N967

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

MALAI

V

PAPUA NEW GUINEA TEACHERS ASSOCIATION

Waigani
Brown J

10 September 1990
14 September 1990
15 October 1990
11 April 1991

EMPLOYMENT LAW - Contract of employment - Not in writing - What terms applicable - Power to terminate - Common law power to terminate at will - Circumstances displacing - Whether right to be heard on termination.

ADMINISTRATIVE LAW - Rules of natural justice and breach thereof - Exclusion of rules - Particular cases - Contract of employment - No written terms - Terms and conditions of Committee of Association - No right to be heard on termination where dismissal not for cause.

A person was appointed to the position of acting senior research officer by the Management Committee of the Papua New Guinea Teachers Association. There was no written contract of employment. The constitution of the Association provided by cl 34(1):

"The Committee shall determine from time to time the Terms and Conditions of Employment of all employees of the Association."

The officer’s employment was terminated by unanimous resolution of the Management Committee on grounds that the Committee was "satisfied that your re-appointment or deployment in the Association is not necessarily required and that its decision to terminate your services from PNGTA was unanimous".

Held

(1) In the absence of written terms and conditions of employment, the officer was bound by such terms and conditions as might be imposed by the Committee and such terms and conditions as might reasonably be implied from the particular circumstances of his employment.

Ridge v Baldwin [1964] AC 40, applied.

(2) Under cl 34(1) of the constitution of the Association, the Management Committee had power to terminate the services of the officer.

(3) In the circumstances and having regard in particular to the acting nature of the appointment, the employment being at the direction and control of the Secretary of the Association, the absence of any statutory or contractual right or condition of employment which would affect the common law right to terminate the services of the officer at will and the reasons given for termination, the officer did not have a right to be afforded an opportunity to be heard on the decision to terminate his services and no breach of contract was involved.

Cases Cited

Cole v Cunningham (1983) 81 FLR 158; 49 ALR 123.
Durayappah (Mayor of Jaffna) v Fernando [1967] 2 AC 337.
Furnell v Whangarei High Schools Board (BC) [1973] AC 660.
Iambakey Okuk and the Independent State of Papua New Guinea v Fallscheer [1980] PNGLR 274.
M Vasudevan Pillai v Singapore City Council [1986] 1 WLR 1278.
Ridge v Baldwin [1964] AC 40.

Statement of claim

These were proceedings in which a former officer of the Papua New Guinea Teachers Association claimed damages for wrongful dismissal from office.

Counsel

J Kawi, for the plaintiff.
P Mamando, for the defendant.
Cur adv vult

11 April 1991

BROWN J: In this matter, the plaintiff, Jimmy Malai claims damages for unfair dismissal and payment of all entitlements due to him under the terms of his previous employment. The action is one of wrongful dismissal.

CHRONOLOGY

In 1982, the plaintiff was appointed the regional secretary of the Papua New Guinea Teachers Association for the Momase Region. On 19 January 1987, he was advised by letter of that date from the Assistant Secretary, Finance and Administration, that he had not been re-appointed as the Regional Secretary but he was subsequently posted as the Acting Senior Research Officer at Waigani. Following leave, he took up that position on 10 March 1987 in Port Moresby. On 27 April that year, a letter of termination under the hand of the National President of the Teachers Association was prepared. He was handed that letter by the National President on 15 May 1987. The letter referred to a meeting of the National Management Committee dated 1 February 1987. On 4 June, a letter was prepared setting out the plaintiffs entitlements to termination pay, calculated to 15 May 1987.

The plaintiff is a married man with five children, residing still in the Papua New Guinea Teachers Association residence at Gerehu.

He gave evidence that the position of regional secretary was advertised and, by a selection process, he had been appointed. His conditions of employment were set forth in a document tendered, applicable to all staff. He indicated that he was not initially aware of that document. He subsequently became aware of the document and acknowledged its contents. Old and new constitutions of the Papua New Guinea Teachers Association (PNGTA) were also tendered. The new constitution was adopted and came into effect in December 1986 at a Madang conference. The plaintiff gave evidence that the National Management Committee had been elected shortly before the Madang congress. He stated that the letter of 19 January had been not complied with, but the crux of that letter confirmed the appointment of Mr Gordon Kavop to the position of regional secretary, Momase Region and it further confirms the plaintiffs appointment unattached. The plaintiff was required to transfer to head office, Port Moresby to the position of acting senior research officer. All this happened. The senior research officer position attracts level 9 or CC9. The letter required a handover/takeover which the plaintiff said, took place. On 10 March, he took up his position. He understood that he was acting in that capacity and was subject to the direction and control of Mr Paiva, the Secretary. On 15 May, he ceased work and was terminated having been handed the notice of 27 April. The plaintiff said that he had received no prior notice.

The notice of 27 April was to the following terms:

"The NMC is satisfied that your re-appointment or deployments in the Association is not necessarily required and that its decision to terminate your services from PNGTA was unanimous."

DECISION: 1.02.87(S)

That Mr Malai be terminated from the post of being a Regional Secretary (Momase Region) and be given no more than four weeks during which the office would process his entitlements and airfare paid to his home province.

UNANIMOUS

In reaching this decision, your past performance as Regional Secretary did not convince the NMC to utilise you anywhere in its organisational structure.

As Acting President I wish to convey the NMC’s appreciation of your work during the period you have served the organisation and personally I thank you and wish you the best for future.

The National General Secretary has been instructed to prepare your termination pay and other Staff benefits to which you might be entitled.

Once again, thank you.

Yours in Union

T DAI
National President."
(I have omitted the formal parts)

The plaintiff then criticised the constituted National Management Committee meeting of 1 February 1987 claiming that the chairperson was not financial.

After termination, the plaintiff was unable to obtain employment as a teacher or obtain a position in any other government department. He has been unsuccessful in obtaining a job to date.

Under cross-examination, the plaintiff asserted that his termination did not follow the provisions of the constitution in that it required consideration by the disciplinary committee. Further, there was no real reason put forward why the plaintiffs repatriation entitlements had not been utilised. The plaintiff stated an entitlement to ship cargo home but it appears no approach to resolve the difficulties had been made to the Teachers Association. All this time the plaintiff has been living rent free in a flat belonging to the Teachers Association.

In addition, the plaintiff indicated that he had a negative response to job applications in his home province (Manus) after termination. The Department of Labour had been approached in an arbitration role without result satisfactory to the plaintiff. These proceedings were then instituted.

After giving his evidence, the plaintiff called one Roger Baboa who was previously a regional secretary with the Teachers Association until August 1988. He recalled that by special resolution in Madang, the conference in December in 1986 adopted a new constitution. A new management committee was appointed. The President was one Brother Peter Keaga. He was unaware of the circumstances surrounding termination of the plaintiff as regional secretary (Momase). The position however, was advertised. He had not heard that Mr Malai had lost his job as the research officer. He recalled there was a mini congress in the term break early in 1987 when the Vice-President was elected President on the death of Mr Keaga which occurred at the Madang Conference. In the Mini Congress, the National Management Committee was dissolved. He was given charge of administration work. He stated he was not at and avoided the sessions dealing with the appointment of the assistant secretary.

On 15 October, following the luncheon adjournment, this witness declined to re-appear. The plaintiff made an application for an adjournment which was opposed. The application was not granted. The plaintiff was not willing to pay the costs of the defendant for the day.

The defendant’s case was presented through Taina Dai, the President of the Teachers Association. He recited that at a special meeting of 12 March, the National Management Committee decided to terminate Mr Malai’s continued employment. He tendered the minutes of the decision. That minute corresponds with the terms of minutes set forth in the letter of 27 April. A report had been prepared for the special meeting for 12 March and it was on the basis of such report that the National Management Committee unanimously decided to terminate.

Mr Dai gave evidence of eight members of the committee present at 12 March meeting. Six were required for a quorum. All were eligible, all were financial and all qualified to vote. The witness stated that he signed the letter of termination. He asserted the right to appoint hence, a right to terminate. The recommendation to terminate had been tendered to the committee.

Counsel for the defendant sought to tender the report which was made to the committee. The tender was not permitted. Reasons for the refusal were given at the time. Mr Malai was not present at the council meeting when the decision to terminate was made. Under cross-examination, he was asked whether Mr Malai had the right to be heard. The President stated that it was not a disciplinary case, it was a case of displacements. It was as a result of advertised vacancies. Mr Dai was then questioned about advertisements for previous positions for regional secretary (Momase). He indicated that the selection committee met in October/November 1986 prior to the Madang congress. Mr Malai had organised the Madang conference. Mr Dai said that Mr Malai was effectively displaced at the time of the 19 January letter notifying him of his appointment and directing him to proceed on recreation leave. Mr Dai stated "He had no choice but to accept move out of the office at Lae to Port Moresby". Mr Dai’s evidence confirms Mr Malai’s understanding. The research assistant’s position was a temporary position. Mr Dai could not recall hearing Mr Malai’s appeal at the Mini Congress but concedes the Congress in Port Moresby was made aware of the appeal by Mr Malai. The National Management Committee was dissolved by that Mini Congress but the Registrar of the Industrial Commission overruled the dissolution. The termination calculations set forth in the letter of 4 June to Mr Malai were calculated after the reinstatement of the National Management Committee. Mr Dai stated that the entitlements were calculated but that Mr Malai was required to nominate personal effects for determination of removal entitlements. The Easter Holiday Congress at Port Moresby would have dealt with the appeal but it was not considered during the continuation of the Congress because of other more pressing matters. No notice of appeal against the appointment of Gordon Karop as regional secretary (Momase) was tendered by the plaintiff.

In cross-examination, prior to the December 1986 Congress, he said that, the management committee had been elected to a two-year term of office. The President had been nationally elected and was not elected by Congress. Mr Dai accepted a responsibility to notify termination. Under further cross-examination, Mr Dai stated that the Mini Congress (Moresby) was where he thought the appeal by Mr Malai was lodged. He stated that the appeal was against the decision to terminate him. He had not seen any documentation. He merely heard that Mr Malai was lodging an appeal. Mr Dai further stated that the Industrial Registrar apparently overturned the Mini Congress decision to dissolve the National Management Committee and appointed a five-man committee. The National Management Committee was reinstated.

FINDINGS OF FACT

The letter of 19 January recited the appointment of Mr Gordon Karop as regional secretary (Momase). Consequently the plaintiff was not re-appointed. The plaintiffs actions in proceeding on leave and carrying out the terms of the directive of 19 January effectively meant that he had taken up the position as the acting senior research officer. The right of appeal by a disaffected applicant to the position as a regional secretary does not bear on the fact of the appointment. In other words, Mr Gordon Karop is legally entitled to hold the position until further order by the National Management Committee. In these circumstances, Mr Malai has effectively been terminated as the regional secretary (Momase) with a right of appeal. I am not satisfied that the plaintiff appealed or if so, whether it was in time; any such appeal appears to have been subsumed by these proceedings.

The letter of the assistant secretary (Finance and Administration) of 15 June clearly relates to the repatriation arrangements and calls for the keys to the flat occupied by the plaintiff.

The conditions of employment document tendered makes no mention of termination. It is silent on that aspect. I find that the constitution and by-laws adopted by the 1986 Biennial Congress of 15-17 December 1986 affect the plaintiff. Section 34 deals with conditions of employment.

Subpar 1: The Committee shall determine from time to time the Terms and Conditions of Employment of all employees of the Association.

Subpar 2: The Committee may enter into a written agreement with any office holder and where an agreement is executed and stamped, that agreement is binding on the employee and the Association.

I find that there was no written agreement entered into but that the committee pursuant to subpar 1 determined the terms and conditions of the employment of Mr Malai as the senior research officer.

Having regard to the evidence of Mr Dai and the fact of the appointment of the new committee before the adoption of the constitution in December 1986, I am satisfied that the Inaugural National Management Committee had full powers and obligations provided for by that new constitution in relation to the conditions of employment of employees of the Association. As an employee, Mr Malai was subject to the direction and control of such committee. The evidence of Mr Roger Baboa supports that of the President, Mr Dai with respect to the appointment of the National Management Committee. I find then that the plaintiff is precluded from asserting that the National Management Committee at the time of its decision of 12 March was not appropriately constituted. I am further satisfied on the presumption of regularity, omnia praesumuntur rite esse acta, that the actions of the committee of 12 March have not been shown to the ultra vires.

The plaintiff asserted in cross-examination that the termination should have been dealt with as a disciplinary matter. On the facts I cannot agree that the termination can in any way be categorised as a disciplinary question. On reading the letter of 27 April, there is no suggestion of any inefficiency or misbehaviour on Mr Malai’s part but rather the National Management Committee was unable to utilise Mr Malai’s services elsewhere in his organisational structure. It must be borne in mind that his previous position as regional secretary (Momase) had been filled. By effluxion of time, the term of Mr Malai’s contract as the regional secretary (Momase) had expired. The position had been re-advertised and an appointment of Gordon Karop made. Upon such appointment, Mr Malai’s only right was that of appeal. It would seem however, that the time limited for such appeal began to run on 11 January. Such appeal would need to be lodged within 28 days. It may well be that Mr Malai’s supposed appeal to the Mini Congress at Easter was thus out of time. I am unable to determine however, for no minutes of the Mini Congress were tendered or apparently kept. The evidence as to the fact of Mr Malai’s appeal is unsatisfactory on that point and unreliable.

It does not affect, however, these proceedings, for in fact Mr Malai is alleging wrongful dismissal which relates to his position as the acting research officer. As I say he was no longer the regional secretary (Momase) upon appointment of Mr Gordon Karop. He was restricted to a right of appeal in respect of that appointment. He has failed to satisfy me that he exercised such right.

I find that pursuant to s 34(1) of the constitution of the association, there is power to terminate.

I also find that at the time Mr Malai recommenced work on 10 March, the terms and conditions of his employment related to the position of senior research officer, Level 9 (CC9 salary). The issue for consideration of this Court consequently does not relate to his failure to be re-appointed as the regional secretary (Momase Region). It is really whether the employee in these circumstances has a right to appeal against his termination on the basis that he was not afforded the right to be heard at the March committee meeting. This raises the issue whether the plaintiff can call in support the audi alteram partem rule. For a consideration of these questions, I propose to start with case law on point.

CASE LAW

Ridge v Baldwin [1964] AC 40.

This case has previously being applied by the Supreme Court of Justice in the case of Iambakey Okuk and the Independent State of Papua New Guinea v Fallscheer [1980] PNGLR 274. Ridge’s case brought into focus the issue of natural justice, as it affected the employer/employee relationship; more particularly, it related to the opportunity to meet a charge of dismissal by a public servant holding the office of Chief Constable who was dismissed by a Watch Committee after acquittal on a criminal charge. There had been no hearing in the presence of the Chief Constable prior to the dismissal and it was alleged that the committee’s decision was void. The questions in issue came before the Privy Council on appeal from the Court of Appeal. The decision of the Privy Council turned on the particular facts of the case but the import of the case so far as it is relevant here was that reasoning of Lord Reid (at 65, 67) who categorised the law regarding Master and Servant (Lord Reid (at 65)):

"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 any time and for 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. But this kind of case can resemble dismissal from an office where the body employing the man is under some statutory or other restriction as to the kind of contract which it can make with its servants or the grounds on which it can dismiss them. The present case does not fall within this class because the Chief Constable is not the servant of the watch committee or indeed of anyone else."

The other categories touched on by Lord Reid in Ridge’s case were:

(b) where a man holds an office at pleasure; and

(c) where a man holds office where there must be something against the office holder to warrant his dismissal.

I am not satisfied categories (b) and (c) have any relevance to the plaintiffs case. Apart from judges, for instance, and others whose term of years in office is governed by statute, all servants and officers of the Crown hold office at pleasure (Lord Reid (at 65-66)):

"It has always been held, I think rightly, that such an officer has no right to be heard before he is dismissed and the reason is clear. As the person having the power of dismissal need not have anything against the officer, he need not give any reason."

As I say there is no question in this case of any disciplinary proceedings and consequently category (c) does not hold.

I accordingly consider the plaintiffs case is one for consideration under the principles enunciated by Lord Reid in category (a). The position of acting senior research officer may be described as a supernumerary position.

Mr Malai’s counsel argues that the termination was unjust, harsh, abrasive, unfair and unreasonable in view of the evidence upon which Mr Malai was terminated, the report from the general secretary to the National Management Committee tendered at the meeting of 1 February 1987. Counsel says that as a result of that report, the committee’s decision as evidenced by its letter of dismissal of 27 April was made and that Mr Malai without foreknowledge of the fact that the committee would consider his continued employment, was not afforded a right to be heard.

Ridge’s case would simply be some authority for the suggestion that the plaintiff had no right in these circumstances in the absence of some express provisions in his contract of employment. There is no such express provision and the plaintiff must rely if at all on some implied provision in the circumstances of his case.

The next case is that of Durayappah (Mayor of Jaffna) v Fernando [1967] 2 AC 337. That case applied Ridge v Baldwin. Durayappah’s case deals with a power in a Minister of State to dissolve a municipal council on inquiry as to competency. The Privy Council found the municipal corporation had the right to be heard, for on dissolution, the assets would be confiscated and thus having regard to the principle that, the risk of deprivation of property implied a right in the owner to be heard, the municipal corporation had an legitimate expectation to be heard. In the absence by the corporation of its exercise of such right by failing to complain, whilst the Minister’s order may be "avoided" at the instance of the council had it been refused the right to complain, silence was acquiescence in the Minister’s actions.

Lord Upjohn, who delivered the reasons, made this statement of principle (at 349):

"Outside the well-known classes of case, no general rule can be laid down as to the application of the general principle in addition to the language of the provision. In their Lordships’ opinion, there are three matters which must be always borne in mind when considering whether the principle should be applied or not. These three matters are: first, what is the nature of the property, the office held, status enjoyed or services to be performed by the complainant of injustice. Secondly, in what circumstances or upon what occasions is the person claiming to be entitled to exercise the measure of control entitled to intervene. Thirdly, when a right to intervene is proved what sanctions in fact is the latter entitled to impose upon the other. It is only upon the consideration of all these matters that question of the application of the principle can properly be determined. Their Lordships therefore proceed to examine the facts of this case upon these considerations."

The principle referred to is the question of the application of audi alteram partem rule.

Before applying the facts of the plaintiffs case to those three matters to be considered, I propose to have regard to the case of M Vasudevan Pillai v Singapore City Council [1986] 1 WLR 1278. In that case the head of the Municipal Department carried out an inquiry into a refusal by labourers to do work other than their normal work, taking some evidence without disclosing such to the workers. They were dismissed. A subsequent hearing de novo was conducted before an established committee and the workers were dismissed for misconduct without notice.

The workers brought an action against the council claiming that they were wrongfully dismissed. The municipal Ordinance provided that the (municipal council) may make rules for the purposes of maintaining good conduct and discipline among municipal officers and servants. Such rules made, provided for procedural steps by specified officers.

The action was dismissed by the trial Court and the Federal Court; consequently the workers appealed to the Privy Council.

The Privy Council dismissed the appeal on two bases:

First, the onus of establishing the rules had not been discharged by the appellant; consequently they had failed to establish any ground in reliance on the rules supporting the claim that the principles of natural justice applied before they could be validly dismissed.

Secondly, even if the appellants could have relied upon the rules, such rules provided a scheme or code for general administration and guidance for heads of department and could not be construed as giving rights to the employee. Further the relationship of employer/employee gave rise to no application of the principle of audi alteram partem on dismissal.

In the plaintiffs case, the rules or conditions of service are silent on the general administration including the manner of termination of an employee of the Teachers Association. There is not a written contract envisaged by s 19 of the Employment Act (Ch No 373). The various terms and conditions of employment are to be gleaned from the documents tendered in evidence which I have already touched on. By its nature, the acting position "Research Officer" is not substantive and the period of employment must be deemed to be for the period by reference to which wages are paid. Nowhere can it be inferred that such employment is for a fixed term for the term is an incident of the position; it is not an incident of the fact of employment by the Association. Whilst I have evidence as to the term of a regional secretary, there is no evidence about the research officer. I have no evidence for instance of the duration in office of the incumbent previous to this plaintiff, Mr Malai. In fact it would seem to be a supernumerary position created to afford continued employment for an officer of the Association pending a vacancy in establishment. In other words the acting research officer is a temporary position to afford the Association the use of the employee’s services pending appointment elsewhere.

There is an absence then, of some rules relating to termination in conditions of employment. The plaintiff has been unable to refer me to any particular procedures of the Association as they affect the senior research officer which would impinge on the common law relationship between an employer and employee.

Iambakey Okuk v Fallscheer may be distinguished on its facts. It properly falls within category (c). That case is authority for the proposition that in Papua New Guinea, Ridge v Baldwin categories are recognised. In Iambakey Okuk, the incumbent employee was terminated on the purported ground of inefficiency and the Supreme Court found that the audi alteram partem rule applied. On the facts of that case, the employee clearly fell within the category (c), a dismissal on disciplinary grounds. Such is not the case here.

On appeal from the Court of Appeal of New Zealand, the Privy Council in Furnell v Whangarei High Schools Board (BC) [1973] AC 660 held, (dismissing the appeal), that "one of the principles of natural justice is that a man should not be condemned unheard".
There Lord Morris of Borth-y-Gest delivered the majority judgment and found that the sub-committee charged with a duty to investigate had not condemned nor criticised the teacher. The appellant teacher had been suspended pending investigation pursuant to procedures laid down by regulation. Those procedures were not unfair and no grounds were advanced for thinking that the sub-committee acted unfairly. The mere fact of suspension then did not give rise to the application of the audi alteram partem rule.

The cases then show the facts peculiar to the individual must be closely scrutinised before applying the principles set forth in Ridge v Baldwin.

In the Australian case decided by the Federal Court in September 1983, Cole v Cunningham (1983) 49 ALR 123, the Court extended the principles of Ridge v Baldwin by recognising in certain cases a concept of a legitimate expectation to be heard. In that case, Cunningham had tendered his resignation from the Department of Immigration and Ethnic Affairs because in the view of his superiors, he had been guilty of misconduct in office. The resignation had been accepted on Cunningham’s understanding that "if you leave now, it will be a normal resignation and you will leave with a clean record".

Cunningham subsequently sought to rejoin the Public Service but his application was unsuccessful. On an application, pursuant to s 5 and s 16 of the Administrative Decisions (Judicial Review) Act 1977 (Aust) a single judge made an order of review. From that decision there was an appeal to the Federal Court. The Court held that if the rules of natural justice did apply there had been a breach of the rules for, whilst Cunningham was informed in a general way of the reasons for his not being re-appointed, he was not informed that in the view of the Department of Immigration, he was involved in conduct which in the view of the Department amounted to misbehaviour. In the circumstances of the case, in relation to his resignation, Cunningham was entitled to hold the reasonable expectation that he would be afforded a reasonable opportunity of answering the allegations of the Department of Immigration should that Department change its attitude towards him and assert (contrary to the representation made to him at the time of his resignation) that he had left the Department with a blemished record.

In the plaintiffs case, Mr Malai has not asserted any grounds on the evidence, to support a legitimate expectation to be heard. It is clear from the terms of the letter of 27 April under the hand of the National President of the Association that Mr Malai is excess to organisational structural requirements.

Dealing then with the three matters touched on in Durayappah’s case the status of Mr Malai was that of acting research officer. The services expected of him were those services at the direction and control of the secretary (Finance and Administration). Secondly, there is no evidence of any statutory right or condition of employment which would affect the common law right in a master to terminate his employee; his services as acting research officer were at the will of the management committee.

Having regard to the reasons given in the letter of termination of 27 April and the evidence as a whole, no circumstances have arisen giving rise to any legitimate expectation to be heard. Consequently I am not at all satisfied that the plaintiff has shown any right to intervene. To find otherwise would unnecessarily fetter the management committee in its function of maintaining proper staffing levels within its charter. The management committee has the overriding duty to act within its charter. The plaintiff must fail. I give judgment for the defendant and order the plaintiff to meet the defendant’s costs to be assessed or taxed.

By way of comment, I should say that the plaintiff has already had the benefit of accommodation of the Teachers Association. I fail to see why the Association has not taken steps to cure this. It is possibly as a result of a misapprehension as to the law, for mere assertion in a plaintiff cannot have the effect of negating a decision of the responsible committee in this case, terminating the services of the plaintiff. Such a decision may subsequently be shown to be wrong but until then it is valid for all intents and purposes.

Judgment for defendant

_______________

Lawyer for the plaintiff: J Kawi.
Lawyer for the defendant: P Mamando.