Haley v Public Transport Corporation of Victoria [1998] VSC 132

Supreme Court of Victoria|1998-11-13|Before: Ashley, J.

Wrongful dismissal - appointment during pleasure - extent of modification of power of dismissal without notice. Wrongful dismissal - reasonable period of notice Wrongful dismissal - damages - whether retrenchment benefits and/or accident compensation payments should be treated as a contra

The Plaintiff, Thomas Haley, commenced his relevant working life on 14 January 1971 when he signed indentures which apprenticed him as electrical fitter. His employer, pursuant to the Railways Act 1958, was the Victorian Railways Commissioners.

In due course the plaintiff completed his apprenticeship. He continued in the service of the Railways (I shall, as a matter of convenience, sometimes describe it as employment) as an electrical fitter. Later his job classification was changed to that of signals maintenance technician. His work remained the same.

In 1981 the plaintiff applied for and obtained a position at Seymour. He held that position until his employment was terminated effective from 14 April 1989.

When his employment was terminated the plaintiff was paid what were called retrenchment benefits. His base weekly gross pay at the time was $460.10. He was paid an amount which represented 4.4 weeks pay for each completed year of service or pro rata thereof - from which was deducted his accrued retirement benefit under the scheme established by the Transport Superannuation Act 1988. That benefit was also paid. In substance if not in form, the plaintiff received an amount equivalent to 4.4 weeks pay for each completed year of service or pro rata thereof. Having been employed for just over eighteen years by the Victorian Railways Commissioners and their statutory successors, he received an amount equivalent to about 79½ weeks gross pay at the base rate. Of that sum, $11,403 was the superannuation component. If that was deducted from the total amount paid, the number of weeks gross pay at the base rate represented by the balance was about 55.

In addition to the retrenchment benefits to which I have been referring it appears that the plaintiff received accrued long service leave amounting to $3,773.

When the plaintiff's termination was first broached by memorandum dated 23 February 1989, when it was formally notified by memorandum dated 30 March 1989, and when it became effective on 14 April 1989, the plaintiff was in receipt of payments under the Accident Compensation Act 1985. The evidence was that he had sustained compensable injuries whilst in the service of the Railways. The plaintiff continued to receive such payments for about two years after he was terminated.

The plaintiff's employer at the time when his employment was terminated was the State Transport Authority. That body was the creature of the Transport Act 1983, by which Act the Railways Act was repealed. Further by that Act, persons previously employed under the provisions of the Railways Act became employed by the Authority. Section 241(1) provided that such persons were to be employed with terms and conditions no less favourable than the terms of their prior employment, and that any accrued entitlements were to be carried over.

The defendant in this proceeding is the Public Transport Corporation. As at 1 July 1989 the Authority was abolished and the Corporation became its successor in law: see s. 232 of the Transport Act as amended by Act 44/1989. It was not in debate that any claim the plaintiff might have against the Authority was preserved by s. 233(e) of that Act as amended in 1989.

The plaintiff's employment was terminated on the footing that he was surplus to requirements. His termination followed a protracted period in which he had been in dispute with his employer. There were a number of strands to that dispute. A central issue was whether the plaintiff was in truth surplus to requirements, or whether that assertion was a smoke screen hiding personal animosity on the part of one or more of his superiors towards him.

In declaring the plaintiff surplus to requirements and terminating his employment the defendant relied upon the provisions of the Public Transport Transfer Redeployment & Retraining Programme. The plaintiff contended by his statement of claim that the programme was not part of his contract of employment. So, he said, the defendant was not entitled to terminate his employment by reference to that programme, and in particular by asserting that he was surplus to requirements.

According to the plaintiff's claim his employment was terminated in breach of contract for two reasons: first, he was contractually entitled to a "job for life" subject only to the employer having cause - by reason of misconduct on his part - to dismiss him. The programme was no part of his contract of employment; and the only other basis for termination was that which I have just stated. The employer had not purported to dismiss him for cause. So it was in breach of contract. Second, there was a contractual bar to the employer dismissing him during incapacity resulting from compensable injury.

Mr B G L Shaw of counsel for the plaintiff, did not submit, if the first breach relied upon was made out, that his client was entitled to damages which took as their starting point wages that would have been earned by his client had he remained in the Authority's employment for the rest of his working life. He submitted instead that the only means of assessing damages was by determining what would have been a reasonable period of notice, and then converting that period into damages on the basis of the plaintiff's gross weekly wages at the time of termination. He told me that his research had indicated that the longest period of notice held by a court to be reasonable was two years: Jager v Australian National Hotels Pty Limited (Slicer J, Supreme Court of Tasmania, judgment 12 May 1998, unreported). That decision, Mr Shaw told me, is under appeal. Notwithstanding the outer limits of what had hitherto been held to be a reasonable period of notice, Mr Shaw submitted that in the particular circumstances a reasonable period of notice would be in excess of three years. He submitted that in calculating damages I should ignore the retrenchment benefits paid to his client, or at least the superannuation component. He submitted also that I should ignore the evidence that the plaintiff had received accident compensation for about two years after his termination.

In connection with the claim based upon the second alleged breach of contract, Mr Shaw submitted that his client had been denied the opportunity of obtaining superannuation benefits available in the event of retirement on the ground of disability. Those benefits were said to be a pension for life; see s. 31 of the Transport Superannuation Act 1988.

At the outset of the trial Mr N. Green of counsel for the defendant conceded that the programme had not been part of the plaintiff's contract of employment. It followed that the plaintiff's termination in purported reliance on that programme was flawed.

It was a necessary consequence of Mr Green's helpful narrowing of the issues for my consideration that from the perspective of neither party did the question whether the plaintiff was in fact surplus to requirements require examination.

The defendant's case, putting the issue of dismissal of the plaintiff whilst he was in receipt of accident compensation benefits to one side, was this: that it was entitled to terminate the plaintiff's employment at will, and without giving notice. He was employed at pleasure. That was the basis upon which he had been employed under the provisions of the Railways Act. That basis of employment continued on into his employment by the Authority.

The further threads of the defendant's case were these:

* There was no term of the plaintiff's contract of employment that he should not be dismissed whilst in receipt of accident compensation payments. The term was said by the plaintiff to derive either from portion of a document described as "State Transport Authority Personnel Policies and Practices", which did not form part of the plaintiff's employment contract; or else from an agreement made between the authority and a number of unions (of one of which the plaintiff was a member) which was not registered in any industrial forum and was no part of the plaintiff's contract. In the latter connection Mr Green relied upon Ryan v The Textile Clothing & Footwear Union of Australia and Another [1996] VicRp 67; [1996] 2 VR 235.

* If, contrary to its primary submission, there was silence as to the circumstances in which the plaintiff's employment could be terminated, a term that reasonable notice be given should be implied. Were such a term implied, notice - two weeks - had in fact been given. That was adequate.

* If reasonable notice was required, and if a reasonable period of notice exceeded two weeks, a period of notice of one year would be the outer limit.

* In any calculation of damages, credit should be given for the (so-called) retrenchment benefits received by the plaintiff. Mr Green relied upon the judgment of Moore J in Black v Brimbank City Council (1998) 152 ALR 491. He submitted that, to the extent that the judgment of Jacobs J in Thorpe v South Australian National Football League (1974) 10 SASR 17 at 36 suggested to the contrary, it should not prevail. He submitted that I should take account of all retrenchment benefits received, not just the non-superannuation component.

In my opinion the plaintiff's claims, which I approach strictly upon the basis on which they were argued on his behalf, fail at the point of quantification. They do so whatever else may be their strengths and weaknesses. Later, I will address some of the liability aspects. But for the moment I go to the issue of damages.

Putting to one side to the plaintiff's claim founded upon the alleged compensation agreement, both parties contended that if the defendant had breached the plaintiff's contract of employment by terminating him as it did (both parties submitted that there was such a contract), damages should be assessed by reference to the length of a reasonable period of notice. There was a debate as to the appropriate length of that period. In this connection, Mr Shaw focused upon the plaintiff's long service with the defendant; his expectation that, but for dismissal for cause, he had a job for life; and the specialised, non-portable skills that he had acquired to carry out his employment with the defendant.

Mr Green submitted that the first and third of those matters were the considerations most favourable to the plaintiff. He referred to my judgment in Quinn v Jack Chia (Australia) Ltd [1992] VicRp 37; [1992] 1 VR 567 and submitted that other pertinent considerations which I there identified were not to the present plaintiff's advantage.

In Quinn, at 580, I listed pertinent considerations. The matters to which I referred derived from Macken, McCarry & Sappideen, The Law of Employment, 3rd Ed., pp157-158; see now 4th ed. at pp 166-167. So, I referred to the duration of the hiring (for example, weekly), industry practice, the seniority of the position held, the importance of the position held, the size of the salary, the worker's age, the worker's length of service, what the worker gave up to come to the present employer, and the worker's prospective pension or other rights. To those considerations may be added the expected period of time it would take the employee to obtain alternative employment: Macken et al, 4th ed., p.167. It also is relevant to consider the period it was likely, apart from the dismissal, that the worker would have continued in the employment: Quinn at 580. That will not necessarily be indicated by the terms of a written contract; or by the duration of the hiring.

In the present case it is certainly in the plaintiff's favour that he had a long period of service with the defendant, and that he acquired in order to perform it skills that were not portable. Further, even assuming that it was not a term of his employment that he had a "job for life", I have no doubt that this was the common expectation when he commenced that employment; and that such expectation survived into the period of his employment by the Authority in lieu of the Victorian Railways Commissioners (later, Board).

It was not put for the plaintiff, although perhaps it might have been, that the provision for retrenchment benefits made by the programme by reference to which the plaintiff in fact received such benefits was an indication of industry practice - albeit that it was not incorporated into the plaintiff's contract of employment. The programme provided for retrenchment packages "only in exceptional circumstances and where all other appropriate measures have been unable to resolve the surplus situation". It could give no guidance to industry practice in any but those circumstances. In my opinion the plaintiff could not say, despite being paid what were called retrenchment benefits, that in substance his circumstances fitted the description. He was in fact offered redeployment on a number of occasions. He steadfastly refused such offers. His position was that he was entitled to remain where he was; and that was the end of it.

Tending against the period of reasonable notice being lengthy, the plaintiff did not hold a very senior position, and his wages were not large. He was still a young man when his employment was terminated, But for the effect - direct or indirect - of injuries, it should not be supposed that he would have found it difficult to obtain employment, before long, at a comparable wage. He did lose the opportunity of building up his superannuation entitlement - but he received his accrued retirement benefit under the scheme of which he was a member.

In my opinion, in all the circumstances described, a reasonable period of notice was in the order of six months. Whilst direct comparison is not really possible, I consider that the circumstances in Quinn favoured a considerably longer period of notice than the present case; likewise the circumstances in Jager. It is, I add, not clear that in Jager judgment was entered for the amount calculated by Slicer J at 15; see at 16. But if it was, then in what seems to have been a case which reflected extremely badly upon the employer, notice was calculated at the rate of four weeks for each year of service. Thus was the period of two years notice arrived at.

The parties were in dispute whether any part of the so-called retrenchment benefits need be brought to account in the event that the plaintiff was entitled to damages for want of reasonable notice. The highwater mark of the defendant's case was that all the so-called retrenchment benefits should be brought to account if damages were to be assessed. The highwater mark of the plaintiff's case was that none of those benefits should be brought to account. In resolving the dispute the characteristics of the different components of the benefits ought be identified.

One of the components was the plaintiff's accrued retirement benefit under the superannuation scheme of which he was a member. Mr Shaw submitted, in effect, that the strongest argument for not taking the moneys paid into account applied in respect of the superannuation component. Mr Green conceded, in effect, that the defendant's position was weakest in respect of that component. In my opinion those submissions were correct.

I should say this about the superannuation component, which amounted to $11,403: The plaintiff gave evidence that he joined the relevant fund at the earliest possible convenience and with the maximum amount allowable out of his pay. Under the Transport Superannuation Act as it then stood, a worker who was retrenched (that concept was defined by s. 3(1)) was entitled to a lump sum equal to "the accrued retirement benefit" at the time of retrenchment. That benefit depended, largely, upon the member's rate of contribution to the fund from time to time: see s. 29. The effect of the plaintiff's evidence is that his rate of contribution must have been either 5 or 7.5% of his salary. "Salary" was defined by s. 3(1). What that meant, in the plaintiff's case, was not revealed by the evidence. It may have meant the weekly salary of $460.10.

The evidence was skimpy. The amount of the benefit must have been more than the amount of the plaintiff's contributions. Compare the percentages in ss. 28(1) and 29(1). Beyond that it is not possible to go. But in the end, I do not think that the evidentiary deficiencies are critical. It is at least clear that the benefit was significantly made up of the plaintiff's contributions and earnings thereon; and that payment upon retrenchment was not dependent upon ensuing unemployment or underemployment.

In support of his preferred position concerning benefits paid to the plaintiff, Mr Green relied particularly upon Black v Brimbank City Council, op cit. The circumstances of that case and the circumstances of the present case were not identical.

There, the plaintiff's contract of employment provided for retrenchment, of which notice was required and in which event severance entitlements were to be paid. The contract also provided that there should be no retrenchment during a certain period. The plaintiff was retrenched in breach of the latter provision. He was paid severance benefits which accorded with his contractual entitlement; although, of course, they were not paid in pursuance of the contract.

In the present case, by contrast, it is common ground that there was no provision for retrenchment or for payment of retrenchment benefits in the plaintiff's (assumed) contract of employment. The plaintiff was paid moneys as if there was such a provision. De facto, if not de jure, the moneys he was paid had the character of retrenchment benefits.

I go back to Black's case, upon which Mr Green relied. The severance entitlements there paid were as follows:

* Severance pay, being pay in lieu of notice and redundancy pay - each of which was calculated by reference to years of service;

The question to be decided was whether "allowance should be made for the payments made to Mr Black by reference to the agreement...." (at 495). It appears that in considering this question Moore J put to one side certain accumulated leave entitlements which had also been paid to the plaintiff.

His Honour noted that the starting point for the plaintiff's damages claim was benefits foregone under the contract, which had - from the time of its termination in fact - another sixteen months to run. Those benefits were, at least mainly, the earnings that the plaintiff could have expected to recover in that period.

The question was whether the moneys paid on severance should go in reduction or extinguishment of damages that would otherwise be awarded. A signpost to the resolution of the problem lay in the rationale of severance pay.

His Honour considered the expressed rationale for making such payments. He cited what had been said by the Australian Conciliation and Arbitration Commission in the Termination, Change and Redundancy case (1984) 8 IR 34 at 72-73; (see at 152 ALR 504 -505). Thus:

"We do not believe that the primary reason for the payment of severance pay relates to the requirement to search for another job and/or to tide over an employee during a period of unemployment ... we prefer the view that the payment of severance pay is justifiable as compensation for non transferable credits and the inconvenience and hardship imposed on employees....."

Moore J made these pertinent observations about that statement (at 505):

"It must be borne in mind that these observations were made in a context where federal awards generally prescribed that an employee's employment could be terminated on one week's notice: see (1984) 8 IR at 39. This is of some significance in the present case. The Commission, in the preceding extract, was not saying that severance pay could in no way nor in any circumstance be referable to the loss of future income. Rather it was saying that because the community had assumed the burden of making payments to the unemployed whose employment, as a broad generalisation, could be terminated on one week's notice or payment in lieu, the rationale for awarding severance pay had to be founded on considerations other than income maintenance at least as a primary reason. The considerations are those identified in the final paragraph of the preceding extract. However, in rejecting the notion of income maintenance being the primary reason, the Commission cannot be taken to be impliedly characterising the payment of severance payments to an employee on a fixed term contract of considerable length as a payment entirely different in character and unrelated to the income that would have been earned during the residue of the contractual term. It was simply not an issue the Commission was called upon to consider. Indeed, it appears to me that the scheme adopted by the Commission was to confer an entitlement to severance pay in circumstances where the employer had a pre-existing award right to lawfully terminate the employment on short notice which probably, in many if not most cases, would have corresponded with the contractual right to terminate on notice. That is, one week's notice ".

In analysing the rationale for severance pay his Honour adverted to the nature and purpose of a period of notice or payment in lieu. In Fryar & Simpson v Systems Services Pty Ltd (1996) 137 ALR 321 von Doussa J had said this:

" a period of notice is to give an employee the opportunity to adjust to the change in circumstances which is to occur and to seek other employment".

Citing the 1984 Termination, Change and Redundancy case, his Honour had distinguished between that nature and purpose and the nature and purpose of a severance payment. The distinction, I think, Moore J would say, is not as absolute as von Doussa J suggested. The nature and purpose of notice, or payment in lieu, may be accepted; but that does not mean that there is no element of income support in severance payments.

Moore J discussed a series of English cases which considered an issue similar in kind to that raised by the case before him. He found Baldwin v British Coal Corporation (1995) IRLR 271 most useful. The propositions there advanced by counsel, and accepted by Garland J were these:

* The general rule is that a redundancy payment does not fall to be deducted from damages for personal injuries or wrongful dismissal. Save in exceptional circumstances it is within the category of collateral benefits defined in Parry v Cleaver [1969] UKHL 2; [1970] AC 1;

* Where the legal wrong (short notice) led to the plaintiff receiving a redundancy payment he would otherwise not have received, it should be deducted from damages awarded in respect of the wrong.

The second of those propositions concentrates not on the nature of such a payment - that is, whether its rationale is (at least partly) income support - but upon coincidence of circumstances generating the right to payment of damages and receipt of the payment.

His Honour's conclusions were these (at 505 - 506):

"Brimbank's liability for damages arises because, it is to be assumed for present purposes, it breached the contract of employment by terminating it other than in the manner contemplated by the contract itself. This act would expose it to damages which, prima facie, are the benefits Mr Black would have derived while employed for the residue of the contractual term. However, the act which constituted the breach was also the act that founded the entitlement of Mr Black to the payment of severance entitlements under the agreement. Had the contract not been breached by its premature termination and it had run its course and the employment terminated by the effluxion of time, there would have been no payment under the agreement. The purpose of compensatory damages, whether in actions in tort or contract, is to place the injured party in the same position he or she would have been in had the contract been performed or the tort not committed: see Haines v Bendall [1991] HCA 15; (1991) 172 CLR 60; 99 ALR 385, Mason CJ, Dawson, Toohey and Gaudron JJ at 63. In contract, that is the embodiment of the principle in Robinson v Harman [1848] EngR 135; (1848) 1 Ex 850: see Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR at 80; [1991] HCA 54; 104 ALR 1 per Mason CJ and Dawson J, at CLR 98 per Dawson J, at CLR 134 per Toohey J, at CLR 148 per Gaudron J and at CLR 161 per McHugh J. The payment of severance entitlements arose directly from the act which constituted the breach for which compensatory damages are now sought. It would, in my opinion, be inconsistent with the purpose for which compensatory damages are awarded to ignore the payment of severance entitlements. Putting the matter slightly differently the damages are designed to put the party not in default in the same position as he or she would have been had the contract been performed: see Wenham v Ella (1972) 127 CLR 456 at 460 per Barwick CJ and 471 per Gibbs J." and (at 506-507): "In my opinion, there is no reason in principle why severance payments should, in a case such as the present, not be brought to account in assessing damages, even though the rationale for severance payments has been said to be, at least as a primary reason, not to provide income during a period of employment. The awarding of damages at common law for wrongful dismissal (putting aside questions of damages for physical harm arising from psychiatric illness) in relation to a contract for a fixed term has the practical effect of providing the aggrieved employee, who has sought to mitigate his or her loss by seeking other employment, with the income and other monetary benefits that would have been earned or received for the residue of the contractual term but during which the employee was unemployed or underemployed in the sense of employed in less remunerative work. The practical effect of the severance payments to Mr Black in the present case was to provide him with compensation for the loss of a job, with a corresponding loss of the opportunity to earn income, and the associated trauma. It was a job which, in terms, had a finite period to run and for which he would derive finite financial benefits. In my opinion, certain of the payments made by reference to the agreement were made to compensate for losses sufficiently similar in character to the loss for which damages are awarded (and claimed in this case) to warrant those payments being brought to account in assessing damages. They are the severance payment of $114,285.02 (though some discount might need be made for that component in that it is intended to relate to inconvenience and hardship of a non material kind as that component may be materially different in character to the loss for which damages are awarded at common law), the payment of $18,095.13 for unused accumulated sick leave that might have been taken during the residue of the contractual term, the payment of $11,904.69 for a period of notice that otherwise would have been worked had the contract run its course and the payment of $26,760 for loss of motor vehicle usage which would have been enjoyed during the residue of the contractual term, and by reference to which the claimed damages have been calculated. Each of these amounts broadly reflects a component, arising directly or indirectly, in the sum claimed by way of damages".

In Australia, the problem posed by receipt of what have been called collateral benefits has been particularly exposed in torts cases. In Redding v Lee [1983] HCA 16; (1983) 151 CLR 117 statements of principle by Dixon CJ and Windeyer J in National Insurance Company of New Zealand Ltd v Espagne [1961] HCA 15; (1961) 105 CLR 569 were adopted. Those statements were not couched in identical language. That reflected the acceptance by each of those judges that it was very difficult, if not impossible, to enunciate a rule capable of exhaustive application. Dixon CJ proposed that some collateral advantages accruing to an injured person should be excluded from consideration because, although they were conferred because he was intended to enjoy them in the events which had happened, they were conferred both independently of the existence of a right of redress against another and were not provided in relief of any liability of that other to compensate him. His Honour instanced benevolent subscriptions, and the proceeds of personal insurance taken out by an injured person. Windeyer J said that benefits received by a plaintiff from a source other than the defendant were not to be regarded as mitigating his loss if: (a) they were received or are to be received by him as a result of a contract he had made before the loss occurred and by the express or implied terms of that contract they were to be provided notwithstanding any rights of action he might have; or (b) they were given or promised to him by way of bounty, to the intent that he should enjoy them in addition to and not in diminution of any claim for damages.

In Tuncel v Renown Plate Company Pty Ltd [1976] VicRp 50; [1976] VR 501 the Full Court anticipated in respect of unemployment benefits the conclusion reached by the High Court in Redding. Referring to the distinction drawn by Dixon CJ in Espagne, the court expressed the opinion (at 508) that the basis of the distinction lay "in the nature of the benefit and the purpose of the payment". That formulation found favour in Redding. Mason and Dawson JJ put the matter this way (at 137):

"...the issue turns on the character and purpose of the particular financial benefit which the plaintiff receives: Was the benefit conferred on him independently of any right or redress against others and so that he might enjoy the benefit even if he enforced the right?"

Professor Luntz, Assessment of Damages, 3rd Ed., summarises the authorities as follows (at paragraph 8.1.15):

"In seeking the distinguishing characteristic the courts have looked to the nature (or character) and purpose of the payment. It is necessary to characterise the benefit to see whether it is intended to meet the very loss for which damages are claimed under a particular head; if it is, then it will be deductible; otherwise it will not be."

The last portion of that passage is consistent with the proposition, of general application, that a benefit should be set off only against a particular loss of the same nature which is to be taken into account in the assessment of damages: Public Trustee v Zoanetti [1945] HCA 26; (1945) 70 CLR 266, Bulut v Koksal [1988] VicRp 34; [1988] VR 241 (FC).

Notwithstanding the elucidation of principle, its application has very much proceeded on a case by case basis. Recourse has been had to what is just and reasonable, a concept referred to in Parry v Cleaver, op cit.

In determining whether all or some of the benefits paid to the plaintiff in the present case ought to be set against any claim he may have to damages, it appears to me that Australian authorities require that there be focus, in the first instance, upon the correspondence, or lack of it, between the subject matter addressed by a benefit and a possible head of damage. It does not appear that the true starting point is to ask whether the right to damages and the receipt of the benefit have their genesis in a common legal wrong. It does not seem, indeed, that correspondence of the latter type has been thought decisive in this country (except in Black's case) in determining whether particular benefits should be brought to account. Sufficient correspondence has been discerned, in claims for damages for personal injuries, between those claims and wages or sick pay received during incapacity; but not between such claims and receipt of superannuation in the event of retirement on ground of disability; or between such claims and receipt of a disability pension.

In Black, Moore J considered that the severance payments were coloured by the fact that the plaintiff would not have received them if the defendant had not breached the contract so as to give the plaintiff a damages claim. Their practical effect, his Honour said, was to provide the plaintiff with compensation for the loss of a job with the corresponding opportunity to earn income. In his Honour's opinion certain of the payments were made to compensate for losses sufficiently similar in character to the loss for which damages were claimed to warrant those payments being brought to account.

It might be thought just and reasonable that severance payments be brought to account in a case where it could be said both that the payments had been made because the employer was in breach of contract; and that the payments would not have been made at all had there been no breach.

Just and reasonable it may be to take the payments into account in such a case. But to do so, in my opinion involves doing one of two things: either,

* creating a correspondence between the subject matter addressed by the benefit and a possible head of damage by reason of identity of cause of the payment of the benefit and a claim for damages; or,

* accepting that there is no true correspondence of subject matter, but determining that the benefit should nonetheless be taken into account because there is identity of cause, and because it would be just and reasonable to do so.

In my respectful opinion, identity of the subject matter is not to be found in identity of cause; whilst the second possible approach is not consistent with the principles expounded by the High Court.

Mr Green drew to my attention, in connection with the present issue, to certain remarks made by Jacobs J in Thorpe v South Australian Football League, op cit, at 36. In that case his Honour held that the plaintiff's contract was terminable on reasonable notice and that the reasonable period of notice was six months. In fact, three months notice had been given and the plaintiff had been offered certain additional benefits - long service leave and superannuation - in excess of his actual entitlement. The plaintiff had in fact refused the defendant's offer - so he had not received those ex gratia benefits. Jacobs J observed that, the offer having been declined,

"I do not think I can now have regard to this offer of a gratuitous additional payment or treat it as compensating for any inadequacy in the period of notice."

His Honour was addressing a very different issue. It provides no guidance upon the present matter.

In the case of a claim for damages in respect of benefits foregone under a contract of employment - the earnings that the worker could have expected to receive in a reasonable period of notice - then, if severance benefits were paid, the authorities suggest that such benefits should not be considered in an undifferentiated way. In a particular case they might include components representing income protection - for example, payment in lieu of notice; components which are otherwise quarantined against being taken into account in diminution of damages - for example, superannuation benefits or accumulated leave moneys; and components which, at least primarily, are not directed to income protection. To the extent that any components fitted the description of severance pay given by the Commission in the Termination, Change and Redundancy case they would fit into that last category.

In the postulated circumstances, I consider, for the reasons I have outlined, that benefits falling into that last category should not be brought to account in reduction of damages that would otherwise be awarded. That would be so even though there was an identity of cause for the making of such payments and the claim for damages; and although the payments would not have been made were it not for the legal wrong in respect of which damages were claimed.

There is, I think, another matter which points in the direction of the conclusion I have reached. What I have called the last category of severance benefits is characteristically paid and retained whether or not the employee in fact has any period of unemployment. It appears to me consistent with the principles outlined in Espasgne and confirmed in Redding that such a payment be not brought to account.

The conclusions which I have so far reached conceal, to an extent, a problem of characterisation. It could not be said, either in Black or the present case, that what was paid were retrenchment benefits in accordance with the contract of employment. In each case they were calculated as if they had that character. But in Black, though there was a contractual term providing for such payments, the payments were made because the contract had otherwise been breached. In the present case there was simply no contractual term pursuant to which they could ever have been paid - regardless whether the plaintiff was dismissed in breach of contract.

In the circumstances of the present case, particularly, it is artificial to treat the payments made as not having the character of retrenchment benefits. Yet as a matter of contract the moneys paid could not be so described. If one was to ignore the apparent or assumed character of the payments, how should they be characterised? What should their purpose be considered to be?

In my opinion the only sensible way of conducting a collateral benefits enquiry in such a case is to look at the basis upon which - wrongly as it transpires - the benefits were considered to be payable at the time of their payment; and upon which they were calculated. So approached, the conclusions which I have earlier expressed may be applied.

In the present case the plaintiff received what were conceived to be and what were calculated as retrenchment benefits calculated on the basis of weeks per year of service; less an accrued retirement benefit under the superannuation scheme, which was also paid. In my opinion both components should be ignored.

Apart from retrenchment benefits the plaintiff received accident compensation in the period of about two years after his employment was terminated. He gave evidence of intermittent employment in that period. I assume that there was a compensation adjustment in respect of periods of work.

Under the Accident Compensation Act 1985, before Act 83/1987, there was no express provision made for adjustment of benefits where an injured worker brought a common law claim in respect of his injuries. In Sharp and Another v Associated Pulp & Paper Mills Ltd [1989] VicRp 12; [1989] VR 139 at 147 the Full Court accepted as proper a concession made for the plaintiff that, before arriving at the amount for which judgment should be entered, the assessment of damages - so far as it related to incapacity for work - should be diminished by the amount of accident compensation which the plaintiff had received up to that time.

It is unnecessary to trace the history of relevant provisions of the Accident Compensation Act thereafter. It is enough to say that they have never provided for the adjustment of damages awarded for wrongful dismissal by the amount of accident compensation payments made to the employee.

Accident compensation is a form of income replacement. Speaking generally, it is payable where there is a coincidence of compensable injury and incapacity for work. Speaking generally, the incapacity for work must be accompanied by the worker having no work in fact.

It is true that the sine qua non of the accident compensation payments made to the plaintiff was that he had suffered compensable injury. Nonetheless, the payments addressed a period of unemployment in respect of which the plaintiff, in substance, claims damages. The general rule, albeit in claims for damages for personal injuries, is that a worker should not have both damages for economic loss and compensation benefits. It appears to me that there would be a very substantial correlation between receipt of compensation benefits for a particular period and receipt of damages in respect of income foregone during that period. In my opinion, in accordance with principle, compensation received in such circumstances should be set against the damages assessed to the extent that the periods coincide. In the present case the compensation payments that were made fully cover the period to which any damages would relate.

Neither counsel explored those sections of the Accident Compensation Act which provided, in the period of 1989 to 1991, for the quantum of weekly payments. No evidence was led as to the amount of payments made in fact. Nor, as I have said, was any evidence led as to the wages which the plaintiff earned from time to time in the period in question.

It may be assumed that there was some difference between the amount of compensation received in the six months after April 1989 and the amount of wages that the plaintiff would have earned if employed by the defendant in that period. More doubtfully there may have been some difference between the amount of any wages which the plaintiff in fact earned in that period and the amount he would have earned in the employment of the defendant. I heard, however, no evidence which permits any proper assessment of what was, probably, a small differential over that quite short period. It is not for me to replace want of evidence by guesswork.

I turn to the second way that the plaintiff put his claim. It was, as I earlier noted, founded upon an allegation that his employment was terminated in breach of contract by reason of his being in receipt of or entitled to accident compensation at the time of his termination. According to the plaintiff's case the effect of his termination was that he lost the opportunity of retiring on the ground of disability and so obtaining a pension under s. 31 of the Transport Superannuation Act.

I put to one side the question whether it was a term of the plaintiff's assumed contract of employment that he not be terminated in the circumstances described. This basis of claim, which was only fleetingly developed, is for other reasons hopeless. There was no evidence that the plaintiff had taken, or contemplated taking, any step to retire on the ground of disability prior to his employment being terminated. There was no medical evidence as to the nature and extent of the plaintiff's disabilities. The plaintiff's own evidence upon the matter was imprecise. It did not suggest that he met the criteria of "disability" as that word is defined in s. 3(1) of the Transport Superannuation Act. The furthest his evidence went was to suggest that employers do not want to employ a man with a history of compensable injuries. Further again, there was no evidence directed to the quantum of the pension that the plaintiff would have received had he qualified for retirement on the ground of disability. Counsel for the plaintiff directed my attention to s. 31(1) of the Transport Superannuation Act. If his purpose in doing so was to invite me to attempt to work out the possible pension, I decline the invitation. Determination of the possible pension was surely necessary if the lost opportunity of obtaining it was to be valued.

What I have so far concluded is fatal to the success of the plaintiff's case. Nothing more need be said about the claim founded upon the contention that the plaintiff's assumed contract of employment included a term that he not be dismissed whilst in receipt of or entitled to accident compensation. That claim was not vigorously pursued, and its evidentiary basis - so far as damages are concerned - was hopeless. I should, however, address the liability aspect of the principal claim.

I have already sketched the competing submissions in respect of that claim. More must be said to properly set the scene.

The statement of claim, as ultimately reformulated at trial, relevantly made these allegations:

"2. By an agreement made on or about 14th January 1971 (the 'Agreement') the Defendant employed the Plaintiff indentured in an apprenticeship to the trade of electrical fitter. It was a term of the Agreement that the Plaintiff would be required to complete his apprenticeship over a period of four (4) years and then work for another five (5) years for the defendant. 3. It was a further term of the Agreement that after a period of two (2) years' satisfactory service the defendant would invite the plaintiff to become a permanent employee and join the superannuation scheme. It was a further term of the Agreement that on becoming a permanent employee the plaintiff would be entitled to a lifetime career subject only to dismissal for cause after due process.

PARTICULARS

The terms set out in paragraph 3 herein were partly in writing, partly oral and partly to be implied. In as much as they were in writing the (sic) were comprised of the Railways Act 1958 No. 6355 which provided inter alia that all positions in the railway service were 'permanent'. The Railways Act 1958 further provided at section 172 that an employee could be dismissed for disciplinary reasons only after his or her case had been heard and determined by a Board known as the Railways Board of Discipline. The Railways Act 1958 was subsequently repealed and replaced by the Transport Act 1983. The Transport Act 1983 provided inter alia that defendant employ the plaintiff on terms and conditions no less favourable than those upon which he had been previously employed. In as much as they were oral they were comprised of conversations which took place between the plaintiff, his father and persons representing the defendant at an interview which preceded his appointment and the making of the agreement. In these conversations the defendant, through its representatives, informed the plaintiff that the job would be a lifetime career with termination only possible through misconduct. In as much as they were to be implied they were to be implied from the fact that no provision for termination of employment by notice or for any reasons other than those set out in the Railways Act existed. 3A. In 1973 the plaintiff was appointed to the permanent staff of the defendant and joined the superannuation scheme. 4. At all times material to this Statement of Claim the Plaintiff was employed as a Signal Maintenance Technician. His conditions of employment were governed by the agreement referred to in paragraph 3 herein. The employment was further regulated by the Railways Metal Trades Grades Award 1953, an award made by the Australian Conciliation and Arbitration Commission, which remained in force at all material times pursuant to the Industrial Relations Act 1988, an act of the Parliament of the Commonwealth of Australia. His conditions of employment were further regulated by the policies and practices of the Defendant as set out in policy documents produced and published by the Defendant which are referred to herein and which were made by the authority given to the Defendant by the Transport Act 1983. He was a member of the Australian Railways Union, an organisation of employees registered pursuant to the terms of the Conciliation and Arbitration Act, 1904 which maintained its registration pursuant to the terms of the Industrial Relations Act 1988. 5. The Defendant was bound by law and by the policies of the Government of the State of Victoria to maintain the status of the Applicant and all prior beneficial conditions of employment.

PARTICULARS

The Transport Act 1983 provided at section 254(2)(a) that the status of the Applicant would be preserved as though the legislation had not been passed. ... 6. In breach of the agreement with the Plaintiff the Defendant unilaterally and without notice purported to vary the conditions of employment of the Plaintiff by including provisions for transfer redeployment and redundancy."

A number of matters may immediately be put to one side. First, nothing was said in the course of the trial about the industrial award referred to in paragraph 4.

Second, I admitted into evidence, as possibly being pertinent to the plaintiff's terms of engagement by the Authority, three extracts from the document entitled Personnel Policies & Practices. One of the extracts set out an employees' code of behaviour. Another dealt with procedures for termination. Neither extract was shown to be determined by the Authority and approved by the Minister: see s. 21(2) of the Transport Act 1983. Nor was either extract shown to apply to the plaintiff in any event. Mr Shaw did not refer to the extracts in his final submissions.

Third, whilst the agreement alleged by paragraph 3 of the statement of claim was, according to the pleaded case, of central importance, there was debate in the course of final submissions as to the way in which ss. 21, 241 and 254 of the Transport Act 1983 operated. Mr Shaw submitted that s. 241(1) was, in effect, a direction to employ; and that a new contract of employment was made between the plaintiff and the Authority by recourse to s. 21(1) and (2). The terms and conditions which, by s. 241(1), were to be no less favourable to the plaintiff than those upon which he had hitherto been employed were terms and conditions created in accordance with s. 21(2). Since the concepts of holding office during pleasure and of permanent office had no part in the new legislation, it should not be assumed that they were brought in to the new contract. Section 254(1), he added, did not operate to preserve the effect of a S140 form, if such had been signed by his client.

Mr Green submitted that s. 21 was concerned with new employees. Sections 241(1) and 254(2) operated to continue the old terms and conditions of the plaintiff's engagement.

It is apparent that Mr Shaw's submissions upon the third matter had very little connection with the pleaded case. That case relied upon terms of an agreement made in 1971. So far as it referred relevantly to the Transport Act 1983, it was by particulars. Their import was that the "job for life" term was preserved.

Mr Shaw's submissions, on the other hand, referred to a new agreement , made in 1983, containing terms and conditions in respect of which there was no evidence. The submissions speculated upon the removal from the new contract of a reference to employment during pleasure.

I indicated in the course of Mr Shaw's submissions that they did not address the pleaded case; and that I would be very reluctant to permit the plaintiff to re-plead again - particularly at that late stage. No application to re-plead was made. Had it been made and granted, the plaintiff would not have been assisted. All else apart, there was no evidence of any s. 21(2) terms and conditions that applied to him.

In the event, it seemed to me right during argument, and it still does, that I should approach the matter on the assumption that the terms and conditions of the plaintiff's engagement when he was in the service of the Victorian Railways Commissioners (later, Board) continued unchanged when he came to be employed by the Authority.

As I said a little earlier, at the heart of the plaintiff's case was the agreement alleged by paragraph 3 of the statement of claim. I deal first with its alleged oral content. The plaintiff said that he was told, when interviewed in connection with his application to be apprenticed, that there would be a four year apprenticeship, and then he would be contracted to work for the Railways for five years. After the completion of the five year period "then you had a job for life".

The plaintiff gave evidence of his having been interviewed on two occasions - in December 1970 at Bendigo, and in January 1971 at Spencer Street. He did not clearly identify the occasion upon which the unnamed interviewing officer made the remarks attributed to him. Mr Green cross-examined the plaintiff upon portions of his answer to an interrogatory delivered by the defendant which pertained to the matter. But the answer was not put into evidence.

The plaintiff also made a witness statement. The course that the trial took meant that viva voce evidence was given in its stead. The plaintiff was, however, cross-examined upon the witness statement in connection with one aspect of the apprenticeship interviews. That part of the statement was not put in evidence.

The evidence, then, was imprecise as to the occasion upon which the remarks relied upon by the plaintiff were made. But that is not critical. For I could not conclude that the remarks made by an unnamed interviewing officer were incorporated into the assumed contract of employment. The critical phrase - "a job for life" - is not free of ambiguity. Moreover, if a "job for life" was to be equated with a "permanent job" the speeches in McClelland v Northern Ireland General Health Services Board [1957] 1 WLR 597 show that - in the absence of the clearest indication elsewhere in the agreement between the parties - permanency does not imply a job for life; see per Lord Goddard at 601, per Lord Tucker at 602, per Lord Keith at 605 and per Lord Evershed at 609. Lord Tucker and Lord Keith dissented in the result; but that does not have any impact upon the particular point.

Putting to one side the meaning that could be attributed to the critical phrase, the remark relied upon by the plaintiff seems to me to be no more than a colloquial exposition of a virtue of service in the railways as popularly - whether or not accurately - understood in those times. Page 2 of the witness statement of Sidney Raymer captures the flavour of the matter. It was one of expectation. It is beside the point, in this connection, that Mr Raymer was not, as he says, one of the officers who interviewed the plaintiff in December 1970.

The distinction between obligation and expectation was illustrated - in the case of civil servants - by the remarks of Lord Goddard in McClelland at 601 - 602; see also per Lord Evershed at 610.

I add this: in concluding that any agreement was not in part oral, it has not been necessary to deal with two arguments available to the defendant: First, that any such oral term would have conflicted with the provisions of the Railways Act 1958, in accordance with which the agreement must have been made; and second, that the plaintiff had in fact signed a document by which he acknowledged that his employment was during pleasure only, and that he was liable at any time to dismissal without need for notice.

I turn to the written content of the alleged agreement. That content is neither more nor less than the legislation pursuant to which the plaintiff was engaged. Whether, in the circumstances, the relationship between the plaintiff and the defendant was one of status or contract, it was common ground that the basis of the employment could not conflict with the statute. The remarks of Brennan J in Director General of Education and Ors v Suttling [1987] HCA 3; (1987) 162 CLR 427 at 437 - 438 were said to be in point. It is to the provisions of the legislation that I turn.

When the plaintiff commenced service, the Railways Act 1958 was in force. Section 147(1) provided, relevantly

"The Commissioners shall as hereinafter provided from time to time appoint....officers and employees as they think necessary for the purposes of this Act and such persons shall hold office during pleasure only."

"Notwithstanding anything in this Act the Commissioners without giving the public notice required by the last preceding section shall from time to time, without probation but subject to such examinations and restrictions (if any) as are prescribed by regulations under this Act, appoint to a permanent office in the railway service any person who immediately before such appointment is in the temporary employment of the Commissioners and who has been temporarily employed by the Commissioners for not less than two years and elects to be so appointed to a permanent office."

"... the Commissioners may remove ... any officer or employee."

Section 161(1) conferred upon the officer at the head of any branch of the railway service the power to suspend, fine or reduce in rank an officer or employee guilty (inter alia) of misconduct. There was right of appeal.

By s. 169(1) of the Act a Board of Discipline was constituted. The Board was empowered by s. 172(1) to

".....investigate hear and determine any charge brought against any officer or employee ... and may ... dismiss him."

In the event that the offence with which the officer or employee was charged was one involving dismissal there was a right of legal representation and the person charged was entitled to have all witnesses examined on oath. If the punishment imposed was dismissal, there was right of appeal to the Commissioners.

Reading the statement of claim, it appeared that the plaintiff's case was that once a person was appointed to "the permanent staff" he had a job for life. He had permanency. That was subject to him being susceptible to the processes of the Board of Discipline. Those processes defined the manner in which an officer or employee could be dismissed - upon a charge brought for misconduct, or perhaps for a charge of breach of some rule or regulation. That exhausted the power of dismissal. It would be anomalous if the Commissioners had to go through a fairly complicated procedure before they could dismiss a man for misconduct; but could terminate his engagement at will if he was free of fault.

In the course of final submissions, however, Mr Shaw contended that the provisions of the Act permitting dismissal for misconduct applied equally to members of "the permanent staff" and to persons in temporary employment. The corollary of that submission, I suppose, would be that even temporary employees could only be dismissed for some breach of a rule or regulation, or for misconduct. To some extent, the submission appeared to cut across the thrust of the plaintiff's claim - that is, that it was elevation to permanency which gained a person a job for life. If all railways officers and employees were protected from dismissal save for misconduct, or for some breach of a rule or regulation, then it might be said that all of them had jobs for life.

The submission to which I have just referred was made in the context of a discussion about the plaintiff's status after October 1986. On one version of the facts, he was then in temporary employment. Mr Shaw submitted that even in that event the plaintiff had, in effect, a job for life.

On the view I take, it is not necessary to further consider the particular submission. One matter, however, is clear. It sought to make a case not raised by the statement of claim.

It followed from the main thrust of the plaintiff's argument, I think, that the provision by s. 147 that any officers or any employees should hold office "during pleasure only" was meaningless. The statute prevented its application as would permit summary dismissal in a case of breach of a rule or regulation, or misconduct; and it must be assumed that, although the statute did not deal with other situations, it did not do so because there were no other situations in which a power of dismissal or termination could be exercised.

Mr Shaw submitted that the concept, contrary to what appeared to me to be the consequence of his submissions, could be given application. He contended that the decision of the Commissioners on an appeal under s. 174 of the Act would be an exercise of the "pleasure" referred to in s. 147(1). That submission, I consider, illustrates the accuracy of my appreciation of the situation.

I had reference to the predecessors of the Railways Act 1958. Throughout the history of the legislation - I have looked back as far as the Victorian Railways Commissioners Act 1883 - there was an equivalent of s. 147(1). It was s. 16 of the 1883 Act, s. 70 of the Railways Act 1890 and s. 138 of the Railways Acts of 1915 and 1928.

There was also, throughout the history of the legislation, a distinction drawn between "officers" and "employees" and between persons employed in a "permanent office" and temporary staff (to use a neutral word). The first of those distinctions was the subject of definition between 1922 and (I think) 1958, though not for all purposes.

By s. 3(2) of the Railways (Board of Discipline) Act 1922 an "officer" was defined to mean "a person employed in a permanent office in the railway service at an annual rate of salary". See also s. 159(2) of the Railways Act 1928.

By s. 3(2) of the 1922 Act an "employee" was defined to mean "a person employed in a permanent office in the railway service otherwise than at an annual rate of salary"; and "a person who though not employed in a permanent office in the railways service has during the period of two years next before the date upon which any question as to his status arises been continuously employed in the railway service". See also s. 159(2) of the 1928 Act.

There is, of course, a long history of persons in public sector employment being called "officers". The implications of such a description, and the problems of its application, are examined by Macken et al, op cit., 4th Ed., at pp.59 - 68. It is not now necessary to explore many of the matters there discussed.

The distinction between persons employed in a permanent office and others appeared in s. 26 of the 1883 Act, which provided that every person employed in the railway service should be deemed to be in permanent office except persons employed as supernumeraries. The latter could not be employed in the service for a longer period in all than six months in any one year - save for members of survey parties and day labourers; and there had to be a six months gap between one period of employment as a supernumerary and another period of such employment.

That deeming provision, and the particular situation of supernumeraries, continued in the legislation for a very long time. The situation was maintained in the 1928 Act. But it disappeared in the 1958 Act. In the meantime, what became s. 149 of the 1958 Act was introduced by the Railways (Temporary Employees) Act 1946. That section provided a means whereby a temporary employee could be appointed to a permanent office if he so elected, without going through the old method of presenting for examination - as to which see s. 158 of the 1958 Act.

In discussing the distinctions drawn in the legislation between officers and employees and between persons employed in a permanent office and temporary staff (whether called supernumeraries or persons in temporary employment) one thing is clear. There was always a distinction between man and office. In particular, there was a distinction between an officer or employee and a permanent office: see for example ss. 148(1) and 149 of the 1958 Act. That distinction was made clear by s. 26 of the 1883 Act - the deeming provision which I have earlier referred. It was underlined by the definitions of "officer" and "employee" in the 1922 Act. The legislation reflected the traditional distinction between an office and its incumbent.

It did not follow from the legislation that a person in temporary employment (whether called a supernumerary or not) should not be described as holding office. Indeed, s. 147(1) of the 1958 Act (s. 16 of the 1883 Act) suggests to the contrary. But that is not to equate "office" and "permanent office".

The concepts of "office" and "officer" were not, by the legislation, in all respects linked. Certain offices were deemed to be (later were) permanent. A permanent office might be occupied by an officer. But the person was not an officer, nor was so to be deemed, simply because he or she occupied a permanent office. An employee might equally be appointed to, or be deemed to be employed in a permanent office. Nor was the officer or employee, as distinct from the office, described as permanent.

It follows from what I have said that the 1958 Act, insofar as it provided for the appointment for a person to a permanent office, did not conflict with s. 147 of that Act, which provided the persons "shall hold office during pleasure only". Removal of an officer or employee would not be inconsistent with the permanency of an office. The permanency of the office was not inconsistent with the impermanency of the officer or employee.

It might, perhaps, be argued that the reference in s. 147(1) to "office" and not "permanent office" meant that the subsection only caught persons in the service of the railways who were not the occupiers of permanent offices. But it seems to me much more likely that it was intended to pick up all officers and employees, whether the holders of an office or of a permanent office. Certainly the predecessor of s. 147(1) was considered to apply to the holder of a permanent office: Williames v Victorian Railways Commissioners [1903] 29 VLR 566.

I next note that throughout the history of the legislation there was provision for disciplining officers and employees. It co-existed with the provision that persons held office during pleasure only. I refer to ss. 33 and 34 of the 1883 Act, which were reproduced in ss. 86 and 87 of the Act of 1890.

The Board of Discipline was created by the Railways Act 1896. Provisions relating to that Board were expanded in 1922. In early days a decision by the Commissioners to dismiss a man was final. But by 1896 a regime which entitled an officer or employee to a hearing, and in some instances to an appeal, had been set up.

I note also that, provision for dealing with disciplinary offences to one side, the legislation from earliest times provided for a variety of circumstances in which a person might lose office. See, for example, ss. 16 and 18 of the 1883 Act.

Having regard to the legislation on foot when the plaintiff commenced service with the railways and, so far as it may assist in the understanding that legislation, its history, has the plaintiff made out the case which he pleaded? In my opinion the answer is no.

It should first be said that the references in paragraphs 3 and 3A of the statement of claim to the plaintiff becoming "a permanent employee" and to his being "appointed to the permanent staff" misconceived the legislation. I have already explained why that is so.

It should secondly be said that the 1958 Act contemplated that all officers and employees, whether they were persons in temporary employment or persons holding a permanent office, should have the protection of the Board of Discipline regime. It was not a protection only for the holders of a permanent office. At least from 1922 it never was - although the earlier definition of "employee" would have excluded some supernumeraries.

Third, nothing in the legislation expressly precluded the Commissioners from terminating a person's engagement in other than disciplinary cases. To the contrary, s. 147(1) purported to apply to officers and employees whether the holders of permanent offices or persons in temporary employment.

Ordinarily, to hold an office implies tenure. According to Macken et al, op cit, 4th Ed. at p.63 "the idea of tenure seems to mean that the person cannot be removed at pleasure or will, but only on cause being shown after an opportunity to be heard. But that is subject to cases where the Crown's common law right to dismiss at pleasure still exists". Here the right to dismiss at pleasure was found in the provision that employment was during pleasure.

Fourth, dismissal for breach of a rule or regulation, or misconduct, is a serious matter. It may have long-term implications for a worker's employment prospects. It is understandable that particular provision may be made to deal with that situation. By contrast, termination by reason of redundancy, or because the employer's business has become unprofitable, is a personal tragedy for a worker. But it will not impact upon long-term employment prospects in the same way that termination for misconduct may do.

Again, to take a situation contemplated in Williames, op cit, at 580, it might be that the commissioners wished to retain the services of a person alleged to have engaged in misconduct, so long as the charge was not made out. The legislation needed to provide for determination of the charge.

It follows from the various matters to which I have referred that the presence of a regime to hear charges of misconduct - resolution of which might lead to a person's dismissal from the Commissioners' service - did not mean that s. 147(1) could not sensibly operate. Williames so decided. Changes between the legislation which was there under consideration and the legislation pursuant to which the plaintiff was engaged do not, in my opinion, invalidate the decision in Williames. The circumstances in McClelland, where a contrary result was arrived at, were very different to those created by the legislation now under consideration.

Whilst it should be accepted that the ordinary consequences of holding office during pleasure only were modified to an extent by the regime which was established to consider and decide misconduct cases, it does not follow that those consequences had to be modified to any greater extent than was necessary. A modification such as the plaintiff contended for was not necessary.

The particulars subjoined to paragraph 3 of the statement of claim allege that in part the critical term was to be implied. The implication is said to arise from aspects of the legislation to which I have already referred. In light of my analysis of that legislation, no such implication is possible. In my opinion, the state of the legislation at the time when the plaintiff alleges that the relevant agreement was made did not by its own force or by its incorporation into any agreement struck between the plaintiff and defendant give the plaintiff a "job for life" - or, as paragraph 3 of the statement of claim pleads, "a lifetime career subject only to dismissal for cause after due process." Rather, the plaintiff was employed during pleasure only subject to such modification as was necessary to accommodate the misconduct regime.

That is really the end of the matter. It exhausts the bases upon which the plaintiff pleaded that his employment agreement contained a term as alleged. Moreover, the terms of his appointment, or of any contract of employment, must have been consistent with the legislation.

Notwithstanding that the plaintiff's main claim must have failed for the reasons which I have indicated, I should refer briefly to several matters that were debated at trial, in connection with that claim.

Much of the evidence was directed to the question whether in early 1973 the plaintiff had signed a so-called S140 form. The form, headed "Appointment of Supernumeraries to the Permanent Staff", made use of old terminology. That aside, it was pertinent to the operation of s. 149 of the 1958 Act. By the form the declarant was required to acknowledge that

" ... if so appointed I fully understand that my tenure of office, whether under the original appointment, or on any promotion or transfer to any other situation, place or office, is only at the pleasure of the Commissioners or their successors in office. I also hereby undertake and agree that, in the event of my being appointed, promoted, or transferred to any situation, place or office in the Railway Service, my services may be dispensed with at any time without previous notice having been given to me, and that I shall have no claim whatsoever against the Commissioners, or their successors in office, in the event of my services being dispensed with at any time, or in consequence of their being dispensed with without my having received previous notice, and that no presumption or inference shall in consequence of my salary, wages, or pay being computed, calculated, or paid either yearly, quarterly, monthly, weekly, or at other fixed intervals or periods, arise, be imputed, relied on, or drawn, as evidencing any obligation to employ or continue to employ me longer than the said Commissioners, or their successors in office, in their absolute discretion may think fit."

The plaintiff gave evidence that he did not recall seeing a form like that, nor of being asked to sign such a form. The defendant did not discover such a form signed by the plaintiff - although it did discover many other documents pertaining to his service with the railways. The defendant made an attempt to explain non-production of an S140 form signed by the plaintiff; at the same time insisting that the plaintiff must have signed such a form.

If the plaintiff did sign an S140 form he must have known, if he read it, that he was acknowledging - for the most part consistently with the governing statute - that he did not have a job for life and that he could be dismissed without notice. That was so despite misleading references in the document to "the permanent staff" and to "permanent employment". The document could give the plaintiff's case no comfort. But if the plaintiff did not sign such a form, the statute remains a barrier to the claim which he now brings.

Because I have concluded that the plaintiff's principal claim must fail upon the liability aspect for other reasons, it matters not whether the plaintiff signed an S140 form. But I make the following comments and express the following conclusion: the plaintiff's evidence upon the point was pretty definite. Non-production of the critical document - when documents of trivial importance were produced - is strange. Particularly that is so when the S140 form would have been kept, according to the defendant's witness Mr Hall, together with documents that were discovered. It is true that the plaintiff's employment card showed that he was offered permanent office on 3 January 1973, and that he accepted it on 17 January. True also that he was in fact appointed to permanent office as from 18 May 1973. On the other hand, the defendant's reliance upon a medical self assessment form signed by the plaintiff was based on recollection by Mr Hall of events long ago, a recollection which I think was faulty - and which did not accord with Mr Green's cross-examination of the plaintiff.

On balance, notwithstanding Mr Hall's insistence that the plaintiff would not have been appointed to permanent office had he not signed an S140 form, and notwithstanding the other matters to which I have referred, I conclude that the plaintiff did sign such a form. It is indeed difficult to understand how he came to be appointed to permanent office in those circumstances. But I consider that it is what happened.

It will be recalled that it was contended for the plaintiff that his position was protected when he came to be employed by the Authority by s. 241(1) of the Transport Act 1983. Upon an assumption that he carried into his employment by the Authority a job for life, terminable only for cause, a good deal of evidence was led as to circumstances in which the plaintiff, in 1986, applied to resign from the "permanent staff". The plaintiff applied to do just that by a form dated 28 October 1986 and signed by him. The application was made so that the plaintiff could access his then superannuation entitlement in order to satisfy obligations arising by reason of a Family Court proceeding between he and his then wife.

It was contended for the plaintiff that, notwithstanding he had signed that form, notwithstanding its acceptance by the Authority, notwithstanding that, according to his employment card, he did not thereafter obtain permanent status, he either remained in permanent office despite signing the document or somehow regained that status. This was a contention consistent with the pleadings, but inconsistent with Mr Shaw's assertion that the plaintiff could only be dismissed for cause in any event.

It was contended for the defendant that the plaintiff resigned permanent office in October 1986 and did not thereafter attain such office. Nonetheless, it was argued, the acknowledgement in the S140 form continued to bind him.

It is unnecessary to resolve this debate. From the plaintiff's standpoint it was part of an argument that equated "permanent staff" with "permanent office" and thus with a job for life. I have rejected that argument. From the defendant's standpoint it was part of an argument that depended upon the S140 form, a form which I have found was not signed by the plaintiff, but which, had it been signed, could have done no more than replicate the terms of the relationship between the parties deriving from statute.

Superannuation Act 1988

Compensation Act 1985

Victorian Railways Commissioners Act 1883

(Board of Discipline) Act 1922

Railways (Temporary Employees) Act 1946

At a glance

Court

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Judgment (160 paragraphs)

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Legislation Cited (6)

Cases Cited (10)