Judge: KFC's row with union will go to tribunal

The dispute between Kentucky Fried Chicken (Bermuda) and the Bermuda Industrial Union is headed back to a tribunal.

Chief Justice Ian Kawaley’s ruling will have both parties disappointed and happy with parts of it as the ruling as said the Tribunal’s decision will not be binding.

In December 2011 union members took to the streets protesting KFCB’s intentions to draft a new Collective Bargaining Agreement.

In May 2012, then Minister of Economy, Trade and Industry Patrice Minor referred the disagreement to the Labour Disputes Tribunal.

The Minister appointed Mr. Wendell Hollis as chairman and George Baisden and Garry Madeiros as members of the Labour Disputes Tribunal.

On May 31 last year Government took KFCB to court to ensure the arbitration process was enforced. More protests by the union were held in June.

Jason Benevides, Kentucky Fried Chicken director, said in a press release that his company “is grateful to finally receive the Chief Justice ruling on KFCB’s judicial review application following the recent court hearing on the matter.  To the extent that Chief Justice Kawaley’s ruling ends prolonged uncertainty for all parties regarding the outcome of the judicial review process, and provides important clarifications regarding the operation of The Labour Disputes Act 1992, the ruling is welcomed by KFCB.

“Whilst the Chief Justice has elected not to quash the Minister’s referral of certain disputes to a Labour Disputes Tribunal as KFCB requested, the Court’s declarations that the Tribunal has no power to impose a binding future labour agreement on the parties is most welcome and comforting to KFCB. 

“It was and continues to be KFCB’s position that in a free and democratic society where property rights are constitutionally protected that it is entirely inappropriate for the Government to unnecessarily interfere with the process of commercial contract negotiations or cause unwelcome terms to be involuntarily imposed upon parties to a commercial contract. 

“On that basis, KFCB acted rationally in seeking the Court’s assistance in reviewing the Minister’s authority to compel KFCB and the BIU to participate in an involuntary binding arbitration process where it was expressly provided that a new labour contract would be imposed upon the parties irrespective of the parties’ agreement with any terms set by the Tribunal.

“Although the Court has ultimately concluded that the Minister has the authority to declare a dispute and appoint a Tribunal, it has also addressed KFCB’s fundamental concerns by declaring that the Tribunal does not have any binding powers to compel KFCB and the BIU to accept a new contract against either party’s will.  It is a great relief that the Court has upheld the principle that in the case of a non-essential industry the terms of any labour agreement must be freely negotiated and willingly accepted by the parties to the contract.

“The Court’s ruling effectively leaves the parties back in the position they were in a year ago, namely in need of reaching an agreement via good faith negotiation in order to bring closure to outstanding disagreements. 

“The public will no doubt recall that KFCB called on the BIU on multiple occasions last year to return to the bargaining table to have meaningful and rational discussions about outstanding issues.  KFCB never withdrew its offer to sit down with the BIU for discussions and hopes that the BIU will now agree to resume a dialogue as it seems clear that such a process is the only way to finally resolve outstanding matters.

“KFCB is disappointed that the Court elected not to explicitly issue a ruling on the issues of i) the termination of the last Collective Agreement; and ii) the perceived conflict of interest of Mr. Baisden’s membership in the Tribunal, but rather to leave rulings on those matters to the Tribunal.  However, KFCB notes the Chief Justice’s comments which recognise the rationality of KFCB’s position in these areas and give us reason for optimism that the Tribunal will ultimately see the validity of KFCB’s position on both points.

On the issue of contract termination the Chief Justice writes (para. 5):

“It is difficult to see on what basis it might be argued that KFC had not validly terminated the CBA…”

And on the issue of Mr. Baisden’s suitability for membership in the Tribunal (para. 87) he writes:

“I accept entirely that it is arguable that Mr. Baisden’s historic connection with the BIU does arguably create an appearance of bias;…”

“The long process of contract negotiations, mediation, court reviews, and now upcoming Tribunal proceedings has created significant uncertainty which has been detrimental to KFCB’s business.  Now that the Supreme Court has provided important clarifications regarding the role and powers of the Tribunal, KFCB looks forward to an early conclusion of such Tribunal proceedings as are necessary and ultimately to a final resolution on matters outstanding with the BIU.”