Cases of interest: July 2026

New Zealand Air Line Pilots’ Assoc Inc v Jetstar Airways Ltd [2026] NZEmpC 154

Employment Court – Leave to file cross-challenge out of time

At issue was whether the Employment Court (the Court) should grant the union leave to file a cross-challenge out of time.

The union filed proceedings in the Employment Relations Authority (the Authority) claiming that the employer had breached section 67G(external link) of the Employment Relations Act 2000 (the Act) when it cancelled pilots’ shifts. It claimed the employer failed to provide reasonable notice and reasonable compensation for cancellation of these shifts. The Authority determined that the employer had breached section 67G of the Act.

The employer challenged the Authority’s determination that it had breached section 67G on a non-de novo basis. It claimed that the Authority found at paragraphs 39–40 of its determination that changes to rostered duties were variations of a shift and not cancellations (the disputed paragraphs). The employer claimed the Authority’s determination that it had breached section 67G was inconsistent with the findings in the disputed paragraphs. The union disagreed with the employer’s interpretation of the disputed paragraphs. It filed an amended statement of defence which sought to plead a positive defence to the employer’s claims.

The union sought external advice and filed a second amended statement of defence alongside an application for leave to file a challenge out of time. The overall length of the delay was around 7 months and 2 weeks.

The union submitted that the delay was largely procedural. It submitted the delay was based on 2 unsuccessful attempts at mediation, an evolving response to the employer’s claims and an error on the part of its counsel.

The employer submitted that:

• there was no adequate reason for the delay
• the conduct of the union was uncooperative, which counted against granting leave
• granting the application would:
  • expand the union’s rights to challenge the determination in relation to the disputed paragraphs
  • remove the employer’s settled, vested right in the finality of the disputed paragraphs
  • increase its liability
  • be prejudicial to the employer
• the merits of the union’s claims were weak
• the overall justice did not support the application for leave being granted.

 The Court noted that:

• while the delay was lengthy, there have been cases involving similar delays where applications for leave were granted (see paragraph 22)
• while there were explanations for some parts of the union’s delay, there were two discrete periods of delay which had not been justified (see paragraph 34)
• it would be desirable to allow the parties to make submissions on the meanings of the disputed paragraphs and of the clauses of the collective agreement referenced within those paragraphs. Granting the application would allow the Court to actively grapple with the real dispute between the parties. Any prejudice that may be faced by the employer could be addressed by way of costs (see paragraph 39)
• granting leave would not significantly impact on the employer’s rights and liabilities as (see paragraph 43):
  • while granting leave would undermine the employer’s strategy, given its decision not to challenge the disputed paragraphs, that consequence was an inherent risk of adopting that approach
  • the proposed challenge would not impact the employer’s liability even if the employer’s interpretation was incorrect
• while only a superficial assessment of the merits of the challenge could be undertaken, the proposed challenge was not lacking in merit (see paragraph 50).

The Court considered that the interests of justice required granting the union’s application for leave (see paragraph 54).

New Zealand Air Line Pilots’ Assoc Inc v Jetstar Airways Ltd [2026] NZEmpC 154(external link)

UQB v ACC [2026] NZEmpC 141

Employment Court – Breach of settlement agreement – Compliance order

At issue was whether:

• ACC had breached two settlement agreements
• a compliance order made by the Employment Relations Authority (the Authority) was sufficient
• penalties ordered by the Authority should be increased.

The employee worked for ACC. In 2018 the employment relationship ended and the parties signed a record of settlement (the 2018 settlement agreement). The 2018 settlement agreement provided that the employee’s personal file would be sealed and that neither party would speak ill of the other.

The employee applied for a role with ACC in 2019; however, ACC withdrew the job offer when the employee’s former team leader made disparaging comments about them. The parties attended further mediation and signed a second settlement agreement (the 2019 settlement agreement). The 2019 settlement agreement stated that the employee was able to apply for any role with ACC. It stated that ACC was to instruct 3 employees (including the team leader) to make no comment regarding the employee if asked.

The employee applied for a role with ACC in 2022; this application was unsuccessful as the team leader advised the recruiting manager that they did not consider the employee to be suitable for the role. The employee also applied for a position with ACC in 2023. The application form required them to answer whether they had previously been an employee of ACC and to provide consent for ACC to check their employment records (the consent provision).

The employee lodged proceedings in the Authority. The employee sought a compliance order requiring ACC to take reasonably practicable steps to ensure that staff who were aware of the employment relationship problem in 2018 and 2019 did not speak ill of the employee. They also sought an order requiring ACC to remove the consent provision on the application form. The Authority:

• was not satisfied that the first compliance order sought was capable of being actioned
• was not satisfied that the consent provision prevented the employee from applying for any roles with ACC
• ordered ACC and its employees to comply with the 2018 and 2019 settlement agreements by refraining from speaking ill of the employee
• ordered ACC to pay penalties of $5,000. 

The employee filed a non-de novo challenge to the Authority’s determination. They sought:

• a declaration that ACC had breached:
  • its obligation to allow the employee to apply for available positions
  • its obligation to instruct the team leader to make no comment regarding the employee if approached
• a variation to the compliance order made by the Authority
• an increase in penalties to those ordered by the Authority.

The Court found that:

• there was no evidence that the employee’s sealed file was accessed or considered by the recruitment team (see paragraph 29). Despite understandable concerns about the consent provision, ACC had not breached its requirement to allow the employee to apply for any role (see paragraph 31)
• ACC had complied with its obligation to instruct the team leader not to speak ill of the employee; however, it was unfortunate that the team leader had put ACC in breach of the 2019 settlement agreement by breaching this instruction (see paragraph 35)
• the compliance order made by the Authority reflected ACC’s obligations under the 2019 settlement agreement and was appropriate (see paragraph 37)
• a higher penalty of $8,000 was justified (see paragraph 45).

UQB v ACC [2026] NZEmpC 141(external link)

The New Zealand Nurses Organisation Inc v Health New Zealand [2026] NZERA 484

Employment Relations Authority – Contractual interpretation – Safe staffing levels

At issue was a dispute over the interpretation of a clause within the collective agreement (the safe staffing term).

The safe staffing term stated:

Te Whatu Ora acknowledges that the provision of safe staffing and a safe and healthy workplace is a right for all employees. The Districts each commit to and agree to take all reasonably practicable steps to ensure this outcome including by:

• Having a sufficient number of experienced staff available, including to cover any clinical area.

The union lodged proceedings in the Authority, it claimed that Health New Zealand (Te Whatu Ora) breached the safe staffing term. This was supported by statements from nursing staff working at Christchurch Hospital, Christchurch Women’s Hospital and Christchurch’s Hillmorton Hospital. The union sought compliance orders and penalties. Te Whatu Ora disputed the union’s interpretation of the safe staffing clause. This determination solely addressed the dispute regarding the interpretation of the clause.

The union submitted that the requirement to have a sufficient number of experienced staff available was mandatory and not qualified by the requirement that Te Whatu Ora take all necessary steps to achieve this. It submitted that this interpretation extended to the escalation pathway which applied when employees or midwives considered that the limits of safe practice had been reached.

Te Whatu Ora submitted that the safe staffing term did not have an absolute standalone meaning. It submitted that the ordinary and natural meaning was that its obligation to ensure safe staffing levels required the District Health Boards [now part of Te Whatu Ora] to ‘take all reasonably practicable steps’ to do so.

The Authority considered the internal context found within the collective agreement. It concluded that the language was consistent with the sentence which preceded the safe staffing clause, being “reasonably practicable steps” (see paragraph 27).

The Authority also considered external context, namely records of the facilitator and the Recommendation of the Facilitator which were issued when the parties were bargaining for the current agreement. The facilitator accepted that the obligation on the Districts to take steps to remedy an acute staffing shortage could not be absolute as this could otherwise require them to take steps which were not appropriate or acceptable (see paragraph 32). The recommended wording was adopted into the collective agreement. The Authority accepted that the external context supported the submission for Te Whatu Ora (see paragraphs 34, 35).

The Authority concluded that the safe staffing term was an obligation on Te Whatu Ora that was assessed by whether it had taken all reasonably practicable steps to do so (see paragraph 36).

The New Zealand Nurses Organisation Inc v Health New Zealand [2026] NZERA 484(external link)

Labour Inspector of the Ministry of Business, Innovation and Employment v A Dharni Enterprises Ltd [2026] NZERA 491

Employment Relations Authority – Penalties – Unlawful premium

At issue was whether the employer and its director should pay penalties for breaches of section 12A(external link) of the Wages Protection Act 1983 (WPA), and if so, the quantum of penalties.

The employer operated a small supermarket, trading as Four Square Martina. 2 employees complained to the Labour Inspector that the employer required them to pay $60,000 each in order to secure work and receive Accredited Employer Work Visas. The Labour Inspector investigated the complaints and lodged proceedings in the Employment Relations Authority (the Authority). The sole director of the employer confirmed that they had received 7 payments totalling $125,000, of which only $5,000 related to legitimate immigration and service fees. The director also accepted that they were a person involved in the breaches as the person who had facilitated and received the unlawful premiums.

The Labour Inspector submitted that:

• as identified by the Employment Court, section 12A is an obvious complement to other sections in the WPA because it forms part of a collection of provisions which are designed to prevent exploitation of vulnerable employees or potential employees
• the inherent imbalance of power in employment relationships was amplified as the employees were migrant workers who were new to New Zealand and financially dependent on the employer
• the $60,000 premium per employee was considerable and on the higher end of the level of premiums requested from migrant workers in order to obtain employment
• the employer had use of that money for approximately 2 years, effectively using it to fund the migrant employees at no cost to the company
• as an Accredited Employer under the AEWV scheme, the employer and its director had signed declarations that they did not seek premiums in relation to the employment
• the employer and its director sought to conceal the breaches through the use of intermediaries, offshore payments and other explanations.

The employer submitted that the following mitigating factors should be taken into account:

• the director had a long-standing familial relationship with the employees’ families
• the employer intended to use these funds to pay the employees’ wages and all expenses incurred in assisting them into residency in New Zealand
• the employees were only employed for a brief period of time
• the employer was set to lose its franchise Four Square branding. The consequent loss of that franchise branding would be significant and long-term. The financial and reputational consequences will far exceed any monetary penalty likely to be imposed by the Authority
• there have already been far-reaching consequences for the director personally in their community
• there was no known history of prior breaches of employment standards
• the director accepted responsibility for their actions and had repaid the money.

The Authority considered, among other things, that:

• as new migrants to New Zealand, the employees were particularly vulnerable to the inherent inequality of power in the employment relationship, this was exploited by the employer (see paragraph 29)
• the evidence demonstrated a deliberate and intentional attempt to disguise the purpose of the payments; there was no evidence of contrition (see paragraphs 32, 33)
• the employees’ families lost the use of the money for a 2-year period; this had a considerable financial impact on them considering the large sums of money sought (see paragraph 34)
• the employer had effectively used the employees’ premiums to pay their own wages, which had provided the employer with a financial advantage (see paragraph 35)
• the director ultimately acknowledged the breaches and repaid the premiums (see paragraph 36)
• it took the Labour Inspector’s action for the repayments to occur; the Employment Court has previously highlighted that care needs to be taken when considering repayments of statutory entitlements as a mitigating factor (see paragraph 37).

The Authority ordered the employer to pay $32,000 in penalties (see paragraph 46) and its director to pay $16,000 in penalties (see paragraph 49).

Labour Inspector of the Ministry of Business, Innovation and Employment v A Dharni Enterprises Ltd [2026] NZERA 491(external link)

Semenoff v Stan Semenoff Transport Ltd [2026] NZERA 443

Employment Relations Authority – Employment status – Familial relationship

At issue was whether the worker was an employee.

The worker was previously employed by the company. The company was part of a group of companies owned by the worker’s father (the Group). In 2021, the parties entered into negotiations as to how the worker would do business with companies within the Group. The company removed the worker from their payroll and made fortnightly payments to the worker’s company for services the worker provided to the Group instead.

The company advised the worker that it was experiencing cashflow pressures and reviewing its expenditure. It stated that the worker had not undertaken any work for the company in the last 12 months despite its continued payments to the worker’s company. The company stopped making any payments to the worker with immediate effect. The worker raised a personal grievance for unjustified dismissal and sought reinstatement. The company denied that the worker was an employee at the relevant time or that there was any role they could be reinstated into.

The worker submitted that:

• the change to the way they were paid was largely an administrative change that did not reflect the substance of their role
• the payments they received and the other benefits they had access to were not family support but a reflection of the fact that they undertook work for their father’s companies
• they attended to the requirements of other companies within the Group and undertook these actions as an employee of the company
• they were not an independent contractor as they did not issue invoices, negotiate commercial terms, or bear any commercial risk.

The company submitted that:

• the changes to the way in which the worker was paid reflected a change in their professional relationship and a move to contractor status
• the payments made to the worker’s company were not purely commercial in nature but were intended to support the worker and the worker’s children
• the worker had left to pursue their own business ventures and had not performed work for it as an employee since the changes made in 2021.

The Authority noted that:

• the worker was once an employee on the company’s payroll, which demonstrated that the parties had previously turned their minds to what it meant to be in an employment relationship (see paragraph 37)
• it was more likely that the payments made to the worker’s company were for the dual purpose of providing familial support and to compensate the worker for services they provided as an independent contractor (See paragraph 40)
• the worker enjoyed benefits on a basis which appeared to have been better than market value, in large part this was because they were the owner’s son (see paragraph 41)
• the relationship between the worker and their father became strained, it was unlikely that an employment relationship would have survived some of the interactions and difficulties that occurred between the parties (see paragraph 42)
• the contractual rights and obligations between the parties were inconsistent with those found in an employment relationship; to the extent that the company exerted influence over the worker this was predominantly due to shared commercial interests (see paragraph 43)
• the worker represented themselves as being an Operations Manager. While this would tend to show some level of integration into the company, it was also explained as being a title that was useful for their commercial interests and as an independent contractor (see paragraph 44).

The Authority concluded that the worker was not employed by the company at the relevant time, accordingly it did not have jurisdiction to hear their claims (see paragraph 45, 46).

Semenoff v Stan Semenoff Transport Ltd [2026] NZERA 443(external link)