New Zealand's labour market is ugly.

Unemployment reached 5.6 percent in the June 2026 quarter, up from 5.4 percent three months earlier. Around 171,000 people were unemployed, while the broader underutilisation rate climbed to 13.8 percent. At the same time, businesses remain under pressure. Companies Office figures show 710 liquidator appointments in the June quarter, 4.9 percent more than the equivalent period last year and 12.9 percent more than in 2024.

Restructuring, cost cutting and redundancy are therefore hardly surprising.  What is surprising is how often employers still appear to misunderstand one of the most basic principles of New Zealand employment law:  Having a genuine reason to make someone redundant does not automatically make the redundancy lawful.

Two Employment Relations Authority determinations issued within days of each other in August make the point unusually clearly.  In both cases, the Authority accepted that the businesses had genuine commercial reasons to restructure.  In both cases, the employers still got the process wrong.  And in both cases, they had to pay for it.

A Genuine Redundancy Can Still Be An Unjustified Dismissal

The starting point is relatively simple.

Employers are entitled to restructure their businesses. Courts and the Authority are not there to decide whether a particular commercial strategy was clever, efficient or likely to work.  But redundancy is still a dismissal.

Section 103A of the Employment Relations Act 2000 requires the employer's actions, and the way in which the employer acted, to be what a fair and reasonable employer could have done in all the circumstances.

Good faith obligations under section 4 also matter. Employees affected by a proposed restructure generally need sufficient information to understand what is being proposed, a meaningful opportunity to respond, and genuine consideration of that response before a decision is made.

Employment New Zealand describes redundancy as a last resort and says employers must follow a fair and proper process and explore redeployment options.  None of this is particularly new.  Yet the latest decisions suggest employers are still confusing consultation with notification.

Landpower Had A Real Financial Problem

Belinda de Zwart v Landpower Group Limited is particularly striking.

Ms de Zwart had worked for Landpower since 2021 and was its General Manager People and Culture. By the time her employment ended, her base salary was $291,250 and she sat on the company's Group Leadership Team.  Landpower was facing real financial pressure.

The Authority accepted evidence that agricultural machinery sales had fallen after the post-Covid boom and that cashflow was tightening. Its board sought approximately $9 million in cost reductions, and the People and Culture function became part of a wider restructuring exercise.

The Authority did not find that the restructure was invented as a device to get rid of Ms de Zwart.

That it certainly relevant.  Landpower won the argument that many employers seem to regard as the whole case: the commercial justification was genuine.  However, it still lost on process.

Consultation Cannot Be A Charade

The problems began before Ms de Zwart was formally told that her position was proposed for disestablishment.  Landpower's chief executive had already taken a restructuring proposal to the board. An external consultant later described that proposal as essentially fully formed.  A significant board paper supporting the proposed restructure was not given to Ms de Zwart during consultation. It was eventually disclosed after proceedings began.

The Authority found that Landpower should either have consulted Ms de Zwart earlier about the proposal or, at minimum, provided her with the board paper once the proposal had been endorsed for consultation.  The Authority returned to the established principle that consultation must be real.

An employer may enter consultation with an idea or preferred plan. It does not have to enter the room devoid of opinions.

But it must still be capable of changing its mind.

In Ms de Zwart's case, Authority Member David Beck found the consultation had been unnecessarily rushed, that a reasonable request for additional time was refused and that Landpower was insufficiently candid about what it actually intended to do with the strategic functions of her role.

Most damningly, the Authority described the consultation as involving only "surface" consultation, with little genuine consideration of alternatives.  That is the distinction employers repeatedly miss.

A meeting at which management explains a decision is not consultation merely because the word "proposal" appears somewhere in the PowerPoint.

Redeployment Means Actually Looking

Landpower also fell down on redeployment.  A vacant General Manager role existed in eastern Australia.  It was not offered to Ms de Zwart.

More remarkably, the evidence showed that neither the chief executive nor the consultant had reviewed her CV when considering possible redeployment.  The chief executive conceded that he had not even contemplated Ms de Zwart for the Australian position and that the process should have been more thorough.

The Authority found that Landpower had failed to actively and constructively explore alternatives to ending the employment relationship.  It also criticised the failure to explore a possible transitional role and the decision to terminate the relationship through payment in lieu of notice rather than allowing Ms de Zwart to complete professional obligations and leave in a more dignified manner.

The conclusion was blunt.  The commercial reasons for restructuring were genuine.  The process was nevertheless rushed and muddled, the consultation inadequate and the exploration of redeployment insufficient.

Landpower was ordered to pay $20,000 compensation for humiliation, loss of dignity and injury to feelings.

Then A Small Employer Made Almost The Same Mistake

The next day, the Authority issued LUO v BAZ.  The names of the parties are anonymised under a non-publication order, which should be respected. The Authority describes BAZ only as a small predominantly online wholesaler with two directors actively involved in its daily operations.

Again, there was a genuine commercial problem.  BAZ had lost wholesale revenue and faced significant financial pressure. The Authority accepted there was a genuine and pressing reason for the company to consider reducing labour costs and restructuring.

Again, that was not enough.  The consultation process was largely verbal.  There was no detailed written restructuring proposal.  There were no notes of an important meeting.  No proper timeframe was given.  Relevant financial information was not supplied.

Most remarkably, LUO was not clearly told that her own job was actually at risk until the redundancy decision arrived.  The Authority described the process as piecemeal.  That description should probably be pinned to the wall of every office where somebody proposes doing a redundancy "informally".

You Cannot Make Someone Redundant And Then Advertise Their Job Back To Them

BAZ also created a new Digital and Customer Service Manager position.  LUO was invited to apply.  There was just one problem.  The Authority compared the old and new position descriptions and found very little material difference between them.

The employer itself accepted LUO could have performed the new role and that she probably would have obtained it.  The Authority could therefore see no justification for requiring her to compete for what was, substantively, much the same job.

Where substantially the same work continues and the existing employee is capable of performing it, changing the job title and conducting a recruitment exercise does not magically solve the redundancy problem.  The Authority held that BAZ's restructure was substantively genuine but procedurally deficient. The defects were not minor and LUO had effectively been blindsided.

Her unjustified dismissal claim succeeded.  BAZ was ordered to pay $11,000 compensation.

Big Employer, Small Employer, Same Law

The juxtaposition is useful.  Landpower was described by the Authority as a well-resourced organisation. It engaged an external consultant.  BAZ was a small employer with limited resources.  Both nevertheless failed at fundamentally similar points.

Landpower's process became too advanced before meaningful consultation occurred and it did not properly explore redeployment.

BAZ's process was too informal, poorly documented and failed to tell an employee clearly enough what was actually proposed.  One employer had extensive organisational resources.  The other did not.  Neither gets an exemption from good faith.

The resources available to an employer are relevant when assessing what a fair and reasonable employer could have done, but the basic obligation to deal fairly with an employee does not disappear because a company is small. The Authority expressly said BAZ's process was demonstrably unreasonable even for a small employer with limited resources.

The Most Common Redundancy Mistake

There is an understandable reason this keeps happening.  Management identifies a financial problem.  It works out a solution.  The board approves the solution.  Someone then remembers that employees need to be "consulted".

By that point, psychologically if not formally, the decision has already been made.  The consultation becomes an exercise in defending the preferred outcome rather than genuinely testing it.  That is precisely where the legal danger begins.  A genuine business problem does not excuse predetermination.

Nor does saying "nothing has been finally decided" cure a process where every meaningful decision has already occurred behind closed doors.  Proper consultation means the employee must have a realistic possibility of influencing the outcome.

If the answer to every proposal from the employee is effectively "no, because management has already decided how this needs to work", consultation has become theatre.

Redeployment Is Not A Job-Search Courtesy

The second recurring mistake concerns redeployment.  Employers sometimes behave as though their obligation is satisfied by sending the employee a link to the vacancies page.  It is not.

Employment New Zealand's current guidance says employers must explore redeployment options and, where an employment agreement is silent, must still consider available redeployment and offer it where appropriate.  That necessarily involves curiosity.  What can this employee do?  What vacant roles exist?  Could the job be modified?  Could another arrangement preserve employment?

Is a newly created position sufficiently similar that appointment, rather than competitive recruitment, is appropriate?   Landpower apparently did not check the CV of a senior executive before ruling out possible redeployment.  BAZ created a substantially similar job and invited the redundant employee to apply for it.

They are different versions of the same conceptual error: treating redeployment as something the employee must discover or win rather than something the employer must genuinely consider.

Economic Pressure Does Not Suspend Employment Law

The present economic climate makes all of this more important, not less.  When unemployment is rising and businesses are struggling, more employers will inevitably consider cutting positions.  There is also considerably more at stake for the employee.

Losing a job when unemployment is low and vacancies are plentiful is one thing. Losing it into a labour market with 171,000 unemployed people and 13.8 percent underutilisation is another.  That does not mean an employer must preserve a job it genuinely no longer needs.

It means that if the employer is going to take someone's livelihood away, it should at least get the law right.  The lesson from these two new determinations is not complicated.  A real downturn can justify considering redundancy.  A genuine restructure can justify removing positions.  A board can make difficult commercial decisions.

But none of those things dispense with consultation, good faith or redeployment.  "We genuinely needed to save money" is the beginning of a lawful redundancy analysis.  It is not the end of one.

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References

• Belinda de Zwart v Landpower Group Limited [2026] NZERA 513.

• LUO v BAZ [2026] NZERA 549.

• Grace Team Accounting Ltd v Brake [2014] NZCA 541, [2015] 2 NZLR 494.

• Employment Relations Act 2000, ss 4, 103A and 123.

• Employment New Zealand, Redundancy and Workplace Change Process.

• Stats NZ, Labour Market Statistics: June 2026 Quarter.

• New Zealand Companies Office, Latest Company Statistics, updated 10 August 2026.