New Zealand Payroll

Everything you need to know about paying your NZ based staff

Ending Employment Relationships (Terminating Employees)

09 May 2020- 9 min read


Unfortunately one of the effects of the COVID-19 pandemic will be that many businesses will be terminating the employment relationship with some of their staff. Terminating staff is emotionally, financially and technically difficult for everyone involved, so it is important to have a good process to minimise the hurt and risk to your business. Here is my guidance from being on both sides of the employment relationship.

Employment law hasn't changed so you need to follow good processes when ending employment relationships. The end could come for any of the following reasons:

  1. Resignation
  2. Abandonment
  3. Constructive dismissal
  4. Retirement
  5. Dismissal
  6. Redundancy had good information on the steps you need to take, or avoid in the case of Constructive dismissal.
You may also need to use the process for handing Medical Incapacity. You can find that here: 
Your employment agreements should contain information about notice periods and any redundancy compensation.

Make sure you follow your process, record discussions and outcomes.
Make sure your actions are fair and reasonable, and document why.

Hurting people hurt people
Be as prepared as you can so that you hurt the person as little as you can.
Expect the person being terminated to be hurting and be prepared for them to hurt you even if they didn't intend to. This can be as simple as making sure you are not under time pressure in meetings and have time for a break between them, perhaps debriefing with someone.

Letting KeyLink know
We need to know the following so we can process a final payslip and payment:

  1. When the termination is effective from
  2. What notice period is payable
  3. Any redundancy payable
  4. Any compensation (only applies if it is a mediated settlement)
  5. When to make payment

Sometimes the outcome will be negotiated, we expect to have to prepare multiple drafts.



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Evan Lyon

Evan Lyon

KeyLink owner, 25+ years experience in designing, building and running mission critical IT systems. More than 12 years experience supporting and using payroll systems.


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