Trial Periods – One Year On

24 April 2012

Trial Periods – One Year On

Employment Lawyer Sarah Townsend, Of Duncan Cotterill, Looks At How The 90 Day Trial Period Has Worked Since It Was Introduced A Year Ago.

While the dust is settling on the 90 day trial period introduction just over a year ago, issues do still arise and 18 cases have been heard by the Employment Relations Authority and Employment Court.

Under a 90 day trial period provision, new employees can be dismissed within the first 90 days of employment and cannot raise a personal grievance for unjustified dismissal. However, those employees can still bring a personal grievance on other grounds (including discrimination, harassment or unjustified disadvantage).

In most cases where an employee has successfully challenged the use a trial period by their employer, the Courts have focused on technical slip ups made by employers. These meant that the employer could not rely on the trial period and the employee was able to raise a personal grievance about their dismissal.

For example, the Courts have strictly applied the requirement that trial periods can only apply to “new” employees.

In Smith v Stokes Valley Farm, an employee was given an employment agreement before she started work but did not sign it until her second day. The Court held that at the time the agreement containing the trial period was signed, Ms Smith was not a “new employee” and so the trial period was unenforceable.

In Blackmore v Honick Properties, the Court considered the issue where a verbal offer of employment had been made and accepted by an employee, without any mention of a trial period. The employee was provided with a written employment agreement containing a trial period within the first hour of him starting work. The Court held that Mr Blackmore was an existing employee by the time he signed the employment agreement, even though he had only worked for one hour. Again, the trial period could not be enforced.

In practice, an employment agreement containing a trial period must be given to a prospective employee at the same time as, and as part of, making a job offer. An employee is entitled to know that his or her employment will be subject to a trial period before accepting the job offer.

The cases have also shown that trial period clauses, which do not state that an employer can dismiss an employee during the trial period and that an employee cannot bring a personal grievance in respect of the dismissal, will be unenforceable.

A common misconception is that trial periods effectively extinguish all of an employee’s legal rights for the first 90 days of employment. When it appears the employee’s performance or attitude is not meeting requirements, there is still an obligation to address this during the trial period. An employer who takes no steps to deal with performance shortcomings during a trial period and dismisses an employee on the 89th day of the trial period may well face claims of unjustified disadvantage and breach of the duty of good faith.

As part of this duty of good faith, the Court has also said that an employer should, if asked, provide an explanation or reasons for the dismissal to the employee. This is because an employee should not be deprived of the ability to learn from an unsuccessful trial period even though the employee has a limited ability to challenge that.

Conclusion
A 90 day trial period must be included in a written employment agreement, applies only to new employees, can be no longer than 90 days and must start on the day the employee begins work. In addition, the provision must specify that the employee may be dismissed during the trial period and that if dismissal occurs, then the employee will not be able to bring a personal grievance or other legal proceedings in respect of the dismissal.

The law imposes stringent requirements for use of a 90 day trial period and the Courts have made it clear that these will be strictly applied.

• Sarah Townsend is part of Duncan Cotterill's specialist employment law team. s.townsend@DuncanCotterill.com Disclaimer: the content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.

ENDS

© Scoop Media