What is a 90-day trial clause?
A 90-day trial allows an employer to hire a new employee and trial them for 90 calendar days to ensure they are a good fit for the job.
90-day trial periods allow employers to dismiss unsuitable employees without going through a formal process.
However, the critical point here is the employment agreement – which must be signed at least a day before the employee starts working with you and not on the day!
The employee should also initial their 90-day trial clause and sign their agreement.
Who doesn’t qualify for a 90-day trial?
Employers cannot hire an employee under a 90-day trial clause if:
- they have been employed by them prior.
- they have 20 or more employees.
What are the advantages of a 90-day trial clause?
The employee cannot raise a personal grievance on unjustified dismissal if on a 90-day trial. Thus, the employer;
- May dismiss unsuitable employees without going through a formal process.
- Does not need to provide the employee with a reason for their dismissal.
- Must give notice within the 90-day trial period.
- May pay out the employee their notice period without requiring them to work it out.
Case study
We had an employer who had to pay out $7k for unjustified dismissal because the employee had not signed the employee agreement before starting work.
The employee had signed his employment agreement on the day he started. If an employee signs their agreement on the day they start, even if it is 10 minutes into their start date, they are deemed to ‘have been employed by the employer, prior”.
The employer invoked the 90-day trial clause to dismiss him. The employee claimed unfair dismissal.
Once bitten – twice shy.
Though the replacement worker signed his agreement before starting, initialled the 90-day trial clause and signed his contract, he arrived 20 minutes late to work on his first day with no good excuse.
The employer figured if their worker was late on the first day, he would be late on the second and third days.
He asked the employee to go home. The employer thought about it and decided to invoke the 90-day trial clause.
Although the worker was given one weeks’ notice and paid out, our employer felt safe that he had dodged a bullet.
When you sign up to, We Love Tradies HR subscription service, we go through all your employment contracts and make them fit for purpose. If you’d like to know, more find us at www.welovetradieshr.co.nz. Or join our free legal info sessions every second Monday night here https://zoom.us/j/95515887037?pwd=djBWMFZkaDFValo1ODdwck1teWNjUT09
Disclaimer!
We Love Tradies HR Ltd blogs contains only general information about legal matters. It is not intended to be legal advice and should not be treated as, or relied on, as such. For legal advice specific to your set of facts, please contact a lawyer appropriate to your legal issue.
