Papua New Guinea Law Reports - 1992
[1992] PNGLR 552
N1131
PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]
MOSA TRANSPORT PTY LTD
V
KAPI DAMBE
Kimbe
Doherty J
9 December 1992
23 December 1992
MASTER AND SERVANT - Contract of employment - Contract part written part oral - Minimum terms and conditions of employment - Employment Act Ch 373 s 11(4).
MASTER AND SERVANT - Contract of employment - Contract part written part oral - Duration of oral contract - To be determined by reference to period in which wages are paid - Employment Act Ch 373 ss 15, 16, 17.
PRACTICE AND PROCEDURE - Parties - Proper defendant.
Facts
The respondent was a qualified motor mechanic tradesman but since he was anxious to get a job with the appellant company, he sought to be employed in a capacity as the company deemed necessary. On that basis and by way of a part written and partly oral agreement, the appellant employed the respondent as a motor mechanic at a rate of K1.05 per hour. That part of the agreement in relation to hourly rate of pay was written and contained in a written record called "notification of employment". Subsequently, the respondent claimed that he should be paid at a higher rate of K2.00 per hour since he was a qualified tradesman motor mechanic and that was the rate for a qualified tradesman. The District Court found for the respondent and awarded K2,111.00 in damages and costs. The complaint taken out by the respondent in the District Court did not name the appellant company as a defendant but an employee of the appellant, one Mr Neris Waim; hence the District Court order was issued against Mr Waim and not the appellant company.
Held
1.       The Employment Act Ch 373 does not preclude parties negotiating the terms of a contract of employment. Provisions for minimum conditions of employment, including wages, are provided for by the Employment Act Ch 373 and the Industrial Relations Act Ch 174. If a contract of employment does not conform to the minimum conditions of employment, as provided by the above the agreement, then the agreement is void to the extent that it is less favourable than the minimum by virtue of s 11(4) Employment Act Ch 373 where it reads:
"Every term or condition of a contract of service, whether made before or after the commencement date, which provides a condition of employment that is less favourable to an employee than any of the conditions of employment prescribed by this Act is void to the extent that it is less favourable".
2.       The respondent was employed on terms agreed upon by himself knowing there was no position for a person of his qualifications. Since the terms of employment were better than the minimum required by law, there was a valid, legally binding contract between the parties.
3.       A contract of employment can be oral or it can be written. If it is oral, then it is deemed to be a contract for the period of reference to which the wages are paid. See s 16 of the Employment Act Ch 373.
4.       An employer must set out a written record of the terms and conditions at the time he makes his oral contract: see s 15(1) of the Employment Act Ch 373. If there is a dispute and an employer fails to produce such a written record, then the statement of the employee as to the terms and conditions are conclusive evidence of those terms and conditions unless the employer satisfies the Secretary for Labour to the contrary: see s 15(2) of the Employment Act Ch 373.
5.       In the circumstances of the case, the respondent was employed from one fortnight to the other and there was a written record in the form of a "Notification of Employment" showing he was paid at an hourly rate of K1.05. Accordingly, that rate continued for the duration of the contract of employment.
6.       The order of the District Court was made against an employee of the appellant. There was no evidence that the employee had hired the respondent. The respondent should have properly named the appellant in the compliant as a defendant and not the employee of the appellant.
7.       On the basis of the above, appeal upheld.
Counsel
H Waninara, for the appellant.
No appearance by the respondent.
23 December 1992
DOHERTY J: This matter has been set down for hearing during the call over of this circuit. Counsel for the appellant informs me that he has served notice of today's hearing on the respondent and, although the respondent had checked with the staff of the District Court and was told the matter would be heard, he has not appeared today.
As counsel came a long way and I am satisfied that the respondent has been served, the matter will proceed.
The appellant appeals against the decision of the District Court at Kimbe awarding damages based on a complaint by the respondent against his employer, Mosa Transport. The complaint does not state whether the Mosa Transport is a corporate body. Since the respondent did not have the benefit of legal advice, I will not pursue that point. However, I do note that the complaint is, in fact, against Neris Waim, the manager of Mosa Transport, where it should have been, more properly, against the corporate employer. Mosa Transport is the appellant.
Technically, there appears to have been no service on Mosa Transport, which on the facts before me appears to be a company.
The wording of the complaint claims that Mr Neris Waim is "indebted to the aforesaid complainant in the sum of K1,932.00, being money owed for services rendered especially hourly rate payable during official hours". (sic).
The court work sheet shows that Mr Neris Waim and Mosa Transport were originally entered as the defendants, but the actual court order was made against Mr Neris Waim. The wording of the order is as follows:
"It is adjudged that Neris Waim shall pay Kapi Dambe the sum of K2,076 within two (2) weeks (by 13/08/92) and also pay to the said Kapi Dambe the sum of K35.00 the cost on his behalf." (Sic)
Hence, the order is against Mr Neris Waim.
A warrant of execution was also issued and this again is levied against Mr Neris Waim.
The facts show that the respondent was employed by Mosa Transport as a mechanic. It is quite clear from the evidence, and it has been conceded in the appeal, that he was a tradesman with prior qualification and references. However, it is also clear on the evidence that he was anxious to get any job and that the company did not have a position available for a qualified tradesman of his calibre. He said in his letter of application (not dated), "I wanted to take up my job as a mechanic. If you don't have a space to fit me in as a tradesman I do not mind I would like to work on as your accord" (sic). The evidence shows that he did start work, and a form giving particulars was filled in. This form was referred to in the evidence by both parties and in the reasons for decision, but it was not in the court deposition and I have been given a copy by counsel for the appellant. The learned magistrate, in his reasons for the decision, refers to the blank agreement form which was to be filled in and handed back to Mr Waim. The form records "rate K1.05 per hour". There is reference in the appellant's and the respondent's evidence that the respondent was paid K1.05 per hour whilst employed, so I deduce from that evidence that this means K1.05 was the hourly rate of pay.
The undisputed evidence shows that the respondent was paid K1.05 per hour but subsequently claimed that he should have been paid K2.00 because K2.00 was the rate for a qualified tradesman.
The law relating to employment is provided in the Employment Act Ch 373. The Employment Act provides for minimum wages (this is determined under the Industrial Relations Act Ch 174) and other minimum conditions of employment. If a contract of employment does not conform to the minimum conditions of employment provided by the legislation, then the agreement is void to the extent that it is less favourable than the minimum set out in Employment Act s 11(4).
A contract of employment can be oral or it can be written. If it is oral, it is deemed to be a contract for the period of reference to which the wages are paid (s 16 Employment Act).
On the evidence before the learned magistrate, the appellant was paid each fortnight. Hence, the contract expired each fortnight and was immediately deemed to be a new contract under an oral contract of service (s 17 Employment Act). An employer must set out a written record of the terms and conditions at the time he makes his oral contract (s 15(1)). If there is a dispute and an employer fails to produce such a written record, then the statement of the employee to the terms and conditions is conclusive evidence of those terms and conditions unless the employer satisfies the Secretary for Labour differently (s 15(2)).
The evidence before me shows that the respondent was employed from one fortnight to the other, and there was a written record called "Notification of Employment" showing he was paid at an hourly rate of K1.05 per hour, and that rate continued.
The learned magistrate found as a fact that the respondent complained about his rates of pay. That may be so, but it is clear on the respondent's evidence and on evidence of Mr Waim that it was agreed that he be paid K1.05 hourly. The fact that a registered tradesman may get more does not affect the powers of parties to negotiate their own terms. The law requires that an employee must be paid the minimum, and the respondent was paid above the rural minimum set out in the National Gazette. He may have been better qualified for the job he took, but he took it knowing that there was no position available at his qualification and his rate. There is no obligation in law to employ a person at his full qualification if no such employment exists. The law does not preclude parties negotiating terms acceptable to them provided such terms are not in breach of the Employment Act, the Industrial Relations Act or analogous legislation.
Reading the deposition, I form the impression that there was some pressure on the appellant to find a job for the respondent. The respondent seems to have been persistent in his search for employment, and they gave him what work that was available.
I cannot in the evidence find there was an agreement to pay the respondent K2.00 per hour. I cannot find any evidence that there was a legal obligation to pay the respondent K2.00 per hour when he had already freely entered into an agreement to accept K1.05. I cannot find in the evidence that the respondent was promoted.
I cannot find any evidence that the respondent entered into an agreement of employment with Mr Neris Waim. It is quite apparent to me from the evidence that the respondent knew that Mr Neris Waim was acting as an employee of Mosa Transport, and I consider I am entitled to uphold the appeal on that ground alone. There is no evidence to show that Mr Neris Waim was personally liable, and the order is clearly personally against him.
I uphold the appeal on that ground plus the further ground that there was no agreement in law to pay the respondent K2.00 per hour and there was no statutory obligation on the appellant to pay the respondent K2.00 per hour. 
I uphold the appeal and quash the order and the order for levy on execution against Mr Waim.
Lawyer for the appellant: Warner Shand and Lawyers.