Does the 90 day trial apply to every case?

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A woman has been awarded $13,000 compensation for an unfair dismissal, despite only having been employed for nine days – but why didn't a 90 day trial period prevent this from happening?

Anna Faulls began working at Italia Square, a restaurant in the Auckland suburb of Parnell, on December 1 last year. Upon being hired, no agreement over a trial period was negotiated between Faulls and her employer, Sean Aram.

Faulls was sacked by Aram, the restaurant’s owner, on December 9, after she instructed her co-workers to go home based on instructions given to her by his wife.

The Employment Relations Authority (ERA) found that Faulls’ dismissal was unjustifiable, and she was consequently awarded $6342.50 for lost wages, $592.80 for unpaid holiday pay and $6000 as compensation for “humiliation, loss of dignity and injury to her feelings”.

On December 9, the restaurant was due to open, but was not completed and was still awaiting fire and liquor permits.

Faull had a conversation with Aram’s wife, which ended in an agreement that Faull should send staff home as the opening was unlikely to occur that evening.

When Faulls next saw Aram, he confronted her and told her that the restaurant no longer needed her without allowing her to explain the situation.

He later confirmed her dismissal via email.

“Mr Aram’s evidence about the circumstances of Ms Faulls employment and the events leading up to her dismissal was inconsistent,” authority member Anna Fitzgibbon found.

HRD spoke to Blair Scotland, partner at Dundas Street Employment Lawyers, who explained that the employer could have been protected if a trial period was formally agreed upon.

“You’ve got to the trial period into the written employment agreement for it to be valid,” Scotland said.

“The trial must be legally compliant, and the employee has to agree to it by signing the contract.”

He added that this agreement must be made before the individual commences employment for the company.

“You can’t have the employee come in on their first day and ask them to sign an agreement five minutes after starting,” Scotland told HRD.

“The 90 day trial is also only applicable to what is known as a ‘new employee’ – this rules out anyone who has commenced work or worked for the company in the past.”

“It’s weird to think a small employer wouldn’t have a trial period in their employment agreements.

“They tried to employ Faulls on a casual basis – who knows whether this was legitimate or not, but they obviously didn’t use the trial period.

“There have been a couple of cases recently where small employers have claimed that they thought they could dismiss an employee in the first 90 days – and they could if it had been negotiated with the employee, but they haven’t, so they can’t.”

A number of New Zealand’s leading employment lawyers will be sharing their advice with HR professionals at the Employment Law for HR Managers masterclass in March.

For more information or to make a booking, click here.
  • Bruce on 4/11/2015 8:41:50 p.m.

    For the cost of 20 minutes on the MBIE website any small employer on a budget can learn what they need to know to be compliant as an employer. If they don't see that obligation as an incident of being an employer, they deserve what they get IMHO Of course whether the employee actually gets paid is another issue...

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