Employment Contracts and Parties Expressed Intentions: A Legal Analysis of the New Zealand Court of Appeal Approach

In this opinion I propound an explanation of how the ERA 2000 modified the inquiry into ascertaining a contract of service.  The starting point is the Employment Court (EC) Koia interpretation of the analytical approach under the ECA 1991 as stated in Cunningham.[1] This interpretation is then analyzed in light of the jurisprudence in Curlew[2] and Bryson.[3] Next, the Court of Appeal (CA) decision in Cunningham is considered. Finally, a discussion of the findings leads into concluding my defense of the following thesis: the difference between the ERA and ECA approaches relates to assigning different weights to the intention of the parties as ascertained from the terms of the agreement.  Under the ECA the terms of the agreement had more weight relative to other factors; a formalist approach formulating the inquiry as a question of law. Now, the ERA moved away for a freedom of contract approach by injecting (wider inquiry) notions of justice and fairness which assign an equal weight to intention as ascertained from other factual-matrix considerations; such as control, integration and the “fundamental” test. The jurisdictional tension between the EC and the CA, and the interaction between public and private law, manifest a substantial undercurrent to the following analysis.

The first sentence of paragraph [25] makes a generalization as to the analytical structure under ECA 1991: the express intention of the parties to the relationship (in relation to its classification as one of employment or otherwise) “prevailed over all other considerations.” Here, “prevail over” means that the focus of the judicial inquiry was on the “clearly expressed intentions of the parties” rather than on other factors. This interpretation echoes the emphasis that the ECA placed on the private, as opposed to public law aspects of the employment relationship:[4] “The 1991 Act represents a substantial departure from the collective principles of previous industrial relations legislation in favor of a model of free contractual bargaining.”

However, the second sentence of paragraph [25] is somewhat problematic. Now, “to prevail” seems to mean “to trump,” although in Koia’s paragraphs [27] and [28] the EC states that under the ECA 1991 “the intention of the parties was only one element,” and under the ERA 2000 “the Court may not treat as decisive any statement by the parties describing the nature of their relationship,” because “the parties may not have taken legal advice and may be unaware that what they are in fact doing does not in law fit the label.”