IN THE EMPLOYMENT COURT AUCKLAND [2017] NZEmpC 158 EMPC 365/2017. CAR HAULAWAYS LIMITED First Plaintiff. FIRST UNION INCORPORATED Defendant

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1 IN THE EMPLOYMENT COURT AUCKLAND IN THE MATTER OF AND IN THE MATTER BETWEEN AND AND an application for an injunction [2017] NZEmpC 158 EMPC 365/2017 of an application for an interim injunction CAR HAULAWAYS LIMITED First Plaintiff AUCKLAND VEHICLE DELIVERIES LIMITED Second Plaintiff FIRST UNION INCORPORATED Defendant Hearing: Appearances: 11 December 2017 by telephone T Oldfield and P Swarbrick, counsel for the plaintiffs P Cranney, counsel for the defendant Judgment: 12 December 2017 INTERLOCUTORY JUDGMENT OF JUDGE B A CORKILL Introduction [1] Yesterday an application was made for urgency, and for an interim injunction restraining a strike which commenced earlier in the day. [2] It was dealt with on a Pickwick basis late yesterday afternoon. 1 That is, it was an application which proceeded without notice, although the papers were served on the defendant simultaneously with the filing of the application in court. The 1 A name derived from Pickwick International Inc (GB) Ltd v Multiple Sound Distributors Ltd [1972] 1 WLR 1213 (Ch). CAR HAULAWAYS LIMITED v FIRST UNION INCORPORATED NZEmpC AUCKLAND [2017] NZEmpC 158 [12 December 2017]

2 defendant was represented by Mr Cranney, who was able to make himself available at short notice, and who then participated constructively in the hearing. [3] Shortly after the conclusion of the hearing, I issued a minute granting urgency, and making an interim order restraining the strike under the notice of strike of 11 December I indicated that my judgment would issue today. Background [4] Car Haulaways Ltd (CHL) employs approximately 70 drivers who are based out of depots in Auckland, Wellington and Christchurch. [5] Auckland Vehicle Deliveries Ltd (AVDL) is engaged in the business of storing and transporting vehicles, generally within the metropolitan environment of Auckland and Wellington. It employs approximately 50 drivers in total. [6] They are separate legal entities, and operate independently of each other, although both are part of the Car Distribution Group (the Group). [7] CHL is party to a collective agreement covering drivers who are members of First Union Inc (First Union). The most recent collective agreement between those parties expired on 12 November Collective bargaining was initiated on 14 September The parties have met in bargaining on two occasions. [8] AVDL does not have a current collective agreement in place, and its drivers are covered by individual employment agreements. First Union initiated bargaining for a collective agreement with AVDL on 17 October The parties have yet to meet so as to bargain. [9] Mr Michael Tibbs, Executive Chairman of the Group, emphasises that the two plaintiffs are separate companies, and that separate bargaining has been initiated; he says that he has made it clear that each of the companies will negotiate separately with First Union for the collective agreements for drivers employed by each company.

3 [10] At 5.48 am on 11 December 2017, Mr Tibbs was contacted by Mr Richard Jones, General Manager Operations, for both plaintiffs; he is based in Auckland. He told Mr Tibbs that a number of drivers had not turned up to work that morning. He said he had been called by staff at the Auckland depot to state that the drivers were on strike, and that a First Union official, and an employee of CHL who is a delegate, were present at the entrance to the premises. [11] Mr Tibbs then checked his phone and established that an had been sent to him by a First Union official who is leading the negotiations for CHL, at am, earlier that night. Annexed to it was the strike notice. [12] The notice was addressed to both plaintiffs, and to the Ministry of Business, Innovation and Employment. Its text stated: Take notice that FIRST Union Incorporated (the union) hereby gives notice of a strike. The period of notice given is 2 hours. The nature of the strike is a total stoppage of all duties The strike will be continuous. The strike will occur at company premises [of both Car Haulaways Ltd and Auckland Vehicle Deliveries Ltd] nationwide where our members are employed. The strike will begin at 0200 hours, Monday 11 December The strike will end at 0200 hours, Tuesday 12 December [13] Mr Tibbs said he was asleep at the time of the arriving, and there would have been an out-of-office autoreply on his . He said he had had frequent interactions with officials from First Union, and he could think of no indication that he had ever given that he would be available at midnight on a Sunday/Monday. [14] He gave other evidence indicating that on Sundays, depots were generally unmanned, and nobody would be present until approximately 2.00 am in preparation for trucks going out.

4 [15] With regard to AVDL, shifts commenced at 4.00 pm on Sundays, so as to clear the Auckland wharf. Drivers would be away from that depot between 4.00 pm and 2.00 am, Monday morning; he said it would be very unusual for any person to be at the depot during those hours. [16] These were the arrangements for Auckland; the same arrangements applied in Christchurch; in Wellington there was one truck that departed midday Sunday. [17] Mr Tibbs went on to say that there were eight drivers from CHL who had not turned up to work in the South Island, and in the North Island nine for CHL, and four for AVDL. I infer that this did not include persons who would start an afternoon shift between 2.00 pm and 2.30 pm. [18] Mr Tibbs explained that the Bargaining Process Arrangement (BPA) between CHL and First Union required the parties to attend mediation in the event of an impasse. Late last week CHL had agreed with First Union to attend mediation. [19] Mr Tibbs said that as a consequence of the strike, both plaintiffs had been significantly impacted in their ability to carry out client requirements, and to clear cars from the Port of Wellington. He said this impacted clients and the Port. He stated that a large part of the plaintiffs business is the delivery of new vehicles from the Port or from storage sites to new vehicle dealers. Since the plaintiffs clients are new vehicle manufacturers and importers, they are limited in number. If they were unable to fulfil obligations, or were unreliable in doing so, there was a concern that client-support would reduce and the competitors may benefit. Were the plaintiffs to lose a client, that could impact significantly on their ability to continue employing drivers, both union members and non-union members. Application for urgency [20] The current application was heard part way through the period in respect of which the notice of strike had been issued. The defendant was served with a copy of the proceeding, but was placed at a disadvantage because it did not have the

5 opportunity to file evidence. However, Mr Cranney, as experienced counsel, was able to address all the issues involved. Accordingly, I granted urgency. Interim injunction tests [21] The factors that the Court must take into account in considering whether to grant interim relief include: 2 a) whether there is an arguable issue to be tried; b) where the balance of convenience lies; c) whether damages are an adequate remedy for the plaintiff; and d) the overall justice of the case. [22] Because the interim application would effectively dispose of the defendant s substantive rights to strike on the basis of a notice which is already issued, something more than a barely arguable case is required. The full Court in Tasman Pulp & Paper Co Ltd v New Zealand (with exceptions) Shipwrights etc Union 3 observed that where the proposed action is incapable of being deferred without effectively being cancelled, the grant of interim relief amounts to a grant of a summary judgment. The closer the Court comes to effectively giving summary judgment on the interlocutory application, the more caution the Court must exercise and the more relevant the strengths and weaknesses of the parties case must be. Arguable case [23] Four grounds of unlawfulness were raised: a) that an inadequate notice of the strike was given; 2 Klisses Farmhouse Bakeries Ltd v Harvest Bakeries Ltd [1985] 2 NZLR 129 (CA). 3 Tasman Pulp & Paper Co Ltd v New Zealand (with exceptions) Shipwrights etc Union [1991] 1 ERNZ 886 (EmpC).

6 b) that the strike was joint; c) that members of the defendant were striking at places other than those specified in the strike notice; and d) that no secret ballot had been conducted. [24] Three of the four grounds raised related to the adequacy of the strike notice. [25] Although it will be necessary to refer to various provisions in Part 8 of the Employment Relations Act 2000 (the Act), it is appropriate to set out the relevant provisions which relate to notices of strike: 86 Unlawful strikes or lockouts (1) Participation in a strike or lockout is unlawful if the strike or lockout (ba) occurs in a situation where, (i) in the case of a strike, the employer has failed to comply with the notice requirements in section 86A or 93, as the case may be: [26] Section 86A is in these terms: 86A Notice of strike (1) No employees may strike (a) unless participation in the strike is unlawful under section 83 or 84; and (b) without having given to the employees employer and to the chief executive notice of the employees intention to strike; and (c) before the date and time specified in the notice as the date and time on which the strike will begin. (2) The notice required under subsection (1) must (a) be in writing; and (b) specify the following information: (i) the period of notice given; and (ii) the nature of the proposed strike, including whether or not it will be continuous; and (iii) the place or places where the proposed strike will occur; and (iv) the date and time on which the strike will begin; and

7 (v) the date and time on which, or an event on the occurrence of which, the strike will end. (3) The notice (a) must be signed by a representative of the employees union on the employees behalf: (b) need not specify the names of the employees on whose behalf it is given if it is expressed to be given on behalf of all employees who (i) are members of a union that is a party to the bargaining; and (ii) (iii) are covered by the bargaining; and are employed in the relevant part of the workplace or at any particular place or places where the work is carried on. (4) To avoid doubt, this section does not apply if notice is required under any of the following provisions: (a) section 90 (strikes in essential services): (b) section 93 (procedure to provide public with notice before strike in certain passenger transport services): (c) section 74AC of the State Sector Act 1988 (strikes in schools to be notified). [27] Mr Cranney submitted that the well-established approach which has hitherto applied in respect of strike and lockout notices concerning essential services, cannot be said to apply to the relatively recently enacted provisions of s 86A of the Act. The new provision took effect on 6 March [28] The Court of Appeal reviewed issues of compliance in respect of notices relating to essential services in New Zealand Airline Pilots Assoc IUOW Inc v Air Nelson Ltd. 4 As was made clear in that case, the purpose of the notice requirement is to protect the public interest in respect of essential services as far as is reasonably possible. If need be, contingency or emergency planning could be undertaken. The Court of Appeal approved an earlier statement from the leading authority of Secretary for Justice v New Zealand Public Service Assoc Inc, where Cooke P observed: 5 While the Act recognises strike action as a legitimate industrial strategy, in effect it also recognises that in a free and democratic society the right to strike must be subject to reasonable limits prescribed by law. In essential services one of the limits is that relating to notice. It is in accordance with 4 New Zealand Airline Pilots Assoc IUOW Inc v Air Nelson Ltd [2009] NZCA 547, [2009] ERNZ Secretary for Justice v New Zealand Public Service Assoc Inc [1990] 2 NZLR 36 (CA) at 41.

8 the spirit of the Act if it is interpreted to mean that the organisers of the strike must make their intentions clear. [29] Section 86A applies to strikes which do not relate to essential services. Its provisions are less prescriptive than those of s 90, which was the provision under discussion in the Airline Pilots case. [30] However, the introduction of s 86A must be considered alongside other statutory amendments that were made at the same time. One of the other provisions which was introduced is s 95B. It enables an employer to make specified pay deductions in relation to partial strikes, subject to certain exceptions. [31] In introducing these provisions, the decision was taken to require the giving of notice for any strike action other than those relating to essential services, with the Minister of Labour stating: 6 Notification for all strikes will ensure that employers are aware of the nature of the strike and are able to decide how they will respond to it including making proportionate pay reductions. The notice will also provide employers with information to assist them with calculating any proportionate pay reductions. [32] The original proposal to require the giving of such notices was restricted to strikes and did not include lockouts. However, in the course of the legislative process, s 86B was enacted which has parallel notice provisions for lockouts. The Minister of Labour stated that the latter notice requirement was to help ensure the new requirements are balanced and fair. 7 [33] In my view, it is strongly arguable that having regard to the deliberative process which accompanied the introduction of these provisions, Parliament intended that the notice provisions for strikes and lockouts would be effective. They are there for a reason. It is strongly arguable that s 86A and 86B reflect the Minister s intention that employers be aware of an upcoming strike, which will include the ability to decide how they will respond to making proportionate pay 6 Office of the Minister of Labour, Employment Relations Amendment Bill 2012: Paper 1 Collective Bargaining and Flexible Working Arrangements (3 May 2012). 7 Office of the Minister of Labour, Proposal for Amendments to the Employment Relations Act 2000, undated paper for the Cabinet Economic Growth and Infrastructure Committee: Mazengarb s Employment Law (online looseleaf ed, LexisNexis) at [ERA 86B.3].

9 reductions in the case of a partial strike. Where there is an intended lockout, employees are to be given a prior notice of intention to lockout, so that they can prepare themselves. All the statutory provisions are meant to be complied with. [34] On a preliminary basis, therefore, I conclude that the Court s assessment of the notice in this case must consider carefully whether there has been proper compliance with the provisions of s 86A albeit bearing in mind that the exercise of considering the technicalities of a strike (or lockout) notice is one of common sense rather than one of pedantry. 8 Inadequate notice [35] Mr Oldfield submitted that although s 86A does not stipulate a particular period for which notice must be given, it must nonetheless be given prior to the commencement of a strike. [36] In effect, notice was not received until after the strike had commenced, that is, when Mr Tibbs learnt of the strike and then saw the notice, after 5.48 am on 11 December Mr Oldfield submitted, in effect, that it was inherently unreasonable to send a strike notice in the middle of the night when it was inherently unlikely to come to the attention of the recipient. [37] Mr Cranney said that at the time of the hearing, the only affected persons were those on a second shift, in respect of whom the employer had received notice shortly before 6.00 am. Accordingly, there was a reasonable period of notice for those striking workers. [38] In reply, Mr Oldfield submitted that the notice referred to a strike and one that was continuous. The notice did not permit consideration of the circumstances of some employees only. [39] In Air Nelson v New Zealand Airline Pilots Assoc IUOW Inc, a full Court said this: 9 8 Service and Food Workers Union Inc v OSC Ltd [2005] ERNZ 717 (EmpC) at [18]. 9 Air Nelson v New Zealand Airline Pilots Assoc IUOW Inc [2008] ERNZ 327 (EmpC) at [42]; this point was not in issue in the subsequent appeal: New Zealand Airline Pilots Assoc IUOW

10 The purpose of requiring that notice be given is to ensure that the persons to whom the notice is addressed are informed of its contents. Whether that has occurred in any particular case will be a matter of fact, as will the time at which that occurred. The employer and the chief executive can only be informed if and when they have a realistic opportunity to read, comprehend, and act on the notice [40] Although the Court was then considering a strike with regard to an essential service, for the purposes of this interlocutory application I find that the dicta is applicable to a notice under s 86A. [41] Considered as an issue of fact based on Mr Tibb s evidence, the period of notice 10 was academic because the employer did not in fact have the two hours of notice which was specified; notice was not in fact given prior to the commencement of the strike. [42] I accept Mr Oldfield s submission that notice was given of a single strike on a continuous basis. Having regard to the language of the notice, and the statutory provisions, it cannot be regarded as effective in respect of some employees only; that is, those engaged on an afternoon shift. [43] This ground of unlawfulness is strongly arguable. Joint strike [44] Mr Oldfield submitted that the scheme of the Act is to prohibit sympathy strikes. He pointed to s 83 which states: 83 Lawful strikes and lockouts related to collective bargaining Participation in a strike or lockout is lawful if the strike or lockout (b) relates to bargaining (i) for a collective agreement that will bind each of the employees concerned; or Inc v Air Nelson Ltd, above n 4, at [7]. 10 Employment Relations Act 2000, s 86A(2)(b)(i).

11 [45] He submitted that there was not, in this instance, collective bargaining for a collective agreement that would bind each of the striking employees; rather, there was collective bargaining for separate collective agreements that would bind each of the striking employees. He relied on dicta in Air New Zealand Ltd v Flight Attendants and Related Services (New Zealand) Assoc Ltd, which I will discuss shortly. 11 He also relied on a press release issued by First Union, which stated that an issue of pay parity between the employees of the two plaintiff companies had led to the strike. Mr Oldfield submitted that this clearly implied sympathy by employees of one plaintiff for employees of the other: there was accordingly a joint purpose. [46] In response, Mr Cranney submitted that the only possible result of the strikes would be two collective agreements. He said this particular allegation was weak, and that when it came to balance of convenience, the Court should conclude that the issue was not of sufficient weight as to justify an interim order. [47] In the Air New Zealand case, Judge Travis said in a not dissimilar situation: 12 The position could have been put beyond doubt by two separate strike notices, each one relating to the specific set of negotiations each of the groups within the union membership were seeking to support by strike action. However, giving a single notice indicating that each group was intending to take strike action not necessarily for their own collective agreement which would bind each of the employees of that particular group, and by providing a composite list of the names of the employees who were intending to strike, the defendants have given the plaintiff a strong argument that the strike would not be lawful under s 83. The plaintiff has accordingly established a strongly arguable issue to be tried. [48] An identical argument is strongly arguable in the present case. The evidence establishes that the two plaintiffs are separate legal entitles, bargaining separately. A composite strike notice gives rise to the problem of common purpose. I find that it is strongly arguable the notice is unlawful in terms of s 83 of the Act. Place or places [49] Mr Oldfield submitted that s 86A(2)(b)(iii) of the Act requires the place or places where the proposed strike will occur to be specified. He said that the notice 11 Air New Zealand Ltd v Flight Attendants and Related Services (New Zealand) Assoc Inc [2002] 2 ERNZ 770 (EmpC). 12 At [23].

12 specified only depots, and not the road system on which the employees would drive; their work is not, he submitted, solely undertaken at company premises. He also said that some drivers do not commence their working day at a depot, and that in two instances drivers were on strike who had commenced work away from their depot. [50] This point is arguable, though not strongly so. The strike notice would have been well understood by the employers as to location. Plainly, if the bulk of the workforce had not or were not attending the depot for work purposes, it is unlikely they would be working on the road system. [51] This allegation of unlawfulness is arguable, but not strongly so. No secret ballot [52] Mr Oldfield submitted that it was difficult for an employer to establish whether the requirements of s 82A of the Act, which requires a union to hold a secret ballot before striking, is established at an interim stage. [53] He pointed to an exchange, in which an organiser for First Union said that 91 per cent of union members across all regions had voted to reject a particular offer, and have also voted to undertake strike action if necessary. [54] Mr Oldfield said that two separate secret ballots would be necessary to comply with the section, and that the foregoing statement was open to the inference that this had not occurred. [55] Mr Cranney submitted that this argument was also weak. [56] I accept his submission; the point is arguable, but it is far from strong since it is speculative. Conclusion as to arguable case [57] As I indicated in my minute, when the four allegations of unlawfulness are considered cumulatively, there is a strongly arguable case that the strike was unlawful.

13 Balance of convenience [58] Mr Oldfield pointed to the evidence of economic harm as given by Mr Tibbs. He also pointed to the difficulty of assessing damages, and that an undertaking as to damages had been given by the company. [59] He relied on the following dicta of Judge Travis in the Air New Zealand case: 13 In a situation where it is arguable that a strike would be unlawful under the provisions of the Act, the more appropriate course is to prevent that strike taking place rather than trying to deal with the unforseeable consequences of it proceeding. Damages are therefore not an adequate remedy. [60] He also submitted that an unfair bargaining advantage would accrue to First Union if it was permitted to maintain its strike without a declaration that it is unlawful. It could give rise to further industrial action where there had not been proper compliance with the statutory obligations. [61] Mr Cranney submitted that, in essence, a practical approach should be taken. If there were any flaws in the process, these matters should be left to run their course. He submitted that the status quo should apply. [62] In my view, having regard to the strength of the plaintiff s cases, the balance of convenience favours those parties. There are the various potential consequences to which Mr Tibbs referred in his evidence. First Union s right to strike lawfully will remain, but this should only occur where there is proper compliance with the statutory provisions. [63] On the question of the practicality of making an order part way through the strike period, Mr Oldfield submitted that the Court could proceed on the basis that First Union would be able to communicate with its members appropriately, were an order to be made. I accepted this submission. 13 At [44].

14 Overall justice [64] A further factor which should be considered relates to mediation. The BPA which has been entered into by the parties states that in the event of an impasse in negotiations, or other dispute between the parties in the course of bargaining, they will seek mediation assistance in the first instance. The evidence is that no bargaining has occurred in respect of AVDL. It is of concern to the Court that, given those agreed terms, members of First Union employed by AVDL have undertaken a joint strike, without either bargaining or attending mediation as was agreed in the BPA. [65] For these reasons, I concluded that overall justice was in the plaintiff s favour. Conclusion [66] In light of the above findings, my minute of late yesterday recorded the making of an interim order restraining the strike. [67] Costs are reserved. B A Corkill Judge Judgement signed at 3.20 pm on 12 December 2017