Worker claims dismissal by text message after calling in sick for vehicle repairs

A builder claims he was employed by a construction company and unjustifiably dismissed via text message after calling in sick to repair his truck. The employer denied that the worker was an employee, claiming he was an independent contractor under an informal arrangement who left voluntarily. 

The worker sought reimbursement of wages, compensation, wage arrears, including holiday pay, and penalties for various breaches. 

The employer lodged a statement in reply but took no further part in the Employment Relations Authority’s (ERA) investigation process despite being properly served with notices.

Employment arrangement and work conditions

In 2023, the worker was employed by another company as a builder and was subcontracted to work for the employer on a building site in Onehunga. 

Around late January 2024, the employer ceased contracting that company, and the employer's general manager contacted the worker, asking him to work for the employer directly. 

The worker began working for the employer on 5 February 2024 as a builder and was paid $30 per hour, which was the same rate as his previous employment.

The worker stated he never received an employment agreement and claimed he requested a written one but was never provided with one. He claimed he worked consistently between 7 am and 4 pm, five to six days per week, averaging approximately 39 hours per week. 

His role consisted of attaching the framing to trusses, cladding, and finishing jobs, with his work being full-time and ongoing, and he did not undertake work for any other employer during his time with the employer.

The worker always showed up to work ready to complete tasks that he was required to do, did not have the ability to decide when and where he worked or to choose the tasks assigned to him, and was directly instructed by the leading hand who directed his duties on a daily basis.

Dismissal and subsequent communications

On 7 June 2024, the worker telephoned the leading hand to advise that he would not be coming to work that day as he needed to get his truck repaired.

Later that day, at approximately 7:30 pm, the worker received a text message from the leading hand informing him that his employment was terminated and instructing him to look for work elsewhere. 

The text message also stated that while the employer appreciated his work, it was deemed below standard, which was the first time the worker was made aware that there were any issues with his performance.

The worker's termination was unexpected as he received no prior warning, formal review, or opportunity to respond to any alleged concerns about his work. On 18 June, the worker formally raised a personal grievance against the employer, challenging his dismissal, stating he was left with no choice due to the communication and requesting a copy of his wage and time records.

On 1 July 2024, the employer's general manager responded by email and admitted that the worker's termination was done in an unjustified manner. Then, on 6 July 2024, the employer changed its stance and, in a further email, claimed that the worker was a "subcontractor" or "occasional worker." 

The worker claimed he was neither an independent contractor nor an occasional worker, stating he was a full-time employee with regular hours and duties controlled entirely by the employer.

Invoice for alleged repairs

On 21 July 2024, the general manager emailed the worker, alleging his work was of poor quality and invoiced him for alleged repairs. The email enclosed photos and stated the employer had been instructed by project managers to replace items done with unacceptable poor workmanship, with photos attached. 

The email said the employer was waiting for another invoice for the cost of materials and extra painting that had to be done and would be forwarded to the worker to pay directly to the employer's nominated bank account.

When reviewing the email and invoice, the worker noticed that the photos sent to him did not match what the invoice had stated and that he had never worked at this site during his time with the employer.

Employee versus contractor determination

The ERA applied the statutory test requiring the determination of the real nature of the relationship when deciding whether a person is employed, considering all relevant matters, including those indicating the intention of the parties, though statements describing the nature of their relationship are not determinative. 

The Authority considered the distinction between an employee and an independent contractor, noting an employee works for the employer and the employer's business to enable the employer's interests to be met, while an independent contractor is an entrepreneur providing their labour to others in pursuit of gains for their own entrepreneurial enterprise.

The worker submitted that the terms of his employment were based on his oral conversations with the general manager, and he believed he was an employee working under the same employment arrangement he had been working under previously, paid at the same $30 hourly rate.

During the investigation meeting, the worker gave evidence that the contractor rate was significantly higher, and he would have wanted $45 per hour. 

The ERA accepted his unchallenged evidence that it was the intention of the parties that he transitioned from working under an employment relationship with the previous company to working under a new employment relationship with the employer on 5 February 2024.

The Authority considered the way the relationship operated in practice by having regard to factors including control and integration, and the fundamental test of whether the worker was working on his own account. 

The ERA found the worker submitted he was required to work exclusively for the employer and did not seek employment outside of working for the employer, had no control over his work schedule, location, or assigned tasks as he was always given these instructions prior to attending work, and was under the direct supervision of the leading hand who gave him instructions on what work to complete and when jobs needed to be completed by.

Control, integration and fundamental test findings

The ERA found these features indicated the worker was subject to a high level of control by the employer and fully integrated into the role of the employer's construction and renovation business. 

The Authority considered whether the worker was in business on his own account with the ability to manage the work he did to increase or maximize his gain, essentially whether he was an entrepreneur providing labour in pursuit of maximizing his own business.

The ERA found no evidence that there was any basis on which the worker could have engaged another person to carry that work out for him. Although the worker had his own tools, which he used, he also used employer-supplied tools on site, which is common for employed builders. 

The worker stated he was told by the employer to provide invoices as a record of his time sheets to be paid, and that the employer withheld 20 percent of his wages for payment of tax, with the Authority determining the payment of tax was a neutral feature and not determinative of the issue.

The ERA found significant factors included: he was paid weekly in respect of an average of 39 hours a week to be worked between 7:30 am-5:30 pm up to six days a week; he was required to be present at the worksite during the working day; he was provided with the means necessary to perform his duties; he had to ask permission from the leading hand for days off during his employment and was not able to decide when he worked including if he was sick or wanted to take holidays; the leading hand would come to the construction site every day to guide and supervise him and tell him what the working arrangements and tasks would be for the day; and he did not bear any risk of loss or conversely have any chance of making a profit, being simply paid for the hours he worked.

The Authority found the worker was not able to accrue any intangible benefit and worked solely for the benefit of the employer, with the employer dealing with suppliers and clients.

To an external observer, such as a client, the worker would not be differentiable from the employer. The ERA determined these factors indicated the worker was an integral part of the employer's business, finding no evidence suggesting he was in business on his own account.

Unjustified dismissal and remedies determination

The Authority found that the employer failed to establish, on the balance of probabilities, that the worker was an independent contractor, determining that the worker was an employee of the employer during the period he worked. 

The ERA noted the employer responded by email on 1 July 2024 agreeing that "it was done unjustified," with the employer noting in their statement in reply that the worker was not entitled to any compensation as "he himself didn't show up for a job he needed to redo," implying the termination was in response to the worker not attending work on 7 June 2024.

In dismissing the worker, the employer followed no process. The ERA found the employer had not demonstrated that its actions and how it acted in the lead up to the worker's dismissal were what a fair and reasonable employer could have done in the circumstances at the time of the dismissal, so it was unable to substantively justify his dismissal. 

Accordingly, the Authority determined the worker's dismissal was substantively unjustified and it was carried out in a procedurally unfair manner.

The ERA found the worker was summarily dismissed without notice and was entitled to be paid his hourly rate at 39 hours per week for the 13 weeks after his employment ended, awarding $15,210 gross in lost wages. 

The worker gave evidence about the employer's decision to dismiss him and the process leading up to that decision, stating the abruptness of the termination caused significant distress to both him and his family, particularly as he had to support his family, who relied on his income to meet their financial obligations.

Holiday pay arrears and costs

The Authority determined that an appropriate award to compensate for the effects on him was $15,000, ordering the employer to pay this amount as compensation for humiliation, loss of dignity and injury to feelings.

The ERA found the worker was unjustifiably dismissed and did not contribute to his dismissal, warranting no reduction in remedy under the statutory requirement to consider blameworthy conduct.

The ERA found the employer failed to pay the worker public holiday pay and annual leave entitlements, and failed to provide accurate wage and time records, accepting the worker's calculation for what is owed.

The Authority determined the worker was entitled to payment of five public holidays at 8.5 hours per day, being $1,275 gross, and annual holiday pay of 8 percent for his period of employment of 18 weeks, totaling $1,684.80 gross.

The ERA found the application for penalties in relation to the employer's breaches of the Holidays Act and Wages Protection Act were statutorily barred as they were not raised until the lodging of the worker's closing submissions on 26 August 2025, outside the 12-month time limit. 

Regarding failure to provide wages and time records, the Authority did not find in the circumstances that the breach was sufficiently serious to warrant a penalty under the Employment Relations Act, determining the orders against the employer to pay arrears to the worker were sufficient to address the worker's claim.

The ERA ordered the employer to pay the worker within 28 days: $15,210 gross as reimbursement of lost wages; $15,000 as compensation; $1,684.80 gross for annual holiday pay; and $1,275 gross for public holiday pay. 

The Authority noted there was no counterclaim before it in relation to alleged money owed to the employer by the worker for remedial work, so no offset could or should be made. 

As the employer was not represented and did not participate in proceedings, the ERA determined it was not appropriate to reserve costs, awarding the worker $2,250 in costs plus reimbursement of the application fee of $71.55.