N2795
PAPUA NEW GUINEA
[In the National Court of Justice]

OS N0. 490 OF 2004

BETWEEN:

PAPUA NEW GUINEA COMMUNICATION WORKERS UNION
Plaintiff

AND:

TELIKOM PNG LIMITED
Defendants

Waigani: Kapi CJ.
14th & 21st September 2004, 11th March 2005

INDUSTRIAL DISPUTE – Meaning of "industrial dispute" under Industrial Organizations Act (Cap 173) considered –

Industrial dispute may involve a question of law – the National Court may not intervene in an industrial dispute unless there is an error of law.

- Unless an industrial dispute is settled between the parties, the dispute should be determined in accordance with Industrial Relations Act (Cap 174).

Mr P. Aeava for the Plaintiff
Mr P. Mawa for the Defendants 

11th March 2005

KAPI, CJ: This is an originating summons seeking the following orders:

1.	A declaration that the word "revenue" as used in clause 7.8 of the Enterprise Consolidated Agreement means and include the annual income of Telikom PNG Ltd, which income is derived from all sources including domestic and international in-payments 

2.	A declaration that the defendant is in breach of under-mentioned clauses of the Enterprise Consolidated Agreement:-

(1)	clause 7.3.2 (c) (Telikom to Union);

(2)	clause 7.3.3 (d) & (h) (Telikom to Employee); and

(3)	clause 7.8 (CPI Wage Adjustment and Bonus).

3.	A declaration that apart from the method of assessment prescribed under clause 7.8 of the Enterprise Consolidated Agreement, there is no legally binding agreement between the Plaintiff and the Defendant for the purposes of the Industrial Relations Act Ch. No. 174 on the methodology used by the Defendant for the assessment of 3% wages adjustment for the July 1, 2001 and June 30, 2002 period.

4.	An order that the methodology used by the Defendant for the assessment of 3% wages adjustment for the July 1, 2001 and 2002 period be not used as the precedent for the assessment of 3% wage adjustment for the 2002 and 2003 period and beyond.

5.	An order that the defendant be forced under clause 7.5(c) (Compliance Order) of the Enterprise Consolidated Agreement to comply with clause 7.8 by paying the members of the Plaintiff 3% wage adjustment for the July 1, 2002 and June 30, 2003 period.

6.	In the alternative, an order that Defendant complies with Section 59(1) (a) of the Industrial Relations Act Ch. No. 174 by paying the members of the Plaintiff 3% wage adjustment for the July 1, 2002 and June 30, 2003 period under clause 7.8 (CPI Wage Adjustment and Bonus) of the Enterprise Consolidated Agreement.

The background to this originating summons is as follows:

Papua New Guinea Communication Workers Union (Union) and Telikom (PNG) Ltd (Telikom) entered into an agreement on July 11, 2001 known as the Telikom PNG Enterprise Agreement 2001 (Enterprise Agreement) covering amongst other things, various terms and conditions of employment of Telikom workers.

The Enterprise Agreement was registered at the office of the Industrial Registrar on July 27, 2001 under the Industrial Relations Act (Cap 174). The Agreement expired on July 11, 2004.

A dispute arose between the parties on the construction of clause 7.8 of the Consolidated Agreement which provides:

"CPI WAGE ADJUSTMENT AND BONUS

 (a) The Telikon Management and Union:

•	Recognize the need for wage adjustment to meet the increase cost of living.

•	Recognize the potential threats in terms of loss of revenue through competition;

And mutually agree that a wage adjustment shall be awarded subject to Telikom recording revenue increase of 6%, in the first half of 2002 compared to the first half of 2001.

(b)	The wage adjustment shall be 3% and shall be awarded as of 1st July 2002. Should the Company record revenue of less than 6% for the same period; there shall be no wage adjustment.

(c)	Employees who are assessed by their supervisors through the annual performance review to have performed exceptionally well may also be considered for bonus payments, which is separate from the CPI wage adjustment. These payments shall be made on the discretion of Telikom Management.

(d)	Any wage adjustment after 2002 will be subject to the same method prescribed under this clause."

The dispute between the parties arose out of a difference of opinion on the construction of the word "revenue" under clause 7.8.

For the present purposes, the views of the parties may be briefly stated. The Union's view is that the word "revenue" should be constructed to mean revenue from all sources. On the other hand, Telikom's view is that "revenue" should be constructed to mean revenue from domestic sources only. 

Telikom is agreeable to complying with clause 7.8 of the Enterprise Agreement and based on the view they take are willing to pay the members of the Union 1.5% adjustment.

The consequences of the two opposing views results in a vast difference in terms of the calculations of the entitlement that the parties have been unable to agree.

The Union proceeded by way of reporting the dispute to the Departmental Head of Labour and Industrial Relations. In this case, the Union wrote to the Delegate of the Departmental Head. There is no issue about the Delegation. The report to the Delegate was made in accordance with s 25 of the Industrial Relations Act (Cap 174) which provides:

"25. Report of industrial disputes.

(1) A person who is concerned or interested, or is likely to be concerned or interested, in an industrial dispute may report the dispute to the Departmental Head.

(2) An employer or an industrial organization who is a party to or is involved in an industrial dispute that gives rise, or seems likely to give rise, to a strike or lock-out, must immediately notify the Departmental Head or an officer of the Department.

Penalty: A fine not exceeding K100.00.

(3) If he has not already acted under this Part, the Departmental Head—

(a) shall inquire into an industrial dispute reported under Subsection (1) or (2); and

(b) may, by written notice or by telegram, require the parties to the dispute to enter into negotiations for the settlement of the dispute within 14 days after the date of the notice."

By consent of the parties in March, a conference was arranged on 20th April 2004 to settle the matter under s 28 (5) of the Act (Cap 174). The Delegate was unable to effect a settlement. 

When there is no settlement under s 28 (5) of the Act (Cap 174), the Head of Department shall report the matter to the Minister under s 29 which provides:

"29. Reference of disputes to Tribunals.

(1) Where the Departmental Head is unable to effect under Section 28 a settlement of an industrial dispute, he shall report the dispute to the Minister.

(2) The Head of State, acting on advice—

(a) shall, if so required by the parties to the dispute; or

(b) may, if the Head of State, acting on advice, thinks fit, 

direct the Departmental Head to refer an industrial dispute reported under Subsection (1) to a Tribunal for decision and the making of an award."

The Delegate did not take the matter further to the Minster as required by the Act (Cap 174), but as the events have unfolded, counsel for the parties by agreement have brought this application to the Court to resolve the dispute.

The originating summons seeks two alternative remedies. The first category of orders seeks the intervention of the Court to determine a question of law after the process of industrial dispute under the Act (Cap. 174) has commenced and is continuing. The question of law relates to interpretation and effect of clause 7.8 of the Enterprise Agreement.

In the alternative, the summons seeks enforcement of Enterprise Agreement under s 59 of the Act (Cap 174) which provides:

"59. Powers of National Court as to enforcement of awards, etc.

(1) The National Court may—

(a) order compliance with an award proved to the satisfaction of the Court to have been broken or not observed; or

(b) prohibit an organization or any other person from committing or continuing a contravention of this Act or a breach or non-observance of an award.

(2) The Principal Legal Adviser may, on behalf of the State, and in the public interest, apply to the National Court for an order under Subsection (1), but this subsection does not prejudice any right that any other person has to apply for such an order.

(3) Without prejudice to the operation of any other law providing for their enforcement, the powers of the National Court under Subsection (1) apply also in relation to—

(a) awards, common rules and orders prescribing, directly or indirectly, terms and conditions of employment and made under a law other than this Act; and

(b) provisions in force by virtue of such an award, common rule or order."

When the matter initially came before me on 14th September, 2004, I raised the issue; whether the Court has any jurisdiction to intervene in the middle of an industrial dispute under the Act (Cap 174).

The parties did not come prepared to argue this issue and therefore I adjourned the matter to 21st September to enable parties to research the issue. I heard the arguments on this issue on 21st September 2004.

In addition to arguing the jurisdictional issue, the parties agreed that I should hear arguments on the merits, in the event that I reach the conclusion that I have jurisdiction to intervene and determine the merits on the subject matter of the dispute. Parties filed written submissions on the merits.

It was further agreed by the parties that in the event that I decide on the contrary, that is to say the Court has no jurisdiction to intervene, then the alternative argument under s 59 (1) (a) of the Act (Cap 174) would be argued as a separate issue. Therefore, the parties did not argue the alternative remedy.

I now consider the issue of jurisdiction.

The jurisdictional issue raises two questions:

(1)	Is the dispute in question an "industrial dispute" under the Industrial Organizations Act (Cap 173) and Industrial Relations Act (Cap 174)? If it is not an industrial dispute, then this is a matter which should not proceed through the process under the Act (Cap 174). The result would be; proceedings commenced under the Act may not be valid and therefore may be ignored. In the circumstances, the question would be simply: whether or not the Court in the exercise of its discretion should make orders sought in the originating summons.

(2)	In the event that I find that this is an industrial dispute, the question would be: whether the Court has any jurisdiction to intervene in a process commenced under the Act (Cap 174) and determine a question of law raised in the dispute?

The word "industrial dispute" is defined by Industrial Organizations Act (Cap 173):

""industrial dispute" means a dispute or difference between—

(a) an employer and an employee or employees; or

(b) employers and employees; or

(c) employees and employees; or

(d) employers and employers, 

connected with an industrial matter, and includes—

(e) a threatened, impending or probable dispute; and

(f) a situation likely to give rise to a dispute; and

(g) a dispute arising from a contract of employment the particulars of which are contested by either party to the contract within three months after the termination of the contract;

"industrial matters" means all matters pertaining to the relations of employers and employees and, without limiting the generality of that statement, includes—

(a) all matters or things affecting or relating to work done or to be done; and

(b) the privileges, rights and duties of employers and employees; and

(c) the wages, allowances and remuneration of persons employed or to be employed; and

(d) the piece-work, contract or other reward paid or to be paid in respect of employment; and

(e) a question, whether piece-work or contract work or any other system of payment by results is to be allowed, forbidden or exclusively prescribed; and

(f) a question, whether monetary allowances are to be made by employers in respect of any time when an employee is not actually working; and

(g) the hours of employment, sex, age, qualifications and status of employees; and

(h) the mode, terms and conditions of employment; and

(i) the employment of children or young persons, or of any persons or class of persons; and

(j) the preferential employment or the non-employment of—

(i) any particular person or class of persons; or

(ii) persons being or not being members of an industrial organization; and

(k) the right to dismiss or to refuse to employ, or the duty to reinstate in employment, a particular person or class of persons; and

(l) any custom or usage in an industry, whether general or in a particular locality; and

(m) any shop, factory or industry dispute, including any matter that may be a contributory cause of such a dispute; and

(n) any question arising between two or more industrial organizations, or within an industrial organization, as to the rights, status or functions of the members of those organizations or of that organization, or otherwise, in relation to the employment of those members; and

(o) any claim that the same wage shall be paid to persons of either sex performing the same work or producing the same return or profit or value to their employer; and

(p) any question as to the demarcation of functions of employees or classes or employees, whether as between employers and employees, or as between members of different organizations; and

(q) the provision of first aid equipment, medical attendance, ambulance facilities, restrooms, sanitary and washing facilities, canteens, cafeterias, dining rooms and other amenities for employees; and

(r) the fixing of standards of normal temperatures and atmospheric purity in working places below or above ground; and

(s) the prescribing of shorter hours, higher wages or other conditions in respect of persons employed under abnormal conditions or in abnormal working places, and the determination of what are abnormal conditions or abnormal working places, and includes all questions, what is right and fair in relation to an industrial matter having regard to the interests of the persons immediately concerned and of Papua New Guinea as a whole"

Mr Aeava, counsel for the Union filed written submissions and Mawa, counsel for Telikom simply agreed with the written submissions filed on behalf of the Union.

The submission by the parties in brief is that there is a dispute between employer and employees and it is connected with proper construction of the word "revenue" under clause 7.8 of the Enterprise Agreement. As I understand the submission, counsel for Telikom "considers that this is a question of law and therefore should not be considered as coming within the definition of an "industrial dispute". Mr Aeava in paragraph 11 of his written submissions agrees:

"By consenting to the fact that the present dispute or the difference between the Parties is connected with the proper construction of the word "revenue", the Union would tend to agree with Telikom's position that this dispute or difference between the Parties is not an "industrial dispute". Consequently, the Union has come to this Honourable Court with the consent earlier obtained from Telikom in 2004."

This submission is based on the premise that as the issue stated is a question of law, it cannot come within the definition of an "industrial dispute".

I find that the dispute which has arisen in this case comes within the definition of an "industrial dispute" as defined by the Act (Cap 173). First, what has happened in this case is a dispute or a difference between employer and employees (s 1(a)). Second, the dispute is connected with an "industrial matter", namely, a dispute over the meaning of the word "revenue" under clause 7.8 with regard to allowances and remuneration of persons employed (see definition of industrial matters (c) under s 1 of the Industrial Organizations Act (Cap 173). 

I do not accept the submission that because a dispute involves a question of law, that that fact alone removes the legal question from the meaning of an industrial dispute as defined by the Act (Cap 173).

It follows from this process of reasoning that an industrial dispute by definition includes questions of law such as in the present case. Where in the process of dealing with an industrial dispute the Tribunal makes an error of law, a party aggrieved may apply for an appropriate order to correct the error of law. I will come back to discuss the circumstances in which a court may intervene.

Alternatively, if the matter proceeds to final determination by the Tribunal, and error of law is made, a party may come by way of judicial review to correct the error of law in accordance with the principles of the underlying law. 

I find therefore that there is an industrial dispute in the present case.

Consequently, the steps taken by the Union to report the dispute under the Act (Cap 174) is valid. There is no suggestion that the Union wishes to withdraw the dispute from the process begun under the Act (Cap 174). 

What the parties have done in this case is that they have by consent halted the industrial dispute process under the Act (Cap 174), and brought this proceeding to determine the subject matter of the dispute.

The question then arises; whether the National Court may intervene in an industrial dispute in this manner?

In order to determine this issue, it is necessary to examine the process under the Act (Cap 174). As I have already pointed out, when a Departmental Head or his delegate fails to effect a settlement between the parties, he may report the matter to the Minister (s 29 of the Act (Cap 174))

The Head of State acting on advice may appoint a Tribunal to make a decision and make an award (s 29 (2)or s 30 of the Act (Cap 174). The Tribunal should enquire into the matter and make an award (s 31 of the Act (Cap 174).

There is an elaborate process established under the Act to deal with industrial disputes. This is a unique process to deal with disputes involving trade unions and employers. These are not left to the jurisdiction of courts.

Industrial organizations are established under Industrial Organizations 
Act (Cap 173). This Act establishes the right of employees to form industrial organizations and regulates registration of such bodies. This Act recognizes the role that may be played by industrial organizations in negotiating rights of employees with employers.

It recognizes for example protection of industrial organizations and its officer from any legal suit under s 29 of the Industrial Organizations Act (Cap 173).

This Act (Cap 173) defines industrial disputes and Industrial Relations Act (Cap 174) establishes the unique process for resolving industrial disputes. This process takes place outside formal Courts. 

Under our legislation, there is no provision for the intervention of the Court to deal with any question of law in this process. Under other legislation, the Court is given express power to intervene in certain matters. For example in the Australian Federal Legislation, Workplace Relations Act 1996 expressly gives jurisdiction to deal with certain aspects. We do not have any such provision. Therefore, this Court has no power to interfere in an industrial dispute under our Act.

In absence of such a provision, the Court cannot intervene.

Counsel for both parties rely on one of my earlier decisions, Employers Federation of Papua New Guinea v Papua New Guinea Waterside 

Workers and Seaman's Union and Lawrence Titimur, Tony Hartwell and Didulosi Boshen (Unreported Judgment of the National Court dated 11th October 1982, N393) to intervene in this case. In this case, the parties disputed a log of claims in respect of terms and conditions of employment. 

When the parties could not settle the dispute, the matter was reported to the Head of Department of Labour under s 25 of the Industrial Relations Act (Cap 174). The parties were directed under s 25 (3) (b) of the Act to settle the dispute. However, the parties were unable to settle the dispute. A compulsory conference under s 28 also failed to effect a settlement.

The matter resulted in the appointment of a Tribunal to hear the dispute under the Act. It appears that during the negotiations to settle the dispute, the Papua New Guinea Waterside Workers and Seaman's Union proposed to settle the dispute on an alternative basis that would supercede the log of claims which was the subject of the dispute. 

When the Tribunal sat to hear the dispute, Employers Federation of Papua New Guinea objected to the alternative claim going before the Tribunal. On objection of the Federation, the alternative claim was not allowed but subsequently to hearing parties, the Tribunal reversed its decision and allowed the alternative claim to be heard by the Tribunal.

The Federation made an application to the National Court for an interlocutory injunction to stop the Tribunal from dealing with the alternative claim. That matter came before me for determination.

So far as it is relevant to the case before me now, one of the questions was whether the Tribunal had any jurisdiction to hear the alternative claim. I concluded on the evidence that the industrial dispute referred to 

the Tribunal to determine related to the log of claims. The reference to the Tribunal had nothing to do with the alternative claim brought up by the Union during course of negotiations. In dealing with this issue I held:

"There is no dispute that the tribunal should continue its hearing on the log of claims. However, if the tribunal was allowed to do what appears to me to be a separate claim (i.e. 3.5 percent wage increase) with the disputed matters in the log of claims, this may well affect the consideration of the matters raised in the log of claims and an award may be made rejecting all the claims in the log of claims and instead and make an award only on the question of a general wage increase. If the Plaintiff is successful in the substantive action that the tribunal has no jurisdiction on the question of general wage increase, then such an award would have no effect."

I considered this issue in the context of an interlocutory injunction and I concluded that there was a serious question to be tried. That is to say, at that stage it was arguable that the Tribunal erred in allowing the alternative claim into the hearing.

The proposition that can be extracted from this case is that where a Tribunal makes an error of law in the course of its deliberations, a Court may intervene to correct the error.

The situation before me in the instant case, is different. In the present case, the process has only begun and the matter has not yet proceeded to a hearing before a Tribunal. There is no hearing and it had not made any decision. The industrial dispute that has arisen in this case, undoubtedly involves a question of law. Where the dispute cannot be settled, a Tribunal has jurisdiction to hear the matter and make a determination. The parties in the present case have not reached this point and they may proceed to a tribunal hearing. 

If and when the Tribunal makes an error of law, such a matter may come before the Court.

To intervene at this stage is to act contrary to the Act. That is to say, the way to resolve industrial dispute is to appoint a Tribunal under the Act to determine the matter. It is clearly the intention of the legislature to channel all these issues to a Tribunal. 

For these reasons, I have no jurisdiction to intervene. I would dismiss the declaratory orders sought in the originating summons. The parties should settle or proceed to a Tribunal in accordance with provisions of the Act. 

In view of the conclusion I have reached, I do not find it necessary to deal with the subject matter of the dispute. That is a matter for the Tribunal if the parties do not effect a settlement.

The alternative remedy sought under s 59 of the Act (Cap 174) remains and the parties should consider what step to take next.

In the circumstances the parties will pay their own costs.
_________________________________________

Lawyers for the Plaintiff: AMPS LOGOHUS LAWYERS
Lawyers for the Defendants: MAWA LAWYERS