Balcurrun Bundhoo
Appellant
v.
H.K.S. Jankee and 32 Others
Respondents
FROM
THE COURT OF APPEAL OF MAURITIUS
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JUDGMENT OF THE LORDS OF THE JUDICIAL
COMMITTEE OF THE PRIVY COUNCIL,
Delivered the 5th July 2000
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Present at the hearing:-
Lord Browne-Wilkinson
Lord Hope of Craighead
Lord Clyde
Lord Hobhouse of Woodborough
Lord Millett
[Delivered by Lord Millett]
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This is an appeal from a judgment of the Supreme Court of Mauritius given on 5th July 1994 affirming a judgment of the Industrial Court which awarded the respondents a total of Rs748,888.50 as wages in lieu of notice and severance allowance for unjustified dismissal at the punitive rate with interest and costs.
The respondents are 33 of 39 teachers employed by the Stratford College who were summarily dismissed by the appellant, the owner and manager of the College, in January 1981. The Permanent Secretary of the Ministry of Labour and Industrial Relations brought proceedings on their behalf. Following an abortive trial in 1986 a retrial was ordered and began in 1990. In the course of the retrial six of the teachers were unable to pursue their claims and these were either non-suited or struck out. The remaining teachers eventually succeeded in their claim and obtained an award of severance pay at six times the normal rate and three months’ wages in lieu of notice.
The appellant’s case throughout was that he was justified in summarily dismissing the respondents for gross misconduct. All the respondents received letters of dismissal dated 13th January 1981. They fell into three distinct groups. The first group consisted of teachers who were dismissed for acts of gross misconduct committed on 5th January 1981. The second group were dismissed for acts of serious misconduct on the 8th and 9th January 1981. The third group were dismissed because they wrote to various public authorities on 13th January 1981 making what the appellant considered to be false allegations against him. The appellant claimed that he had orally dismissed the first group on the 5th January 1981 and he had merely confirmed their dismissal by the letter of the 13th January 1981, but the Magistrate rejected his evidence. He found that all the respondents were dismissed on the 13th. January 1981, and that documentary evidence which the appellant tendered in support of his version of events was fabricated. He also found that all the respondents’ dismissals were unjustified. His findings of fact were upheld by the Supreme Court.
In order to understand the appellant’s contentions in the present appeal, their Lordships must refer to two local statutes, the Labour Act of 1975 and the Private Secondary Schools Authority Act of 1976 as amended in 1978 (“the PSSA”). Section 3 of the Labour Act provides that:-
“Subject to any provision to the contrary in any other enactment, this Act shall apply to every agreement.”
This is not as wide as it might appear at first sight, since the word “agreement” is defined in the Act to mean “a contract of employment”. The word “employer” is defined as:-
“the person responsible for the payment of remuneration to a worker.”
Section 32 of the Labour Act deals with unjustified termination of agreement. It provides:-
“32. (1) No employer shall dismiss a worker –
…
(b) for alleged misconduct unless –
(i) he cannot in good faith take any other course; and
(ii) the dismissal is effected within 7 days of -
(A) where the misconduct is the subject of a hearing under subsection (2), the completion of the hearing;
(B) …
(C) in every other case, the day on which the employer becomes aware of the misconduct.
(2)(a) No employer shall dismiss a worker unless he has afforded a worker an opportunity to answer any charges made against him and any dismissal made in contravention of this paragraph shall be deemed to be an unjustified dismissal …”
Section 34 of the Labour Act entitles a worker who has been in continuous employment by the same employer for a period of 12 months or more to severance allowance on (inter alia) the termination of his employment. Where the termination of his employment is found to have been unjustified section 36(7) entitles him to severance pay at six times the normal rate. Section 36(9) authorises the Court to order the employer to pay interest at a rate not exceeding 12% from the date of the termination of the agreement to the date of payment.
The PSSA established the Private Secondary Schools Authority (“the Authority”). Its objects included ensuring that the terms and conditions of staff in secondary schools were fair and reasonable and the payment of grants properly accruing to secondary schools. Section 15 of the PSSA requires the Authority to pay to every secondary school a grant the amount of which was to be determined in accordance with specified criteria. Section 16 provides that the authority is to deduct from the amount of the grant payable to the school the amount of the emoluments payable by the school to its staff and pay such emoluments directly to the staff concerned. Section 16(4) provides that:-
“Notwithstanding any other enactment, where the emoluments of a member of the staff are paid directly to him by the Authority:-
(a) the Authority shall not be regarded as the employer of that person by reason of the payment of the emoluments to him;
(b) the secondary school shall always remain the employer of that person and shall, in relation to that person, be responsible for matters of promotion and supervision; …
(d) matters of discipline and dismissal shall be within the jurisdiction of a Board appointed by the Minister and consisting of -
(i) a representative of the Private Secondary Schools Authority;
(ii) a representative of the employer; and
(iii) a representative of the employee.”
Their Lordships are given to understand that before 1985 a Board charged with disciplinary matters and dismissal was established ad hoc for each case, but that since then a standing Board has been established for this purpose.
Regulation 3 of the Private Secondary Schools Authority (Board of Discipline) Regulations 1988 provides that no member of the staff shall be subjected to disciplinary measures or be dismissed except after having been afforded an opportunity of appearing before the Board and giving such explanations or defence as he may wish to give in relation to a complaint made against him. Regulation 8 provides that on receipt of the decision of the Board the Manager of the school concerned should give effect to the sanction determined by the Board but without prejudice to the legal liability of the Manager as employer. The Regulations were not in force at any time material to these appeals, but they give effect to what their Lordships take to be the intention of the PSSA that in the case of a member of the staff of a private secondary school any hearing under section 32(2)(a) of the Labour Act should take place before the Board.
In respect of all 33 respondents the Magistrate found that their dismissal was unjustified. In relation to the first group, he found that they were dismissed on the 13th January 1981, that is to say more than 7 days after the appellant became aware of the misconduct on which he relied, in breach of section 32(1)(b)(ii) of the Labour Act. He found that none of the respondents had been afforded an opportunity to answer the charges made against them, in breach of section 32(2)(a) of the Act, and that their dismissals were accordingly all deemed to be unjustified. He recorded that, after receiving their letters of dismissal, some of the respondents made a last effort to save their jobs and contacted the Authority which attempted to set up a disciplinary Board. He rejected the appellant’s evidence that he had communicated with the Authority and found that he had not nominated his representative. He found that the teachers who had been dismissed joined the staff of another College and were paid their salaries by the Authority out of the grant payable to that other College.
The appellant raised some 21 grounds of appeal in his Notice of Appeal to the Supreme Court, and relied on almost all of them at the hearing of his appeal. They were all rejected. Many of them were repeated in the appellant’s petition to the Board, but only four were pressed in argument. Their Lordships will deal with each of these in turn.
The first relates to the appellant’s complaint that neither the Magistrate nor the Supreme Court dealt with his submission that the respondents’ dismissal was “ineffective, null and void”. They treated the submission as raising a factual issue, and rejected it because the respondents had in fact been dismissed, albeit unlawfully, and had been employed elsewhere for many years. Their Lordships think that this may have done less than justice to the appellant’s argument. He did not deny that he had purported to dismiss the respondents. His contention was that “matters of discipline and dismissal” were within the exclusive jurisdiction of the Board established under section 16 of the PSSA, with the result that he had no power to dismiss the respondents. He did not claim that he had not done so, but argued that he had not brought about the lawful termination of the respondents’ contracts of employment as required by section 34 of the Labour Act.
Severance pay is clearly payable whether or not the employee’s dismissal is contrary to the provisions of the Labour Act. If the employee is otherwise eligible, it is sufficient that his employment has been terminated whether lawfully or not. If the termination was unjustified the allowance is payable at the penal rate. It is not necessary to consider whether severance pay would be payable where someone with no power to terminate the employment contract purported to do so. That question does not arise in the present case. The short answer to the appellant’s argument is that the disciplinary Board has no power of dismissal, because the Authority is not the employer. What section 16 confers on the Board is an exclusive jurisdiction in respect of discipline and dismissal. The word “jurisdiction” encompasses the power of adjudication, but nothing more. The Board has exclusive jurisdiction to adjudicate on disputes concerning discipline and dismissal, and to decide for example whether summary dismissal is justified. But there is nothing in the PSSA to divest the employer of the power, whether lawfully or unlawfully, to terminate the contract of employment and vest this power in the Authority or the disciplinary Board. If the employer dismisses the employee in the teeth of a decision of the Board that dismissal is unjustified, the dismissal, even if unlawful, is effective. The employee is entitled to treat the dismissal as unjustified and claim severance pay at the penal rate. The distinction between the functions of the employer and the Board is clearly brought out in the 1988 Regulations, and their Lordships are satisfied that it represented the position as well before 1988 as after it.
Next the appellant submitted that the respondents are not entitled to wages in lieu of notice or severance allowance as they continued to receive the same emoluments from the Authority after their dismissal as before and have accordingly suffered no financial loss. This argument must be addressed separately in relation to the two awards.
Their Lordships regard the argument in relation to severance allowance as plainly misconceived. The allowance is not payable as damages for breach of contract or as compensation for loss of employment. As in the case of redundancy pay in the United Kingdom, the employee has a statutory right to payment whether or not he has suffered financial loss by reason of the termination of his employment. The allowance is payable under section 34 of the Labour Act whenever the conditions set out in that Section are satisfied. These do not require proof of financial loss. The allowance is payable at the penal rate under section 36(7) whenever the Court finds that the employee’s dismissal was unjustified. The Magistrate so found.
Wages in lieu of notice are in a different category. When wages are paid in lieu of notice they are tendered on account of damages for summary dismissal: see Gothard v. Mirror Group Newspapers Ltd. [1988] I.C.R. 729, 733. In the present case they were not paid; but the respondents have not, as their Lordships understand it, claimed payment as damages for breach of contract but as money due under the contract: see Delaney v. Staples [1992] 1 A.C. 687, 693. Proof of loss is not required to support such a claim. The real question is whether the respondents’ claim for money due under the contract is inconsistent with their claim for severance allowance at the penal rate, which depends on their dismissal being unjustified within the meaning of the Labour Act. If so, they would have to elect between the two claims. This question, which is by no means easy, was not canvassed before the Courts below, and their Lordships do not think it right to enter upon it without the benefit of their opinions.
Their Lordships can dispose of the remaining grounds of appeal quite shortly. The Magistrate found that the dismissal of the first group of teachers for misconduct was contrary to section 32(1)(b)(ii) because it was not effected within 7 days of the appellant’s becoming aware of the misconduct relied upon. The appellant pointed out that there was nothing in section 32(1)(b) which deemed such dismissal to be unjustified, and that this was in stark contrast to section 32(2)(a). Their Lordships consider that there is nothing in this point. The Magistrate found that all the respondents, including those in the first group, were dismissed in breach of section 32(2)(a). An employer’s failure to comply with section 32(2)(a) deprives the employee of an opportunity to obtain a ruling that his dismissal was unjustified, and it is this fact which explains the inclusion of a deeming provision in section 32(2)(a). But the Magistrate did not need to rely on any deeming provision, because he found as a fact that all the dismissals were unjustified.
Lastly the appellant submitted that the Courts below were wrong not to have considered the case of each respondent separately, and that their failure to do so had resulted in a miscarriage of justice. There is, of course, nothing wrong in the tribunal of fact dealing with like cases together, though it is obviously necessary to take care that the cases are in truth indistinguishable. Their Lordships have not had their attention drawn to any material particular in which the case of any of the individual respondents differed from the cases of other members of the same group, or to any miscarriage of justice that could by any possibility have resulted from the approach adopted by the Courts below.
Their Lordships dismiss the appeal with costs.
