DC117

PAPUA NEW GUINEA
[IN THE DISTRICT COURT OF JUSTICE]

CASE NO 2364 OF 2002

AMALGAMATED GENERAL WORKERS UNION OF
PAPUA NEW GUINEA
Complainant

AND

R.B.S (PNG) LIMITED
Defendant

PORT MORESBY

D Wakikura, Magistrate
18 August 2003

Industrial Organizations Act - Service of notice to remit deductions - Form and prescription - Right to sue for debts recoverable - Authority to deduct and remit for the union membership fees.

Statutes
Industrial Organizations Act
District Courts Act

Cases Cited
No cases cited

Counsel
The Complainant, Mr. David Tambili (L TI)
The Defendant, Mr. Michael Wagambi 

18 August 2003

REASON FOR DECISION

D. Wakikura: This matter came before me by way of a default summons in respect of a debt of KS, 472.00 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 forty -eight Form 15s duly signed by the defendant's employees as members of the complainant union thereby authorizing the defendant to deduct and remit 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 18th April 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 forty-eight Form 15s were served on the defendant to remit and the defendant failed to deduct and remit such monies.

The defendants deny that such notices were served on them and contended that the allegedly signed Form 15s were never served on them. They had no knowledge of the complainant's demands, as they were not properly served the notices to deduct and remit the union membership fees. Thus this matter was on the whole contested and the matter proceeded to trial.

This court in this matter will determine whether the defendant had proper knowledge of the signed Form 15s authorizing them to deduct and remit as union fees. In other words did the defendants knowingly fail to deduct and remit the membership contributions to the complainant for their employees?

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

Andrew Kandakasi deposed for the complainant in his affidavit that forty-eight employees of the defendant company came freely at their own will between 10th January 2000 and 03rd April 2000 to fill in the application forms to be registered as members of the union. The Secretary of the Union then approved their applications and their notices to deduct their union contributions were served on the defendant on the 18th April 2000. The defendant since then failed to deduct and remit the K2.00 per person to the complainant and the defendant offered no explanation for such failure.

Karim Merchant for the defendant on the other hand deposed in his affidavit that as Finance Manager of the defendant his duties include daily office management, staff welfare and payroll matters including any calculations for deduction for various matters. In relation to union membership deductions he had not received any Form 15s or the deduction forms for him to commence deductions.

As the officer tasked with the payroll matters he could not deduct moneys from the staff or employee's without the authority of the staff or employee concerned. He confirmed that he did not receive any Union deduction forms (Form 15s) signed by the employees of the defendant authorizing the defendant company to deduct and remit union membership fees.

In cross-examination Mr. Kandakasi was asked how the notices were served on the defendant to whom he replied that they were hand delivered. He was pressed further to prove such service and he answered to say it might have been an oversight on his part.

Mr. Merchant on the other hand rose in the examinations that the employees did not notify the defendant directly to deduct. He also rose that some of the named employees were employees of a security firm contracted to provide security. He maintained that he could not deduct without the employee's authorization. He also mentioned that he commence on his job in June 2002 which would be about two months from the time the complainant alleges the Form 15s were lodged to the defendant.

I note that there were correspondences and communication between the complainant and the defendant concerning this subject which do not appear the parties were ready to settle. A similar attitude of animosity was evidence throughout this proceeding. This is yet another case of one's word against another's which places me in a position to deliberate on what has so been presented to me.

It appears the named employees are members of the complainant union as evidenced by the Form 15s. The defendant knew that some of its employees had signed up as members of the complainant union if not from the notices to deduct then obviously from the correspondences and various notices sent.

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 (I) 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. Under this provision an employer must deduct as soon as he is in receipt of the notice in prescribed form and a failure becomes a punishable offence.

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 (I) 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 issuance 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 the defendant's contention that they were not served the Form 15s and also that some the named members were on contract with the defendant.

The question now is would these mentioned reasons form a valid basis for not paying a due, which is under an obligation by law. It would have been proper and became a real basis in the circumstances for the defendant not to pay if the defendant did not have any other notice of any nature. It has been mentioned here that the notices were not served on the defendant and Mr. Kandakasi said that he did not make a record of such service, which was an oversight on his part. To say that it was an oversight also cannot stand if one is to conduct business and he has to keep records.

It would have also been prudent for the defendant to enquire into the validity of the notices and the invoices that were sent to the defendant by the complainant. The defendant could have seriously questioned the invoices from the complainant without the notice to deduct and even ask for the notices to be properly served on them. This time consuming and costly litigation could have been avoided.

I do not think the complainant would have raised the invoices and sent to the defendant without first lodging the notices for deduction on the defendant first. It would amount to a fraud if the complainant was collecting monies without properly notice under law. It is very obvious that the notices were served at the time when Mr. Merchant was not yet in office and that seems to be one reason he had no knowledge of the Form 15s. Even then when he was in the office there were correspondences and dialogue from the complainant on this very subject.

All these appears to me that the defendant knew that some of its employees were members of the complainant union and that they would be obliged to remit deductions for union membership fees. I believe the defendant had knowledge of their employees being members of the complainant union and likewise they had an obligation under law to deduct and remit union fees.

In the other issue Mr. Merchant for the defendant stated emphatically that he could not as the payroll officer, deduct without direct authorization by the employees themselves and I totally agree with that. In this case I see such authorization in the Form 15 as signed by the employees when they first applied to be members. The signature of the employee on the Form 15 is sufficient authorization in my view and that cannot be an excuse. The law in section 63A (1) says an employer must deduct from the date of the receipt of the Form 15 signed by the employee.

I am of the opinion that defendant knew of their employees membership with the complainant and with that I find the defendant liable and I will now proceed to enter a judgment for the complainant in this matter. We will need a proper submission to consider which employees are under contract with the defendant so that deduction would not affect them and I will adjourn to consider how much is to be paid.

Orders accordingly.

Lawyers for the Complainant: Legal Training Institute
Lawyers for the Defendant: Blake Dawson Waldron