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Redundancy in New Zealand

Two things about New Zealand redundancy law surprise almost everyone. First, there is no automatic right to redundancy compensation — you get a payout only if your employment agreement provides one. Second, a redundancy is only lawful if it is genuine: a real business reason, fair selection and proper consultation. A "restructure" aimed at a person rather than a position is an unjustified dismissal wearing a costume. Call 0800 461 100 free, any hour, to test yours.

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Redundancy disputes run on the personal-grievance clock: 90 days from the dismissal to raise a grievance with your employer (Employment Relations Act 2000, s 114). If the process felt rushed, the consultation felt fake, or the "disestablished" role has quietly reappeared under a new title — raise it in writing before the window closes.

Redundancy at a glance

What makes it genuine

A real business reason for disestablishing the position, fair selection criteria fairly applied, and genuine consultation BEFORE the decision is made

Redundancy pay

No statutory entitlement in New Zealand — compensation only if your employment agreement (or a workplace policy incorporated into it) provides it

What consultation means

The proposal and its reasons shared with you, your feedback genuinely considered with an open mind, alternatives (like redeployment) explored — before anything is final

Notice

Your contractual notice period applies (or reasonable notice if none is stated) — redundancy does not erase notice rights

Challenge route

Personal grievance within 90 days → free mediation → Employment Relations Authority

The "genuine redundancy" test

A lawful redundancy is about the position, not the person: the business genuinely no longer needs the role — because of downturn, restructure, technology, or closure — and would have reached that decision regardless of who held it. The tell-tales of a dressed-up dismissal are familiar: the role "disestablished" and readvertised under a new title; a restructure that only ever affected one person; performance complaints suddenly appearing in a redundancy script; selection criteria bent to reach a predetermined name.

The Employment Relations Authority looks at substance over labels. If the reason doesn't hold, the dismissal is unjustified — with the ordinary remedies: lost wages, compensation for humiliation, even reinstatement. Talk it through with a lawyer now →

The process an employer must run

Even a genuinely redundant role can produce an unjustified dismissal if the process fails. Good-faith consultation requires the employer to share the proposal and the information behind it while the decision is still genuinely open, invite and consider your feedback, apply fair selection criteria where roles are compared, and explore alternatives — redeployment above all — before confirming. A "consultation" where the outcome was written before the meeting is the most commonly punished failure in this area.

Practical advice while it is happening: engage in writing, ask for the business case, propose alternatives, and take support to meetings — you are building either a better outcome or a better record. Talk it through with a lawyer now →

What you should walk away with

Check your employment agreement first: redundancy compensation clauses (commonly framed as weeks of pay per year of service) exist in many agreements and bind the employer — but absent a clause, New Zealand law gives no automatic redundancy payout. What everyone is entitled to: full contractual notice (or pay in lieu where the agreement allows), all unpaid wages, and all accrued annual leave paid out in the final pay. Scrutinise the final pay — leave calculations are one of the most commonly botched items in New Zealand payrolls. Talk it through with a lawyer now →

Challenging a redundancy

Raise a personal grievance with the employer in writing within 90 days — for the dismissal, the process, or both. The path is the standard one: free mediation (where many redundancy disputes settle, often with an improved exit package), then the Employment Relations Authority. Evidence wins these cases: the consultation emails, the business case (or absence of one), the readvertised role, the timeline. If you're mid-"consultation" now, the best time to get advice is before the decision — not after the goodbye morning tea. Talk it through with a lawyer now →

If redundancy is happening to you

Engage with the consultation — in writingAsk for the business case, propose alternatives including redeployment, and keep every email. Genuine engagement either improves the outcome or builds your grievance.

Check the moneyYour agreement's redundancy clause (if any), full notice, accrued leave, correct final pay. No statutory payout exists — the agreement is everything.

Test it before the 90 days runCall 0800 461 100 free, any hour, to test whether yours looks genuine — and book a NZ$295 (GST inclusive) consultation with a New Zealand employment lawyer on the call if it doesn't.

Redundancy — your questions answered

How much redundancy pay am I entitled to?

Whatever your employment agreement says — and nothing more by default: New Zealand has no statutory redundancy compensation. You are always entitled to proper notice and accrued leave in your final pay. Some agreements and collective agreements carry generous redundancy clauses; read yours before accepting any figure.

My role was made redundant and then readvertised. Is that legal?

It is the classic red flag. If the business still needs the work done, the position may not have been genuinely disestablished — which makes the "redundancy" an unjustified dismissal. Keep the advertisement and raise a grievance within the 90 days.

They announced the decision and consulted afterwards. Does that matter?

Enormously. Consultation must happen while the decision is genuinely open — sharing a done deal is a process failure that can make even a real redundancy unjustified. The remedy can include compensation for the flawed process.

Do they have to offer me another job in the company?

They must genuinely consider redeployment to suitable available roles — it is part of good-faith process. They are not required to invent a role, but ignoring an obvious vacancy you could fill is exactly the kind of failure the Authority penalises.

Should I sign the settlement/exit document they gave me?

Not before you understand what you are giving up — most exit documents waive your right to any grievance. Signing under time pressure is a choice you cannot easily unwind. A NZ$295 (GST inclusive) consultation to review the deal, bookable on the free call, is the cheapest second opinion you will ever buy.