TATUA CO-OPERATIVE DAIRY COMPANY Ltd v NEW ZEALAND DAIRY WORKERS' UNION TERUNANGA WAI U Inc. NZEmpC AK
| Jurisdiction | New Zealand |
| Judge | B S Travis |
| Judgment Date | 10 November 2011 |
| Court | Employment Court |
| Docket Number | ARC 105/09 |
| Date | 10 November 2011 |
In the Matter of a challenge to a determination of the Employment Relations Authority
ARC 105/09
IN THE EMPLOYMENT COURT AUCKLAND
Challenge to an Employment Relations Authority (“ERA”) decision — independent co-operative dairy company with significant number of long serving employees — disagreement as to application, interpretation and operation of current collective agreement — current agreement contained more beneficial long service leave entitlements than previous agreement — ERA found provisions of current agreement superseded previous agreement — both parties were dissatisfied with the decision — whether the ERA erred in its interpretation of the current agreement.
Garry Pollak, counsel for plaintiff
Helen White, counsel for defendant
JUDGMENT OF JUDGE B S Travis
The plaintiff (Tatua) has challenged a determination of the Employment Relations Authority, issued on 30 November 2009 1 which interpreted the long service entitlements contained in two succeeding collective agreements.
The following facts were not in issue. The plaintiff is an independent cooperative dairy company and has a significant number of long serving employees who are directly affected by a disagreement as to the application, interpretation and
operation of the current collective agreement. The plaintiff and the defendant (the Union) disagree on how to apply the current collective agreement which came into force on 15 November 2008 (the current collective). It is common ground that the current collective contains more beneficial long service leave entitlements, which the parties have described as “the enhanced leave entitlements”, than the previous collective agreement and there is a dispute as to how the enhanced leave entitlements should operate. Clause 17 of the now expired collective agreement (the expired collective) provided:17 SPECIAL HOLIDAYS FOR LONG SERVICE
17.1 ENTITLEMENTS
A worker shall be entitled to special holidays as follows:
17.1.1 One special holiday of 40 hours after the completion of 10 years and before the completion of 20 years of continuous service with the employer.
17.1.2 One special holiday of 80 hours after the completion of 20 years and before the completion of 30 years of continuous service with the employer.
17.1.3 ne special holiday of 120 hours after the completion of 30 years and before the completion of 40 years of continuous service with the employer.
17.1.4 One special holiday of 200 hours after the completion of 40 years continuous service with the employer.
The expired collective, as does the current collective, provided that the long service leave could be taken in variable amounts.
Clause 17 of the current collective increased the entitlements by 40 hours from 40 to 80; 80 to 120; 120 to 160 and 200 to 240 hours but otherwise the wording remained the same. The current collective also contains the following clauses:
17.1 PAYMENT FOR LONG SERVICE HOLIDAYS
All such special holidays provided for in clause 17.1 shall be on ordinary pay as defined by the Holidays Act 2003 and its amendments, and may be taken in one or more periods and at such time or times as may be agreed by the employer and the worker
17.1.1 At the request of the worker, the employer and the worker may agree to the payment of long service leave owing in lieu of taking the leave, payment to be at the rate set out in Clause 17.2. Such agreement shall be in writing and signed by the employer and the worker prior to any payment being made.
17.4 TERMINATION
If a worker having become entitled to a special holiday leaves his/her employment before such holiday has been taken he/she shall be paid in lieu thereof.
Clause 1.6 of the current collective provides:
1.6 PREVIOUS CONTRACTS OF EMPLOYMENT
It is a condition of this Agreement that it shall supersede all previous terms and conditions of employment contained in any relevant Collective Agreement and/or, all terms and conditions of employment by way of an Individual Employment Agreement, verbal or written agreed between the parties.
No worker shall be disadvantaged by the coming into effect of this Collective Agreement. Individuals who have entitlements over and above this agreement shall retain those additional terms and conditions.
When the expired collective came to an end, some long serving employees had not taken up their full entitlements and still had special leave owing to them. A dispute has arisen as to whether they can claim the enhanced entitlements under the current collective in addition to, or in place of, their previously accrued entitlements. The parties summarised their respective positions by giving the Authority five examples to illustrate the various situations that gave rise to the dispute. The five situations and the respective views of the entitlements were encapsulated in a spreadsheet which I set out:
Each party had advanced its own interpretation of the clauses to support its position as shown in the spreadsheet. The Union's position was that if an employee had taken the special leave entitlement before commencement of the current collective, then the employee had no entitlement to the enhanced leave. If the employee had only partially taken the leave, the employee received the enhanced entitlement.
Tatua's position was that the enhanced entitlements applied only to those employees who qualified for it on or after the commencement of the current collective and those who had either taken all or part of their entitlements during the currency of the expired collective received no enhanced leave under the current collective.
The Authority disagreed with the positions of both parties. It found that the provisions of the current collective superseded those of the previous, that the enhanced entitlements applied to all employees and there was no further qualification additional to that of service, as expressly stipulated in the clause. The Authority found: 2
Qualifying for the entitlement and the taking of the entitlement are two separate and unrelated things. Whether or not long service special leave is partially or wholly taken prior to the Collective is entirely irrelevant. There is nothing in the wording of the clause which requires any consideration of whether long service special leave has already been either wholly or partially taken previously.
The Authority's reasoning was translated as follows in terms of the table tendered by the parties:
| Employee | Start date | Service | Leave | Entitlement |
| A | 15.11.95 | 10+ yrs | Unused | 80 hours |
| B | 15.11.95 | 10+ yrs | Used | 40 hours |
| C | 15.11.95 | 10+ yrs | 20 hrs used | 60 hours |
| D | 14.11.98 | 10 yrs, 1 day | Unused | 80 hours |
| E | 15.11.98 | 10 yrs | Unused | 80 hours |
| F | 14.11.88 | 20 yrs, 1 day | Unused | 120 hours |
| G | 15.11.88 | 20 yrs | Used | 40 hours |
Forty hours translates as one week, 80 hours as two weeks and 120 hours as three weeks. Neither side had contended for the position as determined by the Authority.
There had been an issue before the Authority as to whether the pre-contractual negotiations should be taken into account in interpreting the provisions of the collectives. The Authority found that the wording of clause 17 was clear and unambiguous and was to be construed according to the natural and ordinary meaning of the words. Because it found there was no ambiguity, it declined to enquire into the pre-contractual negotiations or the subjective intentions of the parties.
At the Court hearing the Supreme Court decision Vector Gas Ltd v Bay of Plenty Energy Ltd 3 was discussed and it was agreed that the parties would be free to file affidavits dealing with the course of the negotiations for the current collective. The parties would then file submissions dealing with that new evidence in light of the Vector Gas decision and would address issues such as admissibility and relevance. They were provided with the opportunity for a further oral hearing, but neither party sought that, although they both filed further written submissions. The Union filed an affidavit of Mark Hope, its Organiser for the Tatua site who was the advocate in the negotiation of the current collective.
Tatua filed an affidavit of Ewen Gardner, previously Tatua's General Manager, Operations who was involved for Tatua in negotiating the current collective. Tatua also filed an affidavit of Brent Webster, the Production Manager who reported to Mr Gardner and who also attended bargaining meetings for the current collective.
The deponents each gave their views on their undertaking of how the clause was to be applied.
Mr Hope's evidence was that one of the Union's claims was to increase the long service leave provision. When asked by Tatua's representatives to explain how it would apply, he claims he explained that it would apply to any worker who qualified in terms of the clause but if that worker had already used all or part of their entitlement for a given period then they would not get the top up for that period. In those circumstances the Union would consider Tatua had already met their obligations under the current provision. The employee's service would still be continuous and they would get the higher amount in the next period of entitlements. Mr Hope claims that Mr Webster made the comment that it would be unfair for some workers to miss out on the improved entitlement because they had used some of the existing entitlement and Mr Hope claims he responded by saying that he would be comfortable for all workers to get the full amount if Tatua thought that would be more equitable. He invited Tatua, if it had an alternative approach to the...
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