Mr Malcolm said he then told Ms Drawbridge to "bugger off" because he was annoyed she had her dog in the milking shed, that it was chasing cows and that she did not respond to repeated requests to remove it.
He claimed the catalyst for the blow-up was when she threw a piece of alkathene pipe at him after she heard him call her a "silly b****".
Mr Malcolm has denied telling others later in the day that he had sacked Ms Drawbridge and claimed she had misinterpreted what was said and did not respond when he made two phone calls and two visits to talk about what had happened.
However, authority member Robin Arthur found the way in which Ms Drawbridge was sent away was "not what a fair and reasonable employer would have done in all the circumstances at the time".
Mr Arthur acknowledged Mr Malcolm had later tried to meet Ms Drawbridge, but found it was to hand over final pay documents.
Ms Drawbridge told the Weekend Herald the blow-up left her "stuffed for quite a few months".
"I was having a very hard time sleeping, I'd just keep waking up, and with my stress I was finding it hard just to eat food."
She said she was satisfied with the decision for the company to pay her $6000 compensation and thousands more in lost wages and holiday pay.
Mr Malcolm said yesterday he believed it was virtually impossible for employers to fully comply with the law and he was disappointed but not surprised at the authority ruling.