John Farrow
, Partner at Anderson Lloyd, shares his insights on the intricate complexities surrounding employee classification, as highlighted by the Gloriavale case and other comparable scenarios, and explores the multifaceted challenges inherent in determining employee status.
I find something vaguely unsettling about the Chief Judge’s declaration that Serenity Pilgrim and the other Plaintiffs were employees while working on the Teams when resident at Gloriavale. [1]
I can’t quite put my finger on it. It’s not that the Decision isn’t just, given the circumstances. It’s not that the Decision isn’t well-reasoned. It’s not that the Decision isn’t well-articulated.
I think where I land is that the Decision highlights the inadequacy of what appears to be a binary question. In this case, volunteer or employee? Or, in the case of Etu Inc v Rasier Operation BV[2], employee or contractor?
Section 6 of the Employment Relations Act sets out the meaning of ’employee’. It includes home-workers and excludes volunteers. It spells out that the Court must determine the real nature of the relationship between the parties.
That analysis includes consideration of all relevant matters, including matters that indicate the intention of the parties.
A number of tests have been developed to assess the real nature of the relationship between the parties. These include Integration, Intention, Control, Fundamental / Economic Reality and Industry Practice.
In the Gloriavale case the tests traditionally applied had only limited relevance. For example, the Integration Test – the Plaintiffs were born into the Community and therefore integrated from birth. The same applies to the Fundamental / Economic Reality Test. The Chief Judge had no difficulty concluding that when working on the Teams the Plaintiffs were not carrying out work for the individual families or some notional ‘big family’.
However, the work of all members of the Community, whether for the “internal economy” [3] or “external economy” [4] ultimately in some way benefited each member of that Community. Clearly it benefited the male Leaders of the Community more than the Plaintiffs, however that doesn’t detract from the proposition that each worker shared in the fruits of their own labour.
While significant weight was placed on the extent of control exercised by the Patriarchy over the Plaintiffs, the Control Test also arguably has limited relevance. The Patriarchy exercised control over all aspects of the Plaintiffs’ lives, not only those relating to work. In fact, the control exercised in relation to work was really only a subset of the control exercised by the Patriarchy.
The Intention Test doesn’t really feature in the Judgment. There appears to be no evidence that either party intended an employment relationship or otherwise or, in fact, turned their mind to such matters.
It seems, however, that the Decision primarily rests on the extent to which the workers were controlled by the Patriarchy; the scale of the work required together with the extent of commercial benefits accrued due to the work performed.
Comment was made about the buildings at Gloriavale, including large Hostel blocks, commercial-sized kitchens with industrial-scale equipment, with the evidence clearly establishing that the work was unrelenting, grinding, hard and physically and psychology demanding. One witness, who was a Director of Boarding and Residential Facilities in a School Hostel, described photographs of the facilities at Gloriavale as aligning with the commercial facilities used by paid staff at the Hostel she managed.
However, that is also consistent with the needs of the Community – 82 family units and 600 people, the majority of whom are children under the age of 18.
The Chief Judge accepted that the Gloriavale Leadership conceptualises work within the Community as being for the benefit of the Community, rather than the individual, including individual Leaders. She further accepted that this goes some way to explaining why the Plaintiffs undertook work.
However, crucially, in terms of the binary question argued before her, “It cannot, however, be assumed that, because this is so, the plaintiffs were volunteers and were not employees”.
On the question of whether the work was voluntary, there was acknowledgement that those that joined the Community as adults were more likely to satisfy the Court that the relationship, insofar as work was concerned, was voluntary but that the line was much murkier where a woman, such as each of the Plaintiffs, has been born and raised in the Community; kept largely separate from the outside world; and has been trained in strict norms.
Despite this, a choice did exist – to stay in the Community or to leave. The Court found parallels with cultural dynamics also present in migrant worker cases.
“In one sense working in this way is voluntary – the migrant worker can choose not to take up the position or, having done so, can choose to leave. But the extent of any ‘choice‘ is largely illusionary and must be seen on a spectrum. The plaintiffs were, I find, close to the no or very little real choice end of the spectrum in terms of work.”
While that is undoubtedly the case, the Judgment does not appear to question how a community such as Gloriavale might function if some were allowed to shirk their responsibilities while others did not. Like any society, rules and regulations are necessary. My issue is not with the Court’s analysis, but with the fact that it is the Employment Court being required to measure the quality of choice, rather than some other Government Agency. In this context, the s6 definition of ‘volunteer’ does not sit well with me. As the Chief Judge stated:
“The mere fact that a person does not expect to be rewarded does not make them a volunteer if they are in fact rewarded; and (by the same token) doing work voluntarily does not mean that a person is a volunteer rather than an employee.”
The reality of the statutory test is that it is almost impossible to satisfy. Even a billionaire philanthropist with no need to work could be argued to receive reward for voluntary work, even if that reward is as esoteric as a feeling of satisfaction. As the Chief Judge noted, the word ‘reward’ as used in s 6(1)(c) is not defined in the Employment Relations Act.
The evidence satisfied the Court that the Plaintiffs expected to be rewarded for their work while working on the Teams and that they received reward for their work on the Teams. In exchange for their work they expected to be permitted to remain in the Community with family and friends and continue to lead a life they were familiar with; that they would receive food, shelter, clothing, religious support and guidance, and the promise of spiritual redemption.
However, the question must be asked – in the context of a ‘community’, does that expectation of reward fit them neatly in the category of employee?
There was certainly a connection between work done by the Plaintiffs and the reward they received. However, the benefits of the Community were not exclusively received because of work performed. Absolute adherence to the Community’s rules was also required.
As Virginia Courage said:
“If I don’t sign the Commitment, I won’t be in Gloriavale and I will not have access to my family, my friends, everything I have known in my life, the people that are important to me.”
Ultimately, the extent of the work; the degree of control exercised by the Patriarchy and the extent of the Community’s commercial enterprises weighs heavily in the Court’s Decision. While the Court’s Decision is undoubtedly a just one, it still does little to resolve what I perceive to be the inadequacy of the binary framework the Court was required to operate within.
In the Court’s earlier Decision [5] it grappled with the argument that the boys were simply performing chores. The Court stated that there is, as with anything involving questions of fact and degree, a spectrum. However, the Court also found that this case did not sit in the grey area:
“The commercial nature of the activities performed; that Gloriavale’s commercial businesses accrued the benefit of the boys’ efforts; that the activities were consistently performed over an extended period of time and that the activities were strenuous, difficult and sometimes dangerous, pushed this away from the ‘family/community chores’ end of the spectrum and into the ’employee conducted work’ end of the spectrum”.
But what about the’ family chores’ end of the spectrum? What about the family dairy or the family takeaway business? Many of those children are born into the enterprise. Many of those children do not have the choice to refuse their parents’ request. A majority of those children have an expectation that their parents will feed and provide shelter for them.
On the tests currently available to the Court, those children are also arguably employees. The only real points of differentiation are the degree of control exercised and the scale of the commercial enterprise.
In the Rasier case (Uber) the Court was also required to measure the quality of choice available. While it was accepted that drivers could decline jobs, work the hours that they chose and decide how often and for how long they worked, there were certain consequences for declining jobs. Every choice in life has a consequence. That, however, does not derogate from the fact that a choice exists. Again, the binary nature of the question posed – contractor or employee – required the Court to decide where those choices fell on the spectrum.
In Glorivale, the Chief Judge has bravely delivered a Decision which is likely to create real change for the women in the Gloriavale Community that follow the Plaintiffs. However, she has been required to do so with a blunt and imprecise instrument – s 6 of the Employment Relations Act. The Section is focused on whether or not a person is an employee. That is a binary question. However, the real question here is what was the true relationship between the Plaintiffs and the Community – a question that should have been unfettered by a s 6 analysis.
The circumstances the Plaintiffs described are much closer to the definition of slavery than to the definition of employee. The Government’s Modern Slavery response is well overdue. MBIE’s discussion document (A Legislative Response to Modern Slavery and Worker Exploitation) states:
“While there is no internationally agreed definition of modern slavery, it is commonly understood to refer to the most extreme forms of exploitation. Taken together, they broadly reflect exploitative situations that a person cannot leave due to threats, violence, coercion, deception and/or abuse of power. The word ‘modern’ is used to distinguish these practices from historical forms of slavery. Modern slavery includes slavery and other forms of abuse conditional on the constraint of a person’s freedom to exit their situation.”
That, to me, sounds more like the situation the Plaintiffs described.
John Farrow is a Partner co-leading Anderson Lloyd’s National Employment and Health and Safety Team. He is a member of the Institute of Directors, a LEADR accredited mediator. Contact John at john.farrow@al.nz or connect via LinkedIn
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[1] 2023 – NZEmpC – 105 – Pilgrim – Ors v Attorney General – Ors [2023] NZEmpC 105 NZEmpC 85/2022
[2] Etū Inc v Rasier Operation BV [2022] NZEmpC 192
[3] The ‘internal economy’ was understood to be domestic work which was said to generate and be done in exchange for no income. This was the ‘women’s realm’. Money from the women’s realm was generally applied to meet food, clothing, medical and dental costs for Community members
[4] The ‘external economy’ was the ‘men’s realm’ (through the various businesses), as opposed to the ‘internal economy’, and referred to activities which were performed in exchange for income. Money from the men’s realm was generally applied to operating the businesses and asset accumulation
[5] Courage v Attorney-General [2022] NZEmpC 77, (2022) 11 NZELC 79-149, (2022) 18 NZELR 746, 2022 WL 1449215
