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State v Permanent Secretary for Labour & Industrial Relations, Ex parte Foods (Pacific) Ltd [1995] FJHC 151; HBJ0001j.1994s (27 September 1995)

IN THE HIGH COURT OF FIJI
(AT SUVA)

JUDICIAL REVIEW NO. HBJ0001 OF 1994

STATE

V

THE PERMANENT SECRETARY FOR LABOUR AND
INDUSTRIAL RELATIONS

EX-PARTE: FOODS (PACIFIC) LIMITED

S. Sharma for the Applicant
D. Singh for the First-named Respondent -
Permanent Secretary for Labour and Industrial Relations
No appearance for the Second-named Respondent - National Union of Factory and Commercial Workers

Date of Hearing: 21st September 1995
Date of Judgment: 27th September 1995

JUDGMENT

By leave granted by me on 12th of May 1994 the Applicant seeks Judicial Review of the decision of the First-named Respondent dated 28th September 1993 refusing an application by the Applicant dated 10th August 1993 for withdrawal of the Voluntary Recognition Order accorded to the National Union of Factory and Commercial Workers ("the Union") as the representative of and the bargaining agent for all members of the Union employed by the Applicant relevant to their conditions of employment.

The relief sought by the Applicant is an order of certiorari to quash the decision of the First-named Respondent, an order of Mandamus directing the First-named Respondent to immediately grant the Applicant's application of the 10th of August 1993 and a declaration that the decision of the First-named Respondent refusing the Applicant's application was unlawful and without jurisdiction. The Applicant also seeks an order for damages and costs.

Most of the history of the matter is set out in the affidavit of Jagdish Chandra Patel the General Manager and Director of the Applicant sworn on the 20th of January 1994 in support of the application for leave to apply for Judicial Review.

I shall now summarise that history which has never been disputed by the Respondents. By a Master Agreement entered into between the Applicant and the Second-named Respondent on 19th November 1990 the parties agreed on the terms and conditions of employment of members of the Union employed by the Applicant which is engaged in the business, inter alia of manufacturing and canning meat and sea food products. Clause 1 of the Agreement recognised the Union as the authorised bargaining agent for its members employed by the Applicant. The other terms of the Agreement are irrelevant for the purposes of this application.

On 10th August 1993 the Applicant applied to the First-named Respondent pursuant to Section 7 of the Trade Unions (Recognition) Act, Cap. 96A seeking withdrawal of the Voluntary Recognition Order accorded by the Applicant to the Union. The reason for the Applicant seeking withdrawal from the Voluntary Recognition Order was stated in a letter dated 10th of August 1993 to the First-named Respondent namely that as from 1st January 1993 the average number of persons in the company's employment who were voting members of the Union was less than 50 percent of the average number of persons who were eligible for membership thereof.

Section 7 so far as relevant reads thus:

"A trade union which has become entitled to recognition by an employer under the provisions of section 3 or section 5 shall continue to be so entitled until such time as the Permanent Secretary on an application by the employer, determines that over a period of six months ending not more than two months before the date of application, the average number of persons in his employment who were voting members of the recognised trade union was less than fifty per cent of the average number of persons who were eligible for membership thereof, in which case from the date of the Permanent Secretary so determining the trade union in question shall cease to be entitled to recognition."

The company in its letter also stated that its employment records were available for inspection.

Annexed to the Applicant's affidavit of 20th January 1994 was a list of all employees of the company for the period 1st December 1992 to 30th July 1993 together with details and percentages relating to Union membership. These details purport to show that from the 5th of January 1993 to the 27th of July 1993 the percentage of employees of the Applicant who were members of the Union varied from 46 to 22. On the 5th of January 1993 the percentage was said to be 46 and on the 27th of July this had fallen to 37. It would appear taking a very quick average of these percentages that they average approximately 40 percent.

The First-named Respondent did not reply immediately to the Applicant's request but on the 5th of October 1993 the Applicant received a letter from the First-named Respondent paragraphs 2 and 3 of which read:

"The necessary exercise to determine your application has been completed and it has been established that over a period of six months ending 26th July, 1993, the average number of persons in your employment who are voting members of the National Union of Factory and Commercial Workers is more than fifty per cent of the average number of persons who are eligible to be members of the said union.

In view of the foregoing findings, I hereby advise that your application is refused."

Upon receipt of this letter the Applicant instructed its solicitors to write to the First-named Respondent on the 14th of October 1993 stating that the Applicant intended to challenge the decision by way of Judicial Review but in the meantime sought full details of the nature and scope of the necessary exercise, of the precise basis and/or reasons for the decision and particularly the names of persons who were held to be eligible for voting purposes or for the purposes of Union membership.

The Permanent Secretary replied to the letter of the Applicant's solicitors by letter dated 22nd October 1993 of which I again quote the last two paragraphs:

"I wish to advise that I would not be able to accede to your request in full. To provide you with names of those who were held to be eligible voting members at the time would not be proper for me. The reason is obvious.

However for your information in determining the application I took into account the provisions of both the Trade Union Recognition Act as well as the contents of the clause on Recognition of the Master Agreement which exists between the parties."

The Applicant's solicitors responded to this letter by another letter dated 27th October 1993 in which they stated so far as material:

"We are puzzled by your second paragraph of the letter and more so given that it must have formed the very basis of the decision. Our client is entitled to know the precise basis for that decision and it certainly behoves you to provide us with the names of the eligible voting members. There is no element of confidentiality involved in the exercise conducted by the Ministry.

If this request is declined we ask that you provide us with full grounds and reasons for the same and contrary to your claim the reason is not obvious to us.

Could you please provide us with the precise provisions of the Trade Union Recognition Act and the precise clauses of the Master Agreement that you relied upon in reacting the said decision."

On the 2nd of December 1993 the Permanent Secretary wrote to the Applicant's solicitors stating that he was seeking advice from the Solicitor-General's Office before replying to the letter of 27th October.

By the 30th of December 1993 the Permanent Secretary had still not replied but on the 25th of January 1994 he wrote to the Applicant's solicitors in a letter exhibited to a supplementary affidavit sworn and filed on behalf of the Applicant by Mohammed Ishaaq Khan a Law Clerk employed by the Applicant's solicitors on the 19th of September 1995. This letter so far as relevant reads as follows:

"Further to my letter of 2nd December 1993 and to your subsequent letter of 30th December, 1993 on the above subject I wish to reiterate that I am unable to provide you with names of eligible voting members as requested. I regard this as not being prudent as it would result in disclosing information which I am not empowered, since the information we hold are confidential and for the use of this office only.

The above decision is made, based on my good judgment and not in terms of provisions of either the Trade Union (Recognition) Act or the clauses of the Master Agreement existing between your client and the Union.

I regret for the belated response."

It will be immediately apparent that this last letter from the Permanent Secretary is in direct contradiction of the last paragraph of the Permanent Secretary's letter of the 22nd of October 1993. On the hearing before me counsel for the First-named Respondent informed me that he had not seen the last affidavit filed on behalf of the Applicant and consequently the Permanent Secretary's letter of 25th January 1994 but I am prepared to accept that it was served on the 19th of September 1995 at the office of the Solicitor-General.

The Applicant claims that the refusal of the First-named Respondent to consent to the Applicant's application for withdrawal of the Voluntary Recognition Order is adversely affecting the legal rights of the company both in the sphere of industrial relations and financially.

No affidavit has been filed in reply by either of the Respondents although the Union has at all times been aware of the proceedings and has been served with all relevant documents.

I was told by counsel for the First-named Respondent that the reason why no affidavit in reply was sworn was because the Respondent believed there were good prospects of settlement in this matter. Here it is necessary for me to refer to the 12th of September and 24th of November 1994 and the 16th of January 1995. On the first of these days the parties with the exception of the Union appeared before me in chambers when I suggested that as the question seemed to be one of simple arithmetic the solicitors for the parties should attempt to explore the possibility of reaching agreement and the method proposed was that there should be a recount conducted to see whether it was possible to reach agreement on the percentage of the Applicant's employees belonging to the Union at the relevant time.

I repeated this suggestion on the 24th of November when counsel for the Applicant only appeared before me in chambers when I requested him to inform the Solicitor-General's office that I would adjourn the matter to the 16th of February 1995 by which time I expected the First-named Respondent to have completed its count of the number of the Applicant's employees.

Until the date of the hearing on the 21st of September I was unaware that the Permanent Secretary had written to the General Manager of the Applicant on the 28th of March 1995 in a letter which was handed up to me without objection from counsel.

The letter stated that the exercise had been conducted by presumably the Permanent Secretary to determine the percentage of Union membership and this had taken into account the Applicant's material and the Union's records. The letter then said it was found that more than fifty percent of the company's employees were Union members which was the reason why the First-named Respondent had rejected the Applicant's application for withdrawal of the Recognition Order.

The letter then referred to an alleged order by this Court that the recount be carried out and stated that the Permanent Secretary would be grateful if the Applicant could produce for him any additional information apart from that already supplied.

I must state here that at no time did the Court order a recount but merely suggested it as the sensible way of resolving the matter between the Applicant and the Permanent Secretary. The letter also requested the names and occupation of the employees of the company during the relevant period 27th January 1993 to 27th July 1993.

Also handed up to me at the hearing, again without objection, was a copy letter dated 10th April 1995 from the Union to the Acting Permanent Secretary for Labour and Industrial Relations which purports to question the bona fides of the Applicant's lawyers. The letter then contains these two paragraphs:

"The suggestion by the Company's lawyers that they should be involved in the recounting together with the State Counsel will not be proper and should not be permitted. One of the reason being that the Company's lawyers are directly representing a party therefore they have a vested interest. Whereas the State Counsel is not representing the Union which is the other party.

The delay in having this matter resolved is getting inordinate and unreasonable and is causing undue deprivation to our members as some disputes involving dismissal of our members are still in hold pending the outcome of this case."

When I remarked during argument about the first of these paragraphs counsel for the First-named Respondent stated that the Union appeared to believe that the Permanent Secretary for Labour and Industrial Relations was really a supporter of the Union or at least was expected to be friendly towards the Union in industrial matters.

This appears to be a reasonable inference from the letter because it invites the Permanent Secretary to agree that the company's lawyers and State counsel should not be permitted to be involved in any recount. I do not know whether the Permanent Secretary ever replied to this letter but the Applicant's solicitors did in a letter dated 12th April 1995 which was also handed up to me without objection and which pointed out that the Union had chosen not to be heard or represented in these proceedings, a comment which has been borne out by the failure of the Union to take any part in the hearing in this Court.

If as counsel for the First-named Respondent states this Union and some others believe that the function of the Permanent Secretary is essentially to protect employees in their employment, I can only say that such Unions are under an illusion and the sooner they are disillusioned the better.

The powers and the duties of the Permanent Secretary are set out in various Acts namely the Employment Act Cap. 92, the Trade Disputes Act Cap. 97, the Trade Unions (Recognition) Act 96A and the Workmen's Compensation Act Cap. 94. Those functions are with two possible exceptions contained in Section 8 of the Employment Act of a purely administrative nature. Section 8 of the Employment Act permits the Permanent Secretary, any Labour Officer or any Labour Inspector authorised by the Permanent Secretary in writing to institute proceedings in respect of any offence committed by any person against the provisions of the Act and to prosecute and appear in such proceedings if he wishes. They also include the right to institute or appear on behalf of any employee in any civil proceedings by an employee against his employer in respect of any matter or thing arising out of or in the course of the employment of such employee.

That however does not mean that the Permanent Secretary can so to speak "take sides". It must be assumed that before he would exercise his powers under Section 8 he must have formed an honest opinion that the employee for whom he had been asked to act had at least a prima facie case against his employer. This is not to say that in deciding to institute any such proceedings or any prosecution the Permanent Secretary is showing partiality against an employer. His primary function as I understand it is and must be to show no favour to either an employee or an employer or an organisation of employees or employers. I now pass to the substantive question.

The only probative evidence before the Court is contained in the two affidavits filed on behalf of the Applicant and as such I must accept it. It is to be regretted that neither Respondent saw fit to seek leave to file any affidavit in response to those of the Applicant. I accept that this was probably due to oversight on the part of the First-named Respondent and I surmise due to a belief by the Second-named Respondent that the First-named Respondent could and would adequately represent the Union's interest. For the reasons I have just given I consider such a belief if it is true has no basis in law. Had either Respondent sought leave to file an affidavit in reply I would have granted it readily because that could only assist the Court in deciding the question before it. If however any affidavit so filed did not give particulars of how the percentage of "more than 50 percent" claimed by the Permanent Secretary was arrived at I would have directed the Permanent Secretary to supply further and better particulars.

Originally the First-named Respondent stated that it would not be proper for him to provide the Applicant with the names of those who were held to be eligible voting members at the relevant time. He said the reason was obvious but just as it was not obvious to the Applicant's solicitors it is equally not obvious to me.

When he was pressed on this by the Applicant's solicitors in their letter of the 27th of October 1993 the Permanent Secretary replied in his letter of 25th of January 1994 that the reason why he was not prepared to disclose the names of the eligible voting members was because he was not empowered since the information was confidential and for the use of the Permanent Secretary's office only.

In my judgment this shows a complete misunderstanding of Section 7 of the Trade Unions (Recognition) Act. In my opinion there is nothing in that section to justify any claim of confidentiality or even public interest immunity by the Permanent Secretary. In my view Section 7 acknowledges what I would have thought was a fairly obvious fact that the only way in which either the Permanent Secretary or an employer could calculate the requisite percentage was by examining the records of the employer as to the names of those of his employees who were members of a Union. Of course the Permanent Secretary might also enquire of the Trade Union concerned but his primary source of information in my view would have to be the employer's own records. In refusing to disclose the evidence which caused him to reach his conclusion that the relevant percentage in this case was more than 50 percent I consider the Permanent Secretary misdirected himself and for that reason also the application must succeed.

As a corollary of that, I consider also that the Applicant was entitled to know the reasons why the Permanent Secretary refused to give details. He was correct in that contrary to what he had previously said he could not justify his refusal to disclose the information under the Trade Unions (Recognition) Act or the clauses of the Master Agreement.

Counsel for the Applicant referred me to the decision of the Court of Appeal in Civil Appeal No. 9 of 1984 Akbar Buses Limited v. Transport Control Board and Another, unreported judgment of 27th July 1984. At page 51 of the 1984 bound copies of Court of Appeal judgments the Court remarked that there was no statutory requirement in the Traffic Act. as there is sometimes found elsewhere, for the Board to give reasons for its decision. In de Smith's Judicial Review of Administrative Action (4th Edition) (1980) page 148 the author said:

"If moreover no reasons for an administrative decision are proffered at all, it does not follow that the courts are powerless to intervene. For if a person seeking to impugn such a decision establishes a prima facie case of misuse of power by the administrative authority, failure by that authority to answer any allegation may justify an inference that its reasons were bad in law or that it had exercised its powers for an inadmissible purpose."

In R. v. Civil Service Appeal Board ex parte Cunningham (1990) Administrative Law Reports page 580 Mr. Justice Otton (as he then was) quoted with approval first from Professor Wade in his 6th Edition (1988) on Administrative Law at page 547 as saying:

"There is no doubt that the lack of a general duty to give reasons is an outstanding deficiency of Administrative Law."

His Lordship then referred to the Hamlyn lectures for 1989 delivered by Lord Justice Woolf in his capacity as a fellow of University College, London. Lord Justice Woolf stated:

"However, I regard the giving of satisfactory reasons for a decision as being the hallmark of good administration and if I were to be asked to identify the most beneficial improvement which could be made to English administrative law I would unhesitatingly reply that it would be the introduction of a general requirement that reasons should normally be available, at least on request, for all administrative actions. The only exception which I would countenance is one to cover those few situations where there is a compelling case for saying that the giving of reasons would be harmful in the public interest."

I would hope that if it is not the law already in Fiji, the law should be as Lord Woolf stated, I would hold that unless there is clear statutory authority either by direct words or by necessary implication for a tribunal whose decision must affect the rights and livelihood of a person against whom it gives a decision not to give reasons for its decision such tribunal should as a matter of law be required to give reasons for its decision.

Counsel for the Applicant invited me to read a book entitled Judicial Review of Administrative Action in the 1980s - Problems and Prospects which contains the proceedings of a conference held in Auckland, New Zealand in February 1986 on the subject of the book. In particular counsel invited me to read two chapters containing the papers delivered by the Hon. Justice M.D. Kirby and Mr. Michael Taggart the latter of which analyses the High Court of Australia decision in Public Service Board of New South Wales v. Osmond in which the High Court of Australia overruled the majority decision of the New South Wales Court of Appeal (1984) 3 NSWLR 447, 1985/1986 159 CLR 656. Mr. Taggart writes most persuasively that the majority of the New South Wales Court of Appeal stated the law correctly. The Court of Appeal held that the Public Service Board was obliged as a matter of common law to give reasons for decisions and this view was rejected by the High Court of Australia.

As a judge of first instance I would not presume to express my personal view about the decision of the High Court of Australia and particularly as to whether it should be followed in Fiji except to repeat my comment on Lord Woolf's remark which I have quoted above.

In the instant case I consider the Applicant was entitled to be given reasons by the First-named Respondent in the form of particulars of the names of its employees whom the First-named Respondent stated constituted the majority of more than 50 percent which caused him to reject the Applicant's application for withdrawal of the Voluntary Recognition Order.

It was also argued by the Applicant that this case provided a classic example of the three grounds on which Lord Diplock held administrative action is subject to control by Judicial Review in Council of Civil Service Unions and others v Minister for the Civil Service [1983] UKHL 6; (1984) 3 ALL E.R. 935 at page 950-951 namely illegality, irrationality and procedural impropriety.

In my judgment all three of these grounds can be supported by the facts of the instant case and for that further reason I will grant Judicial Review of the First-named Respondent's decision.

The order of the Court will therefore be that certiorari go to quash the decision of the Permanent Secretary for Labour and Industrial Relations dated 28th of September 1993 which refused the Applicant's application for withdrawal of the Voluntary Recognition Order accorded to the National Union of Factory and Commercial Workers and that Mandamus issue directing the Permanent Secretary for Labour and Industrial Relations to forthwith grant the Applicant's application for withdrawal of the said Voluntary Recognition Order. The final order of the Court is that the Respondents pay the Applicant's costs to be taxed in default of agreement.

JOHN E. BYRNE
J U D G E

The following legislation and cases mentioned in judgment:

Employment Act Cap. 92.
Trade Disputes Act Cap. 97.
Trade Unions (Recognition) Act 96A.
Workmen's Compensation Act Cap. 94.
Civil Appeal No. 9 Akbar Buses Limited v. Transport Control Board and Another, unreported judgment of Court of Appeal dated 27th July 1984.
Public Service Board of New South Wales v. Osmond (1984) 3 NSWLR 447, 1985/1986 159 CLR 656.
R. v. Civil Service Appeal Board ex parte Cunningham (1990) ALR 580.
Judicial Review of Administrative Action in the 1980s - Problems and Prospects edited by Michael Taggart.

HBJ0001J.94S