State v Arbitration Tribunal, Ex parte Hussein [2006] FJHC 116; Judicial Review 1 of 2004 (23 February 2006)

IN THE HIGH COURT OF FIJI
AT LABASA
CIVIL JURISDICTION

JUDICIAL REVIEW NO. 1 OF 2004

STATE

v

1. THE ARBITRATION TRIBUNAL
2. CARPENTERS FIJI LIMITED and
BURNS PHILIP (SS) COMPANY LIMITED
3. W.R. CARPENTERS GROUP SALARIED
STAFF ASSOCIATION
Respondents

Ex parte: TAHID HUSSEIN
f/n Hussain Buksh
Applicant

Mr. A. Kohli for the Applicant
Mr. A. Tuilevuka for the 1^st Respondent
Mr. J. Waqaivolavola for the 2^nd Respondent

Date of Judgment: 23 February 2006

JUDGMENT

This is an application for judicial review pursuant to leave granted on 28 April 2004 against the decision of the Arbitration Tribunal (the '1^st Respondent' - the 'Tribunal') dated 25 August 2003.

The applicant Tahid Hussein f/n Hussain Buksh of Korociriciri, Labasa was employed as Assistant Manager with Carpenters Fiji Ltd (the 'second respondent' - the 'employer').

The applicant alleges that his employment was unlawfully terminated on 13 May 2002.

The hearing took place before me at Labasa on 25 May 2005. This is a Labasa matter and because different Judges sat in Labasa High Court each month and sometimes no Judges were available, this case had dragged on for sometime. Various interlocutory orders were made from time to time until it came before me for hearing.

The Court has before it for its consideration the applicant's affidavit in support and the affidavits filed on behalf of the second respondent.

As ordered counsel filed written submissions and they relied on them.

The decision impugned

The Award of the Tribunal is contained in item 9 being Award No. 31/03 in the Tribunal Record of proceedings.

For a clear picture of the Award, I consider that I ought to set out below the Arbitrator's (Mr. J. Semisi's - now Resident Magistrate) Ruling in so far as it is relevant in making the Award. In it the Arbitrator pointed out certain unsatisfactory features of the inquiry by the 1^st Respondent. He said as follows:

In the Tribunal's view there are some aspects of the investigation into the allegations against the grievor that are of concern to this Tribunal, which needs to be highlighted for the Company's future reference and adoption. These are-

(i) To maintain impartially and fairness, an independent senior staff should have been appointed from the Company's Human Resources Department to conduct the necessary investigation. Therefore, whilst it was proper for the Branch Manager to provide a witness statement, it was irregular (being the grievor's immediate superior) to make recommendations relative to penalty. In deciding what penalty to impose, the Assistant General Manager Personnel should be guided by his own assessment, and the investigation report and recommendation of an independent senior officer.

(ii) Surprisingly, all the witness's statement, including the one from the grievor were addressed to the Assistant General Manager Personnel, although he did not personally conduct the necessary investigation. This was done by the Security Officer at the Labasa branch, a fellow employee of the grievor. It is also therefore, not surprising for CW 1 to testify that -

"I don't know the circumstances under which the statements in Exhibit 1 were taken. And I don't know whether grievor was given opportunity to question the witness named in Ex. 1"

(iii) The Company should have conducted a full & proper interview of the grievor (as opposed to a one (1) sentence statement. See page 3 of Ex. 1) with all the requirements of Unilever (supra) complied with. During such an interview, all witnesses statements containing adverse material against the grievor should also be given to him to allow him an opportunity to respond.

(iv) Before the Company decides on the appropriate penalty to be meted out, a grievor must be given an opportunity to mitigate. This requirement was recently pronounced in the F. C. A. case of Yashni Kanl v Central Manufacturing Co. Ltd Civil No. 01/01.

Finally, the Company must be reminded that a disciplinary investigation against an employee must not be treated merely as a perfunctory exercise because the livelihood of the employee is at stake."

After stating as above the Arbitrator comes to the following decision and makes an Award (p7 of Award):

"Therefore, in all the circumstances, whilst this Tribunal is satisfied that the Company has established justification, it was not satisfied with various aspects of the investigation. However, in the exercise of its discretion the Tribunal feels that given the gravity of the grievor's action, reinstatement in this case would be wholly inappropriate. Instead, I direct the Company to pay the grievor three (3) months salary as compensation".

Reliefs sought

The reliefs sought are for an order of certiorari to remove the decision of the Arbitration Tribunal upholding the decision of Carpenters Fiji Ltd in summarily dismissing the applicant from employment, into this Court and that the same be quashed.

Also an Order for determination and declaration that the Tribunal failed to apply the proper test in determining whether Carpenters was fair and reasonable in summarily dismissing Tahid Hussein.

The applicant further seeks the declaration that the Tribunal erred in not holding that summary dismissal was unfair, unreasonable and ultra vires.

Grounds of Review

The grounds of review are that the dismissal was unfair and unreasonable and the decision is ultra vires.

About the applicant

The applicant joined Carpenters Motor Division as a clerk on 29 September 1975 and in 1978 he started work for Morris Hedstrom, another division of Carpenters Fiji Ltd as sales assistant. After several promotions he went up the rank and on 23 January 2001 he was confirmed as assistant manager.

Later added responsibility of a receiving clerk was given him. Then on 8 January 2002 to 21^st January 2002 he became relieving manager.

On 13 May 2002 the Manager Mr. Jack Sada Nand wrote to him summarily dismissing him from employment. In the letter it is stated that 'the investigation into the removal of promotional stocks from Narhari Electrical - 2 wall clocks has been finalized and you have been found not conforming to stipulated company procedures'.

In his affidavit in support of his application the applicant sets out the background leading up to the termination. The procedure adopted by the employer in terminating is subject to comment by the Arbitrator.

On receiving his letter of termination it was handed to the Union by the applicant. The termination letter stated; inter alia, that:

"The investigation into the removal of promotional stocks from Narhari Electrical - 2 wall clocks has been finalized and you have been found not conforming to stipulated company procedures.

You are therefore summarily dismissed instruction notice and the termination of your service is effective from Saturday 11^th May 2002 at close of business when you were suspended from work for the investigation to be carried out. "

The matter finally ended up with the Permanent Arbitrator through the applicant's Union. The Arbitrator made an Award on 25 August 2003 and it is alleged that it was not until mid-October 2003 that it was communicated to the applicant.

Applicant's submission

The learned counsel for the applicant submitted that the first respondent failed to apply the proper test in determining whether Carpenters was fair and reasonable in summarily dismissing the applicant particularly when the investigation was not properly conducted as stated in his submission.

Mr. Kohli referred the court to the case of N.Z. (with exceptions) Food Processing etc IUOW v Unilever New Zealand Ltd [1990] 1 NZILR 35 where the following classic test on 'procedural fairness principle' is enunciated and which the Tribunal also pointed out in his Ruling:

"1. notice to the worker of the specific allegation of misconduct which the employee must answer and of the likely consequences if the allegation is established.

2. an opportunity, which must be a real as opposed to a nominal one, for the employee to attempt to refute the allegation or to explain or mitigate his or her conduct; and

3. an unbiased consideration of the employee's explanation in the sense that consideration must be free from pre-determination and uninfluenced by irrelevant considerations."

Counsel also points out the Tribunal's concern over the unsatisfactory nature of the investigation against the applicant.

His contention is that the Tribunal failed to give opportunity to the grievor to be heard before imposing a sentence.

The applicant he said when given an opportunity to respond to the charges against him, which he denied, he was not given the opportunity to either respond to the report or to address the question of penalty. What materials were taken into account in considering the applicant's service record and history has not been revealed.

Finally, he submitted that the Tribunal failed to give reasons for his decision.

He concludes by saying that the Tribunal failed to apply proper test to determine whether Carpenters was fair and reasonable in summarily dismissing the applicant.

Second Respondent's submission

The learned counsel for Carpenters Fiji Ltd submitted that at the relevant time the applicant was employed as a Receiving Clerk of Labasa MH's Supermarket i.e. around January to May 2002.

After inquiry into the allegation against him to which he responded he was terminated from employment.

On the issues, counsel submitted that the applicant was given the opportunity to be heard and to respond to the allegation before termination.

He said that the Tribunal did not 'exceed its powers, commit an error of law, commit or breach of natural justice or reached a decision which no reasonable tribunal could have reached or abused its powers'.

Counsel raised an issue saying that the delay in filing a motion for judicial review is a ground for dismissing this application for judicial review despite leave having been granted.

I see no merit on this submission.

It was also submitted that it is not for the Court to determine the merits of the decision in a judicial review. He says that this is the very thing that the applicant is asking the Court to do.

Consideration of the grounds for review

I shall now consider the various grounds of review. I have before me affidavits filed by the parties and written submissions made by their counsel which were quite helpful.

This employment dispute was unable to be resolved by the Disputes Committee so it ended up with the Arbitration Tribunal (the 'Tribunal') with the terms of reference: "for settlement over the termination of Mr. Tahid Hussein with effect from 11^th May 2002 which action the Association claims as unjust, unfair, harsh and wrong and amounts to denial of Natural Justice. Therefore, the Association seeks the reinstatement of Mr. Hussein without loss of salary and other benefits from the date of termination".

The hearing before the Tribunal took place on 27 May 2003 when the employer called five witnesses and the grievor/applicant testified.

Thereafter the parties made written submissions which were considered by the Tribunal and an Award was made.

(i) Principles governing judicial review applications

Judicial review is concerned "not with the decision but with decision making process. Unless that restriction on the power of the Court is observed, the Court will, in my view, under the guise of preventing the abuse of power, be itself guilty of usurping power" (Lord Brightman in Chief Constable of the North Wales Police v Evans [1982] UKHL 10; [1982] 1 W.L.R. 1155 at 1173]. Further in that case Lord Hailsham at 1160 commented on the purpose of the remedy under Order 53 as follows which is apt:

"This remedy, vastly increased in extent, and rendered, over a long period in recent years, of infinitely more convenient access than that provided by the old prerogative writs and actions for a declaration, is intended to protect the individual, judicial, quasi-judicial, and, as would originally have been thought when I first practised at the Bar, administrative. It is not intended to take away from those authorities the powers and discretions properly vested in them by law and to substitute the courts as the bodies making the decisions. It is intended to see that the relevant authorities use their powers in a proper manner."

Furthermore, it should be noted and I repeat that in a Judicial review the Court is "not as much concerned with the merits of the decision as with the way in which it was reached" (Evans, supra at 1174). Also, as put by Lord Templeman in Reg. v Inland Revenue Commissioners, Ex parte Preston [1984] UKHL 5; (1985) A. C. 835 at 862:

"Judicial review is available where a decision-making authority exceeds its powers, commits an error of law, commits a breach of natural justice, reaches a decision which no reasonable tribunal could have reached, or abuses its powers."

As was said by the Fiji Court of Appeal in The Permanent Secretary for Public Service Commission and The Permanent Secretary for Education, Women & Culture ex p. Lepani Matea Civil Appeal No. ABU0018 of 1998S at 12 that the Court:

"must not do is to determine the merits of the matter, or substitute its opinion for that of the body concerned upon the merits".

One of the purposes of the judicial review is to ensure that an applicant is given a fair treatment by the decision-making body in question. The judicial review jurisdiction is supervisory in nature. The Court confines itself to the question of legality when reviewing a decision.

Bearing in mind the principles governing judicial review as briefly stated hereabove I shall now deal with the specific grounds of review.

(i) Procedural impropriety and error of law

In the instant case the matter was referred to the Arbitrator. He took evidence, heard witnesses including the applicant and came to a decision as outlined full hereabove.

It is pertinent to note the following extract from the judgment of the Court of Appeal in The Permanent Secretary for Labour and Industrial Relations and The Disputes Committee v Air Pacific Limited and Fiji Aviation Workers' Association (Civil Appeal No. ABU0023 of 2002S):

"There can be no doubt that neither this Court nor the High Court is entitled to substitute its view on the merits for that of the Disputes Committee, that is the body contemplated by Parliament as that required to determine the matter placed before it. Nevertheless it is now equally clear that in carrying out its task the Disputes Committee must operate within the law and comply with the rules of natural justice." (emphasis mine).

The instant case I find is a case of 'procedural irregularity'. This principle includes:

"... failure to observe basic rules of natural justice and failure to act with procedural fairness. The requirements of natural justice go to the procedure adopted by the decision taken and the need to allow each party an opportunity to put his case". (Immigration Law & Practice by Jackson at 19.13).

To start off with the employer was guilty of "procedural impropriety" by the manner in which it conducted the investigation in regard to the complaint against the applicant. This is confirmed by the Arbitrator as well.

To avoid repeating where the employer went wrong in the procedure adopted, it is well set out hereabove in the Arbitrator's Ruling herein.

It all boils to saying that the employer was not fair and reasonable in the procedure it adopted in dismissing the applicant from employment when the applicant's colleagues and superiors took active part in compiling a Report on him without giving him the opportunity of responding to the contents of the Report on matters alleged against him. This is not the way to conduct an inquiry by any stretch of imagination. The Tribunal has also criticised the manner of investigation.

So the procedure was irregular and improper abs initial. It is the supervisory jurisdiction of the Court in a judicial review that now comes into play. It is for this Court to review the procedure by which the decision was reached.

In respect of both the decision of the employer to terminate employment and the decision of the Tribunal that the employer (the Company) 'has established justification' to dismiss are wrong bearing in mind the process adopted by both the bodies.

I find in this case that the process by which they reached the decision are definitely wrong. This entitles the Court to quash them (R v Immigration Appeal Tribunal, ex. p Enwia [1984] 1 W.L.R. 117, 136F).

The powers given to the Tribunal should be lawfully exercised for it has been stated as follows by Lord Mustill in R v Secretary of State for the Home Department, ex. p Fire Brigades Union [1995] UKHL 3; [1995] 2 AC 513, 560H-561A:

"The task of the courts is to ensure that powers are lawfully exercised by those to whom they are entrusted, not to take those powers into their own hands and exercise them afresh. A claim that a decision under challenge was wrong leads nowhere, except in the rare case where it can be characterised as so obviously and grossly wrong as to be irrational, in the lawyers' sense of the word, and hence a symptom that there must have been some failure in the decision-making process".

Further, the following statements are pertinent and should not be lost sight of from the judgment of Lord Lane C.J in Regina v Immigration Appeal Tribunal, ex parte Khan (Mohmud) (1983) 2 W.L.R 759 at 762-3 which is apt:

"Where one gets a decision of a tribunal which either fails to set out the issue which the tribunal is determining either directly or by inference, or fails either directly or by inference to set out the basis upon which they have reached their determination upon that issue, then that is a matter which will be very closely regarded by this court, and in normal circumstances will result in the decision of the tribunal being quashed. The reason is this. A party appearing before a tribunal is entitled to know, either expressly stated by the tribunal or inferentially stated, what it is to which the tribunal is addressing its mind. In some cases it may be perfectly obvious without any express reference to it by the tribunal; in other cases it may not. Secondly, the appellant is entitled to know the basis of fact upon which the conclusion has been reached. Once again in many cases it may be quite obvious without the necessity of expressly stating it, in other cases it may not."

(iii) Denial of natural justice

Not having been given the opportunity to respond to the Report prepared by the employer when he was terminated he was denied 'natural justice'. It has been said that 'procedural fairness and the rules of natural justice embrace similar if not identical concepts of fair and reasonable dealing' (Unilever case supra).

In coming to this conclusion I have borne in mind the following passage from the judgment of Fox J in Hurt Rossall and Others [1982] FCA 188; (1982) 64 F.L.R. 102 at 108 which is pertinent:

"Certainly, what natural justice requires in one case may be quite different from what it requires in another. In Russell v Duke of Norfork [1949] 1 All E.R. 109, at p.118, Tucker L.J. said: "The requirements of natural justice must depend on the circumstances of the case, the nature of the inquiry, the rules under which the tribunal is acting, the subject-matter that is being dealt with, and so forth." Kitto J. stated the situation in an often cited passage in Mobil Oil Australia Pty. v. Federal Commissioner of Taxation [1963] HCA 41; (1963) 113 C.L.R. 475, at p.504: "What the law requires in the discharge of a quasi-judicial function is judicial fairness. This is not a label for any fixed body of rules. What is fair in a given situation depends upon the circumstances."

That there has not been so to say 'fair play' in the process of reaching the decision and there is no doubt when one looks at the 'concept at natural justice' in the light of this concept on the facts and circumstances of this case as enunciated by Lord Morris of Borth-Y-Gest in the House of Lords case of Wiseman v Borneman (1971) A.C. 297 s308-309 when he said:

"My Lords, that the conception of natural justice, should at all stages guide those who discharge judicial functions is not merely an acceptable but an essential part of the philosophy of the law. We often speak of the rules of natural justice. But there is nothing rigid or mechanical about them. What they comprehend has been analysed and described in many authorities. But any analysis must bring into relief rather their spirit and their inspiration than any precision of definition or precision as to application. We do not search for prescriptions which will lay down exactly what must, in various divergent situations, be done. The principles and procedures are to be applied which, in any particular situation or set of circumstances, are right and just and fair. Natural justice, as has been said, is only "fair play in action". Nor do we wait for directions from Parliament. The common law has abundant riches: there may we find what Byles J. called the justice of the common law" (Cooper v Wandsworth Board of Works [1863] EngR 424; (1863) 14 C.B.N.S. 180, 194).

(iv) Is the Tribunal's decision 'unreasonable'

It is contended by counsel for the applicant that the Tribunal's decision is unreasonable.

With all due respect to the Arbitrator I accept this submission of the applicant.

After hearing both sides the Arbitrator criticised the procedure adopted by the employer in terminating the applicant's employment as already stated hereabove.

It is beyond comprehension as to how the Arbitrator came to the conclusion in the face of his own statement that 'whilst the Tribunal is satisfied that the Company has established justification, it was not satisfied with various aspects of the investigation'.

How can the employer prove the accusation when the very people who gave evidence and who have as I see it an axe to grind with the applicant the 'accused'? Arbitrator agrees that he was not satisfied 'with various aspects of the investigation' after the Arbitration hearing on his Ruling.

Under the terms of reference referred to hereabove it was the Arbitrator's function to decide on the applicant's contention that the employer's action in dismissing the applicant was 'unjust, unfair, harsh, and wrong and amounts to denial of natural justice.’

He agrees with the unsatisfactory nature of the investigation herein and yet says that the allegation has been proved by his use of the words 'that the Company has established justification'. How can that be? He should have gone further and stated how and the basis on which he has come to this conclusion.

Reason must be given so as to establish the basis for this part of the decision on the Award. By not doing so it could be that the Arbitrator has adopted a wrong principle or committed an error of law.

Fordham in his book Judicial Review Handbook 3^rd Ed. at p. 789 has stated that:

'unreasonableness (often called "irrationality" and sometimes "perversity") means no more than that the public authority has done something which was not reasonably open to it.'

I find that that is the situation here and when the Arbitrator found 'justification' on the part of the employer despite not being satisfied to the effect that there was no 'fair play' and 'natural justice' on the part of the employer.

This decision of the Arbitrator I must say is fatal to his said Award which is based on his own finding on improper investigation. The discretion was wrongly exercised in law by him in making the Award.

(v) Conclusion

To conclude, for the reasons given hereabove the applicant succeeds in his application for judicial review.

In the circumstances of this case reinstatement would be impracticable because of alleged loss of mutual trust and confidence.

In the Court of Appeal in the Unilever case (supra) in the judgment delivered by Goddard CJ it is stated at p45:

"It is well settled by many judgments of this Court and before it, of the Arbitration Court, that a dismissal which is substantively justified will be vitiated if in the process the minimum standards of fair and reasonable dealing are ignored or neglected."

In the case of the employment relationship as in this case there is no agreed procedure if disciplinary action is contemplated, the law implies a requirement to follow a procedure which is, in the circumstances of a particular case fair and reasonable. I have already stated the minimum requirement to be followed as stated in the Unilever case.

In Unilever it is stated that:

"failure to observe any one of these requirements will generally render the disciplinary action unjustified... What is looked at is substantial fairness and substantial reasonableness according to the standards of a fair-minded but not over-indulgent person".

In all the circumstances of this case, on the evidence before him the Arbitrator could not have concluded that there was 'justification' for dismissal as it is clear that the employer had not discharged the burden of satisfying on the balance of probabilities that it discharged its obligation of procedural fairness in relation to the dismissal. Hence the dismissal was procedurally unfair.

Having found thus it brings the Court to the remedies.

In all the circumstances of this case the question of reinstatement of the employee (the applicant) is impracticable and I agree with the arbitrator in this regard.

The order was made to pay the applicant three month's 'salary as compensation'. I agree that he should be paid compensation as the employee was as I have found deprived of a fully fair hearing by the employer which, if he had been given it, may have affected the outcome. The outcome may have been the issuance of a final warning which would have made his position less secure.

Taking all the matters into account I consider that in view of the applicant's long service, three months' salary as compensation appears on the low side. In the exercise of my discretion I would award him six month's salary as compensation and I order accordingly.

(vi) Order

The applicant therefore succeeds in his application for judicial review and certiorari go to quash the decision of the Tribunal.

It is ordered that Carpenters Fiji Limited (the Respondent) pay to the applicant six (6) months' salary as compensation together with costs in the sum of $400.00 within 21 days.

D. Pathik
JUDGE

At Suva
23 February 2006