Thinking of utilising the widening of the 90 day trial period law?

From 1 April 2011 all employers in New Zealand will be able to agree with their new employees that the first 90 days of employment will be a trial period, at the end of which the employee may be dismissed without having the right to bring a personal grievance for unjustified dismissal.

If your organisation is thinking of taking advantage of this important change in employment law, then you need to get a few ducks in a row, both before you insert a trial period clause, and before implementing the right to dismiss:

1 get the wording straight now, ready to insert into new employment agreements from 1 April 2011;

2 think about the interaction between the trial period and any probationary period that may already be included in the EA. Ensure they do not conflict. Do you even need a probationary period any more?

3 devise a policy to decide what you do about potential new staff who refuse to accept the 90 day trial period clause. Do you deal with each case as it comes? Will there be certain grades of staff who you won’t offer the trial periods to?

4 do not allow any staff whom you intend to put on a trial period to start work before they have signed the agreement. This is crucial, as an error in this regard precludes reliance on the 90 day trial period altogether;

5 diarise for each staff member subject to a trial period a review of performance BEFORE the 90 days is up. Notice has to be given before the expiry of the 90 days to be effective. (Notice, once given, may expire after the 90 days is up though);

6 ensure you scrupulously honour the notice period set out in the EA when dismissing;

7 make sure that you comply with the general precepts of good faith when reviewing performance pursuant to the trial period, and be careful not to disadvantage the employee other than in respect of the dismissal itself. There are some exceptions to the duty of good faith when relying on the 90 day trial period, but they are tightly prescribed, and it would be a mistake to think that you need not follow any kind of fair process whatsoever.

8 Design a process for dismissing staff within the trial period, and stick to it, so that there is consistency. Dismissed employees can still claim discrimination, so you want to avoid inadvertently treating people differently.

I’m holding a free seminar in Christchurch on 23 February to discuss this and other changes to the NZ employment law scene. Email me on david.appleton@gtrlaw.co.nz if you would like to attend – kick off will be at 4pm.