The Employment Relations Authority has upheld a personal grievance for unjustified dismissal, and ordered an employer to pay compensation to an employee because their dismissal under their 90-day trial clause was not done correctly.

The employer hired the employee under an employment agreement containing a 90-day trial clause. When the employee arrived for work on the first day her work station was not organised, and none of her personal accounts were set up.

After three days the employer called the employee into his office and told her that she was being dismissed due to unsatisfactory performance.

Later the same day the employer emailed the employee, and told her that she was being given three days’ notice as required in the 90-day trial clause in her employment agreement.

The Authority held that the employer unjustifiably dismissed the employee. Although the employment agreement contained a 90-day trial clause, the employer was still required to give the employee 3 days’ notice.

By sending the employee away before giving her notice, the employer breached the terms of the employment agreement and could not rely on the trial clause.

The Authority explained that since the trial clause was no longer effective, no fair and reasonable employer could have summarily dismissed an employee for performance issues after three days, given the situation when she began work.

The Authority ordered the employer to pay the employee $12,000 in compensation and $3,774 in lost wages.

It is important that employers understand when a trial clause can be relied upon and how an employee can legitimately be dismissed using it. Failure to do so may result in an expensive personal grievance.

The failure in this case resulted in the employer paying the employee over $15,700 for three days of work.

If there are uncertainties about the validity of a 90-day trial clause in your employment agreement, or whether it has been relied upon correctly, it is wise to speak with a professional experienced in the area.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-priced Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.


If you are a New Zealand Super Gold Card Holder (Australian Senior Cards do not qualify) we will give you a 75% discount off our initial 1 hour consultation fee. We will also give you a 17.5% discount off the first matter we handle for you and then 12.5 % off any subsequent matters for you.  These discounts relate to your personal matters only (i.e. not business or organisational matters).