90 day trial periods – Further clarification from Employment Court

29 February, 2012 | Smith and Partners

Do you want your new employee to be covered by a 90 day trial period?  If so, you need to meet certain procedural requirements to ensure the trial period is valid.

In our employment law update in April last year we discussed the impact of an Employment Court case, Smith v Stokes Valley Pharmacy^[1], on the use of 90 day trial periods with new employees. One of the key conclusions of the Court in that case was that the 90 day trial period provision did not apply to the employee as she had commenced employment prior to signing her employment agreement and therefore was not a “new employee” as per the requirements of the Employment Relations Act.

A recent decision of the Employment Court^[2] reaffirmed the Court’s approach in Stokes Valley by stating that a 90 day trial period will only be valid if it has been entered into prior to the commencement of the employment relationship. The Court also took issue with the employer for not giving the employee an opportunity to consider, seek advice about and raise any issues with the agreement before signing it – a further requirement of the Employment Relations Act and another way in which a 90 day trial period may be invalidated.

Recommendations arising from these two cases include the following:

• Ensure the trial period provision is agreed to and contained within a signed employment agreement before the employee’s start date (a 90 day trial period agreed to after the commencement of employment will not be enforceable);
• Ensure you give any prospective employee reasonable time to consider an intended employment agreement, seek advice and raise any issues in relation to it.  We recommend that employers give newly offered employees 5 – 7 days to consider their employment agreement before they are expected to agree to the terms and sign it.

Further advice
If you would like advice on any employment law related matters, please contact Suzanne Sumner, Personal Assistant to employment law expert, Carolyn Ranson to find out how you can become a client of Smith and Partners and to set up an appointment to discuss your employment matter with Carolyn.

Suzanne Sumner
Ph: 09 837 6840
Email: Suzanne.sumner@smithpartners.co.nz

(Please note we do not offer no win – no fee payment arrangements)

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[1] (2009) Limited [2010] NZEmpC 111

[2] Ricky Blackmore v Honick Properties Limited [2011] NZEmpC 152