IN THE SUPREME COURT OF
THE REPUBLIC OF VANUATU
CIVIL JURISDICTION
Civil Case No. 122 of 1997
 
BETWEEN:
Hon. Donald Kalpokas MP, Hon. Sela Molisa MP, Hon. Joe Natuman MP, Hon. John Morison Willie MP, Hon. Shem Nakaut MP, Hon. James Dickinson MP, Kalongtas Alfred, Raymond Malapa, John Liu, Ioan Noel Mariasua, Ioan Lakeleo, Jimmy Marengo, Kaloris Takaia, Lydia Tarosa, Enet Manses, Marie Kalnangis, Roselyn Michel, Jack Kalongtan, Tarip Amos, Tawaia Kay, Kathlyn Kalson, Joe Kalmalap, Andrew Kosiama, Toko Mara, James Mele, Davidson Liliu, Apia Joseph, Leitangi Kone, Simon Romy, Ken Mark Joe, Susan Pita, Grace Molisa, Kalomata Kalo, Apen Trif, Job Dalesa, George Pakoasongi, Nakau Ieru, John Naket, Lin Asam, Amy Selwyn, Willie Iati, Timothy Kateina, Willie Sote, Stephen Nausien, George Kapalu, Tompson Kohu, Naku Kalik, Amet Joel, Ialhkam Kiel, Pechou Tetamat, E. S. George Pakoa, Marius Willie Louis, Josepha M. Lao, Christine Jonas Ayong, Teviri Marie Chanel, Tabisari Marian, Reuben Josen, Jimmy Napuk, Edwyn Clera, Crwley Malvirus, Koli Ores, Wellien Willie, Taso Edward, Simeon Poilapa, Allan Dan, Simeon Isaac, Marie Jeremiah, Edith Buleala, Isaac Yapatu, Philip Natapu, Sandy Alick, Kas Robert, Talap Willie, Ken Bani, Clement Leo, Rueben Lini, Kalman Kaltoi, Josephine Carol, Rebecca Tevi, Dickson, Kalnangis Wallis, Maki Netty, Sandy Toara, Brim Rose, B. Ben, Robinson Renaud
(All former Government ministers, or employees of c/o Vanuaaku Pati Offices)
Plaintiffs
AND:
Hon. Serge Rialuth Vohor
Hon. Prime Minister
First Defendant
AND:
Hon. Willie Jimmy
Hon. Minister of Finance
Second Defendant
AND:
Jeffrey Wilfred
Director General of Finance
Third Defendant
AND:
Hamlison Bulu
Attorney General
Fourth Defendant
AND:
The Government of the Republic of Vanuatu
Fifth Defendant
Coram: Acting Chief Justice Lunabek J
Counsel: Mr. Edward Nalial for the Plaintiffs
              Messrs. Ishmael Kalsakau and Arthur Vairua for the Defendants
 
JUDGMENT
Introduction
This matter comes before the Court by way of Originating Summons. The Plaintiffs, herein, claim for the following:
1.	Damages for breach of employment contract set out as follows: 
a.	gratuity; 
b.	three months salary in lieu of notice; 
c.	outstanding salary; 
d.	outstanding annual leave; 
e.	airfare to home island; 
f.	housing allowance; 
g.	child allowance; 
h.	Cost of living allowances. 
The total damage claimed is Vatu 31, 044, 294.
1.	Interests; 
2.	Costs; 
3.	Such further or other relief as the Court deems fit. 
The damages arose from the Plaintiffs’ termination of employment in 1997.
The Parties
There are 87 Plaintiffs in this action. The First six Plaintiffs are members of parliament. The Fifth and Sixth Plaintiffs, Hon. Shem Nakaut MP and Hon. John Dickinson MP were members of the Council of Ministers, during a coalition Government headed by the First Defendant, Hon. Serge Vohor, the then Prime Minister between 1 October 1996 to 20 May 1997. The First Four Plaintiffs, Hon. Donald Kalpokas, Hon. Sela Molisa, Hon. Joe Natuman, and Hon. John Morrison Willie were members of the Council of Ministers, during a coalition Government headed by the First Defendant, Hon Serge Vohor Rialuth, the then Prime Minister, between 25 October 1996 to 20 May 1997. The other vast majority of Plaintiffs were appointed to different positions within 6 Ministries in the coalition Government as political appointees on either 30 September 1996 or 25th October 1996.
The First Defendant is Hon. Serge Rialuth Vohor, the then Prime Minister of the Republic of Vanuatu at the time of the coalition Government and including the Second Defendant Hon, Willie Jimmy, the then Minister of Finance. The Third Defendant is the Director of Finance, Mr. Jeffrey Wilfred. The Fourth Defendant is the Attorney General of the Republic of Vanuatu, Hon. Hamlison Bulu, sued on behalf of the Fifth Defendant, the Government of the Republic of Vanuatu. The Fourth Defendant represents the First, Second, Third and Fifth Defendants in their respective capacities as Prime Minister, Minister of Finance, Director General of Finance and Government of Vanuatu.
The Pleadings and the Facts
The Pleadings
The Plaintiffs plead the facts of this case in their statement of claim containing 25 paragraphs filed with a specifically endorsed Writ of Summons on 22nd August 1997.
The Defendants filed a statement of Defence on 8 December 1997. In their statement of Defence, the Defendants admit paragraphs 1 to 24 of the Plaintiffs’ statement of claim. But the Defendants deny that they have failed and/ or refused to pay the Plaintiffs’ their contractual and/or statutory entitlements arising from the termination of their employment with the Fifth Defendant as pleaded in paragraph 25 of the Plaintiffs’ statement of claim.
Further the Defendants deny that the Plaintiffs have suffered damages and loss and deny that the relief claimed is the relief each Plaintiff is entitled to in that:
Firstly, all the Plaintiffs are entitled to no more that that which is prescribed in the schedule "A" attached to the statement of Defence.
Secondly, they set out the list of names of 43 Plaintiffs who by their contractual obligations to the Fifth Defendant, the Government of the Republic of Vanuatu, owe the Fifth Defendant certain amounts of vatus as particularized in the statement of defence.
On 13th August, 1998 counsels for the Plaintiffs and the Defendants signed a list of agreed facts which is set out as follows:
The List of Agreed Facts
Counsel for the Plaintiff and Defendant wholly agree to the following facts:
1.	On or about 25 October 1996, a new coalition Government led by the then Prime Minister, Serge Vohor was set up. This coalition Government included politicians from the Vanuaku Pati. 
2.	The Plaintiffs were appointed to different positions in the coalition Government as Ministers and also as political appointees. The vast majority of plaintiffs were appointed to their respective positions on either 30 September 1996 or 25 October 1996. 
3.	Each of the Plaintiffs received a letter of appointment from the office of the then Prime Minister, either signed personally by the Prime Minister or on his behalf. The terms of the appointment of each of the Plaintiffs are identical. 
4.	Each of the plaintiffs received a written offer of employment signed by or on behalf of the First Defendant, setting out the terms and conditions of the Plaintiffs contract of employment with the Fifth Defendant. 
5.	Each of the Plaintiffs contract of employment with the fifth Defendant included the following employment benefits: 
a.	Their salary, leave allowances, and other benefits, would be as provided for by the Official Salaries Act [CAP 168] as amended from time to time. 
b.	In the event of termination prior to 30 November 1999, 
i.	3 months notice of termination would be given; or
ii.	3 months salary in lieu of notice would be paid.
6.	Each of the Plaintiffs signed a copy of their letter of appointment as evidence of their acceptance of the contractual terms of their appointments. 
7.	On or about 20 May 1997, each of the Plaintiffs received a notice of termination of appointment signed by or on behalf of the First Defendant, acting on behalf of the Fifth Defendant. 
8.	The notice of termination of appointment given to the Plaintiffs by the First Defendant advised each of the Plaintiffs that they were entitled to the termination benefit provided for in their letter of appointment. The common parts in each notice of termination reads as follows: 
"I am writing to advise that I have decided to terminate your appointment as* in the Ministry of * with effect from Tuesday 20 May 1997.
That this termination entitles you to your benefits as specified in your letter of appointment.
I take this opportunity to thank you on behalf of the Vanuatu Government for your contribution in the services you have provided through the ministry of * to the people of Vanuatu and to wish you every success in your future careers.
Yours sincerely,
Hon. Rialuth Serge Vohor
Prime Minister/Government of Vanuatu"
1.	By Letter dated 16 July 1997, the Second Defendant, Hon. Willie Jimmy, the then Hon. Minister of Finance wrote to the Third Defendant, the Director General of Finance instructing the Third Defendant to pay the Plaintiffs their outstanding termination entitlements. 
2.	By letter dated 18 July 1997, the plaintiffs solicitors wrote to the Third Defendant requesting payment of the plaintiffs outstanding termination entitlements. 
3.	By further letter dated 22 July 1997, the plaintiffs solicitors wrote to the Second Defendant setting out full details of each of the plaintiffs entitlements, and requesting payment thereof. 
4.	By two letters dated 29 July 1997, the plaintiffs solicitors wrote to the Second Defendant again requesting payment of the plaintiffs termination of contract entitlements. 
 
The Affidavit Evidence
On 3rd September 1998, at 11.30 am the affidavit material filed by the First Plaintiff, Hon. Donald Kalpokas on 20 September 1997 in support of the Plaintiffs’ claim has been withdrawn by the Plaintiffs’ counsel on the basis that there is no need for Hon. Donald Kalpokas to be cross-examined on his affidavit (as requested by the Defendants’ counsel, Mr. Kalsakau). Counsel for the Plaintiffs, Mr. Edward Nalial says the facts agreed to by both Counsels are sufficient to support the Plaintiffs’ claim. 
The Defendant filed two (2) Affidavit materials in support of the defence on 3 September, 1998. The Plaintiffs’ Counsel objected to the two Affidavit Materials to be admitted on the basis that on 13 August 1998, during the conference held by Mr. Justice Tompkins, it was directed that the material evidence under the form of affidavit be filed three days before the hearing date. At 11.30 am, I admit the two Affidavit materials on condition that the two deponents namely, the Attorney General, Hon. Hamlison Bulu and the Director General of Finance, Mr. Jeffrey Wilfred sworn their respective Affidavits before a Commissioner of oath. At about 2.30pm on 3 September, the two Affidavits, in question were placed before the Court properly sworn by the two named deponents. They are, thus, then admitted as evidence on behalf of the Defendants. Justice requires that substance takes priority over the form. 
The Issues
The questions for the determination by this court are as follows: 
1- Do the Letters of Appointment issued by the then Hon. Prime Minister, Serge Rialuth Vohor, the First Defendant, and/or the then Acting Prime Minister, Hon. Donald Kalpokas, the First Plaintiff constitute employment contracts whit the Government of the Republic of Vanuatu, the Fifth Defendant ?
2- If the answer to question 1 is: yes;
Are these contracts of employment with the Government of Vanuatu, binding contracts, that is , enforceable in the event of termination by the First Defendant on behalf of the Government of the Republic - 
A.	In respect to Ministers of the Government of the Republic of Vanuatu ? 
B.	In respect to political appointees other than Ministers of the Government of the Republic of Vanuatu ? 
3- If the answers to question 2 (A) and (B) are both in the positive, what is then the applicable law in respect to damages claimed: the Employment Act [CAP.160] or the contracts of Employment on the basis of Section 6 of the Employment Act ?
4- Assessment of damages (if there are any). 
The Law
I set out below the relevant sections of the legislation and Articles of the Constitution.
The Relevant Constitutional Provisions
The Constitution is the Supreme Law of the Republic of Vanuatu. (Art.2). By Art. 25(1). Parliament votes the annual budget of the Government of the Republic of Vanuatu. Parliament of Vanuatu shall continue for 4 years, unless dissolved under Paragraph (2) or (3) of Article 28.
By Article 40 (1) a Council of Ministers is established and it consists of the Prime Minister and other Ministers. Further Articles 39 (1) provides that the Executive power of the people of the Republic of Vanuatu is vested in the Prime Minister and Council of Ministers and shall exercise as provided by the Constitution or a law. 
The Prime Minister is elected by Parliament from among its members … (Art. 41) and by Article 42: 
"42(1) The Prime Minister shall appoint the other Ministers from among the members of Parliament and may designate one of them as Deputy Prime Minister.
(2) The Prime Minister shall assign responsibilities for the conduct of Government to the Ministers. 
(3) The Prime Minister may remove the Ministers from office."
Under Chapter 9 – Administration – Part I - Public Service. 
Article 57(3), (4) & (5) provides: 
"57(3) No appointment shall be made to a post that has not been created in accordance with a law. 
(4) The Prime Minister or the Chairman of a local Government Council may exceptionally, make provision for the recruitment of staff for a specified period to meet unforeseen needs. 
(5) For as long as their post exist, public servants shall not be removed from their posts except in accordance with the Constitution."
By Article 58: 
"58(1) The rule of security of tenure provided for in Article 57(5) shall not apply to the personal political advisers of the Prime Minister and Ministers. 
(2) Senior public servants in Ministries may be transferred by the Prime Minister to other posts of equivalent rank."
The Relevant Legislative Provisions
Provisions of the Public Service Act. [CAP. 129]: 
Under Section 18 of this Act, 
"S. 18(1) The Prime Minister may by Order make regulations for the carrying out of the provisions of this Act and for the efficient management, control and working of the Public Service. 
(2) Different regulations may be made in respect of different classes of officers. 
(3) Without prejudice to the generality of subsections (1) and (2) the Prime Minister may in particular make regulations with respect to any of the following matters – 
(a) …
…
(d) generally for prescribing the terms and conditions of service and employment of officers; 
…
(f) generally for prescribing the terms and Conditions which may be imposed in or in respect of any contracts or arrangements relating to the Public Service entered into between the Government on the one hand and its officers or any other person on the other hand; 
(g) generally for prescribing fees, allowances and expenses that may be paid to any person for carrying out any functions or duties prescribed or provided for by this Act; 
…
i.	generally for prescribing the responsibilities and duties of officers; 
…"
By Section 19, 
"S.19 (1) The Prime Minister or the Public Service Commission may from time to time issue Public Service instructions covering every aspect of the work and privileges of officers. 
(2) Different Public Service Instructions may be made for and in respect of different classes of officers. 
(3) It shall not be necessary for instructions made under general conduct of officers and which shall form part of the conditions of Service of officers to be published in the Gazette. 
(4) …"
By Section 1 of the Act, it provides: 
"S.1 (1) In this Act, … 
"officer" means a person holding or acting in any office in the public service. (my emphasis). 
"Public Service" means the Service of the Republic in any capacity other than as a judge, or members of the armed forces, police or teaching services; …" (my emphasis) 
Relevant Sections of the Employment Act [CAP. 160]. 
Section 6 provides: 
"S.6: Nothing in this Act shall affect the operation of any law, custom, award or agreement which ensures more favorable conditions in any respect to the employees concerned than those provided for in this Act." 
By Section 29
"S. 29(1): Every employer shall grant an employer who has been in continuous employment with him for 12 consecutive months annual leave on full pay at the rate of 1 working day each month of employment. 
(2) The rate of the annual leave provided for in Subsection (1) shall be increased to 2 working days after 20 years, 4 working after 25 years and 6 working days after 30 days service in the same undertaking, whether continuous or not:
Provided that this subsection shall not apply in relation to employees in agricultural undertakings. 
(3) For the purpose of this Section there shall be included in the period of continuous employment any periods of absence from work caused by – 
a.	an accident at work duly certified by a recognized medical practitioner; 
b.	illness arising from employment duly certified by a recognized medical practitioner; 
c.	maternity leave up to a period of 12 weeks; 
d.	unless duly certified by a medical practitioner up to a period of 3 months." 
Section 32 provides: 
"S. 32: If a contract of employment terminates before the employee has acquired entitlement to annual leave, an allowance calculated on the basis of the entitlement provided for in Section 29 shall be paid in the place of leave: 
Provided that if the contract has been broken by the employee such allowance shall only be payable on condition that the employee has completed at least 6 months service, and, that in the case if hourly or dairly paid employees 1 months service shall mean not less than 22 days work carried out within the month."
Section 48 says: 
"S. 48: Subject to the provisions of this part a contract of employment shall terminate on the last day of the period agreed in the contract or on the completion of the piece of work specified therein."
By Section 49, 
"S. 49(1): A contract of employment for an unspecified period of time shall terminate on the expiry of notice given by either party to the other of his intention to terminate the contract. 
(2) Notice may be verbal o written, and, subject to subsection (3), may be given at any time. 
(3) The length of notice to be given under subsection (1) –
a.	where the employee has been in continuous employment with the same employer for not less than 3 years, shall be not less than 3 months. 
b.	In every other case – 
i.	where the employee is remunerated at intervals of not less than 14 days, shall be not less than 14 days before the end of the month in which the notice is given; 
ii.	where the employee is remunerated at intervals of less than 14 days, shall be at least equal to the interval. 
(4) Notice of termination need not be given if the employer pays the employee the full remuneration for the appropriate period of notice specified in Subsection (3)."
Section 76 says: 
"S. 76 (1) Except as provided in subsection (3) the provisions of this Act shall apply in relation to public servants and to the Government and any other public authority in Vanuatu subject to the modifications set out in subsection (2). 
(2) The modifications mentioned in subsection (1) are as follows:
a.	the references in this Act to the Minister shall be taken as references to the Minister responsible for matters relating to the public service; 
b.	the functions of the Labour Advisory Board shall be exercised by the Public Service Commission; 
c.	except in Section 65, the powers and duties of the Commissioner of Labour shall vest in the Director of Public Service Department; 
d.	the powers and duties of a Labour Officer shall vest in the Director of Public Service Department or an officer appointed by him for that purpose; 
e.	Sections 67, 72, 73 and 74 shall not apply. 
(3) Nothing contained in this Act shall apply in relation to members of the armed forces, police force or prison service." 
Provisions of the Official Salaries Act (CAP. 168)
Section 2 of the Official Salaries Act provides: 
"S. 2(1) Subject to subsection (2) the holders of the offices set out in column 1 of Part 1 of the schedule shall also be entitled to the benefits and allowances set out against those offices in column 3 of Part 1 of the schedule and described in detail in Part 2 of the schedule. 
(2) … where the holder of any of the offices set out in column 1 of Part 1 of the schedule is serving under an agreement and there is provision in such agreement for similar benefits and allowances as those set out in column 3 of Part 1 of the schedule, such person shall not be entitled to those benefits and allowances if provision therefor is made in such agreement."
And Section 3 says: 
"S. 3(1) The Prime Minister may after consultation with the President of the Republic add to, vary or replace the Schedule to this Act but not to the detriment of the holder of any office set out in the schedule.
(2) An Order under Subsection (1) shall be laid before Parliament without delay."
I set out below additional benefits provided under the Act in paragraphs B, D, E, G, I, J, and O in Part 2 of the schedule to the Act (as amended from time to time). 
These paragraphs provide for: 
i.	by paragraph B, the provision of a "furnished house" at the rental fixed by government; 
ii.	by paragraph D, "a child allowance of VT1.200 a month per child"; 
iii.	by paragraph E, "a gratuity payable at the rate of one-twelfth of the annual salary for each year during which a person holds the office and pro-rate for each uncompleted year."; 
iv.	by paragraph G, "annual leave calculated at the rate of one and three quarter working days every month of service."; 
v.	by paragraph I, "the payment of re-imbursement of the actual cost of transport between Port Vila and the home island and the return journey by the most direct route on home leave."; 
vi.	by paragraph J, "costs of living allowance of VT2.500 a month". 
By Order No. 19 of 1996 further amendments occurred to the Official Salaries Act "the Act" in Part 1 and 2 of the schedule by adding a new class of benefits which is "class O" so that it reads: 
1.	"Class O 
Where the holder of the office has been served a two months probation and has been confirmed by the Prime Minister as a permanent political appointee, he shall be entitled to receive payment of three months salary in lieu of notice in the event of termination, other than for mis-conduct, or where his appointment comes to an end as a result of the Prime Minister ceasing to hold office after four years or after a vote of no confidence in Parliament."
2.	Part 1 of the schedule to the Act is further amended in columns 1 and 2 by adding class "O" to the following office-holders: 
a.	Prime Minister 
b.	Deputy Prime Minister 
c.	Minister 
d.	First Political Secretary 
e.	Second Political Secretary 
f.	Third Political Secretary 
g.	Private Secretary to the Prime Minister 
h.	Private Secretary to the Deputy Prime Minister 
i.	Principal Administration officer to the Prime Minister 
j.	Secretary to the Council of Ministers 
k.	Private Secretary to the Speaker 
l.	Minister’s Office Supervisor 
m.	Council of Ministers’ Office Supervisor 
n.	Minister’s Secretary/Typists 
o.	Ministers’ Drivers – grades 1 and 2 
p.	… 
q.	Speaker’s Drivers – grades 1 and 2 
r.	Cleaner to the Ministry 
s.	Office Manager to the Prime Minister 
t.	… 
u.	Advisor to Minister 
v.	… 
w.	Filing Clerk 
x.	Receptionist 
y.	Messenger 
z.	Ministers Residence cleaner 
By order 46 of 1997, dated 25 November, 1997 the Order No. 19 of 1996 was repealed. [see Annexure "J." to Affidavit of Hamlison Bulu, Attorney General]. 
Relevant Provisions of the Interpretation Act [CAP. 132]
By Section 4. "A reference to the holder of an office by the terms designing his office shall be construed as meaning the person for the time being lawfully holding, acting in or performing the functions of that office."
By Section 9. "(1) Every Act shall be read and construed subject to the Constitution and where any provision of an Act conflicts with a provision in the Constitution the Act shall nevertheless be valid to the extent that it is not in conflict with the Constitution." 
By Section 10. "(3) A reference to a particular Act of Parliament shall be construed as including a reference to that Act as Amended from time to time and to any statutory orders made thereunder.
(4) A reference to a particular statutory order shall be construed as including a reference to that order as amended from time to time."
And Section 11 provides: 
"S. 11(1) Where any Act of Parliament repeals any Act, the repeal shall not- 
(c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any Act so repealed; or 
…
a.	affect any legal proceeding … and any such … legal proceeding may be continued or enforced … as if the repealing Act had not been passed. 
…"
By section 12: 
"Where an Act of Parliament confers on the President, a Minister or any other authority a power to make or a power exercisable by making proclamations, rules, regulations, by-laws, orders or statutory orders, any document by which that power is exercised shall be known as a statutory order and the provisions of this Act shall apply thereto accordingly." 
And Section 15 says: 
"S. 15(4) Any provision of a statutory order which is inconsistent with any provision of any Act of Parliament (including the Act under which the Order was made) shall be void to the extent of the inconsistency.
(6) An act done under or by virtue of or in pursuance of a statutory order shall be deemed to be done under or by virtue of or in pursuance of the Act conferring power to make the order. 
(7) Every statutory order shall be considered to be made under all powers thereunto enabling, whether or not it purports to be made in exercise of a particular power or particular powers. 
(8) Section 11 of this Act shall apply on the revocation of a statutory order as it applies on the repeal of an Act of Parliament." 
Section 20 provides: 
"S. 20: Where an Act of Parliament confers a power on any person to do or enforce the doing of any act or thing all such powers shall be understood to be also given as are reasonably necessary to enable the person to do or enforce the doing of the act or thing." 
By Section 21: 
"S. 21: Where an Act of Parliament confers power on any authority to make any appointment that authority shall also have the power (subject to any limitations or qualifications which affect the power of appointment) to remove, suspend, reappoint or reinstate any person appointed in the exercise of the power." 
I now propose to proceed by answering the questions posed in turn. 
I.	Do the Letters of Appointment of the Plaintiffs by the First Defendant and/or on his behalf, constitute employment contracts with the Government of the Republic of Vanuatu, the Fifth Defendant? 
There is no great deal of dispute between the parties on this point. The parties agreed to the following facts – On 25 October 1996, a new coalition government led by the then Prime Minister, Serge Vohor was set up. This coalition government included the Plaintiffs as politicians from the Vanuaku Pati (V. P.). Each of the Plaintiffs received a letter of appointment from the office of the then Prime Minister, either personally signed by the Prime Minister or on his behalf. The terms of the appointment of each of the Plaintiffs are identical. Each of the Plaintiffs received a written offer of employment signed by or on behalf of the First Defendant, setting out the terms and conditions of the Plaintiffs contract of employment with the Fifth Defendant. Each of the Plaintiffs contract of employment with the Fifth Defendant included the following employment benefits: 
(a) Their salary, leave allowances, and other benefits, would be as provided for by the Official Salaries Act [CAP. 168] as amended from time to time. 
(b) In the event of termination prior to 30 November 1999, 
i.	3 months notice of termination would be given ; or 
ii.	3 months salary in lieu of notice would be paid. 
Each of the Plaintiffs signed a copy of their letter of appointment as evidence of their acceptance of the contractual terms of their appointment. On 20 May 1997, each of the Plaintiffs received a notice of termination of appointment signed by or on behalf of the First Defendant, acting on behalf of the Fifth Defendant. The notice of termination of appointment given to the Plaintiffs by the First Defendant advised each of the Plaintiffs that they were entitled to the termination benefit provided for in their letter of appointment. 
It is, therefore, beyond doubt that the letters of appointment received and signed by each of the Plaintiffs, constitute contracts of employment between each of the Plaintiffs and the Fifth Defendant, the Government of Vanuatu. The contracts of employment are fixed term contracts of appointment to be expired on 30 November, 1999. Counsel for the Defendants agreed to that effect during the course of arguments. 
The answer to question 1 is: yes. 
II. Are the contracts binding, that is, enforceable in the event of termination by the First Defendant on behalf of the Government of the Republic of Vanuatu, the Fifth Defendant? 
It is submitted on behalf of the Plaintiffs that the letters of appointment of each of the Plaintiffs containing terms and conditions of their employment with the Government of the Republic of Vanuatu, are binding contracts and therefore enforceable. It is also said for the Plaintiffs that as it transpires in Paragraphs 7 to 8 of the list of agreed facts, on or about 20 May 1997, each of the Plaintiffs received a notice of termination of appointment signed by or on behalf of the First Defendant, acting on behalf of the Fifth Defendant. The notice of termination of appointment given to the Plaintiffs advised that they were entitled to the termination benefits provided for in their letter of appointment in this way: 
"I am writing to advise that I have decided to terminate your appointment as … in the Ministry of … with effect from Tuesday 20 May 1997. 
That this termination entitles you to your benefits as specified in your letter of appointment. 
…"
It is then submitted for the Plaintiffs that it was the Notice of termination that constitutes breach of their contracts of employment with the Government of the Republic of Vanuatu. The breach, it is submitted, is caused by the First Defendant, acting on behalf of the Fifth Defendant. The Plaintiffs, it is, thus, submitted, are entitled to claim damages as attached to the schedule A to F to the Writ and Statement of claim. 
The essence of the Defendants’ submissions is that the Plaintiffs’ contracts of employment within the Fifth Defendant, the Government of the Republic are illegal and, therefore, unenforceable. Two grounds were advanced in support for these submissions. 
First, it is contended for the Defendants that the First Defendant, the then Prime Minister, Hon. Serge Rialuth Vohor has no lawful mandate to engage political appointees and in any event, the said contracts are void and, thus unenforceable as regards the Office of the Ministers of the government of the Republic. There is substance in this argument as we shall see latter on. 
Second, it is contended for the Defendants that even if the Plaintiffs’ contracts were made on the presumption that legal consequences will be drawn, the Plaintiffs’ contracts are still invalid if they constitute a fetter on the mandate of the Government of the Republic State of Vanuatu, as it is put, the Prime Minister has no lawful mandate to engage the expenditure of the Public Purse. The Defendants rely on the New Zealand Case of Rothmans –v- Attorney General (1991) 2NZLR 323. 
In that case, the Minister of Health on behalf of the government (NZ) signed a document in 1987 headed "agreement" with cigarette manufacturing companies, including the Plaintiff, Rothmans of Pall Mall (NZ) Ltd., as to the regime to apply in respect of cigarette advertising in New Zealand. The agreement was to continue for three years and thereafter be subject to renegotiation on appropriate notice from either party. In a preamble to the documents it was stated that the agreement was in lieu of further legislative or regulatory restrictions on the marketing of tobacco products while the agreement was current. It was for a specified term and imposed obligations on the manufacturing companies as to making information available, an arrangement which regulated their ability to market. In December 1989, the Minister of Health announced the government’s intention to prepare legislation which would effectively bring an end to tobacco advertising and sponsorship in New Zealand. In March 1990, the Plaintiff gave appropriate notice that it wished to renegotiate the agreement. The Minister responded that the government intended to proceed by way of legislation. The Plaintiff brought proceedings against the Attorney General seeking declarations that under the agreement each party was under an obligation not to impede or prevent such renegotiations, and that each party was required to enter into such renegotiations in food faith. 
Robertson J held that: 
The document was not simply a policy statement by the government, but it was an agreement between the parties about business affairs …
1.	The only possible consideration from the government for the agreement was a commitment not to legislation or regulate during the currency of the agreement. The executive cannot, however, restrict the legislative competence of Parliament by contract, and therefore the government’s promise in respect of future legislation was of no value. The contract accordingly failed for lack of consideration and was not legally enforceable and gave judgment for the Defendant, Attorney General. 
In response to the Defendants’ second ground of submissions, it is submitted for the Plaintiffs that when the Plaintiffs entered into their contracts of employment with the Fifth Defendant, the Government of the Republic, their contracts are lawful and if there is breach, then the contracts are enforceable. It is conceded on behalf of the Plaintiffs that only Parliament has mandate to approve the budget. They say however, this does not stop the Plaintiffs to take benefits under the contracts. The Plaintiffs rely on the case of New South Wales –v- Bardolph (1934) 52 C. L. R. 455. In that case, the High Court of Australia held that it was no answer to a suit against the Crown upon a contract that the moneys necessary to answer the liability had not, up to the time of the suit, been provided by Parliament. The provision of funds by Parliament was simply a condition which must be fulfilled before actual payment by the Crown, and did not go to the formation, legality or validity of the contract. Moreover, it seems that an express appropriation is not required. 
In my view, the interpretation of the rule adopted by the Australian case in New South Wales -v- Bardolph is to be preferred on this point. The New Zealand case of Rothmans -v- Attorney General (referred to above) has to be distinguished from this case. In Rothmans case, the agreement contained express terms to the effect that the agreement was made in lieu of further legislative or regulatory restrictions on the making of tobacco products while the agreement was current. Whereas in the case before the Court, the Plaintiffs (87 Plaintiffs in total) were appointed to different offices/positions functions provided by the Constitution or the Public Service Act [CAP. 129] and/or the Official Salaries Act [CAP. 168]. The appointment of the Plaintiffs were made to different posts that have been created in accordance with a law (see Article 57(3) of the Constitution). Therefore, the provision of funds by Parliament was simply a condition which must be fulfilled before actual payment by the Government of the Republic State and as such, did not go to the formation, legality or validity of the contract. In any event, the letters of appointment of the Plaintiffs do not fetter the power of Parliament to legislate. 
As to the specific point raised by the Defendants as to whether the Prime Minister has lawful mandate to engage the expenditure of the Public Purse, I do not need to answer it in a theoretical guessing exercise, since I think, the answer is related and depended on the answer to be given to the question raised also by the Defendants as to whether or not the Prime Minister has lawful mandate to appoint the Plaintiffs as political appointees as put in the first part of the Defendants’ submissions. 
I now propose to deal first with the situation of the First Six Plaintiffs, namely, Hon. Donald Kalpokas MP, Hon. Sela Molisa MP, Hon. Joe Natuman MP, Hon. John Morison Willie MP, Hon. Shem Naukaut MP, Hon. John Dickenson MP, as they were Members of the Council of Ministers at the relevant time of the coalition Government referred to in this case. I will then deal with the situation of the Plaintiffs other than Ministers of the government at the relevant time. 
(A) Are the contracts of employment signed by the Prime Minister on behalf of the Government of Vanuatu, with each of the First Six Plaintiffs, in their capacity as Ministers of the Government of the Republic and, thus, members of the Council of Ministers, binding contracts? 
The answer to this question is obviously: No. The reasons are set out below. 
As per Vanuatu Constitution of 1980, the Ministers including the Prime Minister of the Republic of Vanuatu, are Constitutional Officer-Holders. By Article 40(1) a Council of Ministers is established and "shall consist of the Prime Minister and other Ministers." The Prime Minister is elected by Parliament from its members … (Art. 41) and it is the Prime Minister, then, who has power to appoint and remove the Ministers under Article 42(1), (3) of the Constitution. 
Article 42 provides: 
"Art. 42 (1) The Prime Minister shall appoint the other Ministers from among the members of Parliament and may designate one of them as Deputy Prime Minister. (emphasis added)
(2) The Prime Minister shall assign responsibilities for the conduct of Government to the Ministers
(3) The Prime Minister may remove the Ministers from office." (emphasis added).
It is clear that by Art. 42 (1) the Prime Minister has a mandatory power to appoint Ministers and by Art. 42 (3) he has a discretionary power to remove the Ministers from office. 
In this case, the First Six Plaintiffs, namely, Hon. Donald Kalpokas MP, Hon. Sela Molisa MP, Hon. Joe Natuman MP, Hon. John Morrison Willie MP, Hon. Shem Naukaut MP, Hon. John Dickenson MP, were appointed Ministers in the coalition Government led by the First Defendant, Hon. Serge Rialuth Vohor, the then Prime Minister, between 1 October and/or 25 October 1996 to 20 May 1997, date upon which they were removed by the First Defendant, as Ministers of the Government of the Republic. 
It is to be noted that Ministers of the Government of this Republic, including the Prime Minister, take official oath of allegiance to the Republic upon their appointment as Ministers of the Government and upon his election by Parliament, in the case of the Prime Minister. Ministers were appointed by the Prime Minister under Art. 42 of the Constitution. Their instrument of appointment constitute constitutional orders made by the Prime Minister in exercise of his power under Art. 42 of the Constitution and as such are published in the gazette. [see Section 16 of the Interpretation Act (CAP. 132).].
It is extraordinary to see that in this case, the instrument of appointment of each of the First Six Plaintiffs as Ministers of the Government, contain, inter alia, additional and in identical terms the following provision:-
"This is a fixed term of appointment which will expire on 30th November 1999 unless terminated earlier in accordance with the following provisions: 
a.	At the end of 3 months written notice; 
b.	At any time by giving 3 months salary in lieu of notice; 
…"
This clause/provision purports to guarantee a particular term of office or to assure each of the First Six Plaintiffs that each of them will not be removed except after a period of 3 months written notice and/or by giving 3 months salary in lieu of notice. 
In my judgment, a Constitutional power to remove a Minister at discretion or at will, cannot be curtailed by an agreement purporting to guarantee a particular term of office or to assure an appointee – Minister – that she/he will not be dismissed except after a period of notice and/or a payment of salary in lieu of notice. Such contracts are ultra vires on the ground that the contracting authority, in this case, the then Hon. Prime Minister, Serge Rialuth Vohor, was imposing an illegitimate fetter on his constitutional discretion under Article 42 (3). Such "provision" is not provided for under Art. 42 (3) of the Constitution. Being ultra vires, the contracts could not give rise even to actions for damages in the event of their breach. 
There is judicial support for this view. In effect, a statutory power to remove from office cannot be curtailed by contract. [see Laird -v- Municipality of Portland (1968) Tas. S. R. 90; see also Mansfield -v- Blenheim Borough Council (1923) N. Z. L. R. 842]. 
The claim for damages based on breach of the contract in respect to the First Six Plaintiffs as Ministers of the said coalition Government, and thus, Members of the Council of Ministers, at the relevant time, fail and I so rule. 
One further point to be considered is the statutory entitlements of the First Six Plaintiffs arising from their removal from office as Ministers of the government of the Republic. This point of claim can be noted from the pleadings in the statement of claim in paragraph 25. 
Claims for statutory entitlements of the First Six Plaintiffs as Ministers of the Government at the relevant period. 
1. "Payment of three months salary in lieu of notice in the event of termination …" under "Class O" of the Official Salaries Act. [CAP. 168] [as Amended]. 
By Class O of the O. S. A., it provides: 
"Where the holder of the office has served a two month probation and has been confirmed by the Prime Minister as a permanent political appointee, he shall be entitled to receive payment of three months salary in lieu of notice in the event of termination, other than for misconduct, or where his appointment comes to an end as a result of the Prime Minister ceasing to hold office after four years or after a vote of no confidence in Parliament."
It must be noted that the provision of the "payment of three months salary in lieu of notice in the event of termination…" stipulated in the instrument of appointment of the First six Plaintiffs, is also provided by Order No.19 of the Official Salaries Act under Class "O", as additional Benefits in Part 2 of the Schedule of the Act. Part 1 of the schedule to the Act is further amended in columns 1 and 2 by adding class "O" to the First Six Plaintiffs in their capacity as Deputy Prime Minister (First Plaintiff) and Ministers of the Government ( other five Plaintiffs) at the relevant period.
The Official Salaries Order No.19 of 1996 was issued by the then Prime Minister, the First Defendant, in exercise of his power under section 3 of the Official Salaries Act. It was then published in the Official Gazette No.26 of 28 October 1996 which is judicially noted.
The First Six Plaintiffs were removed from office as Ministers of the Government of the Republic on 20 May 1997. The Specially Endorsed Writ of Summons with the Statement of Claim in respect to these proceedings before the Court were filed on 22nd August, 1997. 
By Official Salaries Order No. 46 of 1997, dated 25th November 1997 the Official Salaries Order No. 19 was then repealed as evidence in the sworn Affidavit of Hamlison Bulu, Attorney General, in Annexure marked "J" filed and admitted in these proceedings. 
Section 11(1)(c)(e) of the Interpretation Act [CAP 132] provides: 
"S. 11(1): Where any Act of Parliament repeals any Act, the repeal shall not – 
(c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any Act so repealed; or
(e) affect any legal proceeding … and any such … legal proceeding may be continued or enforced .. as if the repealing Act had not been passed." 
By Section 15(8) of the same Act, it is provided: 
"S. 15 (8): Section 11 of this Act shall apply on the revocation of a statutory order as it applies on the repeal of an Act of Parliament."
Official Salaries Orders Nos. 19 of 1996 and 46 of 1997 were statutory orders [see Sect. 10 (3) (4) of the Interpretation Act]. 
It would appears that by operation of Section 11(1) (c), (e) in conjunction with Section 15 (8) of the Interpretation Act [CAP. 132], the First Six Plaintiffs would be entitled to the additional benefits under class "O" of the Official Salaries Act (CAP. 168). 
In my view the First Six Plaintiffs, are, however, not entitled to "class O" benefits under the Act (as amended). The reasons being that, the then Prime Minister, the First Defendant had been empowered by the Constitution to appoint Ministers of the Government under Art. 42 (1). He had also been empowered by Art. 42 (3) to remove Ministers from office. The Prime Minister had a discretionary power under the Constitution to remove Ministers from office under Art. 42 (3) and the expression "may" is used. The then Prime Minister had made an Order No. 19 of 1996 which provided under "Class O" of the Official Salaries Act for the: 
"payment of three months salary in lieu of notice in the event of termination, …"
That Order No. 19 of 1996 under "Class O" is extended to the First Six Plaintiffs in their capacity as Deputy Prime Minister and Ministers of the coalition Government at the relevant period. 
There is no doubt in my mind that this Official Salaries Order No. 19 of 1996 is invalid to the extent that it applies to the Deputy Prime Minister and Ministers of the Government. It was not authorized by the Constitution and was inconsistent with Article 42 (3) of the Constitution and I so rule. The First Six Plaintiffs cannot either be entitled to 3 months salaries in lieu of notice under "Class O" of the O. S. A. (CAP. 168). 
I am conscious of the fact that no submissions were made before me on that very point. However, it is my view that since it involves a question of constitutional validity of the orders made under the Official Salaries Act and which are also contained in the Instrument of Appointment of the First Six Plaintiffs, it is my incumbent duty under the Constitution to so hold. 
2. Other Statutory entitlements 
The First Six Plaintiffs claim also for other statutory entitlements. These include: gratuity, outstanding salary, outstanding annual leave, airfare to home island, housing allowance, child allowance and costs of living allowance. 
Section 6 of the Employment Act [CAP. 160] is not applicable to the case of the First Six Plaintiffs as Ministers of Government. There is no valid agreement between the First Six Plaintiffs and the First Defendant on behalf of the Fifth Defendant, the Government of Vanuatu. 
The First Six Plaintiffs can be entitled to other benefits provided for under Official Salaries Act (CAP. 168) provided they have to become lawfully due as a sine quo non condition for entitlements under the Act. 
•	 Gratuity 
It is important to note that the Official Salaries Act No. 11 of 1983 came into force on the 1st of June, 1983. The Employment Act [CAP. 160] was Act No. 1 of 1983 and came into force on the 30th May, 1983. Gratuity is provided under "Class E" in Part 2 of the Schedule. As originally enacted the O. S. A. "Class E" provided: 
"A severance allowance payable at the rate of one twelfth of the annual salary for each year during which a person holds the office and pro-rata for each uncompleted year." 
On the 18th June 1984 by Act No. 23 of 1984 the word "gratuity" was substituted for the words "severance allowance" under "Class E" in part 2 of the schedule and it was then read: 
"A gratuity payable at the rate of one twelfth of the annual salary for each year during which the person holds the office and pro-rata for each uncompleted year."
In the matter of: the Application of Grace Mera Molisa, Civil Case No. 155 of 1993, Mr. Justice Downing J expressed the view that the payment (of gratuity) to be made under Official Salaries Act is in the nature of a severance allowance. Like the severance allowance as provided for under the Employment Act it is calculated with reference to the period of employment in whole years and fractions. The only difference between the severance allowance and the gratuity is that gratuity is paid on an annual basis whereas severance allowance is paid at the termination of the employment. 
I have no reason to disagree with the view expressed by Downing J in Re the Application of Grace Mera Molisa, Civil Case No. 155 of 1993, Van.L.R. Vol. 2 [1989-1994] p. 7-27. The First Six Plaintiffs will be entitled to gratuity calculated with reference to the period of Employment in whole years and fractions. The facts before this Court are that the Plaintiffs held office as Ministers of the government from October 1996 to May 1997 that is 7 to 8 months. They would be entitled to claim gratuity to be calculated on pro-rata for the incomplete year and on that basis only. 
•	Outstanding salary 
It is submitted the First Six Plaintiffs are entitled to their outstanding salary. They were paid up to 15 May, 1997, however, the period 16 to 20 May 1997 inclusive remains outstanding. 
It would appear that the Defendants do not dispute that claim. The First Six Plaintiffs are entitled to that claim of 4 days outstanding salary. 
•	Outstanding annual leave 
It is submitted the Plaintiffs are entitled to this Class G entitlements as under the O. S. A. (CAP. 168) which is also affirmed in the Plaintiffs’ contracts. 
"Class G" of the O. S. Act provides for "Annual Leave calculated at the rate of one and three quarter working days for every month of service."
The claim of outstanding annual leave is made under the contract since the so-called contracts of employment with the First Six Plaintiffs are void, they are not entitled to this "Class G" entitlement. Further they could only be entitled to this claim, if each of them had served the Fifth Defendant for a period of one year, which is not the case here. No evidence is adduced in support of this claim. That claim is refused. 
•	Airfare To Home Island entitlement 
This is a claim under "Class I" of the O. S. A. provided in Part 2 of the Schedule for: 
"The payment or the reimbursement of the actual costs of transport between Port Vila and the home island and the return journey by the most direct route on home leave." 
It is submitted the Plaintiffs are entitled to same. 
There is no evidence before the Court in respect to that claim. This claim is refused. 
•	Housing Allowance 
This is a Class B entitlement under the O. S. A. "furnished house at rental fixed by government." 
There is no evidence before the Court that the First Six Plaintiffs did not live in a "Furnished house at rental fixed by government" at the relevant period. 
This claim is refused. 
•	Child Allowance 
This is a claim under Class D of the Act providing for "A child allowance of VT1.200 a month per child." 
There is no evidence before this Court to support that claim. It is, thus, refused. 
•	Costs of living allowance 
This is a Class J entitlement under the Act providing for "Costs of living allowance of VT1,200 a month.". 
There is no evidence before the Court to support this claim. It is therefore refused. 
I now deal with the situation of the Plaintiffs other than Ministers of the government at the relevant period. 
B. Are the contracts of employment signed by the Prime Minister, on behalf of the Fifth Defendant, the Government of Vanuatu, with the Plaintiffs, as political appointees, binding contracts? 
It is submitted for the Defendants that the First Defendant, the then Prime Minister, Hon. Serge Rialuth Vohor has no lawful mandate to engage political appointees. 
It is conceded for the Defendants that the Constitution of Vanuatu makes reference to political appointees and the Official Salaries Act provides for their entitlements. But it is put, the difficulty for the Defendants is that the Prime Minister has no power under the law to engage the Plaintiffs as political appointees although it is conceded on behalf of the Defendants that, the Prime Minister has some powers under Article 57 (4) of the Constitution. 
In this case, it is argued for the Defendants that only the Public Service Commission has constitutional powers to engage into the Public Service under Chap. 9. So it is said the Public Service Commission have a say. The Plaintiffs fail to show whether the Public Service Commission was involved in the appointment processes. 
Further, it is said the Department of Finance must involve in the appointment of political appointees in the Public Service since they are concerned about the expenditure of the Public Purse. Here, the Defendants rely on the Affidavit evidence of Jeffrey Wilfred which show the constraints of Finance Department to any transactions engaging the Public Purse. 
It is also advanced that the legal Armory of the government must also involve to consider the legal implications of such appointments. The Defendants rely on the Affidavit of the Attorney General, Hon. Hamlison Bulu which show, that when the Attorney General advised the Council of Ministers on the issues before the Court the Council makes a different decision and the Attorney General was in a difficult position and tries his best to carry out nevertheless instructions from the Council of Ministers. 
It is therefore submitted that the contracts of the Plaintiffs are based on consideration which is illegal ab initio and as such, are unenforceable. 
In my view there is no substance in these submissions. I am aware of the Financial constraints of the Government through the Finance Department in relation to any transactions engaging the Public Purse and subsequently the tremendous pressure under which the Director General of Finance, the Third Defendant, was in and I sympathize with him. I am also aware of the difficult position the Hon. Attorney General was in by advising these acting on behalf of the Fifth Defendant, the Government of the Republic on these issues before the Court but the advice were not followed and he has to carry out the instructions from his clients. I sympathize also with him. However, the facts established in the Affidavits evidence of both the Attorney General and the Director General of Finance are not relevant to the point before this Court as to whether or not the Prime Minister of the Republic has a lawful mandate to appoint the Plaintiffs as political appointees to the service of the Fifth Defendant, the Government of the Republic and as such they are both rejected as irrelevant. 
My answer to question posed is: Yes the contracts of the Plaintiffs as political appointees, signed by the First Defendant, the then Prime Minister, acting on behalf of the Fifth Defendant, the Government of the Republic, are binding contracts because the Prime Minister has a lawful mandate to engage the Plaintiffs in the service of the Government, the Fifth Defendant. The reasons are set out below. 
The Constitution – Chapter 9 – Administration – Part I
The Public Service
By Art. 57(3): 
"No appointment shall be made to a post that has not been created in accordance with a law." 
It is not disputed the Plaintiffs are appointed as political appointees. The Constitution makes reference to them under Article 58 (1). 
Art. 58(1) provides: 
"The rule of security of tenure provided for in Article 37 (5) shall not apply to the personal political advisors of the Prime Minister and Ministers." 
It is not disputed as the Defendants conceded in their submissions, the Official Salaries Act [CAP. 168] also provides salaries and other benefits for the political appointees. 
The posts of political appointees are therefore created in accordance with a law. 
By Art. 57 (4): 
"The Prime Minister … may, exceptionally, make provision for the recruitment of staff for a specified period to meet unforeseen needs."
This is the source of powers of the Prime Minster to recruit staff for the Public Service. Under Art. 57 (4) of the Constitution the expression "may" is used. The Prime Minister has a constitutional discretionary power to recruit staff for the Public Service. Of course, the discretionary power is to be used exceptionally for a specified period to meet unforeseen needs. The needs are not defined. They have to be appreciated at the discretion of the Prime Minister. 
In my view in the exercise of his powers under Art 57 (4), the Prime Minister has no obligation or no legal requirement to consult anybody. Why? Because, 
"In urgent cases, the Public Service Commission may, after consulting the Ministers responsible for Finance and public administration, make such a decision instead of the Prime Minister." 
Art. 57 (4) makes it clear to that effect. 
Therefore, the Prime Minister has the power under the Constitution to recruit staff for the Public Service in exceptional circumstances to meet unforeseen needs. 
The expression "Public Service" is not define by the Constitution. It is defined by the Public Service Act [CAP. 129] under Section 1, as follows: 
"S. 1 (1) in this Act:- 
"Public Service" means the service of the Republic in any capacity other than as a Judge, or member of the armed forces, police or teaching services;"
In my view this definition covers also the Plaintiffs/political appointees but without the benefits of tenure as provided for in Article 57 (5) of the Constitution. 
If I am wrong in that view, then I think the Public Service Act [CAP. 129] provides the answer to the question of power of the Prime Minister to appoint the Plaintiffs as political appointees. 
By Section 18 of the Act: 
"S. 18 (1) The Prime Minister may by Order make regulations for the carrying out of the provisions of this Act and for the efficient management, control and working of the Public Service. (Emphasis added).
(2) Different regulations may be made in respect of different classes of officers. 
(3) Without prejudice to the generality of subsections (1) and (2) the Prime Minister may in particular make regulations with respect to any of the following matters – (emphasis added)
(a)… 
(d) generally for prescribing the terms and conditions of service and employment of officers; 
(e) …
(f) generally for prescribing the terms and conditions which may be imposed in or in respect of any contracts or arrangements relating to the Public Service entered into between the government on the one hand and its officers or any other person on the other hand; (my emphasis)
(g) generally for prescribing fees, allowances and expenses that may be paid to any person for carrying out any functions or duties prescribed or provided for by this Act; (my emphasis). 
…"
"Officer" under Section 1 of the Public Service Act (CAP. 129) means: 
"a person holding or acting in any office in the Public Service." 
There is no doubt, the Prime Minister of this Republic is empowered by Section 18 (3) (f), (g) of the Public Service Act [CAP. 129] to prescribe for the terms and conditions which may be imposed in or in respect of any contracts or arrangements relating to the Public Service entered into between the government on the one hand and any other person on the other hand. Further, the Prime Minister is also empowered to prescribe fees, allowances and expenses that may be paid to any person for carrying out any functions or duties prescribed or provided for under the Public Service Act. 
I am not aware about regulations made under Section 18 (3) (f) and (g) of the Public Service Act [CAP. 129] by the Prime Minister to that very effect. It is to be noted that while the Prime Minister, the then Hon. Serge Rialuth Vohor, had power under the Public Service Act to make Orders/Regulations, having the force of an Act, with respect to the terms and conditions which may be imposed in or in respect of any contracts or arrangements relating to the Public Service entered into between the government on the one hand and the Plaintiffs/Political appointees on the other hand, the then Prime Minister had not exercised that power. 
In this case, I am of opinion that since the Prime Minister, acting on behalf of the Government, under the Public Service Act [CAP. 129] did not regulate the terms and conditions of employment of its servants, there could have been no doubt about the capacity of the Prime Minister, acting on behalf of the Government to employ under the contract. This is exactly what He did by engaging the services of the Plaintiffs other than Ministers of the Government at that relevant period. 
There is judicial support for this view in the case of Australian National University –v- Burns (1982) 43 A. L. R. 25. In that case, a Full Court of the Federal Court of Australia accepted that, under the University’s Constituant Act (Australia National University Act 1946 (Cth)), the Council of the University had an express power to appoint professors and also an implied power to remove them on any ground. While the Council had power under the Act to make statutes, having the force of an Act, with respect to the manner of appointing and dismissing professors and others, it had not exercised that power. The Court accepted that there was a valid contract of employment between the University and the professor and that, in dismissing the professor, the University was relying on the terms of the contracts rather than on its statutory power to dismiss. 
In this case, I accept that there were valid contracts of employment between the Fifth Defendant, the Government of the Republic and the Plaintiffs/Political appointees other than Ministers of the Government. I also accept that in terminating the Plaintiffs, the Prime Minister, acting on behalf of the Government, was relying on the terms of the contract rather than on his statutory power to dismiss. 
I am aware about some English decisions the basis of which was that it is essential for the public good that employment by the Crown should be capable of being terminated at the pleasure of the Crown. So that implied term to that effect in the contracts of employment cannot be varied: see Dunn –v- the Queen (1896) Q.B.116; Terrell -v- Secretary of State for the Colonies (1953) 2 Q.B. 482; Riordon -v- War Office (1959) 1 W.L.R. 1046; (1959) 3 ALL ER 552.
I share the view that the correct rule is that generally the employment of a government servant, which is the case of the Plaintiffs/Political appointees in this case, may be terminated at any time at the pleasure of the Government of the Republic State. This is an implied term of the ordinary contract of Government employment. However, I may pause to ask myself this question:
If the Government as an employer should be able to dismiss its employees when it wishes to do so, why should that prevent the Government paying damages when it acts in breach of its solemn agreement ?
I am aware about the Public Policy behind the English decisions as illustrated in Dunn -v- the Queen (referred to above) which requires that the Crown should be able to dismiss its employees when it wishes to do so. However, this public policy would not prevent the Government from terminating an employment relationship. If no grounds were available to justify the termination of the agreement, the only difference would be that the Government would pay damages just as other employers pay damages when they cannot justify the termination of employment. Further, I must say that the public policy behind the English decisions, causes great injustice. In effect, Employees such as the political appointees/Plaintiffs in this case enter into Government Employment on the understanding that they are employed for a fixed period and then, without any fault on their part, they are dismissed, often without compensation.
In this case, the Plaintiffs are appointed to offices/posts/positions to be held at will and may be dismissed from office/post/position at any time, but if the Government or other appointing body has elected to agree that the appointees (Plaintiffs) should be compensated if the appointment is terminated within a certain time, the agreement should, in my view, be regarded as binding. 
The Plaintiffs are entitled to damages to be paid by the Government of the Republic of Vanuatu, the Fifth Defendant.
The case of Suttling -v- Director-General of Education (1985) 3 NSWLR 247, is a persuasive authority in support of this view.
In this case, Suttling had been appointed as a Senior Education Officer. The relevant legislation made it clear the position was one in the service of the Crown. The majority reviewed the case law on the question of whether the Common law right of the Crown to dismiss its employees at pleasure can be restricted by contract, for example, a contract to employ for a fixed term. They concluded that there was no judicial authority which bound them to conclude that such a contract could not be binding in the sense that breach of it would attract a liability to pay damages. In that case, McHugh JA observed: 
"In an age where a large section of the workforce is employed by the Government, there is no reason in principle or justice why the contractual rights of Crown (who are in reality government) employees should differ from those of private sector employers", and I so agree with His Honour Judge on that point. The next question to be considered is: 
III. What is the applicable law in respect to damages claim under the contract: the Employment Act (Cap 160) or the terms and conditions as stipulated in the contract of employment?
The Plaintiffs submitted that their contracts with the Defendants are governed by the provision of the employment Act (Cap 160) "the Act". Section 6 of the Employment Act is relevant to the question of the validity of the Plaintiffs contracts. Section 6 provides:
"Nothing in this Act shall affect the operation of any law, custom award or agreement which ensures more favorable conditions in any respect to the employees concerned than those provided for in this Act."
The Plaintiffs submit that the terms and conditions of their contracts with the first and fifth Defendants were more favorable to the Plaintiffs than the terms and conditions contained in the Act. The Plaintiffs submit that the effect of section 6 of the Act, is that their contract with the first and fifth Defendants takes priority or overrides the Act. Accordingly it follows that whatever benefits or entitlements the Plaintiffs’ contracts provided for, then the plaintiffs are entitled to the same. The Plaintiffs submit they are entitled to all the benefits and entitlements as claimed.
It is submitted for the Defendants that section 6 of the employment Act (Cap 160) will come into play only if the agreement entered into between the First Defendant, acting on behalf of the Fifth Defendant with the Plaintiffs are lawful. If not, then the provision of section 6 cannot come to play.
In this case the Plaintiffs were employees of the Government, that is, they were at the relevant time, in the service of the Government of the Republic but without the benefits of tenure as provided for in article 57 (5) of the Constitution. It would appear they would in the normal course be entitled to the benefits provided for pursuant to the provisions of the Employment Act.
The Contracts of the Plaintiffs incorporated the provisions of the Official Salaries Act (CAP. 168) as a term of their contracts. The provisions of the Official Salaries Act constitute an express term of their contract of employment. The First Defendant, acting on behalf of the Fifth Defendant, take care in reminding the Plaintiffs/political appointees about their entitlements under the O. S. Act when issuing the termination letter of employment to each of the Plaintiffs/Appointees. By that way, the Government has taken reasonable steps to notify the Plaintiffs about their entitlement under the Official Salaries Act (Cap 168). This reminder shows that there are contractual consequences. The Government, through the First Defendant, is making the provision of the payment of 3 months salary in lieu of notice and the entitlements under Official Salaries Act (Cap 168) important contractual terms of the contract of employment, the breach of which will have certain consequences.
The benefits that a person appointed under the provisions of the Official Salaries Act receives are substantially greater than those received by all the public servants.
The employment Act is an Act of general application, that is it is applied generally to all contract, of employment whether they are in the public service or in the private sector. The Official Salaries Act applies to specified people and make provisions in respect of some of their terms of employment.
It is to be observed that this could lead to a situation where a possible conflict might raised between the Act of general application i.e., the Employment Act [CAP. 160] and the Act of specific application (the Official Salaries Act (CAP. 168).
In this instant situation, I share the view that the conflict and/or inconsistency may be solved by applying the maximum "later laws abrogate prior contrary law". [See the Judgment of Downing J, in the Application Of Grace Mera Molisa, in Civil case no 155 of 1993, Vol. 2 Van. L.R 727 and other cases cited therein…]
In my view, the Plaintiffs held offices or occupied positions or performed functions and/or duties that were subject to the provisions of the Official Salaries Act, then the Official Salaries Act covered the field and the Employment Act had no bearing upon the payments made to the Plaintiffs in respect of payments of amounts that were covered by the Official Salaries Act.
In this case, the contracts of employment of the Plaintiffs with the Government of Vanuatu, are lawful contracts and are, therefore, enforceable.
Section 6 of the Employment Act is to be applied to the case of the Plaintiffs/political appointees under consideration in this case other than Ministers of the Government. The Plaintiffs are therefore entitled to damages claimed arising from the termination of their contracts. The last question to be considered is: 
IV.	The assessment of damages in respect to each individual Plaintiffs concerned. 
I feel that full justice in this case, requires further and proper submissions to be made by both counsels as to the principle to be applied in relation to how damages should be assessed and evidence in support thereof.
For the purposes of this judgment, I make the following orders:
1.	That the claim for damages of the First Six Plaintiffs, namely, Hon. Donald Kalpokas, MP, Hon. Sela Molisa, MP, Hon, Joe Natuman, MP, Hon. John Morrison Willie, MP, Hon, Shem Naukaut MP, Hon, John Dickenson, MP, for breach of their contract of employment with the Government of Vanuatu, fail. I would declare that there is no valid contracts between the First Six Plaintiffs as Ministers of the Government at the relevant time and the Fifth Defendant, the Government of Vanuatu. I would also make a declaration that the First Six Plaintiffs are entitled to be paid: 
(a) Outstanding Salaries of 4 days; 
(b) Gratuity to be calculated on the basis of a pro-rata for uncompleted year; 
(c) The First Six Plaintiffs are not entitled to:
o	Outstanding annual Leave. This claim is made on the basis of breach of the contract, since the contract of the First Six Plaintiffs with the Fifth Defendant is void, this claim in refused. 
o	The claims for airfare to home Island Housing allowance, child allowance and cost of living are refused to the First Six Plaintiffs, on the basis that there is no evidence in support thereof. 
2. That the Plaintiffs/Political appointees other than Ministers of the government of Vanuatu are entitled to damages, claimed under the breach of their contracts by the Fifth Defendant, the Government of Vanuatu. I would make a declaration that on or about 30 September 1996 or 25 October 1996, the Plaintiffs were duly and validly appointed to the respective positions each of them occupied for a period to be ended on 30 November 1999. They have a valid contract which had been terminated on 20 May 1997 by the First Defendant on behalf of the Government of the Republic, the Fifth Defendant. I would make a declaration that the Plaintiffs are entitled to damages arising out of the breach of their contract with the Government of Vanuatu.
3. The damages to be paid have to be assessed by the court. Since there is more than 80 Plaintiffs concerned, justice requires that proper submissions be made with evidence in support (if any) in respect to individual Plaintiffs.
4. Counsels of both parties are required to attend a conference directions hearing to be held for that purpose on Friday 18 September 1998 at 8.30 am.
Dated at Port Vila, this 14th day of September 1998
Vincent LUNABEK, J
Acting Chief Justice