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Judge reserves judgement on KFC/BIU legal costs

Lawyers for fast-food franchise KFC Bermuda claim the company should not have to pay out the full legal costs of a judicial review — even though it lost its case against former Economy and Trade Minister Patrice Minors and the Bermuda Industrial Union.

The company had moved to block a long-standing dispute with unionised staff over pay and conditions going to arbitration, arguing that, as a private company, management had a right to “negotiate freely” with employees without interference from an outside tribunal.

At a hearing in February, it argued that Minister Minors was wrong to refer the matter to arbitration in the first place because the restaurant was not an essential industry and therefore any labour dispute was not an issue of national importance.

And it also expressed concerns that a tribunal would have the authority to enforce new and binding terms of employment after the firm’s three-year-old collective bargaining agreement expired.

But in his ruling last month, Chief Justice Ian Kawaley said that a tribunal “is the appropriate forum for the precise parameters of the issues to be determined to be worked out”.

He added that the courts were not “competent” to question a Ministerial decision to refer labour disputes to arbitration “save in extreme cases”.

However, he added that the tribunal would not have “draconian powers” dictating how KFC should run its operation.

Following that decision, both sides in the often ill-tempered dispute — at one point the union called for a boycott of the Queen Street restaurant — claimed victory.

One union officer described the result as “one for the good guys”, while KFC issued a statement saying that it was satisfied that any future tribunal would not be binding.

At a hearing last week, attorney Jai Pachai said that because it had “won” the argument, KFC should only have to pay half of the costs of the case, pointing out that any award should be “proportionate”.

And Mr Pachai further argued that, because the Minister and the BIU were represented by separate legal teams who put forward the same arguments on some points, it would be unfair to force the company to pay “duplicate” costs.

“The question of the tribunal’s power to impose new terms was put fairly and squarely before the court,” Mr Pachai said.

“There was an interference with the right to negotiate freely and that was a matter that Your Lordship found in favour of KFC.”

Chief Justice Kawaley said that Mr Pachai’s interpretation of success was “unusual”.

He pointed out that, rather than make a ruling on the question of whether any tribunal decisions were binding, he had simply refered to the labour disputes law as it currently stood.

“What I said was that your complaint was unmeritorious,” the Chief Justice said.

“It was an indirect and oblique acceptance of your submissions — it was not a straightforward ‘we won that point’.”

Lawyer Craig Rothwell, acting for Minister Minors, said that even if KFC did win the argument that a tribunal could not be binding, that debate should not have been brought before the court to begin with.

“It was entirely premature of them to raise it,” he said adding that the Minister should be awarded 85 to 90 percent of her costs.

BIU lawyer Delroy Duncan agreed, saying that Mr Pachai had “leapt before he got to the stile”.

He claimed that it was unjust and unfair that the union should not be represented at the hearing, saying that there were areas of the dispute such as the collective bargaining agreement, that only the union — not the Minister — could debate in court.

Chief Justice Kawaley reserved judgment until a later date.

Chief Justice Ian Kawaley

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Published April 29, 2013 at 9:00 am (Updated April 29, 2013 at 12:48 am)

Judge reserves judgement on KFC/BIU legal costs

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