29.05.2024

Court of Appeal overturns Employment Court decision stripping family carers of their employment status

Two parents of disabled adult children have lost their status as employees of the Ministry of Health (MOH). The Employment Court had previously found that they were “homeworkers” and therefore employees, entitling them to various protections, including minimum wage, and leave entitlements. The Government appealed the Employment Court’s judgment, and the Court of Appeal has since ruled that Christine Fleming and Peter Humphreys do not fall under the definition of homeworkers in section 5 of the Employment Relations Act 2000 (ERA), and therefore are not deemed employees of the MOH under section 6 of the ERA.[1] 

A brief history

In 2021 the Employment Court held both Ms Fleming and Mr Humphreys were employees of the MOH. This was on the basis they could not be employees of their children as their children did not have the capacity to enter into an employment agreement, and thus engage their parents as homeworkers under section 5 of the ERA. The Government appealed both decisions, and a joint judgment has recently been released. In addition, Ms Fleming cross-appealed, seeking an order that she had grounds for a personal grievance as a result of inappropriate funding and was entitled to back-pay, compensation and interest.

Mr Humphreys

Mr Humphreys is the primary caretaker for his daughter who has Angelman syndrome and requires 24/7 supervision. If it was not for Mr Humphreys’ willingness and ability to care for his daughter, it is likely she would require round-the-clock residential care. Mr Humphreys began receiving funding through the Funded Family Care scheme (FFC) and later the Individualised Funding (IF) scheme when this superseded the former. The FFC scheme was established following Ministry of Health v Atkinson, where it was held an absence of funding for carers who were also a family member was discriminatory under the New Zealand Bill of Rights Act 1990.[2] Under FFC, the disabled person was required to sign a written employment agreement and assume the obligations of an employer, funds were paid to their bank account and then paid to the family carer.

The IF scheme replaced FFC. IF provided an annual funded budget, whereby the person receiving the disability support funding could elect to do with it what they wanted, including pay for third party disability support. Since 2020, Ms Humphreys’ care has been funded by the IF scheme, and is paid into her bank account, which is operated by Mr Humphreys.

Ms Fleming 

Ms Fleming’s son, Mr Coote, has physical and intellectual disabilities. Ms Fleming opted to receive financial support through the Work and Income benefit, on the basis it provided better financial assistance than the MOH’s FFC scheme. She also took issue with the notion that her high needs, intellectually disabled son could, or would, be deemed her employer under the FFC scheme. Rather, she considered that the MOH must be her employer, as the work she carried out was work on the Government’s behalf and therefore she was entitled to be remunerated for it. In recent times, Ms Fleming has changed to receive IF funding. 

The Court of Appeal’s determination in Attorney-General v Fleming & Ors 

The Court of Appeal addressed several questions in its judgment, including whether the Employment Court erred in its finding of homeworker status for both Ms Fleming and Mr Humphreys. For the purposes of this article, we focus solely on the Court of Appeal’s determination of the Respondents’ employment status. 

Was Mr Humphreys a “homeworker” (s 5 ERA) when he cared for Ms Humphreys?

The Court of Appeal found Mr Humphreys had been a “homeworker” as defined by section 5 of the ERA and consequently an employee of the MOH when he cared for his daughter under the FFC scheme. The Court said under FFC, the only way a disabled person could have a family carer was by employing the family member. However, when the FFC scheme was replaced by IF, essentially a bulk-funding scheme, Mr Humphreys was no longer required to be employed as his daughter’s caretaker and therefore no longer deemed a homeworker and employee of the MOH under the ERA.

Was Ms Fleming a “homeworker” (s 5 ERA) when she cared for Mr Coote?

A similar conclusion was reached regarding Ms Fleming’s care for her son. The Court of Appeal overturned the Employment Court’s decision, and concluded Ms Fleming was not a “homeworker” as defined by section 5 of the ERA. The Court of Appeal said Ms Fleming could not be deemed a homeworker, and thus an employee of the MOH, when there was no knowledge of, or actual, engagement between Ms Fleming and the Ministry. Regarding the personal grievance claim, the Court addressed this briefly as Ms Fleming was not an employee. In any event, the Court found she did not have grounds for a personal grievance on the basis of discrimination, noting the significant uncertainty of the discrimination claim.

What now?

The Court of Appeal’s decision has left Ms Fleming and Mr Humphreys in a state of limbo. They are not employees, and therefore not entitled to employment law rights and protections, such as entitlement to backpay, compensation and the right to raise a personal grievance. Yet, they find it hard to deem themselves contractors. Ms Fleming’s lawyer has said they plan to seek leave to appeal to the Supreme Court.

This case is part of a raft of recent court decisions about employee status – including the Uber litigation[3], Gloriavale cases[4], and courier cases[5]. A finding that someone is an employee brings with it significant protections and entitlements (as well as obligations). In addition to the matters going through the courts, the Minister for Workplace Relations has indicated the Government’s intention to amend or refine legislation in this area. This is very much a developing area of law, so watch this space!

If you have any questions about employment status, please get in touch with our Employment Team or your usual contact at Hesketh Henry.

 

Disclaimer:  The information contained in this article is current at the date of publishing and is of a general nature.  It should be used as a guide only and not as a substitute for obtaining legal advice.  Specific legal advice should be sought where required.

 

[1] Attorney-General v Fleming & Ors [2024] NZCA 92

[2] Ministry of Health v Atkinson [2012] NZCA 184

[3] E tū Inc & Anor v Raiser Operations BV & Ors [2022] NZEmpC 192

[4] Courage & Ors v Attorney General [2022] NZEmpC 77, Pilgrim & Ors v Attorney General & Ors [2023] NZEmpC 105

[5] Wang v HungryPanda (NZ) Ltd [2022] NZERA 154

 

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