Philip Powell v OH & N Contracting Limited and Bradley Mooney [2026] NZERA 481

This Employment Relations Authority (ERA) determination concerns Philip Powell, who worked for OH & N Contracting Limited as a site foreman in a logging operation from November 2022 until January 2025. His employment ended when the company's director, Bradley Mooney, attended Mr Powell's home and told him the company was closing because it was not making money and that his employment was ending that day. The Authority accepted there was some genuine business basis for redundancy because the main logging work was at or nearing completion, other logging work had not been secured, and the need for workers was reducing. But that did not excuse the employer from consultation. The redundancy dismissal was unjustified because OH & N did not consult properly, did not provide information, did not consider alternatives with Mr Powell, and had already made the decision before speaking with him. The full determination is embedded at the end of this page.

Background

Mr Powell was employed as a site foreman. His work involved running the crew, ensuring workers carried out their tasks, and working as an all-rounder in the logging operation, including felling trees and operating machinery. He said he had been approached about working at a farm site where forestry blocks were being cleared, and then spoke directly with Mr Mooney about running a crew if Mr Mooney sourced the necessary machinery and equipment.

Mr Powell commenced employment after Mr Mooney advised that the machinery was ready. He had a written individual employment agreement, commenced in November 2022, and the role was full time. Mr Powell said he enjoyed the work and intended to remain long term. He also said he tried to identify further forestry blocks to secure ongoing work for the business, although that did not eventuate.

OH & N's position was that Mr Powell knew the work was limited and coming to an end. It said the business was struggling, that Mr Powell was not surprised when his employment ended, and that possible alternative farm-related work had been mentioned but not taken up. Mr Powell disputed the fairness of the way the redundancy was handled.

The dismissal at Mr Powell's home

On 6 January 2025, Mr Powell received a text message from Mr Mooney asking to meet. The following day, Mr Mooney went to Mr Powell's home. During that meeting, Mr Mooney told Mr Powell that he was closing the company because it was not making money and that Mr Powell's employment was ending that day.

Mr Powell said there had been no prior discussion about redundancy and that no other options were offered. Mr Mooney said he would provide a good reference if Mr Powell found other work. Two days later, Mr Powell attended the worksite to collect personal belongings and saw that work was still being carried out. OH & N said this was remaining work being finished, and that another employee's work also ended once that remaining work was completed.

Genuine business reason accepted

The Authority accepted that there was some information supporting a genuine business reason for redundancy. The majority of the work Mr Powell had been employed to undertake was at or nearing completion, the business had not secured other logging work, and OH & N's requirement for workers was reducing. The Authority also noted that the business had ceased trading, although the company remained registered.

That finding was important because the case was not decided on the basis that the redundancy was fake or that the employer had no business problem at all. The problem was that a genuine business reason does not, by itself, make a redundancy dismissal fair. The employer still had to follow a good-faith restructuring process before deciding to dismiss.

No good faith restructuring process

Mr Powell's employment agreement referred to redundancy after a good faith restructuring process. The Authority held that such a process was not followed. Even if Mr Powell knew or ought to have realised that his employment might come to an end, that did not excuse OH & N from its statutory and contractual obligations.

The Authority found that OH & N did not adequately consult with Mr Powell about possible redundancy before the decision was made. It did not consider alternatives to dismissal with him. It did not provide information that would allow him to understand and engage meaningfully in consultation. It did not give him a proper opportunity to have a support person or representative involved. It did not obtain his views and consider them with an open mind before deciding whether his role should be made redundant.

The Authority was clear that Mr Mooney had already made the decision by the time he approached Mr Powell on 7 January 2025. The fact that Mr Mooney texted Mr Powell the day before showed that at least some context could have been provided in advance. Instead, the process consisted of the employer telling Mr Powell the outcome.

Alternative work was not properly explored

Mr Mooney said he took no steps to explore alternative work because there was nothing to explore. However, he also said that other work on the farm had been declined by Mr Powell. The Authority noted that Mr Mooney also said local employees were retained because they were less costly for the business. Those matters had not been put to Mr Powell for input before the decision was made.

The point was not that OH & N necessarily had to create another role for Mr Powell. The point was that a fair redundancy process required open consideration of options before dismissal. Where the employer says there are no alternatives, or that another option is not suitable, that should be tested through consultation rather than decided privately.

Why the dismissal was unjustified

The Authority concluded that OH & N had not shown that its actions, and how it acted in the lead-up to Mr Powell's termination, were what a fair and reasonable employer could have done in the circumstances. Because of the consultation and good-faith failures, Mr Powell's redundancy dismissal was procedurally unjustified.

This was not a case where the Authority awarded the full period Mr Powell was out of work as lost remuneration. The Authority considered that a more thorough process would probably not have kept Mr Powell employed indefinitely, because the logging work was ending and the business had no new work coming in. That affected the remedy assessment, not the finding that the dismissal process was unjustified.

Unpaid wages and the notice-period error

Mr Powell claimed payment for unpaid wages because OH & N wrongly applied annual holiday instead of paying ordinary notice wages during the notice period. That error affected the calculation of Mr Powell's final pay. OH & N accepted the claimed amount of $4,160 gross, inclusive of holiday pay.

The Authority ordered OH & N to pay Mr Powell $4,160 gross as compensation for final wages lost on the ending of his employment. The practical problem was straightforward: an employer cannot substitute an employee's annual holiday balance for contractual notice wages. If notice wages are payable, they must be paid as wages.

Lost wages limited to four weeks

Mr Powell was unemployed for just under one year after his employment ended. He said he looked for work by word of mouth in the forestry industry, was unfamiliar with online job searching, and eventually had to obtain support from Work and Income. However, the Authority assessed lost wages by considering what would probably have happened if a fair process had been followed.

Because the work was ending and OH & N had no secured replacement work, the Authority considered a proper process would not have resulted in Mr Powell remaining employed long term. It awarded a further four weeks' lost wages to allow for the process that should have occurred. At $40 per hour, 40 hours per week, that produced a $6,400 gross lost-wages award.

Compensation

Mr Powell gave evidence that the way his employment ended had a significant personal and financial impact on him. The dismissal was abrupt and occurred without meaningful discussion. He said he ended up with nothing after losing the job, found it difficult to secure further work, and experienced mental strain on himself and his family.

The Authority accepted that Mr Powell was adversely affected by the loss of employment. It also accepted that the impact was compounded by the lack of information and meaningful communication about the ending of his employment. Compensation for humiliation, loss of dignity and injury to feelings was fixed at $15,000.

No contribution reduction

The Authority had to consider whether Mr Powell's own conduct contributed to the situation that gave rise to the personal grievance. It found that none of his actions contributed to OH & N's failure to fairly consult with him before terminating his employment. No reduction was made to remedies.

Penalties for employment standards breaches

Mr Powell also sought penalties. The Authority considered three alleged breaches: failure to keep and provide wage and time records, unlawful deduction from wages by failing to pay contractual notice wages, and failure to pay annual holiday on termination.

The Authority found a breach of the Employment Relations Act because OH & N failed to provide wage and time records immediately when they were requested in writing shortly after the employment ended. Although records were eventually provided to the Authority, OH & N did not satisfactorily explain why they were not provided when first requested.

The Authority also found a Wages Protection Act breach. Mr Powell had been paid annual holiday on termination, but the real breach was that annual holiday pay had been paid instead of contractual notice wages. When wages are payable under an employment agreement, failing to make full payment is treated as an unlawful deduction.

After applying the penalty framework, the Authority set penalties of $1,000 for the failure to provide wage and time records and $2,000 for the Wages Protection Act breach. Of the total $3,000 penalty, $2,000 was ordered to be paid directly to Mr Powell and $1,000 to the Crown.

Director recovery against Mr Mooney

Mr Powell also sought to recover money from Mr Mooney personally as a person involved in a breach of employment standards. The Authority could not award a penalty against Mr Mooney personally under s 142X because such an application can only be made by a Labour Inspector. However, the Authority could consider leave to recover unpaid money under s 142Y.

The Authority found that Mr Mooney was knowingly concerned in the relevant breach. He was the sole director of OH & N and, because of his day-to-day position in the business, had direct knowledge of Mr Powell's terms, conditions and pay arrangements. Mr Powell was granted leave to recover from Mr Mooney personally, to the extent OH & N could not pay, the unpaid wages amount of $4,160 gross inclusive of 8% holiday pay.

Why this case matters

Powell v OH & N Contracting Limited is a useful reminder that redundancy is not only about whether there was less work. The Authority may accept that the business had genuine reasons to reduce staff, while still finding the dismissal unjustified because the employer failed to consult before the decision was made.

The case also shows why final pay should be treated carefully. The employer's failure to pay contractual notice wages, and its decision to apply annual holiday pay instead, led not only to an arrears order but also to a penalty and limited director-recovery exposure.

Finally, the determination demonstrates the practical importance of wage and time records. Records provided later to the Authority did not cure the breach where the employer failed to provide them immediately when first requested.

Practical takeaways

• Do not skip consultation: even an obvious downturn or ending project still requires a good-faith process before dismissal.
• Provide information: the employee must be given enough information to understand the proposal and comment meaningfully.
• Keep an open mind: a redundancy meeting is not a fair process if the decision has already been made.
• Explore alternatives: even if alternatives seem unlikely, they should be considered with the employee before the decision.
• Do not replace notice pay with holiday pay: contractual notice wages must be paid as wages.
• Provide records promptly: wage and time records must be provided when requested, not only later in litigation.
• Directors can face limited recovery exposure: where employment standards money is unpaid and the director is knowingly concerned, recovery against the director may be available if 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.