THE CHIEF EXECUTIVE OF THE MINISTRY OF BUSINESS, INNOVATION AND EMPLOYMENT v HAIRLAND HOLDINGS LIMITED [2023] NZCA 81

THE CHIEF EXECUTIVE OF THE MINISTRY OF BUSINESS, INNOVATION AND EMPLOYMENT vHAIRLAND HOLDINGS LIMITED [2023] NZCA 81 [28 March 2023]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA553/2022[2023] NZCA 81BETWEEN THE CHIEF EXECUTIVE OF THEMINISTRY OF BUSINESS, INNOVATIONAND EMPLOYMENTAppellantAND HAIRLAND HOLDINGS LIMITEDRespondentCourt: French and Courtney JJCounsel: K F Radich for AppellantT P Cleary for RespondentJudgment:(On the papers)28 March 2023 at 10.30 amJUDGMENT OF THE COURTA The appellant's application for an extension of time to file an application forleave to appeal is granted.B The application for leave to appeal under s 214 of the Employment Relations Act2000 is granted on the following question of law:Does the Employment Relations Authority have jurisdiction to hear anapplication, brought by a purported employer against the Chief Executiveof the Ministry of Business, Innovation and Employment, theLabour Inspector and/or its workers, for a bare declaration that its workersare not employees under s 6(1) of the Employment Relations Act 2000?C Leave to appeal a second proposed question is declined.D Costs on the application for leave to appeal are reserved pending determinationof the substantive appeal.____________________________________________________________________REASONS OF THE COURT(Given by French J)Introduction[1] The Chief Executive of the Ministry of Business, Innovation and Employment(the Chief Executive) seeks leave under s 214(1) of the Employment Relations Act2000 to appeal a decision of Judge Smith in the Employment Court.1[2] Due to oversight, the application for leave to appeal was filed three days out oftime. While the respondent Hairland Holdings Ltd (Hairland) opposes the applicationfor leave to appeal on its merits, it abides the decision of the Court as regards thegranting of an extension of time. The delay was short and has not prejudiced Hairland.We accordingly grant an extension of time.[3] The case arises out of the investigation of a complaint made to theLabour Inspector by five hairstylists who had worked for Hairland. TheLabour Inspector formed a preliminary view that the hairstylists were employees andthat Hairland had breached certain minimum employment standards. Her report of16 August 2018 gave Hairland a further opportunity to be heard before anyenforcement action was taken.[4] On 3 September 2018 Hairland filed what the Chief Executive describes as a"pre-emptive application" in the Employment Relations Authority (the Authority).The application named the Chief Executive as respondent and sought a declarationthat the workers were independent contractors and not employees.[5] On 20 September 2018, the Labour Inspector filed her own application in theAuthority. The application asserted the hairstylists were employees, claimed wagearrears and holiday pay and sought the provision of records.1 Hairland Holdings Ltd v The Chief Executive of the Ministry of Business, Innovation andEmployment [2022] NZEmpC 169 [Employment Court decision].[6] The parties raised jurisdictional objections to each other's proceeding and bothcontended the other's proceeding was an abuse of process.[7] The Authority held it did not have jurisdiction to determine Hairland'sapplication for a declaration, but that it did have jurisdiction to hear theLabour Inspector's proceeding. It considered the correct approach was for theAuthority to deal with the Labour Inspector's proceeding and as a preliminary matterto investigate and determine whether the workers were employees. If the Authoritywere to determine there was an employment relationship it would continue toinvestigate and determine the Labour Inspector's claims. The Authority further foundthat the Labour Inspector's proceeding was not an abuse of process.2[8] Hairland challenged all aspects of the Authority's determination in theEmployment Court. The challenge was then stayed by consent pending the outcomeof the Supreme Court appeal in Gill Pizza Ltd v Labour Inspector.3[9] The Supreme Court delivered its decision in December 2021. It confirmed thatwhen a Labour Inspector brings an action under s 228(1) of the Employment RelationsAct on behalf of persons said to be employees, the Authority has jurisdiction todetermine their employment status.4[10] Once the Supreme Court decision was issued, the Chief Executive filed aninterlocutory application in the Employment Court seeking an order lifting the stay ofproceedings, dismissing the challenge and removing the matter to the Authority fordetermination.[11] Hairland opposed the application. It conceded that Gill Pizza resolved that partof its challenge regarding the Authority's jurisdiction to hear the Labour Inspector'sproceeding but maintained that the remainder of its challenge was still alive.52 Hairland Holdings Ltd v The Chief Executive of the Ministry of Business, Innovation andEmployment [2018] NZERA Christchurch 196 [Employment Relations Authority decision] at[53]–[56] and [65]–[68].3 Gill Pizza Ltd v Labour Inspector [2021] NZSC 184, [2022] 1 NZLR 1.4 At [39]–[49] and [69].5 Employment Court decision, above n 1, at [14].[12] It is the Employment Court's decision on the interlocutory application (whichit treated as a strike-out application) that is the subject of the proposed appeal.6[13] For present purposes, the key findings in the Employment Court judgment areas follows:(a) The Authority did have jurisdiction to entertain Hairland's applicationfor a declaration.7(b) While there were deficiencies in Hairland's pleadings (it had named thewrong respondent and failed to join the five stylists) these weredeficiencies capable of being cured by an amended pleading andtherefore not grounds for a strike-out.8(c) Although Hairland would have difficulty meeting the high thresholdrequired to establish an abuse of process in relation to theLabour Inspector's proceeding, the Authority had not addressed theconcern over duplication and it was possible Hairland might succeedon this ground.9[14] The Chief Executive's application to strike out the challenge was accordinglydismissed.10The application for leave to appeal[15] In order to obtain leave to appeal the decision, the Chief Executive mustpersuade us that the proposed appeal involves a question of law which is of general orpublic importance or which for any other reason ought to be submitted to the Courtfor determination.116 At [12]–[14] and [39].7 At [30]–[32].8 At [34].9 At [37]–[38].10 At [39].11 Employment Relations Act 2000, s 214(3).[16] The application involves two proposed questions of law as follows:1.1 Does the Employment Relations Authority have jurisdiction tohear an application, brought by a purported employer againstthe Chief Executive of the Ministry of Business, Innovation andEmployment, the Labour Inspector and/or its workers, for a baredeclaration that its workers are not employees under s 6(1) ofthe Act?1.2 If the answer is "yes", is it nevertheless an abuse of process forthe purported employer to make or maintain such an applicationwhen there are other more appropriate statutory mechanisms(such as ss 194, 223E and 228) for contesting the issue ofemployment status, which are already on foot or otherwiseavailable?[17] Contrary to a submission made by Hairland, we consider the first proposedquestion of law is reasonably arguable. It is also self-evidently a question of generaland public importance which should appropriately be determined at an interlocutorystage.[18] The position is not as clear-cut in relation to the proposed second question.The Authority's determination did not address the issue of whether Hairland'sproceeding was an abuse of process. Nor was that issue a specific ground of theChief Executive's "strike-out" application in the Employment Court and it was notaddressed by the Employment Court.12 The latter appears to have assumed that asargued the issue of abuse of process stood and fell with the jurisdiction point. We donot interpret the Judge's decision as articulating some absolute proposition that so longas a party has the jurisdictional right to file a proceeding, that proceeding can neveramount to an abuse of process. That would obviously be wrong and cannot have beenintended.[19] If the proposed second question was designed to correct an error that on ourinterpretation of the Employment Court decision has not in fact occurred, then leavewould not be granted. The wording of the proposed second question does howeverpurport to go further than that. What it seeks is a ruling that even if there is jurisdictionto entertain Hairland's proceeding, as a matter of law it will always be an abuse of12 Employment Court decision, above n 1, at [35].process to bring such an application where there are other more appropriate statutorymechanisms already on foot or otherwise available. We are not persuaded that is atenable proposition. An abuse of process is an intensely factual inquiry and each casewill turn on its own facts.[20] We therefore decline leave in relation to the second proposed question.Outcome[21] The appellant's application for an extension of time to file an application forleave to appeal is granted.[22] The application for leave to appeal under s 214 of the Employment RelationsAct 2000 is granted on the following question of law:Does the Employment Relations Authority have jurisdiction to hear anapplication, brought by a purported employer against theChief Executive of the Ministry of Business, Innovation andEmployment, the Labour Inspector and/or its workers, for a baredeclaration that its workers are not employees under s 6(1) of theEmployment Relations Act 2000?[23] Leave to appeal a second proposed question is declined.[24] As regards costs on the application for leave to appeal, we consider the mostappropriate course of action is to reserve these pending determination of thesubstantive appeal.Solicitors:Clancy Fisher Oxner & Bryant, Tokoroa for Respondent