Civil Case No. 321 of 2001
EAGON PACIFIC PLANTATION
LIMITpan>
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v
SOLOMON ISLANDS NATIONAL
UNION OF WORKERS (SINUW)
High Courtolomon Islands
Before: Frank O. Kabui, J.
Civil Case No: 321 of 2001
Date of Hearing: 4th
December 2001
Date of Judgment: 7th
December 2001
Mr. Ashley for the Applicant
Mr B. Samson for the Respondent
JUDGMENT
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(Kabui, J):
Bginating Summons filed on 2 on 21st November 2001, the Applicant
seeks the determination of the following questions-
1. ;&nbssp; &nsp; Wsp; Whether the
erralerral of the issue of redundancy of the Applicant’s employees by the
Respondent
to the Trade Dispute Panel was a valid referral; and<
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2. I theernsw
to qu stionstion 1 is “Yes”, whether the Applicant's intended action to make
redundancy forty-rive
(45) of it's employees will be each ction e Traspute and
>
3. &nbbsp;& p; bsp; If t If t If the answer to
either question 1 or 2 is “No”, the Applicant seeks the following
declaratio
<
(a) &nnbsp;; That the
Applicant, as employer, is entitled to make redundant its employees in
accordance with
law; andn>
">
<
(b) & That the issu
of
re redundancy of the Applicant's employees is not within the jurisdiction of
the Trade
Disputes Panel and consequently se 10 o Tradputes Act not apply.
p>
4. &nbssp; That eaat each party
bear its own costs.
pan lang="EN-GB" style="font-size: 12.0pt">5. p; &nAsp; Anp; Any further ordr order
the Court sees fit to make.
;>
The Facts
The facts are not in dispute.
The Applicant in mid-September this year decided to lay-o employees in
the Arae Arara Camp
in the Western Province. The reasons were that the price for
logs in the world market was low. There was low demand for logs
in the world
market. For example, no orders for logs had been received since the last
shipment of logs on 27th June 2001. The direct result of that
situation was a cash-flow problem being experienced by the Applicant. There
was
therefore the obvious need to trim down the number of employees in order
to ensure the Applicant’s survival and avert the possibility
of going into
bankruptcy. In the meantime, the Union issued a notice of strike action on
24th September 2001. The dispute between the Applicant and the
Union was later referred to the Trade Dispute Panel by the Union
some time
in October 2001. The issues to be decided by the Trade Disputes Panel were
the employee's logs of claim-2000/2001,
redundancy of workers and employees
personal contract. These issues were set out in a letter dated 12th
October 2001, addressed to the Applicant, signed by the Secretary to the
Trade Disputes Panel. In that letter, the Applicant
was told that section 10
of the Trade Disputes Act would apply to the dispute and the parties to it.
The dispute is not likely to be heard by the Trade Disputes Panel until
sometime next year 2002. The parties have therefore agreed that the issue of
redundancy be referred to the High Court
for determination in view of the
effect of section 10 of the Trade Disputes Act and the fact that the Trade
Dispute Panel will not sit to bear the dispute until 2002.
The Law
Section 4 of the Employment Act
(Cap 72) governs the questf any dismissal because of e of redundancy. This
section states
“..1) &nbbsp; For the purposes
of this Act, when an empl employee is dismissed his dismissal is to be taken to
be because
of redundancy if it is attributable wholly or mainly to-
(a) &nthe fact that his
emp employer has ceased, or intends to cease-
&nt"> >
(bsp;   &nbap; conry e
busineusiness for the purposes of which the employee was employed by him; or
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(ii) & tsp;arr con t at
bu business in the place where the employee was so employed; or
&pt">
(b) &nnbsp;   fasp fact that
the r requirements of that business-
>
<
(iii) &nbbsp; mployees to
carry out work of a particular kind; or
0pt"> 
(iv) &nfor employees to s to
o
carry out work of a particular kind in the place where he was so employed,
have
ceased or diminished or are expected to cease or diminish.
(2). & Where an employeployee
ee
has been dismissed by his employer and the question whether he is entitled
to a
redundancy payment is referred to the Trade Disputes Panel or any
court, then for the purposes of the reference, the employee
shall be
presumed to have been dismissed because of redundancy unless the contrary is
proved.”... This section is significant
in two ways. First, it states the
circumstances that may call for redundancy to take place and is justified by
the law.
Second, it states that the question as to whether or not an
employee is entitled to a redundancy payment may be referred to
the Trade
Disputes Panel or the Court for determination if there is a dispute over
entitlement under section 2 of the
Act. Redundancy may also take place under
section 8 of the Act referred to in Schedule 2 as special cases. These
special
cases seem to leave no doubt for disputes over what circumstances
would be regarded as qualifying for redundancy exercise by
an employer. What
is a “trade dispute” is defined in section 1 to the Schedule to the Trade
Disputes Act as ...”A dispute between employees and employers, or between
groups of employees, which is connected with one or more of the
following
matters-
(a) & p; tsp; terms arms and
conditions of s of employment or the physical conditions in which employees are
required
to work;
(b) &nbssp; engagement or
enon-emgagemgagement, or termination or suspension of employment or the duties of
employment,
of one or more employees;
(c) p;&nbbsp; allocation oion oion of
work as between employees or groups of employees;
(d) &nbbsp; msp; matters of
s diinipline;
(e) membership or
non-msmbership of a trade union; and
>
(f) &npsp; duoce
es re atingating to any of the matters mentioned above, including the recognition of
any trade union
by an employer”...
ass="rmal"e="matop: rgin-bottom: 1">
">
However, section 4 (2) of the
air Dismissal Act (Cap. 77) states,“…An employee who is diss dismissed is not
unfairly dismissed
if he is dismissed because of redundancy”...
The dismissal therefore of an
employee because of redundancy is an issue that cannot be regarded as a
dispute that can
be referred to the Trade Disputes Panel because such
dismissal is not unfair dismissal. An employee can only complain to the
Trade Disputes Panel against his or her employer if he or she has been
unfairly dismissed (see section 6 of the Act).
Application of the law to the
facts
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The question to be asked is
whether or ismissal because of “redundancy” can be regarded as a tradetrade
dispute for only
a trade dispute can be determined by the Trade Disputes
Panel. In the definition of “trade dispute” above, the matters in (b)
may
well include termination of employment because of redundancy. That is one
view on the one hand. The other view, on
the other hand, is that that cannot
be the case because section 4 (2) of the Unfair Dismissal Act clearly and
specifically excludes dismissal because of redundancy from being regarded as
unfair dismissal. If that sort
of dismissal is not unfair dismissal, how can
it be what it is not so as to become a trade dispute? It is an
impossibility.
As I have said, an employee may question his or her
entitlement to redundancy payment under section 4 (2) of the Employment Act
but not the act of dismissal on the basis of redundancy. The law does
recognise the fact of life in the world of business
and government that one
cannot live beyond one's means. If expenses exceed income, cut in costs must
be made to save
the employer from economic collapse. The law also recognises
the plight of the employee if cut in costs becomes inevitable
and is carried
out by the employer. To cushion the economic shock brought about by his or
her termination from employment,
compensation is paid under the formula
prescribed by section 7 of the Employment Act. If anything, it is the
payment of compensation that matters than the termination of employment. The
termination of employment
is obviously inevitable and can be said to be
almost beyond the control of the employer and employee alike. In this case,
the fluctuation of world price for logs has had a negative impact upon the
cash flow of the Applicant a matter beyond
the control of the Applicant and
the Union alike. How can that reason be a trade dispute or a dismissal based
on that
reason be an unfair dismissal? There cannot be a trade dispute in
this case. The referral of the issue of redundancy in this
case to the Trade
Disputes Panel has no legal basis and is invalid. Section 10 of the Trade
Disputes Panel does not apply
to the action taken by the Applicant to
lay-off 45 workers on the basis of redundancy. The effect of this
determination
is that the Applicant may proceed to process the redundancy
payments due to the 45 workers already identified for the Applicant’s
redundancy exercise. In terms of the questions posed for determination by
the Applicant, I would answer 1 in the negative.
I need not answer 2 because
it is unnecessary to do so in view of the answer in the negative to f above.
The answer to
3 (a) and (b) is yes. The parties will bear their own costs.
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F.O. Kabui
Judge
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