Summary Of ERA Determinations: Week of 6–12 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.
EQX v KiwiRail Limited — Interim reinstatement granted pending substantive hearing
A Container Terminal Operator employed by KiwiRail was assessed as “Permanently Unfit for Duty” due to poor diabetes control and untreated sleep apnoea, leading to medical retirement in January 2026. The employee sought interim reinstatement, arguing there were serious questions to be tried about whether he was properly assessed as permanently unfit and whether permanent reinstatement was practicable. KiwiRail argued he was currently unfit for duty and permanent reinstatement was impractical given safety-critical railway work.
The Authority granted interim reinstatement to the payroll, effective by 15 June 2026. The Member found there was a seriously arguable case that KiwiRail had not done enough to confirm the employee was “Permanently Unfit for Duty” in accordance with the National Standards for Health Assessment of Rail Safety Workers. Medical evidence released after dismissal indicated improvement in the employee’s health conditions. The balance of convenience favoured interim reinstatement: the employee had received a medical retirement payment of 261 days and risked financial hardship, while health and safety risks would be managed by continued application of the Standards. A substantive investigation is scheduled to resolve the personal grievance claim.
Legal considerations for employers: Employers in safety-critical roles must follow regulatory standards properly and ensure all relevant medical information is gathered before making final dismissal or retirement decisions. If standards allow for reassessment or improvement, employers should not rush to terminate. Interim reinstatement may be granted where the substantive case is seriously arguable and the employee faces hardship, even in high-risk roles, provided safety standards are maintained.
McDonald v Traffica Roading Services Limited — Unjustified dismissal; compensation awarded despite contribution
A foreman was dismissed on the spot following a heated verbal exchange with the company director about work performance and conduct. The employer alleged Mr McDonald had a pattern of poor behaviour, including road rage incidents and abusive language toward colleagues. A formal warning letter issued months earlier cited serious misconduct and warned that dismissal could follow if behaviour did not improve. Mr McDonald claimed he was under personal stress and that his dismissal lacked procedural fairness.
The Authority found Mr McDonald was unjustifiably dismissed. Although he had received a formal warning, Traffica failed to provide a fair process before dismissal: it did not raise concerns with him immediately before the dismissal decision, gave him no opportunity to respond to the director’s concerns about his language in the final confrontation, and made the dismissal decision on the spot. Procedural fairness was lacking. The Authority awarded $9,000 in compensation for humiliation and loss of dignity and $3,800 in lost wages (one month, reflecting the likelihood of further confrontation). However, a 40% reduction was applied for contribution, as Mr McDonald’s inappropriate language and defensive attitude toward work instructions materially undermined trust in the employment relationship.
Legal considerations for employers: Before dismissing an employee, even when there is a pattern of concerning behaviour, raise specific concerns, give the employee a reasonable opportunity to respond, and genuinely consider their explanation. A dismissal decision made in the heat of an argument, without following proper process, is vulnerable to challenge. Even where employee misconduct is found, employers must follow fair procedures or face liability for unjustified dismissal, though contribution may reduce the award.
Seymour v Hilton Haulage Limited — Costs of $8,500 awarded to successful respondent
Mr Seymour brought an unjustified disadvantage claim against Hilton Haulage but was unsuccessful. Costs were reserved. Hilton sought an uplift in costs above the standard notional daily tariff, citing ambiguity in the applicant’s pleadings across two amended statements of problem, complications arising from the advocate performing a dual role as witness and counsel, an eleventh-hour change to support person availability, and repeated misrepresentations of evidence in closing submissions and novel issues in the closing reply.
The Authority awarded Hilton costs of $8,500, an uplift from the notional one-and-a-half-day tariff of $6,250. The Authority accepted that the applicant’s pleading ambiguities did require the respondent to incur additional costs to engage with all potential claims and remedies. However, the Authority declined to award the full $16,000 claimed, noting that amendments to pleadings in response to case management directions are a normal feature of Authority proceedings and do not by themselves justify substantial uplifts. The Authority also noted Mr Seymour claimed financial hardship and reserved leave for the parties to agree payment by instalments.
Legal considerations for employers: Pleadings should be clear and specific. Ambiguity in claims and remedies can increase costs for the respondent employer, and the Authority may award a costs uplift to reflect that. However, normal procedural amendments do not automatically justify large cost increases. If an employee is unsuccessful and faces a costs order, financial hardship may be a basis for negotiating payment terms, though the order itself remains enforceable.
Watkins v Tautoko Mai Sexual Harm Support Services Trust — Dismissal for medical incapacity justified
Ms Watkins, a social worker, was dismissed on 11 September 2024 after eight months of continuous sick leave. A prior investigation into her transport of a client had concluded with the trust accepting her explanations and taking no disciplinary action. However, Ms Watkins remained on sick leave, citing stress and anxiety from the investigation process. She set conditions for returning to work, including changes to reporting lines and protocols, but did not provide medical information or a return-to-work date. Medical certificates stated she was unable to work but did not specify a diagnosis or prognosis. The trust issued a medical incapacity notice and terminated her employment.
The Authority found the dismissal was justified. Although the initial investigation raised concerns about Ms Watkins’ conduct, those concerns were resolved in her favour, and she had not been disadvantaged by the investigation process. On dismissal for medical incapacity, the Authority found the trust had acted fairly: it consulted with Ms Watkins over several months, made reasonable concessions, engaged in mediation, and gave multiple opportunities for her to provide medical information or a return-to-work date. Ms Watkins did not provide the information the trust reasonably required to keep her position open indefinitely. The trust was entitled to consider the operational and financial strain of her prolonged absence. No unjustified dismissal or disadvantage was found.
Legal considerations for employers: When an employee remains on sick leave for an extended period, employers may fairly terminate on medical incapacity grounds if they have consulted genuinely, given the employee opportunity to provide medical information and a return-to-work date, and explored reasonable accommodations. However, the employee must engage in good faith dialogue. If an employee sets unachievable conditions for return (such as requiring managers to admit fault or resign), the employer may proceed with dismissal provided fair process is followed. An employer is not required to hold a position open indefinitely without clear medical evidence of recovery prospects.
Dos Santos v Nresh Group Limited — Unjustified dismissal and disadvantage; $25,000 compensation awarded
Mr Dos Santos, a migrant worker on a work visa, was employed as a construction worker by Nresh Group. He worked in harsh conditions on a Whangarei project and claimed the director made threatening comments about firing him and keeping his visa if he did not comply. He was dismissed on 4 June 2024 after a six-minute meeting, with a letter citing serious misconduct, poor conduct, and road rage incidents, some over a year old. Mr Dos Santos had not been given a formal written warning or procedural opportunity to respond before dismissal. He also claimed underpayment of wages, incorrect holiday pay, and failure to provide employment records.
The Authority found Mr Dos Santos was unjustifiably disadvantaged by a hostile work environment created by threats of dismissal and visa cancellation. He was also unjustifiably dismissed due to major procedural failures: no formal warnings were documented, no fair opportunity to respond was given before the dismissal decision, and the six-minute dismissal meeting was inadequate. The Authority awarded compensation of $25,000 ($20,000 for dismissal, $5,000 for disadvantage), reimbursement of $1,440 in lost wages for three months, and arrears of $2,698.15 for wages not paid for minimum contracted hours. A 40% reduction for contribution was not applied because the dismissal process was so fundamentally flawed. The Authority also awarded penalties totalling $1,500 for breaches of statutory record-keeping obligations and breach of good faith, with half payable to Mr Dos Santos and half to the Crown.
Legal considerations for employers: Dismissal based on conduct must follow a fair process: document concerns, raise them with the employee, give a genuine opportunity to respond, and consider the response before deciding. Threats relating to visa cancellation or employment are likely to breach the duty of good faith and create unjustified disadvantage. Failing to keep employment records and failing to follow basic procedural fairness in dismissal can result in substantial compensation awards and penalties, particularly where the employee is vulnerable (e.g., a migrant worker). Fair treatment protects both the employee and the employer.
NZALPA v Jetconnect Limited — Training bonds breach Wages Protection Act for pilots holding type rating
Jetconnect employed two pilots, Mr Nicholas and Mr Rosser, both of whom already held Boeing 737 type ratings. Jetconnect required them to enter into training bonds for $37,000, repayable on a pro-rata basis if they left within 36 months. The bonds covered the cost of Jetconnect-specific initial training required under the airline’s CASA approval obligations. Both pilots left before completing 36 months and were required to repay portions of the bond. The union and pilots argued the bonds were unlawful employment premiums under section 12A(1) of the Wages Protection Act 1983. Jetconnect argued the bonds reflected a legitimate training cost and personal benefit (CASA approval and flying hours) to the pilots.
The Authority found the training bonds breached section 12A(1) of the Wages Protection Act as unlawful employment premiums. Although the pilots did not hold CASA approval for Jetconnect’s specific operation before employment, the training they received did not result in a portable, personally transferable benefit. CASA approval was operator-specific and non-transferable; the pilots could not use it with a new employer and would have to undergo similar training again. The 50 additional flying hours gained were a normal incident of employment, not a distinct personal benefit. Jetconnect benefited by fulfilling its regulatory obligations, but the pilots obtained only the right to work for Jetconnect. The bonds were made a condition of employment, and Jetconnect sought recovery of the premium through wage deductions. Mr Nicholas and Mr Rosser are entitled to recover the premium amounts they have paid. Jetconnect cannot recover outstanding bond amounts. The Authority applied the costs presumption (costs lie where they fall) as the matter involved collective agreement interpretation.
Legal considerations for employers: Training bonds must reflect a genuine, portable personal benefit to the employee (such as a recognised qualification or transferable skill) to avoid being classified as an unlawful employment premium. If training is specific to your business and non-transferable, courts are unlikely to uphold a bond requiring the employee to repay costs if they leave within a set period. Regulatory compliance training required by law is normally an employer cost, not something employees should bear if they leave. Always seek legal advice before implementing training bond arrangements, particularly in safety-critical or regulated industries.
