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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
WS 867 OF 2017
BETWEEN:
JAMES WATA
Plaintiff
AND:
MR. GRANT R. MUDDLE the Chief Executive Officer,
Port Moresby General Hospital
First Defendant
AND:
PORT MORESBY GENERAL HOSPITAL
Second Defendant
AND:
THE SECRETARY, DEPARTMENT OF HEALTH
Third Defendant
AND:
INDEPENDENT STATE OF PAPUA NEW GUINEA
Fourth Defendant
Waigani: Bre, AJ
2023: 14th September, 13th October
EMPLOYMENT LAW - Dismissal of casual employed for more than 8 years - Minimum employment terms in Employment Act applies in absence of internal staff rules or other statute applying – two(2) weeks notice given - Common law right to dismiss casual at anytime for any reason in S.35Employment Act.
PNG Cases Cited
Daniel v Air Niugini Ltd [2017] PGSC 61; SC1886
Dr Peter Yama v Constable Lupen Omake (2022) N9818
Gawi v RD Tuna Canners Ltd [2013] PGNC 150; N5336
Magini v Central Provincial Government [2003] PGNC 45; N2468
Malai v PNG Teachers Association [1992] PNGLR 568
Nazel Wally Zanepa v. Ellison Kaivovo & 2 Others, Unreported Supreme Judgment No. SC623
New Britain Oil Palm Ltd v Sukuramu [2008] PGSC 29; SC946
Ragi v Maingu [1994] SC459
References
Employment Act c373 ss 10, 34-36
Public Hospitals Act 1994 ss4, 22, 29
Counsel:
Mr. Aaron Benny, for the Plaintiff
No Appearance, Second Defendant
JUDGMENT ON TRIAL ON LIABILITY
13th October 2023
1. BRE AJ: This is a trial on liability of the Second Defendant for alleged wrongful termination of the employment of James Wata.
2. Summary Judgement was ordered against the First, Third and Fourth Defendants on 06th July 2022 for failure to file their Defence within the extended time given. The Second Defendant filed its Defence on 18th May 2018 after leave was granted to file its Defence out of time.
3. The Second Defendant was served on 20th July 2023, with the Directions
Order setting the matter down for trial on the 14th of September 2023. The Second Defendant did not attend the trial. I proceeded with the trial as the onus is on the Plaintiff to prove
his loss, See Dr Peter Yaman Constable Lupen Omake (2022) N9818. The trial proceeded by Affidavit on Liability against the Second Defendant.
EVIDENCE
4. The Plaintiff relies on his Affidavits sworn on 17/08/2017 filed on 02 September 2017 and sworn on 25/08/2023 filed on 28 August 2023. James Wata claims specific and general damages for loss of past and future salaries and breach of constitutional rights. He alleges negligence on grounds of failure to give notice prior to his termination, no opportunity to be heard and insufficient reasons to justify the dismissal.
FACTS
8. The facts are not disputed. James Wata was employed as a casual cook with the Port Moresby General Hospital from 18 December 2007 until he received his letter of termination from the First Defendant on 18th April 2016. James Wata was paid a fixed gross fortnightly wage of K469.11 for the duration of his employment.
LAW
PRELIMINARY ISSUES
12. I raised two preliminary issues to Counsel during oral submissions. The issues relate to whether the employment of the Plaintiff is governed by public law and judicial review proceedings would be the proper course of action or that he would be excluded from relying on the Employment Act under s3 of the Employment Act c373 because he was employed by a public authority.
Section 3 of the Employment Act c373 reads:
“3. APPLICATION.
(1) Except where it is specifically provided otherwise, this Act does not apply to or in relation to the employment of a person–
(a) by the State in carrying in the vicinity of his village from day to day; or
(b) under any other law in force in the country”
(Emphasis mine)
13. Section 3 EA excludes those employed under statute from relying on the Employment Act c373 (hereinafter referred to as ‘EA’). The First Defendant is authorised by Section 29 of the Public Hospitals Act 1994 to recruit temporary employees. He has an implied authority to dismiss them. See Section 36 of the Interpretation Act c2. Section 29 does not concern the Plaintiff's employment directly. Section 29 of the Public Hospitals Act 1994 (hereinafter referred to as ‘PHA’). reads:
“29 TEMPORARY AND CASUAL EMPLOYEES.
(1) The Chief Executive Officer of a public hospital may appoint such temporary and casual employees as he thinks necessary for the purposes of that public hospital.
(2) Subject to the Salaries and Conditions Monitoring Committee Act 1988, employees appointed under Subsection (1) shall be appointed on such terms and conditions as the Chief Executive Officer determines. “
(Emphasis mine)
14. A perusal of the relevant caselaw confirms that proceedings for wrongful dismissal lie in common law by employees of public authorities whose employment terms are not contained in any statue which contains a code of employment such as Public Services Management Act 1995 or Public Employment of Non-Citizens Act. See Air Niugini v Salter [2001] PGSC 3; SC679 (9 November 2001), Magini v Central Provincial Government [2003] PGNC 45; N2468 (26 September 2003). Also see Ragi v Maingu [1994] SC 459 ; Nazel Wally Zanepa v. Ellison Kaivovo & 2 Others, Unreported Supreme Judgment No.SC623; Daniel v Air Niugini Ltd [2017] PGSC 61; SC1886 (4 August 2017)
15. The Public Service Commission informed the Plaintiff when he sought review of the First Defendant’s decision on 02nd September 2016, that he was not a permanent public servant, and they lacked jurisdiction to review his termination. I infer from this that the Public Service Management Act does not apply to him. The Defendants are public authorities but the employment terms of the Plaintiff as a casual, is governed by private law not public law.
16. In Air Niugini v Salter [2001] PGSC 3; SC679 (9 November 2001) the Supreme Court held in relation to the Employment Act that:
“... S.3(1)(b) contains two important exclusion provisions. First, the Act does not apply to a person employed under any other law (meaning statutory law) in force in the country. Secondly, where specific provisions of the Employment Act or that "other law" under which a person is employed "specifically provided otherwise. ... The National Airline Commission Act and the Public Employment of Non-Citizens Act provides a complete employment code in respect to terms and conditions of employment of non-citizens by Air Niugini. ”
In Magini v Central Provincial Government the Court held;
“In this respect it needs to be stated here that the principal legislation dealing with conditions of employment is the Employment
Act (Ch 373). But this Act does not apply in all cases, as there may be other legislation covering special classes of employees. Such a legislation is the Public Services (Management)
Act which applies to members of the public service who are not covered by the Employment Act. Section 3 of this Act makes provisions
in relation to its application, and sub-s (1) is pertinent.”
(Emphasis mine)
17. I am satisfied that this proceeding is competently before me, and the Plaintiff has standing to rely on the Employment Act as his employment does not fall within the Public Services Management Act 1995 or any other statute. I turn now to the substantive issue.
ISSUE
18. The primary issue relates to whether the Plaintiff was wrongly terminated from his employment as a casual cook with the First and Second Defendants.
19. No Constitutional issues as pleaded were raised because the Plaintiff’s Counsel chose to defer submissions on the Constitutional issues to trial on assessment of damages.
SUBMISSIONS
20. James Wata claims that as a casual employee he had an oral employment contract under the Employment Act with the Defendants which was breached as the Defendants wrongly terminated his employment without cause.
21. James Wata’s employment was dismissed on grounds of poor or incompetence performance. Mr. Benny submitted that none of the grounds justifying termination for cause listed in Section 36(1)EA applied to the Plaintiff.
22. The Plaintiff denies receiving payment of his final entitlements and
provided his bank statement for the months of April and May 2016 to show that he received his regular fortnightly wages with no special
increments received in those two months. The bank statement is marked as Annexure ‘JW4’ to his Supplementary Affidavit
filed 28th August 2023.
23. The Second Defendant agrees in its Defence that the Plaintiff was a casual employee employed as a cook at the Port Moresby General Hospital from 18 December 2007 to 29th April 2016. The Defendant alleges the Plaintiff was given two weeks’ notice and paid his final entitlement of K3, 565.24.
24. The Plaintiff states he does not accept this amount because he was terminated without cause.
ANALYSIS
25. James Wata's employment terms have to be ascertained in order to establish if the termination was wrong. No employment guidelines nor operating procedures were relied on by either party in their pleadings or Plaintiff's Affidavits to confirm if there were internal rules of the First and Second Defendants to govern the employment of casuals. This places the Plaintiff's employment within the terms of the Employment Act c373(hereinafter referred to as 'EA').
26. Section 10 of the Employment Act provides three criteria to ascertain if a casual employee has an employment contract. They are:-
1) same employer test
2) time test
3) no industrial award.
27. Section 10 of the Employment Act c373 reads:
“10. CASUAL WORKER DEEMED TO BE ORAL CONTRACT EMPLOYEE.
(1) Subject to Subsection (2), where a casual worker is employed by the same employer for more than six days in any one month, he shall be deemed to be an oral contract employee under Division 3.
(2) Subsection (1) does not apply to a casual worker employed under the provisions of a registered award covering a specific type of occupation.”
28. The Plaintiff meets all three criteria and is an oral contract employee. There is also no dispute on the status of the Plaintiff as a casual and the long duration of his employment with the Defendants. As an oral contract employee, the Plaintiff would be entitled to the minimum terms under the Employment Act of conclusive evidence of a record of employment, notice prior to dismissal and reasons for termination.
29. Section 15 of the Employment Act requires an oral contract to be reduced to writing which can be relied on as conclusive evidence where there is a dispute. See Petrus v Telikom PNG Ltd [2008] PGNC 85; N3373 (30 May 2008) and Roger Baboa v PNG Communication Workers Union (2006) N3043.
Section 15EA reads:
“15. RECORD OF TERMS, ETC., OF EMPLOYMENT.
(1) Where an employer and an employee enter into an oral contract of service, the employer shall, at the time of the engagement, make a written record of the terms and conditions of the contract.
(2) Where a dispute arises as to the terms and conditions of an oral contract of service, and the employer fails to produce a record under Subsection (1), a statement by the employee as to the terms and conditions of the contract shall be conclusive evidence of those terms and conditions unless the employer satisfies the Secretary or an Arbitration Tribunal established under the Industrial Relations Act 1962 to the contrary. “
(Emphasis mine).
30. A written record of oral employment provides certainty to the terms of employment. In Peter Kirin and KK Farmers v John Paroda (2004) N2599 His Honour Kandakasi J (as he then was), explained the purpose of Section 15 EA “...to achieve certainty in the terms and conditions of a person’s employment in informal contracts. The section imposes obligations on the employer and provides that if those obligations are not discharged, what the employee says
his or her terms and conditions of employment were becomes conclusive evidence of them.”
( Emphasis mine).
31. That certainty will be achieved for the Plaintiff by producing a record of his casual employment. Section 14EA contains the minimum terms of that record and is in the following terms:-
“14. NOTICE OF TERMS AND CONDITIONS OF EMPLOYMENT.
Where an employer, an employment agent or worker-recruiter employs or seeks to employ a person he shall inform that person of the terms and conditions of the employment, including–
(a) the name of the employer; and
(b) the name of the place or places of employment at or on which he is to be or may be employed; and
(c) the location of the place or places of employment; and
(d) the occupation in which he is to be employed; and
(e) the nature of work involved in the occupation under Paragraph (d); and
(f) the period of the employment; and
(g) the total wage to be paid and the deductions (if any) to be made; and
(h) the manner of paying wages including the arrangements proposed in respect of refundable deductions (if any).
32. In the absence of any formal records, I find that aspects of all the factors listed in Section 14EA can be deduced from the evidence of the Plaintiff to provide a record of the Plaintiff's employment.
33. As to the duration of employment, the Plaintiff claims in his particulars of claim for past and future loss of employment income with the Defendants on a continuing basis until he reaches retirement age. He implies a term of permanency. As he is a casual employee subject to the terms of the Employment Act, the duration of employment is provided in Sections 16 and 17 of the Employment Act c373.
Section 16 EA states:
“16. PERIOD OF ORAL CONTRACT.
Notwithstanding any agreement to the contrary, an oral contract of service shall be deemed to be for the period by reference to which wages are paid.”
17. NEW ORAL CONTRACT ON EXPIRATION OF CONTRACT.
Each party to an oral contract of service that expires under Section 16 shall, immediately on the expiration of the contract, be deemed to have entered into a new oral contract of service for a further period of the same duration and subject to the same terms and conditions as the expired contract unless–
(a) notice to terminate the employment under Section 34 has previously been given and–
(i) the period of notice has expired; or
(ii) payment of wages instead of notice has been made; or
(b) the contract has been summarily terminated by either party for lawful cause.
(Emphasis mine)
34. Section 16 EA clearly fixes the period of employment for a casual employee to the period when wages are paid. There is no guarantee that casual employment will continue the following period. It was not pleaded nor argued that the Plaintiff should be treated as a permanent employee given the number of years employed.
35. Section 17EA factors situations where casuals are engaged on an ongoing basis and provides for an automatic rollover based on the continuous wages being received. It also provides a minimum right to notice before termination. See Ango v Mapusa [2013] PGNC 265; N5693 (27 September 2013) the period of contract being the wages period as provided by the EA. Also see Gawi v RD Tuna Canners Ltd [2013] PGNC 150; N5336 (22 August 2013) where the plaintiff was found to be ‘employed under a series of oral contracts, each of two weeks duration’.
36. The Plaintiff’s employment is one on a continuous basis renewing every two weeks over the course of his employment from 18 December 2007 to 29th April 2016. The long period of casual employment was not raised in submissions.
37. Prima facie, the Plaintiff could be entitled to four weeks notice under Section 34(4(d)EA because he has been employed for more
than five years.
However, notice is not required where the employer:
38. In Gawi v RD Tuna Canners Ltd [2013] PGNC 150; N5336 (22 August 2013), His Honour Cannings J, listed two ways in which an employer could terminate an oral contract without notice. The first is termination with cause under Section 36(1)EA and the second is termination without notice under 35(2)EA. I have split the grounds for termination without notice under Section 35EA to payment in lieu of notice and exercise of common law right.
Section 34EA reads:
“34. NOTICE OF TERMINATION.
(1) This section does not apply to a written contract of service for the first two years of operation of the contract unless the parties to the contract agree otherwise.
(2) Subject to this Act, a party to a contract of service may, at any time, give notice to the other party of his intention to terminate the contract.
(3) The length of notice of intention required to terminate a contract of service shall be the same for both parties and–
(a) shall be as specified in the contract; or
(b) shall be not less than the periods specified in Subsection (4).
(4) Where there is no provision in a contract of service for notice of intention to terminate, the length of the notice shall be not less than–
(a) one day’s notice if the employee has been employed for less than four weeks; or
(b) one week’s notice if the employee has been employed for not less than four weeks and for less than one year; or
(c) two weeks’ notice if the employee has been employed for not less than one year and for less than five years; or
(d) four weeks’ notice if the employee has been employed for five years or more.
(5) Notice of termination shall be given–
(a) in the case of a contract of service referred to in Section 19(a)– in writing; and
(b) in the case of any other contract of service–either orally or in writing, and the day on which the notice is given shall be included in the period of notice.
(Emphasis mine)
39. Apart from prescribing the minimum notice period, Section 34EA provides the manner of giving notice and subjecting the right to notice to other provisions of the Act where notice may not be required such as termination without notice under Section 35EA or termination for cause under Section 36EA.
40. Section 36EA confers a right on an employer to terminate for cause or with good reasons, without prior notice of the termination nor payment in lieu of notice to an employee.
41. The letter of termination dated 18th April 2016 issued to the Plaintiff attempted to provide a good reason for his termination by stating poor and inconsistent performance as the reason why his services were no longer required. Mr Benny submits that these reasons do not come within the grounds of Section 36EA and therefore the dismissal is without case and unlawful.
The termination letter dated 18th April 2016 reads:
“James Wata
Catering Services
Corporate Division
...
Dear James,
Subject: Cessation of Employment Services
This letter is with reference to the above. Effective immediately, and giving two weeks’ notice, we wish to advise that your services are no longer required by the Hospital.
This decision has been made as a direct result of poor and/or inconsistent performance during the period of your employment.
Your last working day will be the 29th of April 2016.
We acknowledge and appreciate your efforts during your tenure and wish you all the best in your future endeavors.
Yours Sincerely;
(signed)
Mr Grant Muddle
Chief Executive Officer”
(emphasis mine)
Section 36EA reads:-
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
...
(3) Termination of a contract of service under Subsection (1) or (2) shall be made as soon as practicable after the happening of the event on which the termination is based.”
42. The First Defendant's reason for dismissing the Plaintiff for ‘poor and incompetent performance during the period of his employment’ does not specifically fall within any of the grounds for termination for cause under Section 36EA.
43. Mr. Benny submitted that there was no evidence to support these reasons provided to the Plaintiff nor any details or occurrences of the poor performances alleged to occur during the long period of his employment. He submitted the reasons were vague and unjustified resulting in an unlawful dismissal of the Plaintiff's employment.
44. I agree with Mr. Benny that the grounds for termination lack clarity and are difficult to place under any of the grounds for termination under Section 36EA. No evidence has been provided to comfortably pin down the allegations of poor or incompetent performance to any of the provisions in Section 36(1) EA.
45. However, as to whether this finding entitles the Plaintiff to a wrongful dismissal claim against the Defendants, is an issue that must be determined by examining the rest of the EA provisions to the particular circumstances of the Plaintiff's employment.
46. The circumstances of the Plaintiff are that he is a casual employee on an oral employment contract which continued each fortnight for more than eight years. Section 35 specifically applies to the termination of casuals.
47. Section 35(4) EA preserves the common law right to fire at any time for any reason but applies it only to casual employment. An employer is authorised by Section 35(4) EA to give only one full working day's wage to a casual employee when (s)he is dismissed for any reason apart from those listed under Section 36EA. The First Defendant's reasons to dismiss the Plaintiff do not justify termination for cause, but those reasons can easily fall within the wide scope of Section 35,(4)EA to dismiss a casual 'for any reason'.
Section 35 EA reads:-
“35. TERMINATION OF CONTRACT WITHOUT NOTICE.
(1) An employer and an employee may mutually agree to terminate a contract of service with or without notice.
(2) Where a party to a contract has given notice of intention to terminate under Section 34, either party may, without waiting for the expiry of that notice, terminate the contract by paying to the other party a sum equal to the amount of salary that would have accrued to the employee during the period of the notice.
...
(4) The employment of a casual employee may–
(a) subject to Paragraph (b)–be terminated by either party without notice; and
(b) if terminated by the employer for any reason other than one of the grounds specified in Section 36(1)–the casual employee shall be paid for a full day’s work on the day the contract is terminated notwithstanding that he may have worked less than eight hours on that day.”
(Emphasis mine)
48. Section 35 EA provides three situations where an employment can be validly terminated without notice: -
49. The reasons in the termination letter did not come within those under Section 36EA but comes within the wide scope of Section 35(4) as ány other reason'. The term ‘any other reason’ is broad enough to cover any reason to dismiss a casual employee.
50. In Petrus v Telikom (supra) the plaintiffs were able to prove that they were entitled to the same employment terms as the permanent employees. The Plaintiff has not claimed nor submitted that he is entitled to the same rights as permanent staff of the Defendants.
In Malai v PNG Teachers Association [1992] PNGLR 568 the Supreme Court held:
“...once it is realised that this was a simple employer-employee relationship with no statutory or contractual right, the common law principle of the right to hire and fire applies and the terms and conditions of employment were no better nor more favourable than those set out in the Employment Act Ch 373.
51. In terms of any consideration concerning any right to be heard on the reasons for dismissal, those rights are not guaranteed by the Employment Act. Caselaw has held that any claim for wrongful dismissal under the Employment Act is limited to the notice requirements and not to the reasons of the decision. See; Malai v PNG Teachers Association [1992] PNGLR 568, Steamships Trading Company Ltd v Joel, Amalgamated General Workers Union and Damon [1991] [1991] PNGLR 133, Paius Bokorum v Divine Word University and Others [2023] PGNC 306 N10472. In Malai the Supreme Court held that;
“Any suggestions of a duty to act fairly and any rights under the Constitution to natural justice only go so far here as to whether he was terminated with proper notice such as that required under the Employment Act Ch 373, namely on 2 weeks' or a month's notice, depending on the basis of his salary payments in the absence of any contractual arrangement which provided otherwise.”
(Emphasis mine)
52. The Employment Act only gives a right to notice, or payment in lieu of notice. Where there is any breach, the aggrieved employee is entitled to the right to payment for the notice period. Gawi v RD Tuna Canners Ltd [2013] PGNC 150, Murua v Ramu Nico Management (MCC) Ltd (supra), Petrus v Telikom PNG Ltd [2008] N3373.
53. The National Court attempted to increase the minimum options for employees governed by the Employment Act by attempting to develop an underlying law to create a minimum procedural right to be heard before dismissal under the Employment Act. However, this was overruled by the Supreme Court in New Britain Oil Palm Ltd v Sukuramu [2008] PGSC 29; SC946 (30 October 2008).
54. James Wata’s rights as a casual, under the Employment Act are very limited. Caselaw shows that a breach of Section 36EA only goes to the procedural requirement to give notice or pay in lieu of notice not to the reasons for dismissal. James Wata's dismissal as a casual required only one day's notice or pay. He was given two weeks’ notice and paid his regular wages to the end of April 2016. This is more than the one day's pay.
55. There is no conflict with Section 34EA and Section 35(4)EA as Section 34EA is made 'subject to’ the other provisions of the Employment Act. See Section 34(2)EA.
56. Noting these considerations and that liability for the First, Third and
Fourth Defendants has been established by default, I find in relation to the Second Defendant, that James Wata’s dismissal is
not in breach of his oral contract given his status as a casual employee. The employer is entitled to terminate the employment for
any reason with one full day’s pay. The Second Defendant is therefore not liable.
57. Further, the Second Defendant is a public hospital declared as such under Section 4PHA and is governed by a management board. The board recommends the appointment of a chief executive officer to the National Executive Council.
58. The First Defendant reports to the board of the Port Moresby General Hospital for managing the hospital and its policies. The legal authority to sue and be sued is vested in the board. Sec Sections 6(2) and 23 PHA,
59. I also take note of His Honour Dingake J's remarks, when deciding on the Second Defendant’s application to file its Defence out of time, that the Second Defendant appeared to have a good defence on merits. Re unrep N5/2018 WS 867/2017 James Wata v Grant Muddle and others.
CONCLUSION
60. James Wata is a casual employee employed under an oral contract of employment. As such his employment is governed by the terms of the Employment Act. The Employment Act provides limited rights to causal employees who have no record of their employment terms. As a casual employee, the duration of his employment from 18 December 2007 to 29th April 2016 continued on a fortnightly basis.
61. An employer has a right under Section 35(4) of the Employment Act to terminate casual employment at any time and for any reason with one full day's pay. The minimum right to notice under Section 34 of the Employment Act is subject to other provisions of the Employment Act.
62. Termination for cause is not proven but as a casual employee on an oral employment contract, the Plaintiff's dismissal did not breach the minimum notice requirements of Section 34EA as it came within Section 35(4) EA which required a day's pay.
63. The Plaintiff was given two weeks’ notice and allegedly paid his final entitlements. Given the limited rights of casuals in the Employment Act, this is sufficient notice.
64. Further, the Second Defendant has no legal capacity under its enabling law, the Public Hospitals Act 1994 to be sued and is not a proper party to these proceedings.
65. Given the foregoing reasons, the Second Defendant is not liable.
Any loss suffered by the Plaintiff must be proven during an assessment of damages trial against the First, Third and Fourth Defendants.
COSTS
66. Costs are discretionary and normally follow the event.
Order
Orders Accordingly.
_________________________________________________________________
Niuage Lawyers: Lawyers for the Plaintiff
Solicitor General: Lawyer for the First, Second, Third and Fourth Defendants
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