Warakau v Yaruso [2022] PGNC 464; N9995 (7 October 2022)

N9995

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 284 AND 292 OF 2022

BETWEEN:

MATHILDA WARAKAU & DELMA HEVALAHU

- Plaintiffs-

AND:

LILLIAN YARUSO

In her Capacity as HR Manager of Pacific Star Limited

-First Defendant-

AND:

HEATHER YAWOS

In her Capacity as HR Manager of Pacific Star Limited

-Second Defendant-

AND:

VERONICA ANN MARSHALL

In her Capacity as Advertising /Marketing Manager of Pacific Star Limited

-Third Defendant-

AND:

ANDY NG

In her Capacity as General Manager of Pacific Star Limited

-Fourth Defendant-

AND:

SHAN FOOK YOUNG

In His Capacity as Managing Director of Pacific Star Limited

-Fifth Defendant-

AND:

PACIFIC STAR LIMITED

-Sixth Defendant-

Waigani: Tamade AJ

2022: 15^th September, 7^th October

CONTRACT LAW – contract of employment – private sector – Section 36 – Employment Act – grounds for termination of contract – termination notice served – payment in lieu of notice made – Plaintiffs not entitled to reinstatement and back payment of lost entitlements – proceedings dismissed –

Department of Labour and Industrial Relations has no legal right to reinstate employees and or to order lost salaries. It can only conciliate and mediate industrial disputes as between parties.

Cases Cited:

Courts (PNG) Ltd v Doiwa [2011] PGNC 50; N4286
Zanepa v Kaivovo [1999] PGSC 30; SC623

Counsel:

Ms Mathilda Warakau and Ms Delma Hevalahu, Plaintiffs In Person
Mr Bill Frizell, for the Defendants

7^th October, 2022

1. TAMADE AJ: Ms Warakau and Ms Hevalahu are former employees of Pacific Star Limited who operate the National Newspaper. They are both representing themselves in this matter.

2. The Plaintiffs claim that they were summarily terminated from their employment with Pacific Star Limited on or about 6 October 2015. At the time of termination, Ms Warakau was the Sales Supervisor with Pacific Star Limited and Ms Hevahalu was the Advertising Sales Executive with Pacific Star Limited. Both Plaintiffs claim that there were allegations raised that they associated themselves with another registered media Advertising and Printing business which was a competitor to Pacific Star Limited and which was in direct conflict with Pacific Star Limited.

3. The Plaintiffs claim that they were not accorded natural justice to a fair hearing prior to their termination. They also claim that they appealed the decision as to their termination however this was unsuccessful, and they have taken the matter as to their termination to the Department of Labour and Industrial Relations as an industrial dispute. The Plaintiffs are claiming for unlawful termination of their employment contracts, for defamation and also for breaches of their constitutional rights. The Labour Department conducted several conferences as between the parties and resolved that the Plaintiffs should be paid their lost salaries and entitlements and that they be reinstated to their positions.

4. The Defendants argue that the purpose of any compulsory conference pursuant to the Industrial Relations Act and the Industrial Organisations Act is to conciliate the parties and effect a settlement of a dispute. The Defendants further argue that both Plaintiffs have received their final entitlements consequent upon termination and therefore they are not owed any further entitlements.

5. At the hearing of this matter, the Court enquired with the Plaintiffs’ whether at any stage of the matter had they sought legal advice on their claims. Both Plaintiffs replied that they have not as they have relied on the decisions of the Department of Labour and Industrial Relations and have never at any point opted to seek independent legal advice on the matter.

Are the Plaintiffs entitled to the claim for loss of fortnightly wages from 6 October 2015 to present and other claims as pleaded in their Writ of Summons?

6. I am of the view that the Plaintiffs employment with the Pacific Star Limited is a private contract and therefore it is subject to the Employment Act. Both Plaintiffs have written contract of agreements with Pacific Star Limited.

7. The Defendants rely on section 36 of the Employment Act and say that it was entitled to terminate the contracts of employment of both Plaintiffs. Section 36 of the Employment Act is in the following terms with relevant provisions underlined:

36. GROUNDS FOR TERMINATION OF CONTRACT.

(1) An employer may terminate a contract of service without notice or payment instead of notice–

(a) where the employee–

(i) wilfully disobeys a lawful and reasonable order; or
(ii) misconducts himself by an act of omission or commission that is inconsistent with the due and faithful discharge of his duties; or
(iii) is guilty of a fraud or dishonesty; or
(iv) is habitually neglectful of his duties; or
(v) is imprisoned for a period exceeding seven days; or
(vi) is continually absent from his employment without leave or reasonable excuse; or
(vii) is convicted of an offence or contravention of this Act or any other law relating to employment; or

(b) on any other ground on which he would be entitled to terminate the contract without notice at common law.

8. I find that as the Plaintiffs employment contract with Pacific Star Limited is a private contract of employment, the Sixth Defendant was entitled to terminate their employment pursuant to section 36 of the Employment Act if any of those grounds existed without notice by making a payment in lieu of notice which in this case was what transpired.

9. I am of the view that the Plaintiffs claim relying on the findings and decisions of the Department of Labour and Industrial Relations is misconceived. I uphold the submissions by Mr Frizell referring to the case of Courts (PNG) Ltd v Doiwa^[1] and find that the Department of Labour and Industrial Relations does not have the authority to make a decision as to reinstatement of the Plaintiffs to their employment as it can only conciliate and mediate as between the parties.

10. The Plaintiffs claim for defamation and breach of constitutional rights is also misconceived. The Plaintiff’s claim is premised on a misconceived and or perhaps they are not adequately advised on the legal basis of their claim however they have pursued the matter since 2020 when these proceedings were filed. No person is guaranteed an employment for life in the private sector as the claim clearly seeks loss of salaries from when both Plaintiffs were terminated on 6 October 2015 to date.

11. The following excerpt in the Supreme Court case of Zanepa v Kaivovo^[2] is applicable to this case in terms of the common law right of an employer to hire and fire and the difference in the public and private sector employment:

“The law is as stated in the Ereman Ragi & Anor v Maingu case above referred to and we find no reason to deviate from that. It is submitted that as a permanent public servant the appellant is in a different situation than persons covered by the Employment Act and has some sort of permanency by way of the Public Service Management Act. Whilst it may appear from Section 3(1)(b) of the Employment Act that public servants do not come under that Act because their employment comes under the Public Service (Management) Act, that Act does not then give them any more rights than under the Employment Act. What the Public Service Act gives is the right to air any grievance about their employment, to someone other than their immediate superior, but it does not take away the common law right to hire and fire, or the converse that the law does not force a reluctant employer to retain the services of an employee that it does not wish to continue relationships with. The Employment Act then comes in and gives an employee the minimum right to notice. We find that there is nothing in that Act which gives any rights or claims to permanency and thereby any consequent right to damages based on any other term than that referred to in the Employment Act. We, therefore, find there are no grounds to interfere with the principles propounded in the Ereman Ragi judgement and we, therefore, find no errors by the trial judge.

12. It follows that the Plaintiffs are not entitled to an employment as of a right for a permanent period. Pacific Star Limited has decided that it no longer wants to employ them by making out a case under section 36 of the Employment Act and giving them their dues in lieu of notice, their employment relationship has therefore been severed and there is no right to be protected by the Court. It follows that these proceedings shall be dismissed.

13. The Court, therefore, makes the following orders:

1. These proceedings are dismissed in their entirety.
2. Each party shall bear their own costs of these proceedings.
   

Orders accordingly.

________________________________________________________________

Mathilda Warakau and Delma Hevalahu: Plaintiffs In Person

Warner shand Lawyers: Lawyers for the Defendants

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^[1] [2011] PGNC 50; N4286 (11 May 2011)

^[2] [ 1999] PGSC 30; SC623 (2 November 1999)