Employer ordered to pay worker $10k after withholding holiday pay

Wednesday, 22 July 2026

A Christchurch employer has been ordered to pay more than$10,000 to a former worker after failing to pay his holiday entitlement when he left the company, with the Employment Relations Authority finding it breached the Holidays Act.

In a determination released this month, the Authority ruled Sharp Service Limited breached the Holidays Act after failing to pay Ilfaaz Hussain his outstanding holiday pay when he resigned after about three years with the company.

Authority member Philip Cheyne found Hussain gave the required two months’ notice and finished work on October 4, 2025, but while he received his final wages, he was never paid his holiday pay.

“Sharp failed to pay holiday pay to Mr Hussain,” Cheyne said.

The Authority found Hussain was owed payment for 26.25 days of untaken annual leave, accrued holiday pay since his last leave anniversary and payment for Labour Day, which fell within the period covered by his outstanding leave entitlement.

Sharp Service Limited was ordered to pay $10,355.83 in gross holiday pay, $311.89 in interest and $71.55 in costs by July 24.

The case also highlighted the limits on employers deducting money from a worker’s final pay.

During the proceedings, Sharp indicated it believed Hussain owed the company money and pointed to a clause in his employment agreement allowing deductions from wages and holiday pay.

However, Cheyne said even if the company had formally pursued that argument, it would likely have struggled under the Wages Protection Act.

Sharp had not consulted Hussain about any deductions, as required by law, and the Authority said deductions based on reassessing wages already paid long after the work was done would likely be unlawful.

“Deductions based on reconsidering an employee’s right to hourly wages already paid months earlier are likely to be unreasonable,” Cheyne said.

The Authority also criticised Sharp’s handling of the case.

Although the company participated in an early case management conference, it did not file a formal response to Hussain’s claim or pursue its own claim against him. It also failed to provide payroll records after undertaking to do so.

Cheyne said delaying the case further because of the company’s failure to engage with the Authority would be unfair to Hussain.

During the proceedings, Sharp’s representative also referred to the possibility the company could enter liquidation. The Authority made no findings on that issue but reserved Hussain’s right to seek further orders under the Employment Relations Act if the company is unable to pay the amounts ordered.