National Union of Hospitality Catering and Tourism Industries Employees v Mataka [2011] FJCA 46; AAU0039.2010 (29 September 2011)

IN THE COURT OF APPEAL, FIJI ISLANDS
APPELLATE JURISDICTION

CIVIL APPEAL NO.AAU 0039 OF 2011
[High Court Civil Action No.HBC 180 of 2007]

BETWEEN:

NATIONAL UNION OF HOSPITALITY CATERING & TOURISM INDUSTRIES EMPLOYEES.
Appellant

AND:

MIKAELE MATAKA
Respondent

CORAM: Hon. Justice William Marshall, Justice of Appeal
Hon. Justice Sriskandarajah, Justice of Appeal
Hon. Justice, A.L.Brito Mutunayagam, Justice of Appeal

COUNSEL: Mr.D.S. Naidu for the Appellant
Mr.R. Prakash and Ms.R. Karan for the Respondent

Date of Hearing: Wednesday, 7 September 2011
Date of Judgment: Thursday, 29 September 2011

JUDGMENT

William Marshall, JA

1. I agree with the Judgment and proposed orders of Sriskandarajah JA
   

A.L.Brito Mutunayagam, JA

2. I agree with the Judgment and proposed orders of Sriskandarajah JA
   

Sriskandarajah, JA

3. This is an appeal preferred against the judgment of Justice Sosefo Inoke delivered on 7th July 2010 in the High Court of Lautoka. In the said judgment the Court found that there was breach of contract by the Appellant which led to the loss of Respondent's employment and awarded damages for loss of salary at $17,500, compensation for manner of dismissal $4,000 and an interest of 6% awarded on the total award.
   

The Grounds of Appeal

4. There are three main grounds of Appeal which I summarise as follows:
   

"1. The Learned Trial Judge erred in holding that the Respondent was entitled for damages for breach of contract as a result of his termination.

2. The learned judge erred in awarding as compensation the salary for the period he was unemployed and for the loss of salary for 3 ½ years being the balance term of the contract of employment.
   
3. The learned judge erred in holding that the Respondent was entitled to compensation for the manner of his dismissal."
   

Ground of Appeal No.1

5. The first ground of appeal is on the breach of contract of employment entered into between the National Union of Hospitality Catering and Tourism Industries Employees (Appellant Union) and the Respondent as a result of the termination of the Respondent.
   
6. The Appellant is a duly registered Union under the Registered Union Act Cap 96. After the death of the General Secretary of the Appellant Union in January 2006, the Respondent was elected as the General Secretary of the Appellant Union at the election held in August, 2006.This election was held in accordance with Section 60(a) of the Constitution and Rules of the National Union of Hospitality Catering and Tourism Industries Employees. Section 60(a) provides that the Secretary shall be elected by secret ballot at the Annual General Meeting, shall serve for four years, and shall be eligible for re-election.
   
7. The Respondent signed a contract of employment for four years with the Appellant Union on 1st September 2006 and commenced work on 4th September 2006.
   
8. The Respondent negotiated the re-instatement of the Mana Island workers who were suspended or terminated for attending an unauthorised stop work meeting. The workers were not happy with what he had negotiated and they wrote a letter of no confidence in November 2006.The letter spoke of the general secretary of being friendly with the hotel management and of him having no "professionalism and guts".
   
9. A Special Executive Committee Meeting was held on the 9th of November2006 at West Motor Inn. This meeting is to discuss issues that were raised from the members on the performance of the General Secretary and also to consider the letter of no confidence on the General Secretary from the Mana Island In House Union. In the Meeting it was resolved that a meeting to be arranged between Ms.Qoro, Mr.Anthony and General Secretary as soon as possible to seriously address this issue. At the conclusion of the meeting the President asked everyone to work together for the betterment of this Union and she will update all Executives on the outcome of their scheduled meeting.
   
10. Following the above meeting the Union President, the Executive Secretary Felix Anthony and the Respondent met at the end of January 2007 and agreed to arrange a special executive meeting on 19th February 2007.
    
11. On 19th of February 2007 a Special Executive Committee meeting was held at the Capricorn Hotel in regard to the performance of the Respondent as General Secretary and his handling of Mana property issue. Various issues concerning the Respondent were considered in the said meeting. In the meeting it was agreed to give him another one month to perform and failure to comply with this, will leave them with no option but to terminate his services from the Union.
    
12. The decision arrived at the Special Executive Committee is to give one month time to the General Secretary to improve his performance. There is no decision taken in this meeting to terminate the General Secretary on the ground that he is incompetent.
    
13. The Appellant Union has power under Section 4(2)(e) to employ such officers of the Union as may be necessary and desirable, permanent or otherwise. Section 22(ii) requires that the officers of the union have to be elected by secret ballot. The Secretary of the Union is categorized as an officer of the Union under Part IX and Section 60 (a) provides that the Secretary shall be elected by secret ballot at the Annual General Meeting, shall serve for four years, and shall be eligible for re-election. The suspensions or dismissal of officers are provided under section 40 of the constitution.
    
14. Section 40 provides:
    

"The National Executive Committee may suspend for a period not exceeding three months and/or recommend for dismissal any officer for neglect of duty, dishonesty, incompetence, refusal to carry out the decisions of the National Executive Committee, or for any other reason which it deems good and sufficient and in the interests of the union. Any officer who is suspended or who is recommended for dismissal shall have the right of appeal to the Annual or to an Extraordinary General Meeting."

15. The contract of employment entered into between the Appellant (Union) and the Respondent (General Secretary) on the 1st of September 2006 provides for the terms and condition for employment, which includes working hours, leave entitlements, salary and allowance and retirement benefits. It has not provided for the termination of the contract by the Union but it has provided that if the General Secretary so wish could resign after giving four (4) weeks notice.
    
16. The power to appoint officers is conferred on the Union and National Executive Committee under Section 4(2) (e) of the Constitution and the power to suspend an officer is conferred on the National Executive Committee but the power to dismiss an officer is vested with the Union in an Annual or to an Extraordinary General Meeting in terms of Section 40 of the constitution.
    
17. The General Secretary by letter dated 19th March 2007 was informed as follows:
    

"I write in reference to the letter dated 13th March 2007 on behalf of the Executive Committee. The Committee has decided to terminate your contract with the National Union of Hotel and Catering with immediate effect."

This letter was signed by the President of the Union Liviana Qoro.

18. The letter dated 13th March 2007 referred to above was written and signed by Liviana Qoro the Union President, Vice President and 10 executive committee members to Mr.Felix Anthony captioned 'Performance of the General Secretary'. The letter has given various instances where the General Secretary has not acted in the interest of the members of the Union. It goes on to state:
    

"It seems that giving one month to judge his performance has not been seriously considered by him as he continues to disappoint members".

It further states:

"We ask your understanding of our plight. The General Secretary must be removed by 19th March, as we no longer have any confidence in him. For the sake of our union we must make decisions that will improve the service our members require and we know that you will agree to our appointment of Mr. Urai as interim GS."

19. The said letter dated 13th March 2007 contains a decision to terminate the General Secretary on the 19th of March and this decision was forwarded to Mr.Felix Antony for his attention. The said letter was written and signed by the Union President, Vice President and 10 executive committee members. On the 19th of March the General Secretary was informed by the President that the committee has decided to terminate his contract.
    
20. As I observed above the power to suspend an officer was conferred on the National Executive Committee in terms of Section 40 of the Constitution but the power to dismiss an officer is with the Union. The decision of the National Executive Committee had to be taken in the meeting held under Section 35 of the Constitution or by a circular letter under Section 42 of the Constitution. The decision communicated by the letter of 13th March 2007 or of 19th March 2007 was not taken in a meeting of the National Executive Committee.
    
21. The lawful decision that the National Executive Committee could take in the given circumstances is to suspend the Respondent not exceeding three months if the National Executive Committee has found on the part of the Respondent that there is neglect of duty, dishonesty, incompetence, refusal to carry out the decisions of the National Executive Committee, or for any other reason the National Executive Committee found that it deems good and sufficient in the interests of the Union. The National Executive Committee also for the same reasons could recommend for dismissal of the Respondent to the Annual or Extraordinary General Meeting of the Union. But it has not taken either of these decisions. On the other hand the Union had not taken a decision either in an Annual or Extraordinary General Meeting to dismiss the Respondent.
    
22. For the National Executive Committee to suspend the Respondent or to recommend the dismissal of the Respondent the National Executive Committee has to first decide in a properly convened meeting of the committee that the Respondent is to blamed for any of the followings namely; neglect of duty, dishonesty, incompetence, refusal to carry out the decisions of the National Executive Committee, or for any other reason which it deems good and sufficient and in the interests of the Union. The evidence shows that there are allegations against the Respondent, it was discussed and brought to his notice but he denied the allegations. He was given one month time to look into the allegations and to rectify himself. In this background there is no finding of the Union or the National Executive Committee that the Respondent is incompetent. Therefore there is no error in the Learned Judge's conclusion that the termination is not based on his incompetence.
    
23. The Learned Judge when dealing with the competence of the Respondent has observed in his judgement:
    

"But I do not accept that he was incompetent as alleged by Ms Qoro. I agree with Mr.Mishra that despite her inexperience as a union official at national level, she seemed to have had a very high opinion of her capability and low one of Mr.Mataka's abilities. Her views were at odds with those of Mr. Anthony's. I would prefer the evidence of Mr. Anthony. Mr.Mataka's experience as a unionist was far more extensive than that of Ms Qoro."

24. It can be reasonably presumed that the President of the Union is aware of the provisions of the constitution. If she desired she would have suspended or recommended for the dismissal of the General Secretary through the constitutional provisions. But she has chosen to by-pass the constitution and made attempts to get the General Secretary to resign. The concerns expressed and the decision taken in the letter of 13th March 2007 was not taken in the National Executive Committee Meeting and therefore it cannot be the basis of a dismissal letter issued by the President of the union to the General Secretary. It shows that the President is keen in dismissing the General Secretary as soon as possible even before the expiry of the time given to the General Secretary to show his performance.
    
25. The Learned Judge had made some findings in his judgement in order to determine bad faith. He observed:
    

"I think she was determined to remove Mr.Mataka before the month was up when she visited his office on 19th March 2007. It only needed Mr.Mataka to suggest that he be given a termination letter before she acted. Having heard the witnesses I have come to the view that Ms Qoro (others) did not like the fact that Mr Mataka did things his own way and differently from the previous General Secretary."

26. In the given facts and circumstances this court cannot interfere with the finding of the Learned Judge that Mr Mataka's termination was in bad faith and not because of his incompetence. Lord Sumner in S.S.Hontestroom v. S.S.Durham Castle [1927] A.C. 37 at page 47 observed:
    

"None the less, not to have seen the witnesses puts appellate judges in a permanent position of disadvantage as against the trial judge, and unless it can be shown that he has failed to use or has palpably misused his advantage, the higher Court ought not to take the responsibility of reversing conclusions so arrived at merely on the result of their own comparisons and criticisms of the witnesses and of their own view of the probabilities of the case. The course of the trial and the whole substance of the judgement must be looked at, and the matter does not depend on the question whether a witness has been cross-examined to credit or has been pronounced by the judge in terms to be unworthy of it. If his estimate of the man forms any substantial part of his reasons for his judgement the trial judge's conclusion of fact should, as I understand the decisions, be let alone..........We must, in order to reverse, not merely entertain doubts whether the decision below is right, but we convinced that it is wrong,"

27. In addition to the fact that the grounds for termination of the General Secretary was not well founded, the decision to terminate the General Secretary contained in the letter of 13th March 2007 or in the letter of termination dated 19th March 2007 is void as it was purported to have been taken by the National Executive Committee. The National Executive Committee has no power under the constitution to take such decision and therefore the said decision is ultra viras and it is ab initio void. Hence the approval of these decisions in the 24th Annual General Meeting held on 11th May 2007 has no force or effect in law. Therefore the Respondent was entitled for damages for breach of contract as a result of his termination.
    
28. For the aforesaid reasons the appeal fails on this ground.
    

Ground of Appeal No. 2

29. The second ground of appeal is on the quantum of compensation awarded for wrongful termination.
    
30. The Respondent was elected with an overwhelming majority to the office of General Secretary for four years. In view of this election the Union entered in to a contract of employment with the Respondent. The Respondent's election to the said office for four years and the contract of employment to the said office have given the Respondent a legitimate expectation that he will serve in the said office for four years on the terms and condition stated in the contract provided he is not removed in terms of the constitution before the expire of the said four year period.
    
31. The Learned Judge has correctly held that the termination of the services of the General Secretary is wrongful and the breach of contract of employment led directly to the loss of his job hence he is entitled for damages directly following from it. He is entitled for the loss of salary for the period he was unemployed. As his contract is for four years he is also entitled to the salary for the remaining period of contract but as he was engaged in gainful employment the Learned Judge has correctly awarded the difference in salary for the remaining period. The damages in this case are objective and depend on definite facts and established rule of law and therefore the quantum awarded is easily justifiable.
    
32. The principles which guide an Appellate Court on appeal from an award of damages are well established in Flint v. Lovell (1934) 1K.B 354, 360; (194) All E.R.200, the view expressed by Greer L.J in this case was endorsed by Lord Wright in Davies v. Powell Duffryn Associated Collieries Limited (1942) A.C 601 at 61t; (1942) All E.R at p 644. He observed:
    

"In effect the court, before it interferes with an award of damages, should be satisfied that the judge has acted on a wrong principle of law, or has misapprehended the facts, or has for these or other reasons made a wholly erroneous estimate of the damages suffered. It is not enough that there is a balance of opinion or preference. The scale must go down heavily against the figure attacked if the appellate court is to interfere, whether on the ground of excess or insufficiency."

33. This court has no reason to interfere with the amount awarded under the above heads and therefore the appeal on this ground fails.
    

Ground of Appeal No.3

34. The Appellant in this ground of appeal challenges the award of compensation for the manner of dismissal of the Respondent, in addition to the compensation given for wrongful termination.
    
35. In considering an argument that a person without incurring any pecuniary loss, loses his standing in an elected office is not entitled to demerges as per Addis v. Gramophone Co Ltd. [1909]AC.448 was rejected by Lord Denning M.R in his dissenting judgment in Breen v. Amalgamated Engineering Union [1971] 2 Q.B.175 at pages 193 and 194 he observed:
    

"It is said that Mr. Breen has no remedy. His election was only for one year – from December, 1965. That year is long past. So there is no point in making a declaration. As to damages, he has suffered none because he did not lose his job. He still got his wages. All he lost was his standing as a shop steward: and for that no damages should be awarded, any more than a dismissed servant can get such damages: see Addis v. Gramophone Co. Ltd. [1909] AC488.

This argument does not appeal to me in the least. Here was Mr. Breen elected to an office of standing and responsibility amongst his fellows. He was wrongly deprived of it. The effect would not be for that one year only. It would seriously prejudice his chance of being elected another year. Loss of such an office strikes deep, and not the less so because it may not strike at the pocket: see Lawlor v. Union of Post Office Workers [1965] Ch. 712, 734 – 5. I think that the court should do what it can to vindicate him. It is an appropriate case for the remedies now given by administrative law. The court should grant a declaration that the refusal of approval was invalid: see Taylor v. National Union of Seamen [1967] 1 WLR 532. This will not make him shop steward for that year. But it will justify him in the eyes of his fellow workmen.

Next, damages. At present these have to be claimed in contract. No action of tort lies against a trade union. The claim must be based on an implied contract that the district committee must not withhold their approval unfairly. But what are the damages? There is no financial loss, because Mr Breen has remained at work. But he has suffered in reputation and standing. He has been injured in his proper feelings of dignity and pride. He has lost the chance of a career of honour in the union. If the action had been in tort, these would certainly have been the subject of compensation: see Rookes v. Barnard [1964] UKHL 1; [1964] AC 1129, 1121, by Lord Devlin. Are they outlawed in contract? I think not. Our law is flexible enough to meet new situations as they arise. It gave damages to a trader when his cheque was wrongly dishonoured, even though he suffered no financial loss. It has given, in this century, damages to actors for loss of publicity. I see no reason why it should not give damages to a shop steward for wrongful deprivation of office."

36. A contract of employment contains implied terms by law namely that parties will act fairly and reasonably with mutual trust and confidence and any procedure leading to termination must be consistent with fairness; Stuart v. Armourguard Security Ltd [1996] 1 NZLR 484. The Petitioner entered into a contract of employment with the Respondent because he was elected by the members of the Union (with an overwhelming majority). Even though the constitution provides that the termination of the General Secretary could only be effected by an Annual General Meeting of the Union it was not followed. Further the constitution provides for a mechanism for the dismissal of an officer that includes a right of appeal to the officer to the Union if a termination is recommended by the National Executive Committee. This right of appeal was also denied to the Respondent as his service was terminated without following the procedure laid down. He suffered serious harm to his reputation because his employment was terminated with immediate effect, giving rise to suspicion as to why that had occurred. The Respondent was holding a very high position and he was elected to this position by the large majority of the members.
    
37. The Supreme Court of Fiji Islands in Central Manufacturing Company Ltd v. Kent [2003] FJSC 5 considered the question whether Addis v. Gramophone Company Limited [1909] AC 488 a case long seen as authority for the proposition that damages arising out of the manner of dismissal cannot be recovered-should continue to be followed in this country and held:
    

"This court is required to declare the common law as it appears in Fiji. In our view, Addis has no place in a modern system of employment law. It should now be consigned to history.

In our view, the respondent was entitled to some compensation for the distress and humiliation that was needlessly inflected upon him by his employer in the manner in which he was dismissed."

38. The learned Judge has observed:
    

"The manner in which Ms Qoro orchestrated Mr Mataka's dismissal was quite humiliating and undignified. He asked to wait for Mr.Anthony's return, a reasonable request in my view in the circumstances, but was refused and was left with no alternative but to ask for a letter of termination. The forceful and threatening way in which Ms Qoro removed him from his office and in the company of another executive, in his office in front of his secretary and having her to type up the letter of termination must have been very embarrassing and humiliating for Mr. Mataka. These circumstances lead me to conclude that Mr Mataka was dismissed in a manner in breach of the principle in Kent."

The Respondent has not only suffered by the loss his employment as a result of the breach of contract but he has also suffered embarrassment and humiliation. He has been injured in his proper feelings of dignity and pride. The learned Judge after careful consideration of Central Manufacturing Company Ltd v. Kent (supra) awarded a reasonable compensation. I do not thing that decision can be interfered by an Appeal Court. For this reason I would hold that the appeal fails on this ground of appeal.

39. In my opinion this court should dismiss this appeal and order the Appellant to pay the Respondent $ 2,000.00 in respect of costs.
    

William Marshall, JA

ORDERS OF THE COURT

40. The Court orders:
    

(1) That the appeal of National Union of Hospitality Catering & Tourism Industries Employees be dismissed.

(2) The orders of justice Sosefo Inoke in the court below be confirmed.

(3) The cost of appeal of the Respondent be paid by the Appellant assessed in the sum of $2000.

.............................................................
Hon. Justice William Marshall
Justice of Appeal

.............................................................
Hon. Justice Sriskandarajah
Justice of Appeal

.............................................................
Hon. Justice, A.L.Brito Mutunayagam,
Justice of Appeal