All employers can employ new employees on a 90 day trial period. The employee can be dismissed during the 90 day trial without the employer giving a reason for the dismissal. This is designed to reduce the risk of new employees for employers as it encourages employers to take on new employees, particularly those with limited recent work experience (such as young people or those re-entering the work force).

Employees can benefit from having an employer “take a punt” on them, and employers save the expense of a procedurally complicated dismissal where an employee simply does not “fit” or lacks the required skills.

However, it is very important to be clear on what is and is not a 90 day trial.

If an employer wants to depend on a 90 day trial clause, the trial must be part of a written employment agreement, comply with the formal requirements and be signed by both parties before the employee starts work. If any of those requirements are not met, a proper dismissal process for good cause must be followed.

On top of this, the employee must not have worked for the employer before – not even for part of one day, or in a different role in the business.

This is very important and has tripped up a number of employers who would have otherwise been able to rely on the 90 day trial to dismiss an employee.

In one case, an employer told an employee “not to worry” about a 90 day clause in an agreement signed one day after she began work. It turned out the employer was correct – the employee did not have to worry about the clause. It was the employer who was left with an expensive personal grievance when the clause was held invalid by the Employment Court as the employee had worked for a day before signing.

A 90 day trial clause must also be entered into voluntarily, in the context of employment negotiations conducted in good faith.

Under the Employment Relations Act, employers must provide potential employees with a copy of the intended employment agreement before it is signed. The employee must then be advised of the right to seek independent advice on the agreement, and must be given a reasonable opportunity to seek advice. If the employee has any issues with the agreement, these should be raised with the employer. At that point the employer must consider the issues raised and respond to those.

Where an employee has not been offered an opportunity to seek advice on a 90 day trial clause, this will likely defeat the employer’s ability to rely on it for a dismissal.

A 90 day trial must be for 90 calendar days, or a specified lesser number of days.

A 90 day trial is not a “three month trial” or a trial of 90 working days.  Nor is it an ill-defined trial period in excess of 90 calendar days, “until we think you are ready”.

A 90 day trial is not a free pass to being an unreasonable employer. The provision will allow an employer to dismiss an employee within the trial period, without following a full dismissal process. Employees can still bring other kinds of personal grievances (for example allegations of discrimination or harassment).