Redundancy in New Zealand — Know Your Rights
Redundancy happens when an employer decides a job is no longer needed — not because of the employee's performance, but because the role itself is being disestablished. NZ law does not require a minimum redundancy payout unless your employment agreement says otherwise, but it does require a fair process.
What Makes a Redundancy Genuine?
A genuine redundancy must be driven by a real business reason, such as:
If the employer is simply using "redundancy" as a cover for dismissing someone unfairly, that is an unjustified dismissal — not a genuine redundancy.
The Fair Redundancy Process — Step by Step
Step 1: Proposal Notice
The employer must give the employee written notice of the proposal to disestablish the role. This is not the final decision — it is a starting point for consultation.
Step 2: Genuine Consultation
The employer must genuinely consult with the employee. This means:
Consultation is not just informing — it must be genuine engagement.
Step 3: Consider Redeployment
Before finalising redundancy, the employer must actively consider whether there are alternative roles the employee could fill.
Step 4: Final Decision and Notice
If redundancy proceeds, the employer must give notice as specified in the employment agreement. If not specified, reasonable notice applies (usually 2–4 weeks depending on seniority).
Redundancy Compensation
No statutory minimum exists in NZ law. Your entitlement depends entirely on your employment agreement.
Check your agreement for:
If your agreement is silent on redundancy pay, you are entitled to holiday pay owed but not additional compensation.
Can You Challenge a Redundancy?
Yes. If the process was unfair or the redundancy was not genuine, you can raise a personal grievance within 90 days of being notified.
Common grounds for challenge:
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LexNZ provides legal information only — not legal advice. For your specific redundancy situation, consult a registered NZ employment lawyer.