Transport Workers Union v Air Pacific Ltd [2004] FJAT 47; Award 49 of 2004 (9 November 2004)

THE REPUBLIC OF THE FIJI ISLANDS

NO.49 OF 2004

AWARD OF
THE ARBITRATOR TRIBUNAL

IN THE DISPUTE BETWEEN

TRANSPORT WORKERS UNION

AND

AIR PACIFIC LIMITED

TWU: Mr A Singh
Air Pacific: Mr J Sloan

DECISION

This is a dispute between the Transport Workers Union (the "Union") and Air Pacific Limited (the "Company") concerning the termination of employment of Mr Nitish Maharaj (the "Grievor").

A trade dispute was reported by the Union on 31 October 2002. The report was accepted by the Permanent Secretary on 29 November 2002 and the dispute was referred to a Disputes Committee. As a consensus decision could not be reached, the Minister authorized the Permanent Secretary to refer the Dispute to an Arbitration Tribunal for settlement pursuant to section 5A(5)(a) of the Trade Disputes Act Cap.97.

The Dispute was referred to the Permanent Arbitrator on 21 January 2003 with the following terms of reference:

"...... for settlement over the termination of Mr Nitish Maharaj with effect from 5 August 2002 which action the Union claims to be harsh, disproportionate and unfair and therefore seeks his re-instatement without loss of benefits".

The Dispute was listed for a preliminary hearing on 2 April 2003. On that day the parties were directed to file preliminary submissions by 22 July 2003 and the Dispute was fixed for hearing on 2 September 2003.

The hearing of the Dispute subsequently took place on 25 September 2003. At the conclusion of the hearing the parties were directed to file final submissions within 21 days.

Due to the appointment of a new Permanent Arbitrator it became necessary to relist this Dispute for mention on 19 January 2004. On that day the Dispute was listed for re-hearing on 13 May 2004. The re-hearing took place on that date. The Company called two witnesses whilst the Union did not lead any evidence. At the conclusion of the evidence the parties sought and were granted leave to file final written submissions. The final submission in reply was ultimately filed by the Company on 20 October 2004.

The Grievor’s employment was terminated by letter dated 26 August 2002 from the Manager Airports and Freight addressed to the Grievor. The first two paragraphs of that letter are relevant to the Dispute:

"Further to my letter of 5 August 2002 and the subsequent disciplinary inquiry held on 12 August 2002, I wish to confirm that the charges of willful neglect of duty, acting outside your delegated authority and withholding banking of Company revenue have been substantiated".

"I have taken all matters such as length of service and mitigating factors into account. However, in view of the seriousness of the offence, I have no option but to terminate your employment with effect from 5 August 2002 the day you were initially suspended".

It was common ground that the three charges related to breaches of procedure involving the late banking of cash contrary to business practices within Air Pacific. The Company also claimed that by writing the word "held" on certain documents, the Grievor falsified records in order to conceal his actions. Although there were some discrepancies in the documents produced by the Company, the essential facts were not disputed by the Union. The Grievor did not give evidence.

The Tribunal is satisfied that it was reasonable for the Company to conclude that the instances of late banking which had been established by the evidence did occur. The instances of late banking occurred on occasions when the Grievor was tasked to perform the banking duties.

It should be noted that there was no allegation that any money went missing. The Tribunal is not satisfied that there was any elaborate system of pre-planning involved. Apart from the use of the word "held" there was no other evidence that the Grievor had falsified accounting records for the purpose of covering the breaches of procedure.

The Tribunal accepts the Company’s submission that the Grievor did not have the necessary authorization or authority to write the word "held" on the documents and as a result did use the word out of context.

The Company claims that the instances of late banking are sufficiently serious so as to amount to misconduct which justifies summary dismissal.

The Tribunal accepts the evidence of Mr Seeto that late banking is unacceptable because of security issues, the importance of cash flow to a business, interest earnings and the good management of finances. The Tribunal also accepts that prudent business practices would indicate that banking should take place within a reasonable time after receipt of money.

Although Mr Seeto stated that he was confident that all staff dealing with money or banking on behalf of the Company were fully aware of the requirement to bank on the same or the next day, neither Mr Seeto nor Mr Mani specifically referred to any written instructions to that effect. Both referred to the Company Policies and Procedures Manual relating to the withholding of accountable documents.

It should also be noted that the Grievor’s position description for Senior Freight Services Officer dated 14 November 1995 states the purposes of the position as:

"Accept, price, document and dispatch freight received at the Nadi Freight Sales and Services office in accordance with company, statutory and IATA procedures so as to provide efficient customer service and contribute to achieving the office’s revenue targets".

In the same document key Result Area 1 deals with outward freight duties and includes the task of:

".... Determining basis for payment and if cash collects and accounts for it ....."

The position description does not specifically or expressly refer to banking duties.

It has already been observed that in this case there was no suggestion that any money went missing. Furthermore all the banking was eventually effected. In the end termination was essentially imposed for late banking.

In Fiji the common law right to terminate employment by summary dismissal is now restricted to misconduct falling within one of the five circumstances listed in section 28 of the Employment Act Cap. 92. As this Tribunal observed in Award No.38 of 1999 (National Union of Hotel and Catering Employees – v – Shangri-La’s Fijian Resort) at page 8:

"However, the right does not arise merely because an employee’s conduct falls generally within any circumstance described in the section. ....... it is always a question of degree, only serious or fundamental breaches of the contract of employment entitle the employer to exercise this right. Apart from this common law limitation, which might be the basis of a common law "wrongful dismissal" claim in a court of law, in disputes before the Tribunal alleging "unfair dismissal" the exercise of the right must also accord with the additional principles of fairness or reasonableness and good industrial practice applied by the Tribunal in such disputes".

The Tribunal accepts that the position of the Grievor in this dispute is borderline. However, taking into account the severity of the penalty of termination by summary dismissal and its dire consequences, the Tribunal has reached the conclusion that in this case the decision by the Company to terminate the Grievor’s employment by summary dismissal was harsh and disproportionate. A strongly worded formal warning following the detection of the instances of late banking would have been appropriate. It is unfortunate that some form of performance audit did not detect the late banking earlier.

The Tribunal also has taken the view that the Company did not give sufficient consideration to the Grievor’s hitherto nine years of unblemished service to the Company.

In relation to the question of procedural fairness, the Tribunal has carefully considered the evidence and the submissions. The Tribunal considers that the letter dated 5 August 2002 contained insufficient particulars for the Grievor and his representative to properly prepare for the disciplinary inquiry to be held on 12 August 2002. Upon two subsequent requests by the Union, the Company declined to provide any further particulars. The allegations related to matters going back some nine months. Although a 24 hour adjournment was granted, it is claimed that this was insufficient to properly consider the details.

Although the letter dated 5 August 2002 from the Company to the Grievor may comply with the literal meaning of clause 30.1 of the Collective Agreement, the Tribunal is not satisfied that it complies with the spirit or intention of the clause. The Grievor should have been provided with some basic particulars of the allegations so that he could properly instruct his union representative and prepare answers to the allegations. Under the circumstances the termination was unfair.

The next issue is the question of remedy. The Union claims that the Grievor should be re-instated from the date of his dismissal without loss of benefits.

The Company submits that this dispute involves a breach of trust and that as a result the employment relationship has been irreparably damaged.

The remedy of re-instatement is discretionary. There was no allegation of theft or attempted theft. The evidence revealed five instances of late banking ranging over differing periods of time. The failure to comply with the Company’s expectations as to prompt banking of itself does not necessarily indicate a breakdown in the mutual relationship and duties of confidence trust and good faith that must exist in any employment relationship.

Under the circumstances, there is no evidence before the Tribunal to suggest that re-instatement would not be an appropriate remedy in this case. However the Grievor is to be paid only six months arrears of salary, the balance is to be deemed leave without pay. In addition, the Company is to issue him a written first warning which is to last 12 months from the date of issue.

AWARD

The termination of employment was harsh and disproportionate. The termination was also unfair in the sense that the Grievor was not afforded procedural farness. The Grievor is to be re-instated with effect from the date of termination. He is to be paid 6 months arrears of salary with the balance deemed as leave without pay. He is to be issued with a first warning which is to be effective for 12 months from the date of issue.

DATED at Suva this 9^th day of November 2004

Mr W D Calanchini
ARBITRATION TRIBUNAL