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Seoa v Victor [2024] PGNC 46; N10705 (28 March 2024)

N10705

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO.1432 OF 2018

BETWEEN
AUA SEOA (in his capacity as employee pursuant to s.40.5 of the Enterprise Agreement 2010 and members of the Third Plaintiff Union)
First Plaintiff

AND
NUG MAMTIRIN in his capacity as President of the PNG Communication Workers Union, and signatory of the Enterprise Agreement 2010
Second Plaintiff

AND
PNG COMMUNICATION WORKERS UNION, in its capacity as a party to the Enterprise Agreement 2010
Third Plaintiff

AND
XAVIER VICTOR as ACTING CEO OF TELIKOM (PNG) LIMITED
First Defendant

AND
TELIKOM (PNG) LIMITED
Second Defendant

&

WS NO. 959 OF 2018

BETWEEN
PID WANGAL (in his capacity as employee pursuant to s.40.5 of the Enterprise Agreement 2010 and members of the Third Plaintiff Union)
First Plaintiff

AND
NUG MAMTIRIN in his capacity as President of the PNG Communication Workers Union, and signatory of the Enterprise Agreement 2010
Second Plaintiff

AND
PNG COMMUNICATION WORKERS UNION, in its capacity as a party to the Enterprise Agreement 2010
Third Plaintiff

AND
XAVIER VICTOR as ACTING CEO OF TELIKOM (PNG) LIMITED
First Defendant

AND
TELIKOM (PNG) LIMITED
Second Defendant

&

WS NO. 1238 OF 2018

BETWEEN
BRUCE KUASMAPA (in his capacity as employee pursuant to s.40.5 of the Enterprise Agreement 2010 and members of the Third Plaintiff Union)
First Plaintiff

AND
NUG MAMTIRIN in his capacity as President of the PNG Communication Workers Union, and signatory of the Enterprise Agreement 2010
Second Plaintiff

AND
PNG COMMUNICATION WORKERS UNION, in its capacity as a party to the Enterprise Agreement 2010
Third Plaintiff

AND
XAVIER VICTOR as ACTING CEO OF TELIKOM (PNG) LIMITED
First Defendant

AND
TELIKOM (PNG) LIMITED
Second Defendant

&

WS NO. 988 OF 2018

BETWEEN
DOROTHY ELIAKIM (in her capacity as employee pursuant to s.40.5 of the Enterprise Agreement 2010 and members of the Third Plaintiff Union)
First Plaintiff

AND
NUG MAMTIRIN in his capacity as President of the PNG Communication Workers Union, and signatory of the Enterprise Agreement 2010
Second Plaintiff

AND
PNG COMMUNICATION WORKERS UNION, in its capacity as a party to the Enterprise Agreement 2010
Third Plaintiff

AND
XAVIER VICTOR as ACTING CEO OF TELIKOM (PNG) LIMITED
First Defendant

AND
TELIKOM (PNG) LIMITED
Second Defendant

WS NO. 956 OF 2018

BETWEEN
PETER KHAYA (in his capacity as employee pursuant to s.40.5 of the Enterprise Agreement 2010 and members of the Third Plaintiff Union)
First Plaintiff

AND
NUG MAMTIRIN in his capacity as President of the PNG Communication Workers Union, and signatory of the Enterprise Agreement 2010
Second Plaintiff

AND
PNG COMMUNICATION WORKERS UNION, in its capacity as a party to the Enterprise Agreement 2010
Third Plaintiff

AND
XAVIER VICTOR as ACTING CEO OF TELIKOM (PNG) LIMITED
First Defendant

AND
TELEKOM (PNG) LIMITED
Second Defendant

&

WS NO. 954 OF 2018

BETWEEN
NATHAN AKA (in his capacity as employee pursuant to s.40.5 of the Enterprise Agreement 2010 and members of the Third Plaintiff Union)
First Plaintiff

AND
NUG MAMTIRIN in his capacity as President of the PNG Communication Workers Union, and signatory of the Enterprise Agreement 2010
Second Plaintiff

AND
PNG COMMUNICATION WORKERS UNION, in its capacity as a party to the Enterprise Agreement 2010
Third Plaintiff

AND
XAVIER VICTOR as ACTING CEO OF TELIKOM (PNG) LIMITED
First Defendant

AND
TELEKOM (PNG) LIMITED
Second Defendant

Waigani: Makail, J

2024: 14^th & 28^th March

PRACTICE & PROCEDURE – Application to dismiss proceedings – Grounds of – Failure to disclose reasonable cause of action – Frivolous or vexatious – Abuse of process – National Court Rules – Order 16, rule 40(1)(a)-(c)

CONTRACT LAW – Enterprise agreement – Privity of contract – Capacity of party to sue – Authority of party to sue – Party suing not party to contract – Enforceability of contract

INDUSTRIAL LAW – Enterprise agreement – Features of enterprise agreement discussed – Breach of enterprise agreement – Remedy for breach of enterprise agreement discussed – Referral of disagreement or dispute to Industrial Tribunal – Award – Enforcement of award – Industrial Relations Act – Sections 44 & 49

Cases Cited:
John Manau v. Telikom (PNG) Limited (2011) SC1146
PNG Power Limited v. Ian Augerea (2013) SC1245

Counsel:
Mr J Napu, for Plaintiffs
Mr S Ketan, for Defendants

RULING ON APPLICATION TO DISMISS PROCEEDINGS

28^th March 2024

1. MAKAIL J: This is a joint ruling in relation to the defendants’ notice of motion seeking to have six proceedings dismissed on common grounds pursuant to Order 12, rule 40(1)(a)-(c) of the National Court Rules (“NCR”).

Brief Background Facts

2. In each of the proceedings, the first plaintiff was, until retrenched, an employee of the second defendant. Each plaintiff is also a member of the third plaintiff and the second plaintiff is the president of the third plaintiff.

3. Each of the first plaintiffs was retrenched because the position each held was made redundant by the defendants following an organisational restructure. Consequently, the plaintiffs alleged that the defendants failed to pay all the first plaintiffs dues under an agreement called the “Enterprise Agreement of 2010”.

4. Further, the plaintiffs alleged that the agreement was registered as an award No. 6 of 2010 and published in National Gazette G.328 of 2011.

5. The following facts give rise to the motion to dismiss each of the proceedings:

(a) WS No 1432 of 2018

The first plaintiff held the position of Senior Technical Officer. He was retrenched on 31^st December 2014. On 19^th September 2019, the defendants filed the notice of motion to dismiss the proceeding.

(b) WS No 959 of 2018

The first plaintiff held the position of ID & Access Officer. He was retrenched on 17^th December 2014. On 19^th September 2019, the defendants filed an amended notice of motion to dismiss the proceeding.

(c) WS No 1238 of 2018

The first plaintiff held the position of Manager Power Operations. He was retrenched on 30^th November 2014. On 19^th September 2019, the defendants filed the notice of motion to dismiss the proceeding.

(d) WS No 988 of 2018

The first plaintiff held the position of Team Leader Standards. She was retrenched on 06^th January 2015. On 19^th September 2019, the defendants filed an amended notice of motion to dismiss the proceeding.

(e) WS No 956 of 2018

The first plaintiff held the position of VSAT/Satellite Engineer. He was retrenched on 31^st March 2016. On 19^th September 2019, the defendants filed an amended notice of motion to dismiss the proceeding.

(f) WS No 954 of 2018

The first plaintiff held the position of Senior Engineer Satellite. He was retrenched on 30^th March 2016. On 19^th September 2019, the defendants filed an amended notice of motion to dismiss the proceeding.

Grounds for Dismissal of Proceedings

6. The common grounds for dismissal of these proceedings are:

(a) The first plaintiffs are not parties to the agreement pursuant to doctrine of privity of contract.

(b) The second plaintiff is not a signatory to the agreement. Thus, he was unauthorized to institute the proceedings for himself or on behalf of the first and third plaintiffs.

(c) The second plaintiff is not a serving member or employee of the second defendant. Thus, he lacked the capacity to be president of the third plaintiff.

(d) The third plaintiff lacked the authority to institute the proceedings because the members of the third plaintiff did not pass a resolution to authorise him to do so.

(e) The second plaintiff lacked the authority to institute the proceedings because members of the third plaintiff did not pass a resolution to authorise it to do so.

(f) Multiplicity of proceedings by the plaintiffs

(g) Lack of notice of intention to make a claim against the State pursuant to Section 5 of the Claims By and Against the State Act, 1996 (“CB&AS Act”) (“Section 5 Notice”).

7. According to the defendants, these seven grounds established that each proceeding discloses no reasonable cause of action, is frivolous or vexatious, or an abuse of process pursuant to Order 12, rule 40(1)(a)-(c) of the NCR. Each ground is addressed hereunder:

Privity of Contract

8. The defendants submitted that the first plaintiffs are not parties to the agreement and based on the doctrine of privity of contract, there is no binding contract between them and the first plaintiffs. Given this, the agreement is unenforceable against them.

9. The plaintiffs submitted that while the parties to the agreement are the third plaintiff and second defendant, the first plaintiffs are beneficiaries of the agreement and must surely rely on it to enforce against the defendants where it has been breached.

10. The answer to the competing submissions lies in the construction of the agreement. The starting point is whether the party suing under the agreement is a party to it. If the party is a party to the agreement, it is open to it to sue for breach of agreement where it has been breached. In the present case, the first plaintiffs are not parties to the agreement. The only party to the agreement is the third plaintiff. Under the doctrine of privity of contract, it is not open to the first plaintiffs to rely on it and sue for breach of contract.

11. The second consideration is whether a separate contract of employment between the employer and the employee incorporates the whole or part of the agreement between the employer and the employee to form part of the terms and conditions of the contract of employment. In the present case, there is no evidence from the plaintiffs that each of the first plaintiffs had a separate contract of employment with the second defendant which incorporated the whole or any part of the agreement between the third plaintiff and the second defendant to be or forms part of the terms and conditions of the contract of employment.

12. The third and final consideration is whether there is an expressed term of the agreement between the third plaintiff and the second defendant that its terms and conditions are to be enforceable in a court of law. In the present case the plaintiffs did not point to the relevant clause in the agreement where it is expressed as a term or condition that the agreement shall be enforced in a court of law where it has been breached.

13. None of the three considerations operate in favour of the first plaintiffs. It follows that the agreement is unenforceable against the defendants, and it is not open to the first plaintiffs to sue the defendants for breach of agreement.

Enterprise Agreement

14. Moreover, the third consideration operates against the second and third plaintiffs because even if they are parties to the agreement, there is no expressed clause in the agreement that its terms and conditions are to be enforceable in a court of law. This is a significant consideration because one of the key features of this type of agreement is that it is a “collective” agreement or that it is an agreement by a Union or Association on behalf of a group of employees with their employer: see John Manau v. Telikom (PNG) Limited (2011) SC1146.

15. The other key feature of the agreement is the power of a group of employees to negotiate better terms and conditions of employment through a Union or Association with the employer. A further key feature of the agreement is that where there has been a breach under clause 24.2 of the agreement, the remedy for the breach is determined in accordance with the Industrial Relations Act. This is because the body that is responsible for representing the interest of the aggrieved members is either the Union or Association, a registered body under the Industrial Organisations Act.

16. There is an exclusive and elaborate procedure for resolving any disagreement or disputes between the Union or Association and the employer. The process includes the disagreement or dispute being referred to an Industrial Tribunal for determination and award where negotiated settlement and compulsory conference have failed pursuant to Sections 29 and 32 of the Industrial Relations Act. Moreover, a registered award under Section 44 may be enforced in the National Court if there has been non-compliance by a party under Section 59 of the Industrial Relations Act.

17. Section 44 states:

“ EFFECT OF AWARDS, ETC.

(1) An award or a determination of the Minimum Wages Board is of no force or effect until registered and notified in the National Gazette in accordance with this Act.

(2) Subject to this Act–

(a) a registered award or a registered determination of the Minimum Wages Board is binding on the employers and employees to whom it relates; and

(b) as from the date specified in the award or determination or, if no date is specified, the date of publication of the notice under Section 43 in relation to the award or determination–it is an implied term of the contract between the employers and the employees to whom it relates that the wages to be paid and the conditions of employment to be observed under the contract are in accordance with the award or determination until varied by a subsequent registered award or registered determination.” (Underlining added).
18. Section 59 states:

“ POWERS OF NATIONAL COURT AS TO ENFORCEMENT OF AWARDS, ETC.

(1) The National Court may–

(a) order compliance with an award proved to the satisfaction of the Court to have been broken or not observed; or

(b) prohibit an organization or any other person from committing or continuing a contravention of this Act or a breach or non-observance of an award.

(2) The Attorney-General may, on behalf of the State, and in the public interest, apply to the National Court for an order under Subsection (1), but this subsection does not prejudice any right that any other person has to apply for such an order.

(3) Without prejudice to the operation of any other law providing for their enforcement, the powers of the National Court under Subsection (1) apply also in relation to–

(a) awards, common rules and orders prescribing, directly or indirectly, terms and conditions of employment and made under a law other than this Act; and

(b) provisions in force by virtue of such an award, common rule or order.” (Underlining added).
19. The process as described is prescribed by statute for a collective agreement such as the one under consideration to be adopted by the plaintiffs to resolve any disagreement or dispute under the agreement.

20. In conclusion, even if there is an agreement between the third plaintiff and the second defendant, the plaintiffs have failed to establish that its terms and conditions are enforceable in a court of law, in this instance, the National Court. In addition, while there is a reference to the agreement being made an award and published in the National Gazette, it is clear from the pleadings and evidence that the cause of action is not one of breach of a registered award and the plaintiffs are seeking its enforcement under Section 59 of the Industrial Relations Act. If the plaintiffs had intended so, the pleadings or evidence do not establish this cause of action. As the plaintiffs have failed to establish a binding agreement between the parties, they have failed to establish a reasonable cause of action.

Lack of Authority of Second Plaintiff to Sue

21. The defendants submitted that the second plaintiff lacked the authority to institute these proceedings either in his own capacity or on behalf of the first and third plaintiffs because he is not a signatory to the agreement. However, it is not necessary to consider this ground because the plaintiffs have failed to establish that the agreement is enforceable.

Lack of Capacity of Second Plaintiff as President of Third Plaintiff to Sue

22. The defendants submitted that the second plaintiff is not a serving member or employee of the third plaintiff. Thus, he lacked the capacity to be elected president of the third plaintiff to institute these proceedings either in his own capacity or on behalf of the first and third plaintiffs. While there were submissions made by the plaintiffs in relation to the question of whether a president must be a member or employee of the second defendant to have the capacity to sue, it is not necessary to consider it because the plaintiffs have failed to establish that the agreement is enforceable against the defendants.

Lack of Authority of Third Plaintiff to Sue

23. The defendants submitted that the third plaintiff lacked the authority to institute these proceedings either in its own capacity or on behalf of the first and second plaintiffs because there is no evidence that the members of the third plaintiff resolved to authorise the third plaintiff to institute these proceedings either in its own capacity or on behalf of the first and second plaintiffs. Again, it is not necessary to consider this ground because the plaintiffs have failed to establish that the agreement is enforceable against the defendants.

Lack of Authority of Second Plaintiff to Sue

24. Similar to the ground in relation to the lack of authority of the third plaintiff to institute these proceedings, the defendants submitted that the second plaintiff lacked the authority to institute these proceedings either in his own capacity or on behalf of the first and third plaintiffs because there is no evidence that the members of the third plaintiff resolved to authorise the second plaintiff to institute these proceedings either in his own capacity or on behalf of the first and third plaintiffs. Again, it is not necessary to consider this ground because the plaintiffs have failed to establish that the agreement is enforceable against the defendants.

Multiplicity of Proceedings by Plaintiffs

25. Under this ground, the defendants alleged that the plaintiffs instituted multiple proceedings in the National Court in pursuit of the same relief for outstanding dues under the agreement for the first plaintiffs. The defendants identified these proceedings as follows:

(a) WS (HR) No 12 of 2016

This proceeding was terminated in favour of the defendants. The plaintiffs were part of the plaintiffs in that proceeding.

(b) SCA No 107 of 2023

This was an appeal to the Supreme Court by the plaintiffs.

(c) The current six proceedings by the plaintiffs.

26. However, it is not necessary to consider this ground because the plaintiffs have failed to establish that the agreement is enforceable against the defendants.

Lack of Section 5 Notice

27. The defendants made extensive submissions based on Section 5 of the CB&AS Act and cited case authorities including PNG Power Limited v. Ian Augerea (2013) SC1245 where the Supreme Court observed that in the case of Telikom (PNG) Limited, it is necessary to give Section 5 notice to the State under the CB&AS Act. The defendants submitted that in the present case, these proceedings are incompetent because the plaintiffs failed to give Section 5 notice to the State before instituting these proceedings. However, it is not necessary to consider this ground because the major ground in relation to whether the plaintiffs have a binding and enforceable agreement has not been established.

Conclusion

28. The defendants have successfully established the first ground for dismissal of these proceedings. These proceedings do not disclose a reasonable cause of action, are frivolous and vexatious or an abuse of process under Order 12, rule 40(1)(a) to (c) of the NCR. It follows that the six proceedings are dismissed with costs, to be taxed, if not agreed.

Order

29. The final terms of the order of the Court are:

1. In each proceeding, the notice of motion is upheld.

2. Each proceeding is dismissed for disclosing no reasonable cause of action, being frivolous or vexatious, or an abuse of process pursuant to Order 12, rule 40(1)(a) to (c) of the National Court Rules.
   
3. In each proceeding, the plaintiffs shall pay the defendants’ costs of and incidental to the notice of motion, to be taxed, if not agreed.
   
4. The time for entry of these orders shall be abridged by the Registrar to the date of settlement, which shall take place, forthwith.
   

________________________________________________________________
Napu & Company Lawyers: Lawyers for Plaintiffs
Ketan Lawyers: Lawyers for Defendants