What are the legal rules for a 90-day trial period in NZ?

Under s67A of the Employment Relations Act 2000, a 90-day trial period (also called a probationary period) allows an employer to dismiss an employee within the first 90 days without the employee being able to raise a personal grievance for unjustified dismissal.

Strict requirements for a valid 90-day trial:

Must be in writing — The trial provision must be in the signed employment agreement

Must be agreed before work starts — The agreement must be signed before the employee's first day. If signed on day one or later, the trial is invalid

Employer must have fewer than 20 employees — As at the date of the agreement being entered into

Employee must be a new employee — Cannot be used for someone who has previously worked for the same employer

If the trial is invalid: If any of these conditions are not met, the trial provision is void. The employee can raise a personal grievance for unjustified dismissal just as any regular employee can.

What employers can still do under a valid trial:

• Dismiss within 90 days without the employee raising a PG for unjustified dismissal
• The employee still retains rights under the Employment Relations Act (e.g. cannot be dismissed for discriminatory reasons)

Common employer mistakes:

• Not having the agreement signed before day one
• Using a trial for an employee with over 20 staff
• Re-employing a former employee under a trial

Source: Employment Relations Act 2000, s67A — View on legislation.govt.nz