Legislation Update: 90-Day Trial Periods Are Back
Starting 23 December 2023, employers now have the flexibility to implement a trial period for new employees lasting up to the initial 90 calendar days of their employment.
Previously, only employers with 19 or fewer employees were able to benefit from 90-day trial periods. For those with 19 or more employees, employers were required to use probationary periods.
If your current employment agreement template contains a probationary period, or you have previously not utilised 90-day trial periods, we recommend you contact our team and we can provide a complimentary review of your employment agreement. This includes the option to discuss potential updates, such as the addition of a 90-day trial period clause. You can upload your Agreement here or email our HR team via Alyssa, our People Coordinator, at hr@peoplepassion.co.nz.
Points to Remember for a Trial Period to Be Valid:
Must be agreed to in the employment agreement before the employee starts work, or the trial period is invalid – make sure the Agreement is signed before they start working for you.
Must have a valid notice period - we recommend including a shorter notice period during the 90-day.
Must be agreed by the employer and employee in good faith - an employee can’t be forced into being employed on a trial period.
The employee can’t bring a personal grievance for unjustified dismissal or other legal proceedings about their release under the trial period (as long as the employer has given the right amount of notice to the employee). Remember they can still bring a grievance on grounds other than dismissal i.e. disadvantage, discrimination etc.
Must be in the employment agreement and must state that:
From the very start of their employment, the employee will be on a trial for a set period which isn’t more than 90 days (but can be less). The exact period must be stated. For example, it could be 30 days, 90 days, or another stated period – we recommend including the exact start and end dates of this. Click here to calculate the exact dates.
During the trial, the employer can release the employee.
The employee can’t bring a personal grievance or other legal proceedings about their release.
It’s important to note that you don’t have to give reasons for releasing an employee during a trial period or give the employee a chance to comment before the release, however, it is good practice to tell the employee why they are being released. We also encourage employers to work with the employee during the trial period, give them support, and ensure they have an opportunity to step up and prove themselves before looking to release under 90 days.
When releasing an employee under 90 days we recommend that you connect with us, to double-check that your trial period is valid and that you have ticked off the above points.
If you have any questions about the above and how People Passion can support your organisation, please contact us at 0800 HR FOR U or email our team today!
Paige Croft
People Partner