3 Tips for Effective Probationary Periods in Your NZ Business

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Table of Contents

• Offer Support to Employees on Probationary Periods
• Communicate Clearly if an Employee’s Performance is Below Expectations
• Remember the Need for a Fair Process
• Key Takeaways
• Frequently Asked Questions

Probationary periods are a useful alternative to trial periods for businesses with 20 employees or more who want to maintain a degree of flexibility when hiring new employees. Probationary periods still require employers to follow a fair process when dismissing the employee on the probationary period. However, you can accelerate this process if a valid probationary period is active. This article sets out three tips for effective probationary periods at your business, including:

• the utility of offering support to employees on those periods; 
• communicating clearly if an employee’s performance is not at standard; and 
• remembering your procedural requirements.

Offer Support to Employees on Probationary Periods

Employees on a probationary period must be given adequate training and support to do their roles effectively. They cannot be thrown in the deep end and be expected to either sink or swim. Further, the probationary period should not provide a business with an easy way to let them go if they cannot cope with the role. This is bad management to begin with but is also against your legal obligations as an employer. Employees dismissed while on a probationary period are well within their rights to raise a personal grievance against your business for unjustified dismissal. They can do so if they were not given appropriate support or guidance on how to do their role.

Consequently, making sure your employees are receiving the support they need when they first start is good business practice. Additionally, it meets your employment obligations. Suppose the employee genuinely cannot do their role even with support. In that case, the probationary period can provide some additional flexibility in accelerating a poor performance process. However, as a first step, the employee must be provided with a reasonable opportunity to succeed in the role.

Communicate Clearly if an Employee’s Performance is Below Expectations

A probationary period is not a blank cheque to remove a new employee whose performance is lacking. You must tell the employee if their performance is not meeting expectations and give them some guidance about where they: 

• are going wrong; and
• ought to improve. 

If an employee’s work continues to be below standards, you should tell the employee this. You should also inform them that you are proposing to end the employment relationship. At this stage, you must give the employee an opportunity to respond to your critiques. You should genuinely listen to the employee’s points and respond to them before following through with dismissal for poor performance. 

Remember the Need for a Fair Process

There is a common mistake employers make by confusing probationary periods for trial periods. They are related but impose different requirements on employers. For an employer looking to dismiss an employee on a probationary period, it is really important to remember that they must follow a typical dismissal process for poor performance. Further, they must ensure that this process is procedurally fair. The fact that the employee is on a probationary period means that the employer does not have to provide the employee as long a period to improve their performance. However, fundamentally the employer must still follow a fair process.

Your business is at risk of a personal grievance if a fair process is not followed when dismissing an employee on a probationary period. This is unlike a trial period, which prohibits employees from raising a personal grievance for unjustified dismissal (assuming the trial period was valid). Employees on a probationary period do not have this restriction.

Key Takeaways

There are some important fundamentals to remember when using probationary periods in your business. These include the differences between probationary and trial periods, particularly in terms of the procedural requirements for a dismissal of an employee under a probationary period. You should also ensure that you sufficiently support new hires and give them the guidance and instructions they need to perform their role properly. If their performances are not meeting expectations, you should communicate this clearly and give the employee specific, actionable feedback. This will give them a genuine chance to improve their performance.

If you would like more information about probationary periods and how to ensure that your business is drafting and managing them effectively, contact LegalVision’s employment lawyers on 0800 005 570 or complete the form on this page.

Frequently Asked Questions