Comment: A recent Employment Court ruling will have implications for agricultural workers, writes Jills Angus-Burney.

An Employment Court ruling in Leota v Parcel Express Ltd that a contract courier driver is an employee will have huge implications beyond the courier industry to reach workers in agricultural employment too.

Mike Leota, a driver for Parcel Express Ltd, asked the court for a declaration that he was an employee. The company said he was an independent contractor.

Chief Judge Christina Inglis released her judgment on Thursday, May 7, ruling in favour of Leota's application.

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Inglis said employee status is an important issue as it provides gateway access to a range of statutory entitlements such as minimum wages, redundancy and holiday pay. And in a Covid world, these entitlements significantly apply to the employer's duty of care in supporting workers through this lock-down.

The judge said in Leota's case she was satisfied that the real nature of the relationship between him and Parcel Express was an employment relationship.

"I was left with little doubt that Mr Leota had no real understanding of what his status was when working for Parcel Express."

In her decision, Judge Inglis said a high level of control was exerted by Parcel Express over Leota's work.

I applaud Inglis' decision as it is a landmark decision that will have huge implications for agricultural employers that continue to blur the boundaries between those they employ as sub-contractors and employees.

The decision reinforces my view that status is the most critical issue in the employment relationship.

For rural workers this looks firstly at whether one is an employee or independent contractor, in fact serving someone else's business.

In the second test of status, the focus is on whether a worker is permanently or seasonally employed, or a genuinely casual or occasional worker.

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At the hearing Parcel Express said Leota signed an agreement as an independent contractor with "eyes wide open".

This is surely the case for shearing workers with business sense or nous, who also own and operate farming businesses, and all the responsibility that comes with that relationship.

However, Inglis said, English is Leota's second language and he did not have a grasp of the legal requirements relating to that status.

This was very much the finding from the Christchurch Employment Relations Authority in the 2007 precedent case Rongonui v Mana and Vanessa Te Whata, after a 16 year old presser from the North Island had been sacked in a Mossburn woolshed.

In that matter the employer, trading then as NZ Contracting Solutions Inc, had declared all workers independent contractors.

Philip Cheyne for the Authority in Rongonui made the same declaration as Inglis in Leota, solely for the individual concerned.

However, in preparing for the hearing it was discovered that Rongonui had no PAYE tax records and the employer had no charitable tax status.

In Leota, Judge Inglis reminds industry that, "every worker in New Zealand has the statutory right to seek a declaration as to whether they are an employee. If they are found to be an employee they are entitled to the protections and benefits that go with that status."

Following the MBIE Labour Inspectors advice, from audits conducted on NZ Shearing Contractors Association members in 2016 and a second tranche in November 2019, the status of shearing industry workers is clear – like Leota, a worker cannot be made to be an independent contractor, and MBIE say shearing workers cannot be employed seasonally or permanently as a casual worker on a "day to day" or "as and when required" basis.

Even now, as we exit from the lock-down provisions, the protections and benefits of shearing industry workers is still in question, and it is these gateway issues that dog the industry.

On-going squabbles over employment status have emerged from the State of Emergency in a number of niggardly disputes over the wage subsidy and public holiday pay that have escalated from Easter onwards.

This is most often a person working for a shearing contractor just before lock-down, was an employee going into the State of Emergency, with all the requisite entitlements and benefits that could have brought them.

Some that were sent home, for example from shearing quarters, then subsequently struggled to have their status confirmed as on-going employees.

Even though the business operated as essential work, workers may have been temporarily unavailable by their "bubble" status or the nation-wide travel bans in place.

Some previously employed workers were also told they were ineligible for the wage subsidy and reduced to the bare minimum of a WINZ benefit, or in some cases even dismissed during the lock-down.

It may take a renewed focus on the Leota decision for the shearing industry to resolve their gateway access to a full range of employee entitlements.

- Jills Angus Burney is a barrister and a former world record holding professional shearer.