TAYLOR PRESTON LIMITED V NEW ZEALAND MEAT WORKERS UNION AND RELATED TRADES UNION CA CA285/2009

TAYLOR PRESTON LIMITED V NEW ZEALAND MEAT WORKERS UNION AND RELATED TRADES UNION CA CA285/2009 25 August 2009IN THE COURT OF APPEAL OF NEW ZEALAND CA285/2009 [2009] NZCA 372BETWEEN TAYLOR PRESTON LIMITED Applicant AND NEW ZEALAND MEAT WORKERS UNION AND RELATED TRADES UNION RespondentCA286/2009AND NEW ZEALAND MEAT WORKERS AND RELATED TRADES UNION Applicant AND TAYLOR PRESTON LIMITED Respondent Hearing: 18 August 2009 Court: Glazebrook, Robertson and Ellen France JJ Counsel: P C Chemis and J B Opie for Taylor Preston Limited P Cranney and S R Mitchell for New Zealand Meat Workers & Related Trades Union Judgment: 25 August 2009 at 11.30 amJUDGMENT OF THE COURT A Leave is granted on the single issue whether the Employment Court Judge was in error in determining that the preference ended on 29 March 2007 and not on or about 27 November 2008.B The New Zealand Meat Workers and Related Trades Union is entitled to costs for a standard application on a band A basis and usual disbursements.____________________________________________________________________REASONS OF THE COURT(Given by Robertson J) [1] Two applications for leave to appeal were heard together. Both applications arise out of a decision of Judge Shaw delivered in the Employment Court at Wellington on 22 April 2009 (WN WC8/09, WRC30/07, WRC 22/08 22). [2] Taylor Preston Limited ("Taylor Preston") challenges a finding that it acted unlawfully in terms of s 9 of the Employment Relations Act 2000 ("the Act"). Its application for leave was opposed. [3] The New Zealand Meat Workers and Related Trades Union ("Union") challenges the Judge's finding of the date at which this unlawful conduct ended. Leave on that issue was not opposed, but, on being pressed by the Court, Mr Chemis for Taylor Preston, said that he would oppose leave, if the s 9 issue did not proceed to a hearing. [4] Under s 214 of the Act, the particular questions of law upon which the opinion of this Court is sought were identified as: (a) Was there a preference in terms of s 9 where the same terms and conditions were available to Union members and non-union employees, the only difference being the type of agreement offered? (b) If there was a preference, is the preference unlawful if the employer's subjective reason for it does not involve favouring non-unionemployees, or disadvantaging union members, because of their Union or non-union status? [5] On the second proposed appeal, the issue is simply that the Judge made a mistake as to the date upon which the unlawful preference ended. The Union asserts that this was a clear mistake on the face of the record. [6] Taylor Preston operates a meat works in Wellington which employs several hundred workers. About half of them are Union members and half non-union workers. [7] Prior to 2005 there had been collective employment agreements ("CEAs") governing the Union workers' employment, and in May of that year the Union began bargaining for a new CEA. At the time, the terms of conditions of employment for both Union and non-union workers were the same. [8] The bargaining process was not fruitful. An offer of a wage increase of ten per cent spread over three years was rejected by the Union. [9] The same offer – a four per cent increase in the first year and three per cent increases in each of the next two years – was then made to non-union workers, most of whom signed up on individual employment agreements ("IEAs"). [10] In early 2006, with most non-union workers being paid higher rates than Union members, Taylor Preston were notified of planned strike action. There were further negotiations which were fruitless and terminated on 13 March 2006. [11] The consequence was that the current CEA ended and the Union workers reverted to IEAs on the same terms as the expired CEAs. [12] More unsuccessful negotiations followed. Finally, the Union told Taylor Preston that it would be advising its members to ask to be signed on to the IEAs on the offered terms, and that it would reinitiate collective bargaining later. Taylor Preston was not happy with this prospect. It did not want the Union workers to take the increase on an IEA basis, and then agitate later, on a collective basis, for agreater increase. It therefore refused to offer the Union workers the increase on an IEA basis. [13] On 22 May 2006, the Union commenced proceedings in the Employment Relations Authority, but a hearing was adjourned until 24 April 2007. In the meantime, further negotiations took place. Taylor Preston offered the CEA to the Union twice more in August 2006, and made an additional offer of back pay. In at least one of these cases, the offer was for the same pay rates as under the IEAs but with a time differential as to when these would apply. All offers were rejected. [14] Taylor Preston decided to change tack. On 29 March 2007 it made an offer to the Union of higher pay rates on an IEA basis. This meant that by accepting the offer Union workers were not precluded from collective bargaining at a later date. However, the offer was made on the condition that the Union discontinue legal action. It was thus a conditional offer only. The Union was authorised by its members to accept the offer on the condition that the Employment Relations Authority be allowed to deal with the question of back pay at the hearing scheduled for 24 April 2007. Taylor Preston did not agree to that term. [15] Some Union workers then left the Union, but were denied the pay rise. The Employment Relations Authority recorded that, in November 2006, Taylor Preston agreed that all workers who left the Union after 13 March 2006 (being the end of collective bargaining) would be paid the new rate offered, even if they subsequently re-joined the Union. [16] The Employment Relations Authority, in Meat and Related Trades Workers Union of Aotearoa Inc v Taylor Preston Ltd ERA WN WA118/07 23 August 2007, found that Taylor Preston clearly expressed a preference for non-union workers, but that Taylor Preston's concerns were bargaining concerns and not union membership concerns. That meant that Taylor Preston's preference was not unlawful in terms of s 9.[17] The Union applied to the Employment Court for a hearing only as to whether the Authority had made errors of law and fact. Judge Shaw in the Employment Court recorded:[10] The union does not seek a full hearing of the entire matter but a hearing only as to whether the Authority made errors of law and fact. The alleged errors of law in the Authority's determination are: 1. Its conclusion that, if an unlawful preference were held by the Authority to exist within the meaning of s9 of the Act, the effect of the Authority's conclusion would be to retrospectively deprive the on-members of the preferential treatment. 2. Its conclusion that the defendant's motive for the preferential treatment was not union membership. 3. Its conclusion that, the defendant's ongoing position – that is, that employees can resign from the union, take the pay rise and rejoin it – is not an unlawful preference or unlawful discrimination. 4. Its conclusion that because union members are able to accept a 3- year collective that would "substantially mirror" the individual agreement, there is no unlawful preference. [11] The alleged errors of fact in the Authority's determination are: 1. Its conclusion that employees were not told that to get a pay rise they had to leave the union. 2. Its conclusion that there was no evidence before it that union member employees had been involved in union activities in terms of s107 of the Act. 3. Its conclusion that the defendant's motive for the preferential treatment was not union membership.[18] Judge Shaw made the following declaration:[66] The individual employment agreements entered into between the defendant and its non-union member employees conferred a preference on those employees in relation to their conditions of employment because those employees were not members of a union. That preference began in March 2006 and ran until 29 March 2007 when the company made an open offer to the union member employees.[19] The first question upon which Taylor Preston seeks leave to appeal to this Court contains the unidentified premise that the terms and conditions available to both Union and non-union workers were the same, and therefore that there was no preference. Mr Chemis submitted that the only difference between what was offeredto Union members and what was paid to non-union members was the type of contract – ie a CEA for Union members and IEAs for non-union members. That submission, however, does not accord with the factual findings of the Employment Court. Judge Shaw, having recited the evidence and submissions made, relevantly said:[52] . . . However, from 13 March when bargaining ended, although all of the company's employees were then covered by IEAs, the non-union member employees had the advantage of higher payments than their fellow employees doing the same work. . . .[20] Further, the Judge said at [58]:I conclude at the point when bargaining ended and the company announced that union member employees would remain indefinitely on their existing terms and conditions while non-union member employees were offered and took increased pay rates, the preference was prohibited. It was expressly and unequivocally because of union membership.[21] Later she said at [60]:Again, following withdrawal from bargaining the union member employees were no longer covered by a collective agreement but were told that union members would not be offered the same individual terms and conditions as their co-workers. The end of bargaining meant that they were to remain on their existing terms based on the expired collective while their co-workers received an increase.[22] And at [64] she said:The Authority found that the offers made to the union substantially mirrored the individual agreements. That is the case but only up to 13 March 2006 after which the offers were only available to non-union member employees.[23] On the Employment Court's findings, it is not the position that the only difference between the terms and conditions available was the type of agreement offered. These factual findings are not susceptible to appeal. [24] Mr Chemis pointed to evidence which suggested that a CEA containing the same terms as the IEAs offered to non-union members remained available for acceptance. There was, however, evidence that went the other way. The findings were thus available to the Employment Court.[25] Taylor Preston's first stated question of law will not advance its case because it is at odds with the clear factual findings in this case. [26] As to the second question, this is also at odds with factual findings in the Employment Court that the preference was given to non-union members because they did not belong to the Union. That is sufficient to meet the test in s 9. There is no warrant in the wording of that section to require a further inquiry into subjective motive once the statutory test is met. [27] As far as the issue of the date on which the preference was found to have ceased is concerned, it is arguable that there is an error on the face of the record in that the offer was conditional – see at [14]. The offer required Union members to accept the disparity that had occurred to date. This is an issue of importance, with implications for the remaining aspects of the dispute, which are continuing in the employment arena. [28] Leave is accordingly granted on the single issue whether the Employment Court Judge was in error in determining that the preference ended on 29 March 2007 and not on or about 27 November 2008. [29] It may be that the parties can reach a mutually acceptable solution to this issue without the need for an appeal to be heard which can be applied in the ongoing resolution of their dispute. [30] The Union is entitled to costs for a standard application on a band A basis and usual disbursements.Solicitors: Buddle Findlay, Wellington, for Applicant Oakley Moran, Wellington, for Respondent