Liquidation couldn't shield the directors from paying the unpaid wages out of their own pockets
Three company directors must personally cover unpaid wages and holiday pay, plus penalties, Authority member Robin Arthur ruled on 12 June 2026.
The case grew out of the collapse of a fuel infrastructure company that had been set up to do pipe and connection work for a large fuel retailer's New Zealand sites. Two brothers, employed from June 2024 as a civils manager and a civils operator, lost their jobs in December that year after the retailer halted its installation programme.
When the company was later placed in liquidation, the brothers were blocked from pursuing personal grievances because the liquidator declined permission. They instead amended their claim to go after the company's three directors personally for arrears of wages, notice and holiday pay, and asked for penalties.
A central question was when the employment actually ended. The company's Australia-based director said the workers were given notice on 20 November and paid to 29 November. The Authority preferred other evidence, finding in Manase v Marshall [2026] NZERA 374 that the jobs ended on 5 December 2024, when the operations manager phoned the workers to say there was no money and no more pay.
That operations manager, who was also a director at the time, argued he was not a person involved in the breaches. He said he had agreed to step down and described himself as "a mere messenger". The Authority rejected that, finding he had spent the previous week working through the situation with the two other directors and knew the workers were losing their jobs without being paid.
In a recorded call, the Australia-based director told one worker he did not have control of the company. In sworn evidence to the Authority, though, he accepted he had given an instruction to dismiss staff after the retailer pulled the work, and the Authority accepted that account as more likely to reflect what happened.
The third director took no part in the investigation. The Authority found the evidence still showed he knew the company could not pay wages and had not agreed to put money in, making him a person involved as well.
All three were found to be persons involved in the company's breaches of employment standards under the Employment Relations Act. The brothers were granted leave to recover the arrears directly from the directors on a joint and several basis, with the amounts owed set at $9,532.59 and $7,515.02 plus interest from 12 December 2024.
The Authority also noted a lawyer's letter, sent on the Australia-based director's instructions, which it inferred was intended to press the brothers into dropping their claims. No evidence reliably corroborated the allegations made in it.
Each director was ordered to pay a $4,000 penalty for aiding and abetting the breaches. The member said the amount recognised that "the breach was caused by intentional decisions rather than occurring inadvertently". Half of each penalty goes to the brothers and half to the Crown.
The directors were given 28 days to pay the arrears, with interest, and the penalties. Costs were reserved, with the parties encouraged to resolve any costs issue between themselves.
