Gautherie v Air Vanuatu (Operations) Ltd [2005] VUSC 133; CC 164 2004 (28 November 2005)

IN THE SUPREME COURT
OF THE REPUBLIC OF VANUATU
(Civil Jurisdiction)

Civil Case No. 64 of 2004

BETWEEN:

JEAN FRANCOIS GAUTHERIE
Claimant

AND:

AIR VANUATU (OPERATIONS) LIMITED
Defendant

Coram: Justice P. I. Treston

Mr. Morrison for Claimant
Mr. Malcolm for Defendant

Date of Hearing: 20 October 2005
Date of Decision: 28 November 2005

RESERVED JUDGMENT

CLAIM AND DEFENCE

In a claim filed on 23 August 2004, the Claimant sought judgment against the Defendant for breach of a contract of employment where there remained a balance of the original contractual term of five years from 17 August 2004 to 3 February 2008 together with travel benefits and VNPF contributions and repatriation entitlements.

The Claimant alleged that he had suffered ill treatment between 30 April and 17 May 2004 and that there had been a serious breach of the terms and conditions of his employment contract.

The Defendant accepted that it had entered into an employment contract with the Claimant but contended that both the Defendant and the Claimant had the right to give 3 months notice of termination of the contract. The Defendant denied that it had ill treated the Claimant thus resulting in a constructive dismissal and contended that the Claimant had wrongfully resigned in that he gave no notice. It denied it had any liability to the claimant.

FACTS

Under an employment contract dated 3 February 2003 the Defendant employed the Claimant as a project manager commencing on that date for a period of 3 years + 2 years that is until 31 January 2008. Remuneration was to be VT651,000 per month which included overseas allowance and severance allowance. There were other benefits such as medical insurance etc included in the Claimant's entitlement together with repatriation to France. An annexure to the contract provided that the location of the position was to be Port Vila and Sydney and the Claimant's "position description" set out the areas on which he was to focus. His prime role was to assist the CEO to establish long term strategic and development planning for the company. The Claimant understood that there was a desire to improve the Defendant's structure and efficiency and expand its market base in Australia.

Paragraph 13 of the contract provided as follows:-

"The Employee or Employer may terminate this Agreement on giving the Employer 3 months in writing".

The Claimant deposed in his sworn statement that he understood that his family would continued to be located in Sydney which was to be his principal base and that Air Vanuatu had an office there which could provide infrastructure if he required it but that he would travel regularly between Port Vila and Sydney and that he agreed with the then CEO, Mr. Jean Paul Virelala, that he could most appropriately work principally from his home. That was because of the confidentiality of his work relating to cost and expenditure analysis.

The complainant said that he commenced his employment and in general terms things progress smoothly and he was travelling semi-regularly to Port Vila but that when he came to Port Vila, the office there did not provide an appropriate work place for his needs as his work required confidentiality.

Towards the end of the first year, Mr. Virelala and the Claimant met on 9 December 2003, and it was agreed, inter-alia, that "the principal operational base for Jean-Francois is Sydney". (see exhibit JG4).

It was with some surprise, the Claimant deposed, that on or about 20 February 2004 he received a memorandum from the Defendant purporting to give him 3 months notice of termination of his employment contract (see exhibit JG5). After discussion with Mr. Virelala and the then chairperson of the Defendant's Board, Dominique Dinh, it was revealed, he said, that the Claimant's professional work was not the issue but that the notice was simply the result of a cost saving policy sought to be implemented by the Defendant.

It seems that on 28 April 2004, the Claimant received a telephone call from Mr. Virelala at his Sydney home requesting that he urgently attend Port Vila on 1 May 2004 for a meeting with himself and the Board Chairman.

Although it was not part of his sworn statement, the Claimant accepted that his lawyer wrote to the Defendant threatening to sue if the notice of termination was not withdrawn. As a result, on 30 April 2004 (2005 in the sworn statement) the Claimant received a facsimile letter from Mr. Virelala advising him that the notice of termination of his contract was withdrawn (see exhibit JG7). The Claimant received this facsimile before he headed to the airport to fly to Port Vila for the meeting.

At Port Vila on 1 May 2004, the Claimant endeavoured to contact Mr. Virelala by telephone concerning the meeting but he could not do so and was only able to do so about lunch time on 2 May 2004. The Claimant said that Mr. Virelala was abrupt and unwelcoming. Mr. Virelala said that the meeting would be scheduled for the next day but on that day, 3 May 2004, the meeting did not take place and Mr. Virelala, upon his arrival at the office, ignored the Claimant.

A subsequent exchange of communication revealed that the Defendant was concerned with the Claimant's absences from his office in Sydney and that his job would now have to be based in Port Vila. Upon enquiring about the duties he was to perform, he was told by Mr. Virelala that he had an office and a computer and he could work. The Claimant said that he attended the Port Vila office on 4 and 5 May 2004 and was given no work and that Mr. Virelala treated him as if he did not exist.

On Monday 10 May 2005, just prior to the close of office hours, Mr. Virelala advised the Claimant that next day he must make a full presentation to the Defendant's Board of the work which he had performed. The Claimant advised that the time was too short but Mr. Virelala said he must go ahead with the presentation. On 11 May 2004 the Claimant made a rather unfinished power point presentation in English to the Board. He said that he was asked no meaningful questions by the Board and the next communication from Mr. Virelala was a memorandum dated 12 May 2004 (JG11) indicating that his report had been poor and his absences from the premises in Sydney had been significant and that he would now be based in Port Vila rather than Sydney by way of a disciplinary action.

The Claimant then sought legal advice and terminated his contract of employment forthwith through his solicitor's letter of 17 May 2004 addressed to the CEO, Mr. Virelala (see exhibit JG15).

The Claimant deposed that he did not receive payment for termination, short notice payment, severance and entitlements under his contract including repatriation.

EVIDENCE

As I have indicated the Claimant gave evidence through his sworn statement of 6 June 2005 and was cross-examined at the hearing.

The Defendant elected to file no sworn statements.

SUBMISSIONS

The Claimant submitted that the Defendant had breached his contract of employment in terms of section 53 (1) of the Employment Act [CAP. 160] ("the Act") which provides as follows: -

"BREACH OF CONTRACT BY EMPLOYER

53. (1) If an employer ill treats an employee or commits some other serious breach of the terms and conditions of the contract of employment, the employee may terminate the contract forthwith and shall be entitled to his full remuneration for the appropriate period of notice in accordance with section 49 without prejudice to any claim he may have for damages for breach of contract.

(2) An employee shall be deemed to have waived his right under subsection (1) if he does not claim it within a reasonable time after he has become aware of his being entitled thereto."

It was submitted that the ill treatment was such as to destroy the relationship of mutual trust and confidence between the Claimant and the Defendant and included, inter-alia, the following:

(i) Demanded attendance at a "phantom" meeting.
(ii) The employer making itself unavailable to resolve arrangements for the meeting.
(iii) Being unresponsive and impolite when contact was made in respect to the purported meeting.
(iv) Failing to attend or advise of non-attendance at the further confirmed meeting time.
(v) Failing to meaningfully communicate with the employee when encountering him after the confirmed meeting time.
(vi) Making unfounded criticisms of the employee which remained unsubstantiated.
(vii) Failing to provide meaningful work tasks.
(viii) Continuing failure to communicate and being hostile.
(ix) Provided unreasonable notice in respect to a presentation on Tuesday 11 May 2004.
(x) Failure to justify treatment by the employer other than to indicate internal pressure.

It was further submitted that the Defendant had committed another serious breach of the terms and conditions of the contract of employment in unilaterally fixing the Claimant's place of work as Port Vila.

As far as quantum was concerned, the Claimant submitted that he should receive recompense for the balance outstanding on his contract. At the hearing, the Claimant conceded that he did not press for loss of travel benefits which had not been proved in any event and effectively abandoned his claim for repatriation expenses to France bearing in mind that the Claimant had been paid for his fare from Port Vila back to Australia on termination, and that his family was settled in Australia, and bearing in mind the provisions of section 58 in the Employment Act which provided that the right to repatriation lapsed if it was not used by a Claimant within 6 months from the date at which he become entitled to it. The Claimant also accepted that he had not expended costs for himself and his family to France because they were settled in Australia and the claim for that benefit was effectively abandoned.

The Claimant produced by consent details of the salary that he had earned since leaving Air Vanuatu in the sum of VT7,008,298. That was by way of mitigation of loss.

As part of the submissions, the Claimant provided a breakdown of the total amount claimed for the unexpired period of the contract including salary and VNPF employer contribution in the sum of VT30,017,160.

The defence submitted that the substantial issue of the case was whether the Claimant had been forced to terminate his employment or whether did he do so voluntarily (in the words of the submission "Was he pushed or did he jump").

The Defendant submitted that the facts were that the Claimant was not ill treated when he said that he was ignored. The Claimant had agreed that he was not insulted, forced to take on menial tasks or otherwise ill treated. He was provided with an office and/or a desk and a computer and was paid under the contract without having to ask for such payment and he did not suffer other indignities. That was in accordance with section 12 of the Act which provides as follows: -

"DUTY OF EMPLOYER TO PROVIDE WORK

12. Except in the case of, and during, an emergency which prevents him from doing so, every employer shall provide the employee with work in accordance with the contract during the period for which the contract remains in force and on such number of working days as is expressly or impliedly provided for in that contract. If the employer fails to provide work as aforesaid he shall pay to the employee, in respect of every day on which he shall so fail, remuneration at the same rate as if the employee had done the day's work."
    

The Defendant submitted that the Claimant could not establish constructive dismissal on the basis of the evidence and that no serious breach of the terms and conditions of the contract of employment had occurred because the contract always provided that the location of the position was "Port Vila and Sydney".

The Defendant submitted that as the Claimant had left by terminating the contract forthwith and had not served out his term of notice he was entitled to no remuneration for the balance of the contractual term.

BURDEN OF PROOF

I remind myself that in a civil case such as this the burden of proof is on the Claimant who must establish his allegations and his claim on the balance of probabilities which is more likely than not.

FINDINGS

Much discussion was centred on the meaning of clause 13 of the employment contract which I have set out in full above. On any clear reading of that clause it is my view that the employee and the employer both had the right to terminate the employment contract within the contract period of 5 years on giving the other party 3 months notice in writing. I accept that although the clause as worded in the contract is deficient in my view that was the clear intention of the parties.

As a result it seems to me that the Defendant may have been somewhat hasty in withdrawing its notice of termination of 20 February 2004 (exhibit JG5). In any event that notice of termination and its subsequent withdrawal by the notice of cancellation of 30 April 2004 (exhibit JG7) is somewhat academic in the circumstances, save insofar as I do not consider that the notice of termination could be said to have destroyed the relationship of mutual trust and confidence between the parties. Such a notice was always a contractual right of the Defendant to give.

The Claimant contended that he was ill treated between 30 April 2004 and 17 May 2004 to the extent that he could take advantage of the termination provisions of section 53 (1) of the Act (above). I do not agree with that contention. The period was short, only 10 working days at the most (although there is no detail about what occurred on 6,7,12,13 or 14 May or even whether he attended the office) and the Claimant's concerns as set out in the pleadings and in the submissions were put into context in cross-examination when he conceded that no one laughed or sneered at him in the Port Vila office, he was simply cut off. He performed his tasks in doing a report about an aircraft and then in preparing a presentation to the board but was then ordered to stay in his office and was paid, he said, for doing nothing. He said he had work to complete in Sydney but his technical data was over there. He conceded under cross-examination that his complaint was that he was ignored and given no fresh work to do and he denied that he was bored but said that he was used to doing work and between 14 and 17 May 2004 he felt ignored and abandoned. I note that 15 and 16 May 2004 was a weekend. He said that his complaint was that he was being paid for doing nothing, as he was used to doing work. In my view that is quite different from being ill treated. The Claimant said in cross-examination that he did not consider giving 3 months notice.

In addition, I do not find that the requirement that the Claimant thereafter work at Port Vila was a serious breach of the terms and conditions of the contract of employment. After all the contract provided that the places for the position were Port Vila and Sydney and it is my view that the employer was entitled to stipulate in which of those two places the Claimant should operate.

Under the general law and in this contract in particular the Claimant as an employee had the right to resign at any time providing that he gave the appropriate 3 months notice. In this instance, the Claimant terminated the contract of employment forthwith. He purported to do so under section 53 (1) of the Act but I have found that was not justified and I am of the view that the Defendant does not have a legal responsibility to pay the Claimant anything after his notice of forthwith termination of the contract on 17 May 2004. It is common ground that the Claimant was paid up to that date.

I do not consider that the Defendant followed any cause of action deliberately aimed at coercing or forcing the employee to resign. The period complained of was quite short and there is nothing to say that the situation would not have improved and settled down if the Claimant had allowed more time to lapse. I say that even bearing in mind the exchange of correspondence between the Claimant and the CEO of the Defendant exhibited to the sworn statement.

The plain fact of the matter is that I do not consider that this is a case of constructive dismissal and the Claimant failed to give the appropriate period of notice under clause 13 of the employment contract. His right to do that was acknowledged in paragraph 2 of his solicitor's letter of 17 May 2004 (Exhibit JG15). At one stage, in cross-examination the Claimant said that on the signing of the contract of employment on 3 February 2003, he understood clause 13 to mean that the agreement could be terminated at the conclusion of the 5 years period. I am of the view that that was an erroneous appreciation of the facts and in any event the Claimant through his lawyer accepted that there was a 3 month period of notice under clause 13 available to him.

In my view the Claimant terminated his employment forthwith in frustration about being given an earlier notice of termination and in being called to Port Vila and ordered to work there and in being given little specific work to do. However, the Defendant was content to continue to pay the Claimant and did not breach any of the conditions of the Act.

CONCLUSION

For the above reasons, I find that the Claimant has not established his claim on the balance of probabilities in that he was not ill treated by the Defendant and there was no other serious breach of the terms and conditions of the contract of employment by the Defendant. I am of the view that the claim for constructive dismissal must be dismissed.

JUDGMENT

I give judgment for the Defendant against the Claimant and award costs to the Defendant against the Claimant on a standard basis as agreed or as determined by the Court. I note that security for costs of VT500,000 was paid into Court by the Claimant.

Dated AT PORT VILA, this 28^th day of November 2005

BY THE COURT

P. I. TRESTON

Judge.