[1998] PNGLR 106

PAPUA NEW GUINEA

[national court of justice]

EREMAN RAGI

V

PUBLIC OFFICERS SUPERANNUATION FUND BOARD;
THE HONOURABLE IAIRo LASARO; and
ISSAC LUPARI

waigani: andrew j
26 January 1998

Employment law – Statutory body –Contract of employment – Public Officers Superannuation Fund Board – Contract of employment of Managing Director – Requirement of approval of contract by Salaries and Conditions Monitoring Committee Act s 10(1) and s 12(5).

Facts

The plaintiff was initially appointed as Managing Director of the first defendant in 1991 under his first contract. That contract was due to expire in August 1997. In February 1997, the plaintiff and the Minister for Finance as minister responsible signed a second contract for a further period of four years. In December 1997, the defendants purported to decide that the plaintiff’s second contract of employment was invalid and he was no longer validly appointed as its chief executive because inter alia, the second contract has not been approved under the Salaries and Conditions Monitoring Committee Act. The plaintiff sought declaratory relief that he continued to legally occupy the position of Managing Director of the Public Officers Superannuation Fund Board.

Held

1.	Section 12(5) of the Public Officers Superannuation Fund Act provides that the terms and conditions of employment of the Managing Director shall be fixed by the responsible Minister subject to the Salaries and Conditions Monitoring Committee Act, particularly s 10(2) that stipulates that a determination or variation of the salaries and conditions of employment of an employee made otherwise than in accordance with this Act is void and any agreement, written or oral intended to give effect to such determination or variation shall be unenforceable at law.

2.	On the facts, there has been no approval granted by the Salaries and Conditions Monitoring Committee of the terms and conditions of the second contract of February 21, 1997. Accordingly the second contract of employment relied upon by the plaintiff is void and unenforceable at law.

Counsel

G Sheppard, for the plaintiff.
P Paraka, for the defendants.

26 January 1998

Andrew J. This is an application for judicial review. The plaintiff/applicant seeks orders, inter alia, in the following terms: 

"a declaration that the recommendation of the first defendant, and the decision of the second defendant on the 7th November, 1997 (the "Decision") that the plaintiff’s contract of employment with the first defendant is void and that he no longer occupies the position as the Managing Director of the Public Officers Superannuation Fund (POSF) are invalid."

The background of this matter is as follows. This dispute concerns the position of the managing director of the POSFB. On the 7th December 1997 the defendants purported to decide that the plaintiff’s contract of employment was invalid and that he no longer occupied the position of managing director of the POSFB. Mr Ragi was first validly appointed to this position in 1991 under a contract of employment executed in accordance with the Public Officers Superannuation Fund Act by the then Minister for Finance. There is no contention on the part of the respondents that this first contract is invalid. It was due to expire in August of 1997. On or about the 21st February 1997 a contract for a further period of 4 years as Managing Director of the POSF, commencing on the 6th August 1997, was signed by the plaintiff and the then Minister for Finance who signed the contract as the Minister responsible for the POSF under the Public Officers Superannuation Fund Act. This contract was expressed to commence on the 6th August 1997 immediately after the expiry of the term of the first contract. The respondents say that Mr Ragi was remunerated under the improved terms and conditions of the second contract as from January 1997.

The respondents maintain that the position of Managing Director of the POSF is vacant because Mr Ragi’s first contract has expired (in August 1997) and the second contract is invalid because, it was entered into before the expiry of the first contract, and it was not approved of by the Salaries and Conditions Monitoring Committee, as required under its terms and the legislation.

There is a dispute as to whether the terms and conditions of the second contract have been approved by the Salaries and Conditions Monitoring Committee (SCMC). The applicant makes reference to such an approval dated the 7th March 1996. This is however an approval for terms which are very different to those, which are included in the second contract of the 21st February 1997. The applicant says that the first contract by its terms allows the Minister and the Board to vary the contract and that the SCMC by its letter of the 7th March 1996 had given prior approval for such a variation. Clause 14.1 of that contract provides: 

"The Minister and or the Board may vary, amend, add to or delete any or all of the conditions of this contract for any reason whatsoever including as a consequence of the Board or other Governmental body restructure, either by mutual agreement with the Managing Director or by giving to the Managing Director 3 calendar months notice in writing."

But s 12(5) of the Public Officers Superannuation Fund Act provides that the terms and conditions of employment of the Managing Director shall be fixed by the Minister subject to the Salaries and Conditions Monitoring Committee Act and s 10(2) of that Act provides that a determination or variation of the salaries and conditions of employment of an employee made otherwise than in accordance with this Act is void and any agreement, written or oral, intended to give effect to such determination or variation shall be unenforceable at law.

On the facts of this case, I am satisfied that there has been no approval granted by the SCMC of the terms and conditions of the second contract of the 21st February 1997. If any further proof of this is required it can be seen in Mr Ragi’s letter of the 4th November 1997 to the Chairman of the SCMC requesting the committee to "ratify the contract" entered into on the 21st February 1997. The SCMC replied on the 6th November 1997 stating that no previous submission had been made to the SCMC on the matter of approval and approval was not granted.

I am satisfied that the POSF Board did resolve on the 27th December 1996, to renew Mr Ragi’s contract and that the Minister then appointed Mr Ragi as Managing Director and the second contract was duly executed on the 21st February 1997. But the terms and conditions of employment have not been approved by the SCMC as required by s 12(5) of the Public Officers Superannuation Fund Act. Further by s 10(1) of the Salaries and Conditions Monitoring Committee Act a public authority shall not determine or vary the salaries and conditions of employment of any employee except in accordance with this Act and as the requisite approval of the salary and conditions was not granted by the SCMC then by s 10(2) of that Act, the contract of the 21st February 1997 is void and unenforceable at law.

Accordingly the declarations sought by the applicant are refused and the application is dismissed.

Costs to the respondents as agreed or taxed.

Lawyer for the applicant/plaintiff: Maladinas Lawyers.
Lawyer for the respondent/defendant: Paraka Lawyers.