Auckland –
A Labour Inspectorate investigation into two Auckland-based companies and related salon businesses has culminated in Employment Court orders that leave the couple identified as the principal owners carrying structured personal liability for employee arrears while their corporate entities entered voluntary liquidation and assets changed hands. The Employment Court’s recent decision fixed total wage arrears at $190,769.57, made the couple jointly liable, and recorded a negotiated payment arrangement that would remove one co-defendant from the proceedings if a specified interim payment was made.
The case arose after two employees complained to the Labour Inspector, triggering an investigation that ran from May 30, 2023 to April 9, 2024. Inspectors interviewed witnesses, analysed wage and time records, reviewed photographs of rosters and manual cash payslips, and examined text messages and group chats. The inspector found multiple breaches of the Minimum Wage Act, the Holidays Act and the Wages Protection Act, and initially estimated the two employees were owed in excess of $205,000 in unpaid wages. Guidance from the Ministry of Business, Innovation and Employment on minimum wage rates and record‑keeping requirements underpins those findings.
A year after the Labour Inspector filed proceedings with the Employment Court the two corporate defendants were placed into voluntary liquidation by one of the principals, identified in court material as Dao. All four nail-salon businesses associated with the companies were subsequently sold; the first liquidator’s reports for companies trading as KH68 and ALEX89 disclosed that, in addition to employee arrears, more than NZ$1 million was owed to Inland Revenue. The reports also record the sale of five vehicles during a period when the companies were engaged in court mediation. These corporate and asset moves prompted the Employment Court to impose asset-preservation measures to ensure that any eventual judgment would not be rendered hollow.
Key figures and court-ordered payment terms
- Total arrears fixed by the Employment Court: NZ$190,769.57.
- Joint liability assigned to: Dao and Viet Hung Nguyen, in their personal capacities.
- Interim concession: a NZ$60,000 payment to the MBIE trust account would see the Labour Inspector drop claims against co-defendant Duong Alex Nguyen, effectively narrowing the proceedings to the two principal owners.
- Balance to be paid: NZ$130,769.57 in 18 monthly instalments of NZ$7,264.97 (instalments scheduled to start on April 13).
- Latest freezing order recorded in court records: December 11, 2025 (covering property owned directly by Dao and Nguyen, with carve-outs for bank accounts where the Labour Inspector can obtain bank statements directly from banks).
The court flagged transactional conduct as concerning for creditors and the employee claimants. Judge Kathryn Beck observed that the businesses appeared to have been sold “for a value below their real value, and/or they may have been on-sold to family or friends ‘on paper’ and could be operated by another legal entity with the first and second respondents remaining as the owners”.
“The applicant submits that the respondents’ omission to advise her of their intention to sell the four businesses and five vehicles demonstrates a real risk that the respondents are reorganising their affairs in a manner that could place their assets out of reach should judgment be issued against them.” – Judge Kathryn Beck
The court record also notes the applicant’s broader concern that “the circumstances of the sale of the four businesses are of considerable concern.” Those concerns prompted an initial freezing order to prevent further disposals, a measure subsequently continued by the court. The court’s December 11, 2025 order preserved property interests while permitting limited bank-account access for investigatory purposes where the Labour Inspectorate could obtain balances and statements directly from banks.
Regulatory and enforcement framework in play
The procedural route in this matter reflects the Labour Inspectorate’s statutory role in detecting and addressing non‑compliance with employment-standards legislation and in pursuing remedies where breaches are identified. The Labour Inspectorate is mandated to enforce minimum employment standards and can bring proceedings to recover unpaid wages and penalties under the statutes it administers, including the Minimum Wage Act, the Holidays Act and the Wages Protection Act. Its enforcement powers sit within the wider employment law framework overseen by the Ministry of Business, Innovation and Employment.
Employers in New Zealand must meet minimum-pay and holiday-pay obligations set out in legislation. The Minimum Wage Act requires employers to pay at least the statutory minimum for each hour worked and to maintain accurate records of hours and wages; the Holidays Act prescribes entitlements and mechanisms for calculating holiday and public-holiday pay and provides specific enforcement paths for the Labour Inspectorate, including proceedings to recover arrears. Those statutory frameworks are the legal basis for the inspectorate’s claims in the Employment Court and form part of the country’s core employment-standards regime.
The Employment Court’s use of asset-preservation remedies in employment litigation follows legislative changes and case law developments that give the Court powers analogous to Mareva (freezing) and Anton Piller (search) orders in appropriate cases. The availability of freezing orders reflects a judicial tool intended to prevent dissipation of assets when there is a real risk that a successful judgment could be rendered unenforceable. In this instance the court found sufficient risk in the timing and manner of asset disposals to justify continued restraints, underlining a willingness to look through corporate structures where necessary to protect employees’ statutory rights.
Insolvency mechanics and creditor priorities
Liquidation of the corporate entities transferred the immediate responsibility for asset realisation to court-appointed or voluntary liquidators, who are required by the Companies Act to prepare statements of affairs and report on distributions and proposals for conducting the liquidation. Liquidators must account for realised assets and distribute recoveries according to statutory priorities set out in the Companies Act 1993, which places certain employee entitlements and Inland Revenue claims ahead of unsecured creditors.
The first liquidator reports, as recorded in court material, identified tax debts exceeding NZ$1 million alongside the employee arrears. The combination of preferential creditor claims, frozen assets and ongoing court supervision is likely to constrain what funds are available for distribution to unsecured creditors and to shape any recovery prospects for the employees who lodged the original complaint. Those dynamics also inform why the Labour Inspector pursued a freezing order and why the Employment Court scrutinised the timing and counterparties to the asset disposals so closely.
Sector and governance implications
The case sits at the intersection of small-business operations, employment-standards enforcement and insolvency practice. Nail salons and similar retail and service micro-enterprises commonly operate with thin margins, intensive cash handling and informal labour arrangements; those structural characteristics can complicate payroll compliance and record-keeping obligations that statutes require. The inspectorate’s investigation techniques in this matter – witness interviews, payroll and rostering records review, and digital message analysis – reflect an enforcement model that relies on forensic scrutiny of both paper and electronic trails to establish breaches.
For creditors and practitioners, the sequence here – complaint, inspectorate investigation, court proceedings, corporate liquidation and asset disposals followed by court-ordered preservation measures – highlights how enforcement, insolvency and civil remedies can overlap. Liquidators’ obligations to report and realise assets under the Companies Act provide structured mechanisms for distributing recoveries, but statutory priority rules and secured or preferential claims can reduce recoveries available to unsecured creditors, including former employees. For regulators, the case underscores how personal liability orders and proactive freezing directions can be used to reinforce the integrity of New Zealand’s minimum employment standards framework and to signal that winding up a company will not, on its own, extinguish responsibilities to workers.
Procedural status
The Employment Court fixed total arrears at NZ$190,769.57 and held Dao and Viet Hung Nguyen jointly liable. The parties agreed terms under which a NZ$60,000 payment to the MBIE trust account would see the Labour Inspector withdraw claims against co-defendant Duong Alex Nguyen; the balance of NZ$130,769.57 was to be paid by instalments of NZ$7,264.97 over 18 months, with instalments scheduled to begin on April 13. The court has continued an asset-freezing order (the latest recorded on December 11, 2025) that remains in force over property owned directly by Dao and Nguyen, subject to the inspectorate’s access to bank statements. Any further issues relating to the case will be heard in court in mid‑April, when the judge is expected to review compliance with the payment schedule and the ongoing appropriateness of the asset-preservation orders.