Turner, Paul v Australasian Coal & Shale Employees Federation & Anor [1984] FCA 301

Federal Court of Australia|1984-09-26|Before: Gray JJ

On 15 August 1983, Paul Turner, as applicant, commenced proceedings in the Federal Court of Australia under s.144 Conciliation and Arbitration Act 1904 ("the Act"). As against The Australasian Coal and Shale Employees Federation ("the Federation"), an organization of employees under the Act, Turner sought a declaration that he was a person who was

qualified to be an employee in the industry for which the

that order. Immediately after giving its judgment in

"In the matter of Turner, the proceedings are proceedings for the same relief on essentially

the same facts, and for the same reasons I make in that matter the same orders."

As a result, Turner's application was dismissed. Turner

appeals from the orders dismissing his application.

The facts in Turner's case are materially different

from the facts in Kennedy's case. In Turner's case, the

following statement of agreed facts was tendered, but for the

purpose of clarity, the terminology used in these reasons is

On 16 November 1982 Elcom offered employment as a junior trainee mineworker to Turner at the Wyee State Coal Mine and required him to commence work on 26 January 1983 and

Qn 30 November 19822 Turner passed a medical exaninatioen required of him by Elcom as a condition of his taking uy

In January 1983 Turner applied to the Federation for

The federation has not admitted Turner to membership.

Turner has not, at any material time, actually w 'das a miner in a coal mine or in connection with the cul and

It is a well-recognized custom and practice in the coal

and shale industry that in order to commence work in the

industry it is necessary for the person proposing to

On 19 August 1983 Elcom purported to withdraw what is

Although paragraph 1 of the statement of agreed facts states that Elcom offered employment to Turner, its

letter to him dated 16 November 1982 contained the following

"TJ wish to advise that yo2r application for the position of Junior Trainee Mine Worker at Wyee State Coal] Mine her been successful

sudject to your passing a Joint Coul Board Medical Examination."

From this, it appears that Turner had applied to Elcom for

employment. The letter of 16 November 1982 contained the

"It will also be necessary for you to contact Mr. K. Fogg, Secretary, Northern Miners' Federation regarding your employment at Wyee State Coal Mine."

The reference to the Northern Miners' Federation has been

treated as a reference to the relevant local division of the

Turner contended that a binding contract of employment existed as a result of Elcom's letter of 16 November 1982. The learned trial Judge found that a binding contract existed in relation to Kennedy. His Honour found

that Kennedy's contract contained a condition, held to be a condition precedent to the performance of the contract, because of a paragraph in a letter dated 23 November 1982, written by Elcom, offering employment to Kennedy. That

"It is necessary for you to receive a clearance froa Mr. K. Fogy, Secretary of the Northern District Miners' Federation before you may comnence employment at this mine."

It was argued on behalf of the Federation that Turner's case was the same as that of Kennedy, i.e. that any contract was subject to a condition precedent to its performance. This condition was expressed in the alternative as a condition that Turner become a member of the Federation,

representing the Federation. Counsel for the Federation adopted the conclusions of the learned trial Judge in the Kennedy case to the effect that the condition had not been fulfilled, either by the refusal of the Federation to admit Turner to membership, or because a reasonable time had elapsed before the comnencement of the proceedings without the condition having been fulfilled. [It followed from this, so the argument went, that the contract was brought to an end by failure of the condition. The learned trial Judge did not construe the condition which he found to exist in Kennedy's case as requiring Kennedy actually to be admitted to membership of the Federation before being entitled to employmenc with Elcom. His Honour was content to refer to the condition as requiring a "clear.nce"". Counsel for the Federation h2i some difficulty 1n construiag any reference to a "clearance" as involving a requirement of adrissicn to Membership. No reference to a "clearance" in this sense appears in the rules of the Federation and there is no evidence of any practice of the Federation in granting clearances to non-members or prospective members. Counsel for the Federation was forced to rest his contention upon the assumption that a clearance involves, at the least, an indication that the Federation would accept Turner as a member. No sound reason was shown, however, why the Court should accept this assumption. Even more difficult for counsel was the proposition that it was a condition of Turner's contract that he receive a clearance from the

The differences in wording between the letter to Kennedy and the letter to Turner are obvious. The letters were written by different persons on behalf of Elcom. The letter to Turner does not mention the word "clearance". It merely requires that Turner contact Mr. Fogg regarding his employment. Counsel for the Federation was forced to argue that usage in the industry attached to this requirement an obligaticn to achieve membership of, or a clearance from, the Federation. Reliance was placed upon the well-recognized custom and practice in the industry that, in order to commence work in the industry, it is necessary for the person proposing to commence work to be a member of the union covering his or her calling. Tne difficulty about attechine a trade or industry usaye to a term in a contract in the context of this case is that it 3s not shown 'hat both parties are involved in the trade or industry concerned, and that cach would be familiar wrth and accept the usage.

Indeed, Turner was seeking employment in the coal and shale

industry for the first time. There is no evidence to suggest

that he was familiar with the custom and practice alleged. For these reasons, it is not possible to construe anything in the letter of 16 November 1982 from Elcom to Turner as containing any condition that Turner be admitted to membership of or receive a clearance from the Federation before entering into employment. It follows that a contract of employment existed between Turner and Elcom on 15 August

1983, being the date Turner's application was issued.

The relevant provisions of 3.144 of the Act are set

"144.(1) A person employed in connection with an industry, or engaged in an industrial pursuit is, unless he is of general bad character, entitled, subject to payment of any amount properly payable in respect of membership, to be admitted as a member of an organization (being an organization of employees in or in connection with that industry or of employees engaged in that industrial pursuit) and to remain a member so long as he complies with the rules of the organization.

(2) Sub-section (1) does not entitle a person to be admitted as a member of an organization unless he is included in a category cf persons who are eligible for membi~ship of the organizat:scn under the rules cf the organisation, or ta remain a member if he ceases to be so included and the rules do not permit haa to renain a member.

(2A) Subject to sub-section (2), sub-section (1) has effect notwithstanding the rules of the organization except to the extent that it cxpressiy requires compliunce with tnose rules.

of employee 3n an industry or engagement in an industrial pursuit; or

(b) a person who is qualified to be an employee in an industry or to engage in an industrial pursuit and desires to

industry or to be engaged in that industrial pursuit.

(5) Where a question or dispute arises as to the entitlement under this section of a person to be admitted as, or to remain, a member of an organization, that person, a person who is or desires to become the employer of that person or the organization may apply to the Court for a declaration as to the entitlement of that first-mentioned person under this section.

(5A) Subject to sub-section (7), the Court has jurisdiction to hear and determine

notwithstanding anything contained in the rules of the organization concerned, make such

order to give effect to its determination as it thinks fit.

(6) The orders which the Court may make under sub-section (5A) include an order requiring the organization concerned to treat a person to whom sub-section (1) applies as being a member of the organization and, upon the making of such an order, or as otherwise specified in the crder, the person specified zn the order becomes, by force of this Act, a member of the organi7 ition.

(7) Where an application is made to the Court under this section -

(a) if the application is made otherwise than by a person whose entitlement is in

question - that person snall be g:ven an opportunity of being heard by the Court; and

(b) if the application is made otherwise than by an organization - the organization

concerned shall be given an opportunity of being heard by the Court."

The use of the phrase "in connection with" where 1t

first appears in sub-section (1) is curious. In sub-section

"in or in connection with any industry". In sub-section

144(1) itself, reference is made to "an organization of employees in or in connection with that industry". There is no apparent reason for the omission of the words "in or" before the words "in connection with" where those words first appear in sub-section (1). The mystery is not clarified by an examination of sub-section (3). That sub-section uses the phrase "in an industry" twice and the phrase "in that industry". In other words, sub-section (3) deems certain persons to be employed "in" an industry for the purposes of the section; the operative provision of the section is in Sub-section (1), which deals with persons employed "in connection with" an industry. It is quite clear that, unless the words "in connection week", where first uased an sub-section (1), embrace "in", tha deeming provision in sub-section (3) weuld be mwzaningless. Tnis leads to the conclusion that a person ewsloyed in an industry is entitlel

In the present case, no issue arises of bad character or payment of any amount jn respect of membership. It is also common ground that the Federation is an organization of employees in or in connection with the

relevant industry; it is registered in or in connection with

When Tuxner licdged his application in the Federal Court on 15 August 1983, the existence of the contract between him and Elcom made him a person employed in connection with the coal mining industry. Even if no contract existed, Turner plainly desired to become an employee in that industry. He was qualified to be an employee in the coal mining industry in the sense in which

the word "qualified" was construed by the Full Court in Owens

Ve Australian Building and Construction Employees' and Builders' Labourers' Federation (1978) 46 F.L.R. 16 at p.33,

where the Full Court said in relation to the building

"We are of opinion tiat a person is 'qualified'! to be an employee in a part.cular industry or to engage in an andustrial pursuit within the meaning of s.144(3) if he has th: necessary skjiils or qualifications required 'co work in that oiundustry or section of an industry. In the builéi.ry industry builders' labourers carry out vas1owe duties ranging from unskilled labour requiring physical capacity only to semi-skilled labour generally acquired by experience. Physical capacity in many cases would be the only consideration in determining whether a porson 1s qualified to engage in this industry as a builders' labourer."

The learned trial Judge found that Kennedy was qualified in this sense, and that finding, as applicable to Turner, was

Counsel for the Federation argued that Turner was excluded from entitlement under s.144 by reason of sub-section (2). He contended that the category of persons who are eligible for membership of the Federation under its rules is restricted to those persons actually working in the industry. At the trial, counsel for the parties agreed that the eligibility rules of the Federation were Rule 2 and the opening words of Rule 7. The learned trial Judge acted on

The Federation shall consist of an unlimited number of employees engaged in or in connection with the Coal and Shale Industry teyether waieh svreh othar persous, Whether employecs in the industry or not, as have bdbcen appoi.nrted officers of the Federation and admitted as members thereof.

All persons working in any capacity or doing any work connected with any section of the Coal or Shale Mining Industry shall be eligible for membership of the Federation."

Rule 7 goes on, in a number of separately lettered paragraphs, to deal with such things as procedures for becoming a member, the obligations of members to pay monies

At the trial, there was no contest as to what was the eligibility rule of the Federation. On appeal, the Court raised the question what was the eligibility rule, and whether a rule requiring the consent of the Industrial Registrar under what are now sub-sections 139(1) and (2) of the Act can be construed by reference to a rule to which such

consent is not required; see Co-Operative Bulk Handling Ltd.

v. Waterside Workers' Federation of Australia (1980) 49

F.L-R. 355 at p.361, and Sims v. Australian Institute of

Marine and Power Engineers (Sydney Branch) (1980) Law Book

Company Industrial Arbitration Service, Current Review 576 at

p.579. Pursuant to s.27 of the Federal Court of Australia

Act 1976, the Court gave ita.e fur further evidence to he tendered for the purpose of assist. ng in the determining of what was the eligibility rule of the Federation. Documents tendered fron the tile of the Industrtal Registrar pursuart to that leave indicate that Rule 2 is to be regarded as the eligibility rule. In accordance with the authorities

referred to above, that rule should be construed withcut

The Federation contended that the word "engaged" in Rule 2 meant "actually working". Reliance was placed upon a passage in the judgment of MacKinnon L.J. in Benninga (Mitcham), Limited v. Bijstra (1946) 1 K.B. 58, at p.62,

"The word 'engaged' is deplorably ambiguous. An employer 'engages' a servant when he makes

an agreement with him for his services. A workman is 'engaged' on work when he is actually carrying it out. In fact, 'engage'

of a master has an entirely different meaning to 'engaged in' of a workman."

In that case, the Court of Appeal was construing the words "some person engaged in his whole-time employment" in a statutory provision dealing with the right of a landlord to give notice to quit. The Court reached the conclusion that the words 'engaged in' in that provision referred to the carrying out of actual work by an employee. See also Buntine v. Hume [1943] V.L.R. 123 per O'Bryan J. at pp.127-S, and Re Bath, Federal Court of Anctralia, conslitauted by Northroa J.,

Counsel submitted ulso that, because of the presence of the word 'employees' in Rale 2, the sord 'engaged' would be redundant if i1t referred to engagement by the employer. To speak of an 'employee engaged' is tautologous if the word 'engaged' is intended to convey that the person concerned is a party to a contract of employment and no more; the word ''employee' already sufficiently undicates that. This argument might have force in other contexts, but in the context of the rules of an organization registered under the Act, it loses much of its force. In order to be registered as an organization, an association

must be either an association of employers or an association

of employees; see 8.132. The use of the word 'employees' in Rule 2 of the Federation's rules is an indication that the first respondent is an organization of employees. If the reference to the industry in Rule 2 was a reference to an occupation of employees, there might also be more force in the argument that a person could not be 'engaged' in such an occupation without actually working at it. It is clear that

in Rule 2, the reference to "the coal and shale industry" is a reference to the trade or business of employers, and not a

reference to the occupation of employees. This is supported

by the opinions expressed in R. v. Hibble; Ex Parte Broken

Hill Proprietary Co. Ltd. (1921) 29 C.L.R. 290 at ».297. On

1ts proper construction, therefore, Rule 2 refers to

employees who are engaged by employers which operate in ar

fa connection with the coal and shale industry. There is no @ifficulty in construing the words "cengaged" in that convext as meaning engaged to serve, as distinct from actually

the contract between Turner and Elcom and 19 August 1983, when Elcom purported to terminate the contract, Turner was

entitled to be admitted as a member of the Federation.

Even if the construction of Rule 2 set out above is

incorrect, Turner was entitled to be admitted as a member of

the Federation by virtue of sub~section 144(3). Counsel for

the Federation argued that, under sub-section 132(1)(b) of the Act, it is open to an organization to elect whether to be an association, the rules of which include or exclude persons qualified to be employed in a particular industry, as well as

those actually so employed. He argued that the Federation

has adopted a rule excluding persons who are merely qualified and desiring to be employed. [It followed, so he said, that the "category of persons who are eligible for membership" of this organization consist only of persons actually employed. The argument involved reference to the second reading speech of the Bill which became Act No. 138 of 1973, by which

sub-section (2) of s.144 was inserted. It also snvolved

reading sub-section (3) as suvordinate to sub-section (2).

This argument seoms ts run counter to the scheme of s.144, which is legislation designed to enabjJe a per-rorn qualifized and desiring to be emanloyed in a particular industry to become a member of the relevant organization in that industry. If all that was intended by sub-section (2) was to pick up the organization's eligibility rules, even if they excluded persons who would otherwise be the subject of sub-section (3), there would have been no need for the insertion of the words "included in a category of persons who

are" in sub-section (2). These words are intended to refer to occupational categories. The relevant test is whether, if the person concerned was employed, he or she would fall within a category in the eligibility rules of the

organization. Sub-section (2) was intended to do no more

than to exclude the possibility that a person might be entitled to admission to membership of an organization which was registered in or in connection with the industry in which that person was employed or deemed to be employed, even though the rules of the organization contained no category into which that person's occupation or deemed occupation would fall. The fact that Rule 2 of the Federation's rules

contains no occupational categories, or contains only one all-embracing occupational category, cannot be relied upon to

It is worth noting that, on this view of sub-section (3), the appellant would have been entitled to be admitted as a member of the Federation before 19 August 1983, even if Rule 7 were part of the eligibility rules or capable

of being used as an aid in the construction of Rule 2.

For the foregoing reasons, at the date when he lodged his application, namely 15 August 1983, Turner would have been entitled to the declaration contemplated by sub-section 144(5) of the Act. In Owens's case, supra, at pp.25-6, the Full Court held that the making of such a declaration is not a matter of the discretion of the Court. Where the entitlement to be admitted to membership of an organization under s.144 is established, the Court is bound

to grant a declaration. A discretion does arise, however, as

to the form of any order which might be made under sub-sections (5A) or (6). These provisions contemplate orders giving effect to the determination of the Court as to the entitlement of a person, and in particular an order requiring the organization concerned to treat a person entitled as a member, either from the date of the order, or

The Full Court in the Owens's case did not, however, deal with the question whether orders under s.144 are made in respect of the rights of the parties as they existed at the date when the proceedings were commenced, or in respect of those rights as they exist at the date of

judgment. In R- v. Dunphy: Ex Perte Maynes (1978) 139

C.L.R. 482, at p.495, Mason J. (with whom Barwick C.J.,

"In general the order of a court speaks as to the rights of the parties as at the commencement of the proceedings in which the

order is made. But there are strong reasons why declarations made under s.140 should be held to stand in a different position. The

section empowers the Court to make an order that a rule contravenes s.140(1) or that the rules so contravene in a specified respect. In each instance the order manifests the existence of a contravention; in one case the rule or part of it is deemed void and in the other case, though the rule is not deemed to be void, a procedure is prescribed with a view to the taking of remedial action. The Court's judgment decides whether there is an existing compliance with the statutory requirements and in the event of non-compliance certain consequences attach and they will ultimately result in compliance with the statutory requirements.

In this context, despite the contrary view of Windeyer J. expressed in Shearer's case

((1960) 103 C.L.R., at p.389], it is my opinion that the Court's order in accordance with s.140(2) and (3) speaks as to the rules as at the date of the order. An order should not be made by the Court unless it is satisfied that the relevant contravention exists at the date of the order. It is from then that a rule declared to contravene s.140(1) is deemed to be void and it is from then that time runs under s.140(7)."

The aspects of s.140 to which Mason J. referred do not exist in s.144. In the absence of such aspects, or any other indication to the contrary, the general rule should apply, namely that a declaration as to entitlement should be made on the hasis of the rights of the parties as they existcd at the date of commencement of the proceedings. Sub-sections (5A) and (6) indicate, however, that the orders which the Court makes to give effect to its determination are intended to be flexible. This suggests that regard should be had to the situation which exists at the date when the Court comes to make its order. If, between the date of commencement of proceedings and the date of judgment, an applicant has ceased to be employed and no longer desires to be employed, or has ceased to be qualified to be employed, grounds may exist for a refusal to make any order other than a declaration of entitlement as at the commencement of

proceedings. For instance, an applicant may have suffered an

injury rendering him or her unfit permanently to undertake employment of the kind originally desired, or may have found more attractive permanent employment in another field. The

purpose of s.144 does not go to the extent of forcing

organizations to take as members persons who, at the date of

judgment, fall wholly outside the purview of the section.

It is therefore necessary to look at developments after 14 August 1983, for the purpose of determining whether any and if so what orders should be made consequential upon the declaration of entitlement to membership as at that date.

By letter dated 19 August 1983, Elcom wrote to Turner in the

"Reference is made to the Company's letter 16th November, 1982 offering you a position as a Junior Trainee Mineworker at Wyec State Coal Mine.

As you would be aware, there has been a downturn in economic and industrial activity which has contributed toa a decline in

electricity demand. Actually, electricity generation in 1982 was 2% less than in 1981,

electricity generation is about equal to 1982 levels.

As a result of the decline most of the mining developments contemplated a year or so ago

have been deferred for some years. In addition, power station coal stockpiles have grown considerably to a level equivalent to about six months consumption. In fact, some power stations have nearly a year's supply.

Consequently the Electricity Commission has found it necessary to reduce overall coal deliveries to help control electricity cost increases and revised power station consumption needs.

For these reasons, the Company has been reducing its workforce by natural attrition in recent months. This attrition policy is planned to continue whilst stockpiles remain at high levels. As can be seen, the Company is not currently planning to employ any

mineworkers not presently working for the Company -

to advise you that the offer of employment is withdrawn."

Although this letter purports to withdraw an offer of employment, in the circumstances it must be construed as an undication that Elcom no longer intenGed to be bound by the contract of employment into which it had entered with Turner. In these circumstances, counsel for the Federation arguel that this letter brought to an end any contract of employment with the result that Turner could not be regarded as a person employed in the relevant industry for the purposes of sub-section 144(1). Counsel for Turner contended that, as is the case with any other contract, neither party to a contract of employment can terminate the contract by unilateral wrongful act. He sought to persuade the Court that Turner's contract of employment contained a condition that his employment would be kept open until such time as he had exhausted all his legal remedies with respect to membership

of the Federation. There was evidence before the learned

trial Judge that an express promise had been made to Kennedy to keep open his employment opportunity with Elcom until such time as he had exhausted his remedies. No such express promise had been made to Turner. Counsel sought to rely upon hearsay evidence in affidavits of Turner and his father. These affidavits were relied upon at the trial, apparently without objection. Even when looked at, they do not go so far as to support the proposition that Elcom bound itself in the manner suggested. Indeed, the suggestion was that the position offered to Turner was not open to him beyond his

Award, 1982, New South wales, which award binds Elcom in respect of the employment of Turner, provides that employment shall be terminated py a week's notice on either side or by the payment or forfeiture of a week's wages. Elcom''s letter of 19 August 1983 d3d not purport to give such notice, and Turner was not paid any wages in lieu of notice. It therefore appears that the termination of Turner's contract of employment by Elcom was wrongful, being without proper

notice. It is also clear that, by its letter of 19 August

1983, Elcom repudiated the contract of employment. The issue

is whether this repudiation brought about the termination of

On this issue, both sides sought to gain support from the judgments in Automatic Fire Sprinklers Pty. Ltd. v. Watson (1946) 72 C.L.R. 435. Those judgments are difficult to interpret. The difficulty arises largely from the unusual facts of the case. Mr. Watson was appointed and served for some years ag general manager of two companies, one being Automatic Fire Sprinklers Pty. Ltd. He was demoted to the position of New South Wales manager of that company, whilst continuing as general manager of the other company. The two companies apparently shared offices. By his contract of employment, Mr. Watson was entitled to three months' notice

of termination of that contract. In addition, the National

Security (Man Power) Regulations prohibited the termination

of the employment of Mr. Watson unless the Director-General

of Man Power or some person authorized by him gave written

permission for such termination. No such notice was given, and no such permission was obtained. Mr. Watson did not accept that his employment was terminated. He continued to

attend his place of work and, apparently, carried out some of

The matter came before the Supreme Court of New South Wales, upon a special case stated by an arbitrator, and thence on appeal to the High Court of Australia. This special case asked the question whether the purported dismissal of Mr. Watson was ineffectual in law to terminate

his employment as general manager by reason of (a) the

Regulations, or (b) Mr. Watson's non-acceptance of the purported dismissal as termination of his employment. Rich, Dixon and McTiernan JJ. answered only part (a) of this question, and each answered it in the affirmative. Williams J. also answered part (a) in the affirmative, but he expressed the view that part (b) should be answered in the negative. As the passage in his judgment at pp.476 and 477 indicates, however, Williams J. took the view that the employer cannot discharge the contract of employment by a unilateral breach. His Honour took the view that part (b) of the question really asked whether Mr. Watson would have been entitled at common law to his remuneration as general manager aftex the purported dismissal. His Honour should, therefore, be regarded as taking the view expressed by him that unilateral breach did not bring about the automatic discharge

Latham C.J. and Starke J. answered both parts of the question in the negative. Starke J. clearly took the view that Mr. Watson's contract of employment as general manager was terminated, despite his non-acceptance of the termination. His Honour did not, however, discuss the question at any length. By contrast, Latham C.J. embarked on a lengthy discussion. In a passage at pp.450-3, his Honour accepted the existence of the general rule that a repudiation by one party to a contract does not terminate that contract

unless the other party elects to accept the repudiation as

bringing the contract to an end. His Honour also held that,

generally, the rule is that the consideration for wages is the actual performance of work. Some difficulty appears to

have arisen in his Honour's mind in reconciling these two

"But if a dismissed servant, as in the present case, does not accept his dismissal as a breach entitling him to regard the contract as discharged, he cannot ignore the wrongful dismissal and claim still to be the servant of his employer with the rights of a servant. The @gismissal, though wrongful, is not a nullity ... Thus the wrongful dismissal determines the relationship of master and servant created by the contract, even though the servant may not have accepted his dismissal as entitling him to regard the contract as G:schargeé. Any octher view would in effect grant specific performance of a contract of personal service, a remedy viich the courts have aiway- refused in such a case {see Lucy v. The Cormonwealth [{1923) 33

This passage tends to indicate his Henour's view that unilateral termination of a contract of employment was

possible, a view which is consistent with his Honour's

answer to part (b) of the questzon posed by the arbitrator.

"I agree that the contract cannot be terminated by a wrongful unilateral act ...

ee. one party to a contract cannot by a wrongful unilateral act bring the contract to an end. If an employer wrongfully dismisses a servant he breaks, but does not terminate, the contract ..."

This latter passage occurs in the discussion by Latham C.J.

of the effect of National Security (Man Power) Regulations,

and in particular in the course of his Honour's attempts to

distinguish the decision of the Court of Appeal in George v.

Mitchell & King Ltd. (1943) 59 T.L.R. 153, a decision

followed by the majority in Watson's case. Although

apparently inconsistent with what Latham C.J. said earlier in his judgment, this passage cannot be accepted as support for the view that unilateral termination of a contract of

Diaon J. (as hie then was) seenod to be prepare' io accept that termination conld not occur without acceptance >y the wronged party of the other party's repudiation. At pp.405-6, his Honour said:

"The common understanding of a contract of employment at wages or salary periodically payable 1s that it is the service that earns the remuneration and even a wrongful discharge from the service means that 'vages or salary Cannot be earned however ready and willing the employee may be to serve and however much he stand by his contract and decline to treat it as discharged by breach ...

His only remedy is in unliquidated damages for wrongful dismissal. By keeping his contract open, he may be able to resume his service without a new contract, if his employer is induced to retract the discharge."

Of the six Justices who delivered judgments in Watson's case, therefore, two appear to have regarded unilateral termination of a contract of employment as possible, two appear to have rejected it, and the other two did not deal with the question. It may be concluded that Watson's case does not stand as authority preventing this Court from holding that

unilateral termination of a contract of employment is

Subsequent authorities in England lead to the view that contracts of employment are to be treated in the same way as other contracts' in that they cannot be terminated by the unilateral wrorqful act of ons purty. without acceptance

of the repudiarion of the other party. In Thomas Marst.all

that., although trading on his own account in breach of tis contract of employment was a repudiation of the contract by a managing director, the contract itself was not discharged ana the managing director was bound by those terms of it which restrained him from so trading and fron using information

acquired in the course of his employment. In Hill v. C.A.

Parsons and Co. Ltd. [1972] Cn. 305, the Court of Appeal

granted an injunction restraining an employer from treating

an invalid notice of termination as having terminated the

service of an engineer. In Gunton v. Richmond-Upon-Thames London Borough Council [1981] Ch. 448, the Court of Appeal

considered the case of a college registrar dismissed in

breach of disciplinary procedures incorporated into his contract of employment. At pp.459-60, Shaw L.J. held that, although there is no logical justification for the proposition that a contract of employment survives a total repudiation by one side, the remedies available to an employee were limited, and that accordingly contracts of employment differed from other contracts. At pp.468-9, Buckley, L.J. rejected the unilateral termination doctrine, although recognizing that the remedies available to a dismissed employee were limited. Brightman L.J. at pp.474-5

An examination of the authorities indicates that the courts have referred to a number of features of contracts of employment as making them unique, or at least different from most other contracts. An examination of these factors indicates that they do not constitute any barrier to the treating of contracts of employment in accordance with general principles so far as termination as a result of

In some cases, little point has been seen in allowing the contract to continue on foot after its repudiation by one party. Where the consideration for the payment of wages is the performance of work, and the employee is unwilling to perform or the employer refuses to permit the

performance of work, no claim for wages can be brought. The

view has been taken, therefore, that only a claim for damages is possible, the damages only being equivalent to wages which would have been paid or forfeited in lieu of the notice required for termination. In these days, however, there may be many reasons other than the seeking of remuneration why either party may wish to keep a contract of employment alive. From the employer's point of view, there may be a desire to restrain' the employee from accepting employment which would be in breach of a restraint of trade clause, or from acting contrary to some term of the contract which restricts the employee in his or her activities after the end of the employment. From the employee's point of view, there may be

entitlements to annual leave or long scrvice leave or

superannuation which depend upon the continuance o£

emplcyment. As Dixon J. said in Watson's case, the employer

may be persuaded to take back the employee, in which case the period of employment will be unbroken. An example of a case in which the preservation of the contract of employment was

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (262 paragraphs)

Cited By (1)