The Advocate | Issue 377 | September 2026

In JXU v AEC Design Studio Limited and Lee  [2026] NZERA 608, the Employment Relations Authority recently considered the dismissal of a casual employee engaged for just three days’ work following a disagreement that ended with her being escorted from an exhibition venue by security. 

JXU entered into an agreement to work as an Architectural/Interior/Engineering Design Intern on a casual basis for AEC Design Studio Limited (“ AEC ”). The Director of the company was Mr Lee. The work JXU was engaged to complete was to assist at an exhibition stand over the weekend of 12 to 14 September 2025, and she would be paid the minimum wage. 

On the second day of the exhibition show, JXU and Mr Lee had a disagreement over a business card that an interested party had provided to her. JXU had previously been instructed to photograph every business card she was given. The argument resulted over a business card that JXU had handed over to Mr Lee, but had not yet photographed. When she asked for the business card back to photograph it, he said she did not need to photograph it. JXU then insisted she needed to photograph the business card, despite being told it was not required. The disagreement resulted in Mr Lee becoming angry and asking JXU to leave. JXU refused, and said that she would finish her shift. Mr Lee repeated that she should leave and then threatened to call security to have her removed. As JXU still refused to leave, Mr Lee called security and had JXU escorted from the premises. 

Following her dismissal, JXU was not paid by AEC. 

The Authority’s Decision 

The Authority found that JXU had been summarily and unjustifiably dismissed by AEC. No reason was given for the dismissal and there was no procedure followed in reaching the decision to dismiss. 

AEC was ordered to pay JXU unpaid wages of $446.50, plus holiday pay of $35.72. No order for lost remuneration was made, as JXU was engaged for a specified period of time and there was no ongoing prospect of work. The Authority considered JXU’s evidence of the impact of the dismissal on her, and determined that an award of $12,000 was appropriate in the circumstances. However, the award of compensation was reduced by 25% to $9,000 due to JXU’s contribution to the situation. In particular, JXU had refused to accept Mr Lee’s instruction that he did not need a photograph of the business card and this resulted in the argument between the two of them. She then also refused Mr Lee’s instruction to leave the premises. 

The Authority then turned to penalties. It found five breaches of minimum employment standards, including failures to pay wages and holiday pay, provide a written employment agreement and wage and time records, and comply with good faith obligations. 

Based on the total breaches, AEC could be liable to a penalty of up to $100,000. However, the Authority considered the breaches could be grouped into two overall categories; one being failures relating to record keeping and the second relating to failures to pay JXU what she was entitled to be paid. 

The Authority noted the key underlying principle that penalties are intended to be punitive rather than compensatory. They are intended to both punish breaches but also to promote compliance with minimum employment standards. 

Although JXU was entitled to be properly paid and AEC had failed to meet several fundamental employment obligations, the Authority considered the breaches were at the lower end of the scale. This was particularly due to the short nature of the engagement between AEC and JXU, an absence of evidence of previous adverse conduct, and proportionality with similar cases. Ultimately, AEC was ordered to pay a penalty of $2,000 to the Crown (noting that no portion of the penalty was ordered be paid to JXU, despite the Authority’s discretion to order this).

The Authority then considered whether Mr Lee should be personally liable as a person involved in the breaches for either a penalty imposed against him personally, or for the remedies awarded to JXU. 

Under section 142X of the ERA, the Authority may impose a penalty against a person involved in a breach of employment standards, however, only on application by the Labour Inspectorate. As the Labour Inspectorate did not bring the claim and was not involved in the proceedings, Mr Lee could not be held personally liable for the penalties of $2,000 ordered against AEC.

The Authority turned to whether Mr Lee should bear personal liability for the remedies awarded to JXU. In this case, Mr Lee was the sole director of AEC, and “was knowingly concerned in the breaches of minimum employment standards and in failures to pay JXU”. Consequently, the Authority ordered he be held liable to fulfil the remedies ordered to be paid to JXU, to the extent that AEC was unable/failed to pay them; i.e. AEC and Mr Lee were both jointly and severally responsible for paying the remedies to JXU in full. 

This case highlights that even a very short term or casual employment arrangement does not dilute an employer’s obligations with respect to minimum employment standards. Employers should ensure that employees have written agreements, are paid all wages and holiday pay when due, and that required employment records are maintained. Compliance failures can expose an employer to penalties, even where the sums owed are relatively modest and the employment lasts only a matter of days.

Directors should also take note: the corporate structure will not always provide protection from personal liability. Here, the Authority found that Mr Lee, as sole Director, was knowingly concerned in the minimum standards breaches. Although it could not impose a personal penalty because such a claim may only be brought by a Labour Inspector, it held that he was personally liable for amounts owed to JXU if AEC failed or was unable to pay them.