Everyone
Redundancy
An employer must follow a fair and proper process before an employee is made redundant.
Employee and employer responsibilities
| If you're an employee | If you're an employer |
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If you are being made When an employee’s employment is terminated because their position has become surplus to the requirements of the business. Employers must follow a proper and fair process and consider redeployment options before making any positions redundant. |
Before making an employee redundant, you must follow a fair and proper process. |
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Your employer may agree to you not working the notice period. |
The reasons for any redundancy must be genuine. |
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You’re only entitled to redundancy compensation if it’s stated in your employment agreement. |
Redundancy is a last resort. You must explore all redeployment options. |
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Your The last pay an employee receives from their employer. This includes their final salary or wages, all holiday pay they are entitled to, and any other payments owing. |
If you cannot offer the employee with suitable Moving employees with suitable transferable skills into other roles in an organisation to avoid redundancies. A written document setting out the terms and conditions of employment agreed by the employer and employee (also known as a ‘contract of service’). It can include other contractual documents and agreements made by the employer and employee. Every employee must have a written employment agreement. |
Redundancy
An employer may need to reduce or change their workforce. In making an employee redundant, an employer must:
- follow a fair and proper process, including giving notice, if there are no other alternatives
- do all they can to find the employee an alternative role.
Workplace change process
An employer cannot make an employee redundant without first going through the proper Making changes that could affect employees’ jobs, for example, creating new roles, disestablishing existing roles, or changing employees’ duties. Also see ‘Restructuring’.
The reasons for any When an employee’s employment is terminated because their position has become surplus to the requirements of the business. Employers must follow a proper and fair process and consider redeployment options before making any positions redundant. When an employee is terminated from their job unfairly or for reasons that the Employment Relations Authority or Employment Court deem to be unfair.
Redundancy as a last option
Before making an employee redundant, an employer must have explored all possibilities to find them another position in the workplace. This is sometimes described as ‘ Moving employees with suitable transferable skills into other roles in an organisation to avoid redundancies.
If the employer is unable to find the employee an alternative role, they must provide them with all the support mentioned in their employment agreement, workplace policies or change proposal. This is the minimum – but they may wish to offer more support, such as:
- checking what date the role will be disestablished, and:
- if it will be needed for longer
- if there are other options for the employee to stay on while further redeployment options are considered
- outplacement support, including counselling, resume writing and interview training support, and career advice
- other training that could help improve the employee’s chances of future employment chances.
The notice period:
- must be at least the length of notice referred in their
employment agreement or workplace policiesA written document setting out the terms and conditions of employment agreed by the employer and employee (also known as a ‘contract of service’). It can include other contractual documents and agreements made by the employer and employee. Every employee must have a written employment agreement.
- can be extended by agreement or if the employee agrees to continue in their role, or in a special project of some sort, while the workplace change is completed; this can allow for other redeployment opportunities to be explored.
Employers exploring redundancy as an option can get support from the Ministry of Social Development.
Redundancy support for employers - Work and Income(external link)
Redundancy notice period
Any employee who is being made redundant must be given notice and paid for the notice period unless both parties agree to waive the The amount of time between giving notice and the date the employment relationship ends.
If there is no notice period specified in the A written document setting out the terms and conditions of employment agreed by the employer and employee (also known as a ‘contract of service’). It can include other contractual documents and agreements made by the employer and employee. Every employee must have a written employment agreement.
- the reason for the redundancy
- the employee’s length of service
- the employee’s seniority and/or remuneration package
- the employee’s ability to find alternative employment
- the amount of compensation being paid (if any)
- custom, practice and industry norms.
An employee’s final pay
In calculating an employee’s final pay, an employer must include:
- unused
annual holidays andPaid time away from work for rest and recreation.
salary An employee’s yearly pay, which is normally a fixed amount per year.
- any other entitlements.
Redundancy compensation
Whether an employee receives a redundancy payment depends on their applicable employment agreement and any negotiations they’ve had with their employer.
If the employment agreement does not mention redundancy pay, then there would be no compensation.