Can I “Fire” This Employee? What NZ Law Actually Says
Let’s cut to it. Firing someone in New Zealand isn’t as simple as "three strikes and you're out." If you don’t follow a fair and lawful process, you're not just risking a slap on the wrist. You’re opening yourself up to a personal grievance claim.
Whether you’re dealing with poor performance, serious misconduct, or just someone who’s not the right fit, the law cares more about how you handle it than why you want them gone.
Here’s what NZ employment law actually says.
You Must Have a Valid Reason
In New Zealand, you can’t dismiss someone just because they’re annoying, slow, or a bad culture fit. You need a reason that would be considered fair and justifiable by a reasonable employer.
The most common lawful reasons for dismissal are:
Serious misconduct (such as theft, violence, or major policy breaches)
Repeated poor performance (as long as it’s documented and there have been warnings)
Redundancy (but only if it’s genuine and you follow the proper process)
Medical incapacity (after careful assessment and consultation)
If your reason isn’t documented or clearly justified, you are not in a safe zone.
You Also Need to Follow a Fair Process
The Employment Relations Act 2000 is clear. Even if you have a solid reason, the process must be fair.
The legal standard is called procedural fairness and includes:
Raising the concern with the employee
Giving them a chance to respond and supplying the information you're relying on
Letting them bring a support person
Listening to their side of the story
Making your decision only after proper consultation
If you've already made up your mind and are just going through the motions, you’ve missed the mark.
Common Mistakes That Cost Employers Big
Here’s what employers get wrong all the time:
No formal warnings before dismissing for poor performance
Using "redundancy" as an excuse to avoid a performance process
Failing to document issues, conversations, or expectations
Avoiding difficult conversations until it’s too late
Issuing a termination letter without proper consultation
If any of these sound familiar, it’s time to pause and get advice before things unravel.
What If the Employee Is in Their Trial or Probation Period?
90-day trial period: Only applies if you have fewer than 20 employees and the clause is correctly written and signed. Even then, you must act in good faith and give the right amount of notice.
Probationary period: You still need to provide feedback and support. You cannot just cut them loose without a fair process.
These periods don’t give you a free pass to dismiss someone without thinking.
What Happens If You Get It Wrong?
The employee may raise a personal grievance. If they win, you could be ordered to pay:
Lost wages
Compensation for hurt and humiliation
Legal costs
And let’s not forget the damage to your reputation. That can take even longer to recover from.
Don’t DIY a Dismissal
If you’re thinking about firing someone, don’t wing it. Every case is different, and a one-size-fits-all approach is risky.
Get it right from the start
At Succession Consulting, we help NZ business owners handle terminations properly. That means following the law, respecting your team, and protecting your business.
Book a confidential consult now and avoid the HR disaster you didn’t see coming.
We’ll help you navigate the process based on your specific situation.
