v Andrews, note 69 above, at 770; Mason v Provident Clothing and Supply Co Ltd, note 39 above, at 733. 155. Cactus Imaging Pty Ltd v Peters, note 38 above, at [36]; Metcash Ltd v Jardim, note 50 above, at [55]. 156. Lindner v Murdock’s Garage, note 25 above, at 653 per Kitto J; Herbert Morris Ltd v Saxelby, note 25 above, at 709. 157. Informax International Pty Ltd v Clarius Group Ltd, note 21 above, at [28]; Metcash Ltd v Jardim, note 50 above, at [52]; Miles v Genesys Wealth Advisers Ltd, note 46 above, at [38]; Ross v IceTV, note 94 above, at [122]; cf the junior position of a reporter in Sir WC Leng & Co

Ltd v Andrews, note 69 above, at 768. 158. Scorer v Seymour-Johns [1966] 3 All ER 347 at 351–2. 159. Metcash Ltd v Jardim, note 50 above, at [52]; Miles v Genesys Wealth Advisers Ltd, note 46 above, at [38]. 160. Arthur Murray Dance Studios of Cleveland Inc v Witter 105 NE (2d) 685 at 706 (Ohio CP, 1951), quoted in J Heydon, note 1 above, p 122; Informax International Pty Ltd v Clarius Group Ltd, note 21 above, at [29]; Herbert Morris Ltd v Saxelby, note 25 above, at 702 and 709; Lindner v Murdock’s Garage, note 25 above, at 635–6 and 653–4; Philip M Levy Ltd v Christopoulos, note 139 above. 161. Koops Martin Financial Services Pty Ltd v Reeves, note 146 above, at [34]. 162. Hanna v OAMPS Insurance Brokers Ltd, note 96 above, at [37]; Miles v Genesys Wealth Advisers Ltd, note 46 above, at [38]. 163. Rentokil Pty Ltd v Lee, note 36 above, at 327. 164. Commercial Plastics Ltd v Vincent [1964] 3 All ER 546 at 550 and 554; Dowden and Pook Ltd v Pook [1904] 1 KB 45 at 55; Butt v Long, note 25 above, at 485–8 (which concerned an agreement between partners on dissolution); Lansing Linde Ltd v Kerr, note 61 above, at 426–7 and 433; IF Asia Pacific Pty Ltd v Galbally, note 29 above, at [97]. 165. Butt v Long, note 25 above, at 485–8. 166. Spencer v Marchington, note 33 above, at 396. 167. Mason v Provident Clothing and Supply Co Ltd, note 39 above, at 736; Gledhow Autoparts v Delaney, note 59 above, at 295–6; Scorer v Seymour-Johns, note 158 above, at 349 and 352; Philip M Levy Ltd v Christopoulos, note 139 above, at 678–80. 168. Drake Personnel Ltd v Beddison, note 108 above, at 24; Office Angels Ltd v Rainer-Thomas, note 134 above. 169. Cactus Imaging Pty Ltd v Peters, note 38 above, at [43]–[55]; Tullett Prebon (Australia) Pty Ltd v Simon Purcell, note 47 above, at [51]; TSC Europe (UK) Ltd v Massey [1999] IRLR 22; Alliance Paper Group Plc v Prestwich [1996] IRLR 25 at 28; see also P Sales, ‘Covenants Restricting Recruitment of Employees and the Doctrine of Restraint of Trade’ (1988) 104 LQR 600; cf A Buckle & Son Pty Ltd v McAllister, note 49 above, at 432–3; Hanover Insurance Brokers Ltd v Schapiro [1994] IRLR 82 at [15]. 170. Cactus Imaging Pty Ltd v Peters, note 38 above, at [55]–[56]. 171. Cactus Imaging Pty Ltd v Peters, note 38 above, at [56]–[57]. 172. TSC Europe (UK) Ltd v Massey, note 169 above. 173. Cactus Imaging Pty Ltd v Peters, note 38 above, at [56]–[57]; Kearney v Crepaldi [2006] NSWSC 23 at [34] and [58]. 174. Dawnay, Day & Co Ltd v D’Alphen, note 119 above, at [47]; J Riley, ‘No “Poaching”? Why Not? A Reflection on the Legitimacy of Post-employment Restrictive Covenants’ (2005) 19 Comm LQ 3 and J Riley, note 1 above, at 18–21; A Brooks, note 1 above, at 360–4. 175. Herbert Morris Ltd v Saxelby, note 25 above, at 702 and 709; Sir WC Leng & Co Ltd v Andrews, note 69 above, at 773–4; Triplex Safety Glass Ltd v Scorah, note 33 above, at 215. 176. Intelsec Systems Ltd v Grech-Cini [1999] 4 All ER 11 at 25–6; Drake Personnel Ltd v Beddison, note 108 above, at 19–20. Such terms may also be unenforceable for other reasons, such as being

contrary to public policy: AG Australia Holdings Ltd v Burton (2002) 58 NSWLR 464; A v Hayden (No 2) (1984) 156 CLR 532; 56 ALR 82. 177. Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317 at 333–5 and 339–41; Cactus Imaging Pty Ltd v Peters, note 38 above, at [12]; AIM Maintenance Ltd v Brunt (2004) 28 WAR 357; 60 IPR 572 at [73]–[74]; Balston Ltd v Headline Filters Ltd (No 1) [1987] FSR 330 at 347; Del Casale v Artedomus (Aust) Pty Ltd, note 109 above, at [139]–[141]; J Heydon, note 1 above, pp 115–117; R Dean, The Law of Trade Secrets and Personal Secrets, 2nd ed, Lawbook Co, Sydney, 2002, pp 400–1; the contrary view was expressed in Faccenda Chicken Ltd v Fowler, note 108 above, Ch at 137; All ER at 626. 178. Del Casale v Artedomus (Aust) Pty Ltd, note 109 above, at [132]; A Stewart, note 1 above, at 192. 179. Wright v Gasweld Pty Ltd, note 177 above; Rentokil Pty Ltd v Lee, note 36 above; Miles v Genesys Wealth Advisers Ltd, note 46 above; cf A Buckle & Son Pty Ltd v McAllister, note 49 above, at 433. 180. Metcash Ltd v Jardim, note 50 above, at [53]. 181. Cactus Imaging Pty Ltd v Peters, note 38 above, at [15]–[22], [34]. 182. Herbert Morris Ltd v Saxelby, note 25 above, at 703. 183. Drake Personnel Ltd v Beddison, note 108 above; IF Asia Pacific Pty Ltd v Galbally, note 29 above, at [227]; Sir WC Leng & Co Ltd v Andrews, note 69 above, at 773–4. 184. Herbert Morris Ltd v Saxelby, note 25 above, at 714 per Lord Shaw, see also at 703–4 per Lord Atkinson, 711 per Lord Parker; Mason v Provident Clothing and Supply Co Ltd, note 39 above, at 740–1; Triplex Safety Glass Ltd v Scorah, note 33 above, at 215; Lindner v Murdock’s Garage, note 25 above, at 640–1; GlaxoSmithKline Australia Pty Ltd v Ritchie (2008) 77 IPR 306; [2008] VSC 164 at [46]–[54]. 185. Philip M Levy Ltd v Christopoulos, note 139 above, at 677–8; Lido-Savoy Pty Ltd v Paredes [1972] VR 297 at 303; Dewes v Fitch [1920] 2 Ch 159 at 166. 186. Cactus Imaging Pty Ltd v Peters, note 38 above, at [13]. 187. Pioneer Concrete Services Ltd v Galli, note 64 above, at 710–11; Littlewoods Organization Limited v Harris, note 117 above, at 1479; Cactus Imaging Pty Ltd v Peters, note 38 above, at [14]; on the need for specificity in injunctive relief, see 15.66. 188. Miles v Genesys Wealth Advisers Ltd, note 46 above, at [64]; Del Casale v Artedomus (Aust) Pty Ltd, note 109 above, at [132]. 189. Miles v Genesys Wealth Advisers Ltd, note 46 above, at [64]; Metcash Ltd v Jardim, note 50 above, at [50]. 190. Littlewoods Organisation Ltd v Harris, note 117 above, at 1479; [1978] 1 All ER 1026 at 1033; Putsman v Taylor, note 58 above, at 642–3; Cactus Imaging Pty Ltd v Peters, note 38 above, at [13]; Woolworths Limited v Olson, note 71 above, at [38] and [67]; A Stewart, note 1 above, at 190–1. 191. Maggbury Pty Ltd v Hafele Australia Pty Ltd, note 4 above, at [45]–[48]. 192. Some of the many meanings of the term ‘trade secret’ are extensively discussed in Del Casale v Artedomus (Aust) Pty Ltd, note 109 above, at [108]–[137]; see also GlaxoSmithKline Australia Pty Ltd v Ritchie, note 184 above, at [50]. 193. See 16.38.

194. Faccenda Chicken Ltd v Fowler, note 108 above, at 136; [1986] 1 All ER 617 at 625–6; Riteway Express Pty Ltd v Clayton (1987) 10 NSWLR 238 at 240; United Sterling Corporation Ltd v Felton [1973] FSR 409 at 414–15; Brooks v Olyslager Oms (UK) Ltd [1998] IRLR 590. 195. Riteway Express Pty Ltd v Clayton, note 194 above, at 240; Stenhouse Australia Ltd v Phillips, note 70 above, AC at 400; NSWLR at 697; GD Searle & Co Ltd v Celltech Ltd [1982] FSR 92 at 99; Herbert Morris Ltd v Saxelby, note 25 above, at 701; GlaxoSmithKline Australia Pty Ltd v Ritchie, note 184 above, at [46]–[48] and R Dean, The Law of Trade Secrets and Personal Secrets, note 177 above, pp 172–3. 196. Stenhouse Australia Ltd v Phillips, note 70 above, AC at 400; NSWLR at 697; F Gurry, Breach of Confidence, Clarendon Press, Oxford, 1984, pp 178–9. 197. Printers and Finishers Ltd v Holloway, note 110 above, WLR at 5; All ER 731 at 735; see also 16.44. 198. Balston Ltd v Headline Filters Ltd (No 1), note 177 above, at 348 and 16.38. 199. Faccenda Chicken Ltd v Fowler, note 108 above, Ch at 135; All ER at 625; United Sterling Corporation Ltd v Felton, note 194 above, at 415; Cranleigh Precision Engineering Ltd v Bryant [1964] 3 All ER 289; [1965] 1 WLR 1293 at 1319; Hanneybel v Uniflex (Australia) Pty Ltd [2002] WASCA 349 at [63]. 200. United Sterling Corporation Ltd v Felton, note 194 above, at 415; see also Del Casale v Artedomus (Aust) Pty Ltd, note 109 above, at [117]–[119] per Campbell JA. 201. Del Casale v Artedomus (Aust) Pty Ltd, note 109 above, at [32]–[35] per Hodgson JA and [76]– [100] per Campbell JA. 202. See 10.73 and 10.76. 203. Nottingham University v Fishel [2000] ICR 1462 at 1489. The know-how exception applies to fiduciaries: Rishmont Pty Ltd v Tweed City Medical Centre, note 108 above, at [17]; Island Export Finance Ltd v Umunna [1986] BCLC 460 at 481; see also Timber Engineering Co Pty Ltd v Anderson [1980] 2 NSWLR 488 at 500–5 (injunction concerning use of non-confidential information refused on discretionary grounds). 204. As to the loss of secrecy, see 7.135. As to when information is in the public domain, see 7.126 and 7.127. 205. P Finn, Fiduciary Obligations, Law Book Company, Sydney, 1977, p 149, referred to approvingly in Metrans Pty Ltd v Courtney-Smith, note 109 above, at 380; CMS Dolphin Ltd v Simonet [2001] 2 BCC 600 at [91]; Island Export Finance Ltd v Umunna, note 203 above, at 482. On the distinction between trade secrets and know-how generally, see Faccenda Chicken Ltd v Fowler, note 108 above; Stenhouse Australia Ltd v Phillips, note 70 above, AC at 400; NSWLR at 697; GlaxoSmithKline Australia Pty Ltd v Ritchie, note 184 above, at [46]–[50]; Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd [1967] VR 37 at 47–51; Forkserve Pty Ltd v Pacchiarotta (2000) 50 IPR 74; [2000] NSWSC 979 at [19]–[21]; GD Searle & Co Ltd v Celltech Ltd, note 195 above, at 99–102 and 107–8; Pioneer Concrete Services Ltd v Galli, note 64 above, at 710. On whether a distinction should be drawn between the use and disclosure of trade secrets, see Del Casale v Artedomus (Aust) Pty Ltd, note 109 above, at [43]–[49]. 206. Pioneer Concrete Services Ltd v Galli, note 64 above, at 710–11. 207. Printers and Finishers Ltd v Holloway, note 110 above, WLR at 5; All ER at 735; United Sterling Corporation Ltd v Felton, note 194 above, at 421–2; Herbert Morris Ltd v Saxelby, note 25 above, at 703 and 712.

208. Printers and Finishers Ltd v Holloway, note 110 above, WLR at 5; All ER at 735; Johnson & Bloy (Holdings) Ltd v Wolstenholme Rink plc and Fallon [1989] 1 FSR 135 at 140 and 142–3. 209. See F Gurry, Breach of Confidence, note 196 above, pp 67–8. 210. Ormonoid Roofing and Asphalts Ltd v Bitumenoids Ltd (1930) 31 SR (NSW) 347 at 359–60; Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd, note 205 above, at 43; see also 7.58 concerning the purpose for which confidential information is provided. 211. PSM International plc v Whitehouse [1992] IRLR 279 at 282; United Sterling Corporation Ltd v Felton, note 194 above, at 421. 212. Printers and Finishers Ltd v Holloway, note 110 above, WLR at 6; All ER at 736; United Sterling Corporation Ltd v Felton, note 194 above, at 421–2; GD Searle & Co Ltd v Celltech Ltd, note 195 above, at 99; Thomas Marshall (Exports) Ltd v Guinle [1979] Ch 227 at 246; [1978] 3 All ER 193 at 208; Deta Nominees Pty Ltd v Viscount Plastic Products Pty Ltd [1979] VR 167 at 193; FSS Travel and Leisure Systems Ltd v Johnson, note 113 above, at 512; GlaxoSmithKline Australia Pty Ltd v Ritchie, note 184 above, at [50]. 213. Faccenda Chicken Ltd v Fowler [1985] 1 All ER 724 at 732; [1984] ICR 589 at 600 per Goulding J, quoted by Neill LJ in Faccenda Chicken Ltd v Fowler, note 108 above, Ch at 134; All ER at 624; Triangle Corp Pty Ltd v Carnsew (1994) 29 IPR 69 at 70; cf the approach in Del Casale v Artedomus (Aust) Pty Ltd, note 109 above, at [145]–[149]. 214. Lancashire Fires Ltd v SA Lyons & Co Ltd [1996] FSR 629 at 668. The decision of dubious merit in Co-ordinated Industries Pty Ltd v Elliott (1998) 43 NSWLR 282 at 287–9 suggests that specific knowledge of a particular job may be a trade secret, a result that is out of kilter with many other cases. 215. See 7.126. 216. See 16.49 and Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd, note 205 above, at 49. 217. Balston Ltd v Headline Filters Ltd (No 1), note 177 above, at 348. 218. E Worsley & Co Ltd v Cooper [1939] 1 All ER 290 at 307; Faccenda Chicken Ltd v Fowler, note 108 above, Ch at 137; All ER at 626; GD Searle & Co Ltd v Celltech Ltd, note 195 above, at 102; but see Drake Personnel Ltd v Beddison, note 108 above, at 21. 219. Faccenda Chicken Ltd v Fowler, note 108 above, Ch at 136–8; All ER at 625–7; Brooks v Olyslager Oms (UK) Ltd, note 194 above; Pioneer Concrete Services Ltd v Galli, note 64 above, at 710–12; Printers and Finishers Ltd v Holloway, note 110 above, WLR at 5; All ER at 735; Balston Ltd v Headline Filters Ltd (No 1), note 177 above, at 350–2; Del Casale v Artedomus (Aust) Pty Ltd, note 109 above, at [40]–[50]. Note the approach taken to the formulation of the injunction, driven more by justice than principle, that consequentially limits the use of know-how in Johnson & Bloy (Holdings) Ltd v Wolstenholme Rink plc and Fallon, note 208 above, at 141–2 and Roger Bullivant Ltd v Ellis [1987] ICR 464 at 474–5. 220. Balston Ltd v Headline Filters Ltd (No 1), note 177 above, at 350–2; GD Searle & Co Ltd v Celltech Ltd, note 195 above, at 103–4. 221. GD Searle & Co Ltd v Celltech Ltd, note 195 above, at 104. 222. R Toulson and C Phipps, Confidentiality, Sweet & Maxwell, London, 1996, pp 173–4, referring to Balston Ltd v Headline Filters Ltd, note 177 above, at 351 and Ixora Trading Ltd v Jones [1990] 1 FSR 251 at 261. 223. See 16.2.

224. GD Searle & Co Ltd v Celltech Ltd, note 195 above, at 99; see also at 107–8 per Brightman LJ. 225. Balston Ltd v Headline Filters Ltd (No 1), note 177 above, at 351–2, approved in Liberty Financial Pty Ltd v Scott (No 4) (2005) 11 VR 629 at 640; Creative Brands Pty Ltd v Franklin [2001] VSC 338 at [18]. 226. FSS Travel and Leisure Systems Ltd v Johnson, note 113 above, at 512; Printers and Finishers Ltd v Holloway, note 110 above, WLR at 6; All ER at 736. 227. There is an alternative approach that an injunction will issue to prevent the use of customer lists taken from an employer, whether they contain confidential information or not: see, for example, Griffiths & Beerens Pty Ltd v Duggan, note 109 above, at [164]; Peninsular Real Estate Ltd v Harris [1992] 2 NZLR 216 at 220; Forkserve Pty Ltd v Jack (2001) 19 ACLC 299; [2000] NSWSC 1064 at [78]. 228. There is a good deal of dicta that suggests that an employee who has embarked on the task of deliberately memorising such a list is in the same position as one who copies it: Coral Index Ltd v Regent Index Ltd [1970] FSR 13 at 15; Baker v Gibbons [1972] 2 All ER 759 at 765; Westminster Chemical NZ Ltd v McKinley [1973] 1 NZLR 659 at 665; Diamond Stylus Co Ltd v Bauden Precision Diamonds Ltd, note 109 above, at 180–1. 229. Merryweather v Moore [1892] 2 Ch 518 at 524; Robb v Green, note 109 above; Measures Bros Ltd v Measures, note 78 above, at 343 (aff’d [1910] 2 Ch 248); Faccenda Chicken Ltd v Fowler, note 108 above, Ch at 136; All ER at 625–6; Schindler Lifts Australia Pty Ltd v Debelak, note 95 above, at 314–17; Griffiths & Beerens Pty Ltd v Duggan, note 109 above, at [164]; Roger Bullivant Ltd v Ellis, note 219 above, at 474; Slevin v Associated Insurance Brokers of Australia (Qld) Pty Ltd [1996] QCA 18. 230. NP Generations Pty Ltd v Feneley (2001) 80 SASR 151; [2001] SASC 185 at [18]–[20]; Schindler Lifts Australia Pty Ltd v Debelak, note 95 above, at 317. 231. Metrans Pty Ltd v Courtney-Smith, note 109 above, at 380; Baker v Gibbons, note 228 above, at 765; Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd, note 205 above, at 51; Printers and Finishers Ltd v Holloway, note 110 above, WLR at 6; All ER at 736; Print Investments Pty Ltd v Art-Vue Printing Ltd, note 109 above, at 388–90; Merryweather v Moore, note 229 above, at 524; Measures Bros Ltd v Measures, note 78 above (aff’d [1910] 2 Ch 248); IF Asia Pacific Pty Ltd v Galbally, note 29 above, at [227]; NP Generations Pty Ltd v Feneley, note 230 above, at [14]–[20]; Forkserve Pty Ltd v Pacchiarotta, note 205 above, at [19]–[21]. Note, however, International Scientific Communications Inc v Pattison [1979] FSR 429 at 434 (part-time employee using list with consent to run own business). 232. Peninsular Real Estate Ltd v Harris, note 227 above, at 220, quoted in Financial Integrity Group Pty Ltd v Farmer [2009] ACTSC 143 at [78]. 233. Southern Cross Financial Group (Newcastle) Pty Ltd v Rodrigues (2005) 66 IPR 166; [2005] NSWSC 621 at [62]–[63]; Forkserve Pty Ltd v Pacchiarotta, note 205 above, at [19]–[21]; Metrans Pty Ltd v Courtney-Smith, note 109 above, at 383–4; IF Asia Pacific Pty Ltd v Galbally, note 29 above, at [215]–[228]. 234. Metrans Pty Ltd v Courtney-Smith, note 109 above; Print Investments Pty Ltd v Art-Vue Printing Ltd, note 109 above; Robb v Green, note 109 above; Measures Bros Ltd v Measures, note 78 above, at 343 (aff’d [1910] 2 Ch 248). 235. Baker v Gibbons, note 228 above, at 765–7; Louis v Smellie [1895] All ER 875 at 877. 236. Merryweather v Moore, note 229 above (drawings created just prior to leaving employment); Amber Size and Chemical Co Ltd v Menzel [1913] 2 Ch 239 (secret formula); Ormonoid Roofing

and Asphalts Ltd v Bitumenoids Ltd, note 210 above (notes of measurements of machine). 237. For example, Louis v Smellie, note 235 above. 238. For example, Baker v Gibbons, note 228 above, at 765; AC Gibbons Pty Ltd v Cooper (1980) 23 SASR 269 (no breach by former employee who scoured the phone book to find the names of hundreds of customers of the former employer). 239. Louis v Smellie, note 235 above, at 877; Baker v Gibbons, note 228 above, at 765–6. The injunction often unnecessarily goes further: Johnson & Bloy (Holdings) Ltd v Wolstenholme Rink plc and Fallon, note 208 above, at 141–2 and Roger Bullivant Ltd v Ellis, note 219 above, at 475. 240. Spring v Guardian Assurance plc [1995] 2 AC 296 at 326; [1994] 3 All ER 129 (Spring); Cox v Sun Alliance Life Limited [2001] IRLR 448; [2001] EWCA Civ 649 at [102]. 241. Spring, note 240 above, AC at 345 and J Verkerke, ‘Legal Regulation of Employment Reference Practices’ (1998) 65 U Chi L Rev 115. 242. See Driver Recruitment Pty Ltd v Wedeco AVP Pty Ltd [2008] NSWCA 290. 243. Wennhak v Morgan (1888) 20 QBD 635 at 638; Hurrell v Ellis (1845) 2 CB 295; 135 ER 958 and Rogers v Macnamara (1853) 14 CB 27; 139 ER 12; cf Taylor v Rowan (1835) 7 Car & P 70 at 74–75; 173 ER 31 at 33–4. 244. Wennhak v Morgan, note 243 above, at 638. 245. Carrol v Bird (1800) 3 Esp 201; 170 ER 588; Moult v Halliday [1898] 1 QB 125 at 129; Pullman v Hill & Co [1891] 1 QB 524 at 528; Gallear v Watson [1979] IRLR 306 at [18]; Byrnell v British Telecommunications Plc [2009] EWHC 727 at [29]. Handley v Moffatt (1873) Ir R 7 CL 104 concerns an example of a statutorily imposed duty to provide a reference. 246. Spring, note 240 above, AC at 353–4 and at 339 per Lord Slynn. 247. Spring, note 240 above, AC at 353–4. 248. The description of the unusual regulatory environment is described at 308 of the judgment in Spring, note 240 above. 249. Spring, note 240 above, AC at 339. 250. See Spring, note 240 above, AC at 315 and the judgment of the Court of Appeal in Spring v Guardian Assurance plc [1993] ICR 412 at 438–9; 2 All ER 273 at 296. 251. See Gambotto v John Fairfax Publication Pty Ltd (2001) 104 IR 303 at 311 and Bowker v Prophecy Technologies Pty Limited (IRC of NSW, Marks J, 26 May 1999, unreported). 252. See 5.48–5.52. 253. See, for example, Chief Constable of West Yorkshire Police v Khan [2000] ICR 1169 and Coote v Granada Hospitality Limited [1999] IRLR 452. See also in the context of unfair dismissal proceedings, Castledine v Rothwell Engineering [1973] IRLR 99; Haspell v Rostrom & Johnson Limited [1976] IRLR 50 and N Wallace–Bruce, ‘Employers Beware! The Perils of Providing an Employment Reference’ [1997] JBL 456 at 460–6. 254. TSB Bank plc v Harris [2000] IRLR 157 at [75]–[79]. 255. Spring, note 240 above, noted in B Hocking and G Orr, ‘Employer’s Liability for a Negative Reference: Spring v Guardian Assurance’ (1995) 8 AJLL 85; T Thawley, ‘Duty to be Careful when Giving Employees References’ (1996) 70 ALJ 403; T Allen, ‘Liability for References: The House of Lords and Spring v Guardian Assurance’ (1995) 58 MLR 55 and C Wynn-Evans, ‘References and Negligent Misstatement’ (1994) 23 ILJ 346. Note also Lawton v BOC

Transhield Limited [1987] ICR 7 which raised quite similar issues to Spring and the comment upon that decision in A Demopoulos, ‘Misleading References and Qualified Privilege’ (1988) 104 LQR 191. 256. Spring, note 240 above, AC at 340 and 346. For ease of reference, Mr Spring is referred to as an employee and the respondent as his employer. 257. Spring v Guardian Assurance plc, note 250 above, at 296; ICR at 438–9 in the Court of Appeal: three of the Law Lords touched on the breach of contract claim in the decision of the House of Lords in Spring, note 240 above, AC at 315, 339 and 353–4. 258. Spring, note 240 above, AC at 325, 327 and 339. 259. Wade v State of Victoria [1999] 1 VR 121 (discussed in 16.57); Reeves v State of New South Wales [2010] NSWSC 611 at [374]–[380] (duty of employer to provide the Royal Commission with accurate information); Stewart v Ronalds (2009) 76 NSWLR 99; 259 ALR 86; [2009] NSWCA 277 at [100]–[102] and Rowan v Cornwall (No 5) (2002) 82 SASR 152; [2002] SASC 160 at [628]–[646]. 260. See Sullivan v Moody (2001) 207 CLR 562; 183 ALR 404 at [42] and [54]–[55] and State of New South Wales v Paige (2002) 60 NSWLR 371; 115 IR 283 at [76]–[177]. 261. Spring, note 242 above, AC at 322–4 per Lord Goff, 329–5 per Lord Slynn and 346–51 per Lord Woolf; Wade v State of Victoria, note 259 above, at 138–43. 262. In the High Court, see Sullivan v Moody, note 260 above, at 576–81; Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1; 167 ALR 1. In the House of Lords, see X (Minors) v Bedfordshire County Council [1995] 2 AC 633; 3 All ER 353 at 379 and Johnson v Unisys Limited [2003] 1 AC 518; [2001] 2 All ER 801. 263. Caparo Industries Plc v Dickman [1990] 2 AC 605; 1 All ER 568. 264. Sullivan v Moody, note 260 above, at [49]. 265. Spring, note 240 above, AC at 332. 266. Hedley Byrne & Co Limited v Heller and Partners [1964] AC 465 at 502–3, 528–30; Spring, note 240 above, AC at 335. See also Bartholomew v London Borough of Hackney [1999] IRLR 246 at [2]. 267. Spring, note 240 above, AC at 345. 268. Cox v Sun Alliance Life Limited, note 240 above, at [104]. Nor is the requirement to exercise reasonable care a guarantee of accuracy of the reference: Spring, note 240 above, AC at 327 and 336. 269. Kidd v AXA Equity and Law Life Assurance Society plc [2000] IRLR 301 at [15]–[17]; Cox v Sun Alliance Life Limited, note 240 above, at [104]; Bartholomew v London Borough of Hackney, note 266 above, at [22]. 270. Bartholomew v London Borough of Hackney, note 266 above, at [18]; TSB Bank plc v Harris, note 254 above, at [46]. 271. Spring, note 240 above, AC at 327; Bown v LAS Direct Limited [2001] EWCA Civ 1798. 272. Hedley Byrne & Co Limited v Heller and Partners, note 266 above; Spring, note 240 above. 273. Legal & General Assurance Limited v Kirk [2002] IRLR 124 at [34]–[38]. 274. Wade v State of Victoria, note 259 above, at 143. 275. See HWC v The Corporation of the Synod of the Diocese of Brisbane (2008) 220 FLR 92; [2008]

QSC 212; VMT v The Corporation of the Synod of the Diocese of Brisbane [2007] QSC 219 and Randi W v Muroc Joint Unified School District 14 Cal 1066, 929 P2d 582 (Cal 1997) referred to in J Verkerke, note 241 above, at 128; these cases concerned actions against former employers who gave references to education industry employees dismissed for sexual misconduct. 276. Cox v Sun Alliance Life Limited, note 240 above, at [83]. 277. Cox v Sun Alliance Life Limited, note 240 above, at [100]–[102]; see also Wade v State of Victoria, note 259 above, at 139. 278. Cox v Sun Alliance Life Limited, note 240 above, at [105] per Mummery LJ.

Index References are to paragraphs

A Abandonment of contract …. 11.80 of rights …. 6.5, 10.79, 15.63 Abatement Master and Servant Acts, under …. 1.35 of wages …. 9.50 Abuse see Acts incompatible with employment Acceptance see Offer and acceptance Accord and satisfaction award obligations …. 5.85 termination by …. 6.50 Account commission advances and …. 7.55 duty of employee see Duty to account remedy of …. 15.133 Account of profits breach of contract, for …. 15.126 breach of fiduciary duty of fidelity, for …. 7.45, 7.99, 15.124 breach of intellectual property rights, for …. 7.109, 15.127, 15.132 defences to …. 15.121 discretionary remedy …. 15.121 equitable remedy …. 14.8, 15.114 gain of employee …. 14.8, 15.121 loss and …. 15.121 measuring the profit deduction of just allowances …. 15.131 connection between the breach and the profit …. 15.129 fiduciary duty, arising from breach of …. 15.130

intellectual property rights, arising from breach of …. 15.132 obtained by breach …. 15.129 nature of …. 15.122 other remedies and …. 15.122 damages, compared with …. 14.13, 15.123 election between …. 15.124 purpose …. 14.8, 15.120 Acquiescence meaning …. 6.5 operation see Election Acts incompatible with employment abuse, crime, sex and drugs …. 7.141 after hours conduct …. 7.138–7.139 connection between the act and employment …. 7.140 duty of fidelity, contrasted…. 7.33 historical development …. 7.137 mutual duty of trust and confidence and …. 7.136 previous misdeeds …. 7.18 scope …. 7.5, 7.140 Adequacy of damages see Injunctions Administrator see Insolvency After hours see Hours of work Agents acceptance by …. 3.23 authorised acts …. 3.82 authority actual …. 3.14, 3.75, 3.76 implied …. 3.75, 3.76 ostensible …. 3.77, 3.78 corporate seal rule and …. 3.86 crown and …. 3.68, 3.78, 3.83 definition …. 3.70 employees as …. 2.43, 3.70 express and implied …. 3.71 formation of agency …. 3.71 labour hire and agency …. 2.44, 2.48, 2.51 notice given by and to …. 11.11

offers by and to …. 3.14 privity and …. 3.64, 5.110 promoters and …. 3.81 unauthorised acts effect of …. 3.82 liability of agent …. 3.83 and ratification …. 3.79, 3.80, 3.81 undisclosed principals …. 3.84, 3.85 unions as …. 3.73, 5.110, 5.111 union delegates as …. 3.73, 3.74 vicarious performance through …. 3.72, 9.53 Aggravated damages see Damages Agreed damages clauses Fair Work Act, modification by …. 14.136 liquidated damages …. 14.131 non-compensatory …. 14.7 penal clauses …. 14.131, 14.133–14.135 purpose of …. 14.131 principles governing …. 14.132 Agreement see Offer and acceptance Agreements to agree see Incomplete agreements Alcohol see Acts incompatible with employment Alteration pursuant to terms see also Variation, Novation cooperation, duty of …. 8.33 demotion …. 6.14, 6.16 duties, of …. 6.9, 6.16 express powers …. 6.6 external source documents, of …. 5.41, 6.7, 6.8 implied limits on powers to alter …. 5.42, 6.7, 6.8, 8.24 location of employment, change in …. 6.18–6.20 managerial prerogative …. 6.2 emergencies and exigencies …. 6.12, 6.20 method of the performance of work …. 6.9, 6.14, 6.16 scope of the employment …. 6.10, 6.11 work performed …. 6.9 overview …. 6.2, 6.3 trust and confidence term …. 8.23, 8.24

unilateral alterations affirmation following …. 6.46–6.48 express powers, pursuant to …. 6.6 implied power to …. 6.6, 6.21 implied limits …. 5.42, 6.7, 6.8 interpretation of express powers …. 6.6 notice, pursuant to …. 6.13 obedience …. 6.10 variation …. 6.21 work performed, to …. 6.9 variation, distinguished from …. 6.4, 6.21 wages, of …. 6.17 Ambiguity see Uncertainty prior negotiations, proof of …. 5.21 written contract, in …. 5.10 Annual leave see Leave Answering questions and disclosing wrongdoing answering questions duty stated …. 7.5, 7.22 fair questioning …. 7.22 honesty …. 7.22, 7.72 scope of employment …. 7.22 self-incrimination, privilege against …. 7.23 deceit and fraud …. 7.19, 7.20 disclosure of misdeeds disclosure of fellow employees’ breaches …. 7.21 disclosure of own breaches …. 7.20 duty of fidelity and …. 7.20, 7.61 duty of prospective employee …. 7.18 fiduciaries and full disclosure …. 7.20, 7.61, 7.69 intention to breach …. 7.20 pre-employment misdeeds …. 7.18 spent convictions …. 7.18 United Kingdom, in …. 7.20, 7.21 trust and confidence term …. 8.25 Apportionment Acts entire obligations and …. 9.32

generally …. 9.32–9.34 salaries and periodical payments …. 9.34 operation of …. 9.33 Apprenticeships compulsion and correction of …. 1.33, 1.34, 1.42 discharge of …. 1.34, 1.43 employment contract, as …. 1.36, 3.43 journeymen and master, step to …. 1.27, 1.34, 1.46 menial servants as …. 1.27 servants, type of as …. 1.27 Assignment confidential information, rights to …. 7.112 consent to …. 6.40, 6.41 definition …. 6.40 employee’s service, of …. 6.42 intention of parties …. 6.42 non-personal rights, of …. 3.64, 6.43 novation, distinguished …. 6.38 personal rights, of …. 3.64, 6.3, 6.40–6.42 privity, exception to the doctrine of …. 3.64, 6.40 obligations, of …. 6.40, 6.41 restraint of trade covenant …. 6.43 secondment, distinguished from …. 6.40 slavery and liberty …. 6.42, 6.44, 6.45 statute, by …. 6.42 variation, distinguished from …. 6.4 vicarious performance …. 9.53 wages, of …. 6.43 Australian Consumer Law loss of a chance under …. 14.63 misleading and deceptive conduct see Misleading and deceptive conduct scope of …. 4.33 unconscionable conduct, prohibition of …. 4.13 Awards access to …. 8.11 content of …. 8.2, 5.81 contracting out …. 5.85, 5.86

contravention of …. 5.84, 8.2 estoppel and …. 5.85 implied by custom, enforceable as term …. 5.95, 5.102, 5.103 implied in law, enforceable as term …. 5.100 implied in fact, enforceable as term …. 5.95, 5.101 incorporated by notice …. 5.99 incorporated by reference …. 5.36, 5.37, 5.39, 5.97 industrial instrument …. 5.81 nature of rights created …. 5.94 notice provisions …. 11.38, 11.51 number and coverage of, 1.21, 1.22, 5.81 satisfaction of obligations payments made for collateral purpose …. 5.89 payments made for extraneous purpose …. 5.88 payments made for specified purpose …. 5.88 payments made for unspecified purpose …. 5.87

B Bailment see Employment contract Bankruptcy see Insolvency Bonuses discretion to grant …. 8.29, 14.52, 14.56, 14.57 least burdensome performance rule …. 14.51 loss of chance …. 14.57 Breach of confidence see Duty of confidence Bribe see Secret benefits Bridging terms see Terms incorporated by reference Business efficacy test see Terms implied in fact Business on own account see Employment contracts

C Cancellation contract, of …. 6.50 Capacity to contract corporations …. 3.67 Crown …. 3.68, 5.93

generally 1.36, 3.65–3.68 intoxicated persons …. 3.65, 3.66 mentally disabled persons …. 3.65, 3.66 minors …. 3.65 statutory corporations …. 3.67 unincorporated associations …. 3.67 Carer’s leave see Leave Career and skills development career and skills development …. 1.18, 6.15, 7.89, 8.40, 8.41, 11.3 right to be provided with work …. 8.40, 8.41 skilled employees …. 8.40, 8.41 Casual employees benefits, entitlement to …. 2.19 consideration …. 3.31 course of dealings, terms incorporated by …. 4.31 issues concerning …. 2.3 meaning …. 3.32 mutuality …. 3.32, 3.33 Causation see Damages Certainty see Uncertainty Changes to the contract see Alteration, Variation Coercion Duress, compared with …. 4.8 Fair Work Act, under …. 4.8 intention to coerce …. 4.8 Collateral benefits see Deductibility of collateral benefits Collective agreements consideration and …. 3.35, 5.105 deeds, recorded in …. 5.105, 5.106, 5.113 employment contracts, relationship between …. 5.95–5.103 enterprise agreements content of …. 5.81, 8.2 contracting out …. 5.85, 5.86 contravention of …. 5.84, 8.2 estoppel and …. 5.85 Fair Work Act, under …. 1.21, 1.22 industrial instrument …. 5.81

national system employees, provision of copy to …. 5.4, 8.11 nature of …. 1.22, 5.81, 5.94, 8.2 number and coverage of …. 1.21, 1.22, 5.81 satisfaction of obligations …. 5.87–5.90 express terms in contract, as …. 5.96 implied by custom, enforceable as term …. 5.95, 5.102 implied in law, enforceable as term …. 5.100 implied in fact, enforceable as term …. 5.95, 5.101 incorporated by notice …. 5.99 incorporated by reference …. 5.36, 5.37, 5.39, 5.97 intention to form contract …. 5.106–5.108 interpretation …. 3.5 privity …. 5.109, 15.110 remedies for breach of …. 5.112 social and collective context of employment …. 1.15, 3.6, 3.11, 5.39, 8.26 union-employer contract, as …. 5.104–5.109 unions as agents in forming …. 3.73, 5.110, 5.111 United Kingdom, in …. 5.103 unregistered …. 3.73, 5.95, 5.112 Commission see Damages, Remuneration advance payments, employee’s duty to account for …. 7.55 damages discretion of employer …. 8.29, 14.56, 14.57 loss of chance to earn …. 14.56 obligation to provide work to employees paid by continue in business, employer’s promise to …. 8.45 generally …. 5.61, 8.42–8.45 mutuality …. 8.46 reasonable amount of work …. 8.43, 8.44 Community service leave see Leave Compassionate leave see Leave Compensation see Statutory compensation Competition with employer see Duty of fidelity after hours competition …. 7.49, 7.85–7.87 applications of duties of fidelity conflict of duties rule …. 7.49 conflict of interest rule …. 7.47

no profit rule …. 7.50 competition during employment competing for employees and suppliers …. 7.84, 7.90 contracting with the employer without informed consent …. 7.80 diverting the employer’s business …. 7.82 misuse of information …. 7.83 procuring breach of contract …. 7.84 soliciting clients …. 7.81 express terms regulating altering scope of duties …. 7.77 enforcement …. 15.27 terms in restraint of trade …. 16.29 generally …. 7.76–7.93 informed consent …. 7.69, 7.70 preparing for post-employment competition intention to compete …. 7.89 planning to compete …. 7.90 resigning to compete …. 7.89 resigning to secure a maturing opportunity …. 7.91–7.93 restraint of trade terms …. 7.88 scope of the duties see Scope of employment altered by agreement …. 7.77 business of the employer …. 7.78 different fields, competing in …. 7.49 nature of the employment …. 7.35, 7.42 Condition breach or repudiation of …. 10.12, 10.14, 10.16, 10.38, 10.44 characterisation of term as …. 10.15, 10.16 conditional offers …. 3.15 conditions subsequent or precedent …. 3.15, 9.8 definition …. 10.7 express …. 3.15 intermediate term, distinguished …. 10.14 meaning of …. 9.8 non-fulfilment of …. 3.15 terms, and …. 5.3 trust and confidence, term as …. 8.21, 10.18

warranty, distinguished …. 10.14 Condonation see Election Confidential information see Duty of confidence Conflict of duties aspect of duty of fidelity …. 7.33, 7.48 express terms modifying …. 7.41 detriment to employer …. 7.49, 7.66, 7.86 inconsistent employment …. 7.38, 7.48, 7.49, 7.85–7.87 nature of duties co-extensive duties, largely …. 7.44, 7.48 co-existence of …. 7.40, 7.48 contractual …. 7.33, 7.48 fiduciary …. 7.33, 7.48 relationship between …. 7.33 statutory …. 7.40, 7.48 positions of conflict, compared with …. 7.47, 7.48 real conflict …. 7.47, 7.49 rule stated …. 7.33, 7.48 scope of see Scope of employment business of the employer …. 7.78 nature of the employment …. 7.35, 7.42, 7.49 Conflict of interest applications, various competing with employer …. 7.47, 7.78, 7.80–7.84, 7.91–7.93 contracting with the employer without informed consent …. 7.80 inventions …. 7.101–7.102 misuse of non-confidential information …. 7.58, 7.83 resigning to acquire a business opportunity …. 7.91–7.93 receipt of secret payments …. 7.47, 7.94–7.95, 7.97 aspect of duty of fidelity …. 7.33, 7.46 detriment to employer or advantaging employee …. 7.65 express terms modifying …. 7.41 nature of duties co-extensive duties, largely …. 7.44 co-existence of …. 7.40, contractual …. 7.33 fiduciary …. 7.33

relationship between …. 7.33 statutory …. 7.40, 7.46 real, not theoretical, conflict …. 7.47 rule stated …. 7.33, 7.46 scope of see Scope of employment business of the employer …. 7.78–7.79 nature of the employment …. 7.35, 7.42 Contracting out see Awards, Collective agreements Consideration adequate …. 3.36 casual employees …. 3.31 collective agreements …. 3.35, 5.105 continued employment, inferred from …. 6.33 deeds and …. 3.28 definition …. 3.28, 3.29 detriment …. 3.34, 6.27, 6.31 existing and additional duties …. 6.31 forbearance …. 3.30, 6.33, 6.35 fresh …. 3.39, 6.26, 6.27, 6.30 inference by law …. 1.18 moving from promisee …. 3.34, 3.35 mutuality need for …. 1.36, 3.31 casuals and …. 3.32, 3.33 pieceworkers and …. 3.31 need for …. 3.28 past consideration …. 3.39 pieceworkers …. 3.31 practical benefits …. 6.34, 6.35, 5.105 remuneration for service 3.30, 8.38, Stilk v Myrick, rule in …. 6.30 sufficiency …. 3.36 third persons, promises to perform contractual duty to …. 6.32 triangular employment arrangements and …. 3.35 vague …. 3.38 uncertain …. 3.38 unlawful …. 3.34, 3.36, 3.37

variation of terms, supporting …. 6.3, 6.4, 6.26–6.34 fresh consideration …. 6.27 orthodox approach …. 6.26, 6.30, 6.35 wages as …. 2.18, 3.30, 9.11 Construction see Parol evidence rule and construction Constructive dismissal see Repudiation Constructive service former rule relating to …. 9.10, 10.65, 14.35 Constructive trusts availability of …. 15.136 arising from honest acts …. 15.138 inventions and …. 7.68, 7.103, 7.108, 7.109 just allowances …. 15.136 nature of …. 15.136 secret benefits and …. 7.99, 15.138 Contract see Capacity to contract, Consideration, Express terms, Illegality, Implied terms, Incomplete agreements, Intention to form a contract, Mutuality, Offer and acceptance, Privity, Suspension, Terms, Trust and confidence, Variation, Uncertainty Control control test …. 2.5, 2.13 exercise, right to …. 2.15 discipline and dismissal …. 2.15 history and dominion …. 1.7, 1.38, 1.44, 1.45 limits to conduct after hours …. 7.136 directions must be reasonable …. 7.14, 7.15 inventions outside scope …. 7.103–7.107 lawful orders …. 7.12, 7.13, 8.34 location of work …. 6.18 scope of employment …. 6.10, 6.11, 7.5 managerial prerogative …. 6.9–6.12 meaning of …. 2.13 obedience …. 7.12 source of power to …. 2.14 trust and confidence term …. 8.23 when, where, how and what work performed …. 1.7, 2.16, 6.1

work, ownership of …. 7.101 Cooperation see Duty to cooperate Copyright see Intellectual property Corporations capacity to contract …. 3.67 contracts formed without seal …. 3.87 corporate seal rule …. 3.86 directors and officers …. 2.35 employee, as …. 1.6, 2.3 promoter, contract with …. 3.81 trust and confidence …. 6.42, 8.14, 15.38 Crown servants see Public sector and Crown employment Custom and practice see Policy and practice, Term implied by custom Customer lists use of …. 16.48, 16.49

D Damages see also Agreed damages, Debt, Equitable compensation, Mitigation of loss, Wrongful dismissal agreed damages see Agreed damages clauses adequacy of see Injunctions aggravated contract, in …. 14.84 definition …. 14.16 least burdensome performance rule …. 14.48 manner of breach …. 14.75, 14.83–14.85 motive for breach …. 14.83 statutory schemes, under …. 14.84 anti-discrimination laws see Statutory compensation Apportionment Acts, under …. 9.32–9.34 Australian Consumer Law see Statutory compensation bankruptcy and: …. 13.28, 13.29 bonuses discretion to grant …. 8.29, 14.52, 14.56, 14.57 least burdensome performance rule …. 14.51 loss of chance …. 14.57

breach of contract …. 10.2, 10.48, 14.2, 14.8, 14.16 continuing breaches …. 10.71, 14.26 once and for all breaches …. 10.70, 14.25–14.28 care, breach of employee’s duty of …. 7.24–7.26 causation …. 14.17–14.20, 14.34 compensatory purpose …. 14.1, 14.7, 14.34 Commission payments discretion of employer …. 14.56, 14.57 loss of chance to earn …. 14.56 collateral benefits see Deductibility of collateral benefits continuing breaches …. 14.26 constructive service …. 10.65, 14.35 Damage loss, distinguished …. 14.10 proof of …. 14.15, 14.24, 14.54 Definitions and types of aggravated damages …. 14.16 continuing breach …. 14.26 damage …. 14.10 damages …. 14.1 damages in restitution …. 14.12 expectation damages …. 14.11 future loss …. 14.65, 14.100 loss …. 14.10 loss of bargain damages …. 14.11 nominal damages …. 14.15 non-pecuniary loss …. 14.14 pecuniary loss …. 14.14 once and for all breach …. 14.27 reliance damages …. 14.11 restitution damages …. 14.12 stigma damages …. 14.87 substantial damages …. 14.15 debt mitigation …. 14.66, 14.103 nature of …. 14.66 discretionary benefits …. 14.130 deductibility from damages …. 14.130

good faith …. 14.52, 14.57 least burdensome performance rule …. 14.46, 14.51–14.52, loss of chance …. 14.57 duty of care common law approach …. 7.26, 8.56, 8.61 insurance policies, employer’s maintenance of …. 7.27 statutory modification of right …. 7.27 equitable damages see Equitable compensation ex gratia payments deductibility of …. 14.125 wrongful dismissal, at time of …. 14.130 exemplary …. 8.57, 14.16, 14.34 equitable remedies and contrast with damages in equity …. 14.8 contrast with other equitable remedies …. 14.13 election between specific performance and …. 15.65 expectation …. 14.11 Fair Work Act see Statutory compensation fidelity, for breach of duty of …. 7.45 fixed term contracts damages …. 14.4 least burdensome performance rule …. 14.4 loss of chance to renew …. 14.58 mitigation and …. 14.106 non-renewal and remoteness …. 14.22 termination of …. 11.19, 14.4 wrongful dismissal …. 14.64 freedom from anxiety terms and mental distress …. 14.81 future employment prospects, injury to cases on …. 14.69–14.75 causation …. 14.20 express terms governing …. 14.89 damages for loss …. 14.87–14.90 Johnson exclusion area and …. 14.73–14.76, 14.88 reputational damage and …. 14.87 right to work, where employee has …. 14.91 trust and confidence term, breach of …. 14.88 wrongful dismissal …. 14.87

future loss …. 14.65, 14.100 Hadley v Baxendale loss contemplated by the parties …. 14.22 loss naturally arising from breach …. 14.21 inflation …. 14.31 inconvenience, for physical …. 14.80 injury, for personal …. 14.122 interest interest as damages …. 14.31 interest on damages …. 14.31 job security clauses loss of chance …. 14.60 procedural fairness, breach of …. 14.61 right to terminate, breaches of terms limiting …. 14.60 limitation periods …. 8.75 least burdensome performance rule bonuses and discretionary benefits …. 14.51, 14.52 contracts terminable by notice and …. 14.3, 14.49 fixed term contracts and …. 14.4 loss of a chance and …. 14.50 statement of the rule …. 14.48 wrongful dismissals …. 14.3, 14.49 liquidated damages see Agreed damages clauses Lord Cairns’ Act, under see Lord Cairns’ Act loss of a chance ACL, under …. 14.63 commissions …. 14.56 continue in employment …. 14.58 damages …. 14.50, 14.53 discretionary payments …. 14.57 fixed term contract, to renew …. 14.58 generally …. 14.53–14.65 job security provisions …. 14.60 least burdensome performance rule …. 14.50 pieceworkers …. 14.56 quantifying loss …. 14.54 renewal of fixed term contracts …. 14.58

loss of bargain …. 14.11 manner of and motive for the breach aggravated damages …. 14.83–14.85 general rule preventing recovery …. 14.75, 14.83 manner of breach …. 14.75, 14.83–14.85 motive for breach …. 14.83 mental distress critique of rule …. 14.92 exceptions to general rule …. 14.78–14.81 express terms governing …. 14.81 freedom from anxiety, terms for …. 14.81 general rule …. 14.77 generally …. 14.69–14.82 Johnson exclusion area and …. 14.73–14.76, 14.88, 14.94 meaning of …. 14.77 mutual trust and confidence, breach of term …. 14.75, 14.81 physical inconvenience …. 14.80 physical injury …. 14.79 psychiatric injury …. 14.79 relevance to right to terminate …. 10.49 remoteness of loss …. 14.92 statutory schemes …. 14.34 mitigation of loss see Mitigation of loss onus of proof breach of contract …. 10.42 loss caused by breach …. 14.17, 14.24 mitigation, in …. 14.99 nominal …. 14.2, 14.15, 14.24 once and for all breach …. 14.27–14.28 once and for all rule …. 14.26 payments in lieu see Payments in lieu of notice penalty clauses see Agreed damages clauses pieceworkers …. 14.56 physical inconvenience …. 14.80 physical injury …. 14.79 psychiatric injury and mental distress …. 14.79 procedural fairness, breach of …. 14.61, 14.62

public policy …. 14.7, 14.92, 14.93 punitive …. 14.16, 14.34 purpose of award of …. 14.1, 14.7 quantification, difficulties in …. 15.48 redundancy payments …. 14.29 reliance …. 14.11 remoteness Hadley v Baxendale, rule in …. 14.21 loss contemplated by the parties …. 14.22–14.23 loss naturally arising from breach …. 14.21 mental distress, loss caused by …. 14.92 repudiation affirmation following …. 10.72 damages for …. 10.68 mitigation when …. 14.101 reputation (loss of) cases on …. 14.69–14.75 damages for loss of …. 14.20, 14.75, 14.86–14.91 express terms …. 14.89 future employment prospects and …. 14.87 Johnson exclusion area and …. 14.73–14.76, 14.88, 14.94 opportunity to enhance reputation …. 14.91 right to perform work, where breach of …. 14.91 trust and confidence term, breach of …. 14.88 statutory schemes, under …. 14.34 wrongful dismissal …. 14.87 restitution damages in restitution …. 14.12 effective contract, on …. 9.29 restitution damages …. 14.12, 14.42, 14.43 wages, and …. 9.29 right to …. 14.2 right to perform work, for breach of …. 14.91 stigma damages causation …. 14.20 when recoverable …. 14.72, 14.88 substantial …. 14.15, 14.24

proof of amount of compensable loss …. 14.15, 14.54 superannuation and pension schemes assessment of damages and …. 14.121 benefit, loss of …. 14.47 remoteness of loss …. 14.23 taxation of …. 14.29, 14.30 time for assessment …. 14.25 trust and confidence, breach of term …. 8.15, 14.73, 14.75, 14.77, 14.81 types of …. 14.9–14.16 undertakings as to …. 15.86 unemployment wrongful dismissal, for action for …. 14.35 amounts that would have accrued during notice period …. 14.45, 14.46 amounts that would have been earned during notice period …. 14.44 assessing …. 14.65 benefits, loss of …. 14.45 breach of a term, as a …. 14.35, 14.36, 14.38 character and purpose …. 14.120, 14.127 commissions and bonuses, loss of …. 14.45, 14.51–14.52, 14.56 damages for …. 9.9, 14.3, 14.35 debt, not a …. 14.42 discretionary payments …. 14.46, 14.51–14.52, 14.57, 14.130 dispensation with service …. 14.39, 14.40 ex gratia payments …. 14.130 fixed term contracts …. 14.4, 14.64 future employment prospects harmed …. 14.86–14.91 job security provisions loss of chance …. 14.60 procedural fairness, breach of …. 14.61 right to terminate, breaches of terms limiting …. 14.60 least burdensome performance rule …. 14.3–14.4, 14.48–14.52 loss of chance …. 14.53–14.63 loss of remuneration caused by breach …. 14.44 loss of reputation …. 14.86–14.91 mental distress …. 14.69–14.82 mutual trust and confidence, breach of term …. 14.75, 14.81 non-discretionary payments …. 14.46, 14.52

non-renewal of contract …. 14.58 non-wage benefits …. 14.47 notice and …. 14.35 overview …. 14.3–14.4 payment in lieu see Payment in lieu physical inconvenience …. 14.80 physical injury …. 14.79 psychiatric injury …. 14.79 pieceworkers …. 14.56 prevention of performance …. 14.38, 14.41, 14.44 public sector employees …. 11.35 retain employee in service nature of the obligation …. 14.37 obligation to …. 14.36, 14.37 repudiation, as a …. 14.35, 14.38 stigma damages …. 14.72, 14.88 superannuation …. 14.47 taxation of …. 14.29, 14.30 wages and …. 10.64, 14.41 wages, recovery of unearned …. 14.43 Death Apportionment Acts and wages …. 9.31 effect on rights …. 9.31, 13.34 employee, of …. 12.11, 12.24, 13.33 employer, of …. 12.24, 12.25, 13.33 frustration and …. 12.11, 12.24, 12.25 offer, termination of …. 3.16 personal nature of contract …. 1.6, 3.16, 13.33 Debt mitigation …. 14.66, 14.103 nature of …. 14.66 Declarations discretionary remedy …. 15.91, 15.93 dismissals and …. 11.31, 15.96 employment benefits, concerning …. 15.100 equitable remedy …. 15.1 futility where a wrongful dismissal …. 15.98

generally: …. 15.91–15.103 history …. 15.92 jurisdictional basis …. 15.92 meaning: …. 15.91 negative declarations …. 15.103 other remedies and …. 15.94 private sector employment, in …. 15.96 statutes, contravention of …. 11.31, 15.111 statutory remedies and …. 15.95 theoretical and hypothetical issues …. 15.102 traditional rule against …. 15.97 utility where a wrongful dismissal …. 15.99 Deductibility of collateral benefits character of the payments …. 14.120 charitable payments …. 14.123 collateral benefits …. 14.120 compensation for personal injury …. 14.122 connection between the payments …. 14.120 damages for wrongful dismissal …. 14.120, 14.127 ex gratia payments …. 14.30 general principles …. 14.118–14.120 insurance payments …. 14.121 payments in lieu of notice …. 14.125 pension payments …. 14.121 redundancy payments …. 14.126–14.129 pension payments …. 14.121 sick pay …. 14.123 superannuation payments …. 14.121 unemployment benefits …. 14.120 workers’ compensation payments …. 14.124 Deeds collective agreements recorded in …. 5.105, 5.106 contracts under seal …. 3.28, 5.105 discharge of …. 6.50 Definitions acceptance …. 3.19 account of profits …. 15.120

agent …. 3.70 aggravated damages …. 14.16 anticipatory breach …. 10.10 assignment …. 6.40 auxiliary jurisdiction of equity …. 15.9 bridging terms …. 5.36 coercion …. 4.8 coercive relief …. 15.1 condition (or essential term) …. 10.7 condition precedent …. 9.8 confidential information …. 7.116 consideration …. 3.29 continuing breach …. 14.26 damage …. 14.10 defective performance …. 9.7 dependent obligation …. 9.6 director …. 2.34 divisible contract …. 9.7 divisible obligation …. 9.7 duress …. 4.2 employee …. 2.1 employer …. 2.1 entire contract …. 9.7 entire obligations …. 9.7 equitable compensation …. 15.115 exact performance …. 9.7 exclusive jurisdiction of equity …. 15.9 external source documents …. 5.36 expectation damages …. 14.11 independent contractor …. 2.1 independent obligation …. 9.6 inferior servant …. 1.27 injunctions …. 15.7 interlocutory injunctions …. 15.7 intermediate (or innominate) term …. 10.7 justified termination (or dismissal) …. 10.7 know-how …. 7.116

loss of bargain damages …. 14.11 mistake …. 4.15 nominal damages …. 14.15 non-essential terms …. 10.7 novation …. 6.37 objective approach …. 3.5 offer …. 3.8 officer …. 2.39 once and for all breach …. 14.27 promissory term …. 5.6 rectification …. 4.20 reliance damages …. 14.11 renunciation …. 10.7 representation …. 5.6 repudiation …. 10.7 repudiatory breach …. 10.8 restitution damages …. 14.12 serious breach …. 10.7 servant …. 1.4 specific performance …. 15.6 stigma damages …. 14.87 substantial damages …. 14.15 substantial performance …. 9.7 superior servant …. 1.28 term …. 5.3 termination …. 10.7 trade secrets …. 7.116 unconscionability …. 4.10 undue influence …. 4.14 unjustified termination (or dismissal) …. 10.7 variation …. 6.21 vitiating factors …. 4.1 warranty …. 10.7 worker …. 2.1 wrongful dismissal …. 10.7 wrongful resignation …. 10.7 Delegation see Vicarious performance

Delivery up and destruction generally …. 15.134 Designs see Intellectual property Disclosure of misconduct see Answering questions and disclosing wrongdoing Demotion breach of contract, as …. 6.15, 6.16 consequence of …. 6.14, 10.48, 10.84 express right, pursuant to …. 6.14 implied right, pursuant to …. 5.62, 6.14 managerial prerogative and …. 6.14, 6.16 meaning …. 6.14 serious breach, following …. 6.14, 10.48 status or position, change in …. 6.14–6.16, 8.48 statutory right, pursuant to …. 6.14 termination by agreement, following …. 6.14 trust and confidence term …. 8.24 Dignity benefit of employment …. 1.10, 8.52 career and skills development …. 1.18, 6.15, 7.89, 8.33–8.47, 11.3 consideration provided by employer …. 1.18 generally …. 1.10, 1.18 harassment and humiliation …. 8.25 self-worth …. 10.48 trust and confidence …. 8.13, 8.16, 8.17, 8.46 Destruction see Delivery up and destruction Directors de facto and de jure …. 2.34 executive and non-executive …. 2.5, 2.34 removal of …. 2.37 shadow …. 2.34 statutory and ‘special’ contract of …. 2.36 Directions see Obedience Dismissal constructive …. 10.5, 10.7, 10.35, 10.36 discriminatory …. 14.16, 14.32 equitable relief …. 15.10–15.11

meaning …. 10.7 summary …. 10.5 threatened …. 10.37 trust and confidence term …. 8.15 wrongful see Wrongful dismissal Disciplinary procedures see Job security clauses Discretionary benefits bonuses and …. 14.52, 14.56, 14.57 deductibility from damages …. 14.130 good faith …. 8.29, 14.52, 14.57 least burdensome performance rule …. 14.46, 14.51–14.52, loss of chance …. 14.57 Disparity of power see Power disparity in employment Drugs see Acts inconsistent with employment Duration see Hiring, Notice, Reasonable notice Duress causation …. 4.6 coercion under Fair Work Act, compared with …. 4.8 commercial pressure …. 4.5 common law doctrine of …. 4.2 election to affirm …. 4.7 elements of …. 4.3 history …. 4.2 illegitimate pressure …. 4.5, 4.6 onus of proof …. 4.6 overborne will, theory of …. 4.4 parties’ relative positions of power …. 4.5 protest against the conduct …. 4.6 remedies for …. 4.7 right to terminate …. 4.7 transaction voidable, not void …. 4.1, 4.7 Duties of employees see Answering questions and disclosing wrongdoing, Competition with employer, Conflict of duties, Conflict of interest, Duty of confidence, Duty of fidelity, Duty to cooperate, Employee’s duty of care, Inventions, Misappropriation of property rule, Nonconfidential information, No profit rule, Obedience, Trust and confidence

Duties of employers see Duty to cooperate, Duty to indemnify, Employer’s duty of care, Good faith, Misleading and deceptive conduct, Right to work, Trust and confidence Duty of care see Employee’s duty of care, Employer’s duty of care, Duty of confidence acquired in breach of duty, information …. 7.123, 16.48 aspect of duty of fidelity …. 7.118 assignment of rights to confidential information …. 7.112 confidential information iniquitous conduct about …. 7.132–7.134 nature of confidential information …. 7.128 non-confidential information see Non-confidential information property, not …. 7.112 restraint of trade …. 7.120, 16.29, 16.38 secrecy generally …. 7.126–7.127, 7.135 public domain …. 7.127, 7.135 publication of …. 7.127 trade secrets as …. 7.116, 16.46 trivia and valueless information …. 7.128, 7.130 defences to an action disclosure of iniquity …. 7.132–7.134 disclosure permitted by law …. 7.131 loss of secrecy …. 7.135 public interest disclosure …. 7.133 public sector workers …. 7.131 whistleblowers …. 7.131 definitions confidential information …. 7.116, 7.125, 16.41 know-how …. 7.116 trade secrets …. 7.116 duty stated …. 7.116 elements of the duty …. 7.117, 7.121 confidential, information must be …. 7.117, 7.125–7.129 detriment to employer …. 7.115, 7.130 information imparted by the employer in confidence …. 7.115, 7.122, 7.123

misuse of information …. 7.115, 7.129 specific, information must be …. 7.120, 7.124 employment, after …. 7.114, 7.118, 7.119, 7.120, 16.42, 16.43, 16.48 employment, during …. 7.116 form of confidential information …. 7.116 governmental and personal secrets …. 7.111, 7.130 know-how and …. 7.116 misuse of information element of action …. 7.117, 7.129 improper purpose, use of …. 7.11, 7.75, 7.83, 7.129 injunctive relief …. 7.129 know how, use of …. 7.129 non-confidential information see Non-confidential information statutory duty …. 7.129 nature of the duties concurrent duties …. 7.111 co-extensive duties, largely …. 7.111, 7.113, 7.129, 7.132 co-existence of …. 7.113 contractual …. 7.111, 7.118 equitable …. 7.111, 7.117 generally …. 7.29, 7.111 relationship between …. 7.113 statutory …. 7.111, 7.115, non-confidential information see Non-confidential information owed to employee …. 7.112 remedies for breach headstart injunctions …. 15.90 restraining breach …. 15.70 third party liability …. 7.112, 7.115, 15.69 scope of duty course of or by reason of employment, information imparted …. 7.11, 7.123 express terms and …. 7.114, 7.119, 7.120 seniority and confidence …. 7.35, 7.123 specific information identifiable distinguishable from know how …. 7.124 element of action …. 7.117, 7.124

express terms defining …. 7.120, 7.124, injunctions …. 7.124, 15.66 sources of …. 16.43 Duty of fidelity after hours conduct …. 7.49, 7.85–7.85 contractual consequences breach of intermediate term …. 7.39 right to terminate …. 7.39 detriment, role of advantaging employee …. 7.65, 7.66, 7.95 conflict of duties rule …. 7.66, 7.86 detriment to employer, causing …. 7.49, 7.65, 7.66 ‘to gain an advantage’ …. 7.51, 7.65 differences between contractual and equitable duties differences in duration …. 7.44, 7.67, 7.68 differences in role of informed consent …. 7.71 differences in remedies …. 7.45 third parties, liability of …. 7.45, 15.71 to whom duties owed …. 7.44, duration of the duties duration of the contractual duty …. 7.67 duration of the equitable duties …. 7.68, 7.91 duties of fidelity identified conflict of interest rule see Conflict of interest rule conflict of duties rule see Conflict of duties rule no profit rule see No profit rule misappropriation of property rule see Misappropriation of property rule misuse of information rule see Duty of confidence, Non-confidential information fiduciary duties, when owed acting for or on behalf of employer …. 7.6, 7.36, 7.37, 7.79 express terms modifying …. 7.8, 7.39, 7.40, 7.41 loyalty …. 7.36–7.38 not all of the service …. 7.36, 7.37 scope of employment …. 7.42 fiduciary duties, who owes

employees, all …. 7.34, 7.40 junior employees …. 1.24, 7.34, 7.94 nature of employment, relevance of …. 7.35, 7.42 senior and subordinate employees …. 7.7, 7.34, 7.35, 7.79 overview and five rules of fidelity …. 7.32, 7.33 historical development …. 1.24, 7.30 honesty and good faith …. 7.52, 7.73, 7.74 improper purposes, acting for …. 7.52, 7.58, 7.75, 7.83, 7.129 informed consent fiduciaries and full disclosure …. 7.20, 7.61, 7.69 full and frank disclosure …. 7.70, 7.97 generally …. 7.69–7.72 scope of employment …. 7.8, 7.69, 7.71, 7.96 loyalty and fidelity acting for or on behalf of employer …. 7.6, 7.36, 7.79 divided loyalties …. 7.37, 7.38 meaning of …. 7.36 inventions …. 7.38 nature of the duties concurrent duties …. 7.111 co-extensive duties, largely …. 7.31, 7.32, 7.44, 7.111, 7.113, 7.129, 7.132 co-existence of …. 7.40, 7.113 contractual …. 7.111, 7.118 equitable …. 7.111, 7.117 generally …. 7.29, 7.111 history …. 7.31, 7.32 relationship between …. 7.33, 7.39, 7.41, 7.113 statutory …. 7.40, 7.94, 7.111, 7.115 other duties contrasted acts incompatible with employment …. 7.33 duty of care …. 7.25 obedience …. 7.37 serve, duty to …. 7.2 trust and confidence term, distinguished …. 7.29, 7.43, 8.16 uberrimae fidei, not contract …. 7.18 prescriptive not proscriptive duties

generally …. 7.60–7.63 invent, compared with duty to …. 7.63 positive duty to advance employer’s business …. 7.62 positive duty to disclose information …. 7.59 public sector employees …. 7.38 remedies for breach account of profits …. 7.50 constructive trust …. 7.50, 7.74 third parties, liability of …. 15.71 scope of confidence, duty of …. 7.11, 7.123 conflict of duties rule …. 7.5, 7.35, 7.42, 7.49, 7.78 conflict of interest rule …. 7.7, 7.35, 7.42, 7.78, 7.79 duty to invent …. 6.11, 7.7, 7.9, 7.38, 7.101, 7.103–7.107 misappropriation of property …. 7.42, 7.52, 7.54, 7.79 no profit rule …. 7.11, 7.50, 7.79 vagueness and clarity …. 7.30 Duty of good faith see Duty of fidelity Duty to account see Misappropriation of property rule Duty to cooperate good faith, compared …. 8.32 nature of duty …. 7.2, 8.33, 14.37 obedience and …. 7.13 statement of duty …. 8.33 wrongful dismissal and …. 14.37 Duty to indemnify criminal acts, for …. 8.35 insurance policy, duty to maintain …. 8.36 loss of right to indemnity …. 8.35, 8.36 statement of duty …. 8.34 torts, for …. 8.35 Duty to invent see Inventions Duty to provide work see Right to work

E Earning wages

abatement …. 1.35, 9.50 actual service necessary …. 9.9 constructive service …. 9.10 deductions …. 9.34, 9.47, 9.48 defective performance …. 9.2, 9.7, 9.35 dependent obligation to pay …. 9.9, 9.10 duration of performance to earn wages Apportionment Acts …. 9.32 common law entire obligation rule …. 9.22, 9.29 Cutter v Powell …. 9.22–9.25 divisible or entire obligations …. 9.26, 9.27, 9.28 entire contracts …. 9.22, 9.25, 9.26, 9.29, 9.34 entire obligation …. 9.7, 9.22, 9.26, 9.27, 9.28, 9.29 wrongful dismissal and …. 14.43 entire contracts and obligations …. 9.7, 9.22–9.34 entire obligation rule Apportionment Acts …. 9.32 defective service …. 9.30 forfeiture …. 9.31, 9.49 history of rule …. 9.22–9.25 part performance, accepted …. 9.30 statement of rule …. 9.29 substantial performance …. 9.30 exact performance …. 9.7, 9.35, 9.36 forfeiture of …. 9.31, 9.49 independent obligation to pay wages non-wage remuneration and service …. 9.14 under contract …. 9.13 under industrial instruments …. 9.16 under statute …. 9.15, 9.16 industrial action under Fair Work Act generally …. 9.39–9.41 meaning …. 9.39 partial work bans …. 9.39 unprotected industrial action …. 9.40 national system employees …. 8.2, 9.2, 9.27 no-work no-pay principle …. 9.17, 9.41

order of performance concurrent obligations …. 9.14 dependent obligation to pay wages …. 9.9 independent obligation to pay wages …. 9.9, 9.13–9.16 overview …. 9.3–9.5 part performance …. 9.35, 9.42 acceptance …. 9.45, 9.46 quantum meruit, recovery on …. 9.46 rejection …. 9.43, 9.44 suspension contrasted …. 9.59 readiness and willingness to serve …. 9.9, 9.10 service, wages earned by …. 3.30, 8.38, 9.11 set-off equitable …. 9.51, 9.52 Fair Work Act, under …. 9.52 statutory …. 9.51 standard of performance exact performance …. 9.36, 9.38 substantial performance …. 9.37, 9.38 substantial performance …. 9.4, 9.7, 9.35 suspension of performance …. 9.5, 9.57–9.62 Truck Act provisions …. 9.47, 9.48 wages for work …. 9.11 wrongful dismissal, after …. 9.9, 9.18 Election acquiescence …. 6.5 affirmation acceptance of offer to vary, distinguished …. 6.46 acts inconsistent with termination …. 6.48 advantages of …. 10.80 continued service, as …. 6.48 continuing service, where …. 10.84 delay in affirming …. 6.47, 10.89, 10.90, 10.99 effect of …. 6.48, 10.79 futility where wrongful dismissal generally …. 10.80–10.84 intention …. 10.78 limited utility of …. 10.83

knowledge of breach or repudiation, following …. 10.103 time for …. 6.47, 10.89, 10.90, 10.99 wrongful dismissal, where …. 10.81 wrongful resignation, where …. 10.82 condonation …. 10.55, 10.88, 10.100–10.103 consequences of affirmation automatic termination, no …. 10.60 continuing breaches …. 10.71, 10.79 cumulative breaches …. 10.58 once and for all breaches …. 10.70 damages after breach …. 10.72 damages after repudiation …. 10.72 loss of right to terminate …. 10.70, 10.78, 10.79 revival of right to terminate …. 10.70 wages, on earning …. 10.72, 10.81 consequences of termination accrued rights, effect on …. 10.74, 10.75 automatic termination, no …. 10.60 discharge from primary obligations …. 10.73 final and binding …. 10.79 equitable relief …. 10.79 obligations surviving termination …. 10.76 time of termination …. 10.73 withdrawal of …. 10.73 exercise of election to affirm or terminate clear terms …. 10.94, 11.7, 11.12 commencement of inconsistent employment …. 10.95, 10.98 commencement of proceedings …. 10.97 communication of …. 10.95 continued performance, by …. 10.99 delay in exercise of …. 10.89, 10.90, 10.99 effect of …. 10.79 inconsistent employment, by accepting …. 10.98 inference of, from conduct …. 10.96 nature of election …. 10.78 question of fact …. 10.78 rectification of breach, prior to …. 11.17

right to elect …. 10.78 time of …. 10.89, 10.90, 10.99 written or oral …. 11.6, 11.18, 11.39 unequivocal words or conduct …. 10.94, 10.96 grounds for termination after acquired information …. 10.85, 10.87, 10.88 termination for invalid reason …. 10.86 loss of right to terminate absence of readiness and ability to perform …. 10.27, 10.104 condonation …. 10.55, 10.88, 10.100–10.103 delay …. 10.89, 10.90, 10.99 election to affirm …. 10.70, 10.78, 10.79 waiver …. 6.5, 9.46, 10.88, 10.100–10.103 meaning …. 10.78 right to nature of …. 10.78 repudiation, arises from …. 10.23, 10.38, 10.77 serious breach, arises from …. 10.77 termination acts inconsistent with affirmation …. 10.96–10.99 delay in terminating effect of …. 10.79 intention to …. 10.78 time for affirmation …. 6.47 waiver …. 6.5, 10.88, 10.100–10.103 Employee’s duty of care damages for breach common law approach …. 7.26 insurance policies, employer’s maintenance of …. 7.27 statutory modification of right …. 7.27 equitable duty of care …. 7.25 history …. 7.24 professed skill …. 7.24 statement of the duty …. 7.24 terminate, right to …. 7.28 statutory duty of care …. 7.25

statutory modifications of …. 7.25 Employer’s duty of care aspects of the duty competent fellow employees …. 8.74 safe equipment …. 8.73 safe system of work …. 8.70, 8.71 safe workplace …. 8.72 consequences of breach …. 8.56, 8.61 contributory negligence …. 8.57 course of employment incidental acts …. 8.63 generally …. 8.63 unauthorised acts …. 8.63, 8.64 foreseeability of the risk …. 8.66 liability of employer for breach direct liability …. 8.57 non-delegable duty, under …. 8.61 statutory liability …. 8.58, 8.59 vicarious liability …. 8.62, 8.63 limits on recovery …. 8.75 nature of duty absolute, not …. 8.68 duty in contract …. 8.57, 8.60 duty in tort …. 8.57, 8.60 duty under statute …. 8.57, 8.58, 8.59, 8.60 obedience and control …. 7.13 personal and non-delegable duty …. 8.61, 8.62 precautions …. 8.67, 8.68 standard of care …. 8.65, 8.67, 8.68 statement of duty …. 8.56, 8.58 statutory liability …. 8.58 vicarious liability …. 8.62, 8.63, 8.64 Employment contract benefits usually provided to employees leave entitlements …. 2.19 superannuation …. 2.19 tax treatment …. 2.20

business on own account conducting …. 2.7 equipment, tools and capital investment …. 2.10 expenses and invoicing …. 2.8, 2.9 independence, integration and representation …. 2.11 nature of the work …. 2.12 risk and remuneration …. 2.8, 2.9 test …. 2.5, 2.7 value and goodwill of …. 2.7, 2.8 control control test …. 2.5, 2.13 exercise, right to …. 2.15 discipline and dismissal …. 2.15 meaning of …. 2.13 one person company and shareholders …. 2.15 source of power to control …. 2.14 when, where, how and what work performed …. 2.16 delegation exclusive service …. 2.17 personal performance of the work …. 2.17 right to delegate …. 2.17 definitions director …. 2.34 employee …. 2.1 employer …. 2.1 independent contractor …. 2.1 officer …. 2.39 worker …. 2.1 employee, meaning of compared with worker …. 2.1 compared with independent contractor …. 1.23, 2.1 historical …. 1.23, 1.28, 1.44, 1.45, 2.1 importance of defining …. 2.2 statutory definitions …. 2.4 express terms categorising the relationship ‘contracting out’ of employment …. 2.22 inaccurate labelling of the relationship …. 2.26

not determinative …. 2.24 not reflecting reality …. 2.27, 2.28 rectification …. 2.29 shams …. 2.23, 2.25 independent contractors definition …. 2.1 employees, distinguished …. 1.23, 2.5 historical development …. 1.23, 1.44 number of, in Australia …. 1.20 own business, conducting …. 2.7 principal in own business, as …. 2.11 multi-factor test …. 2.5 matter of judgment …. 2.6 other relationships distinguished agency …. 2.43, 3.70 bailment …. 2.40 corporations as employees …. 1.6, 2.3 partnerships …. 2.41 tenant …. 2.42 parties to, identifying the …. 2.45–2.48 tests, various business on own account test …. 2.5 control test …. 2.5 historical development …. 1.23 multi-factor test …. 2.5 organisation test …. 2.5 totality of the relationship factual matrix …. 2.32 parol evidence rule …. 2.30–2.33 practice of the parties …. 2.31–2.32 written terms incomplete …. 2.31 triangular employment arrangements contract between client and employee …. 2.50–2.51 joint employment …. 2.52 labour hire …. 2.44, 2.49–2.51 Enterprise agreements see Collective agreements Equitable compensation

availability …. 15.115 breach of equitable obligations, for …. 7.99, 14.13, 15.115 causation …. 15.116 compared with damages …. 14.13 discretionary remedy …. 15.116 election between alternative remedies …. 15.115 equitable defences and …. 15.116 mitigation …. 15.116 nature and purpose of …. 14.13, 15.114, 15.115 non-economic loss, for …. 15.115 power to award …. 15.115 Equitable defences abandonment of rights …. 15.63 clear and certain terms …. 15.59, 15.66 constant supervision …. 15.57–15.59 delay …. 15.62 effect on third parties …. 15.61 futility …. 15.64 hardship …. 15.61 impossibility and illegality …. 15.64 industrial action …. 15.54 laches …. 15.62 mutuality …. 15.55, 15.56 readiness and willingness to perform …. 15.52 repeated breaches, prospect of …. 15.58 uncertainty …. 15.57–15.59 unclean hands …. 15.60 Equitable relief against third parties breach of confidence …. 15.69 breach of the equitable duty of fidelity generally …. 15.71–15.74 knowing assistance …. 15.72 knowingly inducing a breach …. 15.73 knowing receipt of trust property …. 15.74 third party acquiring confidential information …. 15.70 Equitable remedies see Injunctions and specific performance, Equitable defences, Declarations,

Lord Cairns’ Act, Account of profits, Account, Delivery up and destruction, Constructive trusts Evidence see Parol evidence rule Evolution of obligations see Flexibility Exclusive service clauses characterising the relationship, in …. 2.17 fidelity, duty of …. 7.49, 7.77 history …. 1.27, 1.44 restraint of trade …. 16.29 Express terms categorising the relationship …. 2.22–2.28 collective agreements as …. 5.96 conflict between boilerplate and special terms …. 5.27 express terms …. 5.27 express and implied terms …. 5.27, 8.22 incorporated document and special terms …. 5.27, 5.45 course of dealings, incorporated by …. 5.31–5.33 earlier and later inconsistent terms …. 5.27 informal regulation of employment contracts …. 1.12, 2.31, 3.44, 3.48, 3.27, 5.53, 6.24 interpretation when modifying terms implied by law …. 1.19, 7.119, 10.19 notice of term, incorporated by …. 5.30 oral or written …. 5.26 reference, incorporated by see Terms incorporated by reference relationship, categorising …. 2.21 scope of employment, defining …. 7.10 signature, terms incorporated by see Terms incorporated by signature External administration see Insolvency External administrators see Insolvency External source document see Terms incorporated by reference Extrinsic evidence see Parol evidence rule and construction

F Fair Work Act 2009 (Cth) awards see Awards

coercion under …. 4.8 contravention, effect of a …. 4.29, 5.84, 11.67 constitutional heads of power …. 1.21 deductions from wages …. 9.47, 9.48 enterprise agreements see Collective agreements false and misleading representation …. 4.34 individual rights established by …. 8.12 modern awards see Awards notice, right to effect of contravention …. 11.67 employees covered and excluded …. 11.38 express and implied terms, relationship with …. 11.39, 11.51 length of notice …. 11.37 notice, right to …. 8.3, 11.6, 11.36, 11.37 written notice …. 11.6 overview …. 1.22 part performance …. 9.4 principal statute governing employment …. 5.2, 5.81 referrals of power by states …. 1.21 remedies provided under …. 5.94 remuneration under …. 9.49 scope …. 1.21, 5.81 set-off and …. 9.52 standing down employees …. 9.63 sources of rights …. 8.2 undue influence …. 4.9 undue pressure …. 4.9 Fiduciaries see Duty of fidelity Fixed term contracts amounts payable under …. 14.106 damages adequate remedy, whether …. 15.44 least burdensome performance rule …. 14.4 loss of chance …. 14.58 mitigation and …. 14.106 termination, for …. 11.19, 14.4, 14.64 wrongful dismissal …. 14.64

formalities …. 11.18 meaning …. 11.18 renewal continued employment after expiration …. 11.19 loss of chance, for non-renewal …. 14.58 option to …. 11.18 remoteness of loss for non-renewal …. 14.22 notice to terminate …. 11.18, 11.19 role, changing of …. 11.20 termination of …. 11.19, 10.60, 14.4, 14.64 Flexibility characterising the contract …. 2.30–2.31 frustration, doctrine of …. 12.8, 12.19 inferring agreement and consideration …. 3.4, 6.33 invent, duty to …. 7.105 location of employment …. 6.20 restraint of trade …. 16.12, 16.15 reasonable notice …. 11.56 scope of employment …. 7.9 uncertain and incomplete agreements …. 3.49 Formation see Offer and acceptance, Consideration, Intention to form a contract, Uncertainty, Incompleteness Fraud see Answering questions and disclosing wrongdoing Freedom of contract see Slavery and servility Frustration accrued rights, effect on …. 12.49 acts of the parties …. 12.47 automatic operation of …. 12.47 common purpose, destruction of …. 12.10 consequences of …. 12.49 creeping frustrations …. 12.45 death …. 12.11, 12.24, 12.25 dramatic frustrations …. 12.44 economic factors, termination for …. 12.27–12.28 effect of …. 12.49 fault …. 12.38 illness …. 12.39

incarceration of employee …. 12.38, 12.40–12.42 self-induced, rule against …. 12.36 foresight …. 12.27, 12.31, 12.33, 12.35, 12.54 frustrating event dramatic and creeping …. 12.44 identification …. 12.43 history and foundation …. 12.2, 12.3 ill employees …. 12.13–12.20 fault and …. 12.39 foresight and …. 12.34 mental illness …. 12.19 prolonged illness …. 12.46 impossibility …. 12.4 incarceration of employee …. 12.21 industrial action …. 12.27 illegality …. 12.5 licences and authorities, failure to possess …. 12.6 onus of proof …. 12.48 radically different circumstances …. 12.7–12.9 scope of doctrine …. 12.4, 12.13 self-induced, rule against …. 12.36 shared assumptions, destruction of …. 12.10 statutory schemes and …. 12.29, 12.30, 12.54 subject matter, destruction of …. 12.10, 12.12 supervening events …. 12.1, 12.2 express terms governing …. 12.31 fault for …. 12.37 termination by …. 12.47 unfair dismissal claims and …. 12.54 wages, entitlement to …. 12.49–12.51 war …. 12.22, 12.23 Fundamental Breach see Serious breach Fundamental Term see Condition

G Garden leave

mitigation during …. 14.102 payment in lieu, as …. 11.72, 14.102 right to work …. 8.54 suspension, compared …. 9.59 General Employee Entitlements and Redundancy Scheme (GEERS) see Redundancy Good faith breach of the duty anti-avoidance obligation …. 8.32 fair conduct …. 8.31 capricious conduct …. 8.29, 8.31 discretions, exercise of …. 8.29, 8.31 improper purposes …. 8.29, 8.31 location, change in …. 6.18 suspension …. 8.29 unilateral alteration of terms …. 5.42, 6.8 content of duty …. 8.31 damages breach, for …. 14.52 loss of chance …. 14.57 duty, statement of …. 8.28 economic wellbeing of employee …. 8.30 mutual duty …. 8.28 nature of term and duty …. 8.28, 8.30 relationship with other terms …. 8.28, 8.30 termination in …. 10.20 trust and confidence term, compared …. 8.16 termination of contract, applies to …. 8.32

H Hardship see Equitable defences Hiring daily, monthly and periodic …. 1.27, 11.46, 11.47 history of …. 11.40–11.44 yearly hiring displacing …. 11.43, 11.44

master and servant model …. 1.26, 1.27 presumption of …. 11.40, 11.42 Hours of work after hours conduct historical regulation …. 1.24 inconsistent employment …. 7.86–7.88 inventions …. 7.85 misconduct …. 7.138–7.139 secret profits …. 7.85 scope of employment …. 7.10, 7.11 award-free employees …. 8.4 national employment standards …. 8.4 overtime equitable sharing of …. 6.10 national employment standards …. 8.4

I Illegality common law bases for …. 4.24 consequences of …. 4.26–4.31 contracts in restraint of trade …. 4.24 contrary to Fair Work Act …. 4.23, 4.29, 5.84, 11.67 contrary to public policy …. 4.22, 4.25, 4.30 contrary to statute …. 4.22, 4.27–4.30, 5.84 Crown’s revenues, protection of …. 4.28 four types of …. 4.23 term expressly prohibited …. 4.23 term to do a prohibited act …. 4.23 term frustrates policy …. 4.23, 5.84 term performed in a prohibited manner …. 4.23 knowledge or ignorance of parties …. 4.31 onus of proving …. 4.23 servility …. 4.25 sexually immoral contracts …. 4.25 statute, effect of breach of …. 4.28 tax avoidance …. 4.24, 4.30

unenforceability of contract or term …. 4.28, 5.83 Illness employees, of, frustration of contract …. 12.13–12.20 fault and …. 12.39 foresight and …. 12.34 mental illness …. 12.19 prolonged illness …. 12.46 deductibility of payments for from damages …. 14.125 sick leave see Leave wages during periods of …. 9.11, 12.15 Implied terms business efficacy test see Terms implied in fact co-operation …. 8.33, 14.37 conditions or intermediate terms, whether …. 10.18 custom, implied by see Terms implied by custom employment contracts in …. 1.18 fact, implied in see Terms implied in fact hierarchy of …. 5.3 implicit terms …. 5.47, 8.39 industrial instruments as …. 5.100–5.102 inferences from express terms, arising from …. 5.46–5.47 informal contracts …. 5.58 law, implied in see Terms implied in law overview …. 5.46 time of assessment …. 5.46 types …. 5.46 implicit terms …. 5.47 terms implied by custom …. 5.66–5.74 terms implied in fact …. 5.53–5.65 terms implied in law …. 5.48–5.52 United Kingdom, in …. 5.59, 5.78 Incarceration of employee fault and …. 12.38, 12.40–12.42 frustrating event …. 12.11, 12.21 Incomplete agreements acted on agreement, where parties have …. 3.49, 3.52 agreements

agree, to …. 3.52 discretion, to perform …. 3.56–3.58, 8.46 subject to contract …. 3.53–3.55 completeness, need for …. 3.47, 3.59–3.60 cures for incompleteness …. 3.47, 3.59, 3.60 essential term, incomplete …. 3.48, 3.52 overview …. 3.47 Indemnification see Duty to Indemnify Independent contractors see Employment contract Independent obligation see Earning wages Industrial action breach of contract …. 7.3 inconsistent employment …. 15.54 interlocutory injunctions …. 15.88 overtime bans …. 9.39 partial bans …. 9.39 remuneration during generally …. 9.39–9.41 meaning …. 9.39 partial work bans …. 9.39 unprotected industrial action …. 9.40 repudiation of contract …. 7.4 suspension of contract …. 9.59 Industrial instrument see Awards and Collective agreements Inefficiency see Employee’s duty of care Infants see Minors Inflation see Damages Information see Duty of confidence, Non-confidential information Inherent flexibility of contract see Flexibility Injunctions see also Equitable defences, Equitable relief against third parties, Interlocutory injunctions, Specific performance adequacy of damages adequacy of other remedies …. 15.50 common irrecoverable damages …. 15.45, 15.49 difficulties in quantification …. 15.48 express terms governing remedies …. 15.51 generally …. 15.41–15.51

irreparable harm …. 15.42 non-monetary benefits of employment …. 15.46 when contract terminable by notice …. 15.43 classification and types of …. 15.7 final …. 15.7 enforcing equitable rights …. 15.9 enforcing legal rights …. 15.9 interim …. 15.7 interlocutory …. 15.7, 15.75 mandatory …. 15.8, 15.89 prohibitory …. 15.8 quia timet …. 15.103, 15.119 springboard or headstart doctrine …. 15.90 statutory …. 15.25–15.26, 15.111 considerations weighing against adequacy of damages …. 15.41–15.51 constant supervision …. 15.17 mutuality, absence of …. 15.17 slavery and liberty …. 15.18 trust and confidence, need to retain …. 15.35–15.40 contractually agreed termination procedures …. 15.22, 15.23 definition and types …. 15.6 discretionary nature …. 15.5 election between inconsistent remedies …. 15.65 enforcing the order …. 15.67 equitable defences and other discretionary considerations see Equitable defences fidelity, breach of duty …. 7.45 form of relief …. 15.10, 15.11, 15.24, 15.66 headstart injunctions: …. 15.90 historical background …. 15.2 interlocutory injunctions see Interlocutory injunctions job security provisions …. 15.22, 15.23 modern rule governing exceptional circumstances approach …. 15.20, 15.21 generally …. 15.20

principled approach …. 15.20, 15.21 negative stipulations generally …. 15.27–15.34 indirectly ordering specific performance …. 15.30 meaning …. 15.27 positive stipulations …. 15.28 scope and duration of relief …. 15.34 ‘special services’ …. 15.32 ‘starvation’ and idleness …. 15.29 prerequisites to relief actual or threatened breach of a right …. 15.14 enforceable contract …. 15.12 subsisting contract …. 15.13, 15.52 reinstatement and …. 15.10, 15.11 restraint of trade, to restrain breaches …. 16.18 duration …. 16.19 scope …. 16.19 slavery and liberty …. 15.18 springboard injunctions: …. 15.90 traditional rule against bilateral termination theory and …. 15.19 demise of the traditional rule …. 15.15 historical background …. 15.2 ‘jurisdiction’ to grant …. 15.15 reasons supporting …. 15.17 statement of traditional rule …. 15.17 third parties see Equitable relief against third parties trust and confidence meaning of …. 15.37 need for sufficient …. 15.35 proof of loss, meaning of …. 15.40 United Kingdom, in …. 15.19 Injury see Damages Insolvency adoption of contract by administrator or receiver …. 13.18, 13.20 administrator liability of …. 13.18

bankruptcy effect on employee’s right to sue for damages …. 13.28, 13.29 employee, of …. 13.26 employer, of …. 13.26 nature of …. 13.26 sequestration order …. 13.26 trustee in, role and rights of …. 13.27 corporate …. 13.15 General Employee Entitlements and Redundancy Scheme (GEERS) claims under …. 13.25 establishment of …. 13.25 liquidator intention to continue employment …. 13.20 liability of …. 13.18 principal function …. 13.21 personal …. 13.26 priority …. 13.21 damages for wrongful dismissal …. 13.24 due or payable amounts …. 13.22 excluded employees …. 13.22 injury compensation, for …. 13.23 leave entitlements …. 13.23 retrenchment payments …. 13.23 wages, for …. 13.21, 13.23 receivers and managers effect on contracts of appointment by the court …. 13.17 effect on contracts of private appointment …. 13.17 liability of …. 13.18 voluntary administration effect on contracts …. 13.16 liability of …. 13.18 nature of …. 13.16 winding up continued employment following …. 13.19 effect on contracts …. 11.70, 13.15 order for …. 13.15 voluntary, resolution for …. 13.15

Intellectual property see also Inventions account of profits …. 7.109, 15.127, 15.132 copyright …. 7.102, 7.110 designs …. 7.102, 7.110 patents …. 7.104, 7.109 public sector employment …. 7.102, 7.110 Intention to form a contract collective agreements …. 5.106–5.108 domestic context …. 3.41 extrinsic evidence to prove …. 3.46 generally …. 3.40–3.46 ministers of religion …. 3.42 mutual …. 3.9, 3.40 objectively ascertained …. 3.44 presumption …. 3.40, 3.41 relevance …. 3.40 social context …. 3.41 training contracts …. 3.43 volunteers …. 3.42 Interlocutory injunctions adequacy of damages as remedy …. 15.83 balance of convenience limb of test …. 15.80, 15.82 delay …. 15.85 determining the dispute …. 15.87 final relief, as …. 15.87 industrial action, where …. 15.88 maintaining the status quo …. 15.76 mandatory …. 15.89 meaning …. 15.75 prima facie case limb of test …. 15.78–15.79 purpose …. 15.75 restraint of trade …. 15.88 test to determine grant of …. 15.77 relationship between limbs …. 15.81 third parties, effect on …. 15.85 undertakings …. 15.76 Intermediate (or innominate) term

breach or repudiation of …. 10.17, 10.38, 10.44 condition, distinguished …. 10.14 implied terms as …. 10.18 warranty, distinguished …. 10.14 Inventions account of profits …. 7.109 accounting to employer for …. 7.108 after hours, made …. 7.85 Archimedes …. 7.85 conflict of interest rule …. 7.46 constructive trust and invention …. 7.68, 7.103, 7.108, 7.109 duration of duty …. 7.68, 7.109 duty of fidelity contractual …. 7.6, 7.102 equitable …. 7.6, 7.102 duty to invent …. 7.7, 7.105 loyalty …. 7.38 misappropriation of property rule …. 7.102, 7.108 no profit rule …. 7.102 ownership of product of the work …. 7.101, 7.105 patents …. 7.104, 7.109 positive duty of fidelity …. 7.63 restraint of trade, term in …. 7.102 scope of obligation …. 6.11, 7.38, 7.101 course of dealings, reflects …. 7.9, 7.106, 7.107 connection between invention and employment …. 7.101, 7.103–7.107 express terms and duties …. 7.104, 7.105, 7.107 nature of employment …. 7.7, 7.103, 7.104

J Job satisfaction see Dignity Job security clauses benefits of, entitlement to …. 15.45 decision to terminate by third party …. 10.20, 11.16, 11.23 disciplinary procedures …. 11.15, 11.16 effect of breach …. 11.66

express contractual …. 10.93, 11.13, 14.60 fixed term contracts see Fixed term contracts good faith, duty of …. 8.29, 11.12, 11.24, 11.25, 11.26 grounds specified …. 11.14 implied contractual …. 11.25, 11.26 injunctions to enforce …. 11.6, 15.22, 15.23 loss of chance …. 14.60 nature of …. 10.93 negative stipulation relating to service …. 15.24 permanent employment see Permanent employment probation periods …. 11.5 procedure specified …. 11.15, 11.16 procedural fairness, breach of …. 8.26, 11.23, 11.24, 11.33, 11.34, 14.61 public sector employment, in …. 11.33, 11.34 redundancy procedures …. 11.6 trust and confidence term …. 8.126, 11.24 Judicial review see also Public sector employment and Crown employment ADJR Act, relief under …. 15.105 decisions under an enactment …. 15.105 grounds of review …. 15.110 common law, under connection between statute and breach …. 15.108, 15.109 declarations …. 15.106 grounds of review …. 11.32 …. 15.110 injunctions …. 15.106 justiciability of decision …. 15.107 prerogative relief …. 15.106 public law element …. 15.108, 15.109 standing …. 15.107 wrongful dismissal …. 15.112 wrongful suspension …. 15.112 declarations …. 11.31, 15.104, 15.106 grounds of review …. 15.110 wrongful dismissal …. 11.35, 15.112, 15.113 wrongful suspension …. 15.112, 15.113

K Know-how definition …. 7.116, 16.41 nature of …. 16.45 trade secrets, distinguished …. 7.116, 16.44, 16.47

L Labour hire see Triangular employment arrangements Laches see Equitable defences Least burdensome performance rule bonuses and discretionary benefits …. 14.51, 14.52 contracts terminable by notice and …. 14.3, 14.49 fixed term contracts and …. 14.4 loss of a chance and …. 14.50 statement of the rule …. 14.48 wrongful dismissals …. 14.3, 14.49 Leave annual leave …. 8.6 carer’s leave …. 8.7, 12.17 community service leave …. 8.8 compassionate leave …. 8.7 entitlements, priority for …. 13.23 long service leave …. 8.9 payment on termination …. 14.66 parental leave …. 8.5 personal leave …. 8.7, 12.17 public holidays …. 8.10 sick leave assessment of damages and …. 14.123 express term …. 12.15 payment during …. 9.11 right to, in industrial instrument …. 12.16 wages, payments as …. 9.11, 12.16 Liquidated damages see Agreed damages clauses Liquidation see Insolvency

Liquidator see Insolvency Location of employment changing …. 6.18, 6.19, 10.48 change to deal with emergency …. 6.12, 6.20 express power to change …. 6.18 historical development …. 1.24, 1.27 home, working from …. 2.16 implicit term governing …. 6.18 implied term governing …. 6.19 good faith exercise of power to change …. 6.18, 8.23, 8.29 term governing …. 6.20 United Kingdom, approach in …. 6.20 Long service leave see Leave Lord Cairns’ Act availability of damages under …. 15.117 breach of equitable or contractual obligations, for …. 15.117 common law damages, distinguished …. 14.13, 15.118, 15.119 continuing breaches, for …. 14.28, 15.119 damages under …. 15.114, 15.117–15.119 election between alternative remedies …. 15.11 nature and purpose of …. 15.114, 15.117 non-economic loss, for …. 15.119 Loss see Damages Loss of a chance ACL, under …. 14.63 commission, to earn …. 14.56 continue in employment, to …. 14.58 damages for …. 14.50, 14.53 discretionary payments …. 14.57 fixed term contract, to renew …. 14.58 generally …. 14.53–14.65 job security provisions, breach of …. 14.60 least burdensome performance rule …. 14.50 pieceworkers …. 14.56 quantifying loss …. 14.54 renewal of fixed term contracts …. 14.58 Loss of reputation see Damages

M Master and servant model coercive regime absconders …. 1.32, 1.40, 1.42, 1.43, 1.47 Australia, in …. 1.32 correction of servants …. 1.41, 1.42 fines …. 1.35 forced labour …. 1.33, 1.34, 1.36 limits on termination …. 1.32, 1.34, 1.43 contractual foundation …. 1.30, 1.36, 1.46, 1.47 duration of service common law entire obligation rule …. 1.35, 9.22, 9.25, 9.29 general hiring …. 11.40–11.44 periodic hiring …. 1.27, 11.46, 11.47 yearly hiring …. 1.26, 1.27, 11.40–11.44 dominion of master over servant …. 1.7, 1.38 duty of care …. 7.24 employment contract, distinguished …. 1.4 Master and Servant Acts Australia, in …. 1.32 Black Death, formed in crucible of …. 1.26, 1.31 correction of servants …. 1.41, 1.42 forced labour …. 1.33, 1.34, 1.36 legislative history to 1750 …. 1.26 legislative history from 1750 …. 1.41 scope of …. 1.26, 1.28 misbehaviour …. 1.40, 1.41, 1.43 magistrates’ role …. 1.35, 1.41, 1.43 Poor Laws see Poor Laws servants, types of apprentices …. 1.27, 1.33, 1.36, 1.46 artisans …. 1.27 domestic servants …. 1.27 ‘employees’ …. 1.23, 1.28, 1.44, 1.45, 2.1 independent contractor, compared with …. 1.23, 1.44 inferior servants …. 1.27, 1.33, 1.38, 1.45, 1.46, 10.1, 10.2

journeymen …. 1.27 labourers …. 1.27, 1.33 menial servants …. 1.24, 1.27, 1.33 merger of categories …. 1.44, 1.45 servants in husbandry …. 1.27, 1.33 superior servants …. 1.28, 1.44, 1.45, 7.24, 10.2 service, concept of …. 1.29, 1.38, 1.39, 1.46 status or contract …. 1.30, 1.36, 1.37, 1.46, 1.47 termination of service absconders …. 1.32, 1.40, 1.42, 1.43, 1.47 dispensation and dissolution …. 1.39 generally …. 1.40–1.43, 1.47, 10.1, 10.2 limits on …. 1.34, 1.40, 1.43, wages under …. 1.35 Mental distress see Damages Minors capacity to contract …. 3.65 contracts for necessaries …. 3.65 Misappropriation of property rule aspect of duty of fidelity …. 7.33 connection with employment …. 7.54 improper use of property …. 7.52 inventions, applied to …. 7.102 …. 7.102, 7.108 nature of duties co-extensive duties, largely …. 7.44 co-existence of …. 7.40 contractual …. 7.33, 7.52 fiduciary (probably) …. 7.33, 7.52 relationship between …. 7.33 recovering property from employee …. 7.52, 7.53 rule stated …. 7.33, 7.52 scope of duty …. 7.42, 7.52, 7.54, 7.79 Misconduct see Serious breach and repudiation Misleading and deceptive conduct breach of contract compared …. 4.32 conduct ‘in trade or commerce’ …. 4.35, 4.36

not only representations …. 4.37 prior to employment …. 4.33 employment, in …. 4.32 silence …. 4.37 likely consequences …. 4.37 loss or damage caused by …. 4.32, 4.38 misleading conduct about rights of employee …. 4.34 about future employment …. 4.34, 4.39, 4.41 Fair Work Act, under …. 4.34 future matters, about …. 4.39, 4.41 future matters, onus of proof …. 4.40 representation literally true …. 4.38 workplace rights of another person …. 4.34 scope of protection …. 4.33 statutory cause of action …. 4.32 what is …. 4.37 Mistake common effect of …. 4.16 definition …. 4.15 employment, in …. 4.17 equitable relief …. 4.19 identity of other party …. 4.18 principles …. 4.15 setting aside contracts on basis of …. 4.19 unilateral …. 4.15, 4.18 Misuse of position see No profit rule Mitigation of loss amounts earned in …. 14.117 avoided loss …. 14.116 avoidable loss …. 14.108 commencing new business …. 14.115 election by employee to affirm, where …. 14.107 fixed term contracts …. 14.106 generally …. 14.96–14.117 meaning of ‘duty’ to mitigate …. 14.96, 14.98

new offers of employment and …. 14.110 circumstances of the dismissal …. 14.112 less remuneration …. 14.113 personal circumstances of the employee …. 14.114 reduced status …. 14.113 not seeking other employment …. 14.115 onus of proof …. 14.99 overview …. 14.96 payments in lieu and…. 14.101 fixed term employees …. 14.106 ‘garden leave’ and …. 14.102 payment on account of damages …. 14.105 termination on payment of agreed sum …. 14.104 termination payment owed as debt …. 14.103 question of fact …. 14.109 reasonable steps taken in …. 14.108 repudiation and …. 14.101 statutory schemes …. 14.33 when duty arises …. 14.101 wrongful dismissal, where …. 14.100 Modern awards see Awards Mutual Trust and Confidence see Trust and confidence Mutuality consideration …. 3.30 defence to action for specific performance …. 15.17, 15.55, 15.56 discretion to provide work …. 8.38, 8.46 pieceworkers, and …. 3.31

N National Employment Standards (NES) contracting out of …. 5.85, 5.86 contravention of …. 5.84, 5.94, 8.2 estoppel and …. 5.85 Fair Work Act, in …. 1.22 Fair Work Information Statement, in …. 5.4, 8.11 hours of work …. 8.4

leave standards see Leave minimum standards in …. 8.2 nature of rights created …. 5.94 public holidays …. 8.10 scope of …. 1.21, 1.22, 5.81 National system employment award see Awards award, access to …. 5.4, 8.11 enterprise agreements see Collective agreements deductions from pay …. 9.47 modern award see Awards national employment standards see National Employment Standards notice of termination by …. 11.6 leave see Leave proposed enterprise agreement, provision of …. 5.4, 8.11 satisfaction of obligations payments made for collateral purpose …. 5.89 payments made for extraneous purpose …. 5.88 payments made for specified purpose …. 5.88 payments made for unspecified purpose …. 5.87 scope …. 1.21, 5.81 standing down employees …. 9.63 transfer of employment between …. 13.14 wages minimum …. 8.2 earning …. 9.2 Natural justice see Procedural fairness Negative stipulations definition …. 15.28 enforcement idleness …. 15.33 starvation …. 15.33 injunction to restrain breach …. 15.31 scope and duration …. 15.34 reasonable restraints of trade …. 15.27 service, relating to …. 15.30 special services, employees providing …. 15.32

Negligence see Employee’s duty of care, Employer’s duty of care Non-confidential information acquired in breach of duty, information …. 7.123, 16.48 aspect of duty of fidelity …. 7.33 improper use of information …. 7.58, 7.75, 7.83 nature of the duty contractual …. 7.57, 7.58, 7.116 equitable, not …. 7.33, 7.57, 7.58, 7.116 generally statutory, probably …. 7.57, 7.58, 7.116 positive obligation to disclose …. 7.59 relationship with other rules of fidelity …. 7.33, 7.50, 7.57, 7.58 restraint of trade …. 7.120, 16.29, 16.38 rule stated …. 7.33, 7.57 termination, duty applying after …. 7.120 Notice complying with terms of contract or statute effect on contract …. 11.64 effect on relationship …. 11.64 complying with terms of contract or statute, not earning wages after …. 11.65 effect on contract …. 11.12, 11.65, 11.66 effect of contravention of statute …. 11.35, 11.67 effect on relationship …. 11.65 short notice …. 11.12, 11.65 emotional distress, giving notice in state of …. 11.12 exercise of right to give emotional distress, in state of …. 11.12 rectification of breach, prior to …. 11.17 right to give …. 11.2 express terms limiting grounds for termination …. 11.14 probation periods …. 11.5 procedure for notice, governing …. 11.15 sickness and disability schemes …. 11.27 serious breach, augments termination for …. 11.13 Fair Work Act, under

effect of contravention …. 11.67 employees covered and excluded …. 11.38 express and implied terms, relationship with …. 11.39, 11.51 length of notice …. 11.37 notice, right to …. 8.3, 11.6, 11.36, 11.37 written notice …. 11.6 formalities certainty of …. 11.7 clarity …. 11.7, 11.12 conditional notice …. 11.8, 11.9 Fair Work Act, under …. 11.6 receipt of notice …. 11.6 unambiguous terms …. 11.12 written or oral …. 11.6, 11.18, 11.39 industrial instruments, under awards, in …. 11.38, 11.51 intention to terminate or give notice continue employment, compared …. 11.10 objective approach …. 11.9, 11.12 resign, to …. 11.7, 11.12 invalid notice earning wages after …. 11.65 effect on contract …. 11.12, 11.65, 11.66 effect of breach of statute …. 11.35, 11.67 effect on relationship …. 11.65 short notice …. 11.12, 11.65 length of notice different for employer and employee, may be …. 11.5, 11.50, 11.52 Fair Work Act, under …. 11.36–11.39, 11.51, 11.60 periodic hirings …. 11.46, 11.47 reasonable notice see Reasonable notice term of employment and …. 11.46, 11.47, 11.53, 11.60 limits on right to give disciplinary procedures …. 11.15, 11.16 express contractual …. 11.13 good faith, duty of …. 8.29, 11.12, 11.24, 11.25, 11.26 grounds specified …. 11.14

implied contractual …. 11.25, 11.26 injunctions to enforce …. 15.22, 15.23 procedure specified …. 11.15, 11.16 procedural fairness …. 8.26, 11.23, 11.24, 11.33, 11.34 redundancy procedures …. 11.6 trust and confidence term …. 8.23, 11.24 notice, giving agents in, role of …. 11.11 authority to give and receive…. 11.11, 11.16, 11.23 compulsory winding up order, as …. 11.70 damages, adequacy of …. 15.44 fiduciary power, not exercise of …. 11.3 notice to vary, distinguished …. 11.9, 11.10 reasonable notice see Reasonable notice slavery and …. 11.4 payment in lieu see Payments in lieu procedure when giving decision to terminate by third party …. 10.20, 11.16, 11.23 disciplinary procedures …. 11.15 effect of breach …. 11.66 injunctions to enforce …. 15.22, 15.23 procedure specified in contract …. 11.15, 11.16 procedural fairness …. 11.23, 11.24 public sector employment, in …. 11.33, 11.34 redundancy procedures …. 11.6 trust and confidence, term …. 11.24 reasons for notice acquired after termination, knowledge …. 10.87 good faith term …. 8.29, 11.25, 11.26 grounds for …. 11.25 provision of …. 11.23 reasonable notice see Reasonable notice repudiation compared …. 10.11 right to terminate by …. 11.3, 11.4 term of employment and notice …. 11.46, 11.47, 11.53 unilateral act …. 11.4 valid notice

effect on contract …. 11.64 effect on relationship …. 11.64 variation, notice to terminate compared with …. 6.13, 11.9, 11.10 withdrawal of …. 11.8, 11.68, 11.69 No profit rule (misuse of position) after hours conduct …. 7.85 applications, various competing with employer …. 7.50, 7.51, 7.78, 7.83, 7.84, 7.91–7.93 misappropriation of property …. 7.50 misuse of non-confidential information …. 7.58, 7.83 resigning to acquire a business opportunity …. 7.91–7.93 receipt of secret payments …. 7.50, 7.94–7.95, 7.97 aspect of duty of fidelity …. 7.33 detriment to employer or advantaging employee …. 7.65, 7.66 express terms modifying …. 7.41 inventions, applied to …. 7.102 improper use of position …. 7.51 nature of duties co-extensive duties, largely …. 7.44 co-existence of …. 7.40, contractual …. 7.33, 7.50 fiduciary …. 7.33, 7.50, relationship between …. 7.33 statutory …. 7.50, 7.51 rule stated …. 7.33, 7.50 remedies for breach …. 7.50 scope of …. 7.11, 7.50, 7.79 No work — no pay principle see Earning wages Novation assignment, distinguished …. 6.38 effect of …. 6.38 employment contract, of …. 6.3, 6.4, 6.13 intention of parties …. 6.39 meaning of …. 6.37 promotion of employee …. 6.39 termination by agreement, compared with …. 11.81 variation, distinguished …. 6.4, 6.38

O Obedience answering questions from employer see Answering questions and disclosing wrongdoing breach of duty, consequences …. 7.17 control and …. 7.12, duration of duty …. 7.12 duty …. 7.12, 7.63 history …. 1.28, 1.43 intermediate term …. 7.17 insolence, compared with …. 7.17, 7.137 lawful order crimes and torts, directions to commit …. 7.12, 8.34 unauthorised direction …. 7.13 misuse of employer’s time …. 7.87 safety, directions affecting…. 7.13, 7.16 scope of employment, duty limited by …. 6.10, 6.11, 7.5 servility and …. 7.12 statutory and award modification …. 7.13 unreasonable directions, of …. 7.14, 7.15 wilfulness of breach …. 7.137, 10.52 Obligations concurrent …. 9.14 dependent …. 9.14 divisible …. 9.26, 9.27, 9.28 entire …. 9.22–9.31 Apportionment Acts …. 9.32 common law entire obligation rule …. 9.29, 9.30, 9.31 independent …. 9.14 remuneration, to pay …. 9.14 Offer and acceptance acceptance conduct, by …. 3.25, 3.26, 3.27 continued employment …. 3.27, 6.24, 6.25, 6.48 communication of …. 3.22 correspondence with offer …. 3.20

definition …. 3.19, 6.23 modes of acceptance …. 3.23 postal acceptance rule …. 3.24 reliance on offer …. 3.21 time for …. 3.19 unequivocal assent and …. 3.19 vary, of offer to …. 6.23 when effective …. 3.24 agreement absent offer and acceptance …. 3.3 counter-offers …. 3.18, 3.20, 3.23 history of …. 3.3 necessity for …. 3.3 objective approach to …. 3.5, 3.6 offer authority to make and agents …. 3.13, 3.14 communication of …. 3.13 conditional …. 3.15, 3.16 definition …. 3.8 death and …. 3.16 generally …. 3.8–3.18 intention to make …. 3.9, 3.10, 3.11, 3.12 recipients of …. 3.12 rejection of offer …. 3.18 revocation of offer …. 3.16, 3.17 termination of offer …. 3.16 Office and officers control …. 2.35 coercive and declaratory relief …. 15.23, 15.99, 15.108, 15.112 meaning …. 2.35, 2.39 public sector, in …. 2.39, 11.29–11.31, 15.108 remuneration, earning …. 9.14, 10.64, 14.41 resignation and tenure …. 11.4, 11.21, 11.30, 11.70 statutory and ‘special’ contract of …. 2.36 wrongful dismissal …. 9.14, 10.64, 11.30, 14.41 Onus of proof breach of contract …. 10.42, 14.24 duress …. 4.6

frustration of contract …. 12.48 illegality …. 4.23 mitigation of loss …. 14.99 repudiation …. 10.25, 10.42 right to terminate …. 10.42 restraint of trade …. 16.16 Ownership inventions …. 7.102 product of the work …. 1.7, 7.101

P Parental leave see Leave Parol evidence rule and construction admissibility of evidence about factual and legal matrix …. 2.32, 5.9–5.11 formation of the contract …. 5.23, 5.24 implied terms …. 5.24 meaning of words used …. 5.9, 5.10, 5.25 nature of the relationship …. 2.30, 2.31 prior negotiations …. 5.9, 5.21 intention, objective …. 5.10, 5.11 intention, subjective …. 5.22 shams …. 2.31, 5.14, 5.17, 5.23 subject matter of agreement, proving …. 5.21, 5.25 subsequent conduct …. 2.30–2.32, 5.9, 5.14, 5.23 surrounding circumstances …. 5.9–5.11 ambiguity, where …. 2.31, 5.10, 5.21 extrinsic evidence written document is complete, when …. 2.30, 5.15 written document is incomplete, when …. 2.31, 5.13, 5.14, 5.21 written agreement made after oral agreements collateral contracts …. 5.19 entire agreement clauses …. 5.20, 8.22 integration of the contract …. 5.18, 5.20 shams …. 5.17 Partnership

changes in constitution of …. 13.30–13.32 death of partner …. 12.25, 13.33 definition and nature …. 2.41, 13.30 dissolution …. 13.30–13.32 employee as …. 1.6, 2.21, 2.41 Pay see Wages Payments in lieu of notice agreed redundancy payments …. 14.104 breach of contract …. 11.75, 11.78, 11.79 consequences of …. 11.78, 11.79 deductibility from damages of …. 14.125 express contractual term …. 11.73, 14.103 four types of …. 11.71–11.76, 14.101 ‘garden leave’ …. 11.72, 14.102 payment on account of damages …. 11.75, 14.105 termination on payment of agreed sum …. 14.104 express term permitting …. 11.73, 14.103 mitigation of loss and fixed term employees …. 14.106 ‘garden leave’ …. 14.102 payment on account of damages …. 14.105 termination on payment of agreed sum …. 11.74, 14.104 termination payment owed as debt …. 14.103 notice of termination …. 14.105 overview …. 11.71–11.76, 13.24 right to …. 8.3, 11.77 Performance actual service necessary …. 9.9 control of see Control delegated see Vicarious performance defective …. 9.2, 9.7, 9.35 duration of to earn wages see Earning wages exact …. 9.7, 9.35, 9.36 legal right to …. 15.42 order of see Earning wages part performance see Earning wages personal performance see Vicarious performance

readiness and willingness to serve see Readiness and willingness substantial …. 9.4, 9.7, 9.35 suspension of …. 9.5, 9.57–9.62 time for …. 9.55 vicarious performance see Vicarious performance wages, to earn see Earning wages Penalty clauses see Agreed damages clauses Permanent employment construction of …. 11.21 contract for …. 11.14, 11.22 reasonable notice, implication of …. 11.48, 11.49 slavery …. 11.22 Personal leave see Leave Personal nature of employment contract assignment, and …. 6.40 corporation as employee …. 2.3 death, and …. 3.16, 12.24, 13.33 delegated performance …. 2.17, 9.53 humanity …. 11.12, 11.59 partner as employee …. 2.41 restraint of trade …. 16.7 specific performance …. 15.30 trust and confidence …. 8.13, 8.17 undisclosed principals …. 3.84 vicarious performance …. 9.53 Pieceworkers consideration …. 3.31 loss of chance to earn remuneration …. 2.9, 14.56 mutuality …. 3.31 obligation to provide work to continue in business, employer’s promise to …. 8.45 generally …. 5.61, 8.42–8.45 mutuality …. 8.46 reasonable amount of work …. 8.43 payment per item produced …. 3.31 Policy and practice binding, not necessarily …. 5.26, 5.38, 5.99

crystallised custom …. 5.75, 5.76, 5.103 custom, distinguished from terms implied by …. 5.67, 5.69, 5.77, 5.78 formation of contract, relevance in …. 5.23, 5.24 implied by course of dealing, term …. 5.31 length of notice …. 11.60 managerial prerogative, determining scope of …. 6.16 policy manuals orders, containing …. 7.14, 5.35 terms incorporated by notice, as …. 5.30, 5.35 terms incorporated by reference, as …. 5.35, 5.36 terms incorporated by signature, as …. 5.28, 5.35 practice of applying industrial instrument …. 5.95, 5.99 practice of applying policy …. 5.38, 5.95 scope of employment, determining the …. 6.10, 7.8 trust and confidence term …. 8.24 United Kingdom, in …. 5.78 variation through …. 6.24, 6.48 Poor Laws constructive service …. 8.38, 9.10 dispensation and dissolution of service …. 1.39 overview …. 1.29 paupers, supporting …. 1.29 service and settlement …. 1.29, 1.38, 1.39, 8.38 Positive stipulations see Injunctions Power disparity in employment consideration …. 3.36, 6.34 duress, relevance in proving …. 4.2, 4.5 economic dependence of the employee …. 2.7–2.12 intention, ascertaining …. 3.6 restraint of trade …. 16.10–16.13, 16.29 trust and confidence term …. 8.17 unconscionability …. 4.10, 4.11 undue influence …. 4.14 Practice of employer see Policy and practice Probation periods see Termination by notice Procedural fairness see also Job security clauses damages for breach …. 14.61, 14.62

disciplinary procedures …. 11.15 effect of breach …. 11.66 injunctions to enforce …. 15.22, 15.23 obligation of employer to provide …. 8.26, 11.34 procedure specified in contract …. 11.15, 11.16 public sector employees’ entitlement to …. 11.33, 11.34 suspended employee, for …. 9.61 Property see Misappropriation of property rule Provide work see Right to Work Principals see Agents Privity agents, contract formed through …. 3.64, 5.110 assignment as exception to …. 3.64, 6.40 collective agreements …. 5.109, 5.110 doctrine of …. 3.2, 3.61–3.64, 5.109 Public holidays see National Employment Standards Public performers damages for failing to provide work …. 14.91 meaning …. 8.40 obligation to provide work …. 8.40 special services, injunctions to enforce …. 15.32 Public sector and Crown employment see also Judicial review authority to contract …. 3.68, 3.78, 5.93 capacity to contract …. 3.68, 5.93 confidentiality of information …. 7.131 contracting out of protections …. 5.93, 11.29 Crown capacity to contract …. 3.68, 5.93 citizens may be compelled to serve …. 5.91 dismiss, common law right to …. 5.91, 6.14, 11.29, 11.30 employees of …. 1.4, 3.68, 5.92, 11.29 military officers …. 11.29 modification of rights by contract …. 5.91, 11.29, 11.30 modification of rights by statute …. 5.91, 11.29, 11.30 nature of contract with …. 3.68, 5.92, 11.29 police officers …. 11.29 rights under common law and statute …. 5.91

servants …. 1.4, 3.68, 5.92 suspension, common law right to …. 5.91, 9.60 demotion …. 6.14 disciplinary procedure …. 11.33 dismissal at pleasure …. 5.91, 11.29, 11.30 grounds of …. 11.14, 11.31, 11.32 effect when independent obligation to pay salary …. 14.41 judicial review and …. 11.30, 15.110–15.114 see Judicial review modification of dismissal at pleasure rule …. 11.29, 11.30 wrongful …. 11.35, 14.41, 15.112, 15.113 equitable relief and …. 15.104 intellectual property …. 7.102, 7.110 judicial review of employment decisions …. 11.30, 15.105–15.113 see Judicial review notice, statutory right to …. 8.3, 11.36, 11.37 number of …. 11.28 prevention from performing duties …. 11.35, 14.41 procedural fairness, entitlement to …. 11.30, 11.33, 11.34 public sector statutes protecting …. 11.16 statutes governing …. 5.92, 5.93 statutory corporations, capacity to contract …. 3.67 suspension Crown’s right to suspend …. 5.91, 9.60 public sector employment …. 9.61 wrongful …. 9.62, 11.35, 15.112, 15.113 terms common law and statute …. 5.91 consistency with statute …. 5.92, 5.93, 11.29 contractual …. 5.92 implied terms …. 5.91, 5.92 inconsistency between contractual terms and statute …. 5.93, 11.29 statute …. 5.92 trust and confidence …. 8.26 wrongful dismissal …. 11.35, 14.61, 15.112, 15.113 wrongful suspension …. 15.112, 15.113

Q Questions see Answering questions and disclosing wrongdoing

R Readiness and willingness absence of …. 10.26, 10.27 equitable relief, effect on …. 10.27, 15.52 loss of right to terminate …. 10.27, 10.96, 10.104 meaning of …. 10.26 part performance …. 9.44 repudiation and …. 10.26, 10.27 wages, earning generally …. 9.9, 9.17–9.21, 9.44 heterodox view …. 9.19–9.21 orthodox view …. 9.18, 9.20 wrongful dismissal, after …. 9.44, 14.38 Reasonable notice different for employer and employee, may be …. 11.5, 11.50, 11.52 factors accorded little or no weight …. 11.60 actions of the parties after notice given …. 11.61 award and statutory notice provisions …. 11.60 circumstances of dismissal …. 11.62 defensible reason for the termination …. 11.59 impecuniosity of the employer …. 11.61 opinions of parties …. 11.61 personal relationship …. 11.61 practices and customs …. 11.60 regularity of payment …. 11.47, 11.53, 11.60 factors principally considered age and health of employee …. 11.59 benefits foregone in accepting position …. 11.59 length of service …. 11.57, 11.58 nature of employment …. 11.59 obtaining suitable alternative employment …. 11.59, 11.62 remuneration and qualifications …. 11.57

seniority and importance of position …. 11.57 service, length of …. 11.58 fixed term contracts, in …. 11.18 guide …. 11.55 historical comparisons, difficulties in using …. 11.53, 11.54 historical development …. 11.40–11.44 implication of term relationship with other terms …. 11.48–11.51 relationship with statutory rights …. 11.39, 11.48, 11.50, 11.51 term implied …. 11.45, 11.48 when implied …. 11.5, 11.18 increase in length of …. 11.55 purpose of …. 11.52, 11.56, 11.58 question of fact …. 11.52 term of employment …. 11.46 Rectification equitable remedy …. 4.20 recording of contract terms …. 2.29, 4.20 unilateral mistake for …. 4.21 written terms, of …. 4.20 Redundancy consultation rights under industrial instruments …. 13.12 rights under Fair Work Act …. 13.12 General Employee Entitlements and Redundancy Scheme (GEERS) claims under …. 13.25 establishment of …. 13.25 meaning of abolition of employee’s job …. 13.4 Fair Work Act, in …. 13.3 generally …. 13.3 ‘no longer requires’ …. 13.6 position redundant …. 13.6 redistribution of employee’s duties …. 13.5 suitable alternative employment …. 13.5 notice and deductibility of …. 14.125–14.128

payments in lieu, as …. 14.104 pay calculation of …. 13.10 contractual right to …. 13.8 employer policies and practice …. 5.38, 5.67, 5.78, 13.8 statutory right to …. 8.3, 13.9–13.11 purpose …. 13.7, 14.127 priority in insolvency …. 13.23 selection procedures …. 5.45, 6.16 taxation and …. 14.29 voluntary redundancies …. 11.80, 11.81 References accuracy …. 16.56 duty owed by employer …. 16.56 false positive, action where …. 16.55 general …. 16.51 importance of …. 16.50 negligent provision of …. 16.53 obligation to provide …. 16.52 reasonable care in giving …. 16.56 specific …. 16.51 third parties, information provided to …. 16.57 types …. 16.50 Remedies adequacy of, other than damages …. 15.50 damages see Damages declarations see Declarations election by employer …. 15.124 equitable see Equitable remedies express terms governing …. 15.51 injunctions see Injunctions specific performance see Specific performance Remoteness see Damages Remuneration see Wages changing, as breach of contract …. 6.17 Fair Work Act and …. 9.39 independent obligations to pay …. 9.13

industrial action and …. 9.39 mode of …. 2.9 non-wage remuneration, earning …. 9.14 performance-based pay …. 8.42 Repudiation anticipatory breach …. 10.10, 10.24 consequences of affirmation following …. 10.72 automatic termination, no …. 10.23, 10.60 damages …. 10.68, 10.72 effect on employment relationship …. 10.63 effect on remuneration where independent obligation …. 10.64 effect on wages where service continues …. 10.62 effect on wages where service terminates …. 10.63–10.65 equitable relief …. 10.23, 10.68 right to elect to terminate or affirm …. 10.23, 10.38, 10.77, 10.104 constructive dismissal …. 10.5, 10.7, 10.35, 10.36 erroneous construction based on …. 6.16, 10.30, 10.31 generally …. 10.21–10.34 inability to perform actual inability …. 10.33 declaration of inability …. 10.34 generally …. 10.32–10.34 seriousness of …. 10.43 inference of …. 10.25, 10.31 industrial action …. 7.4 intention …. 10.31, 10.50–10.53 onus of proof …. 10.25, 10.85 overview and meaning …. 10.3–10.6, 10.21 notice and …. 10.11 readiness, willingness and ability to perform absence of …. 10.26, 10.27 equitable relief, effect on …. 10.27 meaning of …. 10.26 when ready and willing …. 10.26 refusal to perform contract absence of …. 10.27 based on words or conduct …. 10.28

complete or partial …. 10.29, 10.44 erroneous construction based on …. 6.16, 10.30, 10.31 express or implied …. 10.28 generally …. 10.9, 10.22 readiness and willingness to perform, absence of …. 10.26 seriousness of …. 10.43 retraction of …. 10.31, 10.66, 10.67, 11.69 serious breach as evidence of …. 10.9, 10.44, 10.57 relationship with …. 10.8, 10.9, 10.41 seriousness of the repudiation consequences of conduct …. 10.16, 10.48, 10.49 cumulative breaches and repudiation …. 10.9, 10.55–10.57 generally …. 10.38–10.59 identified obligation repudiated …. 10.41 intention …. 10.52 intermediate terms, repudiation of …. 10.17 nature of …. 10.46 onus and standard of proof …. 10.42 orders, repudiation of duty to obey …. 7.17 last straw principles …. 8.21, 10.58–10.59 prospective breach …. 10.44 relationship between parties …. 10.47 right to terminate …. 6.2, 6.13, 10.3, 10.38 stress and stigma, relevance of …. 10.49 test …. 10.40, 10.46 wilful repudiation …. 10.52 short notice …. 11.12, 11.69, termination for see also Termination for breach and repudiation types of inability to perform …. 10.22 refusal to perform …. 10.22 wilfulness …. 10.50–10.53 Renunciation see Termination for breach and repudiation Representations breach of …. 5.3, 5.6–5.8 determining whether statement is …. 5.6–5.8

misleading or deceptive …. 4.32–4.41, 5.6 oral, and later written terms …. 5.16–5.20 terms, distinguished from promissory …. 5.3, 5.6–5.8, 5.45 Reputation see Damages Resignation acceptance by employer …. 11.4 distress, uttered in …. 11.12 constructive dismissal see Repudiation forced …. 10.35, 10.37 intention …. 11.7, 11.12 tendering …. 11.4 withdrawal of …. 11.70 wrongful, futility of affirming where …. 10.82 Restitution damages in restitution …. 14.12 duress …. 4.7 mistake …. 4.16, 4.19 restitution damages …. 14.12, 14.42, 14.43 Restraint of trade assignment of covenant …. 6.41, 6.43 cascading protections …. 16.22 competition, protection from …. 16.25, 16.26 confidentiality obligations post-employment and …. 7.120, 16.25, 16.26 customer connection acts that can be restrained …. 16.31 area of restraint …. 16.35 connection protected …. 16.30, 16.34 duration of protection …. 16.30, 16.32 duration …. 16.28, 16.30, 16.32 employment, after …. 10.76 employment, during …. 16.28 exclusive service clauses …. 7.77, 16.29 geographical restraints …. 16.35 illegal contracts …. 4.24 implied term …. 5.60 injunctions …. 15.88 duration …. 16.19

exclusive service clauses …. 15.28, 16.19 restraining breaches …. 16.18 scope …. 16.19 springboard injunctions and …. 15.90 when employer in breach…10.68, 14.39, 15.52 interpretation careful scrutiny by courts …. 16.10 how reasonableness judged …. 16.9 invalidity consequences of …. 16.17 presumption of …. 16.16 negative stipulations …. 15.28 onus of proof …. 16.16 operation of clause …. 16.4 personal nature of contract …. 1.6 post-employment obligations …. 16.2 protectable interests …. 16.25–16.40 competition …. 16.25, 16.26 customer connection …. 16.30–16.35 during employment …. 16.28, 16.29 inventions …. 7.102 stable workforce …. 16.36 trade secrets …. 16.38–40 reasonableness of …. 1.14, 16.7, 16.8 assessing …. 16.11, 16.12, 16.25 changes after formation of contract …. 16.15 consideration, adequacy of …. 16.11, 16.12 harshness of bargain …. 16.13 inequality of power …. 1.14, 16.11, 16.13 interests of the parties …. 16.7 public interest, in …. 16.8 timing …. 16.14 restraint, meaning …. 16.3 Restraints of Trade Act (NSW) …. 16.24 scope …. 16.30 severance …. 3.37, 3.60, 16.20 blue pencil test …. 16.21

cascading protections …. 16.22 independent promises …. 16.23 stable workforce, maintaining …. 16.36 test …. 16.6 trade, meaning of …. 16.3 trade secrets acts that can be restrained …. 16.40 protectable secrets …. 16.39 types of restraints …. 16.5 unreasonable term …. 16.17 severance of …. 16.20 void, illegal or unenforceable terms …. 16.17 Right to work breach of duty, effect of …. 8.44, 8.49 commission, earning remuneration through …. 8.42–8.45 commission, payment by continue in business, employer’s promise to …. 8.45 generally …. 5.61, 8.42–8.45 mutuality …. 8.46 reasonable amount of work …. 8.43, 8.44 critique of general rule …. 8.50–8.55 denial of available work …. 8.53, 8.54 garden leave, during …. 8.54 job satisfaction …. 8.52 performance benefits both parties …. 8.51 positive right to work? …. 8.50 reformulations of general rule …. 8.50 damages for breach …. 14.91 demotion as breach …. 6.15, 8.48 history …. 1.39, 8.37, 8.38 express terms …. 8.39 general rule …. 8.37 implicit terms …. 8.39 implied in law or fact, terms …. 5.52 pieceworkers continue in business, employer’s promise to …. 8.45 generally …. 5.61, 8.42–8.45

mutuality …. 8.46 reasonable amount of work …. 8.43 public performers damages for failing to provide work …. 14.91 meaning …. 8.40 obligation to provide work …. 8.40 specific duties meaning …. 8.47 obligation to provide work …. 8.47, 8.48 unique office …. 8.48 skilled employees …. 8.40, 8.41 traditional approach …. 8.37 trainees and training career and skills development …. 1.18, 6.15, 7.89, 8.40, 8.41, 11.3 skilled employees …. 8.40, 8.41

S Scope of employment altered by agreement …. 7.8, 7.77 acts outside of hours …. 7.10, 7.11 business activities of employer …. 7.7, 7.49, 7.78 connection with employment competition with employer …. 7.35, 7.42, 7.49, 7.77, 7.78 inventions …. 6.11, 7.9, 7.106, 7.107, 7.38, 7.101, 7.103, 7.107 secret benefits …. 7.96, 7.97 course of dealings between parties, definition by …. 6.10, 6.11, 7.6, 7.8, 7.9, 7.106, 7.107 course of employment …. 7.5, 7.9, 7.11 duties of employee …. 7.5, 7.7, 7.46–7.49 implied duties defined by acts incompatible with employment …. 7.5, 7.140 answering questions …. 7.5, 7.22 confidence, duty of …. 7.11, 7.123 conflict of duties rule …. 7.5, 7.35, 7.42, 7.49, 7.78 conflict of interest rule …. 7.7, 7.35, 7.42, 7.78, 7.79 duty to invent …. 6.11, 7.7, 7.9, 7.106, 7.107, 7.38, 7.101, 7.103–7.107

misappropriation of property …. 7.42, 7.52, 7.54, 7.79 no profit rule …. 7.11, 7.50, 7.79 obedience …. 6.10, 6.11, 7.5 emergencies and exigencies, dealing with …. 6.12 express terms and duties …. 7.6, 7.8, 7.104, 7.105, 7.107, 7.114, 7.119, 7.120 managerial prerogative defined by …. 6.10, 6.11 meaning …. 7.6 nature of engagement and …. 7.6, 7.7, 7.35, 7.42, 7.49, 7.103, 7.104 Seal corporate seal rule …. 3.86 rules governing use of …. 3.87 Secret benefits applications of duties of fidelity conflict of duties rule …. 7.47 misappropriation of property rule …. 7.52 no profit rule …. 7.50, 7.94 statutory duty …. 7.94 consequences of receiving …. 7.98 criminal offence …. 7.95 remedies to recover …. 7.99 right to terminate …. 7.100 tort by donor …. 7.95 employment, connection with …. 7.96, 7.97 generally …. 7.95–7.100 secrecy and informed consent …. 7.98 types of secret benefits …. 7.96 who must account …. 7.35 Self-employment see Employment contract Self-esteem see Dignity Serious breach consequences of automatic termination, no …. 10.60 damages …. 10.68, 10.72 effect on employment relationship …. 10.63 effect on remuneration where independent obligation …. 10.64 effect on wages where service continues …. 10.62

effect on wages where service terminates …. 10.63–10.65 equitable relief …. 10.23, 10.68 right to terminate …. 10.77, 10.104 evidence of repudiation, as …. 10.9, 10.44, 10.57 industrial action …. 7.3 intention …. 10.50, 10.52 meaning …. 10.7, 10.12 overview …. 10.3–10.6 proof …. 10.12, 10.13, 10.42, 10.85 relationship with repudiation …. 10.8, 10.9, 10.41 retract, no right to …. 10.67 seriousness of the breach consequences of conduct …. 10.16, 10.48, 10.49 cumulative breaches …. 10.9, 10.55–10.57 generally …. 10.38–10.59 identified obligation breached …. 10.41 intention …. 10.52 intermediate terms, breach of …. 10.17 nature of …. 10.46 onus and standard of proof …. 10.42 orders, breach of duty to obey …. 7.17 last straw principles …. 8.21, 10.58–10.59 prospective breach …. 10.44 relationship between parties …. 10.47 right to terminate …. 6.2, 6.13, 10.3, 10.38 single breaches …. 7.17, 8.21, 10.54 stress and stigma, relevance of …. 10.49 terminating party, by …. 10.104 test …. 10.40, 10.46 wilful breaches …. 10.50, 10.52, 10.53 Servants see Master and servant model Service dispensation with …. 7.2 duty of employee to serve …. 7.3, 9.11 contractual not fiduciary duty …. 7.2 duty to cooperate and …. 7.2 wrongful dismissal, after …. 7.2

faithful service, compared with …. 7.2 industrial action …. 7.3, 7.4 mutuality and casual employees …. 3.32 non-wage remuneration, earning by …. 9.14 personal performance see Vicarious performance readiness and willingness of employee see Readiness and willingness wages earned by see Earning wages Set-off equitable …. 9.51, 9.52 Fair Work Act, under …. 9.52 statutory …. 9.51 Severance blue pencil test …. 16.21 cascading protections …. 16.22 generally …. 3.37, 3.60, 16.20 independent promises …. 16.23 Shams common intention to mislead …. 2.25 meaning …. 2.21, 2.23, 2.25, 5.17 proving …. 2.25, 5.14, 5.23 Sick leave see Leave Skill and care see Employee’s duty of care, Employer’s duty of care Slavery and servility assignment of service …. 6.42, 6.44, 6.45 contract for …. 4.25 freedom of contract …. 1.26, 1.34, 1.37, 6.45 history Australia, in …. 1.32 freedom of contract …. 1.26, 1.31–1.34, 1.37 indentured service …. 1.32 Master and servant model …. 1.33 myth …. 1.24 Pacific Islanders …. 1.32 serfs …. 1.31 slaves in Britain …. 1.31 status to contract …. 1.24 notice, right to give …. 11.4

obedience to directions …. 7.12 permanent employment …. 11.22 specific performance …. 15.18 terminate, right to …. 7.89, 11.3, 16.2, 16.42 vicarious performance …. 9.58 Specific duties meaning …. 8.47 obligation to provide work …. 8.47, 8.48 unique office …. 8.48 Specific performance adequacy of damages adequacy of other remedies …. 15.50 common irrecoverable damages …. 15.45, 15.49 difficulties in quantification …. 15.48 express terms governing remedies …. 15.51 generally …. 15.41–15.51 irreparable harm …. 15.42 non-monetary benefits of employment …. 15.46 relevance in determining if right to terminate …. 10.48 when contract terminable by notice …. 15.43 considerations weighing against adequacy of damages …. 15.41–15.51 constant supervision …. 15.17 mutuality, absence of …. 15.17 slavery and liberty …. 15.18 trust and confidence, need to retain …. 15.35–15.40 contractually agreed termination procedures …. 15.22, 15.23 definition and types …. 15.6 discretionary nature …. 15.5 election between inconsistent remedies …. 15.65 enforcing the order …. 15.67 equitable defences and other discretionary considerations see Equitable defences form of relief …. 15.10, 15.11, 15.24, 15.66 historical background …. 15.2 job security provisions …. 15.22, 15.23 modern rule governing

exceptional circumstances approach …. 15.20, 15.21 generally …. 15.20 principled approach …. 15.20, 15.21 prerequisites to relief actual or threatened breach of a right …. 15.14 enforceable contract …. 15.12 subsisting contract …. 15.13, 15.52 reinstatement and …. 15.10, 15.11 slavery and liberty …. 15.18 traditional rule against bilateral termination theory and …. 15.19 demise of the traditional rule …. 15.15 historical background …. 15.2 ‘jurisdiction’ to grant …. 15.15 reasons supporting …. 15.17 statement of traditional rule …. 15.17 trust and confidence meaning of …. 15.37 need for sufficient …. 15.35 proof of loss meaning of …. 15.40 United Kingdom, in …. 15.19 Specified task contracts see Fixed term contracts Specified term contracts see Fixed term contracts Standing down employees under Fair Work Act …. 9.63 Status see Demotion, Right to work Status to contract see Master and servant model Statutes and statutory rights contravention, effect of …. 4.27–4.31 contracts prohibited by …. 4.22, 4.27–4.30, 5.83 Crown employment see Public sector and Crown employment employment, governing …. 1.16 Fair Work Act see Fair Work Act generally …. 1.16, 5.82, 5.94 independent obligations to pay wages under …. 9.16 national system employees see Fair Work Act and National system employment

notice to, relationship with contract, 11.51 public sector employment see Public sector and Crown employment remedies, exclusive regulation of …. 5.94 superannuation …. 5.94 wages, statutory modification of obligation to pay …. 9.15 Statutory compensation ACL, under …. 14.32–14.34 aggravated damages …. 14.84 causation …. 14.34 compensatory purpose: …. 14.33 damage to reputation …. 14.34 discriminatory dismissals, for …. 14.32–14.34 Fair Work Act, for breach of …. 14.32–14.34 loss of chance …. 14.34, 14.63 mental distress …. 14.34 mitigation and …. 14.33 punitive damages: …. 14.16, 14.34 Stigma damages see Damages Superannuation assessment of damages and …. 14.121 priority of …. 13.23 statutory right, as …. 5.94 Suspension Crown’s right to suspend …. 9.60 effect of invalid …. 9.62 effect of valid …. 9.60, 9.62 express right …. 9.58, 9.59 garden leave …. 9.59 general rule …. 9.57 good faith, duty of …. 8.29 implied right …. 9.59 industrial action …. 7.3, 9.59 performance, of …. 9.57 procedural fairness before …. 9.61 public sector statutes …. 9.61 other doctrines distinguished …. 9.59 standing down employees …. 9.63

statutory powers of …. 9.60 Trust and confidence term …. 8.23

T Taxation avoidance of …. 4.24, 4.30 damages, award of …. 14.30 redundancy payments, of …. 14.29 remuneration, deduction from …. 2.20 termination payments, of …. 14.29 Tenant see Employment contract Termination by agreement generally …. 11.80, 11.81 novation compared with …. 11.81 other types of termination distinguished …. 11.80, 11.81 variation of notice, compared with …. 11.81 voluntary redundancy notice, acceptance of …. 11.81 Termination by notice complying with terms of contract or statute effect on contract …. 11.64 effect on relationship …. 11.64 complying with terms of contract or statute, not earning wages after …. 11.65 effect on contract …. 11.12, 11.65, 11.66 effect of breach of statute …. 11.35, 11.67 effect on relationship …. 11.65 short notice …. 11.12, 11.65 emotional distress, giving notice in state of …. 11.12 exercise of right to give emotional distress, in state of …. 11.12 rectification of breach, prior to …. 11.17 right to give …. 11.2 express contractual right to give, exercise of grounds of termination, terms limiting …. 11.14 rectification of breach, prior to …. 11.17 serious breach, augments termination for …. 11.13

express terms (put in notice) limiting grounds for termination …. 11.14 probation periods …. 11.5 procedure for notice, governing …. 11.15 sickness and disability schemes …. 11.27 serious breach, augments termination for …. 11.13 Fair Work Act, under effect of contravention …. 11.67 employees covered and excluded …. 11.38 express and implied terms, relationship with …. 11.39, 11.51 length of notice …. 11.37 notice, right to …. 8.3, 11.6, 11.36, 11.37 written notice …. 11.6 fixed term contracts continued employment after expiration …. 11.19 meaning and operation …. 11.18 termination of …. 11.19 formalities certainty of …. 11.7 clarity …. 11.7, 11.12 conditional notice …. 11.8, 11.9 Fair Work Act, under …. 11.6 receipt of notice …. 11.6 unambiguous terms …. 11.12 written or oral …. 11.6, 11.18, 11.39 grounds of termination common law …. 11.23, 11.25 fixed term contract, in …. 11.14 good faith term …. 8.29, 11.25, 11.26 permanent employees, for …. 11.14 public sector statutes, specified in …. 11.14, 11.31, 11.32 terms limiting, express …. 11.14 terms limiting, implied …. 11.24, 11.25, 11.26 industrial instruments, under awards, in …. 11.38, 11.51 intention to terminate or give notice continue employment, compared …. 11.10 objective approach …. 11.9, 11.12

resign, to …. 11.7, 11.12 invalid notice earning wages after …. 11.65 effect on contract …. 11.12, 11.65, 11.66 effect of breach of statute …. 11.35, 11.67 effect on relationship …. 11.65 short notice …. 11.12, 11.65 length of notice different for employer and employee, may be …. 11.5, 11.50, 11.52 Fair Work Act, under …. 11.36–11.39, 11.51, 11.60 periodic hirings …. 11.46, 11.47 reasonable notice see Reasonable notice term of employment and …. 11.46, 11.47, 11.53, 11.60 limits on right to terminate disciplinary procedures …. 11.15, 11.16 express contractual …. 11.13 good faith, duty of …. 8.29, 11.12, 11.24, 11.25, 11.26 grounds specified …. 11.14 implied contractual …. 11.25, 11.26 injunctions to enforce …. 15.22, 15.23 procedure specified …. 11.15, 11.16 procedural fairness …. 8.26, 11.23, 11.24, 11.33, 11.34 redundancy procedures …. 11.6 trust and confidence term …. 8.26, 11.24 notice, giving agents in, role of …. 11.11 authority to give and receive …. 11.11, 11.16, 11.23 compulsory winding up order, as …. 11.70 damages, adequacy of …. 15.44 fiduciary power, not exercise of …. 11.3 notice to vary, distinguished …. 11.9, 11.10 reasonable notice see Reasonable notice slavery and …. 11.4 payment in lieu see Payments in lieu permanent employment …. 11.18 probation periods …. 11.5 procedure when terminating employment

decision to terminate by third party …. 10.20, 11.16, 11.23 disciplinary procedures …. 11.15 effect of breach …. 11.66 injunctions to enforce …. 15.22, 15.23 procedure specified in contract …. 11.15, 11.16 procedural fairness …. 11.23, 11.24 public sector employment, in …. 11.33, 11.34 redundancy procedures …. 11.6 trust and confidence, term …. 11.24 public sector employment limited grounds of termination …. 11.14, 11.31, 11.32 procedure governing termination …. 11.15, 11.16, 11.33, 11.34 reasons for notice or termination acquired after termination, knowledge …. 10.87 good faith term …. 11.25, 11.26 grounds for …. 11.25 provision of …. 11.23 reasonable notice see Reasonable notice rectification of breach …. 11.17 right to terminate by …. 11.3, 11.4 short notice effect of …. 11.65 repudiation as …. 11.12 specified task contracts …. 11.18 term of employment and notice …. 11.46, 11.47, 11.53 unilateral act …. 11.4 valid notice effect on contract …. 11.64 effect on relationship …. 11.64 variation, notice to terminate compared with …. 6.13, 11.9, 11.10 withdrawal of …. 11.8, 11.68, 11.69 Termination for breach and repudiation affirmation see Election after acquired information, as justification for …. 10.85, 10.87, 10.88 anticipatory breach …. 10.10 breach condition, of …. 10.12, 10.14, 10.16, 10.38

de minimis …. 10.12 intermediate term, of …. 10.12, 10.14, 10.17, 10.38 meaning …. 10.12 serious, meaning and proof …. 10.12, 10.13 warranty of …. 10.12, 10.14, 10.17 condition see Condition definitions anticipatory breach …. 10.10 breach …. 10.12 condition (or essential term) …. 10.7 intermediate (or innominate) term …. 10.7 justified termination (or dismissal) …. 10.7 non-essential terms …. 10.7 renunciation …. 10.7 repudiation …. 10.7 repudiatory breach …. 10.8 serious breach …. 10.7, 10.12 unjustified termination (or dismissal) …. 10.7 warranty …. 10.7 wrongful dismissal …. 10.7 wrongful resignation …. 10.7 election see Election express right to terminate…. 10.19, 10.38, 10.92 grounds for termination after acquired information …. 10.85, 10.87, 10.88 termination for invalid reason …. 10.86 historical background …. 1.40–1.43, 1.47, 10.1, 10.2 implied terms, breach of acts incompatible with employment …. 7.137 duty of fidelity …. 7.39 duty of indemnity …. 8.34 duty to provide work …. 8.49 duty to take care …. 7.28, 8.21, 8.56, 10.19, intermediate terms as …. 10.18 obedience to orders …. 7.17 receipt of secret benefits …. 7.100 trust and confidence …. 8.21

intermediate term see Intermediate term overview …. 10.3–10.6 misconduct degree of …. 10.6 mere, serious compared with …. 10.46 historical background …. 10.2 proof …. 10.42 serious, meaning of …. 10.5, 10.19, 10.39 seriousness of …. 10.38, 10.39, 10.41, 10.42, 10.45, 10.48 wilful …. 10.5, 10.53 right to terminate or affirm breach of condition …. 10.16, 10.38, 10.77 breach of a contractual condition …. 10.16, 10.19, 10.38, 10.44, 10.77 onus of proof …. 10.42, 10.85 opinion of employer …. 8.32, 10.10 repudiation …. 10.21, 10.77 serious breach of an intermediate term …. 10.17, 10.38, 10.77 statutory right …. 10.19 serious breach, relationship with repudiation …. 10.8, 10.41 seriousness of the breach or repudiation consequences of conduct …. 10.16, 10.48, 10.49 cumulative breaches …. 10.9, 10.55–10.57 generally …. 10.38–10.59 identified obligation breached or repudiated …. 10.41 intention …. 8.20, 10.52 intermediate terms, breach of …. 10.17 nature of …. 10.46 onus and standard of proof …. 10.42 orders, breach of duty to obey …. 7.17 last straw principles …. 8.21, 10.58–10.59 prospective breach …. 10.44 relationship between parties …. 10.47 repudiation, seriousness of …. 10.43 right to terminate …. 6.2, 6.13, 10.3, 10.38 single breaches …. 8.21, 10.54 stress and stigma, relevance of …. 10.49 terminating party, by …. 10.104

test …. 10.40, 10.46 wilful breaches …. 10.50, 10.52, 10.53 statutory right to terminate …. 10.19 termination see Election trust and confidence term see Trust and confidence warranty see Warranty Termination of contract see Abandonment, Cancellation, Death, Frustration, Insolvency, Novation, Redundancy, Resignation, Termination by agreement, Termination by notice, Termination for breach and repudiation Terms agreed damages see Agreed damages clauses ambiguity …. 5.10 binding …. 5.3, 5.6–5.8 bridging …. 5.36 conditions see Conditions construction of …. 5.9–5.24 determining whether statement is …. 5.8 essential …. 3.48 express see Express terms hierarchy of …. 5.3 implied see Implied terms intermediate terms see Intermediate terms informing employees of …. 5.4 implied obligation …. 5.5 statutory obligation …. 5.4, 8.11 interpretation of …. 3.7 meaning …. 5.3 non-essential …. 10.7 promissory …. 5.3, 5.6–5.8, 5.45 representations contrasted …. 5.3, 5.6–5.8 severance of see Severance statute, created by …. 5.3, 5.80 tripartite classification …. 10.14 vague …. 3.51 variation of see Variation warranty see Warranty

Terms implied by custom adoption in trade …. 5.69, 5.72, 5.74, 5.102 custom, role in employment law …. 5.66 crystallised custom …. 5.75, 5.76, 5.103 elements binding …. 5.73, 5.102 certain …. 5.70 consistent with express terms and statute …. 5.71 notorious …. 5.72, 5.74 reasonable …. 5.70 evolving and social nature of employment …. 5.79 generally …. 5.53–5.73 industrial instruments …. 5.102 intention …. 5.71, 5.72 length of notice …. 11.60 payment in lieu of notice …. 11.77 practice of employer, distinguished from …. 5.67, 5.69, 5.78 proof …. 5.68, 5.75 question of fact …. 5.68 rarity …. 5.74 test for implication …. 5.66 United Kingdom, in …. 5.78, 5.103 Terms implied in fact ad hoc nature of …. 5.54–5.56 business efficacy …. 5.61, 5.62 elements in formal contracts …. 5.57 clear …. 5.64 consistent with express terms …. 5.65, 6.19 necessary to make contract effective …. 5.61, 5.62, 5.101, 6.19 obvious …. 5.63 reasonable and equitable …. 5.60, 5.101, 6.19 generally …. 5.46, 5.53–5.65 implication process …. 5.55 implied in law, relationship with terms …. 5.52 industrial instruments …. 5.101 informal contracts, in …. 5.58 intention imputed, not actual …. 5.53, 5.55

industrial instruments …. 5.101 nature of …. 5.53 rarity of …. 5.54 United Kingdom, approach in …. 5.59, 6.20 Terms implied in law class of contract in which the term implied …. 5.51 express terms, consistency and relationship with …. 5.49, 8.22 generally …. 5.48–5.52 implied in fact, relationship with terms …. 5.51, 5.52 industrial instruments …. 5.100 modification …. 5.49 nature of contract itself, from …. 5.46, 5.48 necessary, must be …. 5.50, 8.22 policy foundation, 5.50 proof …. 5.48 Terms incorporated by a course of dealings course of dealings necessary …. 5.31, 5.32 dealings between the parties …. 5.33 express, not implied terms …. 5.31 Terms incorporated by notice contractual nature of document …. 5.30 industrial instruments …. 5.99 reasonable notice of the terms …. 5.30 Terms incorporated by reference apt for incorporation, whether terms are …. 5.44, 5.45 bridging terms generally …. 5.36 implied …. 5.37, 5.100 oral or written …. 5.37 external source documents alteration …. 5.41, 5.42, 6.7, 6.8 collective and enterprise agreements …. 5.39, 5.40 construction of contract …. 5.27, 5.45 contractual effect, intention to give …. 5.40 employer’s practice, effect of …. 5.38 termination …. 5.43 types and nature of …. 5.36, 5.40

industrial instruments …. 5.97–5.98 terms incorporated by notice, distinguished from …. 5.35 terms incorporated by signature, distinguished from …. 5.35 United Kingdom, in …. 5.39 Terms incorporated by signature signing, effect of …. 5.28 signing sham documents …. 5.28 where practice of ignoring signed terms …. 5.29 Third parties breach of equitable duty of fidelity, liability where …. 15.71 contract for benefit of, and privity …. 5.109 decision to terminate by …. 10.20, 11.16, 11.23 enforcement of contract by …. 3.62 equitable remedies against …. 15.68 knowing assistance in dishonest and fraudulent design …. 15.72 knowing receipt …. 15.74 knowingly inducing or procuring breach …. 15.73 Time for performance see Performance Trade secrets confidential information, distinguished …. 7.116, 16.41, 16.46 customer lists …. 16.48, 16.49 definition …. 16.41 duties of employees after termination contractual duty …. 16.43 duration of duty …. 16.43 duty defined …. 16.42 equitable duty …. 16.43 know-how and …. 16.42, 16.44–16.47 statutory duty …. 16.43 know-how, distinguished 16.41, 16.44–16.47 protecting, through restraint of trade …. 16.38–16.40 Trainees and training see Career and skills development Transfer of employment assignment of obligations …. 6.40–6.43, 13.13 under Fair Work Act …. 13.14 Triangular employment arrangements consideration …. 3.35

contract between client and employee …. 2.50–2.51 joint employment …. 2.52 labour hire …. 2.44, 2.49–2.51 Truck Act history …. 1.35, 9.48 provisions …. 9.47, 9.48 Trust and confidence breach of implied term accusations …. 8.19, 8.24, 8.25, 8.26 capricious conduct …. 8.16 consequences of …. 8.24, 8.27 damages for breach of …. 8.15, 14.73, 14.75, 14.77, 14.81 demotion …. 8.24 dishonesty and corruption …. 8.25 equal treatment …. 8.26 failures to respect rights …. 8.24 failures to investigate …. 8.25 future employment more difficult, making …. 14.88 harassment and humiliation …. 8.25 location, change in …. 6.18 procedural fairness …. 8.26, 11.24 questioning and inquiries …. 8.19, 8.25, 8.26 terminate, right to …. 8.21, 8.27 unilateral alteration of terms …. 5.42, 6.8 coercive relief …. 15.36 cooperation see Duty to cooperate damages for breach of …. 8.15, 14.73, 14.75, 14.77, 14.81 dismissals, application of implied term to …. 8.15 elements of implied term …. 8.13, 8.19 ‘in a manner calculated or likely’ …. 8.20 intention …. 8.20 required seriousness of conduct …. 8.21 without reasonable and proper cause …. 8.19 implied term condition, as a …. 8.27 nature of …. 8.14 support for …. 8.13

statement of term …. 1.10, 8.13 importance of …. 8.14, 15.35, 15.39 loss of consequences of …. 8.14, 15.35, 15.38 proof of …. 15.40 restoration of …. 15.39 meaning of trust and confidence …. 15.37 mutual duty …. 8.13, 8.14 personal relationship …. 8.14, 15.38 purpose and origin of implied term purpose …. 1.6, 8.16–8.18 origin …. 8.18, 7.136 scope …. 8.13 relationship of implied term with other terms acts incompatible with employment …. 7.136, 8.14, 8.18 duty of fidelity, distinguished …. 7.29, 8.16, 8.18 duty of good faith …. 8.16 express terms …. 8.14, 8.16, 8.22 fiduciary duty, distinguished …. 8.16 instruments and statutes, consistency with …. 8.22 qualification on express rights and powers …. 6.18, 8.23 sufficiency of trust and confidence …. 15.37

U Uncertainty acted on agreement, where parties have …. 3.49 cures for …. 3.59 essential term, uncertain …. 3.48 need for certainty …. 3.47, 3.51 overview …. 3.47 vague consideration …. 3.38 uncertain consideration …. 3.38 unilateral alteration of terms …. 6.8 vagueness distinguished …. 3.51 Unclean hands equitable defence …. 15.60

Unconscionable conduct broad and narrow sense …. 4.10 equitable doctrine of …. 1.14, 4.10 nature of …. 4.11 special disability …. 4.11 statutory remedies …. 4.10 statutory prohibition …. 4.13 transaction voidable, not void …. 4.1 unconscientious advantage, taking …. 4.12 Unclean hands see Equitable defences Undertakings see Injunctions Undue influence doctrine of …. 4.14 presumptions of …. 4.14 Fair Work Act, prohibition under …. 4.9 statutory unconscionability …. 4.13 transaction voidable, not void …. 4.1 Unfair dismissal Australia, in …. 14.94 compensation for …. 14.34 frustration of contracts and …. 12.30, 12.54 United Kingdom, in …. 14.94 Unincorporated associations capacity to contract …. 3.67 changes in constitution of …. 13.30 definition …. 3.69 employment by …. 3.69 Unions agent for members, as …. 3.73, 5.111 collective agreements negotiating …. 5.110–5.112 union-employer contract, as …. 5.104–5.109 delegates agent as …. 3.73 role of …. 3.74

V

Vagueness see Ambiguity Variation acceptance continued employment, inferred from …. 6.21, 6.24, 6.25, 6.48 offer to vary, of …. 6.22, 6.23 silence, inferred from …. 6.23, 6.25 trial period, for …. 6.23 affirmation delay in making …. 6.47 distinguished from …. 6.22, 6.46–6.48 agreement continued employment as …. 6.21 elements of …. 6.21 intention to vary …. 6.21 cooperation, duty of …. 8.33 consideration detriment or forbearance required …. 6.27, 6.31 difficulties created by the orthodox approach …. 6.28, 6.35 forbearance from exercising right to give notice …. 6.33, 6.35, 11.9, 11.10 fresh consideration …. 6.26, 6.27, 6.30 orthodox approach …. 6.26, 6.30 practical benefits …. 6.34, 6.35 promotions and additional duties …. 6.31 continued employment …. 6.24, 6.25, 6.48 notice to vary …. 6.13, 11.9, 11.10, 11.81 offer to vary …. 6.47 overview …. 6.3, 6.21 other methods of effecting change distinguished agreement to terminate …. 6.13 assignment …. 6.4 alterations in accordance with contract …. 6.4, 6.37 breach, termination for…. 6.13 notice to terminate …. 6.13, 11.9, 11.10 novation …. 6.4, 6.38 promotion of employee …. 6.39 unilateral, imposed by employer …. 6.13, 6.21, 6.49

Vicarious performance assignment …. 9.53 consent, by …. 9.54 delegated performance …. 9.53 right to render …. 9.5 non-personal obligations …. 6.44 personal obligations …. 9.54 service, of …. 1.8, 2.17, 6.44, 9.53 Vitiating factors duress see Duress mistake see Mistake unconscionable conduct see Unconscionable conduct undue influence see Undue influence Voluntary administration see Insolvency

W Wages see Earning wages, Remuneration abatement …. 1.35, 9.50 assignment, of …. 6.43 arrears, paid in …. 9.14 consideration, as …. 3.30 constructive service earning …. 9.10, 10.65, 14.35 debt, as …. 14.66 deductions …. 9.34, 9.47, 9.48 defective performance, for …. 9.7, 9.35 definitions condition precedent …. 9.8 defective performance …. 9.7 dependent obligation …. 9.6 divisible (or severable) contract …. 9.7 divisible (or severable) obligation …. 9.7 entire contract …. 9.7 entire obligations …. 9.7 exact performance …. 9.7 independent obligation …. 9.6 substantial performance …. 9.7

dependent obligation to pay …. 9.9, 9.10 duration of performance to earn wages Apportionment Acts …. 9.32 common law entire obligation rule …. 9.22, 9.29 Cutter v Powell …. 9.22–9.25 divisible or entire obligations …. 9.26, 9.27, 9.28 entire contracts …. 9.22, 9.25, 9.26, 9.29, 9.34 entire obligation …. 9.7, 9.22, 9.26, 9.27, 9.28, 9.29 wrongful dismissal and …. 14.43 earning see Earning wages entire contracts and obligations …. 9.7, 9.22–9.34 entire obligation rule and earning Apportionment Acts …. 9.32 defective service …. 9.30 forfeiture …. 9.31, 9.49 history of rule …. 9.22–9.25 part performance, accepted …. 9.30 statement of rule …. 9.29 substantial performance …. 9.30 exact performance and earning …. 9.7, 9.35, 9.36 failure to pay …. 6.17, 9.56, 14.28 forfeiture of …. 9.31, 9.49 frustration, where …. 12.49–12.52 historical regulation …. 1.35 increases and decreases consideration supporting …. 6.28–6.34 continued employment as acceptance of …. 6.25 contractual terms …. 6.35 serious breach or repudiation, as …. 6.17, 10.29, 10.48, 14.28 independent obligation to pay wages non-wage remuneration and service …. 9.14 under contract …. 9.13 under industrial instruments …. 9.16 under statute …. 9.15, 9.16 late payment of …. 9.56 minimum set by awards …. 8.2 national system employees …. 8.2, 9.2, 9.27

no-work no-pay principle …. 9.17, 9.41 order of performance to earn concurrent obligations …. 9.14 dependent obligation to pay wages …. 9.9 independent obligation to pay wages …. 9.9, 9.13–9.16 overview on earning …. 9.3–9.5 part performance and earning …. 9.35, 9.42 acceptance …. 9.45, 9.46 quantum meruit, recovery on …. 9.46 rejection …. 9.43, 9.44 suspension contrasted …. 9.59 payments in lieu see Payments in lieu payment by third party …. 9.53 priority in insolvency …. 13.23 readiness and willingness to serve and earning …. 9.9, 9.10 repudiation, effect of …. 10.61–10.65 satisfaction of obligations under industrial instruments payments made for collateral purpose …. 5.89 payments made for extraneous purpose …. 5.88 payments made for specified purpose …. 5.88 payments made for unspecified purpose …. 5.87 serious breach, effect of …. 10.61–10.65 service, earned for see Earning wages set-off and earning equitable …. 9.51, 9.52 Fair Work Act, under …. 9.52 statutory …. 9.51 standard of performance and earning exact performance …. 9.36, 9.38 substantial performance …. 9.37, 9.38 substantial performance and earning …. 9.4, 9.7, 9.35 suspension, during …. 9.5 …. 9.60, 9.62 termination of employment, due on …. 2.37, 14.66 Truck Act provisions …. 9.47, 9.48 trust and confidence term …. 8.24 wages for work bargain …. 9.11 wrongful dismissal, after …. 9.9, 9.18

Waiver see Election War frustrating event …. 12.22, 12.23 peaceful employment …. 7.16 Warranty breach or repudiation of …. 10.14, 10.17, 10.44 characterisation of term as …. 10.15, 10.16 condition, distinguished …. 10.14 definition …. 10.7 intermediate term, distinguished …. 10.14 non-essential term …. 10.7 refusal to perform …. 10.44 Winding up see Insolvency Work control and ownership of …. 1.7 employer’s duty to provide …. 8.37 appointments to perform specific duties …. 8.47 breach of duty, effect of …. 8.49 commission, earning remuneration through …. 8.44 denial of available work …. 8.53 discretion to provide …. 8.46 express terms …. 8.39 garden leave …. 8.54 history of …. 8.37, 8.38 implicit terms …. 8.39 mutuality, want of …. 8.46 no profitable work to be performed …. 8.55 performance of work benefiting both parties …. 8.51 public performers …. 8.40 reasonable amount of work …. 8.43 skilled employees …. 8.41 suggested reformulations of general rule …. 8.50 terms implied in law and fact …. 8.39 traditional approach …. 8.37 wrongful dismissal …. 14.48 safe system of …. 8.70, 8.71 wages for work bargain …. 9.11

Workforce Australian, snapshot of …. 1.20 Workplace health and safety see Employer’s duty of care Written terms collateral contracts …. 5.19 complete, when is …. 5.15, 2.30 entire agreement clauses …. 5.20, 8.22 incomplete, when is …. 5.13, 5.14, 5.21 integration of the contract …. 5.18, 5.20 shams …. 5.17 Wrongful dismissal action for …. 14.35 breach of a term, as a …. 14.35, 14.36, 14.38 benefits received by employee …. 14.97 causation …. 14.19 character and purpose …. 14.127 constructive service …. 10.65, 14.35 damages for …. 9.9, 14.3, 14.35 amounts that would have accrued during notice period …. 14.45, 14.46 amounts that would have been earned during notice period …. 14.44 assessing …. 14.65 benefits, loss of …. 14.45 commissions and bonuses, loss of …. 14.45, 14.51–14.52, 14.56 debt, not a …. 14.42 discretionary payments …. 8.29, 14.46, 14.51–14.52, 14.57, 14.130 future employment prospects harmed …. 14.86–14.91 least burdensome performance rule: …. 14.3–14.4, 14.48–14.52 loss of chance …. 14.53–14.63 loss of remuneration caused by breach …. 14.44 loss of reputation …. 14.86–14.91 mental distress …. 14.69–14.82 mutual trust and confidence, breach of term …. 14.75, 14.81 non-discretionary payments …. 14.46, 14.52 non-renewal of contract …. 14.58 non-wage benefits …. 14.47 overview …. 14.3–14.4 physical inconvenience …. 14.80

physical injury …. 14.79 psychiatric injury …. 14.79 prevention of performance …. 14.38, 14.41, 14.44 stigma damages …. 14.72, 14.88 superannuation …. 14.47 taxation of …. 14.29 definition …. 10.7 dispensation with service …. 14.39, 14.40 effect of on contract …. 14.35, 14.38 on relationship …. 10.63, 14.35, 14.38 on obligation to serve …. 7.2, 10.63–10.65, 14.39 on officers …. 14.41 on parties’ obligations …. 10.63–10.65, 14.38, 14.39 on wages …. 10.63–10.65, 14.35, 14.38, 14.42, 14.43 when independent obligation to pay wages …. 10.64, 14.41 election to affirm where …. 10.81 ex gratia payments …. 14.130 express refusal to perform contract …. 10.28 express or implied …. 10.28 fixed term contracts …. 14.4, 14.64 invalid notice earning wages after …. 11.65 effect on contract …. 11.12, 11.65, 11.66 effect of breach of statute …. 11.35, 11.67 effect on relationship …. 11.65 short notice …. 11.12, 11.65 job security provisions loss of chance …. 14.60 procedural fairness, breach of …. 14.61 right to terminate, breaches of terms limiting …. 14.60 least burdensome performance rule …. 14.49–14.52 loss of chance damages …. 14.53–14.63 notice and …. 14.35 payment in lieu and pieceworkers …. 14.56 public sector employee …. 11.35

recovery of amount for unearned wages …. 14.43 retain employee in service nature of the obligation …. 14.37 obligation to …. 14.36, 14.37 repudiation, as a …. 10.29, 14.35, 14.38 repudiation and breach …. 10.9 retraction of …. 14.40 wages following …. 9.9, 9.18, 10.63–10.65, 14.41

Y Yearly hiring see Hiring