Restructuring and redundancy in NZ: a fair process for employers

What makes a redundancy genuine?

A genuine redundancy is about the disestablishment of a position, not about an employee’s conduct or performance. It must be driven by real business reasons, such as restructuring to improve efficiency, introducing technology that makes a role obsolete, or closing part of the business.

If the “redundancy” is really about the person, or the role is quietly re-advertised soon after, it can be found to be a sham and an unjustified dismissal. The business reason has to be genuine and able to be evidenced.

The consultation process, step by step

A restructure starts as a proposal, not a decision. Affected employees have the right to see it, comment on it, and have their feedback genuinely considered before anything is finalised.

• Do not predetermine the outcome: go into consultation with an open mind and in good faith.
• Give affected employees a written proposal and all the relevant information behind it.
• Invite feedback and give people a fair, reasonable time to respond.
• Genuinely consider the feedback, respond to it, and change the proposal if the feedback warrants it.
• Make and communicate the decision only after that process, with reasons.

Selection and redeployment

Where some but not all roles go, use fair, objective and consistently applied selection criteria, and share them for feedback. Before confirming any redundancy, you must genuinely consider redeployment: whether there is another suitable role the affected employee could move into.

Skipping redeployment, or treating it as a formality, is a common reason redundancies are found unjustified.

A note on the 2026 changes

From 21 February 2026, employees earning total remuneration at or above $200,000 can no longer raise an unjustified-dismissal grievance, and some good-faith procedural steps (such as redundancy consultation) may no longer be legally required for them. For everyone else, the full consultation and redeployment obligations continue to apply, so the safest approach remains a genuine, well-documented process.

Common mistakes

• Presenting the proposal as a done deal (a predetermined decision).
• Not sharing the underlying business information, so employees cannot meaningfully respond.
• A “sham” redundancy that is really about performance or conduct.
• Failing to genuinely consider redeployment before confirming redundancies.
• Poor documentation: no record of the reason, the consultation or why the decision was made.