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Nicholls v Suva City Council [2012] FJHC 1139; ERCC3.2011 (16 April 2012)

IN THE EMPLOYMENT RELATIONS COURT AT SUVA
ORIGINAL JURISDICTION

CASE NUMBER: ERCC NO. 3 of 2011

BETWEEN:

SERA NICHOLLS
APPLICANT

AND:

SUVA CITY COUNCIL
RESPONDENT

Appearances: Mr. Noel Tofinga for the Applicant.
Mr. Khan for the Respondent.
Date/Place of Hearing: Wednesday, 28th March, 2012 at Suva.
Date/Place of Judgment: Monday, 16 April, 2012 at Suva.
Coram: Hon. Justice Anjala Wati.

JUDGMENT

CATCHWORDS:-

Employment Law – Compliance Order Application – Jurisdiction- Principle Governing Grant- Breach and Obligation must be clear before Compliance ordered.

LEGISLATION:

The Employment Relations Promulgation 2007 ("ERP"): s.33.

1. The applicant seeks an order for compliance of clauses 9.3 to 9.5 and 13 of her employment contract and s.33 of the ERP.
   
2. The application is supported by the affidavit of the applicant. She deposed that on 19 May 2010 she entered into an employment contract with the employer to take up the position of the Chief Executive Officer from 31 May 2011. The contract was effective for 3 years and her base salary was $70,000 per annum.
   
3. She further deposed that on 25 January, 2011 the employer alleged that she had failed to deliver financial reports, collect outstanding rates, deliver corporate and succession plans for 2011, fill in vacant positions, implement council resolution, acquire a hotline number and pay out bonus to 3 terminated staff who were subject to Higher Salaries Commission. The applicant deposed that despite her explanations on 25 January 2011, she was terminated for the reasons contained in the letter of 15 March 2011. The termination letter also referred to a letter dated 26 October 2010 which she said she did not recall receiving until 16 March 2011 together with the termination letter.
   
4. Based on the facts of the case, Mr. Tofinga stated that the employee was summarily dismissed under s.33 of the ERP. S.33, according to Mr. Tofinga, can be only used for dismissal if there is a finding of guilt of any of the grounds outlined in s.33.
   
5. Mr. Tofinga argues that when there was no finding of guilt, s.33 was not complied with in essence, and thus there was a breach of the legislative provision in carrying out the termination.
   
6. Mr. Tofinga also argued that the ERP requires an employment contract to contain employment grievance and disputes procedures. As a result the employment contract had clauses 9.3 to 9.5 and 13 enunciated in it. Mr. Tofinga says that clause 13 of the employment contract provided that if a party has any personal grievance, then arbitration was the answer and that no party had the right to use any other tribunal or dispute procedure to resolve the personal grievance or dispute. Mr. Tofinga said that there was a disagreement on an administrative issue. The parties should have gone for arbitration and not terminated the contract.
   
7. Mr. Tofinga said that his client could not go to the tribunal to seek a remedy or relief of compliance for arbitration to take place because she was prohibited by clause 13.2 to go to any tribunal or use any dispute procedure.
   
8. Mr. Tofinga states that I need to reinstate the contract and now order arbitration of the personal grievance.
   
9. The respondent also filed an affidavit sworn by its special administrator. The respondent's counsel stated that the respondent terminated the applicant's employment under clause 9.5 of the employment contract which supersedes any other provision of the contract on dismissal and arbitration. Clause 9.5 gave the respondent prerogative to dismiss the applicant summarily for serious misconduct without notice or warning and nothing in clauses 9.3 to 9.6 affected the respondent's rights. According to the employer there was serious misconduct and the employer on its findings had the right to terminate the contract. If the applicant feels that the ground was not established, her right lies in a suit for unlawful dismissal.
   
10. Mr. Sahu Khan further argued that the arbitration clause is not for a matter where serious misconduct occurs, as the prerogative to summarily dismiss will be meaningless if matters of serious misconduct were to be arbitrated.
    
11. The issue before me for consideration is:-
    
    • (a) Should compliance with the S.33 of the ERP and clauses 9.3 to 9.6 and clause 13 be ordered?
      
12. S.33 of the ERP gives an employer the power to summarily dismiss an employee. It states that if an employee is guilty of certain matters he can be summarily dismissed without notice provided that written reasons for his dismissal is given to him at the time of dismissal and that upon dismissal he is paid his due wages.
    
13. The use of the word "guilt" is subjective. It is from the employer's assessment of guilt that gives the employer powers to terminate. Whether the grounds are indeed justifiable or not is a matter that is of relevance in determining the lawfulness of the dismissal by the Court.
    
14. Simply, one cannot wait for the Court to make a finding of guilt before exercising the powers to summarily terminate an employee. The employer can use its assessment and invoke the termination.
    
15. The onus under s.33 is to provide written notice of dismissal and payment of wages due. There is no complaint that these were not complied with.
    
16. There is therefore no established breach of s.33 for me to order any compliance of the same.
    
17. Now to clauses 9.3 to 9.6 and clause 13 of the employment contract. Having made a finding that there is no established breach of s. 33 of the ERP, I now, do not have any jurisdiction to go any further and order compliance with the employment contract. However, if in order to decide whether compliance of ERP should be ordered, I had to look at the employment contract, then I would definitely have powers to order compliance with the contract.
    
18. Be that as it may, the provisions of the contract which I have been asked to order compliance of, that main contract is now terminated. There is no existing contract to order compliance now.
    
19. Whether the contract was lawfully terminated or not, is not an issue that any Court can venture into in a compliance order application. The Courts power to order compliance with a contract is only for proceedings founded on an employment contract.
    
20. Further, if I had before me, proceedings on unlawful termination of the contract and if I found in favour of the employee that her contract was unlawfully terminated, I then, of course could reinstate the contract and order compliance with the same. In order to do that I needed to hear oral evidence and make a finding but I cannot determine such a crucial issue on affidavits.
    
21. The right to summarily dismiss an employee is the right enjoyed under s.33 of the ERP.
    
22. Summary dismissal means instant dismissal. The contractual provision on arbitration of the dispute or grievance in the subject contract takes away the power of the employer to summarily dismiss an employee under s.33 of the ERP. It thus in essence is not applicable to terminations carried out under s. 33 of the ERP. The arbitration provisions cannot be a bar to s.33.
    
23. Finally, in a compliance order application, I cannot reinstate the contract without ascertaining whether there was a breach by the employer for unlawful termination of the contract of employment. This is a matter for oral hearing after proper proceedings are founded on the employment contract.
    
24. I dismiss the application for compliance with an order that each party bears its own cost.
    

ANJALA WATI
Judge
16.04.2012

To:

1. Mr. Noel Tofinga, representative for the applicant.
2. Mr. Sahu Khan, counsel for the respondent.
3. File Number: ERCC No. 03 of 2011.