Home | Databases | WorldLII | Search | Feedback National Court of Papua New Guinea

Courts (PNG) Ltd v Doiwa [2011] PGNC 50; N4286 (11 May 2011)

N4286

PAPUA NEW GUINEA
IN THE NATIONAL COURT OF JUSTICE

OS 296 OF 2008

BETWEEN:

COURTS (PNG) LIMITED
Applicant

AND:

BEVERLY DOIWA in her capacity as the Chairperson of the Arbitration Tribunal
First Respondent

AND:

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Second Respondent

Waigani: Thompson, AJ
2011: 11th May

JUDICIAL REVIEW – wrongful termination of employment – termination without notice or payment in lieu of notice – respondent paid payment in lieu of notice – employee took matter to arbitration tribunal – tribunal reinstated employee – whether tribunal had jurisdiction to reinstate employee to former position – s.36 Employment Act, Order 16 Rule 3 National Court Rules

Facts:

The Applicant company had dismissed Hubert Sul from his employment as Warehouse Controller, under Section 36 of the Employment Act. Although Section 36 entitles the employer to terminate without notice or payment in lieu of notice, the Applicant did in fact pay two weeks pay in lieu of notice. The employee took the matter to the Arbitration Tribunal, and on 4th February 2008 the Tribunal in effect set aside the termination, and ordered the employee's reinstatement to his former position without loss of salary. The Tribunal went on to order that its decision was retrospective to 9th March 2005. The Applicant seeks to review that decision on the grounds that the Tribunal lacked jurisdiction, made errors of law, and acted unreasonably.

Held:

1. The Tribunal did not have the power to order reinstatement. The Tribunal erred by failing to find that under Section 1(k), there was no duty to reinstate in this particular dispute.
   
2. The employee was not contesting any particulars of his contract of employment. He was contesting his dismissal. It was therefore a dispute under Section 1(k), and so special reasons had to be given. As they were not given, the award could only take effect from the date on which Section 25 notice was given.
   
3. The application for Judicial Review is granted. The decision of the Respondent made on 4th February 2008 and registered as an award on 31st March 2008 is hereby brought up to this Court by way of certiorari and quashed in so far as it consists of the decision to reinstate Mr. Hubert Sul to his former position without any loss of wages and salaries and other statutory benefits and entitlements.
   

Cases referred:

Condon v. National Airlines Commission [1978] PNGLR 1
Robinson v. National Airline Commission [1983] PNGLR 476
Bougainville Copper Ltd v. Margaret Elias and Ors [1988] PGNC 5, N649
Steamships Trading Co Ltd v. Joel and Ors [1991] PNGLR 133
Jimmy Malai v. PNG Teachers Association [1992] PNGLR 568
Islands Cargo Services Pty Ltd v. Emmanuel Abau and Ors [1997] PNGLR 469
New Britain Oil Palm Ltd and Ors v. Vitus Sukuramu [2008] SC946

Counsel:

Mr. M. Nale & Mr. P. Wright, for the Applicant
Mr. C. Belo & Mr. L. Kande, for the 1st & 2nd Respondents

11 May, 2011

DECISION

1. The Applicant is applying under Order 16 Rule 3 for Judicial Review of the decision of the Arbitration Tribunal made on 4th February 2008. The Applicant company had dismissed Hubert Sul from his employment as Warehouse Controller, under Section 36 of the Employment Act. Although Section 36 entitles the employer to terminate without notice or payment in lieu of notice, the Applicant did in fact pay two weeks pay in lieu of notice. The employee took the matter to the Arbitration Tribunal, and on 4th February 2008 the Tribunal in effect set aside the termination, and ordered the employee's reinstatement to his former position without loss of salary. The Tribunal went on to order that its decision was retrospective to 9th March 2005.

2. The Applicant seeks to review that decision on the grounds that the Tribunal lacked jurisdiction, made errors of law, and acted unreasonably.

3. I deal first with lack of jurisdiction. The Applicant submits that the dismissal of one employee was not an "Industrial Dispute" within the meaning of the Act, and so the Tribunal could not determine that dispute. They say that the single dismissal of a single employee is not enough to amount to a dispute and, that there has to be an ongoing dispute of a continuing nature. They say that under Section 1(g) of the Industrial Organisations Act, the employee was required to contest and then register the matter within three months. The Applicant later conceded that there was no requirement for registration.

4. The Respondents say that the dispute may come under Section 1(g) but also comes under Section 1(k) of the Industrial Organisations Act. This Act defines "Industrial Matter" to include in Section 1(k) the right to dismiss or duty to reinstate, and defines "Industrial Dispute" to include disputes on industrial matters. They say the Tribunal therefore had jurisdiction.

5. The numbering of Section 1 of the Industrial Organisations Act is not entirely satisfactory, but the meaning is clear and unambiguous. An "Industrial Matter" includes the right to dismiss or duty to reinstate, and "Industrial Dispute" includes a dispute between a single employer and single employee connected with an industrial matter. In this case, there was a dispute between the Applicant and the employee over his dismissal, and there was therefore an Industrial Dispute. The Tribunal had jurisdiction to determine it.

6. I refer next to the Decision itself. The only meaning of the Tribunal's phrase "dismisses the termination" can be that the Tribunal sets aside the termination. Both parties had written submissions and statements before the Tribunal, and there was also oral evidence. The Tribunal did not make any findings on the evidence or statements, apart from criticizing the Applicant's witness for failing to appear and saying that this amounted to a failure to support her lawyer. The Decision does not set out the particular evidence or submissions relied on in arriving at the decision.

By implication, all that can be said is that the Tribunal accepted some or all of the employee's submissions, rejected some or all of those of the employer, and found the termination to be wrongful.

7. The Decision to set aside the termination does not appear on the face of it to be so unreasonable that no reasonable decision maker could possibly have made it. It was open to the Tribunal to find that the Applicant had produced insufficient evidence to show that the termination was properly made under Section 36 of the Employment Act, and to therefore find that it was a wrongful termination. This Decision was one which was able to be made on the evidence before the Tribunal, and so it could not be said to be unreasonable in the "Wednesbury" sense.

8. Once the Tribunal found that the termination was wrongful, it should then have considered the appropriate remedies. The remedy which it in fact ordered, was reinstatement. However, that Decision does not appear to have been founded on any evidence or any law.

9. The Respondents submit that the Tribunal had the power to reinstate. They concede that there is no such power given to the Tribunal in any of the Acts or other legislation. They say that the Tribunal's power comes from the Common Law, and they rely on the case of Islands Cargo Services v. Arbitration Tribunal. I have read that case, and I do not find it persuasive. When finding that the Tribunal had the power to reinstate, the Court accepted that there was no such power in the Courts or Common Law. The Court referred to the Tribunal's powers being conferred by statute, when in fact there is no such power conferred by the Industrial Relations Act or Industrial Organisations Act or any other statute. The Court seemed to have actually relied on cases from Australian Tribunals, which had specifically been given that power of reinstatement by statute. That is not the case in PNG. No statute confers power on the Tribunal to reinstate.

When the Tribunal exercises its jurisdiction to deal with disputes over dismissal or reinstatement, it has to do so in accordance with the law, and cannot go outside it. A Tribunal is not bound by rules of evidence or procedure, but it is bound by the law.

10. When considering an issue of the right to dismiss or duty to reinstate, the Tribunal must take into account the law relevant to the particular dispute before it. There may be specific statutory or contractual entitlements to reinstatement, such as for certain office holders in the public service. There may be such an entitlement by virtue of an Industrial Award applicable to a certain type of employment. In the absence of any such statutory or contractual entitlement, the Tribunal is bound to apply the relevant statutes and common law.

11. There is no statute giving the Tribunal power to reinstate, and so the question is whether or not that power is conferred by the common law. There are a number of cases on the issue which have been referred to by the parties. The common law is well established by the line of authorities from Robinson v. National Airline Commission through to Jimmy Malai v. PNG Teachers Association and to some extent in New Britain Oil Palm Ltd and Ors v. Vitus Sukuramu. These cases confirm the employer's right to dismiss without reasons, under the Employment Act. The cases make it clear that when an employee has been wrongfully terminated, as a general rule he is only entitled to receive what he would have received if he had been lawfully terminated. This generally means pay in lieu of notice and other contractual entitlements. It does not include reinstatement, unless there is a statutory or contractual entitlement to reinstatement. The Courts will not compel the parties to remain in a personal relationship where the basis of trust has gone and the relationship has become noxious to either of them.

12. In the present case, the basis of trust has clearly gone and the relationship has become noxious to the employer. The employee is not a public servant or office holder, and he has no statutory, contractual or common law entitlement to reinstatement. The Tribunal therefore did not have the power to order his reinstatement. The Tribunal erred by failing to find that under Section 1(k), there was no duty to reinstate in this particular dispute.

13. The next issue is whether or not the Decision could have been retrospective. The Applicant says that under Section 36(2) of the Industrial Relations Act, special reasons have to be given for making the orders retrospective. The Respondents say that as it is a dispute under Section 1(g), the exception does not apply. It is agreed that the orders were not by consent, and no special reasons were given.

14. I consider that the dispute was not a dispute under Section 1(g) of the Industrial Organisations Act. The employee was not contesting any particulars of his contract of employment. He was contesting his dismissal. It was therefore a dispute under Section 1(k), and so special reasons had to be given. As they were not given, the award could only take effect from the date on which Section 25 notice was given.

15. That date is not clear. The Applicant thought it might be 8th March 2008. That cannot be right, as that is after the date of the award. The Tribunal stated that the date was 9th March 2005. That is consistent with the documents in evidence around that time. In the absence of any evidence challenging that date, it must be accepted as the date on which Section 25 notice was given, and therefore the award will take effect from that date.

16. In relation to the Decision to set aside the dismissal for being wrongful, the retrospective date is of no real consequence if the Decision for reinstatement is set aside. The employee is simply entitled to be paid his contractual entitlements. There is no evidence before me of the amount of such payment or if there is any dispute over outstanding entitlements. If there is, the parties are at liberty to return to the Court for appropriate orders.

17. For these reasons, I grant the application for Judicial Review. The decision of the Respondent made on 4th February 2008 and registered as an award on 31st March 2008 is hereby brought up to this Court by way of certiorari and quashed in so far as it consists of the decision to reinstate Mr. Hubert Sul to his former position without any loss of wages and salaries and other statutory benefits and entitlements.

18. Each party is to pay its own costs.
__________________________________________

Mr. M. Nale & Mr. P. Wright: Lawyer for the Applicant
Office of State Solicitor: Lawyer for First and Second respondents