Redundancy 

What qualifies as a genuine redundancy?

A genuine redundancy is where an employer ends an employee’s employment because the employer has decided, for ‘genuine  reasons’ that the employee’s job is no longer needed. ‘Genuine  reasons’ can include things like making changes to enable the business operate more efficiently and cost effectively, closing the business or selling the business.

For more information see the Employment Relations Service information on redundancy.

If you don’t think your redundancy is genuine see the question below.

What's the difference between a voluntary redundancy and a ‘normal’ redundancy?

A voluntary redundancy is where, during consultation for a restructuring process, your boss asks everyone in the workplace or a team if there is anyone who wishes to volunteer to be made redundant when the workplace is restructured. This must still be a genuine redundancy. A ‘normal’ redundancy is where the job is no longer needed by the business and the person in that job has to leave. Sometimes, a job may be removed but the employee may be offered another job in the company as an alternative to redundancy.


How much notice should an employer give when making an employee redundant?

An employer must give  notice to an employee whose employment ends for redundancy. The notice period for redundancy will usually be written into your employment agreement. If your employment agreement does not mention a period of notice then “reasonable notice” will be required.  What is “reasonable” will depend on the circumstances of each case, such as your length of service, your seniority, the amount of notice that other employees in similar situations have been given by your employer etc.


What can you do if you think your boss is just trying to get rid of you and it’s not a genuine redundancy?

If you are a member of a union, you should speak to your union representative. Tell them that you think that your employer may be trying to get rid of you and explain why you think the redundancy is not for genuine reasons.  If you are not a union member then seek advice from a lawyer, or other person, experienced in employment law.

If your employer does make you redundant and you have grounds for believing that it is not for genuine reasons you can raise a Personal Grievance for unjustified dismissal.  You could also talk to your community law centre. 

If you see your job being advertised (with no, or no substantial changes) after you have been made redundant then this is likely to indicate that your redundancy is not genuine. You should get a copy of any such advertisement for evidence and seek advice.

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I don’t think my boss followed the correct procedures when I was made redundant. Can I do anything about it?

If you think that your boss has acted unfairly  then the first thing you need to do is raise the issue with your employer to see if you can resolve it directly. There may be a few legal options available to you, depending on your situation. You can also speak with your union representative if you belong to a union or the Department of Labour. You can reach them on 0800 20 90 20.  You may want to bring a Personal Grievance against your employer. The Employment Relations Service has further information about how to do this, or you can speak to your local Citizens Advice Bureau for support.   Remember, a Personal Grievance must be raised within 90 days of you being dismissed.

What sort of redundancy provisions should there be in a typical employment agreement?

There is no requirement under New Zealand law for an employer to pay redundancy compensation.  If your written employment agreement does not mention redundancy compensation then it is unlikely you will be entitled to any payment, although you should seek advice to confirm this.  If your employment agreement states how much will be paid to you for redundancy then that will be the amount payable to you. Regardless of whether or not redundancy compensation is provided in your employment agreement, your employer must still follow a fair process when making decisions about restructuring or redundancy.

Restructuring or redundancy must be carried out in good faith and your employer must not mislead or deceive you. For a restructuring or redundancy process to be fair, your employer needs to (at least) do the following;

• Advise you in sufficient detail of the reasons for the proposed changes and the impact on your job;
• consult with you and anyone else who is potentially being made redundant;
• give you a reasonable opportunity to take independent advice and to have a representative/support person with you at any meetings with your employer to discuss this;
• take your suggestions into account before making its decision about the proposed changes; and
• be open to considering alternatives to redundancy, like giving you a job elsewhere in the company or reducing the hours you work.

For other examples of what your employer should do when thinking about redundancy see the Employment Relations Service website.

There is a statutory requirement for all employment agreements to contain an Employee Protection Provision (EPP). This requirement protects employees who are affected by a restructuring.  An EPP must contain:

• a process that the employer must follow in negotiating with a new employer about the restructuring to the extent that it relates to affected employees;
• the matters relating to the affected employee’s employment that the employer will negotiate with the new employer including whether the affected employees will transfer to the new employer on the same terms and conditions of employment;
• the process to be followed at the time of the restructuring, to determine what entitlements (if any) are available for employees who do not transfer to the new employer.

Employees working in the following areas are given additional protection in the case of restructuring:

• cleaning services and food catering services in any place of work
• laundry services for the education, health or age-related residential care sector
• orderly services for the health or age-related residential care sector
• caretaking services for the education sector.

Some examples of restructuring are:

• where a business (or part of it) is sold 
• a business contracts another business to perform work that was being performed inhouse
• if your employer is a contractor and they lose a contract to perform services and the contract is granted to another business
• where the business the contractor is performing the work for, decides to undertake the work in house

In the event a restructuring occurs, people in the jobs listed above can choose to work for the new company on the same terms and conditions. If they make this choice, they will become employees of the new employer. If those employees choose not to transfer, the existing employer may make them redundant and any notice/payments will be assessed by looking at their current employment agreement.. If the new business subsequently decides it has to make them redundant and there are no provisions in their employment agreement about redundancy, new terms should be negotiated by the employee and the new employer. If redundancy terms cannot be agreed on with the employer, then the Employment Relations Authority may decide an appropriate redundancy provision.

For more information see the Employment Relations Authority website.

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What extra help does WINZ provide if you're made redundant?

Their Restart programme is no longer available, however Work and Income have an information service called Redundancy Support. They can tell you about any income support you may be entitled to, training opportunities, and help you find another job. 

If you receive a redundancy payment you may be eligible for a Redundancy Tax Credit.  If you have children and your partner is still in paid employment, you might be eligible for one of the Working for Families tax credits - read the answer below.

I've just been made redundant, and my wife is expecting a baby in a couple of months. What help is there for us?  I'm worried sick.

If your wife is working or on parental leave you may qualify for ‘Working for Families’ tax credits when your baby is born. There are four different tax credits available:

 the Family Tax Credit is available to all families earning under a set amount

• the In-Work Tax Credit (IWTC) is an additional payment for families who normally work a minimum number of hours each week
• the Parental Tax Credit (PTC) helps with the costs of a new baby for the first eight weeks after your baby's birth
• the Minimum Family Tax Credit (MFTC) is an income tested tax credit which ensures a minimum income for families each week, as long as the family works a certain number of minimum hours per week

For more information, see our information on Tax Credits or go to the Working for Families website. 

You are welcome to come in to your local Citizens Advice Bureau if you want to talk to someone about how to manage this difficult period in your life.