Affco New Zealand lost its bid to throw out a ruling that it unlawfully locked out meat workers when collective bargaining was taking place.

In the Court of Appeal in Wellington, Justices Ellen France, Rhys Harrison and Kit Toogood today turned down the meat processor's application to overturn an Employment Court ruling, saying it was "obvious that Affco's objective was to undermine or compromise the parallel process of negotiating a collective agreement which was underway with the union" in what amounted to an unlawful lockout.

"The company's purpose was to fragment the future bargaining strength of the workforce by isolating individual workers," the judgment said. "By this means it took advantage of the inherent inequality of its relationship with the seasonal workers who were members of its captive workforce and to whom it owed existing duties to offer re-employment."

The appeal was part of a series of ongoing legal clashes between Affco and the Meatworkers Union, which has achieved a measure of success in the Employment Court, and was the first under the government's new employment law to apply for an end to bargaining under amendments to the Employment Relations Act which lets firms opt out of multi-employer agreements and removed the duty under good faith bargaining for both sides to reach an agreement.

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While it lost the appeal, Affco had a degree of success in challenging a finding in the Employment Court, with the appeal bench agreeing that Affco did not engage seasonal meatworkers on contracts of an indefinite duration.

Because of that success, the judges deemed each party should bear their own costs and made no orders.

The original case covered workers at Affco's Rangiuru, Imlay, and Manawatu plants but the company had accepted any