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Fiji Employment Tribunal |
IN THE EMPLOYMENT RELATIONS TRIBUNAL
AT SUVA
ERT Grievance No. 163 of 2010
BETWEEN:
SEGRAN NAIR
Grievor
AND:
CARPENTERS FIJI LIMITED T/ACAPENTERS MOTORS
Employer
Appearances:
Mr P Rae for the Grievor
Ms D Prakash for the Employer
Date of Hearing: 1st September 2011
Date of Judgment: 6th November 2012
DETERMINATION OF THE EMPLOYMENT RELATIONS TRIBUNAL
1.0 Employment Relations Grievance
1.1 Background to the Grievance
This grievance was registered with Ministry of Labour on 19th July 2010. Mediation was attempted on 3rd, 6th, 10th, and 27th August 2010 and again on 3rd September 2010 but was not successful. The mediator referred the grievance to the ERT on 2nd February 2011 in accordance with s194 (5) of the Employment Relations Promulgation (or “the ERP”) outlining the nature of unsettled employment grievance with the following terms of reference:-
“The grievor Segran Nair was employed by Carpenters Motors as a Supervisor Tyres and Batteries when his employment was terminated summarily with effect from 16th July 2010. The reason for termination was the alleged buying and selling of vehicles which is in direct conflict with the core business of Carpenters Motors, failing to adequately control and manage staff which led to stock being unaccounted for and as a supervisor failed to take reasonable actions to safeguard or check to prevent staff from selling old tyre casings and pocketing the money without reasonable excuse. The grievor seeks reinstatement without any loss of salary. He was represented by Hira Lal – Manager Compliance Fletcher Pacific Steel”.
2.0 Cause before the ERT
2.1 In the Employment Relations Tribunal (or “the ERT”), the parties were directed to file preliminary submissions by the Hon. Chief Tribunal on 6th October 2010 whereby the Employer, Carpenters Fiji Limited (or “Carpenters”) filed its Preliminary Written Submissions on 27th October 2010 and Grievor filed his Preliminary Written Submissions almost six months later, on 27th April 2011.
2.2 Hearing of the substantive matter, in part was carried out by the Hon. Chief Tribunal on 1st September 2011 and thereafter, part-heard matter was heard by the Legal Tribunal which was concluded on 13th September 2011 at the consent of the parties as Chief Tribunal was not available on the day. No oral closing submissions were heard as both parties opt to file their respective written closing submissions as would be directed by the Tribunal. The Legal Tribunal then directed that the Employer to file their closing written submissions within 21 days by 4th October 2011 and thereafter the grievor to file his closing written submissions within 21 days by 25th October 2011. Only the employer filed their submissions dated 7th November 2011 as no submissions were filed by the grievor or his representative.
2.4 The employer called one witness:-
2.5 The grievor gave evidence as the only witness from his side.
3.0 Issue(s) before the ERT
3.1 The general nature of allegations pertaining to unfair dismissal of the Grievor by the Employer that occurred on 16th July 2010 requires the ERT in this instance to determine whether or not the summary dismissal was substantially and procedurally unlawful (wrong) and unfair. Notably, while the Tribunal has the task to adjudicate grievance matters within the ambit of what is normally pleaded by the claimant in his or her original claim form (as per Form ER1) which serves as the terms of reference for any ensuing grievance for the ERT, and here that grievance matter is thus referred by the Mediation Unit pursuant to s211(1)(k) of the ERP 2007 invoking the jurisdiction of the Tribunal, in practical terms, such claims cannot be strictly kept within the confines of Form ER1 only. The Tribunal also has the duty to consider the preliminary submissions (and subsequent submissions) from both sides to better understand the particulars (or details) of the claim and it appears the claimant here is seeking the following issues to be remedied:-
3.2 In other words, the foremost issue that this ERT will determine will be whether or not the purported summary dismissal was unlawful (or wrong) and unfair as alleged by the Grievor. If so, should relief (or remedies) sought by the Grievor including reinstatement without loss of pay and benefits and/or compensation be awarded? On the other hand, the employer is asserting that if the dismissal is declared justified, should the employer be entitled to costs of this action?
4.0 Background Facts & Evidence
4.1 Prior to his dismissal, the Grievor was a permanent full time worker of Carpenters employed as a Supervisor, Tyres and Batteries based at the Nabua Tyre Centre. The Grievor was employed on or about 10th June 1991 as a Salesman Tyres and Batteries and was appointed to the position of Acting Supervisor Tyres and Batteries on 21st July 1993 and confirmed on 6th September 1994 as the Supervisor, Tyres and Batteries.
4.2 The grievor was summarily dismissed with effect from 16th July 2010 for gross misconduct and substantial neglect of duties.
4.3 In summary this is the evidence of the witness of the employer:-
Ms Prasad
She gave the following evidence on oath:-
“1. We noted that old tyre casing left behind by the customers were being sold from our premises.
2. The discrepancy the auditor noted was that two .... tyres were missing during the general stock take and these tyres were received when transferred from Rakiraki Branch to Suva Tyres. The quote registered into the system in Suva Tyres means entry into the system so it becomes Suva Tyres stock and then these tyres were physically given out to Nabua Tire Centre without any document.
3. The internal audit noted during the audit was the acquisition and disposal of vehicles by the Supervisor Tyres and Batteries who was Segran Nair. Audit noted that from 2001 until the date of investigations Segran Nair had own the total of 8 vehicles and had disposed those vehicles. In one case it was noted that vehicle registration BU864 was sold in tender...”
“1. Segran you have been alleged of being buying and selling vehicles while you were employed with Carpenters Motors. You understand this allegation?
The Answer was recorded – “yes”.
4.4 The evidence of the grievor, Mr Nair given on oath is summed as following:-
- He was employed by Carpenters for nineteen and half years where he was in position of the Supervisor Tyres and Batteries at the time of his dismissal. He said that he was in-charge of Suva Tyre Centre, general supervision of Tyre Department and also performed other duties assigned by the Management such as general sales and marketing. He had 13 staff working under him, all of whom were based in Suva. He was out of office frequently as he had to check on the other branches and do sales.
- He confirmed that he was aware of the audit conducted by the company/employer which also involved an audit of the area under Mr Nair’s supervision of Tyres and Batteries department, when he was asked about the evidence he had heard in the Tribunal earlier given by Ms Prasad.
- While he was aware of the audit conducted by the employer, he told the Tribunal that he was not provided a copy of the Investigation Report although he agreed that he was interviewed by the audit team and during those interviews he became aware of the Report and findings therein.
- To him, this was like a “regular audit” that happened every quarter and any variances in stock were adjusted and where there was any discrepancies or shortfall, staff had to pay for it. Such regular audit, according to Mr Nair was in fact done by the Accounts department and not the Audit department.
- He stated that during the regular audit conducted every quarter, if there was any variation in stock, the action taken by the employer would be to identify the person-in-charge such as the store-man and recover money or give a warning letter. Normally, as the supervisor he was tasked to take such disciplinary action.
- He agreed that he was interviewed first time in relation to buying and selling of cars and the last interview was about a week (or two) before his dismissal. In the same interview, he admitted that he was put other two allegations by the employer such as matters relating to the management of his staff and selling of old tyre casings. He also admitted that he had signed written statements obtained by the employer in the course of their interviews although he never saw or was given the Audit Report that led to all the interviews and thereafter statements being recorded from him.
- In respect of the allegations of buying and selling vehicles, when shown an extract retrieved from LTA (Exhibit F), the Grievor agreed that in his last interview with the employer he was shown the same. He agreed that he had bought and sold 8 vehicles over a period of 10 years. He also stated that most of these vehicles were actually bought for his in-laws but registered under his name in all the circumstances. He then went on to give evidence on the financial aspects of the purchase and the subsequent sale of the vehicles. For example, he told the ERT that:-
- BU 864 was bought from one of the Carpenters staff for $1,000.00. The car needed some repairs and when he could not fix it because he could not get the parts, he sold the vehicle to his staff at the same price. The “LTA Vehicles Previously Owned by Client Extract” showed that he acquired the said car on 11/01/2001 and then disposed off on 22/01/2001. He maintained that he did not make any profit.
- DK149 was bought from Carpenters Used Cars by Mr Nair because his father-in-law had asked him to look for a car for his use and this is when he bought this car from Carpenters. According to Mr Nair, his father-in-law had send him the money with his brother-in-law from which he had bought this car for his father-in law. The LTA extract showed that the car was acquired on 02/09/2003 and disposed off on 14/02/2005. Mr. Nair agreed that he did not transfer the car to his father-in-law’s name immediately and kept it under his name for 2 years although he had given the car to his father-in-law to use because the employer had provided him a company car for his personal use. It was not clear whether or not he had disclosed this information to the company at the time of purchase. There was no evidence to suggest this in affirmative apart from Mr Nair saying that Carpenters had asked him to retain the car in his name for 3 years. No evidence was given by his in-laws to support the same.
- CN 205, he said was bought from Sakura Carz but financed by Carpenters Finance where this vehicle was to be used by his family in the village for the farm use. He bought it for $9,000.00 and made no profit on the vehicle. The LTA extract showed that the vehicle was acquired on 27/06/2002 and disposed off on 22/04/2006. It appears that this car was bought before the previous car (DK 149). This car was registered under Mr Nair’s name for 4 years.
- DZ 320 was bought after selling the CN 205 where Mr Nair’s family had asked him to look for a four wheel drive. Hence, he tendered this vehicle from FDB. FDB had informed Mr Nair that he had been successful in his tender so he had asked his family to send the money so he could purchase the vehicle as he had already paid from his own pocket for the tender deposit. He said that if he was not able to buy this vehicle, he would have lost his deposit for the tender. To that effect, he had to ask one of his friends who worked for Fletcher Steel to buy and clear this vehicle as apparently his family did not raise the money for this vehicle. Undoubtedly he disposed off the vehicle on the same day of acquiring the same as per the LTA extract (08/08/2006). He told the ERT that because he had won the tender, once he had acquired the said vehicle under his name, he had transferred it to “... his name on the same day”. He admitted that he was referring to his friend from Fletcher Steel who had in fact paid for the vehicle. Evidence was crystal clear that Mr Nair nor his family had the funds to buy the vehicle despite he had told the Tribunal that the vehicle was for the farm use for his family.
- EB 007 was bought for his brother-in-law who had seen the advertisement in the paper and gave him the money which Mr Nair said was actually his father-in-law’s money. He bought this vehicle because his brother-in-law knew that he was working for Carpenters Motors for last nineteen years and that he knew more about cars and therefore, he went to Nadi and bought the car. He said he made no profit on this. The LTA extract showed that the car was acquired on 07/11/2003 and disposed off on 02/11/2006. Clearly he acquired this car after buying CN205 and again under his name.
- M007, he had bought from Credit Corporation on tender and finance under his own name. He maintained that he made no profit on this purchase. The LTA extract showed that the car was acquired on 25/11/2004 and disposed off on 07/10/2008. Again, it would seem that this car was acquired after buying CN205 and EB 007, which would practically suggest that he had three cars between the period 2002 -2004 which he disposed two in 2006 and one in 2008.
- CQ 537 was bought from Carpenters Used Cars. The LTA extract showed that the car was acquired on 24/11/2008 and disposed off on 24/11/2008. It is clear he bought and sold this vehicle on the same day. When asked the reason how and when he disposed this, Mr Nair said he could not recall. He said he sold it to a “guy working for Golden Ocean Fish .... Subhash...”. This car is clearly bought one month after disposing off M007.
- LT 435 was bought under a taxi permit. The LTA extract showed that the car was acquired on 25/04/2003 and disposed off on 05/06/2010. Given the disposal dates on the LTA records, again it would seem that he had this car under his name whilst he owned also CN 205 until disposed in 2006; EB 007 until disposed in 2006; and M007 until disposed in 2007.
- Mr Nair then went onto give evidence on the allegation of the missing tyres and tyre casings being sold from the Company premises. He told the Tribunal that “...actually these two tires were missing from my branch and I talked to auditors that two tyres were missing from my branch...”. He said that he had highlighted this to the auditors and continued to state that:-
“...Actually these two tyres came from Rakiraki branch to Walu Bay Branch. And my store man received the tyres at Walu Bay and next morning Nabua Branch called and asked the Store man did he received two tyres from Rakiraki branch and the store man said YES. He said my branch ... took those tires. Why we couldn’t find the tires that came from Rakiraki Branch because Rakiraki branch don’t have any computer there only have manual docket and my store man released any goods without any document...”
“...After that I went to see my boss who was Mr Davend Goundar and he said Segran Nair is new to this Tyres Department and you discuss with the Finance Controller and see what you can do. I discussed with the Finance Controller and he said the store man released the goods without any document and you ask him to pay for the tyres. So I got one form from Accounts Office to sign and get it back to Finance... Once he signs the forms than we cannot discipline again on the same matter...”
5.0 The Law: Summary Dismissal under the ERP 2007
5.1 It was the employer’s defence that they had invoked section 33(1) of the ERP 2007 as their statutory right to summarily dismiss an employee. They carried out summary dismissal against the grievor pursuant two grounds, being sections 33(1)(a) and (d) of the ERP. The employer has relied on the case of Central Manufacturing Company Limited v Yashni Kant (Unreported Fiji Supreme Court Case Number CBV 0010 of 2002 in support of their legal arguments as contained in their Closing Submissions filed on 7th November 2011. No opposing legal submissions with case-law authorities supporting the grievor’s position were submitted to this Tribunal.
5.2 The facts in this grievance indicate that the Grievor was accused of threefold allegation:-
5.3 Hereafter, the Employer took steps to summarily dismissed Mr. Nair which they say was only done after Mr Nair was accorded due process of investigation in terms of an audit being conducted into the operations handled by the grievor. Subsequently, disciplinary action was invoked after three interviews were conducted before a letter of termination pertaining to summary dismissal was handed to Mr Nair.
5.4 It was proved that a termination letter dated 16th July 2010 was given to the grveior when he was summarily dismissed.
5.5 This letter was marked as Exhibit E as part of employer’s documents exhibited to the Tribunal which contained the three allegations clearly on page 1 and reference was made to meeting being conducted between the grievor and the Audit Team of Carpenters on 7th July 2010. In the same letter the employer stated and I quote:-
“...The Company has concluded that in all the circumstances and based on the foregoing reasons and particulars, you are guilty of gross misconduct and substantial neglect of duties as Supervisor Tyres and Batteries. Accordingly, and for the reasons set out herein, you are summarily dismissed without notice...” unquote. (Bold is my emphasis)
5.6 The grevior’s main contention or allegation of unfair and unjustified dismissal derives from the above action of the employer and which he has submitted in preliminary submission dated 27th April 2011 in the following manner:-
- That the summary dismissal of Segran Nair is grossly disproportionate to allegations against him and which remain unsupported by any evidence from the Employer.
- The Employer failed to produce any evidence of the allegation that the Worker had engaged in the business of buying and selling of cars. Indeed over the years he has acquired a few vehicles for his private family use and disposed of them for better options. There is nothing sinister in this.
- The second allegation of failing to adequately control and manage staff is similarly unsupported with any specific and neither did the Employer demonstrate any negligence of the Worker’s part.
- The third allegation is also totally misplaced. Old tyre casings are of no value and are indeed the property of the customers. They are not part of the company’s stock in trade. Some customers leave them behind for disposal and it is common practice for staff to be allowed to take them away.
- The company’s claim of loss and attempt to sell them is tantamount to cheating the customers.
5.7 The grevior further submitted that the Employer’s actions in making the allegations and summarily dismissing the Worker were unjustified and unfair on the grounds that it:
- acted arbitrarily and denied the Worker due process by failing to conduct a fair inquiry and process leading to termination;
- failed to consider his prior unblemished record of employment;
- failed to allow the Worker to be represented in his grievance;
- failed to allow for mitigation before dismissal;
- acted in breach of the Worker’s employment contract; and
- accorded the penalty of summary dismissal which was in the circumstances otherwise predetermined and disproportionate to the gravity of the allegation.
5.8 Indeed, the first point of reference for termination or dismissal on the premise of good faith relationship is always the contract of service between the parties. This goes to the definition of an employment; employer; and worker in the ERP which all make reference to ‘contract of service’ being a basis for an employment. A contract of service is defined as: “...a written or oral contract, whether expressed or implied, to employ or to serve as a worker for fixed or indefinite period...” (Underlining is my emphasis).
5.9 Here the worker submitted to the Tribunal that he was subject to an employment contract between himself and the Employer as a member of BP (SS) Co Ltd & W R Carpenters Group Salaried Staff Association under a collective agreement between the Union and the Employer which acted as the implied term of his employment. He was also subject various company policies from time to time.
5.10 None of these documents, either the collective agreement or policies were tendered in evidence but I take it that there was no contention that it existed.
5.11 It would have been helpful to peruse and assess the HR policies of the employer pertaining to the three allegations although during the hearing it was clear there was no written policy as to how the tyre casings would be disposed off that were left behind by the customers other than a directive from one of the director’s of the company; and whether or not the employer had explicitly made known to the workers whether or not they could engage in the acquisition and sale of vehicles procured as an employee of Carpenters entitled to discount on the same.
5.12 The “good faith” relationship that I allude to in a contract of service was tested in the 1997 decision of the Supreme Court of Canada in Wallace v United Grain Growers Ltd 1997 CanLII 332 (SCC); [1997] 3 S.C.R. 701 where the Court injected into the employment relationship the requirement of “good faith conduct” at the time of termination, where in passing the Court spoke of “special relationship” which governs the parties to an employment relationship. Wallace is useful in considering “good faith and fair dealing” where the Court noted that:-
“..., at minimum, ... in the course of dismissal employers ought to be candid, reasonable, honest and forthright with their employees and should refrain from engaging in conduct that is unfair or is in bad faith by being, for example, untruthful, misleading or unduly insensitive...” (at page 46).
5.13 What this means is that as long as the employer before proceeding to any punitive action (such as disciplinary action or even termination) as well as at the time of the dismissal is honest, upfront and makes the employee aware of the alleged misconduct which may potentially led to dismissal as per the contract of service (implied or express), for whatever reason (lawful cause or no cause) and which the employer is able to communicate to the worker in a dignified and fair manner without inflicting humiliation or misleading in terms of giving any false information, whether in writing or not, the requirement of “good faith” should suffice.
5.14 In the grievance before me, clearly there is a collective agreement binding the parties in a contract of service and for the most part, the allegation of unfair dismissal hinges on the grievance and disciplinary procedures of the employer that was accorded to Mr Nair: this is alleged to be unfair substantially and procedurally. While the grievor did not furnish any closing submissions in support of his legal arguments, as normally seen, in this case too, the grievor is seeking the Tribunal’s determination on the issue of whether or not the summary dismissal was first, substantially justified under s33 and second, was it procedurally fair in terms of the due process when the summary dismissal was accorded to him.
5.15 For ease of reference, this Tribunal will quite extensively rely on the decision of the Employment Relations Court (or “the ERC”) as held in the case of Carpenters Fiji Limited v Isoa Latianara ERC No. 7 of 2011, mainly in terms of the procedures for summary dismissal. Since this particular decision has been handed down by the ERC, I have set out in my subsequent decisions how this Tribunal now assesses the basis of “unfair dismissal” allegations and at the risk of repeating myself, which is unavoidable at all times, I shall set out those principles once again.
5.16 First point to note is that the ERP 2007 is now is an established law of Fiji governing employment relationship between an employer and employee (or worker). Therefore the law on summary dismissal has been codified in the ERP 2007 and the employer’s counsel has rightly pointed out, which was indeed confirmed by the Court of Appeal in the case of Shell Fiji Ltd v Johnson [2010] FJCA 54; ABU0012/2009 (23 September 2010) at paragraph 30 and 31 (and which was also upheld by the Supreme Court[1] at paragraphs 26 and 27). His Lordships, Byrne and Callanchini J have stated that:-
“The right of an employer to summarily dismiss an employee at common law has been modified in Fiji by statute. At the relevant time, section 28 of the Employment Act Cap 92 (now repealed) stated:
“28 An employer shall not dismiss an employee summarily except in the following circumstances:
(a) where an employee is guilty of misconduct inconsistent with the fulfillment of the express or implied conditions of his contract of service;
(b) for willful disobedience to lawful orders given by the employer;
(c) – (e)....”
5.17 In the same Court of Appeal case, his Lordships went further and stated that:
“In the absence of a more generous term in an employee’s contract of service, the summary dismissal of an employee will be wrong if it is inconsistent with the provisions of section 28.”
5.18 Here, the Lordships considered the case of Fiji Public Service Association and Satish Kumar –v- the Arbitration Tribunal and Another (unreported Civil Appeal No. 13 of 1999 delivered on 19 February 2002) where the Fiji Court of Appeal had said (approving the comments made by the judge at the first instance) at page 10:
“Section 28 provided that an employer should not dismiss an employee summarily except in the circumstances specified therein. .... His Lordship said that the section did not confer an unfettered right to dismiss an employee where any of the matters specified in section 28 was found to exist, rather it removed the common law right to dismiss except where paragraphs (a) to (e) applied. He added that if any of the paragraphs applied, the common law right continued and there was not statutory or other objection to that right being fettered by an agreement between the employer and its employees....”
5.19 Section 33 (1) of the ERP 2007 repealing section 28 of the Employment Act is no doubt similar in various ways. It does not also confer an unfettered right to the employer to dismiss an employee except under those matters specified under s33(1)(a)-(e) where it clearly stipulates that:
“No employer may dismiss a worker without notice except in the following circumstances –
(a) where a worker is guilty of gross misconduct;
(b) for willful disobedience to lawful orders given by employer;
(c) for lack of skill or qualification which the worker expressly or by implication warrants to possess;
(d) for habitual or substantial neglect of the worker’s duties; or
(e) for continual or habitual absence from work without the permission of the employer and without other reasonable excuse.”
5.19 Under the old law (and certainly the position under the current law would be same) that where there is legal confusion or lacuna in the statute, often common law position has guided the Tribunal and Courts for a clearer interpretation: however, now in the face of an explicit statutory provisions (ERP 2007), to better understand how to determine whether or not a summary dismissal is “wrong” in law (substantially and procedurally), other relevant and applicable provisions in the ERP must be read and considered in its totality. These provisions are:-
“Section 33 (2) stipulates:-
The employer must, provide the worker with reasons, in writing, for the summary dismissal at the time he or she is dismissed.
Section 34 states:
If a worker is summarily dismissed for lawful cause, the worker must be paid on dismissal the wages due up to the time of the worker’s dismissal.
Section 114 provides:
If a worker is dismissed, the employer must, when dismissing the worker provide to the worker with a written statement setting out the reasons for the dismissal.
Section 7 of Schedule 4 (Section 110) stipulates: If-
(a) the worker is dismissed; or
(b) the worker is not satisfied with the employer’s written response; or
(c) the employer fails to provide, within 7 days after the day on which the employer receives the worker’s written statement, a written response; or
(d) the employer and worker have agreed to waive the requirements for an exchange of written statements and the worker is not satisfied with the employer’s response to the grievance,
the worker may refer the employment grievance to the Mediation Services in the prescribed manner.”
(Bold and/or underlining is my emphasis)
5.20 In a normal cause, the grievor has a right to come before the ERT for redress and remedies for ‘employment grievance’ under sections 109, 110 and 111 of the ERP for any type of “dismissal” pursuant to section 7 of the Schedule 4. Under section 4 of the ERP:
“Dismissal” means “any termination of employment by an employer including those under section 33” (my emphasis).
5.21 In a similar manner, the drafters of ERP have generally intended Section 33 of the ERP as a presumption in favour of the employers where clearly the requirements for a “lawful summary dismissal”, must be adhered to. This is confirmed by section 30(4) of the ERP where it is clearly stated that:-
“Nothing in this Promulgation precludes either party from summarily terminating a contract of service for lawful cause”.
5.22 This was further clarified by your Ladyship, Wati J in her judgment of Carpenters Fiji Limited v Isoa Latianara ERC No. 7 of 2011, where the Court had looked at how contract of service can be interpreted in view of termination methods. Here, the Court noted that there were two mutually exclusive dismissal regimes (in the worker’s employment contract) where dismissal could occur either by a week’s notice or payment in lieu, or summary dismissal for serious misconduct without notice or payment in lieu. Additionally, the Court noted in Isoa’s case that the employer was entitled to dismiss summarily for gross misconduct pursuant to s33 of the ERP. The Court went onto say and I quote:-
“...Indisputably the termination clause permits termination without cause....and also for summary dismissal, without notice for serious misconduct. Once the employer made serious misconduct the basis of termination, it is then correct for the Tribunal to make a finding as to whether the cause for termination was established by the employer as the onus to establish the ground is always on the employer. When the Tribunal made a finding that the lawful cause to terminate was not established, the termination became wrong and unlawful...” (unquote)
5.23 Suffice to note that where good faith requirement is concerned in this case, there was no ambiguity or false information or misunderstanding by the grievor that the employer had chosen to exercise a statutory right under s33 of the ERP to invoke summary dismissal of the grievor as per the letter of termination (Exhibit “E”). This is perhaps, the most fundamental step in satisfying the requirement under section 33 (2) and section 114 of the ERP. The worker or employee must know what is the actual breach of law or contract of service that has given rise to the grievance or dispute in the first place.
5.24 And, to test properly whether or not the employer satisfactorily under the law complied with the mandatory requirement of section 33 (2), that is to provide reasons in writing at the time of dismissal, I am of the view that first it must be established whether or not there was a lawful cause for summary dismissal (as per Section 34 where it states that: “If a worker is summarily dismissed for lawful cause, the worker must ...”). Lawful cause is vital when determining whether or not it sufficed for purposes section 33(2) of the ERP on basis of good faith that must exist between the parties at all times, more so at the time of ‘without notice’ terminations. The circumstances and the exact nature of the alleged offences (that is the substantive allegations) that gave rise to instant termination without complying with the usual notice period must be able to justify lawful cause under s33.
5.25 I must say that section 34 of the ERP makes only a reference but does not elaborate what really constitutes a “lawful cause”. To better understand this concept I am making reference to some case authorities where Courts have attempted to define “lawful” or “just” cause as seen in the case of Davis -v- Unemployment Insurance Review Board of the Indiana Department of Workforce Development, 900 NE 2d 488 (2009), where Justice Ezra Friedlander of the Court of Appeals of Indiana wrote:
"Fault or just cause for discharge, in the unemployment context, means failure or volition, and does not mean something blameworthy, culpable, or worthy of censure. This includes, among other things, a carelessness or negligence of such a degree or recurrence as to show an intentional or substantial disregard of the employer's interest, or of the employee's duties or obligation to his employer."
5.26 In McIntyre v Hockin 16 O.A.R. 498 (1889), Justice Jill Parrish of the Supreme Court of Utah declared that:
"The term just cause connotes a fair and honest cause or reason, regulated by good faith on the part of the party exercising the power. Additionally, a just cause reason for termination is not "trivial, arbitrary or capricious, unrelated to business needs or goals, or pretextual."
5.30 Further, Justice Laing in Caudle v. Louisville Sales & Service Inc., 1999 SKQB 276 adopted these words:
"Just cause is conduct on the part of the employee incompatible with his or her duties, conduct which goes to the root of the contract with the result that the employment relationship is too fractured to expect the employer to provide a second chance."
5.31 In that sense, one would assume section 33(1) of ERP gives the prerequisite premise for “lawful cause” upon which any summary dismissal can be effected, as long as it is based on one or any of the lawful grounds [s33(1)(a-e)] stated therein. Here the employer did not specifically state in the termination letter but generally implied that it relied on the following grounds contained under section 33(1)(a) and (d) of the ERP where states that:
“No employer may dismiss a worker without notice except...
(a) ...where a worker is guilty of gross misconduct...
(d) ...for habitual or substantial neglect of the worker’s duties.”
5.32 In Port Arthur Shipbuilding Co. v. Arthurs 62 DLR 2d 342 (1967), Justice Schroeder of the Ontario Court of Appeal stated that:
"If an employee has been guilty of serious misconduct, habitual neglect of duty, incompetence, or conduct incompatible with his duties, or prejudicial to the employer's business, or if he has been guilty of willful disobedience to the employer's orders in a matter of substance, the law recognizes the employer's right summarily to dismiss the delinquent employee."
5.33 Similarly, in the Court of Appeal case of Shell Fiji Ltd v Johnson his Lordships, Byrne and Callanchini J (in Full Court of Appeal) has stated that:
"...The termination of employment by summary dismissal in this case will be wrong unless (a) the Respondent's misconduct fell within one of the circumstances listed in section 28 and (b) was of sufficiently serious nature that it would entitle Shell to regard the contract of service as being at an end..."
5.34 Noting such positions of the international and local Courts, it is my opinion that s33 of the ERP being generally invoked or implied without any specific reference being made to s33(1)(a) and (d) of the ERP as the "lawful" grounds of the employer in the termination letter when the offences alleged here refers to "gross misconduct" and "substantial neglect of duties", does not automatically render or contradict or fall foul of s33(2) of the ERP (in terms of providing the exact reasons) for termination. The employer should be able to assert and allege s33(1)(a) and (d) as grounds for summary dismissal in relation to a gross misconduct or substantial neglect of duties if in the body of the termination letter there was implication that the alleged (mis)conduct was considered to be a serious breach of the contract of service (implied or express) and/or breach of HR Policies or code of conduct imposed by the employer; and where, of course, they found the grievor also guilty of the alleged gross misconduct. The facts of the case also should be able to prove that there was evidence of the grievor substantially neglecting his duties. It is more problematic when you are confronted with matters where there is no compliance with s33(2) of the ERP at all, in terms of the employer not making it known to the grievor the actual reasons in writing why he/she is being summarily dismissed.
5.35 In my view, this grievance matter meets the requirement of s33(1) of the ERP when the employer has attempted to give their (lawful cause) or reasons for summary dismissal in the detailed termination letter provided to the grievor as shown at paragraphs 1-5 and I quote:
"As you are aware, the Company's Internal Audit Team has been conducting an investigation into the operations of Carpenters Motors in relation to allegations of discrepancies and misconduct.
In the course of these investigations, some allegations have surfaced involving you and these include:-
As you are aware a meeting was convened with you by the Audit Team at Carpenters Fiji Limited on Wednesday 7 July 2010. At this meeting, the foregoing allegations were put to you and you were given an opportunity to respond to these allegations and to give to the Company such explanations as you felt appropriate in the light of the material evidence made available.
The Company has very carefully considered the allegations, the evidence in support including the findings of the Audit Team as well as taken into account your response given at the meeting.
The Company has conducted that in all the circumstances and based on the foregoing reasons and particulars, you are guilty of gross misconduct and substantial neglect of your duties as Supervisor Tyres and Batteries."
6.0 Is Summary Dismissal Justified in Substance and Procedure?
6.1 Given that it has been established that the employer has provided the above reasons or (lawful cause) as a basis for summary dismissal to terminate contract of service (implied or express), I will now assess whether or not there is compliance with s33 of the ERP. To begin with, I have attempted to explain in my other judgments how this Tribunal views s33(1)(a) of the ERP. In my view, there are threefold approach:-
6.2 Where substantive allegations are concerned, Johnson's case as considered by the Full Court of Appeal has tremendously assisted this Tribunal to maintain its focus on the alleged offences of gross misconduct and substantial neglect of duties; the employer's investigation process to establish the lawful cause or the guilt of the grievor; and the employer's final decision based on the investigation findings to declare the alleged (three) offences first, within the category of gross misconduct under s33(1)(a) of the ERP and second, within the category of substantial neglect of duties under s33(1)(d) of the ERP to warrant summary dismissal.
6.3 Where procedural fairness is concerned, I have noted that Lordships, Byrne and Callanchini J in Johnson's case had noted and declined the trial judge's finding that the Respondent's omission to respond to the allegations in actual fact had caused the termination and that an omission to respond was not a misconduct that entitled to summarily dismiss the Respondent. The trial judge had noted and held that there was breach of implied term of employment contract where the employer had failed to either make payment in lieu of notice or give the respondent one week's notice before termination. The Full Court of Appeal considered and held that the respondent's employment was terminated because of his confirmed involvement in fraudulent fuel deliveries and not as the trial judge had found that the employment was terminated because of the respondent's failure to respond to the allegations of fraudulent fuel dealings. The Full Court then held that such a misconduct of fraudulent dealing was of sufficiently serious nature to warrant summary dismissal under s28 of the Employment Act Cap.92. The Full Court further held that the respondent was neither entitled to notice of termination nor was he entitled to payment in lieu of notice but only wages due to him up to the time of his dismissal.
6.4 Because this aspect was not challenged, I regard the Full Court of Appeal's finding in the Johnson's case to be intact or the current position as the contentious issue that was in fact appealed to the Supreme Court revolved around only one major point of contention: this was in regards to the award of general damages of $10,000 based on the legal principle outlined in the case of Central Manufacturing Company Limited v Yashni Kant (Unreported Fiji Supreme Court Case Number CBV 0010 of 2002). Yashni Kant's case outlines the common law principle which implies a term in an employment contract to deal with employees fairly at the time of dismissal. I will discuss this later when determining whether or not the grievance was also unfair in the manner it was accorded to the grievor.
6.5 First let us look at what constitutes "gross misconduct". Various case-laws (State v Arbitration Tribunal & Ors, High Court Suva, Civil Action No. HBJ of 2007; Clouston & Co v Corry [1905] UKLawRpAC 66; (1906) A.C. 122 at 129; etc) have concluded that "gross misconduct" is not a concept capable of being defined. Therefore, gross misconduct is not a fixed concept and shall depend on the circumstance (as per the principle in State v Arbitration Tribunal & others, High Court, Suva, Civil Action No. HBJ of 2007). In that sense, gross misconduct is naturally not defined by the ERP 2007, but looking at a "misconduct", this can be best described as the employee's failure to adhere to the rules and policies of the employer during working hours (and sometimes even after hours).
6.6 Any such behaviour is normally deliberate, intentional and not as a result of circumstances beyond the control of the employee. Gross misconduct is thus that conduct on the part of the employee which is so bad that it destroys the employer/employee relations completely, and merits instant dismissal without notice or pay in lieu of notice (as decided in the case of Lamb v The Commissioner of Police [2011] NZERA 72]. Some common forms of misconduct that come to the ERT as grievance are: theft, fraud, dishonesty, negligence, and insubordination.
6.7 In this grievance matter, it was allegations of dishonesty and negligence when the grievor was alleged to have bought and sold vehicles which was regarded to be in direct conflict with the core business of Carpenters Motors; failure to adequately control and manage staff which led to stock being unaccounted for; and there were instances whereby staffs were selling old tyre casings and pocketing the money, and as their supervisor, Mr Nair had not taken reasonable action to safeguard or check these stock on the premises of the company.
6.8 I want to stress that "neglect" or "substantial neglect" is also not defined by the ERP 2007 but ordinary meaning alludes "to be remiss in attending to or to fail to do". If a claimant has been amiss in attending to or has failed to do the duties of his or her job, he or she obviously will have violated a standard of behaviour which the employer has a right to expect of his or her employees. It seems that an employee's neglect of duty may be attributable to either ordinary neglect or gross negligence. "Ordinary" neglect would consist of acts of minor negligence, where no substantial damage to the employer can result. "Gross" negligence generally involves substantial damage (actual or potential) to the employer's interests.
6.9 The test that is best applied on law of dismissal for "conduct", whether gross or neglect of duties was best described by his Lordship Justice Gates (as he was then) in his decision of Philips Thomas v Fiji Electricity Authority [2004] FJHC 303 where he had applied the ratio in the English Court of Appeal case of X vY [2004] EWCA Civ 662 as follows:-
"...the law on dismissal for conduct is clear. It has been said to be a four pronged test. The Foley test was cited with approval in X v Y (supra at para 18):-
"the employer must show that he believed that there had been misconduct by the employee; that there were reasonable grounds for that belief; that he had carried out as much investigation into the matter as reasonable in all the circumstance; and that the decision to dismiss him for that conduct reason was within the range of reasonable responses of a reasonable employer."
6.10 To that end, this ERT will not substitute its views for that of the employer in determining whether or not the employer acted reasonably. Rather the Tribunal has a task to test objectively whether or not the employer had acted reasonably when dismissing the grievor (as per the principle in Michael Strouthos v London Underground Limited, England and Wales Court of Appeal (Civil) Decisions, [2004] (18 March 2004).
6.11 Further the fact that the ERP 2007 does not provide guidance as to how to arrive at a "guilty" verdict for summary dismissal for gross misconduct or how to assess substantial neglect of duties, this Tribunal has the task to test objectively whether or not the employer acted reasonably in establishing a lawful cause as a basis to regard the grievor's alleged misconduct within the range of gross misconduct. And whether or not the employer accorded fair process when establishing that guilt.
6.12 Whilst no contract of service in the form of collective agreement or employer's policies was produced to the Tribunal, it appears that the grievor and his representative both understood that the grevior was bound by implied terms and conditions therein (at Clause 4.0 of Grievor's Preliminary submissions). After analyzing the evidence in this case, it is my opinion that the employer had a reasonable expectation of the grievor's conduct, at least within the implied terms and conditions of his employment. In that regard, in a normal working scenario, he should have understood and known by virtue of his almost 20 years of service with the Employer and by holding a supervisory or leadership position in his respective department where he had 13 staff under his control and management what he was required, permitted or restricted to do or not do.
6.13 Clearly good faith is a premise of every employment relationship. This cuts both ways where any employee in a more senior position is expected to be a role model in terms of practicing the acceptable standard of conduct and thus knowing that there would be certain conduct he is either expressly or impliedly not required to engage in. For example, in this case:-
- Mr Nair could not engage in buying and selling of vehicles if it conflicted with the core business of his employer, particularly where he was entitled to procure a vehicle from his employer on a discounted rate by virtue of the fact that he was a privileged employee. If he was genuinely buying and selling these vehicles for his personal use, then he should not have attempted to buy any one of the eight vehicles under his name either on discount or by depriving a sale to the client of the employer and thus disposing the same for whatever reason whether he made a profit or not. Because as an employee he was given a discounted rate, this in itself was beneficial to the worker. When he sells the same item at the same price to a friend or even buys for his in-laws at a discounted rate, and if that (third party) buyer was to purchase the same vehicle outright from the company, then obviously such discounted rate would not have been applied or given. This was admitted by Mr Nair.
- On the face of the facts, while it may appear that Mr Nair was not doing a business of his own on the side for his own benefit or profit as he argued, in any given employment relationship there still exists a fiduciary duty or loyalty towards his/her employer to seek permission before he/she could engage in any such activity that was directly linked to the core business of Employer (here, that being, Carpenters Motors). It was clear that Mr Nair did not disclose to his employer at any time that he was buying vehicles for a third party, especially where DK 149, CH 205 and CQ 537 are concerned which all three vehicles were either bought on finance or directly from Carpenters.
- In the case of UBS Wealth Management (UK) Ltd v Vestra Wealth LLP [2008] EWHC 948; [2005] ICR 450, at paragraph 10, the Court had noted that "the more senior the staff, the greater the remuneration and the greater the degree of loyalty, fidelity and diligence is required". (Bold is my emphasis).
- UBS case examined and accepted that the parties while in course of their employment owed duties of loyalty (or fidelity), good faith, trust and confidence. Here, in fact the purported breach of duties of fidelity, good faith, trust and confidence occurred after a senior staff had left the company. He was alleged to have attempted to cause serious economic loss to his previous employer by taking unfair advantage by attempting to organize and cause other employees to also leave and compete through his abuse of confidential information and skills he had obtained when he was an employee. While the facts are unrelated, the principle of implied duty of fidelity and obligation to act in good faith are always contingent on both sides in any employment relationship. Without any doubt, the duty of loyally is owed by an employee to his/her employer. It is well established that an employee impliedly contracts to render good and faithful service to his employer (Harvey on Industrial Relations and Employment Law at paragraph 597). This means that the employee must be "loyal to his/her employer and to act with good faith in its best interests, devoting his/her time and talents to his/her employer": see Berryland Books Ltd v BK Books Ltd [2009] EWHC 1877, as per HHJ Hodge QC at para.22.
- Although neither party had put forward any submission on this area of law, I am still obligated to test how and when Mr Nair breached his fiduciary duty, if any.
- It is trite that duty of loyalty owed by an employee to his employer does not, without more, mean that an employee is a fiduciary. The leading authority is the decision of Elias J (as he then was) in Nottingham University v Fishel [2000] ICR 1462, a decision which has been cited with approval in cases such as Helmet Intergraded Systems v Tunnard [2006] EWCA Civ 1735; [2007] IRLR 126 and Cobbetts LLP V Crowder [2009] EWHC 786. The principles also emerge from Boston Deep Sea Fishing and Ice Company v Ansell (1888) LR 39 C. D 339 and Neary v Dean of Westminster [199] IRLR 288 where the Courts have underpinned the following principles:-
- (i) An employee is not a fiduciary simply by virtue of being an employee [Nottingham University; p1490 F-G];
- (ii) Circumstance may, however, arise in the context of an employment relationship which place the employee in the position of a fiduciary [Nottingham University; p1490 G-1491B];
- (iii) Any implied fiduciary obligations must be consistent with the contractual terms [Nottingham University; p1491 G-H];
- (iv) The question in every case is whether the duties undertaken by the employees were such that he put himself in the position where he had to act solely in the interests of the employer [Nottingham University; p1493 E-F]. This can be looked at by considering whether the employer could control what the employee did or conversely, was vulnerable to misuse by the employee of his position [Helmet Integrated paras. 44-45]; and
- (v) An employee may also be put in a position where fiduciary obligation arise because of the circumstance are such that the employee is put in a position where he is obligated to account [Nottingham University; p1490 F-1491B]. This includes circumstances where the employee uses his position as an employee to further his own interests or obtains an advantage by virtue of his position as an employee [Nottingham University; p1497B-C, 1497E-F and 1498 A-C].
- After examining the facts of this case, I am in no doubt that there was an implied fiduciary duty in this employment relationship between Carpenters and Mr. Nair. While I agree that the employer could not prove with absolute certainty that in all the eight instances the way Mr Nair engaged in the buying and selling of the cars in fact affected or undermined their core business in terms of loss of client vis a viz sale or profit, Mr Nair did admit that in one instance he denied a Carpenters customer from a sale. In fact he agreed that he had received discount by virtue of his position as a senior employee when he bought cars under his name from Carpenters for in-laws. Hence, if he sold these cars again, whether or not he made any profit, is irrelevant. At the outset, to this Tribunal, it was highly suspicious that he procured all the eight cars under his name including those he purported to have been financed by his in-laws for their use as per his evidence. Clearly he gained an advantage as an employee and failed to account to the employer under the fourth fiduciary duty as outlined above.
- Further, Mr Nair implied that he could not be held accountable for loss of any stock where he was obviously in-charge of that department as the supervisor and head of the thirteen staff. In my opinion, he could not entirely absolve his duty of care towards protecting and accounting for the stock he had received in his branch that came under his supervision. Thus completely laying blame for any shortfall or improper handling of stock on his staff. If something is adhered to as per the employer's instructions where Mr Nair was heading that department, the overall responsibility will rest on him.
- What aggravates this second allegation by the employer is that he was already put on notice about improper documentation raised by his department and previous shortfalls as was the evidence. Consequently, he should have acted more vigilantly to ensure that stock in trade was protected under his supervision whether or not there was proper system to track the same. Reoccurring events would suggest obvious neglect of duties to pay heed to apparent gap in the system that would have had the potential for abuse or mismanagement if certain staff were to move stock around knowing full well that the head of the department was not taking this area of responsibility seriously. To this Tribunal, if Mr Nair was warned about this in the past, he cannot apportion blame on the store man and always have him/her surcharged to rectify the wrong.
- Where the final allegation is concerned, Mr Nair, in my view cannot say that he was not aware in his 15 years in the same department that his staff (or boys) working under his supervision were selling and pocketing cash from the sale of tyre casings without his knowledge, regardless of who these casings belonged to. While there is no loss of earnings to the employer as these casings are not a property of the employer, the grievor clearly should have known what was the employer's directive for disposal of the tyre casings. If the employer had given directive that such casings are to be disposed off in a particular manner, then the grievor should have sought permission from the employer if his staff wanted to take the same for personal use or sale. It surprises this Tribunal that Mr Nair was not aware how these casings were disposed off and he never attempted to check if they were disposed off as per the employer's directive or expectation. He appeared to be complacent or disinterested as to what was happening in his own department when it is expected of a senior management staff to impose and follow all the employer's rules and policies, whether codified or not. In this instance the only redeeming feature is that there was no economic loss to the employer as I agree the tyre casing referred in this allegation was not the employer's stock in trade.
7.0 Final Determination
7.1 Mr Nair pleaded that he worked for Carpenters for almost 20 years with unblemished career. I agree. But this cannot be enough to exonerate him of the serious charges or offences alleged against him.
7.2 In the case of Sinclair v Neighbour [1967] 2 WLR 1, the Court of Appeal ruled that one act of dishonesty was sufficient to warrant summary dismissal where it cautiously demarcated between placing less weight to the labeling of the act or misconduct with that of the facts that establish that misconduct. The employee in this case was summarily dismissed and his claim for damages for wrongful dismissal succeeded in lower court but Court of Appeal overturning verdict stated that:
"... I think that he (the trial judge) fell into error in attaching too much weight on the label and not enough to the facts. The facts were established. The fact that the manager took the money from his employer's till behind his back knowing that the employer would not consent was established; and it seems to me that it does not really matter very much whether it justifies the label 'dishonest" or not..." (my emphasis).
7.3 Even if there was no written policy as to how the trye casings were to be disposed off, being in the supervisory position, and that too doing the job for 15 years in the same department, Mr Nair cannot say he was not aware of the employer's rules or directives. Secondly, there is compelling evidence that he had engaged in the buying and selling of cars, at least on two occasions by gaining advantage as an employee and benefitting his relatives in that regard which deprived Carpenters of their rightful sale and profit. He could have referred his in-laws directly to the Carpenters Motors and thereafter, sought by mutual agreement with the employer to provide a discount if they consented. When the audit findings revealed these facts including that two tyres were unaccounted from the stock, the employer was clearly perturbed and ordered further investigation where Mr. Nair was interviewed on various occasions.
7.4 Evidence from the employer's witnesses indicated that the three allegations outlined above that the employer gave as their reasons for summary dismissal was established to this ERT as these acts or conduct was not authorized by the employer. Naturally, if it was authorized, then upon discovering that Mr Nair was in such practice that violated his fiduciary duty, the employer would not have reacted immediately in terms of initiating investigation (and interviews) and thereafter invoking the harshest of all the penalties, being summary dismissal of the grievor. In this regard, failing adherence to employer's policy or rule, it provided the employer a basis to allege "gross misconduct" in terms of having a valid reason or cause where the grievor's actions did not meet the employer's standard of conduct set down to buy and sell cars as an employee of Carpenters. Furthermore, the grievor is also found to be in substantial neglect of duties particularly where the stock in trade, the two tyres that could not be accounted for that was established to have been sent to his branch first, then moved again under his supervision. The third allegation appears to a minor negligence; nevertheless Mr Nair's position was such that he cannot escape responsibility that easily. As a supervisor, he should have followed the employer's directive and disposed off the casings properly.
7.5 In my opinion, at least two of the offences were serious in nature and therefore it is this ERT's finding that the employer's main reasons for dismissing the grievor was for a lawful cause which was duly established from the evidence. Once lawful cause(s) is established, it should thus suffice the criterion for s33(1)(a) for "gross misconduct" or s33(1)(d) for "substantial neglect of duties". Here, the employer has made these two grounds as a basis for termination, where they have rightly invoked section 33(1) (a) after properly conducting a "guilty" assessment of the alleged offence and notifying the grievor of the same. They also invoked s33(1)(d) and informed the grievor of the facts ensuing from that allegation which was also established to this ERT. Hereafter the employer will be required to immediately terminate the grievor where procedures are concerned for summary dismissal (as per the principle in Isoa's case – see below).
7.6 Because the burden of proof is always on the employer to disprove grievance on the basis that it was carried out lawfully and fairly, to eliminate confusion or better still legal ambiguity, ideally Section 33 of the ERP should have further stated that a dismissal must be for a fair reason after following a fair procedure, as this is a concept that both the employers and employees are failing to completely understand. In my opinion, although all the mentioned reasons for ending the employment relationship will have the same end result, different procedures would have to be followed prior to dismissing an employee. How else can an employer come to a guilty assessment of the alleged offence under s33 of the ERP unless some procedures for investigation and truth or fact finding are conducted?
7.7 In fact one of the four pronged Foley test for dismissal cited in X v Y [2004] EWCA Civ 662 is that:- that the employer had carried out as much investigation into the matter as reasonable in all the circumstance; and under s33 of the ERP, it is my view that prior to arriving at a guilty verdict, facts and evidence gathered by the employer will need to be reasonably and fairly assessed where at least the employee's views and objections have to be noted in line with the purported breach of the rules, policies and standards of the employer. This would be, in my humble opinion the prerequisite investigation process prior to arriving at the guilty verdict.
7.8 Notably, the Employment Relations Court in the case of Carpenters Fiji Limited v Isoa Latianara ERCA No. 7 of 2011 provided the following dicta to be followed where, Wati J has stated and I quote for quote:-
"...if there is serious misconduct, then it is the prerogative of the employer to terminate the employment immediately. If all these procedures of hearing and explanations are accorded to the employee, then the purpose of summary dismissal is lost..." (at page 8).
7.9 Isoa's case is not clear whether or not any procedures are required to ascertain the guilt of the grievor (and what sort of procedures should be used) prior to declaring the alleged conduct "serious", but it is quite clear that once a serious (or gross) misconduct is established in substance, then procedural fairness is not required for purposes of a summary dismissal. To that end, the employer could immediately proceed to terminate the grevior.
7.10 I must comment that it is a challenging task to find that balance between reasonably arriving at a guilty assessment and complying with s33 (2) of the ERP where reasons for summary dismissal must be provided in writing at the time of dismissal. For this, employer will have to carry out reasonable "procedures" for investigation as per any agreed grievance procedures and then communicate the same to the grievor in such a way that "good faith" (Wallace case) at the time of dismissal is not compromised. It would be even more difficult when any agreed internal grievance procedures within the confines of a contract of service (express or implied) requires giving both parties an opportunity to be heard including an appeal system where the decision of the employer can be reviewed and such internal mechanism will need to be respected under s110(4) of the ERP where it states that:-
"110.— (1) An employment contract must—
(a) contain procedures for settling an employment grievance, including confidentiality and natural justice; and
(b) where possible, in the case of sexual harassment complaints, the need for women to be represented on the grievance panel.
(2) The procedures required by subsection (1) must be—
(a) agreed by the parties and consistent with the requirements of this Part; or
(b) if there are no agreed procedures, the procedures set out in Schedule 4.
(3) All employment grievances must first be referred for mediation services set out in Division 1 of Part 20.
(4) Where an employment contract includes an internal appeal system it must not provide for appeal to the Tribunal or Employment Court, and the internal appeal system must first be exhausted before any grievance is referred for Mediation Services."
(Bold is my emphasis)
7.11 Foley's test gels easily with the principles of natural justice, where at least a fair process for investigation is required to be invoked prior to arriving at a guilty verdict where procedural fairness is concerned. In any given situation an employer cannot deny an employee his /her unfettered right to be heard but Isoa's case is clear that once "lawful cause" or gross misconduct is established by the employer there is prerogative of the employer to waive that right and proceed to immediate termination.
7.12 The principle followed in the case of Dunning (A.J.) & Sons (Shoplifters) Ltd v Jacomb (1973) IRLR 206 is then more apt here, where the Court said:-
"...the approach developed that a procedural defect would only make the dismissal unfair if the decision might have been different at the end of the day. The trend is to see procedural matters as issues of substance to be weighted in the scales of the overall merits of the case".
7.13 Simply put, the employer's right of summary dismissal arises not from a 'divine' managerial 'right to fire' but from the terms of the contract, express, incorporated and implied. When an employee commits a sufficiently fundamental breach of contract of service (implied or express) by failing or willfully refusing to carry out his/her duties as per any standards, rules or policies, the employer has the right to dismiss him/her 'on the spot' without giving the requisite notice. Therefore, the question of natural justice does not arise in this case as ample evidence established that the grievor had breached his implied fiduciary duty to act in good faith where the employer's evidence proved that Mr Nair was guilty of the offences alleged against him.
7.14 Let me now briefly look at the manner in which the grievor was terminated. I have already accepted that there is justification for "gross misconduct" and "substantial neglect of duties" in substance in that the grevior's conduct at the time of his dismissal was within a range of reasonable responses as alleged by the employer (as per principle in X v Y [2004] EWCA Civ 662). He was terminated on the basis of the employer's investigation that proved there were merits in the three allegations although there was minor negligence in the third allegation.
7.15 I would like to say that where the allegation of unfair dismissal is concerned, the Court in Isoa's case has made it abundantly clear that:-
"...it is not the aspect of right to be heard that leads to unfair dismissal. It is the manner of treating the employee in carrying out the dismissal that must be considered. The employer's actions must be assessed to ascertain whether the employee was treated with fairness, respect and dignity in carrying out the dismissal..." (Emphasis added).
7.16 The Full Supreme Court when Johnson's case was appealed [see: Shell Fiji Limited And Fereti Filipe v Benjamin Johnson Civil Appeal No. CBV No. 008 of 2010 (19 October 2011)], also echoed this by adding that:-
"...For a claim of this category to survive, there has to be a cause of action, evidence and causation shown. Simply, the employee has to plead that the manner of dismissal was unfair, evidence must be tendered on what constituted unfair treatment, together with the evidence that the said treatment caused the employee distress or humiliation or physical and psychological harm. That is the legal parameter on which such a claim operates and survives..."
7.17 This is a case where the Supreme Court looked at the principles set out in the Yashni Kant's case in terms of unfair termination allegations and where it observed that:-
"...Yashni Kant's case even made it clear that there has to be evidence that the manner of dismissal caused the humiliation. There has to be the link in the unfair treatment leading to humiliation without which the Court cannot speculate such breach of an implied term otherwise every dismissal case would succeed a claim based on the manner of dismissal because dismissal naturally leads to distress and humiliation..."
7.18 In this instance, the original claim of the grievor pertains to unfair termination as contained in Form ER1. In his Preliminary Submissions, the grevior also stated that his summary dismissal was unfair and unjustified on that grounds that the Employer:-
- acted arbitrarily and denied the Worker due process by failing to conduct a fair inquiry and process leading to termination;
- failed to consider his prior unblemished record of employment;
- failed to allow the Worker to be represented in his grievance;
- failed to allow for mitigation before dismissal;
- acted in breach of the Worker's employment contract; and
- accorded the penalty of summary dismissal which was in the circumstances otherwise predetermined and disproportionate to the gravity of the allegation.
7.19 No legal submissions was provided by the grievor and this Tribunal found that there was no evidence to establish that the termination was unfair in the manner it was accorded to the grevior other than the grievance procedure of according natural justice as deemed to be any grievor's right to be heard and respond (including being given an appeal procedure against the employer's decision and mitigation) was the foremost contention as pleaded above by the grievor to be the unfair/unjustified treatment. In that sense, I found no evidence of unfair termination in terms of Wati J's finding in Isoa's case: that "...it is not the aspect of right to be heard that leads to unfair dismissal. It is the manner of treating the employee in carrying out the dismissal that must be considered...".
7.20 To that end, s230(2)(a) & (b) of the ERP where it provides for "Employment grievance remedies" does not apply in this matter. To better answer this, it is crucial to examine section 33 (2) of the ERP 2007, where it is mandatory that "the employer must provide the worker with reasons in writing for summary dismissal at the time he/she is dismissed" (my emphasis).
7.21 Here, time of dismissal is critical component to lawfully establishing "summary dismissal". I am convinced that the employer discharged the grievor from his employment in compliance with s33(2) of the ERP at the time they carried out summarily dismissal by providing reasons, both in writing and verbal communication (interviews). I am satisfied that employer had reasonably conveyed to the grievor the reasons for his summary dismissal where he appeared to have had all the details to properly understand the exact nature of the allegations and circumstances leading to his summary dismissal when the employer wrote a letter to him on the day of his dismissal, which letter was handed to him personally as was the evidence. There was no contention that his wages and dues were not paid by the employer up-til the day of his termination (see: s34 of ERP).
8.0 Decision & Orders:-
Dated at Suva this 6th day of November, 2012.
LEGAL TRIBUNAL
[1] Shell Fiji Limited And Fereti Filipe v Benjamin Johnson Civil Appeal No. CBV No. 008 of 2010 (19 October 2011).
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