A recent Employment Relations Authority (ERA) decision has reinforced the importance of clearly defining working relationships—especially for charitable trusts, not-for-profits, and volunteer-led organisations. The case saw a Trust ordered to pay $33,027 after the unjustified dismissal of an interim general manager.

At Core Legal, serving clients in Masterton and Wellington, we help employers and employees understand their rights and responsibilities. This case is a strong reminder to all employers—especially in the charitable sector—of the risks of informal arrangements and failing to follow due process.

⚖️ The Case: Unclear Terms Lead to Legal Trouble

A large Trust, involved in conservation, education, social, and health projects, contracted out its general manager duties for two years. When that contractor stepped back, the Trust appointed a long-term volunteer as interim general manager—but failed to formalise the arrangement in writing.

The volunteer worked on assigned tasks for two weeks before requesting a formal employment agreement. He submitted a proposed contract to the Trustees. However, before the matter progressed, a complaint was lodged regarding his behaviour at a board meeting.

Rather than investigating the complaint or engaging in a disciplinary process, the Trust claimed the appointment was invalid—arguing the previous contractor had not formally resigned, so no vacancy existed. The interim manager then lodged a personal grievance for unjustified dismissal.

📌 The Authority’s Findings

The ERA found that the claimant was an employee, not a volunteer or contractor. Despite the absence of a signed agreement, the parties’ conduct and communication showed mutual intent to form an employment relationship.

The Trust’s claim that the appointment was invalid was deemed a technical argument used to sidestep fair process. The ERA ruled this was not how a fair and reasonable employer should behave, especially when facing a complaint about an employee.

As a result, the Trust was ordered to pay:

• $19,527 in wage arrears and lost wages

• $13,500 in compensation for humiliation, loss of dignity, and mana

🛡️ Lessons for Employers, Trusts & Boards

This case highlights the legal obligations of employers, even in voluntary or non-profit settings:

• Always clearly document terms of engagement—including duration, duties, and payment.

• If someone is performing regular, paid work with direction and control, they may legally be classified as an employee, even without a formal contract.

• If a complaint arises, employers must follow fair disciplinary procedures—not rely on retrospective technicalities.

📞 Get Legal Advice Before Problems Arise

Whether you’re a charity trustee, employer, or employee, the risks of misclassifying a role or mishandling complaints can be significant. At Core Legal in Masterton and Wellington, we offer affordable, fixed-price Initial Consultations to help you understand your obligations under New Zealand employment law.

Protect your organisation—talk to our employment law specialists today.