Interim Reinstatement Secured and Maintained

MK Law obtained interim reinstatement for a dismissed employee in the Employment Court. The employer then sought stays, applied for leave to appeal to the Court of Appeal, and applied to vary the order. The Court stayed the order in part while it considered leave, and later adjusted its terms, but it did not set it aside, and our client kept his pay throughout.

The dismissal

Our client held a supervisory role with an Auckland retail business with several stores. He had no previous disciplinary history, and his most recent performance review rated him as meeting expectations.

In August 2025, the employer dismissed him without notice for alleged gross negligence in checking supplier deliveries. The employer had begun disciplinary processes against a number of staff over stock concerns, and did not suggest that our client was solely responsible for the loss it had identified.

Interim reinstatement declined by the Authority

A personal grievance was raised, and we applied to the Employment Relations Authority for interim reinstatement. In December 2025, the Authority declined the application.

The Employment Court challenge

We challenged that determination in the Employment Court, which heard the matter afresh on affidavit evidence. In May 2026, the Court set aside the Authority’s determination and ordered interim reinstatement until the Authority completes its investigation of the grievance.

The Court applied the established test, which is explained on our interim reinstatement page. The threshold for an arguable case is low, and the employer accepted that it met the threshold for unjustified dismissal. The Court also found an arguable case for permanent reinstatement, noting that the employer had several stores and a human resources function. We presented the employer’s own job advertisements to the Court to show that work was available, and our client confirmed he would accept any conditions the Court considered appropriate.

On the balance of convenience, the Court accepted that an award of damages could cover lost wages. It did not accept that damages were likely to address the harm to our client’s standing in the business community where he had worked for several years. There was no allegation of dishonesty. On the limited evidence available, the Court considered that a strong arguable case existed that the issues concerned performance rather than misconduct.

The Court was cautious about the employer’s claim that it had lost trust and confidence in our client because it had not tested that claim. Other allegations the employer relied on depended on what employees were said to have said, and those employees gave no evidence. The Court gave them no weight. It met the employer’s concerns about supervision by ordering that the role need not include supervisory duties. It also noted that money is often a poor substitute for a job.

Stays while leave to appeal was sought

The employer applied for leave to appeal to the Court of Appeal, and for a stay of the order. Under s 126 of the Employment Relations Act 2000, a reinstatement order remains in force despite a challenge or appeal unless the Authority or court orders otherwise. A stay is therefore the exception.

In May 2026, the Employment Court granted an interim stay on condition that our client was put back on the payroll at his previous pay. In July 2026, it granted a stay in part. He remained on the payroll but was not required in the workplace while the leave application was decided. If leave was declined, he was to return to the workplace within 14 days.

At the stay hearing, we produced a recent advertisement by the employer for a sales assistant role. The employer’s counsel accepted that the role overlapped with our client’s previous duties, and the Court confirmed that such a role would meet the order. The Court also treated several of the employer’s arguments as an attempt to relitigate matters it had already decided.

The Court of Appeal declines leave.

In August 2026, the Court of Appeal declined leave. Leave can be granted only on a question of law of general or public importance, or one that that Court should decide for another reason. The Court held that the proposed questions concerned how the Employment Court had applied the law to the facts and weighed the evidence, and were not questions of law. It also held that the Employment Court’s jurisdiction to hear a challenge to an Authority interim reinstatement determination arises under s 179 of the Act.

The application to vary the order

Shortly before our client was due to return to work, the employer applied without notice for a further stay, and applied to vary or rescind the order. The short stay kept the position vacant until the variation application was heard. The employer asked the Court to limit reinstatement to the payroll. Alternatively, it proposed a role at a different site or a role at a lower rate of pay, relying on a number of matters it said had arisen since the original order. Our client opposed the application, and confirmed that he was willing to work in any of the employer’s nearby stores.

The Court did not accept that those matters materially changed the circumstances and justified reinstatement to the payroll only. It accepted, however, that practical difficulties made it difficult to give effect to the original order. In September 2026 it varied the order so that our client would return to the workplace within seven days as a retail assistant, rostered to one of the employer’s nearby stores each week, at his existing rate of pay. The Court reminded both parties to deal with each other in good faith.

What this case shows about interim reinstatement

Conditions can make reinstatement workable. Our client’s willingness to accept conditions, and evidence that suitable work existed, allowed the Court to address the employer’s supervision concerns by removing supervisory duties from the role. At the interim stage, the Court also gave limited weight to untested claims.

An order can also be contested long after it is made. Because a stay of reinstatement is the exception, the Court decided the employer’s applications on terms that kept our client on his previous pay while it considered leave.

Since 21 February 2026, ss 123B and 123C of the Act have limited remedies where an employee’s conduct contributed to the situation that gave rise to the grievance. Under s 123C, the Authority and the Court must not order reinstatement or compensation for humiliation and injury to feelings where the employee’s action contributed. Under s 123B, no remedies are available where the contributing action amounts to serious misconduct. This application was brought before those provisions came into force. An employee seeking reinstatement after a dismissal now needs to address contribution from the outset. If you have been dismissed and are considering reinstatement, contact us as early as possible.

Where the matter stands

The Authority has not yet determined the substantive personal grievance. Interim reinstatement does not decide whether a dismissal was justified, and each case depends on its own facts. MK Law continues to act for the employee.