Trial Periods & Tribulations
This article was written by Graeme Riach and was first published in Canterbury Build Magazine May 2015 issue.
The rapid up scaling of contractor firms due to the huge increase in work from the Canterbury rebuild has resulted in many difficulties related to employment of staff. Builders and other tradies who for years operated perfectly well by themselves have been required to take on employees to cope with the workload and consequently have been drawn into the mine field of employment law. Having appropriate employment agreements, disciplining staff, sorting out pay and PAYE obligations are particularly difficult areas.
The use of trial periods and knowing when they are enforceable can also trip up unwary employers. With shortages of skilled labour it can be a real benefit to employers to take on workers on a trial basis. The current employment legislation allows this and arguably encourages it by making it unlawful for employees to bring personal grievances if they have been dismissed during the trial period – except on certain grounds such as discrimination. But there are real fish hooks associated with trial periods. The Employment Courts have strictly interpreted the legislation so it is vital to get everything absolutely correct in order to obtain the statutory protection. In particular:
- The trial period only applies to new employees.
- The trial period must be part of a written employment agreement.
- The intending employee must be given an adequate opportunity to read and take advice on the contract before they sign it.
- The agreement must be signed before the employee commences work. Even a contract signed later on the first day of work has been held to be insufficient as the person was already an employee – and therefore not new - when they signed!
- The trial period clause in the agreement must be worded properly to achieve the protection.
- The over-riding requirement to use good faith in employment dealings means that the employee being dismissed should be at least told of the reasons why.
- The notice of dismissal must be given during the trial period although it may expire after the trial period.
These principles apply equally to casual and part time staff. It is therefore vital that employers get appropriate advice on their employment agreements and ensure that these are up to date and compliant with the legislation. The process of employment must be understood. Money spent on this now will save much more expense later if it all goes wrong and a personal grievance lands in your mail…