Summary Of ERA Determinations: Week of 25–31 May 2026
Each week the Employment Relations Authority (ERA) publishes its determinations. Below is a summary of the cases determined this week, with key points for New Zealand business owners and employers.
Kelvin Lewis Taylor v Destro Limited – Independent contractor status for brand ambassadors
Mr Taylor engaged with Destro Limited as a Brand Ambassador under an independent contractor agreement dated November 2024. He claimed he was a casual employee and alleged breaches of various employment laws. Destro denied the employment relationship existed, relying on the written contractor agreement and the actual conduct of the parties. Mr Taylor worked intermittently on marketing campaigns, completed invoices, had no guaranteed work, and was free to work for competitors. The Authority examined the contract terms, how the relationship operated in practice, the level of control exercised, and the economic reality of the arrangement.
The Authority found Mr Taylor was an independent contractor, not an employee. The written agreement clearly stated this, the parties’ conduct aligned with contractor status, and all relevant common law tests supported this finding. Mr Taylor worked on his own account, managed his own tax obligations, negotiated rates, and maintained his own business interests including acting work and a production company. The Authority dismissed his claims as it had no jurisdiction over them without an employment relationship.
Legal considerations for employers: Properly documented contractor agreements that accurately reflect the actual working relationship and are consistently followed in practice provide strong evidence of independent contractor status. However, employers must ensure the written terms are not merely “window dressing” – the real nature of the relationship must genuinely be one of independent contracting, with minimal control, genuine freedom to accept or decline work, and the worker operating their own business.
Junchen Xu v Aurora Developments Limited – Unpaid wages for pre-employment period and unjustified dismissal
Mr Xu claimed he commenced employment with Aurora Developments Limited (ADL) as a quantity surveyor on 1 March 2021, but ADL maintained his paid employment only began on 1 April 2021. During March, Mr Xu says he completed work logs, timesheets, and billable project work. ADL argued the first month was an unpaid learning and observation period. Mr Xu also alleged unjustified dismissal, non-payment of incentive bonuses, unpaid holiday pay, and breach of the minimum wage and other employment legislation. ADL did not provide training records or other documentation to support its position.
The Authority found Mr Xu was an employee from 1 March 2021 and awarded him: the statutory minimum wage for March 2021 (40 hours per week) plus 8% top-up; $7,400 for unpaid incentive bonuses; two weeks’ wages for work undertaken 10–30 September 2023 while on purported annual leave; four weeks’ annual holiday pay for each 12-month period; $14,000 compensation for humiliation, loss of dignity and injury to feelings; three months’ lost remuneration for unjustified dismissal; and a $1,000 penalty for breaching the Minimum Wage Act 1983. The Authority found ADL failed to follow basic redundancy procedure and did not consult Mr Xu before deciding to make his position redundant.
Legal considerations for employers: Employers must pay the minimum wage from the moment an employment relationship begins, even if the employee is in a learning phase. Any period where an employee is performing work for the employer’s benefit constitutes employment and must be paid accordingly. Before making a position redundant, employers must follow a proper process including consultation, provision of information about the business case, and genuine consideration of the employee’s feedback – failure to do so renders dismissal unjustifiable.
Zheng Wang v Jasmine Catering Limited – Enforcement of previous determinations and award of interest
The Authority had previously determined that Jasmine Catering Limited owed Mr Wang wage arrears and legal costs totalling $9,463.76 (determination issued 25 May 2023) and costs contributions of $6,321.56 (determination dated 23 June 2023). Jasmine Catering failed to pay any of this money. Mr Wang applied for a compliance order to enforce the previous determinations. The company had since been placed in liquidation by Inland Revenue and was likely to be removed from the Companies Register.
The Authority issued a compliance order requiring Jasmine Catering to pay the full amount outstanding ($11,789.12 gross, including interest accrued from 23 June 2023 to 26 May 2026 at $1,503.80). The Authority also awarded ongoing interest at the prescribed rate from 24 June 2026 until payment in full. The Authority noted that the Employment Court’s challenge process had concluded, meaning Mr Wang was now entitled to be paid. A warning was issued that further breaches could result in referral to the Employment Court for enforcement action, including potential imprisonment or fines.
Legal considerations for employers: Failure to comply with ERA determinations is a serious matter. The Authority has power to issue compliance orders and can refer matters to the Employment Court for enforcement, which may result in contempt proceedings, fines, or sequestration of property. Interest also accrues on unpaid amounts, making the final cost to the employer significantly higher than the original award.
Volha Daniliuk v For The Boys Limited – Costs award following unsuccessful personal grievance claims
In an earlier substantive determination, Ms Daniliuk’s claims for unjustified disadvantage and breach of good faith were unsuccessful, but the Authority found For The Boys Limited (FTB) had breached the Wages Protection Act by withholding final pay and ordered a $2,000 penalty payable to Ms Daniliuk. Both parties now sought costs. Ms Daniliuk argued FTB had not achieved unqualified success and costs should be reserved pending her challenge to the Employment Court. FTB argued Ms Daniliuk had unreasonably rejected a Calderbank settlement offer made in December 2024 worth over $40,000 (substantially more than the penalty awarded), and that this justified a costs uplift.
The Authority awarded FTB costs of $7,250 (to be paid in two instalments of $3,625 each over 28 and 60 days). While the Authority acknowledged FTB did not achieve unqualified success due to the penalty award, it applied an uplift of $1,000 to the notional daily tariff to reflect Ms Daniliuk’s unreasonable rejection of the valid and reasonable Calderbank offer. The offer was made well in advance, did not contain unreasonable non-monetary terms, and was substantially higher than the amount ultimately awarded. Ms Daniliuk was represented by counsel and knew the risks of non-acceptance.
Legal considerations for employers: Making a properly documented Calderbank offer (a without-prejudice settlement proposal) well in advance of hearing can significantly impact costs awards if the offer is rejected and the party rejecting it fails to achieve a better outcome at the Authority. Employers should ensure any settlement offer is clearly stated to be without prejudice and the consequences of rejection are made clear to the other party. Even if a party ultimately succeeds, failure to accept a reasonable offer may result in higher costs awards against them.
Raheel Reddy v Studio Image Limited – Unjustified dismissal for lateness without procedural fairness
Mr Reddy worked as a barber at Studio Image Limited from May 2023 until dismissal on 17 September 2024. On that day, he messaged to say he would be late to work by an hour or two due to a car accident. The owner, Mr Thapa, responded by message saying he would pay out Mr Reddy’s accrued leave and asking him to return tools by the next day. Mr Reddy objected, saying he had been given many chances in the past. Mr Thapa replied that he no longer wanted to keep Mr Reddy employed. Mr Reddy claimed unjustified dismissal. The respondent failed to attend the investigation meeting.
The Authority found Mr Reddy was dismissed (not resigned) and the dismissal was unjustified. Mr Thapa raised no concerns with Mr Reddy prior to dismissal, provided no opportunity to respond, and did not follow any procedural fairness process. The Authority awarded: 13 weeks’ lost wages ($14,121.90 gross); $10,800 compensation for humiliation, loss of dignity and injury to feelings (reduced by 20% for contribution due to Mr Reddy’s recent warnings about punctuality); and reserved costs. The Authority declined to award a penalty for breach of good faith as the personal grievance remedies adequately addressed the breach.
Legal considerations for employers: Even for serious conduct issues, employers must follow basic procedural fairness: raising concerns with the employee, allowing them a reasonable opportunity to respond, and genuinely considering their explanation before dismissing. Dismissing via text message without prior discussion, warnings, or opportunity to explain breaches the Employment Relations Act and exposes employers to significant remedies including lost wages and compensation. The minimum standard applies even to small businesses.
Natalie Butler-Smith v DG and DV Cavey Partnership – Unjustified dismissal based on pregnancy and return to work
Ms Butler-Smith worked as a part-time farm assistant from August 2022. She became pregnant, went on parental leave in mid-August 2023, and was due to return on 19 February 2024. On 13 February 2024, the Partnership told her they had decided to terminate her employment due to “health and safety issues arising out of her having a baby on the farm.” Ms Butler-Smith claimed unpaid work performed during parental leave (approximately two hours per month), lost wages while seeking alternative employment (13 weeks), the four-week notice period unpaid, and compensation for humiliation and injury to feelings. The Partnership did not attend the investigation meeting.
The Authority found the dismissal was unjustified. The Partnership provided no opportunity to discuss the alleged health and safety issues, made no genuine assessment of whether accommodations could be made (despite previously accommodating another employee’s return to work), and dismissed summarily without consultation. The Authority awarded: $192 for unpaid work during parental leave; $9,360 in lost wages (13 weeks at $24/hour, 30 hours per week); $2,880 for the unpaid notice period; and $20,000 compensation for humiliation, loss of dignity and injury to feelings. Costs were reserved.
Legal considerations for employers: Dismissing an employee returning from parental leave without consultation and without genuine exploration of how to accommodate their return is likely to be unjustified, particularly if the employer has previously made similar accommodations for other employees. Health and safety concerns must be seriously investigated and the employee must be given the opportunity to discuss potential solutions before dismissal is decided. The cost of remedies in dismissal cases can be substantial, including lost wages and significant compensation for emotional harm.
Devon Whitham v Brutalitees Limited – Unjustified dismissal of piercing apprentice for inadequate pay and procedure
Ms Whitham responded to a Facebook advertisement for a Body Piercing Apprentice in May 2024. She was told the role was unpaid during training but would become paid after about a month. After approximately one month, she began receiving payments calculated as 30% of each piercing performed. She submitted invoices to request payment and chased for payment when it was delayed. In September 2024, a Contractor Agreement was sent to her, which she signed after repeated requests. The respondent owner was absent in the United States for much of the period. On 19 September 2024, Ms Whitham was called to a meeting where she was subjected to abusive language and told to leave. She had received no prior warnings or notice that dismissal was contemplated.
The Authority found Ms Whitham was an employee (not a contractor), despite the Contractor Agreement. The work was integrated into the business, she had no commercial independence or ability to generate profit, she used employer equipment, her hours were set by the respondent, and the relationship involved training and supervision. The Authority rejected arguments that the second respondent was her employer personally, finding the first respondent (the company) was the employer. Ms Whitham was unjustifiably dismissed without prior notice or opportunity to respond. Awards included: $6,484.32 for unpaid wages plus $833.40 holiday pay; $7,523.75 for 13 weeks’ lost wages post-dismissal; $15,000 compensation for humiliation, loss of dignity and injury to feelings; and $750 penalty (split between Ms Whitham and the Crown). The Authority declined to grant leave to recover from the second respondent personally as insolvency had not been proven.
Legal considerations for employers: A written contractor agreement does not determine employment status if the practical reality shows an employment relationship – factors such as control over work, integration into the business, provision of tools and equipment, and the degree of supervision all point to employment. Failing to provide a written employment agreement, pay minimum wage, or comply with holiday pay obligations attracts penalties. Dismissal without any prior warning or procedural fairness is always unjustifiable and exposes employers to substantial remedies.