Redundancy Consultation For One Employee In New Zealand: Process And Timeframes

If you’re a small business owner, making one role redundant can feel like a high-stakes decision. It’s rarely just a “business admin” task - it can affect your team culture, your budget, and your legal risk.

The good news is that running a strong redundancy consultation process is very doable, even when you’re consulting with only one employee. The key is to follow a fair process, communicate clearly, and give the employee a genuine opportunity to respond before any final decision is made.

In this guide, we’ll walk you through what the redundancy consultation process usually looks like in New Zealand when only one person is affected, what “good faith” consultation really means, and what timeframes are generally considered reasonable.

What Is A “Redundancy Consultation Process” In NZ?

A redundancy consultation process is the structured, good faith steps you take before deciding to disestablish a role (or make material changes to it) due to genuine business reasons.

In New Zealand, redundancy is not “automatic” just because your business is under pressure. Even if the business reasons are real, you still need a fair process. This sits under the broader duty of good faith in the Employment Relations Act 2000.

In practice, consultation means you:

• give the employee clear information about the proposed change (and why you’re considering it);
• give them a reasonable chance to seek advice and provide feedback;
• genuinely consider their feedback (with an open mind); and
• then make a final decision and communicate it properly (including any notice/termination obligations).

Even if you’re consulting with just one employee, you should still treat it as a formal process. Many personal grievance claims arise not because the redundancy wasn’t “real”, but because the consultation was rushed, unclear, or looked like a decision had already been made.

If you want a broader overview of redundancy obligations, it can help to read redundancy basics first, then come back to the detailed steps below: redundancy.

When Can You Make One Employee Redundant?

As a starting point, a redundancy needs to be genuine. That usually means the job is no longer needed for legitimate business reasons - not because of the employee personally.

Common small business reasons include:

• a downturn in sales or a lost contract;
• restructuring to remove duplication or change how work is done;
• budget constraints or cashflow pressure;
• changes in technology or systems reducing the need for a particular role;
• closing a department, location, or service line.

One-employee redundancy scenarios often happen where the employee is the only person in that role (for example, one office manager, one marketing coordinator, or one admin support role).

However, you should be careful if redundancy is being considered in a situation that’s really about performance or conduct. If you’ve got concerns about how the employee is doing their job, redundancy is usually not the right pathway (and can look like a “sham redundancy” if it’s used to avoid performance management).

Also, redundancy isn’t always the only option. Sometimes you may be able to change working arrangements instead - but changes still need consultation and agreement. For example, if you’re considering reduced hours, you’ll need to approach that carefully and follow a fair process: reducing staff hours.

Step-By-Step: Redundancy Consultation Process For One Employee

Below is a practical, small-business-friendly roadmap you can follow. The exact steps and documents may vary depending on your employment agreement, your workplace policies, and how significant the proposed change is - but this is the typical structure we recommend.

1) Get Clear On The Business Case (Before You Talk To The Employee)

Before you start consultation, make sure you can clearly explain:

• what is proposed (for example, “disestablishing the Office Administrator role”);
• why (for example, “reduced revenue and need to streamline admin”);
• what happens to the work (redistributed, automated, outsourced, removed); and
• what options you have considered (cost saving alternatives, redeployment, reduced hours, etc.).

This step matters because if you can’t explain the rationale clearly, the consultation can become confusing, and the employee may reasonably assume the decision is personal or predetermined.

2) Check The Employment Agreement And Any Policies

Many employment agreements include redundancy or restructuring clauses, including requirements about notice, consultation, or severance (if any). Your obligations will often be guided by what’s in the agreement, as long as it meets minimum legal standards.

Make sure you review the Employment Contract terms before taking any steps - particularly around notice periods, consultation expectations, and any redundancy compensation wording.

3) Provide A Written Proposal And Invite Feedback

The heart of a lawful redundancy consultation process is that you provide the employee with a clear proposal before the decision is final.

Your written proposal should usually include:

• the business reasons for the proposed redundancy;
• what role is affected and the proposed effective date (if the decision is confirmed);
• any alternatives you’ve considered so far;
• an invitation for the employee to provide feedback, suggest alternatives, and ask questions;
• a statement that no final decision has been made.

Tip: Keep the language practical. You’re not trying to “prove a legal case” - you’re trying to clearly explain what’s happening and invite a real response.

4) Hold A Consultation Meeting (And Allow A Support Person)

Next, meet with the employee to talk through the proposal. In most situations, it’s best practice to:

• invite them to bring a support person;
• talk through the proposal and reasons;
• give them a chance to ask questions;
• explain what information you’re relying on (for example, budget pressure, forecast, pipeline); and
• confirm next steps and the timeline for feedback.

For one employee, this meeting is often where the process succeeds or fails. If the meeting feels rushed, or the employee feels blindsided, they may later argue there wasn’t real consultation.

5) Consider Feedback With An Open Mind

After the meeting, you should allow time for the employee to provide feedback in writing (or follow-up meeting). They may suggest:

• different cost-saving measures;
• reduced hours or adjusted duties;
• a different structure that keeps the role (or part of it);
• redeployment into another position.

You don’t have to accept the feedback - but you do have to genuinely consider it. If you reject an alternative, be ready to explain why it isn’t workable for your business.

6) Make A Final Decision And Confirm It In Writing

Once you’ve considered all feedback, you can make a final decision. If the redundancy proceeds, provide a written outcome letter that covers:

• the final decision and reasons;
• the notice period and last day of employment;
• any payment entitlements (final pay, annual leave, etc.);
• any redeployment steps that were considered (and why they weren’t available);
• who to contact with questions.

This is also where you need to be careful with how you deal with notice. Some employers and employees agree to a payment in lieu of notice (so the employee does not work out their notice period). Whether you can do this - and exactly how it should be handled - depends on the employment agreement terms and the circumstances, and in some cases may require the employee’s agreement. If you’re considering this option, it’s worth reading: payment in lieu of notice.

7) Handle The Exit Properly (Final Pay, Handover, Communications)

Even if your redundancy consultation process is legally sound, the “last mile” matters. Make sure you:

• calculate final pay correctly (including any outstanding annual leave);
• manage handover respectfully (and within the employee’s role and notice period);
• communicate changes internally in a professional way (avoid oversharing personal details).

If you have a small team, it’s also smart to plan how you’ll explain the restructure without creating confusion or damaging morale.

What Timeframes Apply When Consulting With One Employee?

This is one of the most common questions we hear from small business owners: “How long does the redundancy consultation process need to take?”

In NZ, there is usually no fixed minimum timeframe written into legislation for consultation. Instead, the standard is that the timeframe must be reasonable in the circumstances and consistent with good faith.

What is “reasonable” depends on factors like:

• how complex the restructure is;
• whether there’s financial information to review;
• the seniority of the role;
• whether there are realistic redeployment options to explore;
• any time pressure driving the change (and whether it’s genuinely urgent);
• the employee’s ability to access advice/support (for example, needing time to speak with an advisor or union).

A Common Practical Timeline (Example Only)

For a straightforward redundancy affecting one employee, a typical timeline might look like this:

• Day 1: Provide written proposal and invite the employee to a meeting.
• Day 2–4: Hold consultation meeting (allow support person).
• Day 4–10: Employee feedback period (often 3–5 working days, sometimes longer).
• Day 10–14: Employer considers feedback and confirms final decision in writing.
• After decision: Notice period runs (as per the employment agreement), unless another arrangement is agreed.

This can be shorter or longer depending on your circumstances. The important thing is that the employee has a real opportunity to respond - not a “token” chance where the decision is effectively already locked in.

If your business is under significant pressure and you feel you need to move quickly, it’s still worth getting advice first. Moving too fast can create bigger costs later (for example, a personal grievance claim or settlement negotiations).

Common Mistakes Small Businesses Make (And How To Avoid Them)

When only one person is affected, it’s easy to underestimate how formal the redundancy consultation process needs to be. Here are common pitfalls we see - and the practical fixes.

Deciding First, Consulting Later

If you tell the employee “your role is redundant” and then invite feedback, you’ve likely skipped genuine consultation. Instead, frame it as a proposal and keep your mind open to alternatives.

Not Sharing Enough Information

You don’t need to hand over every document in your business - but you do need to provide enough information for the employee to understand the reasons and respond meaningfully. If you’re relying on financial pressures, it’s common to share appropriate supporting information (for example, high-level financial summaries or relevant figures) while also balancing confidentiality and sensitivity, and explaining any limits on what can be provided.

Confusing Redundancy With Performance Issues

Redundancy is about the role, not the person. If you’re really dealing with capability or misconduct, take the performance management route instead of trying to “solve it” through redundancy.

Not Considering Alternatives (Or Not Recording That You Did)

Even if you ultimately reject alternatives like reduced hours or redeployment, you should be able to show you considered them. This is where a solid paper trail helps.

Using “Forced Redundancy” Language Without Thinking It Through

Some employers talk about redundancy as “forced” versus “voluntary” in restructuring conversations. That’s not always wrong, but the wording can muddy expectations. If redundancy is on the table, be clear about what is proposed and whether any voluntary options are actually available: voluntary vs forced redundancy.

What Documents Should You Have In Place?

To run a clean redundancy consultation process (and reduce risk), having the right documents matters - especially in a small business where processes aren’t always formalised.

Depending on your situation, you may need:

• a written restructuring/redundancy proposal letter;
• meeting invite letters and meeting notes;
• a decision/outcome letter;
• a termination letter (if separate);
• a redundancy checklist for internal tracking (timeframes, who did what, when).

It’s also a good idea to ensure your overall employment documentation is consistent across the business. If the redundancy affects your wider plans (for example, you’re selling the business or changing ownership), that can create additional considerations around employees and transfer of obligations: employee rights.

If you’d like a structured, lawyer-prepared set of redundancy documents that fits your business and employment agreement terms, a Redundancy Document Suite can help you move quickly without cutting corners.

And if you’re not sure whether redundancy is the right option, getting specific advice early can prevent expensive missteps: redundancy advice.

Key Takeaways

• A proper redundancy consultation process is required in NZ even if only one employee is affected - it’s not “less formal” just because it’s a small restructure.
• Redundancy should be based on genuine business reasons (the role is no longer needed), not as a substitute for performance management.
• Consultation means providing a written proposal, meeting with the employee, inviting feedback, and genuinely considering alternatives before making a final decision.
• There’s no universal minimum consultation timeframe, but you must give a reasonable opportunity to respond - rushing the process can create legal risk.
• Make sure you check your employment agreement for notice and redundancy-related terms, and document each step so you can show the process was fair.
• Getting the documents right (proposal, meeting notes, outcome letter, termination/notice details) is one of the simplest ways to reduce the risk of a dispute.

If you’d like help running a redundancy consultation process (or you’re not sure whether redundancy is the right pathway), you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.