Facing Redundancy in New Zealand? Know Your Rights Before You Sign Anything
Ron Mckenzie | July 29, 2026
Being told your role is “proposed for disestablishment” is unsettling. Many employees assume that once the word redundancy is used, the outcome is inevitable and there is nothing they can do. That is not the law in New Zealand. A redundancy is only lawful if it is both genuine and carried out through a fair process, and the Employment Relations Act 2000 places clear obligations on your employer at every step.
This article explains what the law requires, how the process should run, what your rights are, and what to do if something does not feel right.
The legal framework: the Employment Relations Act 2000
Two provisions of the Employment Relations Act 2000 (the Act) do most of the work in redundancy cases.
Section 103A: the test of justification
If you raise a personal grievance for unjustified dismissal, the Employment Relations Authority asks whether the employer’s actions, and how the employer acted, were what a fair and reasonable employer could have done in all the circumstances at the time. Under section 103A(3), the Authority must consider, among other things, whether the employer sufficiently investigated the matter, raised its concerns with you, gave you a genuine opportunity to respond, and genuinely considered your explanation before deciding. A redundancy is a dismissal, so it must pass this test on both substance (was the redundancy genuine?) and process (was it carried out fairly?).
Section 4: the duty of good faith
Section 4 requires the parties to an employment relationship to deal with each other in good faith, and to be active and constructive in maintaining a productive relationship. Critically for redundancy, section 4(1A)(c) provides that where an employer is proposing a decision that will, or is likely to, have an adverse effect on the continuation of your employment, the employer must give you access to the relevant information about the decision and a real opportunity to comment on that information before the decision is made.
In plain terms: your employer cannot make the decision first and consult second. If it does, the redundancy is open to challenge as predetermined.
Sections 103 and 114: personal grievances and the 90-day rule
Section 103 gives you the right to raise a personal grievance for unjustified dismissal or unjustified disadvantage. Under section 114, you generally have 90 days from the date the dismissal or action occurred, or came to your notice, to raise the grievance with your employer. This deadline matters. If you are unsure whether your redundancy was handled properly, get advice well inside that window.
Sections 103 and 114: personal grievances and the 90-day rule
Section 103 gives you the right to raise a personal grievance for unjustified dismissal or unjustified disadvantage. Under section 114, you generally have 90 days from the date the dismissal or action occurred, or came to your notice, to raise the grievance with your employer. This deadline matters. If you are unsure whether your redundancy was handled properly, get advice well inside that window.
Important exception for high-income employees
Since 21 February 2026, employees whose annual remuneration meets or exceeds the statutory threshold, currently $200,000, are generally unable to bring an unjustified dismissal grievance in relation to their dismissal. Other legal claims may remain available, and the precise calculation of annual remuneration should be checked carefully. If your remuneration is near or above this level, take advice on how the threshold applies to you.
What a lawful redundancy requires
From the cases we run, a redundancy stands or falls on a small number of requirements. A fair and reasonable employer must show:
- A genuine business reason. The role must be truly surplus to requirements for genuine commercial, structural, or financial reasons. If the work has not actually gone, or a “new” role is essentially your old role with a different title, the redundancy is not genuine.
- Meaningful consultation. You must receive a written proposal with enough detail to understand and respond to it, including the rationale, the supporting information, and any selection criteria. Consultation must happen while the proposal is still genuinely a proposal, with an open mind and no predetermined outcome.
- Fair selection criteria. If some roles are retained and others are not, the selection pool must be properly defined and the criteria must be clearly explained, objectively applied, and documented. You cannot meaningfully respond to criteria you have to decode, and an employer that keeps no record of how it scored candidates will struggle to justify its decision.
- Genuine consideration of redeployment and alternatives. Before dismissing you, the employer must genuinely explore alternatives to redundancy, including redeployment into other suitable roles within the business. Failing genuinely to identify and consider suitable redeployment opportunities can be a serious process failure.
- Good faith throughout. Access to the information the decision rests on, honest answers to your questions, and reasonable time to respond. Vague answers, withheld documents, or pressure to respond quickly to a proposal that already reads as a settled decision all point to a breach of good faith.
What the process should look like
A properly run redundancy process usually follows these steps:
- A written proposal is issued, clearly marked as a proposal, setting out the business reasons, the roles affected, any selection criteria, and an invitation to give feedback.
- You are given the relevant information behind the proposal and a reasonable period to consider it, ask questions, and respond, with a support person or representative if you wish.
- The employer genuinely considers your feedback and answers your questions before making any decision.
- Alternatives, including redeployment, are actively explored and discussed with you.
- Only then is a decision made and confirmed in writing, with reasonable notice as required by your employment agreement, and payment of your final entitlements.
Warning signs include a new role being advertised that looks much like yours, decisions that appear to have been made before consultation started, criteria that are never explained, notes or records that are withheld, and a process that shifts shape partway through, for example a disciplinary process that suddenly becomes a restructure. In our experience these patterns often indicate that the redundancy is a vehicle for removing a person rather than a role, sometimes called a sham redundancy, and they can support a personal grievance.
Your rights as an employee
- The right to be consulted before any decision is made, with access to the information relevant to the proposal (section 4(1A)(c)).
- The right to a genuine opportunity to respond, and to have your response genuinely considered (section 103A).
- The right to bring a support person, union representative, or legal adviser to meetings.
- The right to be considered for redeployment and other alternatives to dismissal.
- The right to notice and final pay in accordance with your employment agreement, including any contractual redundancy compensation.
- The right to raise a personal grievance within 90 days if the redundancy was not genuine or the process was unfair (sections 103 and 114).
If a grievance succeeds, available remedies under section 123 may include reimbursement of lost remuneration, compensation for humiliation, loss of dignity and injury to feelings, and in appropriate cases reinstatement.
Following amendments effective from 21 February 2026, remedies can be reduced or unavailable where the employee’s own conduct materially contributed to the situation.
What to do if you have been told your role is at risk
- Do not resign, and do not sign anything, including a settlement or record of agreement, before getting advice.
- Ask for the proposal and all supporting information in writing, and keep copies of every document, email, and meeting note.
- Ask specific questions: why is the role surplus, what are the selection criteria, what alternatives were considered, what redeployment options exist.
- Respond in writing and ask for the employer’s answers in writing.
- Watch the 90-day clock, and get advice early rather than late.
Talk to us before you sign anything: your first consultation is free
FAQs
My employer said the decision was already made when they “consulted” me — is that legal?
No. Consultation must take place before the decision is finalised, with a genuinely open mind. An employer who has already decided the outcome before consulting has not met the legal standard. This is one of the most common procedural failures in NZ redundancy processes — and one of the strongest bases for a personal grievance.
My role was made redundant, but someone else is now doing very similar work — what does that mean?
It is a strong indicator of a sham redundancy. If the substance of your role has effectively been redistributed or a near-identical position has been created or filled shortly after your disestablishment, the redundancy may not have been genuine. Seek legal advice and document everything you know about what happened to your duties.
Am I entitled to a redundancy payout?
Only if your employment agreement provides for one, or you successfully negotiate one. There is no statutory minimum in New Zealand. However, if the redundancy process was flawed, you may be entitled to remedies through a personal grievance — including compensation for hurt and humiliation and lost remuneration — which can exceed any contractual payout.
My employer gave me 48 hours to respond to the restructuring proposal — is that enough time?
It depends on the complexity of the proposal, but 48 hours is generally very short for a significant restructure affecting your employment. Best practice under NZ law is to provide adequate time to seek independent advice, prepare a response, and genuinely engage. A tight deadline that prevents meaningful consultation is a procedural flaw that can undermine the entire process.
Can I challenge a redundancy if I’ve already signed my exit documents?
If the documents were signed and countersigned by an MBIE mediator, the settlement is likely full and final. However, if you signed an agreement directly with your employer without MBIE involvement, the position may be more complex. Either way, seek legal advice immediately — the window to act may still be open depending on the circumstances.
Talk to McKenzie Law before your next move
At McKenzie Law, we represent employees only — and we have seen every variation of a rushed, predetermined, or retaliatory redundancy there is. If you have received a redundancy proposal, if your consultation felt like a formality, or if you believe your role was not genuinely surplus — we want to hear from you.
McKenzie Law is an Auckland-based employment law firm representing employees across New Zealand — including Auckland, Wellington, Christchurch, Hamilton, Tauranga, and all regions. All content is general in nature and does not constitute legal advice. For advice specific to your situation, contact us directly.
