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Cases of Interest: June 2025
A summary of interesting or topical employment cases.
Chief Executive of Ministry of Business, Innovation, and Employment v Hairland Holdings Ltd [2025] NZCA 219
Court of Appeal of New Zealand – Employment Relations Act 2000, s 161(1) – Jurisdiction of Employment Relations Authority – Jurisdiction to determine that workers are not employees – Claim brought by employer
This was an appeal on the following question of law (see paragraph B):
Does the Employment Relations Authority have jurisdiction to hear an application, brought by a purported employer against the Chief Executive of the Ministry of Business, Innovation, and Employment, the Labour Inspector and/or its workers, for a bare declaration that its workers are not employees under s 6(1) of the Employment Relations Act 2000(external link)?
The appellant ran a nationwide hairdressing business. A Labour Inspector investigated whether the appellant’s hairstylists were employees entitled to minimum statutory benefits. The Inspector concluded they were employees and asked for a response to possible enforcement action. The appellant said the stylists were independent contractors. It filed a claim with the Employment Relations Authority (the Authority) seeking a determination under section 161(1)(c) of the Employment Relations Act 2000(external link) (the Act) that the stylists were not employees. The chief executive of the Ministry of Business, Innovation, and Employment (the chief executive) argued the Authority lacked jurisdiction to make such a determination.
The Labour Inspector later filed a separate claim for unpaid entitlements and employment records on behalf of five hairstylists. The Authority ruled it could not determine the appellant’s claim but could determine employment status within the Inspector’s claim. The appellant challenged the determination in the Employment Court (the Court). The Court upheld the Authority’s jurisdiction to determine the appellant’s claim under section 161(1)(c)(external link). The chief executive appealed, raising the question of whether the Authority could investigate a purported employer’s application for a declaration that its workers are not employees.
The chief executive argued that the Authority only has jurisdiction over employment relationship problems, which require the existence of an employment relationship. Since the appellant denied being an employer, the matter fell outside the scope of section 161(1)(external link) (see paragraphs 25, 26).
The appellant submitted that a dispute over employment status constitutes an employment relationship problem even if no employment relationship exists. It argued that section 161(1)(c)(external link) provides a stand-alone jurisdictional basis for the Authority to determine employment status and that the Labour Inspector’s assertion the workers were employees created a sufficient controversy (see paragraphs 27–29, 47–49).
Court of Appeal’s findings and remedies
The Court of Appeal:
- held that the Authority does not have jurisdiction to investigate an application by a purported employer for a bare declaration that its workers are not employees under section 6(1)(external link) (see paragraph 75)
- found that an employment relationship problem must relate to or arise out of an actual employment relationship, as defined in sections 5(external link) and 4(2) of the Act(external link) (see paragraphs 50–52)
- rejected the argument that section 161(1)(c)(external link) provides a stand-alone jurisdictional basis independent of a substantive employment relationship problem (see paragraph 51).
- said that allowing such applications would undermine the procedural safeguards in sections 6(5), (6)(external link), which require worker consent and are designed to protect against power imbalances (see paragraphs 58–62).
- set aside the Court’s judgment and granted the chief executive’s strike-out application (see paragraph 76).
Chief Executive of MBIE v Hairland Holdings Ltd [2025] NZCA 219(external link)
VXO v Health New Zealand – The Whatu Ora (in respect of the former Northland District Health Board) [2025] NZEmpC 114
Employment Court – Personal grievance – Unjustifiable disadvantage – Unjustifiable dismissal – Medical incapacity – Incapacity during disciplinary investigation
At issue was:
- whether the employee was unjustifiably disadvantaged or dismissed
- whether the employer breached its duty of good faith or its disciplinary procedures
- whether non-publication orders should be granted for the employee and the complainant.
The employee was a senior medical officer employed by a district health board (the employer). A junior colleague (RMO) lodged a complaint alleging the employee made inappropriate texts and comments. The Employer initiated an investigation, during which the employee admitted to several incidents but claimed they were misjudged attempts at humour. The disciplinary process was paused when the employee became medically unfit to work. His employment was later terminated for medical incapacity after nine months of paid sick leave.
The employee raised personal grievances for unjustifiable disadvantage and dismissal, and alleged breaches of good faith and the collective agreement. The Authority dismissed all claims against the employee. He challenged both determinations in the Employment Court (the Court), representing himself.
The employee argued the investigation was flawed, biased, and lacked independence and that his conduct was mischaracterised. He objected to being placed on special leave without consultation and claimed the dismissal was unjustified. Health New Zealand maintained the investigation and dismissal were fair and it followed proper procedures.
Court’s findings and remedies
The Court dismissed the employee’s challenge to both the substantive and costs determinations (see paragraphs 111–112). It took into account that:
- The employer’s investigation was fair and sufficiently independent (see paragraphs 94, 95).
- The disciplinary process was paused appropriately due to the employee’s health (see paragraph 58–60).
- The dismissal for ill health was justified and followed the collective agreement (see paragraph 107–110).
- The failure to consult the employee before placing him on special leave was a procedural flaw but did not result in unjustifiable disadvantage (see paragraph 105–106).
The Court granted non-publication orders for both the RMO and the employee, with limitations to allow Health New Zealand and the Medical Council of New Zealand to fulfil their obligations (see paragraphs 120, 130).
HZZ v WFW [2025] NZERA 375
Employment Relations Authority – Compliance order to enforce settlement agreement – Breach of compliance order – Remedies – Availability of remedies against director
At issue was whether the Employment Relations Authority (the Authority) could grant remedies of penalties and interest against a director, following the employer’s failure to comply with an earlier compliance order.
The employee and employer entered into a mediated settlement agreement under s 149 of the Employment Relations Act 2000 (the Act)(external link). The agreement included quantified compensation and other payments, some of which were left to the parties to calculate. The employer failed to make any payments by the agreed deadlines. The employer obtained a compliance order from the Authority, but the employer still failed to pay. The employee then initiated civil enforcement, which recovered only the quantified amounts. The employer paid the remaining sums only after a case management conference in the current proceedings.
The self-represented employee applied to the Authority for a second compliance order, interest, penalties, and personal liability against the employee’s director. The employer did not file a statement in reply and failed to appear at the investigation meeting.
Authority’s findings and remedies
The Authority dismissed the employee’s claims (see paragraph 25). It:
- dismissed the claim for personal liability against the director, as Part 9A of the Act(external link) did not apply to the enforcement of mediated settlements (see paragraphs 16, 17)
- dismissed the claim for interest because the employee should have been included it in the original application (see paragraph 18–22)
- said that the employee could not seek a second compliance order for the same settlement agreement (see paragraph 23)
- acknowledged that the employer had still not provided a certificate of service but declined to reopen the earlier investigation (see paragraph 24).
The Authority ordered the employer to pay the employee costs of $1,000, because the employee had to initiate proceedings in the Authority in order to get the remaining money owing under the earlier compliance order (see paragraph 26, 27).