Court: Firm failed staff

 THE National Court in Madang has ruled that Telikom PNG Ltd failed to discharge its obligation that redundancy payments to its former employees were tax exempt. 

Roslyn Yanoda and 12 other plaintiffs filed proceedings against Telikom and the State in the National Court after they were aggrieved by their redundancy payments. 

Justice David Cannings, in his 20-page judgment, said parties had 21 days to reach agreement on the amounts due and payable to the plaintiffs. 

Failure to do so would result in the court issuing directions for a trial on assessment of those amounts. 

Cannings said Telikom needed to pay each plaintiff the amount it deducted from their gross payments and remitted to the Internal Revenue Commission to discharge its obligations according to the NEC decision No 107 of 2011. 

“The reason I say that these orders are necessary to do justice is that the plaintiffs were lured into volunteering for redundancy by the legitimate expectation that their payouts would be exempt from tax,” Cannings said. 

“There was a NEC decision. Telikom was obliged to implement it.”

In 2011 the NEC decided to implement a “National Broadband Project Implementation Study”, which would involve restructuring the State-owned telecommunications network and the State-owned company, Telikom. 

That led to a number of employees being made redundant

As part of Decision No 107/2011, the NEC approved the exempt tax obligations on redundancy entitlements of Telikom and/or its subsidiaries staff affected by the implementation of the Implementation Study recommendations.

Telikom subsequently entered into a memorandum of agreement with a union representing its employees regarding the redundancy exercise necessitated by the company’s restructure. 

The agreement set out which employees were eligible for redundancy and how their redundancy payments would be calculated. 

Yanoda and others were former Telikom employees based in Madang who were eligible for redundancy and elected to take part in the redundancy exercise.

They were each paid redundancy payments calculated in accordance with their length of service and other criteria prescribed in the MoA. 

They accepted the payments in February 2013, but were aggrieved by the amounts of the payments and filed their court case in the National Court last year. 

Approximately 500 Telikom employees participated in the redundancy exercise.