DC115

PAPUA NEW GUINEA
[IN THE DISTRICT COURT OF JUSTICE]

CASE NO 2639 OF 2002

AMALGAMATED GENERAL WORKERS UNION OF
PAPUA NEW GUINEA
Complainant

AND

GUARD DOG SECURITY SERVICES
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
Mr. David Tambili (L TI), Complainant 
Mr. Meli Muga, Defendant

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, 456.00 payable by the defendant company as due payments for some of the defendants 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 26 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 31st of May 2001, 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 26 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 twenty-six members were not in the employ of the defendant from 1998 to 2002. 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 where parties submitted affidavit evidence.

This court in this matter will determine whether the twenty-six members were in fact employees of the defendant at the time 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 Mr. Brian Treloar as the Operations Manager for the Defendant Company. Both counsel consented that this court would consider the affidavits and their written submissions and proceed with a ruling based on that.

Mr. Andrew Kandakasi as the General Secretary for the complainant deposed to in his affidavit that twenty-six employees of the Defendant came forward freely on their free will in between the 14th of April 1998 and 08th of December 1999, to fill in the application forms to be registered as members of the complainant union. The Secretary of the union approved their applications and consequently the 26 Notices to deduct their Union Contributions were served on the Defendant Company on 31st May 2001.

All the Form 15s of all the alleged members were tendered as evidence and duly signed by the employees between various dates in 1998 and 1999. For all of them the memberships were approved by the complainant on the 25th of May 2001. The forms all had the alteration included as alleged by the defendants namely, "from the union", inserted instead of "from me" in the forms, which I will discuss later.

Mr. Kandakasi stated 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 K1, 456.00. The Complainant since then has been sending monthly invoices with the list of members to the Defendant who chose to ignore without any valid reason forwarded to the complainants.

Mr. Kandakasi stated further 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. Brian Treloar is its Accountant and he gave evidence to say that during the period of, on or about April 1998 and on or about November 1999 the defendant had employed the twenty-six employees at one stage. At that time the defendant was not served with the Form 15s of the twenty-six members.

The twenty-six members had either resigned at their own accord, terminated from the employment of the defendant and or had deserted their employment. It was their duty to inform the complainant that they had ceased their employment with the defendant. 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 dismissal notices of certain members with the applications for resignation notices for other members were tendered by the defendants as evidence. Most of those notices for either dismissal or resignation were from various dates in 1999 to 2002.

Mr. Treloar deposed to in his evidence that with advice from his lawyers the Form 15s used by the complainant were not the prescribed forms and is contrary to the prescribed statutory form. He also stated that Section 7 of the Union Rules provides for the duration of membership, which in their case ran from April 1999 to April 2001. His understanding was that the twenty-six members would have to apply again after the expiry of one year from the date in which the union approved their application.

From both sides all these appear to be the argument as presented to me and there is no question that the twenty-six 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 twenty-six members. The defendant had since then failed to deduct and remit the monies owing as union membership fees for the reasons that they have raised.

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 (which I will hereafter 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 the prescribed form and a failure to deduct after being notified 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. 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 requirement for the use of 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 section 20A of the Regulations form the legal basis for the use 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 this 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. Section 21 is applicable only when there is a lack of a prescribed form or a prescribed form is not suitable to the circumstances of a particular case.

This particular provision section 20A complements section 63A of the Act and introduces the 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;

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 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 concerning the use of Form 15 from evidence that there is a slight change and variation in the wording used. The change of wording are found 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 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 and they would not be in court arguing the variations in the forms.

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. 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. It cannot be so here because the issue it seems was nothing to them until they are now in 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 various dates in 1998 and 1999 and their application was approved until in May 2001. The notices to deduct were served on the defendant on the 31st of May 2001, which is within the same month of the approval of the applications. There is no evidence before me to suggest the reason for the delay by the complainant to approve the applications within a reasonable time.

I note that there were certain time intervals between the times when the applications for membership were signed until the date of approval for membership. Obviously some of the employees could have left employment within that time period which is two to three years time interval. Even then the notices to deduct monies were served on the defendant after quite some time. I also do accept as authentic the dismissal notices and the resignation notices by the certain employees of the defendant, which were tendered as evidence. 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.

On the balance of what has been presented to me I find the process required were not attended to within a reasonable time. Within that time period some of the employees could have been dismissed and left employment or would have resigned. The defendant in the circumstances would not be deducting and paying for union members who were not actively in employment. In part this argument as raised by the defendant can stand that some of their employees had since left employment when they received the notices to deduct.

Although this is a valid argument I will not use that as the only basis to have the case dropped and give judgment to the defendant. The deduction and remittance of union contributions is a statutory requirement and I will have to deal with each individual members based on the times they were in employment and the times they had left employment. I will have to properly consider which employees had left employment and which are still in employment. That would affect the amount that the complainant is claiming for all the twenty-six employees. That would require proper submission from the parties as to whose deduction was rightly due and who had left employment since then.

I will therefore proceed to enter judgment for the complainant only for those members who were still in employment and will adjourn to properly consider the members whose contributions are rightly due.

Orders accordingly.

L TI Legal Aid Program: Complainant
Pacific Legal Group: Defendant