Filisi Beswick v Friendly Loans Limited [2026] NZERA 436

This Employment Relations Authority (ERA) determination concerns a long-serving sales officer who was dismissed for medical incapacity after a short period away from work following hospital treatment for blurred vision and migraines. On the morning Friendly Loans Limited dismissed Filisi Beswick, she had provided an update that her Covid test was negative, her full driver licence remained valid, she had an updated medical certificate, and she had been cleared to drive again. She also asked to meet face-to-face to explain her position and discuss a possible work-from-home arrangement. Friendly Loans did not meet with her, seek meaningful input, or properly assess her ability to return to work. It ended her employment later that day under a medical-termination clause. The Authority found the dismissal unjustified. It also held that Friendly Loans had unlawfully deducted $2,439.09 from her final pay to recover a personal loan without an adequate contractual authority or prior consultation. The company was ordered to pay $12,000 compensation, $9,997 gross lost wages, and $2,439.09 reimbursement of the unlawful deduction: $24,436.09 in total, with costs reserved. The full determination is embedded at the end of this page.

A short medical absence became a dismissal

Ms Beswick had worked for Friendly Loans for more than nine years. In early October 2024, she experienced blurred vision and a migraine, attended hospital, and was certified unfit for work for a short period. She was also told not to drive for one month. The medical information before the Authority recorded a further brief period of unfitness, not an indefinite prognosis or a conclusion that she could not continue in her sales-officer role.

Friendly Loans told Ms Beswick not to return to the office until the end of her medical certificate. It then asked her to provide medical clearance, a negative Covid-19 RAT result and confirmation that her driver licence was valid before returning. The company later told her it required confirmation she was "100%" medically fit, and directed her to look at the medical-termination clause in her agreement.

On 29 October 2024, Ms Beswick advised that the Covid test was negative, her licence was valid, and she had an updated medical certificate. She said she wanted a face-to-face discussion because she wished to explain the position and discuss a work-from-home option. She also said her doctor had cleared her to drive again and that she would forward further confirmation as soon as it was received.

Friendly Loans responded by ending her employment that afternoon for medical reasons and said it would pay two weeks' salary in lieu of notice.

The medical-termination clause still required due process

Friendly Loans relied on clause 37 of Ms Beswick's employment agreement. The clause permitted termination for medical reasons only after due process, where physical or mental illness rendered the employee incapable of proper ongoing performance of their duties.

The Authority held that the clause did not assist the employer. It found that a fair and reasonable employer could not have concluded on 29 October that Ms Beswick was incapable of performing her duties. The medical update she provided that morning pointed in the opposite direction: she was able to drive, had a negative Covid test and had received updated medical information.

No meaningful inquiry, meeting or opportunity to respond

The Authority stressed that dismissal for medical incapacity requires a fair process as well as a genuine substantive basis. That ordinarily includes giving the employee notice that dismissal is being considered, obtaining the relevant medical information, giving the employee a reasonable opportunity to recover and provide input, and balancing the operational needs of the employer against the employee's interests.

Friendly Loans did not arrange the face-to-face meeting Ms Beswick specifically requested. It did not meaningfully seek her input before deciding to terminate her employment, despite knowing that she had an updated medical certificate and was asking to discuss an alternative work arrangement.

The Authority also found that Ms Beswick had been away for only just over three weeks, and had been on annual leave since 14 October 2024. Friendly Loans was a small business and Ms Beswick held an important role, but those facts did not justify its decision to end employment without allowing a sufficient period for recovery or conducting an informed assessment.

Working from home was an obvious alternative that required consideration. The Authority did not decide that Friendly Loans had to approve that arrangement, but it found the company had not considered it at all before dismissal.

The final-pay loan deduction was unlawful

Friendly Loans had advanced Ms Beswick a personal loan in May 2024. The loan agreement authorised weekly repayments of $100 from wages. At dismissal, $2,439.09 remained outstanding and Friendly Loans deducted that entire amount from her final pay.

The Authority held that the general deductions clause in the employment agreement did not authorise recovery of this separate commercial loan from final pay. It also held that the Wages Protection Act 1983 required consultation before a specific deduction could be made under a general deductions clause.

Friendly Loans had not consulted Ms Beswick before making the deduction. The Authority therefore ordered reimbursement of the full $2,439.09.

Remedies: compensation, three months' wages and repayment of the deduction

The Authority accepted that the dismissal had a substantial negative effect on Ms Beswick's emotional health and well-being. She had gone from hospital treatment to dismissal within approximately three weeks, without an opportunity to explain her position directly. It also took account of the cultural significance she placed on a face-to-face discussion.

Compensation was assessed at $12,000. Ms Beswick did not secure new employment until May 2025. Although later medical certificates showed that she was not fit for work during the three months following dismissal, the Authority found that this did not automatically exclude lost remuneration. Her ability to seek replacement work had also been affected by the abrupt way the employment ended.

The Authority awarded the statutory maximum of three months' remuneration: $9,997 gross. It put WINZ payments to one side when assessing the statutory lost-wage entitlement.

No reduction for contribution

Friendly Loans relied on some delay in communication after Ms Beswick's earlier medical certificate had expired. The Authority accepted that she could have made contact a couple of days sooner, but found this did not amount to culpable or blameworthy conduct that contributed to the grievance.

The delay was brief, she was on annual leave, and the company had not made a meaningful attempt to contact her during that period. Crucially, she had not been placed on notice that her employment was at risk when she gave her medical update and asked for a meeting. No reduction was made under section 124 of the Employment Relations Act 2000.

Why this case matters

Beswick v Friendly Loans Limited is a useful medical-incapacity decision because it illustrates how quickly an employer can move from legitimate medical concerns to an unjustified dismissal. A temporary illness, a driving restriction or a request for more medical information does not create a standing right to terminate employment.

The employer must identify the actual operational problem, obtain a proper understanding of the employee's medical position, give the employee time and a real opportunity to engage, and then evaluate reasonable alternatives. In this case, the employee had supplied updated information and expressly sought a discussion. The employer's immediate decision to dismiss was incompatible with that obligation.

The decision is also a reminder that final-pay recovery requires more than an employer's belief that money is owed. A general deduction authority must be read carefully, and specific deductions must meet the requirements of the Wages Protection Act.

Practical takeaways

• Do not decide medical incapacity from a short absence alone: establish the prognosis and whether the employee is actually unable to perform the ongoing role.
• Give clear notice: tell the employee when dismissal is a possible outcome and explain the matters being considered.
• Seek meaningful input: meet with the employee, obtain relevant medical material, and allow a genuine opportunity to respond.
• Allow reasonable recovery time: assess the length and nature of the absence against the role and operational impact, rather than adopting an arbitrary view of what is enough.
• Consider alternatives: reduced duties, a short extension of leave, work from home, temporary adjustments or a staged return may need consideration.
• Do not demand more than is reasonably necessary: a requirement to be "100%" fit should not substitute for an evidence-based assessment of the actual role requirements.
• Check final-pay deductions: a general deductions clause may not authorise recovery of a separate loan or debt. Consultation and statutory compliance remain important.
• Assess contribution carefully: a brief communication lapse will not necessarily justify a remedy reduction, particularly where the employee was not told their job was at risk.

Read the full ERA determination (embedded)

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