N6432
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

CIA No. 70 OF 2016

BETWEEN

PAPUA NEW GUINEA TEACHERS’ ASSOCIATION
(First Appellant)

AND
TOMMY HECKO – PRESIDENT OF
PAPUA NEW GUINEA TEACHERS’ ASSOCIATION
(Second Appellant)

AND
UGWALUBU MOWANA – GENERAL SECRETARY OF
PAPUA NEW GUINEA TEACHERS’ ASSOCIATION
(Third Appellant)

AND
HELEN SALEU – INDUSTRIAL REGISTRAR OF DEPARTMENT OF LABOUR AND INDUSTRIAL RELATIONS
(First Respondent)

AND
ANDRIC YAGRO
(Second Respondent)

AND
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
(Third Respondent)

Waigani: Makail, J
2016: 7th & 9th September

INDUSTRIAL LAW – Powers of Industrial Registrar to suspend – Suspension of General Secretary of Industrial Organisation – Validity of – Industrial Organisations Act, Ch 173 – Sections 39 (4), 40, 50, 55 & 60 
APPEAL – Appeal against decision of Industrial Registrar – Industrial Organisations Act, Ch 173 – 70
No cases cited:
Counsel:
Mr. Z. Gelu, for Appellants 
Mr. J. Kumura, for First Respondent
Mr. A. Maribu, for Second Respondent
No appearance, for Third Respondent

JUDGMENT
9th September, 2016
1.	MAKAIL, J: This is an appeal against the decision of the First Respondent as the Industrial Registrar on 11th May 2016 to first, suspend the Third Appellant from performing his function as General Secretary of an Industrial Organisation the First Appellant pending investigation into allegations of abuse of office and gross misuse of funds belonging to the First Appellant by the Third Appellant.  Secondly, appoint the Second Respondent as Caretaker Administrator of the First Appellant.  Thirdly, direct the Bank of South Pacific Limited (“Bank”) to stop any further withdrawal of funds from the account of the First Appellant pending completion of the investigation. 

2.	The suspension was purportedly made pursuant to Section 39 (4) of the Industrial Organisations Act, Ch 173 (“Act”) but it is unclear what powers the First Respondent invoked to appoint the Caretaker Administrator and further, to direct the Bank to stop any withdrawal of funds from the First Appellant’s account.  

3.	 The appeal is brought under Section 70 of the Act which provides that a person aggrieved by a decision of the Registrar may, within 30 days after the decision or within such further time as the National Court allows, appeal to the National Court, the decision of which is final.  On an appeal, all interested parties are entitled to be heard and the National Court may make such order, including an order as to the costs of the appeal, as it thinks fit.

4.	There is no issue that the appeal was filed within time.  However, it is unclear what type of appeal is envisaged by Section 70.  From the way the parties have approached it, it appears that they have treated it as a hearing de novo.  This is evident from the number of affidavits they have filed and relied on at the hearing.  The evidence was not confined or limited to, but included matters that were not before the First Respondent. Accordingly, the appeal will be treated in that matter. 

5.	In their respective submissions, parties said that the central issue in this appeal is the application and construction of Section 39 (4) of the Act.  It raises the issue of whether the First Respondent had power to suspend the Third Appellant.  The peripheral issues are whether she had power to appoint a Caretaker Administrator and further direct the Bank to stop any further withdrawal of funds from the account of the First Appellant.

6.	Section 39 (4) states:
“The Registrar, may, by order remove from office of the General Secretary or Treasurer of an Industrial Organization who’s, in his opinion, not capable of performing effectively he duties of his office.”  (Underlining is mine).

7.	It was alleged in a letter written by the First Respondent to the Third Appellant dated 11th May 2016 that the latter had abused his office by ending up being charged by the police for sexually abusing a female staff which was pending before the Court and gross mismanagement of funds of the First Appellant.
 
8.	This was after the First Respondent received a complaint or rather, petition from the NCD based financial members of the First Appellant which allegations were said to be grave and warranted an investigation.  Pending that, she suspended the Third Appellant and her “office now assumes the caretaker administration of PNGTA (First Appellant) with immediate effect.”

9.	This was followed by the appointment of the Second Respondent as Caretaker Administrator to “to oversee the affairs” of the First Appellant and further, a direction to the Bank to stop any withdrawal of funds from the account of the First Appellant until completion of the investigation.

10.	It was argued for the Appellants that Section 39 (4) did not confer on the Industrial Registrar power to suspend but rather power to remove the Third Appellant.  This is because of the use of the term “remove” and not “suspend” in this provision.  The term “remove” means to terminate which has the effect of a final or permanent result or outcome.  

11.	The plain English definition of “remove” from the Oxford Advanced Learner’s Dictionary means “To get rid of” further supports this interpretation.  As it has the effect of terminating the Third Appellant, the Third Appellant was not heard prior to his termination.

12.	It was further argued that given that Section 39 (4) uses the term “by order”, it must be read together with Section 50 of the Act.  Section 50 states:

“On a complaint by a member of an Industrial Organization, the Registrar or any other interested party, the National Court may, after giving any person against whom an order is sought an opportunity of being heard, make an order giving directions for the performance or observance of any of the rules of the organization by a person who is under obligation to perform or observe the rules.”

13.	When read together there is a right to be heard prior to suspension and that right was not accorded to the Third Appellant.

14.	However, I do not agree with this part of the Appellants’ submission.  In my view, Section 50 applies to cases where the question involves the performance or observance of the rules of an Industrial Organization.  Where there is failure to perform or observe the rules, the National Court, may order the person to perform or observe the rules.  Here, we are dealing with a case of suspension of a General Secretary of an Industrial Organization.  For these reasons, I find the considerations under Section 50 do not apply in this case.

15.	It was argued for the First Respondent and supported by the Second Respondent that while Section 39 (4) does not use the term “suspend” the object of the Act is about regulating, supervising, controlling and monitoring Industrial Organizations in the country and for that the Industrial Registrar is given that responsibility.

16.	In the performance of that responsibility, she had to suspend the Third Appellant to allow for an investigation to determine the allegations against him.  The suspension is not a stand-alone act or decision but the start of the termination process because if the allegations are sustained, it may result in the termination of the Third Appellant.  Prior to that happening, a report is completed after the investigation and given to the Third Appellant to respond.  Thus, any claim by the Appellants for breach of natural justice or denial of right to be heard is misconceived and should be dismissed.

17.	The objective of the Act based on its preamble is never in doubt, being an Act to provide for the registration and control of Industrial Organisations, and for related purposes.  However, I am not satisfied that Parliament intended that suspension of a General Secretary of an Industrial Organization should be part of the termination process under Section 39 (4).  If that was the intention of Parliament, then it would have used the word “suspend” in this provision.  Even so, it would have provided for it and its procedure separately in the Act.

18.	There may be some force in the First Respondent’s argument and consideration may be given if there is an equivalent of Section 3 (e), (f) and (l) of the Savings and Loan Societies Act, Ch 141 in the Act. Section 3 (e), (f) and (l) of that Act addressed the kind of situation the Respondents and the financial members of the Industrial Organization are in right now. 
	
19.	In such a case, subject to direction from the Governor of the Central Bank, the Registrar of Savings and Loan Societies may suspend the operations of a society and suspend or remove a member or members of the Board of Directors, Supervising Committee, Loans Committee or management of a society and appoint an Administrator to manage the society.  The same cannot be found and said of the Act under consideration. (Underlining is mine).

20.	The absence of an equivalent provision in the Act under consideration does not support the First Respondent’s argument that she has power to suspend the Third Appellant, appoint the Second Respondent as Caretaker Administrator and direct the bank to stop withdrawal of funds from the account of the First Appellant.  

21.	I can see where the First Respondent as the Industrial Registrar is coming from and why she has stepped in, she may have good intentions and acted in good faith to rescue the Industrial Organization and its financial members from unscrupulous executives accused of abusing the office and gross mismanagement of its funds.  But it has exposed her to the allegation that she acted without or beyond her powers in taking those measures against the Appellants and left her in a precarious situation.  

22.	It may even be a desperate case for her intervention when attempts by the financial members of the First Appellant to get the Second and Third Appellants to corporate with them had failed, holding of election of the executives to give the financial members opportunity to elect executives of their own choice have seemingly failed for one reason or another, that the Second and Third Appellants continued to be in office – and power even though it is alleged that their term of office had expired, all these justifying and warranting the intervention of the Industrial Registrar.

23.	However, in the course of intervening and trying to bring the executives of the First Appellant to account for their deeds, she may have acted without or outside her powers and unconsciously encroached on the powers and functions of the Second and Third Appellants.  She must now face the accusation of not only acting without or beyond her powers but denying the Third Appellant a fundamental right – the right to be heard in his defence before purportedly suspending him from office – such right is inherent in any public employment setting and a breach of which may result in any decision made being illegal and void.

24.	These are the concerns and grievances of the Appellants which form the grounds of the appeal and the basis of the complaint before this Court.  

25.	While the Act is intended to control Industrial Organizations, there is nothing in it that directly deals with discipline of executives and members of an Industrial Organization.  Even Section 39 (4) which the Industrial Registrar relied on to suspend the Third Appellant is not a disciplinary provision.  

26.	It deals with qualifications of officers of an Industrial Organization one of them being the age requirement of over 21 years.  Another is where the person is an officer of another Industrial Organization which is not actually engaged in an industry or occupation with which the organization is directly concerned unless the Industrial Registrar so approves.  The Industrial Registrar approves their appointment but if they do not perform, she can remove them.

27.	It is against that back drop that the Industrial Registrar may exercise the power conferred on her under Section 39 (4) to order the removal of the General Secretary or Treasurer of an Industrial Organization who is, in her opinion, not capable of performing effectively the duties of his office.  So the power to remove a General Secretary is quite limited and anything beyond that which may include investigation of allegations of abuse of office and mismanagement of funds fall outside her jurisdiction.  For these reasons, I find Section 39 (4) does not apply nor does it confer on the First Respondent power to suspend the Third Appellant.

28.	The conferring of power to discipline the General Secretary is found elsewhere and that is in clauses 28 and 29 of the Third Appellant’s contract of employment.  Clause 28 deals with termination of employment and the grounds of termination.  Clause 29 deals with termination for cause where there is a right of response to the allegation before decision.   

29.	Then the Constitution and By-Laws of the First Appellant are invoked.  Rules 37, 38 and 39 provide for discipline, termination and dismissal of employees including suspension. Pursuant to Rule 15 the National Management Committee (“NMC”) comprising of the National President, National Vice President, National Treasurer, National Women’s Representative member and two Regional Representative members are charged with the power to discipline the General Secretary, who is by virtue of his contract of employment, an employee of the First Appellant.

30.	If for one reason or another the NMC does not take disciplinary action against the Third Appellant the First Respondent can invoke Section 50 of the Act to secure an order from the National Court to get the NMC to comply with the Rules on discipline (Rules 37, 38 and 39) and take disciplinary action against the Third Appellant.  This option is and was open to the First Respondent and even the financial members of the First Appellant who may fall into the group of persons described by the Act as “any other interested party” to utilise.

31.	It is claimed that the allegation of sexual abuse of a female staff member is serious and while that is quite true, it remains an allegation until proven otherwise.  Where a criminal charge has been laid against the Third Appellant, it becomes a police matter and the Court to deal with.  There is a process to deal with it and that process must be allowed to take its course.  Where internal disciplinary action is necessary, Rules 37, 38 and 39 of the Constitution and By-Laws must be invoked by the NMC.  If that is not forthcoming, the First Respondent has the option of invoking Section 50 to secure compliance.

32.	In the case of gross mismanagement of funds, in my view, there are adequate measures in place in the Act to safe-guard funds of an Industrial Organization from being abused or misused by its executive management.  One of them being, and I should added, an effective one and to the advantage of the Industrial Registrar is an application by the Industrial Registrar to the National Court for an injunction to restrain any unauthorised and unlawful expenditure of funds of the First Appellant under Section 55 of the Act.  

33.	The other being inspection of account books and register of members by the Industrial Registrar or a person authorised by her in writing usually an “inspector” under Section 60 of the Act.  It is an offence under Section 60 (2) if any person hinders or obstructs the Registrar or an Inspector from carrying out the inspection.  The offence carries a fine of up to K200.00 or imprisonment of up to six months or both.  If the executive management of the First Appellant including the Second and Third Appellants did not allow her or her officer to inspect the accounts of the First Appellant, she can have them charged.

34.	To my view, the absence of an expressed provision in the Act on appointment of a Caretaker Administrator is an indication that the appointment of the Second Respondent as Caretaker Administrator is a duplication of the functions of the Registrar and inspector.  Even then the letter of appointment of the Caretaker Administrator is quite vague as to the role he plays in the organization.  There is no evidence of a term of reference which is generally provided upon appointment of this nature, especially where the Second Appellant is still in office.  

35.	Does the Caretaker Administrator take over the entire administration; or what does the First Respondent mean by saying that he is to “oversee the affairs” of the First Appellant?  It is all unclear and further points to the flaw in the argument that the First Respondent has power to appoint a Caretaker Administrator.  
36.	It was indeed unnecessary for a Caretaker Administrator to be appointed and further, a direction to the Bank without an order from the Court to stop any withdrawal of funds pending investigation.  For the First Respondent to overlook those measures which I have mentioned, and I should add, are by law available to her to utilise, is almost a far cry.  It is almost a betrayal of the vast powers she has and I am referring specifically to Sections 40, 50, 55 to 60 of the Act.

37.	All these matters have persuaded me to agree with the Appellants that the First Respondent acted without power to suspend the Third Appellant, appoint the Second Respondent as Caretaker Administrator and further direct the bank to stop withdrawal of funds from the account of the First Appellant. 

36.	I find the decision is illegal, null and void.  The appeal is upheld and the decision is quashed forthwith.  Costs shall follow the event.
Judgment and orders accordingly.
________________________________________________________________
Gelu Lawyers      : Lawyers for the Appellants
Kumura Lawyers:	Lawyers for the First Respondent
Liria Lawyers      : Lawyers for the Second Respondent