Dispute over jurisdiction of Employment Relations Authority on employee status goes to Court of Appeal
A recent decision of the Chief Executive of the Ministry of Business, Innovation and Employment (MBIE) and Hairland Holdings Limited raises some interesting issues on determining employee status, in which the Court of Appeal delivered a split decision with MBIE being successful on appeal.
Hairland Holdings Limited (HHL) operates a walk-in hairdressing business. In 2018, when the proceedings began, it had approximately 150 hairstylists working in 25 salons nationwide.
The business was investigated by a Labour Inspector who concluded that the workers were “employees” and that there had been a breach of minimum entitlements. She sought a response from HHL on possible enforcement action on the basis that the employees had not received their minimum statutory entitlements.
HHL considered the hairstylists to be independent contractors and that there had been no breach of minimum entitlements.
Rather than wait for the Labour Inspector to take further steps (such as a claim for breach of minimum entitlements), HHL pre-emptively filed a Statement of Problem with the Employment Relations Authority seeking a determination that the hairstylists were not employees. MBIE argued that the Employment Relations Authority did not have jurisdiction to determine the claim because there was no employment relationship problem between the Labour Inspector and HHL.
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