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Process
Each listed firm's approach to determining severance pay involves a meticulous, three-stage process. First, we conduct a detailed review of your individual employment agreement, any applicable collective agreement, and your employment history. We then analyse the reason for termination—whether it's redundancy, restructuring, or dismissal—against the relevant provisions of the Employment Relations Act 2000 and case law. A key factor is the length of continuous service; for instance, an employee with over five years of service may have a stronger claim for a higher redundancy payment based on established expectations of job security. Finally, we assess any mitigating factors, such as age or re-employment prospects, to build a robust case for your entitlement. For a deeper understanding of your rights upon termination, our guide on What To Do When You Get Fired provides essential first steps.
At a Glance
| Parameter | Reference Value |
|---|---|
| Primary Calculation Factors | Length of service, employment agreement terms, reason for termination |
| Common Review Period | Initial case assessment within 2-3 business days |
| Governing Legislation | Employment Relations Act 2000, Holidays Act 2003 |
| Typical Negotiation Timeline | 2-6 weeks from engagement to resolution |
Local Considerations — New Zealand
Severance pay calculations in New Zealand require an understanding of both national law and regional economic contexts. While the Employment Relations Act applies uniformly, practical outcomes can be influenced by local industry norms, particularly in major employment centres like Auckland, with its diverse corporate and tech sectors, and Wellington, the heart of public service. The economic profile of a region—such as the manufacturing focus in parts of the South Island—can affect the standard redundancy packages offered by employers. Our national team is adept at navigating these regional nuances, ensuring our advice is not only legally sound but also pragmatically attuned to the specific market conditions our clients face in cities like Christchurch and Hamilton.
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Standards & Compliance
- Employment Relations Act 2000
- Holidays Act 2003
- Good Faith obligations under Part 1 of the ERA
- Relevant Employment Court and Authority case law precedents
Frequently Asked Questions
What is the legal basis for severance pay in New Zealand?
There is no statutory formula for severance or redundancy pay in New Zealand. Entitlement primarily stems from the terms of the individual or collective employment agreement. The Employment Relations Act 2000 mandates that parties must deal with each other in good faith, which includes providing a fair and reasonable redundancy process, which may involve compensation.
How does my length of service affect my severance payment?
Length of continuous service is a fundamental factor. It establishes your contribution and, often, the reasonable expectation of ongoing employment. While not a strict multiplier, longer service typically supports a claim for a more substantial ex gratia or redundancy payment, especially if the employment agreement is silent but industry practice or company history sets a precedent.
What is the difference between severance pay and notice period pay?
They are distinct entitlements. Notice period pay compensates you for the working time between notification of termination and your final day, as stipulated in your agreement or law. Severance or redundancy pay is a separate compensation for the loss of your job, often calculated based on service and terms, and is paid in addition to any outstanding notice pay or accrued holidays.
How much does it cost to get advice on severance pay calculation in New Zealand?
The cost for legal advice on severance pay depends on the complexity of your case, the volume of documentation to review, and whether negotiation or mediation is required. For a straightforward review and letter of advice, costs are typically contained. We provide transparent fee structures after an initial assessment and encourage you to request a specific proposal tailored to your situation.