Bridget Addy v Auckland Steam 'N' Dry Limited and Graeme Stephens [2022] NZERA 657

A detailed, plain-English summary of an Employment Relations Authority (ERA) determination about constructive dismissal and a "trial period" threat made by text message. The full determination is embedded at the end of this page.

What happened

The employee started work as an administrator on 14 September 2020. Her pay rate was $22.50 per hour for 40 hours per week. She said she received very little training, was sometimes left running the office alone, and (critically) was never given or asked to sign a written employment agreement.

In mid-October 2020 she was off sick for two days. Shortly afterwards, the employer texted performance concerns and added that unless she followed a task management role and supplied weekly reports, she was not going to make it out of the "3-month trial".

The employee treated that as a threat. She resigned effective immediately on 20 October 2020. The employer replied that the "NZ standard" was two weeks' notice, and then warned that if she did not work out her notice a "standard" 40-hour wage deduction would occur. The employer referred to a "standard" administrator employment agreement, but the Authority found there was no signed agreement in place and no contractual trial period applied.

What the Authority had to decide

The Authority addressed (among other things): whether the employee was actually or constructively dismissed; whether the dismissal was justified under the s 103A test; whether there was default or withholding of wages; whether penalties should be imposed for statutory breaches; whether remedies should be reduced for contribution; and the employer's $10,000 counter-claim.

Key findings

• Text message performance management was inappropriate: the Authority found performance concerns should have been raised face-to-face in good faith, in a supportive way, rather than by text.
• No trial period existed: there was no written employment agreement providing for a trial period, so the employer was not entitled to suggest the employee was on a trial.
• The trial threat was intimidatory: the factually incorrect trial reference had a severe impact and was held to breach the duty not to undermine trust and confidence.
• Constructive dismissal was established: the Authority found the resignation was caused by the employer's breach of duty, and resignation was reasonably foreseeable.
• Unjustified dismissal: the constructive dismissal was held to be unjustified because it was not what a fair and reasonable employer could have done in all the circumstances.
• No notice required: because the resignation was caused by the employer's breach, the employee was not required to work out notice.

Wages and payment issues

The determination also deals with late final pay, holiday pay, and deductions. The employee claimed arrears (including 40 hours of wages and holiday pay). The employer said it could not finalise payment without a paper timesheet. The Authority rejected that as a basis to withhold final pay and found related statutory breaches.

Orders and payments

• Penalty: $2,000 global penalty for breaches (including employment agreement record-keeping, Holidays Act, Wages Protection Act, and good faith). Payable to the employee within 28 days. The order was made against the company, and if it could not pay, against the individual respondent.
• Reimbursement (lost remuneration): $3,600 gross (4 weeks at $22.50/hr x 40 hrs), payable within 28 days.
• Compensation (hurt and humiliation / injury to feelings): $8,000, payable within 28 days.
• Counter-problem: the employer's counter-claim for $10,000 was dismissed (including because the Authority found no proven loss and no notice obligation given the employer's breach).
• Costs: costs were reserved, with a memorandum timetable in the determination.

Why this case matters

• Do not invent "standard" rules: notice periods, deductions, and trial periods need an agreed contractual basis (and statutory compliance).
• Process and tone matter: how concerns are raised can itself create legal risk (including constructive dismissal findings).
• Payment obligations are strict: final wages and entitlements must be paid, and employers should not create artificial process barriers to payment.

Read the full ERA determination (embedded)

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