Posted on: Feb 13, 2014

Recently, in the decision of The Salad Bowl Ltd v Amberleigh Howe-Thornley [2013] NZEmpC 152, the Employment Court (Court) has scrutinised the practice of using pre-employment work trials.  We can take some valuable lessons from this case to limit employer’s risk of using pre-employment work trials in the future.

A pre-employment work trial is very different to a “90-day trial period”, and the two should not be confused. A pre-employment work trial is where an employer trials a potential employee’s skills prior to offering employment, unlike a “90-day trial period” under the Employment Relations Act 2000 (ERA) where the employee is employed during the trial period and the employment may be terminated pursuant to section 67A of the ERA.

The following article demonstrates the risk associated with using a pre-employment work trial, and if it is absolutely necessary to use one, the key elements to get right.

Summary of the case

In this case, Ms Howe-Thornley applied for a part-time role with Salad Bowl and attended an interview. At the end of the interview, Salad Bowl indicated that, if Ms Howe-Thornley’s reference checks and subsequent work trial proved to be satisfactory, there seemed to be no reason why she would not be hired for the job. There was no discussion about remuneration.

Salad Bowl invited Ms Howe-Thornley to undertake a three-hour work trial during which she was to be supervised and appraised by the store manager. This took place over two days. On 20 August 2012, Ms Howe-Thornley worked for 1.5 hours. Wearing a Salad Bowl uniform she assisted with a range of tasks, including food preparation and cleaning. On the following day, Ms Howe-Thornley worked for 1.7 hours, after which time Salad Bowl offered her a salad at no cost. This time the range of duties had expanded to direct contact with customers and operating the till.

When Salad Bowl cashed up and reconciled the shop’s takings on 21 August 2012, it discovered an approximate $50 shortfall. Salad Bowl concluded that Ms Howe-Thornley was responsible for the discrepancy and texted her saying: “No need to come into the salad bowl tomorrow. We’ll be in touch”.  Salad Bowl subsequently confirmed that there was to be no job for Ms Howe-Thornley, and when she inquired about being paid for working previously, Salad Bowl responded: “Money missing from till is reason you don’t have a job!” Ms Howe-Thornley expressed surprise and indicated that she had no idea what Salad Bowl was referring to. Salad Bowl responded with a text saying “Goodbye”.

Ms Howe-Thornley raised a personal grievance on the basis that she was an employee at the time of the work trial and had been unjustifiably dismissed from Salad Bowl.

The Employment Relations Authority (Authority) considered Ms Howe-Thornley’s personal grievance in the first instance. It found that Salad Bowl had unjustifiably dismissed Ms Howe-Thornley after only two days of employment and awarded monetary remedies to the approximate sum of $6,000.

Salad Bowl appealed the Authority’s decision. It argued that the parties were not in an employment relationship. Rather, it claimed that Ms Howe-Thornley had participated in a pre-employment work trial to assess her suitability for the vacant position. The Court found Ms Howe-Thornley to be a permanent employee who had been dismissed by Salad Bowl.

Important lessons for employers

The Salad Bowl case has important ramifications for employers who use pre-employment work trials to assess suitability for vacant positions.  It demonstrates the risk associated with using a work trial, and if it is absolutely necessary to use one, the importance of getting the conditions right.

Follow these key guidelines to reduce your risk when using a pre-employment work trial:

• Mere observations of the operation and/or the use of practical tests during the recruitment process are unlikely to create an employment relationship. For example, it may be reasonable to require an applicant for a position as an administrator to perform a set typing exercise designed for the purpose of assessing the candidate’s ability.
• Employers who use work trials should make it explicitly clear (in writing) that this is a pre-employment assessment, that the prospective employee will not receive any remuneration and that no offer of employment has yet been made. It would be prudent to require prospective employees to acknowledge    and sign acceptance of this. Employers should also advise that any future offer of employment will be conditional on satisfactory completion of the recruitment process (eg reference and/or criminal records check, etc).
• Keep any work trial short in duration and require the prospective employee to undertake “mock” work — that is, not “real” work for “real” customers (or unpaid work shifts).
• Employers should carefully tailor the work trial so that candidates are tested on particular tasks central to the position. Employers place themselves at risk of creating an employment relationship where they gain an economic or other business or operational benefit from the prospective employee’s activity. The more that applicants “walk, talk and act” as they would in a “live” work environment if they were to continue working for the employer, the more likely the employer will be found to have crossed the line.
• Do not call it a “work trial”. Call it a “pre-employment assessment”, “evaluation” or “test”. Applicants may otherwise mistakenly assume that they are subject to a trial period under the ERA. There should be no room for confusion.

Provisions for a 90-day trial period

The Court said that if employers want to “try out” potential employees then they may need to use a 90-day trial period provision pursuant to section 67A of the ERA instead of informal work trials.  Although this would impose greater compliance costs, the Court said that:

…such an arrangement would offer some protections to the employee during the trial period but would also enable the employer to conclude that the employee is unsuitable for the position and to terminate the arrangement without the risk of an unjustified dismissal personal grievance.

To view this case online click here 

 

Disclaimer

This article, and any information contained on our website is necessarily brief and general in nature, and should not be substituted for professional advice. You should always seek professional advice before taking any action in relation to the matters addressed.