Knowledge It has now been almost two years since the Government reinstated 90-day trial periods for all employers, removing the previous restriction that limited their use to businesses with 19 or fewer employees.
While employers are not required to follow the standard process for terminating an employee who is subject to a valid trial period, they must still comply with their good faith obligations under the Employment Relations Act 2000 (“the Act”). This includes acting honestly, openly, and communicatively with employees.
While the legislation does not require an employer to give a reason for dismissal upfront, the employer must provide one if the employee asks. In Smith v Stokes Valley Pharmacy (2009) Ltd, the Employment Court held that an employee is entitled to seek and receive an explanation for their dismissal at the time notice is given.[1] An employer cannot refuse to provide an explanation, nor can they provide one that is misleading or deceptive. Doing so may give rise to a personal grievance claim for unjustified disadvantage, which is not precluded under the Act.
A trial period does not absolve employers from all liability arising from the employment relationship. Employees can still raise personal grievances for unjustified disadvantage and discrimination claims under the Human Rights Act 1993 remain available.
Key Takeaway
Even when relying on a 90-day trial period, employers must act in good faith and provide clear, honest reasons for dismissal if requested. Failure to do so may expose employers to personal grievance claims and financial liability.
If you plan to rely on a trial period, it is important to get legal advice first. There are several technical requirements that must be met, and if they are not, the trial period may be found to be invalid.
Get in touch with the team at Black Door Law for tailored advice on navigating the employment law requirements for trial periods.
Disclaimer: This information is intended as general legal information and does not constitute legal advice. If you have a specific issue and wish to discuss it get in contact with the Black Door Law team
[1] Smith v Stokes Valley Pharmacy (2009) Ltd [2010] ERNZ 253 at [81] and [82].