Peritarau v Solomon Islands National Provident Fund [2011] SBTDP 6; UDF 33 of 2008 (17 August 2011)

IN THE TRADE DISPUTES PANEL OF SOLOMON ISLANDS

Case No: UDF 33 of 2008

IN THE MATTER of the Unfair Dismissal Act 1982

AND IN THE MATTER of a complaint of Unfair Dismissal

BETWEEN:

MOSES PERITARAU
Complainant

AND:

SOLOMON ISLANDS NATIONAL PROVIDENT FUND
Respondent

Hearing: 29 March 2011, Honiara.
Decision: 17th August, 2011.
Panel: Wickly Faga Deputy Chairman
Eric Maefelo Employee Member
Walter H. Rhein Employer Member
Appearances: Mr. Donald Marahare, counsel for the Complainant
Mr. Ishmael R. Kako, counsel for the Respondent

FINDING

The Complainant filed his complaint of unfair dismissal pursuant to section 6 of the Unfair Dismissal Act 1982, Cap77. The grounds of his complaint are that;

a. The allegations against the applicant are not true or are not proved satisfactorily.

b. In addition to or in the alternative to (a) above, the dismissal was and is unfair in that it is disproportionate to the applicant's role in the alleged misuse of the Respondent's funds

In its notice of appearance, the Respondent admitted that it dismissed the Complainant, and gave the reasons for dismissal as;

(i). Acted dishonestly and fraudulently in conspiring with others to defraud the fund.

(ii). Neglect of duty.

(iii).Alleged to have received part of some $91,000.00 stolen from the fund.

(iv). Breached clauses 3.2[1], 3.2[6], 3.2[10] and 4.1 of the Fund's Staff Policies and Procedures Manual("SPPM")

The reasons for dismissing the Complainant formed the Respondent's case in resisting the Complainant's claim.

During a full hearing of this matter, the Respondent called six witnesses to give evidence in support of its case. Five, except one, were direct.

Mrs Areau Hivu, who is Manager Internal Audit, gave evidence through sworn statement and sworn oral evidence. In her evidence, she told the Panel that during their normal audit reviews, they found out that payments to a certain Information Technology service provider, namely Zowick Consultancy [Zowick] were frequent and ongoing. This prompted the audit department to carry out further investigation. During further investigations, they found out that a total of $104,000.00 was paid to Zowick. However, Mr. Wickly Wemu who owns Zowick confirmed to Mrs Hivu that he only issued three invoices for services rendered between June and August 2007, to which a total of $13,000.00 was paid. The remaining balance of $91,000.00 was unaccounted for.

Mrs. Hivu further stated in her evidence on oath that the only persons who could possibly know who the money was paid to were those that verified the services rendered and subsequently approved payments. She also told the Panel that the Complainant approved two payments to Zowicks on the 18/01/08 and 27/02/08 when he was assistant manager finance.

Mrs. Barbara Rodie who is Assistant Internal Auditor gave a similar account to that of Mrs. Area Hivu in her sworn evidence.

Mr. Michael Maena, senior prosecution officer with the Respondent was a member of the Committee that dealt with the Complainant's disciplinary issue. He was at the relevant time the President of the staff-in-house union. He gave account of what he heard from Mr. Ronald Maepeza. This is hearsay evidence and the Panel gives no consideration of this piece of evidence.

Manager Administration, Mr. Alfred Sare, told the Panel in his evidence that his job as Manager Administration was to oversee the conduct of staff. He told the Panel that the Complainant was suspended from duties on full pay when his name was mentioned by Ronald Maepeza as one of the beneficiaries of money obtained from the fund through an alleged fraud. Mr. Maepeza revealed the Complainant's name during investigations after the audit section reported a suspicious pay out of $91,000.00 to Zowicks. During further investigation, the Complainant appeared before the Disciplinary Committee (the Committee) and gave his side of the story. After being given the opportunity to make representation, the Committee made recommendations to the General Manager. The committee recommended amongst others; the termination of the Complainant, and to report the matter to Police. The General Manager then made the decision to terminate the Complainant on the 26th May 2008.

Zowicks owner, Mr. Wemu made a statement to Mr. Michael Kaloa, denying that he had received any payments that were signed and authorized by the Complainant. This piece of evidence was deposed to by Mr. Kaloa in his sworn statement and admmitted with consent of both parties.

Mrs. Rose Karoa who is Manager Finance stated in her evidence that the payment raised on the 18/01/08 in respect of Zowicks (exhibited as "AH-17" in the sworn statement of Mrs. Hivu) was not authorized. The Payment Voucher in respect of Zowicks should be checked by the Complainant and returned to her for authorization. However, according to her evidence, the payment voucher bypassed her altogether. The Complainant was the one who signed cheques to Zowicks on the 18/01/08. She did acknowledge however that, as assistant Finance Managers, they were accountable to members who contribute to the fund

Mr. Reggie Philemon who now works under a contract for the Respondent stated in his evidence that the Complainant brought the cheque dated 18/01/08, (exhibited as "AH 8" in the sworn statement of Mrs. Hivu), for him to counter sign and after signing, the Complainant took it away. He confirmed that his signature was on the cheque.

He also told the Panel that he did not appear before the Disciplinary Committee, but made a report instead about the cheque he signed. He was aware that the Complainant was dismissed as a result of his involvement in the payments to Zowicks. But he would not say whether the Complainant received any money.

Also in his eidence, Mr. Philemon stated that usually, once payments have been authorized, then cheques are signed and paid to the service provider. He also confirmed that encashing of cheques is a normal practice in circumstances where service providers do not have a bank account.

Mr. Philemon further told the Panel that he and the complainant and Mrs. Rose Karoa were given responsibilities as assistant finance managers to verify, authorise payments, and sign cheques. He however acknowledged that they were expected to be vigilant when signing cheques to ensure that members fund is protected.

In his submission, Respondent counsel submitted that the involvment of the Complainant in the transaction is substantial reason, in that he co-signed cheques for payments on the 08/01/08 and 27/02/08, which were part of payments to Zowicks totalling $91,000-00 that was never accounted for. He further submitted that the Respondent acted reasonably in treating the reason for dismissing the complainant in that he was given an opportunity to give his side of the story whilst he was being suspended on full pay. The Complainant's termination was communicated to him in writing and all his entitlements were paid up to the date of his termination. It was further submitted that with the statutory requiment placed on the Respondent as trustee of members' money, it is incumbent on the Respondent to ensure that staff perform their tasks with diligence and honesty at the highest level. The Complainant's termination in this instance is justified and amounts to fair dismissal.

The Complainant's case however was that, there was no evidence to show that the allegation against him was true or that they lacked any proves, and that his dismissal was disproportionate to his role in the alleged misuse of the Respondent's funds.

In his sworn evidence, the Complainant told the Panel that he had been working for the Respondent for 18 years and was holding the position of Senior Accountant at the time of his dismissal. One of his duties at that time was to authorize payments and countersign cheques for payment. He did admit that he authorized and signed cheques for cashing on the 8/01/08 and 27/02/08. He told the Panel that he did so in good faith and in the usual discharge of his duties. He however denied that he pressured Mr. Maepeza into admitting guilt and had never at any time promised financial assistance to him. He also denied that he had shared any money with Mr. Maepeza.

In his closing submission, counsel for the Complainant stated that in light of the availiability of penalty of suspension under clause 14.2(b)(i)&(ii), and the fact that there was no slightest evidence to show the Complainant receiving and /or using monies belonging to the Fund, it was submitted that the Complainant's dismissal was unfair.

In considering whether the Complainant's termination was fair or unfair, the Panel must be guided by section 4(1)of the Unfair Dismissal Act [cap77]. That particular section provides that;

"An employee who is dismissed is not unfairly dismissed if-

(a) he had been dismissed for a substantial reason of a kind such as to justify the dismissal of an employee holding his position; and

(b) in all the circumstances, the employer had acted reasonably in treating the reason as sufficient for dismissing the employee..."

The first question is whether the reason for the Complainant's dismissal was of a substantial nature that justifies the dismissal of an employee holding his position. The Respondent terminated the Complainant for the following reasons; the Complainant acted dishonestly and fraudulently in conspiring with others to defraud the Fund, neglect of duty, and alleged to have received part of some $91,000.00 stolen from the Fund. The Respondent sought to establish that the reason for dismissal was substantial by relying on the evidence that he co-signed three cheques when he was Assistant Manager Finance, and that the payments were never accounted for. The Complainant authorized two payments made on 08/01/08 and 27/02/08 which amounted to $36,000.00.

The Complainant did admit that he signed the three cheques in respect of Zowicks, but that he had done so in good faith, and in the normal discharge of his duties. He told the Panel that he signed the cheques because he was aware that Zowicks was engaged by the Fund and had nothing to suspect anything wrong with the payments. He further told the Panel that it had become normal practice to get things from in tray out of the way. Usually he would sign 30 to 50 cheques in one day, and at times under pressure to get things over and done with.

In the Panels assessement of available evidence, the Respondent had not established to the satisfaction of the Panel that the Complainant conspired with others to defraud the fund, or that he received money stolen from the Fund. His dismissal was based solely on the fact that he signed cheques in respect of Zowicks. According to the Complainant, he signed the Cheques in good faith and in the normal discharge of his duties. He was also aware that Zowicks was engaged to do work for the Respondent and had no reason to suspect any fraudulent activity. It seems that the Respondent gave little weight to the Complainant's explanation. While the Respondent has all the right to view a particular offence as serious, it must take into consideration all available options necessary to deal with an employee fairly. The Respondent in our view has unleashed a disproportionate response to the alleged offence by the Complainant.

Having taken time to consider the evidence of both parties, the Panel is without good reason to answer the question in the affirmative, and accordingly, and in all the circumstances of this case, finds that the Complainant's termination was unfair.

In awarding compensation, the Panel takes into consideration that the Complainant had worked for the Respondent for about nineteen (19) years, and was receiving about $5,000.00 per month at the time of his dismissal. The Panel takes into account the conduct of the Respondent both before and after dismissal. The makes a fair and reasonable compensation award as follows;

AWARD

Basic Award	= BW X 52= Compensation
	$1250.00 x (52-30= 22)	= $27,500.00

The respondent unfairly dismissed the complainant and is to pay compensation to Moses Peritarau in the sum of $27,500.00 being payable immediately and is recoverable as a debt under section 10 of the Unfair Dismissal Act 1982 [cap 77].

COSTS

The respondent is ordered to pay $500-00 towards Panel expenses within 14 days from receipt of this finding.

APPEAL

There is a right of appeal to the High Court within 14 days on points of law only, and any party aggrieved by the amount of compensation awarded may within one month of the date of the award appeal to the High Court as provided for under the Unfair Dismissal Act 1982, S. 7 (3).

Dated the 17th of August 2011

On behalf of the Panel

DEPUTY CHAIRMAN/TDP