BP (SS) Co Ltd and WR Carpenter Groups Salaried Staff Association v Carpenters Fiji Ltd [2006] FJAT 9; Award 56 of 2006 (1 November 2006)

THE REPUBLIC OF THE FIJI ISLANDS

NO 56 OF 2006

AWARD OF
THE ARBITRATION TRIBUNAL

IN THE DISPUTE BETWEEN

B.P (SS) CO LTD & W.R. CARPENTERS GROUP
SALARIED STAFF ASSOCIATION

AND

CARPENTERS FIJI LIMITED

Staff Association: Mr A Singh
Carpenters: Mr J Waqaivolavola

DECISION

This is a dispute between B.P (S.S) Co. Ltd. and W. R. Carpenters Group Salaried Staff Association (the Union) and Carpenters Fiji Limited (the Employer) concerning the termination of employment of Mr Shammi Kapoor (the Grievor).

A trade dispute was reported on 11 April 2005 by the Union. The report was accepted on 2 May 2005 by the Chief Executive Officer who referred the Dispute to conciliation. During the course of the conciliation proceedings the parties agreed to refer the Dispute to voluntary arbitration. As a result the Minister authorized the Chief Executive Officer to refer the Dispute to an Arbitration Tribunal for settlement pursuant to section 6(1) of the Trade Disputes Act Cap 97.

The Dispute was referred to the Permanent Arbitrator on 24 May 2005 with the following terms of reference:

"................... over the termination of employment of Mr Shammi Kapoor with effective (sic) from 23 February 2005, which the union submits as unjust, unfair, harsh and wrong. The union therefore seeks his re-instatement to his present position without loss of salary and benefits from the date of termination".

The Dispute was listed for a preliminary hearing on 27 May 2005. As there was no appearance by or on behalf of the Employer, the Dispute was listed for mention on 24 June 2005. On that day the parties were directed to file preliminary submissions within 28 days and the Dispute was relisted for mention on 29 July 2005.

The Union filed its preliminary submissions on 18 July and the Employer did so on 28 July 2005.

On 29 July 2005 the Dispute was listed for further mention on 30 September 2005 to enable the parties to have further discussions. At the request of the parties the Dispute was also listed for mention on 28 October and 25 November 2005.

The hearing of the Dispute commenced in Suva on 30 January and concluded on 31 January 2006. During the course of the hearing, the Employer called four witnesses and the Union called 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 4 May 2006. The Union filed its answering submission on 24 July 2006. By letter dated 29 August 2006 (but only received by the Tribunal on 20 October 2006) the Employer indicated that it did not intend to file a reply submission.

The Grievor was appointed acting Manager Wholesale in April 1999. Prior to that time he had been employed as a sales representative in the Employer’s Wholesale department. As at the date of the termination of his employment in February 2005, he had been employed by the Employer for almost 30 years.

The evidence concerning the Grievor’s performance in the role of acting Manager Wholesale was inconsistent. In a letter dated 12 October 2001 from the Merchandise Manager, the Grievor was advised that his performance in eight key performance indicators was "below par".

However, in a letter dated 13 November 2001, (just one month later) from the Employer’s General Manager, the Grievor was advised that his team had "again achieved more than budgeted and more than targeted PBIT $ for the 3rd Quarter (July- September 2001)". The Grievor was also advised in that letter that he would be paid an additional $750 bonus for the "fine effort indeed".

The Employer’s accounts for 2004 indicated that the Grievor’s department had not achieved its targets or performed within budget nor up to expectations.

A number of reasons were put forward by the Grievor in his evidence to explain the poor results.

The Employer’s General Manager expressed management’s concern about this matter in a letter dated 2 December 2004 addressed to the Grievor which stated:

"Your overall performance as Acting Manager for MH Wholesale is deteriorating and has been a major concern to Senior Management.

Necessary assistance has been rendered to assist you in lifting your performance but no improvement seems to be forthcoming.

You are hereto advised that Senior Management will closely monitor your performance and you must show improvement within the next 2 months. Senior management will have to take drastic actions against you if no improvement mat rialized (sic) within the specified period.

We hope that you will not allow Management to write to you again on this subject".

The evidence established that this letter was in the form of a standard letter which was sent to a staff member who was not performing up to the required standard. The Tribunal is not satisfied that this letter constituted a formal warning letter for the purposes of any applicable disciplinary procedures.

The Tribunal is satisfied that since 2002 the performance of the Grievor’s department had been deteriorating. The Employer’s evidence was to the effect that there had been discussions between senior management and the Grievor concerning performance of the department over a prolonged period of time.

Although some measures were implemented, they did not appear to have any noticeable effect on results. By the end of 2004 there had still not been any significant improvement. Although some of the reasons for the poor results such as staffing levels and deliveries were beyond the Grievor’s control, the fact remains that the Grievor was responsible for the performance of his department.

The position in this dispute became somewhat confused by an intervening and unconnected matter concerning damage to property owned by a Mr Singh and caused by a contractor who had been engaged by the Employer. In a letter dated 26 January 2005, the Employer wrote to the Grievor concerning this matter. The letter contained allegations against the Grievor that he failed to follow instructions and that he demonstrated insubordination towards a senior manager. The third paragraph of that letter stated.:

"In view of the above this letter therefore serves as a 2nd and Final Warning for insubordination and negligence of duties. Any other infraction on your part may result in the termination of your employment".

The Tribunal is satisfied on the balance of probabilities that this matter did not form the basis of the decision taken by management to terminate the Grievor’s employment.

By letter dated 23 Februry 2005 the Grievor was advised that his employment was being terminated.

The first paragraph of that letter stated:

Effective immediately your services are no longer required and in terms of Schedule C clause 4(1) of the Master Agreement between Carpenters Fiji Ltd and the W R Carpenter Group Salaried Staff Association on termination, we are giving you one month’s pay in lieu of notice."

It was not disputed that the notice complied with the relevant clause of the Agreement and that the Grievor did receive the payment in lieu of notice provision for which is set out in the clause.

As this is a case of termination of employment by giving notice or payment in lieu of notice, the Tribunal is required to determine whether the Employer has acted in good faith (reasonably) and has treated the Grievor fairly in the context of terminating employment.

The Tribunal is satisfied that the poor performance of the Grievor’s department over a prolonged period was a sufficient ground for the Employer to reach a decision in good faith that the Grievor’s services were no longer required. The evidence given by the witnesses called on behalf of the Employer established that the Employer had acted in good faith in reaching that decision. The accounts for the period January 2004 to January 2005 supported the conclusion that the Employer had acted in good faith. It was clearly open to senior management to conclude that the Grievor, for whatever reasons, was not able to turn around the performance of his department

However the Tribunal is not satisfied that the Grievor was treated fairly in carrying out the termination decision.

In Central Manufacturing Company Limited –v- Yashni Kant (Civil Appeal No 10 of 2002 delivered 24 October 2003) the Suprement Court at page 21 stated:

".................there is an implied term in the modern contract of employment that requires an employer to deal fairly with an employee, even in the context of dismissal. ......It does extend, however, to treating the employee fairly, and with appropriate respect and dignity in carrying out the dismissal".

In this case it would appear that on the issue of performance, there was no written communication by the Employer with the Grievor between the letter dated 2 December 2004 and the termination letter dated 23 February 2005. There was no discussion between management and the Grievor at the time he was handed the termination letter. The letter "itself" is extremely brief and almost callous in its tone. Almost thirty years of service to the Employer deserved better and at the very least some thanks.

The Tribunal has concluded that on the particular facts of this case the termination of the Grievor’s employment was effected in a manner which was humiliating and distressing to the Grievor. As a result the Tribunal is satisfied that the Employer has breached this implied term.

Whilst re-instatement is not appropriate as a remedy in this case, the Tribunal consider it appropriate to award the Grievor three months salary as compensation for the manner in which the Employer carried out the termination.

The Employer raised an issue concerning the standing of the Union as a party to the Dispute. It is now accepted that if one party seeks to challenge the standing of another party named in the reference, it should do so by way of an application for judicial review in the High Court and do so without delay. The Tribunal has no jurisdiction to rule upon the standing of parties in a dispute which has been referred for settlement.

AWARD

The decision by the Employer to terminate the Grievor’s employment was reasonable and taken in good faith.

The Employer has not treated the Grievor fairly in carrying out the decision. The Employer has breached an implied term of the Grievor’s contract of service. The Grievor is to be paid three months salary as compensation. This payment is to be made within 28 days of publication of this Award.

DATED at Suva this 1 day of November 2006

Mr. W. D. Calanchini
ARBITRATION TRIBUNAL