What to ask when facing redundancy in New Zealand
Being made redundant can be a shock, leaving you feeling uncertain about your future. Understanding your rights and having clear information from your employer is crucial during this difficult time.
Unemployment can be a stressful experience, but asking the right questions when being made redundant helps to give you control of the situation and protect your interests. Remember, you have rights as an employee, and your employer has obligations.
Ronil Singh, director at Robert Half New Zealand and specialised recruiter with almost two decades of experience says "Unfortunately, redundancies have occurred for multiple reasons over the last five years and continue to impact Kiwi businesses. Redundancy can knock people's confidence, but it's important to remember that you’re not alone and there are resources to help. While it can be a shock, taking a structured approach that maximises the time and resources available to you can put you in the best position to turn a redirection into a positive stepping stone.
From an administrative standpoint, it is important to document everything and to check the redundancy procedure against New Zealand government or union resources to ensure you are being fairly treated. When in doubt, these same organisations can provide additional support or you can consider seeking legal advice if necessary.
When navigating the career transition, the most important tool at your disposal is a strong support network, both within the organisation you are leaving and amongst your social and professional communities. While redundancy can feel personal, it is a part of many peoples career story and those around you can support you emotionally and to find your next step."
When it comes to redundancy, or your career in general, knowledge is power. Understanding the number of people impacted by the redundancy is an important first question to ask when being made redundant as it establishes what is required of the employers requirements and can help you to advocate for your rights.
When a single employee or a small number of employees are made redundant, it's considered an individual redundancy. The employer typically follows the standard redundancy process outlined in the Employment Relations Act 2000. This includes:
Consultation with the employee
Offering redeployment opportunities if possible
Providing notice
Considering redundancy pay if possible
When 20 or more employees are made redundant within a 90-day period at the same establishment, it's considered a collective redundancy. In addition to the individual redundancy process, employers must follow specific procedures under the Employment Relations Act 2000, including:
Early and meaningful consultation with employees and their representatives (e.g., unions)
Exploring alternatives to redundancy
Providing information about the reasons for redundancy and the number of employees affected
Considering redundancy pay and other entitlements
The first step in a smooth redundancy is understanding your off-ramp. That is, having clarity on the redundancy process by asking about key milestones and deadlines. Understanding the timeline allows you to plan your next steps effectively.
Within the first days of being made redundant, you should have a confirmation of your final working day, and details on any redundancy pay packages you will receive up to and beyond your final working day. Other useful information to confirm is the communication channels, the scope of the redundancy, and any further obligations the organisation must fulfil as part of your departure.
Related: Redundancy can be a shock. Here is what to do after you’ve received the news
As part of the redundancy plan, many companies will make select support services available to employees. When being made redundant, questioning what resources are available can help you manage the emotional impact, develop job search strategies, and understand your legal rights.
Common support resources may include career counselling to assist with resume writing, interview preparation, and job search strategies and legal guidance on employment rights, redundancy pay, and other legal matters related to job loss.
Other internal resources to inquire about are those that are pre-existing within the company, for example for how long you can extend your access to any learning and development tools to assist with training and reskilling up to and beyond your employment ending.
Other services, provided internally or through a third-party provider, can extend to financial counselling including potential benefits, entitlements, and financial planning options and access to mental health resources to address emotional challenges associated with redundancy.
Finally, it can be helpful to understand what outplacement services are available to assist your job search looking ahead. As part of the career counselling support, some employers may provide access to job search workshops, and relevant job boards. It is also advisable to reach out to an external recruitment
Related: Working with a recruiter can be a helpful resource when navigating redundancy. Here is how we work with jobseekers
The more information, clarity, and access to support you can gain between finding out you have been made redundant and your final day, the better equipped you will be for the next step. Establishing clear communication channels with your employer is a vital part of a streamlined redundancy process, so it should be one of the first questions you ask when being made redundant.
Understand how you will receive official updates and how to raise questions or concerns. While some organisations may encourage direct contact with your team and/or hiring manager, while others will maintain a clear distinction as a form of risk management.
By asking for clarification on the selection criteria, you are taking a proactive step to understand the process and protect your rights. The specific criteria can vary depending on the company, industry, and the reasons for redundancy.
Some common examples include performance reviews, failure to meet set targets, attendance records, length of service and/or terms of employment, and relevance of skills and qualifications. How these criteria are evaluated is dependent on the organisation and the reason behind the redundancy. Common examples of redundancy include financial issues like company underperformance, budget issues or a challenging macroeconomic climate. Other driving factors may be business transformation issues like the merger of acquisition of the company, and the rescoping or downsizing of team function, or technological change that reframes the need for certain roles.
Understanding this helps ensure that the selection process is fair and unbiased. The employer should be able to provide evidence of how the criteria were applied, demonstrate that the redundancy was based on objective, measurable considerations, and was applied consistently to all employees in the selection pool. In certain cases, understanding the rationale - or lack thereof - can help employees identify potential grounds for appeal.
Recommended: Want to understand the New Zealand job market in more detail? Download the Robert Half Salary Guide to find out
Obtaining detailed information about your notice period and how your redundancy pay will be calculated is essential for financial planning during this transition.
While it can vary greatly between organisations, there are typically five models of redundancy pay. Firstly, meeting the statutory baseline payment based on length of service and weekly earnings, or the baseline payment with the addition of the enhanced amount applied across all redundant parties. These can be combined with a severance payment, which is a lump sum payment provided in lieu of notice.
Other payments - often extended to those in senior roles - could include ex-gratia discretionary payments made on an individual basis or a salary continuation in which the employee will receive their salary for a specific period after termination.
A helpful question to ask when being made redundant is whether the company will provide a positive reference or letter of recommendation. A strong reference can be invaluable in your job search by bringing your skills and experience to life, and in the case of redundancy, it is a clear proof point that your motivation for seeking a new role or a temporary career break is due to extenuating circumstances.
If the company does not intend to provide references, it is always advisable to speak directly to individuals within the organisation who you have worked closely with to understand if they are willing to assist on a personal basis.
Related: Ready to begin your job search? Check out our top tips here
While redundancy can be a setback, it can also be an opportunity for new beginnings. Asking the right questions when being made redundant can help to pave a clearer exit path, calm nerves, and equip you to focus your strengths and transferable skills on a new career path.
Our experienced team of talent specialists are here to help.
Can I refuse redundancy?
Understanding the option to refuse redundancy clarifies legal rights, and opens up the conversation around alternatives such as reduced work hours or job description changes.
What is the process for being made redundant?
Breaking down the redundancy steps can not only make a challenging period clearer and more manageable, but it can also help to plan your own next steps with more certainty.
How do I deal with being made redundant?
Speaking to someone familiar with the redundancy process means they may be equipped with additional tips, recommendations or resources to aid your individual redundancy path.
