Insights

1. Since 2021, the New Zealand Tramways and Public Passenger Transport Employees’ Union Wellington Branch Incorporated (Tramways Union) has been involved in litigation against Tranzurban Hutt Valley Limited (Tranzurban) over the breaks Tranzurban’s drivers are entitled to be paid for while working “split shifts”. While Tramways Union succeeded in the Employment Relations Authority, the Employment Court overturned the Authority’s decision in favour of Tranzurban, which was upheld in the Court of Appeal and most recently, in the Supreme Court, definitively settling the matter in favour of Tranzurban.

Legislative Context

2. The Employment Relations Act 2000 (the Act) sets out the minimum break entitlements that all employees must receive while working. The number, duration, payment and timing of these breaks are governed by the provisions of section 69ZD to 69ZH of the Act, and expressed simply, provide an increasing number of breaks while an employee is working, in two hour increments.

3. The Act defines a work period as the period:

(a) Beginning when the employee begins work according to their terms and conditions of employment; and

(b) Ending when the employee ends work according to their terms and conditions of employment;

Including all authorised breaks whether paid or not that employee is entitled to take.

4. Key to the definition of a “work period” are the “terms and conditions of employment”: As this case update demonstrates, the terms contained within an employment agreement will impact the number of breaks an employee is entitled to be paid for under the Act.

Split Shifts

5. Split, or “broken”, shifts are an unfortunate reality of bus driving in public transport systems (such as the Greater Wellington Regional Council’s “Metlink” brand) that have a greater need for buses and drivers during the morning and evening peak commuting periods, than the interpeak period between. A split shift involves the driver working, then “signing off” from work for a lengthy period of time (the Split Period), and recommencing work again later in the day. During the Split Period, a driver is not required to be present at work and they don’t have any responsibilities. An example split shift from the Court of Appeal’s decision is below (we have set this into a table):

6. Tramways Union argued that the whole day (for example, as above, 5.58am to 34pm) comprised one “work period”. Tranzurban argued the work before and after the Split Period were separate “work periods”. If the Court accepted Tramways Union’s argument, Tranzurban drivers would be entitled to a greater number of paid rest breaks because they were working for longer.
7. While there are multiple judgements that relate to this dispute, the most detail is in the Court of Appeal’s judgement, which was upheld by the Supreme Court. The Court of Appeal stated the relevant issue was whether a driver had ended work at the sign off from the first portion of the shift, or whether the Split Period was an “authorized break”, making the entire shift one continuous “work period”, ending at the final sign off. The Court of Appeal agreed with Tranzurban because:

(a) the terms of Tranzurban’s collective employment agreement (CEA) stated that “Shifts” (the work a driver could perform on a given day) could include multiple “work periods”. Drivers could be assigned multiple shifts each day, and the Act also allowed for this possibility;

(b) the driver was not actually working, nor were they required to be present during the Split Period;

(c) the aim of the rest break entitlements in the Act were to allow drivers to remain “rested, refreshed and nourished” which the Split Period allowed drivers to do and further, were Tramways Union’s approach to “work period” adopted, a driver would be entitled to breaks during the Split Period, while they were not working, which the Court described as an “absurd outcome”;

(d) Tranzurban policy was that Split Periods of less than two hours duration were treated as a continuous work period, and drivers were given break entitlements accordingly; and

(e) when Tranzurban’s shifts were broken down on a 2 hourly incremental basis, the Tranzurban CEA provided breaks in excess of the entitlements required by the Act (I.e., the Split Period, in addition to other rest and meal breaks). The Court considered that where an employer provided break entitlements in excess of the Act, those entitlements, rather than what was the minimum required by the Act, would apply.

8. The Supreme Court put it simply:

Perhaps unsurprisingly given the nature of Tranzurban’s business, cl 8 of the Collective Agreement contemplates the possibility of there being multiple work periods in a given day, or within a given shift. This does not appear to be inconsistent with the terms of s 69ZC(a).

What does this mean for you?

9. You might think: “if I employ drivers on split shifts, I only need to give the breaks as if each portion of the split shift is a separate “work period””. Caution needs to be adopted with this approach. Tranzurban won because:

(a) their CEA specifically stated that it was possible to have more than one work period in a day;

(b) Tranzurban only treated shifts as “split” where the Split Period was two hours or greater; shorter Split Periods were treated as being part of a continuous work period from the time driver first signed on that day, until they signed off for the last time; and

(c) drivers were not required to be present, nor did they have any duties during the Split Period.

10. If:

(a) the employment agreement that your drivers work under doesn’t specifically state that drivers may perform multiple work periods over the course of a day; or

(b) you require drivers to be present in some form during the Split Period (for example, if they are required to take the Split Period on the bus); or

(c) you configure your shifts and Split Periods so that your drivers only perform two hour “work periods” before each Split Period; or

(d) the Split Period is short (for example, less than two hours):

It is likely that a Court faced with similar facts would find that your drivers are performing a continuous “work period”. This is what makes the careful drafting of an employment agreement, and the way in which you set work for your drivers (or employees), so important. The impact of these cases don’t apply only to bus, or road transport related employment: these decisions have the potential to impact any employment that involves the use of “split shifts”.

Gibson Sheat have expertise in all legal matters that relate to employment law and road transport. If you would like to discuss any issues that relate to this article, or about road transport legal issues more generally, please do not hesitate to contact us.

Craig Tatley, a solicitor in the Litigation team at Gibson Sheat, has unique insight on the passenger transport sector, driving regularly as an Urban Bus Driver in Wellington. Craig has appeared in the District Court and High Court on a variety of commercial and criminal matters, and regularly advises clients on road transport regulatory and commercial issues.

Conor Lennon is a Senior Solicitor in our Employment team at Gibson Sheat. He has appeared in the Employment Relations Authority, and has experience advising clients on a wide range of issues, including road transport and bus related employment issues, drafting employment agreements, and advising on, and enabling, complex commercial transactions.