The 90 day trial period was first introduced in 2009 for employers with less than 20 employees. In 2011 the trial period provision was extended to all employers regardless of size.
Even though the 90-day trial period has now been in place for some years, we are still finding business who struggle with the interpretation of how, and when, to activate the 90-day trial period.
The purpose of the 90 day trial period was to enable employers to take more risks on new hires through being able to assess suitability and how they are meeting basic employment expectations, fit with the company and integration into role and the team and to end employment if the conditions were not being met within the first 90 days. The employee is then in this case prevented from raising a personal grievance, or taking legal proceedings in respect of the dismissal.
Whilst a 90 day trial period can be a very useful tool for employers, after eight years we are still seeing employers getting tripped up in its application. Some of the key requirements to help get it right are:
It can only be used for new employees, someone who has never been employed by the employing entity in any capacity.
The 90 day trial period must be included in the employees Individual Employment Agreement which must specify that it applies from commencement date and outline the terms and impact of the trial period.
The Individual Employment Agreement must be provided in advance of the employee starting work, the employee must have had sufficient time to seek independent advice if they had wished to do so and the agreement must be signed and returned before employment actually starts.
If the agreement hasn't been signed before the employee starts work then the trial period clause is null and void.
Remember you have an obligation as an employer to act in good faith which amongst other things means being responsive and communicative. At a minimum, the employee needs to know what is expected of them and be told along the way if they are falling short of expectations.
If you are looking to terminate a new employee under their 90-day trial period initial checks include;
Checking that the employment agreement meets the requirements
Checking if discussion/s have been held with the employee about their performance in role and that they have had sufficient opportunity to develop and improve as needed and appropriate
Checking the length of the notice period and whether this could be covered in the 90 days along with time in employment
Below are some things to think about if you are considering activating your 90-Day Trial Period:
Why do you want to use the 90-day trial period? What are the reasons? Have you done as much you can to help the person improve i.e. is it unavoidable?
Where could your process improve to avoid this again? How was your recruitment and onboarding process? Did you provide enough training, coaching and support? Are there any gaps that you can close?
Was the person employed previously as a casual or temp? If so, then the 90-day trial period would not be valid, as they have already been employed by you.
Did the person sign their employment agreement prior to their start date? You need to ensure that your employee signed and return their employment agreement before their first day of work, as this null and voids the 90-day trial period. We have found that this is a common theme, when employers are trying to activate the 90-day trial period.
By asking these questions, you can then determine the best approach forward so that you don’t get into any tricky situations. It is extremely important to get your due diligence correct and follow it. If you’re not sure then please get advice and help. The tips above can help you remove risk, and use the 90-day trial period for what it was designed for, and before bringing people into your business, ensure that you have a structured and solid recruitment and HR process.
If you are struggling, and need help to navigate through the 90-day trial period, would like your trial period provisions reviewed, or want advice on terminating a staff member under their 90 day trial period provisions then get in contact on 022 543 2002 or support@yellowconsulting.co.nz
Disclaimer
This article, and any information contained on our website is necessarily brief and general in nature, and should not be substituted for professional advice. You should always seek professional advice before taking any action in relation to the matters addressed.