Can my employer make me redundant? Your rights in a New Zealand restructure in 2026

Last updated 17 May 2026. This is general information, not legal advice.

Redundancy in New Zealand is one of the most misunderstood areas of employment law. People hear the word and assume their job has already gone, that they have no say, and that the cheque on the way is set in stone. None of that is right. Redundancy is a process, not an event. The employer has to genuinely justify it, has to follow specific steps, and has to consider alternatives before your role disappears. If they get the substance or the process wrong, the redundancy is unlawful and you can challenge it.

The law also changed significantly on 21 February 2026 with the Employment Relations Amendment Act 2026. Some of what is published online is now out of date. This guide reflects the current law as at May 2026 and covers the questions people actually ask when a restructure is hanging over them. Can my employer just make me redundant? What does “genuine” mean? What do I get paid? What if I think the process was a sham? How long do I have to fight it? It is general information, not legal advice, but every claim in it ties back to the Employment Relations Act 2000 and recent Employment Relations Authority and Employment Court decisions.

What redundancy actually means in New Zealand law

A redundancy is when an employer decides that a position is no longer required for genuine business reasons. The key word is position. Redundancy is about the role going, not about the person doing it. This distinction matters because it is the most common ground for a successful unjustified dismissal claim.

If your employer makes your role redundant and then hires someone else to do essentially the same work, that is not a redundancy. It is a dismissal dressed up as one. The same applies if the new role created in your place is more than 80 per cent similar to your old one. Recent Employment Relations Authority decisions have repeatedly struck down “redundancies” where the new role was substantially the same as the old one with a different title.

There are two requirements that have to be met for a redundancy to be lawful. The Employment Court calls them substantive justification and procedural fairness, and the Court has been clear that an employer needs both. A genuine business reason without a fair process is not enough. A fair process without a genuine business reason is not enough.

Substantive justification, what counts as a genuine business reason

The Court of Appeal has held that the right to restructure is part of management’s right to manage. But that right is conditional. The reason has to be genuine, and the employer has to be able to prove it.

The kinds of reasons that have been accepted in recent cases include:

• Financial pressure or sustained losses
• Loss of a major contract or significant revenue
• Restructuring to consolidate roles after a merger or acquisition
• Technological change that automates a function
• Outsourcing a function to a third party
• A genuine shift in strategy that requires a different mix of roles
• Closure of a business unit, branch or division

The reason does not have to be financial distress. The Court has accepted that a profitable business can restructure to pursue efficiency or strategic advantage. But the reason has to actually exist. The employer has to be able to produce the business case, the financial data, the strategy documents, the market analysis. “We’re restructuring” is not enough. “We are reducing the digital marketing team from six roles to three because the marketing budget has been cut by 40 per cent and we are redirecting resource into the new product launch” is a starting point.

What the Employment Court will not accept:

• Using redundancy to remove an underperforming employee. Performance is a different process with different protections.
• Using redundancy to remove someone the manager dislikes. Mixed motive cases have been struck down repeatedly.
• Using redundancy to avoid a personal grievance claim already on foot.
• Using redundancy to remove someone on parental leave (the role can be made redundant if genuine, but the leave cannot be a factor).
• Trivial changes to a role’s duties dressed up as a “new” role.

In the leading case of James v La Famia No 2 Limited, the Employment Relations Authority found that although the employer had asserted commercial reasons for the restructure, the dominant motive was a problem with the individual employee. That made the dismissal unjustified despite the surface-level business case.

Procedural fairness, the consultation that must happen

Even when the business reason is rock solid, a redundancy can still be unlawful if the process was unfair. Process is where most successful challenges win.

A fair process has these elements.

The proposal must be just that, a proposal, not a decision. If your employer presents the restructure as a done deal, the process is already in trouble. The Court has held repeatedly that consultation must happen before the decision is made, with a genuinely open mind on the employer’s side.

The proposal must be in writing and you must get all the relevant information. This includes the business case, the proposed new structure, the rationale for which roles are affected, the costs and benefits, the timeline, and the selection criteria if multiple people are competing for fewer roles. If your employer hands you a one-page letter that says your job is gone, you have not been properly consulted.

You must be given a reasonable opportunity to comment. This means time to read and respond, time to ask questions, time to get advice. The Authority has struck down processes where the consultation window was three days or less. A week is a reasonable minimum, and longer for complex changes.

Your feedback must be genuinely considered. The employer must show they read your submission and weighed it. A response that simply restates the original proposal is not consideration. If you suggest alternatives such as reduced hours, redeployment to another team, or a different structure, the employer must engage with those alternatives in writing.

You have the right to bring a support person. This can be a friend, family member, union representative or employment advocate. If your employer does not advise you of this right, the process is in trouble from the start.

The employer must consider redeployment. If there is a suitable role elsewhere in the business that you can do, or could do with reasonable training, the employer must offer it. In Haddad v New Zealand Steel Ltd, the Employment Court made clear that the duty to redeploy is proactive, not reactive. Employers cannot wait for you to ask. They must actively look.

The selection criteria must be objective and applied fairly. Where multiple people are being assessed for a smaller number of remaining roles, the criteria have to be based on skills, experience and qualifications relevant to the new role. Criteria based on age, gender, ethnicity, union membership, parental leave, or anything else listed in the Human Rights Act 1993 are unlawful.

If any of those elements is missing or done badly, the redundancy is procedurally unfair, and you can raise a personal grievance even if the underlying business reason was genuine.

How much notice do I have to be given

This is one of the most common questions, and the answer is in your employment agreement, not the legislation.

There is no statutory minimum notice period for redundancy in New Zealand. Your notice period is whatever your individual employment agreement (or applicable collective agreement) specifies. Common periods are two, four, six or eight weeks, with longer periods for senior roles.

If your employment agreement is silent on notice, the law requires “reasonable notice.” What is reasonable depends on:

• Your length of service
• Your seniority and pay
• Industry norms for your type of role
• How long it might take you to find comparable work
• Any compensation being paid in connection with the redundancy

For most roles, reasonable notice falls in the two-to-four week range. For senior or specialised roles, it can be three months or longer. If your employer offers less than what is reasonable in the circumstances, you can raise that as a separate issue.

Your employer can pay your notice in lieu, meaning you finish work immediately but receive your salary for the period. This is common when the role no longer exists or there is no work to do. Payment in lieu must be agreed to or specified in the contract.

During the notice period, you are entitled to take reasonable time off to attend job interviews. Your employer cannot refuse this.

How much do I get paid, the truth about redundancy compensation

This is the part that shocks most New Zealanders when they first find themselves facing redundancy. There is no statutory redundancy pay in New Zealand.

Unlike Australia (which provides 4 to 16 weeks pay on a sliding scale by length of service) or the United Kingdom (which has a statutory formula), New Zealand has no automatic redundancy compensation. If your employment agreement is silent on redundancy pay, your employer is not legally required to pay you anything beyond your notice period and accrued entitlements, no matter how long you have worked there.

Whether you get a redundancy payment depends entirely on:

• Whether your individual employment agreement has a redundancy clause
• Whether your collective agreement (if you are union) has one
• Whether there is a workplace policy that creates an established practice of paying redundancy
• Whether you can negotiate one as part of an exit settlement

The first thing to do when redundancy is proposed is read your employment agreement carefully. Look for a clause headed “Redundancy”, “Restructuring” or “Compensation on Termination”. Common formulas include four weeks pay for the first year of service plus two weeks for each subsequent year, or a flat number of weeks. Some agreements cap the total. Some provide for an ex-gratia payment at the employer’s discretion.

If your contract is silent, you can still negotiate. Many employers will offer an ex-gratia payment as part of a settlement, particularly if there is any risk that the process could be challenged. The standard ranges for negotiated payments in the New Zealand market are two to four weeks per year of service, but this is highly variable and depends on the leverage you have.

What you are always entitled to, regardless of whether redundancy compensation applies:

• All wages owed up to and including your last day of work
• Payment for all accrued but untaken annual leave
• An additional 8 per cent holiday pay on any pro-rata leave you have accrued in the current year
• Payment in lieu of notice if you are not required to work the notice period
• Any other contractual entitlements such as earned bonuses or commissions
• Any other benefits like a phone or vehicle until the end of the notice period

Your final pay must be paid on your last day unless you have agreed otherwise.

My employer just told me I am being made redundant, what do I do first

The single most important thing is to slow down. Do not sign anything in the meeting where the news is delivered. Do not agree to a leaving date. Do not accept or reject a proposed payment on the spot.

Specifically:

Get everything in writing. Ask for the formal proposal document, the business case, the proposed new structure, and the selection criteria (if applicable) before you respond to anything.

Take notes during every meeting. Date them. Write down who said what. If you can, ask for the meeting to be summarised in writing afterwards. The Authority will weigh contemporaneous notes heavily if a dispute arises later.

Bring a support person to every meeting. This is your statutory right. If your employer pushes back, that itself is a procedural breach.

Do not sign a settlement agreement until you have had legal advice. Settlement agreements are usually offered in exchange for waiving your right to bring a personal grievance. You will only have one chance to negotiate the terms.

Read your employment agreement. Look for the clauses on consultation, notice, redundancy compensation, and dispute resolution. Print the relevant sections.

Start a document trail. Save every email, every letter, every meeting invite, every version of the org chart, every proposal document. Build a folder. Note the dates. The Authority and the Employment Court make decisions on documents.

Get legal advice early. Community Law Centres provide free initial advice. Employment law firms often offer a free 15 to 30 minute consultation. Many advocates work on a no-win, no-fee basis.

The reason all of this matters is that the law puts the onus on the employer to follow a fair process, but the onus is on you to challenge it within strict time limits. Lose those time limits and the strongest grounds in the world will not save you.

How to push back, the right way

The most powerful pushback happens during the consultation, not after the decision. Once a final decision has been made, you are on the back foot. Your aim while the proposal is still on the table is to identify weaknesses in the business case and the process, and to put the employer on notice that you are watching both carefully.

A good written response to a redundancy proposal does several things:

It asks for the underlying business case in detail. “Please provide the financial data, customer or market analysis, or operational rationale that supports the proposal.” Employers who have done a real business case can usually produce one. Employers who have not, struggle.

It tests the genuineness. “Please clarify whether any of the duties of my role will continue to be performed by other staff, by contractors, or by a newly created role. If so, by whom, and how does that change reflect a reduction in the work to be done.”

It proposes alternatives. “Have you considered reducing hours, job sharing, redeployment to [specific team], retraining for [specific role], or a temporary reduction in workforce instead of redundancy?” The Authority looks closely at whether alternatives were properly considered.

It tests the selection criteria. “Please confirm the criteria being used to select between staff for the remaining roles, the weighting applied to each, and how my skills and experience were scored against them.”

It asks about redeployment. “Please provide a list of current vacancies within the business and confirm whether I will be considered for any of them. The duty to redeploy is proactive.”

It records the timeline. “I note that I was given the proposal on [date] and asked to respond by [date]. I require an extension to [date] to consult with my advisor and prepare a proper response.”

Send your response by email so the date is fixed. Keep a copy. The Authority places significant weight on the quality of the written exchange during consultation, and a well-drafted response often shifts the balance of the negotiation that follows.

When can I raise a personal grievance

If the redundancy goes ahead and you believe it was unjustified, you can raise a personal grievance for unjustified dismissal under section 103 of the Employment Relations Act.

The time limit is critical. You must raise the grievance with your employer within 90 days of the dismissal taking effect, or 90 days of when the issue came to your notice, whichever is later. If you miss the 90-day window, your only options are to get the employer’s consent (rare) or apply to the Employment Relations Authority for leave to raise out of time, which is only granted in exceptional circumstances. Examples of exceptional circumstances accepted by the Authority include:

• A representative failed to file in time
• You were unable to raise it due to health issues caused by the dismissal
• Your employment agreement did not explain the dispute process
• The employer failed to give a reason for the dismissal when asked

Once you have raised the grievance with your employer, you have three years to file a claim with the Authority.

A personal grievance is raised by writing to the employer. There is no special form. The letter should:

• Identify itself as a personal grievance under the Employment Relations Act
• State the nature of the grievance (unjustified dismissal by way of redundancy)
• Briefly set out the facts
• State the outcome you are seeking (reinstatement, compensation, or both)
• Be dated

Send it by email and post to be safe. Keep proof of sending.

What happens after I raise a grievance

The usual sequence is:

Direct discussion. Your employer responds. There may be a chance to resolve the matter directly, sometimes with a revised settlement offer.

Mediation. Free mediation is available through the Employment Mediation Service. Most personal grievances are resolved at mediation. The mediator is neutral, the process is confidential, and the agreement reached is binding once signed under section 149.

The Employment Relations Authority. If mediation does not resolve it, either party can file at the Authority. The filing fee is small. Hearings are usually within a few months. The Authority is an investigative tribunal, not a court. It can order reinstatement, lost wages, compensation for hurt and humiliation, and contributions to costs.

The Employment Court. Either party can appeal an Authority determination to the Employment Court on a full rehearing basis. This is rare for most cases because the cost rises sharply.

What can I actually win

Remedies for an unjustified dismissal claim under section 123 of the Act include:

Reinstatement to your former position or a no-less-favourable role. Reinstatement is technically the primary remedy in the Act, but in practice it is rarely ordered because the relationship has usually broken down by the time the case is heard.

Lost wages, typically covering three to six months. The Authority can extend longer if the circumstances justify it.

Compensation for hurt and humiliation under section 123(1)(c)(i). The Authority operates compensation bands:

• Band 1 ($0 to $12,000) for low-level loss or damage
• Band 2 ($12,000 to $50,000) for mid-range loss or damage
• Band 3 ($50,000+) for high-level loss or damage

Most cases settle in Band 2. Recent Authority awards for unjustified dismissal by way of redundancy have ranged from $8,000 in cases with significant employee contribution to over $25,000 in cases involving serious procedural failures and significant impact on the employee.

Reimbursement of legal costs, typically a contribution rather than full costs. A daily tariff applies and the Authority can award around $4,500 for a one-day hearing.

The 2026 changes you need to know about

Three changes came into force on 21 February 2026 that affect how redundancy challenges work.

Procedural defects no longer automatically invalidate a dismissal. Under the new section 103A(5), a dismissal will not be found unjustified solely because of process defects if those defects did not actually result in the employee being treated unfairly. The previous law required defects to be “minor” to be excused. The word “minor” has been removed. This is a significant change. Process matters, but the focus has shifted to actual unfairness in outcome, not technical failures alone.

Employee contribution can now strip remedies entirely. Under the new section 123B, if your conduct contributed to the situation that gave rise to the grievance, and that conduct amounted to serious misconduct, you can be awarded no remedy at all. Under the new section 123C, even if your conduct fell short of serious misconduct but contributed to the situation, you can lose reinstatement and hurt-and-humiliation compensation, and remaining remedies can be reduced by up to 100 per cent.

This change matters less in redundancy cases than in misconduct cases, because the whole point of a redundancy is that it is not about the employee’s conduct. But it can become relevant where, for example, the employee allegedly contributed to a breakdown in the consultation process by being uncooperative.

Employees earning $200,000 or more cannot bring an unjustified dismissal grievance. Under the new section 103AA, if your total remuneration (including bonuses, commissions and share-based payments) is at or above the $200,000 threshold at the time of dismissal, you lose the right to claim unjustified dismissal. You can still claim for unjustified disadvantage, discrimination, harassment or duress. Existing employees above this threshold on 21 February 2026 have a 12-month transitional period until 21 February 2027 before the rule applies to them, and they can opt back in by written agreement with their employer.

If your remuneration is close to but under the $200,000 line, the formula matters. Total remuneration is calculated from the 364 days before the dismissal pay period, divided by days held, multiplied by 364. Bonuses and equity count.

I am on a 90-day trial, what are my rights

The 90-day trial period is a separate creature. If your employment agreement contained a valid 90-day trial clause and you were dismissed within the first 90 days, you cannot raise a personal grievance for unjustified dismissal.

You can still raise a grievance for unjustified disadvantage (treatment short of dismissal), discrimination, harassment, or other non-dismissal grounds. The 90-day trial only blocks unjustified dismissal claims.

A 90-day trial clause must be valid on its face. Common reasons trial clauses fail:

• The clause was not in the written employment agreement signed before you started work
• The clause did not comply with the legislative wording
• You had previously been employed by the same employer
• You started work before the agreement was signed

If any of those is true, the trial period is invalid and you have full grievance rights.

I am being made redundant while on parental leave

The law protects the person, not the role. You can be made redundant while on parental leave if the redundancy is genuine, but the employer faces a heavier burden of proving that.

The Authority looks closely at whether the leave was a factor in the decision. If the timing or the selection process suggests it was, the dismissal will be found unjustified. The employer must consult you in the same way they would consult any other affected employee, and must provide all the same information.

If you suspect your parental leave is the real reason, raise it explicitly in your written response to the proposal. It strengthens your hand at mediation and at the Authority.

What about contractors

The line between employee and contractor matters here because only employees can bring personal grievances. Genuine contractors cannot.

From 21 February 2026, the Employment Relations Amendment Act introduced a five-part gateway test for contractors under section 6(7). If all five criteria are met, the worker is a “specified contractor” and cannot challenge their status:

• There is a written agreement specifying the worker is an independent contractor
• The worker is not restricted from working for others while not performing work for the contracting party
• The worker has flexibility on hours, or the ability to subcontract
• The agreement is not terminated for declining additional work
• The worker had a reasonable opportunity to seek independent advice before entering the arrangement

If any of those is not met, the traditional “real nature of the relationship” test applies. Many workers labelled “contractors” by their employer turn out, on that test, to be employees with full grievance rights. The 2025 Supreme Court decision in the Uber case confirmed that the substance of the working relationship trumps the label.

If you have been called a contractor but worked under conditions that look more like employment (fixed hours, exclusive engagement, integration into the business, no real independence), you may have employee rights despite the contract label.

Free help when you need it

Redundancy is stressful and isolating. You do not have to handle it alone. Free advice is available from:

• Employment New Zealand on 0800 20 90 20 for general information
• The Employment Mediation Service for free mediation between you and your employer
• Community Law Centres for free initial legal advice
• The Citizens Advice Bureau for general guidance
• Your union if you are a member
• The New Zealand Council of Trade Unions for information about which union covers your industry
• Work and Income for financial support during the transition. Register as soon as the redundancy is confirmed

If you are paying for advice, employment advocates often charge less than lawyers and many work on a no-win, no-fee basis. Lawyers are typically needed for higher-stakes cases, settlement negotiations involving substantial sums, or appeals to the Employment Court.

The takeaway

Your employer can make you redundant, but only if the role is genuinely no longer needed for a real business reason, and only if they follow a proper process. Both elements are required. If either is missing, the redundancy is unlawful and you can challenge it.

The single most powerful thing you can do is engage seriously with the consultation while it is happening. Ask the hard questions in writing. Propose alternatives. Test the selection criteria. Make the employer prove its case before the decision is made. Most redundancies that get challenged successfully were challenged at the consultation stage first.

If the decision goes against you, you have 90 days to raise a personal grievance. Miss that window and the strongest case in the world will struggle. Within that window, even a moderate-strength case usually settles at mediation for several months of pay plus a few thousand dollars in compensation for hurt and humiliation, plus a clean reference and an agreed exit narrative.

Two final pieces of practical advice. First, do not sign a settlement agreement under pressure in the meeting where the redundancy is announced. Take it home. Get it reviewed. Negotiate. Once signed, you cannot reopen it. Second, in 2026, the law has shifted somewhat in favour of employers. The procedural defect rules are looser. The contribution rules are tighter. The $200,000 threshold removes some employees from the grievance system entirely. None of this changes the underlying duty of good faith, but it does mean that getting the right advice early matters more than it used to.

Frequently asked questions

Is there a statutory redundancy pay in New Zealand

No. Unlike Australia or the United Kingdom, New Zealand has no statutory redundancy pay. Whether you receive a redundancy payment depends entirely on your individual employment agreement, any applicable collective agreement, or an established workplace practice. If your contract is silent, your employer is not legally required to pay you anything beyond your notice period and accrued entitlements, no matter how long you have worked there.

How much notice does my employer have to give me for redundancy in New Zealand

The notice period is whatever your employment agreement specifies. There is no statutory minimum. If the agreement is silent the law requires “reasonable notice,” which for most roles falls in the two-to-four week range. Senior or specialised roles can require three months or longer.

Can my employer make me redundant without warning

No. Even though New Zealand has no statutory redundancy pay, a fair process is non-negotiable. The proposal must be presented as a proposal (not a decision), you must be given all relevant information including the business case, you must have a reasonable opportunity to comment, and you have the right to bring a support person. Skipping these steps makes the redundancy procedurally unfair and grounds for a personal grievance.

Can I be made redundant during a 90-day trial in New Zealand

A redundancy during a 90-day trial is treated like any other dismissal during the trial period. If the trial clause is valid, you cannot raise a personal grievance for unjustified dismissal. You can still claim for discrimination, harassment, or unjustified disadvantage. If the trial clause is invalid for any of the common reasons (not signed before you started work, not in the agreed wording, prior employment with the same employer), you have full grievance rights.

Can I be made redundant while on parental leave in New Zealand

Yes, but the employer faces a heavier burden of proving the redundancy is genuine. The Employment Relations Authority looks closely at whether the leave was a factor in the decision. The employer must consult you in the same way as any other affected employee and provide the same information. If you suspect the leave was the real reason, raise that explicitly in your written response.

How long do I have to challenge a redundancy in New Zealand

Ninety days from the dismissal taking effect to raise a personal grievance with your employer in writing. Miss that window and your options narrow to employer consent (rare) or special leave from the Authority (only granted in exceptional circumstances). Once the grievance is raised, you have three years to file a claim with the Employment Relations Authority.

What is consultation in a New Zealand redundancy process

Consultation is the legal requirement that the employer share the proposal with you while it is still a proposal (not a decision), give you all the relevant information including the business case and selection criteria, allow reasonable time for you to respond, genuinely consider your feedback, and consider redeployment. It must happen before the final decision. A “consultation” that is really just notification of a decision already made is grounds for a successful grievance.

What is redeployment and is my employer required to consider it

Redeployment is the offer of another suitable role in the business to a redundant employee. The Employment Court has held the duty to redeploy is proactive, not reactive. Your employer must actively look for suitable vacancies, including roles you could fill with reasonable retraining, and offer them to you. Failure to do so is procedural unfairness.

Can my employer use redundancy to remove a poor performer

No. Redundancy is about the role being no longer required for genuine business reasons. Performance is a separate process with its own protections. If the Employment Relations Authority finds the dominant motive was a performance or relationship problem with the individual, the redundancy will be found unjustified even when there is a surface-level business case.

What do I get if my redundancy claim succeeds at the Employment Relations Authority

The Authority can order reinstatement (rare in practice), lost wages (typically three to six months), compensation for hurt and humiliation (most awards fall in Band 2, $12,000 to $50,000), and a contribution to your legal costs. Most cases settle at free mediation before reaching the Authority, usually for several months of pay plus a hurt-and-humiliation payment.

Can I be made redundant if my employer hires someone else to do my job

Generally no. Redundancy is about the role going. If your employer makes your role redundant and then hires someone else to do essentially the same work, or creates a new role more than 80 per cent similar to yours, the Authority is likely to find the redundancy was unjustified. It is a dismissal dressed up as a redundancy.

What changed in New Zealand redundancy law in February 2026

The Employment Relations Amendment Act 2026 came into force on 21 February 2026. Three changes matter most. First, procedural defects no longer automatically invalidate a dismissal if they did not result in actual unfairness. Second, employee contribution to a grievance can now strip remedies up to 100 per cent. Third, employees with total remuneration of $200,000 or more lose the right to claim unjustified dismissal (existing high earners have a 12-month transitional period).

Have you successfully challenged a redundancy in New Zealand, or negotiated a much better exit than was first offered? Tell us how in the comments below.