Redundancy Pay Calculator

In New Zealand, there is no statutory right to redundancy pay — unlike the United Kingdom (which has a legal redundancy pay formula) or Australia (which has entitlements under the National Employment Standards). Whether you receive redundancy compensation in New Zealand depends entirely on what your employment agreement says. If your individual or collective employment agreement includes a redundancy payment clause, your employer must honour it. If your agreement is silent on redundancy pay, your employer has no legal obligation to make a payment beyond your final wages, outstanding holiday pay, and notice period pay. Some employers choose to make ex gratia (goodwill) payments even when not required. You can negotiate redundancy provisions when starting a job or during bargaining. Source: Employment New Zealand — Redundancy (employment.govt.nz).

Because New Zealand has no statutory redundancy formula, the calculation of redundancy pay (where it exists) depends on the specific wording of your employment agreement. Common formulas include: a fixed number of weeks' pay per year of service (e.g., one week per year); a lump sum; or a capped maximum (e.g., 12 weeks maximum regardless of tenure). For example, an agreement providing one week per year of service for a 5-year employee earning $1,200/week gross would result in $6,000 gross redundancy payment. In addition to any contractual redundancy payment, you are always entitled to: your final salary or wages up to the last day worked; any outstanding annual leave; and pay in lieu of notice (or you work out the notice period). Source: Employment New Zealand — Redundancy Entitlements (employment.govt.nz).

In New Zealand, the notice period for redundancy is whatever is specified in your employment agreement — there is no separate statutory minimum notice period for redundancy specifically, though the Employment Relations Act 2000 requires that a notice period be included in all employment agreements. Typical notice periods in NZ range from one to four weeks for most roles, with longer periods for senior positions. If your agreement does not specify a notice period, a 'reasonable' notice period is implied, which courts have generally interpreted as reflecting the nature of your role and length of service. During a redundancy process, your employer must also consult with you genuinely before making the redundancy decision final — you have the right to be told of the proposal, to provide feedback, and to have that feedback genuinely considered. Source: Employment New Zealand — Redundancy Process (employment.govt.nz).

In New Zealand employment law, redundancy and dismissal are legally distinct. Redundancy occurs when a position becomes surplus to requirements — the role itself is disestablished, usually for genuine business reasons such as restructuring, technological change, or economic pressure. The decision is about the position, not the performance of the person in it. Dismissal (specifically unjustified dismissal) occurs when an employer terminates an individual's employment for reasons related to their conduct or performance. If an employer uses a sham redundancy to remove an employee they simply want to get rid of, the employee may pursue a personal grievance for unjustified dismissal. Redundant employees generally cannot be directly replaced; if a materially similar role is created shortly after, this may indicate the redundancy was not genuine. Source: Employment New Zealand — Redundancy vs Dismissal (employment.govt.nz).