Clark Piokole v Rei Logona

• Jurisdiction: Papua New Guinea
• Judge: Kandakasi, J
• Judgment Date: 21 April 2017
• Citation: (2017) N6713
• Court: National Court
• Year: 2017
• Judgement Number: N6713

Full : OS No 6 of 2016; Clark Piokole and PNG National Airline Pilots Union and Airline Pilots Association v Rei Logona and Air Niugini Limited (2017) N6713

National Court: Kandakasi, J

Judgment Delivered: 21 April 2017

N6713

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

OS. NO. 6 of 2016

BETWEEN

CLARK PIOKOLE

First Plaintiff

AND

PNG NATIONAL AIRLINE PILOTS UNION

Second Plaintiff

AND

AIRLINE PILOTS ASSOCIATION

Third Plaintiff

BETWEEN

REI LOGONA

First Defendant

AND

AIR NIUGINI LIMITED

Second Defendant

Waigani: Kandakasi, J.

2017: 1st - 3rd February, 21stApril

CONTRACT LAW – Employment contract - Essential elements of a contract – Employer requiring employees to sign individual contracts to replace industry based agreements – Employer not meaningful involving the employees’ unions – No meaningful negotiation leading to clear offers and acceptances - No real and meaningful opportunity given to employees to seek legal advice before signing contracts - Effect of – Void and unenforceable contract.

EMPLOYMENT LAW – Employment under industry based agreement – Terms of – Agreement to continue to govern relationships between the parties until parties negotiate and mutually arrive at new agreement – Parties failing to do so – Employer producing individual employment contracts on terms less better than existing agreements – No input and free acceptance of the terms of the new contract by employees or their respective unions – Employees given no real and meaningful opportunity to seek legal advice and consider terms of contract before signing – Some employees refusing to sign new contracts while others signed under protest and pressure to avoid financial and other hardships – Effect of - New contract not legally binding and unenforceable – Existing contract continuing to run until all the parties enter into meaningful negotiations and mutually arrive at a new agreement.

INDUSTRIAL LAW – History and importance of trade union movements – An employee’s right to be a member of a union – Purpose of – Collective bargaining and collective agreement – Employers precluded from approaching employees who a members of a union individually and separately except only through their union - Correct way to legally depart from or terminate an industry based collective agreement – According to the terms of the existing agreements or by mutual agreement of the parties – Sections 47 and 48 (2) of the Constitution - Sections 63 of Industrial Organisations Act (Chp. 173) and Industrial Relations Act (Chp.174)

Papua New Guinea Cases cited:

Awesa v. PNG Power Limited (2016) N6359.

Fly River Provincial Government v. Pioneer Health Services Ltd (2003) SC705.

Hargy Oil Palm Ltd v. Ewasse Landowners Association Inc (2013) N5441.

John Manau v. Telikom (PNG) Ltd (2008) N3268.

KK Kingston Ltd v. Moere (2002) N2235.

Martin Kenehe v. Allan Jogioba (2008) N4025.

NCDC v. Yama Security Services Pty Ltd (2003) SC707;

NCD Commission v. Yama Security Services (2005) SC835.

Rage Augerea v. The Bank South Pacific Ltd (2007) SC869

Rimbink Pato v. Ruben Kaiulo, Electoral Commissioner of Papua New Guinea and Miki Kaeko & Ors (2003) N2455.

Spirit Haus Ltd v. Robert Marshall (2004) N2630.

Tian Chen Limited v. The Tower Limited (N0.2) (2003) N2319.

Taru v. Pacific MMI Insurance Ltd (2016) N6305.

Overseas Cases Cited:

Aviation and Marine Engineers Association Inc v. Air New Zealand Ltd [2013] NZEmpC 172.

Hillas (W.N.) and Co. Ltd v. Arcos Ltd (1932) 38 Com. Cas 23.

Hines v. Anchor Motor Freight, Inc., 424 U.S. 554, 571 (1976).

Investors Compensation Scheme Ltd v. West Bromwich Building Society [1998] 1 WLR 896 (HR).

Mariner”; Andrey Kharitnov & Ors v. United Trust Co of New York [1997] FCA 909.

Smith v. Evening News Association 371 US 195 (1962).

Silver Fern Farms Ltd v. New Zealand Meatworks and Related Trade Unions Inc. [2010] ERNZ 317.

Scammel & Nephew Ltd v. Ouston [1941] AC 25.

Silver Fern Farms Ltd v. New Zealand Meatworks and Related Trade Unions Inc. [2010] ERNZ 317.

Textile Workers Union v. Lincoln Mills 353 U.S. 448 (1957).

United Group Railway Services Limited v. Rail Corporation New South Wales [2 United Steelworkers v. American Mfg. Co., 363 U.S. 564,570 (1960).

United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 578 (1960).

United States Trust Co of New York v. Master & Crew of the Ship “Ionian 009] NSWCA 177.

Vector Gas Ltd v. Bay of Plenty Energy Ltd [2010] NZSC5.

Walford v. Miles [1992] 1 All ER 453.

York Air Conditioning and Refrigeration (Asia) Pty Ltd v. Commonwealth (1949) 80 CLR 11.Upper Hunter County District Council v. Australian Chilling and Freezing Co. Ltd (1968) 118 CLR 429.

Other Sources Cited:

Chitty on Contracts 24th edition at pages 700-701.

9 Halsbury’s Laws, 4th Edn, at para 297.

Fleming, The Law of Tort, 6th Edn, page 659.

J. Galbraith, American Capitalism: The Concept of Countervailing Power 115 (1956)

R. Gorman, Basic Text on Labor Law 296 (1976).

Cox, The Duty to Bargain in Good Faith, 71 HARV. L. REV. 1401, 1407 (1958).

Dunau, Employee Participation in the Grievance Aspect of Collective Bargaining, 50 Colum. L. Z. Rev. 731, 735 (1950).

Wellington, The Constitution, The Labor Union, and “Governmental Action,” 70 YALE L.J. 345, 364 (1961).

Cox, The Duty of Fair Representation, 2 VILL. L. Rnv. 151, 152 (1957);

Givens, Federal Protection of Employee Rights Within Trade Unions, 29 FORDHAM L. REV. 259, 273 (1960).

Shulman, Reason, Contract, and Law in Labor Relations, 68 HARV. L. REV. 999, 1002-04 (1955).

Summers, Judicial Review of Labor Arbitration or Alice Through the Looking Glass, 2 BUFALO L. REV. 1, 24 (1952).

Counsel:

M.Murray,O. Dekasand D. Siminji, for the Plaintiffs

I.Molloy and F.Matiabe, for the Defendants

21stApril, 2017

1. KANDAKASI J: Air Niugini Limited (the Airline), had two identical industry based agreements reached in 2012 (the 2012 Agreements) with the unions, the PNG National Airline Pilots Union (NAPU) and Airline Pilots Association (APA). Individual pilots who are members of the unions became parties to these agreements through each signing separate execution clauses with their own expiry dates. Before the agreements expired, the Airline sought and managed to have individual contracts which became known as 2015 Contracts signed by as late as 31st December 2014 by some pilots without any prior negotiation and mutual agreement of parties and to the exclusion of the unions. Of the pilots who signed, some claim they did so under duress or force because they were not given any choice but to sign the Contracts to avoid financial and other hardships. Other pilots like the plaintiff, Clark Piokole (Piokole) refused to sign the 2015 Contracts. The Plaintiffs argue that, the2012 Agreements remains current upon a reading together of their execution clauses and the 2012 Agreements until they are replaced by agreements that are properly negotiated and mutually arrived at. On the other hand, the Airline argues, the 2015 Contracts were freely accepted by the pilots and these contracts validly replaced the 2012 Agreements upon the latter’s expiry.

The Relevant Issues

2. Per a statement of agreed and disputed facts and issues for trial, the parties agreed that the following are the relevant issues:

(1) Whether the 2012 Agreements between Air Niugini Ltd and NAPU and APA expired on 31st December 2014 and as such was lawfully superseded by the individual 2015 Contracts?

(2) Whether the failure to sign the 2015 Contracts was an act of repudiation by the respective pilots?

(3) Whether the failure and or refusal by Air Niugini Ltd to employ the ‘Cadet Pilots’ by way of execution clauses under the 2012 Agreement for NAPU was discriminatory in employment practice.

3. At the trial, it became clearer that there are a number of other issues. These will be stated and dealt with as subsidiary issues to the first issue.

Expiration of 2012 Agreements and replacement by 2015 Contracts?

(i) What did the parties agree upon?

4. Turning firstly to the first main issue, I note there are two parts to the issue. The first is the question of, did the 2012 Agreements expiring on 31st December 2014. The second concerns the question of did the 2015 Contracts properly and legally superseded the 2012 Agreements on their expiry.

5. Clause 2.1 of the 2012 Agreement with NAPU and clause 2.3.1 of the 2012 Agreement with APA (the termination and replacement clauses) are relevant. These provisions read respectively as follows:

[Clause 2.1 of 2012 Agreement with NAPU]

“Subject to the conditions in Appendix B, this agreement supersedes all previous agreements and awards and shall operate from the 1st of January 2012 for a period of 3 years or until amended or superseded by mutual agreement of both parties. A new agreement should be negotiated in the six (6) months prior to the expiration of this agreement. Should this not occur before the expiration of this agreement, the provisions...