Redundancy law in New Zealand: what makes redundancy genuine, and the process employers must follow
Financial advice is provided by Craig Smith Business Services Limited, trading as Smiths Insurance & KiwiSaver, a licensed Financial Advice Provider (FSP712931). QuoteHub is a trading name.
Redundancy in New Zealand is only lawful if the employer has a genuine business reason and follows a fair and proper process, including consultation before any final decision is made (Employment New Zealand, retrieved 9 September 2026). Getting the reason right but the process wrong can still make the dismissal legally challengeable as unjustified, under section 103A of the Employment Relations Act 2000 (New Zealand Legislation, retrieved 9 September 2026).
What makes a redundancy genuine?
New Zealand has no fixed checklist for "genuine" in the Act itself; instead, the test asks whether the employer's actions were what a fair and reasonable employer could have done in the circumstances. The table below sets out the core requirements from Employment New Zealand's own guidance.
A redundancy is only genuine if it is a real business reason, not a way to remove a specific person, and the table below sets out what that requires.
| Requirement | What it means |
|---|---|
| Genuine business reason | The position itself is surplus to the business's needs, not a proxy for performance or conduct issues |
| Redundancy is a last resort | The employer must explore redeployment options before deciding on redundancy |
| Fair and proper process | Consultation, genuine consideration of feedback, and a decision made after that feedback, not before it |
| Correct notice | The notice period in the employment agreement, or a reasonable period if none is stated |
(Employment New Zealand: Redundancy, retrieved 9 September 2026.)
What makes a redundancy "genuine" in NZ?
A redundancy is genuine when the position, not the person, has become surplus to the business's actual requirements, for reasons such as restructuring, a downturn, new technology or a merger, rather than being used as a way to remove someone for performance or conduct reasons without going through the proper process for that instead (Employment New Zealand, retrieved 9 September 2026). The employer must also have explored redeployment options first and followed a fair process.
What process must my employer follow before making my role redundant?
Employment New Zealand's guidance sets out a structured process: develop a written change proposal, assess the impact on employees, share the proposal with affected employees and consult them, gather and genuinely consider their feedback, confirm the decision, then implement it including any redeployment (Employment New Zealand: Workplace change process, retrieved 9 September 2026). The table below breaks this into its main stages.
There is no single fixed "number of steps" set out in law, but Employment New Zealand's own guidance describes a consistent sequence, set out in the table below.
| Stage | What the employer does |
|---|---|
| 1. Proposal | Write a clear proposal explaining the changes, reasons, timeline and selection criteria |
| 2. Impact assessment | Work out which employees and roles are affected |
| 3. Consultation | Share the proposal with affected employees and their unions, and invite genuine feedback |
| 4. Feedback period | Give employees reasonable time to respond, seek advice and raise concerns |
| 5. Consider feedback | Genuinely weigh the feedback before finalising anything, and explain what was accepted or rejected |
| 6. Decision | Confirm the final decision and communicate it clearly to affected employees |
| 7. Implementation | Give correct notice, manage any redeployment, and finalise the change |
(Employment New Zealand: Workplace change process, retrieved 9 September 2026.)
What are the 5 stages of redundancy?
There is no official "5 stages" framework in New Zealand employment law; that figure is more commonly associated with UK guidance. Employment New Zealand's own process runs to seven practical stages, from writing the proposal through to implementation, all built around one core requirement: genuine consultation before, not after, the decision is made (Employment New Zealand: Workplace change process, retrieved 9 September 2026).
Do I have to be consulted before being made redundant?
Yes. If your role or duties might be affected by a proposed change, you and your union (if you have one) must be consulted before any final decision is made, not informed of a decision that has already been reached (Employment New Zealand, retrieved 9 September 2026). Consultation means being given the actual proposal, a genuine opportunity to respond, and having that response considered before the employer decides.
How much notice am I entitled to if I'm made redundant?
Whatever notice period is set out in your employment agreement; New Zealand has no statutory minimum notice period that applies specifically to redundancy, though a reasonable period is implied if your agreement is silent (Employment New Zealand, retrieved 9 September 2026). Our notice periods in New Zealand guide covers this in full, separate from any redundancy pay you may also be owed.
Can my employer make me redundant and then hire someone else for the same role?
If they do, it is strong evidence the redundancy was not genuine, since the whole basis of a lawful redundancy is that the position itself, not the person, is no longer needed by the business (Employment New Zealand, retrieved 9 September 2026). An employee in that situation may have grounds to raise a personal grievance for unjustified dismissal under section 103A of the Employment Relations Act 2000.
What is the difference between redundancy and dismissal?
Redundancy ends employment because the position is surplus to the business's needs, through no fault of the employee. Dismissal ends employment for a reason related to the employee, such as misconduct or poor performance, which requires the employer to establish "good reason" through a different, performance or conduct-specific process (Employment New Zealand: Good reason, retrieved 9 September 2026). An employer cannot use redundancy as a shortcut around the higher bar that misconduct or performance dismissals require.
Can I challenge a redundancy as unjustified?
Yes, through a personal grievance, unless you earn $200,000 or more a year. You have 90 days from the end of your employment, or from when the issue arose, to raise a personal grievance for unjustified dismissal with your employer, and the Employment Relations Authority applies section 103A's "fair and reasonable employer" test to decide it (Employment New Zealand: Personal grievances, retrieved 9 September 2026). You then have up to 3 years from first raising the grievance to lodge a claim with the Authority if it is not resolved directly. Since the remuneration threshold introduced by the Employment Relations Amendment Act 2026 took effect, an employee earning $200,000 or more a year does not have this protection at all: their employer does not need a good reason or a fair process to dismiss them, and they cannot raise an unjustified dismissal personal grievance over it (Employment New Zealand: Dismissal rules for high income earners, retrieved 9 September 2026).
What legal test decides whether a redundancy was justified?
Section 103A of the Employment Relations Act 2000 asks whether the employer's actions were what a fair and reasonable employer could have done in all the circumstances at the time, considering whether the employer investigated properly, raised its concerns, gave a genuine opportunity to respond, and genuinely considered the response (New Zealand Legislation, retrieved 9 September 2026). Since 21 February 2026, the Authority or court must also consider whether the employee obstructed the employer from taking one of those steps, and a process defect alone does not make a dismissal unjustified unless it actually treated the employee unfairly.
Does a small process defect automatically make my redundancy unjustified?
No, not on its own, since the 21 February 2026 amendment to section 103A(5). The Authority or court cannot find a dismissal unjustified solely because of a defect in the process the employer followed, unless that defect actually resulted in the employee being treated unfairly (New Zealand Legislation, Employment Relations Act 2000, s103A(5), retrieved 9 September 2026). A serious defect, such as deciding before consulting, is still very likely to count as unfair treatment.
Do I get redundancy pay automatically?
No. Redundancy compensation in New Zealand is only owed if it is stated in your employment agreement; there is no statutory minimum redundancy payment (Employment New Zealand, retrieved 9 September 2026). Our redundancy pay guide covers what you are actually owed and how any payment is taxed.
What must my final pay include if I am made redundant?
Your final pay must include your final salary or wages, payment for all unused annual holidays, and any other entitlements owing under your employment agreement, alongside any redundancy compensation your agreement provides for (Employment New Zealand, retrieved 9 September 2026). This is separate from, and in addition to, your notice period.
Can my employer make me redundant while I'm on parental leave, sick leave or ACC?
Yes, but only if the redundancy itself is genuine and follows the same fair process as any other redundancy; being on leave does not exempt you, but it also does not lower the bar the employer has to clear (Employment New Zealand: Covering parental leave and employees returning to work, retrieved 9 September 2026). Our parental leave guide covers this specific situation in more detail.
What redundancy law does not cover
Redundancy law governs whether the process was fair, not what happens to your finances afterwards. The table below points to where those separate questions are answered.
| What you need | Where it is covered |
|---|---|
| Whether the process was fair and the reason genuine | This page (Employment Relations Act 2000, s103A) |
| How much redundancy pay you're owed | Redundancy pay NZ |
| Your notice period | Notice periods NZ |
| Income support after job loss | Jobseeker Support NZ |
| What to do in the first month | Made redundant: the first 30 days |
| Your mortgage if income drops | Mortgage holiday NZ |
QuoteHub built this page because a genuine, well-run redundancy is still a real income shock, and it is the kind of event that redundancy cover and broader income protection insurance or life insurance are designed to sit under. Financial advice is provided by Craig Smith Business Services Limited, trading as Smiths Insurance & KiwiSaver, a licensed Financial Advice Provider (FSP712931). QuoteHub is a trading name. If you would like a licensed adviser to review your cover, start a free comparison.
What else to check if you've just been told you're being made redundant
If you are currently going through a consultation process, notice periods in New Zealand and redundancy pay in New Zealand are the two pages to read next, since neither depends on whether the redundancy itself was handled fairly. If the decision has already been made, our first 30 days after redundancy guide covers what to do immediately, Jobseeker Support covers income support if you need it, and a mortgage holiday in New Zealand covers what to do if a home loan repayment is now at risk. If your dismissal was for a reason other than genuine redundancy, our companion page on what employers must establish before any dismissal, good reason under the Employment Relations Act, sets out that separate, higher bar. The losing your job hub puts every step in order, and redundancy cover is worth reading once the immediate process is behind you.
Adviser's view
QuoteHub's read is that most redundancy disputes turn on process, not reason: an employer can have a completely genuine business case and still lose an unjustified dismissal claim because they decided first and consulted afterwards, which the law treats as no consultation at all.
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Cite this page QuoteHub NZ (2026). Redundancy Law NZ: Genuine Redundancy and Process. www.quotehub.co.nz/guides/losing-your-job/redundancy-law-and-process-nz. Updated 2026-09-09.
References
- Employment New Zealand: Redundancy
- Employment New Zealand: Workplace change process
- Employment New Zealand: Good reason
- Employment New Zealand: Personal grievances
- New Zealand Legislation: Employment Relations Act 2000, s103A Test of justification
- Employment New Zealand: Covering parental leave and employees returning to work
- Employment New Zealand: Dismissal rules for high income earners
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