Carey v South Pacific Oil [2015] SBCA 17; SICOA-CAC 41 of 2014 (9 October 2015)

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NATURE OF JURISDICTION:	Appeal from Judgment of the High Court of Solomon Islands (Apaniai, PJ.)
COURT FILE NUMBER:	Civil Appeal Case No. 41 of 2014 (On Appeal from High Civil Case No. 354 of 20 11 )
DATE OF HEARING:	01 October 2015
DATE OF JUDGMENT:	09 October 2015
THE COURT:	Goldsbrough P Ward JA Lunabek JA
PARTIES:	CAREY - V - SOUTH PACIFIC OIL
ADVOCATES: Appellant: Respondent:	Michael Pitakaka Primo Afeau
KEY WORDS:
EX TEMPORE/RESERVED:	RESERVED
ALLOWED/DISMISSED	DISMISSED
PAGES	1- 9

1. The appellant was formerly employed by the respondent company, South Pacific Oil Ltd (SPOL) as Aviation Manager under an employment contract, executed on 24 April 2010, for a fixed term of 5 years. His employment was terminated by the company on 22 July 2011 and he filed a claim in the High Court on 5 September 2011 for wrongful dismissal and breach of contract. Following a trial, judgment was delivered on 17 October 2014 dismissing the claim.

2. Notice of appeal against the judgment was filed on 17 October 2014 on the grounds that:

3. Counsel for the appellant summarised the grounds as concerning the holding of the trial judge that there was no breach of contract and no breach of natural justice by the respondent and that the appellant was not unlawfully dismissed. He stated that the essential points advanced on the appeal are that the judge's finding:

4. As can be seen, the four grounds are interrelated and the matter in issue on this appeal is whether the judge was wrong in his finding that there was no breach of contract and/or natural justice such as would amount to wrongful dismissal.

5. The disciplinary procedure which led to the appellant's dismissal appears to have arisen following an email to the General Manager of SPOL from the CEO of Solomon Airlines which was SPOL's largest customer. It was sent on 24 March 2011 and complained about a failure, that morning, to refuel an aircraft on time as the result of a breakdown of SPOL's pump. The appellant was in charge of refueling operations.

6. The terms of the complaint included objection to the attitude of the appellant when asked about the delay and similar instances on previous occasions. It was a strongly worded complaint and concluded:

Due to the critical operational need for addressing our OTP [on time performance] issues - Solomon Airlines can no longer see progress with Steve Carey as head of SPOL airport office. We are desperate to put closure on pending issues and can no longer accept dealing with Mr Steve Carey. Solomon Airlines request that South Pacific Oil Ltd remove Mr Steve Carey from all airport premises immediately."

7. It appears that the appellant had previously been employed by Solomon Airlines and he considered that the CEO of the Airline was motivated by a grudge against him retained from that time. However, whilst that may be relevant to the appellant's allegations of prejudice by SPOL, it did not form part of the learned judge's reasons. The reason for the termination was stated by SPOL to be "serious misconduct and unprofessional behaviour detrimental to the company".

8. The appellant's contract of employment contains 9 clauses. Clause 8 deals with termination of contract. The contract of the appellant was terminated without notice pursuant clause 8(a):

(a) The Employer may immediately terminate this contract with no notice should the Employee:

(i) Display serious misconduct. Examples of serious misconduct are sleeping on duty, dereliction of duty, drunk on duty, stealing or fraud, using violence, corruption, refusal to obey a reasonable order, gross insubordination, disturbance of village peace and safety, deliberate pollution of waterways, or any conduct likely to endanger the lives and safety of one's self or others or which adversely affects the progress of the work.

(ii) Display unprofessional or unseemly behaviour that may be detrimental to the Company.

9. The procedure by which the company was to deal with cases of serious misconduct was set out in the SPOL Policy Manual the provisions of which, by clause 9(i), apply as part of the contract of employment.

10. Disciplinary and Termination procedures are found in section 3.4.15 of the Manual. It is a lengthy section and does not need to be set out in extenso but the Introduction explains the approach that the company has to such matters:

"Disciplinary guidelines and procedures enable an organisation to operate effectively by ensuring fairness and order in the treatment of employees. Guidelines establish standards of conduct at work, whilst procedures help to ensure that the standards are adhered to and provide a fair method of dealing with alleged breaches of guidelines. ... The disciplinary process exists for the management of situations where misconduct occurs through:

An employee breaching their employment contract, Company policies, standards, principles or processes, or

The process may be invoked as a result of a complaint or where there is direct evidence of behaviour that is contrary to that expected by SPOL of its employees. A full investigation of the facts (as seen by the relevant parties) will be undertaken as part of the process. A range of actions may result ..."

In any case where the disciplinary process is invoked, the following principles will apply:

Individuals involved in the process will be treated with respect and dignity at all times

12. Under the heading 'Disciplinary Process', in section 3.4.15.4, the stages of the process are specified. The passage starts:

"The disciplinary process is normally undertaken in a number of stages, depending on the situation:

It should be noted that where the situation warrants stage (4) (Termination of Employment) may be utilised without reference to stage (3) (Formal Disciplinary Sanction). This situation may arise in cases of serious and willful misconduct."

"The claimant's case is that clauses 3.4.15.1 to 3.4.15.8 of the Manual were not complied with when the Contract was terminated. More specifically, he alleges that the complaint against him by the Airline was not investigated; that he was not given an opportunity to respond to the complaints; and, that the Panel which investigated the complaint was not impartial. I take note of the fact that nothing in his claim, nor in his evidence, shows that he disputes the seriousness of the charges. I therefore take it that the claimant accepts that the charges were serious cases of misconduct which would justify dismissal without notice as provided for under Step (4) (Dismissal/Termination of Employment) of the Manual."

14. There is no challenge that wrongful dismissal is a dismissal in breach of the terms of the contract of employment as was accepted by the judge. It is also correct, as counsel for the appellant submits, that whenever considering the termination of a contract, the employer must comply with the common law 'rules' of natural justice that the decision maker should give the employee an opportunity to be heard and that the issue is determined impartially.

15. In the trial below, the evidence relied on by the claimant was a sworn statement by the appellant and a number of attachments. The respondents submitted a sworn statement by the General Manager of SPOL producing, without comment, documents relevant to the procedures followed by the company. The appeal book placed before the Court includes a large quantity of correspondence in the form both of letters and emails. It is not necessary to set out that material; we have considered the parts identified as relevant by Mr Pitakaka, for the appellant, in his detailed written submissions.

16. Mr Pitakaka deals first with the manner in which the company dealt with the case and whether it breached its own procedures. It must, he correctly submits, follow both the letter and spirit of the procedures in its Manual and must at all times act fairly - by which is meant that it must comply with the requirements of both natural justice and the company's own procedures.

17. The High Court was supplied with a statement of Agreed Facts and Issues. It is instructive to summarise the main events in the development of this decision to terminate the appellant's contract. The documents relevant to the admitted facts are exhibited in the appeal books.

18. It is admitted that, following the Airlines complaint on 24 March 2011, the General Manager of SPOL was instructed the next day by the Chairman of the SPOL Board to suspend the appellant on full pay during the investigations and that a panel should be set up by Board members to hear the Airline's report and that of the appellant.

19. On 11 April 2011 Mr Pitakaka, on behalf of the appellant, enquired of the General Manager about the status of the investigation and whether a panel had been set up by SPOL in order that the appellant might make any objection to the impartiality of the members.

20. On 4 May 2011 Mr Pitakaka wrote to the company's lawyer, Mr Afeau, requesting a copy of the Airline's report. He received no response. On 17 May 2011, the claimant was advised in a letter from the Company secretary that a panel had been appointed consisting of Josiah Manehia as Chairman with Peter Boyers and a nominee from a local company as members. Subsequently the member from the local company withdrew leaving a panel composed only of the remaining two. The same letter invited the appellant to make a presentation to the panel on 20 May 2011. Mr Pitakaka responded the following day, 18 May, registering the appellant's objection to the two panel members.

21. On 17 June 2011, the Board Panel Chairman served on the appellant four written disciplinary charges and requested that he respond to them by 23 June 2011 and to attend before the panel the following day, 24 June 2011. The appellant, by his lawyer, submitted his response to the charges on 23 June 2011 and attended before the panel on 24 June 2011 when he made further representations and repeated his objection to the composition of the panel.

1. Display of serious misconduct by reason of dereliction of duty or neglect of duty;

2. Display of serious misconduct by reason of dereliction of duty or neglect of duty and display of unprofessional or unseemly behaviour that may be detrimental to the company;

4. Display of serious misconduct by reason of dereliction of duty or neglect of duty or refusal to obey a reasonable order or gross insubordination.

23. On 22 July 2011, the SPOL Board advised the appellant by letter of the termination of his contract. During the full period of his suspension, the appellant had been paid his full salary and all other entitlements and benefits under his contract and, on his termination; he received three months' salary in lieu of notice, accrued entitlements and repatriation expenses.

24. The submissions on behalf of the appellant include challenges to the trial judge's finding of fact. We understand that this case did not involve live witnesses at the trial. Thus the usual strictures, concerning the manner in which an appellate court will reconsider the lower court's view of reliability and credibility of witnesses, do not apply. An appellate court will rarely interfere with the trial judge's determination of the facts unless they are clearly contrary to, or unsupported by, the evidence. In the present case there is evidence to support the judge's decisions on fact in respect of the procedures which were followed by the company. We, too, have considered the evidence and see no reason to interfere with those decisions.

25. The principal challenge by the appellant was threefold. The first is whether the panel was biased and, if so, whether it encroached on the right to be judged fairly. Second is the appellant's complaint that there was no proper investigation as required by section 3.4.15.4. and, third, the claim that the appellant was not given an opportunity to be heard. We are satisfied that the second and third matters were properly dealt with by the judge and we do not interfere with his finding on those questions.

26. It is clear that the disciplinary procedures in the Manual envisage a relatively flexible procedure in which all stages are conducted by members of the company generally starting with the person's supervisor or his line manager. It is clearly intended to be a procedure designed to ensure fairness to the employee whereby all stages are kept 'in house'.

27. The issues that do need further consideration are whether the procedures which took place either failed to accord with natural justice or did not comply with the company's own disciplinary and investigative procedures. The only matter which gives us cause to look deeper into the company procedures applied is the composition of the Panel.

28. From a relatively early stage, the appellant expressed his objection to the composition of the Panel. At the very outset of the inquiry he emailed the General Manager and stated that "he did not accept an investigation by the SPOL Board" and went on to "demand an independent enquiry".

29. The substance of his objection to the remaining members was described by the judge in his judgment:

"The claimant's objection to Mr Manehia being on the panel is based on Mr Manehia's position as Commissioner of Labour. He [the appellant] says that any complaint regarding employment matters would be referred to Mr Manehia as Commissioner of Labour; hence his membership of the panel would be inappropriate. In regards to Mr Boyers, the claimant [appellant] says that Mr Boyers is the chairman of the Investment Corporation of Solomon Islands which owns the Airline; hence, he would be seen as not impartial since the investigation is the result of a complaint from the CEO of the Airline. He claims that the membership of the two persons on the Panel amounts to a breach of contract."

30. The rules of natural justice have, over the years, been broadened to include, amongst others, employers and the fact that the tribunal includes or consists of members of the company does not preclude them from giving the employee before them a fair hearing. Many companies use their own officers to conduct such enquiries and may have very strong reasons for not wanting to have company secrets disclosed to a stranger conducting such a hearing. The test is whether the members of the tribunal have put all extraneous matters aside and determined the matter before them on the relevant issues only. Is not sufficient for the appellant simply to point to their duties outside the company and say they must, therefore, be incapable of giving him a fair hearing in respect to matters within the company.

"... They must act in good faith and fairly listen to both sides, for that is a duty lying upon everyone who decides anything. But I do not think they are bound to treat such a question as though it were trial. ... They can obtain information in any way they think best, always giving a fair opportunity to those who are parties in the controversy for correcting or contradicting any relevant statement prejudicial to their view."

32. In Halsbury's Laws; 4th ed, Vol 16 reissue para 274, the learned author explains that natural justice applies to employer/employee disciplinary matters and later adds:

"The rules of natural justice must however be applied realistically. In particular there is no absolute right to be present at all stages of an investigation or to challenge or cross examine witnesses, and it will not necessarily be a procedural breach for the same manager to be involved at more than one stage in the procedure. What matters is whether a generally fair procedure was adopted."

33. In the present case, the appellant was invited to appear and did appear before the Panel. He knew the details of the charges beforehand and had given his response. He was able to give his side of the issues before the Panel. Any concerns he had about the individual members of the Panel could have been aired at that time. It was unfortunate that no attempt was made to address his concerns expressed before that but the trial judge, having considered the evidence as a whole, was satisfied that the hearing was fair.

34. As we have stated, it is clear from the whole structure of section 3.4.15 that the intention is to deal with all disciplinary matters within the company structure. Clearly, in this case, the seniority of the appellant meant that references to the supervisor or even line manager being involved initially was inappropriate but the provisions as a whole are administered and adjudged by members of the company organisation. We note that applies at all stages even when the person disciplined wishes to exercise his right of appeal against the decision. Step 5 of section 3.4.15.4 specifically indicates that, "the person hearing the appeal will generally be the Functional Manager, Senior Manager, HR Manager or the Managing Director will become involved (if not already)."

35. It is worth reminding ourselves that the provisions in the Manual, including the whole of section 3.4.15, formed part of the contract which the appellant had signed and, in so doing, he was accepting that they applied to him. They do not give any right to have disciplinary matters investigated or determined by an independent inquiry as the appellant sought to demand. In view of the concerns already raised by the appellant, it may have been more understanding to consider bringing in an appropriately experienced outsider simply to allay his fears but failure to do so and to adhere to their own procedures was perfectly proper.

36. The original instruction from the Chairman of the Board of SPOL was to appoint a panel from the Board. We do not know how many members of the Board could have been selected as having less involvement with the problems to be considered by the panel. It is unlikely, in matters as serious for the company that any would be totally unaware of it but that is not the test. The test is whether they can still take an unbiased view of the matters they are to decide. The two men appointed from the Board should have been able to consider the matters of SPOL's business separately from other concerns.

"It is not a requirement that the defendant must conduct an investigation or inquiry into the complaint in the same manner as a court trial. As was said by Professor Rideout, the employer in the conduct and management of its business is not called upon to sit in judgment on an employee and require proof beyond reasonable doubt of alleged misconduct. When an incident occurs which raises the question of misconduct by an employee, the employer is required to act fairly in considering the interests of the employer's business and of the employee's employment in the business." Industrial Tribunal Law, R W Rideout p33.

38. We are satisfied that a fair procedure was adopted by the employer. As the trial judge pointed out, the question the court must answer is not whether the appellant is guilty of the misconduct charged but whether the procedures adopted were fair and sufficient to give the employer a reasonable belief that the appellant is guilty of the alleged misconduct:

"If the court is satisfied that the employer reasonably believes that the employee is guilty of the misconduct, a decision by the employer to dismiss the employee is unassailable. In any event, the reasons given by the claimant to justify his fear of partiality on the part of Mr Manehia and Mr Boyers do not appear to me to be sufficiently strong to justify disturbing the decision by the defendant to dismiss the claimant."

39. The learned judge clearly took all relevant matters into account and was correct to find that the disciplinary procedures adopted were in accordance with the requirements of natural justice, complied sufficiently with the requirements of the company Manual and did not in any way amount to breach of the appellant's contract of employment.

40. The appeal is dismissed and the appellant must pay the costs to be assessed if not agreed.

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Justice Goldsbrough
President of the Court of Appeal

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Justice Ward JA
Member of the Court of Appeal

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Justice Lunabek JA
Member of the Court of Appeal

Court of Appeal of Solomon Islands

Carey v South Pacific Oil [2015] SBCA 17; SICOA-CAC 41 of 2014 (9 October 2015)