NZ Redundancy Process Checklist: A Step-by-Step Guide for HR Managers

Redundancy in New Zealand is not simply a business decision — it is a legally regulated process under the Employment Relations Act 2000 (ERA 2000) and, where applicable, individual employment agreements and collective agreements. Getting it wrong exposes your organisation to personal grievance claims, penalties from the Employment Relations Authority (ERA), and reputational damage.

This checklist is designed for HR managers running a genuine redundancy process. It covers each stage from the decision to restructure through to the final separation, with specific reference to NZ legal requirements.

Is the Redundancy Genuine?

Before starting any process, confirm the redundancy is genuine — meaning the role is no longer required due to an operational, structural, or commercial reason. A genuine redundancy is not:

A mechanism to remove a specific person (that is dismissal, not redundancy)

The result of performance issues (use a performance improvement process instead)

A pretextual reason concealing a different motive

The Employment Court and Employment Relations Authority will examine the genuineness of a redundancy if challenged. Document the business case clearly and keep records of the decision-making process.

Checklist item 1: Written business case documenting the commercial or operational reason for the role being disestablished ✓

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Step 1: Proposal Stage — Before Any Decision Is Made

Under the ERA 2000 and the good faith obligation (section 4), you must consult with affected employees before making a final decision to disestablish their role. This is the most commonly misunderstood requirement.

Many employers make the mistake of treating the consultation meeting as a notification meeting — announcing the decision has already been made. That is not consultation. Genuine consultation means:

The employee receives information about the proposal (not a decision)

The employee has a reasonable opportunity to respond with their views, questions, and alternatives

You genuinely consider their response before making a final decision

What to provide at the proposal stage:

A written proposal document describing the restructure and the reason for it

Details of which roles are proposed for disestablishment

Proposed selection criteria if more than one person is in a role being reduced

A reasonable timeframe for the employee to respond (typically 5–10 working days for a straightforward redundancy)

Information about any redeployment opportunities that may exist

Checklist items 2–6:

[ ] Written proposal document prepared and provided to the affected employee(s)

[ ] Proposal clearly states it is a *proposal*, not a decision

[ ] Reasonable response time given (at least 5 working days)

[ ] Employee advised of their right to seek independent advice (including from their union or a lawyer)

[ ] Employee advised they may bring a support person or representative to any meeting

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Step 2: Consultation Meetings

Hold at least one consultation meeting with each affected employee. This is not optional — even in straightforward redundancies, the ERA 2000 requires active, genuine consultation.

Before the meeting:

Send a written meeting invitation at least 48 hours in advance

Confirm the employee can bring a support person or union representative

Prepare: proposal document, selection criteria (if applicable), redeployment options

During the meeting:

Explain the reason for the proposal

Walk through the selection criteria (if applicable)

Ask the employee for their views, concerns, and any alternatives they propose

Do not make a decision in the meeting — this is a genuine two-way conversation

After the meeting:

Provide a written summary of the meeting within 2–3 working days

Give the employee a further opportunity to respond in writing if they wish

Document that you have genuinely considered their feedback before proceeding

Checklist items 7–11:

[ ] Consultation meeting(s) held with each affected employee

[ ] Meeting notes taken and provided to the employee

[ ] Employee's response and alternatives genuinely considered

[ ] Record of how the response was considered (not just that it was received)

[ ] Further response opportunity offered where appropriate

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Step 3: Selection Criteria (When Multiple Employees Are in Scope)

When a reduction in force means choosing between employees in the same role or pool, you need objective selection criteria. Using subjective or discriminatory criteria is one of the most common causes of successful personal grievance claims.

Legally sound selection criteria examples:

Skills and qualifications — specific technical or professional capabilities required for the retained role

Performance history — documented, objective performance records (not subjective impressions)

Attendance records — including any reasonable accommodation obligations under the Human Rights Act 1993

Operational requirements — specific skills needed for the post-restructure organisation

What to avoid:

Criteria that are correlated with protected grounds under the Human Rights Act (age, sex, race, religion, disability, family status)

Criteria that cannot be objectively measured or documented

Any criterion that appears neutral but has a disparate impact on a protected group

Checklist items 12–15:

[ ] Selection criteria documented in writing before being applied

[ ] Criteria are objective and measurable

[ ] Criteria reviewed for disparate impact on protected groups

[ ] Selection pool correctly identified (same or substantially similar roles)

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Step 4: Redeployment — A Legal Obligation, Not a Courtesy

Section 4 of the ERA 2000 and established Employment Court case law require employers to actively consider redeployment before confirming a redundancy. This is not simply about asking the employee if they want another job — you must:

Identify all available vacancies in your organisation (including roles that are not yet advertised)

Assess whether the employee could perform the role with reasonable retraining

Offer suitable alternatives in writing before confirming the redundancy

Consider whether a role in a related entity (subsidiary, parent company) might be suitable

The threshold is not that the alternative role is identical — it is whether it is *reasonably comparable* in terms of nature, remuneration, and seniority.

If no suitable redeployment exists, document that you searched and the reasons no suitable options were available.

Checklist items 16–19:

[ ] Active search for redeployment opportunities conducted across the organisation

[ ] Any suitable alternatives offered to the employee in writing

[ ] Employee's response to redeployment offers documented

[ ] If no alternatives exist: documented evidence of the search and why alternatives were unsuitable

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Step 5: Final Decision and Notice

Once consultation is complete and you have genuinely considered all feedback and redeployment options, you can confirm the redundancy decision in writing.

Notice period:

Your obligation is to provide either:

The notice period specified in the employee's individual employment agreement (IEA) or collective agreement (CA), or

Reasonable notice if no notice period is specified

Most IEAs specify 4 weeks for managerial roles and 2–4 weeks for other permanent roles. Fixed-term contracts may have different provisions. Check each employee's agreement before issuing notice.

Garden leave:

You may require an employee to work their notice period or, if the IEA provides for it, to take garden leave (paid but not required to attend work). Confirm which approach applies under the relevant agreement.

Checklist items 20–23:

[ ] Written notice provided specifying the last date of employment

[ ] Notice period matches what is specified in the employment agreement

[ ] If garden leave applies: confirmed in writing with pay continuation terms

[ ] Final pay calculation reviewed (including any accrued annual leave)

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Step 6: Redundancy Compensation

New Zealand law does not require statutory redundancy compensation. There is no mandatory redundancy payment under the ERA 2000. However:

Your employment agreement may require it. Many IEAs and collective agreements specify a redundancy compensation formula (commonly 1–4 weeks per year of service, or a fixed amount). Check the agreement.

Your redundancy policy may require it. If your organisation has a published redundancy policy, it may be contractually binding.

Enhanced payments may be appropriate. While not required by law, offering above-minimum payments can reduce the risk of personal grievance claims, especially for long-serving employees.

Checklist items 24–27:

[ ] Employment agreement reviewed for any redundancy compensation clause

[ ] Any applicable collective agreement reviewed

[ ] Redundancy policy reviewed for binding commitments

[ ] Final compensation calculation confirmed and documented

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Step 7: Documentation and Record-Keeping

Every stage of the redundancy process must be documented. If a personal grievance claim is made, the Employment Relations Authority will request:

The original business case / proposal document

All written communications with the employee

Meeting notes and any written responses from the employee

Evidence of genuine consideration of the employee's feedback

Evidence of redeployment search

The final decision letter and notice

Keep all records for at least 7 years from the date of termination (longer if there is any risk of a claim).

Checklist items 28–30:

[ ] Complete documentation file compiled for each affected employee

[ ] Records stored securely and accessibly for at least 7 years

[ ] File includes: proposal, meeting notes, employee responses, redeployment search, final decision

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Common Mistakes That Lead to Successful Personal Grievances

1. Consulting after the decision is made

The most common ground for a successful claim. If you announce a redundancy and then consult, the Employment Court will find there was no genuine consultation.

2. Applying subjective selection criteria

"Attitude", "cultural fit", and "potential" are not objective. They are almost impossible to defend under cross-examination.

3. Failing to consider redeployment

Skipping this step entirely — or going through the motions — is easily identifiable from the documentation trail.

4. Notice period errors

Paying out less notice than the agreement requires gives rise to a breach of contract claim on top of any personal grievance.

5. Treating long-serving employees the same as recent hires

This is not legally required, but the Employment Court will look at the totality of the employer's conduct. Long-serving employees with no history of issues who receive minimal process are more likely to succeed in a personal grievance.

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Using Software to Manage the Process

Managing a redundancy process manually — tracking consultation stages, generating letters, maintaining audit trails — is high-risk. Missed steps in the documentation are the primary reason legally compliant redundancies still result in successful personal grievance claims.

Restructured is built for NZ HR managers running exactly this process. It tracks each stage of the consultation process, generates ERA 2000-compliant letters, maintains a timestamped audit trail, and produces the documentation pack you'd need to defend a personal grievance claim.

The free tier lets you build your current and proposed org charts immediately — no credit card required.

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*This checklist provides general guidance and does not constitute legal advice. For specific advice on your situation, consult an employment lawyer or Employment New Zealand.*