Jingsheng Liu v Legend International Holdings Limited, Hongyu Holding Limited and Wang Yu [2025] NZERA 702

This case is a blunt example of a "no work next week" text message being treated as a termination of employment. The Authority found the employer side unilaterally ended work and pay without consultation and without reasonable notice, and that amounted to an unjustified dismissal. The determination also deals with arrears (notice and annual leave), penalties for employment standards breaches, and leave to pursue a person involved under s 142Y if the company cannot pay. The full determination is embedded at the end of this page.

What happened

Mr Liu worked as a cabinet maker from March 2023. He was originally employed by Legend International Holdings Limited (Legend), trading as HY Kitchen, and worked 40 hours per week.

In March 2024 the business moved to new premises. Without telling Mr Liu, the operation of the business was transferred from Legend to a related company, Hongyu Holding Limited (Hongyu). Mr Liu's pay records showed he was paid by Legend until March 2024 and then paid by Hongyu from April 2024. The payments were described as "HY Kitchen wages".

Mr Liu's work was arranged and directed by Wang Yu (also known as Louis Wang). Mr Wang was a director of Legend. Hongyu was owned by Mr Wang's spouse.

On 29 June 2024, Mr Liu received a text message (translated from Chinese) saying there would be no more work the following week because business was bad, and telling workers to find temporary work. Mr Liu later made inquiries and was repeatedly told there was no work and he should find work elsewhere.

Why the Authority treated the text message as a dismissal

The Authority accepted there may have been genuine business pressure and that, if done properly, the employment might have ended by redundancy in a short time. But that was not what happened. There was no consultation and no agreement to a temporary stand-down with clear terms. Instead, Hongyu unilaterally stopped providing work and pay.

Because there was no consultation and no reasonable notice, the Authority treated the 29 June 2024 text as effectively terminating employment. That was an unjustified dismissal.

Remedies for the unjustified dismissal

The Authority awarded:

• Lost wages: $5,440 (4 weeks), limited to reflect the contingency that a properly run redundancy process might have ended the job soon anyway.
• Compensation: $15,000 for humiliation, loss of dignity and injury to feelings.
• No contribution reduction: no blameworthy conduct by Mr Liu contributed to the dismissal process failures.

Arrears: notice wages and annual leave (plus interest)

Separately from the remedy for lost wages, the Authority treated Mr Liu as entitled to a reasonable notice period. On the evidence, four weeks' notice was accepted as appropriate. The Authority ordered arrears of wages for that notice period, and outstanding annual leave entitlements. Interest was ordered from 24 June 2024 until payment.

• Notice arrears: $5,440 (4 weeks)
• Outstanding annual leave: $1,937.44
• Interest: payable on those arrears from 24 June 2024 until paid

Employment standards breaches, penalties, and s 142Y leave

The Authority found multiple employment standards breaches, including failures to provide an employment agreement (Hongyu), failures to pay wages/leave entitlements correctly (Hongyu), and failures to provide wage and time records when requested (both Legend and Hongyu).

The Authority also found Mr Wang was a "person involved" in those breaches and granted leave under s 142Y for Mr Liu to recover the arrears of wages and holiday pay from Mr Wang if Hongyu cannot pay them.

Penalties were imposed to be paid to the Crown (not to Mr Liu), reflecting the public interest in enforcing minimum employment standards:

• Hongyu penalties: $2,000 (s 65 employment agreement), $2,000 (WPA s 4 wages), $2,000 (HA ss 24-25 leave entitlements), $1,000 (ERA s 130(2) wage/time records) - total $7,000
• Legend penalty: $1,000 (ERA s 130(2) wage/time records)
• Total penalties: $8,000 (to the Crown)

Costs and filing fee

Costs were awarded on a tariff basis. The respondents were ordered to contribute $3,000 to Mr Liu's representation costs and reimburse the $71.55 filing fee. Those costs and expenses were ordered on a joint and several basis, payable within 28 days.

Orders summary

Practical takeaways

• "No work" messages are risky: a unilateral stoppage of work and pay, without consultation and notice, can be treated as a dismissal.
• Redundancy still needs process: even where business is slow, consultation and notice are required. A proper redundancy process can affect remedy periods, but it does not excuse a process failure.
• Transfers between related entities need clarity: if operations shift between companies, payroll and accountability must be clear to employees.
• Records and agreements matter: failures to provide agreements and wage/time records can trigger penalties.
• Persons involved exposure: directors/managers can face s 142Y recovery exposure where they are involved in employment standards breaches and the company cannot pay.

Read the full ERA determination (embedded)

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