There is a version of a difficult conversation that many employers reach for when patience has run threadbare and the employment relationship appears to have broken down. The message is put gently, almost as a kindness: resign, and we can all move on — otherwise, this ends in dismissal. To the employer it feels like a peaceful way out of a dire situation for both parties. To the employee it feels like the employer has already made a decision.

The Employment Court has again confirmed the consequences of that conversation in law. In South Pole IP Holding (NZ) Ltd v Hao [2026] NZEmpC 193, Judge Holden dismissed an employer’s challenge to a constructive-dismissal finding. The employee was told, in substance, that unless he resigned he would be dismissed. That is a dismissal, and, run without a proper process, an unjustifiable one.

What happened

Mr Hao was a food technology engineer, employed from October 2022, and reporting to a director, Mr Wu. However, by early 2024 the relationship had deteriorated. There were emails raising the prospect of disciplinary proceedings. On 26 January 2024, Mr Hao resigned, citing the toll the situation had taken on his mental health and the advice of his GP. On 22 February 2024 he raised a personal grievance for constructive dismissal.

The Authority upheld that grievance (Hao v South Pole [2025] NZERA 245). The employer challenged the determination and asked the Court to hear the matter afresh, meaning a full rehearing, not a review of the Authority’s reasoning. The Court heard it, and reached the same result. The challenge was dismissed.

The limb that decided it

Constructive dismissal in New Zealand runs through a settled three-limb framework, which the Court set out at [20]. In short: a constructive dismissal can arise where the employer gives the employee the choice of resigning or being dismissed; where the employer pursues a course of conduct calculated to make the employee resign; or where a breach of the employer’s obligations is serious enough that resignation is a foreseeable response.

This case turned on the first of those. At [30]–[31], the Court found that the employer had conveyed to Mr Hao that unless he resigned, he would be dismissed. That is the whole of the first limb, and it is important to understand how the Court came to this conclusion. The “choice” referred to here is not a choice at all. The outcome — the end of the employment — has already been settled by the employer; the only thing left to the employee is the label of the termination. The law looks past the label. Whether the employee jumps or is pushed, it is the employer’s decision, and it is therefore treated as a dismissal.

Once that is established, the question is no longer whether there was a dismissal. It is whether the dismissal was justifiable. Here, it was not — there was no proper process.

Where the process should have been

The duty of good faith in section 4 of the Employment Relations Act 2000 sits underneath all of this. Where an employer is contemplating a decision that may cost someone their job, good faith requires a fair process before the employer makes up its mind. This involves real communication, a genuine opportunity to respond, and a mind that is actually open to the response. An ultimatum reverses that order. The decision comes first; the process, if it arrives at all, is ornament on a conclusion already reached.

That inversion is what turned a possible dismissal into an unjustifiable one. The employer did not lack a lawful route; it declined to take it. If there were concerns serious enough to end the employment, there was a process available to test them fairly. Reaching for the ultimatum instead is the error — and it is a common one, because it feels efficient, and even humane, in the moment.

What it cost

The Court upheld the remedies awarded below. Mr Hao recovered $4,920 in wages withheld between 15 January and 9 February 2024, and $8,200 for unpaid annual leave. On top of that, the Court awarded $15,000 as compensation for humiliation, loss of dignity, and injury to feelings under section 123(1)(c)(i) of the Act. The total sits a little above $28,000 — before the costs of the challenge itself, and before the hours of management time a full rehearing consumes.

A cream folder of papers, a small burnished brass sphere, and a dark closed box arranged on a slate desk, a shaft of warm light falling across them.

Why this one matters

This is a full Employment Court judgment, not an Authority determination. An Authority determination resolves the parties before it; a Court judgment carries doctrinal authority for the line it draws. When we say that “resign or be dismissed” is a dismissal, this judgment adds to the existing law library on constructive dismissal.

Just as telling is how ordinary the mistake is. The resign-or-be-dismissed ultimatum is one of the quietest ways an employer converts a manageable problem into a liability. It rarely comes from bad faith. It comes from fatigue, from a wish to spare everyone a formal process, from the belief that offering resignation is the softer path. The Court’s answer is consistent, and unsentimental: the softer path, taken this way, is still a dismissal, and the absence of process is what makes it an unjustifiable one.

For the same terrain at Authority level, see our recent ERA roundup, where Guo v NZ Bus sits as the determination-level contrast. South Pole v Hao is where that line hardens into Court authority.

For an employer, the discipline is simple to state, and hard to hold when a relationship has soured. If dismissal is genuinely on the table, the answer is a fair process that could just as easily end another way — not an ultimatum dressed as an option. The choice offered to Mr Hao was never a real one, and the employer carried the consequences of taking that route.

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Sources

Lex Praxis advises New Zealand employers on employment law, including constructive dismissal, disciplinary process, and good-faith obligations. This article is general commentary and does not constitute legal advice. For advice specific to your circumstances, contact us directly.