Thomas Cholai and Umat Kell and Elizah Maribu and Luke Ulad v Jant Limited; Jant Limited (Cross-Claimant) v Thomas Cholai (First Cross-Defendant) and Luke Ulad (Second Cross-Defendant) (2014) N5506

• Jurisdiction: Papua New Guinea
• Judge: Cannings J
• Judgment Date: 21 February 2014
• Court: National Court
• Citation: (2014) N5506
• Docket Number: WS NO 178 OF 2013
• Year: 2014
• Judgement Number: N5506

Full Title: WS NO 178 OF 2013; Thomas Cholai and Umat Kell and Elizah Maribu and Luke Ulad v Jant Limited; Jant Limited (Cross-Claimant) v Thomas Cholai (First Cross-Defendant) and Luke Ulad (Second Cross-Defendant) (2014) N5506

National Court: Cannings J

Judgment Delivered: 21 February 2014

N5506

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS NO 178 OF 2013

THOMAS CHOLAI

First Plaintiff

UMAT KELL

Second Plaintiff

ELIZAH MARIBU

Third Plaintiff

LUKE ULAD

Fourth Plaintiff

V

JANT LIMITED

Defendant

AND

JANT LIMITED

Cross-Claimant

V

THOMAS CHOLAI

First Cross-Defendant

LUKE ULAD

Second Cross-Defendant

Madang: Cannings J

2013: 24 September, 22 November,

2014: 21 February

LAW OF EMPLOYMENT – written contract of service – extension of contract after expiry of period specified in contract: Employment Act, Section 22 (contract period)

LAW OF EMPLOYMENT – final entitlements of employee on termination of contract of employment – whether employer obliged to pay repatriation expenses: Employment Act, Section 40 (repatriation on expiry etc of contract)

The four plaintiffs are former employees of the defendant. They commenced proceedings, claiming damages against the defendant for breach of their contracts of employment. Each plaintiff claimed that the defendant breached his contract by forcing him to resign and under-paying his final entitlements, in particular by refusing to pay repatriation expenses and long service leave. The defendant denied liability and made a cross-claim against two of the plaintiffs for unpaid rent on company-provided accommodation.

Held:

(1) The first plaintiff was at the time of termination of his employment, 1 March 2010, employed under a one-year written contract of employment, entered into in 2007, which was under Section 22(2) of the Employment Act, upon expiry of the period specified in it, deemed to have been extended for an unspecified period. His claims that he was forced to resign and that he was under-paid his final entitlements were, with the exception of the claim for repatriation expenses, rejected, the Court being satisfied that there was insufficient evidence of forced resignation and that calculation of the figure of K8,872.79 was otherwise correct. However, he established a breach of contract by proving that defendant (a) failed to give two months notice of termination as required by the written contract; and (b) failed to pay repatriation expenses under Section 40(1) of the Employment Act.

(2) The second plaintiff was employed under an oral contact of service under Section 15(1) of the Employment Act until termination of the contract on 22 August 2011. His claims that he was forced to resign and that he was under-paid his final entitlements were, with the exception of the claim for repatriation expenses, rejected, the Court being satisfied that there was insufficient evidence of forced resignation and that calculation of the figure of K5,130.60 was otherwise correct. However, he established a breach of contract by proving that the defendant failed to pay repatriation expenses under Section 40(1) of the Employment Act.

(3) The third plaintiff was at the time of termination of his employment, 28 June 2011, employed under a two-year written contract of employment, entered into in 2009. He claims that he was forced to resign and that he was under-paid his final entitlements were, with the exception of the claim for repatriation expenses, rejected, the Court being satisfied that he was given notice in writing in accordance with the contract of the defendant’s intention upon expiry of the contract not to renew it and that calculation of the figure of K6,428.81 was otherwise correct. However, he established a breach of contract by proving that the defendant failed to pay repatriation expenses under Section 40(1) of the Employment Act.

(4) The fourth plaintiff was at the time of termination of his employment, 1 March 2010, employed under a two-year written contract of employment, entered into in 2005, which was under Section 22(2) of the Employment Act, upon expiry of the period specified in it, deemed to have been extended for an unspecified period. His claims that he was forced to resign and that he was under-paid his final entitlements were, with the exception of the claim for repatriation expenses, rejected, the Court being satisfied that calculation of the figure of K8,643.50 was otherwise correct. However, he established a breach of contract by proving that the defendant (a) failed to give two months notice of termination as required by the written contract; and (b) failed to pay repatriation expenses under Section 40(1) of the Employment Act.

(5) The cross-claims against the first and fourth plaintiffs were wholly dismissed.

(6) It was declared that the defendant was in breach of each contract of employment in the manner determined and that the proceedings shall continue with a trial on assessment of damages.

Cases cited

The following cases are cited in the judgment:

Aquip Pty Ltd v Galo Gastronuevo [1987] PNGLR 491

Bruno Denfop v Wu-Jui Mario (2013) N5442

Jant Ltd v Umat Kell & Others (2013) N4953

STATEMENT OF CLAIM

These were proceedings in which four persons sought to establish liability in damages for breach of their contracts of employment.

Counsel

S Tanei, for the plaintiff

W Akuani, for the defendant

21st February, 2014

1. CANNINGS J: The four plaintiffs are former employees of the defendant, Jant Ltd. They ceased employment on various dates in the period from March 2010 to August 2011. They commenced proceedings in 2013, claiming damages against the defendant for breach of their respective contracts of employment. All plaintiffs claimed that the defendant breached the contract by forcing them to resign and under-paying their final entitlements, in particular by refusing to pay repatriation expenses and long service leave. The defendant denied liability, and made a cross-claim against two of the plaintiffs for unpaid rent on company-provided accommodation.

2. Each of the plaintiff’s claims will be addressed in turn, the primary question in each case being whether the plaintiff has established a cause of action in breach of contract. After that, the defendant’s cross-claim is determined.

THE FIRST PLAINTIFF, THOMAS CHOLAI

Plaintiff’s claims

3. He states that he started work with the defendant in 1991 after graduating with a Bachelor of Science in Forestry at the University of Technology, Lae. He was recruited from his home, Mouklen village, Manus Province. When he started work he was employed under a contract of employment by the company. Prior to ceasing employment, he was employed under a written contract of employment as the Assistant Manager, Logging Section, dated 1 December 2007. In 2010 he was forced to resign by the defendant with the promise that he would be subcontracted to become a logging contractor to supply logs to the defendant. If he did not resign, he would be terminated. When he resigned, he had served the company for 19 years. The subcontract promised never materialised as he claims that his attempts to formalise the promise were ignored or refused by the company.

4. The plaintiff claims that as a result of the actions that the defendant has been taking, he and his family have suffered. His wife Mrs Hilan Cholai has given affidavit evidence supporting the claim that herself and their nine children have suffered as a result of the actions by the defendant company. The plaintiff states that he continues to live in the defendant’s premises as he has not been paid his full entitlements. He believes that he was forced to leave his employment under false pretence by the defendant company. As a former contract employee, he was waiting for the defendant to fulfil its part of the contract and repatriate him and his family back to Manus. He states that instead of repatriating himself and his family back to Manus, the defendant paid him only K300.00 as transport allowance.

Defendant’s response

5. The defendant agrees that the first plaintiff commenced work in 1991, however he resigned in May 2002 to contest the general election held that year. When he resigned, he was paid all his entitlements from 1991 to 2002, a period of 11 years. He was re-employed by the defendant on 2 December 2002. When he was re-employed his point of hire was Madang and not Manus. He was employed by the defendant for the next eight years.

6. In 2010, he was made redundant due to downsizing of Jant Limited. The defendant states that it paid the plaintiff K8,872.79 upon his redundancy. It owes the plaintiff nothing.

Determination

7. I find that the first plaintiff was at the time of termination of his employment, 1 March 2010, employed under a one-year written contract of employment, entered into on 1 December 2007. That contract was, under Section 22(2) of the Employment Act, upon expiry of the period specified in it (1 December 2008) deemed to have been extended for an unspecified period (Bruno Denfop v Wu-Jui Mario (2013) N5442). Section 22(2) states:

Where an employee under...