It initially suspended the man without pay but amended that decision, allowing him to remain on full pay while suspended.
Earlier this year Open Justice reported an incident where an NZDF employee drunkenly groped five of his colleagues at a team-building event in 2020.
That staffer was not stood down while the complaint was investigated and he was instead allowed to work alongside one of the women who complained against him.
The NZDF said in a statement at the time that suspension was not a form of disciplinary action and only in very limited circumstances could it lawfully suspend an employee.
"Suspension depends on the circumstances and nature of the allegations… It is not usually justified if there is no reasonable likelihood of further misconduct occurring," the statement read.
However, in this instance, it was deemed justified and the man was stood down while an investigation into his conduct was launched, which the man said was unlawful.
In his submissions the employee said the allegations against him were "stale" and that the outcome was predetermined which meant it was essentially a "witch-hunt".
The man said he hasn't been provided all the relevant information against him and didn't have any ability to access that information because he had been locked out of his work email and other systems.
He also claims that some of the information against him was obtained unlawfully.
The defence force said it acted fairly given the circumstances and that at least one of the allegations was considered serious, and that all the concerns taken together could indicate a pattern of inappropriate conduct.
It said it had a duty to suspend the man to ensure a safe working environment for its staff.
The Employment Relations Authority found the NZDF had not been unreasonable in commencing an investigation into the man.
However, the man also claims he was unwell so the ERA ordered he produce a medical report to prove he was medically fit to participate in the employment investigation against him.