IN THE EMPLOYMENT RELATIONS COURT
AT SUVA
ORIGINAL JURISDICTION

CASE NUMBER: ERCC 12 of 2013

BETWEEN:

TANOA PLAZA HOTEL

AND

TANOA INTERNATIONAL HOTEL
Applicants

AND:

NATIONAL UNION OF HOSPITALITY CATERING AND TOURISM INDUSTRIES
Respondent

Appearances : Ms. R.S.S. Devan for the Applicants.
Mr. S. Yalayala (Trade Union Rep.) for the Respondent.
Date/Place of Judgment : Monday 25 January 2016 at Suva.
Coram : Hon. Madam Justice A. Wati.

JUDGMENT

Catchwords:
Employment Law – Contract challenged on grounds that it was entered into through misrepresentation – whether originating summons proper in the circumstances to establish misrepresentation on the balance of probability.

Cause and Background

1.	The applicants, through an originating summons of 4 October 2013, seek the relief that the agreement between Tanoa Plaza Hotel/Tanoa International Hotel ("Hotels") and the Union dated 12 December 2011 be declared null and void on the ground that the Union had acted arbitrarily, unreasonably and in bad faith in getting the said agreement executed by the hotels and for a further order declaring that the applicants are not obliged to pay its workers new intake rate prescribed in the said agreement.

2.	The agreement of 12 December 2011, which is sought to be nullified, contains the new rates of pay for all workers being the union members working in specific areas.

3.	This action was prompted by the Union's letter to the Hotels on 24 May 2013 in which it wrote and complained that the Hotels did not honour the agreement 12 December 2011 which contained the agreement for wages increase and the base rate. By that letter, the Union required that those who had not been paid according to the agreement be paid retrospectively. 

Employer's Evidence and Submissions

4.	The hotels claim in essence is that the agreement of 12 December 2011 was signed by both the parties. On behalf of the hotel, one Naveen Lakshmaiya ("NL") being the General Manager Human Resources had signed the agreement. 

5.	It is alleged that the agreement was only signed by NL after integral facts were misrepresented to him by the Union. NL was told by the Union that the rates for the new intakes or recruits had been increased when in fact since 2004 it had not been.

6.	It was alleged that the hotels are members of the Fiji Hotel and Tourism Industries ("FHTA"). Tanoa Plaza Hotel has been the member of FHTA since 12 October 2010 and Tanoa International Hotel has been a member of FHTA since 1965. By virtue of its membership, the FHTA had always acted as its representative in dealing with Union.

7.	If FHTA always represents the hotels, why would the hotels enter into the subject agreements sought to be nullified without reference to FHTA? This indicates bad faith on part of the Union and it shows that the Union acted arbitrarily in getting the 12 December 2011 agreement executed.

8.	Before the agreement of 12 December 2011, negotiations on the Log of Claims were done by FHTA on behalf of the hotels. There was a successful negotiation between FHTA and the Union in 2004 resulting in an agreement between them of 4 November 2004. What is significant from that agreement is that it was agreed between the parties that the "intake rates as indicated in Appendix A of the Collective Agreement shall be effective as at 01 January 2004 and shall remain for a period of three years until reviewed and or superseded by other Agreements or Arbitration Awards".

9.	The intake rates remained unchanged until the Wages Regulation [Hotel and Catering Trades] Order 2006, 2011 and 2012 ("WRO") came in force. The new rates as per the WRO were applied to all new recruits and new intakes.

10.	Then in 2005, the hotels signed another memorandum of agreement with the Union. This agreement only covered annual wage increments for those workers entitled to receive increment. It did not apply to new intakes.

11.	In March 2011, the FHTA on behalf of the hotels, signed an agreement with the Union for increase in annual wages for certain workers.

12.	None of the agreements of 2005 and 2011 affects the new recruits. To them either the 2004 agreement or the WRO applies.

13.	The intake rates for the new recruits were never renegotiated by FHTA and the Union. If the 12 December 2011 agreement was to be renegotiated then it would be negotiated by FHTA as the applicants have always been represented by FHTA. All previous agreements were signed by the Group General Manager of the hotels. The subject agreement was signed by NL only because he was being misled.

14.	The hotel further contends that the Union through its affidavit has not provided any documentary evidence to establish that the hotel had entered into the agreement of 12 December 2011. The Union has not even opposed in its affidavit the allegation that the hotel was misled into signing the agreement.

15.	It was further asserted by the hotel that the Union has not provided any documentary evidence to suggest that the agreement applied to new intakes as well. It will be unfair to pay the new workers the same rate as the old ones who have been working in the hotel for ages.

Union's Position

16.	The Union's position is that the hotels are bound by the agreements they have signed. There is no basis on which the agreements can be nullified.

17.	The Union states that the Hotels have been directly negotiating with the Union although it was a member of FHTA. This is evidenced by an agreement between Tanoa International Hotel and the Union of 10 November 2005. A copy of the signed agreement was attached to the affidavit.

18.	The Union did not enter into any agreements with FHTA after 2007 for new intake rates. The agreements were directly made with the hotels in 2005 which agreement covered the adjustments until 2007 for the new intakes.

Law and Analysis

19.	There is no dispute that I have the jurisdiction to hear this matter under s. 220 (1) of the ERP to hear and determine this matter. Specifically, I derive the jurisdiction under s. 220(1) (g), (h), and (i) of the ERP to hear the cause before the Court.

20.	The applicant's first ground to seek to nullify the 12 December 2011 agreement between the parties is on the basis that the Union had misrepresented certain facts to the employer. It is alleged that NL who signed the agreement was misled into believing that the rates for the new intakes or recruits had been revised and increased whereas only the annual wages had been increased for certain workers in 2005 and 2011.

21.	I find it very strange that the hotel is raising that one of its employees had been misled but there are no particulars of who in the union misled the employee, what was said during the negotiation and the signing of agreement, and what the employee signing the document did before undertaking the task to verify the position. It is also very strange that the employee who alleges to have been misled has not even deposed an affidavit to the effect that he was misled and facts were misrepresented to him.

22.	An allegation like misrepresentation, unless admitted by the other party, cannot be established on affidavits. It has to be established on the oral evidence that there were misrepresentation of facts and that the employee who alleges to have been misrepresented could not make or carry out his investigations to verify the matters.

23.	The hotels ought to have had copies of all the agreements. Why did NL have to depend on the representation of the Union, if there was any to sign the agreement? Why could not he verify from the people in charge what the true position was? All these have not been addressed in the affidavit of the hotels to any extent.

24.	There is no admission by the Union in its affidavit that the Union misrepresented the facts. It asserts in its affidavit that the hotel was involved in the negotiation which gave rise to the agreement challenged.

25.	On the balance of probability I am not satisfied that the hotels have established misrepresentation by the Union. Ms. Devan says that the Union has to prove that the hotel entered into the negotiation about the new intake rates. There is a signed agreement which prima facie speaks for itself. The hotels do not challenge that the agreements have been signed. The hotels are seeking to impeach the said agreement on the grounds of misrepresentation so the onus is on the hotel to establish the same on the balance of probability.

26.	The employer has to prove that if the Union misrepresented the facts which were not true. The employer alleges that the Union had misrepresented that the intake rates had been increased in 2005 and 2011 when these agreements were specifically in regards the annual wage increase. There is nothing in the two agreements based on which it can safely concluded that the wages increase in 2005 and 2011 was only for certain employees and not the new recruits. For the Court to make a conclusive finding on this aspect, there has to be oral evidence of what transpired in the meeting, who all attended the same and what the agreement was that was reached between the parties. 

27.	The agreement of 2011 signed on 30 March 2011 states that in the event the parties bound by the agreement cannot reach an understanding on the proposed change, the matter will be referred to FIHTA IR Committee to assist with deliberation to reach an amicable solution. This clause has provided the parties to resolve the issue of whom the agreement applies to go before the Committee. The parties ought to have then attempted to reach an amicable solution but since the hotels have chosen to file the proceeding in this Court, a conclusive finding on the balance of probability cannot be made that the agreement only applies to annual wage increase for certain workers. Both the agreements do not exclude new recruits. At least the second one in 2011 specifically states that it applies across the board: Clause 1.

28.	Since I am not satisfied that the agreement of 2005 and 2011 excluded the new intakes, the thrust of the hotels case that the facts were misrepresented has not been established through its affidavit.

29.	The Union does state in its affidavit that the new intake rates were never renegotiated with the FHTA after 2007. Does this mean that the Union accepts that the March 2011 agreement between FHTA and the Union did not include new intakes? I cannot make that finding from the agreement itself but even if that is an admission, the Union contends that the agreement of 2005 does include new intakes. On that basis there is denial that even if NL was told that the rates for intakes have increased, the facts were inaccurately presented. That cuts through the claim for misrepresentation. The Court therefore at least has to hear and test the evidence of whether the 2005 agreement excluded the new intakes. A finding of fact has to be made because there is substantial dispute of fact.

30.	The hotels also claim that FHTA used to negotiate on behalf of the hotels and since the 12 December 2011 agreement is not negotiated by it, it is evidence enough that the hotels had not agreed to the terms of the subject agreement. I do not find that the court can make any finding in favour of the hotels on this argument. Although the hotels are members of FHTA, this does not preclude the hotels from negotiating directly with the Union and if it does so, the agreement cannot be invalidated on that ground. There is also substantial dispute as to whether there was any negotiation which gave rise to the agreement challenged. This issue cannot be established on the affidavit as well.

31.	Further, Tanoa International Hotel had entered into an agreement with the Union on 10 November 2005 despite being a member of FHTA. On the face of the agreements, it shows that there were direct negotiations between the hotels and the Union. The March 2011 agreement was signed by FHTA when the 2005 agreements were signed by the hotels. That raises queries on whether the FHTA was always in the forefront of negotiations as alleged. Full investigation of facts need to be made in this regard if weight were to be given to the argument that since the agreement of 12 December 2011 was signed by the hotels, it was done arbitrarily by the Union and through bad faith on its part.

32.	In the final analysis, I do not find that the hotels have established on the balance of probability that the agreement dated 12 December 2011 was entered into through misrepresentation and that it is bad in law and of no legal effect. I therefore refuse to impeach the said agreement to any extent.

Final Orders

33.	The reliefs prayed for in the originating summons are declined. I will hear the parties on whether the originating summons can and should be converted into a writ action where evidence could properly be adduced to make findings of fact or that an opportunity be given to the parties to adduce oral evidence on the originating summons.

34.	I will fix this matter for call over on 11 February 2016 at 12.00pm to fix a date for the parties to make their submissions.

35.	The Union shall have costs of the proceedings in the sum of $1,500 to be paid with 21 days.

Anjala Wati
Judge
25.01.2016

To:
1.	Ms. R. S. S. D for the Applicants.
2.	Mr. S. Yalayala for the Respondent.
3.	File: Suva ERCC 12 of 2013.