The Public Services Association v The Water and Sewerage Authority the National Union of Government and Federated Workers v The Water and Sewerage Authority

• Jurisdiction: Trinidad & Tobago
• Judge: Riley-Haynes, C.
• Judgment Date: 20 June 1991
• Court: Industrial Court (Trinidad and Tobago)
• Docket Number: 7 and 11 of 1987
• Date: 20 June 1991

Industrial Court

Riley-Haynes, C.;

Ashby, M.

7 and 11 of 1987

The Public Services Association

and

The Water and Sewerage Authority the National Union of Government

Federated Workers

and

The Water and Sewerage Authority

Appearances:

Mr. D. Mendes attorney-at-law for party no. 1 The P.S.A.

Mr. R. Guisseppi Negotiator for party no. 1 The N.U.G.F.W.

Mr. V. Applewhite attorney-at-law for party no. 2 the W.A.S.A.

Industrial law - Contract of service — Breach — Alleged unilateral breaches by Authority regarding provision for payment of cost of living allowance and merit increases — Claims for reinstatement of payment — Whether ministerial direction validated breach — Jurisdiction of court — Whether case one of judicial review of administrative action and within purview of High Court — Whether trade dispute — Effect of waiver of initial breaches of contract — Finding that minister's directive ultra vires — Award of damages.

Statute - Interpretation — Industrial Relations Act, section 7 — Definition of trade dispute — Section 16(1) — Provision for determination of interpretation matters — Section 43 — Collective agreement to contain provision for settling disputes.

Statute - Water and Sewerage Authority Act, section 26(1) — Provision for covering operating expenses — Whether directive of Minister to dishonour contractual obligations in respect of operating expenses in breach of section and therefore ultra vires.

Riley-Haynes, C.

1 These disputes are between the Water and Sewerage Authority (‘the Authority’) and the recognised majority unions representing workers in its employ, the Public Services Association (‘the Association’) representing monthly paid workers and the National Union of Government and Federated Workers (‘the Union’) representing hourly, daily and weekly rated workers. The disputes concern the failure on the part of the Authority to pay to workers cost of living allowances in full or in part from February 1987 and January 1987 respectively to date and in the case of monthly paid workers additionally failure to pay merit increases to workers entitled thereto. The Association and the Union seek girders of the court to reinstate the payment of cost of living allowances and in respect of the Association additionally the reinstatement of the payment of merit increases, from the date of termination thereof to the date of judgment with such interest as the court considers just. The disputes were by order of the court on 15th November 1990 consolidated.

2 With respect to monthly paid employees, the Association alleges that there was no registered collective agreement at any material time between the Association and the Authority but at all material times it was a term and condition of employment of the said workers that they be paid a monthly cost of living allowance and that they be paid merit increases, both in accordance with the provisions of the Statutory Authorities Service Commission Regulations which are applied mutatis mutandis in the Authority. From February 1987 and continuing, the Authority unilaterally ceased to pay to the said workers cost of living allowances in full or in part and merit increases, but the workers have continued reporting for duty and performing their jobs. The Authority's position is that no collective agreement in respect of the said workers loving been concluded between the Authority and the Association, the Authority applies to the said workers terms and conditions of employment which are in force for holders of equivalent posts in the public service as supplemented by agreements between the said parties on certain specific items. By section 10 of the Water and Sewerage Authority Act, the Authority in the exercise of its functions is enjoined to comply with any general and specific directives which may be given by the Minister of Settlements and Public Utilities, he being the Minister within the meaning of section 2 of the W.A.S.A. Act. In February 1987 the said Minister issued to the Authority circular No. 5 dated 10th February 1987 directing the Authority that:- “effective from the month of February 1st 1987, the payment of cost of living allowance (COLA) and merit increases to the employees of the Authority should be suspended until further notice.”

3 By further notice of May 1987 by circular No. 10 dated May 17th 1987 and circular No. 15 dated June 29th 1987 the Authority was directed to resume payments of cent of living allowance at certain reduced rates to certain workers in stipulated salary ranges as per the schedule attached to the said circular No. 15 of 1987 dated June 29th 1987, such payments to be retroactive to 1st February 1987. Me Authority complied with the Minister's directives and as such:–

• “1) its actions are lawful and valid

• 2) Any obligation of the Authority to the Association and or the employees in the bargaining unit are subordinate to the provisions of the Act including the duty of the Authority stipulated by section 10 thereof.

Effectively, this Trade Dispute requires this Honourable Court to pronounce on the legality and or validity of the said directions of the Minister, which matters are not within its jurisdiction.

If the pmt of cost of living allowance and merit increases/increments after 1st February 1987 constituted a term and condition or terms and conditions of Employment of the said workers it or they is or are not enforceable by this Honourable Court in the circumstances of the case.”

4 With respect to hourly, daily and weekly rated employees, the Union alleges that in January 1987, the Authority unilaterally ceased payment of cost of living allowance, a term of employment of each and every worker in the bargaining unit which it represents. The Authority submits that by collective agreement dated 30th June 1982 and registered in the court, the Authority and the Union agreed to the terms and conditions of employment applicable to the said workers for the period January 1st 1981 to December 31st 1983. There has been no subsequent collective agreement between the parties and after December 31st 1983, the workers were paid a cost of living allowance up to 23rd January 1987 when it ceased pursuant to a directive from the Minister of Works, Settlements and Infrastructure dated 29th January 1987. By direction of the Minister of Finance and the Economy dated 19th May 1987, the Authority was directed to pay to certain stipulated classes of employees with effect from 1st February 1987, an adjusted cost of living allowance calculated in accordance with a formula prescribed therein. The Authority complied with the Ministerial directions and contends:

“That by virtue of section 10 of the Act the Authority was and is obliged to comply with the respective aforesaid ministerial directions and that its actions taken in that behalf are lawful and valid.

That if payment of cost of living allowance after 1st January 1984 was a term or condition of employment of the said workers the said term or condition is not enforceable by this Honourable Court in the circumstances of the case.”

5 Learned attorney for the Association alleged that it is canceled by the Authority that payment of cost of diving allowance and merit increases ore terms of employment of the workers and that the Authority ceased to honour these terms wholly or in part from February 1987 to date, without the agreement of the workers or the Association, the recognised majority union. The Association by letter protested the breach and the workers continued to perform their obligations under their contracts of employment. This he submitted is clearly a breech of the contracts of employment of the workers in the bargaining unit which the Association represents and the Association is accordingly claiming restoration of the terms and an under for payment of arrears due from the date of breach to the date of the order. The relief claimed he submitted is the relief that is granted by a common law court when workers' contracts of employment are altered unilaterally to their detriment. He referred to the following cases to support his submission.

• 1. Burdett Coutts and Another v. Hertfordshire County Council [1984] I.R.L.R. 91.

The plaintiffs, dinner ladies were given formal notice of reduction in pay. The Union made it clear to the employers that they were not prepared to accept the new terms. The plaintiffs continued to work and instituted proceedings for beach of contract. It was held that the notice to the dinner ladies of changes to their conditions of service which involved a reduction in pay amounted to a fundamental breach of contract having the effect of repudiating the contracts. The plaintiffs were entitled to a declaration of relief and damages, in the form of arrears of wages.

• 2. Rigby v. Foredo Ltd. [1987] I.R.L.R. 516.

The employer unilaterally promulgated new wage rates, thereby reducing the way of inter alia Mr. Rigby. Mr. Rigby continued to work and instituted proceedings for damages. It was held that the unilateral reduction in wages constituted a repudiatory breach of contract but that there could be no termination of the contract without the employee's acceptance of the breach as a repudiation and the fact that the employee continued to work could not be construed to be an implied acceptance an his part of the employer's repudiation.

Further it is doubtful whether in law unilateral notice of a reduction in wages can as a principle be construed as the giving of the necessary notice required under the contract to terminate the employment. In any event in the instant case, the facts did net evidence such as intention on the part of the employers who were concerned to retain their employees. Consequently the damages awarded to Mr. Rigby for breach of contract were not limited to the shortfall occasioned by the breach multiplied by the period of notice required by his contract of employment for...