How an informal performance meeting became the centrepiece of a failed ERA claim
A Christchurch employer successfully defended claims of sexual harassment, bullying, and constructive dismissal in a ruling with direct lessons for HR managers.
In a determination dated 20 March 2026, the Employment Relations Authority dismissed all personal grievance claims brought by Liye (Lily) Zhu against her former employer, The Diligent Company Limited, trading as The Vaping Warehouse, and its director and shareholders.
Ms Zhu worked as a Sales Assistant at the Ferry Road store in Christchurch from 26 August 2023 until 15 March 2024. Her claims covered breach of employment agreement, good faith obligations, workplace bullying, discrimination, sexual harassment, unjustified disadvantage, adverse conduct for a prohibited health and safety reason, and constructive dismissal.
At the heart of the case was a disagreement about what actually happened day to day in a small, quiet retail store. Member Rachel Larmer found that Ms Zhu was an unreliable narrator who "presented her subjected thoughts and feelings as if they were objective facts."
On the sexual harassment claim, Ms Zhu alleged she had been forced to use what she termed "sexual marketing" outside the newly opened Papanui Road store. The Authority found that Ms Zhu admitted during proceedings that she had invented the term herself after her employment ended. What actually occurred was standard promotional activity, with staff standing at the store entrance or on the footpath outside to invite passersby in, something the director herself also did.
Ms Zhu had mentioned to Ms Shi on 16 January 2024 that a customer had asked for her phone number, but provided no further detail beyond that. It was only during the investigation meeting that she raised, for the first time, the additional allegation that the same customer had also made a suggestive remark, commenting they could have a "lovely night" after she declined to give him her number. Because no formal complaint of sexual harassment had been raised with the employer during employment, and because Diligent had no means of identifying or contacting the individual concerned, the Authority found no obligation on Diligent to act.
Separately, Ms Zhu claimed that light cleaning she performed at the Papanui store before it opened had caused her serious lung and respiratory disorders because she was not provided with PPE. The Authority found this unsupported by the evidence, noting the cleaning involved ordinary household products also used by the director herself.
The bullying claims were each examined and rejected. Allegations included a "plagiarism" accusation during a product knowledge exercise, being told by minority shareholder Zhongzhu (Eason) Peng that he was disappointed in her, being blamed for poor Christmas sales, not receiving a timely response to a sick leave notification, and "faulty allegations" being raised at a performance meeting. None was substantiated by the evidence.
The discrimination claim, which alleged a failure to provide training and equipment and delays by minority shareholder Zhongzhu Peng in responding to work queries, also failed, with the Authority noting that Ms Zhu was unable to identify any prohibited ground of discrimination.
The constructive dismissal claim centred on a conversation around 19 February 2024 in which director Yi Shi mentioned the possibility of closing the Ferry Road store if sales did not improve. The Authority found this was an informal discussion, not a proposal to dismiss. Ms Zhu's own resignation letter, sent on 1 March 2024, stated: "… my decision to leave is not a reflection of the management or the team, both of which I hold in high regard." The Authority found she resigned of her own free will, intending to return to her family in China.
Central to the case was the treatment of a meeting on 16 January 2024. Ms Zhu characterised it as a disciplinary meeting. The Authority found it was a legitimate informal discussion about sick leave reporting and performance improvement, with no disciplinary outcome.
The case points to several areas worth attention. An informal performance conversation, properly conducted and documented, does not constitute disciplinary action. Vague complaints raised with colleagues or in personal messages do not amount to a formally raised personal grievance. The content of the formal personal grievance letter also sets the boundaries of what can be investigated — claims raised for the first time in a statement of problem, witness statements, or during the investigation meeting itself fall outside the Authority's jurisdiction, as they were not raised within the applicable time limits.
The case further illustrates that a personal grievance is considered raised only when the employer actually receives it. Here, the letter bore a 14 April 2024 date but the Authority found it was not received until 29 May 2024. This determined which incidents fell within the applicable time limits — 90 days for most personal grievance claims, and 12 months for sexual harassment claims specifically.
All claims, including those brought personally against the director and the minority shareholder, were dismissed.
