Trial periods go wrong again - Precision needed on start dates

Employment Update

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Recently, the Employment Relations Authority (Authority) held that a trial period clause in an individual employment agreement was invalid because it did not specify the date on which the trial period commenced.

In Clark v Lighthouse ECE Limited ([2016] Auckland 281), the employee, an early childhood teacher, gave notice of her resignation, and in response the employer terminated her employment under the 90 day trial provision. 

The employee claimed the 90 day trial period did not meet the requirements of section 67A of the Employment Relations Act 2000 (Act), as the clause in her employment agreement did not specify the start date of the 90 day trial period. The employer argued it was an overly technical interpretation of the Act to argue a trial period may not start on the first day of employment. The Authority noted there were a number of circumstances in which it is feasible an employee's trial period would not start on the commencement date of employment. So, the Authority held that the trial period clause was invalid, as the employment agreement "did not reasonably imply that the 90 days started on the first day the teacher started work".

Three other employees (Amanda Honey, Henrietta du Plooy and Leeann Baxter) of Lighthouse ECE Limited brought proceedings against Lighthouse ECE Limited on the same grounds, and the Authority also found their trial clauses to be invalid, thus allowing the employees to raise personal grievances in relation to the dismissals. 

If you are an employer with trial provisions in your employment agreements, it is vital you check your agreements and ensure the 90 day trial period clause sets out the date on which the trial period commences. This can be done either by stating a date, or by stating expressly that the trial period runs from when the employment commences. 

If you have any questions, or require further information regarding any aspect of this update, please contact us.

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