Unreported National Court Decisions
N649
PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]
O.S. NO. 179 OF 1987
IN THE MATTER OF AN APPLICATION BY BOUGAINVILLE COPPER LIMITED FOR LEAVE TO APPLY FOR JUDICIAL REVIEW
BETWEEN
BOUGAINVILLE COPPER LIMITED
PLAINTIFF
AND
MARGARET ELIAS, DIDIULOSI BOSHEN, MICHAEL KONDAI
FIRST DEFENDANTS
AND
THE NATIONAL STAFF ASSOCIATION OF BOUGAINVILLE COPPER LIMITED
SECOND DEFENDANT
AND
BUNAM LAMBERT DAMON
THIRD DEFENDANT
AND
GAUDI DADI
FOURTH DEFENDANT
Waigani
Los J
19 July 1988
5 August 1988
INDUSTRIAL LAW - Retrospectivity of award - date of effect severable from Award itself - pre-emptive of court to say no consent by Head of State when that stage not reached.
INDUSTRIAL LAW - Evidence - strict legal or technical rules of evidence not required - But outrageous, groundless or opinions based on emotion cannot be acted upon.
INDUSTRIAL LAW - Jurisdiction - Tribunal has no power to determine legality of terms and conditions of employment.
Cases Cited
Bougainville Copper Limited v. Margaret Elias, Vitus Awaraki, Bougainville Mining Workers Union (OS 156 of 1986 25th November 1987)
Kingsway Investments v. Kent County Council (1987) AC 72
Text Book
Principles of Administrative Law (6th ed)
Legislation
Industrial Relations Act Chap. 174
Counsel
Molloy for Plaintiff
Payne for Second Defendant
Lambu for First, Third & Fourth Defendants
LOS J:  The plaintiff (BCL) seeks an order for certiorari to remove into this court and quash an award made by a three men Arbitration Tribunal set up under the Industrial Relations Act Ch 174. The decision was made on 28th October 1987 awarding an upward unjustment of 5% to the salary of all members of the National Staff Association of Bougainville Copper Limited, second defendant, retrospective to the first day of January 1987. The plaintiff also seeks, in the alternative, a declaration that the award is null and void and have no effect.
The plaintiff advances two grounds upon which it is contended that the orders sought should be granted: the first relates to the legality of the retrospective application of the award under s.36 of the Industrial Relations Act and the second relates to the finding of facts and relying on same.
This is the award by the tribunal:
1.       APPLICATION:
This Award shall apply to and be binding upon members of the National Staff Association of Bougainville Copper Limited and Bougainville Copper Limited.
2.       SALARY:
2.1     All salaries shall be adjusted in accordance with the Salary Clause of the Bougainville Copper Limited National Staff Association Conditions. (Exhibit A2).
2.2     For the Consumer Price Index (CPI) adjustment due on March 1, 1987 and retrospective to January 1, 1987 all salaries shall be adjusted upwards by 5% in accordance with the said Salary Clause of the Bougainville Copper Limited National Staff Association.
The tribunal decided to make its award effective from 1st January 1987 which was retrospective to the date of its decision. Under s.36(2) of the Industrial Relations Act a retrospective application of an award is only possible in three situations.
36.     Retrospectivity of awards
(2)      Subject to Subsection (1), an award of a Tribunal under this Act does not, except with the consent of all parties to the dispute, have effect from a date before the date on which notice under Section 25 was given to the parties, unless:
(a)      the Tribunal for a special reason determines otherwise; and
(b)      the Head of State, acting on advice, consents.
It is conceded by the First Defendant and the Second Defendant that no consent required by (b) was obtained from the Head of State. But in relation to the special reason required by (a) it was argued on behalf of the tribunal that although no specific reason was given, in the context, the reason for making the award retrospective was to ensure that the members of the second defendant received CPI increases effective from the same date as other categories of employees in the country. It is argued on behalf of the second defendant that if a specific reason is not ascertainable, that should not be a ground for declaring the whole award null and void but only a part of it.
Taking the first, I am sympathetic to the industrial aspect of the claim, that is, all categories of employees must have the benefit of CPI increases, not only one or limited number of the categories of employees in the country. I am however reminded that my task in the review does not extend to considering the merit of the decision, but the review of the decision making processes. Obviously, there is no specific reason given by the tribunal. Mr Lambu is adamant that the only reason for making the award retrospective to the first January 1987 is that all the employees in the country had received the CPI increases effective from that date. Is there any evidence upon which this reason may be ascertained or inferred. I leave this point until later as it will come under the second ground of the argument.
It is argued on behalf of the Second Defendant that if no reason at all can be ascertained for the tribunal making the award retrospective, this Court should not declare the whole award invalid, but only part of it. My reading of the sub-s. (2) of s.36 of the Industrial Relations Act is that it talks about the validity of the date of effect of an award not the award itself. The subsection does not alter the fact that an award was made. I think therefore on many analogous authorities including Kingsway Investments v. Kent County Council [1971] AC 72 at 91, only the bad part of this award can be severed. The severable part of this award is the part that is retrospective to the date on which a notice required by the section 25 of the Industrial Relations Act was given to the parties.
I think however, the attack on the retrospective application of the award is presumptuous. This point was raised on behalf of the First Defendant and the Second Defendant at the hearing but I did not appreciate it until I re read the arguments. The award at this stage has no effect at all. It has to be registered and gazetted before it can be applied. It would be pre-emptive of this Court and thus improper to say whether the Head of State would consent to it or not consent to it. The process of seeking consent has been halted by the restraining orders granted by this Court. Had that stage been reached and that either the Industrial Registrar had failed to seek a consent or he had sought a consent but no consent was forthcoming, I would have resorted to the severability principle whereby I would, as I said earlier, strike out the retrospective part of the award.
On the second ground of review it is claimed that the tribunal fell in error in its finding of facts and relying upon irrelevant consideration. I was referred to Hotop, Principles of Australian Administrative Law (6th ed) and an unnumbered decision of Bredmeyer, J., in a similar case Bougainville Copper Limited v. Margaret Elias, Vitus Awaraki, Bougainville Mining Workers Union (O.S. 156/1986 - 25th November 1987).
At the outset no real issue should arise as to how the evidence was produced before the tribunal because s.52 of the Industrial Relations Act exempts an industrial tribunal from applying strict legal or technical rules of evidence. But the term ‘strict’ itself implies that the rules of evidence should not be ignored altogether but that a slavish compliance with the rules must be avoided. It does not mean an outrageous evidence based upon groundless or emotional opinions or unbelievable hearsay evidence should be received. I do not put too much emphasis on how the evidence was produced before the tribunal in the case before me. The real issue here would be what reliance the tribunal had put on the evidence before it.
In its finding at point 1.3 page 17, the tribunal said:
“There is sufficient evidence the Tribunal is convinced that at the time of engagement of each and every National Staff Employee, the Company (BCL) has offered certain terms and conditions of employment of such employees. The employees have been engaged with the respondent company on the understanding that they have accepted the conditions of employment offered to them by the company.”
The first apparent error is that not each and every national staff employee was offered the same terms and conditions. It could have been many or most but there is no evidence to come to a definite number. What the tribunal considered as best for the employees concerned should be distinguished from what the evidence was. The evidence before the tribunal which the tribunal itself admitted at page 19 of its decision, for example, was that there was a revision in December 1986 and hence the “persons engaged by the Company during or after December 1986 would not be entitled to receive CPI adjustment that fell due in March this year (1987)”.
The second error relates to the pronouncement as to the validity of the terms and conditions. At page 20, the tribunal finds that the conditions in EX A2, formed the basis of employment and that in its view, it constituted a binding contract of employment between the National Staff Employees and the Company. In my view to come to such a conclusion, the tribunal had to decide firstly that all national employees had been on the same terms and conditions and secondly to confirm the first, the tribunal had to decide that the purported revision of December 1986 was false or illegal for some reason including breach of the terms and conditions contained in EX A2. Despite the attempts to qualify that the tribunal was not determining the legality of such contract, the fact is that it did determine that it was a valid contract binding all the National Staff employees and the Company. On the merit, that might be what the tribunal wanted. But this Court’s task is to determine whether the tribunal exercised its powers according to law. The tribunal had no jurisdiction to determine any question of law. It is clear to me that from the preceding paragraphs the tribunal went beyond its jurisdiction. I order therefore that the award by the tribunal made on the 28th October 1987 be removed into the National Court and be quashed. The matter be referred back to the tribunal for a rehearing according to law.
Lawyer for the Plaintiff: Gadens
Counsel: I. Molloy
Lawyer for the Second Defendant: Warner Shand
Counsel: P. Payne
Lawyer for the First, third and Fourth Defendants: P. Paliau State Solicitor