Addis v Gramophone Co Ltd
House of Lords
Citations: [1909] UKHL 564; [1909] AC 488; 47 SLR 564.
Facts
The defendant employed the claimant to manage their business. Part of the claimant’s earnings were based on commission. His employment contract specified that the claimant was entitled to six months’ notice prior to dismissal. After some time, the defendant gave the claimant six months notice. They then took abrupt and oppressive steps to prevent the claimant from doing his job during that six month period, and refused to pay him. This deprived the claimant of the commission he would have earned in those six months.
The claimant sued for wrongful dismissal and breach of contract. He sought damages for lost earnings and commission, hurt feelings and exemplary damages to reflect the oppressive manner of his dismissal.
Issue(s)
- Was the defendant in breach of contract?
- If the defendant was in breach, what remedies should be available to the claimant?
Decision
The House of Lords held that the defendant was in breach of contract. The claimant had a right under the contract to work to try to earn commission, and the defendants had prevented him from exercising this right. The claimant was therefore entitled to the salary and likely commission he would have earned in the six-month period. However, they held that the claimant was not entitled to any other damages.
This Case is Authority For…
Damages relating to the manner of dismissal are not an available remedy for the common law wrongful dismissal action. The same is true of damages reflecting the fact that it is now more difficult for the claimant to find employment.
Other
In addition to its implications for employment law, this case is authority for the general proposition that damages for injured feelings or psychological harm are not usually available in an action for breach of contract. There are some exceptions to this rule, however. See for example Jarvis v Swans Tours Ltd [1972] EWCA 8.
