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Port Workers & Seafarers Union of Fiji v Ports Terminal Ltd [1998] FJHC 210; Hbc0609.98s (26 November 1998)

IN THE HIGH COURT OF FTJI
(AT SUVA)

CIVIL ACTION NO. HBC 0609 OF 1998S

BETWEEN:

PORT WORKERS & SEAFARERS UNION OF FIJI
Plaintiff

AND

PORTS TERMINAL LIMITED
Defendant

K.R. Bulewa for the Plaintiff
H. Lateef for the Respondent

DECISION

On 12 November 1998 the Plaintiff (the Union) commenced these proceedings by writ claiming "damages for breach of contract of employment, unlawful dismissal and unconstitutional deprivation of property."

On the same day an ex parte Notice of Motion was filed by the Union seeking an order restraining the Defendant from terminating the employment of 34 employees, members of the Union.

In the affidavit filed in support the Union's General Secretary deposed that the 34 named members of the Union had been employed by the Ports Authority of Fiji (PAF) under terms and conditions previously negotiated between the Union and PAF. Following corporatisation of PAF under the Public Enterprise Act (35/1996 - the Act) the stevedoring operations of PAF were taken over by the Defendant in about January 1998 (see LN 145/97).

It was further deposed that for the past 11 months the 34 had been employed by the Defendant under the same old terms and conditions inherited from the PAF. On 5 November 1998 however the Defendant wrote to each of the 34 advising them that if they did not agree by 12 November 1998 to be employed on new conditions offered by the Defendant then the Defendant would consider its relationship with them to be at an end.

In view of the nature of the claim I abridged time for service and heard Mr. Bulewa and Mr. C. Lateef the following day.

Mr. Bulewa urged me to order the preservation of the status quo, in other words to allow the 34 to continue working for the Defendant for the time being. He explained that the 34 were involved in work of national importance at the docks, that if industrial action were not avoided then there would be serious repercussions and that negotiations to resolve the dispute over the new terms of employment to be offered to the 34 were at an advanced and delicate stage with ministerial intervention promising a positive outcome.

Taking into account Mr. Bulewa's indication that the matter might, given a few days grace, be amicably resolved and upon Mr. Lateef agreeing to suspend operation of the 5 November letter at least for a few days I ordered that the status quo be maintained until 2.30 p.m. on 24 November.

By 24 November 2 further affidavits had been filed, the first by Herbert Hazelman, the Defendant's Chief Executive Officer. Mr. Hazelman explained that the 34 had been offered employment by the Defendant on 8 January 1998 but they had refused to take up the offer. Despite this, the Defendant had continued to employ the 34 as it did not wish, at the initial stages of commercialisation to create industrial unrest. Mr. Hazelman however insisted that the 34 were employed qua independent contractors. Furthermore, the Defendant did not recognise the Union as representing the 34 and did not have any collective or other agreement with it. The defendant did not actually wish to terminate the services of the 34, it merely wished to employ them on new commercial terms and conditions which it was suggested were actually better than those upon which they had been previously employed.

The Union's General Secretary filed a lengthy reply to Mr. Hazelman's affidavit shortly before the hearing on 24 November. He rejected the suggestion that there was no agreement between the Union and the Defendant. He deposed that the Defendant had continued to honour the previous agreement between PAF and the Union and had continued to deduct Union dues from the 34. Following a letter from the Defendant on the 19th November the Union wrote to the Permanent Secretary for Labour and Industrial Relations seeking a compulsory recognition order, presumably under the provisions of Part II of the Trade Unions (Recognition) Act 1998.

The General Secretary rejected the suggestion that the new terms and conditions being offered to the 34 were an improvement on those which they had previously enjoyed. In fact he described the new conditions as "inhuman and anti-social". Notwithstanding this complaint the main the issue between the parties was the appropriate licence fee to be paid to a 3rd party, the Veitata Stevedoring Company which it was proposed would take over stevedoring for the Defendant and which, I was led to understand, would actually employ the 34. The Defendant's Board was due to meet on 14 December to consider new proposals already put forward by the Union and the injunction should be continued up until that date at least to allow the discussions to bear fruit.

In further support of the continuation of the injunction Mr. Bulewa suggested that the Union had a strong arguable case, that the balance of convenience and justice required continuation of the injunction and that damages would be an insufficient remedy for the 34 who, if the operation of the final paragraph of the letter of 5 November were not again further suspended would lose their jobs and might well never get them back. He pointed to the collective agreement between the Union and PAF and also stressed that this dispute involved an essential service to which Part IV of the Trade Disputes Act (Cap 97) applied. He submitted that the Defendant's action amounted to a lock out and that the Defendant was bound by law to follow the procedures laid down by S16 of that Act.

Mr. Bulewa also referred me to the PAF Reorganisation Charter dated 15 October 1997, a charter prepared under Division 4 of the Act. Under that charter and its Partnership Agreement new terms and conditions proposed for its employees were to be discussed with the employees prior to implementation. The Defendant was not, Mr. Bulewa argued, allowing these discussions to reach agreement and the Court should restrain the Defendant from breaching its charter.

In answer, Mr. Lateef confined himself to 3 short submissions. First, he pointed out that the writ did not seek injunctive relief. Second, he referred to the long established rule that specific performance will not generally be ordered of contracts of personal service and neither will such contracts be indirectly enforced by restraining either party by injunction from committing a breach of a positive obligation to employ (see e.g. Rely-a-Bell Co Ltd v Eisler [1926] Ch 609).

Thirdly, Mr. Lateef submitted that damages would in any event be an adequate remedy for breach of any contract which the Union could eventually show had taken place.

Having heard Counsels' submissions and considered the evidence I am satisfied that I should not extend the present injunction any further.

First, I am not satisfied that the Union has shown that it has any cause of action in tort or in contract against the Defendant arising out of the decision not to continue to employ the 34 on the old PAF terms and conditions. If there is a cause of action then it seems to me that it is the 34 who have it individually and not the Union. The interest of the Union are, as I see them, clearly different from the interests of the 34 and therefore the Union cannot represent them (see RHC O15 r14 and Markt & Co Ltd v Knight SS Co Ltd [1910] UKLawRpKQB 126; [1910] 2 KB 1021).

Secondly, I am not at all sure that the 34 are indeed employees of the Defendant. I was not given any precise evidence on the nature of their previous employment with PAF and neither was it shown that the previous employment was in some sense inherited by the Defendant from PAF. Unfortunately neither the Act not the Re-organisation Charter provides any useful guidance on this point. While some regulation have been made under the Act (e.g.: Public Enterprise (Ports Authority of Fiji) Regulations 1998-LN 63/98) none seem to have been made under section 38(2)(e) governing the status of former employees of the replaced organisation. In the absence of anything clearly to the contrary it seems to me that the presumption must be that the Defendant as a new legal entity formed in about January 1998 does not stand in a new contractual employer/employee relationship with the 34.

In my view however whichever position is in fact correct the 34 are in difficulty. If they are in fact employees then first, the rule relied on by Mr. Lateef in relation to injunctive relief in connection with contracts of employment applies while secondly the procedure laid down by Part IV of the Trade Disputes Act does not, on the evidence before me, appear to have been followed.

If, on the other hand the 34 are not in fact employees of the Defendant then first, the Part IV procedure does not apply since no trade dispute exists between the parties as defined by the Trade Dispute Act as amended (see Act 54 of 1998) and secondly, the same common law rule against enforcing employment relied on Mr Lateef applies.

There are, as I see it, 2 further reasons for not extending the relief any further. First, from the totality of the evidence now before me I am not persuaded that damages would not adequately recompense the Union and/or the 34 for any wrong which they have suffered. Secondly, and perhaps more decisively, it appears to me that this dispute is essentially about terms and conditions, the chief of which is money.

In my opinion the Court should be wary of allowing its procedure to be used by one party principally as a means of obtaining a negotiating tactical advantage over the other. The original interim relief was granted on a clear understanding that it would preserve the status quo for but a few days. Now extension is being sought until 14 December next with no guarantee of resolution of the parties' differences on that date.

One obvious alternative to the present proceedings would be for the 34 to accept the Defendant's offer thus unarguably obtaining employment. They would then be in a position, through their Union or individually to renegotiate their terms and conditions.

In all the circumstances I decline to make any further order and accordingly the relief previously granted lapses.

M. D. Scott
Judge

26 November 1998

HBC0609.98S