90-day trial period.

90-day trial period.

A trial period can be useful for both employers and employees in ensuring that the role and the company is appropriate for both parties. Despite their advantages, there are some important conditions and rights which employers need to comply with.

Importantly, an employee can be placed on an employment agreement for the first 90 calendar days of their employment provided it is written in the agreement before the employee starts work and certain criteria are met.

What is a valid trial period in New Zealand?

The following list outlines some of the key components of a valid trial period, provided the employer must be a small to medium employer, meaning an employer who employs fewer than 20 employees at the beginning of the day the employment agreement is entered into.

A valid trial period:

• Will be written in the employment agreement by way of a 90-day trial period clause before the commencement of work, and agreed to by both parties
• Must be entered into willingly and in good faith. ie an employee cannot be forced into a trial period
• Removes the ability for an employee to bring a personal grievance for unjustified dismissal provided the employer has provided the correct amount of notice
• The employment agreement needs to be signed before commencing employment
• The 90-day trial clause needs to stipulate when the 90-day trial commences

For those employees covered by a collective agreement the trial period must be in line with what is outlined in the agreement. For example, if the collective agreement states they cannot be employed on a trial period, then the individually negotiated additional terms of the employee’s contract cannot start the employee on a trial period.

Trial period employees’ rights and responsibilities.

Those employees on valid trial periods are entitled to all of the minimum entitlements of employment such as minimum wage, annual holidays, public holidays, sick leave, and health and safety conditions. Employees on trial periods must be treated equal to the way other employees are treated, to the point where action by employers which distinguishes between the two can enable legal action against the employer.

A personal grievance can still be brought by an employee on a trial period on any other matter except their dismissal. For example, allegations of sexual harassment, pressure regarding union membership, or discrimination are some valid reasons for an employee to raise a personal grievance.

Notice of dismissal.

The notice required for terminating an employee during a trial period is what is specified in the employment agreement. That is, if four weeks’ notice is required under the agreement then the same is the case during a trial period. The Employer may specify a shorter notice period during the trial period.

Failing to give appropriate notice to an employee will mean the trial period is invalid. The notice for dismissal must also be given during the trial period. For example, if the notice period is one week and the trial period is six weeks the employer must give notice prior to the end of the sixth week.

In dismissing an employee on a trial period the employer does not need to give reasons for their dismissal. However, best practice is to give a reason or at least feedback to ensure the employee has learnt something from the trial period in line with good faith provisions.