The Ministry of Business, Innovation and Employment (MBIE) has issued a discussion document in which the Government is proposing to establish statutory responsibilities to identify and combat worker exploitation across the operations and supply chains in all businesses and organisations. MBIE defines modern slavery as the severe exploitation of a person who cannot cease work due to threats, violence or deception. This includes practices such as forced labour, debt bondage, forced marriage, slavery, and human trafficking.
With that context in mind, we pivot to discuss the Employment Court’s recent judgment in which the Chief Judge has highlighted serious and exploitative work practices and concluded that members at the Gloriavale community were working as ‘employees’. This judgment means that they have the right to enjoy the entitlements and protections provided by our employment laws. In reaching its conclusions, the Employment Court has referred to the detailed evidence given by the applicants, who were required to perform dangerous and laborious work from the age of six.
In many ways this was an unusual case. The Employment Court had to apply settled legal principles in the context of a secluded religious community made up of members who live and work in a manner that (they believed) is required by their religious faith. While the leadership group of Gloriavale (who are described as Shepherds) sought to characterise the work carried out as ‘chores’ (when performed by those aged from 6 to 12), as ‘work experience’ (when performed by those aged 15), and as work carried out by volunteers (when performed by those aged 16 and above), the Employment Court has rejected all of these labels.
The Employment Court’s judgment spans 58 pages and over 200 paragraphs. By way of summary, the Court’s findings and reasons can be distilled into 3 main strands.
The commercial nature of the businesses and structures
First, the Employment Court looked at the nature and structure of the extensive businesses undertaken by the entities created by Gloriavale’s leadership, and it has found that they have set up a complex overlay of commercial and legal structures through which their business enterprises operate and achieve their commercial objectives. Their trading entities have operated a range of businesses, including a commercial honey making plant, large-scale dairy farms (which runs in excess of 3,000 cows), a hunting business, and a moss factory. The Court noted that the honey produced by Gloriavale included sales to the export market. In addition, the Court noted that Gloriavale owned substantial assets, purchased out of funds generated by its commercial endeavours. The example given by the Court was the recent purchase of a property at Lake Brunner in excess of 31,000 m2. This was described in evidence as costing around $10 million, which was paid off in less than 5 years.
The entities linked to Gloriavale consisted of a trust which was accorded charitable status in 2008 (the Christian Church Community Trust), a partnership (Christian Partners partnership), a holding company, a nominee company, and numerous limited liability trading companies. The trading companies included Forest Gold Honey Ltd, Harvest Honey Ltd, Apetiza Ltd, Air West Coast Maintenance Ltd, Air West Coast Ltd, Canaan Farming Dairy Ltd, Canaan Farming Deer Ltd, Canaan Farming Engineering Ltd, Caring Midwives Ltd, Haupiri Net Ltd, Value Proteins Ltd, Ocean Harvest International Ltd, Forest Gold and Lake View Moss Ltd (now defunct).
The laborious work required to be carried out from a young age
Secondly, the Court looked at the nature of the work performed by the applicants from the age of 6 up to 18. By way of example, this included operating saws, hand tools and power tools to make hives for the honey business; milking cows at the dairy farms; harvesting moss from the swamp and working at a conveyor belt in the moss factory; cleaning out pig sties at the piggery; and operating machinery, driving diggers and trucks on Gloriavale properties.
The Employment Court pulled no punches in describing the evidence of the requirement to perform work for long hours on a regular basis from a very young age. The community members were at times required to carry out potentially dangerous tasks, and some had been subjected to rigorous and sometimes violent supervision if they were not working hard or fast enough. The evidence given to the Court included being subjected to physical and psychological punishment. This included being struck with sufficient force to leave bruising that lasted for several days, being denied food and publicly shamed, and being subjected to isolation and cut-off from all contact with family and friends for days.
Further, it was a consistent theme from the evidence given to the Court that the work carried out by the community members was ultimately dictated by the Gloriavale leadership. While individuals may express their preferences in what they wanted to do, this was ultimately decided by Gloriavale’s leadership and their delegate(s). The Court also described the significant emphasis put on subscribing to Gloriavale’s work ethos and the expectation for all members to work hard.
The context and community within which the work was performed
Third, the Court looked at the context and environment within the Gloriavale community in order to assess whether the parties’ relationship was an employment relationship. It was a major strand of the defendants’ case that the members of Gloriavale each chose a way of life for themselves and their family. In particular, the plaintiff’s parents chose to live in Gloriavale, and they accepted its communal life, shared faith and values system. It was submitted that as the children grew up, it became their choice as to whether they would remain at the Gloriavale community. If they chose to stay, then they were essentially choosing to be subject to the community’s way of life.
However, in light of the evidence given by the applicants who were all born and raised in the Gloriavale community and did not know about the outside world, the Court considered the reality of the lack of autonomy and choices available to Gloriavale members. The following witness testimony given in cross-examination shows the reality for Gloriavale members:
“So I think of a boat and there’s a whole lot of layers and there is a whole lot of oarsmen, on those layers in the boat. And you are told, well you are born at the bottom of that boat, on the bottom floor and you work hard to progress up those floors. And you are told that this boat is the best boat in the world, I mean it is the best place in the world and you believe it, because when you look out through your porthole, you see the ocean and they say, you go out there and you are going to drown. And as a kid mate, as a kid you are like, that makes sense, that makes sense, and so you work hard and work up that layer. But what you are not told is that water outside the boat, it is only knee deep. But you think if you leave that boat, if you leave Gloriavale you are going to drown, you are going to die. And so you row hard. There is no choice; you can’t leave that boat. You are in a system where you have to work hard to work up that layer. I hope that kind of gives you a picture of what the psychological trap is that you are born into, you don’t have a choice.”
The Employment Court had to assess whether the presence of a familial context and religious beliefs precluded the applicants from being an ‘employee’. The Court observed the fact that the work practices took place within a religious community with a particular view on how it should operate, and the principles under which it will function, does not mean that those work practices are beyond the reach of the law. In its analysis, the Employment Court highlighted that this case was not a finely balanced one, and it did not sit in any ‘grey area’.
Rather, the facts and evidence firmly pointed to the existence of commercial activities being carried out by persons who were obliged to carry out work, and they were properly characterised as ’employees’ under the Employment Relations Act. The evidence reflected that young workers were selected for particular jobs by management; they attended specified workplaces at times determined by management; they worked under the strict direction and control of management; often in environments of an industrial or hazardous nature; for the hours required by management; and for the benefit of Gloriavale’s business endeavours.
Generally, after a person has been declared to be an ’employee’, the next step is to assess the employees’ claims against their employer and determine whether their rights and entitlements have been met or violated. However, this is a relatively unusual and complex case due to the serious nature of allegations and the environment within which the work has been carried out. In the absence of an employment agreement, there is no clarity over the identity of the employer(s). This task is further obscured by the number of businesses and entities which have been established and operated by the leadership of Gloriavale. All of this will be subject to further litigation unless the matter is privately settled between the parties.
Further, the Court has signalled that the evidence heard by the Court raises serious concerns across a broad range of subjects. Since the decision was issued, WorkSafe has stated that their inspectors will commence further investigations into the safety and work practices at Gloriavale. Charities Services (part of the Department of Internal Affairs) has also said that they will investigate the validity of Gloriavale’s charitable status. Based on the Court’s findings, it would be warranted for Gloriavale’s entities to be audited and investigated for tax compliance, given the evidence that workers have been instructed not to record the full number of hours worked, even though all wages were paid into nominated bank accounts which the workers had no personal control over. The manipulation of work time may facilitate the minimisation of taxes and maximisation of tax credits (such as Working for Families). Further, there may be breaches of the Education and Training Act, which prohibits the employment of school-age children at any time within school hours, or at any time which would prevent or interfere with attendance at school. Lastly, the Health and Safety at Work (General Risk and Workplace Management) Regulations impose duties on employers to ensure that employees under 15 years of age do not work in areas that are likely to cause them harm. In short, there is a lot to be done to ensure legal compliance.
Identifying modern slavery
Coming back to the issue of identifying and combating modern slavery. We would suggest that we do not have to look far to identify what modern slavery could look like today. The Court’s findings are sufficient to appreciate that modern slavery exists in New Zealand.
The Employment Court noted that the Labour Inspectorate had conducted two previous inquiries at Gloriavale. In both inquiries, the focus was on the parties’ legal relationship, and it was concluded that people at Gloriavale chose to live a communal way of life, and accordingly they could not be said to be employees. These inquiries did not progress beyond a preliminary review. On one hand, it is apparent that Gloriavale used tactics to conceal the nature and extent of their work practices – some of these have been outlined in the Court’s judgment.
On the other hand, the Court has reached a vastly different view by considering the applicant’s accounts and applying established legal principles. The Court noted that alarm bells should “have been ringing from even a cursory reading” of the documents presented by Gloriavale’s leadership group – as it was clear that they purport to hold absolute power and control, including in relation to work, and that members of the community had to submit to the leaders and were not to report any concerns to external agencies. Given the existence of multiple accounts of abusive and unsafe work practices, the cursory reviews were inadequate to reveal the true nature of Gloriavale’s work practices, and the inspectors could not have looked beyond the artificial surface in their previous “investigations”.
Gloriavale has thrived in secrecy for generations. Now that the existence and use of exploitative work practices have been identified and highlighted by the Employment Court, how will our businesses and leaders react? And the question remains, what is the appropriate response to the serious findings made by the Court?
If you need advice or assistance, we encourage you to contact us.