N11330
PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

WS 1570 OF 2015

BETWEEN:
AVOSA OERI
Plaintiff

AND:
PNG PORTS CORPORATION LTD
First Defendant

AND:
STANLEY ALPHONES sued in his capacity as the Chief Executive Officer of PNG PORTS CORPORATION LTD
Second Defendant

AND:
BRIAN RICHES sued in his capacity as the former Chief Executive Officer of PNG PORTS CORPORATION LTD
Third Defendant

WAIGANI:   BRE AJ
20 DECEMBER 2024; 21 MARCH, 10 JUNE 2025

EMPLOYMENT LAW – written contract of employment – termination for conduct under previous written employment contract – whether internal memo issued as part of investigation process is sufficient notice of charge – role of court in unlawful dismissal of employment cases considered - disciplinary provisions of contract not followed – dismissal wrong – defendant liable.

Cases cited
Porgera Joint Venture Manager Placer (PNG) Ltd v Robin Kami [2010] SC1060
Tau Gulu v PNGDFSL [1995] N1399
Vagi v NCDC [2002] N2280
William Maninga v Ramu Sugar Limited [2010] N4118

Writ of Summons
The plaintiff sought to establish liability against the defendant for unlawful dismissal of his employment.

Counsel
Mr Anis for the plaintiff
Mr K Barrion for the defendant

JUDGMENT 

1.     BRE AJ: Mr Avosa Oeri claims that he was unlawfully dismissed from employment on 10 December 2009 by his employer, PNG Ports Corporation Ltd.
Mr Oeri asserts that the defendant wrongly dismissed him for an offence that he was alleged to have committed in his previous role as general manager finance and administration by wrongly relying on his new employment contract where he had separate and distinct responsibilities to that of his previous role. 

That even so, the defendant did not comply with fairness requirements of the new contract to afford him the opportunity to respond to the investigation findings which it relied on to terminate his employment without notice.

2.	PNG Ports Corporation denied the plaintiff's claim contending that it had complied with the provisions of the plaintiff's contract and had terminated his employment for cause.

That the plaintiff was given an opportunity to respond to serious allegations conveyed by its internal auditor concerning his conduct as the former general manager of finance and administration. That his employment was terminated for cause without notice consistent with clause 11 of the employment contract. 

3.	At the trial, the plaintiff was cross-examined and the defendant's Human Resources Manager, Mr Rex Kini was also cross-examined. Both their affidavit were tendered into evidence and accepted.
 
FINDINGS OF FACT

4.	The factual matters concerning the employment of the plaintiff are not contested. What is contested is the manner of the dismissal. 
After perusing the evidence of both parties and the accompanying documentary evidence, I make the following findings of fact:  
(1)	 The plaintiff was employed as general manager finance and administration by a three-year written contract from 2 February 2006 to 2 February 2009.
(2)	 After the general manager finance and administration contract expired, the plaintiff continued employment with the defendant on a new short term 12-month contract with new responsibilities as project coordinator scanport feasibility project. The contract was from 15 June 2009 to 14 June 2010.
(3)	 The plaintiff was terminated about five months into the project co-ordinator contract.
(4)	At the time of his termination, the plaintiff was employed with the defendant for about 15 years.
(5)	The assistant manager internal audit sent a memorandum dated 20 August 2009 requiring the plaintiff to respond to queries relating to an ongoing investigation into the sale of the defendant's Boroko property and the purchase of a new property at Gerehu; when he was the general manager finance and chairman of the defendant's supply and tenders committee in 2007.
(6)	 The plaintiff responded to the queries within about two weeks by 1 September 2009.
(7)	By letter dated 10 December 2009 to the plaintiff, the chief executive officer Mr Brian Riches, relied on findings of the internal audit investigations and concluded that the plaintiff acted inappropriately in discharging his duties as the general manager finance and chairman of the supply and tenders committee in 2007 and terminated his employment
(8)	The termination letter of 10 December 2009 did not cite any provisions of the contract nor any internal staff disciplinary rules. 
(9)	There are differences in the disciplinary provisions of the general manager contract compared to the project co-ordinator contract. The general manager contract had a detailed provision in clause 24 on discipline compared to clause 10 of the project co-ordinator contract. 
(10)	The job responsibilities of general manager finance are different to those of the contract for project co-ordinator.

5.	The critical documentary evidence are the relevant contract clauses of the projects contract, the internal audit memorandum and the termination letter which are reproduced below:

A)  Relevant clauses of the project co-ordinator contract of employment:

“10. Suspension 
10.1	Should the PNG Ports Corporation Ltd believe the Employee to have engaged in a breach of their obligations, the Chief Executive Officer or his/her delegated representative at his or her discretion may suspend the Employee from their duty either with or without pay, while an investigation is conducted. The employee shall receive notice in writing which provides details of the offence allegedly committed and enable the employees to reply to such charges.
	
10.2	Following an investigation the Chief Executive Officer or his/her delegated representative shall determine whether or not the employment contract should be terminated. Termination in this instance would be deemed as termination without notice as detailed in Clause 11.2 and 11.6

11. Termination
11.1	Either party may terminate this Employment Contract by giving six month’s notice in writing to the other party.

11.2	PNG Ports Corporation Ltd.(sic) May terminate the Employee’s employment contract without notice if:
a)	the Employee commits a breach of the Employee’s obligations under the Contract;
b)	there is sufficient grounds to suspect that the Employee attended work with impaired capabilities and judgment following the consumption of alcohol or non prescription drugs;
c)	the Employee solicits or accepts a fee or gift in connection with the discharge of official duties or otherwise;
d)	the Employee is guilty of any improper conduct in the discharge of official duties or otherwise;
e)	the Employee is continually absent from work without proper authority or good reason;
f)	the Employee is convicted of a criminal offence;
g)	or of any other circumstances having a detrimental impact on the achievement of PNG Ports Corporation Ltd Company objectives, deemed by the Chief Executive Officer or his/her delegated representative to warrant termination of the Employment Contract.

11.3 	Only the Chief Executive Officer or his/her delegated representative has the authority to terminate this Employment Contract.

11.4	Any decision made by the Chief Executive Officer or his/her delegated representative to terminate this Employment Contract is final.

11.5	If terminated the employee may seek redress through the Papua New Guinea Courts of Law in the event that Employee considers the termination to have been made in breach of this Employment Contract”

B)  Memorandum from Assistant Internal Audit Manager:

“MEMORANDUM

Date:		20th August 2009

To: 		Avosa Oeri – Manager Projects

Cc:		 Jerome Pienasi – HRD Manager
Max Suwary – Chief Finance Officer
John Chris Dotson – Internal Audit Consultant
Brian Riches – CEO

From: 		Allan Kamale – Assistant Internal Audit Manager

Our Ref: 	BAD: A1-043-09
	___________________________________________________________

SUBJECT:	 Purchase of Gerehu Property (Section 270 Allotment 30 Hohola)

Dear Avosa,

The purpose of this memo is to advise you of the ongoing investigation by Business Assurance Department into the sale of the Boroko property at Allotment 3 Section 110 and the purchase of the Gerehu Property at Section 270 Allotment 30 and to present to your office certain audit queries relating to the subject matter.

Please peruse and provide to Internal Audit any your (sic) written responses to the audit queries and any other information/documentation relating to these transactions that you have or are aware of.

Your earliest response to these audit queries would be much appreciated.

Best Regards,
	(Signed)
	Business Assurance Department 

The Queries requiring the plaintiff's responses were listed and attached to the memo. 

C)  Letter of Termination:

“Date: 10th December 2009

Mr. Avosa Oeri
PNG Ports Corporation Limited
P O Box 671
PORT MORESBY

Dear Mr Oeri

		TERMNINATION OF EMPLOYMENT CONTRACT

PNG Ports Corporation Limited has undertaken investigations following allegations of misconduct in office in your capacity as then General Manager Finance and Chairman of Boroko and Gerehu residential properties respective in 2007.

You have been formally requested in writing to reply to certain audits queries that were addressed to yourself.

As part of the investigations into the simultaneous property conveyance transaction for the Boroko and Gerehu residential properties in 2007 your reply to the investigation queries have been reviewed and aligned with other audit evidence collated.

The Investigations concluded that you acted inappropriately in:

•	Facilitating and participating in a property conveyance transaction resulting in a cost outlay of K470,000.00 without duly executed contractual documents including a Contract of Sale/Purchase and Settlement Statement.
•	Failing to exercise due care and responsibility over the two significant property conveyance matters as the Chairman of the Tender Committee you did not question the two conveyance matters (property sale and purchase) that were mooted by then Property Manager and elevated to your attention to sign as the GM Finance at that time.
•	Failing to exercise due diligence over these two significant property conveyance matters that involved significant financial, legal and reputational exposures to PNG PCL.
•	Failing to ensure that the assets were properly classified and recorded in the books.

Given the foregoing, the management has decided to terminate your employment contract effective immediately.

By copy of this letter, payroll will process your final entitlements less any money owing and send to the Acting Human Resource Manager for collection. Your final entitlements will comprise of the following:

•	Accrued money in lieu of leave (MILOL) up to 10 December 2009;
•	Accrued money in lieu of furlough (MILOF) up to 10 December 2009;
•	Contract Gratuity up to 10 December 2009;

Acting Human Resource Manager will ensure that clearance including surrender of any company property in your possession is facilitated. Upon completion of the clearance formalities, your final entitlements will be released. Meanwhile, please liaise with Employee Services Coordinator to complete the (NSL) Separation Authority Form for payment of your superannuation savings.

On behalf of the Management, I thank you for the services you rendered during your employment with PNG Ports.”

	Yours Sincerely,
	PNG PORTS CORPORATION LTD,
	
	(Signed)
	Brian Riches
	
	cc; General Manager – Corporate Services
	      Business Assurance Consultant”

ISSUE

6.	The primary issue for my deliberation concerns whether the plaintiff's dismissal from employment was wrong?

THE LAW

7.	The role of the Court in deciding wrongful dismissal cases has been clarified in a number of caselaw which are cited herein.

It has been clarified in William Maninga v Ramu Sugar Limited [2010] N4118  that the Court's role is  not to determine whether the employer had good reasons to dismiss the employment but rather, to examine the process applied to dismiss the employment and, where the employment is governed by an employment contract; to consider whether the dismissal is consistent with the terms of the employment contract.

His honour Cannings J amply explained the role of the Court in William Maninga v Ramu Sugar Limited at [13] as follows:

" ...It is not the role of the National Court to sit as an appellate tribunal and rehear the competing evidence and views on the question of whether the employee should have been dismissed. The court is only permitted to inquire into the circumstances of dismissal for the purpose of determining whether the employer breached the contract of employment."

8.	Further, the Supreme Court expounded the general position of the law on termination of written employment contracts in Porgera Joint Venture Manager Placer (PNG) Ltd v Robin Kami [2010] SC1060 at [26] to uphold the disciplinary process accepted by both the employer and employee in the employment contract by stating:
  
"...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..."

9.	On the evidence relied on by the decision maker to discipline an employee; the Court explained in Tau Gulu v PNG Defence Force Savings and Loan Society Ltd [1995] N1399 that the Court is to decide whether the evidence constituted or sustained the offence, not to substitute its own views for the evidence of the breach. 

10.	In applying these considerations to the facts of the case, it is clear that my role is to consider, whether the terms of the contract have been complied with when terminating the plaintiff’s contract. If not, the termination would be wrong. 
It is not to inquire into the merits of the case but to decide if the provisions of the contract have been complied with and where I am to consider the evidence it is to decide if the evidence was sufficient to sustain the disciplinary charge; not to decide if the employer had a right to terminate. The employer always retains the common law right to terminate but, must observe the terms of the contract that it has adopted with its employee when exercising its right to discipline and terminate the employment of its staff.

APPLICATION OF THE LAW TO THE FACTS

11.	Here, the plaintiff was terminated while he was employed on a written contract as the project co-ordinator scanport feasibility project. The terms of that contract guide my decision. 

In Vagi v NCDC [2002] N2280 the Court held the terms of a written employment contract speaks for itself. 

12.	Clause 10 of the project co-ordinator contract provides a three-stage decision making process where the Chief Executive Officer (CEO) or delegate forms the view that the plaintiff has breached his employment obligations and has committed a disciplinary offence. These processes require the CEO or delegate to:
1)  consider whether to suspend the plaintiff, with or without pay, while an investigation is conducted; 
2)  issue a written notice containing allegations of the disciplinary offence to the plaintiff and require him to respond to the allegations; and  
3) after receiving the plaintiff's response, decide whether to terminate 	the 	employment or not. 

Where the decision is made to terminate the employment, the termination 	will be without notice pursuant to clause 11.

13.	Clauses 10 and 11 must be applied together to lawfully terminate the plaintiff's employment. 

14.	The internal audit memorandum of 20 August 2009 ('the memo') is the main point of contention amongst the parties on whether it constituted sufficient notice of charges that the plaintiff was accused of committing. The defendants submitted that it did, as the memo sets out the nature of the allegations and required the plaintiff's responses, and that he ought to have known when he received the memo that he was being accused of committing a serious offence committed in his prior role.

15.	I have examined the terms of the memo and am of the view that the internal audit memorandum of 20 August 2009 is not a notice containing written allegations put to the plaintiff as required by clause 10.1 of the contract. Clause 10.1 requires a disciplinary charge. A charge in this context is a formal accusation about employment conditions alleged to be breached which would demand the plaintiff’s response or that he suffers the consequences, where he does not respond within the required time.

16.	The contents of the memorandum show that the internal auditor is 'advising' the plaintiff about the reasons why his responses are required and politely asking for his responses, it even ends with 'best regards'. The attachment to the memo contains a list of questions and requires the plaintiff’s responses. There is no accusation.

In my view, clause 10.1 requires a notice of charge containing the allegations of the plaintiff breaching his performance obligations and demanding his response to the allegations. Clause 10.1 uses the words 'breach' and 'offence' which point to accusations of disciplinary offences alleged to be committed for any or all of the offences listed in clause 11.2 of the contract for which a response is to be demanded.

The internal audit memorandum of 20 August 2009 is clearly not a disciplinary charge. The internal audit memo seeks written responses to queries raised as part of ongoing investigations.

Clearly, the plaintiff's responses were required as part of the investigation process which I infer to mean that the investigation was not concluded at the time the plaintiff's responses were required by the assistant manager for internal audit.

I therefore accept the plaintiff's evidence that he did not view the internal audit memorandum as a disciplinary charge against him. I find that no disciplinary charges as required by step two of the disciplinary process in Clause 10.1 were issued to the plaintiff, before his employment was terminated.

17.	Further, the principles of natural justice require those conducting administrative proceedings such as the discipline of an employee pursuant to a written contract; to observe the minimum requirements of natural justice, which are the "duty to act fairly and, in principle, be seen to act fairly." See Section 59 of the Constitution.

The chief executive officer mentions investigation findings in the termination letter to the plaintiff as the reason for his decision to terminate employment. Those findings would have arisen from completed investigations.  The findings of the completed investigation were not put to the plaintiff in a charge notice; instead, the CEO conveyed his final decision to the plaintiff in a termination letter; without first according to the plaintiff, the benefit of responding to those completed findings.

I am satisfied that the principle of natural justice imposing the duty to act fairly was breached by the CEO.

18.	Additionally, I note that the termination letter of 10 December 2009, is defective in form, as the chief executive officer did not terminate, on his own authority as granted in clause 11.3 but, relied on the ‘management’s’ decision to terminate the plaintiff’s employment.  

19.	Mr Anis raised another issue challenging the authority of the defendant to dismiss the then current employment as project coordinator for breaches of past performance as general manager finance whose contract had expired. The defendant's counsel countered that argument, by relying on clause 11.2(g) of the project co-ordinator contract to validate its actions. 

Clause 11.2(g) is a broad clause that applies to 'any other circumstances having a detrimental impact' that can arguably validate the defendant's dismissal for the past role. However, I am not persuaded by the defendant's submission because the CEO clearly explained in the termination letter that the plaintiff's employment is terminated because he 'acted inappropriately' when performing his past duties. 
Acting inappropriately is similar to 'improper conduct' which is a distinct offence specified in clause 11.2(d) of the project co-ordinator contract and while the plaintiff may have raised a technical point, it is my view that it does not invalidate the defendant's authority as the employer to terminate the employment. It still has the common law right to terminate the employment but must exercise that right subject to due observance of the terms of the written contract. And on that note, the plaintiff's argument makes legal sense.

The plaintiff continued to remain in the employment of the defendant after the  general manager finance contract expired. 
The defendant ought to have properly observed the terms of the existing contract, to validly terminate the plaintiff's employment.
 
20.	I find that the defendant had not approached the termination of the plaintiff's contract carefully and diligently, which has resulted in the dispute dragging on for more than 15 years from the date of the termination decision of 10 December 2009. The issue came down to just one main issue of how the memo is to be treated. The contract that the plaintiff was terminated on was a short-term contract with about six months remaining. The defendant could have simply allowed the contract to run its term to expiry to avoid such ongoing costs of a long, drawn-out litigation. I am concerned about the length of time this case has taken to establish liability and expect the next aspects of this case to be expedited by both parties and their lawyers.

DECISION

21.	I am satisfied on a balance of probabilities, that the defendants failed to observe the disciplinary process provisions of the employment contract in clauses 10.1 to validly convey disciplinary charges to the plaintiff, and clause 11; to validly terminate the plaintiff's employment. In doing so, the principles of natural justice were breached. The plaintiff's employment with the PNG Ports Corporation Limited as project coordinator was therefore wrongly dismissed.

JUDGMENT

22.	It is therefore my judgment that the defendant is liable for damages for the wrongful dismissal of the plaintiff's employment on 10 December 2009. 

23.	The matter is to proceed to trial for assessment of damages.

23.	Costs follow the event and are awarded to the plaintiff to be paid on a party/party basis to be taxed, if not agreed.

ORDERS

24.     The Orders of the Court are:

1)	Judgment is entered against the defendant for wrongful dismissal of the plaintiff's employment on 10 December 2009.
2)	 The matter will proceed to trial on assessment of damages.
3)	The Registrar is to list this matter in the July 2025 directions hearing of this Court or such other date that may be available after July 2025.
4)	Pending the directions hearing, the parties are at liberty to enter into settlement discussions.
5)	At the directions hearing, the parties are to address the Court of their positions to refer to mediation the assessment of damages aspects of this proceeding,
6)	 Costs of the proceedings are awarded to the plaintiff to be paid by the defendants on a party/party basis to be taxed, if not agreed.  
7)	Time for entry of these orders is abridged to the date of settlement by the Registrar of the National Court which shall take place forthwith.

Orders accordingly.
__________________________________________________________
Lawyers for the plaintiff: Anis Lawyers	
Lawyers for the defendant: Kuman Lawyers