Case: Martin v Tasmania Development and Resources (1999) 89 IR 98
Outcome: followed
an employer wrongfully terminates an employment contract which has a fixed term, thereby causing damage to an employee, damages are normally calculated on the basis that the employee would have enjoyed the benefits of the contract for the remainder of its term: see Kilburn v Enzed Precision Products Pty Ltd (1988) 4 VIR 31 at 33; Patterson v Middle Harbour Yacht Club (1996) 64 FCR 405 at 406; Martin v Tasmanian Development and Resources (1999) 89 IR 98 at 120-1. The employee is under an obligation to mitigate his loss by seeking to obtain alternative remunerative employment. Although the AWA had a three year term, Mr Van Efferen only sought damages until CMA's work on the Dolphin Project ceased. Full Courts of this Court have applied the "loss of a chance" approach to the assessment of damages for breaches of employment contracts. In Tasmania Development and Resources v Martin [1999] FCA 593 ; (2000) 97 IR 66 the Full Court upheld the trial judge's decision to award damages to reflect the applicant's loss of the prospect that his contract would be renewed even though he had no legal right to renewal. The applicant was employed by a statutory authority. He was employed on a three year contract. After about 18 months his employment was terminated on the grounds of redundancy. The trial judge found that the contract had been terminated by the statutory authority in breach of a provision which required that there be consultation between employer and employee before an employee was terminated for redundancy. The trial judge held that, had the contract not been wrongly terminated, the employee would have enjoyed its benefits for the remainder of the three year term. He allowed damages for that period. He also allowed a further sum to compensate the employee for loss of the chance of obtaining a fresh contract at the end of the term of the existing contract. In any event, in the circumstances in the present case, it is, at best for Mr Van Efferen, doubtful that the two implied terms add anything to CMA's contractual obligations having regard to the protective procedures incorporated expressly in clause 2.10 of the AWA. CMA was obliged to act in good faith in applying clause 2.10: cf Tasmania Development and Resources v Martin [1999] FCA 593 ; (2000) 97 IR 66 at 72. Had it done so no breach would have occurred. No detailed submissions were advanced relating to the precise terms of the orders which should be made were Mr Van Efferen to be successful. In particular no attention was directed as to the taxation implications of any order which the Court might be minded to make in Mr Van Efferen's favour: see Martin v Tasmania Development and Resources (1999) 89 IR 98 at 121-122. It is also necessary to consider whether any specific provision should be made in the court's order to deal with Mr Van Efferen's entitlement to interest. I will, therefore, direct that the parties file and serve minutes of orders which will give effect to these reasons. I certify that the preceding eighty-eight (88) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice TRACEY. Associate: Dated: 4 June 2009 Counsel for the Applicant: Mr J L Bourke and Mr M Felman Solicitor for the Applicant: Petersens Lawyers Counsel for the Respondent: Mr T Saunders Solicitor for the Respondent: Sparke Helmore Lawyers Date of Hearing: 16, 17 and 18 December 2008 Date of Judgment: 4 June 2009 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2009/597.html