Unreported National Court Decisions
N1945
PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]
APPEAL NO. 11 OF 1998
BETWEEN: PORGERA DEVELOPMENT AUTHORITY
-FIRST APPELLANT-
AND: M. RAMIAH (GENERAL MANAGER)
 -SECOND APPELLANT-
AND: RICTON PINDAPAE 
-RESPONDENT-
Mount Hagen
Hinchliffe J
8 October 1999
12 April 2000
APPEAL from the District Court — Termination of employment — Employment Act Ch. 373 — Oral contract employee — Magistrate fell into some errors — Amount of K5461.60 reduced to K605.41
Counsel
D. Gonol for the Appellants.
P. Potane for the Respondent.
12 April 2000
HINCHLIFFE J: This is an Appeal from a decision of the Wabag District Court given on the 22nd December, 1997. The Court ordered that judgment be entered for the complainant (now the respondent) in the sum of K5461.60.
The Statement of Claim in the District Court reads as follows (see p4 of the Appeal Book):
“STATEMENT OF CLAIM
01.     The complainant is about 32 years of age, married with three (3) children and his claim is for the sum of K7,605.00 being the unpaid wages and other entitlements due to him under an employment contract.
02.     The Second Defendant is a Statutory Body established under the Porgera Development Authority Act, and as such can sue and be sued under its own name.
03.     The First Defendant is the former General Manager of Porgera Development Authority and was at all material times exercising his power under course of his duties as a General Manager.
04.     On or about 14th May 1995, the First Defendant employed the Complainant as an Asset controller and Purchasing officer of the Porgera Development Authority and the complainant served the Second Defendant from the date of commencement until the date of termination on 8th April 1997.
05.     The complainant has been performing his assigned duties as Controller and Purchasing officer and was paid a fortnightly wages of K228.80 for the last two (2) years.
06.     On or about 14th January 1997, the complainant applied for 3 weeks leave without pay to attend to his personal court case at Wabag District Court. The Complainant’s application for further 6 weeks leave without pay was approved by the General Manager (First Defendant).
07.     On or about 24th April 1997, the complainant surprisingly received a Notice of Termination from the First Defendant stating that he was terminated from his said employment as Asset controller and Purchasing officer.
08.     By reasons of the matters aforesaid the complainant has been deprived of his salary and other entitlements he would otherwise have earned and thereby suffered loss and damages.
PARTICULARS
(a)      Long service -- 7 days
Leave credit -- 15 days
Leave of Notice -- 5 days
Total -- 27 days
27 divided by 10 working days = 2.7 fortnights
Fortnightly gross -- K228.80 x 2.7 = K617.76
Less 2% Tax K12.35 = K605.41
(b)      Damages for Distress, Frustration and General Disappointment
say = K7,000.00
Total = K7,605.41
09.     And the complainant claims from the Second Defendant a sum of K7,605.41 together with 8% interest and costs.”
The Notice of Appeal (see p21 of the Appeal Book) reads as set out below:
“TAKE NOTE that the grounds of Appeal are as follows:-
(a)      the Magistrate erred in law and fact in finding liability in favour of the Complainant against the Defendant as there was insufficient evidence to establish liability on the basis a breach of Contract of Employment.
(b)      The learned Magistrate erred in awarding damages of K5,461.00 as there was no evidence to support the finding that the Complainant was entitled to damages at K5,461.00.
(c)      The Magistrate erred in awarding damages of K5,461.00 for distress and frustration as these was no evidence to support such a finding.
(d)      The Presiding Magistrate erred in law in making an award in damages as there was virtually no evidence produced by the Complainant to support a finding on damages.
(f)      the sum of K5,000.00 for general damages was unreasonable and excessive for a claim based on distress and frustration.
(g)      such other or further orders the Court deems fit.”
There are some contradictions, in the written material, as to the actual date of termination of employment. Was it the 8th April, 1997 or the 24th April, 1997.? After persual of the said material I am of the view that the 8th April, 1997 is the correct date. There is also some confusion as to the time taken off work without pay. Was it six weeks or was it nine weeks. In paragraph 06 of the Statement of Claim it appears that an initial request for three weeks was granted and then a further request for another six weeks was granted. In other parts of the written material it seems that the total time for leave without pay was six weeks. Again there is some confusion about the number of weeks but after further persual I am satisfied that the actual period was six weeks.
At the District Court hearing the respondent was cross-examined on his affidavit of August, 1996 (no day specified) and that was the only evidence. The Appellants did not elect to give either written or oral evidence. There does not appear to be any dispute that the respondent was employed as an oral contract employee pursuant to Section 10 of the Employment Act, Ch. No. 373. There was no written contract.
The said Act sets out “Oral Contracts” in Division 3, Sections 15 to 17.
Section 16 provides as follows:
“16. Period of oral contract.
Notwithstanding any agreement to the contrary, an oral contract of service shall be deemed to be for the period by reference to which wages are paid.”
The respondent was paid fortnightly in the sum of K228.80.
Section 17 of the said Act provides as follows:
“17. New oral contract on expiration of contract.
Each party to an oral contract of service that expires under Section 16 shall, immediately on the expiration of the contract, be deemed to have entered into a new oral contract of service for a further period of the same duration and subject to the same terms and conditions as the expired contract unless —
(a)      notice to terminate the employment under Section 34 has previously been given and —
(i)       the period of notice has expired; or
(ii)      payment of wages instead of notice has been made; or
(b)      the contract has been summarily terminated by either party for lawful cause.”
In this matter it would appear, that on the 8th April, 1997, the respondent was given a Notice of Termination. That is, it was not a Notice of intention to terminate as in Section 34 of the said Act.
Under Section 36 of the said Act it provides, inter alia, as follows:-
“36. Grounds for termination of Contract
(1)      An employer may terminate a contract of service without notice or payment instead of notice —
(a)      where the employee —
(vi)     is continually absent from his employment without leave or reasonable excuse.”
In this matter the appellants in their Defence at the District Court level stated at No 6. (See page 9 of the Appeal Book) as follows:-
“6.      As to paragraph 6 the Defendants say that the Defendants approved the Complainant to have 3 weeks leave without pay but did not approve the 6 weeks leave without pay.”
Hence the reason for the appellants proceeding under the said Section 36(1)(a)(vi) of the said Act. But I agree with the learned magistrate when he accepted the respondent’s evidence that he in fact had been granted, legitimately, six weeks leave without pay, so it could not be said that he was “continually absent from his employment without leave or reasonable excuse.” It was open for His Worship to make that finding, particularly when there was no evidence to the contrary.
Therefore it would seem to me that the appellants should have given the respondent notice under Section 34(2) & (4)(c) which provide as follows:
“34. Notice of termination
(2)      Subject to this Act, a party to a contract of service may, at any time, give notice to the other party of his intention to terminate the contract.
(4)      Where there is no provision in a contract of service for notice of intention to terminate, the length of the notice shall be not less than —
(c)      two weeks if the employee has been employed for not less than one year and for less than five years.”
To my mind the appellants fell into error by not giving the respondent two weeks notice.
In his Statement of Claim (see page 5 of the Appeal Book) the respondent claimed for,
“(b)    Damages for Distress, Frustration and General Disappointment — K7,000.”
The learned magistrate awarded him K800. I am unable to see where the respondent was entitled to anything at all under this heading.
As an oral contract employee he would have known that his employment was only on a fortnightly basis. That is, as has already been seen, his employer could lawfully terminate his employment on two weeks notice. The employer does not have to give a reason for so doing and quite frankly, there does not have to be a reason. It is also clear that the employee does not have the right to be heard before he is dismissed because that would be ineffective. I say that because he can be dismissed for no reason at all. To that extent the oral contract employee has no security of tenure. Knowing that he is employed on a fortnightly basis and that he is open to dismissal at anytime for possibly no reason at all and without any right to be heard, how can the respondent say that he has suffered “distress, frustration and general disappointment.” What the appellants did was perfectly within the law, more particularly the Employment Act, Ch. No. 373. Certainly the situation may well be different where there is a written contract and the employer has terminated a person’s employment in breach of the terms and conditions of the contract. But that is certainly not the case here. I am satisfied that the learned magistrate fell into error in making any award under this heading.
I am also of the view that His Worship fell into error when he made an award of K3655 for unlawful termination in favour of the respondent. I say that because that heading was never pleaded, it is as simple as that. The learned magistrate said at page 18 of the Appeal Book, “Though the complainant has not specially sought any damages under this heading ----------------,” he still went on to award damages. That, to my mind, is quite wrong on the part of the magistrate because a complainant is bound by his pleadings and in the statement of claim in these proceedings damages were not sought for unlawful termination of employment.
Also at page 5 of the Appeal Book paragraph 8(a) sets out particulars of loss of salary and other entitlements incurred. It reads:-
“Particulars
(a)      Long service -- 7 days
Leave credit -- 15 days
Leave of Notice -- 5 days
Total -- 27 days
27 divided by 10 working days = 2.7 fortnights
Fortnightly gross K228.80 x 2.7 = K617.76
Less 2% tax K12.35 = K605.41.”
I refer to page 19 of the Appeal Book where the learned magistrate said the following in relation to the claim for the said K605.41.
“The complainant has claimed the sum of K605.41 under this heading (Unpaid Entitlements.) The Counsel did not argue this part of the claim. I do not need to discuss, as I take defendants stand as admission, therefore allow the sum of K605 for unpaid entitlements.”
I am inclined to agree with His Worship on that point because, as I understand it, the appellants had sought to cross-examine the respondent on his said affidavit. As they did not question the figure of K605.41 it could be assumed and accepted that they were not disputing the said figure. Needless to say it would seem to me that the “Leave of Notice” should have been ten days but it is too late to change that now.
Therefore I make the following orders:
1.       That the appeal is upheld.
2.       That the Order of the District Court at Wabag on the 22nd December, 1997 be varied to now read that there be “Judgment for the complainant in the sum of K605.41 plus 8% interest and costs.”
3.       That there be no order as to costs.
Orders accordingly.
Lawyer for Appellants:  Paulus M. Dowa
Lawyer for the Respondent: Potane Lawyers