The Redundancy Process NZ
Redundancy is a difficult and often emotional experience. Many employees feel uncertain about their rights, their future, and what to expect next. This guide explains the redundancy process in NZ and outlines what should happen when a role is at risk.
Understanding your rights and knowing what support is available can help you feel more prepared and supported during a challenging time.
Step 1: Recognising a Possible Redundancy
Changes in the workplace, such as restructuring, cost-cutting, or operational shifts, can result in roles being reviewed. A fair employer will share information openly and keep staff informed about any potential changes. The process requires good faith communication.
Clear reasons must be provided for any proposed change, and employees should be treated with honesty and respect.
Step 2: The Consultation Process
Before finalising any redundancy decision, employers must follow a proper consultation process. This includes outlining the proposal in detail, explaining why changes are needed, and sharing any supporting information.
Employees should be given a chance to ask questions, provide feedback, and respond in a meaningful way. This process is not just a formality. Proper consultation allows concerns to be raised, alternatives to be explored, and decisions to be made fairly.
Support people or representatives can attend meetings, and employees are entitled to time to seek independent advice.
Step 3: Exploring Redeployment
Every possible alternative must be considered before redundancy is confirmed. Employers are expected to explore redeployment options seriously and in good faith. This includes reviewing current vacancies, temporary projects, and adjusted roles within the organisation.
Failing to offer a comparable role to a suitable employee may raise concerns about the fairness of the process. Employers must keep records showing the steps taken to find alternative solutions.
Step 4: Notice of Redundancy
Once a final decision has been made, formal notice must be provided. The required notice period will depend on the employment agreement. Some agreements include a set period of notice, while others may require what is considered “reasonable” under the circumstances.
Pay in lieu of notice may be offered if both parties agree. Continuing in the role for the full notice period is also common and may allow time for further job searching or training.
Step 5: Final Pay and Compensation
Final pay must include all outstanding entitlements. These typically cover unpaid wages, unused annual leave, and any other agreed payments.
Redundancy compensation is only provided when it is included in the employment agreement or has been negotiated separately. No legal requirement exists to provide a redundancy payout unless previously agreed.
Step 6: Additional Support
Some employers provide extra support to employees who are leaving due to redundancy. This may include job-seeking assistance, counselling, training, or help with CV writing and interview preparation.
Support options can vary between workplaces. Checking what help is available through internal policies or conversations with your manager may be worthwhile.
Moving Forward with Confidence
A fair and lawful redundancy process in NZ must follow clear steps. Employers must act in good faith, provide notice, and ensure that all alternatives have been considered. Employees are entitled to open communication, time to respond, and respectful treatment throughout.
Legal advice or employment advocacy may help if there are concerns about how the process has been handled. Raising a personal grievance could also be an option when redundancy does not appear genuine or fair.
Support is available, and you are not expected to navigate this process alone. Understanding your rights and knowing what to expect can make a challenging time feel more manageable. My Advocate are here to help, contact us today.