Chief Judge Inglis has made it clear for the second time that “the tail will not wag the dog” when it comes to the employment status of former Gloriavale residents.

Last week, she held that six former female Gloriavale residents were employees and therefore entitled to minimum employment protections.

Inglis said that while “requiring the application of minimum employment standards to individuals who had previously not been perceived as benefitting from such entitlements” may present issues for Gloriavale, this wasn’t a reason not to apply the standards.

This follows the Chief Judge’s decision in May 2022 that three former male residents of Gloriavale were employees from the age of six until they left the community. In confirming that a person ‘working in slave-like conditions’ may still fall within the definition of employee, Inglis noted that:

“It would be ironic if those suffering from the worst workplace abuses were unable to bring their claims to the Employment Court because the level of abuse (the tail) wagged the dog (a finding of employment status).”

Employing or using any person as a slave is a crime that attracts up to 14 years in prison but whether or not that crime has occurred in these two decisions is for another Court. The Employment Court’s role in these cases was to determine whether the former residents were employees. Recognition of their employment status would give the former residents access to a suite of minimum worker entitlements and protections including minimum wage, holiday pay and KiwiSaver.

The Women’s Case

Six former female residents of Gloriavale brought a claim in the Employment Court for recognition of their status as employees during their time working in the community between 2017 and 2021.

From a young age (around six) each of the women carried out work within the community, progressing to full time work, cleaning, washing, sewing and cooking for the community in accordance with a roster, in the teams as soon as they left school, around the age of 15.

The Gloriavale defendants denied that the women were employees and claimed that they were ‘volunteers’ on the basis that the work was conducted as an expression of their religious commitment to live in a communal setting.

The Employment Court disagreed and found that the work was ‘grinding, hard, unrelenting, and physically and psychologically demanding’ that has left “deep scars” for the plaintiffs.

The Men’s Case

“The Men’s Case”, as Chief Judge Inglis referred to it, involved three former male residents who claimed they were employees and deprived of minimum working standards. The men claimed that they were required to work long hours, under harsh conditions, from the age of six until they left the community with minimal leave.

Gloriavale claimed that the work carried out by the men was chores, then work experience and later work done in accordance with a Partnership Agreement for which they received payment as ‘drawings’ made into a nominated account, which was automatically paid back out again and into the Gloriavale shared account.

The men said that they had no choice but to sign the documents agreeing to this arrangement and that there would have been consequences for them had they refused to. They drew a picture of a highly controlled, authoritarian environment which did not permit dissenting voices and which corralled obedience through fear.

The Employment Court ruled that the men were deemed employees from the age of six. Chief Judge Inglis rejected the claim that the work was ‘chores’ and noted that it was clear that “the ready access to child labour constitutes a significant factor in the success of the Gloriavale business model.”

How are the Gloriavale decisions relevant to your organisation?

The Gloriavale decisions follow the Employment Court’s decision in October 2022 confirming that Uber drivers are employees not independent contractors. The decision highlighted the growing risk that companies using contractors may be in breach of minimum employment standards, and is now under appeal.

Both cases show a willingness by the Court to look behind the arrangements in place between the parties to determine the true nature of the relationship. This may have a significant financial impact on organisations that have arrangements in place, including volunteer arrangements, independent contractor arrangements, gig workers, or complex legal structures that don’t reflect the substance of the relationship, and that ultimately results in workers being deprived of minimum employment conditions.

What happens next?

While the Gloriavale decisions are a promising development towards ensuring that all New Zealanders, including the male and female residents of Gloriavale, are afforded minimum employment protections, it is clear that there is still a long way to go.

Despite the Employment Court’s recent decisions confirming the former residents’ status as employees, there are likely still ‘loopholes’ in the law that the Gloriavale leadership and others can exploit, including paying residents a notional salary which they agree, potentially under duress, to pay back to the community.

What is clear is that, as a society, we need to protect people from undue power and psychological coercion of the type that the plaintiffs in both cases have described and which we also see in cases of bullying and sexual harassment. In 2023 in New Zealand these types of abuses cannot be acceptable.

This is a summarised version of Gloriavale – A cautionary tale. Read the full version here.