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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
OS (JR) NO. 343 OF 2014
BETWEEN:
SMALL BUSINESS DEVELOPMENT CORPORATION
First Plaintiff
AND
HENRY MARASEMBI
ACTING MANAGING DIRECTOR
Second Plaintiff
AND
PUBLIC SERVICES COMMISSION
First Defendant
AND
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Second Defendant
Waigani: Makail, J
2015: 04th & 19th November
JUDICIAL REVIEW – Review of Public Services Commission's decision –Decision in relation to a personnel matter connected to Public Service – Termination of employee – Jurisdiction of Public Services Commission to determine question of appointment of Acting Managing Director – Authority of Acting Managing Director to terminate employee – Lack of jurisdiction – Decision ultra vires – Public Services (Management) Act, 1995 – Section 18(5)(a) – Public Services (Management) Act, 2014 – Section 18(5)(a) – National Court Rules – Order 16, rule 3.
Cases cited:
Papua New Guinea Cases
Air Niugini Ltd v. Beverley Doiwa [2000] PNGLR 347
Otto Ganaii v. Sir Michael Somare & East Sepik Provincial Executive Council (2015) N6026
Overseas Cases
Associated Provincial Picture Houses Ltd v. Wednesbury Corporation [1948] 1 KB 228
Council of Civil Service Unions v. Minister for Civil Service [1985] 1 AC 374
Counsel:
Mr. J. Holingu, for Plaintiffs
Mr. R. M. Simbil, for First Defendant
No appearance, for Second Defendant
JUDGMENT
19th November, 2015
1. MAKAIL, J: The Plaintiffs are aggrieved by the decision of the First Defendant made on 22nd April 2014 where the First Defendant annulled their decision to terminate the employment of a staff member by the name of Mrs. Margaret Sonny and further ordered them to reinstate her to her substantive position with no loss of pay and entitlements retrospective to the date of her termination. They seek review of this decision pursuant to Order 16 of the National Court Rules and an order in the nature of certiorari to bring up to this Court and quash the decision and a further order in the nature of a declaration that the decision to terminate Mrs. Sonny of 08th May 2013 is valid and effective.
Agreed Facts
2. The agreed facts as between the Plaintiffs and First Defendant are:
2.1. The First Plaintiff is a statutory corporation established by the Small Business Development Corporation Act 1990.
2.2. The Second Plaintiff Mr. Henry Marasembi is the Acting Managing Director of the First Plaintiff, having being appointed by the National Executive Council ("NEC") on 26th October 2012.
2.3. The First Defendant is a public body empowered by the Public Services (Management) Act, 1995 ("PSM Act") to review personnel matters in the Public Service. At this juncture, it should be pointed out that the 1995 PSM Act has been superseded by the Public Services (Management) Act, 2014 and any reference to this legislation in this judgment will be to the 2014 PSM Act.
2.4. Mrs. Sonny was an employee of the First Plaintiff. On 08th March 2013 the Second Plaintiff suspended her from duties with full pay to allow for investigation into allegations of unprofessional conduct.
2.5. The allegations were insubordination, absence from duty without prior approval for 6 days in February 2013, verbal and physical assault of Divisional Head of "Know about Business Project", involvement of third party on an administrative matter and past unrecorded instances of insubordination and absence from duty without prior approval. The verbal and physical assault and involvement of third party related to allegation of Mrs. Sonny's husband assaulting Mrs. Sonny's immediate superior Mr. Alois Ragin.
2.6. Mrs. Sonny replied to the charges. Other officers also gave their reports.
2.7. They were considered by the Plaintiffs and Mrs. Sonny was found guilty of the charges.
2.8. On 08th April 2013 the Second Plaintiff wrote to Mrs. Sonny requesting her to resign voluntarily within seven days, failing which she would be terminated. She refused.
2.9. On 08th May 2013 she was terminated. On 12th April 2013 she lodged an application for review of a personnel matter with the First Defendant.
2.10. The First Defendant summoned the Second Plaintiff to appear before it and give evidence. The Second Plaintiff in response to the summons provided a written response to the First Defendant in a letter dated 03rd June 2013.
2.11. On 22nd April 2014 the First Defendant handed down its decision. A summary of its reasons for decision are:
(a) The Second Plaintiff had no authority to terminate Mrs. Sonny's employment.
(b) The Plaintiffs breached the Public Services General Orders ("GOs") (GO 14.31) in not allowing Mrs. Sonny to take her recreational leave.
(c) The Plaintiffs breached the principles of natural justice, in that, no proper forms under the Public Services GOs were used to "suspend charge and dismiss Mrs. Sonny."
2.12. On 08th May 2013 the NEC endorsed the continuation of the Second Plaintiff's appointment as Acting Managing Director "until a permanent appointment is made."
Grounds of Review
3. The grounds are:
3.1. Substantive ultra vires,
3.2. Procedural ultra vires,
3.3. Breach of natural justice, and
3.4. Unreasonableness of decision.
Substantive ultra vires
4. The issue raised in this ground is, did the Second Plaintiff have authority to terminate Mrs. Sonny's employment? It arises from the decision of the First Defendant in finding that the Second Plaintiff's appointment as Acting Managing Director of the First Plaintiff had expired on or about 26th January 2013.
5. The Plaintiffs referred to a Gazettal Notice G419 which may be found at page 286 of the Review Book and pointed out that it did not specify the period of acting appointment. Then, they referred to the NEC decision of 16th May 2013 at page 289 of the Review Book which stated that the Second Plaintiff shall continue as Acting Managing Director until a permanent appointment is made.
6. The Plaintiffs placed considerable emphasis on these two documents to show that the Second Plaintiff was the legitimate Acting Managing Director and there should not be any doubt as to his authority to terminate Mrs. Sonny's employment.
7. The First Defendant defended its decision by relying on Section 18(5)(a) of the PSM Act which it submitted gave it wide discretion to consider all facts relative to the matter and on this basis, it was open to it to consider the question of expiration of the Second Plaintiff's acting appointment and in turn authority of the Second Plaintiff to terminate Mrs. Sonny's employment.
8. It further relied on Section 9(1) of the Regulatory Statutory Authorities (Appointment of Certain Officers) Act 2004 which it submitted provides that any acting appointment shall not exceed three months and the case of Otto Ganaii v. Sir Michael Somare & East Sepik Provincial Executive Council (2015) N6026 to support this view. It submitted in that case, it was held that under the relevant Regulations, the prescribed term of an acting appointment is three months and in this case, the acting appointment was for an indefinite period which is contrary to these authorities.
9. However, I consider that the parties have missed one fundamental matter. This is the authority of the First Defendant to determine the question of the appointment of the Second Plaintiff as Acting Managing Director of the First Plaintiff and in turn, the authority of the Second Plaintiff to terminate Mrs. Sonny's employment. Does the First Defendant have jurisdiction to determine this question?
10. In my view it does not. I come to this conclusion because where a party questions the exercise of power of a decision making authority such as the Plaintiffs in this case on the ground that it lacked authority or acted in excess of its power, the question would fall within the jurisdiction of a judicial authority, for example, the National Court.
11. The First Defendant is not a judicial authority and therefore, lacked authority to determine the question of appointment and further, the authority of the Second Plaintiff to terminate Mrs. Sonny's employment. Mrs. Sonny should have filed proceeding in the National Court to challenge the appointment and authority of the Second Plaintiff to terminate her.
12. This is the distinction between this case and Otto Ganaii's case (supra). In that case Mr. Ganaii was appointed by the East Sepik Provincial Executive Council ("PEC") to act as Provincial Administrator until a new appointment is made. Subsequently, the PEC made a decision revoking his appointment and appointed Mr. Christopher Asa in his place. He sought review of that decision and to have it quashed. The Defendants applied to dismiss the proceeding on the ground that the PEC decision was contrary to the Public Services (Management) (Selection and Appointment of Departmental Heads and Provincial Administrators) Regulations 2003 which provided, amongst other things, that the period of an acting appointment shall not exceed three months. The Court upheld this ground and dismissed the proceeding.
13. In this instance the issue of appointment and expiration of the appointment of the Second Plaintiff as Acting Managing Director was not brought before the Court for determination. Apparently, Mrs. Sonny did not rely on this ground in the application for review but the First Defendant relied on it and reversed the Plaintiffs' decision to terminate her from employment. The First Defendant acted on an assumed power that it had a wide discretion under Section 18(5)(a) to go outside the grounds of review because of the use of the expression, "consider all facts relative to the matter" and found in her favour.
14. I am of the view that this provision does not vest power in the First Defendant to determine the question of appointment and further, the authority of the Second Plaintiff to terminate Mrs. Sonny's employment. This is where I find the First Defendant had over stepped its mark and determined a question which fell outside its jurisdiction.
15. This reason alone is sufficient to uphold the application for judicial review and grant the orders sought by the Plaintiffs. However, the Plaintiffs have relied on further grounds and parties have canvassed them in their respective submissions so I will consider them.
Procedural ultra vires
16. The issue raised in this ground for consideration is the application of the correct procedure in relation to disciplinary proceedings of the First Plaintiff. Is it the procedure in the Public Services GOs or the Office Manual of the First Plaintiff? The procedure in the latter may be found at pages 120 to 259 of the Review Book. The Plaintiffs submitted it is the latter and the First Defendant erred in holding that they were obliged to apply the GOs when they initiated disciplinary proceedings against Mrs. Sonny. The First Defendant took a contrary position by submitting that it is the GOs that apply and it did not err in holding this view and reversed the Plaintiffs' decision.
17. However, there is no dispute between the parties that the Office Manual of the First Plaintiff provides an extensive disciplinary procedure and while the Plaintiffs argue that the procedure in the GOs is inapplicable, they have used the standard forms for a Notice of Charge to lay the charges against Mrs. Sonny and a Notice of Punishment to inform her of their decision.
18. I have considered the Office Manual and I note that it provides for suspension of a staff member pending investigation, laying of charge, response from the staff member and decision. As it does not prescribe the appropriate forms for the laying of charge and notice of punishment, the Plaintiffs have used the forms in the GOs as a substitute.
19. From my perusal of the application to review a personnel matter at pages 51 to 52 of the Review Book which Mrs. Sonny lodged with the First Defendant, it is clear that her complaint was about the Plaintiffs having "no dispute and grievance settling procedure in place" (see Ground (ii)), "no HR Policy in place at SBDC that cover grievances and disputes settling procedure" (see Ground (vi)) and "to what sections, subsections and paragraphs of SBDC Act/ General Order, HR Policy/ Terms and Conditions of SBDC/ Resolution of Senior Management Committee Meeting." (Ground (ii)). The First Defendant found that the Plaintiffs failed to apply the disciplinary procedure under the GOs.
20. However, there is no evidence that she has been prejudiced by the application of both procedures. I come to this conclusion because the undisputed fact as between the parties is that she was notified of the charges, she responded to them and was notified by the Plaintiffs of the decision to terminate her. I will expound on this issue when I consider the ground on breach of natural justice.
21. Given this the question of which procedure should be applied in this case becomes purely an academic one. I am not satisfied there has been a breach of disciplinary procedure as found by the First Defendant which resulted in Mrs. Sonny being denied a right to respond or defend herself against the disciplinary charges. This ground is upheld.
Breach of Natural Justice
22. This leads me to the next ground. Breach of natural justice is one of the grounds given by the First Defendant in its decision. It arose from the following circumstances:
22.1. The decision by the Plaintiffs in not allowing Mrs. Sonny to take her recreational leave, and/or.
22.2. Requesting Mrs, Sonny to tender her resignation against her will in a letter dated 08th April 2013.
23. In its finding, the First Defendant relied on Section 59(2) of the Constitution which states that the minimum requirement of natural justice is the duty to act fairly and, in principle, to be seen to act fairly.
24. As to the first part of the decision on breach of natural justice, the Plaintiffs submitted that there is a process by which staff members follow to apply for recreational leave. Leave will be granted to a staff member only when it is approved. Mrs. Sonny did not follow this process. She had gone on leave without prior approval. In any case, it was a distinct and separate complaint which should not have been considered by the First Defendant.
25. I note that the First Defendant did not make any finding on the unapproved leave that Mrs. Sonny took. However, it found that she was not allowed by the Plaintiffs to take her leave. Again, in coming to this conclusion, it relied on Section 18(5)(a) of the PSM Act which it submitted gave it a wide discretion to consider the reason why Mrs. Sonny did what she did.
26. The refusal by the Plaintiffs to grant leave to Mrs. Sonny to take leave was not a ground of review before the First Defendant. The complaint was against the Plaintiffs' decision to terminate Mrs. Sonny for taking leave without prior approval. In my view when the First Defendant went on to determine the question of refusal to grant leave to Mrs. Sonny, it denied the Plaintiffs an opportunity to be heard in relation to that question.
27. As to the second aspect of the breach of natural justice, the Plaintiffs denied the allegation and submitted that they had accorded natural justice to Mrs. Sonny throughout the disciplinary proceedings. The First Defendant submitted that Mrs. Sonny was forced to resign and she did not. This occurred at the stage when she was suspended with no charges laid or determined. It was a case of constructive termination.
28. I have considered these submissions and the evidence and expanding on where I left off earlier at [20], I find that Mrs. Sonny was suspended with full pay to allow for investigation into her unprofessional conduct. When she was suspended, the allegations of unprofessional conduct were put to her. (see Notice of Charge at pages 304 to 305 of the Review Book). She responded by providing her response to the allegations so as other officers. (see Reply at pages 306 to 308 of the Review Book). They were considered by the Senior Management Committee of the First Plaintiff and the Committee considered that the allegations were serious enough to warrant termination. The Committee further considered that rather than terminating her, she be given the option to resign. This option was put to her and she refused so she was terminated. (see letter of 08th April 2013 and Notice of Punishment at pages 303 and 309 to 310 of the Review Book respectively).
29. With regard to the issue of being forced to resign, I accept the Plaintiffs' submission that the letter from the Plaintiffs dated 08th April 2013 was courteous and respectful in nature. Rather than terminating her, which may not reflect well on her in her future endeavours for employment, the Plaintiffs asked her to resign. If they did not receive her resignation notice on the given date, they would terminate her. They did not receive the requested notice and terminated her. Based on the foregoing, I am satisfied that they do not support the First Defendant's finding that Mrs. Sonny was denied natural justice. This ground is upheld.
Unreasonableness of decision
30. The final ground is in relation to the reasonableness or otherwise of the decision. The gist of the Plaintiffs' submissions is that the First Defendant relied on irrelevant matters and found against them. Matters such as the lack of authority of the Second Plaintiff by reason of his appointment as acting Managing Director having expired, use of different forms for the purpose of bringing the charges to Mrs. Sonny and decision and failure to apply the Public Services GOs are irrelevant. They do not address the issue at hand which is Mrs. Sonny was guilty of serious disciplinary offences which warranted her termination.
31. More importantly, the Plaintiffs submitted that the question of lack of authority of the Second Plaintiff was not a ground relied upon by Mrs. Sonny when she sought review of their decision before the First Defendant and as a result, they were not given the opportunity to respond to it. This further confirms that the First Defendant went outside what it was asked to determine and ended up arriving at a decision that was so unreasonable and based on irrelevant matters.
32. The First Defendant defended its decision by repeating its submission made under the first ground at [7] above, that is it had wide discretion to take into account any matters that may be relevant in its determination of a review of a personnel matter under Section 18(5)(a) of the PSM Act. The question of authority of the Second Plaintiff was relevant to the issue between the parties and it was open to it to give consideration to it.
33. The English cases of Associated Provincial Picture Houses Ltd v. Wednesbury Corporation [1948] 1 KB 228 and Council of Civil Service Unions v. Minister for Civil Service [1985] 1 AC 374 laid down the principles of unreasonableness of exercise of power by a decision making authority.
34. In the earlier case, Lord Greene MR articulated the principles of "unreasonableness" in two senses:
"(a) as describing a range of overlapping heads of discretionary error – including bad faith, dishonesty, regard to irrelevant considerations, lack of regard to relevant considerations (including public policy), proper appreciation of the law; and
(b) something so absurd that no sensible person could ever dream that it lay within the powers of the authority – a decision that no reasonable body could have come to."
35. In the latter case, Lord Diplock gave a further description of what it means as:
"...... a decision which is so outrages in its defiance of logic or of accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at it."
36. In such a case "unreasonableness have been made out". The principle of unreasonableness has been applied by the Courts in this jurisdiction. The question that Court asks is, is the decision so outrageous in its defiance of logic or of accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at it? (Air Niugini Ltd v. Beverley Doiwa [2000] PNGLR 347). If the answer is yes, the decision may be labelled unreasonable, the decision-maker will have exceeded jurisdiction and the decision is susceptible to judicial review. If the answer is no, the decision is not unreasonable and this ground of review will fail. The decision will be lawful unless it is infected by some other error of law or procedure.
37. With regard to the question of lack of authority of the Second Plaintiff, as I found at [9] to [15], it was a matter beyond the jurisdiction of the First Defendant to determine. For this reason, I further find that it was not relevant to the issue before the First Defendant and should not have been considered. Notwithstanding this, the First Defendant relied on it and found against the Plaintiffs.
38. Secondly, the First Defendant relied on the Plaintiffs' failure to apply the disciplinary procedure under the Public Services GOs. However, as I have also found at [20] to [21], the First Defendant had placed so much emphasis on the procedure under the GOs and missed a vital point and that is, Mrs. Sonny was heard and dismissed. It was, therefore, unnecessary to insist on the application of the procedure under the GOs.
39. What the First Defendant had omitted to address the Court on is the nature of the allegations to which Mrs. Sonny was found guilty of and terminated. Rather than repeating them here, they are set out at [2.5] above. In my view these disciplinary offences as found by the Committee of the First Plaintiff are, quite rightly, serious thus warranting termination of Mrs. Sonny.
40. Any established organisation would not want to employ a staff member who does not want to submit to authority. Insubordination, a term closely associated with a disciplinary organisation, is used to describe an act or conduct of this nature. One of the offences Mrs. Sonny was found guilty of was insubordination because she did not get approval from her immediate superior before she went on leave. Then it became a big issue between her and her immediate superior Mr. Alois Ragin. It ended up with Mr. Sonny finding himself entangled in the conflict between his wife and her immediate superior when he assaulted Mr. Ragin in an attempt to get some positive response to Mrs. Sonny's leave request.
41. What was a purely administrative matter turned out to be a big conflict which, regrettably, ended up with Mrs. Sonny losing her job. In the same breath, there are established procedures for grievances to be addressed. Any staff member aggrieved by a decision or conduct of a superior or fellow staff may seek redress through this given avenue. To this end, I note Mrs. Sonny's complaint was about being denied recreational leave. However, as I found at [26] above, it was not a ground of review before the First Defendant. In any event, she was entitled to bring the complaint to the First Defendant immediately after she was denied her leave request. Not wait until she gets terminated and raise it.
42. Insubordination was the cause for concern by the Plaintiffs and that was clearly pointed out by the Second Plaintiff in his response to the First Defendant in the letter dated 03rd June 2013 which may be found at pages 110 to 113 of the Review Book. Yet the First Defendant gave no consideration to it. It was more concerned about the other matters canvassed above, more so the refusal of Mrs. Sonny's leave requests by the Plaintiffs.
43. So when all these matters are considered together with the Plaintiffs' reasons for the termination of Mrs. Sonny, I am satisfied that the decision is so unreasonable and unjustified in the circumstances such that it should not stand. This ground is upheld.
Conclusion
44. I have upheld the grounds of review but regardless of this, the question of remedy remains discretionary. Based on the various reasons given, the finding of the Court was that the subject decision cannot stand. Thus, it would be within the discretion of the Court to uphold the application and grant the orders sought.
Order
45. The orders of the Court are:
______________________________________________________________
Holingu & Holingu Lawyers: Lawyers for the Plaintiffs
In-House Counsel: Lawyers for the First Defendant
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