State v Permanent Arbitrator, ex parte Plantation Island Resort [2001] FJLawRp 94; [2001] 2 FLR 376 (1 November 2001)

STATE v PERMANENT ARBITRATOR ex parte Plantation Island Resort

High Court Judicial Review Jurisdiction
1 November, 2001 HBJ 9/00S

Judicial Review – review of permanent arbitrator's award – whether finding that dismissals were procedurally unfair an error of law – whether award of 4 month's salary as compensation for breach of procedural rights irrational and unreasonable - Trades Dispute Act s6(3), 1997 Constitution s33(3)

Two interested parties were purportedly summarily dismissed for instigating a petition to the Immigration Department signed by 45 employees seeking the removal of the applicant resort's manager. The Permanent Arbitrator found that the Constitution section 33(3) imported into Fiji employment law protection from unjustified or unfair dismissal. Thus, although the summary dismissal was substantively justified, they were procedurally unfair and a breach of paragraph 7(c) of the 1983 Collective Agreement between the Fiji Hotel Association and the National Union of Hotel and Catering Employees. He declined to order reinstatement but awarded the interested parties 4 month's salary as compensation for breach of their procedural rights. The applicant sought judicial review that the permanent arbitrator's finding that dismissals were procedurally unfair was an error of law and that an award of 4 month's salary as compensation for breach of procedural rights was irrational and unreasonable. There was no complaint that the proceedings before the permanent arbitrator were unfairly conducted. The Court found that the permanent arbitrator had erred in his approach and reached the wrong conclusion. Without reaching a conclusion as to the correctness of whether the employees were summarily dismissed, the Court surmised that if their conduct was so serious as to justify summary dismissal, even if there was a pre-dismissal consultation requirement, it would not have been available to the two employees. If the dismissals were procedurally unfair, the permanent arbitrator was bound to order reinstatement.

Held–(1) The right to fair labour practices by virtue of section 33(3) of the Constitution does not mean any particular practices required by overseas legislation have been imported into Fiji law.

(2) Where Fiji does not have legislation protecting employees from arbitrary or unjustified dismissal, the permanent arbitrator was not entitled to investigate whether the dismissal was unfair or unjust, but merely whether the applicant's conduct in summarily dismissing the 2 employees was a breach of the collective agreement. Compensation to the 2 employees could only arise if their circumstances were adversely affected by the employer's breach of the Collective Agreement.

Obiter dictum - the lack of modern industrial relations legislation has produced an unsatisfactory situation inconsistent with the spirit of the 1997 Constitution where the rights of employees are different depending on whether they are public servants, members of a union with an industry collective agreement or mere private non union members.

Award of 4 month's salary as compensation set aside.

Note: the Trade Disputes Act has been repealed by the Employment Relations Promulgation 2007 WEF 1 October 2007]

Cases referred to in Judgment
foll State v Arbitration Tribunal ex parte Air Pacific Limited (2001) HBJ 14/00 8 May 2001
foll Diners Club (NZ) Ltd v Prem Narayan FCA 4/96-FCA Reps 97/953
ref Sinclair v Neighbour [1967] 2 QB 279

Renee Lal for the Applicant
Roneesh S. Singh for the Interested Parties

1 November, 2001 JUDGMENT

Scott, J.
The Applicant, pursuant to leave granted moves for judicial review of an award of the Permanent Arbitrator dated 16 November 1999. The facts and the award are set out in the record of the proceedings before the Tribunal filed on 25 August 2000 and need now only be summarised.

The first and second Interested Parties Maciu Bakani and Unaisi Leqeta were employed by the Applicant which is a well known tourist resort. At the relevant time the manager of the resort was Andy Larsen.

In July 1998 Mr. Bakani and Mrs. Leqeta were 2 among 45 employees of the resort who signed a petition calling for Mr. Larsen's removal (pages 44 and 45 of the record). On 21 July Mr. Bakani took leave and travelled to Suva where he delivered the petition to the Immigration Department.

When Andy Larsen became aware of the existence of the petition he interviewed a number of signatories. He formed the view that Bakani and Leqeta were the instigators of the petition and he wrote to each of them calling for an explanation. He described the petition as "false, damaging and malicious". Both employees were suspended from work without pay.

On 24 July Bakani and Leqeta wrote to Larsen denying instigating the petition. They claimed that the decision to present the petition had been collectively taken. They sought the immediate lifting of their suspension.

On 30 July Bakani and Leqeta were summarily dismissed (pages 12 & 15).

On 29 April 1999 the Permanent Secretary for Labour & Industrial Relations referred a trade dispute to the Permanent Arbitrator in the following terms:

"I do hereby refer the said trade dispute to the Permanent Arbitrator for settlement over the termination of employment of Mr. Maciu Bakani and Mrs. Unaisi Leqeta with effect from 30 July 1998 which the union considers as harsh, unfair and unreasonable and therefore seeks their reinstatement without lost of benefits."

In his award the Permanent Arbitrator described the actions of Bakani and Leqeta as "serious breaches of the employees duties of trust and confidence". He found that although the summary dismissals were substantively justified they were procedurally unfair as being in breach of paragraph 7 (c) of the 1983 Collective Agreement between the Fiji Hotel Association and the National Union of Hotel and Catering Employees (the third Interested Party). The procedural breach was also described as "serious".

In the outcome the Permanent Arbitrator declined to order reinstatement but awarded Bakani and Leqeta 4 months salary "as compensation for (the Applicants) breach of their procedural rights".

Seeking to have the award quashed the Applicants set out a number of grounds in its Order 53 statement. Essentially these grounds amount to a claim that the Permanent Arbitrator erred in law in finding that the dismissals were procedurally unjustified and that the award of 4 months salary was irrational and unreasonable. In approaching these grounds it will be borne in mind that this is not an appeal against the Permanent Arbitrator's award (which "shall be binding on the parties to the dispute" – Trades Dispute Act Cap. 97 – Section 6(3)) but is an application for judicial review. Unless it can be shown that the Permanent Arbitrator clearly erred in law or reached a wholly unreasonable conclusion the application must fail since there is no suggestion that the proceedings before the Permanent Arbitrator were in any way unfairly conducted.

On pages 8 to 13 of his carefully reasoned and learned award the Permanent Arbitrator explained that in his view section 33(3) of the 1997 Constitution has imported into Fiji employment law protection from unjustified or unfair dismissal. The concepts of unjustified or unfair dismissal must clearly be distinguished from wrongful dismissal which is a concept well known to the common law. Unfair or unjustified dismissal on the other hand are creatures of statute, one of the first being the English Industrial Relations Act 1971.

In the State v the Arbitration Tribunal ex parte Air Pacific Ltd (HBJ 14/00) I explained that while I agree that workers in Fiji by virtue of Section 33 (3) now have a "right to fair labour practices" I do not agree that this means that any particular practices required by overseas legislation in this field have, as a result of the promulgation of the 1997 Constitution been imported into the law of Fiji.

In my opinion the position is still that "Fiji does not have legislation protecting employees from arbitrary or unjustified dismissal as is the case in England, Australia and New Zealand" (Diners Club (NZ) Ltd. v Prem Narayan FCA 4/96 – FCA Reps 97/573). This does not of course mean that employers may be summarily dismissed at whim since section 28 of the Employment Act (Cap 92), an admittedly antique piece of legislation, provides the five circumstances in which summarily dismissals may alone lawfully take place.

Furthermore, the employer has the onus of establishing reasonable justification for his actions since this flows from the parties' contractually implied duty of mutual respect.

If, as I believe, concopts of unfair or unjustified dismissal have to be excluded from consideration then it follows that the Permanent Arbitrator erred in his approach. In my opinion the Permanent Arbitrator should only have asked himself whether the Applicant's conduct in summarily dismissing the 2 employees was a breach of the collective agreement, not whether it was fair or unjustified. If on the facts the Permanent Arbitrator concluded that the agreement had been breached then under clause 7 (e) of the Collective Agreement (a clause apparently overlooked by the Permanent Arbitrator) the employees were entitled to be reinstated without loss of salary or other benefits.

Unfotely, answering theg the proper question is not entirely straightforward because of the way in which clause 7 of the Collective Agreement has been drafted. It will be convenient to set out thevant parts in full:

"Discipline

The following conditions shall govern disciplinary procedures:-

a) Dismissal of an employee for any reason shall only be made by the manager of the hotel or in his absence, his authorised deputy.

b) An employee may be suspended from working by his supervisor but that suspension shall within 24 hours of the suspension be brought to the notice of the manager or his authorised deputy.

c) In cases arising out of (a) or (b) the manager or in his absence his authorised deputy shall conduct an enquiry in consultation with the union.

The employer shall within 24 hours inform the union of any subsequent disciplinary action imposed."

The difficulty lies in understanding what is meant by "in cases arising out of (a) or (b)" (emphasis added).

The Permanent Arbitrator thought that:

"sub clause 7 (c) requires a consultative enquiry whenever anyone has been suspended or is going to be dismissed" (emphasis added).

Examination of the two clauses 7(a) and 7(b) however does not reveal that the contemplated enquiry takes place after suspension but takes place before dismissal. The requirement for an enquiry, according to the agreement, is in both cases the same. Furthermore, clause 7 must be considered together with clause 8, the grievance procedure, which undoubtedly and logically can only be invoked after a grievance has arisen.

In my view the clearest language would be required to override the long established rule that an employee who does anything incompatible with the due or faithful discharge of his duty to his employer may be dismissed without notice (see e.g. Sinclair v Neighbour [1967] 2 QB 279). While an employer might well agree that a decision summarily to dismiss should subsequently be reviewed in consultation with the union I cannot conceive that an employer would agree to waive the right to suspend or dismiss prior to an enquiry taking place. It would simply be intolerable to an employer not even to be able to suspend an employee who had for example been caught red handed, or who had assaulted a fellow employee or a manager or who, as here, had behaved in some other manner "sufficient to justify summary dismissal" (page 108).

As pointed out e Permanermanent Arbitrator neither Bakani nor Leqeta followed the grievance procedure set out in Clause 8 of the Collective Agreement before resorting to the presentation of a petition against Andy Larsen. I can find no evidence that the union invoked clause 8 after its two members were dismissed. From the outline of facts contained in the preliminary submission filed by the union (page 49 of the record) it appears that it did not.

In these circumstances I cannot agree that the Collective Agreement made provision for "an investigation (which) might have led to a fairer result of establishing the exact culpability of each employee on the island" (page 108).

Furthermore, with ct, Ict, I find the Permanent Arbitrator's assertion that "if this had happened and if the union had been allowed to mitigate others may have been dismissed andgrievors may have received lesser penalties" (page 108) to ) to be inconsistent with his later assertion that "the level of their participation which they admitted to Mr. Larsen was itself sufficient to justify a summary dismissal" (page 108).

As Iit, the question ofon of compensation to Bakani and Leqeta could only arise if their circumstances were adversely affected by thloyer's breach of the Collective Agreement. If as a fact their conduct was so serious as toas to justify summary dismissal then even if there were in existence a pre dismissal consultation requirement, which I doubt, compliance with that requirement would not have availed them. If on the other hand the Permanent Arbitrator was right in thinking that the dismissals were procedurally unjustified then, as previously pointed out, he was, under the provisions of paragraph 7 (e) of the Collective Agreement bound to order reinstatement.

view the Permanent Arbt Arbitrator erred in law in his approach to this reference and as a result reached the wrong conclusion. The award of 4 months salary to the two interested parties is set aside.

Before leavingmatter I er I find it appropriate to express general support for the Permanent Arbitrator's implied criticism of the lack of modndustrial relations legislation in Fiji. Apart from anything else the lack of such legislatislation has produced a situation where the rights of employees are substantially different depending on whether they are public servants, members of a union with an industry collective agreement or mere private non union employees. This is an unsatisfactory state of affairs and one which is inconsistent with the spirit of the 1997 Constitution.

Judicial review succeeds.

Marie Chan