Whether someone is an employee, or a volunteer is an important distinction that holds significant legal ramifications. The line between the two is not always clear, however. While Section 6 of the Employment Relations Act (s6) outlines the test for the two roles, it is not always so simple as applying a statutory definition. The Court in Pilgrim & Ors v Attorney-General & Ors discusses this struggle and sheds some light into how we go about drawing the line between the two.
Background:
This case is about the employment status of several women who used to live within the Gloriavale Community.
These women left the community at different times but came together to seek a declaration on the status of their role while living in Gloriavale. The women worked long, hard hours doing a range of jobs from producing food to cooking and cleaning. They did all of this without financial compensation.
The fundamental issue addressed in this case was whether the women were employees for the purposes of s6 and therefore entitled to minimum entitlements, compensation, and loss of renumeration.
Were the women volunteers?
The Court had to first determine whether the Women were volunteers under s6 and therefore whether they were unable to be employees under the Act. If they were found to be volunteers, they could not be considered employees as per s6 of the Act.
This hinged on whether they expected to receive compensation for their work.
Gloriavale argued that “they expected no reward and received no reward for their work and there was no intention to create legal relations such as required by s 6.”
The Court disagreed and held that the plaintiffs expected to be rewarded for their work and were in fact, rewarded for their work.
Therefore, because they were not volunteers, they were not barred from being considered employees.
Were the women employees?
The Court held that the women were employees.
The fact that there was no formal employment contract between parties, was irrelevant. It was the Courts role to determine the ‘real nature’ of the relationship by considering ‘all relevant factors.’
The Courts held that “the plaintiffs worked under the strict direction and control of the Overseeing Shepherd and were subordinate to him. They worked strictly as required, for long hours and for years on end. The nature of the work was akin to working in a large-scale hostel, which would otherwise be paid for. The work was essential to the Community’s operations. The plaintiffs were rewarded for the work, namely by being able to remain in the Community, and this was understood by all parties.”
The Court concluded from these facts that the real nature of the relationship was one of employment.
Take aways:
It is not enough for a company to have written consent from someone that they are prepared to work for free, if the relationship is in fact seen to be an employee, employer relationship. It is irrelevant what the parties have or have not agreed, it is the job of the Courts to determine the ‘real nature’ of the relationship by considering all relevant factors. You can’t contract out of the law.
Relevant factors are factors that would point to a usual employee, employer relationship. These will vary depending on the context but could include:
- How integrated is the role of the individual?
- How much control does the organisation have over the individuals’ work?
- Is the individual getting compensated in some way for the work?
- Will there be ramifications for the individual if they don’t show up, and how severe will they be?
- How much does the organisation rely on that one individual’s role?
These questions are important to consider and the answers to them will determine whether the Court will find them to be an employee or not.
Simply put, the more integrated, compensated and relied upon the more likely they are deemed to be an employee and therefore must be treated as one under the law with the same protections and benefits. You cannot contract out of this obligation.
If you have any questions about this issue, please contact our team here at Watermark Employment Law – we are more than happy to help.
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