Ms Hemmingson took Mr Swan to the ERA claiming unjustified constructive dismissal, and is seeking compensation for emotional harm, humiliation and distress.
She had been working at Barkers Groom Room in central Auckland, a hair salon which operated independently of Barkers Clothing company, for around five weeks when she approached Mr Swan in April last year to tell him she intended to live as a woman -- something she had already been doing in her private life.
"I just asked him if he and the business would be able to support me in my transition and we would go from there," she told the ERA today.
A second meeting was arranged for the following week, and Ms Hemmingson said she believed it was "going to be about pronouns, dresscode and which bathrooms to use", and would "not at all" have anything to do with her employment.
"I'm smart enough to ask for a support person if I thought it was going to be intimidation," she said.
During the meeting she claims she was told her transition would make clients uncomfortable.
"I was shocked," she said. "I [thought to myself], 'I don't see an issue. I thought you were supportive of me?'."
She added: "I was told I didn't fit a commercial profile, and then I was asked how I wanted to go about this. I said, 'I don't want to be somewhere where I can't be myself'."
She was later told if the transition didn't work out and she went back to being a man she could be employed again, she said.
However, Mr Swan denied such comments were made, or that the company only wanted employees that fit a certain "brand".
He and Mr Everett were merely concerned that some people may not be comfortable with a transwoman doing their hair and wanted to make sure she wasn't subjected to harsh comments -- such as those which had previously been hurled at a gay hairdresser.
"I didn't want her to leave, that's why when she said she wanted to leave I was dumbfounded by it," he said, describing Ms Hemmingson as a "good employee".
"I was completely astonished by it because it was not where I thought the conversation was going," he added.
Mr Swan said he was concerned for Ms Hemmingson and her safety because "some guys, when they get caught up in a male environment, can get a bit raucous".
Ms Hemmingson was then given a letter which read: "We would like to mutually agree that due to the situation you have presented to us it would be in the best interests of yourself and the business to end your employment with Mensworks and Barkers Groom Room effective immediately."
Today Mr Swan agreed the letter wasn't "worded very well to what I was trying to document".
He added: "I obviously did sign it so I need to take responsibility for the letter and how it reads."
Ms Hemmingson said she was later successfully employed by Rodney Wayne Glenfield, where she had both male and female clients, and good retail sales. She denied having any abuse from clients or having had clients say they were uncomfortable with her doing their hair.
ERA member Rachel Larmer reserved her decision.
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