Fiji Public Service Association v Fiji Museum [2007] FJAT 45; Award 47 of 2007 (27 July 2007)

THE REPUBLIC OF THE FIJI ISLANDS

NO 47 OF 2007

AWARD OF
THE ARBITRATION TRIBUNAL

IN THE DISPUTE BETWEEN

FIJI PUBLIC SERVICE ASSOCIATION

AND

FIJI MUSEUM

FPSA: Mr N Tofinga
Museum: Ms D Prakash

DECISION

This is a dispute between the Fiji Public Service Association (the Association) and Fiji Museum (the Employer) concerning the 2003, 2004 and 2005 Log of Claims.

As a result of a declaration dated 29 September 2006 declaring the strike by the Union to be unlawful pursuant to section 8 of the Trade Disputes Act Cap 97 the Minister authorized the Chief Executive Officer to refer the Dispute to an Arbitration Tribunal for settlement pursuant to section 6 (2) (a) of the Act.

The Dispute was referred to the Permanent Arbitrator on 29 Seoptember 2006 with the following terms of reference:

"- - - for settlement over the failure/refusal of the Employer to settle the 2003, 2004 and 2005 Log of Claims".

The Dispute was listed for a preliminary hearing on 6 October 2006. On that day the parties were directed to file their preliminary submissions within 14 days and the Dispute was listed for mention on 27 October 2006.

The Employer filed its preliminary submissions on 19 October and the Association did so on 23 October 2006.

The Employer was granted leave to file further preliminary submissions which it did on 30 October 2006.

The Dispute was then fixed for hearing on 21 and 22 February 2007.

The hearing of the Dispute commenced on 21 February 2007 in Suva. The hearing continued on 22 February, 22 March, 11 April and was completed on 16 April 2007. During the hearing the Association called two witnesses and the Employer called one witness to give evidence. At the conclusion of the evidence the parties were granted leave to file written final submissions.

The Association filed its final submissions on 25 May 2007. The Employer filed answering submissions on 3 July and the Association filed a reply submission on 11 July 2007.

The Association’s Log of Claims for 2003 was contained in a letter dated 1 August 2003 addressed to the Director of the Employer and consisted of:

"1. That all salary scales and salary grades in all occupational classes are grades represented by the Association be increased by 5% with effect from 1 January 2003.

2. That all employees be paid salary increments/salary scale progressive payment in accordance with provisions of the Collective Agreement.

Although claim 1 did not expressly refer to it as being a claim for Cost of Living Adjustments (COLA) the hearing proceeded on the basis that it was a claim for COLA. The proceedings before the Tribunal did not deal with the second claim.

The Association’s Log of Claims for 2004 was set out in a letter dated 2 June 2004 again addressed to the Director. There were two claims :

"(a) 5% Cost of Living Adjustment (COLA) of all grades represented by the Association with effect from 1 January 2004.

(b) 15% all work related allowance to be increased with effect from 1 January 2004."

Claim (b) was not dealt with in the proceedings before the Tribunal.

The Association’s Log of Claims for 2005 was contained in a letter dated 24 June 2005 addressed to the Employer’s Director. The claim was for

"- - - 5% Cost of Living Adjustment (COLA) of all grades represented by the Association with effect from 1 January 2005."

The Tribunal accepts the evidence given on behalf of the Association and confirmed in the Gazette and the Consumer Price Index increased by 0.8% in 2002, by 4.2% in 2003 and by 2.8% in 2004.

In keeping with the practice adopted by the Tribunal those figures represented the appropriate claim for COLA in 2003, 2004 and 2005 respectively.

The Tribunal also accepts the evidence from the Employer that the Museum’s employees except for the Director are not civil servants but are in fact employed by the Board of Trustees under the Fiji Museum Act Cap 263. Section 5 (f) provides :

"The Board shall have the general management and control of the Museum and for that purpose may:

(f) subject to the consent of the Minister appoint officers on such terms and subject to such conditions as the Board thinks fit;"

It is clear from the legislation that the Board of Trustees is a body corporate and hence a statutory authority. As a result the functions of the Public Service Commission under section 147 of the Constitution do not apply to employees of the Museum pursuant to the Public Service Commission (Prescribed Offices) Regulations 1998.

Furthermore, the definition of "public service" in section 3 of the Public Service Act 1999 expressly excludes service in a statutory authority.

It follows from this that the Agreement made on 25 April 2006 between the Public Service Commission and the Association did not cover or extend to employees of the Museum, other than the Director who was at all material times a civil servant although accountable to the Board. Any term implied by practice or custom into the contract of service of public servants did not extend to the Museum’s employees.

The parties signed a Memorandum of Agreement on 19 July 2002 which set out the terms and conditions of employment applicable to all employees of the Board. The same agreement recognized the Association as the representative of and the agent for the purposes of collective bargaining of all the employees of the Board.

Chapter III of the Agreement deals with salaries, allowances and other payments. There is no express provision in Chapter III or, for that matter, in any other part of the Agreement which provides for wage increases by way of COLA.

In general, an employee’s claim for a monetary benefit must be founded on the contract of service. As the Collective Agreement is an implied condition of each employee’s contract of service, there is no express provision in the contract which would give rise to a claim for COLA.

The Association submitted that the entitlement to COLA was an implied term of the contract of service as a result of established practice. The Tribunal accepts that prior to the year 2000 COLA had not been paid to employees. However in 2000 the former Director began the payment of COLA.

In 2001 the present Director was appointed and she continued the payment of COLA in 2001. The Tribunal also accepts that for the years 2000 and 2001 COLA increases had been built in to the wage scales of employees and were not paid as one-off payments.

The evidence established that in the year 2003 a COLA increase of 2% was paid to all employees in the middle of the year. It would appear that it was the COLA payment for 2002. Employees were paid a lump sum and their salary scales increased by 2% from 19 June 2003.

As a result the Tribunal is prepared to conclude that an entitlement to COLA by way of increases to salary scales had become an implied term of the contract of service of the Museum’s employees by 2003.

However the Tribunal is also prepared to conclude that due to the Employer’s limited and fluctuating income sources and its limited Government funding, this implied term is subject to the Employer being in a financial position to pay COLA as an inbuilt salary scale increase.

The evidence established that in the year 2004 the Employer paid to all employees COLA for 2003 on 26 February 2004 as a 1% lump sum payment without any increase n the wages scales.

The evidence also established that in the year 2005 the Employer paid to all employees COLA for 2004 on 24 March 2005 as a 2% lump sum payment again without any increase in the wages scales.

It would appear that there has been no payment made in respect of COLA for the year 2005.

The Association also relied upon two letters dated 6 January 2005 and 30 June 2005 addressed to the General Secretary from the Employer’s Director in support of its claim for COLA in 2004 and 2005.

Having considered the evidence and the submissions the Tribunal is satisfied that the Employer has agreed that it will pay COLA in the form of built in salary scale increases when its financial position permits it to do so. The Tribunal is also satisfied that the Employer was in a position to pay COLA in that manner for the years 2000 – 2002.

However the Tribunal is not satisfied on the evidence that the Employer could afford to pay COLA by way of built in increases in salary scales for the years 2003 and 2004. The Tribunal accepts the evidence of the Employer on that point.

The Tribunal is satisfied that the Employer could afford to pay COLA for the year 2005 based on the financial material provided by the Employer, the relevant portions of which were highlighted by the Association during the hearing.

As a result the Tribunal has concluded that in respect of 2005 the Employer should pay COLA at the rate of 2% from 1 January 2005. The 2% is to be by way of a built-in salary scale increase from 1 January 2005.

The Employer’s sources of income, apart from Government funding, are seasonal and unpredictable. The sources of income fluctuate and are to some extent dependent on factors which are beyond the Employer’s control. The Tribunal accepts that the level of Government funding has remained constant for some time. The Tribunal also acknowledges the worthwhile objective of the Employer’s Director to provide additional employment opportunities from the available limited funds rather than increase the wage scales of the existing employees.

AWARD

The Employer is to pay COLA at the rate of 2% for the year 2005 with effect from 1 January 2005 by way of built in salary scale increases.

Due to its financial position the Employer is not required to make any further payments in respect of COLA for the years 2003 and 2004.

DATED at Suva this 27 day of July 2007

Mr. W. D. Calanchini
ARBITRATION TRIBUNAL