IN THE EMPLOYMENT RELATIONS TRIBUNAL
AT SUVA
ERT MA No. 34 of 2012

BETWEEN:

NATIONAL UNION OF FACTORY AND COMMERCIAL WORKERS
UNION

AND:

CAPENTERS FIJI LIMITED T/A MORRIS HEDSTROM
EMPLOYER

Appearances:

Mr. D Nair for the Grievor
Ms. Prakash for the Employer

Date of Judgment: 10th July 2013

RULING ON PRELIMINARY ISSUE OF LAW

Application Before the Employment Relations Tribunal (or "the ERT")

[1] It is important to first state that the Union had filed by way of a Notice of Motion seeking an Order of Compliance with an Affidavit in Support sworn by John Mudaliar ("the Application") and which application was filed on 1st August 2012, inter alia seeking for the following Orders from the ERT:-

i.	That the within named Respondent do comply with Clause 32 of the Collective Agreement and provide cool water dispensers for the use of the employees;

ii.	Any further Orders or relief which the Tribunal considers appropriate in the circumstance; and

iii.	Costs.

[2] The Union had filed this application pursuant to Sections 212(1)(a) and 211(1)(f) and (g) of the ERP 2007.

[3] The Employer had responded to the application on 24th September 2012 through an Affidavit in Reply sworn by Pawan Praneet Sharma. 

 [4] When this matter was called on 27th September 2012 before me, the Employer had raised a preliminary issue of law which was imperative to be determined before the miscellaneous application of the Union could proceed in the nature it had originated (for Order of Compliance). While the issue of law through this application has to do with the validity of the (Master) Collective Agreement that would in ordinary circumstance bestow the Union with the required locus standi to bring such an application to the Tribunal (say, either directly or through the systems and processes created under the ERP 2007 such as via the Permanent Secretary's powers or through mediation services), I belief there is another equally important issue to be addressed herein that puts both this oral application and the original application on foot. In both instance the common denominator is the locus standi of a party to initiate such proceedings as of any statutory right under the ERP 2007, particularly in the manner that obviously seeks Orders of Compliance from a party (here the employer) to discharge a duty or carry out a task such as providing water dispensers to the workers as per any contract of service. 

[5] To better understand this issue, I am relying on the Employment Relations Court (or "the ERC") pronouncement in the case of the Thakur Tara Singh –v- New Zealand Pacific Training Centre ERCC No. 04 of 2010. This is because I am too of the view that this Tribunal does not have specific powers to order compliance with employment contract (see Paragraph 10 at page 4). It merely has general powers under s211(1)(f) and 212 of the ERP. Furthermore, I too am bound to observe that such applications must be of "…urgent nature where Orders of these natures are granted in proceedings where breach could be established on affidavits…" as stated by Madam Justice Wati at Paragraph 13; page 5. Further I too oblige with the case-laws adopted by Your Ladyship particularly the case of Air NZ Ltd v NZ Air Line Pilots Association IUOW [1987] NZILR 656 at 662, where Justice Williamson had stated that:-

 "…my second preliminary comment concerns the general nature of the order for compliance jurisdiction…procedure is not meant to be a method of evading disputes procedure nor of "fast tracking" disputes procedures…if the breach of the obligations is clear the order to comply may flow but of the obligation itself is unclear, there must first be proceedings to define the obligation…" (Underlining is my emphasis)

[6] In any given circumstance this particular claim originating by way of a Notice of Motion would be deemed a 'dispute" under the definition section 4 of the ERP for purposes of giving the Union the required locus standi to bring such a claim. Indeed Madam Justice Wati in the case of Fiji Bank &Finance Sector Employees Union and ANZ Bank [2010] FJHC 450; ERCA of 01 of 2009 (12 October 2010) had ruled in that instance that: "…Section 109, 111 and s169 are provisions on locus standi to bring proceedings…"

[7] Section 169 is all about "reporting of disputes" where it states as follows:

 (1) A dispute may be reported to the Permanent Secretary by—

 (a) an employer who is a party to the dispute; or

 (b) a registered trade union that is a party to the dispute.

(2) A report of a dispute must be made in writing and in a prescribed manner. 
(Underlining is my emphasis)

[8] A 'dispute' under section 4 of the ERP means "a dispute or difference between and employer and a registered trade union connected with the employment or non employment, the terms of employment or the conditions of labour of a worker". 

Further, the Employment Relations (Administration) Regulations 2008 ("Regulations") stipulates or lays down the manner in which a dispute is to be reported in writing. The Regulation 12(1) states under the heading - 'Reporting of a dispute to the Permanent Secretary' – that:- "A report of a dispute required under section 169(2) of the Promulgation must be made in Form ER 5 set out in Schedule 1". 

[9] The ensuing application is made under s212(1)(a) of ERP 2007 which states as follows:-

212.—(1) If a person has not observed or complied with—

(a)	a provision of this Promulgation or an employment contract; or

(b)	an order, determination, direction, decision or requirement made or given under this Promulgation by the Tribunal or a member or officer of the Tribunal,

the Tribunal may, by order, require a party to a proceeding to do or cease to do a specified thing or activity, for the purpose of preventing further non-compliance with the provision, order, determination, direction, decision or requirement, and must specify a time within which that order is to be obeyed…" (Underlining is my emphasis)

[10] This was further invoked by the Union on the justification that the Tribunal has the jurisdiction to hear and make compliance orders under s211(1)(f) and (g) of the ERP. I agree that the jurisdiction is generally apparent in the legislation.

[11] What I don't agree with is the use of this provision through such applications that circumvents the actual essence and intention of Part 17 of the ERP – relating to "Employment Disputes". In particular s169 of the ERP clearly states how disputes between workers represented by their Unions is to be reported (as per s229 of the ERP, consequently giving the Union the required locus standi), thus flouting the spirit and intention of the legislation when such direct miscellaneous actions are filed with the Tribunal. In any event, the Tribunal is obligated to consider the application no matter how irregular it may appear unless it is so far from being in compliance with the ERP that the Tribunal in that event has further obligation to correct the procedures for bringing such actions without prejudicing either party. 

[12] Here, no doubt the fundamental nature of the ERP promoting for good faith relationship and bargaining process is watered down and almost made redundant through such applications that is nothing but a clear issue of "difference or a dispute" faced by the parties. This is very much at the heart of the provisions in the ERP such as s170(3) of the ERP that was designed to send only those matters deemed as "dispute" by the Permanent Secretary to the Tribunal if it related to "interpretation, application or operation of an employment contract" or in any other case, to the mediation services. 

[13] When the Permanent Secretary (or "the PS") is reported a "dispute" by the workers or on their behalf by the Unions, the PS must satisfy the test under s170(6) and (9) of the ERP respectively. To that end, a dispute must be within the time limit of reports made "…after the 6 months from the date on which the dispute arose" and this is further tested against the grievance procedure under an employment contract relating to the grievance been exhausted. Same procedure will apply in the case of "grievances" under s109 and in particular, under s111 of the ERP. In fact all grievances must be reported and referred to Mediation Service as per s110(3) of the ERP. 

[13] If it was reported to the PS as a dispute, then obviously the test for time limitation and grievance procedure would have to be scrutinized in the sense that the Collective Agreement was indisputably signed and entered in 2005 subject to subsequent amendment in 2010 although the particular Clause sought for Order of Compliance (Clause 32) was never varied or amended. The Union's representative, Mr. Nair had told the Tribunal that in the past water coolers were provided by the employer and because it had stopped, they were seeking a Compliance Order. In the Affidavit in Support sworn by John Mudaliar filed with the Notice of Motion, an email dated 13th July 2012 was attached to show that the employer was put on notice as to this issue. There was no evidence of any other notice to the employer. The Employer's Affidavit in reply sworn by Pawan Praneet Sharma denies that the employer owes any obligations under the Master Collective Agreement since it had expired and further the employer had made other arrangements for workers to have access to safe drinking water until a new MCA was negotiated: the employer had stated that this issue was before the Mediation Unit as per the Log of Claims for year 2011. 

[14] Evidently this was not a clear-cut application to simply grant a Compliance Order on the strength of the Affidavit evidence nor it was urgent (refer to Thakur Tara Singh –v- New Zealand Pacific Training Centre ERCC No. 04 of 2010 at paragraph 13.) Indeed in this case, Madam Justice Wati had clarified that:-

 "…the purpose of compliance order application is not to take oral evidence. The purpose of compliance order applications would be defeated if the Court converts compliance orders into trials or part trials..". 

[15] When the obligations of the parties are seriously disputed or is unclear as appears in this case, mainly since the Union did not file any affidavit in response to deny the Employer's positions in terms of whether or not MCA was in place and that a new bargaining process had taken place to secure one (as per paragraphs 6 to 13 of the Affidavit in Reply sworn by Pawan Praneet Sharma), no reasonable Tribunal can merely entertain this application on the disputing nature of the evidence through the Affidavits. In that regard, I again concede to Madam Justice Wati's clear observation when she applied another important case of Waikato Asphalt Ltd v Northern Industrial District Distribution Workers, etc, IUOW (1990) 3 NZELC 98, 233 to reinforce her above point and I quote:

 "…if I find that the obligations …is seriously disputed or is unclear, I cannot order compliance but order the employee to file an employment grievance in the Employment Relations Tribunal…"

[16] Accordingly, in this case, Madam Justice Wati had refused the Order of Compliance and had directed the parties that:-

 "…the matter must be heard on affidavits and the onus to establish the breach on the applicant employee, on the balance of probability. The hearing of the original application will determine whether the employer has raised matters which give rise to a dispute…"

[17] In that regard, if the usual process of reporting a dispute (or a grievance as Unions can also report both) is through s169 of the ERP, then the question left to address or clarify is: what is the real purpose of s212 of the ERP? While I concede that the ERP appears to use the language that purports to imply that compliance orders can be sought through such applications made directly to the Tribunal, that fallacy cannot be supported against the intention and spirit of the ERP built on the premise of good faith bargaining process not to mention the principles of natural justice taking its course when internal grievance procedures are utilized. Here, the employer is suggesting that negotiations for a new MCA were in place. Therefore, a reasonable Tribunal cannot overlook that any breach of the ERP or an employment contract is still subject to the usual scrutiny of satisfying the threshold of either classing a claim to be a "grievance" or "dispute" under section 4 of the ERP. Without first declaring it a dispute or a grievance, compliance orders have no place as in any event the overall merits of the claim will be built on the allegations from each side supported by respective evidence which must be properly heard before any such Orders can be justly considered and made. Further as s212(1) (b) of the ERP clarifies that if a party has not observed and taken seriously the Tribunal's orders, decisions, determination or directions, then Compliance is justified and necessary. Of course, there is no issue of hearing evidence as this would be a situation after evidence would have been considered, in whatever form. 

[17] The problem henceforth, to come directly to the Tribunal for such Orders (of Compliance) where the Tribunal is required to consider and then make orders against a party on the strength of the Notice of Motion and supporting Affidavit filed together, when rightly these matters could have been resolved via good faith negotiation and/or through mediation, shows that the Tribunal is now replacing these fundamental principles of resolving workplace differences as encapsulated and clearly envisaged by the ERP. In fact, in all matters that are reported and deemed a "grievance" is a breach of contract of service or the ERP. Same applies to a dispute. So, why treat these applications novel or different in substance and procedure under s212 of the ERP as if it supersedes Part 13 and 17 of the ERP respectively. 

[18] I am simply not convinced that s212 was designed to do that. If that was the case, then all matters will have the potential to originate through the Tribunal and this is against the fundamental tenets of good faith principles and the natural meaning and language of the ERP. As I have said the Tribunal can only hear matters that it is satisfied to be a "grievance" or "dispute" either in the context of a breach of the statute or the contract of service. Undoubtedly, the ERP is prescriptive how these matters should originate, in terms of being reported to the Ministry of Labour, and subsequently resolved by the mediation unit and then referred to the Tribunal only when matters are not successfully mediated. And all such matters "are to be adjudicated on the merits of the case" (see: Fiji Bank &Finance Sector Employees Union and ANZ Bank [2010] FJHC 450; ERCA of 01 of 2009 (12 October 2010). 

[19] This is even more vital to be observed by the reporting party or the claimant(s) or the grievor since the onus of proof is not on them but is always the burden placed on the employer to provide justification of the allegations or claims brought by the workers. In that regard, I find the Union's application before this Tribunal in the way it has originated directly to the Tribunal is without merits as it lacks the statutory compliance in terms of reporting a dispute. This is no doubt one.

[20] I also have to say that in terms of Part 16 – Collective Bargaining provisions of the ERP, the duty of good faith negotiation and bargaining process is alive from the inception of any Collective Agreement until its expiration. I believe here s212 of the ERP was prematurely exercised by the Union. This is almost, in my opinion an impulsive approach, to seeking a quick fix to a problem or difference between the parties when s170(3) of the ERP would have guided the parties to come with a matter as a dispute with merits after the scrutiny of the Permanent Secretary was complete. This is because if it was a dispute accepted by the PS, he had the powers to send the matter to the Tribunal directly (for compliance of the Collective Agreement) under s170(3)(a) of the ERP. In any given context, the Ministry of Labour as the enforcer of the ERP, under its Compliance Unit becomes defunct when matters do not get reported for immediate remedy for any breach of Collective Agreement or contract of service. That being the case, here there was some suggestion that the Union had filed a Log of Claims with the Mediation Unit and since the Union neither denied nor accepted this fact, I cannot merely rely on what the employer has submitted. Regardless of the differences between the parties, it cannot be ignored that the duty of good faith cuts both ways. If some bargaining process was already in place, then it places the Union under intense scrutiny why this application was filed.

[21] Further, if a proper dispute was filed, then the PS also being the Registrar of Trade Unions would have dispelled any misgivings on the breach of the Collective Agreement and/or whether it was still intact. This is, in fact the crux, of the issue through, both this application and Union's miscellaneous application. Locus standi of the Union to bring the original application is a common factor in both the applications as the Employer through the prevailing application has a right to raise that the redress sought by the Union in terms of seeking compliance with Clause 32 of the Master Collective Agreement to provide cool water dispensers for the use of the employees is one without a legal basis and thus invalid. The employer has submitted that the Master Collective Agreement was no longer in force and had in fact expired on 30th June 2012. It would then seem that this miscellaneous application that was in fact filed on 1st August 2012 by the Union, would be two months after the expiry of the Master Collective Agreement. Again the Tribunal should have heard evidence on this through a proper dispute being filed with the PS. 

[22] Since this application intends to address that, without prejudicing the parties, I am proceeding to determine this issue on the face of the documents attached to the Affidavits of both parties. Looking at the history of the Collective Agreement dated 14th December 2005 I find that the employer's submissions is with merits, notwithstanding the letter from the Office of the Registrar of Trade Unions dated 23rd October 2012 signed by MSalvalu. 

[23] Let me start by stating that it was not disputed that the Applicant Union and the Respondent Employer were signatories to a Master Collective Agreement (or "the MCA") governing the terms and conditions of the employment of the unionized employees where the employer had submitted that this arrangement was in place since 1960's. The Employer had further submitted that the Collective Agreement(s) had been subsequently amended and/or replaced by successive agreements, where the last replacement was put in place on 14th December 2005. These facts were not disputed by the Union. This was further confirmed via the Certificate of Registration issued on 2nd January 2006 at the hand and authority of the Office of the Registrar of Trade Unions, being the PS of the Ministry of Labour.

[24] Suffice to say, that the Applicant Union had filed an application that the Respondent Employer was in breach of the Master Collective Agreement dated 14th December 2005, in particular Clause 32 and thus sought Compliance Orders. Before I lay out Clause 32 of MCA, I wish to state that I had observed that the Union in their Submissions filed on 21st November 2012 has alluded to Clause 34 (at paragraph 1.1) and this was not part of the original claim. In that regard I consider this to be a mistake and center my determination entirely on Clause 32 where it states:-

 "32. WATER COOLERS

 The employer agrees to provide cool water dispensers for the use of their employees."

 [25] It was not clear (although not a contested fact) why the parties had sought to vary the Master Collective Agreement by way of a Memorandum of Agreement dated 7th May 2010 but this is not something new under the ERP as per s155 of the ERP. 

[26] As I read the Master Agreement dated 14th December 2005, I find at the centre of the issue as to validity of the MCA is an amendment done to a particular clause in that document. This is the "duration" clause or what would be ordinarily "the period or length" of the Agreement. This has placed the MCA in a position to be tested for two aspects: that is, whether or not the amendment in May 2010 had wholly substituted the terms and conditions of the MCA or did it simply vary one aspect of the MCA keeping it alive even today. The letter dated 23rd October 2012 from the Office of the Registrar of Trade Unions had suggested that Master Collective Agreement has remained valid until it is to be replaced by another through registration by respective parties. I have no evidence (through Affidavits) other than this letter. That said, I am not comfortable nor in agreement with the position laid out there.

[27] If, for the argument sake, the Memorandum of Agreement dated 7th May 2010 had simply varied one aspect of the MCA keeping it alive even today, then the Union will succeed in persuading this Tribunal that the Employer has misconstrued Clause 39 of the Memorandum of Agreement dated 7th May 2010 although they have again quoted me the wrong clause (38) at paragraph 1.4 of their Submissions. So, I start to determine this application first by examining Clause 39 which reads and I quote:-

39. DURATION OF AGREEMENT

This Agreement shall come into force on 1st July 2005 and shall remain in force until 30th June 2006 inclusive and thereafter remain in force until amended or replaced by a successor agreement.

[28] The Respondent Employer had evidently opposed the Application for Compliance Orders and raised issue as to the validity of the Master Collective Agreement as per the amendment through the Memorandum of Agreement dated 7th May 2010 where under Clause 13 therein, the above "Clause 39 of the Master Collective Agreement was deleted and replaced with the following:

This Agreement shall come into force with effect from 1st July 2009 and shall remain in force until 30th June 2011 inclusive and thereafter remain in force until amended or replaced by a successor agreement. (Underlining is my emphasis on the dates)

[29] In any case, Collective Agreements are designed to have its purpose and perpetual succession. In reality, nothing lasts forever and all agreements have their timely functions to serve the purpose it would be drafted for, keeping in mind changes to technology, labour attitude and laws that may influence or necessitate reforms to the document. It was clear that the MCA was amended in May 2010 and new duration was inserted by the parties with a start and end date. Clause 39 which had initially come into force (the start date being 1st July 2005) and which remained in force until 30th June 2006 was subsequently re-worded to give new effect to this Clause in 2010 that appeared to then have a new start date (1st July 2009) and a new end date (30th June 2011). The process of amendment/varying this Clause or its propriety was not at dispute.

[30] Therefore the fundamental question to probe, in essence, is, why go to the lengths of varying the MCA if it was not to have any biding effect and application. The fact that the parties mutually and in good faith had varied or amended the MCA, it was their clear intention to set down a definite period for the MCA in terms the duration of this contract of service between the parties. The ERP also allows for this as the employer has quite aptly pointed out where under sections 160-161 of the ERP it elaborates how it shall be done. For ease of reference I am laying down the entire provisions devoted to Collective Agreement in the ERP:-

Division 3- Collective Agreements

When a collective agreement comes into force and expires

160.—(1) Subject to section 162, a collective agreement comes into force on the date specified in the agreement as the date on which it comes into force or if no such date is specified, the date on which the last party to the agreement or its duly authorized representative, signs the agreement.

(2) A collective agreement may provide that one or more of its provisions come into effect on different dates.

(3) Where a collective agreement provides for an expiry date it expires on the date specified in the agreement.

Continuation of collective agreement after specified expiry date

161. A collective agreement that would otherwise expire as provided in section 160(3) continues in force for a period not exceeding 12 months if the union initiated collective bargaining before the collective agreement expired and for the purpose of replacing the collective agreement.

[31] In this instance "Duration" of the MCA was altered and substituted with a clear end date of 30th June 2011 through the Memorandum of Agreement dated 7th May 2010. When this was done, neither the Union objected nor contested its validity. Under s160 (1) of the ERP "…a collective agreement comes into force on the date specified in the agreement as the date on which it comes into force…" and under s160(3) "…where a collective agreement provides for an expiry date it expires on the date specified in the agreement. Here the language of the statute is literally and naturally clear and so there is absolutely no ambiguity in the interpretation. This is same for s161 of the ERP where an extension to the expired MCA is entitled by virtue of a period not exceeding 12 months. 

[32] In that regard I agree with the Employer that the MCA would have stayed in force up-til 30th June 2012. And not any time after that. The Union pursuant to s156 of the ERP could have initiated a bargaining process for a (new) MCA, especially where there was an expiry date although the duty of good faith does not require a concluded MCA under s150 of the ERP. These provisions itself alludes that the potential for the entire MCA coming to an end after the expiry date (including the 12month extension) as whole document is higher. Further I have to comment that "duration" of any contract of service albeit in the form of MCA is critical component to ensuring its binding effect. If this element being so crucial to the document's longevity or prolonged existence has been mutually altered and substituted with a new effect, then that new effect takes binding prominence over any older or prior interpretation. 

[33] In addition, if both parties have enjoyed and benefited through the amendment in 2010 in terms of say, variation to clauses relating to "wages", "leave allowance", "hours of work" and so forth, which are all very important factors regulating the worker's working conditions, why should this Tribunal treat this change in the Agreement to be of no effect. Or simply concede to the Union's submission that despite its application through the Memorandum of Agreement dated 7th May 2010, the entire MCA was not altered and thus it still remained in force. "Duration" in ordinary meaning is setting down the parameters of start and end date. So, I simply see no logic to agree with the Union's assertion or substitute my own interpretation or views. The MCA has ended on 30th June 2012 after taking into consideration the ERP interpretation for time extension.

Decision and Orders
 
[34] In accordance with the aforesaid, the Tribunal declares and orders that:-

1.	The employer's preliminary issue of law in terms of the MCA in fact and law expiring on 30th June 2012 is with merits and justification. Consequently the oral application of the Employer for determination of this preliminary issue of law is successful.

2.	I also order that the miscellaneous application of the Union is struck out on the basis that it lacks locus standi to bring this claim on the basis of the MCA had expired at the inception of the application. Further I put the Union on caution not to file such applications without first exhausting the dispute or grievance procedures laid out in the ERP. 

3.	Cost is reserved on the basis that the Union is given an opportunity to re-examine its position and utilize dispute procedures in good faith. As I have said above, there is no compulsion on the employer to enter into a new MCA not barring the fact that they must exhaust all their obligations and duties in good faith to secure one. If the Union pursues matters of this nature through any further applications which is clearly disputed, cost against them will be invoked then.

DATED at Suva this 10th day of July 2013.

LEGAL TRIBUNAL