Solomon Islands National Union of Workers v Honiara Town Council [1989] SBHC 20; [1988-1989] SILR 43 (15 August 1989)

[1988-1989] SILR 43

IN THE HIGH COURT OF SOLOMON ISLANDS

Civil Case No. 266 of 1988

SOLOMON ISLANDS NATIONAL UNION OF WORKERS

v

HONIARA TOWN COUNCIL

High Court of Solomon Islands
(Ward C.J.)
Civil Case No. 266 of 1988

Hearing: 12 and 27 July 1989
Judgment: 15 August 1989

Application to High Court - whether termination of employment because of strike action constitutes unfair dismissal under section 2(1) of Unfair Dismissal Act 1987 - is there a right to strike under section 13(1) of the Constitution.

Facts:

The Applicant sought answers to ten questions which arose out of the Honiara Town Council's decision to dismiss its employees after they failed to return to work because of strike action. A collective agreement signed by Honiara Town Council and the Applicant made the former recognise the latter as the representative of its employees who decided to be members of the union. A dispute arose about the terms and conditions contained in that agreement and it was referred to the Trade Disputes Panel. The Panel made its findings and informed each party of the right of appeal. No appeal was made and one hundred and forty-four employees went on strike. The Council informed them that many, if not all of them, fell within the provisions of the Essential Services Act and were required to give twenty-eight days notice to strike and since no such notice had been given should return to work. Service messages were sent to the effect that any worker who did not return would be deemed to have dismissed himself. Those who did not return were given notice and an explanatory letter. This was not challenged within the three months period under the Unfair Dismissal Act. The Union sought answers to the following ten questions.

1. Whether termination of employment by an employer due to strike action by the employee constitutes unfair dismissal within the meaning of section 2(1) of the Unfair Dismissal Act 1987?

2. Whether the action of the employer in giving striking employees notice that their employment will be terminated by striking action can be regarded as reasonable within section 4(1)(b) of the Unfair Dismissal Act?

3. Whether strike action by an employee can constitute termination of employment by the employee and more particularly whether the giving of notice by the employer that the continuance of strike action will constitute termination of employment by the employee can in fact amount to termination by the employee in circumstances where the said employee has no intention to terminate his employment?

4. If the answer to 3 above is yes whether such termination falls within section 3(c) of the Unfair Dismissal Act 1982?

5. If the answer to 3 is no, whether the employee's contract still subsists and what are the legal consequences of such subsistence?

6. Whether section 13(1) of the Constitution confers on employees the right to strike (subject to section 13(2) of the Constitution)?

7. If the answer to 6 above is yes, whether the dismissal of a striking employee constitutes a breach of section 13(1)?

8. Whether different treatment afforded to employees attributable wholly or mainly to their membership of a union is discriminatory with section 15 of the Constitution?

9. Whether the employer's action in dismissing employees or alternatively deeming such employees to have dismissed themselves because of their strike action is discriminatory under section 15(2) of the Constitution'?

10. Whether, consequent upon the declaration or declarations made on any of the above questions the employees are entitled to return to their employment or alternatively to be reinstated in their employment and/or to damages.

Held:

(1) The position remains that the act of going on strike by an employee is a breach of contract and gives the employer the right to terminate the contract at will. Where an employer terminates a contract of employment because of strike action by the employee that, in itself does not constitute unfair dismissal. However, that does not exclude the possibility that, in a claim for unfair dismissal, the Panel would be entitled to consider the reasons for the strike and decide if the termination in that case amounted to unfair dismissal as could occur, for example, when the strike itself was because of an act by the employer in breach of the terms of the contract or in cases of selective re-employment.

(2) The act of striking is a breach of contract and therefore it is on the employer to decide whether to accept it as an end of the contract or allow the contract to continue despite the breach. Where he decides to accept it as a fundamental breach and regards the contract as ended, he has terminated the contract. Simmons v. Hoover Ltd [1977] I.C.R. 61 per Phillips J. at page 72 followed.

(3) It is true that, whilst the strike continues, the employer does not pay the employee and would not normally object to him taking other employment but the contract still continues until and unless an act of termination occurs. As long as both parties wish it to continue it will do so despite the fact the obligations under it are in abeyance. In some cases some obligations are still expected by the employer and accepted by the employee to continue during the strike such as may apply to the disclosure of trade secrets. That must mean the contract is still in existence.

(4) In general terms, a refusal to work is a fundamental breach of a contract of employment. Whether, in the terms of the Act, it is substantial enough to justify dismissal and the employer acted reasonably in treating it as sufficient to dismiss the employee is a matter of fact for the Panel to decide in each case including such matters as the reasons for the strike and any notice given.

(5) The law in Solomon Islands as in England is that a strike is a repudiatory breach of contract and can therefore justify dismissal.

(6) Section 13(1) of the Constitution does not give employees a right to strike. By allowing freedom to form associations for the protection of a person's interests, it cannot be said to allow activities of those organisations that may be unlawful.

(7) The Union had failed to take action through the normal means, i.e. the Trade Disputes Panel, and that being so could not seek the same remedy from the High Court. This type of action was not a suitable means of achieving the result the Union had failed to achieve by normal means.

Cases referred to:

Morgan v. Fry [1968] 2 Q.B. 710; [1968] 3 All E.R. 452
Rookes v. Barnard [1964] UKHL 1; [1964] A.C. 1129; [1964] 1 All E.R. 367
Simmons v. Hoover Ltd [1977] Q.B. 284; [1976] 3 W.L.R. 901; [1977] 1 All E.R. 775; [1977] I.C.R. 61

J. Corrin for the Applicant
D. Campbell for the Respondent

WARD CJ: By a collective agreement signed in August 1985, the Solomon Islands National Union of Workers was recognised by the Honiara Town Council as representing those of its employees who wished to be members of a Union.

A year later, on 27 August 1986, a dispute arose between the Council and its employees about the terms and conditions contained in that same agreement and it was, as a result, referred to the Trade Disputes Panel. The basic problem was that the Union requested an -across the board- increase of 10% but the Council claimed it had no money for this and so would not give any increase unless it was linked with a reduction in allowances.

On 9 October 1986, the Panel gave its "Findings" in which it reduced the allowances substantially on the general basis that they were higher than those paid by the Central Government or the Provincial Governments. The scales had been agreed by the Council in the collective agreement referred to only a year before and the workers considered the award harsh.

Although the Panel advised of a right of appeal, no appeal was, it appears, lodged and, instead, 144 of the employees went on strike on 27 October 1986. The same day, the Council wrote to its workers pointing out that many if not all of them came within the provisions of the Essential Services Act and were therefore required to give 28 days notice of a strike. No such notice had been given and they were advised to return to work immediately.

The next day a letter was delivered to the Union stating that any worker who did not turn up to work by 8.00 a.m. the next morning would be considered to have sacked himself. Service messages to this effect were put out by Solomon Islands Broadcasting Corporation twice each on the 27th and 28th and a notice was displayed outside the Council premises on 28th.

The next day the Council sent each of the employees who had not returned a dismissal notice and an explanatory letter.

That could have been challenged by the dismissed workers within three months under the Unfair Dismissal Act but it appears this was not done.

Instead the Union sought legal advice abroad which resulted in abortive proceedings in the High Court in mid 1987 and again in mid 1988.

The Union now seeks answers to a number of questions relating to the Unfair Dismissal Act and the Constitution, leave having been obtained for the latter.

"1. Whether termination of employment by an employer due to strike action by the employee constitutes unfair dismissal within the meaning of section 2(1) of the Unfair Dismissal Act 1982.

2. Whether the action of the employer in giving striking employees notice that their employment will be terminated by continuing strike action can be regarded as reasonable within section 4(1) (b) of the Unfair Dismissal Act 1982.

3. Whether strike action by an employee can constitute termination of employment by the employee and more particularly whether the giving of notice by the employer that the continuance of strike action will constitute termination of employment by the employee can in fact amount to termination by the employee in circumstances where the said employee has no intention to terminate his employment.

4. If the answer to 3 above is yes, whether such termination falls within section 3(c) of the Unfair Dismissal Act 1982.

5. If the answer to 3 above is no, whether the employee's contract still subsists and what are the legal consequences of such subsistence.

6. Whether section 13(1) of the Constitution confers on employees, the right to strike (subject to section 13(2) of the Constitution).

7. If the answer to 6 above is yes, whether the dismissal of a striking employee constitutes a breach of Section 13(1).

8. Whether different treatment afforded to employees attributable wholly or mainly to their membership of a Union is discriminatory with section 15 of the Constitution.

9. Whether the employer's action in dismissing employees or alternatively deeming such employees to have dismissed themselves because of their strike action is discriminatory under s.15 (2) of the Constitution.

10. Whether, consequent upon the declaration or declarations made on any of the above questions the employees are entitled to return to their employment or alternatively to be reinstated in their employment and/or to damages"

The questions are largely in general terms and Miss Corrin for the Union has argued the matter before the Court in similar terms. Mr Campbell for the Council has referred far more specifically to the facts of this case. Questions one to five relate to the Unfair Dismissal Act and, as such, could have been the subject of an action before the Trade Disputes Panel under the Act but no such proceedings were brought. The proceedings in this court cannot be a means of achieving such a hearing through another tribunal. Miss Corrin is right to keep her questions in general terms therefore. However, I consider those questions raise matters of general importance and so I shall endeavour to answer them.

Questions one and three require consideration of the position of a contract of service in relation to strike action.

Unfair dismissal under the Act requires, of course, a dismissal by the employer or a situation where the employee is entitled to terminate the contract without notice because of the employer's conduct.

The general common law principle of repudiation of contract has been considered in a series of cases in England which now set out the position, albeit rather inconsistently.

A review of those cases suggests that, despite a valiant attempt started by Denning LJ in Morgan v. Fry [1968] 3 All E.R. 452 a case on the tort of conspiracy, to suggest the strike suspends the contract, the position remains that the act of going on strike by an employee is a breach of contract and gives the employer the right to terminate the contract at will.

I feel that enables me to answer question one in a limited way. Where an employer terminates a contract of employment because of strike action by the employee, that in itself does not constitute unfair dismissal. However that does not exclude the possibility that, in a claim for unfair dismissal, the Panel would be entitled to consider the reasons for the strike and decide if the termination in that case amounted to unfair dismissal as could occur, for example, when the strike itself was because of an act by the employer in breach of the terms of the contract or in cases of selective re-employment.

Question three raises the further question whether, in the case of a strike, the employer can say that the striking employee has breached his contract in such a way as to have dismissed himself as was suggested in the notice sent to the employees in this case.

For some years it was considered that, where notice was given of intention to strike, the general rule did not apply and the notice was to be taken as notice of termination of the contract. Thus the employee terminated the contract if the strike went ahead. In the case of Rookes v. Barnard, [1964] UKHL 1; [1964] 1 All E.R. 367 the judges doubted this on the ground that, when an employee went on strike, neither he nor, usually, the employer wanted the contract to end and they intended the employment to continue at the end of the strike.

In this case, the employees clearly did not intend the strike to terminate their contracts and that the same applied to the employer is apparent from the notice to return to work. Clearly the Council still, at that time, regarded the strikers as its employees.

The question can be answered on the same basis as question one. The act of striking is a breach of contract and therefore it is on the employer to decide whether to accept it as an end of the contract or allow the contract to continue despite the breach. Where he decides to accept it as a fundamental breach and regards the contract as ended, he has terminated the contract.

Where, as here, he gives notice that the contract will be terminated if they do not return to work within a stated time and they fail to return, I do not consider the position has changed. The breach of contract was their act of going on strike. I cannot accept that, when they do not wish or intend to end the contract, the fact they are warned that the employer at a certain time will regard their action as repudiation can throw the onus of determination onto them.

The matter was dealt with in the case of Simmons v. Hoover Ltd [1977] LC.R. 61 at 72 where Phillips J, reading the judgment of the Appeal Tribunal, said -

"One of the matters considered at length by the Donovan Commission was the effect of strikes on the contract of employment. ...... it was clearly the view of the commission that at common law a contract cannot be terminated unilaterally and that if an employee refuses to carry on working under his contract of employment, his employer has the option either to ignore the breach of contract and to insist upon performance of it, or alternatively to accept such a fundamental breach as a repudiation of the contract and to treat himself as no longer bound by it. In our judgment this view was in accordance with general principle and supported by authority. In short, refusal to work during a strike did not involve self dismissal" by the strikers but left the parties to the contract hoping that the strike would one day be settled and the contract be alive unless and until the employer exercised his right to dismiss the employee."

The fact that the employer gives notice of his intention to terminate if the strike continues does not alter the employees' hope to return eventually to work.

Thus the answer to the second proposition in Question three is 'no'. The first part of that question is also generally answered in the negative but, worded as it is, it would not necessarily cover all cases.

I think that also sufficiently answers question five. It is true that, whilst the strike continues, the employer does not pay the employee and would not normally object to him taking other employment but the contract still continues until and unless an act of termination occurs. As long as both parties wish it to continue it will do so despite the fact the obligations under it are in abeyance. In some cases some obligations are still expected by the employer and accepted by the employee to continue during the strike such as may apply to the disclosure of trade secrets. That must mean the contract is still in existence.

The answer to question two must depend on the circumstances of each case. In general terms, a refusal to work is a fundamental breach of a contract of employment. Whether, in the terms of the Act, it is substantial enough to justify dismissal and the employer acted reasonably in treating it as sufficient to dismiss the employee is a matter of fact for the Panel to decide in each case including such matters I reason for the strike and any notice given.

Inasmuch as question two appears to be seeking the answer in relation to this case that was a matter to be determined by the Panel. The Union having failed to take that step, I do not feel these proceedings can be treated as an alternative remedy.

Questions six and seven refer to the " right to strike" in relation to section 13 of the Constitution Under English and Solomon Islands law, there is no such thing. Although the phrase is often used (even by judges e.g. Denning L.J. in Morgan v. Fry) it is not a technical term of art but a convenient term describe the various matters by which strikers and union officials may be protected from the consequence of various aspects of the law. Such protection is found, for example, in section 59 of our Trade Unions Act.

In some countries a clear right to strike is written into the Constitution. In such cases the employees who strikes cannot be considered to be in breach of his contract for, if his contract was terminated by the strike or if it allowed the employer to terminate it, such a right would be frustrated. As a result, in many of those countries the contract is taken as being suspended during the strike and this was part of the basis of Lord Denning's attempts to introduce such a concept in Morgan v. Fry.

What exists in England is the freedom to strike. It has always been the common law position that any person has the right to withdraw from a contract by the unilateral act of terminating his contract. It is largely based on this concept that the Unfair Dismissal Act has introduced the situation that, whilst dismissal of a striker is lawful, there is still scope for it to be considered unfair although, as I have stated already, general principle is that the employer is not liable for unfair dismissal during a strike.

Thus, the law in Solomon Islands as in England is that a strike is a repudiatory breach of contract and can therefore justify dismissal. However, Miss Corrin asks if section 13 of the Constitution does in fact give a right to strike. The Constitution is the Supreme Law and if the provisions of any other law are inconsistent with it they are void to that extent.

Section 13(1) reads-

"Except with his own consent, no person shall be hindered in the enjoyment of his freedom of assembly and association, that is to say, his right to assemble freely and associate with other persons and in particular to form or belong to political parties or to form or belong to trade unions or other associations for the protection of his interests."

This freedom of assembly and association or, as it is frequently expressed, of organisation is a fundamental right in many constitutions and international conventions and declarations. In terms of lab law, it protects the right of employees and employers to form and join organisations for the protection their social and economic interests. Subsection (2) of section 13 imposes limitations that may affect some parts of the community such as the police or public officers but, in general terms, it is an unfettered right.

However, the wording is clear and I cannot feel that any reading of it can extend to covering right to strike. By allowing freedom to form associations for the protection of a person's interests, it cannot be said to allow any activities of those organisations that may be unlawful. Neither can it be read meaning that by forming an association for a particular purpose, the purpose itself is given the same protection.

Equally it is important to remember that, whilst trade unions and strikes are often frequently associated the one with the other, freedom to strike is not confined to unions any more than the fact striking is the sole activity of unions.

The answer to question six is 'no' and therefore question seven does not arise.

The question posed by question eight does not seem to me to relate to this case at all. The only evidence I have before me relates to the treatment given to a number of employees who went on strike. Whether or not they were union members, the treatment was not directed at them solely because of that membership. I regard the question as purely academic in the context of this action and I decline to answer it.

Question nine relates to section 15 of the Constitution. Subsection 2 of that section reads:

"Subject to the provisions of subsections (7), (8) and (9) of this section, no person shall be treated in a discriminatory manner by any person acting by virtue of any written law or in the performance of the functions of any public office or any public authority."

Miss Corrin simply tells the court she does not put much reliance on this question and does not argue it further. I have read the subsection with care and cannot find any way in which the dismissal of the employees as described in the affidavits could fall within subsection 2. The answer is 'no'.

Insofar as selective re-employment occurred, as the court was told by Miss Corrin, that is a matter for the Panel to consider when deciding if the dismissal was unfair. I do not feel it falls within the ambit of this part of the Constitution.

Question ten seeks a statement as to the remedies available to the members of the plaintiff. It may be regarded as the most important question as far as they are concerned.

Had I found any breaches of the protective provisions of the Constitution, I could still have declined an order because there had been adequate means of redress available through the Trade Disputes Panel.

The answers to questions one to five I think clearly state the position. The limited evidence suggests the employees were dismissed. Whether or not that was unfair in the circumstances and, if so, whether there is a right of reinstatement or any other remedy under the Unfair Dismissal Act, was a matter the Panel could have decided.

I sympathise with the Union in the difficulties it faced regarding legal advice. However, it is an organisation well used to the Panel and the Trade Disputes and Unfair Dismissal Acts. Had they appealed under the one or brought an action under the other, they could have sought the answer to Question 10.

This court has not heard sufficient evidence to decide the matter and would not, anyway, regard this type of action as a suitable means of achieving the result the Union has failed to achieve by normal means.

In all the circumstances, I feel the correct order must be no order for costs.