Hi rktcabuay,
I'm very sorry to hear this bad news!
At this point, it's useless to suggest what you and your wife should/could've done to prevent this from happening so I'm just going to share my 2 cents on what I think about the facts you provided here:
The case officer stated that at this point, it "appears" to them that your wife did not meet the skilled migrant policy requirements in operational manual SM7.15, now if we try to refer to details of that policy and check against the information you told us:
a. Skilled employment only qualifies for points if the employment is:
i. fulltime (employment is full-time if it amounts to, on average, at least 30 hours per week); and
Does the contract shows that your wife's work is at least 30 hours a week? If yes, then we can assume it is fulltime.
ii. genuine; and
I assume yes?
iii. for a position that is paid by salary or wages or in terms of a contract for service (payment by commission and/or retainer are not acceptable), and
If she's not paid by commission, looks good
iv. accompanied by evidence of full or provisional registration, or evidence of eligibility for registration by the New Zealand Medical or Dental Council subject only to an interview with the relevant registration authority on arrival, if full or provisional registration is required by law to undertake the employment (see SM19.20); and
If registration not required, not applicable
v. the employment was not offered as a result of payment made by the applicant (or their agent) to the employer (or their agent) in exchange for securing that offer of employment. Such practices are contrary to the principles of the Wages Protection Act 1983, as well as to immigration instructions.
If legitimate, not applicable
b. Employment must be ongoing and sustainable. Ongoing and sustainable employment is:
[I]i. an offer of employment or current employment with a single employer and permanent, or indefinite, or for a stated term of at least twelve months with an option for the employee of further terms, and of which the employer is in a position to meet the terms specified; or[/I]
This is the specific policy cited by the officer concerning the sustainability of the employment. But according to you, the contract explicitly states the contract for 13 months ("at least twelve months" - check), with possibility of permanent role offer ("with an option for the employee of further terms" - check). My guess here why it becomes a concern, is the fact that it is NOT guaranteed that your wife will get the permanent role after the specified contract duration, but the policy also mentions that "and of which the employer is in a position to meet the terms specified". I may be wrong but how I interpret this is if your wife's employer can actually back her up, perhaps through letter or a new contract that states a more permanent role, show willingness to support her or other proof of sustainable employment, contract extension due to huge amount of work in the pipeline, etc.
It may help to mention the other offer in Tauranga just to emphasize that she can find skilled employment but decided to take the other (current) job because of the considerations you told us. This is your last chance to tell them your side, try to tell them all rather than hold back and regret later when it's too late. If it's really just a matter of wrong choice rather than inability to find skilled employment, try to stress that and make sure that comes across to them clearly.
ii. employment on a contract basis where the applicant:
* has a consistent history of contract work, and
* has a current contract for services, and
* INZ is satisfied that such contract work is likely to be sustained.
It might help if your wife has contract work history, but in the end it's a matter of proving if current work can be sustained for a long time
c. In the case of independent midwife practitioners a letter of authority to claim under the Maternity Notice pursuant to Section 88 of the New Zealand Public Health and Disability Act 2000 as well as evidence of admission to the New Zealand Register of Midwives will satisfy the requirements of SM7.5(b), SM7.15(a)(i),(ii) and (iii), SM7.15(b), and can be used to satisfy the requirements of SM4.30.10(a)(i).
Unless your wife is Midwife, then not applicable
I can't give info on other routes you can take, like going for work visa essential skills route due to my limited knowledge of that visa type and your wife's line of work.
I hope it didn't come out as giving an immigration advice because it's not, I just matched the facts you provided against the policy your CO cited, MODS -- do let me know otherwise.
Best of luck! Hope this helps.