A childcare worker accused of physical violence against children has been compensated after her sacking was deemed unfair.

But a family-focused lobby group has described the lengthy process that led to her sacking as a witchhunt.

Teacher Mary Barratt was fired from Te Puna Reo o Wairaka, the Maori language early childhood centre at Unitec polytech in Mt Albert, late last year after allegations of rough handling of three children.

This week, the Employment Relations Authority found that the investigation into her dismissal was not full and fair.

Ms Barratt was alleged to have smacked one child, hit another across the head and threatened her own grandchild with smacking. The children were aged 2 to 5.

She denied the allegations and took her case to the authority, seeking $15,000 in compensation and six months' lost wages. In August last year, a mother told the centre she had seen Ms Barratt pull a boy off some cushions and smack him on the bottom.

After a second allegation, Ms Barratt hired a lawyer and the centre employed a child psychologist to interview the children who witnessed the incidents. The youngsters gave differing accounts.

Te Puna Reo o Wairaka board chairman Richard Neal found that in the first incident Ms Barratt had removed the boy from a place he might have fallen and hurt himself.

After further investigation, he concluded Ms Barratt had "on the balance of probabilities" twice smacked a child at the centre.

He told her smacking constituted serious misconduct and she was likely to be dismissed. Ms Barratt did not respond to an invitation to meet "one last time" to discuss her career, and she was fired.

ERA member Vicki Campbell found the centre did not have enough information to prove serious misconduct, and said its investigation was not full and fair.

In the first case, the boy did not tell his parents about the incident, which suggested it was a guiding touch, not a smack.

Ms Campbell said the mother did not report the alleged smacking for four months after being told of it, which "should have raised alarm bells".

Ms Barratt was awarded three months' lost wages and compensation of $7000 for the suffering caused by her dismissal.

Family First spokesman Bob McCoskrie said the investigation was necessary, but anti-smacking legislation had created a culture of professional paranoia in dealing with children. He said the centre's investigation became dramatic and unreasonable.

He added that the reliance on hearsay and use of a child psychologist had threatened to turn the investigation into a witchhunt.