Redundancy Selection Matrix In New Zealand: Fair, Compliant Selection

Making roles redundant is one of the toughest parts of running a small business. Even when you’re doing everything for genuine business reasons, the process you follow still matters - a lot.

If you need to choose between employees for ongoing roles (or decide who will be made redundant), using a redundancy selection matrix can be a practical way to keep your decision-making structured, consistent, and evidence-based.

But here’s the key: a redundancy selection matrix isn’t a “tick-the-box” shortcut. In New Zealand, redundancy sits within wider obligations under the Employment Relations Act 2000, including good faith, consultation, and procedural fairness. A matrix can help support those obligations - if you build and use it properly.

Below, we’ll walk you through how a redundancy selection matrix is commonly used in NZ in a way that’s fair, defensible, and aligned with good faith processes (especially from the perspective of a time-poor small business owner trying to do the right thing).

What Is A Redundancy Selection Matrix (And When Do You Need One)?

A redundancy selection matrix is a scoring tool you use to compare employees against the same set of criteria. It’s most commonly used when:

• you are reducing headcount within a team;
• multiple employees do the same (or similar) roles; and
• not everyone can be retained after the restructure.

In practical terms, the matrix is a table that lists:

• the selection criteria (for example, skills, qualifications, performance, adaptability);
• any weightings (if some criteria matter more than others);
• each employee’s score for each criterion; and
• the total score (which helps guide the outcome).

When you may not need a matrix: if your restructure clearly removes a unique role and there is only one employee in that position, a selection matrix might not be necessary. Even then, you still need to run a proper redundancy process in good faith, including consultation.

When you should seriously consider a matrix: if two or more people are “in the mix”, a redundancy selection matrix can reduce the risk of inconsistent reasoning and help show that you approached selection fairly.

If you’re unsure whether redundancy is the right approach (or whether there’s a lower-risk alternative), it can help to look at options like Reducing staff hours first - because changing hours, redeploying, or reorganising duties may sometimes achieve the business goal with less disruption (but still needs careful legal handling).

What Does “Fair And In Good Faith” Mean In A NZ Redundancy Process?

In New Zealand, redundancy isn’t just about whether your business reasons are genuine. A “genuine redundancy” typically means you have a real business rationale (for example, downturn, lost contract, cost pressures, changing technology, restructure).

However, employers also have to follow a fair process - and under the Employment Relations Act 2000, you must deal with employees in good faith.

In a redundancy context, good faith and fairness commonly involve things like:

• Providing relevant information about the proposed restructure (to the extent you reasonably can);
• Consulting before making a final decision (meaning employees have a real opportunity to give feedback);
• Genuinely considering feedback and being open to alternatives;
• Using objective selection criteria if you need to choose between employees; and
• Avoiding predetermined outcomes (for example, deciding who is going before consultation even starts).

A selection matrix can support this because it encourages consistency and creates a clear record. But it can also create risk if you:

• use criteria that aren’t relevant to the role you need going forward;
• score people using assumptions, rumours, or “gut feel”;
• apply the criteria inconsistently; or
• roll it out without giving employees a meaningful opportunity to comment on the proposed approach (where that’s reasonably practicable in the circumstances).

Also keep in mind your employment agreements and policies. Your Employment Contract may contain specific terms around consultation, notice, or restructure processes, and your Workplace policy documents may set expectations around performance management and conduct documentation (which often becomes relevant evidence in selection).

What Criteria Can You Legally Use In A Redundancy Selection Matrix?

The best redundancy selection matrix criteria are:

• job-related (they connect to what the business needs in the future structure);
• objective or evidence-based (you can explain and support the score); and
• applied consistently across all affected employees.

Common (And Usually Defensible) Criteria

Depending on the role and your restructure goals, criteria commonly include:

• Skills and competencies (including technical capability required for the future role);
• Qualifications and licences (only where genuinely required or valuable for the role);
• Performance record (supported by reviews, KPIs, documented feedback, or measurable outputs);
• Experience relevant to the future needs (not just length of service on its own);
• Flexibility/adaptability (for example, ability to cover multiple functions, where this is legitimately part of the new structure);
• Disciplinary record (but only if properly documented and relevant).

Criteria You Should Be Very Careful With

Some criteria are risky because they can be discriminatory, too subjective, or irrelevant. Examples include:

• “Culture fit” (often too vague unless you can tie it to clear behavioural standards and evidence);
• Attendance without careful adjustment (this can intersect with sick leave, disability, pregnancy, or caring responsibilities);
• Seniority/length of service as the deciding factor (it can be used, but relying on it heavily may not align with future-skills needs and can be challenged);
• Personal circumstances (for example, who “needs the job more”) - this is generally not appropriate for selection and can create discrimination risk.

Selection decisions should not be influenced by protected characteristics under the Human Rights Act 1993 (such as sex, marital status, religious belief, ethical belief, colour, race, ethnic or national origins, disability, age, political opinion, employment status, family status, or sexual orientation). Even indirect discrimination risk matters - for example, using a criterion that looks neutral but unfairly impacts a protected group without a genuine business justification.

If you’re building a matrix and you’re not confident the criteria are lawful and relevant, it’s worth getting tailored Redundancy advice before you roll it out, because the criteria you choose can shape the entire defensibility of the process.

How Do You Create A Redundancy Selection Matrix That Works In Practice?

A good redundancy selection matrix should be easy to understand, easy to score, and easy to justify later if the decision is questioned.

Step 1: Define The “Future Role” Requirements First

Before you even think about scoring employees, get clear on:

• what roles will exist after the restructure;
• what tasks will be performed;
• what skills and experience are genuinely needed; and
• whether there are fewer roles than employees.

This is important because selection criteria must align with business needs. Otherwise, a matrix can look like you built criteria to fit a preferred outcome (which is exactly what you’re trying to avoid).

Step 2: Choose Criteria (Usually 4–8) And Keep Them Role-Related

In most small business restructures, less is more. If you have too many criteria, you increase subjectivity and scoring inconsistency.

A common approach is to use a mix such as:

• skills/competencies;
• performance;
• qualifications;
• relevant experience;
• flexibility.

Step 3: Decide Whether To Use Weightings

Weightings can be useful when some criteria matter more than others. For example, in a technical role, a critical certification might matter more than general flexibility.

That said, weightings can create risk if they look arbitrary. If you use them, be ready to explain why the weighting reflects the needs of the future structure.

Step 4: Use A Clear Scoring Scale (And Define What Each Score Means)

Avoid “mystery scoring”. A simple scale like 1–5 can work well if you define it.

For example:

• 1 = does not meet requirements
• 3 = meets requirements
• 5 = significantly exceeds requirements

Then, document what “meets requirements” actually means for each criterion. This makes scoring more consistent and less open to challenge.

Step 5: Build The Matrix (Example)

Here’s an example redundancy selection matrix format you can adapt. This is just a sample - your criteria should reflect your business and the future role requirements.

Tip: You can calculate a weighted score (for example, Employee A’s “Technical Skills” score of 4 x 30%). The arithmetic matters less than the consistency and evidence behind it, but weighted totals can help where criteria have different importance.

Step 6: Decide What Evidence You Will Use For Scoring

This is where many businesses get stuck. The goal isn’t to create an “HR bureaucracy” - it’s to avoid scoring people based on impressions.

Common evidence sources include:

• documented performance reviews;
• KPIs or measurable outputs (where used in your business);
• training records and qualifications;
• documented feedback and coaching notes;
• disciplinary records (where relevant and properly handled);
• role descriptions and capability frameworks.

If you don’t have much documentation (very common in small businesses), you can still run a fair process - but you’ll want to be extra careful about consistency and giving employees a chance to comment on information you’re relying on.

How Do You Apply A Redundancy Selection Matrix Without Creating Legal Risk?

A redundancy selection matrix should sit within a wider restructure process - it can’t replace consultation and good faith. Here’s how to use it in a way that can reduce the chance of disputes and increase defensibility.

1) Consult On The Proposal (Including The Selection Approach)

Generally, it’s good practice to consult with affected employees on:

• the proposed restructure and business reasons;
• the proposed new structure (and what roles remain);
• how you propose to select between employees if there are fewer roles than people (for example, the types of criteria you plan to use in a matrix); and
• timeframes and how feedback can be given.

This doesn’t mean employees “vote” on the outcome. It means they have a meaningful opportunity to provide feedback before decisions are final.

2) Score Consistently (And Ideally Have Two People Score)

To improve fairness and reduce bias:

• use the same evidence types for each employee where possible;
• score all employees at the same time (not in isolation);
• consider having two scorers (for example, the owner and a manager) and then moderating differences; and
• record short notes explaining why each score was given.

Those notes matter. If your matrix is ever questioned, the scores alone won’t tell the story - the explanation and supporting evidence will.

3) Give Employees A Chance To Comment On Information You’ve Relied On

Often, a fair approach is to give employees enough information about how the selection decision was reached (including the key factors that affected their outcome) and invite feedback before confirming final outcomes.

This is particularly important if:

• you’ve relied on information the employee may dispute (for example, alleged performance issues);
• there are gaps in documentation; or
• the scoring is close and small changes could affect the outcome.

Privacy/confidentiality note: if you share matrix information, take care not to disclose other employees’ personal information. In many cases, you can discuss an employee’s own assessment and the reasons for the decision without sharing other individuals’ scores.

4) Consider Redeployment And Alternatives

Even if the matrix identifies who best fits remaining roles, you should still consider:

• whether there are other suitable roles the employee could be redeployed into;
• whether retraining is reasonable; and
• any other alternatives raised during consultation.

Small businesses often overlook redeployment because there aren’t many roles available - but it’s still worth actively considering and documenting.

5) Confirm The Outcome Properly (Notice, Final Pay, Paperwork)

Once decisions are final, you’ll usually need to confirm outcomes in writing and follow the employment agreement on notice, final pay, and any contractual redundancy compensation (if applicable).

This is also where having the right documents and letters matters. Many businesses prefer to use a Redundancy document suite so that consultation letters, outcome letters, and supporting paperwork are consistent and tailored to NZ requirements.

If the redundancy process is being run alongside broader employment issues (for example, performance concerns), be careful not to blur the lines. Redundancy is about the role no longer being required - not a shortcut to avoid performance management. If you’re unsure which pathway you’re really in, speak to an Employment lawyer before you take steps that are hard to unwind.

Key Takeaways

• A redundancy selection matrix is most useful when you need to fairly select between employees for fewer remaining roles after a restructure.
• In New Zealand, redundancy must be carried out in a way that is fair and consistent with good faith obligations under the Employment Relations Act 2000.
• Your matrix criteria should be role-related, evidence-based, and applied consistently - and you should be cautious with vague or subjective criteria like “culture fit”.
• A defensible matrix includes clear scoring definitions, sensible weightings (if used), and written notes showing the evidence behind each score.
• You’ll usually reduce legal risk by consulting on the proposed restructure and selection method, allowing employees to give feedback, and genuinely considering that feedback before final decisions are made.
• Make sure your process aligns with your Employment Contract terms and any relevant Workplace policy documents, and get advice early if anything feels complex or contentious.

Important: This article is general information only and isn’t legal advice. Redundancy obligations can vary depending on your circumstances, your workplace policies, and the employee’s employment agreement.

If you’d like help building a fair redundancy selection matrix, preparing your consultation documents, or running a legally compliant redundancy process, you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.