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Employment Court Overrides 90 Day Trial Period

Published 15 Oct 2017

A recent Employment Court determination has reinforced that strict compliance is required with both the legislative and contractual provisions of a Trial Period, including the length and method of notice periods.

The employer, Farmer Motor Group Ltd (FMG), verbally dismissed the employee under the trial provision effective immediately and then proceeded to pay the notice and holiday pay entitlements.

The employee later raised a personal grievance in regards to the dismissal claiming that he was not given 'notice' as required by the Employment Relations Act 2000 and his Employment Agreement.

It was not disputed that there was a valid 90 Day Trial clause under the Act, however the question to be decided was whether the employer had met the notice requirements outlined in the employment agreement, and if not, whether the Trial Period was invalid and the employee was able to bring a personal grievance in regards to their dismissal.

Both the Employment Relations Authority (ERA) and the Employment Court reviewed the termination clause of the employee's agreement, which stated "... agreement may be terminated by either party on not less than four weeks' notice in writing to the other party." The ERA and the following Court appeal determined that because the clause expressly stated that the notice must be in writing, FMG could not rely on the Trial Period for protection, and therefore an unjustified dismissal claim is possible.

The employer made a payment in lieu of notice, however this was held to not be a substitute for having to provide the employee with the required written notice of the dismissal. The effect of the payment is simply to remove the requirement for the employee to continue working during the notice period.

The Court identified that the issue which it was required to determine was whether the employee was prevented from pursuing a personal grievance for unjustified dismissal due to the trial period provision in his individual employment agreement or whether because of the failure to give written notice, the dismissal in reliance upon the trial period provision was not valid and consequently the employee is able to pursue a personal grievance claim.

So once again the Courts confirm when it comes to the 90 Day Trial Period, it is clear that there has to be strict compliance to contractual provisions.

We strongly suggest before taking any action towards termination under the 90 DTP, use our free Tools online to check the points you need to consider: Click here to go to the tools.

If you are unsure about the content or accuracy of your Employment Agreement clauses with respect to the 90 DTP, use ours for the best protection of your business.

Both the Employments Contract Creator software and the Employers Toolbox online have the latest templates for the most up to date 90 Day Trial Period clauses.