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Lingei v Ok Tedi Mining Ltd [2005] PGNC 46; N2912 (24 June 2005)

N2912

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS. NO. 1490 OF 2002

BETWEEN:

PAUL LINGEI
- Plaintiff

AND:

OK TEDI MINING LIMITED
- Defendant

KOKOPO: Lenalia, J.
2005: 4 April, 24th June

Civil Jurisdiction – Master and Servant – Contract of Employment – Alleged wrongful dismissed – Termination.

Contract of Employment – Written – Implication of written contract – Construction of Terms of written contract of employment – Breach of contract of employment – Termination valid.

Cases Cited:
Robinson -v- National Airlines Commission [1983] PNGLR 476
Malai -v- Papua New Guinea Teachers Association [1981] PNGLR 116
Ridge -v- Baldwin [1963] UKHL 2; [1964] A.C. 40
Cloustan and Co. Ltd -v- Corry [1905] UKLawRpAC 66; (1906) A.C. 122

Counsel:
Latu, for the Plaintiff
T. Boboro, for the Defendant

13th June 2005

LENALIA, J. These proceedings were commenced by a Writ of Summons wherein, the plaintiff is suing the defendant company for wrongful termination of his employment contract with the defendant. The matter went by trial and the plaintiff was the only witness in his case together with a great volume of documentary evidence.

Evidence

It is the plaintiff’s evidence that he commenced working with the defendant company (hereinafter referred to as "the company") in 1987. He graduated from the University of Technology in Lae with a Bachelor of Science in Mineral Processing in 1986 and immediately sought employment with the company. The plaintiff held numerous positions from a graduate Metallurgist right up to a Mill Operations Superintendent. At the time of his termination the plaintiff said he had worked with the company for 15 years.

The plaintiff’s evidence shows that he was booked by the company security personnel on 19th of August in 2002, for breach of the company policy known as "Breach of Light Vehicle Usage Policy ". A report was furnished by the security personnel to the Superintendent of the company Security Operations and the plaintiff was suspended on 27th of August and three days later he was formally terminated from his employment.

Evidence by the plaintiff in relation to what offence he committed leading to his termination is as follows. On 19th of August 2002, he was on an approved leave to attend to his sick daughter. He went home to take his daughter to be brought to the hospital. It is not clear from his evidence whether reference to "home" meaning his home Province or his company allocated residence on the mine site.

Be that as it may, when he returned that afternoon to his company allocated residence on the mining town of Tabubil, he went to the hotel and had some beer. When he came to the house, he found out that his daughter was still sick so he decided to take his sick daughter to the hospital. So he drove the company vehicle allocated to him using it to go to his in-law’s place. He named that in-law as Norbert Meresi. The reason for going to Norbert Meresi’s place was to wake him up so Norbert could drive him back to the plaintiff’s house because by then the plaintiff had been drunk and perhaps probably to drive his sick daughter to hospital.

Between 11:30 pm and 12 midnight, when the pair were driving back, the on duty security personnel stopped them on their way and Robert Meresi was asked to drive to the Company Security Base. At the Base the plaintiff was asked to be breath tested by wanting him to go through a breathalyzer machine. He was asked certain questions to which he answered freely and soon after that he was released. He in fact refused to go through the breathalyzer machine.

Upon receipt of the incident report, the defendant’s management considered the report and thereafter decided to terminate the plaintiff for breaching the light motor vehicle policy by driving the company vehicle whilst heavily under the influence of liquor.

Coming now to the contents of some documentary evidence tendered by consent, in favour of both the plaintiff and the defendant company. I take the case of the plaintiff first. The Managing Director of the defendant company wrote to the plaintiff on 30th of August advising him of his termination. In that same letter the plaintiff was thanked for his contribution to the defendant company and at the same time he was given 5 clear working days to appeal against the decision of his termination. (see Ex. "P4").

A day after receipt of the Notice of his termination, the plaintiff wrote a two page letter to the Managing Director of the defendant company on 1st September 2002 appealing for leniency in which letter the plaintiff explained the reasons why he used the company vehicle by engaging Mr. Nobert Meresi to drive him and his sick daughter to the hospital, (see Ex. "P.7"). In that same letter, the plaintiff said he accepted the management decision and said he would not appeal and in fact the plaintiff requested that instead of terminating him, the defendant company should consider giving him an option to resign and go on redundancy termination.

The following day the defendant’s Managing Director Mr. Keith E. Faulkner wrote back to the plaintiff acknowledging receipt of the plaintiff’s letter of appeal for leniency and said the management had considered the plaintiff’s request but had refused the request to resign and go on a redundancy termination. The plaintiff was however offered an ex-gratia payment equivalent to three (3) months salary for recognition of the plaintiff’s length of service without any offence, (see Ex. "P.8").

Defence case

The defence called three witnesses and tendered documentary evidence by consent a number of exhibits which the Court shall refer to some of them. The first witness, Norbert Meresi gave an account of how he was awoken by his third born son on the night of 19th of August 2002. When he came out from his house he saw the Plaintiff standing by a company vehicle allocated to the plaintiff. Nobert observed that Paul Lingei was in a drunken condition. Norbert decided to drive the plaintiff back to his house.

On their way between Norbert’s premises and the plaintiff’s house, the defendant’s security personnel intercepted them. Norbert made a statement (see Ex. D1") in which he said when he saw the plaintiff, he was so drunk so much that his speech was slurred, and he was unsteady on his feet. The plaintiff and Nobert were asked to go to the Security Base.

Rinson Ngale a Security Officer with the defendant company received a radio message from the Radio Operation Centre asking those who were on motorized patrol to look out for a company vehicle supposed to be driven along the Lono Road up to the "C" housing division within the township of Tabubil. When Rinson sighted the vehicle, he drove up to it and found out that Nobert Meresi was driving the plaintiff’s allocated company vehicle. He asked the plaintiff and Nobert to drive to the Base. (see Ex. "D2").

When the plaintiff and Norbert were at the security base, they were asked questions and further asked to take breath tests. In case of the plaintiff, he refused to have his breath tested but admitted to have been fully drunk. In Pidgin "mi tok out olsem mi spak".

The third witness Mr. Norbert Sale is the defendant company’s Senior Employer Relations Officer. He confirmed that the plaintiff was terminated because he breached the defendant’s vehicle policy resulting in his instant dismissal. He further confirmed that after the incident there was exchange of correspondences between the plaintiff and the defendant company management. (see Exs "D2" "D3" "D4" "D5" AND "D6".) The last of those exhibits ("D6") is the receipt of a certain payment made out by the company in favour of the plaintiff in the sum of K9,692.40. The Court understands that to be an ex-gratia payment.

Submissions

For the Plaintiff, Mr. Latu argued that the plaintiff’s employment with the defendant company was governed by the terms and conditions of Employment of the Senior National Staff Employees Contract (see Ex. "P11.1".), to which I agree. He submits, the plaintiff’s termination in conjunction with the Light Vehicle Policy was unfair and most unreasonable given the fact that his client had maintained an unblemished record with the defendant company for 15 years and the company did not rightly exercised it’s discretion pursuant to Clause 5 (4) of the Terms & Conditions of Employment of Senior National Staff Employees.

Mr. Latu relies on a number of common law authorities which I shall refer to later in this discussion on which Mr. Latu argues that although drunkenness of an employee may constitute a certain degree of misconduct warranting dismissal, there must be a relationship between drunkenness and the ability of an employee to carry out employment responsibilities. It is further argued that in the instant case there was no relationship at all between drunkenness and the ability of the plaintiff to carry out his job with the defendant.

Mr. Boboro of counsel for the defendant submitted that an employer can hire and fire at any time without giving any notice. That in the circumstances of the plaintiff in this claim, he had breached or violated the defendant’s Light Vehicle Policy and as such, he was entitled to be terminated. He further submitted that the plaintiff was lawfully terminated but if the Court finds otherwise, should order the defendant to pay for the balance of the contract for salaries and other entitlements.

Law

The plaintiff’s employment was governed by the OK Tedi Mining Limited (OTML) Senior National Staff Employee Contract, Terms and Conditions of Employment and Part 1 of the above document sets out all benefits due to an employee under the Senior National Staff category whilst Para. 2 contains regulatory measures governing a contract of service.

The plaintiff was terminated pursuant to Clause 5 of the Terms & Conditions of Employment of Senior National Staff Employees Contract. That Clause states:

"5 TERMINATION FOR CAUSE:

If the employee:-

(a) is absent from work without authority or good reason;
(b) wilfully disobeys a lawful and reasonable instruction or performs duties in an unsatisfactory manner after due warning;
(c) acts in a manner injurious to discipline at the place of work;
(d) assaults any other Employee of the Company or it’s subcontractors, or any person on Company property;
(e) attends work with impaired capabilities and judgment following the consumption of alcohol or drugs;
(f) is convicted of a criminal offence and sentenced to imprisonment for a period in excess of seven days; or
(g) commits any act or is guilty of any default which would justify dismissal under any law of Papua New Guinea,

the Company may immediately terminate the employment without notice."

An employer has the right to dismiss an employee instantly. That is an employee can be sacked on the spot and without notice. That right exists even where the contract of employment contains a term providing for a specified period of notice. Papua New Guinea adopted the common law principle of "master and servant" by Schedule 2.2 of the Constitution as part of our underlying law which principles existed before Independence.

The above reality was clearly recognized by the Privy Council in 1905 in a case involving the dismissal of an employee for being convicted of drunkenness. Delivering the judgment in Cloustan and Co. Ltd. –v- Corry [1905] UKLawRpAC 66; (1906) A.C. 122 Lord James of Hereford said at p. 129:

"There is no fix rule of law defining the degree of misconduct which will justify dismissal. Of course there may be misconduct in a servant which will justify the determination of the contract of service by one of the parties to it against the will of the other. On the other hand, misconduct inconsistent with the fulfilment of the expressed or implied conditions of service will justify dismissal. Certainly when the alleged misconduct consists of drunkenness there must be considerable difficulty in determining the extent or condition of intoxication which will establish a justification for dismissal. The intoxication may be habitual and gross, and directly interfere with the business of the employer or with the ability of the servant to render due service. But it may be an isolated act committed under circumstances of festivity and in no way, connected with or affecting the employer’s business. In such a case the question whether the misconduct proved establishes the right to dismiss the servant must depend upon facts... and is a question of fact".

I note here that the instant case was not a case of drunkenness per se. It was drunkenness together with a breach of the company policy regulating safety usage of light vehicles owned by the company and the fleet of vehicles allocated to certain officers in the employ of the defendant company. I agree with Mr. Boboro that there are two issues for the Court to decide. The first one is whether was the plaintiff wrongfully terminated and secondly, if he was, what would be the proper measure of damages should be awarded to the plaintiff.

The above view is rightly reflected in the common law case of Ridge -v- Boldwin [1963] UKHL 2; [1964] A.C. 40 a member of the Court, Lord Reid categorized the law on master and servant relationship in the following words:

"The law regarding Master and Servant is not in doubt. There cannot be specific performance of a contract of service and the Master can terminate the contract with his servant at any time 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".

See Malai -v- Papua New Guinea Teachers Association [1991] PNGLR. 116.

The defendant’s light vehicle policy includes a comprehensive set of regulations governing usage including traffic and safety rules on the mine site and outside as well. On page 1 of that document it states in part;

"The purpose of this policy is to insure that the light vehicles are used as intended, are not abused and are utilized within the laws of Papua New Guinea including traffic safety rules and tax regulations".

The Defendant’s policy on traffic regulations requires strict compliance by the use of the word "must" in paragraph 1 of the traffic regulations. It further says any drivers of company vehicles found breaching traffic regulations both during and after normal working hours would be subjected to disciplinary action including termination. Paragraph 10 & 11 of page 3 on Traffic Regulations are in the following terms:

"Driver Whilst Under the Influence.

No person shall drive or operate, or attempt to drive or operate any Company vehicle whilst under the influence of alcohol or any other drug or intoxicating substance including betel nut.

Any person found to be operating a Company Vehicle whilst under the influence of alcohol, drugs, or intoxicating substances including betel nut will be subjected to termination".

It is argued in favour of the plaintiff that, the plaintiff may not have been driving at the time the vehicle was driven as Nobert Meresi drove the plaintiff. That version is not correct. Nobert Meresi said in evidence confirming his statement tendered by consent (see Ex. "P.10") that he was fast asleep with his family by about 12 midnight when his third born son woke him up to assist the plaintiff. When Nobert came out he observed the plaintiff to be drunk and found out that the plaintiff had driven to his house in an OTML allocated vehicle L. 798.

It is obvious from the plaintiff’s letter of appeal for leniency to the Managing Director dated 1st of September 2002, that he admitted to intentionally having intoxicated himself with his 3 friends at a place he only referred to as "Cloudlands" and after having some beer from 7:30 pm until he came home before midnight. In that same letter, the plaintiff admitted driving from his house to Nobert Meresi’s house. Though he was an off-sider at the time, the security personnel found the vehicle driven by Nobert Meresi, the plaintiff had driven from Cloudlands to his house then later to Mr. Nobert Meresi’s place is abundantly clear that he was guilty of breaching the Defendant’s light vehicles policy.

The issue arises from the foregoing discussion is that was the plaintiff wrongly terminated as he claims in his evidence and the pleading in the Statement of Claim in the Writ of Summons. The defendant company had discretion pursuant to Clause 4 and 5 of Part 2 of the Terms & Conditions of Employment. Clause 4 (a) (i)(ii) to terminate the Plaintiff and state that the employment contract can be terminated either by the company or an employee giving notice to the other one month’s notice or by the company itself giving the employee a month’s notice. At the same time the company has discretion to terminate without giving notice under Clause (4)(iii) which say:

"- - -by the Company without allowing any period of notice or making any payment in lieu of notice, should the Company terminate the employment for cause".

From the above observation, I conclude that the various documents I have referred to suggest to this Court that the contract between the plaintiff and the defendant company was a contract of service and the common law principle of the right to "hire and fire" applied to the case of the plaintiff in the instant claim.

I find from all evidence that, the plaintiff’s behaviour in the way he got himself intoxicated then drove the company allocated vehicle to him was complete disregard to the Defendant’s policy of maintaining the company’s fleet of vehicle in and outside the mine site. I must conclude that by the evidence presented to this Court, I am convinced that the plaintiff was lawfully terminated. I further find that the misconduct committed by the plaintiff was inconsistent with the fulfilment of the expressed conditions of service stated in the light vehicle policy which in my view justified instant dismissal by the defendant’s management.

Amongst the volume of documentary evidence tendered by consent on trial is a letter dated 12th June 2001 on which the Executive Manager of Mill Division Mr. Glen Kuri offered an extension of plaintiff’s contract of employment for a further period of 36 months which could have lapsed by 10th of April 2004 had the plaintiff not been terminated.

However, after the renewal of his contract the plaintiff only worked one (1) year two (2) months one (1) week and four (4) days into the new contract when he was terminated. In my view that is what the plaintiff is entitled to in this claim. That is to say, the plaintiff is entitled to wages and other entitlements due to the balance of his contract from 30th of August 2002 to 10th of April 2004.

That works out to be one year, six and a half months. The plaintiff had already been paid his 3 months salary and other associated benefits for that period. That must be deducted from the remaining contractual period.

On the plaintiff’s claim for punitive damages, I must reject it on the basis that, I find there was no wrong done in law for the defendant to be ordered to pay punitive damages as it is often ordered by the Court as a punishment for breach of Constitutional or statutory rights.

Having found so, and given the fact that, calculations by the plaintiff are not so clear from his evidence as to his fortnightly salary and other benefits are not clear, the Court gives judgment for the balance of the plaintiff’s term of his contract from the date to be calculated from the 3 months pay he has already received to 10th of April 2004.

The Court orders interest of 8 percent since the date of filing the writ and the defendant shall meet the cost of these proceedings. I direct that judgment be not entered for 14 days from today’s date. The parties may, during that 14 days, apply to the Court to vary the judgment to correct any errors on calculations made in accordance with the correct remaining balance of period for which the defendant shall pay the plaintiff, it may be dealt with by Chamber order. Otherwise the judgment shall take effect and may be entered at the end of that 14 days.
_______________________________________________

Lawyer for the Plaintiff : Latu Lawyers
Lawyer for the Defendant : Allens Arthur Robinson Lawyers