Builder pays penalty over employment agreement and payslip breaches
A project manager's sprawling complaint against a West Auckland homebuilder collapsed on almost every front, Member Simon Greening determined on 31 March 2026.
Jonny Lu joined Cornerstone International Group Limited, trading as Stonewood Homes West Auckland (CIGL), as a project manager on 4 June 2024, on a salary of $80,000 per annum. He resigned on 14 January 2025 and filed his statement of problem with the Employment Relations Authority on 13 April 2025, raising a stack of claims: no written employment agreement at the outset, unfair bargaining, missing payslips, incorrect sick and annual leave payments, an unlawful deduction from his final pay, a requirement to work 50 hours a week in breach of his 40-hour contract, and personal grievances for both unjustified disadvantage and constructive dismissal.
CIGL conceded it had not given Mr Lu a written agreement when he started. He began work on 4 June 2024 and did not receive a written agreement until 8 October 2024 — roughly four months later. Member Greening found this breached s 65 of the Employment Relations Act 2000 and ordered a $500 penalty. On the payslip question, CIGL also admitted it had not responded to Mr Lu's January 2025 request in a timely manner, supplying the documents only after he had lodged in the Authority. That drew a further $500 penalty under s 130. Both were modest: where there are no aggravating features or evidence of deliberate breach, penalties generally sit at the lower end of the scale.
The Authority also found a third compliance failure: CIGL had not advised Mr Lu of his right to seek independent legal advice on the proposed agreement, in breach of s 63A(2) of the Act. No penalty was imposed because CIGL had otherwise bargained in good faith — it considered Mr Lu's questions, amended the agreement, and gave him sufficient time to seek advice independently.
The personal grievance claims fared worse. Mr Lu argued that a series of WeChat messages he sent to a manager in November 2024 — complaining he felt blamed for site problems and that someone had tried to take over his role — amounted to raising an unjustified disadvantage grievance. Member Greening disagreed. The messages were about how Mr Lu was managing his construction site, not about an action CIGL had taken that caused him disadvantage. Critically, Mr Lu had not made clear what he wanted the employer to address. The constructive dismissal claim similarly fell at the threshold: the only information Mr Lu provided to CIGL was three short bullet points in his statement of problem, which was insufficient to put the employer on notice and allow it to respond.
The deduction claim also failed. CIGL had withheld $346.71 from Mr Lu's final pay — covering a reimbursement he owed the company and a speeding fine incurred in a company vehicle. Clause 21.9 of his employment agreement provided: "You will repay to the Employer the balance of any loans or advances made by the Employer against your pay or leave entitlements, or any money otherwise owed to the Employer by you. The Employer is authorised to deduct from your final pay any monies owing to the Employer on termination." Mr Lu had been notified of the deductions in advance and did not contest the amounts when he eventually replied.
One claim did succeed in part. CIGL paid Mr Lu annual leave on 13 and 14 January 2025, but Member Greening accepted Mr Lu's evidence that he actually worked both days. The employer was ordered to pay annual holiday pay equivalent to two days, though no penalty was imposed given the misunderstanding between the parties about what was happening on those days.
In Lu v Cornerstone International Group Limited t/a Stonewood Homes West Auckland [2026] NZERA 195, Member Greening found Mr Lu had not raised a personal grievance for unjustified disadvantage or constructive dismissal in accordance with s 114 of the Act, and because he was unrepresented, costs lay where they fell.
