In New Zealand, redundancy compensation is not mandated by law and is typically negotiated between the employer and employee. However, if an employer has a redundancy compensation policy or collective agreement in place, they must adhere to its terms.
The amount of redundancy pay can vary depending on factors such as length of service and the employer’s policy. In general, the redundancy payout in New Zealand is usually a lump sum payment equivalent to a certain number of weeks’ pay for each year of service, up to a maximum of 26 weeks’ pay.
For example, if an employee has worked for an employer for 5 years and their weekly pay is $800, their redundancy payout may be calculated as follows:
– 5 years of service x 1 week’s pay for each year of service = 5 weeks’ pay
– 5 weeks’ pay x $800 = $4,000 lump sum payment
It’s important to note that redundancy pay in New Zealand is subject to tax and may affect an employee’s entitlement to certain benefits, such as Jobseeker Support or Sole Parent Support.
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