GILL PIZZA LIMITED v A LABOUR INSPECTOR (MINISTRY OF BUSINESS, INNOVATION AND EMPLOYMENT) [2021] NZSC 184

GILL PIZZA LIMITED v A LABOUR INSPECTOR (MINISTRY OF BUSINESS, INNOVATION ANDEMPLOYMENT) [2021] NZSC 184 [21 December 2021]IN THE SUPREME COURT OF NEW ZEALANDI TE KŌTI MANA NUISC 67/2021[2021] NZSC 184BETWEEN GILL PIZZA LIMITEDFirst AppellantSANDEEP SINGHSecond AppellantJATINDER SINGHThird AppellantMANDEEP SINGHFourth AppellantAND A LABOUR INSPECTOR (MINISTRY OFBUSINESS, INNOVATION ANDEMPLOYMENT)RespondentAND BETWEEN MALOTIA LIMITEDFirst AppellantSANDEEP SINGHSecond AppellantMANDEEP SINGHThird AppellantJATINDER SINGHFourth AppellantAND A LABOUR INSPECTOR (MINISTRY OFBUSINESS, INNOVATION ANDEMPLOYMENT)RespondentHearing: 4 November 2021Court: William Young, Glazebrook, O'Regan, Ellen France andWilliams JJCounsel: G G Ballara and S P Radcliffe for AppellantsJ C Catran and H T N Fong for RespondentS C Langton and R M Tomkinson for Restaurant Brands Ltd asIntervenerJudgment: 21 December 2021JUDGMENT OF THE COURTA The appeal is dismissed.B The appellants must pay the respondent costs of $15,000plus usual disbursements.____________________________________________________________________REASONS(Given by O'Regan J)Table of ContentsPara NoJurisdiction issue [1]Background [2]Leave [6]Intervener [7]The Act [8]Issue on appeal [20]Employment Court decision [21]Court of Appeal decision [26]Our approach [36]Approach to interpretation [37]Section 228(1) [39]Jurisdiction of Labour Inspector [43]Section 161(1)(q) [45]The carve-out in s 161(1)(c) [46]Section 6: a code? [52]GSTech [53]Legislative history [55]Policy matters [64]Result [69]Jurisdiction issue[1] This appeal deals with the jurisdiction of the Employment Court and theEmployment Relations Authority (the Authority) respectively to determine theemployment status of workers.Background[2] The jurisdiction question arose when a Labour Inspector commenced an actionin the Authority under s 228(1) of the Employment Relations Act 2000 (the Act) torecover wages and holiday pay entitlements said to be owing by two Pizza Hutfranchisees,1 Gill Pizza Ltd (Gill) and Malotia Ltd (Malotia), under theMinimum Wage Act 1983 and the Holidays Act 2003.2 The action was brought onbehalf of 28 pizza delivery drivers. Gill had told the Labour Inspector during herinvestigation that the delivery drivers were not employees but contractors, andtherefore not covered by the Minimum Wage Act and the Holidays Act. Thus, the coreof the dispute between the appellants and the Labour Inspector was whether thedelivery drivers were contractors, as the appellants said, or employees, as theLabour Inspector said.[3] The agreement between Gill and each of its delivery drivers provides that therelationship between Gill and the delivery driver is that of principal and independentcontractor, and not that of employer and employee. It records that the delivery driveris not entitled to any overtime payments, sick leave, superannuation benefits, holidaypay, redundancy pay or any other reimbursements from Gill, other than those specifiedin the agreement.[4] In the Authority, the appellants argued that the Authority did not havejurisdiction to determine whether the delivery drivers were employees; rather, thatissue would have to be determined by the Employment Court under s 6(5) of the Act,on an application by, or with the consent of, each delivery driver. The Authorityagreed.3 The Employment Court dismissed the Labour Inspector's challenge to theAuthority's decision.41 Claims were also brought in relation to other workers for failure to issue employment agreements,failure to keep and maintain accurate holiday and leave records and failure to keep and maintainaccurate wage and time records. However, those claims are not the subject of this appeal.2 For the purposes of this appeal, the position of Gill Pizza Ltd (Gill) and Malotia Ltd (Malotia) isthe same and therefore we will not differentiate them. So, any references to Gill should beinterpreted as applying to Malotia as well. The other appellants were directors of Gill and Malotiaat the relevant time or were said to be involved in managing those companies.3 A Labour Inspector of the Ministry of Business, Innovation and Employment v Gill Pizza Ltd[2018] NZERA Wellington 113 (Member MacKinnon) [Authority determination].4 Labour Inspector (Ministry of Business, Innovation and Employment) v Gill Pizza Ltd[2019] NZEmpC 110, (2019) 16 NZELR 659 (Chief Judge Inglis, Judges Smith and Holden)[EmpC judgment].[5] The Court of Appeal reversed the decision of the Employment Court and foundfor the Labour Inspector.5Leave[6] This Court granted leave to appeal against the Court of Appeal decision.6 Theapproved question is: whether the Court of Appeal was correct to conclude that theEmployment Court erred in finding that, if a defendant asserts there is noemployment relationship, the Labour Inspector must first seek a declarationof employment status from the Employment Court under s 6(5) of theEmployment Relations Act 2000 before commencing or continuing aproceeding under s 228(1) of that Act.Intervener[7] The franchisor for the businesses of Gill and Malotia is Restaurant Brands Ltd.It was granted leave to intervene. Its counsel made both written and oral submissionssupporting the appellants' position.The Act[8] Section 3(ab) of the Act describes one of its objects as follows:(ab) to promote the effective enforcement of employment standards, inparticular by conferring enforcement powers on Labour Inspectors,the Authority, and the court; [9] The scheme of the Act generally is to provide the means by which employmentrelationship problems can be resolved quickly, cost-effectively and withoutunnecessary judicial intervention. This is reflected in the institutional framework setout in Part 10 of the Act. In this Court's recent decision in FMV v TZB, the majorityobserved in relation to Part 10:7[53] Part 10 of the Act (in which s 161 is located) provides for thetwo specialist employment institutions: the Employment Relations Authority5 Labour Inspector (Ministry of Business, Innovation and Employment) v Gill Pizza Ltd[2021] NZCA 192, (2021) 11 NZELC ¶79-134 (Cooper, Clifford and Courtney JJ) [CA judgment].6 Gill Pizza Ltd v A Labour Inspector (Ministry of Business, Innovation and Employment)[2021] NZSC 97 (William Young, Ellen France and Williams JJ).7 FMV v TZB [2021] NZSC 102, (2021) 11 NZELC ¶79-135 per Winkelmann CJ, O'Regan andWilliams JJ (footnotes omitted).and the Employment Court. They are intended to give effect to the Act'soverall object [set out in s 3(a)] of building productive employmentrelationships through the promotion of good faith:(v) by promoting mediation as the primaryproblem-solving mechanism other than for enforcingemployment standards; and(vi) by reducing the need for judicial intervention[54] In short, the Act is designed to empower parties to employmentrelationships to resolve their own problems where possible and to avoidunnecessary adversarialism. These aims are also evident in s 143 (the objectof Part 10), which provides that the Act's dispute resolution regime andspecialist institutions are intended relevantly to:(a) support successful employment relationships and thegood faith obligations that underpin them; and(b) recognise that employment relationships are morelikely to be successful if problems in thoserelationships are resolved promptly by the partiesthemselves; and(c) recognise that, if problems in employmentrelationships are to be resolved promptly, expertproblem-solving support, information, and assistanceneeds to be available at short notice to the parties tothose relationships; and(d) recognise that the procedures for problem-solvingneed to be flexible; and(e) recognise that there will always be some cases thatrequire judicial intervention; and(f) recognise that judicial intervention at the lowest levelneeds to be that of a specialist decision-making bodythat is not inhibited by strict procedural requirements;and(fa) ensure that investigations by the specialistdecision-making body are, generally, concludedbefore any higher court exercises its jurisdiction inrelation to the investigations; and(g) recognise that difficult issues of law will need to bedetermined by higher courts.[55] Thus, the focus of Part 10 is on practical, specialised, speedy andinformal dispute resolution that is accessible to all parties.[10] Section 157(1) provides that the Authority is: an investigative body that has the role of resolving employmentrelationship problems by establishing the facts and making a determinationaccording to the substantial merits of the case, without regard to technicalities.[11] Section 161(1) deals with the jurisdiction of the Authority. It provides that theAuthority has exclusive jurisdiction "to make determinations about employmentrelationship problems generally",8 including:(c) matters about whether a person is an employee (not being mattersarising on an application under section 6(5)):(q) actions of the type referred to in section 228(1):[9][12] The parenthesised words in s 161(1)(c) are of some significance, as willbecome apparent.[13] Section 187(1) sets out the matters over which the Employment Court hasexclusive jurisdiction. These include:(f) to hear and determine, under section 6(5), any question whether anyperson is to be declared to be—(i) an employee within the meaning of this Act; or(ii) a worker or employee within the meaning of any of the Actsreferred to in section 223(1):8 In FMV v TZB, above n 7, at [22], the majority said that, when read alongside the definition of"employment relationship problem" in s 5, s 161(1) of the Employment Relations Act 2000 (theAct) effectively reads: "The Authority has exclusive jurisdiction to make determinations aboutany problems relating to or arising out of employment relationships, generally".9 As here, actions to recover minimum wage or holiday pay entitlements.[14] Section 6 provides (relevantly) as follows:6 Meaning of employee(1) In this Act, unless the context otherwise requires, employee—(a) means any person of any age employed by an employer to doany work for hire or reward under a contract of service; (2) In deciding for the purposes of subsection (1)(a) whether a person isemployed by another person under a contract of service, the court orthe Authority (as the case may be) must determine the real nature ofthe relationship between them.(3) For the purposes of subsection (2), the court or the Authority—(a) must consider all relevant matters, including any matters thatindicate the intention of the persons; and(b) is not to treat as a determining matter any statement by thepersons that describes the nature of their relationship.(5) The court may, on the application of a union, a Labour Inspector, or1 or more other persons, by order declare whether the person orpersons named in the application are—(a) employees under this Act; or(b) employees or workers within the meaning of any of the Actsspecified in section 223(1).(6) The court must not make an order under subsection (5) in relation toa person unless—(a) the person—(i) is the applicant; or(ii) has consented in writing to another person applyingfor the order; and(b) the other person who is alleged to be the employer of theperson is a party to the application or has an opportunity to beheard on the application.[15] In the present case, s 6(5) and (6) are key provisions. As can be seen, theseprovisions have two important features. First, s 6(5) requires an application to theEmployment Court, not the Authority. Second, s 6(6) requires that the application ismade personally or, if made by another person applying for the order (such as aLabour Inspector), that written consent is obtained from the person or persons onwhose behalf the application is brought.[16] Part 11 of the Act contains a scheme for ensuring compliance withnine specified Acts, including (relevantly to this case) the Minimum Wage Act and theHolidays Act.10 The statutory obligation to ensure compliance with these Acts falls onLabour Inspectors, whose statutory functions include:11(a) determining whether the provisions of the relevant Acts have beencomplied with; and(b) taking all reasonable steps to ensure that the relevant Acts arecomplied with; and(c) monitoring and enforcing compliance with employment standards;and(d) performing any other functions conferred by or under the relevantActs.[17] As noted by the Court of Appeal:12[15] A suite of tools is provided for this purpose: enforceableundertakings,13 improvement notices,14 demand notices,15 the right to bring anaction to recover wages or holiday pay16 and the power to issue infringementnotices.17 These provisions are supplemented by pt 9A, which providesfurther enforcement measures to promote the more effective enforcement ofemployment standards, especially minimum entitlement provisions.18[16] Labour Inspectors have extensive powers to enable them to dischargetheir statutory functions. These include the power to enter premises whereany person is employed or where the Labour Inspector has reasonable causeto believe that any person is employed and the power to require production of10 The other legislation, listed in s 223(1), is the Act itself; the Support Workers (Pay Equity)Settlements Act 2017; the Equal Pay Act 1972; the Home and Community Support (Payment forTravel Between Clients) Settlement Act 2016; the Parental Leave and Employment ProtectionAct 1987; the Volunteers Employment Protection Act 1973; and the Wages Protection Act 1983.11 Employment Relations Act, s 223A.12 CA judgment, above n 5.13 Employment Relations Act, s 223B.14 Section 223D.15 Section 224.16 Section 228.17 Section 235C.18 Section 142A.wage and other records.19 The breadth of these tools and powers is intendedto allow a Labour Inspector the flexibility to respond to a range ofnon-complying conduct in the most efficient way, avoiding lengthy and costlylitigation.20[18] This brings us to s 228(1), under which the Labour Inspector commenced theaction against the appellants that is in issue in this appeal. It provides that:A Labour Inspector may commence an action on behalf of an employee torecover any wages or holiday pay or other money payable by an employer tothat employee under the Minimum Wage Act 1983 or the Holidays Act 2003.[19] The appellants stressed that this provision allows an action on behalf of"an employee", in contrast to s 6(5) and (6), which refer to an application in relationto "a person".Issue on appeal[20] In summary, s 161(1)(q) confers on the Authority exclusive jurisdiction todetermine actions brought under s 228(1), while s 187(1)(f) confers on theEmployment Court exclusive jurisdiction to make declarations under s 6(5) as toemployment status. The issue before us is this: when a Labour Inspector commencesan action under s 228(1) on behalf of persons said to be employees, but that status ischallenged by the person said to be their employer, can the Authority consider anddetermine the action, or must an application first be made to the Employment Courtunder s 6(5) to resolve whether the persons on whose behalf the action is commencedare, in fact, employees? The issue is significant in practice, not just because of thecost and delay inherent in a two-stage process, but because a Labour Inspector cannotproceed under s 6(5), in the Employment Court, unless all of the people on whosebehalf the action is commenced consent in writing, as required by s 6(6). There is nosuch requirement for an action commenced in the Authority under s 228(1).19 Sections 229(1)(a) and (c). Subsequent to the Employment Court decision, a new provision,s 229A, was enacted, which empowers a Labour Inspector to exercise the investigatory powersconferred by s 229 to investigate whether any person performing work is an employee, "as distinct,for example, from an independent contractor or a volunteer".20 Labour Inspector of the Ministry of Business, Innovation and Employment v IT-Guys NZ Ltd[2019] NZEmpC 115, (2019) 16 NZELR 933 at [23], referring to Office of the Minister of Labour,Cabinet Business Committee "Proposals to Amend the Employment Relations Act 2000 andRelated Work" (July 2010) Appendix 1 at [126].Employment Court decision[21] The Employment Court noted the attraction of having the status issue resolvedmore cheaply and quickly in the Authority, as the Labour Inspector argued.21 TheLabour Inspector said the status issue could be dealt with by the Authority as apreliminary issue.22 But the Employment Court held that the Labour Inspector'sargument cut across the scheme of s 6(5) and (6), under which Parliament hadconferred jurisdiction on the Employment Court, not the Authority, to determinewhether a person is an employee.23[22] The Employment Court considered that the Authority's exclusive jurisdictionunder s 161(1)(q) to determine an action under s 228(1) did not extend to actions inwhich status was in issue.24 This was because ss 161(1)(q) and 228(1), read together,enable the Labour Inspector to commence an action on behalf of an "employee". Thatwording presupposed that there was an employee and that status is not in issue. TheEmployment Court contrasted the wording of s 228(1) with that of s 6(5), the latter ofwhich refers to an application for a declaration as to whether "the person or personsnamed in the application"25 are "employees or workers" within the meaning of theActs specified in s 223(1).[23] The Employment Court considered that the fact that a declaration as to statuscannot be made without the consent of the person or persons concerned supported thisinterpretation, having regard to the legislative history of s 6(5) and (6).26 We discussthis in more detail below.27[24] The Employment Court did not consider that its interpretation risked either anabsurd result or undue complexity.28 It was not concerned that the defendant in a21 EmpC judgment, above n 4, at [10].22 This approach was taken by the Employment Relations Authority (the Authority) in HairlandHoldings Ltd v The Chief Executive of the Ministry of Business, Innovation and Employment[2018] NZERA Christchurch 196 at [67].23 EmpC judgment, above n 4, at [11].24 At [13]. It considered that the Authority's general power under s 161(1)(c) to determineemployment status did not apply in s 228(1) actions, given that the power to determine s 228(1)actions was specifically conferred by s 161(1)(q): at [12].25 Emphasis added.26 At [15]–[18].27 See below at [55]–[63].28 EmpC judgment, above n 4, at [19].s 228(1) action would put the status of the persons said to be employees in issue fortactical reasons.29[25] The practical effect of the Employment Court decision was that, where statuswas put in issue in a s 228(1) action, a Labour Inspector was required to make anapplication under s 6(5) (with the written consent of all those on whose behalf it wasmade), with the Authority staying the s 228(1) action pending the outcome of thatapplication or removing the whole matter to the Employment Court.30Court of Appeal decision[26] The Court of Appeal considered the plain wording of ss 228(1) and 161(1)(q)supported the proposition that the Authority could determine an action by a LabourInspector under s 228(1), whether or not the status of those on whose behalf it wascommenced was in issue.31 Status was just a matter that had to be proved, like anyother aspect of the Labour Inspector's case. It did not see the qualifying words in s161(1)(c), which carves out from the Authority's jurisdiction "matters arising on anapplication under section 6(5)", as affecting that conclusion: the carve-out appliedonly if an application had, in fact, been made under s 6(5).32[27] The Court noted that, in practice, status was often put in issue in response toLabour Inspectors' actions under s 228(1) and, prior to the present case, was routinelyresolved by the Authority.33 It considered that the Authority had been influenced indeparting from its previous practice by the Employment Court's decision inGSTech Ltd v Labour Inspector of the Ministry of Business, Innovation and29 At [22].30 At [20].31 CA judgment, above n 5, at [32].32 At [34].33 At [35], citing A Labour Inspector v Southern Taxis Ltd [2018] NZERA Christchurch 104;A Labour Inspector v Ways Electronics Ltd [2018] NZERA Wellington 76; A LabourInspector v Karamea Holiday Homes Ltd (in liq) [2017] NZERA Christchurch 226; A LabourInspector v Gengy's Management Ltd [2017] NZERA Auckland 333; A Labour Inspector of theMinistry of Business, Innovation and Employment v Dai's Food Ltd [2017] NZERA Christchurch172; A Labour Inspector of the Ministry of Business Innovation and Employment v Cheap Dealson Wheels Ltd [2017] NZERA Auckland 196; A Labour Inspector v Griffin [2017] NZERAAuckland 40; and A Labour Inspector with the Ministry of Business Innovation andEmployment v Alpine Motor Inn & Café (2008) Ltd [2016] NZERA Christchurch 130. See also,in a different context, Hairland Holdings Ltd, above n 22, as discussed in the CA judgment,above n 5, at [36].Employment.34 However, the Court of Appeal considered this was based on amisunderstanding of what was decided in GSTech.35[28] The Court considered that s 161(1)(c) and (q) and s 228(1) contemplate thatstatus may be put in issue in a s 228(1) action and will be determined by the Authorityunder its exclusive jurisdiction to determine all the issues in such an action, unlessthere has actually been an application under s 6(5).36[29] The Court noted that the requirement in s 6(6) for consent by persons whosestatus is in issue in an application brought under s 6(5) could be seen as a response tothe concern expressed during parliamentary debates over the possible effect of s 6(5)on contractors who did not wish to be declared employees.37 However, it did not seethis as significant. Its conclusion was bolstered by four factors.[30] First, ss 161(1)(q) and 228(1) are the more specific provisions. They aredirected solely towards an action by a Labour Inspector for the recovery of wages orholiday pay or other money owing under the Minimum Wage Act and Holidays Act.In comparison, s 6(5) makes no reference to either ss 161(1)(q) or 228(1).38[31] Secondly, the Employment Court's approach has implications beyond s 228(1).A Labour Inspector has powers under some of the other Acts specified in s 223(1) totake actions that fall within the Authority's exclusive jurisdiction.39 The Authority hasexclusive jurisdiction to determine those actions.40[32] Thirdly, a declaration in s 6(5) cannot have the effect of determining thesubstantive s 228(1) action, and determination of a s 228(1) action is not withinthe jurisdiction conferred on the Employment Court under s 187.41 It is also possible34 GSTech Ltd v Labour Inspector of the Ministry of Business, Innovation and Employment[2018] NZEmpC 84, (2018) 16 NZELR 689 [GSTech].35 CA judgment, above n 5, at [37]–[38].36 At [40].37 At [41].38 At [46].39 At [47]. For example, a Labour Inspector may bring an action to recover penalties imposed underss 75 and 76 of the Holidays Act 2003 and s 25 of the Home and Community Support (Paymentfor Travel Between Clients) Settlement Act.40 Employment Relations Act, s 161(1)(m).41 CA judgment, above n 5, at [48].that the Employment Court could decide against making a declaration under s 6(5),given that declaratory relief is flexible and discretionary.42 The Employment Court'sapproach would also raise the possibility that no remedy would be available where anindividual's status is put in issue by the alleged employer in the context of a s 228(1)action, and the individual concerned does not consent to an application under s 6(5).Such a situation would cut across the statutory role of Labour Inspectors to ensurecompliance with minimum standards, which serves a broad public purpose beyondparticular cases.43 It would also run the risk of baseless challenges to the employmentstatus of people for whom a s 228(1) action has been commenced to delay andcomplicate the process.44[33] Fourthly, requiring a Labour Inspector to obtain a declaration beforeproceeding with the s 228(1) action would bring significantly greater proceduralcomplexity and cost to all parties.45[34] The Court of Appeal considered that conferring on the Employment Court theexclusive jurisdiction to determine status was inconsistent with the express object ofthe Act to recognise that judicial intervention at the lowest level needs to be that of aspecialist decision-making body that is not inhibited by strict proceduralrequirements.46[35] It also noted that the Employment Court's approach would limit appeal rightsin the event of a factual error by the deciding body.47 The Authority's determinationsare amenable to challenge in the Employment Court on a de novo basis or for error ofeither fact or law.48 However, a decision of the Employment Court is subject only toa right of appeal, with leave, on a question of law.4942 At [49].43 At [50].44 At [50].45 At [51].46 At [54].47 At [55].48 Employment Relations Act, s 179.49 Section 214.Our approach[36] We have set out in some detail the decisions of the Employment Court and ofthe Court of Appeal because the contrast between them illustrates the competingarguments before us. We consider that the Court of Appeal was correct in its analysisand agree, for the most part, with its reasoning. We now set out our reasons for thisconclusion.Approach to interpretation[37] There was no dispute about the approach to statutory interpretation: themeaning of an enactment must be ascertained from its text and in the light of itspurpose.50[38] The provisions of the Act that are in issue are ss 6(5) and (6), 161(1)(c) and(q), 187(1)(f) and 228(1).Section 228(1)[39] We do not consider that the existence of a dispute about whether the person onwhose behalf a Labour Inspector is pursuing an action under s 228(1) is an employeecan be controlling of the jurisdiction either of the Labour Inspector to commence theaction, or that of the Authority to deal with it. In effect, the interpretation pressed bythe appellants would allow the defendant to determine the issue of the jurisdiction ofthe Labour Inspector and that of the Authority merely by raising such a dispute. Wedo not think that is likely to have been Parliament's purpose.[40] What if the defendant said nothing about status before the action wascommenced? There would be no reason to question the Labour Inspector's power tocommence the action in such a case. But, on the appellants' argument, the defendantcould signal a challenge to the status of the person on whose behalf the action wascommenced after the Authority is seized of it, retrospectively depriving the50 Interpretation Act 1999, s 5(1). The Interpretation Act has now been repealed by the Legislation(Repeals and Amendments) Act 2019, with effect from 28 October 2021, but was in force at thetime this case was considered by the Authority, the Employment Court and the Court of Appeal.Section 10(1) of the Legislation Act 2019 is to similar effect, though it expressly refers to contextin addition to purpose.Labour Inspector of jurisdiction to commence it and prospectively depriving theAuthority of jurisdiction to address and resolve it.[41] As we see it, the Labour Inspector is required to prove in the action unders 228(1) any disputed matter, including:(a) whether the person or persons on whose behalf the action is brought isan employee/are employees;(b) whether the amount paid meets the requirements of the Minimum WageAct; and(c) whether there has been compliance with the entitlements under theHolidays Act.[42] It is true that proving the person on whose behalf the action is brought is anemployee is a jurisdictional fact and that the action will be dismissed without furtherconsideration if that element is not established. But that does not mean that the merefact that this element is disputed deprives the Labour Inspector of the power tocommence the action under s 228(1) or the jurisdiction of the Authority to deal withthat action.Jurisdiction of Labour Inspector[43] Counsel for the appellants, Mr Ballara, pointed out that, after the EmploymentCourt decision, a new section, s 229A, was added to the Act. Section 229A givesLabour Inspectors power to use their investigative powers under s 229 to assesswhether a person performing work is an employee. The section expands thedefinitions of "employee" and "employer" for the purposes of the power granted bythe section. Mr Ballara argued this supported the view that a Labour Inspector's powerto commence an action under s 228(1) applies only in relation to a person whose statusas an employee was not in issue.[44] We do not see s 229A as assisting our construction of s 228(1). The fact that itwas passed after the events in issue in this case is one reason. But, even putting thatto one side, we see it as addressing a completely different situation from s 228(1).Section 229A is about a Labour Inspector exercising intrusive powers of investigation.Section 228(1) is about a Labour Inspector initiating a proceeding which triggers aninvestigation under the control of the Authority.Section 161(1)(q)[45] Once it is established that the action may be brought by a Labour Inspectorunder s 228(1), s 161(1)(q) expressly gives the Authority jurisdiction to deal with it.There is nothing in s 187 that gives the Employment Court jurisdiction to deal withsuch an action.51The carve-out in s 161(1)(c)[46] The Employment Court considered that an action by a Labour Inspector unders 228(1) in circumstances where the status of the person on whose behalf it is broughtis under challenge is, in effect, an application for a declaration as to the status of theperson, which can be made only under s 6(5).52 As noted earlier, s 6(5) requires anapplication to the Employment Court, not the Authority. If the Employment Courtwere correct, then the Authority would not have jurisdiction to determine the status ofthe delivery drivers in this case. Section 161(1)(c) empowers the Authority to dealwith matters about whether a person is an employee, but specifically excludes fromthat power "matters arising on an application under section 6(5)". The EmploymentCourt's jurisdiction to deal with an issue raised under s 6(5) is confirmed bys 187(1)(f), which specifically refers to applications under s 6(5).[47] As just mentioned, s 161(1)(c) specifically carves out from the Authority'sjurisdiction "matters arising on an application under section 6(5)". The Court ofAppeal considered that this excluded from the Authority's jurisdiction only mattersarising on an application that had actually been made to the Employment Court under51 Section 187(1) does, however, give the Employment Court jurisdiction to deal with mattersremoved into the Court under s 178 and challenges under s 179.52 See EmpC judgment, above n 4, at [11].s 6(5).53 In this respect, it differed from the Employment Court, which said in relationto this carve-out:54We do not think this phrase can sensibly be read as only including thosematters which have in fact been pursued by way of application under s 6(5).[48] The Employment Court considered that the protective mechanisms built intos 6 suggested that Parliament intended that the Employment Court, rather than theAuthority, would make declarations of employment status in the context ofrepresentative claims for minimum entitlements under the Minimum Wage Act andthe Holidays Act where the status of the person on whose behalf the action wascommenced was in issue.55[49] For our part (and in agreement with the Court of Appeal),56 we do not see anyreason to adopt an interpretation that differs from the plain meaning of the words ins 161(1)(c) in order to exclude from the jurisdiction of the Authority matters relatingto status that are not, in fact, raised in the context of an application under s 6(5).[50] The Court of Appeal observed that it would be hard to see what residualpurpose s 161(1)(c) would serve if it were interpreted as the Employment Court foundand as the appellants submit it should be.57 Mr Ballara said the residual purpose wouldbe to empower the Authority to address a claim brought personally (such as a personalgrievance claim under s 103) by a person claiming to be an employee. If there were adispute as to whether the person was an employee or a contractor, s 161(1)(c) wouldallow the Authority to resolve that dispute. On this argument, the identity of theapplicant (the person concerned or a Labour Inspector acting on behalf of the person)would be the determining factor in defining the Authority's jurisdiction.58[51] We do not consider that the clear wording of s 161(1)(c) leaves room for thatinterpretation. And, if it were correct, it would undermine the appellants' argument53 CA judgment, above n 5, at [34].54 EmpC judgment, above n 4, at [14].55 At [15].56 CA judgment, above n 5, at [34].57 At [34].58 As counsel for the Labour Inspector, Ms Catran, pointed out, neither the Minimum Wage Act(s 11) nor the Holidays Act (s 77) draws any distinction between actions by individuals and actionsby a Labour Inspector.that the matter at issue in a dispute about status is so fundamental, it should beaddressed by the more formal procedure inherent in a proceeding before theEmployment Court. It that were true, it could be expected that applications byindividuals should be channelled into the s 6(5) procedure too.Section 6: a code?[52] The appellants and the intervener argued that s 6 should be regarded as a codein relation to issues concerning the status of a person alleged to be an employee. Wedo not see anything in s 6 that would justify the finding that it is a code. Rather, it setsout a specific procedure to allow for a declaration to be made, which is quite differentfrom an enforcement action under s 228 or, in the case of an individual, under s 131.And, if s 6 were a code, it would apply in respect of cases commenced by individualstoo. The appellants accepted that the s 6(5) procedure was not required where anindividual applicant pursued a case in the Authority in which status was in issue.GSTech[53] The Authority cited the decision of the Employment Court in GSTech tosupport the proposition that the Authority's jurisdiction under s 228(1) is constrainedto matters brought by the Labour Inspector where those matters are already properlywithin s 228(1) (that is, it has been established, or is accepted, that the person on whosebehalf the application is brought is an employee).59[54] GSTech was not mentioned in the decision of the Employment Court in thepresent case, but the argument that had found favour in the Authority was made againby the appellants in the Court of Appeal. The Court of Appeal considered that theAuthority had incorrectly interpreted GSTech.60 In that case, the Employment Courtheld that the Authority's jurisdiction under s 228(1) was limited to amounts owedunder the specific statutes referred to in s 228(1)—that process could not therefore beused for a claim by a Labour Inspector for other amounts owing by an employer.61 Weagree with the Court of Appeal that the Authority was in error in concluding that59 GSTech, above n 34, as cited in the Authority determination, above n 3, at [31].60 CA judgment, above n 5, at [37]–[38].61 GSTech, above n 34, at [9] and [13].GSTech was an authority that applied in the circumstances arising in this case. It dealtwith quite a different issue, and we do not consider it has any bearing on the presentdecision.Legislative history[55] Both counsel for the appellants and counsel for the intervener said that thelegislative history, as recorded in the parliamentary debates on the passage of the Billthat became the Act, supported their (and the Employment Court's) interpretation.62Counsel for the Labour Inspector, Ms Catran, said the exchanges that occurred in theparliamentary debates had the opposite effect and supported the interpretationadvanced by the Labour Inspector and adopted by the Court of Appeal.[56] Opposition MPs expressed concern during the parliamentary debates that theBill would provide that a person's employment status could be determined on theapplication of a union or Labour Inspector without that person's consent.63 Thisconcern was addressed by the inclusion in cl 6 of what is now s 6(6) and the carve-outin what is now s 161(1)(c).64[57] During the Committee of the whole House stage, an Opposition MP pointedout that cl 6(6) applied to applications under cl 6(5), but did not prevent a similarchallenge to the status of contractors being made by a Labour Inspector in an actionfor arrears of wages.65 He proposed on three occasions amendments that would havemade cl 6(6) apply to any proceeding in which a determination of employment statuswas required. Each of these amendments was rejected.66[58] In short, a Member of Parliament predicted the very situation that nowconfronts this Court and suggested amendments that would have resolved the positionin favour of the interpretation proposed by the appellants and the intervener. Such62 The relevant Bill is the Employment Relations Bill 2000.63 (10 May 2000) 583 NZPD 2109 (Question to Minister by Hon Richard Prebble MP); and (11 May2000) 583 NZPD 2181–2182 (Question to Minister by Hon Max Bradford MP).64 See Employment Relations Bill 2000 (8-2), cl 6(6).65 (9 August 2000) 586 NZPD 4118–4119 (Stephen Franks MP); and (9 August 2000) 586 NZPD4487 (Stephen Franks MP).66 (9 August 2000) 586 NZPD 4129–4130; (9 August 2000) 586 NZPD 4521–4522; and (15 August2000) 586 NZPD 4863–4864.amendments were defeated. The respondent submitted this indicates that theparliamentary history supports its interpretation and the view that Parliament did notconsider it necessary to require all disputes relating to employee/contractor status tobe channelled into the s 6(5) procedure. However, the appellants and the intervenerargued to the contrary.[59] The argument for the appellants is that the legislative history should beinterpreted as indicating Parliament's intention that any dispute aboutemployee/contractor status must be channelled through s 6(5).[60] Mr Ballara argued that s 187(1)(f) and the carve-out in s 161(1)(c) should beinterpreted, in light of the legislative history, as a requirement that any matter requiringa decision about a person's status that is initiated by a union or a Labour Inspectormust be channelled through the s 6(5) process. The flaw we see in this argument isthat both ss 161(1)(c) and 187(1)(f) specifically refer to s 6(5). Mr Ballara effectivelyasks this Court to read the parenthesised words in s 161(1)(c) to mean the Authoritylacks jurisdiction to deal with applications brought by a Labour Inspector or union onbehalf of another person where resolving the application would require adetermination about employment status, until status has been resolved by theEmployment Court. Section 187(1)(f) would require the converse reading, conferringon the Employment Court exclusive jurisdiction for any matter relating to statusarising in the context of an application by a Labour Inspector or union, not just s 6(5)applications.[61] However, we do not consider that to be an available reading. The referencesto s 6(5) in both ss 161(1)(c) and 187(1)(f) cannot simply be ignored. Nor can s 6(5)itself bear the meaning contended for by Mr Ballara, as we have already noted. IfParliament had the intention that Mr Ballara attributes to it, then it failed to expressthat intention.[62] In the parliamentary debates, the Minister was criticised on the basis that shehad provided an assurance that a person's status could not be changed without theirinvolvement or consent, but that the draft Bill had not given effect to that assurance.6767 (9 August 2000) 586 NZPD 4117–4119, 4487 and 4845–4846.Mr Ballara said that the legislation should be interpreted in a way that gives effect tothe assurance the Minister was said to have made. We do not consider that an availableinterpretation of the Act.[63] We accept the respondent's argument in relation to the statutory history, as setout above at [58].Policy matters[64] As noted earlier, the Court of Appeal considered that there were a number ofpolicy factors supporting its interpretation of the provisions in issue.68 In particular:(a) Allowing the Authority to determine an action under s 228(1) reflectedthe express object of the Act to ensure that decisions are made asefficiently and cheaply as possible and are not inhibited by strictprocedural requirements. It also ensured that Labour Inspectors couldtake action to protect vulnerable people without potentially costlyprocedural impediments or a requirement that such vulnerable peoplemust put their head above the parapet and risk reprisals from thedefendant.69(b) The Court of Appeal's interpretation meant appeal rights werepreserved. There is a full right of appeal against the decision of theAuthority but only a limited right of appeal against the decision of theEmployment Court.70[65] We agree that these factors make the interpretation we favour attractive, butwe do not see them as decisive. The objective of the legislation for efficient andinexpensive decision-making is balanced by some decisions being entrusted to themore formal and expensive process undertaken by the Employment Court. And appealrights against Employment Court decisions are the same for all decisions of that body,68 See the discussion above at [31]–[35].69 CA judgment, above n 5, at [50].70 At [55].with very limited exceptions.71 The fact that those appeal rights are limited is not areason to find against the Employment Court having jurisdiction.[66] The appellants argue that policy reasons suggest their interpretation ispreferable. They say there is a risk that a Labour Inspector could bring an action unders 228(1) on behalf of a group of people who wanted to be contractors but became atrisk of being found to be employees. If the Authority found for the Labour Inspector,the people found to be employees against their will would not be able to challenge thedecision in the Employment Court because they would not have been parties to theaction in the Authority.72 This is the concern raised by Opposition MPs during theparliamentary debates.[67] This issue would arise only if the Authority classified as an employee a personwho (a) had wished to resist such classification and (b) had not been told about thes 228(1) action and given the opportunity to apply to be joined as a party under s 221.73In any event, it seems unlikely that a Labour Inspector would commence an action onbehalf of a person the Labour Inspector knew would be better off as a contractor thanas an employee. And, in the present case, the delivery drivers on whose behalf theaction was commenced stand to gain considerably if found to be employees andtherefore entitled to the minimum wage and holiday entitlements. So, it is hard to seewhy they would want to challenge a decision that ensured they obtained thosebenefits.74 There is therefore an air of unreality to the policy consideration urged onus.[68] We do not consider there is a compelling public interest reason to adopt whatwe consider to be the strained interpretation advocated for by the appellants.71 Employment Relations Act, s 214AA.72 See s 179(1) of the Act.73 If joined as a party, such a person would have a right to challenge the decision in theEmployment Court. In any event, if a person whose status was determined in the Authority hadnot been notified of the proceeding, they could apply for review under s 194 or for a declarationunder s 6(5).74 The intervener argued that considerations relating to Kiwisaver, PAYE tax and child supportpayments were reasons why a person may prefer to be a contractor.Result[69] The appeal is dismissed.[70] The appellants must pay the respondent costs of $15,000 plus usualdisbursements.Solicitors:McBride Davenport James, Wellington for AppellantsCrown Law Office, Wellington for RespondentLangtonHudsonButcher Lawyers, Auckland for Intervener