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State v Arbitration Tribunal, Ex parte Fiji Electricity Authority [2007] FJHC 131; Judicial Review No. 0022.2006 (22 March 2007)

IN THE HIGH COURT OF FIJI
At Suva

Civil Jurisdiction

JUDICIAL REVIEW NO. 0022 OF 2006

BETWEEN

STATE
Applicant

AND

ARBITRATION TRIBUNAL
Respondent

AND

FIJI ELECTRICITY WORKERS ASSOCIATION
1^ST Interested Party

AND

DAVENDRA NAIDU
2^ND Interested Party

EX PARTE:

FIJI ELECTRICITY AUTHORITY

Counsel: Mr. N. Lajendra for the Applicant
Ms. N. Karan for the Respondent
Ms. N. Khan for the 1^st and 2^nd Interested Parties.

Dates of Hearing: 1^st and 2^nd March 2007
Date of Judgment: 22^nd March 2007

JUDGMENT

[1] There is an electricity generating plant, Cawaira Power Station, at Labasa on Vanualevu. It provides electricity for the township of Labasa and immediate surrounding areas.

[2] On 13^th October 2003 Generator No.6 [G6], the plant's newest and most up to date generator, was on "load". At about 9:30 pm it started to "trip", "de-load" and was stopped about 9:35 pm. Between 3:00 am and 6:00 am on the 14^th October rectification work was carried out. At 6:15 am Satish Lal, the diesel engine foreman, applied for a permit to work [PTW] on G6. This permit was granted a few minutes later. Between 6:00 and 7:30 am work continued on G6. It was also decided that weekly maintenance work could be carried out on G6 at the same time as the repair work.

[3] In the course of this, Satish Lal's overalls became saturated with fuel and he left at about 7:30 am with Sukha Singh, an electrical technician and acting manager, to return home to change. At 8:00 am the second interested party, Davendra Naidu, started work. Thereafter events happened quickly.

[4] At 8:45 am Generator No. 1 [G1] "tripped" and ceased to provide power. At 9:15 am G3 tripped. At 9:21 am G5 tripped followed shortly afterwards by G2 and G4. Labasa and surrounding areas were left without power.

[5] At 9:05 am Davendra Naidu had asked for Satish Lal's PTW to be cancelled and this was done. He then instructed another person to start G6 on automatic start. G6 would not start as the barring gear was engaged. The barring gear was then released, the Governor was "full open" and G6 was started. Without any restraints G6 quickly reached excessive revolutions per minute and sparks and smoke were seen. G6 was then shut down. Approximately A$400,000 worth of damage was caused to G6.

[6] The applicant, the Fiji Electricity Authority, conducted an investigation into what happened that morning and as a result Davendra Naidu was dismissed.

[7] The matter was taken by the Fiji Electricity Workers Association, [FEWA], the First Interested Party and Davendra Naidu to the Arbitration Tribunal. On 2^nd May 2006 the Tribunal found that:-

"The summary dismissal of the Grievor [Davendra Naidu] was not justified in the circumstances of the dispute."

"The procedure adopted by the employer was fair."

"The Grievor is to be reinstated from the date of his suspension. He is to be paid six months wages and the balance is to be deemed leave without pay."

[8] The FEA now seeks Judicial Review of that decision. They ask for,

"(a) An order of certiorari to remove the award of the respondent made on the 2^nd day of May 2006 into this Honourable Court and same be quashed and/or set aside;

(b) A declaration in any event that said award contained errors of law on the face of the record and/ or was unreasonable and/or failed to take into consideration and/or give adequate consideration to relevant matters, and/or took into account irrelevant matters;

(c) An order that the second interested party's termination of employment was justified in the circumstances;

(d) Further declarations or other relief as this Honourable Court may deem just;

(e) Costs of this action."

[9] The applicant's arguments can be broadly divided into three areas:

First, the Tribunal took into account irrelevant matters and disregarded relevant ones, second, the decision was "Wednesbury" unreasonable and third, there were misdirections on issues of law.

[10] All three grounds are necessarily interrelated. The detailed points relied upon by the applicants were set out in their grounds of application at paragraphs 1, (a) - (y), paragraph 2(a) - (m) and the ensuing paragraphs 3 to 7. I will deal with each of the grounds in turn.

[11] The respondents took a neutral stand in these proceedings. FEWA and Davendra Naidu oppose the application. They state the Tribunal's award did not contain any errors of law and no irrelevant matters were taken into consideration or relevant matters omitted. They point to Mr. Naidu's long years of service, the fact his conduct was not too serious in the circumstances, the fact the value of the damage influenced the assessment of the wrong doing and the penalty was harsh and unjustified when compared to the misconduct.

[12] I have before me the Statement of Application filed on 28^th June 2006, the affidavit of Arieta Cama filed on 28^th June 2006 and the applicant's written submissions. I have the affidavit of Ateca Cakau filed on 24^th August 2006 for the respondent and the grounds of opposition and three bundles of submissions with supporting authorities on behalf of the first and second interested parties.

[13] The Arbitration Tribunal found [Decision page 15, para 2] that,

"The Union has not sought to challenge in any significant manner the procedure followed by the Authority. The Tribunal is not satisfied that the Grievor was disadvantaged or prejudiced by the procedure adopted by the Authority. The Griever's right to procedural fairness has not been breached."

[14] No point has been taken by any of the parties in this Judicial Review upon the procedures adopted by FEA or the Tribunal. Accordingly I address my mind to those issues summarised above.

[15] This dispute was referred to the Permanent Arbitrator on the 18^th June 2004 by the Chief Executive Officer, Ministry of Labour, Industrial Relations and Productivity with the following Terms of Reference.

"...for settlement over the termination of employment of Mr. Davendra Naidu, a Power Station Mechanical Technician, based at Labasa Power Station with effect from 16^th December 2003 and the Association contends that the Authority's decision to terminate Mr. Naidu is unfair, unreasonable and unjustified. The Association further contends that Mr. Naidu be reinstated to his former position repaid all salary and allowances from the date he was given his suspension".

[16] Counsel for the applicant accepts from the outset that the amount of damage caused in this case is not a deciding factor. He relied upon the dictum in Fiji Public Service Association v The Arbitration Tribunal and Another - ABU 10/2003 where it is stated,

"Reinstatement of a dismissed employee is a matter of discretion for the Tribunal. The discretion must be exercised Judicially. The test to be applied in considering reinstatement is to see whether the mutual trust and confidence which is so central to the employee and employer relationship, viewed objectively, and whether the employee would be a harmonious and effective member of the employer's team have been affected".

[17] An Arbitration Tribunal's jurisdiction is limited by its Terms of Reference. The applicants, of course, accept that. They aver that irrelevant matters were taken into account and relevant matters omitted. They continue that the Tribunal's decision was unreasonable and there were errors of law.

[18] In the course of argument counsel for all parties addressed in turn the specific points at Ground 1(1) (a) - (y) and Ground 1(2) (a) - (m) as well as the other points. After some argument, counsel for the first and second interested parties was given an overnight adjournment so that she could ensure that all points were specifically addressed by her.

[19] I do not propose to deal with each of those thirty eight points individually. There are a number of important central facts, found by the Tribunal, which must first be stated.

[20] Davendra Naidu started work on the 4^th October at 8:00 am. He was not asked to oversee the work on G6. Satish Lal had already, by that time, left the Generator Plant. Davendra Naidu at 9:05 am decided to ask N.C.C. [National Control Centre] by telephone for cancellation of Satish Lal's permit to work [PTW]. Without. cancellation, G6 could not be started. When making the application and getting the consent to cancel the PTW, Mr. Naidu gave Mr. Lal's name and signed Satish Lal on the accompanying document:

[21] It is further accepted that Mr. Naidu was present and heard a telephone conversation with Sukha Singh, the acting station manager, in which the latter stated that G6 was not to be restarted. The routine maintenance work which normally takes a few hours had apparently only taken one hour when Mr. Naidu made the decision to start G6.

[22] When asked in evidence before the Tribunal "why give the order to start it up [G6] when you had not been trained on it?", Mr. Naidu replied "Power off meant that FEA losing revenue".

[23] When he was asked about the Governor and barring gear on G6 he replied "I went to check but I could have overlooked either the Governor or the barring gear".

[24] He was asked "were you honest when you wrote S. Lal's name?" He replied "I did not mean to put S. Lal's name. I didn't call Vuda to correct the mistake ... because we were busy and I forgot about the permit".

[25] It was evident on the face of the papers before the Tribunal and accepted by counsel in the Judicial Review proceedings that, Mr. Naidu had been disciplined previously for a check failure which resulted in some damage.

[26] These are Judicial Review proceedings, the review of the procedures of a public body and the exercise by it of its powers. It is not for this court to substitute its own view of the merits of this matter for that of the Tribunal. The FEA must substantiate their specific grounds of complaint to succeed. I also take into account the fact that it was the Tribunal that saw and heard the witnesses, this court has not had that benefit. I act upon the factual findings of the Tribunal save where they are clearly not supported by the evidence.

[27] In their letter of 16^th December 2003 FEA dismissed Mr Naidu because:-

"1. You cancelled the permit to work which was not under your name even though you are an authorised technician.

2. You instructed the operator to start the machine without making the necessary checks to ensure that the main machine was fully repaired and ready to be operated on.

3. You did not reveal your identity to NCC when asking for a cancellation of the permit to work on 14^th October 2003 even though the permit was put there by Satish Lal.

4. You put in Satish Lal's name and signature on the permit to work when you cancelled it. This action contravenes standard procedures for permit to work which you are well aware of.

5. Failing to comply with the safety requirements as stipulated in the Safety Manual and likewise section 13 of the Health and Safety Act 1996."

In this judgment I have disregarded and do not rely on the second limb of paragraph 5, as requested by the applicant.

[28] I do find that the Tribunal did take into account irrelevant matters and overlooked relevant matters. I set out below some examples.

[29] The Tribunal did not take into account the fact that Sukha Singh, the acting station manager, gave a specific direction not to start G6 until his return. Mention is made of this on page 6 of the Tribunal's decision. It does not feature in the reasoning. This directly relates to dismissal grounds 1,2 and 5. Had Mr. Naidu complied with this direction no harm would have come to G6.

[30] The Tribunal stated [page 12, para 3, line 5] "The person to whom the PTW had been issued had left the Power Station without a proper handover and without cancelling the PTW. The time of his return was not known to the Grievor". According to his own evidence Mr. Naidu knew that Sukha Singh was half an hour away. There was contact with Sukha Singh. If there had been no proper handover of the PTW by Satish Lal that was all the more reason not to cancel the PTW. (Satish Lal was disciplined for his shortcomings).

[31] The Tribunal found that [page 13, paragraph 2] "as previously stated the Tribunal is satisfied that the Grievor had been informed by Satish Lal that the rectification works had been completed." This was incorrect. On the evidence Satish Lal left to change his diesel soaked clothing at approximately, 7:30 am, Mr. Naidu did not start work until 8:00 am. On Mr. Naidu's own evidence he had been given the information via Pita Soqali that the job had been completed. There was no Lal to Naidu conversation. Lal denied giving anyone permission. Sogali didn't give evidence before the Tribunal.

[32] The Tribunal did not take into account the fact that on his own evidence Mr. Naidu did not have authority to order the restarting of G6. Neither did it take into account the fact he had not been trained on G6. The reason he gave for restarting it was "Power off meant that FEA losing revenue". Loss of revenue was not a factor to be considered in the circumstances.

[33] The Tribunal found that there was "a developing desperate situation [which] explained a response which was irregular and not in strict compliance with the manual", [page 12, para 3, line 18]. There certainly were problems which were developing. There is nothing in the evidence to suggest that these were highly unusual or so extreme that safety manuals and proper procedures should not be observed. Indeed, the very reason for manuals and safety procedures is to ensure that when there are problems or a crisis there are clear, laid out procedures and safety measures which should be followed. The Tribunal did not address this important and central issue in this case.

[34] The Tribunal found that the FEA had not shown that the Governor was set in the proper position when Mr. Naidu checked it but was then, without his knowledge, moved to full open moments before G6 was started. That was not the issue. The fact is that Mr. Naidu in his evidence stated "I went to check but I could have overlooked either the Governor or the barring gear". It was this knowledge of the procedure and the failure to follow it by Mr. Naidu which was the central factor to be taken into account. Further, this is the only evidence that bears on the starting of G6 with the generator full open.

[35] The Tribunal found [page 12, para 3, line 13] that "whilst he [Mr. Naidu] did give his name as Satish Lal to the Controller and whilst he did write Satish Lal on the PTW duplicate copy, the Tribunal has concluded that these actions were not dishonest in the sense that they were for personal gain or deceit." The issue before the Tribunal was not whether Mr. Naidu had given a false name or written a false name for personal gain. The essential issue was whether he was following proper procedures. The person receiving the report from Mr. Naidu in that false name gave clear evidence that had he known it was Mr. Naidu he would not have cancelled the PTW as "it would have been a breach of the Safety Rule." [See evidence of K. Qoro, Evidence page 7, line 9]. If the PTW had not been cancelled then according to normal operating procedures nobody would have attempted to start G6.

[36] In passing I note that it appears that "tagging procedures" were often not properly followed. In any event, Mr. Naidu a long experienced technician and others, including Mr. Lal, should have ensured tagging procedures were followed. I do not find this makes a difference to my conclusions. The tagging procedure is the placing of a clear visible tag on a Generator which is subject to a PTW, thereby warning everyone not to start it.

[37] The Tribunal's considerations were directed to the bona fides of the actions of Mr. Naidu. They found that his response was irregular and not in strict compliance with the manual but excused this on the basis that there was a "developing desperate situation". They excused his giving a false name and signing someone else's signature as not being "dishonest in the sense that they were for personal gain or deceit". They did not give weight to Mr. Naidu's knowledge that Sukha Singh had stated categorically that G6 was not to be started till his return, that Mr. Naidu had not being trained to do what he was undertaking, that he did not have authority to do what he was doing, that he could have failed to check the Governor and the gear barring, that he relied upon second hand reports as to the completion of the work on G6 and the completion of the routine maintenance, especially when the latter was completed in less than half the normal time.

[38] Counsel for the applicant in his third ground takes issue with the Tribunal [page 14] where Brown and Beatty's Canadian Labour Arbitration, 3^rd Edition, work at paragraph 7.3520 is cited. The applicant states "that the respondent misdirected himself in law when he held that the applicant had to establish culpable behaviour on the part of the second interested party which amounted to serious misconduct (page 14, paragraph 4, sentence 1)".

[39] The Tribunal stated "to the extent that the employer has established any culpable behaviour on the part of the Grievor, the Tribunal is not satisfied that it amounted to sufficiently serious misconduct to justify the Grievor's summary dismissal. The Tribunal is not satisfied that the employer has established that the Grievor knew or ought to have known that his instructions to start G6 created a potential risk of damage to the employer's property. Whilst a prudent employee may have conducted a more thorough check, the employee in this case acted in good faith by relying on the information passed to him by Satish Lal and the service fitters."

[40] The Tribunal gave its reasons for this conclusion by looking to the good faith of the employee and not his failure to follow prescribed and well known safety procedures. Further, the Tribunal looked to whether or not Mr. Naidu knew or ought to have known there was a potential risk of damage to the employer's property. Leaving aside the fact it is difficult to see how a man of Mr. Naidu's knowledge and experience could not have realised such a risk existed, this was not the central issue.

[41] The Tribunal continued that "even if a thorough check had been made before he gave instructions to start G6 he may not have noticed the Governor's setting as it may not at that time have been set on full open." It is difficult to understand this sentence. If a thorough check had been made the position of the Governor would have been known. The failing of Mr. Naidu was that he accepted in evidence he could have overlooked checking the Governor. It is that kind of breach of basic procedure which has the potential to lead to the kind of damage which was caused.

[42] The Tribunal stated "it appears ... that the real concern for the authority was the cost of repairing the damage to G6". The cost of that repair was considerable. Counsel for the authority accepted in argument that the cost of the damage in itself was not a factor. A perusal of the record and written submissions before the Tribunal shows that the Authority was certainly concerned about the cost of the damage caused but that in itself was not, for the Authority, the deciding factor:

[43] I do find that had the Tribunal taken into account all the relevant matters and omitted the irrelevant it would have come to different conclusion.

[44] Further, I am satisfied that had the Tribunal taken into account all relevant factors and omitted irrelevant ones and addressed its mind to the pertinent issues then no reasonable Tribunal could have come to the conclusion that Mr. Naidu should be reinstated. The Tribunal did address its mind to whether Mr. Naidu would "continue to have the trust and confidence of his employer," [page 15, para 6, line 2].

[45] It is difficult to see how the mutual trust and confidence which is so central to employee and employer relations could remain intact after such a catalogue of failures by Mr. Naidu, a very experienced worker. Mr. Naidu told a lie and forged a signature to obtain the removal of the PTW and thus start G6. He ignored a specific instruction not to start G6. He did not follow what were normal and for the most part day-to-day checks and procedures which were clearly laid out in the manuals. Mr. Mohammed. R. Ali, team leader Generation Thermal North (Station Manager) stated in evidence (page 15) "a blackout is not an emergency - workers panic and this has the appearance of an emergency".

[46] The reality is that procedure and safety manuals exist for the protection and safety of people and the prevention of damage to an employer's property. It is precisely in this context that the maintenance of mutual trust and confidence between employer and employee is based upon the observance by the latter of these procedures. Failure to do so, however well meaning, can and frequently does lead to death of and injury to people and damage to and destruction of property.

[47] The Tribunal stated "there was no material ... to suggest that the Grievor would not continue to have the trust and confidence of his employer. The Tribunal is satisfied that the Grievor would continue to be a harmonious and effective member of the Authority's team". It is not apparent on the face of the documents as to where the evidence is to support this conclusion. It is clear on the face of the documents that the Authority was putting forward the case that they had lost "trust and confidence" in this employee.

[48] The Tribunal did order Mr. Naidu's reinstatement from the date of his suspension but that he only be paid six months wages and the balance be deemed to be leave without pay. This was in recognition [page 16] of the fact that "the Grievor's actions in relation to the PTW cancellation have been found to be in contravention of the rules in the safety manual. His experience should have resulted in him conducting a thorough check of G6 before giving instructions for the engine to be started. At the very least such a check may even have enabled him to determine whether the governor was on full open at the time and may have averted the damage to G6". This is a brief recognition by the Tribunal of the reasons which form the basis of this judgment. However, the analysis thereof was too short and was directed towards questions of back pay and reinstatement when they should have been directed towards the essential issues set out in their terms of reference namely whether "the authority's decision to terminate Mr. Naidu is unfair, unreasonable and unjustified". The Tribunal, in its Decision also overlooked the fact Mr. Naidu had previously been disciplined for negligence which damaged a machine.

[49] I have carefully considered Mr. Naidu's years of service with FEA and the fact he will now be without a job at a time of life when it may be difficult to get another. He will probably have financial and family commitments. The Tribunal found he could be reinstated but penalised him with some loss of back pay. It must follow from my decision that the decision to terminate was not unfair, unreasonable or unjustified and that I can make no further award of money beyond what has already been paid by FEA.

[50] Accordingly I make the following orders,

(a) An order of certiorari removing the award of the respondent made on the 2^nd day of May 2006 into this court and quashing the same;

(b) A declaration that the award took into account irrelevant matters and omitted relevant matters and contained errors of law and was such that no reasonable Tribunal could come to that conclusion;

(c) A declaration that the termination of employment of the second interested party was justified and reasonable;

(d) I will hear the parties on costs.

(R.J. Coventry)
JUDGE