Again you misunderstand, by the way are you reading the actual transcript or just going off what is reported and your knowledge of law. I haven't read the actual transcript so I am just doing the latter also.
The fundamental question is whether the relgious org, the WTS, is subject to WC requirements or exempt from them. To answer that question, which is the first question that must be answered, the status or activity of the workers is immaterial.
If you hold that the WTS is subject to Worker's Compensation insurance requirements (which is really the "big news" part of the story here) THEN you can , for purposes of deciding the case before the judge, examine whether the person should be deemed an "employee" and eligible to benefit from WCompensation.
Of course, what the employees are doing is important, whether they are paid or not is not important, but only in determining whether they may get WC or not. This aspect of the story was not the "big news" or important feature of the story which is what I am trying to stress.
Evidently, the judge deemed that despite the claims from the WT that is is a religous order exempt from WC requirements, that 1) it is subject to WC in NY and 2) that the claimant Upton was an employee engaged in work related activity at the time of injury. without reading the transcript, or being present, no one can say whether the Society advanced any arguments on the second point, that Ms. Upton was not engaged in work.
The newspaper article mentions that the lawyer Miller said the Uptons were "volunteer members of a religous order," but it didn't clarify and left ambiguous whether such an assertion was made by the Society to back it's claim that it, as an employer/corp. should be exempt from WC as a relgious order, under NY law, or whether the Society was also trying to dispute that the injury occurred while working. Perhaps it was both? We don't know.
I would expect you to appreciate the subtleties of the discussion West.