National Union of Hospitality, Catering and Tourism Industries Employees v Nadi Hotel [2006] FJAT 3; Award 41 of 2006 (24 July 2006)

THE REPUBLIC OF THE FIJI ISLANDS

NO. 41 OF 2006

AWARD OF
THE ARBITRATION TRIBUNAL

IN THE DISPUTE BETWEEN

NATIONAL UNION OF HOSPITALITY, CATERING AND
TOURISM INDUSTRIES EMPLOYEES

AND

NADI HOTEL

NUHCTIE: Mr F. Anthony with Mr T. Naivaluwaqa
Nadi Hotel: Mr R. Matebalavu

DECISION

This is a dispute between the National Union of Hospitality Catering and Tourism Industries Employees (the Union) and the Nadi Hotel (the Hotel) concerning the termination of employment of Ms Seruwaia Rokotuivuna (the Grievor).

A trade dispute was reported by the Union. The report was accepted on 24 May 2004 by the Chief Executive Officer who referred the Dispute to a Disputes Committee. As the Employer failed to nominate its representative to the Committee, 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 18 June 2004 with the following terms of reference:

" .......for settlement over the termination of employment of Ms Seruwaia Rokotuivuna with effect from 4 May 2003. The Union contends that the termination is unjust, unfair and wrong and seeks her re-instatement without loss of any wages and benefits from the day she was terminated."

The Dispute was listed for preliminary hearing on 14 July 2004. At the request of the parties the Dispute was re-listed for mention on 11 August 2004, and again on 15 September 2004. On that day the parties were directed to file preliminary submissions by 15 October and the Dispute was listed for further mention on 19 November 2004.

The Union filed its preliminary submissions on 17 November 2004.

As there was no appearance by or on behalf of the Union on 19 November 2004, the Dispute was re-listed for mention on 26 January 2005. At the direction of the Tribunal the Hotel filed its preliminary submission on 26 January 2005 and the Dispute was listed for further mention on 25 February 2005. On that day the Dispute was listed for hearing on 9 June 2005.

By letter dated 25 May 2005 the legal practitioners acting for the Hotel applied to have the hearing date vacated due to court commitments on 9 June 2005. The Tribunal granted the application and the Dispute was re-listed for mention on 24 June 2005. On that day the Dispute was again fixed for hearing on 15 September 2005.

By letter dated 22 August 2005 the Union applied to have the hearing date vacated due to overseas commitments of its legal practitioner on 15 September 2005. The Tribunal granted the application and the Dispute was again listed for mention on 30 September 2005. On that day the Dispute was fixed for hearing on 16 November 2005.

When the Dispute was called for hearing the legal practitioner appearing for the Hotel informed the Tribunal that he was not in a position to commence the hearing due to problems with witnesses. The Tribunal directed that the hearing date he vacated and listed the Dispute for mention on 25 November 2005. The Tribunal also directed that the Hotel pay $72.00 to the Union by way of expenses incurred as costs thrown away (or wasted) within seven days.

The hearing of the Dispute eventually took place on 7 February 2006 in Suva. The Hotel and the Union each called one witness to give evidence. At the conclusion of the evidence the parties sought and were granted leave to file written final submissions.

The Hotel filed its final submissions on 14 February 2006. The Union filed its answering submissions on 8 June 2006. Those submissions were not served on the Hotel until 6 July and by letter of the same date the Hotel’s legal practitioners informed the Tribunal that the Hotel did not intend to file a reply submission.

The Grievor was employed as a food and beverages supervisor under a contract of service dated 15 December 2001. At the time there was no collective agreement in existence between the Hotel and the Union. The Grievor’s terms and conditions of employment were to be found in her contract of service and in the Employment Act Cap 92. The Grievor gave evidence that she first started working at the Hotel on 16 June 2000 and that her contract of service dated 15 December 2001 formalised her employment position.

It would appear that on Friday 2 May 2003 the Hotel’s Manager conducted a check of the house bar float and discovered that the float was short by $10.00. The Tribunal accepts that this discrepancy was the result of one staff member borrowing $6.00 and another $4.00 for personal reasons only a day or so before the check. There were notes to that effect in the float and the staff concerned had returned the money the day after the check was conducted. The Tribunal is also satisfied that the Grievor as supervisor responsible for the float knew or ought to have known that there was a $10 discrepancy at the time the Manager conducted the check.

By memorandum dated 3 May 2003 the Manager sought an explanation from the Grievor. Omitting formal parts the memorandum stated:

"I conducted a normal procedural check on the bar cash float in the presence of staff member Camari on 02.05.03 and found that the cash did not balance and apparently staff have been taking money without approval.

My memo dated 07/01/03 is quite specific about this matter and it is quite obvious my instruction has been ignored without any reason.

As you are the supervising officer responsible for this department I seek your explanation to the following:

- why did you allow staff to take money out from the Bar float without my approval. No one has the authority to take this cash as it is for operational purposes.

- my instructions on memo dated 07/01/03 is quite specific and clear and I want to know reasons why it was not implemented and followed. I view this very seriously as insubordination.

- This matter has been ongoing for quite a while according to the staff that I interviewed and I want to know reasons why it was not reported to me despite my instructions.

I need explanation to the above by no later than 4pm today."

There are some observations which need to be made concerning this memorandum. First, there are a number of general allegations and it is not clear whether they are all being directed at the Grievor. Secondly, there are no details in relation to times, dates or other staff involved. Thirdly, there is no specific mention of the float being short by $10.00. Fourthly, there is no allegation of dishonesty, only insubordination. Finally, the Manager stated in evidence under cross-examination that if he had conducted any check of the bar float between 7 January 2003 and 2 May 2003, everything must have been in order as there had not been any occasion when disciplinary action had been taken against the Grievor.

The Manager’s memorandum dated 7 January 2003 and addressed to all staff stated:

"It is noted that some departments are issuing petty cash to staff members as credit and this is affecting our normal operation. No staff is allowed to take petty cash as credit or for some other purposes outside normal operational matters.

We will be conducting a check on 09/01/03 and all petty cash should be balanced.

No excuses will be entertained.

Spot checks will be carried out from now onwards."

Although there is some conflict in the evidence as to what if any conversation took place between the Manager and the Grievor on the following morning (ie 4 May 2003), it is acknowledged that the Grievor replied in writing and that her written explanation was handed to the Manager on the morning of 4 May 2003. Omitting formal parts, the Grievor’s reply stated:

"I would like to apologise for the matter that was received through Memo dated 3rd May, in regards to the shortage of Bar Float. Also noted in the Memo as Supervising Officer for F and B Department you need explanation.

I do admit that at times float has been given to staff for few reasons:

(1) For staffs bus fares.

(2) For immediate help.

(3) For paying items taken by staffs from other departments.

(4) For shortage during shifts cash offs.

I promise that I will be strictly on this matters and also becoming a new improving and progressing Dept and be a valuable asset to your Company."

By letter dated 4 May 2003 the Grievor was advised by the Manager that her employment was being terminated.

"I refer to my memo dated 03/05/03 and your reply dated 04/05/03.

Perusal of your file and after careful consideration of events mentioned in my memo dated 03/05/03 you have clearly breached instructions regarding usage of Bar Cash Float.

Reasons given in your letter dated 4 May 2003 is not acceptable under any circumstances.

Memo dated 27/03/2002 on your file indicates that this is not the first time discrepancies of similar nature has not been reported whilst you are fully of this cases.

Considering the above I have today terminated your employment with immediate effect"

It is clear from the termination letter that the Grievor was summarily dismissed for breaching instructions regarding the usage of the Bar Cash Float. The instructions are obviously those contained in the Memo dated 7 January 2003. It is also clear that in deciding that the appropriate penalty was summary dismissal, the Hotel’s Manager took into account a prior incident the details of which were set out in a memorandum dated 27 March 2002 addressed to the Grievor from the Hotel’s previous Manager. This memorandum stated:

"I trust you have received your copy of Remi’s suspension for her issuing the following stock without payment to a supervisor:

3 x packets Benson & Hedges 10s

1 x packet Benson & Hedges 20s

This is not the first instance that this offence has occurred, instigated by a Supervisor and with the full knowledge of fellow workers.

I have chosen not to take action against you as you were aware of the stock discrepancy but let you know that you share responsibility for Renu’s suspension and her loss of income over the next two weeks.

Should you fail to report any future discrepancies or abuse of office. I will have no option but to terminate your employment."

The Tribunal is not satisfied that the type of misconduct which is specified in that memorandum is the same as the misconduct which the Hotel referred to in the memorandum dated 3 May 2003.

It should be noted at this stage that the evidence of both the Hotel’s Manager and the Grievor was to some extent based on reconstruction. Their evidence was inconsistent with the documents which were tendered and both witnesses had difficulty in recalling relevant details relating to the incident. The Tribunal has concluded that the evidence given by both witnesses should be regarded as unreliable in relation to some of the more important aspects of the Dispute. The documents in evidence are regarded by the Tribunal as being more reliable.

In her written explanation the Grievor has admitted that staff have received money from the float for a variety of purposes. There is no suggestion in the written material that either the Grievor or any of the staff had actually stolen the money. The Tribunal also accepts that the $10.00 had been returned to the float within a day or two of the check. There is, in other words, no suggestion in the material of any dishonesty on the part of the Grievor or, with her knowledge, any of her staff.

The only clause in the Grievor’s contract of service which deals with immediate termination of employment is clause 9 which states:

"Any form of dishonesty will result in instant termination and at the management discretion proceed prosecution."

The Tribunal is not satisfied that the misconduct which was the basis of the decision to summarily dismiss the Grievor and to which reference is made in the correspondence dated 3 and 4 May 2003 amounts to dishonesty of the kind which is contemplated by clause 9 of the contract of service. As clause 9 is in the form of one sentence, it would appear that the dishonesty being referred to is dishonesty which at the Management’s discretion may result in instant termination of employment prior to any prosecution. The reference to prosecution is generally used in its ordinary sense as a reference to the commencement of criminal proceedings. The Tribunal is not satisfied that the misconduct which formed the basis of the decision to summarily dismiss the Grievor was criminal in the sense that criminal proceedings could have been commenced against the Grievor.

At common law an employer could summarily dismiss an employee for misconduct which amounted to a serious breach of contract by the employee. Section 28 of the Employment Act has the effect of limiting the employer’s common law right of summary dismissal to the categories of misconduct which are listed in the section.

Section 28 states:

"An employer shall not dismiss an employee summarily except on the following circumstances:

(a) where an employee is guilty of misconduct inconsistent with the fulfillment of the express or implies conditions of his contract of service;

(b) for willful disobedience to lawful orders given by the employer;

(c) ............

(d) for habitual or substantial neglect of duties;

(e) ............"

However, it is not any misconduct which falls within any of those categories which would allow the employer to summarily dismiss an employee. The misconduct must still amount to a sufficiently serious breach so as to allow the employer to treat the contract of service as having been brought to an end.

The Grievor’s employment was instantly terminated for breaching instructions. The Tribunal is not satisfied that the Grievor’s misconduct amounted to willful disobedience of the kind contemplated in section 28 and which would give rise to a right at common law to summarily dismiss the Grievor. Although, as supervisor, the Grievor should have been aware of the discrepancy, the evidence did not establish that the Grievor was on duty at the time the $10 was borrowed from the float by the two staff concerned. There was evidence that other staff did have control of the Bar float.

Therefore, the tribunal has concluded that the admitted breaches by the Grievor did not amount to misconduct of a sufficiently serious nature so as to justify the imposition of the penalty of summary dismissal. The Tribunal has concluded that a reasonable employer would have concluded that a less severe penalty was appropriate under the circumstances. The misconduct did justify a formal written warning.

The Tribunal is not satisfied that the Grievor was afforded procedural fairness on this occasion. The memorandum dated 3 May 2003 simply asked her to provide an explanation as to why instructions were not followed. She was not at any time advised that her misconduct was such that the Hotel was contemplating summary dismissal. Although a meeting may have taken place between the Manager and the Grievor on the morning of 4 May 2003, its purpose and the substance of what transpired remains uncertain. The Grievor was not given any opportunity either by herself or with union assistance to make any representation to the Hotel by way of mitigation concerning penalty.

Under the circumstances the Tribunal has concluded that the summary dismissal (or instant termination of employment without notice or payment in lieu of notice) was wrong and unjust in the sense that it was in contravention of the contract of service and was unreasonable. It was also unfair in the sense that the Grievor was not afforded the minimum standards of procedural fairness and natural justice.

Although re-instatement is the usual remedy in a dispute such as this, it is nevertheless a discretionary remedy. As the Grievor is now and has been since March 2004 in full time employment at a resort on the Coral Coast, it would be inappropriate to award re-instatement. The Tribunal directs that the Hotel pay to the Grievor three months wages in respect of the wrongful, unjust and unfair summary dismissal. Such payment is to be made within 28 days of the publication of this Award.

AWARD

The summary dismissal (instant termination) of the Grievor was wrong unjust and unfair. It was contrary to the terms of employment in the contract of service and was unreasonable. It was unfair as the Grievor was not afforded procedural fairness.

As the Grievor is in full-time employment, re-instatement is not appropriate.

The Grievor is to be paid three months wages within 28 days of publication of this Award.

DATED at Suva this 24 day of July 2006.

Mr. W. D. Calanchini
ARBITRATION TRIBUNAL