NEW ZEALAND Law and Practice Contributed by: Ian Beaumont, Tom Gillespie and Sam Kember, Russell McVeagh
days Act 2003, Minimum Wage Act 1983 and other related legislation. Some important considerations in the context of M&A transactions are set out below: • Transfer of business: (a) Asset sale: Employment agreements do not transfer automatically. Employees may be offered new employment by the purchaser and will need to accept employment on those terms. That creates an entirely new employ - ment relationship. Redundancy processes may be required by the vendor if employment does not continue. (b) Share sale: Employment continues unaffected as the employing entity does not change. Li - ability for prior breaches of employment legisla - tion (including issues in respect of holiday pay) transfers unless agreed otherwise. • Vulnerable employees: Certain categories of vul - nerable employees (including cleaners, catering staff and security guards) are entitled to enhanced protections under the ERA. They are entitled to transfer on their existing terms of employment to the purchaser in an asset sale. • Restructuring and redundancies: Where a transac - tion may result in redundancies, the vendor must comply with good-faith restructuring obligations. This will generally require consultation with affect - ed employees, disclosure of all relevant information and genuine consideration of feedback. Failure to carry out an appropriate process may result in unjustified dismissal claims. There is no statutory entitlement to redundancy compensation in New Zealand – this is only payable if provided for in the employment agreement or relevant policy. • Good faith: Good faith underpins all employment relationships in New Zealand and applies through - out a business sale. Employers must act fairly, transparently and reasonably, and must communi - cate openly with affected employees. • Unfair dismissal: Certain classes of employees who believe they have been unfairly dismissed can raise a personal grievance for unjustified dismissal and file a claim in the Employment Relations Author - ity. On 21 February 2026, a salary threshold was introduced as an amendment to the ERA, so that employees earning more than NZD200,000 in total
annual remuneration cannot bring a grievance relating to their dismissal. • KiwiSaver: Employers must make KiwiSaver deductions and make applicable employer con - tributions for eligible employees. The minimum employer contribution rate was 3% of gross remu - neration; however, this was increased to 3.5% from 1 April 2026 and will be increased to 4% from 1 April 2028. These obligations continue following a business sale or transfer. If the vendor has another superannuation scheme in place, the purchaser will need to consider whether it wishes to continue offering the scheme once the transaction com - pletes. 2.6 National Security Review An acquisition that requires consent under the OIA or involves an investment in a “strategically important business” (see 2.3 Restrictions on Foreign Invest- ments ) will undergo a national security review to deter - mine whether or not the acquisition could be contrary to New Zealand’s national interest, or otherwise gives rise to any national security or public order concerns. Transactions that are not captured by the OIA are not subject to any other national security review or regu - lation. 3. Recent Legal Developments 3.1 Significant Court Decisions or Legal Developments The most significant recent legal development in New Zealand relating to M&A is the reforms of the OIA at the end of 2025, which came into force on 6 March 2026. These reforms represented the most comprehen - sive overhaul of New Zealand’s overseas investment regime in over 20 years, and formed part of the New Zealand Government’s broader strategy to promote foreign direct investment in New Zealand by mak - ing it easier to invest and faster to obtain investment consent, while also ensuring New Zealand’s national interests are protected where appropriate.
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