Native Land Trust Board Employees Association v Native Land Trust Board [1998] FJHC 73; Hbc0203r.98s (22 May 1998)

Fiji Islands - Native Land Trust Board Employees Association v Native Land Trust Board - Pacific Law Materials

IN THE HIGH COURT OF FIJI

AT SUVA

CIVIL JURISDICTION

CIVIL ACTION NO. 0203 OF 1998

BETWEEN:

THE NATIVE LAND TRUST BOARD
EMPLOYEES ASSOCIATION
Plaintiff

AND:

THE NATIVE LAND TRUSRD
Defendant

. J.K.L. Maharaj araj fraj for the Plaintiff
Mr. E. Leung for the Defendant

REASONS FOR DECISION

On the 8th of May this Court dismissed an application by the plaintiff Association seeking an injunction to restrain the defendant Board '... from implementing its decision on enforcing redundancies on its employees as contained in the structural reorganisation report prepared by the accounting firm of Coopers & Lybrand'. On that occasion the Court intimated that it would give reasons for its decision which I now do.

The defendant Board is set up in terms of Section 3 of the Native Lands Trust Act (Cap. 134) ('The Act') and charged with the control and administration of all native land 'for the benefit of the Fijian owners'.

Pursuant to Section 30 of the Act the defendant Board is authorised to appoint:

'A Manager, a Secretary and such other officers, inspectors, clerks and servants as may be necessary to carry out the provisions of this Act. The Manager shall be the senior executive officer of the Board and shall be responsible to the Board for carrying out of the Board's policy and instructions.'

In the context of this case I emphasise the word 'necessary'.

Then Section 31 provides that:

'The cost of the administration of the Act shall be paid out of the funds of the Board.'

In this latter regard Section 14 further provides for the 'deduction of such amount as the Board may from time to time determine not exceeding 25 percent of (all monies collected by the Board), which shall be payable to the Board as and for the expenses of collection and administration, and the balance thereof (after deduction of various sums) shall be distributed in the manner prescribed' by Regulation 11 of the Native Lands Trust (Leases and Licences) Regulations'.

Quite plainly, according to the above formula, the greater the costs of administration, the less remains for distribution to the native land owners. Between 1991 and 1996 it is undisputed that, the defendant Board operated 'in a situation of consistent deficit before receipt of annual grants from government'.

By an Internal Memorandum dated 29.1.98 the General Manager of the defendant Board advised its Division and Departmental Heads:

'... that a process of re-engineering is essential to enable the Board to position itself to meet the challenges ahead. This exercise is not unique to the NLTB alone but a global trend in Organisation including Governments to retain the confidence of Stakeholders.'

In order to facilitate the envisaged 're-engineering' a study was commissioned from the international accounting firm of Messrs. Coopers & Lybrand. The 'final report' for the organisational restructuring of the defendant Board was presented at a meeting of the Board on 25.3.98 and was 'unanimously accepted'.

Principal amongst the report's' recommendations was an organisational restructuring of the defendant Board which entailed the reduction of its existing staffing levels by one hundred and twenty one (121) employees all of whom are members of the plaintiff Association.

In this latter regard the President of the plaintiff Association deposes in his affidavit in support of the injunction application:

"... that the recommendation for the creation of such redundancies as advocated for in the said report is adverse to the legal rights and expectation of the said Union in relation to its members and those earmarked for the proposed redundancies and moreover, the contents thereof in relation to the proposed redundancies are adversely impacting on the contractual and other rights of the said Union has for the protection of the employment rights and opportunities of its workers."

What those 'legal rights and expectations of the said Union' are? is later amplified in the affidavit where the President deposes:

"... the said Union has a collective agreement in force between itself and the defendant in which redundancy contingencies are covered by Clause 8.08 to 8.10 but there has never been a provision dealing with mass redundancies as now being envisaged by the defendant ..."

The President of the plaintiff Association further deposes to his beliefs:

"that the said report undermines the existence of the current redundancy provisions in the said current agreement and it further impinges on and undermines the effectiveness of the draft redundancy provisions due to come up for discussion ..."

and further:

"... that the implementation of the redundancy provision by the defendant is an unlawful interference with the common law employment rights of the said union members ... and ... contrary to the principles of natural justice in that it is unfair on those who can least afford to cushion such redundancies."

Clause 8.08 of the Collective Agreement reads:

"Where it is proposed to declare an employee redundant the Board shall inform the Association not less than 6 months before the date on which the redundancy is to take effect."

and Clause 8.09 provides that:

"an employee declared redundant shall be entitled to at least 6 months notice thereof or cash in lieu together with the benefits and subject to the obligations referred to in Clauses 8.02, 8.03 and 8.04, and cash in lieu of long service leave on a pro-rata basis provided that the latter applies to an employee who has had at least 5 years employment with the Board."

I accept at once that the relevant Collective Agreement makes no express provision for 'mass redundancies', as such, but equally, as counsel for the defendant Board submits, the redundancy clause is not expressly 'confined or restricted in any way, shape, or form' and therefore, may be applied to any number of employees. In other words, a 'mass redundancy' is simply a convenient description for a large number of individual redundancies.

I should here point out that in this case I am not dealing with a Collective Agreement similar to that which was considered by Lyons J. in F.P.S.A. v. P.A.F. Lautoka Civil Action No. 386 of 1997 or by Pathik J. in Housing Employees Association v. Housing Authority Suva Judicial Review No. 13 of 1997 where it was encumbent on the employer to discuss and/or negotiate with the representative Association, the question of creating redundancies and/or a redundancy package. Here, redundancy was expressly provided for.

Furthermore in the PAF case Lyons J. was dealing not with redundancy but voluntary severance albeit in the context of an organisation's restructure. In the Housing Authority case Pathik J. was faced with a disputed redundancy package unilaterally imposed by the employer as a result also, of an organisational restructure and, before the agreed procedures for resolving disputes and grievances had been exhausted.

Be that as it may the uncontroverted evidence before the Court is that a proposed plan for the reorganisation of the defendant Board has been approved and, amongst others, recommends a reduction in the staff of the defendant Board spread over 2 years.

However, no redundancy notice has been served on any employee of the defendant Board pursuant to Clause 8.09 of the Collective Agreement, and an authorised 'Press Release' of the defendant Board subsequent to the acceptance of the 'final report', stresses:

"... that any NLTB employee affected by the restructuring would receive a fair and appropriate compensation."

It appears therefore, that the plaintiff Association's concerns are either too late, as to whether or not the defendant Board can or should be restructured, or premature, as to the terms of any redundancy package yet to be negotiated with and agreed by the defendant Board.

Even if it could be argued (as did plaintiff's counsel) that the very question of whether or not to restructure the defendant Board was still a 'live issue' for the determination of the Court (upon which I have serious doubts), I am more than satisfied from the correspondence, that wide consultations occurred with interested parties before the 'final report' was submitted or, at least, reasonable opportunities were provided to both the plaintiff Association as well as individual employees (albeit through their Division or Departmental Heads) to air their views and concerns on the proposed restructuring.

Furthermore Clause 1.05 of the Collective Agreement between the defendant Board and the plaintiff Association clearly and expressly acknowledges:

"... that all the rights, powers, authority and customary functions of Management are vested in the Board ... (and) include the right in the Board's discretion:

to plan, direct, organise and control the operation of the Board and to determine the size of the workforce provided that no action shall be inconsistent with the terms of this agreement."

Quite plainly the proposed restructuring or reorganisation of the defendant Board was undertaken within its statutory powers and functions as well as the Board's agreed 'rights' and, in the absence of any apparent 'inconsistency with the terms of the Collective Agreement', and certainly none was brought to the court's attention, no triable issue can be said to arise therefrom.

Counsel for the plaintiff Association then sought orally to raise alleged breaches of the Public Enterprises Act 35 of 1996 by the defendant Board in its proposed restructure. No particular provisions of the Act were drawn to the court's attention nor was any mention made of the Act in the plaintiff Association's Statement of Claim other than an oblique reference to it in the relief claimed. Indeed so unprepared was Counsel that no copy of the Act was produced during his entire submissions.

Be that as it may, I have taken the trouble to briefly examine the provisions of the Act and the first striking feature is that before the Act can begin to apply to the defendant Board it would have to be first gazetted as a 'Re-organisation Enterprise' and/or a 'Commercial Statutory Authority'. No such gazette notice has been produced. Secondly, and in an almost complete rebuttal of plaintiff counsel's submissions, the Act expressly provides that a 'key principle' of public enterprise reform:

"... is to increase the operational efficiency of public enterprises and to improve the allocative efficiency of resources between public enterprises and other sectors of the economy."

Needless to say the restructuring 'Terms of Reference' provided to Messrs. Coopers & Lybrand and the other internal correspondence and 'Press Release' of the defendant Board relating thereto, leaves me with not the slightest doubt that the dual motivations for the defendant Board's restructuring was its desire '... to be self-financing by the year 2001' and, to provide to landowners an increased income and improved levels of service, '... through the introduction of more modern business procedures and systems, together with a reduction in the overall number of employees undertaking redundant and unnecessary activities.'

There is not the slightest merit in counsel's submission that the defendant Board's restructuring exercise was either ultra vires the provisions of the Public Enterprises Act or is, in some unidentified manner, contrary to government's policy in that regard. Indeed if I may say so, it is quite the opposite.

For the foregoing reasons the plaintiff Association's application was dismissed.

D.V. Fatiaki
JUDGE

At Suva,
22nd May, 1998.

Hbc0203r.98s