Cases of Interest: November 2025

Rasier Operations BV v E Tū Inc [2025] NZSC 162

Supreme Court – Employment status of Uber drivers

This case involved an appeal to the Supreme Court over whether 4 Uber drivers were employees under section 6 of the Employment Relations Act 2000(external link) (the Act).

The unions acted on behalf of 4 Uber drivers to seek a declaration that the drivers were employees under section 6 of the Act(external link). The unions were successful in both the Employment Court and the Court of Appeal in demonstrating that an employment relationship existed between the appellant and the drivers.

The appellant submitted that:

• They did not hire drivers at all. They merely provided digital services which connected the drivers to the riders.
• If it was held that it contracts with the drivers, they were independent contractors in business on their own account.
• The Court of Appeal ought to have accepted the intention of the parties as expressed in their contract.
• The Court of Appeal erred in:
  • characterising parts of the agreement between the appellant and the drivers as “window dressing”
  • its application of the common law tests
  • failing to stand back and consider the totality of the relationship.

The Supreme Court unanimously agreed with the Court of Appeal that the Employment Court had erred in law in its interpretation of the meaning of “employee” under section 6 of the Act, and in its suggestion that an inequality of bargaining power may extend statutory definitions under the Act (see paragraphs 89, 170, 171).  The Supreme Court also agreed with the Court of Appeal that inequality of bargaining power may explain the language used in the contract or why the contract does not reflect the real relationship between the parties (see paragraphs 90-91, 172).

The majority (Winkelmann CJ, Williams and Miller JJ) found that the Court of Appeal had not misinterpreted section 6 or the Bryson decision (Bryson v Three Foot Six Ltd [2005] NZSC 34, [2005] NZLR 721(external link); see paragraph 93).

The majority also found that the Court of Appeal had not erred in finding that no weight needs to be given to the language used a contract that disguises the real nature of the relationship (see paragraph 86). In determining when weight should be given to intention as expressed in contracts, they agreed with the Court of Appeal’s distinction between contracts that are entered into following genuine and legally informed negotiations, and contracts offered on a “take it or leave it” basis such as those offered by the appellant (see paragraphs 83, 84).

The majority looked at the following findings of the lower courts (see paragraph 142):

• The appellant exercised very close control over every aspect of the drivers’ delivery of its passenger services. It monitored performance, chose the route the driver would take, and policed their behaviour while the driver was logged onto the app.
• Accepting the finding that the appellant delivers transport passenger services to riders means that drivers are substantively integrated into the appellant’s business in that they are the face of the appellant’s business, and that the relationship between the appellant and the drivers is one of co-dependency.
• The drivers lacked control over the quantity and quality of the work they received and the price the riders paid for rides. The drivers also lacked the ability to build goodwill with riders. While there were some indications that the drivers were in business on their own account, these factors pointed to the conclusion that they were not.

They were not convinced that those findings were wrong, or that the lower courts had erred in finding that the drivers were employees (see paragraph 143). They held that the Court of Appeal did not err in finding that an employment relationship existed despite the assertions in the contract and subsequently dismissed the appeal (see paragraphs 143, 144). They also noted that the findings in relation to the appellant may not apply to other digital platforms, and that each platform will need to be assessed by reference to the contractual terms and behaviour between the parties (see paragraph 66).

The minority (Glazebrook and Ellen France JJ) applied different reasoning but reached the same conclusion that the drivers were employees. Glazebrook and Ellen France JJ found that the Court of Appeal had erred in discounting intention as expressed in the contract (see paragraph 173), in dividing the inquiry into two stages (see paragraph 175), and in discounting the relationship when drivers were not logged into the app (see paragraph 176). The minority applied the unaltered test established in Bryson. They applied the common law tests of intention, control, integration, and whether the worker was effectively in business on their own account (the “fundamental test”) (see paragraphs 178-188). The minority also concluded that the factors indicating an employment relationship outweighed the factors pointing away from employee status and dismissed the appeal (see paragraph 189).

Rasier Operations BV v E Tū Incorporated [2025] NZSC 162(external link)

KNN v Fire and Emergency New Zealand [2025] NZEmpC 247

Employment Court – Personal grievance – Conditional appointment – Dismissal

At issue was a challenge to the determination of the Employment Relations Authority (the Authority) regarding the relationship between the Employment Relations Act 2000 (the Act) and the Fire and Emergency Act 2017 (the FENZ Act). In particular was a challenge to the findings that:

• The employee’s offer of employment was conditional and that a completed review in their favour was required for their employment to become unconditional.
• The decision of the chief executive of the employer on the review of the employee’s appointment was substantive justification to cancel their appointment. This had the effect of limiting the employee’s ability to proceed with a personal grievance for unjustifiable dismissal, although they could seek judicial review of the chief executive’s decision to cancel the appointment.

The employee was offered a role with the employer which they accepted. The offer was conditional upon there not being a successful review of their employment, as the FENZ Act requires a procedure to be in place for review of every appointment. The employee commenced work prior to the review being completed. An application for review of the employee’s appointment was made and was successful; their appointment was subsequently cancelled, and the employment was terminated.

The employee submitted that:

• Once they commenced work with the employer, their employment was covered by the Act, and that the review undertaken under the FENZ Act did not provide sufficient justification for terminating their employment.
• To give proper effect to the intentions of Parliament, any review of an appointment must be completed before the candidate began work in that role. By allowing them to commence employment, the employer had effectively waived the condition.

The employer relied on their obligations under section 27 of the FENZ Act(external link). The employer submitted that:

• The offer made to the employee was conditional and remained conditional despite the commencement of the employment.
• The chief executive accepted the recommendation of the review committee to cancel the appointment, the decision to follow that acceptance was in accordance with the FENZ Act.
• There was never a completed offer and acceptance, they were within their rights and were obliged to end the conditional employment.

The Employment Court (the Court) found that:

• The employee’s offer of employment was conditional as required by legislation (see paragraphs 33-36).
• As an employee, they were entitled to raise a personal grievance regarding the cancellation of their appointment and the termination of their employment (see paragraph 43).
• Under section 103 of the Act(external link), consideration would need to be had regarding whether the employer acted as a fair and reasonable employer in the circumstances (see paragraph 44). The review process taken under the FENZ Act would inform this assessment (see paragraph 44). The Authority and Court could be expected to generally defer to the views of the employer as to the cancellation of the appointment (see paragraph 44).
• The Authority and the Court are limited in their consideration for the substantive basis of the cancellation of the appointment and termination of employment (see paragraph 44).

KNN v Fire and Emergency New Zealand [2025] NZEmpC 247(external link)

Zhang v Ford Steel Engineering Ltd [2025] NZERA 741

Employment Relations Authority – Mutual Breach of Settlement Agreement – Penalties – Compliance Order

At issue for the Employment Relations Authority (the Authority) to decide was:

• whether the employers breached the confidentiality clauses in the settlement agreement
• whether the employee or the employee’s partner breached confidentiality clauses in the settlement agreement
• whether penalties should be imposed on any of the parties for breaches of the settlement agreement
• whether compliance orders should be made against any of the parties in respect of the breaches of the settlement agreement.

The employee was formerly employed by the employers. The employee and the employers concluded a Record of Settlement (the settlement agreement) to settle defamation proceedings that the employer brought in the High Court against the employee and their partner. The settlement agreement required either party to post a public apology stating that a mutual agreement had been reached, which the employee did. The employer reposted this apology and made posts identifying the employee as a former employee of the employer. The employer stated that this apology was provided to settle a defamation lawsuit in the High Court. The employee and the employee’s husband also made posts online referring to the settlement of the proceedings in the High Court and the conditions of the settlement agreement.

The employee brought a claim in the Authority alleging that the employers had breached various clauses in the settlement agreement. The employee claimed that:

• The employers had breached terms of the settlement agreement, particularly in disclosing terms of the settlement agreement.
• There should be an implied term of non-disparagement in the settlement agreement.
• There should be an implied good faith and/or fair-dealing clause in the settlement agreement.
• The conduct of the employers breached the implied terms of non-disparagement and good faith.

The employers lodged a counterclaim, alleging that the employee and the employee’s partner had also breached the settlement agreement. They submitted that the employee and their husband had made online posts which disclosed confidential matters mentioned in the settlement discussions and the terms of the settlement agreement.

The Authority found that:

• The employers had breached their confidentiality obligations under the settlement agreement in disclosing the settlement of High Court proceedings, withdrawal of proceedings, and the apology which followed (see paragraph 61).
• The employee had breached their confidentiality obligations under the settlement agreement through an online post which disclosed a term of settlement regarding confidentiality (see paragraph 81).
• The employee’s partner was a person required to comply with the settlement agreement and had breached confidentiality obligations under the settlement agreement through online posts which referred to settlement discussions (see paragraphs 90, 94).
• It would not be reasonable to imply a non-disparagement term into the settlement agreement. Parties should be aware of what their obligations are and who might be bound by important clauses upon signing a settlement agreement, it is not clear in this case whether a non-disparagement term would be mutual or apply to only one party (see paragraph 47).
• It would not be reasonable to imply terms of good faith or fair-dealing into the settlement agreement. The settlement agreement was explicit that the parties were bound by the express terms of the agreement, and it was not clear what good faith or fair-dealing would have meant in the context of their post-settlement obligations (see paragraphs 58, 59).

The Authority made the following orders:

• Compliance orders against the employers regarding the disclosure of any terms of settlement (see paragraph 68).
• Compliance orders against the employee and the employee’s partner regarding the disclosure of any terms of settlement (see paragraph 101).
• Penalties of $1,000 against the employers under section 149(4) of the Employment Relations Act 2000(external link) (the Act) for breaches of the settlement agreement (see paragraphs 75, 76).
• Penalties of $500 against the employee under section 149(4) of the Act for breaches of the settlement agreement (see paragraphs 106, 107).
• Penalties of $1,000 against the employee’s partner under section 149(4) of the Act for breaches of the settlement agreement (see paragraphs 108, 109).

Zhang v Ford Steel Engineering Ltd [2025] NZERA 741(external link)

O'Driscoll v Rehab Co Mobile Ltd [2025] NZERA 746

Employment Relations Authority – Jurisdiction – Personal grievance – Sweat Equity Arrangement 

At issue for the Authority to decide was whether the worker was an employee or whether the worker’s involvement with the employer was under some other arrangement. If the worker was found to be an employee, the Authority would then determine whether they had been unjustifiably dismissed and whether the worker was owed arrears for claimed unpaid wages.

The worker was a co-founder and director of the business. Another company owned by the worker was an initial shareholder in the business. It was accepted that there was an initial agreement that the worker would contribute sweat equity to the business. After a restructuring in shares, the worker became a shareholder of the business in person. The worker began to receive wages following this restructuring, however they later agreed to stop receiving salary payments due to financial concerns with the business.

The relationship between the worker and the business deteriorated. The worker attended a meeting with the other directors and shareholders of the business, during this meeting the worker was removed from their role as the operations manager. During this meeting steps were also taken to remove the worker as a director and shareholder of the business.

The worker submitted:

• They had a conversation with another director and shareholder of the business. During this conversation it was agreed that they would receive wages due to their role as the operations manager. Following this conversation, they became an employee.
• The payment of wages to the worker, the degree of control that the other director and shareholder had over them, and their integration into the business as the operations manager point to the existence of an employment relationship.

The employer submitted that:

• The mutual intention of the parties was that the worker would be involved in a sweat equity arrangement. This had not changed since the incorporation of the business.
• They would not have agreed to an employment relationship between the parties due to concerns regarding the business’s operational status and financial circumstances.
• The worker’s shares increased to reflect the fact that the worker was going to undertake more sweat equity in the business.
• The worker was solely responsible for several things in their capacity as operations manager. There were no regular meetings, performance reviews, and no employment agreement existed.

The Authority found that the real nature of the relationship pointed towards a sweat equity arrangement and that no employment relationship existed. The Authority considered that (see paragraph 49):

• In practice, the worker performed services primarily consistent with that of a person in business acting as a company director and shareholder rather than an employee.
• The worker had a high degree of autonomy in the operations manager role, which permitted them to make changes with little to no oversight or checks and balances.

As the worker was not an employee of the business or of the other director and shareholder of the business, the Authority did not have jurisdiction to resolve the employee’s claims (see paragraph 50).

O’Driscoll v Rehab Co Mobile Ltd [2025] NZERA 746(external link)

Bhatia v Khanna [2025] NZERA 738

Employment Relations Authority – Removal to Employment Court – Unlawful premium

This case involved an application for removal of the matter to the Employment Court (the Court).

The applicants were four migrant employees who were in New Zealand as holders of work visas. The employees’ substantive claims involved claims for, among other things, recovery of unlawful premiums paid. The employees claimed that they were required to pay premiums of around $40,000 each in return for employment in New Zealand. These payments were made outside of New Zealand. The employees alleged that these premiums were unlawful and in breach of section 12A of the Wages Protection Act 1983(external link) (the WPA).

In a determination dated September 2025, the Employment Relations Authority (the Authority) removed A Labour Inspector v Top Produce Ltd [2025] NZERA 587(external link) to the Court which involved a substantially similar question of law regarding whether section 12A of the WPA(external link) applies to premiums where part of the transaction occurs outside of New Zealand.

The employees submitted that an important question of law that arose in this matter more than incidentally was:

Whether a premium for employment, paid outside of New Zealand, but in respect of a role with a specific New Zealand employer, can be recovered through the New Zealand employment institutions.

The advocate for the first employer submitted that the grounds for removal had not been established. However, they also submitted that if this matter were heard by the Court alongside the Top Produce Ltd case, removal would be a sensible option.

The second employer submitted that:

• The matter did not involve an important question of law.
• The Court should not determine this matter while they remained a party to these proceedings as they were not involved in the employment matters until after the alleged premium was paid.
• Removing this matter to the Court would add unnecessary judicial intervention to matters involving them, declining removal would reduce the need for judicial intervention, in line with the purpose under section 3 of the Employment Relations Act 2000(external link) (the Act).
• As the Authority had removed the Top Produce Ltd case to the Court, there was no need to remove this mater.
• The Authority should wait for the Court’s decision regarding the Top Produce Ltd case.
• The employees could seek special leave to remove this matter to the Court under section 178(3) of the Act(external link) if the Authority declined removal.
• They would take a neutral position if only the issue relating to premiums was removed to the Court.

The Authority was satisfied that the criteria for removal to the Court was met. In concluding that an important question of law was likely to arise in the matter other than incidentally, the Authority considered that:

• It was not appropriate to delay this matter pending the Court’s decision in the Top Produce Ltd case (see paragraph 42). The Court may wish to consider whether it will hear both matters together or consecutively. The Top Produce Ltd case may also be withdrawn, settled, or delayed due to other circumstances (see paragraph 43).
• The outcome will impact other migrant workers who have been required to pay premiums to secure employment before coming to New Zealand (see paragraph 40).
• The outcome will also impact the Labour Inspectorate who investigate claims of alleged unlawful premiums and Immigration New Zealand who receive complaints regarding migrant exploitation arising from the payment of alleged unlawful premiums among other things (see paragraph 40).
• The Authority is receiving an increasing number of claims which allege that an unlawful premium was paid outside of New Zealand for employment in New Zealand. As the question of law posed by the employees is arising with increasing regularity, there is considerable merit in having the Employment Court provide its view of the current legal position (see paragraph 45).

Bhatia v Khanna [2025] NZERA 738(external link)