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Hatimoana v Solomon Islands Electricity Authority [2011] SBTDP 1; UDF 79 of 2004 (15 February 2011)

IN THE TRADE DISPUTES PANEL OF SOLOMON ISLANDS

Case No: UDF 79 of 2004

IN THE MATTER of the Unfair Dismissal Act 1982
AND IN THE MATTER of a complaint of Unfair Dismissal

BETWEEN:

JOHNLEY HATIMOANA
Complainant

AND:

SOLOMON ISLANDS ELECTRICITY AUTHORITY
Respondent

Hearing: 15th June 2010, Honiara.
Decision: 15th February, 2011.
Panel: Wickly Faga Deputy Chairman
Duddley Hoala Employee Member
Walter H. Rhein Employer Member
Appearances: Complainant in person
Barnabas Upwe, counsel for the Respondent

FINDING

The Complainant was made redundant on the 12th November 2004. He filed his complaint of unfair dismissal with the Panel Secretary on the 20th December 2004. The grounds of his application, as amended are; 1, that the redundancy was not genuine as his post was not abolished, and 2, that the notice of redundancy was not proper as it was contrary to section 21 of the Employment Act, Cap 72.

The Respondent admitted that it dismissed the Complainant but denied unfairness on the grounds that; (1), according to section 4(2) of the Unfair Dismissal Act, Cap77, any dismissal by way of redundancy is not unfair dismissal; (2) the procedure or manner in which the Respondent carried out the redundancy exercise had fully complied with section 21 (1) and (2) of the Employment Act, Cap72, and (3) the Complainant's dismissal was not related to the trade dispute issue that is before the Panel. No amendmment was made by the Respondent in response to the Complainant's amended TDP1.

This matter had for one or other reasons dragged on from 2004 until now. After several unsuccessful attempts by both parties to settle the matter out of court, the matter was referred back to the Panel for arbitration. Both parties agreed to provide evidence by way of sworn statements, and the Panel was to make its finding on the evidence so provided.

The Respondent sought to rely on the sworn statements of the Respondent's former General Manager, Mr. Michael Nation, and former Minister responsible for Minerals, Mines and Energy, who was also the Board Chairman then, Mr. Danny Bula, in support of its case, while the Complainant relied on his sworn statement in support of his case.

Mr. Nation deposed to the fact that the Respondent's Board sanctioned a redundancy exercise in 2002 following a government policy directive. The then Kemakeza led government formulated a re-structuring policy to be implemented by all state owned enterprises (SOE). This was aimed at making the SOEs more efficient, effective and sustainable in their operations. The said policy was conveyed to the Respondent's Board on the 5th April 2002. A copy of minutes of that meeting was exhibited as "MLN1" in the sworn statement of Mr. Nation. The implementation of the said policy was delayed to enable analysis and planning and availability of finance. It was also during the same period that law and order situation was at its lowest following the ethnic crisis. According to Mr. Nation, the finances of the Respondent improved in 2004 compared to 2002. It then started implementing the redundancy exercise towards the end of 2004. Towards the end of August 2004, a notice of intention to effect redundancy was issued to the Commissioner of Labour in compliance with section 21 of the Employment Act [cap72]. A copy of the said notice dated 26th/8/04 was exhibited as "MLN5" in the sworn statement of Mr. Nation.

On the 17th September 2004, the then Board Chairman Mr. Danny Bula, issued a notice to all staff advising of the priority policies and strategies to be executed by the Board and Management of the Respondent. One of the strategies was Organizational restructuring and employee rationalization. In this respect, some employees would have to be made redundant. In the process of effecting the redundancy exercise, the Respondent decided to make consultations generally rather than individually for fear of any repraisal by employees identified beforehand for redundancy.

On the 26th September 2004, then General Manager, Mr. Nation issued a notice to all staff informing that due to cash flow situation faced by the Respondent, the redundancy exercise would be carried out in stages. Staff affected by the redundancy exercise would be informed accordingly when funds permit. In the said letter, Mr. Nation clarified the staff misconceptions regarding redundancy and continual recruitment. In his explaination, Mr. Nation stated that "...redundancy is about getting rid of surplus positions for the purpose of cost cutting, while recruitment is about fulfilling in required positions for the purpose of satisfying the manpower needs of the organisation."

By letter from Mr. Nation dated 12 October 2004 ( which was later corrected as 12th November 2004), the Complainant was informed that his position as Personal Officer has been abolished from the structure and hence his services with the Respondent were no longer required, and that his employment with the Respondent was by then terminated. A redundancy package of nineteen thousand, seven hundred and fourty four dollars, sixty six cents ($19, 744.66) was raised and paid to the Complainant on the same date.

Mr. Bula and Mr. Naezon deposed to similar facts in their sworn statements.

In its submission, the Respondent stated that the Complainant was dismissed because of redundancy, and by virtue of section 4(2) of the Unfair Dismissal Act, cap 77, his dismissal was not unfair. It was further stated in the Respodnent's submission that there is overwhelming evidence of an approved redundancy exercise by the Respondent in 2002. However, due to financial contraints experienced during and shortly after the ethnic tension in the country, the redundancy exercise was delayed until 2004. The redundancy exercise would affect the Complainant's position and others that would no longer be required, or are expected to diminish. Therefore, only electricians and fitters were recruited as they were crucial to the operation of the Respondent. It was also submitted that the Respondent had fully complied with section 21 of the Employment Act when it issued a notice of its intention to carry out the redundancy exercise. The Complainant was informed on the 12th November that he was being made redundant under the redundancy exercise. He was then paid his redundancy package. Considering the stated facts against the legal requirements in section 4(2) of the Unfair Dismissal Act, as read with section 4(1)(b)(i)and (ii) of the Employment Act and section 21 (1)(2) of the Employment Act, the Respondent had fully complied with all the legal requirements. Thus the Complainant was dismissed by way of redundancy, and is not entitled to any compensation. Therefore, the matter must be dismissed.

The Complainant acknowledged that a meeting was held between the Respondent's Board members and the Minister for Energy, Mines and Minerals on the 5th of April 2004. He however questioned what he thought was another meeting held on the same date, and whether the meetings took place concurrently. He further stated that the restructuring strategy undertaken by the Respondent's Board was not genuine. This was evident in the way it took three years before it was actually implemented. He also stated that redundancy was not seriously considered except for the retirement exercise which has been effective in 2002 and a subsequent recruitment excercse that was undertaken in 2003 and 2004. The Complainant also stated in his sworn statement that he was not made aware of any list of names for redundancy prior to his annual leave in mid September 2004. He was only informed in a letter dated 12 November 2004.

In his other evidence, the Complainant stated that there was no list of employees intended for redundancy being supplied to the Commissioner of Labour.

The Complainant submitted that the redundancy exercise that was carried out in 2004 was not genuine. The fact that a recruitment exercise was ongoing at the time of redundancy defeats the true meaning of redundancy. According to the Complainant, redundancy can be interpreted as "work no longer exists therefore, redundancy can be effected." It was therefore submitted that the redundancy exercise does not fulfill section 21(1-4) of the Employment Act. It was further submitted that the notice required under section 21 of the Employment Act failed to include names of employees identified for redundancy. The complainant stated that the said notice should have been served on him personally. It was therefore submitted that the Complainant's dismissal without proper redundancy procedures amounts to unfair dismissal.

In determining whether the Complainant's dismissal was fair or unfair, the Panel must first look at the relevant legislative provisions relating to dismissal because of redundancy. Section 4(2) of the Unfair Dismissal Act Cap 77 states that-

"An employee who is dismissed is not unfairly dismissed, if he is dismissed because of redundancy.

Section 4(1) of the Employment Act cap 72 defined "dismissal because of redundancy" as

(a) (i)...

(ii)...

(b) the fact that the requirements of the business-

(i) for employees to carry out work of a particular kind, or

(ii) for employees to carry out work of a particular kind in the place where the employee was so employed,

have ceased or diminished or are expected to cease or diminish.

The question then is whether the Complainant was dismissed because of redundancy, and if it was, whether it was a genuine redundancy excercise. The Respondent gave sufficient notice about the redundancy exercise, before effecting redundancy. The letter by the then Chairman of the Board, Mr. Danny Bula, dated 17th/9/04 and exhibited as "MLN 4" in the sworn statement of Mr. Michael Leonard Nation, informed all staff of priority areas that the Board and Management need to pursue, such as-

"Formulate a restructuring policy and vigorously pursue a restructuring strategic program that would result in efficiency, effectiveness and sustainability of the Authority. One of the major components of the restructuring strategy is:

Organizational restructuring and employee rationalization

...pertinent to employee rationalization, an assessment and analysis is to be undertaken on job discriptions and human resources to ensure professional trained and experienced staff are retained whilst non performing staff or positions surplus to requirements are to be made redundant immediately."

The Respondent further clarified to all staff the redundancy exercise it was about to execute, in an internal memorandum dated 24/09/04, by the then General Manager, Mr. Michael Nation. He explained that-

"in response to staff misconceptions regarding redundancy and the continual recruitment exercise currently underway, you are advised to note that as per SIEA Chairman's notice, redundancy is about getting rid of surplus positions for the purpose of cost cutting, while recruitment is about fulfilling in required positions for the purpose of satisfying manpower needs of the organisation."

By letter dated 12th November 2004, the Complainant was informed that his position as Personal Officer had been abolished as a result of the new organizational structure, and as a measure to reduce operational costs. In effect, his employment with the Respondent was by then terminated. A redundancy pay package of nineteen thousand seven hundred and fifty four dollars was raised and paid to the Complainant. All these evidences are explicit, that the Complainant was dismissed because of redundancy.

The crucial question then is whether the redundancy exercise was genuine or not. The Complainant, in his sworn statement, stated that he was told by a reliable source that his post was not abolished, but upgraded to Senior Personal and Training Officer with a substantial salary increase. This is hearsay, and the Panel gives little weight to this piece of evidence. But even if was true that the job still existed, there must be shown that a need does exist for him to perform that particular job. The Panel had after weighing evidence, is satisfied that the job that the Complainant was employed to do no longer exist, thus his redundancy. This, in the Panels view, is a genuine redundancy situation. The Complainant had on the other failed to provide any evidence to the satisfaction of the Panel, nor provide any asisstance to the Panel on the legal basis of his argument that his redundancy was not genuine. Therefore, his first ground of complaint must be dismissed.

The Complainant also claimed that the notice of redundancy was not proper as it was contrary to section 21 of the Employment Act. He argued that the notice to notify the Commissioner of Labour of the intented redundancy must mention names of individuals earmarked for redundancy, and not any general notice. Section 21 of the said act stated that-

(1) An employer who at anytime after the end of the period of 28 twenty-eight days that begins with the date on which this section comes into force intends to dismiss an employee because of redundancy shall give notice of its intention to the Commissioner of Labour before the beginning of the period of twenty-eight days that ends with the date of dismissal.

(2) An employer who at anytime after the end of the period of 28 twenty-eight days that begins with the date on which this section comes into force intends to dismiss an employee because of redundancy shall give notice of the dismissal to the Commissioner of Labour before the beginning of the period of twenty-eight days that ends with the date of dismissal.

While the Panel sees the inclusion of names in any notice made pursuant to section 21 of the Employment Act, as a matter of good practice and administrative convinience, there was no specific requirement by the said Act to do so. The Panel is satisfied that the Respondent had provided sufficient notice of its intended redundancy exercise to the Commisioner of Labour. Having been satisfied that the Respondent had complied with the provisions of section 21 of the Employment Act, the Complainant's second ground of this application that his being made redundant was without proper propcedures, must also be dismissed.

The Complainant had not made out its case, that his dismissal was not genuine, and that the redundancy exercise was not proper. Accordingly the complaint is hereby dismissed.

There is a right of appeal within 14 days on points of law only.

Dated the 15th of February 2011

On behalf of the Panel

Wickly Faga
DEPUTY CHAIRMAN/TDP