The notice of Appeal contains
three grounds:-
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The Appellant developed these
grounds in oral argument. The Respondent for its part sought to uphold the
decision of the
trial judge for the reasons he gave.
Under the first ground of
Appeal the Appellant arthat the term “permanent” should be given its
ordinardinary literal meaning,
that is as descriptive of a situation intended to
exist for ever, or not expected to change. In an employment contract it was
argued that the expression described an engagement that was intended to the
on going, subject only to termination on
reasonable notice.
The meaning of “pert” in
the phrase “confirm your permanent status” as it was use in the Town Clerk’s
’s
letter of 26
October 1999 is to be understood in the context of the Staff
Regulations which governed the appointment to a post in the service
of the
Council. Clause 2 expressly distinguishes between temporary appointment (
clause 2.2), and appointment on probation
(clause 2.6), and implies that
after a period of probation an officer of the Council then acquires a
different status.
In our opinion having regarded to the context in which the
letter of 26 October 1999 was written “permanent status” described
the
status of an employee whose employment is continued after the successful
completion of a period of probationary service.
In this sense the Town
Clerk’s letter confirmed that the Appellant had become a “ permanent”
employee. However it does
not followed that the Appellant’s employment
thereafter was to continue for ever. Such an interpretation would be
contrary
to common sense and to clause 9.4 of the Staff Regulations which
allow for termination of an officer on giving notice.
The Judge in reaching his
conclusion emphasised the irregular nature of the Appellant’s appointment.
It is clear however
that his Lordship did not treat the fact that the
Appellant did not apply for the position, and that he was notified his
appointment by the mayor as invalidating his appointment to the office of
Deputy Town Clerk. Whatever irregularity accompanied
the Appellant’s
engagement, his appointment as Deputy Town Clerk was ratified by the
Council, first by paying his remuneration
as it fell due, and then by
confirming his permanent status at the end of his probationary period.
Clearly there was
a contract of employment as Deputy Town Clerk, and it
necessarily follows that once his appointment was ratified the Staff
Regulations had application to him.
The importance which his
Lip attached to the irregularity in his appointment was as e as evidence
indicating the terms
on which the Appellant was appointed, and in particular
as indicating the contractual term that would govern the termination
of his
contract. The case at trial and before this Court was fought by both parties
on the assumption that the MOU evidenced
a valid and enforceable agreement.
Neither party questioned the validity of the MOU. The trial Judge decided
the case
on this basis, and this court must do likewise. On the basis that
the MOU was a valid agreement, the central issue at trial
was whether the
Appellant’s contract of employment was on terms of a political appointment
that allowed for notice of
immediate dismissal if control of the Council
changed, or whether it was on the terms of a regular employee who, in the
absence of any specific agreement about notice, was entitled to 3 months
notice. In either situation termination would occur
under Staff Regulation
9.4. In the former situation the “due notice in accordance with the term of
his engagement” would
be notice with immediate affect. In the later
situation due notice would be three months.
Undoubtedly it was open to th trial judge to threat the irregularity in the Appellant’s appointment as
indicatincating that
the Council intended the terms of engagement to be those of
a political appointment. However, counsel for Appellant has argued
that the
evidence at trial did not permit findings that the Appellant was aware of
the Council’s intention and that he
accepted appointment on the terms of a
political appointee.
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The case seems to have been
conducted at trial on the basis that the exce of the MOU was common
on
knowledge to everyone
involved. In our opinion, against this background the
irregularities in the Appellant’s appointment, particularly his appointment
in the absence of a formal application, justified the findings and
conclusion reached by the trial Judge. We are not
persuaded that his
Lordship erred in his conclusion that the Appellant was engaged as a
political appointee, on terms
that allowed notice of immediate termination
if control of the Council changed.
In the course of developing his
argument under the first ground of appeal, counsel for the Appellant
contended that the
Appellant served under two separates appointments with
the Council, the first being the probationary appointment by the mayor,
and
the second being the appointment on “permanent status” made by the Council
in October 1999. Counsel contended that
even if the initial appointment had
been as a political appointee, the second appointment was as a regular
employee.
In our opinion this argument is untenable. There was no evidence
of a separate offer of employment in October 1999, no was
there any evidence
that the parties negotiated for a new contract at that time. The Council
simply resolved to continue
the Appellant existing engagement beyond the end
of the probation period. There was only one engagement of the plaintiff, and
if it was at the outset a political appointment it remained a political
appointment throughout.
Under the second ground of
appeal the appellant argued that the Judge’s interpretation ofmanent’
amounted to a to an unwarranted
re-writing of the contract of employment. It
follows from what we have already said that his Lordship did not fall into
such an error. On the contrary, he held that although the Appellant’s
employment was permanent in the sense that under Staff
Regulations he was
neither a temporary nor a probationary employee, his particular contract
nevertheless provided for
notice of immediate termination under clause 9.4.
The third ground of A is
misconceived. The trial Judge was not obliged to decided questions that were
unnecessary
to determine the outcome of the case. Once it was decided that
the Appellant’s contract had been lawfully terminated, there
was no need to
consider the alternative ground of defence based on the alleged commission
of disciplinary offences.
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Although not sically
argued on the appeal, the claims for relief in paragraphs 3 and 5 of the
Plaintiff’s original
claim appear to reflect a common misunderstanding about
contracts of employment. Although with other contracts the general
rule is
that a purported termination that is ineffective in law does not bring the
contract to an end, and that rights
may continue to accrue under the
contract until it is lawfully terminated, that rule is modified in contracts
of employment.
Contracts of employment are subject to an exceptional
principle, sometimes referred to as ‘no work, no pay’. The most
comprehensive statement of this principle is that of Dixon J in Automatic
Fire Sprinklers v. Watson [1946] HCA 25; (1946) 72 CLR 435 at 465 who said that a contract
of employment:
“is commonly understood as
involving no lity for wages or salary unle unless earned by service, even
though the failure
to serve is a consequence of the master’s wrongful act.
It is, of course, possible for the parties to make a contract for the
payment of periodical sums by the master to the servant independently of his
service… But, to say the least, it is not
usual. The common understanding of
a contract of employment at wages or salary periodically payable is that it
is the
service that earns the remuneration and even a wrongful discharge
from the service means that wages or salary cannot be earned
however ready
and willing the employee may be to serve and however much he stand by his
contract and decline to treat
it as discharged by breach.”
An employee who is wrongfully
dismissed cannot recover wages after the date of his dismissal. The employee
may have other
remedies based on breach of contract, but in the present case
the appellant’s employment was terminated lawfully that question
does not
arise.
As we have noted earlier, the
case at trial and in this Court has been presentedoth parties on the
ba basis that the
MOU was a valid and effective arrangement. Neither party
argued that the MOU was invalid, and we have decided the appeal on
the
issues raised by the parties. However, it is important that we note that
there are strong reasons to question the
parties’ assumption that Memoranda
of Understanding like those placed in evidence in this case are valid. This
Judgment
should not be taken to endorse their validity.
The strong reasons for dou
the validity of this kind of Memoranda of Understanding arise from the
structuructure and purpose
of the Municipalities Act. The purpose of the Act is
to establish a system of efficient ongoing administration of local
municipalities.
The Act provides for two levels
of decision-making and control. One level comprises the councillors under
the chairmanship
of the Mayor: see Part III of the Act. The other
level comprises the officers of the council under the supervision of the
Town Clerk as the Chief Officer of
the Council: see Part V of the Act.
These two levels are complimentary, but nevertheless fundamentally different
in one major respect.
The councillors and mayor are
elecositions which are held only for limited terms at the end oend of which
fresh elections
are held. The Act contemplates that at the end of the terms
of the councillors and Mayor there may be substantial changes at
that level
of the management of the Council. In contrast, the Act contemplates that the
officers of the Council, like
the general staff, will be appointed as normal
employees of a corporate body, engaged under contracts of employment subject
to the general law. The Act is drawn on the assumption that officers and
staff will continue to hold their positions
notwithstanding that the
periodic election of councillors and mayor may bring about changes in their
membership.
The Municipalities Act is
on the system of local government which developed in England under the
Westminstminster democratic system of government.
Under that system whilst the
voting constituency may periodically change management at councillor level,
the officers
and staff (the public service) will hold ongoing positions.
Those positions are generally said to be “permanent” ones, although
the
general law and specific contracts of employment will normally provide for
termination on giving an appropriate period
of notice.
Under the Municipalities Act,
section 19 gives the charge custody and responsibility fo books records
and otnd other documents to the Town Clerk,
thus recognising an administrative
structure that assumes the Town Clerk will continue to hold office
notwithstanding
the changes of mayor and councillors which can occur at
election time. The Act makes no provision for the termination of any
officer
at or following the time of elections. Section 24 provides for the
establishment of a pension scheme for officers
and staff retiring from the
service of the Council. This is another indication that officers appointed
under Part V of
the Act are intended to remain in office notwithstanding
periodic elections of councillors under Part III of the Act.
If the proper interpretation of
the Municipas Act is that officers shall hold their positions as
regular employees
whose service is to continue even though control of the
Council at councillor level may change at election time, an agreement
like
the MOU under which political parties or elected councillors agree to change
office holders in a council would be
contrary to the Act, and therefore
unlawful. The termination of an officer’s contract of employment pursuant to
a MOU
would be contrary to law, and the officer concerned would be entitled
to damages from the Council for unlawful dismissal. The
dismissed officer
might also have an action for damages against the councillors concerned for
unlawful interference with
the officer’s contract of employment. The
immunity from proceedings given to councillors by s. 67 of the Act for acts
done in good faith in the execution of their duty does not apply to unlawful
acts that are contrary to the duties imposed
by the Act.
The MOU may be unlawful in
another respect. Regulation 29 (1) (c) of the Municipal Council ElectElection
Regulations provides:-
“A person commits the
offence of bribery –
…………
(c) if before or
during an election he directly or indirectly, by himself or by any
other person on his behalf, receives, agrees or contracts for
any money, gift, loan, or valuable consideration or any office, place
or employment for himself or for any other person for voting or
agreeing to vote or from refraining or agreeing to refrain from
voting;”
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The words underlined could be
construed as applying to the parties to the MOU in so far as the MOU
purports to pre-determine
how votes will be cast in future elections for the
positions of Mayor and Deputy Mayor during the life of the MOU.
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Because the parties in this
appeal have presented their cases on the basis that the MOU is a valid
agreement it is not
necessary for the Court of Appeal to rule on these
issues, but it is important that we mention them so that this Judgment does
not give the impression that it supports the validity of Memoranda of
Understanding of the kind tendered in evidence
before the trial judge.
For the reasons given, the
appeal will be dismissed. Costs s follow the result of the athe appeal. The
Appellant is ordered
to pay the Respondent’s costs of the appeal.
Dated at Vila, this 1st
day of November, 2001.
Justice von Doussa
Justice Bruce Robertson
Justice Daniel Fatiaki
