Daniel Bly v FutureCo Limited [2026] NZERA 269

This determination is a useful case study for tech businesses running high-pressure delivery cycles: it deals with (1) extreme additional hours being demanded from a salaried employee, (2) a disciplinary process driven by social media posts and internal messages, and (3) remedies including compensation, leave arrears, and lost remuneration with a significant contribution deduction. The full determination is embedded at the end of this page.

Background and the project pressure

FutureCo Limited (FCL) is a small Auckland software business (about nine employees) specialising in complex software development, gamification and marketing. Mr Bly was its only full-time software developer and was the lead developer for a client delivery: the "KFC 6 & Shout" game inside the KFC mobile application, with a hard delivery deadline at the end of November 2024.

Under the reporting line, Mr Bly reported to the director, Oz Jabur. Another developer, Luke McGregor, worked under Mr Bly's direction on the same project. By mid-November 2024, the evidence accepted by the Authority was that Mr Bly was exhausted from sustained long hours to meet the deadline, and stress was escalating.

Unjustified disadvantage claim 1: excessive additional hours

The employment agreement set "usual hours" at 40 hours Monday to Friday and also contained an overtime-style clause: additional hours could be required for business needs, could not be unreasonably refused, and salary was said to cover "all hours worked" (overtime not payable). The key question was whether the additional hours demanded were reasonable in practice.

Mr Bly used objective "git commit" data (a software version control audit trail) to demonstrate work after 5pm and late at night. The Authority accepted that between 5 September 2024 and 25 November 2024, Mr Bly worked an additional 278 hours beyond ordinary hours. That level of overtime was treated as unreasonable, even though the salary clause said overtime was included.

The Authority therefore held Mr Bly was unjustifiably disadvantaged by being required to work excessive hours over that period. The disadvantage finding was also relevant context for understanding why he later acted impulsively and unprofessionally when exhausted.

Unjustified disadvantage claim 2: health and safety (stress and fatigue)

Mr Bly argued the excessive workload meant FutureCo failed to maintain a healthy and safe workplace, with fatigue and stress risks that the employer knew or should have known about. The Authority accepted FutureCo became aware (at least by 20 November 2024) that Mr Bly was working extreme hours and struggling.

However, the Authority found this claim did not succeed. It focused on what the director did once the problem was clearly raised: there was a recorded call where the director acknowledged "crazy hours", discussed getting contractor support, and encouraged Mr Bly to look after himself. In the context of a small business facing a fixed client deadline, those steps were treated as reasonably practicable support.

The conduct allegations: Slack/text messages and Instagram posts

The later disciplinary process focused on two sets of conduct:

• Internal communications: blunt and aggressive messages to Luke McGregor via Slack and text (20-21 November 2024), in which Mr Bly asserted his seniority and expressed frustration.
• Social media: a sequence of Instagram "story" posts made overnight 25-26 November 2024 about long hours and stress, including a live video where Mr Bly vented about his "boss".

Most posts were restricted to followers and expired automatically after 24 hours. Views were modest (generally in the tens). Only limited content tangentially pointed to the employer (for example, a search box containing "Future Co Labs" on one image). Mr Bly phoned the director on 26 November 2024 to alert him the posts existed, rather than waiting for discovery.

Garden leave, suspension, and the disciplinary meeting

On 27 November 2024, FutureCo placed Mr Bly on paid garden leave and issued a letter proposing paid suspension while it investigated misconduct allegations. Mr Bly responded, said he wanted to stay employed, explained sleep deprivation, and agreed to paid suspension. The Authority held the suspension decision was not an unjustified disadvantage because the proposal was put to Mr Bly and he agreed.

A disciplinary meeting was held on 5 December 2024. Notes recorded Mr Bly accepted the posts were inappropriate and unprofessional, attributed the behaviour to exhaustion, apologised, and said it would not recur. After a short break, FutureCo terminated employment effective immediately. The termination letter said the allegations had been substantiated and the decision followed consideration of Mr Bly's responses.

Unjustified dismissal: why the "serious misconduct" dismissal failed

The Authority applied the s 103A test: whether the dismissal, and the way the employer acted, was what a fair and reasonable employer could have done in all the circumstances. It also examined whether a fair employer could characterise the conduct as "serious misconduct" that destroyed trust and confidence.

The Authority held the dismissal was unjustified. The core reasons included:

• Serious misconduct was not established: the Slack/text content was unprofessional but did not amount to bullying/harassment on the evidence; and the Instagram material did not identify the employer in a way that could fairly be said to bring the business into disrepute.
• No evidence of reputational or business harm: the employer did not point to any client complaint or tangible business impact and only became aware because Mr Bly self-reported the posts.
• Investigation and reasoning gap: the termination letter asserted the allegations were "substantiated" but did not explain how serious misconduct was made out or why dismissal was the chosen outcome.
• Response and remorse not genuinely weighed: the Authority accepted Mr Bly was remorseful and attempted to front-foot the issue; the letter did not show the employer grappled with those mitigating factors.
• Alternatives not considered: the termination outcome did not address alternatives (warning, coaching, final warning, or conditions), despite the small-business context and the employee's acknowledgment of wrongdoing.

Good faith and penalty

Mr Bly sought a penalty for breach of good faith under s 4. The Authority rejected that claim and found there was no legal or factual basis for a penalty. In other words, the employer's decision to dismiss was unjustified, but it was not treated as a separate good faith breach warranting a penalty.

Annual leave shortfall: 16 hours

The Authority found FutureCo did not correctly pay out Mr Bly's annual leave balance at termination. It ordered payment of a sum equivalent to 16 hours of annual holiday pay.

Remedies

Compensation

The Authority awarded separate compensation for two established wrongs: (1) the excessive-hours disadvantage; and (2) the unjustified dismissal. For excessive hours and the associated mental/emotional impact, compensation was set at $3,000. For the dismissal impact (embarrassment, loss of professional standing, loss of confidence, and severe financial consequences), compensation was set at $12,000.

Lost remuneration

Mr Bly was dismissed on 5 December 2024 and did not obtain new employment until 16 June 2025. The Authority accepted he took reasonable steps to find work, particularly over the first three months (including the Christmas period). Jobseeker Support payments were noted but not offset (any recovery is between MSD and the recipient).

Importantly, the Authority exercised the s 128(3) discretion to order more than three months' remuneration. It found there was no evidential basis that employment would have ended earlier than June 2025, the dismissal was for "serious misconduct" without proper foundation, and the personal consequences were severe (including periods without stable accommodation). The Authority therefore ordered lost remuneration equivalent to six months' salary.

Contribution reduction

Although the dismissal was unjustified, the Authority also found Mr Bly's conduct contributed to the situation and was blameworthy. The Instagram posts and communications were described as unacceptable and unprofessional, even if driven by fatigue and stress. A proportional assessment resulted in a 50% contribution reduction to the lost remuneration order. Practically, this means the lost remuneration order operated as the equivalent of three months' salary (six months reduced by 50%).

Practical takeaways

• Salary clauses are not a blank cheque: even where an agreement says salary covers "all hours worked", requiring extreme additional hours can still be an unjustified disadvantage.
• Social media discipline needs evidence of harm: "reputation damage" is not assumed. Employers should identify the actual reputational risk, audience, content, and impact.
• Serious misconduct needs clear reasoning: termination letters should show how the evidence meets the serious misconduct definition, and why dismissal (not a lesser sanction) is justified.
• Remorse and self-reporting are relevant: the Authority treated it as significant that Mr Bly alerted the employer to the posts and was remorseful.
• s 128(3) can matter: where dismissal is unjustified and the employment would likely have continued, the Authority may award more than three months' remuneration.
• Contribution can still bite hard: even where the employer is wrong, employee misconduct can substantially reduce remedies.

Read the full ERA determination (embedded)

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