Cable & Wireless (W.I.) Ltd Appellant/Employer v Conrad Tonge et Al, represented by The Antigua and Barbuda Workers' Union Respondents/Employees

• Jurisdiction: Antigua and Barbuda
• Judge: HARIPRASHAD-CHARLES, J.A. [AG.],EDWARDS, J.A [AG.]
• Judgment Date: 23 March 2009
• Judgment citation (vLex): [2009] ECSC J0323-1,[2009] ECSC (ATG) J0323-1
• Docket Number: HCVAP 2007/010
• Court: Court of Appeal (Antigua and Barbuda)
• Date: 23 March 2009

[2009] ECSC J0323-1

IN THE COURT OF APPEAL

Before:

The Hon. Mde. Ola Mae Edwards Justice of Appeal [Ag.]

The Hon. Mde. Indra Hariprashad-Charles Justice of Appeal [Ag.]

The Hon. Mde. Janice George-Creque Justice of Appeal [Ag.]

HCVAP 2007/010

Between:

Cable & Wireless (W.I.) Limited

Appellant/Employer

and

Conrad Tonge Et Al, represented by The Antigua and Barbuda Workers' Union

Respondents/Employees

Appearances:

Ms. E. Ann Henry for the Appellant/Employer

Mr. Charlesworth Brown for the Respondents/Employees

Civil Appeal — Industrial dispute — redundancy — severance pay — computation of severance pay — tenure of employment — from what date shall severance payments be paid — whether a miscarriage of justice has occurred —

The appellant (an international communications company) re-structured and declared several of its employees redundant entitling them to severance pay. No specific formula for the computation of severance pay where an employee was made redundant existed in the Collective Agreement, but there was provision that a severance pay agreement should be the subject of negotiations between the Company and the Union. After negotiations broke down on 1 ^st January 2001, the appellant unilaterally computed and paid the redundant employees severance pay calculated at the rate of 4 weeks pay for each year of service from the date on which their respective employment was terminated. The respondents (some of the redundant employees) brought an industrial action against the appellant. The Court in its ruling categorized the respondents into 5 groups according to their years of service and made different awards to each category at rates ranging from 5 ¹/₂ weeks pay for each year of service for persons with 30 plus years to 12 days pay for persons with one year's service. The Court also ruled that the severance pay should be paid out from the date negotiations broke down on 1 ^st January 2001. The appellant seeks to set aside this decision in its entirety.

Held: affirming the decision of the Industrial Court but setting aside the order that all severance payments shall be paid from 1 ^st January 2001 and substituting that the employees are entitled to severance pay simultaneously upon termination of their employment in accordance with the Labour Code of Antigua and Barbuda, (Edwards, JA dissenting).

• 1. Having referred to section 10(3) of the Industrial Court Act, it must be inferred that the Industrial Court was guided by the principles of fairness and good conscience and considered the issues of appropriateness, reasonableness, fairness and adequacy in coming to its conclusion.

• 2. The Court cannot be criticised for the approach it took when it relied, to a large extent, on the prevailing practice of other similar business entities with respect to the quantum of the severance pay.

• 3. Upon examining the evidence and taking into consideration the purpose of section 10(3) of the Industrial Court Act, the decision of the Court to award a higher rate of severance pay for those with more years of service and a lower rate of severance pay for those with shorter years of service seemed fair and was not outside of the general ambit of reason such as to warrant interference by this Court.

• 4. In this present appeal I do not consider that any substantial miscarriage of justice has occurred to substitute my discretion for that of the trial Court.

  Sundry Workers of Antigua Port Authority v Antigua Port Authority Civil Appeal No. 8 of 2001 – judgment delivered on 28 January 2003 [unreported] cited.

HARIPRASHAD-CHARLES, J.A. [AG.]

1 In or about 2001, Cable and Wireless, an international communications company, decided to re-structure and as a result, declared several of its employees ("the Employees") redundant, thereby entitling them to severance pay. The tenure of employment of the Employees ranged from 5 to 40 years and the terms and conditions of their employment are largely set out in the Collective Agreement dated 28 ^th February 1994. However, the computation of severance pay in the event of redundancy was not expressly provided for in the Collective Agreement. Article 16 of the Collective Agreement merely states that "Severance pay terms shall be the subject of negotiations between the Company and the Union."

2 Negotiations between Cable & Wireless and the Antigua and Barbuda Workers Union representing the Employees ("the Union") for a rate of severance payment for the Employees lasted over six months but eventually broke down as of 1 ^st January 2001. On or about 26 ^th September 2001, Cable and Wireless unilaterally paid the Employees an amount of severance calculated at the rate of 4 weeks pay for each year of service, irrespective of the employee's status or number of years of service from the date on which their respective employment was terminated. 1

3 The Employees contended that, given their respective years of service, their job classifications and the industry norm both within and outside of Antigua and Barbuda, their severance payments were unreasonable and inadequate and accordingly, wrongful. They wanted severance pay to be computed at the rate of 6 weeks pay for each year of service. Although they accepted that the severance payments made were calculated in excess of the minimum amount laid down in the Labour Code 2 , they did not agree with Cable & Wireless' contention that the severance pay was made in accordance with the practice over the last five years. Their view was that the severance payments were not fair compared to the severance payments made in other similar business entities within and outside of Antigua and Barbuda which include LIAT (1974) Ltd, Barclays Bank PLC, BWIA, Bank of Nova Scotia and Antigua Commercial Bank.

4 The Employees further contended that they are entitled to severance payments from 1 ^st January 2001, when the negotiations between Cable & Wireless and the Union broke down rather than from the date on which their respective employment was terminated.

5 As a result, they brought an action in the Industrial Court against Cable and Wireless. 3

The Judgment of the Industrial Court

6 The Industrial Court ("the Court") decided largely in favour of the Employees. At paragraph [22] of the judgment, the Court ruled that severance pay should be calculated based on the number of years served by each Employee at the rate of:

• (a) Persons with 30 years of service or more shall be paid 5 1/2 weeks pay for each year of service.

• (b) Persons with 20 years of service or more but less than 30 years shall be paid 5 weeks pay for each year of service.

• (c) Persons with 10 years of service or more but less than 20 years shall be paid 4 1/2 weeks pay for each year of service.

• (d) Persons with less than 10 years of service but more than 1 year shall be paid 4 weeks pay for each year of service.

• (e) Persons with 1 year of service shall be paid 12 days severance.

7 The Court also ruled that the above payments shall be effective from the date when the negotiations between Cable & Wireless and the Union broke down, i.e. from 1 ^st January 2001. In coming to its decision, the Court declared that it "is not laying down an irrevocable and final rate for computation of severance but simply making a rule for resolution of the present deadlock, the parties being free to negotiate new terms if so desirous." 4

The law

8 The Antigua and Barbuda Labour Code makes provision for the minimum amount of severance pay to which an employee is entitled.

Section C.40 provides that:

"Every employee whose terms of employment with an employer and his predecessors has in aggregate exceeded one year is entitled to

severance pay upon termination of said employment by employer for reasons of redundancy."

Section C.41 states that:

"Severance pay shall consist of at least one day's pay, at the employee's latest basic wage, for each month or major fraction thereof of his term of employment with his employer and any predecessor employer."

9 Since the Labour Code only stipulates the minimum requirement for the amount of severance pay to which an employee is entitled, the Industrial Court is then faced with the task of determining the rate of severance pay which should be awarded in accordance with the Industrial Court Act 5 ("the Act"). Section 10(3) of the Act states as follows:

"Notwithstanding anything in this Act or in any other rule of law to the contrary, the Court in the exercise of its powers shall—

• (a) make such order or award in relation to a dispute before it as it considers fair and just, having regard to the interests of the persons immediately concerned and the community as a whole;

• (b) act in accordance with equity, good conscience and the substantial merits of the case before it, having regard to the principles and practices of good industrial relations and in particular, the Antigua and Barbuda Labour Code."

10 Concisely, Section 10(3) requires the Court, as a matter of policy, to be guided in its deliberations by considerations of good conscience and fairness.

The appeal

11 Cable & Wireless appeals the judgment of the Court delivered on 26 ^th February 2007, in Reference No. 20 of 2002. It seeks, by way of relief, an order that the judgment be set aside in its entirety and that the Reference be dismissed. Cable & Wireless advances five grounds of appeal 6 which essentially raise three separate issues for determination. Grounds 1 and 2 will be dealt with separately while Grounds 3, 4 and 5 are capable of being subsumed into one ground.

12 Ground 1 states that the Court misdirected itself as to the issues before it in Reference No. 20 of 2002.

13 Learned counsel for Cable & Wireless, Ms. Henry, submitted that having properly identified the issues in paragraph [10] of the judgment, the Court made no attempt to address these issues but simply repeated the submissions of both counsel without offering any opinion on...