Eastern Bay Independent Industrial Workers Union 1995 Inc. v Norske Skog Tasman Ltd

JurisdictionNew Zealand
CourtEmployment Court
JudgeG L Colgan
Judgment Date23 December 2010
Date23 December 2010
Docket NumberARC 127/10

[2010] NZEmpC 165


Judge Colgan

ARC 127/10

In The Matter Of an application for interim injunction

Eastern Bay Independent Industrial Workers Union 1995 Inc
First Plaintiffs


Neville Lloyd Shakes And 9 Others
Second Plaintiffs
Norske Skog Tasman Limited

Lou Yukich, counsel for plaintiffs

Kylie Dunn and Jake Greenleaf, counsel for defendant

Application for urgent interlocutory relief against an alleged lockout of the second plaintiff's and to restrain the defendant from engaging strike breakers — parties were involved in protracted negotiation of a new collective employment contract — second plaintiffs received notification of defendant's intention to replace them with contractors — whether the notification of redundancies was an unlawful lockout in that it compelled them to accept employment with another employer under s82(1)(b) Employment Relations Act 2000 — whether the defendant's proposal to was engage persons to perform the work of the striking employees in breach of s97 — whether the Court had jurisdiction to grant a compliance order for a prospective breach of Part 8 (strikes and lockouts) — whether the lockout was related to bargaining.

The issues were: whether the notification of redundancies was an unlawful lockout in that it compelled the second plaintiffs to accept employment with another employer in breach of s82(1)(b) Employment Relations Act (“ERA”); whether Norske's proposal was to engage employees of another employer and if so, for those persons to perform the work of the striking employees in breach of s97 ERA (performance of duties of striking or locked out employees); and whether the lockout was lawful in that it related to bargaining.

Held: There was a jurisdictional problem with the application for an injunction to prevent a breach of s97 ERA involving the alleged engagement of unlawful strike breakers. Although the Court was empowered under s139 ERA (power of Court to order compliance) to issue a compliance order for non-compliance with any provision of Part 8 ERA (strikes and lockouts) under which s97 ERA fell, there was no power to issue a compliance order on a purely speculative claim of a prospective breach. That left the plaintiffs' claims to restrain by interlocutory injunction, an allegedly unlawful lockout which was a proceeding within jurisdiction.

The plaintiffs had not established that the lockout was unlawful pursuant to s86 ERA (unlawful strikes or lockouts). The plaintiffs did not have an arguable case under 82(1)(b) ERA (meaning of lockout — compelling employees to accept terms of employment). The other employer here was said to be one or more potential contractors from which Norske had invited expressions of interest in providing services currently performed by the second plaintiffs. There was no employment relationship between the second plaintiffs and the unknown contractors so the second plaintiffs could not constitute their ‘employees’ as intended under s83(1)(b) ERA (lockouts lawful if related to bargaining). Section 82(1)(b)(i) ERA also related to accepting terms of employment rather than in engaging in employment which was the plaintiffs concern.

Norske's lockout was related to the bargaining process of the new collective agreement. Norske had initiated the bargaining in part to address the flexibility of work arrangements and the cost of employing the second plaintiffs. It had been frustrated in those attempts and had attempted to bypass the bargaining process by dismissing the employees as redundant and contracting out the services previously performed by them. In that sense, the strategy was clearly related to the bargaining.

It appeared that Norske had covered the striking employees by using existing employees who were not employed principally for the purpose of performing the work of the strikers. The plaintiffs' evidence of a breach of s97 ERA was speculative.

Application dismissed.


G L Colgan

The plaintiffs seek urgent interlocutory injunctive relief against an alleged lockout of the second plaintiffs and to restrain the defendant (NSTL) from engaging other persons to perform the work of the second plaintiffs during a strike and prospective lockout. The plaintiffs also sought an injunction restraining the defendant from “discriminating” against the second plaintiffs on grounds of their union involvement, but did not pursue this at hearing.


On 15 December 2010 the plaintiffs were notified of the defendant?s intention to treat the second plaintiffs as redundant and to replace them with others to undertake the same work. There is then the prospect of dismissal with effect from 7 January 2011 for at least some of the second plaintiffs if they do not agree to “voluntary redundancy” or take up a role elsewhere in NSTL.


The second plaintiffs are employed as control systems technicians (tradespersons) at the Norske Skog Tasman paper mill near Kawerau. Although not all control system technicians are members of the first plaintiff (the EBIIWU), the (now 10) second plaintiffs are members of the union.


The terms and conditions of employment of the second plaintiffs were set, in part, by an expired collective agreement. Pursuant to s 53 of the Employment Relations Act 2000 (the Act), this collective agreement had a deemed continued currency until February 2010 since which time the second plaintiffs have been engaged on individual employment agreements based on the terms of the expired collective agreement.


The EBIIWU and NSTL have been in bargaining since 2006 for a further collective agreement covering the second plaintiffs and four other NSTL employees who are unaffected by this litigation. In January 2009 the parties engaged in facilitated bargaining with a member of the Employment Relations Authority pursuant to s 50A and the following sections of the Act. The Authority?s recommendations to the parties was made in July 2009 and although the union and its members say they accepted these, the bargaining was not settled. There followed further unproductive bargaining and strike action by union members beginning on about 25 August 2010. This has consisted of both complete cessations of work by day shift employees and partial withdrawals of labour by maintenance response team employees.


In October 2010 the union applied successfully for a further bargaining facilitation with the Authority. This has been undertaken and the Authority?s recommendations are still awaited. Inquiries with the Authority indicated that its recommendations to the parties are likely to be provided within the next few days. The union has sought to persuade the employer to continue bargaining with the assistance of a mediator whilst awaiting the Authority?s recommendation but the employer has declined to do so.


Since 2009 NSTL has had a mill-wide project to investigate its more efficient operation. This has included consideration of changes to its electrical and instrument maintenance areas. In May 2010 NSTL began a consultation process about potential restructuring of its maintenance and engineering areas as part of the 2009 “Low Cost Initiative”. There was consultation with the first and second plaintiffs and other employees. This led to the creation of several new employment roles known as “control systems specialists” announced on 23 June 2009. These new positions were to operate initially in conjunction with the longer established control systems trades positions held by the second plaintiffs. Recruitment of the new specialists began in early September 2009 and employees have been engaged on individual employment agreements.


On 22 November 2010 the union and striking employees were invited by the company to attend its presentation about a proposed restructuring of their employment. This was, in essence, to contract out what is described as its “domestic workforce”. NSTL invited consultation about its proposals but the union declined to do so saying that this would amount to a breach of s 97 of the Act. The union?s response was also to invite the employer to submit the parties? dispute to the Court but NSTL declined to agree.


On 15 December 2010 the second plaintiffs received letters from the employer advising them of its decision to replace them with contractors as from 7 January 2011. They were offered options of voluntary redundancy, redeployment in other available roles at the mill, or the possibility of engagement with contractors to do their work.


The issues are:

  • • whether the notification of the redundancies of the second plaintiffs? positions is an unlawful lockout in that it seeks to compel them to accept employment with another employer and does not relate to bargaining between the first plaintiff and the defendant; and

  • • whether the company?s proposal is to engage the employees of another employer and, if so, for these persons to perform the work of the striking employees in breach of s 97 of the Act;


Although I raised with Mr Yukich whether a more appropriate cause of action might be for breach of the requirement in s 32(1)(d)(iii) of the Act not to undermine bargaining by dismissing most of the workforce affected by it during the bargaining, the advocate did not adopt this either in addition, or even as an alternative, to his causes of action. In these circumstances there was no need for Ms Dunn to address that issue and I will say no more about it.


The plaintiffs? proceedings face some technical but nevertheless fundamental jurisdictional problems. These were pointed out to Mr Yukich by Ms Dunn in the course of the first telephone conference call about this proceeding on 15 December 2010 at the same as which I suggested to Mr Yukich that the plaintiffs might benefit from professional advice and representation in this difficult area of law.



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1 cases
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