Trial and Probation Periods are two completely different beasts – a guide to what, when, where and how for veterinary clinics and their employees
Relying on a trial period, if applied or executed incorrectly, may come back to bite an employer later.
Here’s an overview of what the differences are between trial and probation periods and how to apply and use each correctly.
SMALL PRINT DISCLAIMER: I’m a recruiter. I’m not a lawyer: I match best veterinary professionals to best veterinary clinics. In a previous life I’ve worked for some of NZs biggest law firms – I saw and learnt a lot. In my current VetStaff life I get to see employment agreements of all different shapes and sizes. I am not an employment lawyer. This is intended to be a guide only, not legal advice. If you want legal advice, please see your lawyer. If you want the best vet staff, please call me 0800 4 VET NZ (0800 483 869) or email me: julie@vetstaff.co.nz At the bottom of this article is a summary table – I’m happy to email you a PDF copy for your files if you’d like it – just let me know.
s67A of the Employment Relations Act changed on 6 May 2019
As from 6 May 2019, s67A of the Employment Relations Act (ERA) now distinguishes between employers with fewer or more than 20 employees. Those employers that are under can, and those that are over cannot include Trial Periods in their Employment Agreements (EA).
Section 67A of the ERA is the bit of law about whether an EA may contain provision for a trial period for 90 days or less or not.
Both probation and trial periods are designed to test out the employee/employer fit
Trial and probation periods are available for both parties to see whether the working relationship is a good fit between them.
As an employer, including a 90-day trial clause in your EAs (provided it’s executed correctly) prohibits an employee from filing a personal grievance claim against you in the event of dismissal.
A probation period can still be used to determine whether the employee/employer relationship is going to work, but termination cannot (usually) happen summarily like it can with the trial period clause.
For example, you could dismiss a new employee who’s on trial if there are personality incompatibility issues. Whereas, if they were working on probation, the law wouldn’t consider incompatibility as an issue unless it was very (very!) serious.
Correct execution and administration of trial and probation periods is critical
There are correct ways to include trial period and probation period clauses in EAs. With trial periods, timing is everything.
90 Day Trial Periods – the employer
Ninety days is the longest a trial period can be. This is considered fair and reasonable for an employee to prove themselves and for an employer to determine competency and acceptability of an employee.
If an employee belongs to a union and is employed on a collective employment agreement, the employer cannot have a trial period (or any other clause in their individual terms and conditions) that’s inconsistent with the collective employment agreement.
For example, if the collective employment agreement states that an employee cannot be employed on a trial period, then they cannot have a trial period in their individual terms.
- The 90-day trial period must be in writing in the EA and state that:
- from the very start of their employment, the employee will be on a trial for a set period which isn’t more than 90 days (but can be less). The exact time period must be stated, eg, it could be 30 days, or 90 days, or another stated time period (weeks); and
- during the trial, the employer can dismiss the employee, and
- the employee cannot bring a personal grievance or other legal proceedings about their dismissal.
- An employer must verbally tell an employee prior to starting, they are on a 90 day trial period and what will happen at the conclusion of that period. Even though the trial period is written into their EA the conversation must still take place.
- Trial periods are only available to new employees. This means if an employee changes job within the same organisation (of 19 or fewer employees) they cannot be on a trial period in their new role. Trial periods are a once-only thing.
- The EA must be signed before the day the employee starts work. Signing an EA with a 90-day trial period in it, five minutes before reporting for duty on the first day of work, will render the trial period clause null and void.
- The EA must have a valid notice period included.
- Trial periods must be agreed by both parties in good faith. An employee cannot be coerced into being employed in a trial period. {{NB: This is why EAs must be signed at least the day before reporting for duty}}
- Notice of termination must be given by the employer to the employee within the 90 day period. If no notice is given, the employee is considered no longer on trial and their employment will continue. Any dismissal after a trial period finishes needs to follow due process and an employee can pursue personal grievance (PG).
90 Day Trial Periods – the employee
Employees also have rights and responsibilities for their trial period to be valid.
Even though PG cases cannot be brought against an employer for dismissal under the 90-day trial clause, an employee can still bring a PG on grounds other than dismissal, for example:
- Discrimination
- Sexual harassment
- Racial harassment
- Religious harassment
- Pressure about union membership or affiliations
- Continuity of employment under Part 6A of the ERA. [Part 6A is the bit in the ERA that provides protection to specified categories of employees if, as a result of a proposed restructuring, their work is to be performed by another person]
- If an employer does something that unjustifiably disadvantages the employee
- If an employee starts working before the contract is signed
- If the EA does not mention there is a trial period, or
- The EA does not contain a notice period in the event of resignation or dismissal
If any of these events occur an employee may be able to take a PG against the employer and the trial period may be deemed to be invalid by the Employment Relations Authority.
Giving notice of dismissal during a Trial Period
If the employer decides to dismiss the employee during the trial period because things aren’t going well, there is still a due process to follow. However, as most kiwis know, trial periods are weighted heavily in favour of the employer. Having said that though, due process is critical.
An employer must give notice to an employee that they will be dismissed. Such notice:
- Must be the amount of notice specified in the EA. If the employer doesn’t give the employee the right amount of notice then the trial period is invalid and the employee will continue to be employed. Or, if they were dismissed, an employee could bring a personal grievance for unjustified dismissal.
For example, the employer cannot give immediate effect to an employee’s dismissal if the notice period states (say) one week. Whatever the notice period in the EA states is how much notice must be given for dismissal within the trial period.
- Must be given within the trial period. Even if the actual dismissal takes effect after the trial period ends, notice must be given before the end of the trial period.
For example, if the trial period is 90 days and the notice period is one week, the employer must give notice to the employee before the end of the ninety days, even though the employee won’t leave until the end of their notice period.
- Employer doesn’t have to have reasons for the employee’s dismissal. However, even though the employer doesn’t have to give any reason(s) for dismissal during a trial period, or even give the employee a chance to comment before the dismissal, it’s good faith practice to tell the employee why they’re being dismissed if they ask for one.
If the employee asks for a reason the employer must provide it.
Probation periods
Probation periods are available for employers to use to see whether an existing employee can do a new job, or to see whether a new employee can perform the job.
Probationary periods must be stipulated in the EA.
All probationary periods must be fair and reasonable. Fair and reasonable probationary periods can be:
- a good way for an employer to assess an employee’s skills;
- help a person new to a job (or employer) demonstrate they’ve got what it takes to do the job.
Probation periods must be written in the EA. For an employer to put a new employee on probation, they must include it in the employee’s EA. It should be called Probation(ary) Period and not disguised under some abstract heading or buried in a totally irrelevant clause. Probation periods should clearly state how long such period will be.
As with a trial period – even if it was agreed to in a verbal conversation but wasn’t written into the employee’s EA – then there is no probation period. It must be in writing for it to be valid.
Probation periods must be in good faith; can be for any length of fair and reasonable time but cannot be applied after a trial period. An unreasonably long probation period would not be considered good faith. Neither would an employee making it through a trial period, but then being required to enter into a probation period, be considered good faith (which is unlawful in NZ).
Employers cannot use probation periods to get an employee (or potential employee) to work for free.
The rights and obligations of both the employee and employer are not limited.
In addition to what a probation period must include (or not) there are also prescribed processes an employer must follow whilst an employee is on probation. Such processes must be fair, per:
- employees must be told of any performance issues and whether there is the chance their employment may be terminated after the probation period ends;
- employees must be told what the issues are and what good performance (for this job) looks like;
- employees must receive support, together with ongoing and appropriate training (so they can achieve the required level of expected performance);
- employees must be given the opportunity to improve. Ergo, the employer should be giving the employee feedback, support and training throughout the probationary period, so they know there are issues and they have a chance to improve before the end of the probationary period.
Good employer practice includes telling employees who are working through probation periods what support, training and feedback they can reasonably expect to receive from the employer. Obviously, with good process, an employer that offers an undertaking like this is expected to deliver on its promise.
In the event an employee performs so well an employer believes a probation period is no longer necessary, it can be removed. However, both parties must agree. The employer needs to get the employee’s agreement to finish the probation period early (in writing).
Likewise, an employer can extend a probation period provided the employee agrees but this extension must be fair and reasonable and the right to do so must be included (in writing) in the EA.
An employer cannot make unilateral changes to an employee’s EA without the employee’s agreement.
During the probation period
As well as having all the small print in line with NZ employment law, there are certain steps a good faith employer must follow during / after the probationary period.
Regular performance reviews
To avoid an employee taking a PG against an employer for unjustified dismissal (or any other raft of reasons) an employer will:
- demonstrate to the employee what performance is expected of him/her for this particular job;
- give the employee what they need so they can do the job:
- on the job training and coaching
- all the resources (tools, equipment, etc) necessary to do the job
- appropriate support to do the job according to the employer’s expectations
- provide a means for the employee to check in and make sure they’re doing everything according to expectations – employees need to be able to ask questions and/or raise concerns;
- give the employee fair and reasonable time to get up to speed;
- keep written records of all conversations / meetings relating to probation period performance reviews.
Dismissing an employee
Dismissing an employee who didn’t perform according to the employer’s (mutually agreed) expectations, requires due process to still be followed. These processes are exactly the same as if the employer was dismissing an employee who wasn’t on probation.
An employer must tell the employee why their employment is being terminated. The employee must have the right to respond (unlike a Trial Period where an employee has no right to respond). Employers must consider this response. If they decide to continue with dismissal the amount of notice given to the employee must be that as written in the EA.
IF an employee believes they have been unfairly dismissed, they have the right to take a PG against the employer. They can do this if they believe:
- the employer didn’t provide them with the resources, training and/or support to perform to the employer’s expectations;
- the employer had no good reason for dismissing the employee;
- the assessment process was unfair.
In summary
If you’d like a copy of this comparison table for your records, please send me an email and I’ll send you an A4 PDF copy
