N10098

PAPUA NEW GUINEA
[IN NATIONAL COURT OF JUSTICE]

WS NO. 382 OF 2013

BETWEEN:
PONDROS BERNARD
Plaintiff

AND
URANIA SAMALI
First Defendant

AND
TELIKOM PNG LIMITED
Second Defendant

			  		Lae: Dowa J
 2022: 11th October
2023: 12th January 
EMPLOYMENT LAW - simple employment contract governed by Employment Act- principles applicable in termination of simple contract of employment-Where the contract of employment is terminated based on a set disciplinary procedure, the employer is obliged to follow that procedure-employer failed to follow the disciplinary procedure-termination unlawful.
DAMAGES - limited to reasonable period for carrying out the disciplinary process and for outstanding entitlements -judgment for plaintiff.
 
Cases Cited
Enaia Lanyat v State (1996) N1481
Jonathan Mangope Paraia v The State (1995) N1343 
John Murua v Ramu Nico Management (MCC) Ltd (2013) N5092   
Porgera Joint Venture -v- Robin Kami (2010) SC1060
Obed Lalip v Fred Sekiot and The State (1996) N1457 
Peter Wanis v Fred Sikiot and The State (1995) N1350
Ruhuwamo v PNG Ports Corporation (2019) N8021
Yooken Paklin v The State (2001) N2212
Samot v Yame (2020) N8266
 
Counsel:
Mr Berem, for the Plaintiff
No Appearance, for Defendant

JUDGMENT

12th January, 2023
            
1.	DOWA J.  The Plaintiff is seeking damages against the Defendants for unlawful termination of employment.

Background Facts

2.	The Plaintiff commenced employment with Telikom (PNG) Ltd’s predecessor, PTC, as linesman in 1993.  He was promoted and by June 2008, he was employed as service officer in the Works section under a contract of employment signed on 7th April 2008.  Apart from the basic terms of employment in the letter of engagement, the Second Defendant’s various approved disciplinary policies, guidelines, and procedures such as a) 2004 Enterprise Agreement entered between the Second Defendant and the PNG Communications Union (“2004 EA”) and b) 1997 Disciplinary and Grievance Procedures Policy derived from the Human Resources Procedure and Policy Manual (“1997 DGPP”), were adopted and formed part of the employment terms.  On 5th June 2008, the Plaintiff was summarily dismissed for allegedly stealing telephone cables belonging to the Second Defendant, thereby breaching terms of employment under the 2004 Enterprises Agreement and the 1997 Disciplinary and Grievance Procedures Policy.  The Plaintiff was not paid any final entitlements.

        The Proceedings

3.	The Plaintiff alleges that the termination was unlawful in that: a) the allegations of theft were not true and b) the second defendant did not follow the mandatory disciplinary procedures under the Enterprise Agreement 2004 and the 1997 Disciplinary Grievance and Procedures Policy and c) the Plaintiff was not paid his final entitlements for the 15 years’ service.

4. 	The defendants filed a Defence denying the allegations and pleaded that the Second Defendant was justified in terminating the Plaintiff’s employment for good cause.

        The Trial

5.    	The matter was heard on 11th October 2021 ex parte.  Mr Berem appeared for the Plaintiff.  There was no appearance on behalf of the Defendants.  The Court was satisfied that the Defendants were aware of the hearing date but did not turn up.  The matter was previously fixed for trial on 4th August 2021.  It was vacated by consent of counsel for the parties.  Mr. Apis, employed lawyer for the second defendant, appeared as counsel for the Defendants.  The matter was then specifically fixed for 11th October 2021.  Mr. Apis was again reminded by Berem lawyers, emailing a notice of trial on 11th August 2021.  Mr. Apis responded to Mr. Berem’s email on 4th October 2021.  Although being aware of the trial date, the defendants did not appear.  The Court allowed counsel for Plaintiff to proceed exparte.

The Plaintiff’s Evidence

6. 	The Plaintiff gave evidence both orally and by affidavit, sworn 12th and filed 14th May 2021 (Exhibit P1).  

7.	This is the summary of the Plaintiff’s evidence.  He commenced employment with the Second Defendant as linesman in February 1993.  From 2003 to 8th May 2006, he worked at the Construction Section as Senior Linesman and Team leader.  From 9th May 2006 to 11th June 2008, he was employed as Service Officer – Works Section under a contract of employment dated 9th May 2006.  On 18th June 2008, he received notice of termination, summarily dismissing him from employment to take effect from 11th June 2008.  The reasons cited in the Notice of termination are that he stole telephone cables belonging to the Second defendant, burning them to extract copper wirings and reselling them for personal benefit, thereby breaching clauses 7.1(g) & (h) of the Enterprise Agreement 2004 and Clause 2.18.3 & 8 of the 1997 Disciplinary and Grievance Procedures Policy.

8. 	Mr Bernard denies the allegations and says that on the relevant date, that is, 18th December 2007, he attended to cable vandalism by criminals at Omili, Lae, of Morobe Province.  After attending to the rehabilitation of the cable vandalism, he went home which was nearby to have lunch.  His other colleague Ludwic Moi came along with him.  While the Plaintiff was having his lunch, Ludwic Moi burnt off-cut joints of cables that were collected at the vandalism site.  The Defendant’s senior officers attended the Plaintiff’s home soon thereafter and saw the fireplace with the offcut cables burning, took pictures and left.  During the trial, the Plaintiff was asked to clarify what he meant by “off-cut joints and cables” to which he replied that these offcut joints and cables were just like rubbish that would be disposed and are of no use at all.  During the interview on 28th December 2007, the Plaintiff was threatened by the Interviewing Officer, David Kowo, to admit the allegations levelled against him.  He maintained his innocence despite the threats and intimidation.

9.	Mr Bernard deposes further that his termination was unlawful because it was in breach of clauses 7.4(d), 8, 9(b) and 8.9 (b) of the Enterprises Agreement 2004, and clauses 2.5-2.10 of the 1997 DGPP, which requires 15 working days to be given to him to respond to the allegations in writing and to justify why he should not be charged or terminated on the alleged disciplinary offences.  Finally, Mr Bernard deposes that although the defendants calculated his final pay but failed to inform him of the amount and proceeded to wrongfully deduct K17,939.38 in payment of alleged telephone bills and housing loans leaving nil balance to be remitted to him.

        The defendants’ Response

10.   The defendants did not appear in Court and offered no evidence in support of their defence.  

Consideration of the issues

11. 	The Notice of Termination of employment dated 5th June 2008 states the Plaintiff was terminated for breaching clause 7.1.1 (g) and (h) of the Enterprise Agreement 2004 and clauses 2.18.3 and 8 of the 1997 Disciplinary and Grievances Procedure Policy.

 12.	The relevant clauses cited for breach are set out below which read:
7.1.1(a)	“Diligently, faithfully, and to the best of the employee’s abilities at all times devote the whole of his/her time carrying out their duties”.
 7.1.1(h)	“Not cause or permit unlawful destruction or damage or unauthorized or fraudulent use of any asset, property or equipment belonging to the Company or rented by the Company.”
Clause 2.18.3	“Willful and unlawful use or damage to property(ies) without authority or with authority but deviation from authorized purpose with amounts to expenses or costs of more than two Hundred Kina (K200.00).”
Clause 2.18.8	“Willfully or intentionally uses Telikom’s resource for personal benefits by virtue of a privilege position or authority which amounts in monetary value to more than one hundred kina (K100.00)”.

13.	Mr Berem submits that the allegations against the Plaintiff were not that serious warranting summary dismissal under Clauses 2.18.3 and 2.18.8 of the 1997 DGPP. Rather it was a case where the disciplinary process provided for under 2004 EA and 1997 DGPP should have been followed.  The Defendants failed to follow the mandatory disciplinary procedure policy under clauses 2.5 to 2.10 of the 1997 DGPP and therefore the termination of employment was unlawful.

14. 	The primary facts relied on by the second defendant constituting the allegations of stealing cables, burning them for the extraction of copper wirings for personal benefit were denied by the Plaintiff.  The Plaintiff gave evidence that it was another person by the name of Ludwic Moi who burnt the off cuts, which were of no further use.  The Defendants called no evidence to refute or discredit the evidence of the Plaintiff.  I note the Plaintiff was previously interviewed on 27th December 2007 in respect of the allegations to which the Plaintiff denied. The answers given in that interview are consistent with the evidence given in the current proceedings. The Plaintiff’s evidence therefore remains unchallenged.  

15. 	The allegations and breaches of the Second Defendant’s Disciplinary and Grievances Procedure Policy (DGPP) relied on and cited by the Second Defendant in the Notice of Termination are for serious conduct.  They are however not supported by evidence by the Defendants, warranting a summary dismissal. 

16.	In my view, the defendants should have followed the extensive disciplinary process set out in clauses 2.5 to 2.10 of the 1997 DGPP. The process is summarized in the Plaintiff’s submissions which the Court adopts, and they are:

i.	the employee to be given 15 days by line management to justify why he should not be charged or terminated.

ii.	the executive/regional manager upon receipt of employee’s statement engage internal investigation branch to undertake investigations including suspending employee with or without pay if allegations are serious.

iii.	the employee is suspended based on recommendation from legal team or head of human resources.

iv.	the investigations are carried out whilst employee is under suspension.

v.	upon receipt of investigation report, the human resource head and legal team assesses the findings whilst ensuring impartiality, consistency, and fairness.

vi.	after satisfied with the investigation findings, and in consultation with the Managing Director, appropriate penalties are determined.
 
17.	I find the Defendants did not follow the above disciplinary process.  The Plaintiff is a member of the Communication Workers Union. Under clause 8.9 b of the 2004 Enterprise Agreement, the Plaintiff should have been given 15 days to seek advice and assistance from the Union Executive.  He was not given that opportunity too.

18.	It has been held in the case Porgera Joint Venture -v- Robin Kami (2010) SC1060, (and other cases) that where the parties to a contract of employment adopts a disciplinary procedure in a contract of employment, the employer is under an obligation to follow the disciplinary process before he exercises his discretion to terminate the contract. At paragraph 26 of the judgment, Injia CJ (as he then was) said:

“26…. In a case where the employer in the exercise of its right to terminate the contract chooses to terminate for cause, and there is a disciplinary procedure that the parties have adopted in the Contract, the employer is under an obligation to follow the disciplinary process agreed to under the contract. If the employer is found to have not followed the proper procedure the termination is wrongful and the employee is entitled to damages…”

19.	In the present case, I find the termination of the Plaintiff’s contract of employment unlawful for two reasons.  First, the principal cause or reason for termination was denied by the Plaintiff.  It was incumbent on the Defendants to bring in evidence to show cause or justify why the second Defendant had good reason for the termination.  Secondly, the Second Defendant did not follow the exhaustive disciplinary process under the 2004 EA and the 1997 DGPP.

20.  For the foregoing reasons, I am satisfied that the Plaintiff has established liability against the defendants on the balance of probabilities. 

Damages for Wrongful Dismissal

21.	Whilst the issue of liability is settled, the Plaintiff is still required to prove its damages with credible evidence.  Ref:  Yooken Paklin v The State (2001) N2212, Peter Wanis v Fred Sikiot and The State ( 1995) N1350, Enaia Lanyat v State (1996) N1481; Obed Lalip v Fred Sekiot and The State (1996) N1457; Jonathan Mangope Paraia v The State (1995) N1343, and Samot v Yame (2020) N8266.

  22.   What is the law on damages for unlawful termination of employment. In Porgera Joint Venture -v- Robin Kami (supra) Injia CJ, (as he then was) said this at paragraphs 25- 26 of the judgment:

“25. I consider that in a private employment situation where an employee is employed under a written contract of employment for a fixed term and which contains a termination clause for termination with or without notice by either party, with or without reason, the measure of damages which the employee is entitled to receive is based on the salary and other entitlements that the employee would have received if the contract had been lawfully terminated. In a case where it is an express or implied term of the contract that termination of the employment contract for cause would be effected upon compliance with disciplinary procedures, the measure of damages is assessed on a reasonable period within which the disciplinary proceedings would be commenced and concluded. The likely outcome of the disciplinary proceeding is immaterial or is an irrelevant consideration” (underlining mine)

26…. But damages will not be for the balance of the contract unless the parties agree to such a term under the contract. Instead, damages is for the reasonable period during which proper disciplinary process would have been initiated and concluded in accordance with any time lines prescribed for various steps in the disciplinary procedure to be concluded. For a start, it would very much depend on the steps in the procedures set out in the disciplinary process and the time limit, if any, prescribed for various procedural steps where they are no time limits prescribed, it would come down to assessing what would be as reasonable time frame to cover the main steps in the process – formulating and presenting complaint, opportunity to reply and a decision made and communicated to the employee and any provisions for appeal or review from that decision by a higher management body or person. It is not a matter for the Court to analyze and speculate on the employee’s chances of success if the process was completed.

23.	 In Ruhuwamo v PNG Ports Corporation (2019) N8021, Thompson J said this at paragraph 17-19 of her Judgement:

“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, wilfully 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.”

24. 	In John Murua v Ramu Nico Management (MCC) Ltd (2013) N5092   Cannings J, stated that: “There is no binding principle of law that in assessing damages, the National Court is obliged to award nothing more than the amount of salary that would have been paid to the employee during the notice period.” His Honour proceeded to award general damages assessed at a week’s salary in that case.

25. 	I will apply the above principles of law in the present case.

Appropriate Amount for damages

26.	What is the appropriate amount for damages is the Plaintiff entitled to? The Plaintiff seeks damages under the following heads of damages:

a.	Long service leave entitlements 
b.	Annual leave credits/entitlement
c.	Money in lieu of Notice
d.	Reimbursement of K 17, 939.38 wrongfully deducted
e.	General damages for wrongful termination
f.	Interest
g.	Costs 

Entitlements

27.	The claims (a) and (b) are for leave entitlements. The plaintiff is entitled to them and should be calculated and paid to him. I note the Plaintiff has completed 15 years of service. If he has not taken his furlough leave, he is entitled to be paid as well.

Monies in Lieu of Notice

28.	The plaintiff is claiming monies in lieu of notice. The plaintiff has served the second defendant for more than five (5) years. He is entitled to four weeks wages in lieu of notice period under section 35 of the Employment Act which sets the minimum notice period. 

General damages

29.	Mr. Berem submits for an award of K 20,000 under this head of damages. General damages are for pain, suffering humiliation, distress, and inconvenience. The plaintiff testified of the pain, suffering and frustration caused to him and his family who depend on his income. General damages are not readily awarded in unlawful termination of employment cases and any departure should be restricted to exceptional cases where the facts warrant such an award. In the present case, I will follow the reasonings in the cases Porgera Joint Venture v Kami and Murua v Ramu Nico and award a reasonable sum for damages for the time it would have taken to complete the disciplinary process. In my view if the employer followed due process according to the procedures set in place it would have commenced and completed it in two months. I would make an award of damages for two months for an amount to be calculated from his based salary.  Based on his annual salary of K 27,615.00, the most appropriate sum would be K 5,000.00 and I would make an award of K5,000.00 in general damages.

Reimbursement of K 17, 939.38 wrongfully deducted

30.	The plaintiff was not paid his entitlements. He was informed that his entitlements were calculated, and a sum of K 17,939.38 was deducted for outstanding telephone bills and other debts. He was not shown the calculation sheet and was not paid anything. In my view that is a harsh treatment for an officer who served the second defendant for more than 15 years. The Plaintiff denies owing the second defendant for the monies deducted and submits that the monies be reimbursed. Since the defendants have given no evidence justifying the deductions, the Plaintiff is entitled to reimbursement of the- monies deducted.

Interest

31.	The Plaintiff claims interest at 8%. As the figures for the entitlement are not readily available, I will allow interest for the general damages only. Interest at 8% on K 5,000.00 from 3rd May 2013 to 12th January 2023 (3539 days) is K 3,878.36. I will also make an order for an award of interest at 4 % on the entitlements. After calculation and ascertainment of the final figure, the second defendant shall add 4% interest. The 4% interest shall be for the period to commence from date of court proceedings (3/5/2013) to date of judgment (12/01/2023) a total of 3539 days.

Cost

32.	The Plaintiff claims costs of the proceedings. The Plaintiff is entitled to costs and shall be awarded.

ORDERS

33.      The Court orders that:

1.	 The Plaintiffs termination of employment contained in the Notice of Termination dated 5th June 2008 by the defendants is declared unlawful.

2.	Judgment for general damages is entered for the Plaintiff in the sum of K 8,878.36 inclusive of interest.

3.	The second defendant shall within 30 days from the date of this order calculate and pay the Plaintiff’s termination entitlements including long service leave entitlements, annual leave entitlement, monies in lieu of notice without any deduction with 4% interest to be calculated in terms of paragraph 31 of the judgment.

4.	The defendants shall pay the Plaintiff’s cost of the proceedings to be taxed, if not agreed.

5.	Time be abridged
_________________________________________________________________
Berem Lawyers:      Lawyers for the Plaintiff
E. Aipis (inhouse):   Lawyer for the Defendants