Redundancy in NZ: What the 2026 Changes Mean for You

Published Saturday, 18 April 2026

Losing your job to redundancy is stressful enough without having to decode the legal landscape around it. New Zealand's employment rules have seen some notable shifts lately, and if you're an employee — or an employer — it's worth understanding what a fair redundancy process looks like and how the recent changes might affect you.

This post isn't legal advice. It's a plain-English exploration of what the rules appear to say, so you can ask better questions and know when it's time to talk to a professional.

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What is redundancy, exactly?

Redundancy happens when an employer decides that a role — rather than the person in it — is no longer needed. It might be triggered by restructuring, cost-cutting, a business closure, or a shift in how work gets done. The key distinction is that it's the position that disappears, not a performance issue with the individual.

In New Zealand, the law requires employers to follow a fair and proper process before making someone redundant. That's not just good form — it's a legal obligation under the Employment Relations Act.

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What does a "fair process" actually involve?

According to Employment New Zealand, a fair redundancy process generally means your employer needs to:

Give genuine reasons for the proposed change, not just a rubber-stamp announcement

Consult with you before a final decision is made — that means actually listening, not just going through the motions

Consider redeployment — if there's another suitable role in the organisation, your employer should explore whether you could move into it before showing you the door

Provide notice in line with what's set out in your employment agreement

It's worth noting that your employer may agree to let you not work out your notice period — sometimes called "payment in lieu of notice" — but the details of how that works will depend on what your contract says.

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Are you entitled to redundancy pay?

This is one of the questions we hear most often, and the answer isn't straightforward. In New Zealand, there's no automatic legal entitlement to redundancy compensation beyond your notice period — unless it's specifically written into your employment agreement or collective agreement. So the first place to look is your contract.

If your agreement includes a redundancy clause, it's well worth reading it carefully (or having someone help you read it). What does it promise? Under what conditions does it apply? Are there any carve-outs? These are exactly the kinds of questions a contract review can help surface.

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What's changed in 2026?

A couple of significant Employment Relations Act changes took effect on 21 February 2026, and they're worth knowing about.

High earners and personal grievances Employees earning NZD $200,000 or more per year under new employment agreements can no longer raise a personal grievance for unjustified dismissal. For existing employees in that bracket, there's a 12-month transition period before the change applies to them. This appears to be one of the more significant shifts in recent memory for higher-paid workers, and employers in that space may need to rethink how they approach redundancy planning. Reinstatement is no longer the primary remedy Previously, reinstatement — getting your old job back — was the preferred remedy when an unjustified dismissal was found. That's no longer the case under the updated law. It's worth checking with a lawyer what this might mean for your situation if you're considering a grievance. The "gateway test" for contractors The same round of changes introduced a new test to help clarify whether someone is a contractor or an employee. This matters in a redundancy context because employees have rights that contractors generally don't. If your working arrangement has ever felt a bit blurry, it may be worth exploring which side of that line you fall on. Coming later: further changes in 2028 New legislation — including changes proposed under the Employment Leave Bill — is expected to take effect in 2028, giving employers and payroll providers time to adjust. We'll keep an eye on that as it develops.

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What should you check in your contract?

If you've just been told your role is at risk, or you want to be prepared before that conversation ever happens, your employment agreement is the place to start. Look for:

A redundancy or severance clause — and what it actually entitles you to

Your notice period, and whether payment in lieu is an option

Any mention of redeployment obligations on your employer's part

How disputes or grievances are meant to be handled

These clauses can be easy to overlook when you sign a contract in the excitement of starting a new job. But they matter enormously when things don't go to plan.

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Where to get help

If you've received a redundancy notice and you're not sure whether the process has been fair, or if you'd simply like to understand your contract better, it's a good idea to speak with a qualified employment lawyer. You can find one through the New Zealand Law Society at https://www.lawsociety.org.nz/for-the-public/find-a-lawyer/.

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Understand your contract before you need to

Clause is an AI-powered contract review tool built for everyday New Zealanders. Upload your employment agreement and get a plain-English breakdown of what it says — including any clauses that might be worth a closer look. A free preview is available, with a full review from $49 NZD.

Clause is not a law firm and does not provide legal advice. The information in this post is general in nature and is based on information available as at 18 April 2026. For advice specific to your situation, please consult a qualified New Zealand employment lawyer.

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This is general information, not legal advice. Always consult a qualified professional. Find one at lawsociety.org.nz/for-the-public/find-a-lawyer/

Redundancy in NZ: What the 2026 Changes Mean for You