Reich v Client Server Professionals of Australia Pty Ltd

7. The termination of the contract by the Respondent was effected: (a) without notice,

(b) in a manner that denied the Applicant adequate compensation in the form of payment in lieu of notice on the termination of employment,

(c) in a manner that denied the Applicant procedural fairness,

(d) in a manner that denied the Applicant an opportunity to seek legal advice,

(e) in a manner where the Respondent advised the Applicant that the termination had occurred and "There is no negotiation",

(f) through the exercise by the Respondent of a dominant negotiating position. 8. The Contract failed to protect the Applicant against a termination of contract that was harsh, unfair and unconscionable, and against the public interest, and the Contract failed to provide for the payment of adequate compensation to the Applicant upon the termination of the contract.

9. At all relevant times, the Respondent was in the dominant bargaining and negotiating position with respect to the Applicant. The Respondent used the said dominant bargaining position for its benefit and to the detriment of the Applicant.

10. The Respondent used that dominant bargaining position to offer the Applicant a new contract of employment to commence on 1 September 1998 with a different and significantly lower remuneration package including a lower base salary and a significantly lower commission payment being a capped amount and the removal of certain benefits relating to the total motor vehicle package which under the contract included the provision and maintenance of a motor vehicle. The Applicant was unable to accept the new contract of employment because of the reductions of payment and benefits in the proposed new contract when compared with the Contract under which he was employed prior to the termination.

11. Such other grounds and reasons as may seem just to the Commission. 7 On appeal, the appellant primarily sought orders varying the contract of employment between the parties in the same way as he had sought below and with a monetary order representing 12 months' salary in the amount of his total salary package of $250,000 plus interest and costs. In the alternative, an order was sought for the application to be remitted to another judge for rehearing; it was this alternative order, for reasons which will later appear, that became the actual relief claimed on appeal. The orders so sought were supported by the following grounds : 1. In determining the claim by the appellant, his Honour erred in finding that the repudiation of a contract of employment by one party cannot be properly categorised as a termination of employment where the other party accepts the repudiation by withdrawing from the contract. In so doing his Honour failed to properly apply the Full Bench decision of Allison v Bega Valley Council , 63 IR 68. Had his Honour properly applied Allison , he should have found that the employment of the Appellant was brought to an end by the actions of the Respondent.

2. In determining the claim by the appellant, his Honour erred by failing to properly apply the Full Bench decision of Dun & Bradstreet (Australia) Pty Limited v Glenda Louise Robbie (unreported 20 July 1999). Had his Honour properly applied Dun's case, he should have found the claim was amenable to relief under s 106.

3. His Honour erred in holding that decisions such as Bass v Truda are now relevant to the exercise of the Commission's jurisdiction under section 106 of the Act.

4. In determining the claim by the Appellant, his Honour made a finding of fact that the conduct of the respondent was unfair. Having made such a finding his Honour should have found that the claim was amenable to relief under s 106.

5. His Honour erred in effectively holding that the application did not come within the Commission's jurisdiction under section 106 of the Act. 8 We interpose to note two matters which occurred during the hearing of the appeal after it commenced on 18 February 2000 and was adjourned to 17 March 2000. First, on 28 February 2000 an administrator was appointed to the respondent; consistent with s 450E of the Corporations Law, we have amended the title of these proceedings accordingly to appropriately reflect the administrator's appointment. Second, and perhaps in consequence thereof, the appellant filed a notice of motion to join Klaus Petrat and David Jones, directors and shareholders of the respondent who gave evidence in the proceedings before Maidment J, as additional respondents to the appeal. As it happened, on 16 March 2000 Austin J in the Supreme Court, on the application of the appellant, made an order granting leave to him to continue these proceedings for the purpose of concluding the hearing of the notice of motion, hearing the respondent's appeal submissions and for the taking of judgment on appeal. At the resumed hearing before us on 17 March 2000, we dismissed the motion and reserved the question of costs. The hearing so proceeded. 9 Counsel for each party, Mr J V Murphy for the appellant and Mr J J E Fernon with Mr A B Gotting for the respondent, extensively addressed the issues and supplemented their oral submissions with comprehensive written outlines filed respectively on 14 January, 4 and 19 April 2000. We are grateful for the assistance provided. However, having in mind our view as to how this appeal should be resolved, we find it unnecessary to refer here in any great detail to what counsel put even though we have had it carefully in mind during our deliberations. 10 Suffice it to indicate that Mr Murphy submitted, in a close analysis of the cases, that Maidment J committed appellable error by refusing to follow binding precedent; in the result, it was said his Honour wrongly dismissed the appellant's claim even though he found the respondent's conduct in unilaterally reducing the appellant's remuneration to be unfair as not only a breach of a term of the contract of employment but also as a repudiation of the contract itself. The appropriate course in light of the non-joinder to the appeal proceedings of Mr Petrat and Mr Jones, Mr Murphy submitted, and despite his earlier primary submission for the matter to be fully finalised on appeal, was for the appeal to be upheld and the matter remitted to a single judge for the purpose of making appropriate orders. However, because the respondent on appeal conceded that the finding by his Honour as to unfair conduct was open on the evidence then that finding should not be further considered on any rehearing. 11 For his part, Mr Fernon supported the decision by Maidment J and submitted : … it is difficult to imagine a circumstance where that ground alone, that is, a breach of contract alone, would demonstrate that a contract was unfair. It is difficult to imagine a circumstance where a breach of a term will demonstrate the term to be unfair. Rather it is the fact that a contract allows or provides for conduct or does not prevent conduct that demonstrates unfairness. In other words unfairness in a contract is demonstrated by unfair conduct that is consistent with the contract.

It is submitted that if the Full Bench of the Commission is against the submission of the respondent then these proceedings should be referred back to the trial judge to make findings of fact of the surrounding circumstances so that the question of fairness may then be considered. 12 The salient facts in this matter and the way in which they developed were not in dispute and may be shortly stated. In or about mid-1995, the appellant, who was then a citizen of the United States of America, was recruited by the respondent to join its Australian operations; he so commenced as National Sales Manager on 20 October 1995 and was remunerated by way of base salary and commission on sales. The respondent's business in the immediately succeeding years expanded considerably so that by mid-1998 the appellant's total remuneration was about $250,000 per annum, although in November 1997 his role was changed to that of NSW Sales Manager. However, by mid-1998 it became apparent to the respondent, as it advised the appellant in a letter to him dated 18 August 1998 from the Managing Director, Mr Petrat, that "economic realities" required the restructuring of his "current remuneration package to base of 55K plus commissions of 75K per annum on quota targets to a package of 130K". No doubt recognising that the proposal involved a reduction in the total remuneration of approximately $120,000 (from $250,000 to $130,000) per annum, the respondent expressed "regret having to take these measures" and invited the appellant to discuss its decision at a meeting on 24 August 1998 when the respondent "would be looking to implement this adjustment ASAP following discussions on this matter". In the result, Mr Petrat communicated the following advice to the appellant on 25 August 1998 : Tom, sorry for not having done the figures, but the target will amount to 130K per annum given the results of the past 6 month. As I said to you, CSP is suffering by not being able to meet re-payments etc. We have had a good look at all aspects of the company. Your new pay packet is fair, just and in-line with Peter and Craig. If you wish to keep the car, we offer a car allowance that allows you to pay off the car. This would be deducted from the 130K on target. There is no negotiation. It is fair and just. Klaus Petrat. (emphasis added) 13 At a meeting between the appellant and Mr Petrat on 1 September 1998, the respondent confirmed its proposal and the appellant provided written advice that he did not accept the respondent's "decision to unilaterally reduce my remuneration" and that he would "remain on my current remuneration package as detailed". On 7 September 1998, Mr Petrat again confirmed in writing the respondent's proposal to take effect from 1 September 1998. On 8 September 1998, the solicitors for the appellant wrote to the respondent seeking the payment to him of "appropriate payment in lieu of notice" as the respondent had "terminated our client's employment on 31 August 1998." Although the appellant continued to attend work up until 10 September 1998, the day on which he was first paid in accordance with the revised package, he thereupon left the workplace and has not since returned. The summons initiating his claim under s 106 was filed on 17 September 1998. The respondent then claimed, and has since maintained the view, that the appellant abandoned his employment. 14 Maidment J found no relevant unfairness in the contract of employment and dismissed the application. In reviewing his Honour's decision, it is necessary first to specify the statutory scheme pursuant to which the appellant brought his unfair contract claim. The provisions of Pt 9 of Ch 2 of the Industrial Relations Act relevant in that respect are ss 105 and 106 in the following terms : 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.

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. 15 A "contract" is relevantly defined in s 105 of the statute as meaning "any contract or arrangement, or any related condition or collateral arrangement … "; and an "unfair contract" is defined as one "that is unfair, harsh or unconscionable, or that is against the public interest". It will be immediately apparent that the type of transaction caught by the section is not limited to a "contract" (or agreement) in the strict common law sense of being legally enforceable where a contractual relationship has been established; it extends to cover an "arrangement" and further extends to cover "any related condition or collateral arrangement". The resultant scope of the section as to transactions comprehended within it was referred to by Sheldon J in Davies v General Transport Development Pty Ltd [1967] AR (NSW) 371 at 373, since referred to with approval in very many cases and which needs no elaboration here. 16 However, the judgment under appeal proceeded on the basis, notwithstanding the submissions put at first instance by the appellant, that the claim was limited to the contract of employment in the strict contractual sense and so as not to comprehend aspects of the employment relationship. And, so it transpired, the view taken by his Honour of the "conduct" of the respondent in repudiating the employment contract, consistent with the submissions below of the respondent, was viewed in the narrow contractual sense, as his Honour found, to be irrelevant for the purpose of available relief under s 106. That approach, we may immediately say, was an error in the construction of the statutory provisions and, we would add, contrary to settled authority. Indeed, having in mind the definition of "contract" in s 105, it is only proper to view the use of that word in the appellant's originating summons as comprehending the full meaning of the word as defined in the statute. The result is that it must be seen to refer not only to the contract of employment but also to employment arrangements or any related conditions or collateral arrangements thereto, that is, as we would understand it, the overall employment relationship. 17 The extension of the section to cover an "arrangement" and the consequent effect on transactions within its scope have been referred to on many occasions in the cases, as illustrated by what was said by a Full Court (Hill, Maidment and Peterson JJ) of the former Industrial Court in Legal & General Assurance Society Limited v Stock [1993] 49 IR 464. It is instructive to recall what their Honours there observed (49 IR at pp 480-481) : The authorities make clear that the term "arrangement" where used in the section is a wide one and encompasses transactions or plans which are not legally enforceable agreements. The following principles may be drawn from decided cases in the matter in relation to the ambit and reach of the term "arrangement" where used in the section ( Unconscionable Contracts and Economic Duress - Peter M Hall, at 55-56). "(1) The word 'arrangement' in its ordinary meaning and particular statutory context is a word of much wider import than the word 'contract'.

(2) An 'arrangement' will be found to exist where there is a bilateral or multilateral plan or concerted action to bring about a particular result.

(3) An 'arrangement' may envisage a transaction in the nature of a bargain which may not be legally binding or enforceable, something in the nature of an understanding between two or more persons.

(4) The section speaks of an arrangement of a particular kind, namely, an arrangement whereby a person performs work in an industry, that is, a transaction which directly leads to the performance of work in an industry.

(5) The term 'arrangement' possessing a broad and extensive meaning may be found disclosed in a document comprising or specifying its terms, or there may be no document specifying the arrangement in which event resort will be had to oral evidence of discussions whilst in other cases an arrangement may be implied or inferred from the circumstances or the conduct of the parties. An arrangement may be discovered in a combination of documentary or verbal communications and the conduct of the parties. The relationship between the parties may itself manifest an arrangement.

(6) There may exist two separate contracts each forming part of a specific arrangement and together constituting the means by which it is effectuated so as to produce particular results and whereby a person performs work in an industry.

(7) The section accordingly comprehends not only the initial plans but all transactions by which the arrangement is carried into effect. It applies to any dealing the purpose or the effect of which is to achieve a situation as a consequence of which or wholly or partly in fulfilment of which a person performs work in an industry.

(8) The term 'arrangement' embraces a situation where there exists two or more separate contracts which, notwithstanding their separateness, are, in a particular factual context, so sufficiently associated with each other in a practical sense as together to constitute an arrangement of which each contract is a constituent part.

(9) The arrangement, including the relationship leading to the performance of work and another contract, need not necessarily have sprung into existence at the same time." (See Custom Credit Corporation Ltd v Goldsmith [1976] AR (NSW) 98 at 131; Hall v Alison Clint Floral Delivery Pty Ltd [1971] AR (NSW) 56; Re Mestrom and Alison Clint Floral Delivery Pty Ltd (No 2) [1971] AR (NSW) 216; Cosgrove v International Opal Pty Ltd [1977] AR (NSW) 751; Barham v Stevenson [1975] 1 NSWLR 31 and Smith v Craig Mostyn & Co Pty Ltd [1984] 2 NSWLR 393; 8 IR 344.) 18 We are well satisfied that the word "arrangement", including if necessary the extended words in the definition as covering "any related condition or collateral arrangement", is sufficiently wide to encompass aspects of the employment relationship which are said to offend the concept of fairness, including as alleged here the conduct of the respondent in repudiating the contract of employment. In Day v Lumley Life Ltd (1999) 90 IR 70, Hungerford J had occasion to consider in a s 106 case the conduct of the respondent employer in making unilateral decisions affecting the reasonable employment expectations of an employee. In finding (90 IR at p 72) that "the very nature of the employment relationship (contract) impliedly requires an employer in so doing to act with propriety according to the particular circumstances existing", his Honour held that "Section 106 not only recognises that but reinforces it by enabling an aggrieved employee to obtain relief to remedy any unfairness". Those findings were based on the following proposition as to the employment relationship stated by his Honour (90 IR at p 71) : The employment relationship, I have to say, is a serious relationship with important incidents for both parties to it. It is a consensual relationship based on contract and with respective rights and obligations. It should not, I think, operate, or to be so seen, in practice in a way which permits one party, here the employer, to act in a one-sided manner contrary to the legitimate expectations and understandings of the other party, here the employee, and particularly where such action damages or detrimentally affects the career interests of the employee. Employees have a corresponding duty to act with fidelity and good faith.

Those comments were expressly cited with approval by a Full Bench ( Wright J, President, Walton J, Vice-President and Hungerford J) of the Court in Beahan v Bush Boake Allen Australia Ltd (1999) 47 NSWLR 648; (1999) 93 IR 1 at 14-15 and by the majority ( Wright J, President and Hungerford J) of a Full Bench in Hollingsworth v Commissioner of Police (No 2) (1999) 47 NSWLR 151; (1999) 88 IR 282 at 318-319. 19 Given the definitions of "contract" and "unfair contract" in s 105, the power exercisable by the Court under s 106 is to "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": sub-s (1). The impugned transaction (contract or arrangement, or any related condition or collateral arrangement) may be found to be unfair "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": sub-s (2). A declaration of avoidance or an order of variation may be made "either from the commencement of the contract or from some other time": sub-s (3). Where an order is made under the section, a further order may be made "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": sub-s (5). 20 The two aspects we have earlier identified arising in this appeal were, as it happens, raised in substantially the same terms in McNaught v Micador Australia Pty Ltd (1996) 83 IR 111, being an action under s 275 of the Industrial Relations Act 1991 as the former comparable provision of s 106 of the present statute. The case was before Hungerford J who heard the so-called jurisdictional issues as preliminary points; those issues were defined in this way (83 IR at p 111) : The issue contested here was whether an admitted contract or arrangement under which work was performed in an industry was otherwise beyond the Court's jurisdiction (or power) to grant relief under s 275 in two situations, that is :

(i) where the respondent did no more than exercise its rights under the contract or arrangement so that at best the applicant's claim was for damages at common law for breach of contract and not under s 275 because there could be no relevant unfairness of the contract or arrangement itself; and

(ii) where the behaviour or conduct of the respondent was alleged by the applicant to be the ground that the contract or arrangement was unfair because that did not constitute under s 275 a relevant ground for challenging the contract or arrangement itself. 21 Hungerford J reviewed the relevant authorities up to the time of judgment, namely 23 August 1996, and concluded against the propositions advanced by the then employer respondent so as to find the claim was within power under s 275. His Honour's review, if transposed to a consideration of the two issues arising in the present case as identified earlier in this judgment, would result in each question as posed being answered in the positive. His Honour said (83 IR at pp 115-118) : The cases supporting [the respondent's] propositions, including that they are "jurisdictional" in nature, together with my view of their ratio decidendi , are as follows : (1) In a case which in truth and substance is nothing more or less than an action for damages for breach of contract it may be that there is no jurisdiction under the section, or alternatively that, as a matter of discretion, jurisdiction should not be exercised: Australian Entre Business Centres Pty Ltd v Smith [1989] AR (NSW) 196 at 232; [1989] 29 IR 172 at 183 (Commission in Court Session - Fisher P, Hill and Maidment JJ). (2) The section does not provide a remedy for mere breach of contract; such breach may found an action in an appropriate jurisdiction but it does not attract the jurisdiction under the section: Famonselle Pty Ltd v Nairne [1989] AR (NSW) 766 at 769, 772; [1989] 32 IR 382 at 384-385, 388 (per Maidment J). (3) The existence of a term, implied by common law, which requires reasonable notice of termination to be given is not offensive against the section; a breach of that term does not render the contract unfair: per Maidment J in Bass v Truda [1990] 38 IR 172 at 173 and in Colaco v Soul Pattinson (Manufacturing) Pty Ltd [1990] 38 IR 174 at 178. (4) A breach of a contractual term cannot render the contract unfair either as formed or performed: Colaco (38 IR at p 178). (5) The section was not intended to remove from the common law jurisdiction the remedy of damages for repudiation of a contract or to provide an alternative to such jurisdiction; the determination of what is reasonable notice is a matter for the court ascertaining damages for breach and not for determination under the section as being outside its jurisdiction: Chowdhury v Glopec Pty Ltd [1991] 39 IR 448 at 453 (per Cullen J). (6) Where a contract of employment was acceptable to the parties and not unfair in its terms, the fact its manner of termination was allegedly unfair, by wrongful or unfair dismissal, did not result in the contract becoming unfair within the meaning of the section: Hussmann Australia Pty Ltd v Walker (1993) 31 NSWLR 189 at 208-209, 214-215; [1993] 48 IR 396 at 413-414, 419-420 (Full Industrial Court - Maidment and Peterson JJ, Hill J contra ).

In Walker v. Hussmann Australia Pty Ltd (1991) 24 NSWLR 451 at 471-474; [1991] 38 IR 180 at 198-200 in an interlocutory judgment on jurisdiction and in the final judgment ( Walker v Hussmann Australia Pty Ltd [1992] 44 IR 404) I considered the present issues at some length and concluded in a way contrary to [the respondent's] submissions. Comparable cases against [the respondent] developed the following propositions : (1) The mere fact that an action may also lie in the ordinary courts in respect of the actions which constitute or give rise to the unfairness does not in itself provide an answer to the question of whether or not an action lies under the section although it may go to the exercise of discretion: Hussmann (31 NSWLR at p 203; 48 IR at p 408) (per Hill J, Maidment and Peterson JJ contra ). (2) The fact that the terms of a particular contract or arrangement permit an unfair, harsh and/or unconscionable dealing by one party with the other party thereto can lead to the conclusion that the contract or arrangement is unfair, harsh and/or unconscionable within the section: Hussmann (31 NSWLR at p 203; 48 IR at p 408) (per Hill J, Maidment and Peterson JJ contra ). (3) Although a contract was not unfair, harsh or unconscionable or against the public interest at the time of its making, subsequent events have made it so: Minister for Youth and Community Services v Health and Research Employees' Association of Australia, NSW Branch (1987) 10 NSWLR 543 at 560; [1987] 22 IR 59 at 76 (per McHugh JA). (4) Unfairness under the section may arise either from the terms of the contract itself, the surrounding circumstances and/or from the manner of performance or operation of the contract: Barry v. Incitec Ltd [1991] 45 IR 143 at 146 (per Hill J); Incitec Ltd v Industrial Court of New South Wales [1992] 45 IR 155 at 157 ( Gleeson CJ, Kirby P, and Priestley JA). (5) In determining whether "unfairness" in the contract or arrangement has been established, regard may be had not merely to the terms of the contract or arrangement, as originally negotiated, but also to the manner in which the contract or arrangement has ultimately worked out and operates as between the parties to it: Walker v Industrial Court of New South Wales [1994] 53 IR 121 at 133-134, 140, 149 (per Kirby P, semble , Meagher and Sheller JJ A). (6) The existence of other remedies (such as statutory claims for redundancy payments, statutory claims for reinstatement for wrongful dismissal, or a common law claim for unjust dismissal) do not control or limit the very large language of the section: Walker v Industrial Court (53 IR at pp 134-135) (per Kirby P). (7) In considering "fairness", the determination is according to the common sense approach of a juryman by applying standards which appear to provide a proper balance or division of advantage and disadvantage between the parties who have made the contract or arrangement; in doing so, the conduct of the parties, their capability to appreciate the bargain they had made and their comparative bargaining positions when entering into the contract or arrangement will always have to be borne in mind: Davies v General Transport Development Pty Ltd [1967] AR (NSW) 371 at 373-374 (per Sheldon J); and A & M Thompson Pty Ltd v Total Australia Ltd [1980] 2 NSWLR 1 at 13 ( Perrignon and Dey JJ, Cahill J dissenting). (8) How a contract may operate in practice necessarily means looking at the conduct of the parties to enable a conclusion that a contract which could so operate was unfair: Baker v. National Distribution Services Ltd [1993] 50 IR 254 at 270, 272 ( Fisher CJ and Hungerford J, Hill J dissenting but not on this point); and Rothmans Distribution Services Ltd v Full Court of the Industrial Court of New South Wales [1994] 53 IR 157 at 160 ( Kirby P, Priestley and Meagher JJ A). (9) The necessary jurisdictional requirement to hear and determine a matter under the section exists once it be established that there is a contract or arrangement or any related condition or collateral arrangement under which a person performs work in any industry: Stevenson v. Barham (1977) 136 CLR 190 at 201-202 (per Mason and Jacobs JJ, Barwick CJ agreeing); Caltex Oil (Australia) Pty. Ltd v Feenan [1981] 1 NSWLR 169 at 171, 173-174 (Privy Council - per Lord Diplock ); Minister for Youth and Community Services (10 NSWLR at p 558; 22 IR at p 74) (per McHugh JA); Visalli v Southwell (1988) 12 NSWLR 502 at 507 (per Kirby P); Production Spray Painting & Panel Beating Pty Ltd v. Newnham (1991) 27 NSWLR 644 at 646, 650, 652-655; [1991] 37 IR 46 at 47, 51, 52-56 ( Mahoney , Priestley and Handley JJ A); Majik Markets Pty Ltd v Brake & Service Centre Drummoyne Pty. Ltd (1991) 28 NSWLR 443 at 447, 458, 464-465; [1991] 39 IR 169 at 171, 182, 188-189 ( Kirby P, Mahoney and Handley JJ A); and Port Macquarie Golf Club Ltd v Stead (1995) 64 IR 53 at 59 ( Fisher CJ, Hungerford and Cullen JJ).

As I have reviewed the above authorities, I am unable to conclude other than that [the respondent's] propositions are not made out; in my view, the whole thrust of the authorities, which I find to be binding on me, are to the contrary and only supportive of [the applicant's] case.

22 The decision in McNaught v Micador was cited by the Full Bench in Beahan v Bush Boake Allen (93 IR at p 13) as one of the cases selected to show the line of authority from 1965 to 1999 as supporting coverage of the unfair contracts provisions under the successive industrial statutes in relation to contracts of employment declared void or varied thereunder where termination of employment had occurred. Having reviewed such authorities, and in light of the more recent consideration by the Full Bench in Beahan v Bush Boake Allen, we agree with the way in which Hungerford J reviewed the cases in McNaught v Micador and with the conclusions reached by his Honour. 23 The nature and scope of s 106 was extensively re-examined in Beahan v Bush Boake Allen in the decision of the Full Bench published on 17 December 1999. The 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. The Full Bench found that it did. It is instructive in that respect to refer to what was there said in relating the conduct of a party, the respondent employer, to relevant unfairness in the contractual relationship (contractual unfairness) in Beahan v Bush Boake Allen (93 IR at pp 32-33) as follows : The ability of the unfair contracts provisions to operate at the time of termination of an employment contract on the dismissal of an employee but by reference to the contract itself was the subject of two decisions by the Court of Appeal in April 1994 in Walker v Industrial Court of New South Wales [1994] 53 IR 121 and Rothmans Distribution Services Limited v Full Court of the Industrial Court of New South Wales [1994] 53 IR 157. In affirming the earlier approach stated in Incitec v Industrial Court , as referred to above, Kirby P said as to the meaning of s 88F (53 IR at p 133) - "Whatever doubts may have existed earlier, it is now beyond argument that the 'unfairness' referred to in s.88F(1)(b)IAA can arise, not only from positive provisions of the contract or arrangement which offend fairness in the relevant sense, but also from the failure, on the part of the contract or arrangement, to provide in a way that such fairness requires." In determining whether "unfairness" had been established, his Honour commented that "regard may be had not merely to the terms of the contract or arrangement, as originally negotiated, but also to the manner in which the contract or arrangement has ultimately worked out and operates as between the parties to it". As to the operation of s 88F where alternative remedies may be available, Kirby P said (53 IR at pp 134-135) :

"The existence of other remedies (such as statutory claims for redundancy payments, statutory claims for reinstatement for wrongful dismissal, or a common law claim for unjust dismissal) do not control or limit the very large language of s 88F(1).

It is by no means unusual in our legal system for the one set of circumstances to give rise to a number of remedies which the person affected may pursue, sometimes in the one court, sometimes in differing courts, to the full extent of that person's entitlement. … The ingredients of the various entitlements may be different. But the existence of alternatives has never excluded a person from pursuing rights expressly conferred by statute. Unless those rights are expressly, or by necessary implication, excluded by the alternative claim, or controlled an obligation to elect or by time limits, the beneficiary of the statutory right can pursue any, or all, or no entitlements."

In Walker v. Industrial Court , Meagher JA agreed with Sheller JA who commented (53 IR at p 149) "that the contract of employment permitted termination which, in the circumstances, was unfair and discriminatory. By so permitting the contract was or became unfair". It will be seen that Sheller JA, like Kirby P, focused on what the contract itself permitted by its terms.

In Rothmans Distribution Services v Industrial Court , the Court of Appeal was concerned with relief which had been allowed under s 275 of the 1991 Act in relation to an employment contract found to be unfair on its termination as to redundancy payments. Priestley JA, with whom Kirby P and Meagher JA agreed, said (53 IR at p 160) : "As to the point that the Full Court, in considering fairness, looked at conduct rather than the terms of the contract, I think that what the Full Court did was to consider how the terms of the contract operated in practice at the time of termination (which necessarily means looking at the conduct of Rothmans) and to conclude that a contract which could so operate was unfair. I see no jurisdictional error in this."

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). 24 In other words, it seems to us, in finding a contract (contract or arrangement, or any related condition or collateral arrangement) to be unfair, that may be supported because it became an unfair contract due to the conduct of a party at the time of the termination of the contract which enabled a finding that a contract which could or did so operate was relevantly unfair. It would then be open to declare the contract void or to make an order varying its terms in an appropriate way, with as to either form of relief a consequential order for the payment of money considered to be just in the circumstances. We have to say we find nothing surprising in that reasoning in terms of the operation of s 106 and, indeed, if it were otherwise then the whole jurisprudence developed in relation to the unfair contracts provisions in the industrial legislation over more than three decades would be effectively negated. Indeed, as to the conduct of parties, s 106(2) not only recognises such development in the cases but emphasises it by express statutory provision. 25 For instance, one may readily imagine in a particular case the formation of a contract, in the statutorily defined sense, which was very detailed and comprehensive as covering most, if not all, possible contingencies. Nonetheless, the conduct of one of the parties to the contract may be so inconsistent with its terms as to constitute such a fundamental departure therefrom as to demonstrate an intention not to be bound by the contract. Why, it may be asked rhetorically, may not that contract be declared void under s 106 as the then appropriate form of relief, with an order for the payment of money in connection with the contract so declared void as is considered just in the circumstances, so as to restore the parties to the situation which existed before the contract was made? Indeed, such form of relief was contemplated by the High Court (per Barwick CJ, with whom McTiernan, Menzies, Windeyer and Owen JJ agreed) as being available in Brown v Rezitis (1970) 127 CLR 157 at 164-165 and where, whether by avoidance or variation of a contract, it was said (per Barwick CJ at 165) the power to make an order for the payment of money included that "which was payable under the contract arrangements themselves" and extended "to effect wholly or partially the restitution of the parties to their former position upon the variation or avoidance of the contract or arrangement." Of course, and as Barwick CJ (with whom Mason and Jacobs JJ agreed) later observed in Stevenson v Barham (1977) 136 CLR 190 at 192, whether any order will be made within the wide and general powers available is a matter of discretion. 26 Also, it may be asked rhetorically, why may not such a contract be varied under s 106 to include a provision that its terms will be strictly complied with and not observed in the breach and/or for liquidated damages for a fundamental breach thereof, such as repudiation of its terms, and then an order be made for the payment of money in the amount of such damages as representing the relevant loss to the innocent party so as to properly restore him to his pre-contract situation? If it were not so, then, it seems to us, the remedy of s 106 could be evaded by a wrongdoer but catch a party complying with contractual terms but where those terms, for some other reason, may be objectively unfair - we would not apprehend that to be the true intention of the section. 27 It logically follows, in our view, that Mr Fernon's submission, as earlier quoted, that "unfairness in a contract is demonstrated by unfair conduct that is consistent with the contract" is only partly correct but to which should be added "unfair conduct that is inconsistent with the contract". We accept Mr Murphy's approach to this aspect, namely, as he said, "conduct by an employer which is unfair and which breaches the employment contract, even though not permitted by the terms of that contract … would nevertheless render such contract unfair and amenable to relief. Such approach is entirely consistent with the language of s 106(2)". We would only add the comment that to us it seems an utterly arid exercise in semantics to find conduct as part of the operation of a contract to be unfair but not thereby to find also the contract to be unfair because such unfair conduct was not permitted by the otherwise fair contract - we think it should be stated as plainly as it may be, and as we think the authorities and s 106(2) do, that a contract may be found to be unfair because of any conduct of the parties. 28 A contract whereby a person performs work in an industry (including as here a contract of employment as a species thereof) has as an inherent feature the behaviour or conduct of the parties for the contract to be able to operate. It is difficult, we think, in conceptual terms to separate the contract itself from the conduct of the parties in performing it. As Priestley JA, with whom Kirby P and Meagher JA agreed, observed in Rothmans Distribution Services Ltd v Full Court of the Industrial Court of New South Wales [1994] 53 IR 157 at 160, "how the terms of the contract operated in practice … necessarily means looking at … conduct … and to conclude that a contract which could so operate was unfair". What a contract of employment does is set the terms and conditions to govern the employment relationship; the contractual relationship is another term which may be readily used to describe it. If a party in the course of operation of the employment relationship were to act in contravention of the contract of employment, particularly by committing a fundamental breach thereof, then that may only mean that the contract otherwise was unfair in so allowing or not preventing such unfair conduct or, indeed, in failing to make appropriate provision in the event occurring. In any of those situations, we think it clear that s 106 could be called in aid by the aggrieved party to obtain relief. We repeat, the section should not be construed to the contrary and as would protect the wrongdoer. 29 Just as importantly, of course, if relief under s 106 were to be declined because the section did not cover a situation where conduct led to an action at common law for damages for breach of contract, then it would be difficult to say that the section nevertheless was available to cover unfair conduct affecting an arrangement as something less than a legally enforceable contract. After all, the section covers in its terms a "contract" which is defined to mean a "contract or arrangement, or any related condition or collateral arrangement" so that it would make little sense in depriving jurisdiction as to a strict contract but permitting it for an arrangement. To us that would result in a non sequitur with the practical effect of denying coverage under the section where conduct was actionable as a breach of contract but allowing it as a breach of a non-contractual arrangement. 30 The Full Bench in Beahan v Bush Boake Allen considered the point by reference to the more recent cases, particularly those allowing relief under the unfair contracts provisions where a contract of employment was terminated utilising the implied common law term of "reasonable notice"; it was concluded that power existed under the section to relevantly avoid or vary the contract concerned. Their Honours said (93 IR at pp 33-35) : A series of more recent unfair contracts cases under s 275 of the 1991 Act and s.106 of the present Act have been decided by single judges and on appeal by Full Benches of the Court in situations where after an employee was dismissed relief was allowed by avoiding or varying contracts of employment found to be unfair in respect of various matters, including notice periods, severance pay, redundancy payments, superannuation, share option schemes and deeds of release; orders were made for the payment of money in connection with the contracts so avoided or varied as to the subject matters concerned. Those cases may be identified from the authorities which we have set out earlier in these reasons and we do not repeat them. However, on this aspect as to the nature of the unfair contracts scheme we think it helpful to refer to the decision of a Full Bench ( Hill, Hungerford and Schmidt JJ) of the Court in Harcourt Brace & Company Australia Pty Ltd v Cory (1997) 81 IR 321 which dismissed an appeal against the decision of Glynn J varying a contract of employment after the employee had been dismissed to provide a term for a notice period of seven months, or payment in lieu thereof, plus redundancy benefits. Their Honours reviewed the authorities and relevantly concluded (81 IR at pp.331-333) : "The law on this matter is now well settled. In Westfield v Helprin (1997) 82 IR 411 a Full Bench of this Court (Cahill V-P, Hungerford and Schmidt JJ) considered at some length, and by reference to the recent authorities, the power to make orders under s 275 in relation to contracts of employment containing implied terms as to notice periods. During the course of reasoning the issues (at pp 428-434) their Honours commented (at p 433) : 'It is not open to us to conclude in any general way that an employment contract containing terms requiring the giving of reasonable notice could simply be excluded from review if an application for an order declaring void or varying the contract was made under s 275. This must be so whether the notice provisions of the contract resulted from express agreement or from implication by the operation of the common law. To adopt any other approach might involve a constructive refusal to exercise the jurisdiction conferred by the section. (See Svecova v Industrial Commission of New South Wales (1991) 39 IR 328 at 342 per Meagher JA)' Their Honours then concluded (at p 434), in a manner against the present submissions for Harcourt Brace, as follows : "In our view, a contract of employment which contains a term requiring the giving of reasonable notice of termination, whether that is an express or implied term of the contract, is not, for that reason, necessarily immune from consideration under s 275. In an appropriate case, orders varying or declaring such a contract void may properly be made under the section, together with orders as to the payment of money in connection with the contract so varied or declared void as is just in the circumstances of the case in an amount which might be at least partly referable to the circumstances of termination. In this respect we note the approach to the assessment of moneys payable under a predecessor provision, s 88F of the Industrial Arbitration Act 1940 (NSW), taken by the High Court in Brown v Rezitis (1970) 127 CLR 157 at 164-165 :

'Consequently the nature of the orders which may be made under sub-s (2) will of necessity cover a wide field. But underlying sub-s (2) is I think a broad concept of a restitution of the parties to a situation which existed before the making of the contractual arrangement as well as in an appropriate case to make remedial provision for what has taken place or been done under the contract in the meantime …

… However, in either case it will, of course, include power to make an order for payment of money which has been paid or which was payable under the contract arrangements themselves.' " We respectfully join in the opinion so expressed as to the scope and operation of s 275. For completeness, we refer to a more recent decision by a Full Bench (Fisher P, Cahill V-P, Hungerford, Marks and Schmidt JJ) of this Court in National Distribution Services Ltd (now Rothmans Distribution Services Ltd) v Kellett (1997) 80 IR 475 where it was said at 482 : "It is clear from the majority decision in Baker v National Distribution Services Ltd [1993] 50 IR 254 at 270-271 that the approach adopted was consistent with observations made by the Full Industrial Court (Fisher CJ, Glynn and Cullen JJ) in Incitec v Barry [1992] 45 IR at 154 in which their Honours observed that 'whether or not such contracts are unfair is a matter to be decided upon examination of the facts of each particular case'. This raises the question whether this Court as currently constituted should revisit the Baker decision. The question so posed assumes greater significance having in mind the comment by Gleeson CJ, with whom Kirby P and Priestley JA agreed, in Incitec Ltd v Industrial Court of New South Wales [1992] 45 IR 155 at 157 as to s 88F of the 1940 Act (and, hence s 275 of the 1991 Act) to the effect that the section 'is concerned with alleged unfairness or harshness or unconscionability of individual contracts of employment' where the 'focus of attention is the contractual relationship between a particular employer and employee'. The Chief Justice cited with approval the comments by Hill J at first instance in Barry v Incitec Ltd [1991] 45 IR 143 at 146, namely - 'Unfairness may arise either from the terms of the contract itself, the surrounding circumstances, and/or from the manner of performance or operation of the contract … It may arise simply in the special circumstance of and surrounding the particular contract'." See also as to the fairness of an implied term as to reasonable notice Stone Microsystems (Aust) Pty Ltd v Kwong (1997) 85 IR 237 per Cahill V-P, Bauer and Hill JJ. 31 In the result, the Full Bench concluded in Beahan v Bush Boake Allen (93 IR at p 35), and with which we agree, as follows : What emerges from the above authorities, we think, is the now settled view that s 106 (as with the previous s 88F of the 1940 Act and s 275 of the 1991 Act) is directed to an impugned contract of employment, whether existing or terminated, as to the fairness of its express or implied terms. Such unfairness will depend upon the facts of each particular case by focusing attention on the contractual relationship between a particular employer and employee and where the unfairness may arise from the terms of the contract itself, the surrounding circumstances and/or the manner of performance or operation of the contract . The section, we emphasise, is not concerned with re-establishing an employment relationship which has ended nor with compensating an employee for the loss of his employment contract. In other words, the section is properly concerned with the fairness of the terms of a contract of employment in its various respects and, if relevantly found to be unfair, to provide remedial relief by avoiding or varying the terms of that contract and to order the payment of money in connection with any contract so avoided or varied as is considered just in the circumstances of the case. (emphasis added) 32 It follows, in our view, that the position must be reached on the settled authorities that the answers to the two questions posed in the present case are in the affirmative. However, it is necessary to examine the reasoning of Maidment J, the full case having been heard by his Honour, to determine whether it was properly open to his Honour for the reasons stated to find no relevant unfairness in the contract of employment concerned here. In light of the principles of law as we have outlined them, we turn now to review his Honour's judgment. 33 Maidment J based consideration of the appellant's case on the proposition it had been pressed on the incorrect premise he had been dismissed by the respondent. For that purpose, his Honour referred to the summons initiating the proceedings under s 106, and to what he described as "the pivotal ground in support", as being the summary termination of the appellant's employment by the respondent on 18 August 1998, affirmed on 25 August 1998 and effective on and from 1 September 1998. We have set out earlier in these reasons the grounds relied upon by the appellant for relief and the so-called "pivotal ground" appears as ground 6; ground 7, it will be seen, also refers to the termination of the contract by the respondent in certain respects alleged to be unfair. However, we immediately comment that his Honour expressly failed to give consideration to grounds 8, 9 and 10 in the summons which were not dependent in any way on the termination of the appellant's employment being effected by the respondent; those grounds contained allegations as to the conduct of the respondent and to the failure of the contract concerned to protect the appellant against a termination thereof in a manner said to be "harsh, unfair and unconscionable, and against the public interest" and in failing "to provide for the payment of adequate compensation … upon the termination of the contract"; reference was also made to the respondent's "dominant bargaining and negotiating position" with respect to the appellant said to be used "for its benefit and to the detriment" of the appellant. But, so his Honour reasoned, that raised the situation where the appellant's case was "based only upon a breach of contract, no unfairness justiciable under s 106". For that proposition, his Honour relied upon, as referred to by the respondent's counsel during the proceedings, the decisions in Bass v Truda [1990] 38 IR 172 (per Maidment J), C olaco v Soul Pattinson (Manufacturing) Pty Ltd [1990] 38 IR 174 (per Maidment J) and Chowdhury v Glopec Pty Ltd [1991] 39 IR 448 (per Cullen J). 34 In dealing with the submission of counsel for the appellant as to the stated authorities having been overruled by the recent decision of a Full Bench ( Wright J, President, Walton J, Vice-President and Hungerford J) of the Court in Dun & Bradstreet (Australia) Pty Ltd v Robbie (1999) 91 IR 150, his Honour referred to the following extract from that decision (91 IR at p 152) : The second matter involved fundamental reliance upon a line of cases decided at first instance by the former Industrial Commission of New South Wales as illustrated by Bass v Truda (1990) 38 IR 172; Colaco v Soul Pattinson (Manufacturing) Pty Ltd (1990) 38 IR 174 and Chowdhury v Glopec Pty Ltd (1991) 39 IR 448 and subsequently followed in some judgments of the former Industrial Court of New South Wales. We consider that this reliance is erroneous. Those decisions cannot stand with the judgments of the Court of Appeal in Walker v Industrial Court of NSW (1994) 53 IR 121; Rothmans Distribution Services Ltd v Industrial Court of NSW (1994) 53 IR 157 and a number of judgments of this Court, including National Distribution Services Ltd v Kellett (1997) 80 IR 475; nor can they be considered good law in light of the terms of s 106 as enacted in 1996. 35 Maidment J then said in the challenged judgment : At first blush Dun would seem to have scuttled the impugned line of cases to the depths of a judicial Mariana Trench. However, it does seem to me that more than flotsam remains bobbing about on the sea of precedent.

Unfortunately the observations in Dun are unaccompanied by any useful elucidation of the "fundamental reliance upon a line of cases" which reliance was said to be erroneous. The nature of that reliance is not disclosed nor is any particular proposition which was decided in the impugned line of cases specified as being incorrect.

Dun is bereft of any specification of the findings in the impugned line of cases which are said to be not good law. No reasoning is apparent, there being bare reference to three identified authorities and to the 1996 Act. No passages or findings in any of those three authorities are to be found or even referred to in Dun and one is driven to speculation as to the basis of the asserted relevance of them to the impugned line of cases.

I cannot imagine that their Honours were declaring that each and every finding of law in the impugned line of cases was erroneous, for example the findings in Colaco and in Chowdhury as to the existence of an implied term requiring reasonable notice of termination referred to earlier herein would seem to have had long acceptance. One thus must search for some clues in the judgment as to that in the impugned line of cases with which exception is taken.

In order to ascertain the effect of Dun it is necessary to first determine what it decided and to do so in the light of that which Lord Halsbury said in Quinn v Leathem [1901] AC 459 at 506: …every judgment must be read as applicable to the particular facts proved, or assumed to be proved, since the generality of the expressions which may be found there are not intended to be expositions of the whole law, but governed and qualified by the particular facts of the case in which such expressions are to be found. and …a case is only authority for what it actually decides. I entirely deny that it can be quoted for a proposition that may seem to flow logically from it. Such a mode of reasoning assumes that the law is necessarily a logical code, whereas every lawyer must acknowledge that the law is not always logical at all. Dun actually decided that leave to appeal should not be granted and is authority for that proposition. Having reached that conclusion the court, apparently gratuitously, went on to impugn the line of cases upon which erroneous reliance was said to have been placed. 36 Under the rubric "The Impugned Cases" ( Bass v Truda, Colaco v Soul Pattinson and Chowdhury v Glopec ), Maidment J reviewed what was said to be decided by them and observed in his decision : Each of the three specified impugned cases concerned a contract of employment which, it was held, contained an implied term which required that, upon termination of the contract by the employer, reasonable notice be given. In each case it was complained that the employer, upon termination of the contract, had failed to provide reasonable notice or payment in lieu and thus, it was submitted, the contract was unfair and attracted a remedy under s 88F of the Industrial Relations ( sic ) Act 1940. In each case it was held that the alleged breach of the implied term in the contract of employment did not, of itself, attract a remedy under s 88F. The rationale in both Bass v Truda and Colaco was that failure to comply with the terms of a fair contract did not make the contract unfair. 37 As to the effect of Dun & Bradstreet v Robbie on the three "impugned cases", Maidment J found them, in effect, to be thereby unaffected as the decision in Dun & Bradstreet v Robbie was made obiter dicta . His Honour said : No other issues or findings in those three impugned cases would seem to be common to them. Unfortunately, it is not clear from Dun whether or not it is the above findings which have been impugned and if so to what degree. It is my misfortune to be faced with the duty of deciding the present case whilst faced with uncertainty as to the effect of Dun .

No issue in the three impugned cases is apparent amongst those identified in Dun as therein having been raised either by the application for leave to appeal or by the appeal. The issues in Dun , which were earlier set out, do not appear on their face to touch upon any issues common to the impugned line of cases and it is difficult to comprehend the motivation to pass upon the correctness of them, either retrospectively or in the context of the 1996 Act.

Consideration of the decision in Dun at first instance ( Marks J , 25 November 1998, IRC 6041 of 1997) does not assist. In addition to the issues subsequently raised on appeal, his Honour dealt with an issue as to whether or not a term of the contract of employment that the employer could terminate it on one month's notice was unfair in the circumstances of that case. The common issue in the impugned line of cases of whether statutory unfairness arose from an asserted breach of contract did not arise and is not mentioned in his Honour's judgment.

Accordingly, when the issues in Dun and the observations as to the impugned line of cases are compared it is difficult to know what the appeal bench was concerned with. I incline to the view that the observations as to the impugned line of cases were made obiter dicta .

Perhaps recourse to the judgments which, it is said, the impugned line of cases cannot stand with may shed some light upon their Honour's observations. Such recourse requires consideration of those authorities bearing in mind the observations of Lord Halsbury in Quinn v Leathem earlier referred to. Unfortunately however I cannot discern any denominator common to their ratio decidendi let alone common to either Dun or to the impugned line of cases. 38 Maidment J then considered the three cases referred to by the Full Bench in Dun & Bradstreet v Robbie , namely, Walker v Industrial Court of New South Wales [1994] 53 IR 121 , Rothmans Distribution Services Ltd v Full Court of the Industrial Court of New South Wales [1994] 53 IR 157 and National Distribution Services Ltd v Kellett (1997) 80 IR 475, and made the following findings in respect of them - · As to Walker v Industrial Court : "I must say that I am unable to discern any observation in Walker which stands uncomfortably with the common findings in the impugned line of cases, the above quoted opinions of the members of the Court of Appeal suggest to me the contrary". · As to Rothmans Distribution Services v Industrial Court : "The issue at first instance was different to the common issue in the line of impugned cases. The common issue was not considered either by the appeal bench or by the Court of Appeal. I am unable to discern any relevance in Rothmans to the impugned line of cases". · As to National Distribution Services v Kellett : "I am unable to discern any relevance in Kellett to the impugned line of cases". 39 Maidment J then considered the aspect of the conduct of the respondent towards the appellant in repudiating the contract of employment by reference to the Court of Appeal decision in Walker v Industrial Court and concluded that the unfair contracts provisions "required, as a prerequisite to relief, a finding that the contract was unfair … That unfairness could be evidenced by unfair conduct which was permitted by the contract". In other words, his Honour expressed the view that mere unfair conduct was not sufficient to attract relief under the section. 40 Under the heading of "Conclusion", Maidment J relevantly said : I agree with the submission of Mr Fernon that the observations in Dun in respect of the impugned cases were made by way of obiter dicta . I accept the submission of Mr Latham that the observations are emphatic and are highly persuasive. Unfortunately and with respect to their honours, as a consequence of want of specificity and of expressed reasoning in the judgment, I am unable to discern what Dun actually decided as to the impugned cases. Accordingly I consider it appropriate for me to follow the observations of Kirby P and Sheller JA in Walker to which I have earlier referred and which have clear relevance to this case although the issue being considered by them was somewhat different. Those are the only observations relevant to the present case which I can identify in a careful reading of each of the three authorities from which Dun draws comfort.

In his written submissions in reply Mr Latham argued that: The contract under which the Applicant was employed was unfair by its nature in that it allowed the unilateral reduction of the Applicant's salary by the Respondent, the termination of his contract without the provision of fair notice and the receipt by the Respondent of substantial amounts of sales due to the efforts of the Applicant for which he never received commission.

Contrary to those submissions it is my view that the contract did not allow either the unilateral reduction of Mr Reich's salary or the termination of his contract without fair notice. Mr Latham suggests that a reasonable period of notice may not be fair but does not explain how, either theoretically, or in the circumstances of this case, that might be. The evidence does not persuade me to the view that Mr Reich should have received commissions beyond the period of reasonable notice and, in any event, loss of commission falls within the measure of damages he is entitled to at common law.

Mr Latham argues that the absence of fair termination procedures renders the contract unfair, however, this is a case of repudiation and not a case of termination by the employer following upon deficient termination procedures. As a matter of discretion and assuming statutory authority to do so, I will not search for a deficiency in the contract in order to found power to award the damages which flow from the breach of the contract. Nor will I rectify under s 106(1) a perceived deficiency in the contract from which no damage resulted in order, assuming statutory authority, to make an order under s 106(5) in respect of the damage which flowed from the breach of the contract by CSP. To do so in either case would effect an improper fiction.

The decision of CSP to alter Mr Reich's salary package, as expressed in the letter of 18 August, was not authorised by the contract of employment. CSP had no authority to unilaterally alter the terms of the contract, it was incapable of so doing. The subsequent failure by CSP to provide Mr Reich with the remuneration due to him under his contract of employment was a breach of its terms. The conduct of CSP in purporting to alter Mr Reich's salary package was not permitted by the contract of employment, it was repugnant to that contract. The failure of CSP to comply with the terms of the contract of employment by way of paying Mr Reich less than he was entitled was a failure to comply with the terms of a fair contract in the sense referred to by Sheller JA in Walker . Again paying regard to his Honour's opinion it cannot here be concluded that Mr Reich's contract permitted the treatment of him which is said to have been unfair. Contrary to having been permitted by the contract the conduct was repugnant to its very terms. Adapting the words of Kirby P , this is not a case of failure, on the part of the contract, to provide in a way that fairness required. In fact on one view of the evidence the contract was more than fair, Mr Reich was earning about $250K per annum under its terms in circumstances in which the market was offering about $140K for similar employment.

Although I consider the conduct of CSP in purporting to reduce Mr Reich's remuneration to have been unfair I consider that conduct to have been unauthorised and not permitted by the contract; it was inimical to it.

For and upon the above reasons I find no relevant unfairness in the contract of employment and dismiss the application. 41 The commencement of the reasoning by Maidment J in his decision was, as we have indicated, based on the erroneous view that the "pivotal ground" of the appellant's claim was that his employment had been summarily terminated by the respondent. As we have said, that approach by his Honour simply overlooked grounds 7, 8, 9 and 10 in the originating summons, with the effect that his Honour focused upon the termination of employment and breach of the contract but without attending to those aspects raised by the appellant concerning the respondent's conduct as it affected the terms of the employment contract or was permitted by that contract. In the overall circumstances as we see them in light of all the grounds relied upon by the appellant, it is difficult to understand why his Honour should have been so preoccupied with the so-called "pivotal ground" and the breach of contract aspect. The only explanation would seem to be that it was from those matters his Honour moved to consider whether a claim based only upon a breach of contract was justiciable under s 106 because no contractual unfairness arose. In any event, the approach so stated was the basis of his Honour's decision-making process and it must, therefore, be dealt with. 42 The finding made by Maidment J on the termination point was to the effect that "the claim, to the extent that it was based upon the false premise that Mr Reich was dismissed, cannot succeed. I should add that the repudiation of the contract of employment by CSP was repugnant to the terms of that contract and, once accepted by Mr Reich, entitled him to damages in a common law action." That finding followed, as was apparent from the decision, from his Honour's view that "this is not a case of termination by the employer accompanied by a failure to provide reasonable notice of termination which, of course, would have been a failure to comply with the terms of the contract. I consider that the facts demonstrate that CSP repudiated the contract of employment, that Mr Reich accepted that repudiation and, by his acceptance, brought the contract to an end. … I accept the submission of Mr Fernon that CSP did not dismiss Mr Reich. Mr Reich brought the contract to an end". Reliance for the view it was the appellant who terminated the contract once he accepted the respondent's repudiation was said by his Honour to be drawn from the decision of the Full Court ( Doyle CJ, Bleby and Martin JJ) of the Supreme Court of South Australia in Advertiser Newspapers Pty Ltd v Industrial Relations Commission of South Australia (1999) 90 IR 211. However, we are constrained to say that that case is only authority for the contrary proposition, namely, that where a party repudiates a contract then acceptance of the repudiation by the other party results in the termination of the contract by the party repudiating it . Apart from the decision in Advertiser Newspapers , we would have thought that to be the established position at common law in any case. 43 Maidment J quoted certain extracts from the judgment of Bleby J (with whom Doyle CJ and Martin J agreed) to the effect that contracts of employment subject to the type of repudiation where an employer refuses to comply with a fundamental condition (such as in the present case by refusing to pay the employee at the same salary rate) were in no different position from any other contract: see 90 IR at pp 217-218. So much is clear, we think, having in mind the reference by Bleby J to Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 and Consolidated Press Ltd v Thompson [1952] 52 SR (NSW) 75. Maidment J then cited what Bleby J said (90 IR at p 218), as follows : In most cases, however, the employee will accept the employer's repudiation because the employee may consider that he or she has little choice. The repudiation may be accepted expressly or, more often, by implication from conduct. The employee leaves and seeks alternative employment. An action may be brought at common law for damages for breach of contract, in which case, if the repudiation has not otherwise been accepted, the bringing of the action will constitute such acceptance. 44 From that, the conclusion was drawn by Maidment J that as the appellant here had accepted the respondent's repudiation then it would follow he had terminated the employment contract. However, his Honour did not refer to the view of Bleby J that in such a case the employee may also bring an action under s 105 of the Industrial and Employer Relations Act 1994 (SA) for relief against the harsh, unjust or unreasonable dismissal by the employer . Of course, if acceptance by the employee of a repudiation resulted in the termination being effected by him and not the employer then a s 105 claim for dismissal would not be available. That the repudiation of a contract results in its termination by the repudiating party once the aggrieved party accepts the repudiation is clear from the detailed and careful attention by Bleby J (90 IR at pp 216-220) to the principles involved. We respectfully agree with his Honour's analysis. The position was shortly summarised by Bleby J in the passage immediately following that cited by Maidment J in the challenged decision here, in this way (90 IR at p 218) : The employee may also bring an application under s 105 of the Act. The generally accepted view seems to be that that action too will constitute an unequivocal action of election, at least in respect of the former contract of employment. That was the view expressed by the Chief Justice, with whom Olsson and Duggan JJ concurred in Woolworths (SA) Pty Ltd v Russian (1996) 66 IR 13 at 14; 186 LSJS 196 at 197, relying on Gnatenko's Case (1975) 10 SASR 582 at 586 per Bray CJ (and I would add, per Walters and Wells JJ at 601), Brown v Mt Pleasant District Hospital Inc (1978) 45 SAIR 324 per Stanley J at 329 and R v Prince Alfred College (1979) 46 SAIR 598 per President Olsson (as he then was) at 605. However, whether the contract is at an end or not, on any view there will have been a dismissal or termination of employment by the employer, and the Commission may entertain the application.

I return to the situation of termination of the contract by the employer - whether lawfully or by acceptance by the employee of a repudiatory breach by the employer. 45 That a constructive dismissal from employment, and hence a termination of the employment contract by the employer, may arise from the repudiation of an employment contract by the employer is, we should add, well settled in industrial jurisprudence: see Allison v Bega Valley Council (1995) 63 IR 68; Woolworths (SA) Pty Ltd v Russian (1996) 66 IR 13; Sparrow v Little, t/as Milk Plus (1998) 78 IR 365; and Police Service of New South Wales v Batton [2000] NSWIRComm 79. The contrary finding here by Maidment J therefore constitutes appellable error. 46 Maidment J thus found the appellant's "case was pressed on the incorrect premise that he had been dismissed, … in the context of s 106, of CSP having breached the terms of the contract of employment". We must immediately observe that that is not our understanding of the sole way in which the appellant proceeded and we have referred already in that respect to grounds 7, 8, 9 and 10 in the summons. To that extent, his Honour committed appellable error. Nevertheless, his Honour then attended to the breach of contract aspect, by reference to Bass v Truda , Colaco v Soul Pattinson and Chowdhury v Glopec but notwithstanding the Full Bench decision in Dun & Bradstreet v Robbie , and to the "conduct" point so as to conclude, as appears from the passages we have cited earlier, that there was no relevant unfairness in the contract of the employment to enable relief under s 106 to the appellant. We have already stated the proper principles to follow in this respect, contrary to his Honour's approach, and we do not repeat them. His Honour, we are satisfied, fell into error which should be corrected on appeal. 47 However, his Honour relied upon the observations of Kirby P and Sheller JA in Walker v Industrial Court to support his conclusion, but by expressly declining to follow the Full Bench decision in Dun & Bradstreet v Robbie in preference to the decisions in Bass v Truda , Colaco v Soul Pattinson and Chowdhury v Glopec ; this requires comment. The Full Bench in Dun & Bradstreet v Robbie refused leave to appeal against a decision given by Marks J under s 106. Their Honours observed (91 IR at p 151) : His Honour reached certain conclusions which he summarised as follows: "For the reasons earlier set out I find that the contract of employment between the applicant and the respondent which was in existence at all material times was unfair because:

A provision by which the contract of employment could be terminated by the respondent giving the applicant one month's notice in writing in all circumstances other than those justifying summary dismissal was unfair at the date of termination of the applicant's employment.

The conduct of the respondent in refusing to permit the applicant to be granted annual leave for the purpose of attending at Hamilton Island for six working days in August and September 1997 was unfair.

The conduct of the respondent in terminating the applicant's employment without giving reasonable notice and in precluding the applicant from receiving long service leave entitlement and other entitlements calculated by reference to a period of reasonable notice was unfair." In the result, Marks J made orders for the variation of the contract of employment to provide for its termination on five months' notice or the payment of money in lieu thereof; the payment by the appellant to the respondent of moneys due by reference to the new notice period; interest on the consequent amount due; and costs.

In our view, this is very much a case which turned on its own set of facts and the inferences which might properly be drawn therefrom. That his Honour drew inferences and reached conclusions adverse to the appellant does not, without more, justify leave to appeal.

We have to say we are quite unable to discern any issue of principle, or in the application of the settled law by his Honour, which requires appellate review. 48 Particular reference was then made by the Full Bench in determining leave to appeal to the "fundamental reliance (by the appellant employer there) upon a line of cases decided at first instance by the former Industrial Commission of New South Wales as illustrated by Bass v Truda (1990) 38 IR 172; Colaco v Soul Pattinson (Manufacturing) Pty Ltd (1990) 38 IR 174; and Chowdhury v Glopec Pty Ltd (1991) 39 IR 448 … " Their Honours, by reference to Walker v Industrial Court and other specified cases, found that the decisions relied upon could not stand and neither could they be considered good law in light of the terms of s 106 of the Industrial Relations Act . It will be immediately clear, of course, that the decision to refuse leave to appeal necessarily depended upon the Full Bench's view that Marks J had not failed to follow principle or the settled law; that view required rejection of the reliance by the appellant there upon the line of cases as illustrated by Bass v Truda, Colaco v Soul Pattinson and Chowdhury v Glopec . In that situation, in our view, it was simply not open in the present case for Maidment J to find that the decision in Dun & Bradstreet v Robbie was obiter dicta or that, as his Honour said, "it is difficult to know what the appeal bench was concerned with". We think it was plain. His Honour was bound by the Full Bench decision in Dun & Bradstreet v Robbie and was obliged to follow it. 49 For completeness, we would add that it is plain also from a reading of the three cases relied upon by Maidment J that, in essence, they decided, wrongly in our view, that the breach of a term of an employment contract could not, of itself, attract a remedy under the unfair contracts provisions and the failure to comply with the terms of a fair contract did not make the contract unfair. For the reasons we have stated earlier, that proposition cannot be accepted as good law and we would affirm the decision in Dun & Bradstreet v Robbie by expressly overruling Bass v Truda, Colaco v Soul Pattinson and Chowdhury v Glopec . 50 We should comment that the purported reliance by Maidment J on the decision of the Court of Appeal in Walker v Industrial Court was misplaced. In our view, the decision is not authority for what Maidment J said it was. We have cited earlier the relevant extracts from the respective judgments and do not repeat them. It is sufficient only to observe at this point, particularly having in mind the supposed reliance by Maidment J on the decisions of Kirby P and Sheller JA in Walker v Industrial Court , what indeed was said by their Honours in that case. For instance, Kirby P said (53 IR at p 135) : In his reasons, Hungerford J identified specific elements which caused him to conclude that the contract between Mr Walker and Hussmann, as it ultimately operated between them, was "unfair" or "harsh and unconscionable", within s 88F(1). These were the defects of the contract in:

(i) not providing Mr Walker with warning of the impending action;

(ii) permitting his dismissal to take place in a summary manner upon the basis of facts and circumstances found to be erroneous;

(iii) declining to permit him a reasonable opportunity to answer the allegations made against him before he was dismissed; and

(iv) in consequence of these elements in the contract or arrangement, Mr Walker's termination without the payment to him of the severance moneys provided to all other employees (and hence by inference, by that stage, an applicable term of the contract or arrangement between Hussmann and its employees) resulted in a contract or arrangement which, at that point, was unfair.

Hungerford J was entitled so to declare. Such declaration enlivened the extremely large powers afforded to his Honour by s 88F(2). All that was then required was a relevant "connection with" the contract to authorise the order for the payment of money "as may appear … to be just in the circumstances of the case". Having decided that the contract or arrangement between Hussmann and Mr Walker was "unfair" and "harsh or unconscionable", in so far as it contained the elements specified above, the order which Hungerford J then made, under s 88F(2) IAA , was by no means surprising. His Honour could not, in the circumstances, remove the first three elements of unfairness. But he could order the payment of the money in connection with the contract or arrangement, which would repair the fourth element, remove the discrimination between Mr Walker and the other employees, and treat Mr Walker, not as having been dismissed for cause (an assertion which was rejected), but having been terminated otherwise, and thus entitled to the redundancy or termination package which all the other employees secured.

Neither in the determination under s 88F(1) of a relevant unfairness, harshness, or unconscionability in the contract or arrangement, nor in the relief provided under s 88F(2) which followed, do I see the slightest error on the part of Hungerford J which, in law or fact, authorised the intervention of the Full Industrial Court.

In the result, Kirby P would have allowed the then applicant an entitlement to relief under the unfair contracts provisions. 51 Sheller JA concluded (53 IR at pp 148-149) : All the members of the Full Court agreed that a contract fair at the time of its formation could by reasons of time or intervening events become unfair. Maidment and Peterson JJ were of the opinion that Hungerford J had held the contract to be unfair, harsh and unconscionable not because of its terms but because of the behaviour of Hussmann. I am not sure that Hill J thought otherwise. The majority, having held that Hungerford J had taken a wrong approach, were entitled to form their own view about the contract. They concluded that it was an unexceptional and normal contract of employment which manifested no unfairness and was not unfair. Hill J thought that the findings made by Hungerford J supported the conclusion that the contract was unfair, harsh and unconscionable. While Hungerford J did not plainly express his reason for holding that the contract was unfair it was open to the Full Court to conclude that Hungerford J regarded the contract as unfair, not simply because of Hussmann's behaviour, but because the contract permitted unfair, harsh and unconscionable treatment of the claimant and discrimination against him on termination. It is possible that this is indeed the way that Hungerford J decided the matter. Support for this is to be found in the order he made that Hussmann pay an amount of money calculated by comparing what the claimant received on termination with the benefits of the termination package allowed to other employees terminated.

I prefer the conclusion of Hill J. In my opinion the majority erred in not giving sufficient weight to the fact, consistent with Hungerford J's findings, that the contract of employment permitted termination which, in the circumstances, was unfair and discriminatory. By so permitting the contract was or became unfair. If the matter were before us by way of appeal I would have been inclined to restore the declaration made by Hungerford J. 52 Therefore, we are quite unable to see how Maidment J could rely upon the decisions of Kirby P and Sheller JA for his conclusions in this case. His Honour accordingly committed appellable error. 53 Finally, we would wish to note that as part of the approach of Maidment J in distinguishing the judgment in Dun & Bradstreet v Robbie his Honour relied upon the speech of Lord Halsbury in Quinn v Leathem [1901] AC 495 at 506. However, in a real sense in this particular case, the reliance by his Honour upon that speech did no more than beg every relevant question. His Honour was, of course, not sitting as a member of an appeal bench but as a trial judge and, as such, bound by decisions of Full Benches of this Court and of its predecessors. The policy reasons for that situation are so obvious one hesitates to state them. However, they are helpfully set out, both in terms of principle and of policy, in a decision of the former Industrial Commission in Court Session in In re Hospital Employees Pharmacists (State) Award [1979] AR (NSW) 348 at 350-351 where the Full Bench ( Beattie P, Cahill and McClelland JJ) said : It was the duty of the chairman to follow a decision of the Commission which was directly in point. The scheme of the Act provides for the Commission to exercise a supervisory appellate jurisdiction concerning decisions of the conciliation committees. A failure at committee level to follow decisions of the Commission is conducive to the bringing of appeals and the inevitable delay in finalizing industrial claims which an appeal causes. The present case provides an example. The principle involved is aptly stated by Stephen J in Viro v The Queen (1978) 141 CLR 88 at 129 in these terms: The first duty of a court is to administer justice according to law. However in the case of an inferior court operating within a system where the doctrine of precedent applies, the existence of authority binding upon it determines for it what it must understand to be the law. It must accept the law to be as the precedent authority has declared it to be, whatever may be its own inclinations in the matter. The sanction implicit in the doctrine of precedent is simple and effective; if an inferior court fails to observe the doctrine the superior court will correct its decision on appeal. Thus the existence of an appeal is inherent in and essential to the doctrine. Apart from such consideration, any failure at committee level to follow decisions of the Commission can only impair the consistency and uniformity in decisions of the various tribunals constituted by the Act which has always been seen as desirable.

The decision of Dey J was not only binding on the committee but, in our view, was also correct. 54 However, the essential question-begging nature of the reliance by Maidment J upon the speech of Lord Halsbury is demonstrated by reference to the considerations referred to over 70 years ago by the eminent American jurist Benjamin N Cardozo, an Associate Justice of the United States Supreme Court from 1932 to 1938 and earlier from 1914 a judge of the New York Court of Appeals and Chief Judge of that Court from 1926. In his Honour's classic work entitled The Nature of the Judicial Process (Yale University Press, 1921), albeit writing extra-judicially, Cardozo J referred to that part of his Lordship's judgment in Quinn v Leathem cited by Maidment J in the present matter. Cardozo J then said (at pp 32-34) : All this may be true, but we must not press the truth too far. Logical consistency does not cease to be a good because it is not the supreme good. Holmes has told us in a sentence which is now classic that "the life of the law has not been logic; it has been experience" ("The Common Law", p 1). But Holmes did not tell us that logic is to be ignored when experience is silent. I am not to mar the symmetry of the legal structure by the introduction of inconsistencies and irrelevancies and artificial exceptions unless for some sufficient reason, which will commonly be some consideration of history or custom or policy or justice. Lacking such a reason, I must be logical, just as I must be impartial, and upon like grounds. It will not do to decide the same question one way between one set of litigants and the opposite way between another. "If a group of cases involves the same point, the parties expect the same decision. It would be a gross injustice to decide alternate cases on opposite principles. If a case was decided against me yesterday when I was defendant, I shall look for the same judgment today if I am plaintiff. To decide differently would raise a feeling of resentment and wrong in my breast; it would be an infringement, material and moral, of my rights" (W G Miller, "The Data of Jurisprudence", p 335; cf. Gray, "Nature and Sources of the Law", sec 420; Salmond, "Jurisprudence", p 170). Everyone feels the force of this sentiment when two cases are the same. Adherence to precedent must then be the rule rather than the exception if litigants are to have faith in the even-handed administration of justice in the courts. 55 The reference to "Holmes" is, of course, a reference to Oliver Wendell Holmes, also an eminent American jurist and United States Supreme Court Justice, whom Cardozo J succeeded in 1932. The approach of Cardozo J not only illustrates the limitations upon the approach in Quinn v Leathem but also serves to emphasise the important policy considerations involved in following precedent, particularly in precedent being followed by single judges sitting at trial or first instance, considerations which go to the very legitimacy of the legal system itself. The need to maintain consistency in the law, even when a Full Bench or Full Court is considering or reconsidering earlier decisions has been stated many times. A useful synthesis of authority, the utility of which is emphasised when it is recognised as having been stated in an industrial context, is to be found in the judgment of Kennedy P, Franklyn and Anderson JJ in Federated Miscellaneous Workers' Union of Australia, WA Branch v Nappy Happy Hire Pty Ltd t/as Nappy Happy Service (1994) 56 IR 62 at 63-64, 67-68. Their Honours are, of course, highly respected members of the Supreme Court of Western Australia although, in that case, they were sitting as the Western Australian Industrial Appeal Court. Their Honours deferred to the principle that "the power to overrule is to be used sparingly and will rarely be used to reconsider the construction of a statute". That statement as applied to considerations by subsequent appellate benches is sufficient demonstration of the inappropriateness of a single judge attempting to depart from Full Bench authority. Significantly, in coming to that conclusion, their Honours relied upon important statements by Gibbs J and Stephen J in Queensland v The Commonwealth (1977) 139 CLR 585 at 599 and 603 respectively, a case in which their Honours thought it appropriate to apply and follow an authority decided only two years before, even though they had disagreed with the decision in the earlier case by being in the minority. Their Honours also relied upon the following passage in the judgment of Dawson, Toohey and McHugh JJ in Nguyen v Nguyen (1991) 169 CLR 245 at 269 : Where a court of appeal holds itself free to depart from an earlier decision it should do so cautiously and only when compelled to the conclusion that the earlier decision is wrong. The occasions upon which the departure from previous authority is warranted are infrequent and exceptional … 56 Further, the importance of this approach is even clearer in the context of a specialist jurisdiction or where the jurisdiction is relatively small (for example, smaller than the major superior court in the particular jurisdiction). This consideration was discussed in some detail by Kirby P, as President of the Court of Appeal, in Cepus v Industrial Court of New South Wales (1995) 60 IR 113 at 117-118 and where his Honour relevantly said (at p 118) that "persisting with fundamentally different approaches to the construction of statutes or industrial Determinations, is not conducive to the maintenance of respect for judicial tribunals". 57 Another concern raised by the judgment of Maidment J is the rather extraordinary language contained therein as cited earlier by us. Regrettably, one is reminded of the observations made by Cahill V-P in NSW Public Service Professional Officers' Association v Forestry Commission (NSW) [1990] 39 IR 46 at 51, in an analogous but not directly similar situation, where his Honour said "… Some of those statements and observations are couched in terms which in my view are unnecessarily extravagant … It is pertinent to observe, however, that where criticisms are considered to be justified in the context of a case such as this, care should be taken to ensure that they are couched in terms which are not immoderate or unnecessarily hurtful and that they do not extend beyond bounds which are reasonable and proper in the particular circumstances". 58 Although Cahill V-P in that case was referring to comments made in relation to a party to the proceedings, the comments are generally appropriate in any context in which a judicial or quasi-judicial officer is dealing with a matter. The reasons are not only reasons of hurt or damage but also are of concern to the reasonable bystander that the issues in the case, and even the question of the application of relevant precedents, are being approached in an unemotional, impartial and even-handed way. Unfortunately, from the tone and approach adopted by Maidment J in this matter, including the extraordinary language used, the reasonable bystander may very well come to the conclusion that the member of the court concerned had some personal interest in the line of authorities sought to be defended and apparently preserved by the use of such unusual and intemperate language. Such a bystander might also reasonably think that the judge employing such language had allowed himself to be distracted from objectively deciding the issues before him. Unfortunately, for reasons we have otherwise stated, that is precisely what happened in the proceedings in this matter at first instance. We regret having to state that the use of extreme language in decisions is entirely inappropriate. The only mitigating factor in the present situation is that at least his Honour did not use that language in relation to a party to the proceedings before him. 59 The determination of the appellant's claims under s 106 by Maidment J miscarried. We are satisfied his Honour constructively refused to exercise jurisdiction under the section to determine them on their substantial merits. The appeal should be upheld and the decision of his Honour quashed. We did consider, pursuant to s 192 of the Industrial Relations Act and as originally sought by the appellant, finally deciding the appellant's claims on the merits, particularly having in mind the unsatisfactory nature of the first instance proceedings, the need for an appeal and avoiding an extension of the litigation. Also, we had in mind the finding by his Honour, not challenged by either party on appeal, that the conduct of the respondent in purporting to reduce the appellant's remuneration and so repudiating the contract of employment was unfair and was neither authorised nor permitted by the contract; for ourselves, and having reviewed the material, we are of the view that that finding was reasonably open and, indeed, we agree with it. However, Mr Murphy for the appellant expressly asked, no doubt because an administrator had been appointed to the respondent and Mr Petrat and Mr Jones as directors may be joined to the proceedings, that if the appeal be successful then the matter should be remitted to a single judge. We think the appropriate course is to so remit the matter to enable it to be heard to finality on its merits. 60 We would propose that the following orders be made -

3. The decision and order made by Maidment J on 16 September 1999 are quashed.

The matter is remitted to a single judge, as allocated by the President, to hear and determine the appellant's claims on their merits and in accordance with the views expressed in this judgment on appeal.

The respondent shall pay the appellant's costs of the proceedings both at first instance and on appeal in an amount as agreed or, failing agreement, as assessed.

JUDGMENT OF GLYNN AND SCHMIDT JJ 61 This is an appeal from a judgment given by Justice Maidment on 16 September 1999 in proceedings brought by Thomas Reich against Client Server Professionals of Australia Pty Limited under s106 of the Industrial Relations Act 1996 ('the Act'). 62 The orders sought by Mr Reich were: 1. An order declaring that the contract between the Applicant and the Respondent, whereby the Applicant was employed as the Account Executive of the Respondent ("the Contract"), was unfair, harsh or unconscionable, or contrary to the public interest.

An order declaring the Contract void ab initio insofar as it provided for payment of no notice of termination on the termination of the employment.

An order varying the Contract from its commencement or some other time in order to provide the following terms:

(a) Termination of the Contract shall not be harsh, unjust or unreasonable;

(b) That the Contract may only be terminated upon the payment to the Applicant of reasonable compensation in the amount of twelve (12) months payment of the Applicant's total salary package including his base salary and payment of commission,

(c ) Should the Applicant's employment be terminated due to the economic situation of the Respondent, the Respondent shall pay the reasonable compensation in the amount of twelve (12) months payment of the Applicant's total salary package including his base salary and payment of commission,

(d) The method of determining the amount of commission to be paid shall be an amount equivalent to the previous 12 month period from the date of termination of payments of commission made to the Applicant by the Respondent.

An order that the Respondent pay to the Applicant interest upon such amount of money as is ordered to be paid to the Applicant in connection with the Contract.

An order that the Respondent pay the Applicant's costs of and incidental to these proceedings.

Such further or other orders as the Court may see fit to make to provide relief to the Applicant. 63 It is helpful to set out at the beginning of our consideration of this appeal his Honour's conclusions, which were relatively brief. His Honour found at pp18-19 of his judgment that: 'In his written submissions in reply Mr Latham argued that: The contract under which the Applicant was employed was unfair by its nature in that it allowed the unilateral reduction of the Applicant's salary by the Respondent, the termination of his contract without the provision of fair notice and the receipt by the Respondent of substantial amounts of sales due to the efforts of the Applicant for which he never received commission. Contrary to those submissions it is my view that the contract did not allow either the unilateral reduction of Mr Reich's salary or the termination of his contract without fair notice. Mr Latham suggests that a reasonable period of notice may not be fair but does not explain how, either theoretically, or in the circumstances of this case, that might be. The evidence does not persuade me to the view that Mr Reich should have received commissions beyond the period of reasonable notice and, in any event, loss of commission falls within the measure of damages he is entitled to at common law.

Mr Latham argues that the absence of fair termination procedures renders the contract unfair, however, this is a case of repudiation and not a case of termination by the employer following upon deficient termination procedures. As a matter of discretion and assuming statutory authority to do so, I will not search for a deficiency in the contract in order to found power to award the damages which flow from the breach of the contract. Nor will I rectify under s.106(1) a perceived deficiency in the contract from which no damage resulted in order, assuming statutory authority, to make an order under s.106(5) in respect of the damage which flowed from the breach of the contract by CSP. To do so in either case would effect an improper fiction.

The decision of CSP to alter Mr Reich's salary package, as expressed in the letter of 18 August, was not authorised by the contract of employment. CSP had no authority to unilaterally alter the terms of the contract, it was incapable of so doing. The subsequent failure by CSP to provide Mr Reich with the remuneration due to him under his contract of employment was a breach of its terms. The conduct of CSP in purporting to alter Mr Reich's salary package was not permitted by the contract of employment, it was repugnant to that contract. The failure of CSP to comply with the terms of the contract of employment by way of paying Mr Reich less than he was entitled was a failure to comply with the terms of a fair contract in the sense referred to by Sheller JA in Walker . Again paying regard to his Honour's opinion it cannot here be concluded that Mr Reich's contract permitted the treatment of him which is said to have been unfair. Contrary to having been permitted by the contract the conduct was repugnant to its very terms. Adapting the words of Kirby P , this is not a case of failure, on the part of the contract, to provide in a way that fairness required. In fact on one view of the evidence the contract was more than fair, Mr Reich was earning about $250K per annum under its terms in circumstances in which the market was offering about $140K for similar employment.

Although I consider the conduct of CSP in purporting to reduce Mr Reich's remuneration to have been unfair I consider that conduct to have been unauthorised and not permitted by the contract; it was inimical to it.

For and upon the above reasons I find no relevant unfairness in the contract of employment and dismiss the application.' THE APPEAL 64 The appeal raised two issues. Firstly, the errors into which it was submitted Maidment J fell in his approach to the decision in Dun & Bradstreet (Aust) Pty Ltd v Robbie (1999) 91 IR 150 and secondly, his Honour's view that it was necessary to find that the contract was an unfair contract, rather than accepting the approach of the appellant, that it was sufficient for a finding of unfair conduct to be made, in order for relief to be granted under s106(5) of the Act. 65 The appellant initially asked that if successful on those aspects of the appeal, the appeal bench determine the merits of the case to finality. That approach was opposed by the respondent, which submitted that in such a case, the matter should be returned to Maidment J for further hearing, particularly so as to allow his Honour to consider various surrounding circumstances relied upon by the respondent below, which his Honour did not consider in his judgment. The appellant's position later altered to one when it was submitted that if the appeal was upheld, it should be returned to a single member for rehearing. 66 The orders sought on appeal were: 'i) That leave to appeal be granted

iii) An order declaring that the contract between the Appellant and the Respondent, whereby the appellant was employed as the Account Executive of the Respondent ("the Contract") was unfair, harsh or unconscionable, or contrary to the public interest.

iv) An order declaring the Contact void ab initio insofar as it provided for payment of no notice of termination on the termination of the employment.

v) An order varying the Contract from its commencement or some other time in order to provide the following terms:

(a) Termination of the Contract shall not be harsh, unjust or unreasonable.

(b) That the Contract may only be terminated upon the payment to the Appellant of reasonable compensation in the amount of twelve (12) months payment of the Appellant's total salary package including his base salary and payment of commission.

(c) Should the Appellant's employment be terminated due to the economic situation of the Respondent, the Respondent shall pay the reasonable compensation in the amount of twelve (12) months payment of the Appellant's total salary package including his base salary and payment of commission.

(d) The method of determining the amount of commission to be paid shall be an amount equivalent to the previous twelve (12) month period from the date of termination of payments of commission made to the Appellant by the Respondent.

vi) An order that the Respondent pay the Appellant interest upon such amount of money as is ordered to be paid to the Applicant in connection with the Contract.

vii) An order that the Respondent pay the Appellant's costs of and incidental to these proceedings.

viii) Such further or other orders as the Court may see fit to make to provide relief to the Appellant.

ix) In the alternative, the appellant seeks to have the application remitted for rehearing before a member of the Commission other than His Honour.' THE NOTICE OF MOTION 67 During the hearing of the appeal there were two developments which must be noted. The first was that an administrator was appointed to the respondent. The second was that the appellant filed a notice of motion seeking to join the two directors and shareholders of the respondent who had given evidence in the proceedings before Maidment J, Mr Klaus Petras and Mr David Jones, as parties to the appeal. 68 The appellant approached the Supreme Court for leave to continue these proceedings, the administrator not having consented to that course. Austen J made orders on 15 March permitting the hearing of both the appeal and the notice of motion to proceed. 69 The joinder motion was heard before the hearing of the appeal resumed on 17 March. It was dismissed. Only one of the directors, Mr Petrat, appeared in person to oppose the granting of the orders sought. 70 There were a number of reasons for the dismissal of the motion. These included the time at which the application was brought - namely, during the hearing of the appeal, rather than during the substantive proceedings. Questions of natural justice arose from the orders sought and the basis upon which they were advanced, the appellant confirming that if the motion were granted it would also be necessary to seek to amend the orders sought in the application which had been dealt with to finality at first instance by Maidment J. Difficulties also flowed from the requirements of s109 of the Act, which requires that the Commission attempt to settle a claim brought under s106 by conciliation and not determine it until it is of the opinion that 'all reasonable attempts' to settle the claim have been unsuccessful. THE FACTS 71 The appellant was employed by the respondent as its National Sales Manager in October 1995, after negotiations over the terms and conditions of the employment. The appellant was then employed in the United States by the supplier of the software which the respondent marketed in Australia. The appellant had also been in negotiation with another prospective employer and after informing the respondent of the terms he had been offered by that employer, accepted the respondent's offer of a package which the parties expected would amount to some $140,000 per annum, including commission. 72 Later in 1995, 1996 and 1997 the respondent's package, particularly the commission component, was renegotiated on a number of occasions by the parties. The business of the respondent expanded considerably during this period. That expansion was not matched by increased profitability of the respondent. By mid-1998, after various agreed reductions in the appellant's commission arrangements, the appellant was earning some $250,000 per annum. 73 The respondent again sought to renegotiate the package with the appellant in 1998, advising on 18 August 1998 that his current level of remuneration could no longer be sustained, it had to be brought into line with the market and the packages of other employees. There were discussions between the appellant and Mr Petrat, then the respondent's managing director, in which no agreement was able to be reached. The respondent advised the appellant in writing that the changes it proposed would be implemented without further negotiation. The appellant wrote to the respondent on 1 September, refusing to accept the new terms. He understood that they would lead to a diminution of his income of some $100,000 per annum. 74 The new terms were, nevertheless, introduced by the respondent on 1 September. The appellant continued working under the new arrangement until 10 September, when the first payment on the new terms was made. The appellant, on his solicitor's advice, then left the respondent's employment without notice or informing the respondent. 75 The appellant's solicitors had on 8 September, already advised the respondent that in their view, the respondent had terminated the appellant 's employment on 31 August and sought that a payment in lieu of notice be made to him, notwithstanding that the appellant then still remained at work. This advice was not accepted by the respondent. 76 When the appellant left his employment two days later, the respondent took the view that the appellant had simply abandoned his employment and declined to make any payment to him on termination. THE JUDGMENT UNDER APPEAL 77 The first matter with which his Honour dealt in his judgment was how this contract of employment had come to an end. He concluded that the respondent had repudiated the contract by its unilateral variation of the remuneration arrangements and that the contract had come to an end when this repudiation was accepted by the appellant. His Honour rejected both the respondent's argument that the appellant had abandoned his employment and the appellant's argument that there had been a constructive dismissal by the respondent. 78 There was, however, no appeal from these findings by either party. 79 His Honour dealt with the consequences of this repudiation under the heading 'Breach of contract', observing at pp7 to 8: 'Although the applicant's case was pressed on the incorrect premise that he had been dismissed, counsel addressed the consequences, in the context of s.106, of CSP having breached the terms of the contract of employment. Mr Latham contended that Mr Reich was entitled to pay in lieu of reasonable notice as he had been the subject of unfair conduct.

Mr Fernon submitted that, if the applicant's case is based only upon a breach of contract, no unfairness justiciable under s.106 arises. In this regard he relied upon Bass v. Truda [1990] 38 I.R. 172, Colaco v. Soul Pattinson Manufacturing) Pty. Limited [1990] 38 I.R. 174 and Chowdhury v. Glopec Pty Limited [1991] 39 I.R. 448.

Mr Latham contended that the authorities relied upon by Mr Fernon have been overruled by the recent decision in Dun & Bradstreet (Australia) Pty Ltd v Glenda Louise Robbie ; (Wright P, Walton VP & Hungerford J , IRC 6533 of 1998, 20 July 1999). He submitted that, in the event that the references to those authorities in Dun were by way of obiter dicta , as was contended by Mr Fernon , nonetheless the views expressed therein are emphatic and highly persuasive.' 80 We observe at this point that Mr Fernon of counsel who appeared for the appellant both at first instance and on appeal, submitted on appeal that contrary to his Honour's judgment, he had not relied upon the decisions in Bass , Colaco and Chowdhury, at first instance, having rather submitted that these cases involved different circumstances to those which arose for consideration in this case. It was also counsel's submission that in the final analysis, his Honour's consideration of these authorities and the decision in Dun & Bradstreet, were not crucial to his Honour's conclusions, his Honour having in the end result applied the approach of Kirby P and Sheller JA in the Court of Appeal in Walker v. Industrial Court of New South Wales [1994] 53 I.R. 121 . 81 Mr Murphy of counsel for the appellant submitted however that his Honour's consideration of these authorities was wrong and had ultimately led his Honour into appellable error. 82 Maidment J went to considerable pains in his judgment to consider what had been decided in Dun , where it was observed at p152 that the decisions in Bass , Colaco and Chowdhury '… cannot stand with the judgments of the Court of Appeal in Walker v. Industrial Court of New South Wales [1994] 53. I.R. 121, Rothmans Distribution Services Limited v. Industrial Court of New South Wales [1994] 53 I.R.157 and a number of judgments of this court, including National Distribution Services Limited v Kellett (1997) 80 I.R. 475; nor can they be considered good law in light of the terms of s.106 as enacted in 1996.' 83 His Honour commenced this consideration with an analysis of what had been decided in Bass , Colaco and Chowdhury , under the heading 'The Impugned Cases', observing at p10 that: 'Each of the three specified impugned cases concerned a contract of employment which, it was held, contained an implied term which required that, upon termination of the contract by the employer, reasonable notice be given. In each case it was complained that the employer, upon termination of the contract, had failed to provide reasonable notice or payment in lieu and thus, it was submitted, the contract was unfair and attracted a remedy under s.88F of the Industrial Relations Act 1940. In each case it was held that the alleged breach of the implied term in the contract of employment did not, of itself, attract a remedy under s.88F. The rationale in both Bass v Truda and Colaco was that failure to comply with the terms of a fair contract did not make the contract unfair.' 84 His Honour noted that no other issues appeared to be common to the three cases and at p11 expressed difficulty in understanding whether it was these aspects of the cases which had been impugned and if so, to what degree. He also took the view that the issues in Dun did not appear on their face to touch upon any of the issues common to Bass , Colaco and Chowdhury and observed at p12: '…it is difficult to comprehend the motivation to pass upon the correctness of them, either retrospectively or in the context of the 1996 Act.' 85 His Honour concluded that the views expressed in Dun were obiter and having so concluded, turned to consider other authorities in an endeavour, as his Honour put it, to 'shed some light upon' those views. 86 His Honour considered the Court of Appeal judgments in Walker , noting that there it had been concluded by the Court that no jurisdictional error was apparent in the decisions of the then Industrial Court there under review and that therefore, no warrant to intervene resided in the Court of Appeal. His Honour then turned to various observations made by Kirby P and Sheller JA, observing at p14 that he was unable to '…discern any observation in Walker which stands uncomfortably with the common findings in the impugned line of cases, the above quoted opinions of the members of the Court of Appeal suggest to me the contrary.' 87 His Honour then dealt with the judgment of the Court of Appeal in Rothmans , which he found to be of no relevance and that of a Full Bench of the Court in National Distribution Services Limited , which he also regarded as irrelevant. 88 Having so reviewed the authorities, his Honour turned to deal with the topic of 'Conduct', by reference to the provisions of s106(2) of the Act and the Minister's second reading speech, which makes reference to the judgment of the Court of Appeal in Walker . His Honour noted at p16 that s106(1) 'still requires a finding the contract was unfair', noting the opinion of Kirby P (as he then was) in Walker that such unfairness may be found in the 'positive' provision of a contract and also in the failure 'to provide in a way that such fairness requires (at 133). 89 His Honour finally observed at p17 that neither Kirby P nor Sheller JA: '…expressed the view that mere unfair conduct sufficed to attract s.88F, Sheller JA would seem to have posited the opposite. Unfairness in the contract, either by way of its terms or that which it failed to provide, was recognised by the Court of Appeal as attracting s.88F. That unfairness could be evidenced by unfair conduct which was permitted by the contract.

It would seem to me that s.106(1) of the 1996 Act does no more than reinforce those opinions.' 90 This conclusion in particular was attacked by the appellant, who argued that unfair conduct, without more, was sufficient to lead to relief under s106(5) of the Act being granted. 91 His Honour then turned to deal with his conclusions, in which he indicated, as earlier noted, that he proposed to follow the observations of Kirby P and Sheller JA in Walker . His Honour's findings have earlier been set out.

THE SUBMISSIONS For the appellant 92 The case advanced on appeal for the appellant by Mr Murphy in extensive written and oral submissions, was that Maidment J had fallen into error in the approach which he had adopted to the decision in Dun which required correction on appeal. 93 The issue at first instance was said to be - 'was the conduct of the respondent towards the appellant in unilaterally reducing the latter's remuneration and which was, and was found by his Honour to be, a breach of the employment contract, a repudiation of the employment contract and unfair, such as to entitle the appellant to relief pursuant to s106?' 94 Mr Murphy approached the appeal by an analysis of case law, commencing with Australian Entre Business Centres v Smith (1989) 29 IR 172, where it was observed at p183: 'In a case which in truth and substance is nothing more or less than an action for damages for breach of contract it may be that there is no jurisdiction under s88F, or alternatively that, as a matter of discretion the Commission should not exercise its jurisdiction.' 95 This observation related to a predecessor to s106, s88F of the Industrial Arbitration Act 1940 and was submitted to be obiter. Similar approaches were adopted by Sweeney J in Long v Momentum Computing Pty Ltd (unreported, 11 December 1989), by Maidment J in Beard v WBW Insurance Brokers (unreported, 10 April 1990); by Sweeney J in Woods v Bank of New York Australia Ltd (unreported, 27 April 1990) and James v BNY Australia Limited (unreported, 25 March 1991); by Maidment J in Bass and Colaco and Cullen J in Chowdhury . In some of these cases the view was taken that the claim advanced was in truth nothing but an action for breach of contract and therefore not amenable to relief under s88F. 96 Reference was made to the approach of Hungerford J in Walker v Hussman (1991) 38 IR 180, that all that was necessary to attract jurisdiction under s88F was to demonstrate that the contract was one whereby a person performs work in an industry. A similar approach was said to have been adopted by Hill J in BNY Australia v James (1992) 40 IR 1 who, at p22, expressly reserved the question of whether a claim was within jurisdiction under s88F of the 1940 Act, if the 'only ground of unfairness established' is a failure to honour the contract, that is its breach.' 97 Counsel then turned to the conclusion of Hungerford J in Walker v Hussman (No2) (1992) 44 IR 404, the appeal from that decision in Hussman v Walker (1993) 48 IR 396 and the decision of the Court of Appeal in Walker . 98 Reference was also made to the judgment of Cahill DCJ in Baker v National Distribution Services Ltd (unreported, 15 March 1993) and the judgment on appeal therefrom in Baker v National Distribution Services Ltd (1993) 50 IR 254. The Court of Appeal's judgment in Rothmans was also analysed, as was the judgment in Kellett. 99 It was submitted that s106 of the Act had departed significantly from its predecessors, s88F of the 1940 Act and s275 of the Industrial Relations Act 1991, the section now making clear that 'the Commission can only exercise jurisdiction if it finds that the contract is unfair', in the context of the definition of 'unfair contract' in s105. It was also submitted however, that s106(2) put beyond issue that unfair conduct by a party to an employment contract can, per se, render the contract in the sense of the employment relationship, unfair 100 In so approaching the construction of s106, the Court was invited to adopt a definition of 'contract' in the case of employment contracts, as comprehending the entirety of an employment relationship, including conduct. It was submitted that beneficial legislation such as s106 should be so approached and that this was consistent with the approach of Hungerford J in Day v Lumley Life Limited (1999) 90 IR 70 at p71, which had been approved in Beahan v Bush Boake Allen Australia Limited (1999) 93 IR 1 at pp14-15. 101 Counsel then turned to deal with some recent authorities in which the provisions of s106 of the Act had been considered, including Dun and Bush Boake . 102 It was submitted that Maidment J's analysis of the decision in Dun and the conclusion that he would abide by the approach of Kirby P and Sheller JA in Walker , that a prerequisite to relief was a finding that the contract was unfair and that mere unfair conduct was insufficient for a grant of relief, were both errors which required correction on appeal. 103 The Court was invited to conclude that conduct constituting a breach of a term of a contract of employment may, in the circumstances of a particular case, of itself be amenable to relief and that the conduct of the respondent in this case fell into such a category. 104 It was also submitted that Maidment J had erred in his approach to the work of s106, the effect of which was to fail to approach the section beneficially and further, to shrink the work it was designed to do, so as to defeat the legislature's intention, which was to entitle persons such as the appellant who had suffered unfairly from the conduct of their employer, to approach the Court for relief. His Honour's approach had had the result, so it was submitted, that while there was no difficulty in finding that the respondent had acted unfairly, because of his Honour's technical approach to the need to find that the contract was unfair, the appellant was denied relief. It was further submitted that on one view of that approach, relief would only be available under the section, if the contract was on its face unfair. 105 It was submitted that the ratio of Maidment J's decision was 'that there was no unfairness in the contract, the subject of the proceedings before the unfair conduct of the employer in unilaterally reducing the remuneration of the employee did not render the contract unfair but rather constituted a repudiation and/or breach of it.' 106 In so finding it was submitted that his Honour had jurisdiction 'to determine whether there is jurisdiction and that is a necessary step. So he had to consider whether the contract was one amenable to the rules of the section and he found that it was not.' While his Honour had before him a contract 'whereby a person performed work in an industry', the second element of s106(1), was in his view not present, his Honour's final conclusion turning entirely on whether or not the contract was an unfair one. 107 As to the work of s106(2) of the Act, it was submitted that it ought to be read so as to include conduct which involved a purported variation to a contract, which was not agreed. This, it was submitted, illustrated the error into which his Honour had fallen. A unilateral variation to a part of the employment relationship which did not form part of the contract, such as a policy, could be found unfair on his Honour' approach and amenable to relief under s106, but a unilateral variation to a contractual term could not. This would flow from the fact that the employer was entitled to unilaterally vary the policy, but not the contract. Such an odd result would be inconsistent with the section. 108 It was also submitted that his Honour's review of the decision in Walker was not a full and fair one and that his Honour's approach was now even more wrong than when rejected by the Court of Appeal in that case. Further, his Honour was bound by the judgment of the Full bench in Dun , even though in reality he declined to follow it. This position was particularly relevant to the question of leave, which it was submitted would be granted, because the result of his Honour's approach had been to cast doubt upon what was thought to be a settled approach in the Court to the jurisdiction under s106 of the Act. 109 It followed, so it was submitted, that the appeal would be upheld and the question of the merit of the claim would be determined by the appeal bench, which would make the orders earlier set out, quantified at the sum of $250,000. However, after the joinder motion was dismissed, this submission was withdrawn. No final orders on the application were sought on appeal. For the respondent 110 It was submitted by Mr Fernon , that in reality this appeal raised but one issue, namely whether unfair conduct was of itself sufficient to warrant the making of orders against a respondent under s106 of the Act. 111 In this case Maidment J found that the contract was not unfair. No error of law emerged from that finding and no challenge was made on appeal to the findings of fact which underpinned it. It followed, so it was submitted, that leave to appeal and the appeal would both be refused. 112 Reference was made to Abboud v State of New South Wales 92 IR 32 at 42, where it was observed that what had to be demonstrated was: 'The principles to be applied by the Full Bench reviewing findings of fact made by a trial judge below are clear. An appeal brought under Part 7 of Chapter 4 of the Act will generally attract the normal principles which apply to appeals stricto sensu on questions of fact and/or law: see Re Solicitors (State) Award (No 3) (1996) 72 IR 225 at 234 and Stone Microsystems (Aust) Pty Ltd v Kwong & Datamax Pty Ltd (1997) 42 NSWLR 160 at 163; 85 IR 237 at 238. In the case of an appeal from a judge in the strict sense, the appellate court will substitute its own judgments only if the trial judge has fallen into error of law or has made a finding of fact which is clearly wrong or are not reasonably open on the evidence: Camilleri's Stock Feeds Pty Ltd v Environmental Protection Authority (1993) 32 NSWLR 683 at 688. Otherwise, the appellate court should not intervene.' 113 Here, the appellant had not demonstrated that any such finding of fact made by Maidment J was either wrong or clearly wrong. Indeed, the factual findings were not challenged, either as to the terms of the contract or its repudiation; they were embraced by the appellant. 114 It followed that the approach of the appellant was misconceived. The appeal was advanced on the basis that while reliance was placed on his Honour's findings, particularly as to unfair conduct, it was argued that a finding that the respondent's conduct had been unfair was all that was required for relief under s106 to be granted. This, it was submitted, had never had been the approach adopted to s106 and its predecessors, either by this Court and its predecessors, or by the Court of Appeal and did not reflect the law. 115 It had never been accepted, so it was submitted, that if a contract was fair, but conduct of a party to the contract was inconsistent, indeed repugnant to its terms, that relief would be granted under s106. More was required, but had not been advanced by the appellant in this case. 116 Mr Fernon emphasised that even if on the facts in this case the appellant's claim could have been approached in a different way, so as to properly identify unfair aspects of the contract, the case had not been argued on that basis, either at first instance or on appeal. The Court now had to attend to the case as advanced by the appellant. 117 It was also submitted that in any case brought under s106 the unfairness alleged had to be identified, established on the evidence and then, in case of alleged unfair conduct, the contract examined in order to identify whether it was unfair, having regard both to what the contract provided and what it failed to prevent. If such unfair conduct did not demonstrate an unfair contract, the claim could not succeed. In the case of conduct which was in breach of contract, as here, a finding that the contract had been breached would not alone provide an answer to the question of whether the contract was unfair. 118 In this case, the finding was that the conduct of unilaterally varying the contract was unfair and was also was repugnant to the contract. That finding was reasonably open on the evidence and not challenged on appeal. His Honour concluded that the contract, which did not permit the unfair conduct of unilaterally varying the contract, was not unfair. Even if the Full Bench would have reached a different conclusion as a matter of discretion had it heard the case, it had to attend to the complaint advanced by the appellant on appeal, namely that the finding of unfair conduct of itself should have led to relief under s106. 119 It was submitted that the same case had been advanced at first instance, where the complaint identified from the outset was the respondent's conduct in seeking unilaterally to alter the commission structure. The question which then arose was whether the contract was also unfair. Maidment J found that the contract did not in fact permit the commission structure to be so altered and that the contract, on that basis, was not unfair. The appeal did not attack the finding that the contract was not unfair, but rather his Honour's refusal to grant relief upon the finding of unfair conduct alone. 120 As to the submission that the contract in question in proceedings such as this should be regarded as the 'employment relationship', it was submitted that in order to succeed under s106, the contract or arrangement in question must be identified so that its fairness could be examined. The contract could not be something 'amorphous and physically changing, forever varying'. Here the contract identified at the outset was the employment contract, which it was alleged permitted the variation of the commission arrangement. His Honour rejected that construction, finding the respondent's conduct was inimical to the contract, a finding not challenged on appeal. 121 As to his Honour's approach to the decision in Dun , it was submitted that it was proper for his Honour to consider the status of the cases in Bass, Colaco and Chowdhury, because those cases had concerned circumstances involving breach of contract and in Dun , the Full Bench had stated in effect that they were not good law. Maidment J concluded that none of these cases had a bearing on the question before him and followed the approach of Kirby P and Sheller JA in Walker . 122 It was submitted that his Honour could not be criticised for this approach, given the nature of the case brought in these proceedings. Rather, he would have been criticised if he had not given a full explanation of his approach. His Honour's conclusion, after analysis, to follow the approach of the court of Appeal in Walker , was correct. 123 It was also submitted that the comments of the Full Bench in Dun regarding Bass, Colaco and Chowdhury were obiter dicta, because the decision not to grant leave to appeal was made because no relevant error had been demonstrated in the reasoning of the trial judge, who had not referred to those cases. Maidment J had been correct in observing that the Full Bench did not explain what reliance counsel had placed in submissions upon those cases and why they could not stand with Walker and other, later decided cases. The comments made by the Full Bench however were in rejection of those submissions. It followed that they were not necessary for the decision in Dun and were thus obiter. 124 In any event it was submitted that the propositions for which Bass, Colaco and Chowdhury stood were not plain. To the extent that they stood for the proposition that unfairness of a contract cannot arise where the only real ground of unfairness was a breach of contract, the cases may be overstated. What had to be considered was whether a contract allows or provides for or does not prevent unfair conduct or in other words, whether the unfair conduct was consistent with the contract. 125 It followed also, so it was submitted, that to the extent that in these three cases these were determined issues at a preliminary hearing, that approach might not have been appropriate. (Cf Nagle v Tilburg (1993) 51 IR 8). 126 It was further submitted that other cases such as Walker, Rothmans, Harcourt Brace and Stone Microsystems , made clear that unfairness may exist in a contract where there is a breach. Whether that is so in a particular case will depend upon the ground of unfairness alleged and the evidence led to establish the allegation. Breach of contract does not preclude unfairness, but these cases all demonstrated that it was something other than the breach of contract itself, which demonstrated the unfairness found. 127 It was also submitted that in the event the appeal was upheld, the matter should be referred back to Maidment J for further hearing, so as also to enable his Honour to deal with the surrounding circumstances of the termination, which had been relied upon by the respondents below, but had not been dealt with by his Honour, because of the way he had dealt with the application of the appellant.

Reply 128 In reply it was submitted that the respondent was not entitled to reagitate factual matters determined against the respondent at first instance by Maidment J, there having been no appeal from his Honour's judgment by the respondent. It followed that the submission that the matter should be returned to his Honour to further consider surrounding circumstances would be rejected. 129 It was also submitted that all of the factual matters adverted to by the respondent had been relied upon at first instance in order to demonstrate that the respondent's conduct in unilaterally reducing the remuneration in question was not unfair. His Honour had made a clear finding of unfair conduct, which was open on the material, as was conceded by counsel for the respondent. In those circumstances the matter would not be remitted. 130 It was further submitted that the respondent's submissions sought 'to avoid the inevitable head on conflict between the approach of his Honour in the judgment under appeal and the approach of the Full bench in Dun '. His Honour's analysis of the 'impugned cases' was pivotal to the conclusion reached; comprised the bulk of his judgment and so could not be pushed aside. 131 Reference was made to the decision of Marks J in Robbie v Dun & Bradsreet (Australia) Pty Ltd (unreported, Marks J, 25 November 1998), to the effect that post contractual conduct per se could render a contract of employment unfair. This was irreconcilable with the approach in Bass . The Full Bench in Dun rejected an attack on this decision, with reliance placed on Bass in support. It followed that Bass was no longer good law. In this case, Maidment J refused to follow the decision in Dun and had followed the approach in Bass . In doing so, he had erred. 132 It was further submitted that there was no relevant difference in the facts of this case and those in Robbie . The Full Bench in Dun confirmed the principle enunciated by Marks J in Robbie , that conduct which amounted to a breach of contract provided a basis for relief under the section. Maidment J refused to follow that approach. The statement that he was adopting the approach in Walker was wrong, because it was not there suggested that the employment contract permitted the unfair conduct. 133 The approach in Walker was that conduct which was unfair and in breach of the contract, "even though not permitted by the terms of that contract (which would be a rare case indeed), would nevertheless render such contract unfair and amenable to relief." The approach of Maidment J was tinged with unreality, because 'employment contracts will rarely, if ever, contain terms which permit unfair conduct by one party against the other'. It followed that conduct had much greater relevance than simply providing evidence of the contract's unfairness. 134 It followed that the appeal should be upheld and the matter remitted to a single member. CONSIDERATION 135 For reasons which we develop below, we are satisfied that leave to appeal should be granted in this case.

The decision in Dun 136 We deal firstly with the arguments advanced in relation to his Honour's approach to the decision in Dun . The Full Bench in Dun summarised the conclusions reached by Marks J at first instance as: 'His Honour reached certain conclusions which he summarised as follows: "For the reasons earlier set out I find that the contract of employment between the applicant and the respondent which was in existence at all material times was unfair because: 1. A provision by which the contract of employment could be terminated by the respondent giving the applicant one month's notice in writing in all circumstances other than those justifying summary dismissal was unfair at the date of termination of the applicant's employment. 2. The conduct of the respondent in refusing to permit the applicant to be granted annual leave for the purpose of attending at Hamilton Island for six working days in August and September 1997 was unfair. 3. The conduct of the respondent in terminating the applicant's employment without giving reasonable notice and in precluding the applicant from receiving long service leave entitlement and other entitlements calculated by reference to a period of reasonable notice was unfair." (p151) 137 Marks J made orders for variation of the contract of employment to provide for termination on 5 months' notice, or payment in lieu thereof. The notice of appeal from his decision raised four questions. The Full Bench heard the appellant's case in full on both the leave application and the substantive appeal. Leave to appeal was declined. In doing so the Court departed from its general practice of not giving reasons for refusing such leave. 138 The Full Bench concluded at pp151-152 that they were: '…unable to discern any issue of principle, or in the application of the settled law by his Honour, which requires appellate review. Some very specific criticisms were made of his Honour's reasoning but we consider that when viewed in the totality of his Honour's judgment and the conclusions, as set out above, no relevant error was demonstrated. The very close analysis by counsel of certain aspects of the challenged judgment did not, on balance, demonstrate error requiring correction. Here, we must attend, as earlier observed, to the totality of the judgment and assess specific criticisms directed to particular parts of the judgment and reasoning process in that way.' 139 The Full Bench also made some observations on two particular matters upon which counsel for the appellant had relied in seeking to demonstrate the error into which it had been argued that Marks J had fallen. The second was what was described in the judgment as counsel's 'fundamental reliance upon' Bass , Colaco and Chowdhury. 140 Maidment J observed that 'it is difficult to comprehend the motivation to pass upon the correctness' of those cases. The argument so advanced on appeal in Dun and its rejection by the Full Court explains the 'motivation' for the Court passing upon the correctness of those decisions. Those three authorities were relied upon by the appellant in order to demonstrate the errors in the judgment of Marks J, which it was argued required correction on appeal. The Full Bench refused leave to appeal, having taken the view that no such errors had been demonstrated and that the approach advanced for the appellant on the basis of these authorities was inconsistent with the judgments of the Court of Appeal in Walker and Rothmans and judgments given in this Court and its predecessors in later cases, including National Distribution Services and Kellett . 141 Maidment J could not discern why the Full Bench in Dun took the view that Bass, Colaco and Chowdhury no longer represented correct statements of the law, available to be relied upon in proceedings brought under s106 of the Act. The matter has again been fully argued before us. We take a similar view to that reached by the Full Bench in Dun, for reasons which can be shortly stated by reference to what was decided in those three earlier cases. 142 In Bass Maidment J dismissed the application there brought under s88F after a preliminary hearing, accepting the argument advanced by the respondent that 'as the contract contained an implied term requiring reasonable notice of termination of it, the relief sought was in reality compensation for breach of that term.'(p172). In doing so, he rejected the submission of Mr Goot, then appearing for the applicant, that "as the contract was one whereby a person performed work in any industry the Commission, without more, was empowered by s88F to grant relief. He submitted the issue advanced by Mr Reitano as being jurisdictional goes to discretion not to jurisdiction and that it is inappropriate to decide such an issue in limine." His Honour took the view that the Court was being asked to conclude that an implied term as to reasonable notice was unfair, within the meaning of s88F, which his Honour found himself unable to do. For that reason he dismissed the application. 143 In so approaching the matter on a preliminary basis, his Honour adopted an approach seemingly inconsistent with that later discussed by a Full Bench of the Industrial Court in Nagle v Tilburg (1993) 51 IR 8 at pp11-13 and more recently in Bell v Macquarie Bank Ltd (1999) 87 IR 126 at 131. That approach is also inconsistent with the approach to s106 discussed in Westfield v Helprin (1997) 82 IR 411at 433: 'It is not open to us to conclude in any general way that an employment contract containing terms requiring the giving of reasonable notice could simply be excluded from review if an application for an order declaring void or varying the contract was made under s275. This must be so whether the notice provisions of the contract resulted from express agreement or from implication by the operation of the common law. To adopt any other approach might involve a constructive refusal to exercise the jurisdiction conferred by the section. (See Svecova ­v­ Industrial Commission of New South Wales and Anor (1991) 39 IR 328 at p342 per Meagher JA.)' 144 Westfield , applied the approach of Kirby and Sheller JA in Walker to the circumstances of a case where the contract in question contained an implied term that reasonable notice of termination of employment be given. In the circumstances of that case, no monetary orders were made in relation to the payment of notice. In Harcourt Brace & Co (Australia) Pty Ltd v Cory (1998) 81 IR 321 and in David Jones Limited v Cukeric (1997) 78 IR 430, where similar approaches were taken, consideration of the cases advanced led to the making of monetary orders in favour of the appellant in each case as to notice, the contracts in question having both been found to offend the section. In Cukeric this result followed notwithstanding that 12 months payment in lieu of notice had been made by the respondent in order to satisfy the obligation implied into the contract of employment to give reasonable notice of termination. 145 In the light of these authorities it can no longer be open to doubt that a contract containing a term implied by law cannot thereby be precluded from review under s106 of the Act. Conduct which is in breach of an implied term may, or may not, in the particular circumstances of a case demonstrate the unfairness of the contract in question. The parties must be heard as to such claims. We note that, unlike his approach in Bass , in this case Maidment J heard the appellant's claim. 146 In Colaco, an application was again heard by his Honour that the claim be dismissed at preliminary point, as it was in reality seeking damages for wrongful dismissal. This was a case where not only the failure to give reasonable notice was in issue, but also claims as to severance pay and superannuation. His Honour did not dismiss this claim, taking the view that to do so would be premature, as the appellant intended to put on further evidence and because at least some of the claim then seemed to be within jurisdiction. His Honour, however repeated the views which he had expressed in Bass, as to the unlikelihood of any remedy being available under s88F in respect of any aspect of the case for which a remedy in damages for breach of the implied term as to reasonable notice was elsewhere available. It follows that while not suffering from all of the difficulties inherent in the decision in Bass , in the final analysis his Honour's approach in Colaco to circumstances which he thought might found an action for breach of contract, suffers from the same difficulties as that in Bass . 147 In Chowdhury, Cullen J was also dealing with a preliminary point concerning a contract of employment with an implied term as to reasonable notice. In this case however the appellant also relied upon an alleged 'express collateral arrangement', requiring the giving of 3 months' notice of termination. His Honour dismissed the application, taking the view that s88F was not 'intended to remove from the common law jurisdiction the remedy of damages for repudiation of the contract by an employer or to provide an alternative to such jurisdiction.' His Honour concluded at p453: '(a) The applicant's contract of employment with the respondent does not fall within any one or more of the five paragraphs of s88F(1) of the Industrial Arbitration Act so as to confer jurisdiction on the Commission to hear the applicant; and

(b) In view of the finding which I have made in regard to jurisdiction, it is not necessary for me to consider whether as a matter of discretion, the Commission ought to make orders in the applicant's favour.' 148 This approach suffers from the same difficulties as that adopted by Maidment J in Bass . Not only was the application dismissed at a preliminary stage of the hearing on a basis inconsistent with the approaches in Nagle and Westfield , his Honour also adopted a different approach to that of Maidment J in Colaco , where at the least the question of whether the contract offended s88F was left to be determined on all of the evidence led at the hearing. Here the appellant's alternative claim as to an express collateral arrangement as to notice was also dismissed without hearing the case which the appellant sought to advance. No reasons for that approach were given. 149 It follows that as was observed in Dun , the view that the decisions in Bass , Colaco and Chowdhury remain good law consistent with the provisions of s106 of the Act is no longer available. The appeal as to this aspect of Maidment J's decision must be upheld. Matters of construction 150 We turn to consider the second error into which it was submitted that Maidment J fell. It is necessary to begin consideration of this argument with the construction of s106 of the Act, particularly the meaning of the word 'contract'. 151 Section 106 of the Act provides: '(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.' 152 'Contract' is defined in s105 as: '… any contract or arrangement, or any related condition or collateral arrangement, but does not include an industrial instrument.' 153 'Unfair contract' is defined in s105 as: '(a) that is unfair, harsh or unconscionable, 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.' 154 The word 'contract', as used in s106 of the Act is not, in our view, capable of being construed in the way advanced for the appellant, namely, that in the case of an employment contract, it is in effect a synonym for the concept of an 'employment relationship including the conduct of the parties to that relationship.' 155 The proper approach to statutory construction is well known and has often been the subject of discussion in decisions of this Court, the Commission and their predecessors. (See recently, for example, Shead v Summit Western Pty Ltd , (1998) 81 IR 347 at 356-57). The starting point is that remedial or beneficial legislation such as the Act will be construed generously, so as to remedy the mischief at which it is directed and that words which are not defined are to be given their ordinary and natural meaning. 156 It is also assumed that words are used consistently throughout a statute. Such consistency of use is plainly not the way in which the word 'contract' is used throughout the Act. Specifically, that word is defined in s105, albeit by reference to itself in a somewhat circular fashion, namely, 'Contract means any contract etc'. 157 What is inherent in this approach is that in s105 'contract' is defined by reference to its ordinary meaning, which is expanded by the inclusion of the added notions of 'arrangement, or any related condition or collateral arrangement'. 158 As to the ordinary meaning of the word, 'contract', that word is defined in the Oxford and Macquarie dictionaries respectively as: The Compact Oxford English Dictionary, Second Edition at page 834

1.a. A mutual agreement between two or more parties that something shall be done or forborne by one or both; a compact, a convenient, a bargain; esp such as has legal effects (see 2); a convenent between States 2. In a legal sense: An agreement enforceable by law. a. An accepted promise to do or forbear; b. An agreement which effects a transfer of property; a conveyance. The Macquarie Dictionary, Second Edition at page 388

1 . an agreement between two or more parties for the doing or not doing of some definite thing. 2 . An agreement enforceable by law. 3 . The writing containing such an agreement. 4 . The division of law dealing with contracts. 159 There is in our view no warrant for any departure from the ordinary meaning of the word 'contract' in the definition in s105. The use of the word 'means' in a statutory definition generally imports the notion that the definition is an exhaustive one. Given the use of the word 'means' in the definition of contract, it would be expected that had it been intended that in the case of an employment contract, the whole of the relationship between the parties going beyond their contract and including their conduct, was to be included in the definition, that this would be dealt with expressly in the definition itself. That it was not, militates against the construction urged. (See generally Pearce and Geddes Statutory Interpretation in Australia 4th ed at para [6.36]). 160 Further support for this approach is to be found in the rest of the definition in s105 and its history. Sections 105 and 106 of the Act are somewhat differently structured to their predecessors in s275 of the 1991 Act and s88F of the 1940 Act. The meaning of the words used in the balance of the definition of contract, namely 'or arrangement, or any related condition or collateral arrangement', have been the subject of much consideration in the authorities. Cases such as Legal & General Assurance Society Ltd v Stock (1993) 49 IR 464 at 480-81, Smith v Craig Mostyn & Co Pty Limted (1984) 8 IR 334 at 347-8; Cukeric at 452-3 and Stone Microsystems (Aust) Pty Ltd v Chin Kwun Kwong (unreported 8 August 1996 at 99-102) have particularly dealt with the meaning of the word 'arrangement'. 161 We see no warrant for any departure from the approaches adopted in those cases to the meaning of the word arrangement. That approach is also consistent with that recently taken by another Full Bench in Bell v Macquarie Bank Ltd (No 4) (1999) 93 IR 191 at 206-7, albeit in a slightly different context. 162 It is evident that the long understood meaning of the word "arrangement' as used in s105 is broad enough to encompass the aspects of an employment relationship which Mr Murphy sought to have embraced in the word 'contract', including in an appropriate case, the parties' conduct. Pertinently, in Legal & General it was observed by the Full Industrial Court at 480-1 that: 'The authorities make clear that the term "arrangement" where used in the section is a wide one and encompasses transactions or plans which are not legally enforceable agreements. The following principles may be drawn from decided cases in the matter in relation to the ambit and reach of the term "arrangement" where used in the section ( Unconscionable Contracts and Economic Duress - Peter M Hall, at 55-56). "(1) The word "arrangement" in its ordinary meaning and particular statutory context is a word of much wider import than the word "contract". (2) An "arrangement" will be found to exist where there is a bilateral or multilateral plan or concerted action to bring about a particular result. (3) An "arrangement" may envisage a transaction in the nature of a bargain which may not be legally binding or enforceable, something in the nature of an understanding between two or more persons. (4) The section speaks of an arrangement of a particular kind, namely, an arrangement whereby a person performs work in an industry, that is, a transaction which directly leads to the performance of work in an industry. (5) The term "arrangement" possessing a broad and extensive meaning may be found disclosed in a document comprising or specifying its terms, or there may be no document specifying the arrangement in which event resort will be had to oral evidence of discussions whilst in other cases an arrangement may be implied or inferred from the circumstances or the conduct of the parties. An arrangement may be discovered in a combination of documentary or verbal communications and the conduct of the parties. The relationship between the parties may itself manifest an arrangement. (6) There may exist two separate contracts each forming part of a specific arrangement and together constituting the means by which it is effectuated so as to produce particular results and whereby a person performs work in an industry. (7) The section accordingly comprehends not only the initial plans but all transactions by which the arrangement is carried into effect. It applies to any dealing the purpose or the effect of which is to achieve a situation as a consequence of which or wholly or partly in fulfilment of which a person performs work in an industry. (8) The term "arrangement" embraces a situation where there exists two or more separate contracts which, notwithstanding their separateness, are, in a particular factual context, so sufficiently associated with each other in a practical sense as together to constitute an arrangement of which each contract is a constituent part. (9) The arrangement, including the relationship leading to the performance of work and another contract, need not necessarily have sprung into existence at the same time. (See Custom Credit Corporation Ltd v. Goldsmith [1976] AR 98 at 131; Hall v. Allison Clint Floral Delivery Pty Ltd [1971] AR 56; Re Mestrom and Allison Clint Floral Delivery Pty Ltd (No.2) [1971] AR 216; Cosgrove v. International Opal Pty Ltd [1977] AR 751; Barham v. Stevenson [1975] 1 NSWLR 31 and Smith v. Craig Mostyn & Co. Pty Ltd [1984] 2 NSWLR 393; 8 IR 344.) 163 Support for this approach to the construction of the word contract as including the parties' conduct in an employment contract was sought by Mr Murphy in the observations of Hungerford J in Lumley Life at p71, later approved in Bush Boake at pp14-15: 'The employment relationship, I have to say, is a serious relationship with important incidents for both parties to it. It is a consensual relationship based on contract and with respective rights and obligations. It should not, I think, operate, or to be so seen, in practice in a way which permits one party, here the employer, to act in a one-sided manner contrary to the legitimate expectations and understandings of the other party, here the employee, and particularly where such action damages or detrimentally affects the career interests of the employee. Employees have a corresponding duty to act with fidelity and good faith.' 164 His Honour's observations were not directed to the construction of the word 'contract' in s105. Our approach to that definition does not detract from these observations, indeed we agree with them. It is unarguable that an employment relationship is a serious, consensual relationship based on contract, under which the parties have mutual rights and obligations. That does not, however, warrant any departure from the definition of 'contract' in s105 of the Act on the basis argued. 165 We finally observe that we apprehend that one reason for the argument advanced for the appellant as to the meaning of the word 'contract' was the difficulties which flowed from the appellant's argument that all that was required in order for relief to flow under s106, was a finding that there had been unfair conduct. We now turn to that argument. Is a finding of unfair conduct sufficient to warrant relief under s106, without any unfair aspect of the contract being identified? 166 The parties debated whether or not it is necessary for a finding to be made on the evidence that a contract is unfair before relief under s106 is available, or whether a finding of unfair conduct is sufficient. 167 We observe at this point that it cannot be overlooked that what any case brought under s106 is concerned with is the allegation made in the initiating summons, be it that there is an unfair contract or arrangement or related condition or collateral arrangement which arises for the Court's consideration. Here, it was the employment contract between the parties which was the subject of the case brought, not any wider arrangement. 168 In that context we turn to the submission advanced by Mr Fernon, that if a contract is not found to be unfair on the evidence brought in a particular case, then no relief can flow under s106. It is unarguable that if, having taken into account the evidence led as to the conduct of the parties, any variation to the contract or any other relevant matter, to use the words of s106(2), the Court concludes that the particular contract or arrangement in question in the proceedings brought under s106 is not an 'unfair contract' as defined in s105 of the Act, the application must fail. 169 The argument advanced by Mr Murphy for the appellant was that Maidment J had erred in the conclusion which he had reached, because his Honour had 'persisted with the approach that unfair conduct is, in itself, not capable of being the subject of relief pursuant to s106, but that unfairness in a contract may be evidenced by unfair conduct which was permitted by the contract.' We reject this argument. Section 106(2) is concerned with conduct of the parties which reveals how it is that the contract in question is unfair, either when entered or subsequently. It has not, however, done away with the need for a relevant finding of unfairness, so far as the contract in question is concerned. 170 Section 106 does not give the Court power to make any orders if the contract in question is not demonstrated on the evidence to be unfair, as defined. That is what the section is concerned with. The conduct of parties to the contract is a relevant consideration, directed however to the determination of whether, and how, the contract rather than the conduct is, in the words of s105: (a) unfair, harsh or unconscionable, or

(c) provides a total remuneration that is less than a person performing the work would receive as an employee performing the work, or

(d) designed to, or does, avoid the provisions of an industrial instrument 171 It is the 'contract or arrangement, or any related condition or collateral arrangement' identified in the initiating summons which at the end of the day must be the subject of the relevant findings. This approach has often been stated by this Court, most recently perhaps in Bush Boake, in the context of the enactment of s109A of the Act, which is concerned with claims concerning unfair dismissal. It was there observed by the Full Court at p35: 'What emerges from the above authorities, we think, is the now settled view that s.106 (as with the previous s.88F of the 1940 Act and s.275 of the 1991 Act) is directed to an impugned contract of employment, whether existing or terminated, as to the fairness of its express or implied terms. Such unfairness will depend upon the facts of each particular case by focusing attention on the contractual relationship between a particular employer and employee and where the unfairness may arise from the terms of the contract itself, the surrounding circumstances and/or the manner of performance or operation of the contract. The section, we emphasise, is not concerned with re-establishing an employment relationship which has ended nor with compensating an employee for the loss of his employment contract. In other words, the section is properly concerned with the fairness of the terms of a contract of employment in its various respects and, if relevantly found to be unfair, to provide remedial relief by avoiding or varying the terms of that contract and to order the payment of money in connection with any contract so avoided or varied as is considered just in the circumstances of the case.' 172 It follows that where a complaint brought under s106 alleges that there has been unfair conduct which throws light upon the unfairness of a particular contract or arrangement, consideration must be given as to whether or not on the evidence, the contract falls within the statutory definition in s105. If the only complaint advanced in a case brought however, is that the conduct was unfair, it is difficult to see how a case under s106 could be made out, unless the particular conduct itself formed a part of an arrangement which is attacked under the section. No such case was sought to be established here. 173 Had the legislature intended that unfair conduct of itself would be sufficient to warrant the grant of relief under s106(5) of the Act, it is to be expected that the section would have said so expressly. It does not. Section 106(1) is concerned with unfair contracts, which are defined in the way in which we have already noted. Section 106(2) permits regard to be had to conduct and the other matters specified, in determining whether the contract in question is unfair. Section 106(2) does not, however, alter the need for a relevant finding, on the basis of evidence advanced, that the contract is one which falls within the definition of unfair contract. The decision in Dun is not authority for such a proposition. 174 The conclusion that a finding of unfair conduct is not sufficient for relief to flow under s106 is also supported by s106(5), which provides: '(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.' 175 The language of this provision is similar to that of s88F of the Industrial Arbitration Act 1940, considered by the High Court in Brown v Rezitis (1971) 127 CLR 157. Barwick CJ observed as to the power to grant relief, at p165: 'The problem is to ascertain the limitation by construction of the section. It seems to me that the expression "in connection with" the contract or arrangement varied or avoided provides the necessary limitation as to the nature of the orders for payment of money which can be made and as to the person against whom they may be made. The draftsmanship of the section is inadequate: but I think the expressed intention as to this limitation can be derived from the sub-section read as a whole. Whilst it can be said that the expression "in connection with" is of wide import, it does emphasize the need for a close connection between the order made and the contract or arrangement varied or avoided. In my opinion, the power to make an order for the payment of money is at best no more than a power to make such an order as can reasonably be thought to have a real connection with the making, variation or avoidance of the contract or arrangement which has been varied or avoided. It may in truth be limited to a power to make an order for payment of money which has in fact a real connection with the making, variation or avoidance of the contract or arrangement. However, in either case it will, of course, include power to make an order for payment of money which has been paid or which was payable under the contract arrangements themselves. But, in my opinion, the power will not be limited to the making of such orders. It will extend to ordering the payment of money where the order on the larger view of the jurisdiction given by the sub-section could be considered to be appropriate to effect wholly or partially the restitution of the parties to their former position upon the variation or avoidance of the contract or arrangement.' 176 It follows that the relief which s106(5) contemplates, is relief flowing from the contract found unfair on the evidence and not merely any unfair conduct, which may or may not demonstrate the unfairness of the contract under review. 177 Here the conduct complained of was found by his Honour to be in breach of the contract. The appellant did not appeal from that finding. There is of course every possibility that in the circumstances of a particular case conduct constituting a breach of a term of a contract of employment will also throw light on the unfairness of the contract or arrangement in question, which is thereby amenable to relief under s106 of the Act. Westfield, Harcourt Brace and Cukeric all fell into this class of cases. 178 As we have noted these earlier cases are also authorities for the proposition that a refusal to consider the case sought to be advanced by an applicant under s106 of the Act, because conduct complained of also amounts to a breach of the contract, is an error which may well amount to a refusal to exercise jurisdiction. The complaint advanced at first instance 179 In determining this aspect of the appeal it is necessary to have regard to the grounds advanced in the initiating summons. They were: 'The Applicant claims that the Contract between the Applicant and the Respondent was: (a) unfair; (b) harsh and unconscionable; and (c) against the public interest. upon the grounds stated hereunder: 1. The Applicant commenced employment with the Respondent on 20 September 1995 in the position of Account Executive. The Applicant has been in continuous employment with the Respondent since that date. 2. The Applicant relocated from Chicago, United States of America to Sydney, New South Wales, Australia for the sole purpose of commencing employment with the Respondent. 3. The Respondent sponsored the Applicant as an immigrant with specialised skills. 4. The Respondent offered the terms and conditions of employment to the Applicant by letter dated 10 August 1995. The Applicant accepted those terms and conditions of employment. 5. From September 1995, the Applicant's position has been titled "State Sales Manager". 6. The Respondent summarily terminated the employment of the Applicant by letter dated 18 August 1998 and affirmed by e-mail dated 25 August 1998. The termination took effect and on and from 1 September 1998. 7. The termination of the contract by the Respondent effected: (a) without notice, (b) in a manner that denied the Applicant adequate compensation in the form of payment in lieu of notice on the termination of employment, (c) in a manner that denied the Applicant procedural fairness, (d) in a manner that denied the Applicant an opportunity to seek legal advice, (e) in a manner where the Respondent advised the Applicant that the termination had occurred and "There is no negotiation", (f) through the exercise by the Respondent of a dominant negotiating position. 8. The Contract failed to protect the Applicant against a termination of contract that was harsh, unfair and unconscionable, and against the public interest, and the Contract failed to provide for the payment of adequate compensation to the Applicant upon the termination of the contract. 9. At all relevant times, the Respondent was in the dominant bargaining and negotiating position with respect to the Applicant. The Respondent used the said dominant bargaining position for its benefit and to the detriment of the Applicant. 10. The Respondent used that dominant barraging position to offer the Applicant a new contract of employment to commence on 1 September 1998 with a different and significantly lower remuneration package including a lower base salary and a significantly lower commission payment being a capped amount and the removal of certain benefits relating to the total motor vehicle package which under the Contract included the provision and maintenance of a motor vehicle. The Applicant was unable to accept the new contract of employment because of the reductions of payment and benefits in the proposed new contract when compared with the Contract under which he was employed prior to the termination. 11. Such other grounds and reasons as may seem just to the Commission.' 180 His Honour's conclusion on the case argued before him was that the contract in question was a fair one, permitting neither the unilateral reduction of the applicant's remuneration nor the termination of the contract without fair notice. He concluded that the respondent's conduct in unilaterally varying the commission arrangement was unfair, or in the words of Sheller JA in Walker, a failure to comply with the terms of a fair contract. 181 In so concluding, Maidment J rejected the argument advanced for the applicant, that the absence of fair termination procedures rendered the contract unfair, because on his Honour's approach, the case was not one of termination by the employer following deficient termination procedures. His Honour also took the view that the applicant would have been entitled to commission payments during the period of notice, rejecting the case of the applicant, that the contract was unfair because after the termination the respondent would have received the benefits of substantial sales due to the efforts of the applicant, without payment of any commission. 182 His Honour observed at p18 'As a matter of discretion and assuming statutory authority to do so, I will not search for a deficiency in the contract in order to found power to award the damages which flow from the breach of the contract. Nor will I rectify under s.106(1) a perceived deficiency in the contract from which no damage resulted in order, assuming statutory authority, to make an order under s.106(5) in respect of the damage which flowed from the breach of the contract by CSP. To do so in either case would effect an improper fiction.' 183 The appellant did not complain that his Honour had erred in the conclusion which he had reached that the respondent had repudiated the contract. Neither party advanced this argument at first instance, as his Honour's judgment makes plain. The first ground of appeal against his Honour's judgment, which went to this aspect of his Honour's judgment was not developed much in argument, given the parties' arguments in relation to the proper construction of the Act. Nevertheless it was plain that the parties joined issued as to this matter. That ground provided: 'In determining the claim by the appellant, his Honour erred in finding that the repudiation of a contract of employment by one party cannot be properly categorised as a termination of employment where the other party accepts the repudiation by withdrawing from the contract. In so doing his Honour failed to properly apply the Full Bench decision of Allison v Bega Valley Council 63 IR 68. Had his Honour properly applied Allison , he should have found that the employment of the Appellant was brought to an end by the actions of the Respondent.' 184 The evidence was that the respondent unilaterally varied the contract of employment, despite the appellant's objections, on 1 September. Thereafter the appellant worked on the new basis which the respondent had unilaterally imposed While his solicitors later asserted, on 8 September, that the appellant had been constructively dismissed by the respondent on 31 August, that was a view not shared by the respondent, given that the appellant had not been dismissed and remained at work. On 8 September the appellant was still working upon the new terms and continued to do so for a further two days. It was not until 10 September that the appellant left the respondent's employ, albeit without saying anything at all to the respondent about his departure or the reasons for it. 185 It follows, in accordance with the analysis of Bleby J in Advertiser Newspapers Pty Ltd v Industrial Relations Commission of South Australia and Anor (1999) 90 IR 211 at 217 -8, that the respondent's repudiation of the contract as at 1 September was not accepted by the appellant and that the contract remained on foot until 10 September, when the appellant left. The appellant thereby had a cause of action for damages at common law in relation to the respondent's breach of the contract, the appellant's damages having been mitigated by the work he performed between 1 and 10 September. The termination of the contract on 10 September following upon the appellant's departure after he received payment on the new basis for the first time plainly amounted to a constructive dismissal, in accordance with the approach in Allison v Bega Valley Council (1995) 63 IR 68, and not an abandonment of employment as the respondent put. 186 A consideration of the fairness of the contract of employment in the light of that conduct arose before Maidment J, given the claim advanced in the summons. The fairness of the contract, as unilaterally varied by the respondent, arose for examination. His Honour did not however approach the matter in that way, but concluded that the respondent's actions amounted to a breach of the contract, but not so as to make the contract thereby unfair. In concluding that this case was one of 'repudiation and not a case of termination by the employer', his Honour was in error. His refusal to consider the case advanced by the applicant, in the light of that conclusion involved a further error, which, as the parties agreed in their submissions, must lead to the appeal being upheld. 187 In so concluding we emphasise that what must be demonstrated, in every case including this one, in the words of s106(1), is that the contract or arrangement, or related condition in collateral arrangement in question is an unfair contract, as defined in s105. This conclusion may flow from the contract 'at the time it was entered into', or because it subsequently became unfair 'because of any conduct of the parties, any variation of the contract, or any other reason.' (s106(2)). Nevertheless the unfairness of the contract, arrangement related condition or collateral arrangement itself must be established. Orders 188 For these reasons we would make the following orders:

2. The appeal is upheld other than in relation to the construction of s106 of the Act. That aspect of the appeal is dismissed.

3. The decision of Maidment J of 16 September 1999 is set aside.

4. The matter is remitted to a single judge, as allocated by the President, to hear and determine the appellant's claims on their merits and in accordance with the views expressed in this judgment on appeal.

5. The respondent shall pay the appellant's costs at first instance and on appeal, as agreed or assessed.

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