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How to Run a Legally Compliant Restructure in New Zealand: A Step-by-Step Guide

A practical, step-by-step guide to running a restructure process that meets New Zealand's ERA 2000 good faith requirements — from initial planning through to final decisions.

Running a restructure in New Zealand is a legally significant undertaking. Get the process right and you reduce business disruption, protect your organisation from personal grievance claims, and treat your employees with the dignity the Employment Relations Act 2000 (ERA 2000) requires. Get it wrong and you risk ERA proceedings, reputational damage, and the personal and professional cost of drawn-out employment disputes.

This guide walks you through every stage of a compliant NZ restructure process.

Before You Begin: Is This Genuinely a Redundancy?

New Zealand employment law requires that redundancies be genuine. A genuine redundancy exists where:

  • The employer has a genuine business reason for the change (operational, financial, structural, or strategic)

  • The role as it currently exists is genuinely not required going forward
  • The employer is not using restructure as a pretext to remove a specific employee for performance or personal reasons

    • Courts and the Employment Relations Authority are alert to sham redundancies — situations where the role is disestablished but functionally identical work is performed, or where a new role is created for which only one person was ever a realistic candidate.

    Document your business case in writing before you start the process. This is your most important piece of evidence if proceedings arise.

    Step 1: Define the Proposed Changes

    Before approaching any employees, prepare a written proposal that describes:

  • The current organisational structure (which roles exist now)
  • The proposed new structure (which roles will exist after the change)
  • Which roles are being disestablished, modified, or created
  • The business rationale for each change
  • Any redeployment opportunities available within the organisation

    • This proposal does not need to be finalised — indeed, it should not be, because the consultation process should be capable of changing it. But it must be substantive enough to give employees meaningful information to respond to.

    Step 2: Identify Affected Employees and Union Obligations

    Work through your proposed structure and identify every employee whose role is being:

  • Disestablished (made redundant)
  • Modified significantly (duties, hours, reporting line, location)
  • Pooled (where multiple roles are being merged and selection will occur)

    • For each affected employee, check:

  • Is their role covered by a collective agreement? If so, check the restructure/redundancy clauses — they may impose enhanced obligations beyond the ERA 2000 minimum.
  • Are they a union member? If so, notify the relevant union before or at the same time as you notify the employee.

    • Step 3: Notify Affected Employees

    Arrange individual meetings with each affected employee. At the meeting:

  • Provide a written consultation proposal in advance (same day is fine, but ideally beforehand)
  • Explain the proposal clearly — what is being considered and why
  • Confirm the consultation period — how long they have to respond
  • Invite them to bring a support person (a colleague, family member, or union representative)
  • Confirm that no decision has been made yet

    • The written proposal should include:

  • The proposed change affecting their specific role
  • The business rationale
  • Any alternative roles available for redeployment
  • The selection criteria if their role is being pooled
  • How and when to provide feedback
  • Who to contact with questions

    • Step 4: The Consultation Period

    During the consultation period:

  • Be available to answer questions or discuss the proposal
  • Respond promptly to written feedback
  • Provide additional information if requested (subject to legitimate confidentiality considerations)
  • Do not make any final decisions — the consultation is genuine only if it is capable of changing the outcome

    • For individual role redundancies, a consultation period of 10–15 working days is typically appropriate. For larger restructures, 15–25 working days may be more appropriate. Where collective agreement provisions apply, those minimum periods must be observed.

    If an employee raises a redeployment option you had not considered, you must genuinely assess it. You cannot dismiss alternative proposals without engaging with them.

    Step 5: Consider All Feedback Genuinely

    After the consultation period closes, document your analysis of each piece of feedback:

  • What points did the employee raise?
  • Did the feedback raise any new information or perspectives you had not considered?
  • Did any feedback lead you to modify the proposal?
  • If not, why not?

    • This analysis does not need to be lengthy, but it must be genuine. The Employment Relations Authority will scrutinise this step closely in any subsequent proceedings.

    If the feedback leads you to modify the proposal (change the structure, modify selection criteria, add a redeployment option), go back to consultation before finalising.

    Step 6: Issue Provisional Decisions

    After completing your analysis, issue a provisional decision letter to each affected employee. This letter should:

  • State your provisional decision regarding their specific role
  • Summarise the feedback you received and how you considered it
  • Explain why (if applicable) the feedback did not change the outcome
  • Give them a further opportunity to respond (typically 5–10 working days)
  • Confirm the next steps in the process

    • Do not frame this as a final decision. It is provisional — the employee has a right to respond and you have an obligation to consider that response.

    Step 7: Consider the Response to Provisional Decisions

    Review any responses to the provisional decision with the same care as the initial consultation responses. If new information is provided, assess it genuinely.

    Step 8: Issue Final Decision Letters

    Once the response period has closed and you have completed your analysis, issue final decision letters. For employees being made redundant, the letter should confirm:

  • The final decision to disestablish their role
  • The effective date of redundancy
  • Their notice period and final date of employment
  • Any redundancy entitlements under their employment agreement or applicable law
  • Payment terms for outstanding leave entitlements
  • Information about the dispute resolution process if they wish to raise a personal grievance

    • Step 9: Manage the Transition Respectfully

    How you manage the period between the final decision and the employee's last day matters both legally and ethically:

  • Allow reasonable time for the employee to make alternative arrangements
  • Provide references on request
  • Avoid tasks designed to humiliate or undermine the employee's remaining time
  • Maintain confidentiality about the details of individual decisions (from other staff)

    • The ERA 2000's good faith obligation continues until the employment relationship ends.

    Step 10: Complete Your Documentation

    After the restructure is complete, ensure your records include:

  • The original business case
  • The consultation proposal (the version provided to employees)
  • Individual consultation meeting notes or minutes
  • Written feedback received from each employee
  • Your analysis of each piece of feedback
  • Provisional decision letters
  • Final decision letters
  • Any settlement agreements or exit negotiations

    • Retain these records for at least 6 years. Personal grievances can be raised up to 90 days after the dismissal, but related proceedings can extend beyond that.

    Using Restructured to Manage the Process

    Restructured was built to guide NZ HR teams through each of the steps above. Key features include:

  • Visual org chart comparison — see current and proposed structures side by side
  • Consultation document templates — ERA 2000 compliant proposal letters, meeting notes, and decision letters
  • Timeline tracking — automated prompts when consultation deadlines are approaching
  • Affected employee dashboard — track every employee through each stage of the process
  • Redundancy calculation tool — calculate entitlements under the employment agreement and applicable law

    • You can start with the free org chart builder and upgrade to the full restructure workflow when you are ready to begin the formal process.

    *This article provides general information about New Zealand employment law and does not constitute legal advice. For advice specific to your situation, consult a qualified NZ employment lawyer.*