DC116

PAPUA NEW GUINEA
[IN THE DISTRICT COURT OF JUSTICE]

CASE NO 2635 OF 2002

AMALGAMATED GENERAL WORKERS UNION OF
PAPUA NEW GUINEA
Complainant

AND

PAT ANA POOL DOCTOR LIMITED
Defendant

PORT MORESBY

D. Wakikura, Magistrate

Industrial Organizations Act - Notice to remit deductions - Validity of Form and prescription - Right to sue for debts recoverable - Variation on wording of Form 15. -Registrar to approve the alterations - Only the Registrar will direct or approve any other form not prescribed.

Statutes
Industrial Organizations Act District Courts Act

Cases Cited
No cases cited

Counsel
The Complainant, Mr. David Tambili (L TI)
The Defendant, Mr. Meli Muga

19 April, 2004

REASON FOR DECISION

D. Wakikura: This matter came before me by way of a default summons in respect of a debt of K1, 540.00 payable by the defendant company as due payments for some the defendant's employees who are members of the complainant organization. The complaint was for a liquidated demand and the defendant was summonsed under section 156 of the District Courts Act. The complainant in this matter is a registered trade union established under the Industrial Organizations Act and the defendant is a company duly incorporated under the Companies Act.

The complainant served on the defendant fourteen 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 22nd May, 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, which I will quote and discuss later, the fourteen Form 15s were served on the defendant to deduct and remit the monies owing which the defendant failed to do so.

The defendants contended that the fourteen members were not in the employ of the defendant from 2000 to 2002 and also that the application for membership is only for a year and does not apply for the consecutive years. They also raised that the Form 15s used by the complainant was not the prescribed form thus making the form void and of no effect. Thus this matter was on the whole contested and the matter proceeded to trial.

This court in this matter will determine whether the fourteen members were in fact employees of the defendant at the material times and whether the forms used by the complainant were valid and of effect for all purposes. Secondly whether 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 of Mr. Andrew Kandakasi the General Secretary of the Complainant Union and the defendant called the evidence of Alan Beagrie as the Managing Director for the Defendant Company. Both counsel consented that this court will consider the affidavits and their written submissions and to proceed with a ruling based on that.

Mr. Andrew Kandakasi as the General Secretary for the complainant deposed that the fourteen employees of the Defendant came forward freely on their free will between April 15th 2000 and 03rd April 2000, to fill in the application forms to be registered as members of the complainant union. The Secretary of the complainant union approved their applications and consequently the 26 Notices to deduct their Union Contributions were served on the Defendant Company on 22nd of May 2000.

All the Form 15s of all the alleged members were tendered as evidence and duly signed by the employees between various dates in March and April 2000. For all of them their membership applications were approved by the complainant union on the 15th of May 2000. The forms all had the alteration included as alleged by the defendants namely, "from the union", inserted instead of "from me" which is properly highlighted and discussed below.

Mr. Kandakasi stated further that the Defendant as the employer failed to deduct K2.00 per person per fortnight and remit them to the Complainant as union fees. As at the filing the complaint in this matter the amount owing to the Complainant was K 1, 456.00. The Complainant since then has been sending monthly invoices with the list of members to the Defendant who chose to ignore without disclosing any reason to the complainant.

Mr. Kandakasi stated that at no time the Complainant was notified of any resignation of the concerned employees. It is in the rules of the Complainant union that any member who seeks to resign from the union should give notice of his intention at least three months in advance.

For the Defendants, Mr. Alan Beagrie as the Managing Director for the Defendant Company gave evidence to say that most of the fourteen members were employed on a casual basis and had either resigned or left the employ of the defendant in various periods in 2000 to 2002. Although the defendant had received monthly reminder statements from the complainant for the year 2001 and 2002, it did not deduct on the basis that the members had either resigned, terminated or ceased employment between 1999 and 2002.

The fourteen were free to leave the employ of the Defendant whenever they please and they were, however, paid for the time in which they worked whilst in employment. Most of them had either resigned or deserted their employment as such it was not practical to deduct when the notices and the reminder statements came. It was the responsibility of the members to remind and notify the complainant of their resignation and it was the complainant's responsibility to update their membership records.

From both sides all these appear to be the argument as presented to me and there is no question that the fourteen members were accepted as members of the complainant union upon their application. There is also no question that the defendant received the notices to deduct and remit monies for the fourteen members as well as the monthly statements from the complainant. The defendant had since then failed to deduct and remit the monies owing as union membership fees.

The defendant was not able to deduct and remit the monies that the complainant was claiming for the reason that the memberships were no longer with them in employment. They would not be deducting monies for somebody who was no longer with them and also they would not deduct when the form 15s used by the complainant were not properly prescribed statutory forms.

The obligation to deduct for union membership fees is a statutory requirement laid down by law in section 63A of the Industrial Organisations Act (hereafter referred to as the Act or Regulations). In Sub-section (1) this is what it 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.

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. 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 due and owing as union fees. This section does not apply to an employer employing nine or less persons.

Upon receipt of a notice signed by the employee in the prescribed form, the employer is to deduct the employee's contributions to the union named in the notice. The prescribed form is also clearly laid out in the Regulations in section 20A and this is what it reads;

20A.	Notification to Deduct Union Contributions.

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

Section 63A of the Act as highlighted and discussed above and 20A of the Regulations form the legal basis for the use of such forms. Section 21 of the Regulations provides for the lack of the prescribed form and this is what it reads;

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 21 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.

This particular provision in section 20A of the Regulations complements section 63A of the Act and introduces form 15 as the form that is to be used. The form itself is prescribed in schedule 1 of the Regulations and this is what it looks like in form;

PAPUA NEW GUINEA. Industrial Organizations Act 1962.
Form 15.

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

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.)

(Emphasis in mine)

This notice in Form 15 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. As emphasized above in the form, the alterations being the subject of this case concern this particular clause.

In this case I find from evidence concerning the use of Form 15 that there is a slight change and variation in the wording used. The change of wording are found as emphasized above in the line that reads "contrary instructions from me", in the statutory form and changed to "contrary instructions from the union", as used in the forms. The wording in the Act is "contrary instructions from me" and the insertion is "contrary instructions from the union". I am mindful of the difference in the tone and the implication of the form as a result of such variation or alteration. There is a lot of difference that can be created in the application and the effect of such a variation. The instruction to deduct comes from the employee whose money that is to be deducted to the named union.

The intention of the legislation for the use of Form 15 is for the employee who is a member of an industrial organization to authorize the employer to deduct and remit union membership fees. Such an authority is to come from the employee whose money that is which is to be deducted to pay to the concerned industrial organization. It is not for a union in this circumstance to authorize such a deduction but rather the employee who is a member of the industrial organization.

In our case if the defendant had seriously taken issue on the validity of the forms used, then he could have raised that up before this case was instituted. 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.

Without the defendants taking issue on the use of the altered forms before coming into court, that argument alone cannot stand. They cannot deviate from their statutory obligation to deduct because of the slight variation and if they had not taken issue on it before coming into court. The fact that they were silent about the defect until they are in court seems to me that it was not an issue then at the time until they are now in court. In an earlier case between this same complainant and Port Moresby Transport (Case No. DC: 2633/02) I made a judgement for the defendant because they had taken up the same issue even before coming into court.

The other issue presented by the defendants is that the members were not in their employ at the material times when the notices were served on them. I note from evidence that the employees applied for membership in March and April of 2000 and their applications were approved in May 2000. The notices to deduct were served on the defendant on the 22nd of May 2000, which appears to be within the same month of the approval of their applications.

This indicates to me that the members were still in employment when they signed the application if all that took place within that same frame of time. If the member was not in employ, then why would he sign falsely to defraud the defendant and if that was so why didn't the defendant take issue on that before coming into court. I also do not accept as authentic the hand written notices by the certain employees of the defendant. Although it may not be the duty of the defendants to advise the complainants of the employment status of the members, it would have been good business practice to communicate that on behalf of the members to avoid deduction notices or this lengthy litigation or the risk of undue deductions.

As submitted to me the question of the union membership from the rules of the complainant union I note that membership is a one time application that carries on from year into the other year. The way I see it, is that the membership continues from the time his application is approved until he ceases to be a member for whatever reason.

On the balance of what has been presented to me I find the process is proper and the complainants are entitled under law to recoup monies owing as union membership fees. It is proper for them to claim and so I find the defendants liable and will accordingly enter judgement for the complainants.

Since this is a liquidated demand for a specific sum of money I will proceed to make orders for the defendant to pay to the complainant the full amount claimed with 8% per annum interest. I make no orders as to costs and parties will meet their own costs for these proceedings.

Orders accordingly.

Lawyers for the Complainant: L TI Legal Aid Program.
Lawyers for the Defendant: Pacific Legal Group