Fiji Local Government Officers Association v Lautoka City Council [2007] FJAT 59; Award 61 of 2007 (21 August 2007)

THE REPUBLIC OF THE FIJI ISLANDS

NO 61 OF 2007

AWARD OF
THE ARBITRATION TRIBUNAL

IN THE DISPUTE BETWEEN

FIJI LOCAL GOVERNMENT OFFICERS ASSOCIATION

AND

LAUTOKA CITY COUNCIL

FLGOA: Mr P Rae with Mr R Singh
L C C: Mr Iqbal Khan

DECISION

This is a dispute between the Fiji Local Government Officers Association (the Union) and Lautoka City Council (the Employer) concerning the suspension, demotion and subsequent termination of employment of Mr Appal Naidu (the Grievor).

A trade dispute was reported by the Union on 1 September 2005. The report was accepted on 29 September 2005 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 16 December 2005 with the following terms of reference:

"- - - for settlement over the suspension, demotion and subsequent termination of employment of Mr Appal Naidu effective from 11 July 2005 by the Council, which the union submitted that the Council’s decision was unjust, unfair, wrong, unwarranted and that the norms of fair investigation, natural justice and procedural fairness were not followed. The Association therefore seeks that the Grievor’s termination be revoked immediately and seeks re-instatement to the position of Parking Meter Attendant/Technician without loss of pay and benefits".

The Dispute was listed for a preliminary hearing on 27 January 2006. On that day the parties were directed to file preliminary submissions within 21 days and the Dispute was listed for mention on 24 February 2006.

The Union filed its preliminary submissions on 17 February and the Employer did so on 24 February 2006.

The Dispute was subsequently listed for mention on 24 March and 28 April 2006. The Dispute was fixed for hearing on 24 July 2006.

By letter dated 6 July 2006 the Employer applied for the hearing date to be vacated due to a court commitment as a witness of its legal representative. When the Dispute was called for hearing on 24 July 2006 the Union did not oppose the application. The Tribunal directed that the hearing date be vacated and the Dispute was listed for mention on 28 July 2006. As there was no appearance by or on behalf of the Employer, the Dispute was relisted for mention on 1 September 2006 and the Tribunal directed that a summons to witness be issued and served on the Employer.

The Dispute was listed for hearing on 16 November 2006. Due to unforeseen circumstances it was necessary for the Tribunal to vacate that hearing date and the Dispute was then listed for mention on 24 November 2006. On that date the Dispute was fixed for hearing on 7 March 2007 in Lautoka.

Unfortunately it was not possible for the Tribunal to sit in the Western Division and as a result it was again necessary to vacate the hearing date. The Dispute was refixed for hearing on 10 May 2007 in Suva.

The hearing of the Dispute commenced on 11 May 2007 in Suva. The Dispute was adjourned part heard to 16 May and then again to 17 May 2007 on which day the hearing was completed. During the course of the hearing, the Employer called one witness and the Union called two witnesses to give evidence.

At the conclusion of the evidence the parties were granted leave to file written final submissions. The Employer filed its final submissions on 14 June 2007. The Union filed answering submissions on 23 July and the Employer filed a reply submission on 1 August 2007.

The Grievor had been employed by the Employer as a parking attendant since 1996. This was an unestablished position. On 1 October 2004 he was formally appointed to the salaried grade position of parking meter technician. He joined the Union shortly after taking up this position.

As a member of the Union, the Grievor’s contract of service included, as an implied condition, the relevant provisions of the Collective Agreement between the parties pursuant to section 34 (7) of the Trade Disputes Act. The provisions in the Collective Agreement which dealt with disciplinary procedures and dismissal were relevant to the Grievor and hence were incorporated into his contract of service.

On Saturday 11 June 2005 at about 9.30am the Grievor was observed by the Employer’s Town Clerk/Chief Executive Officer (CEO) (Mr P Raj) putting coins into his tool kit which had been supplied by the Employer. At the time the CEO was travelling along Naviti Street in a vehicle driven by another Council employee, Mr K Begg (Begg). The CEO directed Begg to stop the vehicle. The CEO then approached the Grievor and a conversation took place between the two of them. Although there was some conflict in the evidence as to what was said during the conversation, the CEO accused the Grievor of stealing coins by removing them from the meter and placing them in his tool kit. The Tribunal accepts that the Grievor’s responses amounted to a denial of the accusation and an attempt to explain the procedure he was following as directed by his Supervisor. The Tribunal does not accept the evidence given by the CEO that the Grievor said that he used the money to buy grog and cigarettes.

When the CEO and shortly afterwards, Begg, inspected the Grievor’s tool kit there were a number of coins which when subsequently counted at the

Employer’s Office amounted to $9.60. The CEO had removed 80c and placed the coins in the meter to show the Grievor how he should have been performing his task. The total amount of coins initially in the tool kit when the CEO spoke to the Grievor was therefore $10.40.

The CEO, Begg, the Grievor and the tool kit with the money in it (minus 80c) all returned to the Employer’s Office.

Although there was much evidence, mostly conflicting, as to what transpired at the Employer’s Office, it was common ground that the Grievor made a signed written statement at the request of the CEO, The statement was as follows:-

"I admit that I have taken out about $10.00 from the parking meter.

Sir, please give me one chance and I will improve myself and be a good worker.

Please Sir, forgive me for what I have done.

Thank you".

The Tribunal notes that at no time did the Grievor admitt to stealing the coins. The admission to taking the coins from the parking meter was explained by the Grievor as an admission to not following the procedure which the CEO had demonstrated to him at the parking meter.

The CEO stated in his evidence that the actions of the Grievor together with his written statement had led him to the conclusion that the Grievor was stealing the coins and that the statement was an admission to that effect. However the Tribunal has concluded that there was a reasonable explanation given by the Grievor for what he was doing at the meter. In the absence of an express admission to stealing, the Tribunal does not consider that the Grievor’s statement should be regarded as an admission to stealing the coins.

In reaching this conclusion the Tribunal accepts the evidence of Mr F V Ram, the Employer’s Parking Meter Supervisor. His evidence was consistent with the evidence given by the Grievor. The Tribunal does not consider that the contents of the written statement made by a Mr Abdul Khan lead to an inference that the Grievor was stealing coins on Saturday 11 June 2005. The statement purported to establish that because the Grievor on past occasions sought to change small amount of coins into notes, he must have been stealing the coins on Saturday 11 June 2005. At the very most the evidence was circumstantial and the maker of the statement, for whatever reason, was not present to be cross-examined. Furthermore, the Tribunal notes the Grievor’s explanation as to the origin of the coins which he admitted he did change for notes. Although a search of the Grievor’s vehicle was made on the same day, no coins were found.

On Tuesday 14 June 2005 a memorandum signed by the CEO was handed to the Grievor. Omitting formal parts, it stated :

"Re: Suspension

You were caught on the spot where you were found stealing the coins from the parking meters in Naviti Street on Saturday, June 11, 2005 at 9.30am.

You are therefore suspended from the council’s services forthwith without pay.

The matter will be reported to council and its outcome will be relayed to you accordingly."

It is clear that the CEO purported to suspend the Grievor without pay pending an investigation and consideration by the Council. As such it was what is sometimes referred to as non-disciplinary or administrative suspension.

Article 16A of the Collective Agreement deals with Disciplinary Procedure. The wording of the Article which was applicable in June 2005 was the document put into evidence as exhibit 4. So far as suspension pending investigation/inquiry is concerned, the Article stated:

"Nothing in this Article shall prevent the Council from standing down an employee with pay pending the outcome of an inquiry into an alleged irregularity."

The suspension of the Grievor by the Employer’s CEO was not in accordance with Article 16A. The article clearly stipulated that an employee might be stood down on full pay whilst the alleged irregularity was being investigated.

In a report dated 16 June 2005 prepared by the Employer’s CEO there was a recommendation that the Grievor’s employment be terminated forthwith. The report contained at least one unsubstantiated allegation concerning coins in the Grievor’s pocket. There were other allegations in the Report which were not directly related to the incident on 11 June 2005.

The Council met on about 21 June 2005 to consider the Report and to determine the issue. As a result the Grievor was then forwarded a letter dated 22 June 2005 and signed by the CEO which stated :

"This refers to my earlier memo dated 14 June 2005 in the above matter.

Your case was reported to the Council and it was disturbed to note - - -

This is a very serious matter, but the council on humanitarian grounds has placed you on final warning and also demoted you to unestablished employee.

You are to resume work at the Council depot from Tuesday, June 28, 2005 at 7.00am and your wages would be t the rate of $3.45 per hour.

You will be paid half salary during your period of suspension.

You are hereby cautioned to improve your performance with the council and prove yourself to be a good worker of the council."

The letter indicated that the Employer purported to do two things. First, it decided that the Grievor was to receive half his pay whilst he was suspended. Secondly, it imposed two penalties in respect of the incident on 11 June 2005. He was given a final warning and he was demoted which had the effect of placing the Griervor in an unestablished position.

Once again the decision concerning half pay during the period of suspension was not in accordance with the relevant provision of the Collective Agreement. The Grievor was entitled to full pay during the period he was suspended (stood down) pending the investigation.

In relation to the question of penalty, the relevant part of Article 16A states:

"d) Disciplinary action taken shall be limited to warning and suspension without pay not exceeding 30 working days. Termination of employment may be considered for cases of serious misconduct or after three written warnings within any 12 months period."

The Tribunal is not certain as to the propriety of the expression "final warning" as a penalty imposed by the Employer. However that issue is not the crux of the Dispute. The provision does not make any reference to the penalty of demotion. Under the Collective Agreement it was not an option available to the Employer which had no authority to impose that penalty. Although demotion may generally be regarded as a legitimate form of discipline, clause 16 A (d) expressly mandated the disciplinary penalties which were available to the Employer to the exclusion of all other possible disciplinary penalties.

Although Article 16 clause (b) is ambiguous as to when the Employer should interview an employee, the Tribunal has concluded that this was a case where such an interview should have been conducted. The Tribunal is of the view that clause (b) could mean that if and when the Employer was contemplating whether disciplinary action should be taken following the investigation into an alleged irregularity, the Employer should interview the Grievor.

The Tribunal has concluded that the Grievor should have been paid his full salary from 14 June 2005. The Tribunal is also satisfied that the demotion was wrong as it was contrary to the Collective Agreement. The Grievor remained a member of the established staff and subject to the relevant provisions of the Collective Agreement made between the Employer and the Union.

Unfortunately, the matter did not end with the Employer’s decision.

By letter dated 23 June 2005 the Grievor applied for pro-rata annual leave effective from 28 June 2005.

By memorandum dated 24 June 2005 the Employer’s CEO informed the Grievor that :

"Please note that the council has resolved that you are to start work from Tuesday June 28, 2005 as per my memo of June 22, 2005.

The matter of annual leave can be considered later once you commence work."

Then the Grievor by letter dated 27 June 2005 stated :

"Reference is made to your letter dated 24 June 2005 whereby my leave on pro-rata basis has been rejected.

I therefore humbly request the Council to grant me leave without pay of thirty (30) working days due to my urgent family and personal commitments".

The Employer’s CEO replied by memorandum dated 30 June 2005 as follows:

"This refers to your letter of June 27, 2005 in the above matter and I wish to inform you that your application for leave without pay is refused.

You were to commence duties as from June 28, 2005, pkease adhere to it immediately."

It would appear that the Grievor did not report for work on 28 June 2005 as directed. As a result a termination letter dated 11 July 2005 was delivered to the Grievor. This letter stated.

"This is further to my memorandum dated June 30, 2005 in which you were instructed to commence duties from June 28, 2005.

It has been noted that you had since not returned to work and I have no option but to terminate your service with the council forthwith for wilful disobedience to lawful orders given by the Council and continual absence from work without the permission from the council.

You are to return council’s properties in your possession such as uniforms, boots and any tools."

It would appear that the Grievor’s employment was terminated by way of summary dismissal as there was no material before the Tribunal to suggest that the Grievor was given notice of termination or payment in lieu of notice in the manner prescribed by Article 2(b) of the Agreement.

The termination letter indicated to the Grievor that his employment was terminated for wilful disobedience to lawful orders and for continued absence from work without the Employer’s permission. The provisions in Article 2(c) of the Agreement dealing with summary dismissal are consistent with section 28 of the Employment Act Cap 92. So far as is relevant to this Dispute, Article 2 (c) states "

"(c) Nothing contained above shall be construed in any way as detracting from the Council the right to dismiss summarily any employee in the following circumstances:-

(i) - - -

(ii) for willful disobedience to lawful orders given by the council;

(iii) - - -

(iv) for continued absence from work without the permission or without reasonable excuse provided such dismissal is consistent with the rules of natural justice and has the approval of the head of department."

In his evidence the Grievor stated that he was upset at having been demoted for something which he didn’t do. He said that with the help of his Union he had applied for some annual leave and then leave without pay. The first application was not granted and the second was rejected. He said that he felt he was not in the correct state of mind to return to work and needed time to consider his position. He said that following his demotion he was too upset and distressed to return to work.

At the outset the Tribunal should indicate that there was nothing in the evidence to suggest that the Grievor had quit his job. It is generally accepted that in order to find a voluntary termination of employment there must be an intention to resign and an objective manifestation of that intention. The Tribunal has concluded on balance that the Grievor’s absence did not manifest an intention to quit.

However, the Tribunal considers that, subject to any provision to the contrary in the Collective Agreement, the Employer was entitled to expect the Grievor to report for work when scheduled, and to expect that when the Grievor was refused permission to be absent from work, he would obey those instructions.

There is no provision in the Collective Agreement which gave the Grievor an entitlement to leave without pay. There was no reasonable grounds for the Grievor to believe that he had a contractual right to take leave without pay after 28 June 2005. The advice which the Grievor stated he had been given by the Union was not founded on any provision in the Collective Agreement, express or implied.

t is noted that the Grievor claimed that he did have a number of days out of his annual leave entitlement still owing to him. Although the application for annual leave was not rejected, nor was it granted. The Grievor was directed to return to work on 28 June 2005 and thereafter the question of leave was to be "considered".

The Tribunal has concluded that if there had not been any outstanding leave or an entitlement to apply for leave then the CEO’s letter dated 24 June 2005 should have said so. The manner in which that letter was worded indicated that his leave request was to be considered when the Grievor returned on 28 June 2005.

It should be noted that the Grievor did not give any reason in his letter dated 23 June 2005 for wanting to take pro-rata annual leave.

A decision as to whether an employee should be granted leave of absence is a discretionary matter for the Employer. Generally such a discretion should be exercised reasonably taking into account all the relevant considerations. The Employer should seek to balance its need to ensure that its business is conducted free from the disruptive effects of the Grievor’s absence against the interests of the Grievor who may feel it necessary to absent himself from the work place.

The Tribunal is first of all required to determine whether the Employer improperly denied the Grievor’s request for leave and then determine whether the Grievor had reasonable justification for his unauthorized absence.

The Tribunal accepts that on the evidence the Grievor’s application for pro rata leave was not rejected out of hand but consideration of it was to be deferred till the Grievor returned to work as directed on 28 June 2005. That response was not unreasonable in view of the fact that the Grievor had not provided any reason for his application. If the Grievor had stated that the leave was required for some bona fide reason then the Employer’s response may have been different and in any event would have been more strenuously examined to determine its reasonableness.

The Tribunal is satisfied that there was a clear instruction given to the Grievor which he understood. The instruction was from the Employer and was conveyed in writing to the Grievor by the Chief Executive Officer. The instruction was not followed at any time up to the date on which the Grievor’s employment was terminated.

The Tribunal has some sympathy for the Grievor in the sense that his suspension and demotion were probably not justified and certainly were measures which did not comply with the Collective Agreement. However, the appropriate course of action for the Grievor was to return to work and request the Union to commence proceedings by reporting a trade dispute to the Permanent Secretary for Labour. This would have triggered the dispute resolution machinery for which provision is made in the Trade Disputes Act. The Grievor should have been given this advice by the Union.

The question for the Tribunal is whether summary dismissal was justified on the facts of this case.

The Tribunal has concluded that the Grievor was absent from work between 28 June and 11 July 2005 despite the Employer’s directive that he return on 28 June. There was no reason for the leave provided in the application. The reasons stated by the Grievor in his evidence before the Tribunal did not amount to extenuating circumstances. The Grievor did not have reasonable justification for his unauthorized absence. As a result the Employer was entitled to discipline the Grievor. The penalty of summary dismissal was within the band of reasonable penalties open to the Employer. The Tribunal
is not satisfied that the application for pro-rata annual leave was rejected, let alone unreasonably rejected. The Tribunal does not consider that the application for leave without pay was unreasonably refused.

However the Tribunal has concluded that the attitude demonstrated by the Employer in summarily dismissing the Grievor was not fair. The Grievor should have been given an opportunity to explain to the Employer the reasons for his absence. The Tribunal has concluded that the Employer through its CEO has treated the Grievor with disdain and indifference. The attitude of the Employer through its CEO towards the Grievor demonstrated a lack of respect for the Grievor as an employee.

The Tribunal has concluded that the Employer’s attitude was sufficiently inappropriate that it amounted to a breach of the implied term of the Grievor’s contract of service which required the Employer to deal fairly with the Grievor even in the context of dismissal. The Employer was required to treat the Grievor with appropriate respect and dignity in carrying out the dismissal. The dismissal was in this case unnecessarily distressing to the Grievor. As a result the Tribunal is prepared to find that a breach of the implied term has occurred.

However the Tribunal does not consider that re-instatement is appropriate. The circumstances of the suspension and the warning given to the Grievor demonstrated a lack of trust in the Grievor. The Grievor’s unauthorized absence from work and the reasons given in his evidence indicated to the Tribunal that the relationship had broken down.

It is appropriate that the Grievor be paid three (3) months wages for the breach of the implied term of his contract of service. He is also to be paid his wages in full from the date of suspension up till 28 June 2005.

He is also to be paid any outstanding annual leave which was owing to him as at the date of his summary dismissal.

AWARD

The suspension of the Grievor on half pay between 14 June and 28 June 2005 was contrary to the Collective Agreement and wrong. He is to be paid his full wages for that period.

The demotion of the Grievor was contrary to the Collective Agreement and wrong. He remained at all times an established staff subject to the Collective Agreement between the Union and the Employer.

The decision to summarily dismiss the Grievor for insubordination was not unreasonable.

The Grievor was not treaed fairly and with appropriate respect and dignity in the context of his dismissal. The Employer breached the implied term of the Grievor’s contract of service.

Re-instatement is not appropriate. The Grievor is to be paid three (3) months wages.

DATED at Suva this 21 day of August 2007.

Mr. W. D. Calanchini
ARBITRATION TRIBUNAL