Nzaepmu v Sca Hygiene Australasia Ltd Ak
| Jurisdiction | New Zealand |
| Judge | B S Travis |
| Judgment Date | 10 June 2010 |
| Court | Employment Court |
| Docket Number | ARC 96/08 |
| Date | 10 June 2010 |
In the Matter of a Challenge to a Determination of the Employment Relations Authority
[2010] NZEMPC 73
ARC 96/08
IN THE EMPLOYMENT COURT AUCKLAND
Challenge to a determination of the Employment Relations Authority dealing with how shift workers should be paid for public holidays over the Christmas/New Year period when the defendant's operations were closed — the Authority held there was a notional work pattern during the shutdown which made the public holidays, days that would otherwise have been working days and that the defendant had correctly paid the relevant pay — whether the days in question would have been working days under s49 Holidays Act 2003 (payment if employee does not work on public holiday) — if they were workingdays, what was the relevant daily pay.
Marie McInally, Counsel for Plaintiff
David France, Counsel for Defendant
JUDGMENT OF JUDGE B S Travis
This is a challenge to a determination of the Employment Relations Authority dealing withhow particular employees should be paid for public holidays over the Christmas/New Year period when the enterprise in whichthey worked has been shut down during that period. In particular, the Authority identified two issues for determinationin that forum. The first was whether the days in question would otherwise have been working days for the employees pursuanttos 49 of the Holidays Act 2003 (the Act). The second question, which also arose under s 49, was, if they would otherwise have been working days, what was the relevant daily pay for those days?
The Authority found there was a notional work pattern during the shutdown which made the public holidays days that would otherwise have been working days and the defendant (SCA) had correctly paid the relevant daily pay. The plaintiff union has challenged this determination and in response SCA has argued that the public holidays which fell during the shut down were not days that would otherwise have been working days and therefore there was no requirement to determine and pay the relevant daily pay.
The parties have reached an agreed statement of facts from which the following summary is taken. Until earlier this year SCA operated a plant manufacturing disposable nappies at Swanson, described as the “diaper site”, to which this dispute relates. At the Swanson site there were essentially two groups of hourly paid employees. The first group comprised approximately 38 employees who were employed five days per week, Monday to Friday for eight hours a day.
The second group, which is affected by the present dispute, comprised approximately 58 employees who worked 12 hours per shift. Some worked a fixed day roster, others worked a fixed night roster. These were all worked on a four day/night on, four day/night off rotating roster, except for four electricians who rotated shifts between day and night. Each shift cycle took eight weeks to complete on the four on four off pattern. In some weeks a person would work 36 hours and in others 48 hours. On average they worked 42 hours per week over the eight week cycle and this was managed by equalising their wages at 40 ordinary hours plus two hours at 1.25 overtime rate per week.
The Swanson site began 12 hour shifts in 1993 and before that the employees had worked on a five day per week, eight hour per day roster. When the 12 hour x4 x4 roster was introduced in 1993 an appendix was negotiated into the collective employment contract covering how the diaper site would operate in the future. This was known as the “Swanson Road Variance”(appendix A). This appendix was carried forward into each subsequent collectivecontract or collective agreement, with a further clause being added during the 2001 round of negotiations (clause 6.8.4of appendix A). The most recent collective agreement to which appendix A is annexed is the SCA HygieneAustralasia – Treasures Babycare Swanson Collective Employment Agreement 2008—2011 (the CA). Appendix A has simply been rolled over as it had been in previous years and apparently there have been no negotiations concerning the effectof the 2003 Act.
Appendix A provides for an annual close down during the Christmas period. At the start of the close down period the roster is suspended and at the end of the close down period the roster is reinstituted from the point at which it had been suspended. No employee is required to work during the close down period and they have only done so in exceptional circumstances on agreed terms. All days taken as annual leave by 12 hour workers during the Christmas close down period are deemed, by appendix A, to be of eight hours duration rather than 12 and the employees' leave balances are debited by eight hours for each day. Outside of that period, days taken as leave by 12 hour workers would be debited by 12 hours for each day.
Appendix A also provides for each of the four public holidays during the close down period to be paid at eight hours per day.
In February 2007 the union raised a dispute claiming that the 12 hour workers should be paid at the rate of 12 hours per day as the relevant daily pay for each of those annual holidays.
Relevant sections of the Holidays Act 2003 that must be interpreted and applied to the facts are:
6 Relationships between Act and employment agreements
(1) Each entitlement provided to an employee by this Act is a minimum entitlement.
(2) This Act does not prevent an employer from providing an employee with enhanced or additional entitlements (whether specified in an employment agreement or otherwise) on a basis agreed with the employee.
(3) However, an employment agreement that excludes, restricts, or reduces an employee's entitlements under this Act-
(a) has no effect to the extent that it does so; but
(b) is not an illegal contract under the Illegal Contracts Act 1970.
…
9 Meaning of relevant daily pay
(1) In this Act, unless the context otherwise requires, relevant daily pay, for the purposes of calculating payment for a public holiday, alternative holiday, sick leave, or bereavement leave,-
(a) means the amount of pay that the employee would have received had the employee worked on the day concerned;
…
…
(4) However, an employment agreement may specify a special rate of relevant daily pay for the purpose of calculating payment for a public holiday, alternative holiday, sick leave, or bereavement leave if the rate is equal to, or greater than, what would otherwise be calculated under subsection (1) or subsection (3).
…
29Meaning of closedown period
In this section and sections 30 to 35, closedown period means a period during which an employer customarily-
(a) closes the employer's operations or discontinues the work of 1 or more employees; and
(b) requires his or her employees to take all or some of their annual holidays.
30 Frequency of closedown periods
(1) For the purposes of sections 31 to 35, the employer may have only 1 closedown period in any 12-month period.
(2) However, subsection (1) does not prevent an employer and employee from agreeing-
(a) that the employer may close his or her operations and discontinue the work of the employee at other times; and
(b) on the arrangements that will apply during those times.
(3) If subsection (2) applies, sections 32 to 35 do not apply.
31Employer may have different closedown period for each part of business
To avoid doubt, an employer may have different closedown periods for each separate part of the employer's business.
32 Requirement to take annual holidays during closedown period
(1) An employee who is entitled to annual holidays at the commencement of a closedown period must, if required to do so by his or her employer, take annual holidays during the closedown period whether or not the employee agrees to take the holidays.
(2) An employee who is not yet entitled to annual holidays at the commencement of a closedown period must, if required to do so by his or her employer, discontinue the employee's work during a closedown period.
(3) If this section applies, the employer must give the employee not less than 14 days' notice of the requirement totake the annual holidays or to discontinue the work (as the case may be).
…
40 Relationship between annual holidays and public holidays
(1) A public holiday that occurs during an employee's annual holidays must be treated as a public holiday and not as part of the employee's annual holidays.
(2) Subsection (3) applies if –
(a) the employment of an employee comes to an end; and
(b) the employee is entitled to annual holidays; and
(c) the employee has not taken the annual holidays or has taken only some of them.
…
49 Payment if employee does not work on public holiday
If an employee does not work on a public holiday and the day would otherwise be a working day for the employee, the employer must pay the employee not less than the employee's relevant daily pay for that day.
…
12 Determination of what would otherwise be working day
(1) This section applies for the purpose of determining an employee's entitlements to a public holiday, an alternative holiday, to sick leave, or to bereavement leave.
(2) If it is not clear whether a day would otherwise be a working day for the employee, the employer and employee must take into account the factors listed in subsection (3), with a view to reaching agreement on the matter.
(3) The factors are-
(a) the employee's employment agreement:
(b) the employee's work patterns:
(c) any other relevant factors, including-
(i) whether the employee works for the...
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