Reducing staff hours in NZ: what an employer must do first

Agreed hours are part of the agreement

Section 67C of the Employment Relations Act 2000 says agreed hours of work must be in the employment agreement. They can include the number of guaranteed hours, the days of the week, start and finish times, and any flexibility in those days and times. Once they are there, they bind you as much as the pay rate does.

Employment New Zealand puts it plainly: if the agreement has the employee's hours, you cannot change them without the employee's agreement. A new roster that gives someone fewer hours than they are guaranteed changes their agreement, so it needs their agreement too. Where the agreement does give you room, for example a range of hours or flexible days, you still have to act fairly and reasonably when you use it.

Cutting hours without agreement risks a personal grievance. Section 103(1)(b) covers an employee whose employment, or a condition of it, is affected to their disadvantage by an unjustifiable action by the employer. A large or lasting cut can also push someone towards resigning, which can raise the question our article on constructive dismissal explains.

Talk first, then decide

Good faith in section 4 asks both sides to be active, constructive, responsive and communicative. Where you are proposing a decision that will, or is likely to, affect whether someone's job continues, section 4(1A)(c) goes further: before you decide, give the people affected access to the information relevant to the decision, and a chance to comment on it. You can hold back confidential information about other individuals or commercially sensitive material, within limits.

A proposal to reduce hours often meets that test, because the alternative being weighed is usually fewer jobs. Even where it does not, the same steps make agreement far more likely:

1. Write the proposal down: who it affects, the hours now and proposed, the dates, and why.
2. Share the evidence behind it, including the hours data in the last section.
3. Give a reasonable time to consider it, seek advice and respond. Employment New Zealand's change process asks for this.
4. Genuinely consider the feedback, and say which points you accepted, which you did not, and why.
5. Put any agreed change in writing. A variation to an individual agreement falls under section 63A: give the employee a copy of the proposed variation, tell them they can get independent advice, give them a reasonable chance to get it, and respond to the issues they raise.

If staff are covered by a collective agreement, their hours are in it, so talk to the union.

Temporary cuts, voluntary options and redundancy

Many slow periods are seasonal or short. A temporary variation is often easier to agree than a permanent one, and it should say so: the reduced hours, the start date, an end date or a date to review it, and that the original hours resume after it. Agreeing on a review date gives everyone a point to check whether the work has come back.

Before proposing cuts for everyone, ask who would like fewer hours. Some people welcome a four-day week for a few months, or would take unpaid leave by agreement. Annual leave is another lever, but it is agreed too: under section 19 of the Holidays Act 2003 you can only require someone to take it if you cannot agree on when, and then with at least 14 days' notice.

Fewer hours are also a common alternative to redundancy. Employment New Zealand says that cutting hours as an alternative to redundancy needs the usual process for organisational change, and lists changing hours, duties or shifts and job-sharing among the alternatives, adding that any such change must be agreed by both of you. If people will not agree and the work really has gone, the lawful route is a genuine restructure with full consultation; our guide to redundancy covers that process.

Two details matter for pay. Every hour still earns at least the minimum wage, $23.95 an hour for adults from 1 April 2026. And annual holiday pay is worked out at the greater of ordinary weekly pay and average weekly earnings over the previous 12 months (section 21), so someone taking leave soon after a cut may be paid on the busier months for a while.

Casuals, availability and cancelled shifts

Truly casual employees have no guaranteed hours, so offering them less work is not a change to their agreement. Two limits remain. Employment New Zealand says that sending a casual home partway through a shift, or going back on an offer of work they have accepted, could be a dismissal. And someone you call casual but who works a regular, rostered pattern may in fact be permanent part-time, with agreed hours you cannot simply drop; our article on casual versus permanent part-time explains where the line falls.

For shift workers, section 67G lets you cancel a shift only with the notice and compensation the agreement sets. If the agreement has no valid clause, if you tell them only when the shift starts, or if you send them home part way through, they are owed what they would have earned for it. Our article on rosters and timesheets sets out each case.

Watch for the opposite problem too. If you reduce someone's guaranteed hours but still want them on call for busy days, that needs a valid availability provision with reasonable compensation (sections 67D and 67E). Without one, they can turn down the extra hours, and section 67F says you must not treat them worse for doing so.

Show the drop in work with real hours

A proposal is easier to accept when people can see the reason in numbers they recognise. Employment New Zealand's rostering advice is to analyse historical hourly, daily and weekly activity to find the busy and quiet periods. Your hours records are the most direct version of that: the hours actually worked, by person and by job, over the last few months against the same months a year ago.

Use them honestly. Show the whole picture, including people whose hours have held up, and avoid comparing a quiet week with a peak one. Shared with the proposal, the data is part of the relevant information good faith asks for. Afterwards, the same record shows whether the reduced hours were what people actually worked, which is what your wages and time record has to show anyway; our article on wage and time records lists the rest.

Team timesheets from jobtracker.co.nz gives you that view for the people who choose to share their hours: hours by person, project and task for any period, a CSV to compare one period with another, and who has not logged this week. It shows hours, never pay or rates, and has no roster and no approval step. It costs $6.99 a seat a month, GST included, for at least three seats. If the change is still uncertain, Employment New Zealand on 0800 20 90 20 or an employment lawyer can check your proposal before it goes to staff.

The hours behind the conversation