Posties wins backpay for up to 21,000 present and past NZ Post employees

9 Apr

An historic legal victory for the Postal Workers Union of Aotearoa (PWUA) over NZ Post in the Court of Appeal has been confirmed by the Supreme Court of New Zealand which this month declined to hear an appeal by NZ Post. The Supreme Court, which is the highest and final court in this country’s legal system, said “there is no appearance of a miscarriage of justice” in the Court of Appeal’s decision.

The case concerns relevant daily pay (RDP) and how it should have been calculated under the Holidays Act. RDP is the pay an employee must receive for public holidays, alternate holidays (days off in lieu of public holidays), sick leave and bereavement leave. The Holidays Act, which came into force on 1 April 2004, says that RDP is the amount of pay that an employee would have received had the employee worked on those leave days, including payments for overtime if those payments would have otherwise been received. The Act went on to say that if it was not possible to determine what an employee would have received then for each day they were on these types of leave they must be paid their average daily earnings calculated over the preceding four weeks.

The dispute the PWUA had with NZ Post was over whether unrostered overtime should be included in RDP and the four week averaging formula used or not. NZ Post said that they could determine what employees would have received by simply excluding all unrostered overtime, and that is what they have done since 1 April 2004. The PWUA said that unrostered overtime should be included so that employees would receive their average daily overtime payment over the preceding four weeks, as this was clearly the intention of the Holidays Act. The highest courts in the land have agreed with the PWUA.

The amount of backpay that is now owed to each Post employee, past and present, will vary greatly depending on the amount of unrostered overtime they have worked since 1 April 2004. (Rostered overtime, which is overtime which has been scheduled in advance on the work roster, should already have been included in employees’ past RDP payments.) An employee who has worked no unrostered overtime will be owed nothing. A full-time employee who has worked an average of one hour’s unrostered overtime each day could be owed (depending on their hourly rate and the number of days of sick and bereavement leave they have taken) in the region of $250 to $500 for each year of their employment at Post since 1 April 2004. (These figures are approximate only.)

NZ Post CEO, Brian Roche, has given the PWUA a commitment that a separate team of people will be established within the company tasked with calculating the exact amount of backpay that each employee, present and past, is entitled to. Brian Roche has told the union that calculations will need to be done for about 21,000 NZ Post employees, including about 7,000 current employees.

A short history of a long case

The PWUA first raised the RDP issue with NZ Post in June 2004 when the union became aware that the company was not including unrostered overtime in its RDP calculations. Post initially said that they were looking into the matter then, after a long delay, they wrote to the union in 2006 acknowledging that they were calculating RDP wrongly and saying they were in the process of calculating the backpay that was owed. By mid 2007 it had become clear to the union that the company was doing nothing so the PWUA filed a dispute in the Employment Relations Authority in Auckland. At around the same time a Christchurch PWUA member, postie Linda Street, filed a claim for arrears of RDP payments owed to her by Post. The two sets of proceedings were joined (because they were about the same thing) and the case of PWUA and Linda Street versus NZ Post Ltd began its long, slow path through mediation, the Employment Relations Authority, the Employment Court and the Court of Appeal, before finally being confirmed by the Supreme Court which was happy to let the Court of Appeal’s judgment stand.

Other workers benefit too

Because the Court of Appeal’s judgment on how relevant daily pay (RDP) must be calculated is a decision about the Holidays Act, the result applies to all employees in all occupations throughout New Zealand.

This means that PWAU members in Datam, a NZ Post subsidiary company, will also benefit if their overtime payments have not been included in RDP.

Many thousands of workers employed by employers throughout the country now potentially have a claim for backpay if those employers have not been including overtime in RDP.

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