Unfair Dismissal in New Zealand: Understanding the Difference Between Lawful and Unlawful Termination

Being terminated, dismissed or given the sack is never easy.  Under New Zealand employment law, termination can happen in many ways. But some kinds of termination are lawful, while others are not. And sometimes it can be hard to know the difference.  

What is Lawful Termination?

Lawful termination means your job has ended for a valid legal reason, and your employer followed the right steps under New Zealand law. Usually, that means:

Redundancy or restructuring: Your position is no longer needed.

Performance-related issues: You’re not meeting the required standard and a performance improvement plan has been applied appropriately. .

Misconduct: You’ve broken important workplace rules and an investigation and disciplinary process has been carried out.  

90 day trial: You didn’t pass the trial period.

Mutual agreement: You and your employer both agree to end the job.

To be lawful, a termination process must also be fair and reasonable. This means you need to have been  given a clear reason for the termination, you were allowed to respond or explain your side of any disagreement or allegations and/or alternatives such as retraining, warnings, or changing your duties, were considered.  

Example: Jamie works at a call centre. Sales are down, and management decides to make Jamie’s role redundant. They meet with Jamie, explain the business reason, let Jamie ask questions, and offer redundancy pay. That’s a lawful termination, because it’s necessary, fair, and done properly.

What counts as Unlawful Termination?

Unlawful termination or unfair dismissal occurs when there’s no good reason, the employer doesn’t follow fair steps and/or it breaks the rules set by the Employment Relations Act 2000. Under New Zealand employment law, every employee has rights. Employers must act in good faith and treat people fairly right up to the final day. 

Common signs of unlawful termination include:

No valid reason: Sacking someone based on age, gender, ethnicity, or other protected traits.

Skipping the process: Giving no warnings or chance to explain performance issues or misconduct.

No notice: Ending employment immediately without a valid reason.

Retaliation: Sacking someone for raising health and safety concerns or complaining about pay.

If you’ve been unfairly let go, you can take a personal grievance case. That’s a legal process where you can seek reinstatement (getting your job back), compensation, or just an apology.

Example: Alex is upset by ongoing unsafe practices at work. He raises concerns with his boss.  The next week, he’s let go with no warning or explanation.  This looks like retaliation.  Alex had a legal right to speak up about his concerns. A fair process was not followed resulting in him losing his job. He may have a case for unfair dismissal.

What to do if you think your Termination is Unfair Dismissal?

Check the reason: Was it based on job-related matters? Was it discriminatory?  Ask your employer for clarification (preferably in writing) for why you have been dismissed.  

Review the process: Was there a meeting to discuss concerns? Did you receive a warning regarding your behaviour or performance? Were you given the opportunity to explain or a chance to improve?

Seek advice: Talk to an advocate on the circumstances of your dismissal and whether you have a case for unfair dismissal.  

Consider filing a Personal Grievance: You must do this within 90 days of termination. 

Understanding whether your termination is lawful or not is key to protecting your rights.  Unfair dismissal can impact your future job prospects, your emotional well‑being and your financial security. If you feel you’ve been treated unfairly get in touch with an expert.  Contact Mathews Walker for a free consultation. mathewswalker.co.nz | 0800 612 355

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