Fiji Public Service Association v Land Transport Authority [2007] FJAT 62; Award 64 of 2007 (19 September 2007)

THE REPUBLIC OF THE FIJI ISLANDS

NO 64 OF 2007

AWARD OF
THE ARBITRATION TRIBUNAL

IN THE DISPUTE BETWEEN

FIJI PUBLIC SERVICE ASSOCIATION

AND

LAND TRANSPORT AUTHORITY

FPSA: Mr N Tofinga
LTA: Mr J Savou with Mr S Waqainabete

DECISION

This is a dispute between Fiji Public Service Association (the Association) and Land Transport Authority (the Authority) concerning an alleged breach of clause 3.9.1 of the Collective Agreement.

A trade dispute was reported by the Union on 27 June 2006. The report was accepted on 17 August 2006 by the Chief Executive Officer who referred the Dispute to a Disputes Committee.

As the Employer failed to comply within the prescribed time 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 17 October 2006 with the following terms of reference:

"- - - for settlement over the refusal of the Authority to assimilate the payment of the performance appraisal increments under annual performance assessment, base on Annual Confidential Report (ACR) to the base salaries of members in compliance with clause 3.9.1 of the Collective Agreement. The Association contends that the Authority’s actions are in breach of clause 3.9.1 of the collective agreement between FPSA and LTA and that;

The Authority undermined the Associations collective bargaining representational rights in that it adversely impinged on the provisions of Article A, B, C, & D and that;

The Authority acted in bad faith, contrary to all the relevant provisions of the Industrial Relations Code of Practice of June 1973, as encapsulated in Article H of the same agreement; and that,

The Authority did not implement the Performance Appraisal tool in equity when assessing some members on ACR.

The Association maintains that all outstanding arrears in lieu of the Authority’s failure and/or refusal to assimilate accordingly, be loaded onto the member’s base salaries retrospectively, and, whereas applicable, in accordance with clause 3.9.1 of the Collective Agreement."

The Dispute was listed for a preliminary hearing on 27 October 2006. On that day the parties were directed to file preliminary submissions within 28 days and the Dispute was listed for mention on 24 November 2006.

The Employer filed its preliminary submissions on 23 November 2006. The Union was granted an extension and eventually filed its submissions on 18 December 2006.

The Dispute was listed for hearing on 1 March 2007. On that day the parties indicated to the Tribunal that they did not wish to call evidence and that a hearing would not be required. As a result the Tribunal gave directions for the filing of a signed statement of agreed facts and written final submissions.

A signed Statement of Agreed Facts was filed on 17 May 2007. The Union filed its written final submissions on 12 June 2007. The Employer filed answering submissions on 27 July and the Union filed a reply submission on 13 August 2007.

The Union claimed that the Employer has not paid appraisal increments to the Union’s members for the year 2004. The Employer maintained that it had paid the appraisal increment for 2004 as a one off payment.

It was accepted that the Employer had paid increments that were built into the salaries of the Union’s members since 10 July 2000.

It would appear that with effect from about January 2004 the Employer has paid the increments as a one off annual payment.

The Union submitted that the Employer was obliged under clause 3.9.1 of the Collective Agreement to pay increments which were required to be built into the base salaries of all employees whose annual performance had been fairly appraised under the Annual Confidential Report. The salary scale set out in the Collective Agreement was the starting point. Incremental increases were then determined by the number of steps awarded in the appraisal. A new salary would be arrived at. The Union submitted that clause 3.9.1 did not contemplate a one-off payment.

The Employer submitted that the union‘s members were satisfied with the one off annual payments. The Employer also submitted that at meetings held with the Union there was agreement that the Employer would pay performance payment appraisal increments as a one off annual bonus payment.

The resolution of this Dispute depends to a large extent on the meaning of clause 3.9.1 of the Collective Agreement which states:

"3.9.1. Increment

Increment under this paragraph shall be granted after annual performance assessment based on Annual Confidential Report. The first review will be indicated every six months. Parties agreed to work together to develop a new Performance Management System."

The principles to be applied by the Tribunal in interpreting a clause in a Collective Agreement were discussed by the Fiji Court of Appeal in Hassan Din and Another –v- Westpac Banking Corporation (Unreported Civil Appeal No 66 of 2003 delivered 26 November 2004).

The following observations of the Court of Appeal are particularly useful. First, in paragraph 25 on page 7, the Court stated:

"- - - 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 guiding principle to be applied is then stated in paragraph 26 on page 8:

"- - - 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".

What then is the meaning that would be conveyed by clause 3.9.1 to a reasonable person with the relevant background knowledge. Such a person would be aware that the clause was intended to provide for a monetary reward following an annual performance assessment based on the Annual Confidential Report.

That person would also be aware that the Agreement in which clause 3.9.1 appeared was made and entered into on 17 December 2001. Pursuant to the clause and in compliance with the Agreement the Employer had granted increments annually by way of built-in salary adjustments up till the end of 2003. There had been no variation to the agreement and the parties had not agreed to any change in the way in which entitled employees were to receive increment payments based on performance assessments.

An increment is generally regarded as an increase in a number or amount. A payment which has the effect of increasing the amount of a salary sits more readily with the accepted meaning of increment than does a one off bonus payment.

The Tribunal is satisfied that the Authority has unilaterally changed the method by which increments were paid to employee members of the Association in respect of performance appraisals based on the Annual Confidential Report. In doing so it was in breach of clause 3.9.1 of the Agreement. The relevant background knowledge in the form of the date of the agreement and the way in which increments had been awarded to eligible employees together with the ordinary meaning of the word increment would indicate to any reasonable person that clause 3.9.1 means that increments are to be paid by way of built-in salary adjustments.

AWARD

Pursuant to clause 3.9.1 of the Agreement dated 17 December 2001, the Authority is required to assimilate the payment of performance appraisal increments to the base salaries of employee members of the Association.

DATED at Suva this 19 day of September 2007.

Mr. W. D. Calanchini
ARBITRATION TRIBUNAL