Supreme Court dismisses Affco's unlawful lockout appeal

Affco Horitiu near Hamilton. Photo / File

The Supreme Court has rejected an appeal by Affco against a lower court's finding that the meat processor unlawfully locked out meat workers when collective bargaining was taking place.

In a unanimous decision, the Supreme Court upheld the Court of Appeal's view that the relationship between Affco and its seasonal workers "was sufficiently close to bring the latter within the scope of the word 'employees' in s.82(1)(b)" of the Employment Relations Act.

In reaching their decision, Justices Terence Arnold, Mark O'Regan, William Young, John McGrath and Susan Glazebrook first ruled that the workers weren't employees as defined by s.6 of the ERA because their employment was discontinuous, being terminated at the end of one season before they were re-engaged at the start of the next season.

However, in terms of s.82(1)(b) of the Act (the lockout provision), they ruled that "employee" had a broader meaning than provided in the s.6 definition because it included persons seeking employment that "were not, in contractual terms, strangers to the employer".

"Rather, they were people who had previously worked for Affco and to whom Affco owed contractual obligations, including as to re-hiring, even though their employment had terminated at the end of the previous season and they were seeking to be re-engaged for the new season," the judgment says. "That feature of termination plus re-engagement under the umbrella of a number of continuing obligations distinguishes this case."

"The result is that we agree with both courts below that Affco locked the workers out unlawfully."

Affco must pay the Meat Workers Union's costs of $35,000 plus reasonable disbursements.

A spokesman for Affco wasn't immediately available. After the Court of Appeal decision last year, the company said it was "naturally disappointed with the court's finding in respect of the lockout issue" although it had been pleased that court found the Employment Court had erred in finding that seasonal workers were "engaged seasonal meat workers on agreements of indefinite duration". That was "consistent with the seasonality in the red meat sector," it said at the time. Allegations of a campaign by Affco to undermine the union and its members were unfounded.

However, for its part the union said Affco and its owner, Talley's Group, "appear to adhere to the US Union Busting Manuals with a singular determination reminiscent of a street fighter." As a result, the union has had more than 60 legal cases against the Talley's since 2010 and had come to rely on the payouts from successful lawsuits to bankroll its ongoing legal actions.

"This has been a long ongoing series of litigation that would have tested the union's resources had it not been for penalties awarded to the union from Talley's over the course of this battle," it said in a statement issued ahead of today's judgment.

The long-running litigation was the first judicial test of amendments to the Employment Relations Act introduced in March 2015, which allowed firms to opt out of multi-employer agreements and removed the duty under good faith bargaining for both sides to reach an agreement.

Affco was the first company to apply for an end to bargaining under the legislative changes and has mounted continuous but as-yet unsuccessful legal challenges to an Employment Court ruling in favour of the Meat Workers Union. Leave to appeal to the Supreme Court was granted on one question - whether Affco had breached a section of the act defining the meaning of "lock-out" when it required seasonal workers to enter into new individual employment agreements before commencing work for the 2015/2016 season.