Public Employees Union v Public Service Commission [2004] FJAT 48; Award 50 of 2004 (9 November 2004)

THE REPUBLIC OF THE FIJI ISLANDS

NO. 50 OF 2004

AWARD OF
THE ARBITRATION TRIBUNAL

IN THE DISPUTE BETWEEN

PUBLIC EMPLOYEES UNION

AND

PUBLIC SERVICE COMMISSION

PWU: Ms M Rakai
PSC: Mr J Mainavukea with Mr A Maqbool

DECISION

This is a dispute between the Public Employees Union (the "Union") and the Public Service Commission (the "Commission") concerning the recruitment of private security officers at the Drainage and Irrigation in Ba.

A trade dispute was reported by the Union on 23 October 2003. The report was accepted by the Permanent Secretary on 10 November 2003 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 12 March 2004 with the following terms of reference:

"...... for settlement of dispute over the recruitment of private security officers at the Drainage and Irrigation in Ba, which the Union claims as unfair and unjustified due to the failure on the part of the Commission to consult the Union as stipulated in PSC Circular No.12/97".

The Dispute was listed for a preliminary hearing on 24 March 2004. As there was no appearance by or on behalf of the Union on that day, the Dispute was relisted for mention on 12 May 2004. On that day the parties were directed to file preliminary submissions by 2 June and the Dispute was listed for hearing on 27 July 2004.

The parties filed their preliminary submissions within the time specified.

At the hearing which took place in Suva on 27 July 2004, the Union called three witnesses and the Commission called two witnesses. At the conclusion of the evidence the parties were granted leave to file final submissions. The Union filed its final submission on 27 August and the Commission did so on 24 September 2004. By letter dated 18 October 2004, the Union advised the Tribunal that it did not wish to file any submission in reply to the Commission’s answering submission.

The matter in dispute is the decision by the Commission to approve the hiring of a private security company at the Dredging Project in Ba. The Union claims that the decision is unfair and unjustified due to the failure by the Commission to consult the Union as required by PSC Circular No.12/97.

Some relevant background information was provided by the Commission in its preliminary submission. This material was not challenged by the Union and was generally consisted with the evidence given during the hearing.

The Land and Water Resources Management Division of the Ministry of Agriculture Sugar and Land Resettlement is charged with the responsibility of undertaking dredging works in Fiji.

In 1993 the Ministry decided to move the river dredging works from the Rewa River to the Ba River. The essential employees were officially transferred and non-essential workers were made redundant. Those made redundant were offered new employment opportunities at the Ba Dredging Project if they wished to take up the offer. Those who accepted were recruited as new employees at Ba but were not entitled to any allowance.

On 19 October 2000 an agreement was made between the then Permanent Secretary for Agriculture Fisheries and Forests and Paradise Security Services Ltd. for the provision of security services for one year from 15 November 2000 to 15 November 2001. The contract was subsequently extended in 2001 and 2002.

On 8 November 2002 an advertisement calling for tenders for the provision of security services at the Ba River Dredging Project appeared in the Fiji Times. It would appear that as a result of this advertisement the then Permanent Secretary by letter dated 10 November 2003 accepted the report of a trade dispute which was set out in the Union’s letter dated 22 October 2003. A previous report by the Union of a trade dispute had been rejected on account of the time limit which is specified in section 4 (1) (a) (i) of the Trade Disputes Act.

The central issue raised by the terms of reference is whether PSC Circular No.12/97 dated 12 June 1997 required the Commission to consult with the Union prior to entering to the agreement with Paradise Security Services Ltd. The Union’s claim is that the recruitment of private security officers is unfair and unjustified because of the Commission’s failure to consult the Union as stipulated in PSC Circular No.12/74.

The subject matter of the Circular is stated as:

"Consultation with Public Employees Union on Engagement of Unestablished Employees".

The first two paragraphs of the Circular are relevant for the purpose of the present dispute:

"1. At a meeting of the Joint Industrial Council (JIC) held on 8/9/87, it was agreed that all Ministries and Departments should consult the Public Employees Union (PEU) on all engagements of unestablished employees, and that copies of engagements sheets should be submitted to the PEU. This decision was circulated in the Service through PSC Circular No.34/88 dated 27/10/88.

2. It has become necessary to remind Ministries/Departments that this decision of the JIC is still very much in force and that you should continue to:

(a) consult with the PEU on all new engagements of unestablished staff (including project workers) in terms of the JIC Agreement; and

(b) forward copies of engagement sheets to the PEU".

The requirement for Ministries and Departments to consult the Union is in respect of the engagement of new unestablished staff in the civil service on JIC Agreement terms and conditions.

The Agreement dated 19 October 2000 with Paradise Security Services Ltd. is an agreement with a body corporate for the provision of security services. It represents a decision by the Commission to outsource or contract out a particular activity to a private company. The Agreement does not involve the engagement of unestablished staff. It is not a contract of service as defined in the Employment Act Cap.92. The relationship between the Commission and the Company is one of independent contractor and not employer/employee. The Commission is not itself engaging individual security officers.

It is the opinion of the Tribunal that PSC Circular No.12/97 does not require the Commission to consult with the Union prior to entering into an agreement to engage a company or corporation to provide a service such as security services.

From a sound industrial relations viewpoint it may be desirable for consultation between employers and Unions to take place in respect of a policy shift towards outsourcing or privatization. However, it is clear to the Tribunal that consultation under those circumstances is not required nor is it contemplated or intended by PSC Circular No.12/97.

As the terms of reference appear to link what the Union claims to be unfair and unjustified to the requirement to consult under the circular, the Tribunal’s Ruling as stated above would settle the dispute.

At the hearing a great deal of the evidence appeared to be more concerned with the questions of fairness and justification as independent issues unconnected to the requirement to consult. There was evidence about absenteeism, stress and health, the value of the State’s assets, work practices at the site and other industrial relations issues.

It should be noted that there has been no material placed before the Tribunal in relation to the question of what, if anything, is contained in the JIC Agreement concerning contracting out, outsourcing or privatization.

The Tribunal is not entirely satisfied that the Commission is under any particular duty to exercise management rights which are not covered in the JIC Agreement fairly or reasonably.

However, the Tribunal is satisfied that the decision to contract out the security services was made in good faith and honestly. It was not a decision which could be described as arbitrary or capricious. It was a decision based on a rational conclusion that the existing arrangements were not working. Such a decision cannot be challenged on the bases that it resulted in the loss of the opportunity to work overtime or a redesignation of job descriptions.

AWARD

PSC Circular No.12/97 does not apply to a contract for the provision of security services by an independent contractor. The circular did not require the Commission to consult with the Union prior to entering into an agreement with Paradise Security Service Ltd. As a result the Commission’s decision to enter into a contract with that Company was neither unfair nor unjustified.

The Commission’s decision to contract out the security service at Ba was made honestly and in good faith.

DATED at Suva this 9^th day of November 2004.

Mr W D Calanchini
ARBITRATION TRIBUNAL