Gloriavale working relationships mean children employees

The Chief Judge of the Employment Court recently found that three former members of the Gloriavale Christian Community were employees. They had applied to the court for declarations to this effect.

However, due to a complex structure, including limited liability companies, partnerships, a nominee company and a holding company, the court has yet to determine who was their actual employer.

It also remains to be seen whether the employees will bring a claim for wage arrears, now that their status has been determined.

The Gloriavale structure included limited liability companies producing various goods for commercial sale. Children work in the Gloriavale business from a young age. Gloriavale tried to characterise this work as "chores".

The businesses include a honey processing plant and a large-scale dairy farm. Gloriavale owns substantial assets generally purchased with funds generated by its commercial endeavours. The mean age of Gloriavale community members is 12 years with 30 to 40 children born each year. The court found that it was plain that ready access to child labour was a significant factor in the success of the Gloriavale business model.

Once a male turns about 16 years of age they sign what is called a Deed of Adherence and work as an "Associate Partner". Associate Partners and Partners receive payment for their work, referred to as "drawings" or "a share in profits". Payment is made into a nominated account and is automatically paid back out again and into the Gloriavale shared account.

The applicants argued that at all times they were in an employment relationship due to the control that was exercised over them, over the he Community and their access to the necessities of life.

In 2020/21 the Labour Inspectorate concluded an inquiry, finding the workers were not employees. This was based on Gloriavale documentation which the Labour Inspector found demonstrated an intention to create a relationship other than employment and that the residents had chosen to live a communal way of life. In the case before the court, Gloriavale argued the work performed was voluntary in the way in which it was performed within the Community. This was against a backdrop of residents agreeing to live within the Community framework.

The court found that parents played a significantly diminished role in aspects of their children’s life and upbringing. If a parent was not happy with where their child was assigned to work, they could "theoretically" complain to the Shepherds. However the evidence was that most of the parents in Gloriavale would not be game to take it that far as they would be seen as challenging the authority of the Leaders.

Work was performed with an expectation that food, accommodation, clothing and the necessities of life would be provided. Evidence was heard of working in Community gardens, the moss factory, dairy farms, a piggery and the honey business. There was a roster to enable the boys and their parents to know where they had been placed. Ultimately the interests of the Gloriavale businesses dictated where labour resources were applied.

The Chief Judge described the work as laborious, often dangerous, requiring physical exertion over extended periods of time and being of commercial benefit. The work was not assigned by parents but by Gloriavale Leadership. Parents were not involved in any meaningful way in decisions about where the work took place, how long it took place for or when their children would be required to work. The court found that none of the boys had a choice about if and where they worked. Decisions were made by the Gloriavale Leadership Group under the oversight, direction and control of the overseeing Shepherd. The Leadership Group holds absolute power and control, including in relation to work.

The court considered the claim in the context of Section 6 of the Employment Relations Act 2000. This defines an employee as meaning "any person of any age employed by an employer to do any work for hire or reward under a contract of service". The definition however excludes a "volunteer". Gloriavale argued that no contract had been entered into but, rather, the boys carried out chores, then work experience and, later, were contributing voluntarily to the Community by working.

The Chief Judge found it was not helpful to try to shoehorn the case into the sort of strict contractual framework that applies to a commercial agreement. While an employment relationship was founded on a contract of service, it was a relational contract involving a very different set of dynamics. It was well-established that contractual relationships could be inferred by conduct. The court looked at the totality of the dealings to determine the real nature of the relationship.

In response to the arguments the spiritual life and practical life at Gloriavale were inextricably intertwined, the court found Gloriavale’s faith-based community dealt with more than religious matters. All of this was clearly reflected in the Community’s extensive commercial operations in which the boys worked. The fact that work practices took place within a religious community did not mean that those work practices were beyond the reach of the law.

In response to the argument the boys were simply performing "chores", the court stated there was, as with anything involving questions of fact and degree, a spectrum. This case did not sit in the grey area. The commercial nature of the activities performed; Gloriavale’s commercial businesses accrued the benefits of the boys’ efforts; the activities were consistently performed over an extended period and 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.

The legal definition of "volunteer" is "someone who works but does not expect to be rewarded for doing so and receives no reward for the work performed". The boys expected, and were provided with, the security and benefits of the community, including food, the necessities of life and the ability to participate in the community.

The Chief Judge’s findings have prompted a rash of further inquiries from Government agencies including Oranga Tamariki. The judge explained that her extensive comments about power and control within the Gloriavale Community provided essential background for the analysis of whether the applicants were employees. However those comments have also prompted much more extensive inquiries into the exercise of that power and control within the community.

Disclaimer: The opinions expressed in this article are those of the writer and do not purport to be specific legal or professional advice.

 - John Farrow is a litigation partner with Dunedin law firm Anderson Lloyd.

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