How to Write a Legally Defensible Redundancy Decision Letter in New Zealand
The redundancy decision letter confirms the outcome of a consultation process and serves as the primary exhibit in ERA proceedings. This guide explains exactly what it must contain, what to avoid, and how the Employment Relations Authority scrutinises it.
The redundancy decision letter is the written outcome of a consultation process. It formally confirms that an affected employee's role is being disestablished, their last working day, and what they are entitled to. In Employment Relations Authority proceedings, it is frequently the primary exhibit.
Many employers treat decision letters as administrative, a formality after the real work of the consultation is done. This is a mistake. The ERA scrutinises decision letters closely, not as standalone documents, but as evidence of whether the consultation process was genuine. A letter that fails to address the specific feedback the employee raised is strong evidence that feedback was never genuinely considered. A templated letter, identical in substance to those sent to other affected employees, is evidence that individual consideration did not occur.
Getting the decision letter right is not separate from getting the process right. It is part of the evidence that the process was right.
Provisional vs Final: The Two-Letter Process
Before writing a final decision letter, you should issue a provisional decision letter. This two-letter process is not mandated by the ERA 2000, but it is strongly recommended and widely used because it adds a layer of procedural protection.
Provisional decision letter: Issued after the initial consultation period closes. It states what you *propose* to decide, based on the feedback received so far. The employee is given a further opportunity to respond (typically 5 working days) before the final decision is made.
Final decision letter: Issued after genuinely considering the response to the provisional decision. This is the document that confirms the outcome and triggers the notice period.
The provisional step gives the employee two formal opportunities to influence the outcome: once during the initial consultation period, and again in response to the provisional decision. Each round of feedback must be genuinely considered. If new information is raised in the response to the provisional decision, it must be addressed in the final letter.
Employers who skip straight to a "final decision" after a single consultation period are not necessarily acting in bad faith, but they are forgoing procedural protection. If a personal grievance is subsequently raised, the absence of a provisional step can be used to argue the process lacked adequate opportunity for the employee to influence the outcome.
What a Defensible Final Decision Letter Must Contain
A legally defensible final decision letter should include each of the following elements.
1. Reference to the Consultation Process
Open by referencing the process that preceded the decision. Include the date the proposal was issued, any meetings held (with dates), and when the employee's consultation response was received. This establishes that there *was* a consultation process, when it occurred, and that you received the employee's input.
*Example: "This letter follows the consultation process that commenced on [date], during which a written proposal was provided to you. Consultation meetings were held on [dates]. Your written response was received on [date]."*
2. Summary of Consultation Feedback
Briefly summarise the material points the employee raised. You do not need to reproduce every sentence, but the key arguments should be acknowledged: alternatives to redundancy proposed, challenges to the selection criteria, concerns about the business rationale, or requests for additional information.
This is the element most often missing from decision letters. Its absence is the single strongest indicator to the ERA that the feedback was not genuinely considered.
3. Engagement with the Feedback
For each material point raised, state how you considered it and why it did or did not change the outcome. The response must be tailored to what this specific employee raised, not a generic statement that "all feedback was carefully considered."
If the employee proposed an alternative (such as reducing hours across the team rather than disestablishing the role), explain why that alternative was not adopted. If they challenged the selection criteria, explain how those criteria were validated. Even if no feedback changed the outcome, you must explain why.
4. The Decision and Its Rationale
State the final decision clearly: the role is disestablished. Then briefly restate the business rationale, meaning the genuine commercial, operational, or structural reason the role is no longer required. This connects the outcome to the substance of the consultation proposal and confirms the decision is about the role, not the person.
Avoid language implying the decision was made before consultation occurred. Phrases like "as we previously indicated" or "consistent with our initial announcement" can undermine the entire process.
5. The Effective Date and Notice Period
State clearly:
Check the employment agreement for the required notice period. A common mistake is calculating the notice period from the date of the consultation proposal rather than the final decision letter.
6. Entitlements
List each payment the employee will receive at termination:
Providing an itemised breakdown reduces the likelihood of a dispute about the final pay.
7. Personal Grievance Rights
The letter must inform the employee of their right to raise a personal grievance. Under section 114 of the ERA 2000, an employee has 90 days from the date of the dismissal, or the date they became aware of the action giving rise to the grievance, to raise a personal grievance.
The letter should also reference the availability of mediation under the ERA 2000 and the employee's right to seek independent advice from a union, employment lawyer, or other advisor.
8. Contact for Questions
Provide a named contact who can respond to questions about the process, the entitlements, or next steps. This is particularly important for questions about the final pay calculation or timing of payments.
Common Omissions That Create Liability
No summary of consultation feedback. The most significant red flag. If the letter contains no reference to what the employee said in consultation, the ERA will treat this as evidence that no genuine consideration occurred.
Boilerplate language. Sending the same letter, word for word, to every affected employee, with only the name and role title changed, is strong evidence that the consultation was not individual and genuine. Each letter must be tailored to that employee's specific feedback.
No notice period calculation. Stating the last working day without showing how it was calculated creates risk if the period is wrong. Include the start date and the number of weeks.
Skipping the provisional decision step. While not mandatory, going straight to a "final" decision after a single consultation period removes a layer of procedural protection and can be used to argue the process was not adequate.
Announcing the outcome before consultation is complete. Any language that implies the decision was made before the consultation response period closed is evidence of predetermined outcome.
Decision language in the proposal letter. Framing the proposal letter as a "decision" rather than a "proposal" contaminates the process before the decision letter is even written. The proposal must be a proposal; the decision letter is where the decision is confirmed.
How the ERA Scrutinises Decision Letters
In personal grievance proceedings, the Employment Relations Authority will typically:
The ERA also notes the *absence* of things, specifically whether the decision letter is silent on points the employee raised. Silence on a material point raised in consultation is treated as evidence that the point was not considered.
In *NZ Fasteners Ltd v Tahi* [2004] ERNZ 488, the Authority was critical of decision letters that acknowledged consultation had occurred but contained no reference to what the employee actually said. The distinction between a genuine consideration record and a procedural formality is visible in the letter itself.
Template Structure for a Defensible Redundancy Decision Letter
A defensible letter should follow this structure:
Retain a copy of the letter and confirmation of delivery (email read receipt, signed receipt, or a note that the letter was handed over in the presence of a witness). Keep these records for at least 7 years.
How Restructured Helps
Restructured generates provisional and final decision letters for each affected employee as part of the full restructure workflow. Each letter is pre-populated with the consultation timeline, the employee's feedback summary from the tracked consultation record, and the correct notice period calculation.
The document generation is connected to the consultation tracker, so the letter reflects the actual process that occurred, not a generic template. This is the key difference between a defensible letter and one that will be dismantled in ERA proceedings.
*This article provides general guidance on drafting redundancy decision letters in New Zealand and does not constitute legal advice. For advice specific to your situation, consult a New Zealand employment lawyer. Employment New Zealand also provides free guidance.*