Fiji Bank and Finance Sector Employees Union v Colonial National Bank [2007] FJAT 20; Award 21 of 2007 (1 March 2007)

THE REPUBLIC OF THE FIJI ISLANDS

NO 21 OF 2007

AWARD OF
THE ARBITRATION TRIBUNAL

IN THE DISPUTE BETWEEN

FIJI BANK AND FINANCE SECTOR EMPLOYEES UNION

AND

COLONIAL NATIONAL BANK

FBFSEU: Mr P Rae
Colonial: Mr V Kapadia

DECISION

This is a dispute between the Fiji Bank and Finance Sector Employees Union (the Union) and Colonial National Bank (the Bank) concerning the payment of hardship allowance to Mr Ilaitia Damu (the Grievor).

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 the Committee did not convene within the prescribed time, 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 25 August 2006 with the following terms of reference :

" - - - for settlement over the Bank’s refusal to pay Mr Ilaitia Damu hardship allowance upon his transfer from the Bank’s Suva Branch to the Levuka Branch which the Union claims is in breach of clause 9 (x) of the Collective Agreement. The Union seeks that the Bank immediately remedies the breach by paying Mr Damu his hardship allowance as per his entitlement under clause 9 (x) of the Collective Agreement."

The Dispute was listed for a preliminary hearing on 1 September 2006. On that day the parties were directed to file their preliminary submissions within 21 days and the Dispute was listed for mention on 29 September 2006.

The Union filed its preliminary submissions on 28 September 2006.

On 29 September 2006 the Bank was granted an extension of 14 days to file its preliminary submissions and the Dispute was relisted for mention on 27 October 2006.

The Bank filed its preliminary submissions on 10 October 2006.

On 27 October 2006 the parties informed the Tribunal that they did not intend to call evidence and that a hearing would not be required.

The Tribunal directed the parties to file a signed statement of agreed facts within 14 days. The Dispute was listed for further mention on 24 November 2006. The parties filed a signed Statement of Agreed Facts on 23 November 2006. A schedule for the filing of final submissions was then agreed upon by the parties and the Tribunal.

The Union filed its final submissions on 18 December 2006. The Bank filed answering submissions on 25 January and the Union filed a reply submission on 15 February 2007.

The Grievor was first employed by the Bank in March 1997 at its Levuka Branch. The Grievor was transferred from the Levuka Branch to the Labasa Branch with effect from 29 June 1998. He was paid the hardship allowance of $1136.00 per annum. He was then transferred to the Bank’s Allfinanz Services Division on 28 June 2000. The hardship allowance was not paid in respect of the transfer to Suva.

On 16 January 2006 the Grievor was transferred from Suva to the Bank’s Levuka Branch. The Bank did not pay the hardship allowance in respect of that transfer.

The hardship allowance is provided for in clause 9 (x) of the Collective Agreement as amended and states:

"(Colonial) agrees to grant its employees hardship allowance as prescribed below:

(i) Employees shall be paid at the rate of one thousand four hundred and seventy nine dollars and eighty cents per annum with effect from the date of this agreement;

(ii) Provided the employee is transferred in the course of their duties from Viti Levu to outer islands and he/she must have completed 5 years of service with (Colonial)

(iii) This allowance will cease once the employees returns to Viti Levu.

The amount of the allowance which is specified in clause 9 (x) (i) came into effect on 1 August 2005.

In its preliminary submission, the Bank raised an issue concerning non-compliance by the Union with the Grievance procedure. This matter was not included in the Tribunal’s terms of reference, was not subsequently addressed by the parties in their final submissions and was not referred to in the signed Statement of Agreed Facts. For all of those reasons, the Tribunal does not propose to consider that matter any further.

Both parties have indicated that it would be of benefit to them if the Tribunal determined the meaning of clause 9 (x) of their Collective Agreement. To the extent that such a task is necessary for the determination of the present dispute, the Tribunal will set out what it considers to be the meaning of the hardship clause.

The principles to be applied when interpreting a written agreement, including a collective agreement, were discussed by the Fiji Court of Appeal in DIN AND ANOTHER –V- WESTPAC BANKING CORPORATION [2004] FJCA 30. The Court of Appeal stated at pages 7 and 8 that

"- - - the evidence relating to the negotiations between the Union and the Bank that led to the collective agreement should have been excluded as inadmissible. What the parties may have said or done or offered or rejected in the course of those negotiations is irrelevant when determining the meaning to be attributed to the clause in question. Similarly what the parties say they intended the clause to mean is inadmissible and irrelevant.

- - - The interpretation of the clause is to be approached objectively. It is the meaning that the clause would convey to a reasonable person having the relevant background knowledge that is to be determined, not the meaning that the parties to the agreement thought the clause would have.

It follows from this analysis that any belief the parties may have had about how clause (9 (x) ) should be interpreted is irrelevant. The parties agreed that the clause should be included in the collective agreement that they signed."

What then is the meaning that would be conveyed by clause 9 (x) to a reasonable person with the relevant background knowledge? That person would be aware that the clause, in the context of the collective agreement as a whole, was intended to provide for the payment, calculated on an annual basis, of an allowance which was distinct and different in nature from the other allowances provisions for which were also made in clause 9. The hardship allowance is to be distinguished from the "away from home allowance" and the "disturbance allowance (relocation) ".

In considering the meaning that would be conveyed to a reasonable person, the Tribunal has considered the structure of clause 9 (x) and in particular the circumstances which are set out in clause 9 (x) (ii) for determining the entitlement to payment of the hardship allowance.

It is clear that clause 9 (x) (i) provides for the payment of a hardship allowance at the rate of $1479.80 per annum to employees.

It is equally clear from clause 9 ( (x) (ii) that the hardship allowance is not payable to all employees. Clause 9 (x) (ii) commences with the word "provided". This clause is known as a "proviso’. A proviso is a clause in an agreement which introduces a qualification to, usually, the provision immediately preceding the proviso itself.

In this case clause 9 (x) (ii) introduces two qualifications or conditions to clause 9 (x)(i). In other words, before an employee is entitled to be paid the hardship allowance, that employee must meet or satisfy the two qualifications or conditions set out in clause 9 (x) (ii).

The first qualification is that the employee is being transferred in the course of his duties from Viti Levu to outer islands. The second qualification is that the employee must have completed five years of service with the Bank. Unless those two conditions are satisfied, an employee is not entitled to be paid the hardship allowance.

Finally, clause 9 (x) (iii) states that the allowance will cease when an employee returns to Viti Levu.

The Tribunal is satisfied that the transfer of the Grievor to Levuka on 16 January 2006 qualified the Grievor for payment of the hardship allowance under clause 9 (x) of the agreement. He was transferred from Suva which is on Viti Levu to Levuka on the outer island of Ovalau. He had been employed by the Bank at the time for almost nine years. Both the conditions in clause 9 (x) (ii) were satisfied.

It is not within the Tribunal’s terms of reference to consider the propriety of the payment of the hardship allowance to the Grievor in June 1999 when he was transferred from Levuka to Labasa after only 15 months employment with the Bank.

The tribunal is satisfied that there is no basis for interpreting the clause in the manner sought by the Bank. There is no basis for the implied term that the hardship allowance was to be paid for transfers from the point of recruitment or that Viti Levu implied Ovalau because it was the point of recruitment of the Grievor.

As a result the Tribunal has concluded that the hardship allowance payable by the Bank pursuant to clause 9 (x) of the collective agreement shall be payable to an employee who is to be transferred from Viti Levu to an outer island in the course of his duties and who has completed five years of service with the Bank. The allowance ceases when that employee returns to Viti Levu.

In the event that this interpretation does not reflect that which the parties had intended, then, it will be necessary for the clause to be revisited.

The Tribunal accepts that its interpretation does not necessarily cover all the situations which the Union might otherwise have expected the clause to cover. The Tribunal also accepts that this interpretation of the clause is clearly at odds with that applied by the Bank. The best the Tribunal can do is to apply the principles identified by the Court of Appeal which are applicable in performing the task required by this Dispute.

AWARD

The Grievor is entitled to the hardship allowance pursuant to clause 9 (x) in respect of his transfer from Suva to Levuka on 16 January 2006.

DATED at Suva this 1 day of March 2007

Mr. W. D. Calanchini
ARBITRATION TRIBUNAL