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90-Day Trials

90-day trial periods can be useful for both Employees and Employers in ensuring that the role and the organisations culture are a fit. 

 If an Employer correctly dismisses an employee during a valid trial period then the employee cannot bring a personal grievance for unjustified dismissal or other legal proceedings in respect to that dismissal. 

Legislation states that for a trial period to be valid: 

  • the employee has not been employed by that employer before;
  • the employer had less than 20 employees at the start of the day the employment agreement was entered into;
  • there is a clause in a written employment agreement with the new employee specifying certain details of how the 90-day trial period will operate; 
    • the employee, for a particular period beginning on the first day of employment, is serving a trial period;
    • during this time, the employee may be dismissed; and
    • if this occurs, they will have no ability to pursue an unjustified dismissal claim.
    • the notice period for dismissal under the 90-day trial and that it may be paid in lieu. 
  • the employer gives notice to dismiss the employee within the trial period.

In a case between Berea v Best Health food Ltd (2020), On the applicant’s first day the employer became unhappy with her work. That afternoon the employer told the applicant they did not need her any further. The applicant collected her belongings and left.

Later the same day the employer emailed a letter to the employee, purporting to give her notice that her employment was to be terminated in three days. The letter said the employer would pay her for the three days and not require her to work. The EA said the employment could be terminated with “three days’ notice by either party, or payment in lieu of such notice”.

The Employment Relations Authority found though the trial provision was valid; the employer could not rely on it, because the employer did not give the employee notice as required under the EA. The Authority found the employer failed to give notice, when it sent the employee away first and then purported to give her notice in a letter later on.

The Authority awarded the employee lost wages and $12,000 compensation for distress, without any reduction for contribution.

So, as you can see from the above case, getting one detail in the process wrong can be costly. Here are my top 5 tips for using the 90-day trial

Top 5 tips

1)  Once you have chosen the next superstar to join your team, I would recommend providing your applicant with a written employment agreement (that has a comprehensive 90-day clause), mentioning to them verbally that they will be under the 90-day trial and that you recommend that they seek legal advice before signing the documents. You should allow them at least three working days to review and seek legal advice. 

2)  In the couple of days before your new employee officially starts work, check that you have all the documents back from them, they are signed and dated accordingly. 

3)  It is also a good idea to check in with the employee at the 30-day and 60-day mark, providing them with honest feedback on how they are going and where they need to improve. If something does go wrong, bring it up with them and address the issue. If the employee doesn’t know they are doing something wrong then how can they improve?  

4)  When dismissing someone – don’t simply say this isn’t working, don’t bother coming back tomorrow. Look at the employment agreement and see what the process entails and specifically what notice you have to provide. If you feel like the notice period is too long, consider paying them in lieu (if the employment agreement allows this). 

5)  Lastly, when dismissing someone under the 90-day trial, the employer does not need to give a  reason for the dismissal. However, it is best practice to give feedback so the employee can learn from where they went wrong. Additionally, if the employee asks for a reason, then you must provide them with one. 

If you have any questions or concerns about the 90-day trial period, please call us on  0800 HR LIVE. We want you to have all the support you need and if we can help in any way, let us know!  



 

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