| Summary |
DISPUTE – Applicant absent from work on ACC for extended period of time when respondent implemented redundancies – Entitled to redundancy compensation of three weeks pay for each year of service – Respondent and union agreed to calculate compensation using employees’ average weekly earnings over preceding 12 months – Applicant only worked few weeks in that time – Average “weekly pay”, and resulting compensation, very small – Matter brought to respondent’s attention – Recalculated earnings on basis of difference between what would have received for 40 hour week and what received from ACC – Amount greater than under average weekly pay formula, but less than if at work – Collective employment agreement (CEA") did not address calculation of “week’s pay” – Electricity Corporation of New Zealand Ltd v New Zealand Public Service Association (cited below) applied – In similar situation Labour Court held proper measure was amount employee would have received if employment not suspended by unpaid study leave – Court referred to wider proposition that could not have been in contemplation of parties that long term employee would receive no compensation – Authority concluded CEA, together with parties’ agreement regarding earnings over preceding year, should be construed similarly – Compensation recalculated accordingly – CEA also provided “employer shall make severance payment to that employee, in addition to that employee’s contractual notice requirement, of 4 weeks.” – Applicant argued entitled to severance payment of four weeks pay in addition to redundancy compensation – Respondent claimed “severance pay” no more than reference to redundancy compensation and no additional payment made to other employees – Submitted “4 weeks” referred to notice requirement – Respondent’s position defeated by placement of commas – Ordinary meaning provided for severance payment of four weeks pay for redundant employees – Not unusual for “severance” payment to mean something different from “redundancy” payment – Applicant entitled to “severance payment” of four weeks pay, calculated like redundancy compensation – Monies due and owing – Interest 7.9 percent - Process worker" |