Redundancy/Restructure
Being made redundant is an awful way to lose your job, especially when it happens through no fault of your own.
While genuine restructures do happen, employers in NZ must still follow a fair process and have a legitimate business reason for removing your role.
If you've been told your position is at risk or you've already been made redundant, Mathews Walker can help you understand your rights and whether your employer has acted fairly.
Understanding the legal redundancy process in NZ
Not every redundancy is lawful. Before an employer can make someone redundant, they generally need to demonstrate two things:
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There is a genuine business reason for the restructure or redundancy. The role must genuinely no longer be required, rather than redundancy being used to remove a particular employee.
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They have followed a fair consultation and decision-making process. The restructure should be presented as a genuine proposal rather than a predetermined decision. You should have a meaningful opportunity to provide feedback and suggest alternatives, and your employer should genuinely consider your response before making a final decision.
If you have been told that redundancy might be around the corner, call us urgently for a free 10 minute phone consultation. We can arrange an employment advocate to support you in the process and raise a personal grievance if your employer has not acted fairly.
In NZ, you generally have 90 days from the date your redundancy took effect or from when you first became aware of it to raise a personal grievance - so don't delay seeking advice.
Get free redundancy advice now
Seek support from our employment advocates before making any big decisions.
Was your redundancy handled lawfully?
If either the reason for your redundancy or the process followed doesn’t seem right, you may have grounds to challenge it.
Some common signs that a redundancy may not have been handled fairly include:
I don’t think my redundancy was genuine
Redundancy must always center on the position, not the individual. If your employer targeted you over personal friction, performance concerns, or workplace conflicts, they have bypassed proper legal process.
My employer didn’t follow the right consultation process
You may be able to challenge the redundancy if the outcome appeared to be decided before consultation began, you weren’t given enough information or time to respond, or your feedback and proposed alternatives weren’t genuinely considered.
I don't think I was selected fairly
If only some employees are made redundant, employers should use fair and objective selection criteria. If you believe you were unfairly targeted or the process wasn't applied consistently, you may have grounds to challenge the decision.
I wasn’t given adequate notice
Your employer should give you the notice period set out in your employment agreement. If your employment ended immediately (without payment in lieu of notice) or you weren't given the notice you were entitled to, you may have legal options.
My role was replaced
If your role was advertised or given to someone else shortly after your dismissal, it may indicate your redundancy was used as a cover for dismissal, and you could have grounds for a personal grievance.
My employer didn’t consider deployment
Before making you redundant, your employer must consider whether you could be redeployed into another available role within the organisation. If redeployment wasn't explored or was dismissed without proper consideration, this may suggest the redundancy process was unfair.
If this sounds like something you’re going through, call us straight away at 0800 612 355. We can arrange an employment advocate to talk through your options with you.
Our employment advocates can provide the support you need
Mathews Walker is a New Zealand-wide employment advocacy service with considerable experience helping employees through restructures and redundancy disputes. Most of our cases are no win, no fee, which means that we only take a fee if we are successful.
Our employment advocates can help you:
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Understand whether your redundancy is genuine.
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Review whether your employer followed a fair redundancy process.
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Assess whether the consultation and selection process was lawful.
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Advise you on your rights and entitlements.
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Negotiate with your employer on your behalf.
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Raise a personal grievance if your redundancy was unfair.
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Represent you during mediation or Employment Relations Authority proceedings if required.
What our clients have said
Katherine
Thank you sooooo much. You are an amazing [employment advocate]. I couldn’t have asked for someone better. You made a highly stressful situation bearable.
Unlawful Redundancy | Christchurch
N (Name Withheld)
Paul... gave me the confidence to achieve a positive outcome with my previous employer. His knowledge and calm demeanor were outstanding I felt well supported by him during the whole process.
Disciplinary Meeting | Christchurch
Trevor
Matthews Walker were amazing to deal with. Very professional and dedicated from the first person that answered my call to the end.
Threatened Redundancy | Christchurch
Answering your questions about redundancies
What is the legal process for making someone redundant in New Zealand?
If your employer is proposing to disestablish your position, they are legally required to follow a fair consultation process before any final decision is made.
This generally involves the following steps:
1. You’re told about the proposed restructure
Your employer should explain what changes they’re proposing, why they’re being considered and how your role could be affected.
2. You have an opportunity to have your say
Before a decision is made, you must be given a genuine opportunity to provide feedback, ask questions and suggest alternatives. Your employer must genuinely consider your feedback before reaching a final decision. If you attend a consultation meeting, you should also be allowed to bring a representative or support person with you.
3.Your feedback must be considered
Your employer should genuinely consider your feedback and reasonable alternatives, including whether there are opportunities for you to be redeployed into another role.
4. You’re given a final decision
Once consultation is complete, your employer should confirm the outcome. If your role is made redundant, you should receive the decision in writing, including your notice period and final employment date.
5. You receive your final entitlements
Your employment agreement will help determine your notice and whether you’re entitled to redundancy compensation. You’ll also need to receive any final pay and other outstanding entitlements.
Important: Being told your role is proposed for redundancy does not mean the decision should already have been made. Consultation should happen before your employer reaches a final decision.
Do employers have to pay redundancy compensation in New Zealand?
No. There is no statutory redundancy payout or legal requirement for employers to pay redundancy compensation in New Zealand. Whether you're entitled to a redundancy payment depends on the terms of your employment agreement. Even if your agreement doesn't provide for redundancy compensation, your employer must still follow a fair process and have a genuine business reason for making your role redundant.
What is a fair reason for redundancy?
A fair redundancy must be based on a genuine business reason for the proposed restructure and for your position being affected. Redundancy cannot be used as a way to dismiss an employee for performance issues, personality conflicts or other reasons unrelated to the genuine needs of the business.
Does a workplace restructure always lead to redundancy?
No. A restructure doesn't automatically mean you'll lose your job. Depending on the proposed changes, your role may continue, change, or be replaced with another suitable position.
How long do employees have to challenge redundancy in New Zealand?
In most cases, you have 90 days from the date of the redundancy, or from when you became aware of the issue, to raise a personal grievance. Because strict time limits apply, it's important to seek advice as soon as possible if you believe your redundancy was unfair.
What happens if I raise a personal grievance over redundancy?
If your personal grievance is successful, you may be entitled to compensation, reimbursement of lost wages, reinstatement, or another appropriate remedy. Many cases are resolved through negotiation or mediation before reaching the Employment Relations Authority.
At Mathews Walker, our advocates can guide you through the process from start to finish. Learn more about what to expect here.
When should I receive my redundancy payment?
If you are entitled to redundancy compensation in your contract, it is usually paid when your employment ends, together with your final pay or any outstanding contractual entitlements. However, the timing and amount of any redundancy payment will depend on your employment agreement.
What are you entitled to when you are made redundant?
When you're made redundant in New Zealand, you're entitled to a fair redundancy process, the notice period set out in your employment agreement, and any final pay you're owed, including outstanding wages, holiday pay and other contractual entitlements. Whether or not you receive redundancy compensation will depend on your employment agreement.
Real outcomes for New Zealand employees
Our client was employed for approximately 2 years in an internal sales role. Due to declining sales a restructure was proposed. Our client was selected for redundancy based on a criteria of cost. As part of the process, his employer determined that skills and experience were neutral factors in deciding between the three internal sales employees. Our client was selected for redundancy and given 4 weeks notice paid in lieu and 5 weeks pay ex gratia. Our client lodged a Personal grievance for unjustified dismissal. The ERA found that the business reasons for the restructure were reasonable but the selection criteria was not disclosed early enough for consultation and feedback resulting in unjustified dismissal. Our client was awarded lost wages until they found new employment and $16k for humiliation, loss of dignity and injury.
Expert insights
What counts as fair criteria when selected for redundancy?
In New Zealand, an employer can’t just pick and choose who to make redundant. Learn what counts as ‘fair’ criteria.
Before you go…is your redundancy genuine?
Learn the warning signs that may indicate an employer is using redundancy for the wrong reasons.
Facing a restructure? How to protect yourself and your rights
Find out what to expect during a restructure and the steps you can take to protect your position.
Read more