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KFC Bermuda decision will hopefully lead to less labour confrontation

As we all know, last year KFC Bermuda applied to the Supreme Court seeking to prevent the Minister of Economy, Trade and Industry from referring the simmering dispute between KFC and the BIU to a Tribunal under the Labour Disputes Act 1992.

KFC’s original complaint to the court was that there was no “dispute” between the BIU and KFC to refer to a tribunal. By the time the matter was ready to go to trial, however, KFC conceded there was a dispute to a limited extent: that dispute was whether or not the terms of the collective bargaining agreement between KFC and the BIU still governed the terms of employment of BIU members, even though the collective bargaining agreement itself had expired. KFC also complained that the reference to the tribunal interfered with its right to negotiate freely with its employees, contrary to the Bermuda Constitution.

One of the key issues in the case was that the collective bargaining agreement between the BIU and KFC did not contain a provision keeping that collective bargaining agreement alive until replaced by a new collective bargaining agreement.

KFC’s primary issue, that the collective bargaining agreement had come to an end automatically in December 2011, was accepted by the court. That led to another issue, which was whether the terms of the collective bargaining agreement remained the terms of employment for those KFC employees who were previously covered by the collective bargaining agreement. The short answer to that issue was yes, the terms of the expired collective bargaining agreement now formed part of the individual terms of employment for those employees previously covered by the collective bargaining agreement.

KFC also took the position that what the Minister had asked the Tribunal to resolve amounted to an interference with its rights under the Bermuda Constitution because the tribunal was being asked to assist the parties either in modifying the collective bargaining agreement or agreeing a new collective bargaining agreement.

When considering these issues and other, mostly technical, legal issues raised by KFC, the Minister and the BIU, the Chief Justice came down firmly on the side of promoting healthy labour relations in Bermuda. He carefully balanced the rights of KFC on the one hand and the corresponding rights of its employees on the other hand. The right of an employer to negotiate freely is a qualified right, it must be balanced against the rights of the employees to negotiate through a union if that is what they choose. The rights of an employer can be no greater than the rights of its employees. Freedom of association must go both ways.

In relation to the Minister referring the dispute to the tribunal, the Chief Justice refused to be drawn into what is clearly a political decision. The courts adjudicate rights, but our elected representatives have a different mandate. In this case the Minister must be taken to have referred the dispute to the tribunal for the benefit of Bermuda as a whole. That is not usually a consideration the court can take into account.

The Chief Justice found that the Minister had a very broad power under the Labour Disputes Act to refer a dispute to a tribunal and that once such a reference was made it was for the tribunal, in conjunction with the parties to the dispute, to determine what was at the heart of the dispute. The Minister’s function in such a situation is to publish notice of the dispute, identify the parties to the dispute and confirm that the dispute continues (that it has not been resolved). The rest is for the tribunal.

The judgment of the Chief Justice in relation to the functions of the tribunal is consistent with both the independence of the tribunal and the notion that specialist tribunals may be expected to have knowledge of the area in which they adjudicate which is superior to that of a court.

The concern of KFC, mentioned above, that the tribunal may impose on the parties a new collective bargaining agreement, was found by the court to have been misplaced. The Chief Justice found that the tribunal has no power to impose upon the parties any new agreement governing employment. That said, he also noted that the assistance of such an independent tribunal may be an advantage to the parties if it makes non-binding recommendations which the parties can consider when negotiating amongst themselves.

In all, the judgment appears to be a good decision for Bermuda as a whole and for KFC and the BIU in particular. It has clarified the scope of the Labour Disputes Act and the functions of the Minister and the Tribunal under that Act. This decision will hopefully lead to less confrontation in labour relations in Bermuda in the future. We now know with greater confidence that if a labour dispute of the kind KFC and the BIU found themselves in last year arises again, the proper mechanism for resolving that dispute is a reference to the tribunal established under the Labour Disputes Act.

It can be counter-productive to take disputes to the Supreme Court when there is established a specialist tribunal which likely will have greater knowledge of the subject matter in dispute, be that labour relations, immigration law or any other field.

Paul Harshaw is a director at Canterbury Law Ltd.

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Published April 08, 2013 at 9:00 am (Updated April 07, 2013 at 6:41 pm)

KFC Bermuda decision will hopefully lead to less labour confrontation

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