Introduction to 90 day trial periods

The information below is a summary introduction and general guide only. This information is not to be relied upon and is not a substitute for obtaining legal advice. Detailed advice should be obtained to cover your specific factual situation.

Legal Street Limited can help you with advice on 90 day trial periods and where necessary we can deliver you compliant individual employment agreements for your staffing needs.

Currently, Employers who employ less than 20 employees are able to employ new employees on a 90 day trial period. However, from Friday 1st April 2010 the 90 day trial period will be available to all New Zealand employers.

An employer and employee may agree to a trial period only once. If an employer decides to re-employ the employee, the option to agree to another trial period is not available. Nevertheless the option of probationary employment remains available under Section 67 of the Employment Relations Act 2000 (“the Act”).

The trial period must be agreed to by the employer and the new employee in good faith and in writing as a part of the employment agreement.

The employer and employee must both bargain in a fair way about a proposed trial period. What this means is that at a minimum the employee should be given a copy of the proposed employment agreement and the opportunity to obtain their own independent legal advice on that agreement – before the employee actually commences work.

The good faith provisions of the Act still apply and the employee has rights to minimum pay, break entitlements, sick leave, holidays and health and safety provisions. Pursuant to Section 67B(4) of the Act an employee subject to a trial provision must be treated no differently in all other respects from an employee whose agreement contains no trial provision.

An employee who is given notice of dismissal before the expiration of the trial period cannot raise a personal grievance upon the grounds of unjustified dismissal even if the actual dismissal does not become effective until after the trial period ends. However an employee may still raise a personal grievance within 90 days of the facts giving rise to the grievance on other grounds, including:

  • Unjustifiable disadvantage, for example bullying
  • Discrimination
  • Sexual harassment
  • Racial harassment
  • Duress (insofar as being non-union)

Once the trial period has expired without the employee being terminated on notice, then the employee is in the same position as if no trial provision had existed.