The Employment Relations Authority has upheld an employee’s personal grievance claim for unjustified dismissal because the 90-day trial clause in his contract was ineffective.

The clause was correctly worded, the employee was given a copy of the contract and signed it before he started work. So what went wrong for the employer?

The ERA held that the clause failed to be effective for two reasons (either would have been sufficient to set aside the clause).

  1. The employer did not sign the agreement until 20 minutes after the employee commenced work so the employee was already employed when the contract was signed.
  2. The employee was only given the contract the evening before commencing work and therefore had no reasonable opportunity to take independent advice on the agreement before signing it the next morning.

As a result, the 90-day trial clause was out and so the employee’s dismissal failed to follow any proper procedures and was unjustified.

The employer was ordered to pay three months lost wages and $6,000 compensation.

An expensive outcome for the failure to give the employee the contract in enough time for him to get advice on it, and for not ensuring both the employee and employer signed before he commenced work. How much time is needed for getting advice can depend on the circumstances but at least a couple of work days would be the minimum. Allow more if the employee asks for further time. Their start date must be delayed if they have not yet signed.