State v Air Pacific Ltd ex parte, Permanent Secretary for Labour Industrial Relations and Employment [2011] FJHC 303; HBJ01.2009 (26 May 2011)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

JUDICIAL REVIEW NO. HBJ 01 OF 2009

THE STATE-v-AIR PACIFIC LIMITED
Applicant

EX-PARTE:

THE PERMANENT SECRETARY FOR LABOUR
INDUSTRIAL RELATIONS AND EMPLOYMENT
Respondent

AND:

FIJI AIRLINES PILOTS ASSOCIATION
Interested Party

Mr P Knight for the Applicant
Ms S Daunabuna for the Respondent
Mr R P Singh for the Interested Party

JUDGMENT

By Notice dated 31 August 2010 the Applicant moved for Judicial Review of the Respondent's decisions dated 7 October 2008 to accept the report of a dispute received from the Interested Party and to refer the same to the Employment Relations Tribunal as an employment dispute. Leave to apply for judicial review had been granted on 16 August 2010 by Wickramasinghe J.

In the Notice the Applicant sought an order for certiorari to remove into this Court and quash the decision. The Applicant also sought declarations that the decision was invalid, void and of no effect and that the decision was incorrectly arrived at.

The grounds upon which the orders were sought may be summarized. First, it was alleged that the Interested Party had failed to provide the Applicant with an opportunity to respond to the report contrary to section 169 (3) of the Employment Relations Promulgation 2007 (the Promulgation) and the rules of natural justice. Secondly, it was alleged that the Respondent had erred in law by accepting the report as the report of an employment dispute when there was no dispute as defined in the Promulgation. Thirdly, it was alleged that the Respondent had erred in law by referring the Dispute to the Employment Relations Tribunal (The Tribunal) when the requirements of section 170 (4) of the Promulgation were not satisfied. Finally, it was alleged that the Respondent failed to consider that (a) the Dispute was not related to workers as defined in the Promulgation, (b) the Dispute was not related to a condition of labour, (c) the Dispute was related purely to the terms of a loan, (d) the Dispute was not a matter over which the Respondent had any jurisdiction and (e) the Dispute was not related to the interpretation, application or operation of an employment contract.

These were the same grounds upon which the Applicant had been granted leave to apply for judicial review.

The decisions under challenge were set out in a letter dated 7 October 2008 from the Respondent addressed to the Interested Party's General Secretary with a cc copy addressed to the Applicant's Chief Executive Officer. Omitting formal and irrelevant parts, the letter stated:

"I refer to your letter dated 27 July 2008 reporting the existence of a dispute between your union and the Air Pacific Limited. I have noted that the dispute is over the interpretation, application and operation of an employment contract and on the validity of an employment bond document that the employer requires pilots employed by it to enter into at or about the commencement of their employment. The union views that said bond document as:

(i) Non-compliant with clauses 12 and/or 6.2 of the collective agreement between the employer and the union;
(ii) Invalid by virtue of the operation of clause 3.1 and/or 6.2 of the collective agreement;
(iii) Harsh and oppressive;
(iv) Otherwise null and void.

The union seeks declarations in terms of (i) to (iv) above and/or such other relief as deemed appropriate.

Therefore in terms of section 170(2) (a) of the Employment Relations Promulgation, I have accepted the report of the Employment Dispute and in terms of Section 170 (4) (a) have referred the dispute to the Employment Relations Tribunal."

The dispute had been reported to the Permanent Secretary by way of a three page document dated 23 July 2008 (the Report). The report is set out in Form 5 (ER) as required by Regulation 12(1) of the Employment Relations (Administration) Regulations 2008 (the Regulations). The report stated the name of the union, the names of the workers involved who were described as union members employed as pilots and the name of the employer. The details of the dispute were then stated in the same wording as in the Respondent's letter dated 7 October 2008.

On the second page of the Report the following appears:

"I declare that all internal procedures for settling disputes, as applicable, have been exhausted in accordance with section 168 and Schedule 6 of the Employment Relations Promulgation 2007."

The third page of the Report contains additional material under the heading "Further Statement in Support of Dispute." It is appropriate to quote all the material that is provided by the Interested Party on this page of the report.

"1 The bond document that is the subject of this dispute is typically enforced upon pilots recruited for employment as Second Officers on aircraft type B767 and B747 in the employer's aircraft fleet. (Annexure A).

2 Annexure B to the collective agreement is the agreed pro-forma of the pilots' training bond document to be executed in such circumstances between the employer and the pilot (Annexure B)

3 The document in dispute is a variation of the agreed format imposed by the employer without consultation or agreement with the Union.

4 The dispute was raised in various correspondence with the employer (copies attached as Annexure C).

5 Discussions were held between the employer and the union pursuant to the grievance procedure.

6 After exhausting the grievance procedures the Union advised the employer of its intention to report a dispute on 3 April 2008 (Annexure D)."

This statement was also signed by the Interested Party's General Secretary and dated 23 July 2008. It was not disputed that this page formed part of the report of the dispute received on or about 23 July 2008. A copy of Annexures A and B were exhibited in affidavits subsequently filed in the proceedings. Neither Annexure C nor Annexure D were made available to the Court. It was however not disputed that the Annexures were attached to the report.

The procedure for reporting a dispute to the Respondent is set out in section 169 of the Promulgation. Section 169 is in Part 17 of the Promulgation which is concerned generally with Employment Disputes. It is necessary to have regard to the two sections that precede section 169. Section 167 states:

"The object of this part is to set out procedures for the resolution of employment disputes."

Section 168 then provides:

"(1) An employment contract must contain procedures for setting disputes.

(2) The procedures required by subsection (1) must be:

• (a) agreed procedures that are not inconsistent with the requirements of this Part; or
• (b) if there are no agreed procedures, the procedures set out in Schedule 6.
  

(3) _ _ _."

It is clear that the parties to a dispute should first of all avail themselves of the dispute resolution procedures that are either agreed upon or contained in Schedule 6. Underpinning this requirement is the obligation to attempt to settle the dispute in good faith (see Regulation 12(2)).

If the parties are not able to settle the dispute through the procedures agreed upon or prescribed by Schedule 6, then section 169 may be utilized. Section 169 states:

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

(a) an employer who is a party to the dispute, or;
(b) a registered trade union that is a party to the dispute.
(2) A report of a dispute must be made in writing and in a prescribed manner.
(3) The party reporting a dispute must, within 3 days, provide a copy of the report of the dispute to each party to the dispute."

It appears not to be in dispute that the report was in writing and in the manner prescribed by Regulation 12 of the Regulations. More importantly, it was not disputed that a copy of the report dated 23 July 2008 had not been provided to the Applicant. The Interested party was in breach of the mandatory requirement that is specified in section 169 (3). This is the basis of the first ground relied upon by the Applicant.

It is claimed that the failure to provide a copy of the report to the Applicant or to put it more technically, the failure to give notice, deprived the Applicant of an opportunity to respond to the report. It is implied that the Applicant was deprived of an opportunity to make a submission to the Respondent before he made a decision whether to accept the report pursuant to section 170(1) of the Promulgation. Section 170 (1) and (2) are relevant to the present issue:

"(1) The Permanent Secretary has the power to accept or reject a dispute reported to him or her under section 169 within 30 days from the date of receiving the report of dispute.

(2) The Permanent Secretary must:

(a) inform the parties that he or she accepts or rejects the dispute; and

(b) give reasons for rejecting a dispute."

Although the Respondent's decision was made after 30 days, that issue was not raised before me. The obligation is on the Interested Party to provide the Applicant with a copy of the Report within three days. The admitted failure of the Interested Party to comply with section 169(3) is by itself of no concern to this Court. In passing it is noted that the Interested Party could have found itself subject to proceedings under section 252 (1) of the Promulgation.

The failure to give notice, however, does give rise to the question as to why is notice required to be given to the Applicant. Counsel for the Applicant submitted with considerable force that the reason for the requirement to give notice to an employer by way of a copy of the report was to enable the Applicant to provide a written response to the issues raised in the report. Counsel submitted that this would then enable the Respondent to make a decision whether the report should be accepted or rejected.

Whilst that submission has merit, it is not the issue in these proceedings. The issue that arises is what the Respondent must consider before he makes a decision to accept or reject the report of a dispute.

It should be noted that there is no requirement stated in the Promulgation that the Applicant is required to respond to the report within a specified time or at all. There is no obligation on the part of the Respondent to inform the Applicant that he is required to respond to the report within 30 days or at all.

The first matter that the Respondent must consider is whether the report is in the prescribed form. The second matter that the Respondent is required to determine is whether the report of the dispute has been made within six months of the date on which the dispute arose as is required by section 170 (6) of the Promulgation. The third matter which the Respondent must consider is set out in Regulation 13(2) of the Regulations which states:

"In exercising his or her powers under this regulation, the Permanent Secretary must be satisfied that the parties to the dispute have taken all reasonable means to exhaust the procedures for settlement of disputes under section 168 of the Promulgation and have engaged in good faith in attempting to resolve the dispute."

Fourthly as a result of the obligation imposed on the Interested Party under section 169(3) the Respondent needs to be satisfied that a copy of the Report has been served on the Applicant. It should be noted that the procedure for serving notices is prescribed by Regulations 54 of the Regulations. However there is no procedure prescribed for establishing proof of service of the report.

Finally, as a matter of fairness, the Permanent Secretary should consider any submission received within 30 days before he makes a decision. In my judgment these are the matters that the Respondent was required to consider before making a decision to accept or reject the report of the dispute that had been forwarded to him by the Interested Party.

One of the matters was to ensure that the Applicant had been served with a copy of the report. The failure of the Interested Party to comply with section 169(3) does not of itself impugn the Respondent's decision. What needs to be examined is whether the Respondent has complied with his obligation under section 170 (1) of the Promulgation.

The answer to that question can be found in a letter dated 30 July 2008 addressed to the Applicant's Chief Executive Officer from the Office of the Permanent Secretary. The letter stated:

"Dear Sir

Re: Report of Employment Dispute – Fiji Airline Pilots Association –v- Air Pacific Limited.

Interpretation, Application and Operation of an Employment Contract

The Transport Workers Union has reported an Employment Dispute against the Air Pacific Limited on the subject above. As the Employer in this regard we await your response, within the next 5 days, on whether or not you have been served with a copy of the Employment Dispute, as required under subsection 3 of section 169 of the Employment Relations Promulgation 2007."

This letter was marked as exhibit MS1 and annexed as such to the affidavit of Michelle Solvalu sworn on 14 July 2009. In an answering affidavit sworn by Josephine Yee Joy on 31 July 2009 on behalf of the Applicant, receipt of the letter is not disputed. There was no material before the Court to indicate that the Applicant had replied to the letter from the Respondent. Somewhat belatedly the deponent stated in her affidavit that the Applicant was not provided with a copy of the report of the dispute.

It is apparent that the Applicant had been put on notice by the Respondent himself that he had received a report of a dispute from the Interested Party. For reasons which were not disclosed in the material before the Court, the Applicant chose to disregard the letter and did not reply. All the Applicant had to do was to reply by letter within the time requested stating that a copy of the report had not been served. Having been put on notice the Applicant chose to do nothing. The Applicant cannot now complain when it had been given the opportunity to pursue the existence and then the substance of the report of the dispute. Clearly the Respondent had made the necessary inquiry to determine whether the Applicant had been served with a copy of the report.

The Applicant claims that the Respondent erred in law by concluding that there was a dispute between the parties. It is sufficient to say that, even if it is a part of the Respondent's function to determine whether all of the elements contained in the definition of "dispute" are present, there was on the material set out in the report sufficient grounds for the Respondent to conclude that a dispute as defined had been reported. Having given the Applicant notice of the existence of the report and having received no response, the Respondent was entitled to proceed on the material contained in the report. On its face, the report satisfied the matters which the Respondent was required to consider when exercising the discretionary function given to him under section 170(1).

The Applicant also challenges the subsequent decision made by the Respondent to refer the dispute to the Tribunal pursuant to section 170 (4) of the Promulgation. Once the Respondent has accepted the report of the dispute, it is deemed to be an employment dispute for the purpose of the Promulgation (section 170(3)).

Section 170 (4) then states:

"The Permanent Secretary must –

(a) Refer the employment dispute to the Tribunal if the dispute relates to interpretation, application or operation of an employment contract; or

(b) in any other case, refer the employment dispute to Mediation Services."

It is sufficient to deal with this challenge by stating that on the material that was before the Respondent it was open to him to reach the decision that the employment dispute was of the category that should be referred to the Tribunal.

The challenges that have so far been considered relate to allegations that the Respondent's decision was based on procedural impropriety and errors of law. The final challenge relates to the claim that the Respondent failed to have regard to certain relevant considerations. This is generally referred to as rendering the decision unreasonable in the sense in which it was used in Associated Provincial Picture Houses Ltd –v- Wednesbury Corporation [1948] 1KB 223.

The position in Fiji was considered by the Court of Appeal in The Chief Executive Officer for Labour, Industrial Relations and Productivity and Another –v- Fiji Public Service Association and Others (unreported and appeal 84 of 2004 delivered 11 November 2005). At paragraph 36 the Court stated:

"When a discretion is conferred upon a decision maker by statute then, absent procedural impropriety, there is only one circumstance in which the court will interfere. As explained by Mason J in Minister for Aboriginal Affairs –v- Pek.Wallsend Ltd 162 CLR 24 at page 40:

"the limited role of a court reviewing the exercise of an administrative discretion must instantly be borne in mind. It is not the function of the court to substitute its own decision for that of the administrator by exercising the discretion which the legislature has vested in the administrator. Its role is to set limits on the exercise of the discretion and a decision made within these boundaries cannot be impugned."

The issue then is whether the Respondent's decision not to consider the matters referred to in paragraph 2 (c) of the Applicant's Motion was wholly unreasonable. As already noted the Respondent had sought a response from the Applicant before making his decision to accept the report of the dispute. He made his decision on the basis of the material that was available to him. That material consisted only of the report and its one page attachment. The Applicant did not avail itself of the opportunity to respond to the Respondent's letter and as a result passed up the opportunity to have its objections considered by the Respondent. The matters which the Applicant now says that the Respondent should have considered were not before the Respondent at the time he made his decision. His decision was made in accordance with the requirements of the legislation and in my judgment cannot be faulted.

I have dealt with the issues raised by the Applicant on the basis that the procedure prescribed under Order 53 of the High Court Rules was the appropriate method of challenging the reference of the employment dispute to the Employment Relations Tribunal. After all, when the material is considered in the context of the frame- work of the Promulgation the real issue and the only issue was the claim by the Applicant that the Tribunal did not have jurisdiction to adjudicate on the employment dispute.

The Tribunal is said to lack jurisdiction because the decisions by the Respondent to accept the report of the dispute and to refer the employment dispute to the Tribunal were flawed. It was claimed that the first decision was flawed because the applicant was denied natural justice as a result of the Interested Party's failure to comply with the mandatory requirement of section 169 (3) of the Promulgation. The same decision was based on an error of law in that it was not a dispute as defined. It was also claimed that the second decision was based on an error of law in that the employment dispute was not of a kind that should be referred to the Tribunal under section 170 (4). It was also claimed that both decisions were unreasonable as a result of the Respondent's failure to take into account certain relevant considerations.

It is necessary for parties involved in proceedings under the Promulgation to understand that it is legislation that is intended, amongst other things, to provide a "structure of rights and responsibilities for parties engaged in employment relations to regulate the relationship and encourage bargaining in good faith and close observance of agreements as well as effective prevention and efficient settlement of employment related disputes". It also contains provisions that establish "the mediation services, the Employment Relations Tribunal and the Employment Relations Court" and which enable these institutions "to carry out their powers, functions and duties." (see the Preamble to the Promulgation).

It is in this context that it is necessary to consider whether the Promulgation provides a process by which the Applicant could have challenged the jurisdiction of the Tribunal.

Section 211 (i) (b) provides that the Tribunal has jurisdiction to adjudicate on employment disputes. Section 213 (d) of the Promulgation provides that the Tribunal may determine other questions and give rulings as may be necessary for the exercise of its jurisdiction. In my judgment the effect of these provisions is that the Tribunal can determine preliminary issues relating to the exercise of its jurisdiction to adjudicate on employment disputes.

This position is to be compared with the position of the former Arbitration Tribunal under the now repealed Trade Disputes Act. The scheme of that legislation was such that the Arbitration Tribunal had no jurisdiction to examine the propriety of the reference of a trade dispute to it by the Permanent Secretary. There were no appeal provisions in the Trade Disputes Act. Any challenge to any decision made during the course of the dispute resolution process under that Act was by way of an application for Judicial Review to the High Court.

The position under the Promulgation is different. In the present case, had the Permanent Secretary rejected the report of the dispute, the aggrieved Interested Party could have exercised a right of appeal to the Tribunal under section 173 (1). Furthermore, if either party was aggrieved by the decision of the Tribunal it could then have exercised a right of appeal to the Employment Court under section 173 (2). Sections 239 and 242 set out further matters concerning the exercise of those rights of appeal.

The significant point to note is that a right of appeal is granted to an aggrieved party if the Permanent Secretary rejects a report of a dispute. It is not intended that an aggrieved party will seek to challenge the rejection by way of judicial review in the High Court.

So what then is the position for an aggrieved party, such as the Applicant in these proceedings, who seeks to challenge, on a number of grounds, the decisions of the Permanent Secretary to accept the report of the dispute and/or to refer the employment dispute to the Tribunal.

In my judgment the answer can be found in the Promulgation itself. Section 202 (2) states that the Tribunal is deemed to be a sub-ordinate court to the Employment Relations Court (which itself is a division of the High Court). Section 202 (3) provides that the Tribunal has the jurisdiction powers and functions conferred on it by the Promulgation. As a sub-ordinate court the Tribunal has express jurisdiction to determine questions and give rulings as may be necessary for the exercise of its jurisdiction to adjudicate on employment disputes.

It is clear that the intention of the Promulgation is that a preliminary question as to whether an employment dispute is properly before the Tribunal is an issue which must be determined by the Tribunal as part of the exercise of its jurisdiction to adjudicate an employment disputes.

In my judgment preliminary issues can be placed before the Tribunal pursuant to the procedures prescribed by the Magistrates' Courts Rules. Under Section 238 of the Promulgation in the absence rules made by the Chief Justice, the Magistrates Courts Rules apply to the proceedings before the Tribunal. Order XXVI provides a procedure for bringing interlocutory applications and is the procedure that should be followed when an application is made to challenge the jurisdiction of the Tribunal. An application challenging the jurisdiction of the Tribunal should be made as promptly as possible. As an interlocutory application before the Tribunal, a party if aggrieved by the decision, could then exercise a right of appeal to the Employment Relations Court under the provisions of the Promulgation. In my judgment, the procedure under Order 53 is not appropriate.

I have dealt with this issue after considering the issues in the context of a judicial review application since the question of jurisdiction was not raised nor agued before me.

It follows that, on both grounds, the application for judicial review fails and is dismissed. The Respondent is entitled to costs which are fixed summarily in the amount of $1200.00 and the Interested Party is entitled to the costs of preparation for and appearance at the hearing in the sum of $500.00.

W D Calanchini
JUDGE

26 May 2011
At Suva