N8727
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 859 OF 2015

BETWEEN:
SEBASTIAN TAWA
Plaintiff

AND:
MAINLAND HOLDINGS LIMITED
First Defendant

Lae: Dowa AJ
2020:  28th July & 14th October

EMPLOYMENT LAW – claim for unlawful termination – plaintiff alleges defendant forced him to resign from his employment due to allegations of receiving bribes in the course of his employment – plaintiff alleges the defendant did not follow termination provisions in the company disciplinary  manual in terminating him – plaintiff claims his forced resignation amounted to unlawful termination – issues are whether the plaintiff’s forced resignation amounted to unlawful termination and whether the plaintiff is entitled to any damages – plaintiff has established that his forced resignation amounted to unlawful termination – plaintiff has already been paid his entitlements including leave pay – plaintiff has not pleaded his claims for defamation and breach of his constitutional rights – plaintiff’s claim is dismissed 

Cases Cited:

Benny Pawa v Halliburton overseas Ltd (2020) N8272
David Simon v Michael Koisen (2018) N7075
Joe Kapemeta v Kumono (2012) N4598
Jimi Malai v PNG Teachers
Kerowa v Harriman (2017) N6940
Petrus & Gawi v Telikom (PNG) (2008) N337
Ruhuwamo v PNG Ports Corporation (2019) N8021
Saki v Kangleon (2019) N7860

Counsel:

T. Berem, for the Plaintiff
J. Aku, for the Defendant

DECISION

14th October, 2020

1.	DOWA AJ:	 This is a decision on the substantive matter after trial on both liability and quantum.  The Plaintiff claims, he was forced to resign by the Defendant, and alleges the forced resignation amounted to unlawful termination.  He therefore seeks damages for unlawful termination of employment, for defamation and for breach of constitutional rights.

	Facts

2.  	Prior to 25th March 2014, the Plaintiff was employed by the Defendant as Manager – Farm Services and Transport division of the Defendant company.  

3.	On 25th March 2014, the Plaintiff resigned from his employment from Mainland Holdings Limited, the Defendant.  The Plaintiff alleges he resigned under duress and not voluntarily.

4.	On the day of resignation, the Plaintiff was interrogated by one Geoff Whitehouse, the then Human Resource Manager of the Defendant, in relation to some bribery allegations.

5.  	The Plaintiff was told they had information, that he was involved in receiving bribes from transport contractors.  He was given the option to either resign, or face termination. The Plaintiff then tendered in his resignation.

6.	The Plaintiff denies the allegations of bribery and alleges that the resignation was forced on him and not voluntary.  He alleges that the forced resignation amounted to unlawful termination.

7.	The Plaintiff alleges further that the Defendant did not follow the Defendant company’s disciplinary procedures before forcing him to resign.

8.	As a result of the unlawful termination he suffered loss of income and this is the basis of the proceedings.

Issue

9.	The issues for consideration are:

a)	Whether or not the Plaintiffs resignation amounted to unlawful termination.

b)	Whether or not the Plaintiff is entitled to any damages as claimed.

Evidence

10.	The parties agreed to use affidavit evidence only.  The Plaintiff relies on the following affidavits:

a)	Affidavit of Sebastian Tawa sworn 27/10/2017 and filed 13/12/17 – Exhibit P1
b)	Affidavit of Sebastian Tawa sworn 08/10/2019 and filed 08/10/2019 – Exhibit P2
c)	Supplementary Affidavit of Sebastian Tawa sworn 02/12/2019 and filed on 2/ 12/2019 – Exhibit P3

12. The Defendant relies on the affidavit of Elijah Monope sworn 05/11/2019 and filed 06/11/2019 - Exhibit D1.

	Plaintiff’s Evidence

13.	This is the summary of the Plaintiffs evidence.  At the time of termination, he was employed as Farm and Transport Manager from 2008 to 25th March 2014.  He was previously employed from 1981 to 1995.  He has served the Defendant company for 20 years.

14.	On 25th March 2014 Mr Geoff Whitehouse, the Human Resources Manager called the Plaintiff, into his office and questioned him about bribery allegations levelled against the Plaintiff.  After about 2 hours of questioning, the Plaintiff was given the option: either to tender his resignation or he would be terminated from employment.  The Defendant says, he reluctantly chose to resign to safe face and protect his integrity, rather than being branded a terminated employee.

15.	The Plaintiff says, he was forced to resign.  The Defendant did not follow the Defendants Disciplinary Manual under Clause 5.  The Disciplinary Manual provides for disciplinary procedures which require amongst others:

a)	An investigation into allegations.
b)	Determination of severity of allegations.
c)	Request for explanation by employee
d)	Hearing of the charge/complaint
e)	Representations at the hearing
f)	Advising of decision
g)	Allowing for appeal process

16.  The Plaintiff alleges, none of the above process was accorded to him.
	
Defence Evidence

17.	The defence evidence was given by Elizah Monope the current Human Resource Manager of the Defendant company.  (Exhibit D1).  The Defendant confirms the Plaintiff was employed by the Defendant from periods 1981 to 1995, and March 2008 to March 2014.  Mr Monope says, the Plaintiff was reported to have received bribes from several transport contractors of the Defendant.  After receiving the report, Mr Geoff Whitehouse, the former Human Resource Manager, gave the Plaintiff the option to either resign or be terminated.  The decision taken by Mr Whitehouse in giving the option was based on the following considerations:

a)	Allegations of bribery, a serious allegation
b)	No corruption policy of the Defendant
c)	Years of service to the Defendant by the Plaintiff (being 20 years).

18.	Mr Monope said, the Defendant has a strong no corruption policy.  Although there are internal disciplinary processes to be followed, the Defendant reserves the right to terminate employees without following appeal processes especially those implicated in corruption, or those who have allegations of cheating or bribery in the company.  The allegation against the Defendant was serious warranting summary dismissal, but because of his long service, he was given the option to resign. 

19.	Mr Monope says, the Plaintiff upon resignation, was paid his full and final entitlements by the Defendant in the sum of K20,192.30.

	Plaintiffs Submissions

20.	Mr Berem submits, that the Plaintiff was forced to resign under duress.  The forceful resignation amounts to unlawful termination.

21.	Mr Berem, Counsel for Plaintiff submits that the Defendant failed to comply with its own Disciplinary and Grievance Procedure/Manual when dealing with the Plaintiff up to the time of forceful resignation of employment.  Mr Berem cited the case of Benny Pawa v Halliburton overseas Ltd (2020) N8272 in support of the submission.

23.	Mr Berem, submitted further that the action of Mr Whitehouse was harsh and oppressive and not reasonably justifiable in a democratic society like Papua New Guinea, thereby contravening Section 39(1) of the Constitution.  Mr Berem cited the case of David Simon v Michael Koisen (2018) N7075, in support of the submissions.

24.	Mr Berem further submitted that the forceful resignation was an act prohibited by section 41 of the Constitution and was harsh and oppressive. Again, Counsel for the Plaintiff relied on the decisions of Petrus & Gawi v Telikom (PNG) (2008) N337and Joe Kapemeta v Kumono (2012) N4598.

	Defendants Submissions

25.	Mr Aku, Counsel for the Defendant submitted that the Defendant is not liable for the following reasons:

a)	The Plaintiffs employment was terminated in accordance with the Common Law principle of Master/Servant relationship:  The Defendant relied on the case of Jimi Malai v PNG Teachers and Ruhuwam v PNG Ports.

b)	The Plaintiff was given the option of resignation or face termination based on allegations of bribery and corruption received in early March 2014, and the Plaintiff chose to resign.  This should not be taken as forceful resignation.  The Defendant submits, the recent case of Kerowa v Harriman which discussed the common law principle that forced resignation amounts to unlawful termination should not be followed. 

c)	The Defendant has a no tolerance policy on corruption, thus it reserves the right to terminate employees, without the need to follow the Disciplinary/Grievance Procedure/Manual.

d)	Irrespective of, whether the termination was legal or not, the Plaintiffs entitlements were paid in full, and there is nothing owing, relying on the authority in the case of Saki v Kangleon (2019) N7860.

e)	In respect of the claim for defamation, the Defendants says there is no pleading and evidence.

f)	Finally, in respect of allegations of breach of human rights, the Defendant submits, the claim is misconceived as no rights are created under section 39 of the Constitution.

Reasons for Decision

26.	The Plaintiffs claim is for damages for unlawful termination, defamation and for breach of constitutional rights under section 39 of the Constitution. The Plaintiff claims he was forced to resign which amounts to unlawful termination.  The evidence of Mr Monope shows, the Defendant was seriously considering termination after they received reports that the Plaintiff was receiving bribes from transport contractors.  But due to the many years of service by the Plaintiff they gave him the first option to resign.  I note that the Defendants chose not to follow its Disciplinary/Grievances Procedure/Manual due to its no corruption policy.  The Defendants paid in full all the Plaintiff’s final entitlements, which the Plaintiff has accepted. Therefore, there is no outstanding entitlements. 

27.   The Employment Act 1978 provides for minimum terms of employment.  The evidence shows that the Plaintiff was employed under an oral contract of service.  Some of the terms of the oral contract were recorded which is consistent with section 15 of the Employment Act.

28.	The Defendant has a Disciplinary Procedure/Manual which provides a procedure for dealing with staff discipline.  I find the staff Disciplinary Manual was supplementary to the minimum requirements of the Employment Act and forms part of the terms of employment of the Plaintiff by the Defendant.

29.	In the present case, the Defendant chose not to use the Disciplinary Procedure in dealing with the Plaintiff.  The Defendant was of the view that the Plaintiffs conduct warranted summary dismissal. Under Clause 5.17 of the Discipline and Grievance procedure the defendant reserves the right to summarily dismiss an employee of gross misconduct which includes theft, fraud and insubordination. This clause is identical to section 36 (1) of the Employment Act which provide certain grounds for summary dismissal. Section 36(1) reads and I quote:

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–
(i) 	wilfully disobeys a lawful and reasonable order; or
(ii) 	misconducts himself by an act of omission or commission that is inconsistent with the due and faithful discharge of his duties; or
	(iii) 	is guilty of a fraud or dishonesty; or
	(iv) 	is habitually neglectful of his duties; or
	(v) 	is imprisoned for a period exceeding seven days; or
(vi) 	is continually absent from his employment without leave or reasonable excuse; or
(vii) 	is convicted of an offence or contravention of this Act or any other law relating to employment; or
(b) 	on any other ground on which he would be entitled to 			terminate the contract without notice at common law.
30.   The law on termination of simple employment contract is settled in this jurisdiction.  In Ruhuwamo v PNG Ports Corporation (2019) N8021, Thompson J said this at paragraph 17-19 of her Judgment.
	“Relevant Law
17. 	It is well settled by a long line of case authorities in PNG, that an employer has the right to hire and fire his employees and does not have to give reasons for his decision. If this is done in breach of the terms of a contract, the measure of damages is what the employee would have received for his salary and other entitlements if the contract had been lawfully terminated. (see Jimmy Malai v PNG Teachers Association (1992) PNG LR 568, Paddy Fagon v Negiso Distributors Pty Ltd (1999) N 1900, New Britain Palm Oil Ltd v Vitus Sukuramu (2008) SC 946, and Porgera Joint Venture Manager Placer (PNG) Ltd v Robin Kami (2010) PGSC 11).
18. 	This is consistent with the provisions of the Employment Act. Under S 34, a contract of employment may be terminated at any time, with the length of notice being either as specified in the contract, or dependent on the length of the employment. If an employee has been employed for over five years, the length of notice shall be not less than four weeks. Under S 35, the termination may be by notice, or by payment in lieu of notice.
19. 	Under S 36, the employer may terminate without notice or payment in lieu, if the employee, inter alia, willfully disobeys a lawful and reasonable order or misconducts himself by an act of omission or commission that is inconsistent with the due and faithful discharge of his duties.”
31.   The allegations against the Plaintiff were bribery allegations and falls under section 36 of the Employment Act. The Plaintiff said these allegations were not proven. Since the procedure under the Disciplinary Manual was not used, the allegations remain mere allegations. I say this because the Defendant has not adduced any evidence supporting the allegations at this trial.

32.	I find, the Plaintiff did not freely resign.  He could foresee, if he did not resign, he was going to be terminated, as it was made clear to him. The Plaintiff was not given sufficient time to consider his options. Where an employer forms a view that there is cause for summary dismissal of employment and wishes to give the employee an option for resignation it is incumbent upon the employer to set it out in clear terms the reasons with relevant evidence and sufficient time to the employee to consider before implementing its decision.

33.	In Kerowa v Harriman (2017) N6940, Cannings J held that where an employer gives an option to an employee to resign or have his employment terminated constitutes forced resignation of employment and forced resignation of employment constitutes unlawful termination. At paragraph 9 of the judgment His Honour said:

“ Constructive dismissal is a form of wrongful dismissal action, the essence of which is that the conduct of an employer leads to the forced resignation of an employee. There appears to be no reported PNG case of constructive dismissal. However, it is, as Mr Pipike submitted, a recognised form of common law action. It has been adopted as part of the underlying law of PNG. One of the leading cases in the Pacific is Auckland Shop Employees Union v Woolworths (NZ) Ltd [1985] 2 NZLR 372, in which the New Zealand Court of Appeal described three scenarios in which a forced resignation will be deemed to have occurred:

(a) 	where the employee is given the choice of resignation or 	dismissal; or
(b) 	where the employer has engaged in a course of conduct with 	the deliberate and dominant purpose of coercing the 	employee to resign; or
(c) 	where a breach of duty by the employer forces the employee 	to resign.”
34.   	Adopting and applying the above principles in the present case, I accept that the Plaintiff was forced to resign. And the forced resignation amounted to constructive dismissal or unlawful termination of employment. 
35.	What then is the remedy for unlawful termination? In respect of unlawful termination, Her Honour, Thompson J, in Saki v Kangleon (2019) N7860 said this at paragraph 26 of her judgment: 
 “The law on unlawful termination is well settled. An employee who is unlawfully terminated, will receive as damages the amount which she would have been entitled to receive if she had been lawfully terminated. (See Pama Anio v Aho Baliki (2004) N2719, The Central Bank of PNG v Gabriel Tugiau (2009) SC 1013 and William Maninga v Ramu Sugar Ltd (2010) N4118). In order to receive damages, any actual loss and damage must be clearly pleaded with particularity, and then established by proper evidence at the hearing. If there is no proper foundation in the pleadings or no proper evidence to support the pleadings, no damages can be awarded. (See PNGBC v Jeff Tole (2002) SC 694 and Central Bank of PNG v Gabriel Tugiau (supra).”
36.	The only remedy available is for outstanding entitlements. In the present case the Plaintiff has been paid all his entitlements inclusive of long service and leave pay and there is nothing outstanding. The Plaintiff has confirmed receiving his entitlements and therefore I will make no award.
37.	The Plaintiff’s next claim is for defamation. The Plaintiff is seeking damages for defamation. In respect of defamation, I note the Plaintiff did not provide particulars of defamation in the statement of claim. Order 8 Rules 29 and 84 of the National Court Rules require specific pleading of particulars for defamation.
 
38.   The Supreme Court settled the law on pleadings in the case, Papua New Guinea v Tole (2002) SC694. At page of their judgment, the Court said:

”First Two Issues – Pleadings
	The first two issues are closely related. They involve the issue of pleadings so they are being dealt with together. The law on pleadings in our jurisdiction is well settled. The principles governing pleadings can easily be summarized in terms of, unless there is foundation in the pleadings of a party, no evidence and damages or relieves of matters not pleaded can be allowed. This is the effect of the judgements of this Court in Motor Vehicles Insurance (PNG) Trust v. John Etape [1995] PNGLR 214 at p.221 and Motor Vehicles Insurance (PNG) Trust v. James Pupune [1993] PNGLR 370 at pp. 373 –374. These judgements re-affirmed what was always the position at common law and consistently applied in a large number of cases in our country. The list of such cases is long but reference need only be made to cases like that of Repas Waima v. Motor Vehicles Insurance Trust [1992] PNGLR 254 and Carmelita Mary collins v. Motor Vehicles (PNG) Insurance Trust [1990] PNGLR 580 at p. 582 for examples only.
	This position follows on from the objects behind the requirements for pleadings. As the judgement in Motor Vehicles Insurance (PNG) Trust v. James Pupune (supra) at p. 374 said in summary, pleadings and particulars have the object or functions of:
	"1. 	they furnish a statement of the case sufficiently clear to allow the 	other party a fair opportunity to meet it;
2.	they define the issues for decision in the litigation and, thereby, enable the relevance and admissibility of evidence to be determined at the trial; and
3.	they give a defendant an understanding of a plaintiff's claim in aid of the defendant's right to make a payment into court. See Dare v. Pulham [1982] HCA 70; (1982) 148 CLR 658 at 664."
	It is clear law that, where a plaintiff’s claim is special in nature, such as a claim for loss of salaries or wages, they must be specifically pleaded with particulars. Unless that is done, no evidence of matters not pleaded can be allowed and relief granted. That is apparent from the judgements in the James Pupune and John Etape cases. These cases adopted and applied principles enunciated in those terms in authorities such as Ilkiw v. Samuel [1963] 2 All ER 879, per Diplock L J at pp. 980-891 and Pilato v. Metropolitan Water Sewerage and Drainage Board (1959) 76 WN (NSW) 364, per McClemens J at 365. This follows in turn from the fact that, our system of justice is not one of surprises but one of fair play. Reasonable opportunity must be given to each other by the parties to an action to ascertain fully the nature of the other’s case so that, if need be, a defendant can make a payment into Court.”
39. 	Apart from lack of pleadings, I note there is no evidence supporting the claim for defamation. In my view the Defendants have not in any way published any defamatory matter. It appears to me it is the Plaintiff who publicised the circumstances of his resignation.  For these reasons this claim is dismissed for lack of pleadings and evidence.
40.     The third claim is for breach of constitutional provision of section 39 of the Constitution on the basis that the decision made by the Defendant was harsh and oppressive and is not reasonably justifiable in a democratic society of Papua New Guinea. I agree with submissions by Mr Aku, counsel for the Defendant, that Section 39 does not create a primary right enforceable under section 57 of the Constitution. The Defendant’s decision relates to the Plaintiff’s employment which is his primary right and the Court has dealt with the issues raised in these proceedings. For these reasons, I decline to consider the claim and refuse same.
41.   In conclusion, even though I found the Plaintiff’s forced resignation amounted to unlawful termination of employment, the Plaintiff’s claim for damages has not been made out according to law. Accordingly, I would dismiss the proceedings.
 Cost
42.    The Plaintiff asks for costs of the proceedings. The defendant submits that costs be awarded to the Defendant on solicitor – client basis. The Defendant submits that the Plaintiff knowingly instituted and maintained proceedings which was frivolous and vexatious from the very beginning. Generally, cost would follow the event. That is, the successful party in a contested proceeding is entitled to costs. However, in my view it remains a matter of discretion. The Plaintiff in the present case successfully raised an important legal issue on forced resignation or constructive dismissal. Even though he is not awarded any damages, he was successful in establishing liability. For these reasons, I will order that the parties bear their own costs.
Orders
43. The Court orders that:
1.	 The Plaintiffs proceedings be dismissed.
2.	 The Parties bear their own costs of the proceedings
3.	 Time be abridged
________________________________________________________________
Berem Lawyers:	Lawyer for the Plaintiff
Manase & Co. Lawyers:	Lawyer for the Defendant