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National Union of Factory and Commercial Workers v Biscuit Company Ltd [2012] FJET 55; ERT Misc. Application 23.2012 (10 July 2012)

IN THE EMPLOYMENT
TRIBUNAL AT SUVA

ERT Misc. Application No. 23 of 2012

BETWEEN:

NATIONAL UNION OF FACTORY AND COMMERCIAL WORKERS
APPLICANT

AND:

BISCUIT COMPANY LIMITED
RESPONDENT

Appearances:
Mr. D. Nair for the Applicant
Mr. N. Tofinga for the Respondent

RULING ON MOTION

The Motion

1] This is the Motion filed by the applicant union against the respondent employer for the following Orders:

a] That the respondent do comply with section 24 (a) & (b) of the Employment Relations Promulgation 2007 and provide employment to the applicant's seven (7) members who have been unfairly removed from their employment.

b] That in the alternative the respondent pays the applicant in respect of every day on which the employer so fails to provide work, wages at the same rate as if the worker had performed a day's work with effect from 17th March, 2012.

c] Any further order or relief which the Tribunal considers appropriate in the circumstances.

Affidavit in Support of Motion

2] The application is supported by the affidavit of Mr. John Mudaliar, General Secretary for the National Union of Factory & Commercial Workers Union.

3] Mr. Mudaliar deposed that on or about 19th March, 2012, he received several complaints from seven (7) of his members employed by the respondent that they have been relieved from their employment effective from 17th March, 2012. The respondent had decided to temporarily relieve the 7 employees from 17th March 2012 by issuing similar letters to all of them and that the respondent is relying upon a purported Temporary Employment Contract which was never signed by the said employees when they commenced their employment.

4] Mr. Mudaliar further deposed the fact that since the respondent had engaged the services of the said 7 employees, there was an implied employment contract between the employees and the employer. Furthermore, the 7 employees had become members of the applicant's Union; therefore their terms and conditions were governed by the Collective Agreement that was prevailing at the material time.

5] On the period of employment Mr. Mudaliar deposed that the said 7 employees had been working for the respondent for various period of employment and had legitimate expectation that their employment would continue as it was their only source of livelihood for them and their families. In that connection, the action of the employer in compelling the said 7 employees to leave their employment is in breach of section 24 (a) and (b) of the ERP, as the respondent was required by law to provide employment and failing which the employees should be paid the number of days the employer fails to provide work.

Affidavit in Response

6] Mr. Roneet Sudeshwar Lal the Human Resources Officer of the Flour Mills of Fiji Group of Companies prepared an affidavit in response and he deposed that the company had actually relieved 85 process workers, temporarily, from their duties at the Biscuit Company. The 7 employees under reference in the union's application are from among these 85 workers. That of these 85 workers, 12 workers were offered positions in the Flour Mills small packing department, milling department and chips department on the same conditions. Out of the 12 available positions 3 were offered to the 7 workers.

7] Mr. Lal further deposed that the 7 workers were recruited on an individual contract basis and their contracts were duly endorsed by the said employees and the employer respectively and renewed every 3 months. Mr. Lal explained that the Biscuit Company has been affected by a drop in anticipated orders from their Australian customers Metcash, Coles, Fonterra, Foodstuffs, Westintristar and Woolworth. That in Metcash alone 15 of their Australian branches are going to be closed and 478 employees are going to be made redundant.

8] The effect in Fiji according to Mr. Lal of the drop in orders, was a temporary surplus staffing situation that could not have been foreseen when the said workers temporary contracts were last renewed on 1st January, 2012. That was due to the fact that the Biscuit Company factory operation is planned on the annual forecasted orders supplied by all their customers, and that this forecast is then confirmed on a quarterly basis. That in recognition of the probable variation to the forecasted orders, operations are planned accordingly which consequently sees the need to recruit employees, on a temporary basis and have their tenure reviewed on a quarterly basis.

9] Mr. Lal deposed in his affidavit that what happened was that when the contracts of each of the respective workers under reference were renewed, the company was not in a position to foresee the downturn in orders because the quarterly confirmation from the customers only came in after February 2012. That although the trend since 2010 has always seen a slump in March and April, this year the orders dropped to $864,043.00 in comparison to $3,197,943.00 in 2011 and $4,457,882.00 in 2010.

Oral Submission

10] The applicant submits that the Motion is seeking an order of compliance pursuant to section 212 (1) (a) of the Employment Relations Promulgation 2007 (ERP) which provides the following:

(1) If a person has not observed or complied with-

(a) a provision of this Promulgation or an employment contract

the Tribunal may, by order, require a party to a proceeding to do or cease to do a specified thing or activity, for the purpose or preventing further non-compliance with the provision, order, determination, direction, decision or requirement, and must specify a time within which that order is to be obeyed.

11] The order of compliance is in respect to the application of section 24 (a) & (b) of the ERP which states the following:

Duty of employer to provide work

24. An employer must-

(a) unless the worker has broken his or her contract of service or the contract is frustrated or its performance prevented by an act of God, provide the worker with work in accordance with the contract during the period for which the contract is binding on a number of days equal to the number of working days expressly or impliedly provided form in the contract; and

(b) if the employer fails to provide work to the worker the employer, pay to the worker, in respect of every day on which the employer so fails, wages at the same rate as if the worker had performed a day's work.

12] The Applicant further submits that there was a valid employment contract existing between the employer and the 7 workers as shown by the last extension of 3 months ending on 31st March 2012. The "Employment Contract Extension Letters" refer to a certain employment contract entered individually at various dates between the workers and the respondent employer. A typical employment extension contract reads as follows:

Re: Employment Contract Extension

Your Temporary Employment Contract is hereby extended from 01/01/12 to 31/03/12.

All the other terms and conditions remain intact as per your employment contract dated 20/06/11 with relevant approved policy and procedures.

For further clarifications, please do contact the undersigned.

Yours faithfully,

Roneet lal

HR & IR Officer

13] On 16th March 2012 each of these 7 workers received a letter from the respondent employer advising that they have been relieved of their employment. The standard letter is as follows:

Re: Temporary Relieved of Employment

The BCF Management wishes to inform you that currently the company is going through harsh economical constraints due to the following reasons:

i] The Australian market is very weak, unable to generate sales.

ii] The Company has lost its Australian Market by 24% compared to December 2011.

iii] The Company has not regained its ALDI tender for Scotch Finger.

iv] The market will normalize by or before May 2012.

The operating cost for business has risen against orders for overseas market, since it is our major sales generator.

One such decision is to look at our manpower requirement to minimize cost; as such it is rather unfortunate that you are one of our employees whom the management has decided to temporary relieve of employment on "last in first out basis." Your last day of work shall be, Saturday 17th March, 2012.

Please note that this action is in accordance with Clause 15, of your Temporary Employment Contract and you will be paid a week's wages in lieu of notice, together with all other benefits owed to you.

Finally, on behalf of Management staff I take this opportunity to thank you for services to the Company and look forward to re-engaging you once customer demand improves.

Yours faithfully,

Ariff Mohammed

General Manager

Biscuit Company of Fiji Ltd.

14] The applicant argues that these workers should have been allowed to work until 31st March 2012 in accordance with the contract rather than being terminated through a verbal directive, without reasons not to report to work. The applicant says that the respondent employer is now attempting to justify the terminations with excuses like the non availability of orders and so on. These 7 workers have become members of the National Union of Factory and Commercial Workers and their terms and conditions of employment are covered by the relevant Collective Agreement.

15] The respondent submits that since the applicant is seeking an Order of Compliance, it must be given importance as it is similar to an application for an injunction and at the first call the parties are supposed to proceed with the substantive hearing. The reason for that is when a matter of compliance is called before a Court, the facts have to be undisputed.

16] The respondent then refers to the Affidavit in Support of the applicant at paragraph 3 where on 19th March 2012, the 7 workers who are members of the union complained that they have been relieved from their employment effective from 17th March 2012. The respondent submits that of the 7 workers relieved of their employment, 3 were offered positions in the packing department of Flour Mills, 2 are still in employment and other one left after spending just one day at work. This is explained in the respondent's Affidavit in Response at paragraph 8 and shows that the facts in this case are disputed.

17] The respondent further submits the applicant's Affidavit in Support at paragraph 5 alleges that the respondent relied on a purported temporary employment contract which was never signed by the 7 workers. The allegation has no firm basis according to the respondent as its "Annexure RL01" shows the signed contract of these workers. This is the second of the disputed facts and in that connection the application is unwarranted, has no merit and should be struck out.

18] The respondent rounded his evidence by explaining that he does not dispute the fact that there is a grievance but that it came into the Tribunal inappropriately as the facts are in dispute. For the Order of Compliance to be granted, the Tribunal must determine who is telling the truth on the balance of probability and that would require sworn evidence over one or the other.

19] The respondent continued that since the applicant has brought up section 24 of the ERP it must ask itself whether the parties foresee the situation that led to the laying off of workers when signing an employment contract or a Collective Agreement. This employer was not able to foresee the situation and that is the reason why these workers are on a 3 months temporary contract based on the need and exigency of the company. This employer needs to operate sustainably, it has no choice but to let the workers go and relieve them of their employment.

20] The applicant has the final reply and emphasized to the Tribunal that the union's case is about its 7 members who were verbally advised to stop reporting to work whilst they had valid employment contracts. That action was unjustified, unfair and unreasonable.

21] As to "Annexure RL01", the applicant says that it was just issued by the respondent employer and it is a temporary employment contract extension not signed by the 7 workers, and these same workers never signed any employment contract with this employer. Their case is on the fact that the responded prematurely relieved the workers of their duties without any written notification or advice and consequently under section 24 of the ERP is obligated to pay these workers the balance of their contracts. The applicant concluded by referring to the Collective Agreement which provides for the respondent to call the union in such situation and if the respondent had done that, the parties would not be in the Tribunal.

Analysis and Conclusion

22] The first issue as seen by the Tribunal is to decide whether this Motion is properly before it. From the oral and written submission, the respondent submits that whilst he agrees that the union has a grievance, it is not appropriately before the Tribunal as the facts are disputed. The Tribunal disagrees with the respondent as this Motion is brought under section 212 (1) (a) of the ERP in that .......the respondent employer has not observed a provision of this Promulgation or an employment contract and that the Tribunal may by Order require the employer to do such thing as to prevent further non-compliance.

23] The second issue is in relation to the disputed facts, that the Tribunal cannot validate the argument of the respondent that 3 of the workers were offered jobs, 2 took up the offer whilst the third one worked for a while before running away. That could be true but the fact of the matter is that they were all terminated together and the offer of jobs was subsequent to the complaints made by these workers to the union.

24] The third issue is the purported temporary employment contract signed between the respondent and the 7 workers before they joined the union. The Tribunal cannot find any evidence of this contract and therefore agrees with the applicant that there is no employment contract as the employer did not produce one to be affixed to its affidavit in support, and what it referred to in its submission as the employment contract, is in fact a copy of the extension letter of the temporary contract. Each of the 7 workers received this "Temporary Employment Contract Extension" up to 31st March 2012 but were terminated on 17th March and reported to the union on 19th March 2012.

25] The applicant argument is all along based on the breach of section 24 of the ERP whilst the respondent argued the question whether the parties to the contract were able to foresee the situation; like in this case the drop in sales. The respondent is engaged in the sales of consumer products and it is saying that it did not foresee the current situation, and that is the reason why these workers were engaged on 3 months contracts based on the need and exigency of the company due to the nature of the orders.

26] The Tribunal does not believe the argument of the respondent as first of all business by its very nature is full of risks, secondly the respondent is fully aware of the risks, and that is the very reason why these workers were on contracts for fixed tasks renewable after every 3 months.

27] The respondent saw it coming and it should have consulted the union on the desire to alter conditions of employment to cater for the movement in overseas markets. The respondent did not do that, it took the easy way out by relieving these workers of their employment which had about 2 weeks to run according to the latest extension of the temporary employment contracts. By doing that the respondent breached both sections 24 (a) and (b) of the ERP.

Ruling on Motion

28] The Tribunal finds that these 7 workers were engaged on a contract of service for a fixed task of 3 months at a time and the respondent action of relieving them from their work breached both sections 24 (a) and (b) of the Employment Relations Promulgation 2007. In that regard, the Tribunal Orders that the respondent pay to each of the workers the balance of the last extension of the temporary contract covering the period from 17th March to 31st March 2012.

The Tribunal also awards cost of $500 to the applicant

DATED at Suva this 10th day of July, 2012

Sainivalati Kuruduadua
Chief Tribunal