{"id":206771,"date":"2021-06-23T16:10:46","date_gmt":"2021-06-23T03:10:46","guid":{"rendered":"https:\/\/legalvision.co.nz\/?p=206771"},"modified":"2021-07-14T20:08:37","modified_gmt":"2021-07-14T07:08:37","slug":"offer-redundancy-pay","status":"publish","type":"post","link":"https:\/\/legalvision.co.nz\/employment\/offer-redundancy-pay\/","title":{"rendered":"Should Your New Zealand Business Offer Redundancy Pay?"},"content":{"rendered":"\n

Redundancies<\/span><\/a> and <\/span>serious restructures<\/span><\/a> are always hard for businesses, as they are for affected employees. During a redundancy, <\/span>compensation can help soften the blow<\/span><\/a> for the employee<\/span>. <\/span>It can also be a helpful tool when a business is seeking voluntary redundancies. <\/span>In New Zealand<\/span>, businesses are not legally required to pay redundancy. However, this is subject to an applicable employment agreement<\/span>. Nonetheless, it can be a great thing for businesses to consider.\u00a0This article will set out if and when businesses are legally required to offer redundancy pay<\/span>, and the circumstances when you might pay it anyway.<\/p>\n\n\n\n

Do You Legally Have to Offer Redundancy Pay in New Zealand?<\/h2>\n\n\n\n

Employers do not have to legally pay workers redundancy pay <\/span>in New Zealand. In many circumstances, f<\/span>ollowing redundancy, an employee may not be paid any money beyond their final pay. However, this depends on the employment agreement that is applicable in the situation. H<\/span>owever, many collective agreements include compensation for redundancies<\/span>. <\/span>This agreement will apply if the employee is part of the collective agreement. <\/span>Furthermore, sometimes employment agreements also will include a provision for redundancy pay<\/span>. This is particularly if most employees in the organisation are part of a collective agreement.<\/span><\/p>\n\n\n\n

However, New Zealand businesses d<\/span>o not need to offer redundancy pay outside the exceptions. This is an example where employment law in New Zealand differs from other jurisdictions around the world.<\/span><\/p>\n\n\n\n

Should Your Business Offer Redundancy Pay Even if Not Required To?<\/span><\/h2>\n\n\n\n

It may seem counterintuitive for a business to offer redundancy pay when there is no legal requirement to do so<\/span>. However, this can be a great thing to consider. A<\/span> business may want to reward a highly valued employee. Or a business may want to thank someone who has spent a long period of service with the business. This kind of proactive approach has a range of benefits, including: <\/span><\/p>\n\n\n\n