Carpenters Fiji Ltd v Tawake [2016] FJHC 1081; ERCA14.2013 (28 November 2016)

IN THE EMPLOYMENT RELATIONS COURT

AT SUVA

APPELLATE JURISDICTION

CASE NUMBER: ERCA 14 of 2013

BETWEEN: CARPENTERS FIJI LIMITED T/A MORRIS HEDSTROM

APPELLANT

AND: WAISALE TAWAKE

RESPONDENT

Appearances: Ms. D. Prakash for the Appellant.

Mr. L. Vaurasi for the Respondent.

Date/Place of Judgment: Monday 28 November 2016 at Suva.

Coram: Hon. Madam Justice A. Wati.

_______________________________________________________________________________________

1. Catchwords:

Employment Law – Employee’s claim for unlawful and unfair dismissal – Termination for a Cause – The employer cannot rely on reasons not included in the letter of dismissal to justify why it terminated the employee – Compensation for humiliation, loss of dignity and injury to the feelings of the worker is paid when the employer acts in bad faith in carrying out the dismissal or conducts itself in a manner which is unfair and improper and not for humiliation, loss of dignity and injury to the feelings of the worker suffered from the fact of dismissal itself.

2. References:
   

(i). Legislation

1. The Employment Relations Promulgation 2007 (“ERP”): ss. 30; 33; 230 (1) (b).
   

(ii). Cases

1. Fiji Airline Workers Association v. Air Pacific Limited - Arbitration Award 18 of 2000.
2. Rentokil Initial Limited v. Henry Kean [2013] FJHC 193; ERCA 6. 2011.
   

___________________________

Cause

1. The employer appeals against the decision of the Employment Relations Tribunal (“ERT”) of 23 August 2013 wherein it found that the dismissal of Waisale Tawake (“WT”) was unlawful and unfair. Upon that finding, the ERT ordered the employer to pay to the employee:
   
   • (a) wages for one year four months for unlawful dismissal.
     
   • (b) wages for one year for unfair dismissal causing humiliation, loss of dignity and injury to his feelings.
     
2. The employer says that the ERT erred:
   
   1. in fact and/or misdirected itself as to the facts and in law in holding that the employer was prejudiced in the manner it handled the case of the grievor when the evidence was produced to show that numerous opportunities were presented to him throughout his employment to improve his performance.
      
   2. in fact in finding so when there was no evidence before the Tribunal to support or justify the finding that the employee had suffered loss of wages equivalent to one year and 4 months.
      
   3. in fact in finding so when there was no evidence before the Tribunal to support or justify that the employee had suffered humiliation or loss of dignity for which compensation should be paid equivalent to one year’s wages.
      
   4. in law and in fact in finding so when there was no evidence before the Tribunal that the employer in any manner was responsible for the time taken to have the hearings and decisions of the Tribunal determined which appear to have influenced it in fixing the period of compensation for loss of wages or of the employee’s continued unemployment.
      
   5. in law and in fact in finding so when there was no evidence before the Tribunal that the employer in any manner was prejudiced against the employee for being an indigenous Manager which appears to have influenced the Tribunal in fixing the compensation for humiliation, loss of dignity and injury to his feelings.
      
3. All the grounds of appeal are opposed.

Employee’s Background

4. WT was a permanent full time employee of Carpenters Fiji Limited (“CFL”) at the time of his dismissal. At the time of his dismissal, he was employed as an Acting Store Manager.
   
5. He was employed by CFL from 1989 to 1990 and then again from 1992 to 2010. He commenced his employment as a packer/cleaner and in 1996 became a confirmed staff. He rose through the ranks to become a Manager. He was demoted in 2009 to Acting Store Manager and this was due to his alleged poor performance.
   
6. He was dismissed on 24 May 2010 for consistent poor performance and lack of skill in store management. The particulars of consistent poor performance and lack of skill in store management are contained in the termination letter of 24 May 2010 which in material part reads:
   

“Dear Mr. Tawake

Re: Termination of Employment

We note with great concern regarding your consistent poor performance.

The following letters as your poor performance indicators were given to you over a period of one year:

• Demotion to Acting Store Manager dated 8^th July 2009.
• First Warning for poor Management of the supermarket and bakery area 20^th July 2009.
• Final Warning for meat shrinkage 10^th August 2009.
  

Despite given all of the above letters you still have not made any efforts to improve yourself.

In view of the above, we inform you that your contract of employment is now being terminated with immediate effect on grounds of consistent poor performance and lack of skill in store management. You shall be paid a month’s pay in lieu of notice.

By a copy of this letter, the salaries clerk is advised to pay you all monies due after the necessary clearances are made”.

7. It is not in dispute that since 2003 to 2009, the employee has received a number of warning letters but the dismissal letter does not make reference to the same as the basis for termination. I will discuss this in detail later.
   
8. After the termination, the employee filed an employment grievance in the Mediation Unit (“MU”). The MU attempted to resolve the matter but was unsuccessful. The matter was then referred to the ERT for hearing of the grievance where the matter was tried. Each party produced one witness at the trial.
   

ERT’s Findings

9. The essence of the findings of the ERT was that the basis on which the employee was terminated were the three letters of 8 July 2009, 20 July 2009 and 10 August 2009. All these letters, as per the evidence showed that it related to one major issue of “meat shrinkage” in MH Nabua.
   
10. The ERT found that the first letter of 8 July 2009 did not even state what actions of employee constituted “dissatisfactory performance”. This is improper as the employer must identify the reasons for dissatisfactory performance for the employee to properly respond to the allegation. When the employee was demoted on 8 July 2009, he did not know what the demotion was for. If he was demoted for the meat shrinkage issue than the employee was punished for his poor performance and the subsequent termination for the same issue amounts to double punishment for the employee.
    
11. The second letter dated 20 July 2009 was not on the employer’s letter head and not signed. The ERT had accepted the employee’s evidence that the letter was not served on him. If that was the case, and the existence of the first warning letter is challenged and accepted by the ERT, that leaves no basis for the final warning letter based on which the termination could be fixed.
    
12. The ERT found that the employer ought to have assessed the employee’s performance and given him an opportunity to comment on his performance which did not take place. This all makes the termination based on “poor performance” unsustainable.
    
13. The ERT also found that the employee was terminated for the “meat shrinkage” in Nabua which was not his fault as he had informed the employer’s about the problems in the freezers but no actions were taken by the employer. If the meat was damaged, that blame could not be laid at the employee’s door.
    
14. The ERT also found that before 2009, there were other warning letters issued to the employee which should have had no relevance in making a decision for terminating him as the warning letters had expired by virtue of CFL’s policy that the life of a warning letter is one year. Despite the existence of that policy, CFL still had the prejudices and used all those in making a decision to terminate the employee which was improper to do so.
    

Employer’s Submissions

15. In arguing ground 1, Ms. Prakash submitted that the question that needs to be asked is whether the employer is entitled to consider the previous record of the employee and the employment as a whole prior to any decision on termination. It was argued that the evidence clearly revealed that the employee had consistent poor performance since 2003 for which several warning letters were issued to the employee. When the employee was terminated in 2010, most of the warning letters had lapsed by virtue of the contractual provision that any warning letter after 12 months will lapse.
    
16. Since most warnings were prior to 2009, those letters did not form the basis for the termination but that does not mean that the employer should not or cannot consider the holistic performance of the employee in deciding whether or not he should be terminated. The employee had at the trial failed to dispute that these warning letters were issued to him and by his own written explanations accepted the issues raised in the warning letter.
    
17. Since the evidence established that the employee’s performance was poor, that performance was properly taken into account by the employer. In this regard, Ms. Prakash relies on the case of Fiji Airline Workers Association v. Air Pacific Limited - Arbitration Award 18 of 2000 where the Permanent Arbitrator Apted, J said:
    

“the doctrine of culminating incident is wider and is not limited to neglect of duties or absences, or, subject to the words used in a prior warning, to a course of misconduct of the same type...The doctrine exists to accommodate the employer’s legitimate interest in able to dismiss an unsatisfactory employee. If the doctrine did not exist in these wide terms, an employee might, with impunity, generally perform unsatisfactorily without fear of dismissal for so long as he or she did not commit a serious offence or did not persist in misconduct of the same type”.

18. Ms. Prakash stated that the ERT found that the employer was prejudiced in the manner it handled the case of the employee but there was no evidentiary basis to make that finding. The employer was entitled to consider the history of poor performance of the employee in making a decision on the employee’s employment status with it. That was vital information to consider and does not amount to the employer being prejudiced.
    
19. Grounds 2 and 4 were argued together. Ms. Prakash contended that the ERT had ordered the employer to pay wages of one year and four months on the basis that since the matter was heard, it took the ERT one year and four months to deliver the decision.
    
20. There was no evidence or any other basis to suggest that it was due to the employer’s conduct that the decision was delayed for one year and four months. The ERT ought not to have laid the blame at the employer’s door and punished the employer.
    
21. Whilst s. 230 (1) (b) allows for reimbursement of wages lost by the worker as a result of the grievance, there is no ceiling set for awarding compensation under this section. The Court has the discretion to fix a proper amount as lost wages. That discretion must be exercised judicially.
    
22. What the Court ought to have considered is properly set out in the case of Rentokil Initial Limited v. Henry Kean [2013] FJHC 193; ERCA 6. 2011. That case sets out the principle that when making an order for compensation for loss of wages what needs to be considered amongst other relevant matters are an employer’s conduct in mediation and the progress of the case, the delay caused by the employer, whether the employer should take responsibility for delay in determination of the matter, the employees status since termination, whether the employee mitigated his loss, the conduct of the employer hindering an employee from mitigating the loss.
    
23. None of the principles of law was considered by the ERT when determining what amount of compensation should be awarded in terms of lost wages. This makes the award excessive and prejudicial to the employer.
    
24. Grounds 3 and 5 were argued collectively. Ms. Prakash stated that the employee was awarded one year’s wages for humiliation, loss of dignity and injury to his feelings. There was no evidence to suggest that the employer’s manner of treating the employee whilst carrying out the dismissal was such that it caused him humiliation, loss of dignity and injury to the feelings of the worker.
    
25. Remedy for humiliation, loss of dignity and injury to the feelings of the worker is normally awarded where it can be shown that the employer engaged in bad faith conduct or unfair dealing in the course of the dismissal and not for humiliation, loss of dignity and injury to feelings flowing from the fact of dismissal itself.
    
26. Ms. Prakash added that the ERT had made a finding that since the employee was one of the few indigenous managers at CFL; that was real humiliation to him when he was dismissed under the circumstances. That finding has no basis given the evidence of the parties. There was no evidence produced at the trial that the employee was treated differently because of his race or in a manner that caused him humiliation, loss of dignity and injury to his feelings. The award under this head is not justified at all and ought to be set aside.
    

Employee’s Submissions

27. In arguing ground 1, Ms. Vaurasi submitted that the employer had terminated the employment on the basis that the employee had displayed consistent poor performance and shown lack of skill in store management. Three letters were used to show that the employee had performed poorly: the letter of 8 July 2009; the letter of 20 July 2009; and the letter of 10 August 2009.
    
28. The first letter based on which the employer says that the employee had performed poorly at work was the letter of 8 July 2009. That letter only alleges dissatisfactory performance as the reason for demoting the employee. The letter fails to say the basis of the dissatisfactory performance.
    
29. It was argued that on the letter of 8 July 2009, the employee is left to speculate whether the investigations on the “meet shrinkage” issue could be a possible reason for his demotion vides that letter.
    
30. Ms. Vaurasi asserted that at the trial of the matter, the employer’s witness Mr. Uday Narayan confirmed that the demotion was because of the Nabua MH “meat shrinkage issue” in June 2009. The employee was then sent from Nabua, a “B Grade Store” to manage MHCC an “A Grade Store”, the biggest store whilst the manager there was on leave.
    
31. Ms. Vaurasi said that the letter of 8 July 2009 does not establish any dissatisfactory performance. The employer is therefore not correct in relying on that to establish the termination.
    
32. The second letter being the indicator of poor performance was the letter of 20 July 2009. That letter was not exhibited upon objection which was sustained by the ERT. Ms. Vaurasi argued that a discredited letter was produced at the hearing which confirmed that the letter was not on a company letter head, not signed, not stamped by the company and no confirmation was given by the employer that it was received by the employee whose position was that he never received such a letter. Since this letter could not be established on the evidence and was not given to the employee, this can also not be used to establish the termination.
    
33. The third letter which the employer says stated the poor performance of the employee was the final warning letter of 10 August 2009. This letter was addressed to one Mr. Prasad. The details of the final warning letter clearly set out the issue of “meat shrinkage” in Nabua in June 2009. There is no basis for this letter given the fact that the first warning letter could not be established. In any event, this letter was not addressed to the employee.
    
34. The ERT found that the witness Mr. Narayan and other Managers who had the opportunity to supervise WT had his pre 2009 records in their minds which prejudiced their decision in dismissing the employee. According to Ms. Vaurasi, this finding was made on the evidence of the employer’s witness.
    
35. The evidence of the employer is clear in the regard that according to the Company’s policy, all warning letters have a life of one year. It thus follows, argued Ms. Vaurasi that one’s past performance is not taken into account if the warning letter is no longer active.
    
36. Even the termination letter disregarded all the warnings letters not issued within one year. It only made reference to the letters issued within a year of the decision to terminate.
    
37. The evidence of the employer clearly suggested that in terminating the employment, it had taken into account the performance of WT since 2003 when it is alleged that his performance started to deteriorate. The evidence led was to the effect of past poor performance and there was very little coverage of the 3 letters referred to in the termination letter.
    
38. The employer’s precise evidence was in the form as follows:
    

“Now, throughout this case this is not the only letter we are talking about. This discrepancies in order of managing or fulfilling all this role. If you go through his records he has been given so many opportunities, too many warning letters, so many reminders, so many guidance. So you cannot be just saying just because of one letter he has been terminated”.

39. The evidence of the witness does not state what exact period the performance review is limited to. The termination letter only indicates that the one year period of warnings was taken into consideration in terminating the employee so the employer cannot go beyond the letter and ask for the other letters or warnings to be considered.
    
40. Ms. Vaurasi said that the reason why the employer fell back on the history of non-performance was because it realized at the mediation stage that the warning letters it had relied on had serious anomalies. The employer’s own conduct of giving WT a pay rise in 2008 shows that the previous warnings were disregarded against him. If that is the case, for the employer to fall back on the history of non-performance, shows the prejudice it has had against the employee which was actually the finding of the ERT.
    
41. It respect of grounds 2 and 4, Ms. Vaurasi stated that the ERT awarded the one year and four months wages on the basis that it took that period of time from the date of hearing until the determination when the correct period should have been from the date of dismissal until the matter was fully heard.
    
42. The ERT did not make a finding that the employer or the employee was responsible for the time taken by it to deliver a judgment in this case. The hearing in this case was finalized in April 2012 and the filing of the submissions ended in July 2012. The period from the date of dismissal to the date of hearing is 2 years.
    
43. The evidence of the employee was not contradicted that he made attempts to find work but since all the employer’s wanted clearance from his previous employer, he could not be employed.
    
44. The employee was actually out of work until the hearing took place and the period for which the lost wages was fixed as compensation was therefore justified on the facts of the case.
    
45. Grounds 3 and 5 were argued together. Ms. Vaurasi asserted that the evidence based on which this remedy was granted was the evidence that WT served the employer for a long period and he was sponsored by it to study at the University of the South Pacific. There is evidence of the employer that he was handpicked to study. WT was also promoted in his job and received salary increments. When WT was terminated, he was told to leave immediately. His evidence indicates that he went to see the General Manager who did not know about the termination as the letter was signed by someone else. The employee was given only 3 to 5 minutes to clear his office when a person from HR had come and had asked him to leave. The basis of the termination was also not made out when he was not told the reasons in the first letter and the second letter was not even given to him. All this has caused the employer humiliation, loss of dignity and injury to his feelings.
    
46. Ms. Vaurasi argued that there is nothing in the ERT’s ruling which suggests that the ERT terminated WT because he was an indigenous manager.
    

Law and Analysis

47. I will deal with all the grounds collectively. The first issue before me is to determine whether the ERT was correct in arriving at a finding that the employer had not established that it had a cause to terminate the employee. The needs arises because the employer had purportedly exercised its prerogatives to terminate the employee summarily pursuant to s. 33 of the ERP which permits summary dismissal on various grounds including for lack of skill or qualification which the worker expressly or impliedly warrants to possess and for habitual or substantial neglect of the worker’s duties: s. 33 (1) (c) and (d).
    
48. S. 33 of the ERP requires that the employer must have a cause to dismiss the employee summarily. The reasons for the dismissal must be outlined in the letter of dismissal: s.33(2). The employer had complied with the provisions of giving reasons for the dismissal. The reasons as set out in the letter of 24 May 2010 are that the employee had consistent poor performance and lack of skill in store management.
    
49. The specific allegations of poor performance were to be meted out from the three letters specifically mentioned in the dismissal letter. The first letter was the letter of 8 July 2009 by which the employee was demoted to the position of Assistant Store Manager; the second was the first warning letter of 20 July 2009; and the third was the final warning letter of 10 August 2009.
    
50. Before I deal with the validity of these letters, I must deal with the aspect of whether or not the employer can rely on other warning letters issued by the employer or other aspects of non-performance apart from the ones mentioned in the letter of dismissal.
    
51. The ERP is very clear that when an employee is dismissed for a cause, he must be told the reasons for the dismissal in writing. This means that once the employee has been told why he has been dismissed, the employer cannot raise other extraneous issues not stated in the letter of dismissal to argue that the dismissal was lawful. It is bound by the reasons stated in the letter of dismissal. If it is to rely on various other reasons, all that must be included in the letter of dismissal.
    
52. The purpose of the requirement can be easily identified. The employer cannot have prejudices and dismiss an employee for some reason on the pretext of a valid cause. It must clearly show to the employee the reasons and if the reasons are challenged in court, it cannot find other reasons to build the case if the reasons in the dismissal letter are not established on evidence.
    
53. In this case, the evidence of the employer clearly stated that it did not only rely on the reasons stated in the dismissal letter to dismiss the employment of WT but also other reasons which existed and those were basically non-performance by the employee in the years 2003 and onwards for which he had received various warning letters.
    
54. The employer’s witness had agreed in the evidence that it was the policy of the company that the life of a warning letter was only a year. If that is the position, what follows from that is that after one year, the warning lapses and the employer is not entitled to use that warning letter to the detriment of the employee. In this case, the employer’s evidence was clear that it relied on other warning letters apart from the ones mentioned in the dismissal letter. If that is so then the employer is wrong in carrying out the termination based on matters not specified in the dismissal letter and also on letters which have no life and cannot be used against the employee to his detriment.
    
55. Ms. Prakash has directed my attention to the judgment Fiji Airline Worker’s Association (supra). I do not see how that matter has a bearing on this case given the specific contractual arrangement between the parties that warning letters more than a year old will only have a life span of 1 year.
    
56. I then come to the three letters. The first letter of 8 July 2009 does not even state the nature of the dissatisfactory performance based on which the employee was demoted. The evidence of the employer showed that one of the reasons was the “meat shrinkage” amongst the others. Whatever is the reason, the employee was not told about the nature of the dissatisfactory performance. What is clear is that the incident in June 2009 in MH Nabua which can be termed as “meat shrinkage” incident was also part of the reason for dissatisfactory performance.
    
57. The employer was not able to adequately establish what formed dissatisfactory performance on the part of the employee. The letter of 8 July 2009 failed to mention that and the employer cannot make conjectures to suit its case.
    
58. The next letter was that of 20 July 2009. Since the employer could not confirm that that letter was served on the employee, it was open to the ERT to disregard the same as not having being received by the employee as asserted by him. The employer therefore could not rely on this letter to establish poor performance at work. This then takes away the basis for the final warning letter of 10 August 2009 without the existence of the first warning letter. The final warning letter was based on the “meat shrinkage issue” as well.
    
59. The evidence of the employer was that the letter of 8 July 2009 also had included “meat shrinkage issue”. If “meat shrinkage issue” was prevalent in the three letters, the employer could not on the evidence convince the ERT that there was “consistent poor performance” on the part of the employee. The employer is only able to point out to one mishap in these three letters and not “consistent poor performance”.
    
60. Given the evidence, it was open to the ERT to make a finding that the employer was not able to establish that it had a valid cause to terminate the employment of WT. I am not convinced that there exists any evidence for me to alter that finding.
    
61. Since the cause for the termination was not established, the same was unlawful. What then follows is the assessment of the proper remedy that ought to be awarded to the employee for unlawful termination.
    
62. The ERT had awarded the remedy of 1.4 years of wages for unlawful dismissal. This was done with a reference point of the date of hearing till the date of determination. The employer took 1. 4 years to give a decision in this case and the delay that was caused by the ERT cannot be laid at any one party’s door. Ms. Prakash is right in asserting this point and also that the remedy is fixed in reference to many factors as set out in the case of Rentokil Initial Limited (supra).
    
63. If I were to use the factors outlined in Rentokil (supra), the pertinent facts and evidence that the ERT ought to have relied on was that the time between the dismissal and hearing was more than 2 years. It was some 2.2 years. The employer did not settle the matter. The employee attempted to look for work and the prospective employer’s required a clearance from the former employer.
    
64. Although there is no evidence to suggest that the former employer was actively involved in discouraging the new employer from giving work to the employee, there is no evidence that it did provide to the worker a certificate of service as required by law which the employee could use to seek further employment from new employers.
    
65. The certificate of service is necessary by law and this is used by most employees to seek employment in other places. The employer failed in its statutory duty which impeded the employee from finding work. S. 30 (6) of the ERP states that:
    

“Upon termination of a worker’s contract or dismissal of a worker, the employer must provide a certificate to the worker stating the nature of employment and the period of service”

66. I have not seen any evidence from the employer that the certificate of service was provided at any time. The employee’s act of not successfully finding other work to mitigate his loss should therefore be laid at the employer’s door.
    
67. Given the qualification and experience of this employee, he could or should have easily found work for himself but the lack of clearance was the impediment. If the employer had provided a certificate of service, I would have said that with that the employee ought to have found work within 6 months and that his remedy ought to be confined to 6 months wages but given the circumstances, I cannot flaw the remedy that the ERT awarded.
    
68. I then turn to the aspect of compensation granted for humiliation, loss of dignity and injury to the feelings of the worker. The ERT awarded this remedy because the ERT found that since he was one of the few indigenous managers and having achieved the position and qualification, it was indeed a real humiliation to be terminated under the circumstances.
    
69. Any termination to any one in any position is humiliating, gives a feeling of loss of dignity and injures the feelings of a worker. This is a fact flowing from the act of dismissal and not something for which the employer can be held liable unless it can be shown that the employer acted in bad faith or in a manner which was unfair and improper which caused the worker humiliation, loss of dignity or injury to his feelings.
    
70. In this case there was no evidence that in carrying out the dismissal, the employer acted in bad faith or in a manner which was unfair and improper. In fact the act of the employee achieving the position and the qualification shows bona fides on the part of the employer. If there was mala fides, neither would it promote the employee nor would it handpick the employee to undergo the educational courses at its expense.
    
71. Ms. Vaurasi says that the evidence that the General Manager did not know about the termination, the employee being given 3 to 4 minutes to clear his table, the HR Manager asking the employee to leave all establishes humiliation, loss of dignity and injury to the feelings of the worker.
    
72. I fail to see how these actions of the employer can be classed as mala fides and conduct which is improper and unfair. The General Manager does not need to know about all the terminations as Branch Managers and the Human Resources personnel are there to handle the issue. Further, it is part of most exit process that the employee be asked to clear his belongings and conduct a handover before an authorized staff. This normally takes place to ensure that the employee does not hinder with any of the employer’s property and/or evidence. This is not a deliberate act to humiliate the employee.
    
73. I do not find that there was any evidence which could establish that the employer’s conduct humiliated the employee and caused him loss of dignity and injury to the feelings. The award under this head was not justified and must be set aside.

Final Orders

74. In the final analysis, I make the following order:
    
    1. I allow the appeal partly and specifically on grounds 3 and 5 in that the ERT erred in fact in ordering the employer to pay wages for one year being compensation to the employee for humiliation, loss of dignity and injury to his feelings. I therefore set aside the award for one years’ wages to be paid to the employee for humiliation, loss of dignity and injury to the feelings of the worker.
       
    2. I dismiss the appeal under grounds 1, 2 and 4 and affirm the findings of the ERT that the termination of the employee was unlawful and that the employer ought to pay the employee wages’ for one year and four months’.
       
    100. For reasons of clarity, the total amount payable to the employee is wages for one year and four months. This sum should now be paid within a period of 21 days.
         
    4. Each party shall bear their own costs of the appeal proceedings.
       

Anjala Wati

Judge

28.11.2016

____________________

To:

1. Manager Legal CFL for the Appellant.
2. Shekinah Law for the Respondent.
3. File: Suva ERCA 14 of 2013.