Trial periods

What trial periods are and when they can be used

A trial period is a set amount of time where an employer can see if a new employee is suitable for the job. 

Employers and employees can agree to use a trial period when:

• the trial period does not last longer than 90 calendar days
• the employee has not worked for the employer before, and
• the trial period is at the start of that employee’s employment.

Immigration New Zealand does not allow trial periods for migrant workers employed on an Accredited Employer Work Visa (AEVW).

AEWV job check information for employers – Immigration New Zealand(external link)

Before a trial period starts

Before the employee starts work and the trial period begins:

• the employer and employee must agree to a trial period 
• information about the trial period must be included in the employment agreement, and
• the employee must sign the employment agreement.

Trial periods must be in employment agreements

If the employer and employee agree to a trial period, the employment agreement must state:

• that the employee will be on a trial period from the very start of their employment
• how long the trial period will last (up to a maximum of 90 days)
• that the employer can dismiss the employee during the trial period, and 
• that the employee cannot raise a personal grievance (except in some circumstances) or bring other legal proceedings about that dismissal.

If the employee does not sign the employment agreement before they start work, the trial period is not valid.

Employees on a collective agreement

If an employee has a collective employment agreement, they can also have extra individual terms and conditions. These individual terms add to the collective agreement and cannot contradict anything in there.

This means if the collective agreement says they cannot be employed on a trial period, their individual terms must not include a trial period.

Employee rights during a trial period

Employees must be paid during the trial period.

If an employee is on a trial period, they:

• have the same rights as an employee who is not on a trial period, and 
• must be treated the same as an employee who is not on a trial period.

The only exception is if an employer dismisses an employee while they are on a trial period. The employer does not have to follow all the dismissal rules in this situation.

Employee rights and responsibilities

What happens at the end of a trial period

If the trial period goes well, no one needs to do anything. The employee will keep working once the trial period ends. The employer can also choose to end the trial early and confirm the employee can keep working.

If the employee is not suitable for the role, the employer can give them notice during the trial period. The employer must then either:

• let the employee keep working until the end of their notice period, or
• put the employee on paid .

Dismissal during a trial period

Usually, employers must follow a fair and reasonable process when they dismiss an employee. If an employer does not do this, the employee can raise a personal grievance against them.

These rules protect the employee from being unfairly dismissed. They are called ‘dismissal protections’.

If the employee is on a trial period, they do not have certain dismissal protections.

Dismissal protections employees on a trial period do not have

When an employer dismisses an employee during a trial period:

• the employer does not have to follow a fair process (but they can choose to if they want to)
• the employer does not have to have a good reason for dismissal
• the employer does not have to meet the third key principle of the good faith obligations, to:
  • give the employee information so they can understand the situation, and 
  • give the employee an opportunity to comment before making a decision
• the employer does not have to provide a written reason for the dismissal if the employee asks for it, and
• the employee cannot raise a personal grievance, except in some circumstances.

Employers must follow all other dismissal rules

Employers must still follow all the other rules for dismissal, which are to:

• meet the first and second key principles of the good faith obligations:
  • all parties must not act in a misleading or deceptive way, and
  • all parties must be responsive and communicative, and
• give the employee:
  • the notice stated in their employment agreement (unless they are dismissing them for serious misconduct), or 
  • a reasonable period of notice if the agreement does not state a notice period.

Good faith

Giving notice

Dismissal

The employee’s last day

The employee’s last day can be after the trial period has finished, as long as notice was given during the trial period.

Personal grievances for employees on a trial period

In most cases, employees on a trial period cannot raise a personal grievance if they believe they were:

• unjustifiably dismissed, or
• unjustifiably disadvantaged in their employment and it relates to dismissal.

They can still raise a personal grievance for any other reason listed on the ‘Personal grievances’ page.

Personal grievances

When employees on a trial period can raise a personal grievance

The only time employees on a trial period can raise a personal grievance for unjustified dismissal or unjustified disadvantage is if:

• their employer did not give them the amount of notice in the employment agreement (or reasonable notice if the agreement does not state a notice period)
• they started working before the agreement was signed
• they were not given a reasonable chance to get independent advice on the employment agreement before they signed it, or
• the employment agreement does not mention there is a trial period.

If an employee raises a personal grievance in one of these situations, the Employment Relations Authority can decide the trial period was invalid.

The Employment Relations Authority decision in the Cradock versus Allied Investments case is an example of where the trial period was found to be invalid.

Cradock versus Allied Investments case - Employment Relations Authority(external link)

Personal grievances

Example of an invalid trial period

Jennifer’s boss, Omesh, tells her that she has the job on Monday. She starts work on Tuesday and she signs her employment agreement on Wednesday. The employment agreement states that Jennifer has a trial period for 60 days.

The trial period is invalid because Jennifer did not sign the agreement before she started work.

Omesh cannot dismiss Jennifer under the trial provision. He must follow all the rules for dismissal. If he does not follow all the rules, Jennifer could raise a personal grievance for unjustified dismissal. 

If Omesh had wanted a trial period for Jennifer, he should have made sure that she:

• agreed to it
• had a chance to get advice and raise any issues, and 
• signed her employment agreement before she started work.