Magini v Central Provincial Government [2003] PGNC 45; N2468 (26 September 2003)

N2468

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

OS NO. 353 of 2000

BETWEEN

LAHUI MAGINI

Plaintiff

AND

THE CENTRAL PROVINCIAL GOVERNMENT

Defendant

Waigani : Sakora J

2002 : 21 February
2003 : 26 September

EMPLOYMENT LAW – Contrast of Employment – Oral – Draft written contract – Terms and Conditions of – Non-payment – Employment Act –Public Services (Management) Act – National Court Rules; O. 4, r. 31.

Counsel:
J B Nanei for Plaintiff.
J Goava for the Defendant.

26 September 2003

SAKORA J: This matter came before me on 21 February 2002 as an application pursuant to a Notice of Motion filed with an Originating Summons on 4 July 2000 seeking orders in respect of a claim for payment of certain entitlements under terms and conditions of an oral contract of employment. There is no dispute as to the existence of an oral agreement between the parties for the plaintiff to be engaged to provide professional services of a specified kind to the defendant government for reward. The only issue here is as to whether or not the allowances the plaintiff claims here were in fact part of his entitlements in the agreed terms and conditions of employment.

The plaintiff is an architect by profession having graduated from the University of Technology, Lae, on 25 November 1983 with the degree of Bachelor of Architecture and Building. He is duly registered as a practising architect under the Architects (Registration) Act 1989. On 6 April 1998 the plaintiff commenced employment with the defendant as a Provincial Architect at Architect Class 4 level. Before being thus engaged, an interview for the position was conducted by two senior officers of the defendant: the Manager of Works and the Provincial Administrator.

The plaintiff’s claim is for accommodation entitlement and transport allowance under the agreed terms and conditions of his employment. He claims that he had been paid K200 per week allowance for accommodation until this was ceased on 30 June 1999; transport allowance was never paid as agreed at the rate of K100 per week. Thus he claims entitled to be paid the sums of K14,600.00 and K11,400.00 respectively due and owing up to 30 November 2000, the date upon which he took up a new position with the National Public Service.

It would appear that after the plaintiff filed this proceedings on 4 July 2000, the defendant had served on him on 21 August 2002 notice of termination of services dated 2 August 2000. The termination was to take effect from close of business 25 August 2002. I return to these events later in any judgment.

When the matter came before me the Originating Summons did not appear to me to demonstrate any cause of action, but merely sought declaratory order and what appeared to be an order in the nature of mandamus. A perusal of the file indicated that the defendant’s lawyers filed a Notice of Motion seeking directions and orders under O. 4, r. 31 of the National Court Rules (NCR) for pleading the case. The application was not proceeded upon and determined. Nevertheless, the plaintiff had filed on his behalf his Statement of Claim with detailed claims in anticipation of orders for pleading.

I have considered what has and has not happened in relation to progressing the plaintiff’s application and, under the circumstances I am satisfied, firstly, that with the Originating Summons and its defects (absence of a cause of action), a Court properly seized of jurisdiction would have directed the plaintiff to "convert" (take necessary action to) the Originating Summons into a process demonstrating a proper cause of action such as would be done in, for instance, a writ of summons. Then, pursuant to such orders and directions under O. 4, r. 31 NCR, the case could have proceeded to be heard and determined.

So I make or give those directions and orders now, and accept the plaintiff’s Statement of Claim filed 2 May 2001 as sufficient compliance with those directions pursuant to O. 4, r. 31 (1), (2) and (3) NCR. And pursuant to O. 4, r. 31 (3) (b), I direct further that the parties file any affidavits not already filed in respect of their cases and that evidence in this case will be given by affidavits and orally (only where notice of intention to cross-examine a deponent has been duly filed and served).

The Evidence

In support of the plaintiff’s case, four (4) affidavits have been filed and relied on. These are affidavits sworn by the plaintiff himself and identified as follows:

• Exhibit "A" – sworn 30 June and filed 4 July 2000;
• Exhibit "B" – sworn and filed 22 August 2000;
• Exhibit "C" – sworn and filed 8 December 2000; and
• Exhibit "D" – sworn 2 and filed 5 February 2001.
  

The defendant has had two (2) affidavits filed on its behalf. These are identified as follows:

• Exhibit "A"- sworn by Buga Gulaga on an undated day and filed 7 August 2000.
• Exhibit "B" – sworn by Buga Gulaga on 20 and filed 22 September 2000.
  

The plaintiff’s case is that the position was verbally offered and accepted on the following terms and conditions:

• Salary at K20,800.00 per annum;
• Accommodation allowance at K200.00 per week; and
• Vehicle/transport allowance at K100.00 per week.
  

He asserts that the oral contract was for an initial period of two (2) years, renewable thereafter on a two (2) year basis. Subsequently the plaintiff was given a draft written contract by the defendant, and this was returned after perusal for the final draft. But nothing further took place on the draft. In the meantime, all other terms and conditions of the employment agreement were being honoured by the defendant with the exception of the K100.00 per week allowance for transport. It is further asserted that the housing allowance ceased at the end of June 1999 without any reasons or explanations being offered to him.

The plaintiff’s initial period of two (2) years employment expired on 6 April 2000, and as agreed he went onto his second two (2) year term without any changes. As noted earlier it was on this second term that he instituted legal proceedings in respect of the two allowances. In support of his claim the plaintiff has annexed to his affidavit (Exhibit "A" supra) Annexure "B" which is a letter from the Provincial Administrator (Mr Vari Fore) to the Acting Provincial Administrator dated 24 May 1999 in respect of the engagement of the plaintiff, the contract of employment that had not been finalised, with what appears to be the final instruction or directive in the following terms:

Mr L. Magini should be paid his entitlements as if he has signed the contract because he has been providing the services. (underlining mine)

This letter had copies minuted to the following officers/persons: Manager Division of Human Resources Development; Provincial Legal Officer; and the Secretary, Department of Personnel Management. The letter was in relation to the plaintiff’s rental accommodation, referring to it as:

In that contract he was to have received accommodation allowance.

There was no mention of any entitlement to transport or vehicle allowance in that letter. The plaintiff’s Exhibit "B" is his affidavit sworn 22 August 2000. This affidavit deposes to the termination of his employment pursuant to the service on him on 21 August 2000 of a copy of the notice of termination of service dated 2 August 2000 under the hand of Dr Sibona Kopi, the Provincial Administrator.

Plaintiff’s Exhibit "C" is his own affidavit also sworn and filed 8 December 2000. He deposes that on 30 November 2000 he took up a new employment with the Public Service, thereby ceasing his employment with defendant provincial government. His new appointment is described as Provincial Architect Grade 12 (Annexure "A" to the affidavit is a letter dated 21 November 2000 from the defendant’s Assistant Manager – SDT in the Human Resource Management). Annexure "A" confirms the permanent appointment within the defendant provincial government. Further confirmation is offered by the defendant’s lawyers in their 23 November 2000 letter to the plaintiff’s lawyer (Annexure "B").

Evidence put before the Court and relied upon in support of the defence consists of the two affidavits by Buga Gulaga (supra). The deponent is the Manager of the Division of Human Resources Development, directly responsible for employment and personnel matters of the defendant. His depositions confirm much of what the plaintiff says in relation to his employment with the defendant. The only divergence from the plaintiff’s version is the plaintiff’s status as at the time of instituting the proceedings in respect of the two allowances.

It is the defendant’s case that the plaintiff was engaged on a "casual" basis for a period of three (3) months pending the finalisation of a written contract of employment. As such he was not entitled to vehicle allowance. In any case, it is argued, the plaintiff has no cause for complaint as there has "never been an agreement as to the actual terms and conditions of Lahui Magini’s employment "(paragraph 7 of the affidavit of Buga Gulaga, Exhibit "A", supra). Defendant’s Exhibit "B" is the second affidavit of Buga Gulaga (supra), which affidavit adverts to the defendant’s notice of termination of service served on the plaintiff (supra), emphasising the assertion that the plaintiff was not an "assigned public servant" and, thus, liable to have his employment terminated as suggested by the 2 August 2000 notice (supra).

Comments on the Evidence

Whilst the plaintiff’s claims were before the National Court awaiting consideration and final determination, the defendant initiated action to terminate the plaintiff’s employment. The first point to make is that this action intended to affect the rights and interests of the plaintiff in his relationship of employment with the defendant was taken only after the plaintiff sought to protect and enforce what he considered to be his rights through the courts.

No explanation or reason(s) were offered for this, despite the existence of an oral employment agreement that, through no fault of the plaintiff had not been reduced to a written contract as directed by then Provincial Administrator (his endorsement of 14 April 1998 on the Minute to him from Mr Kapani Aruai, the Manager, Works and Transport of even date – Annexure "A" to the affidavit of Buga Gulaga filed 7 August 2000, supra). The "casual employment" status that the defendant relies on was a period of three (3) months whilst awaiting the execution of a written contract. Following the Provincial Administrator’s endorsement, Mr Buga Gulaga himself directed the OIC Pay on 21 April 1998 in the following manner:

Arrange to put Magini on casual payroll for only 3 months as approved by PA. (Underlining mine).

The plaintiff commenced employment on a two (2) year term as agreed, and when this initial period expired on 6 April 2000, he went onto a second two (2) year term. The notice of Termination of Service (supra) signed by the Provincial Administrator Dr Sibona Kopi (supra) contained, on the second paragraph, this rather inane statement:

I have considered the status of your employment and decided to terminate your services forthwith as of close of business on 25th August, 2000.

The draft written Contract of Employment is Annexure "C" to the affidavit of Buga Gulaga filed 7 August 2000 (supra). The notice of Termination of Service (supra) gave four (4) days from service of the notice on 21 August 2000, though it had been dated 2 August 2002. Annexure "C" (supra) is part of the evidence in support of the defendant’s case.

In relation specifically to notice of termination, clause 7.1 (page 4) of the draft Contract is in the following terms:

7. Termination
   

7.1 The employment under this agreement may be terminated by either giving to the other at least one months prior notice in writing and in that event this contract shall be deemed to have terminated as from date of expiry of the period of the notice. (underlining mine).

The second point to make is that the very allowances the plaintiff makes claims over are provided for in the draft Contract (supra). Under clause 4, the subject is dealt with in the following terms:

4. Renumeration (sic)
   

Subject to the Act, the employee shall be paid the salary for the office specified in the schedule.

And the Schedule (page 6) at clause 4 makes the following provision:

Clause 4.1 The Renumeration (sic)

Equivalent of a level 1 salary in the National Public Service. Vehicle Allowance of K50 per week and housing allowance of K100 per week.

The third point to make, which does make nonsense of the defendant’s suggestions of "casual" employment, a "private employment" as opposed to an assigned public servant from the National Public Service, is that the Act referred to in the draft Contract (supra) is the Public Services (Management) Act: see, clause 1.1 (A) of the draft.

Brief Discussions on Law

The most common working relationship is that of employee and employer. There are many different types of employment relationships recognised by law, ranging from permanent employment (part-time or full-time) to temporary or fixed-term employment to casual employment, piecework, outwork and so on. The employment relationship sets up various rights and obligations. Many of these are fixed by laws and regulations; others have developed under the common law. All these aspects of the relationship are not intended to be canvassed here, as the only issue for consideration and determination is as noted at the outset: whether or not the plaintiff was entitled to any housing and transport allowances under the oral contract of employment (and to be reflected in a duly executed written agreement).

In this respect it needs to be stated here that the principal legislation dealing with conditions of employment is the Employment Act (Ch 373). But this Act does not apply in all cases, as there may be other legislation covering special classes of employees. Such a legislation is the Public Services (Management) Act which applies to members of the public service who are not covered by the Employment Act. Section 3 of this Act makes provisions in relation to its application, and sub-s (1) is pertinent and is in the following terms:

3. Application
   

Except where it is specifically provided otherwise, this Act does not apply to or in relation to the employment of a person –

(a) by the State in carrying in the vicinity of his village from day to day, or
(b) under any other law in force in the country.

And pursuant to s 2, the State and every authority and instrumentality of the State are bound by the Act. In the instant case, the defendant provincial government is such an authority or instrumentality.

A contract of service is a "contract of employment", and such a contract is an agreement between the parties with the intention to enter into a legal relationship as distinct form a purely social relationship. And a legal relationship contains agreed terms that the courts will enforce if either party defaults on or disobeys.

Employment can be ended for a number of reasons and in a number of ways. The most usual are resignations or dismissals. Generally, employment may be lawfully terminated as long as the necessary notice (or payment in lieu of notice) is given. However, various remedies may be available if the dismissal falls into certain categories that make it harsh, unreasonable or unjust. If either the employer or employee wish to terminate employment, they must give ‘reasonable’ notice. The minimum notice period is usually specified in the governing legislation or the employment contract, and usually corresponds to the period for which wages are paid. Other considerations might include the status and level of the position. Casual employees are usually employed on an hourly or daily basis, and notice may be given on that basis.

If an employee is dismissed without proper notice, the employee may take legal action to recover money owed by the employer. This usually amounts to the wages that would otherwise have been earned during the notice period.

Conclusions

After considering all the material before me, I am satisfied of and make or come to the following conclusions. There was and is a legally enforceable contract of employment agreed and entered into between the plaintiff and the defendant provincial government, under which the plaintiff formally commenced employment on 6 April 1998 as a Provincial Architect. This agreement, initially oral, was the result of an interview of the plaintiff by two senior officers of the defendant, the then Provincial Administrator Mr Vari Fore, and Mr Kapani Aruai the Manager Works and Transport. The existence and enforceability of this oral agreement are amply demonstrated to my satisfaction by the following materials:

• Defence Exhibit "A" – the first affidavit of Buga Gulaga (supra), and Annexure "A" to that affidavit – 14 April 1998 Minute to the Provincial Administrator from Mr Kapani Aruai and Mr Vari Fore’s endorsement as well as Mr Gulaga’s on the last page of that Minute.
• Annexure "C" to Defence Exhibit "A" – the draft Contract of Employment.
• Plaintiff’s Exhibit "A" – his own affidavit (supra); and Annexure "B" to that Exhibit, the Provincial Administrator’s letter of 24 May 1998 to the A/Provincial Administrator confirming once again the entering into and existence of the agreement.
• Plaintiff’s Exhibit "B" – his own affidavit of 22 August 2000 (supra).
  

It was the intention of the parties that the oral agreement would be converted into a formal written document. To which end a draft was produced by the servants and agents of the defendant and forwarded to the plaintiff, who, upon perusing and making certain comments, returned it to the defendant for finalisation. There was no need for him to sign it (as suggested by Mr Gulaga) at that stage as the draft needed to be finalised. The fact that the draft was never finalised by the defendant’s officers for formal execution is neither here nor there!

The so-called "casual" status was, as demonstrated by evidence (supra), only for a period of three (3) months whilst the draft written Contract was being worked on. In any case, the three (3) months came and went, as indeed the initial two (2) year appointment came and went. The two (2) year period was renewable, as indeed it was, upon expiry of the initial period on 6 April 2000.

The defendant’s notice of Termination of Service (supra) was in contravention of the agreement, firstly, as an act of harassment or reprisal for the plaintiff availing of the legal avenues to protect and enforce his rights under the agreement, and, secondly, as constituting inadequate notice. Fortunately for the defendant, this breach, this contravention, was judicially rectified by the stay and restraining orders the plaintiff obtained on 29 August 2000.

The plaintiff was entitled to both housing and transport allowances under the agreement.

This, I am satisfied, is borne out by the documentary evidence before me and canvassed (supra). The defendant was paying accommodation allowance of K200.00 per week until it was ceased without explanation on 1 July 1999. On 30 November 2000 the plaintiff secured another position with the Public Service (supra). Thus, I concluded he is entitled to be recompensed for the period 1 July 1999 when his allowance was illegally withheld or ceased to 30 November 2000 when he took up his new appointment.

In relation to his claim for vehicle allowance, the entitlement here was part of the terms and conditions of employment agreed orally. Otherwise, this particular allowance would not have been included in the draft Contract (clause 4.1, schedule, supra). I accept the plaintiff’s evidence that the transport/vehicle allowance was agreed to be at the rate of K100.00 per week. Otherwise, there would not have been any issue taken with the amount of K50.00 that appears in the draft (notations on clause 4.1, schedule, supra). Thus, I conclude that the plaintiff was and is entitled to be recompensed for unpaid transport/vehicle allowance from date of appointment 6 April 1998 to 30 November 2000 at the rate of K100.00 per week.

In the end result it is the judgment of this Court that the plaintiff was entitled to accommodation and transport allowances pursuant to the contract of employment agreed upon and entered into between himself and the defendant, Central Provincial Government.

During the currency of his employment with the defendant, including the period following the purported termination of employment the notice in respect of which was stay by orders of the court (supra), the plaintiff was paid his correct and agreed salary of K800.00 gross per fortnight. Thus, no claim has been made in respect of this whilst General and Special Damages are claimed in the Statement of Claim filed 2 May 2001 (supra), but not in the initial originating process the Originating Summons, there is no evidence before me on these. I, therefore, decline to make any findings in respect of them. The Court thus makes the following orders consequent upon this judgment:

1. Judgment is ordered to be entered against the defendant on the plaintiff’s claim for Accommodation and Transport allowances pursuant to the Contract of Employment.
2. The defendant is ordered to pay the plaintiff those allowances calculated in the following manner:
   • (a) Accommodation @ the rate of K200.00 per week for the period 1 July 1999 to 30 November 2000 K14,600.00.
   • (b) Transport/Vehicle 2 the rate of K100.00 per week for the period 6 April 1998 to 30 November 2000 K11,400.00

Total K26,000.00

3. Interest at the rate of 8% pa., pursuant to Judicial Proceedings (Interest on Debts and Damages) Act calculated from the date of initiation of this proceedings 4 July 2000 to date of judgment 26 September 2003.
4. The defendant is to pay the plaintiff’s costs of this proceedings.

______________________________________________________________________
Lawyer for the Plaintiff: J B Nanei & Co. Lawyers
Lawyers for the Defendant: Henaos Lawyers