SC946

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA 11 of 2007

BETWEEN

NEW BRITAIN OIL PALM LTD
First Appellant

AND

NEIL SMITH
Second Appellant

AND

BEN TONAIM
Third Appellant

KARL AISI
Fourth Appellant

AND

VITUS SUKURAMU
Respondent

Waigani: Sakora and Lay JJ
2008: 27th of February and 30th October

CVIVIL – appeal - contract of personal employment - implied terms of unfairness and right to be heard.

Constitution and Underlying Law Act - finding that underlying law inappropriate - declaration of new rule of underlying law - necessity to take evidence, information and submissions on the proposed new rule.

Facts

The First Appellant by its officers terminated the employment of the Respondent after the Respondent had an altercation with his supervising officer. The Respondent sued for wrongful dismissal. The trial judge declared a new rule of the underlying law that there is an implied right to be heard in every contract of employment, which was breached by the First Appellant. Further, that the letter of termination of the contract of employment was ineffective because it did not use the words of the contract.

Held

1)	If a court is going to decide an issue not raised on the pleadings or not argued by the parties, or by reference to evidence not before the court for the purpose or upon a principal not addressed by the parties, the parties must first be given an opportunity to be heard;

2)	When the court proposes to apply a principal or rule of common-law or formulate a rule of the underlying law it is mandatory for the parties to bring evidence and information and make submissions for the assistance of the court;

3)	S9 of the Underlying Law Act is not an exception to the provision in s19 of the Act that decisions of the Supreme Court are binding on the National Court;

4)	When the Supreme Court has declared the underlying law, a judge of the National Court who finds the rule inappropriate to the circumstances of Papua New Guinea, may:
i)	express his view then apply the law as declared by the Supreme Court; or,
ii)	find the necessary facts and refer the question of law to the Supreme Court pursuant to Supreme Court Act s15;

5)	It is not necessary for a letter of termination of an ordinary contract of personal service to adopt the precise words of the contract of employment if the letter conveys the sense of a valid ground of termination under the terms of the contract or the Employment Act s36;

6)	Since the operation of the Underlying Law Act reference should be made to that Act and not the Constitution Schedule 2 for guidance on the application of custom, common-law, the underlying law or the declaration of the underlying law.

Cases Cited

PNG Cases Cited
Jimmy Malai v Papua New Guinea, Teachers Association [1992] PNGLR 568
Brian Curran v The State [1997] PNGLR 230
Kumagai Gumi Co Ltd v National Provident Fund Board of Trustees (2006) SC837
Buka Huinj v Kundapin Tila (2005) SC810
Review Pursuant to Constitution s155(2)(b)Application by Alfred Manase (2005) SC879
Central Provincial Government v Patrick Alfred Viro Haino, (1993) SC439
Otto Benal Magiten v Bernadette Beggie (No.1) (2005) N2880
Hedura Transport Pty Ltd v Gairo Vegoli (1977) N99
John Momis v Attorney General [2000] PNGLR 109
Steamships Trading Co Limited v Joel [1991] PNGLR 133
Island Cargo Services Ltd v Emanuel Abau [1997] PNGLR 469
Motor Vehicles Insurance (PNG) Trust v. James Pupune [1993] PNGLR 370
MVIT v John Etape [1996] PNGLR 596
Bure and ors v Robert Kapo (2005) N2902

Overseas Cases Cited
Caledonian Railway Co v North British railway Co (1881) 6 App cases 114

References
Constitution 
Underlying Law Act

Counsel
R. Bradshaw, for the Appellants
B. Takin, for the Respondent

30th October, 2008

1.	SAKORA AND LAY JJ: Hinchliffe J being unavailable this decision is delivered pursuant to s3 of the Supreme Court Act. The Respondent was an employee of the Appellant. He was employed under a written contract. He was terminated for cause after an incident with his immediate supervisor. He sued for wrongful dismissal. In the trial Justice Cannings found that the Respondent shouted at and threatened his supervisor with personal violence and kicked in his office door on two occasions. 

2.	The contract provided at clause 4:

"... Should the Employee, be guilty of dishonesty, insobriety, misconduct, assault on a Company Officer or any criminal offence or incur illness which incapacitates the Employee from proper performance of the Employee's duties... or shall be guilty of a breach omission or of non-performance of any of the terms and conditions of this agreement or the attached Company Regulations, the Company shall be entitled to summarily terminate the Employee's employment immediately without notice."

3.	His Honour then found:

"It was open to the company to regard the incident of 30 January 2003 as "misconduct" or an "assault of a company officer", which are two of the circumstances that under clause 4 of the contract entitled the company to summarily terminate the employee's employment immediately without notice ".

It was an incident that, on the face of it, could have warranted dismissal."

4.	His Honour found that the law as it stood was set out in the Supreme Court case of Jimmy Malai v Papua New Guinea, Teachers Association [1992] PNGLR 568, that is that there was no obligation on the employer to give an employee a right to be heard before dismissal, unless it is a term of the contract of employment or the employee's position is established by statute or there is some element of public office. 

5.	However having regard to provisions of Constitution section 20, 21, 25, 37(1), 41(1), 43, 48, 55, 59, 60, 63, Schedule 2.9, 2.10 and the Underlying Law Act His Honour found that the principles of natural justice and the constitutional rights of protection against harsh, and oppressive conduct apply and consequently he should develop the underlying law so as to find that there is an implied right to procedural fairness and to be heard before dismissal, in every contract of employment. He found that there was such a right implied in the contract before him and that the Appellant had breached that right and consequently the Respondent was entitled to damages.

6.	The Appellant appeals from that decision on the following grounds, amongst others:

"(g)	the Learned Judge erred in finding that the common-law principles referred to in (d) above are inappropriate to the circumstances of PNG when:
(i)	the Respondent (or the Appellants), did not seek to have the principles declared inappropriate to the circumstances of PNG;
(ii)	the Respondent (or the Appellants) did not seek to have the National Court formulate a new rule of underlying law;
(iii)	the Appellants were denied natural justice in that they were not given opportunity to adduce evidence or be heard on the issue;
(h)	 the Learned Judge erred in law in proceeding to formulate a new rule of underlying law without evidence or information from the parties as required by section 11 (1) of the ULA".

7.	The Statement of Claim, after alleging that the third and Fourth appellant's wrote to the First Appellant making false reports and allegations, asserts:

" 14 .Further, Third and Fourth Defendants when making those reports of allegations did not inform the Plaintiff about those reports or allegations made against him so that he be given the opportunity to respond in his defence."

8.	And further on, by way of summary at paragraph 21 the Statement of Claim asserts:

"Therefore, the action of the Defendants to terminate the Plaintiff's employment based on false allegations made after the 31st January 2003 is not only unlawful but it is a clear breach of natural justice, as Plaintiff was denied of a fair hearing".

9.	There was however nothing in the statement of claim which put the Appellants on notice that the Respondent relied upon the provisions of the Constitution cited, nor that the Respondent sought to have a new rule of law promulgated by way of developing the underlying law. Nor was any reference made by either counsel during oral submissions in the National Court to the Constitution, the Underlying Law Act or to a proposal to develop the underlying law by way of a new implied term in contracts of employment.

10.	In the case of Brian Curran v The State [1997] PNGLR 230 the Supreme Court held that it was a breach of natural justice to take evidence of another case into account when the parties were not informed of what the judge is doing The court is wrong to take into consideration evidence filed which the parties have agreed not to address in their submissions on a point agreed to be argued,:Kumagai Gumi Co Ltd v National Provident Fund Board of Trustees (2006) SC837:Injia DCJ, Salika & Davani JJ.

11.	In the case of Buka Huinj v Kundapin Tila (2005) SC810 Kapi, Davani & David JJ the Supreme Court held that the trial judge did not give the parties an opportunity to be heard on a relevant issue, the election of the First Respondent, he therefore fell into error. 

12.	And it has also been held that the National Court is wrong to award costs without hearing the parties: Review Pursuant to Constitution s155(2)(b)Application by Alfred Manase (2005) SC879.

13.	In summary these authorities stand for the proposition that if the court is going to decide an issue not raised on the pleadings or not argued by the parties, or by reference to evidence not before the court for the purpose, or upon a principal not addressed by the parties, the parties must first be given the opportunity to be heard.

14.	This principle has been applied by the Supreme Court to the duty to develop the underlying law. It was held in the following case that the duty to develop the underlying law must only be exercised where there is a situation not governed by custom or a principle of law. "As was pointed out by the Supreme Court in SCR 1 of 1978 and SCR 4 of 1980, there must first be a gap that requires attention and there must also be evidence or argument of it advanced before any new principle is introduced. To proceed to do so in the absence of such evidence or argument would be to proceed in error: Central Provincial Government v Patrick Alfred Viro Haino, (1993) SCR 439 Hinchliffe Sheehan and Andrew JJ. per the Court at page 4.

15.	That case was decided before the introduction of the Underlying Law Act. That Act was certified and came into force on the 18th of August 2000. Its purpose is to fulfil the requirements of Constitution Section 20. By virtue of the provisions of Constitution Section 20 (2) the Act takes the place of provisions in Schedule 2 of the Constitution specifying what is the underlying law and the manner of development of the underlying law. It provides a very detailed procedure for the court when considering the underlying law and which law it should apply. Section 11 of the Act provides:

" 11.	Evidence and information.

(1)	The parties to a proceeding shall bring evidence or information to assist the court in deciding on whether—

(a)	to apply a principle or rule of customary law; or
(b)	to apply a principle or rule of common law; or
(c)	to formulate a rule of the underlying law,

to resolve the subject matter of a proceeding.

16.	It is therefore mandatory on the parties to proceedings to bring evidence and information for the assistance of the court. And the parties cannot bring that evidence or information unless they are seeking the declaration of underlying law or are aware that the judge is contemplating the formulation of a rule of the underlying law. A proper course is for the pleadings to reflect what the plaintiff is seeking in terms of changes to the underlying law, as his honour the trial Judge found with respect to custom in the case of Otto Benal Magiten v Bernadette Beggie (No.1) (2005) N2880. The judge should not exercise his power unilaterally under the Underlying Law Act. The parties must be kept informed of what the judge is considering and be given the opportunity to be heard.

17.	And then Section 11 (2) of the Underlying Law Act provides:

(2)	The court, upon receiving the evidence or information under Subsection (1), shall make a decision—

(a)	to apply a principle or rule of customary law; or
(b)	to apply a principle or rule of the common law; or
(c)	to formulate a rule of the underlying law; or
(d)	on the manner in which a rule of the customary law or the underlying law should be formulated,

to resolve the subject matter of a proceeding.

18.	So that in our view, no court can proceed to formulate a rule of the underlying law without first receiving the evidence or information because it is only upon receiving the evidence or information that the court shall make a decision. Section 11 of the Underlying Law Act enacts as statute law what the case of Central Provincial Government v Alfred Viro Haino (supra) had previously declared as the law, with the proviso that the court is now empowered to formulate a new rule if it comes to the conclusion that an existing rule of the underlying law is no longer appropriate to the circumstances of the country.

19.	We, therefore conclude that his Honour fell into error in proceeding to formulate a rule of the underlying law not sought in the pleadings, without first advising the parties what he was contemplating doing, and without informing the parties of the rule of law that he was contemplating declaring, and giving the parties adequate opportunity to bring evidence and information and to make submissions for the assistance of the court. 

20.	This is the first Supreme Court decision concerning itself with the interpretation of the Underlying Law Act and we therefore find it appropriate to consider the approach to be taken in applying it. Section 9 provides:

"In a proceeding, if the Supreme Court or the National Court considers that a rule of the underlying law is no longer appropriate to the circumstance of the country, it may formulate a new rule, appropriate to the circumstances of the country, as part of the underlying law, having regard to—

(a)	the National Goals and Directive Principles and Basic Social Obligations established by the Constitution; and
(b)	the basic rights guaranteed by Division III.3 (Basic Rights) of the Constitution; and
(c)	analogies drawn from the relevant written law and customary law; and
(d)	the laws of a foreign country relevant to the subject matter of a proceeding.

Section 19 provides:

"(1)	All decisions of law made by the Supreme Court are binding on all other courts but not on itself.
(2)	Subject to Section 20, all decisions of law of the National Court are binding on all other courts except the Supreme Court and itself.
(3)	All decision of law by a court, other than the Supreme Court or the National Court, are binding on those courts whose decisions may be appealed to it or may be reviewed by it".

21.	 The trial Judge found that Section 9 "apparently" is an exception to the law in s19(1) that a National Court judge is bound by decisions of the Supreme Court. There are established principles for the interpretation of statutes. In the case of Hedura Transport Pty Ltd v Gairo Vegoli (1977) N99 Frost CJ was concerned with a problem of statutory interpretation as to whether mens rea was excluded by statute. In the course of examining the problem His Honour made the following observations with respect to statutory interpretation, which we adopt: "... but if on a fair interpretation of the words used it can be seen that the two sections can stand together, then the fact that exclusion would have been reasonable or even the fact that an exclusion might have been expected cannot, in my opinion, justify adoption of a gloss on the words used to bring about such a result". Another maxim of statutory interpretation is that when there are two possible interpretations of the provision and one is reasonable and the other is less reasonable or leads to an absurdity the court will adopt a more reasonable interpretation: Caledonian Railway Co v North British railway Co (1881) 6 App cases 114. 

22.	Section 5 of the Underlying Law Act provides as follows:

"The courts, especially the Supreme Court and the National Court, shall ensure that, with due regard to the need for consistency, the underlying law develops as a coherent system in a matter that is appropriate to the circumstances of the country".

23.	It would be extremely difficult, if not impossible for the Supreme Court to achieve the duty of consistency imposed on it by that section of the law, if, having declared the underlying law any judge of the National Court was then free to find that the law as declared by the Supreme Court was no longer suitable to the circumstances of Papua New Guinea and to declare a new rule of law. In fact we consider that an interpretation of the Underlying Law Act which allows that result, would lead to an absurdity.

24.	 Our view is that sections 5, 9 and 19 of the Underlying Law Act can be read together and the more reasonable result is achieved if, and we hold, that a National Court judge is not free to impose his own view of what is not appropriate in the underlying law once the Supreme Court has spoken. Section 9 and Section 19 of the Underlying Law Act must be read together. Section 9 does not override Section 19 and does not create an exception to the rule that a National Court judge is to be bound by the decisions of the Supreme Court.

25.	If a judge finds that the Supreme Court has declared what the underlying law is, then by virtue of Section 19 of the Underlying Law Act he is bound to apply that law. If at the same time the judge finds himself of the view that the underlying law is no longer appropriate to the circumstances of Papua and New Guinea in terms of Section 9, he has two options. He can express his view but apply the law as the Supreme Court has declared, or he can refer the question to the Supreme Court pursuant to section 15 of the Supreme Court Act after all relevant facts have been found. In that way sections 9 and 19 can be read together without one overriding the other, a circumstance for which Parliament has made no provision. A judge of the National Court is only free to declare a new rule of law when there is no binding decision of the Supreme Court on the point.

26.	We consider also that the observations of the Supreme Court in John Momis v Attorney General [2000] PNGLR 109 are still relevant. In that case the court said that a judge should be hesitant to formulate a rule of the underlying law when policy considerations are involved. If his Honour had invited submissions on the proposed new rule, no doubt his attention would have been drawn to the substantial body of statute law relating to employment including the, Employment Act, the Industrial Relations Act, the Industrial Organisations Act, the: Rule for Port Moresby, the, and Rule for Lae, The PNG Trade Union Congress General Employment (amending) Award 1975. Consideration of the amount of statutory provision in the area of employment is a relevant matter in deciding whether or not it is appropriate to create judge-made law under Section 9 of the Underlying Law Act on that topic.

27.	We allow the appeal and set aside the decision of the trial judge in so far as he found that it was appropriate to formulate a new rule of the underlying law.

28.	That conclusion effectively deals with all of the Appellants points of appeal dealing with natural justice, and the common-law right to be heard in connection with the formulation of a new rule of the underlying law. It is clear that His Honour considered and we agree that the underlying law of Papua and New Guinea as it stood before his pronouncement of the new rule did not contain a right to be heard on dismissal in an ordinary employer and employee relationship.

29.	The Appellants also appeals, amongst other grounds, on the grounds that:

"The Learned Judge erred in reviewing the First Appellant's reason for terminating the Respondent's employment summarily when:

(i)	the Respondent's claim was not for judicial review of the reason for termination;
(ii)	pursuant to section 36(4) of the Employment Act, termination of employment summarily can be the subject of an industrial dispute under the Industrial Relations Act;
(iii)	review of the reasons for termination is an industrial matter pursuant to section 1(1) (k) Of the Industrial Organisations Act Ch No. 173

30.	The Statement of Claim said (at paragraph 18):

"The alleged incident of 30 January 2003 does not constitute a valid ground for Plaintiff's termination by virtue of clause 4 of his Employment Contract."

31.	The Defence denied the allegations in paragraph 18 of the statement of claim. What the Statement of Claim put in issue in paragraph 18 was the substance of the incident on the 30th of January 2003. The Statement of Claim did not raise the issue that the notice of termination of the employment was defective. The notice of termination dated 6th of February 2003 read as follows:

"... you are dismissed on the following grounds:
a)	Threatening an immediate superior;
b)	Insubordination;
c)	Disobeying a lawful instruction from your superior".

32. The trial Judge dealt with the issue of validity of the notice of termination in this way:

" The company was entitled to summarily terminate the employee's employment immediately without notice, if the employee:

•	was guilty of dishonesty;
•	was guilty of insobriety;
•	was guilty of assault on a company officer;
•	was guilty of any criminal offence;
•	incurred illness which incapacitated the employee from proper performance of the employee's duties either wholly or in part and which in the company's medical officer was due to the employee's own misconduct or wilful neglect;
•	became bankrupt or made any composition with his creditors or an assignment for the benefit of the employee's creditors;
•	was guilty of a breach, omission or non performance of any other terms and conditions of the contract;
•	was guilty of a breach omission or non-performance of any terms and conditions of the Company Regulations.
The termination notice served on the plaintiff 16th of February 2003 gave three grounds of dismissal:
•	threatening an immediate supervisor;
•	insubordination:
•	disobeying lawful instruction from his supervisor.
None of those grounds listed is a situation justifying termination of the contract. The three grounds given could have all been regarded as "misconduct" but they were not expressed in those terms. In fact clause 4 of the contract was not even mentioned in the termination notice."

33.	There are several points we make about this approach. The first is that the Respondent did not put the form and validity of the letter of 6 February 2003 in issue in the pleadings. He did not seek relief on those grounds. The Appellant has been taken unaware by the court determining an issue on which the Appellant did not have a fair opportunity to address the court. We think on this ground alone, that the finding that the notice of termination was ineffective should be set aside.

34.	The second point we make is that it seems to us to be an inappropriate approach to interpret a letter from an employer to an employee as if it were as statute, strictly construing every word according to its ordinary meaning by comparison with the words of the contract, without having any regard to the substance which the author of the letter is trying to convey to the recipient. We consider that the trial judge fairly set out the manner in which the Appellant could have regarded the conduct of the Respondent in the passage from his judgment which we set out at paragraph [3]. It also seems to us that the terms of the letter would fairly convey to the Respondent the effect of his conduct as a breach of the contract of employment. It would be an unfortunate development, requiring every business letter written to be passed by a lawyer, if we were to hold that such a letter can only be of effect if it is couched in the precise words of the contract.

35.	Also on this point, this case was not a judicial review of the method and process used by the company to terminate the employee. The company was not exercising any quasi-judicial discretion or applying disciplinary procedures laid down by legislation. We are not aware of any authority for the proposition that an employer in an ordinary employer/employee relationship must state the reasons for termination. If the circumstances exist for summary termination, while it may not be a desirable course, as the law stands, an employer is not obliged to give any reasons. In that regard we agree with Brown J. in Steamships Trading Co Limited v Joel [1991] PNGLR 133 followed by Dougherty J. in Island Cargo Services Ltd v Emanuel Abau [1997] PNGLR 469; both cases arising from appeals from an industrial relations tribunal, holding that reasons are not necessary. Brown J. said this principle applied "short of termination (s36)". However in Malai v PNG Teachers Association [1992] PNGLR 568 the Supreme Court confirmed the right of an employer to terminate employment giving no reasons. Reasons need only be given to a tribunal with jurisdiction if the termination without notice is challenged. Obviously an employer wishing to avoid unnecessary litigation would state clear reasons.

36.	And finally on this point in the Employment Act Section 36 provides that, in the very circumstances applicable in this case, the employer may terminate the contract of employment without notice, amongst other grounds, if he:

(i)	wilfully disobeys a lawful and reasonable order; or
(ii)	misconducts himself by an act or omission or commission that is inconsistent with the due and faithful discharge of his duties; or

37.	The provision is not made subject to the terms of any contract between the parties. It applies in addition to any contractual term. The Appellant was therefore exercising both a contractual and a statutory right. The reasons advanced by the Appellant in its letter of termination (see para. 23) clearly adopted the grounds for termination without notice provided by Section 36. We set aside the finding that the letter of termination was ineffective.

38.	The Appellant also appeals on the following ground:

(p)	The Learned Judge erred in law and fact in finding that the Respondent had the right to be heard under section 3 .1 of the Appellant's (Company) Regulation when:
(i)	the alleged right to be heard under the Regulation was not pleaded in the Respondent's Statement of Claim;
(ii)	the alleged denial of the right to be heard was not a ground for the relief sought by the Respondent;
(iii)	the Appellants were denied natural justice in that they were not given the opportunity to adduce evidence or be heard on the issue.

40.	The Respondent's statement of claim asserts at paragraph 21 that "Plaintiff was denied of a fair hearing". That is the only statement in the Statement of Claim which one could say in any way put in issue the right to be heard. No mention is made in the statement of claim of a right to be heard pursuant to the provisions of the Company regulations. We agree that the alleged right was not pleaded.

41.	Pleadings play an important part in all matters going before the Court. The Supreme Court said in Motor Vehicles Insurance (PNG) Trust v. James Pupune [1993] PNGLR 370 that pleadings and particulars have the important function of doing the following:

"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) 148 CLR 658 at 664."

42.	However in Pupune's case the Supreme Court found that the Appellant could not complain about the trial judge determining issues not raised by the pleadings because it had allowed issues to be raised at the trial in evidence, later determined by the trial judge, without raising any objection to the evidence being led as irrelevant to the issues pleaded. This point was followed and applied in MVIT v John Etape [1996] PNGLR 596.

43.	In this case the Company regulations were put into evidence by the Appellant. It was an annexure to the affidavit of Karl Aisi tended into evidence by counsel for the Appellant. During cross-examination of the witness counsel for the Respondent raised clause 3 .10 of the Company regulations and cross-examined the witness on the process used in respect of the appeal right given by that clause. That was the time for the Appellant to raise objection to relevancy on the basis that the point was not clearly and properly raised by the pleadings.

44.	Subsequently during oral submissions the trial judge identified this as an important issue to be determined by the court. Counsel for the Appellant took the position that submissions on the point could be made if the court wanted them and clearly did not appreciate that the point had been put in issue by its own evidence and the cross-examination of the Respondent. We do not consider that the Appellant can now be heard to complain that the trial judge decided the issue when by its own conduct it allowed the admission of the evidence to raise the issue. This ground of appeal must fail. However, as the subsequent discussion shows, there was no finding by the trial judge that clause 3 .1 of the appellant company's regulation right to be heard was breached. Consequently our conclusion on this ground is to have little effect on the outcome of the appeal.

45.	The next ground of appeal is as follows:

"(q) In the alternative to (p) above, the Learned Judge erred in law and fact in finding that the Respondent was not given the opportunity to be heard before termination of his employment and that he was denied the right to fair appeal".

46.	As we have found that the appeal must succeed on the issue of the declaration of a new rule of the underlying law, the law remains as stated in Malai v PNG Teachers Association (supra) "Any suggestion of a duty to act fairly and any rights under the Constitution to natural justice only go so far here as to whether he was terminated with proper notice such as that required under the Employment Act ch 373... in the absence of any contractual arrangement which provided otherwise". In this case notice is not an issue because we have found Section 36 of the Employment Act applicable.

47.	It seems to us that ground (q) of the appeal concedes the point that the contract together with the regulations gave the Respondent a right to be heard. It does not challenge the existence of the right but only whether or not the right was extended and exercised.

48.	The ground that the Respondent was not denied a right to be heard and a fair appeal pursuant to the terms of the contract of employment needs further examination. As the trial judge's comprehensive survey of decided cases shows, only the case of Bure and ors v Robert Kapo (2005) N 2902, Injia DCJ, resulted in a finding that the employee had a right to be heard. In that case the court found that the employers Manual was part of the terms and conditions of employment. Those conditions required "... the employer to carry out full and proper investigations into the alleged offence and to give the employee an opportunity to be heard before a decision on dismissal was made... This right is conferred by the written contract and not by the common-law...".

49.	 At page 37 of the judgment of the trial judge under the heading "Did the plaintiff have a right to be heard?" his Honour found that there was an implied right to be heard because of his rewriting of the underlying law and we have allowed the appeal on that point, so that that finding cannot stand. His Honour goes on to say:

"The fact that there is a section on discipline in the Company Regulations and that there are provisions dealing with the hearing of a disciplinary case requiring that an employee be given a proper opportunity to state his case support the conclusion that the plaintiff had a right to be heard... The Company Regulations were incorporated into the contract by clause 12. The employee was expressly obliged to comply with them. It follows that both parties to the contract were subject to the duties of the Regulations imposed and entitled to the benefits and rights conferred by them".

50.	The trial judge noted that the Respondent was not advised that the company was considering terminating his employment, not asked to show cause why his contract should not be terminated, not given time to prepare or requested to make a written response to the allegations and that this amounted to procedural unfairness breaching an implied term of the contract (page 38 of the judgment, page 95of the appeal book).

51.	Thus the finding that the Respondent was not given an opportunity to be heard before termination was based squarely on the implied terms which we have struck down and not on the written terms of the contract and Company regulations; the finding cannot stand and the appeal must succeed on this ground.

52.	The next issue encompassed by this ground is whether his Honour was wrong in finding that the Respondent was denied the right to fair appeal. His Honour discusses what he saw wrong with the appeal process at page 41 of the judgment (page 98 of the appeal book) which in summary was (a) the senior manager hearing the appeal refused to give copies of the documents on which he relied to the Respondent; (b) the appeal was not documented, (c) the letter giving Mr Aisi's decision on appeal, alluding to witnesses without giving details of who they were gave the impression that he had rubberstamped the decision without genuinely reviewing the merits.

53.	Section 3.1.10 of the Company’s Regulation states that "if the employee feels he/she has been unjustly treated he/she should be allowed to appeal to a more Senior level of Management within the Company. The Senior Managers decision will be final".

54.	This is quite a different provision to that which applied in Bure and ors v Robert Kapo (supra) where extensive provisions for multiple appeals culminating in a three-man appeal board were provided in the Manual. There was specific provision that the appeal procedures were to be recorded in writing signed by the employee and the appellant personnel. The Manual envisaged a comprehensive, transparent and fair procedure with a written record. 

55.	We do not consider that all those provisions can be implied into the Company’s Regulation before us in the manner which the trial judge has done. The Respondent exercised his right to appeal to a senior manager, the senior manager heard the Respondent and looked at the record and we do not consider that more should be expected of an internal company procedure, unless specifically provided by the terms of the contract. Accordingly we find that there was no basis on which the trial judge could find that the Respondent was not accorded his contractual right of appeal.

56.	Having found for the Appellant on all the relevant issues in which the trial Judge found for the Respondent we allow the appeal, quash the decision of the trial judge and order that costs be paid by the Respondent.

57.	Before finally leaving the matter we observe that we did not consider that there was any substance in the Appellant's submission that Schedule 2 .11 of the Constitution and the Underlying Law Act only allowed prospective application of a new rule declared as underlying law. We consider the fair construction of sections 9, 10 and 22 of the Underlying Law Act, is that the judge can decide a case and give a remedy based on a newly declared rule of law. Further, by virtue of the provisions of Constitution Section 20 and the Underlying Law Act Section 22 (2) there should no longer be any reference to Schedule 2 of the Constitution with respect to the determination of the underlying law.

Bradshaw: Lawyers for the Appellant
Benny Takin: Lawyers for the Respondent