Selected cases

Employment Court of New Zealand · [2026] NZEmpC 53

Faitala and Vea v The Pacific Island Business Development Trust

John Faitala and Vahanoa Vea were employees of the Pacific Island Business Development Trust, a not-for-profit organisation supporting...

Employment Court of New Zealand19 Mar 2026

Plain-English explainers, not legal advice. Use the linked official source for section-level detail, and get advice for your situation.

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Quick read

  • Employers must ensure that redundancy processes are genuine, transparent, and in compliance with employment agreements and good faith obligations.
  • John Faitala and Vahanoa Vea were employees of the Pacific Island Business Development Trust, a not-for-profit organisation supporting Pasifika communities.

Use this to check

  • Employers must ensure redundancy decisions are genuine and follow a fair process.
  • Good faith obligations require transparency, honesty, and meaningful consultation.
  • Employees can challenge unjustified dismissals or disadvantage grievances.

Decision snapshot

  1. What happened

    • John Faitala and Vahanoa Vea were employees of the Pacific Island Business Development Trust, a not-for-profit organisation supporting Pasifika communities.
    • In June 2023, their employment was terminated due to redundancy.
    • The Employment Relations Authority (ERA) found that their dismissals were unjustified and awarded remedies, but it did not uphold their claims for unjustified disadvantage grievances, breaches of their employment agreements, or penalties for breaches of good faith.
    • The plaintiffs challenged the ERA's decision in the Employment Court, arguing that the ERA erred in treating their unjustified dismissal and disadvantage grievances as a single grievance.

  2. What the court had to decide

    • The key legal issue was whether the Employment Relations Authority erred in treating the plaintiffs' unjustified dismissal and disadvantage grievances as a single grievance.
    • The plaintiffs also challenged the quantum of compensation awarded and the decision not to impose penalties on the employer for alleged breaches of good faith and employment agreements.

  3. What the court decided

    • The Employment Court found that the plaintiffs' grievances for unjustified dismissal and disadvantage were established and should not have been treated as a single grievance.
    • The Court set aside the ERA's compensation awards and ordered higher compensation amounts for lost wages and emotional harm.
    • The Court also declined to impose penalties on the employer but emphasised the importance of adhering to good faith obligations.

Practical impact

Practical read

  • Employers must ensure that redundancy processes are genuine, transparent, and in compliance with employment agreements and good faith obligations.
  • Employees have the right to challenge unjustified dismissals or disadvantage grievances and may be entitled to compensation if their claims are upheld.
  • Both parties should seek legal advice to understand their rights and obligations under the Employment Relations Act 2000.

Useful next steps

  • Employers must ensure redundancy decisions are genuine and follow a fair process.
  • Good faith obligations require transparency, honesty, and meaningful consultation.
  • Employees can challenge unjustified dismissals or disadvantage grievances.
  • Compensation for unjustified dismissal includes lost wages and emotional harm.
  • Legal advice can help employers and employees navigate redundancy processes.

Understanding the redundancy process

Redundancy occurs when an employer decides that a role is no longer needed, often due to restructuring or financial constraints. However, employers must follow a fair and transparent process to ensure the redundancy is genuine and not a pretext for dismissing an employee.

Employers should consult with affected employees, consider alternatives to redundancy, and provide clear reasons for their decision. Employees have the right to challenge redundancies that they believe are unjustified or procedurally unfair.

Practical sense check

  • Consult with employees before making redundancy decisions.
  • Provide clear and genuine reasons for the redundancy.
  • Consider alternatives to redundancy, such as redeployment.
  • Follow the terms of the employment agreement.
  • Document the process and communications with employees.

Complying with good faith obligations

Good faith is a cornerstone of employment relationships in New Zealand. Employers and employees must act honestly, openly, and constructively towards each other. This includes sharing relevant information and engaging in meaningful consultation during significant changes, such as redundancies.

Failing to meet good faith obligations can lead to legal claims and penalties. Employers should ensure that their actions and communications reflect respect and transparency.

Key points

  • Act honestly and openly in all communications.
  • Provide employees with relevant information about decisions affecting their employment.
  • Engage in meaningful consultation before making significant changes.
  • Avoid misleading or withholding critical information.

Employee rights during redundancy

Employees have specific rights during redundancy processes. They are entitled to be consulted about the proposed changes, receive clear reasons for the redundancy, and have their employment agreements honoured. If they believe the process was unfair or the redundancy was not genuine, they can raise a personal grievance.

Employees should also take reasonable steps to mitigate their losses, such as seeking alternative employment, to ensure they can claim appropriate compensation if their grievance is upheld.

Practical sense check

  • Understand your rights under the Employment Relations Act 2000.
  • Request clear reasons for the redundancy decision.
  • Participate in consultation processes and provide feedback.
  • Seek legal advice if you believe the redundancy is unjustified.
  • Actively look for alternative employment to mitigate losses.

Compensation and penalties for breaches

When an employee successfully challenges an unjustified dismissal or disadvantage grievance, they may be awarded compensation. This can include payments for lost wages, emotional harm, and other losses. The Employment Relations Act 2000 outlines the types of compensation available and the factors considered in determining the amount.

Employers may also face penalties for breaches of good faith or employment agreements. These penalties are intended to deter non-compliance and uphold fair employment practices.

Key points

  • Compensation for lost wages is calculated based on the employee's earnings before dismissal.
  • Emotional harm compensation considers the impact of the dismissal on the employee's well-being.
  • Penalties for breaches of good faith are determined by the severity of the breach.
  • Employers should comply with all legal obligations to avoid penalties.

Lessons for employers from this case

This case underscores the importance of adhering to legal requirements during redundancy processes. Employers must ensure that redundancies are genuine, follow a fair process, and comply with good faith obligations. Failure to do so can result in significant compensation awards and damage to the organisation's reputation.

Employers should also be aware that employees have the right to challenge decisions they believe are unjustified. Seeking legal advice before making redundancy decisions can help mitigate risks and ensure compliance with the Employment Relations Act 2000.

Practical sense check

  • Review redundancy processes to ensure compliance with legal requirements.
  • Engage in meaningful consultation with affected employees.
  • Document all steps taken during the redundancy process.
  • Seek legal advice to address potential risks and obligations.
  • Train managers on good faith obligations and fair employment practices.

Common questions

What is an unjustified dismissal?

An unjustified dismissal occurs when an employer terminates an employee's employment without a valid reason or fails to follow a fair process as required under the Employment Relations Act 2000.

What is an unjustified disadvantage grievance?

An unjustified disadvantage grievance arises when an employee claims that their employer's actions have negatively impacted their employment conditions or terms without proper justification.

What are good faith obligations in employment?

Good faith obligations require both employers and employees to act honestly, openly, and constructively in their employment relationship, including during processes like redundancy.

What compensation can employees receive for unjustified dismissal?

Employees may receive compensation for lost wages, emotional harm, and other losses resulting from the unjustified dismissal, as determined under the Employment Relations Act 2000.

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Employment & WorkplaceRegulatory ComplianceWages, Leave & PayrollDismissal, Redundancy & GrievancesDisputes, Enforcement & RemediesCharities, Clubs & Member GovernanceImport, Export, Sanctions & Customs

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