Legal Updates

Ninety day trial periods possible in new employment contracts

Posted: 6th April 2009

New legislation means that employees can be required to prove their worth over ninety days - or be dismissed without explanation. This may reassure employers who have previously been apprehensive about taking on new staff, as a disappointing candidate was difficult to 'let go'.

From 1 March 2009, new employees of small to medium sized businesses may be placed on a ninety day trial period. If the employer wishes to dismiss the employee during this period, it may do so. The employer does not have to give any reason or explanation. The employee is barred from bringing a personal grievance for unjustified dismissal.

 Three restrictions on using the new 'trial period'

1.  The trial period cannot be applied to employees who the employer has previously employed
2. The trial period applies only to employers who employ 20 or less employees.

3. The trial period must be written into the employee's individual employment agreement.

 How does the new trial period differ from previous law?

 The Employment Relations Act 2000 already allows employers to agree a 'probationary period' with new employees.

 However, the employer still cannot dismiss the employee unless it has: 

• Adequately supervised and reviewed the employee's performance during probation
• Made it sufficiently clear to the employee during the probation that aspects of their performance are unsatisfactory

• Told the employee that unless their performance improves, their employment will not be continued

Seek advice for your situation

 If you are an employer, you may need help to draft a 'trial period' clause. Or you may wish to have your standard employment agreements legally 'health checked'.

 As an employee, you may wish to discuss how the law change affects you now or in future positions.

For help with any employment matter, please contact Andrew Steele.