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Supreme Court of Vanuatu |
IN THE SUPREME COURT OF
THE REPUBLIC OF VANUATU
(Civil Jurisdiction)
Civil Case No. 07 of 2007
BETWEEN:
JIMMY NANUMAN NIPO
Claimant
AND:
VANUATU FOOTBALL FEDERATION (VFF)
Defendant
Coram: Justice C.N. Tuohy
Counsel: Mr. Yawha for Claimant
Mr. Daniel for Defendant
Date of Hearing: 10th September 2007
Date of Decision: 18th September 2007
RESERVED JUDGMENT OF C.N. TUOHY J
"SPECIFIC DUTIES
"If the Executive desires to terminate me and other staffs in this office, do so BUT ENOUGH OF THIS PSYCHOLOGICAL TORTURE! Stop the hypocrisy, if we are not performing, make it known to us and do what you think is best for this organization. Enough of hearing verbal reports directly from you and VFF Executive about the intentions which are allegedly being instigated and pressured by (OFC) just because of some personal grudge that the officials of OFC have with the senior staff of VFF...".
8. At the conclusion of the letter, he requested confirmation in writing from the Executive that terminations had been discussed with the OFC President, whose idea it was, what the reasons were for the intended terminations, a pledge that the contracts and benefit would be paid out if terminations took place and an official statement on what the VFF was doing about the situation. Various consequences were threatened if no satisfactory response was received.
9. No response has been exhibited but there was apparently one, dated 20 June 2006, because it is referred to in the Claimant’s second letter dated 26 June 2006. The second letter stated that the Claimant found the response not satisfactory. It stated:
"In these regards, I still maintained that the VFF Executive has allowed and entertained the current unstable working environment. Of course, we know that the Executive has made no decisions. We have received verbal and written confirmations from some of the Executive members about this BUT THE FACT IS YOU HAVE ALLOWED THE SITUATION BY PERSONALLY ADVISING US ON SEVERAL OCCASIONS AND COMPROMISING US TO ACCEPT HALF WAY DEALS REGARDING OUR CONTRACTS. Allegedly, you have directly instigated instability by continuously telling the secretariat about these intentions and allegedly conspiring with lapson and OFC on this matters.
Therefore, I wish to conclude that your response has confirmed "meetings" with other entities thus confirming to me that the VFF Executive has indeed allowed other entities to dictate the affairs of VFF and subsequently allowed us to suffer the consequences. I am hereby duly holding you as Acting President and the Treasurer responsible for the current stalemate in the secretariat.
In this regard, I am therefore humbly calling on you and the Treasurer, M. Lapson both as friends and also as fellow colleagues to resign forthwith because this will be good for this office and for football.
In the meantime, be advised that this situation has caused me to declare that I will not attend the coming Congress. I feel I just cannot conduct the elections in an environment with these matters hanging. According to article 10 of the Standing Orders of VFF the General Secretariat is responsible for conducting the elections. Therefore, it would be best that the Congress be suspended until this situation is resolved.
As far as I am concerned, I no longer have the trust and confidence to work with you and lapson and if you do not humble yourselves and resign. I will be forced to move out from this office and claim for breach of contract".
10. On 28 June 2006, he wrote a further letter to the "Acting President which stated:
"Re: UNCOMFORTABLE & UNHEALTHY WORKING ENVIRONMENT IN THE OFFICE OF THE SECRETARIAT OF VANUATU FOOTBALL FEDERATION
Further to my several letters concerning the above and the recent one of 26th June 2006, as from today I am taking that the acts of the VFF Executive amounts to serious misconduct and therefore have pushed me out of this office. I am taking that my contract has therefore been breached. I am therefore advising that I will be officially out of office at 4:30 pm today".
The Claimant did finish his employment on 28 June, he has not been paid what he demanded and the present proceeding has resulted.
Discussion
11. The primary issue in this case is whether the Claimant was constructively dismissed by the VFF or whether he voluntarily terminated his employment.
12. The concept of constructive dismissal has long been established in employment law. At common law, it takes place when an employer repudiates a contract of employment and the employee responds by cancelling the contract. In substance, the employer has dismissed the employee although technically there has been a resignation.
"In our view it is clearly established that there is implied in a contract of employment a term that the employers will not, without reasonable and proper cause, conduct themselves in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust between employer and employee: Courtaulds Northern Textiles Ltd v Andrew [1979] IRLR 84. To constitute a breach of this implied term it is not necessary to show that the employer intended any repudiation of the contract: the tribunal's function is to look at the employer's conduct as a whole and determine whether it is such that its effect, judged reasonably and sensibly, is such that the employee cannot be expected to put up with it: see British Aircraft Corporation Ltd v Austin [1978] IRLR 322 and Post Office v Roberts [1980] IRLR 347. The conduct of the parties has to be looked at as a whole and its cumulative impact assessed: Post Office v Roberts.
We regard this implied term as one of great importance in good industrial relations.
Experience in this appeal tribunal has shown that one of the consequences of the decision in the Western Excavating case has been that employers who wish to get rid of an employee or alter the terms of his employment without becoming liable either to pay compensation for unfair dismissal or a redundancy payment have had to resort to methods of 'squeezing out' an employee. Stopping short of any major breach of the contract, such an employer attempts to make the employee's life so uncomfortable that he resigns or accepts the revised terms. Such an employer, having behaved in a totally unreasonable manner, then claims that he has not repudiated the contract and therefore that the employee has no statutory right to claim either a redundancy payment or compensation for unfair dismissal.
It is for this reason that we regard the implied term we have referred to as being of such importance. In our view, an employer who persistently attempts to vary an employee's conditions of service (whether contractual or not) with a view to getting rid of the employee or varying the employee's terms of service does act in a manner calculated or likely to destroy the relationship of confidence and trust between employer and employee. Such an employer has therefore breached the implied term. Any breach of that implied term is a fundamental breach amounting to a repudiation since it necessarily goes to the root of the contract: see Courtaulds Northern Textiles Ltd v Andrew [1979] IRLR 84."
14. In Vanuatu, Parliament has made specific provision for constructive dismissal in s. 53 of the Employment Act [Cap. 160]:
"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 s. 49 without prejudice to any claim he may have for damages for breach of contract".
15. This may in some respects establish a lesser threshold of employer misconduct than the common law, but an employee in Vanuatu
appears able to rely on either or both of the common law and s. 53. This is because of s. 6 of the Employment Act which provides:
"Nothing in the Act shall affect the operation of any law, custom, award or agreement which ensures more favourable conditions in
any respect to the employees concerned than those provided for in this Act".
16. It is therefore necessary to consider whether in this case the Claimant has shown that the VFF has conducted itself in a manner calculated or likely to destroy or seriously damage the relationship of confidence or trust between employer and employee, or in terms of s.53 has ill treated the Claimant or committed some other serious breach of the terms and conditions of the contract. In a case such as this, where the allegation is one of "squeezing him out" by making his life so uncomfortable that he resigns or accepts revised terms, the different formulations probably amount to the same thing.
17. In judging this the Court has only the opposing sworn statements upon which to rely, neither party having asked to cross-examine the other’s deponents. In fact neither the Claimant nor Mr. Tronquet were personally present at the hearing.
18. In his sworn statement and the contemporary correspondence annexed to it, the Claimant clearly asserted that:
19. In his sworn statement, Mr. Tronquet acknowledges that the VFF was eligible to receive and was dependent on substantial financial assistance from FIFA; that FIFA had made negative reports about the financial management of the VFF (which were exhibited); that VFF’s financial situation was critical; that there were discussions on what to do to improve its financial position to comply with FIFA and OFC standards and requirements; that staff non-performance and management inefficiency in financial reporting was a serious concern, including poor management and incompetency to deliver by the Claimant; that VFF was being pressured by OFC to do something about its financial situation and to change the management; that he "verbally reminded" the Claimant at the time of his duties and responsibilities, in particular the failure for a number of years to produce audited financial reports.
20. He insisted that it was not the intention of the VFF to remove the Claimant "unless proven incompetent or of serious gross misconduct" and stated that the VFF never terminated the Claimant. Rather, the Claimant, instead of responding with solutions to the problems, avoided responsibility by voluntarily resigning without giving proper notice.
21. Significantly however, he did not deny the Claimant’s allegations that he (Mr. Tronquet) and others had been conveying to the Claimant that there were intended terminations of senior staff (including him) at the request or direction of the OFC, and that he had been trying to have staff (including the Claimant) accept termination on reduced terms. He acknowledges pressuring the Claimant but in the context of meeting datelines and demanding efficiency and high levels of performance. His sworn statement implies that the Claimant’s resignation was a response to at type of pressure. However nowhere in the evidence is there any written direction, requirement or warning to the Claimant at the relevant time relating to meeting datelines or otherwise carrying out any specific task or duty of his employment.
22. On the evidence before the Court, I am satisfied that the VFF did act in the way which the Employment Appeal Tribunal spoke of in Wood’s case (supra) in order to "squeeze out" the Claimant rather than simply terminating him and facing the financial consequences (which may not have been as great as it thought since there was a proviso in the employment contract giving the Employer the right to terminate at any time upon giving reasonable notice in writing).
23. I am satisfied that, deliberately or not, its actions created a working environment for the Claimant which was intolerable. It must be remembered that he had been in his employment for 5 years up to this time, and must have been subjected during that long period to the usual pressures of such a position but had not previously quit. So there is no basis for thinking that he is a "shrinking violet" who would throw in the towel at the first sign of normal work pressures. I am satisfied that he was constructively dismissed in the sense discussed above and no basis has been shown to legally justify that dismissal.
Damages
24. The Claimant is entitled under s. 53 to the appropriate period of notice in accordance with s. 49. However, this was not a contract for an unspecified period of time, it was for 3 years but with an option to the VFF of terminating upon the giving of reasonable notice. I consider that a reasonable period of notice was 3 months, which is the length provided in s. 49(3)(a) for employees who had been in continuous employment with the same employer for not less than 3 years as the Claimant had. The sum of VT 750,000 is payable under this head.
25. He is also entitled to a severance allowance under Part XI of the Employment Act. The Claimant had been in continuous employment for a period of 4 years 11 months and 11 days on the date of his constructive dismissal. Therefore the severance pay under s. 56 (2) is calculated as follows:
| 4 years at VT 125,000 | = | VT 500,000 |
| 11 months at 125,000 | = | VT114,583 |
| | | VT 614,583 |
26. Section 56 (4) states that the Court shall, where it finds that the termination of the employment of an employee was unjustified, order that he be paid a sum of up to 6 times the amount of severance allowance specified in subsection (2). The use of the word "shall" makes it clear that an order under the subsection is mandatory. However, it is not mandatory that 6 times the subs (2) amount is ordered. The Act says "up to 6 times" which does no more than prescribe an upper limit.
27. No guidance is given in the section itself. There seems however to be a punitive element involved. Here, while the employer’s conduct was unjustified, it is not in the worst category. It is also relevant that the Claimant could have been terminated at any time on reasonable notice, so there is a degree of windfall for him. I make an order under s. 56 (4) for payment of an additional sum of VT 250,000 which amounts to an allowance for an extra 2 years service. The Claimant’s salary of VT 250,000 per month on which these sums are based was inclusive of VNPF contribution so no further amount is due in respect of that. There will however be an order under s. 56 (6) that the VFF pay 12% per annum interest on the severance allowance fixed above from 28 June 2006 to the date of payment.
28. Finally, there is a claim for damages for lost salary from date of termination of the contract, 28 June 2006 to date of expiry of the contract, 17 July 2007. This works out at VT 3,158,333. In principle, there is no reason why this should not be awarded. If the Claimant had not been constructively dismissed, he would have received his salary. This is no evidence that he had any substitute employment during the period, so he has not recovered any of the lost salary in that way.
Summary
30. The amount due to the Claimant for which judgment is entered is:
| a) | Payment in lieu of notice | | 750,000 | |
| b) | Severance Allowance | | | |
| | Under s (56) (2) | 614,583 | | |
| | Under s (56) (4) | 250,000 | | |
| | | | 864,583 | |
| c) | Interest at 12% p.a on Severance allowance from 18/06/06 to date of payment | | | |
| d) | Damages | 3,158,133 | | |
| | | 750,000 | | |
| | | | 2,408,333 | |
| | | | | 4,022,916 VT |
Dated at Port Vila, this 10thday of September, 2007
BY THE COURT
C.N. TUOHY
Judge
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URL: http://www.paclii.org/vu/cases/VUSC/2007/65.html