When cultural commitments are in the contract, employers must walk the talk
New Zealand's Employment Court has ruled that cultural values embedded in employment agreements are enforceable obligations employers must uphold during restructuring.
In a judgment delivered on 19 March 2026, Judge M S King found that the Pacific Island Business Development Trust failed to honour Pasifika values it had written into its own employment contracts when it made two senior employees redundant in June 2023.
The Trust is a not-for-profit supporting Pasifika people in business and employment. It had expressly incorporated five Pasifika values into its position descriptions and employment agreements: respect, family, community, reciprocity, and religion and spirituality. John Faitala, general manager for programme services and clients since around 2020, and Vahanoa Vea, who joined the Trust in 2018 and had been corporate services manager since 2021, were both selected partly for their cultural capability and understanding.
In early 2023, the Trust appointed a new chief executive, Ms Los'e, to lead an organisational reset. The Trust had been receiving external employment relations advice from March 2023. On 24 May 2023, staff were presented with a restructure proposal that would disestablish five roles, including those held by Faitala and Vea, and create nine new positions.
Both employees raised concerns during consultation. Faitala requested a third-party report he believed conflicted with the Trust's data. The Court also found the Trust had withheld a capability matrix the chief executive had prepared prior to the restructure. He called the process a "tick-box exercise" and said his questions went unanswered. Vea asked for more time, queried where her functions fit in the new structure, and expressed interest in two proposed roles. She was told she lacked the requisite skills, though no formal selection process was documented.
At individual meetings on 16 June 2023, Ms Los'e told Faitala she would respond to his feedback in writing that same day, a commitment she reiterated a further four times during a recorded conversation. She never followed through. Both employees received termination letters that same day. Vea later said she had also raised interest in a customer service manager role at her meeting, which Ms Los'e denied. Ms Los'e had no meeting notes; Vea produced a diary entry supporting her account.
The Employment Relations Authority found both dismissals unjustified and awarded $25,000 each for humiliation and distress, plus one month of lost wages for Faitala and two months for Vea. It found no evidence that either plaintiff had sought a reference from the Trust, despite both claiming its absence had hindered their job search, and rejected their separate unjustified disadvantage claims.
The Employment Court disagreed. Judge King found that the Trust had unjustifiably disadvantaged the plaintiffs through the same conduct that underpinned the dismissal: withholding documents, failing to meaningfully address employee concerns, not genuinely exploring redeployment as required under the employment agreements, and breaching its obligation to uphold Pasifika values. While those disadvantage grievances arose from the same facts as the dismissal, meaning remedies were assessed globally rather than cumulatively, the Court found the Authority had erred in refusing to recognise them as established grievances at all. The Court concluded both employees would likely have been redeployed had a fair process been followed. Compensation increased to $30,000 for Faitala and $45,000 for Vea. Lost wages were extended to six months for Faitala, less the one month already ordered by the Authority and any other income he earned during the period, and twelve months for Vea, less the two months already ordered and a four-week ex gratia payment the Trust had made on termination. The $1,000 awards each for loss of work vehicles and phones were set aside, as those items were tools of trade not intended for personal use.
In the year following dismissal, Faitala earned around $52,000 in contract work, well below his previous $170,000 salary. Vea, the family's primary income earner with four dependent children and a husband unable to work, remained unemployed at the time of the hearing. Both were open with prospective employers about their grievance. A recruitment consultant called by the Trust testified: "Most employers are weary of somebody who has sued a previous employer before." The Court found their transparency reasonable and did not reduce their awards on that basis.
No penalties were imposed. The Court accepted the Trust's failures stemmed from inexperience rather than deliberate misconduct, noting Ms Los'e's genuine remorse.
This judgment confirms that cultural commitments in employment agreements carry legal weight. Redeployment clauses require genuine engagement, and consultation that leaves questions unanswered will not meet the good faith standard.
