Shaun Graves v NZSL Employment Limited [2026] NZERA 669 - contractor became an employee before summary dismissal

Shaun Graves started his relationship with NZSL as a contractor through his own company. The arrangement later changed. He went onto NZSL's PAYE payroll, worked regular hours under NZSL's control and used its equipment. The Employment Relations Authority found that from 23 September 2024 he was an employee and that telling him his services were no longer required without any process was an unjustified dismissal.

The relationship began as contracting

Mr Graves had approximately 35 years' forestry experience. In May 2024 he began providing services to NZSL through his own company, Graves Forestry Services Limited. At that stage the arrangement was genuinely structured as contracting.

His own company was, however, in financial decline and being wound down. The way Mr Graves worked for NZSL subsequently changed in material respects.

PAYE payroll and the real nature of the relationship

From around September 2024, at the suggestion of an NZSL director, Mr Graves was placed on NZSL's PAYE payroll and received fortnightly payslips. He worked regular hours from Monday to Friday, with occasional Saturdays, using NZSL plant and equipment. His hours, work location and allocation of work were directed by NZSL.

NZSL later argued that payroll treatment had been an accountant's error and that Mr Graves remained a contractor. The evidence did not support that explanation. The accountants had initially been instructed by NZSL to set him up as an employee.

Employee from 23 September 2024

The Authority applied section 6 of the Employment Relations Act 2000 and the orthodox multi-factor approach, including the parties' intention, control, integration, whether the worker was genuinely in business on his own account, and the surrounding circumstances.

From 23 September 2024, the real nature of the relationship was employment. Mr Graves was integrated into NZSL's operations and working under its control rather than operating an independent business of his own. The absence of a written employment agreement did not prevent the relationship being one of employment.

Told his services were no longer required

On 6 January 2025 a co-director told Mr Graves that his services were no longer required. There was no disciplinary or redundancy process, no consultation, no opportunity to respond and no fair notice of an employment decision.

Having found employee status, the Authority had little difficulty concluding that the summary ending of the relationship was unjustified both substantively and procedurally.

Remedies reflected the short period of employment

The Authority awarded eight weeks' lost wages, calculated at $37 per hour for 41 hours per week, totalling $12,136 gross. It also awarded $1,213.60 for four unpaid statutory public holidays over the Christmas and New Year period.

Compensation of $6,000 was awarded for hurt and humiliation. The Authority recognised the stress and uncertainty caused by the abrupt dismissal, while distinguishing some of Mr Graves's wider financial problems arising from the failure of his own business. No reduction was made for contribution.

Why this case matters

The case is particularly useful where a worker's status has evolved over time. Courts and the Authority examine the real relationship, not just an old contract or label. Moving onto PAYE, regular directed hours, integration into the employer's business and use of employer equipment can all point strongly toward employment status.

Read more Employment Relations Authority unfair dismissal cases.

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