THE CHRISTCHURCH PRESS, A DIVISION OF FAIRFAX NEW ZEALAND LIMITED V NZ AMALGAMATED ENGINEERING PRINTING AND MANUFACTURING UNION INC CA CA102/05

THE CHRISTCHURCH PRESS, A DIVISION OF FAIRFAX NEW ZEALAND LIMITED V NZ AMALGAMATED ENGINEERING PRINTING AND MANUFACTURING UNION INC CA CA102/05 1 August 2005IN THE COURT OF APPEAL OF NEW ZEALAND CA102/05BETWEEN THE CHRISTCHURCH PRESS, A DIVISION OF FAIRFAX NEW ZEALAND LIMITED Applicant AND NZ AMALGAMATED ENGINEERING PRINTING AND MANUFACTURING UNION INC Respondent Hearing: 25 July 2005 Court: Glazebrook, Chambers and O'Regan JJ Counsel: J Gibbs for Applicant J A Wilton for Respondent Judgment: 1 August 2005JUDGMENT OF THE COURT A We dismiss the application for leave to appeal. B We award costs to the respondent of $1500 plus usual disbursements. REASONS(Given by O'Regan J)Introduction[1] The applicant (Christchurch Press) seeks leave under s 214 of the Employment Relations Act 2000 to appeal against aspects of a decision of the Employment Court (NZ Amalgamated Printing and Manufacturing Union Inc v The Christchurch Press, a division of Fairfax New Zealand Limited, EmpC CHCH CC7/05 6 May 2005, Chief Judge Goddard). The respondent (the Union) opposes the granting of leave.Statutory test[2] Section 214 provides:214 Appeals on question of law(1) A party to a proceeding under this Act who is dissatisfied with a decision of the Court (other than a decision on the construction of an individual employment agreement or a collective employment agreement) as being wrong in law 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. (2) A party desiring to appeal to the Court of Appeal under this section against a decision of the Employment Court must, within 28 days after the date of the issue of the decision or within such further time as the Court of Appeal may allow, apply to the Court of Appeal, in such manner as may be directed by rules of Court, for leave to appeal to that Court. (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. (5) In its determination of an appeal, the Court of Appeal may confirm, modify, or reverse the decision appealed against or any part of that decision. (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.[3] In order to obtain leave, Christchurch Press needs to establish that: (a) The proposed appeal involves an error or errors of law; (b) The Employment Court decision was not a decision on the construction of an individual employment agreement or collective employment agreement; and (c) The appeal raises an issue which, by reason of its general or public importance or for any other reason, ought to be submitted to this Court for decision.Factual background[4] Christchurch Press and the Unions are parties to a Collective Employment Agreement which covers, among others, 13 employees of Christchurch Press who are engaged as night printing and publishing staff. These 13 staff members are members of the Union. [5] The night shift printing and publishing staff start work at 10pm and 11pm respectively. They normally finish work at between 4am and 5am on week days and between 5am and 7am on Saturdays. [6] The reason that these work hours apply is because historically the night shift staff have worked on a "job and finish basis": when the printing of the relevant day's edition of The Christchurch Press is completed and necessary maintenance tasks have been undertaken, the night shift staff are permitted to finish work and go home. [7] Christchurch Press wishes to undertake printing of other publications when the printing presses are not being used to print the Christchurch Press, and wants the night shift workers to work eight hour shifts on Wednesday and Thursday mornings. When this proposal was put to the Union, the Union advised Christchurch Press that its members would not work beyond their "normal" finish times, because the practice of "job and finish" was part of their employment agreement.[8] Christchurch Press then filed a statement of problem with the Employment Relations Authority asking the authority to resolve the dispute as to the interpretation of the Collective Employment Agreement. The issue for determination by the Authority was whether the Collective Employment Agreement allowed Christchurch Press to require the night shift workers to work an eight hour shift. The Authority ruled that the job and finish arrangement was not a term of the employment contract applying to the night shift workers, and ruled in favour of the Christchurch Press. [9] The Union then sought a de novo hearing in the Employment Court.The Employment Court decision[10] In the Employment Court, the Union sought determinations that: (a) The job and finish agreement was an individual term of employment agreed with each of the night shift workers engaged before April 2003; (b) This individual term of employment was not inconsistent with the terms of the Collective Employment Agreement so that Christchurch Press could not require the night shift employees to work an eight hour shift other than under the job and finish agreement unless the workers agreed. [11] The Union's case was based on s 61(1) of the Employment Relations Act which provides:61. Employee bound by applicable collective agreement may agree to additional terms and conditions of employmentThe terms and conditions of employment of an employee who is bound by an applicable collective agreement may include any additional terms and conditions that are – (a) mutually agreed to by the employee and the employer, whether before, on, or after the date on which the employee became bound by the collective agreement; and(b) not inconsistent with the terms and conditions in the collective agreement.[12] The Chief Judge reviewed the evidence before him which, in the case of the witnesses called by the Union, was to the effect that night shift workers had been employed on an understanding that the job and finish arrangement would apply. The witnesses for the Christchurch Press acknowledged that the night shift workers had finished work when work associated with the production of the relevant day's edition of The Christchurch Press was completed, and that managers would have told those workers that they would normally finish work when the job was finished. However they denied that this was a matter dealt with at the time the workers were employed. They said that Christchurch Press' operational requirements now were such that it was necessary to use the printing presses during the night shift for printing of publications other than The Christchurch Press, and it was for this reason that Christchurch Press wished the night shift workers to work a full eight hour shift. [13] The Chief Judge reviewed the relevant terms of the Collective Employment Agreement and noted the following: (a) Clause 1.13, which protects the rights of employees under the previous Collective Employment Agreement, which expired in 2000. It says that, unless otherwise specified in the Collective Employment Agreement, no employee covered by the earlier agreement "shall have their wages, holidays or other entitlements reduced by virtue of the coming into operation of this agreement". (b) Clause 1.14, which provides ("inconveniently for the union's position", in the words of the Chief Judge):This agreement prescribes the full and entire understanding of the Employer and the Union regarding the contract of service and the terms and conditions of employment applying to Union members coming within the coverage of this agreement, and any other understandings, matters or agreements that may have existed in regard to terms and conditions of employment, whether formal or informal, are hereby superseded or terminated in their entirety.(c) Clause 2.1, which says that employment is to be in general on a weekly basis and for the minimum wages to be paid for 40 hours. (Under cl 2.2, ordinary hours were to be counted continuously each day from the time of starting work, excluding one meal interval). (d) Clause 2.3, which provided that the employer could fix the times for starting stopping work according to the requirements of a particular production area. A week's notice is required for any changes in that regard. The clause also says that the parties can agree to vary hours of work collectively or individually so as to suit the requirements of either party. (e) Clause 2.4.3, provided that the night shift was one in which the starting time or finishing time is between 10.30pm and 7am. (f) The overtime provision, which provided that overtime would be payable where work is undertaken in excess of eight hours in any one day. [14] The Chief Judge noted that the Union's argument depended on s 61: the counsel for the Union did not argue for a customary term. Notwithstanding this, the Judge embarked on a discussion of customary terms, referring to the well known decision of Whitcombe and Tombs v Taylor (1907) 27 NZLR 237. The Judge noted that one of the requirements of that decision, that the custom be a general custom rather than one applying to a particular employer, did not apply in the present case as the job and finish arrangement was peculiar to Christchurch Press. He also noted that the test applied in the Whitcombe and Tombs case for an agreement based on custom of the trade had considerable similarity with the rule for implying terms into contracts. [15] The Chief Judge reviewed the evidence from employees and from Christchurch Press representatives. He concluded:It seems clear on the evidence that in pre-employment discussions the employees will have been told about the job and finish nature of the work.In some cases at least that will have induced them to take on the jobs. Such statements cannot be dismissed as mere representations because there is no difference in effect between a breach of a representation and a breach of a term of a contract. Both have the same consequences.[16] Applying s 61, the Judge concluded that long serving employees of Christchurch Press had been employed to work on putting out The Christchurch Press newspaper and were employed to do so on a job and finish basis. He said that a work practice of 30 years standing could not be dismissed as merely the operation of grace and favour. [17] Having considered the evidence referred to earlier, he concluded as follows at [34]:On the totality of the evidence, I find that the night shift printing and publishing employees who are members of the union were employed only upon The Press and on the footing that they could go home when the paper was printed and the press cleaned.[18] He said that cl 1.14 did not avail Christchurch Press in a situation where the understanding or agreement abolished by the clause was immediately reinstated by the operation of cl 1.13, which preserved the entitlements of the employee under the previous collective employment contract which expired in 2000. [19] Turning to the question of consistency, the Judge said the question is whether the individual term as to job and finish could co-exist with the other express terms of the Collective Employment Agreement. Having referred to cl 1.13, and also the provisions of cls 2.1, 2.3 and 2.4.3, the Judge concluded that there was no inconsistency. He said the 40 hour requirement in cl 2.1 was a minimum, and there was nothing to prevent the employer from agreeing to accept less than 40 hours work. He said cl 2.3 could not be used to abolish a long standing contractual arrangement with individual employees and could be used only to vary hours of work, not increase them. He noted that cl 2.4.3 defined the night shift in a flexible manner, without prescribing actual starting and finishing times. He therefore concluded that there was nothing in the Collective Employment Agreement which was inconsistent with the job and finish arrangement.Submissions for Christchurch Press[20] On behalf of Christchurch Press, Ms Gibbs said that the judgment of the Employment Court was wrong in point of law in two respects, namely: (a) In its failure to apply orthodox principles of contractual interpretation (in particular the test in BP Refinery (Westernport) Pty Limited v Hastings Shire Council (1977) 16 ALR 363) for implication of terms and/or in relation to findings regarding custom and practice which are inconsistent with the plain wording of the Collective Employment Agreement; and (b) In failing to give s 61(1)(b) its intended legislative meaning and/or misinterpreting the requirements of s 61(1)(b) and thereby misdirecting itself with respect to the section by finding that the implied term was not inconsistent with the terms of the Collective Employment Agreement. [21] She said that the proviso to s 214(1) precluding an appeal against a decision on the construction of an individual or collective employment agreement did not apply to these errors of law. She argued that the approach taken by the Chief Judge was not the application of orthodox principles of contractual interpretation, invoking the decision of this Court in Secretary for Education v Yates CA116/03 21 December 2004. She also argued that the issues were ones of general and public importance. Tests for the implication of terms in the BP Refinery case was a matter of importance to all employers and employees and their advisers and many other employers and employees will have similar hours of work clauses in their collective employment agreements.Submissions for the Union[22] On behalf of the Union, Mr Wilton emphasised that the Union's case in the Employment Court was based entirely on s 61, and that the finding of the Employment Court was a ruling as to the application of that section. He said thatany comments made by the Court in relation to custom and practice and implied terms was obiter. He said the Employment Court had applied a conventional legal approach to the formation of a contract and relied on findings of fact which were supported by evidence when concluding that the mutuality requirement of s 61(1)(a) was met. [23] In relation to the consistency requirement of s 61(1)(b), Mr Wilton said there was nothing in the judgment to suggest that the Employment Court had misdirected itself under the section. He said the test of "co-existence" was in accordance with well established principle, citing NZ Meat Processors etc IOUW v Alliance Freezing Co (Southland) Limited [1991] 1 NZLR 143. [24] Accordingly Mr Wilton submitted that there was no basis on which leave could be granted in this case.Discussion[25] We agree with Mr Wilton that the Employment Court decision is confined to the application of s 61, and does not therefore give rise to any question in relation to the implication of terms or terms arising from custom or practice. The discussion of the Whitcombe and Tombs case in the Employment Court decision is somewhat enigmatic in that respect, because it is clear that the Chief Judge could not, and did not apply that decision, nor did he suggest that the job and finish arrangement was an implied term of the Collective Employment Agreement. Rather, he determined on the basis of the evidence before him that there was an agreement that the job and finish arrangement would apply which was a feature of the individual employment contracts of the night shift workers, thus fulfilling the requirements of s 61(1). We agree with Ms Gibbs that there was no basis on which the Chief Judge could have implied a job and finish term into the Collective Employment Contract as it applied to the individual night shift workers under the test in the BP Refinery case. We also agree that there was no proper basis for finding that the job and finish term was a term which arose through custom and practice under the Whitcombe and Tombs test. But we also find that the Chief Judge did neither of these things. Accordingly the first question of law raised by the Christchurch Press does not, in fact, arise.[26] As to the second issue, the point of law said to arise is the application of s 61(1)(b) in the present case, but that is the application of an established legal test to particular facts and does not meet the s 214 test: Bryson v Three Foot Six Limited[2005] NZSC 34 at [25]. While there may be room for disagreement with the conclusion reached by the Chief Judge, it cannot be said that the exercise in which he engaged was unorthodox or involved any question of principle: the Yates case does not therefore apply. Accordingly, there is no basis on which this Court could properly grant leave under s 214 in respect of this question either.Result[27] Accordingly, we decline leave to appeal.Costs[28] We award costs to the Union of $1500 plus usual disbursements.Solicitors: Simpson Grierson, Wellington for Applicant J A Wilton, Lower Hutt for Respondent