DC118

PAPUA NEW GUINEA
[IN THE DISTRICT COURT OF JUSTICE]

CASE NO 2886 OF 2002

AMALGAMATED GENERAL WORKERS UNION OF 
PAPUA NEW GUINEA
Complainant

AND

TANPAC (PNG) LIMITED
Defendant

PORT MORESBY

D Wakikura
18 August 2003

Industrial Organizations Act - Notice to remit deductions - Validity of Form and prescription - Right to sue for debts recoverable - Variation on wording of Form 15.

Statutes
Industrial Organizations Act
District Courts Act

Cases Cited
No cases cited

Counsel
The Complainant, Mr. David Tambili (L TI) 
The Defendant, Ms. Florence Willie 

15 August 2003

REASON FOR DECISION

D. Wakikura: This matter came before me by way of a default summons in respect of a debt of K584.00 payable by the defendant company as due payments for some the defendants employees who are members of the complainant organization. The complainant in this matter is a registered trade union established under the Industrial Organizations Act and the defendant is a company incorporated under the Companies Act.

The complainant served on the defendant the Form 15s duly signed by the defendant's employees as members of the complainant union thereby authorizing the defendant to deduct and remit to a sum of K2.00 each per fortnight as union fees. It is alleged that the signed forms were lodged to the defendant on or about the 29th August 2000 but the defendant however defaulted in the repayment and the amount owing accrued and this case eventuated as a result. Pursuant to section 63A of the Industrial Organizations Act the eleven Form 15s were served on the defendant to remit and the defendant failed to deduct and remit such monies.

The defendants contended that the names contained in the list were no longer employed with the defendant and also that the Form 15s used by the complainant was not the prescribed Form. Thus this matter was on the whole contested and the matter proceeded to trial.

This court in this matter will determine whether the monies claimed by the complainant were rightly due and that whether the defendant genuinely defaulted in remitting the fees due.

The complainant called the evidence Andrew Kandakasi the General Secretary of the Complainant Union. The defendant called the evidence of Vilma Socan as the Finance Manager of the Defendant Company. Both counsels were then heard on their written submissions and I have considered both the evidence and the submissions.

Mr. Kandakasi deposed in his affidavit that eleven employees of the defendant company came freely at their free will to apply for membership. They filled in the application forms to be registered members of the union between nod June and 31st July 2000. The Secretary of the Union then approved their applications and notice to deduct their union contributions were served on the defendant on the 29th August 2000. The defendant since then failed to deduct and remit the K2.00 per person to the complainant.

Vilma Socan for the defendant deposed in her affidavit that as Finance Manager her duties include daily office management, staff welfare and payroll matters including calculation and deductions for various matters. She noted that some of the employees of the defendant had resigned and she accordingly advised the union through fax dated the 14th November 2003.

She further stated in her affidavit that a further list was sent by the union and upon enquiry with the named employees, she was told the employees did not wish to be members of the Union. The members did not wish to have their pay deducted for Worker Union fees. As the officer tasked with payroll matters she cannot deduct monies from the staff or employee without the authority of the staff or employee concerned.

Counsel for the defendant submitted that employees were not properly verified as some had resigned and most had indicated that they did not wish to have their pays deducted for union fees. She also highlighted in the submission that the Form 15s used by the union fees could not be valid as they were not as prescribed by law.

The complainant is saying that when the employees of the defendant signed up for membership the notice to deduct was immediately lodged with the defendant. After that subsequent notices by way of invoices were sent to the defendant with no payment or response. The defendant on the other hand is saying they had to receive such notices until about a year later that such when notices continually came to them. The defendants also are saying that they were unable to deduct and remit as some of their named employees had resigned and that the forms used were not the legally prescribed Form 15s.

In the examinations I noted that both deponents from each of the sides appeared to be evasive on some questions put in cross-examination. I also realized it becoming a little confrontational when the witnesses were pressed on by counsel in the examinations. However each side kept to his version of their stories so it has placed me in a position of deciding on a case of one witness testimony against the other.

I find from what as been presented that certain employees of the defendant did apply to members of the complainant union. The notices to deduct and remit contributions as required from the members were lodged with the defendant. The defendant has not since then deducted and remitted to the complainant the prescribed union membership fees. Some of the members have since resigned after the notices were lodged with the defendant. I also note that both parties in this matter have not properly notified each other of changes with the arrangements.

The parties have very much raised issue on the use of the Form 15 and it best to have that highlighted here and have it discussed further. We will basically look at what is prescribed and formatted in the Act and also have a look at what the complainant has been using.

I also find concerning the use of Form 15 that there is a slight change in the wording used, which are "contrary instructions from me", in the statutory form and "contrary instructions from the union", in the forms used. The wording in the Act is "contrary instructions from me" and the insertion is "contrary instructions from the union". This issue will be discussed later in this disposition.

This is what the format of Form 15 looks as found in the Regulations of the Act:

PAPUA NEW GUINEA
Industrial Organizations Act 1962

FORM 15

Act, Sec. 63A. Reg., Sec. 20A.

NOTICE TO DEDUCT UNION CONTRIBUTIONS.

To (name and address of employer)
From (name and address of employee)

You are required to deduct (state amount to be deducted) from my wages or salary each (state week, fortnight or month, etc.) and to pay the amount deducted to (name and address of industrial organization) until you receive contrary instructions from me.

Dated. . ., 20...
(Signature of Employer)

(Underlining and emphasis are mine)

This notice is suppose to be from the employee to the employer requiring the employer to deduct union membership fees on either a weekly, fortnightly or monthly basis to a named industrial organization. This notice has to be signed by the concerned employee and that becomes the authority to deduct for union contributions.

With that we go on to consider the legal basis applicable and the entire provision in section 63A of the Industrial Organizations Act (hereafter the Act or Regulation) will be looked at to appreciate the legal basis of the issues raised. This is basically what this particular provision in its entirety reads:

63A.	Collection of union contributions by employers.

(1)	An employer must, as from the date of receipt of a notice in the prescribed form signed by an employee, deduct from any moneys from time to time payable by the employer to that employee contributions payable by that employee to the industrial organization named in the notice.
Penalty: A fine not exceeding K200.00.
Default Penalty: A fine not exceeding K50.00.
(2)	An employer making a deduction in accordance with Subsection (1) shall, subject to Subsection (3), pay the amount deducted to the industrial organization named in the notice within 35 days of making the deduction.
(3)	An amount not paid by an employer to an industrial organization in accordance with Subsection (2) may be sued for by the industrial organization as a debt due to that industrial organization.
(4)	Nothing in this section authorizes-
(a)	an industrial organization or its agents or its members to coerce or otherwise require any person who is not a member of an industrial organization to sign a notice for the purposes of Subsection (1); or
(b)	an employee to sign a notice permitting deductions for payment to any industrial organization of which he is not a member.
(5)	This section does not apply to an employer employing nine or less persons.

Sub-Section (1) makes non-payment of monies as an offence punishable by a monetary fine and a monetary default fine as well. Such payments of monies must be made within 35 days under Sub-Section (2). In Sub-Section (3) any concerned industrial organization has the discretion to sue an employer for the recovery of the unpaid monies. This section does not apply to an employer employing nine or less persons.

Section 63A of the Act as highlighted and discussed above and 20A of the Regulation form the legal basis for the use such forms. Section 21 of the Regulations provides for the lack of the prescribed form.

This is what sections 20A and 21 of the Regulations respectively read as follows:

20A.	Notification to Deduct Union Contributions

A notice under Section 63A (1) of the Act shall be in Form 15.

21.	Lack of prescribed form.

Where-
(a)	A form is not prescribed for a document; or
(b)	A prescribed form is not suitable to the circumstances of a particular case, the form shall be such as the Registrar directs or approves for the purpose.

From these two provisions we note that the notice to deduct union contributions shall be in Form 15 and if there is a lack of the prescribed form, then section 21 comes into play. Under section where a form is not prescribed or a form is not suitable to the circumstances of a particular case then the form used must be as directed or approved by the Registrar.

The complainant has by right sued under section 63A (3) of the Industrial Organizations Act to recoup monies owing through default in payment. This proceeding was initiated under Part VII Division 3 of the District Courts Act, which lays down the requirements and procedures for the issue of default summonses, which involve debts or liquidated demands in money. As it seems the complainant has rightly sued for monies owing through non-deduction and remittance of union fees.

There is evidence that shows that the defendant's employees signed up to be members of the complainant union and their union contributions have not been deducted and remitted to the complainant. The non-payment by the defendant attributed from one of which is resignation of some of the employees and two is the use of wrong forms to authorize deductions. The complainant has rightly demanded payment and the defendant have used the above two reasons to either not pay or basically delay payment.

The question now is would reasons mentioned form a valid basis for not paying a due, which is under an obligation by law. It would have been proper in the circumstances for the defendant to notify the complainant that a particular named employee was no longer employed by them. This would then put the complainant on notice that fees would not be demanded for the particular member. This as it seems to me is a matter of simple correspondence, which could have avoided this costly and time-consuming litigation.

The other issue that has been raised on the question of the validity of the Form 15 is another thing, which the parties could have sorted out. The use of the incorrect form cannot be an excuse for not paying union fees. If it really was an issue why didn't the defendants attempt to address that earlier rather than to come into court and say that they cannot pay or were not able to pay because the form was not valid?

I take the view that if the complainant has amended or alter the form their use and if that was approved by the registrar then it becomes a valid form for that purpose. I agree with the counsel for the complainant that the altering of the form cannot be an excuse by the defendant to honour its statutory duty of remitting membership contributions to the union.

I am mindful of the difference in the tone and the implication of the form as a result of such variation but that could become a matter in itself, which the parties can negotiate or channel it through a proper avenue for rectification. The deduction and remittance of membership contributions to an industrial organization is a statutory requirement and in my view that requirement should not be waived for a defect in a prescribed forms. I think that such defects can be rectified through communication, understanding and consensus. While we are here for a debt owing I must say that there is no question about such debts owing and due as there remains some unpaid union contributions. With that I now proceed to enter a judgment for the complainant against the defendant.

There is also evidence that some of the members named in the notices have left employment and for that I will allow for submissions how much should be paid for the concerned members and for the specific period. I will therefore adjourn to hear submissions for that matter.

Orders accordingly.

Lawyers for the Complainant: Legal Training Institute
Lawyers for the Defendant: Employers Federation of PNG