DC333

PAPUA NEW GUINEA
[IN THE DISTRICT COURT OF JUSTICE]

CASE NO 46 OF 2003

BETWEEN

Joel Ben
Complainant

V

John Kearney
First Defendant

Aviat Social and Sporting Club Inc.
Second Defendant

Port Moresby: Bidar, Pm
2005: 20th May.

Master and Servant - Action for unlawful termination of employment whether on facts termination or redundancy situation - Employment Act and Port Moresby Common Rules - General principles.

Contract of Employment - Common Law - Prerogative of Master to hire and fire - Circumstances - Termination or redundancy -Termination lawful.

Cases Cited
Steamships Trading Co. Limited -v- Joel & Ors [1991] PNGLR 133.
Legu Vagi -v- NCDC [2002] N2280
Patrick Dissing and Bernard Maikili -v- PNG Cocoa Board [2002] N2341.
Paddy Fagon -v- Negiso Distributors Pty Ltd [1999] N1900.
Ridge -v- Baldwin [1965] A.C. 40.

JUDGMENT

BIDAR PM: On the 24th September 2003 the complainant filed an action for wrongful termination of his employment with the second defendant. 

Complainant was employed as Security Guard by the second defendant on or about 31st May 2001. There was no written contract of employment signed by the complainant. The complainant’s employment as a Security Guard ceased on 28th July 2003, when he received a letter dated the same day signed by the first defendant advising him of the existence of redundancy situation in the position of Security Officer.

Complainant pleads that he was wrongfully terminated and as such he is entitled to damages.

Evidence 

Both parties rely basically on their affidavit evidence filed in this proceedings.

Complainant’s case consists of two affidavits which he deposed to. One was filed on 28th January 2004 and the other one, date of which is unknown, but he relies on the one which is in file.

He deposed that he commenced work with the second defendant as a Security Guard on or about 30th January 2001. He worked until 28th July 2003, a period of 2 years and 2 months. When cross-examined by Mr. Makail if he recalls meeting with Mr. Westaway who told him and other Security Guards that their positions as guards were made redundant by the management’s decision. Complainant answered in the affirmative. When further put to him that, the second defendant decided by its management that the security services were being contracted out to a private firm. Complainant also answered in the affirmative. He was further asked that a letter was given to him and the others about the redundancy situation and later informed verbally, he answered in the affirmative. He was further asked that he and the others were not given sufficient time. He also answered in the affirmative. It was further put to him that, redundancy situation existed not mass termination. He answered that, according to the manager it was termination. It was further put to him that there were no longer positions for security guards at the Aviat Club. He agreed but stated that three fellow Guards were re-employed as Security Guards. He does not dispute the money he was paid, he desires his job back.

For defence, a number of affidavits are relied on including the affidavit of Carl Van Den Haspel sworn on 6th August and filed on 9th August 2004. Affidavit of Bob Weston sworn on 20th and filed on 21st January 2004. Affidavit of John Kearney sworn on 1st December 2003 and filed the same day. 

John Kearney, the first defendant deposed that on 28th July 2003, he informed complainant that his position was made redundant. It was nothing to do with his work performance but was management committee decision to contract out security service to a private firm. The private firm, Corps (PNG) Limited was a professional security service which included arm guards and dog handling skills.

Mr. Carl Vanden Haspel in his affidavit confirmed the management’s decision. All in all, the defence case is that due to management committee’s decision to contract out services to a private firm, who would provide professional service, the Security Guards positions were made redundant. Due to that redundancy situation, the complainant’s services as Security Guard was no longer required.

Submissions

Mr. Nidue for complainant filed written submissions and basically submitted that it was a deliberate move by the defendants to make the positions of Security Guards redundant, so that defendants could contract out its security services to a private firm. It was a deliberate tactic. In this case, using the Port Moresby Common Rule clause 10 (b) the complainant, was effectively terminated and that it was not a case of redundancy situation. Clause 10 of Port Moresby Common Rule provides for termination and does not provide for redundancy.

He submits the applicable law is Port Moresby Common Rules and Employment Act. Concluding his submissions, Mr. Nidue refers to the affidavit of Bob Weston sworn on 20th January and filed on 21st January 2004, annexed "A" to his affidavit is the letter of 28th July 2003 which purported to terminate the complainant. The first paragraph of the letter says redundancy made in line with the Port Moresby Common Rule, clause 10(b). Clause 10(b) stipulates that in the event of dismissal without notice and in the case of one week’s wages in lieu of notice is not paid, the employer will notify the employee in writing of his decision. 

In effect what Mr. Nidue submitted is that the complainant was terminated from his employment and that such termination was wrongful or unlawful. 

Mr. Makail for defendants made the following submissions:

The complainant’s action is for wrongful termination of employment and he seeks inter alia, damages. Defendants deny liability. The submissions are basically on liability. He sates the brief facts that complainant was employed as Security Guard by second defendant until his purported wrongful termination on 28th July 2003.

Defendants say on the other hand that, complainant was given notice of his termination and paid money in lieu of notice. The termination was on the basis that his services were no longer required due to the position of security guard being made redundant. The reason was that the security service was contracted out to a private firm, The Corps (PNG) Limited.

Mr. Makail basically states the defence case, which consist of various affidavits including that of Carl Van den Haspel, which I alluded to earlier.

Mr. Makail then made submissions on law. First he submits on the issue of whether or not complainant was wrongfully terminated as he alleges. This is the fundamental issue and the whole proceedings revolves around this issue. If the Court finds that, he was not unlawfully terminated, the whole proceedings comes to end and he is not entitled to any damages.

The law on wrongful or unlawful termination is well settled in our jurisdiction. At common law it is the prerogative of the master to hire and fire his servant with or without reason. See for instance Steamships Trading Co. Limited - Joel and Ors [1991] PNGLR, 133 at 141. These rights are provided under sections 35 and 36 of the Employment Act. Counsel also refers to cases of Legu Vagi -v- NCDC [2002] N2280. Patrick Dissing and Bernard Maikili -v- The Cocoa Board of Papua New Guinea [2002] N2314. The Common Law case of Ridge -v- Baldwin [1964] A.C. 40 which is often quoted. Lord Reid stated the law regarding master and servant relationship in the following words:

"The law regarding Master and Servant is not in doubt. There cannot be specific performance of a contract of service and the master can terminate the contract with his servant at anytime and or any reason or for none. But if he does so in a manner not warranted by the contract he must pay damages for breach of contract. So the question in a pure case of master and servant does not at all depend on whether the master has heard the servant in his own defence. It depends on whether the facts emerging at the trial prove breach of contract."

In Paddy Fagon -v- Negiso Distributors Pty Limited [1999] N1900, the plaintiff claimed damages for unlawful termination of employment. The plaintiff was employed as Depot Distribution Manager in June 1994 at Goroka. After four months of working he was dismissed from his employment with a cheque payment of K981.00 in lieu of notice. No reasons were given and the plaintiff was taken by surprise. His Honour Kirriwom J. found that the plaintiff’s employment was covered by the Employment Act and found that the termination was lawful.

I have given careful consideration to both submissions in light of the evidence establishing the factual basis of the case. Complainant’s case is not one of unfair dismissal but that of wrongful termination of employment. First of all there was no written contract entered into by complainant. His employment was covered by provisions of the Employment Act. 

I reiterate the common law position on master and servant relationship, that master has the right to hire and fire with or without reason. Sections 35 and 36 of the Employment Act, provide termination of contract without notice and grounds for termination of contract.

Here is a case where complainant has done no wrong so far as his employment is concerned. The situation was such that the position of Security Guard at the Aviat Club was made redundant as a result of management committee’s decision. The complainant in my view has no right to question the management’s decision. The decision whether to make a position redundant lies with the employer and that aspect cannot be challenged by employee. However the procedure and effects of a redundancy can be challenged as unfair by a dismissed employee. The complainant’s case as I alluded to is not one of unfair dismissal but that of unlawful dismissal. In this case, if the Security Guard’s position was made redundant, why then re-employ three named Security Guards. This appears to be unfair. As alluded to, the prerogative still lies with the employer. In all the circumstances, the finding of the Court is that the employment of complainant was covered by the Employment Act and that his termination was lawful on the basis that his position as a Security Guard was made redundant and that his services were no longer required by the second defendant. On the other hand, if the Court is wrong on the aspect of redundancy the complainant was still lawfully terminated because he was paid in liu of notice. He does not dispute payment but wants his job back as Security Guard. He seeks specific performance, which this Court cannot grant.

Based on the foregoing reasons Court finds defendants not liable.

Ordered Accordingly.

Parua Lawyers: Complainant
O’Briens Lawyers: Defendant