Maninga v Ramu Sugar Ltd [2010] PGNC 128; N4118 (20 August 2010)

N4118

PAPUA NEW GUINEA
IN THE NATIONAL COURT OF JUSTICE

WS NO 1256 OF 2005

WILLIAM MANINGA
Plaintiff

V

RAMU SUGAR LIMITED
Defendant

Madang: Cannings J
2010: 19, 26 March, 16 April, 20 August

LAW OF EMPLOYMENT – wrongful dismissal – termination for cause – whether court should sit as an appellate tribunal – whether employer's disciplinary procedures were fair.

The defendant employer terminated the plaintiff's employment on the ground of gross misconduct, for refusing to obey lawful instructions and being dishonest in relation to excessive overtime claims. The plaintiff sued the defendant, claiming damages for wrongful dismissal, and argued that (1) there was no basis for the findings of the defendant's disciplinary committee that he was guilty of gross misconduct; (2) the disciplinary committee was not independent; and (3) his appeal against termination was not heard by an independent body.

Held:

(1) It is not the role of the court in a wrongful dismissal case to sit as an appellate tribunal and rehear the competing evidence and views on the question of whether the employee should have been dismissed. The court is only permitted to inquire into the circumstances of dismissal for the purpose of determining whether the employer breached the contract of employment.

(2) Here, there was ample evidence on which a reasonable employer in the position of the defendant could conclude that the plaintiff was guilty of gross misconduct, so there was no breach of contract committed by the defendant.

(3) The plaintiff's arguments that the disciplinary committee and the appeal body were not independent and failed to act fairly were not raised in the statement of claim. Therefore they were not properly before the court.

(4) In any event, it appears that the procedures used by the defendant (which gave the plaintiff a right to be heard prior to termination and reasons for termination and allowed him a right to appeal) were fair.

(5) The plaintiff failed to prove wrongful dismissal. Thus he was not entitled to any damages and the whole of the proceedings was dismissed, with each party bearing their own costs.

Cases cited

The following cases are cited in the judgment:

Joseph Charlie v Dr Thomas Webster (2008) N3408
New Britain Palm Oil Ltd v Vitus Sukuramu (2008) SC946
Tau Gulu v PNG Defence Force Savings and Loan Society Ltd (1995) N1399

TRIAL

This was a trial of a wrongful dismissal action.

Counsel

P K Kunai, for the plaintiff
T Anis, for the defendant

20 August, 2010

1. CANNINGS J: The plaintiff, William Maninga, is seeking damages for wrongful dismissal against the defendant, his former employer, Ramu Sugar Ltd.

2. On 21 August 2000, the plaintiff commenced employment and at the date of termination of his employment, 25 May 2004, he was a Stores and Warehouse Supervisor, under the supervision of the Purchasing Superintendent, who reported to the Stores and Purchasing Controller.

CHAIN OF EVENTS: MAY 2004

3. 10 May – the Stores and Purchasing Controller, Mike Hodge, gave the plaintiff written notice of suspension on allegations of gross misconduct regarding excessive overtime claims and failure to follow lawful instructions from his immediate superiors, and gave notice of a forthcoming disciplinary hearing.

4. 17 May – Mr Hodge gave the plaintiff written notice of the results of an audit of alleged excessive overtime in the Stores and Purchasing Section, detailing 12 specific allegations against him and asked him to attend a formal disciplinary hearing on 19 May.

5. 19 May – the disciplinary hearing took place. Three company employees (not including Mr Hodge) constituted the committee. Mr Hodge was present, together with three other company employees. The allegations were put to the plaintiff and he was heard on them.

6. 24 May – the committee concluded that the plaintiff was guilty of serious and gross misconduct and conveyed its findings in writing to Mr Hodge.

7. 25 May – Mr Hodge gave the plaintiff written notice of termination, with reasons in the form of seven instances of serious and gross misconduct; and notified him that he had a right of appeal.

8. 27 May – the plaintiff wrote a letter of appeal to the Human Resources Manager.

9. 28 May – the Human Resources Manager responded that he had reviewed the information in the plaintiff's case and was unable to alter the decision to terminate his employment.

GROUNDS OF WRONGFUL DISMISSAL

10. The plaintiff's counsel, Mr Kunai, argued three grounds of wrongful dismissal in his submission to the court:

1. There was no basis for the finding that the plaintiff was guilty of misconduct and the decision to terminate his employment.
   
2. The disciplinary committee was not independent.
   
3. The appeal against termination was not heard by an independent body.
   

1 NO BASIS FOR THE FINDING THAT THE PLAINTIFF WAS GUILTY OF MISCONDUCT

11. In the notice of termination the seven instances of serious and gross misconduct were:

(a) Claiming excessive overtime without seeking prior approval from the Stores and Purchasing Controller, thus refusing to obey a lawful instruction.

(b) Deliberately claiming excessive hours of standby time and overtime on numerous occasions between January 2003 and March 2004, thus being guilty of dishonesty.

(c) Failing to substantiate excessive overtime claims, thus being guilty of dishonesty.

(d) Failing to manage the overtime in his section, contrary to the instructions of the Stores and Purchasing Controller, thus grossly neglecting his duty.

(e) Wrongfully claiming excessive overtime hours, including claiming overtime for another employee who was sick at the relevant time, thus being guilty of dishonesty.

(f) Claiming 12 hours of standby and three hours of overtime on 23 February 2004, a day on which he was certified sick, thus being guilty of dishonesty.

(g) Making threats, while suspended, to his supervisor and to Mr Hodge, thus breaching company rules about threatening violence to fellow employees.

12. The plaintiff has adduced evidence at this trial aimed at showing that none of the above findings has substance. He argues that all his overtime claims were duly checked, verified and authorised by his supervisors before payments were made. He says that his immediate supervisor, the Stores Superintendent, authorised and certified all time cards and timesheets for payment of overtime. He denies disobeying any instructions and denies committing all the acts of misconduct referred to in the notice of termination.

13. The problem with these arguments is that they misconceive the court's role in a wrongful dismissal case. It is not the role of the National Court to sit as an appellate tribunal and rehear the competing evidence and views on the question of whether the employee should have been dismissed. The court is only permitted to inquire into the circumstances of dismissal for the purpose of determining whether the employer breached the contract of employment.

14. An employer who has given particular reasons for dismissing an employee will only be found guilty of a breach of contract if the plaintiff proves that there was no evidence at all in support of those reasons. If the court finds that the employer had before it evidence which, if accepted, would constitute misconduct under the term of the contract of employment, the conclusion will generally be that there was no breach of contract (Tau Gulu v PNG Defence Force Savings and Loan Society Ltd (1995) N1399, Joseph Charlie v Dr Thomas Webster (2008) N3408).

15. In the present case I consider that there was ample evidence on which a reasonable employer in the position of the defendant could conclude that the plaintiff was guilty of gross misconduct. The plaintiff has not proven a breach of contract in the manner contended for.

2 DISCIPLINARY COMMITTEE NOT INDEPENDENT

16. The plaintiff's argument that he was dealt with unfairly as the disciplinary committee was not independent must be dismissed for two reasons.

17. First, it is not raised in the statement of claim, so the issue is not properly before the court.

18. Secondly, I am not convinced that the committee was not independent or that the plaintiff was dealt with unfairly. Quite the contrary. The committee consisted of three company employees, none of whom was the plaintiff's immediate supervisor or his section head, Mr Hodge. It gave the appearance of being independent and reported its findings in a coherent report to Mr Hodge. The plaintiff's appearance before the committee meant that he was given a right to be heard on the allegations against him. He was later given reasons for the decision to terminate his employment. When it is considered that in 2004 the common law of Papua New Guinea was that an employer could terminate an employee's employment 'at will', ie without giving the employee a right to be heard, for any or no reason, and without giving any reasons, the procedures used in this case were fair (New Britain Palm Oil Ltd v Vitus Sukuramu (2008) SC946).

3 APPEAL BODY NOT INDEPENDENT

19. This argument fails for the same reasons the second argument failed. It is not properly before the court and it lacks substance.

CONCLUSION

20. The plaintiff has failed to prove that he was wrongfully dismissed. This means that he is not entitled to any damages, so no assessment of damages will be undertaken by the court. Normally costs follow the event, ie the losing party pays the successful party's costs. However, this is a matter of discretion. Here, the plaintiff had a genuine grievance against his former employer. He has commenced these proceedings at great risk and I think that the court should through the exercise of its discretion as to costs show that it is cognisant of the relative economic positions of parties to litigation. If the court awards costs against individual citizens in favour of large corporations, it may unwittingly be closing the doors of the courts to those for whom the doors must be open at all times. I have, in the interests of justice, decided that the parties will bear their own costs.

ORDER

(1) All relief sought in the statement of claim is refused and the whole of the proceedings is dismissed.

(2) The parties shall bear their own costs.

(3) Time for entry of the order is abridged to the date of settlement by the Registrar, which shall take place forthwith.

Judgment accordingly.
____________________________

Kunai & Co Lawyers: Lawyers for the plaintiff
Blake Dawson Lawyers: Lawyers for the defendant