Redundancy / Restructure & Compensation

If you receive a restructure proposal or meeting invitation and you think there wasn’t a fair and reasonable process followed, please contact us as soon as possible. We will ensure that your rights are being met.

Times of organisational change can be stressful for employees, especially if they are poorly managed or communicated.

Redundancy is an awful way to lose your job, as it has happened through no fault of your own.

But that is not always the case, sometimes employers use redundancy as a way to get rid of an employee who they no longer want for various other non genuine reasons.

An employer may need to restructure or make someone redundant to survive financially. But there must still be a fair process with reasonable steps in place.

If your employer is facing hardship, they must first enter a consultation process to inform you of the possibilities of being laid off and give you an opportunity to provide feedback.

You have the right to counter their proposal with your own, such as taking a pay cut, unpaid leave or changing your role to include extra work and responsibilities.

If your employer states that their business is struggling, but you are the only one facing redundancy, there is a good chance it may not be genuine.

Employers cannot employ a new person to fill the same position you were shortly after making you redundant. However, they can combine two jobs. 

Redundancy must be a decision about a position, not targeting an individual. 

Employers cannot use redundancy as a way to get rid of an employee who they feel is underperforming or isn’t fitting in.

Minor alterations to a job’s role and responsibilities or getting rid of someone unliked are not valid reasons for redundancy.

It is a genuine redundancy if a person’s employment has ended because the employer has decided, for a “genuie reason” that the employee’s position is no longer required. For example, if the employer is making changes to enable the business to operate more efficiently and cost-effectively; closing down or selling the business.

Check Your Employment Agreement

What does it say about redundancy in your employment contract? You should always make sure that you are familiar with the terms of your employment agreement.

It usually contains specific provisions regarding the redundancy process and your entitlements.

Redundancy Compensation

Under New Zealand law, it is not compulsory for an employer to pay compensation for redundancy.

Check your Employment Agreement. If compensation is mentioned, it will likely also tell you the amount you will receive. If an amount is not mentioned, it could be up for negotiation.

Notice of Redundancy

If there is no specific clause in your employment agreement stating the period of notice required in the case of redundancy, a reasonable period must be given.

The length of reasonable notice depends on various factors, such as:

  • Reasons for the redundancy

  • Employees length of service

  • Employees qualifications/seniority and remuneration

  • Practices, customs and industry norms

  • Ability of the employee to find alternative employment

  • Compensation (if specified in the employment agreement)

A reasonable notice period is usually one to four weeks.

If you have been made redundant and the position you held still exists or you believe that the reasoning is unfair, contact us for advice.  


If employers are reducing the number of staff performing the same role and you’re not the lowest performer then you should also get in touch with us, as your dismissal may be unjustified.