Any employer now has the option to employ new staff members under a 90-day trial period, however it is critical that the employer follows the correct process.
A valid trial period must be agreed in the employment agreement before any work commences and it must be agreed upon in good faith. The clause must be for 90 days or less starting from the date the employee will begin work.
During a trial period, if the employment is not satisfactory, the employer can terminate the contract without the employee being able to lodge a valid personal grievance for unjustified dismissal, provided the trial was validly applied.
If the employer has not met the requirements to rely on a 90-day trial period, it may be deemed invalid, likely opening the door for a personal grievance claim.
As what happened in this case where the Authority deemed a dismissal unjustified due to significant procedural defects in the employer's process and awarded remedies in the employee's favour costing the employer over $23,000.
Prior to any employment agreement being signed and agreed to, the employer began working for the employer. The employee spent two days at the funeral home observing work and, after discussions with the employer's daughter, agreed to backdate the start date to the Monday of that week. The employee signed the employment agreement on Wednesday, as instructed by the employer's daughter, and was paid for the week.
Two months later, following customer complaints, the employer dismissed the employee under the 90-day trial provision. However, the Employment Relations Authority found the trial provision invalid because the employee had already worked for more than two days before signing the agreement. The Authority found that the 90-day trial provision contained in the employment agreement was invalid and therefore determined due to significant procedural defects in the employer's process the dismissal was unjustified.
Read the full details here:
https://determinations.era.govt.nz/assets/elawpdf/2023/2023-NZERA-587.pdf
Dismissal during the trial must still follow proper notice procedures and should be based solely on the trial clause, not on other factors like misconduct or performance issues.
If you have concerns about the legitimacy of a trial period, contact us. Our expert lawyers will provide advice on whether it is valid.
