PAFCO Employees Union v Pacific Fishing Company Ltd [2006] FJAT 10; Award 57 of 2006 (13 November 2006)

THE REPUBLIC OF THE FIJI ISLANDS

NO 57 OF 2006

AWARD OF
THE ARBITRATION TRIBUNAL

IN THE DISPUTE BETWEEN

PAFCO EMPLOYEES UNION

AND

PACIFIC FISHING COMPANY LIMITED

Union: Mr T Tokalauvere
Company: Mr G Singh

DECISION

This is a dispute between PAFCO Employees Union (the Union) and Pacific Fishing Company Limited (the Employer) concerning the suspension of Mr Marika Tora (the Grievor).
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A trade dispute was reported by the Union. The report was accepted 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 5 A (5) (a) of the Trade Disputes Act Cap 97.

The Dispute was referred to the Permanent Arbitrator on 16 December 2005 with the following terms of reference:

".............. for settlement over the employer’s failure to follow the Memorandum of Agreement and arbitrarily suspended the employment of Mr Marika Toka with effect from 4 December 2004 which the Union claims is in direct breach of the Disciplinary Procedural process stipulated in the Master Agreement signed between the company and the union and duly registered on 12 July 2001 with the Ministry of Labour, Industrial Relations and Productivity. The Union submits that:

1. That Mr Toka be re-instated immediately and compensated from the day of his suspension – cum – termination (sic).

2. That Mr Toka will not lose his benefits and years of service."

The Dispute was listed for preliminary hearing on 27 January 2006. On that day the parties were directed to file their preliminary submissions by 27 February 2006 and the Dispute was listed for mention on 24 March 2006.

On 24 March 2006 the parties requested a hearing date. The Dispute was listed for hearing on 11 and 12 May 2006.

By letter dated 17 April 2006 the Union requested that the hearing date be vacated on the grounds that the Union’s General Secretary would be contesting the 2006 General Election as a candidate for the House of Representatives.

As a result of this application the Dispute was listed for mention on 28 April 2006. Unfortunately there was no appearance by or on behalf of either party on that date. As a result the Dispute was relisted for mention on 26 May 2006. The Tribunal was left with no choice but to vacate the hearing dates previously allocated.

On 26 May 2006 the parties requested a fresh hearing date. The Dispute was fixed for hearing on 19 September 2006.

The hearing of the Dispute commenced in Suva on 19 September and was completed on 20 September 2006. During the course of the hearing the Employer called four witnesses and the Union called three witnesses, including the Grievor, to give evidence.

At the conclusion of the evidence, the parties sought and were granted leave to file written final submissions. The Employer filed its final submissions on 3 October 2006. The Union filed its answering submissions on 17 October and the Employer filed a reply submission on 24 October 2006.

At this stage it is appropriate for the Tribunal to make some general comments on certain issues raised by the parties in their submissions, especially those filed by the Union.

First, to the extent that there was any delay in the manner in which this Dispute proceeded to a hearing then it can be attributed solely to the parties.

The reason for the hearing not proceeding on 11 and 12 May 2006 was the decision of the Union advocate to contest the May General Elections. This was clearly stated in his letter dated 17 April 2006. Then, neither party attended the mention scheduled for 28 April 2006. When the parties next appeared before the Tribunal on 26 May 2006, their Dispute was allocated the first available hearing dates which were convenient to both parties. The Tribunal does not consider that the time which elapsed from the date of referral being 16 December 2005 to the hearing dates first allocated amounted to undue or unreasonable delay.

Secondly, the terms of reference are the subject of considerable comment by the parties. The issue which arises for determination is clearly set out in the terms of reference. The Tribunal is required to determine whether the Employer failed to follow the Agreement by arbitrarily suspending the Grievor with effect from 4 November 2004. The Union claimed that the Employer breached the disciplinary process set out in the Agreement signed by the parties.

As a result the Tribunal indicated to the parties at the commencement of the hearing and now confirms that the subsequent termination of employment does not fall within the terms of reference. It is noted that the Grievor was not formally advised that his employment had been terminated until a letter was delivered to the Union by the Employer during the course of the Disputes Committee proceedings.

If one or other of the parties wanted to challenge the terms of reference to the Tribunal, the appropriate course of action was to proceed by way of an application for judicial review in the High Court. The Tribunal has no jurisdiction to conduct an examination into the correctness or propriety of the terms of reference.

The incident giving rise to the Dispute occurred on Friday 29 October 2004. It would appear that a bin (number 2200) containing a substantial quantity of fish was left standing in a storage area instead of being moved to the butchery. The fish became unusable and the Employer suffered loss.

It was alleged that the Grievor had failed to properly check the bins on his paperwork and as a result did not notice that bin 2200 had not arrived at the butchery. The paperwork which passed through the Grievor’s control during the process showed that bin 2200 had been properly processed. It was not disputed by the parties that bin 2200 had in fact not been processed at the butchery.

Although the forklift driver was responsible for the physical movement of the bins containing thawed fish, the Company alleged that the Grievor’s gross negligence in the manner in which he performed his duties resulted in the thawed fish in bin 2200 not being butchered.

By letter dated 2 November 2004 from the Employer’s Industrial Relations Manager, the Grievor was requested to "show cause". The letter stated:

"We have received information about your practising incorrect work procedures and falsifying work documents last 29 October 2004 during your shift. This is a very serious offence.

Please submit in writing why you should not be disciplined for this offence. I am giving you 24 hours, upon receipt of this letter, to submit your reply.

Should you choose not to reply to this letter, I have no other alternative but to institute disciplinary action against you in line with the Master Agreement."

There are two observations which should be made about this letter. First, there were virtually no details provided in the first paragraph to enable the Grievor to adequately deal with the general allegations. Secondly, in view of what is asserted to be the very serious nature of the matter, it would appear that 24 hours was an unreasonable time limitation.

Prior to receipt of this letter, the Grievor had worked on Sunday 31 October and Monday 1 November 2004. On Tuesday 2 November he was told at the Security Gate that he was not permitted to enter the premises to work. He was permitted to enter to receive the letter dated 2 November 2004.

The Tribunal accepts the Grievor’s evidence that he only became aware of the allegations when he received the letter dated 2 November 2004. As there were no particulars in the letter, the Grievor stated that he had to find out from his Supervisor what exactly was being alleged against him.

As required by the Employer, the Grievor wrote a letter dated 3 November 2004 which set out his explanation concerning the allegations. Omitting formal parts, that letter stated:

"Concerning the above mentioned I the undersigned is working on the Butcher section as a Tag man and has been faced with a certain problem listed below (sic).

My job as a Tagman is to see that every bin is dumped in the hopper and record every "Qiqi" that goes in the pre-cooker.

This particular incident happened on 29 October, when a bin was not dumped in the hopper it came about when the fish liner, butcher boys and rackers were quick in doing their jobs making it impossible for me to keep up and the forklift driver doesn’t wait for me to finish tagging the "Qiqi" resulting in the brought in recorded not dumped, and that bin was just left there with all the empty bins.

And when all the empty bins were taken outside the undumped bin were amongst them. Even the forklift driver couldn’t compare the difference between an empty bin and a full one (sic).

Also the thawer should have realized that the particular bin hasn’t been dumped because it was still in his section.

In my opinion I was wrongly blamed because in the workplace the workers should be considerate of others"

The Tribunal also accepts the Grievor’s evidence that apart from an explanation given to the Grievor by his Supervisor, the Grievor did not at any time have any discussion with the Employer concerning the substance of the allegations.

On the Friday of the same week the Grievor collected his suspension letter dated 4 December 2004. It was accepted by the parties that the date was wrong and that it should have appeared as 4 November 2004. This is the handwritten date which appeared above the signature of the Employer’s Industrial Relations Manager. This letter stated:

"Re: Suspension without pay pending dismissal

It has been brought to our attention that you have falsified company records last 29 October. No proper verification and reconciliation was done on bin 2200, thereby causing the bin not being butchered. Your negligence caused the company about 500kg of fish which is approximately $500 USD. Your actions cannot be tolerated.

As such, and in accordance with Section 17 (iii) (iii, xi and xiv) of the Master Agreement you have been found guilty of serious misconduct.

- Falsifying of company documents

- Gross negligence on your part

- General disregard and contempt of performance

As a result of the seriousness of your actions I have decided that you be suspended without pay pending the completion of investigation for the serious misconduct in accordance with section 17 (iii) (iii, xi and xiv) of the Master Agreement effective immediately.

During this time you are not to come into the company premises except to go to the Personnel Office to present your case. Management will consider the case and a final decision will be delivered within one month in accordance with the MOA."

The letter was addressed to a number of cc addressees including the Union’s Secretary.

The Tribunal accepts the Grievor’s evidence that he was not interviewed by the Employer following receipt of this letter as part of any investigation. The Tribunal also accepts his evidence that he was never advised as to the outcome of the investigation and that he personally never received a letter from the Employer terminating his employment. The Employer did not lead any evidence to establish that a letter of termination had been forwarded to the Grievor.

As a result the Tribunal has no hesitation in concluding that up until the date on which this Dispute was reported in August 2005, this was a case of indefinite suspension. It should also be noted that the Employer’s witnesses did not provide any evidence that an investigation had been conducted nor was any report tendered in evidence.

It is appropriate to make four observations about the suspension letter. First, the letter represented the first time when the Grievor was advised by the Employer of the particulars and details of the allegations against him.

Secondly, the first two paragraphs certainly convey the impression that the Employer has already determined that the Grievor has committed the acts of serious misconduct which are alleged.

Thirdly, the letter does not provide any indication as to the basis of the conclusions reached by the Employer. The Grievor was not provided with copies of nor even shown the relevant documents which were the subject matter of the allegation concerning the falsifying of company documents.

Finally, the letter is headed "suspension without pay pending dismissal" The Agreement between the parties does not contain any provision for suspending the Grievor pending dismissal. The Agreement allows for suspension pending the completion of investigation in respect of serious misconduct.

Clause 17 of the Agreement which became effective on 12 July 2001 deals with Discipline and Disciplinary Procedures. For the purposes of this Dispute, the starting point is clause 17 (vi) which is headed "Suspension (as a procedural requirement)" and which so far as is relevant, states:

"i) An employee who commits a serious misconduct under above (sic) may be suspended by the Company through any of its authorized officers with or without pay or part thereof pending the completion of investigation for the alleged serious misconduct.

ii) The Company shall issue to the employee his letter of suspension which shall be copied to the Union and shall state the reasons for the suspension and the date by which the employee is required to submit to the Company, if he wishes, a written explanation on the allegations against him.

iii) ..........................

iv) The Company shall not delay the investigation of allegations of serious misconduct against any employee on suspension beyond one month from the date of the employee’s suspension, but the Company and the Union may agree to extend this period where circumstances warrant such extension.

v) The decision of the Company after and as a result of its investigations shall be conveyed to the employee in writing and copies to the Union as soon as possible after the investigations are completed.

vi) The Company may, at its discretion, suspend an employee with or without pay or part thereof for a specified period of time by way of a disciplinary penalty in accordance with (iv) above."

The Tribunal is satisfied that the purpose of clause 17 (vi) is to allow an employee to be placed on administrative or procedural suspension to enable the investigation into the allegations against him to be completed. This form of suspension is to be distinguished from suspension as a penalty. Suspension is one of three penalties which may be imposed by the Employer for a disciplinary offence under clause 17 (iv) of the Agreement. Suspension as a penalty is distinguished in clause 17 (vi) (vi) (supra).

Disciplinary offences may be by way of misconduct (clause 17 (ii) ) or serious misconduct (clause 17 (iii) ).

Suspension as a procedural or administrative measure can only be imposed if the allegations relate to disciplinary offences which fall within the serious misconduct list of offences under clause 17 (iii). Suspension as a penalty, however, may be imposed in respect of offences which fall under misconduct or serious misconduct.

The specific offences of serious misconduct which were alleged against the Grievor in the suspension letter are set out in clauses 17 (iii) sub clauses (iii) (xi) and (xiv) which state:

"(iii) Falsifying of time sheets, Birth certificates, character references, application forms or clocking employees time care (sic).

(xi) Gross negligence, insubordination, failure to observe safety procedures, misuse of fire and safety equipment and failure to wear or use protective clothing when specifically required to do so.

(xii) General disregard and contempt for performance and behaviour that are part of expected standards for normal work, particular (sic) after warnings from management about work."

Having reviewed the documentary evidence and after having carefully considered the evidence given at the hearing the Tribunal has concluded that the Employer has breached clause 17 of the Agreement.

The Tribunal has some reservations as to whether the evidence adduced at the hearing supported the allegations of serious misconduct which allowed the Employer to activate the procedural suspension provision of clause 17.

However even if it is conceded that there were sufficient grounds for the Employer to categorise the allegations as offences of serious misconduct, the Employer failed to comply with the requirements set out in clause 17 (vi). The Employer’s actions indicated a total disregard of the spirit and purpose of the clause.

The letter by its heading and the first two paragraphs indicated that the Employer had pre-determined both the outcome of the investigation and the penalty without giving the Grievor a proper and fair opportunity to address the allegations or mitigate on penalty.

The Grievor had been requested to submit in writing why he should not be disciplined for this offence. However this was in a letter which pre-dated the suspension letter. As noted earlier in this decision the information provided by the Employer in his letter dated 2 November was insufficient for the Grievor to adequately respond. The Grievor should not have been expected to determine the details of the allegations through his Supervisor.

The suspension letter did not contain any request for the Grievor to provide "a written explanation on the allegations" by a specified date as was required by clause 17 (vi).

Furthermore the Tribunal considers that the request to provide a written explanation on the allegations as required by clause 17 (vi) is not the same as and is not safisfied by the request to submit in writing why he "should not be disciplined for this offence" as stated in the letter dated 2 November 2004.

On the evidence the Tribunal is satisfied that the investigation, if one was ever conducted, was not completed within one month from the date of suspension nor was there any agreement between the parties to extend the period beyond one month.

The Tribunal is not satisfied that the Grievor was informed of the result of the investigation as soon as possible after the investigation.

On the contrary, the Tribunal has concluded that the Grievor was never directly informed of the outcome of the investigation by the Employer.

The Tribunal is satisfied that if an investigation pending suspension was conducted, it was not fair to the Grievor. He was denied any opportunity to formally answer or respond to the detailed allegations against him. He was not interviewed nor was a statement sought from him as part of the investigation, The Tribunal does not consider that the letter dated 2 November from the Employer nor the Grievor’s response dated 3 November 2004 were part of the investigation for the purposes of clause 17.

The Tribunal has concluded that the Employer has breached the requirements of clause 17. Furthermore the Grievor has been denied procedural fairness in the manner in which the investigation, if any, was conducted whilst the Grievor was suspended.

In this case the Tribunal has concluded that the Grievor should be re-instated. There is no evidence to suggest that the Grievor would not continue to be a harmonious and effective member of the Employer’s team.

The Grievor is to be re-instated with effect from 4 November 2004 and is to be paid twelve months salary with the balance to be regarded as leave without pay.

AWARD

The Employer has breached clause 17 of the Agreement. The Grievor was not afforded natural justice during the investigation.

The Grievor is to be re-instated with effect from 4 November 2004. He is to be paid 12 months salary and the balance is to be deemed leave without pay.

DATED at Suva this 13 day of November 2006

Mr. W. D. Calanchini
ARBITRATION TRIBUNAL