Air New Zealand Ltd v MacIntosh
[2002] NZCA 57
•14 February 2002
| IN THE COURT OF APPEAL OF NEW ZEALAND | CA19/01 |
| BETWEEN | AIR NEW ZEALAND LIMITED |
| Appellant |
| AND | B H MACINTOSH, A T KING, C R WOODAMS, C J MALCOLM, D I MCISAAC, W M WAKELIN, G N BRIDGER, G B HAYMAN, G J BAYLEY, N L STEVENSON, C WRIGHT, R B MALONEY, AND I DREW |
| Respondents |
| Hearing: | 17 October 2001 |
| Coram: | Gault J Tipping J McGrath J |
| Appearances: | K M Thompson for Appellant R McCabe for Respondents |
| Judgment: | 14 February 2002 |
| JUDGMENT OF THE COURT DELIVERED BY MCGRATH J |
Introduction
On 18 October 2000 the respondents, 13 pilots at that time employed by the appellant Air New Zealand, applied to the Employment Court to have direct access to that Court for the hearing and determination of certain personal grievances. These had arisen in 1990 when the pilots were made redundant. The grievances were not, however, formally submitted to Air New Zealand until 8 October 1996. Air New Zealand Ltd applied on 25 July 2000 to have the grievances struck out on the basis of unfairness to it arising from the delay in bringing the personal grievances. It also opposed the granting of leave on substantive grounds. In response the respondents brought their application to the Employment Court.In that Court Chief Judge Goddard granted the respondent pilots’ application for direct access under s218(1)(a) of the Labour Relations Act 1987. He also dismissed the strike out application holding that despite the delays he was not persuaded that justice could not still be done. Air New Zealand now appeals against that judgment.
Background facts
In August 1990 Air New Zealand announced that, owing to the phasing out of its fleet of F27 aircraft, 74 pilots would be made redundant. The agreement to which the pilots and the airline were parties indicated that the selection of pilots to be made redundant would be in reverse order of seniority. However, Air New Zealand decided to depart from this principle in the case of those pilots who had earlier agreed to a variation of their individual employment contracts, under which they became entitled to fly the airline’s new B747-400 aircraft. Such pilots, whatever their length of service and consequent positions on the seniority list, would not be included among those to be made redundant if there were a surplus of pilots. The 13 pilots who are appellants had declined to sign the variation and were made redundant as a consequence of less senior pilots who had signed the variation being retained. Had the selection been made according to reverse order of seniority without exceptions the appellants would not have been made redundant.
Air New Zealand’s approach was based on its view, that while the pilots’ contracts provided that redundancies would normally occur in reverse order of seniority, the circumstances at the time were such that the procedures which normally would be undertaken should not apply. There were, the airline believed, greater efficiencies gained by retaining the 13 pilots who had signed up to variations of their contracts, than by applying reverse seniority to effect all redundancies required.
At the time the appellants approached their union, the New Zealand Air Line Pilots’ Association (NZALPA), for assistance but the union refused to provide it, advising in a letter dated 10 December 1990:
Given the emphasis the Court of Appeal has placed on the need to allow an employer to deal with the effects of redundancy without undue legal restrictions, it seem unlikely that your personal grievance has the slightest chance of success. The Court has emphasised that an employer must be allowed to provide for the most efficient continuation of his or her business. That is what Air New Zealand allege they were setting out to do in exempting signees and second officers from redundancy. That allegation, in the redundancy climate engendered by the Court of Appeal, is very unlikely to be overturned in the course of any personal grievance proceeding.
The advice at that time was, it seems, based on the view that was taken by NZALPA of the effect of a decision of this Court, delivered three months earlier: Hale & Sons Ltd v Wellington, etc, Caretakers, etc, IUW [1991] 1 NZLR 151. The affidavit evidence given by one of the appellants, Captain MacIntosh, in opposition to the application to strike out was that it was only when the Employment Court delivered a subsequent decision in Dwyer v Air New Zealand Limited [1996] 2 ERNZ 435 that the pilots considered that there had been a development in the law in their favour which indicated there might be merit in their grievances. As a result of this fresh perception the pilots notified their grievances to Air New Zealand by letter dated 8 October 1996, some six years after they first arose. Air New Zealand replied on 14 November 1996 stating that their grievances were out of time. Later, however, Air New Zealand accepted that assertion to be incorrect, there being no statutory limitation period applicable to personal grievances.
In the meantime there was no further contact between the parties concerning the grievance until NZALPA wrote to Air New Zealand on 7 May 1997 seeking its co-operation in the setting up of a grievance committee, as required under the Labour Relations Act 1987. This letter was apparently ignored by Air New Zealand. On 16 July 1997 NZALPA wrote again to the airline naming its representatives for the committee. NZALPA then wrote to the Employment Tribunal on 26 September 1997 requesting the setting up of a grievance committee. Apparently no action was taken on this letter. Nineteen months later, on 22 April 1999, NZALPA wrote to Air New Zealand amending the remedies it was seeking for the grievances in effect to have the current service of the pilots (they having been re-employed in the meantime) treated as continuous from the respective dates of their original employment. It appears that at this point the Tribunal could not find its file and that NZALPA provided the Tribunal with copies of the previous correspondence. NZALPA received a similar request for a copy of the correspondence from Air New Zealand on 18 May 1999 and responded to the company’s request the following day.
Again another lengthy period elapsed. In February 2000, NZALPA requested the Tribunal to inform it about progress and once more it had to provide the Tribunal with copies of the documents filed with it. On 6 March 2000 the Tribunal wrote offering dates for a grievance committee and an agreed hearing date of 27 July was soon confirmed. Shortly before the fixture date Air New Zealand filed an application in the Employment Court for orders striking out the personal grievances. As a result of this application, the Tribunal had deferred the scheduled grievance committee meeting.
The Decision of the Employment Court
In the Employment Court Air New Zealand, argued that the proceedings should be struck out because the pilots had not notified their grievances until more than six years after the events that gave rise to them. They had accordingly not complied with requirements of timeliness under the Seventh Schedule of the Labour Relations Act. It was also alleged that the pilots had generally delayed pursuing their grievances following notification on 8 October 1996.
There was evidence from the Human Resources Manager of Air New Zealand that, because of the lapse of time since the events in issue, Air New Zealand possessed very limited records concerning them. Furthermore the airline’s Flight Manager in 1990, Captain Eden, was no longer employed by the company and, indeed, was currently an advocate for the Federation of Air New Zealand Pilots, an employee organisation. Overall it was submitted that Air New Zealand was severely prejudiced in the defence of its grievance by the delays. Counsel also argued that in the circumstances the grievances could not be brought under the Labour Relations Act 1987 by individual employees, but only by a union, unless a court had ordered otherwise.
In his judgment Chief Judge Goddard held that to the extent that the application to strike out was based on the pilots’ delay, it could not succeed:
The right to bring a personal grievance is a statutory right which cannot be taken away by the Court by the exercise of its good conscience jurisdiction, even if I were persuaded that delay alone constituted a sufficient ground in equity to bar the grievances in question…
In the Chief Judge’s view it was the union rather than the pilots which had initially considered their personal grievances to have no substance. It had failed to take them up with the employer. As a result the union could not, six years later, change its mind. However he concluded that the union’s position did not prevent the pilots from seeking leave from the court to proceed. The Chief Judge then added:
In any event I am not persuaded that justice cannot still be done. It appears that the pilots and the union have extensive documentation that the company can obtain either voluntarily or on discovery and I am not convinced that the difficulties with regard to Captain Eden’s evidence are as great as has been made out…
Finally, it has to be borne in mind that the pilots will also not be without their own difficulties in establishing their grievances after this lapse of time.
The company’s application to strike out the grievances must therefore be dismissed. The grievances are, in any event, not yet before the Court and therefore cannot be struck out by the Court.
Chief Judge Goddard next addressed whether the pilots were entitled under the Act to bring the application they had made in October 2000 for direct access to the court. That was governed by s218 (1)(a) of the Labour Relations Act 1987 which permitted direct access to the Labour Court in its discretion by a worker having a grievance which it had been unable to have addressed promptly. We set out the statutory provision later in this judgment.
NZALPA had investigated the matter in 1990, discussed its findings with the workers concerned, and come to the conclusion that the grievances lacked substance. The Chief Judge nevertheless rejected the contention that there had been no failure on the part of the union to act or to act promptly. In support of this conclusion he cited Air NZ Ltd v Johnston [1989] 3 NZLR 641, a decision of this Court under s117(3A) of the Industrial Relations Act 1973. This provision was the equivalent in that Act of s218(1)(a) of the Labour Relations Act 1987.
The Chief Judge accordingly held that the refusal of the union to pursue the pilots’ grievance in 1990 was a “failure to act” in terms of section 218 of the Labour Relations Act and that the Employment Court had jurisdiction to allow direct access under that provision. With regard to the merits of the pilots’ application his Honour said:
It seems, however, that the company does have something of a case to answer in that there was apparently a contract that contemplated redundancies in strict reverse order of seniority, or normally in strict reverse order of seniority, and the company admits that it used some other basis but contends that it did so because this was an abnormal situation. On the other hand, the pilots say that the company’s motives were suspect and that it discriminated against them for having refused to sign a contract that the company desired. It seems to me that the pilots are entitled to their day in court although this does not mean that they will necessarily succeed. I cannot justify depriving them of that right in reliance on their delay or any other discretionary factor. The discretion to grant leave is intended to be applied for the benefit of workers and was always used liberally in their favour.
He accordingly gave the pilots the leave they sought under s218(1)(a) of the 1987 Act to have their grievances heard and determined by the Employment Court.
Submissions in this Court
In this Court Mr Thompson, for Air New Zealand, submitted that the respondents were unable to show there was a failure to act as opposed to a refusal to act in terms of s218(1)(a). In the alternative Air New Zealand submitted that there was insufficient evidence to support the conclusion there was a failure to act.
Air New Zealand further argued that the Chief Judge had exercised his discretion in a manner that was contrary to principle, and failed to take into account the following relevant considerations:
(i)The requirement under the Labour Relations Act for promptness at every stage in the personal grievance context, from initial notification through to remedy.
(ii)The delay of more than six years from the date of any grievance before any notification was given to Air NZ of the pilots’ grievances.
(iii)The delay of more than ten years in filing an application for direct access to the Labour Court.
(iv)The effect of the delay on Air NZ and its ability to defend the grievances.
On the merits of the application Air New Zealand also argued that the Chief Judge had failed to consider the absence of any explanation for the delay. In challenging the finding there was no detriment, Air New Zealand pointed to its lack of documents and the difficulties it would face with regard to Captain Eden’s evidence.
Mr McCabe, for NZALPA generally supported the reasoning of the Employment Court contending that the union’s original decision not to pursue the grievance was clearly a “failure” having regard to the purpose of s218.
Mr McCabe also submitted that the Chief Judge had exercised his discretion according to principle and had taken account of all the relevant considerations, both in determining the application to strike out and the direct access application. On the question of detriment the respondent emphasised that Captain Eden would not be the only witness available to the appellant. Two others, still employed by the airline, were said to have been involved at the time in the redundancy process.
Decision
The Labour Relations Act 1987 was repealed by s174 of the Employment Contracts Act 1991. The 1991 Act itself was repealed by s241 of the Employment Relations Act 2000. It was common ground, nevertheless, during the argument of this appeal that transitional provisions in each statute enabled the Employment Court to determine the application substantively before it under s218 of the 1987 Act. We proceed, as did the Employment Court, on that basis, observing that provisions in the Employment Relations Act 2000 for personal grievances are substantially different. Section 218 so far as is relevant to this appeal provides as follows:
218. Direct access to Labour Court - (1) A worker who considers that he or she has grounds for a personal grievance may, with the leave of the Labour Court, apply directly to the Labour Court for the hearing and determination of that grievance if-
(a) The worker, being a member of a union, is unable to have the grievance dealt with or is unable to have it dealt with promptly, because of a failure on the part of the worker’s union or the employer or any other person to act or to act promptly in accordance with the procedure applicable in respect of the grievance; or
….
(2) Where an application is made under subsection (1) of this section, the Court, after inquiring fully into the alleged personal grievance and considering all representations made by or on behalf of the parties, shall make a determination by way of final settlement which shall be binding on the worker and the employer.
(3) The Labour Court shall afford to the employer and to the worker and, where appropriate, to the union an opportunity to be heard and to tender evidence.
(4) The Labour Court may hear evidence from such persons as it thinks fit.
It is convenient first to consider the appeal against the Employment Court’s refusal to strike out the grievance. As indicated above the Employment Court took the view it lacked jurisdiction under its good conscience jurisdiction to bar determination of the grievances on their merits simply on account of the delay in bringing them.
The scheme of s218 of the Labour Relations Act 1987 was that personal grievances would be pursued in general by Unions on behalf of members. They could not be brought by individuals as of right. Only if the Court exercised its discretion under the section to grant direct access would they be able to put their grievances to the Court themselves. In the present context s218(1)(a) restricted the grant of leave to situations where there had been a failure on the part of the union employer or some other person to act promptly in respect of the grievance.
In Air New Zealand v Johnson this Court stated the purpose of the statutory provision and clarified the meaning of “failure” in its context as follows:
As reference to judicial dictionaries will show, there are many cases in the books on the meaning of “fail” or “failure” and it is clear that the meaning depends on the context and the purpose of the provision. It does not necessarily connote a culpable omission or breach of duty on the part of anyone. …
The purpose of s117(3A) is, in part, to ensure that the worker is not totally dependent on the union. The worker is given the right to apply for leave for a direct reference if there has been a failure by the union to act. Parliament has not limited this to failure for any particular cause. A union could refrain from taking a grievance further because its officers reasonably considered the complaint ill-founded. That would be a failure to act without any culpability attaching to the union, but the union may have misjudged the merits of the case and we see nothing in the statute to prevent the worker from asking the Labour Court to exercise its discretion to grant leave. In effect the Court can review the union’s decision.
This passage in the judgment in Johnston supports the Chief Judge’s conclusion in the judgment under appeal that the refusal of the union to act on behalf of the pilots in 1990 was a failure even if it were in fact the outcome of a conscientious consideration of the merits of their grievance, a matter we need not consider. In the present case, however, six years elapsed before the individuals notified their grievances. Section 218(1)(a) required that there be a causal link between the failure of the union, employer or another person and the worker’s inability to have the grievance dealt with promptly before direct access could be allowed by the Court. An issue arises in the present appeal as to whether in view of the delay that can be said to be the case. Before addressing this question we consider an aspect of the wider statutory context which was emphasised in Mr Thompson’s submissions for Air New Zealand.
Section 218 is one of a group of sections which dealt with procedures for settlement of personal grievances under the 1987 Act. Section 215, which also is in that group, stipulated that there should be effective procedures for dealing with personal grievances in every registered award or agreement. Standard form provisions appeared in the Act’s Seventh Schedule and applied to the extent that no other provisions were made. The Schedule provisions of particular relevance in relation to the Act’s policy of dealing expeditiously with grievances were the following.
CLAUSES TO BE INSERTED IN AWARDS AND AGREEMENTS IN RELATION TO SETTLEMENT OF PERSONAL GRIEVANCES
1. Settlement of personal grievances - A personal grievance of any worker bound by this award (or agreement) shall be settled in accordance with the procedure set out in clauses … to … of this award (or agreement).
2. Submission of grievance to employer - (1) Any worker who considers that he or she has grounds for a personal grievance may submit the grievance to the employer or a representative of the employer.
(2) The grievance shall be so submitted as soon as practicable after the grievance has arisen so as to enable the employer to remedy the grievance rapidly and as near as possible to the point of origin.
5. Union’s written statement - If the grievance is not settled in discussion between the union and the employer, the union shall promptly give to the employer a written statement setting out-
(a) The nature of the grievance; and
(b) The facts giving rise to the grievance; and
(c) The remedy sought.7. Grievance Committee -(1) If -
(a) The union is not satisfied with the employer’s written response; or
(b) The employer fails to provide a written response within 14 days; or(c) The parties have agreed in writing that an exchange of written
statements is inappropriate or unnecessary, -
the union may call for the setting up of a grievance committee.
The same policy of expedition was reflected in provisions made for resolving personal grievances by s117 of the Industrial Relations Act 1973.
We conclude that, read in this context, s218(1)(a) did not authorise the Court to grant direct access for determination of grievances where there has been substantial delay in having the grievance dealt with which was caused by prolonged inactivity by individual grievants. In the present case the pilots were aware of the union’s refusal in 1990 to take up their grievance. There was some evidence which the Chief Judge regarded as indicating that some of the reasons for its attitude were withheld by the Union from the pilots, but that is not in our view in point in this proceeding between the pilots and Air New Zealand. The plain fact is that the individual pilots, between 1990 and 1996, could at any stage have sought leave under s218 but chose not to do so. It would be contrary to the policy of the 1987 Act to read s218 as permitting the Court to allow them to do so as late as 1996. In terms of the language of s218 the pilots were not unable to have the grievance dealt with promptly during this period, or, if they were that was due entirely to their own failure to seek leave to have it addressed by the Court.
The present case cannot be equated with those where a lesser delay in initiating grievance procedures available is explained by the emergence of some other means of determining the grievance (compare NZ Engineering etc Industrial Union of Workers v Badger BV and others [1985] ACJ 747, Chief Judge Horn). In the instant circumstances the delay is simply so great as to put the grievance (assuming it had not been abandoned) outside what the statute contemplated could be addressed in the grievance procedure. That this was in part due to perceptions of their legal rights, which perceptions ultimately changed, does not alter the pilots’ position.
It is unnecessary in view of this conclusion to consider in detail responsibility for or the significance of delays subsequent to October 1996 which appear to largely be attributable to others than the respondents or NZALPA.
Accordingly it was not open to the Employment Court to grant the respondent pilots direct access under s218 for determination of their grievances, and on that ground the appeal is allowed and the appellant’s application to strike out the grievances is granted. The appellant is entitled to costs against the respondents in the sum of $3000 together with disbursements including travel and accommodation costs, to be agreed by the parties and failing agreement fixed by the Registrar.
Solicitors
G L Norton, Auckland, for Appellant
R R McCabe, Auckland, for Respondent
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