Helping employers navigate 90-day trial periods
Changes to the 90-day trial period for employers with more than 19 employees became law in December 2018. However, most enterprises in New Zealand are small or medium, so most local businesses will still be able to use a trial period.
The latest figures from Statistics New Zealand suggest that 97% of all enterprises are counted as small businesses, even though they employ only 29% of all employees in the country. So what does that mean for you personally?
For small business owners
If you manage a small business, you can still utilise the 90-day trial period provision in your agreements. This means you can hire someone, and if they don’t prove to be suitable for the job, you can let them go within 90 days and the employee won’t be able bring a personal grievance in respect of the dismissal. If you are a small business, please get in touch to discuss how to correctly implement a 90-day trial period. It’s well known that the Employment Court and Employment Relations Authority continually try to limit the application of trial period provisions. There are many loopholes that can invalidate a trial period if you don’t take the right advice.
For large business owners
If you’re one of the 3% of New Zealand businesses classified as a large business (20 employees or more), the 90-day trial period no longer applies to your workplace. However, you will still be able to access probationary periods, which means that, in some circumstances, employees can be dismissed at the end of a chosen period given you have a fair reason for doing so and you inform the employee of this. If you are considering using a probationary period, please get in touch to discuss how to go about this.
How we can help
At Bell & Co, we have employment lawyers who can help employers in businesses of all sizes. As we have noted previously in our blogs, trial periods have specific technical requirements and can be invalid if not utilised correctly. Please call for a no-obligation chat.