Larger employers’ options following restriction to trial period

Have you relied on the 90-day trial period as a fallback option for poor hiring decisions?

If you’ve ever hired the wrong recruit for your business, you may have relied on the 90-day trial period as grounds for dismissal.

Perhaps an employee miscalculated measurements, stalled on sales, or took too long to complete tasks. An employee who fails to improve can be dismissed within the first 90 days and cannot raise personal grievances or other legal proceedings relating to the dismissal.

Until recently, any New Zealand employer could agree to the 90-day trial period to assess the suitability of new staff.

Recent law changes have restricted 90-day trial periods to small-to-medium businesses.

From 6 May 2019, employers with 20 or more staff can no longer agree to 90-day trial periods as grounds to dismiss staff.

So, what are the options for a larger employer if your new employee is not the right fit for the job?

Recruit wisely

Businesses who can no longer agree to the 90-day trial period should take greater care with their recruitment processes.

Employers wanting to select the right candidate for their business should conduct several different assessments, such as structured interviews, work sample testing, and reference checks.  Interview questions should check whether the job candidate has the requisite skills, knowledge and attributes for the role.

Pre-Work Trials

A practical test or pre-work trial are the best methods for assessing a job candidate’s suitability trial.

Before conducting a pre-work trial, businesses should clarify in writing that the pre-work trial is part of the recruitment process, without any expectation of payment or ongoing employment.

Observe the job candidate during the pre-work trial and establish whether a job candidate can work well with others by introducing them to the team.

Any work undertaken during a pre-work trial should not have any economic benefit for your business. For example, a job candidate can make a coffee for a business owner, but not a paying customer.

Probationary periods

All employers can continue to use probationary periods to assess an employee’s skills against the role’s responsibilities.

Probationary periods set out the process for managing performance issues and ending employment if the issues aren’t resolved.

Probationary periods are an alternative option for employers wanting to manage under-performance early in the relationship.  However, employers could potentially face personal grievance action relating to dismissals under probationary periods.

Given the potential scrutiny for termination under probationary periods, employers should inform the employee if there is a performance issue.

Provide the employee with the opportunity to improve, and additional support as required, including training and mentoring.  Assess their performance fairly and respond to any issues prior to dismissal.

Otherwise, it could be your business on trial.

For further information, see Kineo NZ online courses on people management, such as Identifying Poor Performance, Misconduct and Absenteeism. 

KiwiBoss is the subject matter expert for Kineo courses in NZ:


Read this post on the New Zealand Herald website.