Michael Blackburn Appellant v Liat (1974) Ltd Respondent
| Jurisdiction | Antigua and Barbuda |
| Judge | Edwards J.A [Ag.] |
| Judgment Date | 16 September 2008 |
| Judgment citation (vLex) | [2008] ECSC J0916-10 |
| Date | 16 September 2008 |
| Docket Number | HCVAP 2004/031 |
| Court | Court of Appeal (Antigua and Barbuda) |
IN THE COURT OF APPEAL
The Hon. Mr. Justice Hugh A. Rawlins Justice of Appeal
The Hon. Mde. Justice Ola Mae Edwards Justice of Appeal [Ag]
The Hon. Mr. Errol Thomas Justice of Appeal [Ag]
HCVAP 2004/031
Dr. Francis Alexis and Mr. Dwight Horsford for the Appellant
Ms. Eleanor Clarke Solomon for the Respondent
Civil Appeal — Employment Law — Contract Law — collective agreement — express and implied terms — remuneration on transfer from Barbados — payment in currency other than Barbados dollars — whether unilateral reduction of salary — section J4 of the Antigua and Barbuda Labour Code Cap.27
The appellant, an aircraft pilot of the rank of captain, was employed since 1978 by the respondent, a regional Caribbean airline (LIAT) with head office at the international airport in Antigua. The terms of the contract of employment between the parties are contained in the collective agreement periodically negotiated between the respondent and the Leeward Islands Airline Pilots Association (LIALPA), of which the appellant is a member. The appellant was, from 1979, based in Barbados and paid a salary of approximately BD$120,000.00. The respondent closed its Barbados base in 1994 and involuntarily transferred the appellant to Antigua where he was paid an annual salary of approximately EC$120,000.00 which valued 35% less than BD$120,000.00. The salary for all pilots was expressed in Eastern Caribbean currency under the collective agreement. However a memorandum of agreement in the form of a side letter signed by LIAT and LIALPA in May 1990, acknowledged the continuation of a longstanding prior arrangement for Barbados based pilots to be paid their contractual net salary in Barbados dollars while their Antigua based peers received theirs in EC dollars. This practice originated at a time when both currencies were pegged to the pound sterling with the same par value; but an anomaly developed when each currency became pegged to the US dollar causing a currency value differential. The appellant alleged that LIAT had unilaterally reduced his salary by 35% in breach of his contract of employment. The respondent contended that the appellant was aware that his transfer and consequent salary adjustment was in accordance with the collective agreement then in force and LIAT's well-known practice of having differential remuneration packages founded on where a pilot was based. The learned trial judge upheld LIAT's contention and dismissed the appellant's claim. The appellant appealed against this decision.
Held: dismissing the appeal with costs of $15,000.00 in the court below and $10,000.00 as the costs of appeal to the respondent:
(1) As a general rule, an employer's unilateral reduction of an employee's remuneration would constitute a breach of contract. However, where alterations of status or duties disadvantageous to an employee are made in a manner that is permissible under the contract of employment, the employer will not be found to be in breach.
Nobrega v Attorney-General of Guyana (1967) 10 WIR 187, Worthington v Robinson (1896) 75 LT 446 and Faithhorne v The Territory of Papua (1938) 60 CLR 772 applied. Hill v Peter Gorman Ltd. (1957) 9 DLR (2d) 131 considered.
(2) The appellant's involuntary transfer to Antigua with the consequent alterations in his financial status although disadvantageous to him was made in a manner that was permissible under the collective agreement and was in keeping with the well-known practice of which the appellant was aware. The appellant had no vested contractual right under the terms of that agreement to receive a salary based on the remuneration package for pilots in Barbados after he was transferred to Antigua. There was therefore no basis for interfering with the learned trial judge's findings.
Keith Robertson v LIAT (1974) Limited Civil Suit No. ANUHCV 1997/0401 distinguished.
(3) A term will only be implied in a contract if it is necessary to do so. The term sought to be implied by the appellant, that he should be paid in Antigua the Eastern Caribbean dollar equivalent of the unit sum of the Barbados dollars that he was paid in Barbados, was not a necessary term which was reasonable and went without saying under the terms of the collective agreement. The respondent could not reasonably have intended this term to form part of their employment agreement without expressly so providing for it would be inconsistent with the terms of the existing collective agreement and in breach of section J4 of the Labour Code. Accordingly, the learned trial judge was correct in holding that such a term could not reasonably have been implied.
Nova Scotia v Emile Elias & Co. Ltd. (1995) 46 WIR 33 and Reda v Flag Ltd. (2002) 61 WIR 118 applied. The Moorcock (1889) LR 14 PD 64 considered.
The appellant is an aircraft pilot who holds the rank of captain. He has been employed by the respondent LIAT (1974) Limited ("LIAT") since the 4th July 1978. LIAT is a regional Caribbean airline registered in Antigua and Barbuda. LIAT's headquarters is at the V.C. Bird International Airport in Antigua. Between 1974 and 1994 LIAT had a base in Barbados which it closed in November 1994. The Barbados base was subsequently re-opened years later. The employment relationship between the appellant and LIAT is governed by the current collective agreement existing at any given time, negotiated by the Leeward Island Airline Pilots Association (LIALPA) of which the appellant is a member.
By his amended claim filed on the 24th October 2003, the appellant alleged that LIAT breached his employment contract by unilaterally reducing his salary by 35% when LIAT transferred him in November 1994 from the LIAT base in Barbados where he had been stationed since April 1978, to its Antigua base against his wish; and under protest, varied his annual remuneration from $120,000 in Barbados currency depending upon the hours flown, to EC$120,000 when the exchange rate between the two currencies was Barbados $1.00 to EC$1.35. The appellant claimed EC$439,812.60 for partial arrears of salary, general damages and costs.
LIAT'S defence was that the appellant's transfer was in accordance with the collective agreement then in force negotiated by the LIALPA; that the salary of the appellant was expressed in EC dollars in this agreement; that there existed the well known arrangement of paying Barbados based pilots their salary quoted in the agreement in Barbados currency, while the Antigua based pilots received their quoted salary in Eastern Caribbean currency. LIAT denied breaching the agreement or being liable for any loss or damage to the appellant.
The learned trial judge Ferdinand J [Ag] dismissed the appellant's claim on the 28th July 2004. In his judgment Ferdinand J [Ag] rejected the appellant's pleaded contention that the contract of employment was subject to an implied term that "in the event of any transfer of the Claimant …from Barbados to Antigua, …[LIAT] would pay to the Claimant the Eastern Caribbean currency equivalent of his salary previously enjoyed up to October 31st 1994." 1 The learned judge found that there was no justification for the appellant to be paid more than his peers in Antigua. He held that LIAT had a right to transfer its pilots between its bases; that there was a well settled practice of LIAT having differential remuneration packages founded on where a pilot is based; that the appellant was aware of the salary changes which occurred whenever a transfer occurred; and that the appellant's knowledge of these things ought reasonably to have influenced his lifestyle and financial commitments in Barbados during the 15 years he was stationed there.
The appellant's notice of appeal filed on the 21st September, 2004 indicates that paragraphs 12, 19, 30 and 31 of the judgment of Ferdinand J [Ag] must be subjected to scrutiny. Five of the 10 grounds of appeal challenge the abovementioned conclusions of the trial judge. The other 5 grounds posit what the trial judge ought to have found in law in favour of the appellant's claim. Many of these grounds overlap. Before considering these grounds the other facts relevant to the appeal must be set out.
The collective agreement which governed the relationship between the parties at the material time was executed by 2 representatives for LIAT and 2 representatives for LIALPA and was dated 14th June 1990. Section 1 Article 8 of this agreement discloses that LIALPA is registered as a trade union under the Antigua and Barbuda Labour Code Cap 27 ("the Code"). 2 Section 1 Article 3 states that:
"This Agreement shall apply to all Pilots in the service of the Company and the provisions of the Agreement shall supersede any existing arrangements or agreements, whether written, implied or in common practice, between the Company and the Pilots employed in the service of the Company."
Section 1 Article 8 also states that the provisions of the agreement are binding
upon LIALPA while Article 10 declares that LIAT and LIALPA will not violate the provisions of the agreement.
The law governing collective agreements is the Code. Section C7 states that:
"It shall be lawful for an employer and employee to enter into an individual contract of employment, covering terms of employment, but — (iii) any provision thereof which, to the employee's disadvantage, conflicts with the terms of a collective bargaining agreement in effect between the employer and a trade union which is the sole bargaining agent of the bargaining unit of which the employee is a part, within the definition of section J4, shall be null and void."
Section J4 of the Code provides that a registered trade union designated or selected for such purposes by a majority of the employees in a unit appropriate for...
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