There was confusion over who would take responsibility to replace the $10.
The worker's direct manager went through over 120 hours of video footage, and found the one disputed incident.
After watching the video, the worker told her manager the purchasing of the lozenges showed she had no intent to steal money.
The Employment Relations Authority agreed and said Senior People and Capability Advisor Andrew Munro's notes appeared to "wrongly record this response".
The CDHB fired the worker for "misappropriating cash and acting in a deceptive manner with intent".
CDHB counsel Christopher Dury told the authority there was no dispute of the facts that the worker's actions were dishonest as she "deliberately took the money from the jar".
However, in his judgment, ERA member David G Beck disagreed and said the CDHB did not establish intent.
Beck said the CDHB tried to use simplification that confuses deliberately with intent.
He said the worker did not intend to permanently deprive the jar of funds for the cat's welfare.
Beck slammed the CDHB, he said it fell woefully short of procedural fairness.
"The CDHB wrongfully concluded serious misconduct."
He said a CDHB HR practitioner ostensibly failed to give appropriate guidance to hospital staff.
Employment Law advocate Robert Thompson, whose company acted on behalf of the worker, told Chris Lynch: "This was a poorly run process with an employer that failed to treat its employee fairly or reasonably.
"The consequence and reputational damage for our client was horrible."
The Canterbury District Health Board was ordered to pay the worker $15,863.60 gross lost wages and $27,000 compensation.
Canterbury District Health Board acting chief people officer Paul Lamb told Lynch the board is currently considering its legal position.
"As such, it is inappropriate for us to make any comment at this stage. This includes whether or not the DHB intends to appeal the matter."
