Fiji Public Service Association v Fiji Institute of Technology [2007] FJAT 85; Award 03 of 2007 (29 January 2007)

THE REPUBLIC OF THE FIJI ISLANDS

NO 3 OF 2007

AWARD OF
THE ARBITRATION TRIBUNAL

IN THE DISPUTE BETWEEN

FIJI PUBLIC SERVICE ASSOCIATION

AND

FIJI INSTITUTE OF TECHNOLOGY

FPSA: Mr N Tofinga with Mr T Autar
FIT: Mr A Malani

DECISION

This is a dispute between the Fiji Public Service Association (the Association) and the Fiji Institute of Technology (FIT) concerning salaries, MQR, allowances and fringe benefits.

A trade dispute was reported on 14 March 2005 by the Association. After referring the Dispute back to the parties for further negotiations, the Report was eventually accepted on 6 December 2005 by the Chief Executive Officer. The Dispute was referred to a Disputes Committee. As FIT failed to nominate its representative to the Committee, 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 1 March 2006 with the following terms of reference :

".......................... for settlement over the refusal by the FIT to raise all substantive salaries to the newly recommended salaries in accordance with the JEE assimilation process prescribed by Price Waterhouse Coopers and the refusal and/or undue delay of the finalization of MQR and provisions of allowances and fringe benefits as recommended by Price Waterhouse Coopers as provided for in clause 1 and 3 of the MOA of 03/12/04 pursuant to the agreed Terms of Reference that was made to oversee the Job Evaluation Exercise."

The Dispute was listed for a preliminary hearing on 24 March 2006. On that day the parties were directed to file their preliminary submissions within 28 days and the Dispute was listed for mention on 26 May 2006.

FIT filed its preliminary submissions on 24 April and the Association did likewise on 26 May 2006. On that day the Dispute was fixed for hearing on 4 October 2006 at the request of the parties.

The hearing of the Dispute commenced on 4 October 2006 in Suva. It was adjourned part heard and was completed on 20 October 2006. During the course of the hearing the parties each called four witnesses.

At the conclusion of the evidence the parties sought and were granted leave to file written final submissions. The Association filed its final submissions on 6 December 2006. FIT filed its answering submissions on 20 December 2006 and the Association filed a reply submission on 16 January 2007.

At the commencement of the hearing on 4 October 2006 the parties informed the Tribunal that only part of the Reference was required to be dealt with by the Tribunal. The parties indicated that issues concerning MQR had been resolved. The parties also indicated that they intended to negotiate the issues of allowances and fringe benefits based on market forces recommended by Price Waterhouse & Coopers.

As a result the only issue which required adjudication was the question posed by the first part of the terms of reference, namely the increase in substantive salaries. The Tribunal indicated that the Award would cover the narrowed term of reference and the other issues would be treated as having been withdrawn.

Pursuant to the signed Memorandum of Agreement dated 3 December 2004 the parties, so far as is relevant to this Dispute, agreed:

"1. That the Council will raise all substantive salaries to the newly recommended salaries in accordance with the JEE assimilation process prescribed by Price Waterhouse Coopers.

2. That the Council will effect payment of arrears in salaries with retrospective effect from 1 January 2004 as agreed in the Terms of Reference and is to be paid out to all entitled employees on Pay 25 on 9/12/04 or where appropriate in the case of newly recruited employees pro-rated salaries will be paid."

The first pre-amble to the Agreement set out more fully what exactly was meant by the reference to "JEE assimilation process prescribed by Price Waterhouse Coopers".

"Pursuant to the Recommendation (s) of the Job Evaluation Exercise (JEE) undertaken by Price Waterhouse Coopers completed in August 2004 which regularized the inherent anomalies in classifications, salary levels, allowances and benefits for all FIT employees inclusive of all employees represented by the Fiji Public Service Association (FPSA) who are the worker’s representatives of all non-academic staff of the Fiji Institute of Technology and hereinafter referred to as the Association".

The Job Evaluation Exercise Recommendations were set out in the "Remuneration, Benefits, Allowances and Entitlements Report" prepared by Price Waterhouse Coopers in August 2004. The Report included a section on recommended salary levels for each evaluated position. Section 5 of the Report dealt with the salary structures for academic positions, section 6 for non-academic positions and section 7 for unestablished positions.

More importantly, section 8 of the Report dealt with implementation of the proposed salary structures. In particular section 8 dealt with the issue of moving from FIT"s current structure to the proposed structure. The section also dealt with movement up the salary range and the criteria for future merit increases.

Paragraph 8.1 dealt specifically with the issue of determining the new salary within the proposed salary range for existing staff. The methodology set out in paragraph 8.1 applied to non-academic salaries positions, academic positions and even waged positions if FIT decided to adopt a wage range for waged positions.

It is convenient to set out paragraph 8.1 in full as it is at the centre of the Dispute before the Tribunal.

"The slotting of incumbents in the appropriate salary level in the respective grades is a matter to be resolved by management.

The new salary is to be determined through management’s review of the staff members past performance, qualifications, experience and competencies based on the following guide:

- The 100% level (i.e. mid point) is for staff who meet the minimum qualifications, experience and competencies required for competent performance and who have been performing well in their positions consistently in the last 3-4 years.

- Staff who do not meet the minimum qualifications, experience and competencies required for competent performance and/or have not been performing as expected in the last 3-4 years will be placed at a salary level less than the 100% level (i.e. mid point).

- Staff who exceed the minimum qualifications, experience and competencies required for competent performance and who have been performing outstandingly in their position consistently in the last 3-4 years will be placed at a salary level more than the 100% level (i.e. mid point)."

In section 8.2 the Report dealt with the movement of salaried staff within their salary range. The Report stated that movements within a salary range should be determined by the incumbent’s performance in accordance to FIT’s annual performance review. The Report then set out proposed base salary increases.

The Association submitted that FIT devised an assimilation plan which was inconsistent with paragraph 8.1 of the Report. In particular the Association claimed that FIT failed to raise all substantive salaries to the newly recommended salaries. The Association claimed that this amounted to a breach of clause 1 of the Agreement.

The Association also submitted that FIT did not pay retrospectively from 1 January 2004 any increases in salary awarded to salaried staff pursuant to paragraph 8.2.1 of the Report. The Association claimed that this failure breached clause 2 of the Agreement.

The submissions from FIT did not really address the issue of compliance with the Report or breaches of the Agreement. FIT maintained that the JEE process had been implemented in a fair, transparent and non-arbitrary manner. FIT claimed that the Association was attempting to distort the salary relativity which had been regularized by the 2004 JEE. FIT submitted that the Dispute had been resolved.

The Tribunal proposes first of all to make some comments on the operation of section 8 of the Report as it applied to non-academic salaried staff positions dealt with in section 6 of the Report. The Tribunal then proposes to determine the meaning and effect of clauses 1 and 2 of the Agreement.

First, the operation of section 8 of the Report as it applied to staff dealt with in Section 6. The Report recommended that all non-academic salaried staff be slotted into one of the five new proposed salary categories, i.e. S3, S4, S5, S6, and S7. S3 was the lowest and S7 was the highest. The Report stated that this was a matter to be resolved by management. In determining the actual salary of any particular non academic salaried staff member, management was to apply the three dot points listed in paragraph 8.1

The Tribunal notes that prior to implementation of the Report the salary range for staff in Grade 3 (Administration and Accounts Assistants and Technicians) was $9046 - $12,663. The salary range for the S3 category proposed in the Report was $9885 - $14225. These were the minimum and maximum figures for the S3 category whilst $12,055 represented the 100% mid point.

Clause 4 of the Agreement provided that if there was a grievance in relation to the implementation of the Report, then an Appeals procedure was proposed to deal with such grievances. Therefore if a non-academic staff member was not happy with either the category in which he or she had been placed or with the new salary level for which he or she had been assessed as appropriate, then there was an appeal procedure available to seek redress.

The effect of clause 1 of the Agreement is that FIT agreed to raise all substantive salaries to the recommended levels. In determining at what salary level a particular non-academic salaried staff member was placed within the designated category, FIT was obliged to apply the dot points in paragraph 8.1 To the extent that FIT has failed to do so in respect of any particular non-academic staff member, FIT was in breach of clause 1 of the Agreement. Clause 1 of the Agreement represented an undertaking by FIT to implement 8.1 of the Report.

In the opinion of the Tribunal the obligation to pay arrears in salaries with retrospective effect from 1 January 2004 which is set out in clause 2 of the Agreement refers to those arrears which arose as a result of the obligation referred to in clause 1. In other words the arrears to be paid are the arrears which arose as a result of the placement at the new salary level within the designated category pursuant to paragraph 8.1 of the Report.

The Agreement was signed on 3 December 2004 and arrears were to be paid in pay 25 on 9 December 2004. The arrears clearly meant the difference between the old salary level and new salary level on which a staff member was placed as a result of the application of paragraph 8.1 of the Report.

For example a non academic salaried staff member earning a salary of $9046 (C7) who was placed on the minimum S3 level of $9885 (without protest) would be paid the arrears owing as if he/she had been on the new salary from 1 January 2004.

However the Tribunal is not satisfied that the obligation to pay arrears under clause 2 of the Agreement applied to salary increases payable under paragraph 8.2.1 by way of movements through the new salary scale. The Tribunal is satisfied that any 2004 performance based increase in salary by way of movement up the salary scale for 2004 was not to be backdated to 1 January 2004 but became payable on and from 1 January 2005.

Where FIT has made one or more adjustments since 3 December 2004 to the salary of a non-academic staff member in order to more fairly place that staff member at the correct starting salary level under paragraph 8.1 and pursuant to its obligation under clause 1 of the agreement, then any such adjustment should be backdated to 1 January 2004.

The Tribunal considers that the parties should resolve the grievances of individual members of the Association in accordance with the guidelines contained in this Award.

AWARD

The obligation on FIT under clause 1 of the agreement is to implement the recommendations in accordance with paragraph 8.1 of that Report.

The obligation on FIT under clause 2 of the agreement is to backdate those salary increases to 1 January 2004.

The obligation to backdate salary increases does not apply to movements through the new salary scales as a result of performance assessments for 2004 under paragraph 8.2.1 of the Report.

The issues concerning MQR, allowances and fringe benefits are withdrawn by consent.

DATED at Suva this 29 day of January 2007.

Mr. W. D. Calanchini
PERMANENT ARBITRATOR