Since its inception in 2011, the 90 day trial period has been
the source of substantial controversy, interpretation and analysis.
Throughout this, a golden thread has emerged whereby the provisions
are interpreted strictly and employers must be careful in
exercising their rights to dismiss pursuant to the trial
This was highlighted recently in the decision of Hutchison v
Canon New Zealand Limited where verbal notice of termination
given within the 90 day trial period was held to be insufficient
when the parties had agreed that written notice must be given.
In that case, Mr Hutchison had signed an employment agreement
which included a 90 day trial period. It stated that Canon could
terminate his employment at any time during the trial period by
giving "one week's written notice or payment instead of
notice". On the 89th day of his employment, Mr Hutchison was
told by Canon that his employment was being terminated pursuant to
the 90 day trial period provision because of concerns regarding his
Canon paid out Mr Hutchison's holiday pay and one week's
notice that same day. However Mr Hutchison's termination was
not confirmed in writing until three days after the trial period
Mr Hutchison argued that Canon failed to comply with several of
the requirements for a lawful trial period and therefore argued
that he was not barred from pursuing a personal grievance for
Although there is no requirement under the legislation that
notice be given in writing, the Employment Relations Authority in
this case found that Canon had not satisfied its contractual
obligation to provide written notice before the end of the trial
period. Put another way, Canon had not complied with the terms of
the employment agreement. It did not matter that Mr Hutchison had
been given verbal notice before the end of the trial period.
The Authority found that Mr Hutchison was therefore entitled to
bring a claim of unjustified dismissal.
Another recent case also highlights the difficulties with
relying on trial periods to dismiss. In Hall v Smith Crane
& Construction Limited the employee, Mr Hall, had signed
an offer of employment letter before starting work but did not sign
the employment agreement enclosed with the offer letter until after
starting work. The employment agreement contained a 90 day trial
provision. The Authority held that Mr Hall was not a
"new" employee at the time he signed the employment
agreement so the trial period was not valid and the employer was
not entitled to rely on it in dismissing him where there were
concerns about his competence. Mr Hall was awarded $31,326 in lost
remuneration and $7,000 in compensation for hurt, humiliation and
These decisions reinforce the message that employers should be
extremely careful when attempting to terminate an agreement under a
trial period provision. While the 90 day trial period provisions
are intended to provide employers with increased flexibility, there
strict rules which govern the process.
Briefly, the requirements for a lawful trial period are
It is contained within a written employment agreement;
It is signed by the employee before any work
It must comply strictly with the Employment Relations Act 2000;
An employer must comply with the terms of the employment
If those requirements are met then the employee may not bring a
personal grievance or legal proceedings in respect of any dismissal
pursuant to the trial period. However, other claims can still be
raised such as unjustified disadvantage and breach of the duty of
We encourage employers to check the wording of their trial
period provision and seek advice before dismissing an employee
pursuant to a trial period.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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