Redundancy in New Zealand: Your Rights and What You're Owed
Understand redundancy rights in New Zealand — no statutory redundancy pay, fair process requirements, notice periods, and how to challenge unfair redundancy.
NZ has no statutory redundancy pay
This is the single biggest difference between New Zealand and Australian redundancy law. In Australia, the National Employment Standards provide a redundancy pay scale of 4 to 16 weeks' pay based on length of service. In New Zealand, there is no such statutory entitlement. An employer in New Zealand is not legally required to pay any redundancy compensation unless it is specifically written into the employee's individual employment agreement or collective agreement. Many employees are shocked to learn this when they are made redundant. If your employment agreement is silent on redundancy pay, you have no right to receive it regardless of how long you have worked for the employer.
What your employer must do: genuine reason
While NZ employers don't have to pay redundancy, they can't just make someone redundant for any reason. The redundancy must be genuine — meaning the position itself must be genuinely surplus to requirements due to a real business reason such as restructuring, downturn in work, technological change, or outsourcing. The employer cannot use redundancy as a pretext to dismiss an employee they simply don't want. If the same role is advertised shortly after the redundancy, or if the employee's duties are simply reassigned to someone else, the redundancy may not be genuine. A sham redundancy can form the basis of a personal grievance claim for unjustified dismissal.
The fair process requirement
New Zealand employment law places heavy emphasis on procedural fairness. Before making an employee redundant, the employer must: provide the employee with genuine information about the proposal and the reasons for it, give the employee a reasonable opportunity to comment on the proposal before any decision is made, genuinely consider the employee's feedback and any alternatives they suggest, and act in good faith throughout the process. This means the employer cannot present the redundancy as a done deal — the consultation must be real and meaningful. Rushing the process or treating it as a formality can make the redundancy procedurally unfair, even if the underlying business reason was genuine.
Notice periods when made redundant
The notice period for redundancy in New Zealand is whatever is specified in the employee's employment agreement. If the agreement doesn't specify a notice period, the employer must give 'reasonable notice.' What's reasonable depends on the circumstances, including the employee's seniority, length of service, and how long it might take them to find comparable employment. Generally, 2-4 weeks is considered reasonable for most roles, with longer notice expected for senior positions. The employer can choose to pay the employee in lieu of notice (i.e., pay them for the notice period without requiring them to work). During the notice period, the employee is entitled to take reasonable time off to attend job interviews.
What you are entitled to receive
Even without statutory redundancy pay, you are entitled to receive several things in your final pay: all outstanding wages up to and including your last day, payment for any accrued but untaken annual leave (including 8% holiday pay for any leave not yet accrued if you have been employed for less than 12 months), payment in lieu of notice if you are not required to work your notice period, any other contractual entitlements such as bonuses or commissions earned up to your termination date, and redundancy compensation if it is specified in your employment agreement. Your employer must pay your final pay on the next normal pay day, or as soon as possible after your employment ends.
Personal grievance if the process is unfair
If you believe your redundancy was not genuine or the process was unfair, you can raise a personal grievance for unjustified dismissal. You must raise the grievance with your employer within 90 days of the date the dismissal took effect. Start by writing to your employer setting out your concerns. If the matter cannot be resolved directly, you can request free mediation through the Employment Mediation Service. If mediation fails, either party can refer the matter to the Employment Relations Authority (ERA), which can investigate and make binding determinations. Remedies can include reinstatement, compensation for lost wages (up to 3 months is common), and compensation for hurt and humiliation (typically NZ$5,000-25,000).
Tips for protecting yourself
Before you start a new job in New Zealand, negotiate redundancy provisions into your employment agreement — this is the only reliable way to ensure you receive redundancy pay if the situation arises. Aim for a redundancy clause that specifies a minimum number of weeks' pay per year of service (e.g., 4 weeks for the first year plus 2 weeks for each subsequent year). If you are going through a redundancy process, ask for everything in writing, request adequate time to consider the proposal and seek advice, suggest alternatives such as redeployment or reduced hours, and keep copies of all correspondence. Consider contacting a Community Law Centre for free advice or engaging an employment lawyer if the amounts involved justify the cost.
General information and estimates only — not legal, financial, or tax advice. Always verify with the Fair Work Ombudsman (13 13 94) or a qualified professional.