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Koto v Kihilla Apartment [2009] FJET 30; ERT 02.2009 (3 November 2009)

IN THE EMPLOYMENT TRIBUNAL
AT SUVA ERT No. 02/2009

BETWEEN:

SELAI KOTO
APPLICANT

AND:

KIHILLA APARTMENT
RESPONDENT

S. Lesi for the Applicant
J. Young for the Respondent

DECISION

This is an individual grievance raised by Mrs. Selai Koto ("the employee") against Kihilla Apartment ("the employer") alleging unfair dismissal.

The owners of Kihilla Apartment are Mrs. Veniana Smith and husband Mr. Brian Smith and they reside in mainland China. The grievance was taken through the mediation services but was not resolved and on 23rd February 2009 was referred to the Employment Tribunal for adjudication.

The terms of reference of this grievance are as follows –

1. Selai Koto employed by Kihilla Apartment for a period of two years and eleven months as a house girl until 12th January 2009, when she formally informed the employer that she had been forced to resign.
   
2. She alleges that she was given a reference letter however, not any formal notification of her dismissal or any correspondence to that effect on the part of her employer.
   
3. Hence, she alleges that she was unfairly dismissed.
   

The remedies the employee is asking for is compensation for loss of earnings and hardship endured from the day she was forced to resign and for loss of dignity.

The hearing of the grievance commenced on 31st July and during the course of the hearing the employer called two witnesses and the employee three witnesses to give evidence. The parties presented closing written submissions at the end of the evidence.

The employee's case is based on the belief that all allegations leveled against her by the employer were fabricated and an attempt to relieve her from working at the Kihilla Apartment.

The employee started working for the employer as a house girl on 10 February 2006 and was initially paid $70 per week before the wages were increased to $80 in early 2007. Her job description covered sweeping and mopping floors, washing dishes and general cleaning duties of bathrooms and toilets. On an independent basis the employee did washing and ironing of clothes and got to keep the payments from the guests. This was confirmed in evidence by the employer's witness Mrs. Veniana Smith and also the employee Mrs. Selai Koto.

Why did the relationship turn sour? That will be the next logical question to ask. Apparently this is a case similar to that of an absentee landlord. The owners of Kihilla Apartment live overseas in China and the work performance of this employee was under the care and control of one Mrs. Joanne Young who is the sister of Mrs. Smith and works full time at the Wakaya's Office on the ground floor of Civic House in Central Suva. This was also confirmed in evidence by both sides.

The employee in evidence stated that in performing her duties, she was not directly under the supervision and control of Mrs. Young as she works permanently at the Civic House, and when told by her that the Smiths were not happy about her performance, she made the point of having an audience with her employers to hear them out.

This meeting between the employee and Mrs. Smith took place on the morning of 12 January 2009. Mrs. Smith in evidence outlined to the employee the specific deficiencies in her work and physically showed the areas of concern- dirty walls, doors windows and appliances. In addition, the issue of the husband coming into the property was put to the employee and she advised that it had the consent of Mrs. Young and that he would only turn up when asked to help her in moving staff around the building.

There was general agreement in what transpired at the meeting and this showed to the Tribunal the sincerity of the exchanges except at the stage where the employee was given the options to do her work properly or to look for another job.

In evidence the employee stated that Mrs. Smith told her that if she was not happy, she would replace her and that if she could not do the job properly, she should resign. The Tribunal believes the employee as Mrs. Smith in her evidence alluded to that. Further the employee in evidence stated that she continued with work until the end of the day and went home. She did not resign immediately but did not want to come back to work because of what transpired between Mrs. Smith and her. The employee in her evidence said that she did not want to leave work and whilst at home no one called her although the employer had her contact address and phone number.

This case is an example of what happens when there is an absence of procedure for appointment and termination in an employment relationship.

The Tribunal has taken upon itself the task of reminding employers both big and small of the need to respect and observe decent standards in employment as labour is a sacred commodity. Moreover, the Employment Relations Promulgation 2007 provides in Part 5 types of contracts of service and specify the circumstances in which such contracts may be oral or written and how they subsist or terminated.

Due to the lack of documentation presented before the Tribunal, it could be safely assumed that the employee was engaged on a contract of service which in this instance was for more than sixty days. There was no written contract of service as required by sections 37 and 38 of the Employment Relations Promulgation 2007 and as such there was no grievance procedure as required by section 110 of the Promulgation..

This is the haphazard way of dealing with employees in this industry of house girls/cleaners and maids that the Employment Relations Promulgation 2007 aims to eliminate. It has become industry practice and rather to being a detriment to the industry, the new law in effect reduces the decent work deficit in this area of employment.

Going back to the performances of the employee, the Tribunal has noted the arrangement where Mrs. Young's role was that of a supervisor and that managing an employee's poor performance can be a difficult issue. The Tribunal has also noted that Mrs. Young was not always present at the workplace; the Kihilla Apartment as she has a permanent job at Civic House. Notwithstanding that, employers are reminded that there are a number of procedural steps that must be taken before an employer reaches the point where it can dismiss for poor performance. These steps include:

• Informing the employees of the dissatisfaction with their performances requiring them to achieve a higher standard;
  
• Providing information in a readily comprehensible form; and
  
• Allowing reasonable time for the attainment of those standards.
  

Exhausting the above steps, the parties can then proceed through the grievance procedure which in the instant case is not provided for.

However, in some instances, an employer can dismiss an employee without this process where there has been one act of incompetence or negligence, provided that single incident is of sufficient seriousness.

The New Zealand Employment Court decision in Morris v Christchurch International Airport Limited [2004] NZEmpC 58; [2004] 1 ERNZ 336 is illustrative of the distinction between the acts that should be dealt with as part of an ongoing performance management process, and single acts of incompetence or negligence that would justify dismissal. In Morris, an employee who was subject to a performance management process was dismissed as the result of a single act that occurred one month into a review period intended to take up to six months. Her dismissal was held to be unjustifiable.

In this case the employee's performance was reviewed in December 2008 and in less than a month later, she was pulled up again for non-performance and other allegations. There was no time line, and in this case there was no written employment contract, which means there was no existing system of peformance management process.

The Tribunal sees that as the source of strife in this case: Mrs. Smith as the employer was rightfully concerned about the employee's performance and other allegations including the husband's occasional presence at the place of work. To rectify that situation, Mrs. Smith should have been working with Mrs. Young to devise a performance management process for the employee and they must see to it that it is carried through within the time line set up and agreed to by both parties. That did not happen in this case.

Again, the case of Morris is also authority for the proposition that if a performance management process is started, it must be seen through. Where a period of improvement has been given, the full time must be given unless the process is interrupted by a sufficiently serious incident of incompetence, negligence or other misconduct. Less serious acts of non-performance during the review period do not justify dismissal but can be taken into account when the employer comes to make their final decision.

In this Kihilla Apartment case, since there was no written contract for the employee, the Tribunal will consider implying terms of the contract. First, the employee walked out without notice because of her employer's conduct. In Western Excavating (E.C.C.) Ltd. v. Sharp [1977] EWCA Civ 2; [1978] I.C.R. 221, the Court of Appeal affirmed that the question whether an employee is entitled to terminate without notice should be answered according to the rules of the law of contract. Lord Denning M.R. said:

"If the employer is guilty of conduct which is a significant breach going to the root of employment, or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract, then the employee is entitled to treat himself as discharged form any further performance....The conduct must be sufficiently serious to entitle him to leave at once."

In the instant case, the Tribunal is willing to imply into the employee's contract terms obliging the employer to maintain the relationship of trust between himself and his employee, or not to treat his employees arbitrarily, capriciously or inequitably, or not to behave intolerably and not in accordance with good and acceptable workplace practice based on the exchange of good faith.

These implied terms to the contract are the basics provided for in the Employment Relations Promulgation 2007 and from the evidence of the employee, the Tribunal is satisfied that the employer through Mrs. Smith's conduct and lack of a performance management process has committed a serious breach of the implied terms of the contract, resulting in the ending of the employment relationship on 12 January 2009 through constructive dismissal.

The employee's counsel in the Tribunal asked for compensation for injury to feelings and reimbursement of wages and in that regard the law requires the Tribunal in deciding both the nature and the extent of the remedies to consider the extent to which the actions of the employee contributed towards the situation that gave rise to the employment grievance and if those actions so require, reduce the remedies that would otherwise have been decided accordingly.

The Tribunal is reluctant to award compensation for injury to feelings in this instance as it wants first of all to alert employers in this industry of their responsibilities to the employees involved. These employees are covered under the Employment Relations Promulgation 2007 and the Employment (Administration) Regulations 2008 and their rights are similar to other employees in this country.

Mrs. Selai Koto left employment on 12 January 2008 and the Tribunal heard her case on 31 July 2008 a period of approximately six months. She was being paid $80.00 per week or $320.00 per month.

For six months = $1,920.00

less $160.00 already paid
= $1,760.00 in loss wages

The employee, Mrs. Selai Koto worked for approximately three years with this employer and she was very familiar with the working arrangement and she performed her tasks with minimal supervision as her supervisor was most of the time based at the Civic House. The concerns raised over her performances were valid although the method used in rectifying the situation was not appropriate. The Tribunal has also noted that the guests have passed notes and words of appreciation on her performances.

The performance concerns raised by Mrs. Smith were directly related to the negligence of the employee and in that connection she contributed to the situation that gave rise to the grievance.

Towards that end the remedies are reduced by three months in wages as follows:

$1,760.00

Less $ 960.00 (3 months wages)

= $800.00

The Tribunal decision is the following:

(1) Mrs. Selai Koto was constructively dismissed;

(2) Reimbursement of all loss wages is denied due to contributory negligence; and

(3) The sum of $800 is awarded to her and to be paid to the Registrar of the Tribunal within 14 days from the date of this decision.

DATED at Suva this 3rd day of November 2009

Sainivalati Kuruduadua
Chief Tribunal