ERA examines when cancelled work periods trigger payment obligations
The Employment Relations Authority (ERA) recently dealt with a case involving three workers who claimed they were employed as shift workers and were owed compensation for cancelled barge trips.
The matter concerned workers from a sand dredging business who argued they should receive payment when their scheduled trips were cancelled due to weather or other factors.
The workers maintained they were shift workers under employment legislation and entitled to compensation when shifts were cancelled without proper notice.
They argued their work was performed in a system where periods of work were continuous or effectively continuous, meeting the legal definition of shift work.
The employer denied the workers were shift workers, arguing their employment agreements did not require them to undertake shift work and that their work was not performed in a continuous system as required by the legislation.
The employer operated as a sand dredging business providing around 50 to 60 percent of the sand required for Auckland's construction industry.
The company operated two sand barges that were manned by three-person crews comprising a skipper who led the crew and decided if trips needed cancellation, a marine engineer who managed the engine room, and a deckhand who assisted both roles whilst at sea.
The skipper took barges to sand grounds where sand was extracted from the sea and later offloaded by diggers once barges returned to the wharf. This unloading process took around three to four hours and had to be completed before the same barge could be used again for subsequent trips.
Provided winds did not exceed 45 knots, there were sufficient crew as required by maritime law, and no mechanical issues existed, the barges could travel two tides per day with the first trip in the morning and the second on the evening tide. One complete round trip took around eight to 10 hours to complete.
As permanent crew, the workers were scheduled for at least four barge trips per week to provide them with their guaranteed minimum of 40 work hours.
When trips were cancelled due to bad weather, the weighbridge administrator would schedule make-up trips on weekends, though crew preferred not to work on Sundays due to personal and family commitments.
The employer's chief financial officer explained that each barge trip was a discrete event with no two trips reliant on each other.
There was no handover from one crew to the next, and crews would not see each other unless a crew member was doing a second barge trip or a 'double' on the same day.
The former shipping manager stated that barge crew often preferred doing doubles over single trips because by working two tides in one day, they could complete a week's worth of work in two days. This arrangement allowed for more concentrated work periods rather than spread-out daily commitments.
Barge trips were scheduled by the weighbridge administrator using a whiteboard system that was photographed and shared with staff by text message.
She referred to the trip schedule as a roster but did not prepare it more than a week in advance because she received too many requests from crew for changes to be made.
The administrator tried to schedule trips so all crew received their four trips or minimum of 40 hours of work per week as required by their employment agreements.
The group general manager explained that if there was need to increase sand stocks, barges would do double-trips between Monday to Friday provided weather permitted and there were sufficient crew with no mechanical issues.
Initially, the workers did not mind occasional trip cancellations because the previous shipping manager would top up crew members' pay when night trips were cancelled.
However, this practice discontinued under new management because the new shipping manager considered the top-up payment was effectively paying staff to do nothing and was costing the company money.
The workers said trip cancellations began having greater impact on their income once more crew were employed and barge trips started being spread among more workers.
The workers stated that they tended to be rostered for only 40 to 50 hours per week and were not able to make up for lost hours when trips were cancelled.
The group general manager acknowledged that more crews were employed to operate the barges in 2018 to meet increased demand for sand when building activity in Auckland was high. The company maintained minimum sand stock levels of four weeks' worth of sand at any time.
When trips were cancelled, the shipping manager stated crew were still expected to turn up for shore work if they wanted to be paid.
A new note appeared on trip schedules in July 2023 reminding crew that if they were not rostered on a trip or if a trip was cancelled, the expectation was for employees to come in and work alternative duties.
The ERA applied employment legislation that covers employees required under their employment agreement to undertake shift work.
The law defines shift work as work performed in a system where periods of work are continuous or effectively continuous and may occur at different times on different days of the week.
The ERA noted that these provisions were introduced in 2016 as part of changes to employment legislation focused on practices regarded as exploitative.
The legislative history showed the intent was to regulate cancellation of shifts at short notice and prevent employers from avoiding protections by splitting work into shorter blocks.
The starting point for analysis was the workers' employment agreements, as the legislation requires employees to be required under their employment agreement to undertake shift work.
However, the only reference to shift work in the employment agreements was in position descriptions stating that "experience of shift work" was desirable, which the ERA found was optional rather than a mandatory requirement.
The ERA examined whether the business operated continuously or effectively continuously, noting the workers argued the company's gates were open for sand collection around the clock and barges operated continuously.
However, evidence showed the business was family-oriented and did not open on Sundays unless make-up trips were scheduled, contradicting claims of continuous operation.
The ERA found that periods of work were not continuous or effectively continuous as required by the legislation.
The ERA stated: "Because it took unloaders three to four hours to unload sand from the barge, there is a significant break in time between barge trips such that it cannot be said that barge work was being performed in a system of work in which periods of work were continuous or effectively continuous."
It noted that barge trips were dependent on morning and evening tides whose times were broadly fixed or static. The decision explained that the legislation envisages shift work occurring at different times, which could not be said about barge trips whose start times were essentially static due to tidal patterns and maritime requirements.
The ERA concluded: "The action of the tides and wind conditions meant that each barge trip was a discrete activity with no trip reliant on the other. The use of a trip schedule does not change the analysis particularly when a morning trip does not ensure that there will be a night trip later that same evening."
It also found that employment legislation "was enacted by Parliament to prevent less scrupulous employers from cancelling shifts at the last moment without providing compensation. Given the purpose for which [the legislation] was enacted, I find no breach of its provisions by [the employer] who did not employ [the workers] as shift workers."
The ERA declined the workers' application for compensation for cancelled shift work, determining they were not employed as shift workers within the meaning of the legislation.
