A recent case serves as a reminder to employers that the
Employment Relations Authority is continuing to take a strict
approach to interpreting and applying trial period provisions.
The recent Employment Relations Authority case of Honey v
Lighthouse ECE Learning Limited  NZERA 284 serves as a
reminder to employers that the Authority and Employment Court are
continuing to take a strict approach to interpreting and applying
trial period provisions.
Ms Honey was employed as an Early Childcare Teacher by
Lighthouse ECE Limited. Her employment agreement included a 90 day
trial period provision. The employer felt that Ms Honey's
performance was not up to the required standard during the first
six weeks of employment and terminated her employment under the
Ms Honey and three other employees terminated under the trial
period around the same time challenged the validity of the trial
period provision on the grounds that it did not comply with the
requirements of the Employment Relations Act 2000 (the Act).
Specifically, s 67A(2) states a "Trial
provision means a written provision in an employment
agreement that states, or is to the effect, that – for a
specified period (not exceeding 90 days), starting at the
beginning of the employee's employment, the employee
is to serve a trial period..." (emphasis added).
The clause in Ms Honey's agreement stated "A trial
period will apply for a period of ninety (90) days (...) under
s.67A Employment Relations Act 2000, to assess and confirm the
suitability of the Employee for the position (...)".
Ms Honey said this did not meet the requirements of s 67A(2)
because it did not state when the trial period would begin. The
employer argued the trial period did meet the requirements because
the commencement date was set out in a schedule to the employment
agreement and it was clear that the parties intended the trial
period to begin at the commencement of Ms Honey's
The Authority found that the trial period clause did not
expressly state that the trial period started at the beginning of
Ms Honey's employment. It was therefore necessary to decide
whether or not the reference in the clause to the fact that the
trial period would "apply for a period of 90 calendar
days" met the requirement of s 67A(2) that the clause is
"to the effect" that it started on Ms
Honey's first day of employment.
The Authority found that those words did not reasonably imply
that the 90 days started on Ms Honey's first day of employment,
and that the failure to specify when it would start, or include
words to that effect, meant Ms Honey was not effectively advised of
when the trial period would commence. The employer was therefore
prohibited from relying on the trial provision.
This case is a timely reminder to all employers to check your
employment agreements and ensure they strictly comply with the
requirements of the Act. Unfortunately we see too many employers
rely on trial periods which seem adequate, but when scrutinised in
light of these recent cases are at real risk of being held invalid
if challenged in the Authority.
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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