LGY v The Board of Trustees [2025] NZERA 809

This is an interim Employment Relations Authority (ERA) decision about interim reinstatement. The Authority was not deciding the final merits of the dismissal grievance. It was deciding whether the employee should return to the role now, pending the investigation and determination of the substantive Personal Grievance (PG). The full determination is embedded at the end of this page.

What the case is about

LGY was employed by the Board as a teacher and deputy principal. The Board decided to dismiss LGY on notice for alleged serious misconduct connected to the use of school money (including fundraising money) in circumstances said to benefit LGY's family. LGY filed a Personal Grievance (PG) for unjustified dismissal and sought reinstatement and compensation.

Before the merits hearing, LGY applied for interim reinstatement: an order requiring the Board to reinstate her now, pending the final determination of her PG. Both parties filed affidavit evidence and made submissions, but the evidence had not been tested by cross-examination at this interim stage.

Core factual background (as recorded for the interim application)

The allegations arose from LGY's role organising an annual Year 8 Wellington trip (the Year 8 Wellington Camp), including trips in 2019, 2020 and 2023. A parent complaint in May 2024 raised concerns, including about the 2023 camp. A further formal complaint to the Board in August 2024 included concerns about the use of funds raised for the 2023 camp.

The Board established a complaint investigation subcommittee. A contractor and the principal gathered information, spoke with LGY, and identified that members of LGY's family had attended parts of the 2023 camp, including attending the WOW show. The decision records that LGY acknowledged the school had paid for WOW tickets for her family in 2023, and said she had wrongly treated that cost as "offset" by personal fundraising expenses she had not claimed.

The decision records that LGY explained her family's involvement over multiple years (as helpers/volunteers and in some instances attending the WOW show) and described it as an established pattern associated with the camps. In October 2024, the chair of the Board and the principal advised LGY the matter would be referred to the Board.

Disciplinary process and key documents

In early November 2024 the chair of the Board recommended a disciplinary process for alleged misconduct/serious misconduct. The concerns included: (1) family attendance on camps without appropriate cost recovery, (2) transparency/accountability issues about handling and accounting for money, and (3) leavers dinner funds being paid into LGY's personal account across multiple years (with limited accounting records located by the Board).

On 6 November 2024 the Board initiated a formal process and formed a disciplinary subcommittee. The subcommittee wrote to LGY in November 2024 outlining its investigation scope: annual Wellington trips (2019-2023), leavers dinner funds (2019-2023), and broader financial/asset management concerns. The process then continued through 2024 and 2025, including written questions, responses from LGY through counsel, and further engagement between the parties.

On 1 August 2025 the subcommittee issued its decision: termination with four weeks' notice. The decision recorded only two adverse findings of fact about LGY's use of school funds: paying for WOW tickets for family members in 2019 and in 2023. It treated the core problem as an integrity/trust issue (including the view that fundraising money was still "school money"), and concluded trust and confidence could not be restored.

Non-publication order

Because this was an interim application decided on untested evidence, the Authority was concerned the evidence was critical of both sides and could harm reputations and complicate the later merits investigation. It therefore made a non-publication order prohibiting publication of the identity of the parties and related identifying details (including Board members and school staff).

The legal test for interim reinstatement

The Authority applied the standard interim relief framework:

• Serious question to be tried: the claim must not be frivolous or vexatious; the Authority must make a judicial assessment of the affidavit evidence and submissions.
• Balance of convenience: weighing the competing practical impacts of granting or refusing interim reinstatement, including the status quo and whether damages are an adequate remedy.
• Overall justice: a final fairness check on the conclusion reached after the first two steps.

The determination refers to interim authorities including Humphrey v Canterbury District Health Board and Western Bay of Plenty District Council v McInnes, and uses the NZ Tax Refunds v Brooks Homes approach for the overall justice check.

Why there was a serious question to be tried

The Authority assessed whether there was a serious question to be tried on (1) unjustified dismissal and (2) whether permanent reinstatement would likely be practicable and reasonable. On the interim record, the Authority described both as strong cases.

Process concerns raised for unjustified dismissal

The decision identifies multiple arguable process issues. These included whether the disciplinary investigation should have been independent, particularly where aspects of LGY's explanations involved whether relevant policies had been brought to her attention and whether training had been provided (responsibilities that ultimately rested with the Board).

The Authority also recorded arguable conflict concerns about the chair of the Board (XDR) being closely involved from the early fact-gathering stage, forming a view that serious misconduct may have occurred, recommending disciplinary action, and then being part of the subcommittee that investigated and decided the outcome. The interim view was that this created a real issue as to the fairness of the process.

Another major process concern was that the subcommittee's framing of findings and concerns shifted over time. The Authority noted that, in several respects, the final dismissal letter adopted more simplistic or materially different findings and concerns from those set out earlier, and that LGY did not have a fair opportunity to comment on the changed reasoning. The decision also recorded that the final dismissal letter relied (at least in part) on LGY's dissatisfaction with the process and relationships, rather than sticking to the original factual concerns in a stable way.

Substantive justification was also arguable

The Authority accepted the Board could raise legitimate integrity and conflict concerns about using camp funds for family benefits and about failures to obtain authorisation or follow proper reimbursement processes. But it considered it was arguable that the Board's final conclusions went further than the findings actually supported, especially given that the subcommittee did not treat LGY as dishonest and accepted her explanations as honest. The interim assessment was that a fair and reasonable employer might have framed the concerns differently (for example, conflict recognition and policy compliance failures) rather than an overarching conclusion that LGY viewed school money as hers to spend.

The decision also treated it as difficult to justify dismissal on the basis that LGY challenged the process, distrusted decision-makers, or considered the process unfair, particularly where raising process concerns in a serious disciplinary situation can be legitimate and expected.

Interim reinstatement and permanent reinstatement issues

For reinstatement, the Authority referred to the rule that reinstatement is the primary remedy, and noted that if a personal grievance is established, reinstatement must be ordered if it is practicable and reasonable. "Practicable" is about whether reinstatement can actually be achieved successfully (not merely whether it is physically possible). "Reasonable" is about what is fair and right, including the impact on the parties and others.

The Board argued reinstatement was not practicable because trust and confidence had been destroyed and because LGY allegedly lacked insight and could not be trusted with finances in a management role. The Authority's interim assessment was that these concerns were overstated on the untested evidence. It recorded that LGY accepted she should not make decisions involving a personal benefit without authorisation, and that the subcommittee had reviewed multiple camps, multiple leavers dinners, and broader transactions, yet had identified only two questionable instances.

The Board also raised other alleged conduct (including third-party representations and alleged removal of property) as reasons reinstatement should not occur. The Authority treated those allegations as weakly supported at this stage because they had not been properly investigated or put to LGY for response. They were not treated as a reliable basis to defeat reinstatement.

Impact of reinstatement: damaged relationships and staff concerns

The Authority acknowledged reinstatement would be difficult given damaged relationships within the school community, including between LGY and the principal and between LGY and the Board chair. It also noted affidavits from staff raising concerns about LGY returning.

However, the Authority treated those concerns as untested and (in part) not aligned with the underlying financial allegations that drove the dismissal. It warned against effectively excluding reinstatement based on alleged conduct toward staff without any proper process or investigation into those allegations. The decision also noted that employers can seek assistance (including mediation or restorative practices) to rebuild working relationships following reinstatement.

Balance of convenience and overall justice

The Authority weighed three main balance-of-convenience factors: (1) the relative strength of each side's case (LGY was assessed as strong on dismissal and reinstatement), (2) the comparative impact of granting vs refusing interim reinstatement, and (3) whether damages would be an adequate remedy.

A key practical point was timing. The decision records that if interim reinstatement was refused, a "quick and speedy" reintegration to the workforce would be lost, and the Board intended to employ a new deputy principal to start at the beginning of the 2026 school year. That future appointment could create significant complications if the Authority later ordered permanent reinstatement. On that basis, the impact of refusing interim reinstatement was treated as more adverse than granting it.

Damages were treated as broadly adequate on either side, and not decisive. Standing back, the Authority concluded the balance of convenience and the overall justice favoured granting interim reinstatement.

Orders

Practical takeaways

• Interim reinstatement is realistic: where there is a strong serious-question case and timing risks (such as imminent replacement appointments), the Authority may grant interim reinstatement to preserve the position.
• Conflicts and process stability matter: if the same decision-maker is investigator, complainant, and adjudicator, fairness risk increases, especially where the reasoning shifts over time.
• Untested staff concerns carry limited weight: reinstatement may not be refused based on allegations that have not been properly investigated and put to the employee for response.
• Non-publication can be used at interim stage: where evidence is untested and reputational harm is likely, the Authority may anonymise the determination pending a merits hearing.

Read the full ERA determination (embedded)

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