Summary Of ERA Determinations: Week of 5–11 October 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.
O’Connell v Geneva Finance Limited – Settlement agreement doesn’t bar directors’ duties claims
David O’Connell was employed as managing director of Geneva Finance Limited (GFL). When his role changed, he raised an employment problem and the parties reached a settlement in 2023 covering “all problems, claims or complaints” related to his employment. However, GFL later commenced District Court proceedings against O’Connell, alleging he breached his duties as a director by agreeing to waive interest on a loan to his own company. O’Connell argued the settlement agreement prevented this claim.
The Authority found the settlement only covered O’Connell’s employment-related grievance (redundancy), not claims about breaches of directors’ duties under the Companies Act. It ruled that the settlement did not prevent GFL from pursuing its District Court claim, as directors’ duties fall outside the Authority’s jurisdiction and were not contemplated by the parties when they settled.
Legal considerations for employers: Settlement agreements can only bar claims within their contemplated scope. If an employee is also a director, employers should be clear in settlement documents whether they’re releasing claims related to directorship duties or only employment matters. Without express language covering directorship issues, settlements won’t prevent companies from pursuing separate legal remedies for alleged breaches of directors’ duties.
Allison v Gregg Builders Limited – Redundancy selection flawed by poor process and unfair scoring
Dylan Allison was dismissed as a carpenter after Gregg Builders decided to reduce its workforce by five positions due to poor financial performance. The company used selection criteria to score employees, and Allison received a low score—predominantly because of his extended ACC-related absences following a shoulder injury. He was given minimal information about the selection process and scored lower than others in his role.
The Authority found Allison was unjustifiably dismissed. The company failed to establish that a carpenter position was actually surplus to operational needs and applied selection criteria unfairly—particularly in penalizing his legitimate medical absences. The process also lacked transparency: Allison wasn’t given comparable employee scores, wasn’t told how different positions were ranked, and had no meaningful chance to challenge the outcome. The Authority awarded $20,000 compensation for humiliation and loss of dignity.
Legal considerations for employers: Medical absences must be assessed fairly in redundancy selection—a single period of legitimate medical leave doesn’t indicate future attendance problems. Redundancy processes must be transparent: employees should receive sufficient information to understand how they were selected, be given comparative data, and have a genuine opportunity to challenge scores before dismissal is finalized. Failure to do so can render an otherwise substantively justified redundancy procedurally unfair.
Day v Shabani Law Limited – Graduate lawyer had employment status despite disputed terms
Moses Day accepted a job offer from Shabani Law Limited (SLL) to work as a law clerk at $24 per hour, 30-40 hours weekly. He relocated to Auckland and attended work on 7 April 2025. However, during his first week, disputes arose over his employment agreement, hours, and pay rate. SLL offered him either two weeks’ unpaid volunteer work or $1,200 to leave. Day reluctantly accepted the payment and left. He later claimed unjustified dismissal.
The Authority found Day was a “person intending to work” and had established an employment relationship with SLL by 7 April 2025, when he attended work after receiving an email confirming “we are pleased to offer you employment to commence on 7 April.” Despite SLL’s later arguments that he was only volunteering, the facts showed SLL treated him as an employee. The Authority found his dismissal both substantively and procedurally unjustified—SLL failed to provide promised documentation, gave contradictory information about his status, and offered him only punitive “choices,” both ending his employment. The Authority awarded $5,509.74 in lost wages and $15,000 in compensation for humiliation, anxiety, and distress.
Legal considerations for employers: Employment relationships can arise without a signed formal agreement if the parties’ conduct demonstrates mutual agreement to employ. Delaying provision of employment agreements, changing key terms (like start dates or hours), and failing to engage in genuine consultation may amount to constructive dismissal. Employers should finalize written agreements before an employee’s first day, clearly communicate any changes, and genuinely consult with employees when circumstances change rather than presenting take-it-or-leave-it options.
Golden Bay Cement v Amalgamated Workers Union – Overtime practice overrides strict contractual reading
Golden Bay Cement (GBC) sought to compel shift workers to work overtime during planned plant shutdowns, arguing their collective agreement allowed it. The union (AWUNZ) argued that for nearly 30 years, the parties had operated on an understanding that shutdown overtime for shift workers was only by voluntary agreement. The two parties were unable to resolve this during collective bargaining.
The Authority declined GBC’s application. While the collective agreement’s contractual language might support GBC’s interpretation, the Authority found that employment agreements operate relationally, not purely contractually. The parties had developed a long-standing practice of requesting volunteers for shutdown overtime and allocating it by skill, availability, and personal preference. Both parties had consistently applied this approach without GBC enforcing the strict contractual language. The Authority concluded that if GBC no longer accepts this shorthand arrangement, it must engage the agreement’s more complex mechanisms for determining when and how “overtime is shared equally” and when “certain circumstances” trigger overtime requirements.
Legal considerations for employers: Collective agreements must be interpreted in their relational context, not purely as strict contracts. If an employer and union have consistently applied a practice different from the literal wording for many years, courts will be reluctant to allow sudden enforcement of the strict contractual interpretation without re-negotiating with the union. Employers seeking to change long-established practices should do so through good faith bargaining rather than unilaterally invoking contract language, especially if the union has reasonably relied on the established practice.
Edmonds v Hutt City Council – Resignation letter can raise constructive dismissal claim in time
Eddie Edmonds raised a personal grievance for unjustified disadvantage on 12 March 2025 in relation to a prolonged audit and investigation into his use of council credit cards. In April 2025, after the council issued a preliminary decision to dismiss him for serious misconduct, Edmonds responded with a detailed letter challenging the decision and arguing HCC had breached good faith. He then resigned on 24 April 2025, stating he felt “forced” to resign due to systemic issues. The council argued his constructive dismissal claim was out of time because he hadn’t explicitly raised it before resigning.
The Authority found Edmonds had raised a constructive dismissal grievance in time. His detailed 8 April response letter to the council’s preliminary dismissal decision, combined with his resignation letter stating he felt forced to resign due to the council’s actions, collectively made clear he was disputing the dismissal and linking his resignation to those disputes. The council had sufficient information to know what it was responding to. The Authority rejected the council’s argument that employees must separately articulate a “constructive dismissal” claim; the substance of the complaint—that the employer’s actions had made employment impossible—had been raised.
Legal considerations for employers: Employees raising grievances don’t need to use precise legal terminology; employers can be on notice of a constructive dismissal claim through the totality of correspondence if an employee clearly indicates the employment relationship is untenable due to the employer’s actions. If an employee challenges a dismissal decision in detail and later resigns stating they feel forced to do so, employers should treat this as potential notice of a constructive dismissal grievance, not merely a standard resignation.
Wood v Chief Executive of Ministry for Primary Industries – Medical dismissal justified despite 18 months’ absence
Colin Wood, a Senior Quarantine Officer with 45 years’ service, took medical leave in late 2022 and had an inconsistent pattern of attendance through 2023. After surgery in January 2024, an occupational therapist recommended a graduated return-to-work plan requiring daily updates, rest breaks, and 11–16 weeks to full duties. MPI determined it could not reasonably accommodate these requirements and terminated his employment on medical grounds. Wood claimed the dismissal was unjustified and that MPI breached good faith.
The Authority found the dismissal was justified. MPI gave Wood a reasonable opportunity to recover (over 11 weeks post-surgery), conducted fair inquiries into his prognosis, and genuinely consulted with him about alternatives. While MPI initially seemed willing to accommodate the graduated return-to-work plan, once it understood the detailed requirements and timeframes, it reasonably concluded it could not sustain them given operational needs, financial costs, and long-term feasibility. The Authority did award $1,820 for unpaid wages for 17 days in September–October 2023 when Wood was cleared to work but not rostered, finding this a minor unjustified disadvantage.
Legal considerations for employers: Medical dismissals must follow a fair process giving employees reasonable recovery time, but fairness doesn’t require employers to accommodate all medical recommendations if they’re genuinely impractical or unsustainable. Employers should seek multiple medical opinions, engage occupational therapists where appropriate, explore alternatives, and clearly explain operational reasons for declining specific accommodations. Conversely, once an employee is medically cleared to work, employers should roster them promptly or risk unjustified disadvantage claims for lost wages.
Niu v New Windsor 2017 Limited – Migrant care worker awarded $25,000 after dismissal following visa approval
Jing Niu worked as a caregiver at a residential rest home for older people, employed under multiple conflicting employment agreements specifying different pay rates ($22.70, $29.66) and hours (30–40 per week). She paid cash at $20 per hour for some periods, received no payslips, and wasn’t given annual leave, sick leave, or public holiday entitlements as required by law. When she obtained an AEWV (Accredited Employer Work Visa), the employer claimed it couldn’t afford the contracted rate of $29.66 and hours, and dismissed her without investigation or opportunity to respond.
The Authority found Niu was unjustifiably dismissed and had been unjustifiably disadvantaged throughout her employment by non-payment of wages and leave entitlements. NW failed to provide sufficient hours, paid below agreed rates, breached minimum wage laws, and failed to pay annual leave, sick leave, and public holiday pay. When Niu’s visa was approved, NW terminated her without any disciplinary process. The Authority awarded $26,291.86 in wage arrears, $3,677.84 in holiday pay, $2,001.05 in sick leave pay, $1,668.38 in public holiday pay, $21,355.20 in lost wages (for 18+ weeks unemployment), $25,000 in compensation (reflecting her vulnerability as a migrant worker, isolation, and fear of deportation), and a $4,000 penalty for breaches of good faith. NW was also ordered to pay $2,000 to the Crown.
Legal considerations for employers: Migrant workers on visa-dependent employment are inherently vulnerable; employers have heightened good faith obligations to be transparent, keep accurate records, and pay all entitlements correctly. Providing multiple conflicting employment agreements, paying in cash without payslips, and failing to pay leave entitlements breaches multiple employment laws and shows reckless disregard. Dismissing an employee immediately after they secure visa status—especially without investigation—raises serious red flags for unjustified dismissal, particularly where the employer originally agreed to sponsor the visa. Small businesses operating care facilities face substantial penalties for systemic breaches affecting vulnerable workers.
UOP v SJO – Settlement reached on confidential terms
The parties in this case successfully resolved their employment dispute during the investigation meeting and reached a settlement. The Authority has made the settlement terms enforceable as an order of the Authority. The parties requested confidentiality, and the Authority granted this request, prohibiting publication of the parties’ names and settlement terms.
Legal considerations for employers: Settlement agreements can include confidentiality provisions, and the Authority will respect such requests where appropriate. This demonstrates the value of early engagement in mediation and settlement discussions, which can resolve disputes efficiently and on mutually agreed terms that remain private to the parties.
