Cases of interest: April 2026

Secretary for Education v New Zealand Post-Primary Teachers' Assoc Inc Te Wehengarua [2026] NZEmpC 75

Employment Court – Contractual interpretation – Provision governing paid teachers’ paid union meetings – Meaning of “open for instruction”

Employment Court – Union meetings – Employment Relations Act 2000, section 26(3) – Interpretation and application

At issue was the meaning and application of:

• the Employment Relations Act 2000, section 26(3)(external link), governing union meetings
• a provision in the Secondary Teachers Collective Agreement (the STCA), governing teachers’ paid union meetings.

Section 26 relevantly provides:

Paragraph 10.4 of the Collective was intended to mirror section 26:

Historically:

• The PPTA approached boards of trustees to make arrangements for the days that paid union meetings took place.
• The PPTA, the Ministry of Education, and the New Zealand School Trustees Association took a practical approach emphasising the right of union employees to attend paid union meetings and ensuring there was adequate supervision of students.
• For many years, the most common approach of schools to paid union meetings was to truncate the school day and then to offer supervision to students who were not able to go home early.

From May 2024, the Ministry of Education and Secretary for Education took the position that for a school to be “open for instruction” during union meetings, as required under paragraph 10.4 of the Collective, schools needed to provide “compulsory organised learning” to students at all year levels (see paragraphs 19, 20).

In that context, the parties sought to determine (see paragraph 5):

The Employment Court held that:

• For a school to satisfy the requirements of section 26(3), the PPTA is to work with the school board to ensure that, at a minimum, non-teaching functions are able to continue. This could include asking members to volunteer if there were not enough non-union members to provide for student learning or supervision of students. (see paragraphs 42, 50(c)).
• Any assessment of what is appropriate in the circumstances must be considered against the overall purpose of section 26, which is to allow union members to attend up to two paid union meetings a year (see paragraph 42).
• “Open for instruction” in paragraph 10.1.4(c) of the STCA must include where a school remains open and provides supervision where required. Paragraph 10.1.4(c) was intended to reflect section 26. The Secretary of Education’s interpretation would narrow section 26(3) “and the legislation must prevail” (see paragraphs 31, 47, 48, 50(b)).
• “[As] a matter of good faith, the PPTA and school boards should first attempt to settle mutually convenient arrangements for paid union meetings between themselves.” The Secretary of Education is entitled to provide advice on possible arrangements to school boards (see paragraphs 32, 35, 50(a)).

Secretary for Education v New Zealand Post-Primary Teachers' Assoc Inc Te Wehengarua [2026] NZEmpC 75(external link)

Manawatu Motors 1970 Ltd t/a Robertson Motors v Renner [2025] NZEmpC 68

Employment Court – Damages against employee for loss of chance – Using supplier and client relationships to compete with employer

A key issue was whether the employer was entitled to damages for loss of chance, after the employee, while he was working for the employer, used his relationships with the employer’s clients and a supplier with a view to competing with the employer.

The employee was a salesperson for a business selling a line of Japanese trucks. The employee suggested that his employer partner with another Japanese business that supplied truck attachments (the supplier). Subsequently, the employer and the supplier signed an exclusive agreement (the distribution agreement), whereby the employer was to be the sole distributor in New Zealand for a number of the supplier’s products. These products were listed in a schedule attached to the agreement.

Over time, the products listed in the schedule became out of date. However, neither the employer nor the supplier mentioned the fact or amended the distribution amendment. In the meantime, they both treated the distribution agreement as covering the supplier’s products exclusively in New Zealand generally. The employee was the chief point of contact for the supplier and developed good relations with its representatives.

Approximately 7 years after the agreement parties signed the distribution agreement, the employee resigned, the day before he was to go on sick leave to have an operation. A week later, the supplier contacted the employer and advised that it wished to change the arrangement so the employer was no longer the exclusive distributor.

The employer became suspicious of the timing. The employer collected the employee’s laptop from his home. On the laptop, the employer found evidence the employee had been providing information about its clients to the supplier, without the employer’s knowledge.

Before the employee’s resignation took effect, the supplier contacted one of the employer’s clients and told it to place orders through the employee, rather than through the employer.

Under the parties’ employment agreement, the employee agreed that he would not share the employer’s confidential information or use relationships he developed on behalf of the employer with clients or other business associates. There was also a restraint of trade provision in the employment agreement, but the period for the restraint was not selected. The employer accepted the restraint of trade provision was not complete and did not rely on it.

The employer claimed the employee breached the employment agreement and the common law duty of fidelity and good faith.

The Employment Relations Authority accepted that the employee breached the employment agreement and the duty of fidelity and good faith, but did not accept that the employer suffered a loss as a consequence. It declined to award the employer damages for the breaches.

In the Employment Court (the Court), the employer sought special damages of $2,240,000 for loss of profit; or, in the alternative, $900,000 for loss of a chance to retain the exclusive distribution arrangement with the supplier.

The employee said the employer’s losses arose from its own failures, namely:

• not planning for the employee’s resignation
• not building multiple contact points with the supplier
• not understanding the importance of relationships and business with Japanese companies
• not having a restraint of trade
• not obtaining advice on the supply agreement before it was signed or amended.

The Court accepted that:

• The employee took steps, while working for the employer, that (see paragraph 50, 51):
  • undermined the employer’s relationship with the supplier and its customers
  • breached his obligations of fidelity and good faith
  • breached his employment agreement.
• The employee’s actions in facilitating interactions between the supplier and customers directly, rather than through the employer were part of the pattern of him acting against the employer’s interests (see paragraph 52).
• Sharing the client’s emails was not a breach of confidentiality as those details were not inherently confidential (see paragraph 52).

It found that:

• The employer reasonably trusted a long-serving employee whose job included to build and maintain relationships with key business contacts (see paragraph 62).
• Some failures the employee pointed to were his own failures in his role, as (see paragraphs 56 to 62):
  • He was the one in a position to get advice on the distribution agreement before it was signed and to suggest it be updated when products changed.
  • He was the one who understood the importance of  relationships and business with Japanese companies.
• On the evidence and on the balance of probability, the employee’s conduct:
  • was a very substantial factor causing the supplier to end its exclusive relationship with the employer, causing the employer’s customers to try to work directly with the supplier, rather than through the employer (see paragraph 64).
  • caused the employer loss (see paragraph 65).

The Court:

• accepted that fair damages for loss of chance were $900,000. This was 40 per cent of the loss of profit the employer claimed it sustained. It made a robust allowance for various possible contingences (see paragraphs 71, 72)
• ordered the employee to pay $900,000, minus approximately $76,000 that the employer owed in unpaid commissions (see paragraphs 92, 93)
• ordered the employee to pay interest on the amount owing after payment of the commission (see paragraph 94).

Manawatu Motors 1970 Ltd t/a Robertson Motors v Renner [2025] NZEmpC 68(external link)

Labour Inspector v Mother's Thai Ltd [2026] NZERA 232

Employment Relations Authority – Penalties – Breach of minimum employment standards – Breaches against migrants – Massage business

Employment Relations Authority – Penalties – Arrears – Liability of director as person-involved

At issue was:

• the quantum of penalties the Employment Relations Authority (the Authority) should order the employer to pay for 55 breaches of minimum employment standards
• whether the employer’s director should be liable for penalties and arrears as a person-involved in minimum employment standards breaches.

The employer ran a business providing massage services at three locations. The Labour Inspector conducted an investigation into the business. Following the investigation, the employer accepted that:

• It  committed 55 minimum employment standards breaches against 5 employees.
• It breached:
  • section 6 of the Minimum Wage Act 1983(external link) by failing to pay minimum wage for all hours worked
  • section 4 of the Wages Protection Act 1983(external link) by making unlawful deductions from employees’ pay
  • section 12A of the Wages Protection Act 1983(external link) by charging employees an unlawful premium for their employment
  • sections 64 and 65 of the Employment Relations Act 2000(external link) by failing to keep a copy of employees’ employment agreements; failing to keep or have  compliant employment agreements
  • section 130 of the Employment Relations Act(external link) by failing to keep time and wage records
  • 14 sections of the Holidays Act 2003(external link).
• It owed the 5 employees a total of $231,737.96 in arrears.

The Authority:

• accepted the director was liable for the arrears as a person-involved (see paragraph 12)
• gave the Labour Inspector leave to recover arrears from the director in the event the employer was unable to pay them (see paragraph 13 and 35)
• ordered the employer and the director to pay penalties of $140,000 and $70,000, respectively, with each employee to be given $21,000 from the penalties (see paragraphs 33, 37).

In setting penalties at that level the Authority took into account that:

• The breaches were significant and deliberate (see paragraphs 19, 20).
• The employer’s culpability was relatively high (see paragraph 20).
• The employer had not made any payments and was trading at a loss, so could not pay the arrears (see paragraphs 21).
• It appeared the employees were “migrant workers with limited knowledge about their employment rights and little support in terms of questioning their pay and other entitlements” and the employer took advantage of their vulnerability (see paragraphs 22, 23).
• There was no evidence of previous breaches by the employer (see paragraph 24).
• There was a need for deterrence (see paragraphs 29, 30).
• The employer and director were in financial difficulties, warranting a modest reduction (see paragraph 31).

Labour Inspector v Mother's Thai Ltd [2026] NZERA 232(external link)

Huang v Fast Horse Ltd t/a Fast Horse Express [2026] NZERA 224

Employment Relations Authority – Employment status – Courier doing app-based deliveries

Employment Relations Authority – Personal grievance – Unjustified constructive dismissal

At issue was:

• whether the worker was an employee
• if so, whether he was unjustifiably dismissed.

The worker started working for the respondent as a part-time warehouse labourer and then became a full-time delivery driver. The respondent claimed the worker was engaged to do deliveries under an independent contractor agreement (ICA); however, the worker claimed he was not aware of such an agreement and the purported ICA was not signed.

The respondent assigned work to drivers via its smartphone app. The app both generated delivery routes and tracked progress in delivering parcels. The driver had no choice over routes. The respondent imposed penalties against drivers who did not take proper photos of parcels on delivery or who did not meet targets for delivery times.

After the worker was bitten by a dog, he attempted to claim ACC cover as an employee. The respondent then blocked him from accessing the app and asked him to withdraw the ACC claim. When the worker refused, the employer did not give him any further work and stopped paying him.

The Employment Relations Authority (the Authority) found the worker was an employee (see paragraph 15). In reaching that determination, the  Authority took into account (see paragraphs 13–15):

• the high level of control the respondent exerted when the worker was logged into the app
• the fact the unsigned ICA claimed drivers could accept, reject, and in certain circumstances cancel delivery requests without consequence, when the reality was that if worker did not deliver a parcel on time, there was an automatic deduction from his pay
• the fact the worker had no ability to subcontract out the work
• the fact that any ability to work for competing businesses was illusory, as the worker had to pick up parcels from the respondent’s warehouse the evening prior to his designated delivery run and then work full-time during the day, meaning he had no time to work for himself or anyone else.

The Authority:

• determined the employee was unjustifiably constructively dismissed, as (see paragraph 21):
  • The employer’s actions in blocking the employee from the app when he refused to withdraw his ACC claim were not the actions of a fair and reasonable employer.
  • It was reasonably foreseeable that after he was blocked from the app, the employee would have no choice by to look for work elsewhere.
• ordered the employer to pay the employee:
  • 3 months lost remuneration ($13,574.70) (see paragraph 23)
  • $12,500 as compensation for hurt and humiliation under section 123(1)(c) of the Employment Relations Act 2000(external link) (see paragraph 26).

Huang v Fast Horse Ltd t/a Fast Horse Express [2026] NZERA 224(external link)

BNS Group Ltd (in liq) v Zhuo [2026] NZERA 247

Employment Relations Authority – Costs – Employer in liquidation – Costs against third-party shareholder

At issue was whether the Employment Relations Authority (the Authority) could join a shareholder of the employers to proceedings, for the purpose of making them liable for costs.

The employee:

• was successful in 4 preliminary determinations he brought against the two employer companies (the employers)
• was successful in his own substantive claim
• successfully defended the employers’ claims against him.

The Authority awarded the employee $44,500 in costs, as the successful party.

The costs consisted of:

• $11,250 as an estimate of the tariff for the 4 preliminary matters, 3 of which were held on the papers
• $22,000 as the tariff for six days of investigation meetings for the substantive investigation
• an uplift of $11,250, to take into account:
  • the employers’ conduct that delayed the investigation meeting and increased the employee’s costs
  • the employers’ repeated failure to observe a non-publication order, which required additional submissions and Authority time
  • the employers’ refusal of a Calderbank offer.

At the time of the costs investigation, the two employers  were in liquidation. The employee sought to join a shareholder of the employers to proceedings, so as to make him liable for costs.

The Authority granted the application to join the shareholder and ordered the shareholder to pay the costs (see paragraphs 32, 33). In doing so, The Authority took into account that:

• The Authority and the Employment Court have a broad power to join a person as a party for the purposes of costs where appropriate under section 221 of the Employment Relations Act 2000(external link) (see paragraph 23).
• A third party may be joined for costs where (see paragraph 25):
  • Relevant impropriety by the third party has affected costs.
  • The third party was the “real party” behind the proceedings.
• It was unlikely the employee would be able to recover costs from the employers, who were in liquidation (see paragraph 26).
• The shareholder was the real driver of the litigation (see paragraphs 26, 27).
• The shareholder was penalised for offering a financial incentive to a witness (see paragraph 28).
• The shareholder was the applicants’ accountant and would have known the employer’s financial circumstances, yet chose to bring and to continue litigation (see paragraph 29).
• The shareholder “was to all intents and purposes the owner of” the employers (see paragraph 31).

BNS Group Ltd (in liq) v Zhuo [2026] NZERA 247(external link)