Angus Jowitt v Gokula Music Limited [2026] NZERA 297

This case is a useful example of a messy small-business employment relationship where the absence of written terms, payslips and proper records created predictable problems. Angus Jowitt worked in a second-hand musical instrument store, was paid cash, and later claimed wage arrears, holiday pay, compensation and penalties. Gokula Music Limited said he had resigned after an argument over coffee. The Employment Relations Authority (ERA) found there had been no clear resignation, the employer's later text ended the employment, and the dismissal was unjustified. The full determination is embedded at the end of this page.

Background

Gokula Music Limited operated a second-hand musical instrument store in Newmarket, Auckland. Gregory Masson was its sole director. When Mr Jowitt started working for Gokula, the store was still preparing to open and was not yet trading. The opening was delayed, including because of two bereavements in Mr Masson's immediate family.

Mr Jowitt first learned of the opportunity through a radio advertisement inviting "guitar nerds" to apply. He spoke with Mr Masson, emailed his CV, and then met him around late April or early May 2023. At the time, Mr Jowitt was receiving income support from Work and Income New Zealand.

The evidence about the initial arrangement was disputed. Mr Jowitt said he was an employee from the outset. Mr Masson said Mr Jowitt had initially agreed to work as a contractor before changing his mind and wanting to be an employee. The parties did agree on the core pay figure: $27 per hour. The practical problem was that Mr Jowitt was paid only $20 per hour in cash, with Mr Masson saying the remaining $7 was retained on account of tax.

No written agreement, no payslips, and poor records

There was no written employment agreement. Mr Jowitt did not receive payslips. He was paid cash by Mr Masson, irregularly but generally weekly or fortnightly. He recorded his hours in a diary kept at the premises.

The diary records were important. Mr Masson accepted their accuracy. They showed Mr Jowitt worked 636.5 hours between 20 May 2023 and 4 November 2023. His ordinary working pattern was Wednesday to Sunday, around 5.5 hours each day, or 27.5 hours per week.

The ERA described the arrangements as ad hoc and uncertain. Unsurprisingly, the uncertainty led to different expectations and interpersonal conflict. Mr Jowitt said he avoided raising wage issues because he feared doing so could jeopardise his employment. Mr Masson said Mr Jowitt refused to provide information such as his IRD number and later became volatile or aggressive.

The argument over coffee and the text messages

By November 2023, the employment relationship had become fraught. On 15 November 2023 there was an argument over coffee. Mr Jowitt accepted that he said words to the effect of "this isn't working for me anymore" and then left for the day. His position was that he did not intend to resign and believed he could return the next day.

At 7:37am on 16 November 2023, Mr Masson texted Mr Jowitt saying, in substance, that it was not working out between them, that he needed good communication, and that when Mr Jowitt stated he was leaving, Mr Masson had to accept that. Mr Masson asked Mr Jowitt to give him a suitable time to come in and square things up.

On 21 November 2023, Mr Masson sent a further text saying that due to their communication issues Gokula would not be continuing with Mr Jowitt's association with the shop and asking when he wanted to collect his belongings. Later communications were about collecting personal items and instruments. The ERA treated 21 November 2023 as the final day of employment.

Resignation or dismissal?

This was the first major issue. Gokula said Mr Jowitt resigned on 15 November 2023 and later regretted it. Mr Jowitt said he never resigned and that Mr Masson's messages amounted to dismissal.

The ERA applied the established distinction between a clear resignation and a situation where words said in heat or ambiguity cannot objectively be treated as a resignation. The Authority discussed cases including Corcoran v Rogerson & Howell (t/a Dormello Stud), Dahl v Knight Train Haulage Ltd, and Vermuelen v Mikes Transport Warehouse Ltd. The point was not that an employer must always give a cooling-off period whenever an employee resigns. Where there is a clear and unequivocal resignation, an employer is generally entitled to act on it. But this was not such a case.

Mr Jowitt's words on 15 November were not a clear and unambiguous resignation. Mr Masson effectively accepted that himself. During the investigation meeting, he said he sent the 16 November text because he expected Mr Jowitt might return the next day and he wanted to avoid awkwardness and further confrontation. That undermined Gokula's position that he truly believed Mr Jowitt had already resigned.

Once it was clear Mr Jowitt did not intend to resign, Mr Masson needed to deal with that directly. Instead, when he could no longer rely on a supposed resignation, he sent the 21 November text ending the employment. The ERA found that text was clear and unambiguous and had the effect of ending Mr Jowitt's employment.

Why the dismissal was unjustified

Section 103A of the Employment Relations Act 2000 asks whether the employer's actions were what a fair and reasonable employer could have done in all the circumstances. The ordinary procedural questions are familiar: did the employer investigate adequately, raise concerns with the employee, give a reasonable opportunity to respond, and genuinely consider that response?

None of those basic steps happened. The ERA accepted Gokula was a small business with limited resources, but that did not excuse the absence of basic procedural fairness. Mr Jowitt knew there were concerns about aspects of his attitude and communication, but by the time of the 16 November text Mr Masson's mind had closed to the prospect of continued employment. Mr Jowitt was never given a genuine opportunity to respond.

Mr Masson also referred to the arrangement as a kind of trial period. That did not assist Gokula. He accepted he was not talking about a statutory 90 day trial period under s 67A. He also accepted that, because the terms were not recorded in writing, no statutory trial period could be valid anyway. The ERA found there was no basis in law, and no sufficient evidence in the verbal agreement, for a probationary or introductory term that could justify what occurred.

The ERA found the dismissal was unjustified.

Money owed for wages, notice and holidays

The ERA dealt with the wage and holiday claims separately from the unjustified dismissal remedies. Mr Masson accepted the agreed rate was $27 per hour. Mr Jowitt accepted receiving $20 per hour for the hours he worked. The ERA did not treat the $20 cash payment as a minimum wage breach because the agreed wage was $27 per hour, with the balance retained on account of tax and now to be dealt with properly.

The ERA used the diary records and found that Mr Jowitt should have been paid $17,185.50 gross in wages for the hours worked from 20 May 2023 to 4 November 2023, but had received $12,730. That left ordinary wage arrears of $4,455.50.

Mr Jowitt had not been paid wages after 4 November 2023 through to his final day of employment on 21 November 2023. Using his ordinary working pattern, the ERA assessed this as a further 55 hours, worth $1,485 gross. It also found Mr Jowitt was entitled to reasonable notice despite the absence of a written agreement. Two weeks' notice was reasonable, adding another 55 hours and another $1,485 gross.

There were also public holiday and annual holiday issues. Mr Jowitt worked 3.5 hours on Matariki 2023, an otherwise working day for him, but was paid only his ordinary cash rate. He was owed the difference for time-and-a-half and the value of an alternative holiday. Because the employment lasted less than 12 months, annual holidays were calculated at 8 per cent of gross earnings.

Unjustified dismissal remedies

Lost wages: one month, $2,970

Mr Jowitt was entitled to consideration of lost wages because he had established a personal grievance for unjustified dismissal. The ERA considered mitigation and the likely duration of the employment relationship had the dismissal not occurred.

The evidence of mitigation was limited. Mr Jowitt said he applied for at least two jobs, continued voluntary work at a student radio station, cared for a family member, and continued selling and trading instruments online. The ERA was not satisfied that the employment was likely to continue for another three months or that Mr Jowitt had taken reasonable steps to mitigate beyond a short period.

The ERA found he had lost the equivalent of one month of ordinary time remuneration because of Gokula's actions. Gokula was ordered to pay $2,970 as compensation for lost wages.

Hurt and humiliation: $2,000

The evidence of hurt and humiliation was also limited. Mr Jowitt said the dismissal was "pretty tough" and affected his self-confidence. The ERA noted that unjustified dismissal is inherently distressing, but it cannot simply assume injury to feelings without evidence.

Mr Jowitt had also effectively capped his financial claim and had told the ERA that a couple of thousand dollars for compensation was fair in his circumstances. The Authority found the distress was minor and short-term and awarded $2,000 under s 123(1)(c)(i).

No contribution reduction

The ERA considered whether remedies should be reduced under s 124 for blameworthy conduct by Mr Jowitt that contributed to the situation giving rise to the grievance. The unorthodox wage and employment arrangements were not solely his actions and were not blameworthy conduct by him. They were also not sufficiently proximate to the dismissal.

The dismissal happened because Mr Masson considered the working relationship had become fraught and dysfunctional. That did not justify reducing Mr Jowitt's remedies. No contribution reduction was made.

Penalties for employment standards breaches

Gokula also faced penalties for breaches of minimum employment standards. The ERA identified five breaches:

• failure to provide a written employment agreement;
• failure to keep a wages and time record;
• failure to keep a holiday and leave record;
• failure to pay properly for work on a public holiday; and
• failure to provide an alternative holiday.

The ERA treated the Employment Relations Act breaches and Holidays Act breaches separately but used a global approach within each statute because the breaches arose from the same employment relationship. It considered starting points of $10,000 for the Employment Relations Act breaches and $15,000 for the Holidays Act breaches, then allowed a 25 per cent reduction for Gokula's limited resources.

Even after that, the ERA considered $7,500 and $11,250 would be disproportionate in the circumstances. The breaches were serious, but they affected only Mr Jowitt, were not found to be deliberate or wilful, and did not materially obstruct the investigation because the diary records were available and accepted as accurate. Final penalties were set at $1,500 for the Employment Relations Act breaches and $2,000 for the Holidays Act breaches.

Total penalties were $3,500. Of that, $1,000 was payable to Mr Jowitt to recognise that his claim brought the non-compliance to the Authority's attention. The balance was payable to the Crown.

Why this case matters

This determination is a practical warning for small employers. An informal arrangement may feel workable at the start, but no written agreement, cash payments, no payslips and inadequate records are a poor foundation for defending an employment dispute. When the relationship breaks down, the employer may have little documentary protection and may also face penalties for minimum standards breaches.

The case is also useful on resignation disputes. Employees sometimes say something vague or emotional during conflict. Employers should be slow to treat ambiguous words as a final resignation, especially where the employee later makes clear that they did not intend to resign. If the employer then sends a message saying the relationship will not continue, that may be the dismissal.

Finally, the case shows that a supposed "trial", "probation" or "introductory" arrangement is not a shortcut around dismissal law. A statutory trial period must comply with the Act. A probationary period needs clear contractual foundation. Neither existed here.

Practical takeaways

• Ambiguous words are not always resignation: words said during an argument need to be assessed objectively and in context.
• Confirm before acting: if an employee may have resigned but the wording is unclear, the safer course is to ask and document the answer.
• A text can dismiss: a message saying the employer will not continue the relationship can be enough to end employment.
• Small business is not a defence to no process: limited resources do not excuse basic procedural unfairness.
• No written trial period means no statutory trial period: an employer cannot rely on a 90 day trial period unless the statutory requirements are met.
• Cash wages create risk: the employer still needs proper wage, time, holiday and leave records, plus payslips or records capable of explaining what was paid and why.
• Public holiday obligations matter: if an otherwise working day is worked, time-and-a-half and an alternative holiday may both be required.
• Penalties can follow even where arrears are also ordered: arrears compensate the employee; penalties address non-compliance with minimum employment standards.

Read the full ERA determination (embedded)

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Source: Employment Relations Authority determination hosted on determinations.era.govt.nz.