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

• Jurisdiction: Papua New Guinea
• Judge: Injia, CJ; Gabi & Makail JJ
• Judgment Date: 02 July 2010
• Citation: (2010) SC1060
• Docket Number: SCA No. 62 0f 2008
• Court: National Court
• Year: 2010
• Judgement Number: SC1060

Full Title: SCA No. 62 0f 2008; Porgera Joint Venture Manager Placer (PNG) Ltd v Robin Kami (2010) SC1060

National Court: Injia, CJ; Gabi & Makail JJ

Judgment Delivered: 2 July 2010

SC1060

PAPUA NEW GUINEA

[IN THE SUPREME COURT OF JUSTICE]

SCA No. 62 0f 2008

Between:

PORGERA JOINT VENTURE

Manager Placer (PNG) Ltd.

- Appellant-

And:

ROBIN KAMI

-Respondent-

Waigani: Injia, CJ; Gabi & Makail JJ

2010: 2nd July

CONTRACT OF EMPLOYMENT – Private Contract for fixed term – Termination without notice – Payment of money in lieu of notice period prescribed by Contract - Termination for reason – Disciplinary termination without following disciplinary procedures –Breach of contract- Whether relevant for assessment of damages for breach of contract.

DAMAGES – Written Contract of Employment – Private Contract for fixed term- Term of Contract – Termination, without reason, on 4 weeks notice or without notice payment of money in lieu of notice- Termination- Early termination without notice- Money in lieu of notice paid- Termination for reason – Disciplinary termination – No disciplinary procedures followed in effecting termination – Breach of Contract - Measure of damages – Whether damages should be confined to money in lieu of notice or extended to include wages for remaining period of contract- Whether additional damages should be awarded for employer’s failure to follow disciplinary procedures.

CONTRACT LAW - Contract of employment - Fixed term contract - Three years - Certainty of period of employment - Breach of - Wrongful dismissal

ASSESSMENT OF DAMAGES - Wrongful dismissal - Fixed term contract - Damages assessed on balance of contractual term - Damages restricted to wages and other benefits in contract - Payment of monies in lieu of notice not applied.

The appellant company employed the respondent under a written contract of employment for a fixed term. The contract provided for early termination by either party, without reason, on four week notice or by the company without notice upon payment of money in lieu of notice. The appellant terminated the contract for disciplinary reasons and paid money in lieu of notice. The National Court found the termination to be unlawful and in breach of the Contract and awarded damages in wages for the balance of the contract period. On appeal against award of damages only.

Held: (by majority decision)

1. Damages for breach of fixed term contract should be assessed on the basis of salary and other entitlements which the employee is entitled to receive had the contract been lawfully terminated.

2. In a case where it is an express or implied term of the contract that termination of the employment contract for cause would be effected upon compliance with disciplinary procedures, the measure of damages is assessed on a reasonable period within which the disciplinary proceedings would be commenced and concluded. The likely outcome of the disciplinary proceeding is immaterial or is an irrelevant consideration in assessing damages.

3. The trial judge erred in assessing damages for the balance of the contract period in that employee was only entitled to damages in salary and other entitlements for the notice period and within such reasonable period required to commence and complete the disciplinary process relating to termination for cause adopted by the parties under the contract. A reasonable period in the circumstances of this case was two (2). The employee already having been paid money in lieu of four week notice, he was not entitled to receive additional damages. Consequently, the appeal was allowed with costs.

Cases Cited:

PNG cases

Bromley v Pacific Finance Ltd (2001) N 2097

Christopher Appa v Peter Wama [1992] PNGLR 395

Ereman Ragi & Ors v Joseph Maingu (1994) SC 459

Felix T Ramran v NBC & ors (1990) N1110

Gideon Berereba v Margaret Elias (2002) N2197

Kenneth Bromley v Finance Pacific Ltd (2001) N 2097

Martha Limitopa and Poti Hiriange v The State [1988] PNGLR 364

Michael Brendal -v- Golden Square Pty Limited [1983] PNGLR 257

Motor Vehicles Insurance Ltd v Makis Kot (2007) SC 902

Nazel Wally Zanepa v Ellison Kaivovo, Department of East New Britain & Anor (1999) SC 623

Robert Karava v Kevin Byrne & Anor (1999) N1805

Pama Anio v Aho Balika & Another (20040 N 2719

Papua New Guinea Banking Corporation Ltd -v- Jeff Tole (2002) SC694

Peter Aigilo -v- Sir Mekera Morauta & The State (2001) N2102

Placer (PNG) Ltd v Alois Kawa (2008) SC 919

Rooney v National Forest Industries Council [1990] PNGLR 407

Teio Raka Ila -v- Wilson Kamit & BPNG (2002) N2291

University of Papua New Guinea & Ors -v- Jerry Duwaino (2009) N3727

Wata Potenge -v- Bosky Tony & Ors: OS No 307 of 1999 (Unnum. & Unrep. Judgment of 09th June 2000)

Wilson Thompson -v- National Capital District Commission (2004) N2686

Teio Raka Ila v Wilson Kamit & Ors (2002 ) N 2291

Overseas cases

Boyo –v- London Borough of Lambeth [1995] 1RLR 50AC; (1980) I.C.RC. 755

Focsa Services (UK) Ltd v Birkett [1996] UKEAT 826 – 95 – 3001; 1 RLR 325

Gallohr v Argyle Diamond Mines Pty Ltd [2005] WSCA 166

Gunton –v- London Borough of Richmond-upon-Thames [1980] 3 All ER 577

Janicuk v Winerite Ltd [1998] 1RLR 63

Livingstone v Ray Yard Coal Co. (1882) 5 App Cases 25

McKeeman v Mercer [2005] NIIT 1745

Siagian v Sanel Pty Ltd [1994] 122 ACR 333

Books and articles referred to:

Chitty on Contract, 28th ed. Volume 2

Counsel:

D Wood, for the appellants

M Karu, for the respondent

2nd July, 2010

1. INJIA CJ: This is an appeal against award of damages for wrongful dismissal. The respondent contests the appeal.

2. The appellant and the respondent entered into a written contract of employment (the Contract) under which the appellant employed the respondent as an Assistant Logistics Coordinator. The Contract was for a fixed term of 3 years. Clause 12.2 of the Contract permitted early termination of contract “by giving four week notice of termination by either party, without reason, or by the Company without notice on payment of four week salary”. Three months into the contract the appellant terminated the contract for reason but without notice. The reason was that the respondent breached Clause 11.1 of the Contract in that he chewed betel nut or ‘buai” during working hours at the mine site. Upon termination he was paid money in lieu of four week notice. The respondent instituted an action for wrongful dismissal in the National Court claiming damages in the sum of K203,353.23 which comprised wages for the balance of the contract. He denied breaching Clause 11.2 of the Contract and claimed his dismissal was “wrongful, harsh and oppressive and is therefore unlawful”. Four years after his dismissal, the action was tried in the National Court on 20th August 2007 and judgment delivered on 26th October 2007. The trial judge found there was breach of contract in that the reason given by the appellant for termination was unfounded. The trial judge awarded damages in the sum of K 102,464.22 in wages for the balance of contract. The trial judge did not consider the issue of mitigation of damages which was addressed by the parties at the trial.

3. The appellant appealed the judgment on twelve (12) grounds but abandoned 3 and pursued only nine grounds, as follows:

(1) His Honour erred in that he should have found that the respondent had failed to establish a cause or action of wrongful dismissal.

(2) His Honour erred in that he should have found that the respondent had received any and all salary and other entitlements due to him from the appellant.

(3) His Honour erred in that he should have found that the respondent had been paid by the appellant his salary and other entitlements for the period of proper notice.

(4) His Honour erred in that he should have found that the respondent, who was employed for 3 years pursuant to the contract of employment, could not sustain a claim for damages for any length of time beyond the period of proper notice which, under the contract, was 4 weeks.

(5) His Honour should have found that the amount paid by the appellant to the respondent upon termination of the contract of employment was at least sufficient to satisfy any liability that the appellant had to the respondent consequent upon the termination of his employment.

(6) His Honour erred in that he should have found there was no basis upon which the appellant was liable to the respondent in the sum of k102, 464.22 (or any sum).

(7) His Honour erred in that he should have found he could not be satisfied that the respondent had suffered any loss of damage in circumstances in which the respondent failed and refused to give evidence of his income subsequent to termination of his employment with the appellant.

(8) His Honour erred in that he failed or refused to apply the principles appropriate to the measure of damages for wrongful dismissal as laid down in cases such as Appa v. Wama [1992]PNGLR 395, Ramram v NBC N1110, Karava v Byrne N1805 PNGBC v. Tle SC694 and Placer v Alois Kawa unreported decision 3 July 2008, and had he done so, the respondent’s claim was bound to fail.

(9) His Honour erred in awarding the plaintiff K102,464.22 being salary and other entitlements for the duration of the contract and Nasfund contributions when he ought to have found that the only amount, pursuant to the contract of employment, that the...