Knowledge On 10 May 2022, the Employment Court released its judgment in Courage & Ors v Attorney-General & Ors[1], in which it was asked to make declarations that the three plaintiffs were employees during their time at Gloriavale.
There were many factors and arguments for the Court to consider, not least of all the interrelation between religion and a potential employment relationship. This article provides an overview of the key points in the case and what we can expect to see next.
Factual background
The three plaintiffs worked in the community and for Gloriavale businesses in the apiculture and pet food manufacturing industries. The plaintiffs’ evidence was that:
- neither the plaintiffs nor their parents had a say in what type of work carried out;
- the plaintiffs were punished and/or threatened if they did not work; and
- once a male turns around 16 years of age they sign what is called a Deed of Adherence and work as an “Associate Partner”, although any payment made for the work is promptly extracted and reallocated into a community bank account.
The Employment Court found the Plaintiffs were Employees
Chief Judge Inglis declared the three plaintiffs were employees across three periods of time (from when they were six years old). Her key reasoning included:
- the work undertaken by the plaintiffs could not be considered chores or family/community activities – it involved activities of a commercial nature (for which Gloriavale’s businesses received economic benefit), which were performed consistently and sometimes dangerous and strenuous;
- the intention of the parties or, the label put on the relationship, is not determinative, so it was not possible for Gloriavale to solely rely on the wording of the transitional programme or Deed of Adherence;
- the plaintiffs were selected, scheduled and directed to work by a manager, under whose direction and control they worked; and
- the work was carried out for reward.
The impact of being an ‘Employee’ rather than a volunteer
This question is significant as a declaration that someone is an employee (rather than a volunteer or contractor) means that minimum standards of employment apply (for example, minimum wages, regular rest and meal breaks and accrual of annual leave).
The decision will also have wide-ranging implications for current members of Gloriavale who are working under similar conditions.
Are minimum standards of employment still sacred?
The plaintiffs also claimed the Labour Inspectorate failed to properly exercise its protective statutory duties under the Employment Relations Act 2000.
While it appears the Labour Inspectorate conducted inquiries into the working conditions at Gloriavale, it did so with a light touch. Evidence of the “desk-top review” conducted in 2017 shows the Labour Inspectorate found:[2]
“one of the strongest arguments against a finding of employment status was that those working at Gloriavale had agreed, in writing, to give up all individual rights to their personal assets and income in order to contribute communally.”
In our view, such an absolute divestment of rights requires a consideration of which rights are being given up. There was an opportunity for the Labour Inspectorate to question whether the agreement amounted to an attempt to contract out of statutory minimum standards of employment (which would invalidate the agreement as it related to these rights).
Chief Judge Inglis’ decision confirmed the well-established position that the substance of the ‘employment’ relationship will prevail over its form, meaning we look behind the label given in a contract or agreement to determine the true nature of the relationship.
The decision means there are now more questions to be answered
The Court’s decision declared that each of the three plaintiffs was an employee (and not a volunteer). This means there are many more questions now to be answered and many more agencies that will need to consider the decision.
Noting the defendants’ right of appeal, we anticipate further litigation will follow to determine:
- the identity of the plaintiffs’ employer(s);
- whether the plaintiffs’ minimum employment rights have been breached, the extent to which those breaches should and could be remedied, and by whom.
While the Court’s analysis was thorough, it did not delve into Gloriavale’s religious convictions. However, the Gloriavale defendants may look to lean on their rights and freedoms under the Bill of Rights Act 1990 as part of an appeal.
A number of external parties are following this case with interest. They may move to hold Gloriavale (and its related entities or PCBUs) to account in their own respects. For example:
- Oranga Tamariki
- The Education Review Office
- WorkSafe
- The Commerce Commission, which may wish to assess whether the Chief Judge’s finding that “the ready access to child labour [… which] constitutes a significant factor in the success of the Gloriavale business model.” amounts to anticompetitive behaviour.[3]
- The Charities Service recently announced it will be opening an investigation into Gloriavale’s charitable status
If the Court’s decision raises questions for you or your organisation about the status of your employees, contractors or volunteers contact the Black Door Law Team for tailored advice.
Disclaimer: This information is intended as general legal information and does not constitute legal advice. If you have a specific issue and wish to discuss it get in contact with the Black Door Law team.
[2] At [14].
[3] At [9].