The Employment Court upheld a determination of the Employment Relations Authority that an employer pay its former employee substantial compensation for hurt and humiliation in remedy of the redundancy having been found unjustifiable.
Redundancy is defined at common law as a situation where an employee's position becomes surplus to the needs of the employer. A redundancy is treated by the Courts as a dismissal, therefore it must be genuine and carried out in a procedurally fair way.
Redundancy is a form of dismissal where the employer says your position is no longer needed. Even if the business decision is genuine, the employer must follow a fair process and the outcome must be one a fair and reasonable employer could have reached (section 103A - test of justification).
A "genuine redundancy" is not about whether you are a good employee - it is about whether the employer genuinely no longer needs the job to be done in the same way. If redundancy is used as a pretext to remove a person, it can be an unjustified dismissal.
There is no automatic statutory redundancy compensation. Entitlement usually depends on your employment agreement (or sometimes a workplace policy or established practice).
If you are facing redundancy (or have already been made redundant), we can assess whether the redundancy was genuine and whether the employer followed a fair process under
section 103A, and if not, raise a Personal Grievance (PG) and pursue appropriate remedies.
Check My Case
A redundancy can fail in more than one way. The employer may not have a genuine business reason for removing the position, or the underlying restructure may be genuine but the dismissal process may still be unjustified because consultation, disclosure, selection or redeployment was not handled fairly. The question is not simply whether the employer can point to a restructure document. The reason for dismissal and the way the decision was reached both matter.
Where a restructure removes only some positions, the selection exercise can become the centre of the dispute. Criteria should relate to the genuine needs of the proposed structure, employees should have a meaningful opportunity to comment on information that affects them, and scoring should not be manipulated to remove a particular person. Ask for the criteria, weightings, scores and the information used to reach them.
A redundancy process should address whether there are suitable alternative roles before employment ends. A vacancy may not be identical to the old job. Depending on the circumstances, experience, transferable skills and reasonable training can all matter when assessing whether redeployment was genuinely considered.
A later advertisement or replacement hire does not automatically prove that the original redundancy was a sham, but it can be important evidence. Compare the new role with the old role: duties, reporting line, hours, location, seniority, skills and when the employer decided the work was still required. Preserve screenshots and job advertisements rather than relying on memory later.
Examples from the ERA case library:
Put the proposal, feedback, selection material, redeployment correspondence and outcome letter together. The issue is usually much easier to assess from the actual documents than from the final redundancy letter alone.
Check My Redundancy Case Personal Grievance guide
The Employment Court upheld a determination of the Employment Relations Authority that an employer pay its former employee substantial compensation for hurt and humiliation in remedy of the redundancy having been found unjustifiable.
![Gregory Brian Clarke v Omni Health Limited [2026] NZERA 265 - redundancy substantively justified, but process unfair; $10,000 compensation for disadvantage](/Images/site/EmploymentAdvocatesAucklandCard.jpg)
Omni Health disestablished its chief operating officer role in a cost-cutting restructure after cashflow pressure and declining profitability. The ERA accepted the redundancy was genuine and redeployment was not realistic, so the dismissal was substantively justified. However, multiple process...
The Authority made monetary and/or other orders. A structural engineer referred to by the randomly chosen letters FVG, was employed from early 2022 by a company YJN, also identified by such chosen letters. That company had recently... Key amounts include other payments of $7,000, $27,000.
The Authority made monetary and/or other orders. Bunnings Limited (Bunnings) is a large Australasian retailer of home improvement and outdoor living products. Emily Grinsted is Bunning's People and Culture Manager for the New Zealand,... Key amounts include other payments of $11,820, $11,820.00.
The Authority made monetary and/or other orders. SAS Builders Limited (SAS) commenced a restructure in September 2024, which resulted in the termination of Stephanie Martin's employment. Ms Martin claimed the restructure process that... Key amounts include lost wages / arrears of $4,872.00, $71.55.
A senior web developer was made redundant in a large technology department restructure. The ERA accepted the commercial drivers, but found a material process defect: Mega applied the selection criteria before consultation, did not provide the employee's scores, and did not let him meaningfully...
The Authority made monetary and/or other orders. John Pio was employed by Strautmann Hopkins Limited (SHL) from 1 March 2020 as a regional sales manager until his employment ended by way of redundancy on 26 April 2023. He says his... Key amounts include other payments of $18,000.
Anztec made a senior assembly technician redundant in a small-business restructure. The ERA accepted the redundancy was genuine and the dismissal was substantively justified, but found significant good faith/consultation defects - including failure to proactively disclose information.