Dr Khurma v University of the South Pacific [2010] FJHC 150; ERCC 12 & 13 of 2009 (9 April 2010)

IN THE EMPLOYMENT RELATIONS COURT AT SUVA

CASE NUMBER: ERCC NO. 12 AND 13 OF 2009

BETWEEN:

DR. UMA KHURMA AND DR. JAGJIT KHURMA
APPLICANTS

AND:

THE UNIVERSITY OF THE SOUTH PACIFIC
RESPONDENT

Appearances: Mr. N. Tofinga, Union Representative, for the Applicants.
Mr. N. Barnes for the Respondent.

Date/Place of Hearing: Monday, 01st February, 2010 at Suva.
Date/Place of Judgment: Friday, 09th April, 2010 at Suva.

Judgment of: The Hon. Acting Justice Anjala Wati.

JUDGMENT OF THE COURT

EMPLOYMENT LAW – COMPLIANCE ORDERS -application made to Employment Court for orders for compliance of employment contract and the provision of the Employment Relations Promulgation-dispute regarding the terms of the contract and the proper notice period pending in the Employment Relations Tribunal-Courts powers to order compliance with employment contract and the provision of the Promulgation discussed-Courts powers to order compliance when dispute pending in the Tribunal discussed-application for compliance orders refused with costs against the applicants.

Legislation:

Employment Relations Promulgation 2007.

Cases Referred To:

Air NZ Ltd. v. NZ Air Line Pilots Association IUOW [1987] NZILR 656.
Wellington District Hotel etc IUOW v. Byfield Stud Co. Ltd. (t/a Angus Inn Motor Hotel) [1988] NZILR 487.

The Application.

1. On the 09th day of December, 2009; the applicants filed an application in the Employment Relations Court hereinafter referred to as the "ERC" seeking the following orders:-
   

a. That the respondent be ordered to comply with the provisions of clause 3 of the applicants contracts and clause 18 of the USP Staff Ordinance (2006) in conjunction with s. 107 (1) (a) of the Employment Relations Promulgation.

b. That the respondent be further ordered to cease and desist from further non compliance of the above-mentioned clauses and provision.

2. Two separate applications were filed in respect of the two applicants. Since both matters raised the same issues and were for the same relief, it was agreed by consent that there be an amalgamated hearing.
   

The Grounds

3. The grounds for and in opposition to the applications are apparent from the affidavits and submissions filed by both parties.
   
4. The following affidavits and submissions were filed:-
   
   1. Affidavit of Dr. Uma Khurma and Dr. Jagjit Khurma filed on the 09th day of December, 2009 in support of the applications.
      
   2. Affidavit in reply by Agnes Kotoisuva filed on behalf of the respondent on the 04th day of January, 2010.
      
   100. Further affidavit in reply by Agnes Kotoisuva filed on behalf of the respondent on the 29th day of January, 2010.
        
   4. Affidavit in response to reply by Dr. Uma Khurma and Dr. Jagjit Khurma, the applicants, filed on the 18th day of January, 2010.
      
   5. Further affidavit in response to reply by Dr. Morgan Tuimaleali’ifano filed on behalf of the applicants on the 01st day of February, 2010.
      
   6. Submission filed by the applicants on the 25th day of January, 2010.
      
   7. Submission in reply filed by the respondent on the 27th day of January, 2010.
      
   8. Submission in response to reply filed by the applicants on the 29th day of January, 2010.
      

The Affidavits In Support

5. The affidavit in support filed by Dr. Uma Khurma states the following:-
   
   1. She joined the University of the South Pacific hereinafter referred to as "USP" in or about September 2002 as Lecturer in the Department of Biology on a three year renewable contract with a legitimate expectation to work till she reached the age of sixty five. She understands that the renewal of her contract would be subject to competent performance on her part. She had a legitimate expectation to have her contract renewed until she turns sixty five provided that she performed her duties competently and responsibly.
      
   2. Since her appointment, she had always been appraised satisfactorily and received increments and has even been promoted. In support of this she annexed a letter from USP addressed to her dated the 31st day of May, 2007 which indicated that her contract was renewed because of her good performance. The renewal was from 6th September, 2008 to 5th September, 2011. The letter also stated that she was to receive single salary increment.
      
   100. On or about 29th November, 2005, she was promoted to Senior Lecturer. In support of this she annexed a letter from USP addressed to her dated the 27th day of May, 2008 in which was stated that she would get an incremental progression to bring her salary to Point 3 of the Senior Lecturers salary scale.
        
   4. That on or about 23rd July 2007, her contract was renewed with effect from 6th September, 2008 to 5th September, 2011. In support of this she annexed a letter from USP addressed to her evidencing that her contract was renewed.
      
   5. On or about 10th February, 2009, when she was on annual leave, she received a letter from USP dated the 30th day of January, 2009 which stated that she would be made redundant on 1st August, 2009. A copy of the letter was annexed to her affidavit.
      
   6. On or about 28th July, 2009, the redundancy date was moved to 31st December, 2009. A letter from USP dated 28th July, 2009 was attached to the affidavit.
      
   7. Her letter of appointment, Staff Ordinance (2006) and Human Resources Policies & Procedures all make up her contract. Clause 2.3 of the Human Resources Policies & Procedures clearly stipulates as follows:-
      

"2.3 The University is committed to minimizing forced redundancies, and this will normally be implemented as the last resort. If the University decides to reduce the number of staff, it will first consider measures such as:-

2.3.1 Reducing members by natural attrition;

2.3.2 Offering part-time employment;

2.3.3 Redeployment;

2.3.4 Transferring or seconding staff, or arranging suitable alternative employment where possible;

2.3.5 Offering voluntary early retirement schemes;

2.3.6 Inviting expressions of interest in voluntary redundancy.

2.3.7 Non-renewal of contract in the event that a position becomes redundant and as a result the jobholder’s contract is not renewed".

8. The respondent is at the very least obligated to grant her natural attrition as well as other existing and applicable benefits. The respondent failed to do this when it advertised a vacant position in Biology on or about September 2009 and shortlisted candidates for their final selection. A copy of the advertisement was annexed to the affidavit.
   
9. The respondent further breached the contract of employment when the criteria utilized to select her for redundancy was not contained in any of the provisions of the Human Resources Policies and Procedures outlined in clauses 2.3 to 3.4.4. The redundancy is also not consistent with s. 107 (1) (a) of the Employment Relations Promulgation 2007 hereinafter referred to as the "ERP".
   
10. Clause 3 of the letter of appointment, clause 18 of the USP’s Staff Ordinance (2006) and s. 107 (1) (a) of the ERP has been breached. An order is therefore sought seeking enforcement of the particular provisions of her employment contract and the ERP.
    
11. An employment dispute was reported to the Permanent Secretary for Labour and Industrial Relations & Employment but it took the Permanent Secretary very long to process the dispute. The dispute was referred to the Mediation Services on 26th November, 2009.
    

50. The first session for mediation of the dispute was scheduled for 11th December, 2009. Her employment with USP will come to an end on the 31st December, 2009 after which she will become an illegal immigrant in this country.
    

6. Dr. Jagjit Khurma also filed an affidavit in support. His affidavit basically repeats what Dr. Uma Khurma had stated in her affidavit except for the following new particulars that applies to him only:-
   
   1. He joined the USP on or about October, 1994 as a Lecturer in the Department of Chemistry on a three year contract. On or about 14th November, 2006 he was promoted to Associate Professor. A letter dated the 10th day of July, 2009 from the USP addressed to him indicates that he would receive an award of one incremental progression effective from 1st January, 2008 which was Point 2 of Associate Professors Salary Scale.
      
   2. On or about 17th April, 2007 his contract was renewed from January, 2008 to December, 2010. Evidence of renewal was annexed to the affidavit.
      
   100. On or about 10th February, 2009, when he was still on annual leave, he received a letter dated the 30th day of January, 2009 which indicated that he would be made redundant on 1st August, 2009. A copy of the letter was annexed to the affidavit.
        
   4. On or about the 3rd day of March, 2009 the redundancy date was moved to December, 2009. A Copy of the letter from the USP was annexed evidencing the shift in the date on which he was to become redundant.
      

Affidavits in Reply

7. There were two affidavits in reply filed by Agnes Kotoisuva, the first stated the following:-
   
   1. The applicants could not hold a legitimate expectation that she would work until the age of 65. The contract of employment was a fixed term contract that explicitly provided for redundancy. Renewal of contract is not automatic. It is subject to satisfactory performance, medical clearance and a renewal of the work permit. It is also subject to conditions that exist at the time of renewal including the economic and organisational circumstances of USP. This is self-evident as the employment contract provided for redundancy.
      
   2. A letter dated 30th January, 2009 was sent out to confirm redundancy. It is not known when the letter was received. The redundancy date was moved to 31st December, 2009 as a result of the discussions and consultations between USP and the applicants.
      
   100. The contract is indeed made up of the letter of appointment and the relevant Staff Ordinance but it is not the 2006 Ordinance.
        
   4. Staff Ordinances are issued pursuant to University Charter, a copy of the Charter was exhibited. The Charter is the founding document by which the USP was created. It created USP, its objects and provided for the making of the rules for the management of the University.
      
   5. Article 13 of the Charter provides for the creation of a Council responsible for management and administration of the revenue and property of the USP. Article 18 provides for the creation of statues by which the USP is governed. Those statues remain in force until such time as they are amended, added to or repealed in accordance with the Charter. Article 19 provides powers to the Council in respect of Ordinances to direct and regulate the University and its authorities and members, including the power to add, amend or repeal Ordinances and Regulations.
      
   6. The letter of offer to Dr. Uma Khurma states that the offer is subject to the provisions of the Charter, Statues and the Staff Ordinance (2006). The power to amend Ordinances is specifically provided for by the Charter and the employment contract is expressly subject to terms and contract of the Charter.
      
   7. The staff Ordinance (2008) repealed the Staff Ordinance (2006); as a result, the applicable Ordinance when the redundancy was given would be the 2008 Ordinance. A copy of the 2008 Ordinance was annexed to the affidavit. The 2008 Ordinance became effective on the 26th May, 2008 and it also repealed the 2006 Ordinance on that date. The contents of the 2008 Ordinance has been complied with in relation to redundancies.
      
   8. The University has applied the relevant measures where applicable from the Human Resources Policies and Practices. Dr. Uma Khurma’s expertise and skills could only be utilised in the Biology Division and not transferrable to other academic and non- academic areas within the USP. Dr. Uma Khurma was given 6 months notice. During this period consultations took place with the applicant and her representatives, the Association of the University of the South Pacific Staff hereinafter referred to as "AUSPS", following which she was offered a contract extension up to 31st December, 2009.
      
   9. The USP is not obliged to grant natural attrition or the other provisions to the applicant. Natural attrition cannot be granted in the manner argued for by the applicants.
      
   10. USP did not fail to follow its own procedures by advertising a vacant position in the Biology Department. Dr. Uma Khurma was not considered for the position because she did not meet the requirements of the position as she did not have the relevant expertise to teach in the areas advertised. The same applies to Dr. Jagjit Khurma.
       
   11. The respondent did not breach the contract of employment by selecting the applicants for redundancy as the contract provided for the same.
       
   50. The USP had to embark on cost cutting measures as a result of severe financial constraints. Redundancies have taken place throughout along with a raft of other cost saving measures. In total, 67 academic and non-academic staff have been made redundant since the process started.
       
   13. The Human Resources Policies and Procedures do not set the selection criteria for redundancy. The selection criterion is dependent upon the circumstances that apply at the time that the redundancies are considered. The circumstances surrounding the applicants’ redundancies were that a decision to cut courses had already been made. A number of courses had unfortunately been cut in the applicants’ department. Number of staff had taken voluntary and early retirement. However the USP also has to have regard to its operational and strategic requirements and the decision to offer voluntary and an early retirement is a discretionary one.
       
   14. The selection criteria that USP followed was that:-
       
       • Council ordered the deletion of 98 non-viable courses in October 2008;
         
       • Faculties confirmed the number of viable courses to be offered in 2009;
         
       • Number of teaching staff required for the confirmed offerings was calculated. Tutor contribution to teaching was also taken into account;
         
       • An analysis of proposed staff workload for 2009 and actual teaching load for 2009 was undertaken to determine the number of staff required.
         

• Based on the above analysis, the number of staff superfluous to the needs of the USP was arrived at. Faculties took into account the University policy on the staffing structure for academic units whereby only 45% of academic staff must be at the Senior Lecturer level and above and of this only 45% must be at Associate Professor level. Dr Uma Khurma is a Senior Lecturer and Dr. Jagjit Khurma is an Associate Professor. In determining the final list of staff to be made redundant, the USP took into account staff with least workload, their relevant areas of expertise and versatility. The selection process was based upon objective criteria and did not involve subjective personal judgments. Ultimately the USP is entitled to adopt a process that leaves it with the staff it believes best fit the USP’s requirements. This does not in any way badly reflect upon the applicants.
  

16. The respondent has not breached s. 107 (1) (a) of the ERP. Section 107 (1) (a) requires that 1 month’s notice of impending redundancies be given. The notice was given in January 2009. The applicants have been granted over 11 months notice of redundancy during which time a lot of discussions have taken place and every effort made to minimise the effect of redundancies.
    
17. The enforcement of the contract provisions is unnecessary. The applicants request must be denied.
    
18. There is no reason to justify an emergency application. On the applicants admission they have had notice of redundancy on the 10th day of February, 2009. There was ample time to submit an application to the Employment Relations Tribunal hereinafter referred to as the "ERT" but the applicants chose to submit an application to the University Visitor. The court must not hold USP from implementing its decision.
    
19. Mediation was unsuccessful. It is the respondent’s view that the applicants have unreasonable and unrealistic expectations.
    

8. The second affidavit of Agnes Kotoisuva states the following:-
   
   1. The 66th Council meeting of USP changed the redundancy notice period from 12 months to 6 months. As a result of the changes in the notice period, the ex-gratia payment was reduced from 6 months to 3 months. The Staff Ordinance (2006) was amended to reflect the changes in the notice period and the ex-gratia payments. The power to implement changes to the redundancy policy was delegated to the Vice Chancellor. This was done because of the difficulties and delays in holding a Council meeting to decide on termination. The USP had accordingly acted and followed the procedures appropriately in making the applicants positions redundant.
      

A copy of the minutes of the 66th meeting of USP Council was attached to the affidavit.

Affidavits in Response to Reply

9. Dr. Uma Khurma’s affidavit in response to reply, apart from reiterating and maintaining the statements in the affidavit in support, states the following:-
   
   1. The Head of School was not consulted on the redundancy decision.
      
   2. The change in redundancy date was not as a result of any discussion and consultation. It was only when the USP realised that there was no one to continue the classes, the Vice Chancellor approved the date of change and accordingly the Human Resources informed her on 28th July, 2009 that the USP required her services at least until the 31st December, 2009.
      
   100. The government has paid its financial contribution in full and the Vice Chancellor had himself advised USP staff that the 5% reduction in staff salaries agreed earlier was not necessary. There is therefore no issue of USP having financial constraint.
        
   4. The notice was in the mailbox when she came from leave on 6th March.
      
   5. Submission was made to the University Visitor because that is USP’s internal process.
      
10. Dr. Jagjit Khurma’s affidavit in response to reply basically repeats what Dr. Uma Khurma had said in her affidavit and in addition repeats what his initial affidavit stated. I do not see a need to reiterate those statements.
    
11. Dr. Morgan also filed an affidavit which states as follows:-
    
    1. That he attended the May 2007 and November 2007 USP Council meeting. No paper marked as C66/4/2 was presented to the Council in its meeting of May and November, 2007.
       
    2. The AUSPS did not at any time enter into an agreement with the University Management to amend and/or vary the USP Staff Ordinance (2006).
       
    100. That no such agreement was registered at the Ministry of Labour.
         
    4. He attended the Councils meeting in May 2008 and October 2008 including the 2007 meetings and at no time was there any paper from Senate to Council recommending the suspension or abolition of any academic and comparable staff from positions in USP.
       
    5. AUSPS did not enter into any agreement with the USP in 2008 for 5 % pay cut to bring USP’s finances to better position and enhance harmonious industrial relations.
       
    6. Part VI of the AUSPS Constitution only empowers the committee to make, vary or rescind the terms and conditions of employment of service of members.
       
    7. As an integral component of performance management system, there is a staff review process for evaluation of staff performance for all academic functions for special review.
       

Applicants Submission

12. The applicants representative Mr. Tofinga submitted as follows:-
    
    1. The Court has jurisdiction under section 220 and 221 of the ERP to hear the application. The decision of the University’s Visitor also indicates that this matter should be determined under the ERP.
       
    2. The contracts are currently in existence. The respondent did not comply with the requirements stipulated in the employment contract which resulted in the applicants seeking an order from the court to declare that the respondent did breach the contracts of employments and that the respondent be refrained from further breaching non-compliance of their employment contract.
       
    100. The contract consists of letters of appointment, the University Charter, the USP’s Staff Ordinance (2006), Human Resources Policies and Procedures and any relevant applicable law, the ERP and FICAC Decree.
         
    4. The Staff Ordinance (2006) specifically states that the Council may terminate the services of staff on grounds of redundancy or of financial exigency necessitating retrenchment of staff whereof the council shall be the sole judge by giving twelve months’ notice in writing and six month’s salary ex-gratia. Council is defined in the same ordinance as the executive governing body of the USP under Article 13 of the Charter and unless the context otherwise requires shall include a Committee or Committees of the Council. The Vice Chancellor and the management team in deciding to make redundant or abolish the positions held by the two applicants have acted outside their established jurisdiction and have usurped the powers of the Council.
       
    5. Section 13 (vii) & (viii) of the 2nd Schedule of the Charter specifically states that only the Council has the powers to create positions and abolish positions upon the recommendation of the Senate.
       
    6. The letter of redundancy states the manner of determination of who was to be made redundant. It states that factors such as least workload, expertise and versatility were taken into account by USP. The same letter states that 6 months notice and an equivalent of three months salary was given to the applicants. The considerations used to make the applicants redundant are inconsistent with the applicants performance for which they got promotions and increments in salary. The applicants’ positions have not been abolished and as such the position holders should not be sent home.
       

Respondents Submission

13. Mr. Barnes on behalf of the respondent submitted as follows:-
    
    1. Under section 220(1) of the ERP, the ERC has jurisdiction to hear and determine appeals conferred upon it under the Promulgation or any other written law. Given the tenor and drafting of the ERP, the ERC is primarily an appellate court. The ERC therefore should be wary of any moves that undermine or render otiose its appellate status.
       
    2. The power to make compliance order is provided for by s. 220(1) (k) of the ERP. The specific power is provided by s. 221 of the ERP. This s. 221 does not allow for compliance against anything else other than the Promulgation, or an order, determination, direction or requirement made or given under the Promulgation by the court.
       
    100. The only part of the application that is actually covered by s.221 is the alleged breach of s.107 (1) (a) of the ERP. Section 107 (1) (a) provides for at least 30 days notice of redundancies. According to all affidavit evidence filed so far, s.107 (1) (a) has been complied with. In respect of this application, the matter could simply stop here. However in light of the legislation and emerging jurisdiction it is worth considering the matter in more detail.
         
    4. The Tribunal has jurisdiction to make orders in respect of employment contracts pursuant to s. 211 (f), which provides that the Tribunal has powers to make a compliance order under section 212. There are differences between the two provisions being s.212 giving powers to the Tribunal to order compliance and s. 221 giving powers to the Court to order compliance. There are different powers and the differences in the provisions are deliberate.
       
    5. The applicants have applied for the compliance order in the wrong court and under the wrong section at least in respect of their complaint that the contract has not been complied with. The application should accordingly be dismissed.
       
    6. The application, if it should be made at all, should have been made before the Tribunal for the following reasons:-
       
       • There is a dispute currently before the Tribunal claiming that the applicants have been unfairly selected for redundancy. Whether the correct notice period was provided is part of that dispute.
         
       • The basis of the application for the compliance order is that the incorrect notice period has been provided and that the respondents did not comply with clause 3 of the applicants contracts.
         
       • There is also a dispute as to the actual terms of the contract that apply. There is a question of contractual construction and interpretation. The applicants allege that the relevant notice period was 12 months and that was not provided. The USP contends that the correct notice period was 6 months and notice in excess of that period has now been provided.
         
       • In Air NZ Ltd. v. Air Line Pilots Association IUOW [1987] NZILR 656 it is said that:-
         

"if the meaning of the provision... is in dispute, the correct meaning must first be ascertained before it is possible to say that any person has not observed or complied with that provision...where the meaning is in dispute the primary procedure for asserting the correct meaning is in the disputes procedure...once the correct meaning is ascertained compliance is to be expected".

7. If ERC makes an order now it may effectively determine the dispute proceedings before the Tribunal. It may effectively declare itself functus if an appeal arises from the proceedings of the Tribunal.
   
8. A compliance order is not a straightforward or simple administrative step that the ERC or ERT can make without first giving detailed consideration to the application and what conditions may be necessary to attach to any subsequent order. The court will have to establish the relevant provision of the contract and determine its meaning which may not be a simple exercise. An order for compliance would be premature where serious matters of interpretation remained to be clarified: NZ Shop Employees IUOW v. Fletcher Merchants Ltd. [1987] NZILR 70. A compliance order should not be used to determine an issue that should be subject to or is subject to other proceeding. A compliance order is not to enforce one party’s version of the obligations.
   
9. This court cannot on the basis of the affidavit evidence determine whether there actually is a breach to order compliance. If the ERC were to hear and determine the issue of breach then there would be duplication of proceedings.
   
10. There may well be other remedies available and without dealing with the whole dispute the ERC cannot be aware of what remedies are appropriate as compliance orders are discretionary.
    
11. The court must consider the effect of a compliance order on third parties. Courses have been cancelled and work reassigned. Any suspension would mean, the applicants may have no work to do and /or the other staff may have inadequate work to do. The USP will have to bear the financial hurdle of additional salaries.
    

50. The right of appeal from a compliance order is only upon leave. The limited right of appeal indicates that it is only in very limited circumstances that the ERC should deal with compliance orders.
    

13. There is no alternative power available to ERC under s. 220 (1) (i) either to order compliance. The powers in s. 220 (1) (i) are necessary powers that the ERC must have when it is exercising its jurisdiction as a Court of original or appellate jurisdiction.
    
14. The claim is about redundancy. If it is found that wrong procedure has been ordered then compensation is the answer, not compliance.
    

Applicants Submission in Reply.

14. The applicants submissions in reply basically repeats initial submissions and further states as follows:-
    
    1. Section 107 (1) (a) of the ERP was not complied with in that 30 day notice was not given to the Permanent Secretary.
       
    2. Section 220 of the ERP gives the ERC wide jurisdiction to adjudicate on a number of issues and not just an appeal.
       

The Determination

15. The applicants have applied for two orders. They are to:-
    
    1. Order the respondent to comply with the provisions of clause 3 of the applicants contracts and clause 18 of the USP Staff Ordinance (2006) in conjunction with s. 107 (1) (a) of the ERP; and
       
    2. Order the respondent to cease and desist from further non compliance of the above-mentioned clauses and provisions of the contracts and Promulgation respectively.
       
16. Let me examine the powers of the ERC to order compliance. In the ERP, there is a specific provision which vests the ERC with powers to order compliance. The power is vested by s. 221 of the ERP, the material part of which reads as follows:-
    

"221 (1) If a person has not observed or complied with –

(a) a provision of this Promulgation; or

(b) an order, determination, direction, or requirement made or given under this Promulgation by the Court,

the Court may, in addition to any other power it may exercise, by order require, in or in conjunction with any proceedings under this Promulgation to which that person is a party, that person to do a specified thing, or to cease a specified activity, for the purpose of preventing further non-observance of or non-compliance with that provision, order, determination, direction, or requirement, and must specify a time within which that order is to be obeyed..."

17. It flows from s. 221 that the ERC has specific powers to order compliance with a provision of ERP or any order, determination, direction, or requirement made or given under the Promulgation in a proceeding before it or in conjunction with any proceeding under the Promulgation. Section 221 envisages concurrent proceedings, so even if a proceeding is in the Tribunal, the ERC has jurisdiction or powers to order compliance.
    
18. It must be noted that the remedy sought is an order for compliance with the contracts of the applicants in conjunction with s.107 of the ERP. The remedy sought is not just for an order to comply with the provision of the ERP. I will therefore have to examine whether the ERC has specific and/or general powers to order compliance with the contract.
    
19. The provision of s. 221 of the ERP is very clear. It does not give the ERC specific powers to order compliance with contracts. I agree with Mr. Barnes that there is a deliberate difference in the specific powers to order compliance provided to the ERC and the ERT.
    
20. The Tribunal’s powers to order compliance is derived from s. 212 of the ERP which reads as follows:-
    

"212 (1) If a person has not 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 mine for emphasis)

21. One may ask that if the ERT, being inferior in hierarchy has powers to order compliance with the employment contract, then why cannot the ERC as a superior court of both original and appellate jurisdiction? It must at the very least have the same powers when exercising its original or appellate jurisdiction? To determine this, I have to in detail examine the jurisdiction of the ERC.
    
22. Section 220 of the ERP outlines the jurisdiction of the ERC.
    

"220 (1) The Employment Relations Court has jurisdiction –

(a) To hear and determine appeals conferred upon it under this Promulgation or any other written law;

(b) To hear and determine offences against this Promulgation;

(c) To hear and determine all actions for recovery of penalties under this Promulgation;

(d) To hear and determine questions of law referred to it by the Tribunal;

(e) To hear and determine matters transferred to it under section 218(2);

(f) To hear and determine applications for leave to have matters transferred to it under section 218(3);

(g) To hear and determine a question connected with an employment contract which arises in the course of proceedings properly brought before it;

(h) To hear and determine an action founded on an employment contract;

(i) Subject to subsection (2) and in proceedings founded on an employment contract to make any order that the Tribunal may make under any written law relating to contracts;

(j) To hear and determine a question connected with construction of this Promulgation or of any other law, being a question that arises in the course of proceedings properly brought before the Court, notwithstanding that the question concerns the meaning of the Promulgation under which the Court is constituted or under which it operates in a particular case;

(k) To order compliance with this Promulgation;

(l) To hear and determine an application for discontinuance of an order in respect of an unlawful strike or lockout under this Promulgation;

(m) To hear and determine proceedings founded in tort relating to this Promulgation; or to exercise other functions and powers as are conferred on it by this or any other written law.

(2) in exercising its jurisdiction under subsection (1) (i) to make an order cancelling or varying an employment contract or a term of an employment contract, the Court must, notwithstanding anything in subsection (1) (h), make an order only if an order should be made and any other remedy would be inappropriate or inadequate...."

23. A careful perusal of s.220 indicates that indeed the ERC as the court of both original and appellate jurisdiction can make those orders which the Tribunal could make and this is provided for in section 220 (1) (i) of the ERP.
    
24. Will it then flow from that, that the ERC consequently has general powers to order compliance of employment contract by virtue of s. 220(1)(i)? The answer is "if the ERC has before it proceedings founded on an employment contract, it can make an order for compliance with the employment contract". However if the ERC does not have before it a proceeding founded on an employment contract then it cannot order compliance with the contract. One must not misread s. 220(1) (i) which very clearly states that the ERC has jurisdiction in proceedings founded on an employment contract to make an order that the Tribunal may make. In essence therefore the ERC must be a court of original or appellate jurisdiction to order compliance of an employment contract.
    
25. One must also look at s. 220(1) (k). It states that the court has powers to order compliance with the Promulgation. This section also indicates that s.220 (1) (i) is not a provision to order compliance with an employment contract unless ERC is a court of original or appellate jurisdiction. Why would the legislature create a provision providing specific powers to ERC to order compliance if s. 220(1) (i) was meant to be a general section giving the ERC powers to order compliance including compliance of an employment contract?
    
26. I agree with Mr. Barnes that s. 220 (1) (i) exists to ensure that the ERC has the relevant powers in relation to compliance orders in relation to employment contracts when it needs them.
    
27. The power provided for in s. 220 (1) (i) has to exist otherwise the ERC cannot properly function when exercising its original and appellate jurisdiction in employment matters.
    
28. It is therefore very clear that the ERC does not have specific powers to order compliance with employment contracts. It however has general powers to order compliance with employment contract if there are proceedings founded on an employment contract before it or in other words if the ERC is a court of original or appellate jurisdiction in matters of employment contract then it has powers to order compliance with the employment contract.
    
29. Although the applicants are not asking for compliance with s. 107 (1) (a) of the ERP alone, let me still examine if there is a breach of s. 107 (1) (a) of the ERP for the Court to order compliance of that section alone.
    
30. S. 107 of the ERP reads as follows:-
    

" 107 (1) if an employer contemplates termination of the Employment by redundancy of workers for reasons of an economic, technological, structural or similar nature, the employer must –

(a) Provide the workers, their representatives and the Permanent Secretary not less than 30 days before carrying out the terminations, with relevant information including the reasons for the terminations contemplated, the number and categories of workers likely to be affected and the period over which the terminations are intended to be carried out; ..."

31. Both the applicants’ affidavits are very clear in that when they came back from leave on 6th March, 2009 they had noticed the letter regarding their redundancy in the mail box. A careful perusal of the letter does indicate that the applicants were informed of the reasons for the redundancy, the number and category of workers that were to be affected and the date on which the employment of the applicants were to be terminated. The letter also indicated that the staff representatives were aware of the situation and that the applicants were informed in the letter that they had the opportunity to consult.
    
32. None of the affidavits state what provision of s. 107 (1) (a) was not complied with. It is only from the applicants reply to the respondent’s submission it is apparent that the Permanent Secretary was not given the 30 days notice. It cannot be established through the affidavits that the Permanent Secretary was not given the relevant information within the relevant time stipulated in s. 107 (1) (a) of the ERP. Where then is an established breach to order compliance?
    
33. If there was non-compliance of the ERP, then the court in its powers will be able to order the respondent to provide the relevant information to the Permanent Secretary. This order would be to comply with a statutory provision. The orders will not in any way assist the applicants to maintain their contract. The compliance order of this nature becomes an administrative order and not a legal remedy order. A legal remedy order would be if I were to order compliance with the contract and consequently order that the redundancy be suspended until such time as proper notice was given. I think the applicants appreciate that an order for compliance with the provision of the Promulgation alone will only be an administrative order, that is why the relief sought is an order that there be compliance with the applicants contracts in conjunction with the provision of the Promulgation and also for an order that the respondent cease or desist from further non compliance with the contracts in conjunction with the ERP provision.
    
34. If I were to order compliance with s.107 (1) (a) of the ERP then I could also order that the respondent must comply with the order within a certain time frame. That was only if I was convinced that the provision of s. 107 (1) (a) of the ERP was not met.
    
35. I will still proceed to determine whether this court should order compliance of the applicants’ contracts, in case I shall be wrong in holding the view that the ERC does not have powers to order compliance with the employment contracts unless it is sitting as a court of original or appellate jurisdiction in proceedings founded on an employment contract.
    
36. The applicants are saying that the basis on which they were made redundant was improper and in breach of the contract of employment, that they were not provided proper notice period, and that part of the terms of the contract is stipulated in the Staff Ordinance (2006) and not the Staff Ordinance (2008). All these are disputed by the respondent. In order to establish whether the applicants are correct in their assertion, the Court has to hear and determine the allegations that the contract provisions have been breached. Once it is established at the hearing that there was breach of contract then the court has to look at the appropriate remedy, whether a compliance order would be made or not.
    
37. The ERC can only determine whether or not there is a breach and what the appropriate remedy is, if the original employment dispute is before the court BUT the matter is pending in the Tribunal and without a determination no court or tribunal has powers to order compliance with the contract. It would otherwise be putting the cart before the horse, providing a remedy to the applicants without first finding out whether they deserve the remedy as such.
    
38. I must cite some very helpful cases provided to me by Mr. Barnes. I express my sincere gratitude to Mr. Barnes for his enormous effort to assist the Court by presenting the most helpful authorities. The case of Air NZ Ltd. v. NZ Air Line Pilots Association IUOW [1987] NZILR 656 was also a case where orders for compliance were sought. Following a judgment concerning the interpretation of the award, the parties gave varying interpretations of that judgment and communicated these to the pilots. In attempting to resolve this difference in interpretation the applicant submitted the dispute to the Aircrew Industries Tribunal. The Tribunal declined to deal with the matter. The applicant applied to the Court for an order that the respondent comply with the clause of the award in dispute. The applicant also applied for an order for the respondent to comply with the disputes procedure contained in the award. The court held that to enforce an obligation, the obligation itself must be clear. Justice Williamson said at page 662, which comments I adapt as material to the matter before me:-
    

" ... 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 obligation is clear the order to comply may flow, but if the obligation itself is unclear there must first be proceedings to define the obligation.

... it seems to me there is a difference between an applicant saying to the Court "enforce the obligation" and another saying "enforce my version of the obligation". It may be that, in cases where the obligation is fairly clear, the court... will define the obligation and issue an enforcing order. The course of action seems inappropriate in a case where the obligation is unclear and seriously in dispute.

In the case presently before me the point in dispute is the nature and extent of the obligation.... without first deciding that point it is hard to see how I can make a finding that there has been a breach of obligation or make a finding defining the status quo. The appropriate procedures for deciding the point are dispute proceeding..."

39. I am not in a position to determine whether there is breach of contract. That is not the subject matter before me; it is before the Tribunal where the applicants have raised all the issues of breach of employment contract. That proceeding has to be heard and determined. If the ERC intervenes now, it will effectively make the proceedings in the ERT futile because the ERC by ordering compliance would have effectively determined the matter without merits.
    
40. There must be co-ordination of proceedings. The issues in the Tribunal have a lot of bearing on whether a compliance order should be issued. The Tribunal, once it makes a determination of the dispute may or may not make compliance orders. An order for compliance is a discretionary remedy and will only be awarded if the circumstances of the case so permit. The ERC cannot intervene now and excite the jurisdiction of the Tribunal.
    
41. Justice Castle in the case of Wellington District Hotel etc IUOW v. Byfield Stud Co. Ltd (t/a Angus Inn Motor Hotel) [1988] NZILR 487 at 492 said that:-
    

"..., the Labour Court has already made it clear on many occasions that compliance orders should not be used to determine an issue that should be subject to, or is subject to other proceedings..."

42. On the basis of the above reasons, the application for an order for compliance with the employment contract and the provision of ERP is hereby declined. There can therefore be no consequential orders.
    
43. There has been basic misunderstanding of court procedures and powers. I have reason to believe that it was incompetency that brought this application to court. The application should not have been filed in the first place in light of the pending dispute in the ERT. There shall therefore be costs against the applicants. I will however grant the parties time to amicably discuss this issue of costs failing which I shall hear the parties on quantum.
    

Final Orders

44. The application for an order for compliance with the employment contract and the provision of the ERP is refused.
    
45. There shall be costs to the respondent to be determined after hearing the parties, if not agreed.
    
46. Orders Accordingly.
    

ANJALA WATI
Acting Judge

9.04.2010