2 June 2026

Suspensions under New Zealand Employment Law: Balancing Fairness and Good Faith

Under the Employment Relations Act 2000 (ERA), the duty of good faith is a cornerstone of employment relationships.  This duty requires employers to act in a manner that is active, constructive, and communicative, particularly when making decisions that could adversely affect an employee’s employment.

Suspensions are typically used as a temporary measure during investigations into alleged misconduct or when an employee’s presence in the workplace may pose risks to safety or operational efficiency.  While suspensions are not outcomes of a disciplinary process, they are considered a formal action and can be a contentious issue that creates implications for both employees and employers if the process is not done properly.

The Courts have made clear the fundamental importance of procedural fairness for decisions relating to suspensions and have found instances such as failing to consult with an employee before suspension and pre-determined decisions to be a significant procedural flaw.[1]  Employers must tread carefully, ensuring that their actions are legally compliant, fair and reasonable.

The first step in determining whether suspension is appropriate is to look at the relevant employment agreement.  Often employment agreements will include provisions about the ability to suspend an employee and in what circumstances this can happen.  If the relevant employment agreement does not provide for suspension, the employer will need to consider whether the employee’s continued presence poses a significant issue (e.g., serious safety or operational risk).

Suspensions must be approached in good faith and in line with natural justice.  An employer must ensure that:

• All other reasonable alternatives to suspension have been considered.
• Notice of the proposal to suspend is given to the employee, outlining the reason for this and any other relevant information.
• The employee is able to engage and respond on the proposal.

Suspensions are generally expected to be done with pay unless there is an express provision or an exceptional circumstance that allows otherwise.  Suspension without pay is considered a drastic measure and is generally only justifiable in rare and exceptional circumstances, for example, those relating to imminent danger or safety concerns. Some employment agreements also allow more unpaid suspension in special circumstances, however, even in these situations a fair and justified process still must be followed.

The ERA allows for suspensions to be challenged under s 103A of the ERA as an unjustified disadvantage.  As part of this, the ERA will look at whether a suspension is justified, including whether the employer’s actions were what a fair and reasonable employer could have done in the circumstances, whether the suspension was necessary, whether it was for a reasonable duration, and whether the employee was given an opportunity to be heard.

Needing support on a proposed suspension? Our team at McCaw Lewis are available to support you through the process and offer clear, practical advice and checklists to ensure things get done properly.

Tazmyn is a Solicitor in our Workplace Team and can be contacted on 07 958 7467.