FTC regulated: Yes

Valid reasons for FTC use: objective and material reasons

Remarks

See sec. 66 ERA on fixed-term employment:
- According to 66 ERA, an employee and an employer may agree that the employment of the employee will end:
(a) at the close of a specified date or period; or
(b) on the occurrence of a specified event; or
(c) at the conclusion of a specified project.
However, according to the ERA, the employer must have genuine reasons based on reasonable grounds for resorting to fixed-term employment and must advise the employee of when or how his or her employment will end and provide the reasons justifying it.
- Sec. 66(3) ERA provides that the following reasons are not genuine reasons:
(a) to exclude or limit the rights of the employee under the ERA
(b) to establish the suitability of the employee for permanent employment:
(c) to exclude or limit the rights of an employee under the Holidays Act 2003.

Maximum number of successive FTCs: no limitation

Remarks

No statutory limitations. However, the employer must have genuine reasons based on reasonable grounds for resorting to fixed-term (art. 66(2)a) ERA).

Maximum cumulative duration of successive FTCs: no limitation

Remarks

No statutory limitations. However, the employer must have genuine reasons based on reasonable grounds for resorting to fixed-term (art. 66(2)a) ERA).

% of workforce under FTC: 1

Remarks

Percentage of temporary workers, as of December 2012.
Note that temporary workers do not only cover fixed-term workers but also casual worker, temporary agency worker and seasonal worker.
Source: Survey of Working Life: December 2012 quarter - Hot Off the Press.
(Available at: http://www.stats.govt.nz/browse_for_stats/income-and-work/employment_and_unemployment/SurveyofWorkingLife_HOTPDec12qtr.aspx)

Maximum probationary (trial) period (in months): 3 months

Remarks

Note on terminology: The Law distinguishes between probationary and trial period. The term used in the Act is “Trial Period”. A “probationary period also exists but it is different than trial periods and doesn’t provide any duration requirements (see s 67).

Section 67 ERA - Probationary arrangements:
(1)Where the parties to an employment agreement agree as part of the agreement that an employee will serve a period of probation after the commencement of the employment,—
(a) the fact of the probation period must be specified in writing in the employment agreement; and
(b) neither the fact that the probation period is specified, nor what is specified in respect of it, affects the application of the law relating to unjustifiable dismissal to a situation where the employee is dismissed in reliance on that agreement during or at the end of the probation period.
(2) Failure to comply with subsection (1)(a) does not affect the validity of the employment agreement between the parties.
(3) However, if the employer does not comply with subsection (1)(a), the employer may not rely on any term agreed under subsection (1) that the employee serve a period of probation if the employee elects, at any time, to treat that term as ineffective.

Section 67A ERA - When employment agreement may contain provision for trial period for 90 days or less:
(1) An employment agreement containing a trial provision, as defined in subsection (2), may be entered into by an employee, as defined in subsection (3), and an employer.
(2) Trial provision means a written provision in an employment agreement that states, or is to the effect, that—
(a) for a specified period (not exceeding 90 days), starting at the beginning of the employee’s employment, the employee is to serve a trial period; and
(b) during that period the employer may dismiss the employee; and
(c) if the employer does so, the employee is not entitled to bring a personal grievance or other legal proceedings in respect of the dismissal.
(3) Employee means an employee who has not been previously employed by the employer.
(5) To avoid doubt, a trial provision may be included in an employment agreement under section 61(1)(a), but subject to section 61(1)(b).

See also: Section 67B ERA - Effect of trial provision under section 67A.

Obligation to provide reasons to the employee: Yes

Remarks

Any dismissed employee has the right to request a written statement indicating the reasons for the dismissal, within 60 days after the dismissal or within 60 days after the employee has become aware of the dismissal, whichever is the later. The employer shall provide such statement within 14 days after the request (art. 120 ERA).

Valid grounds (justified dismissal): any fair reasons

Remarks

The ERA provides for a remedy to any employee who has been "unjustifiably dismissed" (see sec. 103 and 123 ERA).

NEW: The Employment Relations Amendment Act 2010 (No. 125) which entered into force on April 1, 2011 modified the provision on 'the test of justification' for dismissal, which now reads as follows:
103A Test of justification
"(1) For the purposes of section 103(1)(a) and (b), the question of whether a dismissal or an action was justifiable must be determined, on an objective basis, by applying the test in subsection (2).
(2) The test is whether the employer's actions, and how the employer acted, were what a fair and reasonable employer could have done in all the circumstances at the time the dismissal or action occurred.
(3) In applying the test in subsection (2), the Authority or the court must consider:
(a) whether, having regard to the resources available to the employer, the employer sufficiently investigated the allegations against the employee before dismissing or taking action against the employee; and
(b) whether the employer raised the concerns that the employer had with the employee before dismissing or taking action against the employee; and
(c) whether the employer gave the employee a reasonable opportunity to respond to the employer's concerns before dismissing or taking action against the employee; and
(d) whether the employer genuinely considered the employee's explanation (if any) in relation to the allegations against the employee before dismissing or taking action against the employee.
(4) In addition to the factors described in subsection (3), the Authority or the court may consider any other factors it thinks appropriate.
(5) The Authority or the court must not determine a dismissal or an action to be unjustifiable under this section solely because of defects in the process followed by the employer if the defects were:
(a) minor; and
(b) did not result in the employee being treated unfairly."

[Prior to the 2010 amendment, sec. 103A read as follows: "the question of whether a dismissal or an action was justifiable must be determined, on an objective basis, by considering whether the employer's actions, and how the employer acted, were what a fair and reasonable employer would have done in all the circumstances at the time the dismissal or action occurred."

Case-law has established that a dismissal will not be considered unjustifiable if 1) there was a substantive reason (= good cause) for the dismissal and 2) the dismissal was carried out in a manner that is procedurally fair.
The substantive reasons that may justify a dismissal are normally restricted to:
* redundancy for genuine commercial reasons;
* reasons connected to the employee's lack of capacity for the work or performance on the job; or
* serious misconduct by the employee.


Prohibited grounds: marital status, pregnancy, maternity leave, family responsibilities, filing a complaint against the employer, race, colour, sex, sexual orientation, religion, political opinion, nationality/national origin, age, trade union membership and activities, disability, parental leave, participation in a lawful strike, raising occupational health and security concerns, ethnic origin

Remarks

See sec. 104 ERA prohibiting discrimination in employment which includes dismissal:

* on the prohibited grounds listed in sec. 105 ERA (sex, marital status, religious belief, ethical belief, colour, race, ethnic or national origins, disability, age, political opinion, employment status, family status, sexual orientation). Discrimination on such grounds is also prohibited under the Human Rights Act, 1993;

* on the grounds of involvement in the activities of a union. The statutory definition of involvement union activity includes trade union membership and also a number of grounds such as participation in a lawful strike, filing a complaint or participation in proceedings against an employer, submitting a personal grievance against an employer, taking an employment relations education leave;(sec. 107 ERA)

* on grounds of pregnancy and of a woman's state of health during pregnancy, and on grounds that a male or female employee intends to take parental leave or to assume the care of a child with a view of adoption. Dismissal of employees is also prohibited during parental leave and during 26 weeks thereafter. The dismissal of a pregnant employee is permitted if her state of health is materially affected by causes which are not related to pregnancy (sec. 49 of the Parental Leave and Employment Protection Act 1987);

* Another prohibited ground is listed in sec. 110A (1) (a), (2) and (6), in connection with sec. 89 of the Health and Safety at Work Act (2015), which prohibits the dismissal of a worker, who acts as, has been, or proposes to be a safety representative or a member of a health and safety committee or of a worker, who raises a health and safety issue or is taking, has taken, encourages requests or organizes to take to seek compliance by any person with a duty under the Health and Safety at Work Act.

Furthermore, Sec. 110A (1) (a) and (2) and sec. 89, 83, 84 Health and Safety at Work Act prohibit the dismissal of an employee, based on the employee's refusal to perform work likely to cause serious harm, or the refusal to perform work, which has been declared unsafe by a safety representative

Workers enjoying special protection: pregnant women and/or women on maternity leave, workers with family responsibilities

Remarks

As already stated, dismissal is prohibited on grounds of pregnancy and of a woman's state of health during pregnancy, and on grounds that a male or female employee intends to take parental leave or to assume the care of a child with a view of adoption. However, the employer is allowed to dismiss an employee for a substantial reason which is not related to the above-mentioned grounds.

There is a special protection against dismissal of a male or a female employee during parental leave and during 26 weeks thereafter: it is prohibited for the employer to dismiss them. However, this prohibition is not absolute: the dismissal will be lawful if the employer proves that he/she terminated the employee's employment on account of a redundancy situation of such nature that there was no prospect of the employer being able to appoint the employee to a position which was vacant and which was substantially similar to the position held by the employee at the beginning of the employee's parental leave.
(See sec. 49-52 of the Parental Leave and Employment Protection Act 1987)

Notification to the worker to be dismissed: no specific form required

Remarks

The ERA does not require that the dismissal notification be in writing. The form of the notification can be specified in an employment contract.
However, any dismissed employee has the right to request a written statement indicating the reasons for the dismissal, within 60 days after the dismissal or within 60 days after the employee has become aware of the dismissal, whichever is the later. The employer shall provide such statement within 14 days after the request (art. 120 ERA).

Notice period:

Remarks

No specific period of notice is required by statute. Notice requirement is a matter for contract. Where notice is specified under the contract of employment or under a collective agreement, failure to provide such notice will be treated as a factor evidencing an unjustified dismissal. Moreover, failure to give the requisite notice is also a breach of contract which is actionable by a claim for breach of contract or by arrears of wages claim. Where notice is not specified in the contract, the adjudicatory bodies will determine what constitutes reasonable notice in the circumstances.

tenure ≥ 6 months:

  • All: 0 months.

tenure ≥ 9 months:

  • All: 0 months.

tenure ≥ 2 years:

  • All: 0 months.

tenure ≥ 4 years:

  • All: 0 months.

tenure ≥ 5 years:

  • All: 0 months.

tenure ≥ 10 years:

  • All: 0 months.

tenure ≥ 20 years:

  • All: 0 months.

Pay in lieu of notice: No

Remarks

Pay in lieu of notice is not required by statute. However, pay in lieu of notice clauses can be stipulated in the employment contract.

Notification to the public administration: No

Notification to workers' representatives: No

Approval by public administration or judicial bodies: No

Approval by workers' representatives: No

Notes / Remarks

Notes

Although there are no statutory procedural requirements for individual dismissals in the ERA, an employer is required to adhere to the requirements of procedural fairness and reasonableness and the principles of natural justice in order for a dismissal to be justified.
Procedural fairness is assessed by the court on a case-by-case basis.

Definition of collective dismissal (number of employees concerned): No legal definition of collective dismissal.

Remarks

No definition of collective dismissal.
However, there is a generally accepted definition of redundancy which is derived from the Labour Relations Act 1987, and was later endorsed by the Courts. Redundancy means "a situation where [a] worker's employment is terminated by the employer, the termination being attributable, wholly or mainly, to the fact that the position filled by that worker is, or will become, superfluous to the needs of the employer".
(see "Restructuring and redundancy", Report of the Public Advisory Group on restructuring and redundancy, June 2008, p. 9, available in pdf format under "Scope of additional information" bellow)

Prior consultations with trade unions (workers' representatives): Yes

Remarks

Consultations requirement in the event of a collective dismissal derives from sec. 4 of the ERA which provides for a duty of good faith in the employment relationship.
This duty of good faith, amongst other things, requires an employer who is proposing to make a decision that will, or is likely to, have an adverse effect on the continuation of employment of 1 or more of his or her employees to provide to the employees affected (and any relevant union representative):
i) access to information, relevant to the continuation of the employees' employment, about the decision; and
(ii) an opportunity to comment on the information to their employer before the decision is made."
Section 4(4) ERA makes it clear that the duty of good faith extends to:
- consultation (whether or not under a collective agreement) between an employer and its employees, including any union representing the employees, about the employees' collective employment interests, including the effect on employees of changes to the employer's business;
- a proposal by an employer that might impact on the employer's employees, including a proposal to contract out work otherwise done by the employees or to sell or transfer all or part of the employer's business;
- making employees redundant.

Notification to the public administration: No

Notification to workers' representatives: Yes

Remarks

This duty of good faith, amongst other things, requires an employer who is proposing to make a decision that will, or is likely to, have an adverse effect on the continuation of employment of 1 or more of his or her employees to provide to the employees affected (and any relevant union representative):
i) access to information, relevant to the continuation of the employees' employment, about the decision; and
(ii) an opportunity to comment on the information to their employer before the decision is made."
Section 4(4) ERA makes it clear that the duty of good faith extends to:
- consultation (whether or not under a collective agreement) between an employer and its employees, including any union representing the employees, about the employees' collective employment interests, including the effect on employees of changes to the employer's business;
- a proposal by an employer that might impact on the employer's employees, including a proposal to contract out work otherwise done by the employees or to sell or transfer all or part of the employer's business;
- making employees redundant.

Approval by public administration or judicial bodies: No

Approval by workers' representatives: No

Priority rules for collective dismissals (social considerations, age, job tenure): No

Employer's obligation to consider alternatives to dismissal (transfers, retraining...): No

Priority rules for re-employment: No

tenure ≥ 6 months: 0 months

tenure ≥ 9 months: 0 months

tenure ≥ 1 year: 0 months

tenure ≥ 4 years: 0 months

tenure ≥ 5 years: 0 months

tenure ≥ 10 years: 0 months

tenure ≥ 20 years: 0 months

Redundancy payment:

tenure ≥ 6 months: 0 months

tenure ≥ 9 months: 0 months

tenure ≥ 1 year: 0 months

tenure ≥ 2 years: 0 months

tenure ≥ 4 years: 0 months

tenure ≥ 5 years: 0 months

tenure ≥ 10 years: 0 months

tenure ≥ 20 years: 0 months

Notes

There is no statutory severance pay or redundancy pay scheme in New Zealand. An employee is only entitled to severance pay or redundancy payment if it is so stipulated in the contract of employment or a collective agreement.

Compensation for unfair dismissal - free determination by court: Yes

Remarks

• There are no statutory limitations as to the amount of compensation to be awarded in the event of unfair dismissal.
Sec. 123 ERA provides that if the Employment Authority or Court determines that a dismissal was unjustified, it may provide for any 1 or more of the following remedies:
- reinstatement;
- reimbursement of the whole or any part of the wages lost as a result of the dismissal;
- compensation for humiliation, loss of dignity, and injury to the feelings of the employee; and loss of any benefit, whether or not of a monetary kind, which the employee might reasonably have been expected to have obtained had he or she not been dismissed.

Up-to-date figures for non-remuneration compensation are available at: https://www.employment.govt.nz/about/employment-law/compensation-and-cost-award-tables/

Reinstatement available: Yes

Remarks

The ER Amendment Act 2018 s 47 restores the pre-2010 provision and (from 11 December 2018) provides that:

“125 Reinstatement to be primary remedy
(1) This section applies ifu2014
(a) the remedies sought by, or on behalf of, an employee in respect of a personal grievance include reinstatement; and
(b) it is determined that the employee did have a personal grievance.
(2) If this section applies, the Authority or court must provide for reinstatement wherever practicable and reasonable, irrespective of whether it provides for any other remedy as specified in section 123.

Preliminary mandatory conciliation: Yes

Remarks

- The Ministry for Business, Innovation and Employment (MBIE) provides a Mediation services in order to help the employer and employee to resolve their dispute by mutual agreement. If the parties come to an agreement, once it is signed by the Mediator, it will be final and binding.
- In addition, the ERA provides for the duty of the Employment Relations Authority to consider mediation (sec. 159 ERA). That means that it shall first consider whether an attempt has been made to resolve the matter. However, according to sec. 159AA ERA, in case mediation is not requested by both parties, the authority should not refer the case to mediation, unless it considers the alleged breaches to be minor or it is satisfied that will be a cheaper and quicker way to clarify disputed facts or otherwise assist the authority in considering the matter. Before referring to mediation, the authority must also consider, whether it would contribute constructively to resolving the matter; or be in the public interest; or undermine the urgent or interim nature of the proceedings. (Based on the same considerations, when a case reaches the court, the court can also again consider on whether to refer the case to mediation, sec. 188 (2) and 188A ERA.)

Competent court(s) / tribunal(s): labour court

Remarks

- The ERA gives exclusive jurisdiction to the Employment Relations Authority, an independent body, to make determination about personal grievances, which amongst other things include unfair dismissal claims (sec. 161(1)e) ERA). This provision removed the possibility for employees to pursue a claim for wrongful dismissal under civil law.
- Either the employer or employee may challenge a determination of the Authority, within 28 days after the date of the determination, in the Employment Court.
A challenge may relate to the whole of the determination (in which case, there will be a de novo hearing) or be restricted to some limited aspect of a determination (sec. 179 and 187 ERA)

Existing arbitration: Yes

Remarks

The ERA reserves the possibility for the parties to resort to arbitration or other mediation services. (secs. 154 and 155 ERA)