Employer pays $20,000 after wrongfully relying on trial period...

The Employment Relations Authority has recently upheld an employee’s personal grievance claims of unjustified dismissal and disadvantage after she was wrongfully dismissed following a trial period.

The employee received a written employment agreement which provided that she would begin her employment on a 90-day trial period. However, a few weeks after she started, New Zealand went into a COVID-19 lockdown.

During the lockdown, the employee was paid her wages as normal. The employee could not begin working again until the lockdown ended.

Following the lockdown, the employer asked the employee whether she would be willing to extend her 90-day trial period. The employer believed that the employee showed promise and wanted to see whether she was fit for the job.

At the end of the extended trial period the employer notified the employee that she would not be progressing past her trial period. The employee was subsequently dismissed.

The employee raised personal grievance claims with the Authority, claiming that she had been unjustifiably dismissed and disadvantaged by the employer’s actions.

Under a 90-day trial period, an employee gives up their rights to take enforcement action if their employment is discontinued within the 90 days.

The Authority decided that the decision to extend the employee’s trial period was invalid. A trial period is for a period of 90 calendar days, not 90 days that the employee has actually worked. The Authority decided that the employee could therefore raise a personal grievance, as she had been employed for more than 90 days.

The Authority then considered whether the employee’s dismissal was unjustified. When dismissing an employee, an employer must act fairly and reasonably. This process includes keeping the employee informed, seeking the employee’s feedback and genuinely considering their input.

In this case the employer argued that they had raised performance concerns with the employee throughout her employment, and that she was therefore informed that dismissal may occur. However, the Authority decided that the concerns had not been raised in a formal way. To the employee, the concerns seemed like she needed further training, rather than genuine performance issues.

The employer did not seek or consider any feedback from the employee before dismissing her by email. The Authority decided that this amounted to an unjustified dismissal.

The Authority also decided that the employee had been disadvantaged in her employment due to the employer’s non-compliance with the requirements of the trial period.

The employer should have advised the employee that she was entitled to seek independent advice regarding the extension of the trial period, especially given the difference in bargaining power between the employee and employer.

The Authority ordered the employer to pay $2,000 to the employee in lost wages, as well as $18,000 in compensation for the hurt and humiliation the employee suffered because of the employer’s actions.

There is an important process which must be followed when dismissing an employee. If you are confused about this process, it pays to seek advice from a professional with experience in the area.

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