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Mathias v Government of the Republic of Vanuatu [2006] VUSC 28; CC 200 2004 (3 March 2006)

IN THE SUPREME COURT
OF THE REPUBLIC OF VANUATU
(Civil Jurisdiction)

Civil Case No. 200 of 2004

BETWEEN:

EPHRAIMI MATHIAS
Claimant

AND:

THE GOVERNMENT OF THE REPUBLIC OF VANUATU
Defendant

Coram: Justice Treston

Counsel: Mr. Malcolm for Claimant
Ms. Williams for Defendant

Date of Hearing: 22 February 2006
Date of Decision: 3 March 2006

JUDGMENT

CLAIM

In a Supreme Court claim filed on 28 October 2004, the Claimant Ephriam Mathias claimed against the Public Service Commission and the Government of the Republic of Vanuatu for unjustified dismissal. During the course of pre-trial hearings, the First Defendant, the Public Service Commission, was dismissed as a party and the matter fell to be determined between the Claimant and the Government of the Republic of Vanuatu as the sole Defendant.

The Claimant sought VT11,751,667 for severance and 3 months notice together with common law damages in the sum of VT1,500,000 together with general damages for defamation in the sum of VT3,000,000 and exemplary punitive damages in the sum of VT2,000,000.

The Defendant admitted dismissing the Claimant but pleaded that the dismissal was lawful, in that the Claimant had been advised of three charges against him and had had the opportunity to respond in writing which he did. The Defendant pleaded that the newspaper article referred to by the Claimant in this claim was not defamatory and that it had insufficient knowledge of the other particulars pleaded.

During the course of the hearing, the Claimant abandoned his claim for damages for defamation, and exemplary damages and sought payment of 3 months salary in lieu of notice together with payment of severance for the time that he had been employed by the Defendant. The Claimant also sought general damages for the nature of the dismissal together with interest and costs. Those concessions necessarily limited the issues before the Court.

The Claimant had filed a sworn statement of 7 April 2005, and agreed at the hearing that paragraphs 12, 13 and the second sentence in paragraph 14 could be deleted together with the exhibits referred to therein. There was no objection from the Defendant.

The Defendant filed a sworn statement of George Pakoasongi of 18 May 2005. Although that deponent had also filed a sworn statement on the same date being a list of disclosed documents the evidential statement did not formally produce any of those documents in evidence and on hearing from counsel for the Claimant I ruled that paragraphs 2,3,4,5 and 7 were inadmissible through Mr. Pakoasongi because the documents were hearsay through that witness and other parts of those paragraphs were simple hearsay. While the sworn statement giving the list of documents was proof as to their existence it could not be proof of their contents through Mr. Pakoasongi unless he was the author of the documents and had personal knowledge of their contents.

The Defendant had not paid the trial by 14 days before the trial date pursuant to Rule 4.12 of the Civil Procedure Rules No. 49 of 2002, but the Claimant took no issue with that as the trial fee was in fact paid together with the 50% penalty before the trial date. Neither party had given notice to cross-examine any witness pursuant to Rule11.7 (4) of the Rules. Again no issue was taken by either party and the Claimant and Mr. Pakoasongi were cross-examined at the hearing.

FACTS

It was common ground that the Claimant commenced employment with the Defendant in April 1989 as a health officer. He occupied various posts until he was appointed as Commissioner of Labour in about October 1999 and he had carried on that position until he was dismissed by letter of 01 October 2004 with effect from 21 September 2004. At the time that he was dismissed his salary was VT52,128 per fortnight, or VT104,256 per month.

It seems that there had been no complaint or issue with the manner in which the Claimant had performed his duties prior to December 2003 and in fact at that time he approached Mr. George Pakoasongi, who was then the secretary of the Public Service Commission, and advised him that he wished to gradually resign from his position to take up full time work as a deacon with the Anglican Church. Days later, it seems, Mr. Lionel Kaluat was appointed to the post of Deputy Commissioner of Labour and from then on the Claimant got the impression, which proved to be well founded, that Mr. Kaluat was determined to have the Claimant removed so he could take over.

The Claimant said that the first time he became aware of an actual investigation was on or about 20 July 2004, when he received a letter dated 20 July 2004 from Mr. Pakoasongi as follows: -

"Our Ref: Dis. 11.5

Mr. Ephraim Mathias

Nambatri Area

Port Vila

Dear Mr. Ephraim,

RE: EMPLOYEE DISCIPLINARY REPORT

_________________________________________________________

On the 8th July 2004, the Public Service Commission (PSC) decided that an investigation be made against you, following a written complaint made by the Care Taker Minister of Internal Affairs, Hon. George Wells.

The allegations made against you are:

1. Work Attendance;
2. Misuse of government vehicle G.341;
3. Malpractice and Abuse of power.

The written complaint addressed by Hon. George Wells to the PSC is made pursuant to section 19B (1) of the Public Service Act.

As per the requirements of section 19B (2) and (c), I hereby submit the complaint made by the Minister against you, with the evidence gathered for your consideration. You now have 21 working days, to respond in writing to the allegations made against you.

Should you fail to submit your response to the allegations laid against you after 21 days, you case will be submitted to the PSC for its consideration.

Your response to this letter is highly needed.

Yours sincerely,

(sign)

George Pakoasongi

Secretary

Public Service Commission

Cc: Care Taker Minister - MOIA

Director - Department of Meteo

Manager - ESU

TA - HRM

PLPO - ESU

PF/DF;

Chrono;

File: dis."

The Defendant provided a letter with a response attached dated 10 August 2004 as follows:-

"Port Vila Anglican Church

Church of the Resurrection

Tagabe, Port Vila

George Pakoasongi

Secretary

Public Service Commission

PMB 9017

Port Vila

10th August 2004

Dear George Pakoasongi,

Re: Employee Disciplinary Report

I write with reference to your letter of 20th July 2004.

Please see my responses attached here.

Yours faithfully,

Deacon Ephraim Mathias

Allegation 1: Work Attendance

This allegation is false. I worked from 7.30am to 6.00pm all throughout the week including weekends. In December 2003, I was at work and produced work all the same. I have records and resource to verify the same.

Allegation 2: Misuse of Government Vehicle G341

This allegation is false. I have never used this vehicle for private purposes, there is no need. All my visits with the church is done after official hours of work are on Saturdays and Sundays of which the Anglican Church provides transport and transport allowances for hire of public transport.

Allegation 3: Malpractice and Abuse of Power

Mobile phones, car batteries, tyres obtained from Fung Kuei are properties delivered by Fung Kuei for the services of the Government; on government vehicle and the Department of Labour.

At no time have I negotiated nor entered into agreement with Fung Kuei to produce these goods in exchange for work permits.

Fung Kuei has and will continue to pay for work permit fees through Government procedures. I have no sole interest whatsoever to obtain these goods for my own personal gain.

Other Complaints

1. Carole and Ephraim

I have physically called Jones Ephraim at his house to produce an LPO for fuel, and Jones Ephraim has a habit of dashing off from the office when he knows we do critically needed him to print LPOs. I have driven to Takara Resort as Deputy Chairman for VIPA to attend the VIPA meeting, and I recalled driving past Carole Ephraim who was with his finance to mourn a death in the village of Paunangisu.

2. Naomi Hinge

I have never asked Naomi Hinge to type any of my private letters during official hours of work. Naomi leaves work at 4.30pm sharp, and when she is tied up with official workload, I drove her home on Government vehicle.

3. Michael Mangawai

I cannot recall have encounter with Michael Mangawai at any time on the North Efate Road with the Government vehicle. I could only recall Michael Mangawai calling me by phone and protested in the manner the PSC has caused him to pay penalties for unauthorized use of Government vehicle, and frankly, he was cursing George Pakoasongi and PSC for this alleged incident.

4. Lionel Kaluat and his reports

All aspects of Lionel Kaluat's report carries no substance whatsoever given his status of employment with the Department of Labour. He has never been appointed under legal procedure as a Labour Officer (let alone the appointment of Deputy Commissioner) and the stuff he writes about will only suit those who had assigned him the tasks he is currently undertaking in the Department of Labour.

5. Work Permit Exemptions

On Solomon Matane, may I state that I have never received any sum of VT25,000 or whatsoever from Solomon Matane and his fiancé. A work permit was issued to him on the understanding that the Citizenship Office was processing his application for citizenship sponsored by his ni-Vanuatu fiancé from Erakor village.

6. Other Work Permits

On Welcome Store, the prominent of this application (name withheld) has consulted me and following this consultation meeting, I saw fit to issue a permit.

On VFF Work Permits, I have consulted Jimmy Nipo, Tensely Lulu and Michel Jacobe prior to issuing permits, of which the applicants are volunteers (non salary earners).

7. My Conclusion

I have suspended certain Labour Officer from duty in early 2000 for serious breaches of office procedures (their obvious acts to conspire, collaborate and bring disrepute to the Commissioner of Labour and the Department of Labour). I can clearly see their footprints in this entire saga once more, obviously with Lionel Kaluat and their well-marked cronies within Labour and outside Labour."

In his sworn statement Mr. Pakoasongi said at paragraph 8 that "the Claimant was provided copies of all documents in respect to the allegations against him" however Mr. Pakoasongi did not specify which documents were supplied to the Claimant and there was no other evidence on behalf of the Defendant in that regard and the Claimant was not cross-examined as to that. As I said above, while Mr. Pakoasongi had filed a sworn statement as to the First and Second Defendants' list of documents on 18 May 2005, there were no substantive admissible evidential sworn statements producing any of that material to the Court.

Despite the fact that the Claimant denied the three charges against him, he was summarily dismissed without any further ado by a letter from the Public Service Commission of 1 October 2004 as follows: -

" Int.65.8

01 October 2004

Private and Confidential

Mr. Ephraim Mathias

C/ Labour Department

Port Vila

Dear Mr. Mathias

DISMISSAL FROM SERVICE

I deeply regret to formally advise you, that the Commission at its meeting No. 13 held on 21 September 2004 (Decision No. 12) have (sic) considered the investigation report and decided that you be immediately dismissed from service without any benefits under section 29 of the Public Service Act No. 11 of 1998.

Your dismissal is effective from 21 September 2004.

Yours sincerely,

(sign)

Henry Tamashiro

Acting Secretary

Copies: Director General, Ministry of Internal Affairs

Labour Department

Finance Department - Salaries Section

Senior Systems Officer & HRO

Audit Office

HRM file

PF

DF"

LAW

The Claimant in a civil case such as this assumes the burden of proof of the allegations which he makes and the standard of proof is on the balance of probabilities, which means more likely than not.

In his claim the Claimant accepted the wrongful repudiation and elected to treat the contract as at an end. The claim was based on unjustified dismissal under the provisions of section 50 of the Employment Act [CAP.160]. Section 50 provides as follows: -

"SERIOUS MISCONDUCT

(1) In the case of a serious misconduct by an employee it shall be lawful for the employer to dismiss the employee without notice and without compensation in lieu of notice.

(2) None of the following acts shall be deemed to constitute misconduct by an employee -

(a) trade union membership or participation in trade union activities outside working hours, or with the employer's consent, during the working hours;

(b) seeking office as, or acting in the capacity of, an employee's representative;

(c) the making in good faith of a complaint or taking part in any proceedings against an employer.

(3) Dismissal for serious misconduct may take place only in cases where the employer cannot in good faith be expected to take any other course.

(4) No employer shall dismiss an employee on the ground of serious misconduct unless he had given the employee an adequate opportunity to answer any charges made against him and any dismissal in contravention of this subsection shall be deemed to be an unjustified dismissal.

(5) An employer shall be deemed to have waived his rights to dismiss an employee for serious misconduct if such action has not been taken within a reasonable time after he has become aware of the serious misconduct."

In the recent Court of Appeal decision of Ben Garae v Public Service Commission [2005] VUCA 20; Civil Appeal Case No. 03 of 2005 a decision of 18 November 2005, the Court said this: -

"Counsel for the Appellant also submitted that there should have been an oral hearing granted to the Appellant before his summary dismissal. In this regard the primary judge found that the Appellant was given the opportunity to respond in writing to the allegations made against him, which he did. Given the admissions in his written response, the primary judge concluded that he had been afforded natural justice and it was not necessary for the Respondent Commission to hear the Appellant any further. We agree and would only add that section 50 (4) does not, in terms, require an oral hearing to be given to an employee before a dismissal for serious misconduct."

In that case the Appellant had admitted the complaints of serious misconduct made against him and was thereafter dismissed. The Court of Appeal held that the primary Judge's decision that the Appellant's termination was lawful was correct and that his claims for unlawful termination without notice, severance and damages for unjustified dismissal must all fail.

In another Court of Appeal decision of Vanuatu Maritime Authority v Bani Timbacci [2005] VUCA 19; Civil Appeal Case No. 24 of 2005 also a decision of 18 November 2005 in relation to another unjustified dismissal claim, the Court held that general damages for unjustified dismissal, distress and humiliation should be VT50,000.

Severance calculations are covered by section 56 of the Employment Act [CAP.160] as follows: -

"56. (1) Subject to the provisions of this Part, the amount of severance allowance payable to an employee shall be calculated in accordance with subsection (2).

(2) Subject to subsection (4) the amount of severance allowances payable to an employee shall be -

(a) for every period of 12 months -

(i) half a month's remuneration, where the employee is remunerated at intervals of not less than 1 month;

(ii) 15 days' remuneration, where the employee is remunerated at intervals of less than 1 month;

(b) for every period less than 12 months, a sum equal to one-twelfth of the appropriate sum calculated under paragraph (a) multiplied by the number of months during which the employee was in continuous employment.

(3) Where remuneration is fixed at a rate calculated on work done or includes any sum paid by way of commission in return for services, the remuneration shall, for the purposes of this section, be computed in the manner best calculated to give the rate at which the employee was being remunerated over a period not exceeding 12 months prior to the termination of his employment.

(4) The court shall, where it finds that the termination of the employment of an employee was unjustified, order that he be paid a sum up to 6 times the amount of severance allowance specified in subsection (2).

(5) Any severance allowance payable under this Act shall be paid on the termination of the employment.

(6) The court may, where it thinks fit and whether or not a claim to that effect has been made, order an employer to pay interest, at rate not exceeding 12 per cent per annum from the date of the termination of the employment to the date of payment

(7) For the purposes of this section the remuneration which shall be taken into account in calculating the severance allowance shall be the remuneration payable to the employee at the time of the termination of his employment."

Section 49 of the Act provides as following in relation to notice: -

"NOTICE OF TERMINATION OF CONTRACT

40 (1) A contract of employment for an unspecified period of time shall terminate on the expiry of notice given by either party to the other of his intention to terminate the contract.

(2) Notice may be verbal or written, and, subject to subsection (3), may be given at any time.

(3) The length of notice to be given under subsection (1)-

(a) where the employee has been in continuous employment with the same employer for not less than 3 years, shall be not less than 3 months;

(b) in every other case –

(i) where the employee is remunerated at intervals of not less than 14 days, shall be not less than 14 days before the end of the month in which the notice is given;

(ii) where the employee is remunerated at intervals of less than 14 days, shall be at least equal to the interval.

(4) Notice of termination need not be given if the employer pays the employee the full remuneration for the appropriate period of notice specified in subsection (3)."

S.29 of the Public Service Act No. 11 of 1998 provides as follows: -

"DISMISSAL FOR CAUSE

29 (1) The Commission may dismiss an employee at any time for serious misconduct or inability but subject to its obligations to act as a good employer and subject tot hat employee having the right to have that decision reviewed in accordance with section 38.

(2) The Commissioner may where the past performance of the employee has been exemplary provide to the employee a redundancy payment as if the employee's employment had been terminated under the Employment Act [Cap. 160]."

SUBMISSIONS

The Claimant submitted that the Claimant was not given an adequate opportunity to answer the charges which he denied. That was demonstrated by the fact that the notice of termination did not even mention his denials. As a matter of principle and of natural justice an accused must be given the opportunity to face his accusers. Much of the Defendant's evidence was hearsay and inadmissible. There should be a multiplier of severance entitlement. The allegations, especially of non-attendance at work, were not made within a reasonable time. Costs should be on an indemnity basis because of the withdrawn application to strike out and the offer of settlement.

The Defendant submitted that the Court should rely on the Public Service Commission decision as it had followed S.29 of the Public Service Act, and that, based on the reports that the commission had at the time, the dismissal was justified and lawful.

FINDINGS

While I am mindful of what the Court of Appeal said in the Garae decision about section 50 (4) of the Employment Act not requiring an oral hearing to be given to an employee before a dismissal for serious misconduct, that was in the context of complaints which had been made and which had been admitted by the Appellant. In the present case, the Claimant denied the three complaints made against him but nevertheless the Public Service Commission dismissed him in a letter which did not even refer to his denials.

Where a complaints is made and denials are given in response it is my view that more must be done than the Public Service Commission dismissing an employee out of hand without any further steps. It is my view that the rules of natural justice dictate that where allegations or complaints are made and denied both parties must be given the opportunity to prove or disprove the allegations and to produce or give evidence.

For a body such as the Public Service Commission to reach a conclusion on such an important matter as a dismissal after long term unblemished employment purely on the papers in the face of a detailed denial without hearing from the parties in my view does not give an employee an adequate opportunity to answer the charges made against him in terms of section 50 (4). Such a decision must be arbitrary, capricious and without foundation. A person is entitled to face his accuser and to test the quality of the evidence against him and, in this case, Mr. Mathias was not given that opportunity. The way that this matter was handled in face of denial from the Claimant was tantamount to an accused in the criminal sphere being convicted without evidence being given and that cannot be in accordance with the principles of natural justice. I cannot accept that the Court of Appeal in the Garae case was saying that a person who denies charges made against him is not to be given an adequate opportunity to test the evidence supporting those charges. While I agree that section 50 (4) does not in terms require an oral hearing to be given to an employee before a dismissal for a serious misconduct that simply cannot apply in the present case where the charges were denied. In Garae there were admissions in the Appellant's response, here there are none and I cannot conclude that this Claimant has been afforded natural justice. That is particularly so when the Commission did not even deign to refer to his denials in the letter of dismissal.

I thus conclude that the dismissal of the Claimant was an unjustified dismissal and the Claimant is entitled to the relief he seeks.

It is the aspect of the nature of the dismissal that bears upon the Claimant's right to common law damages. In Melcoffee Sawmill Limited v Croucher & George [2003] VUCA 24; Civil Appeal Case No. 18 of 2003 the Court of Appeal said:-

"There remains the question of whether there should be any further relief given to the Respondent for any loss of reputation and pain, suffering humiliation or the like. That is clearly not covered by s.56(4). There was a paucity of evidence at the hearing as to this but common sense dictates that the Respondent suffered distress beyond that usually occasioned to someone in the sudden and unexpected termination of relatively long standing employment."

Here there was long standing employment of over fifteen years and in this case I am of the view that there should be some recompense at common law for the unjustified dismissal and the breach of the Claimant's rights to an adequate opportunity to answer the charges. That should in my view be a similar award to that given in the Timbacci case and I set it at VT50,000. That also recognizes what the Court of Appeal said in the Melcoffee case that the award should be nominal.

As to a multiplier for the severance calculation, I decline to adopt the any multiplier under section 56 (4) of the Employment Act because the Claimant had advised the Defendant as early as November 2004 that he intended to resign and, upon his dismissal, he took on the position of deacon with the Anglican Church as he intended to so. That accords with the Melcoffee case where the Court of Appeal recognized that there must be proof of "special damage" and there has been no such proof in this case. In fact the Claimant only ever intended to enter the Church which he did.

Although counsel for the Claimant at the hearing sought an award of costs on an indemnity basis because there had been an offer of settlement made and rejected that offer for that settlement was far in excess of the award which I have now made and I do not consider that costs on an indemnity basis are appropriate even though the Claimant was put to extra expense in preparing to answer the Defendant's application to strike out the claim which application was subsequently withdrawn.

In passing I note that it may well be that the Defendant could be deemed to have waived its rights to dismiss the Claimant for serious misconduct in relation to his alleged non-attendance at work under the provisions of S.50 (5) because the allegations as to that relate to December 2003 and they were not drawn to the attention of the Claimant until July 2004. That is hardly a reasonable time but due to my findings above that is somewhat academic.

In this case I do not consider that the Defendant acted as a good employer in dismissing the Claimant in the manner that it did.

CONCLUSION

I find in favour of the Claimant against the Defendant in that dismissal was unjustified. The measure of the Claimant's relief must be as follows:-

3 months salary in lieu of notice

I also award interest on the judgment sum at 5% from the filing of the claim on 28 October 2004 until the date of payment together with costs on a standard basis to the Claimant against the Defendant as agreed or as determined by the Court.

JUDGMENT

Accordingly I enter judgment for the Claimant against the Defendant for VT1,166,408 together with interest and costs as detailed above. I direct that the amount of the judgment must be paid by the Defendant to the Claimant by 3pm on 31 May 2006.

Dated AT PORT VILA on 3 March 2006

BY THE COURT

P. I. TRESTON
Judge