What am I owed if I am made redundant in New Zealand?

The honest answer surprises people: there is no automatic redundancy payout in New Zealand. Unless your employment agreement promises redundancy compensation, your employer does not have to pay you anything beyond your normal final pay. What the law does give you is a right to a genuine reason, a fair process, proper notice, and every dollar of wages and holiday pay you have built up.

Redundancy is meant to be about the job disappearing, not about you. If the role still exists and someone else is doing it, or the process was a formality with the decision already made, you may have a personal grievance, and you have 90 days to raise it.

The basics

• Redundancy must be for genuine business reasons. The employer has to show the role, not the person, is no longer needed.
• There is no legal right to redundancy compensation. If your agreement is silent on redundancy pay, there is none.
• Before deciding, the employer must consult. That means a written proposal, the information behind it, a reasonable time for you to respond, and genuine consideration of what you say.
• Redundancy is a last resort. The employer must look at redeployment into other roles and alternatives such as reduced hours before ending your job.
• You get the notice period in your employment agreement. If there is none, reasonable notice applies, and 2 to 4 weeks is generally seen as reasonable.
• You can work the notice or, by agreement, be paid instead of working it. Garden leave, where you stay employed and paid but do not come in, is also by agreement.
• Final pay must include wages to your last day, the notice period, all unused annual holidays, any alternative holidays, and any payment promised in your agreement. It must be paid on or before the pay day for your final pay period.
• Unused sick leave is not paid out.
• If the reason or process was unfair, you can raise a personal grievance within 90 days of the dismissal or of learning about the problem.
• Work and Income offers redundancy support before your last day and Jobseeker Support after it.

How final pay is worked out

• Pay: $62,400 a year, $1,200 gross a week, paid weekly.
• Service and holidays: Started 1 March 2023. Last day Friday 30 October 2026. Has 2 weeks of entitled annual holidays left from the year ending 28 February 2026.
• Notice: 4 weeks in the agreement, worked in full.
• Redundancy clause: Agreement promises 4 weeks' pay as compensation.

If Sam's agreement had no redundancy clause, the total would be $7,152. That is the whole difference the clause makes, which is why it pays to read your agreement before you sign it.

The catch

• "Restructure" is not a magic word. If your role is disestablished and a new role with the same duties is advertised, the redundancy is very likely not genuine.
• Consultation must happen before the decision. A meeting where the outcome is already printed on the letter is not consultation. You must be given the information and a real chance to influence the result.
• Selection must be objective. When some roles stay and others go, the criteria must be measurable and shared with you, and you should get a chance to comment on the result.
• Redeployment has limits. You generally have to accept a role that is the same or similar. You do not have to accept a different role unless your agreement allows it.
• Reasonable notice cuts both ways. Without a written notice period, a senior long-serving employee may be owed more than 4 weeks, and a junior employee may be owed less.
• High earners have fewer options. Since 21 February 2026, employees on new agreements earning $200,000 or more a year cannot bring an unjustified dismissal grievance. Existing agreements had a 12-month transition.
• Your own conduct can cut remedies. The Authority must reduce or remove compensation if you contributed to the situation, and serious misconduct removes remedies entirely.
• Redundancy pay affects your benefit. Work and Income counts redundancy compensation as income when working out your stand-down. Holiday pay and pay instead of notice can also shift the date your employment is treated as ending.

Do this next

1. Ask for the change proposal and the reasons in writing, and for all the information the employer relied on.
2. Ask how long you have to respond. Take advice from a union, community law centre or lawyer before you reply.
3. Put your feedback in writing. Suggest alternatives: other roles, reduced hours, job sharing, a later date.
4. Ask for the final decision in writing, with the date notice is given and your last day.
5. Read your agreement for the notice period and any redundancy clause, then check the final pay line by line against the example above.
6. If the reason or process looks unfair, raise a personal grievance in writing with your employer within 90 days. Call Employment New Zealand on 0800 20 90 20 for free mediation.
7. Email [email protected] as soon as you know you are at risk. Work and Income can start helping before your last day.
8. Apply for Jobseeker Support through MyMSD or on 0800 559 009. Expect a stand-down of 1 or 2 weeks depending on your average weekly income; for a single person the 2-week stand-down starts at $1,620.68 a week. Ask about the Transition to Work Grant and Accommodation Supplement too.

Common questions

How much redundancy pay is normal?

There is no legal minimum, so "normal" is whatever your agreement or collective agreement says. Many agreements say nothing, in which case there is no compensation at all.

Can I be made redundant while on sick leave or parental leave?

Being on leave does not prevent a genuine redundancy, but the same consultation and fair process rules apply, and you must be able to take part. Treating you worse because you are on leave could be discrimination.

Can my employer make me redundant and then hire a contractor?

If the work still exists and someone else is doing it, the redundancy is probably not genuine. This is a common ground for a personal grievance.

Do I have to work out my notice?

If the employer wants you to, yes, and you are paid as normal. The employer cannot cut the notice short without your agreement. You can agree to be paid instead of working it.

What if I miss the 90-day deadline?

You can only raise the grievance late if the employer agrees or the Employment Relations Authority finds exceptional circumstances. Do not wait. Once raised, you have 3 years to lodge it with the Authority.

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Last reviewed 14 October 2026. Written by Streetwise from the official pages listed above. General information only, not legal or financial advice.