Municipal Employees Union of Fiji v Lautoka City Council [2004] FJAT 58; Award 02 of 2004 (6 February 2004)

THE REPUBLIC OF THE FIJI ISLANDS

NO.2 OF 2004

AWARD OF THE ARBITRATION TRIBUNAL

IN THE DISPUTE BETWEEN

MUNICIPAL EMPLOYEES UNION OF FIJI

AND

LAUTOKA CITY COUNCIL

MEU: Mr A Patel
LSC: Mrs E Dass

DECISION

This dispute between the Municipal Employees Union of Fiji (the "Union") and the Lautoka City Council (the "Council") is over the interpretation to be given to a clause of an Agreement entered into between the parties on 28 March 2003.

The clause concerns the payment of wage increases in two stages between 1 August 2002 and 31 December 2003.

Clause 1 of the Agreement provides:

"(a) That from 1st August 2002 to 31st December 2002

Increase 3.5% with no other conditions.

(b) That from 1 January 2003 to 31 December 2003

Increase 4.5%"

Pursuant to section 5A(5) of the Trade Disputes Act Cap 97 (the Act) the dispute was referred to this Tribunal on 22 October 2003 with the following terms of reference:

".... for settlement over the Council breaching clauses 1 (a) and (b) of the Memorandum of Agreement dated 28 March 2003. The Union claims that the Council pay all its members 3.5% wages increase effective 1 August 2002 and 4.5% effective 1 July 2003 in accordance with the Memorandum of Agreement dated 28 March 2003".

The terms of reference refer to the second stage wage increase being effective from 1 July 2003. The agreement and the parties’ submissions indicate that the second stage increase is to be effective from 1 January 2003. The Tribunal regards the reference of 1 July 2003 as a slip which should read 1 January 2003 and the Arbitration will proceed on that basis.

It does not appear to be in dispute that the agreement is to operate from 1 August 2002 to 31 December 2003. The reference to "a term of one year" in the preamble will be taken as a mistake which does not reflect the intention of the parties. By the terms of the agreement the parties have manifested a clear intention that the agreement is to operate for a period in excess of one year, the duration of the agreement being 17 months from 1 August 2002 to 31 December 2003.

The Union’s position is that the workers governed by the agreement are entitled to a total of 8% increase in wages, payable in two stages. The first stage is a 3.5% increase to be paid from 1 August 2002 to 31 December 2002 and the second stage being a 4.5% increase to be paid from 1 January 2003 to 31 December 2003.

A letter dated 4 March 2003 from the Lautoka City Council to the General Secretary of the Union would appear to lend support to the Union’s contention. That letter (attachment U2 to the Union’s submission) is expressed in the same terms as the clause in the agreement.

The Union contends that the parties were at all times of the same understanding as to the meaning of the clause. The Union in effect claim that the clause should be given its plain meaning.

The Council’s position as stated in its submission is that the increase in wages for the period 1 August 2002 to 31 December 2003 was staged; firstly by an increase of the their existing wages (wages as to 31 July 2002) by 3.5% for the period 1 August 2002 to 31 December 2003 and by an increase of 4.5% of the then existing wages (ie. The wages as to 31 July 2002) for the period 1 January 2003 to 31 December 2003. The base being the existing wages as at 31 July 2002.

Although the Council’s written submission refers to the first stage of 3.5% increase applying from 1 August 2002 to 31 December 2003, the wording of the relevant clause in the agreement does not support this contention.

The effect of the Council’s submission is that the workers would receive 3.5% increase from 1 August 2002 to 31 December 2003 and a 1% increase on the new wage level from 1 January 2003 to 31 December 2003, making a total wage increase of 4.5%.

In the Tribunal’s opinion the Council’s claim is not supported by the terms of the agreement. It is clear to the Tribunal that the agreement contemplates that the workers receive a total increase in salary of 8% over a period of 17 months payable in two stages. There is nothing in the material placed before the Tribunal which would require an interpretation of the clause which the Tribunal considers goes beyond its plain meaning.

INTERPRETATION

Clause 1 of the Agreement dated 28 March 2003 requires the Council to pay the workers a 3.5% increase in salary from 1 August 2002 to 31 December 2002 calculated on the wages payable as at 31 July 2002 and a further increase of 4.5% for the period 1 January 2003 to 31 December 2003 calculated on the wages payable as at 31 December 2002.

DATED at Suva this 6^th day of February 2004

Mr W D Calanchini

ARBITRATION TRIBUNAL