APN NEW ZEALAND LIMITED V NZ AMALGAMATED ENGINEERING PRINTING & MANUFACTURING UNION INCORPORATED CA CA234/03

APN NEW ZEALAND LIMITED V NZ AMALGAMATED ENGINEERING PRINTING & MANUFACTURING UNION INCORPORATED CA CA234/03 24 March 2004IN THE COURT OF APPEAL OF NEW ZEALAND CA234/03BETWEEN APN NEW ZEALAND LIMITED Appellant AND NZ AMALGAMATED ENGINEERING PRINTING & MANUFACTURING UNION INCORPORATED Respondent Hearing: 15 March 2004 Coram: McGrath J William Young J O'Regan J Appearances: R L Towner for Appellant J A Wilton for Respondent Judgment: 24 March 2004JUDGMENT OF THE COURT DELIVERED BY McGRATH J Introduction[1] This is an application under s214 of the Employment Relations Act 2000 for leave to appeal to this Court against a judgment of the Employment Court delivered on 14 November 2003. The Employment Court judgment gave that Court's opinion on questions of law referred to it by the Employment Relations Authority, under s177 of the Act. The application, and an associated application to stay the operation of the Employment Court's judgment, is made by APN New Zealand Limited (the employer) which is the publisher of the New Zealand Herald newspaper. The respondent is the New Zealand Amalgamated Engineering Printing and Manufacturing Union Incorporated (the union).[2] The Authority's reference was heard and determined by a Full Court of the Employment Court. The reference concerned legal issues that gave rise to concern in the course of the Authority's investigation of an employment relationship problem that had arisen between the employer and the union, concerning the New Zealand Herald Journalists Collective Agreement (the collective agreement) to which they are parties.Background[3] The background to the present applications is that clause 4.3 of the relevant collective agreement permitted an employee to withdraw from coverage under the collective agreement, without prejudicing the employee's right to belong to the union. The employer reached agreement with certain employees to increase their remuneration on the condition that they would withdraw from coverage in accordance with clause 4.3 and sign an individual employment contract with the employer. The employees concerned, it seems, would have preferred to remain covered by the collective agreement, but accepted the terms of the individual employment contracts that were offered them. As permitted by clause 4.3 they remained members of the union. At least one new employee was also engaged to perform work which had previously fallen within the coverage of the collective agreement on a similar basis, under an individual employment contract. [4] The Employment Court judgment indicates that the collective agreement also provided in clause 6.1 that certain employees might move, with the employer's consent, from wages to salary based remuneration, while remaining under the collective agreement's coverage. As the union saw it, however, the employer had adopted a firm policy that the mechanism of clause 6.1 would not be utilised. It is said to have preferred to enter individual employment contracts with the employees concerned. It also seems, from the Employment Court decision, that the perceived practice has given rise to differences between the employer and the union which are now before the Authority. [5] In the course of its investigation of this employment relationship problem the Employment Relations Authority, acting under s177 of the Act, referred fourquestions of law to the Employment Court for its opinion. Thereafter, as permitted by s177(1), the Authority delayed its investigation, pending receipt of the Court's opinion on the questions referred. We were advised that the Authority has now decided to defer recommencing its inquiry, pending the outcome of the employer's applications for leave to appeal and a stay.The Employment Court's judgment[6] In broad terms the questions referred by the Authority concerned whether the terms of clause 4.3 of the collective agreement were inconsistent with s56 of the Employment Relations Act so that they had no legal effect. Section 56 provides that a collective agreement that is in force is binding on and enforceable by first the union and the employer that are parties to it, and secondly employees who are employed by that employer, and who become members of the union, if their work comes within the coverage clause of the agreement. In its judgment the Employment Court held that clause 4.3 is inconsistent with this provision because it permits an employer and an employee bound by the Act's provisions to opt out of a collective agreement which the Act stipulates is binding on them. In the opinion of the Employment Court it was inconsistent with the scheme of the Act, as well as the terms of s56, for a collective agreement to provide for withdrawal by an employee who was bound. [7] The effect of the Employment Court's decision in the present context appears to be that the employer cannot insist that employees, with whom it has agreed remuneration is to be by salary rather than wages, must withdraw from coverage under the collective agreement and enter into individual agreements. The employer now seeks leave to appeal against that judgment.Leave to appeal[8] Mr Towner argued, on behalf of the employer, that the issues decided by the Employment Court raise a question of law of general or public importance sufficient to warrant a second appeal to this Court under s214(3) of the Act. He argued that thequestion whether s56 allows an employer and a union to agree in a collective agreement to permit an employee to withdraw from coverage, while remaining a member of the union, was one of general application and national significance in employment relations. [9] Mr Wilton for the union did not contest that submission directly but did contend that leave to appeal against the Employment Court's judgment on the questions ought not to be given by this Court at this point in the process because it would be premature to do so. Mr Wilton's argument is based on the terms of s177 of the Act which provides as follows:Referral of question of law(1) The Authority may, where a question of law arises during an investigation,- (a) refer that question of law to the Court for its opinion; and (b) delay the investigation until it receives the Court's opinion on that question. (2) Every reference under subsection (1) must be made in the prescribed manner. (3) The Court must provide the Authority with its opinion on the question of law and the Authority must then continue its investigation in accordance with that opinion.[10] The argument is that s177 contemplates that the Authority should get on with its inquiry into the matter before it, acting in accordance with the Employment Court's opinion on the questions of law, as soon as that opinion has been provided. Mr Wilton emphasises the mandatory language of s177(3) as indicating that there should be the least possible interruption to the Authority's process. He submits that it would be in accordance with the statutory scheme if the issues addressed by the Employment Court were to come to the Court of Appeal only following the Authority's determination, in the event that there were an appeal from that decision to the Employment Court and a further appeal by leave to this Court. [11] The union's submission, however, overlooks the terms in which the provision for an appeal to this Court is expressed in the Act. Section 214 so far as relevant to the present application provides:Appeals to Court of Appeal on question of law(1) Where a party to any proceedings under this Act is dissatisfied with any decision of the Court (other than a decision on the construction of any individual employment agreement or collective employment agreement) as being erroneous in point of law, that party may, with the leave of the Court of Appeal, appeal to the Court of Appeal against the decision; and section 66 of the Judicature Act 1908 applies to any such appeal. (3) The Court of Appeal may grant leave accordingly if, in the opinion of that Court, the question of law involved in that appeal is one that, by reason of its general or public importance or for any other reason, ought to be submitted to the Court of Appeal for decision. (4) The Court of Appeal, in granting leave under this section, may, in its discretion, impose such conditions as it thinks fit, whether as to costs or otherwise. (6) Neither an application for leave to appeal nor an appeal operates as a stay of proceedings on the decision to which the application or the appeal relates unless the Court or the Court of Appeal so orders.[12] Importantly, the section provides for an appeal to this court, with leave, from "any decision" of the Employment Court with which a party to proceedings is dissatisfied, not falling within the excluded categories. [13] When the purpose of s177 is considered it is plain that it should not be read as restrictive of this Court's power to grant leave under s214. The Authority's power to refer legal questions is given to enable an authoritative opinion on the law to be provided to it on a question arising in the course of its exercise of its statutory investigative functions, if the Authority wishes to have that guidance. In the normal course the Employment Court's opinion will provide a definitive statement of law to guide the Authority as an investigative body with the role of resolving employment relationship problems. This is why s177(3) is expressed in the terms it is. But a party dissatisfied with the judgment has a right to seek leave to appeal against the Employment Court judgment and we conclude that the Act envisages that, if leave is granted, this Court's judgment will be substituted for that of the Employment Court as the definitive opinion on the questions referred. Parliament cannot have contemplated that an application for leave to appeal against such a decision which raises an issue meeting the threshold for leave to appeal under s214(3), should be refused or adjourned, on the basis that that matter should only come before this Court once the entire process was completed.[14] We are satisfied that the Employment Court's decision raises a legal question of general and public importance concerning the scope of restrictions under the Act on the terms on which parties may enter into collective employment agreements. We are also satisfied that the issue ought to be submitted to this Court for decision in terms of the principles set out in NZ Employers Federation Inc v National Union of Public Employees [2000] 1 ERNZ 212 paras 26 and 27. Accordingly we grant the employer's application for leave to appeal subject to the condition that the appeal be brought on for hearing expeditiously by the employer as the party granted leave.Application for stay[15] Mr Towner also seeks a stay of proceedings on the Employment Court's judgment. He has told us that the Authority was initially minded to continue with its inquiry having received the Employment Court's judgment, but later decided to defer doing so pending the outcome of this Court's decision on the two applications now before it. [16] Section 214(6) provides that neither an application for leave to appeal, nor the bringing of an appeal, operates as a stay of proceedings on the Employment Court judgment unless either that Court or this Court so orders. Jurisdiction to order a stay is also conferred by Rule 9 of the Court of Appeal (Civil) Rules 1997 which provides:9 Stay of proceeding (1) Either the Court below or the Court of Appeal may order a stay of execution or stay of proceedings under the decision appealed from, or grant other interim relief by order or (if the Crown is the respondent) by declaration, pending the determination of the appeal. (2) An order referred to in subclause (1) may relate to execution of the whole or part of a judgment or order, or to a particular form of execution, and may be made subject to such conditions as to the giving of security and other conditions as the Court making the order thinks fit to impose. (3) Unless an order referred to in subclause (1) otherwise provides, an appeal does not operate as a stay of execution or of proceedings under the decision appealed from.(4) Unless the Court appealed from otherwise directs, an appeal does not invalidate any intermediate act or proceeding.[17] In the normal course applications for a stay order in respect of an Employment Court judgment should first be made to the Employment Court, which has jurisdiction to grant a stay under r9 as soon as an application for leave to appeal is made to this Court or is foreshadowed. [18] There is no proper basis under the rule for a general suspension of the effect of the Employment Court's decision. Rule 9(1) empowers either Court to order a "stay of proceedings under the decision appealed from." The expression covers legal proceedings, including all Court proceedings and those of the Authority that are related to, in this case, the Employment Court's decision. This case concerns an application for a stay of proceedings of the Authority, which has referred a question of law to the Employment Court under s177. From the time that the Authority receives the Employment Court's opinion, it is required to conduct its investigation in conformity with that opinion. In those circumstances r9(1) confers a power to stay any further steps in that investigatory proceeding pending determination of the appeal. [19] The approach to be taken to an application for a stay of proceedings does not differ in the employment law context from that generally taken by this Court under r9. The Court considering the application must balance the conflicting considerations arising from the right of a successful respondent to have the immediate benefit of a judgment, and the need to preserve the appellant's position in case the appeal is successful. [20] In this instance we have concluded that, on balance, the Authority should be able to continue with its inquiry to establish the facts of the employment relationship problem before it, if it considers that appropriate. The Authority should not, however, make any determinations of the merits of any of the matters before it. Such determinations should only be made after this Court's judgment on the appeal. Otherwise there is a risk that the appeal could become moot and the appellant deprived of the right to bring an appeal, for which it has been given leave, against a judgment binding on it. In reaching this decision we have had regard to the nature ofthe Authority's role and informal procedures under the Act as discussed in Claydon v Attorney-General [2004] NZAR 16, paras [53], [66] to [71] and [113]. [21] The application for a stay order is accordingly granted restraining the Authority from making any decision on the merits of the employment relationship problem which gave rise to the reference to the Employment Court in this case pending delivery of judgment in the appeal or further order of the Court. In all other respects, pending the outcome of the appeal, the Employment Court judgment continues to have full legal effect. Leave is reserved to either party to apply further in respect of this order in case that becomes necessary. [22] As both parties have enjoyed a measure of success before us there will be no order as to costs.Solicitors: Bell Gully Buddle Weir, Auckland, for Appellant General Counsel, NZ Amalgamated Engineering Printing & Manufacturing Union Inc, Lower Hutt.