Fiji Development Bank v Fiji Bank and Finance Sector Employees Union [2011] FJHC 7; ERCA02.2009 (24 January 2011)

IN THE EMPLOYMENT RELATIONS COURT
AT SUVA
APPELLATE JURISDICTION

CASE NUMBER : ERCA NO. 02 OF 2009

BETWEEN :

FIJI DEVELOPMENT BANK
Appellant

AND:

FIJI BANK AND FINANCE SECTOR EMPLOYEES UNION
Respondent

Appearances : Mr. D. Sharma for the Appellant.
Mr. P. Rae for the Respondent.

Date/Place of Judgment : Monday, 24th January, 2011 at Suva.
Judgment of : The Hon. Justice Anjala Wati.

JUDGMENT

EMPLOYMENT ACTION – Appeal from the verdict of the "ERT"- improper analysis of evidence and also improper inference of facts from given evidence- appeal allowed.

Legislations
The Employment Relations Promulgation 2007.

The Appeal

1. Both the parties have appealed against the decision of the ERT delivered on the 3rd day of June, 2009.
   
2. The appellant filed its notice of appeal on the 17th day of June, 2009 and the respondent filed its cross appeal on the 06th day of August, 2009 for which leave was granted to the respondent on the 30th day of July, 2009.
   

References

3. In this judgment:-
   
   • (a) The Chief Tribunal shall be referred to as the ("CT").
   • (b) The Employment Relations Tribunal shall be referred to as the ("ERT").
   • (c) The Employment Relations Court shall be referred to as the ("ERC").
   • (d) The Employment Relations Promulgation 2007 shall be referred to as the ("ERP 2007").
   • (e) The Collective Agreement shall be referred to as the ("CA").
   • (f) The Memorandum of Agreement shall be referred to as the ("MOA").
     

The Grounds of Appeal

4. The appellant has filed 7 grounds of appeal and they are as follows:-
   

Ground 1

That the Learned Tribunal erred in fact and in law when he found that Nawaia Touakin and Sant Prasad qualified for redundancy pursuant to clause 8 of the Collective Agreement when in fact neither of the two persons qualified for any kind of redundancy because the Appellant has offered them comparable positions with no loss of benefits pursuant to s. 1.6 of the Memorandum of Agreement.

Ground 2

That the Learned Tribunal erred in law and in fact when he found that Neel Suresh qualified for redundancy pursuant to clause 8 of the Collective Agreement when in fact Neel Suresh, whilst not being offered a comparable position to begin with, did not suffer any loss in his existing benefits and thus did not qualify for any redundancy payment under the Memorandum of Agreement. Alternatively, Neel Suresh was subsequently offered a substantive position but chose instead to resign. He was therefore not entitled to redundancy.

Ground 3

That the Learned Tribunal erred in fact and in law in saying that Viliame Tagi was wrongfully downgraded for the following reasons:-

1. Viliame Tagi had not accepted the appellant's offer dated 30th June 2008.
2. Viliame Tagi had always been employed at Grade 2.

100. There was no change is Viliame Tagi's employment status.

4. Viliame Tagi was never graded at Grade 3 prior to 30th June 2008.
   

Ground 4

That the Learned Tribunal failed to take into account that Grade 2 was only relevant if the positions within Legal Department remained condensed to 2 persons doing the work of Legal Processing Support Officers.

Ground 5

That the Tribunal failed to take into account that with 6 employees doing the work of Legal Processing Support Officers the work would be shared between the six and the workload would not be that cumbersome.

Ground 6

That the Learned Tribunal erred in fact and in law when he held that Viliame Tagi had signed his acceptance of the Appellant's offer dated 30th June 2008.

Ground 7

That the Learned Tribunal erred in fact and in law in not taking into account the fact that the appellant had gone outside the organization chart to keep Mr. Tagi employed in Legal Department and that by restoring to the quota of Legal Processing Support Officers to 6, it was an implied term that a Grade of 3 could not be sustained for the position of Legal Processing Support Officers.

Orders Sought On Appeal

5. The appellant has sought an order that the Tribunal's order be set aside and be substituted with the following orders:-
   
   1. That Nawaia Touakin and Sant Prasad did not qualify for any kind of redundancy because the Appellant did not breach the Memorandum of Agreement dated 4th June 2008 when it offered comparable positions and no loss of benefits to them pursuant to section 1.6 of the Memorandum of Agreement.
      
   2. Neel Suresh was not initially offered a comparable position on 30th June 2008 but he was offered no loss in existing benefits or seniority and thus did not qualify for any redundancy payment under the Memorandum of Agreement. He was subsequently offered a substantive comparable position with no loss of benefits but he chose to resign from the appellant.
      
   100. That Viliame Tagi was not wrongfully downgraded and should continue to be paid at Grade 2.
        

Grounds of Cross Appeal

6. There are 4 grounds of Cross Appeal and they are as follows:-
   

Ground 1

That the Learned Tribunal erred in fact and in law when he found that Nawaia Touakin, Sant Prasad and Neel Suresh were entitled to redundancy pursuant to clause 8 of the CA when in fact all the redundancy payment entitlements arising out of the agreement of 4 June 2008 are set out in clauses 3 and 4 of the agreement.

Ground 2

That the Learned Tribunal erred in fact and in law in finding that the redundancy payments set out in clause 3 of the agreement of 4 June 2008 apply only to those selected for voluntary redundancy pursuant to clauses 1.3 and 1.4 of the June 2008 agreement and those workers who opted for redundancy pursuant to clauses 1.7 and 1.10 were entitled to redundancy provisions in clause 8 of the collective agreement as such a finding unfairly discriminates between the two sets of workers.

Ground 3

That the learned Tribunal erred in fact and in law in saying that there was an error on page 21 and that Mr. Swamy's position should be graded at Grade 3 when in fact the Grading at Grade 4 was agreed between the parties and is binding on the parties.

Ground 4

That the Learned Tribunal failed to take into account his finding at page 5 that the gradings were temporary and subject to a Job Evaluation that has yet not taken place.

Orders Sought on Cross Appeal

7. The respondent has sought that an order be made by this court that Nawaia Touakin, Sant Prasad and Neel Suresh are entitled to redundancy payments set out in clause 3 of the agreement dated the 04th day of June, 2008.
   
8. An order is also sought that Mr. Swamy's position be graded at Grade 4 as stated in the annexure to the agreement of 4th June 2008 between the bank and the union.
   

The Terms of Reference of Dispute before the ERT

9. The dispute was referred to the Tribunal on 26th November, 2008 by the Permanent Secretary with the following terms of reference:
   

"The dispute is over the application, interpretation and operation of a Memorandum of Agreement dated 4th June 2008 between Fiji Development Bank and the Fiji Bank and Finance Sector Employees Union with respect to the Employer's:-

(1) Refusal to approve application for voluntary redundancy pursuant to clauses 1.3 and 1.4 and its refusal to provide reasons for non-selection to Aisea Rawaqa, Josateki Wainiqolo, Jone Niumataiwalu and Sitiveni Nakacia.

(2) Refusal to grant the right to redundancy pursuant to clause 1.10 to Sant Prasad, Neel Suresh and Nawaia Touakin.

(3) Unilateral action in downgrading the following positions without agreement with the Union:

Viliame Tagi – Legal Processing Support Officer Grade 3 to Grade 2.

James Swamy – Team Leader Accounts Receivable Grade 4 to Grade 3.

(4) Refusal to pay disturbance allowance of $2, 400 to Vilise Kaloumaria pursuant to clause".

The Verdict of the ERT

10. To state briefly, the verdict of ERT in respect of the above terms of reference was:-
    

"In Summary, the Tribunal has concluded that the Employer has not breached clauses 1.3 and 1.4 when it declined to grant voluntary redundancy to the workers listed in paragraph 1 of the reference...

The workers referred to in paragraph 2 of the reference rejected the offer of redeployment made under clause 1.7 and were entitled to redundancy under clause 1.10. The redundancy entitlement is set out in clause 8 of the collective agreement.

The worker James Swamy was not unilaterally downgraded. The employer's evidence confirmed that a mistake had been made and there was no evidence that the Employer had acted unreasonably or in bad faith.

The Worker Viliame Tagi was wrongfully downgraded. The positions should all be paid at grade 3...

The Worker Vilise Kaloumaira is entitled to the disturbance allowance under clause 8.3 of the agreement"

11. Only the verdict in respect of paragraphs 2 and 3 of the terms of reference are subject to appeal.
    
12. The verdict in paragraph to 2 is subject to both the appeal and cross appeal. It forms the basis of grounds 1and 2 of the appeal and also grounds 1 and 2 of the cross appeal.
    
13. The verdict in paragraph 3 is subject to ground 3 of the cross appeal.
    
14. The verdict in paragraph 3 in respect of the employee Viliame Tagi is subject of grounds 3, 4, 5, 6 and 7 of the appeal and the verdict in respect of the employee James Swamy is subject to grounds 3 and 4 of the cross appeal.
    
15. The reason for verdict 2 and 3 are set put in pages 9 to 18 of the CT's judgment.
    

The Submissions and the Determination

16. Instead of dealing with each ground of appeal and cross appeal I will look at the challenged verdict, which is, of course verdict in respect of paragraphs 2 and 3 of the terms of reference, in light of both the appeal and the cross appeal, and determine whether there was any error of law or fact.
    
17. The appellant's submissions are briefly stated together with the grounds of appeal and there is no need to repeat the same.
    
18. The respondent submitted that the bank had given evidence that although the salary was maintained in respect of the workers, their position was downgraded and as such they were entitled to redundancy payments as they were not offered comparable positions in the bank. The only place where the tribunal erred was when their entitlement was pronounced pursuant to clause 8 of the CA instead of clause 3 of the MOA.
    
19. Mr. Nawaia Touakin gave evidence in the Tribunal that before the restructure, he was holding the position of the Manager Properties. At the date of the hearing, he was holding the position of the Team Leader Properties. His position had been downgraded. Before the restructure, 8 employees reported to him and now only 5 do. Out of the 8 employees, the three have been sent to the legal section. They were records staff in his section. The employee agreed that to some extent the position was only a change in name. The position was substantially the same and comparable. He has not been subjected to any salary or loss of benefits. Before restructure, he was in Grade 5 and there were 7 Grades. Now there are only 5 Gradings and he is in Grade 4 now. He agreed that clause 1.6 of the MOA applied to him. He rejected the application for redeployment so that he could pursue his application for voluntary redundancy. His application for voluntary redundancy was rejected initially. The employee had also stated that the letter that was given to him after restructure did not comply with the provisions of clause 1.7 of the MOA.
    
20. The ERT analysed only the letter that was given to Mr. Nawaia Touakin, and that too only the 1st paragraph of the 2nd page which read that "all rights in respect of redundancy will be preserved" if the offer of redeployment was not accepted. Based on that paragraph the ERT ruled that clause 1.7 of the MOA applied to this employee and he should have been, when he refused the offer for redeployment, entitled to redundancy under clause 1.10 of the MOA.
    
21. The relevant clauses of the MOA are clause 1.10 and clause 1.7 and they read as follows:-
    

" 1.7 Where a staff member cannot be redeployed to a comparable position at not less than the staff member's existing salary, then as an alternative to redundancy, the staff member may be offered redeployment within FDB on the following basis:

The offer will be in writing stating that normal redundancy provisions will apply if the offer of redeployment is not accepted and will include the following information about the proposed position option(s):-

1. Position and Level
2. Principal Duties
3. Salary
4. Location
5. Nature and period of training if necessary.
   

1.10 Where alternative employment is offered in terms of clause 1.7 but not accepted by a staff member, all rights in respect of redundancy will be preserved.

22. The letter of redeployment does state that the rights of redundancy will be preserved. In the MOA, clause 1.10 also states that where redeployment under clause 1.7 is not accepted, the rights in respect of redundancy will be preserved.
    
23. The evidence of the employee and the Bank clearly states that although the Grade was reduced from 5 to 4, the employee retained the same position with a changed name. He got the same salary and he led the section. The entire people in the section reported to him but the number had changed. In fact, before the restructure, there were 7 grades and this employee held two positions lower. After the restructure there were 5 grades and he held just 1 position lower. The evidence in itself suggests that the employee was offered a comparable position and he refused the comparable position.
    
24. The MOA is very silent on what would happen if a comparable redeployment is offered and rejected. However the safest conclusion is that the rights of redundancy will be preserved and that the employer retains the right to either give the redundancy package or not. There is no reason why the employee should be entitled to the redundancy package if he or she is offered a comparable position. The whole purpose of the MOA was to avoid redundancies and implement the employment restructure to cut costs. If an employee is offered a comparable position and he or she refuses then he or she must not be entitled to the redundancy as the whole purpose of avoiding redundancy and cost cutting would be destroyed.
    
25. The evidence is also very clear in relation to Nawaia Touakin that he continued to work despite refusing the offer. Again this indicates that he does not come within the ambits of clause 1.7 as he could be redeployed albeit for whatever reasons. He still continues in employment and it is very unusual and unjust for him to continue to work and receive the same salary and claim redundancy. One must not forget the purpose of the new MOA which arose as a result of the intended restructure.
    
26. In my judgment, this employee is not Nawaia Touakin is not entitled to redundancy at all. Making a finding of fact that the employee was not given a comparable position by only looking at the letter of redeployment in part and especially the words that redundancy is preserved was both insufficient and erroneous as the letter of redeployment is not sufficient to come to a conclusion on whether the employee was offered a comparable position. The entire evidence must have been looked at and if the Tribunal did that, it would have found that the employee indeed was offered a comparable position. The ERT had erred both in law and in fact.
    
27. The next employee is Mr. Sant Prasad. There was no evidence that was tendered by Sant Prasad. The only evidence was given by the bank and the evidence was that only Mr. Prasad's grading had changed. The ERT drew similar conclusions in respect of this employee with its analysis of the letter of redeployment given to Mr. Nawaia Touakin. I have already concluded that there was an error of analysis of evidence and as such the Tribunal had erred in fact and in law in respect of this employee as well. He too, is not entitled to any redundancy.
    
28. Mr. Neel Suresh Chand also did not give any evidence and his case was summarized as per the evidence of Mr. Touakin as well. The evidence by the Bank was that this employee had a change in job, he retained his benefit and the place of employment was affected in that this employee had to come to Suva from Nadi. There was no evidence on the job expectations of a relationship officer and a Senior Lender which position was subsequently offered to the employee. There was also no evidence as to whether the change in job was to a comparable position or not. The employee should have given evidence and he failed to establish his case. Analyzing his case with evidence from another employee was wrong. There was no finding of fact that this employee could not be redeployed to a comparable position. The Tribunal erred in law and in fact as well.
    
29. For the above reasons, grounds 1 and 2 of the appeal are allowed but grounds 1 and 2 of the cross appeal are dismissed.
    
30. The remaining grounds of appeal and cross appeal relate to the verdict in respect of paragraph 3 of the terms of reference in respect of the employees Viliame Tagi and James Swamy.
    
31. The appeal relates to Viliame Tagi and the cross appeal relates to James Swamy.
    
32. The appellants' submissions are actually summarized in its grounds of appeal. The respondent submitted that it was agreed in the MOA that Mr. Tagi's position should be graded at grade 3 and if this was a mistake then the Union's consent to vary the same would be required but the Bank unilaterally changed the grading to Grade 2.
    
33. In respect of Mr. Tagi, the ERT summarized the evidence and came to a verdict. The CT stated as follows:-
    

"The other issue concerned with this issue is Mr. Finiasi. Before the restructure he was employed as one of six legal processing support officers. By letter dated 27th July 2007 Mr. Finiasi was informed that as a result of a Job Evaluation review his salary was to be on the new Grade 2 with effect from 1 July 2007.

On page 19 of the Annexure to the agreement the restructure of the legal division provided for only two legal processing support officer positions and they are shown as Grade 3 positions. At the time of the restructure, Mr. Finiasi was not one of the two selected or mapped for the two positions available. He retained his terms and conditions as was classified as over or above quota staff.

However, shortly afterwards, by letter dated 30th June 2008 Mr. Finiasi was informed that he was also to be appointed as a legal processing support officer with effect from, July 2008 on salary level at Grade 2. Mr. Finiasi's evidence was to the effect that he thought he might have signed the acknowledgment indicating his acceptance of the terms and conditions.

It would appear that since restructure the number of legal processing support officers has returned to the pre-structure level of six positions. The Staff Complement Chart as at March 2009 showed that all six legal processing support officer's position are paid at grade 2 level.

Mr. Finiasi indicated to the Tribunal that he relied on the chart on page 19 for his claim that he should be paid at grade 3. He conceded that he had never been informed that his salary had been increased to grade 3.

The Employer's explanation for the two positions shown as Grade 3 on the chart on page 19 of the Annexture was again related to error.

The Tribunal notes that in the Staff Complement Chart dated May 2008 there were six legal processing support officers position at salary level grade 2. The restructure organization chart on page 19 of the annexure to the agreement showed that here were to be two legal processing support officer positions at grade 3. On first glance that does not seem unreasonable as the quantum of work if not the responsibilities could reasonably be expected to have substantially increased. The Staff Complement Chart for June 2008 indicated that there were to be four legal processing support officers at grade 3 level.

The explanation given by the Employer's witness for the increase in the number of positions from 2 to 6 was reasonable and by itself nor necessarily in breach of the agreement. The Tribunal is prepared to accept that it was an implied term of the agreement that as and when circumstances allowed, more staff would be taken on.

However the explanation for the change is grading that showed up on the March 2009 Staff Compliment for the first time was less convincing and somewhat confusing. The more probable inference is that the Employer unilaterally reduced the initial grade 3 level to grade 2 level for these positions when it decided that the organization required six legal processing support officers, instead of the initial two positions. Therefore the positions should be paid at the level that the agreement and the charts indicated being grade 3 level".

34. In my judgment, the tribunal has erred in fact in analyzing the evidence and drawing improper facts from the evidence and I say so for the following reasons:-
    
    • Mr. Tagi was never a Grade 3 legal processing officer. After the restructure he was to lose his job but he was retained at his same position. The factual position is that he was retained at his same grade 2.
      
    • The down grading issue which has been concluded upon by the CT is due to the grading endorsed on the chart. One must not forget that the employer had restructured the six positions to two only and this employee was not part of the restructure. The bank then maintained the same number of people of six legal processing support staff and maintained the pre-restructure position. If the new structure was to be maintained then Mr. Tagi was not even going to be employed. His acceptance of the employment was in fact acceptance of the banks plan to retain the pre-structure staff compliment for the section. The CT also accepted that the explanation was sufficient as to why the pre-restructure position was maintained. If the explanation was sufficient so was the reason for maintaining the grades at grade 2. There was no unilateral change, because the chart was not followed to maintain all the employees.
      
35. For the above reasons, grounds 3 to 7 of the appeal must be allowed.
    
36. The cross-appeal relates to Mr. James Swamy. The respondent submitted that the Tribunal erred in finding that Mr. Swamy's position was not downgraded. The appellant submitted that the finding that Mr. Swamy's position was not downgraded was as a result of uncontradictory evidence before the Tribunal. Indeed Mr. Sharma is correct. The Tribunal's finding was based on uncontradicted evidence that the position of Mr. Swamy shown in the chart was a mistake and the union was informed about that. Mr. Swamy was never in reality downgraded. He, like Mr. Tagi, maintained their gradings. I find no error of fact or law in the CT's analysis and as such grounds 3 and 4 of the cross appeal must be dismissed.
    
37. I have not heard any party on the issue of costs and I shall give them an opportunity to make submissions in respect of the same.
    

Final Orders

38. Grounds 1-7 of the Appeal are allowed.
    
39. Grounds 1 to 4 of the Cross Appeal are dismissed.
    
40. The following verdict of the Chief Tribunal is set aside:-
    

"The workers referred to in paragraph 2 of the reference rejected the offer of redeployment made under clause 1.7 and were entitled to redundancy under clause 1.10. The redundancy entitlement is set out in clause 8 of the collective agreement.

The worker James Swamy was not unilaterally downgraded. The employer's evidence confirmed that a mistake had been made and there was no evidence that the Employer had acted unreasonably or in bad faith.

The Worker Viliame Tagi was wrongfully downgraded. The positions should all be paid at grade 3..."

41. In lieu of the CT's verdict which is set aside, this court substitutes the same with the following orders:-
    
    1. That Nawaia Touakin and Sant Prasad did not qualify for any kind of redundancy because the appellant did not breach the Memorandum of Agreement dated 4th June 2008 when it offered comparable positions and no loss of benefits to them pursuant to section 1.6 of the Memorandum of Agreement.
       
    2. Neel Suresh does not qualify for any redundancy payment under the Memorandum of Agreement as there was no evidence that the offer of redeployment was not an offer of comparable position albeit there was a change in the job position and place.
       
    100. That Viliame Tagi was not wrongfully downgraded and should continue to be paid at Grade 2.
         
42. I shall hear the parties in respect of the costs issue.
    

Anjali Wati
Judge
24-01-11