Salvation Army told to follow award

Press, 27 May 1985, Page 12

Salvation Army told to follow award

PA Wellington The Salvation Army has been told that it must abide by the provisions of an award covering workers in its rest homes. The Court of Appeal has backed a ruling by the Arbitration Court that the Salvation Army was not exempt from the provisions of the Rest Homes’ Employees Award. The case, between the Salvation Army and the Canterbury Hotel and Hospital Workers’ Union, came before the Arbitration Court in 1982. It involved workers employed in two charitable homes, the Resthaven Eventide Home and the Addington Social Service Centre Rest Home. The Salvation Army would not collect union fees from workers, or provide the union with the names of workers, claiming it was exempt from the provisions of the award. The Salvation Army claimed it was not an employer by definition under the Industrial Relations Act because it did not run the homes for “pecuniary gain.” The Arbitration Court decided otherwise and in March the Salvation Army

took the case to the Court of Appeal. In a judgment handed down at the end of March, which dealt with the definition of an employer, the term pecuniary gain and the intent of the section of the act, the appeal was dismissed. The Court said it was accepted that neither of the rest homes was conducted as a commercial venture, although to supplement the Salvation Army's charitable income allocated to homes, it charged fees to residents who could afford it. The Court said the term pecuniary gain could not be restricted to profit, but included monetary receipts “which leave the employer in a rather better position even when it occurs inside an activity involving regular losses which are actually anticipated." That was the effect of the fees collected from inmates, the Court said. While the staff were not employed to produce fees for the employer, the fees were derived as an outcome of the services provided. The effect of the fees was to support and supplement the level of funds which otherwise would have been

diverted from the Salvation Army to the homes. The Court said the fees did provide a pecuniary gain or advantage for the employer-charity. The Salvation Army's general secretary, Colonel Kenneth Bridge, said the Court’s decision put the organisation in an dilemma. “Of course we would abide by the ruling, but it's a tricky one,” he said. Colonel Bridge said the Salvation Army was running 60 institutions in New Zealand and trying to finance them at the'lowest possible level with workers who were prepared to help. The case is seen as having wide implications for voluntary and charitable work. The Wellington Hotel and Hospital Workers’ Union is looking at a rule change to incorporate workers in voluntary organisations such as the Society for the Intellectually Handicapped. The Federation of Voluntary Welfare Agencies, which had already commissioned a report on industrial relations from the Industrial Relations Centre, will look at the implications of the Court’s decision.