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Fiji Bank and Finance Sector Employees Union v ANZ Banking Group Ltd [2007] FJAT 75; Award 77 of 2007 (28 November 2007)

THE REPUBLIC OF THE FIJI ISLANDS

NO 77 OF 2007

AWARD OF
THE ARBITRATION TRIBUNAL

IN THE DISPUTE BETWEEN

FIJI BANK AND FINANCE SECTOR EMPLOYEES UNION

AND

ANZ BANKING GROUP LIMITED

FBFSEU: Mr P Rae with Mr D Singh
ANZ: Mr J Apted with Ms T Colawai

DECISION

This is a dispute between Fiji Bank and Finance Sector Employees Union (the Union) and ANZ Banking Group Limited (the Employer) concerning the decisions to transfer Ms A Rabulago (Grievor 1) and Ms S Lacanivalu (Grievor 2).

A trade dispute was reported by the Union on 20 February 2007. The report was accepted on 23 February 2007 by the Permanent Secretary who referred the Dispute to a Disputes Committee.

Subsequently the Minister authorized the Acting Permanent Secretary to refer the Dispute to an Arbitration Tribunal for settlement pursuant to section 5A (5) (a) of the Trade Disputes Act Cap 97.

The Dispute was referred to the Permanent Arbitrator on 31 May 2007 with the following terms of reference:

"- - - over the forced transfer of Ms Atelaite Rabulago and Ms Seraseini Lacanivalu from ANZ Nadi Airport Branch to its Nadi and Namaka Branches respectively with effect from 2 April 2007. The union claims that the employees action as unreasonable, unjust and unfair and therefore your union seeks that the transfer be withdrawn and the employees to continue employment at their current location with the current terms and conditions of employment."

The Dispute was listed for a preliminary hearing on 8 June 2007. On that day the parties were directed to file preliminary submissions by 26 June 2007 and the Dispute was listed for mention on 29 June 2007.

On 29 June 2007 both parties were granted an extension to file their submissions by 5 July 2007. Both parties did file their preliminary submissions on 5 July 2007.

The Dispute was then fixed for hearing on 20 August 2007. Due to a part heard Dispute it was necessary for the Tribunal to vacate that hearing date.

The hearing of the Dispute commenced on 17 October 2007 in Suva and continued on 18 and 22 October. The hearing was completed on 24 October and the parties presented oral closing submissions on 26 October 2007. During the course of the hearing the Union called two witnesses and the Employer called three witnesses to give evidence.

The task for the Tribunal is to determine whether the Employer’s decisions to transfer Grievor 1 from its Nadi Airport Branch to the Nadi Branch and Grievor 2 from its Nadi Airport Branch to the Namaka Branch were unreasonable, unjust and unfair. In the context of employment relations and the settling of trade disputes these words (unreasonable, unjust and unfair) are generally considered to be indistinguishable.

Although there is no "management rights" provision in the Collective Agreement, it is accepted that the Employer possesses an inherent power or ability to initiate change in the organization of the workforce. This power or ability includes the reallocation of employees by way of transfer. However such a power is not absolute. The discretionary exercise of the power is fettered by the Collective Agreement and the requirement to act in good faith and reasonably. The provisions of the Collective Agreement may impose limitations, restrictions or requirements on the Employer when exercising those powers.

In this Dispute the Employer’s ability to transfer its employees was subject to clause 10 of the Agreement. Clause 10 (i) is relevant to the present Dispute and states:

"Where an employee is transferred by the Employer from one branch to another branch, the employee shall be given as long a notice of such transfer as is practicable, provided that, except in special or urgent circumstances, no employee shall be transferred when a change of residence is involved unless at least one month’s notice of intention of the transfer has been given and further that during this period the Employer shall grant reasonable time off for the purpose of moving and settling in the new residence.".

The evidence established that the decision to transfer the two Grievors would not involve either of them in a change of residence. Consequently clause 10 (1) only applied to the Grievors to the extent that the Employer was required to give to each of the Grievors as long a notice of such transfer as was practicable.

At the end of clause 10 there appeared in the copy of the Agreement made available to the Tribunal a provision which dealt with "Transfer Policy Objective". This provision stated:

"With a view to assisting appropriately skilled staff take up appointments in locations outside their home base the Bank has reviewed its Transfer Policy. Our key objective in this review is to:

1. Meet employee/family needs in a manner that creates no financial disadvantages.

2. Enables the Bank to move people in a cost efficient manner to locations where skills are needed or to achieve development goals.

3. Provides a common framework

4. Is simple to administer."

It would appear that the policy was intended to provide a guideline for effecting the transfer of appropriately skilled staff to locations outside their home base. The Tribunal has concluded that the policy was designed to ensure, amongst other things, that a transfer to an appointment in a location outside his or her home base does not result in financial disadvantages to that employee.

It was not disputed in the evidence before the Tribunal that the Grievors in this Dispute would not be transferred to appointments in locations outside their home base.

Furthermore, the reference to "financial disadvantages’ is, in the Tribunal’s opinion, a reference to financial disadvantages which directly result from the employee being required to move to a location outside his/her home base. It does not refer to the loss of an allowance or benefit which may be part of the renumeration of a particular position from which the employee is being transferred.

Therefore, so far as the Collective Agreement is concerned, only part of clause 10 (1) is relevant to the Grievors.

The contract of service of each Grievor consisted of the applicable provisions of the Collective Agreement pursuant to section 34 (7) of the Trade Disputes Act. However their contracts of service also included the terms and conditions set out in their service agreements. Those terms and conditions were either not inconsistent with the applicable provisions of the Collective Agreement or dealt with matters not covered by the Collective Agreement.

Grievor 1 (Ms Rabulago) signed her service agreement on 27 November 1989 and Grievor 2 (Ms Lacanivalu) signed her service agreement on 17 July 1989.

The agreements appear to be in the form of a standard contract of service. Clause 4 in each agreement is relevant to the present Dispute and states:

"The officer shall forthwith serve in any appointment or capacity and upon any duties in connection with the business and affairs of the Bank and remove to and reside at any place and places as the Bank in its discretion may from time to time require or direct. Provided that personal expenses of travelling and removal from one place to another and to which the Officer is entitled under the provisions of any industrial award or agreement for the time being in force shall be paid to such officer."

This clause confirmed the Employer’s contractual right to transfer employees. As stated earlier the Employer’s right to transfer employees is also subject to a general presumption that the right must be exercised in good faith and reasonably.

A decision to transfer which the evidence established had been made in bad faith would clearly also be unreasonable. However such decisions are not only analysed for their bona fides but are also examined against a standard of reasonableness. The transfer decisions must be tested for their correctness under a test of reason.

There is a distinction between an unreasonable decision and a decision made in bad faith. The Fiji Court of Appeal in Charan –v- Public Service Commission (unreported civil appeal No 2 of 1992 delivered 24 March 1994), in a different context, noted at page 12:

"It is undoubtedly a fundamental principle that powers given by law must be exercised reasonably, on good grounds and in good faith. Allegations of bad faith or lack of good faith seem more and more frequently to pepper applications for judicial review. In most cases, what is being alleged is no more than a suggestion the Tribunal has acted on improper grounds or unreasonably. Absence of good faith suggests more. It implies actual dishonesty by the authority whose decision is being challenged."

In addition, in a much later decision, the Supreme Court of the Fiji Islands in Central Manufacturing Company Limited –v- Yashni Kant (unreported civil appeal no. 10 of 2002 delivered 24 October 2003) stated at page 21:

"In our view, the Court of Appeal correctly held that there is an implied term in the modern contract of employment that requires an employer to deal fairly with an employee, even in the context of dismissal."

As a result the Tribunal has concluded that the Employer’s decisions to transfer the Grievors must not only be assessed for their reasonableness by reference to whether they were made in good faith but also by reference to the wider test of reasonableness in the sense of fairness and proper grounds.

As these were transfers which were not disciplinary in nature, the onus of establishing that the Employer had acted in bad faith and unreasonably rested with the Union.

At the time this Dispute arose, the Grievors were employed at the Employer’s branch located at the Nadi International Airport (the Nadi Airport branch). Grievor 1 (Ms Rabulago) had been employed at the Nadi Airport Branch for eight years, the last four of which had been at the highest pay level (step 13) for a Grade 2 teller. Prior to her posting to the Airport Branch, she had held positions at a number of branches in the greater Nadi area. She had been employed with the Employer for a total of 17 years.

Grievor 2 (Ms Lacanivalu) had been employed at the Nadi Airport Branch since 2000. Since 2003 she also has been paid at Grade 2 Step 13 level for a teller. She had been employed at the Bank for a total of 18 years.

The Nadi Airport Branch operates a 24 hours 7 days a week on demand limited banking facility for foreign currency transactions in both the departure and arrival lounges of the Nadi International Airport. In addition the Airport Branch also provides a limited range of banking services during standard bank hours to the public at its arrivals concourse location.

To service these facilities, employees posted to the Airport branch are rostered into three shifts of eight hours each. Employees who are rostered on the afternoon and night shifts and those who are rostered to work on weekends are paid overtime rates and/or shift allowances in addition to their normal wages. Transport is also provided by the Employer in certain cases. Without going into the details, it is fair to say that the total remuneration which employees at the Airport branch can earn is higher than those at other branches are able to earn.

The Tribunal also accepts the evidence given by the Grievors that there are problems and difficulties associated with shift and weekend work. Personal routines and family life required constant re-adjustment because of rostered shift and weekend work.

The transfer decisions which are the subject matter of this dispute are the decisions which required the Grievors to transfer from the Airport Branch to their new Branches with effect from 2 April 2004. Those decisions were set out in letters dated 14 February 2007 addressed to the Grievors from the Employer’s Head of People Capital (Ms Lyn Mellsop). The letters were virtually in identical terms and, omitting formal parts, stated :

"Reference is made to our letter dated 8 February 2007.

A number of consultations have been conducted with the Union and yourself between Monday 5 February 2007 and today.

In the letter we advised that we had reconsidered your transfer to (Nadi/Namaka) Branch in light of various concerns that you had raised but had decided that we will proceed with the transfer. The letter gave our reasons for the decision.

Following this, we had further discussions with the Union on Monday 12 February 2007. Among the matters raised on your behalf were earlier bank/union discussions regarding a minimum 12 week notice period before a transfer is effected. Although these discussions never reached the level of formal agreement, and the Bank considers that, all told, you have already received more than 12 weeks’ notice of the transfer, the bank has decided that it will voluntarily err on the side of maximum fairness and allow you 12 weeks from the date of our discussions on 5 January before your transfer should take effect.

Accordingly we are pleased to advise that your transfer to the (Nadi/Namaka) Branch will now be effective from 2 April 2007.

As before, this transfer is under clause 10 (i) of the Collective Agreement and clause 4 of your Service Agreement signed and acknowledged by you on 17 July 1989.

Please report to (Ana Nagatalevu/Linda Hanfahaga) at 8.00am on Monday 2 April 2007.

As a result of the discussions with the union on Monday 12 February 2007, the Bank has also undertaken to:

1. discuss specific career development initiatives that will impart you in the next 18 months and

2. explore your financial situation as a result of the transfer so that any assistance you may need and that can be provided by ANZ will be identified for the bank’s consideration.

Your manager will be in touch to set up a meeting with you upon your commencement at (Nadi/Namaka) Branch.

We look forward to your continued good performance in your new Branch."

During the course of the hearing the Tribunal heard a considerable amount of evidence concerning events which preceded this correspondence.

There were separate meetings between each of the Grievors and management staff on 6 January 2007 at the café adjacent to the Airport Branch at the International Arrivals concourse.

Following those meetings letters dated 11 January 2007 were sent to each of the Grievors. These were letters which offered transfers to each Grievor whereas in the earlier meetings on 6 January 2007 the Grievors had been informed that they were to be transferred with effect 5 February 2007. Needless to say, the Grievors did not indicate acceptance of the offers set out in the letters dated 11 January 2007. Instead each Grievor replied by letter dated 26 January 2007 in identical terms indicating that they had no interest in moving to another Branch.

The Employer replied to each Grievor by letter dated 1 February 2007. The letter contained an inaccurate reference to the Bank’s earlier letter. The Employer confirmed that the Grievors were to be transferred with effect from 5 February 2007.

Following representations by the Union, the transfers were postponed and separate teleconferences between each Grievor and the Employer’s management were conducted on 5 February 2007. A union representative also participated in the teleconferences.

The Employer then wrote to teach Grievor setting out its position in letters dated 8 February 2007. After summarizing the issues the Employer advised each Grievor that she was to be transferred to the new Branch with effect from 12 February 2007.

The Union and the Employer then had further discussions. The Bank then forwarded the letters dated 14 February to each of the Grievors.

Although the Employer’s initial attempts to implement its decision to transfer the Grievors may be described as inept and even inappropriate, the issue raised by the terms of reference is to determine whether the decisions contained in the letters dated 14 February 2007 to transfer the Grievors with effect from 2 April 2007 were unreasonable.

It should be noted that the Grievors have remained employed at the Nadi Airport Branch pending the outcome of this Dispute.

Each Grievor had initially offered the same four reasons for resisting the Employer’s decision to transfer them. The first reason was that they did not apply for the positions of teller and customer services advisors. Secondly, they were happy where they were. Thirdly, they were performing to the Bank’s expectations. Finally, they were not interested in going anywhere.

In their evidence the Grievors also admitted that the transfer would result in financial consequences both short term and longer term. There would be an immediate reduction in their take home pay. There would also be consequences in respect of long service leave and retirement entitlements.

In its letters dated 8 February 2007 to the Grievors, the Employer had explained its reasons for transferring the Grievors and responded to the Grievor’s concerns. In relation to these matters, the Employer stated :

" - - -

We accept that you did not apply for the tellers position and again record that the letter sent to you by (the Branch Managers) on 17 January 2007 was wrongly expressed.

We also accept that there are no issues in regard to your individual performance at the Nadi Airport Branch.

We have also given much consideration to your satisfaction with your current role at the Nadi Airport Branch. However, the Bank has decided that your reasons are outweighed by the Bank’s needs.

- -

We believe that you have valuable skills and experience. These are valuable resources that are needed to enhance our business and customer service at the (Nadi/Namaka) Branch.

The transfer to (Nadi/Namaka) Branch will also provide a real opportunity for the Bank to further develop these skills and experience, within your existing role as a teller, through exposure to more diverse and complex transactions with customers. This opportunity is not available at our Nadi Airport Branch due to the unique nature of its operations.

This further development of your skills and experience is not just in your own interest. It is also necessary in the interests of the Bank in terms of developing our human resources and, through that, our customer service and business.

Although the foregoing are the principal reasons in favour of your transfer, we also note that a transfer will give you the further opportunity, from time to time, to experience and relieve in other roles within a regular branch environment, which is not available at the specialized Nadi Airport Branch. Again this will be to your benefit in terms of your personal development, as well as to the Bank’s, in terms of utilizing and developing its human resources, contributing to succession planning and ultimately enhancing its customer service and business."

The Tribunal accepts that these are relevant and proper reasons for the reallocation of the Grievors by way of transfer. The Tribunal has concluded on the evidence placed before it that both Grievors were given an opportunity to explain their reasons for not waiting to be transferred. On the evidence the Tribunal has concluded that those matters were considered by the Employer. The Tribunal is satisfied that the Employer acted in good faith and reasonably when it reached the conclusion that both Grievors should be transferred for the stated reasons.

In their evidence both Grievors stated that they were not provided with any details of the perceived benefits which the Employer claimed would result from their being transferred. In particular, neither was shown any career path nor were examples of specific benefits ever discussed or disclosed.

The Tribunal accepts that the Employer intended these matters to be dealt with once the Grievors commenced work at their new branches. This was made clear to the Grievors in the letters dated 14 February 2007. The last portion of those letters indicated that their respective new managers would discuss these matters with them during meetings to be arranged once they started at the Branch.

Although not initially raised by the Grievors the Union in its memorandum dated 9 February 2007 (Saturday Ban) pointed out that the transfer "will cause them financial hardship". The Grievors also confirmed in their evidence that the financial impact of the transfer decisions was one of the main reasons for challenging the transfer.

The documentary evidence before the Tribunal established that for Grievor 1 (Ms Rabulago), her normal pay per fortnight was $959.66 for the fortnight ending 12 September 2007. The gross amount increased to $1422.08 (an increase of $462.00) due to allowances and overtime. For the pay period ending 26 September 2007 the gross total pay was $1484.44 (an increase of $524.78).

For Grievor 2 (Ms Lacanivalu) her normal pay per fortnight was $959.66 as at 12 September 2007. The gross amount increased to $1214.98 (an increase of $255.32) due to allowances and overtime. For the pay period ending 26 September 2007, the gross total pay was $1157.42 (an increase of $197.76). For the pay period ending 10 October 2007 the gross total pay was $1291.46 (an increase of $331.82).

The Tribunal accepts that the transfers would impact financially on the Grievors in the sense that their gross fortnightly pay would be reduced as a result of not being in receipt of the overtime payments and shift allowances which were in the most part unique to the Airport Branch. There was limited overtime available to some staff in other Branches.

It was accepted that the Grievors would be required to make adjustments. The Employer has offered to assist. There is only one major deduction which each Grievor has authorized to be made from their pay. Both are paying off a multi purpose loan. It may be that the Employer could provide either direct or indirect assistance in order to vary the repayment arrangements. The Tribunal is satisfied that the Grievors, with the Employer’s assistance if required, are in a position to make the necessary financial adjustments.

The Tribunal has also formed the view that it is not appropriate for the financial benefits, which flow from overtime payments and shift allowances and which are substantially higher at the Nadi Airport Branch than at any other branch, should remain the sole domain of a few privileged employees and union members. The opportunity to earn extra income by way of overtime rates and shift allowances at the Nadi Airport Branch should be made available to all interested employees and union members on a fair rotational basis.

During the evidence, it was stated that the Employer had introduced a two year limit on postings to the Nadi Airport Branch. This was also conveyed to the Union in a letter dated 5 January 2006 from the Employer. In its response dated 12 January 2006 the Union indicated its opposition to such a measure. This surprises the Tribunal. It would seem that it would be in the interests of the union membership as a whole for as many members as possible who may wish to earn extra income through overtime rates and shift allowances to be given the opportunity to do so through a policy such as has been proposed by the Employer. It seems that by protecting the interests of two union members in order to ensure that they have indefinite tenure at the Nadi Airport Branch, the Union is not acting in the best interests of the membership as a whole.

The Tribunal would expect that the policy would be implemented fairly and that any other employees who have been posted to the Nadi Airport Branch for more than two years will be transferred to suitable postings as soon as vacancies can be identified and subject to the requirements of clause 10 (i).

Under the circumstances the Tribunal has concluded that there was no evidence to establish that the Employer’s decision to transfer the two Grievors was taken in bad faith or was unreasonable. The transfer is to be- come effective on Monday 7 January 2008.

AWARD

The Employer’s decision to transfer the Grievors with effect from 2 April 2007 was not unreasonable.

Ms Rabulago is to be transferred to the Nadi Branch and Ms Lacanivalu is to be transferred to the Namaka Branch with effect from 7 January 2008.

DATED at Suva this 28 day of November 2007.

Mr. W. D. Calanchini
ARBITRATION TRIBUNAL