In New Zealand, there is no legally prescribed minimum notice period for employment termination. Instead, the notice period is typically established through the employment agreement between the employer and employee.

Employment Agreement

The most common scenario is for the notice period to be explicitly outlined in the individual employment agreement.

Fair and Reasonable Notice

If the employment agreement does not specify notice periods, then a "fair and reasonable" notice period must be provided by the terminating party, whether that be the employer or employee. This concept is based on several factors, including the length of service, the type of job, and industry standards.

Length of Service

Generally, longer service demands a longer notice period.

Type of Job

Managerial or specialized positions may require a longer notice period to allow for a smooth handover of duties.

Industry Standards

Common practices within the specific industry can influence the fairness of a notice period.

Determining a Fair and Reasonable Notice Period

While there's no set formula, some benchmarks can guide the determination of a fair and reasonable notice period:

• 1-2 weeks: This is often considered fair for employees with a short tenure (less than two years).
• 4 weeks: This is a common notice period for employees with a longer tenure (more than two years).

Exceptions to Notice Periods

There are limited situations where notice periods might not apply:

• Serious Misconduct: If an employee is dismissed for serious misconduct, they may be dismissed without notice and without receiving pay for the notice period.

In New Zealand, severance pay, also known as redundancy compensation, is not a legal requirement. This means an employee's entitlement to severance pay depends solely on certain factors.

Employment Agreement

If the employment agreement contains a redundancy clause explicitly outlining severance pay entitlement, the employer is obligated to abide by that clause. These clauses generally cover:

• Criteria for eligibility: Circumstances that trigger severance pay.
• Amount of severance pay: Could be a lump sum, salary/wage continuation for a defined period, or a combination.
• Other benefits: Potentially include relocation support, outplacement services, etc.

Absence of a Redundancy Clause

In situations where there's no redundancy clause in the employment agreement, an employee is generally not entitled to severance pay.

Exceptions

Even without a redundancy clause, there may be instances when an employee could be considered entitled to some form of compensation:

• Unjustified Dismissal: If an employee is unjustifiably dismissed on the grounds of redundancy, they may be entitled to compensation as a remedy.
• Implied Term: In rare cases, a long history of severance payments within the organization or industry may establish an implied term in the employment agreement.

In New Zealand employment law, termination can be broadly divided into different scenarios. This includes termination by the employer, termination by the employee, termination during a trial period, and unjustified dismissal.

Termination by the Employer (Dismissal)

Justifiable dismissal requires an employer to have valid grounds to dismiss an employee. These grounds can include misconduct, performance issues, incapacity, and redundancy.

Regardless of the reason for dismissal, employers must follow a fair procedure. Elements typically include clear communication of the reason for dismissal, an opportunity for the employee to provide their perspective, consideration of any mitigating factors, and a written decision.

Termination by the Employee (Resignation)

The employee is required to give the notice period as per their employment contract or a fair and reasonable period if not stipulated. While not compulsory, best practice involves a formal resignation letter with the effective date.

Termination During Trial Period

Employment agreements may contain a trial period (up to 90 days), allowing either party to terminate with shorter notice without needing to demonstrate a specific reason. However, dismissals must still be undertaken in good faith.

Unjustified Dismissal

If an employee believes their dismissal was unfair or unjustified, they have 90 days to raise a personal grievance with the Employment Relations Authority.