Hao v South Pole IP Holding (NZ) Limited [2025] NZERA 245 - pressure to resign caused constructive dismissal

South Pole maintained that food technology engineer Xinhua Hao had agreed to resign, despite his repeated denials and stated wish to remain employed. Instead of fairly addressing its performance concerns, the company continued pressing the supposed resignation and stopped giving him meaningful work. The ERA found an unjustified constructive dismissal.

Performance concerns without a performance process

Mr Hao began work in October 2022 on research and development for dairy products and pharmaceutical supplements. His position became full-time in March 2023. Director Easter Wu later became dissatisfied with the progress of his work.

The employment agreement contemplated persistent failure against reasonably expected standards before performance-based termination. The Authority found that South Pole did not follow that process. Instead, Mr Wu told Mr Hao that resignation was expected, with the clear implication that dismissal would follow if he refused.

The employer could not resign for the employee

Following a November 2023 meeting, South Pole sent Mr Hao a notice recording that he had agreed to resign and identifying a final working date. Mr Hao repeatedly disputed that account and said he wanted to remain employed.

The Authority found that even if Mr Hao had tentatively indicated he might leave, that did not remove the employer's obligation to address performance fairly. South Pole could not issue a resignation notice on his behalf or disguise an employer-initiated termination as his voluntary choice.

Withheld work and renewed pressure

Mr Hao continued attending work, but by January 2024 South Pole was no longer providing meaningful new duties. Correspondence from its lawyer continued treating the supposed resignation as the central dispute and raised the prospect of disciplinary action if no suitable outcome was reached.

The pressure and uncertainty affected Mr Hao's health. He resigned on 26 January 2024, explaining that the employer's treatment had made it impossible for him to continue.

Constructive dismissal established

The Authority found South Pole had unfairly given Mr Hao a choice between resignation and dismissal and breached the employment agreement's performance provisions. Its later actions showed that it would not reliably observe his contractual rights.

The employer's conduct caused Mr Hao's resignation. It therefore amounted to an unjustified constructive dismissal rather than a freely chosen departure.

Compensation, wages and holiday pay

Mr Hao obtained another job shortly after his notice period, and insufficient evidence was provided to award the temporary difference in pay. He did establish distress, anxiety and sleeplessness associated with the employer's conduct, supported in part by medical evidence. Compensation was fixed at $15,000.

South Pole had paid him only to 14 January 2024 even though employment continued until 9 February. The Authority ordered $4,920 wages for that period and $8,200 for five weeks of annual leave. No contribution reduction was made because Mr Hao was not responsible for the employer's failure to follow the performance provisions.

Why this case matters

Hao v South Pole is a practical example of a disputed resignation becoming constructive dismissal. An employer cannot avoid a fair performance or dismissal process by declaring that the employee agreed to resign, particularly where the employee promptly and consistently says the opposite.

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