William Tan v Lsg Sky Chefs New Zealand Ltd NZEmpC Ak

JurisdictionNew Zealand
CourtEmployment Court
JudgeB S Travis
Judgment Date14 March 2013
Docket NumberARC 20/11
Date14 March 2013

[2013] NZEmpC 35


ARC 20/11

In The Matter Of Proceedings Removed

William Tan
Lsg Sky Chefs New Zealand Limited

Rob Towner, counsel for plaintiff

Garry Pollak, counsel for defendant

Application by plaintiff that he was entitled to transfer his employment to the defendant pursuant to subpart 1 Part 6A Employment Relations Act 2000 (“ERA”)(continuity of employment if employees' work affected by restructuring) — plaintiff employed by company which provided food catering services for the aviation sector — contract subsequently awarded to defendant — plaintiff's main role was to supervise airline equipment and train staff — defendant declined to accept his transfer on the grounds he was not involved in food catering services pursuant to Schedule 1A ERA (employees to whom subpart 1 of Part 6A applies) — whether plaintiff was involved in “food catering services” — whether Part 6A was only intended to cover “vulnerable workers” by virtue of s274A(4) ERA (amendments to Schedule 1A — restructuring of an employer's business occurred frequently: restructuring tended to undermine the employees' terms and conditions and employees concerned had little bargaining power).

The issues were: whether Part 6A ERA was only intended to cover “vulnerable workers” whether T was involved in the food catering business; and if T was entitled to transfer, what were his terms and conditions.

Held: The word “vulnerable” did not appear in Schedule 1A ERA nor in Part 6A ERA, even though it was clear from the Parliamentary material that this appeared to be the type of employee to whom protection was going to be extended. Further, the criteria in s237A ERA did not use the word “vulnerable”, but referred to sectors in which restructuring occurred frequently that had undermined the employees’ terms and conditions of employment and where the employees concerned had little bargaining power.

Applying the purposive approach to Schedule 1A ERA on the basis, that, as the Supreme Court (“SC”) said in OCS, subpart 1 ERA was designed to protect vulnerable employees, Schedule 1A ERA may well have been intended to occasionally overprotect in order to ensure adequate protection of those the legislature considered were vulnerable. The criteria listed s237A ERA could not be grafted onto employees already listed in Schedule 1A ERA. If the legislature had intended that, it could easily have been achieved. Regard could still be had to the purpose defined by the SC in OCS in determining whether a particular employee's duties fell within the Schedule 1A ERA.

If this was wrong and the criteria could be grafted onto Schedule 1A ERA, the onus fell on the employee electing to transfer under s69I ERA (employee may elect to transfer to new employer) to show that they came within that criteria.

T had been a long serving employee in the sector and there was no suggestion that there had been frequent restructuring. It did not appear that his terms and conditions of employment had tended to be undermined by restructuring nor that he had little bargaining power. If OCS required the application of the criteria in s237A ERA in Schedule 1A ERA, then T had not satisfied the criteria.

All of the employees of PRI or PFC were employed to support PFC's food catering service. But not all were employed directly in providing food catering services. While some of T's duties (such as the acquisition of tea, coffee and condiments) did involve some aspect of food handling, it was such a minor aspect that it did not alter the real nature of T's duties. While T was a support worker, he was not proximate enough to the actual provision of the food services. The real nature of his work was the stores and that was not food catering. The small amount of food items he handled did not bring him into Schedule 1A ERA. Further, he was not a vulnerable employee as envisaged by the criteria in Schedule 1A ERA. It was clear that Part 6A ERA was intended to provide protection for limited categories of employees providing a particular type of service, and T did not fall within that category. It therefore followed that T was not an employee who was entitled to elect to transfer from PRI to LSG.

If T was entitled to transfer, the terms and conditions of T's employment which he would otherwise have been entitled to transfer to LSG had to be considered. T's previous entitlements to a separate office with a computer, contact with relevant employees and no requirement to wear a uniform were not terms and conditions of his employment which he was entitled to seek to have transferred to LSG. Provided that LSG gave T the opportunity to carry out his work in an office, albeit shared with other people, with the necessary computer access and with the appropriate access to the relevant employees at LSG, T could have no complaint. If his former employer at PRI had changed its work practices to include a shared office for T and had required all relevant employees to wear uniforms, T would not have been able to sustain an unjustifiable disadvantage personal grievance claim against PRI.



The first issue before the Court was whether the plaintiff, Mr Tan, was entitled to elect to transfer his employment to LSG Sky Chefs New Zealand Limited (LSG), pursuant to subpart 1 of Part 6A of the Employment Relations Act 2000 (the Act) because, allegedly, the nature of his duties at his previous employer, PRI Flight Catering Ltd (PRI), was providing food catering services for the aviation sector. The second issue was to determine the terms and conditions of his employment if he was so entitled.


The matter was removed to the Court by a determination of the Employment Relations Authority (the Authority) on 23 March 2011. 1 It was agreed by counsel that the Court would issue an interim judgment determining the two issues and the issue of remedies was reserved.


The issuing of this judgment was delayed by the linkage of this case to other litigation in this Court involving LSG and previous employees of PRI and Pacific Flight Catering Ltd (PFC) its associated company through which it traded and by the High Court proceedings brought by LSG against PFC and PRI. 2 The most recent judgment in the proceedings Mr Matsuoka brought against LSG was issued on 21 December 2012. 3


The Supreme Court decision in Service and Food Workers Union Nga Ringa Tota Inc v OCS Ltd, 4 which set aside orders made by the Court of Appeal on issues of continuity of employment under Part 6A of the Act, was issued on 9 August 2012 and I considered it had relevance to the issues which were required to be determined in the present matter. Counsel were provided with the opportunity to make further submissions on the applicability of the Supreme Court decision and did so. These have been taken into account in this judgment. This all, however, contributed to the delay in resolving this matter.

Factual findings

Mr Pollak, in his closing submissions on behalf of the defendant, accepted that the evidence led on behalf of Mr Tan as to his duties, was not the subject of any disagreement and was not challenged. Mr Tan was not cross-examined on his brief of evidence. The following summary is derived from Mr Tan's evidence.


Mr Tan described himself as an “airline equipment and supply supervisor”. He had almost 19 years' experience in airline catering at Auckland International Airport. He had worked fulltime for P&O Flight Catering and Services NZ Ltd (P&O) as an airline equipment supervisor from September 1991. In 1996, PRI bought the flight catering business from P&O and Mr Tan continued as an employee with PRI until 22 February 2011. He was employed as airline equipment and supply supervisor. He stated that the change in his job description, by the inclusion of the words “and supply” did not mean there was any change in his duties. He worked at

PFC's premises near the Auckland International Airport. PRI provides food catering services to international airlines through PFC.

In an addendum, dated 19 September 2005, to Mr Tan's individual employment agreement, the first schedule of his P&O individual employment agreement, was replaced with the following:

… Your duties will encompass, but not necessarily be restricted to the following:

  • a) To supervise all inward airline equipment and liaise with airlines to ensure a smooth supply of airline equipment

  • b) To supervise airline equipment stock takes

  • c) To ensure appropriate systems are used to monitor and keep track of airline equipment

  • d) To ensure speedy communication with airlines regarding any equipment issues

  • e) To supervise that airline equipment is issued correctly on the floor

  • f) To raise any misuse or waste of airline equipment with senior management

  • g) To train and supervise staff dealing with airline equipment as necessary

  • h) To implement and supervise the Singapore Airlines Equipment management system

  • i) To report as necessary to the Managing Director


Clause 8 of the individual employment agreement was amended by the addendum to state that the employee had the sole right to decide to take on an instructor/auditor role, in lieu of his current role, at any time the employee saw fit. This role involved educating, coaching and training staff and auditing equipment management practices, stock takes, use and storage. Mr Tan said he never decided to take on an instructor/auditor role.


Mr Tan said he performed a broad range of duties which were accurately summarised in the first schedule of his amended employment agreement set out above. His role involved supervising all equipment and inventory at PFC's premises and liaising with airlines about equipment by email to ensure a smooth supply of airline equipment at PFC at all times. The purpose of his job was to ensure that all parts of the business had the equipment...

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