After 1 March 2009 small business employers (those who employ fewer than 20 employees) can include written 'trial periods' in the employment agreements of new employees. The new trial periods provide small businesses with some reprieve from unfair dismissal claims but still allow for employees to lodge personal grievances.

Trial periods:

  • Can be for any period up to 90 days from the beginning of a new employee's employment.
  • Must be agreed before the employment starts and they must be a written term of the employment agreement.
  • Cannot be used if the employee has previously been employed by the same employer.
  • Allow employers to dismiss on notice given during the trial period (even if the termination occurs after the end of the trial period).
  • Prevent employees bringing a personal grievance for unjustified dismissal.
  • Can be included in terms offered to a union member employee covered by a Collective Employment Agreement (CEA) as long as the trial period is not inconsistent with the terms and conditions in the CEA.
  • Can be included in the terms offered to an employee entitled to a CEA's coverage for the first 30 days of their employment as long as the trial period is not inconsistent with the terms and conditions in the CEA.

If there is a compliant trial period an employer does not have to:

  • Comply with the good faith duty to supply an employee with information relevant to their continuity of employment before deciding to dismiss the employee.
  • Provide an opportunity for the employee to comment on the possibility of a trial period dismissal before the employer makes that decision.
  • Provide reasons or justification for a trial period dismissal.

Importantly employees subject to a trial period still have the right to bring personal grievances in respect to:

  • Any disadvantage that occurred while they were employed.
  • Discrimination, and sexual or racial harassment.
  • Duress related to union involvement or non involvement.
  • A situation where an employer fails to implement the Employee Protection Provisions required by part 6A of Employment Relations Act 2000.

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