clr/1988/1988_1_103.pdf

(1988)intimated that in case of future neglect of duty their conduct would be reported to theMunicipal Committee fordisciplinary action. Intheend,however, theywerebothdismissedbytheTownClerk, whose decision was later affirmed by the Mayor. No disciplinary action wastaken againittheappellantsbefore theirdismissaland no 5 opportunitywasgiventhemtoanswerthecomplaintsthatledtotheir dismissal. Asaresult theappellantsclaimeddamages forwrongful dismissal. Their applications weredismissed bytheArbitrationTribunalon the ground that the dismissals were justified by "section 5 (0 of The 10 Termination of Employment Law24/67. Hence these appeals by way of case stated. Three issues were raised for determination, i.e.(a)Theright,ifany,oftheappellants to anopportunity tobe heardbefore dismissal,(b)Theauthority,ifany, of the town clerk todismissthem,and (c)the applicability of section 15 72of Cap. 242. Held,allowing theappeals:

(1)(a)RecentEnglish caselawsuggests that the principles of the common lawgoverning the relationshipof master and servant have undergone a perceptible change reflecting a reappraisal of the importance of the right to work. (See Jupiter 20 General Insce Co. v. Shroff [1937] 3 All E.R. 67, Dobie v. Bums International [1984] 3 All E.R. 333, Malloch v. Aberdeen Corporation [1971]2AllE.R. 1278,Ridge v.Baldwin [1963]2AllE. R.66, Stevenson v. United Road TransportUnion [1977]2 AllE.R. 941, CCSU v.Ministerforthe CivilService [1984]3AllE.R. 935). 25 (

1. b)What emerges from the caselaw is that the right to be heard before alteration of the terms of a contract of employment will be readily inferred whenever the contract of employment or the conduct ofthe employer leavesroom for its application. (
2. c)In these cases the Municipality by its representations and 30 practice created a legitimate expectation in the mind of the appellants that theywould not bedismissed foranallegged misdeed unlessprioropportunity wasgiventhemtobe heardinthematterof the complaint. In fact, they were led to believe that a disciplinary procedure would be followed for the establishment of misconduct 3 5 and the imposition ofsanctionsincludingtermination ofthe contract of employment. The right tobe heard should, in the circumstances, be deemed to have been impliedly incorporated in theircontractof employment.

(2)Inaccordance with the provisions ofs.18ofthe Municipalities 40 Law 1964, the exercise of the powers of a municipal corporation is 104 ICXJt. 5 10 15 PatlUrisv.N**IaRTpal Cttee entrusted, save where provision to the contrary is made, to the Municipal Committee. Consequently, the town clerk had no authority to terminate the employment of the appellants and the affirmation of the decision by the Chairman of the Municipal Committee did not fillthe vacuum of authority.

(3)The authority of the Mayor under s.72 is confined to the employment of casual labour for meeting extra ordinary needs of the Municipality. The employment of the appellants was not regulated by the provisions of s.72 - Cap. 240 (as adopted). Moreover section 72 does not lay down that the Mayor may, in addition to employing casual personnel, dismiss them as well. Termination of the contract of employment rested solely with the Municipal Committee.

(4)Unlike contracts of employment governed by public law, wrongful dismissal in the domain of private law causes the termination ofthecontractofemployment, which isrestedsolely on the relationship of mutual confidence between employer and employee.Noquestion of reinstatement totheirposition arises. Appeals allowed with costs.Cases remitted totheArbitration Tribunal for the determination of the damages. 20 Casesreferred to: KEMfTaxi) Ltd. v. Tryfonos

(1969)1CL.R.52; 25 Constantinou v. Woolworth

(1980)1C.L.R.302; Jupiter GeneralInsce. Co. Ltd. v.Shroff [1937]3AllE.R.67; Dobie v.Bums International[1984]3 AllE.R.333; Mallochv.Aberdeen Corporation [1971]2AllE.R. 1278; Ridge v.Baldwin [1963]2AllE.R.66; 30 Stevenson v. UnitedRoad TransportUnion[1977]2AllE.R.941; CCSUv. Ministerforthe CivilService [1984]3 AllE.R.935; Sanders v.Neafe [1974]3 AllE.R.

1. Cases stated. Cases stated by the Chairman of the Arbitration Tribunal 3 5 relativeto hisdecisions dated 16th May, 1981 arid 16thJuly, 1981 105 Patikkbv.N**UM*pal C t t e · U988) in proceedings under sections 3 and 9 of the Termination of Employment Law, 1967 (Law No. 24/67) instituted by Sawas Patikkis and Christodoulos K. Glykys against the Municipality of Nicosia whereby their claimsfor damages for wrongful dismissal were dismissed. 5 E.Efstathiou, for the appellants. K.Michaelides, for the respondents. Cur. adv. wit. TRIANTAFYLLIDES P.: The judgment of the Court will be delivered byPikisJ. PIKISJ.:Aquestion ofgreatlegalimportancehastobe resolved inthese appeals:The right,ifany,ofanemployeewhose contract of employment is governed by private law to be heard before dismissal for alleged default of duty. Itarisesinthe contextof two appeals made by way of case stated from decisions of the 15 Arbitration Tribunal whereby the claims of two employees of the Municipality of Nicosia, for damages for wrongful dismissal, were dismissed. The trial Court found that the employers had a valid cause for the dismissaloftheiremployeeswhose conductand performance 20 at work fell short of the devotion to duty and subordination to superiors expected of an employee. They held that their conduct was incompatible with their duties and as such could not be reasonablytolerated.Therefore, theirdismissalwasjustified under the provisions of s.5(f) of the Termination of Employment Law 25 1967, instancing specific causesfor which dismissal isjustified. Briefly, thefactsand circumstancesrelevanttothe employment and dismissal of the two appellants were the following: SawasPatikkisservedasalabourerwiththeMunicipalityfromthe year
2. His duties involved driving a cesspool lorry. On a 30 numberofoccasionshewasreportedforlaxityinthe performance of hisduties,friction inhisrelationshipwithfellowemployees and insubordination. On every occasion he wasgiventhe opportunity to answerthe complaints. On 20.10.80 the town clerkterminated hisemployment onthe 35 basisofacomplaintthatappellantwasguiltyofrefusal toobeythe instructions of his superiors and unacceptable conduct. The complaintleadingtohisdismissalwasnotbroughttohisnoticenor •106 10 1CJLR. Patikkis v.N*sla ftTpal C t t e e POdsJ. was he given an opportunity to be heard in the matter before termination ofhisemployment.Asitemergesfrom theletterofthe town clerk itwas felt that the conduct of the appellant could no longerbe tolerated. 5 The facts surrounding the employment of the other appellant, Chrystodoulos Glykys, as well as his dismissal, bear close resemblance to those affecting Sawas Patikkis. He was also an employee of the Municipality, of long standing, having commenced employment with the Municipality as a labourer in 10
3. On 21/10/80 hewasdismissed on the basisof a complaint that he was not devoting his working time exclusively to the discharge of hisduties,sweeping of streets. Inhiscase, too, there were previous complaints of indifference and lack of devotion to his duties. Like Patikkis, he had been repeatedly apprised of the 15 complaints made against him and warned of the consequences. However, the complaints were refuted and he had on every occasion a different storytotellfrom that of hisaccusers. Itissignificant tonoticethatboth employeeswere,priortotheir dismissal, warned that in case of future breaches disciplinary 20 action would be taken against them (warning to Patikkis administered on 4/6/79 and to Glykys on 7/10/80). It was intimatedthatincaseoffuture neglectofdutytheirconduct would be reported totheMunicipalCommittee for disciplinaryaction.In the end the matter was not referred to the Municipal Committee 25 and the decision rested solely with the town clerk though subsequently affirmed by the Mayor, as may be gathered from correspondence with the appellants. No disciplinary action was taken against the appellants before their dismissal and no opportunity was given them to answer the complaints that led to 30 their dismissal. The Tribunal held that the Nicosia Municipal Service Regulations 1976* had no application in the case of the appellants as they did not qualify as «municipal employees». The application of the disciplinary Code established by the Regulations was confined to municipal employees serving in an 35 organicpostwiththeMunicipality.Thecontractofemploymentof the appellants was solely regulated by private law and as such governed by the relevant principles of the common law. Their employment was subject to the provisions of s.72 of Cap. 240** that empowered the Mayor to employ casual personnel on daily 40 wages forthe needs of the Municipality.The trialCourt dismissed thesubmission thattherulesofnaturaljusticefound application in *(RegulatoiyAdministrativeAct 11/77, No.U · OfficialGazette 14/1/77). **(Madeapplicableby theprovisionsofLaw 64/64}. 107 Plkls J. PatOddsv.N*«laM*palCttee

(1988)thecaseoftheappellants.Astheconductoftheappellantsgave therespondentsproperjustification fortheirdismissalunders.5(f) of Law 24/67, their dismissal was valid notwithstanding the absence of prior notice or warning or failure to afford them an opportunitytobeheardinthecomplaintleadingtotheirdismissal. 5 Thefollowingthreequestionsmustbeanswered:(a)Theright,if any of the appellants to an opportunity to be heardbefore thedismissal. (b)Theauthority,ifany,ofthetownclerktodismissthem,and (c)theapplicabilityofs.72-Cap.240. 10 (A)THERIGHT OFAN EMPLOYEE TOBEHEARD BEFORE DISMISSAL UNDER CONTRACTS OF EMPLOYMENT GOVERNEDBYPRIVATELAW: Counsel for the appellants submitted the 1976 Regulations appliedindistinguishablytoallemployeesoftheMunicipalityand 15 noexception couldbemadeinthecaseoflabourers.Theanswer to thiscontention, a fairly obvious one, isthe one advanced by counselfortheMunicipality,thatis,thattheRegulationshaveno application to appellants as a matter of construction of the definition of «municipal employees» furnished by s.2 of the 20 Regulations.Amunicipal employee isdefined asone whoholds permanently, temporarily oronan actingbasis,a position inthe establishment ofthe Municipality.Theappellants didnotbelong tothatclassofpersonnel. Hadthatbeen thecasethecontractof their employmentwould havebeen governed bypubliclawand 25 reviewofitsbreachwouldlieexclusivelywiththeSupremeCourt under Article 146 in the exercise of itsrevisional jurisdiction.A more consequential submission isthattherulesofnaturaljustice should, in view of the position of the corporation employing them, be deemed to be incorporated in their contract of 30 employment. Thisunderstanding wasreinforced bythe conduct and practice of the respondents to invite the response of the appellants to complaints of default of duty. Counsel for the respondents acknowledged that a right to be heard prior to dismissal may exceptionally be implied in a contract of 35 employment governed byprivatelaw.Thismayoccurwhenever a statute ties dismissal to such a requirement or the contract specifically provides for such a right. An ordinary contract of employment, on the other hand, is solely regulated by the provisions of the common law, as the Supreme Court 40 acknowledged in the case of HEM(Taxi) Ltd. v.Anastassis 108 1 C.L.R. Patikldsv.N**JaM*palC t t e e POds J. Tryphonos*. The rules of natural justice have no application to contracts of private employment, a fact noticed by the Supreme Court in Constantinou v. Woolworth**. To be precise the Court did not inthat case rule out the application of the rulesof natural 5 justice in every case.Adictum of the Court (p.318) suggests that the rules of natural justice do not necessarily find application in contractsofemploymentgovernedbyprivatelaw.Section5ofthe Termination of Employment Law (24/67) is modelled on the common law understanding of a contract of employment and 10 principles relevant to the right of an employer to dismiss his employee. This was affirmed in the case of KEM Taxi, and Constantinou supra.Thecontinuanceoftherelationshipofmaster andservant, asthe«relationship»wastermedatcommon law,was dependent onthesubsistenceofaclimateofconfidence and trust 15 between employer and employee. Conduct inconsistentwith that standard offidelityentitledtheemployertoterminatethe contract. Recent English caselaw suggests that the principles of the common law governing the relationship of master and servant have undergone a perceptible change reflecting a reappraisal of 20 the importance of therightto work. InJupiter General Insce. Co. v. Shroff*** it was recognised that instant dismissal is a strong measure justified only in exceptional circumstances. For an isolated incident to justify dismisal, it must be of some gravity; though a series of incidentsnone of which would in itself justify 25 dismissal may compound a sufficiently grave case to warrant dismissal. The significance of employment in one's life has been recognised as all important for human well being. Hence it was proclaimed inDobie v.Bums International**** that an employer 30 mustnotbeoblivioustotheinjustice thatmaybeoccasionedtoan employee asa result ofhisdismissal.The length ofhisservice, as wellasthe likelihood of finding fresh employment, must be taken intoaccount. These observations weremade inthecontextof the 1974 English legislation governing the award of damages for 35' unfair dismissal and as such are not immediately applicable to Cyprus.Nevertheless, they signal a new eraand fresh awareness of the importance of the right to work and the need for its protection. *

(1969)1 C.L.R.52.. **

(1980)1 C.L.R.

1. •••(1937J3A11E.R.
2. "•*(l984)3AUE.fi.333(CA). 109 Pilrfs J , P a t i k k i s v. N*«la M'pal C'ttee

(1988)In Malloch v. Aberdeen Corporation* the House of Lords noted thatthe common lawrecognised norighttoanemployee to be heard as a condition precedent to his dismissal. The ascertainment of the facts by the employer and their objective validity,sufficed tojustify dismissal.Onthe other hand, theCourt 5 did acknowledge that in certain species of contracts of employment the right tobe heard maybe implied from the terms or circumstances of employment. Lord Reid in his judgment stressed that public bodies are generally in a different position from a private employer though, with regard to contracts with 10 lowergradesofemployees,theyareordinarilyinasimilarposition as a private employer. Nonetheless itwas observed that the right tobe heard inone' sdefence foranallegedmisdeedis,under any circumstances, an elementary protection. Therefore, if at all reconcilable with the terms of the contract of employment, it 15 should be implied. In Ridge v. Baldwin** the House of Lords decided that the right tobe heard isvery much dependent on the nature ofthe contract ofemployment, and drewattention tothree categories of such contracts, thatis, (a)pure master and servant contracts, 20 (b)office heldduringpleasureofthe employer (publicoffice) and (c) contracts expressly safeguarding the right to be heard before dismissalfor misconduct. In the first case no right to be heard accrues to the employee. The caseofStevenson v. UnitedRoad TransportUnion***ishighly 25 instructivebecauseitsuggeststhatarighttobeheardmaybe more readily inferred whenever a decision leadingtodismissalismade by someone other than the master stricto senso, in that case a committee of the Union. The most consequential case for the purposes ofthiscase and, 30 to my mind, a landmark in the development of the law is, CCSU v.Ministerforthe CivilService****.Theimportance ofthatdecision for the purposes of the present case lies in the"acknowledgment that a right tobe heard mayderive notonlyfrom thetermsof the contract but from the practice followed by the employer at work 35 relevant to the modification of the terms of the contract or their *11971}2AllE.R.

1. ••[1963} 2AllE.R. 66,
2. •"(1977}2A11E.R.
3. "9*[1984}3A1IE.R.
4. 110 1C.L.R. Patikkisv.N'siaM'palCttee PTJdsJ. alteration tothedetriment oftheemployee.Iftheemployerbyhis conduct creates a legitimate expectation in the mind of the employeethathiscontractofemploymentwillnotbealteredtohis detriment without prior opportunity being afforded to be heard, 5 the employer cannot defeat the expectation by falling back on strictcontractualobligations.Insuchcircumstancestherightofthe workertobe heard must be honouredand given effect to before any decision is taken to change the terms of employment. Although thedecision ofCCSU,supra,wastakeninthecontextof 10 examination of the amenity of judicial review of the impugned government action, itssignificance remains undiminished for the purposesofthiscaseforitaffected thenghtsofan employer under a contract of employment governed byprivate law. Asnoticedtherightofaworkertobeheardbefore modification 15 ofthetermsofhiscontractofemployment, including termination, isan aspect of thewiderprinciple of fairness. What emerges from the caselaw isthat the right to be heard before alteration of the terms of a contract of employment will be readily inferred whenever the contract of employment or the conduct of the 20 employerleavesroomforitsapplication.Thefactthatacontractof employment is,intheabsence ofstatutoryregulation governedby common law,does notperse militateagainstthe ackowledgment of such right, nor willthe Court exclude itsapplication whenever room existsfor such course.The right tobe heard isan aspectof 25 fairness,anallembracingconcept,thatengulfswiththepassageof time -an increasing number of relationships governed by private law. Notwithstanding the absence of a provision in the contract of employment of the appellants recognising a right to be heard 30 before dismissal, the Municipality by its representations and practice created a legitimate expectation in the mind of the appellants that they would not be dismissed for an alleged misdeed unless prior opportunity was given them to be heard in the matterofthecomplaint. Infact, they were ledtobelievethata 35 disciplinary procedurewouldbefollowed forthe establishmentof misconduct and the imposition ofsanctionsincluding termination ofthecontractofemployment.Therighttobeheardshould,inthe circumstances,bedeemedtohavebeen impliedlyincorporatedin theircontract of employment. 40 The practice followed by the Municipality was consonant with its duties under article 28.1 to treat its employees in a spirit of equality. Though a distinction could be made between members belonging to the establishment of the Municipalityand members who did not belong to that class of employees. The 111 PudsJ. PatOddsv.N*slaM'palCttee

(1988)acknowledgment of a right to be heard to every employee in an accusation of misconduct would ensure that fundamental principles of fairness were adopted and adhered towithregard to every member of the employees of the Municipality. Inthis case the decision to dismisstheappellants wastaken bythetown clerk 5 on the basis of an accusation of misconduct inbreach oftheright of the appellants to be heard in the matter before a decision was taken affecting their employment. (B) AUTHORITY TO DISMISS EMPLOYEES OF THE MUNICIPALITY: Inaccordance with the provisions of s.18 of the Municipalities Law 1964, the exercise of thepowers of a municipal corporation isentrusted, save where provision to the contrary ismade, to the Municipal Committee. Consequently, the town clerk had no authority to terminate the employment of the appellants and the 15 affirmation of the decision by the Chairman of the Municipal Committee did not fill the vacuum of authority. Authority to dismissresided exclusively withthe Municipal Committee.Thatis an additional reason for declaring the dismissal of the appellants 0 f l wrongful. (C) The authority of the Mayor under s.72 is confined to the employment of casual labour for meeting extraordinary needsof the Municipality. The employment of the appellants was not regulated by the provisions of s.72 - Cap. 240 {as adopted). Moreover, s.72 doesnotlaydownthattheMayormay,inaddition 25 toemploying casualpersonnel,dismissthemaswell.Termination of the contract of employment rested solely with the Municipal Committee. Inview of the above the dismissal ofthe appellants was made contrary to and incontravention of theirrighttoput forward their 30 case in answer to the accusations that led to their dismissal. Consequently, theirdismissalwas wrongful. Unlike contracts of employment governed by public law, wrongful dismissal in the domain of private law causes the termination of the contract ofemployment because, as explained 35 in Sanders v. Neale*, it destroys the relationship of mutual confidence between employer and employee. No question of reinstatement to their position arises. Infact, no such jurisdiction vests inthe Arbitration Tribunal. Itsjurisdiction isconfined to the award of the damages for wrongful dismissal in accordance with 40 the provisions of the law. •11974}3AllE.R.327. 112 10 1C.L.R. Patfldde v.N'elaM'palC'ttee PildeJ. Theappealsareallowedwithcosts.TheordersofthetrialCourt aresetaside.ThecasesareremittedtotheArbitrationTribunalfor determinationofthedamagestowhichtheappellantsareentitled. Appealsallowedwithcosts. 113