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TRIAL period - PROBATIONARY period

From the 7th May 2019, only businesses with less than 20 employees will be able to use the current trial period legislation. The key change for employers that have 20 or more employees is that employees will have the ability to bring a personal grievance or other legal proceedings in respect of any dismissal. Previously, and on the basis that a solid trial period clause has been included in the Employment Agreement, that has not been the case.

The trial period clause has been beneficial from an employer perspective as there has been reassurance in the knowledge that if the employment relationship is not effective, they have had access to a reasonably straight forward process to terminate the employment.

This changes to some extent with the removal of the trial period. Probationary periods can be used and are not a whole lot different than the considerations you need to make if dealing with an employee’s poor performance during their employment.

Key considerations in managing probationary periods effectively:

1. If you wish to have a probationary period in your employment agreements, it must be compliant, and it must be agreed to by both employer and employee

2. Provide clear expectations and direction on the job responsibilities throughout the probationary period (and beyond)

3. Communicate any issues as they arise through the probationary period ensuring time is provided to rectify any shortfalls

4. Provide the employee with ongoing support and training, very much like a performance improvement plan

5. Provide regular feedback and support through the course of the probationary period so the employee understands what they need to improve and what the consequences may be if they don’t demonstrate that improvement

You may think you have done everything correctly through this process however the key change from the Trial Period clause is that the employee may raise a personal grievance on the grounds of unjustifiable dismissal. If you manage your risk, ensure your employment agreements are up to date with effective probationary clauses and work through a strong process then there is no need to be concerned. If you need to, seek advice as it may save you time and money in the long run!!


If you need help with this change feel free to contact The HR Guy:

E: dylan@thehrguy.nz

M: 021 543 510

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