Housing Development Corporation v National Union of Government and Federated Workers; Housing Developmen Corporation v National Union of Government and Federated Workers

• Jurisdiction: Trinidad & Tobago
• Judge: Baker, C.,Ashby, M.
• Judgment Date: 05 May 2006
• Court: Industrial Relations Court (Trinidad and Tobago)
• Docket Number: Trade Dispute No. 24 of 2006
• Date: 05 May 2006

Industrial Court

Industrial Court

Baker, C.; Ashby, M.

Baker, V.P.; Ashby, M.

Trade Dispute No. 24 of 2006

Trade Dispute No. 24 of 2006

Housing Development Corporation

and

National Union of Government and Federated Workers

Housing Developmen Corporation

and

National Union of Government and Federated Workers

Appearances:

Mr. K. Garcia Attorney at Law for Party No. 1

Mr. A. Allen Director, Education and Research for Party No. 2

Appearances:

Mr. K. Garcia Attorney-at-Law for Party No. 1

Mr. A. Allen Director of Education and Research for Party No. 2

Employment Law - Trade dispute — Terms and conditions of voluntary retirement package — Exercise of option — Voluntarily retirement or compulsory retrenchment — Employer required to negotiate incentive payment to worker or their representative — Level of enhancement introduced as incentive for voluntary retirement — Proposal made was a business decision therefore rendering the court's jurisdiction limited — Court's intervention was not justifiable — Voluntary Retirement Plan could be offered to members of the bargaining unit — Housing and Development Corporation Act, s. 32(2).

Baker, C.

1 This trade dispute between the Housing Development Corporation (the Corporation) and the National Union of Government and Federated Workers (the Union) is brought at the suit of the Corporation and concerns the “breakdown in negotiations over the terms and conditions of a Voluntary Retirement Package (referred to herein also as “VSEP”) for Daily Rated employees”

2 Under the provisions of section 32(2) of the Trinidad and Tobago Housing Development Corporation Act 2005 (the Act) which came into force on 1st October 2005, a person who on the coming into force of the Act held a permanent appointment or for at least two years held a temporary appointment to an established position in the Authority, had a period of six months that is until 31st March 2006, to exercise the option:–

• (i) to retire voluntarily from the service of the Authority on terms and conditions agreed between him or the recognised majority union representing him and the Authority; or

• (ii) accept an offer of employment in the Corporation on terms and conditions no less favourable than those enjoyed by him in the Authority.

3 Hearing in this matter concluded on the 21st March 2006. In the circumstances we have decided to deliver our decision and our order with what we hope is sufficient indication of our reasoning therefore given the paucity of time remaining before 31st March 2006.

A full statement of our reasons will be delivered in the very near future.

4 The terms and conditions of the Corporation's offer of VSEP are contained at pages 2 and 3 of a Draft Memorandum of Agreement which is attached to the Corporation's Evidence and Arguments filed in Court on the 17th day of February 2006 and marked ‘C’ under the heading “Option to Retire Voluntarily”.

5 The Union's initial proposals are contained in a letter of 3rd June 2004 from its President General to the Executive Director of the predecessor to the Corporation, the National Housing Authority.

They are also set out in its written Evidence and Arguments filed in Court on the 6th March 2006 and were further elaborated upon in the oral evidence of its sole witness Mr. Christopher Streete.

6 We have carefully considered the oral and documentary evidence tendered by the parties and their respective arguments.

Essentially in this dispute the Corporation is urging the Court that its proposals are reasonable and should be endorsed by the Court in preference to the Union's proposals to be put to the workers in the bargaining unit for their acceptance or rejection. The Union of course urges the opposite. The crux of the dispute is the quantum of the applicable benefits.

7 The concept of VSEP and similar plans is a recent appearance on the Trinidad and Tobago industrial relations jurisprudential landscape. The Court has given judgment on VSEP and related matters and has declared applicable principles in about a dozen proceedings from about 1990 to the present day.

8 Common to these proceedings is that the plans were floated by employers against a background either of contemplated retrenchment, (usually reserving the employer's right to approve or reject applications to suit the needs of his business). or of goinq out of business (the plan being meant in both instances to ‘cushion the blow’ of premature termination of employment).

In this dispute the parties' evidence discloses no such background, quite the contrary.

9 The principles applicable to VSEP plans, distilled from the Court's deliberations are summarized in the following passages from the judgment of H.H President Khan in TD 125/1999 OWTU v. BP dated 20th December 2000. In explaining the difference between voluntary separation and compulsory retrenchment the learned President stated (at pages 7–8):–

“As its name implies, a voluntary separation is entirely voluntary in character. A worker elects whether or not to leave his employment on acceptable terms offered by his employer.

Any termination of his employment is, therefore consensual and not forced. The employer induces the worker to leave his employment prematurely by offering a payment that is not based on any particular formula but which is attractive enough to persuade the employee to resign or retire from his employment before his normal age of retirement.

Under normal circumstances, a worker legitimately expects to retain his employment until his normal date of retirement. The Industrial Relations Act Chap.88:01 (the Act) protects a worker from being dismissed harshly and oppressively or not in accordance with the principles of good industrial relations practice. Of course there is always the possibility that his employment may become surplus to his employer's requirements and liable to be compulsorily retrenched, in which case he would be entitled by law to receive compensation for his past service by way of severance benefits.

Since workers are generally employed for indefinite periods of time and their employment can only be terminated on the grounds of redundancy or for reasons related to their capacity or conduct, requiring them to terminate their employment prematurely by volunteering for separation can only be consensual….

To require a worker to leave his employment prematurely constitutes altering his existing terms and conditions of employment which permits him to remain in the employer's employment until he retires, is compulsorily retrenched or is dismissed for a reason or reasons which do not violate the provisions of the Act. It is because of the entirely voluntary nature of such a programme that the employer is required to negotiate the incentive payment with the worker, or where the worker is included in a bargaining unit in respect of which there is a recognised majority union, with the recognised majority union concerned. There is no special law that deals with voluntary separation and payments made under such an arrangement receive no tax considerations under the present income tax law.

It is a special CONSENSUAL ARRANGEMENT made between employer and worker or between an employer and a recognised majority trade union on behalf of workers in an appropriate bargaining unit and UNLESS THE WORKER IS TREATED UNFAIRLY OR UNJUSTLY OR THE EMPLOYER VIOLATES SOME IMPORTANT PRINCIPLE OF GOOD INDUSTRIAL RELATIONS PRACTICE, THE ARRANGEMENTS WILL NORMALLY BE ACCEPTABLE.” (Emphasis added).

10 Where, however, as in this case the parties are unable to agree on the terms of the VSEP there is a breakdown in negotiations and the resultant dispute may be reported in the manner provided for in the Industrial Relations Act Chap.88:01 (the IRA) to be heard and determined by the Court and an award made.

11 The Court in TD 92/04 between Trinidad and Tobago Senior Staff Association v. National Broadcasting Network Ltd., (Gafoor, V.P, HH Ashby and HH Gualbance) examined the difficulty faced in making an appropriate order in a VSEP case by reference to the Court's usual approach to making awards in ‘interests’ disputes, (a VSEP dispute being of that genus).

12 That approach was summarized in TD 20/78 TIWU v. Sproston's (Trinidad) Ltd. Dated 9th November 1978 (HH Bramble and Johnson):–

“that such a provision [as was sought to be introduced into a collective agreement] is found in some collective agreements is not enough for us to impose it on parties; we could do so if it is a generally accepted principle in that it could be found in the vast majority of collective agreements or, perhaps, that it is a peculiar feature of any particular industry”

13 The Court in TD 92/04 stated:–

“Typically therefore in such disputes the Court does not substitute its own judgment for that of the parties when it determines what provision should be included in a collective agreement in the absence of agreement between the parties. SUCH AWARDS ARE MADE ON THE BASIS OF THE ACTUAL PRACTICE OF THE PARTIES TO COLLECTIVE BARGAINING AS EVIDENCED BY THE CONTENT OF COLLECTIVE AGREEMENTS

When the Court is able to determine that a norm has been established it has even been prepared in appropriate cases and by reference to such norms to make awards altering existing provisions freely negotiated by parties to interests disputes

A DISTINGUISHING FEATURE OF THE NORMS BY WHICH THE COURT IS GUIDED IS THAT THEY ARE ASCERTAINABLE FROM OBJECTIVE EVIDENCE IN THE FORM OF PROVISIONS WHICH HAVE BEEN INCLUDED IN REGISTERED COLLECTIVE AGREEMENTS AS A RESULT OF THE ACTUAL PRACTICE OF EMPLOYERS AND TRADE UNIONS”

14 The Court contrasted this scenario with a VSEP offer which it opined was: “driven largely on the employer's side by subjective considerations…(his) assessment and judgment as to what additional cost he elects to incur in order to achieve by voluntary separation…a desired level of reduction in the number of...