DC338

PAPUA NEW GUINEA
[IN THE DISTRICT COURT OF JUSTICE]

CASE 725 OF 2005

BETWEEN

Jocelyn Pindipia
Complainant

V

David Wilkinson
First Defendant

Royal Papua Yacht Club
Second Defendant

Port Moresby: Bidar, Pm
2005: 20th October

Master and Servant – 
Action for unlawful termination of employment
General and special damages sought
Whether or not termination lawful
General principles.

Employment – 
Right of employer to hire and fire 
Circumstances
Termination justified
Judgment for defendants 

Cases Cited 
Ridge –v-Baldwin (1964) A.C. 40
Paddy Fagon –v- Negiso Distributors Pty Ltd (1999) N1900
Pama Anio –v- Aho Baliki (2004) N2719

Counsel
P. Pera for complainant
G. Tamade for defendants

JUDGMENT

24th November 2005,

BIDAR, PM: This is an action by complainant against the defendants for unlawful termination of her employment.

Complainant was employed by second defendant on or about 17th December 2001 as its Duty Manageress. Her duties involved managing the floor staff, double checking balancing daily takings and locking the takings in the cabinets in the club. She performed duties in that capacity for a period of 3 years.

On or about 20th October 2004, a money bag went missing from the cabinet or safe of the second defendant.

No allegation was made against the complainant of stealing but it was her responsibility to ensure safe custody of the funds, as she was the Duty Manageress. She was in possession of the keys to the safe. She owed duty of care to the second defendant as Duty Manageress; she was responsible for the loss suffered by the second defendant.

On or about 28th October 2004, complainant was suspended from active duty on full pay from 28th October 2004 to 13 July 2005, when she was terminated from her employment. She was paid her final entitlements on or about 22nd February 2005.

On the whole, the facts are clear, complainant was employed by the second defendant from 17th December 2001 until her suspension on 28th October 2004 and consequently termination on 13th January. She claims basically for wrongful dismissal.

Law

The relevant law is the Employment Act (Ch No. 373) and principles of common Law and Equity in their circumstantial application pursuant to Schedule 2.2 of the Constitution.

In Ridge –v- Baldwin (1964) A.C. 40 Lord Reid said:

"The law regarding master and servant is not in doubt. There cannot be a specific performance of a contract of service and the master can terminate the contract with his servant at anytime and for any reason or for none. But if he does so in a manner not warranted by the contract he must pay damages for breach of contract."

In this case, the complainant does not allege breach of contract of employment but say that the termination of her employment was generally wrongful.

The terms of complainant’s employment were unclear, in which case, the provisions of Employment Act. (Ch. No 373) apply. In the absence of specific employment contract, Employment Act is the law that applies.

S.36 of the Employment Act provides grounds upon which an employer can terminate employment without notice.

"(1) An employer may terminate contract of service without notice or payment without notice:

(a) where the employee

(i) willfully disobey a lawful and reasonable order, or
(ii) misconducts himself by an act or omission that is inconsistent with the due and 
(iii) faithful discharge of his duties or,
(iv) is guilty of a fraud or dishonesty or
(v) is habitually neglectful of his duties; or
(vi) is imprisoned for a period of seven days; or
(vii) is continually absent from his employment without leave or reasonable excuses; or
(viii) is convicted of an offence or contravention of this Act or any other law relating to employment; or 

(b) on any other ground on which he would be entitled to terminate contract without notice at common law."

The principles in Common Law generally are that an employer has the right to dismiss an employee instantly. That is the employee can be sacked on the spot and without notice, the right exists even where the contract of employment contains a term providing for a specific period of notice.

The right to dismiss an employee without notice for such express matters as insubordination, misconduct, neglect, inefficiency, dishonesty and malingering. Even when the award is silent on the point, the right to dismiss instantly for one of the accepted grounds is preserved to the employer, for the simple reason that, obedience, fidelity and care are implied terms of all employment contracts.

See Contracts of Employment by Brian Brooks (4th Ed p. 98)

In Paddy Fagon –v- Negiso Distributors Pty Ltd N 1900 (1999), which clearly adopts the common law principle of Master and Servant relationship, which is part of our underlying law. His Honour Kiriwom J stated that:

"in a master and servant relationship the master has the right to hire and fire, his servants. The same situation applies in private employment situation as here……"

In the case of Pama Anio –v- Aho Baliki (2004) N2719 where His . Honour Kandakasi J, discusses unlawful termination and law in regard to damages in such claims. His Honour state: "The lawfulness or unlawfulness of termination of an employment contract is usually depend on the terms of the contract. Where the contract is silent, the issue turns on the Employment Act in all cases, except where other specific legislation applies."

The circumstances of this case show that a money bag with substantial amount went missing from the cabinet. Complainant was the Duty Manageress at the time and was in possession of the keys. It was her responsibility to ensure safe custody of the monies collected on behalf of her employer. It is not alleged that she stole the money but she failed in her duty to ensure safe custody of monies collected at the time.

Coupled with this failure, she obtained K250.00 from her employer without asking. She did not ask for loan from her employer but took the money with intention of repaying, in law it is stealing, despite the fact she repaid the money soon after.

Applying the law to the facts of this case, I find no basis upon which it can be said that, the termination of complainant’s employment was wrongful and unlawful. Complainant was suspended on full pay and subsequently her employment was terminated. Her entitlements were processed and paid.

In all the circumstances, the court is not satisfied on the balance of probabilities that the termination of complainant’s employment was wrongful or unlawful. I find to, the contrary that, the termination of her employment was lawful and justified. I therefore; enter judgment for defendants. I dismiss the complaint with costs to the defendants. Such cost to be taxed if not agreed.

Paul Pera: Complainant
Pacific Legal Group Lawyers: Defendant