Unfair dismissal - "Procedural" unfairness - "Substantive" unfairness - Remedies - Contractual benefits - Reasonable redundancy payments - Whether term for redundancy payments implied in employment contracts - Assessment of damages - General principles - Inconsistent claims - Employee claiming both "substantive" unfairness and genuine redundancy

Appeals - Full Bench - Powers to vary compensation assessments - Limits

Employment contracts - Wrongful dismissal - Effect of wrongful dismissal on employment relationship - Implied terms - Reasonable notice - Redundancy - Damages - Method of assessment

Industrial Relations Act 1979, s 7, s 23(1), s 23A, s 29

Respondent : Chamber of Commerce and Industry Western Australia

Appellant : Chamber of Commerce and Industry Western Ausralia

Ahern v Australian Federation of Totally and Permanently Incapacitated Ex-Service Men and Women (Western Australian Branch) Inc (1998) 78 WAIG 3572

Bogunovich v Bayside Western Australia Pty Ltd (1999) 79 WAIG 8

Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission & Ors [2000] HCA 47; (2000) 203 CLR 194

Collector of Customs v Agfa Gevaert Ltd [1996] HCA 36; (1996) 186 CLR 389

Elliott v Kodak Australasia Pty Ltd [2001] FCA 807; (2001) 108 IR 23

Federated Clerks Union of Australia, Industrial Union of Workers WA Branch v George Moss Ltd (1990) 70 WAIG 3040

House v The King [1936] HCA 40; (1936) 55 CLR 499

Norbis v Norbis [1986] HCA 17; (1986) 161 CLR 513

Qantas Airways Ltd v Christie (1998) 193 CLR 280

Shire of Esperance v Mouritz (1991) 71 WAIG 891

The Minister for Health v The Australian Liquor, Hospitality and Miscellaneous Workers' Union (1996) 76 WAIG 930

Wan v Australian Industrial Relations Commission and Australian Broadcasting Corporation [2001] FCA 1803

Western Australian Builders Labourers, Painters and Plasterers Union of Workers v Clark (1995) 62 IR 334

1 ANDERSON J (Presiding Judge): These are two appeals from a decision of the Full Bench delivered on 17 December 2001 dismissing an appeal from a decision of Wood C in which he awarded to Mr Peter Dellys $26,351.10 as compensation for unfair dismissal from the employment of Elderslie Finance Corporation Ltd. I shall refer to Mr Dellys as the appellant, although he is respondent in appeal number IAC 2 of 2002 and I shall refer to Elderslie Finance Corporation Ltd as the respondent, although it is the appellant in that appeal.

2 The appellant was dismissed during the mid-afternoon of 14 July 2000 from his position as national agency manager, which he had held since 4 May 1998. On the day in question, the respondent's executive director, Mr Little, told the appellant that his position had been abolished and he had been made redundant, and he should leave his employment that day. He was given a sum of money equivalent to 10 weeks' base salary, of which portion (one month's base salary) was said to be in lieu of notice and the remainder was said to be a severance payment, calculated at three weeks' pay for every completed year of service.

3 The respondent is a finance company which raises money from investors and lends money to borrowers for a fee, or margin on the loans. It carries on business through a number of agencies and the appellant's duties involved co-ordinating and monitoring the work of these agencies.

4 On 2 August 2000, the appellant filed a notice of application in the Commission pursuant to his right to do so under s 29(1)(b) of the Industrial Relations Act 1979 (WA) which provides:

"29. By whom matters may be referred

(1) An industrial matter may be referred to the Commission --

(a) ...

(b) in the case of a claim by an employee --

(i) that he has been harshly, oppressively or unfairly dismissed from his employment; or

(ii) that he has not been allowed by his employer a benefit, not being a benefit under an award or order, to which he is entitled under his contract of service,

by the employee."

5 This is the section which sets out the standing of an employee himself to refer a matter to the Commission and, as can be seen, limits the matters that may be referred by an employee to those which are described in subpars (i) and (ii). It may be observed that s 29 does not confer a separate head of jurisdiction on the Commission in addition to that which is conferred by s 23(1) or expand the powers of the Commission: Coles Myers Ltd v Coppin & Ors (1993) 73 WAIG 1754; (1993) 11 WAR 20 per Kennedy J at 24. Section 29(1)(b) does, however, confirm that the matters referred to in subpars (i) and (ii) of that subsection are, prima facie, industrial matters within the definition of "industrial matter" in s 7. This will be so even when, as here, the employment relationship has ended: s 7(1)(1a)

6 By the notice of application, the appellant stated the grounds upon which his application was made as being "unfair dismissal and denied contractual benefits", thus indicating that the reference was made pursuant to both subpars(i) and (ii) of s 29(1)(b). A number of particulars were given in support of his claim that his dismissal was unfair, the main particulars being that he was summarily dismissed without sufficient payment in lieu of notice and without any prior warning "that his position had been abolished and that he had been made redundant". By way of redress for his unfair dismissal, he claimed to be reinstated. As to the claim for "contractual benefits", his claim was as follows:

"CONTRACTUAL BENEFITS

Reasonable Notice 12 months pay

$76,743.69

Reasonable Redundancy pay 12 months pay

$76,743.69

Commissions forfeited due to summary $12,500

dismissal (July 2000)

STATUTORY BENEFITS

Statutory Superannuation entitlements $ 7,693.56

based on 2 years pay or on the amount

of reasonable notice and/or reasonable

redundancy payment ordered by the

Commission

TOTAL BENEFITS CLAIMED $173,680.94"

Commissioner Wood's decision - procedural and substantive unfairness

7 Wood C found that the appellant's dismissal was "both procedurally and substantively unfair". He found that it was "substantively" unfair because it was not a case of genuine redundancy at all and he was dismissed really because of poor performance in circumstances in which it was not fair to dismiss him on that ground. It was "procedurally" unfair because of the manner in which the dismissal was effected; that is, "without any complaint or counselling about his performance, and told to leave that day".

8 The provisions of the Industrial Relations Act which refer to harsh, oppressive or unfair dismissal make no distinction between a dismissal which is "substantively" harsh, oppressive or unfair and a dismissal which is "procedurally" harsh, oppressive or unfair. However, it has been the longstanding practice of the Commission to employ the dichotomy as a convenient method of distinguishing between dismissals which are unfair in the sense that there should have been no dismissal at all and dismissals which are unfair in the sense that, although the employer was, broadly speaking, justified in bringing the relationship of master and servant to an end when he did, the employer went about it harshly, oppressively or unfairly. The distinction is regarded as relevant to the quantification of the compensation to which the employee may be entitled under s 23A(1)(ba). It would appear that the "loss or injury" within the meaning of that subsection is invariably assessed differently, depending on whether the Commission concludes that the employee should not have been dismissed at all, or whether it concludes that it was only the manner of dismissal which was unfair. See, for example, WA Access Pty Ltd v Vaughan (2000) 81 WAIG 373.

9 Having found that the dismissal in this case was both procedurally and substantively unfair, Wood C considered the appellant's application for reinstatement pursuant to s 23A(1)(b) and decided that reinstatement was not practicable, but that compensation should be awarded. As has been noted, he assessed the amount which the respondent should pay to the appellant for the loss or injury caused by the dismissal at $26,351.10 and ordered that sum to be paid.

10 The sum was arrived at in the following way. The Commissioner found that the appellant had not worked at all since his dismissal, a period of 33 weeks as at the day of assessment. Because the appellant had been paid for 10 weeks of that period, his loss to that date was held to be the equivalent of 23 weeks' salary, plus superannuation entitlements and this was found to come to $26,351.10 (AB 57 par 32).

11 As can be seen, Wood C made no allowance in respect of the claim for "Reasonable Redundancy pay" amounting to $76,743.69.

12 The appellant appealed to the Full Bench against the inadequacy of that award, claiming that certain specific errors had been made in the calculation of it. The respondent did not appeal.

13 The appellant's contentions before the Full Bench essentially were that, in calculating loss, Wood C failed to take into account commissions that the appellant would have earned over and above his base salary during the period of 33 weeks, made an under-calculation of superannuation entitlements and ought not to have deducted the amount paid to the appellant in lieu of notice and for severance. Furthermore, it was contended that, in addition to the other heads of claim, there should have been an award of "a reasonable redundancy payment as an implied term of his contract of employment in addition to a period of reasonable notice".

14 The factual question whether there was or was not a redundancy does not arise for our consideration. The circumstances in which a redundancy will occur include the abolition of the job in question, but redundancy may also occur when a workforce is reduced because there is labour in excess of that reasonably required to perform the work which is the employer's business: Gromark Packaging v The Federated Miscellaneous Workers Union of Australia, WA Branch (1992) 73 WAIG 220 per Franklyn J at 224.

Is there an implied term for redundancy payments?

15 According to the practice that seems to have developed in the Commission to deal with such disputes as this, if a redundancy occurs, an award may be made to the affected employee under the head of "reasonable redundancy payment" separately from, and it would seem in addition to, any award that may be made in respect of a claim for payment in lieu of reasonable notice; and such an award may be made even when it is found that the employee was given reasonable notice or an appropriate payment in lieu of reasonable notice. As the appellant's grounds of appeal to the Full Bench reflect, the jurisprudential basis for such an award is said to be that it is an amount to which the employee is entitled as a matter of contract, that is, under the employment contract on its proper construction. The Commission holds that such an entitlement exists in virtue of an implied term to that effect in employment contracts. We are not in this case asked to consider the correctness of the proposition that there is to be implied into every contract of service as a matter of law a term that the employee will be paid an amount called "redundancy payment" should he become redundant. I must say, however, that it is a proposition which is most unlikely to be accepted in this Court. The general rule is that courts and tribunals do not impose contractual terms on parties. The requirements that must be satisfied for a term to be implied by law in a contract were laid down by Lord Simon of Glaisdale in BP Refinery (Westernport) Pty Ltd v Shire of Hastings [1977] HCA 40; (1978) 52 ALJR 20 at page 26 as follows:

"(1) it [the term] 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."

16 These requirements have been acknowledged as correct in Australia and have been applied at the highest level: Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41 per Deane J at 121. In my respectful opinion, a term that an employer must pay to the employee who becomes redundant a sum of money by way of "reasonable redundancy" as well as give reasonable notice would not satisfy the first three conditions.

17 The question came before this Court in Coles Myer Ltd v Coppin & Ors (supra). In that case, three dismissed employees of the appellant referred a matter to the Commission under s 29(1)(b) in which they claimed "underpayments of benefit under employment contract". Each had been paid salary in lieu of notice and a sum to cover annual leave and long service leave entitlements, and, as well, a redundancy payment calculated according to length of service. The Commissioner found in each case that there was an implied term in each contract of service concerning redundancy and he granted to each of the applicants an increased redundancy payment. The Full Bench dismissed the employer's appeal, upholding the Commissioner's decision that a redundancy clause was implied in the employment contracts and redundancy payments were recoverable as contractual benefits in addition to payments in lieu of reasonable notice. In this Court, the employer's appeal was upheld on the ground that, applying Robe River Iron Associates v Association of Draughting, Supervisory and Technical Employees of Western Australia (Pepler's Case) (1987) 68 WAIG 11, the Commission did not have jurisdiction to deal with the matter. We were informed by Mr Bull, who appeared for the respondents, that the Commission and, in particular the Full Bench, has frequently cited Coles Myer Ltd v Coppin as an authority of this Court to the effect that a redundancy clause is implied into employment contracts. This is not so. The Court decided that it was unnecessary to resolve that issue because the proceedings before the Commission were ineffective for want of jurisdiction and must be set aside on that basis. In the penultimate paragraph of the judgment of the court (Kennedy, Rowland and Nicholson JJ) their Honours said:

"It follows that the Commission has no jurisdiction to deal with the applications. In the circumstances it is unnecessary for this Court to resolve the issue between the parties. In fact in the absence of jurisdiction in the Commission this Court lacks jurisdiction to deal with that issue. It should not, however, be thought that the Court accepts that a term in the terms found in each case can on the evidence before the Commission be implied in the contracts of employment between the parties."

18 Coles Myer Ltd v Coppin does not stand as authority for the proposition that a redundancy entitlement is implied in employment contracts and I am not aware of any other case which is authority for that proposition except decisions of the Commission itself.

19 In Riverwood International Australia Pty Ltd v McCormick [2000] FCA 889; (2000) 177 ALR 193 the Federal Court had to consider whether the provisions of a redundancy policy contained in an employer's manual were incorporated into the employment contract between the appellant employer and the respondent employee. The employee's main case was that the redundancy policy was incorporated into the employment contract by express agreement. The employee also contended that alternatively a redundancy entitlement was implied in the contract by law. The trial Judge found that the redundancy policy set out in the manual was incorporated into the contract by express agreement and also held that the contract contained, or would have contained, an implied term, implied by law, that the employee would receive redundancy benefits if his position was made redundant. The first part of this judgment was upheld by majority (North and Mansfield JJ) on appeal, Lindgren J dissenting. Because they found that there was an express redundancy agreement, the two Judges comprising the majority did not consider it necessary to decide whether the contract would have contained an implied term for redundancy benefits. In his dissenting judgment, however, Lindgren J emphatically rejected the latter proposition. He said (par 63):

"There is no warrant for saying that there is implied by law in all contracts of employment a provision for the making of a special payment by the employer to the employee where the employer terminates the employment because the employee's services have become redundant to the employer's needs."

20 Although Lindgren J was the dissenting Judge, no disagreement is to be found in the judgments of the other members of the court with this statement of the law as to implied redundancy clauses and it is entirely consistent with the judgments in Byrne & Frew v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410. In that case, it was argued on behalf of two airport baggage handlers who were dismissed for pilfering, that there was an implied term in the contract of service that they would not be dismissed in a harsh, unjust or oppressive manner. The High Court held that there was no implied term in the contracts of employment to the effect that the employees would not be dismissed in a harsh, unjust or oppressive manner because the implication of such a term was not necessary for the reasonable and effective operation of the employment contracts and would not have been accepted by both contracting parties as a matter "so obvious that it would go without saying".

21 A redundancy payment clause is, in my opinion, even less necessary and even less obvious than an unfair dismissal clause. The contract of employment is entirely effective without such a clause and, as to obviousness, it cannot be postulated that contracting parties would regard a redundancy clause as so obvious as to go without saying. The employer is bound at general law as a matter of implied agreement to terminate only on giving reasonable notice (Byrne v Australia Airlines Ltd (supra) at 429). It is therefore quite unlikely that the employer would regard it as obvious that, in the case of a redundancy but not otherwise, he should also make a payment called "reasonable redundancy". Neither does it appear reasonable, or equitable, that an employer should be obliged to both give reasonable notice and, as well, pay a redundancy sum. As a general rule, length of service is a consideration in determining the reasonableness of the period of notice: Quinn v Jack Chia (Australia) Ltd [1992] VicRp 37; [1992] 1 VR 567 at 580. Any additional reward for length of service is a matter for express agreement, generally speaking.

22 Returning now to the history of the matter, a rather curious situation appears to have developed with respect to the head of claim for a redundancy payment. As recounted at the beginning of this judgment, Wood C found as a fact that the appellant was not genuinely made redundant but was dismissed for incompetence when it was not fair to dismiss him on that ground. This was not a finding which the appellant welcomed and this is because, in accordance with the practice in the Commission, if there is no genuine redundancy, the Commission holds that there is no requirement at law to make a redundancy payment.

23 Therefore, in order to maintain his claim for a redundancy payment, the appellant included in his grounds of appeal to the Full Bench grounds which challenge the finding of Wood C that there was no genuine redundancy. The appellant's grounds of appeal on this point are as follows:

"Redundancy and Redundancy Payment

The Commissioner:

9. Erred in not deciding that the appellant was made redundant by virtue of his job or position being made redundant.

10. Erred in deciding that the appellant was not entitled to a reasonable redundancy payment as an implied term of his contract of employment, in addition to a period of reasonable notice.

...

13. Erred in not notifying the parties that he was going to consider the question of whether the redundancy was genuine and allowing the parties to make submissions on that matter.

14. Erred in holding that there was an onus on the employer to prove that the appellants redundancy was genuine."

The respondent employer, in effect, conceded these grounds of appeal.

24 The appellant's submissions in support of his contention that he was made redundant, in the sense of genuinely made redundant, are set out in the appellant's written submissions on the appeal at AB 216 et seq as follows:

"69. The Commissioner found that the respondent had not discharged its onus to prove that the appellant's termination was a genuine redundancy ...

70. ...

71. The position or job that the appellant did was clearly different from the two positions or jobs that were created following the restructure even though there may have been some element of overlap between the duties of the appellant's former position or job and the two new positions or jobs ...

72. The applicant's position or job was made redundant and no-one was employed to carry out the functions of the appellant's former position or job.

73. The appellant was not given any alternative duties or functions."

25 The respondent's response to these contentions, in effect conceding that they were correct, are set out at AB 221 as follows:

"8. The Respondent submits that the Appellant was made redundant when he was dismissed on 14 July 2000.

9. The evidence before the Commission is ... overwhelmingly in support of such a conclusion. The job that the appellant was doing prior to the dismissal was made redundant ... by decision ... to separate the functions of Business Development and Credit Analysis from the jobs then performed by the Appellant and Mr Hawkesford. This decision was taken some time early June 2000 and Mr Little offered a choice of jobs to Mr Hawkesford but not to the Appellant.

10. The [appellant's] Contract of Employment created the job of National Agency Manager. That job disappeared with the restructure referred to in paragraph 9."

26 This led all members of the Full Bench to hold that the dismissal was "procedurally" unfair but not "substantively" so. It was not "substantively" unfair because there was a genuine redundancy so that the appellant was going to lose his job in any event (AB 11 par 25 per Sharkey P, AB 17 par 875 per Scott C and Smith C). The Full Bench came to this conclusion on the basis of the appellant's own contention that there should have been a finding of genuine redundancy and the respondent's concession that there should have been such a finding.

Inconsistent claims by appellant for relief

27 Before us, Mr Howlett, who appeared for the appellant, submitted that the Full Bench erred in disposing of this issue in this way. I am not persuaded that it did. Mr Howlett argued that the appellant's contention before the Full Bench that Wood C should have held that he had been genuinely made redundant only affected the question whether there should be a redundancy payment and in pursuing that head of claim, the appellant was not really maintaining that he was, in fact, genuinely made redundant, but was seeking only to take advantage of the reasons given by the respondent for dismissing the appellant. As I understood this submission, it was to the effect that if the employer tells the employee that he is redundant and terminates the employment on that basis, he is liable to make a redundancy payment, even if there was no genuine redundancy; and if the employee can show that it was not a genuine redundancy at all, the employer is also liable to pay compensation on the basis that the dismissal was substantively unfair in that it was not a genuine redundancy. I cannot accept this submission. Quite apart from what I have said about what I would regard as the erroneous notion that an employee who becomes redundant is entitled in law as a matter of implied agreement to a "redundancy payment", I do not see any justification for permitting an employee who has been dismissed to pursue inconsistent heads of claim against the employer.

28 In my opinion, the Full Bench was perfectly correct to approach the disposition of this matter on the basis that it was common ground between the parties that the decision of Wood C that there was no genuine redundancy must be set aside. The employer averred that a redundancy occurred and the employee agreed; there was no relevant dispute on the issue and it was not for the Commission to create one.

29 The significance of this is, of course, that the area of dispute is confined to the loss or injury occasioned by the procedural unfairness in the dismissal, that is, in implementing the redundancy in an unfair manner, including inadequate notice. The respondent accepts that there was unfairness in the manner of effecting the redundancy (AB 222 par 14).

30 As the claim for compensation was confined to compensation for loss or injury caused by the manner of dismissal, the Full Bench was bound to conclude, as the majority did, that Wood C was wrong to proceed to assess compensation as if there was a substantive unfairness.

31 How should the Full Bench have then disposed of the matter? It seems to me that there were two options. The appellant's application could have been sent back to Wood C to reassess the award of compensation on the basis that there was procedural unfairness only and no substantive unfairness. Alternatively, the Full Bench could have proceeded itself to reassess the award of compensation on that basis. The Full Bench decided that this is what should be done and they proceeded to assess the appellant's loss. The majority came to the conclusion that the appellant was entitled to only $14,926.99 and, as this was less than the amount awarded by Wood C, they held that the appeal should be dismissed. In their joint reasons, Scott C and Smith C said that in all the circumstances there should have been three months' notice or three months' pay in lieu of notice, that the payment in lieu of notice should have included an amount for the commissions that probably would have been earned in the three-month period of notice and there should have been a pro rata allowance of superannuation entitlements and, putting all of these together, they found that the appellant's monthly benefits amounted to $6,441.10 (or $19,323.30 for three months). From this, they would have deducted the sum which was paid to the appellant as a payment in lieu of notice, ie, $4,396.32, giving an ultimate figure of $14,926.99. They would not have made any deduction on account of the six weeks' severance pay which the respondent paid to the appellant. The Commissioners said that they would not have brought this to account to the credit of the respondent because it should be regarded as a payment on account of redundancy pay, extinguishing what the respondent's obligation would otherwise have been as regards redundancy pay.

32 On behalf of the appellant, Mr Howlett complained firstly that the Full Bench had no authority to engage in this exercise because there was no appeal by the respondent against the assessment made by Wood C and, in particular, against his finding that the appellant's starting loss should be taken to be 33 weeks' pay, not three months. As to this, the answer is that, having found that Wood C's assessment was based upon a wrong premise, namely, that there was no genuine redundancy, the Full Bench was entitled to embark upon a reassessment of loss for itself or, alternatively, to remit the matter to Wood C for reassessment. It chose the former course and I am not persuaded it was wrong to do so.

Compensation for wrongful dismissal - general principles

33 Mr Howlett sought to contend that the payment of one month's base salary in lieu of notice ought not to have been brought to account to the credit of the respondent in assessing the compensation which the respondent should pay to the appellant because this was a payment of a "contractual entitlement". Furthermore, he contended that in confining themselves to a calculation of the appellant's economic loss, the majority members of the Full Bench failed to have regard for the fact that an award of compensation may extend beyond claims for purely economic loss.

34 As to the first contention, an employer who has wrongfully dismissed an employee, but who has made payments to that employee in lieu of notice or for "severance" is entitled to have those payments credited in the quantification of his liability to the employee arising from the wrongful dismissal. In their essential character, the payments are compensatory, their purpose being to satisfy the employee's claim for damages for breach of the implied term not to terminate except on reasonable notice. They are not payments in consideration for work done. They are not wages earned and accrued due: Automatic Fire Sprinklers Ltd v Watson [1946] HCA 25; (1946) 72 CLR 435 per Dixon J at 466 - 467. That being so, the law requires that they be brought to account in any assessment of overall compensation: Delaney v Staples (trading as De Montfort Recruitment) [1992] 1 AC 687 per Lord Browne-Wilkinson at page 692; Ogilvy & Mather (New Zealand) Ltd v Turner [1996] 1 NZLR 641 at 646 - 647.

35 In Gothard v Mirror Group Newspapers Ltd [1988] ICR 729 at 733, Lord Donaldson MR said, at 692:

"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, ie wrongful dismissal. During the period to which the money in lieu relates he is not employed by his employer."

36 In Delaney v Staples (Trading as De Montfort Recruitment) (supra) Lord Browne-Wilkinson said that this was "the only possible legal analysis of a payment in lieu" where, without the agreement of the employee, the employer summarily dismisses him and tenders a payment in lieu of proper notice. He said:

"The employer is in breach of contract by dismissing the employee without proper notice. However, the summary dismissal is effective to put an end to the employment relationship, whether or not it unilaterally discharges the contract of employment. Since the employment relationship has ended no further services are to be rendered by the employee under the contract. It follows that 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."

37 In light of some of the submissions that were made to us as to how the Commission deals with claims by dismissed employees for monetary payments, it may be helpful, although risking some repetition, here to state what I apprehend to be well-settled general principles of the common law with respect to contracts of service and their termination, and the nature of a claim for "salary" by a dismissed employee.

38 A party to a contract who repudiates it does not bring the contract to an end. The repudiation gives rise to a right of rescission in the innocent party. The innocent party can decline to accept the repudiation and remain ready himself to perform and so keep the contract on foot. On the other hand, he may elect to accept the repudiation, and if he does so, it is that election which rescinds the contract. These principles are of general application and apply to employment contracts. In the case of employment contracts, a wrongful dismissal is a repudiation by the employer, which does not of itself rescind the contract. However, what must be understood is that the dismissal, although wrongful, does put an end to the employment relationship, because a dismissed employee has no legal right to insist on being allowed to work. Employment contracts are not specifically enforceable as a general rule: J C Williamson Ltd v Lukey [1931] HCA 15; (1931) 45 CLR 282 especially per Starke J at 292 - 293. A dismissed employee therefore cannot claim to be paid wages, because wages are a payment for work done under the contract of service: Automatic Fire Sprinklers Pty Ltd v Watson (supra) per Dixon J at 466 - 467. The only consequence of the principle that a repudiation does not of itself terminate the contract of employment is that the employee can continue to proffer his services in the hope that the employer will change his mind and if the employer does take the employee back, there may be continuity of employment under the original contract, rather than a fresh engagement under a new contract: Barnsley v Taylor (1868) 37 LJQB 39. The fact that the employment contract itself may survive a wrongful dismissal does not mean that the wrongful dismissal is ineffective to end the employment relationship. The wrongful dismissal, although it is wrongful, is not a nullity. It does end the employment relationship in the sense explained; that is, in the sense that refusal by the employer to allow the employee to do the work the subject of the employment contract disentitles the employee to wages. Because specific performance is not a remedy which is available to the employee, he is left with a claim for damages for breach of contract: White & Carter (Councils) Ltd v McGregor [1961] UKHL 5; [1962] AC 413, especially at 429; Delaney v Staples (Trading as De Montfort Recruitment) (supra) especially per Lord Browne-Wilkinson at 692 - 693; Ogilvy & Mather (New Zealand) Ltd v Turner (supra).

39 In the absence of express terms in the contract of employment providing for special payments on termination and where summary dismissal is not justified, the single obligation on the employer in terminating the contract is to give reasonable notice and if he fails to do so, there will be a wrongful dismissal entitling the employee to the single remedy of damages. The general rule with respect to the quantification of damages for wrongful dismissal is that the starting-point is the gross amount that would have been earned during the period of reasonable notice had the contract continued. From this must be deducted the gross amount actually received by the employee during that period: Kilburn v Enzed Precision Products (Australia) Pty Ltd (1988) 4 VIR 31 at 33 - 34. The amounts to be deducted include all payments made to the employee by the employer (including payments for leave which is due to the employee) as well as all remuneration earned by the employee in other employment: Quinn v Jack Chia (Australia) Ltd (supra) at 581. (Of course, the employee will be entitled to have the benefit of any accrued rights such as wages actually earned, but not paid.) Even if an employee who is wrongfully dismissed elects to keep the contract of employment on foot, he or she cannot claim wages in respect of any period after the wrongful dismissal because the right to receive wages is dependent on the services having been rendered: Byrne v Australian Airlines Ltd (supra) per Brennan CJ, Dawson and Toohey JJ at 427 - 428. Furthermore, the employee is under a duty to mitigate. He must act reasonably to minimise the loss which the wrongful dismissal has occasioned to him: Gunton v Richmond-upon-Thames London Borough Council [1981] 1 Ch 448 at 468.

40 In my opinion, the only error which the majority Commissioners made was in failing to bring to account to the respondent's credit the amount paid as severance pay. On the principles stated above, that, too, must be taken to be a payment made on account of the respondent's liability to pay damages for failure to give reasonable notice. But that was an error which favoured the appellant and is an error not sought to be corrected by the respondent in its appeal.

41 As to the contention that the majority members of the Full Bench confined themselves to a calculation of economic loss, it may be acknowledged that in settling an industrial matter involving a claim of unfair dismissal, the Commission is not necessarily confined by the common law rules governing the assessment of damages (economic loss) for wrongful dismissal: FDR Pty Ltd v Gilmore (1998) 78 WAIG 1099 But those rules provide the prima facie measure of the "amounts to which the claimant is entitled" within the meaning of s 23A(1)(a). There was, in this case, no evidence that the appellant had sustained any other loss. The appellant did not put forward, so far as I can tell, any case in support of non-economic loss or injury.

Was the Full Bench correct to dismiss the appeal or should it have reduced the appellant's award?

42 The next question (which arises in the respondent's appeal) is, having decided that the amount of compensation assessed by Wood C was

excessive, what should the Full Bench have done? Should the award below have been set aside and the lower amount substituted, or was the Full Bench correct to simply dismiss the appeal?

43 Mr Howlett argued that, because the respondent did not appeal against the award of $26,251.10, it would not have been proper for the Full Bench to set that award aside and make a lower award, and its decision not to do so was correct. I think this submission must be accepted. It would be a very unsatisfactory state of affairs if an appellant who goes to the Full Bench complaining that an award of compensation for unfair dismissal is too low is at risk of having his or her award reduced notwithstanding that there is no contention by way of appeal on the part of the employer that the award should be reduced. It would seem to me to offend fundamental principles of natural justice that an appellant should be at risk of losing the award below, without being put on notice that there would be a contention to that effect, and without having particulars of the grounds of that contention. It seems to me in any case that the point was decided by this Court in Cousins v YMCA of Perth [2001] WASCA 374; (2001) 82 WAIG 5 per Kennedy J at pars 47 - 50 where his Honour held, in effect, that the power of the Full Bench to vary a decision can only be exercised in favour of a successful appellant or "cross-appellant". Applying that decision to this case, there was no power to vary the award downwards in favour of the respondent who had not lodged an appeal (by way of "cross-appeal") attacking the decision. The Industrial Relations Act makes no provision for a cross-appeal as such so that a respondent who wishes to contend that the decision should have been more favourable to him must himself lodge an appeal. Therefore, I use the expression "cross-appeal" only for convenience, recognising that it is not strictly correct to use the expression in this context.

44 What I have just said disposes of the respondent's "cross-appeal" in which the respondent pleads that, having come to the conclusion that the proper award was only $14,926.99, the order made by Wood C should have been varied to that figure.

45 For these reasons, I would dismiss both appeals.

46 SCOTT J: In this matter I have had the advantage of reading in draft the reasons to be published by the presiding Judge. I agree generally with the reasons of the presiding Judge and with the orders proposed by him.

47 The appellant, Peter Dellys ("Mr Dellys"), brought an application for unfair dismissal against Elderslie Finance Corporation Ltd ("Elderslie") in the WA Industrial Relations Commission under s 29(1)(b(i) and (ii) of the

Industrial Relations Act (1979) ("the Industrial Relations Act"). The application was for reinstatement of his position or, alternatively, compensation.

(1) An application for compensation for unfair dismissal. The applicant contended that he had been both substantially and procedurally unfairly dismissed.

(2) An application for loss of contractual benefits arising from his signed contract of employment.

49 The matter came before Wood C who delivered his decision on the matter on 20 June 2001: Dellys v Elderslie Finance Corporation Ltd [2001] WAIRC 03074.

50 After analysis of the facts and referring to authority, Wood C said at [28]:

"The facts in this matter lead me to doubt that even the first stage of a redundancy was achieved. Section 40 of the Minimum Conditions of Employment Act 1993 defines 'redundant' as -

being no longer required by an employer to continue doing a job because, for a reason that is not a usual reason for change in the employer's workforce, the employer has decided that the job will not be done by any person."

I find, in view of section 40 of the Minimum Conditions of Employment Act and the facts in this matter, that the respondent has not discharged their onus to prove that this was a genuine redundancy. This is a case where largely Mr Hawkesford and Mr Dellys did the same duties (business development and lending). This is in my view the evidence of Mr Hawkesford which I accept. These duties were then split so allowing Mr Hawkesford to concentrate on one set of duties (business development) while another position concentrated on the other set of duties (lending)."

52 It follows that the Commissioner who heard the matter concluded on the facts before him after trial that there was no genuine redundancy. That led the Commissioner to the conclusion that Mr Dellys' dismissal was both procedurally and substantively unfair. Wood C cited authority for reaching that conclusion.

53 After taking into account the various components of Mr Dellys' claim, Wood C came to the conclusion that Mr Dellys should be awarded $26,251.10.

54 Mr Dellys appealed to the full bench of the Industrial Commission, claiming that he was entitled to a greater sum because, in addition to the amount awarded for unfair dismissal, he was also entitled to a further sum for loss of contractual benefits arising out of his contract of employment.

55 In the notice of appeal in relation to the redundancy payment, ground 9 of the grounds of appeal was:

(9) erred in not deciding that the appellant was made redundant by virtue of his job or position being made redundant."

56 The reason for challenging the finding that redundancy had not been established was to support the claim for contractual benefits.

57 In the decision of the full bench a majority (Scott and Smith CC) reached the conclusion that the amount awarded by Wood C was in excess of the amount that should have been awarded. Those Commissioners would have awarded Mr Dellys $14,926.99. Because there was no cross-appeal by Elderslie, the majority therefore concluded that the appeal should be dismissed so that the award of Wood C remained.

58 The President in dissent would have allowed the appeal and awarded Mr Dellys $39,719.

59 In the argument before the full bench it was conceded that Mr Dellys's job was made redundant within the statutory and common law definition. That concession was, of course, contrary to the decision of Wood C. The effect of that concession was that the full bench had to re-assess the award of compensation.

60 Following the decision of the full bench, both Mr Dellys and Elderslie lodged appeals to the Industrial Appeal Court (IAC 1 and IAC 2 of 2002 respectively).

61 In Mr Dellys's appeal in IAC 1 of 2002 Mr Dellys contends that not only should he be awarded the amount assessed by Wood C for unfair dismissal, but he should also be allowed a sum for loss of contractual benefits.

62 The difficulty with that contention was revealed in the course of argument before us. Mr Howlett, on behalf of Mr Dellys, contended that, for the purposes of the unfair dismissal component of the claim, there was no genuine redundancy so that the decision of Wood C should stand. For the purposes of the contractual benefits claim, however, he maintained that there was a genuine redundancy, at least from the point of view of Mr Dellys' employer, Elderslie.

63 The inconsistency of those two claims is apparent. Either there was a genuine redundancy or there was not, and that was a question of fact. It is not for the Industrial Appeal Court to determine questions of fact because the jurisdiction of the Industrial Appeal Court is confined by s 90 of the Industrial Relations Act which provides:

"90(1) Subject to this section, an appeal lies to the Court in the manner prescribed from any decision of the President, the full bench, or the Commission in Court session on the ground that the decision is erroneous in law or is in excess of jurisdiction but upon no other ground."

64 It is not for the Industrial Appeal Court to determine or redetermine questions of fact. The matters of fact were determined by Wood C. This Court is required to act upon those facts.

65 It follows, in my view, that because there was no appeal by Elderslie against the decision of Wood C, Scott and Smith CC were justified in reaching the conclusion that although they would have assessed the award for Mr Dellys at less than the sum fixed by Wood C, the appeal should be dismissed.

66 The position is not altered because of the fact that there are two appeals before the Industrial Appeal Court. There was no appeal by Elderslie against the decision of Wood C and, as a consequence, Mr Dellys was never put on notice by a cross-appeal that Elderslie were contending that the award should be reduced. It is no answer to that proposition to say that Elderslie, in their submissions to the full bench, contended that the award should be reduced. Absent an appeal by Elderslie, the full bench was in no position to reduce the award: Cousins v YMCA of Perth [2001] WASCA 374; (2001) 82 WAIG 5 at [47 - 50].

67 It follows, in my view, that no error has been demonstrated in the conclusions reached by the full bench so that both appeals should be dismissed.

68 HASLUCK J: I have had the advantage of reading in draft the reasons to be published by the presiding Judge. I agree that both appeals should be dismissed for the reasons given by his Honour.