Alexandra Miller

Summary‍

The Court of Appeal addressed whether split shifts constitute a single "work period" under the Employment Relations Act 2000 when determining bus drivers' rest and meal break entitlements, finding that it depends on the specific facts and circumstances of the employment arrangement.

Background‍

Tranzurban Hutt Valley Ltd ("Tranzurban") operates bus services in the Hutt Valley under contract with the Greater Wellington Regional Council, utilizing "split shifts" where drivers work morning and afternoon periods separated by a midday break. The New Zealand Tramways and Public Passenger Transport Employees’ Union Wellington Branch Inc ("Union") challenged Tranzurban's practice of treating split shifts with breaks of two hours or more as two separate work periods for the purposes of s 69ZC of the Act, arguing that this reduced drivers' entitlement to rest and meal breaks. The Union contended that the entire split shift should be considered one continuous work period, resulting in more breaks for drivers. In practice, the difference between the two approaches was that the Union's approach would have resulted in three paid rest breaks and two unpaid meal breaks, while Tranzurban's resulted in two paid rest breaks and one unpaid meal break.

The Employment Relations Authority initially sided with the Union, finding that a split shift constituted a single work period from the beginning to the end of the driver's workday.

However, the Employment Court overturned this decision, holding that the Act did not prevent parties from agreeing to multiple work periods within a workday. The Employment Court determined that the classification of a split shift as one or more work periods was a factual question depending on the hours worked, the nature of breaks, and the agreed terms of employment.

The Court of Appeal Decision

The Court of Appeal upheld the Employment Court's interpretation of s 69ZC, finding that it was correct in its approach. It emphasized that the terms and conditions of employment, as reflected in the Collective Agreement, were a key factor. The Court found that the Collective Agreement was permissive, not prescriptive, and did not mandate that all split shifts be treated as single work periods.

The Court then assessed whether Tranzurban's approach was consistent with the purpose of the Act, which is to ensure employees have adequate time to rest and refresh. The Court considered that drivers were free to use the two-hour break as they wished, and there was no evidence Tranzurban was structuring shifts to avoid providing breaks. The Court acknowledged that a rested, refreshed, and nourished driver promotes a productive employment relationship. The fact that Tranzurban designed the shifts around bus routes and demand was also relevant.

Result

The Court of Appeal dismissed the Union's appeal, finding that Tranzurban's approach to split shifts was consistent with the Collective Agreement and the overall purpose of the Employment Relations Act 2000.

This case provides guidance on determining rest break entitlements in the context of split shifts. It highlights the importance of examining the specific terms and conditions of employment and the practical realities of the work arrangement on a case-by-case basis.

For further information on this case or similar issues, please contact Director Brigitte Morten.

Hon Simon Watts, Minister for Local Government, introduced  the Local Government (System Improvements)Amendment Bill aimed at reducing pressure on council rates.

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The Bill will amend the Local Government Act 2022 to:

·        refocus the purpose of local government;

·        better measure and publicise council performance;

·        prioritise core services in council spending;

·        strengthen council accountability and transparency; and

·        provide regulatory relief to councils.

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Refocusing the purpose of Local Government

This Bill is part of the Coalition Government’s reforms to local government announced in August 2024 which focus on reduced local government spending and delivery of core services.

Currently, section 10(1) of the LGA states the purpose of local government  is to:

a)     enable democratic local decision-making and action by, and on behalf of, communities; and

b)     to promote the social, economic, environmental, and cultural well-being of communities in the present and for the future.

The second component of this purpose, known as the “four wellbeings”, has attracted controversy. The four wellbeings was removed from the LGA by the National Government in 2012, and reintroduced by Labour in 2019.In December 2024, the Government announced it would again remove them, with Simeon Brown (the then Minister for local government) stated they had led “to about a two percent higher rates growth each year”. Labour leader Chris Hipkins’ responded that this was “a complete fabrication”.

The Bill proposes to replace the four wellbeings with two alternative purposes:

a)     to enable democratic local decision-making and action by, and on behalf of, communities; and

b)     To meet the current and future needs of communities for good-quality local infrastructure, local public services, and performance of regulatory functions in a way that is most cost-effective for households and businesses; and

c)      to support local economic growth and development by fulfilling the purpose set out in paragraph (b).

This change means local authorities  are required to take actions or implement measures that realise the purpose of local government.  

Whilst reference to the specific four wellbeings has been removed, local authorities will still be required to consider the interests of current and future communities generally.

Another key change proposed by the Bill, is for local authorities to have particular regard to “core services” in serving its communities. The core services include; network infrastructure, public transport services, waste management, civil defence emergency management, and recreational facilities such as libraries and museums.

Measuring and publicising council performance

The explanatory note in the Bill outlines the intention of the Government to establish a council performance measurement framework similar to that established in New South Wales, with this Bill laying the “foundation” for it. Such a framework would involve the Department of Internal Affairs routinely publishing local authority performance information so that members of the public can more easily access information about the performance of their local authority.

Bill also prescribes further regulations that the Minister for Local Government is able to recommend, including for the purpose of specifying groups of activities that local authorities must plan for and report on, and for the setting of benchmarks in areas of local authority activity (that is beyond financial performance and asset management).

Prioritising core services in council spending

Under the LGA, a local authority must manage its revenues, expenses, assets, liabilities, investments, and general financial dealings in a manner that promotes the current and future interests of the community.

The Bill proposes to add an additional requirement that when a local authority is determining its approach to financial management, it must have “particular regard” to the purpose of local government and the core services.

Strengthening council accountability and transparency

Amendments are proposed to promote public expectations of local authorities and to support elected members to effectively represent their communities.

A proposed change is the enabling of the Secretary for Local Government (who is the Secretary for Internal Affairs), to issue a code of conduct and set of standing orders that are binding on local authorities. Currently, the LGA prescribes that local authorities must adopt standing orders, it does not prescribe the content of them.

The Bill also introduces an entitlement of members of local authorities to have access to documents held by it that are reasonablynecessary to enable the member to effectively perform their duties, imparting anew responsibility on local authority Chief Executives to ensure that membershave access to such documents.

Amendments to the local authority governance principles are also outlined, so as to insert new clauses regarding the fostering of “free exchange of information and expression of opinions by elected members” and “the responsibility of its elected members to work collaboratively”.

If the Bill is passed, information on how a local authority is acting in accordance with the governance principles would need to be included in local governance statements (which are required to be made publicly available following the triennial election).  

Providing regulatory relief to councils

Amendments to reduce or clarify regulatory requirements on local authorities in the pursuit of greater efficiency are included in the Bill, such as the extension of the maximum length of a chief executive’s second term (from 2 years to 5 years).

One amendment that may be considered controversial, is the removal of the requirement that local authorities must consider the relevance of tikanga Māori knowledge when appointing council-controlled organisation directors.

Next steps

The Bill is likely to be sent to Select Committee in July2025 and public submissions will be called for.

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If you would like further information on the Bill, please contact Director Brigitte Morten.

Summary

The High Court confirmed  local authorities do not carry the Crown’s Treaty duties, other than where specifically statutorily prescribed. The judicial review application by trustees of Te Rūnangaa Rangitāne o Wairau Trust, the legal representative of the Rangitāne o Wairauiwi (“Rangitāne”), as against the Marlborough District Council (“MDC”), was dismissed.

Background

The MDC enacted the East Coast Beach Vehicle Bylaw 2023, restricting vehicle access to parts of the north eastern coast of the South Island. This affected areas significant to Rangitāne’s cultural and customary practices.

Rangitāne challenged the lawfulness of the Bylaw and the Council’s decision-making process claiming it breached their customary rights and statutory obligations, including those under the Treaty of Waitangi.

The Case

The Court considered the following questions of significance:

1.      What the nature of the local authority obligations under the Treaty of Waitangi were;

2.      Whether MDC breached the obligations under Part 6 of the Local Government Act (“LGA”); and

3.      Whether MDC’s decision was procedurally unjustified.

Council’s Obligations under the Treaty

Rangitāne argued that local authorities are a “delegate of the Crown” and therefore assume the Crown’s obligations under the Treaty of Waitangi. They argued that MDC’s decision adversely affected the ability of Rangitāne to exercise their customary rights as guaranteed by article 2 of the Treaty.

The Court confirmed local authority obligations under the Treaty of Waitangi are limited to those explicitly provided in the LGA. The Court concluded that local authorities are not directly subject to Treaty obligations at common law beyond what is stated in the relevant legislation.

The Court of Appeal’s decision in Smith v Fonterra was discussed, reiterating that there cannot be a breach of the Treaty where a decision has been made lawfully under legislation that gives effect to Treaty principles. Local authorities are only required to consider the Treaty in the context of section 4 of the LGA which is a “Treaty Principles” provision.

Part 6 of the LGA

Sections 76-83AA of the LGA were addressed by the Court in the context of the decision to enact the Bylaw.

The Court acknowledged that MDC engaged with Ngati Kuri more than Rangitāne in the development of the “cultural values section” of the Technical Report (which was the foundation for assessing the impacts and implications of the proposed Bylaw), but it had some engagement with Rangitāne, and there was evidence of consideration of Rangitāne’s submissions and interests. The Court confirmed that to what extent these submissions influenced MDC’s decision, is a matter for MDC. Further, the LGA does not require a local authority to determine competing claims of cultural status between iwi.

In regard to section 79 of the LGA which sets out procedures for decision making, the Court confirmed there is no requirement that local authorities keep a record of compliance. The Court of Appeal’s decision in Thorndon Quay Collective v Wellington City Council, was referred to, citing the importance of a “flexible approach” to this provision. The Council stated it had considered relevant options as well as the significance of all relevant matters. MDC also produced  a report that noted a Panel was attempting to apply a consistent Bylaws framework in order to address competing values of national importance, as identified in the technical report. This was sufficient evidence of compliance with section 79.

Section 80 was analysed, which requires local authorities to identify significantly inconsistent decisions to any policy or plans adopted by the local authority. The High Court agreed with MDC that the significance threshold was not met for a number of reasons, and noted that even if the threshold had been met, this does not invalidate the decision.  

Sections 81 and 82 provide for contributions to decision-making processes by Maori and principles of consultation. The Court found the opportunities for Rangitāne to participate in the decision-making went far beyond that afforded to the rest of the community and these provisions had been adhered to. Justice McQueen made it clear that consultation does not require the MDC to agree with the position taken by Rangitāne.

Procedural Fairness

A breach of a legitimate expectation was established arising from the MDC’s commitments when extending invitations to both Rangitāne and Ngati Kuri to nominate a representative to sit on the Hearing Panel. MDC committed to not allowing Rangitāne or Ngāti Kuri to make a submission if they appointed a commissioner. Rangitāne reasonably relied on this and declined the invitation to maintain the opportunity to advance a submission on the Bylaw. MDC then allowed a letter sent by Ngati Kuri in response to Rangitāne’s submission, to be considered by the Hearing Panel, in breach of that legitimate expectation.

Rangitāne also advanced an argument of bias, which concerns impartiality in decision-making. However, the Court considered this unworkable in the context of Council decisions involving content that reasonable minds disagree on. Pre-determination was instead considered, though the fact Ngati Kuri had a commissioner on the Panel, was not enough to demonstrate the panel had a closed mind.

Result

Whilst Rangitāne established one claim of legitimate expectation, the Court declined to grant any remedy as the letter did not have any material effect on the decision and the decision would not have been different had MDC complied with the legitimate expectation.

All other grounds of review failed and the application for judicial review was dismissed, with costs to follow.

This case serves as a crucial reference point for local authorities in New Zealand, shaping their understanding of their responsibilities towards Māori, and providing guidance on the obligations conferred by the decision making provisions in Part 6 of the LGA.

For further information on this case or similar issues, please contact Director Brigitte Morten.