In New Zealand, the dismissal of any employee  (including high-earning executives) is governed primarily by the Employment Relations Act 2000 (ERA). The legislation does not draw a basic distinction between high- and low-income earners in terms of dismissal rights. Instead, it focuses on two central questions: whether the employer had a good substantive reason for dismissal, and whether the employer followed a fair and reasonable process.

Dismissal “without notice” is generally referred to as summary dismissal. In New Zealand law, this is only permitted in cases of serious misconduct. Serious misconduct is conduct so severe that it fundamentally undermines trust and confidence in the employment relationship, making it unreasonable for the employer to continue the relationship even for the duration of a notice period. Common examples include serious dishonesty or fraud, theft, assault, gross insubordination, or significant health and safety breaches.

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The legal test for whether a summary dismissal is justified comes from sections 103 and 103A of the ERA. These provisions require the Employment Relations Authority or Employment Court to consider whether the employer’s actions, and the way in which they acted, were what a fair and reasonable employer could have done in all the circumstances at the time. This test has both a substantive and procedural element.

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On the procedural side, an employer is expected to carry out a fair process before dismissing, including for serious misconduct. That usually requires a proper investigation into the alleged conduct, putting the specific concerns and potential consequences to the employee, providing a real opportunity for the employee to respond (often with the option of representation or support), and then genuinely considering that response before making a decision. Even if serious misconduct appears obvious, a failure to follow fair process can render a summary dismissal unjustified.

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High-earning employees are, at present, subject to the same framework. Their employment agreements, however, often contain additional contractual features such as longer notice periods (for example, three to six months) and provisions for garden leave or payment in lieu of notice. If an employer dismisses a high-earning employee without notice and cannot substantively justify that decision as a response to serious misconduct, the employee may raise a personal grievance for unjustified dismissal under the ERA and may also bring a claim for breach of contract to recover the value of the lost notice period.

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The legal landscape is in a state of proposed change. The Employment Relations Amendment Bill 2025 includes a proposal for a high-income threshold (currently framed at $180,000 per annum), above which employees would not be able to bring a personal grievance for unjustified dismissal, unless their employment agreement specifically preserves that right. The policy rationale presented is that parties at higher income levels are better placed to negotiate detailed contractual protections and that employers need greater flexibility in managing senior, high-impact roles.

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Even if that reform comes fully into force, it would not introduce a true “employment at will” regime for high earners. Employers would still be bound by contractual notice provisions, the statutory duty of good faith in section 4 ERA, and other personal grievance grounds such as discrimination or unjustified disadvantage. High-income employees would also remain able to bring civil claims such as wrongful dismissal for non-compliance with contractual notice.

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In practice, dismissal of high-earning employees without notice will likely remain confined to clear, well-documented cases of serious misconduct, handled through a careful and defensible process, with higher remuneration affecting the financial stakes rather than the underlying legal principles.