Posted on: Sep 12, 2016

Speculation over the 90-day trial period and whether it is valid or not has come to light again with a recent case out of the Employment Relations Authority, see: Clark vs Lighthouse ECE Limited [2016] NZERA Auckland 281.

The Authority found that the trial period clause was invalid, because it did not specify the date that the 90 day trial period would commence, nor did the clause refer to a commencement date recorded elsewhere in the employment agreement as being the date that the trial period would commence.

Although a commencement date was recorded in an attached schedule, the Authority found that it did not reasonably imply that the 90 day trial period also started on that date.  This may have otherwise been acceptable, however, there was no link from the original trial period clause to the commencement date specified in the schedule.  As such, the the Authority considered the employee was not effectively advised of the date on which the trial period would commence, and found the Trial Period clause to be invalid.

The relevant legislation s67A(2) of the Employment Relations Act 2000 specifies:

A Trial Provision means a written provision in an employment agreement that states, or is to the effect, that-
(a) For a specified period (not exceeding 90 days), starting at the beginning of the employee’s employment, the employee is to serve a trial period; and
(b) During that period the employer may dismiss the employee; and
(c) If the employer does so, the employee is not entitled to bring a personal grievance or other legal proceedings in respect of the dismissal.

When dismissing an employee under 90-day Trial Period – there are now a few extra points we think you need to consider:

• Does the trial period clause specify a commencement date?
• If not, does the trial period clause refer (link) to a commencement date recorded in any other part of the employment agreement or schedule?

In addition to…

•  Was the employment agreement signed and returned prior to the commencing (starting) work day?
• Have you, as an employer, in good faith, communicated to the employee that ‘things are not going well’, and that they ‘may not be employed past the 90 days’?
• Have you given the employee an opportunity to improve?
• Are you within the 90-day period time frame?

These are all valid points to cover off in order to reduce your risk.  Should you need us to review and amend your employment agreements please let us know.  It’s not a big job, but it’s important that the wording is correct.  If you are unsure of what your risks are, then before you dismiss, please call us first to discuss.

 

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.