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Redundancy

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 in New Zealand

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.

What a fair redundancy process usually requires

  • Genuine business reason: There must be a real business rationale (for example, restructure, downturn, loss of contract, or efficiency change) and it must not be a disguise for performance or personal issues.
  • Early consultation: You should be told what is proposed, why it is proposed, and what roles may be impacted - before the decision is finalised.
  • Information disclosure: You should be given the key information the employer relies on (for example, proposed new structure charts, selection criteria, and the reasons certain roles are proposed to be removed), subject to legitimate confidentiality.
  • Real opportunity to comment: You must have a genuine chance to provide feedback, ask questions, propose alternatives, and suggest redeployment.
  • Fair selection process: If multiple people could be affected, selection criteria must be fair, relevant, and applied consistently (and employees should be consulted on the criteria).
  • Redeployment explored properly: The employer must genuinely consider suitable alternative roles, including training/upskilling where reasonable, before termination.
  • Written outcome: You should receive a clear written decision explaining the business rationale, the process followed, and why redeployment was or was not possible.

Common warning signs of an unfair redundancy

  • Predetermination: The decision feels "already made" before consultation, or your feedback is ignored.
  • Role not really gone: Your work is still being done (re-titled role, replacement hire, or the tasks are split to others) without a genuine restructure explanation.
  • Selection looks targeted: Criteria are vague, subjective, or appear designed to produce a particular outcome.
  • No real redeployment search: Vacancies exist but you are not considered, or you are told to apply like an external candidate without genuine consideration.
  • Confidentiality used as a shield: The employer refuses to provide the key information you need to comment meaningfully.

What to do if you are facing redundancy

  • Ask for the proposal in writing: including the new structure, the reason for change, and who is impacted.
  • Request the selection criteria: and any scoring or assessment used.
  • Put forward alternatives: reduced hours, temporary changes, job-share, redeployment, or different restructure options.
  • Ask about vacancies: and confirm you want to be considered for suitable roles.
  • Bring a support person: to any consultation or outcome meeting.

Time limits and evidence

  • 90 days: A Personal Grievance (PG) generally must be raised within 90 days of dismissal (or when it came to your notice).
  • Save everything: restructure proposals, org charts, meeting invites/notes, selection criteria, scoring, vacancy lists, emails, and letters.
  • Write a timeline: what was proposed, what you asked for, what you were told, and what options were (or weren't) offered.

Redundancy pay

There is no automatic statutory redundancy compensation. Entitlement usually depends on your employment agreement (or sometimes a workplace policy or established practice).

  • Check your employment agreement: does it specify redundancy compensation, notice, and consultation obligations?
  • Check policies/practice: some employers have policies or a history of paying redundancy compensation.
  • Final pay: you should still receive notice (or pay in lieu), holiday pay, and any other contractual entitlements.

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.
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When can a redundancy dismissal be unjustified?

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.

Selection criteria and scoring

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.

Redeployment is not an afterthought

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.

What if the job comes back?

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.

Recent NZ redundancy decisions

Examples from the ERA case library:

Already made redundant?

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

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Showing 25-32 of 38 articles in Redundancy
PENNY v FRELLO LIMITED [2025] NZERA 317 - redundancy consultation and redeployment failures

Henry Penny was selected for redundancy from Frello's software-development team after a restructure intended to reduce headcount. He argued resignations had already reduced staff numbers, the selection outcome was predetermined, and consultation and redeployment were not genuine.

UDUMULLAGA v HOPKINS JOINERY LIMITED [2025] NZERA 270 - employer-prepared resignation and redundancy dismissal unjustified

Ms Udumullaga was presented with an employer-prepared resignation letter and was later told her job had already been disestablished. The dispute concerned redundancy, periods when she said she was fit and available to work, unpaid entitlements, and whether the employer's process was genuine and fair.

WILLIAMS v LONGEVITY CONSTRUCTION LIMITED and Anor [2025] NZERA 215 - redundancy substantively and procedurally unjustified

Mr Williams was told by email on 17 March 2024 that he had been made redundant immediately. He had not previously been told his job was in jeopardy, no supporting information accompanied the decision, and there had been no genuine consultation before the outcome was reached.

VAN HEERDEN v LONGEVITY CONSTRUCTION LIMITED and Anor [2025] NZERA 217 - redundancy substantively and procedurally unjustified

Mr van Heerden was told at a 30 January 2024 meeting that his position had been disestablished and his employment was ending for redundancy. The decision had effectively been made before he was told his job was at risk, and the process mixed redundancy with irrelevant performance and conduct concerns.

CHENG v THE VICE CHANCELLOR OF LINCOLN UNIVERSITY [2025] NZERA 167 - personal grievance partly successful; compensation and lost wages

Ms Cheng's case against Lincoln University involved several employment grievances and required the ERA to distinguish the claims that were made out from those that were not. The resulting orders included both compensation and a wage-related remedy rather than an across-the-board finding for either party.

HILL v TAMAKI LABOUR HIRE LIMITED [2025] NZERA 100 - personal grievance partly successful; remedies limited to proven breaches

Mr Hill challenged the ending of his employment with Tamaki Labour Hire and associated treatment during the employment relationship. The case required the ERA to separate the parts of his grievance that were established from claims for which the evidence did not justify relief.

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