This page summarises and displays the Employment Relations Authority (ERA) determination Lautusi Isaako v ABS Builders Limited [2025] NZERA 678 (Auckland, Member Andrew Gane, determination dated 24 October 2025).
Quick facts
- Citation: [2025] NZERA 678
- Registry: Auckland
- Member: Andrew Gane
- Investigation meeting: 19 August 2025 (no appearance for ABS)
- Determination date: 24 October 2025
- Applicant: Lautusi Isaako
- Respondent: ABS Builders Limited
What happened
Mr Isaako started work for ABS on 5 February 2024 as a builder, on $30 per hour. He said he worked full-time and ongoing (typically 7am to 4pm, five to six days per week), and his daily tasks were directed by a leading hand (Mr Lam). He said he never received a written employment agreement.
On 7 June 2024, Mr Isaako phoned to say he could not attend work because he needed to repair his truck. Later that evening he received a text message from Mr Lam terminating his employment and telling him to find work elsewhere. The message also alleged his work was below standard, but the ERA recorded this was the first time he had been told there were any performance issues.
Mr Isaako raised a personal grievance (PG) on 18 June 2024. ABS's general manager initially admitted by email (1 July 2024) the termination was done in an unjustified manner, but later changed position and claimed Mr Isaako was a subcontractor or occasional worker.
Employee or contractor?
A key issue was whether Mr Isaako was really an employee or a contractor. The ERA applied the statutory "real nature of the relationship" test (s 6), considering intention, how the relationship operated in practice, and the control, integration and "in business on your own account" factors.
- Control: Mr Isaako had no real control over hours, location, or tasks; he was directed day-to-day.
- Integration: He worked exclusively in ABS's business and was treated as part of the on-site workforce.
- Fundamental test: He was paid an hourly rate comparable to employment, not a higher contractor rate, and was not running his own enterprise.
The ERA accepted Mr Isaako's evidence and found the parties intended an employment relationship from 5 February 2024.
Summary of orders (money)
Payable within 28 days of 24 October 2025
| Order | Amount |
|---|---|
| Reimbursement of lost wages (3 months salary) (gross) | $15,210.00 |
| Compensation for hurt, humiliation and injury to feelings | $15,000.00 |
| Annual holiday pay (8% for 18 weeks) (gross) | $1,684.80 |
| Public holiday pay (5 days) (gross) | $1,275.00 |
| Costs contribution | $2,250.00 |
| Reimbursement of filing fee | $71.55 |
| Total ordered to be paid to applicant | $35,491.35 |
Holiday pay arrears
The ERA found ABS failed to pay public holiday pay and annual holiday entitlements, and failed to provide accurate wage and time records. The Authority accepted Mr Isaako's calculations and ordered the arrears to be paid.
- Public holidays: 5 public holidays at 8.5 hours per day (Waitangi Day, Easter Friday, Easter Sunday, Anzac Day, Kings Birthday) totalling $1,275 gross.
- Annual holidays: 8% annual holiday pay for 18 weeks calculated on $1,170 per week (total $21,060 x 8% = $1,684.80 gross).
Penalties and offsets
Penalties were not awarded. The ERA held penalty claims under the Holidays Act 2003 and Wages Protection Act 1983 were time-barred (raised outside the 12-month time limit), and the wage and time records breach was not sufficiently serious in this case to warrant a penalty.
ABS also alleged Mr Isaako owed money for remedial work, but there was no counterclaim before the ERA and therefore no offset could be made.
Costs
The ERA applied the standard daily tariff approach. Because the investigation was completed in half a day, the starting point was $2,250. ABS did not participate at the investigation meeting, and the ERA ordered $2,250 in costs plus reimbursement of the $71.55 filing fee.
Practical takeaways for employers and employees
- Contractor labels do not decide status: The ERA will look at the real nature of the relationship (control, integration, and whether the worker is in business on their own account).
- Text message dismissal is high risk: Ending employment by message, without a fair process, is very likely to be unjustified.
- Performance concerns must be raised and managed: If there are performance issues, the employee must be told and given a fair opportunity to improve and respond.
- Keep wage and time records: Poor recordkeeping creates arrears exposure and can support remedies. It can also lead to penalties where the breach is serious.
- Holiday pay compliance matters: Public holiday pay and annual holiday entitlements must be paid correctly, and final pay obligations cannot be avoided by changing the narrative to "contractor".
- Penalty time limits: If you want penalties, you must plead them within the statutory time limit. Waiting until closing submissions can be fatal.
Read the full determination
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