Former 'casual' worker unjustifiably dismissed after ERA finds role was effectively permanent
An Auckland nutraceutical manufacturer has been ordered to pay a former production worker thousands of dollars in unpaid wages, compensation, penalties and costs, after the company failed to comply with earlier rulings and then lost a bid to halt enforcement.
The Employment Relations Authority issued this month a compliance determination after finding that the employer had breached previous orders issued in March and May 2025 and that there was "little sign" it intended to make payment despite the lengthy delay.
"Standing back and considering the matter overall, a compliance order should be made," said ERA member Sarah Blick in the order, exercising powers under the Employment Relations Act 2000 to require compliance with the earlier decisions.
Relationship found to be permanent, not casual
The compliance decision follows a detailed substantive determination in March 2025, also by Blick, which examined the real nature of the working relationship.
The company had argued the worker was a casual employee with no ongoing obligation to provide work between engagements. The Authority rejected that characterisation.
Time and pay records showed the worker performed production operator duties on what were effectively full‑time hours over about 10 months, typically working four to six days a week, often from 8am to 5pm or later.
"The nature of [the employee's employment] was clearly permanent, and not casual," Blick wrote in the decision.
"Rather than a genuine casual employment agreement existing, [the employer] offered [the employee] employment on that basis as a type of extended probationary period, and as a mechanism for avoiding paying minimum entitlements such as sick leave and public holiday pay."
The worker had originally responded to an online advertisement describing the role as "full-time" with set daytime hours and referring to probationary periods, reinforcing her expectation of stable, ongoing work.
During employment, she messaged her manager to ask if she was now a regular employee and whether she would need to give notice to resign, saying she felt "insecure."
But she was told there was no need to give notice and that permanent employment might follow good performance, but no permanent agreement was offered.
Unjustified constructive dismissal
Relations deteriorated as the employer raised concerns about performance and conduct, including mask‑wearing, jewellery in the production room, and an incident involving two missing boxes of product later found in another room.
Matters came to a head in May 2023. On what became the worker's last day on site, she was called into an unnotified meeting where performance concerns were discussed and she was told she would move to reduced, part‑time hours focused on cleaning work in the afternoons.
The ERA found this process fell well short of legal requirements. The worker was given no advance warning, no reasonable chance to seek advice or representation, and no fair opportunity to respond before a substantial reduction in hours and duties was imposed.
Blick found it was more likely than not that the worker was told it was her "last day" in her packaging role and that, if she was not unequivocally dismissed in that meeting, subsequent communications made the situation untenable.
When the worker later queried via message, "You want to fire me. Give me a reason," the employer denied using the words "fired" or "terminated" and urged her toward the reduced-hours cleaning arrangement.
The worker repeatedly said she wanted full‑time work and "can't accept" part‑time cleaning.
The Authority held that the withdrawal of hours and duties, following a procedurally flawed process, amounted to an unjustified constructive dismissal.
It awarded eight weeks' lost wages, $15,000 for humiliation, loss of dignity and injury to feelings, and imposed a $4,000 penalty for breaches of the Holidays Act relating to unpaid public holidays, half payable to the worker.
Court challenge no excuse for non‑payment
After the 2025 rulings, the employer challenged the substantive determination in the Employment Court and sought a stay of enforcement.
The ERA emphasised in its 2026 decision that a challenge to a determination does not operate as a stay.
It noted that the Employment Court had declined the stay application on 21 January 2026. Until set aside, the earlier rulings "remain valid determinations of the Authority."
With no payments made and no engagement in the compliance proceedings, the ERA ordered the employer to pay the earlier awards: eight weeks' wages, the $15,000 compensation, the $4,000 penalty (including the worker's half share), $5,500 in costs and application fees, plus interest from 22 January 2026 calculated under the Interest on Money Claims Act 2016.
It also awarded a further $500 in costs and an additional application fee for the compliance application itself.
