Legislation for the 90-day trial period has been in effect for many years. However, various adjustments have been made during this time.
While a lot of businesses are using the 90-day trial period correctly, we often hear from managers who have questions or misconceptions around it. To provide some clarity we have outlined a brief overview of both employer and employee rights and responsibilities.
What is a valid trial period?
- Only employers with 19 staff or less can employ a new employee on a trial period.
- A trial period can be used in any industry for any job.
- A trial period can be up to 90 days and the duration must be clearly stated in an Employment Agreement.
- The trial period must be agreed between the employer and the employee – an employee does not have to accept a trial period.
- A trial period cannot be extended beyond the stated period.
- If you plan on implementing a trial period, it must be stated when the initial job offer is made.
- Employees must be given a reasonable opportunity to take legal advice on the trial period prior to accepting employment.
- The Employment Agreement must be signed prior to the new employee starting and is effective from the date the Agreement is signed.
- If an employee starts before signing the Agreement the trial period clause becomes invalid.
- A trial period is only available to new employees, (and not anyone you have employed previously, no matter how long ago it was).
During the trial period
- During the trial period the employer can dismiss the employee without the employee being able to take a personal grievance for unjustified dismissal.
- An employee on trial can still raise other personal grievance issues such as discrimination/harassment, unjustified disadvantage or health and safety.
- Notice must be given within the trial period, even if the actual dismissal doesn’t become effective until after the trial period ends.
- You need to give notice as it states in the employment contract – for example, if the notice must be given in writing, then you cannot give it verbally, and for the time period stated.
Probationary period versus trial period
A probationary period is different to a trial period. It provides an opportunity for an employer to assess an employees’ skills or for the employee to demonstrate that they have the skills to do the job. It can be used when an existing employee starts a new role within the business. The time frame must be recorded in writing, it is a paid period, and must be negotiated in good faith.
Where to get advice
Employment New Zealand clearly sets out the roles and responsibilities for trial periods and for probationary periods. The key differences are that a trial period must be agreed in advance and included in an Employment Agreement for a new employee. The probationary period must be in writing but can be implemented for an existing employee.
We recommend getting legal advice to ensure you follow the right steps. For now, make sure any new employment contracts are correctly worded and that you follow the process before a new person starts.
Disclaimer: this article does not constitute legal advice. Please consult with a lawyer for all Employment Agreement inclusions.