N11378
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 734 OF 2020

BETWEEN:

AUGUSTINE EIMBA  
Plaintiff
   
AND
SOUTH SEA LINES LIMITED  
 Defendant

Lae: Dowa J
2022: 5th & 13th September
2025: 16th July
 				      
EMPLOYMENT LAW -termination of employment contract-terms of employment including disciplinary policies are in the contract of employment- principles applicable in termination of contract of employment discussed-where the contract of employment is terminated for cause that is the end of that contractual relationship-where termination is unlawful, the Plaintiff will receive as damages the amount which he or  she would have been entitled to receive if he or she had been lawfully terminated- plaintiff has already been paid his entitlements including leave pay– plaintiff’s claim was dismissed

Cases cited:
Apolonia Steven v Ram KC (2016), 
Malai-v-PNG Teachers Association [1992] PNGLR 568
Porawi v Agarwal (2023) N10118
Ruhuwamo v PNG Ports Corporation (2019) N8021
Ruhuwamo v PNG Ports Corporation (2019) N8021,
The Central Bank of PNG v Tugiau (2009) SC1013, 
Saki v Kangleon (2019) N7860,
 Tawa v Mainland Holdings Limited (2020) N8727
Tjandranegara v Bsp Financial Group (2021) N9353 
 
Counsel:
T Berem, for the Plaintiff  
J Langah, for the Defendant

DECISION 

16th July 2025 

1.	DOWA J: This is a decision on both issues of liability and damages. The Plaintiff seeks damages against the Defendants for unlawful termination of employment.

BACKGROUND FACTS

2.	 The Plaintiff was employed by the Defendant as Chief Officer as of 28th September 2016 until 3rd March 2017. The Plaintiff signed a formal written contract of employment on 11th November 2016. On 25th February 2017, the Plaintiff did not sail with the crew on the vessel MV Lihir Destiny. On 3rd March 2017, the Plaintiff was terminated from employment by the Defendant. The reasons for termination were for deserting the vessel, MV Lihir Destiny, and abandoning employment with the Defendant.

3.	The Plaintiff alleges he did not abandon employment nor deserted the vessel as alleged. He refused to sail on the grounds that the vessel was unseaworthy. He alleges that despite repeated requests made to the defendant to make the vessel seaworthy, the defendant neglected its statutory duty to make the vessel seaworthy in meeting the requirements of the Merchant Shipping Act.  He alleges that his termination of employment was unlawful. He also alleges that he was not properly paid for the extra hours he worked.

4.	Aggrieved by the termination decision, the Plaintiff filed the current proceedings seeking damages for unlawful termination and for loss of salaries and entitlements. 

5.	The Defendant denies the allegations, pleading that there was cause for termination and that the employer has the right to hire and fire an employee at will and that all entitlements have been paid in full. 

Trial

6.	By consent the trial was conducted by the tender of their respective affidavits without cross examination.

ISSUES

7.	The main issue for consideration is whether the Plaintiff’s termination of employment was wrongful.

THE PLAINTIFF’S EVIDENCE

8.	The Plaintiff relies on his own affidavit filed on 8th November 2021. This is the summary of his evidence. The plaintiff commenced employment with the Defendant as Chief Officer on 28th September 2016. On 11th November 2016, the Plaintiff executed a written contract of employment. On 25th February 2017, the Plaintiff delivered a letter to the Master of the vessel to make the vessel seaworthy incompliance with the Merchant Shipping Act before he could sail with the vessel. The plaintiff deposed that because the defendant neglected its statutory duty, he refused to sail with the ship. On 3rd March 2017, Plaintiff was summarily terminated from employment on allegations of abandonment of the ship without complying with the company policy and procedures.

9.	The plaintiff alleges he was entitled to refuse sail by law under the Merchant Shipping Act as the vessel was unseaworthy and therefore the Defendant’s termination decision was wrongful, especially where he delivered several letters to the management prior to 25th February 2017 to keep the vessel seaworthy. 

10.	The Plaintiff also claims against Defendant K 12,480.16 being for: 

i.	 industrial and stevedoring allowances,
ii.	 overtime allowances 
iii.	 Nasfund contributions 
iv.	 unjustified pay deductions. 
v.	Delayed termination payments

THE DEFENDANTS’ EVIDENCE

11.	The Defendant relies on the following affidavits:

i.	Affidavit of Graeme William Hawkwins filed 3rd May 2022
ii.	Affidavit of Henry Torre filed 3rd May 2022

12.	Graem Hawkins is the General Manager and Director of the Defendant shipping company. He denies the Plaintiff’s allegations that the Defendant’s vessel was unseaworthy when it was sent to sea. He deposed the subject vessel is subject to regular rigorous inspections and surveys including random unannounced safety inspections by PNG National Maritime Safety Authority. He deposed that the vessel was seaworthy at the time when Plaintiff abandoned employment. Hawkins deposed that Plaintiff was employed for only few months, and he has been absent without leave several times and if plaintiff had genuine concerns those could have been discussed and addressed. Instead, the Plaintiff delivered a letter on 25th February 2017 and walked out the gate and abandoned his employment. As for Nasfund contributions, the Plaintiff was employed for two months as a permanent employee and the payments were made on 26th April 2022.

13.	Henry Torre is the Human Resources Executive of the Defendant. He deposed that the Plaintiff has been absent without leave on several occasions before 25th February 2017. On 25th February 2017, the Plaintiff delivered a letter to the Master of MV Lihir Destiny alleging the vessel was not seaworthy. After receiving the letter, directives were issued for the plaintiff to board the vessel as the concerns raised by the Plaintiff lacked merit. The vessel was seaworthy and operational. Despite the directives, the plaintiff refused to board the vessel, insisting that the vessel be made seaworthy before he could board and sail. He left the marine’s office, collected his personal stuff and walked out the gate and left. Plaintiff made no contact with their office despite various attempts to contact him. When it became apparent that the plaintiff had abandoned his job, instructions were issued for his termination. On 3rd March 2017, Plaintiff was terminated for being absent from duty in accordance with the terms of the Collective Employment Agreement which forms part of his contract of employment. 

14.	In respect of the various claims sought by the plaintiff, Torre deposed that: 

i.	the Plaintiff had been paid for the days he worked. 
ii.	the Plaintiff is not entitled to stevedoring and industrial allowances
iii.	the Plaintiff contributed to delayed payments by not turning up
iv.	Nasfund Contributions were paid in April 2022. 

Submissions of the Parties

15.	Plaintiff submitted that the summary termination of his employment was not warranted. He did not breach the terms of the contract of employment. It was harsh. He had good reasons for refusing to board as the vessel was not seaworthy and the Defendant breached its statutory obligations under Sections 94, 95 and 110 of the Merchant Shipping Act. 

16.	Counsel for the Defendants submitted that the summary termination was justified for serious misconduct. The plaintiff abandoned employment and was absent from duties without approval. That the provisions of the Merchant Shipping Act and the 2015 Crew award do not apply and form part of the Plaintiff’s contract of employment. Further the plaintiff was lawfully terminated and paid his entitlements.  

THE LAW

17.	The underlying law on termination of employment is discussed and settled in the cases; Malai-v-PNG Teachers Association (1992) PNG LR 568. The Central Bank of PNG v Tugiau (2009) SC1013, Apolonia Steven v Ram KC (2016), Ruhuwamo v PNG Ports Corporation (2019) N8021, Saki v Kangleon (2019) N 7860, Tawa v Mainland Holdings Limited (2020) N8727 Tjandranegara v Bsp Financial Group (2021) N9353 and Porawi v Agarwal (2023) N10118.

18.	The principles emanating from the various judgments of the above cases are:

i.	An employer has the right to hire and fire his employees at will, with or without reason.

ii.	If the termination is done in breach of the terms of the contract of employment, an employee will receive as damages the amount which he or she would have been entitled to receive if he or she had been lawfully terminated.

iii.	An employee has no right to be heard before termination unless his or her contract of employment says so.

iv.	The allegations of breach of constitutional rights do not arise in private employment relationships unless the employment contract expressly provides for the enforcement of such rights.

v.	Compensatory damages for defamation, anxiety and stress following unlawful termination shall not be awarded unless such claims are specifically pleaded with particularity and proved with appropriate evidence. (The Central Bank of PNG v Gabriel Tugia)

vi.	Where there is ambiguity in a written contract of employment, the provisions of the Employment Act apply.

19.	In Ruhuwamo v PNG Ports Corporation (2019) N8021, Thompson J states the law at paragraphs 17-19 of her judgment:
“17. 	It is well settled by a long line of case authorities in PNG, that an employer has the right to hire and fire his employees and does not have to give reasons for his decision. If this is done in breach of the terms of a contract, the measure of damages is what the employee would have received for his salary and other entitlements if the contract had been lawfully terminated. (see Jimmy Malai v PNG Teachers Association (1992) PNG LR 568, Paddy Fagon v Negiso Distributors Pty Ltd (1999) N 1900, New Britain Palm Oil Ltd v Vitus Sukuramu (2008) SC 946, and Porgera Joint Venture Manager Placer (PNG) Ltd v Robin Kami (2010) PGSC 11).
18. 	This is consistent with the provisions of the Employment Act. Under S 34, a contract of employment may be terminated at any time, with the length of notice being either as specified in the contract, or dependent on the length of the employment. If an employee has been employed for over five years, the length of notice shall be not less than four weeks. Under S 35, the termination may be by notice, or by payment in lieu of notice.
19. 	Under S 36, the employer may terminate without notice or payment in lieu, if the employee, inter alia, willfully disobeys a lawful and reasonable order or misconducts himself by an act of omission or commission that is inconsistent with the due and faithful discharge of his duties.”

20.	In Porawi v Agarwal(supra), in recognition of free will in employer and employee relations, the Court said this at paragraph 17 of the judgement:

“17.	The Employment Act sets the minimum standards, terms, and conditions of employment. It safeguards against abusive behavior and from forced labour. The Act promotes fair and free employment relationship between employer and employee. This is understandable. An employee should not be forced to serve an ungrateful master under oppressive working conditions against his will. The master, likewise, is under no obligation to keep in continuous employment a defiant and disloyal servant no matter how experienced or qualified or skillful he or she may be. The only obligation they have is keeping their end of the bargain on the terms they have agreed.  Where there is ambiguity or silence or unresolved matter arising out of the relationship, the Employment Act applies, which provides useful guide for resolving the matters in dispute.”

CONSIDERATION

21.	The Plaintiff commenced employment on probation for three months from 28th September 2016. On 11th November 2016 he was employed permanently under a written contract of employment. The full terms of employment were contained in the Collective Employee Agreement. On 3rd March 2017, the Plaintiff’s contract of employment was terminated. The reasons for the termination were:

i.	Abandonment of employment with the Defendant
ii.	Deserting the vessel

22.	According to Defendant, the conduct of the Plaintiff was a direct breach of his contract of employment and termination was justified under Section 36 of the Employment Act and Section 144 of the Merchant Shipping Act.

23.	The Plaintiff contended that he was justified under Sections 94 and 110 of the Merchant Shipping Act to refuse boarding because the ship was not seaworthy.

24.	Sections 94 and 110 of the Merchant Shipping Act are relevant and they read:

94.	SHIPS DEEMED TO BE UNSAFE.
(1) A ship shall be deemed to be unsafe where the Authority is of the opinion that, by reason of–
(a) the defective condition of the hull, machinery or equipment; or
(b) undermanning; or
(c) improper loading; or
(d) any other matter,
the ship is unfit to go to sea without danger to life having regard to the voyage which is proposed.
(2) In deeming a ship to be unsafe under Subsection (1) the Authority shall, where the ship is a Load Line Convention ship or a Safety Convention ship, have regard to the provisions of the Load Line Convention or of the Safety Convention, as the case may be.
.....
110.	AGREEMENTS.

(1) Where a crewman is employed there shall be an agreement between–
(a) the employer, or a person on his behalf; and
(b) the crewman.
(2) An agreement shall be–
(a) in writing; and
(b) executed by the parties to the agreement.
(3) An agreement may be with respect to employment in one or more ships and may be for–
(a) a particular period, not exceeding two years; or
(b) one or more particular voyages.
(4) In every agreement, notwithstanding any express provision in the agreement to the contrary, there is an implied term that the employer and the owner of the ship shall use all reasonable means to ensure that the ship in which the crewman is, or is to be, employed is seaworthy for, and during, any voyage which may take place during the currency of the agreement and any consent, or purported consent, by the crewman to waive the benefit of that implied term is void and of no effect.
.......

25.	The provisions of the MSA set out above can be construed and applied in this manner. Shipping industry and sailing on the open sea is a risky business on the part of the vessel owners and crew/workers. The legislation is in place to regulate the conduct of both shipping companies/operators and their crew to conduct themselves to provide a safe voyage. It is the duty of the operators and their workers to ensure that the vessels are seaworthy. Section 110 imposes an implied obligation in their employment agreement to use all reasonable means to ensure that the ship is in which the crew is employed is seaworthy. 

26.	In the present case, the Plaintiff contends that the vessel was unseaworthy and unsafe for sailing. The Plaintiff lists various matters in his letters dated 7th and 22nd January and 22nd and 25th February 2017 to the Master of the ship which he alleges ought to be attended to make the vessel seaworthy. The allegations are disputed by the defendant submitting that the vessel has always been seaworthy. 

27.	Under Section 94 of the MSA it is the Maritime Safety Authority that determines if a ship is unsafe and unfit to go to sea by reason of–(a) the defective condition of the hull, machinery or equipment; or (b) undermanning; or c) improper loading; or any other matter.It is not for the crew or ship owner to make that declaration. The matters highlighted by the Plaintiff may be relevant but not determinative in concluding that the vessel was unsafe to travel. There is no evidence of an incident report or an inspection report that would question the safety of the vessel. 

28.	I find there is insufficient evidence to conclude that the vessel MV Lihir Destiny was unsafe to sail on 25th February 2017.

29.	I note the submission of the Plaintiff that the steps he took to absent himself were reasonable as allowed by Section 160 of the MSA and did not amount to a breach of his employment contract. Section 160 reads as follows:

“160. ABSENCE OF CREWMAN FROM DUTY.
(1) In this section “crewman” means a crewman who is absent from a ship at a time when, under an agreement, he is required to be on board.
(2) Where a crewman proves–
(a) that his absence from a ship was due to–
(i) accident; or
(ii) mistake; or
(iii) some cause beyond his control; and
(b) that he took all reasonable precautions to avoid being absent,
his absence is not a breach of contract.
(3) Where, in an action for breach of contract arising from the absence of a crewman from a ship, a crewman fails to prove the matters referred to in Subsection (2), if special damages are–
(a) not claimed by his employer, his civil liability is limited to K10.00; and
(b) claimed by his employer, his civil liability is limited to K100.00.

30.	The Defendant, on the other hand, submitted that the Plaintiff was terminated for being absent from duty, a breach of section 36 of the Employment Act and Section 144 of the MSA. Section 144 of the MSA provides as follows:

144.	ABSENCE WITHOUT LEAVE.
Where–
(a) a crewman is absent without leave; and
(b) his absence is–
(i) due to his recklessness; or
(ii) deliberate and without reasonable cause; and
(c) a ship–
(i) is thereby delayed; or
(ii) goes to sea without him,
the crewman is guilty of an offence.”

31.	  The evidence shows the Plaintiff refused to board MV Lihir Destiny on 25th February 2017 after delivering a three (3) paged letter highlighting safety concerns. He then walked off. He now submits that he is excused under Section 160 of MSA. In my view Section 160 of the Act is not available. There is no evidence that he returned to work. Instead, the evidence shows he did not return to work, and he was uncontactable for some time. He just abandoned his job.  This entitled the Defendant to terminate the contract of employment for being absent from duty. I accept the Defendant’s submission that being absent from duty without approved leave is a serious misconduct justifying summary termination of employment. 

32.	For the foregoing reasons, I find the Plaintiff failed to prove his termination was unlawful.

Measure of Damages in case of unlawful termination

33.	  If I am wrong in my conclusions and that the termination is unlawful, even in that case, the Plaintiff shall only be liable for damages, and the measure of damages is what the employee would have received for his salary and other entitlements if the contract had been lawfully terminated. Again, the law is settled by the Supreme Court in Jimmy Malai v PNG Teachers Association (supra) and The Central Bank of PNG v Tugiau (supra) and numerous other cases in this jurisdiction.

34.	In The Central Bank of PNG v Tugiau(supra), the Supreme Court held that:

“21. When one comes to deal with an unlawfully terminated or dismissed employee's damages, the measure of damages is usually by reference to the period of notice for termination, for terminations prior to the agreed end of the contract. This follows on from the clear position at law that a contract can be terminated lawfully only in two ways prior to the agreed end of the contract. First is for cause or good reason in which case, no damages or compensation is payable. The second is on reasonable notice or pay in lieu of notice. That is why nearly all contracts of employment have provisions on termination in these terms”. 
 
35.	The evidence shows that Plaintiff was employed for just two months after the probation period. His final entitlements for the two months service were paid for on 15th March 2017. His Nasfund contribution of K 1515,30 was paid on 26th April 2017. The Defendant denies other claims for stevedoring allowances, for overtime and reimbursements for deductions. Besides, there is virtually no evidence of the Plaintiff raising this issue of non-payment with the Defendant immediately after the termination. Why wait for more than three (3) years to raise the issue in this proceeding. It defies logic and common sense.

CONCLUSION 

36.	The result is the Plaintiff has not proven his claim for unlawful termination of employment and for the outstanding entitlements. The Plaintiff’s proceedings shall be dismissed. 

Costs

37.	On costs, the Court has a discretion. Generally, a successful party would be entitled to costs. The Defendant has successfully defended the matter and therefore would be entitled to costs.

ORDERS

38.	The Court orders that:

a)	The Plaintiff’s proceedings are dismissed.
b)	The Plaintiff shall pay the Defendants’ costs to be taxed, if not agreed.
c)	Time be abridged.

Berem Lawyers: Lawyers for the Plaintiff 
Albright Lawyers: Lawyers for the Defendant