Solomon Islands Navigation Services Ltd v National Union of Workers [1983] SBHC 36; [1983] SILR 117 (6 May 1983)

[1983] SILR 117

IN THE HIGH COURT OF SOLOMON ISLANDS

Civil Case No.33

SOLOMON ISLANDS NAVIGATION SERVICES LIMITED

-v-

NATIONAL UNION OF WORKERS

High Court of Solomon Islands
(Daly C.J.)
Civil Case No. 33 of 1983

6th May 1983

Trade dispute - reference to Trade Disputes Panel - nature of reference - industrial action in furtherance of disputes before Panel - recognition - locus standi - Trades Disputes Act 1981 Ss. 3, 5 and 10.

Facts:

On 14th February 1983 the Defendant Union registered a trade dispute with the Trades Disputes Panel under section 3(1) of the Trade Disputes Act 1981 (‘the Act’) stating that the dispute was “Wages”. When the Panel met it was decided by the Panel that they would not proceed until a recognition agreement was signed. A secret ballot was then ordered under section 5 (2) of the Act. The Union thereafter commenced industrial action on the issue of recognition. The Plaintiff employer claimed that this industrial action was in contravention of section 10 of the Act as industrial action in furtherance of a dispute before the Panel. The employer claimed compensation for his loss.

Held:

Section 10 applied to a dispute “referred” to the panel. The dispute referred under section 3 (1) was as to wages. The employer and the Union were not in conflict about recognition which had not been so referred. The Union had locus standi as it was duly authorized by some of the employees of the employer to represent them as members of the Union. The Panel had no jurisdiction to make the order for the ballot or to regard recognition as an issue. A strike in furtherance of recognition did not fall, therefore, within section 10 and the claim was dismissed.

Per curiam: Where there was question of law of this kind arising before the Panel, the proper course was to appeal against it rather than take industrial action.

Cases considered:

Re H.P.C. Productions Limited (1962) 2 W.L.R. 51
Kenilorea -v- A.G. [1983] SILR 61

For Applicant: For Respondent:
F. Waleilia A. Nori

Daly CJ: This case involves a point of law of some difficulty and I must at the out set record my indebtedness to Mr Waleilia and Mr Nori, learned counsel for the parties and to the learned Attorney General who appeared as friend of the court for the clear, concise and erudite arguments they have addressed to the court.

The facts of the case are not in dispute save as to one inference which it is sought to draw. Those facts are that the applicant (Solomon Islands Navigation Services Limited) is a limited company operating a shipping service in Solomon Islands. I shall call it “the Employer”. The Respondent (National Union of Workers) is a Trade Union. I shall call it “the Union”.

At the end of 1984 the Union and Employer had contact concerning a log of claims submitted by the Union. On 14^th February, 1983 the Union wrote to the Secretary of the Trade Disputes Panel (“the Panel”) stating that it wished to register a trade dispute with the Employer. Paragraph 3 of that letter says:-

“The item in dispute is, WAGES”

This dispute was accepted by the Panel and on 17th February 1983 the Secretary of the Panel gave notice to the Employer that a “Trade Dispute” between the Employer and the Union had been reported to the Panel.

On 21st April 1983 the Panel met formally to consider the dispute. Both parties were present. The first question asked by the Chairman was whether the only issue was to wages and both parties confirmed that was the only issue. The proceedings commenced. During the submissions on the Union’s case the Panel asked how many persons were involved in the claim. After further discussion of wages the following exchange is recorded (in the record “CW” is the Union representative; “Mr Clement” the Employer’s representative and “ABP” the Chairman of the Panel).

“CW: Employers refused to have recognition agreement signed.

Mr Clement: No recognition agreement has been signed.

ABP: I thought that recognition document must have been signed for matter to be before us.

Both parties confirmed that no recognition agreement had been concluded.

Mr Clement seemed to be doubting whether Union represented work force

ABP: I do not think we can deal unless there is a concluded recognition agreement, signed agreement.

Discussion with members. We take the view that it would be better for a ballot to be held to clarify that recognition aspect before we can take the matter further.”

The panel thereupon made the following order:-

“That there be a secret ballot (as soon as possible) because no recognition agreement has been executed and it is doubtful whether or not Union has sufficient locus to appear on behalf of employees or that Panel can today deal with matter.”

The hearing was then adjourned without a fixed date. This decision was confirmed and the arrangements for the secret ballot put in hand by letter from the Secretary of the Panel to the Employer of 22nd April, 1983.

On 26th April 1983 there was a meeting between the Employer and Trade Union. I am not told what happened at the meeting save that no matter of recognition was discussed. .The same day the Union sent a letter to the Employer in the following terms:-

“Dear Sir,

I refer to our meeting of today, 26th April 1983 at 10.00 hrs with the workers, I wish to inform you that resolution has been made that workers will now take industrial action (strike) with effects today’s date “Over Recognition”.

There was indeed industrial action taken as indicated in that letter and a ship of the Employer was unable to sail on a scheduled voyage. On the 27th April 1983 the Employer commenced proceedings in this Court and on the 28th April 1983 an interim order was made restraining the Union from organizing a continuation of the strike. As a result of cooperation of all parties, I was able to hear argument on the substantive issue on the 4th May, 1983.

Two further matters in relation to fact I should mention. These are that it is common ground that the Employer and Union had not, until the letter of 26th April 1983, been in conflict on the question of recognition of the Union for negotiating purposes although no agreement has been signed. The Employer’s representative may have expressed doubts at the Tribunal hearing on the 21st April 1983 but the Employer does not, and has not ever, regarded the Union as not having standing to negotiate.

The other matter is that counsel for the Employer seeks to go behind the terms of the letter of the Union of 26th April 1983 and asks the court to infer from the facts of the case that the industrial action of that date was in reality aimed, not at the question of recognition, but at the question of wages which had been referred to the Panel. I am unable to draw that inference on the facts before me. I would require much clearer evidence before coming to a conclusion that the Union was acting in bad faith when it sent the letter of 26th April 1983 announcing the basis of the strike.

The argument by counsel centred on the provisions of the Trade Disputes Act, 1981 (“the Act”). That section provides;-

“10 (1) At any time when a trade dispute has been referred to the Trade Disputes Panel and the panel have neither-

(a) succeeded in bringing about a settlement of the dispute by negotiation, nor made an award in the dispute by negotiation, nor

(b) made an award in the dispute,

no person shall do any of the things mentioned in subsection (2).

(2) Those things are-

(a) calling, organising, procuring or financing a strike or other industrial action short of a strike in furtherance of the dispute, or threatening to do so, or

(b) instituting, carrying on, authorising, organising or financing a lock-out or other industrial action short of a lock-out in furtherance of the dispute, or threatening to do so, or

(c) terminating (for whatever reason) the contract of employment of any employee whose conditions of service are in issue in the dispute.

(3) A person who contravenes subsection (1) shall be guilty of an offence and liable to a fine of $1000, or months imprisonment or both.

(4) Any person may apply to the High Court for an order under this section on the ground that -

(a) another person (“the respondent”) has contravened subsection (1), and

(b) the applicant has suffered loss by reason of the contravention.

(5) If the court finds that the ground on which the applicant is made is well-founded, the court may, if it considers that it would be just and equitable to do so, grant relief to the applicant in either or both of the following forms.

(6) Those forms are -

(a) an order requiring the respondent to compensate the applicant for the loss suffered,

(b) an order directing the respondent not to continue with the contravention and, where the contravention involves the termination of the contract of employment of any person, the order may require him to be reinstated.”

The case for the employer is first, that a trade dispute had been referred to the panel on the 14th February 1983 and no settlement or award had been made in relation to it. Therefore the requirements of subsection (1) are satisfied. Second, that the Union has called a strike in furtherance of the dispute, so subsection (2) (a) is satisfied. Third, that as a result of contravention the Employer has suffered loss and therefore subsection (4) is satisfied. The Employer submits that, on this basis, the court should make an order for compensation and make final the interim order restricting industrial action under ,subsection (5) and (6) of section 10.

These submissions have a clarity and simplicity which is attractive. However the case for the Union is that they gloss over the language of the Act. The Union submits that they were not in contravention of section 10 (1) because they did not organize a strike “in furtherance of the dispute” as “the dispute” must only refer to a trade dispute lawfully before the panel which in this case was a dispute as to wages. The strike on the other hand was as to recognition which was not a trade dispute lawfully before the panel. Therefore, says the Union, the restrictions contained in section 10 do not apply to such a strike.

What I must consider then is the structure of the Act in order to decide which of these submissions is well-founded greatly assisted, as I am, by the neutral submissions of the learned Attorney-General. I have been invited to consider the intent of the legislature in passing the Act as expressed in the preamble. I have also been asked to consider the mischief which the Act was passed to prevent.

These are matters which I consider. But I must also observe that it is my duty to interpret the words of the Act as written and where those words have a clear meaning to give effect to that meaning. I also must bear in mind that section 10 of the Act is in both the limited sense of a provision creating an offence (see subsection (3)) and in the wider sense of a provision granting a civil remedy in the form of damages for breach of the section, a penal provision; that is it provides for penalties. In Re H.P.C Productions Limited (1962) 2 W.L.R 51 Plowman J states at pages 65 and 66:-

“In construing a penal statute ....the question is simply what is the meaning of the words which the statute has used to describe the prohibited act or transaction? If these words have a natural meaning, that is their meaning, and such meaning is not to be extended by any reasoning based on the substance of the transaction. If the language of the statute is equivocal and there are two reasonable meanings of that language, the interpretation which will avoid the penalty is to be adopted.”

To turn to the structure of the Act. The words “trade dispute” are defined in wide terms in the Schedule. I read the definition insofar as it is relevant:-

“Trade Dispute -

A dispute between employees and employers, or between groups of employees, which is connected with one or more of the following matters –

(a) terms and conditions of employment or the physical conditions in which employees are required to work;

(f) machinery for negotiation or consultation, and other procedures relating to any of the matte mentioned above, including the recognition of any trade union by an employer.”

Pausing there, it will be seen that, first, to fall within the provisions of the Act a trade dispute must involve a dispute between employees and employers. Second that a dispute can be connected with more than one of the matters set out in that definition. Thus there could be a situation in which a trade dispute is connected with both terms of employment and recognition.

A trade dispute, as defined, may be referred to the Panel by “a party to a trade dispute” (section 4(1)) or, in certain circumstances, by the Minister (section 4(2)). The procedure for such a reference is set out in Rule 3 of the Trade Disputes Panel Rules 1981. Paragraph (1) of that Rule provides;-

“3(1) A person who wishes to refer a trade dispute to the panel shall do so by giving to the Secretary to the Panel a written notice containing the following particulars -

(a) the name and address of the person making the reference;

(b) so far as reasonably practicable, the name and address of every other person alleged to be a party to the dispute; and

(c) the questions at issue between the parties.”

It will be seen that a notice by the party under this section must specify the questions at issue between the parties and hence the trade dispute which is being referred to the Panel. In the present case the notice (the letter of the Union of 14th February, 1983) specified one question only, that is, wages. To refer back to the Schedule of the Act the “trade dispute” referred to the Panel was, then, a dispute under paragraph (a) as to “terms... of employment”.

Before I look at the other sections of the Act let me say something more about section 4(1). It is my opinion that it is that section which must be looked at if there is a suggestion that a Union does not have legal standing (locus standi) before the Tribunal as such a suggestion is, in effect, that the Union is not “a party to a trade dispute” within the terms of section 4(1). If the Union is not such a party any reference by it to the Panel is invalid for the purposes of section 4(1) and the Panel does not have jurisdiction. But that is not to say that to become “a party to a trade dispute” a Union must represent the entire work force or have a signed recognition agreement with the employer. In my view a union would be a party if it could establish that one or more employees were members of the Union in good standing and it was authorised to negotiate on his or their behalf. Such an interpretation is given to the meaning of “party” in the enforcement of an award by the Panel. Section 9 (2) (c) provides that a trade union is party to an award and it is enforceable against it “where the employees, or some of them, are members of (that) trade union”. It would be inequitable to say that such a union is a party to an award when it comes to enforcement, but it is not a party when it comes to referring a dispute to the panel prior to the award being made and I would not so hold unless the words of the Act constrained me so to do.

It follows that the Panel need not have been so concerned when they found that no recognition agreement had been concluded. The Panel were entitled, as is every tribunal, to enquire of their own motion into the locus standi of a party before it in order to consider questions of jurisdiction. As this court said in Kenilorea v. AG. ([1983] SILR 61; Civil Case 21/83 judgment given 11th April, 1983) in relation to constitutional cases “it is for (the) court to form its own judgment about the Applicant’s locus standi.”

The question then arises of whether or not the Panel went about that enquiry in the right way by ordering a ballot of the members. Power to order such a ballot is contained in section 5 of the Act. This provides:-

“5(1) In this Act, “recognition issue” means an issue arising from a request by a trade union for recognition by an employer, including (where recognition is already, given to some extent) a request for further recognition.

(2) Where a dispute including a recognition issue is referred to the Trade Disputes Panel, the panel may in such manner as they think fit, consult the employees in respect of whom recognition is sought to be granted; and the consultation may take the form of a ballot of the employees.”

Subsection (3) is not relevant.

The important words which create a condition precedent to the exercise of the power to order a ballot are “Where a dispute including a recognition issue is referred to the ....Panel”. Did the dispute referred in this case include “a recognition issue” as defined in section 5(1)? There has, to the knowledge of the court been no request from the trade union for recognition or further recognition; the employer has accepted the union as a negotiator without such a request. In other words it has recognized the Union. Further the dispute referred was expressly limited to wages and, in view of the clear terms of the notice and the indication at the outset of the hearing, it is difficult to argue that that dispute included a recognition issue. One does not want to create a situation where parties are strictly bound by the terms of their notices. There are, of course, situations when a dispute will contain more than one issue or a dispute may from its very nature require consideration by the Panel of other aspects of relationships between the parties. But it seems to me that section 4 of the Act as read with the Rules is intended to give everyone a clear indication of the nature of the issues before the Panel and to enable the parties themselves to define those issues. If one party refers only part of a dispute to the Panel the other party may refer the other part of the dispute to the Panel by its own notice and thereupon the Panel would have jurisdiction to consider all parts of the dispute. In my judgment however there is no power for the Panel of its own motion to take cognizance of a dispute or an issue that is in reality a different dispute to that formally referred to the Panel by a party or the parties.

In this case I find that recognition was not referred to the Panel as a trade dispute under section 4(1) of the Act and that the dispute so referred to the Panel did not include a recognition issue.

Indeed on the facts canvassed in this court (which may have appeared slightly different to the Panel) I also find that there is no dispute at all between the parties as to recognition. It follows that I must hold that the Panel did not have jurisdiction to deal with this dispute as though it included a recognition issue and, in particular, did not have power to order ballot under section 5(2) of the Act.

How does that affect the provisions of section 10 which are at the centre of this case? That section commences with the words “at any time when a trade dispute has been referred to the ... Panel”. These words are clear and must refer to the formal reference in a notice under the Rules which, as we have seen, defines the issues and therefore the nature of the trade dispute referred to the Panel. Section 10 thereafter refers to “the dispute” and in particular in subsection (2) (a) restricts the calling of a strike “in furtherance of the dispute”. These references to “the dispute” must refer back to the words with which section 10 commences and hence to a “trade dispute... referred to ... the Panel.” Those words seem to me to be clear on their face and limit the activity which is penalized by criminal and civil sanctions in section 10 to acts in furtherance of the dispute which has been validly referred to the Panel. It was argued on the basis of the mischief rule and the general intent of the Act as expressed in the preamble that I should have those words a wide meaning as prohibiting all kinds of active industrial hostility between the parties whilst any dispute is pending before the Panel. If Parliament had wanted, to create such a wide prohibition it could have done so by suitably wide words; for example, by omitting the words “in furtherance of the dispute” altogether. Instead there is a limitation throughout to “the dispute” and, to my mind, an, absence of ambiguity about the meaning of that limitation.

In my judgment therefore to establish contravention of section 10 it must be shown that the Respondent has done a thing mentioned in section 10 (1) in furtherance of the trade dispute which has been referred to the Panel. In this case the strike called was in furtherance of recognition. That, if it was a dispute at all, was not a dispute referred to the Panel. I therefore find that by calling that strike the Union was not in contravention of section 10 (1) of the Act.

I add this observation. The real issue in this court has been one of law and it is clear that the somewhat abrupt decision to strike was sparked off by the order of the Panel that the matter be dealt with as though there was a recognition issue. The result of that decision to strike have been loss to the Applicant, a worsening of the relationship between the parties, interim orders and lengthy court hearing. The proper course, may I respectfully suggest, would have been for the Union to enter an immediate appeal on a point of law to this court under section 13 of the Act which this court would have heard at short notice. The result of that appeal, as this case has now made apparent, would have been that the court would have set aside the order for ballot, invited the Panel to satisfy itself as to locus standi of the Union (which in view of the attitude of the Employer would not seem to be difficult) and then proceed to hear and determine the real dispute as to wages. May I recommend this course on a future occasion, should it arise?

In answer to the questions which I am asked to determine by the Summons I say:-

Question 1 (a) (Reading this question. as referring to sub-sections (1) and (2) of section 10) No.

(b) I would add at the end “and not including a recognition issue” and answer the question Yes.

Question 2 No.

Order: Application for compensation refused.

Interim order restricting the activities of Respondent is discharged.

Questions answered as aforesaid.

Mr Nori: I apply for costs.

Costs: No order in view of the fact that the Union should have proceeded by way of appeal.