The chief ombudsman says the Ministry of Business, Innovation and Employment (MBIE) acted unreasonably while handling a MIQ case involving seafarers.
Peter Boshier released the findings of his investigation into the complaint today.
Two seafarers told MBIE it was virtually impossible to book a managed isolation spot between November 2020 and March 2022.
They were trying to book at sea with limited internet and without knowing when they would dock.
Boshier said MBIE advised the minister the system was suitable for their situation.
"[MBIE] recommended against creating a specific offline allocation of places for them," he said. "The minister accepted the advice and, consequently, the offshore seafarers had no choice but to continue using the online allocation system."
The ministry drew inappropriate comparisons to land-based work and did not fully address the seafarers' key worker status or human rights, Boshier said.
He said he understood the system had to deal with large numbers of people seeking to re-enter the country and difficult decisions had to be made.
"Even when taking these factors into account, I consider that there are legitimate concerns about the advice given [in this case].
"In my view, common sense, consideration of the seafarers' unique circumstances and a sense of humanity were needed in MBIE's decision-making and subsequent advice around how the managed isolation allocation system affected these men," he said.
"This had a direct and personal effect on both of the men at the centre of these complaints."
He recommended the ministry apologise to them.
Managed Isolation and Quarantine general manager Shayne Gray said in a statement to RNZ that MBIE "considered the Ombudsman's report and has accepted his recommendation to provide fresh advice to the minister on offshore seafarers as part of the design of any future national quarantine system".
"MBIE would also like to acknowledge those New Zealanders including members of the seafaring community who had difficulty securing a space in MIQ, many of whom remained overseas and separated from family, some in extremely difficult circumstances... MBIE is committed to further work with relevant agencies to ensure the needs of New Zealand seafarers are included in any future response.
"MBIE would like to acknowledge the constructive and continual engagement between the Office of the Ombudsman and the Ministry during this process and findings from his report will be incorporated into our ongoing work."