Smelter operator to appeal ERA finding on holiday lieu days

New Zealand Aluminium Smelters has lodged an appeal in the Employment Court saying an early decision imposed millions of dollars in additional costs on the operator of the Tiwai Point aluminium smelter.

The Employment Relations Authority earlier found in favour in a case taken by 64 Engineering, Printing and Manufacturing Union members who claimed they should be paid 12 hours annual leave in lieu of public holidays instead of eight, as all workers were rostered on standard 12-hour shifts.

Under an employment agreement which was dated before 2004, employees would accrue a day's leave for each statutory holiday, regardless of whether it was worked. The day was credited as eight hours, even after a change to 12-hour shifts.

The ERA agreed the contract provided for a day's leave, with no provision limiting it to eight hours.

''The allocation is a day and a day is now 12 hours,'' the ERA said.

Acting smelter manager Stewart Hamilton said yesterday NZAS remained of the view that its application of the lieu days benefit over the past 20 years had been fair and correct and complied with both the law and the smelter contracts.

''The ERA's decision imposes millions of dollars in additional costs on NZAS, both retrospectively and into the future, at a time when the smelter is already losing millions of dollars every month,'' he said.

Mr Stewart would make no further comment.

Resources giant Rio Tinto is the ultimate owner of the smelter but set up a subsidiary - Pacific Aluminium - which includes all of Rio's aluminium smelter operations in Australia and New Zealand.

The smelter takes all of the electricity generated by Meridian Energy's Manapouri project and some from its Benmore Dam. Pacific Aluminium and Meridian are in talks over Pacific's desire to reduce the price it pays for the Manapouri-generated electricity. A long-term contract with Meridian, signed by NZAS in 2007, came into effect in January this year. The contract provided both parties a basis to continue to operate under unless an agreement to change the contract was reached.

There has been speculation the smelter may close if a deal is not agreed. There are continuing rumours that both parties are close to a deal, but that could not be confirmed yesterday.

Meridian is likely to be named on Thursday as the next state-owned electricity generator to be partially floated on the NZX. Finance Minister Bill English indicated last week he would make that announcement in his 2013 Budget.

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