Bahamas Utilities Service and Allied Workers Union v Water and Sewerage Corporation

• Jurisdiction: Bahamas
• Court: Industrial Court (Bahamas)
• Judgment Date: 17 April 2002
• Docket Number: No.39 of 1999

In the matter of the Industrial Relations Act

Bahamas Utilities Service and Allied Workers Union

First Applicant

Water and Sewerage Management Union

Second Applicant

and

Water and Sewerage Corporation

Respondent

No.39 of 1999

INDUSTRIAL TRIBUNAL

NASSAU

Counsel for the Applicants — Obie Ferguson Jr. Esq.

Counsel for the Respondent — Mrs. Raquel Williams {Office of the Attorney General}

DECISION AND REASONS

The Facts:

1 By an undated Originating Application filed herein and received by the Tribunal on March 28, 2000, the Applicants allege as follows:

• i. That the Respondent purported to unilaterally alter an Industrial Agreement dated July 1, 1995, between the First Applicant of the one part and the Respondent of the other;

• ii. That the Respondent purported to unilaterally alter an Industrial Agreement dated July 1, 1995, between the Second Applicant of the one part and the Respondent of the other;

• iii. That contrary to law the Respondent communicated directly with employees represented by the Applicants;

• iv. That the Respondent had acted in violation of the said Industrial Agreements;

• v. That the Respondent had acted in breach of article 32.21 of the said Industrial Agreement between the First Applicant and the Respondent;

• vi. That the Respondent had acted in breach of article 54 of the said Industrial Agreement between the Second Applicant and the Respondent.

2 By Defence dated June 20, 2000, the Respondent denies the allegations contained in the Applicants' Originating Application, (and avers {inter alia} that overpayments were erroneously made to certain pensioners represented by the Applicants due to a mistake in the method of calculation by the Respondent.

3 In the circumstances the Respondent further avers that its communication of the said mistake to the said pensioners was appropriate and lawful.

4 Further to the Applicants' Brief herein and purportedly pursuant to a request by the Tribunal, counsel for the Applicants submitted a Brief dated April 17, 2001, but only in respect of the First Applicant's case.

5 In response to a request by the Tribunal for Further and Better Particulars, the Applicants allege as follows:

• i. That pursuant to the provisions of the said Industrial Agreements, it was agreed, “that pensionable employees would be paid their pension based on their actual years of service.”

• ii. That the imposition of 33 1/3 years as the ceiling for pensionable service is contrary to law and the provisions of both of the said Industrial Agreements.

• iii. That communication to the said pensioners by the Respondent by letter dated August 26, 1998, was an attempt by the Respondent to unilaterally vary the provisions of the said Industrial Agreements.

• iv. That the said communication to the pensioners was in further contravention of the law in general inasmuch as the Respondent ought to have communicated directly with the Applicants qua exclusive bargaining agents for the said pensioners — Paulette Smith et. al. v. Bahamas Hotel Catering and Allied Workers Union et. el. No.11 of 1986 {Court of Appeal, Civil Side}.

• v. That such communication is envisaged in the context of joint discussions and negotiations pursuant to the provisions of the said Industrial Agreements.

6 In response to a request for Further and Better Particulars to its Defence, the Respondent averred as follows:

“The Respondent provides a pension plan for its employees with Imperial Life which came into effect on November 1, 1980.

The error/overpayment in calculating the relevant pensioners lawful and proper pension entitlements arose because the pensions were calculated without regard to the two-thirds maximum pension ceiling contained in the pension plan. The separation settlement forms which were then being used failed to state the two-thirds maximum ceiling…”

7 The two-thirds maximum ceiling was arrived at using the multiplicand of 2% as prescribed on page 3 of the said Plan which is actuarially/algebraically computed as follows:

2/100 X N X S = 2/3 S {N = number of years; S = final salary}.

Therefore N = 100/2 X 1/S X 2/3 X S/1 = 33 1/3 years.

8 Hence the formula for computation of monthly pension benefits with respect to those pensioners exceeding 33 1/3 years of service:

1/12 X 2% X 2/3 annual salary $______ X completed months of pensionable service.

9 Counsel for the Applicants argued that at all material times the relevant pensioners received monthly pension payments based upon their actual years of service using the following formula:

10 In the circumstances by effluxion of time, the said pensioners came to rely upon the said formula as the determinant for their pension entitlements pursuant to the said Industrial Agreements.

11 The Respondent in altering the said formula purported to unilaterally vary the said Industrial Agreements contrary to law.

12 Counsel submitted that prior to commencing employment with the Respondent, the relevant pensioners were civil servants, and their pension was determined by their actual years of service.

13 He said that the imposition of 33 1/3 years as a ceiling for pensionable service was therefore contrary to article 32.04 of the Industrial Agreement between the First Applicant and the Respondent which provides:

“ Enjoyment of Better Conditions

Any employee already enjoying better conditions, established formally {sic} by management in writing, than those established by the agreement shall continue to enjoy such better conditions in accordance with the communication from management establishing such better conditions.”

14 Counsel for the Applicants further argued that in-asmuch as the purported change in formula for computing pension entitlements constituted a unilateral variation of the said Industrial Agreements, the Industrial Tribunal had no more than persuasive jurisdiction to request the parties “to sit down in a mature way” as contemplated by the provisions of the said Industrial Agreements, to negotiate and enter into amendments thereto pursuant to Section 52 of the Industrial Relations Act, Chapter 296.

15 Counsel for the Respondent submitted that the Respondent did not purport to unilaterally vary the Industrial Agreements in the manner alleged or at all; on the contrary, the Respondent purported to apply the provisions thereof relative to the Pension Plan which had been at all material times inadvertently and incorrectly administered.

16 In the circumstances counsel maintained that the Tribunal has jurisdiction in this matter, and requested that we make a determination as to whether the said Pension Plan effective November 1, 1980, was lawfully incorporated into the said Industrial Agreements.

17 Mrs. Joan Tumquest, Senior Manager of Human Resources of the Respondent testified that she was employed in that capacity since 198 6. She was responsible for the Personnel Department, and that responsibility included payroll administration, pension administration, the granting of leave and hiring pursuant to the policies and procedures of the Respondent.

18 She testified that one year prior to a pensioner's mandatory retirement {at age 60}, the Personnel Department would initiate a letter signed by the General Manager of the Respondent, advising the prospective pensioner of the mandatory retirement age, and the documentation required to be executed in order to activate his/her pension benefits.

19 Employees who were transferred from the Ministry of Works in July of 1977 are asked to complete an affidavit deposing as to their tenure of employment with the Ministry of Works, and in some cases they are required to state their dates of birth.

20 Simultaneously her Department would write to the Department of Public Personnel, and request its confirmation that the said employees were indeed employed during the period as sworn in their affidavits; and they would also request confirmation as to the quantum of Government's contribution to the employees' pension benefit.

21 Mrs. Turnquest further testified that about one month prior to their retirement, they would meet with the prospective pensioners and advise them of their benefits.

22 A standard form would be given to them outlining their benefits. The original form was designed by Mr. Peter Wiggins, a former Controller of the Respondent.

23 Mrs. Turnquest explained that Mrs. Emily Rahming, a subsequent Controller, later discovered an error in the original form, viz., that it did not account for the maximum pension benefit which is equivalent to two-thirds of the pensioners' final earnings actuarially/algebraically computed to be payable to the pensioners upon having completed 33 1/3 years of service with the Respondent.

24 Lastly, Mrs. Turnquest testified that she was instructed to correct and re-issue the standard form indicating the said two-thirds maximum pension benefits. She produced to the Tribunal an example of the said defective form and an example of the corrected form which are now exhibited herewith respectively, and marked, “Exhibit W&SC1” and “Exhibit W&SC2”. She said further that there were nine {9} pensioners affected by the re-calculation at the time of the commencement of the dispute herein, and she produced a chart inter alia showing the incorrect calculation based upon actual years of service and the correct calculation based upon 2/3 of their final salary upon having exceeded 33 1/3 years of service with the Respondent. The said chart is now produced herewith and marked, “Exhibit W&SC3”.

25 Finally, Mrs. Turnquest produced a chart illustrating and listing pensioners and their respective entitlements as of April, 2002. The said chart is now produced herewith and marked, “Exhibit W&S4”.

Decision:

26 First of all we note that the purported said Industrial Agreements do not satisfy the requirements of section 4 6 of the Industrial Relations Act, Chapter 296 {“the Act”}, inasmuch as neither contains provisions for...