Tropik Wood Staff Union v Tropik Wood Industries Ltd [2007] FJAT 19; Award 20 of 2007 (28 February 2007)

THE REPUBLIC OF THE FIJI ISLANDS

NO 20 OF 2007

AWARD OF
THE ARBITRATION TRIBUNAL

IN THE DISPUTE BETWEEN

TROPIK WOOD STAFF UNION

AND

TROPIK WOOD INDUSTRIES LIMITED

TWSU: Mr J Seniroqa
Tropik Wood: Mr J Bale

DECISION

This is a dispute between the Tropik Wood Staff Union (the Union) and Tropik Wood Industries Limited (the Employer) concerning the retirement of Mr Waisea Ratabakau (the Grievor).

A trade dispute was reported on 20 January 2006 by the Union. The report was accepted on 8 February 2006 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 19 April 2006 with the following terms of reference :

" - - - for settlement over unilaterally retiring Mr Waisea Ratabakau by the company, which is contrary to clause 5.9 of the Collective Agreement. The Union contends that the decision of the Company is unfair, unjust and wrong and seeks that the Company withdraws Mr Waisea’s retirement and allow him to continue working for the company without any loss in pay and benefits".

The Dispute was listed for a preliminary hearing on 28 April 2006. On that day the parties were directed to file their preliminary submissions within 21 days and the Dispute was listed for mention on 26 May 2006.

The Union filed its preliminary submissions on 23 May 2006.

On 26 May 2006 the Employer was granted an extension of 14 days to file its preliminary submissions and the Dispute was relisted for mention on 23 June 2006. The Employer was then directed to file its submissions within 14 days and the Dispute was again listed for mention on 28 July 2006.

The Employer filed its preliminary submissions on 20 July 2006.

On 28 July 2006 the parties were directed to file a signed statement of agreed facts within 28 days and the Dispute was listed for further mention on 1 September 2006.

A signed Statement of Agreed Facts was filed by the parties on 4 September 2006.

The Union filed its final submissions on 21 September 2006. The Employer filed answering submissions on 2 January 2007. The Tribunal accepts that the delay in doing so was due to matters which were beyond the control of the Employer. The Union filed a reply submission on 30 January 2007.

The Grievor commenced employment with the Employer on 22 August 1986 as a Senior Clerk in its Accounts Department. He turned 55 years old on 7 November 2003. On 23 February 2004 the Employer advised the Grievor that it intended to retire him on 28 May 2004, which it did and paid him a retirement lump sum payment equivalent to 48 days pay (the retirement package). The retirement package was paid in two instalments. The first instalment which amounted to $4362.62 (being the equivalent of 30 days pay) was paid on 28 May 2004. The second instalment which amounted to $1635.98 (being the equivalent of 18 days pay) was paid shortly thereafter. It was not disputed that these payments were made to the Grievor. The retirement package has at all times been retained by the Grievor. There was no suggestion that the Grievor’s work performance was unsatisfactory or that he was suffering from ill-health when he was retired on 28 May 2004.

The relevant part of clause 5.9 of the Collective Agreement states :

"The Employer may, at its absolute discretion, retain the services and employment of any employee beyond the normal retiring age of 55 years and up to the compulsory retiring age of 60 years subject to continuing efficiency and satisfactory health."

In Award No 46 of 2005 the Tribunal concluded that if the Employer exercised its discretion to continue employing an employee after he had turned 55 years old, then it must continue to do so until that employee reached 60 years old unless inefficiency or ill-health justified an earlier retirement.

As a result it would appear that the Grievor should have continued to be employed until he turned 60 years old as there was no suggestion that he was inefficient or in ill-health to an extent that would have enabled the Employer to retire him before he turned 60 years old.

The only issue is whether acceptance and retention by the Grievor of the retirement package meant that he waived his contractual right to remain in employment until he had turned 60 years old.

The Tribunal is satisfied that the Employer has breached clause 5.9 of the Agreement. However, it is now well over two years since the retirement package was paid and received by the Grievor. He has had the use of the money and the Employer has been deprived of that money.

The Tribunal accepts that the payment was based on a formula applicable to employees who were, rightly or wrongly, being offered retirement packages. It was not a final pay entitlement as a result of termination or dismissal. If the Grievor had felt genuinely aggrieved by the decision taken by the Employer to retire him early and in breach of the Agreement, he should have expressed that grievance prior to accepting the retirement package. There was no material to suggest that the Grievor or the Union had corresponded with the Employer between 23 February 2004 (being the date of the notice of intention to retire the Grievor) and 28 May 2004 (being the date of retirement).

Furthermore the Grievor could have demonstrated his good faith in relation to his grievance by returning the retirement package at the first opportunity open to him.

The acceptance and retention of the retirement package by the Grievor amounted to voluntary early retirement.

Both parties have made reference to the Dispute involving Jesoni Balewai which was settled by the Tribunal in Award No 46 of 2005. The Tribunal notes that the issue in that Dispute was whether the Employer had exercised a discretion to continue to employ the Grievor beyond 55 years. There was no material before the Tribunal in that Dispute to indicate whether any retirement package had been paid to or received and retained by the Grievor.

AWARD

By continuing to employ the Grievor after he turned 55 years old, the Employer had exercised its discretion to continue to employ him till he reached 60 years old, in the absence of inefficiency or ill-health.

The indication by the Employer to the Grievor on 23 February 2004 that it intended to retire him on 28 May 2004 was contrary to clause 5.9 of the Agreement.

The acceptance of that notice and the subsequent acceptance and retention of the retirement package by the Grievor since 28 May 2004 to the present have altered the position and amounted to acceptance of voluntary early retirement.

DATED at Suva this 28 day of February 2007

Mr. W. D. Calanchini
ARBITRATION TRIBUNAL