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A recent Employment Court decision has reinforced an important message for New Zealand employers: if you choose to embed cultural values such as Pasifika values or tikanga into your employment agreements, position descriptions or policies, those values are not symbolic. They can become legally enforceable obligations.
This was made very clear in a March 2026 Employment Court decision, which attracted media attention after two employees were awarded a combined $75,000 in compensation. The Court found their employer had breached Pasifika values including respect during a restructuring and redundancy process.
Why This Employment Court Decision Matters for Employers
The employer was a Pasifika organisation that had explicitly incorporated Pasifika values into employment agreements and job descriptions. Those values included respect, family, community, reciprocity and spirituality. The employees were also hired in part because of their cultural capability and alignment with those values.
During a restructure, the Court found the employer failed to apply those stated values in practice. Key issues included inadequate engagement, poor consultation, rushed decision making and termination by email rather than face to face engagement. The Court held that these actions were inconsistent with Pasifika values and with the employer’s good faith obligations under the Employment Relations Act.
Importantly, the Court did not say that Pasifika values replace standard employment law obligations. Rather, the values were expected to be applied on top of them. Because the employer had chosen to incorporate those values into the employment relationship, it was legally bound to honour them in how decisions were made and communicated.
Earlier Employment Court Decisions Show This Approach Has Been Developing for Some Time
While this case is significant, it does not come out of nowhere. There has been a clear direction from the Employment Court over several years that employers will be held to the values they choose to adopt.
A well-known earlier example involved New Zealand Customs, where tikanga Māori values had been incorporated into organisational principles and employment documentation. In that case, the Employment Court found Customs failed to act consistently with its tikanga commitments during an employment process, contributing to a finding of unjustified dismissal. The Court stated that employers cannot selectively apply their values or treat them as aspirational only.
Together, these cases confirm a consistent message from the Court: where cultural values are written into the employment relationship, they form part of the legal framework against which an employer’s actions will be assessed.
The Real Employment Law Risk for Employers
The key risk is not having values. The risk is having values that you do not fully understand, genuinely apply or consistently live day to day.
Values that reference tikanga or Pasifika principles often require a deeper understanding of cultural concepts, communication styles, decision making and relationship-based processes. Without that understanding, employers may unintentionally breach the very values they intended to honour.
From the Court’s perspective, values cannot be used as window dressing or virtue signalling. If they are included in contracts or policies, they are expected to meaningfully shape behaviour, particularly during high-risk processes such as restructures, performance management and disciplinary action.
Practical Guidance for Employers
For most small to medium businesses, the safest and most practical approach is cautious restraint.
You do not need to reference tikanga or Pasifika values in order to have strong, fair and lawful employment policies. The existing employment law framework already requires good faith, fairness, respect, consultation and reasonableness.
If you are considering incorporating cultural values into your employment documentation, our advice is to do so only where:
- Those values are already genuinely embedded in the workplace
- Leaders understand how those values should influence decision making
- Managers are trained to apply them in practice
- You have sought advice from tikanga or Pasifika cultural experts, not just legal advisors
Without this groundwork, well intentioned values can inadvertently increase legal risk rather than reduce it.
Why Employers Must Apply Workplace Values Consistently
The Employment Court is not requiring all employers to adopt cultural value frameworks. What it is saying is simple and consistent with long standing employment law principles: if you choose to include certain values in your employment relationships, you must act consistently with them.
For employers, this means being thoughtful about what is included in policies, position descriptions and contracts, and ensuring those commitments can be honoured in practice.
Stay Ahead with RSM
Need help preparing for these changes? RSM’s People & Culture team can help you review your policies, values statements or employment agreements in light of these decisions, or provide advice on how to manage cultural considerations safely and appropriately.
Contact Kerryn Strong to learn more.
