South Ocean Development Company Ltd v Deleveaux

CourtCourt of Appeal (Bahamas)
JudgeOsadebay, J.A.
Judgment Date15 September 2005
Neutral CitationBS 2005 CA 285
Docket NumberCivil Appeal No. 10 of 2005
Date15 September 2005

Court of Appeal

Ganpatsingh, J.A.; Ibrahim, J.A.; Osadebay, J.A.

Civil Appeal No. 10 of 2005

South Ocean Development Company Limited

Ian Winder, Esq, Counsel for appellant.

Rawson McDonald, Esq, Counsel for respondent.

Employment law - Termination — Damages — Whether assessment of damages was correct — Breach of contract — Disciplinary procedure in employment contract not followed — Measure of loss is determined as the time it would have taken to follow the procedure — Disciplinary procedure would have taken four weeks — Appeal allowed — Award of damages made by Tribunal was set aside.

Osadebay, J.A.

The respondent, Eltha Deleveaux, was employed by the appellant, South Ocean Development Company Limited, as the general manager of their hotel property, which they operated at South Ocean in the western end of New Providence, Bahamas.


Her annual earnings, which included her salary and fringe benefits, amounted to a total of $170,700.00 per annum.


By a letter dated the 17th of July, 2001, the respondent was summarily dismissed from her employment for the reason which, before the Industrial Tribunal, was described as her substandard work or performance. This was conceded to by counsel for the appellant before the Industrial Tribunal.


She was paid a total of $17,424.24 of which $6,538.56 represented four weeks severance pay, and $6,538.56 represented four weeks pay in lieu of four weeks' notice.


The respondent brought a claim for damages for breach of her contract of employment and for wrongful dismissal. She claimed a total of $176,425.00 made up as follows:


10 months salary - $142,250.00, less one month's severance pay - $6,538.46. Interest at 10% from termination, 17th of July, 2001 to the date of ruling, 22nd of July, 2004 - $40,713.46, making a total of $176,425.00.


The Industrial Tribunal awarded the respondent damages as follows:


6 months salary which amounted to $85,350.00, less amount already received which was $17,424.24. Interest was granted at 10% per annum from the date of the decision to the date of payment, the total of which was $67,925.76.


The appellant appeals against that decision, and the respondent also appeals against that decision seeking to increase the award somehow.


The appellant's case before the Tribunal was that the respondent was summarily dismissed essentially for poor or substandard performance. It was argued that the respondent's termination was carried out in accordance with the terms of the contract of employment, and that if the appellant intended to dismiss the respondent pursuant to the disciplinary procedure in the contract, there would have been some reference made in the termination letter to that clause.


It was submitted that notwithstanding that the appellant identified a reason for the termination, it was not obliged to invoke the contractual disciplinary procedure. The respondent was not, therefore, entitled to compensation more than the four weeks pay in lieu of notice which she has already received.


The Industrial Tribunal concluded that from the letter of dismissal, it was evident that the respondent was dismissed for reason of her substandard work or performance. That fact was conceded to by counsel for the appellant. Once the dismissal was for substandard work, then the procedure set out in the contract for dealing with such matter ought to have been followed. It ruled that the respondent was entitled to be compensated for the period of time it would have taken to exhaust the disciplinary procedure under the contract. The Tribunal found that six months was reasonable, having regard to the position held by the respondent for the completion of the disciplinary procedure. It, therefore, awarded the respondent damages as has been stated earlier.


The question on appeal, therefore, is whether the Industrial Tribunal was correct in assessing damages as it did.


The “notice requirements” clause of the respondent's contract of employment provides that “either party may terminate the contract by giving the other party four weeks notice in writing,” and that the company reserves the right to pay salary in lieu of notice.


The contract provides that:

“On the first and second occasion on which there is a breach of general discipline, for example, poor timekeeping, unauthorised absence, substandard work or such conduct as may be detrimental to the harmonious running or reputation of the Hotel, a written warning will be given to the employee and will be entered...

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