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Employment Relations Authority v Rawlings
CA 204/06
Wellington
Judgment Date: 7 May 2007
Court/Authority: Robertson, Arnold and Ellen France JJ
Appearances: C Inglis ; KB Rawllings (in person)
COURT OF APPEAL – Application for leave to appeal against an Employment Court decision – Two questions of law proposed – Statutory interpretation – ss 184(1A) and 194 Employment Relations Act 2000 – HELD – Leave to appeal granted on both questions – Application granted
This was a successful application for leave to appeal against an Employment Court decision (See: [2006] 1 ERNZ 729).
The applicant sought leave to appeal on two questions of law: (a) if a right of appeal exists against a determination of the Employment Relations Authority but is not exercised whether the existence of that right operates as a bar to an application for judicial review under s 194 Employment Relations Act 2000 (“ERA”); and (b) whether s 184(1A) ERA precluded the respondent from seeking judicial review of a direction given by the Authority.
The Employment Court held that the existence of a right to challenge did not bar an application for judicial review but any challenge brought must be determined before an application for judicial review is made. Further, that s184(1A) ERA did not apply once the matter ceased to be before the Authority and therefore, the respondent was not precluded from seeking judicial review.
Held
(1) The Court was satisfied that the questions of law proposed were questions which by reason of their general or public importance should be submitted to the Court for decision. Accordingly the Court granted leave to appeal in relation to the two questions identified above. (paras 5-6)
Result: Application granted (leave to appeal) ; No order for costs
Statutes considered:
ERA s184(1A)
ERA s194
ERA s214
Court of Appeal (Civil) Rules 2005 R26
Cases referred to in judgment:
Rawlings v Employment Relations Authority [2006] 1 ERNZ 729
Pages: 2
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New Zealand Amalgamated Engineering Printing & Manufacturing Union Inc v Air Nelson Ltd
Heard: 29 Oct 2007, Christchurch
Judgment Date: 8 Nov 2007
Court/Authority: Full Court
Appearances: JA Wilton ; CH Toogood, D France
PROCEEDINGS REMOVED FROM EMPLOYMENT RELATIONS AUTHORITY – Statutory interpretation – s 97 Employment Relations Act 2000 – Strikes and lockouts – Engagement or employment of another person to perform work of striking employee – Defendant had contract with Air New Zealand to load and carry salmon – Contract allowed Air New Zealand to provide services itself if defendant unable to – Defendant advised Air New Zealand by email that due to impending strike action it may not be able to fulfil contractual obligations – Plaintiff submitted that e-mail amounted to engagement of Air New Zealand staff to do work of striking employees – Some contractor engineers also performed line maintenance work during strike – Plaintiff submitted any particular task could not be work of both contractor and striking employee – HELD – Air New Zealand not engaged by defendant but rather exercising rights under contract – Line maintenance work performed by contractors within range of work they routinely performed – Questions answered – Airline freight and maintenance workers
This was a consolidation of two proceedings removed from the Employment Relations Authority. The Court held that the defendant had not breached s 97 Employment Relations Act 2000.
The defendant was a wholly owned subsidiary of Air New Zealand Limited (“Air New Zealand”) based at Nelson Airport.
The plaintiff gave notice of strike action which included a refusal to handle or perform administrative work connected with foodstuff freight and a refusal to perform line maintenance work.
The defendant carried consignments of salmon which were the subject of a commercial contract between NZ King Salmon Co Ltd (“NZ King Salmon”) and Air New Zealand. Air New Zealand contracted with the defendant to fulfil its obligations to NZ King Salmon. Under that contract, Air New Zealand reserved the right to provide or procure services itself if the defendant did not do so. The defendant advised Air New Zealand by email that it anticipated being unable to fulfil its contractual obligations due to the strike action. During the strike, management staff employed by Air New Zealand assisted with processing and loading the salmon.
The defendant’s engineering work was performed by both employees and independent contractors engaged by the defendant. The contractor engineers were engaged mainly to perform heavy maintenance but did perform an average of 5 hours of line maintenance work per week. During the strike, some contractor engineers performed line maintenance work on two occasions.
The central issue was whether the freight loading and maintenance work fell within the scope of s 97 of the Employment Relations Act 2000 (“ERA”) which sets out the circumstances in which an employer may employ or engage another person to perform the work of a striking or locked out employee.
In relation to the freight loading work, the plaintiff submitted that the email sent by the defendant to Air New Zealand was an agreement which amounted to an engagement of Air New Zealand staff by the defendant to do the work of the striking employees thus breaching s 97(2) ERA. The plaintiff submitted in regard to the line maintenance work that any particular task could not be the work of both a contracting engineer and of a striking engineer employee simultaneously.
Held
(1) Taking all of the relevant evidence into account the Court concluded that Air New Zealand was not engaged by the defendant to perform the work in question. What the e-mail of 23 May 2007 established was that the defendant would be unable to discharge its obligation under the cargo handling contract to process and load freight during the strike. That triggered the provisions of clause 9 of the contract which included the right of Air New Zealand to carry out the work itself. The Court found that was what Air New Zealand did. Thus, rather than deploying its staff to Nelson Airport pursuant to any new agreement or engagement, Air New Zealand was exercising its rights under the existing agreement with the defendant to carry out the work. In doing so, Air New Zealand was not directing its staff to do the work for the benefit of the defendant but rather for its own benefit and in order to meet its contractual obligations to NZ King Salmon Co Ltd. (paras 25–26)
(2) The Court was not satisfied that the events relating to line maintenance fell within the scope of s 97 ERA. The Court found that the extent to which the contract engineers were deployed to line maintenance work by the defendant during the strike in June 2007 was within the range of work which they routinely performed. Their performance of such work was standard practice and unexceptional. Adopting and
applying conclusions reached in Finau & Ors v Southward Engineering Company Limited (cited below), the Court found that this limited amount of line maintenance could properly be regarded as the contract engineers’ own work rather than that of striking employees. (para 28)
Comment
(1) Other than to the extent necessary to preserve health and safety, s 97 ERA as a whole is intended to limit the degree to which employers subject to strike action may reorganise their workforce to limit the effect of the strike. In Finau the Court specifically cautioned against interpreting the Court’s decision as support for taking on new staff for the purpose of doing the work of existing employees about to strike. In the present case, the Court wished to make it clear that whether work which is done by a contractor or non-striking employee during a strike is the work of a striking worker or that person’s own work will be a matter not only of the type of work but also the extent to which the person does that type of work when there is no strike. To a large degree the present decision turns on its relative unusual facts. It should not be taken as a licence to employers to break strikes by changing significantly the pattern of work normally performed by contractors or non-striking employees.
Questions answered ; Costs reserved
Statutes considered:
ERA s 97
ERA s 97(2)
ERA s 97(3)
Cases referred to in judgment:
Finau & Ors v Southward Engineering Company Limited WC 17/07, 25 July 2007
New Zealand Amalgamated Engineering Printing & Manufacturing Union Inc v Air
Nelson Ltd CC 12/07, 17 June 2007
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Service and Food Workers Union Nga Ringa Tota Inc v Alsco NZ
AC 55/07
Heard: 24, 25 Sep 2007, Auckland
Judgment Date: 2 Nov 2007
Court/Authority: Shaw J
Appearances: J Minto ; J Latimer, B Edwards
APPLICATION FOR DECLARATION OF EMPLOYMENT STATUS – Jurisdiction – Whether employee or independent contractor – No written agreement – Plaintiff worked fluctuating rostered hours – HELD – Plaintiff not independent contractor – Absence of written agreement critical to decision – Fluctuating rostered hours did not alone deprive plaintiff of employee status – Teleprompter
This was a successful application for a declaration as to employment status.
The plaintiff was employed as a teleprompter by oral agreement working fluctuating rostered hours. He was paid an hourly rate and submitted invoices setting out the hours worked. He supplied his IRD and bank account numbers but was not registered for GST. There was no discussion about the nature of the agreement. When not working as a teleprompter he was, at times, requested to perform other administrative
duties. He worked between 30 and 40 hours sometimes 6 or 7 days a week. He worked only for the defendant apart from some shearing over the summer when there was little rostered work available. After a number of months the plaintiff was given a role description but no written contract.
The plaintiff sought a declaration as to his employment status. He submitted he was an employee.
The defendant submitted he was a contractor. The defendant alleged the plaintiff was free to attend to his tasks as he saw fit according to the flexible rostering system and was not subject to control by the defendant.
Held
(1) The plaintiff was required to comply with set rosters and was not a free agent to come and go as he pleased. The role profile he was given was prescriptive both as to function and to standards. When the plaintiff’s standards allegedly slipped, the defendant required him to undergo re-training. (para 35)
(2) The invoices the plaintiff rendered for payment each fortnight were not conclusive of employment status. The plaintiff presented as a person of considerable naivety about taxation and other business matters. The invoices could not be taken as his acquiescence to being a freelancer or self-employed contractor. (para 39)
(3) The plaintiff brought no experience or skill to the position. He learned on the job. He used only the equipment supplied by the defendant. The plaintiff took no financial risk with his own capital in the course of his engagement and could not alter his profits by changing his work habits. (para 40)
(4) Teleprompters were a small but important cog in the larger wheel of television production. If there was no teleprompter there was no script for a presenter to read. The position was not an adjunct which the television station could do without. It was an integral part of the production process. (para 42)
(5) It could not be said that in the industry it was such common knowledge that all teleprompters were engaged as freelancers that when the parties entered into a relationship they could be taken to have agreed that the plaintiff would be a freelancer. Industry practice did not assist in the determination of status. (paras 45, 46)
(6) The plaintiff was not an independent contractor. The absence of a written agreement was critical to that conclusion. If an organisation was entering into an agreement with an independent entity it was to be reasonably expected that such an agreement would be formalised in writing to acknowledge and name the contractor and to set the parameters of the contractual arrangements being entered into. (para 47)
(7) Many employees were employed on shift work or rostered hours and were subject to fluctuations in their hours of work by seasonal requirements or fluctuations in production demand. That factor alone did not deprive them of their employee status and deprive them of all of the protections and responsibilities of the employment relationship which are embodied in the Employment Relations Act 2000 and associated legislation. (para 48)
Result: Application granted ; Declaration accordingly ; Costs reserved
Statutes considered:
ERA s6
ERA s6(2)
Cases referred to in judgment:
Bryson v Three Foot Six (No 2) [2005] ERNZ 372
McGreal v Television New Zealand Ltd AC 3/07, 5 February 2007
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Service and Food Workers Union Nga Ringa Tota Inc and Anor v Spotless Services (NZ) Ltd
AC 50A/07
Heard: 17 Sep 2007 - 21 Sep 2007 (3 days) Auckland
Judgment Date: 26 Nov 2007
Court/Authority: Colgan CJ
Appearances: P Cranney, T Oldfield ; S Wilson, K Burson
PROCEEDINGS REMOVED FROM EMPLOYMENT RELATIONS AUTHORITY – Strikes and lockouts – Essential service – Recovery of wages – Court previously held defendant’s actions were not lawful lockouts (See: AC 43D/07) – Whether defendant liable to second defendants for wages during periods when they did not work but were not lawfully locked out – Defendant submitted that lockouts were valid – Defendant submitted that strike action would have occurred regardless of its breaches of contract – HELD – Inconsistent advice to affected employees during notice period provided alternative ground of unlawfulness of lockouts – Strike action would have eventuated regardless of breaches – Second defendants entitled to wages for periods when not on strike – Claim accepted in part – Hospital services
This was a matter removed from the Employment Relations Authority. The Court held that the defendant was liable to the second defendants for wages during certain periods when they did not work but were not lawfully locked out.
In June 2006, the first plaintiff initiated bargaining with the defendant for a multiemployer collective agreement. During the bargaining, numerous tactical strike and lockout notices were served. The strike action was to take place for the first 55 minutes of each hour worked by each employee. The lockout notices applied to the first 23 hours and 55 minutes of each day. For a time, the threatened strikes and lockouts did not eventuate but when bargaining had not progressed satisfactorily, the strikes and lockouts, as described above, eventuated.
In a previous decision, the Court held that the defendant’s actions did not amount to a valid lockout in law (See: AC 43D/07, 23 July 2007). The present case proceeded on that conclusion.
The defendant initially submitted that, despite the previous ruling of the Court, the lockouts were legally valid. However, during submissions both sides accepted that, if not a lockout, the actions constituted a breach of contract by the defendant. The defendant further submitted that absent its invalid lockouts strike action would have occurred regardless.
Held
(1) The Court concluded, independently of the decision reached on 23 July, that the employer’s actions and intended actions did not amount to a lockout and even if they had been so, that the defendant failed to comply with the legislative provisions for notice of such a lockout in an essential service as this has been long interpreted and applied by this Court and the Court of Appeal. The defendant gave otherwise valid statutory lockout notices to the union, but then posted notices to affected employees, before the start of what it intended to be the lockouts, that differed significantly in their descriptions of the employer’s actions from those that had been provided previously to the union. Applying the reasoning of the Court of Appeal in the NZPSA case (cited below), these misleading notices to staff put up shortly before the commencement of the intended lockouts so confused the position that they invalidated the earlier notices and thus deprived any lockout that took place, or was to have taken place, of its lawfulness. (paras 25, 31)
(2) The Court concluded on the balance of probabilities that, had they not been subject to what purported to be, but was not, a lockout on the same dates, the union member employees would probably have taken the strike action of which they had given the defendant notice. Being on strike they would not have been entitled to wages. There was little, if any, cogent evidence that employees would have withdrawn their strike notices at that time in the absence of threatened or actual lockouts. The evidence that strike action as notified would have taken place was more persuasive. (para 38)
(3) The Court concluded that strike action that would have taken place had the defendant not breached the employment contracts of the second plaintiffs by purporting to lock them out, would have lasted for at least as long as did the employer’s action that was determined to have been unlawful. (para 41)
(4) It followed (and as the defendant had conceded in this event), that except for the period of 5 minutes of each hour that each of the second plaintiffs would have worked on the relevant dates, absent the defendant’s breaches of contract there would probably have been strike action. The second plaintiffs’ claims to wage arrears must fail except to the extent now noted and conceded by the defendant. The second plaintiffs, except the 102 identified by the defendant whose cases are still to be determined, were entitled to wages for the period until 0700 hours on 12 July and thereafter for 5 minutes of each hour that they would have worked on 12, 13, 17, 18, 19, 20, 21, 22 and 23 July 2007. (para 42)
Comment
(1) Ongoing, albeit diminishing, debate about whether the landmark 1951 waterfront industrial dispute was, or arose from, a strike or from a lockout is not simply rhetorical. It also illustrates the popular subjective interpretation of the words and, as with other words and phrases, their potential to bear both colloquial and specialist meanings in employment law. (para 3).
(2) The Court was very conscious that this case was not argued for either side on a loss of chance basis but, rather, in a convention “all or nothing” manner. As was the Court of Appeal in Ioane (cited below) (although the circumstances differed of course), the Court was loath to venture alone into a method of analysis of loss that either did not occur to the parties or was not sufficiently attractive to either or both that it was advanced. Had a loss of chance approach been advanced by either side, it was almost inevitable that additional evidence about relevant factors would have been called and upon which the Court should not speculate. Although the Court, and the Court of Appeal in employment cases, have signalled clearly a preparedness to deal with such questions on a loss of chance basis, the present case was not the case in which that boat should be pushed out and the Court determined the plaintiffs’ claim on an all or nothing basis founded on the probabilities of the hypothesis of readiness, willingness and ability to work by the second plaintiffs. (paras 63-64)
Result: Claim accepted in part ; Orders accordingly ; Costs reserved
Statutes considered:
ERA s83
ERA s84
ERA s87
ERA s89
ERA s96
ERA s131(1)
ERA s189
ERA s189(1)
Cases referred to in judgment:
Allied Maples Group Ltd v Simmons & Simmons [1995] 4 All ER 907
Benton v Miller & Poulgrain (a firm) [2005] 1 NZLR 66
Co-operative Wholesale Society v New Zealand (except Westland) Meat Processors’
etc IUOW [1971] 7 BA 596
Graham v Airways Corporation of New Zealand Ltd [2005] 1 ERNZ 587
NID Distribution etc IUOW v Ullexco [1989] 1 NZILR 837
Secretary for Justice v New Zealand Public Service Association Inc (1990) ERNZ Sel
Cas 601, [1990] 2 NZLR 36
Service and Food Workers Union Nga Ringa Tota Inc v Spotless Services (NZ) Ltd
AC 43C/07, 23 July 2007
Service and Food Workers Union Nga Ringa Tota Inc v Spotless Services (NZ) Ltd
AC 43D/07, 27 July 2007
Spotless Services (NZ) Ltd v Services and Food Workers Union Nga Ringa Tota Inc
[2007] NZCA 514
Other workers/site names: Aburn
Pages: 3
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South Tranz Ltd and Ors v Strait Freight Ltd
CC 27/07
Heard: 14 Mar 2007, Christchurch
Judgment Date: 29 Nov 2007
Court/Authority: Colgan CJ, Shaw, Couch JJ
Appearances: SE England ; PD Barrett
NON DE NOVO CHALLENGE TO DETERMINATION OF EMPLOYMENT RELATIONS AUTHORITY – Employment Relations Authority found plaintiff had breached mediated settlement agreement and ordered plaintiff to account for profits – Extent of Authority’s jurisdiction to grant remedies for breach of mediated settlement agreement – Statutory Interpretation – ss 137(2), 149, and 151 Employment Relations Act 2000 – HELD – Where breached term of mediated settlement does not require payment of money the Authority may only order compliance with the term – Authority did not have jurisdiction to order account of profits – Challenge granted
This was a successful non de novo challenge to a determination of the Employment Relations Authority which found that the plaintiff had breached a mediated settlement agreement and ordered the plaintiff to refrain from further breaches, and to account for profits.
The parties entered into a mediated settlement agreement which was executed in accordance with s149 Employment Relations Act 2000 (“ERA”). Under the agreement the plaintiff was subject to a two year restraint of trade.
The defendant lodged proceedings in the Authority alleging that the plaintiff had breached the restraint of trade clause. The Authority determined that the plaintiff had breached the restraint of trade and ordered that (1) the plaintiff refrain from any further breaches; and (2) the plaintiff account for profits with interest.
The plaintiff challenged the Authority’s jurisdiction to make the second order. The plaintiff submitted that the words “in addition to any other power it may exercise” in s 137(2) ERA, which concerns the power of the Authority to make compliance orders, did not confer any jurisdiction in addition to that set out in s137(2) ERA.
The defendant submitted that the Authority did have the jurisdiction to make the award for an account of profits. It contended that the phrase “in addition to any other powers it may exercise” meant that the exercise of additional powers was discretionary.
Held
(1) It was unclear from the defendant’s submissions exactly how it was suggesting that the words “in addition to any other power it may exercise” in s137(2) should be construed. If its submission was that they confer additional jurisdiction on the Authority over and above that conferred by the balance of s137(2), the Court did do not accept that submission. To effectively confer a power, the legislative language must be clear and specific. The purpose of the expression seemed to be simply a matter of clarification. What it makes clear is that the power to make an order of the kind referred to in s137(2) was not intended to be in substitution for other powers the Authority might have in respect of any particular matter but in addition to those other powers. Thus the expression recognises jurisdiction expressly conferred elsewhere. (para 33)
(2) In the alternative, it may be that the defendant was suggesting that, to the extent that the Authority makes any orders in the exercise of other powers, the expression “in addition to any other power it may exercise” in s137(2) has the effect of making all such orders part of the order made under s137(2). The Court rejected that proposition. It required a strained meaning of the words used when their ordinary meaning served the perfectly sensible purpose set out above. It also produced an illogical result. (para 35)
(3) Where parties have concluded an agreement which is enforceable under s149(3), the only means of enforcement available are those provided for in s151. Where, as in the present case, the term of the agreement which is found to have been broken does not require the payment of money, the only remedy available to the Authority is to order compliance with the term in question. No other remedies are permitted under s151 and the effect of s149(3)(b) is that the agreement may not be the subject of any form of proceedings other than enforcement proceedings. A compliance order is an order made under s137 and is limited to an order of the type specifically provided for in s137(2). It cannot be made to include an order for damages or any order related to an order for damage such as an account of profits. (para 38)
Comment
(1) An issue which concerned the Court about the present case was whether the problems which were the subject of the mediated settlement were within the scope of the statutory mediation provisions of the ERA. By the time the mediation took place there had ceased to be any employment relationship between any of the parties. The settlement was also expressed to apply to companies which had never been party to
any employment relationships with any other parties. The relationships between the parties were almost entirely commercial and the terms of settlement reflected this. This caused the Court to doubt whether it could properly be said that the relationships between the parties to the settlement were “work-related”. (paras 40, 42)
Result: Challenge granted ; Order made by Authority for account of profits quashed ; Costs reserved
Statutes considered:
ERA s5
ERA s131
ERA s137
ERA s137(1)
ERA s137(1)(a)
ERA s137(2)
ERA s138(4)
ERA s143
ERA s144
ERA s144A
ERA s149
ERA s149(3)
ERA s149(3)(b)
ERA s151
ERA s151(a)
ERA s151(b)
ERA s162
ERA Part 10
Words and phrases: In addition to any other power it may exercise
Cases referred to in judgment:
Attorney-General v Blake [2001] AC 268
Newmans Tours Limited v Ranier Investments Limited [1992] 2 NZLR 68
Other workers/site names: Shackleton, Harwood
Pages: 3
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Southern Local Government Officers Union Inc v Christchurch City Council
CC 26/07
Heard: 12 Nob 2007 - 13 Nov 2007 (2 days) Christchurch
Judgment Date: 29 Nov 2007
Court/Authority: Colgan CJ, Travis, Shaw JJ
Appearances: PD Lawson ; SL Hornsby-Geluk
PROCEEDINGS REMOVED FROM EMPLOYMENT RELATIONS AUTHORITY - Statutory interpretation – s 82(1)(a)(ii) Employment Relations Act 2000 (“ERA”) – Whether reduction in work with corresponding reduction in pay is a lawful lockout – Effect of omission of words “whether wholly or partially” from lockout definition in ERA compared to Employment Contracts Act 1991 – Defendant gave lockout notice that it would not engage employees for standby duties and required employees to garage work vehicles outside normal working hours – HELD – Omission of words did not prevent a technical lockout where reduction in pay was matched by corresponding reduction in duties – Provided reduction in work properly linked to reduction in pay and no element of unlawful unilateral variation, remuneration may be abated rateably for work from which employees locked out – Declaration that defendant’s actions in withdrawing motor vehicles without corresponding reduction in duties was an unlawful unilateral variation and was not a lawful technical lockout – Question answered – Dog control officers
This was a matter removed from the Employment Relations Authority to the Employment Court. The Court held that a reduction in work with a corresponding reduction in pay is a lawful lockout.
The defendant employed members of the plaintiff union as dog control officers (“DCOs”). The DCOs worked a 4-week roster cycle, which included a week described as the “standby shift”. DCOs rostered on standby were required to respond to after-hours callouts and received an allowance for each day they were on standby.
In 2005, the DCOs were required to service a wider area for call outs. In May 2006, the plaintiff initiated bargaining with the defendant for the renewal of the collective agreement. One of the issues raised was the call out arrangements. In December
2006, the plaintiff advised that the DCOs would not deal with after-hours call outs for certain areas. The plaintiff also gave the defendant notice of intended strike action.
The defendant then gave the DCOs notice of a lockout advising that it would not engage the DCOs on standby. The DCOs were required to garage their work vehicles at the defendant’s premises outside normal working hours. The plaintiff advised the following day that the DCOs would not perform work during the day on Saturday or Sunday. The parties reached a settlement the next day which ended the lockout.
The issue was whether the decision of Witehira v Presbyterian Support Services (Northern) (cited below) was still good law. The Court held that the actions of the employer in Witehira in reducing the employees’ pay but still requiring the employees to perform full duties did not meet the definition of lockout but was instead an unlawful unilateral variation. The Court also observed, obiter, that a reduction in work corresponding to a reduction in pay might constitute a lockout. Witehira was decided under the Employment Contracts Act 1991 (“ECA”). The words “whether wholly or partially” were omitted from “discontinuing the employment of any employees” in s 82(1)(a)(ii) in the definition of lockout contained in s 82 Employment Relations Act 2000 (“ERA”).
The plaintiff submitted that the removal of the words “whether wholly or partially” made all lockouts of a partial nature unlawful and that the obiter observations in Witehira were no longer good law. The plaintiff further submitted that, in any event, the lockout was unlawful because it related to a dispute, and that the defendant’s actions amounted to an unlawful unilateral variation.
The defendant submitted that Witehira contemplated a total lockout of a limited nature, in the sense that specified work could be reduced and matched by a corresponding reduction in pay. To avoid confusion, the Court referred to that situation as a “technical lockout”. The defendant contended that the removal of the words “whether wholly or partially” did not render such technical lockouts unlawful. It only made those ‘lockouts’, such as the situation in Witehira, which reduced an employee’s pay with no corresponding reduction in duties, unlawful.
Held
(1) The Court concluded that the omission of the words wholly or partially did not prevent a technical lockout where the reduction in pay was matched by a corresponding reduction in duties. The deletion of the words from s 82(1)(a)(ii) ERA had not resulted in technical lockouts being rendered unlawful in the sense of falling outside of the definition of lockout and amounting therefore to unlawful unilateral variations. If Parliament had intended such a result by the omission of those words, it would also logically have amended s 82(1)(a)(iii) ERA, the equivalent to s62(1)(c) ECA relied on in part in Witehira, as well as s 82(1)(a)(iv) ERA which may also authorise a reduction in work rather than a total withdrawal of it. (paras 46-47)
(2) The strike and lockout provisions try to achieve a rough balance between loss of production by employers in a lockout and loss of remuneration by employees in a strike. This is reflected in s 96 ERA, the successor to s 72 ECA, by which lawfully locked out employees are not entitled to any remuneration by way of salary, wages, allowances, or other emoluments in respect of the period of the lockout. In Witehira the link between the lockout period by an act complying with s 62 ECA, and the suspension of liability for wages during that period, was seen to allow a reduction in work and a consequent reduction in pay. (paras 48-49)
(3) The Court therefore concluded, as did the Court in Witehira, that as employees lose remuneration while on strike, employers should lose productivity when locking out. Provided that the reduction in work is properly linked to the reduction in pay and there is no element of an unlawful unilateral variation, remuneration may be abated rateably for the work from which the employees are locked out. (para 50)
(4) The dominant motive for the actions taken by the defendant in imposing a lockout of the DCOs, in response to their industrial action, was to progress negotiations for the new collective agreement. The lockout was not unlawful under s 86 ERA and related to bargaining in terms of s 83 ERA.
(5) The way in which the notice was drafted and the subsequent communications indicated that the motor vehicles were going to be withdrawn from use during ordinary duty hours that were unaffected by the lockout. The Court concluded withdrawal of this benefit without a corresponding reduction in duties made this an unlawful unilateral variation of contract and not a technical lockout of specified duties with specified reduction in remuneration in the sense approved by Witehira. (para 66)
(6) The purported lockout was of very short duration and had little if any impact upon the DCOs. It did not appear that the lockout operated long enough to even have any impact as to the withdrawal of the motor vehicles. The plaintiff had failed to establish any basis for a claim for either $500 compensation for loss of use of the motor vehicles, or for the lost standby allowance. The Court restricted the relief to the declaration sought that the actions of the defendant in withdrawing the motor vehicles without a corresponding reduction in duties was an unlawful unilateral variation of the DCOs’ contracts and was not a lawful technical lockout. (paras 67-69)
Result: Question answered ; Declaration accordingly ; Costs reserved
Statutes considered:
ECA s62
ECA s62(1)(b)
ECA s62(1)(c)
ECA s72
ERA s80
ERA s81(1)(a)(v)
ERA s82
ERA s82(1)(a)(i)
ERA s82(1)(a)(iii)
ERA s83
ERA s86
ERA s96
ERA Part 8
Industrial Relations Amendment Act 1981
Interpretation Act 1999 s5(1)
Words and phrases: Discontinuing the employment of any employees ; Technical lockout
Cases referred to in judgment:
Armstrong v Attorney-General (on behalf of Chief Executive Department of Justice)
[1995] 1 ERNZ 43
Attorney-General v NZ Post-Primary Teachers’ Association [1992] 2 NZLR 209
(CA)
Dickson’s Service Centre Ltd v Noel [1998] 3 ERNZ 841
Marsh v Transportation Auckland Corporation Ltd [1996] 2 ERNZ 266
NZ Labourers IUOW v Fletcher Challenge Ltd (1989) ERNZ Sel Cas 424; [1989] 3
NZILR 129
Paul v New Zealand Society for the Intellectually Handicapped Inc [1992] 1 ERNZ 65
Transportation Auckland Corporation Ltd v Marsh [1997] ERNZ 532 (CA)
Witehira v Presbyterian Support Services (Northern) [1994] 1 ERNZ 578
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The Secretary for Education and Ors v New Zealand Educational Institute Te Riu Roa (Inc)
WC 30/07
Heard: 15 Oct 2007, Wellington
Judgment Date: 30 Nov 2007
Court/Authority: Shaw J
Appearances: A Martin, T MacKinnon ; D Martin
CHALLENGE TO DETERMINATION OF EMPLOYMENT RELATIONS AUTHORITY – Interpretation of collective agreement – Sick leave – Disregarded sick leave – Stress related illness – Whether collective agreement provided for disregarded sick leave for stress-related illness – Plaintiffs sought declaration that the collective agreement did not provide disregarded sick leave for stress-related illness – HELD – Clause providing disregarded sick leave applied to stress-related illness – Challenge dismissed – Primary Teachers
This was an unsuccessful de novo challenge to a determination of the Employment Relations Authority which ordered that the plaintiffs must make available certain sick leave provisions in the collective agreement without distinction as to physical or psychological illness.
The 2001 and 2004 collective agreements provided for disregarded sick leave which allowed a primary teacher to take sick leave without the leave being debited from the teacher’s ordinary sick leave balance (“clause 6.2.5”). Under the clause, disregarded sick leave could only be granted by the first plaintiff in certain circumstances one being that the sickness could be traced directly to the conditions or circumstances under which the employee worked. Such a clause had been in existence in varying forms since 1919.
A teacher who was suffering from a stress-related illness applied for disregarded sick leave. A dispute arose over the interpretation of clause 6.2.5. The plaintiffs sought a declaration that disregarded sick leave was not available for stress-related illness.
First, the plaintiffs submitted that by adopting a dictionary definition of the word “sickness” the Authority had not properly taken into account the context, purpose and intent of the clause. Second, it had never been in the contemplation of the parties that the clause might apply to stress-related illnesses because the clause as a whole only included sickness caused by external factors beyond the control of the employee. Third, the plaintiffs argued that an illness such as stress could not be causally traced directly to the conditions or circumstances of employment.
The defendant argued that a stress-related illness was covered by the clause providing disregarded sick leave and that the plaintiffs’ interpretation of the clause was artificial.
The defendant submitted that the plain meaning of the clause was evident and could be applied through a factual inquiry.
Held
(1) The four categories of clause 6.2.5 were quite separate. Disregarded sick leave could be granted in four discrete circumstances. The word “sickness” was not coloured by any of the other categories. Because there was a separate category for infectious illness, the word “sickness” was not confined to examples such as contact
with pupils with an infectious disease. To the contrary, the use of the general word sickness” was only qualified by the ability to trace that sickness directly to the workplace. Not all sickness was covered, only that which were directly traceable to the work conditions. (paras 17–18)
(2) The answer to the plaintiff’s proposition that clause 6.2.5 did not contemplate an illness which may have been induced by an external factor but which cannot be the direct cause of it lay in the words “traced directly”. This was not the same as cause. Trace means to find by investigation (Concise Oxford Dictionary, 10th edn) whereas a cause is that which gives rise to a condition. To trace something is a process. The cause could be the outcome of the tracing process but clause 6.2.5 did not expressly require a cause to be found. The words “traced directly” imposed the need for a claimant for disregarded sick leave to establish a direct link between his or her sickness and the conditions or circumstances under which the claimant was working. The sickness must be directly traceable to those conditions. (paras 20–21)
(3) The plaintiffs’ attempt to distinguish between sicknesses which were proximate to the working conditions compared with illnesses which may arise because the proximate cause was located within the teacher’s individual condition rather than in the working environment was an artificial one not contemplated by the clause. The distinction was therefore illogical and the words of the clause on their natural meaning did not contemplate such an interpretation. (para 23)
(4) The gravamen of the submissions for the plaintiffs was that stress was not in itself an illness but could cause an illness, for example ischaemic heart disease, hypertension, or psychiatric disorders. However, the interpretation of the clause must be viewed objectively in the light of the meaning of its words. The question of whether any particular teacher was suffering from any particular sickness, stress related or not, was consequent to the interpretation of the section, not a factor in the interpretation itself. Any teacher wishing to rely on clause 6.2.5 must show that, in their particular circumstances, they had been diagnosed as suffering from sickness and that that sickness was directly traceable to the work conditions, again a matter of evidence. There was no basis upon which any particular sickness if reliably diagnosed as such could be excluded from the definition by reason of the nature of the illness. The application of the clause was controlled and limited by the words “traced directly”. That again was a matter of objective judgment based on the facts in any particular case. (paras 24–26)
(5) On the face of it the plain meaning of the words of clause 6.2.5 were readily able to be ascertained and the application of those words was purely factual. If a teacher suffered from a sickness which could be directly traced to their actual working environment then the teacher was entitled to disregarded sick leave regardless of the nature of the illness and whether or not the teacher might have a personal grievance or other redress. This was in accord with the context and purpose of clause 6.2.5. (para 27)
Comment
(1) It is recognised in the interpretation of statutes that new developments and inventions may override an old Act which could often not be foreseen by those who passed it. In such cases, the courts normally apply an “ambulatory” or “updating” approach to find that these new developments are covered by the original Act provided the developments are within the purpose of the Act and the words of the Act are capable of extending to them. In the context of these collective agreements with a long history reaching back to the beginning of the twentieth century, it was appropriate to take this ambulatory approach to the interpretation if required, provided such an approach did not undermine the overall meaning and purpose of the collective agreements (paras 8-9)
Result: Challenge dismissed ; Costs reserved
Words and phrases: Sickness ; Trace
Cases referred to in judgment:
Attorney-General v Gilbert [2002] 1 ERNZ 31 (CA)
Hatton v Sutherland [2002] 2 All ER 1
Pyne Gould Guinness Ltd v Montgomery Watson (New Zealand) Ltd [2001] NZAR
789 (CA)
Secretary for Education v NZEI [2002] 2 ERNZ 470
Pages: 3
[974286]
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X v Bay of Plenty District Health Board
AC 60A/07
Heard: 4 Dec 2007, Auckland
Judgment Date: 10 Dec 2007
Court/Authority: Travis J
Appearances: J Roberts, A Maelzer ; P Skelton
DE NOVO CHALLENGE TO DETERMINATION OF EMPLOYMENT RELATIONS AUTHORITY - Reasons for declining to hear challenge – Procedure – Proceedings concerned dispute over ongoing right to sick leave pay – Authority stayed proceedings and adjourned investigation pending outcome of criminal proceedings against defendant concerning similar matters – Plaintiff submitted inconsistent with Authority’s purpose to administer speedy justice and that determination was substantive because affected plaintiff’s ability to pursue remedies – Defendant submitted determination was procedural and therefore barred by s 179(5) Employment Relations Act 2000 (“ERA”) – HELD – Challenge to Authority determination barred by s 179(5) ERA – Challenge dismissed – Public health care worker
This judgment recorded the reasons for an unsuccessful challenge to a determination of the Employment Relations Authority which granted the defendant’s application for a stay of proceedings and an adjournment of an investigation pending the outcome of criminal proceedings.
The plaintiff was employed by the defendant. A dispute arose over the plaintiff’s right to ongoing sick leave pay. The Department of Labour was prosecuting the defendant for an alleged offence under s 6 of the Health and Safety in Employment Act 1992 relating to the plaintiff’s exposure to risk of harm from work-related stress.
The Authority granted a stay of proceedings and an adjournment of the investigation pending the outcome of the defended criminal proceedings.
The issue was whether s 179(5) Employment Relations Act 2000 (“ERA”), which precludes challenges to procedural determinations of the Authority, applied.
The plaintiff submitted that the Authority’s objective to administer speedy justice did not sit comfortably with the granting of a stay and adjournment in light of s 179(5) ERA. Second, the Authority’s determination had a significant effect on the remedies sought. The criminal proceedings precluded the plaintiff’s sick leave issue from being determined for an unknown period of time. This amounted to a substantive effect as
opposed to a procedural one. In reality, the proceedings were effectively withdrawn due to the indefinite postponement.
The defendant submitted that the Authority’s determination was correct and that since it was a matter of procedure there was no right of challenge due to the privative provisions of s 179(5) ERA. Second, the defendant argued that inasmuch as a stay and adjournment delayed the proceedings, there was no substantive effect since the
remedies sought were unaffected. Finally, the defendant drew analogy from a line of
decisions of the Court of Appeal which held that the Court of Appeal will not hear appeals, as of right, from procedural matters that do not affect substantive rights unless the plaintiff’s rights are irretrievably compromised.
Held
(1) The Court of Appeal decisions are on all fours with the approach adopted by Judge Couch in Oldco PTI (New Zealand) Ltd v Houston (cited below). It is the consequences that flow, from what might be regarded as an interlocutory determination by the Authority, that will determine whether or not it is a determination about procedure or whether it is a determination that has affected substantive rights. Clearly procedural means may be taken by the Authority to make a determination which may have substantive results. If a determination has such substantive effects then s 179(5) ERA will not operate as a bar. (paras 33–34)
(2) That was not the situation at present in the plaintiff’s case. Following Oldco, supported as it is by the line of Court of Appeal decisions either interim stays or determinations adjourning investigations, which do not have substantive consequences, are to be regarded as matters of procedure and caught by s 179(5)
ERA. That is because, to use Judge Couch’s words, they relate to “the manner in which the employment relationship problem between the parties is resolved” and do not have substantive effects on the rights and obligations of the parties. For these reasons the Court considered this particular challenge was barred by s 179(5) ERA. (para 35)
Comment
(1) It was unlikely that the rationale for the granting of the adjournment and stay would apply after the evidence was heard in the criminal prosecution. Other than perhaps the advantage of awaiting the outcome of the District Court’s judgment because that might bear on the employment relationship problem, the evidence would have been given and so the issues as to the rehearsal of the plaintiff’s evidence and the possible prejudice to a fair trial would no longer have application. Once the criminal trial was over it would be open to the plaintiff to apply to the Authority for the removal of the stay and for the investigation to be resumed. If the plaintiff’s application was declined the plaintiff may then be able to argue that the long delay was causing her irreparable damage. (para 23).
Result: Challenge dismissed ; Costs reserved
Statutes considered:
ERA s 143(fa)
ERA s 157(3)
ERA s 160(1)(e)
ERA s 173(3)
ERA s 174
ERA s 177(4)
ERA s 178(6)
ERA s 179(1)
ERA s 179(5)
ERA s 184(1A)
ERA s 188(4)(b)
ERA Schedule 1 clause 10
Employment Relations Amendment Act (No2) 2004 s 59
Heath and Safety in Employment Act 1992 s 6
Interpretation Act 1999 5(1)
Judicature Act 1908 s 66
Cases referred to in judgment:
A Ltd v B [1999] ERNZ 613
Agnew v Pardington [23006] 2 NZLR 520
Association of Dispensing Opticians of NZ Inc v Opticians Board (1999) 13 PRNZ
599
Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321
Axiom Rolle PRP Valuations Services Ltd v Kapadia [2006] 1 ERNZ 639
Bevan Smith v Reed Publishing (NZ) Ltd (2006) 18 PRNZ 310
Keys v Flight Centre (NZ) Ltd [2005] ERNZ 471
Mann v Alpinewear (NZ) Ltd [1996] 1 ERNZ 248
Oldco PTI (New Zealand) Ltd v Houston [2006] 1 ERNZ 221
Rawlings v Employment Relations Authority [2006] 1 ERNZ 729
Winstone Pulp International Ltd v A-G (1999) 13 PRNZ 593 (CA)
Pages: 3
[974325]
Fonterra Cooperative Group Ltd v Van Heerden and Anor
AC 61/07
Heard: 5 Nov 2007 - 6 Nov 2007 (2 days) Auckland
Judgment Date: 13 Dec 2007
Court/Authority: Travis J
Appearances: G Pollak ; H White, S Mitchell, P Swarbrick
DE NOVO CHALLENGE TO DETERMINATION OF EMPLOYMENT RELATIONS AUTHORITY – Restructuring – Redeployment – Defendants’ positions disestablished – New position established which was not covered by collective agreement – Closed pool of two employees considered for position – Both defendants’ disestablished positions similar to new position – First defendant covered by collective agreement (“CA”) – CA required plaintiff to make every endeavour to redeploy – Whether contractual provisions affect manner in which employer deals with competing interests of two employees during restructuring – Whether redeployment provisions in CA conferred enhanced rights of redeployment – Plaintiff submitted that CA did not apply to new position – First defendant submitted that plaintiff in breach of CA by failing to redeploy her for new position – HELD – Consultation process regarding redeployment in CA activated once possibility of displacement of workers arose – CA required plaintiff to choose between three redeployment options unless unable to do so – That CA did not cover new position did not impede exercise of two out three options – Not open to plaintiff to consider second defendant for new position as position site specific – Challenge dismissed – Dairy Workers
This was an unsuccessful de novo challenge to a determination of the Employment Relations Authority which held that the plaintiff had discretion under the collective agreement as to how it could redeploy the first defendant but that the collective agreement required that every endeavour to redeploy be made.
The first defendant was employed under the collective agreement (“CA”) as a panel leader of laboratory technicians at the plaintiff’s Waitoa plant. The second defendant was employed under an individual employment agreement (“IEA”) in a salaried role as a sensory panel leader in the plaintiff’s laboratory at Te Rapa.
In early 2007, the plaintiff began extensive restructuring with the goal of amalgamating the Waitoa and Te Rapa plants into one at Waitoa. The plaintiff and the Dairy Workers Union (“DWU”) formed a site consultative committee (“SCC”). A new position was created at Waitoa. The first plaintiff believed that this was the position she already held but was advised it was significantly enhanced in comparison to her current position. The new position was not covered by the CA as it was a managerial position that included the responsibility of employment and dismissal.
The first defendant’s position was eventually disestablished but she and the DWU continued to contend that she was entitled to the new position under the terms of the CA. At the same time, the second defendant’s position was disestablished. She had held a similar although somewhat enhanced salaried role than the first defendant. Both defendants were identified by the plaintiff’s human resources department as forming a closed pool of two applicants for the new position.
Clause 10 of the CA governed redeployment and redundancy. Clause 10.1.3 provided that ‘every endeavour’ would be made to redeploy workers to an alternative position in accordance with its redeployment provisions. Clause 10.2.1 stated that redeployment would occur at the plaintiff’s discretion provided the terms of employment were not substantially changed to the worker’s detriment, that sufficient training would be provided and that any alternative position would be at the same site or factory complex. Clause 10.2.2 and 10.2.3 provided three options: an alteration of the worker’s duties, redeployment to a position commensurate with the worker’s level of skill or redeployment to an upgraded position. Redundancy was to be the last option once all other options had been exhausted.
The plaintiff argued first that the CA did not apply to the new position. It could, in its discretion, appoint either defendant to the new position. Second, the plaintiff maintained that even if the first defendant were appointed to the new role, it would not amount to redeployment under the CA because the CA had no application. Third, the second defendant, despite being employed under an IEA, would benefit from the redundancy and redeployment provisions of the CA as per the plaintiff’s general human resources policy. Fourth, it was contended that the position could not be an ‘upgraded’ position as it was not covered by the CA.
The first defendant submitted that the plaintiff was in breach of the CA by failing to consider her for the new position because the CA did not prevent redeployment to positions that were not covered by it. Second, the restructuring process had proceeded to such a point that the redeployment provisions had been triggered. Therefore, if one of the three options was available, the plaintiff had to make use of it since redundancy was a last resort. Finally, the site specific obligation favoured the first defendant over the second defendant.
The Court appointed an amicus curiae. The amicus curiae submitted that the CA did not confer an absolute obligation on the plaintiff to redeploy if an available position emerged and that the obligation to use “every endeavour” did not apply to the second defendant.
Held
(1) Under clause 10.1.4 the SCCs were formed to oversee the implementation of all redeployment, relocation and/or redundancy issues on any site where displacement of workers seemed likely to occur. That clause, when read in conjunction with clause 10.1.3, provided the contractual authority for the actual practice of the SCC to be
formed and to start dealing with issues of redeployment as soon as there was a proposal under consideration and the displacement of workers seemed likely to occur.
The Court therefore rejected the plaintiff’s contention that clause 10.1.3 and the formation of the SCC only became operational when the affected workers actually had their jobs displaced or their terms detrimentally affected. (para 43)
(2) Even if the Court was wrong in that interpretation, as a matter of fact, the positions previously occupied by the two defendants had been announced by the plaintiff as being disestablished and thus they were affected to their detriment. Clause 10.1.3 required the plaintiff to then make every endeavour to redeploy the first defendant to an alternative position in accordance with 10.2. (para 44)
(3) The plaintiff’s discretion in clause 10.2.1 was to exercise one of the three options in clauses 10.2.1.1, 10.2.1.2 or 10.2.1.3. It was only where the plaintiff was unable, as the word is used in 10.2.3, as opposed to unwilling, to exercise one of those three options in clause 10.2.1 that clause 10.2.3 came into operation in relation to “any redundant workers”. Although the plaintiff had a discretion as to which of the three options it exercised, under 10.2.1 the combined effect of clauses 10.1.3, the qualification and limitation in 10.2.1 and the word “unable” in 10.2.3, meant that the plaintiff’s discretion in clause 10.2.1 was limited to choosing between one of three options. The plaintiff did not have the discretion to decline to place an affected worker in one of those three optional positions, if it was able to, and if the worker’s situation fitted the description in clause 10.2.1. (paras 45–46)
(4) The first defendant’s situation did fit the description in 10.2.1. The new role did not substantially change her terms and conditions of employment to her detriment. To the contrary, they benefited the first defendant, whose disestablished role formed a substantial part of the duties of the new role but without budgetary requirements and the ability to hire and fire. Even if the new role did not come within 10.2.1.2 the Court found it was an upgraded position, in terms of the third option in 10.2.1.3. The Court did not interpret 10.2.1.3, in its context, as being limited to positions described in the CA. The wording in clauses 10.1.3, 10.2.1 and 10.2.3 did not carry that limitation. (paras 47, 49)
(5) That the new role was not covered by the CA was not an impediment to the exercise of either the second or third options or the temporary continued involvement of the SCC. (para 51)
(6) That brought the Court to consider the situation of the second defendant. As is common ground her IEA did not contain redeployment provisions. Instead, the second defendant submitted she could rely upon the policy document and the undertaking of the plaintiff to treat her as though she had the benefit of clause 10. However, even if clause 10 was deemed to form part of her IEA, and the Court made no ruling on this, clause 10 carried the detriment to the second defendant of being site specific in clause 10.2.1. The new role was not on the same site or factory complex. If clause 10 was part of her contractual arrangements, the second defendant could not require the plaintiff to use its best endeavours to exercise its discretion in electing one of the three options at Waitoa under clause 10.2.1. It would need to use “best endeavours” under 10.2.3 because it would be unable to meet the site specific condition in clause 10.2.1. For this reason, putting the argument on behalf of the second defendant on the highest plane by assuming both defendants had identical redeployment rights, the Court considered it was not open to the plaintiff to include the second defendant in the closed pool. (paras 56-57)
(7) The requirements of clause 10.2.1 compelled the plaintiff to appoint the first defendant to the new role under either the second or third options contained in clause 10.2.1. (para 57)
Result: Challenge dismissed ; Costs reserved
Statutes considered:
ERA s 4
ERA s 9
Cases referred to in judgment:
Bates v BP Oil New Zealand Ltd [1996] 1 ERNZ 657
Hansells (NZ) Ltd v Ma AC 53/07, 14 September 2007
Smith v Sovereign Ltd (owned and operated by the ASB Bank) [2005] ERNZ 832
Unkovich v Air New Zealand Ltd [2005] ERNZ 336
Westpac Banking Corporation v Money [2004] 1 ERNZ 576
Wholesale Distributors Ltd v Gibbons Holdings Ltd [2007] NZSC 37
Other workers/site names: Ropata
Pages: 4
[974345]
Port of Napier and Anor v Maritime Union of New Zealand and Ors
WC 32A/07
Heard: 11 Dec 2007,
Judgment Date: 17 Dec 2007
Court/Authority: Colgan CJ
Appearances: P Zwart, S Bradshaw ; SR Mitchell, GC Davenport, G Ballara
INJUNCTION – Reasons for refusing interlocutory injunctions to restrain strike and breaches of contract – Plaintiff instructed crane driver employees to train employees of new contractor – Crane drivers objected – Plaintiff submitted refusal would be an unlawful strike – Plaintiff also believed defendant maritime union intended to mount picket line in protest and that defendant transport union had instructed its members not to cross picket line – Plaintiff submitted actions would be an unlawful strike – HELD – Plaintiff had no more than a weakly arguable case that refusal to participate in training was an unlawful strike – Refusal may be justified on health and safety grounds – Difficult to decide prospectively whether picket would be unlawful – Plaintiff had not established picket should be restrained – Dispute should be resolved as employment relationship problem – Parties directed to mediation – Injunctions refused – Crane drivers and stevedores
This judgment recorded the reasons for an unsuccessful application for interlocutory injunctions to restrain the defendant unions from inciting the plaintiff’s employees not to cross a picket line and from restraining certain employees from refusing to train new contractors.
The plaintiff operated the port at Napier handling various types of containerised cargo and contracted out some parts of its operations. The containers were moved by large mobile cranes. A new contractor (“ISOL”) was engaged by tender in 2007. The previous contractor’s term was to expire on 31 December 2007.
In early December 2007, the plaintiff’s nine crane driver employees were directed to start training the employees of the new contractor company. The crane drivers objected on several grounds, including health and safety.
Previous to this the Maritime Union of New Zealand Inc (‘MUNZ’) had issued a press statement which alluded to industrial action to counter the actions of the plaintiff. The plaintiff became concerned that MUNZ might mount a picket at the entrances of the port and that the Rail and Maritime Transport Union Inc (‘RMTU’) had directed its members not to cross such a picket line. The plaintiff initiated the present proceedings out of concern that a picket would be mounted. MUNZ undertook that no picket would be put in place pending the decision of the Court.
The plaintiff argued that MUNZ members intended to form a picket line and that MUNZ and RMTU had encouraged the plaintiff’s employees not to cross any such picket line. The plaintiff submitted that 92 listed employees intended to refuse to cross any picket line and that this would amount to a strike under s 81 of the Employment Relations Act 2000 (“ERA”) and as a result, would breach ss 83, 84 and 90 ERA. Further, that nine named crane drivers had taken part in unlawful strike action by refusing to provide training to the new employees of the contractor. The plaintiff also argued that MUNZ had interfered with contractual relations by inducing the plaintiff’s employees to breach their employment agreements.
Held
(1) There was only a weakly arguable case of union instigation or promotion of the crane drivers’ refusals to train ISOL employees. RMTU’s support of its members, more particularly in resisting the present proceedings and the demands that led to them, could not constitute actionable unlawful conduct by the union. Where resistance to the employer’s demands is based, among other things, on a genuine dispute about the interpretation of the collective agreement, union support for that stance or for other legal grounds of resisting those demands, cannot be actionable independently against the union. (para 22)
(2) Although it was arguable that the refusal by the crane drivers was due to a “common understanding” under s 81(1)(b), the plaintiff did not have any more than a weakly arguable case that the act of refusal met the statutory tests under s 81(1)(a) claimed by the plaintiff. A refusal to operate the mobile cranes as part of a mock cargo moving exercise was not a discontinuing of their drivers’ employment, whether wholly or partially, or a reducing of its normal performance under subs (1)(a)(i). Nor was it the refusal or failure to accept engagement for work in which the drivers were usually employed. That was because no such training had taken place for more than 2 years and even then was probably in very different circumstances. (paras 24–25)
(3) The plaintiff did not have any more than a weak arguable case that it was entitled contractually to direct the crane drivers to participate in training of ISOL employees in associated but separate stevedoring work. A refusal to comply with such directions would likely not amount to a strike. (para 31)
(4) Even if the crane drivers’ refusal did arguably meet the statutory definition of strike action, the plaintiff could not establish more than a weakly arguable case that the defendants could not reasonably invoke s 84 of the Employment Relations Act 2000. If a s 84 defence might be available, then no question of notice of such a strike under s 90 would arise. Common sense must also dictate that if there is a question of health and safety under s 84 that might justify an otherwise unlawful strike, Parliament could hardly have intended that such a risk continue for at least 14 days of a notice period before the health and safety justification was applicable. (paras 32, 37)
(5) At the heart of this issue was a dispute about the interpretation of the parties’ collective agreement and the rights and obligations of the parties under it. Such disputes should be resolved not by unilateral enforcement by the employer of its claimed rights, backed up by the coercive power of a court injunction, but by reference to the statutory problem solving mechanisms including mediation and investigation by the Employment Relations Authority. (para 41)
(6) Industrial picketing may include lawful and unlawful elements and it is difficult to tell, prospectively and in an information vacuum, whether a particular picket will be lawful or may escalate into illegality. The picket in question would seek to persuade, by information and reasoned discourse, other persons to support the views of the picketers and to manifest that support by bringing economic pressure to bear on the target of the picket. Such a strategy would be protected by rights of free speech and to assemble and protest peacefully. It was too premature to conclude that any picketing would be unlawful and should be nipped even before it was allowed to bud. A lawful picket, if it takes place, could not make the pickets liable as tort feasors. (paras 54, 55, 57)
Result: Applications dismissed ; Parties directed to mediation ; Orders accordingly ; Costs reserved
Statutes considered:
ERA s 4
ERA s 81
ERA s 81(1)(a)
ERA s 81(1)(a)(i)
ERA s 81(1)(a)(iii)
ERA s 81(1)(b)
ERA s 83
ERA s 83(b)
ERA s 84
ERA s 90
ERA s 90(2)(b)
ERA s 188(2)(b)
ERA Schedule 1
Cases referred to in judgment:
Collins v Independent Fisheries Ltd [1992] 3 ERNZ 924 (CA)
Sky Network Television Ltd v Duncan [1998] 1 ERNZ 354
Sky Network Television Ltd v Duncan [1998] 3 ERNZ 917 (CA)
Pages: 3
[974347]
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