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Ask Our Specialist – Can I Dismiss an Employee Within the 90-Day Trial Period?

Published March 12, 2018 (last updated November 19, 2020) Author: Employsure
Employsure-Trial-Period

Question:

One of our employees is not working out. They’ve completed a few of trial days of work before they signed their employment agreement and officially started working with us. The employment agreement included the 90-day trial period. Can we end their employment under the 90-day trial provision?

Answer:

Unfortunately, no.  When hiring a new employee, a trial period can be a great way to ensure the role and company are a good fit for both parties. Despite the advantages, there are some important conditions which you need to comply with.

What is a valid trial period?

New employees to a company can be placed on trial period for the first 90 calendar days of their employment. This is provided the trial period clause is included in their employment agreement, states when the 90-day period commences, and is signed before the employee has started work (this includes any days they may complete prior to ‘officially’ starting with the company).

Doing this protects an employer from a personal grievance being raised against them for unjustified dismissal. But, remember, the wording of the trial period clause needs to comply with provisions in the Employment Relations Act 2000, or it could be deemed invalid.

What are employee’s rights during the trial period?

Employees under a trial period shouldn’t be treated differently to the rest of your staff. They have the same right to minimum employment standards as any other worker. This means that they should be paid minimum wage and will, in some circumstances, have access to particular entitlements under the Holidays Act 2003.

All employees are also covered by the requirements of the Health and Safety at Work Act 2015, even if they are under a trial period.

Can an employee raise a personal grievance for unjustified dismissal during the 90-day trial period?

As long as you have complied with the notice requirements in their employment agreement, an employee under a valid trial period cannot raise a personal grievance for unjustified dismissal.

However, you still have a duty to act in good faith. If you’re not sure that you’ve followed all the right steps, you should seek advice about your specific circumstances before you take any action.

So, what is the right notice of dismissal?

If, for whatever reason, you or the employee decide the position isn’t right for them, there will be notice conditions you need to adhere to.

It’s best to specify notice periods in the initial employment agreement they signed before they started working for you. It should specify how much notice an employee needs to provide if they wish to resign. You can also have a specific 90-day trial period of notice provision for termination too.

However, it is best to seek specific advice about how to ensure this is appropriate for your business.

What can you do?

Start with the right information. A 90-day trial period to make sure an employee is the best fit is good for you and the employee. However, setting up the the employment agreement to cover this period and managing the trial period can be complicated; and, if done incorrectly, can leave you liable to legal action.

For advice on how to manage trial periods, speak with an Employsure specialist on 0800 568 012.

About Employsure

Employsure is one of New Zealand’s largest workplace relations advisers to small and medium businesses, with over 5,000 clients. We take the complexity out of workplace legislation to help small business employers protect their business and their people.

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