Hannan v Air Vanuatu [2016] VUSC 106; Civil Case 126 of 2013 (16 August 2016)

IN THE SUPREME COURT OF
THE REPUBLIC OF VANUATU CIVIL CASE 126 of 2013

(Civil Jurisdiction)

BETWEEN:	GLEN HANNAN Claimant
AND:	AIR VANUATU Defendant

Corum: Vincent LunabeK CJ

Counsels: Mr Nigel Morrison for Claimant

Mr Edward Nalyal for Defendant
Hearing dates: 20-21 April 2016
Date of Judgment: 16 August 2016

JUDGMENT

1. This is a claim for employment entitlements. In the claim filed 10 June 2013, the Claimant claims for:

(i) Payment for 197 leave days owed at the rate of Vatu 44,450 per day being Vatu 8.756.650.
(ii) Payment for severance allowance outstanding in the total amount of Vatu 8.009.022.
(iii) Interest.
(iv) Such further or other relief as this Honourable Court deems just.
(v) Costs

2. The Claimant commences employment with the Defendant as a pilot on 31 March 2013. The Claimant’s employment with the Defendant was terminated on or about 31 March 2012 consequent upon the Claimant’s written resignation.
3. At termination of his employment the Claimant said he was due various entitlements from the Defendant and the Defendant offered to settle these.
4. The letter dated 5^th April 2012 from Reynolds Boeson, Manager Human Resources of the Defendant to the Claimant, confirmed the discussions to settle the Claimant’s payment for severance and leave.
5. The Claimant said despite the offer to settle and his subsequent demands for payment of his entitlements, the Defendant has failed or refused to pay him his lawful entitlements.
6. In the Defence, the Defendant says, among other matters, the following:
   • (i) That it paid severance to the Claimant under the various employment contract it entered into with the Claimant prior to 30 September 2010.
   • (ii) That the sum of Vatu 4,004511 paid to the Claimant in or about March 2012, represented severance pay under the employment contract dated 30 September 2010 and that the Claimant is not entitled to any further severance payments.
   • (iii) That under clause 10 of the employment contract dated 30 September 2010, the Claimant was entitled to 42 days annual leave for each year.
   • (iv) That the Defendant was not aware of and did not authorise the Claimant to accrue leave beyond the 2 years period or as claimed.
   • (v) That the leave applications by the Claimant were never provided to the Defendant until about April 2012, when the Claimant provided copies of the applications to the CEO of the Defendant.
   • (vi) That the Claimant accrued the said leave without authorisation of the Defendant and in breach of the clause 10 of his employment contract.
7. By the end of the trial there was only one issue left to be determined by the Court being-

Whether the Claimant has untaken leave days and whether he is entitled to be paid for these.

8. Before the trial started the claim for unpaid severance was agreed to by the parties being Vatu 8.756.650.
9. On the disputed issue, the evidence was given by sworn statements and oral testimony by the Claimant for the claim and Mr Reynolds Boeson, Manager Human Resources of the Defendant, for the Defence.
10. On the amount of undertaken leave days, the Claimant’s counsel asked the Court to record that the Claimant accepted the evidence of the Defence that the amount of untaken leave days of the Claimant at the end of his employment with the Defendant was 161.5.
11. This was accepted on the basis that Boeson gave evidence that the schedule of leave days he provided was from the Defendant’s Human Resources Department [Attachment “RB4”] and more accurate than the Jean Paul Virelala Schedule attached to the Claimant’s statement.
12. In his evidence, Boeson agreed that “RB4” included no leave day allowance for the period 1 January 2012 to 31 March 2012 and that allowance should be 10.5 days.
13. It is then found and accepted that the total number of untaken leave days was 161.5. As “RB4” showed, this total included 110 days and 40 days respectively previously paid to the Claimant.
14. It is also a common ground that the value of a leave pay is Vatu 44,450.
15. The next question is whether the Claimant is entitled to be paid for 161.5 untaken leave days.
16. The Claimant’s position along with other pilots during these periods was that due to crewing pilots difficulties (shortage of pilots) they cannot take leave but they will be paid for instead.
17. The Defendant says that the Claimant is entitled to no more than 84 leave days payment (equivalent to 2 years leave) and relies on “D1” Employment Agreement, clause 10.
18. Clause 10 of the Employment Agreement entered into between the Claimant and Defendant (exhibit D1) provided that:

“10. ANNUAL LEAVE

The Employee shall be entitled to forty-two (42) days Annual Leave for each year of this Agreement. Annual Leave requests by the Employee must be on the Staff Leave Application Form and be approved by the Employer prior to the commencement of all Annual Leave. Failure of the Employee to adhere to this may result in Disciplinary Action being taken by the Employer and possible termination of employment as Serious Misconduct.

Annual Leave cannot accrue beyond the equivalent of two (2) years’ Annual Leave Credit without prior approval of the Employer. From time to time Annual Leave may be fixed by the Employer, who shall be so far as practicable in the circumstances of the undertaking, comply with the Employee’s request in this respect.

Annual Leave will not be paid out in lieu during the term of this Agreement, unless approved by the General Manager Flight Operations and this is only to be to a maximum of twenty (21) days”.

19. The Claimant gave evidence supporting his claim to the following effect:
    • In his sworn statement (para 6) he stated:

“6. Prior to my resigning and terminating my employment with the Defendant, I raised with the Defendant my concerns regarding my accrued outstanding annual leave. The matter was formally discussed in a meeting with pilots and management. We were assured by the Deputy CEO Jean Paul Virelala that our leave was save and would be honoured.”

• His oral evidence also confirmed the representations made to himself and other pilots by Deputy CEO Virelala.
• In the trial, there were exhibit bundle of emails (7 pages) showing the short staffing of pilots with the Defendant and directives that they could not take leave.
• The sworn statement of Boeson (at page 6) showed that 50% of pilots (6 of 12) had accumulated more than 84 days leave (equivalent to 2 years leave) so it was a regular phenomenon.
• There was also evidence of good faith payments previously to the Claimant of blocks of 110 days and 40 days untaken leave.

20. I peruse and consider the provisions of clause 10 of the Employment Agreement between the Claimant and the Defendant.
21. I accept as a fact that there was a short staffing pilots with the Defendant and the Defendant issued directives to stop the pilots taking leave when they were due.
22. I also understand the policy behind clause 10 of the Employment Agreement which is to avoid pilots excessive accumulation of leave days when they should be taking them.
23. However, it would be wrong for the Defendant to deny the Claimant (and other pilots )accumulating leave days when they are denied their ability to take them. Surely, that is not the policy of clause 10 of the Employment Agreement either.
24. I therefore, accept the Claimant’s case and submissions that the Defendant by its conduct and representations has waived its entitlement to strictly apply clause 10 of the Employment Agreement.
25. I give judgment in favour of the claimant as follows:
    • (i) Severance Vatu 8.756.650
    • (ii) Leave days being - 161.5 x Vatu 44,450 - Vatu 7,278,675
    • (iii) Interest at 5% on Judgment amount from date of entitlement being 31 March 2012.
    • (iv) Costs are for the claimant to be taxed or agreed
      

Dated at Port-Vila this 16^th day of August 2016

BY THE COURT

Vincent LUNABEK
Chief Justice