[2012] UKPC 23
Privy Council
Appeal No 0009 of 2011
JUDGMENT
Smegh (Ile Maurice) Ltée (Appellant) v Dharmendra
Persad (Respondent)
From the Supreme
Court of Mauritius
before
Lord Hope
Lord Brown
Lord Mance
Lord Dyson
Lord Sumption
JUDGMENT
DELIVERED BY
LORD DYSON
ON
28 May 2012
Heard on 29
March 2012
Appellant
Anil
Gayan SC
Ms
Jane Jouanis
Instructed by M Mardemootoo)
Respondent
Sunil
Bheero
LORD DYSON:
1. The appellant (“Smegh”) runs La Plantation Hotel in
Mauritius. The respondent (“Mr Persad”)
was employed by Smegh as its financial controller at a monthly salary of Rs
47,125 from 25 October 1988 until he was summarily dismissed on 25 March
2005. He instituted proceedings in the
Industrial Court of Mauritius on 31 March 2005 claiming 3 months’ wages in lieu
of notice and severance allowance for unjustified dismissal. On 13 October 2008, Mr Magistrate B Marie
Joseph (VicePresident of the Court) found in his favour and awarded him the sum
that he claimed with interest at 12% per annum on the severance allowance plus
costs. Smegh’s appeal was dismissed with
costs on 22 June 2010 by the Supreme Court (A.F. Chui Yew Cheong and G. Angoh).
2. The relevant statutory provisions are to be found in the
(now repealed) Labour Act 1975 (“the 1975 Act”). A contract of employment may be terminated on
notice (section 31) or summarily for misconduct (section 32(1)(b)). The worker must be afforded an opportunity to
answer a charge of misconduct (section 32(2)(a)) and a dismissal must be
effected within 7 days of the completion of a hearing held for that purpose
(section 32(1)(b)(ii)(A)). A worker
whose employment has been unjustifiably terminated may refer the matter to an
officer of the Ministry of Labour and Industrial Relations; and where such a
reference does not result in the matter being satisfactorily settled, the
worker may lodge a complaint with the Industrial Court (section 32(3)(b)). A worker, who has been in continuous
employment for 12 months or more and whose employment has been terminated, is
entitled to a severance allowance (section 34) unless (section 35(1)) he is
dismissed for misconduct in accordance with section 32(1)(b). The amount of severance allowance payable to
the worker shall be half a month’s remuneration for every 12 months where the
worker is remunerated at intervals of not less than one month (section
36(3)). Section 36(7) provides that “The
Court shall, where it finds that the termination of the employment of a
worker.....was unjustified, order that the worker be paid a sum equal to 6
times the amount of severance allowance specified in subsection (3)”.
3. The dismissal of Mr Persad was based on 3 charges of misconduct. The first charge alleged:
“Whilst being the Financial
Controller at La Plantation Hotel, on about 25th September 2004, you took it
upon yourself without the authority of the General Manage o[r] the Resident
Manager to give instructions to Reservations Department not to present any
bills to guests Barone Vincenzo upon departure as allegedly all the expenses
for their stay in the hotel for period 25.09.04 to 07.10.04 would be settled by
one Mr Vincente Panasiti from Switzerland.
On or about 09.10.04, you
caused to be sent the invoices to Mr Vincente PANASITI in Switzerland and gave
the assurance to management that payment would be effected at latest 31st
October 2004, and that you would personally in case of default guarantee
payment.
As at 06.12.04, no such
payment has been effected and this is to the prejudice of La Plantation Hotel.”
Mr and Mrs Barone were
guests of the hotel. Mr Panasiti is Mrs Barone’s father. The bill was eventually settled on 30
December 2004.
4. The second charge alleged:
“Whilst being the Financial
Controller at La Plantation Hotel, in breach of your duties, you failed to
ensure that contracts were duly established for exhibitors at La Plantation
Hotel for the period September to November 2004 with the result that monthly
fees could not be recovered from some exhibitors to the prejudice of the hotel
namely:-
Exhibitors Sept 04 Oct
04 Nov 04
B N Baichoo Nil Nil Nil
Cie
Historic Marine Nil Nil Nil
Cie
Paradise Art Nil Nil Nil
Mr Ronney Nil Nil
Nil
Mr Teeluckdharry Nil Nil
Nil
5. The third charge alleged:
“Whilst being the Financial
Controller at La Plantation Hotel, you failed to ensure that all creditors of
the hotel were paid evenly with the result that some were regularly paid whilst
others were not so paid and this to the detriment of the suppliers causing
damage to the reputation of the hotel.”
6. These charges were first notified to Mr Persad by Smegh’s
letter dated 15 December 2004 which, after setting out the charges in full,
stated: “Management takes a serious view of the above charges, any of which if
established will amount to gross misconduct capable of justifying dismissal”.
7. Mr Persad had been suspended from employment on 1 December
2004. Smegh set up a disciplinary
committee meeting on 22 March 2005 to consider the three charges and to give
him an opportunity to answer them as required by section 32(2)(a) of the 1975
Act. Both Mr Persad and Smegh were
represented by counsel. The committee
comprised one person, Mr Achanah Chiniah.
Evidence was given by Mr Persad and several witnesses on behalf of
Smegh. It is not clear whether the
General Manager (Mr Clerbout) gave evidence, but he was certainly present. The report of the hearing does not purport
to be a complete record of what was said, but it is the only evidence of what
occurred. It states that Mr Clerbout was
“at the disposal of the committee”.
The first charge
8. According to the report of the hearing, the evidence was
mainly directed to the complaint that Mr Persad was responsible for the delay
in securing payment of the hotel bill and that he had failed to keep his
promise to settle the bill himself. The
report notes that Mr Clerbout “was very upset about the failure of Mr Persad to
keep his promise to settle the outstanding bill on behalf of the Vincenzo
family”. There is no reference to a
complaint that Mr Persad had not been authorised to instruct the Reservations
Department to look to Mr Panasiti to settle the Barones’ bill. Counsel for Mr Persad is recorded as having
said that, as financial controller, Mr Persad had “enough authority to be
lenient towards guests. But in this
particular case he kept the GM aware of the progress of the case”. The committee found that, in failing to have
the bill settled as promised to the General Manager, Mr Persad cast a doubt in
the mind of Management as to his being a reliable member of the senior staff;
his statement that he kept the General Manager aware of the progress in the
settlement of the account “was at no time indicated to the Committee by the
[General Manager]”; and with modern means of communication, “it should not have
been so difficult to get payment effected”. The committee’s “recommendation”
was that Mr Persad was “blameworthy as he was unable to convince the Committee
that he did everything within his possibilities to ensure prompt payment by/or
on behalf of guests Vincenzo”.
9. At the hearing before the Industrial Court, Mr Persad
admitted having given instructions to the Reservations Department not to claim
payment from Mr Barone on the basis that the bill would be settled by Mr
Panasiti. He said that he had been
authorised to do so by the General Manager.
After the guests had departed from the hotel, the invoice was mistakenly
sent to Mr Barone instead of Mr Panasiti.
It was returned by Mr Barone and sent to Mr Panasiti who settled
it. He also said that, as financial controller,
he enjoyed certain privileges (“cession”) which he could have used to cover the
cost of the Barones’ stay if the bill had not been settled. He was extensively cross-examined.
10. The Court said (correctly) that the burden was on Smegh to
prove that (i) Mr Persad had given instructions not to present a bill to the
Barones without the authority of the General Manager; (ii) he had said that the
bill would be settled by Mr Panasiti; (iii) on 9 October 2004, he forwarded the
bill to Mr Panasiti and gave an assurance that the bill would be settled by 31
October, failing which he would settle it himself; and (iv) by 6 December, the
bill had not been settled. Mr Persad
said that he been authorised by the General Manager to present the bill to Mr
Panasiti rather than the Barones.
Subject to that, he admitted facts (i) to (iv). The General Manager did not give evidence at
the trial. Instead, Smegh called two
more junior employees neither of whom testified that Mr Persad had no
authorisation from the General Manager.
11. Mr Persad called two witnesses whom he had not called at the
committee meeting. These were Mr Cooroopdass and Mr Rajkumarsingh. Mr Cooroopdass had joined the Appavou Group
(of which Smegh forms part) in 1989. He
was Chief Executive Director of the Group at the time of the dismissal of Mr
Persad. He retired in February 2005 after a disagreement with the Group. Mr Rajkumarsingh joined the Appavou Group in
March 1999. At the time of his
resignation in January 2005, he was Group Internal Auditor, Financial Director
and Assistant Managing Director of the Group.
Mr Cooroopdass was unable to give any evidence directly bearing on the
first charge, although he said that he found the reasons for the suspension of
Mr Persad to be somewhat vague and he thought that there appeared to be “some
sort of a building up of a case”. Mr
Rajkumarsingh said that he personally enquired into the issue which had led to
the disciplinary proceedings. He found
that the hotel records showed (correctly) that the Barones were included in the
list of debtors. Everything was in
order. He also noted that the reason for
the delay in payment was that the bill had not included details of the hotel’s
bank account. At that time, it was the
accountant who was responsible for following up debtors. The Magistrate was clearly impressed with Mr
Persad as a witness. The judgment
includes the following:
“On the other hand, the
Plaintiff maintained that he discussed with the General Manager and sought his
green light before giving the instructions he gave, which version the Defendant
failed to satisfactorily rebut. He also
gave a cogent and plausible account of the circumstances in which the guests
were introduced to him and he accepted to facilitate the special treatment they
were given. He did not rest content with
his sole word that everything was in order in as much as the guests were duly
included in the debtors’ list, there were plausible explanations as to the
delay in the settlement of the bill and that the bill was duly paid
subsequently. As a matter of fact, he
called an appropriate witness in the person Mr Rajkumarsingh who confirmed all
this. This witness impressed me as a
witness of truth and his evidence stands both unshaken and unrebutted. Of note also, the Plaintiff readily accepted
to sort out the matter and even offered to settle the debt personally. This is indeed a conduct that tends to show
his good faith in the matter.
In the light of the
observations set out above, I consider that it would be unreasonable to hold
that there had been some sort of shortcoming on the part of the Plaintiff in
relation to the problem subject matter of the first charge amounting to gross
misconduct. In fact, I would even go to
the extent of saying that this charge was not justifiable.”
12. The Court of Appeal said that the material issue was whether Mr
Persad acted without the authorisation of the General Manager. After a brief review of some of the
Magistrate’s findings, they said that they would not interfere with his appreciation
of the evidence and his findings because he had not misdirected himself or made
findings which were manifestly wrong, perverse or unwarranted.
The second charge
13. Mr Persad is the only witness whose evidence on this charge is
recorded in the report of the committee meeting. He said that it was not his responsibility to
deal with the contracts of exhibitors at the hotel. That was the responsibility of the General
Manager and the Resident Manager. The
Committee found that it was one of Mr Persad’s main duties to leave no stone
unturned to obtain revenue from all sources, including from the exhibitors; he
should have ensured that the contracts were finalised to enable prompt payment;
the responsibility was his and not that of Miss Hema Persad, who was only one
of his assistants; and being Head of the Accounts Department, he had to devise
ways and means to follow closely the operation of the department, especially
where revenue was concerned.
14. Before the Industrial Court, Mr Persad said that it was the
practice in all the hotels in the Appavou Group for the General Manager or the
Deputy General Managers to draft contracts with exhibitors. As Financial Controller, he was only
concerned with the execution of the contracts.
In the case of the particular exhibitors in question, there were no
contracts. His evidence was supported in
terms by Mr Cooroopdass. He said that
the Financial Controller would normally only become aware of the existence of a
contract on being informed by the General Manager. Mr Rajkumarsingh confirmed that contracts
with exhibitors were the responsibility of the Resident Manager and the
Entertainment Manager. The follow-up of these contracts was the responsibility
of the Accountant. Mr Ramen gave
evidence on behalf of Smegh. As a Human
Resource Manager, he said that he was familiar with the organisation of all the
hotels in the Group. He said that in all
the hotels the responsibility for the drafting and signing of contracts with
exhibitors lay with the Financial Controller.
But he admitted in cross-examination that he had never worked at the La
Plantation Hotel and when it was put to him that Mr Rajkumarsingh had said that
contracts with exhibitors were the responsibility of the Resident Manager, he
said that he did not have anything to say about that.
15. The Magistrate preferred the evidence of Mr Persad’s witnesses
to that of Mr Ramen. He held that Smegh
had failed to substantiate the second charge and found that there was no proof
of shortcomings amounting to gross misconduct as alleged.
16. The Court of Appeal dismissed the appeal in relation to the
second charge for the same reasons as it dismissed the appeal in relation to
the first charge.
The third charge
17. Mr Persad told the committee that, as there was a cash flow
problem, payment of debts had to be made on an agreed priority basis. The committee said that it was “in doubt
whether payment was effected justifiably so that all the suppliers were
receiving a fair consideration”. It
“recommended” that Mr Persad had caused
prejudice to the image of the hotel by discriminating among the suppliers in
the payment of their bills.
18. Before the Magistrate, Smegh did not call any evidence to
substantiate the third charge. Mr
Persad said that the selective payment of particular creditors could not be
avoided in view of the hotel’s cash flow difficulties and that the decisions
that were made were with the agreement of the General Manager. This evidence was corroborated by Mr
Cooroopdass. The Magistrate accepted
this evidence and made the same findings in relation to the third charge as he
had done in relation to the second charge.
Likewise, the Court of Appeal treated the appeal in relation to the
third charge in the same way as in the appeal relation to the other charges.
Discussion
19. It is accepted on behalf of Smegh that the Court of Appeal
applied the correct test. In other
words, the appeal could only succeed if the Industrial Court erred in principle
by asking itself the wrong question or making findings which were perverse or
manifestly wrong. In G. Planteau De
Maroussem v Dupou [2009] SCJ 287, the Supreme Court of Mauritius held that the
question whether an employee has been unjustifiably dismissed was a matter for
the court and not the employer’s disciplinary committee. The court said:
“The aim of a disciplinary
committee, as we have said, is merely to afford the employee an opportunity to
give his version of the facts before a decision relating to his future
employment is reached by his employer.
It is no substitute for a court of law, nor has it got its
attributes. Furthermore, the employer is
not bound by the recommendations of the disciplinary committee and is free to
reach its own decision in relation to the future employment of his employee,
subject to the sanction of the Industrial Court”
20. The Board agrees. It
would be remarkable if the exclusive jurisdiction to decide whether a worker
has been unjustifiably dismissed in a particular case were to be vested in the
employer. The denial to workers of the
right of access to a court to decide such a question could only be achieved by
the clearest statutory language. It is
unnecessary to look further than sections 32(3)(b) and 36(7) to see that the
1975 Act explicitly recognises the court’s jurisdiction. Section 36(7) could not be clearer: “The
Court shall, where it finds that the termination of the employment of a
worker....was unjustified....” (emphasis added). Mr Persad invoked this jurisdiction when he
issued proceedings in the Industrial Court.
The findings of the committee have no statutory status. The committee is simply the means by which
Smegh discharged its obligation under section 32(2)(a) to afford Mr Persad an
opportunity to answer the charges made against him. Section 32(2)(a) provides that, in the absence
of such an opportunity, the dismissal is deemed to be unjustified. It does not provide that the findings of a
committee are conclusive. The obligation
to afford an opportunity to be heard is no more than an obligatory part of the
employer’s internal procedure for dismissing an employee.
21. None of this has been seriously in issue in the present
appeal. Rather, the argument focused on
a principle which found expression in The Northern Transport Co Ltd v Radhakisson
[1975] SCJ 223 and has been restated more recently in Mauritius Co-operative
Savings and Credit League Ltd v Khulshid Banon Muhomud [2012] SCJ 107. In Northern Transport, the worker who had
been dismissed gave one account of the facts to his employer (on the basis of
which the employer dismissed him) and a completely different account to the
Court which was deciding whether the dismissal had been unjustified. The Supreme Court said:
“The Magistrate in finding
for the respondent accepted the version given in Court by the respondent which
is contrary to the one he gave to his employer on the day of the occurrence and
which led to his dismissal. In so doing
the Magistrate made a wrong approach to the problem posed to him as the issue
he has to decide was whether the appellant was justified, on the facts before
him at the time, to dismiss the respondent. ”
22. In Mauritius Co-Operative Savings, the employer sought to rely
on allegations before the Magistrate which did not form part of the charges
which were considered by its disciplinary committee. The Supreme Court applied Northern Transport
and held that the Magistrate had been right not to have regard to the new
allegations in deciding whether the termination had been justified.
23. The Board would endorse the approach adopted in both of these
cases. The question whether an employer
justifiably dismisses a worker must be judged on the basis of the material of
which the employer is or ought reasonably to be aware at the time of the
dismissal. If the dismissal is justified
on that material, it is not open to the worker to complain on the basis that
there was other material of which the employer was not, and could not
reasonably have been, aware which, if taken into account, would have rendered
the dismissal unjustified. The Board
does not understand the correctness of this principle to have been in issue in
the present case.
24. Thus, if Mr Persad succeeded before the Industrial Court on the
basis of a case which he did not run before the committee and/or of which Smegh
was not and could not reasonably have been aware at the time of the dismissal,
then the Northern Transport principle would have been infringed by the Court
and the appeal should have been allowed.
25. There is no suggestion that Mr Persad changed his account in a
material respect in relation to any of the 3 charges. The version he gave to the committee was
essentially the same as that which he gave to the Court. After giving a full account of his case in
relation to all the charges (including his case that he had been authorised by
the General Manager to give the controversial instructions to the Reservations
Department), Mr Persad told the Court that “he had explained all this at the
disciplinary hearing” (p 180 line 20 of the Record). The only respect in which there is any
material difference between the account recorded in the committee’s report and
the evidence given at the trial is that, in relation to the first charge, the
former contains no clear reference to evidence by Mr Persad that he had been
authorised by the General Manager to give the instructions to the Reservations
Department. But the Magistrate accepted
the entirety of Mr Persad’s evidence.
This must have included his statement that he had explained the whole of
his case to the committee. It should
also be noted that the report records (p 246 of the Record) that Mr Persad
denied all the charges. The first
allegation set out in the first charge was that he had instructed the
Reservations Department to send the Barones’ bill to Mr Panasiti without the
authority of the Resident Manager. This
was a serious allegation. It is
inherently unlikely that Mr Persad did not give evidence on this important
point. It is unfortunate that the report
contains no reference to what Mr Persad said about the allegation of lack of
authority. But as already stated, the
report does not purport to be comprehensive.
26. In the argument before the Board, much was made by counsel for
Smegh of the fact that Mr Persad called witnesses who had not given evidence
before the committee, notably Mr Cooroopdass and Mr Rajkumarsingh. It is true that the Magistrate was impressed
by the evidence of these witnesses and relied on it as corroborating the
account given by Mr Persad. But the
Board does not consider that this means that there was an infringement of the
Northern Transport principle. First, the
principle should not be extended to preclude a worker from relying in court on
fresh evidence which does no more than support the case which he has always
run. As was said in G. Planteau De
Maroussem, an employer’s disciplinary committee is no substitute for a court of
law. It is the court which is given the power
to decide whether a dismissal was justified.
In the present case, the fresh evidence did no more than corroborate Mr
Persad’s account which, in material respects, the committee had rejected and
the Magistrate accepted. Secondly, at
the time of the dismissal, Mr Coorropdass and Mr Rajkumarsingh were senior
executives of the Group of which Smegh formed part. They gave evidence about matters which lay
within their own spheres of responsibility.
Their knowledge of such matters must be imputed to Smegh. In any event, Smegh could have taken
statements from them and called them to give evidence before the
committee. In these circumstances, Smegh
cannot be heard to say that it was unaware of what they could say.
Conclusion
27. This appeal must be dismissed.
The Magistrate reached a conclusion on the facts which was plainly open
to him. He heard the witnesses and made
an assessment of their evidence. His
decision was not perverse or manifestly ill-founded. Indeed, the contrary was barely argued before
the Board. The only point of substance
that was pressed on the Board was that to some extent the Magistrate based his
findings on evidence that was not deployed by Smegh before the committee. But for the reasons given, this cannot avail
it on the facts of this case. Since the
decision of the Magistrate cannot be impeached, the Court of Appeal was right
to dismiss the appeal.
28. The Board would merely add that much of the difficulty raised
by this case has resulted from the fact that the record of the hearing before
the committee was incomplete in material respects. It is important that employers accurately
record what is said at disciplinary hearings so as to reduce the scope for
subsequent dispute. It is also good
practice to supply a copy of the record to the worker as soon as possible after
the completion of the hearing. This was
not done in the present case.
29. Submissions on costs should be made in writing within 28
days.
