Fiji Banks and Finance Sector Employees Union v ANZ Banking Group Ltd [2004] FJAT 56; Award 36 of 2004 (1 October 2004)

THE REPUBLIC OF THE FIJI ISLANDS

NO. 36 OF 2004

AWARD OF
THE ARBITRATION TRIBUNAL

IN THE DISPUTE BETWEEN

FIJI BANKS AND FINANCE SECTOR EMPLOYEES UNION

AND

ANZ BANKING GROUP LIMITED

FBFSEU: Mr. P Rae
ANZ: Mr. I Razak

DECISION

This is a dispute between the Fiji Banks and Finance Sector Employees Union (the "Union") and the ANZ Banking Group Limited (the "Employer") concerning the termination of employment of Ms Cecilia Corrie (the "Grievor")

A trade dispute was reported by the Union on 5 April 2004. The report was accepted by the Chief Executive Officer who referred the dispute to a Disputes Committee. As a consensus decision could not be reached, the Minister authorized the Chief Executive Officer to refer the trade 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 28 May 2004 with the following terms of reference:

"...... for settlement over the termination of employment of Ms. Cecelia Corrie on 20 February 2004. The Union views the bank’s action as harsh, unreasonable, unjust and seeks Cecelia’s re-instatement without loss of pay and benefits".

The Dispute was listed for a preliminary hearing on 18 June 2004. On that day the parties were directed to file preliminary submissions before 18 July 2004 and the Dispute was listed for final hearing on 2 September 2004.

The Employer filed its preliminary submissions on 8 July and the Union did so on 19 July 2004.

By letter dated 26 August 2004 addressed to the Secretary of the Tribunal and copied to the Union, the Employer’s legal representative applied to file an amended preliminary submission. The parties appeared before the Tribunal on 31 August 2004 for the hearing of the application. The Union indicated that the application was not opposed and as a result the Employer was given leave to file amended preliminary submissions.

After the commencement of the hearing, the Union indicated that it wished to peruse the transcript of the interviews between the witness Ms. Buadromo and the Grievor, which preceded the second and final warning letters. As the documents were not in the Tribunal, the Employer was directed to provide copies for the Union.

The Union requested and was granted an adjournment to peruse the documents.

When the hearing resumed on 3 September 2004, the parties informed the Tribunal that the dispute had been settled. The written terms of settlement were to be forwarded to the Tribunal for inclusion in the Award.

The parties indicated that they wanted the Tribunal to provide an interpretation on two clauses of the Collective Agreement. The first being clause 13(a) which deals with the issuing of warnings as part of the disciplinary procedure. The second being clause 14(e) which deals with the requirement for just and reasonable cause for termination under the agreement.

As the subject matter of the two clauses directly related to the issues raised by the Reference, the Tribunal is prepared to provide some guidance to the parties as to how the clauses are to be interpreted in the context of the facts of this Dispute.

In doing so, the Tribunal does not consider that the guidance provided should be seen as a binding precedent for future disputes. The value of such guidance lies in its suggestion of approach or line of argument.

Further, as the parties have settled the dispute in terms which are attached to this Award, the guidance provided by the Tribunal on this occasion should not be taken as amounting to a conclusive bar to a subsequent dispute raising the same issues being referred to and settled by this Tribunal.

It should also be noted that the parties were given the opportunity to make submissions in relation to their views on how the clauses should be interpreted. Both parties indicated that they did not wish to make any further submissions and would instead rely on the material which addressed these issues in their preliminary submissions.

Turning to the first Clause. Clause 13(a) provides:

"Warnings for habitual lateness, malingering, absenteeism and other similar offences may be given by the Manager or his nominee to the employee. Such warnings if they are to be held against the employee, shall be confirmed by letter by the Manager and two such confirmed warnings may render the employee liable to termination of employment for a third offence; provided that no written warnings shall be valid for a period of more than a year."

In the context of the present dispute, the issue is whether clause 13(a) requires the employer to issue a third warning letter following a third offence before the employee is liable to have his or her employment terminated.

In this case the employer issued a third warning letter to the Grievor following a third incident and then immediately handed a termination letter to the Grievor. The letter indicated that the Grievor’s employment was being terminated with immediate effect pursuant to clause 13(a) of the Agreement.

It should also be noted that in this case the termination of employment was by way of summary dismissal, as the final payout to the Grievor did not include any payment in lieu of notice.

Although the Union raised the issue of the 12-month period in relation to the three incidents, for the present purposes it shall be assumed that the three incidents and the three warning letters all fell within a 12-month period.

The employer did not specifically address the issue in its preliminary submissions. By inference its position may be taken as being that before an employee is liable to have his or her employment terminated it is necessary to issue the employee with a third warning letter in respect of a third incident of the type contemplated by clause 13(a), all having occurred within 12 months.

The Union dealt with the issue in paragraphs 3.1 to 3.3 of its preliminary submission. The Union’s position is that by choosing to impose an alternative remedy of issuing a third warning letter following a third incident, the employer is then prevented from imposing any other penalty. The Union claims that the employer lost the option of termination when it issued the third warning letter.

It is the Tribunal’s opinion that the plain meaning of the words used in clause 13(a) indicates that it is not necessary to issue a third warning letter to an employee following a third incident before that employee’s employment is liable to be terminated. Clause 13(a) requires that there be two warnings confirmed by letter followed by a third offence, all within the space of 12 months before an employee is liable to have his or her employment terminated.

The Tribunal is of the opinion that by issuing a third warning letter in respect of a third offence and then immediately issuing a termination letter the Employer may be imposing more than one penalty for the same offence. This follows from the fact that a written warning which forms part of the employee’s employment record, which is intended to induce a change in work performance and which may have a prejudicial effect in future disciplinary proceedings is likely to be regarded as disciplinary in nature.

The second clause on which the parties have sought guidance is clause 14(e). The current clause 14(e) is contained in a supplementary Memorandum of Agreement dated 4 May 2001 and states that:

"The employer undertakes that no termination under any of the provisions of this agreement shall take place without just and reasonable cause."

Clause 14(e) imposes a contractual obligation on the Employer not to terminate the employment of any employee pursuant to any of the provisions in the Agreement, which may permit termination, without just and reasonable cause.

Under clause 4 B terminations may be with notice or payment in lieu of notice or by way of summary dismissal. The requirements for termination by notice or payment in lieu of notice are set our in clause 4 B (i). The requirements for summary dismissal are set out in clause 4 B (ii). In both cases clause 14(e) imposes an additional requirement that the employer must ensure that there is just and reasonable cause.

The impact of clause 14(e) is greater in respect of termination by notice or payment in lieu of notice. Clause 14(e) has the effect of denying the employer the right to terminate employment simply by giving the requisite four weeks notice or payment in lieu.

In this case the termination of employment was by way of summary dismissal. Therefore, the employer would be required to show that at least one of the grounds listed in clause 4 B (ii) was the basis of the summary dismissal. In addition because of clause 14 (e) the employer would be required to establish just and reasonable cause. In the case of a termination by summary dismissal, a "just and reasonable cause" clause in the agreement imposes an obligation on the employer to look beyond the strict requirements, which form the contractual or legal basis for summary dismissal. The "just and reasonable cause" clause in a Collective Agreement is similar to the requirement that an employer must show substantive justification in a summary dismissal scenario where there is no agreement or where the agreement does not contain such a clause. The clause has the effect of requiring the employer to determine whether summary dismissal in the circumstances of the particular case is the appropriate remedy when the serious misconduct has been established, and when it comes within one of the five grounds permitting summary dismissal under the agreement.

It only remains to be said that what amounts to just and reasonable cause will depend upon the facts and circumstances of each dispute.

CONSENT AWARD

The Dispute is settled in accordance with the terms set out in the attached document dated 24 September 2004 and signed by the parties.

DATED at Suva this 1^st day of October 2004.

Mr W D Calanchini
ARBITRATION TRIBUNAL