ERA rules sustained wage failure amounts to constructive dismissal
The Employment Relations Authority on 31 March 2026 awarded a Malaysian labourer more than $31,000 after his employer withheld wages for 17 weeks.
In Wong v NZAT Construction Limited [2026] NZERA 193, Authority Member Matthew Piper found that NZAT Construction Limited employed ZiGen Wong as a permanent employee despite the complete absence of a written employment agreement. The Authority ordered NZAT Construction to pay Mr Wong $18,187.50 gross in wage arrears, $1,455.00 gross in unpaid holiday entitlements, $8,000 in compensation for humiliation, loss of dignity and injury to feelings, $3,500 as a contribution to costs, and $71.55 as reimbursement of his lodgement fee.
Mr Wong, a Malaysian national, arrived in New Zealand in September 2023 on a visitor visa. Through a friend of a friend, he connected with Jason Liew and began work as a labourer on a downtown Auckland construction site on 26 September 2023. The parties agreed to an hourly rate of $25, covering 9.5 hours per day, Monday to Friday, amounting to $1,187.50 gross per week. NZAT Construction issued no employment agreement, no payslips, and made all payments in cash. Mr Wong held no IRD number and paid no tax.
Initially, payment arrived on time. From January 2024, however, payments became sporadic. Mr Wong worked without pay from 8 January 2024 to 5 May 2024, continuing because both the sporadic payments and NZAT Construction's repeated assurances caused him to believe he would receive his wages. On 5 May 2024, Mr Liew told Mr Wong that the site had reduced staff and that he should "take a break for now." Mr Liew raised a new site to the south on 7 May 2024, but no work at that site ever eventuated for Mr Wong.
On 27 July 2024, Mr Liew acknowledged the outstanding debt but stated he did not have the ability to pay. He offered Mr Wong $2,000 and sent a message: "you should hurry up and buy your ticket home. I'll transfer the rest to you bit by bit later." Mr Wong received the $2,000 in cash but no further payments followed.
Piper found that the sustained failure to pay wages constituted a fundamental breach of duty, which, considered together with Mr Liew telling Mr Wong that he was no longer needed on site, amounted to unjustified constructive dismissal. Applying the control, integration, and fundamental or economic reality tests established in Bryson v Three Foot Six Limited [2005] NZSC 34, Piper determined that Mr Wong was a permanent employee despite the absence of a written contract. The Authority calculated wage arrears at $20,187.50 gross, less the $2,000 already paid, leaving a balance of $18,187.50. An additional 8 percent for unpaid annual leave added a further $1,455 gross.
Piper assessed the $8,000 compensation as falling at the lower end of comparable cases, finding that the primary impact on Mr Wong was financial anxiety rather than public humiliation or indignity.
Mr Wong's claim for lost remuneration following dismissal did not succeed. The Authority found that because Mr Wong held no valid work visa and took no steps to obtain one after his dismissal, he failed to mitigate his losses.
On the question of contribution, the Authority declined to reduce the compensation award. Although Mr Wong worked without a work visa and without paying tax, Piper found that neither factor caused the grievance, and that NZAT Construction appeared to have condoned or encouraged both.
