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Molisa v Republic of Vanuatu [1994] VULawRp 4; [1980-1994] Van LR 722 (19 April 1994)

[1980-1994] Van LR 722

IN THE SUPREME COURT OF
THE REPUBLIC OF VANUATU

CIVIL JURISDICTION

Civil Case No. 155 of 1993

IN THE MATTER OF:

THE EMPLOYMENT ACT CAP. 160

AND:

IN THE MATTER OF:

THE GOVERNMENT OF THE REPUBLIC OF VANUATU

AND:

IN THE MATTER OF:

THE APPLICATION OF GRACE MERA MOLISA
FOR A DECLARATION AS TO SEVERANCE PAY ENTITLEMENT

Coram: Downing J

Ms Bothmann Barlow for applicant
Mr O Saksak for respondent

JUDGMENT

[EMPLOYMENT - STATUTES - severance pay - consideration of "continuous employment" - implied repeal of statute]

This matter comes before the Court by way of Originating Summons. The Applicant, Grace Mera Molisa claims to be entitled to certain payments by way of severance pay from the Government of the Republic of Vanuatu, which entitlement arose from her termination of employment in 1991.

The Court is specifically asked to determine the following questions:

1. The meaning of the words "continuous employment" as used in Section 54(1) of the Employment Act Cap 160 (as amended).
2. Whether the applicant has been "in continuous employment" in terms of Cap. 160 since 1st January 1979.
3. Whether the applicant is entitled to severance allowance as calculated from the commencement of her employment in January 1979 until her termination on 16th October 1990, but if not, from what date such severance allowance should be calculated.
4. Any other questions that may occur from the matters arising herein.

I set out below the relevant sections of the Legislation.

Section 54 of the Employment Act provides:

"(1) Subject to Section 55, where an employee has been in continuous employment for a period of not less than 12 months with an employer and the employer terminates his employment or retires him on or after his reaching the age of 55, the employer shall pay severance allowance to the employee.
(2) For the purposes of subsection (1):

• (a) an employee who works for his employer on 4 or more days in any week shall be deemed, in respect of that week, to have been in continuous employment;
• (b) no employee shall be held to have ceased to be in continuous employment of an employer by reason of his participation in a strike which is not unlawful;
• (c) where an employee ceases to be in employment of one employer and enters the employment of another under section 55(4) his employment by the first and second employer shall be deemed to be continuous employment.

(3) For the purposes of Section 308 of the Companies Act, Cap 191 severance pay shall be deemed to be wages."

Section 55(3) of the Employment Act provides:

"(3) Where:
Employment by a body corporate ceases on the dissolution of that body and the employee is employed or offered employment by some other corporate body in accordance with an enactment or a scheme of reconstruction forthwith after the dissolution;
(4) Where an employee to whom an offer is made in any of the circumstances specified in subsection (3) accepts the offer, he shall be deemed to have entered the employment of the person by whom the offer is made forthwith upon the cessation of his employment with the first employer.
(5) Where an employee is deemed to be in continuous employment in accordance with Section 54(2) and that continuous employment is terminated in circumstances in which severance allowance is payable, the employer in whose service the employee was employed immediately before the termination shall be deemed to be the employer during the whole of the period and shall be liable to pay severance allowance accordingly."

The chronology of employment which is urged upon the Court by Mrs Bothmann Barlow, Counsel for the Applicant, is as follows:

01/01/1979 The Applicant was appointed Second Secretary to the Minister for Social Affairs, Father Walter Lini.

30/07/1980 The Applicant was appointed as Second Secretary to the Prime Minister, Father Walter Lini.

22/12/1987 The Applicant was promoted to Private Secretary to the Prime Minister.

16/10/1990 The Applicant's employment was terminated.

It has been conceded by both parties that the employment of the Applicant was as a political adviser.

In addition to the questions set out in the Originating Summons in this matter, there is a threshold question to be determined. It is contended by the Applicant that she was employed by the Public Service and the Employment Act applied to her employment as such. See Section 76 of the Employment Act. Contrary to that contention the Respondent maintains through its counsel, Mr Saksak, that as the Applicant held positions that were subject to the provisions of the Official Salaries Act, then the Official Salaries Act covered the field and the Employment Act had no bearing upon the payments made to the Applicant in respect of the payment of amounts that were covered by the Official Salaries Act.

The purpose of the Employment Act is to regulate employment and to imply conditions into all contracts of employment in Vanuatu. Such conditions include remuneration, hours of work, annual and sick leave, severance allowance and the repatriation of employees to home Islands to name only some of the implied conditions.

The Employment Act by Section 76 provides:

"76(1) Except as provided in subsection (3) the provisions of this Act shall apply in relation to public servants and to the Government and any other public authority in Vanuatu subject to the modification set out in subsection (2).
(2) The modifications mentioned in subsection (1) are as follows:

• (a) The reference in this Act to the Minister shall be taken as references to the Minister responsible for matters relating to the Public Service;
• (b) The functions of the Labour Advisory Board shall be exercised by the Public Service Commission;
• (c) Except in Section 65, the powers and duties of the Commissioner of Labour shall rest in the Director of the Public Service Department;
• (d) The powers and duties of a Labour Officer shall rest in the Director of the Public Service Department or an officer appointed by him for the purpose;
• (e) Section 67, 72, 73 and 74 shall not apply.

(3) Nothing contained in this Act shall apply in relation to members of the armed forces, police force or prison service."

There is no doubt that public servants have the benefit of the provisions of the Employment Act.

The Applicant was in my view clearly a Public Servant.

A guide to the definition of the expression "public servant" is provided by the Public Service Act Cap. 129 which defines in Section 1, "Public Service" as meaning "the Service of the Republic in any capacity other than as a judge, or member of the armed services, police or teaching services".

In respect of Public Servants who are political advisers, one must look at Chapter 9 of the Constitution which makes provision in relation to the Public Service of the Republic of Vanuatu.

Article 57(5) provides:

"For as long as their posts exist, public servants shall not be removed from their posts except in accordance with the Constitution".

Article 58(1) provides:

"The rule for security of tenure provided for in Article 57(5) shall not apply to the personal political advisers of the Prime Minister and Ministers".

The Applicant was a public servant but without the benefits of tenure as provided for in Article 57(5) of the Constitution and would in the normal course be entitled to the benefits provided for pursuant to the provisions of the Employment Act.

The benefits that a person appointed under the provisions of the Official Salaries Act receives are substantially greater than those received by all other public servants.

In 1990 the Official Salaries Act provided by Part 1 of the Schedule for the quantum of salary to be paid and in the case of the Applicant, whether she was employed as a Second Political Secretary or as the Private Secretary to the Prime Minister, those additional benefits are set forth in paragraphs B, D, E, G, I and J in Part 2 of the Schedule to the Act.

These paragraphs provide for:

(i) by paragraph B, the provision of a "furnished house at the rental fixed by Government";
(ii) by paragraph D, "a child allowance of VT 1.200 a month per child";
(iii) by paragraph E, "a gratuity payable at the rate of one-twelfth of the annual salary for each year during which a person holds the office and pro-rata for each uncompleted year";
(iv) by paragraph G, "annual leave calculated at the rate of one and three quarter working days for every month of service"; and
(v) by paragraph I, "the payment of re-imbursement of the actual cost of transport between Port Vila and the home island and the return journey by the most direct route on home leave".

The Employment Act is an Act of general application, that is it is applied generally to all contracts of employment whether they are in the public service or in the private sector. The Official Salaries Act applies to specified people and makes special provision in respect of some of their terms of employment. This case raises squarely a possible conflict between the Act of general application and that of specific application. Thus does the payment of the gratuity to the Applicant preclude her from receiving a severance allowance under the provisions of the Employment Act? Is the gratuity under the Official Salaries Act to be equated with the severance allowance as provided for pursuant to Section 54 of the Employment Act?

Before answering these questions it is useful to consider the legislative history of the Official Salaries Act.

The Official Salaries Act was Act number 11 of 1983 and came into force on the 1st of June 1983. The Employment Act Cap. 160 was act number 1 of 1983 and came into force on the 30th May 1983.

As originally enacted the Official Salaries Act "Class E" (which is the relevant clause) - in Part 2 of the schedule provided:

"A severance allowance payable at the rate of one twelfth of the annual salary for each year during which a person holds the office and pro-rata for each uncompleted year."

On the 18th June 1984 by Act. No. 23 of 1984 the word "gratuity" was substituted for the words "severance allowance" under "class E" in part 2 of the schedule. Thus the clause then read:

"A gratuity payable at the rate of one twelfth of the annual salary for each year during which the person holds the office and pro-rata for each uncompleted year".

By order no. 11 of 1991 a further amendment occurred to "class E" so that it read:

"(1) A gratuity payable at the rate of one twelfth of the annual salary, multiplied by 2 for each year during which a person holds the office and pro-rata for each uncompleted year back dated to 11th December 1987.
(2) Gratuity payable for any period prior to 11 December 1987 shall be at the rate of one twelfth of the annual salary for each year during which a person holds the office and pro-rata for each uncompleted year."

In my view it is clear that the payment to be made under Official Salaries Act is in the nature of a severance allowance. Like the severance allowance as provided for under the Employment Act it is calculated with reference to the period of employment in whole years and fractions thereof. The only difference between the severance allowance and the gratuity is that it would appear that in practice the gratuity is paid on an annual basis whereas severance allowance is paid at the termination of the employment. The history of the payment paragraph E of Part 2 to the Official Salaries Act provides support to this view.

I am further supported in that view by the fact that the Employment Act, being a general act is qualified in respect of specifically named posts by the Official Salaries Act. In so far as there is any inconsistency between the Acts and the rights given, one must consider whether there is an implied repeal of the Employment Act provisions in respect of those people who are covered by the Official Salaries Act.

It is generally said that repeal by implication is not something which the Courts will easily infer as it is generally presumed that Parliament would not intend such to occur - see R v. Holliday [1917] UKHL 1; [1917] A.C. 260 at 305 per Lord Shaw of Dunfermline. However if it is not possible to reconcile the provisions of two statutes the only inference that can reasonably be drawn is that the provision of the first statute should cease to have their full effect if they are contrary in effect to a later statute. The maxim "later laws abrogate prior contrary laws" would thus apply.

In the case of The India (1864) Brown & Lush 221 at 224, it was stated:

"The prior statute would be repealed by implication if its provisions were wholly incompatible with a subsequent one, or if the two statutes together would lead to wholly absurd consequences, or if the entire subject matter were taken away by the subsequent statute."

The learned authors of Halsbury's Laws of England, Fourth Edition Vol. 4 at p 607 have stated the rule in a slightly more limited way as:

"... that one provision repeals another by implication if, but only if, it is so inconsistent with or repugnant to the other that the two are incapable of standing together. If it is reasonably possible so to construe the provision as to give effect to both, that must be done and their reconciliation must in particular be attempted if the later statute provides for its construction as one with the earlier, thereby indicating that Parliament regarded them as compatible."

In this matter is it clearly not possible to read the Employment Act as a whole, with the Official Salaries Act. The basic inconsistencies are in my view not capable of reconciliation, as the Official Salaries Act provided clearly greater benefits for identifiable posts within the service of the Republic of Vanuatu and Government. It is not my view that Parliament intended that those with the specifically nominated posts should be paid severance pay twice.

The general provisions of the Employment Act do not apply in the situation where the special provisions of the Official Salaries Act apply dealing with effectively the same subject matter. The effect of interpreting otherwise would be to read the provisions of a general enactment in such a way as to neutralise the provisions of a special enactment. See Goodwin v. Phillips [1908] HCA 55; [1908] 7 CLR 1 at 17 and Halsbury's Laws of England, Fourth Edition, Vol. 44 at page 60.

I thus conclude that the provisions of the Official Salaries Act override the general provisions of the Employment Act and that the Applicant has no entitlement to the payment of severance pay for that period during which she was in receipt of the benefits payable pursuant to the Official Salaries Act.

In my view she is however clearly entitled to payment of severance pay for the period from her first employment with the Government until her employment pursuant to the provisions of the Official Salaries Act.

I have been informed by Counsel before the Court that the First Respondent has agreed to pay severance pay up to 1987. Thus I do not have to determine any entitlement prior to 1987. The Applicant is entitled to be paid the gratuity after that date until the termination of her employment under the Official Salaries Act. I have no sworn evidence before me as to whether the Applicant has been paid the gratuity or not although in exhibit 13 to the Affidavit of Mrs Bothmann Barlow sworn 31st December 1983 it is asserted that the payment has been made.

On the basis of the finding on the threshold point the Court should not answer the questions posed in the Originating Summons as they relate to the Employment Act, which I have determined is not relevant to the real question in issue. It would be inappropriate for the Court to express an opinion on what is now on academic issue.

Order: That the Originating Summons dated the 21st December 1993 be dismissed.

I am told that this is a test case. It is inappropriate in such circumstances that there be an order for costs against the Applicant. In such cases it is often the practice in fact for the Respondent to assist the Applicant in the payment of costs. I do not know if there is such an arrangement in this case.

19 April 1994

ROWAN M. DOWNING
JUDGE