Northern Land Council v Hansen [2000] NTCA 1

[3] In December 1992 the respondent employed the appellant as a Senior Policy Adviser. On 23 February 1993 the appellant terminated the respondent's employment with effect from 4 March 1993. The respondent was successful in an action for damages for wrongful dismissal and the appellant now appeals against the whole of the judgment.

[4]

At the time of the hearing before the learned Trial Judge there was little common ground. His Honour noted that the parties disputed the terms of the respondent's employment, the respondent's competence for his employment, the conduct and performance of the respondent whilst employed, the circumstances of his termination and whether the grounds given by the appellant for termination were justified. In addition the quantum and bases of the respondent's claimed loss were in dispute.

[5]

On 3 October 1992 the appellant placed an advertisement in a local newspaper advertising a vacancy for a Senior Policy Officer. The job description indicated that the successful applicant would report to the Director and be responsible for carrying out research, and preparing policy submissions along with other coordinating and public relations functions. The advertisement then went on to advise:

"This position provides for a three (3) year contract with a six (6) month probationary period, five (5) weeks annual leave, cumulative sick leave and district allowance."

[6]

The respondent saw the advertisement and obtained a copy of the duty statement relevant to the position. He then made application for the position by letter dated 12 October 1992.

[7]

The respondent was interviewed for the position by a panel of persons including the appellant's Director, Mr Dodson. On 2 December 1992, in a telephone call from Mr Dodson, he was informed that he was the successful applicant just ahead of another candidate. That other candidate was Mr Tony Haritos who continued to work with the appellant. In the course of that conversation the respondent asked Mr Dodson what was meant by "probation" and he was advised that:

"The NLC had written guidelines on probation advising supervisors as to how they were to assess the performance and conduct of the person involved, that he would - and these were guidelines to supervisors and that he would be my supervisor and that he expected that I would come through any tests with flying colours, given what he's been told by my referees."

[8]

Thereafter the appellant wrote to the respondent a letter dated 2 December 1992 confirming that he was to commence duty on 4 December 1992 and also confirming the period of his employment in the following terms:

"This letter is to advise that your contract of employment, which will extend for three years from the date of commencement (ie: 4 December 1992 to 3 December 1995), will be formalised on Mick's [Mr Dodson's] return which will be 16 December 1992."

[9]

A further letter was sent to the respondent by the appellant on 3 December 1992. This letter was signed by Mr Dodson and there was attached to it a document entitled "extract and acknowledgment of terms and conditions of employment". The letter included the following:

"I am pleased to offer you employment with the Northern Land Council. The attachment to this letter sets forth details of salary and specific benefits applicable to you.

Your appointment will be on the basis of an initial six (6) months probationary period, which if satisfactory, will continue as a contract for three calendar years, with effectiveness from the day you report for work at the Northern Land Council."

[10]

The attachment set out a summary of the requirements of the position, the salary range, the starting salary and some specific benefits. Against the heading 'Date of Contract' was written "4 December 1992 to 3 December 1995". There was, in that document, no reference to a period of probation.

[11]

The respondent commenced work on 4 December 1992, at which time he was handed Mr Dodson's letter of 3 December 1992 with the attachments. Both he and Mr Dodson signed the attachment on 16 December 1992 when Mr Dodson returned from overseas.

[12]

The written guidelines referred to in the telephone conversation of 2 December 1992 were in the following terms:

" PROBATION

Instruction and advice to Supervisors

All employees of the Northern Land Council are subject to probation from the date of commencement of their contract. Probation extends for a period of six months, with reports by the Supervisor to be completed at the end of the third and sixth months.

The purpose of the probation period is to make sure that the conduct and work performance of the employee meets the standard expected of employees of the Northern Land Council.

THE SUPERVISOR HAS RESPONSIBILITY FOR A PROBATIONER'S DAY TO DAY SUPERVISION, ON-THE-JOB TRAINING, THE COMPLETION OF PROBATIONARY REPORTS AND ASSOCIATED COUNSELLING. THE SUPERVISOR IS ALSO RESPONSIBLE TO ENSURE THAT A PROBATIONER HAS A SMOOTH ENTRANCE INTO THE WORKING ENVIRONMENT AND THAT THEY RECEIVE PROPER INDUCTION.

Supervisors should give regular feedback on performance during the probationary period to ensure that the employee knows how he or she is doing and has plenty of opportunity for improvement, if necessary. If problems are encountered, the probationer should be counselled and steps taken to resolve them. Written records of counselling interviews and outcomes should be kept.

The probationary period gives the Supervisor the opportunity to monitor the development of the employee, to assess their suitability for continued employment, and to offer any training or information necessary to do the job.

Completed probationary reports should be shown to the probationer, who should read, sign and date them, indicating that the contents of the report have been noted. Any weakness or adverse aspect of a probationer's work performance should be specifically noted and drawn to his/her attention. If there are adverse aspects of a probationer's work performance, the Director will be notified, and a letter prepared under his signature, to advise the probationer that unless his/her work performance improves, termination of employment may occur.

It is essential that probationers be given a full opportunity to state their case before any termination decision is taken.

Probation should be regarded as a true trial period to assess a person's suitability and whether he/she meets standards expected (including work performance and conduct). It should not be regarded as a routine period through which all new employees naturally progress.

It is important to identify an employee's strengths and weaknesses at an early stage so that appropriate development action can be taken during the probationary period. Such action should minimise the likelihood of poor work performance occurring after an employee has been confirmed or disciplinary action being necessary.

You should comment under each heading in as much detail as is possible. Comments such as "satisfactory" or "unsatisfactory" will not be sufficient.

Descriptive statements should be made and where possible examples cited to illustrate the point. In particular, if any aspect of a probationer's performance is unsatisfactory or marginal, sufficient detail should be noted to enable identification of specific instances of poor performance.

If a heading is not relevant to a probationer's performance, note this in the space provided and give the reason, eg 'Cannot say - not applicable'.

The list of headings is not meant to be exhaustive. If some aspects of conduct and performance which you regard as important are not covered, please comment under the heading 'other comments'.".

[13]

The employment of the respondent by the appellant was terminated as from 4 March 1993. It seems the termination followed Mr Dodson reaching a conclusion that the respondent was unsuitable for the position. Mr Dodson wrote a draft letter addressed to the respondent and handed it to him on 22 February 1993. At that time the respondent was given the opportunity to comment upon the matters raised in the letter. The letter was in the following terms:

" DRAFT

STRICTLY CONFIDENTIAL

February 22, 1993 LMF-777/DS01

Mr Peter Hansen

Dear Peter

All employees of the Land Council are engaged on the condition that they satisfactorily complete a six month probationary period. An assessment of all probationary employees is made at the end of the third and sixth month of their conditional employment. The probationary period is a true trial period to ensure that conduct and work performance is satisfactory. Employment can be terminated during the probationary period if the employee is considered to be unsuitable.

It is my unpleasant task to inform you that I will not be endorsing your continuing probation with the Land Council. This means your probationary appointment with the Land Council will cease immediately.

I wish to detail my reasons for reaching this decision. They are as follows:

I have been, and remain, disappointed with the performance of your duties as Senior Policy Adviser. It has, in my view, been unsatisfactory.

You will recall I have spoken to you on a number of occasions about your performance. I have warned you about the inappropriateness of your 'hardline' uncompromising, authoritarian and argumentative approach to staff and issues. This is not an approach which I will tolerate or foster in staff of the Northern Land Council.

I turn now to specific matters of concern to me which has led to my decision.

Firstly, I had cause to speak to you about your lack of judgement in speaking over the top of me during the course of a conference call to the Minister and particularly in introducing a topic not under discussion.

Secondly, during discussions with John Ah Kit in Katherine you informed us you had told a journalist, Gordon Feeney, about the outcome of the Jawoyn meeting: an action on your part not authorised by me or for that matter the Jawoyn or the Association.

Thirdly, I understand you were authorised by the Chairman to hand certain documents to the media at Dr Wooldridge's press conference and indeed to attend the press conference. You were not authorised by myself or the Chairman to speak with the media - you did so. Some of what you said to the media, in my view, exacerbated the situation.

Fourthly, and the action which I find the most ill-considered, is your faxing (without authority) of the Wooldridge letter to Minister Tickner and Warren Snowdon's office - not only was it done without authority but you stupidly wrote on the fax cover sheet 'you did not get this from us'. That shows an appalling lack of judgement for someone occupying a vital position with the Land Council. In relation to the Wooldridge matter I must say I was disappointed in the almost non-existent advice, given by you to me - it was left up to your subordinates - that's just not good enough.

Finally, I request you to vacate your office immediately. I will permit you reasonable time to clear up your office and make arrangements with personnel over your entitlements.

I regret that it has not worked out as we both would have liked however I must make decisions which I believe are in the overall interest of the organisation.

Yours sincerely,

Michael Dodson

DIRECTOR".

[14]

That letter was followed by letter dated 5 March 1993 from Mr Dodson to the respondent in which there was a reference to the entitlements of the respondent. The letter included the following:

"As you are aware from the discussions we have held, I have not endorsed your continuing probation, and as a consequence, your employment with the Northern Land Council has ceased with effect from close of business on Thursday 4 March, 1993.

The Senior Policy Adviser is an extremely important position in the professional Management of the Northern Land Council and my decision to cease your employment has not been easily made.

However, you are aware from our discussions on specific matters, that I have been deeply concerned about the inappropriateness of your approach to staff and issues, and in addition, I have been disappointed with your performance in the carriage of your duties as Senior Policy Adviser. In my view, this type of concern is not acceptable for such a senior employee.

I would be happy to elaborate on these matters if you wish me to. As you remember, we had a lengthy discussion about the details of my concerns before you left, and I showed you a draft letter outlining my concerns at that time.

I will provide a final version of this letter if requested. In addition, a copy of your probation report will also be furnished if you desire."

[15]

In the Court below there was substantial dispute as to the matters raised in the draft letter of 4 March 1993 and ultimately his Honour found that each of the individual grounds provided in that letter was "baseless". The appellant challenges that finding. However, as a preliminary submission it said that the respondent was employed on "probation" and the appellant retained the right during the period of probation to decide whether it wanted to employ the plaintiff. Provided the appellant determined in a bona fide manner that the respondent's employment performance during the probationary period was unsatisfactory, and that it did not wish to employ the respondent, it could terminate the employment without challenge.

[16]

Mr Buchanan QC, on behalf of the appellant, submitted that the test to be applied was not an objective test but rather that the satisfaction involved is the subjective satisfaction of the employer, and in particular its Director, Mr Dodson. Provided there was no lack of bona fides the standard to be applied was "an entirely subjective assessment to be made by the Council through its Director as to what its requirements were, every bit as much as at the original interview". This was said to follow from the nature of the position, which is a senior position, in a sensitive area, where the relationship between the respondent and the Director was one of confidence.

[17]

On the other hand it was the submission of the respondent that the test of satisfactory service was objective. Suitability was to be determined objectively and irrespective of Mr Dodson's subjective view. In support of this contention it was submitted that the "guidelines" were terms of the contract and imported into the contract the requirement of objective assessment.

[18]

It is therefore necessary to determine whether or not the guidelines formed any part of the contract of employment of the respondent.

[19]

It is clear that the terms of the guidelines were not expressly incorporated in writing into the contract. They were not referred to in the advertisement of 3 October 1992, nor in the duty statement (which did not mention probation at all), nor in the correspondence of 2 and 3 December 1992. The only reference to the guidelines was that which occurred in the telephone conversation between Mr Dodson and the respondent on 2 December 1992 (in the passage set out at par 7 above).

[20]

Mr Buchanan submitted that there was an oral agreement entered into on 2 December 1992 which was subject to being reduced to writing. The written expression of the oral agreement is to be found in the letter of 3 December 1992 and the attachment thereto. The execution of that contract took place on 16 December 1992 when Mr Dodson and the respondent signed it. The conversation did not incorporate the guidelines into the contract and the subsequent written confirmation did not do so either.

[21]

The learned Trial Judge observed that there were "two answers" to the appellant's submissions. The first was that the information conveyed in the telephone conversation explained the meaning of the expression "initial six (6) months probationary period, which if satisfactory, will continue as a contract for three calendar years ...". His Honour adopted the observation in Perrylease Ltd v Imecar A G (1988) 1 WLR 463 that where there is a written contract objective extrinsic evidence is admissible to explain the meaning of expressions used therein. Alternatively, he found, the conversation comprised part of the overall agreement, when one has regard to the whole of the circumstances.

[22]

To my mind it is sufficient to note that the conversation gave meaning to the expression "probation". In the very conversation that constituted the initial offer and acceptance the respondent sought clarification of what was meant by the term "probation" and the response was that which I have set out above. In the circumstances there can be little doubt that both the appellant and the respondent had in mind that content was to be given to that expression by reference to the written guidelines. That position did not alter between the date of that conversation and the final adoption of the written terms by both parties on 16 December 1992.

[23]

It was submitted on behalf of the appellant that the guidelines would only be helpful as a matter of construction or interpretation of the agreement if the meaning of the term "probation" was otherwise in doubt. Further it was contended that the guidelines merely established a procedure and did not qualify the normal meaning of the word "probation" which, it was said, required the application of a subjective standard.

[24]

We were referred to a number of cases as to the meaning of "probation" in an effort to demonstrate that the word had a usual and fixed meaning that called for a subjective assessment. We were referred to: Connolly v The Labor Daily Ltd [1925] NSWStRp 37; (1925) 42 WN (NSW) 109; Hogan v Tumut Shire Council (1954) 54 SR (NSW) 284; In re Alchin v South Newcastle Leagues Club Ltd (1977) AR 236; O'Rourke v Miller [1985] HCA 24; (1984-1985) 156 CLR 342; Director General of the Department of Corrective Services v Mitchelson (1992) 26 NSW LR 648; Ryan v Furneys Stock Feeds Limited (1996) 66 IR 298; Lang v Reid & Vasely (unreported decision of Sams DP of the Industrial Relations Commission of New South Wales, 11 October 1999).

[25]

In each of those cases the concept of probation was discussed. However the cases make it clear that the meaning to be given to the term was to be determined by reference to the intention of the parties looking at the whole of the agreement: Hogan v Tumut Shire Council (supra at 291); or by reference to the relevant statutory regime: O'Rourke v Miller (supra at 350 et seq). In Connolly v The Labor Daily Ltd (supra at 110) Street CJ observed that:

"The question is primarily one of intention. What did the parties mean by their agreement?"

[26]

In the present case, as his Honour found and as I have observed above, the parties gave expression to their intention by reference to the guidelines. It is therefore necessary to look to those guidelines to determine whether or not they assist in providing meaning to the word "probation".

[27]

The learned Trial Judge ruled that the terms of the respondent's probation established a system for assessing performance during the probationary period according to an objective standard expected of employees of the appellant. I agree. The purpose of the probation period is expressed in the guidelines as being to ensure "the conduct and work performance of the employee meets the standard expected of employees of the Northern Land Council". What is contemplated is an objective standard not the subjective view of the supervisor. The method of assessment is contained in the guidelines. If, as the appellant suggests, the appellant is able to terminate the employment of the respondent or any other employee based upon the subjective assessment made by a supervisor in a manner "every bit as much as at the original interview", there would be no need for much of what appears in the guidelines.

[28]

Whilst in many circumstances the placing of a prospective employee upon "probation" may operate so as to leave the employer in the position of having a right to decide whether or not it wishes to employ the employee - "the same right that any employer would have at an initial interview when deciding whether or not to engage an employee" - that is not so in the present case. In this respect the present case differs from the cases to which we were referred and which are set out in par 24 above.

[29]

Contrary to the submission of the appellant the guidelines go beyond simply specifying procedures which the appellant might as a matter of policy adopt for itself. They establish what was intended as to the nature and purpose of the period of probation.

[30]

It was the submission of the appellant that his Honour found in favour of the respondent on the basis that the appellant had breached the procedures set out in the guidelines. It was said that his findings were not based upon his earlier assessment of whether or not the reasons for dismissal detailed in the correspondence had been "objectively made out". That is so. His Honour referred in some detail to the failure of the appellant to comply with the probationary procedures and then went on to conclude:

"The plaintiff's dismissal in these circumstances was wrongful. There was no misconduct of the plaintiff such as to justify summary dismissal. Indeed the defendant did not put its case on that basis."

[31]

He then observed that it was unnecessary for him to consider whether the grounds given for the dismissal were made out or whether the plaintiff was dismissed for an ulterior purpose. However he did proceed to individually consider the grounds and he rejected each of them.

[32]

The position adopted by his Honour necessarily involved an acceptance that the procedural aspects of the guidelines had been incorporated into the contractual arrangements between the parties. For the reasons I have expressed above I agree with the conclusion of his Honour.

[33]

There was no dispute that the guidelines were not complied with and there was no challenge to the findings of his Honour made in that regard. It follows that the conclusion of his Honour that the plaintiff's dismissal was, in the circumstances wrongful, is correct.

[34]

In any event, as his Honour found, the reasons given for the plaintiff's dismissal were baseless. The draft letter contained four specific matters which were said to be of concern to Mr Dodson, along with the general observation that the respondent adopted an inappropriate attitude and approach to other staff employed by the appellant.

[35]

In relation to the suggestion that the respondent was "authoritarian" and "tough" on certain members of the staff it became clear that this related to two particular members of the staff of the appellant, being Tony Haritos and Neville Mitchell. According to the respondent those were the two people identified in discussions between Mr Dodson and himself. The evidence of Mr Dodson in this regard was imprecise. He could only recall that he had "sufficient expressions of concern" that he spoke with the respondent.

[36]

His Honour heard from Mr Haritos, a person passed over for the position of Senior Adviser, and whom he regarded as a person who was "jealous and resentful". His Honour found Mr Haritos to be "unreliable" and "untrustworthy". He did not accept the evidence of Mr Haritos. There was no challenge to this finding. No other member of staff was called to give evidence to support the very vague allegation of the plaintiff's authoritarianism. If that was the view of Mr Dodson it was a subjective view expressed in the most general of terms and without particulars or supporting evidence.

[37]

The first of the identified grounds for dissatisfaction centred upon the view expressed by Mr Dodson that there had been a "lack of judgment in speaking over the top of me during the course of a conference call to the Minister and particularly in introducing a topic not under discussion". There was, as Mr Buchanan submitted, a large area of controversy regarding the telephone conversation. His Honour accepted the version of events provided by the respondent over that of Mr Dodson. In particular he found that the respondent did not speak over the top of Mr Dodson and that finding is not challenged. There was no dispute that the respondent raised the issue of reductions in the budget in the context of discussions regarding other matters. That was at the very end of the discussions and was an appropriate topic for the respondent to raise. The respondent had negotiated with the Minister's staff regarding extra funding and it appeared that this funding may be lost or its benefit lost by reductions in other areas. It had earlier been suggested in a Management Policy Committee Meeting that the respondent should approach the Minister (a person to whom he was personally known) on the topic and the respondent thought this was an appropriate opportunity to do so. There had been no complaint by Mr Dodson or by the Minister in relation to this matter being raised, although it is clear that the Minister did not wish to discuss it. Mr Buchanan acknowledged that this was not a strong point for the appellant. I agree. The respondent took a reasonable step pursuant to authority previously provided.

[38]

The next ground spelled out in the letter was a complaint by Mr Dodson that the respondent had informed a journalist about the outcome of a meeting with the Jawoyn which was said to have been an action not authorised. His Honour held that the communication was consistent with the employment obligations of the respondent and his obligation was to be "pro-active" with the press. The respondent said that he had the permission of Mr Dodson to inform the media in relation to the matter. Mr Dodson could not remember that particular conversation but thought that the respondent had "jumped the gun". There was no complaint made to the respondent on that occasion in relation to his conduct.

[39]

It was the submission of the appellant that the circumstances should be viewed through the eyes of Mr Dodson and it was solely a matter for him whether the respondent's conduct was inappropriate. It was submitted that it was not a matter for objective assessment. For the reasons discussed earlier I am of the view that his Honour was correct in approaching the matter in the manner in which he did.

[40]

Neither Mr Dodson nor the representative of the Jawoyn (Mr Ah Kit) raised the issue with the respondent. It appears the first time it was mentioned was in the letter of 22 February 1993.

[41]

The third ground set out in the letter was that the respondent spoke at a media conference without authority and that some of the information he conveyed on that occasion exacerbated a situation in which the appellant found itself. Again his Honour rejected the allegation as being without foundation. He found as a fact that the Chairman of the appellant, Mr Yunupingu, had authorised the plaintiff to attend the press conference with the direction that he "fix the bloody thing". Mr Dodson learned of this direction at a later time. The respondent sought to 'fix' the matter by the comments he made at the media conference. Those comments were, to his knowledge, untruthful. He lied when acting as the spokesman for the appellant. It was submitted that, even adopting an objective standard, it could not be said to be appropriate to lie to the media.

[42]

It was not disputed that when Mr Dodson returned to the Northern Territory subsequent to the press conference he congratulated the respondent for his efforts in protecting the interests of the appellant by his conduct on this occasion. The effect of the conduct of Mr Dodson in congratulating the respondent, coupled with the later issue of a press release which substantially adopted and followed what the respondent had stated at the media conference, establishes that the concerns expressed in the letter of Mr Dodson were not concerns held at the relevant time.

[43]

The fourth and final identified concern of Mr Dodson related to a letter which the appellant sent to Dr Wooldridge, the Shadow Minister for Aboriginal Affairs. It seems that much of that letter was composed in the offices of Mr Snowdon, the Federal Member for the Northern Territory, and Mr Dodson was concerned to ensure that this information did not become generally known. A copy of the letter was sent by the respondent to Mr Snowdon and he did so with the endorsement "you did not get this from us". Mr Dodson characterised that action as "stupid" and indicating "an appalling lack of judgment".

[44]

The submissions of the appellant were that the sending of the letter involved three matters of concern. The first was that a copy was sent to Mr Snowdon without authority. The second was that the words set out above were written on the fax cover sheet. The third was the suggested lack of support that the respondent had provided in the preparation of the letter.

[45]

The letter which was the centrepiece of this complaint was in fact a letter that set out in some detail the position of the Northern Land Council in relation to certain issues. It was a letter that Mr Dodson stood by. There was no suggestion of any need for secrecy regarding the contents of the letter. Indeed Mr Dodson had himself contemplated sending the letter to Senator Tickner and Mr Snowdon. A conversation he had with the respondent was such as to leave the issue of whether a copy of the letter should be sent to those gentlemen open.

[46]

The submissions of the appellant focused upon the endorsement on the fax sheet which, it was said, may have come to the attention of others under freedom of information legislation and was therefore a very misguided attempt to distance the appellant from an accusation of political collusion. It was submitted that, even applying an objective test, this would cause concern.

[47]

His Honour held that it was "natural" for the plaintiff to send copies of the letter to Mr Snowdon and to the office of Federal Minister Senator Tickner. Mr Snowdon's office had assisted in the drafting of the document and there was a close relationship between Mr Dodson and Mr Snowdon and Senator Tickner. He held that the endorsement on the fax sheet was consistent with Mr Dodson's wish that the defendant be perceived as apolitical. I am unable to see that his Honour erred in reaching these conclusions.

[48]

As to the complaint that the respondent had not provided sufficient assistance to Mr Dodson in the formation of the letter, the evidence was that he, Mr Dodson, had agreed that this issue could be delegated to Mr Creswell, a research officer with the appellant, and that is what occurred with his approval.

[49]

As has been observed his Honour concluded that the given grounds for the plaintiff's dismissal were baseless. It was his view that there was an ex post facto reconstruction of events designed to justify the decision that Mr Dodson had taken to dismiss the respondent. I am unable to see that the learned Trial Judge was other than correct in his conclusion.

[50]

The appellant claims that his Honour erred in finding that the period of damages was the remainder of the three year period rather than the remainder of the period of probation. It is also said that his Honour erred in finding that the respondent acted reasonably in his efforts to mitigate his loss as he gave evidence that he did not seek employment at a wage equal to or near to that which he earned when employed by the appellant.

[51]

The appellant complained that the efforts made by the respondent to seek employment were not reasonable in that he restricted himself to employment of a kind he had enjoyed with Senator Geitzel (the Commonwealth Minister for Veteran's Affairs) rather than of a kind which had applied with the appellant. He was looking for employment at the level of senior executive service level one in the Australian Public Service with an income of around $110,000 per annum. The employment he had with the appellant had a commencing salary of $46,437. The explanation of the respondent for this was that he had lowered his horizons to work with the appellant because he thought the job was "so fundamentally worthwhile". He had last been employed at the higher level in 1987, some five years prior to his commencement with the appellant. During the intervening period he had been a self employed vigneron and a self employed financial and political consultant.

[52]

It is accepted by the appellant that a defendant bears the onus of showing that an otherwise successful plaintiff has failed to mitigate his loss: Watts v Rake [1960] HCA 58; (1960) 108 CLR 158 at 159; TCN Channel Nine Pty Ltd v Hayden Enterprises Pty Ltd (1989) 16 NSW LR 130 at 158; Scott v The Commonwealth (1982) 41 ALR 498. However it was submitted that a plaintiff is not entitled to stand by and make no reasonable effort to mitigate his loss: Harding v Harding [1928] NSWStRp 103; (1928) 29 SR (NSW) 96 at 105-7. In that case Campbell J said at 106:

"I recognise that generally the onus is on the defendant to show that the dismissed servant might have obtained equivalent or at least suitable employment within the period of notice, but where the dismissed servant himself proves that he sat by for the full period of the omitted notice and occupied himself unremuneratively on some concern of his own, without making any enquiry or effort about other employment, and the evidence supplies no reason for thinking that such employment could not be obtained, or that it would be even difficult to obtain, and the jury, after proper direction, then gives full wages for the full period of the required notice, I think the verdict would be open to the inference that the jury must either have misapprehended their duty or have acted on a wrong principle."

[53]

It was not disputed that a plaintiff must adopt a reasonable course of conduct in order to mitigate his loss: Yetton v Eastwoods Froy Ltd (1967) 1 WLR 104. In that case Blain J said at 115:

"But, of course, if a plaintiff in fact, in the case of contract of service earns something elsewhere through being at liberty so to do, then he has lost that much less as the consequence of the default. And if he can minimise his loss by a reasonable course of conduct, he should do so, though the onus is on the defaulting defendant to show that it could have been done and is not being and has not been done.

Thus, the opportunity to reduce damages by finding reasonable (I repeat reasonable) alternative employment should be taken and, indeed, sought, whether such employment is by the same defaulting employer or by someone else."

It was submitted that the efforts of the respondent in this case at obtaining employment were efforts "in the wrong direction and at the wrong level" and he failed altogether to mitigate his loss.

[54]

The appellant submitted that it had discharged its onus by securing, through cross-examination of the respondent, an unequivocal concession that the respondent had not made any attempt to seek employment at or about the same salary as he had lost. It was said that in those circumstances the respondent did not make any reasonable effort to mitigate his loss and he should not have been awarded any damages or the damages should have been nominal.

[55]

In this case there was evidence that the respondent had made efforts to mitigate his loss. Whilst it is true that he gave evidence of having sought employment at a higher level than that which prevailed with the appellant and he indicated that he was "interested in jobs in the region of $110,000 per annum", there was no suggestion in his evidence that his wide ranging enquiries identified any employment prospects at any level for him. The appellant did not establish at the time of the hearing that such jobs were available or that any such job was rejected by the respondent. All that was established was that his interest was at a higher level of employment but if he had been offered something "slightly lower" he would have taken it.

[56]

The learned Trial Judge noted that the nature of the employment history of the respondent and the circumstances of his dismissal by the appellant were such as to narrow his opportunities for employment. There was evidence that he made extensive inquiries as to available employment and that he let it be known to a wide range of people that he was looking for employment. There was no evidence that he acted unreasonably by failing to consider any particular employment opportunity. There was no evidence of any employment opportunities for him at the level he enjoyed with the appellant. The suggestion that the respondent failed to mitigate his loss is not made out.

[57]

It was submitted by the appellant that damages should be limited to a maximum of three months salary on the basis that it should be assumed that the appellant would have terminated the employment of the respondent just so soon as it was possible for it to do so in accordance with the guidelines. This does not follow. On the basis of the findings made by his Honour it would seem the problem with the continued employment of the respondent centered upon his relationship with Mr Dodson. The evidence was that Mr Dodson was about to leave the employ of the appellant and the respondent would therefore thereafter be working with a different director. Accepting that an objective assessment of the work of the respondent led to a conclusion that the work was being performed satisfactorily by him, there would be no basis for assuming that the employment of the respondent would come to an end in the absence of Mr Dodson. If, as his Honour found, an objective test applied and if the performance of the respondent was satisfactory, based upon an objective assessment, then there would be no basis for the appellant seeking to terminate the employment of the respondent.

[58]

The period of the contract was expressed in the attachment to the letter of 3 December 1992 as being "4 December 1992 to 3 December 1995". It is clear that it was a three year contract subject to a probationary period of six months: see also the letter of 3 December 1992, referred to in par 9 above, where it is said that the appointment will be

"... on the basis of an initial six (6) months probationary period, which if satisfactory, will continue as a contract for three calendar years, with effectiveness from the day you report to work at the Northern Land Council.".

This is obviously different from the kind of probationary employment where the employee had to establish his fitness for permanent employment at the end of the probationary period: c.f. In re Alchin and NSW Leagues Club Ltd (1977) AR 236, relied upon by the appellant. The language employed in this case suggests that the appellant had a right to terminate the employment at the end of the probationary period if the employee was unsatisfactory, but that otherwise the contract was one for three years. This was the approach of Angel J, with which I respectfully agree.

[59]

In The Commonwealth of Australia v Amann Aviation Pty Ltd [1991] HCA 54; (1991) 174 CLR 64 Mason CJ and Dawson J said (93):

"Where compensation is sought in respect of the deprivation of a possible benefit which is dependant upon the unrestricted volition of another it may be impossible to say that any assessable loss results from the breach. However, this statement must be understood in the light of the principle that the mere existence of a contractual right in a party to terminate does not operate automatically to restrict the damages that can be awarded. The Court does not reach a conclusion by reference to an improbable factual hypothesis. The Court must have regard to the facts and evaluate the possible exercise of the right in all the relevant circumstances of the case."

[60]

Applying that approach in the present matter the overwhelming likelihood is that the appellant would not have proceeded to exercise any right it may have had to terminate the employment of the respondent once Mr Dodson had left its employ.

[61]

I would dismiss the appeal with costs.