Raheel Reddy v Studio Image Limited [2026] NZERA 323

This Employment Relations Authority (ERA) oral determination is about a barber who was dismissed by text message. Raheel Reddy worked for Studio Image Limited from May 2023 until 17 September 2024. Studio Image said the employment ended because Mr Reddy resigned, but the ERA found the text messages amounted to a dismissal. The dismissal was unjustified because Studio Image did not investigate its concerns, did not raise them with Mr Reddy before dismissal, and did not give him a reasonable opportunity to respond. The ERA ordered Studio Image to pay 13 weeks lost wages and compensation, with a 20 percent contribution reduction applied to compensation only. The full determination is embedded at the end of this page.

The short point

Studio Image may have had real concerns about Mr Reddy's punctuality and attendance. The ERA accepted that Mr Reddy had contributed to the situation because he had recent warnings for similar conduct. But that did not allow the employer to end the employment relationship by text message without a fair process.

The legal problem was simple. If an employer is considering dismissal, it needs to investigate, put the concerns to the employee, allow a reasonable opportunity to respond, and genuinely consider the response before deciding. Studio Image did not do those things.

Background

Mr Reddy was employed to work at Studio Image's Auckland barbershop from 26 May 2023. His evidence was that his usual working days were Monday to Friday, from 10.00 am to 6.00 pm.

On 10 September 2024, Mr Reddy was involved in a car accident while driving to work. His car was written off. The following week, on 17 September 2024, he sent Mr Thapa a text message before his morning shift saying that he would be late because he was going to view a replacement car. Mr Reddy said he expected to be away for only one or two hours.

Mr Reddy later messaged at 1.07 pm saying he would be at work by 1.30 pm. However, the text message record showed that he was still not at the barbershop at 2.12 pm. At that point, Mr Thapa sent messages saying that Mr Reddy would be paid his remaining leave, should collect his tools, and that he hoped Mr Reddy found a better shop.

Mr Reddy challenged what was happening and asked whether he was being fired. Mr Thapa responded in terms that he was no longer interested in keeping Mr Reddy at the shop.

Studio Image said Mr Reddy resigned

Studio Image's position was that Mr Reddy had resigned or otherwise decided to leave the business himself. The ERA rejected that.

The Authority looked at the substance of what happened. The employer's messages referred to paying out remaining leave, collecting tools by the next day, and wishing Mr Reddy well for the future. Those matters were consistent with the employer sending the employee away.

The ERA also considered Studio Image's attempt to rely on alleged later behaviour and client statements said to show Mr Reddy's character. The Authority said video evidence from nearly a year after employment ended, and client statements obtained after the employment relationship ended, were not relevant to how the employment relationship ended or whether the dismissal was justified.

The ERA accepted Mr Reddy's evidence that he was dismissed by Studio Image's text messages on 17 September 2024.

Why the dismissal was unjustified

The ERA applied the justification test in section 103A of the Employment Relations Act 2000. The question was whether Studio Image's actions, and how it acted, were what a fair and reasonable employer could have done in all the circumstances at the time of dismissal.

The Authority found that the dismissal failed the basic procedural fairness requirements. Studio Image did not sufficiently investigate its concerns before dismissal. It did not raise the concerns with Mr Reddy before dismissing him. It did not give him a reasonable opportunity to respond. It did not genuinely consider any explanation before ending the employment relationship.

That meant the dismissal was unjustified. The Authority also referred to the good faith obligation to provide access to information relevant to the continuation of employment and an opportunity to comment before a decision is made.

Lost wages

Mr Reddy sought 19 weeks lost wages because that was the period he was without work. The Authority declined to award more than the usual three months because Mr Reddy did not provide a cogent reason for going beyond that period.

The ERA accepted that Mr Reddy had lost remuneration because of the unjustified dismissal and that he had tried to find new work. His job search evidence included direct contact with potential employers and using Seek. That evidence was not challenged by Studio Image.

Mr Reddy said he always worked and was paid for 38.5 hours per week. The payslip information showed otherwise. The Authority calculated his final three-month average at 36.21 hours per week. At $30 per hour for 13 weeks, the ERA ordered $14,121.90 gross lost wages. The order also required 8 percent holiday pay on that amount and KiwiSaver compliance if applicable.

Compensation for humiliation, loss of dignity and injury to feelings

Mr Reddy gave evidence that he was extremely stressed and uncertain after the dismissal. He said the dismissal was more upsetting because he felt that his commitment and hard work had not been recognised. He also described repeatedly thinking about and replaying what had happened.

The ERA accepted that Mr Reddy experienced harm under the compensation heads in section 123(1)(c)(i) of the Employment Relations Act 2000. It assessed compensation at $13,500 before contribution.

Good faith penalty declined

Mr Reddy also sought a penalty for breach of good faith. The ERA treated the good faith claim as based on the same factual matrix as the unjustified dismissal claim.

The Authority noted that a penalty for breach of good faith requires a high threshold. Although aspects of Studio Image's conduct suggested it may not have complied with its good faith obligations, the ERA declined to impose a penalty. It found that the personal grievance remedies adequately addressed the failure in the circumstances.

Contribution reduction

Studio Image did not justify the dismissal, but Mr Reddy's own conduct still mattered for remedies. The ERA found his actions were blameworthy because the dismissal arose from punctuality and attendance issues, and because he had recently received warnings for the same type of conduct.

The Authority found that this conduct contributed to the situation giving rise to the dismissal. However, it was not at the upper end of blameworthy conduct. The ERA applied a 20 percent reduction, but only to compensation. Lost wages were not reduced.

Why this case matters

This case is another reminder that text messages can end employment just as effectively as a formal termination letter. An employer cannot avoid a dismissal finding by saying the employee resigned when the employer's own messages point to the employee being sent away.

The case also shows the difference between having a reason to be unhappy with an employee and having a justified dismissal. Studio Image may have been frustrated with lateness and attendance. But a fair and reasonable employer still needed to follow a process before deciding to dismiss.

The contribution finding is also useful. The ERA recognised that Mr Reddy's attendance and punctuality conduct contributed to the situation. That reduced compensation, but it did not rescue the dismissal and it did not reduce the lost wages award.

Practical takeaways

• Text messages matter: an informal message can still amount to dismissal if it sends the employee away.
• Resignation arguments need substance: calling it a resignation will not work if the employer's conduct ended the employment relationship.
• Process is still required: lateness and attendance concerns must be investigated and put to the employee before dismissal.
• Post-employment material may be irrelevant: later videos or customer statements generally do not prove how the employment ended.
• Warnings help, but do not replace process: prior warnings may support contribution, but they do not justify a no-process dismissal.
• Contribution can be targeted: here, the 20 percent reduction applied to compensation only, not lost wages.
• Good faith penalties are not automatic: even where the process is poor, the ERA may decide that PG remedies are enough.
• Evidence on wages matters: the Authority used payslips and the final three-month average, not the employee's asserted weekly hours.
• Costs are separate: costs were reserved and could be dealt with later if the parties could not agree.

Read the full ERA determination (embedded)

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