Cases of interest: May 2026

St Arnaud Alpine Store 2019 Ltd v Labour Inspector of the Ministry of Business, Innovation and Employment [2026] NZEmpC 86

Employment Court – Penalties – Reduction for financial circumstances
Employment Court – Non-publication order

At issue was:

• a challenge to the quantum of penalties imposed by the Employment Relations Authority (the Authority) for admitted breaches of minimum employment standards
•  a challenge to the Authority’s decision to decline the employer’s request for a non-publication order.

The Labour Inspector investigated the employer and its sole director after receiving complaints from three employees. The employer and its director agreed that they owed the employees a total of $108,618.93 and that they had breached:

• section 6(external link) of the Minimum Wage Act 1983
• sections 16(external link), 21(external link), 23(external link), 24(external link), 25(external link), 27(external link), 40(external link), 49(external link), 50(external link), 55(external link), 56(external link), 60(external link), 71(external link) and 81(external link) of the Holidays Act 2003
• sections 69ZD(external link) and 130(external link) of the Employment Relations Act 2000 (the Act).

The Authority imposed penalties of $91,000 on the employer and penalties of $45,500 on the director as a person involved in the breaches.

The employer and the director submitted that:

• No penalties should be imposed, or if penalties were imposed, the amount imposed by the Authority was excessive and should be reduced to reflect their financial circumstances.
• The Authority had evidence before it which showed the financial strain that the business was under.
• It was futile to impose a penalty on a party who could not pay.
• Any assessment of penalties should also give greater credit to the employer for their cooperation in the investigation and to recognise the payments they already made to the impacted employees.

The Labour Inspector submitted that:

• The penalties imposed by the Authority were appropriate, given its findings that the breaches were significant and the employer was highly culpable.
• The minor discount recognising the employer’s financial circumstances was sufficient and appropriately weighted.
• The Authority’s conclusions can be compared to other cases where significant penalties were imposed.

The Court reduced the employer's penalties to $30,000 and the director's penalties to $15,000 (see paragraph 49). In doing so, the Court considered that:

• Even a modest penalty will be felt by a party who has limited means; the purpose of section 133(external link) of the Act will not be lessened or undermined if the penalty responds to the party’s financial circumstances (see paragraph 45).
• The Authority gave insufficient weight to the financial circumstances of the employer and the director, leading to excessive penalties (see paragraph 48).
• While the circumstances of the breaches would have otherwise justified significant penalties, the amounts ordered by the Authority were unaffordable (see paragraph 48).
• The decisions relied on by the Labour Inspector were not comparable, as those decisions involved a lack of evidence regarding the employer’s financial situation, which was not the case in the current proceedings (see paragraph 46).

The Court was not satisfied that the circumstances justified a departure from the principle of open justice, or that the Authority had erred in declining a non-publication order (see paragraph 67). The Court dismissed this aspect of the challenge (see paragraph 67).

St Arnaud Alpine Store 2019 Ltd v Labour Inspector of the Ministry of Business, Innovation and Employment [2026] NZEmpC 86(external link)

Bagrie v Air New Zealand Ltd [2026] NZEmpC 89

Employment Court – Covid-19 – Lawfulness of vaccination policy

At issue was whether Air New Zealand was entitled to adopt a vaccination policy in response to health and safety risks posed by Covid-19.

In November 2021, Air New Zealand implemented a vaccination policy, under this policy certain roles could only be performed by employees who were vaccinated against Covid-19. This policy remained in force until it was withdrawn by Air New Zealand in October 2022. Air New Zealand reserved the right to terminate the employment of those who did not comply with the policy.

33 former Air New Zealand employees lodged personal grievances against Air New Zealand for unjustified dismissal or unjustified disadvantage arising from the impacts of the policy on their employment. The Employment Relations Authority removed the question of whether Air New Zealand was entitled to adopt the vaccination policy to the Employment Court (the Court). It suspended the investigation of the personal grievances pending the Court’s judgment.

The employees submitted that:

• The policy was inconsistent with section 11(external link) of the New Zealand Bill of Rights Act 1990 (NZBORA) as it limited the employees’ right to refuse medical treatment.
• The health and safety rationale relied on by Air New Zealand was flawed.
• Even if the policy was lawful at its conception, it became unlawful during its existence due to the changing risks posed by Covid-19.

Air New Zealand submitted that:

• There was no automatic prohibition on an employer adopting a policy such as the vaccination policy adopted by Air New Zealand.
• The NZBORA did not apply to a private employer who was not performing any public function, power, or duty.
• The Health and Safety at Work Act 2015(external link) (HSWA) requires employers to provide a safe workplace for employees; employers are not exempt from this duty where compliance may involve a medical procedure.
• If Parliament had considered a vaccination policy unlawful because it limited employees’ rights, schedule 3A(external link) of the Employment Relations Act 2000 would not have been enacted.
• Under some existing collective agreements, certain employees had already agreed to receive vaccinations as required for their duties.

The Court found that Air New Zealand was entitled to implement the vaccination policy and that the policy remained lawful until it was withdrawn (see paragraph 158). In coming to this conclusion, the Court considered:

• Air New Zealand has a statutory duty to take steps to control the spread of a serious illness in a workplace; the policy was a proportionate response to their duties under the HSWA (see paragraph 97).
• When Air New Zealand was considering adopting the policy, Medsafe had approved the vaccine as safe and effective for use; Air New Zealand was entitled to rely on this approval (see paragraph 124).
• When it reviewed the policy in 2022, Air New Zealand knew that the virus continued to impact its workforce. It would have been an irresponsible departure from its duties under the HSWA to remove the policy earlier than it did (see paragraph 142).
• The consultation process undertaken by Air New Zealand was not deficient (see paragraph 147).
• Alternatives proposed by the employees, such as rapid antigen testing, were not appropriate controls due to their shortcomings (see paragraph 154).

Bagrie v Air New Zealand Ltd [2026] NZEmpC 89(external link)

Labour Inspector of the Ministry of Business, Innovation and Employment v Temple [2026] NZEmpC 109

Employment Court – Limitation period – When cause of action arose

A key issue was whether claims advanced in any of the four related proceedings were time-barred.

Former members of the Gloriavale Community (the Community) lodged two proceedings against members of the Community’s leadership team. The Employment Court (the Court) released two status judgments in 2022 and 2023 which held that the former members were employees. The Court released two further judgments in 2023 and 2024 as to the identity of the employer. The oldest of the employees began full-time work in 1994. The employees began working from as young as six years old. The employees sought wage arrears and submitted claims against the leadership team for breaches of minimum entitlements, breach of contract, and personal grievances.

The Labour Inspector previously investigated the work undertaken in the Community. In 2017 it issued a report which recorded the long hours worked by the employees without pay. The 2017 report concluded that the former members were not employees, but that if they could be considered employees there were serious breaches of employment standards. Following the Court’s judgments on the identity of the employer, the Labour Inspector lodged two proceedings against the leadership team on behalf of the employees for declarations of breach of minimum entitlements, compensation orders and pecuniary penalties.

The limitation period at issue for most of the claims was section 142(external link) of the Employment Relations Act 2000 (the Act), which provides:

No action may be commenced in the Authority or the court in relation to an employment relationship problem that is not a personal grievance more than 6 years after the date on which the cause of action arose.

Other applicable limitation periods were in respect of the employees’ personal grievance claims under section 114(external link) of the Act and the Labour Inspector’s application for pecuniary penalties under section 142I(external link) of the Act. 

The employees submitted that:

• An exception to section 142 existed in cases of fraud; they were victims who were deliberately misled by the employer about their employment status.
• The limitation period can be assessed by reference to reasonable discoverability.

The Community’s leadership team submitted that:

• Section 142 was to be read strictly and did not provide any exceptions.
• The possibility of inserting an exception for reasonable discoverability was raised to Parliament but not adopted, this omission reflected the position that the test was based on the occurrence of the event and not knowledge of the facts.
• Section 135(5)(external link) of the Act was amended in 2004 to introduce a reasonable discoverability test; it was possible for Parliament to have amended section 142 at the same time but it did not.

The Labour Inspector submitted that:

• It did not have sufficient knowledge to bring proceedings until the Court’s 2023 and 2024 judgments as to the identity of the employer.
• The Court had the power to extend time if section 142 would otherwise prevent the matter from progressing.

In relation to the employees’ claims for wage and holiday arrears, the Court:

• found that the circumstances within the Community:
  • prevented the employees from understanding the facts required to bring a claim (see paragraph 65)
  • prevented the employees from submitting any claims as they could not access legal information or complain to any external authority (see paragraph 66)
• concluded that the time period started for each employee sometime after they left the Community and stopped when the first statement of claim was filed in each set of proceedings (see paragraph 75)
• found that the employee who was the earliest to leave the Community filed proceedings within a period of less than five years; it followed that all of the other employees were within time (see paragraphs 77 and 78) 
• declined to dismiss any of the wage arrears claims (see paragraph 79).

In relation to the employees’ personal grievance claims, the Court:

• found that the employees had not raised personal grievances within the 90-day timeframe (see paragraph 88)
• noted that the employees were entitled to apply to raise personal grievance claims out of time and directed such applications to be filed promptly (see paragraphs 89, 90).

The Court dismissed the Labour Inspector’s claims (see paragraph 131). In doing so, it:

• found that the Labour Inspector had actual knowledge of the material facts many years earlier, despite the conclusions of the 2017 report (see paragraph 120)
• found that the time-period for the Labour Inspector’s claims started on the day that the 2017 report was finalised and stopped when it filed proceedings in September 2024 (see paragraph 124)
• found that the Labour Inspector was out of time for all of its claims (see paragraphs 124, 126)
• noted that even if the Court had the discretion to extend the limitation period, the Labour Inspector failed to progress any claims within one year of the 2022 status judgment, this would have weighed significantly against the exercise of such discretion (see paragraph 130).

Labour Inspector of the Ministry of Business, Innovation and Employment v Temple [2026] NZEmpC 109(external link)

Kennedy v Remarkable People Ltd [2026] NZERA 296

Employment Relations Authority – Personal grievance – Constructive dismissal – Workplace safety

At issue was whether the employee was unjustifiably disadvantaged or unjustifiably constructively dismissed.

The employee was an account manager at a recruitment and labour supply business. The employee stated that a candidate in their case load made inappropriate comments to them in person, over the phone, and by message. The employee was the only employee in the branch’s office following a restructuring and the departure of other employees. The candidate attempted to communicate with the employee after hours and would appear at the office unannounced. When the employee raised this to the employer, the employer concluded that there was insufficient evidence to conduct a disciplinary investigation into the candidate.

The employee continued to raise concerns with the employer about the candidate’s behaviour, which they described as increasingly aggressive. The employer put a plan into place which included allowing the employee to lock the office door and making it clear to the candidate that the employee would no longer manage the candidate; the candidate was to report to the National Key Accounts Manager. The candidate continued to contact the employee and turn up at the office unannounced. The employee requested to work from home until another employee could be hired due to safety concerns; the employee also raised the possibility of meeting candidates in other public places. The employer told the employee that there were no alternatives to working in the office and that they could not hire another employee for at least three months. The employee told the employer that they did not feel safe remaining in the role. The employee resigned.

The employee submitted that:

• The employer did not take their concerns regarding the candidate seriously.
• They felt so unsafe that they had no choice but to resign.

The employer submitted that:

• The employee failed to notify them of their concerns after they put the plan into place, it could not have known how serious the situation was.
• It took reasonable steps to address the concerns it was aware of.
• The employee chose to resign for their own reasons.

The Authority noted that:

• Employers failing to take steps to prevent an employee from harm in the workplace have previously given rise to findings of constructive dismissal (see paragraph 96).
• There is an implied term requiring employers to provide a safe workplace, giving rise to an expectation that once an employer is aware of ongoing harassment, it is reasonable to expect them to take appropriate steps (see paragraph 97).

The Authority concluded that:

• The employer did not address the fact that the plan they put into place had failed (see paragraph 109).
• The employer’s actions were breaches of the duty of good faith and the duty to provide a safe workplace (see paragraph 109).
• The employer failed to properly investigate the content and frequency of the communications (see paragraph 111).
• It was reasonably foreseeable that the employee would have resigned; the employee was constructively dismissed (see paragraphs 111, 112).
• The actions of the employer, in minimising the employee’s concerns regarding the escalated behaviour of the candidate, were not justified (see paragraph 115).

The Authority awarded the employee $20,000 in compensation (see paragraph 22) and lost wages equivalent to 5.5 weeks wages (see paragraph 128).

Kennedy v Remarkable People Ltd [2026] NZERA 296(external link)

Balachandariyar v Civtec Ltd [2026] NZERA 302

Personal grievance – Unjustified dismissal – Medical criteria

The employee worked as a Fibre Technician. The employee could not perform underfloor or ceiling work due to bronchial asthma. The employee had informed the employer of this on a number of occasions. The employer advised the employee of operational changes which would require the employee to perform underfloor or ceiling work. The parties agreed that the employer could investigate suitable mask options which might allow the employee to perform such work. The employee’s GP advised the employer that a mask fitting place had declined their referral and that the employer should contact them directly. The employer did not do so.

The employee sustained an injury to their wrist at the workplace. Before the employee could complete an occupational health assessment, the employer commenced a restructuring process, proposing to reduce the number of employees. The employer informed the employee that they did not score highly enough against the criteria of the new positions. The employer terminated the employment on the basis of redundancy.

The employee accepted that the employer had genuine business reasons for the restructuring but submitted that the dismissal was procedurally unjustified. The employee also submitted that they were unjustifiably disadvantaged by the employer’s failure to adequately support them following their wrist injury.

The Authority examined the criteria and noted that:

• In relation to criterion 9 – whether employee completes physical aspects of the role:
  • The employer could not mark the employee down for the limitations caused by their asthma without considering the impacts of any reasonable accommodations or other risk mitigation methods (see paragraph 117).
  • The employer was responsible for the lack of suitable mask being found.
  • The employee’s mark for this criterion was unjustified and premature without an assessment of how a suitable mask could have assisted the employee.
• In relation to criterion 8 – whether employee completes all key functional tasks of the role:
  • The employer was predominantly influenced by the employee’s asthma and wrist injury (see paragraph 131).
  • The wrist injury was temporary and should not have been noted at all (see paragraph 134).
  • The employee had been discharged, making the employer’s assessment of the wrist injury both unjustified and unfair (see paragraph 134).
  • The employee might have expected higher marks had the employer properly assessed this criterion, as no evidence was present suggesting that the employer had previously raised issues of technical expertise with the employee (see paragraph 135).
• In relation to criterion 3 – whether employee used excessive sick leave out of entitlement:
  • If the three days’ unpaid sick leave taken by the employee related to their wrist injury, it was not justified to mark the employee down for them (see paragraph 154).
  • Previous absences for a temporary condition the employee has fully recovered from should have no bearing on an assessment which should be forward-looking (see paragraph 155).
  • If these absences were not counted against the employee, they would have been entitled to score full marks for this criterion (see paragraph 156).

The Authority found that the restructuring became a de facto medical incapacity process for the employee and concluded that the employee was unjustifiably dismissed (see paragraph 157). The Authority also found that the employer’s failure to adequately support the employee following their wrist injury unjustifiably disadvantaged the employee (see paragraph 166).

The Authority ordered the employer to pay:

• three months’ lost remuneration of $14,534 (see paragraph 185)
• compensation of:
  • $20,000 for the unjustified dismissal grievance (see paragraph 188) and
  • $3,000 for the unjustified disadvantage grievance (see paragraph 191).

Balachandariyar v Civtec Ltd [2026] NZERA 302(external link)