Ruhuwamo v PNG Ports Corporation Ltd [2019] PGNC 293; N8021 (13 August 2019)

N8021

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 630 OF 2014

BETWEEN
RECKS RUHUWAMO
Plaintiff

AND
PNG PORTS CORPORATION LIMITED
Defendant

Waigani: Thompson J
2019: 31 July: 13 August

EMPLOYMENT LAW - Unlawful Termination Of Employment- Failure To Give Reasons – Measure Of Damages – Calculated On Basis Of What Employee Could Have Received If Lawfully Terminated – Need To Plead Special Damages With Particularity – Need To Provide Evidence In Support – Admissibility Of Hearsay Evidence

13^th August, 2019

1. THOMPSON J: BACKGROUND: On 1 March 2007 the Plaintiff entered into a Contract of Employment with the Defendant, whereby he was to be employed for three years, subject to the termination provisions. Pursuant to clause 17 of the Contract, the employee was obliged to skillfully and diligently perform all his duties and comply with all lawful orders and directions.

2. Clause 18 of the Contract provided, relevantly, that the employee could be terminated for breach of the contract, or for cause under clause 19. Under clause 18.2, the grounds for termination had to be stated in writing at the time of termination, which could be effected by three months written notice or payment in lieu.

3. Clause 19 provided that termination for cause included committing a breach of contract, wilfully disobeying a lawful order, or being negligent in the discharge of his duties. Notwithstanding that clause 19 provides that the termination for cause can be immediate and without notice, it goes on to say that this is “..... provided that the Disciplinary Procedure under clause 24 has been complied with”.

4. Clause 24 provides that where the employee is alleged to have committed a serious offence under clause 19, he shall be suspended, be given written notice of the charges, the employee can give a written response, and then the employee could be cautioned or terminated.

5. By a letter dated 10 June 2008, the Defendant gave Notice of Disciplinary Charge under clause 24, to the Plaintiff, which set out the particulars of the Plaintiff’s alleged failure to comply with clause 17 by failing to comply with the Defendant’s lawful directions and failing to skillfully and diligently perform his duties. On 16 June 2008 the Plaintiff gave a detailed written response. By a letter dated 31 July 2008, the Defendant informed the Plaintiff that he had been “acquitted of all the charges”, and he was to return to work.

6. By another letter on the same date, the Defendant terminated the Plaintiff’s employment, with three months notice. No grounds were given. The letter advised that he would be paid his final entitlements to the end of the notice period, including accrued gratuity, money in lieu of leave, and money in lieu of furlough. He was given the option of working out his notice period on full pay, or ceasing employment and being paid all his entitlements immediately.

7. By a letter dated 8 August 2008, the Plaintiff accepted the termination, and said he would continue to work through the three months period.

8. By a letter dated 3 September 2008, the Defendant informed the Plaintiff that another section of the business would be relocated to his office, that he was no longer required, and would have to leave by 10 September 2008. The Defendant confirmed that his final entitlements would be paid up to the end of the three months period.

9. The Plaintiff took no steps to challenge his termination, and nor did he write any letters asking to be paid or saying that he had not received his full entitlements. It is reasonable to infer that they were paid in September 2008, in accordance with the Defendant’s termination advice.

10. Four years later, the Plaintiff consulted a psychiatrist who issued two reports dated 12 March and 12 June 2012. Essentially, the reports said that the Plaintiff’s orientation, attention and concentration were normal although he had difficulty with his memory, he was of average intelligence, and he had no abnormalities. He suffered from anxiety and depression, as a result of being terminated, and that this was a permanent condition because he remained unemployed.

11. On 12 June 2014, the Plaintiff issued these proceedings against the Defendant. This was just a few days before the expiry of the six year time limit for issuing legal proceedings. There was no evidence of any letters or other communication at all between the Plaintiff and the Defendant since he left his employment in 2008.

Medical Reports

12. These medical reports were not identified by the doctor who was said to have written them, who had not provided an affidavit, was not called as a witness and was not available for cross-examination. The Defendant objected to the reports being relied on by the Plaintiff, on the basis that the reports were by a medical practitioner of a scientific examination being tendered under S 37 of the Evidence Act, and were required to be by way of affidavit. I consider that section to be not relevant, because it refers to a medical examination “..... of a thing ....”, not “not of a person”, and is intended more for scientific examinations of such matters as blood tests or post-mortem results. It would therefore have been sufficient for the reports to be tendered under S34 of the Evidence Act.

13. Nevertheless, no matter which section is relied on, the evidence can only be given by affidavit in the first place. If the medical report is not identified and attested to by the author, in the required form of affidavit on oath, then it cannot be tendered into evidence by another person.

14. The Plaintiff wishes to put forward the doctor’s reports as evidence of the truth of the contents of those reports. In Jack Gopavi v Francis Kugame and another (2003)N 2482, the court cited with approval earlier decisions from the Privy Council showing that the main principle is that “Evidence of a statement made to a witness by a person who is not himself called as a witness .... is hearsay and inadmissible when the object of the evidence is to establish the truth of what is contained in the statement”.

15. A party wishing to use evidence at a trial must comply with the requirements of the Evidence Act, and “A failure to do so should result in non-admission of the affidavit in question into evidence”. (see Igiseng Investments Ltd v Star West Constructions Ltd and another (2003) N 2498).

16. In the present case, the Plaintiff has not complied with the requirements of the Evidence Act, in that the documents were not tendered by way of affidavit, they were hearsay, and the author of the documents was not available for cross-examination. The doctor’s reports are therefore inadmissible.

Relevant Law

17. It is well settled by a long line of case authorities in PNG, that an employer has the right to hire and fire his employees, and does not have to give reasons for his decision. If this is done in breach of the terms of a contract, the measure of damages is what the employee would have received for his salary and other entitlements if the contract had been lawfully terminated. (see Jimmy Malai v PNG Teachers Association (1992) PNG LR 568, Paddy Fagon v Negiso Distributors Pty Ltd (1999) N 1900, New Britain Palm Oil Ltd v Vitus Sukuramu (2008) SC 946, and Porgera Joint Venture Manager Placer (PNG) Ltd v Robin Kami (2010) PGSC 11).

18. This is consistent with the provisions of the Employment Act. Under S 34, a contract of employment may be terminated at any time, with the length of notice being either as specified in the contract, or dependent on the length of the employment. If an employee has been employed for over five years, the length of notice shall be not less than four weeks. Under S 35, the termination may be by notice, or by payment in lieu of notice.

19. Under S 36, the employer may terminate without notice or payment in lieu, if the employee, inter alia, wilfully disobeys a lawful and reasonable order or misconducts himself by an act of omission or commission that is inconsistent with the due and faithful discharge of his duties.

20. In this case, the Defendant’s 2008 letter of termination did not give any reason for the termination. This was not a breach of the Employment Act, but it was a breach of clause 18.2 of the Contract which required the grounds to be stated in writing.

21. After being served with the legal proceedings, in 2018 the Defendant gave evidence that the grounds for the termination were the Plaintiff’s failure to comply with its lawful directions, his failure to diligently perform the duties and work required by his employment, and a general failure to carry out his duties.

22. The common law allows an employer to rely on a ground for termination which was not specified or relied on for termination at the time of termination. An employer can seek to justify his actions by relying on a ground which might not have existed at the time of termination. (see Wilson Thompson v Bernard Kipitand NCDC (2004) N 2686 and Pama Anio v Aho Baliki (2004) N 2719.)

23. However, an employer is not entitled to rely on the common law position, when there is a contractual obligation to give a reason at the time of termination.

Damages

24. Having found that the termination was in breach of clause 18.2 of the contract, the next issue is the measure of damages which flows from that breach.

25. Under the contract, if it had not been breached and the Plaintiff had been lawfully terminated, then the Plaintiff would have been entitled under clause 18.2 to be given three months notice or payment in lieu, and pursuant to clause 18.3, all his accrued benefits would be paid.

26. The Plaintiff submitted through his lawyer that he had not been paid all his accrued entitlements. However, this was not pleaded anywhere in his statement of claim, and it was not referred to in his affidavits or even in the medical reports.

27. As this claim had not been pleaded, the Defendant was not aware of it, and had not known that it could be required to produce evidence to show that the payments were made.

28. In PNGBC v Jeff Tole (2002) SC 694, the Court found that: “it is clear law that, where a Plaintiff’s claim is special in nature such as a claim for loss of salaries or wages, they must be specifically pleaded with particulars. Unless that is done, no evidence of matters not pleaded can be allowed or (relief granted).”

29. The Plaintiff has neither pleaded a claim for loss of salary or entitlements, nor produced any evidence in support of such a claim.

30. The Plaintiff had made a claim in the statement of claim for “medical costs and out of pocket expenses”. However, no particulars were pleaded, and no evidence was given in support of the claims.

31. The Plaintiff made a claim for “mental distress, anxiety and frustration and was hospitalized for mental disorder.”

32. In the PNGBC v Jeff Tole case, the court said that when the Plaintiff “..... was unlawfully terminated, he was entitled to damages within the terms of the contract. He was paid the amount he was entitled to receive for being so terminated. It would follow therefore that there was no cause for him to suffer stress, anger and frustration.”

33. In the case of Pama Anio v Aho Baliki, the court said: “I do not consider it is right for there to be awards of damages for distress and frustration just because a dismissed employee claims it. ..... there is the danger that, by so doing, the court might so convert the longest established principles of law that recognize the right of an employer to hire and fire at will .... Not only that, it will also re-write, without good cause, the law requiring proof of one’s loss before any damages ... could be made by a court .....”.

34. In The Central Bank of PNG v Gabriel Tugiau (2009) SC 1013, the Plaintiff failed in his claim for damages for psychological effects, stress, embarrassment and shame because not only had he failed to properly particularize the claim, he failed to produce evidence in support of the claim.

35. The Plaintiff here has not produced evidence in support of his claim. On this point, in relation to the medical reports, even if they had been admitted into evidence, they would likely have only shown that the Plaintiff’s depression was attributed to his loss of employment, inability to obtain another job, and inability to contribute income to his family. As the Plaintiff was liable to be terminated at anytime on three months' notice or payment in lieu, it would seem that he would have suffered from the same difficulties regardless of whether or not the termination was lawful. In any event, the reports were not in evidence, and so there was no evidence in support of his claim.

36. No evidence was given which would justify award of exemplary damages.

Findings

37. The Plaintiff’s employment was terminated in breach of clause 18.2 of his contract of employment.

38. The Plaintiff was therefore entitled to receive the salary and entitlements which he would have been entitled to receive if his employment had been validly terminated, namely, three months' salary and entitlements.

39. The Plaintiff has failed to establish that he had not received all the salary and entitlements which he was entitled to receive for three months payment in lieu of notice.

40. The Plaintiff has failed to properly plead or provide evidence in support of his claim for general and special damages arising from his termination.

41. I therefore make the following orders:

a). The proceedings are dismissed

b). Each party is to pay its own costs
__________________________________________________________________Sirae & Co. Lawyers: Lawyers for the Plaintiff
Kawat Lawyers: Lawyers for the Defendant