The passenger's allegations were later found to be unsubstantiated.
Dunn had spent three months off work on sick leave after a work-related accident and was returning to Auckland from a holiday in the US.
An internal investigation found Dunn had effectively taken a double-dose of her prescribed medication within a 24-hour period and had been drinking before and during the flight. The airline's chief medical officer deemed the cocktail of medication and alcohol had "very likely" played a significant role in the mid-flight episode.
The officer said Dunn had adjusted the timing of the doses of her prescribed medication to account for her flight times. Unfortunately, they ended up being too close together. Because of that, it was plausible that her medication could have had a significant impact on her thinking, behaviour and judgement.
"It was likely that the changed timing of the doses would have increased her susceptibility to the effects of small amounts of alcohol with side effects including mild confusion, elevated mood, behaviour which is out of character, poor judgement or decision making and exaggerated effects from small amounts of alcohol which could include sedation," said the medical officer.
After a series of meetings between the airline and Dunn, it was agreed her travel privileges would be suspended for six months and she would be given a letter of expectations from the airline.
The finding released by the ERA stated an airline official originally "proposed a 12 month suspension of travel privileges".
"The offer of six months withdrawal of privileges came from Ms Dunn's representative after they had consulted privately during a break in the meeting," authority member Vicki Campbell wrote.
In an email to the Herald, Dunn's employment advocate Victor Corbett said the representative was from her union, adding: "My analysis of that is, now if an employee's representative asks for a reduction of a penalty, it is an automatic agreement that cannot be challenged, and given the inherent power imbalance in an employee and employer relationship, it leaves us in a very perverse legal position.
"The context of the alleged agreement was important and was overlooked in the Authority."
In the employment dispute, Dunn claimed her performance review had been compromised by the letter and as a result she received a smaller-than-usual bonus of $500.
She also claimed having her travel privileges curtailed and the impact on her bonus payment were unjustified and led to her job being affected to her disadvantage. Air NZ had breached its obligations to act in good faith, something the airline denied.
The authority found aspects of Dunn's job were not adversely affected to her disadvantage and the company did not breach good faith.
