Subtle pressure, not a formal notice, was enough to prove constructive dismissal
South Pole IP Holding's bid to frame a resignation as voluntary has failed, Judge J C Holden ruled on 21 August 2026.
The Employment Court challenge, brought by South Pole IP Holding (NZ) Limited, tested a determination from the Employment Relations Authority that a food technology engineer had been constructively and unjustifiably dismissed. The engineer joined the company in October 2022, working on research and development tied to the manufacturing operations of related entities. He reported to the company's director, who told the Court he became concerned about the pace of the engineer's work by May 2023.
The director raised those concerns with the employee directly at a meeting on 22 November 2023. Judge Holden found the director told the employee he could not continue in the role and said he hoped the employee would resign. An email sent later that day, written in Chinese, became a point of dispute, with the employee and the director later disagreeing over both what the message meant and what end date it specified.
The employee wrote back insisting he had never intended to resign, saying he liked the job and lived close to the company, and asked the director to provide a formal, signed dismissal notice in English if that was the company's intention. In a reply on 4 December 2023, the director wrote that he did not know how to proceed, telling the employee, “I do not know what to do to deal with you…” A further meeting in mid December failed to resolve the dispute, and a proposed meeting with the company's lawyer later that month did not go ahead after a misunderstanding over its location. The employee instead sought help from the Ministry of Business, Innovation, and Employment's mediation service.
Into the new year, the employee kept attending work but was no longer given tasks, and the company stopped paying him from 15 January 2024. On 23 January, the company's lawyer wrote requiring the employee's attendance at a meeting and raised the possibility of disciplinary action. Two days later, a doctor declared him unfit for work. He resigned on 26 January 2024, citing the toll on his mental health, and filed a personal grievance the following month alleging constructive dismissal.
Judge Holden found that the sequence, beginning with the November meeting and running through to the lawyer's January letter, showed the company had determined the employment would end and had pursued that outcome by withholding work and disengaging from the employee, breaching the employer's duty not to damage the relationship of trust and confidence, now part of the statutory duty of good faith. The judge found the employee was left “unable to be operational in the workplace and, evidently, was unwelcome there.”
The Court agreed with the Authority that the resignation amounted to a constructive dismissal, and that because no proper process preceded it, the dismissal was unjustified. The Authority's earlier awards remain payable, including $4,920 in withheld wages, $8,200 in annual leave, and $15,000 in compensation for humiliation, loss of dignity and injury to feelings, a sum South Pole had challenged but which the Court left undisturbed. The employee was also awarded costs on the challenge and the earlier stay application, with Judge Holden noting the agreed costs category may have been set too high, leaving the final amount to be resolved between the parties or referred back to the Court.
