Lean Meats Oamaru Ltd v New Zealand Meat Workers and Related Trades Union Incorporated

JurisdictionNew Zealand
CourtCourt of Appeal
Judgment Date12 Oct 2016
Neutral Citation[2016] NZCA 495
Docket NumberCA629/2015

[2016] NZCA 495

IN THE COURT OF APPEAL OF NEW ZEALAND

CA629/2015

Between
Lean Meats Oamaru Limited
Appellants
and
New Zealand Meat Workers and Related Trades Union Incorporated
Respondents
Counsel::

M F Quigg and J L Bates for Appellant

P B Churchman QC and C M Kenworthy for Respondent

Appeal against an Employment Court (EC) decision that the phrase “paid rest breaks” in s69ZD Employment Relations Act 2000 (ERA) (Entitlement to rest breaks and meal breaks) required rest breaks to be paid at the same rate for which the employee would be paid to work — the appellant contended that the ERA permitted an employer to pay different rates for different types of work and to include different rates in collective agreements — the appellant submitted that “paid” could be seen as meaning “paid at the amount agreed between the parties” — it argued this construction would be consistent with the principle of freedom of contract — whether s69ZD ERA required rest breaks to be paid at the same rate for which the employee would be paid to work.

The issue was whether s69ZD ERA required rest breaks to be paid at the same rate for which the employee would be paid to work.

Held: The text of s69ZD indicated nothing more than a payment being made for the 10-minute rest break. The word “paid” was not qualified or explained. Theoretically a payment of one cent could meet the requirement as there would be a sum “paid”. Obviously, that was not the intended meaning.

On the other hand, the section concerned the “employee's work period”. The entitlement for a “paid rest break” arose when an employee had been working for more than a certain period of time. Given that the required “break” was from the employee's “work” and it was to be “paid”, a natural inference was that what was to be paid for the break was that which was being paid for the work at the time. The worker was paid through the break as if it had not been taken.

Parliament's intention in enacting the minimum standards in s69ZD was to provide for the wellbeing of employees by requiring them to take specified rest and meal breaks during work periods. Parties were not permitted to contract out of the entitlement. If employers paid employees less than the amount they would otherwise be paid for the break period, employees would lose money, and might choose to take no break at all (there was no requirement for employees to take their rest breaks). If employees did not take their rest breaks, the purpose of improving their work-life balance was defeated. The purpose of this part of the ERA was only met if employees were not penalised for taking a break.

The concept of a rate depending on the agreement of parties would leave a potential lacuna if they could not agree as the section would be unworkable. In contrast, the section worked well without straining the language or the practical realities, if the interpretation of “paid” as paid at the rate the employee would be paid to work at that time, applied. The basic rate of pay remained open to negotiation between the parties.

The same reasoning applied to the wording of s69ZD after the 6 March 2015 amendment.

There was no need to add words to s 69ZD, as the meaning derived from the use of the word “paid”. Reading the word in its context, it could only mean paid at the existing rate.

An argument that this could lead to practical problems in calculating rest break payments for employees who could be on rates of pay that varied through the day was unconvincing. In most cases, where a single rate was being paid, there would be no difficulty at all in making the calculation. Even when there were variable rates, employees would have been receiving a rate of pay at the time of the break and a payable rate could be discerned.

The relevant provisions of pt 6D of the ERA required rest breaks to be paid at the same rate for which the employee would be paid to work.

Appeal dismissed.

JUDGMENT OF THE COURT

JUDGMENT OF THE COURT

A The appeal is dismissed. The Employment Court did not err in deciding that the relevant provisions in pt 6D of the Employment Relations Act 2000 required rest breaks to be paid at the same rate for which the employee would be paid to work.

B The appellant must pay the respondent costs for a standard appeal on a band A basis and usual disbursements

(Given by Asher J)

Introduction
1

This appeal concerns the meaning of the phrase “paid rest breaks” in s 69ZD of the Employment Relations Act 2000 (the ERA). In the Employment Court Judge Corkill found the section required rest breaks to be paid “at the same rate for which the employee would be paid to work”. 1

2

The appellant, Lean Meats Oamaru Ltd (Lean Meats) challenges that finding in this appeal. It claims the Court has rewritten the section. It contends that the ERA permits an employer to pay different rates for different types of work and to include different rates in collective agreements. It is not bound to pay rest breaks at the current work rate, and it is open to the parties to agree a special rate.

3

This Court granted Lean Meats leave to appeal on the following question of law: 2

Did the Employment Court err in deciding that the relevant provisions in Part 6D of the Employment Relations Act 2000 required rest breaks to be paid at the same rate for which the employee would be paid to work?

Background
4

The issue before us arose out of the negotiation of a new collective agreement between Lean Meats, which operates a meat works in Oamaru, and the respondent, the New Zealand Meat Workers and Related Trades Union Inc (the Union), whose members are employed at the Oamaru site.

5

The new collective employment agreement they negotiated in 2013 contained a rest and meal breaks clause that provided:

8
    REST PERIODS AND MEAL BREAK a. Employees will be allowed three breaks during any one day, two fifteen minute breaks and a half hour lunch break. The timing of the breaks shall be scheduled to suit operational needs. 1 1 Lean Meats Oamaru Ltd v New Zealand Meat Workers and Related Trades Union Inc[2015] NZEmpC 176 [Employment Court decision] at [69]. 2 Lean Meats Oamaru Ltd v New Zealand Meat Workers & Related Trades Union Inc [2016] NZCA 137. b. A daily recovery payment of $7.00 will be paid to cover the two ten minute breaks. If a short day occurs and there has only been one break taken the full payment of $7.00 will be paid. c. On Saturday processing only one break will be paid.
6

Lean Meats paid affected employees a rest break allowance initially of $6.87 per day, increased to $7 per day from 1 July 2013. The Union claimed that this clause in the collective employment agreement (which it never signed) did not comply with s 69ZD of pt 6D of the ERA. 3

7

The claim came before the Employment Relations Authority, and the Union succeeded in its claim for payments at a higher rate than those paid by Lean Meats. 4 Lean Meats then unsuccessfully challenged the Authority's determination in the Employment Court.

8

Judge Corkill in his decision separately addressed the periods from 1 March 2013 to 5 March 2015 and from 6 March 2015 onwards. This is because there had been an amendment to s 69ZD. In his decision, he focused on the words in the section statute and the other provisions in pt 6D. The Judge noted that pt 6D did not provide for payments being agreed or made at a rate lower than the rate paid for work but did in contrast provide for the possibility of additional or enhanced breaks. 5 There were no alternative options for the payment of rest breaks expressed. 6 He considered the purpose of the provisions, which was to provide for the wellbeing of employees by requiring rest breaks during work and considered that being paid at the lesser rate could thwart this statutory purpose. 7 He concluded that Parliament's intention was for rest breaks to be paid at the same rates for which the employee would be paid for work. 8

Provisions of the Employment Relations Act 2000
9
  • For the period from 1 March 2013 to 5 March 2015, s 69ZD provided:

  • 69ZD Entitlement to rest breaks and meal breaks

    • (1) An employee is entitled to, and the employer must provide the employee with, rest breaks and meal breaks in accordance with this Part.

    • (2) If an employee's work period is 2 hours or more but not more than 4 hours, the employee is entitled to one 10-minute paid rest break.

    • (3) If an employee's work period is more than 4 hours but not more than 6 hours, the employee is entitled to–

      • (a) one 10-minute paid rest break; and

      • (b) one 30-minute meal break.

    • (4) If an employee's work period is more than 6 hours but not more than 8 hours, the employee is entitled to–

      • (a) two 10-minute paid rest breaks; and

      • (b) one 30-minute meal break.

    • (5) If an employee's work period is more than 8 hours, the employee is entitled to–

      • (a) the same breaks as specified in subsection (4); and

      • (b) the breaks as specified in subsections ( 2) and (3) as if the employee's work period had started at the end of the eighth hour.

    • (Emphasis...

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