KFC Bermuda must pay BIU’s legal costs
Fast food franchise KFC Bermuda has been ordered to pay the legal costs of the Bermuda Industrial Union after it failed to block a dispute with staff from going to arbitration.
The company will also have to pay the fees of former Economy and Trade Minister Patrice Minors, who referred the dispute to arbitration in May 2012 after increasingly acrimonious talks between the two sides broke down. Company bosses had earlier opted not to renew the firm’s three-year-old collective bargaining agreement [CBA] it had with employees — a move that was condemned by the BIU which said the contract should remain in place until a new settlement was thrashed out.
Chief Justice Ian Kawaley denied KFC’s claim that a tribunal would deny it its right to “negotiate freely” with staff. Instead, the Chief Justice declared that “the Tribunal is the appropriate forum for the precise parameters of the issues to be determined to be worked out”.
And in his latest ruling on who should foot the bill for the judicial review, he ruled that KFC lawyers had put forward “an almost hopeless submission” when they argued they had “won” at least one of the points in dispute — that a tribunal should be binding. Although the Minister had set out terms for the arbitration panel, the Chief Justice pointed out that, under current Labour legislation, no tribunal can have “draconian powers” to dictate employment terms, and therefore KFC’s concern over this issue was “unmeritorious”.
“This framing of the question, carefully considered, entails looking at the question through the wrong end of the telescope,” the Chief Justice said.
“The proper question is whether the Minister, although succeeding overall, ‘has failed on one or more issues, particularly where consideration of those issues has occupied a material amount of hearing time or otherwise led to the incurring of significant expense’. It is ultimately obvious that this has not occurred.”
Mr Kawaley also dismissed a claim by KFC that it should not have to pay the costs of both the Minister and BIU because both parties could have been represented by one legal team.
“It is self-evident that only the BIU was competent to address the issue of which parts of the CBA it had negotiated were incorporated into their members’ contracts of employment with KFC,” the Chief Justice ruled.
Last night Delroy Duncan, who represented the BIU throughout proceedings, said the union was vindicated by the ruling.
“On behalf of the employees at KFC and the workers of Bermuda it succeed in demonstrating firstly that terms and conditions in the collective bargaining agreement between the BIU and KFC constitute terms of employment of the employees of KFC, even if the collective bargaining agreement has expired,” Mr Duncan said.
“This part of the judgment will have ramifications for all workers in Bermuda who have the benefit of a collective bargaining agreement. Workers who have the benefit of a collective bargaining agreement should look at their agreement to see which terms form part of their contract of employment even if the collective bargaining agreement has expired.”
Mr Duncan added that KFC was wrong to block arbitration talks which could not infringe on the company’s constitutional rights.
“This aspect of the decision will also have wide ranging ramifications for a number of existing collective bargaining agreements in Bermuda which have expired or are about to expire,” Mr Duncan said.
“This finding demonstrates that the compulsory arbitration procedure can be used to resolve disputes in private companies. Because KFC lost on these three points the company was ordered to pay the costs of the BIU and the Bermuda Government.
“The law in the UK, the European Union and Bermuda was designed in part to deal with difficult economic times similar to those the western world is now facing by striking a balance between the rights of companies to do business as they see fit and the rights of workers not to be exploited through the mechanism of change in ownership of a business.”