Land Transport Authority of Fiji v Narayan [2015] FJHC 828; ERCA12.2014 (27 October 2015)

IN THE EMPLOYMENT RELATIONS COURT
AT SUVA
APPELLATE JURISDICTION

CASE NUMBER: ERCA12 of 2014

BETWEEN:

THE LAND TRANSPORT AUTHORITY
APPELLANT

AND:

DEVENDRA NARAYAN
RESPONDENT

Appearances: Ms. E. Radrole for the Appellant.
Mr. R.Singh for the Respondent.
Date/Place of Judgment: Tuesday 27October 2015 at Suva.
Coram: Hon. Madam Justice Anjala Wati.

JUDGMENT

Catchwords:
Employment Law – Appeal –Summary Dismissal –Assessing lawfulness of the dismissal: the cause and procedure must be correct – Assessing fairness of the dismissal: the manner of dismissal must be fair and be done in good faith – Assessing the remedies.

Legislation:

1. The Employment Relations Promulgation 2007 ("ERP"): ss.33 (2); 34.
   

Cause/Background

1. The employee filed an employment grievance that he was unlawfully and unfairly dismissed by the employer on 16 April 2010.
   
2. In his grievance of 15 October 2010, he outlined his grievance to be that:
   

(a). He was denied the right to be heard and the disciplinary procedures contained in clause 8.2 of the Collective Agreement ("CA") were not followed.

(b). There was procedural impropriety in the decision making process of the employer which breaches the principles of natural justice.

(c). The employer's decision is discriminatory and in contravention of ss. 6(2), 75, 77(1) (c) of the ERP.

3. The Tribunal's findings of 21 October 2014 on the grievance are subject of this appeal.
   

The Background

4. The employee was holding the position of Acting General Manager Finance and Administration when he was summarily dismissed on 16 April 2010. His substantive position was that of Financial Accountant. Prior to being dismissed, he was suspended on 22 October 2009 on half pay.
   
5. Before being suspended, the employee was sent on annual leave pending investigation by the employer into certain alleged malpractice in the department he was overseeing.
   
6. The letter of termination of 16 April 2010 indicates the basis of termination. It alleges that the employee had:
   
   • (i) authorized unwarranted expenses for one Monica Sharma and approved receipts for accountable advances for Monica Sharma which receipts were bogus and resulted in the employer being defrauded.
     
   • (ii) failed to act with care and diligence in his role as a senior officer of the employer.
     
   • (iii) failed to follow proper procedures when he approved the mileage of Mr. Romit Prakash when his agreement specified that he was not entitled to the mileage claim.
     
   • (iv) had fresh allegations of corruption from Major Fraud Unit of Fiji Police Force.
     
7. The employer's evidence was that Mr. Narayan was terminated because one Monica Sharma was implicated to have defrauded the Authority. She made claims for attending Tribunal hearings when there was no Tribunal sitting. Mr. Narayan was terminated because he was in a supervisory role and was the first signatory to the cheques. It was alleged that it was his responsibility to verify the payments.
   
8. It was also stated in evidence that if a claim is approved by the supervising officer, it is sufficient for payment and on how the grievor was connected to this incident; the evidence indicated that they were all involved in it. No specifics of how this employee was connected to the initial wrong done by Monica Sharma and Romit Prakash was identified except for a bare and general allegation that he was involved and careless in making the payments.
   
9. The employee gave evidence that the claims were approved for payment and so he proceeded to make the payments. No evidence was produced to negate the evidence of the employee.
   

ERT's Findings and Orders

10. The ERT found that there was no evidence to establish the cause for dismissal. There was no evidence to establish that the employee was connected with Monica Sharma and assisted her in defrauding the Authority or independent of this grievor that Monica Sharma was guilty of the fraud alleged to have been committed.
    
11. The ERT also found that there was no evidence to suggest that the claim of Romit Prakash was bogus and that the employee concerned was in any way responsible for verifying the same or assisted or caused through his neglect a fraudulent transaction.
    
12. The ERT further found that there was no evidence of any act without due care and diligence.
    
13. Having assessed the allegations of the cause warranting dismissal, the ERT found that there was not sufficient cause to carry out the dismissal.
    
14. On the procedure, the ERT held that the employer should have collated all the information and invited the Union along with the employee and presented their case to prove their allegations. It was then their prerogative if they wished to hear from the grievor after this due process was accorded.
    
15. On the manner of treatment provided to the employee, the ERT found that the treatment was unfair in that he was sent home on spot without notice and without full pay. It was found that the employee was first sent on leave which was then revoked and substituted with suspension on half pay and then he was dismissed without notice. All this was unfair treatment and has caused the employee a lot of grief and financial constraint.
    
16. The ERT then awarded the employee a sum of $25,000 as compensation which was made up as follows:
    
    • (i) $10,000 which represented lost annual leave entitlement for 46 days, present and future earnings, and/or benefits such as FNPF lost, all of which would form a fair part of the wages;
      
    • (ii) $5,000 as damages for the dismissal;
      
    • (iii) $10,000 for humiliation, loss of dignity, and injury to feelings of the worker.
      

Grounds of Appeal

17. The employer raised two grounds of appeal that the ERT erred in law and in fact in determining:
    
    1. That the employer had no lawful and fair cause to terminate the employee under the provisions of the Contracts of Service (or the CA) and the ERP.
       
    2. That the employer pays compensation to the employee in the sum of $25,000 to the employee within 60 days of the date of the order.
       

Submissions

18. It was argued in respect of ground 1 that the employer had powers to summarily dismiss the employee and the powers are derived from s. 33(a) and (b) of the ERP.
    
19. It was argued that since the employee held a very senior position, it was his duty to verify all transactions before making payments on the same. When he breached his duty, he was given the due process before being terminated, in that he was notified of the allegations against him in writing.
    
20. There was no need for any other process as summary dismissal means instant dismissal and if any further rights were to be accorded to him, the purpose of summary dismissal will be lost.
    
21. On ground 2, Ms. Radrole argued that injuries for humiliation, embarrassment, and damage to self-esteem should only be considered where it could be shown that an employer engaged in bad faith conduct or unfair dealing in the course of dismissal. In this case there was no evidence of the employer acting in bad faith or unfair dealing in the manner of dismissal. The dismissed employee is not entitled to compensation flowing from the fact of dismissal itself.
    
22. It was submitted that the employee was only terminated after the employer had satisfied itself as to the facts relating to the incident and only after an investigation proper was conducted. It was satisfied of the misconduct on the part of the employee.
    
23. Mr. Singh representing the employee argued that the contract of service which makes a reference to the CA does not contain any provision for summary dismissal.
    
24. Before the employee was dismissed, there were no charges laid and no opportunity to respond from the employee.
    
25. There were two principal employees involved being Monica Sharma and Romit Prakash. She made claims and the employee was one of the signatories. There were no charges against Monica Sharma. Why was then the employee dismissed for signing the cheques for her claim. The legal department approved the claim and so he had to pay.
    
26. In case of Mr. Romit Prakash, his claim was approved for payment so the employee proceeded to make the payments. Even Romit Prakash was not charged for any offence.
    
27. Mr. Singh argued that this employee had an unblemished record and after the termination he lost his house to mortgagee sale, his family got separated, his son died and he is now renting a very small place in Namadi Heights. He has lost his standing and repute in the community. He is not able to find a suitable job because this accounting position requires a person of trust and confidence and the termination is an adverse mark in his career.
    

Law and Analysis

28. I have re-analyzed the evidence to ascertain whether the alleged causes by the employer were established to justify the termination.
    
29. I agree with the findings of the tribunal that on the evidence the causes for termination were not established.
    
30. The employer did not establish on the balance of probability that the employee was under a duty to verify all the payments before making the same. The evidence which was not contradicted was that the payments were already verified by the superiors for the claim to be paid.
    
31. Once the payments were verified, the employee proceeded to make the payments. There was no evidence to suggest that he was under a contractual duty to verify each payment and in absence of that duty he relied on verification by the superiors to be correct and acted on the same.
    
32. Furthermore, there was no evidence to establish that the claims were wrong or fraudulent and if that is not established as an initial wrong than the employer cannot rely on the employees action of making the payment as an act without due care and diligence.
    
33. I then turn to the procedure that the ERT says ought to have been followed. I do not find that the legislation by s. 33 of the ERP requires that any reports or information be provided to the employee before he is terminated.
    
34. If on the facts available before the employer, a cause under s. 33 of the ERP is established, the employer can proceed to dismiss the employee.
    
35. What is required under s. 33(2) and s. 34 of the ERP when carrying out the dismissal is that the employee be give written reasons for dismissal and up to date pay. He did receive written reasons for dismissal but his pay up till dismissal was not given to him which makes the procedure wrong.
    
36. Although I do not endorse the ERT's findings that the reports and investigation documents leading to the employers assessment of dismissal ought to be given to the employee, I find that the procedure was incorrect for want of up to date payment given to the employee.
    
37. Even if the CA does not make any provision for summary dismissal, that right is given to the employer under the statute which can be exercised.
    
38. When it came to assessing damages for humiliation, loss of dignity and injury to feelings of the worker, the ERT fell in error in again assessing the procedure used for terminating the employee. The cause and procedure to terminate the employee is used to assess the lawfulness of the termination.
    
39. The fairness of the termination is assessed by looking at the manner in which the termination was carried out. Employers ought to be held to an obligation of good faith and fair dealing in the manner of dismissal. While a dismissed employee is not entitled to compensation flowing from the fact of dismissal itself, where it could be shown that an employer engaged in bad faith conduct or unfair dealing in the course of dismissal, injuries such as humiliation, embarrassment, and damage to self-esteem might all be worthy of compensation.
    
40. The ERT found that the employee suffered immensely both emotionally and financially but that was the result flowing from the dismissal. There was no evidence of bad faith conduct by the employer or that the employee was not treated properly when the dismissal was being carried out.
    
41. On the evidence therefore, I find that it was not established that the dismissal was unfair.
    
42. The question then is whether I will set aside the $10,000 damages that were allocated under this head. I will set aside the amount under that head but it is not fair that any changes be made to the final amount of $25,000 as that represents part of the one years' wages lost as a result of grievance. The employee was out of employment for almost 4 years and most of the delay in bringing the case quickly was rightfully laid at the employer's doorstep.
    
43. The employee was earning a salary of $58,000 at the time of his dismissal. The sum of $25,000 only represents 5 to 6 months of wages which by any assessment is not exorbitant.
    

Final Orders

44. I allow the appeal only to the extent that the dismissal was not established to be unfair and thus set aside the sum of $10,000 which was granted as compensation for humiliation, loss of dignity and injury to the feelings of the worker.
    
45. The final compensation of $25,000 to be paid to the employee is affirmed which represents part of the wages lost by the employee as a result of the grievance.
    
46. The sum of $25,000 must be paid to the worker with 28 days from now.
    
47. Each party shall bear their own costs of the application.
    

AnjalaWati
Judge

27.10.2015
____________________
To:

1. Appellant.
2. Respondent.
3. File: Suva ERCA 12 of 2014.