OVATION NEW ZEALAND LTD v NEW ZEALAND MEAT WORKERS AND RELATED TRADES UNION INC [2019] NZCA 146

OVATION NEW ZEALAND LTD v NEW ZEALAND MEAT WORKERS AND RELATED TRADES UNIONINC [2019] NZCA 146 [8 May 2019]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA24/2019[2019] NZCA 146BETWEEN OVATION NEW ZEALAND LIMITEDFirst ApplicantAND TE KUITI MEAT PROCESSORS LIMITEDSecond ApplicantAND NEW ZEALAND MEAT WORKERS ANDRELATED TRADES UNIONINCORPORATEDRespondentCourt: Gilbert and Williams JJCounsel: M D O'Brien QC for Applicants on extension of timeJ B M Smith QC, R E Brown and S J Leslie for Applicants onleave to appealP Cranney and S N Meikle for RespondentJudgment:(On the papers)8 May 2019 at 11 amJUDGMENT OF THE COURTA The application for an extension of time to bring an application for leave toappeal is granted.B The application for leave to appeal is declined.C The applicants are jointly and severally liable to pay costs to the respondenton the application for leave to appeal on a band A basis and usualdisbursements.D The respondent must pay costs to the applicants on the application for anextension of time on a band A basis save for the costs of filing that application.____________________________________________________________________REASONS OF THE COURT(Given by Gilbert J)Introduction[1] The applicants, Ovation New Zealand Ltd and Te Kuiti Meat Processors Ltd,operate meat processing plants. Employees at these plants, which are located atFeilding, Gisborne and Te Kuiti, are covered by separate collective employmentagreements. In the context of bargaining for new collective agreements, four issuescommon to each arose. These concerned whether the applicants had failed to paythose employees paid on piece rates for rest breaks as required by s 69ZD ofthe Employment Relations Act 2000 (ERA) and whether the applicants had failed topay employees paid piece rates or on hourly rates for time spent donning and doffingprotective gear and cleaning and sterilising gear and equipment (donning and doffing)at the beginning and end of shifts and breaks.[2] The four issues the Employment Court was required to determine were:(a) Is it lawful to incorporate paid rest breaks in piece rates?(b) Were paid rest breaks incorporated in the piece rates in each ofthe collective employment agreements in compliance with s 69ZD ofthe ERA?(c) Is donning and doffing "work" for the purposes of s 6 of the MinimumWage Act 1983?(d) Have sufficient breaks been provided as required under pt 6D ofthe ERA, taking into account time spent donning and doffing?[3] In a decision delivered on 17 December 2018 the Employment Court answered(a) "yes", (b) "no" and (c) "yes".1 The Court also found the employees were not1 Ovation New Zealand Ltd v New Zealand Meat Workers and Related Trades Union Inc [2018]NZEmpC 151 [Employment Court decision] at [64], [194] and [272].currently paid for donning and doffing.2 The Court deferred issue (d) for laterconsideration.3 The Court also deferred the question of remedies on the respondent'scounterclaim concerning donning and doffing.4[4] The applicants seek leave under s 214 of the ERA to appeal againstthe Employment Court's decision on the following questions of law:(a) Did the Employment Court err in law by failing to apply or incorrectlyapplying the applicable principles of law in interpreting the collectiveemployment agreements?(b) Did the Employment Court err in law in determining that donning anddoffing is "work" for the purposes of the Minimum Wage Act?(c) Did the Employment Court err in law in deciding that the applicants'employees are not currently paid for donning and doffing in breach ofs 6 of the Minimum Wage Act?[5] The applicants submit the proposed questions raise matters of general or publicimportance because the three collective employment agreements apply to some800 employees and the Employment Court's determinations are likely to have broaderimplications for other workers and employees in the meat industry and in otherindustries.[6] The New Zealand Meat Workers and Related Trades Union Incorporated(the respondent) opposes leave. It says the Employment Court made no error ofinterpretive principle in construing the three collective agreements and the questionwhether donning and doffing is "work" is a question of fact, not law. It also claimsthe applicants' contention that the piece rates include an agreed payment for donningand doffing was not part of their argument in the Employment Court and cannot beraised on appeal.2 At [280].3 At [285]–[286].4 At [8] and [290].Extension of time[7] Section 214(2) of the ERA provides that an application for leave to appeal mustbe brought within 28 days after the date of issue of the decision, or within such furthertime as the Court of Appeal may allow. The 28-day period expired on 14 January2019. The application for leave to appeal was not filed until 28 January 2019.The applicants have explained that the late filing was entirely due to an error made bytheir solicitors and counsel as to the relevant time limit. They understood the relevanttime limit excluded the period between 25 December and 5 January in accordance withreg 74B of the Employment Court Regulations 2000 and that the application for leaveto appeal was therefore filed within time. Upon being advised of the correct date,the applicants immediately filed an application for an extension of time supported bydetailed affidavits explaining the reason for the delay. Mr O'Brien QC was retainedspecifically to deal with the application for an extension of time given the error wasmade by the solicitors and counsel acting for the applicants on the substantive issues.[8] The respondent has not been prejudiced by the delay. The delay was short andhas been satisfactorily explained. The applicants were not responsible for the delay.They would have applied for leave to appeal on or before 14 January 2019 had theybeen advised this was the time limit. They should not be prejudiced by the error madeby their legal advisors. Although the application for an extension of time is opposed,we consider it should not have been. The principles summarised bythe Supreme Court in Almond v Read are applicable by way of analogy.5 We aresatisfied the interests of justice require that an extension of time should be granted sothe application for leave to appeal can be considered on its merits.Jurisdiction[9] Appeals against decisions of the Employment Court are restricted to questionsof law.6 Leave will not be granted unless the proposed question of law is one thatought to be submitted to the Court of Appeal for determination by reason of its generalor public importance or for some other sufficient reason.75 Almond v Read [2017] NZSC 80, [2017] 1 NZLR 801.6 Employment Relations Act 2000, s 214(1).7 Section 214(3).[10] There is no right of appeal against a decision on the construction of a collectiveemployment agreement and accordingly this Court has no jurisdiction to entertain anysuch appeal. However, it is well-settled that if material errors of interpretive principlehave been made by the Employment Court in construing a collective agreement, thisis a question of law amenable to appeal. So, for example, if the Employment Courtincorrectly recites, or recites but then fails correctly to apply, the applicable principlesof contractual interpretation, this Court may intervene if the errors are operative.8The Supreme Court in New Zealand Air Line Pilots' Association Inc v AirNew Zealand Ltd (NZALPA) emphasised it is always necessary to identify the error ofinterpretive principle and not to find there has been an error of principle merelybecause the Court prefers a different interpretation.9Error of law in interpreting the collective agreements?[11] The applicants contend the Employment Court made three errors ofinterpretive principle in construing the agreements:(a) failing to make any finding as to what the relevant provision in eachagreement meant, namely whether the piece rate included payment forrest breaks (error 1);(b) failing to apply the correct approach to extrinsic evidence by treatingthe applicants as having an obligation to prove their interpretation wascorrect with evidence as to how piece rates were calculated befores 69D was introduced in 2009 (error 2); and(c) failing to apply the correct approach to the interpretation ofthe agreements in the light of the statutory benefit by treatingthe applicants as having to show their practice had changed since 2009when their case was that paid rest breaks were already being providedat that time (error 3).8 New Zealand Air Line Pilots' Association Inc v Air New Zealand Ltd [2017] NZSC 111, [2017] 1NZLR 948 at [51], [105] and [155].9 At [65].Error 1[12] The applicants rely on William Young J's judgment in the NZALPA case wherehe said the Employment Court was required to determine what the relevant clausemeant.10 The applicants argue the Judge failed to do that here. Instead, they saythe Judge merely recorded that the agreements respectively were "incomplete",evinced "doubt", and "did not resolve" which possible meaning was correct.The applicants are particularly critical of the Judge's conclusion in relation tothe Feilding collective that it was "not established as a matter of interpretation ofrelevant CEAs that piece workers at Feilding have been provided with paid restbreaks".11 The applicants say this confuses the onus of proof with the proper approachto contractual interpretation. The clause must mean one thing or another; either restbreak payments are included in piece rates or they are not. The Court had to comedown on one side or the other. In saying only that it was "not established" the Judgefailed to determine the meaning as he was obliged to do.[13] No issue is taken with the Judge's recitation of the relevant principles to beapplied in interpreting the agreements. The question is whether he applied them.We accept the Judge was required to determine what the relevant provisions inthe agreements meant. We are satisfied he did so. The Judge asked the correctquestion — 'were paid rest breaks incorporated in the applicable piece rates'12 — andhis answer to this question was an unequivocal 'no' — "under the relevant CEAs, suchpayment was not incorporated in the agreed piece rates".13 Any infelicities inthe wording of particular passages in the judgment are inconsequential and likelyexplained by the fact the applicants were seeking declarations that they were payingpiece workers for their breaks and therefore bore the onus of proving this. We can seeno material error of interpretive principle giving this Court jurisdiction to entertainthe proposed appeal on error 1.10 At [138].11 Employment Court decision, above n1, at [126].12 At [66].13 At [287(b)].Error 2[14] The applicants submit that evidence as to how the piece rates were calculatedbefore 2009 might have been relevant and helpful, but the absence of such evidencedid not alter the interpretive task, nor does it hint at the result. The Judge was stillrequired to determine the meaning of the relevant provisions in the absence of thisevidence.[15] As the applicants acknowledge, this point is connected to the first alleged error.While we agree the Judge had to determine the meaning on the relevant and admissibleevidence before him, he did not shrink from that duty, as we have shown. We do notconsider there was an arguable error of interpretive principle founding jurisdiction forthe proposed appeal on error 2.Error 3[16] The applicants contend the Judge failed to appreciate that s 69ZD of the Actwas not intended to provide additional paid break entitlements in workplaces thatalready did so. The Judge therefore erred in principle in treating the applicants ashaving to show their practice had changed since 2009. The applicants' case was theywere providing paid rest breaks before the legislation was amended to require this.They say this is a classic example of a case where the interpretation of the agreementturns on the correct construction of a statute. Had the Judge recognised that the statuterequired no change if paid rest breaks were already being provided, he would not haveinsisted that the applicants' practice had to change in response.[17] We do not consider there is anything in this point. It is clear from the Judge'sdiscussion of the relevant background that he understood the legislative change wasnot intended to affect employers who were already providing rest breaks meetingstatutory requirements.14 As the Judge found, this did not assist his enquiry as towhether the applicants were in this category. The Judge ultimately concluded theywere not based on his interpretation of the agreement. Again, we see no error ofinterpretive principle giving jurisdiction for the proposed appeal on alleged error 3.14 At [100].Error of law in concluding that donning and doffing is work?[18] The Judge applied this Court's decision in Idea Services Ltd v Dickson indetermining whether donning and doffing constitutes work.15 In finding it is work,the Judge rejected the applicants' contention that the time spent carrying out thesetasks at the beginning and end of each shift was so minimal it should be disregardedas de minimis.[19] The question of whether donning and doffing is work is a question of mixedfact and law — what does the activity entail and how long does it take? (questions offact) and does the activity constitute work? (a question of law). There can be no appealagainst the Judge's factual findings as to the nature of the activity and the time requiredto undertake it. In view of the Judge's factual findings, the applicants' primaryargument based on the de minimis principle appears to us to be untenable.[20] The Judge followed an orthodox approach in analysing whether donning anddoffing constitutes work. The applicants make no real attempt to demonstrate anyerror of law in his analysis. While we accept the question of whether donning anddoffing is work is potentially an issue of general or public importance, we see noarguable error in the Judge's approach or in his conclusion on this issue. For thatreason, we do not consider leave should be granted for an appeal to this Court on thisissue.Error of law in concluding that employees are not currently paid for donning anddoffing?[21] The Judge found the applicants were not currently paying their employees fordonning and doffing.[22] There seems to be no real dispute with the Judge's finding that the applicantsdo not pay employees on hourly rates for donning and doffing at the beginning andend of each shift. However, the applicants argue their employees are mostly paid wellin excess of the minimum wage for every hour and that "[e]xtending those hours toinclude a small amount of time spent donning and doffing gear at the beginning and15 Idea Services Ltd v Dickson [2011] NZCA 14, 2 NZLR 522.end of shifts does not put the applicants in breach of the Act". The Judge rejected thisapproach as being contrary to this Court's decision in Idea Services.16 The applicantscontend the Judge erred in equating their calculations to what this Court rejected asimpermissible averaging in Idea Services.[23] The correct approach is settled by this Court's decision in Idea Services.We see no arguable error of law in the approach taken by the Judge in his considerationof this issue.[24] The applicants contend that the analysis in Idea Services does not easily applyto piece rates, where payment is determined by output, not time spent working.They submit there is no reason why the parties could not agree that time spent donningand doffing is incorporated in the piece rate. Here, they say the relevant collectiveagreements provided that breaks (which include time spend donning and doffing)include time spent "leaving and returning to work". Mr Cranney, for the respondent,says the applicants did not raise this argument in the Employment Court and thereforecannot raise it now. The applicants respond that they understood the only issues beforethe Employment Court were whether donning and doffing was work and whetherthe applicants' approach constituted impermissible averaging. They say that ifthis Court grants leave for the proposed appeal, it should also determine this issue.[25] The question of remedies in respect of donning and doffing has not yet beendetermined. The Employment Court has directed a fully particularised counterclaimif these are pursued. In all the circumstances, we do not consider this Court shouldgrant leave to appeal on this issue.Result[26] The application for an extension of time to bring an application for leave toappeal is granted.[27] The application for leave to appeal is declined.16 Employment Court decision, above n 1, at [274]–[280].[28] The applicants are jointly and severally liable to pay costs to the respondent onthe application for leave to appeal on a band A basis and usual disbursements.[29] The respondent must pay costs to the applicants on the application for anextension of time on a band A basis save for the costs of filing that application.Solicitors:Bell Gully, Wellington for ApplicantsOakley Moran, Wellington for Respondent