IN THE SUPREME COURT OF SAMOA
HELD AT APIA

BETWEEN

UAINA LIKI
of Vaivase-uta unemployed
Plaintiff

AND

SAMOA BREWERIES LIMITED
a duly registered company carrying on business at Vaitele.
Defendant

Counsel: TRS Toailoa for plaintiff
TK Enari for defendant

Judgment: 28 February 2005

JUDGMENT OF SAPOLU CJ

Proceedings

As it will appear from this judgment, the case for the plaintiff does raise a number of important issues in the development of Samoan employment law. I will deal with each of these issues as it arises in the course of this judgment.

It is pleaded in the plaintiff's statement of claim (intituled "First Amended Statement of Claim") that the plaintiff's dismissal from his employment by the defendant was without cause or sufficient cause and therefore unjustified, unfair and wrongful. It is also pleaded that the defendant was negligent in the way it handled the allegations of misconduct against the plaintiff. Accordingly, there is a claim for damages on the basis of negligence. There is also a claim for overtime pay under s.29 of the Labour and Employment Act 1972.

Given the continuing reliance of Samoan Judges and lawyers at this stage of the development of Samoan employment law on English, Australian and New Zealand authorities, it would be helpful to mention that "unjustified dismissal" and "unfair dismissal" are statutory concepts whereas wrongful dismissal is a common law concept. All three jurisdictions: England, Australia and New Zealand had treated and still continuing to treat wrongful dismissal as a common law concept. However, in England the concept of unfair dismissal was introduced into English employment law by the Industrial Relations Act 1971 (UK). The relevant provisions of that Act are now contained in Part X of the Employment Rights Act 1996 (UK). Unfair dismissal is therefore a statutory concept, a point to be borne in mind when reading English authorities. In New Zealand, the concept of unjustified dismissal was introduced into New Zealand employment law by the Labour Relations Act 1987 (NZ) which was subsequently replaced by the Employment Contracts Act 1991 (NZ). Unjustified dismissal is therefore a statutory concept under New Zealand employment law. In Australia there is the concept of "harsh, unjust and unreasonable dismissal" which is also a statutory concept introduced into Australian employment law by way of an Award made pursuant to the Conciliation and Arbitration Act 1904 (Cth) which was subsequently replaced by the Industrial Relations (Consequential Provisions) Act 1988. Samoa has for a number of years adopted the common law concept of wrongful dismissal in its employment law but it does not have legislation on unfair, unjustified, harsh, unjust or unreasonable dismissed as in other jurisdictions. This means that when reading English, Australia and New Zealand cases which deal with the concepts of dismissal referred to, it is important to bear in mind that those concepts are statutory concepts in order to avoid any possible confusion with the common law concept of wrongful dismissal.

By way of damages, the plaintiff claims: (a) $600,048 for loss of earnings for the 16 years from the time of his dismissal up to his retirement at the age of 60, (b) $30,002.40 for loss of NPF contributions, (c) $80,000 for loss of insurance cover for himself and his family, (d) $83,200 for loss of use of a company vehicle for the 16 years from the time of his dismissal up to his retirement at the age of 60, (e) $20,000 for his consequential inability to meet his bank loans obligations and the additional mental distress and anxiety, (f) $20,825.39 for overtime pay from 1996 to 2000, (g) $50,000 general damages for negligence and for mental distress, anxiety and embarrassment. In total the plaintiff claims $884,075. He also claims solicitor's costs. The defendant in its statement of defence (intituled "Amended Statement of Defence") denies and resists every material aspect of the plaintiff's claim.

Factual background

The defendant is the Samoa Breweries Ltd which is the largest brewery company in Samoa. The plaintiff commenced his employment as a junior accounts clerk with the defendant on 5 July 1984. He was about 27½ years of age at the time. Over the years he rose up the employment ladder in the defendant company until he was appointed on 27 August 1980 to the position of personnel officer which was classified in the list of duties for that position as a position in the senior staff level. This list of duties formed part of the plaintiff's contract of employment with the defendant as personnel officer. Amongst the duties in his list of duties, the plaintiff was required to supervise two administration staff, liaise with department managers on staff requirements, and liaise with employees on their day to day requirements and company regulations etc. In response to a question from the Court, the plaintiff also said that as personnel officer he was responsible for looking for employees to fill job opportunities within the defendant company, helped out within the defendant's compound during working hours to see if any employees were not working, and to inspect the conveniences to make sure that they were properly cared for. The plaintiff also said that his designation as personnel officer ceased in 1996 when he took on the designation of personnel manager. At the time the plaintiff's employment was officially terminated on 23 March 2001, he was 44 years old, still occupying the position of personnel manager, and was at the annual salary of $37,503.

The defendant was not able to provide a written list of the duties and responsibilities that the plaintiff performed and exercised as personnel manager. The defendant's general manager said he could not find a job description for the plaintiff as personnel manager in his personal file. However, the plaintiff and the general manager covered this matter in their oral testimonies. According to the defendant's general manager, there are six different departments or units within the organizational structure of the defendant company. Each department has a manager or department head. Personnel and administration is one department or unit. Its manager was the personnel manager which was the position occupied by the plaintiff at the time his employment was terminated. He also said that even though the general management of the defendant company was under him and he had a say in each of the six departments, the actual day to day management of the affairs of the defendant in each department was carried out by the department manager. Given the size of the defendant company's operation this must be true. It will just not be practical for any one person or the general manager on his own to take over the actual daily management of all of the affairs of the defendant company. The defendant's general manager also said that the plaintiff was a member of the senior management team. He also said that as personnel manager, the plaintiff recommended the filling up of positions in the defendant company and he put out the advertisements for such positions and carried out the interviews. Even though the power of hire and fire is vested in him as general manager, in practice he and the plaintiff would both have to agree that a particular applicant is the right candidate for a position. This must be before an appointment is made. The general manager also said that interviews of applicants for a vacant position in a particular department were carried out by the manager of the department concerned but the personnel manager must be present at all interviews because he was supposed to know more about personnel issues. And if the manager of the department concerned and the personnel manager consider that no applicant was suitable for a position, that was the end of the matter; it did not have to come to him as general manager. When an applicant was recommended for appointment to a non-managerial position, the department manager, personnel manager, finance manager and himself as general manager all have to sign on the appointment form. Documentary evidence was produced by the general manager to show this was the case. The same practice applied when a non-managerial employee was dismissed from employment with the defendant company, even though the power to hire and fire is vested in the general manager alone. In this connection, it should also be mentioned that the general manager said that the plaintiff had been involved in the dismissal of other employees for offences less serious than the one alleged against the plaintiff. Before an employee could work overtime, prior approval of his department manager was required. The same applied to the staff of the personnel and administration department which was under the plaintiff as personnel manager. Such decision to grant or decline overtime work to an employee did not go to the general manager for approval. The department manager's decision was final. The defendant's general manager also said that at the time the plaintiff's employment was terminated, there were five staff members in his unit including the plaintiff which implies that there were four staff members under the plaintiff as personnel manager at the material time. Perhaps it should also be mentioned here that the plaintiff was given certain perquisites associated with his position as personnel manager which were not available to junior staff. One of these perquisites was the free use of a company vehicle.

In his evidence on this aspect of the case, the plaintiff said that he had no power to hire or fire any staff member. That power was vested in the general manager. He said that even though he was involved in the interviews of applicants for positions in the defendant company, the final decision to hire or employ anyone was vested in the general manager. He also said that in the case of dismissal of a staff member or employee, a report of the allegations against that staff member would be prepared and given to the general manager. In respect of an employee in his department, the report stating the allegations against an employee would come from him to the general manager. However, he had no power to hire or fire an employee. The final decision whether to dismiss an employee was with the general manager. The plaintiff also said that there were two staff members, both clerks, in his section. Those staff members were under his supervision as personnel manager and he was responsible for giving them instructions. The plaintiff also said that as personnel manager he was directly responsible to the general manager.

I have dealt with this part of the evidence in some detail because one of the crucial questions in this case is whether the plaintiff whilst personnel manager of the defendant was a "managerial personnel" in terms of the Labour and Employment Act 1972 and therefore the Act did not apply to him, or whether he was not a managerial personnel and therefore the Act applied to him. The answer to this question could have far reaching implications which extend beyond the facts of this case to employment in other companies and corporations in the private and semi-governmental sectors.

After consideration of this part of the evidence, I have decided that where the evidence of the plaintiff and that of the defendant's general manager are in conflict or inconsistent with one another, the evidence of the defendant's general manager is to be preferred. I have found the evidence of the defendant's general manager more satisfactory, candid and convincing. It is of better quality.

The plaintiff claims $20,085.39 for overtime hours he said he had worked for from 1996 to 2000 when he was the personnel manager for the defendant. Some of the overtimes claimed by the plaintiff were half an hour or just over half an hour. He said that he was not authorised by the general manager to work overtime and there is no evidence that he was authorised by anyone else to work overtime or that the general manager or someone else checked what work he was doing during the hours he claims to have worked overtime.

In terms of the defendant's policy, staff members or employees whose annual salaries were $10,000 or less were entitled to overtime pay if they work overtime. Staff members or employees with annual salaries above $10,000 were not entitled to overtime pay even if they work overtime. However, according to the general manager, when an employee who is entitled to overtime pay wants or has to work overtime, he must first obtain the approval of the head of his department. This must mean the manager of that department. It follows from this that an employee in the personnel and administration department who wants or has to work overtime must first obtain the approval of the personnel manager. Because the plaintiffs annual salary was $37,503, he was, in terms of the defendant's policy, not entitled to overtime pay. That was also the case with all department managers as their annual salaries were well over $10,000. It also appears from the plaintiff's evidence that he had not been entitled to overtime pay since he was appointed personnel officer in 1990 because his annual salary at that time exceeded $10,000. The plaintiff said he did not raise any objection to the defendant's overtime policy because he was not aware of the law on the matter. 

I will move on now to the termination of the plaintiff's employment by the defendant for the plaintiff is in effect saying that his termination was in breach of his contract of employment.

It appears from the evidence of the general manager that towards the end of the year 2000 there was a major police investigation into allegations of fraudulent activities against employees of the defendant company which involved theft of company properties. As a result, a number of the defendant's employees including senior employees were dismissed. I infer from the evidence that in October 2000, Ailole Uili, a former junior employee of the defendant, related to the general manager that he had taken a erate of coke underfilleds to a girl at Samoa Paints Ltd on instructions from the plaintiff. An underfilled means a bottle of beer or soft drink which has been filled but not up to the required level for sale to the public. At the material time there was a company rule that underfilleds could not be taken out of the defendant's premises and compound but staff members could consume them for free on the premises if they wanted to. Thus underfilleds were consumed by staff members during lunch or social functions of the defendant. Some underfilleds were simply poured down the drain. The general manager said this rule regarding underfilleds was known to the plaintiff and all staff members.

At the material time, the plaintiff was set to leave on 21 December 2000 to take his overseas leave in New Zealand. On the day before he left, the plaintiff was informed by the general manager about the allegation against him concerning the underfilleds. The general manager said he told the plaintiff to call him from New Zealand about the allegation if he wanted to, but the plaintiff did not. On Friday night, 21 January 2001, the plaintiff returned to Samoa. He was due back at work on 29 January. Before 29 January, he was served with a suspension notice dated 16 January 2001 stating the allegations on which the suspension was based. The suspension was indefinite and was to be effective on 29 January. The plaintiff went to see the general manager at the defendant's premises about the suspension notice. He discussed with the general manager the allegations against him as specified in the suspension notice. He denied those allegations to the general manager and requested the general manager to bring forward his accusers so they could talk about the allegations in his office. It appears that did not happen.

After that meeting, the next communication the plaintiff received from the general manager was a letter of 26 January 2001 in which the general manager elaborated on the reasons for the plaintiff's suspension and informing the plaintiff that the suspension of his service indefinitely still stands. Of the four reasons set out in that letter, only two were pursued during the trial. The first relates to the allegation concerning the underfilleds and the second relates to an allegation of a similar past incident the plaintiff was said to be aware of. I will return to these matters later. Twice the plaintiff tried to have another meeting with the general manager about his suspension notice but both attempts were unsuccessful. After that, the plaintiff wrote a letter dated 20 February 2001 to the general manager pointing out the great suffering, agony and distress brought on himself and his family because of his suspension which must then have been in its third week as it became effective from 29 January. The plaintiff also requested in that letter that a decision be made regarding his future employment with the defendant at the end of that week.

By letter dated 22 March 2001, the general manager advised counsel for the plaintiff that the plaintiff was dismissed from the defendant's employment effective from Friday, 23 March 2001. The same letter also indicates that before the decision to dismiss the plaintiff was made, witnesses had been interviewed by the defendant's solicitors and statements verifying the truth of the allegations against the plaintiff were obtained from those witnesses. The same letter further indicates that the general manager, in coming to the decision to terminate the plaintiff's employment, had taken into account the plaintiff's previous history of disciplinary action and the rebukes and warnings that had been issued against him. It is not entirely clear what is being referred to here, but I assume that it refers to an alleged incident in 1997 which I will deal with later. It is further said that as a senior employee, the plaintiff should have set the standards of conduct for other staff members to follow. It is then said that the plaintiff would be paid his full contractual entitlements and an amount equivalent to his salaries payable during the period of his suspension. This total amount came to $7,288.54 after deduction of what the plaintiff was owing the defendant company.

It is the contention of the plaintiff's counsel that the procedure adopted by the defendant in terminating the plaintiff's employment was in breach of the disciplinary procedure set out in the defendant's staff conditions of service which applied to the defendant's employees including the plaintiff. This is based on the plaintiff's evidence, confirmed by the general manager's evidence, that the defendant's staff conditions of service applied to the plaintiff. Counsel for the defendant in his written submissions argues that the staff conditions of service did not apply to the plaintiff. This is one of the crucial issues in this case that I will be dealing with later in some detail. But I will now turn to the grounds given by the defendant for terminating the plaintiff's employment.

As it appears from the evidence of the general manager, there were two grounds upon which he terminated the plaintiff's employment. The first relates to the allegation of the unauthorised taking of a crate of coke underfilleds from the defendant's premises on instructions by the plaintiff; the second relates to the allegation of unlawful taking by the plaintiff in 1997 of the defendant's bags of cement and vacuum cleaner from its house at Ululoloa where the defendant's former general manger had resided. The evidence given for the plaintiff and the evidence given for the defendant on both allegations were quite conflicting.

As to the allegation concerning the crate of coke unfilleds, the plaintiff testified that he had five crates of soft drinks underfilleds in his office when another employee of the defendant company by the name of Ailole came to his office and said the girl at the Samoa Paints Ltd wanted a crate of soft drinks. The plaintiff said he gave Ailole $20 for the lunch of the girl at Samoa Paints but Ailole urged him to give the crates of soft drinks in his office for the girl at Samoa Paints. He then said to Ailole no, the crates were for his office freezer. The plaintiff also said that Ailole replied to him not to worry about the general manager and the company security officers but to leave it to him to take the crates out of the company's compound. He again said to Ailole the crates of soft drinks underfilleds were for his office freezer. Ailole as it appears from the evidence was a junior employee and I would have thought that the short answer the plaintiff as personnel manager should have given Ailole was that do not do that, it is against the company's rule that no underfilleds can be taken out of the company's company. It would be recalled here that the general manager in his evidence said there was such a rule which was known to the plaintiff and all staff members. However, the plaintiff said Ailole came back shortly afterwards to do some photocopying either in his office or in the room right next to his office. The plaintiff then said he left his office for about twenty minutes to do some work at another part of the defendant's premises while Ailole was doing his photocopying. When he returned to his office a company security officer, who was on duty at the gate, came and asked him for a docket, that is a delivery note or receipt, to confirm payment of the crate of soft drinks underfilleds which had been taken out of the company's compound by Ailole. The plaintiff said he replied, what crate of soft drinks? The security officer answered, your crate of soft drinks taken out by Ailole. The plaintiff replied, I had no crate of soft drinks that Ailole should have taken out. To that the security responded, it is your crate of soft drinks because Ailole mentioned your name. The plaintiff said he then asked the company employee Suega who was in the office whether Ailole had removed a crate of soft drinks from his (the plaintiff's) office and Suega replied yes, Ailole had removed one crate from your office while you were absent. The plaintiff said he then went and paid $15 to the cashier for the crate of soft drinks but he could not remember who was the cashier he paid the money to. He then gave the receipt to the security officer. It is not clear who was this security officer or cashier as none of them was called by the plaintiff to give evidence. The defendant was also not able to call this security officer as it does not know who he was. As it will appear shortly from the evidence of the witness Ailole, he said when he took the crate of underfilleds through the gate, he did not tell the security officer on duty at the gate about it, and the security officer did not ask about it. So the security officer on duty at the time at the gate could not have known about Ailole taking out any crate of underfilleds.

Suega whose full name is Suega Fono was called as a witness by the plaintiff. He said he used to work as an administration clerk at the defendant company under the plaintiff but he has not been employed by the defendant company since 12 Novebmer 2001. This witness said that from the room where he was working at the defendant company, he could see people going into and coming out of the plaintiff's office. He recalls having seen Ailole entering the plaintiff's office and coming out with a crate of soft drinks underfilleds while the plaintiff was not in his office. When the plaintiff returned to his office he did not tell him about Ailole having taken a crate of underfilleds out of his office. It was only when a security officer came and asked the plaintiff for a receipt for the crate that had been removed and the plaintiff asked him about the crate that he told the plaintiff that Ailole had taken a crate of underfilleds from his office. This witness could not recall the name of the security officer who asked the plaintiff about a receipt for the crate of underfilleds.

Ailole whose full name is Ailole Uili was called as a witness by the defendant. He used to work for the defendant company but is no longer working there. He started with the defendant as an administration clerk while the plaintiff was personnel manager for the defendant. They worked in the same department. Ailole said when he was working under the plaintiff, he was instructed by the plaintiff to go and buy some cans of paints from Samoa Paints Ltd which he did and then brought the paint to the plaintiff's office. The plaintiff thanked him for the paints and said those girls, meaning the girls at Samoa Paints, are only for coca cola ("o teine la na ole coca cola lava"). Ailole said the plaintiff then said to him "ole mea lea e leo ai lou taga" (this is to guard your pocket) and then gave him $20. The plaintiff then instructed him to take a crate of coke underfilleds to the girls at Samoa Paints. Ailole also said that it was only the plaintiff and himself inside the plaintiff's office at that time; he could not recall whether the witness Suega was present nearby. He then put the crate of underfilleds in a vehicle and drove to the gate. He said he did not tell the security officer at the gate about the crate and the security officer did not ask about it. Later when the general manager questioned him about this matter, while the police were conducting an investigation into the affairs of the defendant company, he related to the general manager what had happened.

As it appears from the evidence that soft drinks underfilleds were not for sale to the public but could be consumed on the defendant's premises by staff members, there is no price placed on them. But if the plaintiffs evidence that he paid $15 to the cashier for the crate of underfilleds in question is anything to go by, then that must be an approximate value of that crate of underfilleds.

After careful consideration of this part of the evidence, I have no difficulty in rejecting the evidence of the plaintiff and the witness Suega. In fact when I heard this part of the evidence of the plaintiff and the witness Suega at the trial, it did not appear or sound credible. I am still of that view. On the other hand, the evidence of the witness Ailole appeared and sounded credible during the trial. Even though an attempt was made during cross-examination to discredit his character and credibility, he still maintained that it was the plaintiff who instructed him to take the crate of coke underfilleds to the girls at Samoa Paints.

The second allegation against the plaintiff was said to relate to an incident in 1997 where without authority he took a vacuum cleaner and bags of cement which were the properties of the defendant company. Apparently, the former general manager of the defendant company resided in a company house at Ululoloa. In 1997 he left the defendant's employment and the present general manager was appointed. The furnitures in the Ululoloa house were put up for sale.

Some of the furnitures were purchased by the plaintiff. Information was given to the present general manager that the plaintiff had not only removed from the Ululoloa house the furnitures he had purchased but had also without authority took the vacuum cleaner and the bags of cement that were at the house. The general manager in his evidence said he confronted the plaintiff with this allegation and the plaintiff strongly denied it. He nevertheless suspended the plaintiff without pay for five days which implies that he believed the information that was given to him and not the denial by the plaintiff. The general manager also said that he warned the plaintiff that if there was any repetition of that sort of misconduct that was it.

The evidence given by the witness Tavita Vaiouga who was called by the defendant on this part of the case was that he is a security officer for the defendant company and was at the material time engaged as one of the two security officers at the defendant's house at Ululoloa. The other security officer was Eli Poutou who no longer works for the defendant and was called as a witness by the plaintiff. According to the witness Tavita, at the material time he was on duty as security officer at the Ululoloa house from 4pm in the afternoon to 7am the following morning while Eli was on duty as security officer from 7am in the morning to 4pm in the afternoon.

Tavita said that on one day when he arrived at the Ululoloa house to change shifts with Eli, a company truck was there and the plaintiff with other company employees were loading onto the truck furnitures which had been purchased by the plaintiff. He saw two bags of cement and a vacuum also being loaded onto the truck. Tavita also said that on a later day the plaintiff instructed him when he went to the plaintiff's office on another matter that if the general manager asked him about the bags of cement and the vacuum cleaner, just say you do not know.

Apparently, the defendant company carried out an investigation into the bags of cement and vacuum cleaner that had gone missing from its Ululoloa house and Tavita being one of the securities who was on duty at that house was questioned by one of the defendant's senior employees. Tavita said he told that senior employee what the plaintiff had instructed him to say. However, when he was subsequently questioned by the general manager, Tavita said he felt that what he was doing was improper and therefore told the general manager what the plaintiff had instructed him to say if asked by the general manager and that the bags of cement and vacuum cleaner were taken by the plaintiff. It must have been after this that the general manager confronted the plaintiff with the missing bags of cement and vacuum cleaner and in spite of the strong denial by the plaintiff decided to suspend him without pay for five days.

Eli Poutoa, who was the other security on duty at the defendant's Ululoloa house at the material time but is no longer working for the defendant, was called as a witness by the plaintiff. This witness said he was on duty as security during the day from 8am to 4pm whereas the witness Tavita said he (Eli) was on day time duty from 7am to 4pm. This evidential difference is not significant for the purposes of this case.

According to Eli, while he was on duty at the defendant's Ululoloa house, the plaintiff and another defendant employee named Kapeneta came in a truck which was not a truck of the defendant. That was about 1pm in the afternoon. Eli said no one else was at the Ululoloa house at the time except himself. Even the witness Tavita was not there. The purpose for the plaintiff coming to the Ululoloa house was to pick up the furnitures he had purchased from the defendant. Those furnitures were loaded onto the truck. Even though there were bags of cement and a vacuum cleaner, these were placed together in the house and were not taken by the plaintiff. Eli said he also checked the load before the truck left and no bags of cement or vacuum cleaner was taken by the plaintiff.

It is clear from the cross-examination which followed that counsel for the defendant must have met with the witness Eli at some time before this witness gave evidence. This appears from the following passages of the cross-examination:

Q.	Would it be correct if I say that the reason we met was because you were to testify against Uaina Liki (plaintiff)?
A.	I have no answer.
Q.	Why do you have no answer?
A.	I do not know anything.
Q.	You do not know anything?
A.	No answer from the witness.
Q.	You said you checked the load?
A.	I looked at it and I went around the whole body of the truck.
Q.	How did you know that all those items of property were to be given to Uaina? Was a list given to you?
A.	No.
Q.	So if Uaina comes and takes anything, he would just take it?
A.	-
Q.	Uaina should have brought a list so that you know what can be removed.
A.	I have forgotten.

The witness Kapeneta Situe who was also called by the plaintiff used to work at the defendant company marketing its products and making sales orders. He left the defendant's employment in 2001. According to Kapeneta, he went with the plaintiff in a truck, which was not a truck of the defendant, to collect from the defendant's house at Ululoloa the furnitures which had been purchased by the plaintiff. That was between 12noon and 1pm. A list of the purchased items of property was with him and he accompanied the plaintiff to assist him with the carting (laūga) of his purchased properties. Kapeneta also said that the witness Tavita was not there when they arrived at Ululoloa. When the truck was loaded and when it left there was still no Tavita. He further said there were bags of cement inside the house and he knew of the vacuum cleaner, but no bag of cement or vacuum cleaner was loaded onto the truck and the witness Tavita was not right in saying that bags of cement and a vacuum cleaner were taken away. Under cross-examination, Kapeneta could not remember the year or when the former general manager left because he said it was a long time ago.

The witness Sala Silva, the managing director of Silva Transport Ltd was also called by the plaintiff. His evidence was that about February 1997 the plaintiff came to him to hire a truck to carry a load from Ululoloa to Vaivase-uta, where the plaintiff resides. A truck was lent to the plaintiff.

I have given careful consideration to this part of the evidence and I prefer the evidence of the witness Tavita Vaiouga that the plaintiff did take two bags of cement and a vacuum cleaner from the defendant's house at Ululoloa as opposed to the evidence of the witness Eli Poutoa and Kapeneta Situe to the contrary. With respect, the witness Eli did not impress me as a credible witness. His answers under cross-examination, indicated to me that he was not being totally candid and forthcoming about what actually happened. I also do not accept the evidence by the witness Kapeneta that no bags of cement or vacuum cleaner were taken by the plaintiff. There are conflicts of course in the evidence. But on the central issue whether the plaintiff took bags of cement and a vacuum cleaner from the defendant's house at Ululoloa, I prefer the evidence of the witness Tavita. In saying this I have not overlooked that when the plaintiff was confronted in 1997 with this matter by the general manager he denied it.

I turn now to the legal issues in this case.

Was the plaintiff a managerial personnel in terms of the Labour and Employment Act 1972

As earlier mentioned, the question of whether or not the plaintiff was a "managerial personnel" in terms of the Labour and Employment Act 1972 whilst he was the personnel manager of the defendant company could have far reaching implications which extend beyond the facts of this case to similar positions in other companies, corporations and similar employers in the private and semi-governmental sectors. Its immediate relevance to this case, as both counsel recognised, is that if the plaintiff was a managerial personnel then the Labour and Employment Act 1972 and its provisions on overtime did not apply to him. But if the plaintiff was not a managerial personnel but just a "worker," then the Act and its provisions on overtime did apply to him. I think this question, as it will appear later on, is also very relevant to the issue of whether or not the defendant's staff conditions of service formed part of the plaintiff's contract of employment with the defendant and therefore applied to the plaintiff.

Section 2 of the Act defines the term worker as:

"'Worker' means any person who has entered into or works under a contract with an employer, whether the contract be for manual labour, clerical work or otherwise and whether it be a contract of service or apprenticeship or a contract personally to execute work but does not include any managerial personnel." (italics mine)

It is clear that managerial personnel are excluded from the definition of worker. The Act, however, does not define what is meant by managerial personnel and there is no other reference to that expression in the Act. It therefore falls to the Court to define what is meant by managerial personnel and to determine whether in a given case a particular individual comes within the meaning of the expression. As the Act applies only to workers and managerial personnel are excluded from the definition of worker, it follows that the Act does not apply to managerial personnel.

It should also be mentioned that s.3 of the Act excludes certain services from the application of the Act. These services are: (a) "service of Samoa" as that expression is defined in Article 111 of the Constitution, (b) service rendered to a matai under the aiga system, and (c) any service or class of service exempted by order of the Minister published in the Samoa Gazette and the Savali newspaper. The plaintiff does not come within any of those services and there was no argument that he does.

In Brighouse v National Bank of Samoa (2004) (unreported judgment of the Supreme Court delivered on 27 January 2004), I held that the plaintiff in that case who was the manager finance and administration in the defendant bank was a managerial personnel and therefore excluded from the definition of worker in the Labour and Employment Act 1972. Consequently the termination provisions of the Act which apply only to workers did not apply to him. There has been no other Samoan case where it has been necessary for the Court to determine whether an employee was a managerial personnel.

During my research for this case, I was not able to find any English, Australian or New Zealand labour or employment statute where the expression "managerial personnel" is used or any case where it has been discussed. It is in the Canadian province of Ontario where the similar expression "managerial functions" is used in its Labour Relations Act 1995. Sub-section 1 (3)(b) of that Act provides:

"1(3) Subject to section 97, for the purposes of this Act, no person shall be deemed to be an employee,

(a)…………

(b) who, in the opinion of the Board, exercises managerial functions or is employed in a confidential capacity in matters relating to labour relations."

That provision has been discussed in some of the decisions of the Ontario Labour Relations Board where the meaning of the expression managerial functions was in issue. This issue often arose in cases of disputes between an employer and a trade union. The approach adopted there is not to attempt an all-embracing definition of the expression managerial functions but to determine on a case by case basis the criteria which are relevant for determining whether the functions exercised by an employee in a given case are of a managerial nature. If it is so determined, then the employee is deemed for the purposes of the Act not to be an "employee." So over the years the Ontario Labour Relations Board has evolved criteria for determining whether the functions performed by an employee in a given case are of a managerial nature. There is wisdom in this case by case approach rather than to try and provide an exhaustive definition all at once, for it is not possible to foresee the circumstances of every case that will come up in the future. Samoan employment law is still in a state of development. Having said that, caution needs to be exercised when considering Ontario decisions for those decisions are made in a different socio-economic environment and in the context of trade unionism and collective bargaining.

In Eva's Initiatives for Homeless Youth v Union of Public employees Local (2004) (decision delivered on 12 July 2004), the Ontario Labour Relations Board said:

"[The] onus for excluding a person from the definition of employee, and therefore from the operation of the Act, is on the party seeking the exclusion."

Further on it is said:

"The Board has recognized two categories of employees who exercise managerial functions: 1. those who make decisions regarding the overall operation and direction of the organization, and 2. those who affect the terms and conditions of employment of employees in the bargaining unit."

The Board then goes on to say:

"Different considerations apply to persons who can be characterized as having a direct effect on the employment relationship or the terms and conditions of employment of others employed by an organization. To determine whether such persons exercise managerial functions, the Board considers whether they exercise effective control and authority over employees, either through direct contract with the employees or as a result of their decisions.

In making this determination, the Board looks to whether the person has the authority to make effective recommendations relating to critical conditions of employment, such as: hiring, firing, discipline, performance evaluation, participation in the grievance procedure; as well as approving time off and assigning overtime work.

An 'effective recommendation' is a 'serious recommendation that the evidence demonstrates is usually acted upon, and therefore a recommendation that materially affects the economic lives of employees' (see McIntyre Porcupine Mines Ltd [1975] OLRB Apr at 289).

The issue of whether an individual has the authority to make effective recommendations is, therefore, only significant to the extent that those recommendations relate to conditions of employment or labour relations, as opposed to recommendations that relate to matters of policy or the operation of the business.

In determining whether an individual exercises 'managerial functions,' the Board must determine whether that individual has effective control over the employment relationship of others. An individual may occupy a supervisory position, yet still be an employee for the purposes of the Act, unless the above functions are either directly exercised by the individual, or the individual, as a prime function of his or her job, makes recommendations that have a serious impact on the employment of others and that are almost always acted upon (See Etobicoke Hydro-Electric Commission [1991] OLRB Rep. Jan. 38.

Also, in making this determination, the Board has regard to the nature of the industry, the particular enterprise and the employer's organizational scheme. See York University [1994] OLRB Rep. January 96."

In determining that the two individuals involved in that case were performing managerial functions and therefore were not employees for the purposes of the Labour Relations Act 1995, the Ontario Labour Relations Board went on to say:

"In Ms Abram's situation, it is apparent that she has the authority to hire, as she led the hiring process for the position of Family Support Worker, and her preference resulted in Mr Berry being hired, over the preferences of Mr Kappele, the General Manager. It was also not contested that Ms Abrams conducts regular supervisory meetings with Mr Berry to oversee his work, as well as conducts his performance appraisals and address performance issues as needed.

In addition, Ms Abrams approves Mr Berry's work schedule, his time sheets, his expenses and requests for time off.

Finally, as a member of the Site Management Team, and attendee of the Program Managers and Supervisors Meetings, the Board finds that Ms Abrams has material involvement in matters relating to labour relations, including discussion of personnel issues, so as to meet the requirement that the consistent exposure to such confidential information constitutes an integral part of Ms Abrams service…..

The Board finds that Ms Abrams supervision of Mr Berry, as well as her attendance and attendance in meetings exclusive to management, where confidential labour relations issues are discussed and decided, demonstrate that she exercises managerial functions as contemplated in s.1(3)(b) of the Act."

Ms Abrams mentioned in the above passages was a supervisor. The next applicant Ms Tyrell was a manager of partnership development. In respect of Ms Tyrell, the Board said:

"Similarly, the Board finds Ms Tyrell conducted regular supervision of Mr MacDonald, Mr Jones, and Ms Shillingford, to oversee and direct their work, and conducted performance appraisals for both Mr MacDonald and Mr Jones.

In addition Ms Tyrell approved Mr MacDonald's, Mr Jones, and Ms Shillingford's timesheets; approved a salary increase for Mr MacDonald; and approved Mr Jone's requests for time off, as well as both Mr Shillingford's vacation requests. Ms Tyrell also had authority to approve Ms Shillingfords as well as Mr Jone's expenses.

Finally, as one of the Agency's Program and Services Managers, Ms Tyrell attended meetings that were exclusively for management and in that capacity had material involvement in matters relating to labour relations, including discussion of personnel issues, issues arising from employee grievances, and collective bargaining matters, so as to meet the requirements that the consistent exposure to such confidential information constitute an integral part of Ms Tyrell's service….

The Board finds that Ms Tyrell's supervision of Mr MacDonald, Mr Jones and Ms Shillingford, as well as her attendance and participation in meetings exclusive to management, where confidential labour relations issues are discussed and decided, demonstrate that she exercises managerial functions as contemplated in s.1(3)(b) of the Act."

I may have cited from Eva's case more than necessary, but, as earlier mentioned, I am conscious of the fact that the decision on the question of whether the plaintiff is a managerial personnel in terms of the Labour and Employment Act 1972 could have far reaching implications which extend beyond the facts of this case to other companies and corporations in the private and semi-governmental sectors. It will also have an important bearing on the administration of the Act. Whilst what is said in Eva's case provides helpful and useful criteria for determining whether an employee exercises managerial functions, I hope it will not be treated as an exhaustive statement of such criteria because that is not what Eva's case intended to provide.

The defendant in the present case is a large brewery, the largest in Samoa. It has six departments or units. Each department has its own department head. When the plaintiff was in the employment of the defendant he was the head of the personnel and administration department. His designation was personnel manager. Each department head was directly responsible to the general manager. Even though the general manager had the overall general management of the defendant company, each department head was responsible for the daily management of the affairs of his department which means the plaintiff was responsible for the daily management of the affairs of the personnel and administration department. This is the organizational set-up of the defendant company. Given the size of the defendant company and the extent of its operations, it would be clearly impossible for the general manager to take over on his own the actual daily management of the affairs of all the departments of the company and its extensive operations.

As personnel manager, the plaintiff was responsible for the supervision of the staff of the personnel and administration department which at the time of his termination, according to the general manager, consisted of five staff members including himself. His duties also included liaising with department managers on staff requirements and with employees on their day to day requirements. Any staff member of the personnel and administration department who was to work overtime required the prior approval of the plaintiff before he could do so. 

Even though the plaintiff did not have authority to hire and fire, the evidence shows that the plaintiff as personnel manager recommended the filling up of vacant positions in the defendant company, put out the advertisements for a position to be filled and conducted the interviews. In respect of applications for positions in his department, the plaintiff himself, carried out the interviews whereas with positions in other departments the head of that department and the plaintiff both carried out the interviews. The reason for the plaintiff's participation in those interviews, according to the general manager, was because he was supposed to know more about personnel matters. Recommendations for appointment were then made to the general manager, but according to the general manager even though the power of hire and fire is vested in him, in practice he and the plaintiff as personnel manager would have to agree that a particular applicant is the right candidate to fill a position. I infer from this part of the evidence that recommendations made by the plaintiff for appointments to positions in the defendant company were often, if not always, approved by the general manager. Thus the plaintiff clearly had a material and active involvement in the appointment process. The general manager also said that if the plaintiff and a department head decide not to make a recommendation for appointment after an interview, that was the end of the matter, it never had to come to him. And when an appointment was to be made, the head of the department where the appointment would be made, the personnel manger, the finance manager and the general manager all sign the appointment form. With dismissals of non-managerial personnel, the department head would make a report to the general manager setting out the allegations against the staff member concerned of his department. The evidence by the general manager that the plaintiff was involved with the dismissal of other employees for offences, suggests that the reports prepared by the plaintiff recommending the dismissal of employees were often, if not always, approved and acted upon by the general manager.

Even though there was no specific evidence that the plaintiff attended meetings of management in which personnel issues were discussed and decided, it is a safe assumption, based on the evidence, that the plaintiff as personnel manager attended such meetings and had a vital say on personnel issues concerning the staff of the defendant company. As the general manager also testified, the plaintiff was a member of the defendant's senior management team.

Given that the plaintiff was head of the defendant company's personnel and administration department and he was the supervisor of the staff in that department, that his prior approval was required for any staff member in his department to work overtime, his material and active involvement in the appointment and dismissal process of staff members, his involvement in personnel issues in general, and his being a member of the senior management team, I have come to the conclusion that the functions which were performed by the plaintiff were managerial. The performance of those functions had a serious impact on the conditions of employment of other staff members. Thus the plaintiff was exercising effective control and authority over the terms and conditions of employment of other staff members. Consequently, I conclude that the plaintiff was a managerial personnel in terms of the Act. He was therefore excluded from the definition of worker. It follows that he was also excluded from the application of the Act.

Counsel for the plaintiff in support of his contention that the plaintiff was not a managerial personnel cited the case of Gibson v Barton (1875) L.R.10 QB. 329 where Blackburn J in dealing with the definition of "manager" under the Companies Act 1862 (UK) held that:

"A manager, in ordinary talk, is a person who has the management of the whole affairs of the company, not an agent who is to do a particular thing, or a servant who is to obey orders, but a person who is instructed with power to transact the whole affairs of the company."

Counsel for the plaintiff then submitted that the plaintiff was only looking after a particular aspect of the defendant's business operation and was not in control of the whole affairs of the defendant. The plaintiff was also subject to the discretions vested in the general manager of the defendant and he had no power to hire and fire for such powers were vested in the general manager.

Gibson's case is clearly distinguishable from this case. It dealt with the meaning of the word "manager" under a companies legislation which was not an employment legislation. It also did not deal with the meaning of the term "managerial" or the expression "managerial personnel" Gibson's case was also a nineteenth century case dealing with a nineteenth century companies legislation. The organization and structure of major modern day companies must be quite different from what companies must have been in the nineteenth century because of changed circumstances. In Samoa, departments or sections have been set up in major companies, like the defendant company, to handle a particular aspect or particular aspects of the affairs of the company. Each department or section of such a company is headed by a manager or a similarly designated employee to be responsible for the day to day management and supervision of each such department or section. Such department manager is usually responsible directly to a general manager who has the overall general responsibility for the management of the company. But it will not be practical for any one person, such as the modern day company general manager, to be actually in full and active control of all the affairs of a major modern day company, like the defendant company, on a day to day basis. Gibson's case is therefore distinguishable from this case. I have also shown that having the power to hire and fire is not the only manifestation of managerial authority which could bring an individual within the meaning of "managerial personnel" as that expression is used in the Labour and Employment Act 1972. Eva's case shows that having the authority to make effective recommendations regarding the hiring and firing of other employees, is one of the relevant criteria for determining whether a particular individual was exercising managerial functions. There are also other relevant criteria. And the entirety of the functions exercised by an individual has to be looked at and whether the exercise of those functions have a serious impact on the conditions of employment of other employees and on the employer and employee relationship.

Plaintiff's claim for overtime pay under the Labour and Employment Act 1972.

With regard to overtime, the policy by the defendant company was that workers or employees whose annual salaries were more than $10,000 were not entitled to overtime pay whereas those workers or employers with annual salaries below $10,000 were entitled to overtime pay if they work overtime. As the plaintiff was paid an annual salary of about $35,000 when he was working as the defendant's personnel manager, he was not entitled to overtime pay.

The plaintiff is now claiming overtime pay under s.29 of the Act for the hours he said he had worked overtime for from 1996 to 2000 when he was working as personnel manager for the defendant. As the plaintiff was at the relevant period of time a managerial personnel, he was therefore excluded from the definition of worker. Accordingly, the Act, and in particular s.29 thereof which provides for overtime pay for workers, did not apply to him. The plaintiff's claim for overtime pay therefore fails.

There are also other difficulties with the plaintiff's claim for overtime pay. The defendant's general manager had testified that when the plaintiff was personnel manager for the defendant company, he had never requested him to work overtime. So he had never approved of the plaintiff working overtime. Furthermore, the time sheets produced by the plaintiffs to support his overtime claim were time sheets filled in and kept by the defendant's securities at the entrance gate to its compound to record the times staff members entered and left the compound through the gate. These time sheets were not filled in and kept for the purpose of assessing any overtime work or overtime pay. The time sheets show only the times the plaintiff entered the defendant's compound through the front gate and left the defendant's compound through the same gate. They do not show what the plaintiff was doing inside the defendant's compound or whether he was actually working overtime. I therefore attach little weight to these documents as supporting proof of the overtime claim. Some of the overtimes claimed are for about half an hour. I am not satisfied to the required standard of proof that the plaintiff was actually working during all those half hours or so.

Did the defendant's staff conditions of service apply to the plaintiff

One of the crucial questions in this case is whether the defendant company's printed staff conditions of service applied to the plaintiff and formed part of his contract of employment. In his evidence, the plaintiff said that the defendant's staff conditions of service and in particular condition 18 thereof, which provides the disciplinary procedure to be followed when an offence is alleged against an employee, applied to him. Under cross-examination, the general manager also said that the defendant's staff conditions of service and clause 18 thereof applied to the plaintiff. For some reason, counsel for the defendant did not cross-examine the plaintiff or re-examine the general manager on these parts of their evidence even though in his written submissions he has argued that the staff conditions of service did not apply to the plaintiff. Counsel for the plaintiff has submitted to the contrary.

I am of the view that as a matter of law and fact, the staff conditions of service did not apply to the plaintiff as personnel manager. Clause 2 provides that the engagement of the staff of the defendant company should be done in accordance with the provisions of the Labour and Employment Act 1972. I have decided that as personnel manager, the plaintiff was excluded from the definition of worker so that the Act did not apply to him. It is clear that the intention of the legislature when enacting the Labour and Employment Act 1972 was to exclude managerial personnel and the services specified in s.3 from the application of Act. So to provide in a contract of service or employment that the provisions of the Act apply to a managerial personnel or to any of the services excluded under s.3, would be contrary to the Act and in terms of s.20 it would be unlawful. Section 20 provides:

"Any term of a contract of service which contravenes the provisions of this Act shall be deemed to be unlawful and shall have no effect."

Section 41(1) then provides:

"An employer who enters into a contract of service contrary to any of the provisions of this act shall be guilty of an offence, and on conviction shall be liable to a fine not exceeding $500."

Thus the defendant's staff conditions of service could not have applied to the plaintiff. It also appears that they were not intended to apply to the plaintiff as personnel manager and head of the personnel and administration department. Clause 18 which provides for the standards and disciplinary procedure to be adopted and followed where an offence was alleged against an employee further provides in sub-clause 1 that where an offence is alleged against an employee, a letter of query setting out the allegations shall be sent to the employee requesting him to provide a written explanation. The general manager and "the relevant head of department" shall then meet to consider any written explanation and any other relevant material. If requested by the employee or considered necessary by the general manager and "the head of department," the employee would be given the opportunity to offer further explanations and witnesses may be heard. The evidence is then considered and a decision as to innocence or guilty is made. Sanctions are then decided and conveyed in writing to the employee. As the plaintiff was a department manager and head of the personnel and administration department, it is clear that the disciplinary procedure provided in sub-clause 18(1) was not intended to apply to him when an offence was alleged against him. Clearly sub-clause 18(1) did not apply to the plaintiff as personnel manager.

Other provisions of the conditions of service which show that they were not intended to apply to the plaintiff are sub-clauses 3.2., 7.1 and those provisions which refer to "management." The general manager, as earlier mentioned, had testified that the plaintiff was a member of the defendant's senior management team. Sub-clause 3.2 provides that employee must inform the "personnel officer" of any change of address and other relevant employment information. The position of personnel officer as the plaintiff said in evidence was later changed to personnel manager. Sub-clause 7.1 provides that all absences from work by employees shall be recorded by "the head of personnel." 

Thus notwithstanding what the plaintiff and the general manager had said in evidence, it is clear that the defendant's staff conditions of service were not intended to apply to the general manager and heads of departments which included the plaintiff as personnel manager and therefore did not form part of his contract of employment. Those conditions of service undoubtedly applied to the plaintiff when he was a junior member of the staff of the defendant company, but not when he became personnel manager. I think the plaintiff and the general manager were confused when they said the staff conditions of service applied to the plaintiff, because whilst those conditions of service applied to the plaintiff before, they did not apply to him later when he became personnel manager.

Plaintiff's claim for unfair dismissal

The plaintiff testified that when his employment was terminated by the general manager, the latter did not follow the disciplinary procedure and standards provided in clause 18 of the staff conditions of service. This was confirmed by the general manager in his evidence. The plaintiff has therefore claimed that his dismissal was unfair. I have, however, decided that the defendant's staff conditions of service did not apply to the plaintiff as personnel manager. So the factual basis of the claim for unfair dismissal has disappeared. But because this claim formed a major part of the plaintiff's case, I will say something more about unfair dismissal.

As earlier mentioned, unfair dismissal is a statutory concept that was introduced into English employment law by the Industrial Relations Act 1971 (UK). The relevant provisions of that Act are now contained in Part X of the Employment Rights Act 1996 (UK). A passage was cited from The Law of Unfair Dismissal (1985) 2nd edition by SD Anderman, which is an English text, in support of the plaintiff's claim. But that book was written on the statutory concept of unfair dismissal introduced by the Industrial Relations Act 1971 (UK). As earlier pointed out, similar concepts as unjustified dismissal in New Zealand and harsh, unjust and unreasonable dismissal in Australia are also statutory concepts introduced by statute in those countries. Samoa has had no such statute. We are still applying the common law concept of wrongful dismissal. I have also noticed from some of the English cases, that the English statutes which have introduced and continuing to provide for unfair dismissal, provide a fixed maximum sum which can be imposed on an employer found liable for unfair dismissal. Damages are not at large. Likewise, the Australian statute on the concept of harsh, unjust or unreasonable dismissal provides for a fixed penalty which can be imposed in the case of a harsh, unjust or unreasonable dismissal, see Byrne v Australian Airlines Ltd (1995) 185 CLR 410. Damages are not at large.

Reliance was placed by the plaintiff on Motoi and Vaomua v Western Samoa National Provident Fund [1980 – 1993] WSLR 333 where general damages for unfair dismissal were awarded in favour of the plaintiff employees against the defendant employer even though there was no provision in the contract of employment setting out any disciplinary procedures to be followed in the event of a dismissal or any finding that there was an implied term of the contract of employment which required the employer to act fairly before dismissing an employee. What happened was that it was held that employees should have the rights which are set out in legislations in other jurisdictions and then it was further held that the plaintiff employees had been unfairly dismissed and general damages were awarded for unfair dismissal. There are real difficulties with this approach.

In the first place United Kingdom statutes are not available in Samoa so that it will be difficult to know what rights regarding unfair dismissal are provided by the relevant United Kingdom statutes. There must also be only very few, if any, Australian statutes available in Samoa. Likewise New Zealand statutes. In this important area of the law, for anyone to tell employers and employees that they have the same employment rights as provided in statutes in other jurisdictions when they have no access to such statutes is of no assistance to them. Furthermore, the way the common law has developed in New Zealand and lately in the United Kingdom with regard to the development of fair procedures in employment law, has been done through the development of contractual implied terms. The relevant New Zealand decisions are mentioned in Brighouse v National Bank of Samoa (2003) (unreported judgment delivered on 27 January 2004). A recent English case where a similar development has been mentioned is Mahmued v Bank of Credit [1997] 3 A11 ER 1 where the implied obligation of trust and confidence to a contract of employment was recognised in the House of Lords in the judgments of Lord Nicholls and Lord Steyn. I would prefer this approach. To construct a common law action for unfair dismissal out of scratch without reference to the contract of employment is a task none of the major common law jurisdictions I have mentioned has done except by statute. If Samoan common law is to develop fair procedures in relation to the prospective termination of an employee's service, this should be done, in my view, by developing implied terms or implied obligations to the contract of employment. Failure to comply with such contractual implied terms or obligations will be a breach of the contract of employment just as a breach of an express contractual term will have the same effect. If the breach of contract arises from the dismissal of an employee by an employer, then a common law action for wrongful dismissal based on the breach of the contract of employment can be brought by the employee. The action will not be a common law action for unfair dismissal for such an action was not known to the common law. The position will be different when there is a Samoan statute on unfair dismissal. The action will then be for unfair dismissal based on the statute.

Another issue which arose out of Motoi and Vaomua and was relied upon in the plaintiff's action for unfair dismissal is that the Court in that case held that employees should have the rights set out in legislations in other jurisdictions and are not excluded by s.40 of the Labour and Employment Act 1972. It was therefore submitted that s.40 of the Act does not preclude an action for unfair dismissal. With respect, s.40 is not relevant to an action for unfair dismissal. Section 40 provides:

"Nothing in this Act shall operate to prevent any employee or worker from enforcing their respective civil rights and remedies for any breach or non-performance of a contract of service by way of civil proceedings."

An action for unfair dismissal relates to non-compliance with fair procedures in a disciplinary employment situation. If such procedures are provided by statute, then the proper action is for unfair dismissal. But if the procedures which have not been followed are provided in the contract of employment, then non-compliance with those procedures will be a breach of contract and the proper action to bring is a common law action for wrongful dismissal based on the breach of the contract of employment. So it will be seen that an action for unfair dismissal does not depend on the existence of a contract of employment but on statute. Thus s.40 of the Act which preserves an employer's or a worker's rights and remedies for breach of a contract of employment does not apply to an action for unfair dismissal which is non-contractual. If this distinction between unfair dismissal and wrongful dismissal is borne in mind, it will avoid confusion creeping into Samoan employment law at this stage of its development.

It could have been argued, as it was in fact submitted for the plaintiff, that clause 18 of the defendant's staff conditions applied to the plaintiff and formed part of his contract of employment. The failure of the defendant through its general manager to follow the disciplinary procedure set out in clause 18 when he dismissed the plaintiff was a breach of a term of the contract of employment. The plaintiff would then bring his action as a common law action for wrongful dismissal based on the breach of the contract of employment and not as an action for unfair dismissal which is a statutory concept. It will not be necessary to refer to s.40 of the Act because the plaintiff, being a managerial personnel, the Act did not apply to him. But even if the Act had been held to apply to the plaintiff, he would still have been able to bring his common law action for wrongful dismissal based on the breach of his contract of employment because s.40 preserves his rights and remedies for breach of contract.

In Keil v Polynesian Airlines Ltd [1980 – 1993] WSLR 395 which was concerned with the dismissal of an employee by his employer, the Court of Appeal comprising of Ryan CJ, Dillon and Martin JJ held at p.399 that the principles of natural justice have no application to a pure master and servant relationship. An employer was entitled to rely on the strict terms of the contract of employment and once it had done so, it had fulfilled its contractual obligations. The Court in that case did not, however, hold that if fair procedures are provided in a contract of employment to be followed in a disciplinary situation when it arises, those procedures can be ignored by an employer. In my view, if a contract of employment provides for the procedure to be applied to a disciplinary situation when it arises, then such a provision is binding on the parties to the contract like any other contractual provision. If, therefore, an employer commits a breach by not applying the disciplinary procedure that is provided in the contract when terminating the employment of an employee, the employee may bring an action for wrongful dismissal based on the breach of the contract of employment. Such an action, as mentioned earlier, will not be one for unfair dismissal.

The plaintiff's claim for unfair dismissal is dismissed.

Related comments

Before leaving the plaintiff's claim for unfair dismissal and moving on to the next part of his case, there are some comments that I wish to make. Even though the plaintiff and the defendant's general manager had both said in their evidence that the defendant's staff conditions of service applied to the plaintiff, I have explained why those conditions of service did not apply to the plaintiff as personnel manager and head of the personnel and administration department. Those conditions of service must have applied to the plaintiff and formed an integral part of his contract of service when he was a junior employee for the defendant. But when he became personnel manager, the staff conditions of service as they stand ceased to apply to him or form part of his contract of employment.

Furthermore, it was not pleaded or argued for the plaintiff that if the staff conditions of service did not apply to him, then there was some other contract for him which incorporated a similar procedure to the procedure set out in clause 18 of the staff conditions of service. The plaintiff's case did not proceed on that basis and there was no evidence adduced along those lines. Thus the defendant did not respond in its defence on such basis. And I have not had to decide such an issue.

Secondly, the case for the plaintiff did not proceed on the basis that even if the express provisions of the staff conditions of service did not apply to him as personnel manager, there was an implied term of his contract of employment which required the defendant employer to act fairly when a disciplinary situation arises with regard to him. No such implied term was pleaded and the matter was not raised. So the defendant did not have to respond in its defence to such matter. And I have not had to decide such a matter. May be counsel for the plaintiff had in mind what the Court of Appeal said in Keil v Polynesian Airlines Ltd [1980 – 1993] WSLR 395 that the principles of natural justice have no application in a pure master and servant relationship. But as I have said, if there is a term of the contract of employment which requires an employer to act fairly when deciding whether or not to dismiss an employee, then I do not think the Court of Appeal in Keil intended its judgment to apply to such a case. At least the Court of Appeal did not say so.

Negligence

One of the claims by the plaintiff was brought in negligence. It was alleged that the defendant owed the plaintiff a duty of care to abide by the requirements of clause 18 of the staff conditions of service and the defendant was in breach of that duty in the way it handled the allegation against the plaintiff. As I have held that the staff conditions of service including clause 18 did not apply to the plaintiff as personnel manager, the factual basis of this claim has already disappeared.

The other difficulty with the plaintiff's claim in negligence is that damages is an essential element of a cause of action in negligence. Not only must there be a duty of care in existence and a breach of that duty, but damages must result from the breach. If it is assumed for the sake of argument that a duty of care existed and the defendant was in breach of that duty by not complying with the procedure set out in clause 18, then, apart from the suspension, the question is what loss did the plaintiff suffer as a result of that breach. The answer is there was none. The loss, if any, arose from the dismissal, not from what occurred before the dismissal. And if the pre-dismissal suspension was caused by any negligence of the defendant, the general manager said that the plaintiff had been paid his salaries for the period he was under suspension. So any loss in that regard has been paid.

For these reasons, the claim in negligence is dismissed.

Summary dismissal

Summary dismissal is a common law remedy in the hands of an employer by which he can instantly dismiss an employee without warning. If the summary dismissal was with just cause then it was justified. If it was without just cause, then it was unjustified. A summary dismissal without just cause is a form of wrongful dismissal. It can therefore be the basis of a cause of action in a common law action for wrongful dismissal. It is not unfair dismissal. As stated, for example, in The Law of Employment (1997) by Macken, McCarry and Sappideen 4th edition at p294.

"Dismissal will be wrongful and in breach of contract where the employee is not given notice of sufficient length to lawfully terminate the contract or has been summarily dismissed for misconduct in circumstances which do no warrant summary dismissal, or is constructively dismissed by the employer. Wrongful dismissal will also occur where the employer fails to follow contractual procedures required prior to dismissal." (italics mine)

As to the requirements for summary dismissal, counsel for the plaintiff cited two English cases often referred to in this area of employment law. In the first of those cases, namely, Clouston & Co v Cory [1906] AC 122, which was a decision of the Privy Council, Lord James of Hereford stated at p129:

"Now the sufficiency of the justification depended upon the extent of the misconduct.

There is no fixed rule of law defining the degree of misconduct which will justify dismissal. Of course there may be misconduct in a servant which will not justify the determination of the contract of service by one of the parties to it against the will of the other. On the other hand misconduct inconsistent with the fulfilment of the express or implied conditions of service will justify dismissal."

Later in Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 2 A11 ER 285, Lord Evershed MR stated at p287:

"[Since] a contract of service is but an example of contracts in general, so that the general law of contract will be applicable, it follows that, if summary dismissal is claimed to be justifiable, the question must be whether the conduct complained of is such as to show the servant to have disregarded the essential conditions of the contract of service."

In the recent case of McKinley v British Columbia Telephone Company [2001] 2 S.C.R. 161, Iacobucci J in delivering the judgment of the Supreme Court of Canada discussed the two English cases just referred to and a number of Canadian cases on summary dismissal and then said at pp187 - 188:

"In light of the foregoing analysis, I am of the view that whether an employer is justified in dismissing an employee on the grounds of dishonesty is a question that requires an assessment of the context of the alleged conduct. More specifically, the test is whether the employee's dishonesty gave rise to a breakdown in the employment relationship. This test can be expressed in different ways. One could say, for example, that just cause for dismissal exists where the dishonesty violates an essential condition of the employment contract, breaches the faith inherent to the work relationship, or is fundamentally or directly inconsistent with the employee's obligations to his or her employer.

In accordance with this test, a trial Judge must instruct the jury to determine: (1) whether the evidence established the employee's deceitful conduct on a balance of probabilities; and (2) if so, whether the nature and degree of the dishonesty warranted dismissal. In my view, the second branch of this test does not blend questions of fact and law. Rather, assessing the seriousness of the misconduct requires the facts established at the trial to be "carefully balanced. As such it is a factual inquiry for the jury to undertake.

……………..

"This being the case, I conclude that a contextual approach to assessing whether an employee's dishonesty provides just cause for dismissal emerges from the case law on point. In certain contexts, applying this approach might lead to a strict outcome. Where theft, misappropriation or serious fraud is found, the decisions considered here establish that cause for termination exists. This is consistent with this Court's reasoning in Lake Ontario Portland Cement Co v Groner [1961] S.C.R. 553, where this Court found that cause for dismissal on the basis of dishonesty where an employee acts fraudulently with respect to his employer. This principle necessarily rests on an examination of the nature and circumstances of the misconduct. Absent such an analysis, it would be impossible for a Court to conclude that the dishonesty was severely fraudulent in nature and thus, that it sufficed to justify dismissal without notice.

This is not to say that there cannot be lesser sanctions for less serious types of misconduct. For example, an employer may be justified in docking an employee's pay for any loss incurred by a minor misuse of company party. This is one of several disciplinary measures an employer may take in these circumstances."

Further on, Iacobucci J said at p190:

"Based on the foregoing considerations, I favour an analytical framework that examines each case on its own particular facts and circumstances, and considers the nature and seriousness of the dishonesty in order to assess whether it is reconcilable with sustaining the employment relationship. Such an approach mitigates the possibility that an employee will be unduly punished by the strict application of an unequivocal rule that equates all forms of dishonest behaviour with just cause for dismissal. At the same, it would properly emphasize that dishonesty going to the care of the employment relationship carries the potential to warrant dismissal for just cause."

The case law also shows that while a single act of minor misconduct may not on its own provide sufficient just cause to justify summary dismissal, a series of such acts may provide sufficient cause. On the other hand, a single act of misconduct which is sufficiently serious may justify summary dismissal. It is a question of fact in each case, depending on the nature of the misconduct and the circumstances surrounding its occurrence.

As to onus of proof in a summary dismissal case, it is for the plaintiff employee to establish that he was employed for an indefinite time and that he was dismissed without notice. The onus will then shift to the defendant employer to prove that the dismissal was with just cause and therefore justified: McKinley at p182.

On the question of whether the plaintiffs summary dismissal which he claims was without just cause, the evidence shows that in terminating the plaintiff's employment, the general manager relied not only on the unauthorised removal of the crate of coke underfilleds from the defendant's premises but also on the unauthorised taking of a company vacuum cleaner and two bags of cement in 1997 from the company's house at Ululoloa. From the case law on the subject, the general manager was entitled to take into account past misconduct in determining what sanction to impose. The sanction imposed was dismissal. Whether the sanction of dismissal was justified is a question of fact which requires an examination of the nature and circumstances of the misconduct.

In relation to the underfilleds, the evidence shows that there was company rule that whilst underfilleds of soft drinks could be consumed by members of the staff on the defendant company's premises, they were not to be removed from the premises. That rule was known to the plaintiff and all other staff members. In spite of that rule, the plaintiff, who had earlier sent a junior employee to purchase cans of paints from Samoa Paints Ltd, instructed this junior employee to take a crate of coke underfilleds to the girls at Samoa Paints Ltd from whom the cans of paint had been purchased. The plaintiff also gave $20 to this junior employee with the comment "ole mea lena e leo ai lau taga" (that is to guard your pocket). This employee then took a crate of coke underfilleds as he was instructed by the plaintiff to do. Apparently, the cans of paint which had been purchased were not for the defendant company. The evidence was rather vague as to who the paints were for, but they were not for the defendant.

The value of the crate of underfilleds was apparently minimal. If the plaintiff's evidence that "he paid $15 to the cashier" for the crate of underfilleds is anything to go by, then that was probably an approximate value of the underfilleds. In saying this, I am not accepting that the plaintiff did in fact pay $15 to the cashier as he claims. Counsel for the defendant submitted that even though the value of the crate of underfilleds was minimal, the seriousness of what the plaintiff did was that he involved a junior member of the staff thus setting a bad example.

In my view, there was a company rule known to the plaintiff and all members of the staff that underfilleds were not to be removed from the defendant's premises. By instructing a junior employee to take out of the defendant's premises a crate of coke underfilleds, the plaintiff was knowingly and deliberately flouting a company rule. His giving $20 to that employee "to guard his pocket" appears quite suspicious as to the plaintiff's motive behind the giving of that money. As personnel manager, one would have expected the plaintiff to set a good example for other members of the staff, especially junior staff. But what he did was not only to involve a junior staff member in an unauthorised taking of company property but to set a bad example for junior staff. Perhaps, if this was the only incident, it would have been arguable that the sanction of dismissal was disproportionate to the seriousness of the type of misconduct involved. But this was not the only incident of misconduct.

In 1997, the plaintiff without authority took a vacuum cleaner and two bags of cement from the defendant's house at Ululoloa. These missing items of property became the subject of a company investigation. The plaintiff, in his office, told one of the defendant's securities who was on duty at the defendant's house at Ululoloa at the material time, that if the general manager asked him about the missing vacuum cleaner and bags of cement just tell him you do not know. As a result, when this security was questioned by a senior member of the defendant's staff about the missing vacuum cleaner and the bags of cement, he lied and said what the plaintiff told him to say. Subsequently, when the same security was questioned by the general manager, he felt what he was doing was improper and he told the general manager what the plaintiff had instructed him to say if questioned by the general manager about the missing vacuum cleaner and bags of cement. Even though the plaintiff denied having taken the vacuum and the bags of cement, the general manager did not believe him and suspended him from work for five days without pay. The general manager also warned the plaintiff if there was repetition of that sort of misconduct, that was it.

In both incidents, the taking of underfilleds without authority and the taking of the vacuum cleaner and bags of cement, there was clearly an element of dishonesty that was involved. They smack of theft. In both incidents, the plaintiff got other staff members involved. In the case of the underfilleds, he got a junior employee to take a crate of underfilleds out of the defendant's compound. In the case of the vacuum cleaner and bags of cement he got a security to "cover up" for him by instructing him to lie. Both incidents necessarily set bad examples for other employees, especially the junior staff members who were being involved. Both incidents also occurred while the plaintiff was personnel manager.

I have also taken into account the fact that the plaintiff had started work with the defendant in 1984 as a junior accounts clerk and rose up the employment ladder until he became personnel manager in 1996, which position he held until his employment with the defendant was terminated on 23 March 2001. However, given the nature of what happened in 1997 and the related circumstances which subsequently took place which included a warning from the general manager that if there was a repetition of that sort of misconduct that was it, and the nature of the second incident and the circumstances surrounding its occurrence, I have come to the conclusion that the plaintiff's dismissal was justified. By his own misconduct, the plaintiff had undermined and seriously impaired the relationship of trust and confidence between him and the defendant company which is an essential condition of a contract of employment. He had, in other words, breached the faith which is inherent to the employment relationship. His misconduct therefore warranted dismissal. Accordingly there was no wrongful dismissal.

For all the foregoing reasons the plaintiff's case is dismissed. I need not therefore discuss the difficult but important question of whether damages are recoverable at common law for mental anxiety and distress which arise from the manner in which an employee was dismissed by his employer. Costs are awarded to the defendant which I fix at $3000.

CHIEF JUSTICE
Solicitors:
Toailoa & Associates for plaintiff
Kruse, Enari & Barlow Law Firm for defendant