State v Permanent Secretary for Labour, Industrial Relations and Productivity, Ex parte Coral Coast (Fiji) Ltd [2004] FJHC 65; HBJ0021.2003 (25 February 2004)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

JUDICIAL REVIEW ACTION NO.: HBJ0021 OF 2003

BETWEEN:

THE STATE

v.

THE PERMANENT SECRETARY FOR LABOUR,
INDUSTRIAL RELATIONS AND PRODUCTIVITY
AND NATIONAL UNION OF HOSPITALITY,
CATERING AND TOURISM INDUSTRIES
EMPLOYEES
RESPONDENTS

EX-PARTE: CORAL COAST (FIJI) LIMITED
APPLICANT

Ms R. Morris for Applicant
Ms T. Vuibau for First Respondent
Mr. K. Qoro for Second Respondent

JUDGMENT

This is an application for judicial review pursuant to leave granted on 1st July 2003 of the decision of the first respondent made on 6th May 2003 granting compulsory recognition of the second respondent by the applicant.

FACTS:

By a letter dated 27th January 2003, the second respondent applied to the applicant for voluntary recognition on the ground it had recruited a substantial number of its employees. The application was made pursuant to Section 3(1) of the Trade Unions (Recognition) Act 1998. On 4th February 2003, the applicant responded that it was looking at the representations made and would respond in due course. On 11th February 2003 the applicant wrote to the union saying that the employees who had initially been persuaded by the union to join it, had reconsidered the matter and have opted to withdraw their application. It also informed the Union that it was unable to grant voluntary recognition to the union. The upshot of the refusal to grant voluntary recognition was that on 14th February 2003, the Union applied to the Permanent Secretary for Labour and Industrial Relations for compulsory recognition of the union by the applicant.

On 17th February 2003 the applicant wrote to the first respondent enclosing letters of withdrawal from Union written by the employees. On 6th May 2003 the first respondent issued a compulsory recognition order.

The applicant is seeking an order of certiorari to quash the decision of the first respondent to order compulsory recognition of the second respondent and a declaration that the first respondent acted unlawfully, unreasonably and without jurisdiction and in breach of the rules of natural justice or unfairly and/or abused his discretion under the Trade Unions (Recognition) Act 1998.

The grounds upon which the applicant sought relief are:

(a) that the first respondent denied the applicant natural justice in that he did not give the applicant the opportunity to make submissions on the second respondent’s application for compulsory recognition before making his decision on 6th May 2003.

(b) that the first respondent abused his discretion under the Trade Unions (Recognition) Act in that he did not take into account all relevant facts and circumstances, and he took into account irrelevant matters and he did not carry out a proper exercise as required under the Act.

(c) That the first respondent failed to give any reasons for his decision when on 6th May 2003 he ordered the compulsory recognition of the second respondent by the applicant.

PROCEDURAL UNFAIRNESS – DENIAL OF OPPORTUNITY TO MAKE SUBMISSIONS:

A person whose interests are going to be adversely affected by a decision must be afforded a fair opportunity to be heard. The legal position was expressed by the Supreme Court in the Permanent Secretary for Public Service Commission & Another v. Lepani Matea – 9 of 1998 as follows:

“There are numerous authorities establishing at common law, that where someone’s livelihood is at stake that person is entitled to a fair opportunity of a hearing unless the relevant legislation has clearly excluded it. There is a presumption that natural justice applies; or, as Lord Reid put in Wiseman v. Borneman (1971) A.C. 298, the courts supplement procedure laid down in legislation if the statutory procedure is insufficient to achieve justice and additional steps would not frustrate the apparent purpose of the legislation.”

The respondent has given the above a very restrictive interpretation by submitting that only in cases where a person’s livelihood is at stake, then opportunity must be given of a hearing.

In Salemi v. Mackellar [1977] HCA 26; (1977) 137 C.L.R. 396 at page 419 Gibbs J. expressed the position as follows:

“The presumption that the principles of natural justice condition the exercise of a statutory power may apply to any statutory power which is apt to affect any interest possessed by an individual whether or not the interest amounts to a legal right or a proprietary or financial interest or relates to reputation. It is not the kind of individual interest but the manner in which it is apt to be affected that is important in determining whether the presumption is attracted.”

So the opportunity to be heard is not only confined to cases where livelihood is at stake but extends beyond to other rights or interests too.

The right to be heard does not mean a right to be heard in person by the decision-maker himself. A fair opportunity can be given by other means for example by asking the affected party to make his submissions in writing, by providing all relevant documents or even the decision-maker sending someone on fact finding exercise. It would all depend on the circumstances of the case and the functions of the particular body or person whose decision is under review..

The Court of Appeal in The Permanent Secretary for Public Service Commission and Another v. Lepani Matea – FCA 16 of 1998 on page 10 said:

“Finally we add that what is fair hearing will depend upon the circumstances of each case; it does not mean that in every case a right of personal appearance must be given.”

I shall now look at the relevant provisions of the Trade Unions (Recognition) Act 1998. It is an act “to provide for the recognition by the employers of registered trade unions and for related matters”. The commencement date for this Act is same as the Constitution Amendment Act 1997. This is not by coincidence but by design as this legislation is an endeavour to promote the rights of workers to join unions to bargain collectively as specified in Clause 33 of the Bills of Rights provisions in the Constitution.

Under Section 3 of the Act, a registered trade union which has mustered membership from more than 50% of the employees and no other union claims to represent other persons, then that union can apply to the employer for voluntary recognition. A copy of the application is sent to the Permanent Secretary. The employer must respond to the application within seven days. If the employer refuses recognition or fails to grant recognition within one month of the application, the Union may apply to the Permanent Secretary for compulsory recognition under Section 8. Section 8 empowers the Permanent Secretary to make a compulsory recognition order after “taking into account all facts and circumstances appearing to be relevant”.

Section 3 imposes strict time frames in which an employer must respond. An employer cannot hold recognition indefinitely. The maximum time he has to respond is one month. These time frames show that matters of recognition are treated with some sense of urgency.

The applicant submits that even though the Act imposes no duty on the Permanent Secretary to personally hear the employer, he is obliged to do so under common law. Before the Permanent Secretary made the order he had before him, copy of Union’s letter dated 27th January 2003 which sought voluntary recognition from the employer, he had copy of employer’s letter dated 4th February 2003, copy of Union’s letter dated 5th February 2003 complaining that the applicant was trying to influence same employees and to compel them to resign; the employers response dated 11th February 2003 to above letters by the Union in which he refused voluntary recognition. This letter said that the majority of Castaway staff wish to withdraw from the Union; copy of letter dated 20th February 2003 written after some allegations were made by the Union in a newspaper alleging that the employer was using his cronies to get staff to withdraw from the Union. He also had a report before him from the Divisional Labour Officer Western enclosing list of employees from employers wages record and list of employees who had joined the union. The employer on 17th February 2003 had sent signed withdrawal letters from individual employees to the Permanent Secretary – annexure GS22 to affidavit of Geoffrey Shaw dated 5th November 2003.

The Permanent Secretary had before him the relevant material from both the Union and the employer on which to base his decision. He had arguments of parties contained in the correspondent. One cannot expect the Permanent Secretary to interview each and every worker. It would be time consuming and cumbersome. The Permanent Secretary can delegate that type of work. The parties had taken an active approach in writing letters and making representations.

I am of the considered view that given the nature of the case, there was no need for the Permanent Secretary to grant personal conferences to the parties. They would not have been able to add anything significant to the material that was already before the Permanent Secretary. The applicant had been afforded a reasonable opportunity of presenting his case so this ground fails.

NEED TO GIVE REASONS:

The applicant submits that even though the Act does not expressly require the Permanent Secretary to give reasons for his decision, he ought to give reasons because his decision is subject to review and secondly the consequences of a Compulsory Recognition Order is that the employer is permanently bound by such an order as the Act provides no avenue for its revocation.

The law on the need to give reasons is expressed by the Court of appeal at page 21 in The Permanent Secretary for Labour and Industrial Relations and the Disputes Committee v. Air Pacific Limited and Fiji Aviation Workers’ Association – FCA 22 of 2002 as follows:

“The question of whether or not failure to give reasons will invalidate a decision is dependent on circumstances and to some extent on the nature of the deciding body whose decision is under consideration. The nature and effect of the decision is also relevant. Decisions subject to appeal are those where reasons will almost always be required, as in their absence the appellate authority will be quite unable to assess the validity of the decision under appeal. On the other hand failure to offer reasons for a decision will not necessarily affect the decision of a body where the relevant legislation does not provide an appeal and where the nature of the dispute is such that no reconsideration or review is to be expected.”

The Act itself imposes no duty on the Permanent Secretary to give reasons for his decision. The Permanent Secretary in the Compulsory Recognition Order says that he has taken into account all facts and circumstances which to him appeared relevant. He has a discretion under Section 8 to either grant Compulsory Recognition Order or not. The Permanent Secretary is delegated with the duty to deal with all applications for Compulsory Recognition Order. As such he would be quite familiar with the process and the factors relevant to take into account and one can presume that given his post and experience he would arrive at a reasonable conclusion. He has explained in his affidavit in paragraphs 15 and 21 on some of the factors he took into account.

The effect of Compulsory Recognition Order is that as from that date the union is entitled to do collective bargaining on behalf of its members as to terms and conditions of employment. The effect of the order therefore is that instead of the employer negotiating terms and conditions with individual employees and thereby wasting time, it can be done together in respect of all union members. The union is not empowered to do anything else. It cannot interfere with day to day running of the resort. Recognition of union is no financial burden to the resort.

I do not consider that an employer is permanently bound to recognize a union despite change of circumstances where eligible membership falls below 50%. The scheme of legislation is such that a union with more than 50% majority has to seek recognition from employer first. It cannot go straight to the Permanent Secretary without referring matter first to the employer. Section 10 is not confined to cases where there has been a voluntary recognition. If it was confined to cases of voluntary recognition only, then the opening words of Section 10 would be “which has been granted voluntary recognition” and not “entitled to voluntary recognition”.

There is no logic in differentiating between a voluntary recognized union and one under compulsory recognition when it comes to an application under Section 10. It is purely a question of membership falling below a certain percentage. An employer who has been ordered under a Compulsory Recognition Order to recognize a union is entitled to apply under Section 10 of the Act. There is no question of being permanently locked to recognize a union once its membership falls below a certain percentage.

Therefore there being no statutory requirement to give reasons, that the person granting compulsory recognition would be familiar with the provisions of the Act and factors to look at, that the compulsory recognition order does not impinge on finances of the employer or its day to day administration suggest that failure to give reasons is not fatal to the decision. Accordingly this ground fails.

UNREASONABLENESS:

The applicant submits that the Permanent Secretary failed to consider that the Union had obtained signatures of employees by improperly obtaining employment details and that subsequently most had withdrawn their application for membership. It says that complaints by Union that the applicant was exercising undue influence on workers were on investigation had not been confirmed.

It submits the Permanent Secretary failed to consider the reasons for the employer refusing to give the Union voluntary recognition. The central reason the applicant is insisting upon is that the staff had withdrawn. The Permanent Secretary would need to be satisfied that the withdrawal was voluntary and devoid of any influences. He had to form his own considered view of this matter. If the Permanent Secretary felt that the withdrawal was not voluntary, he could have come to the conclusion he did that is to grant recognition. To this end annexure 3 the job security circular is important. One wonders what was the need for this. Geoffery Shaw could easily have told whoever approached him that his job was secure instead of writing a general circular. Secondly why would the issue of job security arise suddenly so soon after Union came into picture? The Union would not be the cause to give such concern. Annexure GS10 contains 43 identical withdrawal forms. It is a mass withdrawal by employees on what appears to be a preprinted computer generated form all on same font and size. It would be height of naivety on part of the Permanent Secretary to believe that all forty-three employees would write identical letters with identical font to Geoffrey Shaw. He might conclude that the unseen hand of Geoffrey Shaw was probably at work here.

The Permanent Secretary had a discretion to grant Compulsory Recognition Order or refuse it. He had to make a choice. Simply because one disagrees with the conclusion reached by the Permanent Secretary does not make his decision unreasonable or that he took irrelevant matters into account. As Lord Diplock said in Secretary of State for Education and Science v. Tameside Metropolitan Borough [1976] UKHL 6; 1976 3 ALL E.R. 665 at 695f:

“The very concept of administrative discretion involves a right to choose between more than one possible course of action upon which there is room for reasonable people to hold differing opinions as to which is to be preferred.”

The decision made was not one which was so wrong that no reasonable person could sensibly take that view or so “outrageous in its defiance of logic in that no sensible person who applied their mind to the question to be decided could have arrived at it” – Council of Civil Service Unions v. Minister for Civil Service – 1985 A.C. 374, at 410.

The papers before me do not suggest to me that the Permanent Secretary’s decision was absurd or outrageous and that he erred in the exercise of his discretion under section 8 of the Trade Unions (Recognition) Act. There are no grounds for me to interfere with that decision. The motion for Judicial Review fails and is dismissed.

[ Jiten Singh ]
JUDGE

At Suva
25th February 2004