Summary Of ERA Determinations: Week of 10–16 August 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.
Belinda de Zwart v Landpower Group Limited – Unjustified disadvantage and dismissal in redundancy restructure
Ms de Zwart worked as General Manager People and Culture for Landpower for over three years. When the company faced financial pressures, it restructured the People and Culture team and disestablished her position. Ms de Zwart says the redundancy was procedurally unfair, that she wasn’t genuinely consulted, and that redeployment options weren’t properly explored. Landpower argues the restructure was genuine and financially driven, with no ulterior motive to remove her.
The Authority found Landpower had a genuine business reason for the restructure, but the process was rushed and consultation was inadequate. Ms de Zwart wasn’t given sufficient information, her feedback wasn’t genuinely considered, and only one redeployment option (a Customer Experience role at 36% of her former salary) was offered without proper exploration of alternatives like a vacant Australian management position. Landpower must pay Ms de Zwart $20,000 compensation for unjustified disadvantage.
Legal considerations for employers: Redundancies require fair process, not just genuine business reasons. Employers must provide affected employees with detailed information, genuinely consider their feedback, and actively explore redeployment options before concluding dismissal is necessary. Failing to properly consider alternatives can render even commercially sound redundancies procedurally unfair, leading to compensation awards.
Jonathan Rhodes v Barfoot & Thompson – Unjustified dismissal for medical incapacity without adequate inquiry
Mr Rhodes worked as a Senior Property Manager for Barfoot & Thompson (B&T), a real estate company. He suffered multiple head injuries, including a concussion that affected his ability to work full time. Medical advice recommended a gradual return to work on reduced hours. B&T received this clinical guidance but ignored it. In January 2024, despite knowing a specialist neurological assessment was scheduled within the month, B&T terminated his employment citing medical incapacity.
The Authority found the dismissal unjustified. B&T had not given Mr Rhodes a genuine opportunity to recover; continued requiring him to work full time despite concussion; offered only a full-time alternative role (inconsistent with medical advice); and made its dismissal decision before completing necessary medical assessment. While B&T was entitled to require a medical examination to resolve uncertainty, it chose not to exercise this discretion, then relied on that same uncertainty to justify dismissal. The Authority awarded Mr Rhodes $30,000 compensation for hurt, humiliation, and injury to feelings.
Legal considerations for employers: Medical incapacity dismissals require employers to give employees a genuine opportunity to recover, conduct thorough inquiry into prognosis, and genuinely consider alternatives—including medical examinations to resolve uncertainty. Employers cannot ignore clinical guidance they have received or treat medical uncertainty as justification for dismissal without first exploring available options to clarify the situation.
Shania Mackey v ShearingNZ Limited – Penalty for breach of settlement agreement
Ms Mackey and ShearingNZ reached a settlement agreement certified by a mediator under section 149 of the Employment Relations Act. The agreement required ShearingNZ to pay certain sums and provide a certificate of service. ShearingNZ failed to comply, claiming it believed Ms Mackey had breached the agreement first and therefore their obligations had been cancelled. Ms Mackey brought proceedings to enforce the settlement.
The Authority found ShearingNZ had deliberately breached the settlement agreement. While ShearingNZ held an honest but mistaken belief that the agreement had been repudiated, it made a deliberate decision not to comply. The Authority imposed a penalty of $1,000 on ShearingNZ—$500 of which is to be paid directly to Ms Mackey. This reflects the seriousness of breaching certified settlement agreements and the importance of maintaining confidence in mediated outcomes.
Legal considerations for employers: Certified settlement agreements under section 149 of the Act are binding and must be complied with. Breaches are taken seriously and can result in penalties. Even if an employer believes an employee has breached the agreement, the employer cannot unilaterally decide to stop complying with their own obligations; they must raise the issue with the Authority.
Yasodhara Scarborough v Sunrise Healthcare Limited – Costs not awarded due to late filing
The Authority had determined a personal grievance claim and reserved costs. The respondent, Sunrise Healthcare, failed to file costs submissions within the required 21-day timeframe. It filed 51 days late with an explanation that staffing changes and miscommunication had caused the delay. The company claimed it should still be entitled to costs as the successful party.
The Authority declined to award costs. Although there is no absolute rule preventing late costs applications, the Authority considers the reasons for delay, effect on the other party, and principle of finality. Here, a well-resourced employer with counsel representation failed to meet the deadline, waited over seven weeks before attempting to file, and provided only ordinary reasons for the delay. The significant passage of time meant finality of proceedings should take priority.
Legal considerations for employers: Strict timeframes for costs submissions must be respected. Well-resourced employers with legal representation are expected to comply with Authority directions or apply for extensions promptly. Delays of months in filing costs submissions will weigh heavily against the successful party, even if they ultimately win the underlying case.
Eliezer 1 & 2 Trust v Andrew Martin – Unenforceable penalty clause for failing to work notice period
Mr Martin resigned as a painter without working out his four-week contractual notice period. His employment agreement contained clause 5, which required him to pay the difference between his wages and the cost of external labour hired to cover his notice period. The Trust engaged a contractor at a retail rate and sought to recover $9,086.40 from Mr Martin for work done during the four weeks he should have worked.
The Authority found clause 5 unenforceable as an unconscionable penalty clause. The Trust could not establish a legitimate interest in recovering lost rental income from an employee’s failure to work notice—such business risks are foreseeable costs of operating rental properties. Additionally, the clause was unfairly one-sided: the Trust could terminate Mr Martin during the 90-day trial period without cause, yet could penalise him heavily for not working notice. The imbalance between employer and employee rights, combined with the harsh and disproportionate consequences, made the clause unconscionable and unenforceable.
Legal considerations for employers: Penalty clauses in employment agreements must be proportionate to legitimate business interests and cannot be enforced if they are unconscionable or overwhelmingly unfair. Courts scrutinise such clauses closely given the inherent power imbalance in employment relationships. Employers should ensure any penalty provision is reasonable, clearly justified by genuine business loss, and fair in context of other rights in the agreement.
William Morgan v JML Construction Limited – Constructive dismissal for failure to pay wages
Mr Morgan worked as a carpentry apprentice for JML Construction. From August to September 2025, the company failed to pay him for five weeks of work. Despite repeatedly requesting payment and continuing to work in hope of being paid, Mr Morgan eventually resigned. He also claims JML failed to pay his annual holiday entitlements and KiwiSaver employer contributions when his employment ended. JML argues the financial difficulties were temporary.
The Authority found Mr Morgan was constructively dismissed. An employer’s fundamental obligation to pay wages is core to the employment relationship; failure to do so is a serious breach that reasonably leads to resignation. Mr Morgan is owed $13,164.22 gross (wages, holiday pay, and KiwiSaver contributions) plus interest of $432.27 to 11 August 2026. The Authority awarded $18,000 compensation for distress and imposed a $1,000 penalty for breaches of the Wages Protection Act and Holidays Act. Given JML may be unable to pay, Mr Morgan has been granted leave to recover directly from director John Luxton personally.
Legal considerations for employers: Failing to pay wages in full and on time is a fundamental breach of the employment relationship and can constitute constructive dismissal. Employers must prioritise wage payments and cannot rely on temporary financial difficulties to excuse non-compliance. Directors and shareholders may face personal liability for wage arrears if the company defaults, so employers should ensure robust systems are in place to meet wage obligations.
Tablebloom Limited (in Liquidation) v Edmund Kurt Tanner and Celia Tanner – Consent determination
Following mediation on 27 July 2026, Tablebloom Limited and the Tanners reached a settlement and requested the Authority issue a consent determination to record the agreed terms.
The Authority issued a consent determination recording the settlement by agreement of the parties.
Legal considerations for employers: Mediation and settlement agreements allow parties to resolve employment disputes on mutually acceptable terms without the uncertainty and cost of a full investigation. Parties should actively pursue settlement discussions to avoid contested hearings.
LUO v BAZ – Unjustified dismissal in unfair redundancy restructure
LUO worked as a marketing and e-commerce specialist for small business BAZ. The company underwent a restructure due to loss of wholesale revenue. Directors Mr G and Ms B disestablished LUO’s role and offered her a new Customer Service Manager position that was substantively similar to her existing role. The process lacked documentation, clear communication, and genuine consultation. LUO also alleged bullying and sexual harassment; claims that were not substantiated or not properly raised.
The Authority found LUO was unjustifiably dismissed through redundancy. While there was a genuine financial reason for restructuring, the process was procedurally deficient: no written proposal was provided, consultation was vague and largely verbal, no notes were taken of key meetings, and no timeframe was given. The “new” role was practically identical to LUO’s existing position, so offering her the right to apply for it rather than redeploying her was unreasonable. The bullying and sexual harassment claims failed due to insufficient evidence. The Authority awarded LUO $11,000 compensation for hurt and humiliation.
Legal considerations for employers: Even small employers must conduct redundancies fairly. This requires written proposals, clear communication of changes, genuine consultation with time to respond, documented meetings, and meaningful consideration of feedback. When a restructured role is substantially the same as an existing position, employees should be redeployed rather than required to reapply. Vague, poorly documented processes leave employers exposed to unjustification findings.
AWR v TQW and WQT – Costs for non-compliance with settlement agreement
AWR obtained a settlement agreement certified by the Authority. TQW and WQT failed to fully comply with the orders. AWR filed for a compliance order and sought costs. By the time of the hearing, the parties had come into compliance, so AWR withdrew the compliance claim but continued seeking costs for the legal work required to enforce the settlement.
The Authority awarded AWR costs of $962.80. TQW and WQT were jointly and severally liable. The Authority noted that AWR had made multiple genuine attempts to resolve the matter before filing proceedings and was repeatedly put on notice that non-compliance would cause legal expenses. The respondents failed to file any costs submissions despite multiple opportunities.
Legal considerations for employers: Settlement agreements must be complied with promptly and fully. Failure to do so can result in additional legal proceedings and an award of costs against the non-complying party. Employers should ensure they understand settlement terms and take immediate steps to comply.
Heather Howard v Independent Timber Merchants Co-operative Limited – Costs award with uplift for rejection of settlement offer
Howard was unsuccessful in her personal grievance claims against ITM. The company made a reasonable Calderbank settlement offer on 29 October 2025, which Howard rejected. Howard’s claims lacked a strong evidential basis and had little prospect of success from the outset. The company sought costs, including an uplift to reflect rejection of the reasonable offer.
The Authority awarded ITM costs of $8,312.50 (representing a one-third uplift from the standard daily tariff) plus disbursements of $307.63. The uplift was justified because Howard was wholly unsuccessful, the claims had weak prospects, a reasonable settlement offer was rejected, and the company incurred significant costs defending wide-ranging serious allegations. However, the Authority acknowledged Howard’s financial circumstances and permitted payment in two instalments over 90 days rather than the standard 28 days.
Legal considerations for employers: Employers who successfully defend employment claims may recover costs, with higher awards possible if a reasonable settlement offer was rejected. Calderbank offers should set out consequences of rejection and be made before an investigation meeting to be most effective. Successful employers should always consider seeking costs, but the Authority will adjust awards based on the claimant’s conduct and circumstances.
