I was subject to very similar treatment in the very same small Pacific airline. The instruction from on high was to prolong my line training until I got sick of it and walked away. The guy did not want me there because he knew that I was a likely candidate to replace him (he had been a naughty boy). After about three months of this nonsense, pulling full pay and living very well in hotels thank you, I casually mentioned to one of the local politicians that the republic's money was being squandered on excessive training - of a foreigner, no less. With the pollie taking an interest, then I demanded a check ride with a CASA observer (the airline was running Australian registration).
Rather than have CASA aboard, they hastily agreed to do the check.
Shortly after what was the most unpleasant time in my career, Karma kicked in and my tormentor self destructed.
Yes, one must be very careful with any merit system to ensure examiners are kept honest.