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High Court of Fiji |
IN THE EMPLOYMENT RELATIONS COURT
AT SUVA
CASE NUMBER: ERCA NO. 7 OF 2011
BETWEEN:
CARPENTERS FIJI LIMITED
APPELLANT
AND:
ISOA LATIANARA
RESPONDENT
Appearances: Ms. D. Prakash for the Appellant.
Mr. P. Rae the Respondent.
Date and Place of Judgment: Thursday, 08th September, 2011 at Suva.
Judgment of: The Hon. Justice Anjala Wati.
JUDGMENT OF THE COURT
CATCHWORDS:
EMPLOYMENT LAW – APPEAL –NATURE AND PROCEDURE OF DISMISSAL- WHETHER DISMISSAL LAWFUL- MANNER OF DISMISSAL –REMEDIES WHEN DISMISSAL HELD WRONGFUL.
LEGISLATION:
THE EMPLOYMENT RELATIONS PROMULGATION 2007 ("THE ERP")
CASES REFERRED TO:
CENTRAL MANUFACTURING COMPANY LIMITED V. YASHNI KANT – UNREPORTED SUPREME COURT CASE NUMBER CBV 0010 OF 2002.
The Case Background
[1]. Mr. Isoa Latianara ("the employee") was employed by Carpenters Fiji Limited ("the employer") as a security officer for two years preceding his dismissal from employment.
[2]. On 04th April, 2009, there was an incident involving the employee and two customers which led the two customers to report the matter to the police after which the parties reconciled. However, the incident led the employee to be dismissed from his employment.
[3]. On 09th April, 2009, the employee was terminated and his letter of termination indicated that he was terminated for gross misconduct for pulling, assaulting and abusing a customer of the employer.
[4]. The employee, at all times, had denied the allegations and indicated that the incident arose when two customers came to the shop and made lots of noise by laughing, yarning and talking on the mobile loudly. He had asked the customers to keep the noise down, when they, in return, said that they would complain against him, which caused the employee to pull out of the shop, one of the customers as he was creating trouble.
[5]. After the termination, the employee filed an employment grievance and his claim was based on unjust, unfair and discriminatory action of the employer in terminating his employment. The employee had sought reinstatement or compensation.
[6]. On 8th March, 2011, the Employment Relations Tribunal ("ERT"), in its ruling, found that the employee had been unlawfully and unfairly dismissed.
[7]. In reaching the conclusion that the employee had been unlawfully and unfairly dismissed, the Tribunal made a finding that the employer was unethical in its conduct in summarily dismissing the employee when it confronted the employee with the allegations, not listening to his explanations, and denying him the formal disciplinary procedure. It held that the employee must have been given "a notice of the specific allegation and its gravity and possible outcome, an opportunity to refute the allegations (with an opportunity to have a representative, not simply a witness, present), and an unbiased consideration of the employee's explanation". These omissions were not minor procedural inadequacies and led to serious breach of the employee's rights which made the dismissal both unjustified and unfair.
[8]. As a result of its findings, the ERT ordered that:-
"(i) the worker Isoa Latianara to be reimbursed a part of the wages lost as the result of the grievance;
(ii) the worker to be compensated for loss of dignity and injury to feelings;
(iii) the total of (i) and (ii) above to be equivalent of the worker's wages for seventeen (17) months;
(iv) the total wages at (iii) above to be reduced by the equivalent of the worker's wages for five (5) months in view of the worker's contribution towards the situation that gave rise to the employment grievance; and
(v) the balance of twelve (12) months wages to be paid to the worker Isoa Latianara within 14 days of this decision".
[9]. Aggrieved with the decision of the ERT, the employer filed an appeal and raised the following grounds:-
Appellant's Submissions
[10]. In respect of grounds 1 and 2, counsel for the appellant submitted that it is undisputed that the terms and conditions of the employment contract contained a termination clause which entitled the employer to terminate the employment upon one week's notice or payment in lieu of such notice. The employee was paid a week's notice and as such his termination was not summary termination. The employer had exercised the right to terminate under the termination clause.
[11]. In respect of grounds 3 and 4, it was submitted that the Tribunal erred in holding that the employer was unethical and unfair in dismissing the employee. The employee was given an opportunity to respond to the allegations against him. It was only after consideration of the response that the employer took the decision to terminate the employment. At no time was the respondent humiliated or treated in any manner which was derogatory to his person. The Tribunal had no evidence before it to substantiate that the employee's feelings and dignity was injured and having found that, it made a contradictory finding that the employee's actions contributed to the situation. Simply if the dismissal is fair, the employer cannot be held liable and if it is not, the employee cannot be held liable.
[12]. In respect of ground 5, Ms. Prakash submitted that the Tribunal did not justify how it arrived at a figure of 17 months wages as compensation because the only compensation for wrongful dismissal is limited to the period of notice to which the employee is entitled to as per the case of Wallace v. United Grain Growers Ltd. 1997 CanLII 332 (SCC); [1997] 3 SCR 701.
Respondent's Submissions
[13]. On grounds 1 and 2, the employee's representative submitted that the termination clause in the worker's employment contract provided for two mutually exclusive dismissal regimes. There had to be dismissal either by a week's notice or payment in lieu, or summary dismissal for serious misconduct without notice or payment in lieu. Additionally, the employer was entitled to dismiss summarily for gross misconduct pursuant to s.33 of the ERP. There is no hybrid or a combination of termination methods. The Tribunal did not make a finding that the worker was summarily dismissed, but did conclude that the employer had in fact failed to adhere to the termination clause. Having made this finding, the Tribunal should have declared the termination a nullity and provided the remedy of reinstatement sought by the worker. Reinstatement was thus sought from this Court.
[14]. On grounds 3 and 4, Mr. Rae submitted that the Tribunal had correctly found the employer's actions unfair and unethical and reasons were provided by the Tribunal. A finding was made that the worker's alleged actions did not constitute gross misconduct. In dismissing the employee, the employer had relied on written statements by two relatively junior employees and failed to give consideration to the written statements of four independent witnesses. At the Tribunal however, the only evidence presented was by one witness of the employer whose evidence was largely contradictory and unreliable. The employer failed to produce direct evidence from either of the two customers involved, who would have provided valuable verification of the facts relating to the incident. In fact the police report which confirmed reconciliation between the worker and the customers noted that there was no complaint of assault but rather arguments over the price of certain goods. This piece of evidence was unchallenged. The written statement of Aaron Hussein, another employee, confirmed what he overheard, and his version was consistent with the worker's evidence that the customers were abusive and provocative towards the employee. The employer's conclusions of assault and abuse therefore had no basis.
[15]. Mr. Rae further submitted that the Tribunal correctly applied the tests for justification and fairness and found in favour of the employee. The employee's uncontroverted evidence was that, apart from being asked to submit a written report of the incident, he was given no other opportunity to be heard, be represented or an opportunity for mitigation. He was also given no prior indication that the allegation could lead to dismissal. The employer neither produced any evidence through any of its senior management involved in the decision making nor any file evidence confirming that it had complied with even the basic requirements of procedural fairness. There was also evidence that when the employee reported to work on the following Monday, he found another security officer in his place even before his termination. These all constituted unfair treatment of the worker and is unethical behaviour.
[16]. On ground 5, Mr. Rae submitted that the Tribunal is not limited in its jurisdiction to the amount of compensation it may award. The Tribunal reasoned and calculated compensation at seventeen months pay being the time it took from the worker's dismissal to hearing and decision. The worker had sought reinstatement which was not awarded despite conclusive findings that the dismissal was both unjustified and unfair and despite there being no evidence that the worker would not continue as a cooperative and harmonious member of the employer's team. The Tribunal did not provide any reasons why reinstatement was not awarded. Mr. Rae sought from this Court that the appeal be dismissed with costs and the Tribunal's decision be varied to include reinstatement of the worker.
The Law and Analysis
[17]. The first two grounds of appeal can be dealt with together. It basically states that the Tribunal erred when it made a finding that the employment was summarily terminated when the employer in fact had exercised its right under the termination clause. The employee's representative argued that the ERT did not make a finding of summary dismissal. It had made a finding that the employer had failed to adhere to the termination clause.
[18]. In respect of whether the dismissal was lawful, the ERT held that the employer had terminated the employment for a cause which was gross misconduct. Gross misconduct was not established by the employer's evidence. The ERT also found that gross misconduct entitled the employer to summarily terminate without notice but the employer gave payment in lieu of notice and thus it did not itself adhere to the employment contract. The ERT further held that because there was no right of hearing accorded to the employee, the dismissal was unlawful.
[19]. Indisputably, the termination clause permits termination, without cause, upon one week's notice or payment in lieu of notice and also for summary dismissal, without notice, for serious misconduct.
[20]. The employer's main reason for dismissing the employee was for a cause. The employer was of the view that there was serious misconduct on the part of the employee when he "manhandled, abused and assaulted the employer's customers".
[21]. The employer gave the employee one weeks wages and terminated the employment immediately. It is now contending that it followed the termination clause to terminate by giving one weeks wages in lieu of notice.
[22]. It is undisputed that the employee was given one week's notice and terminated for alleged serious misconduct.
[23]. Once the employer made serious misconduct the basis of the termination, it was 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.
[24]. When the Tribunal made a finding that the lawful cause to terminate was not established, the termination became wrong and unlawful. The employer cannot then go back and rely on its giving of one week's wages in lieu of notice to say that it relied on the termination clause. That clause could only be relied on, if termination was done "without cause". In this case, the termination was for a cause and I have no better way to put it than Mr Rae has that in the circumstances of this case "there could not be a hybrid or combination of termination methods".
[25]. There is no issue before me that the ERT was wrong or incorrect in analysing the evidence to hold that gross misconduct was not established by the employer. So, I will not delve into that aspect.
[26]. It is my duty to comment more on the procedure to terminate "for a cause" and "without a cause". In any given situation, the employer is not obliged under the termination clause, to give any opportunity of hearing, as found by the Tribunal. When the termination is without cause, what is there to hear the employee on? And, 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.
[27]. So, in effect, the portions of the ERT's judgment which states that the employer must have given the employee a right to be heard is incorrect and must be set aside. This though, does not affect the ERT's finding that the dismissal was unlawful as serious misconduct could not be established by the employer to terminate the employee.
[28]. For the reasons given above, grounds 1 and 2 of the appeal must and is dismissed.
[29]. Grounds 3 and 4 relate to the ERT's finding that the employer was unfair and unethical in treating the employee when dismissing him.
[30]. The case of Central Manufacturing Company Limited v. Yashni Kant [Unreported Fiji Supreme Court Case Number CBV 0010 of 2002] clearly states that in carrying out the dismissal, the employer must treat the employee fairly and with appropriate respect and dignity. The relevant excerpt reads as follows:-
"In our view, the Court of Appeal correctly held that there is an implied term in the modern contract of employment that requires an employer to deal fairly with an employee, even in the context of dismissal. The content of that duty plainly does not extend to a requirement that reasons be given, or that a hearing be afforded at least where the employer has the right to dismiss without cause, and to make a payment in lieu of notice. It does extend, however, to treating the employee fairly, and with appropriate respect and dignity, in carrying out the dismissal. Each case must, of course, depend upon its own particular facts. However, where, as in the present case, the dismissal is carried out in a manner that is unnecessarily humiliating and distressing, there is no reason in principle why a breach of this implied term should not be found to have occurred."
[31]. The Tribunal held that because the employee was confronted with allegations and not afforded a reasonable opportunity to be heard, the employer became unfair and unethical. 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. The ERT's reason why the manner of dismissal was unfair, cannot be upheld and so at this stage the reasons are set aside, however, independently, this Court has to examine the employee's evidence to see whether the ERT's finding that the employee was not treated with fairness or respect and dignity could be upheld at all.
[32]. The employee testified that on Monday, being the first working day after the incident and three days before his termination, when he came to work, he saw another security officer who told him that he was employed in his place and that the employee was no longer employed there. The Human Resources Manager later sent that security officer away and the employee worked on Monday. On Tuesday, the employee went to see his senior Mr. Shah who just came in and "blew off" the employee by alleging that he assaulted the customers. The employee asked to be given time to explain the incident but to no avail. He was told that he would be seen later and on Thursday, the 09th day of April, 2009, he was terminated. This evidence was not contradicted by the employer.
[33]. There is clear evidence of humiliation of the employee. Before being told that he was dismissed, he was replaced by another employee and practically dismissed on the day but for reasons unbeknown, the employer then decided to cover up its unfair and unethical action by keeping the employee at work for extra two days before telling him in writing that he was dismissed. What else could be more humiliating than to come to work and find one's replacement without being told as to what is happening?
[34]. Although for different reasons, I uphold The ERT's finding that the manner of dismissal was unfair in that the employee was humiliated at the time of his dismissal. Grounds 3 and 4 of the appeal are thus dismissed. This also urges me to comment that if dismissal became effective on Monday when another security officer was being replaced by the employer, then the employer's argument totally fails again that it exercised termination under the termination clause, because the termination was without notice to the employee and without being told that he was dismissed. The employee had to gather from the action of the employer that he was dismissed but he kept at work with the hope and wish that such a disaster would not befall. The subsequent giving of one week's wages in lieu of notice speaks volumes about how the employer cleverly tried to build its defence in contemplation of a suit.
[35]. The last ground of the appeal relates to the grant of 17 months wages as compensation with no basis. The appellant's counsel stated that even if dismissal was held to be wrongful, then the only remedy that the Tribunal ought to have granted was one week's wages.
[36]. Our statute is very clear on what remedies the ERT can provide upon its finding that there is an employment grievance. S.230 (1) and (2) are very relevant. I quote the same in full.
"s.230—(1) If the Tribunal or the Court determines that a worker has an employment grievance, it may, in settling the grievance, order one or more of the following remedies –
(a) Reinstatement of the worker in the worker's former position or a position no less advantageous to the worker;
(b) The reimbursement to the worker of a sum equal to the whole or any part of the wages or other money lost by the worker as a result of the grievance;
(c) The payment to the worker of compensation by the worker's employer, including compensation for –
- (i) Humiliation, loss of dignity, and injury to the feelings of the worker;
- (ii) Loss of any benefit, whether or not of a monetary kind, which the worker might reasonably expect to obtain if the employment grievance had not occurred; or
- (iii) Loss of any personal property.
(2) If the Tribunal or Court determines that a worker has an employment grievance by reason of being unjustifiably or unfairly dismissed, the tribunal or court may –
(a) in deciding the nature and extent of the remedies to be provided in respect of the employment grievance,, consider the extent to which the actions of the worker contributed towards the situation that gave rise to the employment grievance; and
(b) if those actions so require, reduce the remedies that would otherwise have been decided accordingly.
[37]. S.230(1) (b) and (c) (i), (ii) very clearly empowers the ERT to make an award of monetary sum as whole or part of the wages or other money lost which the worker reasonably expected and also to make monetary award for humiliation, loss of dignity and injury to feelings.
[38]. In deciding what remedy was to be granted, the ERT gave the reason that the time period from termination to hearing of the case was 17 months and so it was justifiable to give wages for that period which also included compensation for injury to feeling and humiliation. So in fact, there were good reasons provided for the award of 17 months wages and the worker was perfectly entitled to the same under s. 230 of the ERP 2007. The ERT had to follow the statutory remedies and not the common law remedies.
[39]. Mr. Rae said that reinstatement should have been ordered and he requested for this remedy at the appellate level. In built in the following statement of the Tribunal is the reason why reinstatement was not ordered.
"The hearing of this case was done some seventeen months after the termination and taking into consideration all the circumstances, the tribunal makes the following decision..."
[40]. The above paragraph indicates the 17 months delay factor why monetary sum was awarded and not reinstatement, although, not clearly stated. I do not find any reason to disturb the award by the ERT as it has discretion under the statute to provide a remedy it deems just and fair. I do not find anything improper in the exercise of the Tribunal's discretion.
[41]. I do agree with Ms. Prakash that the case authorities dictate the remedies that ought to have been awarded. Our statute is the starting point and the ERT was correct in not looking beyond the prescribed powers to grant the remedy. Perhaps, Ms. Prakash was not aware of the statutory provisions.
[42]. This leads me to the second ambit of the award which is reduction of the compensation by 5 months which was due to employee's conduct. This employee is a security officer. Instead of maintaining peace and quiet in the property and ensuring security, the situation between him and the customers was allowed to be brought to an extent where customers were dissatisfied and reported the matter to the police and the employer. Although, the evidence does not suggest any serious misconduct on his part, it does glaring indicate, that the employee's action contributed towards the situation that gave rise to the grievance. As a security officer, he could have allowed the customers to calm down and maintained utmost patience and handled the situation. He did not, and immediately confronted the loud customers which gave rise to the problem. The ERT was thus correct in reducing the remedy under s. 230 (2) (a) and (b) of the ERP 2007.
Final Orders
[43]. In terms of orders on appeal:-
(a) I set aside the portions of the ERT's judgment which states that the employee's dismissal was unlawful because he was not given an opportunity to be heard and also the portion of the judgment that the act of confronting the employee and not giving him a chance to refute the allegations amounts to unfair and unethical dismissal. Instead, this Court upholds that the dismissal was unlawful for want of "serious misconduct" being established by evidence. The Court further upholds that the dismissal was unfair because the employee was unnecessarily humiliated when he was replaced by another security officer before he was told that he was dismissed.
(b) All the grounds of appeal are dismissed and the orders of the ERT are upheld subject to paragraph 43(a) above.
(c) The costs of appeal hearing will be determined at a later date, after I hear from the parties.
(d) Orders Accordingly.
Anjala Wati
Judge
08/09/2011
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