EMPLOYMENT CASES SUMMARY March 2008 - NZ Department of Labour

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Bachelor & 34 Ors v Secretary for Justice, Minstry of Justice

26 Apr 2007, D Asher, WA 61/07, (16 pages)
DISPUTE - Applicants submitted new Remuneration Policy misapplied - Respondent contended Policy, and associated obligations, overtaken by agreement reached with relevant employees to accept prescribed pay increases - Communications from respondent did not suggest acceptance of percentage increases entailed giving up Policy as term of employment - Ministry obliged to analyse market remuneration data in relation to applicants' salary ranges and publish results - Ministry obligations to adjust salary ranges set out in Policy, including application of results of market data - Obligations to obtain funding set out in Policy and in statutes applicant to respondent - Respondent obliged to communicate sufficient information to applicants on application of Policy to meet obligations of good faith - Agreed percentage increases did not vary contractual obligations owed by respondent to applicants under policy - Applicants that had not agreed to specifically incorporate new Policy argued new remuneration structure still applied to them -However, they were not party to it and could not claim its benefits - Despite being called a "policy" it was not expression of respondent's right to manage and it did not extend to them by way of some general administrative principle - Court staff

Result: Questions answered ; Costs reserved

Eastern Bay Independent Industrial Workers Union v Pedersen Industries Ltd

4 Jul 2007, R A Monaghan, AA 202/07, (5 pages)
DISPUTE – Whether entitlement to additional week’s leave crystallised on dates identified in parties’ collective employment agreement (“CEA”), or began to accrue from those dates – Authority heard evidence from negotiators of CEA – Issue not expressly discussed during negotiations – First part of clause made it clear entitlement became due on completion of complete year’s work – However, “note” attached to clause not well-worded – On its face, “note” no more than statement of when clause came into effect and did not address commencement date of qualifying period – Additional week’s leave available to employees who worked complete year on qualifying shift – Comments attributed to respondent’s director during negotiations appeared to amount to instruction to give union what it wanted on issue – Words and circumstances of CEA supported applicant’s interpretation – COMPLIANCE ORDER - Applicant had sought compliance with CEA – Compliance order discretionary – Parties genuine dispute now resolve – No reason to assume respondent would fail to act – Compliance order not necessary – Application adjourned

Result: Question answered in favour of applicant ; Orders accordingly ; Costs reserved

Eketone v Diagnostic Medlab Services Ltd

28 May 2007, L Robinson, AA 160/07, (10 pages)
DISPUTE - Applicant sought reimbursement of travel expenses - When employment began parties agreed on entitlement for excess travel - Applicant regarded agreement as continuing term of employment - Respondent argued not entitled to allowance consequent upon membership of union and collective employment agreement ("CEA") - Respondent queried payment when CEA first entered into, but continued to pay for five years as applicant adamant had special arrangement - Respondent later gave notice considered payments made in error and would pay CEA allowance only - CEA contained provision stating terms were minimum entitlement and possible to agree better terms - Respondent argued CEA negotiated to rationalise terms among employees and no additional agreement entered into to preserve applicant's entitlement - Completeness clause only related to inclusion in CEA, applicant's entitlement based on oral agreement - Alternatively, entitlement remained valid but term of CEA breached - Individual employment terms could survive operation of CEA because mutual agreement recognised irrespective of when agreement reached - Mutually agreed individual terms remained operative, binding and effective until revoked by mutual consent - Travel allowance mutually agreed at start of employment and legitimate term of applicant's employment - Not extinguished by any CEA and entitled to enforce it - Respondent had opportunity to determine legitimacy of entitlement when first queried payment with applicant - Instead, affirmed entitlement and waived right to dispute it - All of applicant's claims approved and each approval separate and independent affirmation of entitlement - Respondent had offered applicant one off payment in exchange for making further claims in accordance with CEA - Offer made in recognition of legitimate and continuing contractual entitlement - Contrary to equity and good conscience to deny applicant entitlement - Respondent required to pay applicant in accordance with entitlement - Phlebotomy technician

Result: Question answered in favour of applicant ; Damages (Quantum to be determined) ; Costs reserved

New Zealand Nurses Organisation Inc. v Waikato District Health Board

2 Apr 2007, D King, AA 100/07, (3 pages)
DISPUTE - Parties disagreed on date of implementation of annual salary increments - Parties recently concluded multi employer collective agreement ("MECA") although term of it began previous year - Applicant argued automatic salary increments should have taken place from date MECA came into force - Respondent submitted employees moved to new salary scale during term of agreement in accordance with appendix and anniversary date for increases was date all employees finished moving - Words clear on face of document but Authority also considered factual matrix to test its view of meaning - Authority took into account parties aim to achieve common salary scale and lump sum payments made to employees who received less than 10 percent pay increase over term of MECA - Some recipients would have been disentitled to payment if applicant's date used - Common scale clearly subject to provisions in appendix - Transition to common scale completed during term of MECA - Common scale provided for automatic increments - No provision in MECA for automatic increments to occur before common scale attained - Respondent's interpretation correct

Result: Question answered in favour of respondent ; Costs reserved

NZ Amalgamated Engineering, Printing & Manufacturing Union Inc and Ors v Carter Holt Harvey Ltd

26 Apr 2007, D King, AA 122/07, (7 pages)
BREACH OF CONTRACT - DISPUTE - Applicants contend respondent breached individual employment agreements ("IEAs") of second and third applicants by failing to comply with requirement to accord priority for re-employment after they were made redundant - Applicants not appointed to vacancy as respondent considered did not have required skills and priority period had lapsed - Applicants' IEAs included obligation to provide re-training and no time limit on priority - Respondent submitted changes to re-employment provisions in subsequent collective employment agreements ("CEAs") applied retrospectively to applicants, despite fact not covered by bargaining - Rights created under IEA not forfeited by subsequent CEA to which holders of those rights not party - Could not legitimately impose variations on applicants - Respondent breached applicants' IEAs by failing to give them priority and by failing to give training to overcome any skill deficit - Respondent ordered to comply with IEAs - PENALTY - Applicants claimed respondent wilfully attempted to appoint someone other than second and third applicants to vacant position after being notified of claim for compliance - Making permanent appointment in circumstances where rights of parties at issue not conducive to maintaining good employment relationship with any of applicants - Breach of duty of good faith - However, no penalty awarded as respondent genuinely believed position correct and agreed last minute to leave reappointment issue in abeyance until matter determined

Result: Application granted ; Orders accordingly ; Costs reserved

Talbot v Air New Zealand Ltd

16 May 2007, R Arthur, AA 147/07, (7 pages)
DISPUTE - Applicant sought declaration regarding status of accommodation arrangements when required to stay in London while on duty - Respondent provided alternative accommodation when applicant considered staying near United States Embassy a safety risk - Argued provision of alternative accommodation became term of employment that respondent unable to end without agreement - Respondent submitted complied with all requirements to provide appropriate accommodation and ended alternate arrangement after assessing security risk of staying near embassy as low - Denied arrangement amounted to term of employment - Respondent's response to concerns raised by pilots was open offer to make different accommodation arrangements - Language used, and subsequent conduct of parties, meant arrangement amounted to individual term of applicant's employment - Change required agreement - Respondent's submission no consideration for variation and terms uncertain not accepted - Respondent's argument applicant's concerns did not meet objective standard required for reasonable fears for health and safety accepted - However, alternative offered in response to subjective concerns - Submission applicant should have reduced risk by trying to get fewer tours to London rejected - Respondent's unilateral termination of arrangement breached term - Remedies - Applicant quantified loss as being costs he incurred staying at alternate hotel after arrangement ended - Respondent to reimburse applicant at rate would have paid under arrangement - Exchange rate to be taken at midday on date of determination - By time of investigation meeting respondent advised would use new hotel for applicant's class of pilot, no further orders required - Non-publication order relating to certain evidence on security arrangements - Pilot

Result: Question answered in favour of applicant ; Damages (Quantum to be determined) ; Orders accordingly ; Costs reserved