Learn what a trial period is, when it may apply and how to navigate termination
What is a trial period and when can they be used?
What protection does this give me as an employer?
What makes a trial period valid?
Managing success throughout the trial period
The trial period is ending soon, can I terminate their employment?
How do I terminate a trial period?
This employee is outside of the trial period, how do I manage underperformance?
My employee hasn’t signed their employment agreement; can I still use the trial period?
My employee will be covered by the Union, does the trial period apply?
I am supporting a work visa application, can I use a trial period?
What is a trial period and when can they be used?
The purpose of a trial period is to allow employers to assess new employees’ skills to determine if they are suited for the position they have been employed.
Trial periods can be used for new employees, as long as they have not been employed with the employer prior. This means you can use it for new employees whereby they have previously been "engaged" by the employer in a different capacity (e.g. temp, contractor).
Legalisation is very clear a trial period can be applied for up to the first 90 days of employment, there is no option to extend beyond 90 days.
What protection does this give me as an employer?
You have legal protection from an employee raising a personal grievance related to dismissal.
Employees can still raise a grievance for other grounds, such as unjustified disadvantage (e.g. you failed to provide training), harassment, or, if the trial period is invalid.
What makes a trial period valid?
- The Employee must be given ‘fair and reasonable time’ to review their employment agreement and seek advice prior to starting with the employer. We advocate for a minimum of 2 full working days.
- Both parties need to have signed the employment agreement prior to the employee’s start date (cannot be the day of their start date).
- The trial period must be clearly stated within their agreement. MyHR employment agreements provide for this.
- They cannot have worked for the company before.
Managing success throughout the trial period
Set regular review meetings throughout the trial period with your employee as this will ensure you are both on track to a successful outcome.
Meetings generally only have to be 10-20 minutes every 2 weeks, unless there are more regular concerns to address. This will provide both parties the opportunity to check all is going to plan and make sure expectations are clear as to what success looks like in the role. Employers are then well set up to take action during the trial period if needed.
Add notes to MyHR in the employee’s person file.
If there are problems, get in touch with the MyHR team early to discuss possible management.
The trial period is ending soon, can I terminate their employment?
Yes you can, so long as the termination is delivered within the 90 day window. We do not recommend leaving it to the last minute in case there are attendance issues or similar which may mean you miss your opportunity to deliver the termination.
How do I terminate a trial period?
You do not need to provide any reason, however, best practice and good faith would be to explain why they have not met expectations.
Best practice is to meet with the employee during the trial period to advise what optimal performance looks like and make it clear that a process that may result in termination may occur if they don’t improve their performance. A guideline is being able to answer the below questions:
- Have you provided feedback to the employee regarding the issues/concerns?
- If so when?
- What was communicated?
- Did you provide clear instructions on what is required for satisfactory performance?
- Did you make it clear that a process that may result in termination may occur if the employee doesn't improve their performance?
If you are satisfised you can answer the above, please put through an Additional request > 90 day trial period termination for the person. Please be mindful of our 2 day SLA for support (i.e. do not request this support on day 90!).
Our team will then review to ensure the trial period is valid, and work with you on the next steps to meet with the employee. As usual, we will provide the required documentation.
This employee is outside of the trial period, how do I manage underperformance?
As the employee has successfully navigated through day trial period, you will need to begin a performance management process to formally manage their performance.
This can be an uncomfortable process for both parties but is a necessary step to ensure the success of both the employee in their position and the overall success of the business.
We recommend you have a record of discussion to address the issues and concerns. Following this discussion, put through an Additional request > Company Expectations for MyHR to draft a letter confirming the agreed outcomes of this discussion.
It is also important to check in with the employee to make sure there is nothing going on that may be negatively impacting their ability to perform.
Should the employee's performance not improve, the next step is to consider a performance improvement plan (PIP). To request this go to the employees profile in MyHR > Manage > Additional Support > My requirement is not on the list > Intro to PIP & PIP
Please include as much information as possible to help us prepare the letter and PIP. If you have had a record of discussion or meeting around these issues please upload a copy of these notes for our reference.
I’ve had several performance discussions with this employee and they aren’t improving, can I terminate?
If they are still in the trial period put through an Additional request and select 90 day trial period termination. While you don’t need to provide a reason for terminating under the trial period, it is good faith to let them know.
If the are no longer in the trial period, put through an Additional request and select My requirement is not on the list > Intro to PIP & PIP for the team to support you to manage.
This employee is starting a new role, can I include the trial period even though they are already employed?
No, you will not be able to keep them on a trial period. This is because it can be argued that they have proved they are an ideal employee by offering them another position within the company.
If you still have concerns about their ability to perform in the new role within the company, you can include a probation period clause instead.
My employee hasn’t signed their employment agreement; can I still use the trial period?
No, this means the trial period is invalid as the employment agreement wasn't signed prior to starting. We have catered for this in the trial period clause we provide which states:
“If the trial period is invalidated for any reason, the Employee and Employer agree that instead, a probation period will apply for the same length of time as the trial period was intended to be.”
You will now need to follow the steps of managing performance under a probation period.
My employee will be covered by the Union, does the trial period apply?
Unless the collective employment agreement allows for a trial period, this can't be applied.
I am supporting a work visa application, can I use a trial period?
No. Immigration NZ have clearly stated from 29 October 2023 employers cannot use 90 day trial periods when hiring on an Accredited Employer Work Visa. The change to employment legislation does not change immigration requirements.