90 Day Trial Period

90 day period rules

Trial Periods are Complicated.  There are very strict rules about how they are used. You still have rights.

Calculate Your Trial Dates

The 90 day trial period is a period when an employer can dismiss the employee without the employee being able to raise a personal grievance for unjustified dismissal.

If you have been dismissed during your 90 day trial and you want to know if it’s legal or fair give us a call. We will check it for you.

It’s complicated:

The Trial Period is not an automatic right of employers, it must be done correctly:

90 Day Trial Rules

  • Only an employer with 19 or fewer employees (at the beginning of the day on which the employment agreement is entered into) may employ a new employee on a trial period for the first 90 calendar days of their employment. 
  • The worker must be a new employee.
  • There must be a written employment agreement that contains a trial period clause. That clause must state the exact time period and that during the trial the employer can dismiss the employee and the employee can’t bring a personal grievance or other legal proceedings about their dismissal.  (Please note all your other rights as an employee remain and you may still raise a personal grievance on other grounds).
  • The agreement should state an official start date for a 90-day trial period.
  • The employment agreement must be signed by the worker before they start work. (If the worker starts at 9am and their agreement is signed at 9.05am on the same day, the trial is invalid)
  • The worker must have had time to get independent legal advice on the employment agreement.
  • If required, notice under the trial period must be given within the 90 days.
  • When the trial period finishes, unless the employee has been dismissed they become a permanent member of staff.

Can my employer fire me within 90 days even if I haven’t done anything wrong?

As long as the employer gives you notice of dismissal within the trial period they can dismiss you without consulting with you beforehand and for any reason. You can not bring a personal grievance against the employer in relation to the dismissal.  But, you can bring a personal grievance claim based on other grounds such as discrimination, harassment, or to recover unpaid wages. Aside from the employer’s ability to dismiss you, you should not be treated any differently from any other employee.

There are some general good faith obligations:
Your employer has an obligation to ensure that you have the tools and equipment to do your job and provide any training or coaching that is appropriate to ensure you’re successful in your role. If there are issues or concerns with any element of your employment, your employer has an obligation to ensure that they’ve raised them with you and given you the opportunity to rectify any concerns.

If the trial period isn’t going well and the employer decides to dismiss the employee, they must give notice to the employee that they will be dismissed.

The notice:

  • Must be the amount of notice in the employment agreement. If the employer doesn’t give the employee the right amount of notice then the trial period is invalid and the employee will continue to be employed (or if they were dismissed, they could bring a personal grievance for unjustified dismissal). For example, the employer can’t tell the employee that they are dismissed effective immediately if there is a 1 week notice period in their employment agreement.
  • Must be given within the trial period, even if the actual dismissal takes effect after the trial period ends. For example, if the trial period is 8 calendar weeks and the notice period is 1 week, the employer must give notice to the employee before the end of the eighth week, even though the employee won’t leave until the end of their notice period.
  • Doesn’t have to have reasons for the employee’s dismissal.

As long as all the 90 day trial rules are followed the employer is not required to give reasons for the dismissal.

Check your employment agreement to confirm there is a trial period clause.

Unless it’s in writing and signed by both employer and employee before the employee starts, the trial period isn’t valid.

If you are an Employee and have been dismissed under the 90 day trial period and you are not sure it’s fair contact us and we will check your rights.

If you believe you have a claim – you need to ensure you raise it no later than 90 days after the termination of your employment.

sources: Citizens Advice Bureau, stuff.co.nz, Employment New Zealand, The leading source of information on employment in New Zealand.

Call us on 0800 669 466 or email us using the form below so we can connect you with one of our team to help.

What is a 90 day trial period?

A 90 day trial period is a clause an employer may put in your employment contract which, when used correctly, enables the employer to take on a new employee on a trial basis for a period of 90 days.  If, for any reason, the employment relationship does not work out within the first 90 days the employer may end the employment relationship without the risk of the employee raising a personal grievance.

Watch our simple explainer video on ‘What is a 90 Day Trial’

I have been dismissed with no notice on my trial period, is that fair?

There should be a clause in your employment agreement which states how much notice you will be given if you are dismissed during your trial. In general this means that if the employer wants you to leave straight away (rather than working through your notice period), then they must pay you for the notice period.

The notice period for your trial period can be different from the notice period once you are finished the trial period, as long as the notice period for the trial is specified in the employment agreement. If the notice is not specified for the trial then your employer should adhere to the notice period in the employment contract.

If you are confused about your notice period, or have been dismissed on the spot without any notice you can call us free to find out if there is a case for unfair dismissal.

What are the employment law rules for a 90 day trial period?

If the 90 day trial clause is uses incorrectly an employer may be shocked to find out that the employee can still raise a personal grievance or claim unfair dismissal despite the 90 day trial clause being present in the employment contract.

A trial period can be less than 90 days
We refer to the 90 day trial clause but the number of days can be less than 90 days, and the exact number of days needs to be specified on the employment agreement.

The 90 day trial clause may be invalid if:

  • You were not informed in writing that your employment contract contained a 90 day trial period before you started work. Or if you signed the employment agreement after you had already started work (even by a few hours)
  • You have previously worked for the employer
  • Your employer has more than 20 employees
  • You were not advised that you had the right to seek independent legal advice or given time to seek advice before signing the contract

The clause didn’t include the correct wording of the Employment Relations Act 2000 Section 67A :

67A When employment agreement may contain provision for trial period for 90 days or less

(1) An employment agreement containing a trial provision may be entered into by a small-to-medium-sized employer and an employee who has not previously been employed by the small-to-medium-sized employer.

(2) For the purposes of this section and section 67B,—

small-to-medium-sized employer means an employer who employs fewer than 20 employees at the beginning of the day on which the employment agreement is entered into 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 small-to-medium-sized employer may dismiss the employee; and
(c) if the small-to-medium-sized employer does so, the employee is not entitled to bring a personal grievance or other legal proceedings in respect of the dismissal.
Section 67A: replaced, on 6 May 2019, by section 36 of the Employment Relations Amendment Act 2018 (2018 No 53).

How much notice do I have to give if I leave my job during my 90 day trial?

Every employment agreement requires that the parties give each other notice to end the relationship.

The notice you give should be the same as the notice that your employer would have to give you according to the trial period clause in your agreement. As the employee you also should act in good faith.  If you are unhappy in your new job we would encourage you to have a conversation with your employer.  If you leave without giving the notice period that is set out in your employment agreement the employer may deduct wages in lieu of notice. In the event that the employer suffers a financial loss as a result of you failing to give notice the employer may take action in the Employment Relations Authority to recover those losses and to seek a penalty.    If you find yourself in the position of wanting to leave and are unable or unwilling to give notice you should seek legal advice from an employment lawyer or advocate.   It’s free to call us to discuss your situation with us.

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When is a redundancy not a redundancy?

As awful as it sounds, the closer we get to Christmas the more and more we hear about organisations needing to make the tough calls about the structures and resourcing that they require to see them be successful in the coming year.
 
There’s never a good time to have to make people redundant, but when it’s done right (sensitively, for genuine reasons, fairly and transparently), it does make a difference on how exiting employees view (and talks about) their organisation in the future.  
 
In New Zealand over recent years, there have been ebbs and flows in terms of the level of interference the government has had in decisions made by organisations when it comes to redundancy processes and the results of those processes. 
 
However, recent decisions in both the Court of Appeal and the Employment Court suggest that there is much closer scrutiny of organisational restructures with the following key elements being identified as critical to an organisation’s success in running a good process and staying on the right side of the law:
 

1. Substantive justification. 

 
This means that the employer must be able to establish that a position is genuinely surplus to its requirements (based on clear evidence and ideally presented to the employee at the time of the proposal), and that it is not a change being implemented for any other reason (i.e. to exit a problem employee). 
 

2. Procedural fairness. 

 
This means that the employer must follow a fair process in implementing the redundancy (and this is covered in s 4 of the Employment Relations Act and implied obligations of good faith) which includes:
 
  1. Consultation the employer must consult with all employees impacted by a proposed change. This consultation needs to be genuine and all feedback received as a result of the consultation needs to be given real consideration prior to the organisation making a decision on how to proceed;
  2. Consideration of alternatives – these include redeployment and transfer, and should be genuinely considered prior to making an employee redundant.
  3. Fair selection processes – where an organisation is proposing to have more employees than roles available, it must undertake a fair selection process. This includes the use of objective selection criteria (based on the requirements of the remaining roles) and should (ideally) be given to the candidates of the roles prior to being finalised to ensure they understand which criteria they are being assessed against.
  4. Informing the employee of the outcome – ideally this occurs in a face to face meeting, and should occur ahead of anyone else in the organisation becoming aware of your employee’s situation.
  5. Notice and redundancy compensation – making sure that any payments made to your employee are in line with the requirements as outlined in their employment agreement. 
 
I’ve detailed above what an organisation needs to do in order to run a great restructure process – but my post wasn’t called “how to run a great restructure”!
 
I asked the question “when is a redundancy not a redundancy?”
 
I suspect for many organisations, it’s where they have a challenge with an employee and they think that perhaps a restructure might be easier than managing performance.
 
Or the organisation thinks it might be easier to do a restructure, especially where there are no substantive disciplinary issues that would form the basis for a termination. 
 
For small organisations without an HR function, a restructure might seem like something to cure all ills.
 
Let me stop you there!

Organisations will get into just as much trouble from a poorly conceived restructure as a badly run / unsubstantiated disciplinary process.

 
The result will be exactly the same – an employee claiming an unjustified dismissal
 
I understand that getting restructures and redundancies right can seem like a herculean task and the likelihood (and cost) of getting it wrong, is very scary indeed! 

Sometimes, the best thing you can do for your organisation, is admit that it’s not your skill set and ask for help!

We can help you design and execute a seamless, end to end restructure process that ticks all the boxes and mitigates the risks for your business.
 
A good process, executed fairly, can make the difference between losing the trust and confidence of your team or ensuring that your business is set up for future success. 
 
Genuine restructures, while difficult, if communicated appropriately and sensitively, will more often than not trigger understanding from those most impacted.
 

If you’re looking to kick off a restructure process and need some help, call us on 0800 669 466 and let us connect you with the right people and processes to help or email us using the form below. 

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Employers : Get our help to defend Personal Grievances

We have extensive experience in managing personal grievances and minimising costs and other risks to employers who find themselves in these difficult situations.

If an employee has lodged a personal grievance – or maybe if you think they are going to – talk to us about what you need to do to avoid a personal grievance or manage it effectively so that you can get on with running your business.

If you contact us early in the process – we may be able to help you avoid having to deal with formal litigation, however (if it becomes necessary) we will support you through the Employment Relations Authority or the Employment Court.

The potential cost of an ERA case is why it is so important to get your process right the first time. Once it gets there even if you win it costs you. Work Law Ltd can assist you at any level in the process. Our preferred approach to a personal grievance is to reach a resolution as soon as possible to save you time and money.  

We can assist and advise with procedures so that personal grievances don’t occur or become excessively expensive.

Call us on 0800  669 466 and let us connect you with the right people and proccesses to help or email us using the form provided below.

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Making an employee redundant – It’s okay to restructure if done correctly

Sometimes it becomes necessary for employers to make staffing changes 

e.g. increasing or reducing staff, changing roles and job descriptions, etc. 

Any employer who handles such situations inappropriately risks costly disputes by staff members who have been affected by your need to restructure.

When you’re the employer in the small to medium sized business, employment issues can be overwhelming and time-consuming. This usually takes up a lot of precious time when you still have to run your business.

Unfortunately things don’t always go to plan, inevitably there will be times when you need to make changes to your business structure and your team.

We can advise you on the correct procedures to follow to avoid your employees needing take a legal case against you.

We advise employers whether they have a potential redundancy situation according to New Zealand workplace law and process they should follow to ensure the process is conducted in compliance with the employer’s contractual obligations.

Usually, the best way for employers to deal with such issues is to have well-worded Employment Agreement documentation and appropriate policies in place. Use appropriate support as you work through the consultation and restructuring process.

Priced from $450.00 (+GST). We can provide Employment Agreement documentation that will meet all of your legal obligations and also the specific needs of your business.

Whether or not you have used our documentation – we can also provide representation and support to help you deal with staff restructuring situations. Contact Us Now for an obligation-free discussion

Employment Relations Act – Part 6A Continuity of employment if employees’ work affected by restructuring

Call us on 0800 669 466. Let us connect you with the right people and processes to help or email us using the form provided below.

 

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Disciplinary Meetings

Need to discipline an employee for misconduct? You must follow a fair process, and have a good reason.

It’s easy to get the process wrong when you need to discipline an employee.  The danger in not getting it right is that your employee could raise a personal grievance if you get it wrong.

The purpose of performance management is to help the employee be successful. Drawing boundaries for appropriate behavior on the job is important.

Things don’t always go to plan. Sometimes it becomes necessary to address issues of poor performance/misconduct by staff members to get your staff performance back on track. 

When the process is carried out incorrectly,  you end up exposing yourself to a greater risk of the employee raising a personal grievance against you. Commonly raised as a unjust disadvantage and an unjustified dismissal.

We can also provide representation to help you deal with issues of misconduct by staff.

The best way to deal with Performance and Disciplinary Issues is to prevent them from happening in the first place by having well-worded Employment Agreement documentation and appropriate policies in place.  Dealing with these issues as soon as they arise is also crucial to prevent workplace issues.

Contact Us Now for an obligation-free discussion

Call us on 0800 669 466 and let us connect you with the right people and proccesses to help or email us using the form provided below.

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Employment Agreements

A clearly written employment agreement can help reduce the risk of misunderstandings. Every employee must have a written employment agreement, which must be signed by both the employee and the employer. This can be either an individual agreement or a collective agreement. As an employer – you are breaking the law if you do not have Employment Agreement documentation for your staff.

Employees are entitled to a copy of the employment agreement they have signed prior to commencement of employment. This is one of the employee rights.

You can save your company from misunderstandings and costly litigation by having a simple, well-worded document that clearly outlines its intentions to both parties.

Priced from $450.00 (+GST) – we can provide documentation for Employment Agreements that will meet all of your legal obligations and also the specific needs of your business.

We can also provide representation to help you apply the conditions outlined in the document – and to defend any legal claims made by your staff.

Subject to specific conditions – if EES is providing representation for your company in enforcing, or defending any claim relating to, an Employment Agreement we have provided for you – and the opposing party wins the case “due to the wording of the Employment Agreement documentation” (c.f. the application of the Agreement) then there will be no charge for any representation costs provided by EES.

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