Case notes investigated by the Parliamentary Ombudsman
A retired diplomat claimed that he was unfairly deprived of the termination benefit due to him in terms of his contract when he terminated his employment. He further claimed payment for vacation leave he did not avail himself of.
Complainant had in addition to previous postings, served as Ambassador in a Maltese mission abroad between 2010 and 15 May 2013 and was the only Maltese Diplomat in that country. For this purpose he had signed an agreement with the Ministry for Foreign Affairs which had been extended until 31 July 2013. Clause 15 of this agreement stated as follows:
“In the event of a change of Government, or of the Prime Minister, or of the Minister responsible for Foreign Affairs, the Ambassador shall be expected to offer his resignation; the agreement may be terminated by either party forthwith. In the event that the Ambassador would be residing abroad, the last date of engagement till when he would be compensated for would however allow for a reasonable period of not more than six (6) weeks, to be decided upon in consultation between the Ambassador and the Permanent Secretary of the Ministry, which would run from the day when the Ambassador’s resignation is accepted, in order to permit the outgoing Ambassador to wind down his personal affairs and to make his travel and transportation arrangements. Upon effective termination of his appointment, the Ambassador would be then entitled to receive a terminal benefit equal to six months’ salary.”
Following the announcement of a change in Government, complainant submitted his “resignation in accordance with clause 15”. The Ministry approved his request for the termination date to be 15 May 2013.
On 7 May 2013 complainant requested the Ministry to compensate him for eleven (11) days vacation leave which, he claimed, he could not avail himself of. The Ministry immediately informed him that this was not approved and confirmed this decision despite complainant quoting Maltese employment legislation. At this stage the Ministry also informed complainant that his claim for a terminal benefit had also been rejected.
This Office requested the Ministry to justify its rejection of complainant’s claims. In its reply, the Ministry summarised its justifications for the refusal of both claims on the following grounds:
- in terms of clause 15 of complainant’s contract all ambassadors are expected to offer their resignation following a change in administration. Complainant had duly offered his resignation. However the administration had the discretion to accept such resignation (and recall the officials concerned) or else to allow him to retain his position. In fact the Ministry stated that it had decided to accept the resignation of those Ambassadors whose term (unlike complainant’s) had still more than a year to run their course. It therefore allowed complainant’s contract to continue while at the same time granting the terminal benefit to those whose contract had been terminated prematurely by Government. Complainant did not fall within the latter group since, according to the Ministry his resignation had not been accepted and he was therefore still a serving Officer and would have remained so had he not opted to terminate his contract; and
- in respect of refused compensation for unutilised vacation leave, the Ministry pleaded that it acted in terms of the Public Service Management Code (PSMC) which does not provide for such payment. Complainant had the possibility to avail himself of vacation leave before terminating his office, by postponing the date of termination. Furthermore, complainant had never, in the past, been refused any request for vacation leave.
Observations and comments
A. The Terminal Benefits
The Ombudsman agreed with complainant’s counter-comments that the Ministry was not correct in stating that he had offered to resign. In fact he had tendered his resignation strictly in terms of clause 15 of his contract which, amongst others, specifically stated that “the agreement may be terminated by either party forthwith” – this within the context of a change in Government and the provisions for the payment of a terminal benefit in such situation. In fact this clause further states that “Upon effective termination of his appointment, the Ambassador would be entitled to receive a terminal benefit …”. The Ombudsman considered that there was only one clear and unequivocal interpretation of this provision. He further argued that there was in fact the change in Government (as referred to in clause 15) and therefore what follows in the same clause of the agreement was binding to both parties, both in respect of obligations and of rights. Moreover the clause can validly be interpreted as granting complainant the right to terminate his contract forthwith following a change in Government. Complainant did so by giving notice of his termination of the contract on the first working day following the announcement of the general election result, even if his contract had only a few more weeks to run prior to its expiry. He gave a notice period to allow Government to make the necessary arrangements for his replacement since he was the only diplomat in that mission. The Ombudsman added that this was not a case (as argued by the Ministry) that Government exercised its discretion to retain complainant until his contract expires. He had not offered to resign, he had terminated his contract as was his right in terms of clause 15 of the contract. Nor had Government informed complainant that his resignation has not been accepted. On the contrary it informed him that it was accepted.
The Ombudsman further considered that the provision under the same clause for the grant of the terminal benefit in such situation was not linked to any condition and, as worded, applied irrespective of whether the termination was voluntary or forced following a change in Government and was irrespective of when the contract would have normally expired. The Ministry did not bring up one single valid argument as to why complainant was not entitled to the terminal benefit following his (early) retirement as he was entitled to do in terms of his contract. The contract binds both parties and no one party is free to depart from the obligations assigned on signing of the contract and no one party is authorised to interrupt such contract in a way that does not reflect the intention of both contracting parties.
Briefly summarised, the elements of this agreement that are a sine qua non to trigger its applicability and to entitle each of the contracting parties to revoke it were the following:
i. there was a change in Government, Prime Minister and Ministry of Foreign affairs;
ii. in such event, the Ambassador is bound to offer to resign;
iii. the termination of the contract is a unilateral right reserved to both parties. This right is absolute, unconditional and is not dependent on any condition other then the change in the administration. The resignation is effective the instance it is rendered, irrespective of whether it is voluntary or forced by Government; and
iv. as a direct consequence of the effective resignation of the Ambassador, he would be entitled to a terminal benefit equal to six months salary, irrespective of the reason for the resignation, and this benefit is in no way subject to any other condition.
The Ambassador cannot be denied such right unless it is proved that any one or more of the above constituted elements is lacking. The right of the Ambassador to terminate his contract is not subject to any right of the administration to retain existing serving officers. Nor is that right prejudiced because the administration chose or wished to retain his services after his voluntary resignation. Such right includes the payment of the terminal benefit.
The Ombudsman further considered article 1002 of the Civil Code which deals with the interpretation of contracts. This article lays down that:
“where, by giving to the words of an agreement the meaning attached to them by usage at the time of the agreement, the terms of such agreement are clear there shall be no room for interpretation”.
The agreement is not ambiguous and its wording presents no doubt as to what the parties intended. The rights and obligations it sets out, are clear and need no interpretation.
B. Payment for outstanding vacation leave
Complainant had countered the Ministry’s reasons for refusing him compensation for outstanding vacation leave by stating that although it was true that his requests for such leave were never refused he only requested leave when he had no commitments or obligations relating to his duties. He was the only diplomat in that mission and was not at liberty to so avail himself at any time, and his absence from office had therefore to be of limited duration. He had to act responsibly and respect protocol. While the PSMC does not provide for compensation in such situation, it does not on the other hand prohibit it. On the other hand Maltese employment legislation specifically provided that “…an employee has the right to claim financial compensation for any balance of outstanding leave that is due”. He moreover argued that the Ministry never advised him to avail himself of the leave prior to his retirement.
The Ombudsman noted that subsequent to his request for his termination to be effective on 15 May 2013, he had eight (8) days prior to this date drawn the attention of the Ministry to the outstanding 11 days vacation leave. The Ombudsman considered that complainant’s reference to local employment legislation must be considered in the light of the fact that the relevant provision of the Employment and Industrial Relations Act does not apply to the Public Service which, in respect of conditions of employment, is regulated by its own rules – the PSMC. While considering that this fact does not necessarily mean that payment in such conditions is outrightly ruled out – and here he referred to situations where requests for utilisation of outstanding vacation leave had been repeatedly requested and refused, complainant did not provide any convincing evidence that exigencies of the service prevented him for making such requests. He could have made such request before terminating his employment.
Complainant had further countered that the Ministry should have informed him that he could do so. The Ombudsman considered that this could have been a valid argument in the case of employees to whom the Employment and Industrial Relations Act applies but not in the case of Public Officer. Such obligation does not arise in their respect either through law or through PSMC. Although it would be better in such situations for management in the Public Service to act in the same way as its counterpart in the Private and Public Sector, one cannot ignore that it is in the interest of Public Officers, particularly those occupying higher level positions, to take such step themselves and ensure that they seek their right in the first instance and submit in time, an application for outstanding vacation leave.
In view of the above considerations, the Ombudsman:
i. sustained complainant’s grievance regarding the failure of the Ministry to pay him the terminal benefit in terms of clause 15 of his contract and recommended that the Ministry pays him the terminal benefit amounting to six months’ salary within six weeks from the date of the Ombudsman’s Final Opinion plus interest on the sum due from date of termination of the contract. This recommendation was accepted and implemented; but
ii. did not sustain complainant’s claim to compensation for outstanding vacation leave.
In the course of the investigation, complainant raised another issue. The Ministry had failed to submit complainant’s Termination Notice to the Employment and Training Corporation (ETC) as it was obliged by law. The Ombudsman found that there was an additional failure on the part of the Ministry since such notice was only submitted following queries from this Office, and was in effect, submitted with a delay of over five months.