N465

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

ATLAS PLANT HIRE PTY LTD

V

BECK

Waigani
Pratt J

16-17 February 1984
21 February 1984
15 June 1984

MASTER AND SERVANT - Employment contract - With non-citizen - Application of Statutes - Employment Act 1978 applicable to citizens only - Employment of Non-Citizens Act 1978 applicable.

Held

(1) The Employment Act 1978 applies to citizens of Papua New Guinea only.

(2) Non-citizens are excluded from the ambit of the Employment Act 1978 because they are, and must be, employed under the provisions of the Employment of Non-Citizens Act 1978 or come within the exceptions therein stated.

Cases Cited

Brendel v. Golden Square Pty Ltd [1983] P.N.G.L.R. 257.
McEnroe v. Mou [1981] P.N.G.L.R. 222.

Cause of Action

In the course of proceedings for damages for breach of a contract of employment brought by a non-citizen, the following ruling in relation to the application of relevant statutes was made.

Counsel

B. Larkin, for the plaintiff.
J. Fuller, for the defendant.
Cur. adv. vult.

15 June 1984

PRATT J: The plaintiff sues the defendant for damages arising from the defendant’s alleged failure to continue in employment, give adequate notice of termination, and a failure to observe the requirements of company secrecy, and also seeks an injunction restraining the defendant’s continued employment with another company in Port Moresby which engages in similar enterprises to those of the plaintiff. Employment with this company commenced a little over a week after the defendant left the plaintiff company in August 1982. The injunction is based on the restraint of trade provision appearing in the body of the contract of employment entered into between the plaintiff and defendant on 28 November 1981. Mr Fuller, for the defendant, has submitted that the abovementioned agreement is unenforceable because it does not comply with the endorsement requirements laid down by s. 19 of the Employment Act 1978 (commenced operation on 2 January 1981). Mr Larkin for the plaintiff, concedes that no such endorsements were made but argues that the Act does not apply to the circumstances of this case because the defendant is a non-citizen of Papua New Guinea. The inference which I in fact draw from the evidence, is that the defendant is a New Zealand citizen.

The Employment Act 1978 repealed the old Native Employment Act 1958 containing as it did, a host of sections dealing with the engagement, inter alia of plantation labour, their housing, medical care, food and clothing rations, and re-enacted many of the same provisions, but without restricting the application of the Act to "the employment of certain natives". Instead the Act appears to be of general application and would at first blush appear to apply to contracts entered into by all persons whether it be done on the shores of Lake Kutubu or the Pool of London.

Mr Fuller has drawn my attention to a decision of McDermott J. of this Court in Brendel v. Golden Square Pty Ltd [1983] P.N.G.L.R. 257, concerning the employment of a German national in Papua New Guinea during the year 1982. At 258 of the judgment his Honour says of the Employment Act 1978 that it "repeals the Native Employment Act 1958 but on its face has a much wider application now and appears to me applicable to all contracts of employment except to those employed ‘under any other law’ (s. 3) or those ‘exempt from all or any of the provisions of this Act’ (s. 4). The subject contract is not an exception." With respect I agree with his Honour. In Brendel’s case, s. 19 had not been complied with, and consequently his Honour held that no written contract existed between the parties. During the judgment his Honour made mention once only to another Act which may be relevant namely the Employment of Non-Citizens Act 1978 (commenced 24 July 1980). However, he does not mention it in the paragraph just quoted as being "any other law", though it would seem by inference that his Honour has held the Employment of Non-Citizens Act to be inapplicable to the circumstances of the case involving the non-citizen being considered by him. However, I do not think that such a finding is necessarily to be spelt out of the decision. Mr Fuller, who was a counsel in Brendel’s case, very fairly admits that the relationship of the two Acts was not "canvassed in any great detail". Indeed I feel this must be so for there is no ruling by his Honour on the matter even in that area of the judgment which I have already referred to. I have not retreated in any way from the views I have expressed in McEnroe v. Mou [1981] P.N.G.L.R. 222 at 226, concerning the undesirability of judges coming to different conclusions as to the content of the law, especially statute law. In the present circumstances however, there seems to me to be a hiatus — certainly there is no clear and distinct ruling on the relationship between the two Acts by McDermott J. There is no statement on the law made in deliberate judgment, and accordingly if I were to come to the conclusion that the provisions of the Employment Act were of no assistance to the defendant in this case I do not consider that I would be publishing a judgment which was in opposition to the deliberate judgment of another judge of this Court.

Counsel argued with some force that:

(a) the provisions of the Employment Act cover the whole area of the employer/employee relationship, whereas the Employment of Non-Citizens Act deals merely with the absolute requirement of a work permit and an irrevocable obligation to repatriate; and

(b) the international flavour of the Employment Act (see s. 19(3)) demonstrates its wide application and an intention to cover the field.

In view of the close proximity of other nations on our borders to the west, the south, and the south-east, I do not find anything surprising in the existence of this subsection and I do not find its international flavour assists me in resolving the problem of whether or not the Act applies in the present circumstances. In support of submission (a) above Mr Fuller also draws attention to the wealth of detail covered by the many provisions of the Public Employment of Non-Citizens Act 1978 to illustrate the true employment nature of both that Act and the one before me — that is one which governs the relationship between the parties and thus clearly, takes them out of the provisions of the Employment Act 1978 because of the exception created by s. 3 therein. That section reads:

"3(1) Except where it is specifically provided otherwise this Act does not apply to or in relation to the employment of a person:

(a) by the State in carrying in the vicinity of his village from day to day; or

(b) under any other law in force in the country."

The important point I think is not the detail of what is encompassed by any particular Act or the comprehensiveness of that Act concerning the inter-relationship of employer and employee, but whether such Act relates to the employment of a person or not. Now it seems to me that whatever else the Employment of Non-Citizens Act does or does not do it controls and regulates the employment of non-citizens as its introduction says. A non-citizen in the public sector is governed by the previously mentioned Public Employment of Non-Citizens Act and as one would expect that Act sets out in considerable detail the various factors which operate in the relationship between the State and its contract officers. These factors ensure a consistency between one employee’s contract and another. So far as private employment is concerned, this is left entirely up to the contracting parties with the exception of repatriation and the one essential pre-requisite — permission from the Government to work in the country. Every non-citizen is covered by this Act, even if it be by reference only in s. 2(2) to the two major Acts dealing with copper production or by special exemption under s. 2(3) of the Act. It is difficult therefore to avoid coming to the conclusion that all non-citizens are excluded from the ambit of the Employment Act because they are, and indeed must be, employed under the provisions of the Employment of Non-Citizens Act (or come within the exceptions therein stated). As I said, I cannot see how the comprehensiveness or otherwise of that Act can have any effect on those who are controlled and regulated by it. If such control and regulation is minimal only, then such an attitude by the legislature is quite consistent with previous attitudes. If, for a host of reasons, the Government has decided to impose various restrictions and protections in respect of the employment of its citizens then that also is consistent both with earlier thinking and earlier legislation. As Mr Larkin points out, the fact that certain Acts deal with special situations such as the employment of personnel by Bougainville Copper or by the Government, does not thereby detract from the more general application of the overall governing Act. Indeed s. 2 of the Employment of Non-Citizens Act makes it quite clear that the provisions of that Act prevail over all others. That Act is clearly within the phrase "any other law in force" occurring in s. 3(1)(b) of the Employment Act (1978).

For this reason then I rule that the Employment Act does not have application to non-citizens. This being so then obviously there is no requirement to execute the endorsements set out in s. 19 of the Act and the contract of 28 November 1981 spells out the only relevant terms between the parties subject to the overriding requirements of the Employment of Non-Citizens Act there set down.

[The court then went on to consider a number of other matters. It ultimately rejected the claim by the defendant that he had been wrongfully dismissed but refused the plaintiff relief by way of damages or injunction under the restraint of trade clauses incorporated in the employment agreement of 28 November 1981. Likewise it refused damages based on loss of productivity and costs of recruitment for replacement labour, but did award damages in the sum of K7,580, being loss of profit occasioned to the plaintiff by the defendant’s breach of contract in terminating his services without giving the required two months’ notice.]

Ruled accordingly.

________________________________

Lawyers for the plaintiff: Beresford Love Francis & Co.
Lawyers for the defendant: Gadens.