Smelter bosses put cost of lieu day ruling at $20m
Tiwai Pt aluminum smelter management say they will have to pay workers almost $20 million if an Employment Relations Authority ruling is upheld.
In May, 64 Engineering, Printing and Manufacturing Union members working at the smelter won an Employment Relations Authority case they took against New Zealand Aluminium Smelters, with the authority ruling the company owed workers millions in backpay.
NZ Aluminium Smelters is appealing the decision in the employment court this week.
The dispute centres on the interpretation of lieu days after workers at the plant changed from eight-hour shifts to 12-hour shifts in the 1990s.
The company continued to provide the 12-hour shift workers with an additional eight hours of paid leave in respect of each public holiday.
The union argued it should have been providing the workers with an additional 12 hours paid leave for each public holiday, which the authority agreed with.
Yesterday, NZ Aluminium Smelters lawyer Pheroze Jagose said when the 12-hour shift roster was implemented, it was done so on the understanding leave entitlements would remain the same as they had under the eight-hour shift roster.
Smelter human resources specialist Barry Simmonds, called as a smelter witness during the appeal hearing, said NZ Aluminium Smelters had calculated it would cost $13m to December 31 this year if the authority's ruling was upheld.
In future years it would cost the company another $6m, calculated on costs of all employees remaining with the company until they were 65, he said.
At the initial authority hearing, the company said if it was found liable it would pay all its affected employees, not just its union members, which it then estimated would cost about $7m.
It is understood the figure has jumped because the union members had originally only included leave entitlements for the past six years, but now believed they were able to include more.
Witness Clifford Dobbie, an employee at the Tiwai Pt smelter for 24 years, said the issue was "simple".
"If you work eight-hour days, then you are entitled to eight-hour lieu days. If you work 12-hour days, you are entitled to 12-hour lieu days."
The change had reduced costs such as laundry and transportation for the company, while also increasing productivity, Dobbie said.
He believed the change to 12-hour shifts had increased "currency efficiency" by 1 per cent, which he estimated would have brought in millions of dollars for the company.
However, smelter witness Thomas Campbell said the currency efficiency increase immediately after the roster change was part of a continued long-term increase which had nothing to do with the roster change.
Other perceived benefits of the 12-hour shifts, such as the reduction of laundry costs, were offset by additional costs of the longer shifts, he said.
The appeal, being heard before Judge Tony Couch, continues today.