How To Dismiss An Employee In New Zealand - A Practical, Lawful Process For Employers
Ending an employment relationship in New Zealand is not a quick decision or a one-size-fits-all process. In most cases, an employer must be able to show there was a justifiable reason for the dismissal and that they followed a fair process. The key test is whether the employer’s actions, and how they acted, were what a fair and reasonable employer could have done in all the circumstances at the time.
This guide outlines the most common situations where dismissal arises and the core steps employers should follow to reduce risk and ensure a procedurally fair outcome.
The foundation - Justifiable reason and fair process
Before considering dismissal, employers should be clear about two things.
First, the reason must be justifiable. That means the concern is real, relevant to the role or workplace, and supported by evidence (not assumptions or personal dislike).
Second, the process must be fair. Procedural fairness generally requires you to raise concerns clearly, provide relevant information, give the employee a genuine opportunity to respond, and take time to consider their response before deciding.
Employers seeking a valid dismissal should ensure they:
Have A Justifiable Reason - With clear evidence and role expectations.
Follow A Fair Process - With notice, a genuine opportunity to respond, and proper consideration before deciding.
Step 1 - Identify the correct pathway
(Performance, misconduct, redundancy, or medical incapacity)
A common reason dismissals go wrong is that the employer applies the wrong process for the situation. In practical terms:
Poor performance (Capability) is where the employee is not meeting reasonable standards for the role and needs clear expectations, support, and time to improve.
Misconduct (Behaviour) relates to breach of policies or standards of behaviour. More serious allegations often require an investigation before any disciplinary decision.
Redundancy (Business change) arises where the role is no longer required due to genuine business reasons, and a consultation process is essential.
Medical incapacity (Health) is where the employee is unable to perform the role over the long term, and the employer must carefully assess medical information and possible adjustments.
Step 2 - Follow the core process steps
(Applies across most dismissal types)
While the details differ depending on the situation, most lawful processes include the same fundamentals:
Clarify the issue and gather evidence
Document facts, expectations, and the impact on the role or workplace. Where relevant, include job descriptions, policies, performance measures, emails, timesheets, incident reports, or customer feedback.Invite the employee to a formal meeting in writing
The invitation should explain what the meeting is about, include enough information for the employee to understand the concerns, and confirm the right to bring a support person or representative.Hold the meeting and genuinely consider their response
You should clearly explain the concern, ask for the employee’s response, and keep notes. Avoid approaching the meeting with a pre-determined outcome.Adjourn to decide
A fair process generally involves taking time to consider all information before confirming an outcome. That outcome should be communicated clearly and confirmed in writing.
What a fair process involves for each of the following situations:
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For performance issues, a PIP is often the clearest way to set expectations and show genuine support. A good plan describes the performance gaps, sets measurable goals, confirms what support will be provided (training, coaching, supervision), and sets review dates.
The plan should be reasonable in timeframe. Many employers use around four to six weeks with weekly reviews, but the right period depends on the role, the issue, and what is reasonable in the circumstances.
If performance improves and is sustained, the process can be closed. If it does not improve, employers may proceed to a further formal meeting to consider escalation up to and including termination of employment.
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Where allegations are serious or disputed, the employer generally needs to investigate before making disciplinary decisions. The employee should understand the allegations and have an opportunity to respond. Even where serious misconduct is alleged, a fair process still matters. Outcomes can range from warnings through to summary dismissal in very serious cases, but only after a procedurally fair process.
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Redundancy is not a performance or disciplinary process. It requires a genuine business reason and meaningful consultation. Employers should provide information about the proposed change, give the employee an opportunity to comment, consider alternatives (including redeployment where feasible), and only then make decisions. Redundancy processes are highly fact-specific, so it is sensible to get advice early.
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Incapacity processes typically involve reviewing medical information (with appropriate consent), understanding how the condition affects the role, considering reasonable workplace adjustments, and assessing whether the employee can perform the role now or in the foreseeable future. These matters can be sensitive and higher risk, so taking advice is recommended.
Written reasons for dismissal - The “statement of reasons” obligation
If an employee is dismissed and they are not within a valid trial period, they can request a written statement of the reasons for dismissal. This request may be made within 60 days (including 60 days after they become aware of the dismissal), and the employer must respond within 14 days of receiving the request.
Trial periods (90 days) - Commonly misunderstood
Trial periods can be used for up to 90 calendar days, but they must be agreed in the employment agreement and signed before the employee starts work. Trial periods are strictly applied, so wording and timing are important.
After the decision - Notice, final pay, and communications
If employment ends, follow the notice provisions in the employment agreement, and ensure final pay is calculated correctly. Final pay typically includes wages up to the last day worked and payment for any leave entitlements owed (among other contractual payments where applicable). Keep internal communications brief and professional, and protect the employee’s privacy.
To keep offboarding clean and reduce disputes, employers should:
Confirm The End Date, Notice, And Any Handover Arrangements In Writing
Check Final Pay And Leave Entitlements Carefully Before Processing
Need help?
Konnect Koncepts supports New Zealand employers to manage dismissals lawfully and consistently. We can help you choose the correct pathway, prepare documentation, draft letters, and guide you through meetings and decision-making to reduce risk and ensure a fair process.
Disclaimer
This article is general guidance for New Zealand employers and does not constitute legal advice. Outcomes depend on the facts, the employment agreement, and the steps followed.
