Unjustified dismissal under 90 day trial provision…

The Employment Relations Authority has upheld a personal grievance claim for unjustified dismissal after an employee was dismissed under a 90 day trial period clause.

The ERA held that although there was a 90 day trial clause in the employment agreement, that employment agreement was never signed by the employee.  This means the employer cannot rely on the 90 day trial clause and must satisfy the ERA that the process followed for termination was fair and reasonable in the circumstances.

The ERA held that the employer failed to show that the process followed was correct because it did not properly raise performance concerns with the employee.  It did not give the employee any time to prepare a response.  It did not make the consequences of failing to reach the required standards clear.  It did not provide the employee with any assistance to improve his performance and there was no review of the performance made by the employer.  In actual terms the employer gave the employee no opportunity to comment on the concerns before the dismissal was made.

The employee managed to find work quite quickly so it was awarded $1,800 lost wages but was also awarded $10,000 compensation for the unjustified dismissal.

To rely on a 90 day trial period clause, both the employer and the employee must sign the agreement before the employee commences work.  If that has not been done, the employee has already been employed by the employer prior to the clause being signed and such a clause is invalid.


Alan Knowsley
Employment Lawyer Wellington