Skip to content
Get in touch
Handshake - Exit Negotiation NZ

Exit Negotiation

What It Is

Exit negotiation refers to the process of resolving employment disputes or ending an employment relationship by mutual agreement, rather than through disciplinary action, resignation, or dismissal. This is an agreement that the employee will resign on certain terms and conditions, normally in return for a payment or benefits. The agreed terms will be recorded in a ‘Settlement agreement’ which both parties sign. The exit package is confidential and will include your terms and conditions that are agreed upon, it removes the employee’s ability to raise a personal grievance.

An exit negotiation often arises where trust and confidence have broken down, or where both parties wish to move forward without formal litigation. Handled correctly, it allows employees to leave on fair, respectful, and compensated terms — protecting reputation, references, and financial wellbeing.

At Solidarity Employment Advocacy, we guide employees through the exit process to ensure outcomes that are lawful, voluntary, and beneficial.

Your Rights and the Law

  • ERA 2000 s 4(1A) — Employers must act in good faith, including when negotiating an exit or settlement.
  • ERA 2000 s 103(1) — Employees may raise a personal grievance if pressured into an exit or if termination was unjustified.
  • ERA 2000 s 149 — Mediation settlement agreements certified by the Ministry of Business, Innovation and Employment (MBIE) are final and binding.
  • Human Rights Act 1993 s 22 — Protects against discriminatory or retaliatory exits.
  • Privacy Act 2020 s 22 — Requires confidentiality in negotiation and settlement.
  • GF v Comptroller of the New Zealand Customs Service [2023] NZEmpC 101 — Reinforced that exit decisions must be genuine, not coerced, and preceded by good-faith communication.

When Exit Negotiation May Be Appropriate

  • Following workplace conflict or restructuring.
  • As an alternative to disciplinary or performance management.
  • When employment relationship trust has broken down.
  • Where a negotiated settlement avoids litigation stress and costs.
  • When an employee seeks compensation and a neutral reference.

Process (How It Works)

  1. Initial Consultation – Our advocate assesses the employment situation, identifying risks and leverage for negotiation.
  2. Draft Exit Proposal – We prepare a written proposal or response outlining terms sought (e.g., notice pay, compensation, reference, confidentiality).
  3. Negotiation with Employer – Conducted directly or through MBIE mediation under ERA s 149.
  4. Settlement Agreement – Includes full and final resolution, non-disparagement, and release clauses – signed by both parties.
  5. Certification by Mediator (optional)– Ensures legal finality and enforceability under ERA s 149(3).

Potential Outcomes / Remedies

  • Ex gratia payment for loss of employment or distress.
  • Payment in lieu of notice and unused annual leave.
  • Positive or neutral reference for future employment.
  • Confidentiality and non-disparagement clauses.
  • Withdrawal of disciplinary actions or resignation recorded as mutual.
  • Certification under ERA s 149 — preventing future disputes over the same matter.

Take Action Today

If you’re being pressured to resign or offered an “exit package,” get independent advice before signing anything. Alternatively, you may wish to pre-emptively initiate exit negotiations. Get in touch with us to arrange a no-obligation consultation about your situation. We’ll assess your case, explain your options, negotiate fair terms, and ensure your exit is respectful, compensated, and legally secure under the Employment Relations Act 2000.