Kentucky Fried Chicken (bermuda) Ltd v Minister of Economy, Trade & Industry et Al

• Jurisdiction: Bermuda
• Judgment Date: 22 March 2013
• Date: 22 March 2013
• Docket Number: Civil Jurisdiction 2012 No 188
• Court: Supreme Court (Bermuda)

2013 Bda LR 19

In The Supreme Court of Bermuda

Civil Jurisdiction 2012 No 188

In the matter of Order 53 of the Rules of the Supreme Court

And in the matter of a Decision by the Minister of Economy, Trade and Industry made on or about 3 May 2012

Between:

Kentucky Fried Chicken (Bermuda) Limited

Applicant

and

The Minister of Economy, Trade & Industry

and

The Bermuda Industrial Union

Respondents

Mr J Pachai and Mr P Sanderson for the Applicant

Mr C Rothwell for the 1^st Respondent

Mr D Duncan and Mr K Masters for the 2^nd Respondent

The following cases were referred to in the judgment:

Ford Motor Company v Amalgamated Union of Engineering and Foundry WorkersUNK [1969] 2 All ER 481

Robertson and Jackson v British Gas CorporationUNK [1983] IRLR 302

Kaur v MG Rover Group LtdUNK [2005] IRLR 40

Alexander et al v Standard Telephones and CablesUNK [1990] IRLR 55

Gascol Conversions Ltd v JW MercerUNK [1974] IRLR 155

Pink Beach Ltd v Minister of Labour and Home AffairsBDLR [1993] Bda LR 33

NWL v WoodsWLR [1979] 3 WLR 674

Pink Beach Ltd v Minister of Labour and Home AffairsBDLR [1993] Bda LR 21

Bermuda Forwarders Ltd v Bermuda Industrial UnionBDLR [1992] Bda LR 73

Secretary of State for the Home Department v Immigration Appeal TribunalUNK [2001] EWHC Admin 261

Bermuda Cablevision Ltd v GreenBDLR [2004] Bda LR 18

Davies v Financial Services AgencyUNK [2003] EWCA Civ 1128

Observer Publications Ltd v Matthew [2001] 4 PRC 288

Campbell-Rodrigues v Attorney GeneralUNK [2008] 4 LRC 526

AG for Gambia v Jobe [19984] AC 689

Chas Wolff Packing Co v Court of Industrial Relations of South Kansas (1923) USSC 161

Grape Bay Ltd v Attorney GeneralUNK [2002] 1 LRC 167

Judicial review — Jurisdiction of the Employment Tribunal — Scope of dispute — Minister's reference — Bias of member of the Tribunal

JUDGMENT of Kawaley CJ

Introductory

1. By Notice of Application dated May 23, 2012, KFC applied for leave to seek judicial review of the Minister's May 3, 2012 decision to refer KFC's dispute with the BIU to binding adjudication under the Trade Disputes Act 1992 (‘the Act’). The application was based on one broad legal complaint: the reference was unlawful because the dispute about whether or not the parties' 2008–2011 Collective Bargaining Agreement (‘the CBA’) was still in force did not constitute a ‘dispute’ covered by the Act. This complaint appeared to be based on, inter alia, the following premises:

• i. that a dispute about the CBA's terms was wholly distinct from a dispute about terms and conditions of the relevant employees' contracts; and

• ii. that once the CBA (which did not include transitional provisions keeping it alive pending the negotiation of a new agreement) terminated, any employment terms derived from it also lapsed entitling KFC to negotiate new contracts directly with its unionized employees and organize its affairs unconstrained by the requirements of the lapsed CBA.

2. On May 25, 2012, without a hearing, I granted leave furnishing the following summary reasons for so doing:

‘It is arguable that that no “labour dispute’ as defined by section 2 of the Labour Disputes Act 1992 exists by virtue of the lapse of the Collective Agreement and the absence of any ‘bridging provisions’ keeping it alive after its expiry pending the negotiation of a fresh agreement.

I do not ignore the fact that this Court some 20 years ago in the Bermuda Forwarders Ltd case rejected a somewhat different technical construction of the same statutory definition. The application raises arguable grounds on a point which appears to have considerable general public importance and to have not previously been considered by the Bermudian courts.

For these reasons I have granted leave and see no reason why the usual stay of proceedings should not be granted.’

3. KFC issued its Notice of Motion on May 29, 2012. Initial directions for the filing of evidence were ordered on June 14, 2012. Evidence was filed and the hearing was fixed for October 15, 2012. The hearing was adjourned because on October 11, 2012, KFC was granted leave to amend its grounds for seeking judicial review by adding the following additional complaints:

• i. firstly, the original main ground was refined to clarify to make it clear that while it was conceded a dispute about terms and conditions of employment could constitute a ‘labour dispute’ for the purposes of the Act, it was nevertheless alleged that the issue of whether or not the CBA was still binding on the parties did not constitute a referable dispute;

• ii. secondly, it was alleged that the reference to the Labour Disputes Tribunal (‘the Tribunal’) interfered with the Applicant's constitutional rights under section 6(8) and 13 of the Bermuda Constitution by depriving KFC of (i) its right to have its contractual rights determined by a court and (ii) by depriving KFC of its contractual and economic right to freely negotiate its own contracts;

• iii. thirdly, it was alleged that the appointment of George Baisden as a member of the Tribunal was unlawful because of apparent bias.

4. KFC's position shifted significantly by the time the application was effectively heard as regards what was initially the centrepiece of the application. It was effectively conceded that certain terms and conditions had been incorporated into the employees' contracts of employment from the CBA and continued in force as contractual terms and conditions independently of the CBA. Issue was joined with the BIU as to which terms were and which terms were not so incorporated. This made its attack on the Minister's reference as a whole seem far more technical than it initially appeared to be when I initially granted leave, even then somewhat guardedly, on May 25, 2012.

5. Somewhat artificially, the BIU's counsel suggested that the issue of whether the CBA had been validly terminated was an issue in dispute. It is difficult to see on what basis it might be argued that KFC had not validly terminated the CBA and why this matters if, as is now agreed, the incorporated terms and conditions live on in the employment contracts. However it would be wrong for me to decide this matter either as the point was not fully argued and there might well be implications arising from it which I simply do not understand. Moreover, this is clearly an issue the Tribunal is competent to determine in any event.

6. Nevertheless, the points in issue and, more broadly, the question of how this Court's jurisdiction to supervise the Tribunal ought to be exercised were all novel points arising in relation to a distinctive local statutory context which had only once been considered directly by the Bermudian courts before. In addition, these legal issues were raised somewhat atypically by an employer seeking to avoid compulsory statutory arbitration on the grounds that the Tribunal's potential ability to rewrite existing contracts of employments impermissibly interfered with its property rights.

7. Brief mention must be made of a related Writ action, Civil Jurisdiction 2012: No 212, Bermuda Industrial Union et al v Kentucky Fried Chicken (Bermuda) Limited et al which has been essentially on hold after the exchange of pleadings (‘the Writ Action’). The BIU and certain employees in that action sought various declarations including a declaration that the purported change of employer effected by the reorganization was a breach of section 31 of the Employment Act. On June 7, 2012 in the Writ Action following an ex parte on notice hearing, I granted an interim injunction which had the practical effect of “holding the ring” until the Tribunal proceedings were concluded or the Minister's reference to it was quashed. Formally, however, the injunction was granted pending the determination of questions in the Writ action which potentially overlapped with the issues referred to the Tribunal to the extent that they appeared to form part of the same dispute broadly viewed.

8. I refused an application by the BIU on the eve of the substantive hearing of the present application to have this Court determine the legality under section 31 of the Employment Act of KFC's reorganization as it impacted on the relevant contracts of employment. The reason for that decision was partly to avoid a second adjournment of the present application to enable KFC to prepare to meet the new argument. The application was primarily refused because it seemed to me to be fundamentally incompatible with the public law character of the present judicial review proceedings. Consistently with that pre-hearing approach, I have refrained from deciding for the purposes of the present application the principal contractual or private law issue which all counsel addressed, namely which provisions in the CBA were incorporated into the employees' contracts of employment. Those matters fall outside the proper scope of a judicial review enquiry. I have adopted a similar approach to the apparent bias complaint which, in the first instance at least, is more appropriately dealt with by the Tribunal itself.

9. Although I accept that the position was initially far from clear, turning as it does on distinctive local legislation which has received limited attention from the local courts, it is ultimately clear (for the reasons further elaborated below) that the application to quash (in whole or in part) the Minister's reference of KFC's dispute with the BIU to the Tribunal must be refused. When the scheme of the Act is carefully construed, it is ultimately clear that that the concept of ‘labour dispute’ is to be broadly defined and that the policy judgment of the Minister in making a reference is not to be subjected to technical legal scrutiny save in exceptional cases, such as where the dispute has already been decided or settled.

10. Nor is the Minister empowered to constrain the Tribunal's statutory autonomy by detailed terms of reference. All that the...