Getting redundancy support
Making someone redundant can be a difficult and upsetting process. It isn’t pleasant, but you can make the process easier by supporting your employees through the process.
If you think you may need to make some of your employees redundant, you have the option to get support from Work and Income.
They can provide support for your business and the employees, including making a financial contribution to wages and training. All discussions are confidential.
Make sure you follow the process for restructuring before you make someone redundant.
Process to make someone redundant
- Step01
Confirm the structure
You must confirm the final structure in writing to employees who are being made redundant. This letter should include:
- how much notice you’re giving them, as stated in their employment agreement
- the end date of employment
- whether they’ll receive any compensation, and if so, how much (as stated in their employment agreement)
- an offer to meet with them to discuss the outcome of the restructure process.
You could also include:
- an acknowledgement of their service to your company
- an offer to give them a reference, or act as a referee
- the option of letting them take some or all of their notice period to start looking for other work – you’ll pay them as usual, but they don’t need to come in to work.
- Step02
Meet to discuss the redundancy
You only need to do this if your employee asks for a meeting to discuss the restructure and redundancy. At this meeting, you should:
- allow them to bring a support person (this can be anyone from a partner or friend to a lawyer or union delegate)
- reconfirm the details of the letter
- answer any questions your employee might have.
- Step03
Making the transition easier
There are ways to make the redundancy easier for you and your employee in the lead up to them finishing. You can:
- offer to let them take their notice period off, and be paid as normal
- give them time off during the day to attend interviews for new roles
- get them help to decide what they want to do next, and to retrain for a new role outside of your business
- have a morning tea to celebrate and thank them for their time in the business.
Paid time for job hunting
Marama wants to take a new direction with her business, so she restructures her team. Phil’s role is to be made redundant. Marama offers to let Phil not work during the last two weeks of his redundancy notice period. Phil accepts.
Phil is grateful because he gets the satisfaction of completing critical tasks before those last two weeks – and he has time to get his CV ready and start applying for other jobs before being without pay.
On their last payday
On or before your employee’s last payday, you must:
- pay out any final pay owing
- pay any redundancy compensation, if it is included in their employment agreement
- give them a certificate of employment, if your employee wants one
- give them a final pay slip, if they want one.
Learn more about