Shaoqiang Chen v Wen Hui Lin [2026] NZERA 307

This Employment Relations Authority (ERA) determination is a useful example of what can happen when an employer runs an informal cash-paid working arrangement and then treats the employment as if ordinary minimum employment protections do not apply. Shaoqiang Chen worked as a cook at a takeaway business, was paid cash, had no written employment agreement, worked long hours, and was dismissed after being told another worker had been found and that his supervisor thought he was too slow. The ERA found Wen Hui Lin personally was the employer, that Mr Chen was a permanent full-time employee, and that the dismissal was unjustified. The Authority also ordered wage and holiday arrears, four weeks' lost wages, $8,000 compensation, costs, and penalties. The full determination is embedded at the end of this page.

Background

Mr Chen saw an advertisement for a part-time cook job at a takeaway premises and contacted Mr Lin in Mandarin on 23 November 2024. The two then arranged an interview and practical assessment at Beached As Takeaways in Flat Bush. The meeting took place on 27 November 2024.

Mr Chen said Mr Lin told him he would work as a cook and occasionally at the front counter. The work was to be from 11.00 am to 9.00 pm, six days per week, Tuesday to Sunday. Mr Chen said he was to be paid $1,200 per week "after tax". He started work on 10 December 2024.

The arrangement was informal. There was no written employment agreement. Mr Chen was paid cash, generally on Wednesdays. Mr Lin later suggested, through a letter from an advocate, that the arrangement was temporary, informal, cash-based, and made because Mr Chen and Mr Lin were friends. The ERA did not accept that this made the relationship something less than ordinary employment.

Mr Chen worked until 9 February 2025. He said he was dismissed on 24 January 2025 when Mr Lin told him he had employed someone else, no longer needed him, and that his supervisor did not like him and thought he was too slow. Mr Chen then worked a further period, effectively as notice, before his last day.

The case proceeded without Mr Lin attending

Mr Lin did not attend the investigation meeting. The ERA was satisfied he had reasonable notice and proceeded in his absence. That did not mean Mr Chen automatically won everything he claimed. The Authority still tested Mr Chen's evidence against the documents, the surrounding probabilities, and a letter that appeared to have been sent earlier on behalf of Mr Lin's business interests.

This is an important practical point. Non-participation by an employer can be disastrous, but the Authority still has to investigate and determine the matter. In this case, the Authority accepted the core of Mr Chen's evidence but was also critical of aspects of it. For example, Mr Chen's explanation for taking a photograph of a diary entry was not supported by the messages later produced, and the Authority treated that aspect of the evidence with caution.

Mr Lin personally was the employer

A preliminary issue was whether Mr Chen's employer was Mr Lin personally, or Mr Lin's company, MH Beached AZ Limited. Mr Chen had named Mr Lin personally. The 21 February letter, however, referred to Mr Lin's company and to the takeaway business.

The ERA applied the objective, factual approach to identifying the real employer. On the evidence, Mr Lin personally interviewed Mr Chen, offered him work, paid him cash, received his concerns about his supervisor, and dismissed him. Mr Chen was also unaware of MH Beached until later. The Authority found it was more likely than not that Mr Lin personally was the employer.

The job was permanent full-time employment, not an informal temporary arrangement

Mr Lin's apparent position was that Mr Chen was working under an informal temporary arrangement until a permanent employee could be found. The ERA rejected that. There was nothing to show that the arrangement was only ever intended to be temporary or fixed term. Mr Chen was found to have been a permanent full-time employee.

This mattered because an employer cannot simply label a job as informal or temporary and then avoid the ordinary dismissal protections in the Employment Relations Act 2000. If an employer wants a fixed-term arrangement, it needs proper fixed-term wording and a genuine reason. If an employer wants a casual arrangement, the reality of the work has to match that description. This case involved long, regular, full-time hours over a period of weeks.

The dismissal was unjustified

The dismissal was found to be both procedurally flawed and substantively unjustified. The reasons advanced for dismissal were that another employee had been engaged and that Mr Chen's supervisor considered him too slow. But there was no evidence these concerns had been raised with Mr Chen before dismissal. There was no fair performance process. There was no warning that his job was at risk. There was no investigation into the alleged performance concerns. There was no fair opportunity for Mr Chen to respond.

The ERA described the dismissal as unexpected and perfunctory. It did not accept the attempt to characterise the arrangement as a short-term friendly arrangement that could just be ended without a proper process. Mr Lin followed no fair process when dismissing Mr Chen.

Unjustified disadvantages were connected to the dismissal context

Mr Chen also raised several unjustified disadvantage claims. The ERA accepted that Mr Lin failed to provide a written employment agreement and failed to comply with minimum employment obligations relating to public holidays, annual holidays, and PAYE. Those failures left Mr Chen without clarity about his rights and deprived him of minimum entitlements.

However, the Authority did not make separate compensation awards for each disadvantage. Instead, it treated those failures as closely connected to the way the employment was conducted and ultimately brought to an end. They were taken into account when assessing remedies for unjustified dismissal.

The bullying claim did not succeed

Mr Chen also claimed he had been bullied by his supervisor and that Mr Lin failed to respond properly. The ERA applied the commonly accepted description of bullying as repeated and unreasonable behaviour directed at an employee that creates a risk to health and safety.

Mr Chen described incidents involving criticism over chip portion sizes, snapper fillets, being photographed while resting, and a later confrontation about chicken. The ERA accepted some of the behaviour may have been unpleasant, unfair, or inappropriate. But the incidents were limited in number, described at a high level, and lacked detail about frequency, duration, and cumulative effect. The Authority found they reflected workplace tension, criticism, and interpersonal conflict rather than repeated and unreasonable bullying.

The alleged threatening incident was more serious, but it stood alone, was not corroborated, and occurred after the dismissal decision had already taken place during the effective notice period. The bullying claim therefore failed.

Minimum wage underpayment identified by the Authority

One of the strongest parts of the decision is the minimum wage analysis. Mr Chen had not specifically pleaded a Minimum Wage Act claim, but the evidence showed a breach. The Authority considered it appropriate to remedy that breach.

Mr Chen worked from 10 December 2024 until 9 February 2025. For most of that period he worked six days per week between 10.00 am and 9.00 pm. Allowing for a 30 minute unpaid meal break, that was 10.5 paid hours per day, or 63 hours per week. From 27 January 2025, the store's hours extended to 9.30 pm, increasing his working hours to 11 paid hours per day, or 66 hours per week.

Mr Chen was paid $200 per day or $1,200 per week. That produced an effective hourly rate of about $19.05 per hour in the first period and $17.39 per hour in the second period. The adult minimum wage at the time was $23.15 per hour. Mr Chen was therefore underpaid for all hours worked.

Public holidays, alternative holidays, and annual holidays

Mr Chen worked on Boxing Day, New Year's Day, and the day after New Year's Day. Each was otherwise a working day for him. He was therefore entitled to be paid at not less than time-and-a-half for those public holidays and to receive an alternative holiday for each public holiday worked.

The Authority calculated the public holiday entitlement using the minimum wage. It also calculated the value of three alternative holidays and annual holiday pay based on lawful gross earnings. That is important: an employer cannot calculate holiday pay on an unlawful wage rate and then say the holiday pay was properly dealt with. The lawful minimum wage floor still matters.

Lost wages reduced to four weeks because of mitigation

Mr Chen sought 13 weeks' lost wages. He obtained part-time work on 21 February 2025, but his earnings from that work were much lower than what he would have earned with Mr Lin. He argued for a much larger loss based on 13 weeks.

The Authority accepted that the dismissal caused some lost wages, but it was not satisfied Mr Chen made reasonable mitigation efforts after obtaining the part-time role. There were no text messages showing job applications in March or April 2025. Payments from the new employer were sporadic, and the evidence did not explain what prevented Mr Chen from also seeking or undertaking more work.

The ERA found the causal connection between the unjustified dismissal and ongoing wage loss was broken in March 2025. Mr Chen was therefore awarded four weeks' ordinary wages, being $5,833.80, as lost wage reimbursement.

Compensation was assessed at $8,000

Mr Chen was awarded $8,000 compensation under s 123(1)(c)(i) of the Employment Relations Act 2000. The Authority accepted that he experienced some hurt and distress from the abrupt dismissal and from the conditions in which he had been employed. He had worked long hours below the minimum wage, without a written employment agreement, and then lost his job without warning or process.

However, the evidence about actual impact was limited. The ERA considered the harm to be toward the lower end. The award was intended to recognise loss of dignity and upset, not punish Mr Lin or duplicate the arrears and penalty remedies.

No contribution reduction

The ERA considered whether any remedies should be reduced for contribution under s 124 of the Employment Relations Act 2000. It found no blameworthy conduct by Mr Chen that contributed to the dismissal. Mr Lin had followed no process at all. No contribution reduction was made.

Penalties for minimum standards breaches

The Authority found Mr Lin breached minimum employment standards by failing to pay at least the minimum wage, failing to meet Holidays Act obligations for public holidays and annual holidays, and failing to provide a written employment agreement. The Authority considered the breaches serious and deliberate rather than accidental.

A provisional penalty starting point of $35,000 was considered, but the Authority reduced that to ensure the final penalty was proportionate. Mr Lin was ordered to pay total penalties of $12,000:

• $8,000 for breach of the Minimum Wage Act 1983.
• $2,000 for breach of the Employment Relations Act 2000.
• $2,000 for breaches of the Holidays Act 2003.

Of the $12,000 total penalties, $1,000 was ordered to be paid to Mr Chen and $11,000 was ordered to be paid to the Crown.

Why this case matters

This decision matters because it is a clean example of how ordinary employment law applies even where the parties have operated on an informal cash basis. A cash arrangement is not a way around the minimum wage, holiday pay, written employment agreement obligations, PAYE obligations, or personal grievance rights.

It also shows the risk of personal liability where the evidence points to the owner personally making the deal and personally controlling the relationship. Mr Lin's company was mentioned, but the Authority still found Mr Lin personally was the employer. That finding flowed from how the relationship was actually created and run.

The decision is also useful on mitigation. Even where a dismissal is plainly unjustified, an employee still needs evidence of reasonable efforts to find replacement work. The Authority did not award the 13 weeks claimed because the evidence after the employee obtained part-time work was not good enough.

Finally, this case is useful on penalties. The Authority treated the minimum wage breach, Holidays Act breach, and written employment agreement breach seriously. It reduced the provisional penalty for proportionality, but still ordered $12,000 in penalties. Informal cash pay, especially where it produces below-minimum-wage outcomes, is a serious employment standards problem.

Practical takeaways

• Cash pay is not a shortcut: employees still have minimum wage, holiday pay, PAYE, written agreement, and dismissal rights.
• Personal liability can arise: a business owner may be found personally to be the employer where the owner personally hires, pays, controls, and dismisses the employee.
• Informal does not mean fixed term: if the role is said to be temporary, that needs to be properly documented and justified.
• Long regular hours point away from casual work: regular six-day weeks and full-time hours are strong evidence of permanent full-time employment.
• No process means high dismissal risk: performance complaints need to be raised, investigated, and put to the employee before dismissal.
• Minimum wage calculations matter: holiday pay should be calculated on lawful gross earnings, not on an unlawful cash rate.
• Bullying has a threshold: unpleasant or unfair incidents do not necessarily amount to repeated and unreasonable bullying.
• Mitigation evidence matters: employees claiming lost wages should keep clear evidence of job applications and work-search efforts.
• Penalties are separate from arrears: paying arrears does not necessarily avoid penalties for employment standards breaches.

Read the full ERA determination (embedded)

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