Tiwai Pt appeal rejected

If leave for the appeal is granted, the smelter's argument will focus on the interpretation of the Holidays Act. Photo / Supplied

The Supreme Court has rejected an application by the operator of the Tiwai Point aluminium smelter to challenge a High Court decision requiring it to stump up some $20 million in back-pay after a complaint from the smelter workers' union that they were underpaid for days in lieu.

The Court of Appeal had already rejected the arguments put forward by New Zealand Aluminium Smelters, a company majority-controlled by Anglo-Australian metals giant Rio Tinto against the 2013 High Court decision.

In essence, the case boiled down to workers being paid out for lieu days as if they normally worked eight hour days when their shifts were routinely 12 hours.

"I welcome the certainty the Supreme Court's decision has given us," said NZAS chief executive Gretta Stephens. "Right now we are committed to working with our employees to finalise this matter as soon as possible."

"NZAS remains focused on ensuring the future commercial success of New Zealand's hydro-powered aluminium smelter."

The future of the Tiwai Point facility is in the balance, with NZAS due to decide whether to drop its 572 Megawatt load to 400MW from the end of next year or even to close the 1970s era facility, which uses one-seventh of the country's electricity.

A decision had been due this month but was delayed by a change to the Electricity Authority's timetable for unveiling a new national grid charging regime. On one version of previous proposals, the changes could save the commercially marginal smelter $60 million a year.

A First NZ Capital report earlier this year speculated the smelter is currently breaking even and is cheaper to keep open than to close. The Pacific Aluminium assets are for sale but have yet to attract a serious bidder.

The global price of aluminium and the strength of the New Zealand dollar are also crucial factors for the smelter's viability. As well as triggering back pay, the court decisions on lieu day pay add operating costs for the smelter into the future.