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Naunga v Telecom Vanuatu Limited [2010] VUSC 175; Civil Case 148 of 2009 (11 November 2010)

IN THE SUPREME COURT OF THE REPUBLIC OF VANUATU
(Civil Jurisdiction)

Civil Case No. 148 of 2009

BETWEEN:

DAVID NAUNGA, SERAH KEKEI, PAUL WILLIE, TOM HAKWA, JONAS KAPUS, BERNABAS BOE, SAM GRAFITY, RICHARD WILFRED RORY, RUEBEN MARK, JAMES AVOCK and BERNABAS ARU
Claimants

AND:

GRAHAM LELE, NESLINE TOA and BLAISE TEMAKON
Second Claimants

AND:

TELECOM VANUATU LIMITED
Defendant

Coram: Justice N.R Dawson

Counsel: Mr. S. Stephens for the Claimants
Mr M. Hurley & Mr. A. Kalmet for the Defendant

Date of Hearing: 4th November 2010
Date of Decision: 11th November 2010

DECISION

1. On the 8 October this Court made on Order pursuant to Rule 12.4 for a hearing of the following preliminary issues:
   
   1. Was the Defendant entitled to terminate the First and Second Claimants' employment on 26 February 2009 pursuant to s.49 of the Employment Act [CAP 160] without notice?
      
   2. Has the Defendant paid to the Claimant all of their lawful entitlements?
      

Background

2. On the 18 February 2009, the Defendant wrote to the Acting Commissioner of Labour confirming that it would be releasing "some 25 staff by end February, 2009." It is a requirement under s.67 Employment Act [CAP 160] ("the Act") that 30 days notice be given to the Commissioner if an employer intend "dismiss as redundant ten or more employees". It is accepted by the parties that the Acting Commissioner received this letter on 19 February 2009. On the 28 February 2009, the Defendant then terminated the employment of the Claimants. The termination took effect immediately with the Defendant paying all salaries due to the Claimants for a further 3 months from 28 February 2009.
   
3. During the hearing, Claimants' counsel confirmed that the Defendant had paid out all salary entitlements, outstanding leave, all overtime payments and severance payments. Claimants' counsel also advised the Court that the claims were now limited to:
   
   1. Remuneration and other employment entitlements for 21 days, representing the short notice given to the Commissioner
      
   2. Repatriation costs pursuant to s.58 of the Act.
      
   100. Annual bonuses.
        
   4. VNPF contributions they say were not paid for all Claimants.
      

The Law

4. The commencement point for the Issue 1 is s.49 of the Act, that says:
   

"49. Notice of termination of contract

(1) A contract of employment for an unspecified period of time shall terminate on the expiry of notice given by either party to the other of his intention to terminate the contract.

(2) Notice may be verbal or written, and, subject to subsection (3), may be given at any time.

(3) The length of notice to be given under subsection (1) –

(a) where the employee has been in continuous employment with the same employer for not less than 3 years, shall be not less than 3 months;

(b) in every other case –

(i) where the employee is remunerated at intervals of not less than 14 days, shall be not less than 14 days before the end of the month in which the notice is given;

(ii) where the employee is remunerated at intervals of less than 14 days, shall be at least equal to the interval.

(4) Notice of termination need not be given if the employer pays the employee the full remuneration for the appropriate period of notice specified in subsection (3)."

5. Also relevant to Issue 1 is s.67 which says:-
   

"67. Duty of employer to notify Commissioner of certain redundancies

(1) Any employer proposing to dismiss as redundant ten or more employees at 1 establishment within a period of 30 days or less shall notify the Commissioner in writing of his proposal at least 30 days before the first of those dismissals is proposed to take place.

(2) At any time after being notified under subsection (1) the Commissioner may by written notice, require the employer to give him such further information as may be specified in that notice.

(3) If in any case there are any special circumstances rendering it not reasonably practicable to comply with the requirements of this section, the employer shall take such steps towards compliance with such requirements as are reasonably practicable in those circumstances."

6. For Issue 2, s.58 is relevant for the claim for repatriation allowances and it says;
   

"58. Employee's right to repatriation

(1) Subject to section 63 every employee whose ordinary place of residence is more than 50 kilometres away from his place of employment and who has been brought to the place of employment by the employer or his agent shall have the right to be repatriated at the expense of the employer to his place of origin or engagement, whichever is nearer to the place of employment, in the following cases –

(a) on the expiry of the term of contract;

(b) in the case of a termination of a contract when the employee has become entitled to a paid annual leave;

(c) in the case of a breach of contract or a serious offence committed by the employer;

(d) in the case of the termination of a contract due to the inability of the employee to complete the contract owing to sickness or accident."

Issue 1

7. The Claimants advised the Court that it is now accepted by them that the Defendant was entitled to terminate their employment, pursuant to s.49. However, they submit that as the Defendant was supposed to give 30 days notice to the Commissioner of the impending redundancy which they did not, then the termination under s.49 could not occur until the expiry of the 30 day period.
   
8. The Defendant accepts that it did not wait out the 30 day period of notice to the Commissioner prior to terminating the employment of the Claimants. The Defendant also accepts that no special circumstances existed pursuant to s.67 (3) that would have permitted it to terminate the Claimants' employment any earlier. The Defendant submits that s.67 is procedural in nature and the Act does not provide for any consequences for its non-observance and nor does it invalidate any termination. The Defendant refer to the decision of Kalangis v. Vanuatu Internal Air Service (Vanair) Ltd [2001] VUSC 31 where Coventry J. found:
   

"In dismissing him they have breached a procedural requirement. In the particular circumstance of this case I do not find that invalidated the termination and further any damages for that breach, would be derisory."

9. The Defendant submits that it is entitled to rely on the termination of the Claimants' employment pursuant to s.49.
   
10. It is correct that S. 67 does not provide for any consequence should it be breached. However the intention of Parliament expressed in s.67 is clear, that no terminations should take place until the expiry of that 30 day period. The Defendant has profited itself by terminating the Claimants' employment 21 days earlier then it should have done. If the Defendant had properly observed the provisions of s.67, all the Claimants would have been in employment for 21 days longer and received their salaries and other employment entitlements for this time. The Defendant cannot profit by its non-observance of it duty as an employer as required by s.67, the termination of the Claimants' employment should not have occurred until the expiry of the 30 day period and the Claimants are entitled to a further 21 days salary and employment entitlements.
    
11. Kalangis can be distinguished. In that case the Claimant had dismissed for serious misconduct and Coventry J. found that the Defendant was entitled to dismiss the plaintiff and "given the seriousness and persistence of the misconduct, once found, in this case there can only have been one outcome." In the present case, the Claimants' employment was not terminated early due to misconduct on their part, it was terminated early due to the Defendant failing to observe the 30 day time period is s.67. Employers should know that they cannot deliberately or carelessly overlook the time period in s.67 and profit from that oversight.
    

Issue 2

12. The Claimants submit that they are entitled to repatriation costs under s.58. No evidence has been produced to show that any or all of the Claimants qualify for this allowance under s.58. No receipt has been produced in evidence to show any actual costs of repatriation. The onus of proof is on the Claimants and they have failed to prove this part of their claim to a standard of proof of the balance of probability being in their favour.
    
13. The Claimants submit that it was the usual practice of the Defendant to pay annual bonuses and that this should also have been paid to them on termination.
    
14. The Defendant has produced in evidence a copy of its "Managing For High Performance" document which allowed for bonuses to be paid for the period from 1 April 2008 to 31 March 2009. It also produced a schedule of bonus payments made pursuant to that document to the Claimants on 17 December 2008.
    
15. The Claimants submit the payments made on 17 December 2008 were for only half the bonuses they were to receive. They have not produced any evidence to support that submission. The document itself states that:
    

"As a result of the employee's final performance appraisal a bonus payment may be applicable.

Both the merit-based salary award and merit-based bonus payment are at the discretion of the company and the decision of the CEO will be final."

16. The Claimants have failed to established any arrangement existed for further bonus payments to be made and the document itself makes it clear that the awarding of any bonuses are the discretion of the company and therefore this part of the claim must fail.
    
17. Some Claimants submits that not all the VNPF contributions payable on their behalf by the Defendant have been paid. They accept that they have not been to the VNPF to confirm that is the case. The Defendant has produced a spread sheet in evidence showing a detailed break down of salaries, and other entitlements paid including the VNPF contributions. Again the Claimants have not established this claim to the requisite standards of proof, and it must fail.
    

Decision

18. The Defendant is to pay the Claimants on amount equivalent to an extra 21 days of employment, including salaries and all normal employment entitlements for that period. The remaining claims are dismissed. Either party has leave to bring this matter back to Court for resolution of the actual amount payable if the parties are unable to agree.
    
19. Both parties have indicated to the Court at the end of the hearing that the resolution by the Court of the preliminary issues would conclude this claim.
    

Costs

20. It would be usual in a case of this type to award costs to the Claimants on a standard basis. However, in this case there has been a large amount of over claiming by the Claimants for amounts not supported in evidence to which the Defendant was required to respond. Also the issue pursuant to s.67 was not raised until very late in these proceedings. It is therefore inappropriate to award full costs to the Claimants when a better focus by them on the actual issues would have lead to a speedier resolution of their claims.
    
21. The Defendant will therefore be responsible for the payment of its own costs and half of the Claimants' costs on a standard basis. These costs shall be as agreed by the parties, or failing agreement, as taxed by this Court.
    

Dated at Port Vila, this 11th day of November, 2010

BY THE COURT

N.R. DAWSON
Judge