Mana Coach Services Ltd v The New Zealand Tramways and Public Transport Employees Union Inc. Nzempc Wellington

• Jurisdiction: New Zealand
• Judge: G L COLGAN
• Judgment Date: 02 April 2015
• Court: Employment Court
• Docket Number: WRC 4/08
• Date: 02 April 2015

In The Matter Of a challenge to a determination of the Employment Relations Authority

BETWEEN

Mana Coach Services Limited

Plaintiff

and

The New Zealand Tramways and Public Transport Employees Union Inc

Defendant

[2015] NZEmpC 44

WRC 4/08

IN THE EMPLOYMENT COURT WELLINGTON

Claim for arrears of wages — the proceeding had been remitted to the Employment Court by the Court of Appeal — union had given an employer (bus company) notice of a strike the following day — the employer reorganised rosters so that none of the striking drivers were rostered for the hours of the strike — the employer also arranged alternative drivers and had cancelled some services, which represented a financial loss to it — eight minutes before the strike was to begin the union gave notice that it was calling it off and that the drivers were ready and willing to perform their duties and expected to be paid for that time — the aim was to cause financial loss to the employer by forcing it to either pay the drivers, notwithstanding they were not working, or to cancel the replacement drivers while still having to pay them — consideration of the application of the “no work, no pay” doctrine from Miles v Wakefield Metropolitan District Council — whether there had been a second or substituted strike — whether a breach of s4 Employment Relations Act 2000 (good faith) could be invoked as a shield to defend against the claim for arrears of wages where the employee had acted in bad faith — whether s4 Wages Protection Act 1983 prohibited the employer from short-paying the drivers' wages.

Appearances:

H Fulton and S-J Davies, counsel for plaintiff

P McBride and T Kennedy, counsel for defendant

JUDGMENT OF CHIEF JUDGE G L COLGAN

Issues

1 In accordance with this Court's interlocutory judgment issued on 2 August 2012 1 and the directions of the Court of Appeal in New Zealand Tramways and Public Transport Employees Union Inc v Mana Coach Services Ltd, 2 the following is the question for decision or re-decision by this Court:

… to determine whether the bad faith which [the Employment Court] has found was present can operate in some way other than through the equity and good conscience jurisdiction to disentitle the employees from payment for the hours at issue.

2 As set out at [7]–[8] of this Court's interlocutory judgment, this was expanded upon by Arnold J at [52] of the reasons for judgment of the Court of Appeal as follows:

… It may be, for example, that there is scope within New Zealand employment law for the application of the doctrine discussed by the House of Lords in Miles v Wakefield Metropolitan District Council, particularly given the 2004 amendments to s 4 of the ERA. The question will be whether this is consistent with the relevant collective agreement and employment contracts, as well as the New Zealand legislative scheme. In any event, these are matters for further consideration by the Employment Court.

3 Arnold J referred, in a footnote, to a consideration of a number of New Zealand judgments including Kelly v Tranz Rail Ltd; 3 Witehira v Presbyterian Support Services (Northern); 4 Bickerstaff v Healthcare Hawkes Bay Ltd; 5 Postal Workers Association v New Zealand Post Ltd; 6 and Thompson v Norske Skog Tasman Ltd. 7 As will be disclosed subsequently, however, most of these judgments or determinations are of limited value in deciding the apparently unique question in this case because although they refer to Miles, 8 they deal with actual strikes or lockouts rather than notified but cancelled events. There are, however, other New Zealand judgments, albeit older, that are relevant to this question.

4 To say that the contentious issues in this case are complex and difficult would be an understatement. Decision of the case has seen the Employment Relations Authority reach one view, a contrary judgment from this Court, and three Judges in the Court of Appeal all disagreeing about at least one aspect of those controversies, including about the way in which they should be resolved.

5 Even the approach to the re-decision of the case, following the Court of Appeal's direction, was the subject of sharp conflict between the parties and has been no less difficult. Mr McBride for the defendant submitted that the plaintiff could succeed only if I were to find that the bad faith of the Union and its employee members should disqualify the employees from recovering what must otherwise be

their entitlement to wages. Mr Fulton for the plaintiff, on the other hand, argued for a broader interpretation of the Court of Appeal's direction. He submitted that I should determine whether the bad faith conduct of the Union (imputed to its employee members) should defeat their claims to remuneration for work that they did not perform on 1 August 2007 as a result of the very belated cancellation of their notice of intended strike action on that date

6 As noted in the interlocutory judgment of 2 August 2012, I would have preferred to have adopted the broader approach proposed by Harrison J in the Court of Appeal as the appropriate way of re-determining the case. Harrison J was, however, in a dissenting minority of the Court of Appeal on this point and I am bound to follow the directions given by the majority of the Court (Chambers and Arnold JJ) on this issue.

7 As I also noted in the interlocutory judgment of 2 August 2012, the Court is confined by the parties' pleadings. The plaintiff challenged the Authority's determination 9 which found in favour of the Union, electing not to do so by hearing de novo. The scope of the challenge, from which this is a judgment, is determined by the particular issues put before the Court by the plaintiff in its statement of claim. In these circumstances it is not for the Court to re-determine all of the issues that were before the Authority, but only those nominated by the company in its challenge. The other issues that were before the Authority remain decided by its determination.

8 The following pleading points were the subject of Mana's non-de novo challenge as recorded by the Court of Appeal at [15] of the judgment of Harrison J: “The Authority wrongly found or had no or insufficient regard to the circumstances by which drivers' rosters are changed.” Also at the same paragraph in Harrison J's judgment, he noted that the following were put in issue by Mana on the challenge to this Court, as elements of what it says was error on the part of the Authority relating to the withdrawal of the 1 August 2007 strike notice:

(ii) Disentitlement of employees to wages not rostered for work.

…

(iv) Employee liability for actions taken contrary to their obligations of good faith, fidelity and loyalty.

9 Finally, at [16] of the judgment of Harrison J, the Judge recorded the relief sought by Mana in this Court as being an order that:

The drivers for whom strike notice was given for strike action on 1 August 2007 have no entitlement to wages in respect of the period for which the strike was notified, namely the period from 2.30 pm to 6.30 pm on 1 August 2007.

Relevant facts

10 I will only summarise the essential facts: previous judgments contain more detailed descriptions of them.

11 The duties that Mana's bus drivers were required to perform were set by a rostering system that commenced with the posting by the employer of what was called a matrix roster. This anticipated the drivers' “runs” which were numbered and consisted of details such as times and days to be worked and routes to be driven. So, for example, a driver might know from the matrix roster several months ahead that he or she was scheduled to operate run number 17 on a particular day. This run number would determine the driver's start and finish times as well as the routes to be driven. The matrix roster was constructed taking account of known or anticipated need for passenger bus services, requests for leave, adherence to maximum statutory driving hours and other such factors.

12 Variables, which resulted in alterations to the matrix roster arising within the period between its posting and particular days of duty, might include exchanges of duties between individual drivers, late requests for leave, absences for illness, ad hoc bus charters, and a range of other contingencies unforeseen when the matrix roster was constructed. These contingencies meant that actual operative rosters posted might differ from the matrix, even up to a very short time before any particular matrix-rostered duty was to begin. So, as noted in the Court's first substantive judgment, drivers were required to check the posted rosters whenever they were in their depots. The collective agreement and the company's handbook which was incorporated expressly into the collective agreement so that it was contractual, allowed for the foregoing process of changes to the roster. Nevertheless, as a matter of good practice and employee relations, the company attempted both to minimise late roster changes and to ensure that these did not reduce the amount of work (and, therefore at least in the short term, earnings) available to its permanent and full-time drivers.

13 The intended strike notified to the company on 31 July 2007 was to take place on the following day between the hours of 2.30 pm and 6.30 pm. However, those hours did not coincide precisely with the duty times of all union member drivers. Some drivers were rostered to begin work early on that day but to finish work during the period of the notified strike, or later. Some drivers were scheduled to start work during the four-hour period of the strike and finish after 6.30 pm. Other drivers were scheduled to work a broken shift on that day, meaning that they would work for a period in the morning before being “booked off” for several hours and then recommence driving duties during the period of the notified strike. Others were scheduled to begin work at the same time as the...