PORTS OF AUCKLAND LTD v MARITIME UNION OF NEW ZEALAND INC [2018] NZCA 575 [12 December 2018]

PORTS OF AUCKLAND LTD v MARITIME UNION OF NEW ZEALAND INC [2018] NZCA 575[12 December 2018]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA501/2018[2018] NZCA 575BETWEEN PORTS OF AUCKLAND LIMITEDApplicantAND MARITIME UNION OF NEW ZEALANDINCORPORATEDRespondentCourt: Cooper and Gilbert JJCounsel: J R Billington QC for ApplicantS R Mitchell for RespondentJudgment:(On the papers)12 December 2018 at 12.30 pmJUDGMENT OF THE COURTA The application for leave to appeal is declined.B The applicant must pay the respondent costs for a standard application on aband A basis and usual disbursements.____________________________________________________________________REASONS OF THE COURT(Given by Cooper J)Introduction[1] Ports of Auckland Ltd (POAL) seeks leave to appeal against a decision ofthe Employment Court delivered on 31 July 2018.1 The Employment Court judgment1 Ports of Auckland Ltd v Maritime Union of New Zealand Inc [2018] NZEmpC 86[Employment Court judgment].upheld a determination of the Employment Relations Authority which held that themanner in which POAL rostered employees for work did not comply with the termsof a collective employment agreement (the Agreement) which the parties had enteredfollowing extensive negotiations.2[2] In broad terms, the dispute between the parties concerned the timing of noticesthat POAL was required give to stevedore employees of work they would berequired to perform in the subsequent week. This required the Authority andthe Employment Court to reach a view as to the proper interpretation of cl 5 ofthe schedule to the Agreement.[3] POAL contends that the interpretation which found favour with the Authorityand the Employment Court is incorrect. It says that in reaching its conclusion,the Employment Court failed properly to consider the wider context of the Agreement,the pre-contractual negotiations and other contextual matters claimed to be relevant.[4] A second issue sought to be raised on appeal concerns the Employment Court'sdecision to adjourn an application made by the respondent, the Maritime Union ofNew Zealand Inc (the Union), for a compliance order. POAL says thatthe Employment Court made an error of law in failing to hold that a compliance orderwould be arbitrary and inappropriate, having regard to the fact that the parties are inthe course of bargaining for a new collective employment agreement.[5] The Union opposes the grant of leave. It says that neither of the issues raisedby the company amounts to a question of law. If there is such a question in relation tothe first issue, it also says that as that issue concerns the construction of a collectiveemployment agreement, this Court does not have jurisdiction to entertain the appeal.3[6] The relevant provisions which had to be construed for the purposes of theinterpretation issue were contained in cl 5 of the schedule to the Agreement.They provided:2 Maritime Union of New Zealand Inc v Ports of Auckland Ltd [2017] NZERA Auckland 350[ERA decision]. The agreement applied for the period 18 February 2015 to 17 August 2017.3 Employment Relations Act 2000, s 214(1).5. Notification5.1. Stevedoring Roster5.1.1. The Port is bound to operate its services on a 24 hours a day,7 days a week basis and the ordinary hours of work for eachemployee will be rostered by the Company to facilitatemeeting this demand.5.1.2. The roster may include provision for rotational andnon-continuous shift work, with shift duration ranging from 4to 12 hours per ordinary shift. A minimum of ten hoursbetween the completion of one shift and the commencementof the next shift shall be rostered and a maximum of 60 hoursbeing rostered in any one week.5.1.3. An indicative schedule of shipping is available well ahead ofeach working week. Employees will be tentatively assignedon the basis of the indicative shipping schedule, withaccounting for approved leave and, where practicable,personal requests that may be accommodated.5.1.4. The actual weekly work roster will then be further confirmedno later than the Friday of the week preceding.Provided however, the Company necessarily reserves theright to vary the roster due to the unplanned/uncertainsituations and incidental absences that belatedly arise fromtime to time. It shall endeavour to provide 24 hours minimumnotice for shift changes (unless otherwise agreed) and 8 hours'minimum notice for shift cancellations.Construction of the Agreement issue[7] The Employment Relations Authority determined that cl 5.1 requiredstevedores to be tentatively assigned to an actual roster with confirmation of the actualroster occurring on the Friday preceding the week of work. At the time ofconfirmation, stevedores should be notified of the days they would work and their startand finish times on those days.4 The Authority held that the existing practice of POAL,which involved the provision of text notification of start and finish times the daybefore the working day could not amount to the provision of an actual roster as it wasnot provided by the Friday preceding the week of work.54 ERA decision, above n 2, at [115].5 At [116].[8] The Employment Court arrived at the same conclusion. Referring to cl 5.1.1,Judge Perkins said:6The clause provides that the ordinary hours of work will be rostered to meetthis demand and that can only mean specifying commencement and end timesof such hours in a roster. If that is not done, the balance of the clause'sprovisions are unjustifiably fettered. Clause 5.1.2, by providing for rotationaland non-continuous shift work being included in the roster and the mandatoryprovision of rest time between shifts, cannot be rationally specified in theroster as required without the start and end times being included.The remaining clauses provide a process whereby the actual weekly roster isfinally concluded on the Friday of the week preceding commencement of thework and then operates for seven days. The balance between day and nightwork and recognition of fatigue factors is to be maintained.Complete flexibility is then provided to POAL by the proviso in cl 5.1.4,which recognises POAL's requirement to be able to vary or cancel rosters toaccommodate unpredictability of shipping movements into the ports and othervariable factors. "Change", "variation" and "cancellation" are unnecessarywords to have included unless, from the outset, the actual roster alreadyspecifies the times of work. The proviso also recognises that whereas24 hours' notice is desirable, where shorter notice is only possible, that ispermitted because the company is only required to "endeavour" to provide the24 hours minimum notice.[9] In its application for leave to appeal on this issue, POAL identified no fewerthan 10 findings in which it claimed the Employment Court had made an error of law.They were that:(a) The methodology of texting start and finish times within a period lessthan 24 hours prior to a shift beginning rendered the proviso in cl 5.1.4of the Agreement "otiose".7(b) The objective documentary material did not "alter the interpretationwhich can be given to the words of [cl 5.1] itself".8(c) The use of the word "confirmed" in text messages meant that worktimes were being confirmed rather than varied and this suggested thatPOAL was "under an obligation prior to the issuing of the text messages6 Employment Court judgment, above n 1, at [42].7 At [19].8 At [29].to have already notified employees of their start and finish times forrostered shifts".9(d) It was "hard to see how the later confirmation or notification of hourscould make the stevedores' planning easier".10(e) There was "nothing arising in comparing the two collectiveagreements, particularly when the exact wording of the presentagreement is considered, which would justify the argument that startand finish times would not need to be included in the final roster".11(f) POAL had "abrogated the clear meaning of the words of [cl 5.1] andthe proviso".12(g) The words of cl 5.1 were "clear and [provided] a logical progression inthe establishment of a final roster where days of work, hours of work,leave requirements and the right to vary or cancel to maintain flexibilityfor unpredictable shipping movements are all included".13(h) Use of extrinsic material did not lead to an alternative conclusion as tointerpretation.14(i) POAL's evidence that "if the present system of notification could notbe maintained and the company was ordered to comply by includingcommencement and end times of work in the roster, that would resultin a reversion to the old system, where employees were onsite withoutwork being available but being paid", was a "clear misconception ofthe operation of [cl 5]".159 At [30].10 At [37].11 At [39].12 At [41].13 At [43].14 At [44].15 At [46].(j) POAL was required to notify the hours of work in the Friday actualroster.16[10] This Court's jurisdiction to entertain appeals from decisions ofthe Employment Court is conferred and confined by s 214(1) of the EmploymentRelations Act 2000. That provides:214 Appeals on question of law(1) A party to a proceeding under this Act who is dissatisfied with adecision of the court (other than a decision on the construction of anindividual employment agreement or a collective employmentagreement) as being wrong in law may, with the leave of the Court ofAppeal, appeal to the Court of Appeal against the decision; andsection 56 of the Senior Courts Act 2016 applies to any such appeal.[11] As can be seen, appeals may only be brought to this Court alleging legal error.Further, s 214(1) effectively enacts that it is insufficient simply to allege thatthe Employment Court has adopted an erroneous construction of an individualemployment agreement or a collective employment agreement. But previousdecisions of the Supreme Court and of this Court have determined that it is appropriatefor this Court to consider questions of principle extending beyond a particular term ofa contract even though the context is that of an individual employment agreement orcollective employment agreement. The relevant decisions were recently discussed bythe Supreme Court in New Zealand Air Line Pilots' Association Inc v Air New ZealandLtd, where the Court quoted its earlier decision in Bryson v Three Foot Six Ltd to theeffect that the limit in s 214(1) of the Act does not prevent the Court on appeal fromconsidering "questions of interpretive principle".17[12] The Court in New Zealand Air Line Pilots' Association Inc emphasised that theerror alleged must extend beyond construction of an individual or collective agreement"to the principles and the approach in general that is taken".18 It also acknowledgedthat it can be difficult to draw the line. The difficulty was a reason to "reiterate the16 At [48].17 New Zealand Air Line Pilots' Association Inc v Air New Zealand Ltd [2017] NZSC 111,[2017] 1 NZLR 948 at [48], quoting Bryson v Three Foot Six Ltd [2005] NZSC 34, [2005] 3NZLR 721.18 At [62].need for the appellate court to identify the error and resist 'the temptation of turningerrors of interpretation into errors of principle merely because [the Court] sees theresult reached as wrong'".19[13] We note in addition that s 214(3) provides as follows:(3) The Court of Appeal may grant leave accordingly if, in the opinion ofthat court, the question of law involved in that appeal is one that, byreason of its general or public importance or for any other reason,ought to be submitted to the Court of Appeal for decision.[14] Because of this provision it is clear that even if an appeal meets therequirements of s 214(1), the question of law raised must be of general or publicimportance or have some other quality making it an appropriate subject of an appealto this Court. Because of s 214(3) it is good practice for parties to identify the actualquestion of law said to be of general or public importance. In the present case, thenotice of application for leave simply said that the specific grounds of appeal set outas paragraphs (a) to (j) (quoted above) involve questions of law of general and/orpublic importance "including the principles applicable to the interpretation ofcollective employment agreements". However, no specific questions were identifieduntil, prompted by submissions made by the respondent, counsel for POAL said thatthe question of law (relevant to the construction issue) was whether the EmploymentCourt identified the proper principles of contractual interpretation relating to collectiveagreements.20[15] We have not been satisfied that POAL has identified a question or questions oflaw appropriately the subject of an appeal to this Court. Clearly, the companydisagrees with the construction that the Employment Court has placed on the relevantprovisions of the Agreement. However, it has not demonstrated any relevant error ofprinciple or methodology in the process followed by the Employment Court.[16] Of the matters listed as paragraphs (a) to (j) of the notice of application forleave to appeal, none suggests an error in the application of relevant principles of19 At [66].20 We refer below to the question of law claimed to arise concerning the adjournment of thecompliance order application.construction. At [31] of the synopsis of submissions provided in support of the presentapplication, counsel says: the learned Judge erred in his summary and assessment of the relevantprinciples of interpretation, in particular by having insufficient regard toextrinsic materials in ascertaining the "objective intention" of the parties.[17] And in the subsequent paragraph: the approach taken by the Employment Court did not give sufficient importto the requirement that the Collective Agreement be interpreted so as to becommercially effective, workable and in accordance with the parties'intentions.This was followed by a quotation from a decision of the English Court of Appeal tothe effect that "when alternative constructions are available one has to consider whichis the more commercially sensible".21[18] However, the basis of the submission that the Employment Court had"insufficient regard" to extrinsic material is not clear. An applicant for leave to appealmust do more than assert the outcome of the Court's reasoning was wrong.[19] It is plain that the Court did take into account the position which applied underthe previous collective agreement. It thought a comparison between the expiredcollective agreement and the agreement which it was required to construe showed a"comprehensive variation" in the way that work was now allocated and notified atthe port.22 The Court also noted that there was a dispute between the parties as to theextent to which it was appropriate for the Employment Court to refer to extrinsicmaterial. It was in this context that it discussed the relevant Supreme Court authoritiesof Vector Gas Ltd v Bay of Plenty Energy Ltd and Firm PI 1 Ltd v Zurich AustralianInsurance Ltd (Zurich).23 Applying Zurich, the Judge said:24[27] While a different more nuanced approach arises from Zurich, that didnot exclude the suggestion that, even where there is no ambiguity in the21 Barclays Bank Plc v HHY Luxembourg SARL [2010] EWCA Civ 1248, [2011] 1 BCLC 336at [25].22 Employment Court judgment, above n 1, at [13].23 Vector Gas Ltd v Bay of Plenty Energy Ltd [2010] NZSC 5, [2010] 2 NZLR 444; and Firm PI 1Ltd v Zurich Australian Insurance Ltd [2014] NZSC 147, [2015] 1 NZLR 432.24 Employment Court judgment, above n 1.contractual provision, background material should be explored and should stillbe considered for context and as a cross-check.[20] The Judge recorded that it would be improper for the Court to consider anypurely subjective statement as to intended meaning. He held, however, that there wasobjective documentary material against which the context could be considered and thecross-check made. He reached the conclusion that apart from confirming the positionstaken by the parties in negotiations, the oral evidence called did not alter theinterpretation which could be given to the words of the clause itself. 25[21] The Judge recorded that three matters in particular had been relied on by POALas relevant contractual background. These were the fact that it was attempting toincrease the flexibility of the roster, the need to consider workers' health and safetyand the difference between the previous collective agreement and the currentagreement.26 For reasons which he gave, the Judge was not persuaded by the issuesraised under these headings to depart from the view he took about the clear meaningof the clause.27 Further, the material relating to negotiations confirmed that "thewording in the Schedule, read in its entirety, represents the final position negotiatedbetween the parties".28 Reference to the extrinsic material, in summary, did not leadto any alternative conclusion as to the appropriate interpretation.[22] The complaint that the Court had insufficient regard to the extrinsic materialsdoes not in any event give rise to a question of law. Providing in an appropriate caseextrinsic materials have not been ignored, it is not possible to turn a complaint thatinsufficient regard has been had to them into a question of law unless reference to theextrinsic materials must have inevitably led to a result contrary to that reached bythe Employment Court. We are far from satisfied that is arguable. The same appliesto the argument that the Employment Court did not give "sufficient import" to therequirement that the collective agreement be interpreted so as to be commerciallyeffective. There are limits to how far arguments based on commerciality can be25 At [29].26 At [31].27 At [32]–[39].28 At [44].taken.29 But in any event, the complaint that "insufficient import" was given to arelevant consideration is not a complaint going to error of principle.[23] For these reasons, we are satisfied that leave should not be granted to appealto this Court on the construction issue.Compliance order issue[24] We are also satisfied that leave should not be granted against the decision ofthe Court to adjourn the application that had been made for a compliance order.30The Authority had taken the same approach, noting as it did so that although the termof the collective agreement had expired, it was continuing in effect for the purposes ofs 53 of the Employment Relations Act.31[25] Counsel for POAL now suggests that a question of law could properly be posedasking whether the Court should have made findings regarding the appropriateness ofa compliance order, which it failed to do. We find that hard to accept, since the Courtdid not make an order and simply adjourned it. The only possible question of law thatcould be raised in the circumstances is whether the Court was obliged to either grantor decline the order, rather than adjourning it. We see that as very much a matter inthe Employment Court's discretion.[26] It is possible that in some circumstances an appropriate question of law mightbe fashioned along these lines, but POAL does not explain the source of the obligationit now suggests the Court had. Given that despite the expiry of the Agreement, theprovisions construed would continue to govern the relevant obligations of the parties,32and given that the Court had found that POAL was not complying with the Agreement,the effect of the Court's decision on the compliance order application was to givePOAL time to meet its obligations without a formal order to that end. We do not seehow this could possibly be described as a legal error.29 New Zealand Air Line Pilots' Association Inc v Air New Zealand Ltd, above n 17, at [77].30 Employment Court decision, above n 1, at [48].31 ERA decision, above n 2, at [117]–[122].32 Employment Relations Act, s 53.Result[27] The application for leave to appeal is declined.[28] The applicant must pay the respondent costs for a standard application on aband A basis and usual disbursements.Solicitors:Jennifer Mills & Associates Ltd, Auckland for ApplicantGarry Pollak & Co, Auckland for Respondent