John Shingleton, managing director of First Law – www.firstlaw.co.nz
Since May 2019, if you employ more than 19 employees, you are no longer permitted to have any new employees on a 90-day trial. Instead, you will have to satisfy yourself with employees on a probationary period.
Trial periods are still governed by the Employment Relations Act 2000 and the rules have not changed. Essentially, by employing an employee under a 90-day trial period, an employer will benefit from an immunity against a personal grievance of unjustified dismissal provided they:
1. Have not employed the employee before.
2. Ensure the employment agreement includes written provisions that stipulate the date the trial period commences, that the employee is subject to a 90-day trial period and that during the trial period the employer can dismiss the employee without being subjected to a personal grievance by the employee in relation to the dismissal.
3. The employee has agreed to the employment being on a trial basis.
4. Ensure there is evidence the employer explained to the employee to seek independent legal advice before signing the employment agreement and gave the employee a reasonable period of time to obtain that advice.
5. The employee signed the agreement before the employee commenced employment.
6. Invoke the clause in writing when terminating the employment agreement.
7. Have not breached any provisions of the Human Rights Act 2000 and acted in good faith.
If the technicalities are properly followed, then the decision to dismiss ought to be upheld.
It is important employers do pay great attention to the technical aspects of 90-day trial periods. The Courts have made it clear they will strike 90-day clauses down if there is a technical defect.
In 2010, Judge Colgan of the Employment Court said that because the effect of the regime was to deprive employees from access to justice, the provisions of the Act must be strictly interpreted.
Since 2010, the case books are full of cases whereby employers failed to abide by the technicalities.
This can be very costly because if an employer terminates someone’s employment in reliance of a 90-day trial clause that is then struck out as invalid, then it is inevitable the dismissal will be determined to be unjustified for breach of fair process.
Probationary periods should not be confused with trial periods. With a probationary period, the employer is never immune to a personal grievance of unjustified dismissal. My next article will cover probationary periods.
About First Law
First Law was the visionary idea of John Shingleton, the founder of Online Lawyers.
A very experienced business lawyer, John was not satisfied that the traditional law firm model actually put people’s needs first.
Determined there should be a more helpful, cost-effective way to access great legal services, John combined his experience, knowledge and expertise with like-minded professionals, who embrace the vision of First Law.
Together they developed a smarter ‘new law’ model that embraces new technologies and adopts a flexible, accessible, responsive and agile approach to helping clients find solutions while making their journeys simpler.
First Law is a people-first law firm that combines great legal services with emerging technologies and innovative ways of working.
We’ve redefined the way you access legal services so you can get the important things done simply, quickly, affordably and with total transparency. Working in ways that are better for people, and better for you, is just better thinking.