Your partner will need to submit an application for a further Work Visa in order to legally remain in New Zealand while the Resident Visa application is under consideration.
If the existing Work Visa expires, and an application for a further temporary visa (i.e. Visitor, Work or Student Visa) is still under consideration, INZ will almost always automatically issue an
Interim Visa to keep your partner legally in New Zealand until a decision on the further temporary visa is reached. Note that an Interim Visa is not issued in the case of a temporary visa expiring while a Resident Visa is under consideration; hence, the likely need to submit an application for a further Work Visa (given
current processing times, the current Work Visa will likely expire before a decision is made on the Resident Visa).
To quote INZ themselves on the Interim Visa factsheet (linked above): "If you’ve applied for a resident visa, and you think your visa may expire before we make a decision about your residence application, you should apply for a temporary visa too. That way you’ll be eligible for an interim visa if you need one." This nicely summarizes what you and your partner will likely need to do.
You will not need to submit your physical passport with either application if applying onshore: a certified copy of the biodata page is sufficient. For most onshore applications, INZ will have already sighted the passport itself, so they often will deem it unnecessary to sight it again. If they do decide that they need to physically verify your passport, your case officer will let you know -- but from my own experience, this happens after the case officer makes the decision to approve the application (and said decision has gone through the second-person quality control check). You would receive an "Approved in Principle" letter stating that you will need to submit your passport before your visa will be formally issued. (This happened with our Resident Visa application as we renewed one of the passports while the application was under way, and INZ issued an AIP stating that, for the visa to be issued in the new passport, it needed to be submitted -- and the visa was issued days after they received it.)
So, for us, the process looked like this:
- Resident Visa application submitted
- Partner needed to renew her UK passport
- Case officer assigned, began working through the application
- Partner received her new UK passport and let case officer know (sending through a certified copy)
- Case officer completed her evaluation and sent it to second person checking
- Second person checking completed
- Approved in Principle letter issued; application approved but partner would need to send through new passport for physical verification before visa would be issued
- Passport sent (later that same day!)
- Visa issued and passport returned
If applying from South Africa, you will almost certainly have to submit your passport to the Visa Application Centre in Pretoria (blame fraudulent passports issued by corrupt officials at the Department of Home Affairs for this), but my experience with them is that they are quick about physical passport verification, and (if instructed to return your passport via courier) will do so the next business day.