Scheduled maintenance is planned for June 13 at 4pm, during which time the site will be temporarily unavailable.
%20(800%20x%201200%20px).jpg)
%20(1500%20x%20600%20px).png)
Before securing my current dream role, I worked in the banking sector at 'the' NZ Bank, which was a remarkable journey. I'm filled with gratitude for the opportunities I received there, they were generous with the opportunity, especially for those who stepped up and put in the effort.
In many organizations, particularly banks, the dynamic environment with its numerous moving parts often leads to team integrations, staff rotations, attrition, and a host of contractors working on various projects. Redundancy is a constant possibility in such settings. During my tenure, I witnessed about three waves of redundancy.
The term 'redundancy' often brings a storm of stress and uncertainty. It's a common occurrence in a fluid economy like New Zealand's. However, it's not an insurmountable challenge. There are strategies to safeguard your financial well-being and mental health during these tough times.
Redundancy, or severance, occurs when a position is eliminated due to factors like technological changes, reduced product demand, company sales, restructuring, or bankruptcy. It's important to remember that redundancy is not a reflection of your job performance but a result of the business's evolving needs.
In my time at the bank, several redundancy phases affected various departments. While I maintained my middle management position, often targeted in downsizing, many friends and colleagues were not as lucky. Those with adaptable skills generally find new opportunities quickly, and some may even have the luxury of not rushing into another job.
Nevertheless, redundancy is acknowledged as a stressful experience, with financial uncertainty being a significant concern for many.
Fortunately, financial safety nets exist to provide stability while you seek new employment. Redundancy has become more prevalent, particularly in the post-COVID-19 era. It's crucial to maintain open communication with your support network, including family and friends, who can offer encouragement during these times.
On a brighter note, there are established methods to secure your finances and mental health with proactive planning, or what I like to call 'futureproofing.' The New Zealand economy is constantly evolving, leading to job redundancies, as recently seen with the downsizing in the public sector in Wellington, resulting in numerous job losses.
A few key points about redundancy are worth noting. Compensation for unused annual leave and salary, along with other benefits due by the end date, is provided in addition to any redundancy compensation. For example, if you're owed four weeks of annual leave and your redundancy package includes six weeks' pay, you'll receive a total equivalent to ten weeks' pay.
If you're considering applying for redundancy or disability cover from an NZ Insurance provider, be aware that their applications often include questions about any foreknowledge of changes or restructures at work. If you answer affirmatively, they will likely deny coverage.
You'll need to be a full-time employee (not self-employed or a contractor, in most cases) and employed for a certain length of time with the same company, usually six months. Benefits will not be paid if you were fired from your job rather than being made redundant, so the insurance provider may require 'proof' of redundancy.
Chubb currently offers redundancy cover that provides a monthly payment for up to six months if you're made involuntarily redundant. The coverage can be up to $4,000 per month, and they provide coverage for two periods of redundancy during the cover term. However, Asteron Life does not offer redundancy cover following the COVID-19 pandemic, although this position may be reviewed over time.
Throughout the COVID-19 pandemic, standard employment rights remained in effect, and the regulations and laws concerning redundancies persisted without alteration. Redundancy payments are subject to tax deductions, which are typically handled by the employer. If the employer fails to do so, the tax payment responsibility falls on you.
If you're eligible for financial aid, it's advisable to apply as soon as possible through Work and Income. Ensure your resume is current and tailored to the job you're targeting. Utilize social media platforms like LinkedIn to expand your job search network, and take advantage of resources like interview guides, resume templates, and helpful information available online.
Redundancy can be challenging, but understanding your rights and entitlements can help you navigate this difficult period effectively. By taking proactive steps to manage your finances, maintain your mental health, and seek support (such as EAP), you can minimize the impact of redundancy and move forward with confidence. It's a complex process, but with the right knowledge and resources, you can navigate through it with confidence.
Remember, redundancy is a common occurrence in the modern workforce, and with a proactive approach, you'll find your footing again.
Simon.
About Simon
Hi, I’m Simon a Financial Advisor here at Velocity Financial. I enjoy working with my clients to help demystify all the Mortgage, Insurance and KiwiSaver fine print, and help get them to where they want to be. I am dedicated, thorough and offer professional advice that works for you. I like to help people on their journey and be a trusted person to guide them through really important events in their lives such as the home buying process. I help my clients collaborate with valuers, builders, lawyers and real estate agents to ensure a seamless experience. That satisfaction of reaching the goal with the least amount of stress for my clients is hugely rewarding. I navigate unique scenarios and tailor lending solutions for individual circumstances to save money and time. As a proud father of two and avid supporter of all my children’s endeavours, I know just how precious that time is. On the weekends you’ll also find me mountain biking, surfing, or checking out NZ’s great walks.
Disclaimer: Simon O’Neill (FSP534466) is a Financial Adviser with Velocity Financial (FSP95466). No investment decision should be taken based on the information in this blog alone. Please see Simon’s disclosure statement on our website.
Always get professional advice
The information shared in this post is meant to be general guide to support you on your journey. When making important decisions about your finances, we encourage you to seek independent financial advice first, tailored to your unique situation. As well as talking with a financial adviser, make sure you talk to your lawyer and accountant too – together they'll help you find the best solution for your specific situation. Our knowledgeable financial advisers are here to help. Check out our website for the details about our financial advisory services in our disclosures https://www.velocityfinancial.co.nz/disclosure-statement.