Trial periods for new employees were first introduced to the Employment Relations Act 2000 in 2010 for employers with fewer than 20 employees. That was extended to companies with any number of employees in amendments to the Act which came into effect on April 1 2011.
It would be fair to say that since then trial periods have caused a considerable amount of confusion as employers struggle to understand the rules that govern their use and each new case seems to raise further issues that employers were previously unaware of.
Trial periods can be used only for new employees who have never worked for the employer.
That means if an employee starts their first day of work at 8am but does not sign an individual employment agreement (IEA) until 10am on the same day, they are no longer a new employee and the trial period will likely be invalidated. Even if someone worked for you for three days 10 years ago, they are no longer a new employee - but it gets even more complex.
Following the 2011 case of Blackmore v Honick Properties Limited, the Employment Court held that once a person accepts an offer of employment they have already become an employee even if they do not start work until one day or one month later.
Although someone intending to work was already defined in the Act as an employee, the ruling in Blackmore means that a trial period has to be agreed to and accepted by an employee at the same time as they accept the offer of employment.
Many employers already struggle to get employees to return their signed IEAs, so how are they supposed to get employees who have not yet started their employment to return a signed agreement at the same time that they accept the offer of employment?
One suggestion is to make the employment and trial period commencement date and even the offer of employment itself conditional upon the return of a signed employment agreement. That way, offer and acceptance has not been completed and they have technically not become an employee until they have actually signed and returned their IEA.
Section 63A of the Act also requires employees to be given a reasonable opportunity to seek advice before signing an employment agreement. It therefore pays employers, whether they include a trial period in their employment agreements or not, to give employees an IEA before their first day of work and to have them signed and returned in advance of their start date.
Erin Burke is a senior solicitor with the Employers and Manufacturers Association (Northern) Incorporated and is based in Hamilton.
- © Fairfax NZ News
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