Nzaepmu v Sca Hygiene Australasia Ltd Ak
 NZEMPC 73
IN THE EMPLOYMENT COURT AUCKLAND
In the Matter of a Challenge to a Determination of the Employment Relations Authority
Marie McInally, Counsel for Plaintiff
David France, Counsel for Defendant
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.
The issues were: whether the days in question would have been working days under s49 Holidays Act 2003 (“HA”) (payment if employee does not work on public holiday) and if they were working days, what was the relevant daily pay.
Held: The HA contemplated closedown periods as evidenced by ss29—35 HA (closedown periods). Section 12 HA (determination of what would otherwise be working day) applied for the purpose of determining what would otherwise be a working day. It was clear that none of the 14 days of the closedown period had otherwise been working days. The parties had reached agreement on the matter in the collective agreement. The factors taken into account included the provisions of the employment agreement; the work patterns; whether the work was available; the rostering system and the reasonable expectation as to whether the employer would work on the day concerned. Here, the agreement between the parties hadbeen carried on without objection for many years and demonstrated that the days that fell within the period of the closedown period were not otherwise working days.
Under s40 HA (relationship between annual holidays and public holidays), the public holidays that occurred during an employee's annual leave were treated as public holidays and not part of the employee's annual leave.
Pursuant to the requirements of s49 HA (payment if employee does not work on public holiday) the employees did not work on the public holidays which fell during the closure but those days would not otherwise have been working days. Therefore, SCA was not obligated to pay the relevant daily pay for those days. However, SCA had reached an agreement with the Union which ensured that the employees would still be paid for those public holidays but on the basis of an 8 hour working day. That gave the employees the right to be paid on all 4 of the public holidays and not merely on the days when they might have been notionally rostered during the closedown period. It also gave the employees the advantage of having only 8 hours per day deducted from their accumulated annual leave entitlements instead of 12 hours per day. In effect, the collective agreement provided the employees with more than the minimum entitlement under the HA in terms of s6(1) HA (relationship between Actand employment agreements) — each entitlement provided to an employee by this Act was a minimum entitlement and that agreement had not reduced those entitlements in terms of s6(3) HA (employment agreements that excludes, restricts, or reduces an employee's entitlements under this Act).
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...
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