Wallace v Tang & Son Limited [2026] NZERA 67

A husband-and-wife head chef and sous chef were dismissed from Buoy Cafe (Auckland waterfront) after a long-running conflict with new management. The Employment Relations Authority (ERA) found the employer did not investigate properly and did not give either employee a real opportunity to respond before dismissal decisions were made. Both personal grievances succeeded, and significant lost wages and compensation were ordered.

What happened (the story)

The Wallaces had worked at the cafe under the previous owner. When Tang & Son Limited bought the business in June 2023, the employer appointed a general manager (Mr Khammy) and a store manager (Ms Toun). The determination records that tensions developed between the head chef (Mr Wallace) and the store manager (Ms Toun) about "how the cafe should be run", communication, and who had authority over ordering, wastage, and kitchen operations.

Early signs of conflict were recorded in an email in July 2023 where Mr Wallace complained that Ms Toun smacked him on the back (more than once) during a discussion about disposal of food-soiled boxes, and he also raised concerns about rostering and pay arrangements. The general manager replied that he had spoken to staff and Ms Toun, and he treated the physical contact as "tapping" rather than hitting.

The determination then moves through further stress points: an April 2024 incident after a miscarriage (where Mr Wallace said Ms Toun responded insensitively when he asked for time off to support his wife), and a management meeting in May 2024 which tried to define roles (manager oversight and "on the spot" decisions; kitchen management and reporting to the manager; management to "sit and talk" on critical issues).

Matters escalated while the general manager was overseas. Mr Wallace emailed about the store manager interfering with supplier orders and said she had told him she would handle ordering "from now on". He also complained about being rostered in a way that meant he did not receive time-and-a-half on Anzac Day, and he continued to communicate that he felt brushed off and not listened to. Around this time there was also a dispute about food wastage: after fish was seen in a bin, Ms Toun told Mr Wallace not to throw away food he considered not up to standard for customers, and to keep records and put items aside for her.

What the ERA decided (and why)

The ERA applied the statutory test for justification under s 103A of the Employment Relations Act 2000, including that dismissal for misconduct requires a fair and reasonable process: proper investigation, putting concerns to the employee, and genuinely considering their response. The Authority noted that even if there is some wrongdoing, a process failure can still make a dismissal unjustified unless the defects are truly minor and would not have changed the outcome.

Mr Wallace: unjustified disadvantage and unjustified dismissal

The ERA found Mr Wallace had been unjustifiably disadvantaged and then unjustifiably dismissed. In plain terms, the Authority accepted there was a real and deteriorating working relationship problem, and Mr Wallace had raised concerns (including alleged bullying and mental health impact). The employer did not deal with those concerns in a fair, good-faith way and instead moved quickly to termination.

On the dismissal itself, the Authority identified core fairness failures: the employer formed conclusions without properly investigating and without giving Mr Wallace a meaningful chance to respond to the specific allegations relied on for dismissal. The process was effectively one-sided. The Authority was critical of the employer relying heavily on management accounts (including the store manager who was central to the conflict) and not doing what a fair employer would do before ending employment for alleged misconduct.

The Authority also addressed "contribution". While it accepted that refusing to work the rostered weekend contributed to the sequence of events, it did not justify what followed and did not warrant a reduction in remedies.

Mrs Wallace: unjustified dismissal

The ERA found Mrs Wallace was unjustifiably dismissed. The Authority was not persuaded the employer had an adequate evidential basis for the allegations made against her (including alleged "collusion" to cause trouble). The process shortcomings were even starker: the decision to dismiss was made without a fair inquiry and without giving her a real opportunity to respond to properly put allegations.

In substance, the Authority treated her dismissal as infected by the employer's dispute with her husband and the employer's decision-making approach on the weekend. That was not a fair basis for termination. Again, no reduction for contribution was applied.

Arrears, wage records, and penalties

The Wallaces also raised issues about public holiday pay (Anzac Day), wage records, and penalties. The Authority declined to make arrears and penalty orders on the material filed, essentially because the evidence did not reach the threshold required to make the findings and impose penalties sought.

Orders and deadlines

The Authority ordered Tang & Son Limited to pay, within 28 days:

• Mr Wallace: $40,000 lost wages and $18,000 compensation.
• Mrs Wallace: $19,448 lost wages and $18,000 compensation.

Costs were reserved. The Authority set a timetable for any costs memoranda and noted the notional daily rate for a one-day investigation meeting (stated as $4,500).

Practical takeaways

• Weekend "investigations" are risky: dismissing on Sunday night after talking to a handful of staff (and management) is not a substitute for a fair process.
• Put the allegations to the employee first: even if an employer believes misconduct occurred, it must put the concerns, allow a response, and genuinely consider it.
• Good faith requires active management of conflict: when an employee raises serious relationship and health concerns, a reasonable employer should engage and attempt to resolve, not default to termination.
• Avoid guilt by association: dismissing a spouse or colleague because of the dispute with someone else is high-risk and often unjustifiable.

Read the full ERA determination (embedded)

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