Attorney-General v Fleming
[2024] NZCA 92
•9 April 2024 at 11 am
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA371/2021 [2024] NZCA 92 |
| BETWEEN | ATTORNEY-GENERAL |
| AND | CHRISTINE FLEMING |
| AND | JUSTIN JAMES COOTE |
| CA742/2021 | ||
| BETWEEN | ATTORNEY-GENERAL | |
| AND | PETER HUMPHREYS | |
| AND | SIAN HUMPHREYS | |
| Hearing: | 29 and 30 November 2022 and 14 March 2023 |
Court: | French, Brown and Courtney JJ |
Counsel: | S V McKechnie, B A Heenan and T J Bremner for Appellant in CA371/2021 and CA742/2021 |
Judgment: | 9 April 2024 at 11 am |
JUDGMENT OF THE COURT
A The appeal in CA371/2021 is allowed.
B The cross-appeal in CA371/2021 is dismissed.
C The appeal in CA742/2021 is allowed in part.
D There is no order as to costs.
____________________________________________________________________
REASONS OF THE COURT
(Given by Courtney J)
Table of contents
| Para No. | |
| INTRODUCTION | |
| A brief outline of the cases | [1] |
| Issues on appeal | [8] |
| Crown appeal against Fleming | [8](a) |
| Ms Fleming’s cross-appeal | [8](d) |
| Crown appeal against Humphreys | [8](g) |
| The statutory and policy context of funding family carers | |
| The New Zealand Public Health and Disability Act 2000 | [9] |
| The Service Specifications | [11] |
| Funded Family Care | [14] |
| Individualised funding | [20] |
| CROWN APPEAL AGAINST FLEMING | |
| Ms Fleming’s and Mr Coote’s circumstances | [22] |
| The Employment Court decision | [27] |
| Question (a): Was Ms Fleming a “homeworker” as defined by s 5 of the ERA when she cared for Mr Coote? | [32] |
| Did the Judge err by applying s 6(2) when considering whether Ms Fleming was a homeworker? | [33] |
| Did the Judge misinterpret Lowe v Director-General of Health? | [42] |
| The Supreme Court decision in Lowe | [43] |
| The Employment Court’s interpretation of Lowe | [52] |
| The application of Lowe to the present case | [61] |
| Did the Court err in finding that there is an obligation on the State to care for disabled people over the age of 18? | [71] |
| Convention on the Rights of Persons with Disabilities | [72] |
| The issue in the Employment Court | [76] |
| Appeal | [79] |
| Summary on question (a) | [87] |
| Question (b): Was the Employment Court wrong in finding that the “well‑established test for what constitutes work” as set out in Idea Services applied to Ms Fleming? | |
| The issue in the Employment Court and on appeal | [89] |
| Did the Judge err in applying Idea Services? | [95] |
| The statutory framework does not define “work” | [97] |
| The application of Idea Services | [103] |
| Question (c): Did the Employment Court err in finding that Ms Fleming has a personal grievance? | [122] |
| Summary | [135] |
| FLEMING CROSS-APPEAL | |
| Question (d): Did pt 4A of the PHDA preclude Ms Fleming from recovering arrears of wages and holiday pay? | |
| The issues in the Employment Court and on appeal | [136] |
| Were payments to Ms Fleming permitted by an applicable family care policy for the purposes of s 70C(a)? | [140] |
| Were payments to Ms Fleming authorised by an enactment? | [146] |
| Question (e): Did the Employment Court err in failing to consider the imposition of a penalty under s 134 of the ERA? | |
| Penalties under the Employment Relations Act | [153] |
| Ms Fleming’s claim for a penalty order in the Employment Court | [155] |
| Should the Judge have considered imposing a penalty? | [160] |
| Question (f): What is the level of knowledge required to establish a breach of an employment agreement for the purposes of s 134 of the ERA? | [165] |
| CROWN APPEAL AGAINST HUMPHREYS | |
| Mr Humphreys’ and Ms Humphreys’ circumstances and their claim in the Employment Court | [166] |
| Question (g): Did the Employment Court err in its assessment of the effect of pt 4A and s 88 of the PHDA on its ability to assess the employment relationship under the FFC scheme? | |
| The issue in the Employment Court | [180] |
| The reasoning in Fleming | [182] |
| Did the Employment Court have jurisdiction to determine Mr Humphreys’ employment status? | [188] |
| The Funded Family Care framework | [191] |
| The Operational Policy | [194] |
| Did the FFC framework create a deemed employment agreement? | [199] |
| Question (h): Was Mr Humphreys a homeworker as defined in s 5 of the ERA, and therefore an employee of the MOH, when he cared for Ms Humphreys? | |
| The Employment Court decision | [228] |
| Error in relation to the Family Funded Care period? | [233] |
| Error in relation to the Individualised Funding period? | [247] |
| Relief | [261] |
| Question (i): Was the Employment Court wrong in finding (if it did) that the Court of Appeal’s approach in Idea Services applies to an assessment of hours worked by Mr Humphreys as a homeworker for the FFC and/or IF periods? | [262] |
| SUMMARY OF CONCLUSIONS ON APPEALS AND CROSS-APPEAL | [263] |
| Crown appeal against Fleming | [263](a) |
| Ms Fleming’s cross-appeal | [263](d) |
| Crown appeal against Humphreys | [263](g) |
| Costs | [265] |
____________________________________________________________________
INTRODUCTION
A brief outline of the cases
These appeals concern the basis on which the care of adult disabled people by family members has been funded since 2013. They are latest in a line of cases that have addressed the funding of family carers for disabled people.[1]
[1]See Ministry of Health v Atkinson [2012] NZCA 184, [2012] 3 NZLR 456; and Chamberlain v Minister of Health [2018] NZCA 8, [2018] 2 NZLR 771.
In issue are the funding schemes known as Funded Family Care (FFC), which operated between 2013 and 2020, and Individualised Funding (IF), which replaced FFC as one means of funding family carers.[2] Underlying the issues for determination are two general complaints. The first relates to the requirement under FFC that if a disabled person wished to have a family carer, the disabled person had to be the carer’s employer even if (as in these cases) the disabled person lacked the mental capacity to fulfil that role and did not have a welfare guardian under the Protection of Personal and Property Rights Act 1988 (PPPRA).[3] The Crown maintains that under FFC the employment relationship was a deemed one, so that capacity was not an issue. The second main complaint is that, in assessing the amount of care it would fund, the Ministry of Health (MOH) failed to give effect to the decision of this Court in Chamberlain v Minister of Health, which held that intermittent night care, which was not funded at all, should be remunerated.[4]
[2]IF pre-dated FFC but, following the disestablishment of FFC in 2020, was modified to enable funding for a disabled person to employ their family carer.
[3]The Family Court has jurisdiction under s 6 of the Protection of Personal and Property Rights Act 1988 to appoint a welfare guardian for any person who wholly or partly lacks capacity to understand or communicate decisions in respect of matters relating to their personal care and welfare. Under s 18(2) a welfare guardian has all powers reasonably required to make and implement decisions for the person lacking capacity. Under s 19(1) everything done by a welfare guardian in the exercise of powers conferred by the Act has the same effect as it would if the person lacking capacity were doing it and they had full capacity.
[4]Chamberlain v Minister of Health, above n 1, at [83]–[85].
Christine Fleming and Peter Humphreys each care for their respective adult disabled child. Ms Fleming’s son, Justin Coote, has physical and intellectual disabilities, and has high needs. Ms Fleming did not become aware of the FFC scheme until 2018 and then elected not to accept funding for Mr Coote’s care under FFC. Instead, she continued to receive a benefit paid by Work and Income | Te Hiranga Tangata (WINZ), which enabled her to stay at home and care for Mr Coote. Since 2021, Ms Fleming has been funded under the IF scheme.[5]
[5]This funding is without prejudice to the current appeal.
Mr Humphreys cares full-time for his daughter, Sian Humphreys, who has physical and intellectual disabilities and very high needs. From 31 March 2014, Ms Humphreys was funded under the FFC scheme. For some of the FFC period, Ms Jimenez, Ms Humphreys’ mother, was also funded as a carer.[6] Since 2020 Ms Humphreys, too, has been funded under the IF scheme.
[6]At some points Ms Jimenez appears to have been funded directly under FFC and at other times she was available as a respite carer. For reasons discussed further below at [238]–[241], we did not consider the care Ms Jimenez provided changed the nature of the relationship between Mr Humphreys and the MOH.
Neither Mr Coote, nor Ms Humphreys, has the mental capacity to enter into an employment agreement.[7] Neither had a welfare guardian appointed under the PPPRA. Ms Fleming and Mr Humphreys say that, in reality, they were employed by the MOH. They each brought proceedings against the Attorney‑General in respect of the MOH seeking declarations that they were employees of the MOH in relation to the care they provided for their children.[8] In addition, Ms Fleming sought an order that she had shown a personal grievance as a result of not having been funded appropriately since at least 1 October 2013, and was entitled to back pay, compensation and interest. She also sought an order imposing a penalty on the Crown for breaches of its statutory obligations and the asserted employment agreement.
[7]The Crown formally conceded this fact at the outset of the hearing before us.
[8]Ms Fleming’s proceedings named the Attorney-General on behalf of the Minister of Social Development and Minister for Disability as the first defendant, the Attorney-General on behalf of the Minister of Health as the second defendant (referred to collectively as the MOH), and Mr Coote by his litigation guardian Mr Meys as the third defendant. Mr Humphreys’ proceedings named Ms Humphreys by her litigation guardian Mr Meys as the first defendant and the Chief Executive of the MOH as the second defendant.
The claims were heard separately in the Employment Court.[9] Judge Inglis held that the Employment Relations Act 2000 (ERA) applied to Ms Fleming and Mr Humphreys. Further, both Ms Fleming and Mr Humphreys were homeworkers as defined in s 5 of the ERA, and therefore employees of the MOH for the purposes of s 6(1) of the ERA, because neither Mr Coote nor Ms Humphreys has the capacity to enter into an employment contract. Notwithstanding these findings, the Judge held that pt 4A of the New Zealand Public Health and Disability Act 2000 (PHDA) precluded recovery of minimum entitlements in relation to the period the FFC scheme was in place. She also held that the Crown had acted in the genuine belief that Ms Fleming was not an employee and so declined to impose a penalty.
[9]Fleming v Attorney-General (sued on behalf of the Honourable Carmel Sepuloni (in her capacity as the Minister of Social Development and Minister for Disability) [2021] NZEmpC 77, (2021) 18 NZELR 67; and Humphreys v Humphreys [2021] NZEmpC 217, (2021) 18 NZELR 668.
The Crown was granted leave to appeal both decisions.[10] Ms Fleming was granted leave to cross-appeal.[11]
Issues on appeal
[10]Attorney‑General v Fleming [2021] NZCA 510, [2021] ERNZ 943; Director‑General of Health [2022] NZCA 92.
[11]Attorney‑General v Fleming, above n 10.
The following issues are for determination:
Crown appeal against Fleming
(a)Was Ms Fleming a “homeworker” as defined by s 5 of the ERA, and therefore an employee of the MOH, when she cared for her son?
(b)Was the Employment Court wrong in finding that the “well-established test for what constitutes work” as set out in Idea Services Ltd v Dickson applies to Ms Fleming?[12]
[12]Idea Services Ltd v Dickson [2011] NZCA 14, [2011] 2 NZLR 522.
(c)Did the Employment Court err in finding that Ms Fleming had a personal grievance for discrimination?
Ms Fleming’s cross-appeal
(d)Did the Employment Court err in finding that the MOH was not permitted under a family care policy or expressly authorised under any enactment to pay Ms Fleming for work she did during the time of pt 4A of the PHDA?
(e)Did the Employment Court err in failing to consider the imposition of a penalty under s 134 of the ERA?
(f)What is the level of knowledge required to establish a breach of an employment agreement for the purposes of s 134 of the ERA?
Crown appeal against Humphreys
(g)Did the Employment Court err in its assessment of the effect of pt 4A and s 88 of the PHDA on its ability to assess the employment relationship under the FFC scheme?
(h)Was Mr Humphreys a “homeworker” as defined by s 5 of the ERA, and therefore an employee of the MOH when he cared for his daughter during (i) the FFC period (April 2014 to August 2020) and (ii) the IF period (August 2020 onwards)?
(i)Was the Employment Court wrong in finding (if it did) that the Court of Appeal’s approach in Idea Services applies to an assessment of hours worked by Mr Humphreys as a homeworker for (i) the FFC period and/or (ii) the IF period.
The statutory and policy context of funding family carers
The New Zealand Public Health and Disability Act 2000
The relevant history and statutory basis for funding disability support services begins with the PHDA. The PHDA pre-dated New Zealand’s 2007 ratification of the Convention on the Rights of Persons with Disabilities (the Convention) and the recognition of it in New Zealand domestic law.[13] Subsequent consideration of disability support services and the way they are funded have, properly, been viewed in the context of the obligations assumed under the Convention.[14]
[13]Disability (United Nations Convention on the Rights of Persons with Disabilities) Act 2008; and Convention on the Rights of Persons with Disabilities 2515 UNTS 3 (opened for signature 30 March 2007, entered into force 3 May 2008).
[14]See Ministry of Health v Atkinson, above n 1, at [42]; and Chamberlain v Minister of Health, above n 1, at [31]–[33].
The primary purpose of the PHDA was to “provide for the public funding and provision of … disability support services” in order to pursue stated objectives.[15] These objectives included achieving “the promotion of the inclusion and participation in society and independence of people with disabilities”[16] and “the best care or support for those in need of services”.[17] However, these objectives were to be pursued “to the extent that they [were] reasonably achievable within the funding provided”.[18]
The Service Specifications
[15]Section 3(1).
[16]Section 3(1)(a)(ii).
[17]Section 3(1)(a)(iii).
[18]Section 3(2).
The precise basis for funding home care was, and still is, policies contained in Service Specifications. The Disability Support Services Tier Two Service Specification for Home and Community Support Services (HCSS) identifies the types of services that will be funded. Relevantly, these include:
6.6.1 Household Management
Services which assist a Person with a disability to maintain, organise and control their household/home environment, enabling them to continue living within their own environment.
6.6.2 Personal Care
Assistance with activities of daily living that enables a Person with a disability to maintain their functional ability at an optimal level.
6.6.3 Sleepover Care or Night Support
A Service where the Support Worker or Other Staff Member is required to sleep at the home of the Person in order to provide intermittent care throughout the night.
The Needs Assessment Service Co-ordination (NASC) Services Specification provides for NASC organisations to undertake needs assessments and coordinate the funding and organisation of support services. Needs assessments identify the person’s circumstances, goals and daily needs, including needs for which there are already “natural supports” (which usually refers to help provided by family members or friends). The next stage is service coordination, during which the NASC organisation reviews the needs assessment and determines how many hours are required to meet a person’s unmet needs, based on a MOH provided template. The options for how these hours can be funded and delivered are also discussed. NASC organisations are independent of the MOH but operate under MOH policies and delegated statutory authority and are agents of the MOH.
Before 2013 it was the Crown’s policy not to fund the care of disabled adults by family members. It was considered that families could be expected to provide the necessary care at no cost to the State. Care for disabled adults was only funded if the care was provided by an external caregiver. Therefore, funding for the services described in the service specifications was not available where the carer was a family member. In Atkinson, this Court held that this policy discriminated against family carers on the basis of family status in breach of the New Zealand Bill of Rights Act 1990 (BORA) because it treated unrelated caregivers who provided disability support services to the MOH more favourably than family carers who were prepared to do the same work.[19]
Funded Family Care
[19]Ministry of Health v Atkinson, above n 1. Most, but not all, of the plaintiffs in the Atkinson litigation (including Mr Humphreys), were the parents of adult children with significant intellectual disabilities.
The Crown responded to Atkinson by introducing pt 4A of the PHDA, which was passed under urgency on 17 May 2013.[20] Part 4A would permit funding for disability support to be provided for family carers of disabled people but its stated purpose was to keep the funding of support services provided by family carers within sustainable limits in order to give effect to the restraint imposed by s 3(2) and to affirm the principle that, in the context of the funding of support services, families generally have primary responsibility for the wellbeing of their family members.[21]
[20]The New Zealand Public Health and Disability Amendment Act 2013 was passed on the sitting day 16 March 2013, with the debate continuing on the calendar day 17 March 2013, and, as this Court noted in Chamberlain v Minister of Health, above n 1, at [40], without public consultation or select committee scrutiny.
[21]New Zealand Public Health and Disability Act 2000 [PHDA], s 70A(1).
The means of keeping the funding of family carers within sustainable limits was to prohibit funding for a family carer other than pursuant to an applicable family care policy or as expressly authorised by an enactment.[22] The FFC scheme was the family care policy adopted. It was implemented by way of a notice of terms and conditions for funding given pursuant to s 88 of the PHDA (the s 88 Notice), which incorporated by reference the Funded Family Care Operational Policy (the Operational Policy).[23]
[22]Section 70C.
[23]“Funded Family Care Notice 2013” (26 September 2013) 131 New Zealand Gazette 3639 at 3670–3677.
During oral argument Mr Cranney, for Mr Humphreys, suggested that the s 88 Notice was merely policy and did not have legislative status. We do not accept that proposition. The s 88 Notice was subordinate or delegated legislation, that is, legislation made by a body or person under powers conferred by an Act of Parliament. Despite its form as a notice of terms or policy, it is clearly legislative in effect, altering the rights or obligations of a class of people.
The s 88 Notice included conditions that the Crown says had the effect of creating an artificial employment relationship between the disabled person as employer and the family carer as employee. A “host” provider would become involved to assist with setting up the necessary arrangements.[24] The disabled person was required to sign an employment agreement and assume all the obligations of an employer.[25] The funding was at minimum wage and capped at 40 hours per week.[26] Funds were paid directly into the bank account of the disabled person, to be paid onto the family carer.[27] The requirement that the disabled person employ their family carer was a contentious issue for many families of intellectually disabled people with high or very high needs. It was a major focus of Ms Fleming’s and Mr Humphreys’ cases.
[24]Clause 23(g).
[25]Clause 20.
[26]Clause 20(c), n 22.
[27]Clauses 20(i) and 34.
The amount of funding provided was determined by reference to the existing HCSS specifications, including the needs assessment process. The approach taken to needs assessments under FFC was also contentious because many families of disabled people considered that it resulted in grossly inadequate recognition of the amount of time needed to care for a disabled person with high or very high needs, especially in relation to intermittent care needed during both day and night. In Chamberlain this Court held that the policy of treating intermittent care as supervision (which was not funded at all) was incorrect — instead, such care should be remunerated and doing so would require only a modest adjustment to the existing service co-ordination and funding arrangement.[28]
[28]Chamberlain v Minister of Health, above n 1, at [72] and [83].
The FFC scheme was disestablished in 2020 and pt 4A repealed.[29]
Individualised funding
[29]New Zealand Public Health and Disability Amendment Act 2020, s 4; and “Funded Family Care (Revocation) Amendment Notice 2020” (31 July 2020) New Zealand Gazette No 2020-go3371.
After the disestablishment of FFC, family carers could either be employed by an HCSS provider or a disabled person could elect to manage their own funding under IF. IF was an existing scheme for funding disability support. It provided an annual budget which the disabled person could use to purchase support services. The number of hours of care, the rate paid[30] and the identity of the carer engaged were all matters for the disabled person to decide. The scheme was not, however, available to fund family carers who lived with the disabled person until the disestablishment of FFC, when the IF scheme was amended to permit care to be provided by resident family members.
[30]Subject to the relevant rates in the Minimum Wage Act 1983 and later the Care and Support Workers (Pay Equity) Settlement Act 2017.
The basis for funding under IF is the policy set out in the IF Service Specification, and the associated IF Operational Policy. The amount of funding under IF is determined through the needs assessment and service coordination process but disabled people who were already receiving FFC funding were not required to be reassessed. The disabled person is encouraged to have an agent to manage the care services being purchased with IF funding. The funding structure and assistance with managing the allocation of funds is provided by the Host provider. Typically, a person funded under IF submits time sheets or invoices from the carers to the Host provider, who either pays the carer directly or reimburses the disabled person and then invoices the MOH which, in turn, reimburses the Host provider.
CROWN APPEAL AGAINST FLEMING
Ms Fleming’s and Mr Coote’s circumstances
Mr Coote was born in 1981 with physical disabilities as a result of Williams Syndrome, though this diagnosis was not made until he was 18. The condition causes, among other things, hyperactivity, heart conditions, reflux and feeding issues, hearing impairment, headaches, a lack of elastin in the body, cluster seizures, anxiety, compulsive behaviours, gregarious and disinhibited behaviours, impaired motor skills, attention deficits and sensory aversions. Mr Coote also has Coeliac Disease.
Mr Coote has a moderate intellectual disability. He had some schooling, leaving school at 21 and completing a Certificate in Life Skills and a Certificate in Community Skills at Unitec. Nevertheless, Mr Coote cannot be left alone and requires constant supervision and round-the-clock care. He has frequent headaches, poor hearing, and visual processing issues which affects him on stairs and uneven surfaces. The symptom which has the greatest impact on his life is the lack of elastin in his body. Mr Coote’s connective tissues have progressively lost a range of movement since puberty. He can no longer properly brush his teeth or hair and his capacity to write has been greatly affected.
While Mr Coote was under 18, Ms Fleming received a Domestic Purposes Benefit. When Mr Coote turned 18 in 1999, he began receiving the Invalids Benefit and Ms Fleming (after some difficulty) received a separate benefit to enable her to remain at home to care for Mr Coote. This was the Domestic Purposes Benefit – Care of the Sick or Infirm, now called the Supported Living Payment for caring for another person (SLP).
Ms Fleming gave evidence in the Employment Court that her NASC organisation did not advise her about FFC and she only became aware of it in 2018. She sought a needs assessment to secure funding under FFC but was discouraged by the limited hours offered. She considered (incorrectly) that she would be worse off financially under FFC. Nor could she understand the basis on which Mr Coote would (or could) be her employer. Ms Fleming therefore elected to continue receiving the SLP.
In 2018 Ms Fleming applied for, and was granted, funding for respite care under the IF Respite scheme. Otherwise, she remained on the SLP. Since 2021, Mr Coote’s care has been funded under the IF scheme, without prejudice to the current appeal.
The Employment Court decision
The Judge summarised Ms Fleming’s case as follows:[31]
[23] I understood Ms Fleming’s case to boil down to the following. Regardless of whether an application for funding had been advanced under either Funded Family Care or Individualised Funding, the reality was that she was an employee of the Ministry of Health; she had been working providing care for [Mr Coote] for an extended period of time; the Crown was aware that she had been doing that work; the work was for the Crown’s benefit; and she was entitled to be remunerated for it. It was further said that the Crown’s actions were such that penalties ought to be imposed against it; and damages and compensation awarded, together with lost wages and benefits. In addition, a range of declarations are sought against both the Minister of Health and the Minister for Disability Issues. A particular focus of complaint was the Crown’s alleged failure to substantively respond to the Court of Appeal’s criticisms of its approach in Chamberlain v Minister of Health.
[31]Fleming¸ above n 9.
This summary belies the complexity of the pleading (the third amended statement of claim), which made wide ranging assertions regarding the FFC, particularly the purported imposition of an employment relationship on a disabled person and their family carer and the continued narrow approach to assessing the time allowed for funded personal care and household management.[32] Most of the declarations Ms Fleming sought were answers to hypothetical questions relating to funding schemes (principally FFC), which Ms Fleming had never been funded under. For example, the agreed issues recorded by the Judge included the following:[33]
[32]We infer that the complexity of the pleading likely reflects the fact that, initially the proceeding was brought by a disability advocate, Ms Carrigan, and sought to raise issues relating to disability funding generally including FFC and IF. Ms Fleming was subsequently joined as a party to the proceeding. Later still, Ms Carrigan was struck out of the proceeding and the matter went to trial with Ms Fleming as the sole plaintiff: Carrigan v Attorney-General [2020] NZEmpC 147.
[33]Fleming, above n 9, at [44(f)–(g)]. Although these questions were hypothetical vis-à-vis Ms Fleming, the parties nevertheless requested that Judge determine them.
If [Mr Coote] had received Funded Family Care:
(i)[W]ho would have been the employee?
(ii)[W]ho would have been the employer?
If [Mr Coote] had received Individualised Funding (other than Individualised Respite Funding) and used the personalised budget to fund [Ms] Fleming as his family carer:
(i)[W]ho would be the employee?
(ii)[W]ho would be the employer?
However, Ms Fleming also sought a declaration:
(vii) That the work Christine Fleming does in providing care and support for her son, Justin Coote … is work that the first and second defendants are responsible for funding:
(a) [b]ecause she is an employee of one or both of the defendants; …
The Judge held that from the time Mr Coote turned 18, the Crown was responsible for his care by virtue of the obligations assumed under the Convention on the Rights of Persons with Disabilities.[34] She held that Ms Fleming met the definition of a homeworker in s 5 of the ERA, specifically, that in the circumstances of the case — particularly the MOH’s knowledge that Ms Fleming was providing the care that it was responsible for providing — the MOH had engaged Ms Fleming to care for Mr Coote.[35] Ms Fleming was therefore entitled to a declaration that she was an employee of the MOH. Notwithstanding that conclusion, the Judge declined to make an order for the payment of wages and holiday pay arrears for the period pt 4A was in force, on the basis that it precluded any such recovery.[36]
[34]At [32]–[36], [66]–[67], [72] and [79].
[35]At [79]–[80] and [96].
[36]At [96].
The Judge found, however, that Ms Fleming had made out a personal grievance for discrimination, for which she was entitled to compensation.[37]
Question (a): Was Ms Fleming a “homeworker” as defined by s 5 of the ERA when she cared for Mr Coote?
[37]At [99].
The Crown says that, in reaching her conclusion that Ms Fleming was a homeworker for the purposes of s 5, the Judge:
(a)wrongly applied the broad approach mandated by s 6(2) of the ERA rather than the more restrictive approach in ss 5 and 6(1);
(b)misinterpreted Lowe v Director-General of Health;[38] and
(c)wrongly assumed that the State was under an obligation to care for adult disabled people.
Did the Judge err by applying s 6(2) when considering whether Ms Fleming was a homeworker?
[38]Lowe v Director-General of Health [2017] NZSC 115, [2018] 1 NZLR 691.
Section 6 of the ERA relevantly provides:
(1)In this Act, unless the context otherwise requires, employee—
(a) means any person of any age employed by an employer to do any work for hire or reward under a contract of service; and
(b) includes—
(i)a homeworker; or
…
(2)In deciding for the purposes of subsection (1)(a) whether a person is employed by another person under a contract of service, the court or the Authority (as the case may be) must determine the real nature of the relationship between them.
(3)For the purposes of subsection (2), the court or the Authority—
(a) must consider all relevant matters, including any matters that indicate the intention of the persons; and
(b) is not to treat as a determining matter any statement by the persons that describes the nature of their relationship.
“[H]omeworker” is defined in s 5 of the ERA in the following terms:
(a)means a person who is engaged, employed, or contracted by any other person (in the course of that other person’s trade or business) to do work for that other person in a dwellinghouse (not being work on that dwellinghouse or fixtures, fittings, or furniture in it); and
(b)includes a person who is in substance so engaged, employed, or contracted even though the form of the contract between the parties is technically that of vendor and purchaser
The Judge started her analysis of whether Ms Fleming was an employee by reference to s 6(2) and the requirement to determine the real nature of the relationship and to consider all relevant matters.[39] She referred to the fact that under s 6, the definition of employee included homeworker.[40] She summarised the rationale for the homeworker status (to ensure adequate protection for a group of vulnerable workers). The Judge then referred to art 19 of the Convention on the Rights of Persons with Disabilities (which places an obligation on the State to ensure the persons with disabilities have access to a range of in-home residential and community support services) as being “relevant in terms of the interpretative exercise”.[41]
[39]Fleming, above n 9, at [60].
[40]At [61]–[64].
[41]At [66], referring to Convention on the Rights of Persons with Disabilities, above n 13, art 19.
Against that background the Judge identified the questions arising for determination, including whether Ms Fleming was “engaged” by the MOH for the purposes of s 5.[42] In considering those questions, she focussed on the effect of the Supreme Court’s decision in Lowe[43] and then commented that:[44]
The issue for the Court is to separate the wood from the trees, have regard to all of the circumstances and determine the real (rather than described) nature of the relationship.
[42]At [68].
[43]At [70]–[74], discussing Lowe v Director-General of Health, above n 38.
[44]At [75] (footnote omitted).
Ms McKechnie submitted that this comment indicated that the Judge had taken the wrong approach because the considerations identified in s 6(2) and (3) for determining whether a person is employed pursuant to a contract of service, are not relevant in determining whether a person is an employee by virtue of being a homeworker under s 6(1)(b)(i). She said that the Judge blurred the respective provisions and, consequently, took into account general circumstances that were not relevant to the definition in s 5.
Mr Hancock, for the Human Rights Commission, and Mr Cranney, for Mr Humphreys, raised arguments in support of the Judge’s application of s 6(2) and (3) to the homeworker issue. Mr Hancock argued that the underlying protective purpose of the ERA should be taken into account in interpreting s 5. He also submitted that there was no “carve out” within s 6, and the inclusion of homeworker within the definition of employee means s 6(1)(b) should be read as a subset of the general definition of employee in s 6(1)(a). We accept that the underlying protective purpose is relevant to the interpretation, but do not consider that it is tenable to treat s 6(1)(b) as a subset of s 6(1)(a).
Mr Cranney argued that the real nature of the relationship approach was the common law position prior to the enactment of the ERA and that s 6(2) and (3) only confirmed the application of the common law approach to s 6(1)(a). The common law approach should therefore still apply to questions outside of s 6(1)(a) such as determining whether a person is a homeworker. That argument does not explain the Judge’s approach because she clearly and repeatedly referenced s 6(2) and (3) rather than the common law approach.
Section 6(2) and (3) apply where the Employment Court is considering whether a person is employed under a contract of service. They require the Judge to take all the relevant circumstances into account to determine the real nature of the relationship. In comparison, where the Court is considering whether a person is a homeworker, the enquiry is much narrower, requiring the Court only to consider whether the definition in s 5 is satisfied.
We agree that the Judge’s analysis demonstrates the approach required for the enquiry under s 6(1)(a). While we accept the point made by Mr Hancock, that s 5 is to be construed in a way that reflects the underlying protective purpose of the ERA, we do not accept that doing so required the Judge to apply an approach that is contrary to the plain text of s 6.
Did the Judge misinterpret Lowe v Director-General of Health?
In Lowe, the Supreme Court considered the question of what was required for engagement under s 5.[45] The Judge applied the decision, as she understood it. The Crown submitted that the Judge’s interpretation was incorrect. The same issue arises in Mr Humphreys’ appeal and, for convenience, we also address the arguments made by Mr Cranney, for Mr Humphreys, on this point.
The Supreme Court decision in Lowe
[45]Lowe v Director General of Health, above n 38, at [9].
Lowe concerned the employment status of an external relief carer who received payment from the MOH or relevant DHB for respite care to relieve unpaid, full-time carers of disabled persons.[46] The respite care was provided pursuant to a scheme known as the Carer Support scheme. Ms Lowe was paid after she had provided the services and on the basis of forms she completed and submitted to the primary carers. Sometimes Ms Lowe was paid directly by the DHB and sometimes by the full-time carers, who were reimbursed.
[46]At [9].
Ms Lowe claimed that she was a homeworker for the purposes of s 5 of the ERA. Her argument was that the combined effect of the various aspects of the scheme (specifically, the needs assessment, the arrangements for funding of the relief carer, the obtaining of a carer, and the Carer Support Guidelines) amounted to engagement for the purposes of s 5.[47] The Employment Relations Authority found that Ms Lowe was not a homeworker.[48] The Employment Court held that she was.[49] This Court held that she was not.[50] The Supreme Court upheld this Court’s decision.[51]
[47]At [61].
[48]Lowe v Director-General of Health, Ministry of Health [2014] NZERA Wellington 24.
[49]Lowe v Director-General of Health, Ministry of Health [2015] NZEmpC 24, (2015) 10 NZELC 79-050.
[50]Director-General of Health v Lowe [2016] NZCA 369, [2016] 3 NZLR 799.
[51]Lowe v Director-General of Health, above n 38.
The majority in the Supreme Court — Arnold, O’Regan and William Young JJ — was divided in its reasoning as to why Ms Lowe was not a homeworker. Arnold and O’Regan JJ held that she was not a homeworker because the MOH had not engaged her — the primary carers had done so.[52] William Young J held there was a contractual relationship between the MOH and Ms Lowe when it had paid her directly but because the MOH’s “trade or business” was to subsidise the cost to the primary carer of engaging a relief carer, not to actually provide relief care directly, she had not been engaged by the MOH in the course of its trade or business.[53]
[52]At [71].
[53]At [81] and [85].
Mr Cranney, for Mr Humphreys, invited this Court to reconsider the meaning of “engage” in s 5 on the basis that the differing reasons of the majority meant that there was no identifiable ratio and that Lowe is therefore not binding on us. The precedential effect of an appellate judgment in which the majority is divided as to the reasons for the decision appears not to have been considered in New Zealand.[54] However, we consider that the reasoning of the majority discloses a sufficiently clear and common approach so as to produce a ratio.
[54]The issue has, however, been considered in Australia: see Jones v Bartlett [2000] HCA 56, (2000) 205 CLR 166 at 62–64, citing In re Harper v National Coal Board [1974] QB 614 at 621; and Dickenson’s Arcade Pty Ltd v Tasmania (1974) 130 CLR 177 at 188.
O’Regan J, writing for himself and Arnold J, began by considering the meaning of “engaged” in other parts of the ERA, noting that “[t]he term ‘engaged’ is used in various forms in other provisions in the ERA, in a way which illustrates that it does take its meaning from its context”, though neither of the instances identified assisted in interpreting s 5.[55] The Judge then considered the use of “engaged” in other contexts and observed “that ‘engaged’ is a flexible, ambiguous word, the meaning of which is substantially affected by context”.[56] Later, rejecting an argument as to the construction of s 5(a), O’Regan J commented that “[a]s will become apparent, we see the term ‘engage’ as being a flexible term”.[57]
[55]Lowe v Director-General of Health, above n 38, at [35].
[56]At [36].
[57]At [39].
Turning to consider what “engaged” meant in s 5(a), the Judge noted this Court’s conclusion that “engagement involved an active role in selection and oversight or control of the work of the individual whose status is at issue”.[58] The conclusion regarding oversight and control was held not to be correct. On the issue of selection O’Regan J said:[59]
… we agree with the Court of Appeal that the normal meaning of “engage” contemplates the hirer making the selection of the person engaged. In the present context the Carer Support scheme contemplates that the relief carer will be engaged by the primary carer, without any reference to the Ministry or the DHB. As the Court of Appeal noted, neither the Ministry nor the DHB will even be aware the relief carer has been engaged until a claim is made for payment.
[58]At [40], citing Director-General of Health v Lowe, above n 50, at [24].
[59]Lowe v Director‑General of Health, above n 38, at [44] (footnote omitted).
In the overall evaluation of Ms Lowe’s argument that the circumstances in which she came to provide the relief care amounted to engagement, O’Regan J concluded:
[63] The difficulty with that argument, as we see it, is that the concept of engagement (particularly when read in the context of the phrase “engaged employed or contracted”) requires that an event occurs which creates a relationship between the hirer and the engaged person. We see that as lacking in the present case. We do not consider it possible to extend the ambit of the concept of engagement to the extent that it applies in circumstances where the person said to be the hirer is not even aware of an engagement having taken place until after the initial period of care has concluded.
…
[65] The key aspect of engagement, being the selection of the person who is to be engaged, is clearly undertaken by the primary carer and the work that is undertaken by the relief carer is undertaken for the primary carer without reference to the Ministry or the DHB.
William Young J explained the reasons he considered a contract existed between the MOH and Ms Lowe:[60]
[81] The Carer Support Scheme operates on the basis that: (a) a primary carer who has already paid the respite carer will be reimbursed to the amount of the subsidy the Ministry is prepared to pay; and otherwise (b) the Ministry will pay the respite carer directly. As I construe the relevant material, the Ministry is offering to pay prospective respite carers providing: they (a) do the work; (b) fill in the forms; and (c) have not been paid by the primary carer. This offer is accepted by the provision of work and the filling in of the forms. It follows that I accept that there is a contractual relationship between the Ministry and the respite carers, at least where the Ministry pays them directly.
[60]Footnotes omitted. The Judge characterised the contract as a unilateral contract, citing, by way of example, Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256 (CA).
For completeness, and comparison, we note the approach taken by the minority, Elias CJ and Glazebrook J. They said that the overall circumstances in which Ms Lowe provided the relief care had resulted in her being engaged by the MOH or DHB. Glazebrook J, giving the reasons for the minority, said:[61]
The term engaged can be one of wide import. Remembering the policy behind the definition being to protect vulnerable workers, a wide reading of the term is justified so that employers cannot avoid the homeworker definition through technicalities. … The circumstances described above would therefore in our view suffice to constitute engagement.
…
In any event, it seems to us that the phrase “engaged, employed or contracted” is a composite one designed to cover all means of getting a person to do work for an employer and to ensure that regard is to substance as against technicalities.
The Employment Court’s interpretation of Lowe
[61]Lowe v Director‑General of Health, above n 38, at [144] and [146] (footnotes omitted).
The Judge interpreted O’Regan J’s reasons as indicating that the question of engagement was fact-specific, and informed by context:[62]
[70] The majority of the Supreme Court found “engaged” to be a flexible and ambiguous word. They made it clear that active oversight or control was not a prerequisite, otherwise any homeworker would also very likely be an employee under the narrower ordinary s 6 definition.
…
[73] Relevantly, the majority in Lowe v Director-General of Health made it clear that whether or not a worker has been “engaged” for the purposes of the s 5 definition will be fact specific, requiring an event to have occurred where a relationship is created between the hirer and the engaged person. …
…
[74] … I do not read the majority’s judgment as requiring any particular formality in terms of process or as suggesting the hirer needs to play an active, as opposed to passive, role. Rather the focus is on awareness. Nor do I read the majority judgment as requiring the hirer to be aware of the legal impact of engagement, in terms of the nature of the relationship formed. The existence of an employment relationship is objectively assessed; it can exist despite one or both parties being subjectively unaware of their status as employer or employee. In other words the Ministry did not need to actually know that it was formally engaging Ms Fleming as a homeworker for the purposes of the Employment Relations Act for that to be the reality of the situation.
[62]Fleming, above n 9 (footnotes omitted). In Humphreys, above n 9, the Judge substantially repeated this analysis at [72]–[77].
Ms McKechnie submitted that O’Regan J’s description of “engage” as being a flexible, ambiguous word that takes its meaning from its context was simply a general description that reflected the various contexts in which the word was used outside the ERA and the Judge had misstated the effect of the majority’s approach. Ms McKechnie argued that the Judge should have applied O’Regan J’s later, explicit, statements that, for the purposes of s 5, the “normal meaning of ‘engage’ contemplates the hirer making the selection of the person engaged”[63] and that engagement required an event “which creates a relationship between the hirer and the engaged person”.[64] It was therefore an error to conclude that a carer could be engaged if they had not actually been selected and that merely being aware that care is being provided is sufficient to create engagement.
[63]Lowe v Director-General of Health, above n 38, at [44].
[64]At [63].
In our view the statements by Arnold and O’Regan JJ, and by William Young J, all disclose an approach to the meaning of engage in s 5 that is properly described as contextual. O’Regan J’s description of “engage” as a flexible word did not rest solely on consideration of contexts other than the ERA but, as we have noted, at least two examples of its use within the ERA. And it must be correct to say that it is a word that, in a general sense, is used flexibly. Further, although O’Regan J agreed with this Court’s approach in a general sense, his description of it was couched in more nuanced terms — referring to the “normal meaning” of “engage” and then immediately referring to the context in which the question of engagement has arisen.[65]
[65]At [44].
While this Court determined the question of engagement on the basis of “the person doing the engaging tak[ing] an active role in … the selection”,[66] O’Regan and Arnold JJ recognised that engagement could occur in a less direct way — when “an event occurs which creates a relationship”.[67] Framing the enquiry in this way clearly invites consideration of all the circumstances said to have resulted in engagement to determine whether such an event occurred. We accept Mr Cranney’s submission that O’Regan J’s next comments indicate that a broader, contextual, approach was being taken (albeit that the facts were not regarded as sufficient to have resulted in engagement).
[66]Director-General of Health v Lowe, above n 50, at [24].
[67]Lowe v Director-General of Health, above n 38, at [63].
It is clear, too, that William Young J took a contextual approach in reaching his conclusion that a contractual relationship existed, taking into account the scheme operated and by construing “the relevant material”.[68]
[68]At [81].
In our view, the effect of the majority judgment is to recognise that “engage” in s 5 is flexible in the sense that it does not have a fixed meaning in every circumstance and must respond to the factual context in which the question whether engagement has occurred arises. To that extent, we do not see any error in the Judge’s interpretation of Lowe.
However, it is clear that there must be some event (or, we would add, series of events) by which the change in a person’s status from not being engaged to being engaged can be identified. That is explicit in the judgment of Arnold and O’Regan JJ. We also consider it is evident from the judgment of William Young J; on his analysis the (unilateral) contract arose when, in the context of the offer by the MOH to pay for respite care, a carer who had provided the services completed the forms and did not receive payment from the primary carer. Even if we were to approach the question afresh, without reference to Lowe, we would conclude that this is the correct construction of s 5.
The Judge did identify the need for an event that constitutes engagement:[69]
[73] Relevantly, the majority in Lowe v Director-General of Health made it clear that whether or not a worker has been “engaged” for the purposes of the s 5 definition will be fact specific, requiring an event to have occurred where a relationship is created between the hirer and the engaged person.
[69]Fleming, above n 9.
However, as we come to next, we consider that the Judge erred in applying Lowe to the present case.
The application of Lowe to the present case
In order to find that Ms Fleming was a homeworker, the Judge had to identify the event or series of events that resulted in an identifiable change in Ms Fleming’s status from not being engaged by the MOH to being engaged. She began by identifying the context from which a conclusion could be drawn:[70]
The relevant context is that Ms Fleming’s selection as [Mr Coote’s] permanent carer arose from a confluence of circumstance. She had been his primary carer since he was born. From the time he became an adult, his health, well‑being and ability to participate in the community became (from a legal perspective) the responsibility of the State. He did not go into fulltime residential care because Ms Fleming continued to provide permanent care for him at home.
[70]At [72] (footnote omitted).
The Judge accepted that Ms Fleming had not been selected in the sense discussed in Lowe, where an external carer had been “sourced” by the primary carer.[71] However, that did not mean that Ms Fleming was not engaged by the MOH “to do the work it was responsible for delivering in order to meet its obligations”.[72] The Judge cited O’Regan J’s statement that it was not possible to extend the concept of engagement so that it “applies in circumstances where the person said to be the hirer is not even aware of the engagement having taken place until after the initial period has been concluded”[73] and extrapolated as follows:[74]
I do not read the majority’s judgment as requiring any particular formality in terms of process or as suggesting that the hirer needs to play an active, as opposed to a passive, role. Rather the focus is on awareness. Nor do I read the majority judgment as requiring the hirer to be aware of the legal impact of engagement, in terms of the nature of the relationship formed. The existence of an employment relationship is objectively assessed; it can exist despite one or both parties being subjectively unaware of their status as employer or employee. In other words, the Ministry did not need to actually know that it was formally engaging Ms Fleming as a homeworker for the purposes of the Employment Relations Act for that to be the reality of the situation.
[71]Fleming, above n 9, at [72].
[72]At [72].
[73]At [73], citing Lowe v Director-General of Health, above n 38, at [63].
[74]Fleming, above n 9, at [74] (footnote omitted).
The Judge went on to distinguish Lowe from Ms Fleming’s case on the basis that the MOH was aware of Ms Fleming’s work as Mr Coote’s primary caregiver through the ongoing needs assessments, which began in 1997 and were conducted at reasonably regular intervals after that.[75] She noted the acknowledgment made by the MOH’s witness, Mr Wysocki, that after the age of 18 Mr Coote’s care was the State’s obligation and that the person providing that care was Ms Fleming.[76] The Judge concluded, on this evidence, that Ms Fleming had been engaged by the MOH:
[86] While Ms Fleming may not have really intended to be an employee of the Minister, I have concluded that she became one as a consequence of the homeworker definition, applied to the particular facts of this case. It will be apparent that I have concluded that Ms Fleming became a homeworker from at least the point in time that [Mr Coote] became an adult; the Ministry was aware that he needed care and that Ms Fleming was providing it to him.
[75]The Judge at [76] and n 38 noted that NASC assessments before the Court were dated 1997, 1998, 2002, 2004, 2005, 2010, 2013, 2017 and 2018.
[76]At [76]–[77].
The reasons for this conclusion can be summarised as: (1) from at least 1997, the MOH knew that Mr Coote required full-time care; (2) on the basis of needs assessments from 1997 onward the MOH knew that Ms Fleming was providing that care; and (3) the MOH was obliged to support Mr Coote to stay in the community and lead a full and active life after he turned 18.[77] Because the point becomes relevant later, in relation to the cross-appeal, we note that the Judge’s conclusion that Ms Fleming was engaged by the MOH did not go so far as to conclude that the engagement was affected pursuant to the FFC scheme. To the contrary, referring to the Crown’s argument that the Employment Court lacked the jurisdiction to enquire into Ms Fleming’s employment status, the Judge specifically noted that because Ms Fleming had not accepted funding under FFC, she was not subject to the s 88 Notice.[78]
[77]At [79].
[78]At [52].
The Crown says that the Judge wrongly reasoned that because lack of awareness precluded engagement in Lowe then awareness, without more, could be sufficient to create engagement.[79] In other words, the Judge treated the context as sufficient to satisfy the requirement for an event. We agree with the Crown’s analysis that awareness per se was not sufficient to create an engagement of Ms Fleming by the MOH.
[79]As we have already noted, the Judge’s conclusion rested in part on the MOH’s obligations to provide care for Mr Coote. We address this aspect later.
Although needs assessments were undertaken and the results of them imputed to the MOH, the mode of funding provided to meet those needs varied and was not always tied specifically to the work Ms Fleming undertook. For most of the relevant period when Ms Fleming was receiving the SLP, the funding was indirect, with the benefit provided to allow Ms Fleming to remain at home to care for Mr Coote in a general sense. There was no specific point at which it was possible to identify a change in Ms Fleming’s status from receiving funding indirectly to being engaged as a homeworker. As a result, awareness of Mr Coote’s needs and the fact that Ms Fleming was meeting those needs could not, in itself, amount to engagement for the purposes of s 5.
We acknowledge Mr Dale KC’s oral argument that the situation ought not be viewed as requiring a “triggering event” by which a prospective carer suddenly goes from stranger to employee because it was known all along that Ms Fleming had provided Mr Coote’s care in the past and was therefore likely to be the funded carer once he reached adulthood. However, as a matter of law, engagement for the purposes of the ERA requires some means of pinpointing the transition from not being engaged to being engaged. This is particularly so because there were alternative means by which the necessary care could be funded, either by Ms Fleming maintaining her existing benefit (which she did) or having external carers (which could be funded under other funding schemes such as IF).
For completeness, we also note a submission made by Mr Dale in the context of Ms Fleming’s cross-appeal that a contract of engagement between Ms Fleming and the MOH was formed when Ms Fleming offered to undertake responsibility for Mr Coote’s care and the Crown, by requiring her submission to the NASC process, accepted that offer.[80] We cannot accept that analysis. It is not consistent with the evidence given by both Ms Fleming and Ms Carrigan, a disability support advocate who assisted Ms Fleming to consider the FFC option. Ms Fleming requested the specific needs assessment for the purposes of applying for FFC funding and, as a result of the low hours offered, declined to accept that funding and elected to remain on her existing benefit. No agreement could result from these circumstances.
[80]This submission was contained in a memorandum filed on 9 March 2023 to supplement oral submissions made on the cross-appeal.
Finally, we accept Ms McKechnie’s submission that the Judge erred in relying on Cowan v Kidd, which concerned the status of a party who undertook work, including farming, labouring and truck driving, for a friend’s business.[81] The Employment Court in Cowan held that the friendship had evolved into an employment relationship. The indicia of an employment relationship included the fact that the work being done was the same as that being done by other employees, whom he worked alongside, and that he was subject to direction.[82] The case was decided under s 6(1)(a) of the ERA and the Court accepted that, on a strict contractual analysis, no contract would have been proved but that under s 6(1) its task was to look to the real nature of the relationship to determine whether a person is employed by another person under a contract of service.[83] Cowan is very different from the present case, where the question for the Employment Court was whether Ms Fleming had been engaged, not whether the real nature of the relationship was one of employment.
[81]Fleming, above n 9, at [74], n 36, citing Cowan v Kidd [2020] NZEmpC 110, [2020] ERNZ 319.
[82]Cowan v Kidd, above n 81, at [34]–[36].
[83]At [30]–[31].
In summary, the Judge did not misinterpret Lowe, but did err in applying it to the case before her. While the Judge correctly identified the requirement in the majority reasoning of Lowe for an event creating the employment relationship, she wrongly treated the context in which Mr Coote’s care was funded — specifically, the MOH’s awareness of his needs and the fact that she was providing the necessary care — as sufficient to amount to an engagement.
Did the Court err in finding that there is an obligation on the State to care for disabled people over the age of 18?
An important strand in the Judge’s reasoning that Ms Fleming was a homeworker was her conclusion that the Convention imposed on the State the obligation to care for Mr Coote after he reached adulthood.[84] This aspect of the decision engaged art 19, which requires the State to ensure that “[p]ersons with disabilities have access to a range of in-home, residential and other community support services, including personal assistance necessary to support living and inclusion in the community…”.[85] The Crown says that the Judge’s conclusion misstates the nature and extent of the obligations imposed by art 19.
Convention on the Rights of Persons with Disabilities
[84]Fleming, above n 9, at [66] and [79].
[85]Convention on the Rights of Persons with Disabilities, above n 13, art 19(b).
The purpose of the Convention, stated in art 1, is to “promote, protect and ensure the full and equal enjoyment of all human rights and fundamental freedoms by all persons with disabilities, and to promote respect for their inherent dignity”. Article 12 recognises and protects the right of people with disabilities to exercise their legal capacity. It requires the provision of safeguards to achieve this, the primary purpose of which is to ensure the respect of the person’s rights, will and preferences or, if they cannot be determined, the best interpretation of their will and preferences (as opposed to an objective best interests approach).[86]
[86]TUV v Chief of New Zealand Defence Force [2022] NZSC 69, [2022] 1 NZLR 78 at [98]–[99], citing Committee on the Rights of Persons with Disabilities General Comment No 1 (2014) Article 12: Equal recognition before the law UN Doc CRPD/C/GC/1 (19 May 2014) at [20].
Article 19 recognises the right of people with disabilities to live independently and be included in the community. It provides:
States Parties to the present Convention recognize the equal right of all persons with disabilities to live in the community, with choices equal to others, and shall take effective and appropriate measures to facilitate full enjoyment by persons with disabilities of this right and their full inclusion and participation in the community, including by ensuring that:
(a)Persons with disabilities have the opportunity to choose their place of residence and where and with whom they live on an equal basis with others and are not obliged to live in a particular living arrangement;
(b)Persons with disabilities have access to a range of in-home, residential and other community support services, including personal assistance necessary to support living and inclusion in the community, and to prevent isolation or segregation from the community;
(c)Community services and facilities for the general population are available on an equal basis to persons with disabilities and are responsive to their needs.
In 2017 the Committee on the Rights of Persons with Disabilities released its General comment No. 5 (2017) on living independently and being included in the community.[87] Addressing the rationale for art 19 and the steps required to fulfil the obligations of State parties to it, the Committee noted art 19’s roots in international human rights law, including in particular the interdependence of an individual’s personal development and the social aspect of being part of a community, recognised in art 29(1) of the Universal Declaration of Human Rights 1948.[88] It emphasised the strong focus on deinstitutionalisation,[89] pointing out that the institutionalisation of people with disabilities on cost grounds or where the disabled person (particularly those with intellectual disabilities) is considered to be unable to live independently are contrary to art 19.[90] Instead, State parties should empower family members to support their family members with disabilities to realise the latter’s right to live independently and be included in the community.[91]
[87]Committee on the Rights of Persons with Disabilities General Comment No 5 (2017) on living independently and being included in the community UN Doc CRPD/C/GC/5 (27 October 2017).
[88]At [9].
[89]At [16], [49] and [59].
[90]At [21].
[91]At [55].
In relation to the obligation to provide access to support services the Committee said:[92]
(i) Funding for personal assistance must be provided on the basis of personalized criteria and take into account human rights standards for decent employment. The funding is to be controlled by and allocated to the person with disability for the purpose of paying for any assistance required. It is based on an individual needs assessment and upon the individual life circumstances. Individualized services must not result in a reduced budget and/or higher personal payment;
(ii) The service must be controlled by the person with disability, meaning that he or she can either contract the service from a variety of providers or act as an employer.
The issue in the Employment Court
[92]At [16(d)].
The State’s obligations under art 19 were not advanced as a basis on which Ms Fleming ought to be held to be a homeworker.[93] Instead, the Convention obligations arose in the context of the jurisdictional question and MOH’s assertion that the employment model of FFC complied with art 12, which requires people with disabilities to be supported to make their own decisions (supported decision-making), rather than have decisions made for them (substituted decision-making).[94] The MOH had submitted that Mr Coote could assume the role of employer through supported decision-making,[95] which the Judge rejected:[96]
… the State is the primary duty bearer under the Convention. The Ministry of Health designs the policies, sets the funding limits and then requires the disabled person to agree to the funding mechanism before the funding is released. …
I agree with counsel for the Human Rights Commission that the delivery of services through an agency structure and imposed relationships should not be taken to obviate the State’s responsibilities to disabled persons, particularly those (like [Mr Coote]) who lack mental capacity.
I agree too with the submission advanced by the Human Rights Commission that the imposition of a one-size fits all approach via a compulsory employment relationship between the disabled person and their family carer will not always be compatible with the principles of the Convention. For some disabled persons, particularly those with high and complex needs, it may not align with their circumstances.
Employment relationships are important. They are not to be viewed as a convenient device to shift liabilities away from the key players or to paint a distorted picture of reality. That is why Parliament has conferred on this Court the exclusive jurisdiction to determine, on a case by case basis, whether a particular individual is an employee and (if so) of whom, and made it clear that the answer to that question emerges from a fact specific inquiry, rather than (for example) the way in which the relationship may have been characterised.
There are many severely disabled people who are perfectly capable of undertaking the role of employer. [Mr Coote] is plainly not one of them. He does not have capacity to understand or discharge the most basic obligations he would be required to shoulder as an employer, and as set out in the Gazette Notice.
[93] This was Ms McKechnie’s advice from the bar, made without objection from any other counsel.
[94]Fleming, above n 9, at [30].
[95]At [30].
[96]At [36]–[40] (footnote omitted).
It was not until later, when the Judge came to consider Ms Fleming’s employment status, that she turned her attention to art 19. She noted:[97]
[66] Also relevant in terms of the interpretative exercise are various articles of the Convention, including the right to live independently and be included in the community. In this regard, art 19 places an obligation on States to ensure that persons with disabilities have access to a range of in‑home residential and other community support services. Those obligations and the way in which they are to be met find statutory expression in the [PHDA], and the policies sitting under it.
[67] Further, I note that in Ministry of Health v Atkinson the Crown sought to rely on the existence of a social contract between parents and their severely disabled children. The Court of Appeal observed that:
… There is no support for the suggestion of a social contract to care for adult children who are disabled for the remainder of their lives on a full‑time basis, subject to respite care.
[97]Footnote and emphasis omitted.
Then, in deciding whether Ms Fleming was engaged for the purposes of s 5, and without any further consideration of art 19, she concluded that, from the time Mr Coote became an adult:[98]
… his health, well-being and ability to participate in the community became (from a legal perspective) the responsibility of the State. …
… it was known that he had to be cared for and that the State had that obligation.
…
The work that Ms Fleming did, and which the Ministry was aware of, allowed [Mr Coote] to remain in the community. That was and is of benefit to the Ministry and is consistent with meeting its obligations under both the [PHDA] and the Convention.
Appeal
[98]At [72] and [79] (footnote omitted).
The Crown said that the State’s obligations are not as described by the Judge because the obligation imposed by art 19 is simply to ensure access for in‑home residential support services (which it does through funding provided under the PHDA) and does not require it to ensure that such services are funded at any cost. In any event, the Convention was ratified in 2008, eight years after Mr Coote turned 18. Therefore, it does not provide any foundation for reasoning that Ms Fleming had been engaged prior to that date. Ms McKechnie also submitted that the Judge had misconstrued the statements in Atkinson about the Convention, on which she relied for her conclusion.
Mr Hancock, for the Human Rights Commission, carried this argument and supported the Judge’s conclusion regarding the effect of art 19. He submitted that the MOH’s interpretation of art 19 is unduly narrow. Noting the complex intertwining of employment law, human rights law and policy in relation to Ms Fleming’s status, Mr Hancock submitted that, on a holistic view of the Convention, the obligations on the State under art 19 are as the Judge expressed them. Moreover, those obligations build on human rights recognised by the Universal Declaration of Human Rights so that the obligations can be seen as pre-dating New Zealand’s ratification of the Convention.
We remind ourselves that the Judge’s task was to identify the meaning of “engaged” in s 5 and determine whether Ms Fleming’s circumstances satisfied the test for engagement. The former was a question of law, the latter a question of fact.
It is evident that the Judge understood — correctly — that the Convention was available to her as an interpretative aid only. Treaties such as the Convention are not directly enforceable in domestic law unless they are incorporated into New Zealand law.[99] While the Disability (United Nations Convention on the Rights of Persons with Disabilities) Act 2008 enabled ratification of the Convention by amending any provisions inconsistent with it, it did not amend the PHDA. Nevertheless, domestic legislation should be interpreted consistently with international obligations.[100] In relation to the Convention, Winkelmann CJ observed, in TUV v Chief of New Zealand Defence Force:[101]
… because these provisions directly affect the rights and interests of persons with disabilities, they fall to be interpreted against the backdrop of New Zealand’s obligations under the United Nations Convention on the Rights of Persons with Disabilities. It is well established that legislation should be read, so far as possible, consistently with New Zealand’s international obligations.
[99]Ortmann v United States of America [2020] NZSC 120, [2021] NZLR 475 at [75].
[100]At [96], n 111, citing New Zealand Air Line Pilots’ Assoc Inc v Attorney-General [1997] 3 NZLR 269 (CA) at 289; Ye v Minister of Immigration [2009] NZSC 76, [2010] 1 NZLR 104 at [24]; Zurich Australian Insurance Ltd v Cognition Education Ltd [2014] NZSC 188, [2015] 1 NZLR 383 at [40]; and Helu v Immigration and Protection Tribunal [2015] NZSC 28, [2016] 1 NZLR 298 at [143] and [207].
[101]TUV v Chief of New Zealand Defence Force, above n 86, at [92] (footnote omitted).
In this case, the scope for reliance on the Convention as an interpretative aid is limited. The only question of interpretation arising was the meaning of engagement under s 5. But the Judge did not treat the obligations imposed by the Convention as assisting in that interpretation; the meaning of engaged in s 5 had been addressed at length in Lowe, which the Judge accepted and applied. Instead, the Judge used the Convention as part of the relevant context to show that Ms Fleming had, as a matter of fact, been engaged by the MOH. In our view, this was a permissible use of the Convention. However, we differ from the Judge as to the effect of it.
First, we agree with the Crown that the Judge overstated the nature of the obligation in that under the Convention, a person with disabilities does not become the responsibility of the State. The focus of the Convention, especially arts 12 and 19 is on recognising and supporting the rights of people with disabilities to live independently and participate in the community. The means by which this is to be achieved are predominantly through legislation and policy initiatives by which the use of institutionalisation is replaced with adequate support services made available to the disabled person and their family. We agree with Mr Hancock that a holistic view of the Convention should be taken. We consider, however, that even on a holistic view, the State is required to provide support mechanisms that would allow a disabled person (supported by their family) to live independently, and in a manner of their choosing. This is not the same as imposing on the State direct responsibility for the care of a disabled adult.
Secondly, art 19 is not prescriptive in terms of how the support services should be delivered. Because there are several mechanisms available for that purpose, the fact of the State’s obligation to provide support services could not, in itself, indicate engagement by a family carer as a homeworker rather than funding through some other mechanism.
Finally, we agree that the Judge treated this Court’s rejection in Atkinson of a social contract requiring parents to care for adult disabled children as having a meaning beyond what was intended. The fact that parents cannot be required to continue caring for their adult children does not lead to the conclusion that parents who are willing to do so are more likely to be engaged by the MOH as a homeworker for the purposes of s 5, in comparison to being funded by some other mechanism.
Summary on question (a)
On the question of whether the Judge erred in finding that Ms Fleming was a homeworker as defined by s 5 of the ERA, we have concluded that the Judge:
(a)erred in applying the approach mandated by s 6(2) of the ERA;
(b)the Judge did not misinterpret Lowe but did err in the application of Lowe to the facts of this case; and
(c)erred in identifying the nature of the obligations owed by the State in relation to the care of disabled people.
We therefore conclude that Ms Fleming was not a “homeworker” as defined by s 5 of the ERA when caring for Mr Coote.
Question (b): Was the Employment Court wrong in finding that the “well‑established test for what constitutes work” as set out in Idea Services applied to Ms Fleming?
The issue in the Employment Court and on appeal
Ms Fleming had claimed for lost wages and holiday pay after the date on which pt 4A was revoked.[102] The Judge held that her entitlement to minimum wages should be determined by reference to the approach endorsed by this Court in Idea Services,[103] stating only that “[the] correct calculation of wages will appropriately reflect the hours of work performed by Ms Fleming, applying the well-established test for what constitutes work”,[104] and only referring to Idea Services by way of a footnote.[105]
[102]Subject to any other restrictions imposed by the Employment Relations Act 2000 such as the limitation period.
[103]Idea Services Ltd v Dickson, above n 12.
[104]Fleming, above n 9, at [98] (footnote omitted).
[105]At [98], n 48.
Later, in Humphreys, the Crown requested that the Judge address the question of what work Mr Humphreys would be entitled to be remunerated for and how that would be assessed, even though that issue did not actually arise in the case because Mr Humphreys had only sought a declaration. The Judge confirmed that Mr Humphreys’ entitlements would be determined on the basis of Idea Services and explained the reasons for that conclusion.[106] As a result, in answering question (b) in the Fleming appeal, we necessarily address the Judge’s (obiter) reasoning in Humphreys.
[106]Humphreys, above n 9, at [101]–[119].
In Humphreys, the Judge referred to the factors identified in Idea Services and a number of cases decided by reference to Idea Services involving a variety of factual situations. She said:[107]
[105] These judgments reflect two important things. First, a developing understanding of what constitutes work and the time during which employees are entitled to be remunerated. In this regard there has been a discernible move away from a perception that a worker is working only when they are doing something regarded by the employer as active and productive. Such a narrow conception of work was roundly rejected by the Court of Appeal in Idea Services Ltd v Dickson …
[106] Second, the case law reflects the fact that work and how work is done are rapidly evolving. Employment relationships and the circumstances in which work is undertaken have become progressively varied, as the Court of Appeal has observed by reference to the annual survey of employed people conducted by Statistics New Zealand.
[107] It is now well accepted that a worker’s time has a value and, where an employer wishes to have the benefit of that time, it comes at a cost.
[107]Footnotes omitted. Citing at [107] June Hardacre and Natalie Healy “What it means to ‘work’ — developments since Idea Services v Dickson [2017] ELB 45; and Richard L Alfred and Jessica M Shauer “Continuous Confusion: Defining the Workday in the Modern Economy” (2011) 26 ABA J Lab & Emp 363.
The Crown argued that the Idea Services approach does not adequately reflect the reality of the relationship between a disabled person and their family carer and the fact that the work was conducted in the carer’s residence, and that it would be difficult to properly estimate, or take steps to reduce, the amount of paid work Mr Humphreys did. The Judge rejected this argument but did not give reasons for doing so beyond dismissing the hypothetical example suggested by the Crown of a not-for-profit carer coming into the home.[108]
[108]Humphreys, above n 9, at [111].
The Judge also rejected the Crown’s argument that, as an employer, the Crown would have a limited ability to properly estimate, or reduce, the amount of “work” actually being done:[109]
The difficulty with this submission is that it disregards the fact that Parliament has specifically legislated for homeworkers (who perform their work in the home and whose activities, by definition, lack visibility) to come within an expanded definition of employee and thus entitled to all of the rights that come with that status, including to be remunerated for work performed. Nor did Parliament see fit to couple the expanded definition with a statutory test for how remuneration might be assessed.
[109]At [112].
The Judge considered that, in any event, the question of how much work was done by a family carer was fact-specific, requiring the kind of pragmatic assessment that the Employment Relations Authority and the Employment Court were well used to undertaking:[110]
… the objection appears to me to boil down to the sort of concern raised by the employer in Idea Services Ltd v Dickson, which failed to gain traction. Issues about the extent to which Mr Humphreys was and is constrained in terms of what he does will fall to be determined on the facts. … And while an appropriate assessment of lost wages might not be a particularly straightforward exercise, the reality is that such an assessment is often an inexact science, as the caselaw and various statutory provisions reflect. It may well be necessary for the Court to make the best assessment it can, being satisfied on the balance of probabilities that the conclusion as to loss is correct. A pragmatic view is sometimes required. Both the Employment Relations Authority and the Court are well used to this sort of task.
…
In summary, I do not see the fact that Mr Humphreys works in his home as justifying a departure from the test endorsed by the Court of Appeal. I perceive the test to have significant benefits in this specialist area of the law, particularly in terms of it being sufficiently flexible and fact-dependent to enable the Court to apply it in a range of cases and within the context of different employment relationships and as they evolve over time.
Mr Cranney, for Mr Humphreys, took the view that, in paying family carers where the disabled person lacked the capacity to fulfil the terms of the s 88 Notice, the Crown was in breach of s 70C (which prohibited a family carer being paid other than pursuant to the family care policy) but submitted that, since the Crown had the power under s 88(1)(b) to enforce the terms and conditions of a s 88 notice, it also, impliedly, was entitled to refrain from enforcing them. We do not accept that merely refraining from taking steps to regularise the position could overcome the prohibition in s 70C.
Mr Jeffries argued that cl 58 of the s 88 Notice, which provided for exceptions to be made to the terms and conditions of FFC in exceptional circumstances, could have permitted payment for the care of a disabled person who lacked capacity. Ms McKechnie responded to this argument by arguing that Ms Humphreys’ circumstances were not exceptional, citing the fact that of the 481 people who were funded under FFC, 316 had an intellectual disability. She submitted that cl 58 was intended to respond to emergency and exceptional situations and exceptionality was not to be viewed as a proxy for capacity.
It will be recalled that clause 58 provided that:[218]
This Notice does not apply to the delivery of funded family care in any circumstances which are an emergency or are exceptional.
[218]Footnote omitted.
We do not interpret the opening words of cl 58 — “[this] Notice does not apply” — as intended to have a literal effect. It is obvious that the purpose of cl 58 was to provide a means of managing emergencies or exceptional circumstances within the FFC scheme without adversely affecting the interests of the disabled person. The literal meaning of the opening words would be to eliminate the statutory basis for the scheme and make it illegal to fund family carers in an emergency or exceptional circumstances. That would be inconsistent with footnote 50 of the s 88 Notice which provides that the MOH “may continue making payment or stop payments” when those circumstances occur. Reading cl 58 consistently with the purpose of the scheme simply requires reading the opening words as meaning that the terms and conditions contained in the s 88 Notice would not apply in emergencies or exceptional circumstances.
We turn, then, to the meaning of “exceptional circumstances”. We start with the plain and ordinary meaning of the word. In Creedy v Commissioner of Police,[219] the Supreme Court accepted the following definition given by Lord Bingham of Cornhill in R v Kelly (Edward):[220]
We must construe “exceptional” as an ordinary, familiar English adjective, and not as a term of art. It describes a circumstance which is such as to form an exception, which is out of the ordinary course, or unusual, or special, or uncommon. To be exceptional a circumstance need not be unique, or unprecedented, or very rare; but it cannot be one that is regularly, or routinely, or normally encountered.
[219]Creedy v Commissioner of Police [2008] NZSC 31, [2008] 3 NZLR 7 at [32].
[220]R v Kelly (Edward) [2000] QB 198 (CA) at 208.
Clause 58 was worded disjunctively, responding to circumstances that were “an emergency or are exceptional”. It does not fall to be construed by reference to the ejusdem generis rule and we see no other basis on which to constrain the usual meaning of exceptional.
In considering whether Ms Humphreys’ circumstances are properly viewed as exceptional for the purposes of cl 58, we have regard to the following. In enacting pt 4A, Parliament was responding to the finding of this Court that its previous refusal to pay family members to care for adult disabled people was discriminatory. The effect of FFC was to meet the cost of such care for disabled people with high or very high needs. It was expected that 1,600 people would seek funding under FFC.[221] It was known that some of those who would be eligible for funding would have serious intellectual disabilities. There was, however, no intention to create a framework that discriminated against people with serious intellectual disabilities.[222] To the contrary, the s 88 Notice (as we have held) made provision for disabled people who had the capacity to employ a family carer and those who did not. It was expected that the latter would be represented by a welfare guardian or other legally authorised representative.
[221]Judy Paulin, Sue Carswell and Nicolette Edgar Evaluation of Funded Family Care (Artemis Research for the Ministry of Health, April 2015) at [1.1].
[222]Christopher Finlayson Report of the Attorney-General under the New Zealand Bill of Rights Act 1990 on the New Zealand Public Health and Disability Amendment Bill (No 2) (16 May 2013). Parliament was aware, from the Attorney-General’s report, at [18] that pt 4A was likely to result in an unjustified limitation of the right to judicial review under s 27(2) through the prohibition on future claims based on allegations of breach of the right to freedom from discrimination. It was also aware that the legislation could be potentially in breach of the right to freedom from discrimination under s 19(1), given it authorised policies that make distinctions on prohibited grounds of discrimination, whether or not those distinctions can be justified. No other form of discrimination arising from pt 4A was apprehended.
Ms Humphreys was part of that relatively small group of New Zealanders whose care it was intended the MOH would be permitted to fund through the FFC scheme. She was a disabled person with very high needs who wished to have a family carer. She had a family member willing and able to fulfil that role. The MOH was aware from previous needs assessments that being cared for by her family would be in Ms Humphreys’ best interests (and also the most fiscally desirable outcome, given that the alternative would have been full-time residential care). If funding was not made available under FFC, Ms Humphreys would not have the benefit of a family carer because FFC was the only means for funding family carers. But Ms Humphreys lacked both capacity and a welfare guardian and so could not have entered into the employment agreement ordinarily required by the s 88 Notice.
In our view, these circumstances were exceptional, and it was within the MOH’s power to allow Ms Humphreys’ family carer to be funded under FFC, even though Ms Humphreys did not satisfy the terms and conditions of the s 88 Notice that would otherwise apply. Since payment could have been made on a basis provided for by the s 88 Notice, it cannot be said that the MOH’s funding of Ms Humphreys’ care contravened s 70C.
We add, for completeness, that Ms Humphreys’ situation differed from that of Mr Coote because, although he also lacked both capacity and a welfare guardian, Ms Fleming had expressly declined funding under FFC. In comparison, there was purported acceptance by Ms Humphreys of the FFC terms and the MOH actually made payments under FFC.
Question (h): Was Mr Humphreys a homeworker as defined in s 5 of the ERA, and therefore an employee of the MOH, when he cared for Ms Humphreys?
The Employment Court decision
Mr Humphreys had pleaded that he was an employee of the MOH. The Judge considered at an early stage that Mr Humphreys was not an employee pursuant to a contract of service and dealt with the case on the basis that the question was whether Mr Humphreys was a homeworker as defined in s 5 of the ERA.[223] Then, as the Judge had done in Fleming, she referred to the task before her as being “to separate the wood from the trees, have regard to all of the circumstances and determine the real (rather than described) nature of the relationship”.[224]
[223]Humphreys, above n 9, at [65].
[224]At [78], citing Fleming, above n 9, at [75].
The Judge’s conclusion that Mr Humphreys was employed by the MOH largely reflected her reasoning in Fleming. The Judge held that the MOH knew that Ms Humphreys’ care needs were very high and that Mr Humphreys was providing the necessary care to an adequate standard and, having regard to the nature and extent of the MOH’s involvement in and knowledge of the care arrangements, it had “selected” Mr Humphreys.[225] She concluded that Mr Humphreys was therefore “engaged” for the purposes of s 5:[226]
[74] In this case, the evidence established that the Ministry knew that Mr Humphreys was applying to be paid to take care of his daughter in the family home. It knew that [Ms Humphreys] needed care and could not be left unsupervised, and it knew that, if that care was not being provided by her family, it would be responsible for providing it. The Ministry, because of its obligations to disabled persons, had an interest in knowing what [Ms Humphreys] needed and how her needs were being met; and it informed itself of these things via various mechanisms it had put in place. What Mr Humphreys was doing allowed [Ms Humphreys] to remain in the community. That was and is of benefit to the Ministry, and was and is consistent with meeting its obligations under both the Health and Disability Act and the Convention.
[225]Humphreys, above n 9, at [83].
[226](Footnote omitted).
The Judge acknowledged that the MOH did not know that Mr Humphreys might fall within the definition of a homeworker and that it did not intend to employ him but did not see either as a barrier to finding that he was engaged by the MOH as a homeworker and therefore employed by it.[227] Nor did the Judge consider it significant, although Mr Humphreys was usually Ms Humphreys’ carer, sometimes her mother, Ms Jimenez, was the carer.[228] This fact would only affect the amount calculation of wages owed.[229] The determining factor was that the MOH knew that Ms Humphreys required care and that Mr Humphreys was providing that care from at least April 2014 (though likely earlier).[230]
[227]At [76] and [77].
[228]At [79].
[229]At [80].
[230]At [81].
Although the Judge had not expressed her conclusions as specifically relating to the FFC period, she went on to make separate observations about the period during which Mr Humphreys was receiving funding under the IF scheme:
[82] I make one final point. Mr Wysocki gave evidence that one of the underlying purposes of Individualised Funding was to give the disabled person the opportunity to engage support workers independently; as such the Ministry will not necessarily have visibility of any employment or contractor relationships. It was submitted that the Ministry had deliberately designed the Individualised Funding model to ensure that the Ministry was “hands‑off” and there was flexibility as to who provided the services. The point is somewhat circular. The reduced hands-on involvement of the Ministry flowed from the way in which it constructed the model, namely through a number of intermediaries (in this case agents). The reduced involvement was then said to support an inference that no employment relationship existed between itself and Mr Humphreys. The same sort of analysis was advanced, and rejected, in Prasad v LSG Sky Chefs New Zealand Ltd…[231]
[231]Prasad v LSG Sky Chefs New Zealand Ltd [2017] NZEmpC 150, [2017] ERNZ 835 at 31; LSG Sky Chefs New Zealand Ltd v Prasad [2018] NZCA 256.
However, the Judge’s final conclusion did not differentiate between the FFC and IF periods:[232]
[83] I am satisfied that, in the particular factual context of this case and having regard to the nature and extent of the Ministry’s involvement in and knowledge of arrangements for [Ms Humphreys’] care, it “selected” Mr Humphreys, and he was “engaged” by it for the purposes of s 5.
Error in relation to the Family Funded Care period?
[232]Footnotes omitted.
If we accepted that the Employment Court had jurisdiction to consider Mr Humphreys’ employment status (which we do), Ms McKechnie’s argument in relation to the FFC period reflected the arguments advanced in relation to Ms Fleming (and which we largely accepted in relation to that appeal).
We agree that the Judge erred in applying the s 6(2) and (3) approach to the enquiry into whether Mr Humphreys was a homeworker, for the reasons discussed in relation to question (a).
We turn to the substantive issue — whether the Judge erred in finding that Mr Humphreys had been engaged by the MOH and was therefore a homeworker. It will be recalled that in Lowe, O’Regan J considered that engagement, particularly when read in the context of the phrase “engaged, employed or contracted” requires an event that creates a relationship between the hirer and the person who is engaged.[233] In the Fleming appeal, we concluded that Ms Fleming had not been engaged because it was not possible to identify any event, or series of events, that resulted in a relationship being formed between her and the MOH. Although a needs assessment was completed for the purposes of an application for FFC funding, the application was not advanced. Instead, Ms Fleming continued to receive a benefit from WINZ, which enabled her to remain at home and care for Mr Coote. No relationship with the MOH could have resulted in these circumstances.
[233]Lowe v Director-General of Health, above n 38, at [63].
In comparison, in Mr Humphreys’ case, there was a distinct process followed, which started with a needs assessment undertaken by the MOH’s agent for the purposes of assessing eligibility for FFC funding and concluded with the MOH’s agreement to fund Ms Humphreys’ care by Mr Humphreys.
Ms McKechnie submitted, however, that there was no event that could have resulted in Mr Humphreys being selected as a homeworker because: the Crown had merely approved a continuing arrangement; acceptance of FFC funding was a unilateral decision by the Humphreys/Jimenez household; the MOH’s knowledge of who was doing the caring was retrospective only; as a matter of fact, the caring was shared between Mr Humphreys and Ms Jimenez; and the MOH had neither knowledge of nor control over who did the work and therefore, the certainty required for a particular person to be engaged and to do specified work was absent.
We do not accept this submission. There was a distinct process to be followed before FFC funding could be provided. Eligibility of the disabled person and the proposed family carer had to be confirmed and this was the MOH’s responsibility.[234] The proposed family carer had to be approved and this, too, was the MOH’s responsibility.[235] As a result, once the MOH approved FFC funding for Ms Humphreys on the basis that Mr Humphreys would be her family carer and that offer was accepted, Mr Humphreys’ status changed from unpaid caregiver to family carer under FFC. Funding under the scheme was not the continuation of any existing legal arrangement, even if the de facto arrangements remained the same.
[234]“Funded Family Care Notice 2013”, above n 23, at cl 30(b).
[235]Clause 19(b), n 18 provided that “[t]he family carer must be physically capable, and have the necessary skills, qualifications and/or experience to provide the disability support services.” “Family carer” was defined in cl 72 as “the family member who is approved by the Ministry, and employed by the disabled person, to provide the funded family care”.
The real question is whether the change in Mr Humphreys’ status resulted in a relationship being formed with the MOH that brought him within the definition of a homeworker. Ms McKechnie argued that because Ms Jimenez sometimes cared for Ms Humphreys, and was at times funded to do so under FFC, there was no certainty as to who the family carer was and so no basis on which Mr Humphreys could have been engaged.
Ms McKechnie was not explicit as to the basis on which Ms Jimenez’s work was funded and we infer that Ms Jimenez provided replacement care, which was provided for under the s 88 Notice.[236] The disabled person’s responsibilities included “ensuring that all payments [were] paid to the family carer and made only to the family carer”[237] and “ensuring that payments are made for replacement care when the family carer is unable to provide funded family care”.[238] The responsibilities of the family carer were to provide funded family care of the required standard to the disabled person.[239] The person providing replacement care was, separately, responsible for providing funded family care to the disabled person.[240] The s 88 Notice did not include any requirement for the replacement carer to be approved by the MOH.
[236]Clauses 20(s) and 22.
[237]Clause 20(c). “Payments” were defined at n 22 as “[wages] (because payment is an hourly rate, can be up to 40 hours a week, and is based on the adult minimum wage)”.
[238]Clause 20(d).
[239]Clause 21(a). The standard of care was specified at n 30 as being that contained in NZS 8158:2012 Home and Community Support Sector Standard.
[240]Clause 22(a).
In both the Employment Court and this Court, the argument over whether Mr Humphreys was a homeworker focussed on the question of engagement and the effect of Lowe. However, we do not see the enquiry as necessarily so narrow in this case. A person may satisfy the definition of homeworker by being employed or contracted, as well as engaged, and there is obvious commonality between all three in that all require a contractual or quasi-contractual relationship. We do not see any need to consider how they might be differentiated. For present purposes, it is sufficient to say that each case would require a sufficient level of consensus and certainty as to the work to be done and the terms on which it would be done.
The terms of the s 88 Notice were clear that there was to be one identified family carer and the MOH (by its agents) had to satisfy itself as to their suitability. However, it is also plain that the FFC scheme contemplated that, while there would be an identified, approved family carer, the funding for that person’s work would extend to cover funding for a (possibly unidentified) replacement carer. Ms McKechnie described the funding as a “bucket” of money in the sense of a bulk funded situation and we accept that. But the fact that the replacement carer might not have been identified before they carried out the work does not preclude the approved family carer being engaged and does not raise any question of retrospectivity. We attach no significance to the fact that actual payment was made on invoices generated after each period of care had been provided — it is the agreement to pay that matters.
In our view, approving a family member to be the family carer and agreeing to provide funding for that person’s services, when it is known that an employment agreement between the family carer and the disabled person cannot be achieved, is capable of amounting to selection for the purposes of s 5 of the ERA. Allowing the approved family carer to use the funding for replacement care where necessary is not incompatible with the homeworker role, which inherently carries a degree of autonomy, constrained only by the requirements that the nature and standard of care provided are maintained. It may be more consistent with being an independent contractor, but that would not change the outcome, given the definition of homeworker in s 5 captures a person who is “engaged, employed or contracted”.
We acknowledge that engagement (or contracting) of the family carer as a homeworker by the MOH was not the intended outcome under the s 88 Notice. However, it was open to the MOH to decline the funding, either altogether or pending an order under the PPPRA being obtained. It did not do so. It went ahead and funded Ms Humphreys’ care by Mr Humphreys. We accept that it did so because it misunderstood or misinterpreted the s 88 Notice. Nevertheless, all the elements needed for engagement or contracting were satisfied.
Finally, we briefly address Ms McKechnie’s submission that Mr Humphreys may not have satisfied the requirements in the definition of homeworker that the work he was engaged (or contracted) to do was to be done in a dwellinghouse. This submission drew on the discussion in Lowe and Cashman v Central Regional Health Authority regarding whether it needs to be a term (express or implied) of the engagement, employment or contract that the work be done in a dwellinghouse, or whether it would suffice that the work was in fact done in a dwellinghouse.[241]
[241]Lowe v Director-General of Health, above n 38, at [72]–[74] and [169]–[172]; and Cashman v Central Regional Health Authority [1997] 1 NZLR 7 (CA) at 14.
Regardless of which approach is correct, we are satisfied that there is no merit in this submission because the s 88 Notice required, expressly or impliedly, that the work was to be carried out in a dwellinghouse and the work was carried out in a dwellinghouse. The funding was expressly tied to personal care, household management and sleepover care which is necessarily undertaken in a dwellinghouse. The s 88 Notice and Operational Policy made it clear that the work being funded was, for all practical purposes, to be done in a dwellinghouse.[242] The fact that Mr Humphreys sometimes takes Ms Humphreys out of the house or that the family has moved houses does not detract from this. We therefore conclude that the Judge did not err in finding that Mr Humphreys was a homeworker for the FFC period, albeit for different reasons.
Error in relation to the Individualised Funding period?
[242]See for example: “Funded Family Care Notice”, above n 23, at cls 12, 13, 17 and 28; and FFC Operational Policy, above n 200, at [3.1]–[3.3] and [4.1].
As noted earlier, funding for a family carer post-FFC was available either through direct employment by a HCSS or through IF. Ms McKechnie described IF as much more flexible than FFC because: while the funding could be spent on carers, it could also be spent on equipment, if that were more useful; there were no limits on who could provide the care (it could be family, friends or private contractors); and the rate could be higher than the minimum if that was thought necessary to obtain better quality care.
There are three aspects of the IF scheme that are relevant to Mr Humphreys’ assertion that he is, in reality, an employee of the MOH under it. These are (1) the issue of capacity, (2) the basis on which family carers can be funded to provide care and (3) the timing and extent of the MOH’s knowledge about who is providing care for the disabled person.
Under cl 3.2.3 of the IF Service Specification, one of the criteria for the availability of IF is that the disabled person has:
… had a discussion with the NASC to determine if Individualised Funding is a suitable option for them and confirmed that the Person will be responsible for all contracting and employment responsibilities associated with the purchase of the Support Services including the management of the quality of the care provided.
Under cl 4.2:
Individualised Funding offers the Person the ability to:
4.2.1 choose their Host Provider;[243]
4.2.2 choose their Support Provider and Support Service delivery plans;[244]
4.2.3 employ their own Support Provider;
4.2.4 manage the payment for services of the Support Providers;
4.2.5 purchase Support Services from more than one Support Provider; and
4.2.6 manage all aspects of service delivery.
[243]Ministry of Health Service Specification (Individualised Funding) (New Zealand Government, Wellington, July 2020) [IF Service Specification]. Host Provider is defined in the glossary as “[t]he Individualised Funding Host Provider contracted to the Ministry to provide Services under this Agreement to assist People to purchase and manage their support allocation.”
[244]Support Provider is defined in the glossary as “[t]he individual(s) or organisation(s) employed or contracted by the Person to provide Support Services.” Further, Support Worker is defined as “[a]n individual who is responsible for delivering the service on behalf of a Support Provider … ”; Support Allocation is defined as “[t]he amount and type of services allocated to a Person by a NASC Approved Assessor, which will govern the Support Services that are available to a Person and are to be incorporated into an ISP”; and Support Services are defined as “[t]hose services the Person chooses to obtain under their Support Allocation …”.
Significantly, however, the IF Service Specification also contemplates that management of the IF budget may be undertaken by someone on behalf of the disabled person. Clause 7.1 provides that:
If it is agreed that the Person wishes to manage their own supports, the NASC will discuss the option of Individualised Funding with them. If the Person wants to use Individualised Funding and is able to manage a budget and direct how Support Services will be provided (or have someone in the support network who can take on this responsibility), then a referral can be made for Individualised Funding.
In order to access IF the Host Provider must meet with the disabled person and their “nominated agent” and explain the options for services.[245] The Host Provider must, within three weeks of the date of referral, ensure the completion of an Individual Service Plan (ISP) for the disabled person.[246] The ISP must include, among other things, how the Support Allocation will be used, how the Support Allocation will be applied throughout the period for which it is allocated and the identity and contact details of the Support Providers including named Support Workers who will provide the Support Services. Before services can actually be provided the Host Provider has to ensure that “there is an executed agreement for Services between the Host Provider and the Person/nominated agent that incorporates all the terms necessary to ensure that the Host Provider can meet its obligations under this Agreement”.[247]
[245]Clause 8.1.1. “[N]ominated agent” is defined in the glossary as “[an] individual who is able to make decisions on behalf of the Person that relate to the management of the [Person’s] supports via Individualised Funding.”
[246]Clause 8.1.4.
[247]Clause 12.2.1.
At general law a person lacking capacity to contract is unable to validly appoint an agent because capacity to contract by means of an agent is co-extensive with the capacity of the principal alone to make the contract.[248] However, in this case the “nominated agent” contemplated by the IF Service Specification is not one that is necessarily appointed by a principal with capacity but instead one that is “able to make decisions on behalf of” the disabled person. One might compare the requirement under the s 88 Notice for a welfare guardian to be involved where the disabled person lacked capacity whereas the IF Service Specification permitted the Host Provider to agree to funding on the basis that a “nominated agent” would undertake the obligations of the disabled person on their behalf. In this case, Mr Humphreys is the nominated agent of his daughter and entitled to manage all aspects of the funding arrangements, notwithstanding that Ms Humphreys lacks the capacity to appoint him in the usual way. The Host Provider is also entitled to deal with Mr Humphreys on that basis.
[248]Peter Watts and FMB Reynolds Bowstead and Reynolds on agency (23rd ed, Sweet and Maxwell, London, 2024) at [2.006]; and GE Dal Pont Law of agency (4th ed, LexisNexis, Australia, Chatswood, 2020) at 3.2.
We turn to the question of whether Mr Humphreys was a homeworker, and therefore an employee, of the MOH. Mr Humphreys is Ms Humphreys’ agent but also her carer. Although he described himself as becoming his daughter’s employee after funding under IF began, he asserts that, because Ms Humphreys lacks the capacity to employ him, he is, in reality, the MOH’s employee.
We see Mr Humphreys’ position under IF as different from under FFC. Under FFC the only way a disabled person could have a family carer was by employing them. This limited route to family care funding led to the difficulties already discussed in relation to disabled people who lacked capacity. In the post‑FFC period, however, the MOH provided a route for a family carer to be employed by a HCSS provider. Where a disabled person lacked the capacity to employ a family carer, the family carer could still have the security and benefits of a genuine employment relationship by being employed by a HCSS provider. In comparison, the IF scheme was explicitly a “bulk‑funding” scheme. How the disabled person (or their nominated agent) chose to spend the funding was a matter for them. This was made clear in a letter from the MOH to FFC recipients (which Mr Humphreys received) dated 28 May 2020, which advised that:
FFC is being disestablished, and the support provided by your family can continue through one of two arrangements:
(a)Family members can be employed by a Home and Community Support Service (HCSS) to provide your care, or
(b)You or your agent can access Individualised Funding (IF) and engage family member(s) to provide support directly.
You (or your agent) can choose an arrangement that best suit[s] your circumstances:
1. The HCSS option means that all employment and training obligations are looked after by an HCSS provider. You get to select the HCSS provider. The employment of your family carer will however be at the discretion of the HCSS provider, and each provider has their own recruitment criteria.
2. The IF arrangement means that your household management and personal care needs are allocated as an annual budget. You get to select a Ministry funded IF Host to provide support around managing your budget, employment and contracting arrangements.
Mr Humphreys knew and understood that he could be employed by a HCSS provider. He chose not to be employed under that model because he was unhappy with the level of instruction the HCSS provider was prepared to give, and he expected that he would have to pursue a case against his employer in relation to the bathroom modifications and thought that was not fair on the HCSS provider. But when Mr Humphreys selected IF for his daughter, he also knew that Ms Humphreys could not be his employer because of her lack of capacity. And while there was no prohibition on a nominated agent also being a support carer, Mr Humphreys must have known that assuming both roles would leave him without an employer in any real sense.
It was implicit that under IF support carers would be engaged, employed or contracted by the disabled person and would therefore be homeworkers within the meaning of s 5. But we do not accept that where such a relationship was impossible, either because the disabled person lacked capacity or the support carer was also the agent of such a person, the result was that the MOH became the employer of the support carer. This was not the basis of the IF scheme and, importantly, there was a means by which a family carer could be employed under a genuine employment agreement to provide that care.
It is possible that the MOH’s decision to agree to Mr Humphreys being the nominated agent was based on a misapprehension that Mr Humphreys could be both agent and support carer. However, it was clear that Mr Humphreys was “selected” as Ms Humphreys’ agent, on the basis that it was he who would manage the funds and provide the support care (on an unspecified basis). Moreover, we are satisfied that it was clear to Mr Humphreys that his “engagement” by the MOH was as Ms Humphreys’ agent, not more.
This conclusion means that we do not need to deal with Ms McKechnie’s argument that there could be no engagement because the MOH’s knowledge was retrospective. In deference to counsel’s submissions, however, we address it briefly. Ms McKechnie argued that Mr Humphreys could not be engaged by the MOH because the precise use to which the funding is put is not known to the Host Provider (and hence the MOH) until the invoice for care provided is received by the Host Provider. Ms McKechnie argued that because the actual identity of the carer and the amount of work they have done is not known to the Host Provider until the invoice for the work is received, there is no basis on which to find that the MOH had engaged or employed Mr Humphreys and the situation is akin to that in Lowe.
It is correct that the exact amount of time worked, and by whom, is notified to the Host Provider after the event by way of a Verification Form. This form must contain specified details. These include “confirmation by the Person of the existence of a contract between the Person and a Support Provider (which will include an employment contract where appropriate) applicable to the Support Services claimed”.[249] The Verification Form must also provide the dates and times of the Support Services that were provided during that period covered by the Verification Form and identification of the Support Provider/Support Workers who have performed the support services (including the direction for attachment of any relevant copies of third party records such as time sheets or invoices).[250] Finally, there must be a declaration by the Person as to the truth and accuracy of the record of Support Services provided. However, as we noted, earlier, the ISP completed at the outset of the process contained details of the Support Workers and the services they would provide. The position was therefore not the same as in Lowe.
Relief
[249]IF Service Specification, above n 243, cl 12.2.2.2.
[250]Clause 12.2.2.
The Employment Court did not determine relief beyond declaring Mr Humphreys to be an employee of the MOH. We do not express a view on eligibility for relief beyond upholding that declaration in respect of the FFC period. Whatever other relief might be available to Mr Humphreys falls to be considered in the Employment Relations Authority and Employment Court as appropriate.
Question (i): Was the Employment Court wrong in finding (if it did) that the Court of Appeal’s approach in Idea Services applies to an assessment of hours worked by Mr Humphreys as a homeworker for the FFC and/or IF periods?
The answer to this question is determined by our conclusion on the Fleming appeal, that Idea Services cannot be relied on to apply to workers who both live and work at home.[251]
SUMMARY OF CONCLUSIONS ON APPEALS AND CROSS-APPEAL
[251]See above at [89]–[121].
On the questions for which leave was granted on the appeals and cross-appeal we have concluded:
Crown appeal against Fleming
(a)Was Ms Fleming a “homeworker” as defined by s 5 of the ERA, and therefore an employee of the MOH, when she cared for her son?
Ms Fleming was not a “homeworker” as defined by s 5 of the ERA when she cared for Mr Coote.
(b)Was the Employment Court wrong in finding that the “well‑established test for what constitutes work” as set out in Idea Services applies to Ms Fleming?
The Employment Court erred in finding that the “well‑established test for what constitutes work” as set out in Idea Services applied to Ms Fleming.
(c)Did the Employment Court err in finding that Ms Fleming had a personal grievance for discrimination?
The Employment Court erred in finding that Ms Fleming had a personal grievance.
Ms Fleming’s cross-appeal
(d)Did the Employment Court err in finding that the MOH was not permitted under a family care policy or expressly authorised under any enactment to pay Ms Fleming for work she did during the time of pt 4A of the PHDA?
Part 4A precluded Ms Fleming from recovering arrears of wages and holiday pay so the Employment Court did not err in its finding.
(e)Did the Employment Court err in failing to consider the imposition of a penalty under s 134 of the ERA?
The Employment Court did not err in failing to consider the imposition of a penalty under s 134 of the ERA.
(f)What is the level of knowledge required to establish a breach of an employment agreement for the purposes of s 134 of the ERA?
It has proven unnecessary to consider this question.
Crown appeal against Humphreys
(g)Did the Employment Court err in its assessment of the effect of pt 4A and s 88 of the PHDA on its ability to assess the employment relationship under the FFC scheme?
The Employment Court did not err in its assessment of the effect of pt 4A and s 88 of the PHDA on its ability to assess the employment relationship under the FFC scheme.
(h)Was Mr Humphreys a “homeworker” as defined by s 5 of the ERA, and therefore an employee of the MOH when he cared for his daughter during (1) the FFC period (April 2014 to August 2020) and (2) the IF period (August 2020 onwards)?
Mr Humphreys (1) was a homeworker as defined in s 5 of the ERA and therefore an employee of the MOH when he cared for Ms Humphreys during the FFC period and (2) was not a homeworker as defined in s 5 of the ERA when he cared for Ms Humphreys during the IF period.
(i)Was the Employment Court wrong in finding (if it did) that this Court’s approach in Idea Services applies to an assessment of hours worked by Mr Humphreys as a homeworker for (1) the FFC period and/or (2) the IF period?
The Employment Court was wrong in finding that this Court’s approach in Idea Services applies to an assessment of hours worked by Mr Humphreys as a homeworker for the FFC and/or IF periods.
As a result of these conclusions:
(a)The Crown’s appeal in Fleming is allowed.
(b)Ms Fleming’s cross–appeal is dismissed.
(c)The Crown’s appeal in Humphreys is allowed in part.
Costs
Ms Fleming is legally aided and the Crown did not seek costs in the event of its appeal succeeding. Because we have allowed the Crown’s appeal in Fleming and dismissed Ms Fleming’s cross-appeal we make no order as to costs.
The Crown did not seek costs in the Humphreys appeal, in the event of its appeal succeeding. In the event of the appeal failing, Mr Humphreys sought costs on a standard appeal, band A. We have allowed the Crown’s appeal in part. Both the Crown and Mr Humphreys had a measure of success. We make no order as to costs either way.
Solicitors:
Simpson Grierson, Wellington for Appellant in CA371/2021 and CA742/2021
Mark Jeffries, Auckland for First Respondent in CA371/2021
Neilsons Lawyers, Auckland for Second Respondents in CA371/2021 and CA742/2021
Oakley Moran, Wellington for First Respondent in CA742/2021
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