Before terminating an employee, an employer must have a good reason for dismissal, such as:
- Repeated misconduct
- Performance-related issues
- Trial period* (does not require a reason)
- Serious misconduct**
Employees have the right to request a written statement covering the reasons for dismissal within 60 days of being terminated (verbal explanation for employees on a trial period). Employers must respond within 14 days. Employers may choose to pay instead of having the employee work their notice period if both parties agree or if covered in the employment agreement.
Employees dismissed due to serious misconduct do not work their notice period nor get paid for it.
Employers must be de-registered by the employer once employment ends. The employee's final pay should include the hours worked since the last pay date, payment for annual holidays, and any additional owed payments (sick pay leave is not mandatory). Employees should receive their final pay on their last day or the payday for their final employment period at the latest.
Before terminating an employee (except in cases of gross misconduct and redundancy), employers must have a good reason and are required to follow a fair grievance procedure in good faith that involves:
- In case of unsatisfactory performance or misconduct, making the employee aware of concerns through a written warning and allowing them to improve or tell their side of the story. The letter must be a clear warning, outlining what will happen if nothing changes and be understood by the employee
- To ensure fairness, before making a decision, the employer should have all of the facts that could reasonably be gathered, hear out the employee's response to those facts, and must carry out a thorough investigation
- If an employee has been warned previously, the employer may choose to dismiss them or give a further or final written warning
- Allow the employee to be accompanied by a support person for any discussion relating to the dismissal
- Allow the employee to respond
Employees are protected from being terminated for whistleblowing, being pregnant or part of a union and taking or requesting parental leave. Furthermore, employers must act in good faith, have a good reason, follow a fair process and be openminded when dealing with problems to ensure outcomes are not pre-determined.
Protected employees unfairly dismissed can take personal grievance claim against the employer.
Employers cannot make someone redundant without going through the workplace change process first. Redundancy pay is not mandatory in New Zealand, and employees are only entitled if it's mentioned in their employment contract.
An employee can resign at any time. The resignation process starts with the employee notifying their employer and handing in their notice. They have to respect the notice period agreed on the contract, if any, unless both parties agree otherwise. Resignation doesn't have to be done in writing; however, it is recommended.
At the end of the notice period, the employee must return all company property, and the employer might include an exit interview.
Other End of Employment Guidelines
New Zealand doesn't have a statutory requirement on the length of notice periods in employment agreements, which varies from company to company. The only requirement stipulated by law is that it should be a reasonable period, and it should be in writing. Commonly, the notice period is four weeks (1-2 weeks for someone on a trial period). Immediate dismissal is permissible under serious misconduct, and the employer is not required to pay any notice.
Severance pay is not mandatory in New Zealand, and employees are only entitled if it's mentioned in their employment contract.