St. Ann Bauxite Ltd v University and Allied Workers Union

• Jurisdiction: Jamaica
• Judge: Wright, QC. C.
• Judgment Date: 05 June 2015
• Court: Industrial Dispute Tribunal (Jamaica)
• Docket Number: IDT 7/2009
• Date: 05 June 2015

Industrial Disputes Tribunal

Wright, C.; Hall, M.; McNish, M.

IDT 7/2009

St. Ann Bauxite Limited

and

University and Allied Workers Union

Employment Law - Industrial dispute — Termination of employment — Dismissal — Lack of consultation with workers — Whether redundancy breached Labour Relations Code and Collective Labour Agreement — Workers to be reinstated or compensated.

Wright, QC. C.

REFERENCE:

1 By letter dated May 21, 2009 the Honourable Minister of Labour and Social Security pursuant to Section 11A(1)(a)(i) of the Labour Relations and Industrial Disputes Act (hereinafter called “the Act”), referred to the Industrial Disputes Tribunal for settlement in accordance with the following Terms of Reference, the industrial dispute described therein:–

2 The Terms of Reference were as follows:

“To determine and settle the dispute between St. Ann Bauxite Limited on the one hand and the University and Allied Workers Union on the other hand over the termination of employment on the grounds of redundancy of the following workers as listed in the attached document.”

DIVISION:

3 The division of the Tribunal which was selected in accordance with Section 8(2)(c) of the Act and which dealt with the matter comprised:

Mr. Norman Wright, Q.C. — Chairman

Mr. Rion Hall, J.P. — Member, Section 8(2)(c)(ii)

Mr. D. Trevor McNish — Member, Section 8(2)(c)(iii)

REPRESENTATIVES OF PARTIES:

4 The Company was represented by:

Ms. Angela Robertson — Attorney-at-Law

In attendance were:

Miss Marshalee White — Legal Officer

Mrs. Pansy Johnson — President

Mr. Nathan Thompson — Personnel & Industrial Relations Manager

Mrs. Nordia Tracey — Training & Organizational Development Human Resource Specialist

5 The Union was represented by:

Senator Lambert Brown — President

Mr. Garfield Harvey — 3rd Vice President

6 In attendance were:

Mr. Herman Brown — Chief Delegate

Mr. Alfred Hemmings — Deputy Chief Delegate

Several other Workers/Delegates

SUBMISSIONS AND SITTINGS:

7 Briefs were submitted by the parties and oral submissions made during fifty-nine (59) sittings, from March 24, 2010 to January 12, 2015.

BACKGROUND TO THE DISPUTE:

8 St. Ann Bauxite Limited, which was formed in 2004 when it took over the operations of Kaiser Bauxite Company, became Noranda Bauxite Limited (NBL) on September 23, 2009. The facility presently owned and operated by NBL started mining and shipping bauxite in 1967. It is a limited liability Company incorporated under the Companies Act of Jamaica with registered offices at Port Rhodes, Discover Bay Post Office in the parish of St. Ann. It exports bauxite. It excavates, hauls, rails, dries and ships bauxite.

9 The employees and contractors are stationed at three principal locations in its operations:-Brown's Town — Property Office

10 Water Valley — Mine Technical, Mine Production and Mine Maintenance

11 Discovery Bay — Plant Operations, Railroading and Administrative Functions

12 The world bauxite and alumina industry was thrown into turmoil in September 2008 with world alumina prices starting a dramatic downturn from $3200 per ton to low of $1320 per ton in December of that same year. The dramatic fall off in the price went hand in hand with a slump in the demand for the product. The key industries which utilize alumina and its by products slowed down dramatically, resulting in many orders being terminated, deferred or reduced. The fall in these industries resulted in significant job losses.

13 Companies in these industries were further weakened by worldwide collapse of the financial industry. With reduction in credit facilities and cash reserves, both residential and commercial consumers exhibited record reduction in the purchase of products. World alumina companies took drastic steps to stay in business by cutting costs howsoever possible, which included closing plants, reducing production, selling assets and reducing workforce, among other strategies.

14 The owners of NBL, having reviewed the financial and cash position of all the companies in the group, determined that in order to remain in the alumina industry, they had to reduce and contain cost. The workforce was alerted to the Company's poor and worsening financial position by a notice from the General Manger dated November 10, 2008, which indicated that all discretionary expenses were suspended with immediate effect.

15 Mary Palmer et-al, being the list of workers attached to the Terms of Reference to the Industrial Disputes Tribunal (IDT), in January 2009, were active employees of the Company and were part of the bargaining unit represented by the University and Allied Workers Union (UAWU), herein after called “the Union”. Among the areas from which these employees were drawn, are Admin Services, Administration, Automotive, Cardumper, Drying, Haulroad Construction, Lab, Loco Maintenance, Mine Maintenance, Mine Production, Mine Technical, Power House, Railcar Maintenance, Reclamation, Shop Maintenance, Track Maintenance, Tractor Shop and Welding Shop.

16 On or about Friday, January 30, 2009, Mary Palmer et-al received letters terminating their services with the Company with immediate effect. The letters sought to make payment in lieu of notice to the employees. These employees had varying years of service with the Company and some had been employed for as long as 28 years. Four of the approximately seventy (70) employees were Union Delegates. The Union submitted that consultation as required by the Labour Relations Code and the Collective Labour Agreement between the Company and the Union, did not take place and that the Company was in breach of them.

CASE FOR THE COMPANY:

17 In support of its contention that the decision to terminate the employment on the grounds of redundancy of a number of workers is in accordance with the law, the Company adduced evidence and made legal submissions as follows:–

1

That the redundancy exercise which resulted in the dismissal of the workers was a consequence of the Company-wide re-organization arising from a downturn in its business, rendering those jobs surplus to the requirement of the business. 2. That the world bauxite and alumina industry was thrown into turmoil in September 2008, with world Aluminum prices starting a dramatic down- turn from $3,200 per ton to a low of $1,320 per ton in December. The dramatic falloff in prices went hand in hand with a slump in demand for the product. The key industries which utilize alumina and its by-products, slowed down dramatically, resulting in many orders being terminated, deferred or reduced. The fall in production in these industries also resulted in significant job losses within those industries. 3. That the NBL is one of only two operations currently producing in the industry in Jamaica. Production levels for the year 2009 for NBL, were revised to 2.9 million Dry Metric Tonnes (DMT), as against an initial plan made in August 2008, of 5.1 million DMT for 2009. This reduction was due to the decline in the demand for bauxite by its customers, who were experiencing and expecting to experience, a sharp fall-off in demand from their customers. The industry and its clients were operating in a period, which is said to be the worst financial and economic depression since the great depression of the early 1900s. 4. That the plunging share prices of Century Aluminum and Noranda Aluminum, which at the time of the redundancy exercise, St. Ann Bauxite was co-owned by them, and the non-availability of credit from financial entities, forced the companies to look to those activities which required the use of cash and the identification of ways by which to cease and reduce cash expenditure while increasing operational efficiencies. There were steps that needed to be taken in the short term and with immediacy, in order to ensure that NBL had a chance of surviving, not only in the short term but also in the medium and long terms. The failing health of its two customers, one of which was a sister Company, was also a critical component that NBL had to consider, if it was to continue as a viable entity. This involved a determination as to whether Gramercy Alumina could operate at reduced production for a sustained period of time. In January 2009, a decision was arrived at that indicated clearly that it was uneconomical for Gramercy to continue to operate at the existing level. 5. That the owners of NBL, having reviewed the financial and cash positions of all the companies in the group, determined that in order to remain in the alumina industry, they had to reduce and contain costs and do all that was necessary to make the companies more efficient in light of the actual and further contemplated reduction in output. In January 2008, the Company did not have in place a contract with one of its customers, as that customer had experienced failure in its system, which meant that it would not be purchasing the same volume of bauxite as the previous year. Gramercy was experiencing falling demands as Century Aluminum had reduced production at smelters supplied by Gramercy and were making plans to close at least one smelter. NBL, at the end of 2008, was staffed to produce 5.1 million DMT. Faced with dwindling markets and a reduction in the cost of the commodity, staffing levels at NBL were cut to more efficiently produce 4.3 DMT. 6. That in January 2009, the owners of NBL communicated that the size of the workforce had to be realigned vis-à-vis the reduced production target for 2009 and advised that a possible further reduction was likely, as no agreement was in place for continued shipment to Sherwin Alumina. Management further pointed out the severity of the financial crisis, the reduced demand for and the inventory level of alumina on the London Metal Exchange, noting that projections as at January 2009, were that the crisis was likely to last for a minimum two (2) years. 7. That NBL's management team...