Restructuring and Redundancy in New Zealand – Getting It Right
Ron Mckenzie | September 13, 2025
Restructuring and redundancy are some of the most sensitive areas in New Zealand employment law. Handled correctly, they can help businesses adapt to change while maintaining trust. Handled poorly, they can lead to unjustified dismissal claims, legal costs, and reputational damage. This guide explains key definitions, legal requirements, common mistakes, and best practice steps for a fair, lawful process.
What is Restructuring & Redundancy?
- Restructuring – Changing the way work is done in your business, which may involve reorganising teams, redistributing responsibilities, or changing reporting lines.
- Redundancy – Ending a role because it is no longer required, usually due to business changes such as reduced demand, technological advances, or cost-cutting measures
💡 Note: Redundancy must be about the role, not the person performing it.
Legal Requirements for Restructuring and Redundancy
A lawful process must be:
Genuine
Based on real and demonstrable business needs — not a cover for removing an underperforming employee.
Consultative
Employees must have the opportunity to review proposals, ask questions, and provide feedback before a final decision is made.
Fair
Use transparent selection criteria. Share relevant information. Communicate the process and timelines clearly.
Common Missteps to Avoid
- Treating redundancy as a shortcut for addressing performance issues.
- Announcing final decisions before proper consultation.
- Failing to provide sufficient background or supporting information.
Best Practice Steps
1. Plan Carefully
Define genuine business reasons and prepare supporting documentation.
2. Consult
Present proposals in writing, outlining the rationale, selection criteria, and potential impact.
3. Consider Feedback
Genuinely evaluate employee suggestions or alternative proposals before deciding.
4. Decide and Communicate Clearly
Explain the final decision, including the reasons and evidence considered.
5. Support Staff
Where possible, offer redeployment options, career support, or redundancy pay (if applicable).
Restructuring and redundancy processes should balance business needs with fairness and transparency.
Handled lawfully and respectfully, they can be implemented without unnecessary conflict.
McKenzie Law can help you plan and execute a legally sound restructuring process that minimises risk and protects your team relationships.
📞 Contact us today for expert guidance.
