Earning $200,000 or more: what the new dismissal rules mean for redundancy

The rule

Employment NZ says the change took effect on 21 February 2026. For employees at or above the remuneration threshold, employers don't have to: follow a fair process (they can choose to), have a good reason for dismissal, give you information and a chance to comment before deciding, or provide a written reason if asked. Generally you can't raise a personal grievance for unjustified dismissal or related disadvantage, but you can for other reasons such as discrimination or harassment.

Still required: not misleading or deceptive conduct, being responsive and communicative, and giving notice as set out in the agreement (or reasonable notice if silent), except for serious misconduct.

How your income is counted

• Count PAYE income paid by the employer: salary, bonuses, overtime and cashed-in annual leave.
• Not counted: ACC earnings, certain reimbursements and fringe-benefit items.
• Use gross earnings for the previous 364 days (excluding the current pay period), counting only time in the position you're dismissed from. Divide by the days in that position and multiply by 364.
• The threshold is reviewed each July and changes only if average ordinary weekly earnings increases. Check the current figure at employment.govt.nz.

Transition for existing employees

For people already employed before the change, there's a 12-month transition. You can still raise these grievances if you were dismissed before 21 February 2027, were in the same job (or a restructured role) as before 21 February 2026, and raise the grievance within 90 days of dismissal. After the transition, grievances are unavailable unless you opt in. Renegotiating terms during the transition is separate from opting back in; get legal advice before renegotiating.

Opting back in

Both sides must agree, and it must be a written term of the employment agreement saying the threshold doesn't apply to you. All the protections return together: a fair process and full personal grievance rights. If you're negotiating a new job or a pay rise past the threshold, this is worth asking for.

What to do if you're being let go

• Read your contract for notice, bonus, share, long-service and redundancy terms. These contract rights still apply.
• Ask in writing for notice, final pay and bonus pro-rata. Contract claims for money owed are not blocked by the dismissal rule.
• Negotiate: payout, extended notice, garden leave, accelerated share vesting, outplacement, an agreed reference.
• Check restraints of trade and confidentiality clauses. At this level they are common and can matter (see the restraint guide).
• Get specialist advice. A one-hour employment lawyer consult is usually worth it at this income.