"The passenger made a pointed comment to Ms Kilpatrick and she then rudely berated him for watching her while she ate her meal. She then told the other crew members in the galley in a loud voice 'He has been watching' after the passenger had moved on but was still within earshot."
The airline said Ms Kilpatrick had not programmed in-flight entertainment screens to include food orders for people wanting to buy food.
The Employment Court decision said Ms Kilpatrick tried blaming another flight attendant for the in-flight screen oversight.
"When instructed to do the inventory by Ms Coyle, Ms Kilpatrick replied it was not her problem, turning her back on Ms Coyle and walking to the other side of the galley," Judge Perkins added.
Ms Kilpatrick earlier took her case to the Employment Relations Authority (ERA).
In 2013, the ERA ruled she was justifiably dismissed, and ordered her to pay $10,000 in costs to the national carrier.
But Ms Kilpatrick fought that decision, seeking reinstatement at an Employment Court hearing in Auckland.
At an appeal hearing in June, Ms Kilpatrick broke down in tears, describing emotional and financial hardships she experienced after losing her job.
The Employment Court dismissed Ms Kilpatrick's appeal in its entirety.