According to the authority's finding, Mr Houghton said the second group was equally unhappy and refused to eat the meal.
Embarrassed, he took the group to a pub, paid for their meals and organised a birthday cake for one passenger "because he did not want the last night of the tour to leave a sour memory for her".
According to Mr Houghton the next morning passengers also complained about the the accommodation, saying it was unclean, cold and rooms were damaged.
The authority suppressed the name of the hotel.
Mr Houghton emailed Mr Hudson saying he was tired of dealing with complaints from passengers - and the company's failure to act on them, the finding said.
"Do you know what that is like to have 24 pax mutiny on their last night? You have yet again destroyed the end of another great tour for those pax," he wrote.
According to the finding Mr Hudson thought the email was "abusive and completely unacceptable" and forwarded it to his company's general manager Heather Bailey.
A heated conversation between Mr Houghton and his boss followed, during which the driver described the food at the hotel as "like f***ing pig slops" and said he would never feed it to a f***ing pig".
Mr Houghton was suspended on full pay ahead of a disciplinary meeting amid complaints from passengers about his lack of professionalism.
Some said he was "only interested in the people in the group who liked to drink and enjoy his jokes", said the finding.
Mr Houghton was told not to discuss the issue with anyone else before the meeting. He texted his boss to apologise for "blowing up" at him and said he was stressed at the time.
He also sent texts from his work phone to an employee at the hotel, another accommodation provider and Stray employees telling them his boss was trying to sack him and he was looking for a new job.
The day after the meeting he was sacked. In a letter, Ms Bailey said Mr Houghton's explanation for his "rude aggressive and disrespectful behaviour" was inadequate and she did not believe the conduct was isolated.
Authority member David Appleton said he had sympathy for Mr Houghton having to deal with the standard of accommodation and food at the hotel and passenger complaints.
But "sustained swearing at one's manager could constitute serious misconduct" and the company had acted reasonably in firing Mr Houghton, he said.
Mr Appleton also found Mr Houghton had breached instructions not to discuss the disciplinary issue with third parties and fined him $1000.
The bus company declined to comment and Mr Houghton's lawyer did not return calls.