WAITEMATA DHB V NZ PSA CA CA118/05

WAITEMATA DHB V NZ PSA CA CA118/05 4 October 2005IN THE COURT OF APPEAL OF NEW ZEALAND CA118/05BETWEEN WAITEMATA DISTRICT HEALTH BOARD Applicant AND NEW ZEALAND PUBLIC SERVICE ASSOCIATION Respondent Hearing: 20 September 2005 Court: Hammond, Chambers and Robertson JJ Counsel: H Fulton for Applicant B J Banks and T J Kennedy for Respondent Judgment: 4 October 2005JUDGMENT OF THE COURT A The application for leave to appeal is allowed. B Costs are reserved. REASONS(Given by Hammond J)Table of ContentsPara NoIntroduction [1]Background [2]The Employment Court decision [7]The questions sought to be advanced to this Court [15]Appeals to this Court from the Employment Court [18]The submissions of the parties(i) The applicant [21](ii) The respondent [22]Discussion [23]Introduction[1] This is an application under s 214 of the Employment Relations Act 2000 for leave to appeal to this Court, from a decision of the Employment Court.Background[2] The proceeding was brought by the New Zealand Public Service Association (the PSA) on behalf of members employed by the Waitemata District Health Board (the Board) at the Mason Clinic, a psychiatric facility in Auckland. [3] The terms and conditions of employment of persons at the Clinic have been governed by a series of collective agreements. The terms of these agreements have changed from time to time. [4] There has been a history of discussions between the parties, and consultations with staff, about a suitable uniform at the institution. Understandably, the institutional context has led an added dimension to that issue. [5] In any event, staff experienced difficulty acquiring uniforms or parts of uniforms. The Employment Court found the uniform supply problems had been a distinct problem. So much so, that most staff wore civilian clothing, or a mixture of clothing. Only a few wore a full uniform. [6] The dispute which reached the Employment Court did so by a somewhat oblique route: viz, the question was raised whether the Board had breached the terms of employment of staff by failing to provide them with a uniform. It was said this removed their ability to "elect" to wear civilian clothing. Staff said that the removal of this election in effect amounted to a direction that they should wear civilian clothing. If that was the case, staff would have been entitled to a civilian clothing allowance. The PSA sought a declaration from the Court to that effect.The Employment Court decision[7] The history of the various agreements, and internal considerations of this problem within the relevant institutions, are set out in the judgment of Judge Shaw (EmpC AK AC26/05 24 May 2005). [8] By way of brief summary, up until 1991 a relevant agreement, in what the Judge described as "prescriptive" terms, dealt affirmatively with the supply of uniforms by the Board. If uniforms were not supplied as required, there were certain clothing allowances for civilian clothing when such clothing was directed to be worn for therapeutic purposes or in the interests of patient care. The agreements from 1993 to 1994 dropped the mandatory requirements for the Board to supply nurses with a complete uniform, but continued to refer to uniforms. From 1993 through to a 2001 to 2003 agreement, there were references to clothing, with some allowances in that respect. That said, Judge Shaw's judgment clearly indicates that the issue of the wearing of uniforms was never distinctly "sorted out", although there were what she described as "sporadic efforts" on this issue. The Judge found that up to September 2002 the provision of uniforms was an "unresolved issue". [9] The Judge also detailed sporadic individual instances of claims for clothing allowances, emanating from the Taharoto Unit of the Board, at the North Shore Hospital. Some of these claims reached the Employment Court. The Board was faced with the prospects of having to make backpay of $174,000 with respect to Taharoto. [10] The particular claim which was the subject of the present proceeding before Judge Shaw was mounted under clause 8.4.2 of the 2001 to 2003 agreement. It provided as follows:8.4.2 Civilian Clothing Allowance An allowance of $3.04 per day (or proportionate part thereof for an employee employed part-time) shall be paid for each working day on which, because of therapeutic requirements or in the interests of patient care/rehabilitation an employee is directed by the employer to wear civilian clothing instead of the normal uniform. Provided that this allowance shall not be payable to staff wholly or mainly employed in an administrative role or staff who, with the employer's permission elect to wear civilian clothing on duty.[11] The PSA's argument before the Employment Court was that the failure to provide a uniform amounted to a direction that the staff should wear civilian clothing. If that was the case, it claimed staff were contractually entitled to an allowance under this clause. [12] The Board argued that staff had not been directed to wear civilian clothing. What had happened, or so it was said, had arisen as a result of what staff chose to do. [13] Judge Shaw found that while there was no explicit direction for staff to wear civilian clothing, there was "virtually no choice" for them. She concluded that the "unavailability and inaccessibility of uniforms [were] tantamount to a direction". Further, the Judge found that the Board had "deliberately" failed to direct staff to wear civilian clothing to avoid paying the allowance. [14] In the result, the Judge held that the Board was in breach of clause 8.4.2 until complete uniforms were made available to all staff in September 2002. She made a declaration to that effect.The questions sought to be advanced to this Court[15] The stated grounds of the application for leave to bring this appeal are as follows:The specific grounds of appeal are the following errors of law: 1. The finding that the applicant gave an implied direction to wear civilian clothes at times when uniforms were not (readily) available is erroneous in law and/or not open to the Employment Court. 2. There is no evidence on which to base a finding that the applicant gave, or is bound by, an implied direction to staff relating to clothing to be worn. 3. There is no evidence that staff were directed to wear civilian clothing because of therapeutic requirements or in the interests of the patient care/rehabilitation, so as to impose liability on the applicant to pay an allowance under clause 8.4.2 of the Waitemata District Health Board and PSA PACT Collective Agreement 1 February 2001 to 31 January 2003 ("the collective agreement").4. The finding as to the operation of the collective agreement is erroneous in law.[16] At the hearing, this Court observed that what must be posed on a leave application of this kind, are specific questions of law - which is not necessarily the same thing as giving (often generalised) "grounds of appeal". [17] Counsel then settled, by agreement, the following questions, which were handed up to us:1. Whether the Employment Court was correct to find liability for payment of the clothing allowance under clause 8.4.2 arises in default of a specific direction given for the purposes of the contract. 2. Whether the Employment Court was wrong in law to hold there is liability in the absence of therapeutic requirements or patient needs.Appeals to this Court from the Employment Court[18] As noted by the Supreme Court of New Zealand in the recent decision inBryson v Three Foot Six Limited [2005] NZSC 34, s 214 of the Employment Relations Act 2000 limits appeals to this Court to "significant questions of law" [19]. [19] The Supreme Court noted that "the construction of a document is a question of law". [20] The Court also said:[24] Appealable questions of law may arise from the reasoning of the Court on the way to its ultimate conclusion. If the Court were, for example, to misinterpret the requirements of s 6 - to misdirect itself on the section, which incorporates the legal concept of contract of service - that would certainly be an error of law which could be corrected on appeal, either by the Court of Appeal or by this Court. Later in this judgment we consider whether Judge Shaw has fallen into error in the view she took of the legal requirements of s 6. [25] An appeal cannot however be said to be on a question of law where the fact-finding court has merely applied law which it has correctly understood to the facts of an individual case. It is for the court to weigh the relevant facts in the light of the applicable law. Provided that the court has not overlooked any relevant matter or taken account of some matter which is irrelevant to the proper application of the law, the conclusion is a matter for the fact-finding court, unless it is clearly insupportable.[26] An ultimate conclusion of a fact-finding body can sometimes be so insupportable - so clearly untenable - as to amount to an error of law; proper application of the law requires a different answer. That will be the position only in the rare case in which there has been, in the well-known words of Lord Radcliffe in Edwards v Bairstow, a state of affairs "in which there is no evidence to support the determination" or "one in which the evidence is inconsistent with and contradictory of the determination" or "one in which the true and only reasonable conclusion contradicts the determination". Lord Radcliffe preferred the last of these three phrases but he said that each propounded the same test .The submissions of the parties(i) The applicant[21] Mr Fulton submitted that the judgment of the Employment Court is erroneous in law. He said:• The questions of law are: (a) The liability of the employer for payment of the allowance does not arise in default of a specific direction given for the purposes of the contract. (b) The Employment Court was wrong in law to hold there is liability in the absence of therapeutic requirements or patient needs.• The effect of the Employment Court's decision is that in default of supplying uniforms the employer is to be taken to give a direction to wear civilian clothing for therapeutic requirements or in the interests of patient care or rehabilitation, and thus pay the employee's allowance therefor.• The questions of law do not involve a construction of the employment agreement, but rather whether the allowance is payable on the facts as found. In other words, does the relevant clause apply to provide employees with the allowance where the conditions for its operation do not exist?• The civilian clothing allowance provision is contained in a collective employment agreement between the parties for 1 February 2001 to 31 March 2003 as follows:8.4.2 Civilian Clothing Allowance An allowance of $3.04 per day (or proportionate part thereof for an employee employed part-time) shall be paid for each working day on which, because of therapeutic requirements or in the interests of patientcare/rehabilitation an employee is directed by the employer to wear civilian clothing instead of the normal uniform. Provided that this allowance shall not be payable to staff wholly or mainly employed in an administrative role or staff who, with the employer's permission elect to wear civilian clothing on duty.• There was no dispute that the two conditions to be fulfilled for operation of the clause are: (a) a direction by the employer to wear civilian clothing; (b) the direction is given because of therapeutic requirements or in the interests of patient care/rehabilitation. (Refer judgment at [49].) It is not necessary to address the proviso that limits the application of the clause should it otherwise be operable.(ii) The respondent[22] Mr Banks submitted:• In essence, this is a proposed appeal against the Employment Court's construction of clause 8.4.2 of the collective agreement, and the findings of fact as to the context in which the issue arose.• The Employment Court heard evidence, and submissions on the interpretation of clause 8.4.2 and made findings of fact open to it on the evidence before it.• The approach taken by the Employment Court in interpreting clause 8.4.2 followed proper and established practice by focusing on the wording of the clause, in its context, and in the factual setting where the issue arose.• This is not one of the rare cases where the Employment Court erred in principle in its approach to the construction of the clause.• In any event the proposed appeal involves no issue of general public importance and there is no other reason why the appeal ought to proceed.• The proposed appeal falls wholly outside the scope of possible appeals, and accordingly this application for leave should be refused.Discussion[23] Section 214 of the Employment Relations Act 2000 has raised, and doubtless will continue to raise, difficulties of application precisely because it triggers the longstanding problem associated with identifying appropriate "questions of law" of the requisite character for an appeal. [24] In the result, we give leave in this case for the appeal on the questions as framed. We do so for these reasons. [25] First, the central issue raised by the first question is akin to a jurisdictional question: can there be any liability at all under the agreement, without a specific direction by the Board? That is a question of law. [26] The second question posed is also one of law. As Mr Fulton correctly put it, it goes to "whether the allowance is payable [at all] on the facts as found". [27] In the event we should come to the view that there are appropriate questions of law, Mr Banks endeavoured to persuade us that these are not "significant" questions of law, and that the dispute is essentially inter partes. [28] We do not accept these arguments. We understand the total sum at issue may be around $350,000.00; a Health Board has been found (by the Judge) to have "deliberately" avoided its obligations, and to have been impugned thereby; and the so-called "uniform" issue has been an ongoing one, in more than one institution. Whether a quite specific "directive" is required to trigger liability under a clause of this kind is one of real and ongoing significance. [29] Leave to appeal on the questions as specifically framed by counsel after the hearing is accordingly given. The grant of leave is not determinative of the important issue of whether the first question is a matter of construction of an agreement of a kind which is precluded by the Employment Relations Act 2000 for review in this Court. The hearing of the substantive appeal will have to consider whether, although there is a significant question of law raised, it is nevertheless of a kind which is not appealable. We heard only limited argument on this point, and it is not appropriate that we determine it now.[30] Costs are reserved.Solicitors: Martelli McKegg Wells & Cormack, Auckland for Applicant Kiely Thompson Caisley, Auckland for Respondent