In or Out in 90 Days

A whole new employment relationship era is about to begin with the passing of the Employment Relations Amendment Act 2008 (the Act).

What has changed?

From 1 March 2009, Farmer McKenzie may choose to hire a new employee, Mark, on a trial basis of up to 90 days. If she decides that the relationship is not working out during that trial period, she may give Mark a notice of termination before the end of the trial period. Mark will not be allowed to bring a personal grievance claim for unjustified dismissal.

When can a trial period be used?

Farmer McKenzie can only utilise the trial period if:

  • She has negotiated with Mark in good faith regarding the insertion of a trial provision in the employment agreement;
  • She has fewer than 20 employees at the time the employment agreement is entered into; and
  • Mark has never been employed by Farmer McKenzie before.

What must be included in the employment agreement?

The employment agreement must specify:

  • That Mark is to serve a trial period;
  • The length of the trial period, which cannot be more than 90 days;
  • That Farmer McKenzie may dismiss Mark during the trial period;
  • That if Farmer McKenzie does dismiss Mark during the trial period, Mark will not be entitled to bring a personal grievance or other legal proceedings in respect of the dismissal.

Scenario 1

Mark worked on Farmer McKenzie's farm over the summer holidays as a casual worker. A year later, he decides he likes working on a farm and applies to Farmer McKenzie to be a full-time farm worker. Farmer McKenzie is not sure if Mark will like it as a full-time farm worker. Can she use a trial period in his new employment agreement?

No. Mark was previously employed by Farmer McKenzie. The trial provision only applies to new employees.

Scenario 2

The employment agreement provides for a 30 day trial period. Can Farmer McKenzie give Mark a notice of termination on the 35th day?

No. Farmer McKenzie should have given Mark the notice of termination before the end of the trial period, whether the termination takes effect before, at, or after the end of the trial period.

Scenario 3

During the trial period, Mark feels he has been sexually harassed in the workplace. Can he bring a personal grievance claim?

Yes. The Act only prevents Mark from bringing a personal grievance claim in respect of his dismissal. It does not prevent him from bringing a personal grievance on any of the grounds specified in section 103(1)(b) to (g) of the Employment Relations Act 2000, which includes a personal grievance for sexual harassment.

Scenario 4

Mark is dismissed from his employment during the trial period and requests the reasons of his termination. Must Farmer McKenzie comply with this request?

No. Farmer McKenzie does not need to provide reasons for the dismissal, whether verbally or in writing if the dismissal takes place within the trial period. However, if Mark was dismissed after the trial period and requests reasons for his dismissal, Farmer McKenzie will be obliged to provide such reasons in writing.

Employers planning to engage new employees may wish to make use of a trial period in the employment agreement. However, they must ensure that they do not fall foul of any technicalities.



The content of this document is necessarily general and readers should seek specific advice on particular matters and not rely solely on this document.
If you would like more information on any of the topics in this document, please contact your usual Auld Brewer Mazengarb & McEwen adviser.







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