|
|
Home
| Databases
| WorldLII
| Search
| Feedback
National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
WS NO 879 OF 2005
JOE KALA
Plaintiff
v
NEW BRITAIN PALM OIL LIMITED
Defendant
Kimbe: Cannings J
2006: 4 April, 7 June
2007: 16 February
JUDGMENT
LAW OF EMPLOYMENT – contract of service – termination of written contract on ground of misbehaviour by employee’s children – wrongful dismissal claim – alleged breach of contract – whether termination lawful – terms of contract – express and implied terms – whether employer can terminate contract for any reason – employee’s right to be heard prior to dismissal is an implied term – whether Company Regulations giving right to be heard are incorporated as terms of contract.
UNDERLYING LAW – common law – inappropriateness of principle that employer can hire and fire at will, with or without good reasons and without giving right to be heard – application of recently formulated new rule as part of underlying law – Constitution, Section 20 (underlying law and pre-Independence statutes), Section 21 (purpose of Schedule 2) – development of indigenous jurisprudence – Underlying Law Act 2000, Section 5 (duty of courts); Section 9 (inappropriate underlying law).
The plaintiff was employed as a shift superintendent under a written contract of employment with the defendant company. It was alleged that one of his children who lived with him on company premises broke into a visitor’s vehicle, while it was parked on company property, and stole a pistol. Two days later the company terminated the plaintiff’s contract on the ground that the break-in and theft were the latest in a series of incidents involving his children and that he had not ensured that they were of good behaviour. The contract was terminated under a clause that allowed for immediate notice to the employee subject to payment of three months worth of salary and other benefits. The company made those payments and the plaintiff accepted them. He then commenced legal proceedings against the company, claiming he was dismissed without good cause and contrary to the principles of natural justice.
Held:
(1) Wrongful dismissal cases are properly regarded as proceedings in which the cause of action is breach of contract.
(2) It is an implied term of any employment contract that if an employee is terminated the employer must give a reason; and the reason must be neither irrational nor unlawful.
(3) It is an implied term of any employment contract that if an employer proposes to terminate an employee’s contract for a reason relating to the capacity or performance of the employee the employer must give a right to be heard.
(4) In the present case, the reason the defendant gave for terminating the contract – the alleged criminal behaviour of the plaintiff’s children – was neither irrational nor unlawful. It was an acceptable reason and there was no breach of contract in that regard.
(5) However, the defendant failed to give the plaintiff a right to be heard on why he ought not be terminated and breached the implied terms of the contract that conferred that right.
(6) The plaintiff succeeded in establishing liability against the defendant for breach of contract. The matter will proceed to trial on assessment of damages.
Cases cited
Jimmy Malai v PNG Teachers Association [1992] PNGLR 568
Bruno Baiwan v University of Papua New Guinea [1995] PNGLR 18
Paddy Fagon v Negiso Distributors Pty Ltd (1999) N1900
Michael Kandiu v ANZ Banking Group (PNG) Ltd (2002) N222
Legu Vagi v NCDC (2002) N2280
Patrick Dissing v Cocoa Board (2002) N2314
Wilson Thompson v NCDC (2004) N2686
Pama Anio v Aho Baliki and Bank South Pacific Ltd (2004) N2719
Ayleen Bure and Others v Robert Kapo (2005) N2902
Paul Lingei v Ok Tedi Mining Ltd (2005) N2912
Vitus Sukuramu v NBPOL and Others WS No 1175 of 2003, 16.02.07, unreported
STATEMENT OF CLAIM
These were proceedings in which a person sought to establish liability in damages for breach of a contract of employment, based on wrongful dismissal.
Counsel
B Takin, for the plaintiff
T Anis, for the defendants
1. CANNINGS J: Introduction: This case is about a man – the plaintiff – who was sacked by his employer – the defendant – because of misconduct by his son. The son allegedly broke into a visitor’s vehicle that was parked on the employer’s property and stole a pistol. The day after that incident the employer sacked the plaintiff on the ground that the break-in and theft were the latest in a series of incidents involving his children and that he had not ensured that his children were of good behaviour. The contract was terminated under a clause that allowed for immediate notice to the employee subject to payment of three months worth of salary and other benefits. The company made those payments and the plaintiff accepted them. He then commenced legal proceedings against the company, claiming he was dismissed without good cause and contrary to the principles of natural justice. He seeks damages for wrongful dismissal.
2. This is a trial to determine whether the employer is liable.
3. The terms ‘sacked’, ‘terminated’, ‘dismissed’ and ‘fired’ are used interchangeably. They mean the same thing.
4. Around the same time that the trial for this case was conducted, I dealt with another wrongful dismissal case that raised similar issues involving the same employer. I am delivering judgment in that case on the same day I deliver judgment in the present case. I will be referring to that judgment as authority for a number of principles of law that I apply in the present case. That other case is Vitus Sukuramu v NBPOL and Others WS No 1175 of 2003, 16.02.07, unreported.
5. The parties in the present case are:
EVIDENCE
6. The plaintiff deposed to the circumstances of his sacking in an affidavit. He also gave oral evidence and was subject to cross-examination.
7. For the defendant, two affidavits were admitted into evidence. The deponents were the company secretary, Himson Waninara, and the company’s superintendent of security, John Giru. They also gave oral evidence and were subject to cross-examination.
8. Also in evidence were the Company Regulations, a bound volume of approximately 120 pages, covering more than 50 matters, eg wage rates and job classifications, leave entitlements, use of company vehicles, housing, pets, health and safety at work and standing for political office. Section 3.1 was headed "Discipline" and included clause 7 (hearing a disciplinary case), which stated:
7.1 This must be thorough and not conducted in the heat of the moment. A check on the employee’s personal record should be made in appropriate cases.
7.2 The employee must be given a proper opportunity to state his/her case.
9. The regulations were admitted into evidence because one of the plaintiff’s arguments was that they were incorporated into the contract of employment and they were breached. The defendant argued that the regulations were irrelevant as they did not form part of the contract. The issue of whether the regulations form part of the contract is a question of law, which is addressed later.
FACTS
The plaintiff
10. He is from Western Highlands Province. He attended Madang Teachers College in 1978-79. He joined the Police Force in 1980 and worked at Bomana Police College until 1984 when he was posted to Mt Hagen as a CID officer. In 1986 he was transferred to Kimbe where he remained until leaving the Force in 2000 and joining NBPOL. He had been promoted to the rank of Sergeant in 1992 and was in charge of public relations for the Kimbe police.
The contract of employment
11. NBPOL engaged the plaintiff as a shift superintendent in October 2000. He was in charge of the company’s transport division at its headquarters at Mosa, near Kimbe. He was employed under a written contract called an ‘executive service contract’.
12. The contract was seven pages in length and consisted of 17 clauses, covering the following subjects:
13. Clauses 8 (termination) and 17.4 (general) are the most relevant clauses:
14. Clause 8 (termination) stated:
8.1 Subject to the normal probationary period being successfully completed this Contract may be terminated by either the Employee giving three months notice to the Company, or the Company giving:
(a) three months’ notice to the Employee at any time after the end of the probationary term under clause 3; or
(b) immediate notice to the Employee at any time and paying the Employee the cash equivalent of salary and other benefits which would be made available to the Employee over the balance of the minimum term (if the notice is given during the minimum term) or three months, whichever is the greater, and in such event the Company shall not be liable to the Employee for any further salary, lump sum payments, benefits, damages or compensation of any kind.
(c) During the probationary term either party may terminate this Contract by giving the other party one week’s notice in writing.
8.2 If the Employee:
(a) is guilty of dishonesty, insobriety and any criminal offence;
(b) in any way misconducts himself as an officer of the Company;
(c) incurs serious illness which in the opinion of any medical practitioner nominated by the Company is due to his own misconduct or wilful neglect;
(d) becomes bankrupt or makes any composition with or any assignment for the benefit of his creditors;
(e) is guilty of a material breach or non-performance of any of the terms of this Contract; or
(f) if his health should in the opinion of any medical practitioner nominated by the Company render him unfit to perform his duties under this Contract in the reasonable foreseeable future;
then and in any cases the Company shall be entitled to terminate this Contract immediately without notice or recompense.
15. Clause 17.4 (general) stated:
This contract constitutes the whole agreement between the parties and supersedes any previous agreement relating to the subject matter.
16. The events at the centre of this case occurred in June 2004.
Thursday 10 June 2004
17. This was the day that the plaintiff’s son, Joel, aged 15 years, and another boy allegedly broke into the vehicle of a visitor who had come to play golf at the company’s course at Mosa. According to a report by John Giru given to company management the next day, the incident happened at 5.00 pm. It was caught on a security surveillance camera. The two boys broke into the vehicle and stole a 9 mm SIG pistol that had been left in the vehicle. The boys were apprehended by company security personnel and locked up overnight.
Friday 11 June 2004
18. Mr Giru prepared a written report on the incident addressed to the company’s managing director. He explained that the incident had been caught on camera and that the boys had admitted stealing the pistol and would be handed over to the police. He indicated that this was the latest in a series of criminal incidents involving the plaintiff’s sons:
Since Joe Kala [has] been employed his sons have been involved in crime in our community. His son Junior Kala stole 12 pairs of shoes from Maniam’s house and sold them on two different occasions. Only one pair was recovered. He was arrested by police and later released.
Another son Philip Kala age 15 years doing grade 5 at Mosa Primary School was arrested by police and charged for selling marijuana to school children. He was found guilty by the court cautioned and discharged.
On a second incident Philip Kala tried to grab [a] daughter of an employee Kisokau Kanandru our pathologist and tried to have sex with her. The matter was reported. Kisokau and parents agreed to sort the matter out of court.
Conclusion
Joe Kala’s sons are undesirable and should not be living in our community. They are [a] threat to this community and NBPOL as a whole. This current incident is a criminal act and a disgrace to the company as an executive’s son was involved.
Joe Kala have no control over his sons.
Recommendation
I recommend that Joe Kala and Kaunian Bendu (crane operator) be terminated as their sons are involved in this crime.
19. Mr Giru gave a copy of his report to the company secretary, Mr Waninara, who viewed a videotape of the previous day’s incident, considered the matter and decided that the plaintiff should be immediately terminated.
20. Mr Waninara wrote a letter to the plaintiff dated 11 June 2004:
Dear Joe,
As you are aware a number of your children who reside with you on compound have been causing problems including theft, and drug possession. The most recent case is the break-in and theft of a firearm from a visitor’s car on 10 June 2004 by yet another of your children.
Whilst your children’s behaviour may not affect your work, the company expects you as a parent and an executive to keep your children under control and to conduct themselves in a manner that does not impinge on the rights of other employees to a peaceful environment, something which the Company strives to provide for all. Unfortunately there does not appear to be any effort on your part to ensure that your children are of good behaviour. We are left with little choice but to determine your contract of employment.
By this letter the company gives you notice pursuant to clause 8.1(b) of your employment contract that your services be terminated with immediate effect. You will be paid 3 months salary as provided for under your contract.
Please liaise with the Personnel Manager over your entitlements and to arrange for the payment of your Superannuation entitlement.
Yours sincerely,
For: New Britain Palm Oil Limited
[signed]
HIMSON WANINARA
COMPANY SECRETARY
21. When giving evidence Mr Waninara confirmed that it was the incident involving his son and the previous problems caused by the plaintiff’s children that led to the plaintiff’s sacking. He had a duty to look after the welfare of everyone living and working on the company’s properties. He discussed the matter with the Managing Director. It was a gun-related incident so it was treated as very serious.
22. Mr Waninara confirmed that it was his decision, as company secretary, that the plaintiff should be terminated. The decision has nothing to do with the plaintiff’s job performance, he said.
Saturday 12 June 2004
23. The plaintiff attended the office of the personnel manager who handed him a sealed envelope containing Mr Waninara’s letter and told him that the company had terminated his employment.
24. At that time the plaintiff was aged 45, married with ten children, and resided in company-provided accommodation at Mosa.
18 June 2004
25. The plaintiff says he was in a state of shock as he felt that he had done nothing wrong. He says that he assisted the Kimbe police in identifying his son, who was arrested, questioned, charged and detained in custody.
26. The plaintiff’s son appeared twice at Kimbe District Court. On the second occasion, on 18 June 2004, the police withdrew the charge and he was discharged.
After June 2004
27. The plaintiff was paid out his final entitlements on 3 August 2004. He commenced the present court proceedings on 14 June 2005.
PLAINTIFF’S SUBMISSIONS
28. Mr Takin submitted that the company breached the contract in two respects:
29. The first argument was based on clause 8 of the contract. Mr Takin argued that the contract was terminated for a clear and specific reason – misconduct by the plaintiff’s son – which was not a good reason as it was not a ground of termination provided for by the contract. Clause 8.2 allowed the company to terminate the contract in any one of six circumstances identified in sub-clauses (a) to (f), eg where the employee is guilty of dishonesty, insobriety or a criminal offence or misconducts himself as an officer of the company. None of those circumstances applied here. In particular, it was the plaintiff’s son who was alleged to have been guilty of a criminal offence, not the plaintiff.
30. Clause 8.1 can only be relied on by the company if it wants to terminate a contract for reasons beyond its control, eg if its operations are curtailed due to an earthquake. In the alternative, it should be read down to only allow the company to terminate the employee for a good and proper reason. It is unprecedented, he said, for an employer to sack an employee because of misbehaviour by his children. The actions of a son should not be allowed to justify economic suffering for an employee and his whole family. Not only is it wrong in principle to allow employers to treat their employees in such a way, it was doubly wrong in this case as the criminal case against the plaintiff’s son was dismissed. As for the allegations against his other sons they were either trivial or had been dealt with by the court. Similar allegations against the children of other NBPOL employees had not resulted in their parents being sacked. The company was practising double standards and should not be allowed to get away with it, Mr Takin submitted.
31. As to the natural justice issue, Mr Takin argued that the plaintiff had a contractual right to natural justice. The company regulations required that an employee be given the opportunity to state his case before being terminated. The regulations were part of the terms and conditions of the plaintiff’s contract of employment. The plaintiff was not given any opportunity to state his case on why he should not be terminated. The plaintiff had no knowledge of the alleged break-in and theft by his son until he was told about it. He then co-operated with the company’s security division and the police and his son was charged. The next thing he knew, he received a termination notice. His side of the story was never heard. The decision to terminate him was made in the heat of the moment, contrary to the company regulations, Mr Takin submitted.
DEFENDANT’S SUBMISSIONS
32. Mr Anis submitted that the contract was terminated under clause 8.1(b), not under clause 8.2. Those clauses are intended to operate separately. Clause 8.2 allows termination for cause, in which case the company is entitled to terminate the contract immediately without notice or money in lieu of notice. Clause 8.1(b), on the other hand, allows the company to terminate the contract for any reason whatsoever, in which case the company must give notice or pay money in lieu of notice. The company did not have to specify a reason, which is consistent with the common law principle that an employer may hire or fire an employee for any reason or for none.
33. As for the alleged breach of natural justice, Mr Anis submitted that there was nothing in the contract that gave the plaintiff a right to be heard, which is consistent with the common law principle that the employer can fire at will. The company regulations did not apply to this contract because of clause 17.4 which provides that the contract constitutes the whole agreement between the parties and supersedes any previous agreement. If the regulations do form part of the contract, they are nonetheless irrelevant as the plaintiff was not terminated for disciplinary reasons, he was terminated at will. Section 3 (discipline) of the regulations does not apply.
34. The company paid the plaintiff what was due to him under clause 8.1(b) and by doing that the contract was lawfully terminated, Mr Anis submitted.
THE ISSUES
35. There are two:
FIRST ISSUE: DID THE COMPANY BREACH THE CONTRACT BY TERMINATING THE PLAINTIFF’S EMPLOYMENT WITHOUT GOOD REASON?
36. This is a matter of contractual interpretation.
37. The company terminated the contract under clause 8.1(b). I agree with Mr Anis that clause 8.2, which provides for immediate termination in six prescribed circumstances, is largely irrelevant to this case.
Should reasons be given for termination? Should they be valid reasons?
38. I do not agree with Mr Takin’s argument that termination under clause 8.1(b) is restricted to circumstances beyond the employer’s control. Clause 8.1(b) allows the company to terminate the contract by giving immediate notice and paying the employee the cash equivalent of three months salary and benefits. It does not say that termination under this clause can only occur in certain circumstances. It puts no express limit on the circumstances.
39. On the other hand, I do not agree with Mr Anis’s argument that clause 8.1(b) allows the company to terminate the contract for absolutely any reason, even an irrational or unlawful one. I think I follow the argument, which is that the company is not obliged to give any reason if it terminates under this clause, therefore there can be no inquiry or correspondence entered into if it chooses to give a reason. However, the clause does not say that the company does not have to give a reason. Therefore it is to be implied that the company is obliged to give a reason; and also that it should not be an irrational or unlawful one, such as a reason that offends against a provision of the Constitution.
40. If, for example, the company had terminated the contract on the ground that the plaintiff is a Blues supporter that would be an irrational reason. If it terminated the contract because he was a Highlander, it would not only be irrational, it would offend against the plaintiff’s right not to be discriminated against on the ground of race or place of origin under Section 55 (equality of citizens) of the Constitution. A contract must always be interpreted and applied subject to the Constitution. In those hypothetical cases the reasons would not withstand scrutiny. A court would, I suggest, find that they were unjustifiable reasons for terminating someone’s employment and that a breach of contract had occurred.
41. As I pointed out in Sukuramu’s case, PNG is a party to International Labour Organisation Convention No 158, the Termination of Employment Convention. Article 4 (justification for termination) provides that the employment of a worker shall not be terminated unless there is a valid reason for such termination connected with the capacity of the worker or based on the operational requirements of the undertaking, establishment or service. Provisions of contracts of employment should be interpreted in a way that advance the purpose of such convention, which PNG is bound by international law to give effect to. The purpose of ILO Convention No 158 appears to be to protect employees against harsh or oppressive termination of employment at the initiative of employers.
42. Parties to a contract of employment can expressly agree to exclude the operation of any part of the Convention. However, that is not the case with the present contract. Therefore it is legitimate for the court to determine the validity of the grounds for termination.
Was there a valid reason in this case?
43. The company gave a reason for termination: the plaintiff’s son was involved in a break-in of a vehicle and theft of a firearm, it was the latest in a series of incidents involving his children and he had not ensured that they were of good behaviour. The company thus complied with its duty to give a reason, so the question becomes whether it was a valid reason. Put the other way around: was it an irrational, invalid or unlawful reason?
44. Mr Takin strongly argued that the reasons given by the company are invalid. They are "a joke", he submitted. They are irrational or – to use the language of ILO Convention No 158 – not connected to the capacity of the worker or based on the company’s operational requirements. He argued that it makes no sense to penalise a father so dramatically as to sack him from a job that he has been performing satisfactorily simply because of alleged misconduct by his children.
45. I see some merit in Mr Takin’s argument but not enough to convince me that the company overstepped the limits of rationality by deciding that the plaintiff should be terminated.
46. In embarking on the sort of inquiry I am now engaging in, I need to make sure that – just as in a judicial review of administrative action – I don’t step into the shoes of the decision-maker and reconsider the merits of, or remake, the decision being challenged. The court’s task is to check whether the employer made an irrational or unlawful decision, one that travelled beyond the limits of clause 8.1(b) of the contract. That is not the case here because Mr Anis has convinced me that the company made its decision bona fide as it was genuinely concerned about the criminal behaviour of the plaintiff’s sons.
47. Mr Waninara explained in his oral testimony how the company strives to achieve a peaceful and harmonious environment for its employees on all the company’s properties; and this admirable objective tends to be defeated if employees’ children are engaged in criminal behaviour. I appreciate the rationale behind the decision to sack the plaintiff. I consider that it can be justified by reference to – again, using the language of the ILO Convention – the ‘operational requirements’ of the company.
Conclusion on first issue
48. I resolve the first issue in favour of the company. The company terminated the contract for a valid reason. There was no breach of contract in that regard.
SECOND ISSUE: DID THE COMPANY BREACH THE CONTRACT BY TERMINATING THE PLAINTIFF’S EMPLOYMENT WITHOUT GIVING HIM A RIGHT TO BE HEARD?
49. Again this is a matter of contractual interpretation. Was it a term of the contract that the plaintiff be given a right to be heard prior to termination?
Competing arguments
50. Mr Takin argues yes because of the provisions of the Company Regulations which are incorporated as terms and conditions of the contract. He asserts that the decision to terminate a person’s employment is subject to the rules of natural justice.
51. Mr Anis argues no because the Company Regulations do not form part of the contract; but even if they do he argues that the provisions dealing with disciplinary cases are not applicable. There is simply no term of the contract that gives a right to be heard, so the common law principle that an employer can fire at will, without notice, applies.
Two questions
52. The competing arguments give rise to two questions of law:
A right to be heard under the Company Regulations?
52. Mr Anis argued that the regulations had no relevance to this case but I am unable to accept that bold proposition. The regulations are referred to in at least five clauses of the contract.
53. In clause 1 (interpretation) the term "Company Regulations" is defined to mean:
The company’s regulations promulgated by the Board covering employees generally, as in force at the date of this contract. [Emphasis added.]
54. Clause 6 (performance of duties) states, amongst other things:
The Employee shall during the continuance of his employment under this Contract ... observe, perform and be bound by all relevant rules and regulations for the time being of the Company whether contained in the Company Regulations or otherwise.
55. Clause 10 (passages) is about leave and repatriation fares or passages. It states, amongst other things:
The company shall pay the cost of passage of members of the Employee’s family in accordance with the Company Regulations.
56. Clause 12 (medical) states, amongst other things:
The Employee and his family will be entitled to medical attention in accordance with the Company Regulations.
57. Clause 14 (children’s educational allowance) states:
During continuance of the Employee’s employment under the contract, the Company shall provide assistance towards school expenses in respect of each child of the Employee, in accordance with the Company Regulations.
58. The inference to be drawn from the number of references to the Regulations in the contract is that the Regulations generally must be read alongside the contract to appreciate all the terms and conditions of the contract. Clause 17.4, which Mr Anis argued excluded the Regulations from the contract, simply clarifies that if there have been any previous contracts or agreements between the parties, they are superseded by this contract. It does not have the effect of making the express terms of the written contract the exclusive source of all terms and conditions of the contract. There is no other clause that says that the Regulations do not apply to the contract.
59. The Company Regulations, on their terms, are not expressed to apply only to a certain class of employees. This supports the conclusion that the Regulations do, generally, form part of the contract. They are, generally, incorporated within it. I keep saying ‘generally’ as there may be some parts of the Regulations that by their nature are inapplicable. For example, Section 1.1 (non-executive wage rates) would not apply to the plaintiff’s contract, which was an executive service contract. There might be other provisions of the Regulations that are inconsistent with the contract, in which case common sense would dictate that the provisions of the contract would prevail.
60. In the present case Mr Takin has seized upon Section 3.1 (discipline) of the Regulations, which relates to hearing of disciplinary cases, to support the argument that the Regulations confer a right to be heard. Section 3.1 requires that disciplinary cases be thorough and not conducted in the heat of the moment and that the employee be given a proper opportunity to state his or her case.
61. However, I consider that Mr Anis counterpunched effectively by pointing out that the plaintiff was not dismissed for disciplinary reasons. He was not terminated ‘for cause’ under clause 8.2 of the contract. Nobody alleged that he was guilty of "misconduct", which is the word used by Section 3.1 of the Regulations to describe the sort of conduct appropriate for disciplinary action.
62. As no other provisions of the Regulations were relied on by the plaintiff, I find he had no right to be heard under the Company Regulations.
A right to be heard by virtue of some other law?
63. This is where my decision in Sukuramu’s case becomes relevant. The plaintiff in that case was a carpenter employed by NBPOL under a written contract of employment. The contract was not in the same terms as the contract in the present case, though the structure of it was similar. It provided for immediate termination for cause and a notice period of one month in the event of termination for other reasons. The plaintiff was sacked after it was alleged he assaulted his supervisor. He was not given a right to be heard. I upheld a claim for wrongful dismissal after finding that it was an implied term of the contract that the company would give the employee a right to be heard on why he ought not be dismissed before making the decision to terminate his employment.
64. In Sukuramu, as in the present case, the company argued that it was not obliged to give a right to be heard due to the common law rule that an employer can hire and fire at will, with or without good reasons, without giving a right to be heard and without any right of appeal. The leading case in support of that approach is the Supreme Court’s decision in Jimmy Malai v PNG Teachers Association [1992] PNGLR 568, Woods J, Hinchliffe J, Konilio J.
65. In numerous cases since then, the National Court has taken the same approach. For example: Bruno Baiwan v University of Papua New Guinea [1995] PNGLR 18, Andrew J; Paddy Fagon v Negiso Distributors Pty Ltd (1999) N1900, Kirriwom J; Michael Kandiu v ANZ Banking Group (PNG) Ltd (2002) N222, Davani J; Legu Vagi v NCDC (2002) N2280, Kandakasi J; Patrick Dissing v Cocoa Board (2002) N2314, Lenalia J; Wilson Thompson v NCDC (2004) N2686, Kandakasi J; Pama Anio v Aho Baliki and Bank South Pacific Ltd (2004) N2719, Kandakasi J; Ayleen Bure and Others v Robert Kapo (2005) N2902, Injia DCJ; and Paul Lingei v Ok Tedi Mining Ltd (2005) N2912, Lenalia J.
66. In Sukuramu I held that the common law rule, which I tagged the fire-at-will principle, was no longer appropriate to the circumstances of Papua New Guinea. It has resulted in an unfair and discriminatory system of labour laws as workers in the public sector invariably are protected by natural justice principles if it is proposed to terminate their employment while those in the private sector have next to no protection. The common law fire-at-will principle was adopted as part of the underlying law at Independence. It is not a statutory principle. Therefore its appropriateness is susceptible to continuing review by the courts.
67. I could find no justification for maintaining a dual system of labour laws for the public sector and the private sector. I observed that terminating a person’s employment is a very big thing, especially in a country like Papua New Guinea where jobs are scarce and breadwinners often have large, extended families to care for. The trade union movement is not as strong as in many other countries. There is no legislative social security system. There is no governmental complaints body with the capacity to investigate all alleged wrongful dismissal cases.
68. I therefore formulated a new rule of law under Section 9 of the Underlying Law Act after taking account of four considerations:
69. The new rule of the underlying law I formulated is that:
70. Those implied terms apply unless the parties to a contract agree otherwise. In the present case the question becomes, again, a matter of interpretation. Does the contract expressly or by necessary implication exclude the right to be heard?
71. Clause 8.1(b) says that the company can terminate the contract by giving "immediate notice to the employee" (subject to payment of three months worth of salary and other benefits). Mr Anis argued that the company could invoke clause 8.1(b) to terminate for any reason at all, so a right to be heard would be pointless. I have already rejected the first part of that argument by concluding that the reason must not be irrational or unlawful. I also found that in this case the reason was not irrational or unlawful. The reason for deciding to sack the plaintiff – the alleged criminal behaviour of his children – was a good one. But it does not follow from that, that a right to be heard would be pointless. The opposite is the case. If an employer has a specific reason for wanting to sack an employee, the employee deserves the right to be heard in relation to that reason.
72. I conclude that neither clause 8.1(b) nor any other clause excluded the plaintiff’s right to be heard.
Was the implied term breached?
73. It is clear from the plaintiff’s evidence that he refutes many of the allegations against his children contained in Mr Giru’s report. He regards them as trivial or unproven incidents or matters that have been sorted out already. He feels hard done by because, he says, other children of company employees have committed criminal acts and their parents are still employed. No doubt he would have made out a case for saying that he and his children be given another chance. There are all sorts of issues he could have validly raised if he had been given the opportunity to do so.
74. If the company had put the case for his dismissal fairly to him, explained why it was considering sacking him, given him a right to be heard, listened carefully to what he said and then made a decision to terminate his employment he would have no cause for complaint.
75. But that is not what happened. The incident involving his son happened on a Thursday evening in the absence of the plaintiff. Having found out about what happened he assisted the company on the Friday by handing his son to the police. On Saturday morning he was told to go to see the personnel manager who gave him a termination notice.
Conclusion on second issue
76. No right to be heard was administered. Therefore the company is guilty of a breach of contract.
NEXT STEP
77. This case will now, unless the parties settle, proceed to trial on assessment of damages. The plaintiff asserts in the statement of claim that damages should be awarded on the basis that had he not been wrongfully dismissed he would have been employed for another 10 years. He is seeking damages for ‘unpaid contractual entitlements’ for the balance of his working life of approximately K874,000.00 plus general damages.
78. This judgment does not address the question of the categories of damages that should be awarded or the amount of damages under the various categories claimed. All of those issues remain the subject of argument.
COSTS
79. The general rule is that a party that wins a civil case has its costs paid for by the other side. I see no reason to depart from that rule of thumb and will award costs to the plaintiff.
JUDGMENT
80. The judgment of the court is:
Judgment accordingly.
____________________________
B T Gobu & Associates: Lawyers for the plaintiff
Blake Dawson Waldron: Lawyers for the defendant
PacLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.paclii.org/pg/cases/PGNC/2007/26.html