What you need to know about 90-day trial periods…

Hiring a new employee is a big decision, because the costs (and stress) of getting it wrong are so significant.

Now employers can at least have some protection, thanks to the 90-day trial period. This means that you can dismiss an employee during this time – and the employee can’t pursue a personal grievance case or other legal proceedings because of this dismissal.

However, the law isn’t quiiiite that straightforward: there are various things you must do to protect yourself legally.

 A good amount of employment case law is developing where jilted former employees are taking employers to court. If the courts decide that the 90-day trial period is invalid for any reason, the employer has no protection. The maximum compensation payable to an employee is up to 3 months’ wages plus additional compensation of around $5k, plus legal costs.

Don’t let that happen to you!

Here are some guidelines to help you get started and use the law to your advantage…

What you must do for the 90-day trial period to be valid

For the 90-day trial period to be valid, you must:

  • Act in good faith: Your intentions must be honest, and you should take a proactive and constructive approach to the employee.
  • Documentation: An appropriate trial period clause must be in the Employment Agreement.
  • Signature: The employee must sign the Employment Agreement before they start in their role.
  • Terminating employment: If you do decide to terminate the employee, this must be on notice.

What you cannot do…

  •  You cannot apply trial periods to employees previously employed by your company (or any subsidiary organisation).
  • You cannot treat employees on a trial period any differently to your other employees.

The employee’s rights

An employee that’s on a 90-day trial can:

  • Access mediation services.
  • Bring other types of grievance against an employer, e.g. discrimination, harassment, etc.

That’s how it works on a nutshell… as with many things, the devil is in the detail (e.g. getting the wording right in the Employment Agreement).

If you’re in any doubt whether you’re approaching 90-day trial periods correctly (or you’d like to use them, but haven’t been sure how to get started), please get professional advice.

The team at Recruit NZ is here to help you stay on the right side of the law – and find you the best employees!

 

Next step:

Need some help with 90-day trial periods?

If you’re unsure if you’re approaching 90-day trial periods correctly (or you’d like to use them, but don’t know how to get started), please contact us for professional advice.

The team at Recruit NZ is here to help you stay on the right side of the law – and find you the best employees!

Contact our friendly team today to discuss your recruitment needs.

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Tanya Gray highly driven individual, passionate about helping business owners understand and enjoy the recruitment process.

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