Maisan v Bank of South Pacific Ltd [2009] PGNC 100; N3713 (5 August 2009)

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ASSESSMENT OF DAMAGES – Open ended contract – Damages equivalent to wages for period of notice

Appa v Wama & Department of Western Highlands [1992] PNGLR 395
Beck v Atlas Hire [1984] PNGLR 158
Ereman Ragi & Another v Joseph Maingu SC459
Felix Ramram v NBC & Ors (1990) N1110
Harding v Teperoi Timbers [1998] PNGLR 128
Naguwean v UPNG [1992] PNGLR 367
Nahau Rooney v Forest Industry Council of Papua New Guinea and Aaron Nawason unreported judgment N914
Nazel Wally Zanepa v Ellison Kaivovo & Ors SC623

1. GABI, J: Introduction: This is a claim for loss of employment benefits and damages as a result of wrongful termination. The claim is in these terms:

"(a) loss of fortnightly salaries and wages calculated from 18th June 2002 to the date of judgement.

(b) loss of higher duty allowance and other allowances calculated from 18th June 2002 to the date of judgement.

(c) Loss of annual leave benefits calculated from 18th June 2002 to the date of judgement.

(d) Loss of employer contribution component to the National Provident Fund calculated from 18th June 2002 to the date of judgement.

(e) Loss of furlough leave entitlements calculated from the date of commencement of employment to the date of judgement.

(f) Loss of pro-rata long service leave entitlements calculated from the date of commencement of employment to the date of judgement.

(g) General damages for mental distress, inconvenience, disappointment and frustration for wrongful termination.

2. The affidavit evidence produced by the defendant shows that the following payments were made:

Salary & Allowance Due	No of	F/N	Code	Gross
	Days	Rate		Amount
Formulae: Rate x No of days/10=Gross Amt
Salary from: Salary In Lieu of Notice from:19.06.02 to 18.07.02 Recall Salary from: Annual Leave Paid out to: LSL Pre 31/12/92 – 2% Tax	0	595.40	SAL	0.00
	0	595.40	SILON	0.00

	0	595.40	SAL	0.00
	10.5342	595.40	TLSM	627.21
	45.0001	595.40	TLSB	2,679.31
LSL Post 31/12/92 – Marginal Tax	103.46520	595.40	TLSN	6,160.32
Severance Payment – Marginal Tax	0	0.00	SEVM	0.00
Recall on overpayment in Salary	-13.2485	595.40	REC	-788.82
Housing Allowance	0	0.00	THA	0.00
Non- Taxable Housing Allowance	0	0.00	NTHA	0.00
Non- Taxable Motor Vehicle Allowance	0	0.00	NTMV	0.00
Rental Assistance Allowance	0	0.00	ACCM	0.00
Telephone Allowance	0	0.00	TEL	0.00
Utility Allowance	0	0.00	UTIL	0.00
Hardship Allowance	0	0.00	HARD	0.00
On Call Allowance	0	0.00	CALO	0.00
Special Allowance – Tax Adjust	0	0.00	SPEA	0.00
Deem Value – Accommodation	0.	0.00	SPEC	0.00
Overtime Allowance (0.00 h/rx2.0=0.00)	0	0	OT20	0.00
Overtime Allowance (0.00 h/rx1.5-0.00	0	0	OT15	0.00
			GROSS PAYOUT	8,678.02
			TAX	2,152.82
			Sub Total	6,525.20
Deductions			Outstanding Debts
Staff Housing Loan			SHL	0.00
Lost In Telling			LIT	0.00
Loan – Savings & Loan Society			LOAN	4,017.35
Personal Loan			PERS	0.00
Staff Loan			SLOA	2,417.60
Recall to – Susp Prepaid Salary - HRD			RECA	90.25
Net Payout Due			NET	-0.00

3. The issue is whether the plaintiff is entitled to any loss and damages at all.

4. The trial proceeded by way of affidavit evidence and oral testimonies. The following affidavits were admitted into evidence: (i) 2 affidavits of Kippie Maisan dated 8th September and 2nd October 2008 respectively; (ii) affidavit of Rahamie Par dated 8th September 2008; (iii) affidavit of Yipib Buka dated 8th September 2008; and (iv) affidavit of Kila Nouairi dated 17th September 2008.

5. The brief facts were that the plaintiff commenced employment with the Bank on 12th August 1985. On or about 16th May 2002, he was suspended for dishonesty or fraudulent acts. On 18th June 2002, he was terminated from employment. He was subsequently charged for misappropriation and was acquitted on 11th March 2004 due to lack of evidence. Subsequent to his acquittal, he wrote to the defendant for reinstatement; however, his request for reinstatement was refused by the management.

6. The plaintiff obtained default judgment with damages to be assessed on the basis that the defendant failed to file a defence; although a notice of intention to defend was filed.

7. The plaintiffs evidence is that he was neither advised of the calculation of his final pay nor paid his final entitlements.

8. The plaintiffs employment was governed by the Code of Conduct. He was not on a written contract of employment. It would appear to be a contract of service for an unspecified period of time (see section 33 of Employment Act). He had been employed for approximately 17 years.

9. Under section 5(d)(iii) of Code of Conduct, the notice period is 2 weeks. Under section 34 of the Employment Act, the notice period for a person who had been in employment for over 5 years is 4 weeks (see also Ereman Ragi & Another v Joseph Maingu SC 459; Nazel Wally Zanepa v Ellison Kaivovo & Ors SC 623). According to the authorities, the measure of damages in this case is 4 weeks.

10. Counsel for the plaintiff urged the Court to follow Felix Ramram v NBC & Ors (1990) N 1110 and award 3 months pay. In that case, Her Honour, Doherty J was of the view that the Employment Act did not apply to that case and taking into account the 4 weeks’ notice period as a guide and the claim for eight years; she held that the equivalent of three months wages was reasonable. She said:

"The Employment Act Chapter 373 states that it is an Act binding on the State and on every authority and instrumentality of the State (S.2 Employment Act 373). The first defendant is an authority of the State. The Employment Act goes on to state that it does not apply to the employment of a person 'under any other law in force the country' (s 3 (1) (b). This provision has been considered in the case Beck v Atlas Hire (1984) P.N.G.L.R. 158 and more recently in the unreported judgement Nahau Rooney v Forest Industry Council of Papua New Guinea and Aaron Nawason unreported judgment N914 where it was stated 'I am satisfied that the Employment Act does not apply to the plaintiffs contract as her employment was effected under the Forestry Industry Council Act'.

I find that the plaintiff in this case was employed under the Broadcasting Commission Act Chapter 149 and as such the Employment Act did not apply to him. The provisions, conditions the obligations of the employer and the duties and rights of an employee of a Commission are set out in the Determination. These include, for example, an obligation (para 88) on any officer not to leave his place of employment without express permission except on official business. It would appear from the documents before me that the plaintiff had left his employment location. However, without evidence in defence I cannot make a clear finding on this. It is quite clear that the powers of the Commission include the right to dismiss an officer form his services. This is contained in para 156 of the Determination and in the Act stating that the Board of the National Broadcasting Commission may impose some punishment on the employee or 'may dismiss the officer from his services of the Commission'. This is also envisaged in para 149, dealing with the length of employment and stating that "except in the event of his discharge on account of unsatisfactory service or misconduct the continuity of service of an officer shall not be deemed to be or have been broken"... Hence there is provision that an employee, once appointed, is not automatically employed for life". (Emphasis added).

11. It was never suggested to me that the Employment Act did not apply to the plaintiff. The issue was not raised nor argued before me so I am unable to make a finding on the point. I cannot, however, assume that the Employment Act does not apply in this case.

12. The plaintiff was on an open ended contract. Damages in these circumstances will be equivalent to wages for the period of proper notice (see Appa v Wama & Department of Western Highlands [1992] PNGLR 395). Proper period of notice in this case is 4 weeks. He was on a gross salary of K788.82 per fortnight, which works out to a total of K1, 577.64 for 4 weeks. The evidence before me is that he was paid the fortnightly salary but the money was recalled under what is termed as the Recall on Overpayment in Salary (see paragraph 20 of the affidavit of Kila Nouairi).

13. The plaintiff claims that he has never received his POSF contributions of K30, 828.77. There is no evidence that the money was paid to the defendant by POSF. I am of the view that the plaintiff should claim the money from POSF if POSF refuses to refund his contributions; not from the defendant.

14. The plaintiff is seeking K1, 000.00 in damages for this head of damages (see Harding v Teperoi Timbers [1998] PNGLR 128; Naguwean v UPNG [1992] PNGLR 367).

15. The plaintiff was paid K8, 000.00 in damages for "unreasonable hardship, inconvenience, suffering and stress" in the District Court proceedings in Kundiawa in 2005. I am satisfied that he has been adequately compensated for the "distress, anxiety and frustration" he had suffered as a result of his termination from employment. As such, he is not entitled to any additional payment.

16. The defendant admits that the summary of payments (see annexure "N" to the affidavit of Kila Nouairi) was not given to the plaintiff. In fact, the plaintiff said that he only knew about the summary of payments after his counsel showed him Mr. Nouairi’s affidavit. This explains the reason for commencement of the proceedings by the plaintiff. The defendant must bear the costs of the proceedings.

17. I award K1, 577.64 with interest at 8% from the date of the writ to the date of payment. The defendant shall pay the costs of the proceedings, to be taxed if not agreed.

Muromu Lawyers: Lawyers for the Plaintiff
Legal Services Division: In-House Lawyers

National Court of Papua New Guinea

Maisan v Bank of South Pacific Ltd [2009] PGNC 100; N3713 (5 August 2009)