By way of background, the Respondent held office with the Appellant as an accountant since 1986. He was summarily dismissed on 21 February 2007 for gross misconduct. One of the reasons that led to his summary dismissal was his erroneous calculation of the sum payable to Mr Rivalland, the general manager of the Appellant, on his early retirement. The Board of Directors of the Appellant had approved the principle of payment and the heads of payment that formed part of Mr Rivalland’s retirement package. The Appellant did not share a copy of the minutes of its Board of Directors’ meeting with the Respondent who nevertheless received instructions from two members of the Board of Directors as to the figure to be used to compute the amount due to Mr Rivalland.
The Appellant took the view that the sum actually paid to Mr Rivalland exceeded the statutory dues by MUR 8 million. Thus, instead of paying Mr Rivalland the sum of MUR 14 million [± USD 389,000], the Appellant actually paid him the sum of MUR 22 million [± USD 612,000]. The Respondent appeared before a disciplinary committee to answer charges, the main charge being the wrong computation of the sum payable to Mr Rivalland. He was summarily dismissed for gross misconduct.
The Respondent lodged a claim for unjustified termination of employment before the Industrial Court which dismissed the claim on the grounds that the termination of employment was justified. The Respondent challenged the determination of the Industrial Court before the Supreme Court which upheld his appeal and quashed the determination of the Industrial Court. The Appellant appealed to the Privy Council challenging the judgment of the Supreme Court.
In view of the date on which the Respondent took employment with the Appellant, the repealed Labour Act 1975 (Labour Act) was the applicable legislation. In particular, section 32(1) of the Labour Act states that:
“(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 seven days …”
The issue before the Privy Council was whether the Respondent’s summary dismissal was one wherein “[the Appellant as employer] cannot in good faith take any other course”. In other words the question to be answered was whether the summary dismissal of the Respondent was the ‘only option’ available to the Appellant as employer.
In dismissing the appeal, the Privy Council upheld the judgment of the Supreme Court which found that the Appellant had failed to establish that it could not in good faith take any other course of action than dismissing the Respondent. According to the evidence before the Industrial Court ,the Appellant’s representative disclosed that the advice from its legal advisers was to the effect that there were no grounds to terminate the Respondent’s employment. In this regard, the Privy Council drew a distinction between the question of whether (i) a company has a valid reason to terminate an employment and (ii) an employer finds itself in a position by which it cannot in good faith take any other course of action than dismissing the worker. The Privy Council took the view that in scenario (i), the question addresses the issue of whether misconduct was a ground for dismissing a worker. However, in scenario (ii), the question addresses the issue of whether “in all the surrounding circumstances the only course reasonably open to the employer was to dismiss him”. In other words scenario (ii) asks the question of whether dismissal was “the only option” in the terms of the decision of the Privy Council in Bissonauth v The Sugar Fund Insurance Board  UKPC 17.
The case of United Docks Ltd v De Speville can be viewed as a protectionist determination vis-à-vis workers both from the perspective of the Supreme Court and the Privy Council. Clearly, it has left the assessment of whether an employer is of “good faith” as a matter of fact to be ascertained on the merits of each case.
Undoubtedly, United Docks Ltd v De Speville augurs an important change of perspective for Mauritiun courts when they determine the fundamental question of whether the termination of employment was justified. Indeed, even though United Docks Ltd v De Speville turned on an interpretation of the repealed Labour Act, nevertheless, its successor, the Employment Rights Act 2008 has enshrined the requirement of good faith at its section 38(2) which prohibits an employer from terminating a worker’s employment for misconduct unless “he cannot in good faith take any other course of action”.
If you have any questions or require further information on this matter, please contact us.
With businesses facing unprecedented challenges in 2020, data protection and cyber security regulati...
Facilitation of Cross Border Restructuring
As the impact of the Covid-19 pandemic deepens and a prolonged “U” shaped recession looks increa...
COVID-19 Merger and Acquisition Update
In these uncertain times we have had numerous enquiries from clients as to what we think is going to...
Popular demand: Offshore incorporated and publicly listed
Did you know that there are over 300 offshore companies listed on the London Stock Exchange? Or that...
Mauritius Court accepts Appleby’s proposition in landmark decision
Appleby acted for the successful Respondent in the landmark decision of Mauritian Eagle Leasing Comp...