Posted on: Sep 04, 2013
Yet another 90 day trial period mistake
The Employment Relations Act 2000 (the Act) makes provision for hiring employees on trial periods for up to 90 days. If the employee proves to be unsatisfactory, provided the requirements of the Act are met, the employee can be dismissed without following the normal performance management process. Despite this very useful provision, employers continue to ask prospective employees to “do a half day” (or whatever time is agreed) to “see how they get on”. If the worker is not engaged following the test, trouble can follow because the disappointed worker may be motivated to raise a personal grievance claiming he or she was an employee and has been unjustifiably dismissed. If the Employment Relations Authority accepts that the worker was an employee then the employee will undoubtedly win the case.
In Howe-Thornley v The Salad Bowl Ltd  NZERA Christchurch 25, Howe-Thornley (HT) applied for a job preparing and selling salads and operating a salad cart. HT maintained she was offered a job after an interview. The manager of the Salad Bowl Ltd denied that she had offered HT a job and said she and HT had agreed HT would undergo a three-hour trial period to ascertain HT’s suitability for the job. HT worked for about two hours and was taught to operate the till. When the manager counted the day’s takings there was a shortfall of $52.36. The manager concluded HT had taken a $50 note that was in the till and sent HT a text telling her not to come into work on the following day and that the manager would be in touch. When HT inquired as to her start date, the manager told her to return her t-shirt and feel free to get another job because money was missing from the till. The manager had intended to pay HT for the work trial but did not do so because of the missing money.
HT raised a personal grievance for unjustified dismissal. The first issue to be decided by the Employment Relations Authority was whether HT had become an employee. The Authority concluded that the fundamental characteristics of an employment agreement were present: an exchange of labour for remuneration. The Authority said at ,
It is arguable the industry practice Ms Westphal [the manager] evidenced of a short unpaid trial followed by a formal 90 day paid trial is an unlawful devise which deprives prospective employees of their statutory rights.
The Authority awarded HT $5,000 in compensation for humiliation and six weeks’ lost wages.
The case makes it clear that, rather than give a prospective employee a “test run”, the employer should engage the employee on a short trial period that complies with all the requirements in the Act. This is just another case to add to the pile that highlights the importance of getting the trial period right. Please contact the team at Paul Diver Associates before you use a trial period to ensure you comply with the current legislation in this area.
The Salad Bowl has challenged the decision of the Authority and the Employment Court has heard the case. At the time of writing the EC judgment (The Salad Bowl Ltd v Howe-Thornley  NZEmpC 77) was not available.
This article, and any information contained on our website is necessarily brief and general in nature, and should not be substituted for professional advice. You should always seek professional advice before taking any action in relation to the matters addressed.