Selling your business - When to tell staff

February 26, 2025

An area of uncertainty for employers when contemplating restructuring & redundancy processes concern obligations associated with disclosing relevant information.

The law requires employers provide employees who are adversely affected by any formal processes, for example - a redundancy process - with access to all relevant information (in writing) before any decisions are made. This is a requirement that employers often completely overlook and/or fail to do their due diligence on before commencing change processes with their employees.

The important point to make here is: That failure to provide employees with relevant information in these situations can be fatal to defending subsequent personal grievance claim(s). Namely, a claim for unjustified dismissal premised on employer failing to provide access to all relevant information.

Problems associated with this area of law can be illustrated in a recent judgment by the Court of Appeal in Birthing Centre Ltd v Matas [2024] NZCA 139, which dismissed an appeal from the Employment Court in Birthing Centre Ltd v Matas [2023] NZEmpC 162 that was in favour of five ex-employees who were employed as midwives.

In this case, Birthing Centre Limited (‘BCL’) transferred its services to MidCentral District Health Board (‘MDHB’). The commercial agreement between the parties had a condition that the arrangement be strictly confidential. After the transaction was completed, announcements followed, and concerns subsequently picked up by Midwifery Employment Representation and Advisory Services Union (‘the Union’).

In summary, employees were informed they would be transferred to MDHB – but the deal had already been completed by that stage. Five midwives who worked for BCL raised personal grievance claims for unjustified dismissal. Their claims centred on the lack of consultation and provisions of information occurring prior to being notified of their employment transferring. BCL attempted to argue that it was exempted from consulting with employees because there was a good reason to maintain confidentiality in terms of the commercial agreement between BCL and MDHB.

The Court of Appeal declined the application for leave to appeal - essentially confirming the ruling of the Employment Court which was:

  • ". . . A fair and reasonable employer could in the circumstances have considered options for exploring whether it could maintain the integrity of BCL’s commercial position as well as the DHB’s commercial position, while informing its employees of the proposal in a confidential way".


The Employment Court determined that there had been a failure by the BCL to consider:

  • Options for exploring whether the integrity of their commercial position could be maintained while informing employees of a potential sale in a confidential way.
  • Whether providing information to the Union was viable on embargoed basis.
  • Direct employees not to share information during the consultation process.
  • Include a condition of sale that employees be consulted on a conditional basis and their views sought before the sale agreement became unconditional.


As a result, remedies previously imposed in by the Employment Relations Authority (‘the Authority’) were required to be paid by BCL to the midwives. The total value of the claims exceeded $35,000.00 across each of the employees, including compensation payments for injury to feelings and four weeks wages equivalent for each of claimant. This is not to mention the legal costs and time which would have been incurred that were associated with three sets of separate legal proceedings, i.e. a determination in the Authority, the Employment Court and the Court of Appeal, which would have been significant.

The outcome associated with this case is a chilling reminder to employers to ensure they do their due diligence when contemplating restructuring processes, including business transfers and sales. Failure to sufficiently plan and understand an employer’s legal obligations can translate to successful legal challenges. It is vital an employer does careful due diligence, along with understanding any specific areas of legal risk (and plan for contingencies – if necessary) before embarking on these sought of processes. If an employer is going to attempt to rely on confidentiality to withhold information from affected employees, then it must be able to show & explain why confidentiality is necessary to protect its commercial position.

More importantly, employers who are considering withholding relevant information need to understand that the legal threshold for not disclosing information on grounds of ‘confidentiality’ and/or ‘commercial sensitivity’ is extremely high (and open to challenge).


Accordingly, the ‘least risky’ approach is for an employer to consider making provision of all relevant information available to the affected employees via a formal consultation process before any decisions are made.


Source: Employers Assistance Ltd 7.10.24

Employment Relations Amendment Act 2026

By Stuarts Accountants • March 11, 2026
Employment Relations Amendment Bill 2026 Highlights – Effective 21 Feb 2026 The 'Specified Contractor' Gateway Test If you hire someone as a contractor and you want them to be a "Specified Contractor", the engagement MUST meet a specific set of criteria. As such this then exempts them from later challenging the fact and from arguing they were an employee all along: A statement of intent (written agreement) stipulating that the worker is an independent contractor, or 'not an employee'; The party has no restriction on other work. They have the freedom to work for any other party other than during the time in which they are engaged with you, unless if the agreement is to complete a specific project or task Has the flexibility to arrange their working time/hours OR has the ability to subcontract the work; The worker will not be terminated from the arrangement if they decline additional work; and Is proven to have had a reasonable opportunity to seek independent advice before entering the commencement. The important point with all this is that if all the above are not met the worker IS able to challenge the status of their engagement as we have seen for many years. It has been made clear that this provision will not apply retrospectively therefore our recommendation is that if you wish to consider a worker a 'Specified Contractor' going forwards we strongly recommend reviewing your contract with them and vary or re-sign accordingly. Personal grievance remedy awards If an employee brings a personal grievance against their employer, and it is proven that the employee's behaviour has given rise to the issue in the first place, reinstatement of employment may be off the table, and/or financial compensation to the employee may be reduced by up to 100%, and particularly so in the instance or serious misconduct. $200,000.00 remuneration limit on unjustified dismissal grievances An employee who earns over a certain income threshold (currently set at $200k per annum) cannot bring a personal grievance against the employer for unjustified dismissal. This potentially means that in such cases an employer can 'fire at will' without following a good faith process. This threshold figure includes all wages/salary, commissions, bonuses etc, and will be revised periodically by the Government. The amendment does allow for parties to explicitly opt out of this provision, meaning if agreed an employee on more than that threshold could bring a grievance against their employer. Why an employer would opt into that remains to be seen! For new employees this position is effective immediately. For existing employees you have 12 months to negotiate this point before the default position applies, being that an employee earning $200,000 or more per annum cannot raise a personal grievance for unjustified dismissal. 90-Day Trial Period Further protection for employers is now available. It is a technical point legally, but previously a compliant 90-day trial period provision and associated termination gives an employer legal protection against a personal grievance for unjustified dismissal. However, it is common knowledge and practice that lawyers & savvy advocates turn such challenges into claims of unjustified disadvantage instead, thus potentially circumventing the legal protection for the employer under the Act. This avenue is now blocked. Under this Amendment Act an employee (or representative) cannot claim unjustified dismissal or unjustified disadvantage relating to the dismissal. 30-day rule abolishment  For businesses where collective employment agreements (CEA) are in place, previously any new hire whose work would normally fall under the scope of a CEA scope of such must be hired at least for 30 days on the CEA before even negotiating with the person the option of an individual employment agreement (IEA). Employers Assistance 17.2.2026

Protection for company directors’ residential addresses

By Stuarts Accountants • March 10, 2026
In November 2025, the Companies (Address Information) Amendment Act 2025 was passed into law. This Act enables directors who have safety concerns regarding the publication of their residential address to opt to provide an alternative address instead. The existing position under the Companies Act 1993 is that a company must publish the residential addresses of its shareholders and directors on the Companies Register. Long-standing concerns about personal safety and broader privacy concerns related to the public availability of such information have been addressed by this Amendment Act. Process for substituting a residential address It is important to note, however, that the ability to substitute a director’s residential address must be carried out by application to the Registrar of Companies. The application seeking approval must: - Be made by the director in the prescribed form; - Include a statutory declaration by the director verifying that the public availability of their residential address is likely to result in physical or mental harm to the director or a person they live with; - Specify an eligible alternative address; and - Include the prescribed fee (if any). Alternative addresses must be physical New Zealand addresses. The alternative address cannot be the company’s registered office or address for service, nor a postal centre or document exchange service. Where the alternative address is the office of an accountant, law firm etc, this must be specified. Coverage for shareholders The Act does not generally include alternative options for shareholders’ addresses. However an alternative address for shareholders may be allowed when the applying director is also a shareholder of the company, or lives with a shareholder of the company and consents to the use of the alternative address. If your application is approved Where the Registrar has approved an application for the use of an alternative address, they will take reasonable steps to prevent public access to the director’s residential address, including redacting the address from historic filings and other documents that previously disclosed the address. In summary While the Amendment Act has been passed, it will not come into force until a date set by Order in Council. In the event that the Act has not come into force by 18 November 2026, it will do so on that date. Directors will not be able to submit applications until the Amendment Act is in force. It remains to be seen what threshold of harm will be considered sufficient to have an application succeed under the alternative address regime, and whether any supporting documentation will be requested as part of the application.  Our commercial team is closely following this, as well as the wider reforms to the Companies Act 1993 currently being considered by the government. If you need assistance, we recommend seeking support from an experienced commercial lawyer. Rainey Collins Feb 26

Entertainment Expense Items

By Stuarts Accountants • November 26, 2025
ENTERTAINMENT EXPENSE ITEMS Here is a list of common travel and entertainment expense items and their tax treatment - Food and drink while out of town on business when eating alone or with other team members 100% deductible and no FBT - Food and drink while overseas on business eating with team members, customers, suppliers, prospects etc. 100% deductible and no FBT - Food and drink with customers, suppliers, prospects etc. either in or out of town on business 50% deductible and no FBT - Non-taxable meal allowances paid to employees working overtime 100% deductible and no FBT - Morning and afternoon teas 100% deductible and no FBT - Lunches and more than incidental food & beverages for employees 50% deductible and no FBT - Samples provided for advertising 100% deductible and no FBT - Food & beverages as part of training seminars, conferences, trade displays that are at least 4 consecutive hours 100% deductible and no FBT - Rugby, show, movie tickets etc. for staff and used when staff member chooses 100% deductible and subject to FBT* - Sporting, cultural or other recreational activities, e.g. golf or corporate box 50% deductible and no FBT - Hire of boat to entertain customers, suppliers, prospects etc. 50% deductible and no FBT - Friday night drinks, staff parties and other social functions (whether at the office or elsewhere) e.g. Christmas parties, reception for existing or potential customers, suppliers etc. This includes any supporting expenses i.e. transport (taxis), crockery hire, glasses, waiters, music, etc. 50% deductible and no FBT - Gift for client, employee, supplier etc. which contains food and drink 50% deductible and no FBT - Gift for client, excluding food and drink 100% deductible and no FBT - Gifts for employees (or spouse) 100% deductible and subject to FBT* - Gift for non employee who helped with job 100% deductible and no FBT - Gym membership for an employee paid by the employer 100% deductible and subject to FBT* - Gift cards/vouchers (no GST claim as GST triggered when voucher used) 100% deductible and subject to FBT* or PAYE** * FBT applies to "closed loop" gift cards (cards that are limited to where they can be used e.g. Farmers, Countdown, Mitre 10 etc). You are only subject to FBT if you are over the exemptions. These are $300 per quarter per employee, or $22,500 per annum for all employees. If you reach either of these in any period, you are required to pay FBT on the total amount. Note there is a $1,200 per employee per annum threshold if you are filing FBT on an annual basis. ** PAYE applies to "open loop" gift cards (cards that can be used almost anywhere e.g. Prezzie Card, Visa/Mastercard prepaid cards etc). These cards are treated as cash equivalent and PAYE must be withheld on the grossed up value of the card. There is no value exemption on these cards. This list is designed to be an overview of the tax treatment of common entertainment expenses. If you have a question relating to this list, or you have another expense you would like clarification on, please contact us. GST is not claimable on 50% portion.