Fiji Bank and Finance Sector Employees Union v Life Insurance Corporation of India [2005] FJAT 9; Award 10 of 2005 (17 February 2005)

THE REPUBLIC OF THE FIJI ISLANDS

NO. 10 OF 2005

AWARD OF
THE ARBITRATION TRIBUNAL

IN THE DISPUTE BETWEEN

FIJI BANK & FINANCE SECTOR EMPLOYEES UNION

AND

LIFE INSURANCE CORPORATION OF INDIA

FBFSEU: Mr. P Rae
LICI: Mr. H Nagin

DECISION

This is a dispute between the Fiji Bank and Finance Sector Employees Union (the Union) and the life Insurance Corporation of India (the Employer) concerning the termination of employment of Aseli Kolikata (the Grievor).

A dispute was reported on 5 April 2004 by the Union. The report was accepted on 16 April 2004 by the Chief Executive Officer who referred the dispute to a Disputes Committee. As a consensus decision was not reached, the Minister authorized the Chief Executive Officer 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 28 May 2004 with the following terms of reference.

".....for settlement over the termination of employment of Aseli Kolikata with effect from 26 March 2004.The Union submits that management’s action’s is in breach of disciplinary procedure as per section 16 of the Collective Agreement and is unjust and therefore should re-instate her without loss of benefits."

The Dispute was listed for a preliminary hearing on 18 June 2004. On that day the parties were directed to file preliminary submissions by 28 July 2004 and the Dispute was listed for hearing on 13 September 2004.

The Employer filed its opening submissions on 19 July and the Union did so on 21 July 2004.

At the hearing the Employer called two witnesses and the Grievor gave evidence for the Union. At the conclusion of the evidence the parties sought and were granted leave to file written final submissions on 27 September 2004. The Union filed answering submissions on 19 November 2004 and the Employer did not file any submissions in reply.

The terms of reference require the Tribunal to determine whether management’s actions were in breach of the disciplinary procedure which is set out in clause 16 of the Collective Agreement. The Tribunal is also required to determine whether summary dismissal was unjust.

The essential facts of the Dispute may be stated briefly. The Grievor joined the Employer as an employee on 7 December 1990. She was appointed Cashier on 12 September 2003. The Grievor had preciously worked in that position for a total of about three years. On 17 March 2004 the Grievor left the work place some time between 4.30 and 4.45 pm. She placed a locked cash box on top of a safe located in the manager’s office. The key for the safe was held by the Deputy Manager who was at that time attending a meeting on the next floor. It would appear that a short time after the Grievor had left the office, it was noted by another senior manager that the cash box had been left unattended on top of the safe when the officers on that floor were still open.

It would also appear that the proper procedure for putting away the cash box at the end of each working day involved the cashier and her supervisor obtaining the safe key from the Deputy manager and all three would witness the putting away of the cash box. It would appear that this practice was rarely followed to the letter.

On 18 March 2004 the Employer gave a letter of suspension to the Grievor. This letter was subsequently withdrawn on the same day and another letter of the same date was given to the Grievor. Omitting formal and relevant parts, this letter stated:

"It has come to our notice that you have left the office yesterday afternoon without keeping the cash box inside the safe which is one of your most important duties as the cashier. The cash box was found lying unattended inside the Manager’s (Finance & Administration) at 4.45 pm yesterday when no one was present in the office (level 3) and the office was wide open.

This is a case of dereliction of duties and tantamount to " substantial neglect of duties" on your part as cashier. Under the circumstances, kindly show cause as to why you should not be dismissed from the employment of the corporation as per the clause 4 (iv) a and d of the memorandum of agreement of the dated 7 February 2000 signed with the Fiji Bank and Finance sector Employees Union. Your explanation in writing should reach the undersigned within 7 days of receipt of this letter.

Please note that this letter overrides our earlier letter of suspension dated 18 March 2004, which stands withdrawn."

By letter dated 23 March 2004 the Grievor responded in unity to the Employer. Omitting formal parts, her letter stated:

"This is in regards to your letter dated 18/03/04 in substantial neglect of duties as cashier".

I feel that I should not be unfairly dismissed as:

I have worked for fourteen years in this Organization without any bad records.

As you have quote "neglect of duties", on my part, why wasn’t the supervisor present to see that the cash box is locked. Do I have to wait for the key after 4.30 pm when my official time is 8.00 to 4.30 pm? Please if the person who is keeping the key will not be available during office time, if supervisor are given opportunity in locking the cash box with me.

I apologize for what had happened and I am extremely sorry for all the inconvenience caused at your end.

I have bought a flat for which I am paying rent and also present with me are my two nieces for their education I am taking care of. I also have commitments at home for which I need my salary.

Sir, I hope that this letter will reach you in good health and highly consideration and I assume you that such error will not be repeated in future."

By letter dated 26 March 2004, the Employer’s Chief Manager informed the Grievor that she was to be dismissed for substantial neglect of duties. The last paragraph of that letter states:

"After giving a careful consideration of the guaranty of your actions, the circumstances under which they were committed, and after careful consideration of your reply dated 23 March 2004. I conclude that this is a clear case of sheer carelessness and I have no option but to discuss you from the employment of the cooperation with immediate effect for "substantial neglect of duties as per the clause 4 (iv) (a) and (d) of the memorandum of Agreement dated 7 February 2000 signed with the Fiji Bank and Finance Sector Employees Union."

At the hearing evidence was given that on the day in question the cash box contained $16323.01 in cheques and $9398.84 in cash.

Evidence was also given that the responsible supervisor for that day, a Mr. Sunil Kumar, was also disciplined for what happened. However his penalty was demotion from section officer to insurance officer on the basis that the Employer regarded the Grievor to the primarily responsible for locking the cash box in the safe.

At the hearing the Grievor in her evidence offered a further explanation as to why she left the office that afternoon before she received the key from the Deputy manager to lock the cash box in the safe. Her explanation was that one of her nieces was ill and needed to be taken to hospital urgently. This explanation was not included in her written response dated 23 March 2004 to the Employer.

The Tribunal proposes to first consider the question whether the decision to summarily discuss the Grievor was unjust. The Employer has ruled on clause 4 (IV) of the Collective Agreement. This clause enables the Employer to summarily dismiss an Employee under certain circumstances, including:

"(a) Where an employee is guilty of misconduct inconsistent with the fulfilment of the express or implied conditions of his or her contract service.

(b) ----

(c) ----

(d) For habitual or substantial neglect of his or her duties.

(e) ----"

So far as clause 4 (IV) (a) is concerned, clause 20 of the Collective Agreement specifies some of the express conditions of the Grievor’s contract of employment. Clause 20, so far as is relevant, states:

"In order to ensure that Corporation’s business is carried out in an efficient manner, it shall be the duties of the employees to:-

i) Work with integrity

ii) Be of good conduct at all times and adopt good work ethics.

iii)----exercise due care, shall and diligence while attending to duties.

iv) Abide by the Instructions given by the Employer either orally or in writing.

v) ----

vi) safeguard the financial interest of the employer

vii) always out in the interest of the employer

viii) ----

ix) ----

x) ---"

It has to be acknowledge that the Grievor’s actions on 17 March 2004 do amount to non – compliance with most, if not all, of these duties. It must also be accepted that the amount of cash in the cash box was by any standards considerable. However, the issue is whether the misconduct was sufficiently serious to justify the penalty of summary dismissal and whether there was a sufficient indicating factor to warrant the imposition of a lesser penalty. In other words was the decision to summarily discuss the Grievor reasonable under all the circumstances.

The Grievor’s evidence at the hearing was that she left the office at about 4.40 pm on 17 March and that there were still other employees present in the workplace on the third floor when she left. This evidence was not contradicted by the Employer.

Mr. Dharam Prakash, the holder of the key to the safe gave evidence that he returned from the meeting to the third floor at about 4.45 pm on the day in question. The offices were not locked and the cash box was placed on top of the safe. The cash box was noticeable.

The effect of the evidence was that the cash box was left unattended for about five minutes. For some time less than that it was left unattended with the third floor office unlocked and with no staff present.

The Grievor’s supervisor did not give evidence and although disciplined, it is the Tibunal’s view that he was somewhat dealt with for misconduct which placed the cash box at risk almost to the same extent as the Grievor’s misconduct. The supervisor, Mr. Kumar, failed to supervise. If the security of the cash box is of such importance to the Employer then the supervisor has a clean obligation to ensure that the Grievor’s duties were performed each day according to the Employer’s tasks were less important and would therefore require less suspension – However it is clean to the Tribunal that the security of the cash box is something which justified greater involvement and supervisor on the part of the supervisor. This was obviously lacking on the 17 March 2004.

The Grievor had been employed for about 14 years with the Employer. These was no material placed before the Tribunal to suggest that anything of a similar nature had occurred in the part. The Grievor had up until 17 March 2004 an unblemished record of service.

There was certainly no suggestion that there was any dishonest or fraudulent notice behind the misconduct.

The Grievor’s explanation concerning the sick niece which was given during the hearing was not accompanied by any medical evidence in support. Nor was this matter mentioned in the letter dated 23 March 204. The explanation does not advance the Grievor’s position to any extent for those reasons.

However it is the Tribunal’s opinion that on balance the penalty of summary dismissal was harsh under the circumstances. A employer acting reasonably and taking into account the circumstances, the good work record of the Grievor, would have concluded that a lesser penalty was appropriate.

The next question involves compliance with the disciplinary procedure set out in clause 16 of the collective Agreement.

So far as is relevant, clause 16 provides:

a) ----

b) ----

c) When an employee is being interviewed in connection with an alleged, which may lead to disciplinary action against the employee, he shall be informed in uniting by the Manager or his nominee of:

(I) the purpose of the interview;

(II) the charges against him;

(III) the fact that disciplinary action may result;

(IV) his right if he so, to be accompanied and represented by an official of the Union.

(d) If following such interview the employer proposes to taken disciplinary action, the employer shall be informed of the proposes disciplinary action, the employee shall be informed of the proposed disciplinary action. Such advise shall be given in unity and a copy given to the Union if requested by the employee.

(e) The Authority competent to impose a penalty may itself enquire into such of the charges as are not admitted or if it considers it necessary so to do, appoint a board of enquiry or an enquiry officer for the purpose.

Provided however that this procedure shall not be followed in cases of dismissal in terms of sub – clause (a) or in cases of summary dismissal in terms of claims 4 of this Agreement."

(f) ----

(g) ----

(h) ----

It is the Tribunal’s opinion that when clause 16 is read as a whole and when consideration is given to the purpose of clause 16, the which appears in sub clause (e) applies only to the procedure in sub – claims (e). As a consequence even when the Employer is contemplating summary dismissal as a penalty then there is a requirement for the Employer to comply with sub – claims (e) and (d) clause 16.

It would appear that the only discussion which took place between the Grievor and the Employer was on the morning following the incident when the Grievor arrived at work. This was 18 March 2004.

The Grievor was handed two letters on 18 March 2004 as has been discussed earlier in this decision. Then the dismissal letter was handed to the Grievor on 26 March 2004. There were no discussions during that period.

There was no evidence to suggest that the discussion which took place on 18 March 2004 Mr. Rao and the Grievor in any complied with clause 16 (c) of the Agreement. Although a copy of the second letter dated 18 March 2004 was apparently forwarded to the Union’s secretary, it is the Tribunal’s opinion that the procedure adopted by the Employer complies with neither the letter nor the spint of clause 16.

The Tribunal has concluded that the summary dismissal was harsh and therefore unjust. The procedure adopted by the Employer did not comply with clause 16. The next issue is what should be the remedy in this disputes. It appears to the Tribunal that a prudent employer acting reasonably may have considered that an appropriate penalty in this case would have been a warning under clause 16 (a) of the Agreement.

The Union claims that the Grievor should be re-instated from the date of her dismissal without loss of benefits.

The Employer submits that the Grievor has lost the trust and confidence of her Employer.

The remedy of re-instatement is di . There was no allegation of dishonesty or fraudulent intent. The Employer suffered no loss and the potential risk lasted no more than five minutes. The admitted neglect on the part of the Grievor, for whatever reason, does not necessarily point to 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 four months arrears of salary, the balance is to be deemed leave without pay.

AWARD

The termination of employment was harsh and unjust. This termination was also unfair in the sense that the Grievor was not procedural fairness in accordance with clause 16 of the Agreement. The Grievor is to be re-instated with effect from the date of termination. She is to be paid from months arrears of salary with the balance deemed as leave without pay. She is to be issued with a just warning pursuant to clause 16 (a) which is to be effective for 12 months from the date of issue.

DATED at Suva this ....... day of February 2005.

ARBITRATION TRIBUNAL