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Islands Cargo Services Pty Ltd v Abau [1997] PNGLR 469 (15 July 1996)

[1977] PNGLR 469

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

ISLANDS CARGO SERVICES PTY LTD

V

EMMANUEL ABAU, ANDREW WALIMAN and KAPAI ARIA as chairman & members of an arbitration tribunal established under the industrial relations act chapter no. 174;

BEN KAIRU; and
BUNAM LABERT DAMEN as industrial registrar

WAIGANI: DOHERTY J
12 December 1995, 15 July 1996

Facts

The plaintiffs sought judicial review of the findings and decision of the first defendants when it found that the second defendant was unfairly dismissed and ordered his re-instatement, alleging inter alia, that the first defendants decision was ultra vires the Industrial Relations Act Chapter 174 and/or the Industrial Organisations Act Chapter 173 in that the matter was not an "industrial dispute" within the meaning of these legislation:

Held

1. The Tribunal’s ruling that an employer had a duty to act fairly and responsibly in deciding reasons for dismissal did not amount to a new term of a contract and therefore was not a retrospective award.
   
2. The powers of an industrial tribunal are conferred by statute and differ from courts of common law or equity.
   
3. Unlike courts of common law or equity an Industrial Tribunal has power to order reinstatement and an application for re-instatement may be entertained by the Tribunal.
   
4. A dispute between an individual employee and his employer is an "industrial matter" within the meaning of s 35 Industrial Relations Act Ch. 174.
   
5. A dispute between an individual employee and his employer is an "industrial dispute" within the meaning of s 1(g) of the Industrial Organisations Act Chapter 173.
   

Papua New Guinea cases cited

Condon v National Airlines Commission [1978] PNGLR 1.

Ela Motors Ltd v McCrudden ex parte Hoepper [1973] PNGLR 437.

Kekedo v Burns Philp (PNG) Ltd [1988-89] PNGLR 122.

Malai v PNG Teachers Association [1992] PNGLR 568.

Port Services (PNG) Pty Ltd v Tunabi [1995] PNGLR 391.

Steamships Trading Co. Ltd v Joel [1991] PNGLR 133.

Other cases cited

Dow Corning Australia Pty Ltd v Monk & Others [1984] 3 NSWLR 13.

Loty & Holloway v Australian Workers Union [1971] IR 95.

Metal Trade Employees v Amalgamated Engineering Union [1935] HCA 79; [1935] 54 CLR 387.

Monk v Dow Corning Australia Pty Ltd [1984] 71R 340.

R v Staples ex Parte Australian Telecommunications Commission [1980] HCA 27; [1980] 143 CLR 614
Re Ranger Uranium Mines Pty Ltd & Others ex parte Federated Miscellaneous Workers Union of Australia [1987] HCA 63; [1987] 163 CLR 656.

Counsels

Mr Payne, for the plaintiffs.
Mr Ninai, for the 1st & 3rd defendants.
Mr Wright & Mr Walton, for the 2nd defendant.

15th July 1996

Doherty J. This was an application pursuant to Order16 of the National Court Rules seeking review of a decision of the first defendants sitting as an Arbitration Tribunal on an application of the second defendant. The first and third defendants entered an appearance to hear and be bound by the Court’s decision.

The second defendant had been employed by the plaintiff and had been dismissed from employment on 28th June 1993 by notice in a faxed letter. He had been employed under the terms of a Kavieng Stevedore Award, No. 25 of 1973. He had, through the Waterside Workers Union (hereinafter "the Union"), notified the Secretary of Labour & Employment (hereinafter "the Secretary") of an industrial dispute arising from this dismissal on 22nd July 1993. When preceding discussions between the Union on behalf of the second defendant and the holding company of the plaintiff did not resolve the matter, the holding company referred the dispute to the Employers Federation and a compulsory conference pursuant to the Industrial Relations Act Ch. 174 was convened.

The compulsory conference was held and adjourned. It did not resolve the dispute and the Union requested the Secretary to appoint an Arbitration Tribunal to determine the dispute, the Governor General did this on 15th August 1994 and the first defendants were appointed as a Tribunal.

Their terms of reference - stated in the reference and their reasons for decision of 24th April 1995 concerned "the alleged unfair and harsh dismissal of Mr Ben Kairu by Islands Cargo Services and the claim for reinstatement of Mr Ben Kairu to his former employment with Island Cargo Services, Kavieng." After several adjournments, the Tribunal heard witnesses for both Kairu and the plaintiff company relating to the incidents cited in the dismissal notice. After submissions, they made a finding that the facts as proved before them did not support the allegations in the dismissal notice and ruled:-

"It is the overall finding of the Tribunal that the termination of Mr Ben Kairu on 28 June 1993 by Islands Cargo Services Pty Ltd had been found to be unfair and harsh. The Tribunal therefore upholds the claim by Mr Kairu for reinstatement and other remedies as follows;

1. That Mr Ben Kairu be reinstated to his former position as Foreman Stevedoring with Islands Cargo Services Pty Ltd in Kavieng without loss of entitlements, rights and privileges incurred during the period from the date of his dismissal i.e. 28 June 1993 to the date of his reinstatement i.e. 24 April 1995.
   
2. That if Mr Kairu chooses not to be reinstated or refuses to return to his former position with Islands Cargo Services Pty Ltd in Kavieng, he should be compensated for any loss of entitlements, rights and privileges incurred during the period from the date of his termination to the date of his reinstatement."
   

There were other facts leading up to the hearing but it is common ground that these are not relevant.

It is the decision and the manner that was reached that the Plaintiff seeks to have reviewed on the following grounds:-

(a) the first defendants acted ultra vires in making the decision and Award of 24 April 1995 in respect of the application made by the second defendants as the subject matter of the second defendant’s application was not an industrial dispute within the meaning of the Industrial Organisations Act Chapter 173 or the Industrial Relations Act Chapter 174.

(b) the first defendants erred in law in finding that the common law right of the plaintiff to terminate the employment of the second defendant pursuant to the terms of his contract of employment could only be exercised fairly and responsibly when in law there is no such obligation provided the plaintiff acts within the terms of the contract of employment;

(c) the first defendant erred in law in implying into the contract of employment between the plaintiff and the second defendant a term that the plaintiff was required to act fairly and responsibly towards the second defendant when terminating the second defendant’s employment pursuant to the contract of employment;

(d) in the alternative to (c) above, the first defendants erred in law and in fact in finding that the plaintiff had not acted fairly and responsibly towards the second defendant in terminating the second defendant’s employment by giving the second defendant a payment of the equivalent of two weeks wages in lieu of notice and making payment in respect of accrued leave;

(f) The first defendants erred in law in failing to apply the law in Steamships Trading Co. v Joel [1991] PNGLR 133 and Malai v PNG Teachers Association [1992] PNGLR 568.

(g) the first defendants erred in law in making an award enforcing a contract for personal services between the plaintiff and the second defendant;

(h) the first defendants erred in fact and in law in determining that the plaintiff had acted unfairly and harshly in terminating the employment of the second defendant; and

(i) the first defendants erred in law in making an award retrospective contrary to s 36(2) of the Industrial Relations Act Chapter 174 in that the dispute was notified to the Secretary for Labour under Section 25 of the Act on 22 July 1993 and the first defendants failed to give any special reasons for making the award retrospective.

Ground 3(a) and 3(c): counsel states, the second defendant relied on the PNG Waterside Workers Award of 1990 when in fact it does not cover Kavieng, the relevant award being the Kavieng Stevedoring Award or the Employment Act Ch. 373.

The award applying to the second defendant was considered on p. 40 of the Tribunals decision and the Tribunal appears to have accepted a submission by the Employer’s Federation who represented the plaintiff that the second defendant was employed under the PNG Waterside Workers Award No. 9 but since it was silent on termination provisions, the Kavieng Common Rule applied. Counsel for the plaintiff relies on the dismissal provisions of this Award or the Employment Act Ch. 373 as being applicable to both procedure and entitlements of the second defendant. Both provide for termination on notice or payment in lieu thereof. Since the second defendant received payment in excess of the statutory provision of both, then his statutory entitlements were met and he submits that the Tribunal erred by effectively introducing a further term by ruling that, when exercising "its common law right to hire and fire, it must do so fairly and responsibly" a duty the Tribunal considered was imposed on "either party" to an employment contract.

Counsel relies on precedents (Steamships Trading Co. Ltd v Joel [1991] PNGLR 133 and Port Services (PNG) Pty Ltd v Tunabi & Others [1995] PNGLR 301. Steamships Trading Co. Ltd v Joel [1991] PNGLR 133 held (at p.143) that the Tribunal having agreed with the company that there was no evidence that the dispute had been registered or contested within the 3 months statutory limit "[H]aving found that the Tribunal has made its Award ultra vires its powers (it not having properly found an "industrial dispute"). The award is a nullity ..." Counsel for Kairu says that Steamships Trading v Joel (supra) was per in curiam Condon v National Airline Commission [1978] PNGLR 1. I will return to this point.

The second case I must distinguish on its facts. As I recall, it related to a number of employees who were retrenched, accepted final payments and subsequently had further claims lodged on their behalf by the union and a retrospective award was made.

What counsel effectively says is that by holding that the employer when deciding to terminate an employee for reasons of the employee’s conduct must act in a fair and responsible manner, effectively introduces a new term restricting the common law power to hire and fire and effectively makes a retrospective award. I consider this is an interpretation it does not come within clear definition of an award in the Industrial Relations Act Ch. 174 s 1(a), nor is it "an agreement". The first defendant, the Tribunal, is set up by statute and its powers and the remedies it can give differ from common law and those provided by other statute. This is in contrast to the powers of the court, which can apply legislation (such as the Employment Act) and common law whilst the Tribunals powers are vested by statute and differ from the courts powers. To say that the Tribunal have effectively made a retrospective variation in the contract by saying the employer must act fairly and responsibly when considering reasons for dismissal overlooks the Tribunals powers. Once the Minister and the Head of State have, pursuant to s 30(4) "refer[ed] the dispute for settlement to Tribunal" the powers of the Tribunal are invoked and these include power to call evidence on the "dispute".

The definition of an industrial dispute is contained in Section 1 of the Industrial Organisations Act Ch. 173 which, in accordance with the preamble of the Industrial Relations Act Ch. 174, must be incorporated and the two statutes read as one. At "k" under the definition of industrial matters, the right to dismiss or to refuse to employ a particular person is "an industrial matter". I consider that the Tribunal was entitled to make the investigation it did and to rule on the application of the right to dismiss. To hold otherwise would effectively limit the Tribunal’s powers to decide on the right to dismiss. By limiting it to an absolute common law power means that an employer could effectively give any form of spurious excuse, be it without foundation or be it based merely on gossip or hearsay, and the Tribunal would be unable to go behind that reason and investigate or call evidence.

Counsel for the second defendant has referred me to the case of Loty & Holloway v Australian Workers Union [1971] IR 95, decision by Sheldon J. dealing with the exercise of the same discretion by an equivalent Australian Commission. Upholding the Commission, he ruled at p. 99 that it must be shown that the executive "exercised its right of dismissal, unfairly even though it was perfectly legal ...." He further held: "The less fetters there are on the discretion, the better [none appear in the Act], but it is all important that it should be exercised soundly".

I consider such principles apply also to the powers and functions of the first defendant, the Tribunal.

I do not consider that this method of interpretation was either outside the jurisdiction of the Tribunal nor do I consider that it amounted to either a new term in the contract of employment or an implied amendment to the common law or statutory powers to dismiss vested by virtue of the Employment Act Ch. 373. It is an interpretation of a power and therefore a question of retrospectivity does not arise.

The defendant further argued that the decision was ultra vires as the subject matter was not at "an industrial dispute" as "s 35(1)(a) Industrial Relations Act limits awards to "industrial matters". Counsel, whilst conceding that the definition of an industrial dispute under the Industrial Relations Act Ch. 174 is the same as that contained in Section 1(1) of the Industrial Organisations Act Ch. 173 stresses that "industrial matter" means matters pertaining to employers and employees. He refers, in submission to a "industrial dispute" also defined in s. 1 as a dispute or difference between (a) an employer and an employee or employees ... including

"(g) a dispute arising from a contract of employment particulars of which are contested by either party to the contract within three months after the termination of the contract and the definition at (k) of "industrial matters"."

Both Counsel refer to Monk v Dow Corning Australia Pty Ltd [1984] 71R 340 when the Court considered similar wording and said -

"Although the plural "employers" and "employees" is also used in the definition of "industrial matter" contained in Section 5 Industrial Arbitration Act and may, in some context, for example Doherers case, comprehend the singular, it is a method of expression that suggests that a question solely arising between an employer and an individual employee, without more may be insufficient to involve an "industrial matter".

Citing this and Metal Trade Employees v Amalgamated Engineering Union [1935] HCA 79; [1935] 54 CLR 387 at 440 and R v Staples ex parte Australian Telecommunications Commission [1980] HCA 27; [1980] 143 CLR 614 ...

"that such a dispute may have satisfied the literal definition of "industrial matter" (provided that the word "employees" was read in the singular ...) nevertheless there is no suggestion in the materials before the Court that the dispute had any implication of likely repercussion or dislocation for the industry as such so as to give the necessary character to what would otherwise be no more than a personal dispute".

Plaintiff’s counsel submitted that the claim for reinstatement was made in respect of one individual, viz the second defendant that does not come within the ambit of any of the definitions of "industrial dispute". He submitted that Section 35(1)(a) Industrial Relations Act limits awards to "industrial matters" and citing the above precedents, a question arising solely between an employer and an individual employee, without more may be insufficient to involve an "industrial dispute".

He submits that this was, in fact, a personal dispute and the decision to terminate did not affect anyone else in the industry, similarly there is no suggestion of further industrial repercussion. Counsel suggests that the termination could only become an industrial dispute if it falls within the definition in s 1(g) of Industrial Relations Act Ch. 173 and it does not because it is personal.

In reply, counsel for the first defendant submitted that the Tribunal had correctly held that its jurisdiction arose from the words contained in paragraph "k" of the definition of industrial matters which I have cited above and emphasised the definition "industrial matter" and quoted the opening and closing words of the definition of industrial matters (viz) "Industrial matters means all matters pertaining to the relations of employers and employees and, without limiting the generality of that statement, includes - and includes all questions, what is right and fair in relation to an industrial matter having regard to the interest of the persons immediately concerned and of Papua New Guinea as a whole".

They drew the courts attention to the almost identical wording used in s 4 of the Conciliation and Arbitration Act 1904 of the Commonwealth of Australia and submit that in interpreting and considering this provision, the court may look at interpretations of similar statutes in different jurisdictions relying on such precedents as Lennon v Gibson & Howes Limited [1919] UKPCHCA 2; [1919] AC 709 and other cases and texts.

The Australian equivalent legislation was considered by an unanimous decision of seven judges of the High Court of Australia in the case of Re Ranger Uranium Mines Pty Ltd & Others, ex parte Federated Miscellaneous Workers Union of Australia [1987] HCA 63; [1987] 163 CLR 656 where it was unanimously held that a claim for reinstatement in employment was properly characterised as being within the jurisdiction of the equivalent provision as our paragraph "k".

Clearly Monk v Dow Corning Australia Pty Ltd [supra] does not preclude an individual per se, applying. That is apparent from the citation above, and from the facts and ruling in the case, which was an appeal against dismissal of an application for reinstatement by an individual employee. At p. 350, it was held:

"Despite the contentions of the respondent employer to the contrary, there is power, therefore, to make an award in a case where an employee has been dismissed, without there being some added feature applicable to the situation being regarded as necessary to establish that an industrial matter is involved requiring determination."

The provision concerning reinstatement of an individual in an employment was considered at length in re Condon v National Airlines Commission of Papua New Guinea [1978] PNGLR 1 at p.11 when referring to the decision in Ela Motors Ltd v McCrudden: ex parte Hoepper [1973] PNGLR 436, adopting the following quotation from the Hoepper case:

"However, when one looks at s 23 of the Industrial Relations Ordinance which creates the powers, one knows that the "dispute" is apparently not to be narrowly defined. It is enacted that ‘the Tribunal shall forthwith inquire into the dispute and shall make an award deciding the matters in issue between the parties to the dispute’. In my opinion, the Tribunal is thereby given power to go to the actual matters in dispute, irrespective of the actual description of the dispute in the enabling documents - providing always of course that the dispute is an industrial dispute is defined."

I agreed with respect to the Australian Court of Appeals in Dow Coning Australia Pty Ltd v Monk & Others [1984] 3 NSWLR 13 at p. 20 adopting a statement in Doberer’s case -

"... it would be absurd to suggest that every dismissal of an employee or refusal to employ any person is ipso facto an industrial matter. Some other element is necessary in order that a dismissal of a person may be converted into an industrial matter, and that element is the existence of a dispute which converts the entirely neutral fact of dismissal into an industrial matter cognisable by the industrial tribunals constituted under the Industrial Arbitration Act."

It is noted that this ruling was given after Condon v National Airline Commission [supra] and Ela Motors Ltd v McCrudden ex parte Hoepper [supra]. Hoepper was approved and adopted by the Supreme Court in Port Services (PNG) Limited v Tunabi & Others referred to by counsel for the plaintiff. Whilst I agree with the principle quoted above from the Dow Coning Australia Pty Ltd v. Monk & Others [supra], it is to be noted that both Papua New Guinean cases of Condon & Hoepper dealt with claims by individual employees against their employer and Condon in particular held at p.12:

"Neither under common law nor equity was reinstatement in employment of possible remedy for wrongful dismissal. The remedies were for debt or damages and the Courts have to decline to orders to specific performance of work contracts, which would involve continuous supervisions by the courts. The various Australian statutes regarded the reinstatement of a dismissed worker as being within the scope of the jurisdiction of the industrial tribunal they created".

Condon adopted a quotation from the text, Labour Law in Australia by Drykes & Glasbeek (Butterworths): "This occurs in situations where there is no doubt that the employer has been legally justified in exercising his right to dismiss summarily, but the Tribunal exercises an extra-legal power of ordering reinstatement when the action of the employer is harsh or oppressive, even though he acts within his legal rights." Condon which is persuasive in this court, adopted this quotation and whilst the general principle that every dismissal or refusal to employ is not ipso facto an industrial matter, it is clear from Condon’s and Hoepper’s case that the Industrial Tribunal does have a power when the tribunal, on the facts, finds that certain actions of the employer warrant it.

It will be noted that the expression used in Condon by Pritchard J is "harsh or oppressive". This terminology has been definitely moved away from in other cases e.g. Loty & Holloway v Australian Workers Union (supra) at p.99 where the Court adopted use of the word "unfairly" because "adjectival tyranny should be resisted, and I believe in the modern context expressions used in the older cases such as "harsh", "oppressive" and "unconscionable" as determinants ... tend to distort this basically simple approached...."

With respect, I would also adopt such an interpretation. Words such as "harsh" or "oppressive" have been used both in legislation and decisions of the court but there is no good reason to impose it upon the Tribunal.

I consider that the Tribunal was entitled to consider a case where an employer may have exercised his right to dismiss unfairly and in assessing that situation, I can find no fault in the Tribunal’s exercise of its powers to hear and assess witnesses and having heard the facts before it, to make a finding. I consider that this was one of the cases where the Tribunal was entitled to treat the dispute as an industrial dispute and I consider it was, therefore, within their jurisdiction and I do not uphold the plaintiff’s application on this ground.

The plaintiff in the alternative seeks a ruling that the Tribunal erred in law and in fact in finding the plaintiff had not acted fairly and responsibly towards the second defendant. The principles of judicial review are that it is unusual for the review tribunal to vary a finding of fact where the lower court or tribunal has had the opportunity to hear and assess witnesses.

I consider such a ruling would apply on findings of fact in the case before me. I also consider it is a discretionary power. As said by Kapi DCJ in Kekedo v Burns Philp (PNG) Ltd [1988-89] PNGLR 122 at p.124, "the circumstances under which judicial review may be available are where the decision making authority exceeds its powers, commits an error of law, commits a breach of natural justice, reaches a decision which no reasonable tribunal could have reached or abuses its powers".

I apply that to the situation before me. On principle, I cannot see any abuse of power or misapplication of the facts. I have ruled on the question of law and I consider the Tribunal was entitled to reach the findings of fact it did and I do not uphold the application on this ground.

The further grounds of application were the Tribunal had erred in law and failed to apply the cases of Steamships Trading Co. Ltd v Joel [1991] PNGLR 133 and Malai v PNG Teachers Association [1992] PNGLR 568 to the case before them. I am satisfied from the Tribunal’s findings and its reason for decision that these cases were put before it and they considered these precedents. Counsel had suggested that the Steamships Trading Co. Ltd v Joel was per in curiam Condon v National Airlines Commission. However I notice that Condon v National Airlines Commission is specifically referred at p. 141 and distinguished on the grounds that a valid industrial dispute was found. Steamships v Joel [supra] dealt with people who were terminated because their services were no longer required and the complaint was made to the Union as a result. The Tribunal had held, based on its findings, that "services no longer required can never be a reason for termination in Papua New Guinea where both the Industrial Relations Act and the Industrial Organisations Act provide the checks and balances against abuses of the employer’s rights."

His Honour after reviewing the law, held at p. 141; "short of misconduct as touched on in s. 36(1) of the Employment Act no justification for termination need be advanced in the particular circumstances of this employment pursuant to the Port Moresby Common Rule" and held that the Tribunal had misdirected itself on the law applicable when it said "services no longer required" can never be a reason for termination.

I see nothing in law or in the facts in this case that would cause me to resile from that statement of law. The Tribunal in that case before me has made no such sweeping or overall ruling and has limited itself, properly to my mind, to the facts before it and to its reasons relating to those facts.

I cannot see any conflict between Joel’s case and the powers that the Tribunal in the case before me exercised or the findings that they made. I consider that the Tribunal properly and fully assessed the law. In the case of Malai v PNG Teachers Association [1992] PNGLR 568 there is no evidence in the facts before me that the matter was referred to a Tribunal and therefore the statutory powers of the Tribunal were not canvassed and I cannot review the decision of first defendant on the basis of the Supreme Court decision which is binding upon this court.

In view of my foregoing rulings on the facts and the law I find no error on the ruling or findings of the first defendant, I repeat that I consider that the powers of the Tribunal differ from the powers of the common law and their powers to rule for reinstatement are vested by statute and not by common law rules relating to enforcement of a contract for professional services.

I have held that there was no award retrospective within the meaning of s 36(2) Industrial Relations Act Ch. 174 and ground 3 must fail I consider that the actions of the Tribunal were within the powers vested in them by the Industrial Relations Act Ch. 174 and that they did not err in fact or in law and as such there is no power in this court to remove their decision and quash it.

Accordingly the application for certiorari is refused and the declarations and injunctions sought under the grounds (c), (d) and (e) are refused.

Lawyers for the plaintiff: Blake Dawson Waldron.
Lawyers for the 1st & 3rd defendants: Solicitor General.
Lawyers for the 2nd defendant: Mr Wright (QC) and Murray & Associate Lawyers.