AFFCO NEW ZEALAND LIMITED V THE NEW ZEALAND MEAT WORKERS AND RELATED TRADES UNION INCOPORATED CA CA162/06

AFFCO NEW ZEALAND LIMITED V THE NEW ZEALAND MEAT WORKERS AND RELATED TRADES UNION INCOPORATED CA CA162/06 10 November 2006IN THE COURT OF APPEAL OF NEW ZEALAND CA162/06BETWEEN AFFCO NEW ZEALAND LIMITED Applicant AND THE NEW ZEALAND MEAT WORKERS AND RELATED TRADES UNION INCOPORATED Respondent Hearing: 5 October 2006 Court: Glazebrook, Arnold and Ellen France JJ Counsel: R Dobson QC and G P Malone for Applicant E J Unsworth for Respondent Judgment: 10 November 2006 at 11.30 amJUDGMENT OF THE COURT A The application for leave to appeal is dismissed. B The respondent is awarded costs of $1,500, plus usual disbursements. REASONS OF THE COURT(Given by Ellen France J)Introduction[1] This is an application under s 214 of the Employment Relations Act 2000 for leave to appeal against a decision of Judge Shaw in the Employment Court delivered on 13 July 2006.Basis of proposed appeal[2] The applicant says the Employment Court erred in three respects: (a) In finding there was a contractual term about the methodology of payment for smokos whilst also finding the question of methodology was neither addressed nor agreed. (b) In finding that smokos had not been paid when in fact those payments were accounted for by AFFCO. (c) In making adverse findings against AFFCO's representatives when those matters had not been put to the representatives.Background[3] The applicant operates a meat processing plant at Imlay, near Wanganui. The plant was shut down for a lengthy period. Before the shutdown, there were numerous payment arrangements for different workers in the plant. Lamb cutters were paid entirely on a piecework basis. This meant that lamb cutters would divide a pool comprising their remuneration depending on their tasks and the number of carcasses produced. [4] Over a period before the plant re-opened, AFFCO re-negotiated terms and conditions for its employees. The parties ultimately reached a plant variation agreement. Under that agreement, a payment system was introduced which was based on a standard hourly rate for all employees, overtime rates, and a payment toall employees of an incentive carcass/production component above the hourly base rate. The variation was silent about the payment of smokos. [5] With the switch to payment on an hourly basis, clause 14 of the core collective agreement applied to lamb cutters. That clause provided that all workers would be paid for two 15 minute smokos. [6] A dispute arose between the parties because, some time after the plant re-opened, the lamb cutters realised that the smokos were being paid out of the incentive pool rather than as an addition to the hourly rate. [7] Proceedings were brought and the Employment Relations Authority upheld the Union's claim that AFFCO was in breach of the agreement relating to the payment of smokos for lamb cutters. The Authority found in the Union's favour and AFFCO appealed unsuccessfully to the Employment Court.Discussion[8] The Court may grant leave to appeal on a question of law which, by reason of its general or public importance or for any other reason, ought to be submitted to this Court. In terms of s 214(1), leave is not available to appeal a decision on the construction of a collective employment agreement. [9] The points of contention between the parties are whether or not any of the issues raised by the applicant are matters relating to the interpretation of the collective employment agreement or raise a question of law on which leave may be given. [10] In our view, even if any of the issues relied on by the applicant raise a question of law independent of the construction of the agreement, none of these questions have any significance beyond this group of workers. As a consequence there are no issues of such general, public or other importance that this Court ought to look at them.[11] On the first matter relating to the findings about method of payment, the applicant points initially to Judge Shaw's statement that it was accepted AFFCO did not give a "firm undertaking" that the lamb cutters would be paid an additional 30 minutes a day. Second, the applicant relies on the finding that AFFCO's representative "never expressly" promised that smokos would be paid over and above the incentive pool. [12] The applicant says it is inconsistent with any orthodox approach to contractual interpretation for the Court to have then gone on to find there was a contractual term about the payment methodology for smokos. The applicant also submits that the Judge's focus on the negotiations between the parties will have broader implications in that it will impose greater obligations of formality on the parties. [13] The present case suggests a level of formality would be helpful but, in any event, we think the appellant's submission misconstrues the Judge's finding as to the effect of the variation agreement. [14] Judge Shaw found that the effect of the new arrangements entered into was that all workers were to be treated alike. The like treatment extended to the method of payment for smokos. Hence, the Judge reasoned, AFFCO had to establish a separate agreement in relation to the lamb cutters if it wanted to pay them differently. These findings turn on the Judge's assessment of the variation agreement and of the factual position applicable to other workers, particularly slaughtermen. The applicant challenges the factual position of the latter but that assessment is not one on which leave is available under s 214. [15] It is in determining whether AFFCO had established a separate agreement for lamb cutters that Judge Shaw addresses the promises made by AFFCO. Read in that light, her findings do not undermine the earlier conclusion about the meaning of the agreement. Further, when the two findings referred to are considered in context it is apparent that any question of law thereby raised does not extend beyond the particular relationship of these parties.[16] In any event, while the Judge finds there was no express promise to pay over and above the incentive pool, she also says it was implicit in the indicative rates promulgated by AFFCO's representative that this would occur. It is accepted that the way in which smoko payments are made affects whether or not the lamb cutters would ever reach those indicative rates. [17] Judge Shaw's conclusion that the smoko payments had not in fact been paid simply follows on from her finding that the payments should not have come from the pool. No broader question of law is raised by this aspect of the case. [18] The third point raised by the applicant is that the Judge's adverse findings against the AFFCO representatives were in breach of natural justice. Mr Dobson QC for AFFCO accepted these findings were a function of the Judge's more general conclusion. Given our view on that aspect, this point cannot be more than a factor which, on AFFCO's argument, would compound the earlier error. As there was no error, the point falls away. We add that we do not accept that there is a general requirement in these circumstances for a court to allow parties to comment on adverse findings.Result[19] The application for leave to appeal is dismissed. The respondent is awarded costs of $1,500, plus usual disbursements.Solicitors: Solutions Law Office, Nelson for Applicant Horsley Christie, Wanganui for Respondent