Unsigned agreement costs employer

00:23, Jan 21 2014
Mary-Jane Thomas
Southland Times Work to Rule employment law columnist Mary-Jane Thomas

Ms K was employed by P. as an office administrator on March 5, 2013.

She was not provided with a written employment agreement prior to her employment and on March 26 her employment was terminated without notice.

Ms K was provided with a written employment agreement containing a "three-month probationary period" on the day of her dismissal but refused to sign it.

Ms K said she was unjustifiably dismissed without notice and sought payment of notice and compensation for the hurt and humiliation suffered as a result of her dismissal.

Surprisingly in light of the clear case law to the contrary the employer claimed that because Ms K was informed at interviews for the position that she would be employed pursuant to a trial period and that if within one month of her commencement of employment it was decided she was not suitable she would be terminated that a 90-day trial period applied to her employment.

They said that Ms K was dismissed "well within" the 90 day trial period and therefore she was precluded from bringing a claim of unjustified dismissal.


It was not disputed that at interview Ms K was told that it was "standard practice of small companies in New Zealand to employ staff on a 90 day trial period and that the position would be subject to a 90 day trial period".

It was also not disputed that it was explained to Ms K that if after one month of employment the employer felt she was not suitable they "reserved" the right to terminate her employment.

Ms K said she accepted these terms but expected that a written employment agreement would be provided if she was offered the position.

Ms K was not given a written employment agreement before she started her employment and one was only provided to her on the date of her dismissal on March 26, 2013.

Ms K started work on March 5. On March 19, two weeks after starting she was asked to attend a meeting with the employer.

At that meeting Ms L (who was Ms K.'s direct supervisor) said she felt Ms K. was quite slow in doing her work and Ms K said she was slow but said that she had only been in the job for two weeks and felt she would improve.

At conclusion of the meeting Ms K was told that it was standard practice that another meeting would be held with her in two weeks' time to see how she was progressing.

In fact one week later at 5.15pm on March 26, Ms K was asked to attend a meeting with the same two managers. She was told that things were not working out.

Ms K offered to discuss a mutual termination of her employment including being given proper notice but the employer told her that no notice was required because she had been employed pursuant to a 90 day trial period.

The employer then produced a written employment agreement dated March 18 which he asked Ms K to sign.

She refused. When she refused to sign the agreement she was asked to leave the premises immediately and not return. On March 27 when she reported for work she was not allowed to work and when she wrote a letter recording she attempted to go to work and requesting she be paid one week's notice, the employer did not reply.

The decision for the authority was very straightforward. Trial periods must be agreed upon and evidenced in writing in an employment agreement signed by both parties at the commencement of the employment relationship.

The trial period applies to "new" employees, not existing or previous employees. If the trial period was valid and had complied with the above provisions then Ms K would have been precluded from her claiming an entitlement to notice and from bringing a personal grievance.

However, Ms K was never presented with a written employment agreement containing a trial period until the date of her dismissal and she had been employed for three weeks by then. The trial period was not valid.

Once Ms K was found to be not a straightforward permanent employee then it was very clear that she had been unjustifiably terminated and therefore the authority looked at remedies.

Ms K sought the payment of one week's notice and that was ordered.

In addition the authority awarded $3000 compensation.

Employers need to understand that a trial period can be used but only under certain circumstances.

This is a classic example of the employer simply not knowing what they were talking about and it costing them money when if they had simply provided an appropriate employment agreement at the commencement of employment none of it would have happened.

* Mary-Jane Thomas is a partner at Preston Russell Law. She is always interested in ideas for articles. Email her at Mary-Jane.Thomas@prlaw.co.nz.

The Southland Times