Addis v Gramophone Co Ltd

had been summoned by Ms Daisy Constantine. The following day a letter was delivered to Ms Burazin stating that her employment had been terminated. The letter made a number of unjustified allegations about her conduct. Blacktown now accepts that there was no valid reason, connected with Ms Burazin's capacity or conduct or based on the operational requirements of its business, for it to terminate Ms Burazin's employment. THE PROCEEDING Ms Burazin instituted a proceeding in this Court pursuant to Division 3 of Part VIA of the Industrial Relations Act 1988. From 25 November 1996 this legislation is known as the Workplace Relations Act 1996 ("the Act"). She sought compensation for unlawful termination of her employment. By an amended application she also sought a declaration that the termination of her employment constituted a repudiatory breach of contract by the respondent, and consequential damages. In a Statement of Claim she pleaded six implied terms: "(i) that the Respondent would not terminate the Applicant's employment without due cause for doing so; (ii) that the Respondent would not without reasonable cause, conduct itself in a manner likely to damage or destroy the relationship of confidence and trust between the parties as employer and employee; (iii) that the Respondent would act towards the Applicant in good faith; (iv) that the Respondent would exercise its powers in relation to the Applicant fairly; (v) that the Respondent would exercise its powers in relation to the Applicant reasonably; (vi) that the Respondent would not exercise its powers to the detriment of the Applicant on the basis of misleading, incorrect or prejudical information." The case came before Madgwick J. On 15 December 1995 he handed down reasons for judgment in which he discussed the issues raised before him. But he refrained from making any orders. Because of the importance of some of the issues, he thought it would be preferable for some questions to be referred to a Full Court for determination pursuant to s 416 of the Act. But Madgwick J thought Ms Burazin would not be able to afford legal representation before a Full Court, and he indicated he would refer questions only if she could obtain legal representation for a referral without cost to her. She could not, so Madgwick J delivered a supplementary judgment on 2 August 1996 in which he confirmed the tentative views he had previously expressed, and awarded Ms Burazin $3,000 compensation. In awarding this sum, Madgwick J explained that Ms Burazin "is entitled to be compensated for economic loss, as a result of her diminished employability and the difficulty of finding alternative employment, caused by the circumstances of her unlawful termination". The awarded sum was approximately equivalent to two month's pay for Ms Burazin. The trial judge also held that Ms Burazin was entitled to damages for Blacktown's breach of "an implied duty of mutual trust and confidence". However, he awarded no damages in respect of that breach, as he found that the amount of any such damages would be subsumed by the order for the payment of $3,000 compensation. Importantly for this appeal, the trial judge held that Ms Burazin was:- "... not entitled to compensation under the Act, or damages at common law, merely for distress, disappointment or injured feelings arising out of the termination of her employment." THE CONTRACT CLAIM: DAMAGES FOR WRONGFUL DISMISSAL As already stated, Ms Burazin pleaded six implied contractual terms but it seems that, at the trial, she pressed only the second of them: that the respondent would not, without reasonable cause, conduct itself in a manner that was likely to damage or destroy the relationship of confidence and trust between the parties as employer and employee. Madgwick J found "ample English authority" for the implication of this term. He held that Blacktown breached the term by its treatment of Ms Burazin, but the treatment involved "no compensible damage extending beyond what is provided for by the Act" and accordingly was covered by the statutory compensation he awarded. In her notice of appeal to this Court, Ms Burazin did not explicitly challenge that conclusion. But she contended that Madgwick J erred in failing to award compensation under the Act "for the distress she had undergone", and also that he should have awarded "compensation for distress caused by the repudiatory breach of contract" by Blacktown. At the hearing of the appeal, counsel for Ms Burazin, Mr M Christie (who appeared with Professor R C McCallum), referred to the finding of the trial judge that the actions of the employer, "both in calling the police (and) ... suffering them actually to remove a perfectly respectable employee, were unnecessary, humiliating and hurtful". This was a reference, of course, to the events of 12 April; that is, the day before her dismissal. But counsel immediately followed this reference with one to the trial judge's finding that Ms Burazin "was shocked, humiliated to the quick, financially worried, disoriented and depressed, as anyone might have been". This statement referred to the cumulative effects of the events of 12 April and 13 April; in speaking of distress, Madgwick J treated the events of 12 and 13 April as a continuum. In arguing the appeal, Mr Christie submitted "that the compensation payable to Ms Burazin for breach of contract ought to include compensation for distress, humiliation and disappointment". But he did not clearly identify the particular breach of contract to which he was referring. His argument referred to the implied obligation of trust and confidence but he made no attempt to distinguish between the distress occasioned to Ms Burazin by the events of 12 April, especially the employer's action in calling the police to escort her from the premises, and the distress caused by her dismissal. As mentioned, Madgwick J also did not distinguish between the two. This lack of distinction is important. Madgwick J did not make a finding that the dismissal constituted a breach of contract by the employer, as distinct from a contravention of Division 3 of Part VIA of the Act. And it is not clear from the evidence that it did. His Honour referred to the fact that, in the letter handed to her on 12 April, Ms Burazin was stated to be employed on a "permanent/part time" basis, but thereafter for only two days per week and at an hourly rate of pay. As a matter of contract law, she was no doubt entitled to notice of dismissal or payment in lieu. But it is not clear this was denied her; the matter seems not to have been explored at the trial. In any event there is no reason to believe that the denial of proper notice, if that is what happened, significantly increased the distress that Ms Burazin suffered by reason of her treatment on 12 April, and the dismissal itself. There is a further difficulty about the applicant's claim for damages for distress occasioned by the breach of contract constituted by the dismissal itself; that is, the claim for damages for distress occasioned by termination without proper notice. In Addis v Gramophone Company Ltd [1909] AC 488 the House of Lords held that damages for wrongful dismissal cannot include compensation for the manner (as distinct from the fact) of the dismissal or for the distress thereby occasioned to the employee. Mr Christie argued this decision should no longer be regarded as good law in Australia, in light of the decision of the High Court of Australia in Baltic Shipping Company v Dillon (1993) 176 CLR 344. In any case, he said, it did not apply to a breach of an implied term that the employer would not, without reasonable cause, destroy or seriously damage the relationship of confidence and trust between employer and employee, a term that is directed to the maintenance of a fruitful on-going relationship, as distinct from a breach of contract constituted by a wrongful dismissal. In order to put our view about these submissions into context, it is desirable to set out some fundamental principles and legal history. First, it is important to remember the distinction between the various types of damages. General damages are awarded to compensate the plaintiff for his or her "normal" or "basic" loss; that is, the loss that any person in the plaintiff's position would have suffered by reason of the breach itself. Aggravated damages are also compensatory, but they relate to the additional loss that the plaintiff suffered, beyond the normal loss, by reason of the manner, rather than the fact, of the breach. As Windeyer J explained in Uren v John Fairfax & Sons Pty Limited (1966) 117 CLR 118 at 149: "aggravated damages are given to compensate the plaintiff when the harm done to him by a wrongful act was aggravated by the manner in which the act was done". (Emphasis added). See also MacGregor on Damages (15th edn) at par. 26-28; CCH Contract Law Reporter at par. 56-220. McIntyre J of the Supreme Court of Canada put the matter another way in Vorvis v Insurance Corporation of British Columbia (1989) 58 DLR (4th) 193 at 202 when he said: "Aggravated damages are awarded to compensate for aggravated damage". He cited with approval a statement in Waddams, The Law of Damages (2nd ed, 1983) at para 979 that "aggravated damages describes an award that aims at compensation, but takes full account of the intangible injuries, such as distress and humiliation, that may have been caused by the defendant's insulting behaviour." Aggravated damages are to be contrasted with exemplary (or punitive) damages which, as Windeyer J said in Uren at 149, "are intended to punish the defendant, and presumably to serve one or more of the objects of punishment - moral retribution or deterrence." The traditional view is that the measure of damages for a breach of contract is unaffected by the manner of the breach. This view was enunciated by Griffith CJ in Butler v Fairclough (1917) 23 CLR 78 at 89, drawing on the principles stated in Hadley v Baxendale (1859) 9 Exch 341 at 354 [156 ER 145 at 181]: "The measure of damages in an action for breach of contract is well settled. It is such loss as may fairly and reasonably be considered as arising according to the usual course of things or may reasonably be supposed to have been in the contemplation of the parties at the time of making the contract as the probable result of a breach. The motive or state of mind of a person who is guilty of a breach of contract is not relevant to the question of damages for the breach ... A breach of contract may be innocent, even accidental or unconscious. Or it may arise from a wrong view of the obligations created by the contract. Or it may be wilful, and even malicious and committed with the express intention of injuring the other party. But the measure of damages is not affected by any such considerations. This statement does not refer to distress occasioned to the plaintiff by a breach of contract. But it is consistent with the view that damages for distress will not ordinarily be available. That view, and its rationale, were stated in the old case of Hamlin v Great Northern Railway Company (1856) 1 H&N 408 [158 ER 126] in which Pollock CB said (at 411, 1262): "The plaintiff is entitled to nominal damages, at all events, and such other damages of a pecuniary kind as he may have really sustained as a direct consequence of the breach of contract. Each case of this description must be decided with reference to the circumstances peculiar to it; but it may be laid down as a rule, that generally in actions upon contracts no damages can be given which cannot be stated specifically, and that the plaintiff is entitled to recover whatever damages naturally result from the breach of contract, but not damages for the disappointment of mind occasioned by the breach of contract." Pollock CB was evidently of the opinion that disappointment of mind was not a usual result of breach of contract. Although Hamlin was decided before Hadley v Baxendale, it continued to be applied thereafter, presumably on the basis that distress was not something "arising according to the usual course of things" from a breach of contract, or damage that may reasonably be supposed to have been in the contemplation of the parties at the time they made the contract. And it was applied on the basis that no distinction should be made between damage flowing from the fact of the breach (general damages), and damages flowing from the manner of the breach, which might otherwise give rise to a liability for aggravated damages. As we read Addis, that is all the House of Lords decided. The difference between the majority and the dissentient, Lord Collins, concerned the question whether exemplary damages were available to the plaintiff. If Addis is open to criticism, in our view it must be on the ground that the House failed to consider whether, in the case of breach of a contract of employment by a wrongful dismissal, distress was a loss that might fairly be considered as arising according to the usual course of things, or at least might reasonably be supposed to have been in the parties' contemplation when they made the contract. The House of Lords treated contracts of employment as being the same as other commercial contracts, without reference to the interpersonal relationship that employment contracts establish or the fact that a breach of an employment contract, especially by an employer, may have a substantial effect on the other party's emotional well-being and self-esteem. In recent years the courts have recognised that there are some types of contract in relation to which distress is a natural and probable consequence: see Athens-MacDonald Travel Service Pty Ltd v Kazis [1970] SASR 264, Jarvis v Swans Tours Ltd [1973] QB 233, Jackson v Horizon Holidays Ltd [1975] 1 WLR 1468. These were all cases where the purpose of the contract was to provide pleasure to the plaintiff, so it might be anticipated that a breach of the contract would cause disappointment and distress. The question for the High Court in Baltic Shipping was whether it should uphold these cases and, if so, on what basis. The Court did endorse the approach taken in the holiday cases, which was all that was necessary for determination of the appeal, but it refrained from propounding any wider rule. At 365, Mason CJ (with whom Toohey J agreed generally, and Gaudron J agreed on this aspect of the appeal) said: "... as a matter of ordinary experience, it is evident that, while the innocent party to a contract will generally be disappointed if the defendant does not perform the contract, the innocent party's disappointment and distress are seldom so significant as to attract an award of damages on that score. For that reason, if for no other, it is preferable to adopt the rule that damages for disappointment and distress are not recoverable unless they proceed from physical inconvenience caused by the breach or unless the contract is one the object of which is to provide enjoyment, relaxation or freedom from molestation. In cases falling within the last-mentioned category, the damages flow directly from the breach of contract, the promise being to provide enjoyment, relaxation or freedom from molestation. In these situations the court is not driven to invoke notions such as 'reasonably foreseeable' or 'within the reasonable contemplation of the parties' because the breach results in a failure to provide the promised benefits." When Mason CJ referred to contracts the object of which, or an object of which, was to provide enjoyment, relaxation or freedom from molestation, it was unlikely he had in contemplation employment contracts. This conclusion is strengthened by the consideration that the Court declined to review the decision in Addis: see 405 per McHugh J. Brennan J referred at 368 to a test adopted by Lord Reid in C Czarnikow Ltd v Koufos [1969] 1 AC 350 at 385: "In cases like Hadley v Baxendale or the present case it is not enough that in fact the plaintiff's loss was directly caused by the defendant's breach of contract. It clearly was so caused in both. The crucial question is whether, on the information available to the defendant when the contract was made, he should, or the reasonable man in his position would, have realised that such loss was sufficiently likely to result from the breach of contract to make it proper to hold that the loss flowed naturally from the breach or that loss of that kind should have been within his contemplation." Brennan J said the "relevant question is therefore whether to make it proper to hold that the loss flowed naturally from the breach'." He pointed out that, in one sense, a promisee's disappointment of mind flows naturally wherever a contractual promise is not fulfilled, but referred to the statement by Dixon and McTiernan JJ in Fink v Fink (1946) 74 CLR 127 at 144 about resentment, disappointment and the loss of esteem not being proper elements of damage in a breach of contract case. Brennan J went on to say at 369 "there is a sound policy underlying this rule" and gave his reasons: "The institution of contract, by which parties are empowered to create a charter of their rights and obligations inter se, can operate effectively only if the parties, at the time when they create their charter, can form some estimate of liability in the event of default in performance. But no approximate estimate of liability could be formed if the subjective mental reaction of an innocent party to a breach and resultant damage were added on as further damage without proof of pecuniary loss by the innocent party. If the mental reaction to breach and resultant damage were itself a head of damage, the liability of a party in breach would be at large and liable to fluctuation according to the personal situation of the innocent party. If a promisor were exposed to such an indefinite liability in the event of breach, the making of commercial contracts would be inhibited, the assignment of a contractual right would carry new risks for the party subject to the reciprocal obligation, and trade and commerce would be seriously impeded." After distinguishing the position in tort, Brennan J said that the Hamlin principle "has no application when ... the disappointment of mind', distress and injured feelings `occasioned by the breach of contract'. That rule, where applicable, represents an essentially pragmatic and judicially imposed assumption which is to be made for the purposes of the application of the second limb of the rule in Hadley v Baxendale (1854) 9 Ex 341 (156 ER 145), that is to say, it is to be assumed that disappointment or distress flowing from the breach of contract would not have been in the contemplation of the parties, at the time they made the contract, as a likely result of breach. As Kirby P. commented in the Court of Appeal, it is a result of history, rather than logic, that a different rule evolved in the law of torts. Notwithstanding that the rule is based upon pragmatism rather than logic, we are unable to agree with the suggestion to be found in some recent judgments that it should now be effectively abolished by judicial decision. There are, however, established qualifications of or exceptions to the general rule. The question which arises on this aspect of the case is whether disappointment and distress sustained by reason of breach of a contract to provide a pleasant and relaxing holiday experience comes within them. In our view, it does." At 405, McHugh J held that: "In the result, the Court should not presently reject the general rule enunciated in Hamlin and substantially confirmed in Addis. At the same time, it should recognize that damages for distress or disappointment are recoverable in an action for breach of contract if it arises from breach of an express or implied term that the promisor will provide the promisee with pleasure or enjoyment or personal protection or if it is consequent upon the suffering of physical injury or physical inconvenience. The question whether the general rule enunciated in Hamlin should be overruled can be considered when the Court has heard full argument on the question." In referring to contractual terms, whether express or implied, for the provision of "pleasure or enjoyment or personal protection", McHugh J, in our view, did not intend to embrace those terms of an employment contract governing its termination. It is particularly difficult to infer such an intention in light of his reaffirmation of Addis. As it seems to us, the High Court rejected the opportunity in Baltic Shipping to throw over the constraints imposed by Hamlin and Hadley v Baxendale and their successors. It approved the awarding of damages for distress only in a limited range of cases. Although there was some difference in the precise formulations put forward by their Honours, none was broad enough to cover distress resulting from a wrongful dismissal. If such damages are to be awarded, it must be after rejection, at High Court level, of the Addis conclusion that employment contracts are to be treated like other commercial contracts for the purposes of the rules in Hadley v Baxendale. THE CONTRACT CLAIM: THE IMPLIED TERM Turning to the implied term pressed in argument, we agree with Madgwick J that there is ample English authority for the implication of the suggested term: see Post Office v Roberts [1980] IRLR 347; Woods v WM Car Services (Peterborough) Ltd [1981] IRLR 347 (affirmed on appeal [1982] ICR 693); Bliss v South East Thames Regional Health Authority [1985] IRLR 308; United Bank v Akhtar [1989] IRLR 507; and Malik v Bank of Credit and Commerce International SA [1995] IRLR 375. Roberts, Woods and Akhtar are decisions of the United Kingdom Employment Appeals Tribunal, presided over in each case by a High Court judge. Bliss and Malik are decisions of the English Court of Appeal. However, none of these decisions supports the view that damages are available for breach of the implied term. In each of the three Employment Appeal Tribunal cases, the implied term was used by the employee as a basis for a successful submission that the employer had constructively terminated the employee's employment. In each case, the employer's conduct was held to have undermined the employment relationship so fundamentally as to amount to a repudiation of the employment contract, which the employee accepted by resigning. Damages for breach of contract, as such, were not sought. In the two Court of Appeal cases, they were. In Bliss the trial judge held the defendant authority was in breach of its employment contract with the plaintiff, an employed orthopaedic surgeon, in requiring him to undergo a psychiatric examination and suspending him when he refused to do so. The judge held this breach entitled the plaintiff to repudiate the contract, but the plaintiff had affirmed it after the requirement was withdrawn and the suspension lifted. Nonetheless, the judge awarded general damages for the frustration and mental distress occasioned to the plaintiff by the breach. The Court of Appeal upheld the trial judge's finding of breach, specifically relating this to an implied term that the employer would not without reasonable cause conduct itself in a manner likely to damage or destroy the relationship of confidence and trust. The Court also agreed the term was so fundamental to the contract of employment as to entitle the plaintiff to treat its breach as a repudiation of the contract; since it disagreed with the finding that the contract had been affirmed, it allowed the appeal. Importantly, however, it also allowed the defendant's cross-appeal against the award of damages for frustration and mental distress. Dillon LJ, speaking for the Court, said at 316: "The general rule laid down by the House of Lords in Addis v Gramophone Company Ltd (1909) AC 488 is that where damages fall to be assessed for breach of contract rather than in tort it is not permissible to award general damages for frustration, mental distress, injured feelings or annoyance occasioned by the breach. Modern thinking tends to be that the amount of damages recoverable for a wrong should be the same whether the cause of action is laid in contract or in tort. But in Addis Lord Loreburn regarded the rule that damages for injured feelings cannot be recovered in contract for wrongful dismissal as too inveterate to be altered, and Lord James of Hereford supported his concurrence in the speech of Lord Loreburn by reference to his own experience at the Bar. There are exceptions now recognised where the contract which has been broken was itself a contract to provide peace of mind or freedom from distress. See Jarvis v Swans Tours Ltd (1973) QB 233 and Heywood v Wellers (1976) QB 446. Those decisions, as decisions, do not however cover this present case. In Cox v Philips Industries Ltd [1975] IRLR 344 Mr Justice Lawson took the view that damages for distress, vexation and frustration, including consequent ill-health, could be recovered for breach of a contract of employment if it could be said to have been in the contemplation of the parties that the breach would cause such distress etc. For my part, I do not think that that general approach is open to this court unless and until the House of Lords has reconsidered its decision in Addis." Dillon LJ did not discuss whether there was a relevant difference between a wrongful dismissal case and a case of breach of the implied term that the employer would not unreasonably damage or destroy the relationship of trust and confidence. He simply assumed that Addis applied to all employment contracts. As the very purpose of the implied term is to protect the employee from oppression, harassment and loss of job satisfaction, it is difficult to see why it should not be regarded as a term designed "to provide peace of mind or freedom from distress", just as much as the contracts in the holiday cases. Malik went to the Court of Appeal as the result of a decision of a bank liquidator to reject a proof of debt lodged by the appellant, a former employee of the bank. The bank had collapsed financially in circumstances that suggested it had carried on its business in a fraudulent manner for some years. The appellant alleged a stigma attached to him, as a former bank officer, despite not having been involved in the fraud, that made it impossible for him to obtain other employment in the banking industry. He claimed damages. The Court of Appeal held that the claim might be covered by the implied term of trust and confidence, but that damages were not available for a breach of that term. Morritt LJ, who gave the leading judgment, said at 377 that the "central question" in the appeal was: "whether Addis and the cases which have come after it are confined in their operation to damages recoverable for wrongful dismissal and have no restrictive effect on damages recoverable for breaches of other terms of an employment contract." All three members of the Court answered this question in the negative, holding that Addis barred the appellant's claim. It will be noted that Morritt LJ answered the "central question" only by quoting passages from Addis and saying (at 378): "It seems to me that it is clear from the passages I have quoted that the restriction is not confined to cases of damages for wrongful dismissal. Indeed there is no reason in principle why it should be. The most usual case of wrongful dismissal is not the failure to give the notice the contract requires but, rather, the breach of other terms of the contract, express or implied, which entitle the employee to accept the repudiatory breach of the employer as discharging him or her from any obligation of further performance. Indeed that was the effect of the claim in Addis itself. It would rob the decision in Addis of any substance to conclude that a claim for damages based solely on a breach of the other terms would carry the damages the House of Lords excluded." Morritt LJ did not address the situation where, as in the very case before him, the claimed breach was not in connection with the termination of the employment contract but in relation to actions during its subsistence. He treated Addis as applicable to all employment contracts and treated it as excluding all intangible claims. There are Canadian cases in which courts have declined to follow Addis in connection with a claim for wrongful dismissal: see Pilon v Peugeot Canada Ltd (1980) 114 DLR (3d) 378, Brown v Waterloo Regional Board of Commissioners of Police (1982) 136 DLR (3d) 49, Ribeiro v Canadian Imperial Bank of Commerce (1989) 67 OR (2d) 385, (on appeal) (1992) 13 OR (3d) 278, and Trask v Terra Nova Motors Ltd (1995) 127 Nfld & PEIR 310. In Vorvis the Supreme Court of Canada, by majority, held that punitive damages were not available to the appellant, a dismissed employee. However, the majority conceded that aggravated damages might be awarded "in appropriate cases" in actions for wrongful dismissal, to reflect the exacerbation of a dismissed employee's loss constituted by distress. In a New Zealand case, Whelan v Waitaki Meats Ltd [1991] 2 NZLR 74, Gallen J awarded damages for the mental distress suffered by a long-term employee who was peremptorily dismissed from his employment. He did so on the basis that the plaintiff: "was entitled to assume that he would be treated by his employer in such a manner as to enable him to retain his dignity within the community and not to have his status affected by a precipitate act open to misinterpretation." (at 89) Gallen J thought "these matters taken together become implied terms of his contract of service with the defendant", which terms had been breached. On the way to his conclusion, his Honour cited numerous New Zealand cases, including observations by the Court of Appeal suggesting that the continued application of Addis in New Zealand was a matter warranting consideration. Notwithstanding this, in Brandt v Nixdorf Computer Ltd [1991] 3 NZLR 750, Greig J distinguished Whelan and applied Addis in its full rigour. Although Vorvis reserves the point, only Whelan recognises a distinction, for the purposes of the application of Addis, between a breach of contract constituted by an actual termination of employment, and a breach of an implied term of the contract of employment relating to the employer's treatment of the employee. And the distinction made in that case is not convincing. Gallen J based his decision on the damage inflicted on the plaintiff's reputation, but the breach he found in Whelan was a breach related to the manner of dismissal; the very feature that was specifically held in Addis not to support damages for distress. Two issues have to be addressed in determining whether damages are recoverable for distress caused by a breach of the implied term: whether the breach is one capable of giving rise to a liability for damages, as distinct from founding a right to repudiate the contract; and, if so, whether the damages are limited by the rule in Addis. As it seems to us, there ought to be little doubt about the answer to the second question. Having regard to the purpose of the implied term, it is difficult to dispute that distress is a natural and probable effect of a breach. So if damages are an available remedy, Addis ought not apply. But we have a doubt about the first question. Although it might seem strange to concede the existence of an implied contractual term but deny its capacity to give rise to liability in damages, it must be remembered that the term is intended to bolster an ongoing relationship. To permit an action for damages during the currency of the employment relationship, it might be argued, would be antithetical to the reason for implying the term; the action itself would presumably cause a further deterioration in the relationship. That argument would not apply in a case like Malik, where the relationship had already come to an end. But in some such cases, the implied term will have played its part in enabling the employee to improve his or her legal position by placing responsibility for the termination on the employer. Although we have difficulty with the reasoning in both Bliss and Malik, they are both decisions of the English Court of Appeal. It would be a significant step for this Court to refuse to follow them. It is unnecessary to take that step in this case. As will appear, we have reached the conclusion that Ms Burazin is entitled under her statutory claim to be compensated for the distress she suffered as a result of her treatment by the respondent on 12 and 13 April. It makes no difference whether the same compensation is also available under the contract claim. Accordingly, we leave open the questions discussed in this part of our reasons. THE STATUTORY CLAIM Section 170EE(2) of the Act provides as follows: "(2) If the Court thinks, in respect of a contravention of a provision of this Division (other than section 170DB or 170DD) constituted by the termination of employment of an employee, that the reinstatement of the employee is impracticable, the Court may, if the Court considers it appropriate in all the circumstances of the case, make an order requiring the employer to pay to the employee compensation of such amount as the Court thinks appropriate." It was common ground that reinstatement was impracticable. This is not surprising. The trial judge found that Ms Burazin had been "extremely distressed" by her treatment at the hands of Blacktown. He also found that "the respondent by its agents behaved arrogantly and contemptuously towards her". These conclusions were not in issue on the appeal. They were obviously open to the judge, having regard to the primary findings summarised above. So it was necessary for the trial judge to consider the matter of compensation. That made s 170EE(3) relevant. It provides: "(3) In working out the amount of the compensation for the purposes of subsection (2), the Court is to have regard to the remuneration that the employee would have received, or would have been likely to have received, if the employer had not terminated the employment, but the amount of compensation: (a) must not exceed, in respect of any employee, the amount of the remuneration that would have been received by the employee in respect of the period of 6 months that immediately followed the day on which the termination took effect if the employer had not terminated the employment and the employee had continued to receive remuneration in respect of the employment at the rate at which he or she received remuneration immediately before the termination took effect; and (b) must not exceed, in respect of an employee who is not employed under award conditions, the applicable amount on the day on which the termination took effect." In Aitken v Construction, Mining, Energy, Timberyards, Sawmills and Woodworkers Union of Australia - Western Australian Branch ("Aitken") (1995) 63 IR 1 at 9, Lee J said: "The compensation to be ordered to be paid under s 170EE(2) is such amount as the Court thinks appropriate subject to the limit set in s 170EE(3). It is a statutory remedy for which no assessment criteria are prescribed, other than a requirement in s 170EE(3) that the Court have regard to the remuneration that the employee would have received, or would have been likely to have received, if the employer had not terminated the employment. In assessing the compensation that is appropriate the Court will have regard to what is reasonable in the circumstances and will look at what would have been likely to occur had the Act not been contravened (see: Nicolson v Heaven & Earth Gallery Pty Ltd (1994) 1 IRCR 199 at 211; 57 IR 50 at 61-62 per Wilcox CJ). The Court will consider the detriment occasioned to the employee by the employer's contravention of the Act, and the extent to which it is reasonable to compensate the employee for such consequences. Division 3 of the Act provides the context in which s 170EE is to be construed. It includes provisions intended to protect the dignity of an employee, in particular, s 170EA provides an employee with a right to seek redress in respect of a breach of the Act and s 170EE provides the entitlement to receive compensation as the remedy for such a breach, characteristics of a statutory tort. Therefore, in some cases principles relevant to the assessment of damages in tort may provide assistance in assessing the compensation to be paid under s 170EE(2). That is to say it may be appropriate to include in the measure of compensation to be paid pursuant to s 170EE(2) a sum sufficient to compensate an employee for mental distress or injured feelings caused by a harsh, unjust or unreasonable termination of employment... It is also appropriate to keep in mind that the purpose of the Act in providing for compensation to be paid to an employee for an employer's failure to abide by the terms of the Act is not only to redress a wrong done to the employee but, in the public interest, to instil greater awareness of, and adherence to, the provisions of the Act. A measure of compensation which addresses the consequences caused by conduct that has breached the Act assists to meet that purpose." In Brackenridge v Toyota Motor Corporation (1996) 67 IR 162, Beazley J disagreed. She said at 184-185: "With respect to Lee J, I do not agree that damages for mental distress are available under s 170EE. This is clear from the structure of the section. In the case where the Court determines that reinstatement is practicable, s 170EE(1) specifies the whole of the available remedy. That remedy is confined to reinstatement in the manner specified in subs (1)(a) and specified in subs (1)(b). Those orders are: such order as is necessary to maintain the continuity of the employee's employment and an order requiring the employer to pay the remuneration which has been lost from the time of termination to the date of reinstatement. It is only if the Court considers that reinstatement is impracticable that compensation is payable: s 170EE(2). The amount of compensation is calculated in accordance with s 170EE(3). The reference point in the calculation of compensation is 'the remuneration that the employee would have received or would have been likely to receive, had there been no termination'. Paragraphs (a) and (b) of subs (3) together with subs (4) provide a limit on the amount of compensation which might be payable. If 'compensation' in subs (2) was wide enough to encompass damages for mental distress it would mean an applicant's entitlement to such compensation would be dependent upon the Court's determination as to whether reinstatement was practicable, notwithstanding that the mental distress would have been suffered in any event. In my opinion, s 170EE is directed to compensation for the loss of financial or monetary aspects of the employment. It does not encompass other forms of compensation which may be available in respect of other causes of action." We respectfully prefer the view of Lee J. We agree with Beazley J's analysis of the structure of the section and with her statement that compensation, as such, is only payable if the Court determines that reinstatement is impracticable and, in that event, is to be calculated in accordance with subs (3). We also agree with her observation about paras (a) and (b) providing limits on the available compensation. Further, we accept that the words "the remuneration that the employee would have received or would have been likely to have received" can be described as a "reference point" for the calculation of compensation. But they are no more than that. They do not exhaustively state the matters to be taken into account. The Court's power under s 170EE(2) of the Act is to order payment of "such amount (of compensation) as the Court thinks appropriate". In making its assessment, the Court is obliged to have regard to lost remuneration, but is not limited to that item. If the evidence establishes other damage flowing from the unlawful termination, the Court is entitled to take that into account in making its assessment, up to the limits prescribed by paras (a) and (b) of s 170EE(3). It follows that the shock, humiliation and distress suffered by Ms Burazin in respect of the unlawful termination of her employment are matters that Madgwick J was entitled to take into account in considering the proper amount of compensation to be ordered under s 170EE(2). CONCLUSION Unless some error of law or principle were disclosed in the reasoning of a trial judge, a Full Court would not normally interfere with an assessment of compensation. However, in this case we respectfully consider the trial judge misdirected himself as to the heads of available compensation under s 170EE(2) of the Act. So it is appropriate for us to reassess the appropriate amount of compensation. In doing so, we will follow the trial judge's lead in treating the events of 12 and 13 April 1995 as a continuum culminating in Ms Burazin's actual dismissal. There is an element of distress in every termination. To ensure compensation is confined within reasonable limits, restraint is required. But in this case there were unusual exacerbating circumstances that make it appropriate to include in the compensation an allowance for the distress unnecessarily caused to Ms Burazin. These circumstances include Ms Burazin having to suffer the humiliating experience of being escorted from Blacktown's premises by the police. Having regard to these circumstances, the compensation assessed by the trial judge should be increased by the sum of $2,000, to $5,000. The order of the Court will be as follows: 1. The order of the trial judge be set aside. 2. In lieu thereof the respondent pay the applicant the sum of $5,000 within twenty-one days of the making of this order, together with interest at the rate prescribed by O 35 rule 8 of the Rules of Court from 2 August 1996 to the date of payment. I certify that this and the preceding twenty eight (28) pages are a true copy of the Reasons for Judgment herein of Chief Justice Wilcox and Justices von Doussa and Marshall. Associate: Date: 13 December 1996 APPEARANCES Counsel for the Applicant: M Christie with Professor R C McCallum Solicitor for the Applicant: Ann Fieldhouse Counsel for the Respondent: P Cook Solicitor for the Respondent: Renato Merlino Date of hearing: 11 October 1996