Eun Joo Kim v Sage & Umber Limited and Pei Su [2026] NZERA 555

Café owner Pei Su loudly questioned chef Eun Joo Kim's competence and trustworthiness in front of other staff and told her that if she could not do the job she could go. Ms Kim left immediately. The Employment Relations Authority found Mr Su's conduct was a repudiatory breach that caused an unjustified constructive dismissal. Sage & Umber Limited was ordered to pay lost wages, compensation, arrears, interest and a penalty.

A café reopening under new ownership

Ms Kim had worked in the kitchen at Big Beat Coffee & Café for about four months when Sage & Umber purchased the business. Mr Su operated a neighbouring shop and invited her to continue working after the café reopened.

A proposed agreement described Ms Kim as a chef working 30 hours over five days at $23.15 an hour, then the minimum wage. She had not signed it before the employment ended, but the parties had agreed that she would work for the new owner.

The reopening was poorly prepared. The previous recipes were largely unavailable, ingredients were missing, the point-of-sale system was unfamiliar and a team that had barely worked together was expected to operate the café. Mr Su assumed Ms Kim could produce the entire menu even though she had worked under a head chef and had not been asked in detail what she could cook.

Competence and trust attacked in front of staff

On 8 September 2024, after difficulties with food for the cabinet, Mr Su confronted Ms Kim near the open kitchen and counter. Other staff were close enough to hear.

The Authority found that Mr Su used a loud voice to ask whether there was anything Ms Kim could do, said he could not trust her, blamed her for low takings and concluded that if she could not do the job she could go. At least one other staff member heard the exchange.

Ms Kim was humiliated and left immediately. Her messages sent within minutes recorded that Mr Su had questioned what she could do, said he could not trust her and told her to leave. Her husband also contacted Mr Su that afternoon after she called him in tears.

A text apology did not restore the relationship

Later that day Mr Su sent a text apologising for his words and saying the business still wanted Ms Kim to work some days. Alternatively, he suggested two weeks for her to find another job.

Ms Kim did not return. She said her pride had been deeply hurt and she could not accept a later text apology. The Authority found it was not unreasonable for her to reject the potential return because Sage & Umber's conduct had already broken trust and confidence.

Constructive dismissal established

The Authority treated the matter as constructive dismissal rather than deciding whether the statement that Ms Kim could go was itself a direct dismissal. The public attack on her skills and trustworthiness was dismissive and repudiatory conduct in breach of the employer's duty of trust and confidence.

That conduct caused Ms Kim to leave. In the circumstances it was also reasonably foreseeable that she would not be prepared to continue working after being spoken to that way in front of others. Her resignation was therefore a constructive dismissal and was unjustified.

Lost wages and compensation

Three months' lost wages based on 30 hours a week amounted to $9,028.50 gross. After deducting $324.10 earned from brief replacement work, the Authority awarded $8,704.40 gross. Ms Kim was not required to mitigate her loss by accepting a return to the workplace after the breakdown in trust.

Ms Kim experienced depression, anxiety, loss of self-esteem, loss of appetite and nightmares following the dismissal. Contemporaneous medical evidence recorded an acute anxiety and depression episode induced by a traumatic workplace experience. The Authority awarded $18,000 compensation and made no deduction for contribution.

Unpaid wages, penalty and director involvement

Sage & Umber had not paid Ms Kim for the two days she worked under its ownership and had not kept adequate wage and time records for her. It was ordered to pay $370.40 gross wages and $29.63 holiday pay, together with interest on the $400.03 total from 12 September 2024 until payment.

A global $500 penalty was imposed for failing to pay wages and holiday pay. Half was payable to Ms Kim and half to the Crown. Mr Su was not personally penalised, but the Authority found him involved in the employment-standard breaches and granted leave for Ms Kim to seek the $400.03 arrears from him if the company is unable to pay.

Why this case matters

Kim v Sage & Umber confirms that a constructive dismissal can arise from a single sufficiently serious incident. The question is not simply whether the employer used the words “you are dismissed”, but whether its conduct breached a fundamental duty, caused the employee to leave and created a reasonably foreseeable risk of resignation.

Stress associated with starting or reopening a business does not excuse humiliating an employee in front of colleagues. An employer concerned about capability must first establish what was agreed, make reasonable inquiries, supply the tools and information needed for the job, and raise concerns privately and fairly.

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