PAFCO Employees Union v Pacific Fishing Company Ltd [2007] FJAT 41; Award 43 of 2007 (23 July 2007)

THE REPUBLIC OF THE FIJI ISLANDS

NO 43 OF 2007

AWARD OF
THE ARBITRATION TRIBUNAL

IN THE DISPUTE BETWEEN

PAFCO EMPLOYEES UNION

AND

PACIFIC FISHING COMPANY LIMITED

PAFCOEU: Mr T Tokalauvere
Pacific Fishing: Mr G Singh

DECISION

This is a dispute between PAFCO Employees Union (the Union) and Pacific Fishing Company Limited (the Employer) concerning 62 members of the Union who were allegedly laid off in breach of the Collective Agreement.

A trade dispute was reported by the Union on 25 May 2005. 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 5A (5) (a) of the Trade Disputes Act Cap 97.

The Dispute was referred to the Permanent Arbitrator on 21 December 2005 with the following terms of reference:

"- - - for settlement over the company’s failure to follow the Master Agreement (MA) signed between the Pacific Fishing Company Limited and the Union which was registered on July 12 2001 with the Ministry of Labour and the Memorandum of Agreement (MOA) wherein the Company arbitrarily laid of 64 members on a temporary and rotational basis without adhering to the procedural process of the law and the (Union) demands that all 64 union members be:

(i) Paid the entire working days they were systematically laid off with the corresponding wage.

(ii) Permanent working status be fully restored.

(iii) Fully re-instate without loss of benefits and years of service.

(iv) That company stops its victimization policy against all union members.

(v) That company stops its unlawful campaign against all union members who went on industrial strike from 8 August 2003 or any other union member forming the workers organization after the industrial strike.

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

The Employer filed its preliminary submissions on 9 February 2006.

On 24 March 2006 the Union requested a further mention date to allow time to consider the possibility of commencing proceedings in the High Court. The Dispute was relisted for mention on 28 April 2006. As there was no appearance by or on behalf of either party, the Dispute was listed for mention on 26 May 2006. On that day the Union was granted an extension of 21 days to file its preliminary submissions and the Dispute was again listed for mention on 23 June 2006. A further 14 days was then extended to the Union.

The Union filed its preliminary submissions on 12 July 2006.

The Dispute was fixed for hearing on 12 October 2006. On that day the Employer applied for the hearing date to be vacated due to the absence overseas of one of its witnesses. The application was granted on terms that the Employer pay to the Union the sum of $578.00 within seven days as costs thrown away. The Dispute was relisted for mention on 27 October, 24 November 2006, 19 January and 23 February 2007, at the request of one or both of the parties.

The Dispute was then fixed for hearing on 23 May 2007. However upon receiving a letter dated 28 March 2007 from the Union, the Tribunal directed that the Dispute be listed for mention on 27 April 2007. On that day, unfortunately, there was no appearance by the Employer and the Dispute was relisted for special mention on 7 May 2007. The Dispute was then refixed for a three day hearing commencing on 9 July 2007.

When the Tribunal reviewed the preliminary submissions, the Dispute was again listed for mention on 18 and 25 May 2007, and then on 1 June 2007. The hearing date previously allocated was vacated.

On 1 June 2007, the parties met with the Tribunal to determine the precise issues in dispute. The parties agreed that the terms of reference was to be amended down to read 62 workers and not 64 workers. The parties also agreed that the following documents were to be admitted into evidence as exhibits:

1. List of 62 workers (TT1)

2. Agreement dated 12 July 2001 (the Collective Agreement)

3. Agreement dated 24 September 2003 (the first agreement)

4. Memorandum of Understanding dated 9 December 2003 (the second agreement)

5. Agreement dated 16 April 2004 (the third agreement)

6. Agreement dated 18 July 2004. (the fourth agreement)

The parties were directed to file a signed statement setting out any agreed facts and the issues for the Tribunal. The Dispute was listed for further mention on 6 June and then 12 June 2007.

The hearing of the Dispute commenced on 3 July and was completed on 4 July 2007. During the course of the hearing, the Union called five witnesses and the Employer called one witness to give evidence. At the conclusion of the evidence the parties presented oral final/closing submissions.

The background to this Dispute was the industrial unrest and strike at the Employer’s premises in August 2003. At that time the employment relationship between the parties was governed by a Memorandum of Agreement which came into force on 12 July 2001 (the Collective Agreement). Clause c on page one of the Agreement dealt with "Classification of Workers" and provided:

"(i) Permanent wage earners are those hourly paid employees who are under regular employment with the company

(ii) Temporary wage earners are those hourly paid workers who are engaged to do the same work as permanent or regular employees but for specific or protracted periods when required by the Company."

It would appear that the parties resolved their differences and the strike came to an end. The parties subsequently signed a Memorandum of Agreement dated 24 September 2003 (the first agreement). It was a wide ranging agreement and only some of its provisions are relevant to this Dispute. Those provisions are:

"(v) Both employer and union agree that the 36 outstanding issues raised by the union shall be negotiated and agreed by 31st October 2003, except item (L) which employer agrees to settle as follows:

a. That the employer will re-instate the 24 employees as per dispute committee decision of 3rd April 1997.

b. That the employer agrees to re-instate the remaining of 57 employees as listed in the Ratu Joni M Award dated 21 October 1997.

c. The union and the employer agree that employees in respect of ‘a’ and ‘b’ above shall be paid 50% of the wages lost for the duration they were denied work.

(vi)The union agrees that employees who are listed in a and b and who are currently in employment of the company shall not be paid the 50% wages. This does not include those who were on strike.

(vi) The Union agrees that all members shall return to work effective 29th September 2003 and the employer agrees to pay all wages lost in respect of these workers from 07.08.03 till date of re-instatement at the rate 50% of the normal wage.

(vii) The employer shall not victimize any striking employees.

(viii) – (xi) - - - -

(xii) The parties agree to enter into open dialogue to right size and or down size of the overall work force. The Employer shall offer Voluntary Redundancy based on Government Redundancy Package. The voluntary separation offer shall be valid for a period of 21 days and employees opting for the package shall so indicate their acceptance in the form prescribed by the employer. The employer shall not unreasonably withhold or deny such application and shall be processed in a reasonable period of time. The employer shall provide names of all employees to the union in different categories with their respective service prior to the commencement of the dialogue on the redundancy scheme should the required targets are not achieved by the Voluntary Redundancy. The parties agree to co-operate on this issue.

(xiii) - - -

(xiv) - - - ".

It would appear that the parties had some further discussions over a period of time on the issue of the return to work for all striking workers. The issue was not reported as a trade dispute. Apart from the re-instatement of striking workers, there were a number of unrelated long-standing differences between the parties. The parties attempted to resolve these issues in a signed Memorandum of Understanding dated 9 December 2003 (the second agreement).

This was a lengthy agreement which dealt with a wide range of issues. So far as the present Dispute is concerned, the following clauses are relevant:

(j) On re-instatement, the 50% payment for the strike period shall only apply to regular employees working a week prior to the strike and were scheduled to work during the 8 weeks of the strike. Employees on rotation shall only be paid during the period in which they were scheduled to work during the 8 weeks of the strike period. All supporters and sympathizers who are neither regular nor rotation employees shall not be entitled for any payment.

(l) All payments shall only be applicable for the period actually worked and for leave entitlements under the agreement.

(q) Regular and Pool employees to be finalized by the Task committee based on performance and skill and ability.

(t) Rightsizing and downsizing for management to decide with the partners and in dialogue with the Task Committee and Subsidiary Committees.

(aa) All hourly paid employment are frozen and any new recruits will require the union blessing and in line with Board manning approval.

(bb) Total manning restricted shall be for 580 positions and the rest shall go on rotation or pool and engaged where necessary based on performance and skill and ability.

At the end of the MOU, the following appeared:

"The above agreed clarification, obligation and commitments of the application has to be read strictly with the MOA signed on 24 September 2003"

Although there was some attempt made by the parties in the latter agreement to clarify the question of payment whilst on strike, it would appear that the parties did not address the issue of the return to work of striking workers who had not been taken back on 29 September 2003.

It is clear that to the extent that it was necessary to do so, the second agreement was executed for, amongst other reasons, the purpose of clarifying certain issues which were dealt with in the first agreement.

The parties then signed a document dated 16 April 2004 (the third agreement) which dealt with the composition and functions of the Disciplinary Committee and the Work Place Committee. The function of the Disciplinary Committee was stated as:

To ensure that the Disputes and Grievances procedures are correctly and fairly followed before reaching the Disciplinary Committee Board. In the event of dispute, it will be referred to main Committee."

In a further attempt to resolve outstanding differences, the parties signed a Memorandum of Agreement dated 18 July 2004 (the fourth agreement). So far as is relevant this Agreement stated:

"Issues discussed in relation to Memorandum of Agreement dated 29th day September 2003 and Memorandum of Understanding dated 9th day December 2003 where both the parties agreed that two agreements still holds and further resolved and discussed

- - -

Union – Agreed to the following arrangements for the re-instatement of striking workers and their backpays.

- 31 union members to become permanent workers as per list attached.

- 59 workers to get 50% for the operating days, as deductions for days worked, 25% of operating days goes to the Union. Their names (59) go in the company pool, as per list attached.

- It was also further resolved that the 59 workers will be now in the Company Pool, PAFCO will call them as and when required. Union will not raise anymore issues in future, if they fail to perform.

- PAFCO will endeavour its best to use the 59 workers to the best of their abilities, performance and skill.

- In the event the 59 workers fail to perform, they will be terminated through procedures in the collective agreement.

- In the event of any of the above 59 workers wishes to leave employment, the Company undertakes to pay additional 3 months pay in full and final settlement.

PAFCO – At any point in time PAFCO will take liability for 580 workers only, through downsizing and right sizing.

- - -

This is to confirm and finalise, that as from today all pending issues since September 29, 2003 and further to your letter dated 23rd March 2004.

The Union will not raise any issues any further as from today except for items 2 & 3 in the agenda, where both the Union and PAFCO Works Committee to resolve within 30 days.

- - - "

The report of the trade dispute stated that the matter in dispute concerned the Company’s failure to follow the Master Agreement and the Memorandum of Agreement wherein the company arbitrarily laid off 64 members on a temporary and rotational basis without "adhering to the procedural process of the Rule of Law".

The reference to a Memorandum of Agreement in the Reference is apparently a reference to the first agreement dated 24 September 2003, as a copy of that Agreement was attached to the report of the trade dispute. For reasons best known to itself, the Union failed to refer to any of the subsequent agreements which the parties entered into prior to the report of the Dispute to the Labour Ministry.

As noted the number of employees the subject matter of this Dispute was not 64 but rather 62.

The Tribunal accepts the evidence given on behalf of the Employer that 14 of the listed 62 workers have accepted a voluntary package. There was no evidence from the Union to the contrary. Those workers were identified as numbers 7, 8, 13, 23, 25, 26, 27, 34, 35, 39, 40, 41, 46, 53 (as amended, originally 55) on the list of workers attached to the report of the trade dispute.

Essentially, the task of the Tribunal in settling this Dispute involving the 62 workers is to first interpret the relevant provisions of the Collective Agreement and the first agreement. Then the Tribunal must determine how, if at all, the three subsequent agreements have varied the obligations of the parties which were set out in the Collective Agreement and the first agreement.

The Tribunal also accepts the evidence given by witnesses called by the Union and finds that there have been cases where both permanent and temporary/pool employees were either not called back to work on 29 September 2003 or who have been since that date laid off in a selective and arbitrary manner without any or reasonable explanation. This was to some extent supported by the evidence given by the Employer’s only witness.

The principles to be applied in interpreting a Collective Agreement or, for that matter, any of the agreements made between the parties, were discussed by the Fiji Court of Appeal in DIN and Another –v- WESTPAC BANKING CORPORATION (Unreported Civil Appeal No 6 of 2003 delivered 26 November 2004).

Commencing at paragraph 25, the Court observed:

"- - - the evidence relating to the negotiations between (the parties) 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 the clause should be interpreted is irrelevant. The parties agreed that the clause should be included in the collective agreement that they signed."

In determining the meaning that would be conveyed by any clause to a reasonable person with the relevant background knowledge, the Court of Appeal considered it appropriate to consider the intended purpose of clause in the context of the agreement as a whole. The Court also considered it appropriate to examine the syntax of the clause in question. This means that it is appropriate to examine the arrangement of the words and phrases which form the sentences in the clause of the agreement which is being interpreted.

It is also appropriate to consider the interpretation which each party has put forward and assess whether the result is consistent with business common sense and the purpose and intent of the clause as a whole.

Turning now to the various agreements. First, the Collective Agreement. For the purposes of this Dispute clause C and clause 15 would appear to be relevant. Clause C on page 1 of the Agreement conveys the meaning that the parties have agreed that employees were to be classified as either Permanent or temporary. Both classifications are defined (supra).

The definition of temporary workers conveys the meaning that these workers are additional to the permanent workforce and are called upon when required by the Company.

It should be noted that by the time the parties signed the second agreement dated 8 December 2003, the expression pool employee had replaced the expression temporary wage earner in respect of those workers who were not permanent.

Although clause 15 of the Collective Agreement set out some arrangements in respect of the contracting of temporary workers it would appear from the evidence that a different practice had evolved for the engagement of temporary/pool workers and apparently at least with the implied approval of the Union.

Clause (vi) of the first agreement dated 24 September 2003 conveys the meaning that Union and its members will end the strike with effect from 29 September 2003. On that date the Union agreed that its striking workers would make themselves available to return to work.

The Tribunal accepts the evidence given by Mr Vasi that not all the striking workers were taken back by the Employer on 29 September 2003. Of the approximate 400 employees who went on strike, it would appear that about 200 were permitted to return to work on 29 September 2003.

Of that number about 50 were temporary (pool) workers and 150 were permanent workers.

In this regard, it is appropriate to determine what exactly was agreed in the first agreement. In clause (vi) the Union agreed that all (striking) members would return to work effective 29 September 2003. What this means is that the striking workers were to make themselves available for work on and from that date. It did not necessarily follow that the Employer would have work for all 400 striking workers on and from 29 September 2003. What the Employer did agree to was that it would pay 50% of lost wages to striking workers for the period 7 August 2003 to the date of re-instatement.

The Tribunal might have been prepared to find that there was implied in the clause a proviso that it was not reasonable for all permanent striking workers to resume work at once on the same day. In other words due to the effects of the strike it may not have been reasonable for the Employer to be expected to take back all the striking permanent workers on 29 September 2003.

However there was no evidence from the Employer on this point. Furthermore there was no satisfactory explanation given in evidence as to why only approximately 150 permanent workers resumed work on 29 September 2003.

The Tribunal is satisfied that the provisions of the Collective Agreement do not guarantee full time work for those employees classified as permanent workers. However that does not mean that the Employer could arbitrarily refuse to take back some of the striking permanent employees and not take back others. Furthermore, those permanent employees who have been laid off for any period since 29 September 2003 have not been given any explanation and nor was any satisfactory reasonable explanation offered in evidence before the Tribunal. As a result the Tribunal has concluded that those permanent employees who were not taken back for work on 29 September 2003 and those permanent workers who have been selectively laid off without explanation since that date have been treated unfairly by the Employer. This conclusion also applies up to the point in time when permanent employees subsequently accepted the package to which reference was made earlier in this decision.

The Tribunal accepts the evidence from the Employer that due to a downturn in business it has become necessary to operate with one shift of permanent workers per working day instead of the two shift arrangement which was previously in place.

As a result the Tribunal is satisfied that any of the 62 workers whose names appear on the list (exhibit 1) and who prior to the strike had worked as permanent workers and who either were not taken back on 29 September 2003 and/or who have been selectively and randomly laid off since that date are entitled to be compensated in the form of their lost wages. This conclusion is qualified by the need to take into account any necessary alteration to the work arrangements required by the move to only one shift per day.

Although the second agreement dated 9 December 2003 sought to clarify the question of payment of wages to workers whilst on strike, there is no provision in that agreement which would appear to have the effect of varying the obligations implied in the first agreement.

The third agreement does not deal with the issue of workers returning to work.

The fourth agreement dated 18 July 2004 expressly attempted to resolve the issue, amongst others, of the re-instatement of striking workers. The Tribunal is satisfied that the arrangements set out in that agreement are intended to finalise the return to work of the striking workers who had not been taken back on 29 September 2003. To the extent that the agreement varies the blanket obligation in the first agreement it was binding on the parties. However, the agreement only took effect from 18 July 2004 as there was no provision to indicate that it was to have retrospective effect.

As a result the Employer is obliged to compensate those permanent workers who were not taken back on 29 September 2003 and/or who were selectively and randomly laid off since that date up to the date of the fourth agreement being 18 July 2004. From that point on the provisions of the fourth agreement prevail and only those workers who were then regarded as permanent workers under that agreement are entitled to any further compensation in respect of any lost wages as a result of having been selectively or randomly laid off up to the date of the Award.

So far as temporary/pool workers were concerned, the Tribunal accepts that the 50 or so who resumed work on 29 September 2003 were required by the Employer and the remainder were not required at that time.

Those temporary/pool workers who were not offered work on 29 September 2003 were entitled to expect that they would be offered work on a rostered basis in accordance with the practice that was in place prior to the strike.

Although there was very little evidence on this aspect of the Dispute, the Tribunal is prepared to conclude that between 29 September 2003 and 18 July 2004 those temporary/pool who were available for work and who were not offered work according to the pre-strike practice, have been unfairly treated by the Employer.

The arrangements set out in the fourth agreement dated 18 July 2004 take effect on and from that date in respect of the temporary/pool workers.

However the Tribunal notes that due to the business decision to operate only one shift per day, the requirement for additional labour in the form of temporary or pool workers might have become non-existent.

The Tribunal also notes and accepts that the Employer is currently employing casual labour to replace absent permanent workers. The use of casual labour for replacement purposes, as distinct from using casual labour to top up the number of permanent workers required in any given week, is not contrary to the Collective Agreement.

The Tribunal has concluded that the workers who names were included in the list of 62 who were at the time of the strike employed as temporary/pool workers and who have not been offered any work since then without any explanation have been treated unfairly and are entitled to four weeks wages by way of compensation.

However, the Tribunal, on the evidence, is not able to make any other findings which would warrant the making of an Award in favour of any other temporary/pool workers.

AWARD

1. Those permanent workers on the list of 62 names who were either not taken back on 29 September 2003 or who were laid off selectively and randomly at any time between 29 September 2003 and 18 July 2004 are entitled to their wages for the time they were laid off.

2. Those workers who continued to be classified as permanent workers after and as a result of the fourth agreement dated 18 July 2004 are to be paid their wages in respect of any period they were selectively and randomly laid off. This is to be qualified by the effect on the rostering of permanent workers as a result of the transition from two to one shift per day.

3 .Those workers on the list of 62 names who were employed as temporary pool workers and have not been offered any work since 29 September 2003 are to be paid 4 weeks salary. The Tribunal is satisfied that they have not been offered any reasonable explanation for their exclusion from the roster. This part of the Award applies only to those striking workers who were classified as temporary/pool workers as at 29 September 2003.

DATED at Suva this 23 day of July 2007

Mr. W. D. Calanchini
ARBITRATION TRIBUNAL