Redundancy Rights for Parents: The Complete New Zealand Guide

Understanding your redundancy rights for parents in New Zealand is essential when navigating workplace changes, as the law provides specific protections under the Employment Relations Act 2000 and the Parental Leave and Employment Protection Act 1987 to ensure that parents are not unfairly targeted during restructuring.

Redundancy is a daunting prospect for any employee, but for parents—whether they are currently working, pregnant, or on parental leave—it introduces a complex layer of legal and financial anxiety. In Aotearoa, the law emphasizes the principle of “good faith,” requiring employers to be communicative and transparent.

Redundancy Rights for Parents: The Statutory Foundation

In New Zealand, there is no single “Redundancy Act.” Instead, your rights are woven through several pieces of legislation. The primary source of truth is the Employment Relations Act 2000. This act mandates that any redundancy process must be both procedurally fair and substantively justified.

For parents, this means that an employer cannot simply decide to eliminate a role because a parent requires flexible working hours or has been absent on leave. The focus must strictly be on the role itself, not the person occupying it.

“The test in New Zealand law is whether the employer’s actions were what a fair and reasonable employer could have done in all the circumstances at the time the redundancy occurred.”

• Procedural Fairness: Providing information, allowing for feedback, and considering alternatives.
• Substantive Justification: Proving that the role is truly surplus to the business requirements.
• Good Faith: Both parties must be active and constructive in maintaining the relationship.

Can You Be Made Redundant While on Parental Leave?

This is perhaps the most frequent question regarding redundancy rights for parents. Under the Parental Leave and Employment Protection Act 1987, there is a legal presumption that an employee’s job is kept open for them while they are on leave. However, there are two major exceptions.

The “Key Position” and “Redundancy” Exceptions

An employer can legally terminate a role while a parent is on leave if a redundancy situation arises that leaves no reasonable alternative. The employer must still follow the full consultation process. This means they must contact the employee on leave, provide them with all relevant information, and allow them to participate in the consultation as if they were present in the office.

Failure to include an employee on parental leave in a restructuring consultation is a common ground for a personal grievance claim. The employee must be given the same opportunity to provide input as their colleagues who are currently at work.

What Qualifies as a Genuine Redundancy for Parents?

A redundancy is only “genuine” if the position itself is no longer needed. In the context of redundancy rights for parents, the employer must demonstrate that the decision is based on commercial or operational grounds, such as a downturn in business, a change in strategy, or a merger.

If the employer hires someone else to do essentially the same job shortly after the parent is made redundant, this is likely an “unjustifiable dismissal.” Parents are protected from being singled out for redundancy due to their status as caregivers.

• Commercial Justification: Financial records must support the need to cut costs.
• Structural Change: Evidence that the business is moving in a direction where the role is obsolete.
• Transparency: All selection criteria must be shared with the affected parent.

Selection Criteria and Potential Discrimination

When a company is downsizing, they often use a “matrix” to decide who stays and who goes. This is a high-risk area for redundancy rights for parents. If the criteria include “recent productivity” or “flexibility to work overtime,” parents may be unfairly disadvantaged.

Under the Human Rights Act 1993, it is illegal to discriminate against an employee based on their family status. If the selection criteria indirectly target parents, it may be deemed discriminatory. For example, penalizing someone for having a gap in their performance record due to parental leave is a breach of New Zealand law.

Employers should use objective criteria such as length of service (though this can also be problematic), specific skills, or past performance reviews that exclude the period of parental leave. The goal is a level playing field.

Financial Support and WINZ Entitlements

In New Zealand, unless it is specified in your employment agreement, there is no legal requirement for an employer to pay a redundancy “payout” or compensation. This can be a shock for many parents. However, if you are made redundant, you may be eligible for support through Work and Income (WINZ).

The “Redundancy Support” package from WINZ can include the Jobseeker Support payment. It is important to note that if you receive a redundancy payout from your employer, this may affect when your benefit payments begin. You must report any lump sum payments to WINZ immediately.

Furthermore, if you are currently receiving Parental Leave Payments from Inland Revenue (IRD), these payments usually continue even if you are made redundant, as they are based on your prior work history rather than your current employment status.

Key Takeaways for NZ Parents

• Consultation is Mandatory: You must be included in restructuring talks, even if you are on leave.
• Genuine Grounds: The redundancy must be about the role, not your performance or parent status.
• Review Your Contract: Check for redundancy compensation clauses; they aren’t automatic in NZ.
• Personal Grievance: You have 90 days to raise a personal grievance if you believe the process was unfair.
• Check IRD/WINZ: Ensure your parental leave payments or benefit eligibility are understood.