Automatic Fire Sprinklers Pty Ltd v Watson
[1946] ALR 390(Judgment by: Starke J)
Automatic Fire Sprinklers Pty Ltd
vWatson
Judges:
Latham CJ
Rich J
Starke JDixon J
McTiernan J
Williams J
Legislative References:
Arbitration Act 1902 (NSW) - s 9(a); The Act
National Security Act 1939-1943 - s 10
Judgment date: 23 August 1946
Sydney
Judgment by:
Starke J
Appeal from a judgment of the Supreme Court of New South Wales in Full Court upon an award stated in the form of a special case pursuant to the provisions of the Arbitration Act 1902, s. 9 (a).
By an agreement dated 12th October 1938 the appellants, the Automatic Fire Sprinklers Pty. Ltd. and the Independent Industrial Investments Pty. Ltd. respectively, appointed the respondent, Watson, general manager for the term of six years from 1st October 1937 subject to the terms and conditions set out in the agreement. Shortly, the agreement provided that the respondent should serve the appellants as manager in their respective businesses, control the general management and businesses of both appellants subject to any directions on the part of boards of directors and perform such duties and exercise such discretions as would generally be entrusted to a responsible general manager in the conduct of such businesses. As a consideration for his services and for the faithful observance and performance of the terms and conditions of the agreement the respondent was to receive an annual sum and various allowances.
The agreement provided for its termination in various ways one of which was three months' written notice of termination. The agreement also provided that in the event of the respondent continuing in his employment after the expiration of the term of six years the conditions of the agreement should apply to and be binding on the parties during such continued employment. The respondent did continue in his employment after the expiration of the term of six years.
But the arbitrator found that on 29th September 1944 the appellants purported to dismiss the respondent from his position as general manager and that such dismissal was a wrongful dismissal if effective in law to determine his employment. He also found that on 19th September 1945 the appellants wrongfully dismissed the respondent from his employment if such employment had not been terminated on 29th September 1944. These findings confuse, I think, a termination or rescission of the agreement and a breach of its terms determining the relation of master and servant for the future (Boston Deep Sea Fishing and Ice Co. v. Ansell(1)).
The agreement was not terminated on 29th September 1944 because notices given and relied upon by the appellants were not, as the arbitrator found, in accordance with its terms and were consequently ineffective and because the termination of the agreement was prohibited by reg. 14 of the National Security (Man Power) Regulations. And there was no rescission of the agreement because, as the arbitrator also found, the respondent had not elected to rescind it for any breach of its terms on the part of the appellants. So I take it that the findings mean that the respondent was wrongfully dismissed from his employment on 29th September 1944 in breach of the terms of the agreement with the appellants.
On these findings, and laying aside for the moment the effect of the National Security (Man Power) Regulations, the rights and obligations of the parties are fairly well settled:-
- 1.
- The right of the respondent to his remuneration depends upon the terms of the agreement. And by the agreement the consideration for the services is the actual performance of the duties undertaken by him (cf. Boston Deep Sea Fishing and Ice Co. v. Ansell(2); O'Grady v. M. Saper, Ltd.(3)).
- 2.
- The respondent cannot sue for his whole remuneration as a debt due to him in respect of complete performance of the agreement on his part relying on his readiness and willingness to perform the agreement (Smith v. Hayward(4); Fewings v. Tisdal(5); Elderton v. Emmens(6); Emmens v. Elderton(7); Boston Deep Sea Fishing and Ice Co. v. Ansell(8)).
- 3.
- But the respondent could sue for remuneration that had vested and become due and payable at the time of his dismissal (Taylor v Laird(1); Button v. Thompson(2); Boston Deep Sea Fishing and Ice Co. v. Ansell(3)).
- 4.
- And he may elect to treat the agreement as rescinded and sue immediately on a quantum meruit for services actually rendered or he may sue immediately on the agreement for the breach thereof in wrongly dismissing him from his employment. "But he cannot do both" (Lilley v. Elwin(4); Archard v. Hornor (5); Goodman v. Pocock(6)). The measure of damages in an action for wrongful dismissal is not however the remuneration agreed upon but the actual loss sustained including compensation for the period of service up to dismissal (Goodman v. Pocock(7); Lucy v. The Commonwealth(8)).
But it is contended for the respondent that he is entitled by reason of the provisions of the National Security (Man Power) Regulations already mentioned to his whole remuneration under his agreement of service as if he had actually performed the duties undertaken by him: See George v. Mitchell & King Ltd. (9).
Regulation 14 of these Regulations, which is applicable to this case, provides that an employer carrying on a protected undertaking or any person or body of persons empowered to terminate the employment of persons employed in the undertaking, shall not, except with the permission in writing of the Director-General or of a person authorized by him, terminate the employment in the undertaking of any person employed therein, and that a person employed in a protected undertaking shall not except with the like permission change or terminate his employment. Doubtless the contravention of this regulation creates an offence. But it makes no provision in respect of remuneration except in special cases where an employee is discharged or refuses to work in contravention of the Regulations. Workmen "stood down or suspended" other than in accordance with the Regulations are entitled in certain circumstances to the remuneration which would have been paid to them if they had performed their duties (See regs. 14 (3A) and (16A)), but otherwise the Regulations are silent.
Consequently, it appears to me that the general rules of law and any special conditions of the agreement between the parties and relevant industrial awards or determinations must govern the rights and duties of the parties in case of a wrongful dismissal whether that dismissal be wrongful because of the contravention of contractual or other stipulations or of the Man Power Regulations. A clear and distinct provision is necessary if established rules of law are to be altered.
The case of George v. Mitchell & King Ltd.(1) depends upon the special provisions of the English order that an employer shall pay to employees a sum not less than the normal wage if his employee is available for work and willing to perform other reasonable services if his usual work be not available. Some general observations of the Lords Justices in that case (1) must be related to those provisions and should not be treated as some overriding principle of construction applicable to regulations dealing with the same subject matter but in different language.
This appeal should be allowed and the questions stated answered as follows:-
- 1.
- (a) The purported dismissal of the respondent was ineffectual to determine the agreement of 12th October 1938 mentioned in the case but the dismissal of the respondent on 29th September 1944 was wrongful and in breach of the agreement and effectively terminated the relation of master and servant under the agreement notwithstanding reg. 14 of the National Security (Man Power) Regulations and the respondent's non-acceptance of the purported dismissal as termination of his employment.
- 2.
- The measure of damages to which the respondent is entitled by reason of his wrongful dismissal on 29th September 1944 is not so limited. The result is, I think, that the award of £354 13s. together with costs of arbitration and of the award takes effect; otherwise the matter should be remitted to the arbitrator.