Tropik Wood Employees and Allied Workers Union v Tropik Wood Industries Ltd [2007] FJAT 87; Award 05 of 2007 (6 February 2007)

THE REPUBLIC OF THE FIJI ISLANDS

NO 5 OF 2007

AWARD OF
THE ARBITRATION TRIBUNAL

IN THE DISPUTE BETWEEN

TROPIK WOOD EMPLOYEES AND ALLIED WORKERS UNION

AND

TROPIK WOOD INDUSTRIES LIMITED

TWEAWU: Mr M Tofinga
Tropik Wood: Mr J Bale

DECISION

This is a dispute between Tropik Wood Employees and Allied Workers Union (the Union) and Tropik Wood Industries Limited (the Employer) concerning the forced retirement of three employees.

A trade dispute was reported by the Union on about 13 January 2006. The report was accepted on 14 February 2006 by the Chief Executive Officer who referred the Dispute to a Disputes Committee. As the Employer failed to nominate its representative to the Committee within the prescribed time, the Minister authorized the Chief Executive Officer to refer the Dispute to an Arbitration Tribunal for settlement pursuant to section 5 A (5) (a) of the Trade Disputes act Cap 97.

The Dispute was referred to the Permanent Arbitrator on 19 April 2006 with the following terms of reference :

"........................ for settlement over unilaterally retiring Mr Apenisa Balawakula, Mr Seru Rogo and Mr Metui Tuinaro by the Company, which is in breach of clause 9 of the Collective Agreement. Your union contends that the decision of the Company is unfair, unjust and wrong. Therefore the Union seeks that the company re-instate Mr Apenisa Balawakula (first Grievor), Mr Seru Rogo (second Grievor) and Mr Metui Tuinaro (third Grievor) from the date of their purported retirement without any loss in pay and benefits".

The Dispute was listed for a preliminary hearing on 28 April 2006. On that day the parties were directed to file preliminary submissions within 21 days and the Dispute was listed for mention on 26 May 2006. On that day both parties requested and were granted a further 21 days to file their submissions. The Dispute was relisted for mention on 23 June 2006. Again both parties requested and were granted a further 14 days to file their preliminary submissions and the Dispute was listed for mention on 28 July 2006.

On that day the Tribunal directed that the parties file and serve their preliminary submissions within 21 days and the Dispute was again listed for mention on 1 September 2006.

The Employer filed its preliminary submissions on 31 August 2006.

On 1 September 2006 the Union was granted a further 14 days to file its submissions and the Dispute was relisted for mention on 29 September 2006.

The Union filed its preliminary submissions on 13 September 2006.

On 29 September the parties were directed to file a signed statement of agreed facts within 21 days and the Dispute was listed for mention on 27 October 2006.

On 27 October 2006 the parties indicated that a hearing would be required. As a result the Dispute was fixed for hearing on 13 and 14 December 2006.

When the Dispute was called on for hearing the Union indicated that due to a breakdown in communication it was not in a position to commence the hearing.

Again the parties requested leave to file a signed statement of agreed facts instead of proceeding to a hearing. The Tribunal directed that the parties do so within 14 days and the Dispute was listed for further mention on 19 Januiary 2007.

A signed Statement of Agreed Facts dated 12 January 2007 was filed on 16 January 2007. On 19 January 2007 the parties confirmed that they were relying on the signed Statement and their preliminary submissions.

In paragraph 2.1 of the signed Statement of Agreed Facts (the Statement) the parties have agreed that the second Grievor (Rogo) was lawfully retired and as a result his claim was to be withdrawn by consent.

The first Grievor (Balawakula) was employed by the Employer as a Mill Hand on 18 February 1994. He turned 55 years old on 18 July 2001. On 5 August 2004 the Employer advised the first Grievor that it intended to retire him on 4 November 2004 which it did and paid him a retirement lump sum payment (the retirement package). Payment was made direct to the first Grievor’s bank account and the payment was acknowledged by the first Grievor. The payment has at all times been retained by the first Grievor. It was calculated using the formula of 30 days pay plus two days pay for every completed year of service. There was no suggestion that the first Grievor’s work performance was unsatisfactory or that he was suffering from ill-health.

The third Grievor (Tuinaro) was employed by the Employer as a Mill hand in May 1988. He turned 55 years old on 11 February 2001. On 5 August 2004 the Employer advised the third Grievor that it intended to retire him on 4 November 2004 which it did and also paid him a retirement lump sum payment (the retirement package). Payment was made direct to the third Grievor’s Bank account and the payment was acknowledged by the third Grievor. The third Grievor has retained the retirement package payment. It was calculated in the same manner as for the first Grievor. There was no suggestion that the third Grievor’s work performance was unsatisfactory or that he was suffering from ill-health.

Clause 9 of the Collective Agreement states :

"The normal age for retirement shall be 55 years. At the sole discretion of the Employer the Employee may be retained beyond 55 years of age and up to the compulsory retirement age of 60 years subject to continuing efficiency and good health."

In settling a dispute between the same Employer and another union involving a similarly but not identically worded clause in Award No 46 of 2005, the Tribunal concluded that if the Employer exercised its discretion to continue employing an employee after 55 years then it must continue to do so until that employee reached 60 years old unless inefficiency or ill-health justified an earlier retirement.

As a result it would appear that both the first and third Grievors should have continued to be employed until they turned 60 as there was no suggestion that either was inefficient or in ill-health to an extent that would warrant earlier retirement.

The only issue is whether acceptance and retention by the first and third Grievors of the retirement package meant that they waived their contractual right to remain in employment until they had turned 60 years old.

The Tribunal has no hesitation in concluding that the Employer had breached clause 9 of the Collective Agreement made between the parties. However it is now over two years since the retirement packages were paid and received by the two Grievors. They have had the use of that money and the Employer has been deprived of that money.

If the two Grievors had felt genuinely aggrieved by the early and wrongful retirement then they should have demonstrated their good faith by returning the money. By their actions they could reasonably be said to have accepted early retirement.

The Employer had in effect exercised its discretion to continue to employ the two Grievors beyond 55 years by not indicating on or prior to their turning 55 that they were to be retired. However the acceptance and retention of the retirement package by the two Grievors amounted to voluntary early retirement.

It should be noted that there was no indication in Award No 46 of 2005 that the Grievor in that Dispute had or had not been paid a retirement package.

AWARD

By continuing to employ the first and third Grievors after they turned 55 years old, the Employer had exercised its discretion to continue to employ them till they reached 60 years, in the absence of inefficiency or ill-health.

The indication to the two Grievors that it intended to retire them on 4 November 2004 was contrary to clause 9 of the Agreement.

The acceptance of the retirement package by the first and third Grievors and the retention of the same by them from 4 November 2004 to the present time altered the situation and amounted to acceptance of voluntary early retirement.

DATED at Suva this 2 day of February 2007.

Mr. W. D. Calanchini
ARBITRATION TRIBUNAL