N11360
PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

WS NO. 377 OF 2018

BETWEEN:
BILLY GILMAI
Plaintiff

AND
BRAD FURNESS
First Defendant

AND
MAXAM PNG LIMITED
Second Defendant

LAE: DOWA J
5 , 13 SEPTEMBER 2022; 7 JULY 2025
 				      
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
Malai-v-PNG Teachers Association [1992] PNGLR 568
Ruhuwamo v PNG Ports Corporation (2019) N8021
The Central Bank of PNG v Tugiau (2009) SC1013
Apolonia Steven v Ram KC (2016) N6577 
Ruhuwamo v PNG Ports Corporation (2019) N8021
 Saki v Kangleon (2019) N7860
 Tawa v Mainland Holdings Limited (2020) N8727
Tjandranegara v Bsp Financial Group (2021) N9353 
 Porawi v Agarwal (2023) N10118

Counsel
B Gilmai, plaintiff in person   
K Keindip, for the defendant

DECISION 

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

3.	 The Plaintiff was employed under a written contract of employment by the second Defendant as Operator/Mechanic at Hidden Gold Mine, in Morobe Province. The Plaintiff commenced employment on 16th March 2010. On 15th March 2015, the Plaintiff was terminated from employment by the first Defendant. The reasons for termination were for ongoing unacceptable aggressive behavior towards subordinates and fellow workers and management personnel which was a breach of contract of employment.

4.	The Plaintiff alleges the termination was unlawful because: i) there was no good cause, ii) the first Defendant did not have authority, iii) the first Defendant failed to impose a penalty less severe than termination considering the Plaintiff’s faithful loyal service.

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

6.	The Defendants deny 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

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

ISSUES

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

THE PLAINTIFF’S EVIDENCE

9.	The Plaintiff relies on his own affidavit filed 29th July 2022. This is the summary of his evidence.  The plaintiff commenced employment with the second Defendant at Hidden Valley Gold Mine on 16th March 2010 under a written contract as Operator/Mechanic. The contract period was 12 months renewable every 12 months. He was then promoted to Supervisor reporting to the Project Manager.

10.	On 15th March 2015, Plaintiff was served with a letter of termination of employment from the first defendant, Brad Furness, the Site Manager. The plaintiff was told to leave the site, and he returned to Lae, the place of recruitment. The plaintiff deposed that he is a specialist in heavy mining equipment but was treated harshly by the first defendant without any good reasons. The disciplinary issues were not brought to the attention of the Human Resources Department to be dealt with. The plaintiff deposed further that the termination was grossly unfair, discriminatory, and illegal. He said the Defendants failed to consider his loyal service to the company for the last five years without any disciplinary issues.

11.	Finally, the plaintiff said his final entitlements for the last five years of continuous service and payments in lieu of notice was not paid, which is calculated to be in   the sum of K 63,254.82.

12.	In response to the defendant’s assertion that he was paid his final entitlement of K 12,435.51, Plaintiff said the payment was not his final entitlement, but accumulated payroll sum paid through normal salaries to all staff for services rendered between January and March 2015.

THE DEFENDANTS’ EVIDENCE

13.	The Defendants rely on the affidavit of Tim McLeod filed 8th November 2022.  Mcleod deposed in his affidavit that the Plaintiff was terminated for misconduct, a breach of his contract of employment. He deposed that the plaintiff was terminated for unacceptable behavior towards his subordinates and other employees of the second defendant. The plaintiff was acting aggressively, using verbal insults and throwing tools and equipment within the workshop and punching walls and boards in the workshop on 14th March 2015. His behaviour has been the same since the day before and it posed a threat to the employees and properties of the second defendant. The Plaintiff has been warned of such behaviour previously. Despite the warnings his conduct has remained unchanged. 

14.	The Plaintiff has been made aware of the terms of his contract of employment and the disciplinary policy and procedures under the Reference Guide. Mcleod deposed where an employees conduct falls short of the required standards, they may be subject to disciplinary process, starting from verbal warning to summary dismissal. The Plaintiffs conduct fell within the serious range resulting in summary dismissal which was provided in paragraph 11.3 of the employment contract.

15.	Mcleod deposed that the plaintiff was paid K 12,435,51 for his entitlements including money in lieu of notice of five (5) weeks and nothing is outstanding.  

Submissions of the Parties
16.	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 was not given any warnings in the past. No reasons were given for the termination. The termination was orchestrated by the first defendant without any input from the Head Office. That he was not paid his entitlements and properly compensated for the continuous loyal service for five (5) years.

17.	Counsel for the Defendants submits that the summary termination was justified for serious misconduct. The plaintiff was behaving in an angry and aggressive manner to his fellow employees previously. He was warned. Despite the warnings he went on a rage again on 14th March 2015 by hurling verbal insults to fellow employees. This conduct is a serious breach of clause 11.3 of the employment contract which warrants summary termination under the second Defendant’s Disciplinary Policy at page 19 of the Reference Guide.

18.	 The Defendants submit further that, even if the termination is found to be unlawful, the Defendants are not liable to pay damages as the Plaintiff has been paid his entitlements including money in lieu of notice.

THE LAW

19.	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) N6577, Ruhuwamo v PNG Ports Corporation (2019) N8021, Saki v Kangleon (2019) N7860, Tawa v Mainland Holdings Limited (2020) N8727, Tjandranegara v Bsp Financial Group (2021) N9353 and Porawi v Agarwal (2023) N10118.

20.	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.

  21.	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.”

22.	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

23.	The Plaintiff commenced employment with the second Defendant on 16th March 2010 for twelve months which were continuously renewed for a further twelve months. On 15th March 2015, the Plaintiff’s contract of employment was terminated by the first defendant. The reason for the termination was for misconduct. The particulars for misconduct are that he went on a rage on 14th March 2015 by hurling verbal insults to fellow employees where the fellow employees were intimidated and they felt threatened. The letter of termination states that in previous occasions, the Plaintiff acted aggressively and intimidated fellow workers, throwing things and punching walls and boards. He was warned. Despite the warnings he went on a rage again on 14th March 2015 resulting in the summary dismissal. The Plaintiff invoked paragraph 11.3 of the contract of employment to summarily dismiss the Plaintiff.

24.	The Plaintiff denied the allegations generally. The Plaintiff did not specifically refute the facts of aggression and misconduct spelt out in the letter of termination dated 15th March 2015, the evidence of Tim Mcleod and the statement of Defence filed by the Defendants.

25.	It is open for the Court to accept and find that the Plaintiff was terminated for repeated aggressive behaviour towards his fellow employees causing fear for the safety of the workers. Clause 11.3 of the contract of employment provides that the Employer may terminate the employment in writing without any period of notice or pay in lieu of notice if they have reasonable basis to suspect that the Plaintiff has engaged in misconduct. Examples of conduct justifying summary/instant dismissal in the disciplinary policy forming part of the contract of employment are set out in page 19 of the Reference Guide which are:

i.	Dangerous games or pranks that may lead to personal injury or damage to property
ii.	Using offensive language or threatening physical violence
iii.	Supplying false or misleading information when applying for a position or during employment.

26.	In the present case, the unchallenged evidence presented by the defendants show the Plaintiff was terminated for aggressive behaviour towards fellow workers whereby the fellow employees felt personally threatened. I find the defendants had good reasons to terminate the contract of employment. On the other hand, the Plaintiff has not proved with credible evidence that the termination was wrongful. I find the Defendants are not liable and shall dismiss the Plaintiff’s proceedings.

Measure of Damages in case of unlawful termination

27.	  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.

28.	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”. 
 
29.	The evidence shows that Plaintiff has been paid his entitlements although he disputes that. The plaintiff was served the letter of termination on 15th March 2015. In the termination letter the plaintiff was advised that he would be paid his entitlements later in the week. On 25th March 2015, the plaintiff was paid K 12,435.51. Although the plaintiff submitted that this payment was progressive payment from January to March 2015, the statement shows part of the monies were for annual leave. Besides, there is virtually no evidence of the Plaintiff raising this issue of non-payment with the second Defendant immediately after the termination. Why wait for three (3) years to raise the issue in this proceeding. It defies logic and common sense. I am not satisfied that the Plaintiff was not paid his entitlements immediately after termination.

Conclusion 

30.	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

31.	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

32.     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.

Lawyers for the defendant: Fiocco & Nutley