Justified dismissal has two tests: substantive and procedural

By Equipo Saplic Published on 12/08/2026 Updated on 12/08/2026

And Section 103A sets an objective standard for both.

For guidance only

The amounts and deadlines in this guide can change by law. Always check the update date and the official sources cited below. For a specific case, consult the labour authority or a professional.

In this guide
  1. The objective test
  2. Substantive fairness
  3. Procedural fairness
  4. The redundancy process
  5. Redundancy versus performance management
  6. What the Authority can award
  7. Pre-termination negotiations
  8. Document everything
  9. Free advice
  10. The 90-day clock

New Zealand law requires that a dismissal be justified, and that means meeting two separate tests.

The objective test

Section 103A of the Employment Relations Act asks: would a reasonable employer have made the same decision?

That is objective. It does not turn on what your particular employer believed was reasonable.

Substantive fairness

There must be a valid reason — performance, behaviour, or genuine redundancy.

Procedural fairness

The employer must follow a fair process. That means, among other things, that you should be given a chance to respond to any accusations before a final decision is made.

A dismissal with a genuine reason but no opportunity to respond can still be unjustified.

The redundancy process

A fair redundancy typically involves:

  • Consultation with affected employees
  • Fair and objective selection criteria where multiple roles are affected
  • Exploring redeployment — checking internal vacancies you could fill, even at lower pay if reasonable
  • Confirming the decision in writing, with notice and support details

Skipping steps is grounds for a personal grievance.

Redundancy versus performance management

If your employer used redundancy to remove a low performer without a proper performance management process, that is likely an unjustified dismissal rather than a genuine redundancy.

What the Authority can award

Reinstatement, lost wages, or compensation.

Pre-termination negotiations

There is a framework for agreed endings, with written settlements as full and final. These protect against grievances once signed.

Read carefully before signing any settlement — that is the point at which your grievance rights end.

Document everything

Emails, meeting notes, and dates. If you need to build a case, contemporaneous records are what support it.

Free advice

Employment New Zealand provides free guidance on 0800 20 90 20, and Community Law Centres offer assistance.

The 90-day clock

You have 90 days to raise a personal grievance. Act within it.

Frequently asked questions

What is the test for a justified dismissal?
Section 103A asks objectively whether a reasonable employer would have made the same decision. Both substantive and procedural fairness are required.
What does procedural fairness require?
A fair process, including giving you a chance to respond to any accusations before a final decision is made.
What does a fair redundancy involve?
Consultation, fair and objective selection criteria where multiple roles are affected, exploring redeployment, and confirming the decision in writing with notice and support details.
What can the Authority award?
Reinstatement, lost wages, or compensation.
Where can I get free advice?
Employment New Zealand on 0800 20 90 20, and Community Law Centres.

Sources

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