National Union of Municipal Workers v Lami Town Council [2004] FJAT 37; Award 31 of 2004 (1 August 2004)

THE REPUBLIC OF THE FIJI ISLANDS

NO. 31 OF 2004

AWARD OF
THE ARBITRATION TRIBUNAL

IN THE DISPUTE BETWEEN

NATIONAL UNION OF MUNICIPAL WORKERS

AND

LAMI TOWN COUNCIL

NUMW: Mr P Rae and Mr D Prasad
LTC: Mr S Matawalu

DECISION

This is a dispute between the National Union of Municipal Workers (the Union) and the Lami Town Council (the Employer) concerning the termination of employment of Mr Dhani Ram (the Grievor).

A trade dispute was reported by the Union in early 2002. The report was accepted by the Permanent Secretary and subsequently referred to a Disputes Committee. In due course the Minister authorized the Permanent Secretary to refer the trade 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 Arbitration on 28 October 2002 with the following terms of reference:

"............for settlement over the dismissal of Mr Dhani Ram with effect from 12 November 2001 which action the Union claims as unjust, unreasonable, harsh, unfair and breach of Collective Agreement Clauses 24, 25 and 32. Therefore the Union seeks Mr Ram’s re-instatement without loss of benefits."

The Dispute was listed for a preliminary hearing on 6 November 2002. On that day the parties were directed to file preliminary submissions within 21 days and the hearing of the Dispute was set down for 3 December 2002.

By letter dated 19 November 2002 the legal representative for the Employer requested a fresh hearing date due to the non-availability of witnesses. As a result the Dispute was listed for hearing on 15 April 2003.

The Union filed its preliminary submission on 10 January 2003 and the Employer did so on 4 April 2003.

By letter dated 8 April 2003 the Union this time requested that the hearing date be vacated due to the non-availability of the Union’s advocate.

The Dispute was listed for mention on 23 June 2003 and by agreement between the parties the dispute was refixed for hearing on 6 November 2003.

When the Dispute was called for hearing on 6 November 2003 Counsel for the Employer again requested an adjournment for the reasons set out in correspondence dated 5 November 2003 addressed to the Tribunal and copied to the Union. The hearing date was vacated and a new hearing date was fixed. The Dispute was ultimately heard on 30 and 31 March 2004.

At the hearing the Employer called three witnesses:- Mr Jasper Singh, Mr John St Julian and Mr Afzal Mohammed. The Union called the Grievor, Mr Dhani Ram. At the conclusion of the evidence the parties requested and were granted leave to file final submissions. The Employer filed its final submission on 29 April and the Union on 12 July 2004.

The reference requires the Tribunal to determine whether the dismissal of Mr Dhani Ram was in breach of the specified clauses of the Collective Agreement. The Tribunal is also required to determine whether the dismissal was unjust, unreasonable, harsh or unfair.

The Grievor was employed by the Employer as a handyman "cum" foreman with effect from 24 April 2000. His letter of appointment is dated 30 June 2000 and sets out some of the terms and conditions of employment including:

8. You will be receiving wages at the rate of $3.50 an hour. Your appointment will be probationary for a period of six months and while on probation your appointment may be terminated by a week’s notice on either side or by payment of one week’s wages in lieu of notice.

9. You will be liable to summary dismissal in the event of misconduct or insubordination.

10. You will subject to Council’s terms and conditions of employment now in force or as time to time amended."

The parties had entered into a Memorandum of Agreement which became effective on 11 October 1994. Clause 2 of the Agreement provides that:

"These terms and conditions of employment will be applicable to all unestablished employees of the Employer."

Under clause 5 of the Agreement the normal working week comprised 44 hours worked over 5 days. Under clause 12(a) wages were payable weekly in arrears on Thursdays during working hours.

Section XI of the Agreement deals with termination and clause 26 provides:

"(a) An employee who is discharged for reasons other than serious indiscipline, shall be given one week’s notice or pay in lieu of notice.

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

Provided

(i) ...........

(ii) This clause shall in no way detract from the Employer’s right to dismiss an employee summarily in accordance with the Employment Act."

Section X of the Agreement deals with Discipline. The following clauses are relevant.

Clause 22 states

"Employment is conditional on the employee continuing to render satisfactory service. An employee failing in this respect or committing a breach of discipline may have his employment terminated or be liable for a such lesser penalty as hereinafter provided."

Clause 23 provides for a system of warnings and clause 24 deals with suspensions. Clause 25 deals with dismissal and provides:

"The employer may summarily dismiss an employee in the following circumstances:

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

(ii) For willful disobedience to lawful orders given by the Employer;

(iii) ..............;

(iv) For habitual or substantial neglect of his duties;

(v) ...........;

(vi) ...........;

Provided that prior to summary dismissal, the employee is suspended without pay for up to 28 days to enable the Union to make representation."

Section XII of the Agreement deals with trade union consultation and grievance procedure. Clause 32 sets out the grievance procedure agreed upon by the parties.

By letter dated 12 November 2001 from the Town Clerk the Grievor’s employment was terminated. The letter was handed to the Grievor the following morning shortly after he arrived for work. Omitting formal parts, the letter stated:

"The Council at its Special Meeting held today discussed certain allegations made against the Town Clerk/CEO and other staff.

You were invited by the Council to the meeting to explain your part in the allegation and your overall work performance and insubordination.

During the initial investigation it was brought to the Council’s attention that:

i. You frequently refused to carry out certain duties as instructed by the Council’s Work Supervisor.

ii. On numerous occasion you questioned and challenged the Work Supervisor’s authority in presence of other workers.

iii. Your work performance had declined and this was brought to your attention several times by the Works Supervisor.

iv. Racial division and discrimination was being introduced to fellow workers.

v. Due to your incompetence the Council’s budget allocated for certain works, namely erection of fence at the Depot and Market premises and repairs to Council’s Multipurpose Building had exceeded its budget.

vi. False allegation against the Town Clerk/CEO for abusive language.

As a result the Council interviewed you as well to seek clarification.

Throughout the interview you were rude, uncourteous and disrespectful to His Worship the Mayor, the Deputy Mayor and other Councillors present. You even had the audacity to address the Deputy Mayor (Cr/Mrs Unaisi Buinimasi) when questioned as "My Dear........". His Worship the Mayor had to intervene and asked you to show respect to the Deputy Mayor and other Councillors. You also repeatedly used foul language throughout the interview.

The Council was surprised when you stood up and abusively said that "all this is bullshit "and you did not intend to continue with the interview and began walking out. At this stage His Worship the Mayor asked you to stay back so that the Council could complete interviewing you to which you replied "if you want anything more you talk to my Union. I have nothing to do with this. I can’t be wasting my time" and then stormed out.

The Council was shocked and dismayed with such rude, disrespectful and blatant disregard to Authority.

In light of the above I have been directed by the Council to terminate your services with immediate effect.

One week pay advance in lieu of notice together with all wages and leave due to you is enclosed (Council’s cheque No. 004029).

You are therefore instructed to return all the Council’s property in your possession."

Exhibit 6 was the Employer’s payment voucher for the Grievor for the period 02/11/01 to 12/11/01. It shows that the Grievor was paid his wages for the period, one week’s salary in lieu of notice and outstanding entitlements. He received a cheque for $477.97 after tax and other deductions.

In its preliminary submission the Employer in paragraphs 21 and 22 refers to the payment of the week’s salary in lieu of notice and says:

"21. And further, clause 26 of the Collective Agreement, in a nutshell, instructs that one week’s notice or pay in lieu of notice must be given where an employee is discharged.

We refer to page 2 of the termination letter of 12 November 2003 [which presumably should read 2001] where this duty is executed and where it duly informs that: "one week pay in advance in lieu of notice together with all wages and leave due to you is enclosed."

It is the Tribunal’s opinion that the Grievor’s termination of services with immediate effect was by way of discharge with payment of one week’s wages in lieu of notice in accordance with the provisions of clause 26 (a) of the agreement. The Tribunal does not consider this to be a situation where termination has been by way of summary dismissal. Neither the word

"summary" nor the word "dismissal" appear in the letter. On its face, the Employer’s letter accompanied as it was by a cheque for the amount of $477.97 (which included a weeks wages in lieu of notice) complied with clause 26 (a).

In his evidence the Grievor acknowledged that he had received the letter and the cheque in an envelope at work early in the morning of 13 November 2001.

The Tribunal is satisfied that the Grievor’s contract of employment with the Lami Town Council was an oral contract as defined in the Employment Act Cap 92 which was subsequently evidenced in writing. The contract was not one which was required to be in writing under section 33 of that Act.

As an oral contract, sections 22 to 25 of the Employment Act governing matters such as termination notice and payment in lieu are relevant to the issues in this Dispute.

The Tribunal is satisfied that this oral contract could be terminated by either party on the giving of not less than seven days notice. The Tribunal is also satisfied that section 25 allows the Employer to terminate at any time under conditions that permit payment in lieu of notice such as clause 26 (a) of the Collective Agreement.

In Central Manufacturing Company Limited -v- Yashni Kant (Civil Appeal No 10 of 2002 delivered 24 October 2003) the Supreme Court confirmed at p.21 that:

".........there is an implied term in the modern contract of employment that requires an employer to deal fairly with an employee, even in the context of dismissal. The content of that duty plainly does not extend to a requirement that reasons be given, or that a hearing be afforded at least where the employer has the right to dismiss without cause, and to make a payment in lieu of notice. It does extend, however, to treating the employee fairly, and with appropriate respect and dignity, in carrying out the dismissal. Each case must, of course, depend upon its own particular facts."

In this Dispute the termination of the employment contract was effected by the delivery of a letter (with a cheque) to the Grievor by messenger at the work place in the early morning after an incident involving the Grievor at a Council meeting the previous afternoon. It is the Tribunal’s opinion there was nothing which could be described as unnecessarily humiliating or distressing in the manner in which the termination was carried out.

At this stage the Tribunal notes that even on the evidence given by the Grievor, the Grievor’s behaviour at the meeting was at the very least unacceptable. The Tribunal accepts the evidence adduced by the Council through Mr Singh and Mr St Julian who both described the Grievor’s behaviour as distressing, upsetting and humiliating.

This Tribunal appears to have accepted the position that even though a termination of employment by discharge with notice or payment in lieu of notice has been lawfully effected (i.e. In accordance with legislative and contractual provisions) it may still be unjust or unfair. Indeed the terms of reference in this case require the Tribunal specifically to consider whether the dismissal was unfair or unjustified. The Tribunal’s practice in such cases is to consider two issues. First, whether there was substantive justification and secondly, in reaching the decision to terminate, whether procedural fairness was observed by the employer.

The Tribunal is of the opinion having carefully considered the evidence, that the Council was justified in terminating the Grievor’s employment by discharge with the payment of the appropriate wages in lieu of notice. The Tribunal considers the Grievor’s behaviour at the Council meeting to be sufficiently inappropriate to justify such a decision.

However the Tribunal does not consider that the Grievor was afforded procedural fairness. The decision to discharge the Grievor was taken by Council almost immediately after the Grievor had left the meeting. The Grievor should have been given an opportunity to explain his conduct and to address the question of disposition for that conduct either himself or by a union representative. The decision to discharge should have been taken after the Council had the opportunity to consider the issues more objectively and dispassionately.

As a result the Tribunal finds that the termination was lawful, justified but unfair to the extent that the Grievor had not been afforded procedural fairness.

The final issue is to consider whether the Grievor should be re-instated. This Tribunal has frequently observed that the remedy of reinstatement is not automatic, but rather discretionary. The test applied by the Tribunal on deciding whether re-instatement is appropriate has usually been expressed as whether objectively assessed the employee can be said to have the trust and confidence of his or her employer and would be a harmonious and effective member of his employer’s team.

In Award No. 46 of 1999 the Tribunal noted at page 14:

"In determining the appropriate remedy, the Tribunal is entitled to embark on a broad inquiry taking into account matters that might not have formed proper reasons for the dismissal but which are, nevertheless, directly relevant to a renewed employment relationship."

In this dispute the Tribunal has considered the conduct of the Grievor in respect of both the misconduct at the meeting and the evidence concerning his performance generally in the work place. On balance the Tribunal has come to the conclusion that re-instatement is not appropriate in this case.

The Grievor is to be paid two months’ wages as compensation for the failure to afford procedural fairness.

AWARD

The termination of employment by way of discharge was in accordance with clause 26 of the Agreement and the provisions of the Employment Act. It was lawful.

Clauses 24, 25 and 32 of the Agreement have no application in the circumstances of this Dispute.

The termination was justified and as a result was in that sense fair.

The Grievor was not afforded procedural fairness and in that sense the termination was unfair. Re-instatement is not appropriate. The Grievor is to be paid two (2) months’ wages as compensation.

DATED at Suva this 1^st day of August 2004

Mr W D Calanchini
ARBITRATION TRIBUNAL