90-day trial periods can now be used by all businesses, large and small. But there are rules!
A common misconception is that employers can just dismiss an employee within the 90-day trial period. That’s not the case.
As always, the employment agreement is King. The agreement must contain a clause for the trial period which can be 90 days or less. The clause defines the length of the trial period, and the timeframe in which the employee can be dismissed. If the employee is dismissed within that timeframe, then they can’t bring a personal grievance claim against their employer.
There is a caveat though.
The employment agreement must be signed and returned to the employer before the employee starts work or else the clause will be invalid.
The expectation is on the employer
The employer must take reasonable steps to bring the clause to the employee’s attention, particularly if the employee is considered to be a ‘vulnerable’ worker.
Let’s clarify ‘reasonable steps’:
- Tell the prospective employee when the job offer is made that it is subject to a trial period.
- Give the prospective employee enough time to read the agreement and get legal advice if they choose.
- Ensure the employment agreement is signed and returned before the employee starts work.
Watch out for other Personal Grievance claims
Although the employee cannot raise a personal grievance for unjustified dismissal, there are other types of personal grievances they can pursue. For example, unjustified disadvantage, bullying, harassment, and discrimination, just to name a few.
Don’t rely on the clause to dismiss an employee either. Get advice before you take any action to make sure the clause hasn’t been invalidated by some other action that’s been taken.
Helpful 90-day trial checklist
Trial period clauses and dismissals can be easy to get wrong so here is a check list to help you.
- Notify prospective employees that their employment agreement contains a 90-day trial provision before they sign it.
- Ensure the agreement is signed and returned before the employment relationship starts.
- Ensure the 90-day trial provision is compliant with the Employment Relations Act.
- Communicate fairly and reasonably with the employee before relying on the clause provision.
- Get expert advice before you take action.