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As an employer, you can use a trial period to find out if a new employee is suitable for the job. There are, however, specific eligibility criteria you must first meet. You have to agree to the trial period in writing before your new employee starts working and give him appropriate notice of dismissal if things do not work out. It is crucial to understand your legal obligations when you use a probationary period to avoid receiving a personal grievance or other legal proceedings from your employee. This article will explain how to use the 90 day trial period in accordance with New Zealand employment law.

What Is the 90 Day Trial Period?

The 90 day trial period for new hires is a defined period during which a new employee receives training to learn a new job and demonstrates whether they are suitable for it. 

You can use the 90 trial period in any industry and for any job, as long as you: 

  • employ less than nineteen employees; and 
  • agree to the trial period in writing before your employee starts work.

Your Employer Obligations

As an employer, you have certain legal obligations when you use the 90 day trial period to avoid receiving a personal grievance or other legal proceedings from your employee. These include: 

  • using the trial period only once with the same employee;
  • agreeing to it in the employment agreement (in good faith) before your employee starts work; 
  • stating the exact period of the trial (a maximum of 90 calendar days);
  • including a valid notice period in your employment contract; 
  • respecting your employees’ rights and responsibilities to health and safety, minimum pay, annual holidays, public holidays, sick and bereavement leave and equal pay; and
  • if your employee is a union member, respecting the trial period terms and conditions of their collective employment agreement.

You can write a trial period provision for your employment agreement using the Employment New Zealand’s Agreement Builder. However, if you are not sure, it is a good idea to get your contracts reviewed by a lawyer to avoid receiving a personal grievance for unjustified dismissal. For example, if your new employee signs his employment agreement the day after he started working, his trial period will be invalid because he did not sign the agreement before he began to work. In this case, you cannot dismiss your employee under the trial provision as you should have made sure that he agreed to it, had a chance to get advice and raise any issues, and signed his employment agreement before he started work.

How to Dismiss Your Employee 

You can dismiss your employee during the trial if things are not going well, but you must give him adequate notice and a reason for dismissal if he asks for one. 

When giving notice of dismissal, you must follow the terms you agreed to in the employment agreement. Otherwise, the trial period becomes invalid, and your employee continues to be employed. 

You also have to give notice within the trial period, even if the dismissal date falls outside the trial period. For example, if the trial period is six calendar weeks and the notice period is two weeks, you must give notice to your employee before the end of the sixth week. If you do not provide notice by the end of the trial period, your employee will no longer be on trial, and his employment will continue.

Key Takeaways 

Under New Zealand employment law, you can use a probationary period of a maximum of 90 days to determine if a new employee is suitable for the role you are seeking to fill. To qualify, your business must employ less than nineteen employees. You must meet specific requirements for the trial period provision to be valid, including: 

  • agreeing to the trial period in writing and good faith before your employee starts work; 
  • including the exact period of the trial (a maximum of 90 calendar days) and a valid notice period in the employment contract;  
  • giving your employee adequate notice and a reason for dismissal (best practice); and 
  • respecting your employees’ rights and responsibilities such as health and safety, minimum pay, annual holidays, public holidays, sick and bereavement leave and equal pay.

If you need help understanding your employer obligations or you need to discuss a trial period provision in your employment agreements, LegalVision’s employment lawyers can help. Call 0800 005 570 or fill out the form on this page.

FAQs

Is the 90 day trial period still valid in NZ?

Yes, under New Zealand law, you can use a trial period of a maximum of 90 calendar days to determine if a new employee is suitable for the role you are seeking to fill.

Are you required to pay an employee on a trial period in NZ?

Yes, you must pay your (eligible) employees at least minimum wage, and respect their rights in regards to annual, sick and bereavement leave.

Can you extend a 90 day trial period in NZ?

No, you cannot extend the 90 day trial period in New Zealand. You must state the trial period’s start and end date in your employment agreement. If you do not give your employee notice by the end of the trial period, he will no longer be on trial, and his employment will continue.

How much notice of dismissal should you give an employee during a trial period?

You need to give your employee the amount of notice you agreed to in the employment contract. Otherwise, the trial period becomes invalid, and your employee continues to be employed after the end of the trial.

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