The Employment Relations Act 2000, the Holidays Act 2003, and the Minimum Wage Act interact in ways that catch NZ employers out even when they are trying to do the right thing. ERA claims and Labour Inspectorate investigations consistently find the same failures — not deliberate non-compliance but managers who did not know what the law required, making decisions that turned out to be unjustified or unlawful.
Training managers on the basics of NZ employment law is not optional. This post covers the areas where ERA claims are most frequently upheld, what managers need to understand, and how to build compliant management practice.
---
Where ERA Claims Are Being Upheld
The Employment Relations Authority's published determinations show consistent patterns:
Unjustified dismissal — process failures. The ERA does not require an employer to retain an underperforming employee forever. It requires a fair process — proper investigation, notice of the concerns, opportunity to respond, genuine consideration of the response before a decision is made. Cases are lost not because the employer had no grounds, but because the process was skipped or rushed. A manager who dismisses someone for a first performance issue without a documented warning process, without the opportunity to have a support person present, and without genuinely considering the employee's response is exposed.
Unjustified disadvantage — management style. Actions short of dismissal — restructuring roles, changing duties, altering conditions — are also reviewable. Managers who make significant changes to an employee's role without following a proper consultation process, or who manage in a way that constructively disadvantages the employee, generate ERA claims even without a dismissal.
Holidays Act non-compliance. The Holidays Act remains the most technically complex employment legislation in NZ. Annual leave accrual, alternative holidays, sick leave entitlements, and the calculation of relevant daily pay continue to trip up employers. The government's Holidays Act reform process has been in progress for years and is moving toward simplification, but the current law remains the operative standard.
Good faith obligation. The ERA imposes a duty of good faith on both parties, and the ERA Authority takes this seriously. Managers who fail to keep employees informed of matters affecting their employment, who are not active and constructive in maintaining the employment relationship, or who act in ways that damage trust face findings of good faith breaches separate from substantive compliance failures.
What Manager Training Must Cover
Manager training on employment relations needs to be practical and scenario-based, not a recitation of legislation. The topics that prevent the most ERA claims:
The disciplinary process — step by step. Investigation, allegation letter, meeting (with support person right), genuine consideration, outcome letter. Managers need to be able to run this process without calling HR every five minutes. Role plays and case studies are the training format that sticks.
Performance management that holds up. Performance improvement plans, documented conversations, clear expectations, regular feedback. The pattern that loses ERA cases is a manager who tolerates poor performance for months, then tries to dismiss quickly. Training needs to cover early intervention and documentation.
Restructuring and consultation. Any role change with a significant effect on the employee requires genuine consultation — not announcement of a decision, but a process where the employee can input before the decision is made. The distinction between genuine consultation and a fait accompli is where most restructuring claims are won or lost.
Leave entitlements. Every manager should be able to correctly answer: when does an employee become entitled to sick leave? What is an alternative holiday? How is annual leave calculated for variable hours workers? The Holidays Act calculation complexity is real, but the basic entitlements are teachable.
Good faith in practice. What does it mean to be active and constructive in maintaining the employment relationship? Managers who understand the standard — keep people informed, respond to concerns promptly, do not take actions designed to damage trust — make fewer good faith errors.
The Cost of Getting It Wrong
An ERA determination against the employer typically includes:
- Remedies to the employee — lost wages, compensation for humiliation and distress, sometimes reinstatement
- The employer's own legal costs — ERA proceedings are not cheap even when you win
- Management time — ERA investigations consume significant HR and management bandwidth
- Culture impact — how an employer handles a disputed dismissal is watched closely by the rest of the workforce
The ERA's remedial regime is designed to make the employee whole, not to punish the employer. But even a modest determination — a few months of lost wages plus distress compensation — can run to $20,000-$50,000 plus costs. Training a manager well costs a fraction of that.
Integrating Employment Relations Training into Onboarding
New managers — whether promoted internally or hired externally — should complete employment relations training before they have their first performance or disciplinary conversation. Waiting until they need it is waiting until it is too late.
The 30-60-90 day onboarding template for managers should include employment relations modules alongside H&S, privacy, and general compliance training. The completion record matters — an employer who can show that a manager received training on the correct disciplinary process before making a disciplinary decision is in a better evidential position than one who cannot.
Refresher Cadence
Employment relations training should be refreshed every one to two years, and whenever:
- There is a significant change in employment law — the Holidays Act reform will require a full refresh when it passes
- The manager takes on direct reports for the first time
- There has been an ERA claim or near-miss in the business
- A performance or disciplinary process did not go as intended
Start your free WyzAZ trial to deliver employment relations training to managers with completion records, automated refreshers, and the documentation trail that matters when things get complicated.
External references: