Company fails in its bid to flip a costs award against a former migrant worker it underpaid for months
A nail salon company has been ordered to pay $8,600 in legal costs to a former employee after the Employment Relations Authority (ERA) rejected its bid to have costs awarded in its own favour, ruling that the applicant's partial success was sufficient to entitle him to a costs contribution.
ERA Member Claire English applied the Authority's standard daily tariff, $4,500 for the first hearing day and $3,500 for each subsequent day, arriving at $8,600 for the investigation meeting in the case of A v B.
The employer argued that costs should not be awarded to the applicant at all, and that it should instead receive costs, on the basis that the applicant had failed to make out his personal grievance claims.
The Authority was unmoved. While acknowledging that the applicant did not succeed on all his claims, English found that he had prevailed on the substantive issues of wage arrears and holiday entitlements.
"Partial success is still success," she wrote. "In the round, the applicant was the successful party and is therefore entitled to an award contributing to his costs."
The Authority also declined to award either party an uplift. The employer had sought a $5,000 uplift for time spent on the applicant's unsuccessful personal grievance claims, while the applicant had sought a $900 uplift for the respondent's failed counterclaims.
English found that neither adjustment was warranted given the overall picture, with both parties having pursued claims that ultimately failed.
Requests by both sides for a further $500 allowance for costs submissions were also declined, consistent with what the Authority described as the principle that costs awards should remain modest.
The employer is required to pay the $8,600 within 28 days of the determination.
Employment dispute
The costs ruling followed a substantive determination issued in February 2026, which ordered the employer to pay the applicant more than $18,900 in outstanding wages and holiday entitlements.
The applicant, a Vietnamese nail technician, had arrived in New Zealand in December 2022 to work at the employer's Rotorua salons under an employment agreement promising $28 per hour.
He was instead paid below that rate and directed to perform work unrelated to his role, including construction, furniture repair, and vehicle repainting at the personal properties of the company's owner.
At one point, he and his wife were living inside a Browns Bay nail salon, sleeping near stored chemicals and using public bathrooms.
After raising concerns about his wages and unpaid taxes, the applicant went on sick leave. The employment relationship broke down and the employer wrote to him in June 2023 stating it had accepted his resignation.
The applicant subsequently filed personal grievance claims, which the ERA dismissed as out of time, having found that his employment had effectively ended earlier when he began working for a new employer in Tauranga.
His claims for wage arrears were upheld. The Authority found the employer had no legal basis to reduce his pay below the agreed contractual rate, and ordered it to pay $16,217.40 in wage arrears, $1,806 for public holiday work, and $896 for untaken alternative holidays.
The employer's counterclaims, which sought more than $145,000 for alleged misrepresentation, reputational damage, and lost profits, were dismissed in full.
