George Podas v Divine Word University (2011) N4395

• Jurisdiction: Papua New Guinea
• Judge: Cannings J
• Judgment Date: 23 September 2011
• Docket Number: WS NO 611 OF 2009
• Citation: (2011) N4395
• Court: National Court
• Year: 2011
• Judgement Number: N4395

Full Title: WS NO 611 OF 2009; George Podas v Divine Word University (2011) N4395

National Court: Cannings J

Judgment Delivered: 23 September 2011

N4395

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS NO 611 OF 2009

GEORGE PODAS

Plaintiff

V

DIVINE WORD UNIVERSITY

Defendant

Madang: Cannings J

2010: 18 December,

2011: 18 February, 23 September

LAW OF EMPLOYMENT – wrongful dismissal – whether employer breached written contract of employment by failing to give three months notice in writing; by failing to provide a right to be heard; by failing to give reasons – Employment Act, Sections 34, 35

The defendant terminated the plaintiff’s employment under a fixed term written contract of employment without notice, without giving the plaintiff a right to be heard and without providing reasons. The plaintiff had been employed for 18 months at the time of termination. He sued the defendant, claiming damages for wrongful dismissal, arguing that the employer breached the contract by: (1) not giving three months notice, (2) not giving a right to be heard, and (3) not providing reasons. A trial was held on the issue of liability.

Held:

(1) The defendant breached the contract by not giving three months notice in writing of its intention to terminate the contract as required by the contract of employment. The contract did not allow for salary to be paid in lieu of notice and the defendant could not rely on Section 35(2) of the Employment Act (a party may without waiting for expiry of a notice of intention to terminate pay a sum equal to the amount of salary that would have accrued during the notice period) as that provision does not (by virtue of Section 34(1)) apply for the first two years of operation of a written contract of service.

(2) The defendant was not obliged to give the plaintiff a right to be heard prior to terminating the contract, there being no term of the contract conferring that right and no right under the underlying law (New Britain Palm Oil Limited and Others v Vitus Sukuramu (2008) SC946 applied).

(3) The defendant was not obliged to give the plaintiff reasons for terminating the contract, there being no term of the contract conferring that right and no right to reasons under the underlying law.

(4) The court’s finding on the first ground was sufficient to conclude that the defendant breached the contract. Liability was established and a declaration made accordingly.

Cases cited

The following cases are cited in the judgment:

Ayleen Bure v Robert Kapo (2005) N2902

Bal Bar and Stettin Bay Lumber Company Limited v Maima Kora (2008) N3290

Bernbert Toa v Ly Cuong-Long and Jant Ltd (2008) N3471

Bromley v Pacific Finance Ltd (2001) N2097

Jimmy Malai v PNG Teachers Association [1992] PNGLR 568

New Britain Palm Oil Ltd v Vitus Sukuramu (2008) SC946

Placer (PNG) Ltd v Kawa (2008) SC919

Porgera Joint Venture Manager Placer (PNG) Ltd v Robin Kami (2010) SC1060

Rooney v National Forest Authority [1990] PNGLR 914

UPNG v Jerry Duwaino (2009) N3723

Vere Kialo and Chemica Didiman v Bernard Tiau CIA No 46/2006, 16.02.07

Vitus Sukuramu v New Britain Palm Oil Limited and Others (2007) N3124

TRIAL

This was a trial on liability for wrongful dismissal.

Counsel

A Meten, for the plaintiff

G T Elai, for the defendant

23 September, 2011

1. CANNINGS J: The plaintiff, George Podas, is seeking damages for wrongful dismissal against his former employer, Divine Word University. On 15 January 2007, the plaintiff commenced employment as Kiosk Supervisor under a fixed term written contract of employment. A little over 18 months later, on 4 August 2008, he was given a notice of termination, signed by the Acting President of the University, stating that his services were no longer required and that his employment was terminated with immediate effect. He was given no prior notice of termination, he was not given a right to be heard on the question of whether his employment should be terminated and he was not given any reasons for termination. He argues that he was wrongfully dismissed, ie that the University breached the contract of employment, in three respects:

1 not giving three months notice in writing of its intention to terminate the contract;

2 not giving him a right to be heard prior to termination; and

3 not providing reasons for termination.

2. The parties have agreed that this trial will be restricted to the issue of liability and that in the event the plaintiff succeeds a separate trial may be held on assessment of damages.

1 DID THE UNIVERSITY BREACH THE CONTRACT BY NOT GIVING THREE MONTHS NOTICE IN WRITING?

3. The plaintiff argues that the University was obliged by clause 2.1(a)15 of the contract to give him three months notice of its intention to terminate the contract. It did not do that. It gave him no notice. He gave uncontested evidence that he was at work shifting ice cream when he was, without warning, handed the following letter:

4 August 2008

Mr George Podas

Kiosk

Dear Mr Podas,

Re: Termination of Employment

Your employment services at Divine Word University are no longer required, and your employment is hereby terminated. This notice takes effect immediately.

In lieu of normal notice of termination, you shall be paid out according to the terms of your contract and according to the Employment Act 1978, Section 35 (2).

Entitlements from your employment will be paid by the DWU Financial Office upon your satisfactorily withdrawal from the University.

The University thanks you for the services you have given during your time of employment.

Yours sincerely

Br Andrew Simpson

Acting President

4. Clause 2.1(a)15 of the contract was in these terms:

The employment of GP shall stand terminated with the effect from the date on which the period of employment expires; or the DC may terminate the employment of CN;

i. Position has been removed.

ii. Employee has committed serious misconduct.

iii. Employee is, or becomes, by reason of mental or bodily infirmity.

iv. Either party shall give three (3) month notice in writing of its intention to terminate/resign this contract.

v. Refer to the DWU Human Resource Management Manual. [sic]

5. There are five points to make about this clause and its relationship to the termination notice. First, its grammar and punctuation (including improper use of the semicolon) are, to use a polite word, poor, and it is clumsily drafted. “GP” is defined by clause 1.2 of the contract as George Podas, the plaintiff employee, “DC” is defined as the Director of Catering, but “CN” is not defined anywhere. It is probably a typographical error but it renders the clause virtually meaningless. These defects are typical of the entire document, which is disconcerting, given that it emanates from an institution of higher learning.

6. Secondly, if a charitable approach to interpretation of the clause is taken and it is presumed that it is intended to prescribe the circumstances in which the contract can be terminated, it appears to prescribe five circumstances:

(i) where the position has been removed;

(ii) where the employee has committed serious misconduct;

(iii) where the employee has a mental or bodily infirmity;

(iv) where either party gives three months notice of intention to terminate;

(v) where the Human Resource Management Manual allows termination.

7. Thirdly, clause 2.1(a)15 provides that “the DC may terminate the employment”. This presumably means that the power to terminate the contract is conferred on the Director of Catering. Br Simpson signed the notice in his capacity as Acting President of the University and there is no evidence that he was the Director of Catering.

8. Fourthly, clause 3 of the contract is a notice clause that prescribes how any notice given under the contract was to be given. It required that any notice to “CN” (again an error in the contract) was to be in writing addressed to:

George Podas

C/ of Divine Word University

PO Box 483

Madang 511

Madang Province.

9. Clause 3 further stated that a notice “will be taken to be duly given or made when delivered, received or left at the above address”. The notice given to the plaintiff did not comply with clause 3 in two respects: it was not properly addressed to him (it simply stated “Mr George Podas Kiosk”) and it was not properly served on him.

10. Fifthly, nothing in clause 2.1(a)15 gave the University the option of paying the employee money in lieu of three months notice; and there is no other clause that gives such an option to the University.

11. The University concedes that, in fact, it did not give the plaintiff three months notice, but argues that it did not have to as it paid him three months salary in lieu of notice (a fact that is largely undisputed). Although the contract itself did not provide for salary being paid in lieu of notice such a course of action is provided for by the Employment Act,...