ClickCease

ERA held the employer could not rely on a one-year fixed-term clause because the statutory requirements were not met (no genuine reasons agreed and reasons not recorded). Ending employment without giving the employee a chance to comment was unjustified. Orders: $15,600 gross lost wages and $12,000 compensation (costs reserved).


Yifu Jiang v Smartrade Limited [2026] NZERA 56

A detailed, plain-English summary of an Employment Relations Authority (ERA) determination about an employer trying to rely on a fixed-term clause to end employment, and why the Authority found the dismissal was unjustified. The full determination is embedded at the end of this page.

At a glance

  • Citation: [2026] NZERA 56
  • Parties: Yifu Jiang v Smartrade Limited
  • Registry: Auckland
  • Authority member: Marija Urlich
  • Investigation meeting: 8 December 2025
  • Determination date: 2 February 2026
  • Outcome: Unjustified dismissal upheld. Fixed-term clause could not be relied on. Employer counterclaim dismissed. Remedies ordered; costs reserved.
  • Key orders: $15,600 gross lost wages and $12,000 compensation (payable within 21 days of the determination date).

What happened

Mr Jiang worked for Smartrade Limited as an office clerk from 2 October 2023 until his employment ended on 11 December 2024.

The written employment agreement was not signed until 7 December 2023 (about two months after he started). It recorded a full-time Monday to Friday role at $1,100 gross per week, and said the agreement may be terminated on 11 December 2024 by either party giving two weeks' written notice.

On 11 November 2024 the owner/manager emailed Mr Jiang advising the business would not renew his employment contract when it expired on 11 December 2024, referring to unexpectedly low market conditions and insufficient sales to cover expenses including wages.

Mr Jiang raised a personal grievance for unjustified dismissal. The employer defended the claim by saying the employment was always a fixed term and that it was simply not renewed at expiry. The employer also raised a counterclaim alleging various breaches and seeking orders against Mr Jiang.

What the Authority had to decide

  • Was Mr Jiang unjustifiably dismissed?
  • If so, what remedies should be awarded (lost wages and compensation)?
  • Was the employer's counterclaim established?

Key findings in plain English

  • The Authority held the employer could not lawfully rely on the fixed-term clause because the statutory requirements for a fixed term were not met.
  • There was insufficient evidence that the employer had genuine reasons (based on reasonable grounds) for a fixed term that were communicated to and agreed with Mr Jiang before the agreement was entered.
  • The written agreement recorded an end date but did not record the reasons for a fixed term, which is a mandatory requirement.
  • Because the fixed term was not lawful, ending the employment by notice was a dismissal, and the employer was required to run a fair process.
  • Mr Jiang was not given an opportunity to comment on the proposal to end his employment, and the Authority held the dismissal was not what a fair and reasonable employer could have done in all the circumstances (s 103A).
  • The employer's counterclaim was rejected. Performance-type allegations could have been dealt with during employment using ordinary processes, and the alleged property/confidentiality/other issues were not proved to the required standard.

Orders and payments

  • Within 21 days of the determination date, the employer was ordered to pay $12,000 compensation for humiliation, loss of dignity, and injury to feelings (s 123(1)(c)(i)).
  • Within 21 days of the determination date, the employer was ordered to pay $15,600 gross lost wages (13 weeks at $1,200 per week) as reimbursement (s 123(1)(b)).
  • Contribution was not applied (no blameworthy contribution by the employee).
  • Costs were reserved, with a timetable for any costs memorandum (applicant within 21 days; respondent reply within 14 days of service).

Why this case matters

  • Fixed-term agreements are technical. It is not enough to write an end date - the employer must have genuine reasons based on reasonable grounds, those reasons must be communicated and agreed before the term is entered, and the reasons must be recorded in the agreement.
  • If a fixed term is not lawful, ending the employment at the nominated end date can still be treated as a dismissal at the initiative of the employer - and a fair process is required.
  • Counterclaims are not a substitute for ordinary employment processes. If an employer says there were performance or misconduct issues, the Authority will look at whether those were raised and dealt with properly at the time.
If you have an active employment problem and deadlines, get advice early. If you are considering raising a Personal Grievance (PG), the 90 day notification time limit can be critical.

Read the full ERA determination (embedded)

If the embedded PDF does not load on your device, use the button below to open it in a new tab.

Mobile / tablet tip: Some browsers do not display embedded PDFs reliably. Use the "Open" button above.


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

0800 WIN KIWI

Search
Search articles and guides.
Tip: press / to search

Related articles

Browse all articles
Based on: Unfair Dismissal Cases
Juliet Hull v Sleaktek Limited and Robert Lawrence [2026] NZERA 579 - CEO wins dismissal and disadvantage claims

Sleaktek stopped paying chief executive Juliet Hull, pursued a predetermined redundancy and later alleged serious misconduct without a fair process. The ERA upheld dismissal and disadvantage grievances and ordered more than $180,000 before interest, with findings against the director personally.

Eun Joo Kim v Sage & Umber Limited and Pei Su [2026] NZERA 555 - public attack caused constructive dismissal

Café owner Pei Su loudly questioned chef Eun Joo Kim's competence and trustworthiness in front of other staff and told her that if she could not do the job she could go. The ERA found this repudiatory conduct caused an unjustified constructive dismissal. Sage & Umber Limited was ordered to pay $8,704.40 gross lost wages, $18,000 compensation, wage and holiday-pay arrears, interest and a penalty.

Valerie Leech v Electrical Importing Co Limited [2026] NZERA 553 - employment was agreed before the 90-day trial was signed

Electrical Importing Co Limited agreed the job's core terms with Valerie Leech and directed her when to start before presenting a written agreement containing a 90-day trial. The ERA found she was already an employee when the trial provision was signed, so the trial was invalid and her dismissal was unjustified. She was awarded $21,250 gross lost remuneration and $13,000 compensation.

LUO v BAZ [2026] NZERA 549 - genuine redundancy undone by inadequate consultation and redeployment

BAZ had genuine financial reasons to restructure, but it gave LUO no proper proposal, financial information, timeframe or clear warning that her job was at risk. It then required her to apply for a new role that was substantially the same as her existing position. The ERA found the redundancy dismissal unjustified and awarded $11,000 compensation.

Jonathan Rhodes v Barfoot & Thompson Limited [2026] NZERA 543 - medical incapacity dismissal before a genuine opportunity to recover

Barfoot & Thompson Limited dismissed Senior Property Manager Jonathan Rhodes for medical incapacity while he was recovering from concussion and further head injuries. The ERA found he had not received a genuine opportunity to recover, the inquiry into his prognosis was incomplete, an imminent neurological assessment was not awaited, and the proposed alternative role did not reflect the clinical advice for a graduated return on reduced hours. The dismissal was unjustified and Barfoot & Thompson was ordered to pay $30,000 compensation.

Browse topics