Termination of Employment Contracts in New Zealand

Terminating an employment relationship usually happens in one of four ways.

Resignation or Retirement

Employees can resign at any time, provided they give notice to the employer in accordance with the terms of the employee’s employment agreement, or in the absence of an employment agreement, reasonable notice to the employer.

There is no general retirement age and employees can’t be forced to retire.


Abandonment of employment usually occurs when an employee is absent from work for an extended period and fails to notify the employer or give a good reason why they are not at work. The employer must make reasonable attempts to contact the employee during the employee’s absence.


An employer is entitled to dismiss an employee for unacceptable behaviour or conduct.

A lawful decision to dismiss must comply with s103A of the Employment Relations Act 2000. The test (as set out in s103A) is: whether the employer’s actions, and how the employer acted, were what a fair and reasonable employer could have done in all the circumstances at the time the dismissal or action occurred.

An employer may also terminate employment in a genuine redundancy situation. If, following a consultation process, the employer determines that the employee’s role is not required, the employer must also consider any opportunities for redeployment before terminating employment.

Termination in a redundancy situation or for poor or non-performance is termination on notice. By comparison, termination for serious misconduct may be summary termination.

For more information on these articles or any other issues involving labour and employment matters in New Zealand, please contact Don Mackinnon, Partner at SBM Legal ( at
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