Fiji Bank and Finance Sector Employees Union v Fiji Development Bank [2008] FJAT 1; Award 01 of 2008 (16 January 2008)

THE REPUBLIC OF THE FIJI ISLANDS

NO 1 OF 2008

AWARD OF
THE ARBITRATION TRIBUNAL

IN THE DISPUTE BETWEEN

FIJI BANK & FINANCE SECTOR EMPLOYEES UNION

AND

FIJI DEVELOPMENT BANK

FBFSEU: Mr P Rae with Mr D Singh
FDB: Mr D Sharma with Ms Y Fatiaki

DECISION

This is a dispute between Fiji Bank and Finance Sector Employees Union (the Union) and Fiji Development Bank (the Employer) concerning the termination of employment of Mr Alindra Singh (Grievor 1) and Ms Sunita Singh (Grievor 2) (the Grievors).

A trade dispute was reported by the Union. The report was accepted by the Chief Executive Officer who referred the Dispute to a Disputes Committee.

Subsequently 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 30 October 2006 with the following terms of reference:

"- - - for settlement over the termination of employments of Mr Alindra Singh and Ms Sunita Singh on 4 May 2006. The union views the bank’s actions as harsh, unjust, unreasonable and unfair and seeks both their re-instatement to their former positions without any loss of pay and benefits."

The Dispute was listed for a preliminary hearing on 24 November 2006. On that day the parties were directed to file preliminary submissions by 29 December 2006 and the Dispute was listed for mention on 19 January 2007.

The Employer filed its preliminary submissions on 29 December 2006 and the Union did so on 12 January 2007.

The hearing of the Dispute commenced on 1 May 2007 in Suva. At the commencement of the hearing a preliminary issue concerning the admissibility of evidence was raised by the Employer. The parties indicated to the Tribunal that following the filing of supplementary submissions on the question, a preliminary Ruling should be made by the Tribunal. An Interim Award (No 33 of 2007) was published on 20 June 2007.

The hearing of the Dispute resumed on 17 July 2007. The hearing continued on 18 July, 12-16 November and 19 November, 2007. During the course of the hearing the Employer called eight witnesses and the Union called the Grievors to give evidence. The parties presented oral closing submissions on 22 November 2007.

In accordance with the terms of reference, the Tribunal is required to determine whether the dismissal of each Grievor was harsh, unjust, unreasonable and unfair.

In doing so, the Tribunal must consider whether the Employer honestly and genuinely believed, and had reasonable grounds for that belief on the information available at that time, that each Grievor had committed the alleged acts of misconduct.

The Tribunal must then consider whether the misconduct justified the penalty of summary dismissal, ie, was it serious misconduct which came within the range of behaviour described in paragraph 4 (c) of the Collective Agreement.

The Tribunal is also required to determine whether the Grievors were afforded procedural fairness. This includes an examination of the process adopted by the Employer, including the fairness of the investigation and whether the Grievors were allowed opportunity and time to respond to the allegations. The question of union representation must also be considered.

In the event that the Tribunal finds against the Employer in respect of any of those issues, the Tribunal must then determine whether re-instatement is the appropriate remedy.

Each Grievor received a letter dated 4 May 2006 to the effect that their employment had been terminated with immediate effect, i.e. summary dismissal. Omitting formal parts, each letter stated :

"The Executive Committee at its meeting on 02/05/2006 has decided to terminate your employment with immediate effect.

The Bank does not condone dishonest activities and attempts by officers to mislead the Bank. Our investigation to which you were given the opportunity to respond revealed serious misconduct on your part. Therefore the Bank has no option but to terminate your employment forthwith.

You have the right to appeal the decision under the appeals provisions of the Master Agreement.

You are to return all bank properties in your possession."

It is apparent that the Employer had decided to summarily dismiss the Grievors for serious misconduct in the form of dishonest activities and attempts to mislead the Employer.

Neither letter contained any particulars in relation to the dishonest activities or the acts, facts or circumstances which constituted the attempts to mislead the Employer.

The particulars of the serious misconduct alleged by the Employer against each of the Grievors were provided in an attachment to suspension letters dated 24 March 2006 and addressed to each Grievor.

Each letter was in identical terms and, omitting formal parts, stated:

"The Bank recently received several complaints from sugar cane customers in Ba against you and another officer on issues concerning the manner in which their refund cheques were handled.

Based on our preliminary investigations of these allegations, the Bank has decided to temporarily suspend your appointment as (Business Manager/Administration Officer) at the Ba Branch with immediate effect. Your suspension will remain in force until a full investigation of the allegations is completed. This should not in any way affect your current remunerations.

The allegations, as summarized in the attached sheet, are quite serious as they point towards gross misconduct and substantial neglect on compliance to internal processes, upholding the trust conferred on us by the customers and protecting the Bank’s image.

The decision is deemed appropriate to allow the independence of the investigation be completed without your influence and presence in the office. This will also allow you time to respond to these allegations in writing to the CEO within 7 days from the date of this letter.

The outcome of the investigation shall determine the next course of action, which shall be decided by the Staff Board or its representatives.

I expect your full co-operation during the course of the investigation and hope that there will be a favourable outcome which will not impose further action against you."

Attached to each suspension letter was a document which set out the details of the allegations in respect of each Grievor. In general the allegations were made by sugar cane farmers. The evidence before the Tribunal established that the complainants had only a limited standard of education and were of limited financial means.

Grievor 1 (Alindra Singh) provided a detailed written response to the allegations in a letter dated 28 March 2006. Grievor 2 (Sunita Singh) also provided a detailed response to the allegations in a letter dated 26 March 2006.

After the suspension letters had been delivered to the Grievors, the Employer appointed Mr Kishor Kumar, an Audit Officer with some seven years experience, to investigate the allegations. Mr Kumar stated in his evidence that he considered the suspension letters and the Grievor’s written responses. He said that he interviewed eight complainants (customers) and made notes during the interviews. He did not interview the Grievors but relied on their responses when compiling the report.

A Report on the Special Audit of the Ba Branch dated 20 April 2006 which had been prepared by Mr Kishor Kumar as a result of his investigation into the allegations against the Grievors was passed to the Management. The Report was considered by the Employer’s Executive Committee. A decision was taken that the Grievors should be dismissed. The Committee considered the Special Audit Report, the Grievors’ written responses to the allegations and the allegations themselves.

The Employer’s General Manager for Divisional Support Services (Mr N Hazelman) stated that this was the only report prepared in relation to the allegations and was the report considered by the Executive Committee. He could not dispute the Grievor’s assertion that they were never given a copy of the report.

In May 2006 the Employer provided the Union with a copy of the Report less the recommendations which were set out in the final paragraph 8 of the original Report. There was also a difference in the text of the last paragraph preceding the recommendations.

In the original Report which was exhibit 1 that paragraph stated :

"There are sufficient evidence of procedural breaches by the two suspended staff for management to summarily dismissal them whilst Management continues its investigations on other reported cases."

In the version of the Report provided to the Union in May 2006, that paragraph had been slightly amended and stated:

"There are sufficient grounds at this point for Management to summarily dismiss both officers, Sunita and Alindra, while SBM and AMW continue their investigations on other reported cases."

The Tribunal has concluded that the version appearing in the original Report was the version which was considered by the Executive Committee when it decided to summarily dismiss the Grievors. The effect of this finding is that in accepting recommendation 1 "to terminate the two staff implicated in this report" the Staff Board did so on the basis that" there are sufficient evidence of procedural breaches by the two suspended staff."

Mr Hazelman conceded that the Grievors did not appear before the Committee nor had he spoken to them at any time prior to the Committee reaching its decision to summarily dismiss them.

Furthermore, having considered the evidence, the Tribunal has concluded that at no material time were the Grievors interviewed in relation to the allegations against them by either any member of the management or the investigator.

The Tribunal must determine whether the Employer had reasonable grounds on the information available at the time it decided to summarily dismiss the Grievors for honestly and genuinely believing that the Grievors had committed the alleged acts of misconduct.

So far as Grievor 1 was concerned there were acts of misconduct alleged in complaints by four customers.

First, Mrs Sarla Prasad, who was the administratrix of the Estate of Chumun Prasad (deceased), complained that she had not been given a receipt for $200 which she paid in respect of application and establishment fees in January 2005. She also complained that she had not been given a receipt for a payment of $200 made on the advice of Grievor 1 and paid to the cashier, Grievor 2. These were the allegations to which Grievor was required to respond.

It would appear that the allegations as stated above were based on a discussion which the investigator (Mr Kishor Kumar) had with the complainant in about March 2006.

However those allegations were not quite the same as the allegations which the complainant had initially made in a five page letter written some time on or before 31 May 2005.

The Tribunal is satisfied that the allegations relate to the same incidents. They concerned the payment of fees totaling $200 and another cash payment of $200. The investigator did not pursue the discrepancies with the complainant.

Grievor 1 did not respond to the allegations set out in the document attached to his suspension letter. Instead he chose to rely on his earlier response set out in a letter dated 3 June 2005. Unfortunately his response was as confusing and lengthy as the complainant’s letter of complaint.

As the letter of complaint was written by the complainant whilst the issues were still relatively fresh in her mind, it must be concluded that the letter of complaint more accurately stated the allegations. Therefore it is to be relied upon in preference to a much later conversation in March 2006 between the complainant and the investigator.

The Tribunal has concluded that the Employer had dealt with the allegations when Mr Pita Tamani informed all those involved in an email dated 21 June 2005 that:

"- - - we need evidence of the $50 application fees, $200 cash payment and also $150 Establishment fees. A total of $400 paid on 3 occasions with no receipts issued and she knows fully well (I understand she’s reached Form 5 level education) that if she makes any cash payment she should insist on receipts otherwise demand her money back.

Stated that as much as I wanted to take her case further for disciplinary action, I could not do so due to lack of evidence. She appears to appreciate where I am coming from. Added that since she’s also reported to the Ba Police Station, then we’ll have to wait for the Police investigation before reviewing our position.

It would appear that Grievor 1 was charged with a number of offences arising out of a number of allegations and was found not guilty by the Ba Magistrates Court.

The Tribunal has concluded that in relation to this complaint, the Employer could not have honestly and genuinely believed on reasonable grounds that Grievor 1 had committed the acts of misconduct which were alleged against him by the complainant during the course of her interview with the investigator.

The second complaint against Grievor 1 came from Mr Raj Ali Khan. The allegation that Grievor 1 was required to answer was set out in the following terms:

"Mr Khan came in to the Bank to collect his cane refund cheque ($250.00) sometimes in July 2005, but was advised by Alindra that it had been misplaced. According to Bank records the cheque was cashed by the client on 1 July 2005.

It is alleged that B M Alindra gave Mr Khan $250 in cash a day later as replacement for the misplaced cheque. Mr Khan confirmed that Alindra paid the money to him at a Pharmacy in Ba."

It would appear from the evidence given by the Investigator (Mr K Kumar) that the allegation as framed above was based on notes which were made by the investigator when he interviewed the complainant.

However, when the complainant put his complaint in writing in a letter dated 21 April 2006, there were discrepancies in relation to some details concerning the facts. In this case it is appropriate to include the text of the written complaint which was as follows:

"Re: Forgery by Alindra Singh

I, Raj Ali Khan f/n Yasin Ali Khan would like to inform your bank aout the forgery done by the above mentioned Alindra Singh. I went to your bank on 21/10/05 to pick my cheque of $250 for cane payment but I was advised by the cashier that my cheque had been cashed. I was surprised to hear this and I told her that I have not even received the cheque. I asked for Alindra Singh but he was not at work.

Then I again visited your bank on 24/10/05 and I met Alindra Singh. I related him about the incident that happened on 21/10/05. He advised me that he would find out who has done this forgery and would inform me about the outcome. He told me to come on 26/10/05.

I visited him on 26/10/05 and he told me that to keep this incident to myself and asked me to wait near Island Pharmacy for him and he would give me the money I came out of the bank quietly and waited for him at the pharmacy. He came there paid me $250 and he never mentioned me who had done the forgery."

Although this complainant was not called to give evidence, the letter purported to be signed by Raj Ali Khan. It was a very detailed complaint and bore little resemblance to the allegation to which Grievor 1 was required to respond.

However the common element in the two versions was that Grievor 1 had paid to this complainant the sum of $250 at a meeting at a pharmacy sometime after the complainant had attended at the Bank to collect a cane refund cheque.

In his response Grievor 1 denied the allegation. He relied on the fact that the complainant had not lodged a complaint with the bank about the incident at the time. The reason for that is obvious enough. He had received his money, albeit by cash a few days after he had gone to the Bank. He had been requested by Grievor 1 not to mention the matter. It would appear that the matter was only raised when the investigators interviewed the complainant. He was interviewed because there was no signature appearing in the relevant cane refund schedule although the cheque had been collected and endorsed by an unidentified person.

Under the circumstances, the Triunal has concluded that there were sufficient grounds for the Employer to have honestly and genuinely believed on reasonable grounds that Grievor 1 had committed the act of misconduct which were alleged by the complainant.

It should be noted that although the report in relation to this complaint was somewhat confused and confusing, the essential facts were identified.

The third complaint against Grievor 1 came from Mr Joveci Ravato. The allegation was put to Grievor 1 in the following terms:

"Client called in to the Bank sometimes in early 2005 and collected his refund cheque of $837.00. He alleged that B M Alindra Singh advised him to cash the said cheque and pay $300.00 into his (client’s) account. Client followed the advice and handed over $300.00 in cash to Sunita D singh in the presence of B M Alindra Singh. Client requested for a Bank receipt but was denied and was given a verbal assurance by both officers that it will appear in his Bank statement.

However, when client received his six monthly statement in August 2005, he noticed that there was no credit entry of $300.00."

In this case there was no written complaint and the allegation was once again based on an interview with the investigator. The Tribunal accepts the sworn evidence given by the complainant that he had received his cane refund cheque in the amount of $837.00. The Tribunal also accepts that on the advice of Grievor 1 the complainant went to the ANZ Bank and cashed the cheque, returned to the Bank and handed the cashier (Sunita Singh) in the presence of Grievor 1 $300 cash without receiving a receipt. The Tribunal also accepts that the amount of $300.00 did not appear at any time in the complainant’s statement.

This evidence was consistent with the allegation put to Grievor 1. The allegation had initially been raised by the Complainant with the Employer. There was a meeting attended by the Grievors, the complainant and the Senior Business Manager. The Grievors denied the allegation made face to face by the complainant at the meeting. The meeting took place shortly after the complainant noticed that the payment did not appear in his statement.

In this case the Tribunal is satisfied that the Employer had reasonable grounds to honestly and genuinely conclude that Grievor 1 had committed the acts of misconduct which were alleged by the complainant.

The final allegation put to Grievor 1 came from Anil Kumar f/n Shiu Shankar. The allegation was expressed as follows :

"Sometimes in January 2005, client requested for a refund of $500.00 and left a blank signed release form with B M Alindra Singh to process the request. However, B M Alindra Singh prepared a cheque for $1300.

Upon enquiry by client as to why his instructions were not followed, B M Alindra Singh advised him to cash the cheque and pay back to the account $700.00. In fact $600.00 cash was handed to Sunita D Singh in the presence of Alindra Singh. Client advised that as he was in a rush, he would collect his Bank receipt for the $600 later.

The client alleges that this money did not appear in either his June or December 2005 Bank statements."

It would appear that this allegation was put to Grievor 1 following an interview with the investigator. There was no written complaint and this complainant did not give evidence. The Investigator did not produce and apparently had not sighted the signed release form nor the cheque for $1300.00.

The investigator’s report contains a number of conclusions about facts which were not included in the allegations put to Grievor 1. The allegation contained a reference to a blank signed release which was not referred to in the report.

There was no explanation from the Employer as to why neither any of the original nor copy documents could be retrieved. There was no evidence that the investigator had been able to determine their existence.

Under the circumstances the Tribunal has concluded that the Employer could not in this case have reasonable grounds for honestly and genuinely believing that Grievor had committed the acts of misconduct alleged by the complainant.

So far as Grievor 2 was concerned, there were allegations from five customers set out in the document attached to her suspension letter.

The first four allegations put to Grievor 2 were from Pradeep Chand who had appointed Ramesh Prakash as his Power of Attorney, Munsammy Reddy, Mrs Daya Wati as executrix of the estate of Ram Naresh deceased and Chandra Mani who had appointed Sitambaram as her Power of Attorney.

The allegations made in these four cases were similar in nature. The complainant and/or his/her representative went to collect a cane refund cheque from the Employer.

In the allegations made by Pradeep Chand, Munsammy Reddy and Chandra Mani, the complainants were informed that the cane proceeds had been credited to the loan account to reduce the loan debt. However in each case the bank’s records revealed that the cheque had been released by Grievor 2 and allegedly cashed by the client. The Complainants all denied ever having cashed the relevant cheques.

So far as Ms Wati was concerned, she denied ever having received the cheque and maintained that she had not signed any documents at the Bank.

Mr Ramesh Prakash, Mr Munsammy Reddy and Ms Daya Wati all gave evidence at the hearing.

On the balance of probabilities the Tribunal accepts the evidence given by the witnesses that they did not receive nor did they cash the cheques to which they were entitled for cane refunds. The Tribunal also accepts that each of the cheques was released by Grievor 2. The Tribunal accepts that the signatures on the relevant cheques were not the signatures of the complainants or their representatives.

The Tribunal accepts the evidence from Mr J Visako concerning the procedure which was in practice at the relevant time for the endorsement of cane refund cheques for cash payment. At that time the cashier (Grievor 2) would bring the cheques to the appropriate officers for endorsement. His evidence was that he and the other Senior Business Manager endorsed the cheques for cash payment on the basis that the cashier (Grievor 2) had correctly identified the person at the counter as the person named as payee or as an authorized person collecting on behalf of the payee.

The Tribunal is also satisfied that Grievor 2 was familiar with this process and had either failed to establish the identity of the recipient or had used it to her own advantage.

The Tribunal does not accept the material in the letter dated 26 March 2006 from Grievor 2 setting out her explanation to the allegations.

The Tribunal has concluded that there were reasonable grounds for the Employer to honestly and genuinely believe that Grievor 2 had committed the acts of misconduct which had been alleged against her.

In relation to the fifth complaint, the Tribunal is not satisfied that there were sufficient grounds to establish the allegations for the same reasons as were stated for Grievor 1.

In summary, the Tribunal is satisfied that at the time the Employer decided to summarily dismiss the Grievors there were reasonable grounds to honestly and genuinely conclude that Grievor 1 was guilty of misconduct in relation to two of the allegation and Grievor 2 was guilty in relation to four of the allegations. The established acts of misconduct at the very least amounted to a failure to follow procedures which were in place and which were known or ought to have been known by the Grievors.

The Tribunal does not accept the proposition raised by the Grievors that the Senior Branch Manager Mr P Sharma had conspired with the complainants or had assisted them in manufacturing the complaints to get at the Grievors.

The only persons who appeared to subscribe to that theory were the Grievors themselves.

The question then is whether the penalty of summary dismissal was within the range of penalties available to a prudent Employer acting reasonably. As a first step, the Employer must be satisfied that the established misconduct amounted to serious misconduct. Both Grievors have failed to comply with standard practices which were known to them or ought to have been known to them. As a result of their misconduct, customers have been required to question the integrity of the Employer and have in some cases suffered financial loss.

The Tribunal is satisfied that the Grievors’ misconduct was wilful and without doubt amounted to serious misconduct. The fact that the Grievors were found not guilty in the Magistrates Court is of no relevance to the outcome of this Dispute. There are two reasons for this assertion.

First, in criminal proceedings in the Magistrates Court, the prosecution must establish the facts upon which it relies to the satisfaction of the Court beyond reasonable doubt. In this Tribunal, the Employer need only establish that it had reasonable grounds for honestly and genuinely believing that the Grievors had committed the alleged acts of misconduct. Secondly, there are many reasons why a court may reach a decision of not guilty. It is possible that some or all of the prosecution witnesses did not attend to give their evidence. It may well be because the prosecution has not been in a position to proceed for any one of a number of reasons.

The Tribunal is also required to determine the fairness of the procedure adopted by the Employer when it concluded that summary dismissal was the appropriate penalty to be imposed on the Grievors.

One aspect of the Employer’s duty to afford procedural fairness is that it must carry out a reasonable investigation or inquiry into the allegations against the Grievors. The investigator’s report indicated that the Employer had given the Grievors an opportunity to respond to specific allegations and that those responses had been considered by the Employer.

There are however other aspects of the investigation which are of some concern. Whilst the Tribunal accepts that the investigator did interview eight of the complainants, it would appear that there was no attempt to follow-up inconsistencies which arose out of those interviews. The Grievors were not interviewed, and other staff at the Employer’s branch at Ba also were not interviewed.

Furthermore, in view of the fact that the Grievors were not interviewed in relation to the facts (the Employer having chosen to rely on the Grievors’ written responses to the allegations), they should have, as a matter of fairness, been given the opportunity to mitigate by way of a face to face interview.

There is also the question of compliance with the Collective Agreement. Clause 51 of the Agreement would appear to imply that the Grievors should have been interviewed prior to disciplinary action being taken against them. It is also apparent that the suspension letters did not inform the Grievors of any proposed disciplinary action, a step which was mandated by clause 50 (ii) of the Collective Agreement.

In keeping with modern employment relations practice, the Employer should have informed the Union about the matter or at some stage informed the Grievors that their Union may make representations on their behalf.

The Tribunal has concluded that on balance the procedure adopted by the Employer was not fair. The Employer has failed to establish procedural fairness in that it did not comply with the Collective Agreement and did not provide any opportunity for mitigation. But that is not necessarily the end of the matter.

The Tribunal has carefully considered the material which was available to the Employer, in particular the substantial amount of documentary evidence, and has concluded that the decisions taken in respect of Grievor 1 for two of the allegations and Grievor 2 for four of the allegations were made on reasonable grounds as a result of genuine and honest conclusions and therefore justified.

As a result the Tribunal is now required to determine an appropriate disposition.

The test which is applied by the Tribunal in deciding whether re-instatement is the appropriate remedy is to determine whether, objectively assessed, the Grievors can be said to have the "trust and confidence" of their Employer and "would be harmonious and effective members of their Employer’s team."

In view of the Tribunal’s conclusion that the dismissals were justified, and having considered all the material which was available to the Employer and which was placed before the Tribunal, including the evidence given by the Grievors, the Tribunal has concluded that re-instatement is not appropriate.

Under the circumstances of this Dispute and taking into account both the conduct of the Grievors and the background of the affected customers, the Tribunal considers that it would be just to award the Grievors no remedy.

In reaching this conclusion the Tribunal has also considered the years of service of each Grievor. Grievor 1 commenced employment with the Employer in February 1988 and has been employed at the Ba Branch since 1999. Grievor 2 had been employed art the Ba Branch since February 2002.

However the Tribunal has concluded that in this case the nature of the misconduct, the number of complaints and the type of customers affected all served to outweigh any favourable consideration which the Grievors’ years of service may otherwise have warranted.

The Tribunal has noted the recommendations set out in the investigator’s report concerning the management team at the Ba Branch. The Tribunal is satisfied that their involvement and culpability involved essentially a failure to supervise, monitor and effectively manage the activities of the Grievors. As a result the misconduct was not of the same nature as that of the Grievors and the principles of parity of treatment do not apply. What action, if any, should have been taken in respect of the management at the Ba Branch was a matter for the Employer.

AWARD

The decisions taken by the Employer to summarily dismiss the Grievors were justified. The Employer had reasonable grounds based on the information available to it at the time to form a genuine and honest belief that Grievors were guilty of serious misconduct.

The procedure adopted by the Employer was unfair in that the Employer failed to comply with the Collective Agreement and failed to afford the Grievors an opportunity to mitigate.

Re-instatement is not appropriate. Under the circumstances, it is just to make no award.

DATED at Suva this 16^th day of January 2008.

Mr. W. D. Calanchini
ARBITRATION TRIBUNAL