In late August the Employment Relations Authority (ERA) released four decisions relating to the employment contracts of four early childhood teachers and the 90-day trial clause.
This is a timely reminder that you need to dot your Is and cross your Ts if you want to dismiss an employee on the basis of a 90-day trial clause.
In these cases, the 90-day trial clause did not expressly state the date on which the trial period began (although elsewhere the agreement did specify a start date for the employment). In the absence of express agreement as to a trial period start date, the ERA said it was not reasonable to assume that it started on the day the employment relationship started. The ERA considered it was open to the parties to agree to a later start date and, for example, it could have begun after completion of an initial training or induction period. The ERA held the clause invalid.
While there is some doubt in the legal community as to the correctness of the ERA’s decision, we recommend you make sure your employment agreements state that the trial period clause commences on the agreement’s commencement date, and that the commencement date is expressly stated somewhere else in the agreement (it’s often in a schedule).
There are other requirements relating to trial periods that you will need to comply with as well – we are happy to assist with any queries you may have.
Clark v Lighthouse ECE Limited [2016] NZERA Auckland 281; Du Plooy v Lighthouse ECE Limited [2016] NZERA Auckland 282; Baxter v Lighthouse ECE Limited [2016] NZERA Auckland 283; Honey v Lighthouse ECE Limited [2016] NZERA Auckland 284.