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90 Day Trial Period Deemed Invalid by Employment Relations Authority

Published 01 Jul 2015

When employing someone, it is important to give an employee a reasonable opportunity to look over the proposed contract and seek independent legal advice before starting a job. This issue was looked at by the Employment Relations Authority (ERA) in a recent case, Parikshit v James Richardson (NZ) Ltd.  

About four days before the employee was to start work, he was sent a letter of offer and the intended Employment Agreement via email. The Employment Agreement contained a 90 Day Trial period. The email also directed the employee to have the documents signed and returned by a specified date, however, this was not done and the employee turned up for his first day of work according to the Agreement. The employee had all documents on him including other forms he had been given prior to starting, such as KiwiSaver and tax code information, but the Employment Agreement was not signed.

The employer arranged a room for the employee to sit down and review the agreement and was given 30 minutes to do so. The employer assumed this was a simple formality because the employee had brought all the other documents and simply forgotten to sign the Agreement. The employee was happy to sign the Agreement and commenced his induction and training. He was later dismissed under the 90 day trial period provision. He later raised a personal grievance.

The ERA took into consideration that the email was sent to the employee a few days beforehand and that the employee no doubt received the information. However, regardless of this evidence, the Authority decided that in fact the employee was only given 30 minutes to review the Agreement. This was held not to have met the requirements to provide the employee with a reasonable opportunity to seek independent legal advice and so the 90 Day Trial period was held to be invalid.

The ERA said that the employer should have given the employee more time to seek advice by postponing the start date. The ERA also said that the time needed for an employee to seek legal advice will depend on the circumstances and may differ from case to case. However, in this instance it was held that 30 minutes was not acceptable.

This demonstrates the importance of following up with an employee well before they start work to ensure they are aware of the trial period and that they have had adequate time to obtain advice prior to signing. It is also an example of how strict the ERA is regarding the law surrounding 90 day trial periods, that they can be held invalid by not having a fully compliant process of implementation.

Employers Assistance provides you with some free tools to double check your process around the 90 day trial period provisions.

Check your processes free here

Employers Toolbox users have these tools and more available under the 'Discipline' section in your online account. Further, all Individual Employment Agreements in the Toolbox by default include the relevant 90 day trial period clauses required. These can be removed from the agreement if there is to be no 90 day trial period.