Fiji Bank and Finance Sector Employees Union v ANZ Banking Group Ltd [2004] FJAT 33; Award 27 of 2004 (29 July 2004)

THE REPUBLIC OF THE FIJI ISLANDS

NO. 27 OF 2004

AWARD OF
THE ARBITRATION TRIBUNAL

IN THE DISPUTE BETWEEN

FIJI BANK AND FINANCE SECTOR EMPLOYEES UNION

AND

ANZ BANKING GROUP LIMITED

FBFSEU: Mr P Rae
ANZ: Mr J Apted

DECISION

This is a dispute between the Fiji Bank and Finance Sector Employees Union (the Union) and the ANZ Banking Group Limited (the company) concerning the summary dismissal of Ms Maria Hussain.

A trade dispute was reported by the Union on 29 July 2002. The Permanent Secretary accepted the report and referred the dispute to a Disputes Committee. Subsequently the Minister authorized the Permanent Secretary to refer the dispute to an Arbitration Tribunal for settlement pursuant to section 5 A (5) (a) of the Trade Disputes Act Cap 97.

The Dispute was referred to the Permanent Arbitrator on 21 October 2002 with the following terms of reference:

"........for settlement over the summary dismissal of Maria Hussain with effect from 16 July 2002 for which the Union views the bank’s action as unjust, unreasonable, harsh and unfair as well as in breach of clause 13 (a), (b) (1), (2) and (11) and 14 (e) of the Collective Agreement and seeks Maria’s re-instatement without loss of benefits."

The Dispute was listed for preliminary hearing on 5 November 2002. On that day the parties were directed to file preliminary submissions by 31 January 2003 and the hearing was set down for 25 February 2003. Submissions were filed in due course.

At the request of the Company’s legal representative and with the agreement of the Union, the Tribunal vacated the hearing date and the Dispute was listed for mention on 3 April 2003. On that day the Dispute was re-fixed for hearing on 14 August 2003. That date was also vacated and on 22 August 2003 the Dispute was re-fixed for hearing on 15 January 2004. Once again that date was vacated and the Dispute ultimately came on for hearing on 1 March 2004.

During the course of the hearing, the Company called five witnesses. The first four witnesses adopted a prepared statement as evidence in chief and then each was cross-examined by Mr Rae for the Union. The fifth witness, Mr Greg Collier, gave his evidence in the usual manner and was also cross-examined by Mr Rae. The Union called two witnesses including the Grievor.

The terms of reference determines the limits of the Tribunal’s jurisdiction in this and any other dispute. In this Dispute the Tribunal is required to determine two issues. First, whether the summary dismissal was unjust, unreasonable, harsh and unfair. Secondly, whether the Company has breached clauses 13(a), (b) (i) (1) and (2), b (ii) and 14 (e) of the Collective Agreement.

The submission filed by the Company raised an issue concerning the jurisdiction of the Tribunal. The company relies on the decision of the Fiji Court of Appeal in Fiji Aviation Workers Association v Ai Pacific Limited and Arbitration Tribunal (Civil Appeal No. 33 of 2001) delivered on 11 April 2003 for the proposition that the Tribunal is restricted to a consideration of whether a breach of the collective agreement has occurred. The initial trade dispute in that appeal concerned non-compliance with the agreement on redundancies.

As the Court of Appeal noted on page 9 of its Judgment:

"The applicable source of law in Fiji on issues of employment is to be found in the common law of England as at 2 January 1875 in accordance with section 22 of the High Court Act Cap 13. Any revision of these principles by statute in England is not applicable in Fiji unless the same statute in England is adopted or equivalent statute is passed by the Parliament in Fiji."

At common law an employer has a right to dismiss his employee without notice on the grounds of the employee’s serious misconduct. This is known as summary dismissal. (See Halsbury’s Laws of England 4th Edition Volume 16 paragraph 640). The summary dismissal of an employee will be wrongful unless the employer can prove that it was justified because of a serious breach of contract on the part of the employee.

In Fiji the common law position concerning summary dismissal has been modified by section 28 of the Employment Act Cap. 92. Section 28 provides that an employer should not dismiss an employee summarily except in the circumstances specified therein. The common law right to dismiss summarily remains where paragraphs (a) to (e) apply. However the section does not confer an unfettered right to summarily dismiss an employee in the event that one of the paragraphs (a) to (e) has been established.

The employer is required to establish that the alleged misconduct justified the decision to summarily dismiss under one of the paragraphs (a) to (e) in section 28.

In the circumstances of this dispute it is not only appropriate but necessary for the Tribunal to address the reference in its entirety and to determine both issues. In doing so, it is proposed to deal first with that part of the reference concerning the allegation that the Company has breached specified clauses of the Collective Agreement. The Award will then determine the question of justification and fairness.

The terms of reference refer to an allegation that the Bank’s action is in breach of clause 13 (a), (b) (1), (2) and (ii) and 14 (e) of the Agreement.

In its preliminary submission the Union refers to the summary dismissal of the grievor as being in breach of clauses 13 (a), (b) (i) (1) (2), 13 (b) (iii) and 14 (e) of the Collective Agreement.

In its opening submission, the Company noted that the terms of reference contains typographical errors in regard to the relevant clauses of the Collective Agreement. The Company indicated that it did not intend to take issue on this matter.

For the purpose of settling this aspect of the Reference, the Tribunal proposes to determine whether the Company’s action in summarily dismissing the grievor was in breach of clauses 13 (a), 13 (b) (i) (1) and (2) 13 (b) (ii) or clause 14 (e) of the Agreement.

The grievor was summarily dismissed by letter dated 10 July 2002. The letter was addressed to the Grievor and was signed by the then Manager People Capital. A copy of the letter is reproduced as Document D in the Company’s preliminary submissions. The last three paragraphs of that letter are relevant for the purposes of the present discussion.

"Maria you have on file first and second warning letters issued on 20 August 2001 and 10 December 2001 respectively.

In view of this third and final warning letter it is evident that there is a serious breach of your employment and collective agreement.

Accordingly, in terms of collective agreement clause 4 B(ii) and clause 12 d (i) of your service agreement you are hereby dismissed from the Bank’s service with immediate effect.

Your final salary will be credited to your account today."

Clause 4 B (ii) of the Agreement states:

"B. (i)............

(ii) Nothing contained in sub-clause (i) above shall be construed as in any way detracting from the Employer’s right to dismiss summarily any employee within the regulations agreed to upon the commencement of his or her employment and in the following circumstances.

(a) Where an employee is guilty of misconduct inconsistent with the fulfillment of the express or implied conditions of his or her contract of service.

(b) For willful disobedience to lawful orders given by the employer;

(c) .........

(d) .........

(e) .........

Clause 12 (d) of the Grievor’s service agreement provided that:

"The employment of the Officer shall be terminated by any of the following events:

(a)............

(b)...........

(c)..........

(d) By the Officer’s dismissal from the Bank’s service for:-

(i) Dishonesty, willful insubordination, neglect of duties, being absent without authority or the willful breach by the Officer of any of the Bank’s regulations for the time being in force or any of this Agreement’s conditions.

(ii) Any other conduct or act which in the opinion of the Bank constitutes misconduct.

Any dismissal under this sub-clause may be with or without any period of notice or prior suspension from duty and with or without payment of salary in lieu of any period of notice as the Bank sees fit."

It should be noted that the grounds for summary dismissal set out in clause 4 B (ii) of the Collective Agreement are in identical terms to those set out in section 28 of the Employment Act Cap. 92. Any purported right to summarily dismiss under the Collective Agreement must fit into one of the grounds listed in that clause which replicates section 28.

Any purported termination by way of dismissal without notice and without payment in lieu of notice (i.e. any summary dismissal) under clause 12 (d) of the Service Agreement must also be for misconduct which fits into one of the grounds in section 28 of the Employment Act.

The Tribunal considers that, when the termination letter is read in its totality, the grievor’s employment was terminated as a result of her actions on 26 June 2002 which the Company considered amounted to serious misconduct justifying summary dismissal pursuant to the Collective Agreement and the Service Agreement. The Tribunal accepts that the two previous warnings were not the basis for the decision to summarily dismiss but were considered as aggravating factors.

The Tribunal is satisfied that the Company has not relied on clause 13 (a) as the basis for dismissing the Grievor. The question whether the Company’s actions have breached clause 13 (a) does not arise.

The Union submits that the Bank failed to advise the Grievor that disciplinary action may result from an interview and that such failure was in breach of clauses 13 (b) (i) (2).

The Company has acknowledged that when the Grievor was interviewed by Mr Vijend Singh on 15 July 2002 the purpose of the interview was explained but it was not expressly stated that disciplinary action might follow. The transcript of this interview appeared as Document L in the Company’s preliminary submissions.

Whilst clause 13 (b) (i) (1) has been complied with, the Tribunal accepts that the omission referred to above is contrary to clause 13 (b) (i) (2) of the Collective Agreement. However in the circumstances of this Dispute the Tribunal does not consider that the procedure has been sufficiently tainted to render the dismissal invalid. The Tribunal is satisfied that the Grievor was aware that this was a disciplinary interview. She was aware that this was her third disciplinary interview. In the past she had been present in a number of similar interviews as a union representative. The Tribunal is satisfied that she knew or ought to have known that disciplinary action may follow the interview.

The Union claims that the company has breached clause 13 (b) (ii). It is the Tribunal’s opinion that the requirements of this clause were satisfied by the meeting which took place in Mr Khayum’s office and the termination letter which was handed to the Grievor during the course of that brief meeting.

Finally the Union specifically relied on clause 14 (e) and claimed that the Company had failed to show just and reasonable cause. The Company adduced evidence which in the Tribunal’s opinion established that the Grievor had carried out certain actions on 26 June 2002 which were in breach of a number of the Bank’s rules.

The evidence established that on 26 June 2002 the Grievor, without authority, requested an officer in the National Support Centre to uplift the restriction on her deceased father’s account and proceeded to make out a cheque in favour of the Ministry of Finance for the amount of an overpayment. The purpose of this action was to enable the Grievor’s mother to receive a widow’s pension which would only become payable once the overpayment to the deceased’s account had been re-imbursed to the Ministry.

The Grievor admitted these facts during the course of the interview conducted on 15 July 2002.

The Company claimed that these actions breached rules relating to dealings on deceased customer accounts and the accounts of immediate family members. The Company also claimed that the actions were in breach of the Code of Conduct and the Grievor’s Service Agreement.

The Tribunal is satisfied that the Grievor’s actions breached the relevant Rules. The Tribunal is satisfied that the Company has established just and reasonable cause for the termination under clause 4 B (ii) and as a result there is no breach of clause 14 (e) of the Agreement.

Turning to that part of the Reference which requires the Tribunal to consider whether the Grievor’s summary dismissal was unjust, unreasonable, harsh or unfair, the Tribunal must consider the accepted principles applied by both the Courts and this Tribunal.

In determining whether the Company’s decision to summarily dismiss was unjust, unreasonable or harsh, the test to be applied is whether the decision was reasonable. In the circumstances of the case were there sufficient grounds for a reasonable employer to conclude that summary dismissal was justified.

It cannot be disputed that the Banking industry relies on trust, integrity and honesty. The Bank’s Management expects those qualities to guide the behaviour of its staff. The Bank’s customers expect those qualities to guide the conduct of both Management and staff.

On the grievor’s own admissions and on the evidence adduced by the Company, the Tribunal accepts that it was open to a reasonable employer to conclude that those qualities were lacking on 26 June 2002. The Grievor’s conduct fell short of the high standard of behaviour which management rightly expected from staff.

Although there were some mitigating factors which the Company claimed it considered before reaching its decision, the Company’s view was that the seriousness of the misconduct outweighed the mitigating factors. It is the Tribunal’s opinion that such a conclusion was open to a reasonable employer in the position of the Company.

The fact that the Company took a more lenient approach to Ms Riamkau was explained during the course of the evidence. Such an approach was not unreasonable in the circumstances of this Dispute.

The Tribunal does not consider that the Company has breached the accepted implied term which requires the employer to treat the employee fairly and in good faith with appropriate respect and dignity in carrying out the dismissal.

The Tribunal is required to determine whether the dismissal was unfair. There is one aspect of the procedure followed by the Company which is, in the circumstances of this Dispute, of some concern to the Tribunal.

The Company, through its Branch Manager at ANZ House, requested the Grievor to provide a written explanation. The request was made by Mr Rigamoto on 26 June 2002 and the written explanation was provided by the Grievor on the same day.

On 15 July 2002 the Grievor was interviewed by Mr Vijend Singh, Head of Audit, Compliance & Risk Management in the presence of a Union representative, Mr David Yee. Also present were Mr Aisea Rigamoto and another Company Officer, Mr Muhammad Khayum. During the course of the interview the Grievor was given the opportunity to explain her actions which she admitted she knew to be contrary to the rules of the Bank. In both her written explanation and during the course of the interview, the Grievor explained the reasons for her actions. These related to her family situation.

On 16 July 2002 in the afternoon the Grievor was requested to accompany Mr Rigomoto to Mr Khayum’s office. The Union representative was present. Mr Khayum read out and then handed to the Grievor her dismissal letter.

It is the Tribunal’s opinion that the Grievor should have been given an opportunity either in person or in writing to mitigate in terms of penalty and importantly in terms of dismissal. What has happened in this case is that the interview was conducted on 15 July and the Grievor was summarily dismissed on 16 July 2002. In view of the severity of the penalty of summary dismissal, the Grievor was entitled to make a formal representation either herself or through a Union representative, as to why summary dismissal should not be imposed in the circumstances of this case.

Mr Collier gave evidence that the Bank had considered what it knew about the Grievor’s family circumstances. The Tribunal is satisfied that the Company had considered all the relevant mitigating material which had come to its attention as a result of the written explanation and the interview transcript.

Although there was no element of fraud or dishonesty in the sense of direct financial gain to the Grievor, the Company did have justification for dismissing the Grievor. It is the opinion of the Tribunal that the penalty was not harsh in the circumstances of this case. It was open to a reasonable employer, having given proper consideration to the Grievor’s mitigating material and the circumstances of the case, to summarily dismiss the Grievor.

It was not at any stage suggested during the hearing that there was any additional mitigating material which had not been put forward by the Grievor in either her written explanation or during the course of the interview.

The Tribunal accepts that the Grievor’s dismissal was fair and reasonable.

AWARD

The Company breached clause 13 (b) (i) (2) of the Agreement by failing to inform the Grievor at the commencement of the interview that disciplinary action may follow. The breach did not affect the validity of the dismissal as in the circumstances of this dispute the Grievor knew or ought to have known that disciplinary action may follow.

The dismissal was reasonable, just and fair in the circumstances of this dispute although the Grievor had not been given a formal opportunity to mitigate. Such failure was in the circumstances of this dispute not so serious as to amount to a denial of procedural fairness. The Bank had before it all the relevant mitigating material which it had duly considered.

The Grievor is to be paid two (2) months salary as compensation on account of the two omissions by the Company.

DATED at Suva this 29^th day of July 2004

Mr W D Calanchini
ARBITRATION TRIBUNAL