Fiji Bank and Finance Sector Employees Union v ANZ Banking Group Ltd [2008] FJAT 10; Award 10 of 2008 (19 March 2008)

THE REPUBLIC OF THE FIJI ISLANDS

NO 10 OF 2008

AWARD OF
THE ARBITRATION TRIBUNAL

IN THE DISPUTE BETWEEN

FIJI BANK AND FINANCE SECTOR EMPLOYEES UNION

AND

ANZ BANKING GROUP LIMITED

FBFSEU: Mr P Rae with Mr D Singh
ANZ: Mr N Lajendra

DECISION

This is a dispute between Fiji Bank & Finance Sector Employees Union (the Union) and ANZ Banking Group Limited (the Bank) concerning the dismissal of Ms Rangita Devi (the Grievor).

A trade dispute was reported by the Union on 11 April 2007.

The report was accepted on 6 June 2007 by the Permanent Secretary who referred the Dispute to conciliation.

Subsequently the Minister authorized the Permanent Secretary to refer the Dispute to an Arbitration Tribunal for settlement pursuant to section 6 (1) of the Trade Disputes Act Cap 97.

The Dispute was referred to the Permanent Arbitrator on 7 September 2007 with the following terms of reference:

"- - - The Dispute is over the termination of employment of Ms Rangita Devi with effect from 24 March 2006. The Union views the Bank’s action as unjust, unreasonable, harsh and unfair and further views the Bank’s action to be in breach of clause 13 (a) of the Collective Agreement. The Union seeks Ms Ram’s re-instatement without any loss of pay and benefits."

The Dispute was listed for a preliminary hearing on 21 September 2007. On that day the parties were directed to file preliminary submissions within 21 days and the Dispute was listed for mention on 19 October 2007.

On that day the parties were granted a further 21 days to file their preliminary submissions and the Dispute was relisted for mention on 30 November 2007.

The Union filed its preliminary submissions on 7 November and the Bank did so on 12 November 2007.

The hearing of the Dispute commenced on 15 February 2008 in Suva. On that day it was adjourned part heard to 18 February, then adjourned to the following day and was completed on 20 February 2008. The parties presented closing oral submissions on 25 February 2008.

During the course of the hearing, the Bank called two witnesses and the Union called the Grievor to give evidence.

By letter dated 7 May 2003 the Grievor was offered a part time position as a teller at the Bank’s Labasa Branch. The Grievor signed her acceptance of the offer on 20 May 2003 and as a result a written Service Agreement (Part-Time Employee) was signed by the Bank and the Grievor on 20 May 2003. Her employment commenced on 7 May 2003.

Clause 4 of the Agreement provided:

"4 The Employee shall during her hours of attendance during the day or week as may be required from time to time diligently perform and apply herself to all duties (including any course of training presented by the Bank) which the Bank or any authorized officers may verbally or in writing request, order or entrust her to perform and shall at all times comply with all the rules regulations and instructions at any time laid down or given by the Bank for the guidance of its part time employees and relevant to the employment of the employee."

Clause 9 of the Agreement dealt with termination of employment. Pursuant to clause 9 (d) the Grievor’s employment would be terminated if the Grievor was dismissed from the Bank’s service. The circumstances under which the Bank could dismiss the Grievor without notice or payment in lieu of notice (i.e. summary dismissal) under clause 9 (d) must be read in a manner which is consistent with the provisions of section 28 of the Employment Act Cap 92.

Also on 20 May 2003 the Grievor signed a Code of Conduct Acknowledgment whereby she confirmed that she had received a copy of the Bank’s Code of Conduct Booklet. She also agreed that she had read and understood the contents and to abide in full with the Code and any subsequent amendments.

As the Grievor was a member of the Union, the Collective Agreement made by the parties became an implied condition of her contract of service, in so far as its provisions applied to her, by virtue of section 34 (7) of the Trade Disputes Act Cap 92.

Clause 4 B (ii) retained the Bank’s right to summarily dismiss an employee in respect of the circumstances which were listed therein and which were identical to the circumstances under which an employer could summarily dismiss an employee pursuant to section 28 of the Employment Act.

In Award No 9 of 2008 (made in respect of a dispute involving the same parties) the Tribunal set out some observations concerning the purpose and effect of section 28 of the Employment Act. The Tribunal considers those observations to be relevant to the present Dispute.

Clause 13 (a) of the Collective Agreement dealt with warnings and stated that:

"Warnings for habitual lateness, malingering, absenteeism and other similar offences may be given by the Manager or his nominee to the employee. Such warnings if they are to be held against the employee, shall be confirmed by letter by the manager and two such confirmed warnings may render the employee liable to termination of employment for a third offence; PROVIDED that no written warnings shall be valid for a period of more than a year."

The Tribunal is satisfied that by December 2005 the Grievor had received training in and knew or ought to have known the Bank’s Standing Instructions concerning the procedures for Cash withdrawals, Cheque and Cash Combination Deposit and Verifying Tellers Cash.

On 12 December 2005 whilst performing teller duties, the Grievor overpaid a customer $450. The customer presented a cash cheque in the amount of $50. The Grievor paid $500. Despite almost immediate searches of the Labasa area, the customer could not be located and the overpayment was never recovered from the customer. The Grievor was assisted by the Teller Supervisor in her endeavours to locate the customer in the Labasa area.

The incident was reported to the Bank’s Audit Department and to the Bank’s Human Resources Department (to Ms T Colawai) with the knowledge and approval of the Labasa Branch Manager.

The Grievor, whether under protest or not, worked as a teller the following day being 13 December 2005. On this day the Grievor advised the Teller supervisor that her cash holding was $200 in surplus. It would appear that the Bank was unable to determine how the Grievor came to have a surplus of $200 in her cash holding as no customer came forward to report a mistake and her paperwork appeared to reconcile.

In relation to the first incident (12 December) the Grievor wrote a diary noted dated 12 December 2005 in which she admitted overpaying the customer by $450.

In relation to the second incident (13 December) the Teller Supervisor (Ms Zoing) prepared a diary note after she had reported the matter to the Bank’s Audit and HR Departments in Suva. In her diary note, the Teller Supervisor outlines five other irregularities alleged to have been committed by the Grievor on that day.

In her diary note dated 14 December 2005, the Grievor addressed only the surplus of $200 cash. The Tribunal is satisfied that the surplus cash issue was the only matter for which an explanation in writing was required by the Teller Supervisor. The Grievor did admit in her evidence that she was verbally asked about the other matters but was not required to provide a written explanation about them.

The diary notes relating to the two incidents which had been compiled by both the Teller Supervisor and the Grievor together with the relevant documentation were subsequently forwarded to the Bank’s Head Office in Suva.

On 21 December 2005 the Grievor was requested by the Teller Supervisor to report to the office when she had finished her teller duties. The Grievor gave evidence to the effect that and the Tribunal accepts that the Grievor was told the meeting concerned the overpayment of $450 on 12 December and the cash surplus of $200 on 13 December 2005.

The meeting was attended by the Labasa Branch Manager (Mr Nadan), the Teller Supervisor and the Grievor. Admitted into evidence were two Diary Notes which represented a formal record of the outcome of the meeting. The Diary notes were in the form of a standard proforma apparently issued by the Bank’s People Capital (HR) Department on 7th Floor of ANZ House Suva (This appears at the bottom left hand side of the proforma).

On the top right hand side, the expression "Disciplinary Process" is printed. The details of each incident were clearly and precisely stated and then the details of what transpired were set out.

In relation to the incident which occurred on 12 December 2005, the following was stated :

"On 12/12/2005, your cash holding was short by $450.00. This was due to encashment of a $50 cheque and you paying $500 to the customer instead.

Our investigations reveal that you have not adhered to standing procedures when undertaking your telling duties. The 6 checks were not carried out at all which is confirmed by myself and Winny Zoing (Tellers Supervisor).

You have been verbally counselled by Teller’s Supervisor, Winny Zoing and Branch Manager Satya Nadan on 21 December 2005.

Your lack of concentration has resulted in this loss. The bank views failure to adhere to standing procedures very seriously.

This Diary note serves as an advice to place you on notice that any further discrepancies may warrant serious disciplinary action."

The diary note was acknowledged and adopted by each of the three participants by signing t the conclusion.

In relation to the incident which occurred on 13 December 2005, the diary note stated:

"On 13/12/2002, your cash holding was surplus by $200.00. All checks were carried out and we were not able to identify any customers who may have been short paid or any deposit which was accepted with surplus funds.

Your lack of concentration has resulted in this teller difference. The bank views any difference seriously and as such, you have failed in ensuring that your cash is correctly accounted for. Rangeeta, your performance is deteriorating which also involves a lot of administration.

You have been verbally counselled by Teller’s Supervisor, Winny Zoing and Branch Manager, Satya Nadan on 21 December 2005.

Furthermore, we have been conducting random checks on entries transacted by yourself and found out that you have not been following standing procedures when undertaking your telling duties. Our investigations revealed the following:

- Mobil Oil Australia Pty Ltd deposit received on 13/12/2005, however deposit slip not obtained from customer which was received today.

- Withdrawal $25 for Sunita Devi made with no validation on reverse of withdrawal.

- Deposit $25 received with wrong tracer on reverse of deposit slip.

- Unauthorized cash draw amendment for $50 to balance your cash.

Failure on your part to take heed of our advices may warrant serious disciplinary actions."

Again this diary note was acknowledged by each participant signing the document.

The Grievor was handed the original of each diary note the following day (22 December 2005).

The Tribunal was not able to determine from the evidence given by the two witnesses called by the Bank what happened to the copies of the diary notes. At one stage it was implied during the evidence that copies should have been forwarded to People Capital (HR) in Suva. It would appear that copies were placed on the Grievor’s file which was held at the Labasa Branch.

The Tribunal has concluded that the meeting held at the Labasa Branch on 21 December 2005 was for the purpose of enabling the Branch Manager to deal with the two incidents. In other words, it was intended to represent a disciplinary meeting at which the Branch would impose what it considered to be an appropriate disposition.

The notes indicated that the allegations in relation to each incident were set out in detail and the results of the Branch’s investigations were also included. In each cash the Branch Manager considered on the spot counseling by himself and the Teller Supervisor to be the appropriate outcome together with an indication that future misconduct might result in serious disciplinary action.

It would appear that some time prior to 28 December 2005 the Teller Supervisor, at the request of Ms Colawai, informed the Grievor that Ms Colawai would be attending at the Labasa Branch on 28 December 2005.

The evidence was in conflict as to what Ms Zoing told the Grievor about the purpose of Ms Colawai’s visit. The evidence was also in conflict as to how many meetings were held on 28 December 2005 and also as to whether a disciplinary hearing took place as part of one meeting or as a second meeting or not at all.

In any event the evidence clearly established that a performance review did take place on 28 December 2005 at Labasa. Admitted into evidence was a completed proforma document with the title "Formal Performance Counselling Meeting."

The Document was in the form of a diary note and checklist.

The Document stated that the Grievor, Ms Colawai, the Branch Manager and the Teller Supervisor were present at the interview.

The document also stated that the employee had been given the option to have a support person present. The body of the diary note referred to some of the matters discussed and measures to be taken to improve performance.

On page 2 of the document there is a heading which states "Consequences of continued poor performance or misconduct: What was typed in that box stated:

"Warning letters, final warning letter and ultimately dismissal."

This was written on or shortly after 28 December 2005. By that time Ms Colawai was well aware of the incidents of 12 and 13 December 2005. The Tribunal is satisfied that when Ms Colawai was handed the Grievor’s file at Labasa on 28 December 2005 and took it back to Suva, she knew or ought to have known that the Branch Manager had dealt with those two incidents on 21 December 2005. The reference to warning letters, final warning letter and ultimately dismissal in the diary note for the interview conducted on 28 December 2005 could only be a reference to consequences for future misconduct which might have occurred after 28 December 2005.

It should be noted that there was no mention of formal disciplinary proceedings in the performance review diary note. Although it appeared that Ms Colawai recorded all proceedings on that day, the Bank was not able to produce any written record of any disciplinary hearing or meeting which it was claimed had been conducted on 28 December 2005. The explanation offered by Ms Colawai for this situation was that she had downloaded the recording to her PC which had then been somehow erased by the IT Department.

Although there was some conflicting evidence about what might have occurred after 28 December 2005, the next significant event was when the Grievor received two warning letters both of which were dated 23 January 2006. Both letters were signed by a Ms Lilian Alfereti as Head of People Capital (RLVG).

One of the warning letters was described "as your First Warning Letter for your negligent actions on 12 December 2005 and is valid for 12 months effective from 12 December 2005".

The next paragraph of the letter stated:

"According to your Service Agreement clause 5 you have committed an unauthorized act and the Bank demands that you pay restitution of the loss amount. As discussed in the interview, you will pay restitution of $450 that will cover for 100% of the loss amount. As agreed in your interview, deductions of $10 will be made fortnightly via payroll until cleared in full."

The other warning letter was described "as your Second Warning Letter for your negligent actions on 13 December 2005 and is valid for 12 months effective from 13 December 2005."

These two warning letters issued to the Grievor by the Bank raise at least two substantive issues.

First, as noted earlier in this decision, the Tribunal has concluded that the disciplinary meeting conducted by the Labasa Branch Manager on 21 December 2005 in his office at Labasa and in the presence of the Teller Supervisor, dealt with and disposed of the misconduct arising out of the incidents which occurred on 12 and 13 December 2005.

It would appear that nothing occurred after 21 December that would have justified or entitled the Bank to impose a new or different disciplinary penalty upon the Grievor for the misconduct which had occurred on 12 and 13 December 2005 and which had been the subject of the 21 December 2005 disciplinary meeting and counselling. There was no new act of misconduct by the Grievor nor was there any evidence to suggest that the Grievor had earlier misled or deceived the Bank.

The Bank cannot change the disciplinary outcome which was considered appropriate by the Branch Manager and acknowledged by the Grievor on 21 December 2005 by purporting on 23 January 2006 to substitute two warning letters simply because a senior manager considered a more severe penalty to be appropriate. The Bank must accept the original decision of 21 December 2005.

The principle that has been applied by the Tribunal is that when a responsible member of management possessing the requisite authority, imposes a specific sanction for certain misconduct and the Grievor is so advised, it is not proper for higher levels of management, on being appraised of the events, to subsequently substitute a more severe penalty.

In this case there was no evidence to suggest that the Branch Manager was not a responsible member of management who had the requisite authority to dispose of the misconduct in the manner described in the diary notes dated 21 December 2005.

The Tribunal is satisfied that higher levels of management became aware of the proceedings conducted by the Branch Manager either on or shortly after 28 December 2005 when Ms Colawai returned to Suva with the Grievor’s file.

It was then at some time later that a decision was taken to issue the two warning letters dated 23 January 2006

The Tribunal has concluded that the Bank has failed to establish that it was justified in disciplining the Grievor by issuing two warning letters on 23 January 2006.

The second issue concerns the decision by the Bank to issue two warning letters on the same day. The incidents giving rise to the two warning letters occurred on consecutive days (12 and 13 December 2005) some five weeks prior to the date of the warning letters. The incidents involved carelessness in the sense that on one day a customer was overpaid $450 but there was no suggestion of dishonesty. On the next day the Grievor ended up with an inexplicable surplus cash holding of $200 and committed some minor breaches of procedure.

If the Tribunal were to accept the Bank’s evidence, then the incidents were dealt with together and at the same time during the course of a disciplinary meeting on 28 December 2005 conducted by Ms Colawai. Both incidents arose out of careless and not paying sufficient attention.

It does appear to the Tribunal that it would have been reasonable for the Bank to have issued the Grievor with only one warning letter on 23 January 2006. By issuing two warning letters on the same day, the Bank has not given the Grievor any opportunity whatsoever to alter her behaviour or correct her mistakes. The Bank has disregarded the real purpose of the system of progressive discipline for which provision is made in clause 13 of the Collective Agreement.

It follows that, if the Tribunal is not correct in its conclusions about the Branch Manager’s disposition on 21 December 2005 of the Grievor’s misconduct, then the Tribunal concludes that the Bank has failed to establish that it was justified in issuing two warning letters on 23 January 2006 when one would have been adequate, and has as a result, acted unreasonably.

The Tribunal does not consider that the decision by the Bank to recover the $450 overpayment which formed part of the First Warning Letter was unreasonable. The Grievor is responsible to the Bank for the overpayment. It was not a fine or a monetary penalty. Rather it is compensatory in nature and reasonable as restitution.

The end result is that the Bank may have been justified in imposing one warning letter and the restitution payment in respect of the incidents which occurred on 12 and 13 December 2005, had it not been for the disciplinary meeting conducted by the Branch Manager on 21 December 2005.

The Grievor was involved in a further incident on 7 March 2006 when she entered into her computer a deposit for $1400 when the actual amount was $1200. Her paperwork recorded the correct amount of $1200. The error was in the computer entry. There were also other breaches of procedures on the same day.

These matters were outlined in a diary note dated 8 March 2008 prepared by the Teller Supervisor. Although the diary note stated that the Grievor corrected the error on her computer at the end of the day without authorization, the evidence established that the head letter had authorized the Grievor to make the correction.

The Tribunal accepts that the summary at the end of the Supervisor’s diary note is a satisfactory outline of what happened on 7 March 2006. It stated :

"Officer is not following standing instructions. She should have recorded a shortage of $200 at first. When correction was made she should have only reduced her $50 denomination and not $1 as the physical cash received was $50. Wrong validations as a result of not completing a transaction and processing another. Destroying validation slip. Rangita admitted that she did not verify her coins but took the system total as teller total."

It would appear that a disciplinary interview was conducted on 22 March 2006 in Labasa. The Grievor attended with a Union representative and also present were Ms Colawai, the Teller Supervisor and the Branch Manager.

The evidence before the Tribunal was in sharp conflict concerning what the Grievor had been told was the purpose of the meeting and what actually transpired at the meeting. It would appear some aspects of the computer error and the subsequent correction were discussed.

On 24 March 2006 the Grievor, was informed by Ms Colawai (who had returned to Suva) by teleconference that her employment had been terminated. She was told she would receive a termination letter by post. The Tribunal accepts on balance that the Grievor did not receive her termination letter. She subsequently received a copy from the Union.

The termination letter was dated 24 March 2006 and signed by the Head of Personal Financial Services. It stated:

"In an interview dated 22nd March 2006, you admitted that you breached several telling procedures at Labasa Branch on the 8th of March 2006. These breaches were discovered when Ravinesh Kumar, a teller at the Labasa Branch, checked your vouchers against your journal at the end of the day on 8th March 2006. Ravinesh located a deposit of $1200 from a Sangeeta S Prasad taken as $1400 by you. After receiving advises from Ravinesh about this discrepancy, Tellers Supervisor, Winny Zoing went through your vouchers and found the following:

- A shortage of $200 in your cash holding that was not declared – Breach of Process #515 & 625, Step 5 of the Sales & Services Operating Manual;

- 5 vouchers had wrong validations on them – Breach of Process #17, Step 8 of the Sales & Service Operating Manual;

- Validation slip for a $250 withdrawal was squashed and found the barbage bag – Breach of Process #1,2,3,4,8 & 9, Step 6 of the Sales & Service Operating Manual.

In terms of your Service Agreement Clause 4, you have failed to comply with all the rules, regulations and instructions laid down by the Bank for the guidance of its officers relevant to the employment and appointment held by the officer.

In an interview dated 28th December 2005, you admitted that you breached telling procedures on 2 occasions. Accordingly, 2 warning letters were issued to you and acknowledged by what that were effective on the 12th and 13th of December 2005.

In terms of Collective Agreement Clause 13(a) this serves as your Third Warning for your negligent actions on the 8th of March 2006.

As a direct consequence of this transaction and with the information supplied through Audit and Compliance I now confirm that the Bank views your actions as a serious breach of both your employment and collective agreements and ANZ considers that you can no longer be trusted to perform the inherent job characteristics as a teller.

In terms of the Collective Agreement Clause 13(a) and Clause 9d (i) & (ii) of your Service Agreement, you are hereby dismissed from the Banks services with immediate effect."

The Bank appeared to rely on both clause 13 (a) of the Collective Agreement and clause 9 (d) (i) and (ii) of the Grievor’s Service Agreement.

For the reasons already stated the tribunal has concluded that the Employer has not established that it could with justification dismiss the Grievor under clause 13 (a). The letter dated 24 March which stated that it served "as your Third Warning for your negligent actions on 8 March 2006" could at best be regarded as a second warning and probably as the Grievor’s first warning letter. On that bases the Bank has acted unreasonably.

Clauses 9 (d) (i) and (ii) set out the circumstances under which the Bank could dismiss the Grievor from the Bank’s services either with notice or payment in lieu of notice or without payment or notice.

Taking into account the limitation placed on an employer’s right to summarily dismiss an employee under section 28 of the Employment Act, the Tribunal has concluded that even the sum total of Grievor’s misconduct was not sufficiently serious that it would have entitled an employer to treat the contract of employment as having been discharged at common law. Furthermore the incidents which occurred on 7 March 2006 did not in any way affect the Bank’s reputation in the eyes of any of its customers. The breaches were relatively minor although time consuming to rectify.

The Tribunal has concluded that the Bank acted unreasonably when it purported to summarily dismiss the Grievor pursuant to clause 9 (d) of the Service Agreement.

In relation to the procedure followed by the Bank in effecting the Grievor’s dismissal, the Tribunal has concluded that the Grievor was not treated fairly. She did not receive her termination letter. In addition she had to ask on more than one occasion for her service record which she only received after representations to Ms Colawai in Suva. Furthermore, the Tribunal is not satisfied that the Grievor was made fully aware of the purpose of the meeting to be conducted in Labasa on 22 March 2006.

As for an appropriate remedy, the Tribunal has carefully considered all the material placed before it and has concluded that re-instatement is not appropriate. There was ample material before the Tribunal for it to conclude that the Grievor could no longer be trusted to perform in accordance with procedures and could certainly no longer be regarded as an effective member of her employer’s team. The Tribunal is satisfied that the Grievor has not responded to the counselling and on the job training which had been provided over a long period of time at Labasa.

The material clearly establishes that the Bank could have in good faith terminated the Grievor’s employment by either giving her the requisite notice or by paying her an amount in lieu of notice which is permitted under clause 9 (c) (iii) of the Service Agreement.

As a result the Tribunal has concluded that the Grievor should be paid four weeks wages in lieu of notice. She is awarded a further four weeks pay in respect of the unfair manner in which the Grievor was treated at the time of her dismissal.

AWARD

The summary dismissal of the Grievor was wrong, unreasonable and unfair.

Re-instatement is not appropriate. The Grievor is to be paid four weeks wages in lieu of notice pursuant to clause 9 (c) (iii) of the Service Agreement. The Grievor is award a further four weeks pay for the manner in which she was treated at the time of her dismissal.

DATED at Suva this 19^th day of March 2008.

Mr. W. D. Calanchini
ARBITRATION TRIBUNAL