Postal Workers Union of Aotearoa Incorporated v New Zealand Post Ltd Coa

JurisdictionNew Zealand
CourtCourt of Appeal
JudgeRanderson J
Judgment Date30 Oct 2012
Neutral Citation[2012] NZCA 481
Docket NumberCA327/2011

[2012] NZCA 481

IN THE COURT OF APPEAL OF NEW ZEALAND

Court:

Randerson, White and French JJ

CA327/2011

BETWEEN
Postal Workers Union of Aotearoa Incorporated
First Appellant

and

Linda Street
Second Appellant
and
New Zealand Post Limited
Respondent
Counsel:

S R Mitchell for Appellant

R J McIlraith and G Service for Respondent

Appeal from Employment Court decision on question of law regarding correct approach to calculation of “relevant daily pay” for the purposes of the Holidays Act 2003 — Respondent employed appellant Union members as posties who were required to work reasonable unrostered overtime in excess of standard hours — usually not possible to predict whether posties would be required to work unrostered overtime, or for how long — substantial variation in unrostered overtime worked — respondent did not include any component in the relevant pay calculation for unrostered overtime — whether unrostered overtime for posties was to be included in calculation of “relevant daily pay” for the purposes of s9 Holidays Act (meaning of relevant daily pay) (as it applied prior to 31 March 2011) and, if so, in what circumstances.

At issue was whether unrostered overtime for posties was to be included in the calculation of relevant daily pay for the purposes of s9 HA (meaning of relevant daily pay) and, if so, in what circumstances.

Held: Section 9 HA defined the expression “relevant daily pay” for the purpose of the identified statutory obligations as meaning the amount of pay that the employee would have received had he or she worked on the day concerned. That pay plainly included the pay for ordinary hours of work but was extended to include other forms of remuneration such as productivity or incentive-based payments; payments for overtime etc. This was an inclusive definition so that other forms of remuneration were not excluded if they would have been received had the employee worked on the day at issue. The only specific exclusion was for employer contributions to the employee's superannuation scheme.

The plain intention of the HA was to provide to employees who had not worked on a public holiday or while taking bereavement or sick leave, a statutory entitlement to a minimum daily sum based on the pay the employee would otherwise have received if he or she had worked on the day or days concerned. Relevantly, the Legislature specifically provided that the relevant daily pay was to include payment for overtime if the payment would have otherwise been received on the day concerned. No distinction was drawn in s9(1)(b)(ii) between rostered and unrostered overtime.

The EC had erred in concluding there was an onus on the employee to establish the pay he or she would have otherwise received on the day in question. The onus fell on the employer to meet the statutory obligation to pay the minimum entitlement for the day in question. That included the obligation to establish (or attempt to establish) the pay the employee would have received had he or she worked on the day in question, including any amounts for overtime or other amounts that would have been received in addition to the standard hours of remuneration.

Where there were obvious difficulties in working out the relevant overtime, such as for posties, s9(3) HA (as it applied prior to 31 March 2011) applied, to enable the calculation to be made in a practical and fair way. To interpret s9 in the way that found favour with the EC would be to defeat the evident statutory purpose of including s9(3) and to effectively render it redundant. The Court refrained from expressing any view as to the application of the statutory provisions applicable with effect from 1 April 2011.

Appeal allowed.

JUDGMENT OF THE COURT
  • A The appeal is allowed and the decisions of the Employment Court and the Employment Relations Authority are set aside.

  • B If formal declarations are required, counsel may apply by memorandum.

  • C The respondent must pay one set of costs to the appellants as for a standard appeal on a band A basis with usual disbursements.

REASONS OF THE COURT

(Given by Randerson J)

Introduction
1

This appeal is concerned with the correct method of calculating “relevant daily pay” for the purposes of the Holidays Act 2003 (the Act). The specific issue is whether unrostered overtime for postal delivery workers is to be included in the calculation and, if so, in what circumstances. Although the outcome of this appeal will immediately affect postal workers, it is likely to have ramifications for other employees entitled to holiday pay.

2

The obligations upon employers to pay allowances to employees for holidays and for absences due to sickness or bereavement are set out in various sections of the Act as we later detail. Those sections provide that the employer's obligation under them is to pay the employee “relevant daily pay” in the circumstances prescribed. The critical issue in this appeal is how “relevant daily pay” is to be calculated in terms of the definition of that expression in s 9 of the Act in the form in which it stood prior to its amendment on 1 April 2011. 1 Section 9 then provided:

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; and

    • (b) includes -

      • (i) productivity or incentive-based payments (including commission) if those payments would have otherwise been received on the day concerned:

      • (ii) payments for overtime if those payments would have otherwise been received on the day concerned:

      • (iii) the cash value of any board or lodging provided by the employer to the employee; but

    • (c) excludes any payment of any employer contribution to a superannuation scheme for the benefit of the employee.

  • (2) To avoid doubt, if subsection (1)(a) is to be applied in the case of a public holiday, the amount of pay does not include any amount that would be added by virtue of section 50(1)(a) (which relates to the requirement to pay time and a half).

  • (3) If it is not possible to determine an employee's relevant daily pay under subsection (1), the pay must be calculated in accordance with the following formula:

    • a / b

    • Where -

    • a is the employee's gross earnings for -

      • (i) the 4 calendar weeks before the end of the pay period immediately before the calculation is made; or

      • (ii) if, the employee's normal pay period is longer than 4 weeks, that pay period immediately before the calculation is made

    • b is the number of whole or part days during which the employee earned those earnings in the 4 calendar weeks, or longer period (as the case may be) including any day on which the employee was on a paid holiday or paid leave; but excluding any other day on which the employee did not actually work.

  • (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).

3

The appeal is from a judgment of the Employment Court delivered by Judge Ford on 20 October 2010. 2 The Employment Court's judgment in turn arose from two de novo appeals from determinations of the Employment Relations Authority. The first determination was in proceedings brought by the first appellant against the respondent (New Zealand Post). 3 The second determination was in proceedings brought by the first appellant (The Postal Workers Union of Aotearoa Inc) and the second appellant (Ms Street) against New Zealand Post. 4

4

The effect of the Employment Court's decision was that, in terms of s 9(1)(b)(ii) an employee was required to establish on the balance of probabilities

that he or she would have worked overtime on the day in question and the actual amount he or she would have received for overtime on that day. Unless that could be established, there was no room for the operation of s 9(3).
5

On 20 April 2011, this Court granted leave to the appellant on the following questions of law: 5

  • (a) Did the Employment Court err in its approach to the calculation of relevant daily pay for the purposes of s 9(3) of the Holidays Act 2003, as it then stood?

  • (b) What is the correct approach in law to this case?

6

For the purposes of determining the appeal, we have refined the broad issues in the following terms:

  • (a) What is the correct approach under s 9(1)(b)(ii) when considering whether payments for overtime “would have otherwise been received on the day concerned”; and

  • (b) In what circumstances does s 9(3) become engaged so as to require the employer to apply the averaging formula in that provision?

Factual background
7

The hearing in the Employment Court proceeded on the basis of an agreed statement of facts from which we now set out the salient features. New Zealand Post is a party to collective employment agreements with the Postal Workers Union of Aotearoa, the separate Postal Workers Union and the New Zealand Amalgamated Engineering Printing and Manufacturing Union. Members of those unions are employed by New Zealand Post as postal delivery workers (“posties”).

8

The postie's task is to sort and deliver mail daily to a round assigned to them. Posties work on a roster of 37.5 full-time hours each week. They are paid for the

rostered hours of full-time work each day even if they finish their delivery round in less than the time allocated. However, if they do not complete their round within the standard hours, New Zealand Post requires them to work reasonable unrostered overtime in excess of their standard hours to ensure the company meets its obligations to deliver mail on any given day...

To continue reading

Request your trial
4 cases
  • Commissioner of Inland Revenue v Vector Ltd
    • New Zealand
    • Court of Appeal
    • 12 Agosto 2016
    ...provisions do not seem to capture payments on transfer of a lease or licence. 22 Postal Workers Union of Aotearoa v New Zealand Post Ltd [2012] NZCA 481 , [2013] 1 NZLR 66 at [22]. 23 Terranova Homes & Care Ltd v Service and Food Workers Union Nga Ringa Tota Inc [2014] NZCA 516 , [2015]......
  • New Zealand Airline Pilots' Association Inc. and Ritchie v Mount Cook Airlines Ltd Coa
    • New Zealand
    • Court of Appeal
    • 23 Mayo 2013
    ...New Zealand Ltd [2007] NZSC 89 , [2008] 2 NZLR 1 at [37]–[38] and [48]. 6 Postal Workers Union of Aotearoa Inc v New Zealand Post Ltd [2012] NZCA 481 , [2013] 1 NZLR 66. 7 Employment Court decision at [41]. 8 Employment Relations Act, s 214(1). 9Postal Workers Union of Aotearoa Inc v New Ze......
  • New Zealand Airline Pilots' Association Inc. v Mt Cook Airlines Ltd
    • New Zealand
    • Employment Court
    • 17 Diciembre 2012
    ...and cannot be agreed upon, they can be the subject of submissions. Judgment signed at 1.45 pm on 17 December 2012 A D Ford Judge 1 [2012] NZCA 481. 2 AA 462/09. 3 [2011] NZEmpC 33 . 4 [2011] NZEmpC 37 . 5 [2007] 3 NZLR 767(SC) . 6 [2010] NZSC 53 . 7 At [122]. 8 At [19]. 9 [1999] 2 ERNZ 788 ......
  • New Zealand Airline Pilots' Association Inc and Ritchie v Mount Cook Airlines Limited Coa
    • New Zealand
    • Court of Appeal
    • 23 Mayo 2013
    ...v Air New Zealand Ltd [2007] NZSC 89, [2008] 2 NZLR 1 at [37]–[38] and [48]. Postal Workers Union of Aotearoa Inc v New Zealand Post Ltd [2012] NZCA 481, [2013] NZLR 66. Employment Court decision at [41]. Employment Relations Act, s 214(1). [13] Finally, Mr Cleary submitted that if a questi......
1 firm's commentaries
  • Happy holidays: the ‘Mondayisation’ of public holidays
    • New Zealand
    • Mondaq New Zealand
    • 19 Junio 2013
    ...daily pay" for the purposes of the Holidays Act 2003. In Postal Workers Union of Aotearoa Incorporated v New Zealand Post Limited [2012] NZCA 481, the Court of Appeal was satisfied that the Employment Court erred in concluding there was an onus on the employee to establish the pay he o......