The Court of Appeal has upheld a ruling by Chief Justice Ian Kawaley that unions acted “unlawfully” in January 2015 by taking industrial action against furlough days.

The Bermuda Industrial Union, the Bermuda Public Service Union and the Bermuda Union of Teachers had appealed against two declarations made by Mr Justice Kawaley in January 2016, in which he said the unions had acted contrary to labour legislation.

But in a judgment passed down yesterday, the three appeal judges dismissed the unions’ appeals and supported the Chief Justice’s decision to grant the declarations to the Minister of Home Affairs.

“Essentially, for the reasons given by the Chief Justice, I would dismiss the appeal against the grant of declarations,” Sir Scott Baker said in the judgment.

“Once the respondent [Minister of Home Affairs] gave notice declaring a labour dispute, the case was taken out of the realms of contract law and into the Bermuda labour legislation as it appears in the Labour Disputes Act 1992 and the Labour Relations Act 1975.

“The unions as named in the declarations acted unlawfully in the case of essential services pursuant to section 9 of the 1975 Act and more generally pursuant to section 19 of the 1992 Act.

“The Chief Justice was entitled in the exercise of his discretion to grant the two declarations and I would dismiss the appeals.”

In January 2016, the Chief Justice ruled that BIU, BPSU and Fire Officers Association divisions that provided essential services had acted contrary to section 9 (1) of Labour Relations Act 1975 in taking “irregular industrial action short of a strike”.

He also stated that the BIU, the BPSU and the BUT acted unlawfully contrary to section 19 of the Labour Disputes Act 1992 in taking “irregular industrial action short of a strike”.

However, in the same judgment, Mr Justice Kawaley turned down a Government bid to block unions from staging future walkouts.

The January 2015 stand-off between Government and the unions, which culminated in marches and protests in the Cabinet Office grounds, was sparked by a letter dated January 23, 2015 from Bob Richards, the Minister of Finance, to the Bermuda Trade Union Congress.

Mr Richards urged the BTUC to reconsider its opposition to furlough days and warned that if agreement could not be reached Government would be forced to take steps to achieve the necessary reductions in expenditure, which could include a reduction in salary of Government employees.

Mr Justice Kawaley had described the minister’s letter as “provocative”, while in yesterday’s appeal judgment Mr Justice Baker acknowledged that the letter contained “a threat” as well as an impossible and unrealistic deadline for response of noon on January 26, 2015. The Court of Appeal president also recognised that the “real deadline” was when the initial agreement over furlough days ended, which was March 31, 2015.

In the Court of Appeal hearing, the unions’ lawyer, Delroy Duncan, had argued that the Labour Relations Act 1975 and Labour Disputes Act 1992 were not “engaged” because the employees’ contracts had come to an end.

However, Mr Justice Baker dismissed the assertion, saying: “In my judgment the contracts of employment were still in force at the time the employees withdrew their labour.”

Mr Duncan also maintained that the published Government notice declaring a labour dispute was “inadequate because it did not give the necessary particulars”.

But Mr Justice Baker stated: “The notice in my view contained sufficient particulars for the purposes of this section (section 19 of the Labour Disputes Act 1992).”

He also maintained the declarations were the “most effective way to decide the issues where all collective agreements had expired and Government had embarked on a policy of dealing with public debt and reducing the size of the public service”.

“In my view, the Chief Justice was entitled and indeed correct to make this declaration as to the rights of the parties,” the Court of Appeal president added.

“He made sure that the employees were not included in the declaration and noted that the Government had agreed that they could use their remaining furlough days for the period that they were absent during the industrial action.”

Mr Justice Baker added: “The appellants (unions) acted unlawfully by continuing irregular action from publication of the notice (declaring that a labour dispute exists) on January 28, 2015.”