National Union of Factory and Commercial Workers v Central Manufacturing Company Ltd [2005] FJAT 10; Award 11 of 2005 (24 February 2005)

THE REPUBLIC OF THE FIJI ISLANDS

NO. 11 OF 2005

AWARD OF
THE ARBITRATION TRIBUNAL

IN THE DISPUTE BETWEEN

NATIONAL UNION OF FACTORY & COMMERCIAL WORKERS

AND

CENTRAL MANUFACTURING COMPANY LIMITED

NUFCW: Mr J Raman with Mr J Mudaliar
CMC: Mr J Apted with Mr M Khan

DECISION

This is a dispute between the National Union of Factory and Commercial Workers (the "Union") and Central Manufacturing Company Limited (the "Company") concerning the termination of employment of Ms Miriama Warai (the "Grievor").

A dispute was reported by the Union on 14 October 2003. The report was accepted by the Permanent Secretary who referred the dispute to a Disputes Committee. As a consensus decision was not 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 9 December 2003 with the following terms of reference:

"..... for settlement over the Union member Ms Miriama Warai who was dismissed on 4 August 2003. The Company is alleging that Miriama stole two packets of cigarettes from the factory, which she denies. The Union claims that the dismissal was unjustified, unreasonable and harsh and made several representations to Management seeking Miriama’s re-instatement"

The Dispute was listed for mention on 20 January 2004. The parties requested an adjournment for further mention on 18 February 2004.

On that day the parties were directed to file preliminary submissions by 28 April 2004 and the Dispute was listed for hearing on 13 May 2004.

It subsequently became necessary to relist the Dispute for mention on 10 March 2004. On that date the Dispute was relisted for hearing on 28 June 2004. The parties were not in a position to proceed on that day and the Tribunal gave directions as to the filing and serving of witnesses’ statements. The Dispute was again relisted for hearing on 8 and 9 September 2004.

The hearing commenced on 8 September and concluded the following day. The Union called three witnesses including the Grievor and the Company called five witnesses. At the conclusion of the evidence the parties sought and were granted leave to file written final submissions. The last submission was eventually filed on 3 February 2005.

During the course of the proceedings, the parties indicated that there was a preliminary issue upon which a ruling from the Tribunal was being sought. The preliminary issue concerned clause 27(d) of the Collective Agreement and its effect on the burden of proof.

It is generally accepted that in disputes involving suspension or dismissal the burden of proof rests upon the Employer to persuade the Tribunal of the facts which the employer alleges justified the action taken. As a result the practice in these cases is for the employer to lead off and call its evidence first.

In other words, unless the Collective Agreement provides otherwise, the employer ultimately carries the burden of proving that it had just cause to suspend or dismiss the Grievor.

Clause 27(d) of the Collective Agreement which was signed by or on behalf of the Parties and dated 2 April 2003 provides:

"If it shall be proved that an employee has been unjustly suspended or dismissed, he/she shall be re-instated and paid all wages he/she would have earned, without loss of benefits which normally accrue to him/her during the period of suspension or dismissal".

The Company submitted in its preliminary submission that the Union, as a result of clause 27 (d), by agreement, has the burden of proving by evidence that the dismissal was unjustified. This submission was repeated by Mr Apted at the commencement of the hearing.

The Union did not specifically address this question in its preliminary submission. At the hearing Mr Raman indicated that the usual practice in disputes such as this was for the employer to present its case first as it carried the burden of proof.

The Tribunal accepted the Company’s submission and concluded that in this dispute as a result of clause 27(d), the burden of proof was on the Grievor to show that her dismissal was unjustified.

Mr Raman requested the Tribunal to include this Ruling in its final decision. Both parties indicated that they would make further submissions on the issue in their final submissions.

The Company dealt with this issue in paragraphs 2.6 and 2.7 of its written final submissions. The submission essentially repeated the contention that the effect of clause 27(d) is to reverse the usual practice and places the burden of proof on the Union. As a result, it is agued, it was also appropriate for the usual order of proceedings to be reversed.

The Union dealt almost exclusively with this issue in its final submission in reply. The Union relied on two arguments. First, the Ruling of the Tribunal in effect required the Grievor to prove her innocence and was as a result a travesty.

Secondly, the Union submitted that the Tribunal had consistently "upheld that the burden of proof in cases of dismissal rest with the employers and they were required to go first and prove justification despite the fact that similar clause as clause 27(d) being relied upon by the Company in this case existed in the collective agreements". The Union then referred the Tribunal to Award No.5 of 1998 to support its submission.

The Tribunal’s response to these two submissions may be stated briefly. First, clause 27(d) does not impose a burden on the employee to establish innocence. The clause reverses the usual practice by requiring the employee to prove that the suspension or dismissal was unjustified. This could extend to the employee satisfying the Tribunal that the penalty itself was unjustified in the circumstances of the case, even though the necessary facts had been established.

Secondly, there was no material before the Tribunal to show that an employer had sought to utilize the provisions of a clause such as clause 27(d) in any earlier dispute. It may have been that the usual practice had always been followed in termination disputes because the issue had not been raised in the past.

The Tribunal has concluded that there is no material in the decision in Award No.5 of 1998 which would require a reconsideration of the position taken by the Tribunal in this Dispute.

The Tribunal now confirms that the opening words of clause 27(d):

"If it shall be proved that an employee has been unjustly suspended or dismissed ....."

have the effect of requiring the employee to prove that the suspension or dismissal was unjustified. Whether the parties intended this result is a different matter. However when the words used are given their ordinary meaning, the result is that the employee has the burden of proof. It can only be the employee who is concerned with proving that the suspension or dismissal was unjustified.

It is the Tribunal’s opinion that there would be any number of ways in which clause 27(d) could have been worded if it had been the express intention of the parties for the employer to have the burden of establishing that the suspension or dismissal was justified.

The parties have made submissions on an agreement between the Company and the Company Branch of the Union which is dated 8 November 1996. The Company submitted that the effect of the 1996 Agreement is that the common law rule regarding summary dismissal is replaced, with the agreement of the Union, by an express contractual term that all cases involving proven stealing are punishable by summary dismissal, without exception.

Whilst that submission may have some merit, it does not have any merit in respect of section 28 of the Employment Act Cap.92. Section 28 has the clear intention of limiting the employer’s right to summarily dismiss employees. The Tribunal is of the opinion that whilst the 1996 Agreement may require summary dismissal in all cases of proven stealing, section 28 does not do so. It is the Tribunal’s opinion that the intention of section 28 is to allow summary dismissal for serious misconduct falling within one of the five circumstances listed in the section.

As the Company pointed out in its final submission, there is some inconsistency in the material concerning the basis of the Grievor’s dismissal.

As previously noted, the terms of reference for the Tribunal refers to the allegation by the Company that the Grievor stole two packets of cigarettes from the factory. The reference is consistent with the material in a letter dated 14 October 2003 from the Union’s General Secretary reporting the existence of a trade dispute to the Permanent Secretary.

However, the dismissal letter dated 4 August 2003 from the Company’s Human Resources Executive to the Grievor, omitting formal parts, states:

"Following your apprehension by Safety Security personnel for unauthorized removal of cigarettes from Excise area, your employment with the Company is terminated with effect from today 4 August 2003.

All monies due to you will be paid to you on Tuesday 5 August 2003"

In its final submission the Company acknowledged that if the Union’s claim that the Grievor removed the packets of cigarettes in accordance with an accepted practice in relation to discards, then the Grievor’s actions would not amount to stealing or to unauthorized removal.

In the event that the Tribunal is not satisfied that such a practice existed, then the question would still remain as to whether the Grievor’s actions amounted to stealing. Finally, if the Tribunal concludes that the Grievor’s actions amounted to either unauthorized removal or stealing, the fairness of the decision to dismiss summarily must be considered.

Before considering the evidence in relation to these matters, the Tribunal must deal with one further submission made by the Company. In its preliminary submission in paragraph 4.1, the Company has submitted that the Tribunal’s consideration of the terms of reference is limited to considering whether the summary dismissal breached any provision of the Grievor’s contract, whether express or implied by the Collective Agreement or by the common law. The Company claims that the Tribunal’s considerations should not extend to the concept of fairness as it is used in unfair dismissal legislation which exists in other jurisdictions but not in Fiji.

The Company relies on the Court of Appeal decision in Fiji Aviation Workers Association –v- Air Pacific Limited and another (Civil Appeal No.33 of 2001 delivered 11 April 2003) in support of its submission.

It should be noted that the terms of reference in that dispute and which lead to the Court proceedings required the Tribunal to consider the question of fairness in the context of a specific clause in the Collective Agreement dealing with redundancy procedures.

In this Dispute, the terms of reference does not direct the Tribunal’s attention to any clause in the Collective Agreement to which there is no reference at all.

However, more significantly on appeal in the same proceedings, (Civil Appeal No.6 of 2003 delivered on 17 September 2004) the Supreme Court of Fiji at page 14 stated:

"We agree with the Court of Appeal that the expression "substantive justification" (which is almost a "term of art" in the New Zealand legislation) should be avoided. It does not have a distinct existence in the law in Fiji. Rather that law, to put it generally, is to be found in the relevant Collective Agreement, in the common law and in section 33 of the Constitution; section 43(2) of the Constitution may also be relevant".

The Tribunal would add that in so far as summary dismissal is concerned, section 28 of the Employment Act is also material.

Since the reference requires the Tribunal to determine whether the dismissal was unjustified, the Tribunal has concluded that section 33 of the Constitution provides the necessary basis for the Tribunal to consider whether the dismissal was fair in a sense which is broader than that submitted by the Company. Section 33 of the Constitution provides that every person has the right to fair labour practices. There is no reason to conclude that "labour practices" does not extend to termination of employment by the employer.

At the hearing, all eight witnesses gave their evidence in chief by way of adopting a prepared written statement. Each witness was then cross-examined. The Tribunal does not propose to repeat the evidence set out in each of the written statements.

After a careful consideration of the evidence and having had the opportunity of observing the witnesses during cross-examination the Tribunal has reached certain conclusions in relation to the facts in issue. These may be stated briefly.

On 22 July 2003 the Grievor at some time during working hours picked up two packets of cigarettes which had been lying on the floor in the Making Department of the factory. The packets were Benson & Hedges 10.

The packets were part of a batch packed on 22 July and were not on the market as at 30 July 2003.

A security company, SSS, was engaged to provide security guards at the Employer’s premises. One of the duties of the security company was to ensure that employees did not remove company property from the premises. All employees were subject to daily inspections to ensure that they were not removing packets of cigarettes from the factory.

There was a custom which was made known to the security company that employees could remove five or six individual discarded cigarettes from the factory for smoking within the premises. There was also a practice whereby senior management were given a packet of cigarettes each day for trial and testing. A total of 32 packets were distributed each day. This practice was not extended to employees. Employees were not permitted to remove packets from the factory area under any circumstances.

Although the Grievor was subject to a daily bag inspection before leaving the premises, the two packets were only discovered in her bag on 30 July 2003. The Tribunal concludes that this was the first time when the Grievor had attempted to pass the check point with the packets in her bag. Between 22 July and 30 July the two packets must have been stored or kept in the staff facilities.

When first questioned on 30 July 2003 as to where the packets came from, the Grievor replied that she had bought them yesterday from the shop for her grog after work. Shortly afterwards when the Grievor was recalled to the checkpoint, she told the security staff that she had bought the packets for her husband’s grog from a shop. Later the same evening the Grievor told another version to the security staff, this time saying that she had been bringing the packets in and out of the factory for a number of days and the security guards had not spotted them before.

As a result of these findings the Tribunal has concluded that the Grievor had removed two packets of Benson and Hedges 10s without authorization.

At the check point where the Grievor was found in possession of the two packets, an employee may either proceed to the Bure for recreational purposes or may proceed to the gate to leave the premises. The Grievor maintained that it was her intention to proceed to the Bure and share the cigarettes with other employees. She was in fact recalled to the check point from the Bure rather than from the direction of the exit gate.

Although the Grievor told the security staff three different versions of how she acquired the packets and although the Grievor retained the packets for some days, these matters alone do not necessarily amount to an intention to steal the packets.

The Tribunal is not required to assess the Grievor’s actions according to the Penal Code. If the Employer was of the view that a genuine crime of stealing had been committed in accordance with section 259(i) of the Penal Code then it had a duty to report the matter to the Police. Although the Employer has referred to the Grievor’s actions as stealing it has treated the matter as a situation which amounted to stealing.

Under the circumstances the Tribunal is not prepared to conclude that the Grievor stole or attempted to steal the two packets. Her misconduct consisted in the unauthorized removal of two packets of cigarettes from the factory floor. At the very most she was entitled to take five or six individual discarded cigarettes for smoking on the premises and which usually occurred in the Bure. The practice did not extend to the removal of packets. Under no circumstances were employees authorized or permitted to remove packets from the factory area.

The Tribunal is also of the opinion that the Grievor’s behaviour demonstrated a dishonest disposition. She was not honest with the security personnel when questioned on 30 July 2004. Her explanation as to the retention of the two packets between 22 and 30 July was not convincing. As a result the Tribunal found the Grievor to be untrustworthy.

The Union does not raise any issue relating to procedural fairness in its submission.

The Union contends that the penalty is unjustified and harsh. It is submitted that greater weight should have been given to the Grievor’s long service and her good record.

The Grievor had been employed with the Company since January l989 and it would appear that this was the first time she had been subject to disciplinary proceedings. She apparently had a good work record up till the time of this incident.

However taking all the material into account the Tribunal is of the opinion that the penalty of summary dismissal was not harsh. A reasonable employer would be entitled to conclude that, as a result of the misconduct and the dishonesty, it could no longer have the necessary trust and confidence in the Grievor to sustain the employment relationship.

AWARD

The Grievor without authorization removed two packets of Benson & Hedges 10s from the factory floor. The evidence does not establish an intention to steal. The Grievor was dishonest in her explanation and as a result showed that she could not be trusted. The dismissal was justified and was not harsh.

DATED at Suva this 24 day of February 2005.

Mr. W. D. Calanchini
ARBITRATION TRIBUNAL