Fagon v Negiso Distributors Pty Ltd [1999] PGNC 50; N1900 (10 June 1999)

Unreported National Court Decisions

N1900

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

WS NO. 589 OF 1995
BETWEEN: PADDY FAGON
PLAINTIFF
AND: NEGISO DISTRIBUTORS PTY LTD
DEFENDANT

Goroka

Kirriwom J
16 November 1998
10 June 1999

Cases Cited

Jimmy Malai v PNG Teachers Association [1992] PNGLR 571

Avia Ahi v The State (No. 1) [1981] PNGLR 81

Saki v The State [1980] PNGLR 173

Danny Sunu v The State [1984] PNGLR 305

Melchior Kasap & Peter Yama v The Electoral Commission [1988-89] PNGLR 318

Manga Logging Company Pty Ltd v South Pacific Oil Palm Development Pty Ltd (No. 1) [1977] PNGLR 80

Counsel

D. Umba for the Plaintiff

A. Pryke for the Defendant

10 June 1999

KIRRIWOM J: This is a claim for damages for unlawful termination of a contract of employment. The plaintiff was employed by the Defendant as its Depot Distribution Manager in June of 1994 at Goroka. After four months of working, on the second week of November 1994 he was dismissed from his employment with a cheque payment of K981.00 in lieu of notice. I will come to what is believed to be the reasons for his termination later.

Evidence in this trial was by Affidavits filed in these proceedings and relied upon at the hearing. None of the deponents were requested for examination in court. Plaintiff was his own witness and the Defendant filed affidavits of one Peter Kilamaina who was the accountant of the Defendant Company and Iffisoe Segeyaro the Managing Director of the Defendant Company.

The Defendant Company was involved in retail businesses besides being the major distributor for SP Brewery Pty Ltd products, in and around Eastern Highlands Province. The Plaintiff was employed to be responsible for the SP Wholesale Depot as the Depot manager. He was subordinate to the General Manager John Cooper. The latter was answerable to no-one else other than the directors of the Defendant Company including the Managing Director. According to the evidence before me, the General Manager had the Board’s full authority to hire and fire employees as he saw fit.

The Plaintiff it seems was unaware of this authority vested in the General Manager. He in fact was recruited into the defendant company following discussions with the Managing Director himself. The Plaintiff was then employed by PNG Motors as its salesman. He became acquainted with Mr Iffisoe Segeyaro in or about May 1994 when the latter went to buy a motor vehicle from PNG Motors during which time the Plaintiff discussed working with the Defendant Company. He was advised to write to Mr John Cooper, the General Manager. He did and then followed it up in person and next thing he got the job.

In the course of chasing up customers of the company who had debts owing, plaintiff discovered an anomaly in the transaction where the customer had paid its debt but the cheque was collected by the General Manager and not paid into the account. The Plaintiff complained to the Managing Director but nothing materialised. The Plaintiff and the General Manager were drifting apart. He even objected to the General Manager cashing his personal cheques from the company funds. In the second week of November 1994, only four months after he started work, he was given a cheque of K981 and advised that it was his termination pay. No reasons were given. Plaintiff was taken by surprise.

The Plaintiff complains that his termination was unjust and unfair because he was merely doing his job. And because the defendant company gave no reasons for dismissing him, it means it did not have valid reasons for terminating his employment, therefore his dismissal is unlawful. Whether or not the dismissal is unlawful depends on the nature of relationship between the Plaintiff and the Defendant company and the obligations of the parties under that relationship. There is consensus between the parties that the relationship is one of master and servant or employer and employee and this relationship is governed by the Employment Act Ch. 373.

The employment of the Plaintiff is partly written and oral contract for an unspecified period. Section 33(2) of the Act states that ‘a contract of service for an unspecified period of time shall be deemed to continue until terminated by either party under this Division.’ And the Act goes on to talk about notice of termination under s. 34. There is no evidence that the employer was required to give notice but notwithstanding section 34(4) states ‘where there is no provision in a contract of service for notice of intention to terminate, the length of the notice shall be not less than:

(a) one day’s notice ifethe employee has been employed for less than four weeks; or

(b) weee #821&;s notice if the the employe beenoyed ot lean foeks and for less thss than a an a year;year; or

(c) &#two weeks’ notice iice if the emp has emploor not less than than one yone year aear and for less than five years; or

(d) ҈& Four weur weeksks’ notice if mploys beeloyed for fior five yeve year orar or more.

Under section 35(2) employer following giving of notice to the employee, may proceed tothe eee his salary equy equivaleivalent to the period of the notice and terminate the contract quickly instead of waiting until the expiry of the Notice.

In this case the Plaintiff was entitled to one week notice. However, he was paid one week’s pay plus more in lieu of notice.

In a master and servant relationship, the master has the right to hire and fire his servants. The same principle applies in private employment situations such as in this case as opposed to public sector employment or those employment concerned under the registered industrial organisations. Under common law a master does not have to give reasons for his decision to remove a servant and to replace one with another. That is his unfettered discretion and the common law respects. Common law is part of the under-lying law in Papua New Guinea which was adopted on Independence and over the years since the Courts in this jurisdiction have adopted and cherished this common law principle.

In his submissions Mr Umba for the Plaintiff conceded that the relationship in this case is one of employer and employee and that the common law principle of the employer’s right to hire and fire clearly applied as was decided in Jimmy Malai v PNG Teachers Association [1992] PNGLR 571. It was further submitted that the employment was covered under the Employment Act Ch. 373 and on the face of it all, the termination was lawful.

But Mr Umba submits that this should not be the end of the matter. It is submitted that I must take the matter outside the context of employer and employee created by the Employment Act and look at the unfairness of the treatment given to the Plaintiff. He did nothing wrong other than over-zealously doing his job. Consequently he ended up with strained relationship between himself and the General Manager who subsequently sacked him. But there was no reason given for his sacking. He was therefore entitled to feel aggrieved as he had resigned from his previous employment banking on building a good and rewarding career with the Defendant Company. He had difficulties obtaining another employment till some 20 weeks later he was re-employed by PNG Motors in his old job as a vehicle salesman. Taking into account all these circumstances, it was submitted that I must exercise the power of this court given under s. 155 (4) of the Constitution and award damages to the Plaintiff for distress, frustration and disappointment suffered by the Plaintiff for his termination. This relief is sought in Clause 11(b) of the Statement of Claim of the Plaintiff’s Writ of Summons.

I have given serious thought to Mr Umba’s submission particularly in view of the fact that the Common Law principle of the master’s right to fire a servant without providing some explanation do not auger well in the light of remedies available under judicial review process of administrative actions of administrating bodies where some case law authorities stress the importance of reasons being given for decisions made. The Plaintiff in this case cannot avail himself that process because his employment falls outside the ambit of judicial review process. So can this Court compensate him for his distress, frustrations and disappointment arising from his termination without reasons or justifications by invoking the powers under section 155 (4) even if the termination of his employment is not unlawful? Section 155 (4) states ‘Both the Supreme Court and the National Court have an inherent power to make, in such circumstances as seen to them proper, orders in the nature of prerogative writs and such other orders as are necessary to do justice in the circumstances of a particular case.’

Section 155 (2) (b) and section 155 (4) have been brought in aid to provide dispositive powers to both the Supreme Court and the National Court to either assume original jurisdiction of a cause that was statutory barred where exceptional circumstances warranted on sound legal grounds or where it was in the best interest of justice for appropriate orders to be made. There are long list of cases that found their origin under this unique procedure such as Avia Ahi v The State (No. 1) (1981) PNGLR 81, Saki v The State [1980] PNGLR 173, Danny Sunu v The State [1984] PNGLR 305, Melchior Kasap & Peter Yama v The Electoral Commission [1988 - 89] PNGLR 318.

Each case must be decided on its own merits. Here is a case where the Plaintiff apparently has done nothing wrong in so far as his employment is concerned. The only wrong he may have done is that he over-stepped his powers and question the authority of his immediate supervisor, the General Manager. But he is not told that this is the reason for his termination. It is only assumed that this may be the reason. I have no doubt that he suffered distress, frustration and disappointment by the lack of reasons for his termination which under a judicial review process he would have been accorded some re-dress.

Employment Act clearly does not cover every situation at the work-place and common law applying to Papua New Guinean is the common law of England as at Independence on 16th September 1995. However common law principles have over the last decade or so progressed to accommodate changes in the law by statutory amendments in line with modern perception of the law globally. Section 155 (4) has been utilised to do justice in the circumstances of a case where the existing laws were deficient. As Kidu CJ said in SCR No. 2 of 1981; Re. s. 19(i)(f) of the Criminal Code [1982] PNGLR 150 at 155:

‘... Section 155 (4) exists to ensure that these rights or interests are enforced or protected if existing laws are deficient to render protection or enforcement. Frost CJ and Kearney Dep. in Manga Logging Company Pty Ltd v South Pacific Oil Palm Development Pty Ltd (No. 1) [1977] PNGLR 80 and Kapi J in Avia Aihi v The State [1981] PNGLR 675 expressed this same view although in different terminology. I consider, however, that Kearney DCJ’s statement quoted above of the nature of the power conferred by the provision his most explicit.’

I have given a very careful consideration to the Plaintiff’s alternative submission for this court to invoke the Courts inherent powers under section 155 (4) to make such orders as are necessary to do justice in the circumstances of this particular case. But I find myself unable to do so because the case authorities I have cited herein are distinguishable from this case. Avia Ahi had lost her right to appeal but the circumstances of her case were such that if the Court did not use its powers given by the Constitution s. 155 and restore her right to appeal, injustice would definitely be occasioned to her. In Danny Sunu (supra) the situation was similar. In Saki’s case the Applicant Saki would have been unduly detained longer than he ought to be because of the erroneous entries in his Warrant of Commitment which enabled his sentences to run from the beginning of the month instead of the date of sentence.

The Plaintiff’s predicament is the result of his own deliberate making and there is nothing so exceptional about it. He was no doubt distressed, frustrated and disappointed by the termination but he was able to overcome all these sufferings when he returned to his old job at PNG Motors. There is no real injustice where there is no permanent injury occasioned by operation of the law. This is the distinction that needs to be drawn between ‘interest of justice’ cases and commercially orientated suits.

The finding of the Court is that this employment was clearly covered by the Employment Act and its termination was lawful. In common law the employer need not give reason for his decision to hire and fire which is applicable in this case. Applicant though was aggrieved by this lack of reason, section 155 (4) remedy process cannot be applied to substitute what clear legal dictates have stated otherwise. Otherwise that will in itself constitute injustice. This submission therefore fails.

All in all Plaintiff’s claim is dismissed. Costs follow the event.

Lawyer for the Plaintiff: Acanufa & Associates

Lawyer for the Defendant: Pryke & Co.