Stephanie Berkahn

Chief Judge Inglis of the Employment Court has delivered her anticipated decision declaring six Gloriavale women as employees for their time at the remote Westland Christian community. Facts Serenity Pilgrim, Pearl Valor, Rose Standtrue, Virginia Courage, Anna Courage, and Crystal Loyal referred to as the “Gloriavale Six” by the media, were all born into Gloriavale and remained there until leaving between 2017 and 2021. From the age of about 6 years’ old they helped in the communities’ kitchen, laundry, and sewing facilities. By the age of 15, they had all left school to work full time in groups called “Teams” which fulfilled the domestic needs of the community. For example, in 2018, the Teams produced on average 11,000 meals and washed 17,000 items of laundry per week. The evidence showed that the working environment was “unrelenting, grinding, hard, and physically and psychologically demanding”. After leaving the Community the women made a complaint to the Labour Inspector regarding the working conditions they had faced. Two investigations were completed in 2017 and then in 2020/2021 but did not result in a finding that the Gloriavale women were employees. This led to the women escalating matters to the Employment Court. They are also simultaneously suing the Labour Inspectorate for breaching their statutory duties which will be heard separately. Volunteers? The Employment Relations Act 2000 excludes certain workers, such as volunteers, from being categorised as employees. Volunteers are defined as workers who do not expect to be rewarded for their work do not receive any reward for their work. Gloriavale argued that the women were volunteers. Despite not earning wages, the women received food, shelter, clothing, religious support and guidance, and the promise of spiritual redemption against the threat of eternal damnation. The evidenced showed that high value was placed on these factors, likewise with Gloriavale’s reliance on the Teams for their work in the communities facilities. The Chief Judge was satisfied that the women were not volunteers as they did expect to be rewarded for their work and they did in fact receive reward for this work. However, the women were not automatically declared employees because they were not volunteers. Employees? In determining whether an employment relationship existed between the women and Gloriavale, the Chief Judge was required to examine all relevant factors when considering the real nature of the relationship. The Chief Judge considered the following factors demonstrated that an employment relationship did exist with the six women: While many current residents of Gloriavale demonstrated a strong willingness to work, in reality the women had little choice about whether they work or not. If they refused to work they would be required to leave the community and lose their family, friends, and everything they had known in life. The evidence recorded the women’s subservience to the Overseeing Shepherd and male leadership group in all things including their work. Working was an expectation, and they were rostered on the Teams from 16 years old. At work they could not freely move between Teams or areas ie. from the kitchen to the laundry without asking for approval. The Chief Judge compared the working condition to that of a large scale hostile. There were commercial sized kitchens and industrial scale equipment. Both current and former residents provided evidence that the work of the Teams was essential to the operation of the community. The Chief Judge recognised that this type of work would be generally paid for if outside of the community. The Court rejected Gloriavale’s argument that the women were merely doing work “domestic” in nature. Nor was it accepted that the work was done for each of the women’s family or some kind of notional family. Relatedly, the Chief Judge recognised that the community’s way of life and religious tenets were relevant in determining the employment status of the women, but it was ultimately not decisive. Overall, the Court determined that the women were subject to strict direction and control akin to an employment relationship. Implications This decision only applies to the six women and not all current Gloriavale members. The women will be entitled to minimum employment entitlements, including minimum wage, annual leave, and sick pay. However, the Court still needs to determine which entity or person was the employer of the women and therefore liable to pay the minimum entitlements. Due to the complex organisation structure, the Court adjourned to allow for further evidence and arguments to be raised in this respect. This decision shows that the Employment Relations Authority and Employment Courts will look past the labels used by parties to determine the real nature of the relationship. In conjunction with the recent Uber decision, it illustrates an increasing focus on ensuring that groups of workers are not being exploited and are receiving the minimum employment entitlements. The decision also highlights that rewarding a worker in means other than money does not preclude them from being classed as an employee. This is especially relevant for not-for-profit organisations who have volunteers and workers who exchange their time for services. Gloriavale has stated that they will be appealing the decision, claiming “that the decision will have a significant effect on how faith-based communities, iwi, and whanau choose to live and structure their household responsibilities”. This was recognised in the decision where the Chief Judge said: “The Court’s role is confined to determining employment status and whether workers are able to access minimum entitlements and protections, not spiritual issues or matters of religious dogma.” How can we help? If you would like further information regarding the decision and the impact that this decision may have on your business and your staff, please contact a member of our employment law team.

Amendments to the Employment Relations Act 2000 means that from 13 June 2023, employees will have 12 months to raise a personal grievance related to sexual harassment. Employers should be aware of changes that will be required for all new employment agreements. The new law extends the timeframe for employees to raise a personal grievance with their employer for sexual harassment claims from 90 days to 12 months. The timeframe commences from the date on which the action alleged to amount to a personal grievance occurred or the date the employee became aware of the action, whichever is later. The new law will not allow for any retrospective/backdated sexual harassment personal grievance claims. The extended timeframe will only apply to cases where the sexual harassment occurred or came to the employee’s attention on or after 13 June 2023. The previous 90-day period will continue to apply to any sexual harassment that occurred before the new law came into force. What steps are employers required to take? Employment Agreements Employment agreements entered into on or after 13 June 2023 will need to reflect the new law. It is a legal requirement for employment agreements to contain information on how to resolve employment disputes, as well currently including a specific reference to the 90-day time limit period for raising personal grievances. Employers will now need to refer to the extended 12-month timeframe for sexual harassment claims for all new employment agreements finalised on or after 13 June 2023. Failure to do so may result in the employer being liable for a penalty, and could provide a defence to an employee if they failed to raise a personal grievance claim within the new 12-month period. We recommend that employment agreement templates are updated accordingly. Employment agreements are not required to be updated for current employees (employed prior to 13 June 2023). Policies Employers should carefully review company policies that refer to time periods for raising personal grievance claims, and update these to reflect the new 12-month period for sexual harassment claims. How can we help? Please let us know if you would like any assistance in updating your employment agreement templates and policies to reflect this change. It may also be a good opportunity for employers to also undertake a more general review of their employment documentation to ensure compliance and best practice.

Good employment relationships are central to a business’s success. However, sometimes these relationships break down. When this happens, the parties may be able to resolve the problem between themselves or at mediation. Where a matter cannot be resolved informally, or urgent relief is required, either party may refer the matter to the Employment Relations Authority (Authority). Where a matter is resolved at mediation, the parties often agree around contribution to legal costs. Costs in the Authority are an important factor to consider, and we set out below the rules for recovery of costs by a successful party in the Authority. What are costs awards? When a claim is heard in the Authority, the Authority may order the unsuccessful party to pay costs to the successful party. The successful party can generally expect some contribution from the unsuccessful party, but the contribution is typically not representative of a party’s true costs. Parties are encouraged to agree on costs between themselves. However, if they cannot agree, the Authority has the power to order the unsuccessful party to pay the other party costs and expenses that the Authority considers reasonable. How much can you get awarded in costs? The Authority has a ”daily tariff” system as the starting point for assessing costs. Currently, the daily tariff of costs is $4,500 for the first day spent in the Authority, and $3,500 for subsequent days. Costs may be adjusted upwards or downwards based on various factors. For example, costs may be reduced if the successful party’s behaviour unnecessarily increased costs, the successful party did not succeed on all the claims they made, or if the unsuccessful party can show that paying the costs would cause them considerable hardship. Costs may be increased if the unsuccessful party made arguments that had no prospect of success, or the unsuccessful party previously turned down an effective settlement offer. Making reasonable, without prejudice offers of settlement, can assist and be referred to when seeking a costs uplift. However, parties should be aware that the costs of having your case heard will generally be greater than the amount that may be awarded in costs, and therefore even successful parties will likely find themselves out of pocket after having their case heard. Recent changes to costs The Authority recently released a practice note with changes regarding costs. From 2 May 2022, the following categories of a matter are not subject to a daily tariff and the parties are to bear their costs: referrals for bargaining facilitation; disputes about the application, interpretation or operation of a collective agreement; pay equity processes; screen industry processes; fair pay agreement processes; collective bargaining disputes; disputes about access to workplaces; and fixing of the terms of a collective agreement. For example, for parties involved in collective bargaining, there is now a presumption that costs awards will not be made for disputes that may arise during this process. For other matters, such as personal grievances and breaches of employment agreements, the Authority states that the parties should evaluate what they do in those proceedings on the understanding, if unsuccessful, they will usually have to contribute to the costs of the successful party, as well as meeting their own costs. Summary If a party does pursue a claim in the Authority, it should be aware that it is unlikely to recover its full costs, if successful. If you need advice on employment matters, including resolving an employment dispute, feel free to get in touch with our employment team.