Tiroia v Te Atinimarawa Co Ltd [2019] KIHC 118; Civil Case 20 of 2016 (30 October 2019)

IN THE HIGH COURT OF KIRIBATI 2019

CIVIL CASE NO. 20 OF 2016

[TERINGA TIROIA PLAINTIFF
[
BETWEEN [AND
[
[TE ATINIMARAWA COMPANY LTD DEFENDANT

Before: The Hon Chief Justice Sir John Muria

18 February 2019

Mr Reiati Temaua for Plaintiff
Ms Botika Maitinnara for Defendant

JUDGMENT

Muria CJ: The plaintiff took out a Writ against the defendant in this case, claiming damages for wrongful termination of employment. The plaintiff claims special, as well as, general damages. The defendant denied the plaintiff’s claims.

Brief background
2. The brief background of the case is that the plaintiff was employed by the defendant as a cleaner at a salary scale level of 19/1 with the salary of $182.00 per fortnight. Her employment started on 27 October 2014 and it was on six months’ probation.

3. While the plaintiff was employed in the defendant company, her husband had displayed bad attitude towards the staff of the defendant. He would openly get angry with the staff if his wife (the plaintiff) was given extra work to do in the office. The extra duty would involve assisting the Executive Assistant to do banking and other duties. These extra duties would result in the plaintiff getting home late, at times, after work.

4. There was an incident on 22 November 2014, which was less than a month after the plaintiff was employed. The plaintiff took an office laptop home and in the course of an argument between her husband and herself, the husband pulled the laptop from the plaintiff and broke it. Her husband was angry because she worked long hours in the office. The plaintiff had to make a report about the damaged laptop.

5. There was also evidence from Marawa Hongkai of an incident at his home. The plaintiff’s husband came to Mr Hongkai’s home on 6 March 2015 in the evening and accosted Mr Hongkai about the defendant employing the plaintiff. The plaintiff’s husband vented his anger and displeasure at the defendant for employing his wife.

6. It was no secret that the plaintiff’s husband openly displayed his anger toward the defendant’s staff while the plaintiff was working with the defendant. On one occasion he stopped the office vehicle (double cab) just to check on the plaintiff and to see where the plaintiff was sitting in the vehicle. It is not clear when this incident occurred. However, from Mr Hongkai’s evidence and the CEO’s letter of 13 May 2015, the incident occurred before the plaintiff was suspended.

7. As a result of the husband’s behaviour toward the defendant, defendant’s staff and defendant’s property, the defendant wrote to the plaintiff on
17 April 215, suspending her from her employment for one (1) month without pay. While the plaintiff was still on suspension, the defendant’s Chief Executive Officer wrote to the plaintiff on 13 May 2015 terminating her employment.

Issues
8. On the plaintiff’s behalf, Mr Temaua of Counsel for the plaintiff, put forward four (4) issues for the Court’s determination. These are:

1. Whether the suspension was warranted in the eyes of the law?

2. Whether the termination was warranted in the eyes of the law?

3. 3. Whether Clause C5(III) of the National Conditions of Service was applicable to warrant a termination without indicating any cause or reasoning of taking such action.

4. Whether the plaintiff is entitled to get compensation on all that she has claimed.

9. In the Court’s view there are only two issues that need to be determined in this case, namely whether the plaintiff’s termination was lawful, and secondly, whether she is entitled to compensation for being terminated. However, as Counsel for defendant endorses the issues raised by the plaintiff, the Court will deal with them as presented.

10. The claim by the plaintiff is for unlawful termination of her employment. She claims that her suspension as well as her subsequent termination were not lawful. She prayed that she should be compensated consequently.

Plaintiff’s Employment Contract
11. The terms of the plaintiff’s employment with the defendant were contained in the “Letter of Offer” dated 27 October 2014 which the plaintiff accepted. The “Letter of Offer” was signed by both parties on 29 October 2014. The effective date of the commencement of the plaintiff’s employment was
27 October 2014.

12. The plaintiff’s tenure of employment was set out in Clause 6 of the “Letter of Offer” and it states as follows:

“6. Your employment will be for an initial period of six months on probation commencing from 27 October 2014 (to be agreed by both parties). The offer is also subject to continued satisfactory performance. Appointment may be terminated by one month’s notice”.

13. Did the defendant have the power to suspend the plaintiff? The answer must clearly be “Yes”. The plaintiff was still on probation when she was suspended. There was nothing in the “Letter of Offer” preventing the defendant from suspending the plaintiff during the probation period even without giving any reason.

14. The plaintiff, however, was called by the defendant’s CEO following the reported incidents involving her husband and advised her to settle matters with her husband. The plaintiff told the CEO that she and her husband were separated. The evidence from Mr Hongkay as well as from the plaintiff herself clearly shows that the plaintiff and her husband were far from separated. Perhaps, as the CEO stated in his letter of 13 May 2015, the plaintiff’s claim that she and her husband were separated was simply to gain the defendant’s confidence that she should continue to keep her job and for the defendant not to be bothered about her husband’s behaviour.

15. There is no other provision in the “Letter of Offer” apart from Clause 6, covering the relationship between the probationary employee (plaintiff) and the employer (defendant). The Employment Ordinance 1977 (Cap 30) which was still applicable at the time of the termination of the plaintiff’s employment provided no guidance on the matter. The National Conditions of Service does not apply here as the contract between the defendant and plaintiff made no mention that the provisions of the National Conditions of Service would apply. Thus the only places to look to are the plaintiff’s contract and the common law.

16. In the course of his submission, Mr Temaua of Counsel for the plaintiff referred the Court to the following authorities decided by the Courts in Kiribati: Toawea Biribo –v- The Attorney-General in respect of Public Utilities Board, High Court Civil Case 27 of 2000 (8 May 2001); Arata Betaia –v- Development Bank of Kiribati (15 October 2014) High Court Civil Case 183 of 2010 and Kiamaro Riteri
–v- Betio Shipyard Ltd (2 May 2017) High Court civil Case No. 146 of 2011. The cases of Biribo and Betaia were concerned with employees on permanent employment. They do not apply to the present case. The case of Riteri was a case of a person contracted to do a job for specified period of 85 days. It was a one-off contractual job. That also is not the same as the present case.

17. Under common law, an employee who is on probation has a much less security of tenure of employment than that of a permanent employee. As such an employer has unfettered discretion to terminate a probationary employee without reasons: Re Pioneer Electric (Manitoba) Ltd –v- USW Local 4297
[1970-71] CLLC 14071.

18. The position is also aptly described in Re United Electrical Workers and Square D Co Ltd (1955) 6 LAC 289 where the Court stated at para 8:

“An employee who has the status of being “on probation” clearly has less job security than an employee who enjoys the status of a permanent employee. One is undergoing a period of testing, demonstration or investigation of his qualifications and suitability for regular employment as a permanent employee, and the other has satisfactorily met the test. The standards set by the company are not necessarily confined to standards relating to quality and quantity of production, they may embrace consideration of the employee’s character, ability to work in harmony with others, potentiality for advancement and general suitability for retention in the company”.

19. In the present case, the plaintiff was on probation when she was suspended without pay with a final warning. While on probation, the defendant was entitled to consider, not only the quality of the plaintiff’s work performance, but also her suitability to continue to be retained in the defendant’s company in the light of her husband’s behaviour toward her while in the employment with the defendant, as well as her husband’s behaviour toward the defendant and its other staff and employees.

20. The plaintiff was suspended while she was still within her probationary period. She was terminated at the end of her probation period, although while still on suspension. The plaintiff was not able to resume duty on 15 May 2015 as stipulated in her letter of suspension since effectively she was terminated at the end of her probationary period. That decision was within the right of the defendant to make in the exercise of its discretion whether to continue to keep a probationary employee.

21. It may sound unfair that the plaintiff should pay the price of her husband’s bad behaviour toward her employer, the defendant and other defendant’s employees. But it is within the defendant’s right to refuse to continue to retain the plaintiff as its employee, more so, while still on probation, if her husband’s attitude made it not conducive for the defendant to continue employing her. It is within the defendant’s right to “hire and fire”. There are exceptions to that principle which are not material to the present case.

22. In this case the upshot of the behaviour of her husband toward the defendant and its staff and other employees, not only led to the plaintiff’s suspension, but also resulted in her “no longer needed” by the defendant and had to be “laid off” at the end of her probation.

23. In the plaintiff’s case, since she was on probation which was a testing period for the plaintiff to demonstrate that she was suitable to be made a permanent employee, all that the defendant needed to do was to decide whether it should retain the services of the plaintiff or not at the end of that probation period. At the end of that probation period, the defendant was within its right to decide that it no longer wished to make the plaintiff its permanent employee and so terminated her employment in the defendant company. No reason or justification was required of the defendant to give. That is the end of the plaintiff’s employment in the defendant company. That was the reality of the plaintiff’s position. Rules of natural justice did not apply to curtail the defendant’s right to “hire and fire” while the plaintiff was on probation.

24. The answers to both questions (1) and (2) on whether the suspension and termination were warranted in the eyes of the law must clearly be “Yes”. Question (3) asks whether Clause C5(iii) was applicable. The answer to that must be “No”. The provisions of National Conditions of Service do not apply here since the terms of the plaintiff’s employment were expressly set under the “Letter of Offer” signed between the defendant and plaintiff on 29 October 2014.

25. The remaining question asks “whether the plaintiff is entitled to get compensation on all that she claimed” and to this I shall now turn. The plaintiff claims unpaid wages from 13 May 2015 to the date of judgment; unpaid charge allowances; unpaid wages in lieu of one month notice; cost of subsistence allowance; phone card e3xpenses; transport fare; general damages to be assessed; reinstatement; interest and costs. Against these claims, the plaintiff’s position is clear. She was on probation and she was terminated at the end of her probation period.

26. The plaintiff, although on probation, is not completely without recourse in this case. Her contract of employment provides that she is entitled to one month notice before termination. In the absence of the one month notice she is entitled to be paid one month’s salary in lieu of notice. There is, however, evidence in this case that the defendant paid one month’s wages in lieu of notice in the sum of $364.00 to the plaintiff on 15 March 2018.

27. In addition to notice pay, the plaintiff claimed unpaid wages up to the date of judgment. However, as a probationary employee, the plaintiff is only entitled to any unpaid wages up to the date of termination. The plaintiff’s salary was $182.00 per fortnight. She is therefore entitled to be paid her outstanding salary calculated at the rate of $182.00 per fortnight up to the date of termination which was 13 May 2015.

28. The plaintiff also claimed unpaid leave grants for the year 2014 in the sum of $633.10 and for the year 2015 in the sum of $750.00. By her contract of employment, the plaintiff was entitled to annual leave at the rate of 14 working days per year. An “annual leave”, as described, is earned after completing one year of employment. The plaintiff in this case had only worked for six months (probation period) but was terminated at the end of her probation period. The plaintiff had not yet earned her “annual leave” although she would be entitled to leave calculated on a pro rata basis.

29. The evidence shows that on 17 December 2014 the plaintiff was paid $104.10 for leave grant for 2014. Then on 13 February 2015 the plaintiff was paid leave grant in the sum of $750.00 for 2015. By her claim, the plaintiff is now claiming “unpaid remaining leave grant for 2014” in the sum of $633.10 and “unpaid remaining Leave Grant for 2015” in the sum of $750.00. Unfortunately for the plaintiff, her further claims for “unpaid remaining leave grant” for 2014 and 2015 have no merit. She is not entitled, as a probationary employee, to any further leave grant more than she had already received from the defendant on 17 December 2014 and 13 February 2015 by way of leave entitlement. In fact, the defendant had been over gracious to her for paying her $854.10 as leave grant for the months she worked as probationary employee. The plaintiff is not entitled to any “remaining leave grant” for 2014 nor to any “remaining leave grant” for 2015.

30. In so far as the plaintiff’s other claims of charge allowance, cost of subsistence living, phone card expenses and transport fare, very little or no evidence has been adduced to demonstrate that the plaintiff is entitled to those claims under her terms of employment. Her claims under those heads cannot be sustained.

31. Equally, the plaintiff’s claim for general damages cannot be sustained in this case. Not only that there is no evidence of loss for which general damages should be awarded to compensate, but there is no entitlement to general damages in this case. This claim is also rejected.

32. The plaintiff was employed on six months’ probation. She was terminated at the end of her probation period. She claims that she should be reinstated. The burden is on the defendant to show that the plaintiff would not otherwise have been employed at the time of her claim for reinstatement. In this case, at the end of the plaintiff’s probation period, the defendant had determined that it should relieve itself of any further obligation to continue employing the plaintiff. The defendant was entitled to do that. The plaintiff’s claim for reinstatement cannot succeed.

Conclusion
33. In the circumstances of this case and on the evidence before the Court, the plaintiff was lawfully terminated from her employment at the end of her probation period. She had been paid her one month’s salary in lieu of notice. She had also been paid her leave grant for 2014 in the sum of $104.10 and the full year leave grant for 2015 in the sum of $750.00.

34. I have stated earlier in this judgment that the plaintiff was not entitled to a full year leave grant for 2015 because she worked only for 4½ months in 2015. However, the defendant, in this case, had been gracious to the plaintiff to have paid her the full 2015 leave grant. The defendant had not made any counter-claim against the plaintiff in this regard.

35. At the end of the day, the plaintiff in this case is only entitled to the balance of her salary up to the date of the termination of her probationary employment. If her salary up to the date of her termination has not yet been paid to her, that should be paid to her immediately. To that extent her claim succeeds, otherwise her case against the defendant is dismissed.

36. This is a case where the plaintiff should pay the defendant’s costs to be taxed, if not agreed.

Dated the 30^th day of October 2019

SIR JOHN MURIA
Chief Justice