Judicial Review of Public and Private Employment Contracts in Papua New Guinea

Justice Berna Collier* 27 November 2017

Supreme Court of Papua New Guinea Underlying Law Conference

*Supreme and National Courts of Papua New Guinea and Federal Court of Australia

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A Introduction

The National and Supreme Courts of Papua New Guinea have grappled with the question of how far the employment decisions of public bodies should be susceptible to judicial review for many years. The answer is often hidden in the 'mists of a distinction between public and private law'.[1] For an employee who has been terminated, it may be attractive to challenge the decision on the ground that the rules of procedural fairness/natural justice have been breached, or that some form of unreasonableness has infected the decision. The alternative grounds of challenge, procedures and remedies of judicial review may be preferable to relying on employment law principles in some circumstances.

The difficulty for the Courts lies in where to draw the line between decisions that are properly the subject of judicial review, and those that are not. This task has been made more complicated in recent years with the corporatisation and changing nature of public bodies in PNG.

A Supreme Court Bench comprised of Deputy Chief Justice Salika, Justice Batari and myself recently explored issues of judicial review in the employment context in Norman Daniel v Air Niugini Ltd (SCM 3-10 of 2017, heard on 27 June 2017, judgment delivered 4 August 2017). The appellants there were employed as pilots or cadet pilots by the airline, Air Niugini Limited. All appellants had been dismissed from their employment on disciplinary grounds, and each sought judicial review of the dismissal decisions and the remedy of certiorari to quash those decisions. Leave was granted by the National Court and the matter returned before the primary Judge for hearing. Air Niugini opposed the application on the basis that the appellants were employed under employment agreements for which judicial review was not available. In a unanimous judgment, the Supreme Court dismissed an appeal against a decision of a Judge of the National Court who held that judicial review was not available in that case.

To my knowledge this decision is the most recent statement of law by the Supreme Court on this topic. As a member of the bench that decided Norman Daniel v Air Niugini it may be helpful to work through the issues considered in the judgment to understand how the Court may, in similar circumstances, approach the question whether judicial review is available.

B Historical position in Papua New Guinea

The principle that judicial review involves the exercise of the Court's inherent supervisory jurisdiction in respect of activities of public authorities in the field of public law is, without question, the law in this country. Authority at the highest level supports this proposition – see, for example, such cases as Temu, Department of Works and The State v James Wani, SCA 96 of 1993 at 4; Nemambo v Peipul [1994] SC475; SCR No 1 of 1990; Re Recount of Votes [1990] PNGLR 441; Ragi v Maingu (1994) SC459; Wadau v PNG Harbours Board [1995] PNGLR 357; Ombudsman Commission v Yama [2004] SC747; Telikom PNG Ltd v Independent Consumer and Competition Commission [2008] SC906; Somare v Manek [2011] SC1118; Luma v Kali (2014) SC1401; Timothy v Marus [2014] SC1403 at [20]. Further, section 60 of the Constitution emphasises the need to develop a system of administrative law, including principles of natural justice, which are specifically designed for Papua New Guinea. It is in this context that Rules of the Court established the nature and limitations of judicial review, in particular the distinction between review and appeal.[2]

However individual circumstances may be such that the jurisdiction of the Court to order judicial review is, at least initially, ambiguous. Judicial review remedies are not available at large. As Sir Clive Lewis, writing extra-judicially, recently explained:

Judicial review is only available against a body exercising public functions in a public law matter. In essence, two requirements need to be satisfied. First, the body under challenge must be a public body or a body performing public functions. Secondly, the subject-matter of the challenge must involve claims based on public law principles, not the enforcement of private law rights…[3]

(emphasis added)

This principle is certainly applicable to applications of judicial review in the employment context, and it is useful to look at the requirements identified by Sir Clive Lewis in turn.

C Nature of the employer – is it a "public body"?

It can be a difficult task to determine whether a body is a public body or a body exercising a public function, and in turn whether its decisions relating to employees are amenable to judicial review. However the following points appear to clear.

First, merely fulfilling a task traditionally associated with government does not, of itself, mean that the entity is a "public body" such that its decisions can be judicially reviewed. This is the case even if that entity is owned by the State.

Examples of this principle can be seen in Napitalai v PNG Ports Corporation Ltd [2010] SC1016 ('Napitali'), and Norman Daniel v Air Niugini. In Napitali, the National Court at first instance found that PNG Ports Corporation Ltd was a public body because it was a "State-owned enterprise and the management and its affairs are still regulated by statute and the Executive arm of government". The Supreme Court overturned this finding. Critically to the decision, the sections of statute the trial judge relied on concerned the Papua New Guinea Harbours Board which had, in effect been corporatised, with the State vacating the field. PNG Ports Corporation Ltd performed only the commercial activities of the Harbours Board, while other, more "government-like" functions had been transferred to other departments and bodies.

In Norman Daniel, Air Niugini was found not to be a public body in spite of the fact that the sole shareholder of the company is Kumul Consolidated Holdings, which was formed by the Independent Public Business Corporation of Papua New Guinea (Kumul Consolidated Holdings) (Amendment) Act 2015 to act as trustee owner for state owned assets and enterprises.

In contrast, entities which the Courts have found to be public bodies for the purpose of judicial review include the National Executive Council,[4] a State superannuation fund board,[5] the Public Services Commission,[6] the National Housing Corporation,[7] the National Airports Corporation Ltd[8] and the PNG Harbours Board.[9]

Second, merely because an entity performs "public" functions does not, of itself, mean that it is a "public" body amenable to judicial review. In Supro v Aopi [1997] PNGLR 353 Woods J held that, although Telikom had community service obligations and performed public functions, it was not a public body for the purpose of determining the application seeking leave for judicial review.

In Normal Daniel v Air Niugini, the Court did not accept the submission that there was an issue of public importance to the claim in that case because the pilots were subject to the Industrial Relations Act 1962 and the Industrial Organizations Act 1962. The Court held that this legislation was of general application to workers in the community and that the appellants failed to demonstrate any relevant public interest in seeking judicial review that arose from the non-specific application of broad-ranging industrial legislation.

Third, previous Court determinations of the public nature (or otherwise) of the entity will be helpful, but are not conclusive. The appellants in Normal Daniel relied heavily on the earlier decision of the Supreme Court in Air Niugini v Salter [2001] SC679 for the proposition that Air Niugini had already been determined to be a public body. The case involved the employment conditions of two non-citizen employees of Air Niugini. Air Niugini had been declared a public authority for the purposes of the Public Employment of Non-Citizens Act 1978. However, the Court in Norman Daniel was not persuaded that it was bound by the findings in the earlier case to find that Air Niugini, in its 2017 structure, and following fundamental changes to its corporate structure since 2001, was a public body for the purposes of judicial review. While the National Airline Commission Act 1973 made provision for the establishment of a national airline, Air Niugini as it now exists is a corporation registered under the provisions of the Companies Act 1997. Further, Air Niugini has its own constitution which makes provision for such matters as corporate governance, structure, shareholdings, legal capacity, record keeping and capital maintenance. The Court held that Air Niugini is not the statutory body created by the National Airline Commission Act 1973. There was no provision in that Act concerning the employment of pilots such as the appellants in that case.

Fourth, the fact that an entity may be declared a "public body" for the limited purposes of such legislation as the Public Employment of Non-Citizens Act did not mean that all employment decisions (including with respect to employment of citizens) were judicially reviewable by the Court. As the Court observed in Norman Daniel:

The power given to the Minister is broad, and not limited by considerations of public law to which we have adverted. We are not persuaded that the mere declaration by the Minister of an entity as a "public authority" for the purposes of the Public Employment of Non-Citizens Act requires the Court to find that judicial review is available in respect of decisions of that entity.

Fifth, if the employing agency is not created under a statute but is incorporated under the Companies Act, employment decisions are almost certainly of a private law nature and the remedy of judicial review is not available to the aggrieved party: Ron Napitalai v. Caspar Wallace (2010) SC1016, Luma v Kali (2014) SC1401 at [54].

In Norman Daniel v Air Niugini, the Court noted that while the National Airline Commission Act 1973 made provision for the establishment of a national airline, events had clearly moved on since that enactment. Air Niugini is a corporation registered under the provisions of the Companies Act 1997, not the statutory body contemplated by the National Airline Commission Act 1973. It has its own constitution which makes provision for such matters as corporate governance, structure, shareholdings, legal capacity, record keeping and capital maintenance. There is no provision in the National Airline Commission Act 1973 concerning the employment of staff at Air Niugini. That Act was concerned with the National Airlines Commission, a body which the Court understood to have no active presence or operation. Its presence on the statute books appeared to be of historical relevance only.

Finally, regulation of an industry does not, of itself, result in the regulated bodies becoming public bodies. In Norman Daniel v Air Niugini the Court held that while the operations of airlines in PNG was clearly subject to regulatory controls, this was a function of international aviation safety standards and did not mean that decisions of Air Niugini were subject to judicial review. If regulation of an entity meant that it could be subject to judicial review all companies in Papua New Guinea (which are subject to the Companies Act 1997) would be subject to judicial review – this is clearly not the case.

D Subject-matter of the challenge – what is the nature of the employment?

As the Supreme Court explained in Luma v Kali :

54. … in a case where a terminated contract employee seeks leave for judicial review, the question of whether his remedy lies in judicial review or damages is a relevant consideration and threshold issue. However, each case must be considered on its own merits. We consider that the Court must be guided by the following basic principles; first, it must look at the process of appointment and revocation. If it is governed by the Constitution or statute, it is open to judicial review. If not, it is a matter of private law where the appropriate remedy is damages for breach of contract

It may be the case that a statute establishes a public body, but it does not necessarily follow that employment at that body will be similarly subject to statutory regulation.

In Ragi v Maingu [1994] SC 459 the respondent was dismissed as acting Board Secretary of the former Public Officers Superannuation Board. The Supreme Court found that the termination of the respondent's employment involved private law matters rather than public law :

The respondent here claimed his wrongful dismissal from employment was a matter of public law. In fact it is merely a matter of a private law nature, the right of an employer to control and deal with his own employees.  There is no statutory duty here, there is no statutory protection which makes this a matter of public law. This is purely a matter of the relationship between a master and servant.  Whilst the master here is a Board created by statute the employment of the staff of the Board is not a matter of statute, there are no provisions in the legislation setting up the Board which give terms and conditions of employment or other matters which have been raised in this case. Merely stating in the Act that the Board may employ staff does not by itself make that employment a matter of public law.

In the case Kekedo v Burns Philp Ltd [1988-89] PNGLR 122 the subject of judicial review was clearly the exercise by a government official of a power under legislation namely the cancellation of a work permit.

But here before us the respondent was merely challenging his termination, yet neither this court nor the National Court have been referred to any legislation which shows that there is anything of a public nature about this, this is matter of private law which should be the subject of the usual writ of summons.

(emphasis added)

In Normal Daniel v Air Niugini, the Court found that the employment relationship was sourced in private law. Each employee was employed under a contract of employment. These contracts and industrial instruments comprehensively set out the terms of employment of the appellants. There was no evidence before the Court that the employment relationship, or key aspects thereof, were founded in statute.

On the other hand, an employee may be employed under a contract of employment and a decision to dismiss him or her will still be susceptible to judicial review. In State v Eluh [2016] SC1479, while the respondent was employed under a contract, the Supreme Court found the decision to dismiss him could be judicially reviewed in circumstances where he was employed by the State through the Police Force established by the Constitution, where he held the rank of Assistant Commissioner of Police and where he had assumed the Office of ACP (Crimes) within the Police Force. The respondent's rank, the office he held and the functions he performed were directly derived from the Constitution and the Police Act.

This decision can be contrasted with Wedau v Daniel [1995] PNGLR 357, where a legal officer employed by the Papua New Guinea Harbours Board was terminated for disciplinary reasons. The Supreme Court upheld the decision of the National Court to refuse judicial review. The Supreme Court noted that the appellant was charged under Part X of Determination No.1/1970 (Terms and Conditions of Employment) made pursuant to the Papua New Guinea Harbours Board Ordinance 1963. Their Honours noted further that the appellant's position as "legal officer" was neither designated nor created by the clause 2 or the Second Schedule of the Ordinance, and continued at 359-360:

He was employed for a period and accepted salary on the strength of his appointment and did (presumably) some work for and at the direction of, the officers of the Harbours Board. The indicia of an employer/employee relationship are clearly made out. He is not a person on a superior footing, as it were, as those officers designated by the Second Schedule. He has not been appointed to a public office, nor statutory authority or State instrumentality as was Robinson, the Deputy General Manager of Air Niugini (see Robinson v. The National Airline Commission [1983] PNGLR 476).

Rather he is an employee subject to the usual incidents of the employer/employee relationship but varied in the particular circumstances, here, in that the Board has afforded its employee the rights accorded an officer under Part X of the 1970 Determination.

At 362 the Court concluded :

There is nothing in the circumstances of this case, to give it any sufficient flavour of a "public" nature to justify this Court's interference. A lawyer especially, may make his own arrangements for employment and the fact of his employment does not place his position in the public domain, to such an extent for instance, that a member of the public could demand an account of the appellant's work at the Harbours Board. That is the sole prerogative of the employer, the Board and the Court has no business to enquire into the private arrangements made between these two parties. This highlights the distinction between public law and private law rights.

This 'flavour of a public nature' can be more readily found in the employment of a Departmental Head. In Hon, Peter O'Neil & Ors v Joseph Klapat & PSC (2014) SC1385, the Supreme Court at [7] reinforced the view that a Departmental Head is not only appointed for his personal benefit, but in the public interest:

It is to be remembered that the procedure for the suspension or dismissal of Departmental Heads and other high ranking public servants having direct reporting responsibilities to these in high political office is laid down not just for their personal benefit but in the public interest. Such public servants are expected to give in good faith and for the benefit of the Nation, frank, candid and fearless advice within their area of responsibility, irrespective of whether this serves the transient political interests of the Minister to whom they directly report. They are also expected faithfully to implement, to the best of their ability, the lawful policies of the government of the day and to offer advice about those policies. The prescribed procedures afford them a measure of protection from arbitrary Ministerial retaliation for doing their duty. We mention this because it underscores the seriousness of the departure from lawful public administration entailed in the conclusion reached by the primary judge.

The Supreme Court in Luma v Kali picked up this point, and further concluded that at [49]:

… Departmental Heads are no ordinary civil servants such that they should be treated in the same way as those in a pure master and servant relationship. Each Departmental Head is charged with the duty to run the affairs of the Department he is in charge of and collectively, the affairs of the State (nation) and must be given the benefit of the due process of law where required. Where the Constitution and Statute guarantee their employment, the right to seek judicial review must not be stifled by the Minister and the NEC under the pretext of a claim that he has a right to sue for damages for breach of contract.

E A quick comparison - judicial review of employment decisions in the United Kingdom

By way of quick comparison, it is interesting to note that, in the United Kingdom like in PNG, there is no single test for determining whether a body will be amendable to judicial review. As noted in Halsbury's Laws of England, in the UK private employment is clearly outside the realms of judicial review. An example of this was the case of R v British Broadcasting Corpn, ex p Lavelle [1983] 1 All ER 241. The disciplinary appeal procedure set up by the British Broadcasting Corporation depended purely on the contract of employment, was a procedure of purely private or domestic nature and the Court noted that '[a]n application for judicial review has not and should not be extended to a pure employment situation.'

The Courts in the United Kingdom have long held that employment by a public body does not, per se, inject any element of public law,[10] nor does the fact that an employee is in a 'higher grade' or is an 'officer'. Rather, such factors only makes it more likely that there will be special statutory restrictions upon dismissal, or other underpinning of employment.[11] It is this underpinning and not the seniority which injects the element of public law.[12]

F Remedies

On a concluding note, it is useful to examine the approach of PNG Courts to the question of appropriate remedies.

As a general proposition, once it has been established, as a threshold issue, that judicial review is available to review an employment decision, the grounds and remedies of judicial review are available to the applicant.

As in Australia and the United Kingdom, the Supreme Court of PNG has held that the grant of a remedy in judicial review is discretionary. In Mision Asiki v. Manasupe Zurenuoc, Provincial Administrator (2005) SC797, the Court held:

It is one thing to establish an error of law or a breach of natural justice and for the court to uphold an application for judicial review. It is another, separate, step to establish a case for a remedy. In judicial review proceedings the remedies to be granted are at the discretion of the court. As Sheehan J stated in Tohian v. Geita and Mugugia (No. 2) [1990] PNGLR 479, National Court:

.... in judicial review , even though the court might find there has been an error, even an error affecting matters of jurisdiction, the court would not thereby be obliged automatically to quash the ....proceedings. The remedies available under judicial review remain always at the discretion of the court and will only be granted to avoid injustice.

The court must therefore look at all the circumstances of the case and decide whether it is appropriate to grant a remedy; and if it is, what the remedy should be. It is not a formality. The court should generally only consider granting a remedy that has been specifically sought by the applicant for review or that would serve a useful purpose…

Reinstatement to employment is not automatic, notwithstanding the grant of certiorari to quash a termination decision. The Court has been cognisant of the common law remedies for unfair dismissal when considering whether to make an order for reinstatement. Similar considerations are relevant for ordering reinstatement in judicial review cases.

Conclusion

It is clear from the discussion above that there is no one factor which will determine whether judicial review is available to challenge an employment decision. Each case will turn on its facts. It will be an evolving question in Papua New Guinea as the nature of statutory bodies, and the functions they perform, change with time.


[1] 'Judicial Review of Employment Decisions of Public Authorities' Industrial Law Journal, Volume 22, Issue 1, 1 March 1993, p1.

[2] Nemambo v Peipul [1994] SC475

[3] Judicial Remedies in Public Law (5th edition) Sweet & Maxwell, 2015 page 9

[4] State v Kapal [1987] PNGLR 417; Luma v Kali [2014] SC1401, Lupari v Somare [2010] SC1071 .

[5] Ragi v Maingu [1994] SC459, although in that case the actual decision was not reviewable.

[6] Yafai v Kereme (2016) SC1513.

[7] Koi Toki v Moeka Morea Helai (2016) SC 1558.

[8] Maiyau v Tupiri [2015] N5985.

[9] Sausau v Kumgal [2006] N3253.

[10] R v East Berkshire Health Authority, ex p Walsh [1985] QB 152 at 164, [1984] 3 All ER 425 at 430, CA, per Sir John Donaldson MR.

See also McClaren v Home Office [1990] ICR 824, [1990] IRLR 338, CA (prison officer with no individual contract of employment); R v

Lord Chancellor's Department, ex p Nangle [1992] 1 All ER 897, [1991] ICR 743, DC (where there was a contract of employment between

the parties there was no scope for judicial review; however, even if there had been no such contract, there was no remedy in public law

arising out of disciplinary proceedings; such proceedings were of a purely domestic nature and without a sufficient element of public law; R

v Civil Service Appeal Board, ex p Bruce [1988] 3 All ER 686, [1988] ICR 649, DC, not followed). See also R v Lambeth London Borough

Council, ex p Thompson [1996] COD 217, Independent, 30 October in LexisNexis, Halsbury's Laws of England, vol 61 (at 22 November 2017) Judicial Review, '2 Persons against whom judicial review may lie'.

[11] Malloch v Aberdeen Corpn [1971] 2 All ER 1278, [1971] 1 WLR 1578, HL. So, for example, the Civil Service Appeal Board, a body established pursuant to Order in Council, is amenable to judicial review: see R v Civil Service Appeal Board, ex p Bruce [1988] 3 All ER 686, [1988] ICR 649, DC (affd [1989] 2 All ER 907, [1989] ICR 171, CA); R v Civil Service Appeal Board, ex p Cunningham [1991] 4 All ER 310, [1992] ICR 816, CA in LexisNexis, Halsbury's Laws of England, vol 61 (at 22 November 2017) Judicial Review, '2 Persons against whom judicial review may lie'.

[12] R v East Berkshire Health Authority, ex p Walsh [1985] QB 152 at 164–165, [1984] 3 All ER 425 at 430–431, CA, per Sir John Donaldson MR; Malloch v Aberdeen Corpn [1971] 2 All ER 1278 at 1282–1283, [1971] 1 WLR 1578 at 1582, HL, per Lord Reid. See also R v Secretary of State for the Home Department, ex p Benwell [1985] QB 554 at 573, [1984] 3 All ER 854 at 867 per Hodgson J; R v Trent Regional Health Authority, ex p Jones (1986) Times, 19 June (decision of a health authority not to appoint to the post of consultant orthopaedic surgeon a candidate recommended by the advisory appointment committee not susceptible to judicial review); R v Brent London Borough Council, ex p Assegai (1987) 151 LG Rev 891 (dismissal of school governor); R v Derbyshire County Council, ex p Noble [1989] COD 285, (1988) Times, 21 November, DC (deputy police surgeon); R v Salford Health Authority, ex p Janaway [1989] AC 537, [1988] 2 WLR 442, CA; affd on different grounds sub nom Janaway v Salford Area Health Authority [1989] AC 537, [1988] 3 All ER 1079, HL (secretary)in LexisNexis, Halsbury's Laws of England, vol 61 (at 22 November 2017) Judicial Review, '2 Persons against whom judicial review may lie'.