King v State Bank of New South Wales

APPELLANT/CROSS REPONDENT: Mr J N West QC with Mr J J Fernon of counsel Toomey Pegg Drevikovsky, Lawyers (Mr Richard Pegg/Mr Edward Heggarty) LEGAL REPRESENTATIVES: RESPONDENT/CROSS APPELLANT: Mr J V Murphy of counsel Mallesons Stephen Jaques (Mr Tony Gooch/Mr Brett Feltham)

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION

CORAM: WRIGHT J, President WALTON J, Vice-President KAVANAGH J

Matter No IRC 38 of 2001 ROBERT GORDON KING v STATE BANK OF NEW SOUTH WALES Application for leave to appeal and appeal against a decision of Justice Marks given on 6 December 2000 in Matter No IRC 1153 of 1996

Matter No IRC 584 of 2001 STATE BANK OF NEW SOUTH WALES v ROBERT GORDON KING Application for leave to cross appeal and cross appeal against a decision of Justice Marks given on 6 December 2000 in Matter No IRC 1153 of 1996

JUDGMENT OF THE COURT [2002] NSWIRComm 353

1 These proceedings concern applications for leave to appeal and to cross appeal against a judgment of Marks J dated 6 December 2000 in which his Honour found the contract of employment between Robert Gordon King and the State Bank of New South Wales was an unfair contract within the meaning of s 105 of the Industrial Relations Act 1996 and afforded Mr King relief under s 106 of the statute by varying the contract and making consequential monetary orders: King v State Bank of New South Wales [2000] NSWIRComm 229.

2 Mr King, hereafter referred to as the appellant, filed an application for leave to appeal and appeal, alleging, in summary, that his Honour erred in the findings of fact and in the exercise of his discretion in making monetary orders. In particular, in this later regard, it was contended his Honour's approach to determining appropriate monetary orders, including his Honour's refusal to make monetary orders surrounding the loss of notional equity in his home and the quantum of the monetary orders made in relation to notice and redundancy, in the circumstances of the case, were in error.

3 The State Bank of New South Wales, hereafter referred to as the respondent, filed a cross appeal in which it was alleged that his Honour erred in concluding that to render the contract fair, it was necessary to afford the appellant six months salary representing both notice in lieu of termination and redundancy, that it was within the Commission's jurisdiction under s 106 of the Act to include in any monetary remedy an amount representing "distress" associated with the termination of the appellant's employment and that it was appropriate to order the respondent to pay interest from the date of termination which was 14 September 1990.

4 The form of the relevant statutory provisions for the purpose of these proceedings are as follows: 105 Definitions In this Part: contract means any contract or arrangement, or any related condition or collateral arrangement, but does not include an industrial instrument. unfair contract means a contract:

(a) that is unfair, harsh or unconscionable, or (b) that is against the public interest, or (c) that provides a total remuneration that is less than a person performing the work would receive as an employee performing the work, or (d) that is designed to, or does, avoid the provisions of an industrial instrument. Note. The jurisdiction of the Commission under this Part is exercisable only by the Commission in Court Session.

106 Power of the Commission to declare contracts void or varied (1) The Commission may make an order declaring wholly or partly void, or varying, any contract whereby a person performs work in any industry if the Commission finds that the contract is an unfair contract. (2) The Commission may find that it was an unfair contract at the time it was entered into or that it subsequently became an unfair contract because of any conduct of the parties, any variation of the contract or any other reason. (3) A contract may be declared wholly or partly void, or varied, either from the commencement of the contract or from some other time. (4) In considering whether a contract is unfair because it is against the public interest, the matters to which the Commission is to have regard must include the effect that the contract, or a series of such contracts, has had, or may have, on any system of apprenticeship and other methods of providing a sufficient and trained labour force. (5) In making an order under this section, the Commission may make such order as to the payment of money in connection with any contract declared wholly or partly void, or varied, as the Commission considers just in the circumstances of the case.

5 The claim at first instance, in its final amended form, sought the following orders: . . . 3. An order that the Contract be varied to provide that the interest rate in the loans between the applicant and the respondent dated on or about 23 January, 1990 may not be varied: a) upon a termination of the applicant's employment for redundancy; b) should the applicant cease employment with the respondent because the respondent discontinues the corporate advisory group; c) should the respondent fail to provide a long term career to the applicant within its employ.

4. An order that the Contract be varied: a) to delete clause 31 of the terms and conditions of the loan agreements b) to provide that the interest rates and terms of the loan not be varied after the termination of the applicant's employment c) to preclude the respondent from taking any action to recover the property securing the loan agreements until the applicant obtains comparable employment to that of the applicant's employment with the respondent. 5. An order that the respondent pay to the applicant an amount which the Commission in Court Session considers just in the circumstances in the case including: a) an amount of $1,050,000.00 being in compensation for the loss of the applicant's equity in the property known as 16 Spofforth Street, Cremorne; b) the amount of $33,571.00 being in compensation for the interest paid by the applicant to the respondent above the rate of 6% on the applicant's loan from the respondent; c) the amount of $120,000.00 being in compensation for the loss of 12 months salary in lieu of notice; d) the amount of $240,000.00 being in compensation for the loss of the payment of 24 months severance pay; e) the amount of $9,230.77 being in compensation for the loss of the payment of annual leave for the notice period; and f) an amount by way of compensation for the pain, suffering and psychological damage caused to the applicant by the respondent. 6. An order that the contract be varied to provide that the respondent will not do any act at or before the termination of the applicant's employment so as to cause or contribute to any psychological injury, depression, stress or anxiety in the applicant.

7. An order that the respondent otherwise pay the applicant such money as the Commission in Court Session deems just in the circumstances of the case.

8. An order that the respondents pay interest at the rates prescribed pursuant to the Supreme Court Act 1970 (NSW) on such sum or sums ordered to be paid in accordance with orders 5 and 6 herein.

9. An order that the respondents pay the applicant's costs of these proceedings.

Factual Background and the Impugned Judgment 6 To state the relevant factual material in a relatively summary way, the appellant had been employed by the Citicorp Group between August 1986 and October 1989, commencing his employment as an Executive Manager in its Corporate Banking Division. He was later transferred to the Citicorp Investment Bank as an Assistant Vice President primarily involved with mergers and acquisitions, capital raisings and advisory services in the area of investment banking in Australia and New Zealand. As part of his conditions of employment he enjoyed low interest housing and investment loans as well as other benefits.

7 The appellant alleged that, whilst an employee of Citicorp, he was approached by a recruitment consultant on behalf of the respondent to join its Project Finance and Advisory Services Division. Negotiations ensued in which a number of representations were made to the appellant in order to persuade him of the respondent's commitment to merchant banking. The appellant was assured there was a well established client base of mid-sized companies held by the respondent which could be targeted; the respondent had a strategic plan to provide a full range of banking and non-banking financial services; there were plans to integrate the First State Securities stock broking arm into the activities of the Merchant Bank. In short, the respondent assured the appellant that it had a long-term commitment to providing a corporate advisory service. As a result of the respondent's assurances, the appellant understood that the Project Finance and Advisory Division was a profitable and a vital area of the respondent's operations.

8 An offer of employment was made and the appellant commenced employment with the respondent in November 1989. In about January 1990 the appellant negotiated two loans with the respondent, totalling an amount in the order of $247,000 at a concessional interest rate of six percent. His home in Spofforth Street Cremorne was offered as security. The money was used to discharge the appellant's indebtedness to his former employer and part of a debt owed to another bank, the ANZ, also secured over the Cremorne property.

9 Some time in June 1990, a matter of a few months after having commenced employment with the respondent, the appellant was informed that the advisory services arm of the respondent in which he was employed was to close down. He was assured that he would be deployed to another area of the respondent's operations and was handed the reigns of the advisory services arm to finalise various ongoing business whilst its then head of operations departed on long service leave. In the result, no alternative position was found and the appellant was informed, by letter dated 14 August 1990, that his services would be terminated as of Friday 14 September 1990. Upon termination the appellant received a severance payment of four weeks pay calculated on a salary package of $113,000, four weeks pay in lieu of notice calculated on a base salary of $79,960, as well as payment for outstanding salary and recreation leave. He was also given until 14 February 1991 to arrange other finance in order to discharge his loans with the respondent.

10 Whilst the respondent's policy should have afforded the appellant the concessional interest rate of six percent on his loans for a period of six months after his employment came to an end, the respondent immediately began to charge the appellant interest on his loans at the then current variable commercial rate of 14.5 percent. This was, after much difficulty, eventually rectified in 1993 with the bank crediting certain monies to the appellant's account for the overcharging and other consequential matters. This correction was not, however, made before the appellant was forced to sell his home in Cremorne.

11 The appellant went through considerable difficulties both in his personal and professional life between the termination of his employment in 1990 and the next full-time salaried employment, which was secured in 1993. Whilst he had engaged in various consulting roles in that interim period, the evidence accepted by his Honour made it plain that his remuneration was significantly reduced over that period, resulting in an inability to meet his financial commitments and ultimately necessitating the sale of the Cremorne property on 3 February 1993.

12 The evidence of Ms Svenson and the appellant's treating doctor, which it appears was accepted by his Honour, related a sorry tale of the appellant having gone through a turbulent downward spiral into a "deep depression" involving increasingly significant changes in personality including mood swings, irritability and substance abuse which eventually led to the separation and estrangement of the appellant and Ms Svenson, his then defacto wife, and her five year old daughter.

13 The appellant's claim at first instance was, in essence, that he had been induced to leave his previous, secure employment with the Citicorp Group because of representations made to him by the respondent, including that the Bank had a long-term commitment to the areas of its business in which he was employed, and that the appellant had long-term career prospects with the Bank. He claimed that at the time these representations were made the Bank was, or should have been, aware that the Corporate Advisory Group was under-performing and that it was considering restructuring that division. In these circumstances, the appellant had not received fair notice (or payment in lieu) and severance payments upon his redundancy. He also emphasised that, despite the representations, the Bank failed to arrange alternative employment. 14 The appellant alleged that the Bank's treatment of his loans on and after his termination was unfair, in that the Bank initially charged him interest above the concessional rate, and failed to continue to allow him the concessional rate until the loans were discharged. Due to this unfairness, the appellant was unable to meet the repayments owing to the Bank, and, in February 1993, his house was sold to discharge the loans. It was contended that the employment contract allowed the Bank to unjustly absorb the equity in his house.

15 He sought compensation for the failure to provide fair notice and severance pay upon his redundancy, compensation for the loss of annual leave payments during the actual notice period provided, compensation for the loss of the notional equity in his house as at the date of hearing and compensation for the failure to charge concessional interest rates on the loans. 16 At first instance the appellant also included a claim of a somewhat different kind, in that it was alleged the appellant had suffered "major depression", caused by the Bank's conduct in the period from June to September 1990. For this alleged unfairness, he sought compensation for "pain, suffering and psychological damage".

17 The relief sought by the appellant at first instance was summarised by Marks J in the following terms:

[85] The relief sought by the applicant in these proceedings may be summarised as follows: 1. Variation of the contract of employment to provide for appropriate provisions relating to termination of employment. In this connection he sought compensation for the loss of twelve month's salary in lieu of notice and further compensation for severance pay equivalent to twenty four month's salary. The salary was said to be at a level of $120,000 pa.

2. Variation to the housing loan provisions to cap interest at 6% for the whole of the period of the loan, which would require payment of $33,571 by the respondent to the applicant.

3. Compensation for the loss of the applicant's equity in his Cremorne property because he was forced to sell it by reason of the premature termination of his employment. This was quantified at $1,050,000 based on valuation evidence.

4. The payment of $9,230,77 being compensation for the loss of annual leave during the period of notice.

5. Compensation for pain, suffering and psychological damage which the applicant suffered as a result of the premature termination of his employment and the consequent personal difficulties that this caused him.

18 Having addressed the appellant's case in that way, his Honour turned to address the alleged unfairness (at [86]). His Honour observed (at [87]) that in order to assess any unfairness surrounding the termination of the appellants employment "it [was] necessary to determine what is reasonable notice" so as to ascertain "what notice should have been given and/or what moneys should have been paid in lieu of notice on termination of employment". His Honour rejected the submissions of the respondent to the effect that it was necessary to determine and take into account the degree of security the appellant had in his previous employment, in order to assess the fairness of the contract of employment with the respondent, holding: [88] … Whether or not the applicant's position with Citibank was tenuous or secure, there can be no doubt on the evidence that the respondent through its representatives sought the employment of the applicant into the PFAS Group and that certain representations were made to him, the nature of which I have already set out. It is also clear on the evidence that the position of the PFAS and the merchant bank activities within the respondent's operations had been under review for some little time prior to the applicant's appointment although it is clear on the evidence that no definite decision was made to cease the operations in this area for some months after the applicant's employment commenced. In any event, no indication was given to the applicant during the course of negotiations leading up to his appointment that the area into which he was to be employed was under review and that there was any concern within the respondent's operations in particular about the extent of the non-performing loans. I do not make this observation by way of criticism because there was a general malaise throughout the financial world at that time, and the applicant must have been aware of the state of the economy and what was happening generally to the businesses of financial institutions at that time.

[89] In my opinion, where an employer such as the respondent in these proceedings determines to employ a person into an area of its operations which is under review, and then determines within a short time thereafter to close down the particular area of operations in which the person is employed, without providing appropriate alternative employment some additional compensation should be paid to a displaced employee over and beyond that which would normally be payable to such an employee. Obviously, length of service is usually one of the principal factors taken into account in determining what period of notice should reasonably be given on termination. The applicant had in reality only been employed for less than a year at the time that his employment was terminated and this would normally militate against the assessment of a lengthy period of reasonable notice. However in my opinion this factor is displaced in the particular circumstances which applied to the engagement of this applicant in the respondent's operations and the circumstances in which his employment came to an end.

[90] In my opinion a reasonable period of notice in these circumstances would be six months. In fixing this period I take into account that the applicant should have been aware of the exigencies surrounding employment in the financial sector and the effect of fluctuating financial conditions on that sector. I also accept the respondent's evidence that there was no other position within its operations in which the applicant could conveniently be employed, and this factor has been taken into account in assessing the period which I have regarded as reasonable in all the circumstances of these proceedings.

[91] It follows that the combined notice of termination and payment in lieu afforded to the applicant by the respondent was unfair. Its conduct was unfair accordingly, and in that the contract of employment permitted this to occur the contract of employment in its terms became unfair.

19 His Honour then turned to the unfairness said to have arisen from the withdrawal of the concessional interest rates on the two loans undertaken by the appellant, concluding: [94] The applicant claims that his entitlement to concessional treatment by virtue of his prior employment position as it impacted upon his loans should have continued indefinitely. I do not regard the imposition of a six month cut off period as being unreasonable and I decline to make any finding of unfairness in this particular regard. I observe also that apart from some inappropriate initial conduct on the part of two particular, and hopefully junior officers of the respondent, the applicant was eventually given a great deal of latitude with respect to the repayment of the loans. In making this observation I disregard some additional latitude which was inadvertently created by the respondent's inability to correctly formulate the initial notice of default.

20 The contract of employment was varied to provide "for termination upon giving reasonable notice or payment in lieu based on the applicant's total salary package".

21 The judgment then turned to what "just compensation should be awarded to the applicant consequent upon the findings of unfairness". His Honour expressly noted that these findings "were confined to a failure to make payment of a reasonable amount upon termination and the failure to apply the Bank's policy to the housing loans for a period of six months". Whilst it was considered "obvious" that the monetary compensation should include an amount "equivalent to six month's notice", less monies already received, the claim for an amount reflecting annual leave was refused (at [99]). The claim for a separate payment by way of severance or redundancy was also refused: [100] The applicant cast his claim for compensation as including a period of payment in lieu of notice and a further period by way of severance pay. For reasons which I have previously set out (see Vincent v Merrill Lynch (Aust) Pty Ltd [2000] NSWIRComm 160) it is my opinion that given an employee at a senior level in the respondent's organisation it is appropriate to aggregate payment in lieu of notice to cover both the termination of employment and the fact of redundancy. Accordingly the amount which I have previously determined to award by way of compensation is inclusive of the fact that the applicant was made redundant.

22 The claim for $1,050,000 representing the "loss of equity in the Cremorne property" was refused (at [101]), his Honour considering that there was no "justification in awarding the applicant any compensation based on a notional equity" given that the respondent had not "overall", "conduct[ed] itself unreasonably with respect to the management of the applicant's loans".

23 Marks J then turned to deal with the appellant's claim "for pain, suffering and psychological damage". Having referred to the evidence of Dr Harrison and Ms Svenson, his Honour held: [104] On the basis of this evidence I accept that the applicant suffered from clinical depression and I find that it is more likely than not that the applicant's symptoms of depression commenced in about June 1989 when he was told that the respondent was going to close down the area in which he worked. However at that stage the applicant was not advised that his employment was to be terminated and there was an indication from the respondent's personnel that every endeavour would be made to find alternative employment for him. Accordingly, at that time there was not any conduct on the part of the respondent that I would be able to characterise as unfair. The unfairness came at the time of termination in the manner which I have already described. At that stage the applicant's symptoms of depression had already commenced some two months previously. However it was the evidence of Dr Harrison that events such as the separation from the applicant's partner and the termination of his employment all contributed to the applicant's state of depression.

24 His Honour considered that there "was no indication from the evidence" that he was unable to search or undertake work by reason of his depressive illness and doubted whether the depression precluded the appellant from obtaining employment prior to commencing a salaried position in 1993, and continued: [107] There is no doubt from the evidence including the voluminous correspondence and other documentation that the applicant's dealings with the respondent in terms of the applicability of his concessional interest rate for a period of six months were a source of aggravation and concern for him. No doubt this added to his financial problems as did the failure of the respondent to pay him a reasonable amount in lieu of notice. The differential amount with respect to the interest factor is a few thousand dollars only, but the additional amount which I have found in fairness that the respondent should have paid on termination exceeds $28,000. No doubt this latter amount, if made available to the applicant at the time of the termination of his employment would have assisted him in coping with what quickly became dire circumstances.

[108] In my opinion it would not be just, in the sense of being fair to both the applicant and respondent, to award moneys to the applicant by way of compensation based on any unfair conduct of the respondent having initiated the applicant's condition of depression. Nor would it be just to award the payment of moneys to compensate the applicant for any loss of income during any relevant period. However, subject to dealing with the question of jurisdiction to which I shall shortly refer, it is appropriate that the applicant be awarded some amount to compensate him for the distress which the deprivation of moneys which should in fairness have been paid to him caused him. There is no evidence that the deprivation of these moneys and some resultant distress which I find was caused by such deprivation exacerbated or aggravated the applicant's then existing condition of depression either on a short term or long term basis. However there is evidence that the respondent was or ought to have been aware of the applicant's financial position and the concerns and distress created by his lack of funds. Certainly there is evidence that the respondent was aware of these matters because they were raised during the course of interviews with officers with the respondent as well as in the applicants correspondence with the respondent. Of course, on the overall evidence the timely payment of these moneys which should, in fairness, have been paid to the applicant may only have staved off the inevitable for a period of time. Nevertheless this would have represented a period of less stress for the applicant.

[109] In all the circumstances I propose to award him compensation in the sum of $15,000.

25 His Honour was satisfied that jurisdiction existed to make such an order as follows: [110] The question of jurisdiction to award compensation of this kind was considered recently by Hungerford J in Stonham v The Speaker of the Legislative Assembly of New South Wales (2000) 97 IR 325. Those were interlocutory proceedings. His Honour was not prepared to deny for the purpose of and at the stage of those interlocutory proceedings a power to award compensation in this area. Reference was also made by counsel to my judgment in Pullen v R & C Products Pty Ltd (1994) 60 IR 183 where, at 215.5 I discussed the power to award monetary compensation for "physical and mental injury" sustained by an employee consequent upon the termination of his employment. In all the circumstances of those proceedings I declined to order the payment of any monetary compensation. I discussed therein the decision of the House of Lords in Addis v Gramophone Co Ltd (1909) AC 488 and the decision of the High Court of Australia in Baltic Shipping Co v Dillon (1983) 176 CLR 344. The power set out in s 106(5) of the Act to make an order for the payment of money is circumscribed by two matters. Firstly the payment of money must be "in connection with" any contract which is voided or varied. Secondly the payment must be "just" in the circumstances of the case.

[111] As I pointed out in Pullen , in most cases distress will arise out of the fact of termination of employment per se rather than the inadequacy of any moneys paid on termination or the inadequacy of any notice, in terms of what is reasonable. It is obvious that in most cases the termination of employment will of itself result in financial hardship to varying degrees. On termination of employment the applicant received $18,667 net of which $3,924 represented accrued salary and recreation leave. Accordingly the net eligible termination payment was $14,743. Information furnished to the applicant by the respondent at the time of termination indicated that the tax on an eligible termination payment was 31.25% of 5% of that payment. Accordingly if the applicant had been paid a further $28,000 as an eligible termination payment it would have amounted to less than $440. Whatever the taxation portion this would have resulted in a significant improvement in his financial position for some little time. Such an improvement is directly connected with the unfairness which I have found and would have been further improved if the respondent had correctly applied its own policy to the concessional loans. In my opinion given the particular circumstances of these particular proceedings it is just that the respondent pay some compensation to the applicant. I have already assessed the amount as $15,000.

26 Marks J rejected the respondent's submissions to the effect that interest ought not be ordered due to the delay of nearly 6 years from the date of termination in bringing proceedings, observing that no authority was cited to support the submission (at [115]). It was held "although there has been a significant delay in the commencement and prosecution of these proceedings this will not of itself disentitle the applicant to receive interest" - interest was ordered on the monetary orders with the exclusion of the $15,000 by way of compensation for distress.

27 His Honour's orders were in the following terms: [116] Consequent upon the findings of unfairness which I have set out earlier in these reasons for judgment I make the following orders: 1. The contract of employment between the applicant and the respondent is varied ab initio to provide that notwithstanding any other provision termination by the respondent shall be effected upon giving reasonable notice or upon payment of moneys calculated by reference to the applicant's earnings during that period of reasonable notice, based on the applicant's full salary package.

2. The respondent is to pay to the applicant the sum of $47,083 representing the payment of an additional five month's salary in lieu of notice based on a salary package of $113,000 pa. The respondent is to have credit as against this amount for moneys paid in lieu of notice and by way of retrenchment pay.

3. The respondent is to pay to the applicant the sum of $15,000 in addition to the moneys payable under order 2.

4. The respondent is to pay the applicant interest on the moneys referred to in order 2 above from 14 September 1990 to date of this judgment calculated in accordance with section 94 of the Supreme Court Act.

Appellant's Submissions 28 Mr J N West QC who appeared with Mr J J Fernon of counsel for the appellant, contended that the monetary order made by his Honour, providing for a total of six months remuneration representing both a payment in lieu of notice and redundancy, was inadequate. The inadequacy of this order was exacerbated by his Honour aggregating payments made in lieu of notice and redundancy into that single monetary order.

29 In the negotiations leading to the appellant's employment, the respondent made various representations relating to the security of the appellant's employment within the corporate advisory group of the bank. These representations were accepted as having been made by the respondent. The representations were tantamount, on the appellant's submission, to an "unambiguous promise" that the appellant would have a long term career with the respondent. The appellant acted upon these representations and accepted employment with the respondent. As was noted by his Honour, the respondent was aware that the performance of the division into which the appellant was to be placed was questionable and that it was, at that time, currently under review. The appellant was not made aware of any of these matters.

30 However, one matter which his Honour seemed to take into account as limiting an appropriate notice period was the "general malaise throughout the financial world at that time", of which his Honour considered "the applicant must have been aware". His Honour considered that "the applicant should have been aware of the exigencies surrounding employment in the financial sector and the effect of fluctuating financial considerations on that sector". Whilst Mr West conceded that these matters were relevant matters to take into account when determining what would have been an appropriate notice period, on the circumstances of these proceedings and, in particular, the promise of a long-term career made to the appellant, these matters should have resulted in an increase in what would be an appropriate notice period.

31 Senior counsel contended the respondent's conduct was unconscionable. Knowing full well of the difficulties associated with the division into which the appellant was to be employed, and being aware of the general insecurity in the financial services industry at the time, the respondent enticed the appellant away from secure employment. This should substantially increase what would otherwise be an appropriate notice period.

32 Similar submissions were made in relation to the lack of an alternative position within the respondent's organisation. The respondent led the appellant to believe, upon having been made aware that the division was to be wound up, there would be a job elsewhere in the organisation. Senior counsel contended his Honour was correct in concluding that "where an employer such as the respondent in these proceedings determines to employ a person [in] an area of its operations which is under review, and then determines within a short time thereafter to close down the particular area of operations in which the person is employed, without providing appropriate alternative employment, some additional compensation should be paid to a displaced employee over and beyond that which would normally be payable to such an employee". Despite having formed this view, his Honour failed to provide the appellant this "additional compensation".

33 The failure to afford a reasonable period of notice was, on the appellant's submission, compounded by the aggregation of notice and redundancy in the one payment. Payment in lieu of notice and redundancy or severance pay serves two different purposes: Newton v Goodman Fielder Mills Ltd (1998) 81 IR 227 per Hill J.

34 The appellant's employment was terminated on the bases of redundancy at a time when there was a severe restriction in the financial services industry and it could reasonably be expected that there would be difficulties in the respondent finding work. This was in fact the case, noting that it took some three years for him to find full-time salaried employment.

35 Even if the Commission were satisfied that there was no error in aggregating a payment of redundancy and notice (as to which see Ross v GN Comtext (Australia) Pty Limited (2000) 107 IR 1 and Vincent v Merrill Lynch (Australia) Pty Limited [2000] NSWIRComm 254), this was a case in which it would be fair and reasonable to order a separate redundancy payment of 24 months.

36 As for the loss of notional equity in the appellant's home, senior counsel contended that this loss flowed as a direct result of the unfair treatment meted out to the appellant. He was enticed from secure employment into a position that was far from secure - the loss of the appellant's home was directly attributable to the unfair conduct on behalf of the respondent. It was not appropriate for his Honour to entirely disregard this aspect of the claim at first instance. Further, it was not just in the circumstances to have assessed the fairness of the treatment meted out to the appellant merely by reference to the conduct of the respondent in relation to the appellant's loans. The loss of some $1,050,000, being the loss of notional equity in the appellant's home, should have been taken into account when assessing what was a just monetary order in the circumstances of the case.

37 Turning then to the submissions on the cross appeal, the appellant contended that the respondent was incorrect in its submission that mere delay disentitles a successful party to an award of interest upon verdict: Garuda Indonesian Airways v Bacher Spielvogel Bates Ltd (unreported, Court of Appeal, 4 December 1997). There was no error of principle in his Honour's approach to the question of interest.

38 Mr West submitted that Marks J's findings in relation to distress were clearly open on the evidence. There was no "inconsistency" in the evidence of Dr Harrison as contended for by the respondent. There was evidence of distress caused to the appellant from having been deprived of money as a result of the unfair conduct of the respondent. His Honour's findings in this regard were open on the evidence and do not warrant intervention on appeal.

Respondent's Submissions 39 Mr J V Murphy of counsel, who appeared for the respondent, contended that the appellant's case in relation to the alleged unfairness surrounding the loss of equity on his home was premised upon the idea that the representations made to him during the pre-employment negotiations were not taken into account by his Honour when assessing this part of his claim. On his submission, such a proposition could not be sustained. His Honour identified the various heads of claim put by the appellant and immediately considered whether there was any relevant unfairness. In his consideration of the unfairness his Honour expressly recognised that the appellant's submissions were premised on him being "head hunted". His Honour considered the claims put and found that it was not unreasonable for the concessional interest rate afforded staff to have been cut off some six months after termination. This was clearly open to his Honour. Further, there is no basis for the submission that his Honour erred in failing to make findings in relation to the security of the appellants employment with Citibank prior to the approach from the respondent. His Honour considered it was unnecessary to do so and there was no error in that approach.

40 In considering the appellant's claim for compensation for loss of equity in his house, his Honour was required to consider whether an order for payment of compensation could be related back to any relevant unfairness on the part of the respondent. His Honour found that it could not. Mr Murphy submitted that such a finding was clearly open. Further, his Honour considered that as there was no "overall unfairness" in the way the respondent conducted itself in managing the appellant's loans. On the respondent's submission, there was no justification for awarding any compensation based on this part of the appellant's claim. There was no connection between the conduct of the respondent and the appellant's claimed loss. This conclusion was not only open but clearly correct and does not warrant leave to appeal being granted.

41 With respect to the assessment of monetary compensation in lieu of notice, Mr Murphy contended that his Honour undertook a balancing exercise of the various relevant factors in determining that six months was appropriate. There was no error of principle in the way his Honour undertook this balancing exercise such as to warrant appellate intervention. Nor does the aggregation of notice in lieu and redundancy into the one monetary order amount to appellable error. The authorities make plain that there is some degree of overlap in the factors relevant to the assessment of notice in lieu and redundancy and that it may be, in an appropriate case, appropriate to treat the two matters separately. However, the appellant was employed for less than 12 months - this was not a case in which notice and redundancy warranted separate treatment.

42 As for its cross appeal, the respondent contended that his Honour's approach to the determination of interest was inconsistent with the approach taken to interest payments by the Full Bench of this Commission and its predecessors: Thomas Nationwide Transport Ltd (T/as "Altrans Bulk") v Thomas (1990) 34 IR 378, Westfield Limited v Helprin (1998) 82 IR 411 and Abboud v State of New South Wales (Department of School Eduction) (No.2) (2000) 99 IR 299.

43 With respect to the order of monetary compensation in relation to "distress" associated with the appellant's termination, his Honour's approach, it was submitted, represents a departure from longstanding authority which provides compensation is not payable for distress associated with termination: Addis v Gramophone Co Ltd (1909) AC 488 and Baltic Shipping Company v Dillon (1983) 176 CLR 344.

44 That approach has been adopted by this Commission: Starkey v Health Care Corporation [1999] NSWIRComm 352. The consideration of Addis v Gramophone Co by Hungerford J in Stonham v The Speaker of the Legislative Assembly of New South Wales (2000) 97 IR 325 does not constitute an abandonment of the now longstanding and well established principle.

45 Mr Murphy submitted that, even if it were within jurisdiction, his Honour's reasoning in respect to this aspect of the monies ordered was flawed. His Honour effectively found that the depressive illness suffered by the appellant was not caused by the termination of his employment, but that an amount of some $28,000 which his Honour considered should have been paid at the time of termination as payment in lieu of notice, would in some way have "assisted in him coping with what quickly became dire circumstances". His Honour considered that "it is appropriate that the applicant be awarded some amount to compensate him for the distress which the deprivation of moneys which should in fairness have been paid to him caused him". However, as his Honour expressly observed: There is no evidence that the deprivation of these moneys and some resulting distress which I find was caused by such deprivation exacerbated or aggravated the applicant's then existing condition of depression either on a short term or a long term basis. However, there is evidence that the respondent was or ought to have been aware of the applicant's financial position and the concerns and distress created by his lack of funds.

46 On the respondent's submission, there was simply no evidence on which his Honour could conclude the withholding of the $28,000 in respect of a payment in lieu of notice had any, or at least any significant effect on the appellant's condition so as to warrant the payment of $15,000 in relation to this head of claim. The cross appeal should be allowed.

47 The application for leave to appeal relies, in essence, upon the following matters:

(a) Alleged failures to take into account or have adequate regard to the appellant's circumstances, in particular the representations and other conduct of the respondent in pre-employment negotiations, when assessing the quantum of notice and what was an appropriate provision for notice and redundancy and particularly, when assessing the appellant's claim with respect to the notional equity arising from the forced sale of his home. It was submitted that an order of six months pay comprehending both notice and redundancy was inadequate to afford justice in the circumstances of this case; (b) An alleged error in his Honour's observations that the appellant's case was framed merely as a "conduct" case. His Honour failed to independently consider whether there was any relevant unfairness in the terms of the appellant's employment contract, particularly the fairness of the terms surrounding the concessional loan agreements upon termination.

48 As to the cross appeal, the appellant contended there was no error in the approach of Marks J to the assessment of interest.

49 The respondent contended that this case turned on its own particular facts and that there was no issue of principle which would warrant the grant of leave in the public interest: Knowles v Anglican Church Property Trust (No.2) (1999) 95 IR 380 at 381 - 382, Dun & Bradstreet (Australia) Pty Ltd v Robbie (1999) 91 IR 150 at 151.

50 Mr Murphy contended that the findings of fact made by Marks J, in relation to both the treatment of the appellant's loans and the questions of notice and redundancy were clearly open on the evidence. In any event, there would be little utility in granting leave to appeal as, on the appellant's own evidence, the fact that the concessional interest rate was not immediately continued following termination and that the monies paid under the loans were belatedly refunded, would not have affected the appellant's need to sell his home.

51 As to the question of leave on the respondent's cross appeal, the respondent contended that leave ought be granted as his Honour's decision to order the payment of interest from the date of termination to December 2000, a period of some eleven years, is a departure from the approach to interest payments by Full Bench authority of both this Commission and its predecessors: see Thomas Nationwide Transport v Thomas, Westfield v Helprin and Abboud v State of New South Wales (No.2).

52 Appeals to a Full Bench of the Commission are subject to the grant of leave: s 188(2). As identified in the respondent's submissions, leave will not lightly be granted. The most frequently cited contemporary authority on the grant of leave to appeal is the judgment of the Full Bench in Knowles v Anglican Church Property Trust (No.2) at 381 - 382, where it was stated: We have determined that the Commission should not grant leave to appeal pursuant to s188 of the Act. In doing so we do not propose to depart from the general policy and practice of the Commission not to give reasons for the refusal of leave. However, we do propose to make some observations as to the conduct of appeals where the grant of leave is required which are apposite in the present matter. Firstly, as a Full Bench of this Commission noted in Perrott v Xcellenet Australia Limited (1998) 84 IR 255 at 265 , leave will not lightly or automatically be granted. The statutory scheme makes clear that the legislature intended to restrict access to appeals to appropriate cases meeting the public interest test stated in s188(2) . These principles are also applicable to cases involving questions of jurisdiction. The raising of a jurisdictional issue by an appellant does not, of itself, establish a basis for the grant of leave; each case having to be judged against the statutory criterion. The Commission should have regard to the nature of the jurisdictional issue and whether there is a demonstrable case that the Commission has exceeded or failed to exercise its jurisdiction. Clearly, this consideration will involve a question as to whether the decision appealed from was inconsistent with established law and principle.

Secondly, it will be relevant to the grant of leave to consider, amongst other factors, whether the appellant has brought, as in this matter, a substantially different case in the appeal. This is not to say that the admission of new evidence per se would have this result, but that the bringing of, in substance, a new or materially different case on appeal may constitute a basis for the refusal of an application for leave to appeal.

In Caltex Petroleum Pty Ltd v Harmer [(1999) 92 IR 264] the Full Bench stated: As to the second matter averted to above, we consider that leave would ordinarily, in the absence of changed circumstances, be refused where an appellant raises arguments or presses issues on the appeal which were not squarely raised at first instance; irrespective of whether the relief sought or the outcome contended for by the appellant remains the same or substantially the same... We agree with the principle so stated. Thirdly, it will be relevant to consider whether an appeal raises substantial and important considerations. The issues raised by an appellant as to the public interest considerations under s188(2) need to be evaluated in the light of the nature of the issues raised in the appeal, including whether the appeal raises substantial issues of principle or law or has wider implications for the jurisprudence of this Commission, including whether the decision has widespread practical application.

53 That passage has been relied upon in a number of Full Bench judgments. See, for example, Sykes v Alan East Pty Ltd (Formerly National Meat Supplies Pty Ltd) [2000] NSWIRComm 1130, Riley v Australian Grader Hire Pty Ltd (2001) 103 IR 143 at 144, Llandilo Staircases Pty Ltd v WorkCover Authority of New South Wales (Inspector Parsons) (2001) 104 IR 204 at 206, Mitchforce v Starkey [2002] NSWIRComm 85 and Abdullah Al-Shennag v Bankstown City Council Civic Services Group [2002] NSWIRComm 150.

54 Having regard to the submissions of the appellant on the question of leave in his appeal, it is plain that in large measure, the appeal seeks to challenge the findings of fact made by his Honour. As was made clear by the Full Bench in Knowles an appeal which seeks, by and large, to challenge findings of fact or the exercise of discretion of a member of the Commission, will face a significant hurdle in obtaining leave to appeal. In this regard we would reiterate what was stated by the Full Bench in Box Valley Pty Ltd v Price (2000) 97 IR 484 at [4]: In any event, we think it should be emphasised, as clearly as we may, that appellate review is not available under this statute as of right, but requires the requisite degree of importance to attract leave to appeal. Mere contest as to findings of fact which might otherwise remain open on the evidence will generally, in the absence of other considerations, not attract leave.

55 This passage has recently been referred to with approval by Full Benches of the Commission in Abdullah Al-Shennag v Bankstown City Council Civic Services Group, Nguyen v Swan Services Pty Limited [2002] NSWIRComm 322 and Ward v Mobile Innovations Limited [2002] NSWIRComm 287 in appeal proceedings from decisions under s 84 of the statute. As was observed in the last of those cases, "primacy must be given to first instance judgments in this respect". We consider that these observations are equally applicable to significant aspects of the current proceedings.

56 Having regard to the appellant's submissions on leave to appeal as referred to above, the challenge to the judgment of Marks J at first instance has, in essence, two foundations. First, his Honour was in error in failing to find that there was unfairness either in the terms of the contract of employment and the loan agreements which were entered into as a feature of that agreement, or the conduct of the respondent in relation to the management of the loan agreements upon being made redundant. Second, due to the approach his Honour adopted in aggregating notice and redundancy into the one payment, the monetary orders made by his Honour were not just in the circumstances of the case.

57 We consider that this is an appropriate case in which to grant both leave to appeal and leave to cross appeal. Whilst the mere raising of factual or legal error, a jurisdictional issue or an argument which suggests there was some novelty in the approach adopted, or in the remedy granted at first instance, will not automatically result in the grant of leave, the questions going to the appropriateness of taking into consideration the "distress" associated with the appellant's termination of employment when making monetary orders is a matter which ought be considered by the Full Bench. We are also satisfied that there has been error demonstrated in the way his Honour aggregated redundancy and notice payments upon termination when exercising the powers under s 106(5) to make monetary orders. Nature of the Appeal 58 One matter argued on the appeal was the nature of an appeal to a Full Bench of the Commission in Court Session, having regard to the provisions of s 191 of the statute and the recent judgment of the High Court in Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission (2000) 203 CLR 194.

59 The appellant's submission was, having regard to the Coal and Allied decision, the consideration essentially that s 191 of the Industrial Relations Act provides scope to introduce new evidence on appeal should lead to the conclusion that an appeal to a Full Bench under s 191 is by way of rehearing and not an appeal stricto sensu. The respondent, on the other hand contends that the Coal and Allied decision, as with the earlier decision in Re Coldham; Ex Parte Brideson (No 2) (1990) 170 CLR 267, focussed upon the nature of an appeal being determined by reference to the statutory provisions which provide for the appeal. As such, on the respondent's contentions, s 191(3) of the Act and the reference to the decision of the Full Bench in Big W Discount Stores v Donato (1995) 58 IR 239 at 234 - 244 in the associated note, demonstrate that the nature of an appeal under the Industrial Relations Act is an appeal stricto sensu.

60 In Coal and Allied the High Court considered the nature of an appeal under s 45 of the Workplace Relations Act 1996 (Cth). The construction of the provision was necessary to determine whether the judgment of the Full Court of the Federal Court under appeal, was correct. The Full Federal Court had held that the Australian Industrial Relations Commission, in approaching appeal proceedings on a particular basis, had constructively failed to exercise its jurisdiction.

61 In the proceedings before the Full Federal Court, it had been held, as to the nature of an appeal under s 45 (see Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission (1998) 89 FCR 200 at 228 - 230): Section 45 might be approached on the footing that all appeals that might be brought under it are appeals of the same character. That is, appeals against all the matters identified in the paragraphs (a) to (g) in s 45(1) are of the same character irrespective of whether the decision, act or function referred to in the paragraph involved the exercise of discretionary power or involved the exercise of a non-discretionary power such as determining whether the Commission had jurisdiction in a particular proceedings. On this approach the judgment of the High Court in Brideson (No 2) would lend strong support for the view, or even dictate, that the Full Bench, if it grants leave, engages in the task described in the judgment of the Court in Brideson (No 2) . That is because the appeal arising under s 45(1)(g) concerns essentially the same, though in some respects wider, powers that were the subject of appeal under s 88F and considered in Brideson (No 2) . That approach denies, when determining the appeal, the operation of the principle discussed by the Full Bench of the C&A Commission in the AWU v Poon Bros and recently confirmed by a Full Bench of the Commission in Asahi Diamond Industrial Australia Pty Ltd v Automotive Food Metals and Engineering Union (1995) 59 IR 385 which was a bench constituted by the President, the two Vice Presidents and two other members of the Commission. That Full Bench confirmed that the approach of the Commission in determining an appeal against the exercise of a discretionary power should be that identified in Poon Bros v Australian Workers Union . However such an approach to the jurisdiction created by s 45 would ignore the disparate range of powers and functions that are amenable to appeal under s 45. As was apparent from the decision of the High Court in Brideson (No 2) the nature of the power that is subject to appeal is a material, if not critical, consideration in ascertaining the nature of the appeal. It is not a novel proposition that the nature of the power which is amendable to appeal is material in ascertaining the nature of the appeal: see Turnbull v New South Wales Medical Board [1976] 2 NSWLR 281 at 285 and 298. Section 45 enables an appeal to be brought against the exercise of a discretionary power as well as powers which involve no discretion such as finding or not finding the existence of an industrial dispute. Section 45(7) confers wide powers on a Full Bench when hearing an appeal and the nature and scope of the powers are consistent with an appeal in which the Full Bench would simply exercise afresh the power from which the appeal was brought. However they are equally consistent with an appellate function where, if the appeal was against the exercise of a discretionary power, the appellate jurisdiction of the Full Bench was limited to ascertaining whether the discretion was erroneously exercised and if it was, correcting the error. The fact that the Full Bench may entertain further evidence is not inconsistent with a strict appeal: see Duralla Pty Ltd v Plant (1984) 2 FCR 342, though the approach to be adopted in a review of a discretionary decision may alter if fresh evidence is led because the factual matrix in which the exercise of the power would have to be considered might have altered: see Petreski v Cargill (1987) 18 FCR 68 at 75 and the observations of Toohey and Gaudron JJ in Mickelberg v The Queen (1989) 167 CLR 259 at 298. The better view is that s 45 was intended to create several types of appeal with differing characteristics having regard to the power, act or function against which an appeal can be brought. The powers, acts or functions are identified in s 45(1). If the power, act or function is one that is truly discretionary, such as a decision under s 111(1)(g) to refrain from further hearing a dispute: see s 45(1)(d), then the appellate function of the Full Bench, if leave to appeal is given, involves ascertaining whether the exercise of the discretion was attended by appellable error of the type discussed in House v The King . The rationale for the appeal being of that character was discussed by Mason and Deane JJ in Norbis v Norbis (1986) 161 CLR 513 at 518-519: … If on the other hand the appeal under s 45 is against the exercise of a power, act or function which is not discretionary such as a decision that a member has jurisdiction: see s 45(1)(g), or is, additionally, a function that must be exercised by reference to current facts (that is, facts existing at the time the Full Bench hears the appeal) such as a decision of a designated Presidential member under s 189 to register an association of employees as an organization of employees: see s 45(1)(f), then the powers and functions of the Full Bench are not so constrained. Further, if the appeal is against the exercise of a discretionary power, and the Full Bench permits the tender of evidence that alters the factual matrix by reference to which the power had earlier been exercised, then, as earlier discussed, that would bear upon the application of the principles in House v King . It would not, however, alter the nature of the Full Bench's jurisdiction.

62 On appeal to the High Court, Gleeson CJ, Gaudron and Hayne JJ dealt with the nature of an appeal under s 45 in the following terms (footnotes omitted and emphasis added):

[11] It was pointed out in Brideson [No 2] that "the nature of [an] appeal must ultimately depend on the terms of the statute conferring the right [of appeal]". The statute in question may confer limited or large powers on an appellate body; it may confer powers that are unique to the tribunal concerned or powers that are common to other appellate bodies. There is, thus, no definitive classification of appeals, merely descriptive phrases by which an appeal to one body may sometimes be conveniently distinguished from an appeal to another. [12] It is common and often convenient to describe an appeal to a court or tribunal whose function is simply to determine whether the decision in question was right or wrong on the evidence and the law as it stood when that decision was given as an appeal in the strict sense. An appeal to this Court under s 73 of the Constitution is an appeal of that kind. In the case of an appeal in the strict sense, an appellate court or tribunal cannot receive further evidence and its powers are limited to setting aside the decision under appeal and, if it be appropriate, to substituting the decision that should have been made at first instance. [13] If an appellate tribunal can receive further evidence and its powers are not restricted to making the decision that should have been made at first instance, the appeal is usually and conveniently described as an appeal by way of rehearing. Although further evidence may be admitted on an appeal of that kind, the appeal is usually conducted by reference to the evidence given at first instance and is to be contrasted with an appeal by way of hearing de novo. In the case of a hearing de novo, the matter is heard afresh and a decision is given on the evidence presented at that hearing. [14] Ordinarily, if there has been no further evidence admitted and if there has been no relevant change in the law, a court or tribunal entertaining an appeal by way of rehearing can exercise its appellate powers only if satisfied that there was error on the part of the primary decision-maker. That is because statutory provisions conferring appellate powers, even in the case of an appeal by way of rehearing, are construed on the basis that, unless there is something to indicate otherwise, the power is to be exercised for the correction of error. However, the conferral of a right of appeal by way of a hearing de novo is construed as a proceeding in which the appellate body is required to exercise its powers whether or not there was error at first instance. [15] The provision considered in Brideson [No 2] conferred power on the Commission to take further evidence, a provision which is indicative of an appeal by way of rehearing. It also required the Commission to "make such order as it [thought] fit". The latter requirement indicated that the Commission's appellate powers were not constrained by the need to identify error on the part of the primary decision-maker, but, rather, that the Commission was obliged to give its own decision on the evidence before it. [16] The terms of s 45 of the Act are different from the terms of the provision considered in Brideson [No 2]. Unlike that provision, s 45 does not require a Full Bench of the Commission to "make such order as it thinks fit". Nor is there anything else in the terms of s 45 to suggest that the powers of a Full Bench are exercisable or, as in Brideson [No 2], are required to be exercised in the absence of error on the part of the primary decision-maker. [17] Because a Full Bench of the Commission has power under s 45(6) of the Act to receive further evidence on appeal, an appeal under that section is properly described as an appeal by way of rehearing. And because there is nothing to suggest otherwise, its powers under sub-s (7) are exercisable only if there is error on the part of the primary decision-maker. And that is so regardless of the different decisions that may be the subject of an appeal under s 45. [18] The Full Court was in error in thinking that the nature of an appeal under s 45 differs according to the nature of the decision under appeal. However, it was correct to hold that, in the case of a discretionary decision, the exercise by a Full Bench of the Commission of its powers under s 45(7) of the Act depends on the decision at first instance being attended by appealable error. That being so, it is necessary to consider the manner in which the Full Bench determined the appeal from Boulton J. Before doing so, however, it is convenient to say something as to the concept of "a discretionary decision".

63 Their Honours then considered the nature of the decision made by Boulton J in the Commission at first instance, making some important observations on the indicia of a discretionary decision, and determined that, as the decision was in a "broad sense" a discretionary decision, there was no error in the approach of the Full Bench of the Commission on appeal.

64 Although it may not be necessary to determine finally the nature of an appeal under s 191 of the Industrial Relations Act for the determination of these appeals, as their result is unlikely to vary whether the appeals are viewed as a rehearing or by way of an appeal in the strict sense, it is appropriate, in the circumstances, to deal with the issue.

65 The following principles may be extracted from the passage set out earlier from Coal and Allied:

(a) the nature of an appeal is to be determined as a matter of construction having regard to the provisions of the relevant statute providing for the appeal and the nature of the decision the subject of appeal. (b) in saying that the nature of an appeal must ultimately depend on the terms of the statute conferring the right of appeal, it must be recognised that the statute may confer limited or large powers on the appellate body; it may confer powers which are unique to the tribunal concerned or powers which are common to other appellate bodies. There is thus no definitive classification of appeals, merely descriptive phrases by which an appeal to one body may sometimes be conveniently distinguished from an appeal to another. (c) "an appeal in the strict sense" is an expression commonly and conveniently used to describe an appeal to a court or tribunal the function of which is simply to determine whether the decision in question was right or wrong on the evidence and the law as it stood when that decision was given. (d) "an appeal by way of rehearing" is an expression commonly and conveniently used where the appellate tribunal can receive further evidence and where an appellate tribunal's powers are not restricted to making the decision that should have been made at first instance. (e) in an appeal by way of hearing de novo, the matter is heard afresh and a decision is given on the evidence presented at that hearing. (f) ordinarily, if there has been no further evidence admitted and no relevant change in the law, a court or tribunal entertaining an appeal by way of rehearing may exercise its appellate powers only if satisfied that there was error on the part of the primary decision-maker. (g) statutory provisions conferring appellate powers, even in the case of an appeal by way of rehearing, are construed on the basis that, unless the contrary is in some way indicated, the power is to be exercised for the correction of error. (h) however, the conferral of a right of appeal by way of a hearing de novo is construed as a proceeding in which the appellate body is required to exercise its powers whether or not there was error at first instance. (i) a provision conferring power to take further evidence is indicative of an appeal by way of rehearing. (j) a provision that the appellate body is to make such orders as it thinks fit is indicative of the appellate powers being relevantly unconstrained by the need to identify error, but rather, that the tribunal is obliged to give its own decision on the evidence before it.

66 The nature of an appeal to a Full Bench of the Commission in Court Session is provided for in s 191 in the following terms:

191 Nature of Appeal (1) An appeal to a Full Bench of the Commission under this Part is not by way of a new hearing and is to be determined on the evidence and material adduced in relation to the decision appealed against. (2) However, the Full Bench may, by leave, receive further evidence if it considers that special grounds exist or if the evidence concerns matters occurring after the decision appealed against. (3) To avoid doubt, the Full Bench cannot merely substitute its decision on the matter, but must follow the principles applying to appeals from discretionary decisions, whether or not further evidence is received.

Note. The above section generally follows the decision of the Full Industrial Relations Commission in Big W Discount Stores v Donato (1995) 58 IR 239 as to the nature of an appeal. The appeals in respect of which the section applies include appeals in connection with awards, unfair dismissals, approvals of enterprise agreements, unfair contracts or contraventions of dispute orders.

67 The reference in s 191(1) to a "new hearing" does present some difficulties. One might assume a draftsperson attempting to use a "plain English" approach might have substituted the phrase "new hearing" for an appeal more traditionally described by the Latinate expression hearing de novo. Nevertheless it is unlikely that the draftsperson would consider it necessary to exclude expressly a hearing de novo since that could not seriously have been contemplated as an option. If there were any doubt as to this view, reference to legislative history would dispel it. Having regard to the statutory predecessors to s 191, namely ss 297 and 382 of the Industrial Relations Act 1991 and ss 14(8) and 24(9) of the Industrial Arbitration Act 1940, it is clear that s 191 is a hybrid provision designed to provide an appeal from two tribunals of a very different nature. That is, the Commission in Court Session where the Commission sits as a superior court of record, and the Industrial Relations Commission where the Commission sits as a quasi-judicial industrial tribunal: see, for example, LEP International Pty Limited v Caine (2000) 97 IR 35 at [21].

68 Close attention to historical appeal provisions in the earlier industrial legislation would seem to indicate that, in drafting s 191, particular regard was paid to s 24(9) of the 1940 statute, which provided a mechanism for an appeal pursuant to s 24(8) against, inter alia, "an order, award or decision of a committee or of a conciliation commissioner", on the basis that the "appeal shall not be by way of rehearing and … shall be determined solely on the evidence placed before the committee or conciliation commissioner". It also provided that the Commission could "call for or receive further information or evidence which was not available at the time of hearing of the matter before the committee or conciliation commissioner". The reference then to an "appeal to a Full Bench of the Commission … not [being] by way of a new hearing …" is to be seen as excluding such an appeal being by the form of appeal traditionally described as a rehearing. The legislative history therefore confirms the conclusion which is, in any event, clear when the section is read as a whole.

69 The terms of s 191(3) are particularly significant. It provides that the Full Bench "cannot merely substitute its decision on the matter". It must "follow the principles applying to appeals from discretionary decisions, whether or not further evidence is admitted". Also important is the speech of the Minister upon the Bill's passage through Parliament (Hansard, Legislative Council, 23 November 1995, pp 3852 to 3853): The nature of an appeal must ultimately depend on the statute under which the appeal is authorised. As the proper construction of the appeal provisions in the 1991 Act has been the subject of differing interpretations, it is the Government's intention to resolve the legislative ambiguity concerning appeal principles. The appeal provisions within the bill have been redrafted to provide clear legislative direction concerning the principles to be applied by full benches when considering appeals against discretionary decisions of single members. The approach adopted by the High Court of Australian in judgments such Mace v Murray (1958) 92 CLR 370 and House v The King (1936) 55 CLR 499, commends itself as the appropriate principle to apply in appeals against decisions involving an exercise of discretion, which we would regard as including decisions concerning wages and conditions of employment, and unfair dismissals.

The approach endorsed in the bill is that an appellate bench is not justified in interfering with the decision at first instance, except in limited circumstances where the appellate bench reaches a clear conclusion that, by reason of some error, whether of fact or law, the primary tribunal not only has taken a view different from that which the members of the appeal tribunal would have taken, but has failed to exercise properly the discretion committed to it. These appeal principles are intended to apply even in the comparatively isolated circumstances where additional evidence is received by the appellate bench: there is no intention to have two types of appeals and differing approaches to the nature of the appeal principles depending on whether additional matters are adduced. (Emphasis added)

70 See also the "Note" attached to s 191. Whilst it may be observed that s 9 of the Industrial Relations Act provides that "Notes" in the text of the Act do not form part of the statute, s 34(2)(a) of the Interpretation Act 1987 permits such a note to be taken into account in interpreting the statute. The limits to the literal application of the words of s 191(3) and the significance of the reference to Big W Discount Stores v Donato, in the Note to s 191 were addressed by the joint decision of Hungerford J and Murphy C in Re Solicitors (State) Award (No 3) (1997) 72 IR 225 (with whom Peterson J agreed in this regard at 240), where it was stated (at 233 - 235): However, to the extent the respondents argued we should apply on appeal the sole test applicable to an appeal against discretionary decisions said to be required by s 191(3) of the 1996 Act, and as that difference between the parties was fully argued, we should deal with it. It became apparent under the 1991 Act that divergent views as to the nature of an appeal developed within the then Commission as demonstrated in Electricity Commission of New South Wales T/as Pacific Power v. Crump and Big W Discount Stores v. Donato , on the one hand, and Outboard World Pty. Limited T/as Budget Waste Control (Sydney) v. Muir , on the other hand. The differing views related very much to the ability of an appellate bench to call for fresh or new evidence on appeal. To address the perceived differing views on the proper nature of an appeal, sub-s (3) of s 191 was included in the 1996 Act in the following terms: (3) To avoid doubt, the Full Bench cannot merely substitute its decision on the matter, but must follow the principles applying to appeals from discretionary decisions, whether or not further evidence is received. Although not forming part of the 1996 Act (see s 9 thereof) but able to be taken into account in the interpretation of a provision of a statute in resolving ambiguity, obscurity, manifest absurdity or unreasonableness (see s 34(2)(a) of the Interpretation Act 1987), a note at the end of s 191 states that the section generally follows the decision in Donato as to the nature of an appeal and that "the appeals in respect of which the section applies include appeals in connection with awards, unfair dismissals, approvals of enterprise agreements, unfair contracts or contraventions of dispute orders." So, on its face, the sub-section seems to apply a single test to all appeals, as Mr. Kite and Mr. Kimber submitted before us, whereas the note infers that it applies to certain stated appeals but not to other unstated appeals. Hence the ambiguity, albeit that the sub-section was enacted "to avoid doubt". The matter becomes a real issue, as argued in this case, where the appeal involves questions of law and/or fact not requiring the exercise of a discretion. Given that statements in Hansard by a Minister in introducing a bill can be admitted as evidence of the mischief sought to be remedied by the statute (see Building Construction Employees and Builders' Labourers Federation of New South Wales v. Minister for Industrial Relations and, in any event, s 34(2)(f) of the Interpretation Act as to the use of extrinsic material in statutory interpretation), the speech by the Minister in moving the second reading of the Industrial Relations Bill 1995, which was adopted in the moving of the later Industrial Relations Bill 1996 leading to the 1996 Act, relevantly stated: [the extract from the Minister's Second Reading is then set out and the judgment continues]

It is clear to us that the vice sought to be remedied by the legislature was the "differing interpretations" as to the appeal provisions in the 1991 Act. The remedy, eventually s 191(3) of the 1996 Act, as the speech again made clear, was "to be applied by full benches when considering appeals against discretionary decisions of single members" (emphasis in original) and as being "the appropriate principle to apply in appeals against decisions involving an exercise of discretion." In our view, then, and although the Minister indicated "no intention to have two types of appeals and differing approaches to the nature of the appeal principles", the identified mischief and statutory remedy only concerned appeals against discretionary decisions; otherwise, in our view, appeals against matters of law and/or fact were to continue to attract the long-standing and ordinary principles. Even though that will result in different approaches on appeal, the difference will be not a differing approach to the same type of appeal but only the adoption of the appropriate principles according to the type of appeal being considered. We find on this aspect, therefore, that the submissions by Mr Wright are to be preferred over those of Mr Kite and Mr Kimber . In summary, we consider the proper approach to this appeal, and as being entirely consistent with s 191 of the 1996 Act, to be in accordance with the decision of the Full Court ( Bauer , Hill and Hungerford JJ.) of the former Industrial Court in relation to appeals pursuant to s 297 of the 1991 Act in Haynes v. C.I. & D. Manufacturing Pty. Limited , namely: Our view is that such an appeal is an appeal stricto sensu on both fact and law, and not, we think, by way of a hearing de novo . As Lord Westbury L.C. observed in Attorney-General v. Sillem ((1864 10 H.L.C. 704 at 724) "(a)n appeal is the right of entering a superior Court and invoking its aid and interposition to redress the error of the Court below" - we regard that as apposite in describing the nature of appeals to the Full Court pursuant to s.297(2)(d) of the IR Act. That principle requires attention by us to the findings of fact made by Schmidt J. to determine whether such findings, and the inferences drawn from them by her Honour, revealed any error authorising appellate interference: per Kirby P. in Walker v. Industrial Court of New South Wales ((1994) 53 I.R. 121 at 129) and per McHugh J. (with whom Mason C.J., Deane , Dawson and Gaudron JJ. agreed) in Abalos v. Australian Postal Commission ((1990) 171 C.L.R. 167 at 178ff). It is not, of course, we would interpose, every case which would require an appellate court to substitute its views for those of the primary judge, and in that respect we agree with the comment by Hill J. sitting on appeal in this Court in Hussmann Australia Pty. Limited v. Walker ((1993 48 I.R. 396 at 406) to the effect that there should be no interference with "conclusions on facts unless (the Full Court) is of the opinion that they were not reasonably open on the evidence". Appeals against a decision involving the exercise of a discretion by the primary judge, on the other hand, have long required that the appellate court is not justified in interfering with the decision appealed from unless it reaches the clear conclusion that by reason of some error, whether of fact or of law, the primary judge not only has taken a different view but has failed properly to exercise the discretion conferred: House v. The King ((1936) 55 C.L.R. 499 at 504-505) and Mace v. Murray ((1955) 92 C.L.R. 370 at 378). For completeness, we may perhaps add the special position of the primary judge in cases dependent for their outcome on the demeanour and credibility of witnesses in resolving conflicts in the evidence: Abalos (at 179). The duty of the Full Court on appeal to make its determination on the evidence adduced at first instance is qualified by its ability to call for any other evidence, whether or not fresh or new evidence, and information: s.299. Notwithstanding that power to receive fresh or new evidence, we do not regard such a provision as changing the nature of the appeal, as we have stated it, given by s.297(2)(d). If fresh or new evidence be admitted on appeal, a course arising only where the Full Court itself, and not a party, has "called for" it, the result is that the Full Court will review the challenged decision on the evidence below and on such fresh or new evidence as it thinks fit to receive: see Professional Officers' Association of N.S.W. & Anor. v. N.S.W. Teachers' Federation & Ors ((1994) 54 I.R. 85 at 107). For completeness, we refer to and adopt the decision of the Full Commission ( Bauer and Hungerford JJ, and McKenna C.C.) of the former 1991 Act Commission in Re Government Cleaning Service (Privatisation) Award (No.3) as to the principles to be applied on appeal, and in which the various aspects were reasoned extensively, as being consistent with s.191 of the 1996 Act as to the nature of an appeal: see also the observations to a similar effect concerning the nature of an appeal by the Full Court of the former Industrial Court in Port Macquarie Golf Club Ltd. v. Stead . (footnotes omitted) 71 This decision was adopted by the Full Bench of the Commission in Court Session in Stone Microsystems (Aust) Pty Limited v Kwong (1997) 42 NSWLR 160 at 163, (1997) 85 IR 237 at 239. Having set out the provisions of s 191 the Full Bench in Stone Microsystems v Kwong stated: The section applies to all appeals, with the exception of appeals in criminal cases, to a Full Bench of the Commission whether under the 1996 Act or the 1991 Act (cl 31(5) sch. 4 of the 1996 Act). However, not infrequently, such appeals do not raise questions going to the exercise of discretion at first instance. Many appeals raise only questions of fact or law (including jurisdiction) and/or questions of mixed fact and law; some may raise those questions and also questions going to the exercise of discretion; others may raise only questions of discretion. Accordingly, despite the literal width of s 191(3), it must, in our view, be read down to have application only to an appeal in so far as it raises a question going to the exercise of discretion by the primary tribunal. To the extent that an appeal involves questions of fact and/or law then the normal principles applicable to such appeals apply. (reference was made to the decision in Re Solicitors (State) Award and the judgment continued at 239): We agree with the decision of the Full Bench of the Commission in relation to the meaning and effect of s 191. Accordingly, in the present appeal, issues relating to the existence of a contract or arrangement under which a person performs work in an industry and findings of fact and/or law relevant thereto, and the issue of the unfairness of any such contract or arrangement and findings of fact and law relevant thereto, are matters which will attract the normal principles which apply to appeals stricto sensu on questions of fact and/or law ; issues concerning the avoidance of the unfair contract or arrangement and the making and amount of monetary orders in connection therewith (except as to any questions of fact or law) will attract the principles applicable to the determination of appeals against discretionary decisions, namely, the principles laid down in House v The King and Mace v Murray . (footnotes omitted).

72 These decisions have formed the foundation of principle upon which appeal proceedings before a Full Bench of the Commission have been determined for some time. The principles espoused in those decisions have been adopted or referred to with approval in numerous subsequent Full Bench decisions including Abboud v The State of New South Wales (Department of School Education) (1999) 92 IR 32 at 42, Drake Personnel Ltd t/as Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 432 at 446, WorkCover Authority of New South Wales (Inspector Keenan) v Technical and Further Education Commission (1999) 92 IR 251 at 260, Hollingsworth v Commissioner of Police (No 2) (1999) 47 NSWLR 151, (1999) 88 IR 282, Wang v Crestell Industries Pty Ltd (1997) 73 IR 454 at 455 - 457, CCH Australia Limited v Bowen (1998) 79 IR 206 at 210, Dun & Bradstreet (Australia) Pty Ltd v Robbie at 151, WorkCover Authority of New South Wales (Inspector Mulder) v Arbor Products International (Australia) Pty Ltd (2001) 105 IR 81, Wilson and Department of Education and Training (2000) 100 IR 1, Hilton Nursing Home Pty Ltd v Maciver (2000) 102 IR 335, Bates and Gundagai District Services Club [2000] NSWIRComm 22, Police Service of New South Wales v Batton (2000) 98 IR 154; and more recently in Ace Business Brokers Pty Ltd v Phillips-Treby (2000) 100 IR 420 at 428, Westfield Holdings v Adams (2001) 114 IR 241, Bultitude v Grice Constructions Pty Limited [2002] NSWIRComm 20 and Green v Brown (2002) 116 IR 21.

73 We conclude that the line of authority is entirely consistent with the observations in the judgment of the majority in Coal and Allied. As the passages emphasised in the above extract from the judgment make clear, there is no definitive classification of appeals in some abstract way. Although there are convenient descriptive phrases, their significance in any given case must ultimately depend on the terms of the statute conferring the right to appeal.

74 Having regard to the terms of s 191(3) and the other matters referred to above which may be properly taken into account, the nature of an appeal under the Industrial Relations Act is significantly different to that considered in Coal and Allied. Section 191(3) requires that, for all appeals before the Commission, the focus of appellate review is upon the decision appealed from "whether or not further evidence is received" (our emphasis). This conclusion is strengthened when one considers that appeals may only be brought to the Commission by leave and receipt of further evidence is significantly limited by s 191(2).

75 It is significant that the powers of the Full Bench on appeal, provided by s 192, are directed towards "the decision", that is, the decision the subject of appeal. Further, the Commission is not at large in the exercise of power in an appeal (see s 192(1)).

76 As authorities of the Full Bench and its predecessors emphasise, the appellate scheme under the Industrial Relations Act provides that the powers of the Full Bench on appeal are directed towards correcting error and do not permit the Commission to substitute its decision for that at first instance. We consider that the appeal in this matter is an appeal stricto sensu. 77 Whilst such a construction may prove troublesome in the relatively rare case where leave is granted to admit fresh evidence, we are not satisfied that the terms of s 191(2) are such as to warrant or require a departure from the long settled practice of this Court as to the nature of an appeal under the statute. We reject the appellant's submissions in this respect.

78 The first substantial argument raised on behalf of the appellant as to the unfairness of the contract concerned the inadequacy of the period of notice given by the respondent on termination. The appellant submitted that in the circumstances of the case the provision of six months pay in lieu of notice (with credit for one month paid) was inadequate. 79 In Lavings v Barclay Mowlem Construction (NSW) Pty Limited (unreported, 15 December 1994), Hill J stated (at 12 - 13): As to the period of notice the authorities demonstrate that the period of " reasonable" notice be implied in a contract of employment which is silent on the matter depends upon all the relevant circumstances of the particular employment, including (but not limited to) the nature and status of the position, the degree of responsibility and authority involved, the qualification and experience necessary, the availability of suitable alternative employment, the amount and form of remuneration and the basis upon which it is expressed, any relevant trade, custom or practice and the length of service of the employee. (See also Port Macquarie Golf Club Limited v Stead (1996) 64 IR 53 at 67; Pullen v R & C Products Pty Ltd (1994) 60 IR 183 at 210 and Ross v GN Comtext (Australia) Pty Limited at [21]).

80 Examination of his Honour's reasoning in finding six months in lieu of notice was appropriate, reveals his Honour considered representations made by the respondent to the appellant prior to the appellant accepting employment with the respondent; the reasonably senior level at which the appellant was employed by the respondent; the fact PFAS and the respondent's other merchant banking activities were under review before the appellant's appointment and the respondent had failed to give the appellant any indication there was any concern in the performance of the area to which the respondent was offering the appellant employment.

81 His Honour considered the issue as to the failure of the respondent to provide the appellant with appropriate employment. His Honour also considered factors as to the appellant's knowledge of the financial world at the time and the respondent's failure to reveal the concerns within its own operations. Such issues were, we consider, proper issues for his Honour to consider as to notice.

82 We reject the submission of the appellant that his Honour regarded the short term of employment as a negative factor in the consideration as to what was a reasonable period of notice. We consider that his Honour took into account the length of service in the balance of his considerations, acknowledging that the displacement of the employee occurred in the circumstance of the promise of long term employment and where the respondent knew of the instability of the appellant's area of engagement prior to this appointment. We consider that this approach was open to his Honour and there was no error in his consideration of this evidence.

83 Turning then to the submission that there was a failure on behalf of his Honour to afford the appellant a reasonable severance payment in the circumstances of his termination, we are satisfied that his Honour's selection of six months to cover both payment in lieu of notice and redundancy was, in the circumstances of this case, incorrect in principle and, when considered in terms of principle, so inadequate as to demonstrate error.

84 The conceptional and functional distinctions between a severance or redundancy payment and its relationship with a payment made in lieu of notice have recently been considered in Westfield Holdings Ltd v Adams (2001) 114 IR 241 at [138] to [144]. We refer in particular to what was said by the Full Bench at [144]: [144] In our opinion, these authorities persuasively demonstrate the distinct functions to be served by awarding a payment in lieu of notice and a payment in the nature of redundancy or severance. Whilst a period of notice, or payment in lieu, is directed at supplementing the income of an employee immediately following termination, the focus of a redundancy or severance payment is to compensate an employee for the loss of non-transferable benefits and for the inconvenience and hardship imposed by the termination. This is, in our view, not merely an additional purpose, but rather the dominant function of a redundancy or severance payment. The fact that an employee may apply redundancy or severance payments to supplement the employee's income during a period of unemployment, or to support the employee and their family, does not alter the purpose of those payments being made. In many instances, an employee will, of necessity, be forced to draw on any available resources during a period of unemployment. The purpose of making a redundancy or severance payment is, nonetheless, qualitatively different to providing for the employee during this time.

85 Having referred to the differing nature of these payments, the Full Bench then considered the application of the principle of mitigation to each of these payments, noting that it would generally be appropriate to apply principles of mitigation to payments made in lieu of notice but not in relation to redundancy payments, as such payments are made "to compensate an employee for loss and hardship that is likely to accrue whether or not the employee is successful in obtaining reasonable alternative employment" (at [147]).

86 In resisting this aspect of the appellant's case, the respondent relied upon the judgment of Walton J, Vice-President in Ross v GN Comtext (Australia) Pty Limited (at [45]) as support for the contention that there was no error in his Honour making a single order with regard to both notice and redundancy payment, nor was there any misuse as to his Honour's discretion.

87 In our view, the Court may, in the use of its discretion, order a single payment to take into account the inadequacy of the notice and the failure to provide for adequate redundancy benefits. However, the cautionary words of the Full Bench in Westfield Holdings v Adams (at [161]) should be noted in that "it may be helpful to disaggregate payments for notice and payments for redundancy and, in the reasons for judgment, to explain how the respective amounts were arrived at" in order to assist "in avoiding the prospect of double counting that could arise out of the overlapping purposes of redundancy pay and payment in lieu of notice".

88 As was observed in Ross v GN Comtext (Australia) Pty Limited: [45] Whether, in a particular case, it is appropriate to order a separate payment in the nature of severance or redundancy pay or one payment in light of both notice and the circumstances of redundancy is a matter for the discretion of the Court. It may in some cases be convenient to assess separate sums, having regard to a reasonable period of notice and a reasonable redundancy payment.

89 The more significant question here relates to what would be an appropriate monetary order in relation to redundancy. In that regard, it is useful to have regard to the principles distilled in relation to the making of monetary orders under s 106(5) in Westfield Holdings v Adams at [154]:

(1) Whether or not a contract or arrangement is unfair within the meaning of ss 105 and 106 is a matter to be decided upon examination of the facts of each particular case; the sections deal largely with private rights inter partes; the focus of attention is the contractual relationship between a particular employer and employee. (2) Subject to the primary focus being the particular circumstances of the individual contract or arrangement concerned, in assessing whether unfairness has occurred general standards or levels, including standards of redundancy pay applying to employees covered by industrial awards or legislation, of what is considered to be fair will be factors to be considered. (3) Despite that a general and relevant industrial prescription governing benefits payable to employees in termination of employment situations may exist, unfairness in relation to a particular contract of employment may nevertheless arise in a situation of redundancy or termination of employment for reasons unrelated to or not relevant to the basis of award prescription of an objective and fair benefit. (4) The scale fixed in the Redundancy Awards Case was fixed on a "safety net" basis. In making money orders under s 106(5) the Court may have regard to the Redundancy Awards Case scale but is not bound to apply it in the context of the case before the Court. The Full Bench emphasised "the primacy of the particular circumstances of the individual contract or arrangement concerned" in making such orders.

90 We do not consider that his Honour erred in assessing compensation for notice jointly with redundancy. However, we consider there should have been additional compensation granted for the circumstances related to redundancy; his Honour having erred in finding the notice payment, which he had already determined, was sufficient. We find the sum ordered for the aggregated payment did not properly take into account the redundancy considerations, when regard is paid to the factors taken into account by his Honour in assessing notice.

91 We therefore determine that, in the circumstances, the order made at first instance should be varied to reflect an amount due to the appellant arising from the nature of his termination; that is, redundancy. In reaching this conclusion, we take into account during the period of employment the appellant was a senior employee and the considerable financial detriment the appellant suffered as a result of the employer's decision to terminate.

92 We find it is just in the circumstances to allow a further three months to the order made by his Honour for notice and redundancy (having regard to our conclusions on redundancy). We accept, for the purpose of this extra three months, the calculation should be based on the same salary rate as used in his Honour's determination as to payment in lieu of notice.

93 Turning then to the claim for the loss of equity associated with the appellant's home, we do not accept the submission of the appellant that his Honour's failure to determine whether or not the appellant had been made redundant from his prior employment at Citibank negated all consideration of fairness as to the employment contract with the respondent. As to the loans of equity in the home, his Honour held: [101] … The fact is that the applicant despite his best endeavours was unable to secure any meaningful income for some time and was substantially in arrears in servicing his debt not only to the respondent but also to the ANZ Bank for some time before the home was eventually sold. Given that the respondent did not, in my opinion, overall conduct itself unreasonably with respect to the management of the applicant's loans (save for the failure to apply its policy concerning concessional treatment for six months) I cannot see any justification in awarding the applicant any compensation based on a notional equity appropriate as at the date of hearing of the proceedings. . . I also reject any submission that any conduct of the respondent in its handling of the applicant's loans justified sheeting home to the respondent any loss calculated by reference to the loss of the applicant's equity in the Cremorne property.

94 This extract from his Honour's reasons shows that, in determining to deny this aspect of the application, consideration was given to the respondent's "overall" conduct (of the contract), including its conduct in handling the loans. However, his Honour found unfairness in the conduct of the respondent related to the management of the terms of the contract as to the low interest loan. His Honour found that after litigation commenced, the unfair conduct relating to the loans had been corrected in accordance with their terms. The respondent took the adjusted rates back to the date of termination. While we do not consider that it is open for us to interfere with his Honour's decision to reject the claim for loss of equity in the home, we consider his Honour failed to adequately consider the appellant's case concerning the respondent's failure to apply its policy as to concessional rates for six months. We consider that the appellant made out a case establishing that failure constituted unfair conduct for the purposes of s 106 of the statute.

95 We find it just in the circumstances to extend the operation of the concessional loan rates afforded the appellant by a further six months over and above that which the respondent's policy provided. That is, in the circumstances of this case, the concessional interest rates should have operated for a period of 12 months from the date of termination.

96 His Honour relied upon, and adopted as his reasoning as to the Court Session's jurisdiction to determine a compensation payment for distress, his judgment in Pullen v R & C Products Pty Limited (1994) 60 IR 183 at 215. In that case, Marks J posed the question in this way: Should compensation be awarded for the temporary physical damage and for the more enduring mental distress which the applicant suffered? Some guide may be obtained from those authorities which deal with damages which are properly recoverable at law. The seminal decision is Addis v Gramophone Company Limited [1909] AC 488. In that case the House of Lords held that an employee who had been dismissed in circumstances which were in breach of his contract of employment was unable to recover damages for injured feelings and loss of employment prospects. The decision in that case has remained unchallenged in Australia to the present time. It was considered by the High Court in Baltic Shipping Company Pty Limited v. Dillon (1993) 176 CLR 344. Mason CJ noted that there are exceptions to the application of the House of Lords decision in well recognised areas including circumstances where the plaintiff had suffered physical damage. Mason CJ did not attack the general application of Addis save for a restatement of the well known exceptions. McHugh J also dealt with Addis in some detail. He shared the approach of Mason CJ which questioned the policy grounds upon which Addis rested. However his Honour was not prepared to over-rule the application of Addis. (The other members of the High Court in large measure agreed with the judgment of Mason CJ.) 97 His Honour in Pullen found (at 216): In the absence of any finding that the contract of employment should be varied to insert any contractual term covering the circumstances in which the termination process should be undertaken, I am not inclined to award any moneys by way of compensation for any physical damage or any inconvenience and distress suffered by the applicant. 98 His Honour expressed the view that any orders as to monetary payment "must have some relevance to the contract or arrangement under attack and to any loss or damage directly sustained by the applicant." His Honour held the Commission in Court Session had power to award monetary compensation for "physical and mental injury" sustained by an employee consequent upon the termination of his employment. As his Honour reasoned at [110]: The power set out in s 106(5) of the Act to make an order for the payment of money is circumscribed by two matters. Firstly, the payment of money must be 'in connection with' any contract which is voided or varied. Secondly, the payment must be 'just' in the circumstances.

And stated at [111]: [I]n most cases distress will arise out of the fact of termination of employment per se rather than the inadequacy of any moneys paid on termination or the inadequacy of any notice . . . in most cases the termination of employment will of itself result in financial hardship to varying degrees

99 It was found that, because of the way the moneys were paid to the appellant on termination and the inappropriate taxation rate charged against the appellant on termination, had the appropriate amount been paid upon termination, the appellant would have enjoyed: … a significant improvement in his financial position for some little time. Such an improvement is directly connected with the unfairness which I have found and would have been further improved if the respondent had correctly applied its own policy to the concessional loans. … His Honour then found it just in the circumstances of the present case, to award compensation for the associated distress, in the sum of $15,000.

100 Whilst it appeared that the respondent, in its written submissions as to the cross appeal, challenged the jurisdiction of the Commission to make an order under s 106(5) in the nature of compensation for distress caused upon termination, Mr Murphy in oral submissions explained the challenge should be taken as going to the facts of this case. His submission was that, whilst it may be accepted the Commission has jurisdiction to make an order of that kind, it is an order which would very seldom arise in an application for relief under s 106 and the circumstances of this case were not an appropriate case in which to make such an order.

101 On Mr Murphy's submission, his Honour found that the termination did not cause the relevant "distress". Rather, his Honour found that the deprivation of the monies which were held back and should have been paid to him on termination, exacerbated the level of stress the appellant was under, since the circumstances would have placed him under greater financial strain than would otherwise have been the case and consequently warranted some compensation. Mr West contended that there was sufficient evidence to found his Honour's findings and relied upon relevant aspects of the medical evidence at first instance in support of this contention.

102 We consider that the concession of Mr Murphy as to the jurisdiction of this Court to make monetary orders under s 106 which have regard to or take into account "distress" caused upon termination were properly made. As Mr Murphy acknowledged, the common law has long held damages are not recoverable for "distress" as the result of wrongful termination of an employment contract. Statements of the law in this regard are generally traced back to the decision of the House of Lords in Addis v Gramophone Co Ltd [1909] AC 488: see also Baltic Shipping Company Pty Limited v Dillon (1993) 176 CLR 344, Aldersea v Public Transport Corporation (2001) 3 VR 499, Burazin v Blacktown City Guardian Pty Limited (1996) 142 ALR 144, Clunne v Nambucca Shire Council (1995) 63 IR 304.

103 However, as was submitted by the appellant and accepted by counsel for the respondent, the Court in making orders under s 106(5) is limited by the terms of the statute and cases at common law provide no more than useful guides to reasoned decision making in awarding compensation. So much was recognised by Marks J in Pullen v R & C Products Pty Limited and Hungerford J in Stonham v The Speaker of the Legislative Assembly of New South Wales (2000) 97 IR 325. We do not consider that this observation, seen in its proper context, is inconsistent with Westfield Holdings v Adams.

104 Indeed, such an approach was emphasised by the Full Bench in Westfield Holdings v Adams where, having referred to the contentions of the parties which sought to draw parallels between the monetary orders made under the Industrial Relations Act and those made at common law or under the Trade Practices Act 1974, the Full Bench stated: [113] The High Court, Court of Appeal and Full Benches of this Court and its predecessors have consistently referred to the width and generality of the language used in s 106. See in particular the description of the powers available to the Commission under s 88F by Kirby P in Walker v Industrial Court of New South Wales (1994) 53 IR 121 at 135 where his Honour said: The High Court of Australia, and this Court, have repeatedly stressed the very wide discretion conferred by s 88F upon the former Industrial Commission (and now the Court). Once s 88F(1) attaches, the remedies which are then at the disposal of the Commission (now the Court) are also extremely wide. There is no warrant for confining this very large power, or for narrowing the circumstances of its exercise, except as the statute provides. See Stevenson v Barham (1977)136 CLR 190 at 195,199,201.

[114] The language of s 106 is arguably even wider than that in ss 82 and 87 of the Trade Practices Act. If, on the basis of its scope and purpose, there is no foundation for limiting the language of the Trade Practices Act as expressed in ss 82 and 87, by drawing some analogy with the law of contract, tort or with equitable remedies. Similarly, in our view, there is no basis for doing so in respect of s 106 of the Industrial Relations Act, except to the extent that, in State of New South Wales v Health and Research Employees Association and Harcourt Brace , the Court referred to such arguments by analogy being, in appropriate circumstances, "persuasive".

[130] We have, of course, acknowledged earlier in this judgment that whilst orders made pursuant to s 106(5) should not be limited by drawing some analogy with the law of contract, tort or equitable remedies, it is proper to have regard to common law and equity principles but recognising that, in particular cases, some of the principles will be inappropriate. This means that, for example, where a contract or arrangement has been found to be unfair, and the unfairness has been caused by fraudulent misrepresentation or negligent misstatement, in making any money orders under s 106(5) it is proper for the trial judge, in appropriate cases, to have regard to the common law principles relating to the assessment of damages. It may also be helpful to have regard to approaches taken to the assessment of damages in decisions under ss 82 and 87 of the Trade Practices Act , especially where the common law principles may have been a consideration. However, given the different statutory requirements of ss 82 and 87 of the Trade Practices Act as opposed to s 106(5) of the Industrial Relations Act , particular caution needs to be exercised. Ultimately, the relevant guiding principle for the Commission in Court Session under s 106(5) is not confined to a question of what loss or damage an aggrieved party has suffered but rather a wider test, namely, what is just in the circumstances of the case. That is not to say that the discretion of a trial judge under s 106(5) is at large. The jurisprudence developed by the extensive case law on the subject enables, and requires, limits on what orders may or should be made. The statements of principle in these reasons should also assist in the clarification of any doubts that may be said to exist.

105 Thus, we accept that there will be cases, albeit very rare ones, where an award of compensation reflecting "distress" upon termination will fall within the statutory criteria of s 106(5). Having made that observation, it is necessary to make some reference as to what was said by his Honour at paragraph [84] and the reference to the judgment of the majority in Reich v Client Server Professionals (2000) 49 NSWLR 551, (2000) 99 IR 69 contained therein. At paragraph [84] his Honour stated: [84] In conformity with the expression of opinion of the majority in Reich it is only necessary that I find in the circumstances of these proceedings that there was unfair conduct on the part of the respondent and it is not necessary that I relate that conduct in any way to any terms of the underlying contract of employment or to any of the provisions of any arrangement or related condition or collateral arrangement.

106 There is no support to be found in the reasoning of the majority in Reich v Client Server Professionals for the view that "it is not necessary [to] relate … conduct in any way to any terms of the underlying contract of employment or to any of the provisions of any arrangement".

107 The issues that fell to be decided in Reich v Client Server Professionals were set out in that decision in the following terms: [2] … whether an action is properly within s 106 and as attracting relief thereunder where a respondent employer breached a contract of employment by repudiating a term or condition thereof so as to enable an action to be brought at common law for damages for breach of contract, and (ii) whether unfair conduct of itself by the respondent employer could establish a relevant ground of unfairness that the contract of employment was unfair under s 106 so as to attract relief thereunder.

108 The observations as to the relevance of conduct in an assessment of fairness in any contract (as defined), cannot be disengaged from the issues which there fell for consideration. Their Honours reviewed a number of authorities including McNaught v Micador Australia Pty Limited (1996) 83 IR 111 and Walker v Hussmann Australia Pty Ltd (1991) 24 NSWLR 451 before turning to consider the more recent case of Beahan v Bush Boake Allen Australia Ltd (1999) 47 NSWLR 648; (1999) 93 IR 1, their Honours noting that the last named case "was concerned with the distinction between relief for an unfair contract and that for an unfair dismissal so that consideration as to the relevance of an employer's conduct as affecting the employment relationship necessarily arose for consideration in determining whether power existed under s 106 to grant relief in respect of the unfair contract" (at [23]).

109 A substantial passage from Beahan v Bush Boake is then set out, containing references to Walker v Industrial Court of New South Wales (1994) 53 IR 121, Rothmans Distribution Services Limited v Full Court of the Industrial Court of New South Wales (1994) 53 IR 157 and Incitec Limited v Industrial Court of New South Wales (1992) 45 IR 155. The extract from Beahan concluded with the observation that: Again, it is to be emphasised, the reasoning was directed to the terms of the contract itself and how it operated in practice as distinct from whether the dismissal itself was unfair (harsh, unreasonable or unjust). See also Reich at pars [24] to [28]. The primary power to remedy any unfairness in the employment relationship is to be found in s 106(3); that is, the power to make a declaration declaring the contract "wholly or partly void, or varied, either from the commencement of the contract or from some other time". The power to make a monetary order in s 106(5) is consequential upon the power to vary the contract. That this was the approach adopted in Reich was recognised by the Full Bench in Origin Energy Limited v Smith (2001) 111 IR 476 when it was said:

[19] We would add one final observation. It was undoubtedly open to her Honour to deal with the matter in the way she did; that is as a "conduct" case. It may be that she had little alternative to doing so in view of the way in which the respondent framed his case. Nevertheless applicants, in framing their proceedings, and judges in hearing and deciding them, should not overlook the consideration that s 106 is directed to the fairness, etc of contracts and arrangements and with the fairness, etc of their terms, either in themselves as to what they actually provide or fail to provide. There is nothing in the Full Bench judgment in Reich that should lead to any different approach. It would have been preferable for the case before her Honour to have been framed and dealt with in that way. [20] Although conduct of a party which renders a contract or arrangement unfair or otherwise actionable under s 106 of the Industrial Relations Act may well provide jurisdiction for relief under that provision, the primary focus of the exercise of the Court's jurisdiction should be, where relevant and available, the contract or arrangement and its respective terms or omitted terms as to the effect thereon of the impugned conduct. This approach will usually lead to orders (where orders are made) more certainly well-founded jurisdictionally and will be less likely to result in appeals which, whilst superficially thought to be available, upon examination on appeal are soon shown to lack substance. Accordingly, for these reasons it would only be in rare circumstances that compensation would be granted for distress under s 106(5).

110 The issues in these proceedings as to the monetary orders representing "distress" arising from the appellant's redundancy, are, first whether there is a sufficient connection between the unfairness found and a monetary order to compensate the appellant for any distress caused and, second, whether the amount considered, or awarded, is excessive in that, for example, it involves any element of "double counting" or double compensation for matters considered in other parts of the sum awarded: see, for example, Westfield Holdings v Adams at pars [159] and [161] at (10). His Honour found that it would not have been just "in the sense of being fair to both the applicant and the respondent" to order a monetary payment for the onset of the appellant's depression, as on the evidence, his Honour found that this depression came on prior to the appellant being made redundant. However, his Honour found "it is appropriate that the applicant be awarded some amount to compensate him for the distress which the deprivation of moneys which should in fairness have been paid to him caused him".

111 His Honour held that the deprivation of these monies caused the appellant "some resultant distress", but that such deprivation had not "exacerbated or aggravated the applicant's then existing condition of depression either on a short or long term basis".

112 The factor his Honour considered favoured the appellant so as to warrant the monetary order for distress, was that the respondent was, or ought to have been, aware of the applicant's financial position and the concerns and distress created by his lack of funds. It was the failure of the respondent to afford the appellant the timely payment of fair termination benefits in these circumstances which made it just for the appellant to be awarded some compensation for the additional distress.

113 His Honour expressly recognised (at [111]) that some degree of stress and financial hardship is likely to be suffered by any employee upon any termination but because the appellant (if he had not been treated unfairly) would have been in an improved financial position and because "such an improvement is directly connected with the unfairness which I have found" compensation in the order of $15,000 was warranted.

114 Once it is recognised, as his Honour did, that "some degree of stress and financial hardship is likely to be meted out to any employee upon any termination" of employment, two considerations immediately follow when contemplating whether to award an amount pursuant to s 106(5) in this area and, if so, what amount is appropriate. First, unless a very careful approach is taken there is a tangible risk of double compensation. Second, the precise basis for the award must be specified to ensure that situation does not occur. 115 We have hesitated before concluding that his Honour's decision in this area was incorrect. Nevertheless, having regard to the limited basis upon which his Honour founded the award, we consider the amount assessed was excessive and should be reduced to $5,000. The cross appeal should thus also be upheld and orders made in substitution for those at first instance.

116 Because of the way the appeal and the cross appeal have been decided, and because of the substantial success of the appellant overall, we consider that the respondent should pay the costs of the proceedings on appeal.

117 We order that the appeal and cross appeal be upheld and that the respondent pay the costs of the appeal proceedings. The appellant shall, within 28 days, file short minutes as to the orders he proposes to give effect to these reasons. The respondent shall, within seven days thereafter, advise the Industrial Registrar in writing whether it consents to those draft orders or file short minutes setting out the alternative orders it proposes. The Court will make formal orders disposing of both appeals in due course.

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