HR Advice on employee trial v probation period

Changes to the Employment Relations Act on May 6 2019 mean employers with 20 or more employees can no longer include a trial period in Individual Employment Agreements.

Firstly, it’s important to note that the trial period still applies to all employees with a trial period in their Employment Agreement commencing a role prior to when the new regulations coming in.

The new regulations apply to incoming employees on or after 6 May 2019.

What now are the options for employers wishing to terminate new employees who may not be the right fit?

Essentially, not much has changed. The trial period was not intended as a carte blanche for employers to terminate employees.

Employers still had responsibility for reference checking and skill evaluation before taking on new employees, and terminating employment during the trial period still required a robust coaching, induction and performance management process.

Nothing has changed in that regard.

Employers may now introduce probationary periods for new employees

The change of greatest significance is that employers wishing to terminate employees within the early stages of employment must now provide a reason for the termination, and must follow a robust dismissal process including performance management, while for termination under trial period, employers were not required to give a specific reason for termination.

Another key departure for probation period v trial periods is that the employer may end the probation period early if he or she wishes to by formally advising the employee that he or she is no longer under probation

Requirements for including a probation period in an Employment Agreement are:

  • The employee agrees to the probation period
  • Expectations and requirements of the role are made clear, with tangible measures in place
  • Training, support & resources provided are adequate to enable the employee to be successful in the role
  • Adequate time is allowed for the employee to adjust into the role

Employee rights for probationary employees

Employers must treat probationary employees in the same way as those not under probation. New Zealand Employment Law applies to all employees, whether they are probationary or permanent.

Dismissing an employee in a probationary period

The dismissal process is exactly the same for probationary and non probationary employees. Failure to follow robust processes can result in employee grievances including claims that the employer did not give adequate resource or training, that the employer was not clear on expectations and that the assessment process was subjective.

Employers with good documentation processes and positive employee dialogue are unlikely to get into difficulty, as the law requires goodwill from both employer and employee for the relationship to be mutually positive.
Please contact us for more information regarding probationary periods.

HR Advice on probationary period v trial period


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