Dr Lara Pace
In the judgment delivered on the 23 April 2018, in the names PD vs De La Rue Security Print Limited, the Court of Appeal in its inferior jurisdiction, presided over by Mr Justice Anthony Ellul, decided that the judicial acts of the case be re-sent to the Industrial Tribunal so that it can determine a compensation to be awarded to the applicant in accordance with the provisions of the law.
The facts of the case were as follows:
On 2 July 2008, the applicant PD filed an application before the Industrial Tribunal pursuant to which he claimed that the defendant company De La Rue Currency and Security Print Limited had terminated his employment unfairly, without a good and sufficient cause. By way of background, the applicant had claimed that he had been employed with the defendant company for a number of years and that he had taken an object with him to work with a view of fixing it during his free time. The applicant kept the object in his locker for a number of days and took a tub of glue from the company premises and put it in his pocket so that he may use it to fix the object after his shift. An official of the defendant company had realized that PD had been carrying this tub of glue and on the basis of this PD was accused of stealing the tub. Eventually, PD’s employment was terminated for good and sufficient cause because he had moved the tub from its place without permission. At this juncture, PD challenged the termination before the Industrial Tribunal and requested the Tribunal to order that he is either reinstated by the company or if this is not possible to order the company to compensate the applicant accordingly.
On the 4th June 2012, the Industrial Tribunal had decided that the defendant company had terminated the employee’s employment for a good and sufficient cause in accordance with the provisions of the law. PD challenged this decision on the 27th April 2016 and the Court of Appeal (in its inferior jurisdiction) decided that the defendant company had not observed the principle of proportionality when it decided to terminate PD’s employment for good and sufficient cause. Following this decision, the acts of the case where re-sent to the Industrial Tribunal so that the said Tribunal could give a remedy according to the provisions of the law.
On the 15th December 2016, the Industrial Tribunal ordered the defendant company to compensate the applicant the sum of eighteen thousand Euros (€18,000). The applicant appealed this decision and claimed that the compensation awarded by the Industrial Tribunal was not a fair one and did not reflect the provisions of the Employment and Industrial Relations Act (Chapter 452 of the Laws of Malta). On the other hand, the defendant company argued that the Industrial Tribunal’s decision was based on the provisions of the Employment and Industrial Relations Act and that PD had contributed towards his termination and therefore the defendant company argued that the Court of Appeal should uphold the decision given by the Industrial Tribunal.
On the 23rd of April 2018, the Court of Appeal in its inferior jurisdiction handed a judgment in relation to the compensation awarded by the Industrial Tribunal. PD argued the compensation awarded to him by the Industrial Tribunal did not reflect the provisions of the law, in particular PD relied on section 81(2) of the Employment and Industrial Relations Act, which states that in determining the amount of such compensation, the Industrial Tribunal shall take into account real damages and losses incurred by the worker who was unjustly dismissed, as well as other circumstances, including the worker’s age and skills as may affect the employment potential of the said worker”. On the basis of this section of the Employment and Industrial Relations Act, PD contended that the Employment and Industrial Relations Act obliged the Industrial Tribunal to take into consideration the real damages suffered by an employee as a result of an unjust termination.
The Court of Appeal referred to local jurisprudence on this matter and established a number of principles which emerged from local case law. Firstly, the Court of Appeal held that Industrial Tribunal is vested with the discretion to determine the quantum of the compensation in accordance with the Employment and Industrial Relations Act. Moreover, the Court of Appeal held that unless the compensation awarded is considered to be disproportionate or unreasonable, the Court of Appeal should not seek to alter the award given by the Industrial Tribunal. The Court of Appeal also stated that the Industrial Tribunal should base its decision on the principle of equity as a bonus pater familias and should take into consideration the facts of the case in accordance with the parameters of article 81(2) of the Employment and Industrial Relations Act, quoted above.
The Court of Appeal also noted that the factors outlined in article 81(2) of the Employment and Industrial Relations Act, which should be taken into account by the Industrial Tribunal when determining the compensation are not exhaustive. Finally, the Court of Appeal stated that Maltese Law does not impose a cap on the amount which the Industrial Tribunal can award but only outlines the parameters as to how the compensation should be determined. Given this, the Court of Appeal concluded that the Employment and Industrial Relations Act contemplates that the compensation should consider both real and future damages. The Court of Appeal acknowledged, that the applicant was expecting the award to consist of the following (i) a compensation of the wages he lost whilst he was unemployed; (ii) a compensation of the difference between what he earned whilst he was employed with the defendant company and his new employment; and (iii) a compensation to cover a benefit that he would have been entitled to upon retirement, had he remained in employment with the defendant company. According to PD the Industrial Tribunal should have awarded him a compensation of at least ninety thousand Euros (€90,000).
The Court of Appeal after examining all the documentation and evidence held that there was a substantial difference between the compensation awarded by the Industrial Tribunal and the amount of money which the employee actually lost as a result of his unfair dismissal. The Court of Appeal also noted that the Employment and Industrial Relations Act does not prohibit the Industrial Tribunal from requesting the parties to produce more evidence in relation to the compensation to be awarded, especially since the Industrial Tribunal is vested with the power to regulate its own proceedings.
The Court of Appeal stated that since the applicant had been unfairly dismissed from his employment, the applicant has a right to receive a compensation which reflects the damages which the applicant incurred as a result of his employer’s decision. According to this Court of Appeal, the Employment and Industrial Relations Act is clear in relation to the elements which the Industrial Tribunal needs to take into consideration when awarding a compensation and further stated that when the Industrial Tribunal exercises its discretion to award a compensation, the Industrial Tribunal is obliged to explain clearly how the award is being determined. The Court of Appeal also noted that the Industrial Tribunal should also take into consideration the specific circumstances of every case and the employee’s conduct leading to his dismissal.
The Court of Appeal also pointed out that whilst the Industrial Tribunal is vested with discretion when determining the awards, this discretion needs to be excised in a reasonable manner and should be reasonable with the context of every specific case. The Court of Appeal concluded that in this specific case, the Industrial Tribunal awarded 20% of the total amount which the applicant requested and had not provided any justification as to why the remaining 80% was not awarded. Finally, the Court of Appeal upheld the applicant’s request and ordered that the judicial acts be re-sent to the Industrial Tribunal so that the Industrial Tribunal can determine the compensation according to Law.
Dr Lara Pace is an Associate at GANADO Advocates