Summary Of ERA Determinations: Week of 15–21 June 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.
NZEI Te Riu Roa Inc v Secretary for Education — Pay equity settlement obligations and question of law referral
The Secretary for Education applied to refer a novel question of law to the Employment Court before the Authority completed its investigation. The core issue concerns whether an employer who has entered into a pay equity settlement has automatically met its obligations under the Pay Equity Act for 10 years from settlement, meaning no actionable breach can occur during that period. This is a new statutory framework that neither the Authority nor the Court has previously considered, and the parties disagreed on whether the Authority had jurisdiction to proceed.
Member Urlich agreed the question should be referred to the Court. She found this was an appropriate stage in the investigation — after one preliminary matter had been determined and was itself under challenge — to refer the novel legal question. The referral was approved on the basis that it involved interpretation of new legislation, was legally complex, and would likely apply to future cases once clarified. The Authority found it efficient to refer the question now rather than wait until after a full investigation, especially given the overlapping ground with the jurisdictional challenge already before the Court.
For employers, the case matters because the 2025 amendments say that claims covering the work of a settled pay equity claim cannot be raised for at least 10 years after settlement, and review clauses in existing settlement agreements became unenforceable. But this ERA decision shows there is still uncertainty about what that means in practice, especially whether it prevents enforcement-type claims or only prevents fresh/re-raised pay equity claims.
Rachel Hankins v Huhtamaki Henderson Limited — Unjustified dismissal and IT access termination
Rachel Hankins was employed on a fixed-term 12-month contract as an accountant to cover maternity leave, with an end date of 15 August 2025. On 6 August 2025, her manager sent an email stating her contract was ending and requiring her to return company property by midday on 8 August. Ms Hankins objected, saying no agreement had been made to vary the end date. On 12 August, her IT system access was terminated. She raised personal grievances claiming unjustified dismissal, unjustified disadvantage from losing IT access, and also made a protected disclosure claim about accounting procedures she had raised with management.
The Authority found Ms Hankins was unjustifiably dismissed. Although the fixed-term contract had genuine reasons (maternity cover), the employer terminated it prior to expiry without providing the required one month’s notice or payment in lieu. Ms Hankins was awarded $8,000 compensation for unjustified dismissal, $3,500 for unjustified disadvantage from IT access termination, and four weeks’ additional salary. The protected disclosure claim failed because her concerns about accounting processes did not amount to “serious wrongdoing” as defined in the Protected Disclosures Act.
Legal considerations for employers: Fixed-term employment agreements must be handled carefully — simply because a fixed term is set does not allow employers to end it early without notice or payment in lieu unless the contract permits this. Removing an employee’s IT access before the contractual end date can constitute unjustified disadvantage. Employers should ensure termination procedures comply with notice requirements and that any concern raised by employees is assessed under the correct legal frameworks before concluding it does not warrant protection.
Alliance Group Limited v Paul Brendan Brown — Removal to Court declined on prescribed cannabis policy
Paul Brown worked for Alliance as an A Grade Beef Slaughterman since 1987. He had previously disclosed that he was taking prescription cannabis as pain relief, as required by company policy. In July 2025, he returned a non-negative result on a random saliva drug test and received a final written warning. On 27 January 2026, he returned another non-negative result. Although Mr Brown declined a confirmatory urine test, Alliance treated this as a breach of its Drug and Alcohol Policy in a safety-sensitive workplace and ultimately dismissed him. He applied to the Authority claiming unjustified dismissal and sought reinstatement.
Alliance applied to remove the case to the Employment Court, arguing it raised an important question of law about whether employers can justify dismissing workers for disclosed prescribed cannabis use in safety-sensitive roles, and whether employers can set THC cut-off levels or rely on saliva tests for disciplinary action. Member Beck declined the removal. While the issue was somewhat novel, it was not truly an important question of law in the legal sense — it was fundamentally a question of whether Alliance had fairly applied its own policy to Mr Brown’s circumstances. No grounds of urgency or public interest justified removal, and the Court of Appeal has cautioned that removal should occur only in limited circumstances.
Legal considerations for employers: Employers with drug and alcohol policies in safety-sensitive environments should carefully consider how those policies apply to employees taking prescribed medications, including cannabis. Simply because an employee tests positive does not automatically justify dismissal; employers must assess whether the policy has been fairly applied, whether prior tolerance or knowledge of the prescription affects fairness, and whether the employee had a genuine opportunity to respond. Novel employment issues do not automatically warrant court determination; the Authority as specialist body often handles these matters appropriately.
Mary Bastion v Cashmere Primary Te Pae Kereru School Board — Costs award for struck-out jurisdiction claim
Mary Bastion raised an employment relationship problem against the School Board which the Authority struck out on jurisdiction grounds in December 2025. The Board sought costs of $6,750. Ms Bastion argued costs should not be awarded or should be reduced to nil because the Board unreasonably refused to attend mediation, and because the claim involved COVID-19 vaccination as a no-fault termination issue which was of public interest.
Member van Keulen awarded costs of $4,500 to the Board. He applied the daily tariff approach, assessing the on-papers application as equivalent to one day’s work given the complex legal arguments and the convoluted nature of the claim. The Board was entitled to recover costs as the matter was determined in its favour. While Ms Bastion argued the Board’s refusal to mediate was unreasonable, the Member found the refusal was reasonable given the jurisdictional issues at stake and the overall circumstances. No additional uplift was applied for complexity, as this had already been factored into the one-day tariff calculation.
Legal considerations for employers: Employers who successfully defend employment claims can recover costs from unsuccessful claimants. The refusal to attend mediation does not automatically expose an employer to a costs penalty if the refusal was reasonable in the circumstances. School boards and public sector employers should be aware that cases involving vaccine mandates may be approached carefully by the courts given public interest considerations, though this does not prevent costs awards where the employer prevails on a threshold issue like jurisdiction.
Hayden Sarcich v Fulton Hogan Limited — Interim reinstatement declined pending substantive hearing
Hayden Sarcich was employed by Fulton Hogan in a senior project management role. He was dismissed on 10 February 2026 after investigation found he had knowingly falsified and approved improper payment of a personal invoice (costing FHL approximately $12,000) and had accepted subcontractor-funded personal travel without proper disclosure under the Gifts and Gratuities policy. Mr Sarcich disputed the allegations and raised concerns about procedural fairness — including late disclosure of witness statements and an email he wrote that was discovered only after his dismissal. He applied for interim reinstatement pending the substantive hearing.
Member Kennedy-Martin declined interim reinstatement. While Mr Sarcich established an arguable case that his dismissal was unjustified (procedurally and substantively), the Authority found reinstatement weakly arguable at best. The critical issue was a 9 September 2025 email Mr Sarcich had sent to a subcontractor listing questions the subcontractor could ask FHL and its client — the same subcontractor who had funded his USA trip. This raised broader concerns about judgment and conflicts of interest that would not be easily managed through financial controls alone. The balance of convenience favoured FHL; compensation was available as an alternative remedy if Mr Sarcich succeeded, and the substantive hearing would occur within approximately three months.
Legal considerations for employers: Interim reinstatement is not automatically granted to dismissed employees who have an arguable case; the employer’s legitimate concerns about governance, integrity, and reputational risk are weighed against the employee’s prejudice. Procedural flaws in a disciplinary process do not necessarily make reinstatement practicable or reasonable, especially where the underlying conduct involves financial integrity or conflicts of interest. Employers should document carefully the basis for their concerns about an employee’s judgment, as these factors weigh heavily in deciding whether reinstatement is a viable remedy.
