Cases of interest: May 2022

A summary of interesting or topical employment cases.

Tranzurban Hutt Valley Ltd v New Zealand Tramways & Public Passenger Transport Employees Union Wellington Inc [2022] NZEmpC 75

Employment Court – Rest and meal breaks – Work period – Split shifts 

At issue was whether, when employees worked on split shifts, time continued to run between shifts for the purposes of calculating rest and meal breaks. 

The employer operated public transport buses. The employees were bus drivers. Around a third of their work shifts were split shifts, where the employees worked in the morning, stopped working for between two and four hours, and then returned to work later that day. Section 69ZD (external link) of the Employment Relations Act 2000 (Act) stipulates the minimum rest and meal breaks an employer must provide its employees with, according to the length of the work period. The term “work period” is defined in s 69ZC (external link) as the period beginning and ending with the times at which an employee starts and finishes work in accordance with the terms and conditions of their employment. The employer and union disagreed as to whether the work period for the employees on a split shift included the period in the middle of the day when they were not working. 

The Employment Court (Court) found that the period in the middle of the day between shifts was not part of the employees’ work period for the purposes of calculating their rest and meal breaks (see para 65). The Court noted that when providing for breaks, Parliament had intended to provide employees with the opportunity for rest and refreshment during working hours (see para 51). It found that the provisions of 69ZD referred to periods of time within a working period, rather than including time between working periods (see para 40). The Court concluded that a proper interpretation of a work period meant that breaks should be calculated “with reference to hours when an employee has work responsibilities” (see para 45). 

Tranzurban Hutt Valley Ltd v New Zealand Tramways & Public Passenger Transport Employees Union Wellington Inc [2022] NZEmpC 75 [PDF, 315KB] (external link)  

New Zealand Qualifications Authority v Hickey [2022] NZEmpC 76

Employment Court – Interim reinstatement – Fixed term employment agreement 

At issue was whether the employee should be reinstated to his position under s 127 (external link) of the Act pending a substantive hearing into his personal grievance. 

The employee was employed on a fixed term employment agreement. The letter of offer stipulated that the employment would end on 24 December 2021, as that was when the particular project he was employed to work on was due for completion. The employee had strained working relationships with other employees. The project did not end when expected. The employee asked for an assurance his employment would be extended and he was given such assurance by his manager. Two weeks later the employee was to give a presentation at a virtual workshop.  He became agitated and abusive when technical difficulties meant the workshop ran late. He took sick leave and did not make the presentation, leaving a colleague to do so. Another colleague made a complaint about his behaviour, which the employer decided to investigate. The employer learned the employee suffered from mental illness. In the meantime, the employer did not extend his fixed term contract. 

The employee claimed the fixed term agreement was either invalid or extended by the employer when it agreed by email to an extension (see para 48). However, the employer refuted that claim, saying the legitimacy of the original fixed term was not affected by events that followed (see para 47). The employee sought interim reinstatement to his former role while his personal grievance was resolved. 

The Court declined to order interim reinstatement (see para 108). The Court found that:

  • The employment agreement did not require more detail for the reasons the role was fixed term, as had been argued by the employee (see para 61).
  • While there were still formalities to be completed, the email extending the employment past the original fixed term was unequivocal (see para 71). This meant there was a serious question to be tried in relation to the claim of unjustified dismissal, although it was weakly arguable (see paras 68 and 73).
  • The employee was critical of the employer and did not have any insight into the problems he caused in the workplace (see para 79).
  • The balance of convenience favoured the employer. The employee had been difficult to manage (see para 100).
  • Although reinstatement is the primary remedy (under s 125 (external link) of the Act), it would be “very difficult to re-establish a working relationship” (see para 102).
  • The project was due to finish on 30 June 2022 so the employment would not continue until the substantive hearing in any case (see para 103). 

New Zealand Qualifications Authority v Hickey [2022]  NZEmpC 76 (external link)  

Courage v Attorney-General [2022] NZEmpC 77

Employment Court – Employee status 

At issue was whether three former members of the Gloriavale Christian Community (Gloriavale) were employees. 

Each of the plaintiffs had been born at Gloriavale and had worked from the age of six. They were rostered on to work at dairy farms, at a moss factory and in a honey business. When the plaintiffs turned 15 years of age, they began working full time under a “transitional education/work experience programme”. The programme purported to provide them with work experience while they finished their last year of high school, but the plaintiffs gave evidence that they worked full time and did not enter a classroom at any point during that year. When the plaintiffs reached 16 years of age, they became Associate Partners, signing a “Deed of Adherence”.  As Associate Partners, the plaintiffs received payment for their work. However, Gloriavale controlled their bank accounts and transferred the money straight back to its shared account. The plaintiffs left the community before they became adults.  They sought a declaration they had been employees during their childhood. Gloriavale denied there had been an employment relationship. It claimed the employee/employer relationship model was contrary to its fundamental beliefs and values. 

The Court declared that the three plaintiffs had been employees under s 6 (external link) of the Act during their time at Gloriavale (see para 203). In making its decision, the Court took into account: 

  • The Court acknowledged that “this case had a number of unusual factors” (see para 33). It stated its aim was to properly focus on the real nature of the relationship (see para 137).
  • The success of the Gloriavale businesses relied on child labour (see para 92). The mean age of members is 12 years (see para 9).         
  • The Court did not accept that the work children performed could be characterised as “chores”. It was instead work as work is normally understood. “It was laborious, often dangerous, required physical exertion over extended periods of time and it was for commercial benefit” (see para 55).
  • Although the leaders of Gloriavale could take preferences into account, the children and their families ultimately had no choice as to which of the Gloriavale businesses they were chosen to work for (see para 62).  The leaders made that choice according to business need (see para 94).
  • The Deed of Adherence the plaintiffs signed were not determinative. The plaintiffs felt they had no freedom to object to signing the agreement (see paras 81–83). They did not understand what they were signing (see para 194). The Court noted that parties cannot contract out of the Act (see para 188).
  • The plaintiffs had not been volunteers. They were “not offering to work as a matter of free choice” (see para 191). They were rewarded for their work with food, accommodation and the security and benefits of being a member of the community (see para 190).
  • The plaintiffs had not been independent contractors. They were not in business on their own account (see para 202).
  • The plaintiffs had not been partners. They were still legally minors (see para 202). There was no change to the fundamental nature of the relationship when the plaintiffs were labelled Associate Partners (see para 200). There was a significant power imbalance between the parties (see para 100). 

The Court reserved its decision on the identity of the employer (see para 204). 

Courage v Attorney-General [2022] NZEmpC 77 [PDF, 330KB] (external link)  

Vulcan Steel Ltd v Manufacturing & Construction Workers Union [2022] NZEmpC 78

Employment Court – Interpretation of collective agreement – Drug testing 

At issue was whether the employer or employee could determine the method of drug testing under the provisions of their collective agreement. 

The employer was a steel manufacturing distributor and processor. Health and safety was therefore of particular importance in its workplaces. The employer had a zero-tolerance policy. The policy provided that drug testing could be required pre-employment, for reasonable cause, following a workplace incident or as part of random testing. The relevant procedure document stated (see para 23): 

8.3.1 Prior to undergoing a test, a test consent form will be signed by the employee consenting to the relevant method(s) of testing

8.3.3 The employee will provide a hair or oral fluid sample for testing or, in private, a urine specimen. 

The union, on behalf of the employees, preferred oral fluid testing. The employer preferred urine sample testing.  The parties disputed whether the employer or employees were entitled to choose the method of testing. The employer asked the Court to find there was an implied term that the employer could select the method. The Court declined to do so (see para 170).  

The Court found there were several drafting errors in the relevant documents. The drug policy had a “gap on the issue of selection of method” (see paras 61 and 86). The Court found the parties had included both methods in the policy as a compromise after being unable to agree on the preferred method (see paras 153, 162 and 164). The Court held it could not imply the term the employer sought as it was not so obvious that it went without saying (see para 169). To do so would have amounted to an alteration of the parties’ bargain (see para 172). 

Vulcan Steel Ltd v Manufacturing & Construction Workers Union [2022] NZEmpC 78 [PDF, 410KB] (external link)

Rail and Maritime Transport Union v KiwiRail Ltd [2022] NZERA 222

Employment Relations Authority – Interpretation of collective agreement – Ability of employer to change hours of work 

At issue was whether the employer could change the roster of the employees without the agreement of the employees.  

The employer was a rail operator. The union represented 17 of its current employees who worked in a mechanical workshop.  For the past seven years, those employees have worked under a 12-hour fixed roster on a day shift or a night shift. The employer proposed changing that roster to an 8-hour rotating roster, under which the employees would work day, afternoon and night shifts. The employer sought the feedback of the employees, who objected to any alteration. The Employment Relations Authority (Authority) was asked to determine whether the collective agreement between the parties allowed the employer to change the roster without the agreement of the employees. 

The Authority found that the collective agreement did allow the employer to change the roster without the agreement of the employees. However, the discretion to do so was not unfettered (see paras 5 and 86). The Authority indicated the employer’s arguments that 8-hour shifts would better meet its health and safety obligations and customer needs may lack a strong evidential basis. And without that evidence, it would be difficult for constructive conversations to take place (see paras 72–73). 

The Authority found that personal grievances and breach of good faith claims were premature as the proposal for change process had not been completed (see paras 31, 99 and 104).

Rail and Maritime Transport Union v KiwiRail Ltd [2022] NZERA 222 [PDF, 90KB] (external link)  

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