ERA finds graduate who relocated for law firm job was unjustifiably dismissed after $1,200 exit
A law firm has been ordered to pay more than $20,000 to a law graduate after the Employment Relations Authority (ERA) ruled that he had been unjustifiably dismissed, rejecting the firm's claim that he was never its employee.
The graduate, who holds a BA/LLB, applied in early 2025 for a role that the firm advertised on Student Job Search. The role offered $24 an hour for 30 to 40 hours of work a week.
After several meetings with the firm's sole director, the graduate turned down an offer from another law firm and moved from Hamilton to Auckland.
On 1 April 2025, the director emailed the graduate: "We are pleased to offer you employment … Your employment will commence on Monday the 7th of April 2025." The firm's office manager also requested the graduate's bank account details "for salary purposes" and a completed tax form.
The graduate began attending the office on 7 April but did not receive an employment agreement until his third day. According to the determination, the director told him that employees at the firm typically volunteered for three to four weeks.
The draft agreement listed a later start date, an administrative role and no guaranteed hours. Its pay rate also fell below the minimum wage once employer KiwiSaver contributions were deducted from his pay.
When the graduate raised these concerns on 10 April, the director refused his request for $30 an hour in light of the reduced 30-hour week. He was then given a choice between three more weeks of work or a $1,200 payment to leave.
He took the payment and signed a letter drafted by the director, which stated that he "will not taking [sic] this matter to Employment Relationship Authorities".
'Not compelling'
The firm argued that the parties were still in negotiations, and that the graduate's employment depended on government flexi-wage funding being approved.
But the ERA rejected this argument.
"[The firm's] narrative of an extended period of negotiations over a three plus week period was not compelling," ERA member Nicola Craig said in the ruling.
She noted that the director accepted under cross-examination that he had offered the graduate a role, and that he thought the graduate had accepted it.
Under the Employment Relations Act 2000, employees include a "person intending to work," defined as someone who has been offered, and accepted, work as an employee.
"I conclude there was likely oral offer and acceptance by 17 March 2025 with sufficient articulation of core terms," Craig said. If not, she added, the 1 April communications "certainly resulted in an employment relationship being established."
The ERA also found that the signed letter did not stop the graduate from pursuing his claim, noting it lacked the usual "full and final settlement" wording.
'Moved too soon'
The ERA found it more likely that the director, who had become frustrated with the graduate, raised the possibility of him leaving the firm. Both options put to the graduate ended his employment.
"There was an element of sending away in both the options put up on [the firm's] behalf as both involved employment finishing," Craig said. In the alternative, she found it amounted to a constructive dismissal.
She also found that the firm had several opportunities to raise its reduced hours and its withdrawal from criminal law work before the graduate started. It failed to do so, "whether through lack of time, planning or unwillingness to front up."
"Rather than looking for a resolution which met good faith requirements to be active and constructive in establishing and maintaining a productive employment relationship, [the firm] moved too soon to end the relationship," the ERA said.
The director told the ERA that the $1,200 was a gesture of goodwill, not an employment settlement.
The ERA heard that the graduate experienced stress, anxiety and a loss of confidence, and withdrew from family and friends.
It ordered the firm to pay the graduate $5,509.74 in lost wages, after deducting the $1,200 already paid, and $15,000 in compensation for humiliation, loss of dignity and injury to feelings. He had sought $30,000.
The ERA found no blameworthy conduct on the graduate's part that contributed to the situation. Costs were reserved.
