Noel Jr Camacho v North Beach Limited [2025] NZERA 824

This is a preliminary Employment Relations Authority (ERA) decision about a 90 day trial clause. The employer said the trial clause prevented an unjustified dismissal Personal Grievance (PG). The employee said the trial clause was invalid. The Authority decided the clause could not be relied on, so the PG can proceed. The full determination is embedded at the end of this page.

What happened

North Beach interviewed Mr Camacho for an Assistant Store Manager role in mid-November 2024 and then emailed him a proposed employment agreement on 18 November 2024. The same day, an automated portal email also told him his employment was subject to a 90 day trial period and encouraged him to seek independent advice.

Mr Camacho signed the agreement on 21 November 2024 and started work on 25 November 2024. After a meeting about concerns on 2 December 2024, North Beach terminated his employment and said it was doing so under the trial period clause. He was given (and paid) one day notice.

The Authority directed the trial period validity issue be decided as a preliminary matter, before the merits of the dismissal PG were investigated.

The key contract problem: trial period and probation were both in the agreement

The agreement contained:

• A 90 day trial period clause saying dismissal could occur on the trial notice period and (if used) Mr Camacho could not bring a dismissal PG.
• A probationary period clause describing guidance, feedback, and warnings, and expressly stating probation does not limit legal rights and the parties must deal in good faith.

The schedule also listed both a 90 day trial period and a three month probationary period, with different notice periods: one day notice during trial, one week notice during probation, and six weeks for general termination.

Legal framework the Authority applied

Trial periods remove the usual right to bring an unjustified dismissal PG, so they are interpreted strictly. The Authority reviewed the statutory requirements for trial periods (ss 67A and 67B) and the separate concept of probation (s 67).

The Authority also applied Employment Court guidance that where an agreement includes both probation and trial provisions, inconsistencies can create ambiguity that prevents reliance on the trial clause. The key idea is simple: if the agreement also requires fairness and justifiable cause for dismissal (probation), that can conflict with a clause that tries to exclude dismissal PG rights (trial).

Why North Beach could not rely on the trial clause

North Beach argued the probation clause was not "in effect" because it was expressed as discretionary ("may employ on a probationary basis"). The Authority rejected that. It treated the probation terms, as drafted and scheduled, as creating contemporaneous and inconsistent rights and obligations.

The inconsistency was not just about labels. The clauses created different notice periods and different process expectations. The probation clause contemplated guidance, warnings, and fairness obligations, while the trial clause attempted to exclude a dismissal PG right. That ambiguity meant the trial clause could not be enforced to bar the PG.

North Beach also relied on a clause saying no other term would derogate from the trial period. The Authority held that did not solve the problem because the probation clause also contained "notwithstanding" language, and the point from the Employment Court cases is that it is the inconsistency itself that makes the trial reliance untenable.

Outcome and what happens next

The Authority held the trial period provision was ineffective to prevent Mr Camacho from raising a dismissal PG. That means the case proceeds to the substantive investigation stage (whether the dismissal was justified under s 103A), unless the parties resolve it.

Costs were reserved.

Practical takeaways

• Do not mix trial and probation clauses: if both are included and they conflict on notice or process, employers risk losing the trial defence.
• Drafting needs to be internally consistent: "non-derogation" wording will not fix contradictions elsewhere in the agreement.
• Trial periods are interpreted strictly: because they remove employee protections, any ambiguity will usually be resolved against the employer relying on the trial clause.
• Preliminary issues can be determinative: a failed trial clause means the employer is back in the ordinary dismissal justification framework.

Read the full ERA determination (embedded)

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Source: Employment Relations Authority preliminary determination hosted on determinations.era.govt.nz.