Do not assume the trial period saves the dismissal
A 90 day trial period can be useful for employers, but it is also an area where mistakes are common and expensive. Employers should not assume that a trial period clause automatically blocks a Personal Grievance.
Anderson Law assists employers with trial period clause review, termination letters, notice issues, Personal Grievance responses, mediation, and disputes about whether the employer validly relied on a trial period.
Before relying on a 90 day trial period, the employer should check the employment agreement, when the employee started, whether the employee has previously worked for the employer, the wording of the clause, the notice requirements, and whether notice is being given before the end of the trial period.
Trial periods are technical
Trial periods remove or limit important rights in relation to dismissal. Because of that, employers should expect the wording and implementation to be scrutinised closely if the employee challenges the dismissal.
The key issue is not just whether the employer intended to use a trial period. The question is whether the statutory and contractual requirements have actually been met.
If the employer gets the clause, timing, notice, or agreement process wrong, the employee may argue that the dismissal can still be challenged as unjustified.
Pre-dismissal trial period checklist
Before terminating under a trial period, employers should check:
- Was there a written employment agreement?
- Was the trial period clause in the agreement before the employee started work?
- Has the employee previously been employed by the same employer?
- Does the clause specify a period of 90 days or less?
- Does the clause say the trial period starts at the beginning of employment?
- Does the clause state the employer may dismiss during the trial period?
- Does the clause state that if dismissal occurs under the trial period, the employee is not entitled to bring a Personal Grievance or other legal proceedings in respect of the dismissal?
- Is notice being given before the end of the trial period?
- Does the agreement require written notice, payment in lieu, or a particular notice period?
- Has the employer avoided saying or doing anything that creates a separate disadvantage or bad faith claim?
Notice problems
Notice is one of the biggest trial period danger points. The employer must understand what the employment agreement requires and when notice must be given. A casual conversation, unclear text message, late letter, or failure to follow the contractual notice clause can create risk.
Employers should be careful about the difference between giving notice, paying in lieu of notice, placing the employee on garden leave, and simply telling the employee not to come back. The contract wording matters.
Before sending a trial period termination letter, the employer should check whether the agreement permits the method being used. The termination letter should be clear, dated, and consistent with the employment agreement.
A trial period does not block every possible claim
Even where a trial period is validly used, employers should not treat the employee as having no rights at all. A trial period may prevent a Personal Grievance about the dismissal itself, but it does not necessarily prevent every other kind of employment claim.
Employers should still be careful about discrimination, harassment, disadvantage unrelated to the dismissal, unpaid wages, holiday pay, minimum employment standards, health and safety issues, and good faith obligations.
For that reason, even a trial period termination should be handled cleanly and professionally.
Common employer mistakes with trial periods
- giving the employment agreement after the employee has already started work;
- using a clause that does not meet the statutory requirements;
- using a trial period for someone previously employed by the employer;
- miscounting the 90 day period;
- giving notice too late;
- giving verbal notice where written notice is required by the agreement;
- failing to pay notice or final pay correctly;
- using the trial period to hide a discriminatory reason;
- making hostile comments that create a separate grievance; and
- assuming mediation or settlement is unnecessary because the employer thinks the clause is valid.
Responding to a trial period Personal Grievance
If an employee challenges a trial period dismissal, the employer should not simply say "you were on a 90 day trial" and leave it there. The employer should be able to prove the agreement, the clause, the start date, notice timing, notice method, and final pay position.
The response should address the employee's allegations carefully. If the employee says the agreement was signed late, the clause was invalid, notice was defective, or the real reason was unlawful, the employer needs evidence, not just assertion.
Frequently asked questions
Can all employers use 90 day trial periods?
The law has changed over time. Employers should check the current rules and the specific agreement before relying on a trial period.
Can a trial period be agreed after the employee starts?
That is high risk. Employers should have the written agreement and trial period clause properly agreed before employment starts.
Does the employer need a reason to terminate under a trial period?
A valid trial period may limit dismissal challenge rights, but employers should still avoid unlawful reasons and should handle the termination carefully.
Should the employer attend mediation if the employee challenges the trial period?
Often yes. Even strong trial period cases may benefit from mediation if it resolves the dispute cheaply and finally.
Case law examples for 90 day trial periods
Trial period law is technical because the clause removes an employee's ordinary ability to challenge dismissal. Employers should assume the Authority and Court will check the clause, the timing, the employee's prior work history, and the notice closely.
Employment Relations Act 2000, ss 67A and 67B - the statutory gateway
Section 67A requires a written trial provision in an employment agreement for a specified period not exceeding 90 days, starting at the beginning of employment. Section 67B only protects the employer where notice of termination is given before the end of the trial period and the statutory requirements are met.
Smith v Stokes Valley Pharmacy (2009) Ltd [2010] NZEmpC 111 - strict interpretation
Smith is the foundation warning. Trial provisions are interpreted strictly because they remove important employee rights. Employers should not assume a near-enough clause will be enough.
Roach v Nazareth Care Charitable Trust Board [2018] NZEmpC 123 - valid trial, defective notice
Roach shows that even where the trial period itself is valid, the dismissal can still fail if notice is not given in accordance with the employment agreement and s 67B. Employers should check the notice clause before terminating, not after.
Kumara Hotel Ltd v McSherry [2018] NZEmpC 19 - previous employment can defeat the trial period
Kumara Hotel is a warning about rehiring or changing agreements. A trial period is for an employee who has not previously been employed by that employer. If the person has already worked for the employer, trial period reliance can be unsafe.
New Zealand Meat Workers Union Inc v South Pacific Meats Ltd [2016] NZERA Christchurch 13 - the start date must be clear
South Pacific Meats shows the danger of a clause that does not clearly state when the trial period starts or properly cross-reference the commencement date. Employers should make the start of the trial period explicit in the signed agreement.
Dean v Ravenwood t/a Steven Ravenwood Services [2020] NZERA 38 - pre-start agreement matters
Dean is useful because the Authority distinguished cases where the employee first learns of a trial period after work begins. The employer had raised the trial period before work started and the agreement had been reached before commencement. Employers should lock the bargain in before the employee does any work.
Lenoel v Waikato Windoware Ltd [2023] NZERA 481 - trial period disputes keep happening
Lenoel is another reminder that employers continue to face litigation over whether they can rely on a 90 day trial period. The safe approach is to check the employment agreement, start date, notice, prior work history, and communication trail before taking action.
Employer pre-termination check
Before using a trial period, the employer should check: the employee had not previously been employed by the employer, the signed agreement was in place before work started, the clause states a period of 90 days or less starting at the beginning of employment, the notice is given before the period ends, and the notice complies with the agreement.
Need help checking a 90 day trial period?
Complete the employer form and provide the signed employment agreement, start date, proposed termination date, draft letter, and any communications with the employee.
