AFFCO NEW ZEALAND LIMITED v NEW ZEALAND MEAT WORKERS AND RELATED TRADES UNION INCORPORATED [2018] NZCA 562

AFFCO NEW ZEALAND LIMITED v NEW ZEALAND MEAT WORKERS AND RELATED TRADESUNION INCORPORATED [2018] NZCA 562 [6 December 2018]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA213/2017[2018] NZCA 562BETWEEN AFFCO NEW ZEALAND LIMITEDAppellantAND NEW ZEALAND MEAT WORKERS ANDRELATED TRADES UNIONINCORPORATEDFirst RespondentCLARRY AGNEW AND OTHERSSecond RespondentsHearing: 14 August 2018Court: Winkelmann, Asher and Brown JJCounsel: G P Malone and M A C Williams for AppellantC R Carruthers QC and P Cranney for RespondentsJudgment: 6 December 2018 at 12.30 pmJUDGMENT OF THE COURTA The appeal is dismissed.B The appellant must pay the first respondent costs for a standard appeal on aband A basis and usual disbursements.____________________________________________________________________REASONS OF THE COURT(Given by Brown J)Introduction[1] At the beginning of the 2015/2016 meat processing season, seasonal workersat the appellant's (AFFCO) plant were unlawfully locked out. As they had not yetbeen re-engaged for the new season, AFFCO did not pay them wages.AFFCO's stance was that the workers' remedy was limited to a claim for damages forbreach of the obligation to re-engage them.[2] The Wages Protection Act 1983 (WPA) constrains an employer from makingdeductions from wages payable to a worker. The issue on this appeal is whetherseasonal workers, whom an employer had a continuing obligation to re-engage at thestart of a new season but who were unlawfully locked out prior to re-engagement, havean entitlement to wages which the WPA protects from employer deductions.Relevant backgroundThe employment agreement[3] The slaughtering and (at least initial) processing of livestock has traditionallybeen seasonal in New Zealand so that most of those who work in meat slaughteringplants are not required to work all year round. When one season ends, the workers arelaid off until the new season starts when most return to work. In the interim they arefree to work for other employers, assuming other employment is available.[4] The employment arrangements of the several meat slaughtering plants ofAFFCO were of that nature. A collective agreement between AFFCO and the firstrespondent (the Union) incorporated several terms of employment reflecting thatseasonal character including:29. SEASONAL EMPLOYMENTa) Seasonal employees are employed for a season and shall begiven five (5) calendar days' notice of seasonal lay off suchnotice to be given on or before 10.00 am of the first day ofsuch period.c) All things being equal, layoffs and re-employment will bebased on departmental and/or site (as appropriate) seniorityand will operate on a last on first off basis, subject to theexperience, employment record, competency and skills of theindividuals, also the need to maintain an efficient, balancedworkforce. (The Department Supervisor shall consult withthe Union Delegate prior to lay-offs of employees beforemaking a recommendation to the Plant Manager).e) Upon termination at the end of the season the employee isresponsible for keeping the employer advised of their currentaddress and phone number if they wish to be contacted foremployment at the commencement of the next season.30. SECURITY OF EMPLOYMENTa) The employer acknowledges the value of a stable, competent andtrained workforce which is familiar with the process methods andprocedures required.b) Re-engagement is dependent upon employees completing theemployer's induction process and signed acceptance of terms ofemployment (being any terms applying in addition to those set out inthis Agreement and applicable Site agreements).31. SENIORITYa) Employees shall have seniority in accordance with the date of theircommencement of employment with the Company and in accordancewith the provisions of this Agreement.b) All things being equal, layoffs and re-employment will be based ondepartmental and/or site (as appropriate) seniority and will operate ona last on first off basis, subject to the experience, employment record,competency and skills of the individuals, also the need to maintain anefficient, balanced workforce. (The Department Supervisor shallconsult with the Union Delegate prior to lay-offs of employees beforemaking a recommendation to the Plant Manager.)c) A seniority list shall be prepared for each department and/or site andbe made available to the delegate each season prior to thecommencement of end of season lay-off and again at re-engagementat the commencement of the season.[5] Seasonal employees were to be contrasted with casual employees who pursuantto cl 32 had no guarantee of work for any period but in certain circumstances couldconvert to become a seasonal employee.[6] The specified currency of the collective agreement was from 1 May 2012 to31 December 2013 but it continued in force until 31 December 2014 pursuant to s 53of the Employment Relations Act 2000 (ERA). From that point in time workers atAFFCO plants were employed for the remainder of the 2014/2015 season on the basisof individual employment agreements containing the same terms as the collectiveagreement.1[7] When the seasonal workers presented themselves for work at the beginning ofthe 2015/2016 season, AFFCO required them to agree to new individual employmentagreements containing terms that were substantially less favourable than thosecontained in the expired collective agreement and which carried over into theirindividual employment agreements. Consequently the workers claimed that they hadbeen unlawfully locked out.The litigation[8] The Union and certain members of the Union brought proceedings againstAFFCO seeking a declaration AFFCO had unlawfully locked out those members froma number of its plants and compliance orders requiring AFFCO to re-engage themembers in the positions in which they would have been employed but for theunlawful lockout.[9] In a judgment dated 18 November 2015 the Full Court of the EmploymentCourt made the declaration but reserved the remedy of compliance orders for laterdetermination by a single judge if that was required.2 The decision on the lockoutcause of action was based on two discrete conclusions: first, that the members'employment was continuous and not discontinuous and hence the members wereemployees of AFFCO when seeking to be re-engaged at the end of their seasonal lay-off.31 See the Employment Relations Act 2000, s 61(2).2 New Zealand Meat Workers & Related Trades Union Inc v AFFCO New Zealand Ltd[2015] NZEmpC 204, [2015] ERNZ 1033.3 At [194].[10] Alternatively, even if the members were not employees of AFFCO after theend of the 2014/2015 season, they were nevertheless locked out unlawfully when theywere required to agree to individual employment agreements as stipulated for byAFFCO to begin work for the new 2015/2016 season.4 AFFCO's actions amounted toa lockout under s 82 of the ERA, specifically by refusing or failing to engageemployees for work for which an employer usually employs employees, with a viewto compelling employees to accept terms of employment or comply with theemployer's demands (s 82(1)(a)(iv) and (b) of the ERA). We note at this point thatthe Union and 164 of its members who normally worked at AFFCO's Wairoa plant(the members), subsequently sought compliance orders on the basis of these findings.Those members are the second respondents on this appeal.[11] On 13 April 2016 this Court granted AFFCO leave to appeal under s 214(3) ofthe ERA on questions of law which included:51. Did the Employment Court err in finding the second respondents wereengaged by AFFCO New Zealand Ltd on employment agreements ofindefinite duration with the result that employment was not terminatedwhen they were laid off at the end of the season?2. Did the Employment Court err in holding that s 82(1)(a)(iv) of theEmployment Relations Act 2000 applied even if there was no employmentrelationship between AFFCO New Zealand Ltd and the second respondentsin the off season?[12] In a judgment dated 8 September 2016 Judge Corkill ruled that the illegallockout had resulted not only in the members not being re-engaged but also in theirnot receiving wages payable to them in accordance with the expired collectiveagreement.6 The failure to make those payments was held to be an unlawful deductionfrom wages payable to the members which was recoverable under s 11 of the WPA.4 At [195].5 AFFCO New Zealand Ltd v New Zealand Meat Workers & Related Trades Union Inc[2016] NZCA 121.6 New Zealand Meat Workers and Related Trades Union Inc v AFFCO New Zealand Ltd[2016] NZEmpC 117, [2016] ERNZ 356 [8 September 2016 decision] at [24].No duty to mitigate arose in respect of a claim for wages under the WPA.That conclusion was reiterated in a further judgment of Judge Corkill dated 24 March2017, the subject of the grant of leave for the present appeal to this Court.7[13] In a judgment delivered on 6 October 2016 this Court ruled that theEmployment Court had erred in concluding that seasonal meat workers werecontinuously employed during the off-season. However it upheld theEmployment Court's conclusion on the applicability of s 82(1)(a)(iv).8[14] Because this Court's decision was delivered subsequent to Judge Corkill'sSeptember 2016 judgment, AFFCO filed an application for recall of the judgment.However because AFFCO had applied for leave to appeal to the Supreme Court fromthis Court's decision, the recall application was adjourned until after the variousproceedings in the senior courts had been resolved. This accounts for the fact that theapplication for leave to appeal to this Court the subject of this judgment was in relationto Judge Corkill's judgment of 24 March 2017 rather than the judgment of8 September 2016.[15] On 9 March 2017 the Supreme Court granted AFFCO's application for leaveto appeal. The approved question was whether this Court was correct to find that abreach of s 82 of the ERA had occurred when AFFCO required seasonal workers toenter into new individual employment agreements before commencing work for the2015/2016 season.9 The Supreme Court ruled that the word "employee" was used inss 82(1)(a) and 82(1)(b) in a different sense from that within the s 6 definition in theERA and dismissed AFFCO's appeal.10[16] On 13 October 2017 this Court granted leave to AFFCO to appeal on thefollowing point of law:117 New Zealand Meat Workers and Related Trades Union Inc v AFFCO New Zealand Ltd[2017] NZEmpC 33 [24 March 2017 decision] at [49]–[50].8 AFFCO New Zealand Ltd v New Zealand Meat Workers and Related Trades Union Inc[2016] NZCA 482, [2016] ERNZ 225 [Court of Appeal decision] at [72].9 AFFCO New Zealand Ltd v New Zealand Meat Workers and Related Trades Union Inc[2017] NZSC 30.10 AFFCO New Zealand Ltd v New Zealand Meat Workers and Related Trades Union Inc[2017] NZSC 135, [2018] 1 NZLR 212 [Supreme Court decision].11 AFFCO New Zealand Ltd v New Zealand Meat Workers and Related Trades Union Inc[2017] NZCA 453.Are any entitlements of [the members] arising from being unlawfully lockedout entitlements to wages under the Wages Protection Act 1983?The Employment Court reasoning[17] In his judgment of 24 March 2017 Judge Corkill expressed his conclusion onthe WPA issue in this way:12[48] this Court has already determined in the September judgment thatthe claim made by the affected plaintiffs is one for unpaid wages.The plaintiffs' claim is an action of debt, and not an action for damages.Wages were payable under the based-on iea because the workers were illegallylocked out when they should have been employed under that agreement.The claim is different from one which is for damages arising from a failure toprovide work; there was a failure to pay wages under the applicableagreement. Consequently, the claim is properly considered under the [WPA].[18] In his September 2016 judgment, after referring to this Court's decision inSpotless Services (NZ) Ltd v Service and Food Workers Union Nga Ringa Tota Inc13Judge Corkill said:14[18] In short, wages are payable if there is a liability for such paymentunder the relevant employment agreement, but for the breach. The questionis what the affected employee would have been paid had the agreement beencomplied with in other respects. That is why, as the Court of Appeal inSpotless held, there must be a focus on what wages were payable in terms ofthe relevant agreement.[19] Then, after referring to cls 30 and 31 of the collective agreement15 and theargument for AFFCO that during the off-season and until re-engagement the membershad no contractual right to wages but only a claim for damages for breach of theobligation to re-engage them, the Judge concluded:[24] I do not accept that the affected employees' claim is simply the"failure to re-engage". The illegal lockout and conduct led not only to theresult that the employees were not re-engaged, but also to the result that theydid not receive their wages in accordance with the expired collectiveagreement.[25] The plaintiffs' claims are not for lost opportunity — which if broughtmight have been characterised as a claim for the damages.12 24 March 2017 decision, above n 7 (footnotes omitted).13 Spotless Services (NZ) Ltd v Service and Food Workers Union Nga Ringa Tota Inc [2008] NZCA580, [2008] ERNZ 609.14 8 September 2016 decision, above n 6.15 Set out above at [4].[26] As was recognised in Schilling v Kidd Garrett Ltd: the loss of an opportunity to which a person is entitled by[contract], to obtain or retain employment is recognised as a properhead of damage for breach of contract.[27] Such a claim involves an evaluation of contingencies, which mighthave been appropriate if the focus of the claims was on a failure to re-engage.But that is not the type of claim which is currently before the Court.The present claim is in respect of the payment which the parties agreed wouldbe paid for the performance of work; that payment is defined in s 4 as "wages".[28] In summary, payments for the performance of work would, but for theillegal lockout and conduct, have been payable under the collectiveagreement. Where those payments were not made there was an unlawfuldeduction which may be recovered under s 11 of the [WPA].(Footnotes omitted).The parties' submissionsAFFCO's case[20] For AFFCO Mr Malone contended that:(a) wages for the purposes of the WPA means salary or wages which anemployer has agreed to pay to a "worker"(b) the term "worker" in the WPA has the same meaning as that given tothe term "employee" by s 6 of the ERA;(c) in the ERA an employee means a person employed by an employer todo any work under a contract of service; and(d) during the off-season there was no employment agreement in existencebetween AFFCO and the members pursuant to which any wages werepayable.[21] Consequently the Employment Court erred in failing to apply this Court'sconclusion that there was no continuous employment of the seasonal workers who atthe time of the lockout were not employees within the meaning of s 6 of the ERA.Spotless was distinguishable because the employees there held current employmentagreements and hence had a statutory right to wages pursuant to those agreements.The Union's case[22] For the Union, Mr Carruthers QC submitted that AFFCO's argumentproceeded on a misinterpretation of Judge Corkill's decision, for the reason that theJudge did not proceed on the basis of the Employment Court's conclusion that therewas a continuous contract but rather in accordance with this Court's October 2016judgment.[23] His argument involved the following limbs:(a) The members' entitlement to re-engagement as employees meant theywere entitled to remuneration under the collective agreement and therelevant Site Agreement. The consequence of the Supreme Court'sdecision was that workers as "employees" in terms of s 82 are entitledto remuneration (which includes wages) for the duration of the lockout.(b) The members' entitlements clearly fall within the categories ofpayments identified in the definition of "wages" in s 2 of the WPA.(c) The definition of "worker" is subject to the qualification "unless thecontext otherwise requires". A clear object of the WPA is to protectpayments to employees. There can be no rationale for distinguishingbetween the protection required for a s 6 employee and a s 82(1)employee. Hence to achieve the object of the legislation it is necessaryto interpret "worker" in the WPA as including s 82(1) "employees".(d) Alternatively the legislature in enacting the definition of "worker" ins 2 of the WPA has failed to recognise that there is another relevantcategory of "employee" namely the s 82(1) employee. In this respectthe legislature has misfired.Analysis[24] As the parties' submissions reflected, the approved point of law involves twolimbs:• What is the nature of any "entitlements" of the unlawfully locked outmembers?• Does the WPA apply to such entitlements?The nature of the members' entitlements[25] AFFCO's argument has an attractive simplicity. Because during the off-seasonthere were no employment agreements in existence, the members were not employeesand hence they had no entitlement to wages. We agree that Spotless is notdeterminative of the present matter because the workers there locked out wereemployed under contracts of service.[26] However it does not follow from this Court's finding in its 6 October 2016judgment, namely that the Employment Court erred in finding that AFFCO engagedthe seasonal workers on employment agreements of indefinite duration, that there wasan error in the Employment Court's conclusion as to the applicability of the WPA tothe present circumstances. This Court's conclusion on the indefinite durationproposition commenced with a discussion of what has been described as a "permanentemployment clause":16[49] AFFCO, the union and the workers are deeply embedded in anindustry with a long history of collective bargaining and legal disputes, manyof which have been resolved in the courts. In the light of this background, areasonable and properly informed third party would look for clear evidence ofthe parties' intention to depart from the industry standard of interseasonaltermination of employment recognised by earlier decisions. For example, inHughes v Riverlands Eltham Ltd the Employment Court considered acollective employment agreement containing this express provision:Although the work available to many employees is of a seasonalnature, for the purposes of continuity of employment, all employeesshall be deemed to be permanently employed by the employer16 Court of Appeal decision, above n 8 (footnotes omitted). The term "permanent employmentclause" was used in the Supreme Court decision, above n 10, at [76].pursuant to the terms of this contract, although some may not berequired to attend work nor to be entitled to receive any remunerationduring seasonal lay-off. Therefore, the employer shall continue toengage every employee in each season, subject only to the provisionsfor termination and redundancy.(Our emphasis.)This clause indicates a clear intention for workers performing seasonal tasksto enjoy continuity of employment between periods of active engagement.It conveys in unequivocal language to a reasonable and properly informedthird party — and therefore the courts — that the contracting parties did notintend to be bound by the authorities.[27] The focus of the Supreme Court's decision was on the meaning of "employees"in s 82(1)(b). However, having earlier remarked that it seemed something of a stretchto describe a person, who had left his or her name with AFFCO at the end of the season,as a person within the phrase "a person intending to work" as defined in s 5 of theERA,17 the Supreme Court undertook a close analysis of the relationship betweenAFFCO and the members.[28] In the context of a consideration of the "carry-over" provisions in the collectiveagreement and in the individual employment agreements, the Supreme Court engagedwith the submission for AFFCO that, despite AFFCO's agreement that it wascontractually obliged to offer re-employment for the 2015/2016 season in accordancewith the seniority provisions in the individual employment agreements, neverthelessother apparently continuing provisions in the agreements did not apply aftertermination. Noting cl 30(b) relating to the process of re-engagement18 as perhaps themost significant example the Court said:19The reason that this provision is important is that it seems to identify the termsthat would apply on re-engagement, that is, the previously applicable terms(subject, of course, to any others that might be mutually agreed). If it isinterpreted in this way, the clause limits AFFCO's ability on re-engagement torequire workers to accept individual employment agreements that contain lessadvantageous terms.[29] The Supreme Court then addressed AFFCO's contention that the continuedapplication of cl 30(b) would mean that employment, although seasonal, was17 Supreme Court decision, above n 10, at [52].18 Set out above at [4].19 At [70].effectively perpetual with the consequence that, as each new season commenced,AFFCO would have an obligation not only to offer re-employment based on senioritybut to do so on the same terms as in the relevant expired agreement. Questioning whythat raised any difficulty of principle the Court said:[72] More importantly, however, it is difficult to see any principledbasis on which one continuing obligation (to offer re-employment) survivestermination, but others do not. It is not possible, in our view, to differentiatebetween the various continuing obligations in the agreements in this way.[73] In the result, then, we consider that there are continuing obligations inthe collective agreement, and in the individual employment agreements basedon it, which survive termination. One of these is AFFCO's obligation to offerre-engagement in accordance with seniority at the start of the new season.Once it is accepted that the obligation to offer re-employment survives, weconsider that the other continuing clauses also remain in effect, includingcl 30(b).[30] Then, in considering and rejecting AFFCO's submissions on the meaning of"employees" in s 82(1)(b) the Court stated:[76] Second, s 82(1)(a)(iii) refers to the act of an employer "in breakingsome or all of the employer's employment agreements". In a seasonalemployment situation where employment is terminated at the end of theseason and re-engagement occurs at the beginning of the new season, theremay be terms of employment that carry over beyond termination, as in thepresent case. The Act recognises in other contexts that an employer maybreach such a term, even after employment has ended. If such a continuingobligation was breached by an employer and the employer's act was intendedto compel the particular worker and/or similarly placed workers to accept newand less advantageous terms of employment, there is no linguistic reason that"employees" in s 82(1)(b) should not be read as applying to those workers.Moreover, we consider that this interpretation conforms with the legislativepurpose. We see no substantive difference in this context between seasonalworkers who have a permanent employment clause and seasonal workers suchas the second respondents who do not.[77] Third, although a direct comparison cannot be made between thestrike and lockout provisions given their different requirements, we think itsignificant that a strike may involve acts by persons who are no longeremployees. In principle, there seems to be no reason why the lockoutprovisions should not apply to acts committed by an employer for the purposeof making a person accept particular terms of employment, in circumstanceswhere the person is owed employment obligations by the employer, althoughhe or she is not actually employed at the time.[78] We must make explicit a limitation that is implicit in what we havesaid in the preceding paragraphs. It is not the case that an employer whorefuses to hire a new employee because the two are unable to agree terms ofemployment will, for that reason alone, have locked out the potential hire.As we have emphasised, the second respondents in this case were not, incontractual terms, strangers to the employer. Rather, they were people whohad previously worked for AFFCO and to whom AFFCO owed contractualobligations, including as to re-hiring, even though their employment hadterminated at the end of the previous season and they were seeking to bere-engaged for the new season. That feature of termination plusre-engagement under the umbrella of a number of continuing obligationsdistinguishes this case. Like the Court of Appeal, we consider that therelationship between AFFCO and the second respondents was sufficientlyclose to bring the latter within the scope of the word "employees" ins 82(1)(b).(Footnotes omitted and emphasis added).[31] In our view, those observations of the Supreme Court, in particular thehighlighted passages, indicate that such seasonal workers comprise a special categoryof worker. Such workers, while not a party to a continuous contract of service, havean entitlement to employment which a mere applicant for employment does not.[32] The special nature of seasonal workers' "employment" is reflected in severalother provisions of the collective agreement. First we draw attention to the finalelement of the "Intent" provision in section 2, cl 9(f), which addresses the objectivesof the agreement:The parties to this agreement are committed to safeguarding the safety, healthand welfare of the employees and providing conditions of employment andpayments which are fair and equitable to employees and the Company, andwhich safeguard their various interests while providing maximum possiblecontinuity and security of employment.(Emphasis added).[33] We then note that within section 4 (remuneration) there is provision for aminimum weekly payment for all employees other than casuals.20 Thus this provisionapplied to seasonal workers. Specifically with reference to employees who arere-engaged the calculation of payment was stated as follows in cl 16(d):In the week where employees are laid off or re-engaged, the weekly minimumpayment shall be reduced pro-rata to the number of working days remainingin that week, provided seven calendar days' notice of layoff has been given.20 As well as one other exception that is not relevant for our purposes.[34] Provision was made in the agreement for long service leave to employees aftercompletion of various periods of continuous service with AFFCO. In respect of suchentitlements, cl 23(d) stated:"Continuous service" shall also mean service by any seasonal employeeemployed by the Company for a period of at least two calendar months in eachconsecutive season. Where the Company can only offer employment for lessthan two calendar months, this lesser period shall suffice, provided theemployee has not refused an employment offer earlier in the season.[35] The implications for the payment and receipt of remuneration during a lockoutare addressed in s 96 of the ERA:96 Employer not liable for wages during lockout(1) Where any employees are locked out by their employer, thoseemployees are not entitled to any remuneration by way of salary,wages, allowances, or other emoluments in respect of the period ofthe lockout, unless the employer's participation in the lockout isunlawful.(2) On the resumption of work by the employees, their service must betreated as continuous, despite the period of the lockout, for thepurpose of rights and benefits that are conditional on continuousservice.[36] Having regard to the provisions of the collective agreement that provided forseniority and continuous service with reference to the AFFCO seasonal workers, weconsider that s 96(2) is to be construed as applicable to those seasonal workers.[37] Had there been no unlawful lockout by AFFCO at the beginning of the2015/2016 meat processing season, then the members would have been re-engagedand they would have been paid wages. Their service would also be treated ascontinuous for the purpose of the relevant provisions of the collective agreement ascontinued in the individual employment agreements.21[38] In our view for workers in that special category as described by theSupreme Court at [30] above the appropriate remedy to compensate for the unlawfullockout is the wages which would otherwise have been payable to them. We do not21 See above at [6].consider that damages for breach of an obligation to offer re-employment is theappropriate response in the context of this special category of worker.Does the WPA apply to wages payable during an unlawful lockout?[39] The relevant statutory obligation is the requirement in s 4 of the WPA that anemployer must pay without deduction the entire amount of wages payable to a workerand the corresponding entitlement to recover any deduction from the employer unders 11 of the WPA.[40] The issue here is whether the references to "wages" in the WPA are confinedto wages payable under a contract of service or extend to include the wages which wehave held should have been paid to the seasonal workers who were unlawfully lockedout by AFFCO. The answer is to be determined by the text and purpose analysisdirected by the Supreme Court in Commerce Commission v Fonterra Co-operativeGroup Ltd.22TextSection 2 of the WPA contains the following definition of wages:wages means salary or wages; and includes time and piece wages, andovertime, bonus, or other special payments agreed to be paid to a worker forthe performance of service or work; and also includes any part of any wages[41] Mr Malone's point is that the wages are to be paid to a "worker", which isdefined in s 2 of the WPA as having the same meaning as that given to the term"employee" by s 6 of the ERA. Hence he argued that wages in the WPA are confinedto payments made under a contract of service. Mr Carruthers points to the contextualqualification of "unless the context otherwise requires" which is contained in both theWPA interpretation section (s 2) and the definition of "employee" in s 6 of the ERA.He contends that the clear object of the WPA is to protect payments to workers,whether they be permanent employees or seasonal workers.22 Commerce Commission v Fonterra Co-operative Group Ltd [2007] NZSC 36, [2007] 3 NZLR767 at [22].[42] Mr Malone's argument may have had greater traction in relation to earlierversions of the statute. However we consider that the relationship between the WPAand the ERA, indeed one might say the integration between them, is of moment onthis issue.[43] Significantly s 4 of the WPA is subject to s 6(2) of the WPA which states:6 Employer may recover overpayments in certain circumstances(2) Notwithstanding anything to the contrary in any collectiveagreement within the meaning of the Employment RelationsAct 2000 but subject to subsection (3), an employer who hasmade an overpayment to any worker may recover the amountof that overpayment from any wages to the payment of whichby that employer that worker subsequently becomes entitled.[44] An overpayment is defined as meaning any wages paid to a worker in respectof a "recoverable period" which is defined in s 6(1) of the WPA as follows:recoverable period, in respect of any employer and any worker, means aperiod in respect of which that employer is not required by law to pay anywages or (if the employer is entitled to make a specified pay deduction undersection 95B of the Employment Relations Act 2000) any part of any wages tothat worker, by virtue of that worker's having—(a) been absent from work without that employer's authority; or(b) been on strike (within the meaning of section 81 of the EmploymentRelations Act 2000); or(c) been locked out (within the meaning of that subsection); or(d) been suspended.[45] We digress to note that the reference in (c) to "that subsection" is a draftingerror. That reference was originally to the definition of lockout in s 2(1) of theIndustrial Relations Act 1973. However there was no related amendment to (c) whenin 1991 an amendment was made to (b) to refer to s 2 of the Employment ContractsAct 1991.23 Nor was (c) amended in 2000 when (b) was amended again to refer to23 Wages Protection Amendment Act 1991, s 2.s 81 of the ERA.24 We consider that the reference in (c) to "that subsection" shouldbe now construed as a reference to s 82 of the ERA.[46] This overpayment recovery provision introduced by the WPA, which is anexception to the general principle in s 4 of that Act, is complementary to s 96(1) of theERA25 which provides that employees are not entitled to remuneration during a lawfullockout. If, notwithstanding s 96, such employees in an unlawful strike or lawfullockout scenario receive remuneration, the employer may recover the overpayment bya deduction within the parameters of s 6 of the WPA.[47] The significance for present purposes is that the WPA recognises and addressesthe scenarios of strikes and lockouts and in that context qualifies the primaryprohibition on deductions from wages. We do not consider that in so doing it shouldbe construed as applying to permanent employees but not to seasonal workers in thenature of the AFFCO workers. If the situation was reversed, and the lockout waslawful and the seasonal workers were erroneously paid wages, we would expect thatAFFCO would and could invoke the recovery procedure provided in s 6.[48] In our view, the text of the WPA is consistent with the reference to "wages"applying not only to wages payable under a contract of service but also to wagespayable to seasonal workers in the category explained by the Supreme Court.Purpose[49] The source of the WPA can be traced to the early United Kingdom Truck Actswhich provided protection for workers' wages by the requirement that payment bemade in current coin rather than equivalents (presently reflected in the requirement ins 7 of the WPA that payment of wages be in money only).[50] An argument that the prohibition in the Truck Acts against employers makingdeductions from workers' wages went beyond the mischief to which the legislationwas directed was rejected by the House of Lords in Williams v North's Navigation24 Employment Relations Act, s 240 and sch 5.25 At [35] above.Collieries (1889) Ltd.26 However as Bowen LJ observed in Hewlett v Allen & Sonsthe legislation drew its "line of tutelary shelter" at a prohibition on deductions, leavingopen all legal and equitable rights to the employer in any civil action.27[51] The policy underlining the wages deduction prohibition was explained byChilwell J in McClenaghan v Bank of New Zealand:28Parliament clearly intended to place a restriction upon employers in exercisinga remedy by way of deduction from wages payable. Inconvenience toemployers was intended. Parliament must have been prepared to tolerate someanomalies in the interest of the overriding objectives of the statute one ofwhich was to prevent the employer from being judge, jury and enforcementofficer in his own cause (see Lord Atkinson in Williams' case [1906] AC 136,145).I accept Mr Vaver's submission that the Act deprives every employer of hisability to exercise an arbitrary power to make deductions from wages at a timewhich suits him best and for his convenience. It ensures that the periodic payof a worker comes to him regularly on due date undiminished so that theworker can securely undertake his daily financial commitments. The schemeof the Act is to shift it to the worker to decide when it is convenient for him tohave his wages diminished in the event that he is indebted to his employer.[52] We do not discern any basis for the proposition that the legislative purposerelates only to permanent employees and does not contemplate seasonal workers ofthe nature in this case. Both categories are deserving of the protection which the WPAprovides.[53] As pointed out in the discussion of text above, the WPA adjusted the balancein favour of employers in the context of strikes and lockouts. We consider that thepolicy which that adjustment reflects should be taken as indicating that the WPAapplies to all workers whose entitlement to wages may be affected by a lockout.[54] We conclude that the wages which we consider were payable by AFFCO to theunlawfully locked out seasonal workers constituted wages to which the WPA applied.Hence AFFCO's refusal to pay these wages was in contravention of the prohibition ondeductions in s 4 of the WPA. We consider that the concerns voiced by Mr Malone26 Williams v North's Navigation Collieries (1889) Ltd [1906] AC 136 (HL) at 147 perLord Atkinson.27 Hewlett v Allen & Sons [1892] 2 QB 662 (CA) at 668.28 McClenaghan v Bank of New Zealand [1978] 2 NZLR 528 (SC) at 542.about the practical implications of that interpretation for cases where employers mayneed to seek reimbursement from employees are answered by McClenaghan.29Result[55] The appeal is dismissed.[56] The appellant must pay the first respondent costs for a standard appeal on aband A basis and usual disbursements.Solicitors:Oakley Moran, Wellington for Respondents29 At 542, set out above at [51].